NO. 07-11-00494-CV IN THE COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TEXAS AT AMARILLO PANEL D FEBRUARY 17, 2012

IN RE RUBY TEQUILA'S AMARILLO WEST, LLC, RUBY TEQUILA'S LUBBOCK SOUTH, LLC AND RUBY TEQUILA'S MEXICAN KITCHEN, LLC, RELATORS

Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.

ON PETITION FOR WRIT OF MANDAMUS
This original proceeding concerns enf orcement of forum-selection clauses contained in three documents. Relators R uby Tequila’s Amarillo West, LLC, Ruby Tequila’s Lubbock South, LLC, and Ruby Tequila’s Mexican Kitchen, LLC, 1 (collectively, “Ruby Tequila’s”) seek a writ of mandamus compelling respondent, the Honorable Ana Estavez, judge of the 251st District Court, to vacate an order denying their motion to dismiss a suit brought by real parties in interest RT Soncy Pa rtnership, Ltd. and RT Lubbock Partnership, Ltd. 2 We will deny Ruby Tequila’s petition.

1 According to their petition, Ruby Tequi la’s Amarillo West, LLC (“Amarillo West”), and Ruby Tequila’s Lubbock Sout h, LLC (“Lubbock South”), are subsidiaries of Ruby Tequila’s Mexican Kitchen, LLC (“RTMK”).

2 We will refer to real parties in inte rest individually as Soncy Partnership and Lubbock Partnership.2 Background 3

Relators Amarillo West and Lubbock So uth operate restaurants in premises leased in Amarillo from Sonc y Partnership and in Lubbock fr om Lubbock Partnership. The leases are dated February 8, 2008, and do not contai n forum-selection clauses. In July 2009 RTMK became a guarantor of the obl igations of the lessees Amarillo West and Lubbock South under the leases. On November 9, 2010, Ruby Tequila ’s, Soncy Partnership and Lubbock Partnership (in other words, al l of the relators and real parties in interest in this mandamus proceeding), t ogether with other individuals and entities not parties to the litigation, executed documents that altered the previous business relationships among the parties. By one of t he documents, entitled Separa tion, Settlement and Release Agreement, (the “Release”), 4 Soncy Partnership and Lubboc k Partnership released certain claims against other parti es, including Ruby Tequila’s.

The Release contains a forum-selection clause by which litigation “asserting a breach of the Release” is to be brought in Dela ware or in Texas, depending on which side is alleged to have committed the breac h. Paraphrased with the names of the parties to this litigation, the clause reads, in relevant part: [A]ny litigation asserting a breach of [the Release] brought by [Soncy Partnership or Lubbock Partnership] shal l be brought in a court presiding

3 The documents and transactions relators discuss in their petition for mandamus are complex. The parties are familiar with them, and in this memorandum opinion we mention only those facts necessary to an understanding of our decision.

4 In this opinion we adopt the short hand designations for the documents used by the parties.3 in the State of Delaware, and any lit igation asserting a breach of [the Release] . . . brought by [Ruby T equila’s] shall be brought in a court presiding in the State of Texas. Exhibit A to the Release is a document dated as of September 24, 2010, entitled Second Amended and Restated Limited Liab ility Company Agr eement of Ruby Tequila’s Mexican Kitchen, LLC (the “Operating Agreement”). 5 It also contains a forumselection clause, providi ng in relevant part: Any action, suit or proceeding in connection with [the Operating Agreement] must be brought against any Member or the Company in a court of record of the State of Dela ware, County of New Castle, or of the United States District Court for the District of Delawa re or in any state or federal court in the State of De laware, each Member and the Company hereby consenting and submitting to t he exclusive jurisdiction thereof[.] On February 11, 2011, the parties executed a document entitled Amendment No.1 to Separation, Settlement and Rele ase Agreement, (the “Amendment”). The Amendment contains a forum-selection cl ause like that in the Release. On September 29, 2011, Soncy Partnership and Lubbock Partnership sued Amarillo West, Lubbock South, and RTMK in the 251st District Court of Randall County. The plaintiffs sought declaratory relief or dam ages for alleged breaches of the leases by Amarillo West and Lubbock South and damages from RTMK as guarantor of the leases. The plaintiffs’ pleadings all eged the lessees had breached the leases by failing to keep the premises in good repair and failing to co mply with local food establishment rules.

5 The Operating Agreement identif ies Soncy Partnership and Lubbock Partnership as “investor members” of RTMK . According to RTMK, Soncy Partnership and Lubbock Partnership are cont rolled by an individual wh o until 2010 served as chief executive of RTMK.4 Ruby Tequila’s answered by general denial and asserted affirmative defenses including release, failure of condition pr ecedent, waiver, and violation of the forumselection clause contained in t he Release and the Amendment. 6
Additionally, Ruby Tequila’s filed a moti on to dismiss the underlying suit based on the forum-selection clauses in the Release and the Amendment. 7 A supplemental motion added as a basis for dismissal the forum-selection clause in the Operating Agreement, asserting the underlying suit “am ounts to merely a lawsuit by certain of Ruby Tequila’s equity holders agai nst [RTMK] and its affiliates.” At the hearing on the motion to dismi ss, the trial court admitted certain documents into evidence and excluded others but it did not receive testimony. It denied the motion and Ruby Tequila’s br ought this mandamus proceeding. Analysis Ruby Tequila’s asserts the trial court abus ed its discretion in denying its motion to dismiss because the causes of action Soncy Partnership an d Lubbock Partnership assert in the underlying suit are within the scope of the forum-selection clause of the Release, the Amendment, and the Operating Agreement, and Soncy Partnership and

6 Ruby Tequila’s also reques ted an award of attorney’s fees according to Civil Practice and Remedies Code § 37.009 “subject to dismissal of this action for forum non conveniens .” (Italics in original). See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (West 2008).

7 In a footnote to the motion concer ning the Release and the Amendment, Ruby Tequila’s explained “the Forum Selection Provisions were highly negotiated. Pursuant to these negotiations, Ruby T equila’s, a Delaware entity, c onceded that if it had cause to bring a legal action agains t [Soncy Partnership or Lubbock Partnership], such action would be brought in Texas.”5 Lubbock Partnership failed to m eet the burden of proof required of a party seeking to resist enforcement of a forum-selection clause. A motion to dismiss is the proper pr ocedural means of enforcing a forumselection clause. Phoenix Network Techs. (Eur ope) Ltd. v. Neon Sys., 177 S.W.3d 605, 610 (Tex.App.--Houston [1st Dist.] 2005, no pet.). A writ of mandamus will issue if the trial court committed a clear abuse of discr etion for which the relator has no adequate remedy at law. In re Laibe Corp., 307 S.W.3d 314, 316 (Tex. 2010) (orig. proceeding) (per curiam). When a trial court denies enforcement of a forum-selection clause the aggrieved party lacks an adequat e remedy by appeal. In re AutoNation, Inc., 228 S.W.3d 663, 667-68 (Tex. 2007) (orig. proceeding) (“forum-selection clauses--like arbitration agreements, anot her type of forum-selection clause--can be enforced through mandamus” (internal quotation marks omi tted)). And a trial court clearly abuses its discretion when it improperly refuses to enforce a forum-selection clause. In re Laibe Corp., 307 S.W.3d at 316. When a party seeks to enforce a forum-sele ction clause, the trial court must first determine whether the claims as serted in the lawsuit fall wit hin the scope of the clause. See In re TCW Global Project Fund II, Ltd., 274 S.W.3d 166, 169 (Tex.App.--Houston [14th Dist.] 2008, orig. proceeding). If the cl aims fall within the scope of the forumselection clause, the court then must decid e whether the clause is enforceable. Id. We apply a common-sense examinat ion of the underlying claim and the forum-selection clause to determine if the claim come s within the scope of the clause. In re Lisa Laser USA, Inc., 310 S.W.3d 880, 884 (Tex. 2010) (ori g. proceeding) (per curiam).6 If the court is satisfied with this th reshold showing, the party resisting enforcement of the forum-selection clause t hen assumes the heavy burden of clearly demonstrating: (1) enforcem ent would be unreasonable or unjust, (2) the clause is invalid for reasons of fraud or overreaching, (3) enforcement would contravene a strong public policy of the forum where the suit was brought, or (4) the selected forum would be seriously inconvenient for trial. In re Lyon Fin. Servs., 257 S.W.3d 228, 231-232 (Tex. 2008) (orig. proceeding) ( per curiam). Contractual forum-selection clauses are prima facie valid. West Tex. Hospitality, Inc ., v. Enercon Int’l, Inc., No. 07-09-0213-CV, 2010 Tex. App. Lexis 7178, at *12 (Tex.App. --Amarillo Aug. 31, 2010, no pet.) (mem. op.) (citing Phoenix Network, 177 S.W.3d at 611). The Operating Agreement’s Forum-Selection Clause Ruby Tequila’s contends the claims alleged by S oncy Partnership and Lubbock Partnership in the under lying suit relate to their equity positions in RTMK and therefore fall within the Operating Agreement’s forum-s election clause. As noted, the clause provides in part, “Any action, suit or pr oceeding in connection with” the Operating Agreement must be brought in a specified Delaware court. The merits of this position depend on t he facts alleged in the underlying suit. See In re FirstMerit Bank, N.A., 52 S.W.3d 749, 754 (Tex. 2001) (orig. proceeding) (“To determine whether a party’s claims fall wit hin an arbitration agreement’s scope, we focus on the complaint’s factual allegations rather than the legal causes of action7 asserted”). 8 As noted, the underlying pleadings al lege that the lessees have failed to keep leased premises in good repair and to comply with local laws regulating restaurants, and allege the gu arantor has failed to comply with its guarantee of the lessee’s lease obligations. Noth ing in this record indicate s the efficacy of the leases and guarantee, or the legal re lationships they create, ar e dependent on the Operating Agreement. Nor does the underlying suit, as plead, implicate or otherwise bear a cognizable relationship to any of the rights and obligations creat ed by the Operating Agreement. And the claims alleged in the underlying suit do not depend on the existence of the Operati ng Agreement but may be i ndependently a sserted without reference to that agreement. Compare Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149, 156 n.24, 151-52 , 156-57 (Del. 2002) (noti ng “[g]enerally, purportedly independent actions do not touch matters imp licated in a contra ct if the independent cause of action could be brought had the par ties not signed a contract,” and holding claims of breach of fiduciary duty were not “in connection with” righ ts and obligations of the underlying agreement’s arbitr ation clause providing “any dispute, controversy or claim arising out of or in connection with this Agreement . . . shall be settled by arbitration”); Ford v. Nylcare Health Plans, 141 F.3d 243, 250-251 (5 th Cir.1998) (noting under Texas law of arbi tration agreements “courts look at the facts giving rise to the action and to whether the action could be maintained without reference to the contract” (emphasis in original, quot ation marks omitted)); and Hearthshire Braeswood Plaza Ltd.

8 Our supreme court has classified an ar bitration agreement as “another type of forum-selection clause” and has found no meani ngful distinction between a litigation forum-selection clause and an arbitration clause. See In re AIU Ins. Co., 148 S.W.3d 109, 115-16 (Tex. 2004) (orig. proceeding).8 P’ship v. Bill Kelly Co., 849 S.W.2d 380, 391 (T ex.App.--Houston [14th Dist.] 1993, writ denied) (arbitrability of tort requires determination whether claim is so interwoven with contract containing arbitrati on clause that tort cannot stand alone, or is completely independent of contract and can be maintained without re ference to contract), with Lisa Laser, 310 S.W.3d at 886 (finding claims of party bringing underlying suit arose from distribution agreement in dispute rather than other general obligations imposed by law (citing In re Int’l Profit Assocs. I, 274 S.W.3d 672, 678 (Tex. 2009) (orig. proceeding) (per curiam)); Pennzoil Co. v. Arnold Co., 30 S.W.3d 494, 498 (Tex .App.--San Antonio 2000, consolidated appeal and or ig. proceeding) (holding claims that a party to distributorship contract and third party torti ously interfered and cons pired to tortiously interfere with existing contracts and prospect ive business relations of other party to distributorship contract in or der to justify termination of the distributorship were within scope of distributorship contract’s “arising out of or relating to” arbitration clause); and Hou-Scape, Inc v. Lloyd, 945 S.W.2d 202 (Tex.App.--Houst on [1st Dist.] 1997, orig. proceeding) (per curiam) (holding countercl aims by general cont ractor against its subcontractor for fraud and mi srepresentation, DTPA viol ations, negligence and gross negligence, libel and defamation, and torti ous interference were within scope of subcontract’s “arising out of or re lated to” arbitration clause). Moreover, while as a general rule courts broadly construe the phrase “in connection with,” see Key Air, Inc. v. Comm’r of Revenue Servs., 294 Conn. 225, 983 A.2d 1, 8 n.11 (Conn. 2009) (listi ng cases), this breadth is no t unlimited. Construing the Operating Agreement as subsuming all tr ansactions, regardless of their nature, involving RTMK and any of its members leads to absurd results. For example, all9 landlord-tenant disputes regar dless of nature brought by S oncy Partnership or Lubbock Partnership would necessarily have to be filed in a Delaware court. We will not construe an agreement in a manner that produces an absurd result. See Lane v. Travelers Indem. Co., 391 S.W.2d 399, 402 (Tex. 1965) (re fusing to construe contract of insurance in manner leading to absurd result). We concl ude the underlying suit is not “in connection with” the Operating Agreement and therefore does not implicate the agreement’s forum-selection clause. Interrelationship of Agreements Ruby Tequila’s also argues the leas es, the Release, the Amendment and the Operating Agreement are “int errelated agreements subjec t to the forum-selection provisions.” To reach its c onclusion that disputes under the leases are subject to the forum-selection clause contained in the Releas e, Ruby Tequila’s la ys out a construction of those contracts that relies heavily on releasing language in the Release and language of an Exhibit E to the Release, together with a mer ger clause contained in the Release. Ruby Tequila’s fu rther concludes that because the Operating Agreement was attached as an exhibit to the Release its foru m-selection clause also is applicable to the underlying suit. Without intending any comment on the me rits of the contentions of Ruby Tequila’s that the claims asse rted in the underlying suit have been released, we simply say that we do not agree with Ruby Tequila’s t hat the terms of the Release made it “the controlling agreement among the entir ety of [the] parties’ relationships” so as to make the forum-selection clause contained in the Re lease, or that contai ned in the Operating10 Agreement, applicable to the leases. See Calpine Producer Servic es, L.P. v. Wiser Oil Co., 169 S.W.3d 783, 787 (Tex.App.--Dallas 2005, no pet.) (when construing a contract, the court takes the intention of the parties from the instrume nt itself and not from the parties’ present interpretation). Citing In re Lisa Laser and In re Laibe Corp., Ruby Tequila’s also argues the Supreme Court of Texas has resolved “factual scenarios very similar to the one at issue here” in a manner favorable to the inte rpretation it posits. We disagree.

In Lisa Laser, 310 S.W.3d 880, Exhibit F to a product distribution agreement contained a forum-selection clause vesting exclusive jurisdiction and venue of “any disputes arising out of this agreement” in specified Cali fornia courts. The product manufacturer and its affiliate filed a motion to dismiss based on the forum-selection clause, which the trial court denied. Afte r the court of appeals denied mandamus relief, the manufacturer and affiliate pursued mandamus in the supreme court. Id. at 881-82. In discussing the breadth of the forum-sele ction clause, the supreme court first concluded that the distribut ion agreement and Exhibit F we re not separate, or even separable, agreements. Id. at 885. Finding the docum ents instead should be read together, the court noted their interdependenc e. Exhibit F was no more than the standard terms of purchase, lacking pric e and quantity terms. The distribution agreement was likewise incomplete requiring te rms from its attached exhibits “to fully elucidate the parties’ agreement.” Id. Thus, concluded the court, the two documents must be read together and as so construed cons tituted “this agreement” for application of the forum-selection clause. Id.11 The facts of the present matter are readily distinguishable fr om those presented by Lisa Laser . At the outset, it must be noted that the terms of t he forum-selection clause in Lisa Laser differs significantly from that in the Release. The clause in Lisa Laser specified a California forum for any di sputes arising out of the agreement. The clause in the Release provides for claims against parties like Ruby Tequila’s to be litigated in Delaware but claims against parties like Soncy Partnership and Lubbock Partnership to be litigated in Texas. Next, and importantly, the 2010 Release and the 2008 leases stand alone witho ut mutual dependence, eac h integrated, independent agreements. See Lisa Laser , 310 S.W.3d at 885-86 (distinguishing IKON Office Solutions, Inc. v. Eifert, 2 S.W.3d 688, 696 (Tex.App. --Houston [14th Dist.] 1999, no pet.)). And, as noted, the obligations Soncy Partnership and Lubbock South claim the defendants have violated arose from the leases, not from the Re lease. On the face of the pleadings filed by t he plaintiffs Soncy Partner ship and Lubbock South, the underlying suit is not one “asserting a breach of the Release.” This is not an instance like Lisa Laser , in which the court found the plaint iff was attempting to enforce its contract but avoid its terms. Id . (quoting In re Weekley Homes, L.P. , 180 S.W.3d 127, 135 (Tex. 2005) (plaintiff “cannot both have his cont ract and defeat it too ”)). Here it is Ruby Tequila’s who asserts the terms of th e Release as an affirmative defense in the underlying suit, not the plaintiffs. Laibe Corp., 307 S.W.3d 314, is even less helpful to Ruby Tequila’s position. That case concerned a single transaction, “a routine sale of equipment between two business entities[.]” Id . at 317. As we read the Texa s Supreme Court’s opinion, the issue was not whether the disp ute fell within the scope of the forum-selection clause12 contained in their contract, but whether t he plaintiff met the heavy burden one resisting a forum-selection clause shoulders. Id . at 316. Because we find the trial court’s denial of Ruby Tequila’s motion to dismiss may be sustained by the conclusion the underlying suit to enforce the leases is not within t he scope of the forum-selection clauses in the Release, the Operating Agreement or th e Amendment, we do not reach the issue addressed by Laibe Corp.

Conclusion
For the reasons discussed, we conclude t he trial court did not clearly abuse its discretion by denying Ruby Tequi la’s motion to dismiss. The petition for writ of mandamus of Ruby Tequila’s is denied.

Per Curiam