Court Opinion

ID: 22657
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:00:59+00
Date Added: 2024-06-11T09:03:46.236784
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                                 FOR THE FIFTH CIRCUIT

                                  _____________________

                                       No. 00-50521
                                     Summary Calendar
                                  _____________________

       FIRSTCITY FINANCIAL CORPORATION; ET AL.,

                                                           Plaintiffs,

       FIRST CITY FINANCIAL CORPORATION,

                                                           Plaintiff-Appellant,

                                             versus

       CHASE BANK OF TEXAS, NA;
       CHASE SECURITIES, INC.,

                                                           Defendants-Appellees.

           _______________________________________________________

                   Appeal from the United States District Court for
                            the Western District of Texas
                             (USDC No. W-99-CV-277)
           _______________________________________________________

                                     November 20, 2000

Before REAVLEY, DeMOSS and BENAVIDES, Circuit Judges.

PER CURIAM:*

       *
        Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
      FirstCity Financial Corporation appeals from the dismissal of its action

against Chase Bank of Texas and Chase Securities, Inc. (CSI). The district court

dismissed FirstCity’s case based on a forum selection clause in its engagement

agreement with CSI. We review this determination de novo. See Afram Carriers,

Inc. v. Moeykens, 145 F.3d 298, 301 (5th Cir. 1998).

      FirstCity contends the clause is unenforceable under Fifth Circuit precedent

because (1) the clause was induced by fraud and overreaching, (2) its enforcement

would contravene public policy, and (3) its scope does not reach FirstCity’s claims

under the Bank Holding Company Act of 1956, ch. 240, 70 Stat. 133 (codified as

amended in scattered sections of 12 U.S.C.).

      The Supreme Court has made it clear that forum selection clauses are favored

and will be enforced absent a clear showing of unreasonableness. See M/S Bremen

v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972); Haynsworth v. The Corporation,

121 F.3d 956, 962-63 (5th Cir. 1997). Furthermore, this Circuit has stated that

“[f]raud and overreaching must be specific to a forum selection clause in order to

invalidate it.” Id. (citing Scherk v. Alberto-Culver Co., 417 U.S. 506, 519, n.14

(1974)).

      For the following reasons we must agree with the splendid order of the

district court. FirstCity fails to meet its burden because (1) FirstCity cannot produce

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evidence that the forum selection clause itself, as opposed to the contract in general,

is a product of fraud or overreaching, and any disparity in bargaining positions is

mitigated by the fact that both parties to the agreement were sophisticated financial

institutions represented by competent counsel; (2) no public policy at issue is strong

enough to trump the presumption in favor of forum selection clauses; and (3) each of

FirstCity’s claims relate to its engagement of CSI, and thus, each falls within the

scope of the forum selection clause.

      AFFIRMED.

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