Court Opinion

ID: 8507275
Source: CourtListenerOpinion
Date Created: 2022-11-23 07:10:59.480424+00
Date Added: 2024-06-11T16:50:56.605689
License: Public Domain

Affirmed and Opinion Filed November 16, 2022

                                               In The
                                 Court of Appeals
                          Fifth District of Texas at Dallas
                                      No. 05-22-00468-CV

                            JAYCO HAWAII, INC., Appellant
                                       V.
                            VIVA RAILINGS, LLC, Appellee

                   On Appeal from the 101st Judicial District Court
                                Dallas County, Texas
                        Trial Court Cause No. DC-19-17238

                            MEMORANDUM OPINION
                       Before Justices Reichek,1 Nowell, and Smith
                                Opinion by Justice Nowell
       The trial court denied appellant Jayco Hawaii, Inc.’s special appearance. In

two issues, it argues the trial court erred because the jurisdictional facts alleged by

appellee Viva Railings, LLC are insufficient to establish that Jayco Hawaii is subject

to personal jurisdiction in Texas. Because Jayco Hawaii signed a contract, which

included an arbitration and forum selection clause designating venue in Dallas

   1
    The Honorable Leslie Osborne was assigned to the original panel of this case; however, she resigned
on October 24, 2022 prior to its submission. The Honorable Amanda Reichek has substituted for Justice
Osborne in this cause. Justice Reichek has reviewed the briefs and the record before the Court.
County, Texas, Jayco Hawaii consented to jurisdiction in Texas. We affirm the trial

court’s order denying Jayco Hawaii’s special appearance.

                                    Background

      Jayco Hawaii is a corporation domiciled in Hawaii. Viva Railings is an

architectural railing supplier. The two entities entered into a contract for a project

in Hawaii called “16-121 Consolidated Car Rental Facility.” The contract contained

the following arbitration provision:

      Any and all disputes concerning the Material or the transaction shall be
      decided by binding ARBITRATION under the then current
      Construction Industry Rules of the American Arbitration Association,
      with no joinder of or the consolidation with claims concerning other
      parties. Such arbitration shall be governed by Texas law, with venue
      in Dallas County, Texas.

      Disputes arose during the project, and Jayco Hawaii filed an arbitration

demand with the Dallas Regional Office of the American Arbitration Association.

In its demand, Jayco Hawaii acknowledged it entered into a valid arbitration

agreement on April 26, 2017. It sought $173,285 in damages for breach of contract,

along with attorney’s fees, and arbitration costs.

      The parties participated in arbitration in Dallas County from August 27, 2019,

through August 30, 2019. On October 16, 2019, the arbitrator issued its arbitration

award. It found Jayco Hawaii breached the supply contract and awarded Viva

Railings $584,539.60 in damages, plus attorney’s fees, and arbitration costs. The

arbitrator denied Jayco Hawaii’s claims in their entirety, including a subsequent

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request to modify the arbitration award based on a computational error in the

calculation of damages.

      Viva Railings filed its original petition to confirm the arbitration award on

October 25, 2019. On November 25, 2019, Jayco Hawaii filed its special appearance

in which it argued, in part, (1) it was a nonresident of Texas with its principal place

of business in Hawaii; (2) it had no facilities or employees in Texas; (3) it never

performed any work in Texas or regularly conducted any business in Texas; and (4)

it had no other purposeful contacts with the state. Jayco Hawaii asserted Viva

Railings failed to allege any facts subjecting Jayco Hawaii to personal jurisdiction

in Texas; therefore, it had no “minimum contacts” with the state, and exercise of

jurisdiction would offend the traditional notion of “fair play and substantial justice.”

In support of its special appearance, Jayco Hawaii attached the affidavit of its

president, Marc Delay.

      Viva Railings subsequently filed its first amended original petition to confirm

the arbitration award and a response to Jayco Hawaii’s special appearance. In its

amended petition, it included additional facts regarding the underlying arbitration

proceeding and asserted that “[a]t no time before or during the arbitration

proceeding, a proceeding Jayco had initiated, did Jayco contend that a Texas court

could not confirm the arbitration award which Jayco was seeking, or that a Texas

court lacked jurisdiction to confirm an arbitration award should the award be issued

against Jayco.” It further argued Jayco Hawaii consented to jurisdiction in Texas

                                          –3–
under section 171.081 of the Texas Arbitration Act and section 9 of the Federal

Arbitration Act.

      Jayco Hawaii did not file an amended response addressing Viva Railings’

additional facts regarding the arbitration or its argument Jayco Hawaii contractually

consented to jurisdiction in Texas.

      The trial court held a hearing on April 11, 2022. The trial court signed an

order denying Jayco Hawaii’s special appearance on April 28, 2022. This appeal

followed.

                    Standard of Review and Burdens of Proof

      Whether a trial court has personal jurisdiction over a nonresident defendant is

a question of law we review de novo. Old Republic Nat’l Title Ins. Co. v. Bell, 549

S.W.3d 550, 558 (Tex. 2018); Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d

142, 150 (Tex. 2013). When, as here, jurisdictional facts are undisputed, we consider

only the legal question of whether the undisputed facts establish Texas jurisdiction.

Bell, 549 S.W.3d at 558.

      A plaintiff and defendant bear shifting burdens of proof in a challenge to

personal jurisdiction. RSR Corp. v. Siegmund, 309 S.W.3d 686, 699 (Tex. App.—

Dallas 2010, no pet.). The plaintiff bears the initial burden of pleading jurisdictional

facts sufficient to bring a nonresident defendant within the provisions of the Texas

long-arm statute. Id. If the nonresident defendant challenges jurisdiction through a

special appearance, then it bears the burden of negating all bases of personal

                                          –4–
jurisdiction alleged by the plaintiff. Id. The nonresident defendant can negate

jurisdiction on either a factual or legal basis. Id.

                            Applicable Law and Analysis

      Texas courts may exercise personal jurisdiction over a nonresident defendant

if (1) the Texas long-arm statute permits the exercise of jurisdiction; and (2) the

assertion of jurisdiction is consistent with the federal and state constitutional due

process guarantees. Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 657 (Tex.

2010). Typically, review of a special appearance ruling requires an analysis of

whether a defendant has purposefully established minimum contacts with Texas,

giving rise to either specific or general jurisdiction over the defendant, and whether

the assertion of jurisdiction comports with traditional notions of fair play and

substantial justice. Id. However, if a party contractually consents to jurisdiction in

a particular forum, then the due-process and minimum-contacts analysis is

unnecessary. See Guam Indus. Servs., Inc. v. Dresser-Rand Co., 514 S.W.3d 828,

833 (Tex. App.—Houston [1st Dist.] 2017, no pet.); see also RSR Corp., 309 S.W.3d

at 704 (application of long-arm statute and analysis of contacts with Texas

unnecessary when agreement contained a consent-to-jurisdiction clause).

      Both arbitration and venue clauses are types of forum selection clauses. See,

e.g., Shrader & Assoc., L.L.P. v. Carrasco, No. 01-19-00042-CV, 2019 WL

4615823, at *2 (Tex. App.—Houston [1st Dist.] Sept. 24, 2019, no pet.) (mem. op.);

Vak v. Net Matrix Sols., Inc., 442 S.W.3d 553, 562 (Tex. App.—Houston [1st Dist.]

                                          –5–
2014, no pet.) (stating clauses providing for exclusive venue in a particular locale

are treated as forum-selection clauses). Forum-selection clauses are contractual

arrangements whereby parties agree in advance to submit their disputes for

resolution within a particular jurisdiction. RSR Corp., 309 S.W.3d at 700. In Texas,

forum-selection clauses are generally considered valid and enforceable, unless

enforcement is shown to be unreasonable and unjust. Id.

      Here, neither party argued the arbitration clause was unreasonable and unjust.

To the contrary, Jayco Hawaii filed an arbitration demand in Dallas County pursuant

to the arbitration and forum-selection clauses. It participated in several days of

arbitration in Dallas County and never challenged personal jurisdiction until after it

received an adverse outcome. Jayco Hawaii contractually consented to jurisdiction

in Texas.     Accordingly, the due-process and minimum-contacts analysis is

unnecessary. Guam Indus. Servs., Inc., 514 S.W.3d at 833; RSR Corp., 309 S.W.3d

at 704.

      In reaching this conclusion, we reject Jayco Hawaii’s reliance on Halliburton

Energy Services, Inc. v. Ironshore Specialty Insurance Company, 921 F.3d 522, 541

(5th Cir. 2019), which stands for the general proposition that an agreement to

arbitrate in Texas does not necessarily constitute consent to the personal jurisdiction

of Texas courts to adjudicate its claims. Id. Rather, “[w]hen a party agrees to

arbitrate, it subjects itself to the court’s jurisdiction for the limited purpose of

compelling arbitration.” Id.

                                         –6–
       In Halliburton, the defendant submitted to the court’s power for the limited

purpose of compelling arbitration but also filed motions challenging personal

jurisdiction prior to arbitration. By “maintaining its personal jurisdiction motion to

dismiss, [defendant] continued to object to the power of the court and did not waive

its personal jurisdiction defense.” Id. Here, Jayco Hawaii did not challenge personal

jurisdiction prior to demanding, participating, and losing arbitration. Accordingly,

its comparison is inapposite.

       Jayco Hawaii has failed to negate the first basis of jurisdiction upon which the

trial court’s decision could have rested, namely the presence of a forum-selection

clause. Accordingly, Jayco Hawaii has failed to demonstrate the trial court erred by

denying its special appearance. We overrule its first issue and need not reach its

second issue—that it does not have sufficient minimum contacts with Texas to

confer personal jurisdiction. See TEX. R. APP. P. 47.1; see also Vak, 442 S.W.3d at

562.

                                     Conclusion

       The trial court’s order denying Jayco Hawaii’s special appearance is affirmed.

220468f.p05                                 /Erin A. Nowell//
                                            ERIN A. NOWELL
                                            JUSTICE

                                         –7–
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                 JUDGMENT

JAYCO HAWAII, INC., Appellant                On Appeal from the 101st Judicial
                                             District Court, Dallas County, Texas
No. 05-22-00468-CV          V.               Trial Court Cause No. DC-19-17238.
                                             Opinion delivered by Justice Nowell.
VIVA RAILINGS, LLC, Appellee                 Justices Reichek and Smith
                                             participating.

      In accordance with this Court’s opinion of this date, the trial court’s order
denying Jayco Hawaii’s special appearance is AFFIRMED.

       It is ORDERED that appellee VIVA RAILINGS, LLC recover its costs of
this appeal from appellant JAYCO HAWAII, INC.

Judgment entered this 16th day of November 2022.

                                       –8–