Court Opinion

ID: 3110704
Source: CourtListenerOpinion
Date Created: 2015-10-16 06:47:33.428744+00
Date Added: 2024-06-11T11:52:18.959130
License: Public Domain

COURT OF APPEALS
                           SECOND DISTRICT OF TEXAS
                                 FORT WORTH

                                NO. 02-11-00454-CV

MAHMOOD CHASEEKHALILI AND                                              APPELLANTS
FATEMA FAIYAZ

                                          V.

CINEMACAR LEASING, INC.                                                   APPELLEE

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          FROM THE 352ND DISTRICT COURT OF TARRANT COUNTY

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                          MEMORANDUM OPINION1

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                                   I. Introduction

      In four issues, Appellants Mahmood Chaseekhalili and Fatema2 Faiyaz

appeal the domestication of a foreign default judgment for Appellee Cinemacar

Leasing, Inc. and the trial court’s denial of their motion for new trial. We affirm.

      1
       See Tex. R. App. P. 47.4.
      2
       Also spelled “Fatima” in various documents filed in this case.
                   II. Factual and Procedural Background

      Texas-based Addison Xpress Car and Limousine Service (Addison

Xpress) and New Jersey-based Cinemacar Leasing entered into a motor vehicle

lease with a lease-purchase rider, agreeing that the subject vehicle would be

registered and operated in Texas, with rent paid to Cinemacar’s office in New

Jersey.3 Faiyaz and Chaseekhalili signed the agreement as Addison Xpress’s

guarantors (Guarantors).

      The forum selection clause of the lease agreement lists New York as the

designated forum,4 but when Addison Xpress defaulted on the lease, Cinemacar

filed suit against Addison Xpress and Guarantors in New Jersey.        Addison

Xpress and Guarantors in turn filed suit against Cinemacar in Dallas County,

Texas, for breach of contract, among other claims.     Guarantors also filed a

motion to dismiss the New Jersey action for lack of personal jurisdiction, which

      3
      U.S. Bank d/b/a New World Lease Funding Inc., a New York company,
was the first lienholder on the subject vehicle.
      4
      The relevant portion of the clause states,

      LESSEE AND ANY GUARANTOR HEREOF CONSENT TO THE
      JURISDICTION OF ANY STATE COURT LOCATED WITHIN THE
      STATE OF NEW YORK AND AGREE THAT ALL ACTIONS OR
      PROCEEDINGS ARISING, DIRECTLY OR INDIRECTLY, FROM
      THIS LEASE SHALL BE LITIGATED ONLY IN COURTS HAVING
      SUCH SITUS.

                                       2
the New Jersey court granted.5 Cinemacar filed a motion to dismiss the Texas

action, and the Dallas trial court dismissed Guarantors’ case and prohibited

Addison Xpress and Guarantors from filing suit in Texas “unless compelled to do

so by a court of competent jurisdiction in another state.”

      Cinemacar next filed suit against Guarantors, but not Addison Xpress, in

New York, and the New York court granted a default judgment of $16,603.72

against Guarantors. Cinemacar then filed a notice of filing of foreign judgment in

Tarrant County. See generally Tex. Civ. Prac. & Rem. Code Ann. §§ 35.001–

.008 (West 2008 & Supp. 2012) (setting out Texas’s version of the Uniform

Enforcement of Foreign Judgments Act).

      In response to Cinemacar’s attempt to domesticate its New York judgment,

Guarantors filed a motion for new trial in the 352nd District Court of Tarrant

County, objecting to the enforcement of the New York judgment and claiming that

New York did not have personal jurisdiction over them; they also requested that

venue be transferred to Dallas County. The Tarrant County trial court overruled

Guarantors’ motion for new trial after an evidentiary hearing and entered findings

of fact and conclusions of law.6 This appeal followed.

      5
       We note that the record reflects that in some of Guarantors’ filings, they
argued for several pages that the proper jurisdictional state was actually New
Jersey.
      6
        Because our resolution here does not depend on the trial court’s findings
of fact and conclusions of law, we have not included them in the opinion.

                                         3
                                III. Jurisdiction

      In their first two issues, Guarantors assert that the Tarrant County trial

court abused its discretion by enforcing the forum selection clause and

domesticating the New York judgment because “the New York judgment was not

entitled to full faith and credit” and because “New York lacked personal

jurisdiction to render a judgment.” The thrust of Guarantors’ argument is that to

make a forum selection clause enforceable, there must be sufficient minimum

contacts with the forum to establish personal jurisdiction; otherwise the

enforcement of the judgment is unreasonable, unjust, and unfair.        They also

dispute that Faiyaz received proper service of process of the New York suit and

assert that jurisdiction cannot be based upon the agreement’s forum selection

clause because there is insufficient evidence that the clause was “negotiated”

and because some of Cinemacar’s evidence is not competent.

A. Standard of Review

      We review all of the trial court’s decisions here for an abuse of discretion.

See Mindis Metals, Inc. v. Oilfield Motor & Control, Inc., 132 S.W.3d 477, 485–86

(Tex. App.—Houston [14th Dist.] 2004, pet. denied) (op. on reh’g) (applying

abuse of discretion standard to determine whether the trial court misapplied the

law to established facts in concluding that appellee established an exception to

the full faith and credit requirement with regard to its decision to vacate a

properly filed foreign judgment); see also Serv. Corp. Int’l v. Guerra, 348 S.W.3d
221, 235 (Tex. 2011) (stating that a trial court’s decision to admit evidence is

                                        4
reviewed for an abuse of discretion); In re Laibe Corp., 307 S.W.3d 314, 316

(Tex. 2010) (orig. proceeding) (stating that a trial court abuses its discretion by

refusing to enforce a forum selection clause, subject to a clear showing by the

clause’s opponent of one of four exceptions); In re R.R., 209 S.W.3d 112, 114

(Tex. 2006) (“We review a trial court’s denial of a motion for new trial for abuse of

discretion.”).

B. Full Faith and Credit

       We have previously addressed the issue of giving full faith and credit to

another state’s judgment, observing that in interpreting the Texas version of the

Uniform Enforcement of Foreign Judgments Act, the enforcing court may make a

reasonable inquiry into a sister state’s judgment and the jurisdiction over the

parties before affording the judgment full faith and credit. Minuteman Press Int’l,

Inc. v. Sparks, 782 S.W.2d 339, 340 (Tex. App.—Fort Worth 1989, no writ). We

also noted that

       a defendant may challenge the jurisdiction of a sister state to render
       a foreign judgment on two grounds. First, the defendant may try to
       demonstrate that service of process was inadequate under the
       service of process rules of the sister state. Second, the defendant
       may assert that the sister state’s exercise of jurisdiction does not
       meet the requirement of that state’s long arm statute and due
       process of law.

Id. When a plaintiff sues on a foreign judgment of a sister state and introduces a

properly authenticated copy of the judgment, a prima facie case for enforcement

of the judgment is presented; thereafter, the burden of attacking the judgment

                                         5
and establishing any reason why it should not be given full faith and credit shifts

to the defendant. Id. at 340–41.

      1. Service of Process

      In part of their second issue, Guarantors dispute that Fatema Faiyaz

received service of process of the New York suit, depriving the New York court of

jurisdiction to enter a default judgment against her. Guarantors claimed in the

trial court and claim on appeal that Rehela Faiyaz, Fatema’s mother-in-law,

received service and that this should not have been counted as substituted

service because of her age and inability to speak English. Rehela testified in

support of this argument at the hearing, and Fatema testified that she found the

papers at Rehela’s house a few weeks later.

      However, process server Alex Londoff also testified at the hearing, stating

that he served Fatema Faiyaz, as follows:

             Q. . . . Who answered the door?

             A. The defendant.

                   ....

             Q. Well, is she the same person that you saw at the house
      that identified herself?

             A. Yes, sir.

             Q. How did she identify herself?

             A. I asked her if her name was Fat[e]ma Faiyaz and she said
      yes.

                   ....

                                        6
           Q. Did she tell you that was her name, or did you ask her are
      you Fat[e]ma Faiyaz, and she said Fat[e]ma Faiyaz?

            A. No, sir. I asked her if her name was Fat[e]ma Faiyaz and
      she said yes.

The court also had before it Londoff’s return of service affidavit stating that he

served Fatema Faiyaz on April 19, 2011, and his affidavit in which he recounted

that he had personally served Fatema Faiyaz with process that day after she

provided a positive identification that she was the individual named Fatema

Faiyaz.

      An abuse of discretion does not occur when the trial court bases its

decisions on conflicting evidence and some evidence of substantive and

probative character supports its decision. Unifund CCR Partners v. Villa, 299
S.W.3d 92, 97 (Tex. 2009); Butnaru v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex.

2002) (op. on reh’g).    Because the trial court could have chosen to believe

Londoff’s testimony instead of Rehela and Fatema Faiyaz’s testimony, it could

have reasonably concluded that Fatema Faiyaz was properly served.              See

Minuteman, 782 S.W.2d at 342–43 (stating that once a properly authenticated

copy of the foreign judgment—even a default judgment—is introduced, the

burden shifts to the defendant to prove any affirmative defenses to the judgment,

such as lack of jurisdiction, faulty service, or lack of finality). We overrule this

part of Guarantors’ second issue.

                                         7
      2. Forum Selection Clause

      In the remainder of their second issue, Guarantors contend that the forum

selection clause is not a basis for specific jurisdiction over them.

      The trial court based its decision to domesticate the judgment and to deny

the motion for new trial on its conclusion that the lease agreement contains a

valid and enforceable forum selection clause designating New York as the proper

forum.

      When a party contractually consents to the jurisdiction of a particular

forum, jurisdiction necessarily depends on the contract’s validity. See RSR Corp.

v. Siegmund, 309 S.W.3d 686, 704 (Tex. App.—Dallas 2010, no pet.)

(“[P]ersonal jurisdiction is a waivable right and there are a variety of legal

arrangements by which a litigant may give express or implied consent to the

personal jurisdiction of the court.”) (internal quotations omitted); see also

Diamond Offshore (Bermuda), Ltd. v. Haaksman, 355 S.W.3d 842, 846 (Tex.

App.—Houston [14th Dist.] 2011, pet. denied) (noting that in 2004, the Texas

Supreme Court adopted the federal approach to determining the enforceability of

forum selection clauses). That is, to the extent that a party has consented to

jurisdiction in a particular forum, a trial court’s exercise of personal jurisdiction

over that party may not violate due process even in the absence of other

contacts when the forum selection clause has been obtained through a freely

negotiated agreement and is not unreasonable or unjust. See RSR Corp., 309
S.W.3d at 704; Tri-State Bldg. Specialties, Inc. v. NCI Bldg. Sys., L.P., 184

                                          8
S.W.3d 242, 248 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (“If a party signs

a contract with a forum selection clause, then that party has either consented to

personal jurisdiction or waived the requirements for personal jurisdiction in that

forum.”); Harbison-Fischer Mfg. Co. v. Mohawk Data Scis. Corp., 823 S.W.2d
679, 686 (Tex. App.—Fort Worth 1991) (stating that minimum contacts were

irrelevant when the parties contractually agreed to arbitrate in New York and

raised no facts to show that consent to New York’s jurisdiction was not valid), writ

granted w.r.m., 840 S.W.2d 383, 383–84 (Tex. 1992).

      As previously noted, a trial court abuses its discretion by refusing to

enforce a valid forum selection clause unless the party opposing enforcement

clearly shows that (1) enforcement would be unreasonable or unjust; (2) the

clause is invalid due to 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. Laibe, 307 S.W.3d at 316. Here,

Guarantors only challenge the enforcement of the forum selection clause as

unreasonable or unjust and argue that New York is a seriously inconvenient

forum.

      A forum selection clause is generally enforceable and presumptively valid,

and the burden of proof is heavy for the party challenging its enforcement. Id. at

316; see also In re Lisa Laser USA, Inc., 310 S.W.3d 880, 883 (Tex. 2010) (orig.

proceeding) (stating that forum selection clauses should be given full effect

because subjecting a party to a trial in a forum other than the contractually-

                                         9
chosen one injects inefficiency by enabling forum-shopping, wasting judicial

resources, delaying adjudication of the merits, and skewing settlement

dynamics). A bargain is not negated simply because one party may have been

in a more advantageous bargaining position; only if there is evidence of fraud,

unfair surprise, or oppression will a court refuse to enforce a forum selection

clause. Luxury Travel Source v. Am. Airlines, Inc., 276 S.W.3d 154, 169 (Tex.

App.—Fort Worth 2008, no pet.).        It is presumed that a party who signs a

contract knows its contents. See In re Int’l Profit Assocs., Inc., 274 S.W.3d 672,

679 (Tex. 2009) (orig. proceeding); Luxury Travel, 276 S.W.3d at 169. And by

entering into an agreement with a forum selection clause, the parties effectively

represent to each other that the agreed forum is not so inconvenient that

enforcing the clause will deprive either party of its day in court, whether for cost

or other reasons. In re Lyon Fin. Servs., Inc., 257 S.W.3d 228, 234 (Tex. 2008)

(orig. proceeding).

      Based on the record before us, we cannot say that the trial court abused

its discretion by denying Guarantors’ motion for new trial on the basis that the

clause in question was unreasonable, unjust, or otherwise offended due process.

While Faiyaz testified that she did not read the contract,7 both she and

      7
       Faiyaz testified that she had lived in the United States for thirty years; she
stated, “My husband is the one who purchased the vehicle, I just signed. I don’t
read through these things, he does all that.” The trial court, sitting as the trier of
fact, was entitled to believe or disbelieve this testimony as the sole judge of
witness credibility and the weight to be given to the testimony. See Golden
Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex. 2003).

                                         10
Chaseekhalili agreed that they had signed the lease, neither testified that he or

she did not freely enter into the contract or could not read the English language,

and Faiyaz’s husband testified that he had looked at more than one company

before selecting Cinemacar.8 Further, the forum selection clause was presented

in all capital letters in the contract, and Guarantors signed each page of the

contract. Guarantors presented no evidence that they did not freely enter into

the contract, and there is no evidence of chicanery in the contract’s execution.

See Luxury Travel, 276 S.W.3d at 168 (stating that a court must enforce a forum

selection clause unless the opposing party meets its heavy burden to show that

the clause was produced by fraud, undue influence, or overreaching or that

enforcement would be unreasonable and unjust, considering whether there is

any indication that the forum was selected to discourage legitimate claims,

whether the opposing party received adequate notice of the forum selection

clause, and whether the opposing party retained the option of rejecting the

contract with impunity following notice of the forum selection clause). Therefore,

we overrule the remainder of Guarantors’ second issue.

      Based on our resolution of Guarantors’ second issue, we also overrule

Guarantors’ first issue because the New York court had jurisdiction to issue the

default judgment. See U.S. Const. art. IV, § 1; Minuteman, 782 S.W.2d at 340;

      8
       Sonny Faiyaz, Fatema’s husband, who is not a party to this suit, stated
that when he looked for a limousine, he looked at catalogs and found one in
Missouri that he was going to purchase (Cinemacar’s subject vehicle) but that he
also had contact with Tiffany Limos in California.

                                       11
see also Studebaker Worthington Leasing Corp. v. Tex. Shutters Corp., 243
S.W.3d 737, 740–41 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (holding

that the court had no basis to deny full faith and credit to New York judgment on

jurisdictional grounds when, even though appellee never conducted business in

New York, never sought to conduct business in New York, and never visited New

York, the parties’ contract had a valid forum selection clause).

      Based on our resolution of Guarantors’ first two issues, we need not reach

Guarantors’ third and fourth issues, in which they challenge the sufficiency of the

evidence to support the trial court’s findings of fact and conclusions of law

pertaining to the issues addressed above. See Tex. R. App. P. 47.1.

      3. Unnumbered Issues

      In an unnumbered evidentiary issue contained within their first two issues’

argument section, Guarantors also complain that the trial court abused its

discretion by considering Scott Magruder’s affidavit, presumably under the

assumption that Magruder’s affidavit was necessary for Cinemacar’s introduction

of the lease agreement at the motion for new trial hearing. However, Guarantors

attached a copy of the lease as an exhibit to their “Supplementary and

Evidentiary Response” in support of their motion for new trial, and the trial court

took judicial notice “of the entire contents of the file” prior to Guarantors’

objection. Further, although they raise a number of objections to Magruder’s

affidavit in their appellate brief, they made none of these objections at the

hearing. See Tex. R. App. P. 33.1(a); see also Tex. R. Evid. 103(a)(1); Banda v.

                                        12
Garcia, 955 S.W.2d 270, 272 (Tex. 1997). Therefore, we overrule Guarantors’

unnumbered evidentiary issue.

      Finally, in their reply brief, Guarantors complain that the New York court

also lacked subject matter jurisdiction to consider Cinemacar’s complaint against

them. However, they again focus on personal jurisdiction considerations within

this argument and do not refer us to any New York law that pertains to the New

York court’s jurisdiction to hear a breach of lease action. See Tex. R. App. P.

38.1(i); see also Bolling v. Farmers Branch ISD, 315 S.W.3d 893, 895 (Tex.

App.—Dallas 2010, no pet.) (stating that the court is not responsible for

performing the legal research necessary to support a party’s contentions). And

while New York courts are not compelled to retain subject matter jurisdiction over

a case that lacks a substantial nexus with New York, the issue is addressed to

the trial court’s discretion, and the defendant has the burden to show that the

action should be heard in another forum in the interests of substantial justice.

Clark v. Allen & Overy LLP, No. 106717/11, 35 Misc.3d 1229(A), at *6 (N.Y. Sup.

Ct. Apr. 3, 2012) (citing New York precedent to address defendant’s argument

that because there was no nexus between the alleged acts and New York, the

action would be better adjudicated in another forum); see also Citicorp Vendor

Fin., Inc. v. Thierno, 819 N.Y.S.2d 847, at *3 (N.Y. Sup. Ct. 2006) (stating that

there is no question that a court of general jurisdiction has subject matter

jurisdiction over cases involving breach of lease agreements and the respective

legal rights of parties under said agreements).    Therefore, to the extent that

                                       13
Guarantors have also challenged the New York court’s subject matter

jurisdiction, we overrule this complaint.

                                  IV. Conclusion

      Having overruled Guarantors’ dispositive issues, we affirm the trial court’s

judgment.

                                                   PER CURIAM

PANEL: MCCOY, MEIER, and GABRIEL, JJ.

DELIVERED: August 9, 2012

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