J.D. Fields & Co. v. Eng'rs

• Decision Date: 13 June 2019
• Docket Number: Civil Action H-18-4186
• Citation: 391 F.Supp.3d 698
• Parties: J.D. FIELDS & CO., INC., Plaintiff, v. SHORING ENGINEERS, Defendant.
• Court: U.S. District Court — Southern District of Texas

391 F.Supp.3d 698

J.D. FIELDS & CO., INC., Plaintiff,

v.SHORING ENGINEERS, Defendant.

Civil Action H-18-4186

United States District Court, S.D. Texas, Houston Division.

Signed June 13, 2019

Samuel David Davis, Law Office of Samuel D. Davis, PLLC, Houston, TX, for Plaintiff.

Aaron Abram Martinez, James Craig Erdle, Joseph David Zopolsky, Glast Phillips and Murray PC, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

Gray H. Miller, Senior United States District Judge

Pending before this court is defendant Shoring Engineers's ("Shoring") motion to dismiss for lack of personal jurisdiction and improper venue (Dkt. 5). Plaintiff J.D. Fields and Company, Inc. ("J.D. Fields") responded. Dkt. 12. Shoring replied, and J.D. Fields filed a sur-reply. Dkt. 14 (Shoring's reply); Dkt. 15-1 (J.D. Field's sur-reply). Having considered the motions, responses, replies, and applicable law, the court is of the opinion that the motion to dismiss (Dkt. 5) should be DENIED.

I. BACKGROUND

This is a breach of contract case. Shoring is incorporated and has its principal place of business in California, while J.D. Fields is incorporated and has its principle place of business in Texas. Dkt. 1 at 2. In January 2017, Shoring requested that J.D. Fields locate and supply specially fabricated steel piling for a project at the Los Angeles International Airport. Dkt. 1-1 at 3; Dkt. 5 at 5. J.D. Fields subsequently sent Shoring a price quote for the piling on company letterhead, which included J.D. Fields's Houston office address. Dkt. 1-1 at 4; Dkt. 5 at 5. The price quote expressly stated that "[o]nly a fully executed purchase agreement shall be binding." Dkt. 12-4 at 2.

On March 20, 2017, a Shoring representative emailed J.D. Fields and asked what Shoring would need to do for J.D. Fields to "hold that pipe." Dkt. 12-3 at 3. A J.D. Fields representative responded that if Shoring replied to the quote with a signature, J.D. Fields would hold the piling until Shoring produced a formal purchase order. Id. A Shoring representative signed the quote, wrote "ACCEPTED" on the document, and sent the document back to J.D. Fields. Dkt. 12-4. However, Shoring never executed a formal purchase order.

Shortly after receiving the signed quote, J.D. Fields sent Shoring a credit application. Id. Shoring executed the credit application, also on J.D. Fields letterhead, and returned the application to J.D. Fields. Dkt. 5 at 27. On March 24, J.D. Fields notified Shoring that Shoring's credit application had been approved. Dkt. 12-5 at 2. The credit notification included J.D. Fields's General Terms and Conditions of Sale ("GTCs"). Id. The GTCs expressly provided, in bold type, that "every sale by [J.D. Fields] shall in every case be subject to these terms and conditions to the exclusion of any other terms." Id. at 3. The GTCs also included the following forum-selection clause:

2.1 CHOICE OF FORUM

All actions or proceedings either directly or indirectly arising from or related to this contract or transaction, regardless of whether grounded in contract, tort, or any other legal theory, shall be brought only in State or Federal Court in Harris County in the State of Texas , and Buyer hereby consents and submits to the exclusive jurisdiction and venue of such courts for the purpose of such actions or proceedings.

Id. (emphasis added). On April 13, a J.D. Fields representative emailed Shoring on same email chain that Shoring used to send the March 20 signed quote. Dkt. 24-8 at 2. J.D. Fields asked if Shoring was "still good on" the pipe for which Shoring had previously signed. Dkt. 12-2 at 4; Dkt. 24-8 at 2. Shoring replied that "[y]es, the other pipe is still good." Dkt. 12-2 at 4; Dkt. 24-8 at 2. On April 19, J.D. Fields paid a third-party distributor, JCD International Services ("JCD"), approximately $193,000 as a partial up-front payment to fill Shoring's order. Dkt. 12-2 at 5; Dkt. 24-2 at 4.

In the following months, Shoring made multiple requests for changes to the order and provided fabrication instructions in furtherance of the contract. Dkt. 12 at 11. However, in July 2017, Shoring informed J.D. Fields that Shoring was repudiating the contract and would not take delivery of the pilings as previously agreed. Id. To date, Shoring has paid J.D. Fields $50,019 in damages. Dkt. 12-2 at 5. J.D. Fields alleges that this payment only covers a "fraction" of its damages. Id.

J.D. Fields filed suit in the 269th Judicial District Court of Harris County, Texas, alleging breach of contract and promissory estoppel. Dkt. 1. Shoring removed the action to this court. Id. Shoring then filed a Rule 12(b) motion to dismiss for lack of personal jurisdiction and improper venue. Dkt. 5.

II. STANDARD OF REVIEW

A. Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction

A court must dismiss an action when it lacks personal jurisdiction over the defendant. Fed. R. Civ. P. 12(b)(2). When a non-resident defendant moves to dismiss for lack of personal jurisdiction, the resident plaintiff has the burden of establishing personal jurisdiction over the non-resident. Lewis v. Fresne , 252 F.3d 352, 358 (5th Cir. 2001). When a district court rules on personal jurisdiction without an evidentiary hearing, the plaintiff must make a prima facie showing of jurisdiction, and the court may consider the entire contents of the record, including affidavits. Quick Techs., Inc. v. Sage Grp. PLC , 313 F.3d 338, 344 (5th Cir. 2002). "The allegations of the complaint, except insofar as controverted by opposing affidavits, must be taken as true, and all conflicts in the facts must be resolved in favor of the plaintiffs for purposes of determining whether a prima facie case for personal jurisdiction has been established." Thompson v. Chrysler Motors Corp. , 755 F.2d 1162, 1165 (5th Cir. 1985). However, "the prima-facie-case requirement does not require the court to credit conclusory allegations, even if uncontroverted." Panda Brandywine Corp. v. Potomac Elec. Power Co. , 253 F.3d 865, 869 (5th Cir. 2001).

B. Rule 12(b)(3) Motion to Dismiss for Improper Venue

The Federal Rules of Civil Procedure authorize a court to dismiss an action when venue in that court is improper. See Fed. R. Civ. P. 12(b)(3). Once a defendant challenges venue, the plaintiff has the burden to prove that venue in that court is proper. Clemons v. WPRJ, LLC , 928 F. Supp. 2d 885, 897 (S.D. Tex. 2013) (Harmon, J.). When deciding a Rule 12(b)(3) motion, "the court must accept as true all allegations in the complaint and resolve all conflicts in favor of the plaintiff." Braspetro Oil Servs. Co. v. Modec (USA), Inc. , 240 F. App'x 612, 615 (5th Cir. 2007). However, "the court is permitted to look at evidence in the record beyond simply those facts alleged in the complaint and its proper attachments." Ambraco, Inc. v. Bossclip B.V. , 570 F.3d 233, 238 (5th Cir. 2009) (quoting Ginter ex rel. Ballard v. Belcher, Prendergast & Laporte , 536 F.3d 439, 448 (5th Cir. 2008) (Dennis, J., dissenting) ).

III. ANALYSIS

A. Contract Formation and Interpretation

As a threshold matter, the parties disagree as to whether the GTCs—and therefore the forum-selection clause—became part of the contract. Shoring contends that it never agreed to the GTCs, and that therefore the forum-selection clause does not function as Shoring's consent to jurisdiction in Texas. Dkt. 5 at 7. Without the forum-selection clause, Shoring argues that this court lacks personal jurisdiction and is an improper venue. Id. at 1. Accordingly, Shoring requests that the court dismiss the case entirely or transfer the case to the Central District of California. Id. at 10.

1. Whether the Clause Became Part of the Contract

The parties agree that a contract existed. Dkt. 5 at 7; Dkt. 12 at 14. However, the parties disagree as to whether the GTCs were part of the contract. Shoring argues that the parties entered into a binding contract on March 20, when Shoring signed and returned J.D. Fields's price quote. Dkt. 14 at 3. Thus, Shoring contends that the GTCs—sent March 24—were merely proposals for alterations to the contract under UCC § 2-207. Dkt. 5 at 6–7; Tex. Bus. & Comm. Code Ann. § 2.207. However, J.D. Fields argues that the parties did not have a binding contract until April 13, when Shoring confirmed that it still wished to proceed with the pipe order. Dkt. 12 at 14. Because J.D. Fields had previously sent the GTCs to Shoring, and Shoring's April 13 acceptance was unconditional, J.D. Fields contends that the GTCs became part of the contract. Id.

Here, because the court is sitting in diversity, state substantive law applies; because the contract at issue is for the sale of goods, the Uniform Commercial Code ("UCC") applies.¹ J.D. Fields & Co. v. U.S. Steel Int'l, Inc. , 426 F. App'x 271, 276 (5th Cir. 2011) (hereinafter U.S. Steel Int'l ). Under the UCC, "[a] contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract."² Id. (citing Tex. Bus. & Com. Code Ann. §§ 2.201 –.210). The UCC "supplements" the four basic elements of an enforceable contract: (1) offer; (2) acceptance; (3) a "meeting of the minds" as to subject matter and essential terms; and (4) consideration or mutuality of obligation. Omni USA, Inc. v. Parker-Hannifin Corp. , 798 F. Supp. 2d 831, 846 (S.D. Tex. 2011) (Harmon, J.). Thus, contract formation "hinge[s] on the existence of an acceptable offer." U.S. Steel Int'l , 426 F. App'x at 276 (citing Crest Ridge Constr. Grp., Inc. v. Newcourt Inc. , 78 F.3d 146, 152 (5th Cir. 1996) (Benavides, J., concurring) ). Although the UCC does not define "offer," the Fifth Circuit has held that an offer is "an act that leads the offeree reasonably to believe that assent (i.e. , acceptance) will conclude the deal." Axelson, Inc. v. McEvoy-Willis , 7 F.3d 1230, 1232–33 (5th Cir. 1993).

A price quote, such as the one Shoring signed on March 20, can sometimes operate as an offer....