Diaz v. Todd
| Decision Date | 04 November 2020 |
| Docket Number | No. 08-18-00184-CV,08-18-00184-CV |
| Citation | 618 S.W.3d 798 |
| Parties | Alejandro DIAZ, Appellant, v. Luis Aurelio TODD, Appellee. |
| Court | Texas Court of Appeals |
JEFF ALLEY, Chief Justice What happens when a business operating on the Mexico side of the U.S border is owned or operated by residents of Texas, who get into a dispute that leads to litigation? In this case, the litigation which was filed in Texas was dismissed under the common law doctrine of forum non conveniens (or for non-Latin speakers, literally "forum not agreeing"). That doctrine seeks to have lawsuits decided in the most convenient forum, taking into account the plaintiff's choice of forum balanced against how a number of public and private factors that we detail below might favor an alternate forum. In this case, the trial court made detailed findings of fact supporting the argument that this suit would be better suited for trial in Mexico. But because it is unclear how those findings evaluated one entire side of the balance--the plaintiff's choice of forum--we reverse and remand to ensure that the proper test is applied to this case.
A. Factual Background1
This case arises out of a business dispute between Dr. Alejandro Diaz and Dr. Luis Aurelio Todd. Dr. Alejandro Diaz, Appellant here, is a citizen of Mexico who resides in El Paso, Texas, and has since 2009. Dr. Luis Aurelio Todd, Appellee here, enjoys dual citizenship and is also a resident of Texas.
Both Diaz and Todd initially worked together in Juarez, Mexico, in an entity called Familia Servicios Medicos de la Frontera S.A. de C.V., (Medicos de la Frontera) since at least 2008. The clinic performs medical examinations for persons seeking to immigrate to the United States. The U.S. Government requires such persons to undergo designated medical examinations by approved panel physicians. Medicos de la Frontera was owned by Todd's family, and during this time-period Todd had an ownership stake in the business.
Diaz resigned his position in Medicos de la Frontera in March 2013. He claims that starting in April 2013, he discussed with Todd creating their own business to provide the same kind of services. Diaz testified that "99 percent" of the conversations about starting this new business occurred at various locations in El Paso, Texas. At least according to Diaz's pleaded allegations, the two agreed to form a Texas partnership that would then create a Mexican corporation to operate the business in Mexico. And according to Diaz's allegations, the arrangement was based on Todd's promise to give up his interest in Medicos de la Frontera, which would be a competitor to their envisioned venture.
Pursuant to their plan, in July 2013, Diaz and Todd formed Medicos de Visas S. de R.L. de C.V. ("Medicos de Visas"), a Mexican corporation, to perform immigration focused medical examinations. Medicos de Visas gained the approval to conduct examinations for visa applicants through a memorandum of understanding with the U.S. State Department, signed at the U.S. Consulate in Juarez, Mexico. The memorandum of understanding remained in force for one year but could be renewed by the parties, although the State Department was under no obligation to do so.
Approximately a year later, Diaz and Todd formed Examenes Para Visas, S.C. ("Examenes Para Visas") another Mexican corporation. Medicos de Visas held the physical property and all the assets of the business, while Examenes Para Visas managed the employees and human resources. Both entities operated exclusively in Mexico; neither owned property, performed examinations, nor conducted business within the United States. All the employees were citizens of Mexico. The business grew, and by August 2016, it completed a two-million-dollar expansion of its facilities. But at this same time, Diaz claims Todd sabotaged the business.
Todd was responsible for the vaccine purchases. On September 8, 2016, the U.S. Consulate inspected the new facility and targeted the "cold room" where vaccines were stored. The next day the clinic received a letter from the Consular Section Chief directing it to cease administering all vaccines because of irregularities in its vaccine storage practices. On September 22, 2016, the CDC wrote the clinic pointing out specific concerns with a particular lot of vaccines obtained from Logisticia Medica, a Mexican pharmaceutical company based out of Monterrey, Mexico. The next week the State Department gave notice of its intent not to renew the memorandum of understanding for Medicos de Visas to perform immigration examinations. Without the memorandum of understanding, the business soon collapsed.
That might have been the end of the story, but Diaz believes, and later alleged in a lawsuit that he filed in County Court at Law Number Three in El Paso County, Texas, that Todd had not sold his interest in the Medicos de la Frontera family business.2 Further, Diaz alleges that Todd's family members had pressured him into sabotaging Medicos de Visas. Based principally on the alleged facts that Todd (1) misrepresented his divestiture in the competing company, (2) mismanaged the vaccines, and (3) affirmatively acted to have the memorandum of understanding not renewed, Diaz alleged a number of claims in his Texas suit. He sued individually, in his capacity as partner in the alleged Texas partnership, and as a member, or alternatively on behalf of Medicos de Visas. Diaz asserted claims for: (1) breach of fiduciary duty arising under the Texas Business Organization Code, or by virtue of a confidential relationship; (2) common law and statutory fraud; (3) tortious interference with prospective business relationship; (4) breach of a fiduciary duty created under Mexican law; and (5) piercing the veil of the Medicos de Visas to obtain relief from Todd directly.
Aside from denying the relevant allegations, Todd filed a motion to dismiss the case under the equitable doctrine of forum non conveniens , arguing that all the events, witnesses, and documents were in Mexico. Diaz responded, contending the controlling factors favored retaining his choice of a Texas forum. After an evidentiary hearing, the trial court granted Todd's motion.
On appeal, Diaz raises ten issues for review which can generally be grouped as follows:
The doctrine of forum non conveniens "den[ies] audience to a case on the merits, [requiring instead] that the merits should be adjudicated elsewhere." Sinochem Int'l Co. Ltd. v. Malaysia Int'l Shipping Corp. , 549 U.S. 422, 432, 127 S.Ct. 1184, 167 L.Ed.2d 15 (2007) (internal quotes and citations omitted). A trial court should apply the doctrine of forum non conveniens when it determines that, for the convenience of the parties and witnesses and in the interest of justice, the action should be instituted in another forum. Exxon Corp. v. Choo , 881 S.W.2d 301, 302 n.2 (Tex. 1994). The doctrine properly applies when the court might otherwise have personal jurisdiction over the parties, but the action lacks a significant connection to the forum. In re Bridgestone Americas Tire Operations, LLC , 459 S.W.3d 565, 568 (Tex. 2015). For Texas wrongful death and survival claims, the analysis is dictated by statute. See TEX.CIV.PRAC. & REM.CODE ANN. § 71.051 (); In re Mahindra, USA Inc. , 549 S.W.3d 541, 544 (Tex. 2018) (); Alvarez Gottwald v. Dominguez de Cano , 568 S.W.3d 241, 246 (Tex.App.--El Paso 2019, no pet.) (same). But in this case, the forum non conveniens analysis is dictated by the common law. And Texas courts have routinely looked to a well-developed body of federal law to guide forum non conveniens disputes. See Quixtar Inc. v. Signature Mgmt. Team, LLC , 315 S.W.3d 28, 32 (Tex. 2010) (); In re Omega Protein, Inc. , 288 S.W.3d 17, 20 (Tex.App.--Houston [1st Dist.] 2009, original proceeding) ( same).
At its core, forum non conveniens is a balancing act. Courts balance the plaintiff's choice of forum against how a set of public and private interests might "strongly favor" an available alternate forum. Veba-Chemie A.G. v. M/V Getafix , 711 F.2d 1243, 1245 (5th Cir. 1983) (). Stated otherwise, the plaintiff's choice of forum is entitled to deference, and a defendant seeking forum non conveniens dismissal "bears a heavy burden" to overcome that chosen forum. Quixtar , 315 S.W.3d at 31 citing Sinochem , 549 U.S. at 430, 127 S.Ct. 1184 ; see also Piper Aircraft Co. v. Reyno , 454 U.S. 235, 255, 102 S.Ct. 252, 70 L.Ed.2d 419, (1981) ().3 This strong presumption, however, applies only for a resident of a State filing suit in that same State. A non-resident plaintiff's choice to sue in Texas enjoys "substantially less deference" than it would if the plaintiff had been a resident of Texas. Quixtar , 315 S.W.3d at 33.
There is of course nothing to balance if there is no...
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