In re OSG Ship Mgmt., Inc.

• Citation: 514 S.W.3d 331
• Decision Date: 29 December 2016
• Docket Number: NO. 14–16–00240–CV,14–16–00240–CV
• Parties: IN RE OSG SHIP MANAGEMENT, INC., Relator
• Court: Court of Appeals of Texas

514 S.W.3d 331

IN RE OSG SHIP MANAGEMENT, INC., Relator

NO. 14–16–00240–CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed December 29, 2016.

Robert L. Klawetter, Christina K. Schovajsa, Houston, TX, for Relator.

Kurt B. Arnold, Houston, TX, for Real Party in Interest.

Panel consists of Justices Christopher, McCally, and Busby.

OPINION

J. Brett Busby, Justice

Relator OSG Ship Management, Inc. filed a petition for writ of mandamus in this Court, seeking enforcement of a forum-selection clause in an agreement it made with one of its seamen after he was injured. See Tex. Gov't Code Ann. § 22.221 (West 2004) ; see also Tex. R. App. P. 52. In the petition, relator asks us to compel the Honorable Elaine Palmer, presiding judge of the 215th District Court of Harris County, to set aside her March 7, 2016 order denying OSG's motion to dismiss and sign an order granting the motion to dismiss in the underlying case asserting personal injury claims under the Jones Act.

We conclude that the agreement at issue contains a clause selecting a Florida forum, that it is supported by consideration and not invalid under the Federal Employers Liability Act or on public policy grounds, and that its execution without the involvement of a union representative did not violate the parties' collective bargaining agreement. We conditionally grant the petition.

BACKGROUND

Rasheed Lawal sustained an injury on July 19, 2015, in the course and scope of his employment as a steward with OSG on the M/T Overseas Anacortes , a products tanker operating in the Bahamas. Lawal notified the vessel's master of his injury the next day, and he was immediately sent ashore for medical attention. Lawal was evaluated and then returned to the vessel. After a follow-up medical appointment three days later, Lawal was declared unfit for duty.

Lawal was employed under a collective bargaining agreement ("CBA") between the Seafarers International Union, of which he was a member, and the American Maritime Association, of which OSG was a member. Pursuant to the CBA, OSG commenced maintenance and cure payments of $16 per day to Lawal the day after he signed off the vessel.¹ On July 28, 2015, OSG wrote Lawal that it was offering him the opportunity to participate in a Post Incident Payment Plan. Under the Plan, OSG would pay Lawal $2,500 per month until Lawal reached maximum medical cure or the amount paid totaled $10,000.² In exchange for participating in the Plan, Lawal agreed to limit the forum in which Lawal could file suit to a federal or state court located in Hillsborough County, Florida. OSG explained to Lawal that "[y]ou are not required to participate in the Plan and you will not suffer any adverse employment actions by OSG if you decide not to participate in the Plan."

Lawal signed the Post Incident Payment Plan Agreement ("PPA") on August 3, 2015, which provided, in its entirety:

I, Rasheed Lawal, request that OSG Ship Management, Inc. allow me to participate in the Plan. I agree to the terms and conditions of participating in the Plan as described in the above correspondence, including the material term that any claim, dispute or controversy whatsoever that arises from my alleged July 19, 2015 injury aboard the M/T OVERSEAS ANACORTES shall be litigated, if at all, in a federal court located in Hillsborough County, Florida to the exclusion of the courts of any other country, state, county, or city. In the event that a federal court lacks jurisdiction, then I agree to litigate any claim, dispute or controversy whatsoever that arises from my alleged July 19, 2015 injury in a state court of competent jurisdiction located in Hillsborough County, Florida to the exclusion of the courts of any other country, state, county, or city.

For the period beginning on August 1, 2015, and ending November 20, 2015, Lawal received a total of $10,000. Of this amount, $1,952 represented daily maintenance payments of $16 for 122 days.

Lawal filed suit against OSG in the 215th District Court in Harris County, in November 2015, seeking personal injury damages under the Jones Act³ and general maritime law in connection with the July 2015 incident. OSG filed a motion to dismiss the suit based on the forum-selection agreement contained in the PPA, which required Lawal to file suit in a federal or state court located in Hillsborough County, Florida. In a response and sur-response, Lawal argued that the PPA contained an unenforceable venue-selection agreement, the PPA is void for lack of consideration, enforcement of the PPA would be unreasonable because Lawal was not represented by legal counsel at the time he signed the PPA, and the PPA is not enforceable because a union representative did not represent Lawal at the time he signed the PPA.

The trial court held a hearing on OSG's motion to dismiss and denied the motion. OSG filed this petition shortly thereafter.

ANALYSIS

In its petition, OSG contends that the trial court abused its discretion by denying its motion to dismiss because the PPA is a forum-selection rather than a venue-selection agreement, it is supported by consideration, attorney representation was not necessary under the Texas Arbitration Act because that Act does not apply to forum-selection clauses, and union representation was not necessary because the PPA is not part of an employment agreement. Lawal responds with two additional arguments. First, Lawal asserts that the PPA is void because the Federal Employers Liability Act,⁴ which is incorporated into the Jones Act, prohibits forum-selection clauses between seamen and their employers. Second, Lawal argues that attorney representation was required because releases by seamen are subject to careful scrutiny. We address these issues below.

I. Standard of review

To be entitled to mandamus relief, a relator must demonstrate that (1) the trial court clearly abused its discretion; and (2) the relator has no adequate remedy by appeal. In re Reece , 341 S.W.3d 360, 364 (Tex. 2011) (orig. proceeding). A trial court clearly abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law or if it clearly fails to analyze the law correctly or apply the law correctly to the facts. In re Cerberus Capital Mgmt. L.P. , 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding) (per curiam). A trial court abuses its discretion when it fails to properly interpret or apply a forum-selection clause. In re Lisa Laser USA, Inc. , 310 S.W.3d 880, 883 (Tex. 2010)(orig. proceeding) (per curiam).

An appellate remedy is inadequate when a trial court improperly refuses to enforce a forum-selection clause because allowing the trial to go forward will vitiate and render illusory the subject matter of an appeal, i.e., trial in the proper forum. Id. ; see also In reNationwide Ins. Co. of Am. , 494 S.W.3d 708, 712 & n.2 (Tex. 2016) (orig. proceeding) ("[W]e have repeatedly held that appeal is inadequate to remedy the erroneous denial of such a motion [to dismiss based on a forum-selection clause]."). Thus, mandamus relief is available to enforce an unambiguous forum-selection clause. Lisa Laser USA, Inc. , 310 S.W.3d at 883.

II. The PPA includes a forum-selection clause.

The parties initially dispute whether the PPA includes a forum-selection clause. "The distinction between a forum selection clause and a venue selection clause is critical." Lui v.Cici Enters. L.P. , No. 14–05–00827–CV, 2007 WL 43816, at *2 (Tex. App.–Houston [14th Dist.] Jan. 9, 2007, no pet.) (mem. op.). Forum-selection clauses are presumptively valid unless shown to be unreasonable, and they may be enforced in Texas courts through a motion to dismiss. Id. ; see also In re Laibe Corp. , 307 S.W.3d 314, 316 (Tex. 2010) (orig. proceeding) (per curiam); In reInt'l Profit Assocs., Inc. , 274 S.W.3d 672, 675 (Tex. 2009) (orig. proceeding) (per curiam). Venue, in contrast, cannot be selected by private contract unless provided by statute. Lui , 2007 WL 43816, at *2. Moreover, unless venue is challenged by a motion to transfer venue filed before or concurrently with the defendant's answer, any objection to venue is waived. Id.

Forum refers to the jurisdiction, generally a nation or state, where suit may be brought. Id. ; see also Ramsay v. Tex. Trading Co. , 254 S.W.3d 620, 627 (Tex. App.–Texarkana 2008, pet. denied) (" ‘Forum’ generally refers to a sovereign state."). Venue concerns the geographic location within the forum where the case may be tried. In re Hannah , 431 S.W.3d 801, 806 (Tex. App.–Houston [14th Dist.] 2014, orig. proceeding) (per curiam). "Venue may and generally does refer to a particular county, but may also refer to a particular court." Gordon v. Jones , 196 S.W.3d 376, 383 (Tex. App.–Houston [1st Dist.] 2006, no pet.).

Lawal contends that the PPA includes a venue-selection clause because it designates "a federal court located in Hillsborough County, Florida" or, alternatively, "a state court of competent jurisdiction located in Hillsborough County, Florida." This contention does not end our inquiry, however, because not all agreements can be neatly labeled as selecting either a forum or a venue. Some agreements select both. Here, the choice by Lawal and OSG to select a county in the State of Florida as the proper venue necessarily implies that they chose the State of Florida as the forum for a suit arising from Lawal's injury. See In re Morice , No. 01–11–00541–CV, 2011 WL 4101141, at *1 (Tex. App.–Houston [1st Dist.] Sept. 15, 2011, orig. proceeding) (mem. op.) ("While [the parties] did not expressly select the State of New York as the forum in which such actions shall be tried, we conclude that their selection of a New York county as the proper venue for suits arising from the lease necessarily implies their selection of the State of New York as the forum for any such suit."); see also Lisa Laser USA, Inc. , 310 S.W.3d at 882 (addressing the following provision as a forum-selection clause: "[t]he...