Irani Eng'g v. Arcadia Gas Storage, LLC
| Docket Number | 01-21-00113-CV |
| Decision Date | 23 August 2022 |
| Parties | IRANI ENGINEERING, INC. AND BART GOODING, Appellants v. ARCADIA GAS STORAGE, LLC, AND CARDINAL GAS STORAGEPARTNERS LLC, Appellees |
| Court | Texas Court of Appeals |
On Appeal from the 11th Judicial District Court Harris County Texas Trial Court Case No. 2020-31121
Panel consists of Chief Justice Radack and Justices Kelly and Landau.
Appellants Irani Engineering, Inc. and Bart Gooding, bring this interlocutory appeal challenging the trial court's order denying their special appearance. Appellants contend that the trial court erred in determining that they were subject to the jurisdiction of a Texas court.
We affirm the trial court's holding that the court has specific personal jurisdiction over Irani. We reverse and render judgment dismissing without prejudice Appellee's claims against Gooding.
This suit arises out of a gas well blowout that occurred at an Arcadia Gas Storage facility in Bienville Parish, Louisiana. The well, GH-001, is owned and operated by Appellees, Cardinal Gas Storage Partners LLC and its wholly owned subsidiary, Arcadia Gas Storage, LLC. Both appellees are Texas-based companies. Cardinal's base of operations is in Houston, Texas. Cardinal hired Irani to drill GH-001 in 2010, later to convert the well for gas storage in 2013, and again in 2018 when the blowout occurred. In 2018, Cardinal hired Irani to write a program to implement a repair of GH-001's loss of 105 feet of pipe. Irani hired Gooding as an independent consultant to be Irani's well supervisor and run the day-to-day operations at the well site. During the repair, there was a blowout: over 4,000 feet of pipe detached from the well, causing an uncontrolled release of gas.
Irani has worked on wells for Cardinal at four separate facilities. Irani has performed engineering work on dozens of wells owned by Cardinal. Cardinal is a wholly owned subsidiary of Martin Midstream Partners L.P. Martin requires all contractors working at facilities owned by it or its subsidiaries to sign a Facility Access and Indemnity Agreement (FAIA). Irani's president executed an FAIA for the Arcadia facility where the blowout happened.
The FAIA contains a forum-selection clause that designates Texas state district courts as the exclusive jurisdiction for any disputes between Irani and Martin subsidiaries, which includes Arcadia and Cardinal. After executing the agreement, Irani submitted a bid to design and supervise a repair on the GH-001 well.
As a result of the blowout, Arcadia and Cardinal claim they experienced loss, expense, and damage to the well. Arcadia and Cardinal sued Irani and Gooding for contractual indemnity, breach of contract, negligence, and gross negligence based on a breach of their agreement by failing to complete the work properly. After removal to federal court and remand to state court, Irani and Gooding filed special appearances challenging personal jurisdiction. The trial court denied Appellants' special appearance without findings of fact or conclusions of law. Irani and Gooding appealed, challenging denial of their special appearances. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(7) ().
"Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law that we review de novo." Old Republic Nat'l Title Ins. Co. v. Bell, 549 S.W.3d 550, 558 (Tex. 2018). When there is a challenge to personal jurisdiction, the plaintiff has "the initial burden to plead sufficient allegations to confer jurisdiction." Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009). The burden then shifts to the defendant "to negate all potential bases for jurisdiction pled by the plaintiff." Id.
When the trial court does not issue findings of fact and conclusions of law, we imply all facts necessary to support the judgment and supported by evidence. Old Republic, 549 S.W.3d at 558. When the appellate record includes the reporter's and clerk's records, the implied findings may be challenged for legal and factual sufficiency. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).
To review legal sufficiency, we consider the evidence in the light most favorable to the finding and indulge every reasonable inference supporting that finding. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We credit favorable evidence if a reasonable factfinder could, and we disregard contrary evidence unless a reasonable factfinder could not. Id. For legal sufficiency, the evidentiary challenge fails if there is more than a scintilla of evidence to support the finding. BMC Software, 83 S.W.3d at 795. The defendant can show that even if the plaintiff's allegations are true, the evidence is legally insufficient to establish jurisdiction. Kelly v. General Interior Const., Inc., 301 S.W.3d 653, 659 (Tex. 2010).
For factual sufficiency, we consider all the evidence, and we will set aside a finding only if it is so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). If the evidence supports the findings, we must uphold the trial court's judgment on any legal theory supported by the findings. PetroSaudi Oil Servs. Ltd. v. Hartley, 617 S.W.3d 116, 133 (Tex. App-Houston [1st Dist.] 2020, no. pet.).
Contractual forum-selection clauses are presumptively valid and enforceable. Rieder v. Woods, 603 S.W.3d 86, 93 (Tex. 2020); In re AIU Ins. Co., 148 S.W.3d 109, 113-14 (Tex. 2004). A valid forum-selection clause constitutes consent to the jurisdiction of the agreed forum. Rieder, 603 S.W.3d at 93. The party seeking enforcement of a forum-selection clause must show that the parties agreed to an exclusive forum and that the agreement covers the relevant claims. Phoenix Network Techs. (Eur.) Ltd. v. Neon Sys., Inc., 177 S.W.3d 605, 610 (Tex. App.-Houston [1st Dist.] 2005, no pet.). Once that is established, the burden shifts to the opposing party to show that "(1) enforcement would be unreasonable or unjust, (2) the clause is invalid for reasons of 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." In re ADM Investor Servs., Inc., 304 S.W.3d 371, 375 (Tex. 2010) (orig. proceeding).
A. Irani Engineering
Irani argues that 1) the trial court erred by not following the terms of the Consulting Agreement governing Irani's work on the GH-001 well in 2010; 2) the trial court erred by determining it could exercise personal jurisdiction over Irani based on the forum-selection clause in the FAIA; and 3) there is insufficient evidence to support the trial court's determination that it could exercise general or specific jurisdiction over Irani.
Irani contends that the unsigned 2010 Consulting Agreement, not the FAIA, governs its work on the GH-001 well. The Consulting Agreement included a dispute resolution clause directing that any dispute between the parties under the Consulting Agreement would first go through mediation, then arbitration, and, if needed, trial. Throughout dispute resolution, Louisiana law would apply and "any mediation, arbitration, or trial court suit or action between or involving the parties [would] be commenced and conducted exclusively in the United States District Court for the Eastern District of Louisiana." Irani also points to a merger clause in the Consulting Agreement stating that "[n]o changes to the Agreement, its exhibits, or appendices, whether in the form of written negotiations, correspondence, representations, alterations, additions or changes or otherwise, shall be binding unless specifically agreed to in writing signed by both parties."
Appellees contend that the FAIA, not the Consulting Agreement, applies and that its forum-selection clause, identifying Texas state courts as the exclusive forum, establishes Irani's consent to Texas jurisdiction. So, to determine whether Irani agreed to Texas jurisdiction over its work on the GH-001 well, the question is whether the trial court could rely on the FAIA's terms.
1. The Consulting Agreement and the FAIA
Irani does not dispute that it signed the FAIA or that the FAIA contains a forum-selection clause. But it contends that the Consulting Agreement, prepared in 2010 for its work to manage and supervise the drilling of the GH-001 well, governs the relationship between Irani and Appellees for purposes of Irani's work on the same well in 2018. But no party provided a signed Consulting Agreement. Instead, Irani provided an unsigned copy of the Consulting Agreement, a signed drilling proposal, a memorandum about the drilling proposal, and emails exchanged between Irani and Cardinal about the Consulting Agreement.
If an original writing is lost or destroyed, unless the proponent lost or destroyed the original in bad faith, the proponent can present other evidence of the writing's existence and content. See Tex. R. Evid. 1004. A party can establish loss or destruction of a document by providing proof of a search for the document and the inability to locate it. Travis Cnty. Water Control & Improvement Dist. No. 12 v. McMillen, 414 S.W.2d 450, 453 (Tex. 1966). Irani provided an affidavit from its CEO, Ardeshir Irani, stating that Irani and Cardinal entered into a consulting agreement but that he could not locate a copy of the fully executed agreement. For credibility determinations, we will not substitute our judgment for that of the factfinder. See Huynh...
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