Shamoun & Norman, LLP v. Yarto Int'l Grp., LP

• Decision Date: 31 May 2012
• Docket Number: Nos. 13–11–00087–CV, 13–11–00256–CV, 13–11–00281–CV.,s. 13–11–00087–CV, 13–11–00256–CV, 13–11–00281–CV.
• Citation: 398 S.W.3d 272
• Court: Texas Court of Appeals
• Parties: SHAMOUN & NORMAN, LLP, et al., Appellants, v. YARTO INTERNATIONAL GROUP, LP and YIG–GP, LLC, Appellees. Shamoun & Norman, LLP, et al., Appellants, v. Robert Yarto, et al., Appellees. In re Shamoun & Norman, LLP, et al.

398 S.W.3d 272

SHAMOUN & NORMAN, LLP, et al., Appellants,

v.YARTO INTERNATIONAL GROUP, LP and YIG–GP, LLC, Appellees.

Shamoun & Norman, LLP, et al., Appellants,

v.Robert Yarto, et al., Appellees.

In re Shamoun & Norman, LLP, et al.

Nos. 13–11–00087–CV, 13–11–00256–CV, 13–11–00281–CV.

Court of Appeals of Texas, Corpus Christi–Edinburg.

May 31, 2012.

Brent A. Bishop, Edmundo O. Ramirez, Ellis, Koeneke & Ramirez, McAllen, Melvin Lee Smith Jr., Richard William Espey, Espey & Associates, PC, San Antonio, for Appellants and Relator.

Michael A. McGurk, Ricardo Pumarejo Jr., Kittleman, Thomas, Ramirez & Gonzales, McAllen, for Appellees.

J. Michael Moore, David J. Lumber, Guerra & Moore, McAllen, Raymond L. Thomas, Michael A. McGurk, Ricardo Pumarejo Jr., Kittleman, Thomas, Ramirez & Gonzales, McAllen, for Real Party in Interest.

Before Chief Justice VALDEZ and Justices GARZA and VELA.

OPINION ON REHEARING

Memorandum Opinion on Rehearing by Justice GARZA.

We grant in part and deny in part the motion for rehearing filed by appellants/relators Shamoun & Norman, LLP, Gregory Shamoun and Brian Norman (collectively “Shamoun”), vacate and withdraw our previous memorandum opinion and judgment dated January 19, 2012, and issue the following in its place.

By two interlocutory appeals and a petition for writ of mandamus, Shamoun challenges (1) the trial court's order imposing an anti-suit injunction, and (2) its orders denying two motions to transfer venue. We will deny the petition for writ of mandamus, reverse the trial court's judgment granting the anti-suit injunction, affirm the trial court's denial of the motions to transfer venue, and remand for further proceedings.

I. Background

Shamoun, a law firm based in Dallas County, was sued by appellee/real party in interest Robert Yarto on April 28, 2010 in Hidalgo County. Yarto asserted claims of professional negligence, breach of fiduciary duty, and theft of trade secrets. Yarto's petition, which requested damages and injunctive relief, alleged that Shamoun represented Yarto on several prior occasions but is “currently representing parties adverse to [Yarto] on matters similar to those for which [it] had previously represented [Yarto].” Yarto further alleged that Shamoun “illegally obtained confidential financial documents and/or trade secrets belonging to [Yarto].” According to the petition, Shamoun breached its fiduciary duty to Yarto by (1) “represent[ing] parties adverse to [Yarto],” (2) “disclos[ing] confidential communications” to those adverse parties during a 2010 mediation in Travis County, and (3) “us[ing] illegally obtained documents to [Yarto]'s detriment.” The petition also named Rhoderick Williams and Steven Winkler as defendants.¹

On April 29, 2010, Shamoun answered Yarto's suit and filed a motion to transfer venue. The answer contained a general denial of Yarto's allegations and asserted various affirmative defenses. The motion to transfer asserted that Dallas County or Collin County was a proper venue for the litigation, and Hidalgo County was improper, because: (1) the alleged tortious acts and omissions occurred in Dallas and/or Collin Counties; (2) Shamoun maintains its principal place of business in those counties; and (3) witnesses, documents, and evidence related to the case are located in those counties.

The next day, Yarto's suit was removed to bankruptcy court. The debtor in the bankruptcy proceedings was YITC–GP, LLC (“YITC–GP”), a corporation set up to serve as general partner of Yarto International Trading Group, L.P. (“YITC”). YITC and YITC–GP, as well as two other entities, appellees/real parties in interest Yarto International Group, L.P. (“YIG”), and YIG–GP, LLC (“YIG–GP”), were founded by Yarto but later came to be owned and operated by Williams and Winkler.² At the time the bankruptcy proceedings commenced, YIG, YITC, Williams and Winkler were all represented by Shamoun in various lawsuits involving Yarto and multiple third parties. All of those pending cases, along with Yarto's suit against Shamoun, were removed to bankruptcy court on April 30, 2010. See28 U.S.C. § 1334(b) (stating that federal district courts have “original but not exclusive jurisdiction of all civil proceedings ... arising in or related to cases under” the federal bankruptcy code); id. § 1452(a) (providing for removal to bankruptcy court of claims related to bankruptcy cases).

Eventually, the parties agreed to settle their outstanding claims in exchange for mutual releases. A global settlement agreement, drafted by Shamoun at the direction of the parties, was executed on December 9, 2010. As part of the agreement, YIG agreed to transfer certain assets to YITC; Williams and Winkler agreed to transfer ownership of YIG to Yarto; and YITC pledged to pay more than $1.5 million in settlement payments to various parties.³ The agreement further provided that: (1) YITC would release Yarto from any and all claims related to the pending litigation; and (2) Yarto would release YITC, along with its “past and present agents, representatives, officers, directors and attorneys,” including Winkler and Williams, from any and all claims related to the pending litigation, with one notable exception:

15. Shamoun Litigation. Nothing in this Agreement shall be construed as a release of Shamoun by Yarto. The Parties hereby acknowledge and agree that, with respect to any claim, lawsuit, complaint or proceeding (whether judicial or otherwise) brought by any of the Yarto Parties [i.e., Yarto and YIG] ... against Shamoun and/or any of its partners or affiliates (in each case, a “Shamoun Claim”), (a) such Shamoun Claim shall be brought in an appropriate state court located in Travis County, Texas, and (b) none of the Yarto Parties ... shall be permitted to bring a Shamoun Claim in any court not located in Travis County, Texas. The parties hereby acknowledge[] and agree that (y) Shamoun is and shall be considered a third-party beneficiary [ ⁴ ] with respect ... to [this] Agreement, and (z) Shamoun shall have the right to directly enforce this provision ... on Shamoun's own behalf.

The agreement stated that, upon execution of the settlement documents, Yarto's suit against Shamoun would be remanded from bankruptcy court to state district court.⁵ The settlement agreement also contained the following paragraph:

27. SUBMISSION TO JURISDICTION. THE PARTIES HEREBY AGREE THAT ANY AND ALL CLAIMS, ACTIONS, CAUSES OF ACTION, SUITS, AND PROCEEDINGS RELATING TO THIS AGREEMENT OR THE OTHER AGREEMENTS CONTEMPLATED HEREIN SHALL BE FILED AND MAINTAINED ONLY IN AN APPROPRIATE STATE OR FEDERAL COURT IN TRAVIS COUNTY, TEXAS, AND THE PARTIES HEREBY CONSENT TO THE JURISDICTION OF SUCH COURT.

On December 1, 2010, after the settlement agreement had been negotiated but prior to its execution, Shamoun sent a letter to Williams and Winkler addressing Shamoun's status theretofore as counsel of record for YIG. The letter stated:

Prior to the settlement, this firm provided services to the so-called YITC Parties which, at the beginning, included [YIG]. Pursuant to the Settlement Agreement, [YIG is] transferring certain assets to the YITC parties and ownership of [YIG] will be transferred solely to the so-called “Yarto Parties” side of the litigation. This letter is to confirm and clarify that, this firm provided services only to the YITC Parties. With respect to the Settlement Documents which provide that [YIG] will be transferred to the Yarto Parties, this firm has not represented [YIG]. [YIG] further acknowledge[s] that [it was] promptly made aware of this issue and [was] advised of [its] right to retain separate counsel to advise [it] regarding the YIG Settlement Documents and this letter.

[YIG] understand[s] that the YIG Settlement Documents were prepared according to instructions of the YITC Parties and the final instructions from the parties utilizing the YIG Settlement Documents and their attorneys at the time of closing of the YIG Settlement Documents. No representations have been made as to the legal effects or tax consequences of the YIG Settlement Documents. Additionally, [YIG] acknowledge[s] that [it] understand[s] that [Shamoun] has made no independent investigation, representation or assurance whatsoever regarding the compliance of the contemplated transaction as evidenced by the YIG Settlement Documents with tax, securities, or other law of the United States of America having jurisdiction over this transaction.

[YIG] understand[s] that [Shamoun] is not employed for representation generally or for any purpose in connection with the YIG Settlement Documents other than that stated above. [YIG] acknowledge[s] that [it has] read, understand[s], and hereby approve[s] of the YIG Settlement Documents.The letter was countersigned by Williams and Winkler as representatives of YIG.

After the settlement agreement was executed, the bankruptcy court remanded Yarto's suit to state district court in Hidalgo County. Yarto and Shamoun were the only parties remaining in the pending litigation. On December 29, 2010, Yarto filed an “Agreed Motion to Transfer Venue” in which he conceded that he “agreed in the settlement agreement to prosecute his remaining claims against [Shamoun] solely in Travis County, Texas.” The motion was signed by counsel for both Yarto and Shamoun.

However, on January 19, 2011, before the trial court heard or ruled upon the agreed motion to transfer, YIG intervened in the case. Its petition in intervention, sworn to by Yarto as an authorized representative of YIG, asserted that Shamoun committed professional negligence and breached its fiduciary duty by, among other things: (1) representing parties adverse to YIG; (2) disclosing confidential communications involving YIG; and (3) “conspir[ing] with others to divest [YIG] of valuable and lucrative assets, leaving [YIG] devoid of all assets.” YIG additionally alleged that Shamoun “represent[ed] [YIG] in the course of the global settlement, and extracted...