Reversed and Rendered and Opinion filed October =
30,=20
2007.
In The
Fourteenth=20
Court of Appeals
_______________
NO. 14-06-00685-CV
_______________
STUDEBAKER WORTHINGTON LEASING CORP.,=20
Appellant
V.
TEXAS SHUTTERS =
CORP. and=20
JESUS FIGUEROA a/k/a JESSE FIGUEROA,=20
Appellees
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On Appeal from the 127th District=20
Court
Harris County, Texas
Trial Court Cause No. 06-31217
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O P I N I O N
In this suit to =
enforce a=20
foreign judgment, Studebaker Worthington Leasing Corporation =
(AStudebaker@) appeals an order =
vacating a=20
New York judgment that had been entered in its favor against Texas =
Shutters Corporation and Jesus Figueroa a/k/a Jesse Figueroa=20
(collectively, ATexas =
Shutters@) on the grounds =
that: (1)=20
Texas Shutters=3Ds motion to vacate =
the New York=20
judgment collaterally attacked the merits of the original =
controversy; (2)=20
Texas Shutters did =
not present=20
evidence negating grounds for jurisdiction under New York =
law; and (3) the =
bankruptcy of=20
Studebaker=3Ds assignor, =
NorVergence Inc.=20
(ANorVergence@) did not stay the =
New York=20
action because the equipment rental agreement at issue was =
assigned to=20
Studebaker before NorVergence filed bankruptcy. We reverse =
the trial=20
court=3Ds judgment vacating =
the New=20
York judgment and render judgment reinstating that =
judgment.
Background
Texas Shutters =
entered into an=20
equipment rental agreement (the Alease@) with NorVergence, =
which=20
assigned the lease to Studebaker. In 2004, Studebaker filed =
suit=20
against Texas Shutters in a New York state court, alleging that =
Texas=20
Shutters had failed to make the required payments under the =
lease. =20
Texas Shutters did not answer, and the New York court entered a =
default=20
judgment against it. Studebaker then sought to enforce the =
New York=20
judgment in Harris County, Texas, pursuant to the Uniform =
Enforcement of=20
Foreign Judgments Act. =20
Texas Shutters filed a motion to vacate the New York judgment, =
which the=20
trial court granted.
Personal=20
Jurisdiction
Studebaker=3Ds first and second =
issues=20
contend that the trial court erred by granting the motion to =
vacate=20
because it improperly attacked the merits of the original =
controversy,=20
rather than establishing that the New York court lacked=20
jurisdiction. Texas Shutters contends that the forum =
selection=20
clause in the lease that the New York court relied upon to provide =
personal jurisdiction over it: (1) does not comply with section =
35.53 of=20
the Texas Business and Commerce Code; (2) is voidable because it =
is not=20
conspicuous and amounts to a Afloating@ jurisdiction clause; =
and,=20
thus, (3) fails to satisfy federal and state due process =
requirements for=20
the exercise of jurisdiction over it.
A judgment of one =
state court=20
is conclusive on the merits of the case in another =
state=3Ds court if the =
rendering court=20
had jurisdiction over the subject matter and parties. =20
Underwriters
Nat=3Dl Assurance Co. v. N. =
Carolina=20
Life & Accident & Health Ins. Guar. Ass=3Dn, 455 U.S. 691, =
704B05 (1982). As =
applicable=20
here, a lack of personal jurisdiction can be established by =
showing that=20
the exercise of personal jurisdiction over the defendant fails to =
comply=20
with the due process requirements. See, e.g., PHC-Minden, =
L.P. v.=20
Kimberly-Clark Corp., __ S.W.3d __, __ (2007). To =
satisfy these=20
requirements, (1) the defendant must have established minimum =
contacts=20
with the forum state; and (2) the exercise of jurisdiction =
comports with=20
traditional notions of fair play and substantial justice. =20
Id.
Sufficient minimum =
contacts can=20
create either specific or general jurisdiction. Specific=20
jurisdiction requires a defendant=3Ds liability to have =
arisen=20
from, or be related to, its activities in the forum =
state. See=20
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 =
(1985). =20
General jurisdiction also allows a forum to exercise jurisdiction =
over a=20
defendant who maintains a Apermanent@ or continuous =
presence in the=20
state if the defendant's contacts are continuous and systematic.=20
See Helicopteros Nacionales de Columbia, S.A. v. =
Hall, 466=20
U.S. 408, 114B15 n.8 =
(1984).
In this case, it is =
uncontested=20
that Texas Shutters never conducted business in New York, sought =
to=20
conduct business in New York, or (in the case of Jesus Figuero) =
ever even=20
visited New York, and, thus, that its liability did not arise from =
its=20
activities in that State. Although Studebaker relies upon a =
single=20
check that Texas Shutters sent to Studebaker=3Ds New York address, =
Studebaker=20
has cited, and we have found, no authority holding that a single =
such=20
payment is sufficient to confer specific personal or general =
jurisdiction=20
over a defendant.
However, the =
enforcement of a=20
forum selection clause, in which parties stipulate in advance to =
submit=20
their disputes for resolution within a particular jurisdiction, =
does not=20
offend
due process where the =
provision=20
has been obtained through freely negotiated agreements and are not =
unreasonable and unjust. Burger King, 471 U.S. at 473 =
n.14. In finding that Texas Shutters was subject to its =
personal=20
jurisdiction, the New York court relied on the forum selection =
clause in=20
the lease, which provides that if the agreement is assigned, the =
venue of=20
any legal action shall be in the state where the assignee's =
principal=20
headquarters are located. In=20
that regard, Studebaker=3Ds principle =
headquarters are=20
located in New York.
In order for a =
judgment=20
rendered by another state to be given the same recognition in this =
state=20
as it would receive in the rendering state, the validity of such a =
judgment must be determined by the laws of the rendering =
state. =20
Bard v. Charles R. Myers Ins. Agency, Inc., 839 S.W.2d 791, =
795=20
(Tex. 1992). With exceptions not applicable here, New York =
courts=20
have found floating forum selection clauses, like the one in this =
case,=20
valid. See, e.g., Sterling Nat=3Dl Bank v. E. Shipping =
Worldwide, Inc., 35 A.D.3d 222,=20
222B23 (N.Y. App. Div. =
2006). =20
In addition, although the United States Supreme Court has not =
addressed=20
the issue, absent allegations of fraud, most appellate courts have =
found=20
such clauses to be a valid waiver of the due process =
jurisdictional=20
requirements. =20
Because the exercise of personal jurisdiction by the New York =
court thus=20
comports with the decisions of that state and does not clearly =
violate=20
federal due process requirements, we have no basis to deny full =
faith and=20
credit to the New York judgment on jurisdictional grounds. =20
Accordingly, appellant=3Ds first and second =
issues are=20
sustained to that extent.
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Bankruptcy Stay
Studebaker=3Ds third issue =
contends that the=20
bankruptcy of NorVergence did not deprive the New York court of=20
jurisdiction or stay enforcement of the New York judgment in =
Texas=20
because Studebaker was assigned its rights under the lease before=20
NorVergence filed for bankruptcy. In=20
this regard, it is undisputed that: (1) Norvergence assigned the =
rights to=20
Studebaker on February 25, 2004; (2) Norvergence=3Ds creditors commenced =
an=20
involuntary bankruptcy proceeding against it on June 30, 2004; (3) =
Studebaker filed suit against Texas Shutters in New York on =
September 28,=20
2004; and (4) the New York court rendered judgment against Texas =
Shutters=20
on December 17, 2004.
Among other things, =
the filing=20
of a bankruptcy petition operates to stay, as to all entities, any =
act to=20
obtain possession of the property of the estate. 11 U.S.C.A. =
' 362(a)(3) (2004 =
& Supp.=20
2007). Any action taken in violation of the stay is =
void. =20
Cont=3Dl Casing Corp. v. =
Samedan Oil=20
Corp., 751=20
S.W.2d 499, 501 (Tex. 1988).
In this case, =
however, the=20
lease was no longer the property of NorVergence at the time of its =
bankruptcy filing. Moreover, while a bankruptcy trustee may =
avoid=20
certain transfers of a bankruptcy debtor=3Ds interest in =
property, Texas=20
Shutters does not allege, and our record does not reflect, that =
the=20
trustee in the NorVergence bankruptcy proceeding ever sought to do =
so with=20
regard to the assignment of the lease to Studebaker. =
Therefore, we=20
have no basis to conclude that the New York lawsuit was, or the=20
enforcement of its judgment is, subject to a stay by reason of the =
NorVergence bankruptcy, and Studebaker=3Ds third issue is=20
sustained.
Because our record =
does not=20
reflect that the New York court lacked jurisdiction over the =
subject=20
matter or parties in this case, we reverse the trial =
court=3Ds judgment, vacating =
the=20
New York judgment, =
and render=20
judgment that the New York judgment be reinstated.
/s/ =20
Richard H. Edelman
Senior Justice
Judgment rendered and =
Opinion=20
filed October 30, 2007.
Panel consists of =
Chief Justice=20
Hedges, and Justices Fowler and Edelman.
=20
See Tex. Civ. Prac. & Rem. Code '' 35.001-35.008 (Vernon 1997 & Supp.=20
2006).
=20
To have the requisite minimum contacts with a forum state, a =
defendant=20
must act deliberately and Apurposefully avail@ itself of the privilege of conducting =
activities=20
in the forum state, thereby invoking the benefits and protections =
of its=20
laws. See Asahi Metal Indus. Co., v. Superior Court of Cal.,=20
Solano, 480 U.S. 102, 112B13 (1987).
=20
See, e.g, PHC-Minden, __ S.W.3d at __ (holding that even =
numerous=20
payments totaling over $1 million to Texas vendors were not =
sufficient to=20
establish general jurisdiction).
=20
The provision states:
This agreement shall be governed by, =
construed and=20
enforced in accordance with the laws of the State in which =
Rentor's=20
principal offices are located or, if this Lease is assigned by =
Rentor, the=20
State in which the assignee's principal offices are located, =
without=20
regard to such State's choice of law considerations and all legal =
actions=20
relating to this Lease shall be venued exclusively in a state or =
federal=20
court located within that State, such court to be chosen at Rentor =
or=20
Rentor's assignee's sole option.
=20
See Preferred Capital, Inc. v. Assocs. In Urology, =
453 F.3d=20
718, 721B24 (6th Cir. 2006); IFC Credit Corp. =
v =20
Aliano Bros. Gen. Contractors, Inc., 437 F.3d 606, 610 (7th =
Cir.=20
2006); Susquehanna Patriot Commercial Leasing Co., v. Holper =
Indus.=20
Inc., 928 A.2d 278 (Pa. Super. Ct. 2007); Liberty Bank, =
F.S.B. v .=20
Best Litho, Inc., 737 N.W.2d 312 (Iowa Ct. App. 2007). =
But=20
see Preferred Capital, Inc. v. Power Eng=3Dg Group, Inc., 860 N.E.2d 741, 746 (Ohio=20
2007).
=20
Texas Shutters=3Ds brief does not respond to this=20
contention.
=20
Senior Justice Richard H. Edelman sitting by=20
=
assignment. |