Opinion
No. 14-08-00104-CV
Opinion filed April 9, 2008.
ORIGINAL PROCEEDING WRIT OF MANDAMUS.
Panel consists of Chief Justice HEDGES and Justices ANDERSON and BOYCE.
MEMORANDUM OPINION
On February 13, 2008, relators Medical Carbon Research Institute, L.L.C. and Jack C. Bokros, Ph.D. filed a petition for writ of mandamus in this court. See Tex. Gov't Code Ann. § 22.221 (Vernon 2004); see alsoTex. R. App. P. 52. In the petition, relators ask this court to compel the Honorable Ben Hardin, presiding judge of the 23rd District Court of Brazoria County, to vacate his February 20, 2007 order denying their motion to transfer venue, and to hold that the exclusive and mandatory venue for the underlying lawsuit is a state or federal court in Travis County, Texas. We deny the petition for writ of mandamus.
On April 26, 2005, real party in interest, Michael M. Phillips, filed suit against MCRI and Bokros in Brazoria County for breach of contract and fraud in connection with a 1994 Settlement Agreement through which Phillips acquired an equity interest in MCRI. On May 27, 2005, MCRI and Bokros filed a motion to transfer venue, or alternatively, motion to dismiss for lack of jurisdiction, and an answer subject to those motions. Relying on a 2005 Amended Operating Agreement governing MCRI's activities, MCRI and Bokros filed a motion to transfer venue to Travis County under the mandatory venue provision applicable to a "major transaction." See Tex. Civ. Prac. Rem. Code Ann. § 15.020(a) (Vernon Supp. 2007). On May 1, 2006, respondent held a hearing on MCRI and Bokros' motion to transfer venue; on February 20, 2007, respondent denied the motion.
To obtain mandamus relief the relator must show that the trial court clearly abused its discretion, and that the relator has no adequate remedy by appeal. In re Sw. Bell Tele. Co., L.P., 226 S.W.3d 400, 403 (Tex. 2007) (orig. proceeding). The trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable as to constitute a clear and prejudicial error of law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). Mandamus is the proper vehicle to enforce mandatory venue. See Tex. Civ. Prac. Rem. Code § 15.0642 (Vernon 2002).
Phillips asserts his claims are based on the 1994 Settlement Agreement; MCRI and Bokros maintain that the key agreement here is the 2005 Amended Operating Agreement containing a venue selection clause mandating that any claims be litigated in a state or federal court in Travis County. The 1994 Settlement Agreement contains no venue provision.
MCRI and Bokros previously filed a petition for writ of mandamus related to the same underlying case. See In re Med. Carbon Research Inst., L.L.C., No. 14-07-00935, 2008 WL 220366 (Tex.App.CHouston [14th Dist.] Jan. 29, 2008, orig. proceeding) (mem. op.). In that proceeding, MCRI and Bokros characterized the provision at issue as a forum selection clause, and sought to compel respondent to dismiss Phillips' suit for lack of jurisdiction pursuant to a forum selection clause to permit Phillips to refile in Travis County. Id. at *1. We held the provision to be a venue selection clause and denied MCRI and Bokros' petition. Id. at *1-2.
Under section 15.020(b), "An action arising from a major transaction shall be brought in a county if the party against whom the action is brought has agreed in writing that a suit arising from the transaction may be brought in that county." Tex. Civ. Prac. Rem. Code Ann. § 15.020(b) (Vernon Supp. 2007). "Amajor transaction" is defined as "a transaction evidenced by a written agreement under which a person pays or receives, or is obligated to pay or entitled to receive, consideration with an aggregate stated value equal to or greater than $1 million." Id. § 15.020(a).
It is undisputed that the proposed 2005 Amended Operating Agreement was submitted to MCRI's members on April 7, 2005. Voting on the proposed amendments occurred between April 29, 2005 and May 13, 2005. On May 17, 2005, Clyde Baker, President of MCRI, executed the 2005 Amended Operating AgreementCsome three weeks after Phillips filed the underlying lawsuit on April 26, 2005. The 2005 Amended Operating Agreement provides that it is effective as of January 1, 2005.
Assuming without deciding that this suit arises from a "major transaction" under section 15.020, and that the 2005 Amended Operating Agreement is germane to Phillips' claims, we conclude that the trial court did not commit a clear and prejudicial error of law in denying a motion to transfer venue predicated on section 15.020(b). It would be erroneous to conclude that venue of a suit was fixed by agreement under section 15.020(b) when the claimed agreement was not executed until weeks after suit was filed. The choice of a retroactive effective date does not change this conclusion; there was no binding and effective agreement to fix venue in Travis County on April 26, 2005, and for some weeks thereafter. At most, there was a proposed agreement. We reject MCRI and Bokros' contention that section 15.020(b) properly can be invoked under these circumstances. Therefore, we conclude that respondent did not abuse his discretion by denying MCRI and Bokros' motion to transfer venue to Travis County.
MCRI and Bokros have not established their entitlement to the extraordinary relief of a writ of mandamus. Accordingly, we deny MCRI and Bokros' petition for writ of mandamus.