603 S.W.3d 86
Tex.2020Background
- Cadbury Solutions LLC (Nevada LLC; members: Woods, Rieder, Rapee) and CQuentia Series LLC (Texas Series LLC; manager/CEO Meeker) executed separate documents on Feb. 1, 2016: the Cadbury Operating Agreement (Cadbury Agreement) and a Series Agreement between Cadbury and CQuentia.
- Only Cadbury and CQuentia signed the Series Agreement (Woods signed for Cadbury; Meeker signed for CQuentia) and it contains a Texas choice-of-law clause and an exclusive forum-selection clause for Tarrant County, Texas.
- The Cadbury Agreement (signed by Woods, Rieder, Rapee) is separate, governed by Nevada law, contains member duties and a board-exculpation clause, and does not mention the Series Agreement.
- Parties’ relationship collapsed; Woods sued Cadbury, Rieder, and Rapee in Texas (invoking the Series Agreement forum clause); Cadbury sued in Wisconsin. Cadbury, Rieder, and Rapee filed special appearances challenging Texas personal jurisdiction.
- The trial court denied the special appearance as to CQuentia’s and Meeker’s claims (finding the forum clause covered those claims) but granted it as to Woods’s claims. The court of appeals reversed in part, treating the two documents as a single instrument and allowing nonsignatories to invoke/enforce the forum clause.
- The Texas Supreme Court reversed the court of appeals, holding the agreements are separate and that the transaction‑participant enforcement theory did not apply on these facts; the case was remanded for consideration of other jurisdictional arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Cadbury Agreement and the Series Agreement are a single, unified instrument | Woods/Meeker/CQuentia: the documents and surrounding conduct show a unitary transaction and should be construed together | Cadbury/Rieder/Rapee: the agreements have different parties, purposes, merger clauses, and governing law and must be read separately | Held: Not a single instrument; contracts are separate and must be construed separately |
| Whether nonsignatories (Woods, Meeker) can enforce the Series Agreement forum‑selection clause against nonsignatories (Rieder, Rapee) and signatory Cadbury under the transaction‑participant theory | Plaintiffs: foreseeability and parties’ conduct make enforcement by nonsignatories appropriate | Defendants: theory limited to nonsignatory defendants enforcing against signatory plaintiffs (defensive use); members didn’t assent individually | Held: Transaction‑participant enforcement inapplicable here for lack of foreseeability; nonsignatories cannot enforce the clause against these parties |
| Whether Woods can invoke the Series Agreement forum clause against Rieder/Rapee via the Cadbury Agreement’s board‑exculpation clause | Woods: Cadbury Agreement’s board‑exculpation and surrounding facts bring member disputes within the forum clause if documents are read together | Defendants: Cadbury Agreement is separate and does not incorporate the Series Agreement forum clause | Held: Woods cannot rely on the board‑exculpation clause to invoke the Series Agreement forum clause because the agreements are separate |
| Whether other jurisdictional theories remain to be decided | Plaintiffs: alternative bases (equitable estoppel, waiver, traditional personal‑jurisdiction analysis) support jurisdiction | Defendants: preserved challenges to jurisdiction | Held: Supreme Court remanded for the court of appeals to consider unaddressed alternative jurisdictional arguments |
Key Cases Cited
- Pinto Tech. Ventures, L.P. v. Sheldon, 526 S.W.3d 428 (Tex. 2017) (discusses transaction‑participant enforcement and foreseeability for nonsignatories enforcing forum clauses)
- In re Laibe Corp., 307 S.W.3d 314 (Tex. 2010) (permitting related instruments to be read together and enforcing forum clauses where documents and parties aligned)
- Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831 (Tex. 2000) (multiple instruments in the same transaction may be construed together in appropriate cases)
- In re Rubiola, 334 S.W.3d 220 (Tex. 2011) (parties may grant non‑signatories rights to enforce arbitration/forum provisions by contract language)
- Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005) (forum‑selection clauses constitute consent to jurisdiction)