Central Petroleum Limited v. Geoscience Resource Recovery, LLC
543 S.W.3d 901
Tex. App.2018Background
- Central Petroleum Limited (Australian) contracted with GRR (Nevada entity with Houston operations) to find farmout partners for Australian acreage; initial 2011 agreement governed by Western Australia and arbitration in Perth.
- After the first agreement expired, Central’s exploration manager Trevor Shortt (sent to NAPE in Houston) and GRR’s Niraj Pande allegedly negotiated a 2012 “Second Agreement” in Houston that (according to GRR) called for Central to pay GRR success fees, designated Texas law, and consented to suit in Texas/California.
- Shortt retained the signed Second Agreement according to GRR; GRR introduced Central to Total in Texas the next day and claims Central later stopped GRR’s work and did not pay agreed fees.
- GRR sued in Texas for breach of contract, quantum meruit, and fraudulent misrepresentation; Central filed a special appearance arguing lack of personal jurisdiction.
- The trial court denied the special appearance; on appeal the Fourteenth Court of Appeals affirmed, finding sufficient contacts for specific jurisdiction based on Shortt’s apparent authority, the contract’s Texas forum-selection and choice-of-law clauses, and a substantial connection between Texas contacts and GRR’s tort claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas has specific jurisdiction over contract claims based on the Second Agreement | GRR: Shortt negotiated/signed the Second Agreement in Texas; contract contains Texas forum-selection and choice-of-law clauses — Central consented to Texas jurisdiction | Central: Contract unsigned/lost, possibly fabricated; Shortt lacked authority; Central didn’t purposefully avail itself of Texas | Held: Sufficient evidence supports trial court’s implied finding Shortt executed the agreement with apparent authority; forum-selection clause establishes specific jurisdiction. |
| Authenticity & completeness of the Second Agreement | GRR: Testimony and copies prove the signed contract existed and set standards for compensation (industry customary rates) | Central: Original lost/unsigned; statute of frauds and agreement to agree render it unenforceable | Held: Evidence of lost original admissible; contract not unenforceable for lacking specific fee — reasonable/industry rate can be fixed by factfinder. |
| Shortt’s authority to bind Central | GRR: Heugh’s emails vested Shortt with exclusive farmout responsibility; Shortt’s conduct and communications gave apparent authority | Central: Only board can bind company; affidavits deny Shortt’s authority | Held: Principal’s communications (Heugh’s emails, conduct) clothed Shortt with apparent authority; executing such agreement was within scope of his apparent authority. |
| Whether exercising jurisdiction offends fair play and substantial justice | GRR: Forum-selection clause and Texas interests justify Texas adjudication; Texas has interest in torts committed here | Central: Burden on Australian defendant/witnesses, Australian forum-selection in prior contract, enforcement concerns, foreign-relations/interference | Held: Central failed to show hardship so compelling as to defeat forum-selection clause; witnesses/trial burdens not dispositive; Australian enforcement issues do not render Texas jurisdiction unreasonable. |
Key Cases Cited
- Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801 (Tex. 2002) (personal-jurisdiction standard and de novo review of legal questions)
- BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (long-arm statute interpreted to reach constitutional limits)
- M & F Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co., 512 S.W.3d 878 (Tex. 2017) (due-process minimum-contacts framework and purposeful availment)
- Walden v. Fiore, 134 S. Ct. 1115 (U.S. 2014) (contacts analysis focuses on defendant’s relationship to the forum)
- Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005) (forum-selection clauses as consent to jurisdiction; personal jurisdiction is question of law though may require fact resolution)
- Moncrief Oil Int’l, Inc. v. OAO Gazprom, 414 S.W.3d 142 (Tex. 2013) (purposeful availment and claim-by-claim specific jurisdiction analysis)
- Goodyear Dunlop Tires Operations, SA v. Brown, 564 U.S. 915 (U.S. 2011) (general jurisdiction standards)
- Spir Star AG v. Kimich, 310 S.W.3d 868 (Tex. 2010) (specific jurisdiction when liability arises from forum activity)
- Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007) (substantial connection requirement for specific jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (forum-selection clauses and reasonableness factors for due process)
- In re AIU Ins. Co., 148 S.W.3d 109 (Tex. 2004) (burden to avoid contractual forum-selection clause is high)