Chandler Management Corporation v. First Specialty Insurance Corporation
452 S.W.3d 887
| Tex. App. | 2014Background
- Chandler manages Texas apartment complexes; policy issued by First Specialty with New York governing law and exclusive NY forum.
- Windstorm damages Dallas properties; First Specialty denied claim after Vericlaim and Keen adjusted it.
- Chandler filed suit in Texas asserting breach of contract, bad-faith, and DTPA/insurance-code violations.
- First Specialty sought dismissal without prejudice to refile in New York under the policy forum-selection clause, with Vericlaim and Keen joining.
- Trial court dismissed the case without prejudice to refile in New York; Chandler appealed on multiple grounds.
- Court affirmed the trial court’s judgment and enforced the forum-selection clause against the claims tied to First Specialty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of forum-selection clause against Vericlaim and Keen | Chandler argues Vericlaim and Keen weren’t proper movants; clause doesn’t apply to them | First Specialty argues Vericlaim and Keen joined the motion; equitable estoppel allows enforcement | Yes; equitable estoppel supports enforcing clause against Vericlaim and Keen |
| Unauthorized issuance of insurance prevents clause enforcement | First Specialty cannot enforce due to unauthorized status | Surplus lines insurer can enforce if procured via licensed agent and eligible insurer | No; First Specialty may enforce as eligible surplus lines insurer |
| Public policy/overreaching and day-in-court concerns | Clause results from overreaching and deprives Chandler of day in court; violates Texas policy | Enforcing clause is contractual and not oppressive; not public policy violation | Clause enforceable; no overreaching or public policy bar |
| Discovery and due process in dismissal proceeding | Denying discovery violated due process; right to respond curtailed | Record shows no objection or denial of discovery; response filed late | No due-process violation; discovery issue resolved in favor of dismissal |
Key Cases Cited
- In re Cornerstone Healthcare Holding Group, Inc., 348 S.W.3d 538 (Tex. App.—Dallas 2011) (nonparties can enforce forum-selection under equitable estoppel when interdependent misconduct exists)
- In re AIU Ins. Co., 148 S.W.3d 109 (Tex. 2004) (forum-selection enforcement exceptions for public policy/unequal bargaining power)
- Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972) (public policy considerations constrain forum-selection enforcement)
- Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238 (Tex. 1985) (principles governing abuse of discretion in enforcing forum selections)
- RSR Corp. v. Siegmund, 309 S.W.3d 686 (Tex. App.—Dallas 2010) (de novo review for contract interpretation in forum-selection context)