In Re Cornerstone Healthcare Holding Group, Inc.
348 S.W.3d 538
| Tex. App. | 2011Background
- Mariner sold a hospital chain to Holdco LLC for $161 million via an Asset Purchase Agreement (APA); Cornerstone later acquired Holdco’s rights and assumed the APA rights, including the Note.
- Holdco issued a $10 million promissory note to Mariner, secured by the same transaction; the Note is tied to the APA.
- In 2007, Highland obtained >$55 million of Cornerstone’s debt and the hospitals’ ownership was transferred to Highland under a Restructuring Agreement; Mariner was not a party to that restructuring.
- In 2010, Mariner sued Highland, Cornerstone, and Holdco for fraudulent transfer seeking to void the restructuring or obtain payment on the Note.
- Cornerstone and Highland moved to dismiss under forum-selection clauses directing disputes to New York County, New York; the trial court denied the motion.
- Relators seek mandamus relief asserting the trial court abused its discretion by not enforcing the forum-selection clause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which forum-selection clause controls? | Mariner argues the Note’s clause governs as narrower; the APA’s clause controls if applicable. | Relators contend the APA clause is implicated and harmonized with the Note; both point to New York forum. | Mariner's claims fall under the Note, and the combined clauses require New York forum. |
| Who can enforce the forum-selection clause? | Mariner argues only signatories can enforce; relators lack standing to enforce the clause. | Relators contend they can enforce as assignee or via equitable estoppel. | Highland may enforce via equitable estoppel; Cornerstone’s right to enforce as assignee remains unresolved on record. |
| Is equitable estoppel available to enforce the forum clause against Mariner? | Mariner alleges interdependent misconduct among Holdco, Cornerstone, and Highland to trigger estoppel. | Relators rely on Meyer/Deep Water Slender Wells theories; Mariner seeks to compel arbitration/relocation. | Equitable estoppel applies to enforce the forum-selection clause against Mariner, enabling enforcement by Highland. |
| Does the APA consent-to-jurisdiction clause apply to Mariner’s suit? | Majority treats the APA clause as broad enough to apply to Mariner’s fraud claims. | Mariner argues Wilmer Cutler and related authorities limit broad consent-to-jurisdiction to the specific contract. | The trial court’s failure to enforce the clause is corrected by mandamus; clause applies to the dispute. |
Key Cases Cited
- In re Prudential Ins. Co., 148 S.W.3d 124 (Tex.2004) (orig. proceeding; forum-selection clauses generally enforceable)
- In re Laibe Corp., 307 S.W.3d 314 (Tex.2010) (forum-selection clauses presumptively valid; proper interpretation binds forum)
- In re AIU Ins. Co., 148 S.W.3d 109 (Tex.2004) (orig. proceeding; adequate remedy when trial court refuses to enforce clause)
- Meyer v. WMCO-GP, L.L.C., 211 S.W.3d 302 (Tex.2006) (equitable estoppel bases for nonsignatories to compel compliance; two scenarios)
- In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex.2005) (direct-benefit estoppel; estopped nonsignatories from seeking contract benefits while avoiding burdens)
- Wilmer Cutler Pickering Hale & Dorr LLP, no official reporter; mem. opin. (Tex. App. Dallas 2008) (distinguished; not addressing due to WL citation in the cited discussion)
- RSR Corp. v. Siegmund, 309 S.W.3d 686 (Tex. App.-Dallas 2010) (distinguishes consent-to-jurisdiction vs. forum-selection scope; applies to mixed documents)
- In re Merrill Lynch Trust Co., FSB, 235 S.W.3d 185 (Tex.2007) (equitable estoppel limits involving concerted misconduct; arbitration context)
- Jim Walter Homes, Inc. v. Schuenemann, 668 S.W.2d 324 (Tex.1984) (principles of construing integrated transactions)
