William Krueger v. Pulse Evolution Corporation
05-16-00922-CV
| Tex. App. | Jul 21, 2017Background
- Krueger was hired as CFO of a Pulse subsidiary in May 2014 and signed an employment agreement later assumed by Pulse Evolution Corp.; Pulse is a Nevada corporation headquartered in Florida.
- Paragraph 25 of the employment agreement contains (1) an arbitration clause requiring arbitration in Palm Beach County, Florida of “any dispute under this Agreement,” and (2) a forum-selection clause providing exclusive jurisdiction in Port St. Lucie County, Florida "in the event that arbitration cannot be compelled or in order to enforce arbitration."
- About eight months after signing, Pulse terminated Krueger but continued to list him as Pulse’s CFO on its website; Krueger sued in Dallas County alleging misappropriation of his name and related noncontractual claims.
- Pulse moved to dismiss based on the employment agreement’s forum-selection clause (and arbitration clause); the trial court granted the motion and dismissed Krueger’s suit without prejudice.
- The court of appeals reviewed contract interpretation de novo and an abuse-of-discretion standard for dismissal orders.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the forum-selection clause applies to Krueger's noncontractual claims | Krueger: clause is narrow and applies only to "disputes under [the] Agreement," so his statutory and common-law claims fall outside | Pulse: omission of "under this Agreement" from forum clause shows it applies broader than arbitration clause and covers disputes not subject to arbitration enforcement | Held: Forum clause not limited to "under this Agreement"; it applies to disputes where arbitration cannot be compelled (i.e., broader than only contract claims) — dismissal affirmed |
| Whether arbitration clause applies to Krueger's claims | Krueger: claims are noncontractual and thus not subject to arbitration under the agreement | Pulse: arbitration clause covers disputes "under this Agreement" and forum clause covers enforcement issues; arbitration (or enforcement venue) governs resolution | Held: Court resolved only scope of forum-selection clause against Krueger and did not reach Krueger's separate arbitration argument because forum clause applied to require dismissal |
Key Cases Cited
- In re Laibe Corp., 307 S.W.3d 314 (Tex. 2010) (forum-selection clauses presumptively valid)
- In re Int’l Profit Assocs., Inc., 274 S.W.3d 672 (Tex. 2009) (courts must examine claims in common-sense manner to avoid artful pleading to evade forum-selection clauses)
- CNOOC Se. Asia Ltd. v. Paladin Res. (SUNDA) Ltd., 222 S.W.3d 889 (Tex. App.—Dallas 2007) (contract interpretation governs forum-clause scope)
- RSR Corp. v. Siegmund, 309 S.W.3d 686 (Tex. App.—Dallas 2010) (distinguishing claims that arise "under" an agreement from broader categories)
- Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005) (courts will not add words to contracts; parties could have included limiting language)
- Valance Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (contract terms given plain, ordinary meaning)
- Chandler Mgmt. Corp. v. First Specialty Ins. Corp., 452 S.W.3d 887 (Tex. App.—Dallas 2014) (standard for reviewing dismissal orders)
- Ginter ex rel. Ballard v. Belcher, Prendergast & Laporte, 536 F.3d 439 (5th Cir. 2008) (cited regarding avoiding slavish contract/tort distinctions)