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Wilder v. Titan Chemical Corp.

United States District Court, Fifth Circuit

November 27, 2013

TITAN CHEMICAL CORP. BHD, et al, Defendants.


KENNETH M. HOYT, District Judge.


Before the Court is the defendants', Lotte Chemical Titan Holding Sendirian Berhad f/k/a Titan Chemicals Corp., Sendirian Berhad ("Titan Chemicals") and Lottle Chemical Titan (M) Sendirian Berhad f/k/a Titan Petchem ("Titan Petchem") joint motion to dismiss the plaintiff's suit, pursuant to Federal Rules of Civil Procedure, Rule 12(b)(3) for improper venue and based on forum non conveniens [Dkt. No. 8]. The plaintiff, Warren Wilder, responded [Dkt. No. 19], to the motion and the defendants have replied [Dkt. No. 23]. Having considered the parties' documents, the Court determines that the defendants' motion to dismiss should be denied.


The plaintiff brings this breach of contract suit against the defendants based on his claim that the defendants failed to pay him all of the compensation due him under an Employment Agreement. He asserts that on or about July 10, 2008, after a series of meeting in Houston, Texas with officials of the defendants, he entered into an Employment Agreement with Titan Petchem to serve as Managing Director of Titan Chemicals. According to the terms of the Agreement, the plaintiff was responsible for the day-to-day operations of Titan Chemicals, its business development, and for its successful and profitable operations. The plaintiff, in exchange, was to receive a specific salary and, as well, "a performance-based annual short-term bonus payment."

In 2010, Honam Petrochemical Corp., a Chinese company, acquired controlling ownership of both, Titan Chemicals and Titan Petchem. Anticipating this change, the defendants modified the plaintiff's Employment Agreement. Later, a discussion between James Chao, the new Executive Chairman of Titan Chemicals, and the plaintiff, concerning whether the plaintiff would stay on and serve as co-managing director of Titan Chemicals with Lee Hunki. The plaintiff declined the offer and notified Titan Petchem that he would exercise the exit options under the Employment Agreement effective November 9, 2010. A severance pay discussion occurred between the plaintiff and Chao resulting in an agreement entitled "Final Compensation as of 9 November 2010." This compensation agreement was prepared in Malaysia and provided for severance pay in the amount of $496, 921. The plaintiff agreed, executed the document and received the funds, minus $74, 000 in estimated income taxes on his pay. This withholding was anticipated and pursuant to the equalization provision of the plaintiff's Employment Agreement.

The plaintiff's separation from employment did not end his relationship with the defendants. He entered into a separate Consulting Agreement with the defendants. Under the terms of the Consulting Agreement, the plaintiff would receive $60, 000 for his services through December 31, 2010, and an additional $30, 000, within the discretion of the defendants, in the event the plaintiff's services were determined to be "satisfactory." The plaintiff was paid the $60, 000 due, but was not paid the additional $30, 000.

In late 2011 and in 2012, the plaintiff was notified that a tax equalization payment was due in the amount of $179, 220. According to the defendants, the plaintiff has failed and refused to pay the taxes due. In the interim, and before returning to the United States, the plaintiff worked for another company in Mumbai, India. During this period, the plaintiff did not respond to the defendant's correspondences. However, after returning to the United States, the plaintiff responded by filing this suit.


The defendants contend that the plaintiff's suit should be dismissed because the forum chosen by the plaintiff is an improper one. In this regard, the defendants assert that: (a) Titan Chemicals, not a party to the Employment Agreement although sued by the plaintiff; (b) Titan Chemicals is entitled to enforce the forum selection clause contained in the Employment Agreement; (c) even through a non-signatory to the Agreement, Titan Chemicals, as the sole shareholder of Titan Petchem, is so closely related to Titan Petchem that it is entitled to enforce the forum selection clause in the Equal Employment Agreement; and (d) there is no indication that Titan Chemicals committed an act or omission independently of the alleged acts and omissions of Titan Petchem. Therefore, the defendants contend, the plaintiff's suit should be dismissed based on the exclusive jurisdiction forum clause that selects Malaysian courts as the forum for disputes arising under the Employment Agreement. Alternatively, the defendants seek dismissal under the doctrine of forum non conveniens.

The plaintiff does not dispute that the Employment Contract is between Titan Petchem and himself and that Titan Chemicals is not a signatory to the Agreement. He does, however, dispute the defendants' interpretation of the forum selection clause. He argues that the plain language of the forum selection clause, when read "as a whole", should be construed to mean that the parties may submit their claims to any court of competent jurisdiction so long as Malaysian law is applied. In addition to his plain language argument, the plaintiff asserts that the "bargained-for language" concerning forum selection "trumps" any claim by the defendants that the common law doctrine of forum non conveniens should apply.


A. Federal Rule of Civil Procedure 12(b)(3)

"Federal Rule of Civil Procedure 12(b)(3) permits a defendant to [timely] move to dismiss an action on the basis of improper venue." Laserdynamics Inc. v. Acer Am. Corp., 209 F.R.D. 388, 390 (S.D.Tex.2002) (internal citations omitted); De Joseph v. Odfjell Tankers (USA), Inc., 196 F.Supp.2d 476, 479 (S.D.Tex.2002) (internal citations omitted). The majority of courts conform to the standard that once a defendant has raised the improper venue issue by motion, the burden of sustaining venue rests with the plaintiff. McCaskey v. Cont'l Airlines, Inc., 133 F.Supp.2d 514, 523 (S.D.Tex.2001) (internal citations omitted); Bigham v. Envirocare of Utah, Inc., 123 F.Supp.2d 1046, 1048 (S.D.Tex.2000) (internal citations omitted). In the absence of an evidentiary hearing on the matter, courts will allow a plaintiff to carry this burden by establishing facts, taken as true, that establish venue. McCaskey, 133 F.Supp.2d at 523 (internal citations omitted); Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.1994) (internal citation omitted). The Court will "accept uncontroverted facts contained in the plaintiff's complaint as true, and resolve any conflicts in the parties' ...

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