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In re Energy Services Acquisitions II, Inc.

Court of Appeals of Texas, Seventh District, Amarillo

September 11, 2017

IN RE ENERGY SERVICES ACQUISITIONS II, INC. AND TIMOTHY H. NESLER, RELATORS

         Original Proceeding

          Before CAMPBELL and PIRTLE and PARKER, JJ.

          MEMORANDUM OPINION

          James T. Campbell, Justice

         Relators ESA Acquisitions II, Inc. and Timothy H. Nesler (collectively "ESA") filed a petition for a writ of mandamus addressed to the Honorable Phil N. Vanderpool, Judge of the 223rd District Court of Gray County. The writ ESA seeks would direct Judge Vanderpool to vacate a March 23, 2017 order denying ESA's motion to transfer venue of a suit pending in that court. ESA relies on a contractual venue clause and section 15.020 of the Texas Civil Practice and Remedies Code.[1] Finding the record does not demonstrate Judge Vanderpool clearly abused his discretion, we will deny ESA's petition.

         Background

         Real parties in interest are Jerry E. Carlson and Sherry A. Carlson, husband and wife who reside in Gray County. The Carlsons owned Dimension Pipeline, LLC, and in 2012 were contacted by Nesler on behalf of ESA regarding the possible sale of the company. The negotiations ripened into an agreement, entitled "membership interest purchase agreement, " for the sale of the company to ESA for $5 million. A preliminary form of the document specified a $5 million cash sales price. It contained a forum selection clause fixing Texas as the jurisdiction to adjudicate disputes. Venue was not mentioned.

         According to Jerry Carlson's affidavit, shortly before the sale was to close ESA told him "there was an issue with [its] funding availability." The Carlsons agreed to a bridge financing arrangement by which ESA delivered at closing its $5 million promissory note due ninety days from December 31, 2012. Related changes were incorporated into the final document. Under its terms, during the bridge financing period the Carlsons remained as managers of the company. The final document retained the earlier version's Texas forum selection clause and remained silent as to venue.

         ESA's promissory note was attached as an exhibit to the final agreement and incorporated by reference.[2] Paragraph 3.5 of the note provided:

3.5 Applicable Law and Venue. The Note shall be interpreted, construed and governed by and in accordance with the Laws of the State of Texas. The Parties hereto, for themselves and their successors, assigns and any Holder in due course, hereby consent to the exclusive jurisdiction of the state and federal courts located in Harris County, Texas with respect to any controversy relating to the Note.

         The parties executed the final agreement on December 28, 2012, effective December 31. Nesler signed the note for ESA on December 31. According to the Carlson affidavit, the note was paid "on or before March 31, 2013."[3]

         During the fall of 2016 an attorney representing Nesler and other unidentified ESA shareholders sent two letters to the Carlsons and an email to their attorney. In the communications counsel expressed the belief that the Carlsons had breached the agreement and fraudulently induced ESA into the agreement. The letters suggested reimbursement of the $5 million purchase price, and threatened consideration of "all potential remedies, " including legal action against the Carlsons in a New York court.

         On November 17, 2016, the Carlsons filed a suit for declaratory judgment in Gray County naming as defendants ESA, Nesler and "John Doe" shareholders. The petition alleged Nesler and the John Doe shareholders lacked standing to claim breaches of the agreement. Otherwise, the Carlsons sought a declaration that they did not breach the agreement.

         Relying on the mandatory venue provision of section 15.020(c)(2)[4] and paragraph 3.5 of the note, ESA filed a motion to transfer venue of the case to Harris County. The motion asserted the sale of Dimension was a major transaction and the Carlsons, by signing the agreement with the note attached, agreed in writing to the note's ...


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