In Re Mattr Us Inc Shawcor Inc Flexpipe Systems Us Llc And Shawcor

Key Facts

Transaction Type

Issues

• The court considered whether the trial court abused its discretion by failing to enforce a forum-selection clause in order acknowledgments (OAs) that required disputes to be heard in Alberta, Canada. Flexpipe argued that SM Energy's failure to sign the OAs did not negate the clause, but the court found that the OAs explicitly required a signature for acceptance of terms, and no such signature was obtained. The court concluded that without a signed agreement, the forum-selection clause could not be enforced.
• The second issue was whether the trial court's denial of Flexpipe's motion to compel discovery regarding the forum dispute was an abuse of discretion. Flexpipe sought documents like AFEs and invoices to show SM Energy's acceptance of the OAs' terms, but SM Energy argued these documents were irrelevant. The court held that without an enforceable forum clause, the requested discovery wouldn't aid the dispute's resolution and thus the trial court's denial was not an abuse of discretion.

Holdings

• The court also determined that the trial court did not clearly abuse its discretion in denying Flexpipe's motion to compel discovery, as there was no reasonable expectation that the requested AFEs and internal documents would aid in resolving the dispute, given their irrelevance to the forum-selection clause enforcement.
• The court held that the trial court did not clearly abuse its discretion in denying Flexpipe's motion to dismiss based on the forum-selection clause, as SM Energy did not sign the order acknowledgments (OAs) requiring signature for acceptance, and Flexpipe failed to establish a valid agreement to an exclusive forum in Alberta, Canada.

Remedies

• The temporary stay previously issued in this proceeding was dissolved by the court following its denial of the mandamus petition.
• The court denied Flexpipe's petition for writ of mandamus, concluding the trial court did not abuse its discretion in denying the motion to dismiss based on the forum-selection clause or the motion to compel discovery.

Legal Principles

• The court considered equitable estoppel as a potential basis to enforce the forum-selection clause but held that it does not apply when no valid agreement exists. SM Energy's failure to sign the OAs precluded equitable estoppel from binding it to the clause, even if it benefited from other terms like the returns/credits provision.
• The court emphasized that contracts require mutual assent to be enforceable, and the OAs explicitly required SM Energy's signature to accept terms. Since SM Energy never signed the OAs, the terms and conditions, including the forum-selection clause, were not validly accepted under Texas contract law.
• The court applied the doctrine of forum non conveniens to evaluate whether the trial court should dismiss the case in favor of a foreign forum (Alberta, Canada). It concluded that the trial court did not abuse its discretion by denying the motion to dismiss because Flexpipe failed to establish a valid forum-selection clause agreement due to SM Energy's lack of signature on the order acknowledgments (OAs).

Precedent Name

• CNOOC Se. Asia Ltd. v. Paladin Res. (SUNDA) Ltd.
• In re Bloom Bus. Jets, LLC
• In re K & L Auto Crushers, LLC
• Hi Tech Luxury Imports, LLC v. Morgan
• In re Lyon Fin. Servs., Inc.
• In re Weekley Homes, L.P.
• In re Laibe Corp.
• HMT Tank Serv. LLC v. Am. Tank & Vessel, Inc.
• In re Invincible Boat Co. LLC
• Aggreko, LLC v. Bronxcare Health Sys.
• In re CSX Corp.
• In re Cornerstone Healthcare Holding Group, Inc.

Key Disputed Contract Clauses

• The forum-selection clause in the order acknowledgments (OAs) required disputes to be resolved in the courts of the Province of Alberta, Canada. Flexpipe argued this clause mandated dismissal of SM Energy's suit in Texas, but the court held that SM Energy never signed the OAs, making the clause unenforceable under Texas contract law.
• The returns/credits provision in the OAs allowed returns within 90 days with specific fees and conditions. Flexpipe asserted SM Energy benefitted from this provision, attempting to invoke equitable estoppel to bind SM Energy to the forum-selection clause. The court rejected this argument, noting the provision was not part of an enforceable agreement due to lack of signed OAs.

Cited Statute

• Texas Rules of Civil Procedure
• Texas Rules of Evidence
• Texas Rules of Appellate Procedure

Judge Name

• Trotter
• Bailey
• W. Bruce Williams

Passage Text

• The trial court was entitled to conclude that there was no 'reasonable expectation' that further discovery of the AFEs and internal planning documents sought by Flexpipe would provide admissible evidence that would 'aid in the dispute's resolution.'
• Contracts require mutual assent to be enforceable. Texas law recognizes that a contract need not be signed to be 'executed' unless the parties explicitly require signatures as a condition of mutual assent.
• Flexpipe presented no evidence that it obtained a signed acceptance of the OAs' terms and conditions by an authorized agent of SM Energy. This is true despite SM Energy having placed approximately 156 orders with Flexpipe over ten years, each order being accompanied by an OA.