In Re City Wide Franchise Company, Inc. v. the State of Texas

In The

Court of Appeals

Ninth District of Texas at Beaumont

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NO. 09-25-00245-CV
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IN RE CITY WIDE FRANCHISE COMPANY, INC.

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Original Proceeding
58th District Court of Jefferson County, Texas
Trial Cause No. 23DCCV0816
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MEMORANDUM OPINION

Relator, City Wide Franchise Company, Inc., (“City Wide”) petitioned for a

writ of mandamus to compel the trial court presiding in a premises liability case to

enforce a forum-selection clause in a janitorial service agreement between City Wide

and CBRE, Inc., (“CBRE”) by dismissing claims brought against City Wide by

CBRE and non-signatory premises owners Philpott Motors, LLC (“Philpott”) and

Sonic Automotive, Inc., (“Sonic”). We temporarily stayed proceedings in the trial

court and obtained responses from the Real Parties in Interest. We lift our temporary

order and deny the petition for a writ of mandamus.

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Background

Brenda Vega (“Vega”) allegedly sustained personal injuries when she slipped

while performing janitorial services at Philpott. Vega brought premises liability and

negligence claims against Philpott, Sonic, and CBRE. CBRE filed a third-party

claim against City Wide for breach of contract, indemnification, defense, negligence,

and contribution. Philpott and Sonic cross-claimed against City Wide for

contribution, defense, and indemnity. City Wide filed a motion to dismiss on the

ground that a Service Agreement of Janitorial and Landscaping between City Wide

and CBRE contained a forum-selection clause in which the parties agreed that the

applicable state and federal courts in North Carolina shall have exclusive jurisdiction

to hear and determine any claims or disputes between the Parties arising out of or

related to the Service Agreement. A separate agreement, the Facilities Management

Services Agreement between Sonic and CBRE did not contain a forum-selection

clause.

The trial court: (1) dismissed CBRE’s breach of contract claim against City

Wide without prejudice to refiling in North Carolina; (2) denied City Wide’s motion

to dismiss CBRE’s negligence and contribution claims against City Wide and

ordered that CBRE’s negligence and contribution claims shall remain in the suit;

and (3) denied City Wide’s motion to dismiss Sonic’s and Philpott’s claims against

City Wide and ordered that Sonic’s and Philpott’s claims shall remain in the suit. In

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its mandamus petition, City Wide seeks relief from the parts of the order where the

trial court denied City Wide’s motion to dismiss.1

Mandamus Standard

We may issue a writ of mandamus to remedy a clear abuse of discretion by

the trial court when the relator lacks an adequate remedy by appeal. See In re

Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding);

Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992) (orig. proceeding). “A trial

court clearly abuses its discretion if it reaches a decision so arbitrary and

unreasonable as to amount to a clear and prejudicial error of law.” Walker, 827

S.W.2d at 839 (internal quotations omitted). A trial court also abuses its discretion

if it fails to correctly analyze or apply the law, because a trial court has no discretion

in determining what the law is or in applying the law to the facts. See In re Prudential

Ins. Co. of Am., 148 S.W.3d at 135; Walker, 827 S.W.2d at 840. “A trial court abuses

its discretion when it fails to properly interpret or apply a forum-selection clause.”

In re Lisa Laser USA, Inc., 310 S.W.3d 880, 883 (Tex. 2010) (orig. proceeding).

We determine the adequacy of an appellate remedy by balancing the benefits

of mandamus review against the detriments, considering whether extending

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Sonic and Philpott contend North Carolina courts construe contracts as a
whole and an analysis of North Carolina law leads to the same result as an analysis
under Texas law. City Wide does not argue that North Carolina law differs from
Texas law.
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mandamus relief will preserve important substantive and procedural rights from

impairment or loss. In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex. 2008) (orig.

proceeding). “[M]andamus relief is available to enforce an unambiguous forum-

selection clause in a contract.” In re Lisa Laser USA, Inc., 310 S.W.3d at 883.

Forum Selection

“In examining whether claims brought by the plaintiff were within the scope

of the clauses, . . . a reviewing court should engage in a ‘common-sense examination

of the claims and the forum-selection clause to determine if the clause covers the

claims.’” Id. at 884 (quoting In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 677

(Tex. 2009) (orig. proceeding)). “[W]hether a forum-selection clause applies

depends on the factual allegations undergirding the party’s claims rather than the

legal causes of action asserted.” Pinto Tech. Ventures, L.P. v. Sheldon, 526 S.W.3d

428, 433 (Tex. 2017). “When construing a contract, the court’s primary concern is

to give effect to the written expression of the parties’ intent.” Sundown Energy LP

v. HJSA No. 3, Ltd. P’ship, 622 S.W.3d 884, 888 (Tex. 2021).

The Service Agreement’s forum-selection clause provides as follows:

4. Governing Law and Jurisdiction. This Agreement shall be
construed and governed in accordance with the laws of the State of
North Carolina without regard to conflict of laws principles. The United
Nations Convention on Contracts for the International Sale of Goods
(CISG) does not apply to this Agreement. In the event the Parties are
unable to mediate their dispute to a satisfactory resolution, the Parties
agree that the applicable state and federal courts located in the State of
North Carolina shall have exclusive jurisdiction to hear and determine
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any claims or disputes between the Parties arising out of or related to
this Agreement. The Parties expressly submit and consent in advance
to such jurisdiction in any action or suit commenced in such court, and
each Party hereby waives any objection that it may have based upon
lack of personal jurisdiction, improper venue or forum non conveniens.

According to the Service Agreement, the “Parties” to the agreement are CBRE

and City Wide. City Wide is designated as “Service Provider.” Sonic and its

affiliates, which include Philpott, are referred to as the “Client” but are not included

in the definition of “Parties.”

City Wide argues that Sonic and Philpott are bound by the forum-selection

clause because they are nonsignatory “transaction participants” whose alleged

conduct is so closely related to the contractual relationship that the forum-selection

clause applies. See Deep Water Slender Wells, Ltd. v. Shell Int’l Expl. & Prod., Inc.,

234 S.W.3d 679, 693 (Tex. App.—Houston [14th Dist.] 2007, pet. denied). Deep

Water Slender Wells did not adopt a “transaction participant” analysis. Id. (“Neither

the Supreme Court of Texas nor this court have addressed whether it is proper to use

the transaction-participant analysis as a theory for allowing a nonsignatory to

enforce a forum-selection clause. However, we need not address this issue today

because the trial court’s ruling is sustainable based on equitable estoppel.”). The

appellate court held the Shell Parties could enforce the forum-selection clause based

on principles of equitable estoppel. Id. at 693-94. “Because forum-selection clauses

are creatures of contract, circumstances in which nonsignatories can be bound to a

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forum-selection clause are rare.” Pinto Tech. Ventures, L.P., 526 S.W.3d at 443.

Courts recognizing the validity a transaction-participant theory for enforcing a

forum-selection clause have done so “‘solely in the context of a nonsignatory

defendant attempting to enforce a forum-selection clause against a signatory

plaintiff, who did not want the clause enforced,’ and not the converse.” Id. at 445.

In Pinto Technology, the Supreme Court did not decide whether a transaction

participant could enforce a forum-selection clause because the agreement at issue in

that case precluded its application. Id. The question of who is actually bound to

dispute resolution in a particular forum is ultimately a function of the intent of the

parties as expressed in the terms of the agreement. Id. As was the case in Pinto

Technology, the Service Agreement bound the Parties—CBRE and City Wide—to

the forum-selection clause, not Sonic and Philpott, who were the Clients.

City Wide argues Sonic and Philpott are bound by the forum-selection clause

under estoppel and third-party-beneficiary theories because they are asserting claims

of indemnity and defense that flow directly from City Wide’s contractual obligations

under the Service Agreement. Sonic and Philpott are indeed third-party beneficiaries

to the Service Agreement, but under the terms of that agreement they are not bound

to the forum-selection clause that applies only to the Parties to the Service

Agreement. We conclude the trial court did not abuse its discretion by denying City

Wide’s motion to dismiss Sonic’s and Philpott’s claims.

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Extra-contractual Claims

City Wide argues the Service Agreement governs all CBRE’s claims against

City Wide because the Service Agreement is for janitorial services to be conducted

at the Philpott dealership where, but for the Service Agreement, Vega would not

have been performing janitorial services and would not have been injured. City Wide

contends the original claims brought by Vega against CBRE relate to the Service

Agreement because were it not for the Service Agreement, neither CBRE nor City

Wide would be involved in this suit.

We disagree that a party establishes that a claim arises out of a contract merely

by establishing that the party would not have been sued but for the existence of the

contract. Rather, a claim arises out of a contract if, “but for” the agreement, the

plaintiff would not be aggrieved, and if the operative facts that would be implicated

in a parallel breach-of-contract claim are the same as the operative facts in the

dispute. Id. at 440. In Pinto Technology, the court found a but-for relationship

between the minority shareholders’ disputes with the majority shareholders and the

amended shareholders agreement that included a forum-selection clause, in that the

agreement eliminated preemptive rights that previously existed and, but for the

agreement, no dispute about the loss of presumptive rights and designations would

exist. See id. at 438-39. Moreover, the tort claims asserted in the lawsuit depended

on the existence of the amended shareholders agreement, resolution of the case

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involved the validity of that agreement, and the operative facts implicated the

majority shareholders’ authority to act pursuant to that agreement. Id. at 441.

CBRE’s factual allegations for its contribution claim are based on City Wide’s

alleged breach of the duty of ordinary care that it owed to Vega, not to CBRE.

CBRE’s right to contribution from City Wide, if any, arises not from the contract

but by operation of section 33.016 of the Civil Practice and Remedies Code. See

Tex. Civ. Prac. & Rem. Code Ann. § 33.016(b) (“Each liable defendant is entitled

to contribution from each person who is not a settling person and who is liable to the

claimant for a percentage of responsibility but from whom the claimant seeks no

relief at the time of submission. A party may assert this contribution right against

any such person as a contribution defendant in the claimant’s action.”). The

resolution of CBRE’s contribution claim does not arguably depend on the

construction of the Service Agreement.

Conclusion

On the record before us, City Wide has not established that the trial court

abused its discretion in denying City Wide’s motion to dismiss as to CBRE’s

negligence and contribution claims against City Wide, nor in denying City Wide’s

motion to dismiss Sonic’s and Philpott’s claims against City Wide. Accordingly, we

deny the petition for a writ of mandamus.

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PETITION DENIED.

PER CURIAM

Submitted on September 22, 2025
Opinion Delivered March 5, 2026

Before Johnson, Wright and Chambers, JJ.

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