Preview
1/10/2019 4:33 PM
Marilyn Burgess - District Clerk Harris County
Envelope No. 30290691
By: Kenya Kossie
Filed: 1/10/2019 4:33 PM
CAUSE NO. 2018-69544
LUCAS CONSTRUCTION GROUP, INC., § IN THE DISTRICT COURT OF
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Plaintiff, §
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V. § HARRIS COUNTY, TEXAS
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WIRTGEN AMERICA, INC., §
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Defendant. § 125TH JUDICIAL DISTRICT
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DEFENDANT’S MOTION TO DISMISS FOR FORUM NON CONVENIENS
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TO THE HONORABLE JUDGE KYLE CARTER:
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Defendant Wirtgen America, Inc. (“Wirtgen”), a Tennessee corporation with its principal
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place of business in Tennessee, files this Motion to Dismiss for Forum Non Conveniens. The
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breach of contract claim asserted by Plaintiff Lucas Construction Group, Inc. (“Lucas
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Construction”), a Louisiana corporation with its principal place of business in Louisiana, relates
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to a contract between a Tennessee corporation and a Louisiana corporation for the lease of heavy
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equipment in Louisiana and only in Louisiana: “LESSEE shall keep the equipment within the
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State of LA and shall not remove all or any part of the equipment thereof without written
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permission of LESSOR.” Equipment Lease Agreement, Ex. 1 at § 2. The agreement was
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negotiated in and to be performed in Tennessee and Louisiana, not in Texas. And because Texas
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was not contemplated when negotiating and executing the agreement, Texas law will not apply.
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Moreover, the Parties expressly contemplated litigation in Tennessee. This dispute, with its
appurtenant burdens on the court system, does not belong in Texas. Tennessee is an adequate
forum to protect Lucas Construction’s rights, and it is far more appropriate than Texas.
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FACTUAL BACKGROUND
Wirtgen, a member of the international Wirtgen Group, imports and distributes heavy
construction equipment throughout the United States and Canada through a network of dealers.
Wirtgen’s equipment is most commonly used in the areas of road construction and mining and
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processing of minerals. At issue in this case is the German-manufactured Kleemann Mobirex
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MR 130 Zi EVO 2, a mobile impact crusher that is used, among other things, to crush used
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concrete so that it can be recycled, repurposed, or re-used.
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Wirtgen is a corporation organized and existing under the laws of Tennessee, and its
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principal place of business is located at 6030 Dana Way, Antioch, Tennessee 37013. This
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undisputed fact is even recited by Lucas Construction. See Lucas Construction’s First Amended
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Petition (“Petition”) at ¶ 3. Wirtgen attaches here the Declaration of Robert J. Collins, its chief
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financial officer, as Exhibit 2. As Mr. Collins verifies:
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a. Wirtgen is a Tennessee corporation, organized under the laws of the State of
Tennessee and with its principal place of business in Tennessee. Ex. 2 at ¶ 3.
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b. Wirtgen does not have a place of business, office, facility, or bank account in
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Texas. Ex. 2 at ¶ 4.
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c. Wirtgen does not own or lease real property in Texas. Ex. 2 at ¶ 5.
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d. Wirtgen does not owe or pay real or personal property taxes in Texas. Ex. 2 at ¶
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6.
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Lucas Construction, a corporation organized and existing under the laws of Louisiana, is
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in the concrete crushing business. In May of 2017, Wirtgen and Lucas Construction entered into
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an Equipment Demonstration/Consignment Agreement providing for a three-day demonstration
period for the crusher referenced above beginning on May 15, 2017. The executed Equipment
Demonstration/Consignment Agreement is attached hereto as Exhibit 3 and is referred to
hereafter as the “Demonstration Agreement.” The Demonstration Agreement expressly states
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that “Nashville, Tennessee is the place of making of this Agreement, and any and all disputes
shall be settled or attempted to be settled only in Nashville, Tennessee.” Ex. 3 at § 9(d). Lucas
Construction and Wirtgen also agreed that “[t]he law of the State of Tennessee will apply to this
Agreement.”
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Apparently satisfied with the demonstration of the crusher, Lucas Construction entered
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into an Equipment Lease Agreement with Wirtgen on May 17, 2017. The executed Equipment
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Lease Agreement is attached hereto as Exhibit 1 and is referred to hereafter as the “Lease
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Agreement.” According to the Lease Agreement, Lucas Construction is located in Robert,
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Louisiana. Ex. 1 at 1. Lucas Construction concedes that it is “a corporation organized under the
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laws of the State of Louisiana.” Pet. at ¶ 2. Invoices under the Lease Agreement were sent to
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Lucas Construction in Mandeville, Louisiana, and payment was remitted to Antioch, Tennessee.
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Declaration of Robert J. Collins, Ex. 2 at ¶ 7.
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Significantly, Lucas Construction leased the equipment for use in Louisiana. The Lease
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Agreement specifically states that “LESSEE shall keep the equipment within the State of LA and
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shall not remove all or any part of the equipment thereof without written permission of
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LESSOR.” Ex. 1 at § 2 (emphasis in original). And at the end of the lease term, Lucas
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Construction was to pay for “return [of the leased equipment] to the shop of the Lessor at
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Nashville, Tennessee.” Ex. 1 at § 21.
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When the Lease Agreement was executed, the Parties’ entire relationship was based in
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Tennessee and Louisiana, and the entire performance under the Lease Agreement was to be
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completed in Tennessee and Louisiana. Declaration of Paul McLaren, Ex. 4 at ¶ 4; Ex. 2 at ¶ 7.
The Parties did not contemplate performance in Texas in any way. Ex. 4 at ¶ 4.
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By itsterms, the Lease Agreement provided for a term of six months. Ex. 1 at 1. Six
months came and went, and Lucas Construction retained possession of the equipment and
continued making monthly rental payments. Pet. at ¶ 8. In all, Lucas Construction leased the
equipment for approximately seventeen months. Id.
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At some point during Lucas Construction’s lease of the equipment, Lucas Construction
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entered into a contract with Southern Crushed Concrete. See Affidavit of Michael Flaherty,
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attached as Exhibit A to Lucas Construction’s Original Petition, at ¶ 11. Southern Crushed
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Concrete operates approximately fifteen concrete crushing operations in and around Harris
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County, Texas. Id. In an apparent attempt to satisfy its contractual relations with Southern
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Crushed Concrete, Lucas Construction transported the leased equipment to Texas. See Flaherty
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Affidavit at ¶ 21. While transport to another state was prohibited by the Lease Agreement,
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Wirtgen permitted the relocation requested by Lucas Construction. Ex. 4 at ¶ 5.
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In late September of this year, a dispute arose between Wirtgen and Lucas Construction
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regarding unpaid invoices that resulted in the institution of this litigation. See generally Pet. at
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¶9-10. On October 19, 2018 Wirtgen and Lucas Construction entered into a Rule 11 Agreement
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settling certain claims and permitting Lucas Construction to purchase the equipment pursuant to
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a purchase option attached to the original Lease Agreement. See Ex. 1. The sole remaining issue
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before the Court is the amount of credit Lucas Construction is entitled to by virtue of its pre-
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purchase lease payments. Pet. at ¶¶ 11-12.
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ARGUMENTS AND AUTHORITIES
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The doctrine of forum non conveniens permits a court possessing jurisdiction over a
dispute to decline to exercise it when, “for the convenience of the litigants and witnesses and in
the interest of justice, the action should be instituted in another forum.” In re Pirelli Tire, LLC,
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247 S.W.3d 670, 675 (Tex. 2007) (quoting Exxon Corp. v. Choo, 881 S.W.2d 301, 302 n.2 (Tex.
1994)). The doctrine applies to “prevent the imposition of an inconvenient jurisdiction on a
litigant,” when, even though a court might have personal jurisdiction over a defendant, “the case
itself has no significant connection to the forum.” Benz Grp. v. Barreto, 404 S.W.3d 92, 96
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(Tex. App.—Houston [1st Dist.] 2013, no pet.) (internal citations omitted). This case, which
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arises from Lucas Construction’s lease of equipment from a Tennessee corporation to be used
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exclusively in Louisiana and returned to Tennessee, “has no significant connection” to Texas.
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The forum non conveniens analysis involves a threshold question followed by a balancing
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test.1 “First, the party seeking dismissal must demonstrate that the proposed alternate forum is
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available and adequate.” Barreto, 404 S.W.3d at 96 (citing Quixtar Inc. v. Signature Mgmt.
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Team, LLC, 315 S.W.3d 28, 33 (Tex. 2010)). Once it has been determined that the alternative
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forum is available and adequate, the “well known Gulf Oil factors direct courts to consider both
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public and private interest considerations in forum non conveniens dismissals.” Quixstar, 315
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S.W.3d at 33. The Texas Supreme Court has “embraced the analytical framework the United
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States Supreme Court articulated in Gulf Oil.” In re Pirelli Tire, LLC, 247 S.W.3d at 676 (citing
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Flaiz v. Moore, 359 S.W.2d 872, 874 (Tex. 1962)); see also Barreto, 404 S.W.3d at 96 (“To
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determine whether dismissal is appropriate, a trial court should apply the test that the United
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States Supreme Court established in [Gulf Oil].”). Accordingly, Texas state courts often cite to
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and rely upon federal jurisprudence when interpreting the Gulf Oil factors. See id.; see also
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Quixtar, 315 S.W.3d at 32 (“[W]e regularly consider United States Supreme Court precedent in
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both our common law and statutory forum non conveniens cases.”).
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The common-law doctrine of forum non conveniens applies in this case as opposed to the statutory
adaptation of the doctrine codified at section 71.051 of the Texas Civil Practice and Remedies Code
because the statute only applies to actions for personal injury and wrongful death, not commercial
disputes. See Barreto, 404 S.W.3d at 99.
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Significant here, while a defendant “ordinarily bears a heavy burden in opposing the
plaintiff's chosen forum,” Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 430
(2007), Texas “forum-non-conveniens doctrine generally affords substantially less deference to
a nonresident's forum choice.” Quixtar, 315 S.W.3d at 31 (emphasis added) (internal
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quotations and citations omitted). “[T]hat a plaintiff is not a Texas resident speaks directly to a
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defendant’s burden.” Id. This lower burden applies even if a party is registered to do business in
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Texas. See id. at 32 n.1 (rejecting argument that plaintiff should be considered a Texas resident
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because of its numerous contacts with the state in part because “authority to do business in Texas
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does not govern residency”).
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A. Tennessee is an Appropriate Alternative Forum.
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Tennessee is an appropriate alternative forum because it is both available and adequate
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for the protection of Lucas Construction’s claims. See Barreto, 404 S.W.3d at 96. Tennessee is
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“available” to Lucas Construction because Wirtgen is “amenable to process” there. See In re GE
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Co., 271 S.W.3d 681, 688 (Tex. 2007) (“Ordinarily, an alternate forum is shown if the defendant
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is ‘amenable to process’ in the other jurisdiction.” (citing Piper Aircraft Co. v. Reyno, 454 U.S.
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235, 254 n.22 (1981))). Wirtgen is amenable to process in Tennessee because it is organized and
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existing under the laws of Tennessee and has its principal place of business in Tennessee. Ex. 2
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at ¶ 3; see also First Cmty. Bank, N.A. v. First Tennessee Bank, N.A., 489 S.W.3d 369, 385
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(Tenn. 2015) (“With respect to a corporation, the place of incorporation and principal place of
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business are paradigm bases for general jurisdiction. These bases afford plaintiffs recourse to at
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least one clear and certain forum in which a corporate defendant may be sued on any and all
claims.” (internal quotations omitted) (citing Daimler AG v. Bauman, 571 U.S. 117, 137
(2014))).
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Tennessee is an “adequate” forum because Tennessee law would provide an adequate
remedy for Lucas Construction’s alleged claims. An alternative forum is considered adequate so
long as “the remedy provided by the alternative forum is [not] so clearly inadequate or
unsatisfactory that it is no remedy at all.” See Piper Aircraft Co., 454 U.S. at 254. Lucas
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Construction has alleged a cause of action for breach of contract, a recognized cause of action in
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Tennessee. See, e.g., ARC LifeMed, Inc. v. AMC-Tennessee, Inc., 183 S.W.3d 1, 26 (Tenn. Ct.
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App. 2005) (identifying the essential elements of a breach of contract claim under Tennessee
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law). Moreover, “[i]n Tennessee, common law remedies available for breach of contract include
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damages, specific performance, and restitution.” Stewart Title Co. of Memphis v. First Am. Title
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Ins. Co., 44 F. Supp. 2d 942, 955 (W.D. Tenn. 1999). Lucas Construction will not be deprived
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of a remedy by being required to bring its claims in a Tennessee court. Thus, Tennessee is an
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adequate forum as a matter of law.
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Because Tennessee is both available and adequate for the prosecution of Lucas
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Construction’s claims, Wirtgen has met its threshold burden of proving an appropriate alternative
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forum.
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B. The balance of private and public factors weighs in favor of Tennessee.
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The balance of private and public factors also weighs in favor of Tennessee as a
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preferable forum for this lawsuit, particularly in light of the “substantially less deference”
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afforded to a nonresident’s choice of forum. See Quixtar, 315 S.W.3d at 31.
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1. Private factors weigh in favor of Tennessee, where the majority of witnesses and
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all of Wirtgen’s documents are located.
Private factors that are relevant to the analysis include “(1) the litigant's interests in such
matters as which forum would provide easiest access to sources of proof; (2) the cost of
obtaining the presence of witnesses; (3) the availability of process to compel the attendance of
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unwilling witnesses; (4) the possibility of a view of the premises, if appropriate; and (5) any
other practical factors that make trial expeditious and inexpensive.” Barreto, 404 S.W.3d at 98.
First, the relative ease of access to sources of proof favors Tennessee. This case arises
from the execution of a contract that was negotiated between a Tennessee corporation and a
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Louisiana corporation for equipment to be delivered to Louisiana and returned to Tennessee.
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None of the negotiations occurred in Texas. Wirtgen’s invoices were delivered from Tennessee
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to Louisiana, and payment was remitted to Tennessee. All of Wirtgen’s records are located in
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Tennessee. Ex. 4 at ¶ 3. There is simply no reason to believe that any documents or records are
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located in Texas.
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Second, three of the four Wirtgen employees who interacted with Lucas Construction
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regarding the Demonstration Agreement or the Lease Agreement are located at Wirtgen’s
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primary office in Tennessee. Ex. 4 at ¶ 9. The remaining employee, Paul McLaren, resides in
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Bell County, Texas, but even he does not maintain any records in Texas. Id. at ¶ 3. All records
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relating to Mr. McLaren’s employment are maintained in Tennessee. Id. As set forth in his
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declaration, Mr. McLaren travels virtually every week and is permitted to live anywhere within
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his region of responsibility: Arkansas, Texas, Oklahoma, Louisiana, and Mississippi. Id. at ¶ 2.
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He and his family have elected to live in Salado, Texas, approximately fifty miles north of
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Austin. Id. Thus, even Mr. McLaren’s presence in Texas is happenstance, and it lends nothing
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to efficient litigation in Harris County. There are no Wirtgen witnesses in Harris County and no
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Wirtgen documents or records in Texas. Because Wirtgen’s relevant documents are in
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Tennessee, even the deposition of Mr. McLaren and related preparation would be far more
convenient in Tennessee than in Harris County. The cost of getting witnesses to Tennessee will
be materially lower than the cost of getting witnesses to Harris County.
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Third, to the extent third-party witnesses are necessary for litigation of this dispute, those
witnesses reside in Tennessee or Louisiana where the agreements were negotiated, executed, and
performed, and beyond the subpoena range of a Texas court (see Tex. R. Civ. P. 176.3). Even if
witnesses agree to appear voluntarily, the cost of obtaining such witnesses’ presence in Texas
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would be expensive, given that those witnesses are located hundreds of miles from Harris
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County. See Quixtar, 315 S.W.3d at 43 (“It is an obvious conclusion that costs will increase
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when witnesses travel great distances.” (internal citations omitted)). While litigating in
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Tennessee is not a panacea with respect to Louisiana witnesses, it would plainly be more
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efficient and cost-effective than litigating in Texas.
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The fourth factor—ability to view the premises—is inapplicable here, where the dispute
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does not involve real property, premises liability, or an accident scene.
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Finally, the practical considerations that make trial easy, expeditious and inexpensive
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weigh heavily in favor of Tennessee. By contrast, nothing about litigating in Texas would be
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easy, expeditious, or inexpensive.
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2. Public factors, including the burden on this Court, weigh in favor of Tennessee.
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The public factors that are relevant to the forum non conveniens analysis, including
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“administrative difficulties related to court congestion, burdening the people of a community
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with jury duty when they have no relation to the litigation, local interest in having localized
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controversies decided at home, and trying a case in the forum that is at home with the law that
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governs the case,” also favor Tennessee. See In re General Elec. Co., 271 S.W.3d 681, 691
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(Tex. 2008).
First, the administrative difficulties related to court congestion must be considered in
light of the fact that the Harris County Criminal Courthouse has yet to reopen after Hurricane
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Harvey. The strain on judicial resources is palpable with criminal courts and civil courts sharing
the same courthouse. This factor weighs heavily in favor of dismissal.
Moreover, Tennessee has a local interest in this case because Tennessee law will likely
govern the dispute. Here, where the Lease Agreement does not contain a choice of law
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provision, “Restatement section 188 controls [the] analysis” of which state’s law will apply.
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Young v. Am. Bureau of Shipping, 1998 WL 285901, at *2 (Tex. App.—Houston [1st Dist.] June
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4, 1998, no pet.). Section 188 of the Restatement provides that a contract dispute shall be
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governed by the law of the state that has the most significant relationship to the transaction and
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the parties, which requires consideration of the contacts with the state in light of the factors listed
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under section 6 of the Restatement: (a) the place of contracting, (b) the place of negotiation of
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the contract, (c) the place of performance, (d) the location of the subject matter of the contract,
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and (e) the domicile, residence, nationality, place of incorporation and place of business of the
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parties. Id. (citing Restatement (Second) of Conflict of Laws § 188 (1971)).
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The contacts in this case that will dictate choice of law relate predominantly to
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Tennessee, some to Louisiana, and none to Texas. Because none of the negotiations took place
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in Texas and because Texas was never contemplated as the place of performance, Texas law will
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not govern this dispute. Rather, Tennessee, or perhaps Louisiana, law will govern. While
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Tennessee would have an interest in interpreting and applying its own law and in protecting the
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rights of a resident business, this Court has no particular interest in resolving a dispute under
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Tennessee law between two nonresident corporations. In fact, the task of applying another
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state’s law would only further burden Harris County courts that are already stretched thin.
Moreover, ithas been emphasized that although section 6 of the Restatement sets forth
“nonexclusive factors to be considered in determining the applicable law, the Restatement deems
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one of them most significant in contract cases—‘Protection of the justified expectations of the
parties [as] the basic policy underlying the field of contracts.’” Total Energy Corp. v. Raley &
Assocs., Inc., No. 2:09-CV-131-CE, 2011 WL 13196549, at *2 (E.D. Tex. Jan. 18, 2011) (citing
Restatement (Second) of Conflict of Laws § 188, cmt. b). Here, the justified expectation of the
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Parties was for Tennessee law to apply to their contract. After all, they invoked Tennessee law
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in connection with the preliminary Demonstration Agreement. Ex. 3 at ¶ 9(d). Wirtgen
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contracted for the delivery of equipment to Louisiana and a return of the equipment to
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Tennessee. It was never contemplated that the leased equipment would end up in Texas, and it
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was never expected the Texas law might apply. Ex. 4 at ¶ 5.