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AMS Staff Leasing NA6/28/2004
Petitioners AMS Staff Leasing NA, Inc. (AMS), E-Z Bookkeepers, Inc., doing business as Professional Business Solutions (PBS), Doug Hasty, and Charles David Wood (collectively defendants) seek a writ of mandate compelling the trial court to vacate its order denying the motion of AMS and PBS to dismiss the complaint based on a forum selection clause in the relevant contract. In the same writ petition, Wood seeks a writ of mandate compelling the trial court to vacate its order denying his motion to quash service of summons for lack of personal jurisdiction. We grant the petition.
In separate appeals (case Nos. G032525 and G032924, consolidated with each other), defendants challenge the trial court's denial of the motion of AMS and PBS to compel arbitration. In light of our decision to grant the writ petition, we dismiss those appeals as moot.
Facts and Proceedings in the Trial Court
AMS engages in the business of employee leasing. AMS, through its wholly owned subsidiary PBS, enters into staff leasing agreements whereby AMS agrees to employ its clients' workforces and lease the employees back to AMS's clients. AMS performs certain employer functions-such as processing payroll and obtaining workers' compensation insurance-for the employees it leases back to clients. Wood is AMS's president.
The real parties in interest are Checkmate Staffing, Inc. (Checkmate), and its subsidiaries Checkmate Staffing East, Inc., Checkmate Staffing West, Inc., Checkmate Staffing National, Inc., Checkmate Staffing Transport, Inc., and Staffaide, Inc. (collectively plaintiffs).
In March 2002, Checkmate entered into a staff leasing agreement (the agreement) with PBS. The agreement required PBS "to obtain and provide Workers' Compensation and Employers Liability Insurance, including Occupational Disease Coverage, providing statutory benefits for Employer's Liability Insurance" for the employees leased to Checkmate.
Later in 2002, plaintiffs filed this lawsuit for fraud, negligent misrepresentation, fraud in the inducement, breach of contract, common counts, accounting, and conversion. Plaintiffs alleged defendants fraudulently induced them into entering the agreement by falsely representing in March 2002 that AMS had obtained workers' compensation insurance for plaintiffs' employees. Plaintiffs alleged AMS and PBS had been informed by their workers' compensation carrier not to add new clients to their policy because it was going to be cancelled.
AMS and PBS moved to dismiss for lack of jurisdiction or for an order for arbitration (Hasty and Wood were not moving parties and did not join in the motion). The motion to dismiss was based on the agreement's forum selection clause and arbitration clause. The forum selection clause, paragraph 14 of the agreement, states: "Jurisdiction, Choice of Law and Forum. This Agreement shall be governed and construed in accordance with the substantive laws of the State of Texas. PBS is based in Dallas, Texas, and this Agreement is to be partially performed in Dallas, Texas. It is agreed that any and all disputes arising out of this Agreement will be heard and decided in a State District or County Court located in Dallas County, Texas." The arbitration clause, paragraph 20 of the agreement, states: "Arbitration Agreement. PBS and Client Company agree to resolve any disputes they may have against each other by arbitration, except for violations of paragraph 19. In the event PBS and/or Client company are alleged to have violated paragraph 19 of this Agreement, the non-violating party may file suit in Dallas County District Court and/or County Court to obtain a restraining order and/or injunctive relief to resolve
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