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In re Texas Association of School Boards5/13/2005
ON PETITION FOR WRIT OF MANDAMUS
Argued September 30, 2004
JUSTICE GREEN and JUSTICE JOHNSON did not participate in the decision.
In this mandamus proceeding, the Texas Association of School Boards, Inc. and the Texas Association of School Boards Risk Management Fund seek to have a suit against them transferred from Duval County to Travis County based on a contractual choice of venue provision in a risk coverage agreement that is similar to an insurance contract. They assert that the agreement is a "major transaction" within the meaning of section 15.020 of the Civil Practice and Remedies Code. Section 15.020 is a mandatory venue provision. If there is a written agreement that suit arising from a "major transaction" may be brought in a particular county, suit must be brought in that county.
A "major transaction" is "a transaction evidenced by a written agreement under which a person pays or receives, or is obligated to pay or entitled to receive, consideration with an aggregate stated value equal to or greater than $1 million." The relators agreed to provide more than $17 million in risk coverage at a cost of $41,973 per year. The trial court declined to enforce the parties' venue agreement without stating its reasons, and the court of appeals denied mandamus relief. We likewise deny mandamus relief. The mandatory venue provision in section 15.020 is inapplicable because the coverage agreement is not a "major transaction."
I.
The Texas Association of School Boards Risk Management Fund (the Fund) is a nonprofit, statewide administrative agency consisting of cooperating public school districts in Texas. The Fund offers self-funded liability coverage plans to education-based political subdivisions. The Texas Association of School Boards (TASB) is the Fund's servicing contractor and provides services including the investigation and handling of property loss claims.
In October 2000, Benavides Independent School District (BISD) and the Fund entered into an "Interlocal Participation Agreement" under which the Fund agreed to provide vehicle and general liability coverage as well as coverage for certain casualty losses to property in return for an annual contribution from BISD. The term of the agreement was for one year, automatically renewable for two successive one-year terms, with the coverage and contribution amounts adjusted annually.
The coverage was renewed for the first renewal term, and during that term, coverage for potential losses or liabilities was in excess of $17,000,000 for an annual contribution of $41,973. In their briefing in this Court, the parties have segregated the annual amount paid for coverage of up to $15,309,822 for casualty loss to buildings, personal property, and auxiliary structures -- $33,069 - from the annual amount paid for all other coverage - $8,904.
This suit arises from BISD's claim for indemnity under the parties' agreement for water damage and other alleged physical losses to every building in its school district, totaling more than $17 million. TASB denied the claim, and BISD appealed to the Fund's Board of Trustees, which affirmed the denial. BISD then sued the Fund and TASB in Duval County, asserting claims for breach of contract, declaratory relief, deceptive trade practices, unconscionable conduct, negligence, gross negligence, and breach of an alleged duty of good faith and fair dealing. BISD subsequently joined two other defendants, alleging negligence against Roofology Consultants Corp., which provided roofing consultation to BISD for some of the buildings at issue, and alleging tortious interference and civil conspiracy against Pro-Staff Adjusting Servic
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