Forex Capital Markets, LLC v. Crawford
Dallas Court of Appeals, No. 05-14-0341-CV (December 31, 2014)
Justices O’Neill (Opinion), Lang-Miers, and Brown
White induced a number of investors to contribute to Revelation, an investment partnership, to engage in foreign-currency trading through another entity, Forex Capital Markets. White later misappropriated more than $1 million in partnership funds, and the Revelation partnership also lost money in its currency-exchange activities. After regulators brought actions against Revelation and White, a federal court appointed Crawford as receiver for Revelation. Crawford determined that Revelation’s investors had claims against Forex for its alleged complicity in White’s scheme. He secured assignments of those claims from the investors, along with their agreement that any recovery would be made part of the “receivership estate.” Then, in his own name as receiver, but as assignee of the investors, Crawford brought suit on those claims against Forex in Texas state court. But when Revelation opened its account with Forex, it agreed to arbitrate any disputes with Forex and to exclusive jurisdiction in New York. So, Forex moved to dismiss based on the forum-selection clause or, alternatively, to compel arbitration. The trial court denied both motions. Forex appealed the denial of arbitration and filed a mandamus petition attacking the trial court’s refusal to enforce the forum-selection clause. In a consolidated interlocutory appeal and mandamus proceeding, the Dallas Court of Appeals confirmed that Forex had chosen the correct vehicles for both appellate attacks, but affirmed the decision of the trial court on both issues. The Court acknowledged that, ordinarily, if an entity has agreed to arbitration, for example, its receiver would be bound by that agreement. But where, as here, the receiver was asserting claims assigned by investors—who did not sign either the arbitration agreement or the forum-selection agreement—he “step[ped] into the shoes of the assignor[s]” and therefore was entitled, as they would be, to choose the venue in which to litigate the assigned claims.
