Opinion
No. 05-10-01535-CV
Opinion Filed August 5, 2011.
On Appeal from the 199th Judicial District Court, Collin County, Texas, Trial Court Cause No. 199-53691-03.
Before Justices RICHTER, LANG and FILLMORE.
MEMORANDUM OPINION
Irwin A. Katz appeals the trial court's order granting Winston Cashett's special appearance. In two issues, appellant contends the trial court erred by (1) admitting certain affidavits in support of appellee's special appearance because they were not timely served under the Texas Rules of Civil Procedure, and (2) granting appellee's special appearance because appellee failed to negate all possible grounds of personal jurisdiction in Texas. We overrule appellant's issues and affirm the trial court's order granting appellee's special appearance.
Background
Appellee, a Washington State law firm, represented several plaintiffs in an Idaho lawsuit for securities fraud against, among others, appellant. After a judgment for approximately one million dollars was entered against appellant and other defendants, appellant, a Texas resident, refused to pay the judgment. Because appellee has no lawyers in the firm licensed to practice in Texas, it referred the plaintiffs to Baron Budd, P.C., a law firm in Dallas, to assist with collection of the Idaho judgment. On December 19, 2002, the Idaho plaintiffs filed suit against appellant to enforce the unsatisfied Idaho judgment. While the Texas enforcement suit was pending, appellant and the Idaho plaintiffs mediated a settlement, that, according to appellee, was based on appellant's representation that he had a limited ability to pay the Idaho judgment. The settlement agreement contains an Idaho choice of law provision.
Shortly after entering the settlement agreement, appellant and his wife filed for divorce. During the divorce proceeding, appellant admitted that he had transferred his "life savings" to his wife to avoid collection of the full Idaho judgment. After learning of the fraudulent transactions, appellee submitted the matter to the Idaho court, which set aside the settlement agreement. The Idaho plaintiffs then intervened in the Texas divorce represented by a Texas attorney, John Emmett. Thereafter, appellant filed a counterclaim against appellee for a constructive trust on attorney's fees paid to appellee for the work it performed for the Idaho plaintiffs in the Idaho lawsuit against appellant.
In his counterclaim, appellant generally alleged the following jurisdictional facts to show personal jurisdiction in Texas: (1) appellee is a foreign corporation doing business in Texas; (2) appellee has continuous and systematic contacts with Texas establishing general jurisdiction; (3) appellee has contracted by mail with a Texas resident with the contract to be performed in whole or in part in Texas; (4) appellee has committed a tort in whole or in part in Texas; (5) appellee has, directly or indirectly through an intermediary located in Texas, recruited Texas residents for employment.
In his brief, appellant does not argue appellee committed a tort in Texas, therefore we do not discuss this particular jurisdictional allegation.
Appellee filed a verified special appearance contending Texas does not have jurisdiction over it because: (1) its representation of the Idaho plaintiffs occurred in Idaho and Washington, not in Texas; (2) it does not have continuous or systematic contacts with Texas, making assertion of general jurisdiction improper; and (3) assertion of personal jurisdiction would violate due process. In support of these assertions, appellee relies on C. Matthew Anderson's affidavits and deposition testimony. In the affidavits and deposition, Anderson testified that he is currently serving as president of appellee, which was formed and organized in the state of Washington, has its principal place of business in Washington, and practices law in Washington and Idaho. Appellee does not maintain an office nor an agent in Texas, none of its attorneys are residents of Texas or licensed to practice law in Texas, and appellee has not incurred or paid taxes in Texas. Although appellee has had some contact with Texas, including eleven trips by its attorneys between 2001 and February of 2010, and has filed three pro hoc vice petitions (two in unrelated litigation), appellee does not actively solicit business or employees from Texas residents. The remaining pro hoc vice petition was filed in the Texas enforcement suit but the trial court never entered an order permitting the appearance. Rather, the Idaho plaintiffs were represented by Emmett, an attorney licensed to practice law in Texas. Finally, Anderson testified that contrary to appellant's allegation, appellee has never committed a tort in Texas.
After considering this and other evidence, the trial court signed an order granting appellee's special appearance and dismissing appellant's counterclaim against appellee. This appeal followed.
Discussion
In his first issue, appellant contends the trial court erred by admitting Anderson's affidavits because the affidavits were not timely. We disagree.
A special appearance is used to challenge the trial court's jurisdiction over a person who claims he is not amenable to process. Stein v. Deason, 165 S.W.3d 406, 410 (Tex. App.-Dallas 2005, no pet.). Rule 120a of the rules of civil procedure governs the procedure for challenging the trial court's personal jurisdiction over a defendant. Rule 120a provides that "the trial court shall determine the special appearance on the basis of the pleadings, any stipulations made by and between the parties, such affidavits and attachments as may be filed by the parties, the results of discovery processes, and any oral testimony." Tex. R. Civ. P. 120a(3). Affidavits are to be served at "least seven days before the hearing." Tex. R. Civ. P. 120a(3).
Rule 21a, the "mailbox rule" requires a party to add three days to the prescribed period when documents are served by mail or telephonic document transfer. Tex. R. Civ. P. 21a. However, rule 21a applies only when receipt of a document or other paper begins a fixed time period to respond. Prestwood v. Settle, 2008 WL 537159, at *4 (Tex. App.-Austin Feb. 28, 2008, pet. denied); Lee v. Palo Pinto Cnty., 966 S.W.2d 83, 85-86 (Tex. App.-Eastland 1998, pet. denied). The rule in question, rule 120a, provides that any party filing an affidavit must do so at least seven days before the hearing. Although the trial court may grant a continuance to permit more time for discovery of "essential facts," there is no prescribed time period for responsive affidavits. See Tex. R. Civ. P. 120a(3); but see, Said v. Maria Investments, Inc., 2010 WL 457463, at *4 (Tex. App.-Houston [1st Dist.] Feb. 11, 2010, pet. denied) (because rule 120a allows for responsive affidavits, rule 21a does apply). Therefore, when, as here, the affidavit was served by telephonic transfer seven days before the special appearance hearing, the trial court did not err by considering the complained-of affidavit. See Prestwood, 2008 WL 537159, at *4; Lee, 966 S.W.2d at 85-86. We overrule appellant's first issue.
In his second issue, appellant contends the trial court erred by granting appellee's special appearance. In particular, appellant maintains that although appellee's contacts with Texas are limited, nevertheless, appellee has engaged in commerce in Texas and such contacts are sufficient to impose both general and specific jurisdiction over appellee. After reviewing the record, we cannot agree.
The existence of personal jurisdiction is a question of law which we review de novo. Spir Star AG v. Kimich, 310 S.W.3d 868, 871 (Tex. 2010). When reviewing the trial court's ruling on a special appearance, we examine all of the evidence in the record to determine if the nonresident defendant negated all possible grounds for personal jurisdiction. Reiff v. Roy, 115 S.W.3d 700, 705 (Tex. App.-Dallas 2003, pet. denied). When, as here, the trial court does not issue findings of fact or conclusions of law, all facts necessary to support the judgment and supported by the evidence are implied. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).
The plaintiff bears the initial burden of pleading sufficient allegations to establish personal jurisdiction over a defendant. Id. at 793. However, when a nonresident defendant challenges jurisdiction through a special appearance, the defendant must negate all grounds for personal jurisdiction alleged by the plaintiff to prevail. See id.
A Texas court's exercise of personal jurisdiction over a nonresident satisfies state statutory and federal due-process requirements if the nonresident has minimum contacts with Texas and the exercise of personal jurisdiction over the nonresident does not offend traditional notions of fair play and substantial justice. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984). The minimum-contacts requirement is satisfied when the nonresident purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex. 2007). The "purposeful availment" inquiry has three parts. Id. First, only the defendant's contacts with the forum are relevant, so the reviewing court does not consider the unilateral activity of other persons or entities. Id. Second, the contacts on which jurisdiction depends must be purposeful, rather than random, fortuitous, or attenuated. Id. Third, "the defendant must seek some benefit, advantage or profit by availing itself of the jurisdiction." Id. (quoting Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex. 2005)).
A nonresident's contacts with the forum state may give rise to general or specific jurisdiction. Id. General jurisdiction is established if the nonresident's contacts with the forum state were continuous and systematic within a reasonable number of years before suit was filed. PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 168-71 (Tex. 2007). Specific jurisdiction is established if the nonresident's alleged liability arises out of or is related to an activity conducted within the forum. Moki Mac, 221 S.W.3d at 575-76. Liability arises out of or is related to an activity within the state when there is a substantial connection between the nonresident's contacts with the state and the operative facts of the litigation. Id. at 576, 585.
Having reviewed the record in this case, we conclude the trial court did not err in concluding that appellee had insufficient minimum contacts for which to hale it into a Texas court under either general or specific jurisdiction. The record shows that appellee, a resident corporation of Washington State, was hired by the Idaho plaintiffs to represent them in a suit brought in Idaho. None of that litigation took part in Texas. It was only after appellant refused to pay the judgment that the Idaho plaintiffs filed a suit for enforcement in Texas. Although appellee initially filed a pro hoc vice petition to assist local counsel, the trial court never entered an order permitting the appearance. Instead, the Idaho plaintiffs were ultimately represented by Baron Budd, a Texas law firm not associated with appellee. And, even though appellee's lawyers made approximately one visit to Texas per year for the last ten years on client matters, there is no evidence that appellees purposefully directed any act or consummated any transaction in Texas. Moreover, any of the contacts appellees had with this State are not of the quality or quantity such that jurisdiction can be imposed. See Fowler v. Litman, 2008 WL 2815086, at *3 (Tex. App.-Dallas Jul. 23, 2008, pet. denied) (mem. op.) (representing approximately fifty Texas clients over twenty-plus years does not constitute substantial, systematic and continuous contact with Texas); Myers v. Emery, 697 S.W.2d 26, 31-32 (Tex. App.-Dallas 1985, no writ) (holding contacts minimal and fortuitous in case where Texas resident sued Oklahoma lawyer, who represented him at trial in Oklahoma, to prevent lawyer from collecting fees from him). We overrule appellant's second issue.
Accordingly, we affirm the trial court's order.