Opinion
NO. 01-16-00288-CV
02-23-2017
BORRIS MILES, Appellant v. JOHN H. BARTON, Appellee
On Appeal from the 270th District Court Harris County, Texas
Trial Court Case No. 2014-39794
MEMORANDUM OPINION
Appellant, Borris Miles, sued appellee, John H. Barton ("Barton"), for tortious interference with Miles's Texas-based contracts with co-defendants Dwayne Harris and Paul McCann and knowing participation in a breach of fiduciary duty. Barton filed a special appearance, which the trial court granted. Miles argues, in his sole issue on appeal, that the trial court erred in granting Barton's special appearance because (1) Barton's actions purposefully directed into Texas establish specific jurisdiction as to Miles's claims, (2) physical presence in the forum state is not required to establish specific jurisdiction over a nonresident, and (3) exercising jurisdiction over Barton comports with traditional notions of fair play and substantial justice.
Harris and McCann are not parties to this appeal.
We affirm.
Background
According to Miles's pleadings, Harris and McCann own and operate Attentive Hospice, LLC, a Houston, Texas based company that provides in-home hospice care in multiple states, including Texas and Louisiana. Specifically relevant here, the record demonstrates that Harris owned a company called "Attentive Hospice Metairie, LLC" that operated a hospice facility in Metairie, Louisiana ("the Metairie Facility"). The records of the Louisiana Secretary of State show Harris as the only member of this entity.
In January 2012, Miles and Harris entered into a joint venture agreement ("JVA") to form and operate multiple hospice facilities in Texas and Louisiana that would be operated under the name Attentive Hospice. The JVA provided that Harris "has, and continues to, organize and operate various hospice facilities" in Texas, Louisiana, and Arkansas and that Harris "requested, and Miles agreed to provide, financial and administrative assistance in the organization, operation and development" of the hospice facilities. This enterprise was the basis of the JVA ("the Venture"). The JVA stated that "Miles shall contribute the initial start-up capital for the Venture" and "administrative services to the [hospice facilities]." In return, Miles and Harris agreed to "share in all net profits from the Venture at 50% each for the life of the Venture." They also agreed to "share control and authority at 50% each and all decisions involving expenditures or commitments in excess of $10,000 shall require unanimous approval of the Venturers." The JVA also stated that "[n]o Venturer shall assign his rights or its interest in this Venture without first obtaining the written approval and waiver of right of first refusal from the other Venturers."
Miles entered into similar contract with defendant McCann.
Miles also alleged that he and Harris entered into a consulting agreement and that Harris breached the terms of this agreement. No consulting agreement is contained in the appellate record.
Miles alleged that some time near the end of 2012 or beginning of 2013, Barton began negotiations with Harris and Miles to purchase an interest in Attentive Hospice. Miles alleged that Barton called and spoke with him and Harris at their Houston, Texas office and that he informed Barton during this phone call that he had an ownership interest in Attentive Hospice.
The record is unclear concerning the timing of this phone call. Harris testified in his deposition that it occurred sometime in 2012. On the other hand, David Parker, a consultant for Harris, averred that the phone call occurred in early 2013.
Barton, however, denied that he initiated the negotiations over the Metairie Facility. Rather, he averred that he was contacted by David Parker, who represented himself as a consultant for Harris, regarding an opportunity to purchase an interest in the Metairie Facility. Barton knew Parker because of their previous work together with a different company. According to Barton, Parker informed him that the Metairie Facility was experiencing "serious operational difficulties" because it had lost its medical director and nursing director and had no patients. The state of Louisiana was preparing to shut down the facility, and the facility had approximately $10,000 in debt. Barton averred that he met with Harris in Louisiana approximately four times regarding the Metairie Facility.
Miles alleged that Harris sent Barton a proposed "Letter of Intent" ("LOI") to purchase an ownership interest in Attentive Hospice Metairie, LLC and its Metairie Facility. The record shows that Harris emailed Barton and Parker in February 2013, stating, "Hi Guys, Please review and call me with any questions." The email was signed, "Dwayne Harris[,] Let's Make This Work." Parker averred that the LOI was attached to this email. This LOI listed a purchase price of $150,000 in exchange for a fifty percent ownership interest in the Metairie Facility. It stated that "[t]he other fifty percent (50%) of ownership interest in the Company will be owned by Dwayne Harris and Borris Miles (the "Current Owners")." Barton did not sign the LOI.
Barton and Harris executed the "Act of Sale of Membership Interest" regarding the ownership of the Metairie Facility ("Sale Agreement"). This agreement reflected that Harris signed it in Harris County, Texas, on July 17, 2013, while Barton signed it in Louisiana on August 7, 2013. Under the Sale Agreement, Barton paid $10,000—the amount of the debt of the Metairie Facility—and provided services as the facility's medical director in exchange for a 57.5% ownership interest in the facility. Parker became the nursing director of the facility. Barton found patients and was able to keep the facility open. The Sale Agreement stated that it became effective June 22, 2013.
The Sale Agreement stated that "no Operating Agreement has been adopted by the member of [Attentive Hospice Metairie, LLC]" and that Harris "currently owns one hundred percent (100%) of the outstanding membership interests in the LLC." The Sale Agreement further stated that Harris, as the seller, warranted "that he is the owner of the ownership interest transferred hereby" and that he "is not obligated to obtain any consent or approval in order to convey his ownership interest in the LLC." Finally, the Sale Agreement stated, "Buyer and Seller further acknowledge that no membership or other certificates evidencing ownership in the LLC have been issued." The records of the Louisiana Secretary of State list Harris as the only member of Attentive Hospice Metairie, LLC. Miles was not a party to the Sale Agreement.
Miles also adduced a document, signed only by Harris, dated August 23, 2013, which stated in its entirety, "The amount Attentive Hospice Metairie, LLC will owe Dwayne Harris: $150,000.00."
The records of the Louisiana Secretary of State show that, on July 30, 2013, Harris added Barton and Parker as members of Attentive Hospice Metairie, LLC.
Barton subsequently removed Parker as a member in January 2014.
Harris then allegedly represented to Miles that the Metairie Facility had ceased operating, and Harris quit paying Miles revenues from that facility that would have been due under the JVA.
Furthermore, Barton averred that he was not aware of the JVA between Miles and Harris until January 14, 2014—after he had acquired his interest in the Metairie Facility—when Miles contacted him and stated that he was a "partner" in the Metairie Facility.
Miles then filed suit against Harris, McCann, and Barton. Specifically, Miles alleged:
[U]nbeknownst to Miles, Harris continued negotiating with Barton for the sale of interests in the Metairie Facility, and cut [Miles] out of all further negotiations. At all times, Barton knew, or should have known, that [Miles] had valid written contracts concerning the Metairie
Facility. Harris failed to inform [Miles] of the negotiations and potential sale or transfer of interest in the Metairie Facility, as required under the [JVA] and the Consulting Agreement.Miles alleged that Harris breached the terms of the JVA and consulting agreement by, among other things, failing to give the required notice of the sale and failing to pay Miles his portion of the proceeds from that sale. Miles sued Harris and McCann for breach of contract, and he also sued Harris for fraudulent misrepresentation and breach of fiduciary duty.
Miles sued Barton for tortious interference with a contract and for knowingly participating in a breach of fiduciary duty. Miles asserted that the JVA gave him a 50% share of control and authority over the Venture, including the Metairie Facility. He alleged that Barton knew or should have known of the existence of Miles's JVA and consulting agreement with Harris and that Barton interfered with those contracts by "negotiating with and ultimately inducing Harris to breach his contract with [Miles]" to sell an ownership or membership interest in the Metairie Facility. Miles further asserted that Barton "has personally availed himself of jurisdiction in this state by conducting business in Texas" and by "purposefully directing acts toward this forum, including the negotiation, entrance and performance of a contract with Harris, a Texas resident, to purchase a business owned, in part, by Miles." Miles alleged that the Sale Agreement "was to be partially performed in Texas," that Barton "purposefully directed communications into Texas by calling Miles and Harris while they were both located in Houston, Texas to negotiate the purchase of [their] business," and that Barton tortiously interfered with Miles's JVA with Harris by entering into the Sale Agreement even after Miles informed Barton that Miles had an ownership interest in the Metairie Facility.
Barton filed a special appearance. He argued that he was a Louisiana resident who did business in Louisiana and that the evidence submitted with his special appearance demonstrated that he had never conducted business in Texas. Barton asserted that he never met with Harris or anyone else involved with the Metairie Facility in Texas, that he did not travel to Texas regularly, that the Sale Agreement was negotiated, executed, and performed in Louisiana, that no portion of the Sale Agreement was performed or intended to be performed in Texas, that he had no knowledge of any joint venture agreement between Miles and Harris or McCann at the time he executed the Sale Agreement, and that he did not have sufficient contacts with Texas to warrant the exercise of personal jurisdiction over him. Barton also averred that he did not know of the JVA between Miles and Harris until Miles contacted him on January 14, 2014, and informed him that he was a partner in the Metairie Facility.
Miles responded to the special appearance, asserting that Barton directed activities to Texas in negotiating, executing, and performing the Sale Agreement with Harris. He presented copies of his own affidavit, the JVA, the Sale Agreement, and deposition testimony from Harris. Miles asserted that Barton made a phone call to Harris and Miles in Texas in 2012 seeking to become a partner in their Metairie Facility and that he informed Barton in this phone call of his interest in the Metairie Facility. Finally, Miles averred that Barton made payments under the Sale Agreement at the time of purchase and that Barton agreed to make future payments from the Metairie Facility to Harris in Texas.
Harris's deposition testimony supported Miles's assertions regarding the phone call from Barton to Miles and Harris in Texas. Harris also testified in his deposition that he never met with Barton in Texas and that he did not discuss Miles's interest in the Metairie Facility with Barton prior to execution of the Sale Agreement. Harris admitted in his deposition that he did not receive any payments directly from Barton for the purchase of the Metairie Facility.
Miles also presented Parker's affidavit, in which Parker stated that he was an employee of Attentive Hospice Metairie, LLC from July 2013 until January 2014. Parker averred that "[i]n early 2013, [he] attended a meeting ("Meeting") wherein the potential sale of an ownership interest in the Metairie Hospice to Barton was discussed. The attendees of the Meeting included [Miles], Harris, Barton, and myself." He further averred that in early 2013, he "personally heard the phone call" in which Miles and Harris stated to Barton that Miles was "part of the business" and that his approval was required for any sale of the Metairie Facility. Parker averred that Harris sent him and Barton a "proposed Letter of Intent for the purchase of the Metairie Hospice ("LOI"), which included an acknowledgment of [Miles's] interests."
Parker did not state in what capacity he met with Miles, Harris, and Barton in early 2013, as he averred he was not an employee until July 2013. He also did not state where this alleged meeting occurred or whether this meeting is the same one in which Barton participated by phone call.
In his reply, Barton challenged Miles's allegations and evidence regarding the phone call and the alleged payments made to Harris in Texas. Specifically, Barton argued that Miles "does not establish how he could have personal knowledge that the price Barton paid to purchase the membership interests was paid to Harris in Texas." The Sale Agreement itself did not require that Barton transmit any money to Harris in Texas. It stated only that Barton acquired his interest in exchange for "TEN THOUSAND DOLLARS ($10,000.00) AND OTHER GOOD AND VALUABLE CONSIDERATION." Barton averred that the $10,000 consideration consisted of his assumption of the Metairie Facility's debts and that no payments were made to Harris in Texas, and he argued that, even if Miles was correct that the Metairie Facility was required to make future payments to Harris, those future payments from the Metairie Facility do not constitute contacts of Barton himself relevant to the underlying dispute. Barton also argued that even if the phone call had occurred as alleged by Miles, it was insufficient to establish personal jurisdiction.
The trial court granted Barton's special appearance and dismissed Miles's claims against him. This appeal followed.
See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(7) (West Supp. 2016).
Special Appearance
In his sole issue on appeal, Miles argues that the trial court erred in granting Barton's special appearance.
A. Standard of Review
Whether a court can exercise personal jurisdiction over a nonresident defendant is a question of law, and thus "we review de novo the trial court's determination of a special appearance." Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 657 (Tex. 2010); Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). However, the trial court frequently must resolve questions of fact before deciding the jurisdictional question. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). "When [as here] a trial court does not issue findings of fact and conclusions of law with its special appearance ruling, all facts necessary to support the judgment and supported by the evidence are implied." Id. at 795.
Texas courts may exercise personal jurisdiction over a nonresident if the long-arm statute authorizes it, consistent with federal and state constitutional due-process guarantees. Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142, 149 (Tex. 2013). The long-arm statute permits Texas courts to exercise jurisdiction over a nonresident defendant that "does business" or "commits a tort in whole or in part" in Texas, and it provides a non-exhaustive list of activities that constitute "doing business" in Texas. See TEX. CIV. PRAC. & REM. CODE ANN. § 17.042 (West 2015); BMC Software, 83 S.W.3d at 795 (holding that long-arm statute extends Texas courts' jurisdiction "as far as the federal constitutional requirements of due process will permit").
Personal jurisdiction over a nonresident is consistent with due process when the nonresident has established minimum contacts with the forum state, and the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Moki Mac, 221 S.W.3d at 575 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)). In most cases, the exercise of jurisdiction over a nonresident defendant will not conflict with notions of fair play and substantial justice if the nonresident has minimum contacts with the forum. Moncrief Oil, 414 S.W.3d at 154-55. "A defendant establishes minimum contacts with a state when it 'purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.'" Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240 (1958)).
The Supreme Court of Texas has identified three distinct aspects of the "purposeful availment" requirement. First, only the defendant's contacts with the forum are relevant. Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex. 2005). A defendant should not be called to court in a jurisdiction solely as a result of the unilateral activity of another party or third person. Id. Second, the acts relied on must be purposeful, as opposed to random, isolated, or fortuitous. Id. Third, the defendant must seek some benefit, advantage, or profit by availing itself of the jurisdiction. Id.
A defendant's contacts can vest a court with either specific or general jurisdiction. BMC Software, 83 S.W.3d at 795. Here, Miles asserts that Barton's contacts with Texas vest the court with specific jurisdiction. Specific jurisdiction is established when the claims in question arise from or relate to the defendant's purposeful contacts with Texas. Kelly, 301 S.W.3d at 657-58. When a defendant challenges the exercise of personal jurisdiction in a special appearance, the plaintiff and the defendant bear shifting burdens. Id. at 658. The initial burden is on the plaintiff to plead sufficient allegations to establish jurisdiction over the defendant. Id. After the plaintiff meets his initial burden, the burden then shifts to the defendant to negate all bases of jurisdiction alleged by the plaintiff. Id.
The defendant can negate jurisdiction on either a factual or legal basis. Id. at 659. To negate jurisdiction on a factual basis, the defendant can "present evidence that it has no contacts with Texas, effectively disproving the plaintiff's allegations." Id. Alternatively, the defendant can negate jurisdiction on a legal basis by showing that, "even if the plaintiff's alleged facts are true, the evidence is legally insufficient to establish jurisdiction; the defendant's contacts with Texas fall short of purposeful availment; for specific jurisdiction, that the claims do not arise from the contacts; or that traditional notions of fair play and substantial justice are offended by the exercise of jurisdiction." Id.
In conducting a specific jurisdiction analysis, we focus on the relationship among the defendant, the forum, and the litigation. Id. at 658. "[F]or a nonresident defendant's forum contacts to support an exercise of specific jurisdiction, there must be a substantial connection between those contacts and the operative facts of the litigation." Moki Mac, 221 S.W.3d at 585 ("Our limited jurisprudence . . . suggests a middle ground, more flexible than substantive relevance but more structured than but-for relatedness, in assessing the strength of the necessary connection between the defendant, the forum, and the litigation.") (citing Guardian Royal Exchange Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 229-33 (Tex. 1991), and Rush v. Savchuk, 444 U.S. 320, 329, 100 S. Ct. 571 (1980)); see also Shell Compania Argentina de Petroleo, S.A. v. Reef Expl., Inc., 84 S.W.3d 830, 837 (Tex. App.—Houston [1st Dist.] 2002, pet. denied) (stating contacts "must have a 'substantial connection' that results in the alleged injuries").
Personal jurisdictional analysis "always centers on the defendant's actions and choices to enter the forum state and conduct business." Kelly, 301 S.W.3d at 660. The mere existence of a cause of action against Barton is not enough: Miles was required to "plead and, when challenged by the defendants, present evidence" that Barton's relevant acts connected to Miles's claims "occurred, at least in part, in Texas." See id. at 660-61. The trial court did not issue findings of fact and conclusions of law with its special appearance ruling, so "all facts necessary to support the judgment and supported by the evidence are implied." BMC Software, 83 S.W.3d at 795; see Moncrief Oil, 414 S.W.3d at 150.
B. Analysis
Miles has sued Barton for tortious interference with the JVA between Miles and Harris, and any exercise of personal jurisdiction must arise out of Barton's contacts with this state that are substantially related to that claim. See Kelly, 301 S.W.3d at 658; Moki Mac, 221 S.W.3d at 585. Under Texas law, Miles must prove the following elements: (1) the existence of a contract subject to interference; (2) willful and intentional interference; (3) interference that proximately caused damage; and (4) actual damage or loss. See Powell Indus., Inc. v. Allen, 985 S.W.2d 455, 456 (Tex. 1998) (citing ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997)); Baty v. Protech Ins. Agency, 63 S.W.3d 841, 856-57 (Tex. App.—Houston [14th Dist.] 2001, pet. denied).
Miles also asserted that Barton knowingly participated in Harris's breach of his fiduciary duties to Miles. As the same alleged conduct underlies both of these assertions, we focus on Miles's claim for tortious interference with a contract in assessing whether Barton has sufficient minimum contacts with Texas giving rise to Miles's claims here. See Rhymes v. Filter Res., Inc., No. 09-14-00482, 2016 WL 5395548, at *5 (Tex. App.—Beaumont Sept. 22, 2016, no pet.) (mem. op.) (holding that "[w]hen 'a third party knowingly participates in the breach of duty of a fiduciary, such third party becomes a joint tortfeasor with the fiduciary and is liable as such'" and that findings that defendant knew of existence of fiduciary's duty and was aware of its participation in fiduciary's breach were "subsumed" in jury findings on tortious interference with business relations) (quoting Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942)); see also Wooters v. Unitech Int'l, Inc., —S.W.3d—, No. 01-15-00174-CV, 2016 WL 4536596, at *7 (Tex. App.—Houston [1st Dist.] Aug. 30, 2016, no pet.) (discussing cause of action for conspiracy to breach fiduciary duty).
Miles alleged that Barton's negotiation, execution, and performance of the Sale Agreement with Harris tortiously interfered with the JVA between Miles and Harris, and, thus, Barton's actions constituted the commission of a tort in Texas. Essentially, Miles relies on the phone call that he alleges Barton made in late 2012 or early 2013, Barton's continued negotiations with Harris after he was informed of Miles's purported interest in the Metairie Facility, and Barton's execution and performance of the Sale Agreement. None of these contacts are sufficient to confer specific jurisdiction over Barton.
Regarding the phone call, we first observe that Miles and Barton presented competing jurisdictional evidence. Miles adduced evidence that Barton initiated the phone call sometime in late 2012 or early 2013 to express his interest in becoming a partner in the Metairie Facility. Miles alleged, and presented evidence including his own affidavit and Harris's deposition testimony, that he informed Barton during this phone call that he had an ownership interest in the Metairie Facility. Barton, however, presented his own affidavit in which he averred that Parker, on Harris's behalf, approached him regarding the purchase of the Metairie Facility and that he was not aware of Miles's interest in the Metairie Facility until January 2014, several months after he executed the Sale Agreement. Barton cited Harris's deposition testimony that Harris and Barton never discussed Miles's interest in the Metairie Facility prior to the execution of the Sale Agreement and the records of the Louisiana Secretary of State demonstrating that Harris was the only member of Attentive Hospice Metairie, LLC, the entity that owned and operated the Metairie Facility.
Even taking Miles's jurisdictional evidence as true, this single phone call to Miles and Harris in Texas to negotiate the purchase of an interest in a Louisiana entity is insufficient to establish personal jurisdiction over Barton in Texas. The evidence demonstrates that, rather seeking some benefit, advantage, or profit in Texas, Barton was seeking to do business in Louisiana, and Miles's and Harris's residence in Texas was merely random or fortuitous as it related to Barton's actions. See Michiana, 168 S.W.3d at 785; see also KC Smash 01, LLC v. Gerdes, Hendrichson, Ltd., LLP, 384 S.W.3d 389, 394 (Tex. App.—Dallas 2012, no pet.) (holding that defendant did not "seek some benefit, advantage, or profit by 'availing' itself of the jurisdiction" when its "'availing' was for the purpose of building its restaurants in Kansas, not for reaping a profit or obtaining a benefit or advantage in Texas").
Nor does this alleged contact with Texas relate to the causes of action asserted by Miles. See Kelly, 301 S.W.3d at 657-58 (holding that specific jurisdiction is established when claims in question arise from or relate to defendant's purposeful contacts with Texas). Miles alleged that Barton contacted him and Harris seeking to become a partner in the Metairie Facility and that he informed Barton during this phone call that he had an ownership interest in the Metairie Facility. Nothing in the allegations or jurisdictional evidence indicates that any tortious conduct occurred during or as a result of this phone call. Miles relies on the evidence of this phone call to demonstrate that Barton acted with knowledge of Miles's ownership interest when he subsequently negotiated and executed the Sale Agreement with Harris, but the act of obtaining that knowledge is not itself tortious, and the negotiation, execution, and performance of the Sale Agreement occurred in Louisiana, not Texas.
Miles asserts that the Sale Agreement was negotiated, executed, and performed, at least in part, in Texas. However, he provides no jurisdictional evidence beyond his own conclusory statements in his affidavit to support these allegations. See TEX. R. CIV. P. 120a(3) (affidavits offered in special appearance "shall be made on personal knowledge [and] shall set forth specific facts as would be admissible in evidence"); Hoagland v. Butcher, 396 S.W.3d 182, 192-93 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) (special appearance affidavits must be "direct, unmistakable, and unequivocal as to the facts sworn to"; conclusory affidavits are not sufficient to raise fact issues because they are not credible or susceptible to being readily controverted and, therefore, amount to no evidence).
Rather, Harris testified in his deposition that he never met with Barton in Texas regarding the negotiation of the Sale Agreement. Barton averred that he met with Harris on four occasions, all in Louisiana. The Sale Agreement itself shows that Barton executed the agreement in Louisiana. The fact that Harris executed it while he was in Texas does not create a contact between Barton and Texas. See Michiana, 168 S.W.3d at 785 (only defendant's contacts with forum are relevant; defendant should not be called to court in jurisdiction solely as result of unilateral activity of another party or third person); Citrin Holdings, LLC v. Minnis, 305 S.W.3d 269, 279 (Tex. App.—Houston [14th Dist.] 2009, no pet.) ("When there are multiple defendants, the contacts of each defendant must be analyzed individually."). And the evidence likewise demonstrates that no portion of the Sale Agreement was to be performed in Texas—Barton purchased an interest in a Louisiana entity that operated the Metairie Facility in Louisiana by providing $10,000 in consideration. Barton averred that this amount reflected the debt that he assumed in taking over the Metairie Facility, and Harris himself admitted in his deposition that he never received any payments from Barton in Texas.
Miles's reliance on TV Azteca v. Ruiz and Citrin Holdings, LLC v. Minnis is likewise unpersuasive, as those cases are distinguishable from the case here. In TV Azteca, a Mexican recording artist who permanently resided in McAllen, Texas, filed a defamation action in Texas against two Mexican television broadcasting companies and the TV Azteca news anchor and producer. 490 S.W.3d 29, 35 (Tex. 2016) (cert. filed). The defendants filed special appearances, the trial court denied the special appearances, and the court of appeals affirmed. Id. at 35-36.
The supreme court concluded that the defendants purposefully availed themselves of the privilege of conducting activities in Texas by intentionally targeting Texas through the allegedly defamatory broadcasts. Id. at 52. In reaching this conclusion, the court rejected the plaintiff's allegations that the defendants "directed a tort" at her in Texas as a basis for exercising personal jurisdiction over the defendants, stating that "No one disputes that [plaintiff] resides in Texas and the brunt of any injuries she suffered from [defendants'] broadcasts occurred in Texas." Id. at 43. The supreme court reaffirmed that "courts cannot base specific jurisdiction merely on the fact that the defendant 'knows that the brunt of the injury will be felt by a particular resident in the forum state.'" Id. (quoting Michiana, 168 S.W.3d at 788).
The court then stated, "There is a subtle yet crucial difference between directing a tort at an individual who happens to live in a particular state and directing a tort at that state," and concluded that, because the defendants had "physically 'entered into' Texas to produce and promote their broadcasts, derived substantial revenue and other benefits by selling advertising to Texas businesses, and made substantial efforts to distribute their programs and increase their popularity in Texas," they "continuously and deliberately exploited the [Texas] market." Id. at 43, 52 (citing Michiana, 168 S.W.3d at 789 and Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781, 104 S. Ct. 1473, 1481-82 (1984)).
Here, unlike TV Azteca, Barton did not target Texas markets. He acquired an interest in a Louisiana LLC that operates a hospice facility in Louisiana. Construing his pleadings in the most favorable light, Miles alleges only that Barton knew that negotiating, executing, and performing the Sale Agreement—in Louisiana—would result in harm that would be felt by Miles in Texas. However, that is exactly the reasoning that the supreme court rejected in TV Azteca and Michiana. See id. at 43 ("[C]ourts cannot base specific jurisdiction merely on the fact that the defendant 'knows that the brunt of the injury will be felt by a particular resident in the forum state.'") (quoting Michiana, 168 S.W.3d at 788). Here, there is no evidence that Barton "physically 'entered into' Texas" to promote his business interests, that he derived any "revenue [or] other benefits" from conducting business in Texas, or in any other way "exploited" the Texas market. See id. at 52.
Citrin Holdings is likewise distinguishable. See 305 S.W.3d at 287-88. In that case, the New York defendant, Jacob Citrin, met with the plaintiff, Minnis, in Texas on multiple occasions regarding the parties' business relationship, including traveling to Texas to draft and sign a contract with Minnis. Id. at 275-76. Minnis, under the terms of the contract, conducted business and provided services that benefited Citrin from his office in Houston, Texas. Id. at 276. The Citrin Holdings court determined that Texas courts could properly exercise jurisdiction over Citrin individually because he traveled to Texas; entered into a contract that was to be performed, at least in part, in Texas; and allegedly made misrepresentations in Houston that induced Minnis to enter into the contract. Id. at 283-84.
Miles argues, as the court in Citrin Holdings stated, that "a single contract may establish sufficient minimum contacts when considered against a backdrop of 'prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing[.]'" See id. at 281 (quoting Burger King v. Rudzewicz, 471 U.S. 462, 478-79, 105 S. Ct. 2174, 2185 (1985)). However, unlike Citrin Holdings, none of those factors are present in the case at bar—there is no "backdrop of prior negotiations" or "actual course of dealing" connecting Barton to Texas. See id. ("Standing alone, entering a contract with a Texas resident does not necessarily establish minimum contacts sufficient to support personal jurisdiction."). While Citrin had face-to-face meetings with Minnis in Texas, Barton never met with Miles, the plaintiff, or Harris, his co-defendant, in Texas. Barton did not travel to Texas at all in connection with his acquisition of Attentive Hospice Metairie, LLC, and he executed the Sale Agreement in Louisiana. The Sale Agreement involved the purchase of a Louisiana asset, and it did not require any performance in Texas. Barton did not pay Harris in Texas; rather, he assumed the debt of Attentive Hospice Metairie, LLC in Louisiana.
Miles also argues that Barton need not have been physically present in Texas in order to have formed sufficient contacts with this state. However, Barton's contacts must still be purposeful and directed to Texas, and the claims in question must arise from or relate to those purposeful contacts. See Kelly, 301 S.W.3d at 657-58; Michiana, 168 S.W.3d at 785. As set out above, Miles failed to establish any purposeful contacts between Barton and Texas that gave rise to the claims in this suit. Recent supreme court precedent addressing allegations of tortious interference with a contract are instructive here.
In Searcy v. Parex Resources, Inc., the plaintiff, ERG (a company based in Houston), sued Parex Canada (a Canadian company) and other defendants, alleging in part that Parex Canada interfered with its contract to purchase an interest in a Columbian oil and gas operation. 496 S.W.3d 58, 63-65 (Tex. 2016). The supreme court declined to exercise personal jurisdiction over Parex Canada, observing that, although Parex Canada negotiated the purchase with a contact who was located in Houston and knew that the seller of the shares had operations in Texas, Parex Canada "did not specifically seek out a Texas seller or Texas assets, let alone attempt[] to meddle with a contract governed by Texas law or develop a Texas business." Id. at 73. Parex Canada did not "seek to launch operations in Texas or reap the benefits of the Texas economy," but was "on the hunt for Colombian assets." Id. at 73-74. The supreme court determined that the fact that Parex Canada's negotiations involved sending letters and emails to people located in Houston was insufficient to establish purposeful availment, holding that the seller "could, quite literally, have been based anywhere in the world, and Parex Canada would presumably have interacted with it in the same way. . . ." Id. at 74-75. Further, the fact that the seller had negotiated the sale of its stock with ERG, a Texas corporation, made no difference: "[The seller's] unilateral decision to enter into [that] agreement was completely out of Parex Canada's control." Id. at 74.
Here, the jurisdictional evidence indicates that Parker approached Barton about purchasing an interest in the Metairie Facility. Barton made one phone call to Miles and Harris in Houston and conducted some other negotiations with Harris, a Texas resident. All of Barton's contacts were for the purpose of purchasing an interest in the Metairie Facility, and the only in-person meetings occurred in Louisiana. Neither these negotiations nor Barton's purported knowledge of the JVA between Harris and Miles demonstrate that Barton sought out a "Texas seller or Texas assets" or that he was attempting "to meddle with a contract governed by Texas law or develop a Texas business." See id. at 73. Similar to Parex Canada in Parex Resources, Barton did not "seek to launch operations in Texas or reap the benefits of the Texas economy," but was seeking to purchase a Louisiana asset. See id. at 73-74. Barton's negotiations with Harris were insufficient to form the basis for exercising personal jurisdiction because Harris "could, quite literally, have been based anywhere in the world, and [Barton] would presumably have interacted with [him] in the same way. . . ." See id. at 74-75.
Furthermore, Miles has presented no jurisdictional evidence—other than Barton's purported knowledge that Miles had some interest in the Metairie Facility under his JVA with Harris—that Harris's alleged breach of the JVA was in any way attributable to Barton. Barton was not a party to the JVA. Miles presented no evidence indicating that Harris's alleged breach of the JVA was anything other than a "unilateral" decision by Harris that was out of Barton's control. See id. at 74; see also Citrin Holdings, 305 S.W.3d at 279 ("When there are multiple defendants, the contacts of each defendant must be analyzed individually.").
In fact, Harris testified in his deposition that he never discussed Miles's interest in the Metairie Facility with Barton prior to the execution of the Sale Agreement. The Sale Agreement itself expressly warranted that "no Operating Agreement has been adopted by the member of [Attentive Hospice Metairie, LLC]" and that Harris "currently owns one hundred percent (100%) of the outstanding membership interests in the LLC." The Sale Agreement further stated that Harris, as the seller, warranted "that he is the owner of the ownership interest transferred hereby" and that he "is not obligated to obtain any consent or approval in order to convey his ownership interest in the LLC." Finally, the Sale Agreement stated, "Buyer and Seller further acknowledge that no membership or other certificates evidencing ownership in the LLC have been issued." The records of the Louisiana Secretary of State list Harris as the only member of Attentive Hospice Metairie, LLC, and Miles was not a party to the Sale Agreement. In response to this evidence, Miles has failed to present any competent jurisdictional evidence that Barton's actions in Louisiana evinced an intention to avail himself of some right or interest, or to cause some harm, in Texas. See Parex Res., 496 S.W.3d at 73 (holding that although defendant negotiated with seller that it knew had operations in Texas, defendant "did not specifically seek out a Texas seller or Texas assets, let alone attempt[] to meddle with a contract governed by Texas law or develop a Texas business").
We overrule Miles's sole issue on appeal.
Because we have held that Miles failed to establish that Barton had minimum contacts with the forum, we need not address Miles's argument that exercise of personal jurisdiction over Barton would comport with traditional notions of fair play and substantial justice. See Moncrief Oil Int'l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 154-55 (Tex. 2013).
Conclusion
We affirm the judgment of the trial court.
Evelyn V. Keyes
Justice Panel consists of Justices Jennings, Keyes, and Brown.