2007 EAST MEADOWS v. RCM PHOENIX PARTNERS
| Decision Date | 18 May 2010 |
| Docket Number | No. 05-08-00987-CV.,05-08-00987-CV. |
| Parties | 2007 EAST MEADOWS, L.P., Appellant, v. RCM PHOENIX PARTNERS, L.L.C., Appellee. |
| Court | Texas Court of Appeals |
Kenneth B. Chaiken, Chaiken & Chaiken, P.C., Dallas, TX, for Appellant.
John W. Slates, Gardere Wynne Sewell, LLP, Dallas, TX, for Appellee.
Before Justices MORRIS, O'NEILL and FILLMORE.
Appellant 2007 East Meadows, L.P. filed suit in Texas against appellee RCM Phoenix Partners, L.L.C. RCM Phoenix filed a special appearance contesting the trial court's jurisdiction. East Meadows appeals the trial court's order granting the special appearance. We affirm the trial court's order.
This lawsuit arises out of a Purchase and Sale Agreement (Agreement) by and between RCM Phoenix and Eureka Holdings Acquisitions, L.P. for transfer of ownership of the Phoenix Apartments located in Indianapolis, Indiana. Seller RCM Phoenix is a Connecticut limited liability company having its principal office and place of business in Connecticut. Purchaser Eureka Holdings is a Texas entity. The First Amendment to the Agreement references assignment of Eureka Holdings' rights under the Agreement to East Meadows. East Meadows is an Indiana limited partnership with its principal place of business in Dallas, Texas.
Sale of the Phoenix Apartments property was not completed. East Meadows filed suit against RCM Phoenix in Dallas, Texas. The claims raised by East Meadows were for declaratory judgment, breach of contract, specific performance, common law and statutory fraud, and constructive trust.
RCM Phoenix filed a special appearance. Following an evidentiary hearing, the trial court granted RCM Phoenix's special appearance and dismissed East Meadows' lawsuit for lack of personal jurisdiction. The trial court did not file findings of fact or conclusions of law. East Meadows filed this appeal.
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. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.2007); BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002). When, as here, the trial court does not file findings of fact and conclusions of law in support of its special appearance ruling, we infer all facts necessary to support the judgment and supported by the evidence. Moki Mac, 221 S.W.3d at 574 (citing BMC Software, 83 S.W.3d at 795).
Texas courts may assert in personam jurisdiction over a nonresident if (1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction comports with federal and state constitutional due process guarantees. Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex.2009). The long-arm statute's broad language allows Texas courts to "reach as far as the federal constitutional requirements of due process will allow." Moki Mac, 221 S.W.3d at 575 (quoting Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991)). Under constitutional due process analysis, personal jurisdiction is achieved "when the nonresident defendant 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 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). The purpose of minimum contacts analysis is to protect a nonresident defendant from being haled into court when its relationship with the forum state is too attenuated to support jurisdiction. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex.2002). "Significant contacts suggest that the defendant has taken advantage of forum-related benefits, while minor ones imply that the forum itself was beside the point." Spir Star AG v. Kimich, ___ S.W.3d ___, ___ (Tex.2010). Only if minimum contacts are established does the court consider the second prong of the constitutional due process analysis-whether maintenance of the action offends traditional notions of fair play and substantial justice. See Clark v. Noyes, 871 S.W.2d 508, 520 (Tex.App.-Dallas 1994, no pet.).
A defendant's contacts with a forum can give rise to either specific or general jurisdiction. BMC Software, 83 S.W.3d at 795-96. On appeal, East Meadows asserts specific jurisdiction as the basis for personal jurisdiction over RCM Phoenix. Specific jurisdiction is dispute-specific and it attaches when the plaintiff's cause of action arises out of or relates to the nonresident defendant's contacts with the forum state. Conner v. ContiCarriers & Terminals, Inc., 944 S.W.2d 405, 410 (Tex.App.-Houston 14th Dist. 1997, no writ). In a specific jurisdiction analysis, we focus on the relationship among the defendant, the forum, and the litigation. Retamco, 278 S.W.3d at 338. Specific jurisdiction arises when (1) the defendant purposefully avails itself of the privilege of conducting activities in the forum state, and (2) the cause of action arises from or is related to those contacts or activities. Id. In determining whether a defendant has purposefully availed itself of a forum, we consider three factors. First, only the defendant's contacts with the forum are relevant, not the unilateral activity of another party or third person. Id. at 339. Second, the contacts 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. What is important is the quality and nature of the defendant's contacts with the forum state rather than their number. Id.
The plaintiff bears the initial burden to plead sufficient allegations to bring a nonresident defendant within the reach of the Texas long-arm statute. Id. at 338; BMC Software, 83 S.W.3d at 793. Once the plaintiff has pleaded sufficient jurisdictional allegations, the defendant filing a special appearance bears the burden of negating all bases of jurisdiction alleged by the plaintiff. BMC Software, 83 S.W.3d at 793; Capital Tech. Info. Servs., Inc. v. Arias & Arias Consultores, 270 S.W.3d 741, 748 (Tex.App.-Dallas 2008, pet. denied) (en banc). "Because the plaintiff defines the scope and nature of the lawsuit, the defendant's corresponding burden to negate jurisdiction is tied to the allegations in the plaintiff's pleading." Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex.2010). The defendant can discharge its burden to negate those allegations on either a factual or legal basis:
Factually, the defendant can present evidence that it has no contacts with Texas, effectively disproving the plaintiff's allegations. The plaintiff can then respond with its own evidence that affirms its allegations, and it risks dismissal of its lawsuit if it cannot present the trial court with evidence establishing personal jurisdiction. Legally, the defendant can show 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.
East Meadows satisfied its initial burden, pleading allegations of breach of contract and fraud by RCM Phoenix that were sufficient to invoke jurisdiction under the Texas long-arm statute. See Marchand, 83 S.W.3d at 793. However, in this case, merely pleading was not enough. When challenged by RCM Phoenix, East Meadows also had to present evidence that RCM Phoenix's relevant acts (i.e., those connected to East Meadows' claims) occurred, at least in part, in Texas. See Gen. Interior Constr., 301 S.W.3d at 660-61.
RCM Phoenix supported its special appearance, and sought to negate bases of jurisdiction alleged by East Meadows, with the affidavit of its manager. The affidavit attests: The Agreement does not require RCM Phoenix to perform any of its obligations in Texas; no employee or representative of RCM Phoenix traveled to Texas in connection with the negotiation or execution of the Agreement; RCM Phoenix did not make any express representations, warranties, or covenants to Eureka or East Meadows in Texas; RCM Phoenix is a limited liability company with its principal place of business in Connecticut; and, RCM Phoenix is not registered to do business in Texas, has no office or place of business in Texas, has no officers or employees in Texas, is not required to maintain and does not maintain a registered agent for service of process in Texas, has no bank accounts in Texas, does not own real or personal property in Texas, does not design, manufacture, or sell products or services in Texas, does not market or advertise in Texas, does not maintain an interactive website that would allow Texas residents to place orders via the Internet for products or services to be delivered, in whole or in part, in Texas, and has not purposefully availed itself of the benefits and protections of Texas law.
In support of its contention that specific jurisdiction exists over RCM Phoenix, East Meadows asserts RCM Phoenix transacted business in Texas when it marketed its property to a Texas domestic entity; entered into a contract with East Meadows which is performable, at least in part, in Texas; performed some required contractual obligations in Texas; and, committed torts in Texas. Therefore, we consider whether RCM Phoenix, through its conduct, triggered specific jurisdiction.
East Meadows first asserts that RCM Phoenix triggered specific jurisdiction because it marketed its property to a...
To continue reading
Request your trial