Daimler-Benz Aktiengesellschaft v. Olson

• Decision Date: 15 June 2000
• Citation: 21 S.W.3d 707
• Parties: (Tex.App.-Austin 2000) Daimler-Benz Aktiengesellschaft, Appellant v. Scott Olson, Individually and as Independent Executor of the Estate of Karen L. Olson, and Vickie Olson, Appellees NO. 03-99-00114-CV
• Court: Texas Court of Appeals

Page 707

21 S.W.3d 707 (Tex.App.-Austin 2000)

Daimler-Benz Aktiengesellschaft, Appellant v. Scott Olson, Individually and as Independent Executor of the Estate of Karen L. Olson, and Vickie Olson, Appellees

NO. 03-99-00114-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

June 15, 2000

FROM THE DISTRICT COURT OF BELL COUNTY, 169TH JUDICIAL DISTRICT NO. 158,786-C, HONORABLE RICK MORRIS, JUDGE PRESIDING

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Before Justices Jones, Kidd and B. A. Smith

Bea Ann Smith, Justice

The opinion and judgment issued herein on March 23, 2000 are withdrawn, and the following opinion is substituted in lieu of the earlier one.

In this appeal, we consider the contacts with Texas of a foreign parent corporation that designs and manufactures cars abroad, but has established a North American subsidiary to import and distribute those cars in the United States, including Texas. Appellant Daimler-Benz Aktiengesellschaft (Daimler-Benz) brings an interlocutory appeal from the district court's order overruling its objection to personal jurisdiction. See Tex. R. Civ. P. 120a. The suit from which this appeal arises is a products liability action brought against Daimler-Benz by appellees Scott Olson, the son of the decedent, Karen Olson, and executor of her estate, and Vickie Olson, Karen's daughter. We will affirm the district court's order.

FACTUAL AND PROCEDURAL BACKGROUND

Alleging that the Mercedes-Benz car Karen Olson was driving caught fire shortly after a van collided with it, causing Karen's death, the Olsons sued Daimler-Benz and the owner of the van, Central Produce Company of Temple, Texas. The accident occurred on April 3, 1995, in Temple, Texas. Scott and Vickie are Texas residents; the Mercedes-Benz Karen owned before her death was registered in Texas. The Olsons claimed that Daimler-Benz defectively designed and manufactured Karen's car, and that the defects caused her death. Daimler-Benz made a special appearance to challenge its amenability to suit in Texas. The district court overruled Daimler-Benz's objection, finding that jurisdiction over Daimler-Benz in Texas was proper.

Daimler-Benz is a German corporation with its principal place of business in Stuttgart, Germany. As shown in its annual reports, Daimler-Benz is a holding company with four corporate units: Mercedes-Benz, Daimler-Benz Industrie, Daimler-Benz Aerospace, and Daimler-Benz InterServices. These units, which comprehend all subsidiary corporations of Daimler-Benz, form the Daimler-Benz Group. The Mercedes-Benz corporate unit accounts for a preponderant share of Daimler-Benz's profit; in 1994, the Daimler-Benz Group earned profits of 0.9 billion deutsche marks, while the Mercedes-Benz unit returned 1.8 billion deutsche marks, its earnings being offset by losses in other corporate units.¹ The Mercedes-Benz unit contains both a passenger car division and a commercial vehicle division. In 1994, the Mercedes-Benz unit sold 592,400 passenger cars worldwide, 73,000 of these in the United States.

In 1995, the Daimler-Benz Group consisted of Daimler-Benz and its 319 domestic and foreign subsidiaries; in 1994, Daimler-Benz's subsidiaries numbered 357. Within the Mercedes-Benz corporate unit, subsidiaries apparently exist for every western European country, as well as for Brazil, Argentina, Nigeria, South Africa, Turkey, Iran, India, Japan, Indonesia, and Australia. In addition to establishing Mercedes-Benz of North America, Inc., Daimler-Benz has established Mercedes-Benz Canada, Inc., and Mercedes-Benz Mexico, S.A. de C.V.

Mercedes-Benz of North America, Inc. (MBNA) is the sole importer and distributor in the United States of Mercedes-Benz cars and parts. MBNA, a Delaware corporation with its principal place of business in Montvale, New Jersey, is a direct wholly owned subsidiary of Daimler-Benz North America Corporation (DBNAC). DBNAC, also a Delaware corporation but with its principal place of business in New York City, is a direct, wholly owned subsidiary of Daimler-Benz.²

DISCUSSION

In two issues on appeal, Daimler-Benz contests the court's decision that Daimler-Benz is subject to the jurisdiction of Texas courts. A Texas court may exercise jurisdiction over a nonresident defendant if the Texas long-arm statute authorizes the exercise of jurisdiction and the exercise of jurisdiction comports with due process. Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991); see Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (West 1997 & Supp. 2000). The broad language of the long-arm statute permits an expansive reach, limited only by the federal constitutional requirements of due process. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990). As a result, we consider only whether it is consistent with federal due process for Texas courts to assert personal jurisdiction over Daimler-Benz. Guardian Royal, 815 S.W.2d at 226.

The federal due process clause protects a person's liberty interest in not being subject to binding judgments of a forum with which that person has established no meaningful contacts, ties, or relations. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985) (citing International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). Under the federal constitutional test of due process, a state may assert personal jurisdiction over a nonresident defendant only if the defendant has purposefully established minimum contacts with the forum state and the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Id. at 476. The ultimate test of minimum contacts is whether the defendant purposefully availed itself of the privilege of conducting activities in Texas, thereby invoking the benefit and protection of Texas laws. Schlobohm, 784 S.W.2d at 357-58. This requirement ensures that a nonresident defendant will be haled into court only as a result of its intentional activities, so that it is reasonable for the nonresident defendant to expect the call of a Texas court. Guardian Royal, 815 S.W.2d at 226; Schlobohm, 784 S.W.2d at 357-58.

The minimum contacts analysis has been refined into two types of jurisdiction--general and specific. Specific jurisdiction exists when the cause of action arises out of or relates to the nonresident defendant's contacts with the forum state. Guardian Royal, 815 S.W.2d at 230. The defendant's activities must have been purposefully directed toward the forum state. Id. at 228. Under specific jurisdiction, the minimum contacts analysis focuses on the relationship among the defendant, the forum, and the litigation. Id.

General jurisdiction exists when the defendant's contacts with the forum state are continuous and systematic, even if the cause of action does not arise from or relate to activities conducted within Texas. Id. For general jurisdiction, the minimum contacts analysis is more demanding, requiring a showing of substantial activities within the forum state. Schlobohm, 784 S.W.2d at 357.

The existence of personal jurisdiction is a question of law, but proper exercise of that jurisdiction must sometimes be preceded by the resolution of underlying factual disputes. We determine the appropriateness of the trial court's resolution of those disputes by an ordinary sufficiency of the evidence review based on the entire record. Conner v. ContiCarriers & Terminals, Inc., 944 S.W.2d 405, 411 (Tex. App.--Houston [14th Dist.] 1997, no writ). If the trial court's order is based on undisputed or otherwise established facts, we conduct a de novo review of the order. Id. A defendant who challenges a court's exercise of personal jurisdiction through a special appearance carries the burden of negating all bases of personal jurisdiction. Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985); Siskind v. Villa Found. for Educ., Inc., 642 S.W.2d 434, 438 (Tex. 1982); Nikolai v. Strate, 922 S.W.2d 229, 236 (Tex. App.--Fort Worth 1996, writ denied); Hayes v. Wissel, 882 S.W.2d 97, 99 (Tex. App.--Fort Worth 1994, no writ).

When a trial court overrules a special appearance, the defendant should request findings of fact under Texas Rule of Civil Procedure 296. Runnells v. Firestone, 746 S.W.2d 845, 849 (Tex. App.--Houston [14th Dist.]), writ denied per curiam, 760 S.W.2d 240 (Tex. 1988). Because the trial court made no findings in this case, all facts necessary to support its judgment are implied. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990); In re W.E.R., 669 S.W.2d 716, 716-17 (Tex. 1984); Runnells, 746 S.W.2d at 848. When a complete reporter's record exists, however, these implied findings are not conclusive and an appellant may challenge the sufficiency of the evidence to support them. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989). When such points are raised, the standard of review to be applied is the same as that to be applied in the review of jury findings or a trial court's findings of fact. Id.

Thus, we will set aside a finding of the trial court only if the finding is so against the great weight and preponderance of the evidence as to be manifestly erroneous or unjust. In re King's Estate, 244 S.W.2d 660, 661 (Tex. 1951); Runnells, 746 S.W.2d at 849. In reviewing such a point of error, we must consider and weigh all of the evidence, both the evidence that tends to prove the existence of a vital fact as well as evidence that tends to disprove its existence. Ames v. Ames, 776 S.W.2d 154, 158-59 (Tex. 1989); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). So considering the evidence, if a finding is so contrary to the great weight and preponderance of the evidence as to be manifestly unjust, the finding should be set aside, regardless whether some evidence supports it. Watson v. Prewitt, 320 S.W.2d 815, 816 (Tex. 1959); King's Estate, 244 S.W.2d at 661.

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