LaBlanc v. Kyle

Decision Date12 September 2000
Docket NumberNo. 06-00-00036-CV,06-00-00036-CV
Citation28 S.W.3d 99
Parties(Tex.App.-Texarkana 2000) E.L.M. LEBLANC, Appellant V. LARRY KYLE, Appellee
CourtTexas Court of Appeals

On Appeal from the 62nd Judicial District Court Lamar County, Texas Trial Court No. 66440

Before Cornelius, C.J., Grant and Ross, JJ.

O P I N I O N

Opinion by Justice Grant

This is an accelerated appeal from the trial court's denial of a special appearance. Larry Kyle sued E.L.M. LeBlanc (LeBlanc), Controlled Energy Corporation (Controlled Energy), and Cooper Butane Company (Cooper Butane) alleging that a water heater manufactured by LeBlanc was defective and caused a fire at his home. In his petition, Kyle alleged that he purchased the water heater from Cooper Butane, a Texas company, who received it from Controlled Energy, a Vermont distributor, who in turn received it from LeBlanc, a French manufacturer and distributor.

LeBlanc filed a special appearance in which it asserted that the court did not have jurisdiction over it because (1) it is not a Texas corporation and is not licensed to do business in Texas; (2) it does not engage in and has never engaged in business in Texas; (3) it does not maintain a place of business or have employees or other agents in Texas; and (4) it has not undertaken any act or transaction constituting minimum contacts with Texas, or otherwise acted in a way that would make assumption of jurisdiction comport with the requirements of due process. In support of its special appearance, LeBlanc filed the affidavit of its director general, which detailed the limited extent of its contacts with Texas.

In response to LeBlanc's special appearance, Controlled Energy filed the affidavit of John Norton, its vice president and chief financial officer. Norton's affidavit states that LeBlanc and Controlled Energy entered into a distribution contract in which LeBlanc's stated purpose was to "sell its products . . . in the Territory [i.e., the fifty states and the District of Columbia] through the intermediary of a qualified distributor having an organization of sales well-established in the Territory . . . ." The affidavit further states that, under the contract, LeBlanc was obligated to buy product liability insurance for the product sold and to obtain "AGA Lab" approval of its product. It also states that Controlled Energy sold 452 of LeBlanc's water heaters to individuals and dealers in Texas between 1994 and 1999.

Also in response to LeBlanc's special appearance, Cooper Butane filed the affidavit of its owner and president, Frank Miller, which states that Cooper Butane purchased LeBlanc water heaters from L.A. Klein in Dallas. (The record is otherwise silent as to who L.A. Klein is.) Miller also states that, over a fifteen-year period, Cooper Butane has purchased approximately thirty LeBlanc water heaters for resale to its customers in Texas. Miller further states that Cooper Butane handles technical assistance, troubleshooting, and warranty claims through Controlled Energy and that it has made ten such warranty claims.

In a letter to the parties, the trial court denied the special appearance, citing the contract between LeBlanc and Controlled Energy. On appeal LeBlanc contends that the trial court erred in assuming personal jurisdiction. We affirm the judgment of the trial court.

Standard and Scope of Review

A nonresident defendant must negate all bases of personal jurisdiction to prevail in a special appearance.1 CSR Ltd. v. Link, 925 S.W.2d 591, 596 (Tex. 1996). Whether a court can assume personal jurisdiction over a nonresident defendant is a question of law that we review de novo. Hotel Partners v. Craig, 993 S.W.2d 116, 120 (Tex. App.Dallas 1994, writ denied). We review the trial court's resolution of any underlying factual questions for factual sufficiency of the evidence.2 Id. We will affirm if we can uphold the trial court's order on any legal theory finding support in the evidence. See Happy Indus. Corp. v. American Specialties, Inc., 983 S.W.2d 844, 846 (Tex. App.Corpus Christi 1998, pet. dism'd w.o.j.); see also Cartlidge v. Hernandez, 9 S.W.3d 341, 345 (Tex. App.Houston [14th Dist.] 1999, no pet. h.); In re Estate of Judd, 8 S.W.3d 436, 440 (Tex. App.El Paso 1999, no pet. h.); Transportacion Especial Autorizada, S.A. de C.V. v. Seguros Comercial America, S.A. de C.V., 978 S.W.2d 716, 719 (Tex. App.Austin 1998, no pet. h.); Fish v. Tandy Corp., 948 S.W.2d 886, 892 (Tex. App.Fort Worth 1997, writ denied); Clark v. Noyes, 871 S.W.2d 508, 511-12 (Tex. App.Dallas 1994, no writ); NCNB Texas Nat'l Bank v. Anderson, 812 S.W.2d 441, 445 (Tex. App.San Antonio 1991, no writ).

Where, as here, a reporter's record is available on appeal, the parties may challenge these implied findings by factual sufficiency and legal sufficiency points in the same way they could challenge jury findings or a trial court's findings of fact. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989). Where such evidence sufficiency 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.

Legal Standard Governing Personal Jurisdiction

A court may assert personal jurisdiction over a nonresident defendant only if the requirements of both the Due Process Clause of the Fourteenth Amendment to the United States Constitution and the Texas long-arm statute are satisfied. U.S. Const. amend. XIV, § 1; Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (Vernon 1997); Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 80 L.Ed.2d 404, 410 (1984); CSR, 925 S.W.2d at 594. The Texas Supreme Court has consistently interpreted the long-arm statute as reaching "as far as the federal constitutional requirements of due process will allow." Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991).

Under the Due Process Clause, a defendant must have certain minimum contacts with the forum such that maintaining suit there will not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95, 102 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278, 285 (1940)). A nonresident defendant that has purposefully availed itself of the privileges and benefits of conducting business in the foreign jurisdiction has sufficient contacts with the forum to confer personal jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76, 105 S.Ct. 2174, 85 L.Ed.2d 528, 542-43 (1985). However, a defendant should not be subject to the jurisdiction of a foreign court based on "random," "fortuitous," or "attenuated" contacts. Id.

The Texas Supreme Court has articulated a three-prong formula to ensure compliance with the federal standard: (1) there must be a "substantial connection" between the nonresident defendant and Texas arising from action or conduct of the nonresident defendant purposefully directed toward Texas; (2) the cause of action must arise out of or relate to the defendant's contacts with Texas (specific jurisdiction), or if not, the defendant's contacts with Texas must be continuing and systematic (general jurisdiction); and (3) assumption of jurisdiction must not offend traditional notions of fair play and substantial justice. In re S.A.V., 837 S.W.2d 80, 85 (Tex. 1992). Neither the Texas formula nor any other test for personal jurisdiction should be applied mechanically. Schlobohm v. Schapiro, 784 S.W.2d 355 (Tex. 1990).

In determining the latter prong of the Texas formulation, due consideration should be given to (1) the burden on the defendant, (2) the interests of the forum state in adjudicating the dispute, (3) the plaintiff's interest in obtaining convenient and effective relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several states in furthering fundamental substantive social policies. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490, 498 (1980); Guardian Royal, 815 S.W.2d at 228. When an "international dispute" is involved, courts should also consider: (6) the unique burdens placed on a defendant who must defend itself in a foreign legal system, and (7) the procedural and substantive policies of other nations whose interests are affected, as well as the federal government's interest in its foreign relations policies. Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 114-15, 107 S.Ct. 1026, 94 L.Ed.2d 92, 105-06 (1987); Guardian Royal, 815 S.W.2d at 229.

Analysis

LeBlanc cites CSR, 925 S.W.2d at 591 and CMMC v. Salinas, 929 S.W.2d 435 (Tex. 1996), in contending that the trial court had no basis to assert either general or specific jurisdiction. In CSR, the Texas Supreme Court issued a writ of mandamus to prevent a trial court from asserting jurisdiction over an Australian company that sold 363 tons of raw asbestos to Johns-Manville, a United States company, which shipped the asbestos to Houston. CSR, 925 S.W.2d at 593-94.

The court held that CSR did not have continuous and systematic contacts with Texas sufficient to support general jurisdiction. Id. at 595. CSR had no offices, employees, or bank accounts in Texas. Id. It had not solicited business in or sent correspondence to Texas. Id. It had never owned property, paid taxes, or entered into a contract in Texas. Id.

The court also held that the trial court did not have specific jurisdiction over CSR. Id. at 595-96. The plaintiffs had argued that CSR knew that Johns-Manville had a plant in Texas and could have foreseen that the asbestos would be used in Texas. Id. at 595. The Texas Supreme Court held, however, that foreseeability, standing...

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