Al-Turki v. Taher

• Decision Date: 13 November 1997
• Docket Number: AL-TURKI,No. 11-95-253-CV,11-95-253-CV
• Parties: Abdulrahman A.et al, Appellants, v. Abdul Hadi TAHER, Appellee.
• Court: Texas Court of Appeals

Page 258

958 S.W.2d 258

Abdulrahman A. AL-TURKI et al, Appellants, v. Abdul Hadi TAHER, Appellee.

No. 11-95-253-CV.

Court of Appeals of Texas Eastland.

Nov. 13, 1997.

Rehearing Overruled Feb. 5, 1998.

Craig B. Glidden, Timothy J. Hill, Keith A. Rowley, Glidden Partners, Houston, for Appellants.

Charles R. Gregg, Robin Rankin Willis, Hutcheson & Grundy, Houston, Edwin B. Mishkin, Mark P. Friedman, Cleary Gottlieb Steen & Hamilton, New York City, for Appellee.

Before ARNOT, C.J., and WRIGHT, J., and McCLOUD, Senior Judge ^*

WRIGHT, Justice.

The issue in this case is whether the trial court properly declined to assert in personam jurisdiction over Abdul Hadi Taher, a resident and citizen of Saudi Arabia. Abdulrahman A. Al-Turki and the other Saudi Arabian plaintiffs ¹ sued Taher in Harris County, claiming that they were defrauded in the 1984 stock offering of a foreign corporation and asserting that the trial court had both general and specific jurisdiction over Taher. However, the trial court granted Taher's special appearance and dismissed the suit for want of jurisdiction. We affirm.

In their third point of error, appellants contend that there was no evidence to support various findings of fact made by the trial court and that the trial court violated appellants' right to trial by jury when it entered findings of fact in favor of Taher based upon controverted evidence. We disagree. The existence of in personam jurisdiction is a question of law; however, in order to determine whether such jurisdiction is proper, the trial court must first resolve underlying factual disputes. Conner v. ContiCarriers and Terminals, Inc., 944 S.W.2d 405, 411 (Tex.App.--Houston [14th Dist.] 1997, no writ); Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 632 (Tex.App.--Dallas 1993, writ den'd). In doing so, the trial court may draw reasonable inferences from the evidence. Hotel Partners v. KPMG Peat Marwick, supra.

In order to determine challenges to the trial court's findings of fact concerning jurisdiction, we must apply the ordinary sufficiency of the evidence standards of review. Conner v. ContiCarriers and Terminals, Inc., supra; Nikolai v. Strate, 922 S.W.2d 229, 236 (Tex.App.--Fort Worth 1996, writ den'd); Hotel Partners v. KPMG Peat Marwick, supra; NCNB Texas National Bank v. Anderson, 812 S.W.2d 441 (Tex.App.--San Antonio 1991, no writ). When a finding of fact is challenged upon the basis that there is no evidence to support it, the finding will not be disregarded on appeal if the record contains some evidence of probative force to support such a finding. When a finding of fact is challenged on the basis of factual insufficiency, the finding will not be disregarded on appeal unless it is so contrary to the overwhelming weight of the evidence as to be manifestly wrong. Conner v. ContiCarriers and Terminals, Inc., supra; Hotel Partners v. KPMG Peat Marwick, supra. We must review the challenged conclusions of law to determine their correctness. ² Nikolai v. Strate, supra; Hotel Partners v. KPMG Peat Marwick, supra.

After reviewing the record, we hold that, with one exception, there is some evidence to support the challenged findings and that the findings are not so contrary to the overwhelming weight of the evidence as to be manifestly wrong. The one exception is Finding of Fact No. 29, where the trial court found that none of Al-Turki's payments for his shares of stock in Sadi European Investment Corporation N.V. (SEIC) "were made in the United States." The record establishes that Al-Turki's payments were remitted to Saudi European Bank for the account of SEIC in care of a bank in New York. However, to the extent that this finding is erroneous, it does not constitute reversible error. TEX. R. APP. P. 44.1. The evidence showing that the payments were sent to a bank in New York is not material to the issue of whether Texas could assert personal jurisdiction. The third point of error is overruled.

In their other three points of error, appellants assert that the trial court erred in concluding that Taher negated all bases of jurisdiction and that Taher was not subject to specific or general jurisdiction. A court may exercise jurisdiction over a nonresident if such jurisdiction is authorized by the Texas long-arm statute and is consistent with the guarantees of due process. Schlobohm v. Schapiro, 784 S.W.2d 355, 356 (Tex.1990). The Texas long-arm statute expressly authorizes the exercise of jurisdiction over a nonresident "doing business" in Texas. TEX. CIV. PRAC. & REM. CODE ANN. § 17.042 (Vernon 1997); Schlobohm v. Schapiro, supra. Due process considerations are: (1) whether the nonresident has purposefully established "minimum contacts" with the forum state and, if so, (2) whether the exercise of jurisdiction comports with fair play and substantial justice. Burger King Corporation v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); Guardian Royal Exchange Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991); Potkovick v. Regional Ventures, Inc., 904 S.W.2d 846 (Tex.App.--Eastland 1995, no writ).

Minimum contacts are established when the nonresident defendant purposefully avails himself of the privilege of conducting activities within the forum state and, thus, invokes the benefits and protections of the forum state's laws. National Industrial Sand Association v. Gibson, 897 S.W.2d 769 (Tex.1995); Guardian Royal Exchange Assurance, Ltd. v. English China Clays, P.L.C., supra. Jurisdiction over a nonresident defendant may not be based solely upon random, fortuitous, or attenuated contacts with the forum or upon the unilateral activity of another party or a third person; the nonresident must take some action or engage in some conduct creating a "substantial connection" with the forum. Guardian Royal Exchange Assurance, Ltd. v. English China Clays, P.L.C., supra.

The minimum contacts analysis incorporates both specific and general jurisdiction. When specific jurisdiction is asserted, the cause of action must arise out of or relate to the nonresident defendant's purposeful contact with the forum state. When general jurisdiction is asserted, the nonresident defendant must have continuous and systematic contacts with the forum state; however, the cause of action need not relate to those contacts. National Industrial Sand Association v. Gibson, supra at 772; Guardian Royal Exchange Assurance, Ltd. v. English China Clays, P.L.C., supra at 227-228. In order for a trial court to sustain a defendant's special appearance, the defendant must have negated all bases of jurisdiction. National Industrial Sand Association v. Gibson, supra.

In the first two points of error, appellants contend that the trial court erred in denying their "motion for directed verdict," in concluding that Taher negated all bases of jurisdiction, and in concluding that Taher was not subject to specific jurisdiction in Texas. Under these points, appellants assert that Taher was subject to specific jurisdiction because he had agents who acted in Texas in furtherance of the fraud and whose actions should be imputed to Taher. Appellants allege that SEIC, a Netherlands Antilles corporation whose principal asset was a bank in Paris, France; Jamal Radwan, SEIC's chairman; and Ronald F. Reilly, a former resident of Texas who was hired by SEIC in 1983 to work in Europe, were Taher's agents in the fraudulent offering of stock in SEIC.

Based upon the evidence presented, the trial court made the following findings with respect to specific jurisdiction. Reilly and his...