Beechem v. Pippin

• Decision Date: 20 February 1985
• Docket Number: No. 14248,14248
• Citation: 686 S.W.2d 356
• Parties: Charles BEECHEM, Appellant, v. C.M. PIPPIN, Individually and Sani-Agri, Inc., Appellees.
• Court: Texas Court of Appeals

Page 356

686 S.W.2d 356

Charles BEECHEM, Appellant, v. C.M. PIPPIN, Individually and Sani-Agri, Inc., Appellees.

No. 14248.

Court of Appeals of Texas,

Austin.

Feb. 20, 1985.

Randall C. Simmon, Cuba, Simmon & Mayfield, Temple, for appellant.

Wesley N. Harris, Kelly, Appleman, Hart & Hallman, Fort Worth, for appellees.

Before POWERS, KEITH ^* and GAMMAGE, JJ.

POWERS, Justice.

Appellant Charles Beechem appeals from a trial court order dismissing, for want of jurisdiction, his suit against appellees C.M. Pippin and Sani-Agri, Inc. We will reverse the order and remand the cause for further proceedings.

The operative facts are not disputed. Beechem is a resident of Texas; Pippin and Sani-Agri are residents of Georgia. Beechem, as part of his business, occasionally leases or sells "Terragator" sludge applicators, sometimes advertising in a nationally-circulated magazine devoted to waste-water treatment. Some of the rental business he obtains is attributable to knowledge passed on to potential customers by word of mouth.

Beechem testified that he entered into a lease contract with appellees as the result of two telephone calls by Pippin to Beechem. The agreement was later reduced to writing. Payments were made by mail to Beechem's place of business, and appellees arranged for an independent carrier to haul the machine to and from its location in Bell County. Appellees also had their insurance agent contact Beechem in Texas to arrange for insurance on the equipment. A dispute arose and appellant sued appellees in the district court of Bell County, Texas. Appellees moved for dismissal for want of in personam jurisdiction. The trial court granted their motion.

The trial court filed findings of fact and conclusions of law. Findings of fact number three and four hold that neither Pippin nor Sani-Agri "purposefully did any act or consummated any transaction in the State of Texas from which a cause of action pleaded by Plaintiff arose." Beechem contends these findings are against the great weight and preponderance of the evidence, and that the trial court erred as a matter of law in deciding that it had no jurisdiction over appellees. We agree. However, the impression weighs heavily on us that the ablest judge, reviewing the somewhat confused state of the law concerning the exercise of in personam jurisdiction over nonresident defendants, might come to the same conclusion as the able trial judge here. We turn to a discussion of the relevant holdings in order to assemble the proper principle as best we may.

THE TEXAS "LONG-ARM" STATUTE

It is by now firmly established that the Texas Long-Arm Statute, Tex.Rev.Civ.Stat.Ann. art. 2031b (Supp.1985), "reaches as far as the federal constitutional requirements of due process will permit," at least insofar as acts which may constitute "doing business" are concerned. U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977); Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 491 (5th Cir.1974); Jetco Electronic Indus., Inc. v. Gardiner, 473 F.2d 1228, 1234 (5th Cir.1973); Reich v. Signal Oil & Gas Co., 409 F.Supp. 846, 849 (S.D.Tex.1974), aff'd without opinion, 530 F.2d 974 (5th Cir.1976); Reul v. Sahara Hotel, 372 F.Supp. 995, 997 (S.D.Tex.1974); N.K. Parrish, Inc. v. Schrimscher, 516 S.W.2d 956, 958 (Tex.Civ.App.1974, no writ). See also Hall v. Helicopteros Nacionales de Colombia, 638 S.W.2d 870 (Tex.1982), rev'd on other grounds, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

Hall would also seem to indicate that a "nexus" between the contacts and the cause of action is not an absolute requirement. In that case the Supreme Court of Texas stated that a relationship between the defendant's contacts with the State and the cause of action "is unnecessary when the nonresident defendants [sic] presence in the forum through numerous contacts is of such nature ... so as to satisfy the demands of the ultimate test of due process." However, we need not reach that issue because of our holding below that the cause pleaded here did arise from the contacts of appellees with the State.

We therefore are not as concerned, perhaps surprisingly, with the literal wording of the long-arm statute as we are with the pertinent judicial interpretations of due process. Siskind v. Villa Foundation For Educ., Inc., 642 S.W.2d 434, at 436 (Tex.1982). See also Mowry, The Texas Long-Arm Statute, Article 2031b: A New Process is Due, 30 Sw.L.J. 747, at 755 (1976). We are thus spared, in the words of the Texas Supreme Court, the task of engaging "in technical and abstruse attempts to consistently define 'doing business.' " U-Anchor Advertising, Inc. v. Burt, supra, at 762. Henceforth, we need only engage in such attempts consistently to define "due process" as it relates to the exercise of in personam jurisdiction over nonresident defendants.

THE LIMITS OF DUE PROCESS SET BY JUDICIAL DECISIONS

"Traditional fairness" is the overriding consideration in determining when the exercise of in personam jurisdiction over a nonresident defendant violates the constitutional guaranty of due process of law. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278 (1940). This rather elusive and generalized standard is not very helpful, and courts have devised the somewhat more concrete "minimum contacts" test. Id.

A measurement of the quality and quantity of contacts is helpful as an indication of the extent to which a party's activities have had intrastate consequences, Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), and the degree to which a party has availed itself of the benefits and protections of the forum state. Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). Multiple contacts with the state increase the likelihood that a litigant could foresee the possibility of one day having to defend his conduct there. Worldwide Volkswagen Corp v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Moreover, the quantity and quality of contacts are indicators of the degree to which citizens of that state were put at risk by defendant's actions. There is a point at which the presence of all or a combination of these factors makes it "fair" to hold a person answerable in the courts of the state with which he has had these minimum contacts. Put another way, multiple state contacts at some point create a regulatory interest on the part of the state as to activities that touch and concern it. Brilmayer, How Contacts Count: Due Process Limitations on State Court Jurisdiction, 1980 S.Ct.Rev. 77, 87.

These factors are obviously relevant even when the subject of the litigation is unrelated to the contacts. The Supreme Court of the United States has reserved the question of the nature and number of contacts necessary to sustain in personam jurisdiction when the suit has arisen from or is related to the contacts. Helicopteros Nacionales de Colombia, S.A. v. Hall, --- U.S. ----, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). It admittedly is difficult to decide when a cause of action "arises from" or is related to the contacts with the State, not unlike the problems of actual and proximate causation in the law of torts. Moreover, it is difficult to define precisely what is meant by a "contact" with a state. Nevertheless, we believe there is a more compelling case to be made for the exercise of in personam jurisdiction in those instances where a relationship exists between the contacts with the forum state and the cause of action brought in the courts of that state. Even in these circumstances, however, there must be some minimal level of contacts before in personam jurisdiction is asserted. U-Anchor Advertising, Inc. v. Burt, supra.

Once it is decided that the defendant's contacts with the forum state make it "fair" to exercise jurisdiction over him there are apparently other considerations which bear on whether suit should be maintained there or in some other state having jurisdiction over the parties. With respect to certain precedents seemingly out of harmony with current doctrine, it has been suggested as a rationalizing principle that the relative convenience of the parties should govern the choice of forum in certain cases. von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv.L.Rev. 1136, 1167-1169 (1966). See also Worldwide Volkswagen Corp. v. Woodson, supra, 444 U.S. at 292, 100 S.Ct. at 564. By convenience we mean the relative burden on each party of defending a suit in a foreign forum. It might be said to encompass as well certain litigational considerations, such as the presence of evidence and witnesses in a State, and the presence of assets that might need protection from concealment and dissipation. von Mehren & Trautman, supra, at 1141, 1167. All of these considerations are germane to a determination of which is the most convenient state in which to try a suit.

However, convenience to litigate should not, we think, be confused with jurisdiction to do so. Convenience alone cannot confer jurisdiction on a court in a forum with which a plaintiff has no contacts, Hanson v. Denckla, supra, 357 U.S. at 254, 78 S.Ct. at 1240, Worldwide Volkswagen Corp. v. Woodson, supra, 444 U.S. at 294, 100 S.Ct. at 565, and seems to be more in the nature of a venue question. (One may, after all, imagine situations where it might be more "convenient" to try a case in a forum with which neither party had previous contacts. Moreover, it seems very likely that cases could arise where it could be more inconvenient to try a suit on the far side of a state than to travel a few miles across the nearest border into an adjacent state for trial.)

While it is true that convenience alone does not confer jurisdiction, it is sometimes the case that severe inconvenience to a party will require that the cause be transferred to another court having jurisdiction of the...