Bruno's Inc. v. Arty Imports, Inc., 05-03-00271-CV.

Citation119 S.W.3d 893
Decision Date12 November 2003
Docket NumberNo. 05-03-00271-CV.,05-03-00271-CV.
PartiesBRUNO'S INC., d/b/a/ Food World, Appellant, v. ARTY IMPORTS, INC., Appellee.
CourtCourt of Appeals of Texas

R. Douglas Scott, Cantey & Hanger, L.L.P., and Jon Gunnar Petersen, Dallas, for Appellant.

Philip Maurice Green, Jordan, Lewis & Warren, P.L.L.C., for Appellee.

Before Justices JAMES, FRANCIS, and LANG.

OPINION

Opinion By Justice LANG.

Appellee, Arty Imports, Inc. sued appellant Bruno's, Inc. alleging respondeat superior liability for a fraudulent scheme and other tortious acts of Bruno's employee. Bruno's is an Alabama corporation which formerly operated grocery stores in Florida, Alabama, Georgia, and Mississippi. Bruno's filed a special appearance and claims the trial court erred in overruling it.

Bruno's asserts three issues on appeal: (1) the trial court erred in not looking beyond appellee's pleadings to resolve questions of fact in determining whether it had jurisdiction over Bruno's; (2) the trial court erred in finding a respondeat superior relationship between Bruno's and its former employee, co-defendant Mario Bultron Cheng (Bultron),1 because the appellee failed to make a prima facie showing of two of the three elements of respondeat superior (i.e. that the actions of Bultron were (a) "in the furtherance of the employer's business," and (b) "for the accomplishment of the object for which the employee was employed"); and (3) the trial court erred in failing to grant Bruno's special appearance. The underlying premise of appellant's points on appeal, and the framework in which we must address these issues, is a challenge of the trial court's denial of the special appearance on the basis of (1) legal and factual insufficiency, and (2) a claim of error in the legal conclusion of the trial court drawn from the facts. We decide appellant's issues adversely to it and affirm the court's denial of the special appearance.

BACKGROUND

Arty is a Texas corporation. Arty employed a bookkeeper named Castaneda who allegedly conspired with Bultron, an employee of Bruno's, to defraud Arty of thousands of dollars. Bultron was employed as a manager of Food World in Pensacola, Florida, one of Bruno's stores. According to Arty, Castaneda wrote unauthorized checks in Texas on Arty's bank accounts and sent the checks to Bultron in Florida. Most of the checks were made payable to Bultron. Bultron endorsed the checks payable to him, forged endorsements on the checks that were not payable to him, and cashed them all at the Food World in Pensacola, Florida. Arty alleged that Bultron had the authority to cash checks in his capacity as manager of Food World, and that when he cashed Arty's unauthorized checks he was acting within the course and scope of his employment. Bruno's is alleged to be liable for the acts of Bultron under the doctrine of respondeat superior.

In Plaintiff's Fifth Amended Petition, Arty claims in general terms that Bruno's has sufficient minimum contacts with Texas to meet jurisdictional requirements. It is Arty's position that Texas courts have specific personal jurisdiction over Bruno's, rather than general jurisdiction. The jurisdictional acts Arty claims to have pled are the same as the allegations that describe Bruno's liability, i.e., that Bultron, an employee of Bruno's, committed torts in part in the state of Texas within the course and scope of his employment for which Bruno's is liable under the legal theory of respondeat superior.

At the time of the special appearance hearing in the case before us, the trial court had before it: (1) the parties' pleadings; (2) an affidavit from the Assistant General Counsel for Bruno's regarding the corporate status of Bruno's and the nature and location of its business; (3) affidavits by the president of Arty and by the custodian of its records regarding the fraudulent checks; (4) copies of the fraudulent checks; (5) a copy of Bultron's W-2 form for 1998; and (6) an affidavit by Bultron in which he swore that cashing checks was part of his employment responsibility as a manager of Bruno's Food World grocery store. No evidence at all was offered by Bruno's to dispute Arty's claim of Bultron's actions being within the course and scope of his employment by Bruno's or respondeat superior. Bruno's offered proof only as to its nonresidency. Bruno's did not address the sufficiency of Bultron's minimum contacts with the State of Texas either before the trial court or in the briefs presented to us. However, at argument upon submission, Bruno's conceded the court could exercise jurisdiction over Bultron.

In its special appearance Bruno's claimed the trial court did not have personal jurisdiction over it since it was not a Texas resident and it conducted no business in Texas. After a hearing, the trial court denied Bruno's special appearance and Bruno's request for findings of fact and conclusions of law. This appeal followed.

DUE PROCESS AND PERSONAL JURISDICTION

Texas courts may exercise jurisdiction over a nonresident defendant when (1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction is consistent with federal and state constitutional guarantees of due process. See TEX. CIV. PRAC. & REM.CODE ANN. §§ 17.041-17.069 (Vernon 1997 & Supp.2003); Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002), cert. denied, 537 U.S. 1191, 123 S.Ct. 1271, 154 L.Ed.2d 1025 (2003). The Texas long-arm statute authorizes the exercise of jurisdiction over a nonresident who does business in Texas. Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (Vernon 1997). A nonresident "does business" in Texas for the purposes of the Texas long-arm statute if he "commits a tort in whole or in part in this state." Id.; see Arterbury v. Am. Bank & Trust Co., 553 S.W.2d 943, 946 (Tex.Civ.App.-Texarkana 1977, no writ). Because the language of the long-arm statute is broad, its requirements are met so long as the exercise of personal jurisdiction comports with the limitations of federal due process. Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991). Personal jurisdiction over nonresident defendants is constitutional when two conditions are met: (1) the defendant has established minimum contacts with the forum state; and (2) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Id.

A defendant's contacts with the forum state can give rise to either general or specific jurisdiction. CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex.1996). Specific jurisdiction arises if the defendant's alleged liability arises from or is related to its contacts within the forum. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 & n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

STANDARD OF REVIEW

The plaintiff bears the initial burden of pleading allegations sufficient to bring a nonresident defendant within the provisions of the long-arm statute. Coleman, 83 S.W.3d at 807; see also Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 633 (Tex.App.-Dallas 1993, writ denied). In order to meet its burden, a plaintiff must show "the act on which jurisdiction is predicated, not a prima facie demonstration of the existence of a cause of action." Arterbury, 553 S.W.2d at 947-948. Further, the jurisdictional requirements of our long-arm statute respecting "commission of a tort" are satisfied "when the defendant, personally or through an agent, is the author of an act or omission within the forum state, and the petition states a cause of action in tort arising from such conduct." Id. at 948.

A nonresident defendant, challenging personal jurisdiction through a special appearance, carries the burden of negating all bases of personal jurisdiction. Coleman, 83 S.W.3d at 807. Even if there are no jurisdictional allegations in a plaintiff's petition, a defendant must negate all bases of jurisdiction. Magic House AB v. Shelton Beverage L.P., 99 S.W.3d 903, 909 (Tex.App.-Dallas 2003, no pet.); Temperature Sys., Inc. v. Bill Pepper, Inc., 854 S.W.2d 669, 673 (Tex.App.-Dallas 1993, writ dism'd by agr.). In such a case, proof that a defendant is a nonresident is sufficient to meet this burden. Magic House AB, 99 S.W.3d at 909. However, proof of nonresidency is not enough when a plaintiff alleges jurisdictional facts. Id. Then, a defendant must also negate the jurisdictional facts alleged. Id.

Whether a court has personal jurisdiction over a defendant is a question of law. Hotel Partners v. Craig, 993 S.W.2d 116, 120 (Tex.App.-Dallas 1994, writ denied). In resolving this question of law, a trial court must frequently resolve questions of fact. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002). When reaching a decision to exercise or decline jurisdiction based on the defendant's alleged commission of a tort, the trial court should rely only upon the necessary jurisdictional facts and should not reach the merits of the case. Ring Power Systems v. Int'l de Comercio Y Consultoria, 39 S.W.3d 350, 353 (Tex. App.-Houston [14th Dist.] 2001, no pet.); Arterbury, 553 S.W.2d at 948. In determining whether the trial court's ruling on a special appearance is correct, appellate courts review the trial court's factual findings for legal and factual sufficiency and review, de novo, the trial court's legal conclusions drawn from the facts. Magic House AB, 99 S.W.3d at 907 (citing BMC Software, 83 S.W.3d at 794-95). Even if requested by motion of a party, a trial court need not issue findings of fact and conclusions of law respecting its ruling on a special appearance.2 When the trial court does not issue findings of fact and conclusions of law concerning its special appearance ruling, all facts necessary to support the order and supported by the evidence are implied. See BMC Software, 83 S.W.3d at 795; Worford v. Stamper, 801 S.W.2d 108, 109 (Tex.1990).

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