Dugas Ltd. P'ship v. Dugas

• Citation: 341 S.W.3d 504
• Decision Date: 26 May 2011
• Docket Number: No. 02–09–00463–CV.,02–09–00463–CV.
• Parties: DUGAS LIMITED PARTNERSHIP, Dugas 1998 Irrevocable Trust, William Bruce Dugas Grandchild Trust, James Stephen Turner and Hurley Calister Turner, Jr., Co–Trustees of the Dugas 1998 Irrevocable Trust f/b/o William Bruce Dugas, Appellants,v.Donna Neal Goode DUGAS and Laura Nicole Dugas, Appellees.
• Court: Court of Appeals of Texas

341 S.W.3d 504

DUGAS LIMITED PARTNERSHIP, Dugas 1998 Irrevocable Trust, William Bruce Dugas Grandchild Trust, James Stephen Turner and Hurley Calister Turner, Jr., Co–Trustees of the Dugas 1998 Irrevocable Trust f/b/o William Bruce Dugas, Appellants,

v.Donna Neal Goode DUGAS and Laura Nicole Dugas, Appellees.

No. 02–09–00463–CV.

Court of Appeals of Texas, Fort Worth.

March 31, 2011.Rehearing Overruled May 26, 2011.

R. William Wood, Grace A. Weatherly, Wood, Thacker & Weatherly, P.C., Denton, TX, for Appellants.John T. Palter, W. Craig Stokley, Riney Palter PLLC, Dallas, TX, for Appellee Donna Neal Goode Dugas.Fred Hartnett, Jim Hartnett, Jr., Will Ford Hartnett, The Hartnett Law Firm, Dallas, TX, for Appellee Laura Nicole Dugas.PANEL: DAUPHINOT, WALKER, and MEIER, JJ.

OPINION

BILL MEIER, Justice.

I. INTRODUCTION

In this accelerated, interlocutory appeal, Appellants Dugas Limited Partnership (Dugas, LP); Dugas 1998 Irrevocable Trust (Dugas 1998 Trust); William Bruce Dugas Grandchild Trust (Grandchild Trust); and James Stephen Turner (Steve) and Hurley Calister Turner, Jr. (Cal), Co–Trustees of the Dugas 1998 Irrevocable Trust f/b/o William Bruce Dugas (Bruce) challenge the trial court's order denying their special appearances. In three issues, Appellants argue that general jurisdiction does not exist over Dugas, LP; that specific jurisdiction does not exist over the Dugas 1998 Trust, the Grandchild Trust, and Cal and Steve as co-trustees of the Dugas 1998 Trust; and that the trial court erred by denying their plea to the jurisdiction and plea in abatement. We will affirm in part and reverse and render in part.

II. FACTUAL ¹ AND PROCEDURAL BACKGROUND

Bruce died in January 2008. Appellee Donna Neal Goode Dugas married Bruce in 1984 and is his surviving spouse. Bruce and Donna had two children, Appellee Laura Nicole Dugas and William Bruce Dugas, II (William). Bruce's mother was Laura Jo Turner Dugas. Laura Jo's siblings are Cal and Steve. H. Calister Turner, Sr.—Laura Jo, Cal, and Steve's father—founded Dollar General.

Bruce and Donna moved to Aubrey, Texas, in 1995 and resided at 4801 South Highway 377 until 1999. According to Donna, she and Bruce “acquired a joint undivided fee simple interest in the Double D Ranch, located at 5932 Wildcat Road, Aubrey, Denton County Texas 76227 and 6032 Wildcat Road, Aubrey, Denton County Texas” in 1999. In July or September 2005, Bruce and Donna ceased living together at the Double D Ranch.² Bruce resided in Kentucky at the time of his death. Donna and Laura continue to reside at the Double D Ranch, and William resides in Corinth, Texas.

In December 1989, H. Calister Turner, Sr. and Steve entered into a trust agreement for the creation of the Grandchild Trust. H. Calister Turner, Sr. signed the trust agreement as grantor, and Steve signed as trustee. The Grandchild Trust was created “for the benefit of the Grantor's grandchild, [Bruce],” called for Steve to make income distributions to Bruce “as [Steve] deems advisable,” and among other things, to make discretionary corpus distributions for Bruce's comfort, health, maintenance, and support. The Grandchild Trust gave Bruce a general testamentary power to appoint the assets remaining therein upon his death to any individual or entity. If Bruce did not so appoint any person or entity before his death, the assets were to be allocated pro rata among Bruce's children after taxes. From 1998 to 2007, and at other times during Bruce's lifetime, distributions were made to him from the Grandchild Trust by wire transfer and by check. The Grandchild Trust was executed in Kentucky.

In November 1998, Laura Jo, as settlor, created the Dugas 1998 Trust. The Dugas 1998 Trust identified Cal and Steve as trustees and provided that they are responsible for dividing and allocating the principal among three separate trusts named for Laura Jo's three children, including Bruce. It stated that Laura Jo's primary concern during the life of the named beneficiary was for the beneficiary's health, support, and education, and it gave Bruce the power to appoint by will his interest therein and provided that the principal was to be allocated among his then-living descendants upon his death if he did not exercise the appointment. The Dugas 1998 Trust made distributions to Bruce during his lifetime, including distributions from 2003 to 2007. Laura Jo, Cal, and Steve executed the trust in Florida.³

In February 1998, the LJWD Limited Partnership was formed by the Limited Partnership Agreement of the LJWD Limited Partnership. In April 1998, the LJWD Limited Partnership's name was changed to “Dugas Limited Partnership.” Dugas, LP is “governed by the Uniform Limited Partnership Act of the State of Delaware.” The purposes of Dugas, LP are “to buy, sell, invest in, operate[,] and manage such securities, real estate, and other assets as the General Partner may determine”; to consolidate investments; and to pool and protect assets. The partnership agreement lists Dugas, LP's principal place of business and principal office as “4801 South Highway 377, Aubrey, Texas 76227.” Dugas, LP's general partner is Dugas Asset Management Corp. Bruce signed the partnership agreement as “President” of Dugas Asset Management Corp., and an exhibit to the partnership agreement identified Dugas Asset Management Corp.'s address as:

Dugas Asset Management

Corp.

c/o William B. Dugas

Double D Ranch, 4801 South

Highway 377

Aubrey, Texas 76227

As of December 31, 2008, Dugas, LP had fifteen limited partners. The partnership agreement listed only one asset of Dugas, LP: Dugas Family Partners, a Texas General Partnership.

The Family Office, L.L.C. is a Tennessee limited liability company that the Turner and Dugas families established to provide services to Turner and Dugas family members, their trusts, and the entities that they control. David Wilds is the chief executive officer of The Family Office, and Amy Freeny is the tax manager. The distributions that the Grandchild Trust and the Dugas 1998 Trust made to Bruce during his lifetime were transferred by the Family Office. The Family Office has no offices outside of Nashville, Tennessee.

A petition to probate Bruce's will was filed in Kentucky in February 2008. In February 2009, Donna sued Dugas, LP; the Grandchild Trust; the Dugas 1998 Trust; Ernest Pardue, in his capacity as the executor of Bruce's estate; Laura; William; and the Wayne F. Dugas, Sr. 1998 Trust in Texas.⁴ Donna sought (1) an accounting of the assets of Bruce's estate and of the assets and distributions of the trusts; (2) a partition of the Double D Ranch; and (3) declarations regarding the character of the trusts for which Bruce was a beneficiary, whether certain distributions made to Bruce were advancements or loans, and whether Donna is entitled to recover as community property any income from appreciation of the trusts' assets.⁵

In March 2009, Pardue filed a “Verified Petition for the Settlement of the Estate of William Bruce Dugas, Deceased, and Complaint for Declaratory Judgment” in Kentucky. According to Donna, the petition sought relief similar to the relief that she seeks in her suit against Bruce's estate and the trusts.

In July 2009, Laura filed cross-claims against Cal and Steve as co-trustees of the Dugas 1998 Trust in Texas. She sought an accounting of the Dugas 1998 Trust and alleged that Cal and Steve breached fiduciary duties that they owed to her as trustees of the Dugas 1998 Trust by failing to investigate her needs and by failing to make sufficient distributions to her.

Dugas, LP; the Dugas 1998 Trust; the Grandchild Trust; and Cal and Steve as

co-trustees of the Dugas 1998 Trust filed special appearances challenging the trial court's personal jurisdiction over them.⁶ The trial court ultimately signed an order denying Dugas, LP's special appearance on the basis that general jurisdiction exists over it “based, in part, on the documentary proof showing that it had a principal place of business in Texas.” The trial court denied the other defendants' special appearances because “specific jurisdiction exists over [each of them]. The facts of this case are directly on point with those set forth in Steen Seijo v. Miller, 425 F.Supp.2d 194 (D.P.R.2006).” The trial court denied any plea in abatement for each of the claims asserted by Laura against Cal and Steve as co-trustees of the Dugas 1998 Trust but granted any plea in abatement for the claims asserted by Donna against Dugas, LP, the Dugas 1998 Trust, and the Grandchild Trust, staying those claims “in the interest of comity,” “pending resolution in the Kentucky proceedings.” Dugas, LP, the Dugas 1998 Trust, the Grandchild Trust, and Cal and Steve as the Dugas 1998 Trust's co-trustees appeal.

III. STANDARD OF REVIEW, BURDEN OF PROOF, AND PERSONAL JURISDICTION

Whether a trial court has personal jurisdiction over a defendant is a question of law, which we review de novo. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.2007); Luxury Travel Source v. Am. Airlines, Inc., 276 S.W.3d 154, 160 (Tex.App.-Fort Worth 2008, no pet.). In a suit against a nonresident defendant, the initial burden of proof is on the plaintiff to plead sufficient allegations to bring the defendant within the provisions of the Texas long-arm statute. Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex.2010). “This minimal pleading requirement is satisfied by an allegation that the nonresident defendants are doing business in Texas.” Huynh v. Nguyen, 180 S.W.3d 608, 619 (Tex.App.-Houston [14th Dist.] 2005, no pet.). The plaintiff's original pleadings as well as its response to the defendant's special appearance can be considered in determining whether the plaintiff satisfied that burden. Flanagan v. Royal Body Care, Inc., 232 S.W.3d 369, 374 (Tex.App.-Dallas 2007, pet. denied). Once the plaintiff has pleaded sufficient jurisdictional allegations, the defendant filing a special appearance bears the...