Elk River, Inc. v. Garrison Tool & Die, Ltd.

• Decision Date: 29 March 2007
• Docket Number: No. 05-06-00158-CV.,05-06-00158-CV.
• Citation: 222 S.W.3d 772
• Parties: ELK RIVER, INC., Appellant, v. GARRISON TOOL & DIE, LTD., Appellee. 529900 Ontario Limited a/k/a Niagara Safety Products, Appellant, v. Elk River, Inc. and Hortencia Wardlow, Individually and as Heir and Personal Representative For the Estate of and as Wrongful Death Beneficiary of Carlos Juaquin Munoz, Decedent, Appellees.
• Court: Texas Court of Appeals

222 S.W.3d 772

ELK RIVER, INC., Appellant, v. GARRISON TOOL & DIE, LTD., Appellee.

529900 Ontario Limited a/k/a Niagara Safety Products, Appellant, v. Elk River, Inc. and Hortencia Wardlow, Individually and as Heir and Personal Representative For the Estate of and as Wrongful Death Beneficiary of Carlos Juaquin Munoz, Decedent, Appellees.

No. 05-06-00158-CV.

Court of Appeals of Texas, Dallas.

March 29, 2007.

Rehearing Overruled May 15, 2007.

Debra Ibarra Mayfield and Nathan M. Rymer, Rymer, Moore, Jackson & Echols, P.C., Houston, Rudy Gonzales, Jr., Law Offices of Gonzales, Hoblit, Ferguson, L.L.P., Corpus Christi, for Appellant.

Kenneth R. Baird, Michael D. Williams, Brown Sims, P.C., Michael W. Magee, Hays Mcconn Rice & Pickering, Houston, Thomas W. Fee, Fee, Smith, Sharp & Vitullo, John S. Kenefick, Macdonald Devin, P.C., Dallas, for Appellee.

Before Justices FITZGERALD, RICHTER, and FRANCIS.

OPINION

Opinion by Justice FRANCIS.

Appellants Elk River, Inc. and 529900 Ontario Limited a/k/a Niagara Safety Products (Niagara) appeal the trial court's order resolving two special appearances. In three issues, Elk River, Inc. contends the trial court erred in granting appellee Garrison Tool & Die, Ltd.'s special appearance because the trial court had personal jurisdiction and exercising it comports with traditional notions of fair play and substantial justice. In a single issue, Niagara contends the trial court erred in denying Niagara's own special appearance. We affirm.

Garrison and Niagara are Canadian limited companies with principal places of business a few miles apart in Fort Erie, Ontario, Canada. Garrison manufactures components for fall safety equipment. Niagara operates as a commissioned sales force distributing the products of fall safety equipment manufacturers. Garrison sells a small portion of its products directly to Miller Equipment in Pennsylvania. Otherwise, Garrison consigns its entire production to Niagara for sale under an oral agreement. The two companies have no corporate relationship, and Niagara sells its own products and the products of other companies as well. Neither Garrison nor Niagara has ever had an office, employees, a registered agent, or a bank account in Texas.

The underlying negligence and products liability suit arises from the June 16, 2003 death of Carlos Juaquin Munoz in Goehner, Nebraska. Munoz died after falling 1,200 feet from a broadcast tower owned by Spectrasite Communications, Inc., a Texas corporation. At the time of his death, Munoz was working on the tower for his employer, Doty-Moore Tower Services, Inc., a Texas corporation with principal place of business in Dallas County, Texas.

The plaintiff below, appellee Hortencia Wardlow, is Munoz's mother. In her suit, Wardlow alleges Munoz died because a safety harness securing him to the tower failed. Munoz's safety harness included a Garrison model GL 3100 hook described as a "pelican hook" or "ladder hook." Wardlow alleges Niagara sold the hook to Elk River, an Alabama-based component distributor, which then sold the hook to Trinity Sling Authority, Inc., a Texas corporation. Trinity Sling allegedly assembled the hook and other components into a safety harness or "positioning lanyard" which it allegedly sold to Doty-Moore.

Wardlow sued Doty-Moore, Spectrasite, Trinity Sling, and Elk River. After Elk River filed a third-party complaint against Garrison and Niagara for contribution and indemnity, Wardlow amended her pleadings to add the Canadian defendants.

Garrison and Niagara filed special appearances to contest the trial court's personal jurisdiction over them. After conducting a hearing, the trial court found (1) Niagara sells Garrison's products all over the United States, including Texas; (2) Garrison did not exercise any control over Niagara's selection of customers or geographic markets to serve; and (3) Niagara advertises in Texas through a catalog, talks to Texas customers, and intends to serve the Texas market. In contrast, the trial court found Garrison does not advertise or market its products in Texas.

The trial court concluded it did not have personal jurisdiction over Garrison. The trial court concluded Niagara's sale of the hook to Elk River in Alabama did not create a sufficient nexus between the litigation and the State of Texas for specific jurisdiction over Garrison even if it was foreseeable that Elk River might sell a completed positioning lanyard to a Texas corporation. The trial court further concluded Garrison had not attempted to service the Texas market, and Niagara was not Garrison's agent. Ultimately, the trial court concluded, "Garrison's contacts with the State of Texas do not rise to the level of continuous and systematic and are too shadowy and thin to support the exercise of general jurisdiction."

The trial court concluded it did not have specific jurisdiction over Niagara but it did have general jurisdiction because Niagara was doing business in Texas and had established continuous and systematic minimum contacts with Texas. As evidence of continuous and systematic contacts, the trial court cited Niagara's business activity and sales in Texas, its advertising and marketing of products in Texas, its communications and solicitations aimed at Texas customers, and its "sufficiently interactive" website.

The trial court concluded the exercise of general jurisdiction over Niagara does not offend traditional notions of fair play and substantial justice because of the minimum contacts it found. Further, the trial court concluded Niagara's attendance at industry conferences and its in-person sales calls showed the burden of defending the lawsuit would be minimal. The trial court concluded the State of Texas has a strong interest in protecting its citizens and compensating them for injuries resulting from defective products, in regulating the quality of products in the State's stream of commerce, and in adjudicating this dispute.

Whether a court has personal jurisdiction over a nonresident defendant is a question of law. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 805-06 (Tex.2002). To resolve this question of law, the trial court frequently must resolve preliminary questions of fact. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002). The trial court's fact findings may be reviewed for legal and factual sufficiency. Id. The trial court's conclusions of law are subject to de novo review. See id.

In this case, Elk River challenges the factual sufficiency of the evidence supporting some of the trial court's findings while Niagara challenges the findings on both legal and factual sufficiency grounds. Both appellants request de novo review of the trial court's conclusions of law.

In reviewing findings for legal sufficiency, we credit evidence favorable to the challenged finding and disregard contrary evidence unless a reasonable fact finder could not reject the evidence. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We uphold the findings against a legal sufficiency challenge if more than a scintilla of evidence supports them. Hoffmann v. Dandurand, 180 S.W.3d 340, 345 (Tex.App.-Dallas 2005, no pet.). In assessing the factual sufficiency of the evidence, we consider all of the evidence presented and reverse only if the findings are so against the great weight and preponderance of the evidence so as to be clearly wrong or unjust. Id. Unchallenged findings of fact are binding on appeal. Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 632 (Tex.App.-Dallas 1993, writ denied). If we determine the trial court reached an erroneous conclusion of law, the error does not require reversal if the trial court reached the proper judgment. Welborn Mortgage Corp. v. Knowles, 851 S.W.2d 328, 332 (Tex.App.-Dallas 1993, writ denied).

The long-arm statute authorizes Texas courts to exercise jurisdiction over nonresident defendants doing business within the State. See TEX. CIV. PRAC. & REM.CODE ANN. § 17.042 (Vernon 1997). The long-arm statute reaches as far as possible consistent with federal constitutional guarantees of due process of law. See Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991). An exercise of personal jurisdiction over a nonresident defendant is consistent with federal due process requirements if (1) the defendant has established minimum contacts with Texas, and (2) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. BMC Software, 83 S.W.3d at 795.

In evaluating the extent of the defendant's contacts with Texas, the touchstone of our jurisdictional analysis is "purposeful availment." Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex.2005). In determining whether the defendant has purposefully availed itself of the privilege of conducting activities within Texas, we look only to the defendant's contacts and not unilateral contacts of third parties. See id. at 784-85. We examine only purposeful contacts of the defendant itself that are not random, isolated, or fortuitous. Id. at 785. We search for evidence showing the defendant availed itself of the forum by seeking some benefit, advantage, or profit. Id. When a foreign defendant is involved, the minimum contacts analysis is particularly important because of the unique and onerous burdens placed on a party called to defend itself in a foreign legal system. See BMC Software, 83 S.W.3d at 795.

A nonresident defendant's minimum contacts may result in either general or specific personal jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); BMC Software, 83 S.W.3d at 795-96. General jurisdiction exists if the defendant has established continuous and systematic contacts with Texas. BMC Software, 83 S.W.3d at 796. Specific jurisdiction arises when the nonresident defendant has established...