Exito Electronics, Co., Ltd. v. Trejo

• Decision Date: 13 February 2003
• Docket Number: No. 13-02-368-CV.,13-02-368-CV.
• Citation: 99 S.W.3d 360
• Parties: EXITO ELECTRONICS, CO., LTD., Appellant, v. Virginia TREJO, et al., Appellees.
• Court: Texas Court of Appeals

99 S.W.3d 360

EXITO ELECTRONICS, CO., LTD., Appellant, v. Virginia TREJO, et al., Appellees.

No. 13-02-368-CV.

Court of Appeals of Texas, Corpus Christi-Edinburg.

February 13, 2003.

Rehearing Overruled March 20, 2003.

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Rick Lee Oldenettel, Oldenettel & Associates, Houston, for Appellant.

Brendan K. Mcbride, San Antonio, Dwayne Day, Houston, Prichard, Hawkins & Young, Joe W. Meyer, Nathan A. Steadman, Meyer, Knight & Williams, Houston, Juan A. Gonzalez, Patricia Kelly, Adams & Graham, Harlingen, Steven H. Beadles, Carol A. Swanda, Law Offices of Steven H. Beadles, Dallas, Byron C. Keeling, Holman & Keeling, Houston, David M. Prichard, San Antonio, Frank Sabo, Daw & Ray, Weslaco, Jaime A. Drabek, Drabek & Associates, Harlingen, Jose E. Garcia, Garcia, Villareal & Karam, Michael Zanca, Roerig, Oliveira & Fisher, L.L.P., McAllen, for Appellees.

Jaime A. Drabek, for Walmart Stores, Inc.

David M. Prichard, Dwayne Day and Brendan K. Mcbride, for Wood Industries, Inc.

Michael Zanca, for Valley Market d/b/a All Valley Flea Market.

Frank Sabo, for K-Mart Corporation.

Byron C. Keeling, Robert Alan York, Ruth B. Downes and John David Franz, for Pacific Electricord Co., Ltd.

John David Franz, Patricia Kelly and Juan A. Gonzalez, for Mega Electronics, Inc.

Steven H. Beadles, Mike Mills and Carol A. Swanda, for Thompson Multimedia, Inc.

Jose E. Garcia, for General Electric.

Before Justices HINOJOSA, YAÑEZ and CASTILLO.

OPINION

Opinion by Justice CASTILLO.

This is an interlocutory appeal from the trial court's order denying the special appearance of Exito Electronics Company, Ltd., appellant ("Exito").¹ Appellees are Virginia Trejo, individually and as representative of the estate of Paulino Trejo; Nadia Guadalupe Salvador Guzman, individually; and Aurelio Salvador Flores, individually and as representative of the estate of Juana Zuniga, deceased, and as next friend of Maria de la Luz Crecencia Salvador Guzman, a minor (together, "Trejo"). We affirm.

I. RELEVANT FACTS AND PROCEDURAL BACKGROUND

On Christmas Day in 1998, Paulino Trejo, Juana Zuniga, and Maria de la Luz Crecencia Salvador Guzman died in a house fire in Hillsboro, Texas. Alleging that the fire resulted from a defective extension cord, relatives of the victims of the fire filed suit on September 9, 1999 against numerous alleged distributors and retailers of the product. On December 22, 2000, an amended pleading added Exito as a defendant. The amended pleading described Exito as a nonresident "manufacturer," alleged that Exito "is a foreign corporation organized under the laws of Taiwan and doing business in Texas, USA without an agent for service," and sought service under rule 108a(1)(c) of the rules of civil procedure pursuant to the Texas longarm statute as provided in sections 17.044 and 17.045 of the civil practice and remedies code. See TEX. CIV. PRAC. & REM.CODE ANN. §§ 17.044, 17.045 (Vernon 1997 and Supp.2003); TEX.R. CIV. P. 108a(1)(c). The amended pleading also alleged that the fire was caused by a defective extension cord and that "[t]he extension cord in question was manufactured in whole or in part by Exito...."

On February 16, 2001, Exito filed a rule 11 agreement² in which Trejo's counsel agreed with Exito to "an extension until February 19, 2001 to file a responsive pleading" (the "Rule 11 agreement"). On March 5, 2001, Exito filed its verified special appearance objecting to personal jurisdiction. Attached to the special appearance are two verifications. The first is signed by "Courtney Duke," a person whose role and source of knowledge are not identified in the verification ("Duke"). The second verification was provided by Juan Kao, "the director of Exito Electronics, Co., Ltd." ("Kao"). In his affidavit, Kao attests that he is "knowledgeable about [Exito's] business activities" and that he has "personal knowledge of the facts stated" in the affidavit. He does not state that the facts are true and correct. Kao's signature purports to be on behalf of Exito. This corporate signature block is followed by a jurat, but the jurat does not contain a notary stamp, recite the name of the notary, or indicate where the verification was signed.

On March 6, 2001, Exito filed a motion to transfer venue from Hidalgo County, the venue where Trejo claimed the extension cord was purchased, to Hill County, where the fire had occurred. Exito then filed an answer on March 8, 2001. The parties engaged in discovery. Various codefendants filed cross-claims against Exito, who answered them. A hearing on the special appearance and on the motion to transfer venue was scheduled for June 7, 2001 but apparently was postponed.

On September 10, 2001, Trejo filed a motion to compel the deposition of Exito's corporate representative "in defense of special appearance." Exito responded to the motion to compel on September 18, 2001, expressly subject to and without waiving its special appearance, asserting that the deposition of Exito's designated corporate representative should be taken in Taiwan, not in Houston as noticed by Trejo. According to the docket sheet, the trial court signed an order on the motion on October 10, 2001, but the order itself is not included in the record.

On December 3, 2001, Exito filed a motion seeking to modify its answers to requests for admissions propounded by Trejo. On December 14, 2001, the trial court signed an order granting Exito's motion to modify its responses to the discovery. Hearings on the special appearance and on the motion to transfer venue were scheduled for March 18, 2002 and May 31, 2002 but again were reset, the last time on the trial court's own motion to June 3, 2002. On that date, the trial court conducted a hearing on Exito's special appearance and motion to transfer venue. It denied both motions. On June 19, 2002, the trial court signed orders reflecting its rulings. The order denying Exito's special appearance recites findings of fact and conclusions of law. This appeal ensued.

II. THE STANDARD OF REVIEW

Whether a court has personal jurisdiction over a nonresident defendant is a question of law. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002). However, the trial court frequently resolves questions of fact before deciding the personal jurisdiction question. Id. If a trial court enters an order denying a special appearance and also issues findings of fact and conclusions of law, the nonresident defendant may challenge the fact findings on legal and factual sufficiency grounds. Id. Unchallenged fact findings are binding on the appellate court. Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 632 (Tex.App.-Dallas 1993, writ denied). We conduct a de novo review when applying the law to the facts. El Puerto de Liverpool, S.A. de C.V. v. Servi Mundo Llantero S.A. de C. V, 82 S.W.3d 622, 639 (Tex.App.-Corpus Christi 2002, pet. dism'd w.o.j.) (op. on rehearing).

Therefore, if an order on a special appearance is based on undisputed or established facts (such as where the nonresident defendant does not challenge the trial court's findings of fact), the exercise of personal jurisdiction is a question of law we review de novo. Happy Indus. Corp. v. Am. Specialties, Inc., 983 S.W.2d 844, 848 (Tex.App.-Corpus Christi 1998, pet.

dism'd w.o.j.). We review for correctness the legal conclusions drawn by the trial court from the established facts. BMC, 83 S.W.3d at 794. If a conclusion of law is erroneous, but the trial court rendered the proper judgment, the erroneous conclusion of law does not require reversal. Id.

III. ANALYSIS

In two issues, Exito contends that: (1) appellees did not meet their burden of pleading personal jurisdiction; and (2) the Taiwanese corporation did not establish minimum contacts with the State of Texas sufficient for the exercise of either general or specific personal jurisdiction. We address first Exito's burden argument.

A. The Procedural Burdens Associated with Personal Jurisdiction

If a nonresident defendant purposefully avails itself of the privileges and benefits of conducting business in the State of Texas, this State has sufficient contacts to confer personal jurisdiction. TEX. CIV. PRAC. & REM.CODE ANN. § 17.042 (Vernon 1997); BMC, 83 S.W.3d at 795. The nonresident defendant's minimum contacts with Texas may confer either general or specific personal jurisdiction. BMC, 83 S.W.3d at 795. General personal jurisdiction requires that the contacts in Texas be continuous and systematic but does not demand that the cause of action arise from or relate to activities conducted in Texas. Id. at 796. Specific personal jurisdiction requires that the alleged liability arise from or relate to an activity conducted in Texas. Id.

The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the personal jurisdiction of the State of Texas. Id. at 793; Frank A. Smith Sales, Inc., v. Atl. Aero, Inc., 31 S.W.3d 742, 746 (Tex. App.-Corpus Christi 2000, no pet.). A nonresident defendant challenging a Texas court's personal jurisdiction must negate all jurisdictional bases. CSR Ltd. v. Link, 925 S.W.2d 591, 596 (Tex.1996) (orig. proceeding); Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex.1985). In the absence of sufficient personal-jurisdiction allegations by the plaintiff, the defendant meets its burden of negating all potential bases of personal jurisdiction by presenting evidence that it is a nonresident. M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 408 n. 2 (Tex.App.-Corpus Christi 1999, no pet.); KPMG, 847 S.W.2d at 634.

Exito argues that Trejo did not plead facts adequate to establish personal jurisdiction over the corporation in Texas, so that Exito met its burden in its special appearance by proving its nonresidency. To the contrary, the amended pleading joining Exito as a defendant alleged that the company was doing...