Global Energy Solutions, LLC v. Kermit Pipeline, LLC
| Decision Date | 11 August 2022 |
| Docket Number | 08-20-00183-CV |
| Citation | 657 S.W.3d 165 |
| Parties | GLOBAL ENERGY SOLUTIONS, LLC, Appellant, v. KERMIT PIPELINE, LLC, Appellee. |
| Court | Texas Court of Appeals |
ATTORNEY FOR APPELLANT: Nicholas Nevarez Jr., The Nevarez Law Firm, 1103 S. Grand St., Amarillo, TX 79104.
ATTORNEY FOR APPELLEE: Rachel Williams, Williams Law PC, 10300 N. Central Expy, Ste. 544, Dallas, TX 75231.
Before Rodriguez, C.J., Palafox, and Alley, JJ.
This interlocutory appeal arises from a trial court's denial of a special appearance. The underlying case involves an Oklahoma company that sold an industrial water pump to a Texas entity. The water pump failed, leading the Texas entity to file suit against the Oklahoma company in Ward County, Texas. We affirm the order denying the special appearance because the record supports the trial court's implied findings that the Oklahoma company did more than just sell a water pump to a Texas entity. Rather, the Oklahoma firm acted to select a particular pump that could be integrated into a Texas piping system, and then caused persons to try to fix the pump in Texas when it failed.
In 2019, Appellee Kermit Pipeline, LLC (Kermit), a Texas water pipeline operator, bought a water pump from Appellant Global Energy Solutions, LLC (GES), an Oklahoma company. The water pump was to be used in a pipeline in Ward and Winkler Counties, Texas. After GES shipped the pump to Kermit's property in Winkler County, the pump failed. Kermit tried to return the pump for a refund, but GES refused to accept it or issue a refund.
Kermit then sued GES in Ward County, alleging breach of implied and express warranties, fraud, negligent misrepresentation, and breach of contract. Kermit's original petition generally alleged that GES was "doing business in Texas" and "purposefully availed itself of the privileges and benefits of conducting business in Texas." The original petition, however, contained only a sparse measure of jurisdictional facts to support that claim: Kermit contacted GES to purchase a pump meeting certain criteria; GES recommended a particular pump to meet those needs; based on that recommendation, Kermit purchased the pump; the pump was delivered on October 24, 2019 and installed the next day; and the pump then failed to perform as promised.
GES responded by filing a special appearance alleging that it is an Oklahoma entity whose principal place of business is in Oklahoma. GES's special appearance challenged whether Kermit alleged any facts to sustain the exercise of either general or specific personal jurisdiction by a Texas court.
Kermit then filed an amended petition that tells this story: (1) Kermit pumps water from a location in Winkler County, Texas; (2) Kermit was referred to GES to obtain a water pump that could pump 25,000 barrels of water per day (or 13-14 barrels per minute); (3) Kermit and GES corresponded via telephone over the sale of the pump, and upon GES's request, Kermit provided GES specific topographical data from Kermit's Winkler County property and information on Kermit's water piping system; (4) the water pump was designed to be permanently affixed to Kermit's property; (5) based on GES's recommendation for a specific pump to suit Kermit's needs, Kermit bought the pump from GES; (6) GES sent some of its employees to deliver the pump, and the pump was installed on Kermit's property; (7) after its faulty installation, the pump immediately failed and only pumped approximately 3.5 barrels of water per minute; (8) after Kermit and GES worked together to make several unsuccessful repairs to the pump, GES sent a repairperson to the property who spent "at least twelve hours" trying to get the pump running, but he failed to do so; (9) after the pump experienced several additional failures, Kermit was forced to install an alternate pump to meet its needs; (10) Kermit attempted to return GES's pump and be reimbursed for its purchase price, but GES did not respond to the request; and (11) Kermit suffered damages through the repair attempts, the cost to rent an alternate pump temporarily, and lost sales.
As part of its response to the special appearance, Kermit attached an affidavit from its manager, Russ Bourquein, that reiterates and expands on some allegations in the amended petition. According to Bourquein, Kermit is a Texas limited-liability company that supplies water through a system of pipelines to its customers, including oil-drilling companies with operations around Texas. Relevant here, Kermit pumps water from its property in Winkler County which required a pump that would achieve a flow rate of 25,000 barrels of water per day, or 13 to 14 barrels per minute. Another company, Sunbelt Rentals, referred Kermit to GES. Chris Larsen, a GES employee, communicated with Kermit via telephone and email representing that GES could provide a pump that satisfied Kermit's requirements. Based on a request, Kermit "provided Global specific topographical data from Kermit's Winkler County, Texas property and the design information for Kermit's water piping system." Kermit then contracted with GES to purchase and deliver the pump to Kermit's property in Winkler County, which GES did on October 19, 2019. But the pump never performed at its required flow rate, and it suffered a catastrophic failure on the day it was installed that caused it to repeatedly shut down and pump at a rate of only 3.5 barrels per minute. Kermit and GES then worked unsuccessfully for several days to repair the pump, at which point:
"[GES] then sent a repairperson to the Winkler County, Texas property. The repairperson attempted to triage why the pump was not functioning and to make the required repairs. The [GES] repairperson spent at least twelve hours trying to get the pump running. He was not able to do so.
Lastly, Bourquein states that Kermit was forced to rent and install another pump to meet the required flow rate.
GES then responded with an affidavit from Garrett Campbell, its President, who claimed that GES was put in contact with Kermit by a third party, Sunbelt Rentals. GES provided a quote based on specifications provided by Sunbelt. GES later shipped the purchased pump from Oklahoma City to Ward County through a third-party carrier, whose charges were included on Kermit's invoice. GES was not involved in the installation of the pump, which Campbell asserted was the likely cause of any malfunction.
During a hearing on GES's special appearance, Campbell also testified that the only other time GES interacted with the pump after sending it to Kermit occurred when He testified that GES never entered into a service contract for the pump. On cross-examination, Campbell clarified that "down there" meant to Texas where the pump was installed, and that the GES employee, Chris Larsen, traveled to Kermit's property to inspect the pump's condition after Kermit had already installed another pump on the property. Campbell did not, however, have any personal knowledge of what Larsen may have done when he came to Texas.
Following the hearing, the trial court denied GES's special appearance without entering written findings of fact or conclusions of law. This appeal follows. GES raises one issue on appeal, arguing that the court should have granted its special appearance because the court lacked general or specific jurisdiction over GES. We resolve the appeal by addressing only whether the trial court had specific jurisdiction over GES.
Whether a court has personal jurisdiction over a defendant is a question of law. BMC Software Belgium, N.V. v. Marchand , 83 S.W.3d 789, 794 (Tex. 2002). To resolve the question of law, however, a trial court must frequently resolve questions of fact. American Type Culture Collection, Inc. v. Coleman , 83 S.W.3d 801, 806 (Tex. 2002). When the parties agree on the relevant facts, our review is purely de novo. See id. But if the parties disagree over the facts, we must look to what the trial court found. When, as in this case, a trial court does not issue findings of fact and conclusions of law with its special appearance ruling, we imply all facts necessary to support the ruling that are supported by the evidence. Marchand , 83 S.W.3d at 795 ; In re E.S. , 304 S.W.3d 571, 574 (Tex.App.--El Paso 2010, pet. denied). A party can challenge any of the implied findings under traditional legal and factual sufficiency review standards. Roberson v. Robinson , 768 S.W.2d 280, 281 (Tex. 1989).
When examining a legal sufficiency challenge, we review the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson , 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable fact finder could and disregard contrary evidence unless a reasonable fact finder could not. Id. at 827. The evidence is legally sufficient if it would enable a reasonable and fair-minded person to find the fact under review. Id. A legal sufficiency challenge will be sustained if the record reveals that evidence offered to prove a vital fact is no more than a scintilla. Kia Motors Corp. v. Ruiz , 432 S.W.3d 865, 875 (Tex. 2014). In a factual sufficiency challenge, we consider and weigh all the evidence, both supporting and contradicting the finding. Mar. Overseas Corp. v. Ellis , 971 S.W.2d 402, 406-07 (Tex. 1998). We may set aside the finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Id. at 407. We may not substitute our own judgment for that of the fact finder or pass upon the credibility of witnesses. Id.
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