Huynh v. Nguyen

• Decision Date: 03 November 2005
• Docket Number: No. 14-04-01027-CV.,14-04-01027-CV.
• Citation: 180 S.W.3d 608
• Parties: Thu Thuy HUYNH, Valley Multi-Specialty Surgery Center and Unity Outpatient Surgery Center, L.L.C., Appellants, v. Thuy Duong NGUYEN, Ha Dinh Nguyen, Loan T. Duong, Phuong Duong, Kim Nguyen Luu, and Blue Cross and Blue Shield of Alabama, Appellees.
• Court: Texas Supreme Court

180 S.W.3d 608

Thu Thuy HUYNH, Valley Multi-Specialty Surgery Center and Unity Outpatient Surgery Center, L.L.C., Appellants, v. Thuy Duong NGUYEN, Ha Dinh Nguyen, Loan T. Duong, Phuong Duong, Kim Nguyen Luu, and Blue Cross and Blue Shield of Alabama, Appellees.

No. 14-04-01027-CV.

Court of Appeals of Texas, Houston (14th Dist.).

October 4, 2005.

Rehearing Overruled November 3, 2005.

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Gregg C. Laswell, Jonathan S. Schmitt, Murry B. Cohen, Houston, Owen Stephen Jones, Friendswood, for appellants.

Richard Abram Stewart, David G. Dursam, Tammy Tran, Bradley M. Kirklin, Houston, for appellees.

Panel consists of Chief Justice HEDGES and Justices FOWLER and FROST.

OPINION

KEM THOMPSON FROST, Justice.

This is an interlocutory appeal from the trial court's order denying the special appearances of two nonresidents. We affirm in part and reverse and remand in part.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellees, Thuy Duong Nguyen ("Thuy"), Ha Dinh Nguyen ("Ha"), Loan T. Duong ("Loan"), Phuong Duong ("Phuong"), and Kim Nguyen Luu ("Kim") (collectively, "the Patients"), brought suit against appellants, Johnny Huynh ("Johnny"), a Texas resident, Thu Thuy Huynh ("Thu"), a Texas resident, and Valley Multi-Specialty Surgery Center ("Valley"), a California corporation. The Patients allege that Johnny, Thu, and Valley recruited them in Houston, Texas, to undergo allegedly unnecessary and improperly billed medical procedures at Valley's clinic in California. The Patients assert that Johnny, Thu, and Valley conspired to defraud insurance companies for allegedly unnecessary diagnostic tests and cosmetic surgeries that allegedly were fraudulently coded and billed as necessary medical procedures covered by insurance.

The Patients allege that Johnny and Thu, acting as agents or employees of Valley, offered them cosmetic surgery at prices substantially below the market rate. According to the Patients, while still in Texas, the Patients would pay Johnny and Thu in cash for their cosmetic surgeries. The Patients would fly to California, and Johnny and Thu would meet them at the airport and transport them to Valley's clinic. At the clinic, the Patients were allegedly induced by Johnny, Thu, and other representatives of Valley to undergo unnecessary diagnostic tests. The Patients assert that, without their knowledge, their insurance companies were billed or overbilled for these tests. The Patients also claim they were induced to sign various documents, authorizations, and assignments of insurance benefits. The Patients assert the doctors, surgeons, and medical providers received payment from the Patients' insurance companies through the assignment of benefits and then shared these allegedly ill-gotten proceeds with Johnny, Thu, Valley, and other surgeons. The Patients assert claims based on alleged common law fraud, violations of the Texas Deceptive Trade Practices Act, negligent misrepresentation, civil conspiracy, and tortious interference.

Thu and Valley filed special appearances contesting personal jurisdiction.¹ Blue Cross and Blue Shield of Alabama ("Blue Cross"), an Alabama corporation which is Loan's and Kim's insurer, filed a petition in intervention, naming Unity Outpatient Surgery Center, L.L.C. ("Unity"), a California corporation, as a defendant. Blue Cross asserts that it was a victim of the foregoing alleged conspiracy and fraudulent scheme. According to Blue Cross, Johnny, Thu, Valley, and Unity conspired to defraud consumers and health insurance companies. Specifically, Blue Cross alleges that it was improperly billed and has been required to pay over $140,000 for allegedly unnecessary diagnostic tests performed on Loan and Kim and for operations from doctors whom they never visited and whom they never authorized to perform any medical operations on them. In response to Blue Cross's petition in intervention, Unity filed a special appearance contesting personal jurisdiction.

After a hearing, the trial court denied the special appearances of Thu, Valley, and Unity. In this interlocutory appeal, Valley and Unity challenge the trial court's jurisdictional ruling.²

II. STANDARD OF REVIEW

Whether Valley and Unity are subject to personal jurisdiction in Texas is a question of law subject to de novo review. See BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002). The trial court did not issue any findings of fact or conclusions of law. Therefore, all facts necessary to support the trial court's ruling and supported by the evidence are implied in favor of the trial court's decision. Id. at 795. Parties may challenge the legal and factual sufficiency of these implied factual findings. Id. In conducting a no-evidence analysis, we review the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. See City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex.2005). We must credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. See id. at 827. We must determine whether the evidence at trial would enable reasonable and fair-minded people to find the facts at issue. See id. The factfinder is the sole judge of the credibility of the witnesses and the weight of their testimony. See id. at 819.

When reviewing a challenge to the factual sufficiency of the evidence, we examine the entire record, considering both the evidence in favor of, and contrary to, the challenged finding. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986). After considering and weighing all the evidence, we set aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986). The trier of fact is the sole judge of the credibility of the witnesses and the weight to be given to their testimony. GTE Mobilnet of S. Tex. v. Pascouet, 61 S.W.3d 599, 615-16 (Tex.App.-Houston [14th Dist.] 2001, pet. denied). We may not substitute our own judgment for that of the trier of fact, even if we would reach a different answer on the evidence. Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex.1998). The amount of evidence necessary to affirm a judgment is far less than that necessary to reverse a judgment. GTE Mobilnet, 61 S.W.3d at 616.

III. ISSUES AND ANALYSIS

Valley and Unity each challenge the trial court's implied findings of specific and general jurisdiction and its denial of their special appearances. The Texas long-arm statute governs Texas courts' exercise of jurisdiction over nonresident defendants. TEX. CIV. PRAC. & REM.CODE ANN. §§ 17.041-.045 (Vernon 1997). It allows courts to exercise personal jurisdiction as far as the federal constitutional requirements of due process will permit. See BMC Software, 83 S.W.3d at 795. Thus, we rely on precedent from the United States Supreme Court and from other federal courts, as well as Texas decisions, in determining whether a nonresident defendant has shown that the exercise of personal jurisdiction violates federal due process guarantees. Id.

Personal jurisdiction over a nonresident defendant is constitutional when two conditions are met: (1) the defendant has established minimum contacts with the forum state, and (2) the exercise of personal jurisdiction comports with traditional notions of fair play and substantial justice. Id. A nonresident defendant that purposefully has availed itself of the privileges and benefits of conducting business in Texas has sufficient contacts to allow Texas courts to exercise personal jurisdiction over the nonresident. Id. Although not determinative, foreseeability is an important consideration in deciding whether the nonresident defendant purposefully has established minimum contacts with Texas. Id. The concept of foreseeability is implicit in the requirement that there be a substantial connection between the defendants and Texas arising from their conduct purposefully directed toward Texas. See Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 227 (Tex.1991). A defendant should not be subject to a Texas court's jurisdiction based upon random, fortuitous, or attenuated contacts. BMC Software, 83 S.W.3d at 795.

Specific jurisdiction exists when the claims in question arise from or relate to the defendant's purposeful contacts with Texas. Am. Type Culture Collection Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex.2002). In conducting a specific-jurisdiction analysis, we focus on the relationship among the defendants, Texas, and the litigation. See Guardian Royal, 815 S.W.2d at 228. General jurisdiction, however, implicates a more demanding minimum-contacts analysis, requiring a showing that the defendants conducted substantial activities within the forum. CSR, Ltd. v. Link, 925 S.W.2d 591, 595 (Tex.1996) (orig.proceeding). General jurisdiction exists when a defendant has "continuous and systematic general business contacts" with Texas so that Texas courts may exercise personal jurisdiction over the defendant even if the plaintiff's claims did not arise from or relate to the defendant's activities purposefully directed to Texas. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16, 104 S.Ct. 1868, 1872-73, 80 L.Ed.2d 404 (1984); Am. Type Culture Collection, 83 S.W.3d at 809-10.

A. Did Valley and Unity waive their objections to jurisdiction?

As an initial matter, we must address the Patients' and Blue Cross's contentions that both Valley and Unity waived their special appearances. An objection to a Texas court's exercise of personal jurisdiction over a nonresident is asserted by a special appearance under Rule 120a of the Texas Rules of Civil Procedure. See TEX.R. CIV. P. 120a. A special appearance must be made and determined on a sworn motion prior to any...