I & Jc Corp. v. Helen of Troy L.P.

• Citation: 164 S.W.3d 877
• Decision Date: 26 May 2005
• Docket Number: No. 08-04-00110-CV.,08-04-00110-CV.
• Parties: I & JC CORP. and Bayside Brush Co. d/b/a Camila Paris, Appellants, v. HELEN OF TROY L.P., Appellee.
• Court: Texas Supreme Court

164 S.W.3d 877

I & JC CORP. and Bayside Brush Co. d/b/a Camila Paris, Appellants, v. HELEN OF TROY L.P., Appellee.

No. 08-04-00110-CV.

Court of Appeals of Texas, El Paso.

May 26, 2005.

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Rene Ordonez, Delgado, Acosta, Braden & Jones, P.C., El Paso, for Appellants.

R. Wayne Pritchard, Ray, Valdez, McChristian & Jeans, P.C., El Paso, for Appellee.

Before Panel No. 2 BARAJAS, C.J., McCLURE, and CHEW, JJ.

OPINION

RICHARD BARAJAS, Chief Justice.

This is an appeal from the trial court's denial of special appearance motions decided against Appellants. For the reasons stated herein, we affirm the trial court's finding that jurisdiction in Texas is appropriate.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellant I & JC Corp. is a Florida corporation originally incorporated for the business of retail sales of women's hair accessories. Appellant Bayside Brush Co. was subsequently created to focus on retail sales of hair accessories and I & JC transferred its focus to the wholesale distribution of hair accessories. Appellant corporations are separate corporate entities though they share officers and directors and have a close business relationship.

Appellee, Helen of Troy L.P. is a limited Texas partnership in the business of supplying many types of hair and beauty products under various brand names. During the late 1990's, Appellants had a business relationship with the supplier of Karina products. Appellee acquired Karina in 1999. After the acquisition of Karina, the parties continued to do business but Appellants contend that the terms and conditions for the placement of orders for products and purchases was changed. A short time after the purchase, the relationship ended over a dispute about the credit arrangement between the parties. Appellants were in possession of several thousand dollars worth of hair products which they offered to return for credit. Appellee refused the return and demanded payment. Appellants deny that they owe any money for the merchandise and that their only obligation is to return the products.

Subsequent to the end of the relationship, Appellants began marketing substantially similar hair products under the name Camila Paris using what Appellee contends is the "trade dress"¹ being used by Appellee for Karina products. Appellee also contends that Appellants have begun using, without permission, the name "Karina," on the meta tags² of their active website. Appellants have sold, and continue to sell, products both in Texas and across the nation, using the Camila Paris label which Appellee contends is a trade dress infringement. Appellee sued Appellants in El Paso, Texas alleging violations of the Karina trademark and trade dress protection, unfair competition, violation of the Texas Business and Commerce Code, a breach of contract, requesting a declaratory judgment, and requesting injunctive relief. Each Appellant filed a Special Appearance challenging jurisdiction of the Texas courts. Appellee's response to the special appearances asserted five grounds for establishing jurisdiction over Appellants: (1) breach of contract, (2) trade dress infringement, (3) trademark infringement, (4) interactive websites, and (5) alter ego.

After a hearing on the special appearances, the trial court entered an order denying the special appearances. Appellants filed a Motion for Entry of Findings of Fact and Conclusions of Law. Plaintiff and Defendants filed Proposed Findings of Fact and Conclusions of Law. The trial court did not file findings of fact or conclusions of law and Appellants did not file a notice of past due findings of fact and conclusions of law.

Appellants filed a Notice of Interlocutory Appeal and assert six issues.

II. ISSUES ON APPEAL

In six issues, Appellants challenge the court's denial of their special appearance. In Issues One through Four, Appellants complain that the trial court erred in finding specific and general jurisdiction as to each Appellant respectively. Issue Five complains that the trial court erred in finding that Appellant Bayside was the alter ego of I & JC in submitting each to jurisdiction because of the minimum contacts of each company. Issue Six complains generally that the trial court's finding of jurisdiction violates traditional notions of fair play and substantial justice.

We read these issues collectively as a challenge to the trial court's implied findings of fact and conclusions of law that there is sufficient evidence to subject both Appellants to the jurisdiction of Texas courts on the grounds of minimum contacts, commission of a tort, and alter ego, as a matter of law. Stated in the alternative, we read Appellants' complaints as a challenge that there is no or insufficient evidence to support the trial court's decision finding jurisdiction and denying the special appearance.

III. STANDARD OF REVIEW

A trial court's order granting or denying a special appearance under Tex.R. Civ. P. 120a is appealable as an interlocutory appeal. Tex. Civ. Prac. & Rem.Code Ann. § 51.014(a)(7) (Vernon Supp.2004-05). The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provisions of the long-arm statute. See McKanna v. Edgar, 388 S.W.2d 927, 930 (Tex.1965). The special appearance procedure requires that a defendant challenging a Texas court's personal jurisdiction over it must negate all jurisdictional bases. American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex.2002); Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex.1985). Once a plaintiff has properly plead sufficient jurisdictional facts, a defendant must present evidence to rebut the jurisdictional allegations asserted because the burden has shifted. Further, a plaintiff may present evidence of jurisdictional facts at the hearing on the special appearance. See Zimmerman v. Glacier Guides, Inc., 151 S.W.3d 700, 704 (Tex.App.-Waco 2004, no pet.).

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). The trial court, however, frequently must resolve questions of fact before deciding the jurisdiction question. Id. If a trial court enters an order denying a special appearance, and the trial court issues findings of fact and conclusions of law, the appellant may challenge the fact findings on legal and factual sufficiency grounds. Id.; see Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 632 (Tex.App.-Dallas 1993, writ denied). The courts of appeals may review the fact findings for both legal and factual sufficiency. BMC Software Belgium, N.V., 83 S.W.3d at 794; Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996).

Appellate courts review a trial court's conclusions of law as a legal question. Hitzelberger v. Samedan Oil Corp., 948 S.W.2d 497, 503 (Tex.App.-Waco 1997, pet. denied). The appellant may not challenge a trial court's conclusions of law for factual insufficiency; however, the reviewing court may review the trial court's legal conclusions drawn from the facts to determine their correctness. Templeton v. Dreiss, 961 S.W.2d 645, 656 n. 8 (Tex.App.-San Antonio 1998, pet. denied); Dallas County v. Sweitzer, 881 S.W.2d 757, 763 (Tex.App.-Dallas 1994, writ denied). If the reviewing court determines a conclusion of law is erroneous, but the trial court rendered the proper judgment, the erroneous conclusion of law does not require reversal. Scholz v. Heath, 642 S.W.2d 554, 559 (Tex.App.-Waco 1982, no writ).

When a trial court rules on a special appearance, the losing party should request findings of fact and conclusions of law. Tex.R. Civ. P. 296; Daimler-Benz Aktiengesellschaft v. Olson, 21 S.W.3d 707, 715 (Tex.App.-Austin 2000, pet. dism'd w.o.j.), cert. denied, 535 U.S. 1077, 122 S.Ct. 1960, 152 L.Ed.2d 1021 (2002). When a trial court does not issue findings of fact and conclusions of law with its special appearance ruling, all facts necessary to support the judgment and supported by the evidence are implied. BMC Software Belgium, N.V., 83 S.W.3d at 795; see Worford v. Stamper, 801 S.W.2d 108, 109 (Tex.1990); Zac Smith & Co. v. Otis Elevator Co., 734 S.W.2d 662, 666 (Tex.1987); In re W.E.R., 669 S.W.2d 716, 717 (Tex.1984). When the appellate record includes the reporter's and clerk's records, these implied findings are not conclusive and may be challenged for legal and factual sufficiency in the appropriate appellate court. BMC Software Belgium, N.V., 83 S.W.3d at 795; Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.1989); Zac Smith & Co., 734 S.W.2d at 666. When such points are raised, the standard of review to be applied is the same as that to be applied in the review of jury findings or a trial court's findings of fact. Roberson, 768 S.W.2d at 281. For legal sufficiency points, if there is more than a scintilla of evidence to support the finding, the no evidence challenge fails. BMC Software Belgium, N.V., 83 S.W.3d at 795; Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex.1992).

We will set aside a finding of the trial court only if the finding is so against the great weight and preponderance of the evidence as to be manifestly erroneous or unjust. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, 661 (1951); Runnells v. Firestone, 746 S.W.2d 845, 849 (Tex.App.-Houston [14th Dist.] 1988, writ denied). In reviewing such a point of error, we must consider and weigh all of the evidence, both the evidence that tends to prove the existence of a vital fact as well as evidence that tends to disprove its existence. See In re King's Estate, 244 S.W.2d at 665; Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986). In considering the evidence, if a finding is so contrary to the great weight and preponderance of the evidence as to be manifestly unjust, the finding should be set aside, regardless of whether some evidence supports it. Watson v....