Keller v. Millice

Decision Date29 November 1993
Docket NumberCiv. A. No. H-92-3140.
PartiesAlbert P. KELLER, Individually and on Behalf of 501 South Cherry Joint Venture, Plaintiff, v. Carl T. MILLICE, Defendant.
CourtU.S. District Court — Southern District of Texas


Jonathan Lake Tankersley, Brown, Parker & Leahy, Houston, TX, for Albert P. Keller.

Kelley Maria Keller, Shrader Rothfelder Grote & Cicack, Charles J. Pignuolo, Horan & Devlin, Houston, TX, for Carl T. Millice.


STACY, United States Magistrate Judge.

Pending before the Court are three motions made by Carl T. Millice, Defendant. The first is a motion to dismiss or transfer venue under Rule 12(b)(3) of the Federal Rules of Civil Procedure due to improper venue (Instrument No. 3). The second is a motion to dismiss with prejudice or transfer venue on the basis of forum non conveniens (Instrument No. 4). The third is a motion to dismiss or transfer venue under Rule 12(b)(1) due to lack of subject matter jurisdiction (Instrument No. 3).

On February 19, 1993, the parties consented to trial before a United States Magistrate Judge under 28 U.S.C. § 636(c). United States District Judge Ewing Werlein, Jr. referred this case to United States Magistrate Judge Frances H. Stacy to conduct all further proceedings, including final judgment. After reviewing Defendant's motions and the Plaintiff's responses, as well as the applicable law and the other documents filed in this case, the Court concludes that each of the Defendant's motions should be denied.


This action arises from an agreement entered into by Albert P. Keller ("Keller"), Plaintiff, and Carl T. Millice ("Millice"), Defendant, to form a joint venture pursuant to the general terms of the Texas Uniform Partnership Act. Both Keller and Millice were residents of Texas at the time they entered into the agreement. The purpose of the joint venture was the development of two office buildings on a tract of land in Glendale, Colorado to be known as "One Cherry Center." The joint venture agreement was signed by the parties on August 3, 1982, and was to remain in effect for an unlimited period of time.

In order to fulfill his obligations as Operating Partner under the joint venture agreement, Millice moved to Denver, Colorado in 1984 and currently resides there, while Keller remained in Houston to fulfill his duties as Controlling Partner. A building and a parking garage were erected on the property in Colorado. Millice's subsequent activities surrounding the management and sale of the property are in question in this action. Keller alleges that Millice breached fiduciary duties owed to Keller and to the joint venture by using joint venture assets to operate a separate competing enterprise, by failing to inform the joint venture of negotiations to sell the property, and by selling the property without the knowledge and consent of the joint venture and Keller.

Along with a denial of these allegations, Millice filed a motion to dismiss with prejudice or to transfer venue due to improper venue, a motion to dismiss with prejudice or to transfer venue on the basis of the doctrine of forum non conveniens, and a motion to dismiss with prejudice or to transfer venue due to lack of subject matter jurisdiction. Millice asserts that since he is currently a resident of Colorado, that the property in question is located in Colorado, and that the allegedly improper acts were conducted in Colorado, a more appropriate forum for this action would be the United States District Court in Colorado.


Millice asserts that venue is not proper in the Southern District of Texas and has moved to dismiss the case or transfer venue to the United States District Court of Colorado under Rule 12(b)(3). Venue in federal courts is generally governed by 28 U.S.C. § 1391 (Supp. I 1993), which states that:

(a) A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which the defendants are subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

Keller and Millice disagree as to whether or not Defendant is subject to personal jurisdiction in the Southern District of Texas. Millice, in his motion for dismissal with prejudice or transfer of venue (Instrument No. 3), claims that his contacts with the Southern District of Texas are insufficient to justify jurisdiction.

In a diversity action, personal jurisdiction may be exercised over a nonresident defendant if (1) the nonresident defendant is amenable to service of process under the law of the forum state and (2) the exercise of jurisdiction under state law comports with the due process clause of the Fourteenth Amendment. Stuart v. Spademan, 772 F.2d 1185, 1189 (5th Cir.1985), (citing Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir.1985)). See also Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061 (5th Cir.1992), cert. denied, ___ U.S. ___, 113 S.Ct. 193, 121 L.Ed.2d 136 (1992).

Keller claims that the law governing service of process in this state, known as the Texas Long Arm Statute, Tex.Civ.Prac. & Rem.Code Ann. § 17.042 (Vernon 1986), operates here to allow the Court to assert personal jurisdiction over Millice. This statute authorizes an exercise of personal jurisdiction over nonresidents when the cause of action arises from the nonresident doing business in the state. "Doing business" has been defined to include entering into a contract which is performable as a whole or in part in Texas. Id. In the pending case, Millice entered into the joint venture contract with Keller. The contract was performable in part in Texas because the managerial functions of Keller as controlling partner were to be carried out by him in Houston, Harris County, Texas.

An exercise of jurisdiction by this Court under the Texas Long Arm Statute is permissible as long as such an assertion of jurisdiction would not violate the defendant's constitutional due process rights. Amoco Oil Co. v. Phillipe Martin & Associates, 811 F.Supp. 253 (S.D.Tex.1993), aff'd, 998 F.2d 1013 (5th Cir.1993). See also Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex.1990). No independent analysis of the Texas requirements for service of process is necessary. As long as the use of the Texas statute to exercise jurisdiction over Millice would not violate the due process clause of the Fourteenth Amendment, it is a permissible vehicle for the Court to assert jurisdiction over him.

In order to meet the constitutional standards of due process, personal jurisdiction must satisfy two tests. These two tests require a determination that the defendant has "certain minimum contacts with the forum such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). First, the defendant must have "minimum contacts" with the forum state resulting from an affirmative act or acts on his part. Second, it must not be unfair or unreasonable to require the nonresident to defend the suit in the forum state. Growden v. Ed Bowlin and Associates, Inc., 733 F.2d 1149, 1150 (5th Cir.1984).

The first requirement for personal jurisdiction, "minimum contacts" with the forum state may be satisfied by showing either "specific" or "general" contacts with the forum. Interfirst Bank Clifton v. Fernandez, 844 F.2d 279, 283 (5th Cir.1988). Keller alleges that both specific and general jurisdiction exist over Millice. Only one type need be established in order to show personal jurisdiction.

A. Minimum Contacts

Specific jurisdiction relies on "the relationship among the defendant, the forum, and the litigation." Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2580, 53 L.Ed.2d 683 (1977). The minimum contacts requirement is satisfied when the contact with the forum state is a result of the defendant's purposeful conduct and not from the unilateral activity of the plaintiff. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). "`Random', `fortuitous', or `attenuated'" contacts are insufficient. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 486, 105 S.Ct. 2174, 2189, 85 L.Ed.2d 528 (1985), (quoting World-Wide Volkswagen, 444 U.S. at 299, 100 S.Ct. at 568). In some cases, one contact from which the cause of action arises may be sufficient to meet the minimum contacts requirement. Southmark Corp. v. Life Investors, Inc., 851 F.2d 763, 772 (5th Cir.1988), (citing Micromedia v. Automated Broadcast Controls, 799 F.2d 230, 234 (5th Cir.1986)).

To establish specific jurisdiction in a case based on a contract, as in the instant action, more than mere contracting with a resident of the forum state is necessary to subject a nonresident to the forum's jurisdiction. Colwell Realty Invest., Inc. v. Triple T Inns, Inc., 785 F.2d 1330 (5th Cir.1986). Even with this standard in mind, the nature of Millice's conduct in the Southern District of Texas is sufficient to support a finding that the minimum contacts necessary for specific jurisdiction are present. The facts present in the instant case are analogous to the situation in Command-Aire Corp. v. Ontario Mechanical Sales and Service Inc., 963 F.2d 90 (5th Cir.1992). In Command-Aire, personal jurisdiction over the nonresident defendant was upheld when a contract for sale was entered into which provided for dispute resolution in Texas, was performed partially in Texas, and the defendant traveled...

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