Largent v. Cassius Classic Cars & Exotics, LLC

• Decision Date: 10 December 2020
• Docket Number: No. 02-20-00248-CV,02-20-00248-CV
• Court: Court of Appeals of Texas
• Parties: ADAM LARGENT, Appellant v. CASSIUS CLASSIC CARS & EXOTICS, LLC, Appellee

ADAM LARGENT, Appellant v. CASSIUS CLASSIC CARS & EXOTICS, LLC, Appellee

No. 02-20-00248-CV

Court of Appeals Second Appellate District of Texas at Fort Worth

December 10, 2020

On Appeal from the 48th District Court Tarrant County, Texas

Trial Court No. 048-316092-20

Before Kerr, Birdwell, and Wallach, JJ.

Memorandum Opinion by Justice Birdwell MEMORANDUM OPINION

In 2020, Cassius Classic Cars & Exotics, LLC brought suit in Texas against Adam Largent, a Washington resident. Cassius alleged DTPA violations, fraud, breach of contract, and negligence. Largent filed a special appearance in which he argued that Texas lacked personal jurisdiction over him. The trial court denied the special appearance, and Largent appealed.

In resolving this appeal, we draw guidance from Moncrief Oil International Inc. v. OAO Gazprom, 414 S.W.3d 142, 147 (Tex. 2013). That case's comparable facts and salient reasoning show that Texas can assert specific jurisdiction over Cassius's DTPA, fraud, and contract claims. However, Moncrief Oil also counsels that Cassius fell short of establishing minimum contacts for its negligence claim. We therefore reverse and render a judgment of dismissal as to the negligence claim. We affirm the denial of the special appearance in all other respects.

I. STANDARD OF REVIEW

In a challenge to personal jurisdiction, the plaintiff and the defendant bear shifting burdens of proof. Old Republic Nat'l Title Ins. v. Bell, 549 S.W.3d 550, 559 (Tex. 2018). The plaintiff bears the initial burden of pleading allegations that suffice to permit a court's exercise of personal jurisdiction over the nonresident defendant. Id.; Searcy v. Parex Res., Inc., 496 S.W.3d 58, 66 (Tex. 2016). To determine whether the plaintiff satisfied its pleading burden and to determine the basis for jurisdiction alleged by the plaintiff, a court considers the allegations in the plaintiff's petition as well as those in itsresponse to the defendant's special appearance. Am. Refrigeration Co. v. Tranter, Inc., No. 02-15-00265-CV, 2016 WL 5957018, at *3 (Tex. App.—Fort Worth Oct. 13, 2016, no pet.) (mem. op.); accord Madison Dev. Grp. LLC v. Mattress Firm, Inc., 608 S.W.3d 376, 388-89 (Tex. App.—Houston [1st Dist.] 2020, no pet.). Once the plaintiff has met this burden, the defendant then assumes the burden of negating all potential bases for personal jurisdiction in the plaintiff's pleadings. Searcy, 496 S.W.3d at 66.

The ultimate question of whether a court has personal jurisdiction over a nonresident defendant is a question of law we review de novo. Old Republic, 549 S.W.3d at 558. When the trial court does not issue findings of fact and conclusions of law, we imply all relevant facts necessary to support the judgment that are supported by evidence. Id.; Moncrief Oil, 414 S.W.3d at 150. We may review these findings for legal and factual sufficiency. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002).

II. APPLICABLE LAW

Texas courts have personal jurisdiction over a defendant when the Texas long-arm statute grants jurisdiction and the exercise of jurisdiction comports with federal and state constitutional guarantees of due process. Searcy, 496 S.W.3d at 66. Texas's long-arm statute stretches as far as due process will allow, so federal due-process requirements shape the contours of Texas courts' jurisdictional reach. Id.

A state's exercise of jurisdiction comports with federal due process if (1) the nonresident defendant has "minimum contacts" with the state and (2) the exercise ofjurisdiction "does not offend traditional notions of fair play and substantial justice." Cornerstone Healthcare Grp. Holding, Inc. v. Nautic Mgmt. VI, L.P., 493 S.W.3d 65, 70 (Tex. 2016) (cleaned up) (quoting Walden v. Fiore, 571 U.S. 277, 283, 134 S. Ct. 1115, 1121 (2014)). A defendant establishes minimum contacts with a forum when it purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Moncrief Oil, 414 S.W.3d at 150. Three primary considerations underlie the purposeful-availment analysis: (1) only the defendant's contacts with the forum are relevant, not the unilateral activity of another party or third person; (2) the defendant's acts must be purposeful and not random, isolated, or fortuitous; and (3) the defendant must seek some benefit, advantage, or profit by availing itself of the forum such that it impliedly consents to suit there. Cornerstone, 493 S.W.3d at 70-71. Although physical presence in the forum is a relevant contact, it is not a prerequisite to jurisdiction. Cornerstone, 493 S.W.3d at 71 (quoting Walden, 571 U.S. at 285, 134 S. Ct. at 1122).

Minimum contacts may create either general or specific personal jurisdiction. TV Azteca v. Ruiz, 490 S.W.3d 29, 37 (Tex. 2016). A court has general jurisdiction over a nonresident defendant whose affiliations with the state are so continuous and systematic as to render it essentially at home in the forum state. Daimler AG v. Bauman, 571 U.S. 117, 127, 134 S. Ct. 746, 754 (2014). For an individual such as Largent, the paradigm forum for the exercise of general jurisdiction is the individual's domicile. Id. at 137, 134 S. Ct. at 760. When a court has general jurisdiction over a nonresident, itmay exercise jurisdiction "even if the cause of action did not arise from activities performed in the forum state." TV Azteca, 490 S.W.3d at 37 (quoting Spir Star AG v. Kimich, 310 S.W.3d 868, 872 (Tex. 2010)).

"Unlike general jurisdiction, which requires a more demanding minimum contacts analysis, specific jurisdiction may be asserted when the defendant's forum contacts are isolated or sporadic, but the plaintiff's cause of action arises out of those contacts with the state." Spir Star, 310 S.W.3d at 873 (citations and internal quotations omitted). To assess whether there is specific jurisdiction, we focus on the relationship among the defendant, the forum, and the litigation. Id. Specific jurisdiction is appropriate when (1) the defendant's contacts with the forum state are purposeful, and (2) the cause of action arises from or relates to the defendant's contacts. Id. Parties who reach out beyond one state and create continuing relationships and obligations with citizens of another state are subject to regulation and sanctions in the other state for the consequences of their activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473, 105 S. Ct. 2174, 2182 (1985); Moncrief Oil, 414 S.W.3d at 151. Where individuals purposefully derive benefit from their interstate activities, it may well be unfair to allow them to escape having to account in other states for consequences that arise proximately from such activities. Burger King, 471 U.S. at 473-74, 105 S. Ct. at 2183. However, "but-for causation alone is insufficient" to establish minimum contacts; it is not enough that the harm would not have been possible without the defendant's contacts. Moncrief Oil,414 S.W.3d at 157 (citing Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007)).

Specific jurisdiction requires us to analyze jurisdictional contacts on a claim-by-claim basis. Id. at 150. A plaintiff bringing multiple claims that arise out of different forum contacts of the defendant must establish specific jurisdiction for each claim. Id.

III. MINIMUM CONTACTS

On appeal, Largent brings three issues, which relate to (1) whether the trial court erred in denying the special appearance (2) because there is no general jurisdiction and (3) no specific jurisdiction.

In Cassius's petition and response to the special appearance, it alleged the following facts pertaining to Largent's contacts with Texas:

• Largent marketed himself online as a seller of vintage trucks and a restoration expert, and the Texas-based company Cassius came across that marketing. Cassius bought a truck from Largent through an eBay auction. After the auction, Largent called Cassius in Texas, without any invitation on Cassius's part, to inquire about doing further business.

• Largent proposed a plan: Cassius would loan Largent a truck and a trailer (which were located in Texas), and Largent would transport two vintage Broncos belonging to Cassius from Texas to Washington for restoration. On the call, Largent also convinced Cassius to meet with him in person.

• Largent traveled to Cassius's office in Texas to pitch the company on a continuing business venture. Largent gave a prepared sales presentation in which he represented that he had the skill required to restore vintage vehicles for a fraction of his competitor's prices.

• At the meeting, Largent and Cassius negotiated a contract price ($15,000) for the plan to haul Cassius's Broncos back to Largent's shop in Washington. While Largent was in Texas, Cassius paid him the $15,000 and lent him the truck and trailer.

• Once back in Washington, Largent neglected to repair the Broncos.

• Via communications with Texas, Largent continued to sell Cassius vehicles that Largent assured were of the highest quality.

• Largent told Cassius that the truck he had used to haul the Broncos to Washington was "fried." Largent convinced Cassius to pay for third-party shipping to get the truck back to Texas, whereupon Cassius learned that it was simply out of fuel. Cassius began to question the quality of Largent's work. It told Largent to stop all work, but Largent continued to do unauthorized restorative work and bill Cassius for it in Texas. Cassius also demanded the return of its truck and trailer, but Largent failed to return them.

Cassius brought four causes of action against Largent: DTPA violations, fraud, breach of contract, and negligence.

Based on this factual scenario, we see nothing that approaches general jurisdiction. There was little about Largent's dealings with Cassius or his single visit to the state that would have made him essentially at home here. See Daimler, 571 U.S. at 127, 134 S. Ct. at 754. We sustain Largent's second issue. Thus,...