Old Republic Nat'l Title Ins. Co. v. Bell

• Decision Date: 01 June 2018
• Docket Number: NO. 17–0245,17–0245
• Citation: 549 S.W.3d 550
• Parties: OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Subrogee of Chitra Chandrasekaran, Petitioner, v. Lisa Simone BELL f/k/a Lisa Simone Overman, f/k/a Lisa Simone, and Robin W. Goldsmith, Respondents
• Court: Texas Supreme Court

549 S.W.3d 550

OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, a Subrogee of Chitra Chandrasekaran, Petitioner,

v.Lisa Simone BELL f/k/a Lisa Simone Overman, f/k/a Lisa Simone, and Robin W. Goldsmith, Respondents

NO. 17–0245

Supreme Court of Texas.

Argued February 27, 2018

OPINION DELIVERED: June 1, 2018

Jeremy T. Brown, Irelan McDaniel PLLC, Dallas, TX, Blaine Hummel, Bradford Wald Irelan, Irelan McDaniel, P.L.L.C., Houston, TX, for Petitioner.

Kern A. Lewis, Kern Lewis Law, Keller, TX, for Respondents.

Justice Green delivered the opinion of the Court.

This personal-jurisdiction dispute arises from a series of money transfers between a Texas resident and a Louisiana resident in connection with the sale of Texas property. Old Republic National Title Insurance Company alleged that the transfers were fraudulent and sued Lisa Bell, a Texas resident, and Robin Goldsmith, a Louisiana resident, under the Texas Uniform Fraudulent Transfers Act. We must determine whether Texas courts have personal jurisdiction over Goldsmith based on her contacts with the state. We hold that Goldsmith did not purposefully avail herself of the state of Texas such that Texas courts may exercise personal jurisdiction over her as to Old Republic's claim. Accordingly, we affirm the judgment of the court of appeals.

I. Background

The underlying lawsuit involves the sale of Bell's residential property to Chitra Chandrasekaran on July 17, 2012, and Bell's subsequent transfer of the proceeds to Goldsmith. Over a year after the sale of the house, the United States government informed Chandrasekaren that it had a lien on the property, alleging that it was community property that belonged to both Bell and her ex-husband, Bruce Benson, and demanding payment in full to satisfy the lien. Old Republic, the title company that insured title for sale of the property to Chandrasekaran, paid the federal government $202,574.88 in exchange for release of the lien. Old Republic then sued Bell and Goldsmith, alleging that they had participated in a fraudulent-transfer scheme with its nexus in Texas.

Bell married Benson in April 2002. In October 2009, Benson pled guilty to a false claim against the United States and, as a result, the United States government garnished his property and placed a restitution lien against all of his property—actions that affected both Benson's separate property and community property held with Bell. Bell separated from Benson and filed for divorce in the spring of 2009, before Benson's conviction. After Bell separated from Benson, Goldsmith began wiring money to Bell in small amounts.¹ Bell and Goldsmith maintain that these transfers were interest-free loans between close friends to help Bell pay for living expenses so she could go back to school in the wake of her divorce. After the divorce in 2011, Bell sold the house for $215,000 and transferred the proceeds—$202,574.88—to Goldsmith, purportedly to repay Goldsmith for her financial support over the years. The sale proceeds exceeded what Bell owed Goldsmith at that time; however, Bell and Goldsmith assert that they were not keeping track of the "bottom-line number" and that they intended to "work it out later." Goldsmith continued to wire money to Bell in small amounts for "living expenses." Some time later, Bell recorded a lien on her vehicle in Goldsmith's favor.² Goldsmith asserted in her deposition that this was done as an estate-planning measure after Bell was diagnosed with cancer

.

Of course, Old Republic characterizes these transactions differently. It argues that "the transfer was part of a multi-year asset-shielding scheme Bell and Goldsmith orchestrated after the United States had garnished hundreds of thousands of dollars from Bell." Specifically, Old Republic argued in the trial court that Bell and Goldsmith defrauded Chandrasekaran and other creditors by representing that the house was Bell's separate property and was therefore not subject to the federal lien. Old Republic alleged that as part of the scheme to shield assets—including the house—from the federal lien, Goldsmith made at least eighty-one money transfers to Bell, Bell transferred the proceeds of the house to Goldsmith knowing that the federal lien had attached, Bell acted "with the intent to avoid satisfaction of the Federal Lien and to prevent Chandrasekaran from obtaining collection of her claim for reimbursement for payment of the Federal Lien in the amount of $202,574.88," and Goldsmith was a knowing participant in the scheme.

Importantly, the character of the house—as community property or as Bell's separate property—is disputed. Goldsmith argues that the house was Bell's separate property, and thus the federal lien never attached, so there could have been no fraud. As support, she presented evidence that Bell entered the contract for purchase and construction of the home and paid $5,000 in earnest money before her marriage to Benson, making it Bell's separate property under the inception-of-title doctrine. Moreover, in Bell's divorce from Benson, the court specifically found that the house was "confirmed as the separate property of Lisa Simone [Bell]." Old Republic counters that the house was community property because the purchase was completed after the marriage and the purchase deed listed the grantee as "Lisa S. Benson, a Married Woman."

In response to Old Republic's suit, Goldsmith filed a special appearance objecting to the court's jurisdiction over her. In her motion, she alleged that she had never been a resident of Texas, had never engaged in business in Texas, had never committed any tort in Texas, and did not maintain a place of business in Texas. She also alleged that Old Republic's claim against her did not arise from and was not related to any conduct purposefully directed toward Texas. In response, Old Republic argued that the court had specific jurisdiction over Goldsmith because she was "the first transferee of the asset" under the Texas Uniform Fraudulent Transfers Act (TUFTA) when Bell transferred the sale proceeds to her. See TEX. BUS. & COM. CODE § 24.009(b). Old Republic contended that Goldsmith was aware of the judgment entered against Benson in favor of the United States, making her an insider for purposes of TUFTA.

The trial court heard Goldsmith's special appearance and stated at the close of the hearing that it would be granting Goldsmith's motion. Before the trial court signed a written order, Old Republic filed a third-amended petition and a motion urging the court to reconsider its ruling. In its third-amended petition, Old Republic alleged for the first time that, in addition to specific jurisdiction, the trial court had general jurisdiction over Goldsmith based on her making numerous money transfers to Bell, communicating with Bell consistently over the phone for years, and taking liens on Texas property (Bell's vehicles). The trial court held a hearing on the motion for reconsideration, but ultimately the court denied the motion and granted Goldsmith's special appearance, "even in light of the additional jurisdictional allegations."

The court of appeals affirmed the trial court's ruling, holding that "Goldsmith's contacts with Texas are too attenuated to constitute purposeful availment and her contacts with Texas were neither continuous nor systematic." 548 S.W.3d 1, 8, 2016 WL 7245700 (Tex. App.—Fort Worth 2016, pet. granted). We granted Old Republic's petition for review. 61 Tex. Sup. Ct. J. 139 (Dec. 5, 2017).

II. Personal Jurisdiction

The sole issue before us is whether Goldsmith's contacts with the state are sufficient to confer specific jurisdiction over her as to Old Republic's fraudulent-transfer claim. As a preliminary matter, Goldsmith argues that the third-amended petition, which was filed after the special appearance hearing and ruling, was erroneously considered by the trial court and that only the pleadings on file at the time of the hearing were properly before the court. Both the trial court and the court of appeals concluded that even assuming Old Republic's third-amended petition was properly considered, the court still did not have jurisdiction over Goldsmith. 548 S.W.3d at ––––. We agree.

Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law that we review de novo. Moncrief Oil Int'l Inc. v. OAO Gazprom , 414 S.W.3d 142, 150 (Tex. 2013). When, as here, the trial court did not issue findings of fact and conclusions of law, all relevant facts that are necessary to support the judgment and supported by evidence are implied. BMC Software Belgium, N.V. v. Marchand , 83 S.W.3d 789, 795 (Tex. 2002). When jurisdictional facts are undisputed, whether those facts establish jurisdiction is a question of law. Tex. Dep't of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004). The relevant facts in this case are undisputed, as Old Republic acknowledges; therefore, we need not consider any implied findings of fact and we consider only the legal question whether the undisputed facts establish Texas jurisdiction. See id. ; Moncrief Oil Int'l Inc. , 414 S.W.3d at 150 n.4.

Texas courts may exercise personal jurisdiction over a nonresident if "(1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction is consistent with federal and state constitutional due-process guarantees." Id. at 149 ; Moki Mac River Expeditions v. Drugg , 221 S.W.3d 569, 574 (Tex. 2007). The long-arm statute is satisfied by a defendant who "commits a tort in whole or in part in this state." TEX. CIV. PRAC. & REM. CODE § 17.042(2). However, allegations that a tort was committed in Texas do not necessarily satisfy the United States Constitution. Moncrief Oil Int'l Inc. , 414 S.W.3d at 149 ; Michiana Easy Livin' Country, Inc. v. Holten , 168 S.W.3d 777, 788 (Tex. 2005).

To establish personal jurisdiction over a nonresident, federal due process requires that the nonresident must have "certain minimum contacts...