Otis Elevator Co. v. Zac Smith & Co., Inc.
| Decision Date | 13 August 1986 |
| Docket Number | No. 14517,14517 |
| Citation | 715 S.W.2d 806 |
| Parties | OTIS ELEVATOR COMPANY, Appellant, v. ZAC SMITH & COMPANY, INC., Appellee. |
| Court | Texas Court of Appeals |
Tom Broussard, Lloyd Broussard, Broussard & Broussard, Austin, for appellant.
J. Scott Howard, Larry F. York, Baker & Botts, Austin, for appellee.
Before SHANNON, C.J., and GAMMAGE and CARROLL, JJ.
Otis Elevator Company appeals from an order of the district court dismissing its lawsuit against Zac Smith & Company, Inc. ("Smith"), for lack of in personam jurisdiction. This Court will set aside the order of the district court and remand the cause for trial on the merits.
Otis sued Smith and Advanced Concrete of Texas, Inc., for breach of a contract for purchase of four elevators to be used in the construction of a hotel in Austin. Smith, a Florida corporation, filed a special appearance asserting it was not amenable to process and to the jurisdiction of the courts of this state. Tex.R.Civ.P.Ann. 120a (Supp.1986). The trial court, after a hearing, sustained Smith's objection to jurisdiction and ordered Smith dismissed from the cause. It is from this order that Otis appeals.
In September 1983, Double W Investors, an Austin property owner, entered into a contract with Advanced Concrete to build a hotel on its property. On October 25, 1983, the president of Advanced Concrete, Herbert Watkins, signed an agreement with Otis to purchase four elevators for the project. Six days later, Advanced Concrete entered into a joint venture agreement with Smith in which the parties agreed that Smith would obtain the required bond for the project and Advanced Concrete would provide a project manager at the construction site. On February 2, 1984, Double W Investors entered into a contract for construction of the hotel with the Advanced Concrete/Smith joint venture. In a letter signed by Smith's president on March 19, 1984, Watkins was authorized to act on behalf of the joint venture on all matters pertaining to its purpose. The City of Austin issued a building permit to Advanced Concrete and Smith as a joint venture in March 1984. The evidence indicates that Smith had no continuous or systematic business activity in Texas, and that its contacts with this state are limited to those previously mentioned.
By its first point of error, Otis challenges the trial court's determination that Smith was not subject to the jurisdiction of the courts of this state. In a Rule 120a special appearance hearing, a nonresident defendant has the burden of proof to negate all bases of personal jurisdiction. Siskind v. Villa Foundation for Education, Inc., 642 S.W.2d 434, 438 (Tex.1982). The courts of this state apply a three-pronged test to determine the constitutional reach of the state's jurisdiction over nonresidents who maintain only a single or few contacts with Texas. Id. at 436; U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977), cert. denied, 434 U.S. 1063, 98 S.Ct. 1235, 55 L.Ed.2d 763 (1978). To maintain jurisdiction over nonresidents such as Smith
(1) the nonresident defendant or foreign corporation must purposefully do some act or consummate some transaction in the forum state; (2) the cause of action must arise from, or be connected with, such act or transaction; and (3) the assumption of jurisdiction by the forum state must not offend traditional notions of fair play and substantial justice, consideration being given to the quality, nature, and extent of the activity in the forum state, the relative convenience of the parties, the benefits and protection of the laws of the forum state afforded the respective parties, and the basic equities of the situation.
Siskind v. Villa Foundation for Education, Inc., supra, quoting O'Brien v. Lanpar Co., 399 S.W.2d 340, 342 (Tex.1966).
The Texas "long-arm" statute provides that a nonresident entering into a contract with a Texas resident performable in part by either party in Texas shall be deemed to be doing business in Texas. Tex.Civ.Prac. & Rem.Code Ann. § 17.042 (1986); U-Anchor Advertising v. Burt, supra at 762. Smith's acts of entering into the joint venture agreement with Advanced Concrete, authorizing Watkins to act as an agent for the joint venture, contracting with Double W Investors to participate as a joint venture in the hotel's construction, and applying for and receiving a building permit from the City of Austin satisfy the first prong of the O'Brien test.
Smith contends that Texas courts cannot assert jurisdiction over it in this cause because of the requirement that the cause of action must arise from, or be connected with, its acts or...
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...another co-venturer, if such wrongful conduct was within the scope of the joint venture in issue, citing Otis Elevator v. Zac Smith & Co., 715 S.W.2d 806, 808 (Tex.App.--Austin 1986), aff'd, 734 S.W.2d 662 (Tex.1987), cert. denied, 484 U.S. 1063, 108 S.Ct. 1022, 98 L.Ed.2d 986 (1988).33 The......
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