Petrie v. Widby, 05-06-00120-CV.

Citation194 S.W.3d 168
Decision Date14 June 2006
Docket NumberNo. 05-06-00120-CV.,05-06-00120-CV.
PartiesRichard H. PETRIE, Appellant, v. Joan P. WIDBY and Helene P. McWilliams, as Co-Executrices of the Estate of Helen M. Petrie, Appellees.
CourtCourt of Appeals of Texas

Mark Heidenheimer, Mark Heidenheimer, P.L.L.C., McKinney, for Appellant.

Gregory J. Lensing and Mark Douglas Cronenwett, Cowles & Thompson, P.C., Dallas, for Appellee.

Before Justices FITZGERALD, FRANCIS, and LANG-MIERS.

OPINION

Opinion by Justice LANG-MIERS.

In his sole issue in this interlocutory appeal, Richard Petrie contends the trial court erred by overruling his special appearance. His sisters, Joan Widby and Helene McWilliams, sued him for, among other things, misrepresentations about the transfer of ownership of stock owned by their mother, Helen Petrie. For the reasons that follow, we affirm the order of the trial court.

FACTUAL AND PROCEDURAL BACKGROUND

Helen Petrie, the parties' mother, owned 4,032 shares of Norfolk Southern Corp. stock valued at approximately $180,000. In 1973, while living in Tennessee, Helen executed her Last Will and Testament in which she devised all of her property to Petrie, Widby, and McWilliams in equal shares. In early 2003, McWilliams asked an attorney whether Helen's will would have to be probated. She told the attorney that all of their mother's assets were in her and her siblings' names except the stock. The attorney advised McWilliams that probate would be unnecessary if Helen added Petrie, Widby and McWilliams' names to the stock certificates. McWilliams told Petrie about the attorney's advice, and Petrie told his sister he would handle the paperwork necessary to add their names to the stock certificates.

In March 2003, Helen was diagnosed with dementia and possibly early-onset of Alzheimer's disease. Four months later in July 2003, Helen gave Petrie her power of attorney. She also signed a form transferring ownership of the stock to Petrie and herself as joint tenants with right of survivorship.

Around this same time, Petrie told McWilliams that Norfolk Southern would not add all three of their names to their mother's stock certificates but would only add one name and that he put his name on the stock certificates along with their mother's name. McWilliams testified she trusted her brother and thought when their mother passed away, they would avoid probate and Petrie would split the stock three ways. McWilliams testified that Petrie did not tell her the stock was placed in both his and his mother's names as joint tenants with right of survivorship. A month later, in August 2003, Petrie moved Helen from Tennessee to Texas.

Around March 2004, after the stock had already been transferred to the joint tenancy in Helen's and Petrie's names, Petrie told his sister Widby that he wanted to schedule a meeting in Texas with an attorney to discuss preservation of their mother's assets and that she should attend the meeting. The meeting was held in Dallas, Texas with a Texas attorney, Charles Bedsole. During the meeting, Petrie and Widby discussed their mother's assets with Bedsole and talked about what they needed to do and what the future expenses would be if Helen was placed in an assisted living facility. Widby testified that Bedsole asked Petrie to list Helen's assets, and he listed the stock. She also testified that Petrie represented to the attorney that the stocks "were mother's." Petrie did not disclose during this meeting that the stock was held in Helen's and his names as joint tenants with right of survivorship.

On May 30, 2004, Helen passed away in Texas. She was buried in Tennessee. In June, the family held a memorial service in Collin County, Texas. Following the service, Petrie told McWilliams that he was concerned about having to pay all of the taxes on the stock. McWilliams told him that once the stock was equally distributed, each of them would pay their share and he would not be responsible for all of the taxes. McWilliams testified that Petrie said, "Well, I don't know, I have to check into that." She testified Petrie did not disclose that he owned the stock with Helen as joint tenants with right of survivorship. Sometime that fall, McWilliams asked Petrie whether he needed her help in getting the stock distributed. She testified Petrie told her he was having to sign "one form after another" and "this is all we can do right now."

At some point, McWilliams and Widby learned their brother had received all of the stock and that he refused to distribute their share to them. They filed this lawsuit, seeking a declaration that the power of attorney their mother gave to Petrie was invalid because Helen was incompetent at the time she signed it. They also alleged negligent misrepresentation, fraud, breach of fiduciary duty, conversion, and sought the imposition of a constructive trust. They contended Petrie negligently and intentionally misrepresented the facts surrounding the transfer of ownership of the stock and remained silent when he had a duty to disclose the facts. Petrie filed a special appearance in which he argued the trial court did not have personal jurisdiction over him because he had no continuous and systematic contacts with Texas and because he did not commit a tort in Texas.

Findings of Fact and Conclusions of Law

After a hearing, the trial court overruled Petrie's special appearance and filed two sets of findings of fact and conclusions of law. On appeal, Petrie challenges the trial court's order denying his special appearance, arguing there is no or insufficient evidence to support several of the trial court's findings of fact and conclusions of law. For purposes of our decision, we quote findings of fact numbers 15 and 211:

15. In or around March, 2004, Mr. Petrie and Plaintiff Joan P. Widby, at Mr. Petrie's prompting, retained and met in person with an attorney in Dallas, Texas, Charles Bedsole, to discuss, among other things, the preservation of Ms. Petrie's assets. Defendant made a number of statements during this meeting. Among other statements, Mr. Petrie stated in this meeting, while in the presence of Mr. Bedsole and Plaintiff Joan Widby, that Helen Petrie owned approximately 4032 shares of stock in Norfolk Southern company and that these shares of Stock belong to Helen Petrie. Defendant made this statement in response to an inquiry from Mr. Bedsole into what assets were owned by Ms. Petrie at the time that would then belong to Ms. Petrie's estate upon her passing. Mr. Bedsole solicited this information so that he could determine how such assets could be protected from creditors, estate taxes and any others. Mr. Petrie, despite knowing about the prior execution of the form ostensibly giving himself a joint ownership with right of survivorship in the Stock, did not inform either Mr. Bedsole or Plaintiff Widby that the Stock, due to the execution of that form, was not an asset that would belong to Mr. Petrie's estate upon her passing. Had Mr. Petrie indicated such, Plaintiffs would then have been able to cause documentation to be executed to either change ownership in the Stock back to Ms. Petrie individually or to have Plaintiffs and Defendant be joint owners in the Stock with right of survivorship. Plaintiffs' claims in substantial part thus arise from and relate to Defendant's attendance at and statements and omissions made during the March 2004 meeting in Dallas, Texas.

* * *

21. Ms. Petrie passed away on May 31, 2004 in Collin County, Texas. At the time of her death, Ms. Petrie's residence was: 2401 Country View Lane, No. 333, McKinney, Collin County, Texas, 75069. Several days after Ms. Petrie's passing, Mr. Petrie, while in Collin County, Texas, told Plaintiff Helene P. McWilliams that he was concerned that he, individually, would be required to pay significant taxes on the Stock. Plaintiff Helene P. McWilliams responded that he would not and that each of the Parties would pay their own share of the taxes for the Stock after same was distributed to each of them. Mr. Petrie said nothing further on the subject and again failed to say anything about his having made himself a joint owner of the Stock with right of survivorship pursuant to the alleged Power of Attorney. Had Mr. Petrie informed Plaintiffs of such, they would have had the opportunity to cause necessary documents to be executed to either change ownership in the Stock back to Ms. Petrie individually or to have Plaintiffs and Defendant be joint owners in the Stock with right of survivorship.

Petrie also challenges the trial court's conclusion of law that the exercise of personal jurisdiction over him will not offend traditional notions of fair play and substantial justice.

The Parties' Contentions

Petrie contends he is not subject to the trial court's jurisdiction because (1) he does not own a business or conduct business in Texas, (2) all of the transactions related to the transfer of stock from Helen to him were done in Tennessee, (3) the stock certificates remained in Tennessee until Helen's death, and (4) after her death, new stock certificates were issued to him in Kansas.

On the other hand, Widby and McWilliams argue the trial court had both specific and general jurisdiction because Petrie purposefully established minimum contacts with Texas. They argue the trial court had specific jurisdiction based on two misrepresentations and omissions Petrie made while in Texas: (1) in the March 2004 meeting with the attorney in Dallas, Petrie misrepresented the ownership of the stock and failed to disclose that he owned the stock with Helen as joint tenants with right of survivorship; and (2) in the June 2004 conversation in Collin County, Texas, following their mother's memorial service, when McWilliams and Petrie were discussing payment of the taxes on the distribution of the stock, Petrie failed to disclose to McWilliams that he owned the stock with Helen as a joint tenant with right of survivorship. They...

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