Siskind v. Villa Foundation for Ed., Inc.

• Decision Date: 19 November 1981
• Docket Number: No. A2760,A2760
• Parties: 1 Ed. Law Rep. 1024 Jay S. SISKIND, et al, Appellants, v. The VILLA FOUNDATION FOR EDUCATION, INC., et al, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 803

624 S.W.2d 803

1 Ed. Law Rep. 1024

Jay S. SISKIND, et al, Appellants, v. The VILLA FOUNDATION FOR EDUCATION, INC., et al, Appellees.

No. A2760.

Court of Appeals of Texas, Houston (14th Dist.).

Nov. 19, 1981.

K. Ray Campbell, Byrnes, Myers, Adair & Sinex, Aubrey Dickson Martin, Byrnes, Myers, Adair & Sinex, Houston, for appellants.

David Randolph Smith, Baker & Botts, Houston, for appellees.

Before BROWN, C.J., and JUNELL and PRICE, JJ.

J. CURTISS BROWN, Chief Justice.

The trial court below sustained defendant's special appearance holding there was lack of in personam jurisdiction. Plaintiff perfected appeal claiming that defendants had the necessary minimum contact with the State of Texas to support jurisdiction. We affirm the trial court's action.

The Villa Foundation for Education, Inc. (Villa) is an Arizona Corporation located in that state. It is an institution offering a program designed to help students who are underachieving in their school environment. The program is based on supportive help and individualized instruction. Villa places listings with certain directories containing schools with similar objectives, advertises in a number of well known magazines with national or international circulation, and maintains listings in the yellow pages of telephone books in a number of locations, including some in Texas. Through these sources Villa attempts to maintain a student body consisting of members from all over the country and from other parts of the world.

Mr. Jay Siskind (Siskind or appellant) felt that his son Marc would benefit from such a program. Through Children's Resource Information Service and certain publications he was made aware of Villa's program and decided to inquire as to the possibility of enrolling Marc. Siskind called Villa and, in conformity with the normal practice, was mailed an informational packet. Siskind returned an application for admission accompanied by a fee. Upon processing the application with supportive information Villa sent Siskind an enrollment contract. He signed the enrollment contract and sent it to Villa in Arizona where it was signed and accepted by one of their agents. A copy was returned to Siskind. Marc was enrolled and completed the second semester in the 1978-79 school year.

It was Villa's practice to invite certain students who were currently enrolled to return the following year. Marc received such an invitation and Siskind was forwarded a new enrollment contract. The enrollment contract was signed and returned to Villa by Siskind with the required check for tuition but with two modifications. A provision that Arizona would be the forum for any disputes arising under the contract was deleted. And a provision that tuition was not refundable was altered to state that tuition would be refundable if Marc left the school and another student was subsequently admitted in his place. The enrollment contract was signed and accepted as modified by Villa in Arizona and a copy was returned to Siskind. Shortly thereafter, Marc was dismissed for being away from campus without permission.

Siskind filed this law suit alleging the following causes of action against Villa and against Jeanette Steinbeck, Carmen Coco, Scott Slocum and Edward Beavel, individually, and as agents of the school: (1) fraud concerning the willful misrepresentation made to Siskind about the help Marc would get at Villa; (2) expulsion without proper basis and denial of due process of law; (3) intentional and malicious conspiracy of defendants through the Standards Committee to increase tuition received by recruiting students, obtaining tuition in advance, expelling a portion of them without refund and accepting new students in their places; (4) unjust enrichment for retaining Marc's tuition; (5) defamation of Marc's character; (6) improper medical treatment of Marc as when he came home after being expelled he had contracted hepatitis; (7) breach of contract; (8) unconscionable course of conduct under the Texas Deceptive Trade Practices Act; and (9) usury in that an interest rate of 18% per annum was charged on the outstanding balance of Siskind's account with the school.

Defendants specially appeared under Tex.R.Civ.P. 120a. Jeanette Steinbeck, associate director of Villa, testified at the hearing. The trial court sustained the special appearance and dismissed the suit. The trial court made the following findings of fact:

1. That the Villa Foundation for Education, Inc., d/b/a the Villa School, (the "Villa School" herein), is a private independent school located in Toltec, Arizona.

3. That the Villa School is an Arizona Corporation.

4. That all defendants are residents of Arizona.

5. That the Villa School maintains no bank accounts within Texas.

6. That the Villa School has no real or personal property in Texas.

7. That the Villa School has no offices, telephones, or other facilities within the State of Texas.

8. That the Villa School has no officers, agents, or employees residing in Texas.

9. That all of the Villa School's officers, agents, and employees reside in Arizona.

10. That the Villa School has no agent for service of process within Texas.

11. That at and prior to the commencement of this action by plaintiffs, no employees, agents, or representatives of the Villa School entered Texas in connection with any school function for business.

12. That the Villa School advertises in numerous national and international magazines, newspapers, publications, and directories.

17. That the Villa School sends no persons into Texas to recruit students.

20. That none of the individual defendants and no representatives or employees have ever been to Texas other than the appearance of Jeanette Steinbeck as a witness at the special appearance hearing.

21. That the Villa School has never transacted any business in Texas.

The trial court also made the following conclusions of law:

1. Defendants' conduct, activities, and contacts with Texas establish that defendants did not intend to transact business in Texas or to purposefully avail themselves of the privilege of conducting business in Texas; and Defendants did not intend to invoke the protection and benefits of Texas' law.

4. Defendants do not have sufficient minimal contacts with the State of Texas to warrant exercising in personam jurisdiction under the due process clause of the 14th Amendment to the United States Constitution. This finding is based on the following:

(a) Defendants committed no purposeful act nor consummated any transaction within Texas.

(b) Plaintiffs' cause of action does not arise from any act or transaction by the defendants within Texas; all of the purposeful acts and transactions which plaintiffs allege give rise to a cause of action occurred in Arizona.

(c) Texas has no special interest in granting plaintiffs' relief.

(d) Assumption of personal jurisdiction would offend traditional notions of fair play and substantial justice considering the convenience of the parties, the extent and nature of the activities, the benefits of laws of Texas afforded to plaintiffs and defendants, and the basic equities of this case.

Siskind perfected appeal to this Court.

Appellant brings fourteen points of error which will be grouped, restated and dealt with accordingly. He complains that the trial court erred in sustaining defendants special appearance and dismissing the suit because (1) the defendants did have sufficient minimal contacts with the State of Texas to warrant exercising in personam jurisdiction (points of error 15 and 14) and (2) certain findings of fact and conclusions of law made by the trial court are not supported by the evidence (points of error 6-13).

Service of process was made on defendants under Tex.Rev.Civ.Stat.Ann. art. 2031b, the Texas Long-Arm Statute. But once the law of a forum state confers jurisdiction over the persons of the defendant, the exercise of jurisdiction must comport with the basic due process requirement of the United States Constitution. The issue in this case does not pertain to the jurisdictional facts alleged or the validity of the process or the service, but whether the constitutional requirements of due process are met. See T. M. Productions, Inc. v. Blue Mountain Broadcasting Co., 620 S.W.2d 886 (Tex.Civ.App.-Dallas 1981, no writ).

The due process test for in personam jurisdiction in a state court is whether it is reasonable in the context of our federal system to require the defendant to defend a particular suit in the state where the suit is brought. Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). The criterion of the test is whether the defendant has such minimum contacts with the forum state to be consistent with traditional notions of...