Stein v. Deason

• Decision Date: 21 April 2005
• Docket Number: No. 05-03-01812-CV.,05-03-01812-CV.
• Parties: Gordon STEIN d/b/a Stein & Associates, Appellant, v. Darwin DEASON, Appellee.
• Court: Texas Supreme Court

165 S.W.3d 406

Gordon STEIN d/b/a Stein & Associates, Appellant, v. Darwin DEASON, Appellee.

No. 05-03-01812-CV.

Court of Appeals of Texas, Dallas.

April 21, 2005.

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Timothy D. Zeiger, McKinley & Zeiger, P.C., and Brent William Bailey, Dallas, for Appellant.

Steve Sumner, Sumner, Schick, Hamilton & Pace, and Jerrod L. Davis, Dallas, for Appellee.

Before Justices FITZGERALD, LANG, and LANG-MIERS.

OPINION NUNC PRO TUNC

Opinion by Justice LANG.

We withdraw our January 10, 2005 opinion and issue this nunc pro tunc opinion in its place to correct the style of this case. The judgment remains unchanged.

In a single issue in this interlocutory appeal, Gordon Stein d/b/a Stein & Associates contends the trial court erred in overruling his special appearance in a suit brought by Darwin Deason. See Tex. Civ. Prac. & Rem.Code Ann. § 51.014(a)(7) (Vernon 2004-05). For the following reasons, we resolve Stein's issue against him and affirm the trial court's order.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2001, Deason, a Texas resident, hired Stein, a California resident, to produce architectural design work for residential construction on property Deason owned in California. This design work was completed in September 2001. According to Deason, on a visit to Deason in Dallas at an unspecified date in 2001, Stein represented to Deason that he was a licensed architect. In November 2002, Deason went to California to discuss with Stein modification of the original design project. As a result of the meeting, Deason hired Stein for the "redesign" project. Stein was to: (1) make changes to the schematic design drawings developed during the original design project; (2) work with the local building officials and the local architectural review committee to obtain the necessary approvals and variances for the construction; and (3) work with Deason's Dallas, Texas general contractor.

In December 2002, Stein sent Deason an invoice respecting the redesign project for $35,000. Deason paid this invoice. Stein also quoted Deason a fee of more than $2 million for the entire redesign project. In March 2003, Stein completed the schematics and sent them to the general contractor. Later in March, Stein resigned from the redesign project, but he agreed to attend meetings with local building officials regarding approval and permits for the redesign. A newly-hired architect asked Stein for the original schematics and other materials that Stein prepared, including a license to use the schematics. Stein refused to release the documents unless he was paid for the meetings he attended with the local building officials after he announced his intention to resign.

Deason sued Stein asserting these causes of action: (1) violation of the Texas Deceptive Trade Practices Act arising from allegations that Stein represented that he was a licensed architect, when in fact he was not licensed; (2) breach of contract by refusing to deliver the schematics after resigning, attempting to collect a debt not owed, and failing to "acknowledge" the license; (3) fraud; and (4) violation of the Texas Debt Collection Practices Act. As damages, Deason requested (1) restitution of all consideration Deason paid to Stein, including payments for the original architectural design work and the $35,000 payment; (2) treble, mental anguish, and punitive damages; (3) pre- and post-judgment interest; (4) attorney's fees; and (5) all costs of court.

After Stein failed to answer, Deason obtained a default judgment. Subsequently, Stein filed a "Rule 120a Special Appearance," which was supported by a his affidavit, a "First Amended Rule 120a Special Appearance," and a "Motion for New Trial Subject to Rule 120a Special Appearance." The special appearance was set for a hearing. Deason moved for a continuance of the hearing on the special appearance and filed a response to Stein's special appearance, supported by affidavits. Following a hearing, the trial court signed an order overruling Stein's special appearance. This accelerated appeal timely followed. See Tex.R.App. P. 28.1.

II. STANDARD OF REVIEW AND APPLICABLE LAW

"[P]ersonal jurisdiction concerns the court's power to bind a particular person or party." CSR Ltd., v. Link, 925 S.W.2d 591, 594 (Tex.1996) (orig.proceeding). A special appearance is used to challenge the trial court's jurisdiction over the person based on the claim that such person is not amenable to process in this State. See Tex.R. Civ. P. 120a.

The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provisions of the Texas long-arm statute. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex.2002). A nonresident defendant challenging personal jurisdiction through a special appearance carries the burden of negating all bases of personal jurisdiction. Id. The exercise of personal jurisdiction over a nonresident is ultimately a question of law that often requires the resolution of factual issues as well. Kytel Int'l Group, Inc. v. Rent-A-Ctr., Inc., 132 S.W.3d 717, 719 (Tex.App.-Dallas 2004, no pet.) (citing Marchand, 83 S.W.3d at 794). We review the trial court's fact findings for legal and factual sufficiency, but conduct a de novo review of its legal conclusions. Id. Because the trial court did not file findings of fact and conclusions of law in this case, we imply all findings of fact necessary to support the trial court's order that are supported by the evidence. Id. at 720 (citing Marchand, 83 S.W.3d at 795). The trial court's order overruling Stein's special appearance states that the trial court considered Stein's special appearance, Deason's response, original petition, and motion for default judgment, the affidavits on file, and the arguments of counsel. Accordingly, the record reflects that the trial court did not consider any evidence offered at the hearing on the special appearance, and there is no reporter's record of the hearing in the appellate record.

A Texas court may exercise jurisdiction over a nonresident defendant if (1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction is consistent with the due process clause of the United States Constitution. Marchand, 83 S.W.3d at 795. The Texas long-arm statute permits Texas courts to exercise jurisdiction over a nonresident that does business in Texas. TEX. CIV. PRAC. & REM.CODE ANN. § 17.042 (Vernon 1997). The long-arm statute defines "doing business" as (1) contracting by mail or otherwise with a Texas resident with performance either in whole or in part in Texas, (2) commission of a tort in whole or in part in Texas, (3) recruitment of Texas residents, directly or through an intermediary located in Texas, or (4) performance of any other acts that may constitute doing business. Id. The broad language of the long-arm statute permits a Texas court to exercise jurisdiction as far as the federal constitution will permit. Marchand, 83 S.W.3d at 795. Consequently, in determining whether jurisdiction exists, we need only determine whether the exercise of jurisdiction comports with the due process clause of the United States Constitution. See City of Riverview, Mich. v. Am. Factors, Inc., 77 S.W.3d 855, 857 (Tex.App.-Dallas 2002, no pet.).

The due process clause of the federal constitution permits a court to exercise jurisdiction over a nonresident defendant if (1) the defendant has purposefully established minimum contacts with the forum state, and (2) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Federal due process requires the defendant to "purposefully avail" itself of the privilege of conducting activity within the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The defendant's activities must justify a conclusion that the defendant could reasonably anticipate being haled into a Texas court. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex.2002), cert. denied, 537 U.S. 1191, 123 S.Ct. 1271, 154 L.Ed.2d 1025 (2003). While not determinative, foreseeability is an important consideration in deciding whether a nonresident defendant has purposefully established minimum contacts with the forum state. Marchand, 83 S.W.3d at 795.

A defendant's contacts with a forum state may give rise to either general or specific jurisdiction. Id. at 795-96. The issue in this appeal is whether specific personal jurisdiction vested. Specific jurisdiction exists if the defendant's activities have been "purposefully directed" to the forum and the litigation results from injuries arising out of or relating to those activities. Magic House AB v. Shelton Beverage L.P., 99 S.W.3d 903, 908 (Tex.App.-Dallas 2003, no pet.). The defendant's purposeful conduct, not the unilateral acts of the plaintiff, must have caused the contact. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). In analyzing minimum contacts, it is not the number, but rather the quality and nature of the nonresident defendant's contacts with the forum state that are important. Gustafson v. Provider HealthNet Servs., Inc., 118 S.W.3d 479, 483-84 (Tex.App.-Dallas 2003, no pet.). In determining specific jurisdiction, we focus on the relationship among the defendant, the forum, and the litigation. Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex.1991).

In addition to minimum contacts with the forum state, personal jurisdiction requires that the exercise of jurisdiction comport with traditional notions of fair play and substantial justice. Marchand, 83 S.W.3d at 795. In determining whether the exercise of jurisdiction will offend traditional notions of fair play and...