Steve Tyrell Productions, Inc. v. Ray

• Decision Date: 13 June 1984
• Docket Number: No. 14035,14035
• Parties: STEVE TYRELL PRODUCTIONS, INC., et al., Appellants, v. Viki Lynn RAY, Appellee.
• Court: Texas Court of Appeals

Page 430

674 S.W.2d 430

STEVE TYRELL PRODUCTIONS, INC., et al., Appellants, v. Viki Lynn RAY, Appellee.

No. 14035.

Court of Appeals of Texas,

Austin.

June 13, 1984.

David H. Donaldson, Jr., David Cohen, Graves, Dougherty, Hearon & Moody, Austin, for appellants.

John L. Foster, Minton, Burton, Foster & Collins, Austin, for appellee.

PHILLIPS, C.J., and POWERS and BRADY, JJ.

PHILLIPS, Chief Justice.

Steve Tyrell Productions, Inc., Steve Tyrell, and David A. Jackson appeal from a default judgment by which the trial court decreed that appellee Viki Lynn Ray recover approximately $200,000, declared that certain contracts between appellants and appellee were void, and determined that appellee was entitled to certain other relief.

We reverse and remand.

In her petition appellee alleged that in the course of conducting various business arrangements appellants and Michael Manteras breached certain agreements, made fraudulent misrepresentations, and committed other wrongful acts against her. She failed to allege that any of these acts occurred in Texas.

Appellee additionally pleaded that appellant Steve Tyrell Productions, Inc. is a California corporation and that appellants Steve Tyrell and David Jackson are citizens of California. It was her contention that appellees did not maintain "a place of regular business in [Texas] nor a designated agent upon whom service may be made and are thus deemed to have appointed the Secretary of State of Texas as agent upon whom service of process may be made."

The trial court rendered a default judgment against appellants on May 6, 1983; in its findings and conclusions the trial court found that service was made upon appellants under the provisions of Tex.Rev.Civ.Stat.Ann. art. 2031b (1964) (the Texas Long Arm Statute); the trial court also found that appellants had engaged in business in Texas, with regard to the transactions complained of by appellee, to an extent sufficient to confer upon Texas and its courts personal jurisdiction over appellants.

On May 9, 1983, after entry of the default judgment, appellants filed a "special appearance." On May 27, 1983 appellants filed a motion for new trial; therein they noted that no hearing had been held on the merits of the special appearance and asserted that their right to a determination of the special appearance was not waived by the May 27th filing.

In their first point of error appellants contend that in rendering default judgment against them the trial court erred for the reason that appellees did not strictly comply with the mode of service set out in art. 2031b. Appellants correctly note that in order to support a default judgment the record must affirmatively show a strict compliance with the mode of service prescribed by art. 2031b; where the record fails in this regard the trial court must be held to have entered the default judgment without jurisdiction. McKanna v. Edgar, 388 S.W.2d 927 (Tex.1965).

Here, although appellee's petition asserts that appellants committed numerous wrongful acts against appellee, her pleading fails to allege that any of these acts were committed in Texas and also fails to allege that any of these acts are in any way related to Texas. Article 2031b may only be used to obtain service on defendants under certain conditions: one such condition is that the defendant must be "doing business" in Texas. Since appellee has failed to allege in her petition that appellants were doing business in Texas, we must hold that the trial court was without jurisdiction to render the default judgment. See McKanna v. Edgar, supra.

Appellee, in oral argument, conceded the aforementioned point of error. Although both appellants and appellee agree that the judgment must be reversed, they disagree as to what disposition should accompany reversal. Appellants argue that this court should reverse the trial court's judgment and order the cause be dismissed pursuant to appellants' special appearance; in the alternative they argue that this court should remand the cause with instructions requiring the trial court to conduct a hearing on and rule on the special appearance motion.

Appellee contends that appellants' special appearance was in reality a general appearance. She alternatively contends that if appellants made a valid special appearance that it was waived by their subsequent conduct. Appellee would have this court remand the cause with instructions to the trial court providing that appellants are subject to the jurisdiction of the trial court for all purposes.

The parties have raised critical questions regarding the nature of a special appearance. Our treatment of these questions would be merely advisory, and we would not pursue them, but for appellants' fourth point of error. Therein appellants aver that the trial court erred in failing to sustain their special appearance because, they assert, as a matter of law they were not amenable to service of process.

In order for any court to obtain in personam jurisdiction over a defendant the defendant must be given notice of the suit which is brought against him; this notice must comply with constitutional and statutory requisites. 2 McDonald, Texas Civil Practice §§ 9.01.1-9.01.4 (1982); 2 Wicker and Benson, Texas Lawyer's Guide § J.2.39 (1981). Additionally, there are constitutional and statutory limits on the power of a state court to subject an unwilling nonresident defendant to in personam jurisdiction: there must exist a certain relationship between the nonresident defendant and the forum state. U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex.1977); 2 Wicker and Benson, supra § J.2.37.

A failure to satisfy either the notice component or the power component of in personam jurisdiction may be waived by a defendant. In waiving these jurisdictional prerequisites the defendant is said to have made a "general appearance." 2 Wicker and Benson, supra § J.2.39.

Prior to the adoption of Tex.R.Civ.P.Ann. 120a (added by order of April 12, 1962; eff. Sept. 1, 1962), the filing by a nonresident defendant of any defensive pleading in a Texas court constituted a general appearance; this was true even when the only defensive pleading filed constituted a challenge to the court's jurisdiction. Tex.R.Civ.P.Ann. 120a, General Commentary--1966 (1979). Rule 120a changed this result by providing that a "special appearance may be made ... for the purpose of objecting to the jurisdiction of the court over the person or property of the defendant on the ground that such party or property is not amenable to process issued by the courts of this State." (emphasis added).

When the above-emphasized language of Rule 120a is examined it becomes readily apparent that Rule 120a was designed only to allow a defendant to challenge the power of the state court to exercise in personam jurisdiction (amenability to process). The Texas Supreme Court has held that the resolution of the question of whether a nonresident defendant (served pursuant to art. 2031b) is amenable to process depends upon whether such nonresident possesses sufficient contacts with Texas so as to satisfy the constitutional test of due process. Siskind v. Villa Foundation for Educ., Inc., 642 S.W.2d 434 (Tex.1982). To satisfy that constitutional test, the following elements must exist: (1) the nonresident 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 a variety of factors. Siskind v. Villa Foundation for Educ., Inc., supra; but see Hall v. Helicopteros Nacionales De Colombia, 638 S.W.2d 870 (Tex.1982), rev'd on other grounds, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (cause of action need not arise from act occurring within forum state if nonresident has numerous contacts with forum state).

A special appearance is not the proper means of advancing a complaint about defective service or defective process. Newton, Survey: Conflict of Laws, 36 S.W.L.J. 397, 403 (1982); Thode, In Personam Jurisdiction; Article 2031B, The Texas "Long Arm" Jurisdiction Statute; And The Appearance to Challenge Jurisdiction in Texas and Elsewhere, 42 Tex.Law Rev. 279, 312 (1964); but see TM Productions, Inc. v. Blue Mountain B. Co., 623 S.W.2d 427 (Tex.Civ.App.1981), writ ref'd n.r.e., 639 S.W.2d 450 (Tex.1982). The words "amenable to process" relate only to the issue of whether Texas courts could obtain jurisdiction over the nonresident upon the claim asserted; a defect in a petition that can be cured does not affect such amenability. Thode, supra at 312-13; see 2 McDonald, supra § 9.05.3 (1982 & Supp.1983).

A motion to quash is the proper method of challenging defective service or defective process. Thode, supra at 313 n. 195; 2 Wicker and Benson, supra § J.2.58. Such defects in mode of service relate only to notice. When a nonresident defendant attempts to challenge the manner of service or the form of process by way of a special appearance, such action should be treated as a motion to quash. Thode, supra at 313 n. 195.

When citation of service is quashed on motion of the defendant, such defendant will be deemed to have entered his appearance at a statutorily specified date in the future. Tex.R.Civ.P.Ann. 122 (1979). Likewise, if a default judgment is reversed on appeal for a defect in the mode of service of process (including the failure to adequately allege jurisdictional facts in the petition), the defendant shall be deemed to have entered an appearance as to future proceedings in the trial court. McKanna v. Edgar, supra; Tex.R.Civ.P.Ann. 123 (1979).

From the foregoing, an appellate court's disposition duty becomes clear. If a nonresident properly makes and litigates a special appearance based upon lack of amenability to process, and the...