TTS, LLC v. Evenflow, LLC
| Docket Number | 05-22-00770-CV |
| Decision Date | 15 September 2023 |
| Parties | TTS, LLC, Appellant v. EVENFLOW, LLC, DAN MANSELLE, AND TRINITY LOGISTICS, INC., Appellees |
| Court | Texas Court of Appeals |
On Appeal from the 429th Judicial District Court Collin County Texas Trial Court Cause No. 429-05512-2021
Before Justices Carlyle, Goldstein, and Kennedy
TTS LLC, brings this interlocutory appeal of the trial court's order sustaining the amended special appearance filed by Trinity Logistics, Inc., and dismissing the claims against it. In two issues, TTS argues the trial court erred in concluding it lacked personal jurisdiction over Trinity and dismissing TTS' claims against Trinity including claims for violations of the Texas Uniform Trade Secrets Act (TUTSA). We reverse the trial court's order sustaining Trinity's amended special appearance and remand for further proceedings consistent with this opinion.
FACTUAL AND PROCEDURAL BACKGROUND[1]
TTS, a Delaware limited liability company, based in Frisco, Texas is a self-described third-party transportation and logistics company that provides and manages motor carrier brokerage services and a broad range of transportation services. Dan Manselle is a Florida resident doing business as Evenflow L.L.C., a Florida limited liability company. Trinity Logistics, Inc., is a Delaware corporation and a direct competitor with TTS.
Customers retain TTS to find the optimal method of transportation, and TTS utilizes independent contractors like Evenflow, who then use TTS' confidential and proprietary information to formulate bids and logistics solutions. On June 30, 2018, TTS and Evenflow, through its sole owner and sole employee, Manselle, entered into a sales agent agreement. Under the agreement, Evenflow was appointed as a non-exclusive independent agent to market, sell and provide TTS services, for an initial five-year term. The agreement specified that:
[t]he parties hereby irrevocably and unconditionally submits [sic] to the exclusive jurisdiction of any state or federal court sitting in Collin County, Texas, over any action, suit or proceeding arising out of or relating to this Agreement..... [Evenflow] acknowledges and agrees that its performance under this Agreement is due and owing to [TTS] in Collin County, Texas, and that a substantial portion of the duties and obligations of the parties are to be performed in Collin County, Texas.
On October 6, 2021, TTS filed its original petition asserting claims for declaratory judgment, breach of contract[2] against Evenflow and Manselle, tortious interference with an existing contract against Trinity, and violations of the Texas Uniform Trade Secrets Act against all defendants.
Trinity and Manselle filed special appearances. After an initial hearing, the trial court ordered jurisdictional discovery.[3] Trinity filed an amended special appearance, to which TTS filed its supplemental response with attached jurisdictional exhibits, and Trinity replied. The trial court held a second hearing on Trinity's special appearance and issued an order sustaining Trinity's amended special appearance. This interlocutory appeal followed.
TTS argues that the trial court has both general and specific personal jurisdiction over Trinity. The original petition alleges specific jurisdiction under the Texas long-arm statute, averring Trinity tortiously interfered with the contract between TTS and Evenflow, which contract was to be substantially performed in Texas, and that Trinity recruits Texas residents for employment inside and outside of Texas. TTS alleges general jurisdiction over Trinity because Trinity has 2 purposefully availed itself of the privileges and benefits of conducting business in Texas, is registered with the Texas Secretary of State to conduct business in Texas, and has operated one of its seven regional service centers in Euless, Texas, since 2008, with Texas employees, maintaining continuous and systematic contacts with Texas.
The petition[4] alleged that, around January 2020, a Trinity logistics agent recruiter began soliciting Evenflow and Manselle to serve as a sales agent for Trinity. Evenflow, acting through its owner Manselle took and utilized TTS' confidential and proprietary information, and the same was acquired by Trinity through recruitment and employment of Evenflow and Manselle. Manselle, for and on behalf of Evenflow, signed an independent contractor agency agreement with Trinity to act in the same sales role for Trinity as it was still contracted to perform for TTS. Evenflow, acting through its owner Manselle, worked for Trinity, "TTS's direct competitor, while contemporaneously working for TTS for two months [September 29-November 25, 2020] before informing TTS" and ultimately terminating the agreement on November 25, 2020. As part of Trinity's recruitment process, Manselle identified ten customers to be vetted, two of which were Texas-based customers, along with TTS's confidential customer information and confidential credit arrangements.
Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law that appellate courts review de novo. See, e.g., Old Republic Nat'l Title Ins. Co. v. Bell, 549 S.W.3d 550, 558 (Tex. 2018); Steward Health Care System, LLC v. Saidara, 633 S.W.3d 120, 125 (Tex. App.-Dallas, 2021, no pet.). When a trial court does not issue findings of fact and conclusions of law with its special appearance ruling, all facts necessary to support the judgment and supported by the evidence are implied. Old Republic, 549 S.W.3d at 558; Saidara, 633 S.W.3d at 125. When the appellate record includes the reporter's and clerk's records, these implied findings are not conclusive and may be challenged for legal and factual sufficiency in the appropriate appellate court. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002); Saidara, 633 S.W.3d at 125-26. When the relevant facts in a case are undisputed, an appellate court need not consider any implied findings of fact and considers only the legal question of whether the undisputed facts establish Texas jurisdiction. Old Republic, 549 S.W.3d at 558.
The plaintiff bears the initial burden of pleading sufficient facts to bring a nonresident defendant within the reach of the Texas long-arm statute. See Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010). If the plaintiff pleads sufficient jurisdictional facts, the defendant bears the burden to negate all alleged bases of personal jurisdiction. Id. Alternatively, the defendant can prevail by showing that even if the plaintiff's allegations are true, the evidence is legally insufficient to establish that personal jurisdiction over the defendant is proper. See id. at 659.
Although the trial judge acts as the factfinder and must resolve any factual disputes in the special-appearance evidence, the judge must accept as true any clear, direct, and positive evidence presented in an undisputed affidavit. Forever Living Prods. Int'l, LLC v. AV Eur. GmbH, 638 S.W.3d 719, 723 (Tex. App.-Dallas 2021, no pet.); see also Smith v. Patrick W.Y. Tam Trust, 296 S.W.3d 545, 547 (Tex. 2009) ().
Trinity filed a special appearance asserting that it is a Delaware corporation with its principal place of business in Delaware its Euless office "coordinates freight transportation in the region, not just in Texas"; the Euless office generates less than five percent of Trinity's revenue; and TTS did not contend that its claim arose from or related to activity in Trinity's Euless office. Attached to the special appearance was the affidavit of Greg Massey, vice president of agent development for Trinity. In addition to confirming that Trinity is incorporated in Delaware, has its principal place of business in Delaware, and operates a regional service center in Euless, Texas, Massey's affidavit stated that the Euless service center has a manager and thirty-three employees and is "Trinity's only office in Texas."
In November 2021, TTS filed a response to Trinity's special appearance asserting that, since 2005, "Trinity has had a registered agent for service, been registered to do business, and has been 'doing business' and commencing lawsuits in Texas." TTS alleged Trinity's Texas regional service center is used as one of Trinity's "home bases" from which thirty-four employees solicit and conduct business with customers and transportation providers not only in Texas, but nationwide.
At the conclusion of the initial hearing, the trial court permitted jurisdictional discovery, after which Trinity filed an amended special appearance, TTS supplemented its response, and Trinty replied. Attached to the supplemental response were exhibits in support of TTS' assertions that Trinity leases property and pays personal property taxes in Texas, has substantial business activity in Texas, uses Texas as the origin state for shipping, and has "availed itself of the Texas courts as a plaintiff in suits against third parties" relative to business it conducts in Texas.
In May 2022, Trinity filed an amended special appearance asserting that no case-related act of Trinity occurred in Texas and that "this is not a case about recruiting a Texas employee; it's a case about recruiting an independent contractor based in Florida." TTS filed a supplemental response in which it argued Trinity is subject to specific jurisdiction in Texas because it directed its tortious conduct at Texas with the intent of creating recurring contacts with Texas in the form of...
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