Blumenthal v. Ameritex Computer Corp.

646 S.W.2d 283, 1983 Tex. App. LEXIS 4022
CourtCourt of Appeals of Texas
DecidedJanuary 17, 1983
Docket05-81-01260-CV
StatusPublished
Cited by30 cases

This text of 646 S.W.2d 283 (Blumenthal v. Ameritex Computer Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Blumenthal v. Ameritex Computer Corp., 646 S.W.2d 283, 1983 Tex. App. LEXIS 4022 (Tex. Ct. App. 1983).

Opinion

VANCE, Justice.

Blumenthal, a foreign defendant, appeals by writ of error from a default judgment for Ameritex Computer Corporation in a suit alleging violations of the Texas Deceptive Trade Practices Act, § 17.41 et seq., Tex.Bus. & Com. Code Ann. § 17.41 et seq. (Vernon Supp. 1982-1983). The trial court awarded plaintiff treble damages, costs of court and reasonable attorney fees. Blu-menthal wholly failed to answer or appear.

Appellant presents three grounds of error: insufficient allegations in the petition to establish long-arm jurisdiction, inadequate pleading and proof of notice as a prerequisite to treble damages, and insufficient evidence to support the attorney’s fee. We hold that the petition is sufficient to establish jurisdiction, but we reverse the *285 award of treble damages and remand for determination of the amount of the attorney’s fee, and affirm to the extent of actual damages.

This suit arose out of Blumenthal’s offer in August, 1980, to sell certain data processing equipment to Ameritex. Allegedly misrepresenting that he was authorized to transact such sales, Blumenthal accepted and negotiated appellee’s check for $8,000. Neither delivery of the equipment nor a refund was forthcoming. On appeal Blu-rnenthal does not dispute the facts.

Blumenthal first asserts that the court did not acquire personal jurisdiction over him as a foreign defendant pursuant to Tex.Rev.Civ.Stat.Ann. art. 2031b, § 3 (Vernon 1964), the Texas long-arm statute, because the petition served on the Secretary of State failed to contain the proper jurisdictional allegations. Acknowledging that U-Anchor Advertising, Inc. v. N.H. Burt, 553 S.W.2d 760 (Tex.1977) did not concern a default judgment, Blumenthal nonetheless relies on it in correctly listing the three elements which must be present to properly invoke long-arm jurisdiction: 1) that defendant purposely did an act or consummated a transaction in Texas; 2) that plaintiff’s cause of action arose from or was connected with such a transaction; and 3) that the assumption of jurisdiction is within traditional notions of fair play and substantial justice. Id. at 762; O’Brien v. Lanpar Company, 399 S.W.2d 340 (Tex.1966).

Blumenthal’s error lies in his assertion that the petition must affirmatively state that all three elements are present, rather than recognizing that these are the criteria against which the court tests due process when an out-of-state defendant makes a special appearance to contest jurisdiction. See U-Anchor Advertising, supra, at 762. Appellant Blumenthal failed to make a special appearance, first entering this forum on writ of error after a default judgment was taken against him.

Review by way of writ of error in the Court of Appeals, as a direct attack on a default judgment, presents the question whether there is a lack of jurisdiction on the face of the record which would vitiate the trial court’s judgment. McKanna v. Edgar, 388 S.W.2d 927, 928 (Tex.1965). If such allegations are sufficient and uncontested, they establish jurisdiction, because when a defendant does not appear to contest jurisdictional allegations and does not challenge jurisdiction because of lack of notice, jurisdictional allegations, like allegations of liability, may properly be taken as admitted. Gourmet, Inc. v. Hurley, 552 S.W.2d 509, 513 (Tex.Civ.App.—Dallas 1977, no writ). However, if such allegations are not sufficient, no jurisdiction is shown. Id.

Blumenthal contends that the jurisdictional allegations of Ameritex were deficient in three respects: in not alleging that the defendant was engaged in business in Texas, that the Secretary of State was defendant’s agent on whom service of process could be made, and that the defendant was a natural person.

Long-arm jurisdiction under Section 3 of Article 2031b, supra, requires “acts of engaging in business” within Texas, plus certain other elements. Section 4, using slightly different wording (“doing business in state”), defines the acts of “engaging in business” referred to in Section 3. These include entering into a contract by mail or otherwise with a resident of Texas to be performed in whole or in part by either party in Texas, or the committing of any tort in whole or in part in this state. Am-eritex’s petition alleged that:

Defendant has conducted, transacted and/or done business in the State of Texas by entering into a contract with a resident of the State of Texas, the Plaintiff herein, which contract was to be performed in whole or part by Plaintiff and Defendant in the State of Texas. Further, Defendant has committed a tort in whole or part within the State of Texas.

This pleading supplies the elements of contract and/or tort required by Section 4, the definitional section, thus satisfying the requirement of Section 3 that the defendant be engaged in business within Texas. See Computer Synergy Corp. v. Business Sys *286 tems Products, 582 S.W.2d 573, 575 (Tex.Civ.App.—Houston [1st Dist.] 1979, no writ).

Blumenthal also claims that Ameri-tex did not allege that the Secretary of State was defendant’s agent upon whom service of process could be made. However Ameritex fulfilled the requirements for substituted service under article 2031b, § 3, supra, by alleging that the defendant was not a resident of Texas, had engaged in business in the State, and had failed to maintain any regular place of business in the State or any person in charge upon whom service of process could be effected. While Ameritex’s conclusion that “Defendant has constructively designated the Secretary of the State of Texas as his true and lawful attorney upon whom service of process may be effected” does not echo the exact wording of the statute, 1 the record compels the inference that Blumenthal had neither a place of regular business nor a designated agent in Texas. Accordingly, we hold that the wording employed in the petition sufficiently expresses the concept that the Secretary of State shall be deemed defendant’s agent in Texas. See McKanna v. Edgar, 388 S.W.2d 927, 930 (Tex.1965).

As to the third alleged deficiency in pleading under Art. 2031b, § 3, supra, a reading of the statute shows that its reach is wide, intended as inclusive, not exclusive. It applies to “any foreign corporation, association, joint stock company, partnership, or non-resident natural person that engages in business in this state ...” Ameritex’s allegation that it “complains of Arthur Blu-menthal, d/b/a Art Blumenthal Company” and that “Defendant is not a resident ... ” suffices to bring Blumenthal within the category of non-resident natural persons.

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646 S.W.2d 283, 1983 Tex. App. LEXIS 4022, Counsel Stack Legal Research, https://law.counselstack.com/opinion/blumenthal-v-ameritex-computer-corp-texapp-1983.