Fourth Court of Appeals San Antonio, Texas MEMORANDUM OPINION No. 04-22-00449-CV
Donald MCLEAN, DM Innovations LLC, TWWM LLC d/b/a TP Imports, and Thunder Pumpkin Imports LLC, Appellants
v.
PARADIGM SRP LLC d/b/a Drivetanks.com, Appellee
From the 38th Judicial District Court, Uvalde County, Texas Trial Court No. 2020-02-33168-CV Honorable Camile Glasscock Dubose, Judge Presiding
Opinion by: Liza A. Rodriguez, Justice
Sitting: Irene Rios, Justice Liza A. Rodriguez, Justice Sandee Bryan Marion, Chief Justice (Ret.) 1
Delivered and Filed: October 31, 2023
REVERSED AND RENDERED
Appellants Donald McLean, DM Innovations LLC, TWWM LLC d/b/a/ TP Imports, and
Thunder Pumpkin Imports LLC (“the defendants”) challenge the trial court’s order overruling
their special appearance in a breach of contract suit. We reverse the trial court’s order and render
judgment dismissing the breach of contract claim against the defendants.
1 Sitting by assignment pursuant to section 74.003(b) of the Texas Government Code 04-22-00449-CV
BACKGROUND
The defendants, a Pennsylvania resident and three Pennsylvania corporations, were sued
by appellee, Paradigm SRP LLC d/b/a Drivetanks.com (“Paradigm”), a Texas corporation.
Paradigm’s petition alleged that it reached an agreement with the defendants to purchase a
military tank, which was located in Europe. The petition further alleged that the defendants
breached the parties’ agreement by failing to deliver the tank to Texas. As to personal
jurisdiction, Paradigm alleged that its breach of contract claim “ar[ose] out of Defendants’
purposefully directed marketing, advertising, sales, as well as communications with citizens of
Uvalde County, State of Texas.”
The defendants filed a special appearance, asserting the trial court lacked personal
jurisdiction over them. Among other things, the defendants asserted they lacked sufficient
minimum contacts with Texas to satisfy due process. According to the defendants, any contacts
they had with Texas were fortuitous rather than purposefully directed, and there was no nexus
between these contacts and Paradigm’s claim. The defendants submitted evidence—an affidavit
from McLean—in support of their special appearance.
In his affidavit, McLean testified that in August 2016, he forwarded a photograph of the
tank to a third party, who posted it on his website. At the time, McLean was located in Poland.
After the tank was posted on the third-party’s website, McLean had a phone conversation with
Paradigm’s chief executive officer, Todd DiGidio, about Paradigm’s interest in buying the tank.
Thereafter, a series of emails were exchanged between McLean, DiGidio, and John Lindsey,
who was Pardigm’s vice-president of operations. When these initial emails were exchanged,
McLean was still located in Poland. During subsequent communications, McLean was located in
Pennsylvania. McLean testified that he did not own or possess the tank, and that Paradigm’s
representatives knew that his only role in the transaction was to identify the tank and set up
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payment with the tank’s owner. McLean also testified that Paradigm was “always solely
responsible for the import or shipping of the tank into the United States.” According to McLean,
the defendants had no ties or contacts with Texas and did not “regularly conduct or solicit
business in Texas.” He further testified the defendants did not develop a marketing strategy for
any business activity in Texas, did not regularly enter into contracts or advertise products or
services in Texas, and did not place “any unsolicited promotional telemarketing calls” to
Paradigm.
Paradigm filed a response to the special appearance, arguing that the defendants’
minimum contacts with Texas were sufficient to support the exercise of specific jurisdiction over
the defendants. 2 Paradigm alleged the defendants established minimum contacts by engaging in
the following activities:
Defendants successfully advertised their services to [Paradigm]—a Texas resident located on the Ox Hunting Ranch in Uvalde County. ….
[F]ollowing the success of Defendants’ successful and purposeful advertising effort in Texas, Defendants engaged in negotiations with [Paradigm] via telephone calls, text messages, and email regarding the sale of a Leopard IA5 tank to [Paradigm] in Texas.
[] Defendants entered into a contract with [Paradigm] under the terms of which Defendants were to deliver the subject Leopard IA5 tank to [Paradigm] in Texas . . . it is immaterial that the contract was made by remote means.
Having obtained a Texas contract from a Texas resident, Defendants then maintained ongoing contact and discussions with [Paradigm] in Texas and delivered invoices for payment to [Paradigm] in Texas.
Notably, Paradigm did not present any evidence to support its jurisdictional allegations.
The defendants filed a reply to Paradigm’s response, in which they specifically
challenged Paradigm’s allegation that the defendants agreed to deliver the tank to Texas. The
2 Paradigm’s response explained that it was not alleging that the defendants were subject to general jurisdiction.
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defendants attached additional evidence—two emails—in further support of their special
appearance.
The trial court held a hearing, at which no additional evidence was presented. After
considering the pleadings, the evidence on file, and the arguments of counsel, the trial court
signed an order overruling the defendants’ special appearance. The defendants appealed.
STANDARD OF REVIEW
Whether a trial court may exercise personal jurisdiction over a nonresident defendant
presents a question of law, which we review de novo. Retamco Operating, Inc. v. Republic
Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009). When, as here, the 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. BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 795 (Tex. 2002). However, when the appellate record includes the
reporter’s and clerk’s records, the trial court’s implied findings are not conclusive and may be
challenged for legal and factual sufficiency. Id.
SPECIAL APPEARANCE PROCEDURES
Special appearances are governed by Rule 120(a) of the Texas Rules of Civil Procedure,
which provides in pertinent part: “The court shall determine the special appearance on the basis
of the pleadings, any stipulations made by and between the parties, such affidavits and
attachments as may be filed by the parties, the results of the discovery processes, and any oral
testimony.” TEX. R. CIV. P. 120a(3). A ruling on a special appearance does not decide the merits
of the case. TEX. R. CIV. P. 120a(2) (“No determination of any issue of fact in connection with
the objection to jurisdiction is a determination of the merits of the case or any aspect thereof.”).
“In the context of a special appearance, the parties bear shifting [] burdens.” Jay Zabel &
Assocs., Ltd. v. Compass Bank, 527 S.W.3d 545, 552 (Tex. App.—Houston [1st Dist.] 2017, no
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pet.). The plaintiff bears the initial burden to plead allegations sufficient to confer personal
jurisdiction over the nonresident defendant. Kelly v. Gen. Interior Const., Inc., 301 S.W.3d 653,
658 (Tex. 2010). Once the plaintiff meets this burden, the defendant assumes the burden of
negating all potential bases for jurisdiction alleged by the plaintiff. Id. “The plaintiff defines the
scope and nature of the lawsuit” and “the defendant’s corresponding burden to negate
jurisdiction is tied to the allegations in the plaintiff’s pleading.” Id.
A defendant may negate jurisdiction on either a factual or legal basis. Id. at 659.
“Factually, the defendant can present evidence that it has no contacts with Texas, effectively
disproving the plaintiff’s allegations.” Id. “If the nonresident defendant produces evidence
negating personal jurisdiction, the burden returns to the plaintiff to show that the court has
personal jurisdiction over the nonresident defendant.” Compass Bank, 527 S.W.3d at 552-53. At
this point, the plaintiff “risks dismissal of its lawsuit if it cannot present the trial court with
evidence establishing personal jurisdiction.” Kelly, 301 S.W.3d at 659.
“Legally, the defendant can show that even if the plaintiff’s alleged facts are true, the
evidence is legally insufficient to establish jurisdiction; the defendant’s contacts with Texas fall
short of purposeful availment; for specific jurisdiction, that the claims do not arise from the
contacts; or that traditional notions of fair play and substantial justice are offended by the
exercise of jurisdiction.” Id. “A court should dismiss a lawsuit against a nonresident defendant if
the exercise of personal jurisdiction lacks an adequate factual or legal basis.” Compass Bank, 527
S.W.3d at 553.
PERSONAL JURISDICTION
Texas courts may exercise personal jurisdiction over a nonresident if the Texas long-arm
statute authorizes the exercise of jurisdiction, and the exercise of jurisdiction is consistent with
due-process guarantees. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.
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2007). Texas’s long arm statute provides, in relevant part, that “a nonresident does business in
this state if the nonresident contracts by mail or otherwise with a Texas resident and either party
is to perform the contract in whole or in part in this state.” TEX. CIV. PRAC. & REM. CODE §
17.042(1). “Texas’s long-arm statute extends Texas courts’ personal jurisdiction as far as the
federal constitutional requirements of due process will permit.” M & F Worldwide Corp. v.
Pepsi-Cola Metro. Bottling Co., 512 S.W.3d 878, 885 (Tex. 2017) (internal quotation marks
omitted).
“The Due Process Clause of the U.S. Constitution imposes no obstacle to a Texas court’s
exercise of personal jurisdiction over a nonresident defendant if that defendant has minimum
contacts with the State and the exercise of jurisdiction comports with traditional notions of fair
play and substantial justice.” In re Christianson Air Conditioning & Plumbing, LLC, 639 S.W.3d
671, 678 (Tex. 2022). “A nonresident defendant’s contacts may give rise to either general or
specific jurisdiction.” Id. General jurisdiction exists when the defendant’s contacts with the state
are so continuous and systematic that the defendant is essentially at home in Texas. Id. at 679.
Specific jurisdiction exists when (1) the defendant has made minimum contacts with Texas by
purposefully availing itself of the privilege of conducting activities in Texas, and (2) the
defendant’s potential liability arose from or is related to those contacts. Id.
“The minimum-contacts analysis requires that a defendant ‘purposefully avail’ itself of
the privilege of conducting activities within Texas, thus invoking the benefits and protections of
our laws.” Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002). “The
defendant’s activities, whether they consist of direct acts within Texas or conduct outside Texas,
must justify a conclusion that the defendant could reasonably anticipate being called into a Texas
court.” Id. “A defendant is not subject to jurisdiction here if [his] Texas contacts are random,
fortuitous, or attenuated.” Id. “Nor can a defendant be haled into a Texas court for the unilateral
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acts of a third party.” Id. “It is the quality and nature of the defendant’s contacts, rather than their
number, that is important to the minimum-contacts analysis.” Id.
“When specific jurisdiction is asserted, the cause of action must arise out of or relate to
the nonresident defendant’s contact with the forum state in order to satisfy the minimum contacts
requirement.” Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d
223, 227 (Tex. 1991). “[T]he contact must have resulted from the nonresident defendant’s
purposeful conduct and not the unilateral activity of the plaintiff or others.” Id. at 228. “When
specific jurisdiction is asserted, the minimum contacts analysis focuses on the relationship
among the defendant, the forum and the litigation.” Id. A specific jurisdiction analysis focuses on
the defendant’s “actions and choices to enter the state of Texas and conduct business, as opposed
to its contacts with Texas residents.” 11500 Space Center, L.L.C. v. Private Capital Group, Inc.,
577 S.W.3d 322, 331 (Tex. App.—Houston [1st Dist.] 2019, no pet.). “[A] proper minimum
contacts analysis looks to the defendant’s contacts with the forum state itself, not the defendant’s
contacts with persons who reside there.” Old Republic Title Ins. Co. v. Bell, 549 S.W.3d 550, 561
(Tex. 2018).
ANALYSIS
On appeal, the defendants argue there is no basis in law or fact for the trial court to
exercise personal jurisdiction over them. More specifically, the defendants argue the trial court
erred in denying their special appearance because: (1) they did not have sufficient minimum
contacts with Texas, that is, they did not purposefully direct their activities at Texas; (2)
Paradigm’s claim did not arise out of or relate to the defendants’ purported contacts with Texas;
and (3) the exercise of personal jurisdiction offends traditional notions of fair play and
substantial justice.
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Texas Long-Arm Statute
As a preliminary matter, we must determine if Paradigm alleged sufficient facts to bring
the defendants within the reach of the Texas long-arm statute. Both Paradigm’s petition and its
response to the special appearance guide our determination. See Cirrus Design Corp. v. Berra,
633 S.W.3d 640, 647 (Tex. App.—San Antonio 2021, no pet.). Paradigm’s petition alleged that
its breach of contract claim arose out of the defendants’ purposefully directed marketing,
advertising, and sales, and communications with citizens of Uvalde, Texas. Paradigm’s response
to the special appearance alleged that the defendants purposefully established minimum contacts
with Texas by engaging in contract negotiations with Paradigm and by agreeing to deliver the
tank to Texas. We conclude that the allegations in Paradigm’s petition and response allege that
the defendants did business in Texas. See TEX. CIV. PRAC. & REM. CODE § 17.042(1) (“a
nonresident does business in this state if the nonresident contracts by mail or otherwise with a
Texas resident and either party is to perform the contract in whole or in part in this state.”). Thus,
to succeed on their special appearance, the defendants were required to negate all jurisdictional
bases alleged in Paradigm’s pleadings. See Kelly, 301 S.W.3d at 658-59 (recognizing that if the
plaintiff fails to plead facts bringing the defendant within the reach of the long-arm statute, the
defendant need only prove that it does not live in Texas to negate jurisdiction).
Specific Jurisdiction
In this case, the sole basis for exercising personal jurisdictional over the defendants is
specific jurisdiction. 3 Paradigm contends that the defendants’ “briefing does not directly or
clearly” challenge the first component of the specific jurisdiction analysis, that is, whether the
defendants established minimum contacts with Texas by purposefully availing themselves of
conducting activities in Texas. We disagree. The defendants’ brief repeatedly complains about
3 Paradigm acknowledges on appeal that this case involves specific jurisdiction only.
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the lack of evidence showing that they engaged in activities purposefully directed at Texas. “An
appellate court should consider the parties’ arguments supporting each point of error and not
merely the wording of the points.” Anderson v. Gilbert, 897 S.W.2d 783, 784 (Tex. 1995); see St.
John Missionary Baptist Church v. Flakes, 595 S.W.3d 211, 214 (Tex. 2020) (recognizing that a
party sufficiently preserves an issue for review by arguing its substance, even if it does not call
the issue by name); TEX. R. APP. P. 38.1(f) (“The statement of an issue or point will be treated as
covering every subsidiary question that is fairly included.”). Having concluded the defendants’
brief challenges the first component of the specific jurisdiction analysis, we address this
complaint.
Minimum Contacts and Contract Claims
It is well-settled that the existence of a contract between a Texas resident and a
nonresident does not “automatically establish sufficient minimum contacts” with Texas. See
Burger King Corp. v. Rudzewicz, 471 U.S. 472, 478 (1985) (deciding whether and to what extent
a contract can constitute a contact for purposes of minimum contacts due process analysis);
Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 786 (Tex. 2005) (acknowledging
that “a single contract with a Texas resident” cannot “automatically establish jurisdiction”). In
Burger King, the United States Supreme Court explained that, when determining if a defendant
has purposefully established minimum contacts in a contract situation, courts should consider:
(1) the parties’ prior negotiations, (2) contemplated future consequences, (3) the terms of the
contract, and (4) the parties’ actual course of dealing. 471 U.S. at 479.
“Merely contracting with a resident of the forum state or engaging in communications
during performance of the contract generally is insufficient to subject a nonresident to the
forum’s jurisdiction.” Max Protetch, Inc. v. Herrin, 340 S.W.3d 878, 886 (Tex. App.–Houston
[14th Dist.] 2011, no pet.). “A nonresident’s action in initiating phone calls from the
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nonresident’s state directed to Texas is not enough to satisfy the minimum contacts
requirements.” Evergreen Media Holdings, LLC v. FilmEngine, No. 09-14-00364-CV, 2016 WL
5399760, at *5 (Tex. App.—Beaumont Sept. 22, 2016, no pet.); see Old Republic Title, 549
S.W.3d at 560 (“On their own, numerous telephone communications with people in Texas do not
establish minimum contacts….”). However, actions that relate to the formation of the contract
and the subsequent breach are relevant to a specific jurisdiction analysis. Evergreen Media
Holdings, 2016 WL 5399760, at *5. Another important consideration is the contract’s place of
performance. Id.
On appeal, the defendants argue they negated all jurisdictional bases alleged by Paradigm
citing to their jurisdictional evidence. Paradigm counters that the defendants did not negate all
jurisdictional bases, relying exclusively on its verified pleadings. However, Paradigm’s reliance
on its verified pleadings is misplaced. “Generally, pleadings are not competent evidence, even if
sworn or verified.” Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer, 904 S.W.2d 656, 660
(Tex. 1995); OZO Capital, Inc. v. Syphers, No. 02-17-00131-CV, 2018 WL 1531444, at *8 (Tex.
App.—Fort Worth Mar. 29, 2018, no pet.) (noting that pleadings were not evidence in a special
appearance case); Atom Nanoelectronics, Inc. v. Applied NanoFluorescence, LLC, No. 01-15-
00952-CV, 2016 WL 3223670, at *5 (Tex. App.—Houston [1st Dist.] June 9, 2016, no pet.)
(“[S]worn pleadings do not count as evidence” in a special appearance case). Thus, Paradigm’s
petition and response were not evidence, and they did not satisfy its evidentiary burden to prove
that the trial court had personal jurisdiction over the defendants. See Kelly, 301 S.W.3d at 659;
Compass Bank, 527 S.W.3d at 552-53.
Marketing, Advertising, and Solicitation
Paradigm argues the defendants had minimum contacts with Texas because they
marketed and advertised to Texas residents and “specifically solicited” the sale of the tank to
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Paradigm. But the only evidence presented shows that the defendants did not engage in any
marketing, advertising, and solicitation directed at Texas. In his affidavit, McLean testified that
he never “individually or as a principal or member of the named defendant entities in this case”
“develop[ed] a marketing strategy for any business activity within the State of Texas” or
“advertised products or services in Texas.” McLean further testified that he “and the other named
entities [] do not regularly conduct or solicit business in the State of Texas.” Thus, the record
does not support an implied finding that the defendants directed marketing and advertising at
Texas, or that the defendants solicited business in Texas.
As to Paradigm’s assertion that the defendants “specifically solicited” Paradigm to buy
the tank, there is no evidence to support it. See Silbaugh v. Ramirez, 126 S.W.3d 88, 95-96 (Tex.
App.—Houston [1st Dist.] 2002, no pet.) (noting that the plaintiff’s affidavit and trial testimony
proved that the nonresident defendant had solicited business from the plaintiff during two
conference calls); Rynone Mfg. Corp. v. Republic Indus., Inc., 96 S.W.3d 636, 639-40 (Tex.
App.—Texarkana 2022, no pet.) (stating that the record contained “testimony that Rynone
purposely called Republic, a Texas company, to solicit its business.”).
Here, the defendants presented the only evidence on this topic. In his affidavit, McLean
testified that “[a]t the end of August 2016,” he “forwarded a photograph of the military tank to
an associate who maintains a website” and the associate “posted a photo of the tank on the site.”
McLean also testified that, after the photograph appeared on the website, he and Paradigm’s
chief executive officer, Todd Digidio, spoke on the telephone about “Paradigm’s interest in
purchasing the tank.” McLean further testified that none of the defendants placed “any
unsolicited promotional telemarketing phone calls to” Paradigm. We conclude that this testimony
refutes Paradigm’s assertion that the defendants specifically solicited Paradigm. Thus, the record
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does not support an implied finding that the defendants established minimum contacts by
specifically soliciting business from Paradigm. 4
Terms of the Contract—Delivery to Texas
Paradigm next argues the defendants had minimum contacts with Texas because the
terms of the parties’ contract required the defendants to deliver the tank to Texas. 5 According to
Paradigm, the defendants had minimum contacts with Texas because they agreed to partially
perform the contract in Texas. The only evidence presented showed that the terms of the contract
did not require the defendants to deliver the tank to Texas. In his affidavit, McLean testified that
“Paradigm was always solely responsible for the import or shipping of the tank into the United
States.” 6 Paradigm did not present any evidence disproving McLean’s testimony. Thus, there is
no evidence that the defendants agreed to deliver the tank to Texas. The record does not support
an implied finding that the defendants established minimum contacts with Texas by agreeing to
deliver the tank to Texas.
By presenting uncontroverted evidence that they did not direct marketing or advertising
to Texas, did not generally solicit business in Texas, did not specifically solicit business from
Paradigm, and did not agree to perform the contract in Texas by delivering the tank to Paradigm,
the defendants negated each of these bases for exercising specific personal jurisdiction over the
defendants.
4 Paradigm also argues on appeal that the defendants established minimum contacts with Texas by “reaching out to a Texas company” and “inducing” it to buy the tank. Nevertheless, Paradigm did not identify these activities as grounds for specific jurisdiction in its pleadings. 5 A written contract does not appear in the record. 6 The defendants argue that the emails attached to its reply prove that the defendants were not responsible for shipping the tank the United States; however, we need not consider the emails because McLean’s testimony is clear and direct.
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Finally, on appeal Paradigm argues that the defendants established minimum contacts
with Texas by engaging in various activities after the parties contracted, such as sending invoices
to Paradigm, communicating with Paradigm about the tank’s mechanical condition and transport,
and receiving payments from Paradigm. However, to the extent the cited activities relate to
communications concerning the execution and performance of the contract itself, they “are
insufficient to establish the minimum contacts necessary to support the exercise of specific
jurisdiction over [a] nonresident defendant.” See Olympia Capital Assocs., L.P. v. Jackson, 247
S.W.3d 399, 418 (Tex. App.—Dallas 2008, no pet.) (recognizing that the existence of a contract
between a nonresident defendant and a resident of the forum and engaging in communications
for the purpose of executing and performing the contract are not activities that support the
exercise of specific personal jurisdiction over the nonresident defendant); see also Max Protetch,
340 S.W.3d at 886 (recognizing that merely engaging in communications during the performance
of a contract is generally insufficient to subject a nonresident to the forum’s jurisdiction). And, to
the extent the cited activities relate to the acceptance of payments under the contract, they are
insufficient to support specific jurisdiction. See Weldon-Francke v. Fisher, 237 S.W.3d. 789, 796
(Tex. App.—Houston [14th Dist.] 2007, no pet.) (“[C]ontracting with and accepting payment
from Texas residents for services performed [in another state] is insufficient to support specific
jurisdiction.”) (citing IRA Resources, Inc. v. Griego, 221 S.W.3d 592, 597-98 (Tex. 2007)). Even
if true, Paradigm’s allegations about the defendants’ post-contract activities are not the type of
activities courts consider in determining minimum contacts in a contract case. As a matter of
law, the defendants did not establish minimum contacts by engaging in communications related
to the performance and execution of the contract and by receiving payments that Paradigm
mailed from Texas.
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“Ultimately the goal of our analysis is to determine whether [the defendants’] conduct
and connection to [Texas] are such that [they] should reasonably anticipate being haled into court
[in Texas].” Evergreen Media Holdings, 2016 WL 5399760, at *5. In the present case, the
defendants contracted with a Texas business, but they did not engage in any Texas-directed
activities from which they could have anticipated being called into a Texas court. Based on this
record, we conclude that the defendants did not purposefully avail themselves of the privilege of
conducting activities in Texas and, therefore, they have insufficient minimum contacts with
Texas for the trial court to exercise personal jurisdiction over them.
Having concluded that the defendants lack the minimum contacts necessary to support
the exercise of personal jurisdiction, we need not address the defendants’ remaining arguments.
See TEX. R. APP. P. 47.1 (requiring a court of appeals to hand down an opinion that is as brief as
practicable but that addresses every issue raised and necessary to final disposition of the appeal).
CONCLUSION
We reverse the trial court’s order overruling the defendants’ special appearance and
render judgment dismissing Paradigm’s breach of contract claim against the defendants.
Liza A. Rodriguez, Justice
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