EIFS Industry Members Association v. Larry and Alda Brunson

• Court: Court of Appeals of Texas
• Decided: July 11, 2002
• Docket: 09-01-00533-CV
• Status: Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

____________________

NO. 09-01-533 CV

EIFS INDUSTRY MEMBERS ASSOCIATION, Appellant

V.

LARRY and ALDA BRUNSON, ETAL

and LIFE FORMS HOMES, INC., Appellees

On Appeal from the 221st District Court

Montgomery County, Texas

Trial Cause No. 00-09-05961-CV

O P I N I O N

EIFS Industry Members Association (EIMA) brings an interlocutory appeal of an order denying its motion for special appearance. Larry and Alda Brunson, et al., (plaintiffs), as well as Life Forms, Incorporated, third-party plaintiff below (collectively appellees) sued EIMA and others ⁽¹⁾ based on the alleged failure of the exterior insulation and finish system (EIFS) on plaintiffs' homes. EIMA claims the trial court erred in denying its special appearance.

EIMA'S EVIDENCE

In support of its motion, EIMA presented the affidavit of Stephan Klamke, EIMA's executive director, attesting that EIMA:

1. Is a non-profit trade association serving the Exterior Insulation Finish Systems (EIFS) industry. Members include manufacturers, distributors, suppliers, applicators, and others involved in the industry, and income is derived solely from members dues;

2. Does not manufacture, market, advertise or sell any products;

3. Maintains a single principal place of business with four employees in Morrow, Georgia;

4. Has never maintained any place of business in the State of Texas;

5. Conducts no business in the State of Texas;

6. Does not solicit business, sell or advertise any products to any customers in the State of Texas;

7. Has no telephone directory listings or commercial listings in the State of Texas;

8. Does not own, lease or have any interest in any property in the State of Texas;

9. Has no bank accounts, personal property or other assets in the State of Texas;

10. Has no employees who are residents of the State of Texas;

11. Has never registered to do business in the State of Texas and has no registered agent for service of process in the State of Texas;

12. Has no contracts with any Texas residents (except its attorneys retained for defense of plaintiffs' claims);

13. Has never sued anyone or otherwise utilized the court system of the State of Texas;

14. Has held no meetings or conferences in the State of Texas from April 1997 to July 2001;

15. Has never advertised in any Texas publication and does not advertise any of the products or components of the residences that are the subject of the suit;

16. Maintains an Internet website for general industry information since October 1996;

17. Has never had any contacts or dealings with any of the plaintiffs in this matter;

18. Has not furnished any information, products, documents, or materials to any of the plaintiffs in this matter or for the construction of the residences that are the subject of this suit; and

19. Has never been involved in the construction, maintenance, inspection or renovation of the plaintiffs' residences in any way.

Appellees attack EIMA's evidence on the grounds that Klamke's affidavit does not address the time period from 1990 to 1997 when their homes were built. We examine the record for evidence of EIMA's activities in 2001, when appellees brought EIMA into the suit, and for a reasonable period before that time. See Daimler-Benz Aktiengesellschaft v. Olson, 21 S.W.3d 707, 717 (Tex. App.--Austin 2000, writ dism'd w.o.j.). Appellees provide no authority for their contention that we concern ourselves only with the time frame from 1990 to 1997. See Tex. R. App. P. 38.1(h). Klamke's affidavit provides it is made "based upon my personal knowledge and my review of records maintained in the ordinary course of business by [EIMA]." In his deposition, Klamke clarifies that his knowledge is of EIMA since April of 1997. This is a full four years prior to EIMA being brought into the suit. Appellees make no argument that four years is not a reasonable period and while they speculate that EIMA's activities prior to 1997 could have been radically different, there is simply nothing in the record to support such a conjecture. Accordingly, we find Klamke's affidavit is not defective.

EIMA'S CONTACTS WITH TEXAS

Appellees point to the following as evidence contravening some of the assertions in Klamke's affidavit:

• •

EIMA enters into membership contracts with its Texas members who receive publications, newsletters and technical information, are allowed to use the EIMA logo in advertising, and who pay dues each year;

•Dues are in the form of either a flat fee or, in the case of associates and manufacturers, a percentage of their sales - there are Texas members in both categories;

•EIMA has the authority to suspend or terminate its Texas members;

•EIMA has agreed to indemnify EIMA directors, including Mike Boyd, a Texas resident;

•EIMA promotes the EIFS industry nationwide, including Texas;

•EIMA interfaces and participates in various national code organizations, three of which are used in some form or fashion in Texas (SBCCI, ICBO, and BOCA);

•EIMA newsletters show specific marketing contacts with the state of Texas -

• •A billboard advertising campaign in Dallas ⁽²⁾;
• •EIMA's newsletter, The Messenger, dated August 1999 states:

A subcommittee . . . has been formed to meet with 10 contractor organizations over the next 45 days to present the membership proposal. Target groups include . . . the Texas Lathing & Plastering Contractors Association; . . . .

• •A status report on EIMA public relations efforts in North Carolina states "provided liaison with non-North Carolina media, including . . . Texas Builder . . .."
• •EIMA's website lists Texas distributors and contractors and its affiliate members;
• •EIMA has a 1-800 phone number to call for a free copy of EIMA publications;
• •EIMA gave an award to Finestone for an EIFS project in Richardson, Texas and publicized it in the EIMA newsletter, which was sent to Texas members;
• •An EIMA newsletter, prior to February 4, 1997, featured an EIFS application in Stafford, Texas, done by Corev ⁽³⁾, a Texas manufacturer of EIFS and formerly a member of EIMA;
• • Corev received EIMA's "Guideline Specifications for Exterior Insulation Finish Systems Class PB";
• •EIMA's newsletter, The Messenger, dated December 1998, lists "Upcoming Meetings Involving Technical Committee" as "Building Professional Institute, University of Texas, Arlington, TX Jan. 11-15[;] NAHB Convention, Dallas, TX, Jan. 15-18;"
• •EIMA attended the Houston NAHB ⁽⁴⁾ Convention in January of 1996;
• •A research study was conducted by EIMA in 1994 via telephone ⁽⁵⁾ interviews of architects, builders and EIFS applicators in five cities, including Dallas, Texas;
• •Klamke has been to Texas as a result of his job as executive director of EIMA to attend the NAHB show and a CSI show to solicit membership, and to make a membership call on a testing laboratory in Dallas; EIMA expense records show Klamke's presence in Texas on six occasions, and Tom Wolfe's presence on four.

STANDARD OF REVIEW

Appellees have the burden to plead a prima facie showing of jurisdiction. See Riviera Operating Corp. v. Dawson, 29 S.W.3d 905, 908 (Tex. App.--Beaumont 2000, no pet.). EIMA bears the burden of negating all bases of personal jurisdiction to sustain a special appearance. Id. Once EIMA produced credible evidence negating all bases of jurisdiction, it became appellees' burden to establish the Texas court has personal jurisdiction over EIMA as a matter of law. Id.

The existence of personal jurisdiction is a question of law. Id. Exercise of that jurisdiction may require a resolution of underlying factual disputes; such a resolution is reviewed under a factual sufficiency standard. Id. If the trial court's order is based on undisputed or otherwise established facts, our review is de novo. Id.

Minimum contacts exist when the non-resident defendant's contacts with the forum state give rise to either specific or general jurisdiction. See General Refractories Co. v. Martin, 8 S.W.3d 818, 821 (Tex. App.--Beaumont 2000, pet. denied). "For a trial court to have specific jurisdiction over a defendant, the cause of action must arise out of or relate to the defendant's contact with the forum state." National Indus. Sand Ass'n v. Gibson, 897 S.W.2d 769, 772 (Tex. 1995). Single or even occasional acts will not support specific jurisdiction if the nature, quality, and circumstances of their commission create only an attenuated affiliation with Texas. See M.G.M. Grand Hotel v. Castro, 8 S.W.3d 403, 409 (Tex. App.--Corpus Christi 1999, no pet.). "On the other hand, so long as the defendant has had continuous and systematic contacts with the forum state, a trial court has general jurisdiction even if the cause of action did not arise from the defendant's purposeful conduct in the state." See National Indus. Sand Ass'n, 897 S.W.2d at 772. General jurisdiction is based upon the concept that by invoking the benefits and protections of a forum's laws, a nonresident defendant consents to suit in that forum. See American Type Culture Collection, Inc. v. Coleman, No. 00-0959, slip op. at 4, 2002 WL 1433719, at *5 (Tex. July 3, 2002). Thus general jurisdiction requires a showing that the defendant conducted substantial activities within the forum, a more demanding minimum contacts analysis than that required for exercise of specific jurisdiction. See CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996).

The record establishes EIMA's contacts in Texas are with its Texas members and those in the EIFS industry in Texas that EIMA wishes to recruit as members. The record does not establish how many of EIMA's members are from Texas or what percentage of the dues collected by EIMA are generated either by its Texas members or sales in Texas. Appellees have not brought forth any evidence that either they, or any of the other defendants, were aware of EIMA's marketing efforts or relied upon EIMA's information in deciding to purchase EIFS. The only evidence of public advertising in Texas is the billboard campaign in Dallas 1998. There is only evidence of one of EIMA's guideline specifications being sent to Texas. There is evidence of two awards being given to Texas members. There is evidence of EIMA attending as many as five meetings or shows in Texas and making one membership call to Texas. The site of the NAHB conventions and CSI shows are not determined by EIMA. A national survey by EIMA in 1994 included Dallas, Texas. EIMA maintains a toll-free number for members to request publications but the record contains no evidence of any Texas residents using that number; in the record the number appears in EIMA newsletters sent to its members. EIMA maintains a website listing Texas members but the record does not reflect whether the site generated any contacts to those members or whether anyone from Texas has ever logged on to the site.

Appellees also rely on the evidence of EIMA's involvement in developing technical standards, performance guidelines, specifications, and training for application of EIFS. With the one exception noted above, there is no evidence of this involvement ever impacting Texas. EIMA's participation in national code organizations which presumptively have an impact in Texas is not shown to be connected to the case at bar as there are no allegations that any of the defendants failed to comport with those codes.

There is no showing that the cause of action arises out of or relates to EIMA's contacts with Texas. Accordingly, we find there is no basis for the exercise of specific jurisdiction over EIMA. There is also no showing of such continuous and systematic contacts between EIMA and Texas as to equate to a substantial connection which has come about by an action of EIMA purposefully directed toward Texas. See Michel v. Rocket Engineering Corp., 45 S.W.3d 658, 672-78 (Tex. App.--Fort Worth 2001, no pet.). There is no indication that EIMA has availed itself of any benefits or privileges of Texas law. See American Type Culture Collection, slip op. at 4, 2002 WL 1433719, at *5. Consequently, we find there is no basis for the exercise of general jurisdiction over EIMA.

Therefore, the order of the trial court denying EIMA's special appearance is reversed and we remand this case with instructions to dismiss the claims against EIMA for lack of personal jurisdiction.

REVERSED AND REMANDED.

DON BURGESS

Justice

Submitted on March 22, 2002

Opinion Delivered July 11, 2002

Do Not Publish

Before Walker, C.J., Burgess and Gaultney, JJ.

1.

The other defendants are Life Forms, Inc; Finestone; Fresh Coat, Inc.; General Terrazzo Supplies, Inc.; Premier Plastering Supply, Inc.; Best Masonry & Tool Supply, Inc.; Charles R. Rutherford d/b/a/ C. R. Plastering and d/b/a C & R Plastering; K2, Inc. f/k/a Anthony Industries d/b/a Simplex Products Division; and Griesenbeck Architectural Products, Inc. d/b/a Clyde Griesenbeck & Sons, Inc. All are Texas corporations except Finestone and Simplex.

2.

EIMA's newsletter, The Messenger, dated December 1998 states:

APL is developing billboard advertising that will run in Dallas concurrently with the 1999 NAHB convention. The two week billboard campaign, culminating with the end of the show on January 18, will focus on EIFS' superior quality and curb appeal. The ad will appear on 20 billboards in downtown Dallas and along major highways leading into the city.

3.

Corev is not named as a defendant in the case at bar.

4.

NAHB is the National Association of Home Builders.

5.

EIMA also surveyed whether the EIMA marketing program was reaching these cities and found "[t]he majority of respondents in all five cities were unaware of any marketing programs sponsored by EIMA."