Gino Tenace and Tenegrity Health, Inc. v. Thurman Health Holdings, LLC, William Thurman, DKNS, LLC, Nimesh Patel, Cato Creek Holdings Company, LLC, Redwood Partners, LLC, Sam Scott, VC Partners, LLC, Nikesh Jasani, and Clarus Health Services, LLC

Court of Appeals of Texas·Decided July 14, 2022·No. 09-21-00199-CV·Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

NO. 09-21-00199-CV

GINO TENACE AND TENEGRITY HEALTH, INC., Appellants V.

THURMAN HEALTH HOLDINGS, LLC, WILLIAM THURMAN, DKNS, LLC, NIMESH PATEL, CATO CREEK HOLDINGS COMPANY, LLC, REDWOOD PARTNERS, LLC, SAM SCOTT, VC PARTNERS, LLC, NIKESH JASANI, AND CLARUS HEALTH SERVICES, LLC, Appellees

On Appeal from the 457th District Court Montgomery County, Texas

Trial Cause No. 19-09-11980-CV

MEMORANDUM OPINION

Appellants Gino Tenace and Tenegrity Health, Inc. (Appellants) filed an interlocutory appeal from the trial court’s denial of Appellants’ special appearances. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(7). Finding the trial court lacks specific personal jurisdiction over Appellants, we reverse and render.

Background

Appellees Thurman Health Holdings, LLC, William Thurman, DKNS, LLC, Nimesh Patel, Cato Creek Holdings Company, LLC, Redwood Partners, LLC, Sam Scott, VC Partners, LLC, Nikesh Jasani, and Clarus Health Services, LLC (Appellees or Plaintiffs) filed this lawsuit against Appellants and one other defendant, Tenegrity Ventures, LLC (collectively Defendants).1 According to the petition, Tenace made false and misleading statements and omissions of material fact that induced the Plaintiffs into investing more than $2 million into a new healthcare palliative care company and then transferred control of their valuable intellectual property to the Defendants, resulting in Plaintiffs incurring substantial damages based on the Defendants’ wrongful conduct. Plaintiffs alleged that the Plaintiff-investors formed Clarus Health Services, LLC and contributed over $1,200,000 to develop valuable intellectual property. According to the petition, Plaintiffs appointed Tenace as CEO of Clarus and Tenace induced the Plaintiff- investors to transfer Clarus’s assets to Tenegrity Health, Inc. and Tenegrity Ventures, LLC, and later to a different company, Palliative Care NewCo, Inc. (“Palliative Care”). Plaintiffs alleged Tenace induced the Plaintiff-investors to contribute additional funds. According to the petition, Tenace did not disclose that

1 Tenegrity Ventures, LLC is not a party to this appeal because it did not file a special appearance.

he was subject to a noncompete agreement with another healthcare company that precluded him from assisting the Plaintiff-investors in the manner he represented he would. Plaintiffs alleged that Tenace’s “numerous failures[]” resulted in Clarus and Palliative Care no longer being in business and the Plaintiff-investors were “frozen out” of Clarus and Palliative Care, “depriving them of the resources and intellectual property they contributed, and access to their own company email accounts.”

Plaintiffs asserted claims for fraudulent inducement (against Tenace), negligent representation (against Tenace), claims under the Texas Theft Liability Act (against all Defendants), breach of fiduciary duty (against Tenace), civil conspiracy (against Tenace), aiding and abetting civil conspiracy (against Tenegrity Ventures, LLC and Tenegrity Health, Inc.), and sought temporary and permanent injunctive relief (against all Defendants). In the petition, Plaintiffs alleged that the trial court had personal jurisdiction, stating:

[] The Court has personal jurisdiction over Defendants pursuant to the Texas long-arm statute, Texas Civil Practice & Remedies Code section[] 17.042, because the harm resulting from Defendants’

wrongful conduct has adversely impacted Plaintiffs Thurman Health Holdings, LLC, DKNS, LLC, Patel, VC Partners, LLC, and Jasani in Texas. In addition, the exercise of jurisdiction over Defendants is consistent with both state and federal due process requirements.

Appellants filed a joint special appearance under Rule 120a of the Texas Rules of Civil Procedure. As to specific jurisdiction, Appellants argued that, because Plaintiffs failed to plead jurisdictional facts against the nonresident Appellants

sufficient to bring them within reach of the Texas long-arm statute, Appellants met their burden of negating the basis of the alleged jurisdiction by proving that they are not residents of Texas, and Plaintiffs also failed to establish that exercising jurisdiction over nonresidents Tenace and Tenegrity Health, Inc. comports with federal and state guarantees of due process. As to general jurisdiction, Appellants argued that the trial court lacked general jurisdiction over Tenace because he is not domiciled in Texas and there are no allegations of any continuous and systematic contacts by Tenace with Texas. Appellants also argued the trial court lacked general jurisdiction over Tenegrity Health, Inc., because Tenegrity Health, Inc. is a Florida corporation with its principal place of business in Tennessee and there were no allegations by Plaintiffs of any continuous and systematic contacts by Tenegrity Health with Texas and nothing to establish that Tenegrity Health’s affiliations with Texas are so substantial as to render it “at home” in Texas. According to Appellants, exercising jurisdiction over them as nonresidents and requiring them to defend the lawsuit in Texas would offend traditional notions of fair play and substantial justice.

In Tenace’s affidavit, attached as an exhibit to the special appearance, he states that he is a resident of Minnesota, has never been a resident of Texas, has no telephone listing in Texas, owns no property in Texas, has not entered into a contract with a Texas resident, and has not recruited a Texas resident for employment. Tenace also states that he was a founder and is the registered agent of Tenegrity

Health, Inc., a Florida corporation with its principal place of business in Franklin, Tennessee. According to Tenace’s affidavit, Tenegrity Health, Inc. maintains no office in Texas, has no registered agent in Texas, has no telephone listing in Texas, owns no property in Texas, has not entered into a contract with a Texas resident, and has not recruited a Texas resident for employment. Tenace also stated that he was a founding partner of Tenegrity Ventures, LLC, from which he separated in June 2018, and neither he nor Tenegrity Health, Inc. have any ownership in or affiliation with Tenegrity Ventures, LLC.

In their special appearance, Tenace and Tenegrity Health, Inc. argued that the Plaintiffs failed to allege that either Tenace or Tenegrity Health, Inc. as nonresident Defendants committed any tortious act in Texas. According to Appellants’ special appearance, Appellees’ “sole jurisdictional assertion is that ‘the harm resulting from defendants’ wrongful conduct has adversely impacted Plaintiffs Therman Health Holdings, LLC, DKNS, LLC, Patel, VC Partners, LLC, and Jasani in Texas.’” Appellants argued that because the Plaintiffs’ petition made no allegation that the nonresident Defendants committed any tortious or fraudulent act in Texas, the Plaintiffs failed to plead jurisdictional facts against the nonresident Defendants sufficient to bring them within reach of the Texas long-arm statute.

Appellees responded to Appellants’ special appearance. As to the court’s jurisdiction over Appellants under the Texas long-arm statute, Appellees made these arguments:

The Court has jurisdiction over Defendants Tenace and Tenegrity Health pursuant to the Texas long-arm statute because of the business conducted by Defendants when they induced Plaintiffs, Texas residents, to enter into contracts in Texas and obtained partial performance in Texas.

....

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Gino Tenace and Tenegrity Health, Inc. v. Thurman Health Holdings, LLC, William Thurman, DKNS, LLC, Nimesh Patel, Cato Creek Holdings Company, LLC, Redwood Partners, LLC, Sam Scott, VC Partners, LLC, Nikesh Jasani, and Clarus Health Services, LLC, (Tex. Ct. App. 2022).

Gino Tenace and Tenegrity Health, Inc. v. Thurman Health Holdings, LLC, William Thurman, DKNS, LLC, Nimesh Patel, Cato Creek Holdings Company, LLC, Redwood Partners, LLC, Sam Scott, VC Partners, LLC, Nikesh Jasani, and Clarus Health Services, LLC (Gino Tenace and Tenegrity Health, Inc. v. Thurman Health Holdings, LLC, William Thurman, DKNS, LLC, Nimesh Patel, Cato Creek Holdings Company, LLC, Redwood Partners, LLC, Sam Scott, VC Partners, LLC, Nikesh Jasani, and Clarus Health Services, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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