Hospital Sciences of Northern California, Inc. v. Medical Computer Systems, Inc.

482 S.W.2d 699, 1972 Tex. App. LEXIS 2165
CourtCourt of Appeals of Texas
DecidedJune 15, 1972
DocketNo. 5127
StatusPublished
Cited by4 cases

This text of 482 S.W.2d 699 (Hospital Sciences of Northern California, Inc. v. Medical Computer Systems, Inc.) 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
Hospital Sciences of Northern California, Inc. v. Medical Computer Systems, Inc., 482 S.W.2d 699, 1972 Tex. App. LEXIS 2165 (Tex. Ct. App. 1972).

Opinion

OPINION

JAMES, Justice.

This is a venue matter involving Subdivision 4 of Article 1995, Vernon’s Ann. Tex.Civ.St. Plaintiff-Appellee Medical Computer Systems, Inc. (hereinafter called MCSI, a Texas Corporation based at Dallas, Texas) brought this suit in Dallas County, Texas, against Hospital Sciences of Northern California, Inc. (hereinafter called HSNC, a California Corporation, based at Oakland, California) Eden Township Hospital District (a California Hospital District), West Contra Costa Hospital District (a California Hospital District), one Charles Johnson (a resident of California), Appellant James Reed (a resident of Texas) and Appellant O. B. Frasier (a resident of Harris County, Texas).

MCSI’s suit arises out of a written contract between itself and HSNC, wherein MCSI agreed to perform data processing services through HSNC to its member hospitals, including Eden and Brookside. Performance of the contract called for the member hospitals in the San Francisco, California area, to gather and prepare their input data and turn it over to MCSI representatives stationed in California, who in turn would send the data either by leased wire or mail to MCSI computers located in Dallas, Texas. The computers would issue the types of reports required by the hospitals and transmit them back from Texas to California over a leased line and deliver them to HSNC and its member hospitals. The reports made by the computers included such things as patient billing, proration of hospital bills between the insurance companies and the patients, accounts receivable, accounts payable, and several other aspects of hospital business records.

MCSI’s suit was in two counts, the first count being for the alleged unpaid balance due by HSNC, Eden, and Brookside to MCSI under the contract and for damages, with which count we are not concerned. The second count alleged a fraudulent conspiracy between Johnson, Reed and Frasier, wherein they were charged with interfering with the contractual relationship between MCSI and HSNC, causing HSNC to cancel its contract with MCSI and placing its work with another company called Medical Dimensions, Inc., (hereinafter called MDI), in which Reed and Frasier were interested. During the times material to the alleged conspiracy, Johnson was Executive Director of HSNC, and was a resident of California; Reed was Marketing Manager of MCSI and was alleged by Plaintiff-Appellee MCSI to be a resident of Dallas County, Texas, whereas Reed himself contended that he was a resident of Harris County, Texas; and Frasier was a resident of Harris County, Texas. Fra-sier had been an official of MCSI until May 31, 1970, when he was fired by MCSI, after which he had formed MDI with headquarters at Houston, Harris County, Texas, and was Chairman of the Board of Directors of MDI at the time of the alleged conspiracy.

Reed and Frasier each filed pleas of privilege to be sued in Harris County, Texas, which were controverted by Plaintiff. The trial court after a hearing overruled both pleas of privilege, from which order Reed and Frasier prosecute this appeal.

Appellants set out three points of error in their brief; however, in view of our ruling on the first point it will be unnecessary for us to discuss their second and third points. Their first point contends the trial court erred in overruling their pleas of privilege under Subdivision 4 of Article 1995 in that Plaintiff-Appellee failed to prove that any of the Defendants were residents of Dallas County and further that Plaintiff-Appellee failed to prove a cause of action against any Defendant alleged to be a resident of Dallas County. [701]*701We overrule this point and affirm the order of the trial court.

The pertinent language of Subdivision 4 is:

“4. Defendants in different counties.— If two or more defendants reside in different counties, suit may be brought in any county where one of the defendants resides. * * *

We have carefully reviewed the entire record, and have found that there is ample evidence to show that Reed was a resident of Dallas County, and was therefore a resident Defendant. Frasier was without dispute a resident of Harris County and was therefore a nonresident Defendant.

To maintain venue under Subdivision 4, Article 1995, VATS, where there is a resident and a nonresident Defendant, as here, it is not incumbent upon the Plaintiff to prove a cause of action against the nonresident Defendant, and he establishes his right to maintain venue where laid by (a) alleging a joint cause of action against both Defendants, or a cause of action against the resident Defendant so intimately connected with the cause of action alleged against the nonresident Defendant that the two may be joined under the rule intended to avoid a multiplicity of suits; (b) by proving by independent evidence that the resident Defendant in fact resides in such county; and (c) proving that the Plaintiff has a cause of action against the resident Defendant. Stockyards National Bank v. Maples (Comm.App.1936) 127 Tex. 633, 95 S.W.2d 1300, opinion adopted by the Supreme Court; Ladner v. Reliance Corporation (1956), 156 Tex. 158, 293 S.W.2d 758.

In the case at bar, we believe the Plaintiff has met the burden imposed upon him to maintain venue under Subdivision 4. First, he has alleged a joint cause of action against Reed, Frasier, and Johnson, by its allegations that they entered into a fraudulent conspiracy to bring about a cancellation by HSNC of the contract with Plaintiff, and to cause HSNC to place their data processing business with MDI. See McCollum v. Merchants Factors Corp. of Texas (Dallas Tex.Civ.App.1962) 358 S.W.2d 183, no writ history.

Second, we believe the Plaintiff proved Reed to be a resident of Dallas County. Reed together with his wife and mother-in-law owned a home at 3747 Vine-crest in the City of Dallas, in Dallas County, in which resided his wife and three children. Reed contended that his wife and he are permanently separated; however, there is no divorce suit pending nor is there any contemplated by himself or his wife. Reed resigned from MCSI on June 30, 1970, and went to work for MDI in July, 1970, in Houston. Since July 1970, he stayed for a time in a motel and then changed to an apartment in Houston where he was staying at the time of the trial court’s hearing. During all of this time he has been working in Houston, his apartment rent and his telephone bill have been paid or reimbursed by his employer MDI. Mr. Frasier, an officer of MDI, testified that his company maintained apartments for its employees as a “cost of doing business for distant locations that require various people to be in and out from time to time”.

Meanwhile, Reed’s wife and three children live at the Dallas home, where Reed keeps his personal clothing and effects. He “visits” his family in Dallas two or three or more times per month, according to his testimony, and does not need to take a suitcase there since he has adequate clothes and effects in the Dallas home.

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Bluebook (online)
482 S.W.2d 699, 1972 Tex. App. LEXIS 2165, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hospital-sciences-of-northern-california-inc-v-medical-computer-systems-texapp-1972.