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OPINION
No. 04-08-00869-CV
Irma Roldan WALZ a/k/a Irma Walz Martinez, Appellant
v.
Veronica MARTINEZ, Patricia Martinez, Maria Fernanda Martinez, and Guillermo Martinez, Appellees
From the 408th Judicial District Court, Bexar County, Texas Trial Court No. 2006-CI-05081 Honorable David A. Berchelmann, Jr., Judge Presiding
Opinion by: Catherine Stone, Chief Justice
Sitting: Catherine Stone, Chief Justice Phylis J. Speedlin, Justice Steven C. Hilbig, Justice
Delivered and Filed: November 25, 2009
AFFIRMED AS MODIFIED
Irma Roldan Walz a/k/a Irma Walz Martinez appeals the trial court’s order granting a special
appearance filed by the appellees, who were third party defendants in the underlying cause. Walz
contends the trial court erred in sustaining the special appearance because the appellees purposefully
availed themselves of the jurisdiction of the Texas courts by: (1) filing a will contest in a pending
probate proceeding and seeking injunctive relief against Walz in that proceeding; and (2) initiating 04-08-00869-CV
the underlying lawsuit against Walz as the purported shareholders of Construcciones Modernas de
Mexico, S.A. (“Construcciones”). Walz further contends the trial court erred in dismissing her
claims with prejudice. We sustain Walz’s complaint regarding the dismissal being with prejudice,
but we overrule Walz’s other complaints. We modify the trial court’s order to dismiss the
underlying cause without prejudice and affirm the trial court’s order as modified.
BACKGROUND
Fernando Antonio Martinez Cobo and Walz were married on April 8, 2004. At the time of
the marriage, Fernando had been diagnosed with prostate cancer. Fernando had four children from
two prior marriages: Maria Fernanda Martinez, Guillermo Martinez, Veronica Martinez, and Patricia
Martinez.
Fernando died on February 18, 2006. Soon thereafter, Walz filed an application in a Texas
probate court to probate a will dated January 31, 2005.
On March 1, 2006, Fernando’s children filed a petition to contest the will in the probate
court. The petition also included an application for the appointment of a temporary administrator,
a request for an accounting, and a request for a temporary restraining order and injunctive relief. The
will was contested on the grounds that it was not executed with proper formalities and that Fernando
lacked testamentary capacity to execute the will or was unduly influenced. The petition requested
the appointment of a qualified third party with no interest in the estate as temporary administrator.
The temporary restraining order was requested to prevent Walz from selling, transferring, or
disposing of the assets of the estate pending the outcome of the will contest.
Maria’s affidavit was attached to the petition in support of the request for the temporary
restraining order. In her affidavit, Maria stated that she had learned that many of the assets Fernando
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owned and acquired before his marriage to Walz had been “sold, transferred and/or otherwise
secreted after his marriage to [Walz] under very suspicious, suspect and/or fraudulent circumstances,
while his physical, and mental abilities were rapidly deteriorating.” Maria also stated that the assets
of one corporation in Mexico in which Maria also held an interest had been liquidated without her
knowledge and consent. Maria further stated that some of Fernando’s assets in Mexico had already
been transferred to Walz’s daughter. Based on Walz’s prior actions, Maria stated that she believed
Walz would make every effort to “hide, sell or transfer the estate’s assets in order to deprive”
Fernando’s children “of any benefit in the estate should [they] prevail in contesting the will.”
On March 1, 2006, a hearing was held on the application for temporary restraining order filed
by Fernando’s children in probate court. Fernando’s children appeared at the hearing by and through
counsel of record. At the conclusion of the hearing, the probate court signed an agreed order in
which Walz agreed to refrain from: (1) taking any action to release, remove, or transfer any funds
belonging to Fernando’s estate; and (2) selling or disposing of any asset belonging to the estate.
On March 30, 2006, Construcciones filed a petition and an application for a temporary
restraining order and temporary injunction in a Texas district court against Walz and two entities that
were the custodians of certain accounts in the United States. Construcciones sought to recover funds
and property belonging to it that allegedly had been illegally taken or converted by Walz for her own
use and benefit. The petition alleged that although Walz and her daughter were given authority as
assistants to the prior administrator of Construcciones to collect and administer funds, Walz sold
corporate assets and failed to account for the proceeds which she wrongfully removed to the United
States and deposited into accounts of which Walz was the sole owner. The proceeds were alleged
to be in excess of $3.5 million. The district court signed an order on March 30, 2006, granting the
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temporary restraining order and setting a hearing on the temporary injunction. The parties later
agreed to a temporary injunction.
On November 16, 2006, Walz filed a third party petition asserting claims against various
third party defendants, including Fernando’s children. Walz alleged that Fernando owned 90% of
the shares of stock of Construcciones. Walz further alleged that although Fernando’s children
contend Fernando gave them his shares of Construcciones on March 18, 2005 in Mexico, Fernando
was undergoing chemotherapy in the United States when the gifting of the shares allegedly occurred.
Because Mexican law required Fernando to be present in order to gift his shares, Walz asserted that
any gifting of the shares was invalid because Fernando was too ill to travel to Mexico on that date.
Walz alleged that Fernando’s children had fraudulently produced forged documents in Mexico to
support the gifting of the shares. Walz asserted claims for fraud, conversion, and civil conspiracy
against the third party defendants relating to the actions taken with regard to the alleged gifting of
the shares.
In December of 2006, Fernando’s children filed a special appearance and a supplemental
special appearance. Each of Fernando’s children signed an affidavit stating his or her only contact
with the State of Texas was for the purpose of visiting relatives on a temporary basis.
On March 28, 2007, all of the parties in the district court case agreed to a level 3 discovery
control plan. On April 12, 2007, the trial court approved the report of a mediator stating that
mediation was conducted on September 29, 2006, but the case did not settle. On April 18, 2007, the
trial court granted a motion to withdraw filed by the attorneys representing both Construcciones and
Fernando’s children. Approximately one year later, Construcciones non-suited its claims against
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Walz and against the only defendant entity remaining since the other defendant entity had obtained
a summary judgment.
On June 6, 2008, Walz filed her response to the special appearance previously filed by
Fernando’s children. In the response, Walz asserted the court had jurisdiction over Fernando’s
children because they had filed various motions and pleadings in the probate proceeding, participated
in discovery, sought and received affirmative relief in obtaining a temporary restraining order and
an injunction, and made numerous appearances. In the alternative, Walz asserted Fernando’s
children had purposefully availed themselves of the laws of Texas by seeking affirmative relief
against Walz as the purported shareholders of Construcciones. Walz alleged that Construcciones
had filed its lawsuit against her at the request of Fernando’s children in their capacity as alleged
shareholders.
The trial court held a hearing on the special appearance. At the hearing, the attorney
representing Fernando’s children noted that Walz’s third party petition expressly alleged that the
actions giving rise to the claims occurred in Mexico. At the conclusion of the hearing, the district
court granted the special appearance, and Walz appeals the district court’s order.
DISCUSSION
Personal jurisdiction is a question of law which we review de novo. Retamco Operating, Inc.
v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009). However, the trial court frequently must
resolve questions of fact before deciding the jurisdiction question. BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 794 (Tex. 2002). When a 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. Id. at 795. When the appellate record includes the reporter’s
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and clerk’s records, these implied findings are not conclusive and may be challenged for legal and
factual sufficiency. Id.
Under constitutional due process analysis, personal jurisdiction is achieved when: (1) the
nonresident defendant has established minimum contacts with the forum state; and (2) the assertion
of jurisdiction complies with traditional notions of fair play and substantial justice. Id. A defendant
establishes minimum contacts with a state when it purposefully avails itself of the privilege of
conducting activities within the forum state, thus invoking the benefits and protections of its laws.
Id. 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 nonresident’s contacts can give rise to either specific or general jurisdiction. Id.
General jurisdiction arises when the defendant’s contacts within the forum are continuous
and systematic. Id. Specific jurisdiction arises when: (1) the defendant purposefully avails itself of
conducting activities in the forum state; and (2) the cause of action arises from or is related to those
contacts or activities. Id. In determining whether a defendant purposefully availed itself of the
privilege of conducting activities in Texas: (1) only the defendant’s contacts with the forum are
relevant, not the unilateral activity of another party or a third person; (2) the contacts relied upon
must be purposeful rather than random, fortuitous, or attenuated; and (3) the defendant must seek
some benefit, advantage, or profit by availing itself of the jurisdiction. Id. at 338-39.
A. Purposeful Availment Through Will Contest
Walz initially contends the trial court erred in granting the special appearance because
Fernando’s children purposefully availed themselves of the privilege of filing a will contest and
seeking affirmative relief in the Texas probate proceeding. Walz relies on two opinions to support
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her contention. See In re Estate of Davis, 216 S.W.3d 537 (Tex. App.—Texarkana 2007, pet.
denied); Smith v. Lanier, 998 S.W.2d 324 (Tex. App.—Austin 1999, pet. denied).
In In re Estate of Davis, John M. Stuckey, Jr. was appointed as the executor of an estate by
a Texas probate court. 216 S.W.3d at 541. Stuckey was subsequently sued, both individually and
as executor, for damages based on his alleged malfeasance as executor of the estate. Id. at 541-42.
Stuckey alleged the state court lacked personal jurisdiction over him. Id. at 542. Stuckey’s actions
in Texas included: (1) applying for probate of the will; (2) qualifying as independent executor; (3)
filing the required appraisement and list of claims; and (4) collecting funds from bank accounts in
Texas and moving the money to Georgia banks. Id. at 544-45. In analyzing the minimum contacts
that existed, the Texarkana court noted that Stuckey had petitioned the Texas court to be recognized
as the independent executor and made several trips to Texas in carrying out those duties. Id. at 546.
The court further noted that Stuckey invoked the authority of the Texas court as executor to take
assets from institutions in Texas and distribute them. Id. Finally, the court noted that Stuckey
named an agent in Texas to accept service of process in all actions and proceedings with respect to
the estate. Id. at 546. Because all of the claims against Stuckey arose from his actions as the
executor of the estate of a Texas resident, the Texarkana court concluded that specific jurisdiction
existed. Id.; see also Succession of Simms, 175 So.2d 113, 123 (La. Ct. App. 1965) (finding
minimum contacts satisfied where defendants qualified as executors in probate proceeding to
administer Louisiana property).
In Smith v. Lanier, Theodore and Wylma Reid married after retirement age and remained
married for more than twenty-five years. 998 S.W.2d at 328. The Reids resided in Texas and owned
property valued at more than $2,500,000.00. Id. Carol Ann Reid Smith, Mr. Reid’s only child from
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a previous marriage, resided in South Carolina during the Reids’ marriage. Id. In February of 1998,
Smith came to Texas to help the Reids move into a retirement home in Austin. Id. During the visit,
Smith attended a meeting with Mr. Reid and his attorney at which Smith accepted Mr. Reid’s power
of attorney and aided in the drafting of his will. Id. Mr. Reid’s will left Smith all of his property and
named her as the personal representative. Id. When Mrs. Reid died in June of 1998, her will was
admitted for probate in Texas in July of 1998, and Sidney Lanier was named as her independent
executor. Id. Mrs. Reid left all of her property to the Texas Baptist Children’s Home. Id.
Smith returned to Austin for Mrs. Reid’s funeral and began using her father’s power of
attorney to gather his assets. Id. Two weeks after the funeral, Smith returned to Texas to move her
father to South Carolina and to collect his assets and transfer them to South Carolina. Id. Over the
next several weeks, using the power of attorney, Smith: (1) took all of Mr. Reid’s financial records
to South Carolina; (2) removed the securities from a safe-deposit box in Texas and closed the
account; (3) transferred the securities to a Merrill Lynch account in South Carolina; (4) stored the
Reids’ automobile in Niederwald, Texas; (5) withdrew $42,000 from the Reids’ account at Bank One
in Austin and deposited it into two accounts in South Carolina; and (6) established her power of
attorney over Mr. Reid’s American Express mutual fund account. Id. at 328-29.
Mr. Reid died in August of 1998. In September of 1998, Mr. Reid’s will was admitted for
probate in South Carolina. Id. at 329. Lanier initiated proceedings in Texas to halt the probate
process in South Carolina to protect Mrs. Reid’s estate. Id. Lanier filed a declaratory judgment
action seeking to determine the characterization of the property owned by the Reids, i.e., community
or separate. Id. Lanier also obtained a temporary restraining order freezing one-half of the assets
owned by the Reids. Id.
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Smith challenged the Texas court’s jurisdiction over her as an individual. Id. at 333. The
Austin court noted, however, that Smith, acting as attorney in fact, conducted several transactions
with various Texas residents and institutions involving the Reids’ property. Id. at 334. The Austin
court concluded, “As attorney in fact, Smith took advantage of the laws of the State of Texas to
exercise control over her father’s assets. She purposefully directed her activities towards Texas
residents and institutions, activities that resulted in the removal from the state of the property that
is the basis of the dispute. Furthermore, she was on notice that the property might be subject to the
jurisdiction of the Texas probate court” through her awareness of Texas’s community property laws.
Id. at 335. Accordingly, the Austin court held that sufficient evidence supported the exercise of
personal jurisdiction over Smith in her individual capacity. Id.
The facts in both In re Estate of Davis and Smith v. Lanier are readily distinguishable from
the instant case. None of Fernando’s children sought to be appointed as the executor of Fernando’s
estate, nor had they taken any action on behalf of Fernando’s estate in Texas other than obtaining
the agreed temporary restraining order and temporary injunction to protect the estate’s assets.
Similarly, the primary case relied upon by Walz in her reply brief is also distinguishable. See
Turner v. Turner, No. 14-98-00510-CV, 1999 WL 33659, at *6-7 (Tex. App.—Houston [14th Dist.]
Jan. 28, 1999, no pet.) In Turner, John and Mary Turner, husband and wife, created a revocable
trust. 1999 WL 33659, at *1. John’s son, Bryon, subsequently moved his father into a nursing home
in Texas and initiated guardianship proceedings in Texas. Id. Mary intervened in the guardianship,
and Bryon and Mary subsequently entered into an agreed judgment pursuant to which Mary agreed
to pay John’s health care expenses from the money in the trust to the extent the expenses exceeded
retirement payments John received. Id. Mary also agreed to provide Bryon with copies of the
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statements for the trust account. Id. After John died, Bryon filed a petition to remove Mary as
trustee, believing she was misappropriating funds from the trust. Id. In analyzing Mary’s minimum
contacts, the Houston court noted:
Here, as intervenor in the guardianship suit, Mary inserted herself into the proceeding, and availed herself of this state’s judicial system, thereby conferring specific jurisdiction on the trial court. Moreover, by entering into the agreed judgment, Mary, as trustee, contracted to perform her obligations – paying health care providers, making bank deposits, and sending accounting statements to Bryon – in Texas. Thus, Mary has purposefully availed herself the privileges and benefits of the laws of this state.
Id. at *7. Perhaps more importantly for purposes of the instant case, the court also noted, “a review
of the record reflects that the claims [against Mary] arise from, and are related to Mary’s alleged
breach of the agreed judgment.” Id. at *6.
As the Texas Supreme Court has noted, “purposeful availment alone will not support an
exercise of specific jurisdiction.” Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 579 (Tex.
2007). Instead, a second requirement must be satisfied. As the Texas Supreme Court has explained:
Specific-jurisdiction analysis has two co-equal components. For specific-jurisdiction purposes, purposeful availment has no jurisdictional relevance unless the defendant’s liability arises from or relates to the forum contacts. . . . . The ‘arise from or relate to’ requirement lies at the heart of specific jurisdiction by defining the required nexus between the nonresident defendant, the litigation, and the forum.
Id.
Unlike Turner where the claims arose from Mary’s breach of the terms of an agreed judgment
signed by a Texas court, the claims alleged against Fernando’s children arise from an allegedly
fraudulent transfer of shares of stock of a Mexican corporation in Mexico. Thus, even if contesting
the will could be considered purposeful availment, the claims asserted by Walz do not arise from or
relate to the will contest, the protection sought in relation to the assets of Fernando’s estate, or any
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other action taken by Fernando’s children in the probate court proceeding. See Gordon v. Granstedt,
513 P.2d 165, 171 (Haw. 1973) (noting appearance in court in connection with a will contest does
not imply consent that party would subject himself to the personal jurisdiction in that court in any
subsequent litigation there on any matter involving the estate).
B. Purposeful Availment Through Construcciones Lawsuit
Walz next asserts that Fernando’s children purposefully availed themselves by acting as
shareholders of Construcciones and initiating the lawsuit filed by Construcciones. Walz asserts that
her claims against Fernando’s children arise from the fraudulent actions they took in attempting to
become the shareholders of Construcciones which enabled them to file the lawsuit in the
corporation’s name. Walz further contends that Fernando’s children cannot shield themselves from
liability because Construcciones was not an independent entity, citing Esse v. BP Am. Prod. Co., No.
01-04-00567-CV, 2006 WL 1227724 (Tex. App.—Houston [1st Dist.] May 4, 2006, no pet. ) (mem.
op.).
As a general rule, jurisdiction over an individual cannot be based upon jurisdiction over a
corporation. Nichols v. Lin, 282 S.W.3d 743, 750 (Tex. App.—Dallas 2009, no pet.). Jurisdiction
over an individual can be based on jurisdiction over a corporation with which the individual is
associated only if the corporation is the alter ego of the individual. Id. Under the alter ego theory,
courts disregard the corporate entity when there exists such unity between corporation and individual
that the corporation ceases to be separate. Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 228 (Tex.
1990). An alter ego relationship may be shown from the total dealings of the corporation and the
individual. Id. This showing may include evidence of the degree to which corporate formalities
have been followed and corporate and individual property have been kept separately, the amount of
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financial interest, ownership and control the individual maintains over the corporation, and whether
the corporation has been used for personal purposes. Id.
The only evidence regarding the dealings between Fernando’s children and Construcciones
in the appellate record are translated corporate minutes documenting various corporate actions,
including the transfer of shares to Fernando’s children. Walz’s petition does not contain any specific
factual allegations to delineate her alter ego claim apart from asserting Fernando’s children
fraudulently obtained ownership of the shares, and the record contains no evidence to support an
alter ego finding. See Amaral v. Steele, No. 14-02-00368-CV, 2002 WL 31427018, at *2 (Tex.
App.—Houston [14th Dist.] Oct. 31, 2002, no pet.) (holding record did not support alter ego
finding).
The only case cited by Walz in support of her argument is readily distinguishable. In Esse,
the sole shareholder of a corporation consulted with his father, who was the sole officer and director
of the corporation, regarding the sale of an asset of the corporation. 2006 WL 1227724, at *8. The
claims asserted in the case included a claim for fraud and fraudulent transfer arising from the sale
of that asset. Id. at *7. The asset was located in Texas and was one of the primary assets owned by
the corporation. Id. at *8. The shareholder and his father discussed the corporation’s affairs during
monthly telephone conversations. Id. The shareholder and his father also discussed the price at
which the asset should be sold, and the shareholder consented to the sale. Id.
Unlike the facts in Esse, the only activity alleged in the petition was that Fernando’s children
engaged in fraudulent actions in Mexico that resulted in the fraudulent transfer of shares of stock in
a Mexican corporation to them. Based on the evidence presented, we hold personal jurisdiction
cannot be exercised over Fernando’s children based on Construcciones’s filing of a lawsuit in Texas.
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C. Dismissal With Prejudice
Finally, Walz contends the trial court erred in dismissing her claim with prejudice.
Fernando’s children concede that the trial court erred in dismissing the claims with prejudice. We
also agree that the dismissal with prejudice was erroneous. See Geo-Chevron Ortiz Ranch #2 v.
Woodworth, No. 04-06-00412-CV, 2007 WL 671340, at *4 (Tex. App.—San Antonio Mar. 7, 2007,
pet. denied) (mem. op.) (holding dismissing action with prejudice when granting special appearance
is error). Accordingly, Walz’s third issue is sustained.
CONCLUSION
The trial court’s order is modified to dismiss the underlying cause without prejudice. The
trial court’s order is affirmed as modified.
Catherine Stone, Chief Justice
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