Jim Richardson, Richardson Outdoor Advertising, Inc. and Action Display, Inc. v. MH Outdoor Media, LLC

CourtCourt of Appeals of Texas
DecidedSeptember 15, 2016
Docket14-16-00041-CV
StatusPublished

This text of Jim Richardson, Richardson Outdoor Advertising, Inc. and Action Display, Inc. v. MH Outdoor Media, LLC (Jim Richardson, Richardson Outdoor Advertising, Inc. and Action Display, Inc. v. MH Outdoor Media, LLC) 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
Jim Richardson, Richardson Outdoor Advertising, Inc. and Action Display, Inc. v. MH Outdoor Media, LLC, (Tex. Ct. App. 2016).

Opinion

Affirmed and Memorandum Opinion filed September 15, 2016.

In The

Fourteenth Court of Appeals

NO. 14-16-00041-CV

JIM RICHARDSON, RICHARDSON OUTDOOR ADVERTISING, INC., AND ACTION DISPLAY, INC., Appellants V.

MH OUTDOOR MEDIA, LLC, Appellee

On Appeal from the 11th District Court Harris County, Texas Trial Court Cause No. 2013-57897

MEMORANDUM OPINION

In this interlocutory appeal from the denial of a special appearance, the main question presented is whether the trial court erred by finding that three nonresident defendants had established minimum contacts in the state of Texas. The plaintiff, a Texas limited liability company, alleged in its petition that it was defrauded in a conspiracy between a Texas resident and the three nonresident defendants. To support its claim that the nonresident defendants were amenable to jurisdiction in this state, the plaintiff introduced evidence that the nonresident defendants had traveled to Texas to meet with the plaintiff and develop a business relationship, which was later exploited in the alleged conspiracy. We conclude that this evidence, in addition to other evidence discussed in this opinion, supports the trial court’s finding that the nonresident defendants established minimum contacts in Texas. We therefore affirm the trial court’s order denying the special appearance.

BACKGROUND

MH Outdoor Media, LLC is a Texas limited liability company that manages billboards and other outdoor media assets. In 2011, MH Outdoor hired Curtis Brooks, a Texas resident, to acquire and manage assets that fit the company’s business model. For nearly two years, Brooks negotiated on behalf of MH Outdoor to acquire both billboards and billboard companies located throughout the United States. By 2013, MH Outdoor learned that certain of these transactions were completed at inflated prices and that Brooks had received kickbacks following each purchase.

MH Outdoor began an investigation into Brooks’s transactions, which led to the three nonresident defendants involved in this appeal. Jim Richardson is an Alabama resident and the president of two Alabama corporations: Richardson Outdoor Advertising, Inc. and Action Display, Inc. For ease of reference, we identify Richardson and his corporations collectively as the Richardson Defendants. Between 2011 and 2013, MH Outdoor paid the Richardson Defendants more than $11 million for the purchase of billboards and other assets, all of which were located in either Alabama, Florida, or Tennessee. During the same period, the Richardson Defendants wired at least $1.75 million to Brooks’s personal bank account in Texas.

2 MH Outdoor filed suit in Texas against Brooks, the Richardson Defendants, and several additional parties not involved in this appeal. Among its asserted claims, MH Outdoor alleged that the Richardson Defendants conspired with Brooks to sell billboards to MH Outdoor at above-market prices and to split the resulting profits.

The Richardson Defendants filed a special appearance, challenging whether a Texas court could exercise specific jurisdiction over them.1 Attached to their special appearance was a sworn declaration, in which the Richardson Defendants stated that they had no offices, employees, or presence in Texas. They admitted that they had traveled to Texas in 2011 to meet with Brooks and other representatives of MH Outdoor. However, the Richardson Defendants asserted that “no business was transacted” at this meeting and that they were just “get[ting] acquainted personally.” The Richardson Defendants also admitted that they came to Texas to meet with MH Outdoor on a second occasion, after MH Outdoor discovered the payments to Brooks.

In a response, MH Outdoor produced an affidavit from its president, Mac Haik, who testified that he personally attended the initial meeting with Brooks and the Richardson Defendants in 2011. Controverting the Richardson Defendants’ evidence, Haik testified in his affidavit that the meeting “was solely related to business deals between Richardson and MH Outdoor regarding billboard transactions” and “was not a personal visit.” Haik further testified that, in the two years following the meeting, MH Outdoor entered into at least thirty transactions with the Richardson Defendants, and in many of those transactions, “Richardson

1 The Richardson Defendants also challenged the exercise of general jurisdiction, but MH Outdoor expressly chose to not litigate that issue. Accordingly, we focus on just the question of specific jurisdiction.

3 was the one who reached out to MH Outdoor with potential deals, not the other way around.”

Haik testified that the Richardson Defendants came to Texas for a second in- person meeting after MH Outdoor realized that Brooks had been receiving kickbacks from billboard companies unrelated to the Richardson Defendants. Haik testified that, at this second meeting, the Richardson Defendants misled MH Outdoor about the nature of the payments that they had been making to Brooks. According to Haik, the Richardson Defendants represented that the money they had wired to Brooks was a loan, even though there was no note, interest rate, or repayment.

Haik testified that there were numerous other communications with the Richardson Defendants after Brooks’s kickbacks had come to light. However, in these communications, the Richardson Defendants continued to conceal their relationship with Brooks. In one email correspondence, the Richardson Defendants offered to manage the assets of MH Outdoor in Alabama, Florida, and Tennessee. Later, after proposing additional business dealings, the Richardson Defendants opined that “the Curtis [Brooks] mess and dishonesty to Mac [Haik]. . . should [not] be a negative on [their] part.”

The trial court conducted a hearing on the special appearance. Although no live testimony was taken, the Richardson Defendants presented an argument to the trial court, in which they characterized their payments to Brooks as a finder’s fee, rather than a kickback or loan. At the end of the hearing, the trial court ruled against the Richardson Defendants and denied the special appearance. The Richardson Defendants moved for findings of fact and conclusions of law, but the trial court denied that motion as well.

4 ISSUES PRESENTED

The Richardson Defendants raise three issues in this appeal. In their first two issues, they challenge the trial court’s ruling on their special appearance, arguing that there is no basis for either specific jurisdiction or general jurisdiction. Because MH Outdoor only asserts specific jurisdiction over the Richardson Defendants, we do not consider the arguments related to general jurisdiction. In their third issue, the Richardson Defendants argue that the trial court erred by not entering findings of fact and conclusions of law. We address this issue in our discussion of the standard of review.

PERSONAL JURISDICTION

Texas courts have personal jurisdiction over a nonresident defendant when the Texas long-arm statute authorizes such jurisdiction and when the exercise of jurisdiction is consistent with the guarantees of due process. See Spir Star AG v. Kimich, 310 S.W.3d 868, 872 (Tex. 2010). The Texas Supreme Court has interpreted the broad language of the Texas long-arm statute to extend Texas courts’ exercise of personal jurisdiction “as far as the federal constitutional requirements of due process will permit.” See BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002) (citing Tex. Civ. Prac. & Rem. Code § 17.042).

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Bluebook (online)
Jim Richardson, Richardson Outdoor Advertising, Inc. and Action Display, Inc. v. MH Outdoor Media, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jim-richardson-richardson-outdoor-advertising-inc-and-action-display-texapp-2016.