M & F Worldwide Corp. v. Pepsi-Cola Metropolitan Bottling Co.

453 S.W.3d 492, 2014 Tex. App. LEXIS 13537, 2014 WL 7204951
CourtCourt of Appeals of Texas
DecidedDecember 18, 2014
DocketNO. 14-14-00045-CV
StatusPublished
Cited by5 cases

This text of 453 S.W.3d 492 (M & F Worldwide Corp. v. Pepsi-Cola Metropolitan Bottling Co.) 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
M & F Worldwide Corp. v. Pepsi-Cola Metropolitan Bottling Co., 453 S.W.3d 492, 2014 Tex. App. LEXIS 13537, 2014 WL 7204951 (Tex. Ct. App. 2014).

Opinion

OPINION

Sharon McCally, Justice

This is an interlocutory appeal1 from the denial of the special appearances filed by defendants M & F Worldwide Corp. (M & F Worldwide), MCG Intermediate Holdings Inc. (MCG Holdings), Mafeo Worldwide Corporation (Mafeo Worldwide), Mafeo Consolidated Group LLC (Mafeo Consolidated), and PCT International Holdings Inc. (PCT International), collectively, the ‘'Mafeo Defendants,” in this tortious interference suit brought by Pepsi-Cola Metropolitan Bottling Company (Pepsi). Because we conclude that the trial court properly denied these nonresident defendants’ special appearances, we affirm.

BACKGROUND

Pepsi filed this lawsuit in Texas in December 2011, asserting various tort claims, including tortious interference with a 1988 stock purchase agreement, fraudulent transfer, and conversion of certain insurance assets against the Mafeo Defendants, and others,2 including Cooper Industries, LLC;3 Cooper Industries, Ltd.;4 Cooper Holdings, Ltd.;5 Cooper US, Inc.;6 and Cooper Industries pic.,7 companies that we will refer to hereinafter as the “Cooper companies” for ease of reference. Pepsi also sued the Pneumo Abex Asbetos Claims Settlement Trust (the Trust), which is a Delaware trust managed by a Texas company, Integra Management Company, LLC (Integra). In its First Amended Petition, Pepsi alleged that torts had been committed in whole or in part in Texas:

Through the Plan C Agreement, which was designed to interfere with Pneumo Abex’s [contractual] indemnity and hold harmless obligations to [Pepsi], these defendants: (1) created and funded the Trust; (2) impaired or converted [Pep-sins rights to insurance proceeds and other insurance related and/or property rights, and transferred certain of those rights or property to the Trust; (3) engaged in conspiracies with Texas residents; and (4) committed all of these acts with the knowledge that the Trust and its agent (Integra) would pay for [497]*497and administer thousands of [asbestos] Products Claims eases through Integra’s offices and actions in Texas.

As background to the underlying suit, through a series of transactions and corporate transformations, Pepsi acquired certain indemnity rights associated with asbestos-related claims. The responsibility to provide Pepsi that indemnity traces through a more complex series of transactions; corporate transformations, a bankruptcy, a lawsuit, and a settlement agreement. The relationships between the various parties, nonparties, and agreements are all relevant to our analysis of Texas contacts and, therefore, we set them forth in some detail.

First, the 1988 stock purchase agreement (1988 SPA) created certain indemnity rights for asbestos-related claims as follows.8 IC Industries, Pepsi’s predecessor in interest, owned two corporations that produced asbestos containing products: Pneumo Abex Corp. and Abex Corp. Through the 1988 SPA, IC Industries transferred these corporations to PA Holdings.9 Pneumo Abex Corp. and Abex Corp. agreed, as part of the 1988 SPA, to indemnify IC Holdings for, as is relevant here, all asbestos-related claims filed after August 1998. PA Holdings later merged with Pneumo Abex Corp. and Abex Corp., and the companies became Pneumo Abex Corp. As such, Pneumo Abex Corp. thereafter owed the post-August 1998 indemnification obligation to IC Industries. Through succession, Pepsi became entitled to IC Industries’ indemnification rights.10

Several subsequent transfers of the assets and liabilities of Pneumo Abex Corp. occurred among affiliates of MacAndrews & Forbes Holdings Inc. (MacAndrews) and the Cooper companies. The MacAn-drews-affiliated companies include all of the Mafco Defendants.11 Through these various transfers, Pneumo Abex Corp. acquired indemnity obligations for the same asbestos claims for which it owed Pepsi indemnification. In 1995, Pneumo Abex Corp. became an affiliate of MacAndrews, and MCG Holdings began managing and funding Pneumo Abex Corp.’s non-friction related asbestos indemnification obligations; Pneumo Abex Corp. remained financially responsible for all of these liabilities, however. Meanwhile, from 1998 to 2001, the indemnification owed to Pepsi by Pneumo Abex Corp. for automotive-related asbestos claims was provided by another corporation to which Cooper had transferred ownership of its automotive products business. This corporation, Federal Mogul Corp., filed for bankruptcy protection in 2001, and under the terms of a guaranty, Cooper again became responsible for Pneumo Abex’s automotive friction products indemnification obligations.

In 2004, Pneumo Abex Corp. disposed of all assets and liabilities relating to its only business and merged into Pneumo Abex LLC (hereafter, Pneumo Abex). Also in 2004, Mafco Worldwide became responsible for the indemnification and defense obligations Pneumo Abex owed to Pepsi for asbestos claims arising from aerospace products, a much smaller subset of the overall asbestos-related claims. The Cooper companies provided indemnities and [498]*498defense obligations to Pepsi for the much larger portion of asbestos claims arising from Pneumo Abex’s automotive friction products. Since 2004, Pneumo Abex “has not conducted any business operations nor owned any assets other than insurance and indemnity rights directly related” to the various product claims.

Pneumo Abex, the Mafco Defendants, and the Cooper companies discussed disputed issues relating to Pneumo Abex’s asbestos liabilities and assets. In 2006, the Mafco Defendants, through representatives Steven Fasman, Barry Schwartz, and their attorney,12 traveled to Texas to meet with the Cooper companies about the Federal Mogul bankruptcy. In 2007, as part of the bankruptcy proceedings of Federal Mogul, the Cooper companies and Pneumo Abex proposed two alternative plans to address the Pneumo Abex indemnity obligations., Plan A involved the creation of a subfund of the Federal Mogul-bankruptcy trust to address certain Pneu-mo Abex asbestos claims, including those related to the non-friction business indemnified by the Mafco Defendants.

As early as January 2008, the Cooper companies and MacAndrews were discussing “various alternatives to Plan B ... in the event that Plan A [was] rejected.” In February 2008, Fasman outlined several proposals “for Cooper LLC’s consideration” to address “possible structures intended to address alternatives superior to Plan B, should Plan A prove unsuccessful.” Plan A was publicly proposed and briefed to the Federal Mogul bankruptcy court, but the court rejected this plan. Plan B, under which Pneumo Abex and the Cooper companies received $140 million to resolve claims against Federal Mogul, was approved by the bankruptcy court.

A year later, on February 5, 2009, Mafco Defendants’ representatives Schwartz and Fasman traveled to Houston and met with Cooper executives. The record reflects that Kirk Hachigian, Chairman and Chief Executive Officer of Cooper Industries, emailed Schwartz the next day, thanking him for the “trip to Houston” and stating that they had a “good post meeting,” which resulted in a “few ideas.” In this email, Hachigian stated, “[I]n the end, it would be best for both of us to find a middle ground here and put something together.” Hachigian also thanked Schwartz for “reaching out.”

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453 S.W.3d 492, 2014 Tex. App. LEXIS 13537, 2014 WL 7204951, Counsel Stack Legal Research, https://law.counselstack.com/opinion/m-f-worldwide-corp-v-pepsi-cola-metropolitan-bottling-co-texapp-2014.