Mabry v. Reid

130 S.W.3d 385, 2004 Tex. App. LEXIS 2134, 2003 WL 23312792
CourtCourt of Appeals of Texas
DecidedMarch 4, 2004
Docket09-03-343 CV
StatusPublished
Cited by7 cases

This text of 130 S.W.3d 385 (Mabry v. Reid) 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
Mabry v. Reid, 130 S.W.3d 385, 2004 Tex. App. LEXIS 2134, 2003 WL 23312792 (Tex. Ct. App. 2004).

Opinions

OPINION

STEVE McKEITHEN, Chief Justice.

This is an interlocutory appeal from an order granting a special appearance of an out-of-state defendant. Tex. Civ. Prac. & Rem.Code Ann. § 51.014(a)(7) (Vernon Supp.2004). See BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex.2002). We affirm the trial court’s order.

Plaintiff Charles Mabry and his brother Daniel Mabry were the owners of a metal casting foundry in Beaumont, Texas. Citation Corporation purchased the stock of the foundry from the Mabry brothers. As part of that agreement, the Mabry brothers became employees of Citation, signing identical employment and non-competition agreements.

Eventually, both Daniel and Charles disputed the amount due to them under their employment agreements. Daniel notified Citation of the company’s alleged breach of contract and was proceeding with arbitration as required by the agreement. Charles had not yet done so. Virgil Reid was an employee of Citation, and not a Texas resident. As part of his regular duties, Reid would visit Citation’s various operations, including visiting Beaumont from time to time. Charles alleged that he and Reid entered into, an oral agreement during one of those visits in which, in return for Charles agreeing not to assert the claims under his agreement, Citation would compensate him the same amount as Daniel. Over three years later, Daniel was awarded $123,054 in additional compensation. While Daniel’s claim was pending, Charles refrained from asserting his rights against Citation. When Citation refused to pay the identical amount to Charles, Charles sued Citation (and related entities) for breach of contract and fraud, seeking damages of $123,054 plus interest, attorneys’ fees and costs. Charles subsequently filed a motion for partial summary judgment. In Citation’s response to this motion, Citation asserted that Reid did not have the authority to enter into any settlement agreement. Charles alleges that Citation had not asserted this lack of authority prior to its January 17, 2003, response to his motion for partial summary judgment. However, in response to an interrogatory filed on or about July 24, 2001, Citation stated “... Reid did not have the authority to enter into any alleged oral agreement....”

On January 27, 2003, Mabry filed a Second Amended Original Petition, which added Virgil Reid, individually, as a defendant, allegedly because Citation was, for the first time, raising the issue of Reid’s capacity to bind it to any agreement. Mabry’s motion for partial summary judgment was denied. Reid subsequently filed a special appearance, pursuant to Rule 120a of the Texas Rules of Civil Procedure, asserting that the purported exercise of jurisdiction over him by the Texas courts would deprive him of Due Process of Law, as guaranteed by the Constitution of the United States. In support of the special appearance, Reid filed his affidavit and deposition excerpts. Mabry filed a “Response to De[388]*388fendant Virgil Reid’s Memorandum and Evidence in Support of Defendant Virgil Reid’s Special Appearance.” The trial court granted Reid’s special appearance.

Mabry raises three issues on appeal: (1) the trial court erred in granting Reid’s special appearance because Reid presented no evidence that his actions were performed within the course and scope of his employment with Citation Corporation; (2) the trial court erred in granting Reid’s special appearance because Texas case law holds the fiduciary shield doctrine (which protects a corporate employee from personal jurisdiction when all the individual’s contacts in Texas were on behalf of an employer) is not applicable when a corporate employee, such as Reid, commits a tort on behalf of his employer; and (3) the trial court erred in failing to file findings of fact and conclusions of law.

Texas courts’ jurisdiction over nonresident defendants is governed by the Long Arm Statute, Tex. Civ. Prac. & Rem. Code Ann. §§ 17.041-045 (Vernon 1997 & Supp.2004), which permits the exercise of jurisdiction over non-residents that do business in the state. Section 17.042 sets forth a non-exclusive listing of activities which constitute doing business. Marchand, 83 S.W.3d at 795. The “doing business” requirement is as broad as the United States Constitution permits. See General Elec. Co. v. California Ins. Guar. Ass’n, 997 S.W.2d 923, 926 (Tex.App.Beaumont 1999, pet. denied); Carrot Bunch Co., Inc. v. Computer Friends, Inc., 218 F.Supp.2d 820, 824 (N.D.Tex.2002).

A plaintiff has the initial burden of pleading sufficient allegations to bring a non-resident within the provisions of the statute. Marchand, 83 S.W.3d at 793. A defendant challenging the Texas court’s jurisdiction over it must negate all jurisdictional bases. Id. “Whether a court has personal jurisdiction over a defendant is a question of law.” Id.1 See also American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 805-06 (Tex.2002). Review is de novo. Id; see also Allianz Risk Transfer (Bermuda) Ltd. v. S.J. Camp & Co., 117 S.W.3d 92, 95 (Tex.App.-Tyler 2003, no pet.). “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.” Marchand, 83 S.W.3d at 795; Solow v. Century Assets Corp., 12 S.W.3d 512, 514 (Tex.App.-Beaumont 1999, no pet.). ‘When the appellate record includes the reporter’s and clerk’s records, these implied findings are not conclusive and may be challenged for legal or factual sufficiency in the appropriate appellate court.” Marchand, 83 S.W.3d at 795. “On appeal, we determine the special appearance on the basis of the pleadings, any stipulations by and between the parties, such affidavits and attachments as may be filed by the parties, the result of discovery processes, and any trial testimony.” Allianz Risk Transfer (Bermuda) Ltd. v. S.J. Camp & Co., 117 S.W.3d at 95.

Personal jurisdiction over a non-resident defendant meets constitutional due process requirements when: “(1) the defendant has established minimum contacts with the forum state, and (2) the court’s exercise of jurisdiction does not offend traditional notions of fair play and substantial justice.” Marchand, 83 S.W.3d [389]*389at 795 (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). The non-resident defendant must purposefully avail himself of the privileges and benefits of conducting business in the foreign jurisdiction. Marchand, 83 S.W.3d at 795 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). Random, fortuitous, or attenuated contacts are not sufficient. Id. Defendant’s conduct and connection with the state is required to be such that he could reasonably anticipate being sued in the forum state. Delta Brands, Inc. v. Rautaruukki Steel,

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130 S.W.3d 385, 2004 Tex. App. LEXIS 2134, 2003 WL 23312792, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mabry-v-reid-texapp-2004.