Mastercraft Boat Company, LLC v. Rebecca Chambers
This text of Mastercraft Boat Company, LLC v. Rebecca Chambers (Mastercraft Boat Company, LLC v. Rebecca Chambers) is published on Counsel Stack Legal Research, covering Court of Criminal Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
ACCEPTED 13-16-00074-CV THIRTEENTH COURT OF APPEALS CORPUS CHRISTI, TEXAS 4/26/2016 4:34:31 PM Dorian E. Ramirez CLERK
No. 13-16-00074-CV
IN THE THIRTEENTH COURT OF APPEALS FILED IN 13th COURT OF APPEALS CORPUS CHRISTI/EDINBURG, TEXAS CORPUS CHRISTI, TEXAS 4/26/2016 4:34:31 PM DORIAN E. RAMIREZ ___________________________________________ Clerk
MASTERCRAFT BOAT COMPANY, LLC, Appellant, v. REBECCA CHAMBERS Appellee. ___________________________________________
Appealed from the County Court at Law No. 3 Of Nueces County, Texas
__________________________________________________________________
APPELLEE REBECCA CHAMBER’S RESPONSE BRIEF
----------------------------------------------------------------------------------------------------
Douglas A. Allison Texas Bar No. 01083500 doug@dallisonlaw.com Law Office of Douglas A. Allison 403 N. Tancahua Corpus Christi, Texas 78401 Telephone: 361-888-6002 Facsimile: 361-888-6651 ATTORNEY FOR APPELLEE REBECCA CHAMBERS
APPELLEE REBECCA CHAMBERS REQUESTS ORAL ARGUMENT
i No. 13-16-00074-CV
MasterCraft Boat Company, LLC
Appellant,
v.
Rebecca Chambers,
Appellee.
______________________________________________________________________________
IDENTITY OF PARTIES & COUNSEL _____________________________________________________________________________________
Appellant MasterCraft Boat Company, LLC Marc Evan Kutner, Esq. Texas Bar No. 11770575 MKutner@leggefarrow.com Michael J. Wray, Esq. Texas Bar No. 24052191 MWray@leggefarrow.com Legge, Farrow, Kimmitt, McGrath & Brown, LLP 5151 San Felipe, Suite 400 Houston, Texas 77056 Telephone: 713-917-0888 Facsimile: 713-953-9470
Appellee Rebecca Chambers Douglas A. Allison Texas Bar No. 01083500 doug@dallisonlaw.com Law Office of Douglas A. Allison 403 N. Tancahua Corpus Christi, Texas 78401 Telephone: 361-888-6002 Facsimile: 361-888-6651
ii TABLE OF CONTENTS
IDENTITY OF PARTIES & COUNSEL ............................................................. ii
INDEX OF AUTHORITIES ................................................................................. iv
STATEMENT OF THE CASE .............................................................................. v
STATEMENT ON ORAL ARGUMENT ............................................................ vi
ISSUES PRESENTED FOR REVIEW ............................................................... vii
Issue 1:
Whether MasterCraft Boat Company LLC (Appellant) did purposefully avail
itself of the privilege of conducting activities within the State of Texas to such
an extent so as to established minimum contacts sufficient to support the trial
court’s exercise of general jurisdiction over Appellant. ............................................ vii
Issue 2:
Whether MasterCraft Boat Company LLC’s (Appellant’s) alleged liability in this
case arise out of or relates to Appellant’s purposeful activity in the State of
Texas so as to support the trial court’s exercise of specific jurisdiction over
Appellant. ................................................................................................................................... vii
Issue 3:
Whether the trial court’s exercise of jurisdiction over Appellant comports with
traditional notions of fair play and substantial justice. ............................................. vii
Issue 4: Whether the trial court erred in failing to sustain Appellant’s objections to
certain deposition testimony, and whether such refusal, if any, to grant
Appellant’s objections was harmful error (if any). ........................................................ vii
STATEMENT OF FACTS ..................................................................................... 1
SUMMARY OF ARGUMENT ............................................................................ 16
ARGUMENT ......................................................................................................... 18
1. Plaintiff’s Pleadings Support this Court’s Exercise of Jurisdiction -‐-‐ ................................... 18
2. Legal Authority in Support of a Court’s Exercise of Jurisdiction -‐-‐ ....................................... 19
3. This Court has Specific Jurisdiction over Appellant
-‐-‐ ............................................................. 23
4. This Court has General Jurisdiction over Appellant
-‐-‐ ............................................................. 24
THIS COURT’S EXERCISE OF JURISDICTION DOES NOT OFFEND TRADITIONAL NOTIONS OF FAIR PLAY ................................................... 29
1. The burden upon Appellant
-‐-‐ .......................................................................................................... 30
2. The interest of Texas in Adjudicating this Dispute in Texas -‐-‐ .............................................. 31
3. Plaintiff’s Interest in Obtaining Convenient / Effiective Relef -‐-‐ ........................................... 31
4. Interstate Judicial System’s Interest in Obtaining Efficient Resolution ............................. 32
5. Shared Interests of States to Further Social Policies -‐-‐ ............................................................ 32
CONCLUSION ..................................................................................................... 33
CERTIFICATE OF SERVICE ........................................................................... 34
iii INDEX OF AUTHORITIES Cases
American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002), cert. denied, 537 U.S. 1191 (2003) ......................................... 18, 19, 21, 24
Asahi Metal industiral Company, Ltd. v. Superior Court of California, Solano County, 480 U.S. 102, 113-115 (1987) .......................................................... 29, 30
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) ................ 20, 27, 29, 30
Frank A. Smith Sales, Inc., d/b/a Frank Smith Toyota v. Atlantic Aero, Inc., 31 S.W.3d 742, 746 (Tex. App. - - Corpus Christi 2000, no pet.)...................... 18, 19
Guardian Royal Exch. Assurance, LTD. v. English China Clays, 815 S.W.2d 223 (1991), 815 S.W.2d at 231 ................................................................................... 29
Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, (2 L.Ed.2d 1283 (1958)). ... 21, 27
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1940) ......................... 20
Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985)................. 21
M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 408 n.1 (Tex.App.
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ACCEPTED 13-16-00074-CV THIRTEENTH COURT OF APPEALS CORPUS CHRISTI, TEXAS 4/26/2016 4:34:31 PM Dorian E. Ramirez CLERK
No. 13-16-00074-CV
IN THE THIRTEENTH COURT OF APPEALS FILED IN 13th COURT OF APPEALS CORPUS CHRISTI/EDINBURG, TEXAS CORPUS CHRISTI, TEXAS 4/26/2016 4:34:31 PM DORIAN E. RAMIREZ ___________________________________________ Clerk
MASTERCRAFT BOAT COMPANY, LLC, Appellant, v. REBECCA CHAMBERS Appellee. ___________________________________________
Appealed from the County Court at Law No. 3 Of Nueces County, Texas
__________________________________________________________________
APPELLEE REBECCA CHAMBER’S RESPONSE BRIEF
----------------------------------------------------------------------------------------------------
Douglas A. Allison Texas Bar No. 01083500 doug@dallisonlaw.com Law Office of Douglas A. Allison 403 N. Tancahua Corpus Christi, Texas 78401 Telephone: 361-888-6002 Facsimile: 361-888-6651 ATTORNEY FOR APPELLEE REBECCA CHAMBERS
APPELLEE REBECCA CHAMBERS REQUESTS ORAL ARGUMENT
i No. 13-16-00074-CV
MasterCraft Boat Company, LLC
Appellant,
v.
Rebecca Chambers,
Appellee.
______________________________________________________________________________
IDENTITY OF PARTIES & COUNSEL _____________________________________________________________________________________
Appellant MasterCraft Boat Company, LLC Marc Evan Kutner, Esq. Texas Bar No. 11770575 MKutner@leggefarrow.com Michael J. Wray, Esq. Texas Bar No. 24052191 MWray@leggefarrow.com Legge, Farrow, Kimmitt, McGrath & Brown, LLP 5151 San Felipe, Suite 400 Houston, Texas 77056 Telephone: 713-917-0888 Facsimile: 713-953-9470
Appellee Rebecca Chambers Douglas A. Allison Texas Bar No. 01083500 doug@dallisonlaw.com Law Office of Douglas A. Allison 403 N. Tancahua Corpus Christi, Texas 78401 Telephone: 361-888-6002 Facsimile: 361-888-6651
ii TABLE OF CONTENTS
IDENTITY OF PARTIES & COUNSEL ............................................................. ii
INDEX OF AUTHORITIES ................................................................................. iv
STATEMENT OF THE CASE .............................................................................. v
STATEMENT ON ORAL ARGUMENT ............................................................ vi
ISSUES PRESENTED FOR REVIEW ............................................................... vii
Issue 1:
Whether MasterCraft Boat Company LLC (Appellant) did purposefully avail
itself of the privilege of conducting activities within the State of Texas to such
an extent so as to established minimum contacts sufficient to support the trial
court’s exercise of general jurisdiction over Appellant. ............................................ vii
Issue 2:
Whether MasterCraft Boat Company LLC’s (Appellant’s) alleged liability in this
case arise out of or relates to Appellant’s purposeful activity in the State of
Texas so as to support the trial court’s exercise of specific jurisdiction over
Appellant. ................................................................................................................................... vii
Issue 3:
Whether the trial court’s exercise of jurisdiction over Appellant comports with
traditional notions of fair play and substantial justice. ............................................. vii
Issue 4: Whether the trial court erred in failing to sustain Appellant’s objections to
certain deposition testimony, and whether such refusal, if any, to grant
Appellant’s objections was harmful error (if any). ........................................................ vii
STATEMENT OF FACTS ..................................................................................... 1
SUMMARY OF ARGUMENT ............................................................................ 16
ARGUMENT ......................................................................................................... 18
1. Plaintiff’s Pleadings Support this Court’s Exercise of Jurisdiction -‐-‐ ................................... 18
2. Legal Authority in Support of a Court’s Exercise of Jurisdiction -‐-‐ ....................................... 19
3. This Court has Specific Jurisdiction over Appellant
-‐-‐ ............................................................. 23
4. This Court has General Jurisdiction over Appellant
-‐-‐ ............................................................. 24
THIS COURT’S EXERCISE OF JURISDICTION DOES NOT OFFEND TRADITIONAL NOTIONS OF FAIR PLAY ................................................... 29
1. The burden upon Appellant
-‐-‐ .......................................................................................................... 30
2. The interest of Texas in Adjudicating this Dispute in Texas -‐-‐ .............................................. 31
3. Plaintiff’s Interest in Obtaining Convenient / Effiective Relef -‐-‐ ........................................... 31
4. Interstate Judicial System’s Interest in Obtaining Efficient Resolution ............................. 32
5. Shared Interests of States to Further Social Policies -‐-‐ ............................................................ 32
CONCLUSION ..................................................................................................... 33
CERTIFICATE OF SERVICE ........................................................................... 34
iii INDEX OF AUTHORITIES Cases
American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002), cert. denied, 537 U.S. 1191 (2003) ......................................... 18, 19, 21, 24
Asahi Metal industiral Company, Ltd. v. Superior Court of California, Solano County, 480 U.S. 102, 113-115 (1987) .......................................................... 29, 30
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) ................ 20, 27, 29, 30
Frank A. Smith Sales, Inc., d/b/a Frank Smith Toyota v. Atlantic Aero, Inc., 31 S.W.3d 742, 746 (Tex. App. - - Corpus Christi 2000, no pet.)...................... 18, 19
Guardian Royal Exch. Assurance, LTD. v. English China Clays, 815 S.W.2d 223 (1991), 815 S.W.2d at 231 ................................................................................... 29
Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, (2 L.Ed.2d 1283 (1958)). ... 21, 27
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1940) ......................... 20
Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985)................. 21
M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 408 n.1 (Tex.App. - - Corpus Christi 1999, no pet) ............................................................................................ 18
McKanna v. Edgar, 388 S.W.2d 927, 930 (Tex. 1965) .......................................... 18
Mi Gwang Contact Lens Co. v. Chapa, No. 13-13-00306-CV, 2015 WL 3637846 (Tex.App.—Corpus Christi June 11, 2015) .......................................................... vi
Oswalt v. Scripto, Inc., 616 F.2d 191 (5th Cir. 1980)............................................. 22
Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009) .................................................................................................................... 22
Schlobohm v. Shapiro, 784 S.W.2d 355, 357 (Tex. 1990). .............................. 20, 27
World-Wide Volkswagen v. Woodson, 444 U.S. 286 (1980) .................................. 30
iv STATEMENT OF THE CASE
Appellee sued Appellant for strict product liability arising from the design,
manufacture, and marketing of a boat. Appellee was a passenger on the boat, she
fell overboard, and the unguarded propeller traumatically amputated her leg. (CR
1:10) Appellant filed a special appearance to contest the Court’s jurisdiction. (CR
1:43-45.) The Court denied Appellant’s special appearance by Order dated
January 28, 2016. (R 1:108.) This accelerated interlocutory appeal ensued.
v STATEMENT ON ORAL ARGUMENT
There is not a need for oral argument because the issues presented have been authoritatively decided. See Tex. R. App. P. 39.1 (b). The Thirteenth Court of Appeals has issued an opinion in Mi Gwang Contact Lens Co. v. Chapa, No. 13- 13-00306-CV, 2015 WL 3637846 (Tex.App.—Corpus Christi June 11, 2015), that is on point.
vi ISSUES PRESENTED FOR REVIEW
Issue 1: Whether MasterCraft Boat Company LLC (Appellant) did purposefully avail itself of the privilege of conducting activities within the State of Texas to such an extent so as to established minimum contacts sufficient to support the trial court’s exercise of general jurisdiction over Appellant.
Issue 2: Whether MasterCraft Boat Company LLC’s (Appellant’s) alleged liability in this case arise out of or relates to Appellant’s purposeful activity in the State of Texas so as to support the trial court’s exercise of specific jurisdiction over Appellant.
Issue 3: Whether the trial court’s exercise of jurisdiction over Appellant comports with traditional notions of fair play and substantial justice.
Issue 4: Whether the trial court erred in failing to sustain Appellant’s objections to certain deposition testimony, and whether such refusal, if any, to grant Appellant’s objections was harmful error (if any).
vii STATEMENT OF FACTS
On August 24, 2014, Rebecca Chambers was one of eight (8) passengers,
who were on-board the Appellant MasterCraft Boat Company LLC’s (“Appellant”)
boat owned by John “Dos” Dietz (“Defendant Dietz”). Defendant Dietz was
captaining / operating the Appellant boat in Nueces County, Texas. Rebecca
Chambers was sitting on the bow of the Appellant’s boat while it was underway,
and she did suddenly and unexpectedly (from her perspective) get sucked under
and run over by the Appellant’s boat. Rebecca Chambers was then drawn into the
boat’s unguarded propeller --- and she suffered severe lacerations of her lower leg.
Rebecca Chambers floated to the water’s surface and found herself in a large pool
of her own blood. Others screamed for “Dos” Dietz to turn the boat around to
render aid, and “Dos” Dietz complied. Rebecca Chambers was floundering in her
effort to save herself, and she was then aided by others as the boat came back for
her. During the rescue effort, it was determined that Ms. Chambers’ lower leg had
been completely severed from her body -- and it could not be found. Rebecca was
rushed to the hospital for appropriate medical care and treatments.
Rebecca Chambers filed this legal action on or about December 8, 2014,
against Defendant Dietz and Appellant. In response to Rebecca Chambers‘ filing
of the action, Defendant Dietz filed a general denial. In response to Rebecca
1 Chambers‘ filing of the action, Appellant filed a special appearance, motion to
transfer venue, motion to dismiss on grounds of forum non conveniens, special
exceptions, general denial, pleadings setting forth affirmative defenses, and other
related / amended / supplemental pleadings.
Rebecca Chambers’ current pleading on file is Plaintiff’s First Amended
Original Petition (and such pleading was the live pleading at the point in time
when the trial court considered Appellant’s special appearance). By this pleading,
Rebecca Chambers has made allegations supporting this Court’s general
jurisdiction and specific jurisdiction over the parties in this lawsuit (including
Appellant) and the subject matter of this lawsuit. With regard to Appellant,
Rebecca Chambers has pleaded that Appellant is subject to Texas’ courts’
jurisdiction in this case because:
1. Appellant’s boat involved in this lawsuit is in the State of Texas because
of Appellant’s purposeful, multi-million dollar internet promotional
campaign directed at the State of Texas (which campaign directly caused
Defendant Dietz to purchase the boat made the subject of this lawsuit);
and
2. Appellant’s many and other continuous and systematic contacts with the
State of Texas; to wit: systematically and continuously sending
2 employees and managers to the State of Texas; systematically and
continuously training service personnel to provide warranty work in the
State of Texas (and providing such warranty work in the State of Texas);
systematically and continuously providing recall services within the State
of Texas; systematically and continuously training sales personnel to sell
its boats in Texas; systematically and continuously sending its employees
to participate in promotional events in the State of Texas; systematically
and continuously signing contracts in Texas and/or with Texas
individuals and/or with Texas companies; systematically and
continuously signing contracts for services performable in Texas;
systematically and continuously advertising in Texas; systematically and
continuously conducting customer satisfaction surveys in Texas;
systematically and continuously resolving disputes in Texas (whether by
Alternate Dispute Resolution (ADR) or other); systematically and
continuously reimbursing others for sales work / promotions in Texas;
systematically and continuously partnering with others (individuals and
companies) in Texas; and systematically and continuously doing business
in the State of Texas for many years (including its payment of franchise
taxes to the State of Texas to allow Appellant to do its business in the
State of Texas (which has been quite profitable for Appellant)).
3 The facts of the case do clearly demonstrate that Appellant’s relationship
with the State of Texas. Key facts are as follows:
1. Appellant -- and the time of the incident and for many years --
contracted with four (4) companies to serve as Appellant’s Texas
dealerships in the State of Texas;1
2. Appellant’s contracts with its authorized Texas dealers were (for the
pertinent time period) contracts with Texas companies;2
3. Appellant’s contracts with its authorized Texas dealers were (for the
pertinent time period) contracts performable in Texas;3
4. Appellant (‘regularly and frequently,’ and for the pertinent time
period) obligated itself -- and continues to obligate itself -- by way of
its warranty contracts with its Texas customers (Texas residents) to
provide warranty services (repairs) in the State of Texas, to pay for
warranty services in the State of Texas, and to deliver warranty
contracts to its Texas customers in the State of Texas;4
1 Appellant ’s authorized dealers in the State of Texas (for the pertinent time period) were: (1) Texas MasterCraft Ltd.; (2) Dockside Marine LLC; (3) Boat Town, Inc.; and (4) Texas Ski Ranch. See authorized dealership contracts (Filed under seal in the trial court); see also deposition testimony of Tim Oxley, (CR 1:271-275) 2 See Texas Secretary of State documents (CR 1:446-456) 3 See deposition testimony of Tim Oxley, (CR 1:314) 4 See deposition testimony of Tim Oxley, (CR 1:309-315) (“Q. And so the [warranty] work is performable in Texas, if it’s -- if the boat is taken to a Texas dealership? A. Correct . . . Q. . . . the work is going to be performed in Texas? A. Yes. . . . Q. And the payment is going to go to the company in Texas? A. We reimburse the dealer in Texas. . . . Q. So that warranty contract is delivered actually [to the boat owner] in Texas? A. Correct). See also deposition testimony of Tim Oxley, (CR 1:356)
4 5. Appellant (for the pertinent time period) has paid substantial sums to
honor warranty claims made in Texas (2011: $163,000.00; 2012:
$203,000.00; 2013: $191,000.00; 2014: $194,000.00; and 2015:
$165,000.00); 5
6. Appellant (continuously and systematically, and for the pertinent time
period) performs its recall obligations in the State of Texas, and pays
for its recall obligations in the State of Texas; 6
7. Appellant (for the pertinent time period) contracted in the State of
Texas to be listed as an additional insured on Completed Products
coverage’s negotiated and paid for in Texas -- and applicable to
product liability cases filed in the State of Texas (thus, these are
contracts performable in Texas for the benefit of Appellant);7
8. Appellant (though its vendor, and for the pertinent time period in
question) developed a customer service index (“CSI”) by surveying its
Texas customers to determine Texas customers’ satisfaction with its
(Appellant’s) product;8
9. Appellant’s contracts (for the pertinent time period in question)
obligate Appellant to come into Texas and pay claims for its
5 See deposition testimony of Tim Oxley, (CR 1:355) 6 See deposition testimony of Tim Oxley, (CR 1:316-317) 7 See deposition testimony of Tim Oxley, (CR 1:325-330) 8 See deposition testimony of Tim Oxley, (CR 1:318-322)
5 authorized Texas dealerships (“indemnity”) in the event that a product
defect exists with the MasterCraft product (this contract term is
performable in Texas);9
10. Appellant has negotiated and resolved disputes (including Alternative
Dispute Resolution) in the State of Texas;10
11. Appellant has agreed to the application of Texas law to interpretation
of provisions of their contracts with Appellant’s authorized Texas
dealerships;11
12. Appellant ’s contracts with its authorized Texas dealers (for the
pertinent time period) gave Appellant sole discretion to define the
geographic area of operations for each Texas dealership;12
13. Appellant’s contracts with its authorized Texas dealers (for the
pertinent time period) gave Appellant one hundred percent (100%)
control over incentive programs offered by its Texas dealerships;13
14. Appellant’s contracts with its authorized Texas dealers (for the
pertinent time period) gave Appellant the power to set sales quotas for
Appellant boat sales in Texas;14
9 See deposition testimony of Tim Oxley, (CR 1:331) 10 See deposition testimony of Tim Oxley, (CR 1:336-337) 11 See deposition testimony of Tim Oxley, (CR 1:339) 12 See deposition testimony of Tim Oxley, (CR 1:277-278) 13 See deposition testimony of Tim Oxley, (CR 1:279) 14 See deposition testimony of Tim Oxley, (CR 1:281-282)
6 15. Appellant’s employee -- its regional sales and marketing manager --
made (for the pertinent time period) ten (10) to twelve (12) trips per
year to the State of Texas for the purpose of meeting with and
supporting Appellant’s authorized Texas dealerships;15
16. Appellant’s “local [Texas] rep” (a term used by Tim Oxley to describe
Appellant’s regional sales and marketing manager) travels to the State
of Texas regularly and systematically to:
(a) increase Appellant’s market share;
(b) counsel with each “local [Texas] dealer”;
(c) provide each authorized Texas dealership with product training
(training to help Texas sales representatives distinguish and
promote Appellant’s boats, and related training about how to close
a deal);
(d) encourage local (Texas) marketing events (such events typically
including Appellant’s direct, in-person participation, and such
events wholly controlled by Appellant); and
(e) provide stocking and merchandizing recommendations for each
authorized Texas dealership. 16
15 See deposition testimony of Tim Oxley, (CR 1:291, 1:357) 16 See deposition testimony of Tim Oxley, (CR 1:288-291, 1:294-299)
7 17. Appellant routinely and systematically reimburses its “local [Texas]
rep” (its regional sales and marketing manager), and others, for hotel
stays in Texas, meals purchased in Texas for its employees, meals
purchased in Texas for its customers / authorized Texas dealerships,
rent-a-cars, cellular service bills, and internet service bills;17
18. In addition to Appellant’s regional sales and marketing manager’s
trips to the State of Texas (10-12 / year), Appellant’s vice-president
for global sales and marketing travels four (4) to six (6) times per year
to the State of Texas; and Appellant’s president and CEO travels one
(1) to (2) times per year to the State of Texas -- and all to promote
sales and marketing in the State of Texas; 18
19. Appellant controls its authorized Texas dealership’s inventory (the
Appellant’s boats on the sales floor, and in-stock MasterCraft parts
and supplies);19
20. Appellant controls the days and hours of operation (for the pertinent
time period) for its authorized Texas dealerships;20
17 See deposition testimony of Tim Oxley, (CR 1:290-291) 18 See deposition testimony of Tim Oxley, (CR 1:357-358) 19 See deposition testimony of Tim Oxley, (CR 1: 302-303) 20 See deposition testimony of Tim Oxley, (CR 1:304)
8 21. Appellant provided and/or approved (for the pertinent time period) all
of the promotional and/or advertising materials to use by its
authorized Texas dealerships -- to be displayed in the State of Texas;21
22. Appellant (for the pertinent time period) markets directly into Texas
through the internet; 22
23. Appellant (for the pertinent time period) markets directly into Texas
through billboards, radio, and television through its authorized Texas
dealerships; 23
24. Appellant advertises (for the pertinent time period) in trade magazines
that are regionally targeted to the Texas markets; 24
25. Appellant paid $1,037,500.00 to “Live Nation Motor Sports, Inc.” --
a Texas corporation -- as a promotional / advertising fee for events in
Texas25 (2008, 2009, and 2010); and agreed in its contract with Live
Nation Motor Sports, Inc., that the agreement would “be governed by
and construed according to the laws of the State of Texas”; 26
21 See deposition testimony of Tim Oxley, (CR 1: 305-306) 22 See deposition testimony of Tim Oxley, (CR 1: 339) 23 See deposition testimony of Tim Oxley, (CR 1:340) 24 See deposition testimony of Tim Oxley, (CR 1: 360-361) 25 The sponsored events occurred in Texas, and other states. Appellant -- by their promotional fee -- was entitled to display its logo on banners, to 15 second public addresses, to two (2) scoreboard mentions, to two (2) jumbotron mentions, to participation in the pit party, to distribute hand-outs, to spots on CBS’s broadcasts, to a full page color advertisement in the event program, to 10 VIP, passes, to 20 complimentary tickets, and more. 26 See deposition testimony of Tim Oxley, (CR 1:364-367) see also Oxley, (CR 1: 368)(agreeing to the “benefits and protections” of Texas law).
9 26. Appellant (for the pertinent time period) markets directly, and in-
person (through its employees and contract employees), in the State of
Texas at sponsored boat shows, clinics, and demonstration days and
events;27
27. Appellant pays half (50%) of the cost of promoting boat shows and
events in the State of Texas (as a “co-op” with its authorized Texas
dealership);28
28. Appellant pays millions of dollars each year (for the pertinent time
period) towards advertising (2011: $4.4 million dollars; 2012: $4.4
million dollars; 2013: $3.4 million dollars; 2014: $4.2 million
dollars) -- from which large sums are directed at marketing in the
State of Texas (since Texas is Appellant ’s largest market); 29
29. Appellant is advertising in the State of Texas every day for the past
five (5) years; 30
30. Appellant sells many boats each year into the State of Texas -- to its
authorized Texas dealerships who are Texas companies (2011: 192
MasterCraft boats sold to Texans; 2012: 151 MasterCraft boats sold
to Texans; 2013: 182 MasterCraft boats sold to Texans; 2014: 136
27 See deposition testimony of Tim Oxley, (CR 1:340-342, 1:351) 28 See deposition testimony of Tim Oxley, (CR 1:342-344) 29 See deposition testimony of Tim Oxley, (CR 1: 352) see also deposition of Jay Povlin, (CR 1:218-220) 30 See deposition testimony of Tim Oxley, (CR 1: 353-354)
10 MasterCraft boats sold to Texans; and 2015: 183 MasterCraft boats
sold to Texans); 31 and
31. Appellant regards its cooperative efforts with its authorized Texas
dealerships as a “partnership” (Mr. Oxley volunteered that Appellant
does “characterize that [Texas dealership relationship] as a
partnership”);32
The facts speak for themselves. The Appellant’s documents and sworn testimony
of their employees make clear that Appellant has a significant relationship with
the State of Texas.
With these factual discoveries now made of record, some candid testimony makes
clear Mr. Oxley’s view of his company’s (Appellant’s) relationship to the State of
Texas. Mr. Oxley is a corporate official employed by Appellant, and he did testify,
as follows:
Q. MasterCraft knows they have a lot of MasterCraft boats in
Texas, and they’re very purposeful in making sure that they’re taking
care of those customers and honoring those warranty claims?
A. Yes, I agree to that.33
*****
31 See deposition testimony of Tim Oxley, (CR 1:359) 32 See deposition testimony of Tim Oxley, (CR 1: 345-346, 1:349-350) 33 See deposition testimony of Tim Oxley, (CR 1: 357)
11 Q. By MasterCraft’s advertising, I think you would agree that
MasterCraft’s contacts with the State of Texas are continuous?
A. Yes. 34
****
Q. And systematic?
A. Yes, using your definition of advertising where we display
brochures.
Q. And considering warranty practices of MasterCraft, those
contacts with the State of Texas are also continuous? I don’t mean
every day, but they’re very frequent, and ongoing?
A. I agree.
Q. And, again, they’re systematic? The warranty contracts?
A. Yes.35
* ****
Q. Is it fair to say that MasterCraft, certainly, has been -- as long as
you’ve been with the company -- doing business in Texas.
A. Yes.
Q. On a longstanding basis?
34 See deposition testimony of Tim Oxley, (CR 1:370) 35 See deposition testimony of Tim Oxley, (CR 1:371-372)
12 Q. As a part of this longstanding business of MasterCraft in Texas,
it’s included marketing, correct?
Q. Shipping their products to Texas, correct?
Q. Performing services, including warranty services, in Texas?
Q. And maintained authorized dealerships in Texas.
Q. I mean, MasterCraft definitely and very purposefully wants the
benefits of doing business in Texas by selling their bots there, right?
Q. MasterCraft definitely, intentionally, and purposefully wants to
take advantage of the Texas economy and whatever monies there are
available for luxury items, such as the ski, surf, and wakeboard boats?
A. Yes.36
36 See deposition testimony of Tim Oxley, (CR 1:347-376)
13 Q. And is it true that MasterCraft -- we’ve already talked about
how they have a very specific market territory for each of their
authorized dealers in Texas, right?
Q. And I think that those are placed strategically so they’re not
overlapping with each other; fair to say?
A. Yes.37
** ***
Q. Those are very strategic decisions that MasterCraft has made in
terms of how they want and where they want their products presented
in Texas?
A. Yes.38
Q. So these contacts that we’ve talked about where MasterCraft is
doing the advertising and the warranty claims and the different things
that MasterCraft does throughout Texas, those are pervasive contact
throughout the parts of the state that are your market?
A. Yes. 39
* **** 37 See deposition testimony of Tim Oxley, (CR 1:376-377) 38 See deposition testimony of Tim Oxley, (CR 1: 377-378) 39 See deposition testimony of Tim Oxley, (CR 1:378)
14 Q. Do you think that when you look at the things that MasterCraft
is doing directly in Texas, sometimes its own materials, sometimes
through its dealerships, do you think that Mastercraft’s contacts with
the state of Texas are substantial?
Q. And purposeful for the purpose of helping sell MasterCraft
products in Texas?
A. Yes. . . . .
Q. I mean, MasterCraft definitely has a very specific intent to
serve the Texas markets and sell their ski, wakeboard, and surf boats
in Texas.
A. Yes. 40
Again, this evidence speaks for itself. This evidence is not contradicted by any of
the documentary evidence, but rather supported by the documentary evidence.
Additional evidence was presented to the trial court. Specifically, the
evidence proves that Appellant even pays franchise taxes to the State of Texas. In
2015, Appellant paid $28,843.60 in franchise taxes to the State of Texas for the
privilege of its conducting business in the State of Texas.41 Apparently, Appellant
has been following this appropriate practice for a number of years (i.e., paying
40 See deposition testimony of Tim Oxley, (CR 1:378-379) 41 See Texas Franchise Tax Payment Forms produced by Appellant , (CR 1:440-445)
15 taxes to the State of Texas for the purpose of allowing Appellant to do business in
the State of Texas).
Finally, the record also contains evidence of Defendant “Dos” Dietz’s specific
reliance upon Appellant’s (MasterCraft’s) Texas contacts for the purchase of the
MasterCraft boat made the subject of the litigation. An affidavit42 signed by
Defendant Dietz was a part of the evidence considered by the trial court, and such
affidavit makes clear that Defendant Dietz purchased the boat made the subject of
this lawsuit as a direct result of Defendant Dietz’s review and consideration of
Appellant ’s promotional materials -- provided to Defendant Dietz via internet
and/or boat show promotions. Defendant Dietz’s affidavit makes clear that his
decision to purchase the MasterCraft boat made the subject of the litigation was
“substantially driven by information that [he] obtained from the MasterCraft Boat
Company’s promotional website (while [he] was in Texas).
SUMMARY OF ARGUMENT
In this case, this trial court properly exercised its powers of both specific
jurisdiction -- and general jurisdiction -- over Appellant . The Appellant has been
doing business in Texas for many, many years. Appellant concedes the very
threshold question of ‘doing business in Texas’ by its payment of franchise taxes to
the State of Texas, and it cannot now be heard to complain of coming to Texas. 42 (CR 1:479-480)
16 Appellant sells its boats directly to Texas customers (including its authorized
Texas dealerships) by the hundreds each year, advertises in Texas, honors warranty
claims in Texas, honors recall claims in Texas, contracts in Texas, agrees to the
application of Texas law when it is to Appellant ’s benefit, trains sales persons to
sell its boats in Texas, trains repair persons to make repairs in Texas, and -- for
lack of a better phrase -- does everything it can in Texas to make money from
Texans.
Moreover, the Appellant’s contacts with the State of Texas directly led to
Defendant Dietz’s decision to purchase a MasterCraft boat for use in Texas. The
affidavit of Defendant Dietz makes clear that his decision to purchase the
MasterCraft boat was “substantially driven by information that [he] obtained from
the MasterCraft Boat Company’s promotional website (while [he] was in Texas).
the affidavit of Defendant Dietz states that “the actual reason that I purchased my
MasterCraft boat was because of my internet browsing on the MasterCraft Boat
Company’s promotional website that was accomplished while I wa in the State of
Texas -- I just happened to thereafter locate my boat in the State of Florida.” The
trial court’s exercise of specific jurisdiction is also supported.
Appellant’s contacts with Texas also give rise to the trial court’s exercise of
general and specific jurisdiction over this Appellant. Plaintiff has properly made
those allegations that triggered the trial court’s exercise of jurisdiction over
17 Appellant. As such, Texas law shifts the burden of proof to Appellant to negate all
potential bases for a Texas’ court’s exercise of its jurisdiction. Appellant
completely failed to carry its burden to negate all potential bases for the trial
court’s exercise of jurisdiction, and thus the trial court made the proper ruling. The
trial court’s ruling should now be upheld on appeal.
ARGUMENT
1. Plaintiff’s Pleadings Support this Court’s Exercise of Jurisdiction -- Texas jurisprudence is quite clear that “[t]he plaintiff bears the initial burden
of pleading allegations sufficient to bring a nonresident defendant within the
provisions of the long-arm statute.”43 No Texas Supreme Court ruling has directly
decided the question of whether an appellate court should only consider the
plaintiff’s petition or also fully consider “extended . . . allegations in the petition”
(such as the plaintiff’s response to special appearance and/or supplements to
pleadings). However, the Texas Court of Appeals (Thirteenth District of Texas),
as a matter of actual practice, has historically considered all pleadings on file prior
to the hearing on special appearance (including the plaintiff’s pleadings responsive
to the defendant’s special appearance). “The meaning of the term “pleadings”
must be limited at least so as to exclude matters not filed prior to the special 43 American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002), cert. denied, 537 U.S. 1191 (2003); see also Frank A. Smith Sales, Inc., d/b/a Frank Smith Toyota v. Atlantic Aero, Inc., 31 S.W.3d 742, 746 (Tex. App. - - Corpus Christi 2000, no pet.); McKanna v. Edgar, 388 S.W.2d 927, 930 (Tex. 1965); M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 408 n.1 (Tex.App. - - Corpus Christi 1999, no pet).
18 appearance hearing.”44 A plaintiff’s pleading must set forth allegations sufficient
to support a trial court’s exercise of jurisdiction, and an appellate court properly
considers all of the plaintiff’s pleadings filed prior to the hearing on the
defendant’s motion.45 In this lawsuit, Appellant does not seem to complain about
the sufficiency of Plaintiff’s pleadings. To the extent that any such complaint may
be alleged by Appellant , Plaintiff respectfully suggests that Plaintiff’s pleadings
are more than adequate to support this Court’s exercise of jurisdiction over
Appellant .
2. Legal Authority in Support of a Court’s Exercise of Jurisdiction -- Of course, there is a wealth of judicial precedent to aid this Court in
consideration of the present issues. In American Type Culture Collection, Inc. v.
Marshall Coleman,46 the Texas Supreme Court provides a keen summary of some
of the threshold issues. The Texas Supreme Court is certainly capable of speaking
for itself, and the Court’s opinion provides guidance.
“Texas courts may assert personal jurisdiction over a nonresident defendant only if the Texas long-arm statute authorizes jurisdiction and the exercise of jurisdiction is consistent with federal and state due process standards.” Guardian Royal Exchange Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991). The Texas 44 Smith Toyota, at p. 746. The Thirteenth Court of Appeals (Texas) considered all pleadings filed prior to the time of the hearing on special appearance. 45 The courts favor contemplation of all of the plaintiff’s pleadings (so long as the pleadings are filed prior to the hearing on the defendant’s special appearance). See Smith Toyota, at p. 746. 46 83 S.W.3d 801 (Tex. 2002), cert. denied, 537 U.S. 1191 (2003).
19 long-arm statute reaches “as far as the federal constitutional requirements of due process will allow.” Id. Thus, the Texas long-arm statute requirements are satisfied if exercising jurisdiction comports with federal due process limitations. Id.
“Under the Due Process Clause of the Fourteenth Amendment, jurisdiction is proper if a nonresident defendant established “minimum contacts” with Texas and maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1940). The purpose of the minimum-contacts analysis is to protect the defendant from being haled into court when its relationship with Texas is too attenuated to support jurisdiction. Schlobohm v. Shapiro, 784 S.W.2d 355, 357 (Tex. 1990). Accordingly, we focus upon the defendant’s activities and expectations in deciding whether it is proper to call it before a Texas court. Id.”
“The minimum-contacts analysis requires that a defendant “purposefully avail” itself of the privilege of conducting activities within Texas, thus invoking the benefits and protections of our laws. Burger King Corp. v.Rudzewicz, 471 U.S. 462, 475 (1985). 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. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). . . . It is the quality and nature of the defendant’s contacts, rather than their number, that is important to the minimum-contacts analysis. Id. at 230 n. 11.”
“A defendant’s contacts with a forum can give rise to either specific or general jurisdiction. For a court to exercise specific jurisdiction over a nonresident defendant, two requirements must be met: (1) the defendant’s contacts with the forum must be purposeful, and (2) the cause of action must arise from or relate to those contacts. Id. at 227. General jurisdiction . . ., on the other hand, allows a forum to exercise jurisdiction over a defendant even if the cause of action did not arise from or relate to a defendant’s contacts with the forum. Id. at 228.
20 General jurisdiction is present when a defendant’s contacts with a forum are “continuous and systematic,” a more demanding minimum-contacts analysis than specific jurisdiction. Id. Coleman, at pp. 803-805.
There is no reason for the undersigned to speak on those thresholds and standards
where Texas’ high court has already spoken so clearly. If a defendant purposely
avails itself of benefits of a forum, it only makes sense that such defendant should
be amenable to the process of that forum. The minimum contacts analysis is less
strict when facts support a trial court’s exercise of specific jurisdiction (as
compared to a ‘general jurisdiction’ analysis). In the present case, an application
of the facts (evidence) to the law demonstrates that this Court has both specific and
general jurisdiction over Appellant .
Additional case law provides further guidance:
“When a corporation “purposefully avails itself of the privilege of conducting activities within the forum State,” Hanson v. Denckla, 357 U.S. [235] at 254, 78 S.Ct. [1228] at 1240 [2 L.Ed.2d 1283 (1958)], it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has been the source of injury to its owner or to others.” Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985).
21 “. . . a defendant has “purposefully availed itself of the privilege of conducting activities” in the forum state if the non- resident defendant sells its product to an independent distributor and “there is a reasonable expectation that the product will enter the forum state.” Oswalt v. Scripto, Inc., 616 F.2d 191 (5th Cir. 1980).
The Texas Supreme Court and United States Fifth Circuit opinions fall in line with
each other (and further fall in line with the United States Supreme Court opinions
relating to a court’s exercise of jurisdiction). The thresholds / parameters for this
Court’s exercise of jurisdiction are quite clear.
With definitive law and powerful evidence, fewer words may be exchanged in
argument. On the other hand, the undersigned is professionally obligated to make
argument on behalf of his client. As stated in Appellant ’s brief:
“The plaintiff has the initial burden to “plead sufficient allegations to confer jurisdiction.” Id. (citing American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex.2002)). Once that burden is met, the defendant seeking to avoid the court’s jurisdiction takes on the burden to negate “all potential bases for jurisdiction pled by the plaintiff.” Id.47
Plaintiff has properly pleaded facts in support of this Court’s exercise of
jurisdiction over Appellant . As such, it is now Appellant ’s burden to negate all
possible bases for this Court’s exercise of jurisdiction. Appellant -- for the
reasons set forth herein -- cannot negate all possible bases for this Court’s exercise
47 Appellant ’s pleading is referencing Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009)(citing BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002).
22 of jurisdiction. To the contrary, all of the law and all of the facts bode in favor of
this Court’s exercise of jurisdiction over Appellant .
3. This Court has Specific Jurisdiction over Appellant -- In Coleman, the high Court has made clear that for a court to exercise specific
jurisdiction over a non-resident defendant (such as Appellant ), the claimant must
present evidence that:
“(1) the defendant’s contacts with the forum must be purposeful, and (2) the cause of action must arise from or relate to those contacts.”
In this case, Appellant has a huge number of high quality purposeful contacts with
the State of Texas. Mr. Oxley, Chief Financial Officer, Secretary, and Treasurer
for Appellant since 2012, has testified that these contacts are “purposeful” (and
have been purposeful during his eight (8) year tenure with the company). Such
contacts with the State of Texas include, but are not limited to, boat shows in the
State of Texas and internet promotions in contemplation of Appellant ’s clear
desire to sell boats to Texans (one of its largest markets in the United States).48
Defendant Dietz, on information and belief, purchased his MasterCraft boat
because of Appellant ’s purposeful contacts (internet and/or boat show
promotions) with the State of Texas (and its customers such as Defendant Dietz).
Appellant ’s annual multi-million dollar advertising investment worked.
Appellant ’s efforts caused its product (its boat) to be purchased, and brought to the
48 See deposition of Jay Povlin, (CR 1:218-220)
23 State of Texas -- but for which this incident made the subject of this lawsuit would
not have occurred. Clearly, the cause of action filed on behalf of Plaintiff ‘relates
to Appellant ’s contacts’ with the State of Texas.
Judicial authority supports this Court’s exercise of specific jurisdiction over
Appellant . The Appellant has many purposeful contacts with the State of Texas
(as noted herein). These contacts with the State of Texas were (and continue to be)
purposeful. Some of these contacts include boat shows and internet promotional
materials -- and these specific efforts by Appellant caused the purchase of the boat
made the subject of this lawsuit (on information and belief). Appellant ’s
purposeful contacts with the State of Texas “relate” to Plaintiff’s cause of action.
Appellant has certainly not carried its burden to negate this Court’s exercise of
jurisdiction. Thus, this Court is must properly exercise its power and authority
over the parties made the subject of this lawsuit (including Appellant ).
4. This Court has General Jurisdiction over Appellant -- In this case, this Court should also exercise its powers of general jurisdiction
over Appellant . General jurisdiction is present when a defendant’s contacts with a
forum are “continuous and systematic.”49 In this case, Appellant ’s contacts with
the State of Texas are continuous and systematic. By way of example, but without
49 See Coleman, at pp. 803-805.
24 limitation, Appellant very deliberately works and invests for its company’s sales
and success in Texas markets. Appellant :
1. purposefully contracts with Texas companies to be Appellant ’s authorized
dealerships in Texas;
2. purposefully enters into these authorized dealership contracts with Texas
companies, performable in Texas, which are expressly (by agreement with
Appellant ) governed by Texas law;
3. purposefully enters into other promotional contracts with Texas promotional
companies that are performable in Texas;
4. purposefully contracts with its Texas customers (Texas MasterCraft boat
owners) to provide warranty services (all these contracts performable in
Texas);
5. purposefully agrees to perform recall services with its Texas customers (Texas
MasterCraft boat owners) -- such recall services performable in Texas;
6. purposefully pays money to the State of Texas (its franchise tax payments) for
the privilege of doing its business in the State of Texas;
7. purposefully spends millions of dollars to advertise and promote, including a
focus on Texas with some of its selection of trade magazines, boat shows,
Texas events, and more (especially in light of the fact that Texas is Appellant
’s largest market (or one of them)) to sell boats to Texans;
25 8. contracts with Texas companies (its authorized dealerships) to be listed as a
named insured on insurance contracts performable in Texas (for claims filed
in Texas);
9. pays for customer satisfaction surveys of its Texas customers;
10. indemnifies its authorized Texas dealerships in Texas;
11. negotiates and resolves claims / disputes, in Texas, with its authorized Texas
dealerships;
12. strategically allocates its Texas markets to specific Texas companies for the
sale of MasterCraft boats in Texas;
13. controls 100% of all advertising content displayed for Appellant in Texas;
14. sends its regional sales and marketing manager to Texas approximately ten
(10) to twelve (12) times per year to promote sales in Texas;
15. trains sales persons to sale its boats in Texas;
16. trains repair persons to make repairs of its boats in Texas;
17. systematically reimburses its employees for sales related activities in Texas
(hotel costs, rent-a-car costs, dining costs, etc.);
18. controls its authorized Texas dealerships’ inventory on the floor, advertising,
days and hours of operation, and more;
26 19. markets in Texas by way of internet, boat shows, events, billboards, radio, and
published advertising materials (some of which is directly delivered, and some
of which flows through the authorized Texas dealerships);
20. and more (see details of evidence listed above).
“The purpose of the minimum-contacts analysis is to protect the defendant from
being haled into court when its relationship with Texas is too attenuated to support
jurisdiction.” Schlobohm v. Shapiro, 784 S.W.2d 355, 357 (Tex. 1990). Appellant
’s relationship with the State of Texas cannot be said to be “too attenuated to
support jurisdiction.” “The minimum-contacts analysis requires that a defendant
“purposefully avail” itself of the privilege of conducting activities within Texas,
thus invoking the benefits and protections of our laws.” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475 (1985). The Appellant has “purposefully avail[ed]”
itself of the privilege of conducting business in Texas -- and has, by its many
contracts with Texas companies, invoked the benefits and protections of Texas
laws. “When a corporation “purposefully avails itself of the privilege of
conducting activities within the forum State,” Hanson v. Denckla, 357 U.S. [235]
at 254, 78 S.Ct. [1228] at 1240 [2 L.Ed.2d 1283 (1958)], it has clear notice that it is
subject to suit . . . .” In this case, Appellant has been doing business in the State of
Texas for years, and is on clear notice that it is subject to the laws of the State of
Texas. , and can act to alleviate
27 “Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has been the source of injury to its owner or to others.” Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985).
“. . . a defendant has “purposefully availed itself of the privilege of conducting activities” in the forum state if the non-resident defendant sells its product to an independent distributor and “there is a reasonableexpectation that the product will enter the forum state.” Oswalt v. Scripto, Inc., 616 F.2d 191 (5th Cir. 1980).
In this case, Appellant ’s sale of boats into Texas is “not simply an isolated
occurrence, but arises from [MasterCraft’s] efforts . . . to serve directly or
indirectly, the market for its product . . . .” As such, Appellant is definitely subject
to the laws of the State of Texas, and this Court’s jurisdiction.
The Appellant has clearly failed in its burden to negate all possible bases for
this Court’s exercise of jurisdiction. As such, this Court has jurisdiction over
In this case, there is substantial evidence to prove that Appellant is pushing
its products in Texas (and here to stay in Texas). As noted herein above,
Appellant contracts with its authorized Texas dealerships in Texas, sells hundreds
of boats per year to these Texas dealerships (which are Texas companies), spends
millions of dollars per year to market their boats (in Texas, and other states),
28 contracts and pays warranty claims in Texas, contracts and pays recall claims in
Texas, sends its employees to Texas on a regular and frequent schedule, pays taxes
to the State of Texas to do business in Texas, contracts to assure applicability of
insurance contracts to claims made in Texas, trains sales persons to sell its
products in Texas, trains repair persons to repair its products in Texas, and more
and more in the State of Texas. Appellant is subject to the laws of the State of
Texas (and has agreed to be subject to such laws by the contracts it signs), and thus
is subject to this Court’s exercise of jurisdiction.
THIS COURT’S EXERCISE OF JURISDICTION DOES NOT OFFEND TRADITIONAL NOTIONS OF FAIR PLAY
Even if a non-resident defendant has established minimum contacts within the
forum state (e.g., Texas), the non-resident defendant should not be hailed into
Texas court if to do so would violate notions of “fair play and substantial
justice.”50 As such, this court may consider various factors when evaluating
whether notions of “fair plan and substantial justice” are offended. The court may
consider: (1) the burden upon the defendant; (2) the interest of the forum state in
adjudicating the dispute; (3) the plaintiff’s interest in obtaining convenient and
effective relief; (4) the interstate judicial system’s interest in obtaining the most
50 Asahi Metal industiral Company, Ltd. v. Superior Court of California, Solano County, 480 U.S. 102, 113-115 (1987); Burger King, 471 U.S. at 476; Guardian Royal, 815 S.W.2d at 231.
29 efficient resolution of controversies; and (5) the shared interests of the several
states in furthering substantial social policies.51
1. The burden upon Appellant -- At the risk of stating the obvious: If Appellant can sells boat to Texans, sell
boats to Texas companies (its authorized Texas dealerships), advertise in Texas,
honor warranty and recall claims in Texas, enter into contracts in Texas that are
performable in Texas, indemnify Texas companies for events in Texas, train sales
persons to sell boats in Texas, train repair persons to repair boats in Texas, send
their employees and managers to sell its products in Texas, and make franchise tax
payments to the State of Texas -- then Appellant should not even be heard to
suggest that litigating in Texas would be a burden. It would be disingenuous for
Appellant to reep the rewards of the business in Texas, and then duck for cover
when a claim gets filed in Texas. There is no more burden upon Appellant to
litigate in Texas than for Appellant to conduct its business in Texas (which it has
done for years). Appellant already has attorneys of its choosing in Houston,
Texas, and it is no burden for such a milti-national, multi-million dollar company
to appear in a Texas court.
51 World-Wide Volkswagen, 444 U.S. at 292; Burger King, 471 U.S. at 477; Asahi, 480 U.S. at 113.
30 2. The interest of Texas in Adjudicating this Dispute in Texas -- The State of Texas has an interest in supporting the legal rights of those
residents of the State of Texas. This has long been the public policy supported by
our legislature, and by our judicial system. Texas residents (such as Rebecca
Chambers and John Dietz) have a right to expect that controversies arising in
Texas will be adjudicated in their home courts (not in a jurisdiction or venue of
another).
3. Plaintiff’s Interest in Obtaining Convenient / Effiective Relef -- Plaintiff now has this claim filed against Appellant and Defendant Dietz. In
its present posture, this multi-party dispute will be resolved in Nueces County,
Texas (the location where the incident occurred). This makes sense. If Appellant
’s special appearance is granted, then Plaintiff’s claims against Defendant Dietz
would be adjudicated in Texas -- but Plaintiff’s claims against Appellant would be
adjudicated in Tennessee.
Plaintiff’s legitimate interests to have the now-pending disputes resolved are
served by keeping this lawsuit in Nueces County, Texas. It is more convenient and
effeicient to the parties (certainly to Plaintiff and Defendant Deitz), and much more
convenient and efficient than trying one case in Texas and another case in
Tennessee. Thus, this factor bodes in favor of keeping this case in Nueces County,
Texas (also).
31 4. Interstate Judicial System’s Interest in Obtaining Efficient Resolution Both Texas and Tennessee courts must support a process that allows for the
efficient resolution of all now-pending claims. The State of Tennessee cannot
exercise its jurisdiction over Defendant Dietz. Both Texas and Tennessee courts
would likely agree that Texas is the most convenient forum that may allow a
comprehensive / efficient adjudication of the disputes made the subject of this
lawsuit. The incident occurred in Texas. Many of the witnesses reside in Texas.
The law enforcement personnel who investigated the incident are in Texas. The
doctors attending to Rebecca Chambers are in Texas. Medical records are in
Texas. Far and away, both Texas and Tennessee courts should agree that this
dispute can most efficiently be resolved in the State of Texas.
5. Shared Interests of States to Further Social Policies -- Both Texas and Tennessee courts have a shared interest in advancing social
policies for their residents. Only Texas courts have this relationship to Plaintiff
and Defendant Dietz. The Texas courts have an interest in deciding disputes that
arise between Texas residents.
All factors strongly support the conclusion that this Court’s exercise of its
jurisdictional powers over Appellant would not ‘offend traditional notions of fair
play and substantial justice.’ The incident made the subject of this lawsuit
occurred in Nueces County, Texas. The claimant in this case is a Texas resident.
32 One of the defendants in this lawsuit is a Texas resident. All parties have -- for
many years -- agreed to subject themselves to the laws of the State of Texas. This
case needs to stay in Texas (for all of the reasons set forth herein above).
CONCLUSION For the reasons set forth herein above, this Court may properly exercise its
powers of specific jurisdiction and general jurisdiction over Appellant . This
Appellant has clearly been engaged in business in the State of Texas (for many
years) -- and any pretense that Texas law somehow allows Appellant to reap the
benefits of doing business in Texas while avoiding any consequences is flawed.
The Appellant is subject to our Texas courts’ rule of law.
WHEREFORE, PREEMISES CONSIDERED, Plaintiff prays that Appellant
’s special appearance be denied, that this court maintian this case on its docket, that
Plaintiff be granted such other and further relief to which Plaintiff may be justly
entited (both at law and in equity), for for such other reief as is just and right.
Respectfully submitted,
Law Office of Douglas A. Allison 403 N. Tancahua Corpus Christi, Texas 78401 Phone: 361/888-6002 Fax: 361/888-6651
33 By: /s/ Douglas A. Allison Douglas A. Allison State Bar No. 01083500
CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing has been forwarded on this 26th day of April, 2016, via Facsimile to the following counsel of record, in accordance to Texas Rule of Appellate Procedure 9.5:
Via Facsimile: (713) 953-9470 Mr. Michael J. Wray LEGGE, FARROW, KIMMITT, MCGRATH & BROWN, L.L.P. 5151 San Felipe, Suite 400 Houston, Texas 77056 ATTORNEY FOR APPELLANT MASTERCRAFT BOAT COMPANY, LLC
Via Facsimile: (210) 340-9888 Mr. Larry J. Goldman GOLDMAN & ASSOCIATES PLLC 10100 Reunion Place, Suite 800 San Antonio, Texas 78216 ATTORNEY FOR DEFENDANT JOHN DIETZ /s/Douglas A. Allison Douglas A. Allison
34 CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i)(2)(B)(3), I certify that
this document contains 7721 words.
/s/Douglas A. Allison Douglas A. Allison
Related
Cite This Page — Counsel Stack
Mastercraft Boat Company, LLC v. Rebecca Chambers, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mastercraft-boat-company-llc-v-rebecca-chambers-texcrimapp-2016.