Morris v. Kohls-York

164 S.W.3d 686, 2005 Tex. App. LEXIS 3404, 2005 WL 1034082
CourtCourt of Appeals of Texas
DecidedMay 5, 2005
Docket03-04-00371-CV
StatusPublished
Cited by43 cases

This text of 164 S.W.3d 686 (Morris v. Kohls-York) 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
Morris v. Kohls-York, 164 S.W.3d 686, 2005 Tex. App. LEXIS 3404, 2005 WL 1034082 (Tex. Ct. App. 2005).

Opinion

OPINION

BOB PEMBERTON, Justice.

This is an appeal from a denial of the special appearances of appellants, Robert and Joyce Morris, contesting personal jurisdiction in Schleicher County. The principal issue on which jurisdiction depends is whether legally and factually sufficient evidence supports the district court’s fact-findings and legal conclusions that the Morrises committed acts in their individual capacities giving rise to jurisdiction, as opposed to their capacities as employees of their limited liability corporation. We also consider the applicability of the “fiduciary shield” doctrine and its implications. We affirm the district court’s order denying the Morrises’ special appearances.

BACKGROUND

Robert Morris, a veterinarian, and Joyce Morris, an embryologist, are residents of Missouri. Together, they perform embryonic collection and transfer veterinary services for individuals and agribusinesses who raise goats and other small grazing animals. The Morrises’ services entail removing embryos (fertilized eggs) from female animals and re-implanting them in other female animals. These services aid breeders in encouraging favorable genetic characteristics among them herds — embryos from female animals with favorable genetic characteristics can be transferred to other female animals with less favorable characteristics for gestation, thus freeing the genetically superior females for more breeding. Assuming the transplanted embryos successfully come to term and survive into adulthood, the genetically favorable traits will grow more prevalent in the herd over time.

In 1998, the Morrises provided their services, in their individual capacities, for twenty different individuals or entities while physically present at eleven Texas locations. On January 22, 1999, the Mor-rises established Morris Genetics, L.L.C., a Missouri limited liability corporation with its principal office in Missouri. Morris Genetics exists for the purpose of providing embryonic collection and transfer services and has only two employees— Robert and Joyce Morris. Robert Morns is licensed to practice veterinary medicine in Texas, but Morris Genetics is not li *690 censed nor could it be because corporations may not practice veterinary medicine. See Tex. Occ.Code Ann. § 801.506 (West 2004).

Since establishing Morris Genetics, the Morrises have continued performing their embryonic transfer and implantation services while each is physically present at Texas locations. In 1999, they performed such services for thirty-two days, at nine locations, for seventeen customers; in 2000, twenty-three days, at ten locations, for sixteen customers; in 2001, thirty-five days, at nine locations, for fifteen customers; and, in 2002, twelve days, at five locations, for seven customers. Neither the Morrises nor Morris Genetics have ever owned any property in Texas, nor have they maintained a bank account or employed Texas residents in any capacity. Neither Morris Genetics nor the Morrises solicit business in Texas, but they do send notices and medical supplies to their customers and accept payment via mail. Individual clients in Texas contact Morris Genetics to perform transfers.

Among the clients of the Morrises or Morris Genetics are appellees Brenda Behring and Kallie Jo Kohls-York. In 1998, Behring requested the Morrises’ services for her business, South Central Texas Boer Goats. The Morrises visited Behring’s farm in Gonzales County and initiated a transplant program with her goats that extended through 2001. Kohls-York hired the Morrises or Morris Genetics in 2001 to perform services at her Schleicher County goat ranch. The litigation in this case arose from visits by the Morrises to perform services at each of Behring and Kohls-York’s ranches in April 2001, and again in late September and October of the same year. The success rate for these implantations fell far below the 70% the Morrises had estimated. The April implantations achieved only a 13% success rate for Behring and 39% for Kohls-York; in September, the results were 33% and 5%, respectively. The Mor-rises have admitted that a possible reason for the low success rate was bacterial contamination of the microscope they used when performing their services. Such contamination may have caused an inflammatory reaction in the goats in which the embryos were implanted, resulting in spontaneous abortions.

Kohls-York and Behring sued the Mor-rises individually and Morris Genetics for damages from negligence, breach of implied warranty, and DTPA violations. See Tex. Bus. & Com.Code Ann. § 17.46 (West 2004). 1 The Morrises disputed that the district court could assert personal jurisdiction over them in their individual capacities. However, they did not dispute that jurisdiction was proper against Morris Genetics, their employer, based on their acts in Texas as employees. The Morrises filed special appearances, which the district court denied. The district court filed findings of fact and conclusions of law. This appeal followed.

DISCUSSION

The Morrises present five issues on appeal. Their central contention is that, although they were physically present in Texas and committed various acts out of which tort claims arose, they cannot properly be haled into a Texas court in their individual capacities because they committed any such acts solely in their representative capacities as Morris Genetics employees. In light of this contention, the *691 Morrises challenge, in their first issue, the legal and factual sufficiency of the district court’s fact findings and its legal conclusions regarding jurisdiction. The Mor-rises next assert three issues concerning the fiduciary shield doctrine, contending that this doctrine bars the assertion of personal jurisdiction against them individually and that the evidence is legally and factually insufficient to establish the alter-ego exception to the doctrine. Finally, in their fifth issue, the Morrises argue that the exercise of personal jurisdiction is not consistent with traditional notions of fair play and substantial justice. See International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

Personal jurisdiction

In their first issue, the Morrises argue that the evidence is legally and factually insufficient to support the district court’s fact findings and that the district court erred in its legal conclusions regarding jurisdiction.

Applicable law

The Texas long-arm statute authorizes Texas courts to exercise personal jurisdiction over a nonresident defendant that “does business” in Texas. See Tex. Civ. Prac. & Rem.Code Ann. §§ 17.041-.045 (West 1997 & Supp.2004-05). Committing a tort in Texas constitutes “doing business.” See id. § 17.042(2) (West 1997). The broad language of the “doing business” requirement in section 17.042 permits the statute to reach as far as the federal constitutional requirements of due process will allow. Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C.,

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Bluebook (online)
164 S.W.3d 686, 2005 Tex. App. LEXIS 3404, 2005 WL 1034082, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morris-v-kohls-york-texapp-2005.