Novamerican Steel, Inc. v. Delta Brands, Inc.

231 S.W.3d 499, 2007 Tex. App. LEXIS 6562, 2007 WL 2325835
CourtCourt of Appeals of Texas
DecidedAugust 10, 2007
Docket05-07-00047-CV
StatusPublished
Cited by8 cases

This text of 231 S.W.3d 499 (Novamerican Steel, Inc. v. Delta Brands, Inc.) 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.

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Novamerican Steel, Inc. v. Delta Brands, Inc., 231 S.W.3d 499, 2007 Tex. App. LEXIS 6562, 2007 WL 2325835 (Tex. Ct. App. 2007).

Opinion

OPINION

Opinion by

Justice LANG.

Appellants Novamerican Steel, Inc. (No-vamerican) and Nova Tube and Steel, Inc. (NTS) appeal the trial court’s order denying their special appearances in a suit brought by appellee Delta Brands, Inc. (DBI). In five issues, appellants contend the trial court erred in concluding specific and general jurisdiction exists over them. 1 Specifically, appellants contend the trial court’s findings of fact and conclusions of law are factually and legally insufficient to confer jurisdiction and the trial court erred as a matter of law in concluding specific and general jurisdiction exists. Assuming without deciding the findings of fact are supported by legally and factually sufficient evidence, we conclude the trial court erred as a matter of law in its conclusion that specific jurisdiction and general jurisdiction exists over appellants. For the reasons set forth below, we reverse the trial court’s order and render judgment dismissing DBI’s claims against these appellants for lack of jurisdiction.

I. FACTUAL AND PROCEDURAL BACKGROUND

NTS is incorporated in Delaware and owned by Novamerican, a Canadian corporation. Appellants do not have offices or employees in Texas. They do not directly advertise or distribute marketing materials in Texas. However, appellants maintain a company website on the Internet. DBI, with facilities and headquarters in Irving, Texas, designs and manufactures metal processing machinery, including heavy gauge rotary shears, to sell to steel companies.

In 2000, NTS contracted to purchase a heavy gauge rotary shear from DBI. DBI designed and manufactured the shear in Texas. The contract provided delivery “FOB Irving, Texas.” Appellants monitored the progress of the shear’s manufac *505 ture and directed their shared employees to make trips to Texas to inspect the equipment. In addition, appellants opened and maintained a bank account in Texas and wired funds into that account for the purpose of paying DBI in accordance with the terms of the contract.

Terry DeClue, an employee of DBI who had an office at DBFs headquarters in Irving, Texas, was responsible for assisting appellants with the purchase and installation of the shear. Over the course of the manufacturing process, DeClue had numerous communications with Novameri-can and NTS employees. Also, according to DBI, DeClue “had access to a full set of DBI drawings, including full drawings for the rotary shear.” DBI alleges De-Clue kept these drawings for the design of the shear and subsequently gave them to appellants. After the shear was manufactured and delivered to NTS, NTS recruited and hired DeClue. According to appellants and DeClue, DeClue acts solely as an independent contractor for NTS.

On September 8, 2006, DBI viewed a marketing video of one of its competitors, Alcos Machinery, Inc. In the video, Alcos depicted a heavy gauge rotary shear and claimed it could build such a shear. According to DBI, DBI is the only designer and manufacturer of such shears “in the world.” DBI alleged Alcos distributed that marketing video across North America. DBI identifies the shear shown in the video as the specific shear it manufactured for NTS in 2001. Also, DBI states the shear depicted in the video bore Alcos labels which DBI claims replaced DBI’s labels. Former NTS employee DeClue also appeared in the video. After viewing this video, DBI filed a lawsuit against Al-cos, NTS, and DeClue in the trial court below alleging that NTS conspired with Alcos and DeClue to unlawfully use DBFs design for the manufacturing of a heavy gauge rotary shear. 2 In addition, DBI joined claims in that suit against Alcos, Novamerican, NTS, and DeClue for conversion, civil theft, misappropriation of trade secrets, and civil conspiracy.

In response, Novamerican, NTS, and Al-cos filed special appearances and DeClue filed a motion to transfer venue. 3 On January 8, 2007, the trial court denied the special appearances of Novamerican and NTS. Thereafter, the trial court issued findings of fact and conclusions of law. Appellants now bring this appeal.

II. STANDARD OF REVIEW

Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002). However, the trial court must frequently resolve fact questions before deciding the jurisdictional question. Id. The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provisions of the Texas long-arm statute. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574, 50 Tex. Sup.Ct. J. 498, 499, (Tex., 2007). A defendant must then negate all bases for personal jurisdiction alleged by the plaintiff. Id.

If the trial court issues findings of fact and conclusions of law in ruling on the special appearance, the appellant may challenge the legal and factual sufficiency of the evidence to support the findings and appellate courts may review the legal and factual sufficiency of the evidence to support the findings. See BMC Software, 83 S.W.3d at 794. A legal sufficiency chal *506 lenge to the findings of fact will not be sustained if there is more than a scintilla of evidence to support the findings. Id. at 795. In conducting a factual sufficiency review, appellate courts may set aside a trial court’s finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong or unjust. See Hoffmann v. Dandurand, 180 S.W.3d 340, 345 (Tex.App.-Dallas 2005, no pet.).

We review the trial court’s legal conclusions de novo. BMC Software, 83 S.W.3d at 794. Specifically, we review the trial court’s legal conclusions drawn from the facts to determine their correctness. Id. If the appellate court determines a conclusion of law is erroneous, but the trial court rendered proper judgment, the erroneous conclusion of law will not require reversal. Id. We may address first the correctness of the trial court’s conclusions of law and assume for purposes of analysis that the trial court’s findings of fact are supported by sufficient evidence. See MedCost, L.L.C. v. Loiseau, 166 S.W.3d 421, 426 (Tex.App.-Austin 2005, no pet.). When a trial court’s conclusions of law are erroneous, we need not decide the sufficiency of the evidence supporting the fact findings. Id.

III. SPECIFIC JURISDICTION

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231 S.W.3d 499, 2007 Tex. App. LEXIS 6562, 2007 WL 2325835, Counsel Stack Legal Research, https://law.counselstack.com/opinion/novamerican-steel-inc-v-delta-brands-inc-texapp-2007.