Ramesh T. Kumar, M.D. v. John Hill, Ind. and D/B/A Info Systems Architects, Inc., a Texas Corporation, A/K/A ISA

• Court: Court of Appeals of Texas
• Decided: February 15, 2007
• Docket: 01-06-00045-CV
• Status: Published

Opinion

Opinion issued February 15, 2007

In The

Court of Appeals

For The

First District of Texas

NO. 01-06-00045-CV

____________

RAMESH T. KUMAR, M.D., Appellant

V.

JOHN HILL, INDIVIDUALLY AND D/B/A INFO SYSTEMS ARCHITECTS, INC., A TEXAS CORPORATION, A/K/A ISA, Appellees

On Appeal from the 212th District Court

Galveston County, Texas

Trial Court Cause No. 04CV0531

MEMORANDUM OPINION

Appellant, Dr. Ramesh T. Kumar, a Florida resident, brings this accelerated interlocutory appeal ⁽¹⁾ challenging the trial court's order denying his special appearance ⁽²⁾ in favor of appellee, John W. Hill, a Texas resident. ⁽³⁾ In his sole issue, Kumar contends that the trial court erred in denying his special appearance.

We reverse the trial court's order denying Kumar's special appearance and render judgment dismissing the case against him for lack of personal jurisdiction.

Factual and Procedural Background

Hill, individually and doing business in Dickinson, Texas, as Info Systems Architects, Inc., a Texas Corporation, also known as ISA Billing Services (collectively "ISA"), has sued Kumar for "libel slander (common law and per se)," tortious interference, breach of contract, and breach of fiduciary duty. In his original petition, Hill generally alleges that Kumar, a Florida resident, is "conducting business in Dickenson [sic], Galveston County, Texas [and] Service of Citation may be served . . . at his place of business which is located at Big Lake Cancer Center, 11168 Lands End Chase, Port St. Lucie, Florida." Specifically, he alleges that Kumar "is one of a group of physicians for whom [Hill] has worked for several years." Kumar is associated with several business entities, two of which are Mid Florida Radiation Oncology Association ("MFROA") and Okeechobee Business Ventures ("OBV"), both incorporated in Florida. These entities have used ISA for billing and accounting purposes. Hill has sued Kumar in his individual capacity, and no medical group is a party to the lawsuit. ⁽⁴⁾

Kumar filed a special appearance, attaching his affidavit, ⁽⁵⁾ in which he testified that he is a resident of the state of Florida, currently residing in Port Saint Lucie. Kumar is not licensed to practice medicine in Texas, does not have any patients from Texas, has not visited Texas for business or pleasure during the past ten years, has no business interests or financial accounts in Texas, and does not own any real property in Texas. He is not a shareholder of any Texas corporation, is not on the board of directors of any Texas corporation, and has never personally paid money for services to any Texas corporation, entity, or individual. Kumar is not a signatory to any contract with Hill or any company associated with Hill, and has never met personally with Hill in Texas.

In his response to Kumar's special appearance, Hill attached his affidavit, in which he testified that he runs ISA, a medical billing and practice management company, and his business address is 4400 Country Club Drive, Dickinson, Texas. In his affidavit, Hill avers that,

During the week of April 5, 2004 at approximately 9:00 p.m., Dr. Kumar and Sheila (Sonny) V. Rivera, a subcontractor of ISA, began an extensive pattern of harassment. At the time they started the coordinated pattern of harassment, Sonny Rivera was still involved in a business relationship with ISA.

Dr. Kumar, by and through his agent, Sheila Rivera, contacted [Hill's] employee Maureen McCabe at her home in Galveston County, Texas, on or about the week of April 5, 2004, and [Hill's] employee was told:

Debra Atwood was "out for her."

Debra Atwood was going to have Maureen McCabe "busted" at her home for drugs.

[Hill's] other employees were jealous of Debra.

On April 22, 2004, at 11:54 a.m., Debra Atwood received a telephone call on her cell phone from Sheila ("Sonny") Rivera. As soon as Ms. Rivera identified herself, Debra held the telephone such that Maureen McCabe could hear the conversation. During that telephone call, Sonny said that "John and Lynn are safe except for one person and that one person deserves it."

Sonny Rivera did/attempted to take confidential ISA documents in spite of her signed confidentiality agreement.

Per Sonny Rivera, Dr. Kumar while she was under ISA employment offered Sonny Rivera for assisting him, financial assistance, relocation to Florida and to help with medical treatment for her brother in Florida.

Sonny Rivera told [Hill's] employees that [Hill's] wife and [Hill], and in some cases, the employees, were engaged in theft and fraud and [they] would all be arrested.

Dr. Kumar did cause his wife to check to see if Sonny had been successful in her attempts to close ISA down.

These statements were specifically designed to harm [Hill], [his] business, and ISA's relationships with its employees, subcontractors and other business relationships.

Hill also generally avers that Kumar "has personally conducted extensive business here in Texas," "has had check-signing privileges on a bank account held for the business Mid-Florida Radiation Oncology" at banks located in Dickinson, Texas, and "personally retained [Hill] to consult with him and to represent him in government hearings."

After allowing discovery and conducting a hearing, in which counsel for Hill read into the record portions of Kumar's deposition, the trial court denied Kumar's special appearance.

Standard of Review

The existence of personal jurisdiction is a question of law, which must sometimes be preceded by the resolution of underlying factual disputes. Paul Gillrie Inst., Inc. v. Universal Computer Consulting, Ltd., 183 S.W.3d 755, 759 (Tex. App.--Houston [1st Dist.] 2005, no pet.); Preussag Aktiengesellschaft v. Coleman, 16 S.W.3d 110, 113 (Tex. App.--Houston [1st Dist.] 2000, pet. dism'd w.o.j.). When the underlying facts are undisputed or otherwise established, we review a trial court's denial of a special appearance de novo. Paul Gillrie Inst., Inc., 183 S.W.3d at 759. Where, as here, a trial court does not issue findings of fact or conclusions of law with its special appearance ruling, all fact findings necessary to support the judgment and supported by the evidence are implied. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002); Paul Gillrie Inst., Inc., 183 S.W.3d at 759.

On appeal, the scope of review of a ruling on a special appearance includes all evidence in the record. Vosko v. Chase Manhattan Bank, N.A., 909 S.W.2d 95, 99 (Tex. App.--Houston [14th Dist.] 1995, no writ). A trial court "determine[s] the special appearance on the basis of the pleadings, any stipulations made by and between the parties, such affidavits and attachments as may be filed by the parties, the results of discovery processes, and any oral testimony." ⁽⁶⁾ Tex. R. Civ. P. 120a(3).

We note that a plaintiff bears the initial burden of pleading allegations sufficient to bring a nonresident defendant within the provisions of the Texas long-arm statute. ⁽⁷⁾ Am. Type Culture Collection v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002); Paul Gillrie Inst., Inc., 183 S.W.3d at 759. The burden of proof then shifts to the nonresident to negate all possible grounds for personal jurisdiction. Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985); Paul Gillrie Inst., Inc., 183 S.W.3d at 759.Personal Jurisdiction

In his sole issue, Kumar argues that the trial court erred in determining that he is subject to the personal jurisdiction of a Texas court because (1) "[he] lacks the minimum contacts with the state of Texas to establish personal jurisdiction" and (2) "[a]ny exercise of jurisdiction by this court over [him] would be fundamentally unfair."

A court may assert personal jurisdiction over a nonresident defendant only if the requirements of both the Fourteenth Amendment's due process clause and the Texas long-arm statute are satisfied. See U.S. Const. amend. XIV, § 1; Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (Vernon 1997); CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex. 1996) (orig. proceeding). The Texas long-arm statute allows a court to exercise personal jurisdiction over a nonresident defendant who does business in Texas. Tex. Civ. Prac. & Rem. Code Ann. § 17.042. A nonresident "does business" in Texas if he, among other things, "commits a tort in whole or in part" in Texas. ⁽⁸⁾ Id. The Texas Supreme Court has repeatedly interpreted this statutory language "to reach as far as the federal constitutional requirements of due process will allow." CSR Ltd., 925 S.W.2d at 594 (citations omitted). Therefore, the requirements of the Texas long-arm statute are satisfied if the exercise of personal jurisdiction comports with federal due process limitations. Id.

The United States Constitution permits a state to assert personal jurisdiction over a nonresident defendant only if the defendant has some minimum, purposeful contacts with the state and if the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice. Dawson-Austin v. Austin, 968 S.W.2d 319, 326 (Tex. 1998). A nonresident who has purposefully availed himself of the privileges and benefits of conducting business in the state has sufficient contacts with the state to confer personal jurisdiction. CSR Ltd., 925 S.W.2d at 594.

The "purposeful availment" requirement has been characterized by the Texas Supreme Court as the "touchstone of jurisdictional due process." Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005). In Michiana, the court articulated three important aspects of the purposeful availment inquiry. Id. at 785. First, only the defendant's contacts with the forum count. Id. This ensures that a defendant is not haled into a jurisdiction solely by the unilateral activities of a third party. Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S. Ct. 2174, 2183 (1985)). Second, the acts relied on must be purposeful; a defendant may not be haled into a jurisdiction solely based on contacts that are "random, isolated, or fortuitous." Id. (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S. Ct. 1473, 1478 (1984)). Third, a defendant "must seek some benefit, advantage, or profit by 'availing' itself of the jurisdiction" because "[j]urisdiction is premised on notions of implied consent--that by invoking the benefits and protections of a forum's laws, a nonresident consents to suit there." Id. (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 567 (1980)).

A defendant's contacts with a forum can give rise to either general or specific jurisdiction. Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 227 (Tex. 1991); AmQuip Corp. v. Cloud, 73 S.W.3d 380, 385 (Tex. App.--Houston [1st Dist.] 2002, no pet.). General jurisdiction is present when a defendant's contacts are continuous and systematic, allowing the forum to exercise personal jurisdiction over the defendant even if the cause of action did not arise from or relate to activities conducted within the forum state. Guardian Royal, 815 S.W.2d at 228; AmQuip Corp., 73 S.W.3d at 385. General jurisdiction requires a showing that the defendant conducted substantial activities within the forum, a more demanding minimum contacts analysis than for specific jurisdiction. Guardian Royal, 815 S.W.2d at 228; AmQuip Corp., 73 S.W.3d at 385. Specific jurisdiction, however, is established if the defendant's alleged liability arises from or is related to an activity conducted within the forum. Guardian Royal, 815 S.W.2d at 227; AmQuip Corp., 73 S.W.3d at 385. When specific jurisdiction is asserted, the minimum contacts analysis focuses on the relationship between the defendant, the forum, and the litigation. AmQuip Corp., 73 S.W.3d at 385; Memorial Hosp. Sys. v. Fisher Ins. Agency, Inc., 835 S.W.2d 645, 650 (Tex. App.--Houston [14th Dist.] 1992, no writ).

Foreseeability is an important consideration in deciding whether the nonresident has purposefully established minimum contacts with the forum state. Burger King Corp., 471 U.S. at 475, 105 S. Ct. at 2183; Guardian Royal, 815 S.W.2d at 227; AmQuip Corp., 73 S.W.3d at 386. The concept of foreseeability is implicit in the requirement that there be a substantial connection between the nonresident defendant and Texas arising from actions or conduct of the nonresident defendant purposefully directed toward Texas. Guardian Royal, 815 S.W.2d at 227; AmQuip Corp., 73 S.W.3d at 386.

Specific Jurisdiction

Hill argues that Texas has specific jurisdiction over Kumar because Kumar breached a "Texas based contract" that he entered in his "individual capacity" with Hill and Kumar "personally solicited and employed Hill" to work "for and with him in Texas." He further argues that Texas has specific jurisdiction because "Kumar allegedly committed numerous torts in and directed at Texas, both individually and through his agent (Texas resident Rivera)."

Kumar argues that Texas does not have specific jurisdiction over him because Hill's petition "fails to describe any contract that Dr. Kumar himself entered into with [a]ppellee or anyone else related to the subject matter of this lawsuit" and that "[a]ppellee's cause of action did not arise from any contacts between [Kumar] and Texas."

In his brief, Hill states that Kumar "entered into a contract with a Texas resident (Hill) and personally signed it--admittedly in his 'individual capacity.'" However, our examination of the referenced portion of the record reveals that the "contract" is a partnership agreement between Kumar, Dr. Grimsley, and Dr. Woody. Hill is not referenced as a party to the agreement. Moreover, the agreement merely indicates "that all billing services for this partnership, slash, professional association that was going to be created as of April 15, 1996 would be conducted out of 4400 Country Club Road, Dickinson, Texas." Nevertheless, even assuming that Kumar, in his individual capacity, entered into a contract with Hill, we note that merely contracting with a Texas resident is insufficient to subject a nonresident defendant to jurisdiction. See AmQuip Corp., 73 S.W.3d at 386; see also Credit Commercial de France, S.A. v. Morales, 195 S.W.3d 209, 220 (Tex. App.--San Antonio 2006, pet. denied); TeleVentures, Inc. v. Int'l Game Tech., 12 S.W.3d 900, 910 (Tex. App.--Austin 2000, pet. denied).

Kumar notes that Hill's only other "allegation which even remotely relates to any contacts with Texas is that Dr. Kumar conspired with a resident of the State of Texas to commit tortious acts against [Hill]." In his original petition, Hill alleges that "[a]s part of an attempt to take control of the physician's group and to steal control, Ramesh T. Kumar, M.D. entered into a conspiracy with Plaintiff's disgruntled, ex-employee." (Emphasis added). The "disgruntled, ex-employee" that Hill refers to is Sheila (Sonny) Rivera. Hill asserts that an "agency relationship" existed between Kumar and Rivera. ⁽⁹⁾

However, to establish apparent authority, one must show that a principal either knowingly permitted an agent to hold itself out as having authority or showed such lack of ordinary care as to clothe the agent with indicia of authority. NationsBank, N.A. v. Dilling, 922 S.W.2d 950, 952-53 (Tex. 1996). A court may consider only the conduct of the principal leading a third party to believe that the agent has authority in determining whether an agent has apparent authority. Id. at 953. Mere declarations of an alleged agent, standing alone, are "incompetent to establish either the existence of the alleged agency or the scope of the alleged agent's authority." Durand v. Moore, 879 S.W.2d 196, 202-03 (Tex. App.--Houston [14th Dist.] 1994, no writ). Here, Hill's vague allegation of an agency relationship between Kumar and Rivera is insufficient to support an assertion of personal jurisdiction over Kumar. Moreover, the Texas Supreme Court has "decline[d] to recognize the assertion of personal jurisdiction over a nonresident defendant based solely upon the effects or consequences of an alleged conspiracy with a resident in the forum state." Nat'l Indus. Sand Ass'n v. Gibson, 897 S.W.2d 769, 773 (Tex. 1995). Therefore, we restrict our inquiry to whether Kumar himself purposefully established minimum contacts such as would satisfy due process. See Gibson, 897 S.W.2d at 773.

Specific jurisdiction turns on the defendant's contacts with Texas, not on whether those contacts were tortious. Michiana Easy Livin' Country, Inc., 168 S.W.3d at 791-92 (Texas Supreme Court "disapproving of those opinions holding that . . . specific jurisdiction turns on whether a defendant's contacts were tortious rather than the contacts themselves."). Although Hill generally asserts that Kumar committed "numerous torts in and directed at Texas," he does not refer us to any specific torts committed by Kumar individually, nor does he explain how or where the alleged torts were committed.

Here, Hill's general allegations of Kumar's contacts with Texas are insufficient to establish that Texas has specific jurisdiction over Kumar. See Guardian Royal, 815 S.W.2d at 227. Accordingly, we conclude that Kumar has negated all bases for an assertion of specific jurisdiction.

General Jurisdiction

Hill argues that Texas has general jurisdiction over Kumar because Kumar "maintained personal and professional contacts with and in Texas on a constant basis." He asserts that Kumar "registered with the U.S. Drug Enforcement Agency showing his business address as Dickinson, Texas," ran "his medical billing services--'individually' out of Dickinson, Texas," "received his professional mail from medical service providers" at his Dickinson address, opened a commercial bank account in Dickinson "with the authority to personally make deposits and withdrawls," filed his "requests for federal Medicare reimbursements reflecting the Dickinson, Texas address," listed the Dickinson address "as the contact for any federal inquiries," and filed his personal business federal income tax returns with the IRS "reflecting his address as Dickinson, Texas." Hill also asserts that "the bills and invoices for [Kumar's] medical services reflected payment to be made at his Dickinson, Texas address" and "from a professional standpoint, the entity he owned and was an officer in admittedly was constantly doing business in Dickinson, Texas."

Kumar argues that Texas does not have general jurisdiction over him because the alleged contacts on which Hill relies do not relate to Kumar acting in his individual capacity and any such contacts are insufficient to establish general jurisdiction.

The fiduciary shield doctrine protects a corporate officer or employee from a trial court's exercise of general jurisdiction when all of an individual's contacts with Texas are on behalf of his employer. Wright v. Sage Eng'g, Inc., 137 S.W.3d 238, 250 (Tex. App.--Houston [1st Dist.] 2004, no pet.). Here, any contacts made by Kumar on behalf of the various medical associations and entities with which he was associated may not be attributed to Kumar for the purpose of establishing general jurisdiction over him in his individual capacity.

Hill further argues that general jurisdiction over Kumar is proper because "the Dickinson, Texas address was . . . reflected on [Kumar's] own personal business letterhead," he "received his personal paychecks from Dickinson, Texas," "his personal life insurance policy listed his mailing address as Dickinson, Texas," "he received his personal federal 1099 forms from other providers at his Dickinson, Texas address," "his profit checks were out of Dickinson, Texas drawn on a Texas bank account," and "his personal (federal) tax returns reflected his Dickinson, Texas address."

However, these activities do not constitute continuous and systematic contacts with Texas, but are too "random, fortuitous, or attenuated" to confer general jurisdiction over Kumar. See AmQuip Corp., 73 S.W.3d at 388 (citing Burger King Corp., 471 U.S. at 475, 105 S. Ct. at 2184). Accordingly, we conclude that Kumar has negated all bases for an assertion of general jurisdiction.

Conclusion

Because Kumar does not have sufficient minimum contacts with Texas to subject him to personal jurisdiction, we hold that the trial court erred in denying Kumar's special appearance. Having so held, we need not address his argument that the assertion of personal jurisdiction over him would violate traditional notions of fair play and substantial justice.

We sustain Kumar's sole issue, reverse the trial court's order denying Kumar's special appearance, and render judgment dismissing the case against him for lack of personal jurisdiction.

Terry Jennings

Justice

Panel consists Justices Nuchia, Jennings, and Higley.

1.

See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(7) (Vernon Supp. 2006).

2.

See Tex. R. Civ. P. 120a.

3. Hill named "Sheila (Sonny) Rivera and Ramesh T. Kumar, M.D." as defendants. Rivera is not a party to this appeal.

4.

In his brief, Hill states that he has "sued Kumar individually and Rivera individually and as Kumar's agent for damages, alleging numerous torts (including libel, slander, tortuous [sic] interference with contracts, conspiracy), breach of contract and breach of fiduciary duties."

5.

We note that Hill argues that Kumar's affidavit is "fatally defective" because "it failed to assert that the data contained therein was 'true and correct.'" The law is well-settled that an "affidavit which does not positively and unqualifiedly represent the facts as disclosed in the affidavit to be true and within the affiant's personal knowledge is legally insufficient." Humphreys v. Caldwell, 888 S.W.2d 469, 470 (Tex. 1994). Here, however, Kumar's affidavit states that he has "personal knowledge of each fact set forth herein."

6.

Although the briefs of the parties in both the trial court and this court and the arguments of counsel at the special appearance hearing allege many facts, our review of the special appearance is restricted to the pleadings, affidavits, and oral testimony. See Tex. R. Civ. P. 120a(3).

7.

Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (Vernon 1997).

8.

The Texas Supreme Court has noted that "[a]llegations that a tort was committed in Texas satisfy the Texas Long-Arm Statute, but not necessarily the U.S. Constitution." Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 788 (Tex. 2005).

9.

In his brief, Hill asserts that "Kumar allegedly acted not only individually but also through his agent for the purpose of tortuous [sic] misconduct against Plaintiffs-Defendant Rivera, a Texas resident."