Rittenmeyer v. Grauer

104 S.W.3d 725, 2003 WL 1889450
CourtCourt of Appeals of Texas
DecidedMay 20, 2003
Docket05-02-01866-CV
StatusPublished
Cited by11 cases

This text of 104 S.W.3d 725 (Rittenmeyer v. Grauer) 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
Rittenmeyer v. Grauer, 104 S.W.3d 725, 2003 WL 1889450 (Tex. Ct. App. 2003).

Opinion

OPINION

Opinion By

Justice JAMES.

Ronald A. Rittenmeyer, solely in his capacity as plan administrator of AFD Fund, the post-confirmation estate of the bankruptcy cases of AmeriServe Food Distribution, Inc., and its affiliates, and not individually, appeals the interlocutory orders of the trial court granting the special appearances of Peter Grauer, Benoit Jamar, and Leif Onarheim and dismissing Rittenmeyer’s claims against them. See Tex. Civ. Prac. & Rem.Code Ann. § 51.014(a)(7) (Vernon Supp.2003). Appellant brings a single issue on appeal: whether Texas courts may exercise specific personal jurisdiction *728 over nonresident directors of a foreign corporation headquartered in Texas for the directors’ acts occurring outside Texas. We hold that a nonresident director of a foreign corporation is not subject to personal jurisdiction solely because the corporation has its headquarters in Texas. We also hold the trial court did not err in determining appellees lacked sufficient minimum contacts with Texas to permit the Texas courts to exercise personal jurisdiction over them. We affirm the trial court’s orders sustaining appellees’ special appearances and dismissing appellant’s claims against them.

FACTUAL BACKGROUND

Appellees are three of the eight directors of AmeriServe Food Distribution, Inc. (AmeriServe) and are not residents of the State of Texas. Grauer and Jamar are residents of Connecticut, and Onarheim is a resident of Norway. AmeriServe is incorporated in Delaware, its executive and management offices were in Wisconsin and Connecticut, and its operational headquarters were in Texas. On January 29, 1998, at a meeting in Miami, Florida, the board of directors of AmeriServe approved the merger of AmeriServe with a larger food distribution company, ProSource, Inc. On-arheim was not physically present at the Florida meeting but participated by telephone from Norway. AmeriServe’s fortunes after the merger were not good, and on January 31, 2000, AmeriServe filed for bankruptcy.

Appellant was appointed the plan administrator of AmeriServe’s post-confirmation estate, the purpose of which was to acquire funds, including through litigation, for distribution to AmeriServe’s unpaid creditors. Appellant, on behalf of the post-eonfirmation estate, brought suit in Dallas County Court at Law No. 2 against AmeriServe’s parent companies, its officers and directors, and the companies that advised and financed the merger. Appellant alleged the directors, including appellees, breached their fiduciary duty by voting to approve the merger with ProSource. Appellant also alleged that Jamar and Grauer, who were executives of the company financing the merger, 1 and which earned millions of dollars from the merger, breached their fiduciary duties by not disclosing their conflict of interest to the other board members. Appellees filed special appearances, and the parties filed voluminous evidence in support of their positions.

On November 8, 2002, the trial court granted appellees’ special appearances and dismissed appellant’s claims against them. Appellant timely filed his notice of appeal on November 26, 2002. See Tex.R.App. P. 26.1(b).

SPECIAL APPEARANCE

A Texas court may exercise jurisdiction over a nonresident defendant if (1) the Texas long-arm statute authorizes the exercise of jurisdiction and (2) the exercise of jurisdiction is consistent with federal and state guarantees of due process. See Tex. Civ. Prac. & Rem.Code Ann. §§ 17.041-046 (Vernon 1997 & Supp.2003); Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex.2002); Kelly Inn, Inc. v. Basic Capital Mgmt., Inc., 85 S.W.3d 371, 374 (Tex.App.-Dallas 2002, no pet.). Federal due process mandates that the defendant “purposefully avail” itself of the privilege of conducting activity within the forum state, thus invoking the benefits and protections of its laws. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76, *729 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (random, fortuitous, or attenuated contacts insufficient). The defendant’s conduct and connection with the state must he such that it could reasonably anticipate being sued in the forum state. Id. We determine whether (1) the nonresident defendant has purposefully established minimum contacts with Texas and, if so, (2) the exercise of jurisdiction comports with “notions of fair play and substantial justice.” Id. 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, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). A defendant is not subject to jurisdiction here if its Texas contacts are random, fortuitous, or attenuated. Am. Type Culture Collection, Inc., 88 S.W.3d at 806.

A defendant’s contacts with a forum can give rise to either specific or general jurisdiction. Id. 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. Specific jurisdiction is established if the defendant’s alleged liability arises from or is related to an activity conducted within the forum. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 & n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex.1996). The defendant’s purposeful conduct, not the unilateral activity of the plaintiff or others, must have caused the contact. Helicópteros, 466 U.S. at 417, 104 S.Ct. 1868 (focus is on relationship among defendant, forum, and litigation); Am. Type Culture Collection, Inc., 83 S.W.3d at 806.

Burden of Proof

The plaintiff has the initial burden of pleading facts sufficient to bring a nonresident defendant within the provisions of the Texas long-arm statute. See Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 633 (Tex.App.-Dallas 1993, writ denied). When a nonresident defendant challenges a trial court’s exercise of personal jurisdiction through a special appearance, it carries the burden of negating all bases for personal jurisdiction. See Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex.1985).

Standard of Review

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Bluebook (online)
104 S.W.3d 725, 2003 WL 1889450, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rittenmeyer-v-grauer-texapp-2003.