ShockTheory DLV, Inc. v. Tava Ventures, Inc.

Court of Appeals of Texas·Decided September 22, 2021·No. 05-21-00182-CV·Published

Opinion

AFFIRMED and Opinion Filed September 22, 2021

S In The Court of Appeals Fifth District of Texas at Dallas No. 05-21-00182-CV

SHOCKTHEORY DLV, INC., Appellant V. TAVA VENTURES, INC., Appellee

On Appeal from the 416th Judicial District Court Collin County, Texas Trial Court Cause No. 416-03195-2020

MEMORANDUM OPINION Before Justices Schenck, Smith, and Garcia Opinion by Justice Garcia ShockTheory, DLV, Inc. (“ShockTheory”) brings this interlocutory appeal

from the trial court’s order denying its special appearance in a contract dispute with

Tava Ventures, Inc. (“Tava”). In essence, ShockTheory argues that the evidence is

legally and factually insufficient to support the trial court’s implied fact findings

because: (i) the court improperly admitted and relied on testimony from a witness

who was not competent to testify, and (ii) ShockTheory’s contacts with this state do

not constitute purposeful availment. Concluding that the trial court properly denied ShockTheory’s special

appearance because it did not meet its burden to negate the bases of jurisdiction, we

affirm.

I. BACKGROUND

On January 10, 2020, Tava, a Texas resident, and ShockTheory, a Georgia

entity, entered a contract for ShockTheory to provide marketing and advertising

services “for a period not to exceed one hundred twenty (120) days.”1

ShockTheory continued to provide services after the one hundred twenty-day

period expired and demanded payment. Tava instituted this declaratory judgment

action requesting, among other things, a determination that the contract expired on

its own terms.2

ShockTheory filed a special appearance supported by an affidavit from its

Chief Executive Officer Sonja Williams (the “Williams Addidavit”). Tava’s

response to the Special Appearance was supported by the sworn declaration of

Tava’s Chief General Counsel, Jalene Mack (the “Mack Declaration”).

The trial court conducted a hearing and the parties’ contract was admitted into

evidence. ShockTheory’s counsel requested and was granted the opportunity to

1 The contract is with Tava Lifestyle, LLC, a Tava Ventures Inc. company, but the scope of work section of the contract is with “Tava, Inc.” Tava, Inc. initiated this lawsuit. The parties define both entities collectively as “Tava,” and there is no dispute that Tava is a Texas resident. Therefore, we make no distinction between the Tava entities for purposes of our analysis. 2 Five days later, ShockTheory filed a suit against Tava in Georgia for unpaid invoices.

–2– examine Mack on her declaration. When the hearing concluded, the court denied

Shock Theory’s special appearance. That denial is the subject of this interlocutory

appeal.

II. ANALYSIS

A. Standard of Review and Burden of Proof

A court must have both subject matter jurisdiction over a case and personal

jurisdiction over the parties to issue a binding judgment. Spir Star AG v. Kimich, 310

S.W.3d 868, 871 (Tex. 2010). Personal jurisdiction involves a court’s ability to bind

a particular party to that judgment. CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex.

1996). Whether a court may exercise jurisdiction over a party is a question of law,

which we review de novo. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789,

794 (Tex. 2002). Resolving this question of law, though, may require a court to

decide questions of fact. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d

801, 806 (Tex. 2002). When, as here, the trial court does not issue findings of fact

and conclusions of law with its judgment, we presume all factual disputes were

resolved in favor of the trial court’s decision unless they are challenged on appeal.

Id. Because implied findings are not conclusive, they may be challenged for legal

and factual sufficiency on appeal. Lensing v. Curd, 417 S.W.3d 152, 155 (Tex.

App.—Dallas 2013, no pet.).

Texas courts may assert personal jurisdiction over a nonresident if (1) the

Texas long-arm statute authorizes the exercise of jurisdiction and (2) the exercise of

–3– jurisdiction is consistent with federal due-process guarantees. TV Azteca v. Ruiz, 490

S.W.3d 29, 36 (Tex. 2016). Consistent with federal due-process protections, a state

may assert personal jurisdiction over a nonresident defendant only if the defendant

has established “minimum contacts” with the forum state such that maintenance of

the suit does not offend “traditional notions of fair play and substantial justice.” Int’l

Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Moki Mac River Expeditions v.

Drugg, 221 S.W.3d 569, 575 (Tex. 2007).

The plaintiff bears the initial burden of pleading allegations sufficient to

confer jurisdiction. Moki Mac, 221 S.W.3d at 574. The burden then shifts to the

defendant to negate all bases of jurisdiction in those allegations. Id. (citing BMC, 83

S.W.3d at 793). The defendant may do so by showing that even if the plaintiff’s

allegations are true, the evidence is legally insufficient to establish jurisdiction. Kelly

v. Gen. Interior Const., Inc., 301 S.W.3d 653, 658 (Tex. 2010). Or, the defendant

may present evidence to disprove the plaintiff’s allegations. Id. at 659.

A defendant’s contacts with the forum can give rise to either general or

specific jurisdiction. Spir Star, 310 S.W.3d at 872. A court has general jurisdiction

over a nonresident defendant whose “affiliations with the State are so ‘continuous

and systematic’ as to render [it] essentially at home in the forum State.” TV Azteca,

490 S.W.3d at 37. By contrast, specific jurisdiction “covers defendants less

intimately connected with a state, but only as to a narrower class of claims.” Ford

Motor Co. v. Montana Eighth Judicial Dist. Ct., 141 S. Ct. 1017, 1024 (2021). The

–4– minimum contacts necessary for specific jurisdiction are established if the defendant

purposefully avails itself of the privilege of conducting activities in the forum state,

Luciano v. SprayFoamPolymers.Com., LLC, 625 S.W.3d. 1, 3 (Tex. 2021) (citing J.

McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 877 (2011) (plurality opinion)), and

the suit “arise[s] out of or relate[s] to the defendant’s contacts with the forum.” Moki

Mac, 221 S.W.3d at 576.

In the court below, ShockTheory argued that it was not subject to general or

specific jurisdiction. Tava did not contest the absence of general jurisdiction, nor do

the parties argue general jurisdiction on appeal. Thus, our inquiry is confined to

whether a Texas court may properly exercise specific jurisdiction over

ShockTheory.

B. Purposeful Availment

The “touchstone of jurisdictional due process [is] ‘purposeful availment.’”

Spir Star, 310 S.W.3d at 873. That is, there must be “some act by which the

defendant purposefully avails itself of the privilege of conducting activities within

the forum state, thus invoking the benefits and protections of its laws.” Luciano, 625

S.W.3d at 3 (citing Hanson v.

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