TexVa, Inc. v. Boone

300 S.W.3d 879, 2009 Tex. App. LEXIS 8669, 2009 WL 3766376
CourtCourt of Appeals of Texas
DecidedNovember 12, 2009
Docket05-08-01564-CV
StatusPublished
Cited by18 cases

This text of 300 S.W.3d 879 (TexVa, Inc. v. Boone) 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
TexVa, Inc. v. Boone, 300 S.W.3d 879, 2009 Tex. App. LEXIS 8669, 2009 WL 3766376 (Tex. Ct. App. 2009).

Opinion

OPINION

Opinion By

Justice RICHTER.

TexVa, Inc. (“TexVa”) and R. Bradley Bierman (“Bierman”) appeal the trial court’s order granting the special appearances of Cindy Hayes (“Hayes”) and James Boone (“Boone”), both residents of California. Appellants contend that the trial court erred in sustaining the special appearances of Boone and Hayes. For the reasons set forth below, we conclude that Hayes’ and Boone’s contacts with the State of Texas are sufficient to support specific jurisdiction, and the exercise of jurisdiction over them by a Texas court is consistent with traditional notions of fair play and substantial justice. Accordingly, we reverse the trial judge’s order and remand this case for further proceedings.

BACKGROUND

Bierman, a resident of Texas, and Tex-Va, a Texas corporation, filed suit against Boone and Hayes, both residents of California. The claims raised in this proceeding are for breach of contract, breach of fiduciary duty, negligent misrepresentation and shareholder oppression related to a business they own. Currently, the parties *884 operate a company known as CoreTex Products, Inc. (“CoreTex”). CoreTex is in the business of formulating and selling skin care products. It is organized as a Texas corporation. However, Bierman, Hayes and Boone, first started doing business in 1999 through a partnership called CoreTex Products (“CoreTex Partnership”). CoreTex Partnership was owned equally by CoreLinks Systems (“CoreL-inks”), a partnership owned by appellees, Boone and Hayes, and TexVa, owned in part by Bierman.

When the parties first commenced business as CoreTex Partnership they agreed to operate out of their respective homes. Bierman has continuously operated from his home in Plano, Texas and Hayes and Boone operate from Bakersfield, California. During this time period, Bierman’s son was hired to develop a domain for CoreTex Products. Bierman’s son is also a resident of Texas, although he was a student at Tulane University at that time. Bierman testified that his son had sole responsibility for creating the web site, while Boone claimed that they created it together. This dispute is not material to our analysis because the business records admitted at the hearing show that Bier-man’s son was the technical and administrative contact for issues with the website and provided a Texas contact number and Plano address on behalf of CoreTex Products. Tax returns filed on behalf of Core-Tex Partnership establish that the parties operated as a partnership for two years prior to incorporation. Schedule K-l shows that profits or losses were split evenly between CoreLinks and TexVa for operations in 1999 and 2000.

In late 2000, the parties decided to incorporate and CoreTex Products, Inc. (“CoreTex”), a Texas corporation, was formed. The parties agreed to have Bier-man’s father, a Texas lawyer, incorporate CoreTex for them. The parties offered conflicting testimony as to why Texas was chosen as the state of incorporation. Boone testified that it was merely as a convenience because Bierman’s father would prepare the documents for free. Bierman testified that Texas was chosen because of its favorable tax rate and other advantages. CoreTex is equally owned by TexVa and CoreLinks. Bierman is the president of CoreTex, Boone is the vice-president and treasurer and Hayes is the secretary. Bierman and Boone are the directors of CoreTex.

It is undisputed that CoreTex is headquartered in Bakersfield, California. Almost all of CoreTex’s business is conducted out of its Bakersfield office. All corporate brochures and invoices list the Bakersfield address. However, Bierman retains an office in his home in Plano, Texas and conducts some CoreTex business from that location. Bierman was primarily responsible for EPA and FDA regulations and helped create formulations and trademarks. Bierman filed trademark registrations for CoreTex. Three Certificates of Registration were issued by the U.S. Patent and Trademark Office in November of 2004. All three certificates show CoreTex as the owner, and use the Plano, Texas address. The location of the registered agent is also in Plano, Texas. From the commencement of the relationship as partners, through the present, CoreTex has had some suppliers and customers in Texas, although the number is disputed.

The appellees testified at the special appearance hearing that they have traveled to Texas only four times. Two trips were for personal reasons and two were business trips as representatives of CoreTex. The first of the two business trips took place after Bierman’s role in the corporation had diminished and Boone and Hayes *885 wanted to find out what Bierman wanted to do with the company. The issue of selling his interest was raised, but it is disputed who raised the issue. Hayes had people in California, including his son, who were interested in possibly purchasing TexVa’s interest in the business. Bierman was uncertain what he wanted to do with the business or its worth and requested some financial records.

Bierman subsequently obtained copies of the tax returns and was surprised by the amount of salary that Boone was being paid. Bierman testified that TexVa was not receiving payments regularly and Hayes and Boone had told him it was because they were short on funds. After Bierman had reviewed the tax returns there was a second meeting in Texas. There is also a factual dispute concerning what transpired at this meeting, however, it is clear that the meeting was very short because a dispute arose over Boone’s salary.

It is undisputed that Bierman is not currently involved in the day to day management of CoreTex. There has also been little, to no contact, between the parties for the past year or more.

Suit was filed on March 24, 2008, against CoreTex, Boone and Hayes. Boone and Hayes filed special appearances and a hearing was held on July 3, 2008. The trial court granted the special appearances, but did not issue findings of fact.

BURDEN OF PROOF AND STANDARD OF REVIEW

The plaintiff bears the initial burden of pleading sufficient allegations to establish personal jurisdiction over a defendant. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex.2002). When a nonresident challenges jurisdiction through a special appearance, it carries the burden of negating all bases for jurisdiction. Id.

Whether a trial court has personal jurisdiction over a defendant is a legal issue, which is subject to de novo review. BMC Software, 83 S.W.3d at 794. Where the trial court denies a special appearance and the court issues findings of fact and conclusions of law, the findings of fact may be challenged on legal and factual sufficiency grounds. Id. Legal conclusions may not be challenged for factual insufficiency. Id. If the trial judge does not issue findings of fact and conclusions of law then “all facts necessary to support the judgment and supported by the evidence are implied.” BMC Software, 83 S.W.3d at 795. When the clerk’s and court reporter’s record are included in the appellate record the implied findings are not conclusive and may be challenged on appeal for legal and factual sufficiency. Id.

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Cite This Page — Counsel Stack

Bluebook (online)
300 S.W.3d 879, 2009 Tex. App. LEXIS 8669, 2009 WL 3766376, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texva-inc-v-boone-texapp-2009.