the University of Alabama v. the Suder Foundation

Court of Appeals of Texas·Decided February 17, 2017·No. 05-16-00691-CV·Published

Opinion

Reversed and Rendered and Opinion Filed February 17, 2017

S In The

Court of Appeals

Fifth District of Texas at Dallas No. 05-16-00691-CV

THE UNIVERSITY OF ALABAMA, Appellant V.

THE SUDER FOUNDATION, Appellee

On Appeal from the 191st Judicial District Court Dallas County, Texas

Trial Court Cause No. DC-15-08295

MEMORANDUM OPINION

Before Justices Lang, Brown, and Whitehill Opinion by Justice Whitehill This is a special appearance interlocutory appeal arising from a contractual arrangement

between a Texas private foundation and a foreign state public university. The pivotal question is whether the university’s communications with Texas residents and attendance at various meetings in Texas due to that contractual relationship support specific jurisdiction over the university in this case based on that contractual arrangement.

In two issues, the University of Alabama (UA) urges that the trial court erred in denying its special appearance in this suit filed by the Suder Foundation (the Foundation) because (i) UA did not commit any acts that constitute purposeful availment in this state and the Foundation’s claims do not arise from or relate to any activities conducted here and, regardless, exercising personal jurisdiction over it in this case would offend traditional notions of fair play and

substantial justice and (ii) there is legally or factually insufficient evidence supporting the trial court’s order.

For the reasons discussed below, we conclude that (i) UA’s contacts with Texas do not constitute the required minimum contacts and (ii) we thus need not consider whether exercising personal jurisdiction would offend traditional notions of fair play and substantial justice. Nor do we reach UA’s second issue. Accordingly, we reverse the trial court’s order denying UA’s special appearance and render judgment dismissing the Foundation’s claims against UA for lack of personal jurisdiction.

I. Background

A. The Parties UA is a public educational institution located in Alabama.

The Foundation, a private Texas non-profit organization, runs the First Scholars Program (the Program). The Program “is administered on the campuses of select four-year major public universities,” and provides “start-up and early-stage funding,” scholarship support, and resources to affiliate universities for use on participating campuses across the United States. The Program is intended to support the success of first generation college students at participating universities. B. The Contractual Relationship Giving Rise to the Lawsuit In 2009, UA employee Kim Gentry called Dianne Schorr, the Foundation’s executive director, to learn more about the Program. The discussion included UA’s involvement with another first generation student program and UA’s plans for future funding. Gentry said UA was “really open” about future funding opportunities.

In January 2010, Gentry sent the Foundation a letter expressing an interest in future first generation college student opportunities with the Foundation.

A month later, the Foundation published a request for proposals in various national educational periodicals seeking applications for participation in the Program. Schorr also mailed the RFP to about sixty universities, including UA.

After Gentry called Schorr at the Foundation’s Texas phone number to ask about the RFP, UA sent its application to the Foundation’s Texas address. The application identified a number of proposed UA actions and initiatives, all of which were to occur on UA’s Alabama campus. The proposed budget requested funds for UA personnel and UA operating costs such as office equipment and travel to the Program’s “pilot sites” in Kentucky and Utah.

The Foundation called UA in Alabama to ask about the application. Later, Schorr called Gentry to tell her that UA was one of two universities selected to participate in the Program.

The goal was to establish and implement the Program “on the campus of [UA].” To facilitate that goal, the Foundation expected that UA would: (i) institute a “living learning community” at the UA campus in Alabama, (ii) provide individual guidance to students in Alabama, (iii) provide social and cultural events for students in Alabama, (iv) create a planning team comprised of faculty and staff in Alabama, and (v) establish a “strategic partners team” which was to include “key campus partners” to support the Program.

Between June 2010 and July 2014, UA and the Foundation entered into six contracts to implement the Program (the Agreements). None of the Agreements were negotiated in Texas.1 Throughout their five-year relationship, the parties communicated by email and telephone. In addition, UA representatives made seven trips to Texas to meet with other Program participants and the Foundation for training, fundraising and development, strategy

1 The Agreements include the Planning Grant Agreement, The Affiliate Agreement, and four addenda to the Affiliate Agreement. The addenda, executed between June 2012 and July 2014, increased UA’s responsibilities, but none were required to occur in Texas.

development, and a “stewardship” visit. But nothing in the Agreements requires UA to travel to Texas, and the Foundation admits that holding events in Texas was simply its preference.

In September 2015, UA notified the Foundation that it would no longer participate in the Program. In response, the Foundation initiated this Texas state court lawsuit. C. Trial Court Proceedings The Foundation’s petition alleges specific personal jurisdiction over UA under the Texas Long-Arm statute and includes breach of contract, anticipatory breach, promissory estoppel and unjust enrichment claims. Specifically, the Foundation asserts that UA breached the Agreements by failing to submit various required data, update tracking systems, participate in various group calls, and attend a conference in February 2015. According to the Foundation, the parties’ relationship was to continue in perpetuity.

UA filed a special appearance and motion to dismiss for lack of jurisdiction. The special appearance was subsequently amended and attached: (i) the Agreements and addenda, (ii) an affidavit, (iii) deposition excerpts, (iv) several emails, and (v) calendar entries and other assorted attachments.

The Foundation responded and filed three supporting affidavits, deposition excerpts from two UA representatives, and documents produced by the parties.

The trial court conducted a hearing and denied UA’s special appearance. This interlocutory appeal followed.

II. Analysis

A. Appellant’s First Issue: Did the trial court err by determining that it had personal jurisdiction over UA?

1. Standard of Review and Applicable Law Whether a court can exercise jurisdiction over a nonresident is a question of law. Kelly v.

Gen. Interior Constr., Inc., 301 S.W.3d 653, 657 (Tex. 2010). We thus review de novo a trial

court’s order granting or denying a special appearance. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007).

However, the exercise of personal jurisdiction requires the trial court to resolve any factual disputes before applying the jurisdictional formula. Am. Type Culture Collection, Inc., v. Coleman, 83 S.W.3d 801, 805–06 (Tex. 2002). When, as here, the trial court does not file findings of fact and conclusions of law in support of its special appearance ruling, we infer all facts necessary to support the judgment and supported by the evidence. Id. Once all factual disputes are resolved, we examine de novo whether the facts negate all bases for personal jurisdiction. Am. Type Culture, 83 S.W.3d at 806.

Texas courts may exercise personal jurisdiction over a nonresident defendant only if (i)

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