Wayne J. Adams, Bonnie Brown, Claude Britton, III, Curtis Davis, Carey D. Yazeed, Dwane Borel, James S. Dartez, Lloyd Cox and Lynda I. Jenkins v. Tort Network, LLC D/B/A Valewcity

• Court: Court of Appeals of Texas
• Decided: March 18, 2025
• Docket: 01-24-00169-CV
• Status: Published

Opinion

Opinion issued March 18, 2025

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-24-00169-CV ——————————— WAYNE J. ADAMS, BONNIE BROWN, CLAUDE BRITTON, III, CURTIS DAVIS, CAREY D. YAZEED, DWANE BOREL, JAMES S. DARTEZ, LLOYD COX AND LYNDA I. JENKINS, Appellants V. TORT NETWORK, LLC D/B/A VELAWCITY, Appellee

On Appeal from the 125th District Court Harris County, Texas Trial Court Case No. 2023-38188

MEMORANDUM OPINION

This lawsuit involves claims for alleged barratry and conspiracy to commit

barratry filed by Appellants against the law firm McClenny Mosley & Associates,

PLLC, Texas attorneys James McClenny and Zach Mosley, their Louisiana partner Richard William Huye, III, and Appellee Tort Network, LLC d/b/a Velawcity

(“Velawcity”), an Arizona company that executed several Marketing Service

Agreements with the law firm to provide advertising and marketing services.

Appellants appeal from the trial court’s order sustaining Velawcity’s special

appearance and dismissing Appellants’ claims against Velawcity for lack of

jurisdiction.

In two issues, Appellants argue (1) the trial court erred in sustaining

Velawcity’s special appearance because Texas courts have specific jurisdiction

over Velawcity, and (2) the trial court abused its discretion by denying their

request for continuance of the special appearance to conduct jurisdictional

discovery.

We affirm.

Background

Appellants and Louisiana residents Wayne J. Adams, Bonnie Brown, Claude

Britton, III, Curtis Davis, Carey D. Yazeed, Dwane Borel, James S. Dartez, Lloyd

Cox, and Lynda L. Jenkins (collectively, “Appellants”) sustained property damage

when Hurricane Ida struck the Gulf Coast in August and September 2021. After

the storm, Texas attorneys James McClenny and Zach Mosley of McClenny

Moseley & Associates, PLLC (“MMA”), Louisiana attorney Richard William

2 Huye, III,1 and Velawcity, an Arizona marketing company, allegedly solicited

Appellants in Louisiana “using an illegal barratry scheme.”

Appellants allege that from December 2021 through August 2022, MMA

entered into five Marketing Service Agreements (“Contracts”) with Velawcity.

The Contracts state that Velawcity will provide “advertising and marketing

services” to MMA for defined legal claims in certain designated marketing areas.2

While the Contracts refer to Velawcity as “an independent contractor to [MMA]”

for “marketing and administrative intake services,” they also state that MMA

“understands and agrees that it is retaining Velawcity as an agent to perform intake

prescreening of prospective clients” and that Velawcity “is an agent of [MMA] for

purposes of the intake prescreening of potential clients.”3

The Contracts require Velawcity to:

• provide “marketing and administrative services” for MMA;

• provide “national advertising services” for MMA;

• perform “pre-screening intake administrative services” to “assess potential claimant eligibility” to make legal claims in connection with the hurricane;

1 Huye was MMA’s managing partner in Louisiana. 2 The Contracts define “Legal Claims” as “pharmaceutical drug, medical device and/or multi-district litigation cases.” 3 The Contracts also state that Velawcity is MMA’s “independent contractor and agent[.]”

3 • provide “potential claimants who meet [MMA’s] prescreening eligibility criteria with [MMA’s] proposed fee agreement” and other documents;

• provide “advertising and marketing services” for MMA;

• transmit to MMA potential client contact information, fee agreements and HIPAA releases following Velawcity’s pre-screening intake review of the potential client(s);

• use “specific intake scripts and survey questions . . . based upon the intake criteria required by [MMA] and at MMA’s “supervision and direction”; and

• keep MMA “informed about the status of [MMA’s] prospective client intake statistics on a daily basis.”

MMA agreed to pay Velawcity a fixed rate for each “prescreened potential client

reviewed for [MMA] and delivered to [MMA].” According to Appellants, the

Contracts were executed by Velawcity and MMA in Texas.4

Appellants allege that following Hurricane Ida, the “lawyers undertook a

brazen attempt to enrich themselves by accumulating a massive docket of clients

using an illegal barratry scheme” facilitated by Velawcity who secured “millions of

dollars” from MMA “to solicit and deliver pre-screened clients and signed

contingency-fee agreements for the firm.” In all, MMA paid Velawcity nearly $14

million for about 4,628 pre-screened and delivered potential clients over a period

of about eight months.

4 The Contracts between MMA and Velawcity do not indicate where they were executed, nor do they contain a choice-of-law clause. It is also unclear whether Velawcity solicited MMA or MMA approached Velawcity in connection with the Contracts.

4 Appellants claim that Velawcity and MMA operated call centers pursuant to

the Contracts to reach potential clients for MMA. They allege that potential clients

were “contacted by telephone, social media or electronic communication” initiated

by Velawcity, MMA, or certain construction companies5 “in a live or electronically

interactive manner, which solicited each of the [Appellants] to hire MMA to

handle their [hurricane related] insurance claims.” Appellants allege they entered

into contingency fee contracts with MMA as a result of the solicitation and in turn,

MMA filed insurance-related lawsuits on behalf of thousands of people, including

Appellants, in Louisiana federal court. Appellants allege that after the lawsuits

were filed, MMA was sanctioned by Louisiana federal courts for misconduct in

connection with the mass insurance filings. Appellants also state that “the

Louisiana Supreme Court suspended Huye from the practice of law in the state

[and that the] remaining MMA lawyers licensed in Louisiana vanished from the

firm, as did McClenny, leaving thousands of MMA clients without any

representation.”

Appellants sued MMA, McClenny, Mosley, Huey, and Velawcity in Texas

state court for civil barratry under Section 82.0651 of the Texas Government Code6

5 MMA allegedly contracted with construction companies to go door-to-door in neighborhoods in Louisiana affected by the hurricane to solicit clients. The construction companies are not parties to the present litigation. 6 Subsection 82.0651(c) of the Texas Government Code addresses civil barratry claims. It provides:

5 and civil conspiracy to commit civil barratry. Only Velawcity is involved in the

present interlocutory appeal. As to Velawcity, Appellants allege that Velawcity,

with the intent to obtain an economic benefit, violated several provisions of

Section 38.12 of the Texas Penal Code,7 which prohibits barratry, and Texas

Disciplinary Rule of Professional Conduct 7.03,8 which addresses barratry. In

support of their civil conspiracy claim, Appellants allege that the defendants,

including Velawcity, “were members of a combination of two or more persons and

the object of the combination . . . was the illegal and unethical in-person

solicitation of [Appellants].” Appellants seek to recover a collective $1,800,000 in

statutory damages from all defendants plus attorneys’ fees. As it concerns

Velawcity, “[e]ach of the nine [Appellants] seek $40,000 from Velawcity (for a

A person who was solicited by conduct violating Section 38.12(a) or (b), Penal Code, or Rule 7.03 of the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, regarding barratry by attorneys or other persons, but who did not enter into a contract as a result of that conduct, may file a civil action against any person who committed barratry. TEX. GOV’T CODE § 82.0651(c). 7 See TEX. PENAL CODE § 38.12(a)(2), (4), (6), (b)(1), (2), (3). 8 See TEX. DISCIPLINARY RULES PROF’L CONDUCT R. 7.03(a)–(d), reprinted in TEX. GOV’T CODE, tit. 2, subtit. G, app. A. Appellants allege that MMA and its attorneys violated the rule by paying “Velawcity and the construction companies they worked with more than $14 million to solicit potential clients, including [Appellants], who had not sought MMA’s services, and who had no past relationship with MMA, nor any experience in legal matters.”

6 total of $360,000)” claiming Velawcity purportedly “committed four acts of

barratry on each of them.”

In its petition, Appellants allege the trial court has personal jurisdiction over

each defendant “because acts and omissions complained of herein occurred in

Texas, each Defendant does and/or did business in the State of Texas, has

committed a tort and violation of Section 82.0651 of the Texas Government Code,

in whole or in part in Texas, is a resident and a citizen of Texas, and/or has

minimum contacts with the state of Texas.” As to Velawcity, Appellants allege

that “[a]lthough [it] is an Arizona company, [Velawcity] contracted with the[]

Texas lawyers in Texas, and received payments pursuant to those contracts from

Texas, which are alleged to have constituted overt acts of barratry that violate

Texas law.”

Velawcity filed a special appearance objecting to the trial court’s exercise of

personal jurisdiction over it. It argued it lacked minimum contacts with Texas

necessary to give rise to personal jurisdiction because:

• Appellants’ allegations arise from conduct allegedly committed by Velawcity in Louisiana;

• Velawcity is not a citizen of Texas;

• Appellants do not allege Velawcity maintains an agent for service of process in Texas or that Velawcity is registered to do business with the Texas Secretary of State;

• Appellants are Louisiana residents; 7 • Appellants do not plead that the alleged solicitation communications were made by Velawcity in Texas;

• Velawcity maintains its principal place of business in Arizona, where it is a limited liability company;

• Velawcity had no Texas members at the time in question;

• Velawcity did not maintain a place of business in Texas;

• Velawcity did not control day-to-day operations of any Texas entity;

• There are no allegations of sanctionable attorney conduct or attorney discipline “having been effected by any Texas entity against Velawcity;”

• Velawcity’s alleged tortious conduct did not affect Texas residents; and

• Velawcity’s alleged tortious conduct did not cause damages in Texas.

Velawcity further argued the exercise of personal jurisdiction over it in Texas

would offend traditional notions of fair play and substantial justice, and it would be

unduly burdensome to require it to defend a suit in a state where it is not organized,

did not maintain a place of business, and did not market to Appellants; Texas has

no interest in adjudicating the dispute; Appellants, Louisiana residents, had no

contact with Velawcity in Texas and were not damaged by Velawcity in Texas;

and allowing the suit to proceed in Texas would “contravene case law on personal

jurisdiction and First Amendment jurisprudence.”

Velawcity attached the declaration of its president, Chaz Van De Motter, to

its special appearance. Van De Motter testified that during the time at issue,

Velawcity was a limited liability company formed under Arizona law; its principal 8 place of business was in Scottsdale, Arizona; it had no Texas members; it did not

maintain any place of business in Texas, own any subsidiaries that maintained

places of business in Texas, or control the daily operations of any Texas entity; and

it did not market in Texas to Appellants.

Appellants filed a response to Velawcity’s special appearance or, in the

alternative, a motion to continue the special appearance hearing. They argued that

Velawcity had minimum contacts with Texas because it had “purposefully availed

itself to Texas by engaging in multiple contracts with Texas residents over a long

period of time to act as an agent for a Texas law firm and engage in unlawful

solicitation in violation of Texas law.” According to Appellants, Velawcity:

• contracted with Texas residents to act as their “agent” and solicit employment;

• entered into five contracts with MMA, a Texas resident, during an eight- month period;

• performed administrative services as Texas law firm MMA’s agent under MMA’s supervision;

• took direction from MMA regarding the solicitation;

• “constantly communicated” with MMA and its attorneys about the solicitation; and

• committed four acts of barratry9 in violation of section 38.12 of the Texas Penal Code.

9 Appellants allege that Velawcity “violated Section 38.12(a)(2) [of the Texas Penal Code] by soliciting employment in person, it violated Section 38.12(a)(4) by paying or offering to pay its employees to solicit employment for MMA, it 9 Although Appellants acknowledged that no in-person solicitation had occurred in

Texas, conceding they “were solicited in Louisiana,” they nonetheless argued that

Section 82.0651 of the Texas Government Code applied because the financing and

directing of unlawful solicitation had occurred “domestically.” They argued that

MMA had “financed and directed the unlawful solicitation from Texas,” that

MMA had paid Velawcity “to carry out the solicitation as an ‘agent’ of [MMA],”

and that “the conduct violate[d] the Texas criminal barratry statute” creating “civil

liability against Velawcity.” They concluded that because Velawcity’s “liability

arises from or relates to its forum contacts,” and “Velawcity’s contacts with the

Texas firm [] form[] the operative facts of this litigation . . . specific jurisdiction

exists.”10

Appellants objected to Van De Motter’s declaration as conclusory and

vague. In addition, should the trial court not be inclined to overrule the special

appearance, Appellants requested a continuance of the hearing to conduct

jurisdictional discovery. In support of the continuance, Appellants attached a

declaration from their counsel identifying the discovery they sought, including

violated Section 38.12(b)(1) by knowingly financing the commission of barratry, and it violated section 38.12(a)(6) by agreeing to accept money to solicit employment.” 10 Appellants argued that they only had to “allege that they were solicited by conduct violating Texas laws and rules governing barratry by Texas lawyers (MMA) and the case runners they employed (Velawcity), and that MMA financed and directed that solicitation from Texas.”

10 information about Velawcity’s “business dealings in Texas,” its “communications

with Texas residents,” its “advertising to or solicitation of residents,” and its travel

to Texas to meet with Texas residents. They also requested to take Van De

Motter’s deposition.

In its special appearance reply, Velawcity argued that a plaintiff cannot

establish personal jurisdiction over a nonresident defendant merely “by describing

conduct that allegedly constitutes a valid cause of action[.]” Rather, the plaintiff

“must plead specific facts showing that the defendant has purposefully availed

itself” of the privilege of conducting business in the forum state by conducting

activities there and that the cause of action “arises from or is related to” the

defendant’s “contacts or activities” in the state. Velawcity further argued that

Appellants’ request for a continuance should be denied because they had not

requested additional jurisdictional discovery in the nearly seven months its special

appearance had been pending.

During the special appearance hearing, Appellants requested they be allowed

to conduct jurisdictional discovery by deposing Van De Motter and sending out

“summary discovery” enabling them to submit a “comprehensive response” to the

special appearance. Velawcity objected and argued the special appearance hearing

had been set for nearly a month and the special appearance had been pending for

seven months, yet there had been no discovery requests from Appellants. The trial

11 court judge denied the discovery request, explaining he did not see “why

[Appellants] would need any specific discovery when the basis of [their] argument

is the contract which is in evidence.” In sustaining the special appearance, the trial

court stated, “So you have the contract in [evidence] and there’s no claim again

that any Texas residents were involved or were solicited in the State.”

After the hearing, the trial court entered an order sustaining Velawcity’s

special appearance, sustaining Appellants’ objections to Van De Motter’s

declaration, and granting leave for Velawcity to amend the declaration to “cure

technical defects.” Velawcity filed an amended declaration six days later.11, 12

This interlocutory appeal ensued.13

Personal Jurisdiction

A court may assert personal jurisdiction over a nonresident defendant only if

11 The trial court signed the order on February 23, 2024. On February 29, 2024, Velawcity filed an amended declaration signed by Vincent Van De Motter, identifying him as the President of Velawcity through January 2024. Presumably, Chaz Van De Motter and Vincent Van De Motter, who share the same date of birth, are the same person. As noted, Chaz Van De Motter was President of Velawcity when he executed his declaration in July 2023. 12 On appeal, Appellants argue the “trial court abused its discretion when it allowed Velawcity to file an untimely amended declaration.” Both the declaration and the amended declaration negated general jurisdiction. Because our analysis is limited to determining whether the trial court had specific jurisdiction over Velawcity— the only type of jurisdiction asserted by Appellants—we need not address Appellants’ argument that the trial court abused its discretion in allowing Velawcity to file the amended declaration. 13 See TEX. CIV. PRAC. & REM. CODE § 51.014(a)(7) (identifying grant of special appearance as ruling subject to interlocutory appeal).

12 the Texas long-arm statute and due process requirements of the Fourteenth

Amendment to the United States Constitution are satisfied. See U.S. CONST.

amend. XIV, § 1; TEX. CIV. PRAC. & REM. CODE § 17.042; LG Chem. Am., Inc. v.

Morgan, 670 S.W.3d 341, 346 (Tex. 2023). The Texas long-arm statute allows

Texas courts to exercise personal jurisdiction over a nonresident defendant who is

doing “business in this state,” which the Legislature has defined to include

“commit[ing] a tort in whole or in part in this state.” TEX. CIV. PRAC. & REM.

CODE § 17.042(2); LG Chem. Am., 670 S.W.3d at 346. The reach of the long-arm

statute extends to the full extent permitted by the Due Process Clause of the

Fourteenth Amendment. M & F Worldwide Corp. v. Pepsi-Cola Metro. Bottling

Co., Inc., 512 S.W.3d 878, 885 (Tex. 2017). Due process is satisfied when the

nonresident defendant has established minimum contacts with the forum state and

the exercise of jurisdiction over the nonresident defendant comports with

traditional notions of fair play and substantial justice. See LG Chem. Am., 670

S.W.3d at 346 (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316–17 (1945)).

A nonresident defendant’s minimum contacts with a forum state are established

when the defendant “purposefully avails itself of the privilege of conducting

activities within the forum state, thus invoking the benefits and protections of its

laws.” M & F Worldwide Corp., 512 S.W.3d at 886 (quoting Moncrief Oil Int’l

Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013)); Ford Motor Co. v.

13 Mont. Eighth Jud. Dist. Ct., 592 U.S. 351, 359 (2021); see also TV Azteca v. Ruiz,

490 S.W.3d 29, 37 (Tex. 2016) (“The minimum-contacts requirement protects due-

process rights by permitting a state to exercise jurisdiction over a nonresident

defendant only when the defendant ‘could reasonably anticipate being haled into

court there.’”) (quoting Moncrief Oil, 414 S.W.3d at 152).

A defendant’s contacts with a forum state can give rise to either specific or

general jurisdiction. Ford Motor Co., 592 U.S. at 358. Specific jurisdiction exists

when the claims involved in the litigation relate to or arise from the nonresident

defendant’s contacts with the forum state. Id. at 359; see also M & F Worldwide

Corp., 512 S.W.3d at 886. The specific jurisdiction analysis involves two

components: purposeful availment and relatedness. LG Chem. Am., 670 S.W.3d at

347. The defendant’s contacts with the forum state must be purposeful, and the

cause of action must “arise from or relate to” those contacts. Moki Mac River

Expeditions v. Drugg, 221 S.W.3d 569, 579 (Tex. 2007). There must be a

substantial connection between the defendant’s purposeful contacts with the forum

and the operative facts of the litigation. LG Chem. Am., 670 S.W.3d at 347; see

also Moki Mac, 221 S.W.3d at 585.14 “[M]ere injury to a forum resident is not a

sufficient connection to the forum.” TV Azteca, 490 S.W.3d at 42; see also Cooper 14 “Operative facts” are those facts that “will be the focus of the trial, will consume most if not all of the litigation’s attention, and the overwhelming majority of the evidence will be directed to that question.” Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007).

14 Gay Martinez del Rio y Asociados Intermediarios de Reaseguro S.A. de C.V. v.

Elamex, S.A. de C.V., No. 05-16-01436-CV, 2017 WL 3599690, at *8 (Tex.

App.—Dallas Aug. 22, 2017, no pet.) (mem. op.) (same) (citing Walden v. Fiore,

571 U.S. 277, 290 (2014)).

The Texas Supreme Court has characterized the “purposeful availment”

requisite of specific jurisdiction as the “touchstone of jurisdictional due process.”

Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005).

There are three significant aspects of the purposeful availment inquiry. Id. at 785.

First, only the defendant’s contacts with the forum state count. Id. This ensures

that a defendant is not haled into a jurisdiction solely by the unilateral activities of

a third party. Id. That is, the issue is not whether the plaintiff “experienced a

particular injury or effect” in the forum but whether the defendant’s conduct

“connects him to the forum in a meaningful way.” TV Azteca, 490 S.W.3d at 42

(citing Walden, 571 U.S. at 290). “[T]he analysis looks to the defendant’s contacts

with the forum [s]tate itself, not the defendant’s contacts with persons who reside

there.” Id. (quoting Walden, 571 U.S. at 286).

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.” Michiana, 168 S.W.3d at 785. Third, a defendant “must seek some

benefit, advantage, or profit by ‘availing’ itself of the jurisdiction.” Id. By

15 “invoking the benefits and protections of a forum’s laws, a nonresident consents to

suit there.” Id.

General jurisdiction “involves a court’s ability to exercise jurisdiction over a

nonresident defendant based on any claim, including claims unrelated to the

defendant’s contacts with the state.” M & F Worldwide Corp., 512 S.W.3d at 885

(citing PHC–Minden, LP v. Kimberly–Clark Corp., 235 S.W.3d 163, 168 (Tex.

2007)); see also Bristol-Myers Squibb Co. v. Superior Ct. of Cal., 582 U.S. 255,

262 (2017) (“A court with general jurisdiction may hear any claim against that

defendant, even if all the incidents underlying the claim occurred in a different

[s]tate.”) (emphasis in original). The general-jurisdiction inquiry is “very different

from a specific jurisdiction inquiry” and involves a “more demanding minimum

contacts analysis” with a “substantially higher threshold.” PHC-Minden, 235

S.W.3d at 167–68 (citations omitted). For general jurisdiction to exist, the

defendant’s contacts with the forum state must be so continuous and systematic as

to render the defendant “essentially at home in the forum [s]tate.” See Daimler AG

v. Bauman, 571 U.S. 117, 127 (2014); see also Luciano v.

SprayFoamPolymers.com, LLC, 625 S.W.3d 1, 8 (Tex. 2021).

The plaintiff and the defendant bear shifting burdens of proof in a challenge

to personal jurisdiction. See Moncrief Oil, 414 S.W.3d at 149–150; Kelly v. Gen.

Interior Constr., 301 S.W.3d 653, 658–59 (Tex. 2010). The plaintiff bears the

16 initial burden of pleading allegations sufficient to bring a nonresident defendant

within the provisions of the Texas long-arm statute. Moncrief Oil, 414 S.W.3d at

149. If the plaintiff meets its initial burden, the burden shifts to the nonresident

defendant to negate the plaintiff’s alleged bases for jurisdiction. Id. The defendant

can negate jurisdiction either by disproving the plaintiff’s allegations or by

showing that the evidence is legally insufficient to establish jurisdiction, taking the

plaintiff’s allegations as true. Kelly, 301 S.W.3d at 659.15

Standard of Review

Whether a trial court has personal jurisdiction over a nonresident defendant

is a question of law we review de novo. Old Republic Nat’l Title Ins. Co. v. Bell,

549 S.W.3d 550, 558 (Tex. 2018) (citing Moncrief Oil, 414 S.W.3d at 150). The

trial court must often resolve fact questions before deciding the jurisdictional

question. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.

2002). The trial court is the sole judge of the witnesses’ credibility and the weight

to be given their testimony. Douglas Elliman Realty, LLC v. Griffin Partners III-

520/2017 L.P., No. 01-21-00083-CV, 2023 WL 2247765, at *10 (Tex. App.—

Houston [1st Dist.] Feb. 28, 2023, no pet.) (mem. op.) (citing Predator Downhole

Inc. v. Flotek Indus., Inc., 504 S.W.3d 394, 402 (Tex. App.—Houston [1st Dist.]

15 A trial court determines a 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.” TEX. R. CIV. P. 120a(3).

17 2016, no pet.)). We will not disturb a trial court’s resolution of conflicting

evidence that turns on such credibility or weight. Id. When, as here, the trial court

does not issue findings of fact and conclusions of law, all fact findings necessary to

support the judgment and supported by evidence are implied. Old Republic, 549

S.W.3d at 558 (citing BMC Software, 83 S.W.3d at 795).

Special Appearance

The Texas long-arm statute provides that a nonresident does business in this

state if the nonresident:

(1) contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in this state;

(2) commits a tort in whole or in part in this state; or

(3) recruits Texas residents, directly or through an intermediary located in this state, for employment inside or outside this state.

TEX. CIV. PRAC. & REM. CODE § 17.042. The broad language of the Texas long-

arm statute “extends Texas courts’ personal jurisdiction ‘as far as the federal

constitutional requirements of due process will permit.’” BMC Software, 83

S.W.3d at 795 (quoting U–Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex.

1977)).16

16 Because Texas’ long-arm statute’s broad language allows it to “reach as far as the federal Constitution permits, . . . the due process analysis under state law is consistent with the federal test.” Ennis v. Loiseau, 164 S.W.3d 698, 706 (Tex. 18 Appellants argue that the Texas long-arm statute was invoked by their

allegations that Velawcity contracted with MMA “to solicit employment for that

firm in violation of [the Texas civil barratry statute] and the rules and laws

governing barratry[.]” In their original petition, Appellants generally allege the

trial court has personal jurisdiction over each defendant because “the acts and

omissions complained of herein occurred in Texas, each Defendant does and/or did

business in the State of Texas, has committed a tort and violation of Section

82.0651 of the Texas Government Code, in whole or in part in Texas, is a resident

and citizen of Texas, and/or has minimum contacts with the State of Texas.”

Appellants then assert more specific jurisdictional allegations as to each defendant.

As it concerns Velawcity, the original petition states: “Although Velawcity is an

Arizona company, it contracted with these Texas lawyers in Texas, and received

payments pursuant to those contracts from Texas, which are alleged to have

constituted overt acts of barratry that violate Texas law.” Appellants allege that

MMA “paid Velawcity almost $14 million for signed contracts with approximately

4,628 clients.” The petition continues: “Velawcity carried out the unlawful

App.—Austin 2005, no pet.) (citing Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991)). And while “[d]ecisions of the federal courts of appeals and district courts do not bind Texas courts,” “they are received with respectful consideration.” Bunting v. Kyle Bunting Holdings, Inc., No. 03-18-00656-CV, 2019 WL 2622318, at *4 n.4 (Tex. App.—Austin June 27, 2019, pet. denied) (quoting Denton v. Texas Dep’t of Pub. Safety Officers Ass’n, 862 S.W.2d 785, 791 n.4 (Tex. App.—Austin 1993), aff’d, 897 S.W.2d 757, 759 (Tex. 1995).

19 solicitation as an agent of MMA, and at the direction of McClenny and Mosley.”

Appellants allege in their pleadings that Velawcity committed four acts of barratry

on each of them in violation of several sections of the Texas Penal Code.

Due process is satisfied—and personal jurisdiction may be exercised over

the nonresident defendant—when the defendant has established “minimum

contacts” with the forum state and the exercise of jurisdiction over the nonresident

defendant comports with “traditional notions of fair play and substantial justice.”

See LG Chem. Am., 670 S.W.3d at 346 (citing Int’l Shoe, 326 U.S. at 316–17).

The minimum contacts prong comprises two kinds of personal jurisdiction:

general and specific jurisdiction. Rogers v. TexWest, L.L.C., 261 S.W.3d 818, 821

(Tex. App.—Dallas 2008, no pet.) (citing CSR Ltd. v. Link, 925 S.W.2d 591, 595

(Tex. 1996)).

Because Appellants asserted only specific jurisdiction in the trial court, we

limit our analysis to specific jurisdiction.17

Specific Jurisdiction

In their first issue, Appellants argue the trial court erred in sustaining

Velawcity’s special appearance because the court has specific jurisdiction over

17 Appellants argued in the trial court that Velawcity was subject to personal jurisdiction in Texas because specific jurisdiction attached, stating: “Because Velawcity’s liability arises from or relates to its forum contacts, specific jurisdiction exists.” Appellants did not argue that the trial court could exercise general jurisdiction over Velawcity. We thus do not address whether the trial court had general jurisdiction over Velawcity.

20 Velawcity. Appellants argue they “presented evidence to establish personal

jurisdiction over Velawcity, including the five barratry contracts.” They argue the

Contracts “demonstrated that Velawcity was engaged by the Texas law firm . . . to

act as its agent and unlawfully solicit employment in violation of Texas barratry

laws.” Appellants argue that Velawcity’s contacts with Texas “were purposeful,

not random, fortuitous, or attenuated.” They aver that over an eight-month period,

Velawcity

Performed[ed] pre-screening intake administrative services for [MMA] as [MMA’s] agent, based upon [MMA’s] written criteria and under [MMA’s] supervision, to assess potential claimant eligibility for specific Legal Claims.

The Contracts state in pertinent part:

Velawcity, in consultation with [MMA], will use specific intake scripts and survey questions for each Legal Claim, based upon the intake criteria required by [MMA]. The intake pre-screening administrative services provided by Velawcity will be pursuant to the [MMA’s] supervision and direction. . . .

Upon Velawcity’s pre-screening intake review of a potential client’s eligibility, Velawcity will transmit to [MMA], with potential client’s consent, the potential client’s contact information, fee agreement and HIPAA release either by direct posting through established secure connection with [MMA] system or email. . . .

The Contracts also state that MMA “is responsible for review of all marketing and

advertising provided by Velawcity to confirm the material’s compliance with Law

Firm’s ethical obligations in relevant states.” Finally, the Contracts state that

Velawcity “will keep [MMA] informed about the status of [MMA’s] prospective 21 client intake statistics on a daily basis through Velawcity’s dashboard platform.”

Appellants argue that through these Contracts, Velawcity purposefully availed

itself of Texas law and benefitted “[b]y acting as essentially a sales agent for a

Texas firm, receiving payments from that Texas firm, and regularly

communicating with that Texas firm.”

Velawcity responds it lacks minimum contacts with Texas sufficient to give

rise to specific jurisdiction because neither Appellants nor Velawcity are Texas

citizens, and the alleged wrongful conduct by Velawcity did not occur in Texas.

Velawcity avers there is “simply no nexus among/between Velawcity, the state of

Texas, and the conduct at issue.” According to Velawcity, Appellants do not claim

they sustained any damages in Texas, and Velawcity is not alleged to have

committed a tort in Texas. Velawcity contends Appellants are forum shopping

because Louisiana, unlike Texas, does not have statutory penalties or damages for

barratry or the unauthorized practice of law.

Appellants correctly point out that it is the defendant’s relationship with the

forum state, rather than the plaintiff’s relationship, that is the proper focus of a

specific jurisdiction analysis. Courts “must consider the relationship between the

defendant, the forum state, and the litigation.” Searcy v. Parex Res., Inc., 496

S.W.3d 58, 67 (Tex. 2016). In other words, the special appearance analysis turns

on Velawcity’s relationship with Texas. There must be a substantial connection

22 between Velawcity’s relationship with the forum state and the operative facts of

the litigation. LG Chem. Am., 670 S.W.3d at 347; Moki Mac, 221 S.W.3d at 585.

In assessing Velawcity’s relationship with Texas, we consider only Velawcity’s

purposeful contacts with the forum state. “[T]he analysis looks to the defendant’s

contacts with the forum [s]tate itself, not the defendant’s contacts with persons

who reside there.” TV Azteca, 490 S.W.3d at 42 (citing Walden, 571 U.S. at

285).18

A. Purposeful Availment

According to Appellants, the minimum contacts that give rise to specific

jurisdiction over Velawcity in Texas are (1) Velawcity’s Contracts with MMA;

(2) Velawcity’s receipt of payments from MMA; and (3) the argument that

Velawcity’s solicitation of Appellants in Louisiana subjects Velawcity to liability

in Texas. We conclude that the first two contacts are insufficient to establish

specific jurisdiction and the third is not relevant to our jurisdictional analysis.

18 Even when a plaintiff alleges that the nonresident defendant engaged in a civil conspiracy with a forum state resident, courts examine only the contacts of the nonresident defendant who filed the special appearance in determining whether it is subject to the court’s jurisdiction. See Nat’l Indus. Sand Ass’n v. Gibson, 897 S.W.2d 769, 773 (Tex. 1995) (orig. proceeding) (declining to recognize assertion of personal jurisdiction over nonresident defendant based only on consequences of alleged conspiracy with forum state resident, holding that jurisdictional inquiry is restricted to whether defendant who filed special appearance “purposefully established minimum contacts such as would satisfy due process”); see also Old Republic Nat’l Title Ins. Co. v. Bell, 549 S.W.3d 550, 560 (Tex. 2018) (“The mere existence or allegation of a conspiracy directed at Texas is not sufficient to confer jurisdiction.”) (citing Gibson, 897 S.W.2d at 773). 23 1. Liability is a separate inquiry from personal jurisdiction.

Appellants argue that Velawcity is subject to specific jurisdiction in Texas

because its solicitation of Appellants in Louisiana subjects Velawcity to liability in

Texas. Whether Velawcity is liable for civil barratry in Texas is an inquiry

separate from whether it purposefully availed itself of the privilege of conducting

business in Texas subjecting it to specific jurisdiction. The purpose of a special

appearance is not to determine liability, but to determine whether the actions

alleged by the plaintiff are such that a defendant should expect to be subject to

Texas jurisdiction. See Mort Keshin & Co., Inc. v. Hous. Chronicle Publ’g Co.,

992 S.W.2d 642, 648 (Tex. App.-– Houston [14th Dist.] 1999, no pet.) (“The

purpose of this [special appearance] proceeding is not to determine ultimate

liability, but simply to assess whether [the defendant] should be forced to respond

to suit in Texas.”). Thus, even if Velawcity’s actions could give rise to civil

liability under the Texas barratry statute, an issue we do not decide today, we must

still consider whether Velawcity is subject to specific jurisdiction in Texas.

2. Velawcity’s Purported Contacts with Texas

Appellants argue that Velawcity is subject to specific jurisdiction in Texas

because it contracted with MMA and received payments from MMA under the

Contracts. We disagree.

24 It is well-settled that a nonresident defendant’s actions in contracting with a

Texas entity and receiving payments from Texas under the contract are insufficient

in and of themselves to confer personal jurisdiction over the nonresident defendant,

especially when as here, the contract calls for performance outside the forum state.

See Blair Commc’ns, Inc. v. SES Survey Equip. Servs., Inc., 80 S.W.3d 723, 730

(Tex. App.—Houston [1st Dist.] 2002, no pet.) (“We do not believe that initiating

contract discussions with a Texas resident, and subsequently entering into a

contract, in addition to making payment in Texas, are sufficient contacts with

Texas when the entire substance of the contract is performed outside the state.”);

Thumpers Custom Car Stereo, Inc. v. Martinez, No. 2-06-172-CV, 2007 WL

614184, at *7 (Tex. App.—Fort Worth Mar. 1, 2007, no pet.) (mem. op.) (“[A]

nonresident’s action in merely contracting with a Texas resident for performance

of a contract wholly outside of Texas is insufficient to trigger specific jurisdiction

in Texas.”).

In their original petition, Appellants allege that Velawcity committed four

acts of barratry on each of them, describing the acts as follows:

• Section 38.12(a)(2) “by soliciting employment in person;”

• Section 38.12(a)(4) “by paying or offering to pay its employees to solicit employment for MMA;”

• Section 38.12(b)(1) “by knowingly financing the commission of barratry;” and

25 • Section 38.12(a)(6) “by agreeing to accept money to solicit employment.”

With respect to the first three allegations, Appellants acknowledge that none of

those activities took place in Texas. Appellants concede that Velawcity—an

Arizona entity—solicited them in in Louisiana and that no in-person solicitation

took place in Texas. Their purported solicitation involved the handling of

insurance claims in Louisiana related to hurricane-related damage in Louisiana,

which resulted in lawsuits filed in Louisiana. Appellants are residents of Louisiana

and while they claim they are entitled to recover statutory fees under the Texas

civil barratry statute, they have alleged no injury in Texas.

While Appellants’ fourth allegation concerns Velawcity’s acceptance of

money from MMA “to solicit employment” from Appellants, mere receipt of

payments from a Texas resident is also insufficient to establish specific jurisdiction

over a nonresident defendant in Texas. See 3-D Elec. Co., Inc. v. Barnett Constr.

Co., 706 S.W.2d 135, 142 (Tex. App.—Dallas 1986, writ ref’d n.r.e.) (“[T]he

making of payments in Texas is not sufficient to establish minimum contacts.”)

(citing Hydrokinetics, Inc. v. Alaska Mech., Inc., 700 F.2d 1026, 1029 (5th Cir.

1983)); Blair, 80 S.W.3d at 729 (noting personal jurisdiction is not “justified by

the single fact that a contract is payable in Texas”).

Appellants thus have not established any purposeful contacts with Texas

giving rise to specific jurisdiction. And even if they had, they would not prevail. 26 B. Substantial Connection to Operative Facts

Even if we concluded that the Contracts and related payments to Velawcity

were purposeful contacts of Velawcity with Texas, Appellants must also establish

that Velawcity’s purposeful contacts with the forum state are substantially

connected to the operative facts of the litigation or form the basis of their causes of

action. Appellants have not done so.

The decision in Moki Mac River Expeditions v. Drugg is instructive. 221

S.W.3d 569 (Tex. 2007). In Moki Mac, a Utah-based seller of river-rafting

expeditions was sued following the death of the plaintiffs’ teenage son (“Andy”)

during a river-rafting trip in Arizona. Id. at 573. Moki Mac did not directly solicit

the plaintiffs. Id. Rather, they learned about the trip from a Texas resident

(“Seals”) who had contacted the company about a rafting trip. Id. Moki Mac sent

Seals a brochure advertising the next season of excursions and Seals shared the

brochure with the plaintiffs. Id. The plaintiffs corresponded with Moki Mak from

their home in Texas and decided to send Andy on the rafting trip. Id. After the

plaintiffs paid for the excursion, Moki Mac sent a letter confirming payment to the

plaintiffs’ Texas home, along with an acknowledgment-of-risk and release form.

Id. Andy and his mother signed the form and returned it to Moki Mac. Id. Andy

was fatally injured during the trip and his parents filed a wrongful death suit on

their own behalf and on behalf of Andy’s estate against Moki Mac in Texas,

27 alleging negligence and intentional and negligent misrepresentation. Id. Andy’s

mother alleged, among other things, that she was induced to send Andy on the

rafting trip “by Moki Mac’s direct solicitation, which included statements made in

Moki Mac’s brochures and in the release” sent to her in Texas for her signature.

Id. at 585.

Moki Mac filed a special appearance, which the trial court overruled. Id. at

573. The court of appeals affirmed, holding there was specific jurisdiction over

Moki Mac because the misrepresentation claim “arose from, and related to, Moki

Mac’s purposeful contacts with Texas.” Id. The Supreme Court reversed, holding

the trial court lacked specific jurisdiction over Moki Mac, and remanded to the

court of appeals to determine whether general jurisdiction existed. Id. at 588. In

holding the trial court lacked specific jurisdiction over Moki Mac, the Supreme

Court focused on the operative facts of the suit, noting “[t]he events on the trail

and the guides’ supervision of the hike will be the focus of the trial, will consume

most if not all of the litigation’s attention, and the overwhelming majority of the

evidence will be directed to that question.” Id. at 585. The court held the alleged

misrepresentation by Moki Mak in Texas was “not the subject matter of the case

. . . nor [was] it related to the operative facts of the negligence action.” Id.

(quoting Rush v. Savchuk, 444 U.S. 320, 329 (1980)). The court held, “Whatever

connection there may be between Moki Mac’s promotional materials sent to Texas

28 and the operative facts that led to Andy’s death, we do not believe it is sufficiently

direct to meet due-process concerns.” Id. The court continued:

Moki Mac’s promotional representations, while theoretically related to Andy’s injury on the hiking trail in the sense that but for them he might not have been there, are not sufficiently related to the operative facts underlying Andy’s injury for which the [plaintiffs] seek recovery in wrongful death to sustain the exercise of specific jurisdiction.

Id. at 588.19

The same is true here. While the Contracts between MMA and Velawcity

are “theoretically related” to Appellants’ barratry claims in that, but for the

Contracts, Appellants would not have been allegedly solicited, the Contracts are

not “sufficiently related to the operative facts” underlying Appellants’ barratry

claims to justify the exercise of specific jurisdiction.20 The operative facts

19 Appellants’ attempts to distinguish Moki Mac from two of this Court’s cases are unavailing. Turner Specialty Servs., LLC v. Horn, No. 01-22-00031-CV, 2022 WL 16640624, at *9 (Tex. App.—Houston [1st Dist.] Nov. 3, 2022, pet. denied) (mem. op.) involved “alleged Texas-based conduct in providing improper safety training,” which was the basis for the defendant’s liability. But the basis for Velawcity’s alleged liability is the purported solicitation of Appellants in Louisiana. Thus, Turner is inapplicable. And Aloysius v. Kislingbury, No. 01-09- 00365-CV, 2010 WL 987745 (Tex. App.—Houston [1st Dist.] Mar. 18, 2010, no pet.) (mem. op.) is similarly inapposite because it is “directly related to Aloysius’ alleged embezzlement of funds in Texas.” Id. at *8. 20 See generally Rush v. Savchuk, 444 U.S. 320, 329 (1980) (holding insurer’s place of business was not relevant in jurisdictional analysis involving car accident in other state because auto insurance policy was “not the subject matter of the case, [] nor [wa]s it related to the operative facts of the negligence action. The contractual arrangements between the defendant and the insurer pertain only to the conduct, not the substance of the litigation, and accordingly do not affect the court’s jurisdiction unless they demonstrate ties between the defendant and the forum”).

29 underlying Appellants’ claims do not concern the terms of the Contracts, but rather

Velawcity’s alleged solicitation of Appellants in Louisiana for MMA to handle

their property insurance claims in Louisiana. The focus of the litigation against

Velawcity will thus involve determination of who was solicited, how the

solicitation occurred, where it occurred, and what Appellants were told to induce

them to become MMA clients. All these inquiries involve conduct in Louisiana.

Velawcity’s contractual relationship with MMA is thus not “sufficiently related to

the operative facts” underlying Appellants’ claims.

Our opinion in DWB Consulting, LLC v. Ratliff, No. 01-19-00867-CV, 2020

WL 4516989 (Tex. App.—Houston [1st Dist.] Aug. 6, 2020, no pet.) (mem. op.) is

also instructive. Benjamin Ratliff, a Mississippi resident, sued DWB, a Louisiana

company, and three other companies in connection with injuries he allegedly

sustained while working on an inland barge in Louisiana. 2020 WL 4516989, at

*1. Among the defendants was Texas-based Hilcorp Energy Company. Id.

Hilcorp and DWB had a contract for DWB to provide consulting services outside

of Texas. Id. Ratliff alleged that DWB acted as Hilcorp’s agent and oversaw

Hilcorp’s Louisiana operations. Id. Ratliff filed suit in Texas court for damages

under the Jones Act,21 Texas common law, and general maritime law, alleging the

defendants’ negligence and gross negligence caused his injuries. Id. DWB filed a

21 46 U.S.C. § 30104.

30 special appearance. Id. at *2. Ratliff argued in opposition to the special

appearance that DWB conducted “exclusive” business with a Texas citizen,

worked for a Texas citizen, consistently communicated with a Texas citizen, and

benefited from conducting business in Texas. Id. DWB argued it lacked minimum

contacts with Texas because “its only contact, a contract with a Texas company to

provide consulting services outside of Texas, [wa]s not substantially connected to

Ratliff’s alleged injuries while lifting a heavy object” on the Louisiana barge. Id.

at *1. The trial court denied the special appearance. Id.

On appeal, we held that even if DWB had “purposefully availed itself of the

privilege of conducting activities in Texas by entering into a consulting contract

with a Texas company from which DWB derived all of its income over a four-year

period,” Texas courts could exercise personal jurisdiction over DWB only if its

“purposeful contact [wa]s substantially connected to the operative facts of Ratliff’s

negligence and gross negligence claims against DWB.” Id. at *5.22 Noting that the

focus of the trial would be on DWB’s actions and conduct on the barge where

Ratliff was allegedly injured, rather than on DWB’s contract with Hilcorp, we

explained that while DWB owed contractual obligations to Hilcorp, the contract

“had nothing to do with Ratliff’s lifting of heavy objects on the [barge] and, 22 Unlike the present case, the Hilcorp-DWB contract was not in the appellate record. DWB Consulting, LLC v. Ratliff, No. 01-19-00867-CV, 2020 WL 4516989, at *6 (Tex. App.—Houston [1st Dist.] Aug. 6, 2020, no pet.) (mem. op.). That does not change our analysis, however.

31 therefore, the contract [wa]s not substantially connected to [his] personal injury

lawsuit.”23 Id. at *6. We relied on Moki Mac, noting that “[j]ust as the operative

facts leading to Andy’s death in Arizona were not substantially connected to Moki

Mac’s extensive advertising of its trips to Texas residents, the operative facts

leading to Ratliff’s alleged injury from lifting heavy objects on a vessel in

Louisiana [were] not substantially connected to DWB’s consulting contract with a

Texas company.” Id. at *7.

Similarly, we hold that for jurisdictional purposes, Velawcity’s contractual

relationship with MMA is not substantially connected to Appellants’ claims or

alleged injuries, which occurred if at all in Louisiana—the only place they were

solicited by Velawcity and the only place where they claim they suffered damage

23 There was no evidence in DWB Consulting, LLC that DWB “oversaw, managed, or supervised” Ratliff. Id. Here, Appellants argue that pursuant to the Contracts, MMA directed Velawcity’s activities in Louisiana. Even if that were the case, MMA’s conduct in directing Velawcity’s actions in Louisiana does not inform our jurisdiction analysis. In analyzing whether Velawcity is subject to specific jurisdiction in Texas, we focus on Velawcity’s purposeful contacts with the forum state, not on Velawcity’s contacts with persons who reside in the forum state or the unilateral acts of third parties. See TV Azteca v. Ruiz, 490 S.W.3d 29, 42 (Tex. 2016) (explaining that jurisdictional analysis focuses on defendant’s contacts with forum state and not on defendant’s contacts with people who reside there); Wilco Farmers v. Carter, 558 S.W.3d 197, 206 (Tex. App.—Texarkana 2018, no pet.) (“The unilateral actions of another party, or of a third person, are not relevant considerations when analyzing specific jurisdiction.”). We further note that there is no allegation MMA directed or controlled any conduct by Velawcity in Texas. 32 as a result. The operative facts of Appellants’ claim turn on the solicitation of

Appellants in Louisiana, not on the terms of Velawcity’s contract with MMA.24

C. Appellants’ Authorities

Appellants rely extensively in their special appearance response and on

appeal on our opinion in Cheatham v. Pohl, 690 S.W.3d 322 (Houston [1st Dist.]

2022, pet. granted). They argue that under the Texas civil barratry statute,

“improperly solicited clients and potential clients can bring a civil barratry cause of

action against those who solicited them and recover fees due under a contract of

representation as well as actual damages, penalties, and attorney’s fees.” Id. at 331

(citing TEX. GOV’T CODE § 82.0651(a-d)). They argue that the statute makes “any

person who committed barratry” in violation of Texas law liable to the unlawfully

solicited person. They thus conclude that Velawcity’s contacts with MMA form

the operative facts of the litigation.

Cheatham is not a special appearance case. There is no analysis in

Cheatham as to whether a Texas court has personal jurisdiction over a nonresident

defendant. Rather, Cheatham addresses, among other things, whether the Texas

24 See also Blair Commc’ns, Inc. v. SES Survey Equip. Servs., Inc., 80 S.W.3d 723, 730 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (“We do not believe that initiating contract discussions with a Texas resident, and subsequently entering into a contract, in addition to making payment in Texas, are sufficient contacts with Texas when the entire substance of the contract is performed outside the state.”).

33 civil barratry statute applies to activity outside of Texas.25 That issue has no

bearing on our analysis here. Further, Cheatham does not involve a suit against a

nonresident company for alleged solicitation of clients on behalf of defendant law

firms outside of Texas. The only parties in Cheatham were wrongful-death

claimants from Louisiana and Arkansas and their Texas attorneys, whom they sued

for barratry. 690 S.W.3d at 325.

Nor are the other cases on which Appellants rely persuasive. For instance,

they rely on Billingsley Parts & Equip., Inc. v. Vose, 881 S.W.2d 165 (Tex. App.—

Houston [1st Dist.] 1994, writ denied) for the proposition that Velawcity

purposefully availed itself of the privilege of conducting business in Texas by

“acting as essentially a sales agent for a Texas law firm, receiving payments from

that Texas firm, and regularly communicating with that Texas firm.” But in

Billingsley, the contract at issue provided for the application of Texas law, the

record reflected the nonresident defendant first approached the Texas company to

solicit work, which led to the contract at issue, and the case involved the Texas

company’s contractual claim against the defendant. See id. at 169–70. The

Contracts at issue here do not have a choice-of-law clause, the record is silent as to

25 In citing Cheatham v. Pohl, 690 S.W.3d 322 (Houston [1st Dist.] 2024, pet. granted), Appellants argue the merits of their case, which we do not address in a special appearance analysis. See Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 791–92, 798 (Tex. 2005) (stating special appearance involves consideration of jurisdiction only, not merits or liability).

34 who approached whom first—Velawcity or MMA—about entering into the

Contracts, and the case involves tort claims by Louisiana residents against

Velawcity. While Appellants argued in their response that Velawcity signed the

Contracts in Texas, the record is silent on that issue.

Appellants’ reliance on Old Republic Nat’l Title Ins. Co. v. Bell, 549 S.W.3d

550 (Tex. 2018) also is misplaced. In Old Republic, a title insurance company that

alleged that transfers between a Texas resident and a Louisiana resident were

fraudulent filed suit under the Texas Uniform Fraudulent Transfers Act. 26 Id. at

556. Appellants cite Old Republic for the proposition that the transfer of “Texas-

based assets to an out-of-state defendant” can confer personal jurisdiction because

such transfers “derive profit from Texas and create continuing connection[s] with

the state.” But the Supreme Court in Old Republic distinguished the transfer of

non-fungible assets from the transfer of money, noting “the mere act of accepting

the transfer of money drawn on a Texas bank is ‘of negligible significance for

purposes of determining whether [a foreign defendant] had sufficient contacts in

Texas.’” Id. at 564 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall,

466 U.S. 408, 416–17 (1984)). The Supreme Court held Texas courts did not have

personal jurisdiction over the Louisiana resident even though she (1) knowingly

spoke with a Texas resident at least weekly before the suit was filed; (2) made

26 TEX. BUS. & COM. CODE § 24.001, et seq.

35 eighty-one fund transfers for a total of more than $240,000 to a Texas bank

account over four years; (3) knew the funds were going to a Texas resident and

Texas-based bank account; (4) held a lien on three vehicles in Texas; and

(5) knowingly accepted and deposited sales proceeds from a Texas resident who

purchased real property in Texas and transferred it back to her. Id. at 560. She

argued she had never been a Texas resident, engaged in business in Texas,

committed a tort in Texas, and did not maintain a place of business in Texas. Id. at

557.

Finally, we distinguish Retamco Operating, Inc. v. Republic Drilling Co.,

278 S.W.3d 333 (Tex. 2009). In that case, Retamco, a Texas corporation, sued

Republic Drilling, a California corporation, alleging another Texas corporation

involved in the litigation fraudulently transferred Texas oil and gas interests to

Republic Drilling, violating the Texas Uniform Fraudulent Transfer Act. Id. at

336. Republic Drilling filed a special appearance, which the trial court overruled.

Id. at 337. The Supreme Court ultimately held that Republic Drilling subjected

itself to jurisdiction in Texas. Id. In its analysis, the Supreme Court noted that

Republic Drilling “purposefully took assignment of Texas real property.” Id. at

339. The court stated:

Republic, by taking assignment of Texas real property, reached out and created a continuing relationship in Texas. Under the assignment, it is liable for obligations and expenses related to the interests. This ownership also allows Republic to “enjoy . . . the benefits and 36 protection of [Texas laws.]” Unlike personal property, Republic’s real property will always be in Texas, which leaves no doubt of the continuing relationship that this ownership creates.

Id. at 339 (internal citations omitted). The court noted that the “purchase and

ownership of real property” may involve “many contacts over a long period of

time,” leading to “certain continuing obligations” such as valuation and tax issues

and expenses incurred in maintaining the property interests. Id. Finally, the court

concluded that Republic Drilling sought a “benefit, advantage or profit in Texas,”

as it had the right to enforce warranties and covenants in Texas related to the real

property. Id. at 340.27 Like Old Republic, Retamco turned on the transfer of real

property, which did not occur in the present case.28

Because we conclude that Velawcity did not purposefully avail itself of the

privilege of conducting activities in Texas by entering into the Contracts and

receiving payments from MMA, and that even if it had, there is no substantial

connection between Velawcity’s purported contacts with Texas and the operative

facts of the litigation, we hold the trial court lacked specific jurisdiction over

27 As noted, the Texas Supreme Court has drawn a distinction between the transfer of money and non-fungible assets such as real property. See Old Republic, 549 S.W.3d at 563-64 (distinguishing Retamco in personal jurisdiction analysis because it “involve[d] the transfer of Texas-based assets to an out-of-state defendant, rather than the transfer of money, a fungible asset”). 28 The Supreme Court noted that the determining facts in Retamco were “the transfers of Texas-based business operations and real property, which derive profit from Texas and create continuing connection with the state.” Old Republic, 549 S.W.3d at 564.

37 Velawcity.

We overrule Appellants’ first issue.29

Motion for Continuance

In its second issue, Appellants argue the trial court abused its discretion in

denying their motion to continue the special appearance hearing to allow them to

conduct additional jurisdictional discovery. Under Texas Rule of Civil Procedure

120a(3), a trial court may continue a special appearance hearing to allow discovery

“[s]hould it appear from the affidavits of a party opposing the motion that he

cannot . . . present by affidavit facts essential to justify his opposition[.]” TEX. R.

CIV. P. 120a(3).

We review a trial court’s denial of a motion for continuance for an abuse of

discretion. See BMC Software, 83 S.W.3d at 800 (“This Court will not disturb a

trial court’s order denying a motion for continuance unless the trial court has

committed a clear abuse of discretion.”) (citing Villegas v. Carter, 711 S.W.2d

29 Given our disposition, we need not address the fair-play-and-substantial-justice prong of personal jurisdiction. See Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 661 n.10 (Tex. 2010). That is because the fair-play-and-substantial- justice analysis “is contingent upon a finding that minimum contacts have been purposefully established.” Commonwealth Gen. Corp. v. York, 141 S.W.3d 840, 846 (Tex. App.—Corpus Christi–Edinburg 2004), rev’d on other grounds, 177 S.W.3d 923 (Tex. 2005). Only after it has been determined that the nonresident defendant purposefully established minimum contacts with the forum state are the contacts evaluated to determine whether the assertion of personal jurisdiction comports with fair play and substantial justice. Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex. 1991).

38 624, 626 (Tex. 1986)). An abuse of discretion occurs when the trial court “reaches

a decision so arbitrary and unreasonable as to amount to a clear and prejudicial

error of law.” Id. (citing Johnson v. Fourth Court of Appeals, 700 S.W.2d 916,

917 (Tex. 1985) (orig. proceeding)).

Appellants filed suit on June 21, 2023, and Velawcity filed its special

appearance on July 24, 2023. Appellants responded to the special appearance and

filed their alternative request for a continuance seven months later, on February 16,

2024. Appellants did not explain in their motion why—in the seven months the

special appearance had been pending—they had not requested jurisdictional

During the special appearance hearing, Velawcity opposed the requested

continuance arguing that its special appearance had been on file for seven months

and Velawcity had not received any request for discovery or stipulations.

Appellants responded they had not engaged in discovery at that point because they

were waiting until all the defendants had been served. At the time of the special

appearance hearing, all of the defendants had filed an answer. Appellants’ counsel

argued he was about to begin discovery when the special appearance hearing was

set.

Appellants explained they wanted to depose Van De Motter to ask him about

the Contracts, including the number of communications Velawcity had with MMA

39 over the eight-month period during which the Contracts were executed, and about

Velawcity’s business. They argued they would limit the deposition to address

jurisdictional issues “with the caveat that . . . if it’s a specific jurisdictional issue to

establish that they committed a tort in whole or in part in Texas, sometimes you get

into the merit of what that tort was.”

The trial court held jurisdictional discovery was not necessary “because

there’s no dispute that the allegedly improperly solicited individuals are not Texas

residents. You’re basing [jurisdiction] on the contract that says this defendant is an

agent of the Texas attorneys.” Appellants argued the Contracts formed the main

basis of their claims against Velawcity, but that if there were “constant

communications going back and forth” between Velawcity and MMA about the

alleged barratry, that could give rise to specific jurisdiction “over and above just

the contract themselves.” Appellants subsequently conceded, however, that “the

contract is what gives rise to these barratry claims.”

In granting the special appearance and denying the motion for continuance,

the court explained:

[I]t seems that the whole solicitation occurred outside of Texas. The Court would view it differently if Texas residents were called and solicited that would be a different issue. . . . The defendant has no offices in Texas or no regular pattern of doing business. I mean, just the fact that they called this marketing company, the Texas defendants and they entered into a contract but none of the alleged tort[i]ous activity actually occurred in Texas. It occurred in Louisiana when these individuals were solicited. . . . I just don’t see why you would 40 need any specific [jurisdictional] discovery when the basis of your argument is the contract which is in evidence.

Given Appellants’ argument that the Contracts, which were already in

evidence, formed the basis of their specific jurisdiction argument, their lack of an

explanation as to how the proposed deposition could establish that Velawcity

committed a tort against Appellants in Texas, and in light of their delay in seeking

discovery, we hold the trial court did not abuse its discretion in denying

Appellants’ motion for continuance to discover more information concerning the

formation of the Contracts and the parties’ communications leading up to the same.

See BMC Software, 83 S.W.3d at 800–01 (holding trial court did not abuse

discretion in overruling objection to special appearance hearing and denying

plaintiff’s motion for continuance to conduct discovery when hearing was held

more than seven months after special appearance was filed and record did not show

plaintiff filed motion to compel or otherwise attempted to obtain discovery that

defendants refused to provide); Windsor v. Round, 591 S.W.3d 654, 669 (Tex.

App.—Waco 2019, pet. denied) (holding trial court did not abuse discretion in

denying continuance of special appearance to obtain discovery “that far exceeded

discovery of jurisdictional facts”).

We overrule Appellants’ second issue.

41 Conclusion

We affirm the trial court’s order sustaining Velawcity’s special appearance

and dismissing Appellants’ claim for lack of jurisdiction.

Veronica Rivas-Molloy Justice

Panel consists of Justices Rivas-Molloy, Johnson, and Dokupil.