Winnsboro Auto Ventures, LLC v. Santander Consumer USA, Inc.

Court of Appeals of Texas·Decided April 19, 2018·No. 05-17-00895-CV·Published

Opinion

AFFIRM; and Opinion Filed April 19, 2018.

In The

Court of Appeals

Fifth District of Texas at Dallas No. 05-17-00895-CV

WINNSBORO AUTO VENTURES, LLC, Appellant V.

SANTANDER CONSUMER USA, INC., Appellee

On Appeal from the 162nd Judicial District Court Dallas County, Texas

Trial Court Cause No. DC-16-15149

MEMORANDUM OPINION

Before Justices Bridges, Myers, and Schenck Opinion by Justice Schenck Winnsboro Auto Ventures, LLC (Winnsboro) appeals the trial court’s order denying its

special appearance in a suit instituted by Santander Consumer USA, Inc. (Santander) in Dallas County. In two issues, Winnsboro argues it has insufficient contacts with Texas to support jurisdiction in this case. We conclude that Winnsboro has sufficient minimum contacts with Texas to support specific jurisdiction and the exercise of jurisdiction over Winnsboro does not offend traditional notions of fair play and substantial justice. Accordingly, we affirm the trial court’s order denying Winnsboro’s special appearance and remand the case to the trial court for further proceedings consistent with this opinion. Because the dispositive issues in this case are settled in law, we issue this memorandum opinion. TEX. R. APP. P. 47.4.

BACKGROUND

This case involves a dispute between Santander, an Illinois corporation with its principal place of business and headquarters in Dallas County, Texas, and automobile dealership Winnsboro, a Louisiana corporation with its principal place of business in Louisiana. Santander is in the business of purchasing automobile retail installment sales contracts from dealers like Winnsboro. On or about April 16, 2014, Winnsboro and Santander entered into a Non–Recourse Master Dealer Agreement (Agreement) whereby Winnsboro was entitled, but not obligated, to sell automobile retail installment sales contracts to Santander.

Under the Agreement, Winnsboro had the option of submitting a proposal, including terms and conditions, under which it would consider selling and assigning an installment sales contract to Santander. After reviewing Winnsboro’s proposed terms and conditions and the applicable loan documentation, Santander could elect to purchase the installment sales contract. Winnsboro, however, controlled final approval of the sale, and could refuse the transaction notwithstanding Santander’s agreement to purchase the installment sales contract. The Agreement had no specified term, and was to be governed by and construed in accordance with Texas law. Winnsboro agreed to indemnify Santander in the event of claims arising out of Winnsboro’s breach of or conduct under the Agreement or the installment sales contracts.

Pursuant to the Agreement, Winnsboro solicited and sold numerous installment sales contracts to Santander. This lawsuit arises out of Winnsboro’s alleged breach of the Agreement as it relates to one installment sales contract arising from a vehicle Winnsboro sold (and Santander financed) with a value of $33,165.33 (the “Contract”). Specifically, Santander alleges Winnsboro breached the Agreement by failing to repurchase the Contract after it misrepresented the condition of the vehicle and the equipment options included therewith, which resulted in the purchaser returning the vehicle and demanding a refund. Santander obtained a no-answer default judgment

against Winnsboro. Thereafter, Winnsboro filed a special appearance and moved for a new trial subject to its special appearance.

Winnsboro supported its special appearance with the affidavit of Brett Oubre, Winnsboro’s president and manager, generally disavowing having done business in Texas, and detailing the nature of Winnsboro’s business. Santander responded by presenting the affidavit of Benny Cherry, the Vice President–Dealer Operations for Santander (the Cherry Affidavit). The Cherry Affidavit states, in pertinent part, that Santander’s corporate headquarters is in Dallas, Texas, and describes the formation of the Agreement, the parties’ relationship under the Agreement, the procedures for executing the Agreement, and Winnsboro’s solicitation and sale to Santander of 736 separate retail installment contracts, including the Contract. Attached to the Cherry Affidavit was a copy of the fully executed Agreement and a copy of the retail installment sales contract at issue in this case. The trial court denied Winnsboro’s special appearance and ordered a new trial. This interlocutory appeal followed. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(7) (West Supp. 2016).

STANDARD OF REVIEW

Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law. Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 790-91 (Tex. 2005). Consequently, we review a trial court’s determination of a special appearance de novo. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). If, as is the case here, the trial court does not issue findings of fact and conclusions of law with its special appearance ruling, we imply all findings of fact necessary to support its ruling that are supported by the evidence. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002); Lewis v. Indian Springs Land Corp., 175 S.W.3d 906, 913 (Tex. App.—Dallas 2005, no pet.). In this case, the trial court impliedly found the Texas long-arm statute permits the exercise of jurisdiction over Winnsboro, Winnsboro established purposeful “minimum contacts” with the forum state, and that

the exercise of jurisdiction over Winnsboro comports with “traditional notions of fair play and substantial justice.”

DISCUSSION

I. Personal Jurisdiction In its first issue, Winnsboro argues it is not subject to personal jurisdiction in Texas. Texas courts may exercise personal jurisdiction over a nonresident defendant “when the state’s long-arm statute authorizes such jurisdiction and its exercise comports with due process.” Cornerstone Healthcare Grp. Holding, Inc. v. Nautic Mgmt. VI, L.P., 493 S.W.3d 65, 70 (Tex. 2016). The Texas long-arm statute allows jurisdiction over a nonresident that does business in Texas. TEX. CIV. PRAC. & REM. CODE ANN. § 17.042 (West 2015). Among other acts, the Texas long-arm statute provides that contracting with a “Texas resident,” where either party is to perform the contract in whole or in part in Texas, constitutes “doing business” in this state. Id. (emphasis added); Moki Mac, 221 S.W.3d at 574.

Winnsboro urges that because Santander is an Illinois Corporation it is not a Texas resident entitled to utilize the long-arm statute to sue Winnsboro in Texas. While the long-arm statute gives examples of actions that constitute doing business in the state, including contracting with a “Texas resident” under stated circumstances, the statute does not define the term “Texas resident.” Winnsboro does not cite any language in the statute or case law holding a corporation based in Texas but incorporated under another state’s laws, such as Santander, cannot be a resident of Texas. Rather, Winnsboro seizes on the long-arm statute’s definition of “nonresident,” for purposes of describing defendant’s within its reach, as including a foreign corporation, which it would then apply to the statute’s reference to the act of contracting with a Texas resident. It also points us to the Texas Business Organizations Code and its definition of “foreign entity” as “an organization formed under, and the internal affairs of which are governed by, the laws of a

jurisdiction other than this state.” Borrowing from that definition, Winnsboro urges that Santander is not a “Texas resident” and, thus, cannot rely on the long-arm statute to establish jurisdiction in this case. See TEX. CIV. PRAC. & REM. CODE ANN. § 17.041(2); TEX. BUS. ORGS. CODE ANN. § 1.002(28) (West Supp. 2017). We disagree with Winnsboro.

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Winnsboro Auto Ventures, LLC v. Santander Consumer USA, Inc., (Tex. Ct. App. 2018).

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