Wright v. Sage Engineering, Inc.

137 S.W.3d 238, 2004 Tex. App. LEXIS 3287, 2004 WL 744778
CourtCourt of Appeals of Texas
DecidedApril 8, 2004
Docket01-03-01018-CV
StatusPublished
Cited by109 cases

This text of 137 S.W.3d 238 (Wright v. Sage Engineering, Inc.) 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
Wright v. Sage Engineering, Inc., 137 S.W.3d 238, 2004 Tex. App. LEXIS 3287, 2004 WL 744778 (Tex. Ct. App. 2004).

Opinion

OPINION

LAURA CARTER HIGLEY, Justice.

A.C.S. Wright (“Wright”) appeals the denial of his special appearance 1 in a suit brought against him by appellees Sage Engineering, Inc., John S. Templeton, III, and Ronald L. Boggess. In addressing Wright’s three issues raised on appeal, we *244 determine (1) whether Wright properly asserted in the trial court his complaint that appellees failed to serve him in accordance with the Hague Convention, (2) whether Wright had the requisite minimum contacts with Texas for the trial court to exercise personal jurisdiction over him, and (3) whether the exercise of personal jurisdiction over Wright comports with traditional notions of fair play and substantial justice.

We affirm.

Factual and Procedural Background

Wright is a citizen and resident of Switzerland. Sage Engineering, Inc. (“SEI”) is a Texas corporation formed in 1995 with its principal place of business in Houston. SEI designs, manufactures, and sells miniature penetrometer testing equipment used in offshore oilfield production. The founding shareholders of SEI were John S. Templeton, III, (“Templeton”), Ronald L. Boggess (“Boggess”), and Sage Holding AG (“Sage Holding”).

Wright is the sole director of Sage Holding. In November 2000, Wright signed an agreement for the sale of Sage Holding to Thales, Inc. Thales eventually merged Sage Holding into Thales Geosolutions, Inc. SEI, Templeton, and Boggess (collectively referred to as “appellees”) sued Wright, Sage Holding, and several Thales entities. 2 Appellees allege that the defendants stole their design technology related to the miniature penetrometer testing equipment. The claims asserted by appel-lees included misappropriation of trade secrets, breach of fiduciary duty, unjust enrichment, breach of contract, conversion, conspiracy, fraud, and fraudulent inducement.

In their original petition, appellees made the following factual allegations:

• Boggess and Templeton provided SEI with their design technology for miniature penetrometer testing equipment.
• The design technology is the trade secrets and confidential information of the appellees.
• SEI was “the exclusive provider of the miniature penetrometer testing equipment to Sage Holding” and Sage Holding’s corporate affiliates.
• Sage Geodia, a corporate affiliate of Sage Holding, purchased equipment and parts from SEI. Rather, than using this equipment to service their clients, Sage Geodia and “other affiliates” “reverse engineered” and duplicated the equipment and technology.
• Wright negotiated the purchase of Sage Holding by Thales. Under the terms of this agreement, Sage Holding agreed to provide Thales with “the technology, trade secrets, confidential information and other property and rights” of appellees.
• The Sage parties and Thales agreed to keep the negotiations secret from SEI and to exclude SEI from the corporate acquisition.
• Thales purchased Sage Holding in November 2000. At that time, Thales “folded” Sage Holding and SEI’s misappropriated technology into Thales Geosolutions, which then used SEI’s technology, i.e., trade secrets, to market and sell miniature penetrometer testing equipment.

Wright filed a special appearance asserting that he was not amenable to process issued by a Texas court. Wright argued that the trial court lacked personal juris *245 diction over him because (1) appellees’ failed to serve him through the Hague Convention; (2) Wright lacked the requisite minimum contacts with Texas to satisfy the requirements of due process; and (3) the trial court’s exercise of personal jurisdiction over him does not comport with traditional notions of fair play and substantial justice. The trial court denied Wright’s special appearance. This interlocutory appeal followed.

Defective Service of Process

In his first issue, Wright contends that the trial court should have granted his special appearance on the basis that appel-lees failed to serve him with process in compliance with the Hague Convention. Appellees counter that Wright’s special appearance was properly denied on this basis because, if he thought that service was defective, Wright should have raised that complaint in a motion to quash, not in a special appearance. 3

A special appearance is a specific procedural mechanism to litigate one issue: that is, a special appearance is “for the purpose of objecting to the jurisdiction of the court over the person or property of the defendant on the ground that such party or property is not amenable to process issued by the courts of this State.” Tex.R. Civ. P. 120a; see also Tex. Commerce Bank N.A. v. Interpol 1980 Ltd. P’ship, 703 S.W.2d 765, 775 (Tex.App.-Corpus Christi 1985, no writ). The rule applies only when a defendant contends he is not amenable to process. See Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 201-02 (Tex.1985); Oliver v. Boutwell, 601 S.W.2d 393, 395 (Tex.Civ.App.-Dallas 1980, no writ). The words “not amenable to process issued by the courts of this state” mean that the special appearance is available solely to establish that the Texas court cannot, under the federal and state constitutions and the appropriate state statutes, validly obtain jurisdiction over the person or the property of the defendant. Kawasaki, 699 S.W.2d at 202.

Our supreme court held in Kawasaki that defective service of process must be challenged by a motion to quash rather than by a special appearance. Id. This is because a curable defect in service of process does not defeat a nonresident’s amenability to the court’s process and serves only to provide the non-resident defendant with more time to answer. See id. at 202; see also Tex.R. Civ. P. 122.

Wright acknowledges the holding in Kawasaki but argues that it has been called into question by the Unites States Supreme Court’s decision in Murphy Bros. v. Michetti Pipe Stringing, 526 U.S. 344, 346, 119 S.Ct. 1322, 1325, 143 L.Ed.2d 448 (1999). In Murphy Bros., the court held that mere receipt of a complaint unattended by any formal service did not trigger a defendant’s time to remove a case from state court. Murphy Bros., 526 U.S. at 347-48, 119 S.Ct. at 1325. Wright cites Murphy Bros, for the proposition that “[a]n individual or entity named as a defendant is not obliged to engage in litigation unless notified of the action, and brought under a court’s authority by formal process.” Murphy Bros., 526 U.S. at 347-48, 119 S.Ct. at 1325.

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Bluebook (online)
137 S.W.3d 238, 2004 Tex. App. LEXIS 3287, 2004 WL 744778, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wright-v-sage-engineering-inc-texapp-2004.