Yujie Ren v. Anu Resources, LLC

502 S.W.3d 840, 2016 Tex. App. LEXIS 10401, 2016 WL 5342798
Court of Appeals of Texas·Decided September 22, 2016·No. NO. 14-16-00035-CV·Published·Cited by 12 cases

Opinion

OPINION

Martha Hill Jamison, Justice

Today, we again confirm that a defendant cannot evade jurisdiction in Texas simply by contending that his contacts with Texas were made in a representative capacity when that defendant allegedly committed intentional torts in Texas. In one issue, appellant Yujie Ren challenges the trial court’s order denying his special appearance, primarily because he alleges that all of his contacts with Texas were made in a representative capacity. We affirm.

Background

Appellee ANU Resources, LLC is in the business of acquiring, developing, and operating oil and gas assets. Robert Reyes contacted Lisa Qualls at ANU, advised her that he had located an opportunity to acquire property for oil and gas production in West Texas, and asked her to look for potential investors. This potential project became known as “Ground Zero.” Qualls passed the Ground Zero description to Jim Jeffrey, who agreed to assist in finding investors from China. Jeffrey brought in Changlin Wu of Longwoods Resources, LLC, a company with locations in Beijing, China, and Chicago, Illinois. ANU and Longwoods entered into a “Memorandum of Understanding,” resolving to “jointly participate from time to time in [exploration and production] opportunities around the world.” Among other things, Long-woods agreed to “[e]xchange information with [ANU] relating to all issues known to [Longwoods] about potential investors and/or lenders as it relates to” exploration and production opportunities.

Wu asked Qualls to conduct a meeting to discuss such opportunities, including Ground Zero, with potential investors from China. Ren attended the meeting as a representative of several Chinese entities. *845 Wu subsequently encouraged Ren to acquire oil and gas leases for Ground Zero. “Technical leadership” and “business leadership” teams were created to manage the “economic and development strategy for pursuing Ground Zero.” ANU was excluded from these teams, but Ren was on the business leadership team. Ren was also identified as an “initial confirmed shareholder” in Ground Zero.

Harmonia Petroleum Corporation was incorporated in Texas. A “Final Sale and Restated Purchase Agreement” for the sale of the Ground Zero oil and gas leases was executed, with Harmonia as the buyer. Ren signed the agreement on behalf of Harmonia as its CEO. 1

ANU filed suit against Longwoods, Har-monía, Reyes, Ren, Wu, and Jeffrey, alleging, among other things, that (1) Long-woods, Wu, Jeffrey, and Reyes .conspired to eoopt the Ground Zero opportunity for themselves and away from ANU; (2) Long-woods procured investors for Ground Zero; (3) the investors attended presentations about Ground Zero put on by ANU; (4) without informing ANU, Longwoods and its investor group acquired Ground Zero in violation of the Memorandum of Underr standing; and (5) the investor group formed Harmonia to acquire Ground Zero to the exclusion of ANU. ANU brought claims against Longwoods for various breaches of contract and breaches of fiduciary duties and against all the defendants for fraud, tortious interference, and conspiracy to commit various torts.

Ren filed a special appearance, asserting that (1) ANU did not meet its burden to plead sufficient jurisdictional facts as to Ren; (2) Ren is not subject to personal jurisdiction in Texas under the fiduciary shield doctrine because he did not conduct business in Texas in his individual capacity; (3) Ren does not have sufficient jurisdictional contacts with Texas in his individual capacity to give rise to- specific jurisdiction; (4) Texas courts do not have general jurisdiction over Ren; and (5) the trial court’s exercise of jurisdiction over Ren would offend traditional notions of fair play and substantial justice. The trial court denied Ren’s special, appearance.

Discussion

On appeal, Ren challenges the trial court’s denial of his special appearance on the grounds that (1) ANU did not plead sufficient jurisdictional facts to invoke the jurisdiction of Texas courts; (2) the fiduciary shield doctrine prevents Ren from being subject to specific jurisdiction in Texas; (3) Ren does not have sufficient contacts with Texas in his individual capacity to subject him to specific jurisdiction in Texas; 2 (4) ANU’s claims do not establish specific jurisdiction over Ren; (5) Texas courts do not have general jurisdiction over Ren; and (6) exercising jurisdiction over Ren would offend traditional notions of fair play and substantial justice in violation of constitutional due process.

I. Sufficient Jurisdictional Facts Alleged

A plaintiff bears the initial burden of alleging facts sufficient to bring a nonresident defendant within the terms of the Texas long-arm statute. Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 149 (Tex.2013). The Texas long-arm statute allows the exercise of personal jurisdiction over a nonresident defendant *846 who “commits a tort in whole or in part in this state.” Tex. Civ. Prac. & Rem. Code § 17.042(2). In conducting our review, we accept as true the allegations in the petition. Max Protetch, Inc. v. Herrin, 340 S.W.3d 878, 883 (Tex.App,-Houston [14th Dist.] 2011, no pet.).

Ren argues that ANU’s second amended petition “lacks sufficient factual allegations to invoke jurisdiction under the Texas long-arm statute against Mr. Ren individually.” The live petition at the time the trial court denied the special appearance, however, was the third amended petition, which was filed after Ren filed his special appearance. A plaintiff may amend its petition to include necessary jurisdictional facts after a special appearance has been filed, which enables the trial court to decide jurisdiction based on evidence rather than allegations. See Kelly v. Gen. Interior Const., Inc., 301 S.W.3d 653, 659 & n. 6 (Tex.2010) (citing Tex. R. Civ. P. 63). Accordingly,- we shall analyze whether ANU pleaded sufficient jurisdictional facts based on the allegations in its third amended petition.

ANU alleged in its third amended petition, among other things:

• Ren was a member of the investor group. In reliance on the Memorandum of Understanding and the representations of Longwoods, ANU disclosed to Longwoods and the investor group “the type of due diligence information and contacts that one would need to know to acquire and develop” Ground Zero.
• Defendants formed Harmonía and excluded ANU. Ren was appointed as the president and a director of Har-monía. Defendants caused Harmonía to acquire the Ground Zero oil and gas leases, using the funding source that ANU had lined up and relying on landmen and consultants who were • identified through discussions with ANU. Ren signed the agreement on behalf of Harmonía.

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Yujie Ren v. Anu Resources, LLC, 502 S.W.3d 840, 2016 Tex. App. LEXIS 10401, 2016 WL 5342798 (Tex. Ct. App. 2016).

502 S.W.3d 840 (Yujie Ren v. Anu Resources, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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