Zack Shahin v. Deyaar Development Corporation USA

367 S.W.3d 274, 2011 WL 7966174, 2011 Tex. App. LEXIS 10157
CourtCourt of Appeals of Texas
DecidedDecember 22, 2011
Docket01-11-00551-CV
StatusPublished
Cited by1 cases

This text of 367 S.W.3d 274 (Zack Shahin v. Deyaar Development Corporation USA) 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
Zack Shahin v. Deyaar Development Corporation USA, 367 S.W.3d 274, 2011 WL 7966174, 2011 Tex. App. LEXIS 10157 (Tex. Ct. App. 2011).

Opinion

OPINION

EVELYN V. KEYES, Justice.

Appellant, Zack Shahin, appeals the trial court’s order denying his special appearance. In two issues, Shahin argues that (1) the trial court cannot exercise long-arm jurisdiction over him because he is being held without trial in a foreign prison and, therefore, has no meaningful access to Texas counsel and (2) the trial court’s exercise of jurisdiction over him does not comport with the due process standards of “fair play and substantial justice.”

We affirm.

Background

Shahin is an American citizen who has resided overseas for a number of years and is currently being held in prison in Dubai, United Arab Emirates (“U.A.E.”). Beginning in 2004, Shahin worked as the CEO of Deyaar Development PJSC (“Dey-aar Dubai”), a real estate development company based in Dubai. Appellee, Dey-aar Development Corporation (“Deyaar”), is a Texas corporation with its principal place of business in Dallas, Texas, and is a wholly owned subsidiary of Deyaar Dubai.

This suit arises out of a real estate transaction in which Deyaar, under Shah-in’s direction, bought a parcel of undeveloped property located at 5000 Richmond Avenue (the “Richmond Property”) in December 2007. Deyaar alleges that Shahin, in coordination with the other defendants, 1 “orchestrated” a “fraudulent scheme” surrounding the sale of this property for a greatly inflated price, which caused Dey-aar “significant losses.” In early 2008, Shahin resigned as the CEO of Deyaar Dubai, and he was arrested in Dubai in March 2008. Shahin asserts that he was held without the ability to communicate with the outside world for several weeks and without official charges being brought against him for over a year.

On October 4, 2010, Deyaar filed suit against Shahin and other defendants alleging fraud, conspiracy to commit fraud, statutory fraud in a real estate transaction, 2 breach of fiduciary duty and other duties, aiding and abetting breach of fiduciary duty, and violations of the Texas Theft Liability Act. 3 Deyaar also sought an injunction freezing Shahin’s assets in the United States.

*278 Deyaar pleaded that Shahin was a Texas resident who could be served either at the jail where he is being held in Dubai or at a property in Harris County. Deyaar further pleaded that all of the remaining defendants were Texas residents. Deyaar alleged that, at the time of the allegedly fraudulent real estate transaction, Shahin was Deyaar Dubai’s CEO and the sole director of Deyaar, that he recommended approval of the transaction to the chairman of Deyaar Dubai, and that the transaction was undertaken in reliance on his recommendation and with his direct involvement. Deyaar further alleged that Shahin personally profited from the allegedly fraudulent real estate transaction in the form of real property transfers from entities related to the seller of the property to Larun Investments, LLC, an entity owned by Shahin, and in renovations to his home located in Houston, Texas, performed by entities related to the seller.

On October 14, 2010, Shahin filed a special appearance to challenge the trial court’s exercise of personal jurisdiction over him. He argued that he was not a Texas resident as alleged by Deyaar and that “the exercise of jurisdiction in this proceeding would not comport with traditional notions of fair play and substantial justice” because he has been held captive in Dubai and, therefore, has “ho practical access to his U.S. attorneys and-there is simply no way for him to meaningfully defend himself in this lawsuit.” Shahin asserted that he “has not lived in Texas since the early 1990s, and before that [he] only lived in Texas for two or three years.” He alleged that he subsequently lived and worked overseas until his arrest in Dubai. He also alleged that his family fled Dubai for Texas without him in 2008 as a result of his problems with the government.

Regarding his imprisonment, Shahin asserted that he “does not have the confidential access to U.S. counsel required by the Fourteenth Amendment” and that “it is unclear if or when ... Shahin’s U.S. counsel ever will gain access” to him. He also stated that his communications channeled though the U.S. State Department would not afford the necessary confidéntiality and that communications made over the prison phones are monitored by the government in Dubai. He further argued that Texas has no substantial interest in this suit because Deyaar Dubai is based in Dubai, and “[t]he fact that [it] has a hollow shell company organized in Texas is meaningless.” Shahin also argued that, because Deyaar Dubai filed suit against him in Dubai months before Deyaar filed this suit in Texas, Texas is neither the most convenient nor the most efficient forum to resolve this dispute. The facts supporting Shahin’s special appearance were provided and verified by Eric J. Akers, an attorney and “longtime friend of the Shahin family,” because Shahin himself was not able to consult with his attorneys.

In response, Deyaar amended its petition to assert a more specific basis for the exercise of jurisdiction over Shahin. Dey-aar asserted that the trial court had specific jurisdiction over Shahin because he “appeared in and has had multiple contacts with Harris County, Texas, in person, by email, and by telephone, for the purpose of personally benefitting himself by committing the fraudulent acts” alleged against him regarding the real estate transaction. Deyaar alleged that Shahin’s liability “arises from or is related to those many contacts with, actions in, and actions directed to Harris County, Texas, [and] form a substantial basis for the legal claims asserted against him” in the suit. Deyaar also alleged that the trial court had general jurisdiction over Shahin because he “has established continuous and systematic contacts with Texas.” Deyaar alleged that Shahin “has registered to vote in Texas, *279 has obtained a Texas driver’s license, owns property in Texas, has traveled to Texas on numerous occasions, has resided in Texas, and has formed at least three companies in Texas.”

Deyaar’s response to the special appearance identified those contacts added in the amended pleading and also argued that the exercise of jurisdiction would comport with traditional notions of fair play and substantial justice because Shahin has employed attorneys who currently defend him in matters pending in Dubai, he can confer with those attorneys freely and confidentially, and he has the opportunity to contact individuals outside the prison.

Deyaar supported these allegations with the affidavits of Wassef Serhan, an executive vice-president of Deyaa,r Dubai who was familiar with the details of the real estate transaction.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
367 S.W.3d 274, 2011 WL 7966174, 2011 Tex. App. LEXIS 10157, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zack-shahin-v-deyaar-development-corporation-usa-texapp-2011.