Opinion
No. 01-07-00849-CV
Opinion issued July 24, 2008.
On Appeal from the 234th District Court, Harris County, Texas, Trial Court Cause No. 2007-36135.
Panel consists of Justices NUCHIA, ALCALA, and HANKS.
MEMORANDUM OPINION
In this accelerated, interlocutory appeal, appellant, Healix Infusion Therapy ("Healix"), challenges the trial court's order sustaining the special appearance of appellee, South Florida Infectious Diseases Tropical Medicine Center, LLC ("SFID"), and dismissing Healix's causes of action against SFID.
We affirm.
Background
Healix is a Texas corporation with its principal place of business in Fort Bend County. Dr. Juan C. Perez-Morales is an individual residing in the state of Florida, practicing medicine in Miami, Florida. SFID is a medical practice and limited liability corporation operating in Miami, Florida. SFID was created by Perez-Morales. SFID and Perez-Morales contracted with Healix for Healix to manage and operate an on-site office infusion center (OIC), at SFID's offices in Florida. SFID placed orders over the phone and faxed, mailed, and emailed documents to Healix in Texas. Although SFID initially had a pharmacist on staff in Florida, this function was eventually replaced by ordering premixed medications from Healix, who mixed them in Texas.
Healix was located in Harris County when the parties initially signed their contract, but Healix later moved to Fort Bend County.
In connection with the contract, Perez-Morales signed an individual guaranty of the contract with Healix. This guaranty provided, in part, that "THE STATE COURTS IN THE STATE OF TEXAS SHALL HAVE NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES WITH RESPECT TO THIS GUARANTY. . . ." The trial court overruled his special appearance. Although he is listed as an appellee, the trial court's jurisdiction over Perez-Morales is not an issue in this case.
The initial contract was with Juan C. Perez Morales, M.D., P.A. The name of the physician association's practice was changed to South Florida Infectious Diseases and Tropical Medicine Center, LLC in the first amendment to the parties' contract.
The contract included the following provision, "This Agreement shall be governed, interpreted, and construed according to the laws of the State of Texas, without giving effect to its conflict of laws provisions. This Agreement shall be performable in Harris County, Texas." In addition to specifying Healix's responsibilities and the parties' agreement regarding compensation, the contract also precluded SFID from opening a competing office infusion center in certain nearby areas in Florida.
Healix sued SFID and Perez-Morales in Harris County for breach of contract. Healix alleged that SFID and Perez-Morales owed money under the contract. Healix further alleged that SFID and Perez-Morales had breached the noncompetition provisions of the contract through actions taken in Florida.
In its original petition, Healix alleged that jurisdiction was proper because the amount in controversy was within the jurisdictional limits of the district court. The petition alleged other facts germane to Healix's claims, but it did not recite any actions taken by SFID in Texas.
SFID and Perez-Morales filed a verified special appearance, denying both general and specific jurisdiction. In particular, they denied: (1) residing in Texas; (2) maintaining a registered agent for service of process in Texas; (3) engaging in business, trade, or commerce in Texas (or being authorized to do so); (4) maintaining a place of business in Texas or regularly employing Texas residents; (5) owning property in Texas; (6) paying taxes in Texas or soliciting business in Texas; (7) developing a substantial connection with Texas, purposefully or otherwise; and (8) having continuing and systematic contacts with Texas.
In its response, Healix argued that the contract's choice-of-law provision mandated jurisdiction in Texas. Healix also argued that the numerous activities it had conducted in Texas supported the exercise of personal jurisdiction as to SFID. Healix attached several affidavits describing the activities in which Healix engaged. A few days before the trial court's hearing on SFID's special appearance, Healix amended its petition to allege the contract, the guaranty, and, in general, the Texas long-arm statute as bases for the court to exercise personal jurisdiction. Like its predecessor, the first amended petition did not recite any actions taken by SFID in Texas.
After a hearing, the trial court sustained SFID's special appearance and dismissed Healix's claims as to SFID for want of jurisdiction. The trial court did not issue findings of fact. Healix appealed, arguing in three issues that the trial court erred because: (1) SFID did have sufficient minimum contacts to subject it to personal jurisdiction in Texas; (2) exercising personal jurisdiction would not offend traditional notions of fair play and substantial justice; and (3) the parties' contract waived SFID's objection to personal jurisdiction.
The trial court overruled Perez-Morales's special appearance, therefore, he is not an appellee here.
"Point of Error One: The District Court erred in ruling that SFID did not have sufficient minimum contacts to subject SFID to personal jurisdiction in Harris County, Texas.
Point of Error Two: The District Court erred in ruling that exercising personal jurisdiction over SFID in Harris County, Texas would not comply with traditional notions of fair play and substantial justice.
Point of Error Three: The District Court erred in ruling that the forum selection provision in the HATS Agreement did not waive SFID's objection to personal jurisdiction in Harris County."
Standard of Review
The existence of personal jurisdiction is a question of law reviewed de novo by this Court. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002). However, this question must sometimes be preceded by resolving underlying factual disputes. Id. at 794. When, as here, the trial court does not issue fact findings, we presume that the trial court resolved all factual disputes in favor of its ruling. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002). Personal Jurisdiction
"Texas courts may assert personal jurisdiction over a nonresident defendant only if the Texas long-arm statute authorizes jurisdiction and the exercise of jurisdiction is consistent with federal and state due process standards." Id. (citing Guardian Royal Exch. Assurance Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991)); see Tex. Civ. Prac. Rem. Code Ann. §§ 17.041-.045 (Vernon Supp. 2007) (Texas's long-arm statute). The long-arm statute allows Texas courts to exercise jurisdiction over a nonresident defendant that "does business" in the state. Tex. Civ. Prac. Rem. Code Ann. § 17.042 (Vernon Supp. 2007).
In addition to other acts that may constitute doing business, 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.
Id.
This list, however, is not exhaustive. BMC Software, 83 S.W.3d at 795. The Texas Supreme Court has held that "section 17.042's broad language extends Texas courts' personal jurisdiction as far as the federal constitutional requirements of due process will permit." Id. (citation omitted).
Initially, the plaintiff bears the burden of pleading allegations sufficient to bring a nonresident defendant within the terms of the Texas long-arm statute. Am. Type Culture Collection, 83 S.W.3d at 807. However, when a nonresident defendant files a special appearance, that defendant assumes the burden of negating all bases of personal jurisdiction that the plaintiff has alleged. Id.
Personal jurisdiction over nonresident defendants is constitutional when two conditions are met: (1) the defendant has established minimum contacts with the forum state and (2) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Id. at 806 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)). A nonresident defendant's minimum contacts must derive from purposeful availment: a nonresident defendant must have "purposefully availed" itself of the privileges and benefits of conducting business in the foreign jurisdiction to establish sufficient contacts with the forum to confer personal jurisdiction. Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76, 105 S. Ct. 2174, 2183-84 (1985)); Xenos Yuen v. Fisher, 227 S.W.3d 193, 200 (Tex.App.-Houston [1st Dist.] 2007, no pet.). An act or acts "by which the defendant purposefully avails itself of the privilege of conducting activities" in Texas and "thus invok[es] the benefits and protections" of Texas law, constitute sufficient contact with Texas to confer personal jurisdiction. Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240 (1958)).
We consider three elements of purposeful availment. See Michiana Easy Livin' Country, 168 S.W.3d at 785; see also First Oil PLC v. ATP Oil Gas Corp., No. 01-07-00703-CV, 2008 WL 2186781 (Tex.App.-Houston [1st Dist.] May 22, 2008, no pet.). First, we consider only the defendant's own actions, not those of the plaintiff or any other third party. Michiana Easy Livin' Country, 168 S.W.3d at 785; First Oil PLC, 2008 WL 2186781, at *12; see also U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760, 762-63 (Tex. 1977) (quoting Hanson, 357 U.S. at 253, 78 S. Ct. at 1240 (1958) ("The unilateral activity of those who claim some relationship with a non-resident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws."))
Second, the activities must be purposeful, not random, isolated, or fortuitous. Michiana Easy Livin' Country, 168 S.W.3d at 785; First Oil PLC, 2008 WL 2186781, at *12. "It is the quality rather than the quantity of contacts that is determinative." First Oil PLC, 2008 WL 2186781, at *12 (emphasis in original). Third, the defendant must seek some benefit, advantage, or profit by virtue of its activities in the proposed forum state, because this element is based on the notion of implied consent. Michiana Easy Livin' Country, 168 S.W.3d at 785; First Oil PLC, 2008 WL 2186781 at *12.
"A choice-of-law provision is a consideration." Preussag Aktiengesellschaft v. Coleman, 16 S.W.3d 110, 125 (Tex.App.-Houston [1st Dist.] 2000, pet. dism'd w.o.j.)); see Burger King, 471 U.S. at 482, 105 S. Ct. at 2187; see also Project Eng'g USA Corp. v. Gator Hawk, Inc., 833 S.W.2d 716, 722 (Tex.App.-Houston [1st Dist.] 1992, no writ) (contract containing choice-of-law and choice-of-forum clauses). However, standing alone, it does not suffice to confer jurisdiction. Preussag Aktiengesellschaft, 16 S.W.3d at 125; see Burger King, 471 U.S. at 482, 105 S. Ct. at 2187. "Nor does it indicate a voluntary submission to the personal jurisdiction of the state's courts in the absence of any express understanding to that effect." Preussag, 16 S.W.3d at 125.
Our jurisdictional analysis is further divided into general and specific personal jurisdiction. CSR, Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996). General jurisdiction will attach when "a defendant's contacts in a forum are continuous and systematic permitting the forum to exercise personal jurisdiction over the defendant even if the cause of action did not arise from or relate to activities conducted within the forum state." Id. To support general jurisdiction, the defendant's forum activities must have been "substantial," which requires stronger evidence of contacts than for specific personal jurisdiction. Preussag Aktiengesellschaft, 16 S.W.3d at 114.
Specific jurisdiction lies when the defendant's alleged liability arises from or is related to an activity conducted within the forum. BMC Software, 83 S.W.3d at 796. "For a nonresident defendant's forum contacts to support an exercise of specific jurisdiction, there must be a substantial connection between those contacts and the operative facts of the litigation." Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007). This requirement assesses "the strength of the necessary connection between the defendant, the forum, and the litigation." Id.
Discussion
In its first amended petition, Healix alleges that jurisdiction is proper as to SFID because it purposefully availed itself of the privileges and benefits of conducting business in Texas by (1) executing the contract between the parties, (2) expressly agreeing to a contract provision stating that the contract would be "performable" in Harris County, and (3) consenting to the application of Texas law in any controversy arising out of the contract. At the hearing, Healix also alleged that SFID communicated with Healix by telephone, facsimile, mail, and email on an ongoing basis. Healix repeatedly detailed its own business activities in Texas in its petition, response to SFID's special appearance, and arguments to the trial court.
SFID did enter into a contract "by mail or otherwise" with Healix, a Texas resident, and Healix performed some actions regarding the contract in Texas, so the long-arm statute is satisfied. Tex. Civ. Prac. Rem. Code Ann. § 17.042 (Vernon Supp. 2007). However, this does not end our inquiry. The exercise of personal jurisdiction is appropriate here only if it would comport with due process requirements. Therefore, we must consider whether SFID has established the requisite minimum contacts and if the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. As the trial court correctly noted throughout the hearing, we must look only at what SFID did in Texas, and we do not consider Healix's actions in determining whether the personal jurisdiction exists as to SFID. See Michiana Easy Livin' Country, 168 S.W.3d at 784-85. We will consider only whether specific jurisdiction exists, because Healix did not argue in favor of general jurisdiction in its briefing in our court.
Minimum Contacts
Healix first alleged that jurisdiction was proper in Texas because SFID entered into a contract with Healix, a Texas corporation. As Healix argued to the trial court, this contract required SFID to communicate with Healix, which it did through phone calls, email, mail, and facsimile. These contacts do not satisfy the minimum contacts requirement for Texas jurisdiction. See, e.g., Ashdon, Inc. v. Gary Brown Assocs., Inc., No. 01-06-01186-CV, 2008 WL 2209203, at *10 (Tex.App.-Houston [1st Dist.] May 29, 2008, no pet.) (holding that defendant lacked sufficient minimum contacts to establish personal jurisdiction despite contracting with Texas plaintiff over many years and communicating by phone, email, fax, or mail, traveling to Texas, and being paid by checks drawn on Texas account); Alenia Spazio, S.p.A. v. Reid, 130 S.W.3d 201, 213 (Tex.App.-Houston [14th Dist.] 2003, pet. denied) (contracting with Texas entity and numerous telephone and facsimile communications with people in Texas relating to alleged contract do not establish minimum contacts); TeleVentures, Inc. v. Int'l Game Tech., 12 S.W.3d 900, 908-10 (Tex.App.-Austin 2000, pet. denied) ("Minimum contacts may not be satisfied by merely engaging in communications with a Texas corporation during performance of a contract.").
Healix also argues that SFID transferred money electronically to an account in Houston as part of its performance of the contract. In an affidavit attached to Healix's response to the special appearance, Healix employee Joseph Gallegos testified, "Pursuant to the [parties' contract], Perez-Morales and SFID authorized electronic transfer of funds from their accounts to Healix's operating account in Harris County, Texas. But the contract provided that Healix "shall have the right to electronically transfer funds from the OIC Account to [Healix's] bank account to pay its Management Fee" and other expenses. Whether the Healix or SFID carried out the electronic fund transfers is, therefore, a question of fact, and we presume the trial court decided that this in favor of its judgment, i.e., that these actions could not be imputed to SFID. See Am. Type Culture Collection, 83 S.W.3d at 806.
Next, although the contract states that it would be "performable" in Harris County, performance under the contract occurs in Florida. The noncompetition provision and Exhibit A, describing premises, both refer to Miami-Dade County or counties contiguous thereto. Both the first and second amendments to the contract note that the SFID or its predecessor, Juan C. Perez Morales, M.D., P.A., are Florida professional associations. The contract was for operational and managerial services to be provided to the office infusion center located in Florida. These facts, which we view in a light most favorable to the trial court's ruling, do not weigh in favor of personal jurisdiction of SFID. See Moncrief Oil Int'l Inc. v. OAO Gazprom, 481 F.3d 309, 312 (5th Cir. 2007) ("[A] plaintiff's unilateral activities in Texas do not constitute minimum contacts where the defendant did not perform any of its obligations in Texas, the contract did not require performance in Texas, and the contract is centered outside of Texas."); see also Tabor, Chhabra Gibbs, P.A. v. Medical Legal Evaluations, Inc., 237 S.W.3d 762, 774 (Tex.App.-Houston [1st Dist.] 2007, no pet.).
Even Healix concedes that it moved from Harris County to Sugar Land, in Fort Bend County, Texas, during the time the parties' contract was in effect.
Similarly, the choice-of-Texas-law provision, which states that the contract shall be "governed, interpreted, and construed according to the laws of the State of Texas," does not confer jurisdiction, in the absence of any indication that SFID intended to voluntarily submit to personal jurisdiction in Texas. See Preussag Aktiengesellschaft, 16 S.W.3d at 125. No such indication is present in the record.
Substantial Relationship to Litigation
Although we conclude that SFID's alleged contacts were insufficient to satisfy the minimum-contacts/personal jurisdiction analysis, we also note that the alleged contacts are not substantially connected to the operative facts of the litigation. At best, Healix alleged that SFID communicated with it in Texas. However, Healix's petition alleges that SFID breached the contract by failing to pay monies owed as a result of the activities conducted at the office infusion center in Florida as well as by operating a competing office infusion center in Florida, in contravention of the contract. SFID's alleged contacts with Texas, therefore, are not substantially connected to the operative facts of the litigation. See Moki Mac River Expeditions, 221 S.W.3d at 584-85. We conclude that the evidence fails to show that SFID's conduct: (1) was purposely directed at or occurred in Texas; (2) has a "substantial connection" to the litigation's operative facts; and (3) satisfies federal due process requirements. Therefore, we need not consider whether the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. We hold that the trial court did not err by sustaining SFID's special appearance.
Conclusion
We affirm the order of the trial court.