Enright v. Asclepius Panacea, LLC

Full title: Todd Enright, Appellant v. Asclepius Panacea, LLC; Asclepius Panacea GP…

Court: TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

Date published: Mar 8, 2016

NO. 03-15-00348-CV (Tex. App. Mar. 8, 2016)

Opinion

NO. 03-15-00348-CV

03-08-2016

Todd Enright, Appellant v. Asclepius Panacea, LLC; Asclepius Panacea GP, LLC; Daily Pharmacy, LLC; Daily Pharmacy GP, LLC; and Toth Enterprises II, P.A. d/b/a Victory Medical Center, Appellees

Melissa Goodwin, Justice

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
NO. D-1-GN-14-004689, HONORABLE GISELA D. TRIANA, JUDGE PRESIDINGMEMORANDUM OPINION

In this interlocutory appeal, Todd Enright, a New Hampshire resident, appeals the trial court's order overruling his special appearance challenging the trial court's personal jurisdiction over him. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(7); Tex. R. Civ. P. 120a. Asclepius Panacea, LLC; Asclepius Panacea GP, LLC; Daily Pharmacy, LLC; Daily Pharmacy GP, LLC; and Toth Enterprises II, P.A. d/b/a Victory Medical Center (collectively, Victory) sued Enright in Travis County asserting tort claims arising out of Victory's equity purchase of two Texas pharmacies from QVL Pharmacy #181 GP, LLC; QVL Pharmacy #162 GP, LLC; and QVL Pharmacy Holdings, Inc. (collectively, QVL) in December 2013 and subsequent events involving Victory, QVL, and Enright. Enright filed a special appearance, which, after discovery and a hearing, the trial court denied. For the reasons that follow, we affirm the trial court's order.

FACTUAL AND PROCEDURAL BACKGROUND¹

1 The factual and procedural background is taken from the record. Much of the factual background is disputed.

Enright is a "partner" with White Winston Select Assets Funds, LLC, a Utah company with offices in Boston that is QVL's lender.² Prior to 2014, QVL operated ten specialty retail pharmacy locations in Texas and Louisiana. Victory is a Texas company located in Austin. In 2012, QVL began exploring the possibility of selling its retail locations. In December 2013, QVL CEO Chad Collins called Victory's owner William Franklin, who was located in Austin, to assess Franklin's interest in buying an equity interest in QVL's Austin pharmacy, which was organized as a Texas limited partnership.³ Franklin expressed an interest, and they agreed to speak again. Soon thereafter Collins brought Enright into a conference call with Franklin, and Enright introduced himself to Franklin as a partner with White Winston. Enright contends they "broadly discussed" a possible purchase loan to Victory while Victory alleges that Franklin and Enright discussed and negotiated the terms of the purchase, including the price, the structure of the sale, and the transfers of licenses needed to operate a pharmacy, and that Collins said very little. The next day, Enright emailed Franklin to express his pleasure in speaking with Franklin regarding Franklin's interest in an equity purchase of the pharmacies and to request financial documents. Franklin responded with questions about the purchase, and Enright answered in part and offered to explain "the process" more fully by phone that afternoon.

2 Although Enright states that he is a "partner" with White Winston, he is not an officer, director, member, owner, or employee of White Winston. He testified that "partner" is a "named title to be a nonequity partner," that he is self-employed as a consultant to Lilian White Investment Company, a member of White Winston, and that his job is to "prospect for investments" and manage White Winston's investments.

3 A second QVL pharmacy located in Houston later became part of the purchase.

Before the purchase closed on December 31, 2013, Franklin and Enright had at least one other phone call in which neither Collins nor any other person representing QVL participated. Enright maintains that they discussed only the loan while Victory alleges that Franklin and Enright also discussed all the terms of the purchase transaction. Victory also alleges that Enright told Franklin that QVL was getting out of the retail pharmacy business because it was developing retail pharmacy software and wanted to focus on the software business; that during the transitional period, all sales revenue for the two pharmacies would be collected by QVL and deposited into a secure lockbox account that Victory could access at any time; that Victory could purchase its drug inventory through QVL's existing arrangement with wholesaler AmerisourceBergen Drug Corporation (ABDC); and that QVL would provide services to Victory, including help in acquiring drug inventory and IT and billing services. These terms were spelled out in a Transition Services Agreement (TSA) between QVL and Victory, which was executed along with the purchase agreement. White Winston loaned Victory $675,000 for the purchase, and the loan documents provided that Massachusetts was to be the exclusive jurisdiction for any disputes. The TSA created an ongoing relationship between QVL and Victory, and the TSA services were provided primarily by two QVL bookkeepers, Sandra Gonzales and Joyce Montgomery, who were located in Dallas. Under the terms of the TSA, Gonzales and Montgomery were to process QVL's accounts receivable, invoice Victory for QVL's services, retain invoiced amounts, and deposit the balance in the lockbox account for payment to Victory.

As early as January 2014, problems arose. Although the parties offer differing explanations, for some reason Victory was unable to buy drugs from ABDC, which in turn apparently caused Victory cash flow problems and affected its ability to make payments on the White Winston loan. Victory requested a loan increase and modification of payment terms. White Winston advanced Victory an additional $182,000, and Victory executed a Promissory Note Modification Agreement. In February 2014, when Victory got its first invoice from QVL, it included "unexplained" finance charges and banking fees in connection with QVL's line of credit with White Winston that were unrelated to QVL's transition services and not contemplated by the TSA. Prior to sending the invoices to Victory, Gonzales and Montgomery sent the invoices to Enright for review. Over the next months, TSA invoices and related accounting statements were delayed, and funds QVL collected and owed Victory were paid late or not at all. When Victory requested information on expenses and charges, the initial response came from Enright, who explained that the bookkeepers would respond in five days.

In April 2014, Enright traveled to Texas and met with Franklin. Victory alleges that they discussed the problems with payments from the lockbox account and buying inventory and that Enright promised QVL would resolve the drug inventory issue by paying down its account with ABDC. Enright states that they "briefly discussed establishing a separate lockbox and sweep account for [Victory] if the TSA were terminated." In May, Enright informed Franklin that QVL would continue to provide services under the TSA and that "we will allow releases of cash from the lockbox on a monthly basis as set forth in the agreement." It turns out that QVL had decided not to go into the software business and was in the process of winding down, a decision that was made in September or October of 2013. Gonzales and Montgomery were no longer QVL employees but reported to Enright under a consulting agreement with White Winston, and by spring 2014, QVL had essentially closed and even CEO Collins had quit and was working as a consultant to White Winston. Victory alleges that QVL was being run by Enright personally. Victory also alleges that all the funds in the lockbox account were taken out to pay QVL's debt and that QVL was not permitted to transfer any funds from the account without approval from Enright.

By June 2014, TSA payments to Victory by QVL stopped altogether. When Victory demanded to know when QVL would pay the funds owed, QVL's Texas attorney Amy Moss located in Houston, asked Enright for "guidance" and a "game plan." Enright instructed her, among other things, to make a partial payment and keep the rest "as security for future service payments," an action not contemplated by the TSA. In July 2014, QVL sent Victory a check for about half of what was owed. Enright contends that QVL had secured enough credit availability to pay half and that it drafted a check for the second half but held it waiting for additional credit to become available. The parties provide different versions of what transpired next, and the record is unclear as to whether a second check was ever sent. In any event, Victory received a check that was rejected when Victory presented it for payment. The bank had asked Enright if it was "okay to pay" the check, but Enright refused to authorize payment without a release of all claims against White Winston by Victory. QVL made no more payments to Victory.

In November 2014, Victory filed suit. It did not name White Winston as a defendant but named Enright individually, asserting claims for fraudulent misrepresentation, securities fraud, tortious interference with the TSA, conversion, and money had and received. Enright filed a special appearance. Victory conducted extensive discovery, Enright amended his special appearance, and Victory amended its petition and filed a response to Enright's special appearance. After a hearing, the trial court denied Enright's special appearance. Enright requested the trial court to enter findings of fact and conclusions of law, but the trial court declined. This appeal followed.

LONG-ARM JURISDICTION

Texas courts may assert personal jurisdiction over a nonresident defendant if (1) the Texas long-arm statute authorizes the exercise of jurisdiction and (2) the exercise of jurisdiction is consistent with federal and state constitutional guarantees of due process. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007); see Tex. Civ. Prac. & Rem. Code § 17.042 (Texas long-arm statute). The Texas long-arm statute authorizes Texas courts to exercise jurisdiction over a nonresident defendant who "does business" in the state or

(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.

Tex. Civ. Prac. & Rem. Code § 17.042. The Texas Supreme Court has concluded that the Texas long-arm statute allows Texas courts to exercise personal jurisdiction "'as far as the federal constitutional requirements of due process will permit.'" BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002) (quoting U-Anchor Advert., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977)). Consequently, "the requirements of the Texas long-arm statute are satisfied if an assertion of jurisdiction accords with federal due-process limitations." Moki Mac, 221 S.W.3d at 575.

The exercise of jurisdiction over a nonresident comports with federal due process when (1) the nonresident has minimum contacts with the forum state, and (2) asserting jurisdiction complies with traditional notions of fair play and substantial justice. Moncrief Oil Int'l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013); see International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). "A defendant establishes minimum contacts with a state when [he] 'purposefully avails [himself] of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.'" Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)).

The requirement of "purposeful availment" encompasses three considerations. First, a court must consider only the defendant's contacts with the forum, not the unilateral activity of another party or a third person. Moki Mac, 221 S.W.3d at 575 (citing Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784-85 (Tex. 2005)). In addition, the contacts on which jurisdiction is based must be purposeful. Id. If the defendant's Texas contacts are random, fortuitous, or attenuated, the defendant is not subject to jurisdiction in Texas courts. Id. Finally, the defendant must seek some benefit, advantage, or profit by availing himself of the jurisdiction of Texas. Id. "The defendant's activities, whether they consist of direct acts within Texas or conduct outside of Texas, must justify a conclusion that the defendant could reasonably anticipate being called into a Texas court." American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).

A nonresident defendant's contacts with the forum state can give rise to either specific or general jurisdiction. BMC Software, 83 S.W.3d at 795. General jurisdiction exists when the defendant has made continuous and systematic contacts, such that the forum may exercise jurisdiction over the defendant even if the alleged liability does not arise from or relate to those contacts. Id. at 796. In contrast, specific jurisdiction exists only if the alleged liability arises out of or is related to the defendant's contacts with the forum. Moki Mac, 221 S.W.3d at 576. When, as here, specific jurisdiction is alleged, the focus of the minimum contacts analysis is the relationship among the defendant, the forum, and the litigation.⁴Id. at 575-76 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)). If the court concludes that a nonresident defendant has minimum contacts with Texas by purposefully availing himself of the privilege of conducting activities here, it must then address whether the defendant's alleged liability arises out of or is related to those contacts. See id. at 579-85 (concluding that under relatedness requirement, there must be "substantial connection" between contacts and operative facts of litigation). "The operative facts are those on which the trial will focus to prove the liability of the defendant who is challenging jurisdiction." Kaye/Bassman Int'l Corp. v. Dhanuka, 418 S.W.3d 352, 357 (Tex. App.—Dallas 2013, no pet.) (citing Moncrief, 414 S.W.3d at 156-57).

4 The parties agree that only specific jurisdiction is at issue in this case.

In determining whether asserting jurisdiction complies with traditional notions of fair play and substantial justice the following additional factors should be considered, when appropriate:

(1) the burden on the defendant; (2) the interests of the forum state in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief;

(4) the interstate . . . judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several . . . states in furthering fundamental substantive social policies.

Spir Star AG v. Kimich, 310 S.W.3d 868, 878 (Tex. 2010). Only in rare circumstances will the exercise of jurisdiction not comport with fair play and substantial justice when the nonresident defendant has purposefully established minimum contacts. Id.

STANDARD OF REVIEW

Under the Texas long-arm statute, the plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the personal jurisdiction of a Texas court. BMC Software, 83 S.W.3d at 793. When the plaintiff meets this initial burden, the burden shifts to the nonresident to negate all bases of personal jurisdiction asserted by the plaintiff. Id. A defendant may negate jurisdiction on a legal basis by showing that even if the plaintiff's allegations are true, they do not establish jurisdiction. Kelly v. General Interior Constr., Inc., 301 S.W.3d 653, 659 (Tex. 2010). A defendant may also negate jurisdiction on a factual basis by introducing evidence that rebuts the allegations in the pleadings. Id. Only relevant jurisdictional facts, rather than the ultimate merits of the case, should be considered in deciding the issue of jurisdiction. See Moncrief, 414 S.W.3d at 156 n.15.

When, as in this case, the trial court does not issue findings of fact and conclusions of law, all facts necessary to support the judgment and supported by the evidence are implied. BMC Software, 83 S.W.3d at 795. When the appellate record includes the reporter's record and clerk's record, as it does here, these implied findings are not conclusive and may be challenged for legal and factual sufficiency. Id. The ultimate determination of whether a court has personal jurisdiction over a defendant is a question of law that we review de novo. Moncrief, 414 S.W.3d at 150. However, the trial court frequently must resolve questions of fact before deciding the jurisdiction question. BMC Software, 83 S.W.3d at 794. We analyze whether jurisdictional contacts support specific jurisdiction on a claim-by-claim basis unless all the claims arise from the same forum contacts. Moncrief, 414 S.W.3d at 150-51.

DISCUSSION

In issues one through three and issue six, Enright argues that the trial court erred in denying his special appearance because he did not purposefully avail himself of the benefits of doing business in Texas, Victory's claims are not substantially connected to Enright's contacts with Texas, and the exercise of personal jurisdiction over Enright does not comport with traditional notions of fair play and substantial justice.⁵ Rule 120a requires that a special appearance be determined on the basis of the pleadings, any stipulations by the parties, affidavits and attachments filed by the parties, results of discovery, and any oral testimony. See Tex. R. Civ. P. 120a(3). Therefore, we must consider not only the allegations in Victory's petition, but also the parties' affidavits, exhibits, discovery responses, and testimony that support or undermine the allegations. See Kelly, 301 S.W.3d at 658 n.4 (while pleadings frame jurisdictional dispute, they are not dispositive, and court must consider additional evidence cited in Rule 120a(3), though this additional evidence merely supports or undermines allegations in pleadings). Victory's claims fall into two categories: those based on alleged pre-transaction conduct—the common law and securities fraud claims—and those based on alleged post-transaction conduct—the tortious interference, conversion, and money had and received claims. We address each category in turn.⁶

5 In issues four and five, Enright argues that the trial court erred in denying his special appearance because the evidence is legally and factually insufficient to support the trial court's implied findings of fraud and tortious interference. We reject that argument. The Texas Supreme Court has expressly disapproved of an analysis that would equate the jurisdictional inquiry with the underlying merits. See Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 789 (Tex. 2005) (rejecting proposition that nonresident can defeat jurisdiction by proving there was no tort). We overrule issues four and five.

6 As a preliminary matter, we note that Enright argues in his briefing that none of his contacts with Texas were made in his individual capacity but were done in his official capacity for White Winston and that he is therefore protected by the fiduciary shield doctrine. The fiduciary shield doctrine protects a nonresident corporate officer or employee from the exercise of jurisdiction when all of the individual's contacts with the forum state were made on behalf of the employer. See Stull v. LaPlant, 411 S.W.3d 129, 138 (Tex. App.—Dallas 2013, no pet.). However, when questioned at oral argument, Enright's counsel stated that he has abandoned this theory. Therefore, we do not address whether the fiduciary shield doctrine applies.

Fraud Claims

Victory alleges that in negotiating the purchase agreement, Enright misrepresented matters related to the lockbox account and the drug inventory purchases that were covered by the TSA. Specifically, Victory alleges that Enright misrepresented to Franklin that receivables would be deposited into a lockbox account that Victory could access at any time, that Victory could purchase its drug inventory through QVL's existing arrangement with wholesaler ABDC, that QVL would assist with the purchases, and that Victory "would have no trouble" ordering inventory for the two pharmacies. Enright argues that Victory's claims fail to meet the purposeful availment requirement because Enright did not reach out to Texas, did not create a continuing and ongoing relationship in Texas, and did not seek some benefit or advantage of doing business in Texas.⁷ In so arguing, Enright contends that this case is similar to Michiana. See 168 S.W.3d 777. In Michiana, a Texas resident placed a phone call to an Indiana recreational vehicle dealer, paid for the vehicle in Indiana, and arranged to have the vehicle shipped from Indiana to Texas. Id. at 781, 784. He later sued the dealer in Texas, claiming that a misrepresentation in the phone call from Texas subjected the dealer to specific personal jurisdiction in a Texas court. Id. The Texas Supreme Court held that, although the dealer allegedly committed a tort against a Texas resident, its contacts with Texas were only receiving the phone call and transferring the vehicle to the buyer's designated shipper to transport the vehicle to Texas. Id. at 788. Neither contact constituted purposeful availment because the dealer "had no say in the matter." Id. at 787-88.

7 Enright also argues that Victory's fraud claims fail as a matter of law because there is no evidence of fraud. For the reasons stated above, we reject that argument. See Michiana, 168 S.W.3d at 789 (rejecting proposition that nonresident can defeat jurisdiction by proving there was no tort). For the same reason, to the extent that Enright argues that the release by Victory of claims against White Winston and its agents contained in the loan modification agreement negates jurisdiction because it purports to preclude or reduce Enright's liability, we reject that argument, as well. See Gramercy Advisor LLC v. Lowery, No. 01-14-00904-CV, 2015 Tex. App. LEXIS 6683, at *41 (Tex. App.—Houston [1st Dist.] June 30, 2015, no pet.) (mem. op.) (noting that such argument conflates liability with jurisdiction and rejecting argument that contractual disclaimers negated jurisdiction).

Enright's reliance on Michiana is misplaced. First, we do not believe, as Enright argues, that the Texas Supreme Court in Michiana intended to draw a bright line rule that if a plaintiff makes the first phone call to the defendant, there can never be jurisdiction over the nonresident defendant. Moreover, even if Michiana were intended to establish a bright line rule that the defendant must take the first step to reach out, Collins testified in deposition that when he told Enright that buyers of QVL's Texas pharmacies were looking for financing, Enright offered White Winston as a potential source of funding. Collins also averred in an affidavit attached to Enright's amended special appearance that he communicated White Winston's willingness to consider financing portions of the purchase to Franklin and introduced Enright and Franklin to facilitate financing. Thus, Collins brought Enright into the subsequent conference call in response to Enright's initial overture, and the parties' relationship arose from Enright's voluntary contact with Texas.

Further, this case is factually distinguishable from Michiana. In Michiana, there were essentially two contacts: the nonresident dealer accepted one phone call from Texas and transferred the vehicle to the shipper. Id. at 788. Here, in an affidavit attached to Victory's response to Enright's amended special appearance, Franklin averred that in at least two phone conversations and in an email from Enright to Franklin, Enright directly negotiated the purchase with Franklin and set out the terms to be incorporated into the TSA. Franklin further averred that Enright directly negotiated the pricing for the sale of QVL's existing drug inventory in terms of what Enright was willing to accept. In addition, Enright traveled to Texas to meet with Franklin, and they discussed the issues on which the fraud claims are based. Franklin averred that he met with Enright in Texas at least twice and that in April 2014, they met and discussed the services that Enright had represented QVL would provide to Victory—services that Victory alleges were not provided—and the amounts QVL owed to Victory that Enright represented would be deposited in the lockbox account—amounts that Victory alleges were not deposited and paid to Victory. Put another way, Franklin averred that they discussed in Texas the very matters Victory alleges Enright misrepresented.

Although Enright, in the affidavits attached to his initial and amended special appearance filings, disputes some of these allegations, we must presume that the trial court resolved all factual disputes in favor of its decision. Coleman, 83 S.W.3d at 806; BMC Software, 83 S.W.3d at 794; Gramercy Advisor LLC v. Lowery, No. 01-14-00904-CV, 2015 Tex. App. LEXIS 6683, at *41 (Tex. App.—Houston [1st Dist.] June 30, 2015, no pet.) (mem. op.). In particular, Enright disputes the allegation that he negotiated the terms of the purchase; however, he does not dispute the allegation that he negotiated the terms of the drug inventory purchase. And while Collins averred generally in his affidavit that he "was responsible for negotiating the terms" of the purchase, he offers no details of what he said to Franklin other than communicating White Winston's willingness to consider financing, and he participated only in the first phone call with Enright and Franklin, in which, according to Franklin, he "said very little." Moreover, Enright averred that he has traveled to Texas four to five times in each of the years 2013 and 2014, including two trips that involved meetings with Franklin in 2014. He further averred that in April 2014 he met with Franklin in Texas and discussed matters related to the lockbox account and the TSA.

In addition, although Enright urges that he acted only on behalf of White Winston, he testified that his job duties as a self-employed consultant include "prospecting" for investments for White Winston, and he acknowledged in oral argument that he gets paid by Lilian White for an out-of-state transaction. The evidence also shows that for the better part of a year, Enright consistently communicated by phone, email, and in person in Texas with Franklin, Gonzales, Montgomery, and Moss, who were all located in Texas, concerning operative facts related to the fraud claims—how the lockbox account, payments, and drug inventory purchases under the TSA were operating. Thus, unlike the dealer in Michiana, Enright reached out to Texas by offering his services, established ongoing contacts with Texas, profited from the transaction, and, indeed, "had a say in the matter." Cf. Michiana, 168 S.W.3d at 787-88.

We conclude that the pleadings and evidence support the trial court's implied finding that Enright's contacts with Texas related to the fraud claims were his and not the unilateral conduct of another person; were purposeful and ongoing, not random, isolated, or fortuitous; and were taken in an effort by Enright to avail himself of the privilege of conducting business in Texas by establishing an ongoing relationship with and obligations to Texas residents in order to profit from a business transaction in Texas. See Moki Mac, 221 S.W.3d at 575. The allegations and evidence therefore establish that Enright has minimum contacts with Texas sufficient to meet the jurisdictional requirement of purposeful availment. See Moncrief, 414 S.W.3d at 147, 153-54 (holding that where defendants attended two meetings in Texas regarding joint venture in Texas, contacts were not unilaterally from plaintiff or random and fortuitous); Horizon Shipbuilding, Inc. v. Blyn II Holding, LLC, 324 S.W.3d 840, 848-49 & n.4 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (concluding that where nonresident defendant attended two Texas meetings and participated in multiple phone calls, case did not involve "a one-time, unsolicited, fortuitous transaction between a nonresident seller and a Texas resident as occurred in Michiana . . . ." and rejecting argument that contacts were too attenuated to constitute purposeful availment); Citrin Holdings, LLC v. Minnis, 305 S.W.3d 269, 283-84 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (distinguishing Michiana and affirming trial court's denial of individual defendant's special appearance where there were multiple Texas contacts over many months in course of ongoing relationship that was not unilaterally initiated by Texas resident).

The allegations and evidence also support the trial court's implied findings that there is a substantial connection between Enright's contacts and the operative facts of the litigation and that Enright's alleged liability for fraud therefore relates to these contacts. See Moncrief, 414 S.W.3d at 147 (holding that defendant's two meetings in Texas were sufficient to confer jurisdiction even where plaintiff contended that intent of meetings was to discuss matter unrelated to tort claim); Moki Mac, 221 S.W.3d at 579-85 (concluding that under relatedness requirement, there must be "substantial connection" between contacts and operative facts of litigation); Glencoe Capital Partners II, L.P. v. Gernsbacher, 269 S.W.3d 157, 167 (Tex. App.—Fort Worth 2008, no pet.) (distinguishing Moki Mac, in which alleged misrepresentations were "tangential to the plaintiffs' core negligence claim," and concluding that telephonic board meetings in which nonresident defendant made alleged misrepresentations were operative facts that were core of plaintiff's claims); Carlile Bancshares, Inc. v. Armstrong, Nos. 02-14-00014-CV & 02-14-00018-CV, 2014 Tex. App. LEXIS 8690, at *36-37 (Tex. App.—Fort Worth Aug. 7, 2014, no pet.) (mem. op.) (holding that where nonresident defendants provided information on transaction to plaintiff who was in Texas on which plaintiff relied, exchanged phone calls and emails with plaintiff, and traveled to Texas to discuss transaction, contacts showing purposeful availment were operative facts of litigation); cf. Kelly, 301 S.W.3d at 656, 659-60 (concluding that where only reference to Texas in allegations was incorporation by reference of contract that identified Houston as project job site and there was no allegation that any operative facts of claims occurred in Texas, plaintiff did not meet burden to plead facts within reach of long-arm statute). We conclude that as to the fraud claims, Victory met its initial burden of pleading sufficient allegations to satisfy jurisdictional due process requirements and bring Enright within the personal jurisdiction of a Texas court and that Enright failed to meet his burden to negate all bases of jurisdiction. See Burger King v. Rudzewicz, 471 U.S. 462, 475-76 (1985) (where defendant has created continuing obligations to residents of forum, he has availed himself of privilege of conducting business there, and it is reasonable to require him to submit to litigation in forum); BMC Software, 83 S.W.3d at 793. We therefore further conclude that the trial court did not err in finding that there were sufficient minimum contacts as to these claims. Tortious Interference, Conversion, and Money Had and Received Claims

Victory's claims for tortious interference, conversion, and money had and received (the interference claims) are based on allegations that Enright interfered with the TSA by directing QVL to bill Victory for illegitimate charges and to withhold payments to Victory unless he personally approved them, by sweeping funds from the lockbox account to pay QVL's debt to White Winston, and by instructing the bank to reject the July 2014 check for payment of half of what QVL owed Victory. As with the fraud claims, Enright argues that Victory's interference claims fail to meet the purposeful availment requirement because Enright did not initiate the relationship or look for business in Texas and that Victory's interference claims fail as a matter of law because there is no evidence the alleged interference caused Victory's damages. For the reasons stated in our discussion of the fraud claims, we reject these arguments.

Enright also argues that the interference claims do not arise from or relate to his contacts with Texas because his contacts are not substantially connected to the alleged torts. He contends that the interference claims are based on Enright's normal business emails with QVL and with the bank, all of which occurred outside of Texas. The record contains a number of emails reflecting Enright's direction of QVL's bookkeepers regarding invoices and payments to Victory and instructions to QVL's attorney concerning disputes with Victory and the flow of information to Franklin. The emails establish that Enright reviewed invoices and ensured that certain charges related to QVL's line of credit were added before authorizing Gonzales and Montgomery to send them to Victory. The emails also show that QVL attorney Moss sought "guidance" and a "game plan" from Enright in addressing disputes with Victory over payments from the lockbox account. Enright's response contained accounting instructions, including a statement that QVL would hold one month of average charges as "security for future services payments" although no such withholding was contemplated by the TSA. Moss also asked Enright in an email for authority to tell Victory's attorney how much QVL owed Victory. It is apparent that by at least late spring 2014, Gonzales, Montgomery, and Moss had to obtain Enright's authorization before making any payments or providing information to Victory. In addition, Victory alleges that Enright met with Gonzales and Montgomery in Texas in July 2014 to calculate what was owed and what would be paid to Victory at that time. An email from Enright to Collins indicates this meeting occurred on July 30, 2014. The emails also indicate that Enright conditioned his authorization for the bank to pay the check for the second half of what QVL owed Victory in July 2014 on Victory's release of White Winston.

Although Enright characterizes his actions restricting payments to Victory as failing to advance credit to QVL to make its payments thereby causing QVL to breach the TSA, not as interference with the TSA, he does not dispute the conduct alleged and reflected in the emails. Nor does he dispute meeting with Gonzales and Montgomery in Texas to discuss charges and payments under the TSA. As for Enright's instructing the bank not to pay the presented check, Enright testified that QVL was not involved in the decision to condition that payment under the TSA on Victory's release of White Winston. And the emails reflect that Collins, when asked by QVL attorney Moss if she could tell Victory's attorney how much QVL owed Victory, forwarded the email to Enright stating he was "in the dark" and asking Enright to "share what is owed and what is pending." The pleadings and evidence therefore show that by late spring 2014 Enright was making decisions concerning QVL's performance under the TSA, a contract between Texas entities to be performed in Texas and governed by Texas law.⁸ Enright directed Gonzales and Montgomery as to what charges and payments to make to Victory and when to make them, and he met with them in Texas in July 2014 concerning those very matters. Thus, Enright's alleged conduct on which Victory's interference claims are based was "aimed at activities in Texas" and occurred, in part, in Texas. See Horizon Shipbuilding, 324 S.W.3d at 850 n.6 (quoting and distinguishing Marathon Oil Co. v. A.G. Ruhrgas, 182 F.3d 291, 295 (5th Cir. 1999) in which the record was "devoid of evidence . . . that [the defendant's] alleged tortious conduct was aimed at activities in Texas").

8 Although QVL Pharmacy Holdings is a Delaware corporation doing business in Texas, QVL Pharmacy #181GP, LLC, and QVL Pharmacy #162, GP, LLC, are Texas limited liability corporations, and the TSA provided that it was to be "governed by and construed in accordance with the internal laws of the State of Texas . . . ." --------

The pleadings and evidence support the trial court's implied findings that there is a substantial connection between Enright's contacts related to the interference claims and the operative facts of the litigation and that Enright's alleged liability therefore relates to these contacts. See Moncrief, 414 S.W.3d at 147; Moki Mac 221 S.W.3d at 576, 579-85; Gernsbacher, 269 S.W.3d at 167; Fjell Tech. Grp. v. Unitech Int'l, Inc., No. 14-14-00255-CV, 2015 Tex. App. LEXIS 966, at *11, 25 (Tex. App.—Houston [14th Dist.] Feb. 3, 2015, pet. filed) (mem. op.) (where nonresident defendants emailed marketing materials to Texas plaintiff's alleged existing or potential business relations, operative facts were substantially related to claim of tortious interference); Armstrong, 2014 Tex. App. LEXIS 8690, at *36-37. As to the interference claims, we conclude that Victory met its initial burden of pleading sufficient allegations to satisfy jurisdictional due process requirements and bring Enright within the personal jurisdiction of a Texas court and that Enright failed to meet his burden to negate all bases of jurisdiction. See Burger King, 471 U.S. at 475-76. We therefore further conclude that the trial court did not err in finding that there were sufficient minimum contacts as to these claims.

Fair Play and Substantial Justice

Having concluded that the minimum contacts requirement is met as to both the fraud claims and the interference claims, we must consider whether the exercise of personal jurisdiction comports with traditional notions of fair play and substantial justice. See Spir Star, 310 S.W.3d at 878. We apply the factors set out above. See id. Requiring Enright to litigate Victory's claims in Texas would not pose an undue burden on him. Because of modern transportation and communication, distance alone is generally insufficient to defeat jurisdiction. Moncrief Oil, 414 S.W.3d at 155; Spir Star, 310 S.W.3d at 879. Moreover, Enright averred that he has traveled to Texas on business 12 to 13 times since 2003, including twice in 2012 and 4 to 5 times in each of the years 2013 and 2014. He further averred that at least two of the 2014 trips involved meetings with Franklin and that at least one included discussions directly related to the alleged tortious conduct. See Cappuccitti v. Gulf Indus. Prods., 222 S.W.3d 468, 486 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (concluding that where nonresident defendant visited Texas on several occasions to do business in connection with transactions that were subject of suit, there was no undue burden on defendant in defending case in Texas); Mitchell v. Simpro, Inc., No. 14-01-00623-CV, 2001 Tex. App. LEXIS 7567, at *22-23 (Tex. App.—Houston [14th Dist.] Nov. 8, 2001, no pet.) (not designated for publication) (where nonresident defendant had traveled to Texas several times, including to discuss transaction at issue, subjecting him to suit in Texas was not overly burdensome or inconvenient).

In addition, Texas has a significant interest in providing a forum for redressing alleged economic harm incurred by a resident business as the result of a tort committed, at least in part, in Texas and in governing the manner in which securities, including limited partnership interests, are marketed and sold. See Tex. Rev. Civ. Stat. arts. 581-4(A) (defining "security" to include interest in limited partnership), -33 (providing for civil liability with respect to sale of security); Cappuccitti, 222 S.W.3d at 487 (observing that Texas has compelling interest in protecting citizens against harm from alleged torts); Silbaugh v. Ramirez, 126 S.W.3d 88, 96 (Tex. App.—Houston [1st Dist.] 2002, no pet.) ("Texas has an interest in ensuring that its citizens are protected from . . . tortious acts committed by nonresidents conducting business in Texas."); Mitchell, 2001 Tex. App. LEXIS 7567, at *23 ("Texas has a significant interest in adjudicating the claims of a Texas corporation harmed by tortious conduct of a nonresident in Texas."). Further, Victory, as a Texas company with its principal place of business in Texas, can obtain the most convenient and efficient relief in Texas. Cappuccitti, 222 S.W.3d at 487 (plaintiff, as Texas corporation with principal place of business in Texas, could get most convenient and efficient relief in Texas.) Finally, because the parties have already conducted extensive discovery, because the trial court is familiar with the case, and because the vast majority of the witnesses reside in Texas, it will be more efficient to adjudicate Victory's claims in Texas. See Mi Gwang Contact Lens Co. v. Chapa, No. 13-13-00306-CV, 2015 Tex. App. LEXIS 5872, at *33 (Tex. App.—Corpus Christi June 11, 2015, no pet.) (mem. op.) (where parties had conducted extensive discovery and trial court was familiar with case, litigation in Texas promoted judicial economy); Walker v. Loiseau, No. 03-02-00328-CV, 2003 Tex. App. LEXIS 6337, at *30 (Tex. App.—Austin July 24, 2003, no pet.) (mem. op.) (considering fact that many primary witnesses were Texas residents in determining fairness of litigating in Texas).

To defeat jurisdiction, Enright must present "'a compelling case that the presence of some consideration would render jurisdiction unreasonable.'" Spir Star, 310 S.W.3d at 878-79 (quoting Burger King, 471 U.S. at 477). Enright argues that the concerns of satisfying the traditional notions of fair play and substantial justice are "strongly implicated" because Victory has "transformed contract claims into tort claims" and sought relief in a Texas court to avoid mandatory jurisdiction in Massachusetts under the loan documents. However, Victory's tort claims against Enright do not arise from the loan documents that contain the mandatory jurisdiction provision. Although Victory asserts that Enright refused to honor an early-payoff provision in the loan agreement, its claim is that Enright interfered with the TSA, thereby preventing Victory's performance and precluding its receipt of the early-payoff credit. We cannot conclude that Enright has presented a compelling case that jurisdiction is unreasonable. See id. On balance, the burden on Enright is minimal and is outweighed by Victory's and Texas's interests in adjudicating this dispute here. We do not find this to be one of those "rare circumstances" in which, although the nonresident defendant has purposefully established minimum contacts, the exercise of jurisdiction does not comport with fair play and substantial justice. See id. at 878. We conclude that the trial court's assertion of personal jurisdiction over Enright comports with traditional notions of fair play and substantial justice. See id. at 879-80; TexVa, Inc. v. Boone, 300 S.W.3d 879, 891 (Tex. App.—Dallas 2009, pet. denied). We overrule Enright's first through third and sixth issues.

CONCLUSION

Having overruled Enright's issues, we affirm the trial court's order denying his special appearance.

/s/_________

Melissa Goodwin, Justice Before Justices Puryear, Goodwin, and Bourland Affirmed Filed: March 8, 2016