Opinion
01-21-00113-CV
08-23-2022
IRANI ENGINEERING, INC. AND BART GOODING, Appellants v. ARCADIA GAS STORAGE, LLC, AND CARDINAL GAS STORAGEPARTNERS LLC, Appellees
On Appeal from the 11th Judicial District Court Harris County, Texas Trial Court Case No. 2020-31121
Panel consists of Chief Justice Radack and Justices Kelly and Landau.
MEMORANDUM OPINION
Sarah Beth Landau Justice
Appellants, Irani Engineering, Inc. and Bart Gooding, bring this interlocutory appeal challenging the trial court's order denying their special appearance. Appellants contend that the trial court erred in determining that they were subject to the jurisdiction of a Texas court.
We affirm the trial court's holding that the court has specific personal jurisdiction over Irani. We reverse and render judgment dismissing without prejudice Appellee's claims against Gooding.
I. Background
This suit arises out of a gas well blowout that occurred at an Arcadia Gas Storage facility in Bienville Parish, Louisiana. The well, GH-001, is owned and operated by Appellees, Cardinal Gas Storage Partners LLC and its wholly owned subsidiary, Arcadia Gas Storage, LLC. Both appellees are Texas-based companies. Cardinal's base of operations is in Houston, Texas. Cardinal hired Irani to drill GH-001 in 2010, later to convert the well for gas storage in 2013, and again in 2018 when the blowout occurred. In 2018, Cardinal hired Irani to write a program to implement a repair of GH-001's loss of 105 feet of pipe. Irani hired Gooding as an independent consultant to be Irani's well supervisor and run the day-to-day operations at the well site. During the repair, there was a blowout: over 4,000 feet of pipe detached from the well, causing an uncontrolled release of gas.
Irani has worked on wells for Cardinal at four separate facilities. Irani has performed engineering work on dozens of wells owned by Cardinal. Cardinal is a wholly owned subsidiary of Martin Midstream Partners L.P. Martin requires all contractors working at facilities owned by it or its subsidiaries to sign a Facility Access and Indemnity Agreement (FAIA). Irani's president executed an FAIA for the Arcadia facility where the blowout happened.
The FAIA contains a forum-selection clause that designates Texas state district courts as the exclusive jurisdiction for any disputes between Irani and Martin subsidiaries, which includes Arcadia and Cardinal. After executing the agreement, Irani submitted a bid to design and supervise a repair on the GH-001 well.
As a result of the blowout, Arcadia and Cardinal claim they experienced loss, expense, and damage to the well. Arcadia and Cardinal sued Irani and Gooding for contractual indemnity, breach of contract, negligence, and gross negligence based on a breach of their agreement by failing to complete the work properly. After removal to federal court and remand to state court, Irani and Gooding filed special appearances challenging personal jurisdiction. The trial court denied Appellants' special appearance without findings of fact or conclusions of law. Irani and Gooding appealed, challenging denial of their special appearances. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(7) (party may take interlocutory appeal from order denying special appearance).
II. Standard of Review
"Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law that we review de novo." Old Republic Nat'l Title Ins. Co. v. Bell, 549 S.W.3d 550, 558 (Tex. 2018). When there is a challenge to personal jurisdiction, the plaintiff has "the initial burden to plead sufficient allegations to confer jurisdiction." Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009). The burden then shifts to the defendant "to negate all potential bases for jurisdiction pled by the plaintiff." Id.
When the trial court does not issue findings of fact and conclusions of law, we imply all facts necessary to support the judgment and supported by evidence. Old Republic, 549 S.W.3d at 558. When the appellate record includes the reporter's and clerk's records, the implied findings may be challenged for legal and factual sufficiency. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).
To review legal sufficiency, we consider the evidence in the light most favorable to the finding and indulge every reasonable inference supporting that finding. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We credit favorable evidence if a reasonable factfinder could, and we disregard contrary evidence unless a reasonable factfinder could not. Id. For legal sufficiency, the evidentiary challenge fails if there is more than a scintilla of evidence to support the finding. BMC Software, 83 S.W.3d at 795. The defendant can show that even if the plaintiff's allegations are true, the evidence is legally insufficient to establish jurisdiction. Kelly v. General Interior Const., Inc., 301 S.W.3d 653, 659 (Tex. 2010).
For factual sufficiency, we consider all the evidence, and we will set aside a finding only if it is so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). If the evidence supports the findings, we must uphold the trial court's judgment on any legal theory supported by the findings. PetroSaudi Oil Servs. Ltd. v. Hartley, 617 S.W.3d 116, 133 (Tex. App-Houston [1st Dist.] 2020, no. pet.).
III. Contractual Forum Selection Clauses
Contractual forum-selection clauses are presumptively valid and enforceable. Rieder v. Woods, 603 S.W.3d 86, 93 (Tex. 2020); In re AIU Ins. Co., 148 S.W.3d 109, 113-14 (Tex. 2004). A valid forum-selection clause constitutes consent to the jurisdiction of the agreed forum. Rieder, 603 S.W.3d at 93 . The party seeking enforcement of a forum-selection clause must show that the parties agreed to an exclusive forum and that the agreement covers the relevant claims. Phoenix Network Techs. (Eur.) Ltd. v. Neon Sys., Inc., 177 S.W.3d 605, 610 (Tex. App.-Houston [1st Dist.] 2005, no pet.). Once that is established, the burden shifts to the opposing party to show that "(1) enforcement would be unreasonable or unjust, (2) the clause is invalid for reasons of fraud or overreaching, (3) enforcement would contravene a strong public policy of the forum where the suit was brought, or (4) the selected forum would be seriously inconvenient for trial." In re ADM Investor Servs., Inc., 304 S.W.3d 371, 375 (Tex. 2010) (orig. proceeding).
A. Irani Engineering
Irani argues that 1) the trial court erred by not following the terms of the Consulting Agreement governing Irani's work on the GH-001 well in 2010; 2) the trial court erred by determining it could exercise personal jurisdiction over Irani based on the forum-selection clause in the FAIA; and 3) there is insufficient evidence to support the trial court's determination that it could exercise general or specific jurisdiction over Irani.
Irani contends that the unsigned 2010 Consulting Agreement, not the FAIA, governs its work on the GH-001 well. The Consulting Agreement included a dispute resolution clause directing that any dispute between the parties under the Consulting Agreement would first go through mediation, then arbitration, and, if needed, trial. Throughout dispute resolution, Louisiana law would apply and "any mediation, arbitration, or trial court suit or action between or involving the parties [would] be commenced and conducted exclusively in the United States District Court for the Eastern District of Louisiana." Irani also points to a merger clause in the Consulting Agreement stating that "[n]o changes to the Agreement, its exhibits, or appendices, whether in the form of written negotiations, correspondence, representations, alterations, additions or changes or otherwise, shall be binding unless specifically agreed to in writing signed by both parties."
Appellees contend that the FAIA, not the Consulting Agreement, applies and that its forum-selection clause, identifying Texas state courts as the exclusive forum, establishes Irani's consent to Texas jurisdiction. So, to determine whether Irani agreed to Texas jurisdiction over its work on the GH-001 well, the question is whether the trial court could rely on the FAIA's terms.
1. The Consulting Agreement and the FAIA
Irani does not dispute that it signed the FAIA or that the FAIA contains a forum-selection clause. But it contends that the Consulting Agreement, prepared in 2010 for its work to manage and supervise the drilling of the GH-001 well, governs the relationship between Irani and Appellees for purposes of Irani's work on the same well in 2018. But no party provided a signed Consulting Agreement. Instead, Irani provided an unsigned copy of the Consulting Agreement, a signed drilling proposal, a memorandum about the drilling proposal, and emails exchanged between Irani and Cardinal about the Consulting Agreement.
If an original writing is lost or destroyed, unless the proponent lost or destroyed the original in bad faith, the proponent can present other evidence of the writing's existence and content. See Tex. R. Evid. 1004. A party can establish loss or destruction of a document by providing proof of a search for the document and the inability to locate it. Travis Cnty. Water Control & Improvement Dist. No. 12 v. McMillen, 414 S.W.2d 450, 453 (Tex. 1966). Irani provided an affidavit from its CEO, Ardeshir Irani, stating that Irani and Cardinal entered into a consulting agreement but that he could not locate a copy of the fully executed agreement. For credibility determinations, we will not substitute our judgment for that of the factfinder. See Huynh v. Nguyen, 180 S.W.3d 608, 615 (Tex. App.-Houston [14th Dist.] 2005, no pet.). When the trial court does not issue fact findings, we presume that all fact disputes were resolved in favor of the judgment. See Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002).
"Evidence of mutual assent in written contracts generally consists of signatures of the parties and delivery with the intent to bind." Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007). The presence or absence of signatures on a contract is relevant to a determination of whether the contract binds parties. New York Party Shuttle, LLC v. Bilello, 414 S.W.3d 206, 214 (Tex. App.- Houston [1st Dist.] 2013, pet. denied) (citing In re Bunzl USA, Inc., 155 S.W.3d 202, 209 (Tex. App.-El Paso 2004, no pet.)). Where parties to a written contract intend that the contract will not be binding until it is signed by all parties, their signatures are required. New York Party Shuttle, 414 S.W.3d at 214. "Therefore, 'the question of whether a written contract must be signed to be binding is a question of the parties' intent.'" Id. (quoting In re Bunzl, 155 S.W.3d at 209).
In Bunzl, an employment agreement including an arbitration clause was only signed by one party. In re Bunzl, 155 S.W.3d at 210. Bunzl held that there was evidence supporting the trial court's finding that the parties did not intend to be bound by the agreement until both parties signed it because it included a provision stating that "[n]o modification or amendment of any provision of this Agreement is effective unless it is in writing and signed by the parties to this Agreement." Id. at 211. Here, the Consulting Agreement includes a similar provision that "[n]o changes to the Agreement, its exhibits, or appendices, whether in the form of written negotiations, correspondence, representations, alterations, additions or changes or otherwise, shall be binding unless specifically agreed to in writing signed by both parties."
The trial court had the Irani CEO's affidavit, and the unsigned Consulting Agreement. The Consulting Agreement includes an unsigned signature block for each party. Like Bunzl, the Consulting Agreement also contains a provision that no changes to the agreement will be effective without the signatures of both parties. Additionally, the emails between the parties show that the Consulting Agreement was still under negotiation, not that the agreement provided was the finalized and agreed upon version. Altogether, this evidence shows that the parties did not intend to be bound until both parties signed the Consulting Agreement. See Id. Because there is conflicting evidence, the trial court could have reasonably found that Irani's CEO was not credible and that Irani did not establish the existence of the Consulting Agreement. See Huynh, 180 S.W.3d at 615. We will not disturb the trial court's credibility determination.
We now must determine whether the FAIA applies. Our primary goal when we construe a forum-selection clause is to give effect to the written expression of the parties' agreement. See Southwest Intelecom, Inc. v. Hotel Networks Corp., 997 S.W.2d 322, 324 (Tex. App.--Austin 1999, pet. denied). Contractual forum-selection clauses allow the parties to agree on the jurisdiction for future dispute resolution. Rieder, 603 S.W.3d at 93. The FAIA's forum-selection clause provides that the "exclusive venue for any dispute" related to the FAIA "shall lie in the State District Courts of Texas." "Shall" is generally mandatory. See Phoenix Network Techs., 177 S.W.3d at 615 (citing Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 961 (Tex. 1999)). The forum-selection clause demonstrates that the parties intended for the Texas state courts to be the exclusive venue. There is not a dispute over the validity of the forum-selection clause itself or whether the claims between Irani and Appellees relate to and would fall under the FAIA.
Irani contends that even if the Consulting Agreement does not apply and the FAIA does, that the forum-selection clause is unenforceable because doing so would be unreasonable, unjust, and overreaching. In re ADM Investor Servs., 304 S.W.3d at 375. The party opposing a contractual forum-selection clause carries a heavy burden of proof. Id. Irani signed the FAIA as part of its work on an unrelated project owned by another Martin entity. Irani argues that its CEO understood the FAIA to cover only Irani's access to Martin's property for the Martin project. Irani also argues that its CEO was not advised he could review the agreement with legal counsel or that the FAIA would extend to all future projects.
The court's role is not "to protect parties from their own agreements." El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 810-11 (Tex. 2012). A party to a contract is presumed to know and accept the contract's terms. See Nat'l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, 425 (Tex. 2015). An agreement is not negated because one party may have been in a more advantageous position. In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 679 (Tex. 2006). When considering overreaching, Texas courts look at whether the contract leads to "unfair surprise or oppression." In re Lyon Financial Servs., Inc., 257 S.W.3d 228, 233 (Tex. 2008). Parties to an agreement have an obligation to protect themselves by reading what they sign and, absent a showing of fraud, will not be excused from the consequences of not doing so. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 134 (Tex. 2004). That said, the court must decide whether the forum-selection clause was "so one-sided that it is unconscionable under the circumstances existing when the parties made the contract." In re Palm Harbor Homes, 195 S.W.3d at 678 (citing In re FirstMerit Bank, N.A., 52 S.W.3d 749, 757 (Tex. 2001)).
Irani's CEO's affidavit states that Irani has drilled over 1,500 wells and supervised over 3,000 related jobs since 1992. He also stated that Irani has worked with large and small operators in multiple states. Irani identified two other occasions that it had been hired by Cardinal since 2010. Irani also provided evidence that its CEO has negotiated contracts on its behalf before signing the FAIA. This includes the unsigned Consulting Agreement, the signed drilling proposal, and the emails showing negotiations between Irani and Cardinal over the Consulting Agreement.
The FAIA is a two-page agreement. On the first page, it defines Martin to include the Martin Resource Management Corporation, and that the Martin Resource Management Corporation includes Arcadia Gas Storage, LLC and Cardinal Gas Storage Partners LLC. The final provision also includes language stating, "[t]his AGREEMENT shall constitute the full and complete agreement among the parties governing access to any MARTIN facility." This plain language undermines Irani's claim that it understood the FAIA to only cover Irani's access to a single Martin property.
Indeed, Irani's previous contract negotiations with a Martin subsidiary, where Irani's CEO reviewed a contract with legal counsel, cuts against the argument that Irani's CEO lacked the opportunity to review the contract adequately. That Irani did not negotiate or consult legal counsel over the terms of the contract does not invalidate it. An experienced CEO signed a contract to perform services that Irani has been engaged in since 1992 across multiple states. See In re Lyon Financial Servs., Inc., 257 S.W.3d at 233 (a party's affidavit that he was unable to obtain legal advice, did not have formal business training, was unaware of a contract provision, and that the document was presented on a "take-it-or-leave-it" basis did not establish unconscionability or overreaching). Thus, nothing here presents a contract that was so one-sided as to be unconscionable. Id.
Irani does not dispute that it signed the FAIA or that the contract contains a forum-selection clause, and it has failed to show that enforcement would be unfair, unjust, or overreaching. Thus, it has consented to Texas jurisdiction. Id.; Rieder, 603 S.W.3d at 93. Accordingly, we need not address Irani's other points of error.
IV. Agency, Third-Party Beneficiary, and Personal Jurisdiction
A trial court's contractual interpretation of a forum-selection clause or of a third-party beneficiary is reviewed de novo. MCI Telecomm. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 651 (Tex. 1999); Clark v. Power Mktg. Direct, Inc., 192 S.W.3d 796, 798 (Tex. App.-Houston [1st Dist.] 2006, no pet.). Generally, "a forum-selection clause may be enforced only by and against a party to the agreement containing the clause." Pinto Tech. Ventures, L.P. v. Sheldon, 526 S.W.3d 428, 443 (Tex. 2017). Non-signatories can rarely be bound to a forum-selection clause. Id. The Texas Supreme Court has noted six theories that federal courts have applied to bind a non-signatory to an agreement: "1) incorporation by reference; (2) assumption; (3) agency; (4) alter ego; (5) equitable estoppel, and (6) third-party beneficiary." In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005); Pinto Tech. Ventures, L.P., 526 S.W.3d at 432 (applying these theories to determine whether non-signatories are subject to an agreement's forum-selection clause). The courts have also recognized a transaction-participant enforcement theory. See Rieder, 603 S.W.3d at 100.
An agent is a person who is authorized by the principal to transact business on the principal's behalf. Metro. Ins. & Annuity Co. v. Peachtree Settlement Funding LLC, 500 S.W.3d 5, 15 (Tex. App.-Houston [1st Dist.] 2016, no pet.). An agency relationship "depends on some communication by the principal either to the agent (actual or express authority) or to the third party (apparent or implied authority)." Gaines v. Kelly, 235 S.W.3d 179, 182 (Tex. 2007). Express authority is delegated to an agent by words of the principal that expressly authorize the agent to do an act or series of acts on behalf of the principal. Reliant Energy Servs., Inc. v. Cotton Valley Compression, L.L.C., 336 S.W.3d 764, 783 (Tex. App.-Houston [1st Dist.] 2011, no pet.). Implied authority is the authority of an agent to do whatever is necessary and proper to carry out the agent's express powers. Id. A party that does not have express authority "cannot have implied authority." Id.
Texas courts may exercise personal jurisdiction over a nonresident defendant if (1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction adheres to federal and state constitutional due process. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). Texas's long-arm statute lists what constitutes "doing business" in Texas. Tex. Civ. Prac. & Rem. Code § 17.042. The Texas long-arm statute's requirements are satisfied if a claim of jurisdiction meets federal due-process limitations. Coleman, 83 S.W.3d at 806.
"Personal jurisdiction is proper when the nonresident defendant has established minimum contacts with the forum state, and the exercise of jurisdiction comports with 'traditional notions of fair play and substantial justice.'" Drugg, 221 S.W.3d at 575 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Minimum contacts are satisfied for personal jurisdiction when a nonresident defendant purposefully avails himself of the privileges of conducting activities within the forum state, thereby invoking the benefits and protections of its laws. Id. (citing Hanson v. Denckla, 357 U.S. 235, 253 (1958)).
A. Bart Gooding
Gooding argues that the trial court erred by denying the special appearance because 1) Irani lacked authority to bind Gooding when it signed the FAIA; 2) Gooding was not a third-party beneficiary of the FAIA; and 3) Gooding lacked sufficient contacts with Texas to establish specific or general jurisdiction.
Gooding argues that he is an independent contractor, not an Irani employee. As a result, Irani lacked the authority to bind Gooding by signing the FAIA. Gooding challenges the trial court's implied finding for factual sufficiency. Appellees argue that Gooding is subject to personal jurisdiction in Texas as a result of being bound by the FAIA under a theory of agency, as a third-party beneficiary of the FAIA, and as a result of specific and general jurisdiction.
1. Agency
Courts have held that a non-signatory to a contract may enforce a forum-selection clause against a signatory. Rieder, 603 S.W.3d at 99. As the parties seeking to enforce the forum-selection clause, it was the Appellees' burden to show by rules of law or equity, that Gooding was bound by the FAIA even though he is a non-signatory. See In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig. proceeding).
a. Actual Authority
A principal grants an agent actual authority to act on the principal's behalf when the principal (1) intentionally authorizes the agent, (2) intentionally allows the agent to believe it has authority, or (3) through lack of due care allows the agent to believe it has authority. Reliant Energy Servs., 336 S.W.3d at 783 .
When determining whether a party had actual authority to act on behalf of another, courts examine the words and conduct used by the principal to the alleged agent. Id. A party dealing with an agent must determine both the fact and the scope of the agent's authority, and if the party deals with the agent without having made such a determination, he does so at his own risk. Elliot Valve Repair Co. v. B.J. Valve & Fitting Co., 675 S.W.2d 555, 561 (Tex. App.-Houston [1st Dist.] 1984), rev'd on other grounds, 679 S.W.2d 1 (Tex. 1984).
Gooding and Irani signed a memorandum agreeing that Gooding was an independent contractor, not an Irani employee:
Nothing contained in the Memorandum is intended to create, nor shall it be construed to create, any relationship between the Parties other than that of independent parties contracting with each other solely for the purposes reflected herein; neither is this Memorandum intended except as may otherwise be specifically set forth, to create a relationship of agency, supervision, representation, joint venture, labor contract, or employment between the Parties.
A contract stating that a person is an independent contractor is determinative absent a showing that the contract (1) is a sham or subterfuge meant to conceal the true legal status of the parties, or (2) has been modified by a subsequent agreement by the parties. Newspapers, Inc. v. Love, 380 S.W.2d 582, 587 (Tex. 1964); Weidner v. Sanchez, 14 S.W.3d 353, 373 (Tex. App.-Houston [14th Dist.] 2000, no pet.). The Memorandum also states that "Irani has no right to control, direct, or supervise the nature or manner of [Gooding's] employees' daily activities in the performance of services to [Irani]"; that "Irani will not supply [Gooding] with workers or employees to perform labor within [Gooding's] usual course of business"; that there is "no joint employment relationship between [Gooding], Irani, its officers, agents, directors, or representative's for [Gooding's] employees"; and, that it is governed by California law.
Appellees provided no evidence that the Memorandum was a sham or subterfuge designed to conceal their true legal status. So, the Memorandum's language determines the relationship between Gooding and Irani. Weidner, 14 S.W.3d at 373.
The FAIA was not signed by Gooding. Appellees contend that Irani acted as Gooding's agent when signing the FAIA. Appellees carry the burden to prove that Irani acted as Gooding's agent. See In re Labatt Food Servs., L.P., 279 S.W.3d at 643. The Memorandum between Gooding and Irani establish that Gooding was an independent contractor. No evidence shows words or conduct by Gooding granting Irani agency. As a result, it cannot be said that Irani had actual authority to act on Gooding's behalf. Reliant Energy Servs., Inc., 336 S.W.3d at 783.
b. Apparent Authority
To determine whether apparent authority exists we examine the conduct of the alleged principal and the reasonableness of the third party's assumptions about the authority. Gaines, 235 S.W.3d at 182-83. Declarations made by the agent to a third party, without more, are "incompetent to establish either the existence of the alleged agency or the scope of the alleged agent's authority." See id. at 183-84. To bind Gooding, Appellees must show that Gooding held out Irani as having authority to act on behalf of Gooding, Gooding must have knowingly permitted Irani to hold itself out as having that authority or acted with a sufficient lack of care to give Irani the indicia of authority. Baptist Mem'l Hosp. Sys. v. Sampson, 969 S.W.2d 945, 948- 49 (Tex. 1998). Appellees must show that Gooding's conduct caused them to reasonably believe that Irani had the authority to act for him. Id. at 949. A principal's "acts" can include participation, knowledge, or acquiescence. Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 672 (Tex. 1998). The principal must have had full knowledge of all material facts. Gaines, 235 S.W.3d at 182-83. Without the principal's participation, knowledge, or acquiescence, no simple combination of circumstances, including the acts of the alleged agent, will serve as the predicate for apparent authority. Reliant Energy Servs., 336 S.W.3d at 784. Apparent authority does not exist when a contracting party has notice of limitations on any such power. Douglass v. Panama, Inc., 504 S.W.2d 776, 779 (Tex. 1974).
Nothing Gooding did shows that Irani had the authority to act on Gooding's behalf. Appellees point to Irani's actions to show that it had the authority to act for Gooding but do not identify any acts by Gooding. See Sampson, 969 S.W.2d at 949- 50. Appellees point to Gooding's history as a consultant for Irani as proof that he knew of Irani's conduct. But an ongoing working relationship is not evidence of authority. See R&R Marine, Inc. v. Max Access, Inc., 377 S.W.3d 780, 790-91. (Tex. App.-Beaumont 2012, no pet.). We therefore find that Irani did not have apparent authority to act on Gooding's behalf.
2. Third-Party Beneficiary
In the alternative, Appellees contend that Gooding was a third-party beneficiary of the FAIA, so he is bound by its terms. The law presumes that parties to an agreement enter into the agreement only for themselves. In re Bayer Materialscience, LLC, 265 S.W.3d 452, 456 (Tex. App.-Houston [1st Dist.] 2007, no pet.). For there to be a third-party beneficiary the contract must clearly express an intent to confer a direct benefit to the third party. Stine v. Stewart, 80 S.W.3d 586, 589 (Tex. 2002). A generic description of potential parties covered by a forum-selection clause does not create a third-party beneficiary status for all who meet that description. ConocoPhilips Co. v. Graham, No. 01-11-00503-CV, 2012 WL 1059084, at *4 (Tex. App.-Houston [1st Dist.] Mar. 29, 2012, no pet.). Courts must look solely at the contract's language to determine whether there was an intended benefit for a third party. First Bank v. Brumitt, 519 S.W.3d 95, 102 (Tex. 2017).
It is not enough for a third party to benefit to conclude that they are a third-party beneficiary. Id. Nor do courts presume an intent to bestow a direct benefit. Id. at 103. Doubts about whether there was intent by the contracting parties to benefit a third party are resolved against finding third-party beneficiary status. Id. The signatories to the contract must intend for the third-party beneficiary to enforce the agreement if necessary. In re Bayer Materialscience, 265 S.W.3d at 457. Unless the agreement expresses the intent to confer a benefit upon the third party and for the third party to be able to enforce the agreement, the third party is no more than an incidental beneficiary. Id.; see Brumitt, 519 S.W.3d at 102.
Irani and Martin are the parties to the FAIA. The FAIA identifies Irani as "Company." It also defines "Company Group" to include Irani and its subsidiaries, affiliates and interrelated companies, their partners, contractors and subcontractors and their agents, officers, directors, managers, servants and employees and the heirs, executors, administrators, legal representatives, successors and assigns. While Company Group includes Gooding, that does not make him a party to the agreement. ConocoPhilips Co., 2012 WL 1059084, at *4. Company Group is only mentioned in the FAIA to state that Irani will ensure Company Group follows all laws and rules, Irani will indemnify Martin from any claims, and that Irani will ensure that Company Group will maintain the necessary insurance coverage described by the agreement. "First, the presumption in contract law is against finding that a stranger to a contract is a third-party beneficiary, so as to confer legal standing to enforce the contract's stated obligations, even if the contract expressly states that one of the signatories may have obligations to that stranger." In re Bayer Materialscience, 265 S.W.3d at 456 (citing MCI Telecomm. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 652 (Tex. 1999)).
The contract language does not show an intent to bestow a benefit directly to Gooding and for Gooding to be able to enforce the FAIA against the signatories. See Brumitt, 519 S.W.3d at 102. It is not enough that the FAIA's generic description for Company Group includes Gooding. ConocoPhilips Co., 2012 WL 1059084, at *4. Because we do not presume an intent to bestow a direct benefit, and there is no evidence of that intent here, we cannot find that Gooding is a third-party beneficiary. Brumitt, 519 S.W.3d at 102-03.
2. Gooding's contacts with Texas
Personal jurisdiction may be general or specific. Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., 141 S.Ct. 1017, 1024 (2021). Courts exercising specific personal jurisdiction may hear claims arising out of or relating to a nonresident defendant's contacts with the forum state. Id. at 1025 (quoting Bristol-Myers Squibb Co. v. Superior Ct. of Cal., 137 S.Ct. 1773, 1780 (2017)).
A court may exercise general personal jurisdiction over a nonresident defendant when the defendant is "essentially at home" in the forum state. Id. at 1024; see Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). A court exercising general personal jurisdiction may hear all claims against a nonresident defendant. Ford Motor Co., 141 S.Ct. at 1024 .
a. Specific Jurisdiction
When determining whether specific jurisdiction exists "courts must consider the relationship between the defendant, the forum state, and the litigation." Searcy v. Parex Res., Inc., 496 S.W.3d 58, 67 (Tex. 2016). For a Texas forum to exercise specific jurisdiction over Gooding, (1) Gooding must have made minimum contacts with Texas by purposefully availing himself of the privilege of conducting activities here, and (2) Gooding's liability must have arisen from or related to those contacts. Coleman, 83 S.W.3d at 806. Before deciding whether Gooding's liability arose from or related to its forum contacts, we must first examine the nature of those contacts and whether Gooding purposefully availed himself of the privilege of conducting business here. See Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784-85 (Tex. 2005).
A single contact can support jurisdiction if that contact creates a substantial connection with the state, but jurisdiction cannot be exercised where the contact is only an attenuated affiliation with the state. Drugg, 221 S.W.3d at 577 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). When determining whether a defendant purposefully availed themself of the privilege of conducting activities here, we consider: "(1) the relevant contacts are those of the defendant, and the unilateral activity of another person or a third party is not pertinent; (2) the contacts that establish purposeful availment must be purposeful rather than random, fortuitous, isolated, or attenuated; and (3) the defendant must seek some benefit, advantage, or profit by "availing" itself of the jurisdiction." Searcy, 496 S.W.3d at 67. The due-process requirement for purposeful availment requires that a nonresident defendant must have acted purposefully directed toward the forum state. See Asahi Metal Indus. Co. v. Superior Ct. of Cal., 480 U.S. 102, 112 (1987). In determining whether the defendant purposefully directed action toward Texas, we may look to conduct beyond the business transaction at issue: "[a]dditional conduct of the defendant may indicate an intent or purpose to serve the market in the forum State." Id.
Personal jurisdiction comports with due process when (1) the nonresident defendant has minimum contacts with the forum state, and (2) asserting jurisdiction complies with traditional notions of fair play and substantial justice. Drugg, 221 S.W.3d at 575 (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)). A defendant establishes minimum contacts with a forum when it "purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." Retamco Operating, 278 S.W.3d at 338. A nonresident's contacts can create general or specific personal jurisdiction. Id. Continuous and systematic contacts with a state creates general jurisdiction, while specific jurisdiction exists when the cause of action arises from or relates to purposeful activities in the state. Id.
When determining whether a nonresident purposefully availed themself of the privilege of conducting activities in Texas, we consider three factors:
First, only the defendant's contacts with the forum are relevant, not the unilateral activity of another party or a third person. Second, the contacts relied upon must be purposeful rather than random, fortuitous, or attenuated. Thus, sellers who reach out beyond one state and create continuing relationships and obligations with citizens of another state are subject to the jurisdiction of the latter in suits based on their activities. Finally, the defendant must seek some benefit, advantage or profit by availing itself of the jurisdiction.Retamco Operating, 278 S.W.3d at 338-39. Irani, a California company, contracted with Gooding, a California resident, to work on a well in Louisiana. That well is owned and operated by Appellees, who are Texas-based companies.
Cardinal contends that the Texas long-arm statute authorizes the exercise of jurisdiction over Gooding based on his doing business in Texas by contracting with Cardinal and Arcadia. BMC Software, 83 S.W.3d at 795. Gooding argues that he did not do business in Texas because he did not contract with a Texas company or employ any Texas residents for the work he agreed to complete. See Tex. Civ. Prac. & Rem. Code § 17.042(1), (3).
Even if Gooding were doing business in Texas as defined by section 17.042 Cardinal must prove that Gooding has established minimum contacts with Texas. BMC Software, 83 S.W.3d at 795. For specific jurisdiction to apply, Gooding's contacts with Texas must be substantially connected to the operative facts of the litigation. Drugg, 221 S.W.3d at 585. The plaintiffs had the initial burden of pleading sufficient allegations to bring the nonresident, Gooding, within the reach of Texas's long-arm statute. Old Republic Nat'l Title Ins., 549 S.W.3d at 559. To establish specific jurisdiction, Cardinal must show that Gooding purposefully availed himself of the benefits of conducting business in Texas and that the contacts he had with Texas are substantially connected to these allegations. Searcy, 496 S.W.3d at 70. The allegations against Gooding are: (1) breach of indemnity; (2) breach of contract; (3) negligence; and (4) gross negligence.
Cardinal relies on these documents: invoices sent from Gooding to Irani that Irani then sent to Cardinal, an email Irani sent to Cardinal employees that Gooding was copied on; and daily reports Gooding sent to Arcadia and Cardinal informing them of the events that took place at the GH-001 well. See Coleman, 83 S.W.3d at 807; M&F Worldwide Corp. v. Pepsi-Cola Metro. Bottling, 512 S.W.3d 878, 887 (Tex. 2017); Searcy, 496 S.W.3d at 74-75. Appellees also point to a conference call with Gooding, Irani, and Cardinal about the GH-001 well, and subcontractors and vendors that Gooding hired to work on the GH-001 well.
Telephone calls, like emails, do not establish purposeful availment by a nonresident. M&F Worldwide, 512 S.W.3d at 887. Gooding's communications only had a connection with Texas because that is where the recipient, Cardinal, was located. Id.; see Searcy, 496 S.W.3d at 74-75; Michiana, 168 S.W.3d at 787. As for the vendors, hiring workers from Texas for work in Louisiana is not enough to show purposeful availment. The record reflects that Gooding hired vendors and Cardinal hired vendors for the work on the GH-001 well. We look at Gooding's contacts with the forum state itself, not his contacts with persons who reside there. Walden v. Fiore, 571 U.S. 277, 285 (2014); Searcy, 496 S.W.3d at 73-75; Coleman, 83 S.W.3d at 807-08. Gooding's contacts in Texas were to conduct business in Louisiana, not Texas. Gooding's contacts with Texas were incidental because the contacts only occurred because the workers hired resided there. There is no evidence that Gooding sought to avail himself of the benefits of conducting business within Texas. See Searcy, 496 S.W.3d at 70.
b. General Jurisdiction
General jurisdiction exists when a defendant's contacts in a forum are continuous and systematic so that the forum may exercise personal jurisdiction over the defendant even if the cause of action did not arise from or relate to activities conducted with Texas. BMC Software, 83 S.W.3d at 796. The defendant's contacts with Texas must be so continuous and systematic as to render him essentially at home in the forum state. See Daimler AG v. Bauman, 571 U.S. 117, 127 (2014). "General jurisdiction requires a showing that the defendant conducted substantial activities within the forum, a more demanding minimum contacts analysis than for specific jurisdiction." CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996). Even when a defendant's contacts may be considered continuous and systematic, they will not confer general jurisdiction if they do not render a defendant essentially "at home" in the forum state. See Old Republic Nat'l Title Ins., 549 S.W.3d at 565. Appellees contend that Gooding's contacts with Texas satisfy the requirements for general jurisdiction because Gooding communicated with people in Texas, used Texas vendors, and attended a meeting in Houston in 2014.
Gooding has been a contractor for Irani on wells in California, Wyoming, Colorado, Louisiana, Mississippi, Oregon, and Washington. In the last decade, Gooding has traveled to Texas once, for a one-day meeting with Cardinal about an unrelated project. Gooding and Irani's memorandum also included a clause that California law would control in any dispute between them. For the reasons stated for specific jurisdiction, Appellees have failed to establish the minimum contacts necessary to subject Gooding to jurisdiction in Texas. Moreover, Gooding's sporadic communications, hiring of persons from Texas to work on a job in another state, and attending a single meeting before the relevant events here do not constitute continuous and systematic contacts sufficient to confer general jurisdiction in Texas. See Old Republic Nat'l Title Ins., 549 S.W.3d at 565.As a result, Gooding is not subject to the jurisdiction of Texas courts.
V. Conclusion
We affirm the trial court's order denying Irani's special appearance. We reverse and render judgment dismissing without prejudice Appellee's claims against Gooding.