Opinion
No. 05-09-00867-CV
Opinion Filed April 7, 2010.
On Appeal from the 397th Judicial District Court, Grayson County, Texas, Trial Court Cause No. 06-1769-336.
Before Justices O'NEILL, LANG, and MYERS.
Memorandum Opinion
Appellant Charles Paternostro appeals the trial court's order sustaining Lynn Olcott's special appearance and dismissing Paternostro's claims against Olcott. In a single issue, Paternostro complains the trial court erred in granting Olcott's special appearance because the facts support personal jurisdiction. Specifically, he argues that the record supports specific jurisdiction because Olcott directed tortious activity towards a Texas resident and caused foreseeable damage in Texas. We conclude that the trial court did not have personal jurisdiction over Olcott. Because all dispositive issues are well settled in law, we issue this memorandum opinion. See Tex. R. App. P. 47.2(a), 47.4. The trial court's judgment is affirmed.
I. FACTUAL AND PROCEDURAL BACKGROUND
Charles Paternostro is a Texas resident and an insurance agent for Allianz Life Insurance Company. On June 4, 2003 and August 12, 2004, Lynn Olcott, a Florida resident, purchased two annuity policies from Allianz Life Insurance Company. According to the undisputed facts, Olcott purchased these annuities while she was residing in New York. On November 1, 2005, Olcott mailed and faxed a complaint to Allianz Life Insurance Company located in Minnesota to recover her funds. In the letter addressed to "Allianz Customer Service/Complaint Department," she claimed that she was "exploited and taken advantage of by one of [Allianz's] representatives. Namely, one Charles Paternostro" and requested the return of the money she paid on June 4, 2003 and August 12, 2004.
Thereafter, Paternostro filed suit in Grayson County, Texas alleging libel per se, and tortious interference with business relationship. Olcott filed a special appearance and sworn motion to dismiss for lack of jurisdiction, alleging that she did not have the minimum contacts with Texas required for a Texas court to exercise jurisdiction over her. Specifically, Olcott argued that she never resided in Texas and her actions were never directed at Texas. In the Paternostro's verified response to the special appearance, he argued that the contacts were sufficient to establish specific jurisdiction. Paternostro alleged Olcott had multiple phone conversations regarding the annuities with Paternostro while Paternostro was in Texas, received information about the annuity by mail from Texas, and mailed the annuity contracts to Paternostro in Texas. On April 21, 2009, the court sustained Olcott's special appearance and granted the sworn motion to dismiss for lack of jurisdiction.
II. IN PERSONAM JURISDICTION
A. Standard of Review
The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provision of the Texas long-arm statute. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002). A nonresident defendant challenging personal jurisdiction through a special appearance carries the burden of negating all bases of personal jurisdiction. Id. Whether a court has personal jurisdiction over a defendant is a question of law. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 805-806 (Tex. 2002) (citing BMC Software, 83 S.W.3d at 794). In resolving this question of law, a trial court must frequently resolve questions of fact. Coleman, 83 S.W.3d at 806 (citing BMC Software, 83 S.W.3d at 794). Appellate courts review the trial court's factual findings for legal sufficiency and review the trial court's legal conclusions de novo. BMC Software, 83 S.W.3d at 794. Where the record contains no findings of fact and conclusions of law, we must imply all findings of fact necessary to support the trial court's findings that are supported by the evidence. Id. at 795.
B. Applicable Law
The Texas long-arm statute permits Texas courts to exercise jurisdiction over a nonresident defendant that does business in Texas. See Tex. Civ. Prac. Rem. Code Ann. §§ 17.041-.045 (Vernon 1997). The long-arm statute defines doing business" as: (1) contracting by mail or otherwise with a Texas resident with performance either in whole or in part in Texas; (2) commission of a tort in whole or in part in Texas; (3) recruitment of Texas residents directly or through a intermediary located in Texas; or (4) performance of any other act that may constitute doing business. Id. The broad language of the long-arm statute permits Texas courts to exercise jurisdiction "as far as the federal constitutional requirements of due process will permit." BMC Software, 83 S.W.3d at 795.
Personal jurisdiction over nonresident defendants meets the due process requirements of the Constitution 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. Spir Star AG v. Kimich, No. 07-0350, 2010 WL 850151, at *2 (Tex. March 12, 2010); BMC Software, 83 S.W.3d at 795 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Personal jurisdiction exists if the nonresident defendant's minimum contacts give rise to either general or specific jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-414 (1984); BMC Software, 83 S.W.3d at 795-796. Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990). Specific jurisdiction is established if the nonresident defendant's alleged liability arises from or is related to activity conducted within the forum. BMC Software, 83 S.W.3d at 796. The minimum contacts analysis for specific jurisdiction focuses on the relationship among the defendant, the forum, and the litigation. Spir Star, 2010 WL 850151, at *3; Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 790 (Tex. 2005).
The "touchstone" of jurisdictional due process analysis is "purposeful availment." Michiana, 168 S.W.3d at 784 (citing Hanson v. Denckla, 357 U.S. 235, 253 (1958)). "[I]t 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." Michiana, 168 S.W.3d at 784 (quoting Hanson, 357 U.S. at 253). The Texas Supreme Court has addressed the proper application of the concept of "purposeful availment" outlining three important aspects to be considered. First, it is only the defendant's contacts with the forum that count: purposeful availment "ensures that a defendant will not be haled into a jurisdiction solely as a result of . . . the `unilateral activity of another party or a third person.'" Michiana, 168 S.W.3d at 785 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). Second, the acts relied upon must be "purposeful" rather than "random, isolated or fortuitous." Michiana, 168 S.W.3d at 785 (quoting Keeton v. Hustler Magazine Inc., 465 U.S. 770, 774 (1984)). Third, a defendant must seek some benefit, advantage or profit by "availing" itself of the jurisdiction. By invoking the benefit and protections of a forum's laws, a nonresident consents to suit there. Michiana, 168 S.W.3d at 785 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).
Finally, in addition to minimum contacts, the exercise of personal jurisdiction must comport with traditional notions of fair play and substantial justice. Spir Star, 2010 WL 850151, at *2; BMC Software, 83 S.W.3d at 795. The following factors are considered in making that determination: (1) the burden on the nonresident defendant; (2) the forum state's interest 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 substantive social policies. World-Wide Volkswagen, 444 U.S. at 292; Guardian Royal Exchange Assur., Ltd. v. English China Clays, 815 S.W.2d 223, 231 (Tex. 1991).
C. Application of Law to Facts
In his sole issue, Paternostro argues the trial court erred in granting Olcott's special appearance. Specifically, citing to Calder v. Jones, 465 U.S. 783 (1982), Paternostro contends personal jurisdiction is proper in Texas because the tortious actions of Olcott were "directed at damaging Paternostro, a Texas resident" and "would foreseeably have its most devastating effects in Texas, the State where Paternostro lived and worked."
The Texas Supreme Court has carefully analyzed the "effects jurisdiction" concept of specific jurisdiction that has developed based on Calder v. Jones. See Michiana, 168 S.W.3d at 789. The court noted the decision in Calder turned not only on the direction of the nonresident's intentional actions toward the forum of the resident, but, importantly, on facts reflecting a "substantial presence" in the forum. Id; see Spir Star, 2010 WL 850151, at *6 (holding that specific jurisdiction is proper in a product's liability suit when the manufacturer "intentionally directed" the product to the forum through the stream of commerce and there is"additional conduct" to show a "substantial connection" between the defendant and the forum state) (emphasis added.). Specifically, with regard to tortious actions, the decision in Michiana confirmed the rule that jurisdiction must turn on defendant's contacts, not where it "directed a tort." See Michiana, 168 S.W.3d at 789. Further, the court concluded that the analysis of whether the "tortfeasor knows that the brunt of the injury will be felt by a particular resident in the forum state" is not the operative core of the test. Id. at 788-89. Such "foreseeability is not a sufficient benchmark for exercising personal jurisdiction." Id. at 789 (citing Burger King, 471 U.S. at 474).
In Paternostro's brief before this court, he argues that specific jurisdiction is proper in Texas because Olcott's actions were intentionally directed to Texas and foreseeably caused damage in Texas. Although Paternostro was a Texas resident and Olcott had telephone conversations with Paternostro, nothing in the record demonstrates that Olcott had a "substantial presence" in Texas. See Michiana, 168 S.W.3d at 789. We conclude that the trial court did not err in granting Olcott's special appearance and motion to dismiss for lack of jurisdiction. We affirm the trial court's judgment.
III. CONCLUSION
The trial court did not err in granting Olcott's special appearance and motion to dismiss for lack of jurisdiction. We decide Paternostro's sole issue against him and affirm the trial court's judgment.