Opinion
NO. 4:01-CV-0329-A
July 30, 2001
MEMORANDUM OPINION and ORDER
Came on for consideration the motion of defendant, Thomas More Prep-Marian High, Inc., to dismiss for lack of personal jurisdiction. The court, having considered the motion, the response of plaintiffs, Kenneth Ryan Storm ("Ryan"), Iraida Storm ("Mrs. Storm"), and Kenneth E. Storm, the reply, the record, and applicable authorities, finds that the motion should be granted.
Plaintiffs' original petition names Thomas More Prep-Marian High, Inc., and "Thomas More Prep-Marian a/k/a Thomas More Prep-Marian High" as defendants. Plaintiff does not dispute that the latter are names used by the former and are not separate legal entities.
I. Plaintiffs'Claims
On March 20, 2001, plaintiffs filed their original petition in the 17th Judicial District Court of Tarrant County, Texas.
The action was brought before this court by notice of removal filed April 23, 2001.
Plaintiffs allege:
Beginning on or about May 3, 1993, defendant made verbal and written solicitations to Ryan's parents, seeking his enrollment at Thomas More Prep-Marian High School ("TMP"). Plaintiffs agreed to pay more than $7,000 for Ryan to be a boarder at TMP. In the fall of 1993, Ryan, who was then fourteen years old, began attending TMP. While there, he was sexually abused by a faculty member, Father Ronald Gilardi. As a coping mechanism, Ryan repressed memories of his experiences. In December 1999, he had a spontaneous recovery of the memories of his abuse and promptly contacted law enforcement authorities. Father Gilardi has pleaded guilty to criminal charges arising out of his contact with Ryan.
Plaintiffs allege claims for negligence, deceptive trade practices, breach of warranty, and breach of contract.
II. Grounds of the Motion
Defendant urges that the court lacks personal jurisdiction over it because it lacks sufficient contacts with the State of Texas and because maintenance of the suit would offend traditional notions of fair play and substantial justice. Plaintiffs' claims do not arise from defendant's contacts with Texas, but from the assaults that occurred in Kansas. And, defendant does not have continuous, systematic contacts with Texas sufficient to subject it to general jurisdiction here.
III. Applicable Law
When a nonresident defendant presents a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that in personam jurisdiction exists. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir.), cert. denied, 513 U.S. 930 (1994); Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985); D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 545-46 (5th Cir. 1985). The plaintiff need not, however, establish personal jurisdiction by a preponderance of the evidence; prima facie evidence of personal jurisdiction is sufficient. WNS, Inc. v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989); Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir. 1982). The court may resolve a jurisdictional issue by reviewing pleadings, affidavits, interrogatories, depositions, oral testimony, exhibits, any part of the record, and any combination thereof. Command-Aire Corp. v. Ontario Mechanical Sales Serv., Inc., 963 F.2d 90, 95 (5th Cir. 1992). Allegations of the plaintiff's complaint are taken as true except to the extent that they are contradicted by defendant's affidavits. Wyatt, 686 F.2d at 282-83 n. 13 (citing Black v. Acme Markets, Inc., 564 F.2d 681, 683 n. 3 (5th Cir. 1977)). Any genuine, material conflicts between the facts established by the parties' affidavits and other evidence are resolved in favor of plaintiff for the purposes of determining whether a prima facie case exists. Jones v. Petty-Ray Geophysical Geosource, Inc., 954 F.2d 1061, 1067 (5th Cir.), cert. denied, 506 U.S. 867 (1992); Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir. 1990).
In a diversity action, personal jurisdiction over a nonresident may be exercised if (1) the nonresident defendant is amenable to service of process under the law of a forum state, and (2) the exercise of jurisdiction under state law comports with the due process clause of the Fourteenth Amendment. Wilson, 20 F.3d at 646-47; Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1166 (5th Cir. 1985) (quoting Smith v. DeWalt Prods. Corp., 743 F.2d 277, 278 (5th Cir. 1984)). Since the Texas long-arm statute has been interpreted as extending to the limits of due process, the only inquiry is whether the exercise of jurisdiction over the nonresident defendant would be constitutionally permissible. Bullion, 895 F.2d at 216;Stuart, 772 F.2d at 1189.
See, e.g., Guardian Royal Exchange Assurance Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991);Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990);Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 200 (Tex. 1985).
For due process to be satisfied, (1) the nonresident defendant must have "minimum contacts" with the forum state resulting from an affirmative act on the defendant's part, and (2) the contacts must be such that the exercise of jurisdiction over the person of the defendant does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
The minimum contacts prong of the due process requirement can be satisfied by a finding of either "specific" or "general" jurisdiction over the nonresident defendant. Bullion, 895 F.2d at 216. For specific jurisdiction to exist, the foreign defendant must purposefully do some act or consummate some transaction in the forum state and the cause of action must arise from or be connected with such act or transaction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). Even if the controversy does not arise out of or relate to the nonresident defendant's purposeful contacts with the forum, general jurisdiction may be exercised when the nonresident defendant's contacts with the forum are sufficiently continuous and systematic as to support the reasonable exercise of jurisdiction. See, e.g.,Helicópteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416 (1984); Keeton v. Hustler Magazine. Inc., 465 U.S. 770, 779 (1984); Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952). When general jurisdiction is asserted, the minimum contacts analysis is more demanding and requires a showing of substantial activities within the forum state. Jones, 954 F.2d at 1068.
The second prong of the due process analysis is whether exercise of jurisdiction over the nonresident defendant would comport with traditional notions of fair play and substantial justice.International Shoe, 326 U.S. at 316. In determining whether the exercise of jurisdiction would be reasonable such that it does not offend traditional notions of fair play and substantial justice, the Supreme Court has instructed that courts look to the following factors: (1) the burden on the defendant, (2) the interests of the forum state, (3) the plaintiff's interest in obtaining relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) shared interest of the several states in furthering fundamental substantive social policies. Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113 (1987) (citingWorld-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)).
IV. Facts Viewed in the Light Most Favorable to Plaintiffs
In 1993, defendant learned that a boarding school in Arkansas would be closing at the end of the year. Defendant was invited to make, and did make, a presentation at the school to try to recruit students. Defendant sent form letters to the parents of seven students attending the school in Arkansas. One letter, dated May 3, 1993, was sent to Mrs. Storm in Texas, because that is where she resided while her son attended the Arkansas school. In the following months, Mrs. Storm initiated many telephone conversations with defendant regarding the prospect of Ryan's attendance at TMP. She received additional written materials from defendant. Ryan and one other boy whose parents lived in Texas transferred to TMP.
There is no evidence that Kenneth E. Storm had any involvement in the decision to send Ryan to TMP or that any correspondence was ever sent to him.
The written representations upon which plaintiffs rely come from the May 3, 1993, form letter, which provides, in pertinent part:
Atmosphere is one of family. Our student body represents several states and numerous countries all of which blend into a strong community of friends. The Christian staff of priests, sisters, and lay people nurture this special community as they teach the value of Christian leadership through service.
Pls.' App. at 7. The author of the letter believed that everything she put in it was truthful and accurate at the time she sent it. And, a July 19, 1993, letter states, in pertinent part:
[TMP] has prided itself on being a school that develops a family spirit among its students and [their] parents. The school is large enough to offer a varied curriculum, but it is also small enough for teachers and staff to know students by name. Teachers are willing to go the extra mile and give students the extra help they need to do their best. Preparing students for the future is very important to all of us.Id. at 12. After Mrs. Storm enrolled Ryan, she received a handwritten note dated August 10, 1993, providing "[t] hank you for trusting us enough to enroll Ryan at [TMP]. We will take good care of your precious son." Id. at 9.
Other than correspondence related to the enrollment of Ryan, defendant has corresponded by mail with persons residing in Texas in response to requests for information about TMP. It has also periodically solicited contributions from alumni, friends, and family, some of whom reside in Texas. In ten years, defendant sent 251 mail-outs to Texas, received seventy-six responses from forty-eight cities, and collected $33,711. (The goal of a five-year campaign begun in 1996, called "Excellence 2000," was $700,000.)
Defendant is a Kansas corporation with its principle and only place of business in Hays, Kansas. Defendant does not maintain, and has never maintained, any offices or facilities of any type in Texas. Defendant does not have, and has never had, any employees, agents, or servants in Texas. Defendant does not maintain, and has not maintained, an agent for service of process in Texas. Defendant owns no assets, and has never had any assets, in Texas. Defendant does not maintain, and has never maintained, any bank accounts in Texas. Defendant does not have, and has never had, a telephone listing or address in Texas.
Defendant has never advertised in Texas, except for two ads placed in the newspaper of the Catholic Diocese of Dallas. The first ad ran in March of 2000. Because it was virtually illegible, the ad was run again in May of 2000. Defendant did not receive any responses to the advertisements.
Defendant maintains a website giving information about TMP. The inquiries defendant has received have come off association websites. Inquiries are forwarded to defendant and defendant then mails information packets to students who might apply. Approximately ten such packets have been mailed to Texas residents.
Only three students from Texas have ever attended TMP. Ryan and one other attended in 1993 and the third attended in approximately 1997.
V. Law Applied to the Facts
A. Specific Jurisdiction
Specific jurisdiction exists where a defendant purposefully does some act or consummates some transaction in the forum state and the cause of action arises from or is connected with such act or transaction.Burger King, 471 U.S. at 475. Plaintiffs contend that the unsolicited May 3 letter alone is sufficient to establish personal jurisdiction over defendant in Texas. Pls.' Resp. at 6. Nevertheless, they additionally cite the facts that Mrs. Storm entered into a contract with defendant to enroll Ryan, that she received the August 10 thank you note, and that plaintiffs made substantial tuition payments to defendant from Texas to support their jurisdiction claim.Id. at 6-7. They cite to cases holding that a single act by a defendant may be enough to confer personal jurisdiction. The cases they cite are distinguishable. Electrosource, Inc. v. Horizon Battery Technologies, Ltd., 176 F.3d 867 (5th Cir. 1999), recognizes that a contract with an out-of-state party is not automatically enough to subject that party to jurisdiction. 176 F.3d at 872. The court must consider the actual course of dealing between the parties. Id. In that case, the Texas resident was to provide technical support, train employees, design manufacturing facilities, and regulate product quality, wholly or in substantial part in Texas. Id. At least six different representatives of the nonresident traveled to Texas to negotiate the contract. Id. In finding jurisdiction, the court distinguished the Hydrokinetics case where the nonresident was not to perform in Texas. Id. at 873.
The breach of contract cases do not support plaintiffs' position. Texas courts have held that a contract that is partially performable in Texas by reason of a contractual obligation to make payments there is not enough to sustain the minimum contacts requirement. Hydrokinetics, Inc. v. Alaska Mech., Inc., 700 F.2d 1026 (5th Cir. 1983); Computer Synergy Corp. v. Bus. Sys. Prods., Inc., 582 S.W.2d 573, 576 (Tex.App. — Houston [1st Dist.] 1979, no writ) (citing U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760 (Tex. 1977)). The facts of this case simply do not show that defendant was to perform any activities in Texas, much less any substantial ones.
Plaintiffs alternatively argue that specific jurisdiction exists because defendant committed a tort against plaintiffs in Texas. A single act aimed at a resident can subject a nonresident tort feasor to jurisdiction where the tort is expressly aimed at a particular forum and the defendant can reasonably anticipate being hailed into court there,Calder v. Jones, 465 U.S. 783, 789 (1984); Lewis v. Fresne, 252 F.3d 352 (5th Cir. 2001). In Fresne, the defendant intentionally defrauded the plaintiff by lying about his ownership of certain property. The court noted that the actual content of the defendant's communications gave rise to an intentional tort cause of action. 252 F.3d at 359. See also Wien Air Alaska. Inc. v. Brandt, 195 F.3d 208, 213 (5th Cir. 1999). Both Fresne andWien Air distinguish other cases where communications were insufficient to establish personal jurisdiction. This case is more like those distinguished, where the communications were merely soliciting business from the forum or negotiating a contract.See M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 410-11 (Tex.App.-Corpus Christi 1999, no pet.).
Plaintiffs claim that defendant's representations give rise to their tort claims. However, their claims do not arise directly out of the alleged misrepresentations. Rather, plaintiffs would have no cause of action but for the abuse of Ryan that took place in Kansas. Moreover, the statements upon which plaintiffs rely are expressions of opinion, rather than material fact, upon which fraud must be based. See Clardy Mfg. Co. v. Marine Midland Bus. Loans, Inc., 88 F.3d 347, 359 (5th Cir. 1996); Presidio Enter., Inc. v. Warner Bros. Distrib. Corp., 784 F.2d 674, 678-79 (5th Cir. 1986). Plaintiffs do not contend that the statements were false when made, but only that they turned out to be false when Ryan was abused. Even that conclusion though does not follow. The fact that Father Gilardi molested Ryan does not mean that any of the statements regarding TMP were false.
B. General Jurisdiction
Plaintiffs also argue that defendant is subject to general jurisdiction based on continuous and systematic contacts with Texas. See Alpine View Co. Ltd. v. Atlas Copeo AB, 205 F.3d 208, 217 (5th Cir. 2000). To satisfy general jurisdiction, the contacts must be substantial, continuous, and systematic. Id. Even when viewed in the light most favorable to plaintiffs, the contacts in this case pale in comparison to those cited in cases likeHelicopteros and Wilson, where general jurisdiction was found not to exist. That is, the contacts here are simply not substantial, continuous, and systematic enough to support the exercise of general jurisdiction.
C. Traditional Notions of Fair Play and Substantial Justice
Even if the minimum contacts prong of the due process requirement was satisfied, the court would not find that the exercise of jurisdiction would comport with traditional notions of fair play and substantial justice. International Shoe, 326 U.S. at 316. Because of the absence of the necessary predicate to the exercise of personal jurisdiction, the due process clause divests the court of its power to render a valid judgment. World-Wide Volkswagen, 444 U.S. at 294.
VI. ORDER
For the reasons discussed in this memorandum opinion and order,
The court ORDERS that defendant's motion to dismiss be, and is hereby, granted and plaintiff's claims be, and are hereby, dismissed for lack of personal jurisdiction.