Opinion
No. 05-94-01498-CV.
Affirmed and Opinion filed July 31, 1995. DO NOT PUBLISH. Tex. R. App. P. 90.
Appeal from the 14th District Court, Dallas County, Texas, Trial Court Cause No. 94-3032-A.
Before Justices BAKER, KINKEADE, and JAMES. Opinion By Justice JAMES.
OPINION
AFI, S.A. filed a special appearance and motion for new trial after the trial court entered a default judgment for appellants (collectively the Woodards). The trial court set aside the default judgment previously entered and granted AFI's special appearance. In four points of error, the Woodards contend the trial court erred in granting AFI's special appearance. We conclude the trial court correctly held AFI did not have sufficient contacts with Texas to give a Texas court jurisdiction. We affirm the trial court's judgment.
FACTUAL AND PROCEDURAL BACKGROUND
AFI is a Swiss corporation, which has not designated a resident agent for service in Texas. Freddy Sidi is the president of AFI. AFI owns one-hundred percent of Western Alliance, a Texas corporation. In an earlier suit, the Woodards obtained a judgment for over one million dollars against Sidi and Linkoil International, Inc., a Texas corporation. The Woodards also obtained a separate judgment against Western Hemisphere. The judgments were based on the fraud of Sidi and Linkoil, and a finding that Western Hemisphere was the alter ego of Linkoil. The Woodards brought this suit against AFI claiming the relationship between AFI and Western Hemisphere justifies attributing Western Hemisphere's Texas activities to AFI. Therefore, the Woodards contend, because Western Hemisphere, Inc. is a resident of Texas, Texas courts have jurisdiction over AFI. The Woodards also requested the imposition of a constructive trust on AFI's shares of Western Alliance. They allege Linkoil fraudulently transferred the money obtained from them to Western Hemisphere and then to AFI, who used the money to purchase Western Alliance. The Woodards do not claim that Western Alliance is the alter ego of AFI.
The judgment is against Western Hemisphere Petroleum, Inc., Western Hemisphere Petroleum, Plc., Western Hemisphere Petroleum Ltd., Western Hemisphere Holding, Inc., Western Hemisphere Holding, Plc., and Western Hemisphere Holding, Ltd. For convenience we refer to all of the Western Hemisphere entities collectively as Western Hemisphere.
The Woodards served their original petition, request for admissions, a request for production of documents and a notice of oral deposition on the Texas Secretary of State on April 4, 1994. The secretary of state mailed the petition and attached discovery to AFI and received a return receipt on April 12, 1994. The trial court entered a no-answer default judgment against AFI on April 29, 1994.
On May 27, 1994, AFI filed a special appearance, a motion for new trial subject to special appearance, a motion for consolidation subject to special appearance, and Sidi's affidavit. The Woodards opposed the motion for new trial and objected to Sidi's affidavit. The record does not contain a ruling on these objections.
The Woodards later responded to AFI's special appearance. The Woodards attached their first request for admissions to this response. The request for admissions was served on AFI with the petition on April 4, 1994. AFI did not respond to the request for admissions. Consequently, the admissions were deemed admitted fifty days later. See Tex. R. Civ. P. 169(1). The Woodards' response to the special appearance: (1) alleged AFI waived its special appearance; (2) objected to Sidi's affidavit; and (3) objected to the admission of any evidence that conflicted with the deemed admissions. The record does not contain a ruling on the objections to Sidi's affidavit or to the objection to evidence conflicting with the deemed admissions.
On June 16, 1994, the trial court held the special appearance hearing. There is no statement of facts from the hearing. On June 21, 1994, the trial court granted the special appearance, dismissed the case for want of jurisdiction, granted the motion for new trial "to the extent necessary and only to the extent necessary to enforce dismissal," and vacated the default judgment.
The record contains a "statement of facts of bill of exception" in which Steven A. Hollis, attorney for the Woodards testifies that there was no live testimony or other documentary evidence adduced at the hearing, and that the special appearance was submitted upon the pleadings and the affidavits filed on or before the day of the hearing.
THE WOODARDS' CONTENTIONS
The Woodards contend the trial court erred in granting the special appearance. They argue there was no evidence or insufficient evidence to prove AFI did not conduct business in Texas sufficient to subject AFI to the personal jurisdiction of Texas courts. The Woodards argue AFI did not sufficiently plead that it was not subject to the jurisdiction of Texas courts.
The Woodards contend the requests for admissions were deemed admitted and conclusively established the court's jurisdiction over AFI. Further, the Woodards contend the trial court erred in admitting any evidence AFI offered in support of its special appearance that conflicted with the deemed admissions.
The Woodards contend AFI waived its special appearance by filing motions before filing the special appearance. Further, the Woodards argue AFI limited its special appearance to only some of the claims against AFI. Therefore, the Woodards argue, AFI waived its special appearance on the remaining claims. Finally, the Woodards contend the trial court abused its discretion by granting AFI's motion for new trial because the granting of AFI's special appearance vacated the previous judgment and there was no need to grant the motion for new trial.
WAIVER OF THE SPECIAL APPEARANCE
In point of error two, the Woodards contend AFI filed its motion for new trial subject to special appearance, its motion for consolidation subject to special appearance, and Sidi's affidavit before filing its special appearance. Accordingly, they argue, AFI waived its special appearance.
Rule 120a of the Texas Rules of Civil Procedure governs special appearances in Texas. See Tex. R. Civ. P. 120a. Rule 120a provides that other pleas, pleadings, and motions, if made subject to the special appearance, may be filed without entering a general appearance. AFI's motions expressly state they are subject to the special appearance. AFI did not waive its special appearance by filing these motions. Koch Graphics, Inc. v. Avantech, Inc., 803 S.W.2d 432, 433 (Tex.App.-Dallas 1991, no writ). Additionally, all the motions, including the special appearance, show a file stamp of May 27, 1994 at 2:42 P.M. The record does not support the Woodards contention that AFI did not comply with rule 120a. We overrule point of error two.
All future references to the rules are to the Texas Rules of Civil Procedure unless otherwise noted.
In point of error three, the Woodards contend AFI limited its special appearance to only some of the claims asserted against AFI, and AFI generally appeared with respect to the remaining claims. The special appearance states "this special appearance is made to all the claims asserted by plaintiffs wherein plaintiffs seek to impose liability on this defendant for judgments against Linkoil International, Inc. and Western Hemisphere Petroleum, Inc."
The Woodards argue that in addition to seeking to hold AFI liable on the Woodards' judgments against Linkoil and Western Hemisphere Petroleum, Inc., the Woodards also sought to impose liability against AFI for the judgments against Western Hemisphere Holding, Ltd. and the imposition of a constructive trust on the stock of Western Alliance held by AFI. A constructive trust is an equitable remedy based on the court's concern for preventing unjust enrichment. Tripp Village Joint Venture v. MBank Lincoln Centre, 774 S.W.2d 746, 750 (Tex.App.-Dallas 1989, writ denied). A constructive trust is imposed by law where the person holding legal title would profit from a wrong or would be unjustly enriched if they were permitted to keep the property. Tripp Village, 774 S.W.2d at 750. Imposition of a constructive trust is not a separate cause of action but a remedy derived from some other cause of action.
Here, the Woodards alleged Linkoil fraudulently transferred funds from Linkoil to Western Hemisphere Petroleum, Inc. and then to AFI which used the funds to purchase the shares of Western Alliance. A constructive trust is a remedy, not a separate cause of action; therefore, AFI's failure to specifically mention the Woodards' claims of constructive trust in its special appearance was not a general appearance by AFI. See Tripp Village, 774 S.W.2d at 750.
The Western Hemisphere entities are closely intertwined. The Woodards' petition alleges AFI is the alter ego of Linkoil, Western Hemisphere Holding, Ltd., and Western Hemisphere Petroleum, Inc. The Woodards request the court to disregard the corporate fictions between them. The petition repeatedly refers to the four companies jointly as "the alter egos." We conclude we can fairly read the special appearance to mean all the claims by the Woodards against AFI. We overrule point of error three.
SPECIAL APPEARANCE EVIDENCE
In point of error one, the Woodards contend Sidi's affidavit may not be considered as special appearance evidence. Under rule 120a, the trial court determines the special appearance on the pleadings, any stipulations between the parties, affidavits and attachments the parties file, the results of discovery processes, and any oral testimony.
Point of error one is multifarious because it embraces more than one specific ground of error and attacks several distinct and separate rulings of the trial court. See Clancy v. Zale Corp., 705 S.W.2d 820, 823 (Tex.App.-Dallas 1986, writ ref'd n.r.e.). However, after reviewing the argument, we can determine with reasonable certainty the alleged error about which complaint is made. Therefore, we consider the multifarious point of error. See Champion v. Wright, 740 S.W.2d 848, 850-51 (Tex.App.-San Antonio 1987, writ denied); Rio Delta Land Co. v. Johnson, 566 S.W.2d 710, 713 (Tex.Civ.App.-Corpus Christi 1978, writ ref'd n.r.e.).
A. The Sidi Affidavit 1. Nature and Purpose
The Woodards contend Sidi's affidavit may not be considered in support of AFI's special appearance because the affidavit states it is made in support of the motion for new trial subject to special appearance. The Woodards argue they were not on notice that AFI would use the affidavit to support its special appearance. The Woodards contend they were required to speculate on whether AFI would use the affidavit to support its special appearance, and the misleading statements in the affidavit prejudiced them about its purpose.
The substance and nature of the affidavit are to support AFI's special appearance. The affidavit states that AFI is a foreign corporation with its only contact in Texas being the ownership of shares of a Texas corporation. The affidavit addresses the separate corporate identity between AFI, Linkoil, Western Hemisphere Petroleum, Inc. and Western Hemisphere Petroleum, Plc. The affidavit addresses the Woodards' claim about the fraudulently transferred funds. The essential goal of the affidavit is to negate the Woodards' assertions of jurisdiction over AFI. The Woodards attacked the affidavit in their motion in opposition to new trial, claiming the affidavit does not negate the many jurisdictional allegations brought by them. This does not support the Woodards' allegation that AFI's use of Sidi's affidavit to support its special appearance surprised or prejudiced the Woodards.
2. Competency
The Woodards further complain that the affidavit did not show Sidi is competent to testify as required by rule 120a(3). The Woodards objected to the affidavit in the opposition to new trial. The record does not contain a ruling on the objection. To preserve error for appellate review, a party must present a timely objection, stating the grounds for the desired ruling, and receive an adverse ruling. Tex. R. App. P. 52(a).
However, a complaint that an affiant lacks sufficient personal knowledge of the facts asserted is a substantive defect. See City of Wilmer v. Laidlaw Waste Sys., 890 S.W.2d 459, 467 (Tex.App.-Dallas 1994), aff'd, 38 Tex. Sup. Ct. J. 973 (June 29, 1995). A party may raise an objection to a substantive defect in an affidavit for the first time on appeal. City of Wilmer, 890 S.W.2d at 467; Ramirez v. Transcontinental Ins. Co., 881 S.W.2d 818, 829 (Tex.App.-Houston [14th Dist.] 1994, writ denied). Accordingly, we consider the complaint.
To be sufficient, an affidavit must in some way affirmatively show how the affiant is personally familiar with the facts so he can testify as a witness. A self-serving recitation of such does not meet this requirement. J.T. Fulgham Co. v. Stewart Title Guar. Co., 649 S.W.2d 128, 130 (Tex.App.-Dallas 1983, writ ref'd n.r.e.) (affidavit of vice-president competent summary-judgment evidence). An unchallenged statement the affiant is the president and agent of a company is enough to show how the affiant learned or knew of the facts. Such a statement satisfies the requirement of an affirmative showing of competency. See Fulgham, 649 S.W.2d at 130.
Sidi's affidavit states he is the president of AFI. That statement is enough to show how Sidi learned or knew of the facts in the affidavit and satisfies the rule 120a(3) requirement that the affidavit affirmatively show the affiant is competent to testify. In an appendix to their reply brief, the Woodards make extensive complaints about the factual bases of each statement in the affidavit. Sidi's statement that he is president of AFI is enough to show personal knowledge of all the facts contained in the affidavit. See Fulgham, 649 S.W.2d at 130.
3. Legal Conclusions
The Woodards complain the affidavit contains legal conclusions. Affidavits containing legal conclusions and opinions unsupported by facts are not enough to establish the existence of a fact. Classen v. Irving Healthcare Sys., 868 S.W.2d 815, 820 (Tex.App.-Dallas 1993), rev'd on other grounds, 38 Tex. Sup. Ct. J. 547 (April 27, 1995). An objection to an affidavit because it states only a legal conclusion relates to a defect in substance. Ramirez, 881 S.W.2d at 829. Accordingly, we will consider the complaints in the absence of a ruling on the objection lodged by the Woodards.
Specifically, the Woodards complain of the following statements in the affidavit:
6. AFI, S.A. has never commingled any of its assets with those of Linkoil International, Inc. or with those of Western Hemisphere Petroleum, Inc. and Western Hemisphere Petroleum, Plc.
7. AFI, S.A. has consistently maintained its separate existence by properly maintaining corporate records, electing officers and directors and performing all activities as a separate entity. The officers and directors of AFI, S.A. are not identical to the officers and directors of Western Hemisphere Petroleum, Inc. and Western Hemisphere Petroleum, Plc. and Linkoil International, Inc.
8. AFI, S.A. has not been used by Western Hemisphere Petroleum, Inc., Western Hemisphere Petroleum, Plc. and Linkoil International, Inc. as a sham to defraud creditors, or to divert funds from Western Hemisphere Petroleum, Inc., Western Hemisphere Petroleum, Plc. and Linkoil International, Inc.
These parts of the affidavit are not conclusions nor opinions. Whether AFI combined its assets with those of another company into a common fund and the identity of corporate officers are facts that Sidi as president of AFI was in a position to know or learn. The maintenance of separate corporate records, election of officers and directors, and performance of business activities are factual accounts of events that occurred during the day to day operation of AFI. These statements do not contain only subjective opinions and conclusions as alleged by the Woodards.
4. Contradictory Evidence
Lastly, the Woodards contend the trial court erred in considering parts of the affidavit that conflict or contradict the deemed admissions. Under rule 169, unanswered requests for admissions are automatically deemed admitted, unless the court on motion permits their withdrawal or amendment. An admission once admitted is a judicial admission. A party may not introduce evidence to controvert a judicial admission. Marshall v. Vise, 767 S.W.2d 699, 700 (Tex. 1989). However, a party relying on deemed admissions must protect the record by objecting to the introduction of controverting evidence and obtaining a ruling on the objection. See Tex. R. App. P. 52(a); Marshall, 767 S.W.2d at 700. Failure to properly protect the record waives the right to rely on the controverted admissions. Marshall, 767 S.W.2d at 700. Because the Woodards did not get a ruling on their objection, the Woodards waived their right to rely on those deemed admissions that the affidavit contradicted. See Tex. R. App. P. 52(a); Marshall, 767 S.W.2d at 700.
MERITS OF THE SPECIAL APPEARANCE A. Applicable Law 1. Personal Jurisdiction
Generally, Texas courts can exercise personal jurisdiction over non-resident defendants if two conditions are met. Schlobohm v. Schapiro, 784 S.W.2d 355, 356 (Tex. 1990); Clark v. Noyes, 871 S.W.2d 508, 513 (Tex.App.-Dallas 1994, no writ). First, the Texas long-arm statute must authorize the exercise of jurisdiction. Schlobohm, 784 S.W.2d at 356; Clark, 871 S.W.2d at 512. Second, the exercise of jurisdiction must comport with federal and state constitutional guarantees of due process. Schlobohm, 784 S.W.2d at 356; Clark, 871 S.W.2d at 512.
a. The Texas Long-Arm Statute
The Texas long-arm statute authorizes the exercise of jurisdiction over a nonresident that does business in Texas. See Tex. Civ. Prac. Rem. Code Ann. § 17.042 (Vernon 1986); Guardian Royal Exch. Assurance, Ltd. v. English China Clays, 815 S.W.2d 223, 226 (Tex. 1991). A nonresident does business in Texas if the nonresident enters into a contract by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in Texas. See Tex. Civ. Prac. Rem. Code Ann. § 17.042(1) (Vernon 1986).
The Texas Long Arm Statute has been interpreted to "reach as far as the federal constitution permits." U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977), cert. denied, 434 U.S. 1063 (1978). Thus, for practical purposes, the personal jurisdiction inquiry centers on whether the federal constitution permits the exercise of personal jurisdiction. Guardian, 815 S.W.2d at 226.
b. Due Process Requirements
For a trial court's assertion of jurisdiction over a nonresident defendant to comport with due process requirements, the defendant must have purposely established minimum contacts with Texas such that the nonresident could reasonably anticipate being sued in Texas. National Indus. Sand Assoc. v. Gibson, 897 S.W.2d 769, 722 (Tex. 1995). Under federal due process requirements we determine whether (1) the nonresident defendant has purposely established "minimum contacts" with the forum state; and (2) if so, the exercise of jurisdiction comports with "fair play and substantial justice." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76 (1985); Guardian, 815 S.W.2d at 226.
1. Minimum Contacts Analysis
The essential goal of minimum contacts analysis is to protect the non-resident defendant(s). Temperature Sys., Inc. v. Bill Pepper, Inc., 854 S.W.2d 669, 675 (Tex.App.-Dallas 1993, writ dism'd by agr.). Minimum contacts must be based on "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." Burger King, 471 U.S. at 475 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). The purposeful availment requirement ensures a Texas resident will not hale a nonresident into Texas based solely upon random, fortuitous, or attenuated contacts or the unilateral activity of another party or third person. See Burger King, 471 U.S. at 475; Guardian, 815 S.W.2d at 226. The actions of the non-resident defendant must justify a conclusion that the non-resident defendant should reasonably anticipate being called into court in the forum state. Temperature Sys., Inc., 854 S.W.2d at 675; see Zac Smith Co. v. Otis Elevator Co., 734 S.W.2d 662, 663 (Tex. 1987), cert denied, 484 U.S. 1063 (1988).
In determining whether it is appropriate to exercise personal jurisdiction, we must carefully weigh the facts of each case and avoid mechanical application of the governing standards. Guardian Royal, 815 S.W.2d at 231. "In addition, Texas courts should strive to utilize a realistic approach when applying the jurisdictional formula." Guardian Royal, 815 S.W.2d at 231.
Personal jurisdiction may be general or specific. Schlobohm, 784 S.W.2d at 358; Hotel Partners v. KPMG Peat Marwick, 847 S.W.2d 630, 632 (Tex.App.-Dallas 1993, writ denied). Specific jurisdiction arises when the defendant commits some act in Texas that gives rise to the cause of action asserted against him. Hotel Partners, 847 S.W.2d at 632 . If the cause of action does not arise out of the specific contacts with Texas, a Texas court may still exercise personal jurisdiction if the defendant has continuous and systematic contacts with Texas under the doctrine of general jurisdiction. Guardian Royal, 815 S.W.2d at 228; Clark, 871 S.W.2d at 513.
a. Specific Jurisdiction
When a plaintiff asserts specific jurisdiction, the cause of action must arise out of or relate to the non-resident defendant's contact with the forum state to satisfy the minimum contacts requirement. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414 n. 8 (1984); Guardian Royal, 815 S.W.2d at 227; Zac Smith, 734 S.W.2d at 663. Further, the non-resident defendant's activities must have been purposefully directed to the forum and the litigation must result from alleged injuries that arise out of or relate to those activities. In re S.A.V., 837 S.W.2d 80, 85 (Tex. 1992); Guardian Royal, 815 S.W.2d at 228. "Thus, courts must find the activities of the [non-resident] to be deliberate and significant." Zac Smith, 734 S.W.2d at 664. When specific jurisdiction is asserted, the minimum contacts analysis focuses on the relationship among the defendant, the forum, and the litigation. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984); Guardian Royal, 815 S.W.2d at 228. Each non-resident's contacts must be assessed individually. Calder v. Jones, 465 U.S. 783, 790 (1984). Examination of the nonresident's purposeful conduct is critical because the contact(s) must have resulted from the non-resident's conduct and not that of plaintiff(s) or others. Guardian Royal, 815 S.W.2d at 227. There must be a substantial connection between the non-resident's action or conduct directed toward the forum and the cause of action asserted. Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1987); Guardian Royal, 815 S.W.2d at 226.
b. General Jurisdiction
Texas courts may assert general jurisdiction over a non-resident when the cause of action does not arise out of the contacts, but the non-resident maintains continuous and systematic contacts with the forum. Clark, 871 S.W.2d at 516. General jurisdiction requires substantial activities by the non-resident in the forum state and a more demanding analysis of the contacts. Guardian Royal, 815 S.W.2d at 228; Clark, 871 S.W.2d at 516. It is the quality and nature of the contacts and not their number that is determinative. Clark, 871 S.W.2d at 520; Memorial Hosp. Sys. v. Fisher Ins. Agency, Inc., 835 S.W.2d 645, 650 (Tex.App.-Houston [14th Dist.] 1992, no writ).
c. Traditional Notions of Fair Play and Substantial Justice
Once the reviewing court determines the nonresident defendant purposefully established minimum contacts with Texas, we evaluate the contacts to determine whether asserting personal jurisdiction over the nonresident defendant comports with fair play and substantial justice. Burger King, 471 U.S. at 476. The fair play and substantial justice inquiry is separate and distinct from the minimum contacts issue. In re S.A.V., 837 S.W.2d at 85. We consider the following factors in determining whether the exercise of jurisdiction is consistent with fair play and substantial justice: (1) the burden on the defendant; (2) the interest of the forum state in adjudicating the dispute (including special regulatory interests); (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 the controversy; and (5) the shared interest of the several states in furthering substantive social policies. In re S.A.V., 837 S.W.2d at 86; Guardian Royal, 815 S.W.2d at 231.
d. Imputation of Corporate Contacts
In some situations, corporations are so closely related that the contacts with the forum state of one corporation are attributed to the other. Generally, a foreign corporation is not subject to the jurisdiction of the forum state merely because an affiliate conducts business in the forum state. The presence of one in a forum may not be attributed to the other. See 3-D Elec. Co., Inc. v. Barnett Constr. Co., 706 S.W.2d 135, 139 (Tex.App.-Dallas 1986, writ ref'd n.r.e.). To determine if the relationship is close enough to justify imputation of contacts, we look to the law of parent-subsidiary and alter ego relationships. 3-D Elec., 706 S.W.2d at 138.
To acquire jurisdiction over the parent, it must be shown the parent exercises a greater degree of control over the subsidiary's internal business operations and affairs than normally associated with common ownership and directorship. 3-D Elec., 706 S.W.2d at 139. A merely formal corporate separation may be sufficient to prevent imputation of contacts if the separation is real. 3-D Elec., 706 S.W.2d at 140. It is the plaintiff's burden to present sufficient evidence to support imputation of contacts. 3-D Elec., 706 S.W.2d at 140. Imputation of corporate contacts entails a fact-intensive inquiry. 3-D Elec., 706 S.W.2d at 140. A subsidiary will not be regarded as the alter ego of its parent merely because of stock ownership, a duplication of some or all of the directors or officers, or an exercise of control that stock ownership gives to stockholders. McFee v. Chevron Int'l Oil Co., 753 S.W.2d 469, 471 (Tex.App.-Houston [1st Dist.] 1988, no writ).
Commonality of officers alone is not enough to establish an alter ego relationship. 3-D Elec., 706 S.W.2d at 139. Evidence that the two corporations office in the same building does not invoke the alter ego doctrine. 3-D Elec., 706 S.W.2d at 140. A showing that the two corporations are related in some ways is not enough. The relationship must be so close that the two are interchangeable. See Equinox Enter. v. Associated Media, 730 S.W.2d 872, 876-77 (Tex.App.-Dallas 1987, no writ) (allegation that individuals did not do business in Texas is not a meritorious defense because individuals were responsible for the liabilities of an alter ego corporation).
The "single business enterprise" theory involves corporations that integrate their resources to achieve a common business purpose. Superior Derrick Serv. v. Anderson, 831 S.W.2d 868, 874 (Tex.App.-Houston [14th Dist.] 1992, writ denied). In determining whether two corporations had not been maintained as separate entities, the court may consider the following factors: (1) common employees; (2) common offices; (3) centralized accounting; (4) payment of wages by one corporation to another corporation's employees; (5) common business name; (6) services rendered by the employees of one corporation on behalf of another corporation; (7) undocumented transfers of funds between corporations; and (8) unclear allocation of profits and losses between corporations. Superior Derrick Serv., 831 S.W.2d at 874.
B. Burden of Proof
The plaintiff has the initial burden of pleading enough facts to bring the nonresident defendant within the provisions of the Texas long-arm statute. Tex. Civ. Prac. Rem. Code Ann. § 17.042 (Vernon 1986); Hotel Partners, 847 S.W.2d at 633. The specially-appearing nonresident defendant bears the burden of proving lack of jurisdiction and must negate every possible ground of personal jurisdiction. Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985); Clark, 871 S.W.2d at 511. This does not mean the non-resident defendant must negate "every possible ground in the universe," but rather the acts in Texas alleged by the plaintiff to support personal jurisdiction. Siskind v. Villa Found. for Educ., Inc., 642 S.W.2d 434, 438 (Tex. 1982); Scott v. Huey L. Cheramie, Inc., 833 S.W.2d 240, 241 (Tex.App.-Houston [14th Dist.] 1992, no writ).
C. Standard of Review
On appeal, the reviewing court has the duty to review all evidence before the trial court on the jurisdictional question. Hotel Partners, 847 S.W.2d at 632. We review the trial court's decision on the nonresident's special appearance on an evidentiary standard of review. Hotel Partners, 847 S.W.2d at 632.
1. Statement of Facts
The appellant bears the burden to present a sufficient record to show error that requires reversal. Tex. R. App. P. 50(d). Without a statement of facts, when it appears the trial court heard evidence before rendering its judgment, we must presume the evidence supports the judgment. Otis Elevator Co. v. Parmelee, 850 S.W.2d 179, 181 (Tex. 1993). On the other hand, when it appears the trial court heard no evidence, we indulge no presumptions in favor of the judgment due to the absence of a statement of facts. See Otis Elevator, 850 S.W.2d at 181.
There is no statement of facts from the special appearance hearing. The Woodards in a bill of exception and in their brief allege that the special appearance was submitted to the trial court on the pleadings and the affidavits filed on or before the day of the hearing, and there was no live testimony or other documentary evidence adduced or presented to the trial court at the hearing. AFI does not challenge the Woodards' assertion that the trial court heard no additional evidence at the special appearance hearing. The record does not indicate that the trial court heard testimony or admitted exhibits at the hearing. We may accept as correct any statement an appellant makes in his original brief regarding the facts or the record unless the opposing party challenges that statement. Tex. R. App. P. 74(f). Consequently, we indulge no presumptions in favor of the judgment due to the Woodards' failure to file a statement of facts in this Court. See Otis Elevator, 850 S.W.2d at 181.
2. Findings of Fact and Conclusions of Law
The trial court made no findings of fact and conclusions of law in connection with its ruling on the special appearance. The parties did not request findings or conclusions pursuant to rule 296. See Tex. R. App. P. 296. Under these circumstances, the trial court's judgment implies all necessary fact findings in support of the judgment. Zac Smith Co., 734 S.W.2d at 666. We must affirm the trial court's judgment if it can be upheld on any legal theory that finds support in the evidence. Temperature Sys., Inc., 854 S.W.2d at 673. When there is a statement of facts, these implied findings may be challenged by factual or legal sufficiency points in the same manner as express findings of the trial court. Holt Atherto Indus. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992); Burnett v. Motyka, 610 S.W.2d 735, 736 (Tex. 1980) (per curiam).
Where an appellant attacks matters upon which the appellee had the burden of proof on legal sufficiency grounds, the reviewing court must consider only the evidence and inferences which, when viewed in their most favorable light, tend to support the finding and disregard all evidence and inferences to the contrary. Heine, 835 S.W.2d at 84. If there is more than a scintilla of evidence to support the finding, the no evidence challenge fails. Heine, 835 S.W.2d at 84.
When reviewing a challenge to the factual sufficiency of the evidence, the reviewing court must consider all of the evidence. Plas-Tex, Inc. v. U.S. Steel Corp. 772 S.W.2d 442, 445 (Tex. 1989). Where an appellant attacks an adverse finding on an issue on which the appellee had the burden of proof, appellant must demonstrate that there is insufficient evidence to support the finding. See Hickey v. Couchman, 797 S.W.2d 103, 109 (Tex.App.-Corpus Christi 1990, writ denied). After reviewing all of the evidence, the court should set aside the finding only if the evidence standing alone is so weak as to be clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam).
D. Application of Law to Facts
In point of error one, the Woodards contend the trial court erred in granting the special appearance because there was no evidence or insufficient evidence to prove that AFI did not conduct business in Texas sufficient to subject AFI to the personal jurisdiction of the courts of Texas. The Woodards contend AFI did not sufficiently plead that it was not subject to the jurisdiction of Texas courts.
The Woodards bear the burden of pleading sufficient facts to bring AFI within the provisions of the Texas long-arm statute. Tex. Civ. Prac. Rem. Code Ann. § 17.042 (Vernon 1986); Hotel Partners, 847 S.W.2d at 633. AFI must then prove a lack of jurisdiction and must negate every possible ground of personal jurisdiction. Kawasaki Steel Corp, 699 S.W.2d at 203. AFI, in order to succeed in its special appearance, had to negate the acts in Texas alleged by the Woodards to support personal jurisdiction. Siskind, 642 S.W.2d at 438. Because AFI had the burden of negating each of the bases of jurisdiction alleged, absence of proof on any one of them would require reversal of the trial court's order.
The Woodards alleged in their petition that general jurisdiction is established because the activities of Western Hemisphere within Texas were attributable to AFI for purposes of personal jurisdiction because: (1) there is such a close relationship between AFI and Western Hemisphere; (2) AFI is the alter ego of Western Hemisphere and Linkoil; and (3) AFI and Western Hemisphere are part of a single business enterprise. In sum, the Woodards contend that the relationship between AFI and Western Hemisphere, whatever the name, justifies attributing jurisdiction upon AFI.
The Woodards contend specific jurisdiction is established: (1) by the existence of a single business enterprise; (2) by the fraudulent transfers from Western Hemisphere to AFI; and (3) because the Woodards are entitled to the imposition of a constructive trust on shares of Western Alliance.
Under rule 120a(3), the trial court determines the special appearance on the basis of the pleadings, any stipulations made between the parties, affidavits and attachments filed by the parties, the results of discovery processes, and any oral testimony. The trial court determined AFI's special appearance based on the pleadings, Sidi's affidavit, and the deemed admissions.
AFI's special appearance evidence shows AFI is a foreign corporation who does not maintain a registered agent for service in the state of Texas. AFI has not engaged in business dealings with any of the Woodards or with Linkoil. Neither Linkoil nor Western Hemisphere Petroleum, Inc. own stock in AFI, nor does AFI own stock in Linkoil or Western Hemisphere Petroleum, Inc. AFI has not combined its assets with those of Linkoil, Western Hemisphere Petroleum, Inc. or Western Hemisphere Petroleum Plc, and has consistently maintained a separate corporate existence. AFI has kept separate corporate records, has different officers and directors, and has not used AFI to defraud creditors or to divert funds from Western Hemisphere or Linkoil.
The Woodards' special appearance evidence, through the deemed admissions, shows Western Hemisphere Petroleum, Inc. and Western Alliance acted as agents for and on behalf of AFI within Texas, that AFI has conducted business in Texas, that Western Hemisphere used AFI to defraud creditors including the Woodards, that Western Hemisphere Petroleum, Inc. transferred funds to AFI solely to defraud creditors, and that AFI is the alter ego of Western Hemisphere Petroleum, Inc. The Woodards rely heavily on the admission that AFI is the alter ego of Western Hemisphere Petroleum, Inc., arguing there can be no implied finding of fact on that issue, and that any proof by AFI establishing there was not a close relationship would be insufficient to carry AFI's burden of proof. The Woodards, by failing to obtain a ruling on their objection to evidence contradicting the deemed admissions, waived their right to rely on the admission that AFI is the alter ego of Western Hemisphere. See Tex. R. App. P. 52(a); Marshall, 767 S.W.2d at 700.
Each case involving disregard of the corporate entity must rest upon its own special facts. 3-D Elec., 706 S.W.2d at 140. Based on our review of the record in this case, we conclude there is special appearance evidence supporting the trial court's implied finding that the relationship between Western Hemisphere and AFI was not so closely intertwined to justify consideration of the contacts of Western Hemisphere in determining whether the trial court had jurisdiction over AFI. After reviewing all of the evidence, we conclude the trial court's implied finding is not clearly wrong and manifestly unjust.
The Woodards also contend AFI did not negate jurisdiction based upon the fraudulent transfer of funds from Linkoil to Western Hemisphere to AFI. As a separate basis of jurisdiction, the Woodards contend their right to the imposition of a constructive trust on the shares of Western Alliance establishes jurisdiction over AFI.
A constructive trust is an equitable remedy imposed to prevent unjust enrichment resulting from an unconscionable act. Tripp Village, 774 S.W.2d at 750. Imposition of a constructive trust is not a separate cause of action but must derive from some other cause of action, in this case the alleged fraudulent transfer of funds from Linkoil to Western Hemisphere to AFI which ultimately used the funds to purchase the shares of Western Alliance. Because a constructive trust is a remedy, not a separate cause of action, the Woodards' allegation they are entitled to the constructive trust is not an independent basis for jurisdiction; it is derivative of the allegation of fraudulent transfer of funds.
AFI's special appearance evidence shows the funds in question went from Linkoil to an account in Nigeria as a good faith deposit towards the purchase of an oil cargo. The Nigerian government seized the money. The funds advanced by the Woodards to Linkoil were never diverted to, used by, or deposited into the bank accounts of Western Hemisphere or AFI.
The Woodards' special appearance evidence, through the deemed admissions, shows that funds paid by AFI to Western Alliance were transferred by Western Hemisphere Petroleum, Inc. to AFI for no consideration at a time when Western Hemisphere Petroleum, Inc. was indebted to the Woodards and that the funds paid by AFI to Western Alliance were transferred to AFI solely for the purpose of hindering, delaying, and defrauding creditors including the Woodards.
The record contains evidence supporting the trial court's implied finding that there was not a fraudulent transfer from Western Hemisphere to AFI. Generally, ultimate liability in tort is not a jurisdictional fact. See Runnells v. Firestone, 746 S.W.2d 845, 851 (Tex.App.-Houston [14th Dist.] 1988) writ denied per curiam, 760 S.W.2d 240 (Tex. 1988); Portland Sav. Loan Ass'n v. Bernstein, 716 S.W.2d 532, 535 (Tex.App.-Corpus Christi 1985, writ ref'd n.r.e.), cert. denied, 475 U.S. 1016 (1986). However, in determining jurisdiction, facts may be determined which may also bear on ultimate liability, such as whether a contract exists or whether a purposeful act was committed in the forum state. Runnells, 746 S.W.2d at 851. Our review of the facts of this case leads us to the conclusion there is special appearance evidence supporting the trial court's implied finding that Western Hemisphere did not fraudulently transfer funds to AFI. After reviewing all of the evidence, we conclude the trial court's implied finding is not clearly wrong and manifestly unjust. There is evidence negating each allegation of jurisdiction asserted by the Woodards. We overrule point of error one.
THE NEW TRIAL
In point of error four, the Woodards contend the trial court abused its discretion by granting AFI's motion for new trial in the same order granting the special appearance. The Woodards complain of the following portion of the order: IT IS FURTHER ORDERED that to the extent necessary and only to the extent necessary to enforce the dismissal of this action pursuant to the sustaining of the special appearance, the motion for new trial subject to the special appearance is GRANTED, and the Final Judgment previously entered in this cause on April 29, 1994, is hereby set aside, canceled and held for naught.
The Woodards contend "there was no need for the trial court to grant AFI's motion for new trial to any extent whatsoever since, having vacated the final judgment, there was nothing for the motion for new trial to speak to. To the extent the trial court granted the motion for new trial, it was error and an abuse of discretion since the trial court could not grant again relief that had already been granted pursuant to the special appearance."
For error to be reversible, the trial court's error must be reasonably calculated to cause and probably did cause the rendition of an improper judgment. See Tex. R. App. P. 81(b)(1). Even assuming the Woodards' allegation of abuse of discretion is correct, they have not shown any harm. They complain only that the trial court could not grant relief which had already been granted; they make no argument regarding harm or how the error, if any, led to an improper result. We overrule point of error four.
We affirm the trial court's judgment.
Baker, J. concurring in result without opinion.