### CAUSE NO. 03-13-00762-CV

___________________ _____________________ IN THE THIRD COURT OF APPEALS AUSTIN, TEXAS

___________________ _____________________ F AKHREALAM 

### A TIQ 

### , Appellant,

v. C OTECHNO 

### G ROUP 

### , I NC


### . Appellee.

___________________ _____________________ MOTION FOR EN BANC RECONSIDERATION

___________________ _____________________ On Appeal from the 207th Judicial Di strict Court of Hays County, Texas

___________________ _____________________

Tracy J. Willi Texas State Bar No. 00784633 Willi Law Firm, P.C. 9600 Escarpment Blvd., Ste. 745, PMB 34 Austin, Texas 78749 Tel. (512) 288-3200 Fax (512) 288-3202 twilli@willi.com ATTORNEY FOR APPELLEE, COTECHNO GROUP, INC. ACCEPTED 03-13-00762-CV 6618114 THIRD COURT OF APPEALS

AUSTIN, TEXAS 8/24/2015 11:22:43 AM JEFFREY D. KYLE

CLERK

### ii TABLE OF 

### CONTENTS I. SUMMARY OF THE ARGUMENT . .......................................................... 1 II. FACTS IN THE COURT’S OP INION ARE INTERNALLY INCONSISTENT. .......................................................................................... 1 III. FRAUDULENT INDUCEME NT WAS PLEADED AND PROVED SUFFICIENTLY TO SUPPORT THE TRIAL COURT’S RULI NG. ..................................................................................... 3 IV. THE DOCTRINES OF ALTER EGO OR SHAM CORPORATION ARE AVAILABLE TO HOLD ATIQ PERSONALLY RESPONSIBLE FOR HIS FRAUDULENT ACTIONS IN TEXAS. .................................................................................. 4 V. THE COURT’S OPINION MISAPPLIES THE PHC-MINDEN CASE. .............................................................................................................. 7 VI. CONCLUSION AND PRAYER. ................................................................ 10

### iii INDEX OF AUTHORITIES 

### Cases Alliance Royalties, LLC v. Boothe , 326 S.W.3d 117 (Tex. App.—Fort Worth 2010, no writ) ..................................... 3 BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789 (T ex. 2002) .................................................................................... 9 Daimler-Benz Aktienge sellschaft v. Olson, 21 S.W.3d 707 (Tex. App.—Austin 2000, pe t. dism’d w.o.j.), cert. denied, 535 U.S. 1077 (200 2) .................................................................................................... 8 Haase v. Glazner , 62 S.W.3d 795 (T ex. 2001) .................................................................................... 7 Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am ., 341 S.W.3d 323 (T ex. 2011) .................................................................................. 7 Jones v. Beech Aircraft , 995 S.W.2d 767 (Tex. App.—San Antonio 1999, pet. dism’d w.o.j.) .................. 8 Max Protetch, Inc. v. Herrin , 340 S.W.3d 878 (Tex. App.—Houston [ 14th Dist.] 2011, no pet.) ....................... 4 PHC-Minden, L.P. v. Kimberly-Clark Corp ., 235 S.W.3d 163 (T ex. 2007) .................................................................................. 7 Proppant Solutions, LLC v. Delgado , No. 01-14-00800-CV (Tex. App. [1st Di st.] July 14, 2015, np pet. h.) ................ 8 Silkwood v. Kerr-McGee Corp ., 485 F.Supp. 566 (W.D. Ok la. 1979) .................................................................... 10 Spoljaric v. Percival Tours, Inc ., 708 S.W.2d 432 (T ex. 1986) .................................................................................. 7

### MOTION FOR EN BANC RECONSIDERATION CoTechno Group, Inc., Appellee, files th is Motion for En Ba nc Reconsideration pursuant to and would show this Court as follows.
I. 

### Summary of the argument. The trial court in this case entered an order denying Appellant’s special appearance on October 23, 2013. On July 9, 2015, this Cour t issued an opinion reversing the trial court’s decision. The Court’s opinion is in error becau se some of the facts relied upon in the Court’s opinion ar e internally inconsistent with other facts stated in the Court’s opinion, and deference should be given to the trial c ourt’s implied fact findings. Also, the Court’s opinion is in error becaus e its legal conclusions do not follow from the facts stated in the opinion.
II. 

### Facts in the Court’s opinion are internally inconsistent. This Court’s opinion agrees that Atiq’s contacts prior to the incorporation of CFabrics are the actions of Atiq personally for purposes of an alyzing jurisdiction. Op. at 11 (Appx. 1, attached). This Court’s opinion also agrees that CoTech no claims that Atiq committed fraud by entering into the Future Business Agreem ent because he personally never intended to honor the agre ement. Op. at 10. “Under th is analysis, the undisputed evidence supports CoTechno’s allegation that Atiq , in his personal capacity, entered into the Future Business Agreement with Fiberex and CoTechno, a Texas resident. Consequently, to the extent Atiq conducted busin ess in Texas under the Agreement on behalf of C-Fabrics prior to its incorporati on, we would also imput e those contacts to Atiq personally.” Op. 12. Ev en though the Court finds that Atiq’s actions in 2009 prior

### 2 to the formation of C-Fabrics were Atiq’s own personal acti ons, the Court’s opinion also states exactly the opposite: “acco rding to Atiq’s undisputed a ffidavit, his travel to Texas in 2009 was solely in hi s capacity as an officer of Fiberex.” Op. at 12, n. 5. This is an internally inconsistent finding of fact in the Court’s opinion. The fact of whether Atiq traveled to Texas in 2009 “solely in his capa city as an officer of Fiberex” is certainly disputed, even within th e Court’s opinion. The trial cour t’s implied fact finding on this issue should be given deference. The Court’s opinion acknowledges that “C oTechno also claimed that Atiq was a party to the Future Business Agreement in hi s personal capacity and that he and Fiberex had fraudulently entered into the Agreement with CoTech no and then breached the Agreement by failing to transfer C-Fabrics.” Op. at 3. More particularly, CoTechno pleaded and presented evidence that Atiq fraudule ntly induced CoTech no into entering into a partnership, the Future Business Agreem ent, by making several misrepresentations to CoTechno during his meeting in Texas with Co Techno in 2009: In the summer of 2009, Fakhrealam Atiq came to San Marcos, Texas, to meet with me and discuss future business relations hips between our companies, Cotechno Group, Inc. (“Cotechno”) and Fiberex Glass Corporation, Inc. (“Fiberex”), respectively. We discussed short and long term goals and u ltimately agreed to enter into a partnership. Atiq drafted the partnership agreement. There were several key provisions, which I relied on wh en entering into the contract on behalf of Cotechno. Atiq promised to form a new company called Cotechno Fabrics, Inc. (“Cofab”). He further promised that all of the figergla ss shipped to the CoTechno warehouse would remain the property of Cofab until it wa s sold and delivered to our customers. Atiq promised that Cofab would be a wholly owned subsidiary of Fiberex. Finally, he promised to transf er Cofab to Cotechno upon repayment of a deemed “debt” and payment of $1.00. Following our discussion in San Marco, Atiq drafted the Future Business Agreement and, in August of 2009, signed it on behalf of Fibe rex and purportedly

### 3 on behalf of Cofab. Based on the promises in the Future Busi ness Agreement, my wife and I signed on behalf of Cotechno. CR 122, Affd. of Alex Aposto l (attached to CoTechno’s Response to Atiq’s Special Appearance).
III. 

### Fraudulent inducement was pleaded a nd proved sufficiently to support the trial court’s ruling. The Court’s opinion states that “CoTech no also argues that Atiq traveled to San Marcos in 2009, prior to the execu tion of the Agreement, to meet with CoTechno about the proposed contract and during that meeting fraudulently induced CoTechno to enter into the contract .” Op. at 17, n. 7. But then this Court’s opinion contends that this claim was insufficiently pleaded. Id . This matter was clearly stated in the pleadings and in the responses to the special
appearance. See CR 68, 122 (quoted above), 240. Fiberex and Atiq represente d to Cotechno that Cofab existed and was a wholly owned subsidiary of Fiberex. Further, Atiq and Fiberex represented that upon payment of the deemed "debt" and paymen t of $1.00, Cofab wo uld be transferred to Cotechno. These representations were false at the time they were made and further, both Atiq and Fiberex knew they were false and had no intention of honoring them. Their intention is evidenced by the fact that Cofab never issued any stock to Fiberex, Cofab did not ex ist in August 2009 and Fiberex and Atiq have never had any intenti on of transferring Cofab. CR 68. 

### CoTechno’s pleadings for purposes of asserting jurisdiction include its amended petitions as well as the res ponse to the special appearance. Alliance Royalties, LLC v. Boothe , 326 S.W.3d 117, 120 (Tex. App.—Fort Worth 2010, no

### 4 writ); Max Protetch, Inc. v. Herrin , 340 S.W.3d 878, 883 (Tex. App.—Houston [14th Dist.] 2011, no pet.).
IV. 

### The doctrines of Alter Ego or Sham Corporation are available to hold Atiq personally respo nsible for his fraudulent actions in Texas. Atiq, as a partner in the FBA, used Co Techno Fabrics, Inc. as a sham and to perpetrate a fraud against CoTechno Group, Inc. As demonstrated from the representations made to CoTechno in Texa s and later reduced to writing by Atiq in the Future Business Agreement, CoTechno alleges that Atiq fraudulently induced CoTechno Group, Inc. to provide use of its tradename “CoTechno,” to obtain confidential information from CoTechno, to obtain customer lists, and to operate CoTechno Group in a manner that provided pr ofits to Atiq’s comp any, Fiberex, all with the false promises that Atiq woul d form an operating entity that would be transferred to CoTechno Group, Inc. after the alleged debt was paid. CR 73-78. Instead, Atiq never intended to form an operating entity and did not intend to transfer any entity to CoTechno Group, Inc. The evidence in Apostol’s a ffidavit, stated above, demonstrates that Atiq personally injected himself, as an individual se parate and apart from Fiberex, as a party to this agreement formed in Texas. He und ertook a personal obligation to form a new company, C-Fabrics, that he would operate in a certain manner. He never intended to do what was stated in this agre ement. The Court’s opinion mi sses the fact that Atiq’s alleged fraud occurred during his personal me eting with CoTechno in Texas in 2009

### 5 when he made his misrepresentations to frau dulently induced CoTechno to enter into the Future Business Agreement. The Court’s opinion errs when it combines th e jurisdictional analysis for breach of contract, breach of fiduciary du ty, and fraud together. Op. at 13. If this Court considered fraudulent inducement as a separate claim, it would find that Atiq’s attendance at the 2009 meeting in Texas, wherein he made misrepresentations wh ich induced CoTechno into signing the Fu ture Business Agreement, is a signi ficant contact with Texas directly giving rise to the claim. Atiq’s fraud continued when he form ed C-Fabrics, whic h he admitted in testimony, was simply an alter ego or a sham corporation. In other words, C-Fabrics involvement was simply the continuation of Atiq’s personal in volvement in this
transaction. 

### When asked to describe the nature of CoTechno Fabrics, Inc., Atiq testified, “I don’t know. I don’t know. I told you it is only a vehicle, an empty shell. It has no tasks. ” Resp. Ex. 6 at p. 134. This was not an accidental statement—Atiq insisted that CoTechno Fa brics, Inc. was not a real entity, but a sham corporation: Q: Okay. So Fiberex employees at your direction did work on CoTechno Fabrics tasks? Mr. Schumacher: Objection, form. A: You asked the same question ag ain, and I’m going to answer the same way again. Q: Okay.

### 6 A: CoTechno Fabrics is and was a mechanism to collect a debt. It is a shell company, had nothing, no operations, nothing. It was only a vehicle. Q: Let me ask a little bit more specifically then. A: Please, if you would. Q: When CoTechno – A: I’d be very happy to answer. Q: Okay. When CoTechno Fabrics sent an invoice – I’m sorry, when CoTechno Group sent an invoice to CoTechno Fabrics, Fiberex employees would accept the invoice and prepare for next steps? Mr. Shumacher: Form. A: I don’t know how to answer that. There --- there was no employees in CoTechno Fabrics, and, again Fiberex was working to collect a debt. So, obviously, they are handling the paper work of whatever is necessary. How it handled, who did what, I don’t know. Id . at 136–37. As to the fraud claim, Apostol explaine d that Atiq set up the CoTechno Fabrics business without having the intent to sell it back to CoTe chno as the agreement required. Apostol further testifies that, “He [Atiq] wa s just—basically scammed us as a sham corporation. As you can see from the discove ry they provided, that [CoTechno Fabrics] was nothing but a channel to get – for him [Atiq ] to get the money out of the whole thing. The stocks were never issued. He had absolutely zero inte ntion to honor his promise in

### 7 that agreement to return CoTe chno Fabrics to CoTechno Gr oup for the dolla r, whenever that happens – is to happen. ” (Pet. Ex. 1, p. 108.) The elements of fraud are (1) the speaker made a material representation, (2) it was false, (3) the speaker knew the representation was false when made or made it recklessly without any knowledg e of its truth and as a positiv e assertion, (4) the speaker made the representation with intent that th e other party act upon it, (5) the other party acted in reliance on the misrepresentation, an d (6) that party suffered injury thereby. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am ., 341 S.W.3d 32 3, 337 (Tex. 2011). For fraudulent inducement, the elements of fraud must be established as they relate to an inducement to enter into a contract between the parties. See Haase v. Glazner , 62 S.W.3d 795, 798-99 (Tex. 2001). While the mere failure to perform a contract will not support a cl aim for fraudulent indu cement, a promise to do an act in the future is actionable fraud “when made w ith the intention, design and purpose of deceiving, and with no intent ion of performing the act.” Spoljaric v. Percival Tours, Inc ., 708 S.W.2d 432, 434-35 (Tex. 1986).
V. 

### The Court’s Opinion misapplies the PHC-Minden case. The Court’s opinion misapplies the Texas Supreme Court’s opinion in PHCMinden, L.P. v. Kimberly-Clark Corp ., 235 S.W.3d 163, 176 (Tex. 2007). Op. at 18, n. 8. The PHC-Minden opinion was discussing the “singl e business enterpri se” theory of imputed liability. PHC-Minden , 235 S.W.3d at 174. None of the multiple cases cited with parentheticals by the PHP-Minden opinion addressed the use of a sham corporation to perpetrate a fraud. Id . A case cited favorably in that opinion includes Daimler-Benz

### 8 Aktiengesellschaft v. Olson, 21 S.W.3d 707, 721 n. 5 (T ex. App.—Austin 2000, pet. dism’d w.o.j.), cert. denied, 535 U.S. 1077 ( 2002). This court of appeals found that “Daimler-Benz and MBNA form a functional wh ole in promoting and marketing vehicles in Texas.” Id . at 723. Based upon this and other f actors, including the fact that the contract at issue was to be performed in Te xas, this court of appeals found personal jurisdiction over Daimler-Benz

. Id . at 726. Moreov er, within the Daimler-Benz opinion, a discussion of the Jones case reflects that an entity “exi sting solely to funnel sales” or simply “directing customers” to another entity can s upport a basis for personal jurisdiction. Daimler- Benz , 21 S.W.3d at 721, citing Jones v. Beech Aircraft , 995 S.W.2d 767, 771 (Tex. App.—San An tonio 1999, pet. dism’d w.o.j.). A recent decision by the First Court of Ap peals presenting some what similar facts has resulted in a strong dissent by Justic e Keyes and a pending Motion for En Banc Reconsideration. Proppant Solutions, LLC v. Delgado , No. 01-14-00800- CV (Tex. App. [1st Dist.] July 14, 2015, np pet. h.) (Motion for En Banc Reconsideration filed on July 28, 2015 is attached as Appx. 2). Plain tiff Proppant Solutions, LLC, alleged that Delgado, an owner, secretary, and Director for Administration/Finance of Defendant ChristDel Corporation, established minimum c ontacts with Texas that submitted her to its long-arm jurisdiction by her pa rticipation in the fraudulent inducement and fraudulent performance of the underlying agreement be tween ChristDel and Proppant Solutions. Id

. at J. Keyes dissent Op. p. 2. Judge Keye s’ opinion concludes that Delgado’s contacts with Texas in connection with the negotiation and performance of the ChristDel/Proppant Solutions Contract are substantially connected to the operative facts of the litigation and

### 9 show that she clearly purpos efully availed herself of th e privilege and benefits of conducting business in Texas under a contract from which she personally profited. There is a substantial connection between Delgado’ s Texas contacts, considered collectively, and the operative facts of the litigation. Id . at 21, citations omitted. For two reasons, the jurisdictional case against Atiq is stronger than the case against Delgado. First, the trial court’s implied fact findings supporting jurisdiction over Atiq should be given deference. Second, Atiq’s involv ement in the transactions were more substantial in that he personally negotiated the Future Business Agreement on behalf of himself and then participated in that agreement through C-Fabrics that was dem onstrated to be simply Atiq under the fraudulent guise of a sham corporate entity. 

### The trial court must often resolve que stions of fact before deciding the jurisdictional question. BMC Software Belg., N. V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Because the trial court did not issue findings of fact or conclusions of law to support its denial of the special app earance, this court presumes that all factual disputes were reso lved in favor of the trial court’s ruling and “all facts necessary to support the ju dgment and supported by the evidence are implied.” Id. at 794-95. This Court need not, and s hould not, resolve conflicting evidence at this stage of the proceedings to determine whether an alter ego relationship may be found. It is enough that CoTechno presented substantial ev idence that the CoFabric corporation was not real – it was a sham used to perpetrate a fraud. There was an implied finding of fact that Co-Fabric was mere ly a sham and that Atiq was the real party

### 10 in interest for every alleged act of Co-Fabric. It was not Co-Fabric who participated in the Future Business Agr eement – it was Atiq under the guise of a sham corporation called Co-Fabric. When Co-F abric failed to comply with the contract, it wa s actually Atiq who failed to comply with the contract. Since A tiq has been sued personally, there is no reason to sue Co-Fabric as well. If Co-Fabric is the alter eg o of Atiq, it was sued at the same time suit was filed against Atiq. A bi nding determination on the alter ego question will be determined only after trial. The issue is one to be evaluated by a jury subject to appropriate instructions. See, e.g., Silkwood v. Kerr-McGee Corp ., 485 F.Supp. 566, 601 (W.D. Okla. 1979).
VI. 

### Conclusion and Prayer. CoTechno requests this Court to grant th is Motion for En Banc Reconsideration and issue a new decision finding that the trial court’s ruling de nying Atiq’a special appearance should be affirmed.

### 11 Respectfully submitted,
/s/ Tracy J. Willi Tracy J. Willi Texas State Bar No. 00784633 Willi Law Firm, P.C. 9600 Escarpment Blvd., Ste. 745, PMB 34 Austin, Texas 78749 (512) 288-3200 (512) 288-3202 (fax) twilli@willi.com ATTORNEY FOR APPELLEE, COTECHNO GROUP, INC.



### CERTIFICATE OF COMPLIANCE In accordance with Texas Rule of A ppellate Procedure 9.4, I hereby certify that this document contains 2,516 words. /s/ Tracy J. Willi Tracy J. Willi

### 12 CERTIFICATE OF FILING AND SERVICE I hereby certify that this document was fi led with Clerk of Court through the Court’s electronic filing system (“efs”) and serv ed on all counsel of record by the same manner on August 24, 2015 or by facsimile if counsel is not registered for service through the efs, as follows: James G. Ruiz Andrew Schumacher Winstead PC 401 Congress Avenue, Suite 2100 Austin, TX 78701 (512) 370-2818 (512) 370-2850 (fax) ATTORNEYS FOR APPELLANT, FAKHREALAM ATIQ Robert Tyler Tyler & Casteel 1812 Centre Creek Dr. , Suite 110 Austin, TX 78754 (512) 201-1500 (512) 201-1505 (fax) ATTORNEY FOR APPELLEE, COTECHNO GROUP, INC. /s/ Tracy J. Willi Tracy J. Willi

# A ppendix 1

### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-13-00762- CV

F ahkrealam Atiq, Appellan t

v. CoTechno Gr oup, I nc., Appellee

F ROM TH E DISTRI CT COURT O F H AY S CO UNTY, 207 TH JUDICI AL DISTRICT NO. 11- 1626 , H ONO RAB LE R. B RUCE B OY ER, JUDGE P RESIDING

M E M O R A N D U M O P I N I O N

After Fiber ex Corporation sued CoTechno Group, I nc. for claims arising from

a contra ct dispute, CoTechno filed a third-par ty petition ag ainst one of Fiberex ’s o ff icer s, Fa hkrea lam Atiq, a Canadian resident. Atiq then filed a specia l appea ranc e, which the trial court denied. I n this interlocutory appea l, Atiq contends that the t rial court err ed in deny ing h i s specia l
appea ranc e beca

use, acc ording to Atiq, any and all actions he took wer e solely in his capa city as

a corpor ate office r. See Tex

. C iv. Prac. & Rem. Code § 51.014(a) (7); Tex. R. Civ. P. 120a. We conclude that the undisputed alleg ations and the evidenc e befor e us are ins u ff i ci en t t o support
p e r s o n a l ju

r is d ic ti o n o v e r A ti q in h is in d iv id u a l c a p a c it y . T h e r e f o r e , w e r e v e r s e th e tr ia l c o u r t’ s o r d e r and rende r judgme nt dismiss ing CoTechno’ s claims ag ainst Atiq for want of persona l jurisdiction.BACK GR OUND Atiq, a Canadian citizen residing in Edmont o n , Al berta , is chair man and CEO of Fiber ex, a Canadian corpor ation. Acc ording to Atiq, F ibere x “primar ily offe rs g oods and service s rela ted to th e ma

n u f a cture and marke ting of g lass fiber reinfor ceme nts for composites.” Historically , Fiber ex supplied its pro d u ct t o CoTechno, a manufa cture r of g lass fiber woven products with fac iliti es loca ted in San Marc os, Texas.

I n Aug ust 2009, a dispute arose over a cer tain shipment of mat er i al s t o CoTechno from Fiber ex. I n short, CoTechno claimed that Fiber ex had pro v ided defe ctive materia ls, and Fiber ex claimed that CoTechno owed $360,000 for its purcha se of the materia ls. Ultimately , in an eff ort to se ttle the ir dispute, the companies enter ed into a Future Business Ag ree ment. I n part, the Ag ree ment provided that (1) a new en tity , C-Fa brics, would initially serve as a wholly owned subsidiary of Fiber ex; (2) CoTechno would ch annel some of its business throug h C-Fa brics; and (3) a portion of C-Fa

bric’s reve nue would be devoted to pay ing down the “debt” claimed by Fiber ex, in an amount neg otiated by the parties. Finally , t h e companies ag ree d that once the debt was satisfied, owne rship of C-F abric s would be transf err ed to CoTechno f

or $1. The c ompanies opera ted under the Ag ree ment for se vera l y ear s, and the ne g otiated debt amount was eventua lly paid off. On Aug ust 16, 2011, Fiber ex sent wr i t t en notice of its intention to terminate th e Fu ture Business Ag ree ment. Fiber ex then filed suit in Hay s County , 1 Texas, claiming owner ship of c e r ta in p r o p e r

ty

— in v e n to r y , ma te r ia ls , a n d le a s e d e q

u ip me nt—located

Although the parties ag ree that the “debt” was eventua lly satisfied, the p ar t i es dispute 1 whether CoTechno’ s pay ment of $1 on Aug ust 18, 2011, was timely an d whether the pay ment trig g ere d Fiber ex’s duty

to transfe r owne rship of C-F abric s.

2at CoTechno’ s ware house and obta ined a temporar y restra ining order allowing Fibere x to remove the proper

ty from the fac ility without interfe renc e from CoTechno. I n response , CoTechno filed
counter claims ag ainst Fiber ex and later a third-par ty petition, joining Atiq as a third-par ty defe ndant. Wit h respe ct to Atiq, CoTechno alleg ed that Atiq had persona lly eng ag ed in a varie ty of torts and that he had brea ched contractual obliga tions under the Future Business Ag ree ment. Specifica lly , CoTechno claimed that Atiq and Fiber ex conver ted fiberg lass mat er i al that was the proper t y o f C o Tec hno and C-Fa brics by obtaining a temporar y restra ining order permitting the removal of t he materi al

. C o T ec h n o also claimed that Atiq was a party to the Future Business Ag ree ment in his perso n al ca p ac i t y and that he and Fiber ex had fra udulently enter ed into the Ag ree ment with CoTechno and then brea ched the Ag ree ment by failing to transfe r C-Fa brics. Simi larly , CoTechno claimed that the Ag ree ment cre ated a partne rship betwee n Fiber ex, CoTechno, and Atiq and that Atiq brea ched his fiduciar y duties as a partne r by eng ag ing in self-de aling

. Finally , CoTechno alleg ed that Atiq was individually liable on all claims beca use he was acting as the alter
eg o of both Fibe rex and C-Fa brics.
I n response , Atiq filed a spe cial appe ara nce unde r Rule 120a of

the Texas Rules of Civil Procedur e, asser

ting that the court lacke d persona l jurisdiction over him. See Tex. R. Civ. P.
120a. Atiq attache d an affidavit t o his specia l appea ranc e that he la t er introduced as an ex hibit at the spec ial-appe ara

nce he aring . I n rele vant par t, Atiq swore to the following :

1. I am a c itiz en of Cana da re siding in Edmonton, Alberta

. . . . 2. I am not and have not ever been a resident of t h e S t at e o f T ex as. I own no proper ty in Texas, d o n o t h av e a bank acc ount in Texas, nor do I have a mailing addre ss or place of business in Texas. I do not eng ag e in business in

3Texas in my individual capa city and am n o t a party to any ag ree ment perf ormable w ithin the St ate.

. . . [3.] I n my

capa city as Chairman a

nd CEO of Fiberex, I trave led to San Marc os, Texas, once in 20 0 9 as part of a routine customer visit to meet with the principals of CoTechno. Aside fr om this single trip to Hay s County , my only other trave ls to Texas have been to Houston approximately three times in the last two y ear s, in my capac i t y as an office r of a differ ent Canadian Corporation, to visit customers of that dif fe re n t Canadian entity which is wholly unrela ted to this li tiga tion. [4.] My interac tions with CoTechno and its principals wer e all underta ken in my capa city as an office r of Fiber ex in the further ance of the business of Fiber ex, and not in my individual capa city

. I was not direc tly involved in neg otiating the Future Business Ag ree ment (“F BA ”) with CoTechno. The majori ty o f the FB A was neg otiated and prepa red by two other Fiber ex off icer s at the time, Peter Bony

un and Mark Wil liams. Howeve r, in my capa city as Chairman and CEO of Fiber ex, I did revie w and provide comments to the ag ree ment during the neg otiation proce ss. Ultimately , as Chairman of Fiber ex, I approve d and signe d the FB A on beha lf of F ibere x . [5.] The FB A rec og nizes a separ ate corpor ation, CoTechno Fa brics I nc. (“CFa brics”) , a wholly owned subsidiary of Fiber ex, as a party to the ag ree ment. C-Fa brics was incorporated under the laws of the State of California in 2009. I executed the Articles of I ncorpor ation for C-Fa brics on Aug ust 5, 2009, and afte rwa rds forwa rded the executed Articles of I n co rp o ration to Mr. Roge r Bha tia, Fiber ex’s California counsel, for rec ording in the State of California. C-Fa brics has not maintained a place of business in Texas nor had any Texas employ ees at any time. Nor has C-Fa brics ever maintained a Texas mailing addre ss or a reg istered ag ent within the State of Texas for service of proce ss. I signe d the FB A in Canada as President of C-F abric s on Aug ust 17, 2009.

The trial court later held a hear ing at which the parties submitt ed evidenc e, including Atiq’s aff idavit. The trial cour

t denied the spe cial appe ara nce, a nd this appeal followe d.

4BACK GR OUND LAW
Texas courts may asser

t jurisdiction over a n o n re s i dent defe ndant if (1) the Texas long- arm statute authorizes the exercise of jurisdiction and (2) the exercise of jurisdiction is

c o n s is te n t w it

h f e d e r a l a n d s ta te c o n s ti tu ti o n a l g u a r a n te e s o f d u e p r o c e s s . M

o k i M a c R iv e r E x p e d it io n s

v. Drugg , 221 S.W .3d 569, 574 (Tex. 2007); see Tex. Civ. Prac. & Rem. Code § 17.042 (Texas longarm statute). The Texas long -ar m sta tute allows Texas c ourts to e x erc ise persona l jur isdiction “ as far as the fede ral constitutional require ments of due proce ss will permit.” BMC Software Belg., N.V.

v. Marchand , 83 S.W .3d 789, 795 (Tex. 2002). Consequently , “the require ments of the Texas longarm statute are satisfied if an asser tion of jurisdiction acc ords with fede ral due-pr ocess limit ations.” Moki Mac River Ex

peditions , 221 S.W .3d at 575.
T h e exercise of jurisdiction over a nonresident comports with fede ral due proces s when (1) the nonresident has minimum contac ts with the forum state, and (2) asser ting jurisdiction complies with traditional notions of fair play and substantial justice. Moncrief Oil Int’l, Inc. v. OAO Gazprom , 414 S.W .3d 142, 150 (Tex. 2013); see International Shoe Co. v. W a s h ington , 326 U.S. 310, 316 (1 945). “A defe ndant establishes minimum contac ts with a state when [he] ‘purpose fully

avails [hims elf] of the privileg e of conducting activities within the forum state, thus invoking the benef

its and p ro t ec t i ons of i ts laws.’” Retamc o Operating, Inc. v. Republic Drill ing Co. , 278 S.W .3d 333, 338 (Tex. 2009) (citing Hanson v. De nckla , 357 U.S. 235, 253 (1958)).

The require ment of “purpose ful availment” encompa sses three considerat i o n s. First, a court must consider only the defe ndant’s contac ts with the forum, not the unilatera l activity of another party or a third person. Moki Mac River Expe ditions , 221 S.W .3d at 575 (citing Michiana

5Easy Livin’ Country, Inc. v. Holten , 168 S.W .3d 777, 784-85 (Tex. 2005)). I n addition, the contac ts

on which jurisdiction is based must be purposef ul. Id

. I f the defe ndant’s Texas contac ts are random, fortuitous, or attenuate d, the defe ndant is not subject to jurisdiction in Texas courts. Id

. Finally , the defe ndant must seek s o m e benef it, advanta g e, or profit by availing himself of the jurisdiction of
Texas. Id . The defe ndant’s activities, whether they consist of direc t acts within Texas or conduct outsid e o f Texas, “must justify a conclusion that the defe ndant could rea sonably anticipate being called into a Texas court.” American Type Culture Collection, Inc. v. Coleman , 83 S.W .3d 801, 806 (Tex. 2002) (citing W

orld-W ide Volkswagen Corp. v. W oodson , 444 U.S. 286, 297 (1980)).
A nonresident d ef

en dant’s contac ts with the forum state can g ive rise to either specific or g ener al jurisdiction. BMC Software , 83 S.W .3d at 795. Gene ral jurisdiction exis ts when the defe ndant has made continuous and sy stematic contac ts, such that the fo ru m may exercise jurisdiction over the defe ndant even if t h e alleg ed liability does not arise from or rela te to those
contac ts. Id

. at 796. “F or an individual, the para digm forum for the exercise of g ener al jurisdiction is the individual’s domicile; for a corpor ation, it is an equivalent place , one in which the corpor ation
i s fa irly reg arde d as at home.” Goodye ar Dunlop Tires Operations, S.A. v. Brow n , ___ U.S.

___ , 131 S. Ct. 2846, 2853-54 (2011). I n contra st, specific jurisdiction exis ts only if the alleg ed liability arises out of or is re lated to the def endant’ s contac t with the forum. Moki Mac River Ex peditions , 221 S.W .3d at 576. When speci fi c j urisdiction is alleg ed, the focus of the minimum -conta cts analy sis is the rela

tionship among the defe ndant, the forum, and the litigation. Id

. at 575-76 (citing
H e li c o p te r o s Na c io n a le

s d e Co lo m b ia , S

. A

. v
. H a ll , 4 6 6 U

. S. 4 0 8 , 4 1 4 ( 1 9 8 4 ) )

. I f th e c o u r t c o n c lu d e s that a nonresident defe ndant has minimum contac ts with Texas by purposef ully availing himself of

6the p ri v i l ege o f conducting activities here , the court must then addre ss whether the defe ndant’s

alleg ed liability arises out of or is rela ted to those contac ts. See id

. at 579 (“F or specific -jurisdiction
purposes, purposef

ul availment has no jurisdictional rele vance unless the defe ndant’s liability arises from or r elates to the f

orum contac ts.”).

STANDARD OF REVIEW Under the Texas long- arm statute, the plaintiff bear s t h e initial burden of pleading sufficie n t al l ega t i ons to bring a nonresident defe ndant within the persona l jurisdiction of a Texas
court. BMC Software , 83 S.W .3d at 794. When this ini tial burden is met, the burde n shifts to the nonresident to neg ate all bases of persona l jurisdiction asser ted by the plaintiff. Id

. A defe ndant may
neg ate jurisdiction on a leg al basis by showing that even if the plaintiff’s a lleg ations are true, they do n o t es t ab l i s h jurisdiction. Kelly v. Gene ral Interior Constr., Inc. , 301 S.W .3d 653, 659 (Tex. 2010). A defe ndant may also nega t e jurisdiction on a fac tual basis by introducing evidenc e that rebuts the alleg ations in the pleading s. Id

. Only rele vant jurisdictional fac ts, rathe r than the ultimate merits of the case , should be co n s i d er ed in deciding the issue of jurisdiction. Moncrief Oil Int’l , 414 S.W .3d at 156.

When, a s in this case , the trial court does not issue finding s of fac t a nd conclusions of law, all fac ts nece ssary to support the judgme nt and supported by the evi d en ce ar e implied.
B MC S oftware , 83 S.W .3d at 795. When the appellate rec ord includes the repor ter’s rec ord an d cler k’s rec ord, these implied finding s are not conclusive and may be challeng ed for leg al and fac tual sufficie ncy . Id

. The ultimate d et er m i n ation of whether a court has persona l jurisdiction over a defe ndant is a question of law that we revie w de novo. Moncrief Oil Int’l, Inc. , 414 S.W .3d at 150.

7Be cause specific jurisdiction require s that the claim arise out of or result from the defe ndant’s forum

contac ts, we analy

ze whether jurisdictional conta c ts s u p p o r t s p e c if ic ju r is d ic tion on a claim-by -cla im basis unless the claims ar ise from the same forum c ontacts. Id

.

ANALYSIS On appea l, Atiq asser

ts that CoTechno’ s “jurisdictional alleg ations are both fac tually and leg ally insufficient to establish persona l jurisdiction over Atiq.” Specifica lly , Atiq a rg ues that “all of the complained of

acts a lleg ed to have been committed by Atiq w ere done in Canada in his
repr esenta tive capa city as an office r of Fiber ex or C-Fa brics” and that under the fiduciar y -shield doctrine none of these business contac ts may be imputed to Atiq individually . Acc ording to Atiq, beca use the evidenc e shows that Atiq had no contac ts with Texas in his indivi dual capa city , the claims ag ainst him should be dism issed for lac k of jurisdiction.

Un d er the fiduciar

y -shield doctrine, a nonresident corpor ate office r or employ ee is protec ted from the ex erc ise of j urisdiction when all of tha t individual’s contacts with the forum
state wer e made on behalf of his employ er. Tabacinic v. Frazier , 372 S.W .3d 658, 668 (Tex. 2

Courts that have applied the fiduciar y -shield doctrine have g ener ally limit ed its application 2 to the exercise of g ener al jurisdiction over a nonresident defe ndant. See Tabacinic v. Frazier , 372 S.W .3d 658, 668 (Tex. App.—Dallas 2012, no pet.); Ennis v. Louisea , 164 S.W .3d 698, 707 (Tex. App.—Austin 2005, no pet.). One court of appea ls, howeve r, has rec ently questioned and reje cted this limit ation. See Stull v. Laplant , 411 S.W .3d 129, 138 (Tex. App.—Dallas, 2013 no pet.). I n that case , the plaintiffs asser

ted that the fiducia

ry -shield doctrine did not apply to the ir claim of brea ch of contra ct based on specific jurisdiction. Id

. at 135-36. The Dallas Court of Appea ls r ejec ted the notion that the fiduciary -shi eld doctrine applies only to g ener al-jurisdiction analy sis and held that “eve n if a plaintiff asser

ts only specific jurisdiction reg arding an alleg ed brea ch of contra ct ag ainst a non-r esident ag ent of the contra cting party , the ag ent’s conta cts with Texas in furthera nce of the prin cipal’s business are attributable only to the employ er, not to the ag ent, beca use the fiduciar

y s h ie ld d o c tr in e a

p p li e s . ” I d

. a t 1 3 8

. Si mi la

r ly , in th is c a s e , Co T e c h n o a r g u e s th a t s p e c if ic ju r is d ic ti o n 8App.—Dallas 2012, no pet.); see Morris v. Kohls-Y ork , 164 S.W .3d 686, 698 (Tex. App.—Austin 2005, pet. dism’d) (noting that courts of appea ls have rec og nized fiduciar y -shield doctrine, althoug h
supreme court has not expli citly adopted it). The fiduciar y -sh ie ld d o c tr in e, howeve r, does not protec t

a corpor ate office r or employ ee from an asser tion of persona l jurisdiction when the opposing party has alleg ed intentional torts or fra udulent acts for which he may be held individua l ly liable.
Ennis v. Loiseau , 164 S

. W

. 3 d 698, 707 (Tex. App.—Austin 2005, no pet.); see Stull v. Laplant , 411 S.W .3d 129, 135 (Tex. App.—Dallas 201 3 , n o p et.). This is beca use a “cor

porate office r is primarily liable for his own torts.” Morris v. Powell , 150 S.W .3d 212, 221 (Tex. App.—San Antonio 2004, no pet.). Simi larly , the fiduciar y -shield doctrine does not protec t an individual from the exercise of jurisdiction based on claims of pierc ing the corpor ate veil. Stull , 411 S.W .3d at 135. “The re is no blanket protec tion from jurisdiction simply becaus e a defe ndant’s alleg ed acts wer e done in a co rp o ra t e ca p acity .” SITQ E.U., Inc. v. Reata Rests., Inc. , 111 S.W .3d 638, 651 (Tex. App.—For

t Worth 2003, pet. denied). Despite Atiq’s asser

tion that he was at all times acting in a corpor ate capa city , CoTechno contends that Atiq is subjec t to persona l jur isdiction in his individual capa city for three

rea sons. First, CoTechno contends that Atiq’s contac ts arising from the Future Business Ag ree ment
repr esent his persona l contac ts beca u s e, accor ding to CoTechno, Atiq was not acting on behalf of

a corpor ation when he signe d the Ag ree ment. CoTechno claims that “Atiq persona lly brea ched the

exis ts with respe ct to its brea ch-of -contra ct and tort claims ag ainst Atiq. Howeve r, we need not decide whether the fiduciar y -shield doctrine gen er ally applies to CoTechno’ s claims of specific jurisdiction. As we will explain, even if Atiq’s actions are fairly attributable to him in his individual capa city , CoTechno has not established sufficie nt contac ts to confe r jurisdiction over Atiq in Texas. 9[Future B usiness Ag ree ment] by , inter alia, br eac hing the provision on ownership of f iberg lass by claiming that Fiber ex was the owner of fiberg lass at CoTechno’ s ware house, by failing to comply with the termination provisions, and by failing to transfe r owner ship of [C -F abric s] to [C oTec hno].” Second, CoTechno claims that “Atiq has committed actionable torts, in whole or in part i n Hay s County , Texas” for which he is persona lly liable, including fra ud, brea ch of fiduciary d u t y , and interfe renc e with business rela tionships. Third, CoTechno arg ues that the fiduciar y -shield doctrine does not apply beca

use C-Fa brics and Fiber ex we re o pera ting as the alter eg o of Atiq. We will addre ss eac h of CoTec hno’s asser tions in t urn.

The Future Busi ness Agree m ent

We first examine CoTechno’ s asser tion that Atiq signe d the Fut u re Business Ag ree ment in his persona l capa city

. I n its live pleading s, CoTechno asser ts that Atiq is persona lly liable under the Ag ree ment beca use Atiq signe d the Ag ree ment as an i n d i v i d ual. Specifica lly , CoTechno alleg es that, al t houg h Atiq purported to sign the Ag ree ment on behalf of Fiber ex, as CEO and President, and on behalf of C-Fa brics, as CEO and President, C-Fa brics had not y et been formed and t here fore was not in exis tence at t he ti me of signing

. Fur ther, CoTechno alleg es t hat,

as a res u lt of the Ag ree ment, a partne rship was formed betwee n Fiber ex, CoTechno, and Atiq. CoTechno’ s alleg ation that Atiq enter ed into the Ag ree ment in his individual capa city serve s as the basis for three of CoTechno’ s cause s of action: (1) that Atiq is persona lly liable for brea ch of the
Future Business Ag ree ment; (2) that Atiq beache d fi duciar y duties that he owed to CoTechno as partne r under the Future Business Ag ree ment; and (3) that Atiq committed fra ud by enter ing into the Ag ree ment beca

use he pe rsonally

never intended to honor the A g ree ment.
10“When an ag ent nego t i at es a contra ct for its principal in Texas, it is the principal

who does business in this state, not the ag ent.” Mort Keshin & Co. v. Houston ChroniclePubl’g Co. , 992 S.W .2d 642, 647 (Tex. App.—Houston [14t h Dist.] 1999, no pet.). Howeve r, one “ca nnot act

as an ag ent of a cor p o ra t i o n t h at d o es not y et exis t.” Cagle v. Clark , 401 S.W .3d 379, 392 (Tex. App.—Texarkana 2013, no pet.). As a result, to the extent a nonresident defe ndant’ s co n t ac t s 3
repr esent actions taken on behalf of an unformed corpor ation, the nonresident defe ndant’s contac ts with the forum are attributable to him persona lly in analy zing persona l jurisdiction. Cappuccitti v. Gul f In d u s
. P rods., Inc. , 222 S.W .3d 468, 486 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (holding that corpor ate office r’s actions p ri o r t o incorporation subjected office r to persona l jurisdiction in Tex as in his individual capac ity for tort c laims arising out of those ac tions).
I n this case , the specia l-appe ara nce rec ord es t ab l i s hes that (1) the Articles of
I ncorpor ation for C-Fa

brics wer e executed by Atiq on Aug ust 5, 2009; (2) the Future Bu s i n es s Ag ree ment was signe d on or about Aug ust 17, 2009; and (3) C-Fa brics’s Articles of I ncorpor ation

we re fi led with the California Secre tary of State on September 11, 2009. There fore , we ag ree 4
that Atiq’s contac ts prior to the incorporation of C-Fa bri cs

— t o the extent the actions would otherwise be attributable to C-Fa brics—ar e the actions of Atiq persona lly for purposes of analy zing jurisdiction. See Cagle , 401 S.W .3d at 392 (consider ing nonresident defe ndant’s “conta cts prior to

As a result, when a purported ag ent enter s a contra ct on behalf of an unformed corpor ation, 3 he is persona lly liable on the contra ct, absent an ag ree ment to the contra ry with the contra cting party

. F ish v. Tandy Corp. , 948 S.W .2d 886, 897 (Tex. App.—For t Worth 1997, writ denied)

. I n t h es e c ir c u ms ta nces, the ag ent is relieve d of liability only when the corpor ation, once formed, s u b s e q u e n tl y adopts the contra ct either expressly or by acc epting its benefits. Id . at 898. I n California, corpor ate exis tence beg ins upon the filing of article s of incorporation. See 4 Cal. Corp. Code § 200. 11the formation of [t he business entity ] as contac ts conducte d in [defendant’ s] individual c apac ity ”).

U n d e r th is a

n a ly s is , th e u

n d is p u te d e v id e n c e s u

p p o r ts Co T e c h n o ’ s a ll e g a

ti o n th a t A ti q , in h is p e r s o n a l
capa city , enter ed into the Future Business Ag ree ment with Fiber ex and CoTechno, a Texas resident. Consequently , to the extent Atiq conducte d business in Texas under th e Agr ee m ent on behalf of
C-Fa brics prior to its incorpor ation, we would a lso imput e those c ontacts to Atiq persona lly

.

Considering only Atiq’s contac ts in his individual capa city , h o weve r, we cannot conclude that Atiq’s contac ts with Texas support the ex erc ise of specific j urisdiction with respe ct
to CoTechno’ s claims rela ted to the Future Business Ag ree m en t

— brea ch of contra ct, brea ch of
fi duciar y duty , and fra

ud. Ba sed on the pleade d jurisdictional fac ts and the evidenc e befor e u s , Ati q h as o nly a single forum contac t that is rela ted to the opera tive fac ts underly ing these three claims—his execution of t h e Fu t u re Business Agr eeme nt. To the ex tent the Agre ement calls for 5 perf ormanc e in Texas, it expressly calls for perf ormanc e only on the part of C-Fa brics and Fiber ex. Fur ther, CoTechno has not specific ally alleg ed nor prese nted an y ev idence of perf ormanc e of the Ag ree ment b y At i q afte r execution of the Ag ree ment but prior to C-Fa brics’s incorporation. For example, Co T ec h no has not alleg ed or prese nted evidenc e that during this four- wee k time period Atiq shipped materia ls to Texas, marke ted to Texas, established an office in Texas, or otherwise conducte d business in Texas under the Ag ree ment.

CoTechno also arg ues that Atiq trave led to San Marc os in 2009, prior to the execution of 5 the Agre ement, to meet with CoTechno about the proposed Ag ree ment. To t h e ex t en t CoTechno g ener ally relies on this 2009 trip as a contac t that was made by Atiq on behalf of C-Fa brics prior to i t s i n co rp oration, we conclude that CoTechno has not specific ally pleade d that this trip was underta ken on behalf of C-Fa brics and there is no evid en ce that would support such an implied finding

. I nstead, acc ording to Atiq’s undisputed aff idavit, his trave l to Texas in 2009 was solely in his ca p ac i t y as an office r of Fiber ex. As a result, we cannot attribute this trave l to Atiq in his individual capac ity , despite the fa ct C-Fa brics wa s not incorpora ted at the time of the trip. 12Entering into a single contra ct with a Texas resident, g ener all y , i s i nsufficie nt to

establish minimum contac ts. Michiana , 168 S.W .3d at 786 (citing Burger King Corp. v. Rudzewicz , 4 71 U.S. 462, 475 n.18 (1985)) ; Max Protech, Inc. v. Herrin , 340 S.W .3d 8 7 8 , 8 8 6 (T ex . App.—Houston [14t h Dist.] 2011, no pet.). Be cau se there is no alleg ation or evidenc e that the Ag ree ment contemplated or resulted in ong oing activities direc ted at Texas by Atiq in his persona l
capa city , we cannot conclude that this s i n gl e contac t is sufficie nt to support a finding that Atiq purposef ully availed himself of the be nefits and law s of Texas. As a re sult, the tria l c ourt err ed to the extent it conclude d that specific jurisdiction exis ts with respe ct to CoTechno’ s claims of brea ch of contra ct, bre ach of

fiduciar y duty , and fr aud.

Tortious condu ct

Next, we co n s i der CoTechno’ s asser tion that beca

use Atiq eng ag ed in tortious conduct in Te x as for

which he is pe rsonally

liable, he is subject to per sonal jurisdiction in Tex as. An office r’s actions perf

ormed in his corpor ate capa city may subject him to persona l jurisdiction and liability in his individual capa city if his actions wer e tortious or fra udulent. Niehaus

v. Cedar Bridge, Inc. , 208 S.W .3d 575, 581 (Tex. App.—Austin 2006, no pet.). Ho weve r, a
corpor ate office r’s tortious or fra udulent activities will support the exercise of specific jurisdiction only when (1) the corpor ate office r’s contac ts with the forum demonstrate purposef ul availment and (2) the cause of action arises from or rela tes to the se contac ts. See id

. (explaining that defe ndants’ fra udulent and tortious actions could support exercise of specific jurisdiction only if actions constituted purposeful a

vailment and we re substantially connec ted to litigation and f orum).

13CoTechno’ s conver sion claim ag a inst Atiq arises from two alleg ed activities: (1) that

Atiq direc ted “Mar

k Wil liams to g o to Texas and remove all the fiberg lass from the CoTechno

war ehouse in Texas” and (2) that Atiq “dire cted his ag ent to repr esent to the court that the proper ty

was owned by Fiber ex.” I n considering whether these contac ts demonstrate that Atiq purposef ully 6
availed himself of the privileg es and benef its of conducting business in Texas, we are mindful of the
Texas Supreme Court’s decision in Michiana

. 168 S.W .3d at 789. I n that case , the court held that

a nonresident defe ndant’s ability to fore see that his actions would cause harm in the forum state “is
not a ‘suffic ient benchma rk’ for exercising persona l jurisdiction” and reje cted those decisions from
courts of appea ls that had previously held that a nonresident could be subject to persona l jurisdiction based on an alleg ation that the defe ndant “dire cted a tort” at Tex as . Id

. at 788-90. Atiq asser ts that CoTechno’ s jurisdictional alleg ations of conver sion are nothing more than alleg ations that Atiq in his p ersonal capa city direc ted a tort at Texas and, under Michiana , are insufficient to support jurisdiction. See id

. at 789; see also Niehaus , 208 S.W .3d at 583 (conc luding that specific jurisdiction did not exis t over corpor ate office r who all egedly eng ag ed in fra udulent activity outside of Texas with eff

ects felt in Texas). Howeve r, we need not decide whether these alleg ations demonstrate purposef

ul availment or are simply al l ega t i ons that Atiq direc ted a tort. I nstead, we conclude that Atiq’s contac ts, even if purposef ul, are insufficient to support the exercise of specific

Wh il e th e p a

r ti e s u lt im a

te ly d is p u te o w n e r s h ip r ig

h ts in th e f ib e r g la s s ma

te r ia l, f o r p u r p o s e s 6 of analy zing jurisdiction we only consider whether this contac t is sufficie nt to support the exercise of persona l jurisdiction over Atiq. See Kelly v. Gene ral Interior Constr., Inc. , 301 S.W .3d 653, 660 (Tex. 2010) (“B ut the mere exis tence of a cause of action does not automatically satisfy jurisdictional due proce ss conce rns. . . . I nstead, jurisdictional analy sis alway s cente rs on the defendant’s actions and choice s to enter the forum state and conduct business.”); Michiana Easy Livin’ Country, Inc. v. Holten , 168 S.W .3d 777, 784-85 (Te x . 2005). 14jurisdiction be cause the rec ord does not suppor t the conclusion that CoTechno’ s conver sion c laim is substantially

connec ted to these c ontacts. A cause of action rela tes to jurisdictional contac ts when a substantial conn ec t i o n exis ts betwee n the contacts and the ope rative f acts of the litigation. Moki Mac River Expeditions , 221 S.W .3d at 576. Conversion is the “wr ong ful exercise of dominion and control over a nother’s
proper ty in d en ial of or inconsistent with his rig hts,” Johnson v. Brewer & Pritchard, P.C. , 73 S

. W

. 3 d 193, 211 n.44 (Tex. 2002), and the opera tive fac ts at trial conce rning CoTechno’ s

conver sion claim ag ains t At i q wi ll be whether Atiq, or someone acting on his behalf , remove d materia ls belong ing to CoTec hno from the CoTec hno war ehouse.

The conver sion tort as alleg ed by CoTechno occur red in Texas and was felt in Texas, wher e t h e C oTec hno war ehouse was located. I n addition, there can be no dispute that, based on CoTechno’ s alleg ations, Fiber ex would be subject to the jurisdiction of Texas courts for CoTechno’ s

conver sion claim. Howeve r, t here is no alleg ation or evidence sugg es t i n g t h at t he materials wer e

remove d by Atiq pe rsonally or by persons acting on his be half persona lly

. I nstead, the undisputed evidenc e demonstrates that any action taken by Wil liams or others in r emoving the materia ls f rom CoTechno’ s war ehouse was conducte d on behalf of Fiber ex. Acc ording to Wil liams’s deposition, which was submitt ed as evidenc e at the specia l-appe ara nce hear ing, Wil liams was employ ed by Fiber ex at the time the materia ls wer e remove d by Fi b er ex em p l oy ees, and the materia ls wer e

remove d beca

use, at lea st acc ording to Wi lliams, the materials we re the proper ty of F ibere x . Be cause there is nothing in the rec ord sug g esting that Atiq persona lly participa ted in the allege d conver sion, CoTechno’ s claim aga inst Atiq is, in eff ect, a claim t hat Ati q p ar t i ci p ated

15in a civil conspirac y to commit conver sion. See Chon Tri v. J.T.T. , 162 S.W .3d 552, 556 (Tex. 2005)

(civil conspirac y occur s when there are “(1) two or more persons; (2) an object to be acc omplished; (3) a meeting of t he mi nds on the obj ect or course of ac tion; (4) one or more unlawful, overt acts;

a n d ( 5 ) d a ma g e s a s a p r o xim a

te r e s u lt ” )

. H o w e v e r , p e r s o n a l ju r is d ic ti o n o v e r a n o nr e s id e n t d e f e n d a n t
cannot be based solely u p o n t he eff ects or conseque nces of an alleg ed civil conspirac y . National Indus. Sand Ass’n v. Gibson , 897 S.W .2d 769, 773 (Tex. 1995). I nstead, jurisdiction must be based

on wh et h er the defe ndant himself purposef ully established minimum contac ts that satisfy due
proce ss. Id

. CoTechno has alleg ed that a causa l rela tionship exis ts betwee n Atiq’s communication
t o Wil liams and the remova l of the materia ls; howeve r, but-for causa tion alone is insufficient t o support specific jurisdiction. Moncrief Oil Int’l , 414 S.W .3d at 142. The rela tionship b e tw e e n th e

a ll e g e d c o n

ta c t— A ti q ’ s c o mm

u n ic a ti o n s o u ts id e o f T e xa s , r e q u e s ti n g th a

t o th e r s c o n d

u c t activity in Texas—and the opera tive fac ts in the litigation o f C o T ec h no’s conver sion claim is simply too
attenuate d to satisfy

specific jurisdiction’s due-proc ess conc erns with re spect to Atiq persona lly

. Simi larly , CoTechno al l ege s that Atiq interfe red with its business rela tionships. Specifica lly , CoTechno alleg es that “Mar k Wil liams, on behalf of Fiber ex and Atiq,” made cer tain misrepre sentations to CoTe chno customer s or potential customers tha t c aused harm to CoTe chno.
Howeve r, CoTechno does not explain, and we cannot discern, the jurisdictional contac ts with Texas, if any , to which th i s claim rela tes. There is no alleg ation that these repr esenta tions wer e made in
Texas or t o Texas residents. Moreove r, t here is no evidence sug g esting that these repre sentations by Wil liams, if made, wer e made on behalf of Atiq persona lly and not on behalf of Fiber ex. Acc ording ly , based on the pleading s and the rec ord befor e us, we conclude that the trial court err ed

16to the extent it conclude d that specific jurisdiction exis ts wi t h re s p ect to CoTechno’ s claim of

tortious interfer ence ag ainst Atiq. 7

Alter ego Finally , we consider CoTechno’ s asser tion that Atiq is sub

je c t to p e r s o n a l ju

risdiction b a s e d o n th e a c ti v it ie s o f C- F a b r ic s a n d F ib e r e x b e c a

u s e th e e n ti ti e s w e r e o p e r a ti n g a s A ti q ’ s a lt e r e g o . Personal jurisdicti o n o v er an individual cannot be based on jurisdiction over a

co rpora tion with which the individual is associate d unless the corpor ation is the alter eg o of the
in d iv id u a l. Ta b a c in ic , 3 7 2 S. W. 3 d a t 6 6 9 ; D

. H

. B la ir I n v
. B a n k in g Co r p
. v
. R e a r d o n , 9 7 S. W. 3 d 2 6 9 , 277 (Tex. App.—Houston [14t h Di s t

. ] 2002, pet. dism’d w.o.j.). Whil e ordinarily a nonresident defe ndant has the burden to neg ate all bases for p er s o n al j u risdiction proper ly pleade d, a plainti ff who relies on the exis tence of an alter- eg o rela tionship to impute a corpor ation’s contac ts with Texas
to an individual must prove that such a rela tionship exis ts. W

ashington DC Party Shut tle, LLC v.

CoTechno also arg ues t h at At i q trave led to San Marc os in 2009, prior to the execution 7 of t h e Agreement, to meet with CoTechno about the proposed contra ct and during that meeting fra udulently induced CoTechno t o enter into the contrac t. Atiq asserts that CoTechno c annot re ly on this fra ud claim to support persona l jurisdiction over Atiq beca use it was insufficiently pleade d. We ag ree . The alleg ation that Atiq committed fra ud in connec tion with his 2009 trip to San Marc os was not prese nted by CoTechno in its pleading s befor e the trial court. Rather, CoTechno’ s fra ud claim, as prese nted i n its pleading s, is that Atiq committed fra ud when he signe d the Future Business Ag ree ment without any intent to perf orm. Compare Spoljaric v. Perciv al Tours, Inc. , 708 S.W .2d 432, 434 (Tex. 1986) (“A promise to do an act in the future is actionable fra ud when made with the intention, desig n and purpose of dece iving, and with n o i n t en tion of perf orming the act.” ), with Haase v. Glazner , 62 S.W .3d 795, 798 (Tex. 2001) (“Te x as law has long imposed a duty to abstain from inducing another

to enter into a c ontrac t throug h the use of f raudule nt misreprese ntations.”).

17Iguide Tours , LLC , 406 S.W .3d 723, 739 (Tex. App.—Houston [14t h Dist.] 2013, pet. denied)

. 8

Evidence of al t er eg o includes proof of (1) the pay ment of alleg ed corpor ate debts with persona l chec k or other comm i n gl i n g of funds; (2) repr esenta tions that the individual will financ ially back the corpor ation; (3) the diversion of company profits t o t h e i n dividual for his persona l use; (4) inadequa te capitalization; and (5) other failure to keep corpor ate and persona l assets separ ate. Crithf ield v. Boothe , 343 S.W .3d 274, 284-85 (Te x . App.—Dallas 2011, no pe t.). CoTechno claims that both C-Fa brics and Fiber ex opera ted as the alter eg o of Atiq.
I n rele vant par

t, CoTechno has ple aded tha t:
[C -F abric s] was a shell: I t had no opera tions; perf ormed no tasks; had no employ ees; and, had no bank acc ount. Atiq rec eived chec ks pay able to [C -F abric s] and deposited those chec ks into either his persona l acc ount or the Fiber ex acc ount. [C -F abric s] was supposed to be a wholly owned subsidiary of Fiber ex, but [ C-Fa brics] ne ver issued any stock at all, much less to Fiber ex. [C -F abric s] had no employ ees and if any tasks neede d to de done, it was either done by Atiq persona lly or a Fiber ex employ ee at his direc tion. [C -F abric s’s] phy sical addre ss was at the same location as a fri en d of Atiq’s and if any mail c ame to tha t a ddress, it wa s forwa rded to A tiq, a s a favor , by Atiq’s friend. Finally , Fiber ex issued invoices to [C -F abric s’s] customers on behalf of [C-Fabr ics].

Most of Co T ec h no’s alter- eg o alleg ations are rele vant to an issue not raised by CoTechno—whe ther C-Fa brics opera ted as the alter eg o of Fiber ex. Cf. PHC-Minden, L.P. v.

Be cause due-pr ocess consi dera tions cannot be overr idden by statute or common law, 8 veil-pier ci n g fo r purposes of liability is distinct from veil-pierc ing for jurisdictional purposes. PHC-Minden, L.P. v. Kimberly-Clark Corp. , 235 S.W .3d 163, 176 (Tex. 2007). As a conseque nce, courts have rec og nized that fra ud, which is vital to pierc ing the corpor ate veil under section 21.223 of the Business Org anizations Code, has no place in assessing contac ts to deter mine juri s d iction. Id , Thus, to the extent CoTechno alterna tively relies on its claims that Atiq used Fiber ex as “a sham to perpe tuate a fra

ud” as a separ ate basis for imputing jurisdictional contac ts, we conclude that this relianc e is improper. 18Kimberly-Clark Corp. , 235 S.W .3d 163, 175-76 (Te x . 2007) (discussing whether pare nt c ompany

an d s u b sidiary should be trea ted as one for purposes of jurisdiction). These alleg ations h av e n o bear ing on the jurisdictional issue at hand—whe ther C-Fa brics and Fiber ex opera ted as the alter eg o of Atiq. I n fac t, CoTechno’s sole r eleva nt jurisdictional alleg ation is its claim that Atiq deposited funds belong ing to C-Fa

brics and Fiber ex in his pe rsonal acc ount. Howeve r, CoTechno prese nted

no evidenc e to support this alleg ation or any other finding that would sug g est that Atiq commingle d funds or otherwise faile d t o keep assets separ ate. Be cause CoTechno failed to prese nt sufficie nt 9
evidenc e in support of its claim of alter eg o, the trial court err ed to the extent i t imputed jurisdictional contacts to Atiq on this basis.

Ge neral Jurisdiction

Finally , based on the rec ord befor e us and on those contac ts th at are proper ly attributable to Atiq in his persona l capa city , we consider whether Atiq’s contac ts with Texas support the exercise of g ener al jurisdiction. As previously discussed, “g ener al jurisdiction involves a court’s ability to exercise jurisdi ction over a nonresident defenda nt based on any claim, i ncluding

c la im s u n r e la te d to th e d e f

e n d a n t’ s c o n ta c ts w it

h th e s ta te

. ” I d

. a t 1 6 8

. I t r e q

u ir e s a “ mo r e d e ma

n d in g minimum contac ts analy sis,” id

. (citing CSR, Ltd. v. Li nk , 925 S.W .2d 591, 595 (Tex. 1996)), and

Moreove r, to the extent CoTechno has s u ff i ci en tly proven that C-Fa brics was opera ted 9 as an a lter ego of Atiq, it is unclea r how this alleg ation, even if true, is re levant to Atiq’s per sonal jurisdiction since CoTechno has not sued or otherwise alleg ed wrong doing on the part of C-Fa brics. Other than enter ing into the Future Business Ag ree ment, there are no alleg ed contacts with Texas on the par t of C-Fa brics. 19exis t s o n l y wh en a nonresident’ s contac ts with the state are continuous and sy stematic, Moncrief

Oil Int’l , 414 S.W .3d at 150.

I n this case , the undisputed evidenc e establishes that Atiq is domiciled in Canada , not
Texas. See Goodyear , 131 S.Ct

. at 2853-54 (explaining that “par ad i gm fo rum for the exercise of
g ener al jurisdiction is the individual’s domicile”). Fur ther, considering only those contac ts that are attrib utable to Atiq in his persona l capa city , which we previously discussed, C oTec hno has failed
to establish that Atiq, in his persona l capa city , had any longsta nding or substantial activities in Texas

s u ch t h at At i q is “esse ntially at home in [Tex as].” Id

. at 2851. As a conseque nce, the trial cou rt

err ed to the extent it concluded that g ener al jurisdiction exi sted over A tiq.

CONCLUSION
Be cause the trial court lacke d persona l jurisdiction, we reve rse its o rder deny ing Atiq’s specia l appea

ranc e and r ender

judgme nt dismi ssing CoTec hno’s claims ag ainst him.

__________________________________________ Scott K. Field, Just ice
Be fore J ustices Pury ear , Goodwin, and F ield
Reverse d and Rende red Filed: Jul y

9, 2015

20

# Appendix 2

### CASE NO 01-14-00800-CV IN THE FIRST COURT OF APPEALS OF HOUSTON TEXAS

__________________________________________________________________ PROPPANT SOLUTIONS, LLC, Appellant
V. EMMA DELGADO, Appellee.

__________________________________________________________________ APPELLANT'S MOTION FOR EN BANC RECONSIDERATION

__________________________________________________________________ On Appeal From the 11 th 

### Judicial District Court of Harris County, Texas Cause No. 2014-17992

_________________________________________________________________ Syd Phillips (15955700) Attorney at Law 1155 Dairy Ashford, Suite 104 Houston, Texas 77079 Tel: (281) 752-0300 Fax: (281) 759-3214 & Bradley E. Featherston (24038892) The Mendel Law Firm, LP 1155 Dairy Ashford, Suite 104 Houston, Texas 77079 Tel: (281) 759-3213 Fax: (281) 759-3214 ATTORNEYS FOR APPELLANT

1 ACCEPTED 01-14-00800-cv FIRST COURT OF APPEALS

HOUSTON, TEXAS 7/28/2015 3:19:13 PM CHRISTOPHER PRINE

CLERK

### Appellant, Proppant Solutions, asks the C ourt to grant this motion to reconsider the case en banc. A. Introduction 1. Appellant is Proppant Solutions. Appellee is Emma Delgado. 2. A panel of the court issued the j udgment and opinion in this case on July 14, 2015. The majority opinion is attached as Exhibit “A.” The dissenting opinion is attached as Exhibit “B.” 3. The panel that rendered the judgment in this case consisted of Justices Keyes, Higley and Brown. B. Argument & Authorities 4. The Court has the authority to grant this motion and submit the case to the full court, sitting en banc. T EX


### . R. A PP


### . P. 41.2, 49.7. 5. The primary issue in the appeal was whether Defendant Emma Delgado, a Tennessee resident, is subject to personal jurisdiction in Texas. The panel resolved the issue by holding that her conduct toward s Texas was fortuitous with regard to establishing minimum contacts, with Justice Keyes dissenting. 6. The panel’s majority opinion greatly expands the Texas Supreme Court’s opinion in Michiana v. Holten , 168 S.W.3d 777 (Tex. 2005), regarding what is “fortuitous” as opposed to “purposeful” contact with Texas.

2

### a. Delgado’s conduct toward Texas was not fortuitous, it was purposeful. 7. The court ruled Delgado’s conduc t toward Texas was fortuitous, comparing it to Michiana v. Holten , 168 S.W. 3d 777 (Tex. 2005). With due respect to the Court, the majority decision misconstrues the holding in Michiana

. 8. In Michiana , an RV manufactured in Mich igan was sold to a Texas resident. The defendant never did business in Texas. The RV’s sale was unsolicited by the defendant and was deliver ed to the customer in Texa s at the customer’s request and expense. The Court found the defendant ’s contact with Texas was “fortuitous.” 9. The facts of this case are very different than Michiana . In 2010, Proppant Solutions, a California Corporation authorized to do business in Texas, obtained a contract to sell Chinese manufact ured oil field proppant to EOG, a large oil company, also doing busine ss in Texas. Joe Brown, Proppant’s President, was new to the proppant business and wanted to part ner with a more experienced company. He contacted ChristDel Corporation, a closel y held Tennessee Cor poration, of which Delgado was an owner, officer and director , after learning of its expertise in proppant and logistics, as advertised on its we bsite. Proppant Solutions and ChristDel negotiated over a period of months, eventually agreeing to jointly sell and deliver oil field proppant to EOG in Texas. 10. ChristDel and Proppant Solutions sold EOG millions of pounds of

3

### proppant, which they imported from China and delivered to EOG through the Port of Houston to its facility in Pleasanton, Texas. For its share of the proppant sales to EOG, ChristDel was paid approximately $6,600,000 in profits and an additional $59,000,000 for logistical costs. 11. Emma Delgado was personally invol ved in making representations to Proppant Solutions about it services, pers onally involved in the negotiation of the contract with Proppant Solutions, and was personally involved in the eighteen month performance of the EOG contract, in cluding working directly with EOG. 12. ChristDel’s role was to move milli ons of pounds of proppant each month from China to the Port of Houston a nd then transport it by truck to EOG in Pleasanton, Texas. From the inception of negotiations with Proppant Solutions, Delgado certainly knew that the ultimate cu stomer (EOG) was in Texas and that the focus of the project would primarily be in Texas. The Proppant Solutions/ChristDel’s contract even stipulated that Texas la w would apply to thei r relationship, with mandatory venue in Harris County, Texas. 13. Despite the substantial amount of business conducted by ChristDel in Texas over 18 months, the majority opinion found that this case was similar to that of Michiana . However, this case was not the me re selling of a single product unsolicited to a Texas resident. Delga do and the other officers of Ch ristDel negotiated for months

4

### to entice Proppant Solutions into a contract in which they partnered to do extensive business in Texas, earning millions of dollars over a period of 18 months. 1 

### Their desire to participate in this project was pur poseful. It was not fortuitous or by chance. 14. The court’s majority decision is c ontrary to the Texas Supreme Court’s ruling that, “Sellers who reach out beyond one state and create continuing relationships and obligations with citizen s of another state are subject to the jurisdiction of the latter in su its based on their activities.” Michiana , at 785, quoting Travelers Health , 339 U.S. at 647, 70 S.Ct. at 929. 15. Proppant Solutions alleged that Delgado personally participated in ChristDel’s fraudulent inducement of Proppant Solutions and in the breach of its fiduciary duty to Proppant Solutions. Given her personal involvement in the procurement of the Proppant Solutions cont ract and the business conducted in Texas, it would not be unreasonable for Delgado to anticipate she mi ght be “haled into court” in Texas for torts she committed during the project. b. This case meets the criteria for fair play and substantial justice. 16. Because of it ruling on minimum cont acts, the majority decision did not address the issue of fair play and substantia l justice. However, it is worth noting that

1 

### Proppant Solutions claims that ChristDel make a secret profit on the logistics of the projects in excess of that which was paid to it for the profit on the proppant. 5

### this case meets all of the cr iteria for fair play and s ubstantial justice held in Guardian Royal v. English China Clays , 815 S.W.2d 223, 231 (Tex. 1991): The following factors, when appropriate, should be considered: (1) the burden on the defendant; (2) the interests of the forum state in adjudicating the dispute (including th e state's special regulatory interest in areas such as insurance); (3) th e plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several states in furthering fundamental substantive social policies. 17. These issues were more than ade quately addressed in Justice Keyes’ Dissenting Opinion, pages 21through 24: A. The financial burden of Delgado is mini mal when compared to the profits earned by ChristDel, a closely corporation. B. Texas has a vested interest in ad judicating the matter. The proppant Solutions/ChristDel contract stipulated Texas law would apply with venue in Harris County. One of the two owners of Proppant Solutions lives in Texas. One of the three owners of ChristDel live in Texas. C. Marc Delgado, also a Tennessee resident and Director/Owner of ChristDel, has already filed an answer and submitted to jurisdiction in Texas. D. Texas provides the most efficient resoluti on of the controversy in that many of the witness live in Texa s. Without Emma Delgado as a party in Texas, Proppant Solution will have file suit against her in Tennessee. Thus, having the matter litigated in two separate states at the same time. C. Prayer For these reasons, Appellant Proppant Solutions asks the Court to grant this motion to reconsider the case en banc.
6

### Respectfully submitted, //s// Syd Phillips

_____________________________ Syd Phillips (15955700) Attorney at Law 1155 Dairy Ashford, Suite 104 Houston, Texas 77079 Tel: (281) 752-0300 Fax: (281) 759-3214 sydphill@aol.com & Bradley E. Featherston (24038892) The Mendel Law Firm, LP 1155 Dairy Ashford, Suite 104 Houston, Texas 77079 Tel: (281) 759-3213 Fax: (281) 759-3214 brad@mendellawfirm.com ATTORNEYS FOR APPELLANT

CERTIFICATE OF COMPLIANCE I hereby certify the number total number of words in this document is 1,476. //s// Syd Phillips

_________________________________ Syd Phillips

7

### CERTIFICATE OF SERVICE I hereby certify that on July 28, 2015, a tr ue and correct copy of the above and foregoing instrument was served on all counsel of record as follows: Thomas O. Deen (0713780) Attorney for Defendant Bland and Partners Anthony Marcus Delgado 1717 St. James Place, Suite 360 Houston, Texas 77056 Tel: 713-828-1580; Fax: 877-965-8687 Nelson Skyler (00784982) Attorney for Defendant Brown Sims Emma Delgado 1177 West Loop South, Tenth Floor Houston, Texas 77027 Tel: 713-629-1580; Fax: 713-629-5027 Heather Ozuna (24071582) Attorney for Defendant James Lanter, PC Juan Delgado 560 N. Walnut Creek, Suite 120 Mansfield, TX 76063 Tel: 817-453-4800; Fax: 817-453-4801 Philip R. Brinson (00787139) Attorney for Defendant LeClairRyan ChristDel Corporation 1233 West Loop South, Suite 1000 Houston, TX 77027 Tel: 713-752-8351; Fax: 713-650-0027 Howard Jackson Attorney for Defendant Wimberly Lawson Juan Delgado 550 Main Avenue, Suite 900 P.O. Box 2231 Knoxville, TN 37901-2231 //s// Syd Phillips

_________________ _______________ Syd Phillips
8

### Opinion issued July 14, 2015

In The 

## C o u r t o f A p p e a l s For The 

## F i r s t D i s t r i c t o f T e x a s

————————————



### NO. 01-14-00800-CV

——————————— PROPPANT SOLUTIONS, LLC, Appellant V. EMMA DELGADO, Appellee
On Appeal from the 11th District Court Harris County, Texas Trial Court Case No. 2014-17992

O P I N I O N This is a personal jurisdiction case. Proppant Solutions, a California limited liability company, partnered with ChristDel, a Tennessee corporation, to provide oilfield proppant to EOG, a Texas oil company. After Proppant Solutions and ChristDel completed the contract, Proppant Solutions filed this lawsuit claiming 

# Exhibit "A"2 

### that ChristDel breached the pa rtnership agreement, breach ed its fiduciary duty as a partner, and committed fraud. It also claimed that the three siblings who owned ChristDel, including Tennessee resi dent Emma Delgado, participated in ChristDel’s breach of fiduciary duty, made fraudulent misrepresentations, and conspired to accomplish the fraud. Emma filed a special appearance challenging the trial co urt’s exercise of personal jurisdiction over her because she is a Tennessee resident, has no contacts with Texas outside of her business, and is not alleged in the petition to have committed a tort in Texas. Proppant Solutions responded that Texas has specific jurisdiction over Emma because of her involvement in the creation and performance of the contract between Chri stDel and Proppant Solutions. The trial court granted Emma’s specia l appearance, and Proppant Solutions timely appealed. We affirm. Background This lawsuit arises from a contract between two businesses, Proppant Solutions and ChristDel. Proppant Solutions is a California limited liability company with its principal place of business in California. ChristDel is a Tennessee Corporation with its princi pal place of business in Tennessee. Joseph Brown formed Proppant Soluti ons when, according to his affidavit, he “began looking into the business of selling oilfield proppant.” Proppant3 

### Solutions obtained a contract to provide oilfield proppant 1 

### to EOG facilities in Pleasanton, Texas. It planned to buy the proppant from China but needed a way to ship it to the United States. According to its petition, Proppant Solutions ’ majority owner, Brown, discovered Chri stDel online. On its web site, ChristDel represented that it “had extensive experience as a logistics supplier of proppant.” Brown contacted ChristDel’s corporate officers, including Emma; they told Brown that ChristDel “had extensive experience . . . moving large shipments of proppant from China to t he U.S.A.” They also represented that ChristDel “had fixed logistics contracts in place” for most of the shipping expenses and that wi th some variable expenses the total cost was “just over 15 cents per pound of proppant.” Proppant Solutions offered

— and ChristDel agreed

— to fulfill the contract with EOG as a partnership, splitting the profits. As part of the partnership agreement, Proppant Solutions agreed to pay ChristDel the amount of the base costs, i.e., 15 cents per pound. According to the petition, these representations were false. Proppant Solutions alleged that it would not have offered to complete the EOG contract with ChristDel as a partnership but for these representations. Brown relied on ChristDel

1 

### According to the petition, “[p]roppant is a solid material, typically treated sand or man-made ceramic materials, designed to keep an induced hydraulic fracture open, duri ng or following a fracture treatment.”4 

### because he “had no prior experience in buying, se lling, or shipping proppant in the oilfield industry.” The petition alleged that ChristDel shipped millions of dollars of proppant from China to EOG in Texas over 18 months. ChristDel, acting through Emma, invoiced Proppant Solutions monthly. The invoices did not disclose ChristDel’s costs, allegedly to “hide ChristDel’s prior misrepresentations.” Over the course of the contract, Proppant Solutions paid ChristDel over $50 million in expenses and $6 million in shared partnership profits. After the contract was completed, ChristDel refused to provide an accounting of its costs. The petition identified four specific misrepresentations by Emma: (1) “Defendants had extensive experience in pr oviding the lo gistics to move large shipments of proppant from China to Houston,” (2) “Defendant s had fixed logistics contracts in place and . . .the only vari ables were trucking fuel surcharges and demurrage,” (3) “Defendants calc ulated their actual costs . . . [were] just over $0.15/pound of proppant,” and (4) “the parties w ould share the profits 60/40.” Proppant Solutions further alleged that Emma and the other individual defendants used ChristDel “for the purpose of perpetrating” a fraud. All defendants appeared except Emm a. Emma filed a special appearance stating that she is a Tennessee resident with no ties to Texas outside of her business, she is a director of ChristDel, she had no conversations with Proppant5 

### Solutions regarding the matters in the lawsuit in her personal capacity, and all of her communications with Proppant Solution s occurred while she was in Tennessee. During her one trip to Texas in connection with the contract, she met with EOG, not Proppant Solutions. In response to Emma’s special appearance, Proppant Solutions filed an affidavit signed by its majority owner, Br own. In addition to supporting many of the factual allegations in the petition, Brown stated that after he discovered ChristDel ’s website he called and talked with Juan, Marcus, and Emma Delgado, who misrepresente d ChristDel’s experience. Contrary to these representations, ChristDel “had little or no experience in the logistics of moving proppant from China to the U.S.A.” Therefore, ChristDel secretly hired a third party to perform many of its contractual obligations in return for a portion of its profits. Brown claimed that he communicated with Emma “numerous times by email and telephone calls, ” although he never claimed that the communications between he and Emma were transmitted to or from Texas. With respect to the claim that ChristDel hid its costs, Brown averred that, because of her financial positon with ChristDel, Emma “had to be personally aware of

. . . this fact.” Proppant Solutions filed a second affidavit by its co-owner, Michael Hall. Hall, who had primary responsibility for the compa ny’s financial matters, stated that he worked primarily out of his home in Texas and dealt directly with Emma6 

### regarding “finance and billing.” She communicated with Hall by email and telephone from her office in Tennessee. Emma sent him invoices for Christ Del’s expenses. One expense item was a visit to Texas by Emma to meet with EOG officials and tour their Pleasanton facility. Finally, Hall stated that Emma also sent him documentation regarding the movement of proppant into the Port of Houston and then to Pleasanton. Proppant Solutions filed a third affid avit signed by Ronald Cope, the principal shareholder of the Houston-based company that assisted ChristDel with shipping the proppant. Cope averred that he had estimated ChristDel’s shipping cost at only 10 cents per pound, but ChristDel marked up the cost to over 15 cents per pound to increase its profits. The trial court granted Emma’s special appearance without issuing any findings of fact or conclusions of law. Proppant Solutions timely appealed. Standard of Review “Whether a court has personal jurisdictio n over a nonresiden t defendant is a question of law, which we review de novo.” Zinc Nacional, S.A. v. Bouche Trucking, Inc. , 308 S.W.3d 395, 397 (Tex. 2010) (citing BMC Software Belg., N.V. v. Marchand , 83 S.W.3d 789, 794 (Tex. 2002)). When, as here, the trial court did not make findings of fact or conclusions of law, we infer all findings necessary to support the trial court’s ruling. Moki Mac River Expeditions v. Drugg , 221 S.W.3d7 

### 569, 574 (Tex. 2007); Stull v. LaPlant , 411 S.W.3d 129, 133 (Tex. App.

— Dallas 2013, no pet.). Jurisdictional Pleading Requirements In a special appearance, the part ies bear shifting burdens. “[T] he plaintiff bears the initial burden to plead sufficient allegations to bring the nonresident defendant within the reach of Texas ’ s long-arm statute .” Kelly v. Gen. Interior Constr., Inc. , 301 S.W.3d 653, 658 (Tex. 2010 ). A plaintiff may carry its initial pleading burden in its petition or response to the defendant ’ s special appearance. Stull , 411 S.W.3d at 134; Touradji v. Beach Capital P ’ ship, L.P. , 316 S.W.3d 15, 23 (Tex. App.

— Houston [1st Dist.] 2010, no pet.). If , however, “ the plaintiff fails to plead facts bringing the defendant within reach of the long-arm statute (i.e., for a tort claim, that the defendant committed tortious acts in Texas), the defendant need only prove that it does not live in Texas to negate jurisdiction.” Kelly , 301 S.W.3d at 658

– 59. “Once the plaintiff has pleaded sufficient jurisdictional allegations, the defendant filing a special appearance bears the burden to negate all bases of personal jurisdiction alleged by the plaintiff.” Id. at 658. “Because the plaintiff defines the scope and nature of the lawsuit, the defendant ’ s corresponding burden to negate jurisdiction is tied to the allegations in the plaintiff ’s pleading.” Id . The defendant can negate jurisdiction on either a factual or legal basis. Id . at 659. A8 

### defendant negates jurisdiction on a factual basis by presenting evidence showing an absence of contacts with Texas, thus disproving the plaintiff ’ s jurisdictional allegations. Stull , 411 S.W.3d at 134 (citing Kelly , 301 S.W.3d at 659). A defendant negates the legal basis for jurisdiction by showing that “ if the plaintiff ’ s alleged facts are true, the evidence is lega lly insufficient to es tablish jurisdiction; the defendant ’ s contacts . . . fall short of purposeful availment; . . . the claims do not arise from the contacts; or . . . traditional notions of fair play and substantial justice are offended by the exercise of jurisdiction.” Kelly , 301 S.W.3d at 659. If the nonresident defendant produces evidence negating personal jurisdiction, the burden returns to the plaintiff to show that the court has personal jurisdiction over the nonresident defendant. Stull , 411 S.W.3d at 134. A court should dismiss a lawsuit against a nonresident defendant if the exercise of personal jurisdiction lacks an adequate factual or legal basis. Id. Requirements for Person al Jurisdiction

“ Texas courts have personal jurisdiction over a nonresident defendant when (1) the Texas long-arm statute provides for it, and (2) the exercise of jurisdiction is consistent with federal an d state due process guarantees.” Spir Star AG v. Kimich , 310 S.W.3d 868, 872 (Tex. 2010). The Texas long-arm statute authorizes Texas courts to exercise personal jurisdiction over anyone “doing business” in Texas. T EX


### . C IV


### . P RAC


### . & R EM


### . C ODE9 

### A

NN 

### . § 17.042 (West 2015). “The broad language of the long -arm statute ’s ‘doing business’ requirement permits the statute to reach as far as the federal constitutional requirements of due process will allow.” Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C. , 815 S.W.2d 223, 226 (Tex. 1991). Consequently, the statute ’ s requirements are satisfied if exercising jurisdiction comports with federal due process limitations. Spir Star , 310 S.W.3d at 872. Due process is satisfied “when two cond itions 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. ’” Alenia Spazio, S.p.A. v. Reid , 130 S.W.3d 201, 210 (Tex. App.

— Houston [14th Dist.] 2003, pet. denied). Depending upon the nature of a nonresident’s contacts , personal jurisdiction may be general or specific. Moncrief Oil Int ’ l, Inc. v. OAO Gazprom , 414 S.W.3d 142, 150 (Tex. 2013). Specific Jurisdiction Proppant Solutions asserts that Delgado is subject to specific personal jurisdiction. “Sp ecific jurisdiction . . . arises when (1) the defendant purposefully avails itself of conducting activities in the forum state, and (2) the cause of action arises from or is related to those contacts or activities.” Retamco Operating Inc. v. Republic Drilling Co. , 278 S.W.3d 333, 338 (Tex. 2009); see also Moki Mac , 22110 

### S.W.3d at 576, 579 (specific jurisdiction requires satisfaction of “two co -equal components”). A. Purposeful availment The first prong of specific jurisdiction, purposeful availment, is the “touchstone of jurisdictional due process.” Michiana Easy Livin ’ Country, Inc. v. Holten , 168 S.W.3d 777, 784 (Tex. 2005). To determine whether a defendant has purposefully availed herself to the benefi ts of Texas law, we consider (1) the defendant ’ s own actions b ut not the unilateral activity of another party, (2) whether the defendant ’s actions were purposeful rath er than “random, isolated, or fortuitous,” and (3) whether the defenda nt sought “some benefit, advantage, or profit by ‘ availing ’ itself of the jurisdiction.” Id. at 785. “The purposeful ava ilment test should focus on ‘the defendant’s effo rts to avail itself of the forum’ and not ‘the form of action chosen by the plaintiff.’” Touradji , 316 S.W.3d at 24 (quoting Moki Mac , 221 S.W.3d at 576); see Michiana , 168 S.W.3d at 789

– 90 (quoting Burger King Corp. v. Rudzewicz , 471 U.S. 462, 474, 105 S. Ct. 2174, 2183 (1985)) ( for determining personal jurisdiction, “it is ‘t he defendant ’ s conduct and connection with the forum’ that are critical” ).
B. Relatedness The second prong, relatedness, analyzes the relationship between the defendant, the forum, and the litigation. IRA Res., Inc. v. Griego , 221 S.W.3d 592,11 

### 596 (Tex. 2007); Moki Mac , 221 S.W.3d at 576. Generally, courts analyze the relationship between jurisdictional co ntacts and each claim separately. Moncrief , 414 S.W.3d at 150 . However, “a court need not assess contacts on a claim-byclaim basis if all claims arise from the same forum contacts.” Id. at 150

– 51. Pleadings and Evidence Before the Trial Court Proppant Solutions asserts that Emma has sufficient minimum contacts with Texas because she: (1) “ participated in negotiating the relationship between ChristDel and Proppant Solutions as they prepared to do business in Texas,” (2)

“ personally participated in organizing th e delivery and receipt [of the oilfield proppant] from China through the Port of Houston, and onto Pleasanton, Texas ,” (3) “ sent and received e-mails to and from Texas billing for the logistic services and the expenses [of transporting the proppant],” and (4) “ traveled to Texas to
person ally review the logistics operation.” A. Emma’s role in forming the relationship between ChristDel and Proppant Solutions is not personal availment Emma’s role in the formation of the relationship between ChristDel and Proppant Solutions

— her response to Proppant Solutions ’ inquiry allegedly misrepresenting ChristDel ’s capabilities and experience

— was not a purposeful contact with Texas for three reasons. First, the choice of Texas as the delivery point was, for Emma, entirely fortuitous. Second, nonresident agents of12 

### nonresident businesses negotiated the contr act outside of Texas. Third, Proppant Solutions never alleged that Emma act ually participated in thos e negotiations. 1. Proppant Solutions ’ prior relationship with EOG is fortuitous The mere fact that Emma’s r esponse to Proppant Solutions ’ inquiry led to a business agreement to f ulfill Proppant Solutions ’ preexisting contract with EOG in Texas is not, by itself, enough to show purposeful availment. “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



## . . . . By contrast, a defendant will not be haled into a jurisdiction solely based on contacts that are ‘ r andom, isolated, or fortuitous.’” Michiana , 168 S.W.3d at 785.
In Michiana , a Texas plaintiff, Holten, contacted Michiana, a factory outlet for Coachmen RVs. Based on his conversations with the company, Holten purchased an RV. At Holten ’ s request and expense, Michiana shipped the RV to
Texas. Id. at 784. Holten subsequently sued Michiana in Texas for fraudulent misrepresentations made during Holten ’ s telephone conversation with Michiana, for breach of contract, and for statutory claims. Id. at 781, 788

– 92. The Court concluded that Michiana had no purposeful contacts with Texas. Michiana never solicited Holten’s business. It never marketed itself in Texas nor made any attempt to enter the Texas RV market. Michiana ’s contact with Texas arose solely because a Texas resident decide d to buy an RV from it. Had Holten13 

### not been a Texan, Michiana would have had no contact with Texas. Id. at 785

– 87. This contact with Texas was fortuitous because it arose from Holten’s actions, not Michiana’s

. See id at 786. “[T] he mere sale of a product to a Texas resident will not generally suffice to confer specific jurisdiction upon our courts. Instead, the facts alleged must indicate that the seller inte nded to serve the Texas market.” Moki Mac , 221 S.W.3d
at 577. In Moki Mac , Texas plaintiffs sued Moki Mac, a Utah river-rafting expedition company, in Texas for the wrongful death of their son during a rafting expedition in Arizona. The Court noted, “ Unlike in Michiana , the evidence . . . indicates that Moki Mac does intend to serve the Texas market. ” Id. Moki Mac regularly sold rafting trips to Texas residents. It sent targeted mailings to Texas residents, advertised in Texas newspapers and national publications with Texas subscribers, ran mass and target ed direct-marketing e-mail campaigns to solicit Texas clients, worked with Texas residents to solicit Texas business, and offered Texas residents various incent ives to sign up for an expedition. Id. at 577

– 78. “ Moki Mac ’ s contacts with Texas did not result, as did the defendant ’ s in Michiana, from the mere fortuity that the [plaintiffs] happened to reside here. Rather, the contacts it had with Texas resu lted from additional conduct through which it aimed to get extensive business in or from this state. ” Id. at 578.14 

### In a commercial dispute, th e unilateral activities of others will not support specific jurisdiction over a defendant. Parex Res., Inc. v. ERG Res., LLC , 427 S.W.3d 407, 422 (Tex. App.

— Houston [14th Dist.] 2014, pet. filed). In Parex , a Texas company, ERG, sought to buy shares of a Columbian oil and gas interest from Nabors, a Bermudan comp any with a Houston office. Id. at 412. During these negotiations, Nabors solicited other bidders from the Royal Bank of Canada, which in turn solicited a bid from Parex Canada, a Canadian company. Id. at 413. Parex began communicatin g with Nabor’s Houston office about the shares. Id. at 414. Shortly thereafter, ERG and Nabo rs entered into a contract to sell the shares; when that deal failed to close, Parex re-submitted its bid. Id. ERG sued Nabors and Parex for specific performance of its contract and for tortious interference of contract. But th e Fourteenth Court of Appeals found that Texas did not have special jurisdiction over Parex. “ Parex Canad a’s initial contact with Nabors . . . was solicited by Na bors and did not stem from Parex Canada ’ s unsolicited decision to reach i nto Texas. Accordingly, Parex Canada ’ s decision to engage in negotiations with a Texas company . . . was fortuitous and based on Nabors ’ s unilateral activities. ” Id. at 421. The court noted that even after Parex be gan actively competing with ERG, “ Parex Canada ’ s decision to reach into Texas via these contacts was certainly less purposeful than if Parex Canada was independently seeking out a Texas seller without initial prompting from Nabors. ”15 

### Id. at 422. “ Moreover, the fact that Texas-based ERG was now part of the equation was based on Nabors ’ s unilateral decision to contract with ERG, not any Parex Canada decision.” Id. Accordingly, Parex’s offer did “ not support substantial Texas availment. ” Id. This case is more like Michiana and Parex than Moki Mac . Here, there is no evidence that ChristDel or Emma have ever attempted to market themselves to Texas or serve the Texas market. Emm a, in particular, had no self-initiated contacts with Texas. Her only contacts with Texas were, much like in Michiana and Parex , because a customer with ties to Texas contacted her Tennessee employer. Importantly, Proppant Solutions actively recruited ChristDel and its personnel, not vice versa. Proppant Solutions agreed to provide oilfield proppant to EOG in Texas. Proppant Solutio ns then sought out ChristDel to help perform this task. Proppant Solutions offered to fulfill the contract 2 

### with ChristDel and split the profits. The dissent contends that, by relying on Michiana and Moki Mac , we “f ail to recognize the distinction between esta blishing personal jurisdiction over a defendant in a stream of commerce case and establishing persona l jurisdiction over a defendant in a fraud and fra udulent inducement case brou ght with respect to the negotiat ion and performance of a contract.” But Michiana was a fraud case.

2 

### The contract contains a Texas choice-of-law provision and a Houston forumselection clause

— but Emma was not a party to the contract.16 

### Michiana , 168 S.W.3d at 788, 791. Personal jurisdiction is established by contacts, not culpability. Id. As Parex indicates, the underlying reasoning of Michiana and Moki Mac

— that a defendant must purposefully reach out to Texas

— is not limited to the typical stream of commerce context . Moreover, “jurisdictional analysis always centers on the defendant’s actions and choices to en ter the forum state and conduct business. ” Kelly , 301 S.W.3d at 660. It was Proppant Solutions, not Emma, who chose for the product to be delivered in Texas. 2. Nonresidents negotiated the contract outside of Texas The contract was negotiated outside of Texas by nonresidents on behalf of two nonresident businesses. And Emma is not a party to the contract. Thus any connection to Texas from these negotiations or from the written contract alone would be “ even less purposeful and more attenuated .” See Peredo v. M. Holland Co. , 310 S.W.3d 468, 475 (Tex. App.

— Houston [14th Dist.] 2010, no pet.) (third party’s Texas contacts, which resulted from a contract between two nonresidents, did not satisfy minimum-contacts requirement). 3. Emma’s involvement in the formation of the contract was limited The alleged scope of Emma’s involvement in the formation of the business relationship is small, and the extent of Emma’s knowledge regarding Proppant Solutions ’ relationship to Texas when she spoke to Brown is unclear. The petition simply says: “Chr istDel’s owners, Juan, Marc, and Emma Delgado e ach later17 

### verified [statements on ChristDel’s website] that . . . ChristDel had extensive experience in providing logistics and moving large shipments of proppant.” According to Brown’s affidavit, this representation was made before Proppant Solutions proposed to fulfill the EOG co ntract as a partnership. There is no allegation and no evidence regarding whether Emma participated in negotiating the partnership agreement betwee n Proppant Solutions and ChristDel or whether she knew of Proppant Solutions ’ conne ction to EOG in Texas when she spoke to
Brown. Thus, Emma did not purposefully direct her activities toward Texas by responding to Brown’s inquiries regarding ChristDel’s experience shipping proppant. Rather, Proppant Solutions unila terally responded to representations by Emma and other ChristDel associates by seeking ChristDel’s assistance to fulfill Proppant Solutions ’ preexisting obligations to EOG. From Emma’s perspective, that Proppant Solutions had previously contracted with an EOG facility in Texas, instead of any other state, was merely fortuitous.
B. That Emma communicated with an off-site employee working from a home office in Houston, instead of Proppant Solutions ’ California headquarters, was merely fortuitous For similar reasons, Emma’s communicati ons with Michael Hall in Houston also do not constitute a purposeful contact with Texas.18 

### According to his affidavit, Hall “was responsible for handling the financial aspects of the part nership agreement between Proppa nt Solutions and ChristDel.” Emma “handled finance and billing for ChristDel.” “Each month . . . I received an invoice for the logistics of shipping the proppant from Emma. She also periodically sent me invoices for ChristDel’s expenses

. . . .” It was Emma’s responsibility to send these commu nications to her counterpart at Proppant Solutions

— Michael Hall. These were business communications between a two businesses registered and headquartered outside of Texas. The record does not contain any evidence that Emma actively sought to work with an off-site employee in Texas instead of Proppant Solutions ’ California headquarters or that she sought any benefit of Texas law thereby. The record indicates that Hall worked from a home office in Houst on. If Proppant Solutions had a functioning satellite office, the reco rd reveals nothing about it. It does not reveal whether any other Proppant Solutions employees work in Texas or anywhere else outside of California. And it does not explain why Hall, a senior officer and co-owner of Proppant Solut ions, worked at home in Houston. Thus, the record suggests no reason why these calls and e-mails were sent to Houston other than Hall’ s decision to receive them there. But Hall’s unilateral decision does not determine personal jurisdiction over Emma. See Michiana , 168 S.W.3d at 794 (RV d ealership not subject to special jurisdiction in Texas because19 

### its “only contact with Texas was Holten’s decision to place his order from there”)

. That Hall worked from his home office in Houston, not California, was merely fortuitous. See Parex , 427 S.W.3d at 427 ( “ Parex Canada ’ s telephone, email, and virtual data room contacts with Nabors coupled with a finding that Parex Canada intended the contacts to harm ERG in Texas is not enough to establish purposeful availment .”). C. The record does not establish Emma’s participation in organizing the proppant delivery Proppant Solutions also contends that specific jurisdiction is proper because
Emma “p ersonally participated in organizin g the delivery and receipt [of the oilfield proppant] from China through the Port of Houston, and onto Pleasanton, Texas.” The dissent agrees, contending that “[Emma] helped organize the receipt of the proppant in Houston, and she arranged for trucks to deliver it to Pleasanton. She . . . arrang[ed] the logistics of the tran sportation and [dealt] with financing and billing.” But Proppant Solutions’ petition alleged a much more limited role: “ChristDel, through its financial officer , Emma Delgado, sent eighteen monthly invoices to Michael Hall, Proppant Solutions ’ fin ancial officer in Houston, Texas.” Proppant Solutions’ response to the special appearance explained: “She was the administrator of ChristDel and handled its finances and invoiced Proppant Solutions monthly for expenses and logistics . . . . She was responsible for the20 

### billing to Proppant Solutions for all expenses and charges for logistics for the entire project . . . .” The only allegation to the trial court suggesting that Emma controlled or orchestrated proppant delivery comes from Proppant Solutions’ sur-reply, which alleged: “Emma was involved in setting up a logistics chain in Texas to import [proppant] for ultimate destination in Pleasanton, Texas.” That allegation cites an e-mail from Emma to Proppant Solutions , which states, “Juan, Marc and I have delivered a logistics chain that is competitive.” Assuming that we may consider an allegation raised for the first time in a sur-reply, this sheds almost no light on Emma’s role, if any, in coordinating th e movement of proppant. Absent more, this is not enough to establish purposeful availment.
D. Emma’s visit to Texas is not related to this litigation Proppant Solutions relies on Emma’s visit to EOG’s Pleasanton, Texas facility to support the exercise of specific jurisdiction. But Pr oppant So lutions did not allege that Emma ever met with, communicated with , or committed any tort against Proppant Solutions while visiting Texas. This contact cannot support special jurisdiction over Emma because no alleged liability arises from or is related to it. See Kelly , 301 S.W.3d at 659

– 60. In Kelly , an Arizona general contractor contr acted to renovate a Houston hotel. Id. at 655. The general contractor hired several Texas subcontractors to perform the21 

### work. Id. After the contract was performed, the hotel owner asserted that the work was substandard and sued the genera l contractor and the subcontractors. Id. at 655

– 56. One of the Texas subcontractors filed third-party claims for breach of contract, violation of the Texas Trust Fund Act, and fraud against the Arizona general contractor and its corporate officers. Id. at 656. The third-party plaintiff asserted that the officers of the general contractor, despite operating from the Arizona office, had the following Texas contacts: they received the subcontractors’ invoices from Texas, sent payments and change orders from Arizona to the subcontractors in Texas, and traveled to Texas several times during the renovation to oversee the subcontractors’ work. Id. The Texas Supreme Court held that these activities did not allow Texas to exercise specific jurisdiction over the officers; the subcontractor’s plead ing “contain[ed] no allegations that the [o]fficers’ wrongdoing occurred in Texas. . . . [I]t did not allege that any fraudulent acts occurred in Texas.” Id. at 659 –60. “Thus, alt hough [the subcontractor] has alleged two claims of wrongdoing, it has not alleged that any acts giving rise to these two claims occurred in Texas.” Id. at 660. Nevertheless, Proppant Solutions cites Carlile Bancshares, Inc. v. Armstrong , No. 02-14-00014-CV, 2014 WL 3891658, at *1 (Tex. App.

— Fort Worth Aug. 7, 2014, no pet.) (mem. op.), to assert that Emma’s one visit to Texas is enough to create specific jurisdiction. In Carlile , a Colorado corporation sought22 

### out a business relationship with a Texas corporation; two officers from the Colorado corporation allegedly made fraud ulent statements while meeting with the Texas corporation in Texas. Id. “ These allegations met [the plaintiffs’] initial pleading burden by alleging acts or omissions in Texas . . . and torts arising from such conduct. ” Id. at *12. This case is more similar to Kelly than Carlile . Here, Proppant Solutions never alleged any tort arising from Em ma’s visit to EOG in Texas. It has not alleged any interaction with Emma during h er trip. It has not asserted a claim based on any alleged misrepresentation made during or about the trip. Therefore, Emma’s visit to the EOG facility is not substantially related to Proppant Solutions ’ claims against her.
E. Proppant Solutions cannot rely on directed-at tort jurisdiction The allegation that all of Emma’s actions were part of a conspiracy intended to defraud Proppant Solutions in Texa s does not aid its case. Only Emma ’s contacts, not the contacts of her co-defend ants, affect our analysis . See Burger King , 471 U.S. at 474

– 75, 105 S. Ct. at 2183 (quoting Hanson v. Denckla , 357 U.S. 235, 253, 78 S. Ct. 1228, 1239

– 40 (1958)); see also Nat ’ l Indus. Sand Ass ’ n v. Gibson , 897 S.W.2d 769, 773 (Tex. 1995) (crit icizing conspiracy as independent basis for jurisdictio n). Further, the Texas Supreme Court has rejected directed-at tort jurisdiction. Michiana , 168 S.W.3d at 790; see also Curocom Energy LLC v.23 

### Young-Sub Shim , 416 S.W.3d 893, 897 (Tex. App.

— Houston [1st Dist.] 2013, no pet.) (“Directing a tort at the forum from a far does not constitute purposeful availment.”); Proskauer Rose LLP v. Pelican Trading, Inc. , No. 14

– 08

– 00283

– CV, 2009 WL 242993, at *4 (Tex. App.

— Houston [14th Dist.] Feb. 3, 2009, no pet.) (mem. op.) (rejecting “directed -at-tort contentions ” and holding trial court did not have specific personal jurisdiction over New York law firm whose attorney created opinion letter in New York and sent it to Texas). Rather, “jurisdiction
turns . . . on a defendant’s contacts, [not] where the defendant ‘directed a tort.’” Michiana , 168 S.W.3d at 790. Thus the issu e is not whether there was a tortious conspiracy directed at Texas, but rather whether Emma has sufficient minimum contacts with Texas to support the exercise of specific personal jurisdiction over her. For the reasons stated in this opinion, we conclude that she does not. Conclusion Under the applicable standards of review and based on Proppant Solutions’ allegations and evidence, we find no substantial connection between Emma’s purposeful contacts with Texas and the operative facts of this litigation. See Moki
Mac , 221 S.W.3d at 585

– 88 (finding no specific jurisdiction because substantial connection betw een defendant ’ s purposeful contacts with Texas and operative facts of litigation did not exist); BMC Software , 83 S.W.3d at 797 (concluding no specific jurisdiction existed for contact that occurred outside of Texas).24 

### Accordingly, we overrule Proppant Solutions ’ sole issue on appeal and affirm the trial court ’ s order granting Emma’s special appearance.

Harvey Brown Justice Panel consists of Justices Keyes, Higley, and Brown.

### Opinion issued July 14, 2015

In The 

## C o u r t o f A p p e a l s For The 

## F i r s t D i s t r i c t o f T e x a s

————————————



### NO. 01-14-00800-CV

——————————— PROPPANT SOLUTIONS, LLC, Appellant V. EMMA DELGADO, Appellee
On Appeal from the 11th District Court Harris County, Texas Trial Court Case No. 2014-17992

DISSENTING OPINION The majority affirms the dismissal of defendant Emma Delgado from this litigation for lack of personal jurisdiction. I respectfully dissent. In my view, the majority opinion misconstrues the relevant facts and law in dismissing from the litigation a defendant who plainly has minimum contacts with Texas; and in doing 

# Exh i b i t "B"2 

### so, it denies constitutional fair play and substantial justice to the other defendants in this case and to Proppant Solutions. Plaintiff Proppant Solutions, LLC, has alleged that Delgado, an owner, secretary, and Director fo r Administration /Finance of De fendant ChristDel Corporation, established minimum contac ts with Texas that submitted her to its long-arm jurisdiction by her participation in the fraudulent inducement and fraudulent performance of the underl ying agreement between ChristDel and Proppant Solutions. Under the agreement, ChristDel ag reed to provide logistics for the receipt in China of Chinese-manufactured ceramic proppant used in oil field fracking, its delivery to the Port of Houston, its storag e in Houston, its transportation across Texas, and its delivery to Proppant Solutio ns’ customer, EOG Resources, Inc., in Pleasanton, Texas. I agree with Proppant So lutions that Delgado is subject to personal jurisdiction in Texas

— to which all other parties have submitted, including ChristDel

— and I would so hold. Background Facts It is undisputed that Delgado, a resident of Tennessee, was an owner, the Secretary, and the Director of Administra tion/Finance of defendant ChristDel Corporation, a Tennessee corporation, at the time the parties entered into and performed the underlying “Service Contract” (the “ChristDel/Proppant Solutions3 

### Contract”) between ChristDel and Proppant Solutions, a California limited liability
company. Proppant Solutions’ allegations of fraudulent inducement and fraud against Delgado arise from h er participation in the negotiation and performance of the ChristDel/Proppant Solutions Contract. The ChristDel/Proppant Solutions Contract itself was the result of an agreement between Proppant Solutions and its custom er, EOG Resources, Inc., a Texas corporation, obligating Proppant Solutions to ship proppant from China to Pleasanton, Texas, for delivery to EOG (the “ Proppant Solutions/EOG Agreement ” ). Proppant Solutions entered in to the ChristDel/Proppant Solutions Contract to enable it to perform its obligations under the Proppant Solutions/EOG Agreement. Also pursuant to the Prop pant Solutions/EOG Agreement, Proppant Solutions entered in to a contract with a Chinese company, Pacific Ark, Inc. ( “ PacArk ” ), to purchase proppant manufactured in the People’s Republic of China to be delivered to Qingdau, China for export to Texas in thirteen monthly shipments (the “ Ceramic Proppant Contract ” ). The ChristDel/Proppant Solutions Contract contained a merger clause, which provided that “[t]his contract, including referenced ex hibits, represents all of the terms and conditions agreed upon by the parties and represents the entire
agree ment between the parties.” The referen ced exhibits included the Proppant Solutions/EOG Agreement (Exhibit A) an d the Ceramic Proppant Contract4 

### (Exhibit B). The “entire agreement” thus included al l three contracts. Proppant Solutions filed a copy of th e ChristDel/Proppant Solu tions Contract referencing its exhibits as an exhibit in this special appearance proceeding. Pursuant to the ChristDel/Proppant Solutions Contract, ChristDel agreed to accept delivery from PacArk of each monthly shipment of proppant in Qingdau, or another agreed-upon Chinese port of departure, for shipping to the Port of Houston and on to the end destination, Pleasanton, Te xas, for delivery to a warehouse to be designated by EOG and provided by Proppant Solutions to ChristDel in advance of each monthly shipment. Ch ristDel agreed to arrange tra nsportation of the proppant from the port of departure in China to Pleasanton on a schedule consistent with both the Proppant Solut ions/EOG Agreement and the Ceram ic Proppant Contract; to provide adequate vessel space to car ry the proppant; to provide a commercial invoice and packing list for each monthly shipment; to serve as the importer of record; to manage customs clearance and inspections; to rece ive each monthly shipment at the Port Terminal in Houston, Texas; and to cause the proppant to be transported suitably to Pleasanton. ChristDel also agreed to warehouse the proppant in its Houston facility until the proppant was delivered to Pleasanton in the event that EOG was unable or unwilling to accept the prop pant within thirty days of its arrival in Houston.5 

### ChristDel further committed to regularly exchange information with regard to shipping schedules, the status of the monthly shipments once they left China, and the anticipated delivery date in order “to comply with the requirements of the [Proppant Solutions/EOG] Agreement and [the Ceramic] Propp ant Contract and not incur any unnecessary delays or expense ” ; “ to issue a bill of lading for each monthly shipment and to fax or email it directly to EOG as required by the [Proppant Solution s/EOG] Agreement and copied to [Proppant Solutions]” ; to direct the transportation of each monthly shipment of proppant; to make all logistical decisions applicable to each monthly shipment “in order to meet the requirements of [the ChristDel/Proppan t Solutions] Contract, the [Proppant Solutions/EOG] Agreement, and the [Ceramic] Proppant Contract ” ; and to provide the necessary staff, employees, and contractors to fulfill the requirements of the ChristDel/Proppant Solutions Contract. Proppant Solutions, in return, agreed to pay ChristDel a fixed rate of $1.51 for each pound of proppant shipped under the contract (the “ base charge ” ); and ChristDel agreed to be responsible for paying all normal and customary charges associated with shipping, importing, and transporting the monthly shipments of proppant. Proppant Solutions also agreed to be responsible for certain other charges as specified in the Christ Del/Proppant Solutions Contract.6 

### According to the pleadings and ex hibits in this special appearance proceeding, many tons of proppant w ere received by ChristDel at the Port of Houston in monthly shipments delivered over a period of eighteen months pursuant to the ChristDel/Proppant Solutions Contract, at a total cost of $59 million. The proppant was stored by ChristDel in its warehouse in Houston as necessary to fulfill the Proppant Solutions/EOG Agreement . The proppant was moved through Texas under arrangements made by Delgado and others at ChristDel. And ChristDel arranged its delivery to EOG in Pleasanton, Texas. From ChristDel’s headqua rters in Tennessee, Delgado helped organize the receipt of the proppant in Houston and arranged for trucks to deliver it to Pleasanton. She personally visited Texas to review the operations with Proppant Solutions and EOG. She also exchanged numerous emails and telephone calls with Proppant Solutions’ 40%-owner and representative in Houston, Michael Hall

— who was also Proppant Solutions’ chief fina ncial officer, just as Delgado wa s ChristDel’s Director for Administration and Finance

— and others in Texas to arrange the logistics and finances for th e storage and transportation of the proppant. Delgado also sent the allegedl y fraudulent invoices to Hall in Texas, and these invoices are the primary basis for Proppant Solutions’ fraud claims. As support for its pleadings in this special appearance proceeding filed by Delgado, Proppant Solutions filed an affidavit by Hall, who had primary7 

### responsibility for the company’s financial matters . In his affidavit, Hall averred that he worked primarily out of his home in Texas and dealt directly with Delgado regarding “finance and billing” by email and telephone from her office in Tennessee to his home in Texas, where she also sent him invoices f or ChristDel’s expenses. One of these expense items invoiced Proppant Solutions for a visit to Texas made by Delgado to meet with EOG officials and tour their Pleasanton, Texas facility. Hall further stated that Delgado sent him documentation regarding the movement of proppant into the Po rt of Houston and on to Pleasanton. Proppant Solutions also filed an affidavit signed by Ronald Cope, the principal shareholder of the Houston-based company that assisted ChristDel with shipping the proppant. Cope aver red that he had estimated ChristDel’s shipping cost at only ten cents per pound, but ChristDel marked up the cost to over fifteen cents per pound to increase its profits. In sh ort, Cope provided a material part of the factual basis for concluding that the invoices sent by Delgado to Hall in Texas contained fraudulent misrepresentations of the shipping costs and that the performance of the contract was the execu tion of a scheme to defraud Proppant Solutions to the personal enrichment of ChristDel and its owners and officers, including Delgado. Delgado, however, contends, and the ma jority agrees, that under the law and the facts of this case, she lacks the minimum contacts with Texas necessary to8 

### subject her to personal jurisdiction in Texas under the Texas long-arm statute on the claims of fraudulent inducement a nd fraud brought against her by Proppant Solutions for her actions in negotiating and performing the ChristDel/Proppant Solutions Contract. I disag ree. I would hold that the Texas courts have jurisdiction over Delgado for purposes of this litigation, and I would therefore reverse the order of dismissal and remand the case for trial on the merits against all defendants, including Delgado. Law of Personal Jurisdiction A. The Scope of the Texas Long-Arm Statute and the Requirements of Federal and State Due Process

“ Texas courts have personal jurisdiction over a nonresident defendant when (1) the Texas long-arm statute provides for it, and (2) the exercise of jurisdiction is consistent with federal and state due process guarantees.” Spir Star AG v. Kimich , 310 S.W.3d 868, 8 72 (Tex. 2010). In relevant part, the Texas long-arm statute provides that a nonresident defendant submits himself to the jurisdiction of this state by doing business in this state if the nonresident , inter alia, “contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part in this state”

or “commits a tort in whole or in part in this state.” T EX


### . C IV


### . P RAC


### . & R EM


### . C ODE 

### A

NN


### . § 17.042 (Vernon 2015).9 

### In turn, federal due process requires two things. “ First, the nonresident defendant must have purpos efully established such minimum contacts with the forum state that the defendant could reasonably anticipa te being sued there. ” Glattly v. CMS Viron Corp. , 177 S.W.3d 438, 446 (Tex. App.

— Houston [1st Dist.] 2005, no pet.) (citing Burger King v. Rudzewicz , 471 U.S. 462, 475

– 76, 105 S. Ct. 2174, 2183

– 84 (1985)). “ Second, if the nonresident d efendant has purposefully established minimum contacts with the forum, the exercise of personal jurisdiction must also comport with traditional notions of fair play and substantial justice. ” Id. at 447 (citing Burger King , 471 U.S. at 475

– 76, 105 S. Ct. at 2183

– 84). 1. The first prong of due process: minimu m contacts The first prong of due process, the minimum contacts element, is divided into specific and general jurisdiction. Guardian Royal Exch. Assurance Ltd. v. English China Clays, P.L.C. , 815 S.W.2d 223, 230 (Tex. 1991). Proppant Solutions asserts that Delgado is subject to specific personal jurisdiction. “Specific jurisdiction . . . arises when (1) the defendant purposefully avails itself of conducting activities in the forum state, and (2) the cause of action arises from or is related to those contac ts or activities.” Retamco Operating Inc. v. Republic Drilling Co. , 278 S.W.3d 333, 338 (Tex. 2009); Moki Mac River Expeditions v. Drugg , 221 S.W.3d 569, 576, 579 (Tex. 20 07) (stating that specific jurisdiction requires satisfaction of “two co -equal compon ents” : privilege of10 

### conducting activities in Texas and substantial connection between contacts and operative facts of litigation); see Michiana Easy Livin’ Country, Inc. v. Holten , 168 S.W.3d 777, 784 (Tex. 2005) (stating that for jurisdictional due proces s, “it 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”) (quoting Hanson v. Denckla , 357 U.S. 235, 253, 78 S. Ct . 1228, 1240 (1958)). In establishing purposeful availment, only the defendant’s contacts with the forum state count; “the acts relied on must be ‘purposeful’ rather than fortuitous,” and the “defendant must seek some benefit, advantage, or profit by ‘availing’ itself of the jurisdiction.” Michiana , 168 S.W.3d at 785 . “Sellers who ‘reach out beyond one state and create continuing rela tionships and obliga tions with citizens of another state’ are subjec t to the jurisdiction of the latter in suits based on their activities.” Id . (quoting Travelers Health Ass’n v. Virginia , 339 U.S. 643, 647, 70 S. Ct. 927, 929 (1950)). To impose personal jurisdiction, it is not necessary that the defendant’s conduct actually have occurred in Te xas so long as her acts were purposefully directed towards the state. See Calder v. Jones , 465 U.S. 783, 789

– 90, 104 S. Ct. 1482, 1487 (1984); CSR Ltd. v. Link , 925 S.W.2d 591, 5 95 (Tex. 1996); SITQ E.U., Inc. v. REATA Rests., Inc . 111 S.W.3d 638, 646 (Tex. App.

— Fort Worth11 

### 2003, pet. denied). Indeed, “a defendant shoul d reasonably anticipate bein g hauled into court where the effects of [her] co nduct have been intentionally caused through that purposeful direction of activity toward the forum state, even if the defendant never physically enters t he state.” SITQ E.U. , 111 S.W.3d at 646. The courts consider the quality and nature of the defendant’s contacts, not their number or the ubiquity of their means. Am. Type Culture Collec tion, Inc. v. Coleman , 83 S.W.3d 801, 806 (Tex. 2002). “[T]he question . . . is not whether certain of [the defendant’s] contacts with Texas, standing alone, are sufficient to subject [her] to personal jurisdiction here. Instead, it is whether there is a substantial connection between all of [her] Texas contacts, considered collecti vely, and the operative facts of the litigation.” Dodd v. Savino , 426 S.W.3d 275, 286 (Tex. App.

— Houston [14th Dist.] 2014, no pet.). 2. The second prong of due process: fair play and substantial justice To satisfy the second prong of federal due process, the exercise of personal jurisdiction must comport with traditional notions of fair play and substantial justice. See Guardian Royal Exch. , 815 S.W.2d at 226. In making this determination, a court must consider five factors: (1) the burden on the defendants; (2) the interests of the forum state in adju dicating the dispute; (3) the plaintiff’s interest in obtaining convenient and effect ive relief; (4) the interstate judicial system’s interest in obtain ing the most efficient resolution of controversies; and12 

### (5) the shared interest of the several states in furthering fundamental, substantive social policies. See Asahi Metal Indus. Co. v. Superior Court of Cal. , 480 U.S. 102, 113

– 16, 107 S. Ct. 1026, 1033

– 34 (1987); Burger King , 471 U.S. at 477, 105 S. Ct. at 2185; Guardian Royal Exch. , 815 S.W.2d at 226. The defendant bears the burden of presenting a “compelling case” that exercising jurisdiction over her would not be fair and just. See Spir Star AG , 310 S.W.3d at 878 (quoting Guardian Royal Exch. , 815 S.W.2d at 231). Only rarely will the Texas courts’ exercise of personal jurisdiction not comport with fair play and substantial justice when the nonresident defendant has purposefully established minimum contacts with the forum state. Guardian Royal Exch. , 815 S.W.2d at 231. 3. Burden of proof of personal jurisdiction To establish personal jurisdiction, a plaintiff initially need only plead allegations sufficient to bring a nonresident defendant within the terms of the Texas long-arm statute. Kelly v. Gen. Inte rior Constr., Inc. , 301 S.W.3d 653, 658 (Tex. 2010). In a tort ca se, such as one alleging fraudulent inducement and fraud, the plaintiff must plead that the defendant committed a tortious act, in whole or in part, in Texas. Id. at 659. The plainti ff’s original pleadings, as well as its response to the defendant’s special appearance , can be considered in determining whether the plaintiff satisfied its burden. Wright v. Sage Eng’g, Inc ., 137 S.W.3d 238, 249 n.7 (Tex. App.

— Houston [1st Dist.] 2004, pet. denied).13 

### Because ultimate liability in tort is not a jurisdictional fact and the merits of the cause are not at issue, the jurisdictional inquiry focuses on whether plaintiff sufficiently established facts suggesting that the defendant should have anticipated being haled into a Texas court based on her actions. See Ennis v. Loiseau , 164 S.W.3d 698, 708

– 09 (Tex. App.

— Austin 2005, no pet.); Wright , 137 S.W.3d at 246, 251. “Hence, if the evidence suggests tha t the nonresident [defendant] officer participated in tortious or fraudulent activ ities, which were directed at Texas and for which [she] may be held personally liable, then there is a sufficient basis to assert specific juris diction over [her].” Ennis , 164 S.W.3d at 709 (citing Wright , 137 S.W.3d at 251). If the plaintiff pleads sufficient jurisdictional allegations, the nonresident defendant assumes the burden of negating all bases of jurisdiction in the allegations. Kelly , 301 S.W.3d at 658; Moki Mac , 221 S.W.3d at 574.
B. Delgado’ s Alleged Torts of Fraudulent Inducement and Fraud Proppant Solutions has sued Delgado personally for fraudulent inducement and fraud in the performance of the ChrisDel/Proppant Solutions Contract, which occurred in material part in Texas. It does not allege that the contract was negotiated or signed in Texas. However, Proppant Solutions alleges that Delgado personally made material misrepresentations about ChristDel’s experience and contacts procuring proppant in China to induce Proppant Solutions to sign the ChristDel/Proppant Solutions Contract. Proppant Solutions also alleges that14 

### Delgado personally oversaw part of the contract’s performance in Texas and that she directed telephone calls, emails, and fraudulently inflated invoices into Texas in furtherance of the performance of the fraudulently induced contract. Fraudulent inducement “ is a particular species of fraud that arises only in the context of a contract and requires the existence of a contract as part of its proof. ” Haase v. Glazner , 62 S.W.3d 795, 798 (Tex. 2001); Clark v. Power Mktg. Direct,
Inc. , 192 S.W.3d 796, 799 (Tex. App.

— Houston [1st Dist.] 2006, no pet.). Thus, with a fraudulent inducement claim, the elements of fraud must be established as they relate to an agreement between the parties. Haase, 62 S.W.3d at 798

– 99. The operative facts of a fraudu lent inducement claim are thus those that es tablish the elements of fraud with relation to th e agreement between the parties. The elements of fraud are: (1) that the speaker made a material misrepresentation (2) that he knew was false when he made it or that he made recklessly without any knowledge of its truth and as a positive assertion (3) with the intent that the other party act upon it and (4) that the oth er party acted in reliance on the misrepresentation and (5) suffered injury thereby. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am. , 341 S.W.3d 323, 337 (Tex. 2011). Fraud may also occur when (1) a party conceals or fails to disclose a material fact within the knowledge of that party; (2) the party knows the other party is ignorant of the fact and does not have an equal opportunity to discover the truth; (3) the15 

### party intends to induce the other party to ta ke some action by co ncealing or failing to disclose the fact; and (4) the other pa rty suffers injury as a result of acting without knowledge of the undisclosed fact. Bradford v. Vento , 48 S.W.3d 749, 754

– 55 (Tex. 2001); JSC Neftegas-Impex v. Citibank, N.A. , 365 S.W.3d 387, 408 (Tex. App.

— Houston [1st Dist.] 2011, pet. denied). A representation is material if “a reasonable person would attach importan ce to [it] and would be induced to act on the information in determining his choice of actions in the transaction in question.” Italian Cowboy , 341 S.W.3d at 337. Silence also may be equivalent to a false representation when the particular circumstances impose a duty on the party to speak and the party nevertheless deliberately remains silent. Bradford , 48 S.W.3d at 755; SmithKline Beecham Corp. v. Doe , 903 S.W.2d 347, 353 (Tex. 1995 ). Whether a duty to disclose exists is a question of law. Bradford , 48 S.W.3d at 755. Texas law provides that a corporate employee is personally liable for her own fraudulent or tortious acts which she directs or participates in during her employment. See Miller v. Keyser , 90 S.W.3d 712, 717 (Tex. 2002); Leyendecker & Assocs., Inc., v. Wechter , 683 S.W.2d 369, 375 (Tex. 1984); Walker v. Anderson , 232 S.W.3d 899, 918 (Tex. App.

— Dallas 2007, no pet.).16 

### Analysis of Delg ado’s Texas Contacts Based on Pleadings of Fraudulent Inducement and Fraudulent Performance of Contract I would hold that Proppant Solutions has established that Delgado had minimum contacts with Texas in that she purposefully availed herself of the forum for the purpose of conducting activities within it and that Proppant Solutions’ allegations of fraud and frau dulent inducement ag ainst her arose out of her contacts with Texas. Therefore, Delgad o is subject to personal jurisdiction in Texas for doing busin ess in Texas within the scope of Texas’s long -arm statute by committing a tort in whole or in part in Texas. See T EX 

### C IV


### . P RAC


### . & R EM


### . C ODE 

### A

NN


### . § 17.042. I would also hold that the Texas courts’ exercise of jurisdiction over Delgado in the underlyi ng proceedings comports with fair play and substantial justice. A. D elgado’s M inimum Contacts with Texas To establish Delgado’s minimum contacts with Texas, Proppant Solutions was required to show that she purposefully availed herself of the forum by conducting activities in Texas and that there was a substantial connection between her contacts with Texas and the operative facts of the underlying litigation. See Moki Mac , 221 S.W.3d at 576, 579 (specific ju risdiction requires satisfaction of “two co -equal compone nts” : privilege of conducting activities in Texas and substantial connection between contacts and operative facts of litigation). In the context of its alle gations of fraudulent inducemen t and fraud, that means that17 

### Proppant Solutions had to adduce pleadings and evidence suggesting that Delgado participated in tortious or fra udulent activities that w ere directed at Texas and for which she may be held personally liable. See Ennis , 164 S.W.3d at 709; Wright , 137 S.W.3d at 251. I woul d hold that Proppant Solutio ns fully carried its burden. The undisputed facts in the record show that Delgado, as a director and the financial officer of ChristDel, participated in negotiat ing the ChristDel/Proppant Solutions Contract, which was to be perfor med in material part in Texas, where the oil field proppant was to be received, stored, transported, and delivered to EOG by ChristDel. Proppant Solutions has alle ged that, during the course of these negotiations, Delgado, along with the other owners and principals of ChristDel, made material misrepresentation s about ChristDel’s ex perience and contacts in China, which they all knew were false when made, with the intent that Proppant Solutions act upon them and enter into the contract with ChristDel. Proppant Solutions has further alleged that it acted in reliance on the misrepresentations and that it suffered millions of dollars in inj uries due to the misrepresentations of Delgado and others. The jurisdictional evidence also suggests that Delgado was personally involved in performing the contract, including traveling to Texas to meet with EOG representatives; directing multiple emails and phone calls to Texas for the purpose of arranging transport and financing for rece iving, storing, and18 

### delivering the proppant in Texas; and sendi ng allegedly fraudule nt invoices to Hall at his home office in Texas. I would hold that Proppant Solutions alleged facts sufficient to establish that Delgado, whether by making affirmative misrepresentations or by remaining silent when she had a duty to speak, participated in the fraudulent inducement of a contract to be performed in material part in Texas and directed fraudulent invoices to Texas. It alleged that each corporat e defendant, includin g Delgado, concealed or failed to disclose material facts within their knowledge about the experience and contacts of ChristDel with proppant suppliers in China and the cost of the proppant, knowing that Proppant Solutions was ignorant of these facts and did not have an equal opportunity to discover the truth, and intending to induce Proppant Solutions to sign the contract by concealing or failing to disclose these facts, to the injury of Proppant Solutions. See Bradford , 48 S.W.3d at 754

– 55; JSC NeftegasImpex , 365 S.W.3d at 408. In my view, th ese particular circumstances imposed a duty on all of the ChristDel parties to di sclose facts and, th erefore, the silence of any ChristDel party, including Delgado, during these negotiations in which material misrepresentatio ns within their knowledge were made was equivalent to making the false representations. See Bradford , 48 S.W.3d at 755; SmithKline Beecham Corp. , 903 S.W.2d at 353.19 

### There is no question that the act of ne gotiating a contract to be performed in large part in Texas was a purposeful act by which all of the participants, including Delgado, a principal of ChristDel, sought profits on the contract, which could be obtained only by ChristDel and its principals ’ creating ongoing lo gistics operations with Proppant Solutions and EOG in Texas. See Michiana , 168 S.W.3d at 786 (stating that i n establishing purposeful availmen t, only defendant’s contacts with forum state count; “the acts relied on must be ‘purposeful’ rather than fortuitous”; and “defendant must seek some benefit, advantage, or profit by ‘availing’ [ herself] of the jurisdiction” ). As stated by the United States Supreme Court in Travelers Health and the Texas Supreme Court in Michiana , “Sellers who ‘reach out beyond one state and create continuing re lationships and obligations with citizens of another state’ are subject to the jurisdiction of the latter in suits based on their activities.” Id

. (quoting Travelers Health , 339 U.S. at 647, 70 S. Ct. at 929). It was not necessary that Delgado’s participation in the contract ne gotiations actually have occurred in Texas so long as the negoti ations were purposefully direct ed to inducing a contract to be performed in large part in Texas. See SITQ E.U. , 111 S.W.3d at 646 ( “[A] defendant should reasonably anticipate bein g haled into court where the effects of [her] conduct have been intentionally caused through that purposeful direction of20 

### activity toward the forum state, even if th e defendant never physically enters the state.” ). In addition, the record plainly show s that, once the ChristDel/Proppant Solutions Contract was made, Delgado was a principal figure in its performance in Texas. In accordance with the terms of the ChristDel/Proppant Solutions Contract, and in exchange for sums agreed on in th at contract, ChristDel arranged for the receipt of many tons of ceramic proppant in China and for its tr ansportation to the Port of Houston in monthly shipments deliv ered over a period of eighteen months. ChristDel stored the proppan t in its warehouse in Housto n as necessary to meet the purposes of the Proppant Solutions/EOG Ag reement. ChristDel arranged for the transportation of the proppant through Texas under arrangements made by Proppant Solutions and itself with EOG, and it delivered the proppant to EOG at its ultimate destination in Pleasanton, Texas. Delgado helped organize the receipt of the proppant in Houston, and she arranged for trucks to deliver it to Pleasa nton. She exchange d numerous emails and telephone calls with Hall, Proppant Solutions’ co-owner and representative in Houston, arranging the logistics of the transportatio n and dealing with financing and billing. She personally visited Texa s to review the operations with Proppant Solutions and EOG, and she sent the allegedly fraudulent invoices to Hall in Houston for payment.21 

### I can only conclude, on the basis of these facts, that Delgado ’s contacts with Texas in connection with the negotiation and performance of the ChristDel/Proppant Solutions Contract are substantially connected to the operative facts of the litigation and show that she cl early purposefully availed herself of the privilege and benefits of conducting busin ess in Texas under a contract from which she personally profited. There is a substantial connection between Delgado’s Texas contacts, considered collectively, and the operative facts of the litigation. See Dodd , 426 S.W.3d at 286; SITQ E.U. , 111 S.W.3d at 646. Proppant Solutions presented facts suggesting that Delgado directed fraudulent activities

— for which she can be held personally liable

— at Texas, such that she should have anticipated being haled into court here based on her actions. See Ennis , 164 S.W.3d at 708

– 09; Wright , 137 S.W.3d at 248, 251; see also Wechter , 683 S.W.2d at 375 (holding that corporate employee or officer is personally liable for her own fraudulent or tortious acts that she directs or participates in during her employment). I would hold that Proppant Solutions has borne its burden of establishing the minimum contacts prong of the Texas courts’ personal jurisdiction over Delgado with respect to the activities made the subject of this litigation.
B. Fair Play and Substantial Justice There is also no question, to my mind , that subjecting Delgado to personal jurisdiction in this case comports with fair play and substantial justice, whereas22 

### allowing her

— alone among the principals of ChristDel

— to escape trial and potential liability for her own alleged acts of fraud or fraudulent inducement shown to have a substantial connection with the operative facts of this case, as the majority opinion does, denies fair play an d substantial justice not only to Proppant Solutions but to all the other parties. See Guardian Royal Exch ., 815 S.W.2d at 231 (listing five factors in establishing fair play and substantial justice: (1) burden on defendants; (2) interests of foru m state in adjudicating dispute; (3) plaintiff’s interest in obtain ing convenient and effective relief; (4 ) interstate judic ial system’s interest in obtaining most eff icient resolution of controversies; and (5) shared interest of states in furthering fundam ental, substantive social policies). First, the financial burden on Delgado of litigating this dispute in Texas

— where litigation is already underway and all other defendants have submitted to jurisdiction and appeared and answered, where the contract was principally performed, and where over $59 million in business was done, including $6.5 million in profits generated from Proppant Solutions

— is not excessive compared to the total burden on the parties imposed by the costs of the litigation. By contrast, allowing Delgado alone to avoid trial and potential liability increases the burden on all the other parties. It means either that the case must be tried elsewhere, where all defendants are subj ect to personal jurisdiction, or that Delgado alone must be allowed to escape trial and potential liability for any torts23 

### she may have committed or participated in committing during the inducement and performance of the ChristDel/Proppant Solutions Contract, or that Proppant Solutions must bring suit against Delgado alone in Tennessee, thus creating piecemeal litigation and increasing the burden of costs and potential liability on all other defendants. Second, Texas has a vested interest in adjudicating this dispute. The ChristDel/Proppant Solutions Contract expres sly provides that the contract shall be “construed and interpreted in accordan ce with laws of the State of Texas , ” and any action “brought hereunder” is subject t o venue in Harris County, Texas. Houston is the venue in which Proppant Solutions is afforded the most convenient and effective relief. It has an office here and Hall, a Texas resident, is a 40% owner of it. Likewise, Juan Delgado, one of the other defendants, is a Texas resident. Third, ChristDel, of which Emma Delgado is a corporate director and owner, has already filed an answer in this acti on, as has Marc Delgad o, another defendant and ChristDel co-owner a nd director, who is also a Tennessee resident. Fourth, under these circumstances, the most efficient resolution of the controversy demands that Emma Delgado be subjected to personal jurisdiction in Texas, to which her co-defendants have voluntarily submitted. Finally, resolution of the entire controversy in this Texas litigation comports with the shared interest of both Tennessee and Texas in furthering fundamental,24 

### substantive social policies, and no one has presented any argument or evidence to show that it does not. For all the foregoing reasons, I would hold that Emma Delgado is subject to specific personal jurisdiction in this litigation arising out of her alleged commission of the torts of fraudulent inducement and fraud in the performance of the ChristDel/Proppant Solutions Cont ract and that subjecting her to the jurisdiction of the Texas courts fully satis fies the constitutional requirements of fair play and substantial justice. I would, th erefore, deny her special appearance and remand this case for trial on the merits. Response to t he Majority’s Jurisdictional Analysis In my view, both t he majority’s reasoning and its holding that Delgado is not subject to personal jurisdiction in Texas on the facts of this case are deeply flawed. First, the majority fails to recognize the distinction between establishing personal jurisdiction over a defend ant in a stream of commerce case and establishing personal jurisdiction over a defendant in a fraud and fraudulent inducement case brought with respect to the negotiation and performance of a contract between and among sophisticated businesses in furtherance of interrelated agreements among them. Consequen tly, it incorrectly relies on Michiana , a general “stream of commerce” case , and Moki Mac as controlling authority. Neither is25 

### relevant to the determination of the Texas courts’ jurisdiction over Delgado in this litigation. Second, the majority maintains that “Emma’s participation in contract negotiations was not a purposeful contact with Texas. ” This claim is unsustainable under the facts of this case for the reasons set forth above. Regarding the majority’s rel iance on stream of commerce cases, the majority claims that “ a defendant will not be haled into a jurisdiction solely based on contacts that are ‘ r andom, isolated, or fortuitous.’” Slip Op. at 12 (citing Michiana , 168 S.W.3d at 785). The ma jority recites the facts in Michiana

— a phone call placed by the Texas plaintiff to Michiana, a factory outlet for Coachmen RVs that had placed its RVs in th e stream of commerce resulting in the plaintiff’s purchase of an RV, and Michiana ’s shipment of the RV to Texas, which the Texas Supreme Court held insufficient to establish personal jurisdiction over Michiana. The majority then takes these entirely disparate facts as the authority for its own finding, on the facts of this wholly dissimilar case, that Delgado had no purposeful contacts with Texas. Slip Op. at 12

– 13 (citing Michiana , 168 S.W.3d at 781, 784, 788

– 92). There is simply no relationship between the ope rative jurisdictional facts in Michiana and the operative jurisdictiona l facts in this case. Despite the majority’s recitations, ne ither the ChristDel/Proppant Solutions Contract nor the Proppant Solutions/EOG Agreement that it incorporated reflected26 

### the “ mere sale of a product to a Texas resident. ” See Slip Op. at 13 (citing Moki
Mac , 221 S.W.3d at 577) . Proppant Solutions’ claims against Delgado are not mere contract claims based on a product ChristDel launched into the stream of commerce and Proppant Solut ions happened to purchas e in Texas, as in Michiana

. Proppant Solutions’ claims against Delgado are are tort claims based on De lgado’s own tortious participation in negotiating and performing a set of interrelated contracts among sophisticated business entities. Proppant Solutions has argued

— and produced jurisdictional evidence

— that Delgado participated in the torts of fraudulent inducement and fraud in the perfor mance of a contract she and the other principals of ChristDel negotiated with Proppant Solutions and performed in principal part in Texas. According to the record, Delgado’s substantial personal involvement and conduct in both the inducement and the performance of the ChristDel/Proppant Solutions Contract were directed specifically at Texas. She allegedly made fraudulent misrepresentations with the intent of inducing Proppa nt Solutions into the contract, which was to be performed in large part in Texas, and she visited this state in furtherance of the performance of that contract. She made multiple phone calls and sent multiple emails to this state to perform ChristDel’s contractual obligations. She arranged to receive the pr oppant at the Port of Houston, to store it in Houston, to transport it across the state of Texas, and to deliver it to EOG, a27 

### Texas business. Finally, she sent allegedly fraudulen tly inflated in voices for ChristDel’s performance of its contractual duties to Hall in Texas. T he majority’s reliance on stream of commerce cases like Michiana and Moki Mac can thus only be construed as entirely misplaced in light of these facts. The majority’s reliance on the wrong law also leads it to misconstrue the significance of Delgado’s allegedly tortious actions in and directed to Texas to the proof of Proppant Solutions’ claims . The majority concludes that ChristDel and its principals did not intend to direct their acti vities toward Texas. But this conclusion is completely at odds with the facts in the case. This is not a case in which Proppant Solutions complains that ChristDel placed advertisements in the stream of commerce directed to the general publi c and Proppant Solut ions answered the ad and bought Chri stDel’s product . Yet the majority focuses entirely on ChristDel’s marketing of its services to the public to the exclusion of any reference to the acts

— either of contract negotiation or of contract performance

— that Proppant Solutions alleges were committed by Delgado, were tortious, and were directed at Texas. Thus it concludes, incorrectly, tha t the reasoning of steam-ofcommerce cases, such as Michiana and Moki Mac , is applicable to the determination of the Texas courts’ jurisdiction over Delgado in this case. Slip Op. at 15

– 16

. Consequently, it omits as irrelevant to its determination virtually all of the acts Proppant Solutions alleges Delgado committed in connection with the28 

### alleged fraud that were specifically directed to Texas. And, in so doing, it disregards Delgado’s participation in the operative fa cts of the litigation. Or it mentions these facts only to state that they do not show what they do show when construed in terms of what Proppant Solutions was required to prove to establish personal jurisdiction over Delgado under the facts of this case. Dismissing Delgado ’s acts from consideration on the ground that she never attempted to market herself to Texas and had “ no self-initiated contacts with Texas, ” the majority ignores Delgado’s exchange of emails and phone calls to Texas to discuss financial and logistical matters, her arrangement of transportation, her review of the Texas facilities, her mailing of allegedly fraudulent invoices to Hall in Texas, and her receipt of millions of dollars in payments from Proppant Solutions. It then opines that Delgado’s “ only contacts with Texas were, much like in Michiana . . . , because a customer with ties to Texas contacted her Tennessee employer, ” and “ Proppant Solutions actively recruit ed ChristDel and its personnel, not vice versa. ” Slip Op. at 15. The majority also makes the factually incorrect claim that Delgado ’s coordination of the movement of proppant from the port of Houston to Pleasanton is insufficient “to establish purposeful availment” of the forum, Texas. Slip Op. at 19

– 20. And it makes the factually and legally incorrect claim that Delgado’s visit to EOG’s Pleasanton facility is not substantially related Proppant Solutions ’s29 

### claims against Delgado and “ cannot support special jurisdiction over Emma because no alleged liability arises from or is related to it. ” Slip Op. at 20. The majority cites Kelly for support of its opinion. However, Kelly is a factually inapplicable personal jurisdiction case in which a Texas subcontractor on a hotel renovation project file d claims for third-party b reach of contrac t, violations of the Texas Trust Fund Act, and fraud against the Arizona general contractor that had hired it. Id. The supreme court held that personal jurisdiction was lacking because, although the subcontractor had alleged two claims of wrongdoing, it had not alleged that any acts giving rise to those two claims occurred in Texas. Id. Here, by contrast, Proppant Solu tions has alleged, in suppo rt of its allegations of fraudulent inducement and fr aud, that Delgado directed numerous allegedly tortious activities to Texas, including making fraudulent misrepresentations to induce Proppant Solutions to enter a contract that was to be performed in large part in Texas and performing the obligations of that contract, including sending the allegedly fraudulent invoices to Texas.30 

### Conclusion Because I believe the majority opinion fails to recognize the operative facts and controlling law of this personal jurisdiction case and misconstrues or misapplies the law governing personal jurisdiction, including constitutional standards of fair play and substantial justice, I must dissent. I would reverse the judgment of the trial court finding that the Texas courts lack jurisdiction over Delgado in this litigation, and I would remand the case for trial against all defendants on the merits.

Evelyn V. Keyes Justice Panel consists of Justices Keyes, Higley, and Brown. Keyes, J., dissenting.