### 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

ON REHEARING

NO. 03-13-00762- CV

F akhrealam 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

We withdraw the opinion and judgme nt dated J uly 9, 2015, and substitut e the following opinion and judgme nt in their place

.

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

a contra ct disput e, C o T ec hno filed a third-par ty petition ag ainst one of Fiber ex’s office rs, Fakhrea lam Atiq, a Canadian resident. Atiq then filed a specia l appea ranc e, which the trial court denied. I n this inte rl o cutory appea l, Atiq contends that the t rial court err ed in deny ing his 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 i v. 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 insu ff i ci en t t o supportp 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 C an ad i an citizen residing in Edmonton, Alberta , is chair man and CEO of Fiber ex, a Canadian corpor ation. Acc ording to A tiq, F ibere x “primar ily offe rs g oods and service s rela ted to the manufa cture and marke ting of g lass fiber reinfor ceme nts for composites.” Hi s to r ic a lly , Fiber ex supplied its product to CoTechno, a manufa cture r of g lass fi b er wo v en products with fac iliti es loca ted in San Marc os, Texas.

I n Aug ust 2 0 0 9 , a d i spute arose over a cer tain shipment of materia ls to CoTechno
f r o m F ib e r e x. I

n s h o r t, Co T e c h n o c la im e d th a

t F ib e r e x h a d p r o v id e d d e f e c ti v e ma te r ia ls , a n d F ib e r e x claimed that CoTechno owed $360,000 for its purcha se of the materia ls. Ultimately , in an eff ort to settle their dispute, the companies enter ed into a Future Business Ag ree ment. I n part, the Ag ree ment provided that (1) a new entity , C-Fa brics, would initially serve as a wholl y o wn ed subsidiary of Fiber ex; (2) CoTechno would channe l 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 , the companies ag ree d that once the debt was satisfied, owner ship of C-F abric s would be transf err ed to CoTechno f

or $1. The c ompanies oper ated unde r the Ag ree ment for se vera l y ear s, and the neg otiated debt amount was ev en t u ally paid off. On Aug ust 16, 2011, Fiber ex sent written notice of its

2intention to terminate the Future Business Ag ree ment. Fiber ex then filed suit in Hay s C ounty , 1
T e xa s , c la iming owner ship of cer tain proper

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

u ip me n t— lo c a

te d
at C oTec hno’s warehouse and obt ained a temporar y restra ining or der 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 contra ctual obliga tions under the Future Business Ag ree ment. Spe ci fi ca lly , CoTechno claimed that Atiq and Fiber ex conver ted fiberg lass materia l that was the proper

ty of CoTech n o an d C -F abric s by obtaining a temporar y restra ining order permitting the removal of t h e m at er i al

. C oTec hno also claimed that Atiq was a party to the Future Business Ag ree ment in his persona l capa cit y an d t h at h e 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 spec ial appea ranc e under

Rule 120a of the T exas Rules of Civil Procedur e, asser

ting that the court lacke d persona l jurisdiction over him. See Tex. R. Civ. P.

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.

3120a. Atiq attache d an affidavi t to his specia l appea ranc e that he later 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 ev er b ee n a re s ident of t he S tate of Texas. I own no proper t y i n T ex as , do not have 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 Texas in m y i n d i v i dual capa city and am not a party to any ag ree ment perf ormable w ithin the St ate.

. . . [3.] I n my

capa city as C hairman and CEO of F ibere x , I trave led to San Marc os, Texas, once in 2009 as part of a routine cust o m er v isit to meet with the prin ci pals of CoTechno. Aside from this single trip to Hay s County , my only other trave ls to Texas have been to Houston approximately three times in the last t wo y ea rs , in my capa city as an office r of a differ ent Canadian Corporation, to visit customers of that d i ff erent 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 F u tu r e Business Ag ree ment (“F BA ”) with CoTechno. The majority of 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 separate 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 incorpora

ted 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 rw ar d s forwa

rded the executed Articles of I ncorpor ation 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

4addre 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.

BACK GR OUND LAW
Texas courts may asser

t jurisdiction o v er a n o n resident defe ndant if (1) the Texas lon g -ar m 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. The exe rc i se of jurisdiction over a nonresident comports with fede ral due proce ss 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 Gaz p r o m , 414 S.W .3d 142, 150 (Tex. 2013); see International Shoe Co. v. W ashington , 326 U.S. 310, 316 (1945). “A defe ndant establishes minimum contac ts with a st at e when [he] ‘purpose fully

avails [hi mself] of the privileg e of c onducting activities within the forum state, thus

5invoking the benef its and protections of i ts laws.’” Retamc o Operating, In c. 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” en co m passes three considerations. 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 Easy 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 some benef it, ad v an t age, or profit by availing himself of the jurisdiction of
Texas. Id

. The defe ndant’s ac tiviti es, whe ther they consist of direc t acts within Texas or conduct outside of Texas, “mus t j u s tify 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 nonreside n t defe ndant’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 th e fo rum may exercise jurisdiction over the d efe ndant even if the 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 is fairly reg arde d as at home.” Goodyea r Du nlop 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

6arises out of or is related to the de fenda

nt’s contac t with the forum. Moki Mac River Expe ditions , 221 S.W .3d at 576. When s p ec i fi c jurisdiction 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 the privileg e of conducting activi t i es h er e, 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 the i n itial burden of pleading

s u ff i ci en t alleg ations to bring a nonresident defe ndant within the persona l jurisdiction of a Texas
court. BMC Software , 83 S.W .3d at 794. W hen this initi al burde n is met, the burden 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 not es t ab l i s h j u risdiction. Kelly v. Gene ral Interior Constr., Inc. , 301 S.W .3d 653, 659 (Tex. 2010). A defe ndant may also neg ate jurisdiction on a fac tu al b asi s 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 t h e ca s e, should be considere d in deciding the issue of jurisdiction. Moncrief Oil Int’l , 414 S.W .3d at 156.

7When, 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 evidenc e ar e i m p l i ed

. BMC Software , 83 S.W .3d at 795. When the appellate rec ord i n cl u d es the repor ter’s rec ord and 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 deter mination of whether a cou rt h as 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.
Be 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 jurisdic ti o n a l c o n ta c ts s u p p o r t s p e c if ic jurisdiction 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 arg ues that “all of the complained of acts alleg ed to ha ve bee n committed by

Atiq were 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 busine ss contacts 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 h is individual capa city , the claims ag ainst him should be dism issed for lac k of jurisdiction.

Under the fiduciar

y -shield doctrine, a nonresident corpo ra t e office r or employ ee is protected f

rom the exercise of j urisdiction when all of t hat i ndividual’s contac ts with the forum

8state wer e made on behalf of his emp loy er. Tabacinic v. Frazier , 372 S.W .3d 658, 668 (Tex. 2 App.—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

s u p reme court has not expli citly adopted it). The fiduciar y -shield doctrine, howeve r, does n o t p r o te c t

a corpor ate office r or employ ee from an asser tion of persona l jurisdiction when the oppos i n g party has alleg ed intenti o nal torts or fra udulent acts for which he may be held individually liable.
Ennis v. Loiseau , 164 S.W .3d 698, 707 (Tex. App.—Austin 2005, no pet.); s ee S tull v. Laplant , 4 1 1 S.W .3d 129, 135 (Tex. App.—Dallas 2013, no pet.). This is beca use a “cor

porate officer i s 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 beca use a defe ndant’s alleg ed acts wer e

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 ove r 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 asse rted that the fiduciar y -shield doctrine did not apply to the ir claim of br eac h 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 -shield doctrine applies onl y 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 c ontrac ting pa rty , the ag ent’s conta cts with Texas in f urthera nce of the principal’s business are att ributable 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 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. 9done i n a co rp o ra t e capa city .” 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 subject to pe rsonal jurisdiction 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 b ecause, 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 [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 commit t ed actionable torts, in whole or in part in Hay s County , T ex as ” fo r which he is persona lly liable, including fra ud, brea ch of fiduciar

y duty , and interfe renc e with business rela tionships. Third, CoTechno arg ues that the fiduciar y -shield doctrine d o es n o t ap ply beca

use C-Fa brics and Fiber ex wer e opera 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 ex am ine CoTechno’ s asser tion that Atiq signe d the Future 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 signed t h e Agre ement as an individual. Specifica lly , Co T echno alleg es that, althoug 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

10formed 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 result 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 beac hed fiduciar y dutie s t h at 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. “When an ag ent neg otiates a contra ct for its principal in Texas, it is th e p ri n ci p al 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 corpor at 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.—Texa rk an a 2 0 1 3 , no pet.). As a result, to the extent a nonresident defe ndant’s contac ts 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. Gulf Indus. Prods

. , In c. , 2 22 S.W .3d 468, 486 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (hol d i n g t h at corpor ate office r’s actions prior to 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).

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

. Fish v. Tandy Corp. , 948 S.W .2d 886, 897 (Tex. App.— Fo rt W o rt h 1997, writ denied)

. I n these circ umstances, the a g e n t is r e li e v e d o f li a bility only when the corpor ation, once formed, subsequently adopts the contra ct either expressly or by acc epting its benefits. Id . at 898. 11I n th i s ca s e, the specia l-appe ara nce rec ord establishes that (1) the Articles of
I ncorpor ation for C-Fa

bri cs we re executed by Atiq on Aug ust 5, 2009; (2) the Future Business Ag ree ment was signe d on or about Aug ust 17, 2009; a nd (3) C-Fa

brics’s Articles of I ncorpor ation

wer e filed with the California Secre tary o f S t ate on September 11, 2009. There fore , we ag ree 4

t h at Atiq’s contac ts prior to the incorporation of C-Fa brics—to the extent the actions wou l d 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 the formation of [t he business entity ] as contac ts conducte d in [defe ndant’s] individual capa city ”).
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.
C o nsequently , to the extent Atiq conducte d business in Texas under the Ag ree ment on b eh al f o f
C-Fa brics prior to its incorpor ation, we would a lso imput e those c ontacts to Atiq persona lly

.

Considering o n l y Atiq’s contac ts in his individual capa city , howeve 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 clai m s re lated to the Future Business Ag ree ment—brea ch of contra ct, brea ch of fiduciar y duty , and fra

ud. Ba sed on t h e p leade d jurisdictional fac ts and the evidenc e befor e us, Atiq has only a single forum co n t act that is rela ted to the opera tive fac ts underly ing these three claims—his execution of t he Future Business Ag ree ment. To the ex tent the Agreem en t ca l l s for 5

I n California, corpor ate exis tence beg ins upon the filing of article s of incorporation. See 4 Cal. Corp. Code § 200. 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 CoT ec h n o ab o ut the proposed Ag ree ment. To the ex tent 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 12perf

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 sp ec i fi ca l ly alleg ed nor prese nted any evidenc e of perf ormanc e of the Ag ree ment by Atiq afte r execution of the Ag ree ment but prior to C-Fa brics’s i n co rpora tion. For example, CoTechno has not alleg ed or prese nted ev i d ence that during this four- wee k time period Atiq shipped materia ls to Texas, marke ted to Tex as, established an office in Texas, or otherwise conducte d business in Texas under the Ag ree ment.

Entering into a single contra ct with a Texas residen t , gen era lly , is insufficient to establish minimum contac ts. Michiana , 168 S.W .3d at 786 (citing Burger King Corp. v. Rudzewicz , 471 U.S. 462, 475 n.18 (1985)) ; Max Protetch, Inc. v. Herrin , 340 S.W .3d 878 , 886 (Tex. App.—Houston [14t h Dist.] 2011, no pet.). Be cause th ere 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 single contac t is sufficie nt to support a fi n d i n g that Atiq purposef ully availed himself of

the bene fits and laws of Texas. As a result, the trial court e rre d 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 consider CoTechno’ s asser tion that beca

use Atiq en gaged in tortious conduct in Te x as for

which he is pe rsonally

liable, he is subject to per sonal jurisdiction in Tex as.

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. 13An office r’s actions p er fo rmed 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.). Howeve 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 these 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). CoTechno’ s conver sion claim ag ainst Atiq arises from two alleg ed a ctivities: (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

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). 14based on an alleg ation that the defe ndant “dire cted a tort” at Texas. 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 person al 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 at e office r who alleg edly 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

u l av ai lment or are simply alleg ations 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 jurisdiction 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 juri s d i ct i o n al contac ts when a substantial connec tion exis ts betwee n the contac ts and the operative facts of the litigation. Moki Mac River Ex peditions , 221 S.W .3d at 576. Conversion is the “wr ong ful exercise of dominion and control over a nother’s
proper t y in denial of or inconsistent with his rig hts,” Johnson v. Brewer & Pritchard, P.C. , 73 S.W .3d 193, 21 1 n . 4 4 (Tex. 2002), and the opera tive fac ts at trial conce rning CoTechno’ s

conver sion claim aga i n s t Atiq will 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 the CoTechno war ehouse was located. I n additio n , t here 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 ev i d en ce sug g esting that the m ater ials wer e

15remove 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 m at er i al s were remove d by Fiber ex employ 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, CoTec h n o ’s claim aga inst Atiq is, in eff ect, a claim t hat Ati q participa ted
in a civil conspirac y to commit conver sion. See 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 the minds o n the object or course of action; (4) one or more unlawful, overt acts; and (5) damag es as a proxi mate result”)

. Howeve r, per sonal jurisdiction over a nonresident defe ndant
cannot be b as ed solely upon the 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 whether the def

en d an t 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
to Wil liams and the remova l of the materia ls; howeve r, but-for causa tion alone i s i nsufficie nt to support specific jurisdiction. Moncrief Oil Int’l , 414 S.W .3d at 142. The rela tionship betwee n the alleg ed conta ct—Atiq’s communications out side of Tex as, requesting that others conduc t activity
in Texas—and the opera tive fac ts in the l i t i gat ion of CoTechno’ 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

.

16Simi larly , CoTechno alleg es that Atiq interfe red with its business re l at i o n ships.

Specifica lly , CoTechno alleg es that “Mar k Wil liams, on behalf of Fiber ex and Atiq,” made cer tain misrepre sentations to CoTechno customers or potential customers that cause d harm to CoTec hno.
Howeve r, CoTechno does not explain, and we cannot discern, the jurisdictional contac ts with Texas, if any , to which this claim rela tes. There is no alleg ation that these repr esenta tions we re made in
Texas or to Texas residents. More over, there is no evidenc e sugg 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
to the extent it conclude d that specific jurisdiction exis ts with resp ec t t o CoTechno’ s claim of tortious interfer ence ag ainst Atiq. 7

CoTechno also arg ues that Atiq trave led to San Marc os in 2009, prior to the execution of 7 the Ag ree ment, to meet wi t h C o T ec h n o about the proposed contra ct and that during that meeting Atiq fr au d u l entl y induced CoTechno to enter into the Future Business Ag ree ment. Specifica lly , CoTechno alleg es that during n egotiations in Texas, Atiq made cer tain promises, these promises wer e l ater incorporated into the Future Business Ag ree ment, Atiq had no intention of persona lly comply ing with these promises at t h e t i m e, and CoTechno ultimately signe d the Future Business Ag ree ment in relianc e on these promises in the Ag ree ment. CoTechno’ s claim that Atiq committed fra ud in connec tion with his 2009 trip to San Marc os is, in eff ect, a claim that Atiq committed fra ud by executing 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 wit h t h e i n t en t i o n , desig n and purpose of dece iving, and with no i n t en t i on 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 abst ai n fr o m i n d u cing another to enter into a contra ct throug h the use of fra udulent mi s re prese ntations.”). Howeve r, as previously discussed, the undisputed evidenc e is that Atiq trave led to Texas on behalf of Fiber ex to discuss the proposed Future Business Ag ree ment and that the executed Ag ree ment expressly called for perf ormanc e only on the part of C-Fa brics and Fibe re x , n o t Atiq persona lly

. Ba sed on the pleading s and evidenc e befor e us, we cannot conclude that Atiq’s trave l to T ex as i s s u fficiently rela ted to CoTechno’ s claim of fra ud such that it would support the exercise of persona l jurisdiction over A tiq in his individual capac ity

. See Kelly v. General Interior Constr., Inc. , 301 S.W .3d 653, 17Alter ego Finally , we consider CoTechn o ’ s a s s e r ti o n th a t Atiq is subject to persona l jurisdiction 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 jurisdictio n o v er an individual cannot be based on jurisdiction over a
corpor ation 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 Dist.] 2002, p et

. dism’d w.o.j.). Whil e ordinarily a nonresident d ef en d an t has t he burden to neg ate all bases for personal jurisdiction proper ly pleade d, a plaint i 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 indi vidual must prove that such a rela tionship exis ts. W ashington DC Party Shuttl e, LLC v. Iguide Tours, LLC , 406 S.W .3d 723, 739 (Tex. App.—Houston [14t h Dist.] 2013, pet. deni ed). 8
Evidence o f al t er eg o includes proof of (1) the pay ment of alleg ed corpor ate debts with persona l ch ec k o r other commingling of funds; (2) repr esenta tions that the individual will financ iall y back t h e co rp o ra tion; (3) the diversion of company profits to the individual for his persona l use;

660 (Tex. 2010) (concluding that appellate court erre d by all o wing fra ud claim aga inst office rs t o proce ed “despite lack of alleg ations and evidenc e that any part of the [fraud] claim orig inate[d] from the Off icer s’ conduc t in Tex as”)

.
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. 18(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 -F abric s] neve r 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 fr iend of Atiq’s and if any mail c ame to tha t a ddress, it wa s forwa

rded to Atiq, as 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 CoTechno’ s alter- eg o alleg ations are rele vant t o 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. Kimberly-Clark Corp. , 235 S.W .3d 163, 175-76 (Tex. 2007) (discussing whether pare nt company and subsidiary should be trea ted as one for purposes of jurisdiction). T h es e al l ega tions have no 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 deposit ed 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

19funds or otherwise failed to keep assets separ at e. Be cause CoTechno failed to prese nt sufficie nt 9
evidence in support of its claim of alter eg o, the trial court err ed to the extent it imputed jurisdictional contacts to Atiq on this basis.

Ge neral Jurisdiction

Finally , bas ed on the rec ord befor e us and on those contac ts that 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 jurisdiction over a nonresident defe ndant based on any claim, including

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 exis ts only when a nonresident’ s contac ts with the state are continuous and sy stemat i c, Mo n cri ef 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 adig m fo ru m fo r t he ex erc ise of
g ener al jurisdiction is the individual’s domicile”). Fur ther, considering only those contac ts that are attributable 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

Moreove r, t o t h e ex tent CoTechno has sufficie ntly proven that C-Fa brics was opera ted 9 as an alter eg o of Ati q, 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. 20such that Atiq is “esse ntially at home in [Te x as ]

. ” Id

. at 2851. As a conseque nce, the trial court

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 reverse its order 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 on Rehe aring Filed: Nove mber 4, 2015

21