NO. 07-03-0163-CV IN THE COUR

T OF APPEALS FOR THE SEVEN TH DISTRICT OF TEXAS

AT AMARILLO PANEL B OCTOBER 24, 2003

______________________________ MORGAN DOW DY, APPELLANT

V. DOVIE MILLER , APPELLEE

_________________________________ FROM THE 106 TH DISTRIC T COURT O F LYNN COUNTY; NO. 00-04-05832; HONORABLE C ARTER T. SCHILD KNECHT, JUD GE

_______________________________ Before JOHNSON, C.J., and QUINN and CAMPBE LL, JJ.
OPINION Morgan Dowdy brings this interlocutory appeal from the denial of his s pecial appearance challengi ng the tria l court’s personal jurisdiction ov e r him in his

individ ual capacity in a suit for breach of a lease by a corporation of which he is an officer and di rector. Finding merit in his issue, we revers e the trial court’s denial of hi s specia l appearance.1 The corporation’ s actual name w as West Texas Br o adcasting Company, Inc. All its shares were owned by members of Charles

W. Dowdy’s immediate family. The corporation submitted an appli cation to the Texas Secretary of State for a cer

tificat e of authority to trans act busi ness in T exas. It a ppears that it d id not do so, thou gh , un til the day before the cl osing of the sal e of its station in Tahoka. 2 Mostof the facts giv ing ris e to this li tigation ar e undisputed. M organ and his father CharlesW. Dowdy, Missi ssippi resid ents, were, with other family members, of ficers, directors and shareholders of two Mi ssissippi corporations formed to operate commer cial radio stations in Texas. W est Texas Broadcasting, Inc., owned a station in Tahoka, in Lynn County; H.D., Inc. owned a station in Lubbock. This litigat ion concerns West Texas Broad casting, Inc. 1 ( w h i c h w e r e fe r t o a s WT B )

. I n A u g u s t1 9 8 6 C h a r l e s W. Dowd y executed a lease on behalf of WTB with Lionel and D ovie Mi ller that al lowed WTB to construct a t ransmitting tower and related equipment on land owned by the Millers. The lease was for a term of 25 year s and contained no restricti ons on assig nment.
In November 1987, after the tower was constructed, M organ Dow dy, acting as an officer of WT B, executed an amendment to the lease a ltering s ome of its terms to bring them into con formi ty with the to wer as const ructed, and incre asing t he monthly rent to $350. The tower w

as removed s ome time before Augus t 1996, b ut the si te was not restored to i ts prior condition. WTB continued to pay rent under the l ease.
In 1997, W TB sold the Tahoka station and H.D., Inc. sold the Lubbock station. The sale contract executed by WT B provided for the assig nment to the buyer of certain leas es and contracts, n ot including the lease from the Mil lers. The record su gges ts that WTB continued paying rent to the Millers through Mar ch 1998, then ceased . In June 1999 and2 Her husband, Li onel Mill er, died before co mmencement of this lit igation.
3 Morgan tes tified on depositi on that he had traveled to Texas to inspect the tower after its construction, and ackn owledged one or two other trips to T exas on corporati on business, but de nied any other contact w ith our state.

3 aga in in February

2000, attorney

s representi ng the Mil lers sent l etters to WTB and the Dowdys requesting payment of over due rent.
Dovie Miller

2 file d sui t agai nst W TB, Morga n Dowd y ind i v i d u a l l y , a n d C h a r l e s W. Dowdy individually, in April 2000. She alleged a breach of the leas e and sought to recover past and future rent totaling $48,650, $5,000 for restor ation of the tract, pr e- and postjudgment

interest, and attorneys fees and costs. Charles and Morg an filed a special appearance, supp ort ed by affi davit s, allegi ng the court lacked personal jurisdic tion over them in their i ndividual capacities because they had nocontacts w ith Texas other than as corporate office rs. 3
Charles die d in November 2001 , befo re d iscove ry on th e is sue of p erson al jur isdiction was comple ted. In July 2002, Morga n filed a brief in support of his sp e cia l appearance arguing he had no individual contacts with Texas and juris diction over a corporation does not establi sh jurisdi ction over its officers, di rectors, or employeesin their individual capacities. In her respo nse, Mill er all eged M organ did no t deny that WTB had breached the lease and that the Dowdys had impro perly used proceeds of the statio n’s sale to preferentially repay loans to themselves. She also alleged that as part of the radio station sale transaction Morgan execu ted a n on-compete agr eement in his i ndividual capacity, establishing minimum conta cts with Texas.4 Morgan question s the suf ficien cy of Miller ’s allega tions c oncerning Morgan’s

personal amenabi lity

to sui t in Tex

as to me et this “init ial burde n,” citin g Frank A. Smith Sales, Inc. v. Atla ntic Aero, Inc. , 31 S.W.3d 742 (Tex.App.–CorpusChristi 2000, no pet.). Miller’s original petition, w hich, according to the record before us, remains her live plead ing, allegesonly a sui t to enforce the le ase. Morga n testified on depos ition that the lease w as a valid obl igation of WTB, and that WTB’s lack of funds was the onl y reason i t had not made further payments under the lease. He further test ified that the funds WTB received from sale of the radio station were used to pay creditors, which included Morgan himself and other

entities cont rolled by

Morgan and other family member s. Miller ’s alleg ations that such payments were improper and breached a duty Morgan ow

ed Miller , and her alleg ation of his execu tion of a non-compete ag reement, wer e contained ini tially in her respons e to Morgan’s special appear an ce and later i n briefs in the t rial court and this cour

t. For purposes of this opinion, we assume, w ithout decidin g, that the al legat io ns in Miller’s original petition that M organ “conducted busi ness” in Texas, either al one or coupled w ith Miller’s later asser

tions of Morg an’s execut ion of th e non-compete agr eement and wrongdoing in handling the proceeds of WTB’s sale of the radio s tation, meet her “init ial burden.” 4 A t a hearing on the special appearan ce, the parties introduced the discovery conducted on the issue, including evidence that W TB was still in existence as a Missi ssippi corporation, but was not active and had no assets. Thetrial cour t denied Morgan’s

special appearance. On interlocutoryappeal pursuant to section 51.014(a)(7) of the Civil Practice & Remedies Code (Vernon 200 2), Morgan presents a single issue ch allenging the trial court’s deni al of his speci al appearance.
Aplaintiff bringing suit against a non-resident bears the initial b urde n of pleading sufficient allegatio ns to bring the defendant wit hin the scope of the long-arm statute. 4 BMC Software Belgium v. Marchand, 83 S.W.3d 789, 793 ( Te x. 2002); see Kawasaki Steel Corp. v. Middlet

on , 699 S.W.2d 199, 202-03 (Tex. 19 85). Mill er’s petiti on alleged tha t Morgan had conducted busi ness in Texas . The Texas long -arm statute au t horizes t he exercise of jurisdiction over non-residents “doing business” in our state. Tex.C iv.Prac. & Rem. Code Ann. § 17.042 (Vernon 2002 ). The “doing business” standard ofour long-arm5

statute permits it to reach asfar as the federal constitutional requirements of due process will allow. Guardian Royal Exchange Assur

., Ltd. v. Engl

ish ChinaClays , 815 S.W.2d 223, 226 (Tex. 1991)

. The review ing court therefore must deter mine whether it is cons istent with federal constit utional req uirements of due p roc ess fo r the Texas court to assert in personam jurisdiction over t he non -resident defendant. Id; see also H elicopteros Nacionales de Columbia v. Hall , 466 U.S. 408, 413 -14, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).
The fam iliar due p roce ss an alysis in pe rson al jur isdic tion case s con side rs two factors: (1) whether the non-resident defe ndant has purp osel y establi shed “minimum contacts” with Texas and, if so, (2 ) whether the exerci se of jurisdi ction comports with “fair play and substantial justice.” Burger King Corp. v. Rudzewicz , 471 U.S. 462, 475 -76, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). Purpo sely established minimum co ntacts may give rise in a particular

case to jurisdiction that is specific or general

. Guardian Royal , 815 S.W.2d at227-230. When specific juris diction is asserted, thecause of action must a rise out of,
or relate to, thenon-resident defendant’s con tact with the forum state. General jurisdic tion requirescontinuous and s ystematic contacts between the non -resident defendant and the forum state. Id. at 230. Specific jurisdiction may be justified on the basis of acti vities t he defendant has cond ucted within Texas, BMC Software , 83 S.W .3d at 796, or of activities “purposef ully directed” to Texas, Guardian Royal , 815 S.W .2d at 228. The con stitutional requirement is thatthe defendant have “fair warni ng” that hi s conduct can s ubject him tosuit in theforum6

state. Burger King , 471 U.S. at 472. Due process does not permit jurisdiction based solely
on “ random,” “fortui tous” or “a ttenuated” contac ts, id. at 47 5, or over th ose wi thou t “meaningful contacts, tiesor relati ons” wi th our state. Id ., citing International Shoe Co. v. Washington , 326 U.S. 310, 319, 90 L. Ed. 95, 66 S.Ct. 154 (1945 ).
Adefendant cha llenging a court’s exercise of personal jur isdiction t hrough a special appearance carr ie s the burden of neg ating all bases of personal j urisdicti on. Kawasaki , 699 S.W .2d at 2 03. In re viewing a trial cour t’s denial of a special appear ance, we r

eview the court’s conclusion whether personal jurisdiction exists de novo , as the quest ion is one of law. BMC Software , 83 S.W.3d at 794. We review the court’s factual findings for l egal and factual sufficiency. Id .; see Ball v. Bigham , 990 S.W .2d 343, 347 (Tex.App. --Amarillo 1999, no pet.). When the trial cour t issues no findi ngs of fact, it i s implied the court found all facts that are necessary to suppo rt its ruling and that are supported by the evid enc e. BMC Software , 83 S.W.3d at 795. The record before us includ es the clerk’s and reporter’s records, thoug h, so such impli ed findings ar e not conclusi ve and Morgan ma y challenge the sufficiency of the evidence. BMC Software , 83 S.W.3d at 795; Roberson v. Robinson , 768 S.W .2d 280, 281 (Tex. 1989 ). As noted, the facts in this case are generally undisputed.
Miller does no t arg ue that Morg an’s contacts wi th Te xas e stablish g eneral jurisdict ion over him. In accordance w ith the governing stan dards, then, to determin e whether Morga n has nega ted a ll bas es ofpers ona l juri sdic tion pres ente d, we first consid er5 Non e of Miller’ s record r eferences identify

an executed copy of the agr eem ent

. Morgan testified on deposi tion that he did not remember signing such an agreement. The record contains an uns igned copy of a document entitled “Non-CompeteAg reement” between the station pur chaser and Mor

gan. The recor

d also contains

an opinion of counsel issued in connection with the c losing of thesale that states a non-compete ag reement was signed. This opinion assumes that Morgan signed a non-compete agreeme nt like that in the record. There is no contenti on, though, that Morgan si gned the agr eementin Texas. Morgan testified on deposition t hat the sale of the s tation wasclosed “by mail,” and none of the documents si gned by M organ in co nnection wi th th e sale ap pear to have been signed in Tex

as.
7 whether the record s upports a concl usion that Mor gan establis hed minimum contactswith Texas so as to establish s pecific juri sdiction w ith respect to Miller’s cause of acti on.
Miller contends the evidence suppo rts a finding that M organ established mi nimum contacts to support jurisdic tion over him in two ways: by his ex ecution of a personal noncompete agreement, and by his acti ons as an officer an d director of W TB, which did business in Texas. W e conclude that neither of those activities is sufficient to establ ish the requisite minimum contacts. Non-Compete Agreement
In conjunction with W TB’s sale of the radio sta tion, Morg an indivi dually si gned 5 a non-compete agreement, by which he agreed not to e n gage in the radio broadcast business in competition with the Tahoka radio stati on for a period of thr ee years after

the closing. Mil ler point s to this per sonal agreement

by Morg an as the typeof purposeful contact that justifies

the exerci se of jurisdi cti on over him by Texas courts. And, M iller argues, since the non-compet e agreement was signed i n connection w ith the event that6 Miller argues that Morgan cons ented in the non-compete agreement toit s enforcement

in Texas. Without expre ssing any opinion on thequestion whether per sonal jur isdiction would li e in Texas for asuit agai nst Morgan to enforce the non- compe t e agreemen t, we note that we d o not find an agr eed forum-selecti on provis ion in the agreement; it does contain a choice-of-law provisi on adopting the internal law of Texas. 8 provided the corporatefunds by w hich Mill er should have been paid, Morg an’s purposeful contact prov ides specific jurisdict ion over hi m for Miller ’s suit.
Under the f acts of t his ca se, we cannot agree that Morgan’s execution of the noncompe te agreem ent warr ants the exer

cise of personal jurisdic tion over him. Mill er’s causes of action did not arise out of the non- compete agreement, nor from the contract for

sale of the station; her

cl aims arose from her lease with W TB. The non-com pete agreement’s relation to the lease and to Miller ’s claims u nder the lease i s too attenuated to give rise to specific jur isdiction.
Itis also i nstructive here to recal l the U .S. Supreme Court’ s discussi on in Burger King of the eff ect of a single contract in establishing minimum contacts. The Court there wrote: “ If the question i s whether an indivi dual's contr

act with an out-of-state party al one can automatically

establish s ufficient minimum contac ts in the other party's home for um, we believe the answer clearly is that it cannot.” 471 U.S. at 478. This holding must apply with part icular force where the contract is on e to refrain from doing an actin Texas. 6 Cf. Tex.Civ.Prac. & Rem. Code Ann. §17.042( 1) (Vernon 2002) (defining “doing bus iness” to include contracts to be perf ormed in this state).7 Tex. Bus. Corp. Act Ann. art. 8.02 (Vernon 2003). 9 Br ea ch of

Du ty
Miller ne xt argu es that “[Morgan] Dowdy purposefully directed his conduct as a corporate officer and direc tor towar

d Texas and per

sona lly ass umed the benefits and burdens of runnin g his company under Texas law.” As Miller characterizes the events, Morgan “broug ht his com pany into Texas to do busines s,” thereby becoming subj ect to Texas corporate laws, including those condemning corpora t e denuding and br each of fiducia rydut y. Those acti ons, Mill er argues, constituted thetype of purposeful acts that jus tify exercise of personal jurisd i ction over Morgan for his alleged violation of those corporate laws.
Miller places reliance on various p rovisi ons of the Texas Busi ness Corpora tion Act. She initiall y points to article 8. 02 of the Act whi ch provid es that foreign corporations do ing business in Tex

as under a certi ficate of authority, and its officers and directors , “shall be subject to the same duties , restric tions, penalti es, and liabil ities ” 7 as domestic corporations.
Miller’ s argument i s flawed. As article 8.02 makes clear, every foreign corpor ation thatqualifies to do business in Texas unde rtakes c ertai n obl igati ons u nde r Texa s law. Miller does not go s o far as to assert that the officers or di rectors of a corporation authorized to do business in Texas are autom aticallysubject to per sonal jurisdic

tion in our state in causes of action arising from corpo rate activities. At ora l arg ume nt, counsel for Miller argued that

such jurisdiction properly is limited to control persons such as Mor

gan. Even so limited, though, such a rule amo unts to th e kin d ofmech anic al te st th e cou rts ha ve8 Article 6.04 of the Business Corporation Act establis hes proceduresa corporati on must follow “before filing ar ticles of diss olution.” The Siegel opinion applied the pr

ovisions of article 6. 04 to the dissol ution of a corpora tion. 663 S.W.2 d at 826. Ar ticle 6.04 thus applies to WTB onlyby analog y. The undisputed evidence i s that WTB was not dissolved, onlythat it has no assets and its certificat e of authority to do business in Te xas lapsed. Neither of these conditions invokes th e provision s of art icle 6.0 4. Even as suming, arguendo , that Morg an’s conduct amounted to a breach of duty imposed by Tex as la w, thatfact alone cann ot establ ish the minimum contacts necessar y to sustai n personal jurisdict ion. 10 rejected. See, e.g ., Guardia n Royal, 815 S.W.2dat 231; Laykin v. McFall , 830 S.W. 2d 266, 271 (Tex.App.–A marillo 1992) (orig. proceeding).
Miller next cite s article 6.04 and Henry I. Si egel Co. v. H

olliday , 663 S.W.2d 824 (Tex. 1984), 8 arguing that “once the [station sale proce eds] hit the clos ing table, Tex as law impressed a trust on i t that requi red Dowdy to make arrang ements to pay Miller before he paid himself.” W e see nothing to indicate that, so far as W TB was c oncern ed, the sale proceeds “hitthe closing table” in Texas, nor that any of Mor

gan’s acti vities i nvolvi ng the proceeds occurred i n our state. M iller’sclaims of breac h of dut y by M or gan through his handling of the sale procee ds cannot be said to arise from acts committed in Texas. See BMC Software , 83 S.W.3d at 796-97. Mor eover, Mi ller

cites us to no authority

holding that the presence of

a trust benefici ary in Tex as, standing alone, confers per sonal juris diction here on the purpor

ted trustee.
Miller’s argument also disre gards the distinction be tween Mor gan’s indi vidual l iability and WBT’s corporate liabili ty, and the nat ure of a corporate entity. The evidence supports the statement that he di rected his conduct “as a co rporate officer”to Texas , but t he contention that his acts as a corporate officer necessarily res ulted in his personal11

assumption of the benef its and burdens of runn in g a compa ny in Texas is contr ary to established law. M organ hascited a lin e of Texas authori ty for the proposition that personal juris diction over a corporation does not extend to individual corporate officers, directors,
or employees, unl ess the corpor ation is the al ter ego of the defendan t. Vosko v. Chase Manhattan Bank , 909 S.W.2d 95, 99 (Tex.Ap p.–Houston [14 th Dist.] 1995, writ denied); Leon Ltd. v. Albuquer

que Commons Partnership , 862 S.W.2d 693, 707-08 (Tex .App.–El Paso 1993, no w rit); see also Siskind v. Villa F

oundation for Educ

ation , 642 S.W.2d 434 (Tex. 1982); Solow v. Centur y Assets Cor

p. ,12 S.W.3d 512 (Tex.App.– Beaumont 1999, no pet.). Her

e Miller has not pled or

pres ente d evid ence supp ortin g an al ter e go the ory. See generally Castleberr y v. Branscu

m , 721 S.W .2d 270 (Tex. 1986).
The U.S. Supreme Court also has made clear that the conta cts sufficient to ma intain jurisdict ion over an i ndividual are th ose of th e indivi dual. Calder v. J ones , 465 U.S. 783, 790, 104 S.Ct. 148 5, 79 L.Ed.2d 804 (1984) (“Each defendant’s

contacts w ith the forum State must be asses sed indivi dually.” ); see Burger Ki ng , 471 U.S. at 475.
Ator al argument, Miller brought to our attention the r

ecent opinion i n SITQ E.U., Inc., v. Reata Restaur

ants, Inc ., 111 S.W.3d 638 (Tex.App.–Fort Worth 2003, pet. filed). In SI TQ , com mercial tenants brought suit against the partnership that was their lessor, foreign holding compan ies composing the partnershi p, and directors of those compan ies. The tenants’ clai ms included fraud, negligent misrepresentation, conspir acy, tortiou s interference, denuding, and fraud ulent transfer. A fore ign corporate defenda nt and its sole shareholder

and director filed special appe arances, the indiv idual defendant asserting that9 Note the discussi on in Memori al Hospital

tha t the tort there alleg ed, that of negligent mis represen tation, is hel d to be committed i n part wher e reliance on the misrepresentat ion occurs. 835 S.W.2d at 648. 12 his contacts w ith Texas w ere solely

in his cor porate capacity

. Id. at 644. The court of appeals affirmed the trial court’s deni al of the special appearances. While we cannot disagreewith the court’s hol ding that an i ndividual defendant is not shi elded from personal juri sdiction to answer for his own tortious conduct simply because his actio ns were undertaken on behalf of an organiz ation, we donot find SITQcontrolli ng here. It i nvolves factors not pres entin this cas e. Significan tly, in SITQ , the actions of a Tex as agent were imputed to the appellants. Too , that case involves allegations of mis represent ations, a factor not present here. It therefore shares a f oundation with cases such as Memori al Hosp. Sys. v. Fisher Ins. Agency, In c. 835 S.W.2d 645 (Tex.App.–Houston [14 th Dist.] 1992, no writ ), cited her e by Mil ler, and Shapolsky v. Brewton , 56 S.W.3d 120 (Tex.App.–Hous ton [14 th Dist.] 2001 , no pet.), w hich also in volved misrepresentat ions made by out-of-state def endants to Texas plaintif fs who relied on them in Texas. 9 Miller has attempted to bring this case within that category by pointi ng out that WTB continued to pay the rent

under the lease for some time after the closing of the sale of the radio station, perhaps therefore misleading Miller to believe t hat it woul d conti nue to pay the lease. There is no ev idence, though, that WTB’s ren t paymen ts after the closing were accompan ied by any

representati on and the payments themselves cannot be seen as such.
The evidence s hows that M organ, acting in Mississippi, caused WTB to deplete its funds by paying some of its creditors, including himself, while failing to pay Miller. There13

is factually

sufficient evi dence from whic h the trial cour t could haveconcluded that Mill er was the onl y creditor not paid. M iller does not contend that M organ thereby committed a tortious act in Texas , but cites th e proposition that a tortfeasor who know

s that the brunt of th e injury will be felt by a particular resident in the forum state must reaso nably anticipate being haled into court there to answer for h is acti ons. See Cartlidge v. Hernandez , 9 S.W.3d 341, 348 (Tex.App.–Houston [14 th Dist.] 1999, n o pe t.), citi ng Memori al Hospital . This court pr eviously has declined to adopt a test basi ng personal jurisdict ion on the mere occurrence of injury in Texas. See Laykin v. McFall , 8 3 0 S

. W. 2d at 271. We cannot say that Morgan’s

failure to cause W TB to honor its lease with Miller, without more, is an activit y suf ficiently directed to Tex as to subject him personally to juri sdiction here. See Burger King , 471 U.S. at 474 (foresee ability of causing in jury i n another state not sufficient

alone to cause de fendant to anticipatebeing subje cted to suit in that state). Finding that the recor

d does not support

a conclusion that Morgan’ s activi ties established the minimum contact s wit h Texas s uch as to subjec t him to personal jurisdict ion, we need not address whether the exercise of person al jurisdiction over him would comport with “fair play and substantial justice.”We sustain Morgan Dow dy’s is sue, reverse the order of the trial court denying his special appear ance, and remand the case with ins tructions to dismiss Mor gan Dowd y. James T. Campbell

Justice