Court Opinion

ID: 9683952
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:41:10.891212+00
Date Added: 2024-06-11T18:17:51.232499
License: Public Domain

JAN P. PATTERSON, Justice,
dissenting.
Because I adhere to the original, unanimous opinion and judgment issued on February 12, 2004,1 respectfully dissent.
Ignoring the nature of the prior relationship between the parties, the majority concludes that it is irrelevant: “The prior arrangement between the parties, ending in 1998, bears little, if any, significance to the determination of whether soliciting USA’s renewal business over the telephone was purposefully directed at Texas.” In a contract suit based on an oral agreement, as this is, there is no authority for ignoring the arrangement between the parties, particularly where, as here, the petition alleges that “the agreement” was renewed each year. Further, in determining that one contract ended and another began, the ma*778jority improperly addresses the merits of this dispute.
The sole basis of USA’s argument that the court has jurisdiction is that “Defendants have contracted in the state to do business with parties located within this state.” Although the majority suggests that the initiation of the parties’ relationship is “unclear,” the only evidence in the record was provided by USA. USA’s president, George Bogle, testified that he entered into a “deal” in 1994 with the Hoiks to finance building of the boat and “put [Andy] in business,” and that the “original arrangement was probably made in Pensacola.” USA does not dispute that the relationship began with an oral agreement made in 1994 in Florida; the sole jurisdictional allegation is that the Hoiks contracted “in this state with parties located within this state.”
Nor does USA allege that the “arrangement” ended as the majority recites. That the prior arrangement is relevant is clear from the original petition which describes the nature of the “Agreement”: the parties “renewed the Agreement each year since 1997 except for 2000 in which year Defendants’ services were not used.” (Emphasis added.) Bogle testified that in 2002, the year in which the alleged breach occurred, “Andy called and said he wanted to know if we wanted to use the boat.” There is no allegation that Hoik either made a misrepresentation or engaged in fraud. Rather, the sole allegation is that the Hoiks did not perform under the agreement to provide fishing trips and use of the boat.
The majority recites that Andy Hoik called USA on the telephone “three times over four years to solicit its rental of the boat and offered to pick USA up in the boat anywhere along the Gulf Coast.” The record shows the following: Andy Hoik called USA once in 1999, once in 2001, and once in 2002 offering use of the boat, and USA agreed to its use; USA did not use the boat in 2000. The arrangements seemed to vary. In 2001, USA paid Hoik periodically as it used the boat because “two years ago he had not shown up.” Bogle testified that “[t]hey offered to pick you up anywhere on the gulf coast”;1 the actual boat trips originated one time in Louisiana and “a couple or three times in Florida.”2 In 2002, USA prepaid the entire amount of $25,000, but used the boat only once for three days, then sued to recover the balance of the money paid for which it did not receive services.
If the original agreement is irrelevant, as asserted by the majority, then the question we are called to answer is whether the *779single call in 2002 — or three calls over the four-year period if the entire arrangement is considered — constitutes the “purposeful availment” by a nonresident of the privilege of conducting activities within the forum state required to invoke the benefits and protections of the state’s laws. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (citing Hanson v. Denckla, 857 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). This is to avoid jurisdiction based solely on “random,” “fortuitous,” or “attenuated” contacts that would not satisfy the due process requirements of “doing business” in Texas. See Tex. Civ. Prac. & Rem.Code Ann. §§ 17.041-.044 (West 1997), § 17.045 (West Supp.2004); Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991) (citing Burger King, 471 U.S. at 475, 105 S.Ct. 2174). The exercise of personal jurisdiction is proper when the contacts “proximately result from actions” of the nonresident defendant, which create a “substantial connection” with the forum state. Burger King, 471 U.S. at 475, 105 S.Ct. 2174. And the “substantial connection” between the nonresident defendant and the forum state necessary for a finding of minimum contacts must come about by action or conduct of the nonresident defendant “purposefully directed toward the forum state.” Id.
Due process requires that a defendant not be haled into a Texas court unless his activities should have led him to reasonably anticipate being answerable here. See Schlobohm v. Schapiro, 784 S.W.2d 355, 359 (Tex.1990) (noting that “the qualify, nature, and extent of [the nonresident’s] activity in Texas justifies a conclusion that he should expect to be called to our courts”). Here, the single call from Alabama in 2002, or the three calls if we consider the whole arrangement, all of which led to use of the boat outside of Texas, cannot without more convert to the expectation of being haled into a Texas court.
These facts are distinguishable from those in Rynone Manufacturing Corp. v. Republic Industries, Inc., 96 S.W.3d 636 (Tex.App.-Texarkana 2002, no pet.). But even in Rynone, the court considered the course of business between the parties, finding that “[t]he only evidence in the record about the origin of the parties’ relationship” was a telephone solicitation on behalf of the nonresident Rynone directed toward the plaintiff Republic in the forum' state. Id. at 639. In addition, Republic was aware of Rynone through advertisements placed in national trade publications, and the parties negotiated with each other by “several” telephone and facsimile communications. Id. Republic also produced drawings in the forum state that were forwarded to Rynone, where they became a part of the written contract. Id. The court thus considered prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing, to evaluate whether Rynone purposefully established minimum contacts within the forum. Id.
Unlike this case, the very origin of the parties’ relationship in Rynone was initiated by a telephone solicitation of business. Thus, the court found that the lawsuit “traces back” to this originating telephone call in which Rynone sought to do business with Republic. Id. at 640. Rynone initiated the business relationship between the parties through advertising and the telephone call. But jurisdiction did not rest on the telephone call alone. Id. And, although the majority acknowledges that Rynone is distinguishable because the parties’ relationship “began via a telephone solicitation,” they find it insignificant because they determine that the agreement *780here ended and started anew with a telephone call.
But it is significant that the relationship here originated outside of Texas, at a time when USA may have been located in Arizona, and was not prompted by any purposeful solicitation of business in Texas. It is because of this relationship that the entire arrangement of the parties must be considered here. The majority’s conclusion that the parties’ prior arrangement ceased in 1998 and was later renewed by a telephone solicitation from the Hoiks is at odds with USA’s allegation in its petition that the parties “have renewed the Agreement each year since 1997 except for 2000 in which year Defendants’ services were not used” and that “Plaintiff has used the Boat each year for parties and outings.”
As in Rynone, and unlike here, the relationship between the parties in Beechem v. Pippin, 686 S.W.2d 356 (Tex.App.-Austin 1985, no writ), originated with a telephone solicitation. But this Court did not find the origination call alone sufficient to confer jurisdiction. Rather, it was because the written contract was solicited, negotiated, and partially performed in Texas that the Court found that the out-of-state party had purposefully availed itself of the privilege of conducting activities within the forum state. “Pippin solicited the contract by a telephone call to Beechem in Texas, Beechem signed the contract here, and payments were made by mail to Beechem’s business address in Texas.” Id. at 361. Distinguishing other cases, this Court found that the nonresident had other contacts with Texas, including correspondence, payment for the moving of a sludge applicator in Texas, and causing its insurance agent to contact the Texas company to arrange coverage for the machine. Id. at 362. In Beechem, we concluded: “We do not imply by this opinion that merely contracting with a resident of this State will alone support jurisdiction in Texas courts to determine whether a breach has occurred.” Id. at 363. We went on to hold that the contacts of the nonresident— “those that were related to the cause as well as those that were unrelated — were quantitatively and qualitatively sufficient to make [the nonresident] answerable in the courts of Texas on the alleged breach of contract.” Id.
And that is the question here: whether the contacts of the nonresident were quantitatively and qualitatively sufficient and purposefully directed to this forum. I would hold that the single call was insufficient: it did not form the basis for the relationship and there is no allegation that it was fraudulent or contained misrepresentations. Even the three telephone calls over a four-year period do not rise to the level of purposeful acts directed at the forum state sufficient to invoke the protections and benefits of Texas courts. But even if the single call in 2002 “renewed” a contractual relationship between the parties, there is no authority for resting jurisdiction in a contract case on a single call. The issue remains the same: to establish the minimum contacts with the forum state required to confer jurisdiction, only a nonresident that has purposefully availed itself of the privileges and benefits of conducting business in the forum state has sufficient contacts to confer personal jurisdiction.
Courts have specifically rejected jurisdiction based on a single telephone call to initiate a contract. In Blair Communications, Inc. v. SES Survey Equipment Services, Inc., our sister court in Houston concluded: “We do not believe that initiating contract discussions with a Texas resident, and subsequently entering into a contract, in addition to making payment in Texas, are sufficient contacts with Texas when the entire substance of the contract is performed outside the state.” 80 *781S.W.3d 723, 730 (Tex.App.-Houston [1st Dist.] 2002, no pet.). See also Electrosource, Inc. v. Horizon Battery Techs., 176 F.3d 867, 872 (5th Cir.1999) (applying Texas law) (contract with an out-of-state party alone does not automatically establish sufficient minimum contacts; other factors must be considered); J.D. Fields & Co. v. W.H. Streit, Inc., 21 S.W.3d 599, 604 (Tex.App.-Houston [1st Dist.] 2000, no pet.) (same); TeleVentures, Inc. v. International Game Tech., 12 S.W.3d 900, 909 (Tex.App.-Austin 2000, pet. denied) (same). The court in Blair Communications further rejected a bright-line test that focuses solely on the initiation of contact between the parties: “While purposeful contact with the forum state is an important component of the minimum contacts analysis, equally important is the requirement that there be a substantial connection between the nonresident defendant and the forum state arising from such contact.” Id. (quoting Ring Power Sys. v. International de Comercio Y Consultoria, S.A., 39 S.W.3d 350, 354 (Tex.App.-Houston [14th Dist.] 2001, no pet.)).
There is no showing that the Hoiks engaged in purposeful activities within the forum state or had the necessary minimum contacts to subject them to personal jurisdiction in Texas. The Hoiks’ only affirmative acts directed toward Texas were three calls to USA in Austin over four years to arrange for use of the boat. Otherwise, the evidence shows that the relationship originated outside of Texas, USA never used the boat on the Texas coast, and the Hoiks are residents of Alabama who maintain their business in Alabama. The Hoiks’ activities do not justify an expectation of being haled into a Texas court.
Because the Hoiks’ contacts with Texas were insufficient to avail themselves of the privileges, benefits, and protections of this state, see Beechem, 686 S.W.2d at 361, haling them into a Texas court would “offend traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Schlobohm, 784 S.W.2d at 358. Accordingly, I would reverse the judgment of the trial court, render judgment granting the Hoiks’ special appearance, and order dismissal of USA’s suit for lack of personal jurisdiction.

. The majority goes so far as to interpret the oral contract between the parties as allowing USA to “demand performance in Texas.” This does not appear in the record. Bogle testified both that “[t]hey offered to pick you up anywhere on the gulf coast” and "they offered to pick me up anywhere on the Texas coast at any time,” but that the Hoiks never did so. That the contract could have been performed in Texas is not determinative; specific jurisdiction turns on actual contacts and conduct directed to the forum state. Further, because the record does not demonstrate when the Hoiks made the "offer,” we do not have sufficient facts to infer that this offer pertained to the arrangement to use the boat in 2002, the original agreement, or whether it was a term at any time.

. There are no jurisdictional facts alleged in the petition or contained in testimony regarding Arthur Hoik. In addition, Bogle’s testimony that "I think they have picked people up ... at places along the Texas coast” might be relevant to an assessment of general jurisdiction, but is not relevant to USA's assertion of specific jurisdiction. See BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 797 (Tex. 2002) (assertion of general jurisdiction requires proof of "substantial activities” within the forum). USA does not contend that general jurisdiction exists.