Court Opinion

ID: 2830853
Source: CourtListenerOpinion
Date Created: 2015-08-26 16:16:52.524518+00
Date Added: 2024-06-11T11:31:40.605453
License: Public Domain

COURT OF APPEALS
                        SECOND DISTRICT OF TEXAS
                             FORT WORTH

                            NO. 02-14-00348-CV

KKT INTERNATIONAL, LTD.                                         APPELLANT

                                     V.

SMARTWISE INTERNATIONAL,                                        APPELLEES
LTD., SALENA CHEN, DARRYL
CHEN, AND MONICA CHEN

                                  ----------

         FROM THE 352ND DISTRICT COURT OF TARRANT COUNTY
                    TRIAL COURT NO. 352-268612-13

                                  ----------

                       MEMORANDUM OPINION 1

                                  ----------

     In this appeal we are asked to review a trial court’s order sustaining a

special appearance by a nonresident corporation and its board of directors.

Because the parties’ contract did not contain an enforceable forum-selection

clause and because the nonresident corporation and its directors did not have

     1
      See Tex. R. App. P. 47.4.
sufficient minimum contacts with Texas to justify the exercise of personal

jurisdiction by Texas state courts, we affirm the trial court’s order.

                                 I. BACKGROUND

      Appellant KKT International, Ltd., a Barbadian corporation, sells and

distributes patented medical equipment.         KKT’s parent company is Optima

Health Solutions International Corporation, a Canadian corporation that sells its

own patented medical devices. Appellee Smartwise International, Ltd., a Hong

Kong corporation, markets medical devices and services in Asia.           Appellees

Monica Chen, Salena Chen, and Darryl Chen (collectively, the Chens) are the

only members of Smartwise’s board of directors, and Monica owns 100% of

Smartwise.    Smartwise, in turn, owns 10% of Optima.           Smartwise acts only

through its board of directors—the Chens. Monica resides in Hong Kong, Darryl

resides in Washington, and Salena resides in Canada. Monica and Salena have

never been to Texas, and Darryl was last in Texas in 2012 to attend a wedding.

      Optima created a medical device that diagnosed the cause of back pain

(the diagnostic device) and applied with the Federal Drug Administration (FDA)

for approval to sell it. One of the reasons Smartwise invested in Optima was

because of the pending FDA approval for the diagnostic device.

      On February 23, 2011, Smartwise and KKT signed a “Letter of

Agreement,” under which Smartwise agreed to market KKT’s products—

specifically, “KKT Beds, X-ray frame and chair”—in China in exchange for a

“commission of one third of Royalties and mark-up on KKT Device, accessories

                                           2
and its supportive and related products and services into and out of [China].”

Smartwise also agreed to “[a]ssist in Chinese regulatory filling [sic].”       The

agreement provided that “[t]his agreement will be bound by the courts and rules,

as governed in USA in case of arbitration or disputes” (the governance clause).

After KKT allegedly received no royalties “due either to Smartwise’s inability to

properly provide sales support to the third party [buyer in China], or due to non-

remittal of two-thirds of the royalties paid by the third party [to Smartwise],” KKT

sued Smartwise and the Chens in a Texas state court in Tarrant County over the

letter agreement, raising claims for fraud, negligent misrepresentation, breach of

contract, breach of fiduciary duty, unlawful self-dealing, breach of the duty of

care, conversion, promissory estoppel, and unjust enrichment. KKT alleged that

the trial court had personal jurisdiction over the parties based on the governance

clause. KKT also contended that Darryl engaged in business in Texas although

he did not live in or maintain a regular place of business in Texas.           KKT

recognized that neither Smartwise nor the Chens were Texas residents.

      Smartwise and the Chens filed a verified special appearance, challenging

the trial court’s personal jurisdiction over them because none of them were Texas

residents and because they did not have sufficient minimum contacts with Texas

to confer jurisdiction on Texas courts.      See Tex. R. Civ. P. 120a(1).      KKT

responded to Smartwise and the Chen’s jurisdictional arguments and alleged that

KKT, Optima, and Smartwise had hired Emergo Group, an Austin, Texas

company, to assist in obtaining FDA approval for Optima’s medical device. They

                                         3
further alleged that to “gain FDA approval, [KKT, Optima, and Smartwise] met

numerous times in Texas, including DFW Airport which is located in Tarrant

County, Texas.” The Chens then filed affidavits in which they individually yet

uniformly stated that they had not participated in the airport meetings or Optima’s

quest for FDA approval:

      I can only assume (but I do not personally know) that the meetings
      at DFW Airport referenced by [KKT] were a part of that FDA
      submission/approval process.[2] What I do know, however, is that
      neither SmartWise nor its owner (Monica) nor its directors (Monica,
      Darryl and [Salena]) had any involvement in Optima’s FDA
      submission/approval process. I am equally certain that the contract
      made the basis of the present lawsuit filed in Tarrant County, Texas,
      has nothing to do with that FDA submission, again noting that none
      of us Chens nor SmartWise had any involvement with that FDA
      application. That possible technology was unquestionably one of
      the motivations for SmartWise investing in Optima, but again,
      SmartWise had no involvement in the FDA submission/approval
      process. To be very clear, neither Monica Chen, Darryl Chen, nor
      [Salena Chen] attended any of the meetings at DFW Airport
      regarding Optima’s FDA approval process. More broadly, none of
      us three were involved in any such FDA submission/approval
      meetings, regardless of location – be it DFW Airport or otherwise.
      Optima personnel were the ones pursuing the FDA approval, not us
      Chens and not SmartWise.

      KKT then filed an amended response and objected to the affidavits

because the Chens failed to establish their personal knowledge based on their

admissions that they had “no personal knowledge of the FDA meetings, but

conveniently affiants are later able to deny having involvement with the FDA

meetings.” In short, KKT argued that because the Chens stated “but I do not

      2
      We will refer to these sentences in the affidavits as the “‘I assume’
sentences.”

                                        4
personally know” in the “I assume” sentences, the entirety of the affidavits should

be struck based on a lack of personal knowledge. KKT also contended in its

amended response that Smartwise and the Chens were subject to personal

jurisdiction in Texas based on their sufficient minimum contacts with Texas,

mainly based on Optima’s contract with Emergo Group, the pending FDA

approval for Optima’s diagnostic device, and the contractual consent to

jurisdiction contained in the governance clause.

      The trial court held a hearing on Smartwise and the Chens’ special

appearance and on KKT’s objections on September 25, 2014. The trial court

sustained in part KKT’s objections and struck the “I assume” sentences from the

affidavits. A representative of a consulting company used by KKT, Christopher

Chambers, testified that his contract with KKT included a “venue provision,”

specifying that venue for any disputes between Chambers’s company and KKT

would be in Tarrant County, Texas. He further affirmed that “anybody that gets

FDA approval in the United States has to go through [Emergo Group].”

Chambers also testified that “these entities,” which he did not specify, met at

DFW airport to discuss FDA approval for Optima’s medical device and that the

device would ultimately be sold in Texas. He further affirmed that KKT does

business in Texas.

      On October 3, 2014, the trial court entered an order sustaining Smartwise

and the Chens’ special appearance and dismissing KKT’s claims. See Tex. R.

Civ. P. 120a(3)–(4). No party requested that the trial court enter findings of fact

                                        5
and conclusions of law. See Tex. R. Civ. P. 296. KKT appeals from the trial

court’s order, arguing that the governance clause was a forum-selection clause

and, therefore, acted as Smartwise and the Chens’ consent to personal

jurisdiction in Texas. KKT also contends that specific jurisdiction in Texas exists

based on Smartwise’s and the Chens’ purposeful contacts with Texas related to

KKT’s claims against them. KKT additionally argues that the trial court erred by

considering the Chens’ affidavits.

              II. CONTRACTUAL CONSENT TO JURISDICTION

      We first address whether the governance clause was a forum-selection

clause that operated to confer personal jurisdiction over Smartwise and the

Chens.    This was and is KKT’s main argument in favor of the exercise of

personal jurisdiction. Indeed, the presence of a valid and enforceable forum-

selection clause circumvents the need to conduct a due-process and minimum-

contacts analysis because such a clause acts as consent to jurisdiction in the

contracted-for forum. Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585, 589–

90, 111 S. Ct. 1522, 1525 (1991); 3 Baker Hughes Inc. v. Brooks, 405 S.W.3d
246, 249 (Tex. App.—Houston [14th Dist.] 2013, pet. denied); RSR Corp. v.

Siegmund, 309 S.W.3d 686, 704 (Tex. App.—Dallas 2010, no pet.); see also

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14, 105 S. Ct. 2174, 2182

      3
      Congress later abrogated the type of forum-selection clause at issue in
Carnival Cruise Lines; however, the Court’s holdings regarding the construction
and effect of valid and enforceable forum-selection clauses remain. See
46 U.S.C.A. § 30509 (West 2007).

                                        6
n.14 (1985) (recognizing personal jurisdiction is a waivable right and party may

give express or implied consent to jurisdiction under “variety of legal

arrangements”). In short, if a party contractually consents to jurisdiction in a

particular forum, the trial court’s exercise of jurisdiction over that party will not

offend due process even in the absence of minimum contacts with Texas.

Dos Santos v. Bell Helicopter Textron, Inc., 651 F. Supp. 2d 550, 554 (N.D. Tex.

2009); Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 792 (Tex.

2005); RSR Corp., 309 S.W.3d at 704; Tri-State Bldg. Specialties, Inc. v. NCI

Bldg. Sys., L.P., 184 S.W.3d 242, 248 (Tex. App.—Houston [1st Dist.] 2005, no

pet.).

                              A. STANDARD OF REVIEW

         We review the trial court’s decision whether to enforce a forum-selection

clause for an abuse of discretion. Brown v. Mesa Distribs., Inc., 414 S.W.3d 279,

284 (Tex. App.—Houston [1st Dist.] 2013, no pet.).            “Under an abuse of

discretion standard, we defer to the trial court’s factual determinations if they are

supported by the evidence, but we review the trial court’s legal determinations de

novo.” In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig.

proceeding).       Therefore, to the extent our review involves contractual

interpretation of a forum-selection clause, we employ a de novo standard of

review. Phx. Network Techs. (Europe) Ltd. v. Neon Sys., Inc., 177 S.W.3d 605,

610 (Tex. App.—Houston [1st Dist.] 2005, no pet.).

                                         7
      When we are asked to enforce a forum-selection provision, we first

determine whether the contract in fact contains such a clause by using ordinary

principles of contract interpretation. RSR Corp., 309 S.W.3d at 700. If such a

clause is found, we then determine whether there is any reason to deem it

unenforceable, recognizing that the presumption is that the clause is indeed

enforceable. In re Int’l Profit Assocs., 274 S.W.3d 672, 675 (Tex. 2009) (orig.

proceeding); RSR Corp., 309 S.W.3d at 700.

                    B. CHARACTER OF CONTRACTUAL CLAUSE

      A forum-selection clause is a contractual arrangement under which parties

agree in advance to submit their disputes for resolution within a particular

jurisdiction; a choice-of-law clause reflects the parties’ intent that the law of a

specified jurisdiction will apply to their agreement. Compare In re AIU Ins. Co.,

148 S.W.3d 109,   110–14    (Tex.   2004)   (orig.   proceeding)   (discussing

enforceability of forum-selection clause), with DeSantis v. Wackenhut Corp.,

793 S.W.2d 670, 677 (Tex. 1990) (op. on reh’g) (discussing choice-of-law

clauses), cert. denied, 498 U.S. 1048 (1991). See generally In re AutoNation,

Inc., 228 S.W.3d 663, 669 (Tex. 2007) (orig. proceeding) (refusing to

“superimpose” choice-of-law analysis onto the law regarding forum-selection

clauses). The governance clause at issue stated that in the event of “arbitration

or disputes,” the agreement would be “bound by the courts and rules, as

governed in USA.”      “[W]hen parties agree merely that courts in a particular

jurisdiction have venue or are proper venues for disputes and do not provide that

                                         8
the jurisdiction has exclusive venue, the agreement does not establish the

parties’ consent to the jurisdiction of the courts in question.” Vak v. Net Matrix

Solutions, Inc., 442 S.W.3d 553, 560 (Tex. App.—Houston [1st Dist.] 2014, no

pet.).

         The governance clause only establishes a general and very broad situs for

a dispute or arbitration—the “courts . . . as governed in USA”—and that the “rules

. . . as governed in USA” would bind the agreement.           The clause does not

indicate that Smartwise and KKT contractually agreed that any lawsuits would be

litigated in courts located in Texas, nor does it prohibit litigation in United States

jurisdictions other than Texas. See Sw. Intelecom, Inc. v. Hotel Networks Corp.,

997 S.W.2d 322, 325 (Tex. App.—Austin 1999, pet. denied); see also Phx.

Network, 177 S.W.3d at 612 n.6 (“If the parties have not agreed to an exclusive

forum, then the clause to which they agreed is not a forum-selection clause in the

first place.”). At most, the governance clause is a choice-of-law provision that

attempts to dictate what law would govern any dispute or arbitration. See Goad

v. Hancock Bank, No. 14-13-00861-CV, 2015 WL 1640530, at *2–3 (Tex. App.—

Houston [14th Dist.] Apr. 9, 2015, no pet.) (mem. op.). We conclude that the

governance clause is not a forum-selection clause that operates as a

presumptively valid contractual consent to personal jurisdiction in Texas by

Smartwise and the Chens. We overrule this portion of KKT’s first issue.

                                          9
                        III. PERSONAL JURISDICTION

       We now decide whether the trial court correctly declined to exercise

personal jurisdiction over Smartwise and the Chens. KKT argues on appeal that

Smartwise and the Chens “initiated extensive and purposeful commercial

contacts with Texas substantially related to [KKT’s] claims,” which justifies the

exercise of specific, personal jurisdiction over them. 4 See Suzlon Energy Ltd. v.

Trinity Structural Towers, Inc., 436 S.W.3d 835, 840 (Tex. App.—Dallas 2014, no

pet.) (“If the claims arise from or relate to the defendant’s forum-state contacts,

the plaintiff may rely on ‘specific jurisdiction,’ and the minimum-contact test

focuses on the relationship among the defendant, the forum state, and the

litigation.”).

                              A. SCOPE OF REVIEW

       In its second issue, KKT argues that the trial court should have excluded

the entirety of the Chens’ affidavits and not considered them in determining the

special appearance because they were not based on personal knowledge. In

determining a special appearance, a trial court may consider “the pleadings, any

stipulations made by and between the parties, such affidavits and attachments as

may be filed by the parties, the results of discovery processes, and any oral

testimony.” Tex. R. Civ. P. 120a(3). On appeal, we review all the evidence that

       4
        Because KKT solely addresses specific jurisdiction, we will do likewise.
See Leonard v. Salinas Concrete, LP, No. 05-14-01584-CV, 2015 WL 4456200,
at *1 n.1 (Tex. App.—Dallas July 21, 2015, no pet. h.).

                                        10
was properly before the trial court on the issue of personal jurisdiction.

See Michel v. Rocket Eng’g Corp., 45 S.W.3d 658, 667 (Tex. App.—Fort Worth

2001, no pet.).     Here, the trial court considered the entirety of the Chens’

affidavits, with the exception of the “I assume” sentences, over KKT’s personal-

knowledge objections. 5 If that ruling was in error and the trial court should have

struck the entirety of the Chens’ affidavits, we may not consider them in our

review of the trial court’s special-appearance determination. See CMC Steel

Fabricators, Inc. v. Red Bay Constructors, Inc., No. 14-13-00084-CV, 2014 WL
953351, at *6 (Tex. App.—Houston [14th Dist.] Mar. 11, 2014, no pet.) (mem.

op.).

        We review a trial court’s decision to admit evidence in the context of a

special appearance for an abuse of discretion.      Asshauer v. Farallon Capital

Partners, L.P., 319 S.W.3d 1, 12 (Tex. App.—Dallas 2008, no pet.). To that end,

KKT must show that the trial court’s failure to exclude the entirety of the Chens’

affidavits was, in fact, error and probably resulted in an improper ruling on the

special appearance. See id.; see also Tex. R. App. P. 44.1(a)(1).

        Affidavits submitted as evidence in a special-appearance proceeding “shall

be made on personal knowledge, shall set forth specific facts as would be

admissible in evidence, and shall show affirmatively that the affiant is competent

to testify.” Tex. R. Civ. P. 120a(3). Each affidavit stated that the affiant had

        5
        Smartwise and the Chens do not argue on appeal that the trial court erred
by striking the “I assume” sentences.

                                        11
“personal knowledge of the facts set forth herein, and they are all true and

correct.”   The affidavits set forth specific jurisdictional facts based on this

personal knowledge and, thus, showed that each affiant would be competent to

testify to those facts. In asserting that the alleged meetings occurring at the

DFW airport concerned obtaining FDA approval for Optima’s diagnostic device,

each affiant stated this was an assumption and that he or she did not have

personal knowledge of the purpose of the alleged meetings. KKT has pointed to

no authority supporting its argument that a single statement in an affidavit that is

based on an assumption vitiates the entire affidavit and renders every statement

insufficiently based on personal knowledge.        Cf. EOG Res., Inc. v. Wall,

160 S.W.3d 130, 134–35 (Tex. App.—Tyler 2005, no pet.) (recognizing

summary-judgment affidavit’s proponent may cure affidavit if trial court strikes

portions of affidavit for violation of personal-knowledge requirement). Indeed, the

trial court specifically noted that, with the exception of the “I assume” sentences,

the affidavits were explicitly based on the affiants’ personal knowledge. In the

absence of such authority, we cannot conclude that the “I assume” sentences

rendered the entirety of the Chens’ affidavits inadmissible under rule 120a(3)

when the remainder of the affidavits provided facts supporting the affiants’

assertions of their personal knowledge of all other averments. The trial court did

not err by failing to strike the entirety of the Chens’ affidavits, and we overrule

KKT’s second issue. We will consider the Chens’ affidavits, with the exception of

                                        12
the “I assume” sentences, in our review of the trial court’s special-appearance

determination.

                            B. STANDARD OF REVIEW

                              1. Appellate Prism

      The standards of review and the burdens of proof applicable to our review

of a trial court’s ruling on a special appearance are well established.       We

determine whether a trial court has personal jurisdiction over a defendant under a

de novo standard. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789,

794 (Tex. 2002); Fish v. Tandy Corp., 948 S.W.2d 886, 891–92 (Tex. App.—Fort

Worth 1997, writ denied). A plaintiff has the initial burden to plead sufficient

allegations to bring a nonresident within the provisions of the Texas long-arm

statute. Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010);

Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex.

2009).   Once a plaintiff sufficiently pleads such jurisdictional allegations, the

burden shifts to the defendant to negate the bases of personal jurisdiction

asserted by the plaintiff. Kelly, 301 S.W.3d at 658; Moki Mac River Expeditions

v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007).

      In determining whether the nonresident defendant sufficiently negated the

pleaded bases for personal jurisdiction, the trial court frequently must resolve

questions of fact. BMC Software, 83 S.W.3d at 794. While we review de novo

the trial court’s legal conclusion that personal jurisdiction does not exist, any

findings of fact supporting the conclusion are reviewed for factual and legal

                                       13
sufficiency.    Id.     Because the trial court did not enter findings of fact and

conclusions of law, we infer that the trial court made all fact findings that have

support in the record and that are necessary to uphold the ruling. 6 See CNOOC

Se. Asia Ltd. v. Paladin Res. (SUNDA) Ltd., 222 S.W.3d 889, 894 (Tex. App.—

Dallas 2007, pets. denied) (op. on reh’g); see also Moki Mac, 221 S.W.3d at 574;

BMC Software, 83 S.W.3d at 794–95. If the trial court’s inferred findings are

supported by sufficient evidence, we must decide as a matter of law whether

those facts negate all bases for personal jurisdiction. BMC Software, 83 S.W.3d

at 794.

                         2. Long-Arm Statute and Due Process

      A special appearance challenges the trial court’s personal jurisdiction over

a defendant.          Texas courts may not exercise personal jurisdiction over a

nonresident defendant unless federal due process requirements and the Texas

long-arm statute are satisfied. Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (West

2015); Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 412–13 &

n.7, 104 S. Ct. 1868, 1871 & n.7 (1984). The Texas long-arm statute and the

requirements of due process are coextensive; thus, the statute is satisfied if the

exercise   of    personal     jurisdiction   comports   with   federal   due   process.

See Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C.,

      6
       Any statements made by the trial court at the special-appearance hearing
are not the equivalent of findings of fact or conclusions of law. See Amend v.
Watson, 333 S.W.3d 625, 628 n.2 (Tex. App.—Dallas 2009, no pet.).

                                             14
815 S.W.2d 223, 226 (Tex. 1991). Federal due process is satisfied if (1) the

nonresident defendant has “minimum contacts” with Texas and (2) the exercise

of personal jurisdiction over the nonresident defendant does not offend

“traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Wash.,

Office of Unemp’t Comp. & Placement, 326 U.S. 310, 316, 66 S. Ct. 154, 158

(1945).

                                 C. APPLICATION

              1. Sufficient Pleading Invoking Long-Arm Statute

      We are to determine first whether KKT met its initial burden to plead

sufficient allegations to bring Smartwise and the Chens—all undisputedly

nonresidents—within the provisions of the Texas long-arm statute, without

reaching the merits of those allegations. See Kelly, 301 S.W.3d at 658. Thus,

KKT was required to plead a “connection between the defendants’ alleged

wrongdoing and the forum state.” Id. at 655. Here, KKT alleged that Monica

bought a 10% ownership interest in Optima, KKT’s parent company, based on

the pending FDA approval for the diagnostic device 7 and that Smartwise and the

Chens could reasonably anticipate that FDA approval would result in Smartwise,

Optima, and KKT “offering for [sale] and selling the [diagnostic] device

throughout the United States[,] which includes the state of Texas.” KKT also

      7
         KKT repeatedly asserts that Monica owned 10% of Optima; but the
evidence shows that Smartwise owned 10% of Optima, which KKT recognizes in
its brief.

                                        15
alleged that Smartwise, Optima, and KKT contracted with Emergo Group, located

in Austin, Texas, “to get FDA approval of their devices” and met in Texas

“numerous times” to discuss the FDA approval. Finally, KKT alleged that Darryl,

although not a resident, conducted business in Texas.

      Smartwise and the Chens do not argue that KKT failed to plead sufficient

allegations justifying the exercise of personal jurisdiction. Therefore, we assume

without deciding that KKT met its threshold burden.

                      2. Due Process: Minimum Contacts

      Based on KKT’s allegations arguably raising the Texas long-arm statute

and specific jurisdiction, the burden then shifted to Smartwise and the Chens to

negate all pleaded jurisdictional bases and, thereby, establish that the trial court’s

exercise of personal jurisdiction would violate their rights to due process.

Retamco, 278 S.W.3d at 337; see Schlobohm v. Schapiro, 784 S.W.2d 355, 356

(Tex. 1990) (recognizing jurisdiction over nonresident supportable if long-arm

statute authorizes such jurisdiction and it is consistent with due-process

guarantees). Smartwise and the Chens assert that exercising specific jurisdiction

over them under the Texas long-arm statute would violate due process because

Smartwise’s 10% ownership interest in Optima and Optima’s attempts to gain

FDA approval for its diagnostic device are insufficient to establish Smartwise’s or

the Chens’ minimum contacts with Texas.

      When, as here, a plaintiff asserts specific jurisdiction, the minimum-

contacts analysis focuses on the relationship between the defendant, the forum,

                                         16
and the litigation. IRA Res., Inc. v. Griego, 221 S.W.3d 592, 596 (Tex. 2007).

Minimum contacts are sufficient when a nonresident defendant “purposefully

avails itself of the privilege of conducting activities within the forum State, thus

invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U.S.
235, 253, 78 S. Ct. 1228, 1240 (1958). In determining purposeful availment, we

consider (1) the defendant’s own actions but not the unilateral activity of another

party, (2) whether the defendant’s actions were purposeful rather than “random,

isolated, or fortuitous,” and (3) whether the defendant sought “some benefit,

advantage, or profit” by availing itself of the privilege of conducting business in

Texas. Michiana, 168 S.W.3d at 785. The nonresident defendant’s contacts are

considered as a whole and not in isolation, focusing on the quality and not the

quantity of the contacts.     Retamco, 278 S.W.3d at 339; Guardian Royal,
815 S.W.2d at 230 n.11.

      Purposeful availment alone does not support the exercise of specific

jurisdiction unless the defendant’s potential liability arises from or relates to the

forum contacts. Guardian Royal, 815 S.W.2d at 228; Glencoe Capital Partners

II, L.P. v. Gernsbacher, 269 S.W.3d 157, 167 (Tex. App.—Fort Worth 2008, no

pet.). In short, there must be a substantial connection between the defendant’s

contacts with the forum and the operative facts of the litigation.       Moki Mac,
221 S.W.3d at 584.

      Here, the Chens stated that neither they nor Smartwise participated in the

alleged DFW meetings or had any involvement in the FDA-approval process for

                                         17
Optima’s diagnostic device.    Monica and Salena have never been to Texas.

Darryl was last in Texas in 2012 when he attended the wedding of his wife’s

relative and visits Texas approximately once a year for his wife’s “family

gatherings.”   The Chens and Smartwise have never conducted business in

Texas or transacted business with a Texas entity. Smartwise—which acts only

through the Chens as its board of directors—had no role in Optima’s business

affairs.   The only Texas contact noted by Smartwise or the Chens is their

acknowledgement that they have “done business with corporations who do

business on a world scale—and who thus do business in Texas as well.”

Further, KKT’s allegations against Smartwise and the Chens relate to the letter

agreement between KKT and Smartwise under which Smartwise basically

agreed to market KKT’s products in China and assist KKT with regulatory filings

in China. No allegations specifically relate to Optima, its contract with Emergo

Group, or the alleged meetings in Texas presumably between KKT and Optima

about the diagnostic device.

       These facts do not establish that Smartwise or the Chens purposefully did

some act or consummated some transaction in Texas and suggest nothing more

than mere random or fortuitous contacts that cannot confer specific, personal

jurisdiction on a nonresident defendant.    KKT’s attempts to rely on Optima’s

contacts with Texas are unavailing as our focus is solely on the Texas contacts

made by Smartwise or the Chens. See Burger King, 471 U.S. at 475, 105 S. Ct.

at 2183–84; see also Suzlon Energy, 436 S.W.3d at 840–43 (holding nonresident

                                       18
parent company lacked sufficient minimum contacts to exercise personal

jurisdiction over it on breach-of-contract claim by subsidiary); Davey v. Shaw,

225 S.W.3d 843, 854–55 (Tex. App.—Dallas 2007, no pet.) (holding corporate

structure could not be disregarded to confer personal jurisdiction on nonresident

corporation, which owned 100% of Texas corporation, absent necessary alter-

ego findings of fraud or injustice). Similarly, Chambers’s contract with KKT and

its venue provision have no bearing on whether Smartwise or the Chens had the

requisite minimum contacts with Texas to satisfy due process. Additionally, there

is no evidence that KKT’s allegations against Smartwise and the Chens

regarding the letter agreement are substantially connected to any of Smartwise’s

and the Chens’ alleged, yet tenuous, contacts with Texas, which also defeats the

exercise of specific, personal jurisdiction.   See Waller Marine, Inc. v. Magie,

No. 14-14-00181-CV, 2015 WL 1456879, at *4–5 (Tex. App.—Houston [14th

Dist.] Mar. 26, 2015, no pet.); Dresser-Rand Grp., Inc. v. Centauro Capital,

S.L.U., 448 S.W.3d 577, 586–88 (Tex. App.—Houston [14th Dist.] 2014, no pet.).

We conclude that Smartwise and the Chens established that the trial court’s

exercise of personal jurisdiction over them would violate their rights to due

process based on the lack of evidence of sufficient minimum contacts.

See generally Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (long-arm statute

delineating under what circumstances a nonresident may be considered to

conduct business in Texas for personal-jurisdiction purposes in a suit on

business transaction or tort). As a result, the facts before the trial court negated

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all bases for jurisdiction asserted by KKT. We overrule the remaining portion of

KKT’s first issue. 8

                                IV. CONCLUSION

       Because the record supported the trial court’s inferred findings and

conclusion that exercising specific, personal jurisdiction over Smartwise and the

Chens would offend due process based on the absence of minimum contacts, we

affirm the trial court’s order. See Tex. R. App. P. 43.2(a).

                                                    /s/ Lee Gabriel

                                                    LEE GABRIEL
                                                    JUSTICE

PANEL: GARDNER, WALKER, and GABRIEL, JJ.

DELIVERED: August 25, 2015

       8
       Because we have found there was insufficient evidence of Smartwise’s or
the Chens’ minimum contacts with Texas, we need not address whether the
exercise of personal jurisdiction would comport with traditional notions of fair play
and substantial justice. See, e.g., Tex. R. App. P. 47.1; Wilson v. Belin, 20 F.3d
644, 650 n.7 (5th Cir.), cert. denied, 513 U.S. 930 (1994).

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