Court Opinion

ID: 4281130
Source: CourtListenerOpinion
Date Created: 2018-06-05 04:49:42.153773+00
Date Added: 2024-06-11T14:07:29.299716
License: Public Domain

ACCEPTED
                                                                          05-17-01332-CV
                                                                FIFTH COURT OF APPEALS
                                                                         DALLAS, TEXAS
                                                                         6/4/2018 3:43 PM
                                                                               LISA MATZ
                                                                                   CLERK

                              IN THE
                        COURT OF APPEALS
                FIFTH COURT OF APPEALS DISTRICT          FILED IN
                                                  5th COURT OF APPEALS
                         DALLAS, TEXAS                DALLAS, TEXAS
__________________________________________________________________
                                                  6/4/2018 3:43:39 PM
                                                        LISA MATZ
                        NO. 05-17-01332-CV                Clerk
__________________________________________________________________

JACK CRAIG EFFEL, Appellant,

vs.

ROBERT G. ROSBERG, Appellee.
__________________________________________________________________

          Interlocutory Appeal from the County Court at Law No. 5
                          of Dallas County, Texas
                       Hon. Mark Greenberg, presiding
__________________________________________________________________

                       BRIEF FOR APPELLEE
__________________________________________________________________

Charles W. McGarry
Texas Bar No. 13610650
LAW OFFICE OF CHARLES McGARRY
701 Commerce Street, Suite 400
Dallas, Texas 75202
 (214) 748-0800
(214) 748-9449 fax
cmcgarry@ix.netcom.com

ATTORNEY FOR APPELLEE
                                        TABLE OF CONTENTS

                                                                                                                 Page

INDEX OF AUTHORITIES ................................................................................ ii

STATEMENT REGARDING ORAL ARGUMENT ………………...……...…. iv

ISSUES PRESENTED ........................................................................................... iv

THE RECORD ON APPEAL ............................................................................... iv

STATEMENT OF FACTS ................................................................................... 1

SUMMARY OF THE ARGUMENT .................................................................. 3

ARGUMENTS AND AUTHORITIES

         The Trial Court Correctly Denied Jack Effel’s Special Appearance
         Because His Contacts With Texas Justified the Exercise of Both
         Specific and General Jurisdiction. …………………………..……………. 4

PRAYER ............................................................................................................... 11

CERTIFICATE OF SERVICE .............................................................................. 12

CERTIFICATE OF COMPLIANCE …….……………………………………… 13

                                      INDEX OF AUTHORITIES

CASES                                                                                                        PAGE

Am. Type Culture Collection v. Coleman, 83 S.W.3d 801 (Tex. 2002) ………… 4

BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) …………. 4

Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) ………………………… 6

    APPELLEE’S BRIEF - PAGE   ii
Coastal Transp. Co., Inc. v. Crown Cent. Petro Corp.,
     136 S.W.3d 227 (Tex. 2004) …………………………….………….…….. 9

Daimler AG v. Bauman, 134 S. Ct. 746 (2014) ………………………………….. 10

Flanagan v. Royal Body Care, Inc., 232 S.W.3d 369
     (Tex. App.—Dallas 2007, pet. denied) ……………………….…………….. 1

Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) ..…….. 10

Guardian Royal Exch. Assurance Ltd. v English China Clays, P.L.C.,
     815 S.W.2d 223 (Tex. 1991) …………………………………….………. 6, 7

Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199 (Tex. 1985) ……….……… 7

Kelly v. General Interior Constr., Inc., 301 S.W.3d 653 (Tex. 2010) …………….. 7

McKanna v. Edgar, 388 S.W.2d 927 (Tex. 1965) ……………………..………… 7

Northern Frac Proppants, II, LLC v. 2011 NF Holdings, LLC,
      2017 Tex. App. LEXIS 7100 (Tex. App. – Dallas 2017, no pet.) ………… 1

Retamco Operating, Inc. v. Republic Drilling Co.,
     278 S.W.3d 333 (Tex. 2009) ……………………………….……………… 9

Renfro Drug Co. v. Lewis, 149 Tex. 507, 235 S.W.2d 609 (1950) ………………. 5

Searcy v. Parex Res., Inc., 496 S.W.3d 58 (Tex. 2016) …………………………. 10

U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760 (Tex. 1977),
     cert. denied, 434 U.S. 1063 (1978) ………………………………..………. 5

Wayne Lensing & Lefthander Mktg. v. Card, 417 S.W.3d 152
     (Tex. App. – Dallas 2013, no pet.) ………………………..……………….. 8

World-Wide Volkswagen Corp. v. Woodson,
     444 U.S. 286, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980) ………….………… 6

  APPELLEE’S BRIEF - PAGE   iii
Other Authorities

TEX. CIV. PRAC. & REM. CODE §17.041 et seq ………………………………… 5, 6

TEX. PROP. CODE §5.072 ………………………………………………………… 11

TEX. PROP. CODE §41.002(a) ………………………………….………………… 10

TEX. R. CIV. P. 120a ………..…………………………………………………… 2

TEX. R. CIV. P. 201 …………………………………………………………… 3, 10

                     STATEMENT REGARDING ORAL ARGUMENT

        Appellant has not requested oral argument and the case does not require it.

However, should appellant later request oral argument, appellee reserves the right

to present argument in response.

                                    ISSUES PRESENTED

1. The Trial Court Correctly Denied Jack Effel’s Special Appearance
Because His Contacts With Texas Justified the Exercise of Both Specific and
General Jurisdiction.

                                  THE RECORD ON APPEAL

        The record on appeal consists a Reporter’s Record in one volume, (cited as

“RR __”), including two exhibits. (cited as “DX ___”), a Clerk’s Record in one

volume (cited as “CR__”) and a Supplemental Clerk’s Record in one volume (cited

as “SCR ___”).

   APPELLEE’S BRIEF - PAGE   iv
                              IN THE
                        COURT OF APPEALS
                FIFTH COURT OF APPEALS DISTRICT
                         DALLAS, TEXAS
__________________________________________________________________

                        NO. 05-17-01332-CV
__________________________________________________________________

JACK CRAIG EFFEL, Appellant,

vs.

ROBERT G. ROSBERG, Appellee.
__________________________________________________________________

          Interlocutory Appeal from the County Court at Law No. 5
                          of Dallas County, Texas
                       Hon. Mark Greenberg, presiding
__________________________________________________________________

                      BRIEF FOR APPELLEE
__________________________________________________________________

TO THE HONORABLE COURT OF APPEALS:

           Appellee Robert G. Rosberg respectfully submits this brief in support of the

trial court’s order denying appellant’s special appearance.

                                STATEMENT OF FACTS

           The “facts” in a special appearance include the factual allegations made by

the plaintiff in his petition and in his response to the defendant’s special

appearance, Flanagan v. Royal Body Care, Inc., 232 S.W.3d 369, 374 (Tex.

App.—Dallas 2007, pet. denied); Northern Frac Proppants, II, LLC v. 2011 NF

APPELLEE’S BRIEF - PAGE   1
Holdings, LLC, 2017 Tex. App. LEXIS 7100 (Tex. App. – Dallas 2017, no pet), as

well as the evidence heard by the trial court at the hearing on the defendant’s

special appearance. TEX. R. CIV. P. 120a (3).

           The plaintiff alleged in this case that, after he had obtained a money

judgment against Lena Effel, her nephew Jack Effel removed her from Texas and

brought her to live with him in Las Vegas. At the same time, he assumed control of

her assets and moved them from Texas to Las Vegas. (CR 18-9).

           The plaintiff also alleged that Jack Effel co-owned a home in Dallas County,

Texas, and was claiming a homestead exemption on the home. (CR 20).

           Jack Effel’s Special Appearance was accompanied by his affidavit. He stated

in his affidavit that he “claimed no interest” in the house he was alleged to own. He

also stated, in conclusory fashion, that he does “not conduct any business in Texas”

and has “not committed a tort in whole or in part in the State of Texas.” (CR 14).

However, he never denies the allegation that he took custody of Lena Effel’s assets

and removed them from Texas.

           At the hearing on Jack Effel’s special appearance, the plaintiff introduced

evidence that Jack and Henry Effel co-own a residential property in Dallas and

claim it as a homestead. (RR 8, D. Ex. 1, 2). Jack Effel never testified or

APPELLEE’S BRIEF - PAGE   2
introduced any evidence1. (RR 4-8). In his brief, he denies that the property is his

homestead (Appellant’s Brief, p. 6), but he never made that denial in the trial court.

           Additionally, this Court may take judicial notice of the fact that the address

Jack Effel is using for this litigation, 3700 West Flamingo Road, Las Vegas,

Nevada 89103, is the address of the Rio Hotel. https://www.caesars.com/rio-las-

vegas TEX. R. CIV. P. 201.

           Appendices B and C to Appellant’s Brief are from the original case against

Lena Effel and are not part of the record in this case.

                               SUMMARY OF THE ARGUMENT

           The trial court correctly denied Jack Effel’s special appearance. Allegations

that Jack Effel acted in Texas to remove property from Texas to Las Vegas and

that the removal of the property constituted a fraudulent transfer is sufficient to

establish specific jurisdiction, and Jack Effel did not even controvert, much less

negate, these allegations. His affidavit statements that he “did no business” and

“committed no tort” in Texas were wholly conclusory.

           Allegations that Jack Effel owned a homestead in Dallas County is sufficient

to establish general jurisdiction. Jack’s affidavit statement that he “claims no

interest” in the home was controverted by evidence introduced at the special

1
  Although Effel claims in his brief to have testified at the hearing, the record shows that he was never sworn in and
that the court had invited him to “argue” his case when he spoke. (RR 4).

APPELLEE’S BRIEF - PAGE   3
appearance hearing showing that he does indeed own a home in Dallas County and

was claiming a homestead exemption. Jack’s statement that he “claims no interest”

in the house is both conclusory and ineffective under the statute of frauds to

remove his name from the title to the house.

                              ARGUMENTS AND AUTHORITIES

1. The Trial Court Correctly Denied Jack Effel’s Special Appearance
Because His Contacts With Texas Justified the Exercise of Both Specific and
General Jurisdiction.

I. STANDARD OF REVIEW

           Whether a court has personal jurisdiction over a defendant is a question of

law. But in resolving this question of law, the trial court must frequently resolve

questions of fact. On appeal, the trial court's determination to grant or deny a

special appearance is subject to de novo review, but appellate courts may be called

upon to review the trial court's resolution of a factual dispute. Am. Type Culture

Collection v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002); BMC Software Belg.,

N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002).

           If a trial court enters an order denying a special appearance, and the trial

court issues findings of fact and conclusions of law, the appellant may challenge

the fact findings on legal and factual sufficiency grounds. BMC Software, 83
S.W.3d at 794. When the trial court does not issue findings of fact, reviewing

courts should presume that the trial court resolved all factual disputes in favor of

APPELLEE’S BRIEF - PAGE   4
its judgment. Coleman, 83 S.W.3d at 806. When the appellate record includes the

reporter's and clerk's records, these implied findings are not conclusive and may be

challenged for legal and factual sufficiency in the appropriate appellate court. BMC

Software, 83 S.W.3d at 795. Where the appellant fails to challenge the factual

sufficiency of the evidence, this Court must determine only whether some evidence

supports the judgment and these implied findings of fact; in such a legal

sufficiency review “it is proper to consider only that evidence most favorable to the

issue and to disregard entirely that which is opposed to it or contradictory in its

nature.” Renfro Drug Co. v. Lewis, 149 Tex. 507, 513, 235 S.W.2d 609, 613

(1950).

           In this case, no findings of fact were made by the trial court. This Court must

therefore presume that the trial court resolved all factual disputes in favor of

exercising jurisdiction. Because the appellant has not challenged the factual

sufficiency of the evidence in support of the presumed findings, this Court may

only conduct a legal sufficiency review and must consider only that evidence

which supports the exercise of jurisdiction.

II. GENERAL AND SPECIFIC JURISDICTION

           The Texas long-arm statute governs Texas courts' exercise of jurisdiction

over nonresident defendants. See TEX. CIV. PRAC. & REM. CODE §§ 17.041-.045.

Jurisdiction under the Texas long-arm statute reaches as far as the federal

APPELLEE’S BRIEF - PAGE   5
constitutional requirements of due process will permit. U-Anchor Advertising, Inc.

v. Burt, 553 S.W.2d 760 (Tex. 1977), cert. denied, 434 U.S. 1063, 55 L. Ed. 2d
763, 98 S. Ct. 1235 (1978). Due process imposes two requirements: (1) the

nonresident defendant must have purposely established “minimum contacts” with

the forum state; and (2) the exercise of jurisdiction must comport with “fair play

and substantial justice.” Guardian Royal Exch. Assurance Ltd. v English China

Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991).

           The minimum-contacts analysis requires that a defendant “purposefully

avail” itself of the privilege of conducting activities within Texas, thus invoking

the benefits and protections of our laws. Burger King Corp. v. Rudzewicz, 471 U.S.
462, 475, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985). The defendant's activities,

whether they consist of direct acts within Texas or conduct outside Texas, must

justify a conclusion that the defendant could reasonably anticipate being called into

a Texas court. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 62
L. Ed. 2d 490, 100 S. Ct. 559 (1980). A defendant is not subject to jurisdiction here

if its Texas contacts are random, fortuitous, or attenuated. See Guardian, 815
S.W.2d at 226. Nor can a defendant be haled into a Texas court for the unilateral

acts of a third party. Id. It is the quality and nature of the defendant's contacts,

rather than their number, that is important to the minimum-contacts analysis. Id. at

230 n.11. The Texas long-arm statute permits the exercise of jurisdiction over a

APPELLEE’S BRIEF - PAGE   6
defendant who commits a tort in whole or in part in Texas. See TEX. CIV. PRAC. &

REM. CODE §17.042.

           A defendant's contacts with a forum can give rise to either specific or

general jurisdiction. For a court to exercise specific jurisdiction over a nonresident

defendant, two requirements must be met: (1) the defendant's contacts with the

forum must be purposeful, and (2) the cause of action must arise from or relate to

those contacts. See Guardian, 815 S.W.2d at 227. General jurisdiction allows a

forum to exercise jurisdiction over a defendant even if the cause of action did not

arise from or relate to a defendant's contacts with the forum. Id. at 228. General

jurisdiction is present when a defendant's contacts with a forum are “continuous

and systematic,” a more demanding minimum-contacts analysis than specific

jurisdiction. Id.

III. THE BURDEN OF PROOF

           The plaintiff bears the initial burden of pleading allegations sufficient to

bring a nonresident defendant within the provisions of the long-arm statute.

McKanna v. Edgar, 388 S.W.2d 927, 930 (Tex. 1965). But upon filing a special

appearance, the nonresident defendant assumes the burden to negate all the bases

of personal jurisdiction alleged by the plaintiff. Kawasaki Steel Corp. v. Middleton,

699 S.W.2d 199, 203 (Tex. 1985). The defendant can do this: (i) factually, by

presenting evidence establishing that its Texas contacts are insufficient and thus

APPELLEE’S BRIEF - PAGE   7
effectively disproving the plaintiff's allegations, or (ii) legally, by showing that

even if the plaintiff's alleged facts are true they are legally insufficient to support

jurisdiction. Kelly v. General Interior Constr., Inc., 301 S.W.3d 653, 659 (Tex.

2010).

           Appellant erroneously argues that the plaintiff had the burden of proving

jurisdiction, and that he failed to satisfy that burden. (Appellant’s Brief, p. 16). He

never claims to have negated anything.

IV. JACK EFFEL FAILED TO NEGATE THE FACTS ESTABLISHING
SPECIFIC JURISDICTION

           The plaintiff alleged in this case that, after he had obtained a money

judgment against Lena Effel, her nephew Jack Effel removed Lena from Texas and

brought her to live with him in Las Vegas. At the same time, Jack assumed control

of Lena’s assets and moved them from Texas to Las Vegas. (CR 18-9). Plaintiff

specifically alleged that Jack Effel had an agreement with his brother Henry to

transfer Lena’s assets and that Jack performed his part of the agreement in Texas.

(CR 20). Plaintiff alleged that the Jack’s taking Lena’s assets left Lena insolvent

and that the transfer was fraudulent as to her creditors, including the plaintiff. (CR

19-20).

           These allegations are sufficient to establish specific jurisdiction over Jack

Effel. This Court has previously held that a non-resident who comes to Texas and

removes property to his home state purposefully availed himself of Texas for

APPELLEE’S BRIEF - PAGE   8
purposes of resulting conversion and civil theft claims. Wayne Lensing &

Lefthander Mktg. v. Card, 417 S.W.3d 152, 158-61 (Tex. App. – Dallas 2013, no

pet.). It should be no different for a fraudulent transfer claim arising out of the

removal of property.

           The Supreme Court has even more broadly held that a nonresident who,

without physically entering the State, acquires Texas property purposefully availed

itself of Texas for purposes of a fraudulent transfer claim arising from the transfer.

Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 339-40 (Tex.

2009).

           Jack Effel never attempted to negate these allegations, either in his affidavit

or by testifying at the special appearance hearing. The global assertions in his

affidavit that he does “not conduct any business in Texas” and has “not committed

a tort in whole or in part in the State of Texas” (CR 14) are clearly conclusory and

constitute no evidence. See Coastal Transp. Co., Inc. v. Crown Cent. Petro Corp.,

136 S.W.3d 227, 233 (Tex. 2004) (conclusory statements are no evidence). He

never denied taking control of Lena’s assets in Texas and removing them to Las

Vegas.

           There is legally sufficient evidence to support an implied finding that Jack

Effel failed to negate the claim that he fraudulently transferred property from

APPELLEE’S BRIEF - PAGE   9
Texas to himself in Las Vegas. The trial court properly denied his special

appearance on this basis.

V. JACK EFFEL FAILED TO NEGATE THE FACTS ESTABLISHING
GENERAL JURISDICTION

           The plaintiff also alleged that Jack Effel co-owned a home in Dallas County,

Texas, and was claiming a homestead exemption on the home. (CR 20). Jack

Effel’s affidavit states simply that he “claims no interest” in the home. (CR 14).

However, at the special appearance hearing, the plaintiff introduced evidence from

the Dallas County Tax Assessor showing that Jack Effel had indeed claimed a

homestead exemption on property he co-owned in Dallas County, Texas. (RR 8. D.

Ex. 1, 2). Jack Effel did not testify or otherwise introduce any evidence in an

attempt to negate it.

           A homestead must be used as a home. TEX. PROP. CODE §41.002(a). Owning

a home in the forum state is the very epitome of having “continuous and

systematic” contacts. Both the Texas and U.S. Supreme Courts have said that the

test for general jurisdiction is whether the defendant’s “affiliations with the state

are so continuous and systematic as to render it essentially at home in the forum

state.” Searcy v. Parex Res., Inc., 496 S.W.3d 58, 72 (Tex. 2016) citing Daimler

AG v. Bauman, 134 S. Ct. 746, 761, 187 L. Ed. 2d 624 (2014) and Goodyear

Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S. Ct. 2846, 2851, 180
L. Ed. 2d 796 (2011).

APPELLEE’S BRIEF - PAGE   10
           Additionally, this Court may take judicial notice of the fact that the address

Jack Effel is using for this litigation, 3700 West Flamingo Road, Las Vegas,

Nevada 89103, is the address of the Rio Hotel. https://www.caesars.com/rio-las-

vegas TEX. R. CIV. P. 201. The house in Dallas County is the only home that the

evidence shows is owned by Jack Effel.

           The trial court received evidence at the special appearance hearing, but Jack

Effel never testified or otherwise attempt to negate these allegations. His attempt to

simply disclaim any interest in the Dallas County homestead in his pleadings is

ineffective to convey his interest in the property. TEX. PROP. CODE §5.072

(conveyance of property must be in writing). They also contradict the county

records that are conclusive on the subject.

           There is legally sufficient evidence to support an implied finding that Jack

Effel failed to negate the claim that he claimed a homestead on real property he

owns in Dallas County, Texas. The trial court also properly denied his special

appearance on this basis.

           WHEREFORE, PREMISES CONSIDERED, appellee prays that this Court

affirm the trial court’s order denying appellant’s special appearance, and that he

have and recover his costs of court and all further relief, at law or in equity, to

which he may be justly entitled.

APPELLEE’S BRIEF - PAGE   11
                                      Respectfully submitted,

                                      LAW OFFICE OF CHARLES McGARRY

                                      /s/ Charles W. McGarry
                                      ___________________________________
                                      Charles W. McGarry
                                      Texas Bar No. 13610650
                                      701 Commerce Street, Suite 400
                                      Dallas, Texas 75202
                                      (214) 748-0800
                                      (214) 748-9449 fax
                                      cmcgarry@ix.netcom.com

                                      ATTORNEY FOR APPELLEE

                                CERTIFICATE OF SERVICE

           This is to certify that on this 4th day of June, 2018, a true and correct copy of

the foregoing brief was delivered to the following party in accordance with the

Texas Rules of Appellate Procedure:

Jack C. Effel
3700 West Flamingo Road.
Las Vegas, Nevada 89103

                                            /s/ Charles W. McGarry
                                            _______________________________
                                            Charles W. McGarry

APPELLEE’S BRIEF - PAGE   12
                               CERTIFICATE OF COMPLIANCE

           I hereby certify that I prepared the foregoing brief using Microsoft Word

2010® software, a 14-point Times New Roman font for all text and a 12-point

Times New Roman font for any footnotes. According to that program’s word-

count function, the sections covered by TRAP 9.4(i)(1) contain 2,341 words,

including footnotes.

                                           /s/ Charles W. McGarry
                                           Charles W. McGarry

APPELLEE’S BRIEF - PAGE   13