Court Opinion

ID: 4455655
Source: CourtListenerOpinion
Date Created: 2019-11-14 11:12:48.045869+00
Date Added: 2024-06-11T14:45:24.366862
License: Public Domain

Modify and affirm as modified; Opinion Filed November 12, 2019

                                            In The
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                     No. 05-19-00331-CV

                 CREATION TECHNOLOGIES TEXAS, LLC, Appellant
                                   V.
                     AEG POWER SOLUTIONS B.V., Appellee

                      On Appeal from the 14th Judicial District Court
                                  Dallas County, Texas
                          Trial Court Cause No. DC-18-015065

                            MEMORANDUM OPINION
                          Before Justices Myers, Osborne, and Nowell
                                   Opinion by Justice Nowell
       This is an accelerated interlocutory appeal from an order granting the special appearance

filed by AEG Power Solutions B.V. (“AEG B.V.”). In four issues, Creation Technologies Texas,

LLC (“Creation”) asserts the trial court erred by granting AEG B.V.’s special appearance because

AEG B.V. is subject to general and specific jurisdiction in Texas. We modify the trial court’s

order and affirm as modified.

                          BACKGROUND AND PROCEDURAL HISTORY

       In September of 2012, Creation, a Texas company, entered into a Manufacturing

Agreement with a Texas-based company, AEG Power Solutions USA, Inc., subsequently known

as 3W Power Solutions USA, Inc. (“AEG USA”). In line with the Manufacturing Agreement,

AEG USA placed purchase orders with Creation in June of 2013 for the manufacture of solar
inverters, which convert the output of a solar panel into a utility frequency. These purchase orders

were placed, at least in part, to fulfill an order from another company, Power Max Co., Ltd., which

was in the business of, among other things, developing and selling solar electric power plants in

Japan to investors. Power Max, however, failed to pay AEG USA, and by January of 2014 AEG

USA owed Creation over $2 million under the terms of the Manufacturing Agreement. In February

of 2014, AEG USA entered into a Security Agreement with Creation to avoid termination of the

Manufacturing Agreement. The Security Agreement, executed in the Netherlands on AEG USA’s

behalf by Jeffrey Casper, a non-Texas resident, gave Creation a continuing security interest in

AEG USA’s accounts, equipment, and inventory.

           AEG USA, meanwhile, sued Power Max in a Texas court in June of 2015 for breach of

contract, and the case was removed to federal court in October of 2015. AEG USA subsequently

settled the case, and the proceeds of the settlement were paid to Creation, which had intervened in

the case.1

           On October 3, 2018, Creation filed the underlying lawsuit against AEG B.V.; AEG USA;

AEG Power Solutions GmbH (“AEG Germany”); AEG Power Solutions Sdn Bhd, AEG Power

Solutions’ Malaysian subsidiary (“AEG Malaysia”); 3W Power S.A., AEG Power Solutions’

Luxembourg-based holding company (“AEG Luxembourg”); and Jeffrey Casper who, at the time

of the events that form the basis for this suit, was a director of AEG USA and AEG Power

Solutions’2 chief restructuring officer and chief financial officer (collectively, “the AEG

Defendants”).            This lawsuit seeks millions of dollars allegedly owed to Creation for the

      1
        We take judicial notice of the United States District Court for the Eastern District of Texas, Sherman Division’s November 7, 2016 corrected
memorandum opinion and order granting in part plaintiff’s motion for summary judgment and denying defendant’s motion for partial summary
judgment; the court’s order of March 21, 2017; the parties’ joint status report of March 31, 2017; and the court’s agreed order of dismissal of June
16, 2017. See, e.g., 3W Power USA, Inc. f/k/a AEG Power Solutions USA, Inc. v. PowerMax Co., Ltd., Case No. 4:15-CV-677, 2016 WL 6581996
(E. D. Tex. Nov. 7, 2016).
      2
        Casper’s declaration attached to AEG B.V.’s special appearance states: “AEG Power Solutions is comprised of AEG Power Solutions B.V.
and its approximately 23 subsidiaries, which include AEG Power Solutions GmbH and 3W Power USA, Inc.” AEG Power Solutions is not a party
to the lawsuit.

                                                                       –2–
manufacture of commercial solar inverters under theories of alter ego, breach of the written

Security Agreement, fraud, fraudulent transfer, and negligent misrepresentation. Creation filed an

amended petition on November 5, 2018.3 AEG B.V. and AEG Germany filed special appearances

that argued Creation had not alleged sufficient contacts with Texas to warrant the exercise of

personal jurisdiction.

          According to Casper’s declaration, AEG Power Solutions is comprised of AEG B.V. and

its twenty-three subsidiaries, which include AEG Germany and AEG USA. AEG B.V. is a Dutch

company headquartered in Zwanenburg, Netherlands. AEG B.V. is the operational holding

company, which primarily provides administrative services to the various AEG subsidiaries;

“[a]lthough this entity does some sales and service sales [sic] activities, it does most of the central

supporting and administrative activities. The executive management, i.e., CEO and CFO, is

centralized within [AEG B.V.].” AEG B.V. provides some oversight to AEG USA and AEG

Germany, but those entities are self-governed. Casper’s declaration states that at all relevant times,

“AEG BV has not ‘controlled’ AEG Germany or USA as suggested in Creation’s Petition.” AEG

B.V. does not have any bank accounts, property, offices, employees, or agents in Texas. The vast

majority of AEG Power Solutions’ production and manufacturing is carried out by AEG Germany.

          Casper stated the decision to enter into the Manufacturing Agreement in 2012 was made

by AEG USA, which, at that time, was “run at the USA level with some oversight from the parent

company, AEG BV. The decision to enter into the Manufacturing Agreement was not subject to

oversight from AEG BV or any other AEG entity.” Casper’s declaration states that while in

operation, AEG USA maintained its own board of directors; filed tax returns in the United States;

employed individuals in the State of Texas, paid them for their services, and provided them with

benefits including health care; and maintained separate and distinct bank accounts from any other

   3
       AEG Malaysia and Jeffrey Casper were not named as parties in the amended petition; Creation subsequently non-suited AEG Luxembourg.

                                                                  –3–
defendants. To the extent there were any intra-company transfers of funds, those transfers were

documented, and AEG USA was required to repay the transferor. When common positions were

used to provide services to different subsidiaries, such as the general counsel position, AEG USA

would pay a share of the person’s salary.

       Casper averred that AEG B.V. has not contracted by mail or otherwise with a Texas

resident or Texas business; has not agreed to perform a contract in whole or in part in the State of

Texas; has not recruited directly or through an intermediary a Texas resident for employment; does

not own real property or have any other assets in Texas; does not maintain an office or other point

of contact in Texas; has not purposefully availed itself of the privilege of conducting activities

within the State of Texas, and any contact it might have had with Texas does not give rise to

specific or general jurisdiction; has not placed any product in the stream of commerce knowing

that some of them would reach Texas and did not otherwise engage in conduct indicating an intent

to serve the Texas market; has not solicited business in Texas or with any other person or entity in

Texas; has not entered into any agreement with Creation; does not maintain a registered agent in

the State of Texas; and has not committed a tort or statutory violation in the State of Texas. He

further averred that AEG B.V. never sold any inverters. Additionally, no inverters were sold by

AEG Power Solutions in the State of Texas.

       In its response to AEG B.V.’s special appearance, Creation argued that AEG B.V. was

subject to general and specific jurisdiction in Texas because there was no distinction between AEG

B.V. and its American subsidiary, AEG USA; Creation asserted AEG B.V. was “fused” to AEG

USA. Following a hearing, the trial court granted AEG B.V.’s special appearance. Creation

appealed.

                                    PERSONAL JURISDICTION

       Texas courts may exercise personal jurisdiction over a nonresident defendant “when the

                                                –4–
state’s long-arm statute authorizes such jurisdiction and its exercise comports with due process.”

Cornerstone Healthcare Grp. Holding, Inc. v. Nautic Mgmt. VI, L.P., 493 S.W.3d 65, 70 (Tex.

2016). The Texas long-arm statute provides in relevant part that “[i]n addition to other acts that

may constitute doing business,” a nonresident does business in Texas if the nonresident contracts

by mail or otherwise with a Texas resident and either party is to perform the contract in whole or

in part in this state, or if the nonresident commits a tort in whole or in part in this state. TEX. CIV.

PRAC. & REM. CODE ANN. § 17.042(1), (2). The statute “provides for personal jurisdiction that

extends to the limits of the United States Constitution, and so federal due process requirements

shape the contours of Texas courts’ jurisdictional reach.” Searcy v. Parex Res., Inc., 496 S.W.3d
58, 66 (Tex. 2016).

       “[W]hether a trial court’s exercise of jurisdiction is consistent with due process

requirements turns on two requirements: (1) the defendant must have established minimum

contacts with the forum state; and (2) the assertion of jurisdiction cannot offend traditional notions

of fair play and substantial justice.” Id. (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316

(1945)). “[S]ufficient minimum contacts exist when the nonresident defendant ‘purposefully

avails itself of the privilege of conducting activities within the forum [s]tate, thus invoking the

benefits and protections of its laws.’” Id. at 66–67 (quoting Hanson v. Denckla, 357 U.S. 235, 253

(1958)). “The nub of the purposeful availment analysis is whether a nonresident defendant’s

conduct in and connection with Texas are such that it could reasonably anticipate being haled into

court here.” Id. at 67. The defendant must purposefully direct contacts into the forum state. Id.

(citing Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223,

228 (Tex. 1991)).

       When determining whether a nonresident purposefully availed itself of the privilege of

conducting activities in Texas, we consider three factors: (1) only the defendant’s contacts with

                                                 –5–
the forum are relevant, not the unilateral activity of another party or third person; (2) the contacts

relied upon must be purposeful rather than random, isolated, or fortuitous; and (3) the defendant

must seek some benefit, advantage, or profit by availing itself of the jurisdiction. Cornerstone,
493 S.W.3d at 70–71. This analysis assesses the quality and nature of the contacts, not the quantity.

Moncrief Oil Int’l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 151 (Tex. 2013). A defendant will not

be haled into a jurisdiction based solely on contacts that are random, isolated, or fortuitous, or on

the unilateral activity of another party or a third person. Michiana Easy Livin’ Country, Inc. v.

Holten, 168 S.W.3d 777, 785 (Tex. 2005); Guardian Royal Exch., 815 S.W.2d at 226.

        In addition to minimum contacts, due process requires the exercise of personal jurisdiction

to comply with traditional notions of fair play and substantial justice. Moncrief Oil Int’l, 414
S.W.3d at 154 (citing Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338

(Tex. 2009)). The evaluation is undertaken in light of these factors, when appropriate:

        (1) the burden on the defendant; (2) the interests of the forum state in adjudicating
        the dispute; (3) the plaintiff’s interest in obtaining convenient and effective relief;
        (4) the interstate or international judicial system’s interest in obtaining the most
        efficient resolution of controversies; and (5) the shared interest of the several
        nations or states in furthering fundamental substantive social policies.

Spir Star AG v. Kimich, 310 S.W.3d 868, 878 (Tex. 2010).

        The plaintiff bears the initial burden of pleading allegations that suffice to permit a court’s

exercise of personal jurisdiction over the nonresident defendant. Searcy, 496 S.W.3d at 66. Once

the plaintiff has met this burden, the defendant then assumes the burden of negating all potential

bases for personal jurisdiction that exist in the plaintiff’s pleadings. Id. The defendant can negate

jurisdiction on either a factual or legal basis. Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653,

659 (Tex. 2010). A defendant negates jurisdiction on a factual basis by presenting evidence to

disprove the plaintiff’s jurisdictional allegations. Id. “The plaintiff can then respond with its own

evidence that affirms its allegations, and it risks dismissal of its lawsuit if it cannot present the trial

                                                   –6–
court with evidence establishing personal jurisdiction.” Id. (footnotes omitted). A defendant

negates jurisdiction on a legal basis by showing that “even if the plaintiff’s alleged facts are true,

the evidence is legally insufficient to establish jurisdiction; the defendant’s contacts with Texas

fall short of purposeful availment; for specific jurisdiction, that the claims do not arise from the

contacts; or that traditional notions of fair play and substantial justice are offended by the exercise

of jurisdiction.” Id. A defendant’s contacts with a forum may give rise to either general or specific

jurisdiction. KC Smash 01, LLC v. Gerdes, Hendrichson, Ltd., L.L.P., 384 S.W.3d 389, 392 (Tex.

App.—Dallas 2012, no pet.).

       General jurisdiction is “dispute blind,” meaning that it is “an exercise of the court’s

jurisdiction made without regard to the nature of the claim presented.”         PHC-Minden, L.P. v.

Kimberly-Clark Corp., 235 S.W.3d 163, 168 (Tex. 2007); see also Bristol-Myers Squibb Co. v.

Superior Court of Cal., 137 S. Ct. 1773, 1780 (2017) (“A court with general jurisdiction may hear

any claim against that defendant, even if all the incidents underlying the claim occurred in a

different State.”). “But ‘only a limited set of affiliations with a forum will render a defendant

amenable to’ general jurisdiction in that State.” Bristol-Myers, 137 S. Ct. at 1780 (quoting Daimler

AG v. Bauman, 571 U.S. 117, 137 (2014)).            With respect to foreign corporations, general

jurisdiction requires “affiliations with the State [that] are so ‘continuous and systematic’ as to

render them essentially at home in the forum State.”‘ Daimler, 571 U.S. at 127 (quoting Goodyear

Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)); Cornerstone Healthcare, 493
S.W.3d at 71.

       Specific jurisdiction exists when the plaintiff’s claims “arise out of” or are “related to” the

defendant’s contacts with the forum. Searcy, 496 S.W.3d at 67 (citing Helicopteros Nacionales

de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 9 (1984)). “[T]he defendant’s relationship, not

the plaintiff’s relationship, with the forum state is the proper focus of the specific jurisdiction

                                                 –7–
analysis; that is, courts must consider the relationship between the defendant, the forum state, and

the litigation.” Id. “‘[F]or a nonresident defendant’s forum contacts to support an exercise of

specific jurisdiction, there must be a substantial connection between those contacts and the

operative facts of the litigation.’” Moncrief Oil Int’l, 414 S.W.3d at 156 (quoting Moki Mac River

Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007)).              “[B]ut-for causation alone is

insufficient.” Id. at 157; see also Leonard v. Salinas Concrete, LP, 470 S.W.3d 178, 188 (Tex.

App.—Dallas 2015, no pet.). “‘The operative facts are those on which the trial will focus to prove

the liability of the defendant who is challenging jurisdiction.’” Leonard, 470 S.W.3d at 188

(quoting Kaye/Bassman Int’l Corp. v. Dhanuka, 418 S.W.3d 352, 357 (Tex. App.—Dallas 2013,

no pet.)). “[S]pecific jurisdiction requires us to analyze the jurisdictional contacts on a claim-by-

claim basis.” Moncrief Oil Int’l, 414 S.W.3d at 150.

                                      STANDARD OF REVIEW

       The question of whether a court has personal jurisdiction over a nonresident defendant is a

question of law we review de novo. Moncrief Oil Int’l, 414 S.W.3d at 150 (citing Moki Mac River

Expeditions, 221 S.W.3d at 574). “When, as here, the trial court does not issue findings of fact

and conclusions of law, we imply all relevant facts necessary to support the judgment that are

supported by evidence.” Id. (citing Retamco Operating, Inc., 278 S.W.3d at 337).

                                             DISCUSSION

       Creation alleged AEG B.V. is a Dutch company that is headquartered in the Netherlands,

and that it owns twenty-two subsidiaries, offices, and “competence centers” around the world,

including in Dallas. The subsidiaries include AEG USA, AEG Germany, and AEG Malaysia

which, it alleged, “either at AEG [B.V.]’s direction or the direction of AEG [B.V.]’s parent and

holding company, 3W Power SA . . . , funds the operations of, controls, and operates its

subsidiaries as a single business entity.”

                                                –8–
   A. General Jurisdiction

       In its first issue, Creation asserts AEG B.V. is subject to general jurisdiction in Texas

because its contacts have been continuous and systematic such that AEG B.V. is “essentially at

home” in Texas. Creation cites several press releases issued by AEG Power Solutions to support

its argument:

               AEG Power Solutions announced in January of 2010 that it was expanding its

                corporate operations in North America and “hiring for positions in its regional

                offices in Dallas, Texas and Markham, Ontario.”

               AEG Power Solutions stated that it maintains a “regional office” in Dallas, Texas,

                which was established in 2001 and specializes in sales, engineering, and service for

                North America.

               AEG Power Solutions announced in March of 2010 that it was designing and

                installing the largest commercial rooftop solar system in Plano, Texas.

               AEG Power Solutions announced in June of 2014 that it worked on a project in

                Saudi Arabia with KBR, Inc. whose office is located in Houston, Texas.

               AEG Power Solutions announced a new office in Houston, Texas, and the

                appointment of a Sales Manager – Oil Gas & Petrochemical for the United States

                in 2015. The press release listed a Houston address for AEG Power Solutions.

               AEG Power Solutions launched a UL-compliant battery charger, which it planned

                to display at a tradeshow in Houston, Texas.

       Although Creation asserts these press releases show that AEG B.V. conducted various

business activities in Texas, the press releases were issued by and discuss activities of AEG Power

Solutions. None of these press releases announce any activity by AEG B.V., and Creation

provided no evidence that AEG Power Solutions is the same entity as AEG B.V. Instead, Casper

                                                –9–
stated in his declaration that AEG B.V. is a subsidiary of AEG Power Solutions. None of the

evidence that Creation relies on shows AEG B.V. took any action in Texas, including the actions

discussed in the press releases. The press releases only show activity by AEG Power Solutions, a

different entity. Creation presented no evidence showing AEG B.V. had any contacts with Texas.

       However, AEG B.V. presented evidence that it has not contracted by mail or otherwise

with a Texas resident or Texas business; has not agreed to perform a contract in whole or in part

in the State of Texas; has not recruited directly or through an intermediary a Texas resident for

employment; does not own real property or have any other assets in Texas; does not maintain an

office or other point of contact in Texas; has not purposefully availed itself of the privilege of

conducting activities within the State of Texas, and any contact it might have had with Texas does

not give rise to specific or general jurisdiction; has not placed any product in the stream of

commerce knowing that some of them would reach Texas and did not otherwise engage in conduct

indicating an intent to serve the Texas market; has not solicited business in Texas or with any other

person or entity in Texas; has not entered into any agreement with Creation; does not maintain a

registered agent in the State of Texas; and has not committed a tort or statutory violation in the

State of Texas.

       Although AEG B.V. presented evidence it had no contacts with Texas, Creation presented

no evidence showing AEG B.V. had any contacts with Texas. We conclude Creation failed to

show AEG B.V. had contacts that are so continuous and systematic as to render it essentially at

home in Texas. Thus, the district court lacked general jurisdiction over AEG B.V. based on its

own contacts with the forum. We overrule Creation’s first issue.

       In its second issue, Creation argues AEG B.V. is AEG USA’s alter ego and is “fused” to

AEG USA for jurisdictional purposes, which makes AEG B.V. subject to general jurisdiction in

Texas. When a plaintiff asserts jurisdiction on an alter ego theory, “[t]he plaintiff must prove that

                                               –10–
the nonresident is actually the alter ego of the resident corporation.” Nichols v. Tseng Hsiang Lin,

282 S.W.3d 743, 750 (Tex. App.—Dallas 2009, no pet.) (citing, inter alia, BMC Software Belgium,

N.V. v. Marchand, 83 S.W.3d 789, 798 (Tex. 2002)). To “fuse” AEG B.V. to AEG USA for

jurisdictional purposes, Creation must prove that AEG B.V. controls the internal business

operations and affairs of AEG USA. See BMC Software, 838 S.W.3d 799. “But the degree of

control the parent exercises must be greater than that normally associated with common ownership

and directorship; the evidence must show that the two entities cease to be separate so that the

corporate fiction should be disregarded to prevent fraud or injustice.” Id. The Texas Supreme

Court has considered the following factors to determine whether a subsidiary is separate and

distinct from its parent corporation for personal jurisdiction purposes: (1) the amount of the

subsidiary’s stock owned by the parent corporation; (2) the existence of separate headquarters; (3)

the observance of corporate formalities; and (4) the degree of the parent’s control over the general

policy and administration of the subsidiary. PHC–Minden, 235 S.W.3d at 175. “Appropriate

parental involvement includes monitoring the subsidiary’s performance, supervision of the

subsidiary’s finance and capital budget decisions, and articulation of general policies.” Id. at 176;

see also N. Frac Proppants, II, LLC v. 2011 NF Holdings, LLC, No. 05-16-00319-CV, 2017 WL
3275896, at *6 (Tex. App.—Dallas July 27, 2017, no pet.) (mem. op.). To fuse companies such

as AEG B.V. and AEG USA for jurisdictional purposes, the plaintiff must show a “plus factor,”

which is “something beyond the subsidiary’s mere presence within the bosom of the corporate

family.” PHC-Minden, 235 S.W.3d at 176 (internal quotation marks omitted).

       As to the first factor identified by the supreme court, AEG B.V. concedes it owns

substantially all of AEG USA’s stock. However, the two entities maintain separate headquarters:

AEG B.V.’s headquarters is in the Netherlands and AEG USA’s headquarters is in Plano, Texas.

To satisfy the third and fourth factors set forth by the Texas Supreme Court—the observance of

                                               –11–
corporate formalities and the degree of the parent’s control over the general policy and

administration of the subsidiary—Creation relies on the same press releases discussed above that

were issued by AEG Power Solutions. Creation asserts these press releases show AEG B.V. held

AEG USA out as a “regional office in Dallas,” rather than as a subsidiary. As discussed above, the

press releases were issued and discuss activities by AEG Power Solutions. They were not issued

by or discuss activities of AEG B.V. These press releases do not provide any information about

AEG B.V., including whether AEG B.V. observed corporate formalities or exercised control

beyond that normally associated with common ownership and directorship.

        Creation also asserts AEG B.V. employees negotiated the Power Max deal and received a

purchase order via email from Power Max and, when Power Max wanted to change the terms of

the agreement, AEG USA had to seek approval from AEG B.V. To support these assertions,

Creation cites to a purchase order issued by Power Max to AEG Power Solutions, an email from

Cynthia Diallo whose signature block shows she is the Financial Controller for AEG Power

Solutions, and the LinkedIn profiles for Casper and Emmanuel Drevon who identifies himself as

the Corporate Treasurer of AEG Power Solutions. These documents, like the press releases, relate

only to AEG Power Solutions, not AEG B.V. Additionally, these documents do not show AEG

Power Solutions or AEG B.V. controlled the internal business operations and affairs of AEG USA

and certainly not to an extent that is greater than that normally associated with common ownership

and directorship. See PHC-Minden, 235 S.W.3d at 172–73.

       We conclude Creation made no showing that AEG B.V. is the alter ego of or “fused” to

AEG USA. Therefore, the trial court did not err by concluding it lacked general jurisdiction over

AEG B.V. on the basis that it was the alter ego of and fused to AEG USA. We overrule Creation’s

second issue.

                                              –12–
   B. Specific Jurisdiction

       In its third issue, Creation asserts AEG B.V. is subject to specific jurisdiction in Texas

because it committed tortious acts outside the state which were purposefully or expressly aimed at

Texas. Creation argues that AEG B.V., “through its manifest control of AEG USA, directed its

intentional misrepresentation and fraudulent conduct at Creation, which was intended to have an

effect in Texas to AEG and AEG USA’s benefit (and Creation’s detriment).” More specifically,

Creation asserts that Casper knew when he signed the Security Agreement that many material

terms and warrants were untrue and that AEG B.V. was closing AEG USA and transferring its

operations to AEG Germany.

       The Security Agreement is between AEG USA and Creation. Casper executed the

document as a director of AEG USA. The Agreement does not discuss AEG B.V., and Casper did

not sign the document as a representative of AEG B.V. There is no evidence that AEG B.V. was

involved with the Security Agreement in any way. Thus, the Security Agreement is not evidence

AEG B.V. had contacts with Texas or that Creation’s claims “arise out of” or are “related to” AEG

B.V.’s contacts with the forum. We overrule Creation’s third issue.

   C. Dismissal with Prejudice

       In its fourth issue, Creation argues in the alternative that the trial court erred by dismissing

its claims against AEG B.V. with prejudice. We agree. The trial court’s order states: “Defendant

AEG Power Solutions BV’s Special appearance is SUSTAINED, and Plaintiff’s claims against

AEG Power Solutions BV are hereby DISMISSED with prejudice for lack of personal

jurisdiction.”

       A dismissal with prejudice functions as a judgment on the merits. Celanese Corp. v.

Sahagun, No. 05-16-00868-CV, 2017 WL 3405186, at *12 (Tex. App.—Dallas Aug. 9, 2017, pet.

denied) (mem. op.) (citing Att’y Gen. of Tex v. Sailer, 871 S.W.2d 257, 258 (Tex. App.—Houston

                                                –13–
[14th Dist.] 1994, writ denied)). However, a trial court’s ruling on a special appearance should

not render a judgment on the merits. Id. (citing Geo Chevron Ortiz Ranch # 2 v. Woodworth, No.

04–06–00412–CV, 2007 WL 671340, at *4 (Tex. App.—San Antonio Mar. 7, 2007, pet. denied)

(mem. op.)). Thus, the trial court erred by dismissing Creation’s claims against AEG B.V. with

prejudice.

        When this error occurs, the proper remedy is to reform the order so that it reflects that the

trial court merely sustained the special appearance and dismissed the claims for lack of personal

jurisdiction. Id. (citing Fretz v. Reynolds, No. 04–0300854–CV, 2004 WL 2803201, at *2 (Tex.

App.—San Antonio Dec. 8, 2004, pet. denied)). Accordingly, we sustain Creations’ fourth issue

and modify the applicable portion of the trial court’s order to read that “Defendant AEG Power

Solution BV’s special appearance is SUSTAINED and Plaintiff’s claims against AEG Power

Solutions BV are hereby dismissed for want of personal jurisdiction as to that party.”

                                           D. CONCLUSION

        We modify the trial court’s order to show Creation’s claims against AEG B.V. were

dismissed for want of personal jurisdiction rather than dismissed with prejudice. As modified, we

affirm the trial court’s order.

                                                   /Erin A. Nowell/
                                                   ERIN A. NOWELL
                                                   JUSTICE

190331F.P05

                                                –14–
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

 CREATION TECHNOLOGIES TEXAS,                       On Appeal from the 14th Judicial District
 LLC, Appellant                                     Court, Dallas County, Texas
                                                    Trial Court Cause No. DC-18-015065.
 No. 05-19-00331-CV         V.                      Opinion delivered by Justice Nowell.
                                                    Justices Myers and Osborne participating.
 AEG POWER SOLUTIONS B.V.,
 Appellee

      In accordance with this Court’s opinion of this date, the trial court’s Order on AEG
Power Solution B.V.’s Special Appearance is MODIFIED as follows:

      We DELETE the following language from the order: “Plaintiff’s claims against AEG
Power Solutions BV are hereby DISMISSED with prejudice for lack of personal jurisdiction”
and

       We ADD the following language to the order: “Plaintiff’s claims against AEG Power
Solutions BV are hereby dismissed for want of personal jurisdiction as to that party.”

It is ORDERED that, as modified, the order of the trial court is AFFIRMED.

       It is ORDERED that appellee AEG Power Solutions B.V. recover its costs of this appeal
from appellant Creation Technologies Texas, LLC.

Judgment entered this 12th day of November 2019.

                                             –15–