Court Opinion

ID: 2879702
Source: CourtListenerOpinion
Date Created: 2015-09-07 05:33:04.130838+00
Date Added: 2024-06-11T11:32:30.808865
License: Public Domain

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                                              OPINION

                                          No. 04-08-00869-CV

                            Irma Roldan WALZ a/k/a Irma Walz Martinez,
                                           Appellant

                                                    v.

                             Veronica MARTINEZ, Patricia Martinez,
                          Maria Fernanda Martinez, and Guillermo Martinez,
                                            Appellees

                      From the 408th Judicial District Court, Bexar County, Texas
                                   Trial Court No. 2006-CI-05081
                        Honorable David A. Berchelmann, Jr., Judge Presiding

Opinion by:       Catherine Stone, Chief Justice

Sitting:          Catherine Stone, Chief Justice
                  Phylis J. Speedlin, Justice
                  Steven C. Hilbig, Justice

Delivered and Filed: November 25, 2009

AFFIRMED AS MODIFIED

           Irma Roldan Walz a/k/a Irma Walz Martinez appeals the trial court’s order granting a special

appearance filed by the appellees, who were third party defendants in the underlying cause. Walz

contends the trial court erred in sustaining the special appearance because the appellees purposefully

availed themselves of the jurisdiction of the Texas courts by: (1) filing a will contest in a pending

probate proceeding and seeking injunctive relief against Walz in that proceeding; and (2) initiating
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the underlying lawsuit against Walz as the purported shareholders of Construcciones Modernas de

Mexico, S.A. (“Construcciones”). Walz further contends the trial court erred in dismissing her

claims with prejudice. We sustain Walz’s complaint regarding the dismissal being with prejudice,

but we overrule Walz’s other complaints. We modify the trial court’s order to dismiss the

underlying cause without prejudice and affirm the trial court’s order as modified.

                                           BACKGROUND

       Fernando Antonio Martinez Cobo and Walz were married on April 8, 2004. At the time of

the marriage, Fernando had been diagnosed with prostate cancer. Fernando had four children from

two prior marriages: Maria Fernanda Martinez, Guillermo Martinez, Veronica Martinez, and Patricia

Martinez.

       Fernando died on February 18, 2006. Soon thereafter, Walz filed an application in a Texas

probate court to probate a will dated January 31, 2005.

       On March 1, 2006, Fernando’s children filed a petition to contest the will in the probate

court. The petition also included an application for the appointment of a temporary administrator,

a request for an accounting, and a request for a temporary restraining order and injunctive relief. The

will was contested on the grounds that it was not executed with proper formalities and that Fernando

lacked testamentary capacity to execute the will or was unduly influenced. The petition requested

the appointment of a qualified third party with no interest in the estate as temporary administrator.

The temporary restraining order was requested to prevent Walz from selling, transferring, or

disposing of the assets of the estate pending the outcome of the will contest.

       Maria’s affidavit was attached to the petition in support of the request for the temporary

restraining order. In her affidavit, Maria stated that she had learned that many of the assets Fernando

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owned and acquired before his marriage to Walz had been “sold, transferred and/or otherwise

secreted after his marriage to [Walz] under very suspicious, suspect and/or fraudulent circumstances,

while his physical, and mental abilities were rapidly deteriorating.” Maria also stated that the assets

of one corporation in Mexico in which Maria also held an interest had been liquidated without her

knowledge and consent. Maria further stated that some of Fernando’s assets in Mexico had already

been transferred to Walz’s daughter. Based on Walz’s prior actions, Maria stated that she believed

Walz would make every effort to “hide, sell or transfer the estate’s assets in order to deprive”

Fernando’s children “of any benefit in the estate should [they] prevail in contesting the will.”

       On March 1, 2006, a hearing was held on the application for temporary restraining order filed

by Fernando’s children in probate court. Fernando’s children appeared at the hearing by and through

counsel of record. At the conclusion of the hearing, the probate court signed an agreed order in

which Walz agreed to refrain from: (1) taking any action to release, remove, or transfer any funds

belonging to Fernando’s estate; and (2) selling or disposing of any asset belonging to the estate.

       On March 30, 2006, Construcciones filed a petition and an application for a temporary

restraining order and temporary injunction in a Texas district court against Walz and two entities that

were the custodians of certain accounts in the United States. Construcciones sought to recover funds

and property belonging to it that allegedly had been illegally taken or converted by Walz for her own

use and benefit. The petition alleged that although Walz and her daughter were given authority as

assistants to the prior administrator of Construcciones to collect and administer funds, Walz sold

corporate assets and failed to account for the proceeds which she wrongfully removed to the United

States and deposited into accounts of which Walz was the sole owner. The proceeds were alleged

to be in excess of $3.5 million. The district court signed an order on March 30, 2006, granting the

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temporary restraining order and setting a hearing on the temporary injunction. The parties later

agreed to a temporary injunction.

       On November 16, 2006, Walz filed a third party petition asserting claims against various

third party defendants, including Fernando’s children. Walz alleged that Fernando owned 90% of

the shares of stock of Construcciones. Walz further alleged that although Fernando’s children

contend Fernando gave them his shares of Construcciones on March 18, 2005 in Mexico, Fernando

was undergoing chemotherapy in the United States when the gifting of the shares allegedly occurred.

Because Mexican law required Fernando to be present in order to gift his shares, Walz asserted that

any gifting of the shares was invalid because Fernando was too ill to travel to Mexico on that date.

Walz alleged that Fernando’s children had fraudulently produced forged documents in Mexico to

support the gifting of the shares. Walz asserted claims for fraud, conversion, and civil conspiracy

against the third party defendants relating to the actions taken with regard to the alleged gifting of

the shares.

       In December of 2006, Fernando’s children filed a special appearance and a supplemental

special appearance. Each of Fernando’s children signed an affidavit stating his or her only contact

with the State of Texas was for the purpose of visiting relatives on a temporary basis.

       On March 28, 2007, all of the parties in the district court case agreed to a level 3 discovery

control plan. On April 12, 2007, the trial court approved the report of a mediator stating that

mediation was conducted on September 29, 2006, but the case did not settle. On April 18, 2007, the

trial court granted a motion to withdraw filed by the attorneys representing both Construcciones and

Fernando’s children. Approximately one year later, Construcciones non-suited its claims against

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Walz and against the only defendant entity remaining since the other defendant entity had obtained

a summary judgment.

       On June 6, 2008, Walz filed her response to the special appearance previously filed by

Fernando’s children. In the response, Walz asserted the court had jurisdiction over Fernando’s

children because they had filed various motions and pleadings in the probate proceeding, participated

in discovery, sought and received affirmative relief in obtaining a temporary restraining order and

an injunction, and made numerous appearances. In the alternative, Walz asserted Fernando’s

children had purposefully availed themselves of the laws of Texas by seeking affirmative relief

against Walz as the purported shareholders of Construcciones. Walz alleged that Construcciones

had filed its lawsuit against her at the request of Fernando’s children in their capacity as alleged

shareholders.

       The trial court held a hearing on the special appearance. At the hearing, the attorney

representing Fernando’s children noted that Walz’s third party petition expressly alleged that the

actions giving rise to the claims occurred in Mexico. At the conclusion of the hearing, the district

court granted the special appearance, and Walz appeals the district court’s order.

                                            DISCUSSION

       Personal jurisdiction is a question of law which we review de novo. Retamco Operating, Inc.

v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009). However, the trial court frequently must

resolve questions of fact before deciding the jurisdiction question. BMC Software Belgium, N.V. v.

Marchand, 83 S.W.3d 789, 794 (Tex. 2002). When a trial court does not issue findings of fact and

conclusions of law with its special appearance ruling, all facts necessary to support the judgment and

supported by the evidence are implied. Id. at 795. When the appellate record includes the reporter’s

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and clerk’s records, these implied findings are not conclusive and may be challenged for legal and

factual sufficiency. Id.

       Under constitutional due process analysis, personal jurisdiction is achieved when: (1) the

nonresident defendant has established minimum contacts with the forum state; and (2) the assertion

of jurisdiction complies with traditional notions of fair play and substantial justice. Id. A defendant

establishes minimum contacts with a state when it purposefully avails itself of the privilege of

conducting activities within the forum state, thus invoking the benefits and protections of its laws.

Id. 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. Id. A nonresident’s contacts can give rise to either specific or general jurisdiction. Id.

       General jurisdiction arises when the defendant’s contacts within the forum are continuous

and systematic. Id. Specific jurisdiction arises when: (1) the defendant purposefully avails itself of

conducting activities in the forum state; and (2) the cause of action arises from or is related to those

contacts or activities. Id. In determining whether a defendant purposefully availed itself of the

privilege of conducting activities in Texas: (1) only the defendant’s contacts with the forum are

relevant, not the unilateral activity of another party or a third person; (2) the contacts relied upon

must be purposeful rather than random, fortuitous, or attenuated; and (3) the defendant must seek

some benefit, advantage, or profit by availing itself of the jurisdiction. Id. at 338-39.

A.     Purposeful Availment Through Will Contest

       Walz initially contends the trial court erred in granting the special appearance because

Fernando’s children purposefully availed themselves of the privilege of filing a will contest and

seeking affirmative relief in the Texas probate proceeding. Walz relies on two opinions to support

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her contention. See In re Estate of Davis, 216 S.W.3d 537 (Tex. App.—Texarkana 2007, pet.

denied); Smith v. Lanier, 998 S.W.2d 324 (Tex. App.—Austin 1999, pet. denied).

       In In re Estate of Davis, John M. Stuckey, Jr. was appointed as the executor of an estate by

a Texas probate court. 216 S.W.3d at 541. Stuckey was subsequently sued, both individually and

as executor, for damages based on his alleged malfeasance as executor of the estate. Id. at 541-42.

Stuckey alleged the state court lacked personal jurisdiction over him. Id. at 542. Stuckey’s actions

in Texas included: (1) applying for probate of the will; (2) qualifying as independent executor; (3)

filing the required appraisement and list of claims; and (4) collecting funds from bank accounts in

Texas and moving the money to Georgia banks. Id. at 544-45. In analyzing the minimum contacts

that existed, the Texarkana court noted that Stuckey had petitioned the Texas court to be recognized

as the independent executor and made several trips to Texas in carrying out those duties. Id. at 546.

The court further noted that Stuckey invoked the authority of the Texas court as executor to take

assets from institutions in Texas and distribute them. Id. Finally, the court noted that Stuckey

named an agent in Texas to accept service of process in all actions and proceedings with respect to

the estate. Id. at 546. Because all of the claims against Stuckey arose from his actions as the

executor of the estate of a Texas resident, the Texarkana court concluded that specific jurisdiction

existed. Id.; see also Succession of Simms, 175 So. 2d 113, 123 (La. Ct. App. 1965) (finding

minimum contacts satisfied where defendants qualified as executors in probate proceeding to

administer Louisiana property).

       In Smith v. Lanier, Theodore and Wylma Reid married after retirement age and remained

married for more than twenty-five years. 998 S.W.2d at 328. The Reids resided in Texas and owned

property valued at more than $2,500,000.00. Id. Carol Ann Reid Smith, Mr. Reid’s only child from

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a previous marriage, resided in South Carolina during the Reids’ marriage. Id. In February of 1998,

Smith came to Texas to help the Reids move into a retirement home in Austin. Id. During the visit,

Smith attended a meeting with Mr. Reid and his attorney at which Smith accepted Mr. Reid’s power

of attorney and aided in the drafting of his will. Id. Mr. Reid’s will left Smith all of his property and

named her as the personal representative. Id. When Mrs. Reid died in June of 1998, her will was

admitted for probate in Texas in July of 1998, and Sidney Lanier was named as her independent

executor. Id. Mrs. Reid left all of her property to the Texas Baptist Children’s Home. Id.

        Smith returned to Austin for Mrs. Reid’s funeral and began using her father’s power of

attorney to gather his assets. Id. Two weeks after the funeral, Smith returned to Texas to move her

father to South Carolina and to collect his assets and transfer them to South Carolina. Id. Over the

next several weeks, using the power of attorney, Smith: (1) took all of Mr. Reid’s financial records

to South Carolina; (2) removed the securities from a safe-deposit box in Texas and closed the

account; (3) transferred the securities to a Merrill Lynch account in South Carolina; (4) stored the

Reids’ automobile in Niederwald, Texas; (5) withdrew $42,000 from the Reids’ account at Bank One

in Austin and deposited it into two accounts in South Carolina; and (6) established her power of

attorney over Mr. Reid’s American Express mutual fund account. Id. at 328-29.

        Mr. Reid died in August of 1998. In September of 1998, Mr. Reid’s will was admitted for

probate in South Carolina. Id. at 329. Lanier initiated proceedings in Texas to halt the probate

process in South Carolina to protect Mrs. Reid’s estate. Id. Lanier filed a declaratory judgment

action seeking to determine the characterization of the property owned by the Reids, i.e., community

or separate. Id. Lanier also obtained a temporary restraining order freezing one-half of the assets

owned by the Reids. Id.

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       Smith challenged the Texas court’s jurisdiction over her as an individual. Id. at 333. The

Austin court noted, however, that Smith, acting as attorney in fact, conducted several transactions

with various Texas residents and institutions involving the Reids’ property. Id. at 334. The Austin

court concluded, “As attorney in fact, Smith took advantage of the laws of the State of Texas to

exercise control over her father’s assets. She purposefully directed her activities towards Texas

residents and institutions, activities that resulted in the removal from the state of the property that

is the basis of the dispute. Furthermore, she was on notice that the property might be subject to the

jurisdiction of the Texas probate court” through her awareness of Texas’s community property laws.

Id. at 335. Accordingly, the Austin court held that sufficient evidence supported the exercise of

personal jurisdiction over Smith in her individual capacity. Id.

        The facts in both In re Estate of Davis and Smith v. Lanier are readily distinguishable from

the instant case. None of Fernando’s children sought to be appointed as the executor of Fernando’s

estate, nor had they taken any action on behalf of Fernando’s estate in Texas other than obtaining

the agreed temporary restraining order and temporary injunction to protect the estate’s assets.

       Similarly, the primary case relied upon by Walz in her reply brief is also distinguishable. See

Turner v. Turner, No. 14-98-00510-CV, 1999 WL 33659, at *6-7 (Tex. App.—Houston [14th Dist.]

Jan. 28, 1999, no pet.) In Turner, John and Mary Turner, husband and wife, created a revocable

trust. 1999 WL 33659, at *1. John’s son, Bryon, subsequently moved his father into a nursing home

in Texas and initiated guardianship proceedings in Texas. Id. Mary intervened in the guardianship,

and Bryon and Mary subsequently entered into an agreed judgment pursuant to which Mary agreed

to pay John’s health care expenses from the money in the trust to the extent the expenses exceeded

retirement payments John received. Id. Mary also agreed to provide Bryon with copies of the

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statements for the trust account. Id. After John died, Bryon filed a petition to remove Mary as

trustee, believing she was misappropriating funds from the trust. Id. In analyzing Mary’s minimum

contacts, the Houston court noted:

       Here, as intervenor in the guardianship suit, Mary inserted herself into the
       proceeding, and availed herself of this state’s judicial system, thereby conferring
       specific jurisdiction on the trial court. Moreover, by entering into the agreed
       judgment, Mary, as trustee, contracted to perform her obligations – paying health care
       providers, making bank deposits, and sending accounting statements to Bryon – in
       Texas. Thus, Mary has purposefully availed herself the privileges and benefits of the
       laws of this state.

Id. at *7. Perhaps more importantly for purposes of the instant case, the court also noted, “a review

of the record reflects that the claims [against Mary] arise from, and are related to Mary’s alleged

breach of the agreed judgment.” Id. at *6.

       As the Texas Supreme Court has noted, “purposeful availment alone will not support an

exercise of specific jurisdiction.” Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 579 (Tex.

2007). Instead, a second requirement must be satisfied. As the Texas Supreme Court has explained:

       Specific-jurisdiction analysis has two co-equal components. For specific-jurisdiction
       purposes, purposeful availment has no jurisdictional relevance unless the defendant’s
       liability arises from or relates to the forum contacts. . . . . The ‘arise from or relate
       to’ requirement lies at the heart of specific jurisdiction by defining the required nexus
       between the nonresident defendant, the litigation, and the forum.

Id.

       Unlike Turner where the claims arose from Mary’s breach of the terms of an agreed judgment

signed by a Texas court, the claims alleged against Fernando’s children arise from an allegedly

fraudulent transfer of shares of stock of a Mexican corporation in Mexico. Thus, even if contesting

the will could be considered purposeful availment, the claims asserted by Walz do not arise from or

relate to the will contest, the protection sought in relation to the assets of Fernando’s estate, or any

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other action taken by Fernando’s children in the probate court proceeding. See Gordon v. Granstedt,

513 P.2d 165, 171 (Haw. 1973) (noting appearance in court in connection with a will contest does

not imply consent that party would subject himself to the personal jurisdiction in that court in any

subsequent litigation there on any matter involving the estate).

B.      Purposeful Availment Through Construcciones Lawsuit

        Walz next asserts that Fernando’s children purposefully availed themselves by acting as

shareholders of Construcciones and initiating the lawsuit filed by Construcciones. Walz asserts that

her claims against Fernando’s children arise from the fraudulent actions they took in attempting to

become the shareholders of Construcciones which enabled them to file the lawsuit in the

corporation’s name. Walz further contends that Fernando’s children cannot shield themselves from

liability because Construcciones was not an independent entity, citing Esse v. BP Am. Prod. Co., No.

01-04-00567-CV, 2006 WL 1227724 (Tex. App.—Houston [1st Dist.] May 4, 2006, no pet. ) (mem.

op.).

        As a general rule, jurisdiction over an individual cannot be based upon jurisdiction over a

corporation. Nichols v. Lin, 282 S.W.3d 743, 750 (Tex. App.—Dallas 2009, no pet.). Jurisdiction

over an individual can be based on jurisdiction over a corporation with which the individual is

associated only if the corporation is the alter ego of the individual. Id. Under the alter ego theory,

courts disregard the corporate entity when there exists such unity between corporation and individual

that the corporation ceases to be separate. Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 228 (Tex.

1990). An alter ego relationship may be shown from the total dealings of the corporation and the

individual. Id. This showing may include evidence of the degree to which corporate formalities

have been followed and corporate and individual property have been kept separately, the amount of

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financial interest, ownership and control the individual maintains over the corporation, and whether

the corporation has been used for personal purposes. Id.

       The only evidence regarding the dealings between Fernando’s children and Construcciones

in the appellate record are translated corporate minutes documenting various corporate actions,

including the transfer of shares to Fernando’s children. Walz’s petition does not contain any specific

factual allegations to delineate her alter ego claim apart from asserting Fernando’s children

fraudulently obtained ownership of the shares, and the record contains no evidence to support an

alter ego finding. See Amaral v. Steele, No. 14-02-00368-CV, 2002 WL 31427018, at *2 (Tex.

App.—Houston [14th Dist.] Oct. 31, 2002, no pet.) (holding record did not support alter ego

finding).

       The only case cited by Walz in support of her argument is readily distinguishable. In Esse,

the sole shareholder of a corporation consulted with his father, who was the sole officer and director

of the corporation, regarding the sale of an asset of the corporation. 2006 WL 1227724, at *8. The

claims asserted in the case included a claim for fraud and fraudulent transfer arising from the sale

of that asset. Id. at *7. The asset was located in Texas and was one of the primary assets owned by

the corporation. Id. at *8. The shareholder and his father discussed the corporation’s affairs during

monthly telephone conversations. Id. The shareholder and his father also discussed the price at

which the asset should be sold, and the shareholder consented to the sale. Id.

       Unlike the facts in Esse, the only activity alleged in the petition was that Fernando’s children

engaged in fraudulent actions in Mexico that resulted in the fraudulent transfer of shares of stock in

a Mexican corporation to them. Based on the evidence presented, we hold personal jurisdiction

cannot be exercised over Fernando’s children based on Construcciones’s filing of a lawsuit in Texas.

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C.     Dismissal With Prejudice

       Finally, Walz contends the trial court erred in dismissing her claim with prejudice.

Fernando’s children concede that the trial court erred in dismissing the claims with prejudice. We

also agree that the dismissal with prejudice was erroneous. See 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.) (holding dismissing action with prejudice when granting special appearance

is error). Accordingly, Walz’s third issue is sustained.

                                           CONCLUSION

       The trial court’s order is modified to dismiss the underlying cause without prejudice. The

trial court’s order is affirmed as modified.

                                                       Catherine Stone, Chief Justice

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