Court Opinion

ID: 4410116
Source: CourtListenerOpinion
Date Created: 2019-06-25 22:52:58.721443+00
Date Added: 2024-06-11T14:51:56.905385
License: Public Domain

Affirmed and Memorandum Opinion filed June 25, 2019.

                                     In the

                    Fourteenth Court of Appeals

                             NO. 14-18-00420-CV

  NAPOLI, BERN, RIPKA, SHKOLNIK & ASSOCIATES, LLP; NAPOLI,
   BERN, RIPKA, SHKOLNIK, LLP; AND NAPOLI SHKOLNIK PLLC,
                          Appellants
                                        v.

                STRATOS LEGAL SERVICES, LP, Appellee

                   On Appeal from the 133rd District Court
                            Harris County, Texas
                      Trial Court Cause No. 2017-79380

                         MEMORANDUM OPINION

      This is an interlocutory appeal from an order denying a special appearance
made by nonresident entities Napoli, Bern, Ripka, Shkolnik & Associates, LLP;
Napoli, Bern, Ripka, Shkolnik, LLP; and Napoli Shkolnik PLLC (together, the
“Napoli appellants”) in a suit based on over 100 unpaid invoices for reporting and
other litigation-support services provided by Texas entity Stratos Legal Services,
LP. See Tex. R. Civ. P. 120a; Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(7).
Because we conclude that the Napoli appellants’ Texas contacts are sufficient to
establish specific jurisdiction over them and that exercising jurisdiction comports
with fair play and substantial justice, we affirm.

                                   I.    BACKGROUND

       The Napoli appellants are New York entities, with principal executive offices
in Melville, New York. Stratos, a Texas entity based in Houston, is a full-service
litigation-support firm. From February 2015 through May 2016, Stratos was hired
by and provided various services, including recording and transcribing depositions,
to the Napoli appellants. The depositions related to the Napoli appellants’ asbestos
cases. The depositions were taken in various states, including Alaska, Arizona,
California, Connecticut, Florida, Illinois, Indiana, Iowa, Maryland, Michigan,
Minnesota, Mississippi, Missouri, New Jersey, North Carolina, Ohio, and
Wisconsin. The invoices for Stratos’s services amounted to just under $53,000. The
Napoli appellants did not pay Stratos.

       In 2017, Stratos brought claims against the Napoli appellants for breach of
contract, unjust enrichment, and “money had and received,” which is a form of
unjust enrichment.1 The Napoli appellants filed a special appearance in February
2018, attaching: entity information for each of the Napoli appellants from the New
York Department of State Division of Corporations; an affidavit from Paul Maslo, a
partner at Napoli Shkolnik PLLC; and a declaration from Patrick Haines, another
partner at Napoli Shkolnik PLLC. The Napoli appellants did not include a
verification as required by Texas Rule of Civil Procedure 120a.

       Stratos amended its petition, adding claims for promissory estoppel and under

       1
           See London v. London, 192 S.W.3d 6, 13 (Tex. App.—Houston [14th Dist.] 2005, pet.
denied).

                                              2
section 52.059 of the Government Code, which provides that an attorney taking a
deposition and his law firm are jointly and severally liable to the court reporter for
charges. See Tex. Gov’t Code Ann. § 52.059. To its amended petition, Stratos
attached: the declaration from Haines; information regarding Haines captured from
the State Bar of Texas website; information regarding locations and offices captured
from the Napoli Shkolnik PLLC website; information regarding the Austin office
captured from the Napoli Shkolnik PLLC website; Haines’s attorney biography
captured from the Napoli Shkolnik PLLC website; the invoices issued by Stratos to
the Napoli appellants; and the statements of overdue invoices issued by Stratos to
the Napoli appellants’ accounts-payable departments.

      The Napoli appellants filed another special appearance. The Napoli appellants
attached the same exhibits as before, except in place of Haines’s original declaration,
they included another declaration by Haines. Again, they did not include a
verification.

      Stratos responded, attaching: an affidavit from Christin Chandler, the
president of Stratos; screenshots from text-message exchanges between Haines and
Chandler dated May and October 2015; and the overdue invoices and statements
issued by Stratos to the Napoli appellants. Stratos pointed out that the Napoli
appellants’ special appearance was defective because it lacked a verification and the
accompanying affidavits did not address all the factual allegations in the special
appearance.

      The Napoli appellants filed an amended special appearance, this time
including a verification. They did not attach any exhibits to their amended special
appearance. The trial court held a hearing; no evidence was admitted at the hearing.
On May 1, 2018, the trial court signed an order denying the Napoli appellants’
special appearance. They appeal.

                                          3
                                 II.   ANALYSIS

      Stratos alleged that the trial court has both general and specific personal
jurisdiction over the Napoli appellants. In pertinent part, Stratos alleged the
following with regard to personal jurisdiction:

          the Napoli appellants are law firms engaging in civil litigation in
           Texas;
          the Napoli appellants specifically communicated with Stratos as
           a Texas entity for the purpose of obtaining products and services;
          the Napoli appellants induced Stratos to enter into agreements
           for Stratos to provide them with products and services;
          Stratos is a full-service litigation support firm based in Houston,
           Texas;
          in the ordinary course of business, a law firm’s authorized
           representative will contact Stratos directly to order services;
          Texas attorney Patrick Haines repeatedly contacted Stratos and
           requested that Stratos provide services in connection with a
           multitude of lawsuits involving asbestos-related claims;
          Stratos’s claims relate to legal-support services that were
           requested by or on behalf of Haines;
          Haines is a partner at Napoli Shkolnik PLLC and is the partner
           in charge of the firm’s asbestos litigation group;
          for at least the last five years, Haines has handled thousands of
           asbestos-related cases for the Napoli appellants, including the
           cases for which Stratos performed legal services at issue in this
           action;
          Haines was licensed to practice law in Texas in 1992, associated
           with Napoli Shkolnik PLLC, with a “primary practice location”
           in Houston, Texas;
          Haines’s office address is 3001 Esperanza Crossing #1063,
           Austin, TX 78758;
          Haines has entered appearances in Texas courts on behalf of
           Napoli Bern Ripka Shkolnik LLP;

                                          4
    Napoli Shkolnik PLLC maintains a public website, which states
     it is a national litigation firm with an office in Austin, Texas, and
     has a specific webpage devoted to its Texas office;
    Napoli Shkolnik PLLC expressly represents that it maintains
     “experienced and professional attorneys in Austin, Texas” that
     “are ready to serve you” and that “Texas attorneys are standing
     by, waiting to assist you with a plethora of legal needs you may
     have”;
    Haines is identified as the “managing attorney” of the Texas
     office, who “has successfully tried cases to verdict in Texas”;
    Haines has resided continuously in Texas since 2014, and is or
     was a partner and/or member of each of the Napoli appellants
     during the same time period;
    each of the Napoli appellants is a citizen of Texas for purposes
     of personal jurisdiction because the jurisdictional citizenship of
     a limited partnership and/or a limited liability company is
     determined by reference to its partners or members;
    Haines had actual or apparent authority to represent the Napoli
     appellants in connection with the transactions at issue, which
     arose as a result of communications to Stratos initiated by Haines
     or his agents;
    Stratos believed that it was doing business and entering into
     agreements with a Texas resident;
    the Napoli appellants have specifically availed themselves of the
     jurisdiction of Texas courts by maintaining continuous
     operations in Texas, conducting ongoing business in the Austin
     office, directing marketing/solicitation communications to Texas
     residents, appearing in Texas courts, and employing
     Texas-licensed attorneys to practice law in Texas;
    all or a substantial part of the events or omissions giving rise to
     Stratos’s claims occurred in Harris County; and
    the Napoli appellants and Stratos entered into oral and written
     agreements and the Napoli appellants breached those agreements
     causing Stratos to sustain damages.
The trial court denied the Napoli appellants’ special appearance without

                                    5
specifying which type of jurisdiction it found. In three issues, the Napoli appellants
contend that their Texas contacts were insufficient to justify either general or specific
jurisdiction.

A. Applicable law and standard of review

      Whether a trial court has personal jurisdiction over a defendant is a question
of law that we review de novo, but the trial court frequently must resolve questions
of fact in order to decide the issue. BMC Software Belg., N.V. v. Marchand, 83
S.W.3d 789, 794 (Tex. 2002). When, as here, a trial court does not issue findings of
fact and conclusions of law with its ruling on a special appearance, all findings
necessary to support the ruling and supported by the evidence are implied, although
the sufficiency of the record evidence to support those findings may be challenged
on appeal. Id. at 795.

      The broad “doing business” language in the Texas long-arm statute allows the
exercise of personal jurisdiction to “reach[] as far as the federal constitutional
requirements of due process will permit.” U-Anchor Advert., Inc. v. Burt, 553
S.W.2d 760, 762 (Tex. 1977) (interpreting former Revised Statutes art. 2031b, Act
of Mar. 18, 1959, 56th Leg., R.S., ch. 43, § 4, 1959 Tex. Gen. Laws 85, 85–86
(amended 1979) (current version at Tex. Civ. Prac. & Rem. Code § 17.042)). Due
process is satisfied when the nonresident defendant has established minimum
contacts with the forum state and the exercise of jurisdiction comports with
traditional notions of fair play and substantial justice. Int’l Shoe Co. v. Washington,
326 U.S. 310, 316 (1945).

      A nonresident defendant’s minimum contacts can create either general or
specific jurisdiction. TV Azteca v. Ruiz, 490 S.W.3d 29, 37 (Tex. 2016). Minimum
contacts exist when the nonresident defendant purposefully avails itself of the
privilege of conducting activities within the forum state, thus invoking the benefits
                                           6
and protections of its laws. Michiana Easy Livin’ Country, Inc. v. Holten, 168
S.W.3d 777, 784 (Tex. 2005). There are three components to the “purposeful
availment” inquiry. Searcy v. Parex Res., Inc., 496 S.W.3d 58, 67 (Tex. 2016). First,
the relevant contacts are those of the defendant, not the unilateral activity of another
party or a third person. Id. Second, the contacts must be purposeful rather than
random, fortuitous, isolated, or attenuated. Id. Third, the defendant must seek some
benefit, advantage, or profit by availing itself of the jurisdiction. Id.

      General jurisdiction is party focused. A trial court has general jurisdiction
over a nonresident defendant when the defendant’s contacts with the forum state are
so continuous and systematic that the defendant is essentially at home in the state.
TV Azteca, 490 S.W.3d at 37. When a nonresident defendant is subject to general
jurisdiction, the trial court may exercise jurisdiction over the defendant even if the
plaintiff’s cause of action does not arise from or relate to the defendant’s contacts
with the forum. Id. This test requires substantial activities within the forum and is
more demanding than the test for specific jurisdiction. Id. The paradigm forum for
the exercise of general jurisdiction over a corporation is a place in which it is fairly
regarded as at home, such as the place of incorporation and principal place of
business. Daimler AG v. Bauman, 571 U.S. 117, 137 (2014).

      Specific jurisdiction is transaction focused. A trial court has specific
jurisdiction over a nonresident defendant when (1) the defendant’s contacts with the
forum state are purposeful and (2) the cause of action arises from or relates to those
contacts. Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010).
When a nonresident defendant is subject to specific jurisdiction, the trial court may
exercise jurisdiction over the defendant even if the defendant’s forum contacts are
isolated or sporadic. TV Azteca, 490 S.W.3d at 37. In conducting a specific-
jurisdiction analysis, we focus on the relationship among the defendant, the forum,

                                            7
and the litigation. Kelly, 301 S.W.3d at 658. Generally, a specific-jurisdiction
analysis should be performed on a claim-by-claim basis. Moncrief Oil Int’l, Inc. v.
OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013). When separate claims are based
on the same forum contacts, however, a separate analysis of each claim is not
required. Id. at 150–51. Here, Stratos bases all its claims on the same purported
contacts with Texas.

      In a special appearance, the plaintiff and the defendant bear shifting burdens
of proof. Kelly, 301 S.W.3d at 658. The plaintiff bears the initial burden of pleading
sufficient facts to bring a nonresident defendant within the reach of the Texas
long-arm statute. Id.; see Tex. Civ. Prac. & Rem. Code Ann. § 17.042. If the plaintiff
meets its initial burden, the burden then shifts to the defendant to negate all bases of
personal jurisdiction alleged by the plaintiff. Kelly, 301 S.W.3d at 658. “Because the
plaintiff defines the scope and nature of the lawsuit, the defendant’s corresponding
burden to negate jurisdiction is tied to the allegations in the plaintiff’s pleading.” Id.
A defendant can negate jurisdiction on either a factual or a legal basis. Id. at 659.
“Factually, the defendant can present evidence that it has no contacts with Texas,
effectively disproving the plaintiff’s allegations.” Id. Or the defendant can show that
even if the plaintiff’s alleged facts are true, the evidence is legally insufficient to
establish jurisdiction. Id. If the defendant meets its burden of negating all alleged
bases of personal jurisdiction, then the plaintiff must respond with evidence
“establishing the requisite link with Texas.” See id. at 660.

      Once the court concludes that the defendant has sufficient minimum contacts
with the state to establish personal jurisdiction, the defendant bears the burden of
establishing that the exercise of personal jurisdiction would offend traditional
notions of fair play and substantial justice. Guardian Royal Exch. Assurance, Ltd. v.
English China Clays, P.L.C., 815 S.W.2d 223, 231 (Tex. 1991).

                                            8
       To determine whether the exercise of personal jurisdiction offends traditional
notions of fair play and substantial justice, the court considers: (1) the burden on the
defendant; (2) the interests in the forum state in adjudicating the dispute; (3) the
plaintiff’s interests in obtaining convenient and effective relief; (4) the interstate
judicial system’s interest in obtaining the most efficient resolution of controversies;
and (5) the shared interest of the states in furthering fundamental substantive social
policies. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476–77 (1985); Guardian
Royal, 815 S.W.2d at 231. Only in rare cases will the exercise of personal
jurisdiction not comport with fair play and substantial justice when a nonresident
defendant has purposefully availed itself of the privilege of conducting business
within a forum. Guardian Royal, 815 S.W.2d at 231.

B. The Napoli appellants’ exhibits

       At the hearing, Stratos objected that the Napoli appellants’ amended special
appearance “did not include any exhibits that had been attached to the prior version”
and did not “actually provide any evidence to the court from which it can make any
findings of fact to determine a special appearance should be granted.” The Napoli
appellants responded that case law “allowed [them] to amend a special appearance
or to add a verification” and that their filed affidavits were “good affidavits.” On
appeal, Stratos argues that the denial of the Napoli appellants’ special appearance
should be affirmed because they filed “an Amended Special Appearance without any
evidence in support.”2

       2
          In addition, as it did below, Stratos argues that the Napoli appellants’ special appearance
should be denied because they filed an unsworn special appearance and the affidavits from Maslo
and Haines did not swear to the veracity of the special appearance itself or address all the factual
allegations therein. We disagree. An unverified special appearance does not waive or concede
jurisdiction; under rule 120a, a party is able to cure an unverified special appearance by filing an
amendment that adds a verification (even after the ruling) as long as the amendment is filed before
there is a general appearance. Tex. R. Civ. P. 120a; Dawson-Austin v. Austin, 968 S.W.2d 319,
                                                 9
       Rule 120a provides that the trial court “shall determine the special appearance
on the basis of 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). Rule 120a also provides
that “affidavits, if any, shall be served at least seven days before the hearing, 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.” Id.
Rule 120a does not, however, contain any language that the trial court shall not
consider affidavits and attachments filed in conjunction with a prior special
appearance that was unverified. The Napoli appellants filed all their exhibits,
including affidavits, more than seven days before the hearing. See id.

       Stratos did not object that such exhibits were otherwise defective or
inadmissible. To the contrary, Stratos attached Haines’s original declaration as an
exhibit to its own first amended petition. At multiple points during the hearing,

322 (Tex. 1998); see Exito Elecs. Co. v. Trejo, 142 S.W.3d 302, 307–08 (Tex. 2004) (per curiam)
(even assuming verification and affidavit were defective, “there was more in the record for the trial
court’s consideration at the time of the special appearance,” such as pleadings and deposition of
defendant’s corporate representative).
        Here, prior to the hearing, the Napoli appellants filed an amended special appearance with
a verification from Haines attesting that the factual statements contained in the amended special
appearance were true and correct under penalty of perjury. In Casino Magic Corp. v. King, 43
S.W.3d 14, 18 & n.4 (Tex. App.—Dallas 2001, pet. denied), and Prosperous Maritime Corp. v.
Farwah, 189 S.W.3d 389, 392–93 (Tex. App.—Beaumont 2006, no pet.), cases cited by Stratos,
the defendants did not amend their special appearances to add a verification. Stratos did not
challenge the Napoli appellants’ verification as defective. Nor did Stratos contend that the Napoli
appellants waived their special appearance or violated rule 120a’s due-order-of-hearing
requirement by seeking affirmative relief on any other motion inconsistent with a special
appearance before obtaining a ruling on their special appearance. Compare Nationwide Distrib.
Servs., Inc. v. Jones, 496 S.W.3d 221, 228 (Tex. App.—Houston [1st Dist.] 2016, no pet.) (waiver
when defendants elected to have motion to compel heard before special appearance), with
Wakefield v. British Med. Journal Publ’g Group, Ltd., 449 S.W.3d 172, 182–83 (Tex. App.—
Austin 2014, no pet.) (no waiver when defendants did not specifically seek to have anti-SLAPP
motion to dismiss heard before special appearance).

                                                 10
counsel for Stratos expressly referred to and relied on certain facts contained in
Haines’s declarations. Nor did the trial court rule that the Napoli appellants’
previously filed exhibits were defective or inadmissible, or strike any of the exhibits.
Instead, the trial court itself expressly referenced Haines’s declarations. See In re
D.J.L., No. 14-16-00342-CV, 2016 WL 6108341, at *3 (Tex. App.—Houston [14th
Dist.] Oct. 18, 2016, no pet.) (mem. op.).

      Finally, Stratos’s argument that, under rule 65, the Napoli appellants’
amended special appearance supplanted the prior version, including all the
attachments, does not apply. Rule 65, contained within section 4 of the Rules of Civil
Procedure entitled, “Pleading,” provides that substituted instruments “shall no
longer be part of the pleading in the record of the case.” Tex. R. Civ. P. 65.
“Pleadings” consist of statements of the plaintiff’s cause of action or the defendant’s
grounds of defense and “shall . . . be by petition and answer.” Id. 45(a–b). In contrast,
a special appearance is made—without regard to the merits of a case—to object to
the court’s jurisdiction “over the person or property of the defendant on the ground
that such party or property is not amenable to process.” Id. 120a. In other words, a
special appearance provides a means to avoid being subjected to or having to file a
pleading. Moreover, the case on which Stratos relies, Armstrong v. Rice, 556 S.W.2d
620, 622 (Tex. App.—Texarkana 1977, writ dism’d), applied rule 65 in the context
of a summary judgment under rule 166a, not a special appearance under rule 120a.
Nor have we located any authority that applies rule 65 to a special appearance under
rule 120a. Regardless, the trial court considered the exhibits, and Stratos did not
object and receive an adverse ruling. See Tex. R. App. P. 33.1(a).

      Therefore, we will consider the Napoli appellants’ exhibits.

      Stratos further argues that this court should disregard Haines’s declarations
because they are demonstrably false and amount to mere equivocation. We decline

                                           11
to do so. First, contrary to Stratos’s contention, in his declarations, Haines did not
merely verify the facts therein as “true and correct to the best of his knowledge.”
Rather, in both declarations, Haines attested that he “declare[d] under penalty of
perjury that the foregoing is true and correct.” See Tex. Dep’t of Pub. Safety v.
Caruana, 363 S.W.3d 558, 564 (Tex. 2012) (“The verity of a declaration is thus
assured by the criminal penalties for perjury . . . .”). Next, Stratos contends that
Haines’s statement that none of his several thousand asbestos cases was filed in
Texas is demonstrably false and this court should take judicial notice of this fact
based on two cases allegedly filed in Texas where Haines has entered his appearance.
However, Stratos has not provided us with proof of these records. See Freedom
Commc’ns, Inc. v. Coronado, 372 S.W.3d 621, 623 (Tex. 2012) (per curiam) (“[A]
court will take judicial notice of another court’s records if a party provides proof of
the records.”). Finally, Stratos argues we should disregard Haines’s declarations
because the Napoli appellants in their amended special appearance cited to his
declarations using terms such as “to the best of [the Napoli appellants’] knowledge,”
“[the Napoli appellants] do not believe,” and “it appears.” But, again, the Napoli
appellants do not point us to any equivocating language contained in the declarations
themselves.

      We will consider Haines’s declarations in our analysis.

C. Specific personal jurisdiction

      The Napoli appellants present three issues: (1) whether the trial court may
exercise general personal jurisdiction over them, (2) whether the trial court may
exercise specific personal jurisdiction over them, and (3) whether Government Code
section 52.059 confers specific jurisdiction over them.

      To begin, the Napoli appellants argue “[t]he trial court’s decision ignored the
applicable legal standards and was instead based on the fact that Patrick Haines, a
                                          12
Partner at Napoli Shkolnik, resides in Texas.” The Napoli appellants cite this
exchange during the special-appearance hearing:

             THE COURT: You know, we all know that George H.W. Bush
      and Barbara Bush had a vacant lot for a long time here and claimed this
      is their resident [sic] so they could vote here while they were traveling
      around to—what did Ms. Bush say? They moved 19 times. He had
      trouble keeping a job. But their residence was in Texas. Even when they
      didn’t have a house here, they had a lot intending to build a house.
            [COUNSEL FOR STRATOS]: He gets to escape every summer
      to Maine.
             THE COURT: That’s right.
            So you know, Mr. Haines says, “My address is 3001 Esperanza
      Crossing, number 1063, Austin, Texas. I declare under penalty of
      perjury that the foregoing is true and correct,” and he signed it.
             So I’m going to deny your motion.
The Napoli appellants do not provide any further explanation or authority for their
position. See Tex. R. App. P. 38.1(i). In any event, the trial court’s written order,
which did not specify any reason for denying the Napoli appellants’ special
appearance, controls over any statement made by the trial court at the hearing. See
Gonzales v. Thorndale Coop. Gin & Grain, —S.W.3d—, 2019 WL 2063120, at *2
(Tex. App.—Houston [14th Dist.] May 9, 2019, no pet. h.).

      Because we must affirm the trial court’s special-appearance ruling on any
legal theory supported by the evidence, Cartlidge v. Hernandez, 9 S.W.3d 341, 345
(Tex. App.—Houston [14th Dist.], no pet.), we focus our analysis on and conclude
that the trial court properly could have denied the Napoli appellants’ special
appearance based on the existence of specific jurisdiction.

      According to Stratos, as it argued below, the trial court properly could exercise
specific jurisdiction over the Napoli appellants according to this multi-factor test
used to determine whether a Texas court has personal jurisdiction over a nonresident

                                         13
buyer of products or services pursuant to a contract:

       (1) the state in which the agreement was solicited (and by whom),
       negotiated, consummated, and performed;
       (2) whether, after entering into the agreement, the nonresident directed
       communications to Texas in furtherance of the transaction(s);
       (3) whether the nonresident earned a profit in Texas from the
       transaction(s);
       (4) whether the nonresident paid the cost to ship the goods from Texas;
       (5) whether the nonresident placed follow-up orders;
       (6) whether Texas law governed the transactions; and
       (7) whether payments were sent or to be sent to Texas.
P.V.F., Inc. v. Pro Metals, Inc., 60 S.W.3d 320, 325 & n.10 (Tex. App.—Houston
[14th Dist.] 2001, pet. denied) (op. on reh’g); see Nance Int’l, Inc. v. OceanMaster
Eng’g PTE, Ltd., No. 01–11–00664–CV, 2012 WL 5381224, at *6 (Tex. App.—
Houston [1st Dist.] Nov. 1, 2012, no pet.) (mem. op.) (applying factors from P.V.F.).

       The Napoli appellants dispute the applicability of such test.3 Such a
multi-factor test, however, is entirely consistent with the jurisdictional jurisprudence
of the United States Supreme Court. When the litigation concerns a contract between
the parties, the mere fact the parties entered that contract does not automatically
establish sufficient minimum contacts in the other party’s home forum. See Burger
King, 471 U.S. at 478; Michiana, 168 S.W.3d at 786. Instead, whether and to what
extent a contract constitutes a defendant’s purposeful “contact” with the forum state

       3
          The Napoli appellants did not expressly address these factors in their reply to Stratos’s
opposition to the special appearance or in their opening brief. As they did below, the Napoli
appellants instead argue that they merely contracted with, merely communicated with, and merely
did (not) send payments to a Texas entity. However, the cases on which they rely do not persuade
us based on the facts as presented in this case. This particular situation did not concern a passive,
one-time transaction, was not expressly to be governed by foreign law, and was not one where all
material performance occurred outside Texas.

                                                 14
must be considered pursuant to multiple factors that reflect a “highly realistic”
approach. Burger King, 471 U.S. at 478–79 (parties’ negotiations and contemplated
future consequences, along with terms of contract and parties’ actual course of
dealing, must be evaluated in determining whether defendant has purposefully
established minimum contacts with forum). This is why we do not merely consider
“whether certain of [the Napoli] appellants’ contacts with Texas, standing alone, are
sufficient to subject them to personal jurisdiction here” but instead, “whether there
is a substantial connection between all of [the Napoli] appellants’ Texas contacts
considered collectively, and the operative facts of the litigation.” See Dodd v. Savino,
426 S.W.3d 275, 286 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (citing P.V.F.,
60 S.W.3d at 326).

      In any event, the Napoli appellants argue that the test overwhelmingly favors
them. We disagree.

      Solicitation, negotiation, consummation, and performance in Texas. The
Napoli appellants assert that this factor favors them because all but two depositions
were ordered by their employees in other states than Texas and because the
agreements were performed in other states by reporters in those states for litigation
pending outside Texas.

      Haines has been a Texas resident since April 2014, is an attorney apparently
only licensed in Texas, manages Napoli Shkolnik PLLC’s Texas office, and is the
“Partner in charge of the firm’s asbestos litigation group.” The Napoli appellants,
including Haines, were using Stratos for depositions and other work as early as
February 2015. The Napoli appellants knew that the litigation-support service
provider with which they were contracting was based in Texas. See Parex Res., Inc.
v. ERG Res., LLC, 427 S.W.3d 407, 421–22 (Tex. App.—Houston [14th Dist.]
2014), aff’d sub nom. Searcy v. Parex Res., Inc., 496 S.W.3d 58 (Tex. 2016). Haines

                                          15
was personally named as the contact and addressee for the Napoli appellants on
several invoices, including one addressed to “Patrick N. Haines, Napoli, Bern,
Ripka, Shkolnik & Associates, LLP, 3001 Esperanza Crossing, Suite 1063, Austin,
TX 78578.” In addition, a Stratos account statement was addressed to “Accounts
Payable, Napoli, Bern, Ripka, Shkolnik & Associates, LLP, 3001 Esperanza
Crossing, Suite 1063, Austin, TX 78578.”

       In his declaration, asbestos-litigation partner-in-charge Haines stated that it
was “[his] staff” located in California and Illinois who would have placed orders for
depositions with Stratos.4 In other words, the Stratos depositions were ordered
pursuant to the direction of Haines, who according to his declaration, spends half his
time working from Texas. In addition, the May 2015 text-message exchange
between Haines and Chandler indicates that Haines was the Napoli appellants’ point
person with Chandler at Stratos regarding payment issues for its previous work done
for the Napoli appellants and for future asbestos deposition business. Haines
indicated that most asbestos depositions would be in California, Missouri, and
Illinois but emphasized they were “long duration” and it was frequently up to Haines
and the Napoli appellants to “pick” their reporter. After this exchange, the invoices
and statements show that the Napoli appellants, including Haines, continued using
Stratos for deposition services.

       Later, in an October 2015 text-message exchange, Chandler asked Haines
why “[his] people called to cancel a [California] depo that wasn’t even set with us”
and told Haines “[y]ou are cheating on me.” Haines then complained to Chandler
about the quality of the reporters Stratos was using and stated that another individual
heading the Napoli appellants’ “depo department” (Clay Carroll) was “agitating to

       4
         Stratos’s other account statements were addressed to the accounts-payable departments
of the Napoli appellants in California and Illinois.

                                             16
use” another company. Chandler disputed any quality issues because Stratos only
uses “experienced asbestos ladies.” Chandler also told Haines “[that other company]
will not cut you the deal I have.” Haines encouraged Chandler to talk to and meet
Carroll, who was “in Dallas,” and indicated Chandler could use Haines’s name in
negotiations. After this exchange, the invoices and statements show that the Napoli
appellants, including Haines, continued using Stratos for deposition services through
May 2016. The total number of “jobs” Stratos provided to the Napoli appellants from
February 2015 to May 2016 was over 100.

      Although the depositions physically occurred outside Texas, the record
reasonably supports that Stratos was coordinating services from its Houston office,
including scheduling and staffing depositions, i.e., making sure to “put experienced
asbestos” reporters on the Napoli appellants’ “jobs.” The text messages between
Haines and Chandler indicate that Stratos’s staffing decisions were not de minimus;
improper staffing on the front end could result in “problems” and loss of additional
jobs. Haines complained, and Chandler denied, that Stratos had caused such
problems due to its staffing choices. These agreements were not solely and entirely
performed outside Texas. Unlike the cases relied on by the Napoli appellants in their
brief, a material portion of the parties’ over-100 contracts was performed in Texas.

      In sum, the evidence indicates that the agreements were solicited by a Texas
attorney or staff acting under his direction and that a Texas attorney who spends half
his time working in Texas was instrumental in negotiating and deciding to use
Stratos’s deposition services. The agreements were partially performed in Texas,
where Stratos’s staffing decisions were made. We conclude that this factor weighs
in favor of Stratos.

      Continued communications directed to Texas in furtherance of the
transactions. The Napoli appellants do not dispute that all their requests for Stratos

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to provide deposition and other services on their asbestos cases were directed to
Stratos in Texas, even if those requests originated in another state. The evidence
further indicates that certain of these communications were initiated by Texas
attorney and resident Haines while he was working from his firm’s office in Austin,
and that the other orders for depositions were placed by “his staff”—employees of
the Napoli appellants working under the direction of Haines, the partner in charge
of the Napoli appellants’ asbestos litigation. In addition, in multiple text messages,
Haines communicated with Chandler regarding payment issues and whether and
how Stratos would continue to be involved in the Napoli appellants’ deposition
work. Haines also encouraged Chandler to contact another individual with the
Napoli appellants in Dallas to ensure that Stratos could continue to receive
deposition work from them. The Napoli appellants acknowledge that their
communications were related to the execution and performance of the agreements.
Nevertheless, without further explanation or record citation, see Tex. R. App. P.
38.1(i), the Napoli appellants argue that this factor favors them. We disagree. The
substance of these communications concerned not simply that the parties had an
agreement, but also how Stratos should perform to retain the Napoli appellants as an
ongoing customer. We conclude that this factor tends to weigh in favor of Stratos.

      Earning a profit in Texas from the transactions. The Napoli appellants next
argue that this factor favors them because they did not earn a profit in Texas related
to the services at issue. They do not cite any record evidence or authority. See Tex.
R. App. P. 38.1(i). Stratos did not address this factor below or on appeal. However,
the record reflects that the Napoli appellants were not merely passive customers
which did not “profit” in any way from their relationship in Texas with Stratos. See
P.V.F., 60 S.W.3d at 327. At the least, the Napoli appellants were benefitting
through the “deal” Stratos “cut” them—i.e., they saved costs by sourcing their

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asbestos depositions from Stratos in Texas instead of from other litigation-support
providers. We conclude that this factor slightly favors Stratos.

      Whether the nonresident paid the cost to ship the goods from Texas. Without
citing the record or authority, see Tex. R. App. P. 38.1(i), the Napoli appellants
contend that this factor favors them because services were provided by court
reporters in out-of-state locations where depositions were taken. Stratos did not
address this factor below or on appeal. Several invoices reflect that Stratos, with an
address in Houston, supplied bound copies of transcripts and digitized videos
shipped as final litigation-service products to the Napoli appellants, including to
Haines in Texas. However, the invoices do not expressly state the origin state of
shipping. We conclude that this factor is neutral.

      Whether the nonresident placed follow-up orders. The Napoli appellants
concede that this factor favors Stratos.

      Whether Texas law governed the transactions. The Napoli appellants argue
that this factor favors them because it is doubtful Texas law would even apply to the
two transactions ordered in Texas. Stratos argues that because the invoices were
negotiated, contracted, and performance/payment was due in Texas, Texas law
governs. However, here, there is no evidence any party specified either that Texas
law or some law other than Texas law would apply. Where the agreements
themselves are silent on choice of law, we conclude that this factor is neutral.

      Whether payments were sent or to be sent to Texas. The Napoli appellants also
concede that this factor favors Stratos.

      In this particular case, based on the totality of factors in this test, the majority
of which tend to favor Stratos, we conclude the trial court properly could have
determined that the Napoli appellants purposefully availed themselves of the

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privilege of conducting business within Texas. See P.V.F., 60 S.W.3d at 325–26
(recognizing that cases in which a Texas seller sues an out-of-state buyer tend to
hinge on “narrow factual distinctions”). In addition, we conclude that the trial court
properly could have determined that all of Stratos’s causes of action arose from or
related to the Napoli appellants’ purposeful contacts in connection with the over-100
jobs Stratos performed for them.

D. Fair play and substantial justice

      Although we have concluded the Napoli appellants had sufficient minimum
contacts with Texas constituting purposeful availment of this forum, we also must
consider whether exercising specific jurisdiction over the Napoli appellants would
offend traditional notions of fair play and substantial justice. See Int’l Shoe, 326 U.S.
at 316; BMC Software, 83 S.W.3d at 795.

      The Napoli appellants bear the burden of presenting “a compelling case that
the presence of some other considerations would render jurisdiction unreasonable.”
See Burger King, 471 U.S. at 477; Guardian Royal, 815 S.W.2d at 231. Despite this
burden, they present no issue or argument on this point. See Tex. R. App. P. 38.1(f),
(i). In any event, on this record, we conclude this is not one of those rare cases in
which a Texas court’s exercise over a nonresident defendant with sufficient
minimum contacts would offend due process. See Guardian Royal, 815 S.W.2d at
231. First, there would be little to no burden on the Napoli appellants to adjudicate
the dispute in Texas—a state in which they maintain a Texas office, have a partner
who was the point of contact for the agreements at issue, and have successfully tried
cases to verdict. Second, Texas has an interest in adjudicating claims by its entity
citizens on their breached agreements. See Dodd, 426 S.W.3d at 287 (“The breach
of these contracts plainly resulted in foreseeable harm to . . . a Texas resident.”).
Third, Stratos has an interest in being able to litigate this controversy on the over-100

                                           20
jobs it performed for the Napoli appellants one time, in a single, convenient forum.
Fourth, the interstate judicial system has an interest in the most efficient resolution
of a dispute involving an interconnected series of contracts. Finally, the several states
share an interest in furthering freedom of contract with access to efficient legal
recourse. The Napoli appellants have not met their burden to show that exercising
personal jurisdiction over them offends fair play and substantial justice. See Burger
King, 471 U.S. at 477; Guardian Royal, 815 S.W.2d at 231.

      We overrule the Napoli appellants’ second issue.

      Because we conclude that the trial court properly could exercise specific
jurisdiction over the Napoli appellants and all of Stratos’s claims arise from the same
forum contacts, we do not reach the Napoli appellants’ first and third issues. See
Tex. R. App. P. 47.1; Moncrief Oil, 414 S.W.3d at 150–51; Citrin Holdings, LLC v.
Minnis, 305 S.W.3d 269, 279 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (“The
court need not address general jurisdiction if it finds that a defendant is subject to
specific jurisdiction.”).

                               III.   CONCLUSION

      Accordingly, we affirm the trial court’s order denying the Napoli appellants’
special appearance.

                                         /s/    Charles A. Spain
                                                Justice

Panel consists of Justices Wise, Zimmerer, and Spain.

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