Court Opinion

ID: 2877260
Source: CourtListenerOpinion
Date Created: 2015-09-06 06:56:46.020597+00
Date Added: 2024-06-11T11:35:44.555965
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                       NO. 03-08-00198-CV

                                L. Ray Calhoun & Co., Appellant

                                                  v.

                        Railroad Salvage & Restoration, Inc., Appellee

             FROM THE COUNTY COURT AT LAW NO. 1 OF HAYS COUNTY
            NO. 10933-C, HONORABLE HOWARD WARNER, JUDGE PRESIDING

                            MEMORANDUM OPINION

               L. Ray Calhoun & Co. (Calhoun) filed suit in Texas against Railroad Salvage

& Restoration, Inc. (RSR), a Missouri corporation, for breach of contract. The contract that is the

subject of the suit called for Calhoun to transport scrap railroad materials from San Antonio, Texas,

to Joplin, Missouri. RSR filed a special appearance, claiming that it was not subject to the

jurisdiction of the Texas courts. After a hearing, the trial court granted RSR’s special appearance

and dismissed the suit. For the reasons set forth below, we affirm the trial court’s order granting

RSR’s special appearance.

                                         BACKGROUND

               Calhoun is a railroad service contractor that carries out various projects related to the

railroad, including the collection and disposal of materials from abandoned railroad tracks. RSR is

in the business of recovering scrap metal. In April 2006, an employee of RSR who was in Texas at
the time, Robert Weston, called L. Ray Calhoun (Ray), the owner of Calhoun. Weston was in Texas

trying to locate scrap metal that could be hauled from Texas to RSR in Joplin, Missouri. The parties

dispute some of the substance of the phone conversation that occurred between Weston and Ray, but

they at least agree that the two men discussed the possibility of Calhoun hauling scrap metal from

Texas to Missouri for RSR.

               RSR filed two affidavits in the trial court in support of its special appearance, one

from Weston, an employee of RSR, and the other from G.W. Jackson, an officer of RSR. In

Weston’s affidavit, he explained the purpose of his phone call to Ray and the events that occurred

during and after the call:

               I contacted Ray Calhoun while I was in Sugarland, Fort Bend County,
               Texas, because I was told he might know the whereabouts of a
               particular person in Texas I needed to speak with. Mr. Calhoun asked
               me what business I was involved in, and when I told him, he said the
               person I was looking for was not the best person for the job, and he
               offered to haul the scrap metal. I told him that I could not make any
               agreements with him, and that if he wanted to offer his services, he
               should contact [RSR] in Joplin, Missouri and speak with Mr. G.W.
               Jackson. I made it clear to Mr. Calhoun that I had no authority to
               make contracts or agreements for [RSR] regarding the hauling of
               scrap metal. Later Mr. Calhoun told me he contacted Mr. Jackson in
               Missouri, and Mr. Calhoun faxed me an agreement while I was at a
               hotel in Sugarland, Fort Bend County, Texas. I received
               authorization from Mr. G.W. Jackson in Joplin, Missouri to proceed
               with the agreement.

Weston ultimately signed the agreement, and underneath his signature, wrote “Per G.W. Jackson.”

Jackson’s affidavit confirmed Weston’s representations regarding the circumstances leading up to

the signing of the contract.

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                At the hearing on RSR’s special appearance, Ray testified that Weston called him

because he wanted to speak to him specifically. When RSR’s attorney questioned whether Weston

was calling to locate someone else, Ray responded, “I don’t—that was discussed. I don’t remember

that. The bottom line was we agreed to do what he asked us to do.” Ray also testified that Weston

told him that he had authority to make agreements but that he wanted Ray to call Jackson to have

Jackson review the agreement and make sure it was satisfactory.

                Under the agreement, Calhoun was to remove and disassemble an abandoned railroad

track in San Antonio, salvage the parts of the track, load the material onto trucks, and transport the

material to Missouri. Calhoun ultimately salvaged material and transported it to Missouri, but a

dispute arose as to whether it did so in accordance with the contract. Calhoun filed suit against RSR,

alleging that RSR failed to pay the full amount due for the project. RSR filed a special appearance,

and the trial court held a hearing. After the hearing, the trial court granted RSR’s special appearance

and filed findings of fact accepting RSR’s version of the facts as set forth in the affidavits of Weston

and Jackson. This appeal followed.

                                          DISCUSSION

Evidentiary Challenges

                As an initial matter, we address Calhoun’s objections to the affidavits filed in support

of RSR’s special appearance. Calhoun argues that the affidavits are not part of the appellate record

because RSR failed to offer them into evidence at the hearing, and alternatively, that one of the

affidavits includes legal conclusions that should not be considered. We address these objections

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initially because Calhoun’s sole issue on appeal, whether RSR is subject to personal jurisdiction in

Texas, relies in part on the contested evidence.

                 Calhoun contends that the trial court erred in considering the affidavits of both

Weston and Jackson because RSR never offered them into evidence. However, it is undisputed that

the affidavits were attached to RSR’s special appearance and filed in the trial court more than a

month before the hearing. Further, Calhoun does not point to, and we have not found, any authority

for the proposition that affidavits attached to a special appearance and filed in the trial court well

before the hearing must be formally offered into evidence at the hearing. A trial court determines

a special appearance on the basis of the pleadings, 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. See Tex. R. Civ. P. 120a(3). Nothing in rule 120a(3) requires that affidavits filed

in support of a special appearance must then be formally introduced into evidence at the hearing.

Because we know of no authority to support Calhoun’s contention, we overrule this objection on

appeal.

                 Calhoun also argues that the trial court erred in declining to strike six provisions

containing legal conclusions in Jackson’s affidavit. The provisions of which Calhoun complains are

the following:

                 Furthermore, [Calhoun] has not pled facts or legal justification to
                 support an assertion of personal jurisdiction over [RSR] by the Texas
                 courts.

                 The title to the scrap metal is transferred outside of Texas.

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               [RSR] does not . . . purposefully direct any activities to or in Texas
               for any business venture or in order to sell products or services to
               [Calhoun] or to anyone else in Texas. [RSR] does not and did not
               purposefully avail itself of the laws of Texas. No action in Texas by
               [RSR] should have caused it to reasonably foresee being hailed into
               Texas Courts. [RSR] did not engage in a purposeful activity in Texas
               which is related to any cause of action or wrong incurred by
               [Calhoun].

               [RSR] sought to profit from servicing contracts with entities who are
               not Texas residents and any contract with Texas [was] merely
               incidental to those out-of-state agreements.

               [RSR] does not have minimum contacts with the State of Texas either
               specifically based on the facts of this case, or generally in the form of
               continuous and systematic contacts with Texas. Furthermore, it
               would be contrary to the notions of fair play and substantial justice
               for [RSR] to have to defend itself in Texas.

               [RSR] and its property is simply not amenable to process issued by
               the Courts of Texas. Therefore, [RSR’s] special appearance should
               be granted and the suit against it dismissed.

In response to Calhoun’s argument, RSR contends that Calhoun waived error on this objection by

failing to obtain a ruling on it in the trial court. However, conclusory statements in an affidavit are

substantively defective, and defects in the substance of an affidavit are not waived by the failure to

obtain a ruling from the trial court.1 See Stewart v. Sanmina Tex. L.P., 156 S.W.3d 198, 207

       1
         An objection that a statement in an affidavit is conclusory does not mean that conclusions
based on stated underlying facts are improper. Rizkallah v. Conner, 952 S.W.2d 580, 587
(Tex. App.—Houston [1st Dist.] 1997, no writ). Such statements are proper in both lay and expert
testimony. Id. An objectionable statement is one that is nothing more than an unsupported legal
conclusion. Id. (citing Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991); Brownlee v. Brownlee,
665 S.W.2d 111, 112 (Tex. 1984)). Such statements reduce to a legal issue a matter that should be
resolved by relying on facts, and they amount to little more than the witness choosing sides on the
outcome of the case. Id.

                                                  5
(Tex. App.—Dallas 2005, no pet.); McMahan v. Greenwood, 108 S.W.3d 467, 498

(Tex. App.—Houston [14th Dist.] 2003, pet. denied). Thus, substantive defects in an affidavit may

be raised for the first time on appeal. See Stewart, 156 S.W.3d at 207; McMahan, 108 S.W.3d at

498. Nevertheless, even if we assume that the statements are legal conclusions and disregard them,

a significant portion of the affidavit, including numerous relevant factual statements, still remains

to be considered. Calhoun does not claim that the trial court should have stricken the entire affidavit,

nor would such an action be proper.2           See Ennis v. Loiseau, 164 S.W.3d 698, 703-04

(Tex. App.—Austin 2005, no pet.) (upholding trial court’s exclusion of only conclusory portions of

special appearance affidavit). Because we rely on only the factual statements in the affidavit in

determining whether RSR is subject to the jurisdiction of Texas courts, the alleged conclusory

statements are extraneous to our analysis. Thus, we assume without deciding that the statements of

which Calhoun complains should be excluded, and we consider only the remaining portions of the

affidavit in our jurisdictional analysis. See id.

Personal Jurisdiction

                We turn now to Calhoun’s sole issue, whether RSR is subject to personal jurisdiction

in Texas. Specifically, Calhoun argues that it presented ample undisputed evidence to support an

        2
          Even at the hearing in the trial court, Calhoun conceded that the court could consider the
remaining portions of Jackson’s affidavit. After objecting to parts of the affidavit as conclusory,
Calhoun’s attorney stated: “The factual stuff is obviously properly before the [c]ourt and can be
considered by the [c]ourt.” Further, neither of the two cases cited by Calhoun on appeal suggests
that a court should strike an entire affidavit merely because the affidavit contains some conclusory
statements. See Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984) (stating that conclusory
summary-judgment affidavit “should have gone further and specified factual matters”); Anchia
v. DaimlerChrysler, 230 S.W.3d 493, 499-500 (Tex. App.—Dallas 2007, pet. denied) (upholding
trial court’s exclusion of special-appearance affidavit because every statement but one was
conclusory and remaining statement did not impact jurisdictional analysis).

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exercise of the court’s jurisdiction over RSR, and that RSR presented no evidence, or insufficient

evidence, to support the court’s decision to grant RSR’s special appearance. Calhoun contends that

RSR had sufficient minimum contacts with Texas arising out of the specific transaction at issue to

be subject to the jurisdiction of Texas courts.

               Whether a trial court properly granted or denied a special appearance is a question

of law that we review de novo. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794

(Tex. 2002). We will affirm the trial court’s determination on any legal theory supported by the

evidence. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990).              However, in making a

jurisdictional determination, the trial court must resolve necessary factual questions. See BMC

Software, 83 S.W.3d at 794. Here, the trial court filed findings of fact that Calhoun does not

challenge on appeal. When a trial court’s findings of fact are unchallenged on appeal, they are

entitled to the same weight as a jury verdict. McGalliard v. Kuhlmann, 722 S.W.2d 694, 696

(Tex. 1986). Each of them is binding on an appellate court unless the contrary is established as a

matter of law or there is no evidence to support the finding. Id.

               In this case, the trial court made the following nineteen findings of fact:

               1. [RSR] was the only defendant sued by [Calhoun] in this case.
               [Calhoun] brought suit in a Texas court against [RSR] in its corporate
               capacity.

               2. [RSR] is a nonresident of Texas, and is a corporate resident of
               Missouri. [RSR] is a Missouri corporation with its principal place of
               business and domicile in Joplin, Missouri.

               3. [RSR] has never resided in Texas, registered to do business in
               Texas, held any license or permit issued by the State of Texas, owned
               or leased businesses, buildings, equipment, or had employees who
               resided in Texas.

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4. [RSR] does not employ persons who reside in Texas, sell items
directly to persons in Texas, render services to anyone in Texas, have
a mailing address in Texas, or employ sales agents in Texas. It does
not routinely make contracts in Texas.

5. [RSR] has never owned real estate in Texas, had a bank account in
Texas, advertised in Texas, had a telephone book listing in Texas,
made unsolicited calls to procure business in Texas, or sent
unsolicited mailings in or to Texas.

6. [RSR] has never brought suit in Texas or previously been sued in
Texas.

7. [RSR] has not purposefully directed any activities to or in Texas in
order to sell products to [Calhoun] or anyone else.

8. [RSR] occasionally sends an employee to Texas to retrieve scrap
metal pursuant to a contract between [RSR and] an entity that resides
outside of Texas.

9. While temporarily in Texas, an employee of [RSR] called
[Calhoun] to determine whether Ray Calhoun, [Calhoun’s] owner,
knew the whereabouts of a particular person.

10. [Calhoun], in that conversation, offered (through Mr. Ray
Calhoun) to [RSR’s] employee to perform the service of hauling
scrap metal from Texas to Missouri.

11. [RSR’s] employee told [Calhoun] to contact Mr. G.W. Jackson at
[RSR’s] corporate office in Joplin, Missouri, because the employee
could not make agreements for [RSR].

12. [Calhoun] contacted G.W. Jackson (an officer of RSR) in Joplin,
Missouri and offered its services to haul scrap metal to Joplin,
Missouri.

13. [Calhoun] negotiated and consummated the agreement with Mr.
G.W. Jackson to haul scrap metal to Missouri while Mr. G.W.
Jackson was in Joplin, Missouri.

14. [Calhoun] drafted and offered its written confirmation of the
agreement it had previously reached with Mr. G.W. Jackson and sent
it to [RSR’s] employee who was temporarily in Texas at the time.

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                15. Mr. G.W. Jackson authorized Robert Weston to confirm the
                agreement reached in [Calhoun’s] telephone call to [RSR’s] officer,
                Mr. G.W. Jackson while Jackson was in Joplin, Missouri.

                16. [Calhoun] transported scrap metal to Joplin, Missouri; however,
                the parties dispute whether [Calhoun] did so in accordance with the
                contract.

                17. [Calhoun] demanded that it be paid in Texas.

                18. [RSR] engaged in a single transaction with [Calhoun].

                19. The time and expense for [RSR] to have to travel to Texas to
                defend itself would be a severe and undue burden.

                After reviewing the record, we conclude that there is evidence to support the trial

court’s fact findings in the affidavits of both Weston and Jackson and that contrary findings are not

established as a matter of law. Although portions of Ray’s testimony at the hearing conflicted with

some of the statements in the affidavits, the trial court is the sole judge of a witness’s credibility and

the weight that his testimony should be afforded, and we may not disturb a trial court’s resolution

of evidentiary conflicts turning on those factors. See Ennis, 164 S.W.3d at 706. Accordingly, the

trial court’s findings of fact are binding on this court. See McGalliard, 722 S.W.2d at 696; Davey

v. Shaw, 225 S.W.3d 843, 853 (Tex. App.—Dallas 2007, no pet.).

                Taking the trial court’s fact findings into consideration, we now address Calhoun’s

argument that RSR is subject to the jurisdiction of Texas courts. In support of its argument, Calhoun

relies primarily on the Texas long-arm statute, which states that a nonresident does business in Texas

if it “contracts by mail or otherwise with a Texas resident and either party is to perform the contract

in whole or in part in [Texas].” See Tex. Civ. Prac. & Rem. Code Ann. § 17.042(1) (West 2007).

                                                    9
However, jurisdiction must not only be authorized by the Texas long-arm statute but must also

comport with constitutional guarantees of due process. Schlobohm v. Schapiro, 784 S.W.2d 355,

356 (Tex. 1990). The Texas long-arm statute reaches only as far as the federal Constitution permits.

Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226

(Tex. 1991). Thus, we rely on precedent from the United States Supreme Court and other federal

courts, as well as Texas decisions, to determine whether the assertion of personal jurisdiction is

consistent with the requirements of due process. BMC Software, 83 S.W.3d at 795.

               Personal jurisdiction over a nonresident defendant is constitutional when (1) the

defendant has established minimum contacts with the forum state, and (2) the exercise of jurisdiction

comports with traditional notions of fair play and substantial justice. Id. (citing International Shoe

Co. v. Washington, 326 U.S. 310, 316 (1945)). A nonresident defendant that has “purposefully

availed” itself of the privileges and benefits of conducting business in the forum state has sufficient

contacts to confer personal jurisdiction. Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462,

474-76 (1985)). A defendant should not be subject to jurisdiction based on random, fortuitious, or

attenuated contacts. Id. (citing Burger King, 471 U.S. at 475).

               The minimum contacts analysis includes two types of jurisdiction: specific and

general. Id. Because Calhoun does not contend that general jurisdiction exists, we will confine our

discussion to specific jurisdiction. To ensure compliance with the federal constitutional standard,

Texas has designed its own formula for specific jurisdiction, which includes the following three

factors: (1) the nonresident defendant must purposefully do some act or consummate some

transaction in Texas, thus establishing minimum contacts with the forum; (2) that act or transaction

                                                  10
must be connected with or give rise to the cause of action; and (3) the exercise of jurisdiction must

not offend traditional notions of fair play and substantial justice. See Schlobohm, 784 S.W.2d at 358.

Thus, for specific jurisdiction to exist, the nonresident defendant’s activities must be “purposefully

directed” to the forum, and the litigation must result from injuries arising out of or relating to those

activities. Guardian Royal, 815 S.W.2d at 228. The minimum contacts analysis for specific

jurisdiction is somewhat narrow, focusing on the relationship among the defendant, the forum, and

the litigation. Id.; Schlobohm, 784 S.W.2d at 357. The “touchstone” of our jurisdictional analysis

is whether the nonresident purposefully availed itself of the benefits of conducting business in Texas.

Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005). Because specific

jurisdiction requires a substantial connection between Texas, the lawsuit, and the defendant, not

the plaintiff, we focus not on where the injury was felt but on the defendant’s actions in Texas. Id.

at 789-90.

               RSR’s actions in Texas include the following: temporarily sending an employee,

Weston, to Texas to locate scrap metal and arrange for it to be hauled to Missouri; calling Calhoun

in Texas to locate a third party and then discussing an agreement with Calhoun over the phone when

Calhoun initiated the topic; discussing and confirming the agreement with Calhoun in a telephone

call from Calhoun to Jackson, RSR’s officer in Missouri; authorizing the agreement in a

communication between Jackson in Missouri and Weston in Texas; signing the agreement in Texas;

entering into a contract with a Texas resident; and paying Calhoun in Texas.

               Calhoun cites to three cases in support of its position that RSR is subject to the

trial court’s specific jurisdiction. See Bissbort v. Wright Printing & Publ’g Co., 801 S.W.2d 588,

                                                  11
589 (Tex. App.—Fort Worth 1990, no writ); Beechem v. Pippin, 686 S.W.2d 356, 361

(Tex. App.—Austin 1985, no writ); N.K. Parrish, Inc. v. Schrimscher, 516 S.W.2d 956, 959

(Tex. App.—Amarillo 1974, no writ). We find all of the cases distinguishable from the case before

us. First, in all three cases, the nonresident defendants solicited business in Texas by placing

telephone calls to Texas residents for the purpose of entering into business contracts with the Texas

residents. Here, Weston called Calhoun but did not do so to solicit business. Rather, Weston called

Calhoun in an effort to obtain the contact information for another person, and it was Calhoun who

initiated a conversation about the possibility of the parties’ entering into an agreement. Calhoun

ultimately confirmed an agreement only after making a phone call to Jackson in Missouri.

               Further, there were two more factors the court considered in Beechem that do not exist

in this case: (1) the nonresident defendant had its insurance agent contact the Texas resident to

arrange for insurance coverage on the equipment it was leasing from the Texas resident, and (2) the

nonresident defendant admitted to owning real and personal property in Texas and to having

previously conducted sales in Texas. 686 S.W.2d at 362-63.

               Similarly, the court in N.K. Parrish also considered another factor not present in this

case. There, the contract included language in bold type stating that the contract would be performed

in Texas. 516 S.W.2d at 957. Here, there was no such language in the contract, and only part of the

contract was performed in Texas.

               Unlike the cases cited by Calhoun, RSR’s actions in this case do not show that RSR

purposefully availed itself of the benefits of conducting business in Texas. First, a single contract

with a Texas resident does not automatically establish jurisdiction. See Michiana, 168 S.W.3d at

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786. Second, sending payments to Texas or engaging in numerous telephone communications with

a Texas resident about a contract are also not determinative. See Alenia Spazio, S.P.A. v. Reid,

130 S.W.3d 201, 213 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). The only other action

RSR took in this case was to temporarily send Weston to Texas to locate scrap metal and arrange

for it to be hauled from Texas to Missouri. Calhoun contends that Weston’s presence in Texas

constituted a “purposeful contact” with Texas and was alone enough to deny RSR’s special

appearance. However, Weston was only in Texas temporarily, and evidence in the record shows that

RSR has never had an office in Texas, registered to do business in Texas, or employed people who

reside in Texas. In addition, Weston did not contact Calhoun to solicit Calhoun’s business. It was

Calhoun who initiated a conversation with Weston about a possible contract between the parties.

Further, even though Weston was in Texas to locate scrap metal and arrange for it to be hauled to

Missouri, there is no evidence in the record to suggest that if not for Calhoun’s offer, RSR would

have contracted with another Texas resident to haul the scrap metal. In fact, Jackson’s affidavit

states that RSR’s contacts with Texas relate solely to the retrieval of scrap metal “pursuant to

agreements with entities who are not Texas residents.” Thus, considering all of RSR’s actions in

Texas, we conclude that they do not constitute the minimum contacts necessary to subject RSR to

the jurisdiction of Texas courts. See Michiana, 168 S.W.3d at 786; Alenia Spazio, 130 S.W.3d at

213. Because the record supports the trial court’s determination that RSR lacked the minimum

contacts necessary to support specific jurisdiction, we need not consider whether RSR’s acts were

connected to or gave rise to the cause of action or whether the assertion of jurisdiction would offend

traditional notions of fair play and substantial justice. See Tex. R. App. P. 47.1. Accordingly, we

overrule Calhoun’s sole issue.

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                                     CONCLUSION

               Because we find no error in the trial court’s evidentiary or jurisdictional

determinations, we affirm the trial court’s order.

                                             ___________________________________________

                                              Diane M. Henson, Justice

Before Justices Patterson, Waldrop and Henson

Affirmed

Filed: February 5, 2009

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