Court Opinion

ID: 3112346
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:03:19.791178+00
Date Added: 2024-06-11T10:17:31.513459
License: Public Domain

Opinion issued November 14, 2013.

                                      In The

                               Court of Appeals
                                     For The

                          First District of Texas
                             ————————————
                               NO. 01-13-00462-CV
                            ———————————
                    CUROCOM ENERGY LLC, Appellant
                                         V.
                         YOUNG-SUB SHIM, Appellee

                    On Appeal from the 165th District Court
                             Harris County, Texas
                       Trial Court Case No. 2009-06630

                                  OPINION

      In this dispute arising from the sale of oil and gas leases, Curocom Energy

LLC has sued, among others, Young–Sub Shim, a Korean businessman. The trial

court granted Shim’s special appearance. Curocom appeals, contending that the

trial court had personal jurisdiction over Shim. Finding no error, we affirm.
                                  Background

      In November 2006, Woolim Energy purchased oil and gas leases in the

Caliente Field, located in Karnes County, Texas. Woolim Energy is a Texas

company and a wholly–owned subsidiary of Woolim Resources, a Korean

company.     Woolim Resources is a wholly–owned subsidiary of Woolim

Construction, another Korean company. Young–Sub Shim is the chairman, CEO,

and seventy percent shareholder of Woolim Construction. He was also a director

of Woolim Resources and personally negotiated Woolim Energy’s 2006 purchase.

In February 2007, he also traveled to Texas and visited the Caliente Field. He met

with its former owner, spending a few days in Texas.

      In May 2007, another officer of Woolim Resources approached one of

Curocom’s officers to suggest a joint venture in the Caliente Field. After several

meetings, Curocom’s chairman traveled to Korea and met with Shim. There, Shim

allegedly touted the advantages of the Caliente Field and assured Curocom’s

chairman that a joint venture would succeed. Shortly thereafter, Woolim Energy

sold a ninety percent interest in the Caliente Field to Curocom. Curocom alleges

that Shim knew of an unfavorable production report regarding the Caliente Field

but failed to disclose it to Curocom. Curocom’s claims against Shim individually

stem from Shim’s non-disclosure of unfavorable information regarding the

Caliente Field during the meeting in Korea.

                                        2
                                      Discussion

         Curocom contends that the trial court should have exercised jurisdiction over

its claims against Shim, because Shim had engaged in contacts with Texas

sufficient to confer personal jurisdiction.

         Standard of Review

         We review de novo a trial court’s decision to grant or deny a special

appearance. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806

(Tex. 2002). A plaintiff bears the burden of pleading allegations that bring a

nonresident defendant within the provisions of the Texas long-arm statute. BMC

Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002). A nonresident

defendant challenging the court’s exercise of personal jurisdiction through a

special appearance carries the burden of negating those allegations. Id.; Glattly v.

CMS Viron Corp., 177 S.W.3d 438, 446 (Tex. App.—Houston [1st Dist.] 2005, no

pet.).

         When a trial court issues findings of fact and conclusions of law in

connection with its ruling on a special appearance, we review the findings of fact

on legal and factual sufficiency grounds and the conclusions of law de novo. BMC

Software, 83 S.W.3d at 794. We set aside a finding of fact only if the evidence

would not enable a reasonable and fair minded finder of fact to make the finding

under review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). If the

                                              3
trial court does not issue findings of fact, then “all facts necessary to support the

judgment and supported by the evidence are implied.” BMC Software, 83 S.W.3d

at 795.

      Personal Jurisdiction

      A Texas court has personal jurisdiction over a nonresident defendant if the

Texas long–arm statute authorizes the exercise of jurisdiction and it is consistent

with federal due process. Coleman, 83 S.W.3d at 806; Tri–State Bldg. Specialties,

Inc. v. NCI Bldg. Sys., L.P., 184 S.W.3d 242, 248 (Tex. App.—Houston [1st Dist.]

2005, no pet.). Federal due process requires that the nonresident defendant have

purposefully established minimum contacts with the forum state, such that the

defendant reasonably could anticipate being sued there. Glattly, 177 S.W.3d at

446 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76, 105 S. Ct.
2174, 2183–84 (1985)). The exercise of personal jurisdiction must also comport

with traditional notions of fair play and substantial justice. Id. at 447 (citing

Burger King, 471 U.S. at 475–76, 105 S. Ct. at 2183–84). If the nonresident

defendant has purposefully established minimum contacts with the forum state,

then only in rare cases will a Texas court’s exercise of personal jurisdiction not

comport with fair play and substantial justice. Guardian Royal Exch. Assur., Ltd.

v. English China Clays, P.L.C., 815 S.W.2d 223, 231 (Tex. 1991).

                                         4
      A nonresident’s contacts can give rise to either specific or general personal

jurisdiction. Moncrief Oil Int’l, Inc. v. OAO Gazprom, No. 11–0195, 2013 WL
4608672, at *3 (Tex. Aug. 30, 2013). Specific jurisdiction exists when the cause

of action is related to the nonresident’s purposeful activities in the forum, whereas

general jurisdiction exists when the nonresident has continuous and systematic

contacts with the forum. Id.

      Specific Jurisdiction

      A court may exercise specific jurisdiction over a nonresident when he

purposefully conducts activities in the forum state, and the cause of action arises

from or relates to those contacts or activities. Retamco Operating, Inc. v. Rep.

Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009). Directing a tort at the forum from

afar does not constitute purposeful availment. Moncrief, 2013 WL 4608672, at *9

(citing Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 790–92

(Tex. 2005)).   The plaintiff must show a substantial connection between the

defendant’s contacts with the forum state and the operative facts of the litigation.

Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007).

      A defendant’s purchase or sale of real property in the forum constitutes

purposeful availment. Retamco, 278 S.W.3d at 340. A defendant’s conversation

in another country about real property in the forum state, however, is not a

                                         5
sufficient contact if the defendant holds no interest in the property. Horowitz v.

Berger, 377 S.W.3d 115, 125 (Tex. App.—Houston [14th Dist.] 2012, no pet.).

      In order to pierce the corporate veil for jurisdictional purposes, the plaintiff

must prove that the parent company “controls the internal business operations and

affairs of the subsidiary [and] the degree of control the parent exercises must be

greater than that normally associated with common ownership and directorship.”

PHC–Minden, L.P. v. Kimberly–Clark Corp., 235 S.W.3d 163, 175 (Tex. 2007)

(quoting BMC Software, 83 S.W.3d at 799).

      General Jurisdiction

      General jurisdiction requires continuous and systematic contacts with the

forum state.     Moncrief, 2013 WL 4608672, at *3.        Usually the defendant is

engaged in longstanding business in the forum state, such as marketing or shipping

products to the state, performing services within it, or maintaining one or more

offices there. PHC–Minden, 235 S.W.3d at 168; see Helicopteros Nacionales De

Colombia, S.A. v. Hall, 466 U.S. 408, 418, 104 S. Ct. 1868, 1874 (1984).

      Analysis

      As a preliminary matter, Curocom asserts that the trial court erred in

admitting Shim’s April 2013 affidavit in support of his special appearance, arguing

that it did not have sufficient opportunity to depose Shim regarding his affidavit.

A litigant must file his affidavit at least seven days before a special appearance

                                          6
hearing. TEX. R. CIV. P. 120a. Shim timely filed his affidavit because he filed it

seven days before the hearing. See Tempest Broad. Corp. v. Imlay, 150 S.W.3d
861, 869 (Tex. App.—Houston [14th Dist.] 2004, no pet.). Thus, the trial court did

not abuse its discretion in considering Shim’s affidavit.

      Curocom first notes that Shim personally negotiated Woolim Energy’s

earlier purchase of the Caliente Field, and traveled to Texas to meet the former

owner of the Caliente Field soon after that purchase. But this lawsuit deals with a

different transaction: Woolim Energy’s later sale of a 90% interest in the Caliente

Field to Curocom. Shim’s alleged fraudulent conduct in connection with that sale

occurred in Korea, not in Texas. Because Shim allegedly committed the tort

outside of Texas, he has not purposefully availed himself of the benefits of doing

business in Texas. See Moncrief, 2013 WL 4608672, at *9; Michiana, 168 S.W.3d

at 790–92 (holding that directing a tort at the forum state from afar does not

constitute purposeful availment).

      Relying on the Texas Supreme Court’s holding in Retamco, Curocom asks

that we extend the jurisdictional nexus of Texas real property to include a related

fraudulent inducement claim like the one it brings against Shim. See Retamco, 278
S.W.3d at 340. We decline to do so under these facts, because Shim individually

never owned or sold an interest in the Caliente Field—and some sort of an

ownership interest in Texas real property was the basis for jurisdiction in Retamco.

                                          7
See id. Rather, Woolim Energy (also a defendant in the trial court) is the entity

that purchased leases in the Caliente Field and later sold most of its interest to

Curocom. Although Shim is a director and shareholder in Woolim Energy’s parent

company, Curocom has not pleaded that Woolim Energy is Shim’s alter–ego or

any other basis for jurisdictional veil–piercing. See PHC–Minden, 235 S.W.3d at

175.

       The facts here are instead analogous to those in the Horowitz case. There,

our sister court held that the trial court lacked personal jurisdiction over an Israeli

promoter of Texas real property. Horowitz, 377 S.W.3d at 128. Because the

promoter’s alleged fraud occurred exclusively in Israel, her activities did not create

sufficient minimum contacts with Texas to support personal jurisdiction. Id. The

Fourteenth Court of Appeals distinguished Retamco on the same grounds that

apply here, emphasizing that the Israeli promoter had never owned an interest in

Texas real property. Id. We hold that the trial court properly found that it lacked

specific jurisdiction over Shim as an individual defendant.

       Finally, Curocom contends that Shim’s contacts with Texas support general

jurisdiction, but the trial court reasonably concluded that Shim lacked the

continuous and systematic contacts with Texas necessary to hale him into a Texas

court as an individual defendant. Shim has never resided or worked in Texas.

Shim has visited Texas only once. Thus, the trial court also properly found that it

                                          8
did not have general personal jurisdiction over Shim. See PHC–Minden, 235
S.W.3d at 168.

                                   Conclusion

      The trial court properly ruled that it did not have personal jurisdiction over

Shim. Accordingly, we affirm the order of the trial court.

                                             Jane Bland
                                             Justice

Panel consists of Chief Justice Radack and Justices Bland and Huddle.

                                         9