Court Opinion

ID: 4354065
Source: CourtListenerOpinion
Date Created: 2018-12-24 13:37:39.931913+00
Date Added: 2024-06-11T14:46:11.609401
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                        NO. 03-17-00298-CV

                     Warren Chevrolet, Inc., d/b/a Green Family Chevrolet,
                          f/k/a Green Chevrolet Chrysler, Appellant

                                                   v.

                                  Talam Jamal Qatato, Appellee

     FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT
         NO. D-1-GN-16-005988, HONORABLE JAN SOIFER, JUDGE PRESIDING

                             MEMORANDUM OPINION

                 Talam Jamal Qatato, an Austin resident, bought a Chevrolet Camaro from Green

Family Chevrolet (Green Chevrolet), an automotive dealership incorporated in Iowa with its

principal place of business in Illinois. Qatato later sued Green Chevrolet in Travis County district

court for fraud, violations of the Texas Deceptive Trade Practices Act (DTPA),1 and other causes

of action arising from his purchase of the Camaro. Green Chevrolet filed a special appearance

contesting personal jurisdiction, which the district court denied. We reverse the district court’s order

denying Green Chevrolet’s special appearance and render judgment dismissing the case for want of

jurisdiction.

        1
            See Tex. Bus. & Com. Code § 17.41 et seq.
                                         BACKGROUND2

               After Qatato saw a 2015 Chevrolet Camaro Z28 on Autotrader.com, he called Green

Chevrolet, the dealer that advertised the Camaro for sale, at the dealer’s location in East Moline,

Illinois. Negotiations ensued between Qatato and Green Chevrolet for the sale of the Camaro,

primarily through text messages and emails. During their negotiations, Green Chevrolet represented

to Qatato that the Camaro was a “GM Certified Pre-Owned” vehicle in “excellent” condition. Qatato

ultimately purchased the Camaro. The terms and conditions of the sales contract included a forum-

selection clause that provided that any litigation in connection with the sale would occur in Illinois.

               Qatato arranged and paid for a transportation company to pick up the Camaro in

Illinois and have it delivered to Austin. When Qatato examined the Camaro upon arrival, he

observed damage to the vehicle, including rust throughout its undercarriage. Qatato then took the

Camaro to an automotive shop for a State of Texas inspection, where it failed both the tire and

emissions portions of the inspection, and needed all four tires replaced. Qatato later sought to return

the Camaro and receive a refund of the purchase price. Green Chevrolet refused. This litigation

followed.

                                    STANDARD OF REVIEW

               “Whether a trial court has personal jurisdiction over a nonresident defendant is a

question of law that we review de novo.” Old Republic Nat’l Title Ins. Co. v. Bell, 549 S.W.3d 550,

       2
          The following recitation of facts is based on the evidence admitted at the special-
appearance hearing, including testimony by Qatato, an affidavit by Eric Dressing, the Vice President
of Green Chevrolet, and the sales contract for the Camaro.

                                                  2
558 (Tex. 2018) (citing Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013)).

“However, the trial court frequently must resolve questions of fact before deciding the jurisdiction

question.” BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). “If a trial

court enters an order denying a special appearance, and the trial court issues findings of fact and

conclusions of law, the appellant may challenge the fact findings on legal and factual sufficiency

grounds.” Id.

                When reviewing the legal sufficiency of the evidence, courts view the evidence in the

light most favorable to the finding, crediting favorable evidence if a reasonable fact-finder could, and

disregarding contrary evidence unless a reasonable fact-finder could not. See City of Keller v.

Wilson, 168 S.W.3d 802, 807 (Tex. 2005); Gonzales v. Maggio, 500 S.W.3d 656, 662 (Tex.

App.—Austin 2016, no pet.). Courts indulge every reasonable inference that would support the

finding. City of Keller, 168 S.W.3d at 822; Gonzales, 500 S.W.3d at 662. When reviewing the

factual sufficiency of the evidence, courts consider and weigh all of the evidence in the record, and

set aside the finding only if the evidence supporting the finding is so weak as to be clearly wrong

and manifestly unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam); Gonzales,
500 S.W.3d at 662. Courts then review de novo any legal conclusions drawn from the facts. See

Park v. Escalera Ranch Owners’ Ass’n, 457 S.W.3d 571, 592 (Tex. App.—Austin 2015, no pet.)

(citing BMC Software, 83 S.W.3d at 794).

                                             ANALYSIS

                “Texas courts may exercise personal jurisdiction over a nonresident if ‘(1) the Texas

long-arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction is

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consistent with federal and state constitutional due-process guarantees.’” Old Republic, 549 S.W.3d

at 558 (quoting Moncrief Oil Int’l Inc., 414 S.W.3d at 149; Moki Mac River Expeditions v. Drugg,

221 S.W.3d 569, 574 (Tex. 2007)). “The long-arm statute is satisfied by a defendant who ‘commits

a tort in whole or in part in this state.’” Id. at 558–59 (quoting Tex. Civ. Prac. & Rem. Code

§ 17.042(2)).

                “However, allegations that a tort was committed in Texas do not necessarily satisfy

the United States Constitution.” Id. at 559 (citing Moncrief Oil Int’l Inc., 414 S.W.3d at 149;

Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 788 (Tex. 2005)). “To establish

personal jurisdiction over a nonresident, federal due process requires that the nonresident must have

certain minimum contacts with [the forum state] such that the maintenance of the suit does not

offend traditional notions of fair play and substantial justice.” Id. (internal citations and quotations

omitted).

General jurisdiction

                “A defendant’s contacts may give rise to general or specific jurisdiction.” Old

Republic, 549 S.W.3d at 559. Qatato alleges that the district court has both general and specific

jurisdiction over Green Chevrolet. We address each in turn.

                A court may exercise general jurisdiction over a defendant “only if its ‘affiliations

with the [s]tate are so continuous and systematic as to render it essentially at home in the forum

[s]tate.’” Searcy v. Parex Res., Inc., 496 S.W.3d 58, 72 (Tex. 2016) (quoting Daimler AG v.

Bauman, 571 U.S. 117, 139 (2014)). “Continuous and systematic contacts that fail to rise to this

relatively high level are insufficient to confer general jurisdiction over a nonresident defendant.” Id.

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“Courts do not have general jurisdiction over corporate defendants that are neither incorporated in

the forum state nor have their principal place of business there, absent some relatively substantial

contacts with the forum state.” Id.

               Here, Eric Dressing, the Vice President of Green Chevrolet, averred that Green

Chevrolet is “an Iowa corporation with its principal place of business in Illinois.” Dressing also

maintained:

       Defendant has no offices, no real or personal property, no employees and no
       facilities in the State of Texas; Defendant has no telephone listing, no bank account,
       and it has never appointed an agent for service of process, in Texas. Defendant
       does no advertising that specifically targets Texas residents, as opposed to the
       residents of any other state; since November of 2013 through the present,
       Defendant’s advertising includes paying Autotrader.com[,] which promotes vehicles
       for sale on behalf of numerous clients through the internet and does not target the
       resident of any particular state. [Defendant] has a website; customers cannot
       purchase a vehicle through Defendant’s website alone but must contact Defendant
       by phone in Illinois to negotiate the purchase of a vehicle; and the test drive of any
       vehicle sold to any potential buyer must occur in Illinois and, in some cases, in
       neighboring Iowa. The Defendant’s location is in East Moline, Illinois.

This evidence establishes that Green Chevrolet is neither incorporated in Texas nor has its principal

place of business here.

               Nevertheless, Qatato asserts that the district court has general jurisdiction over Green

Chevrolet by virtue of a contract that exists between Green Chevrolet and CDK Data Services, Inc.,

a company headquartered in Austin that manages the information systems and websites for all GM

dealers, including Green Chevrolet. A contract with a third-party vendor, however, fails to establish

that Green Chevrolet’s affiliations with Texas are so continuous and systematic as to render it

“essentially at home” here. See Daimler AG, 571 U.S. at 139; Searcy, 496 S.W.3d at 72–73; see also

                                                  5
PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 168–71 (Tex. 2007) (concluding that

corporation’s contracts with Texas companies, payments to Texas vendors, and two “isolated trips”

to Dallas by company employees were insufficient to establish general jurisdiction). Thus, the

district court does not have general jurisdiction over Green Chevrolet.

Specific jurisdiction

                We next address whether the district court has specific jurisdiction over Green

Chevrolet. Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005), guides our

analysis here. In Michiana, a Texas resident “decided to buy a $64,000 Coachmen recreation vehicle

sight unseen.” Michiana, 168 S.W.3d at 781. The seller was “an outlet store that only did business

in Indiana.” Id. The buyer “called [the seller] in Indiana, sent payment to Indiana, paid for delivery

from Indiana, and agreed to resolve every dispute in Indiana. But when a dispute actually arose, he

filed suit in Texas.” Id. The Texas Supreme Court ruled that the buyer could not bring suit in a

Texas court because the seller lacked “minimum contacts with Texas.” Id.

                The Michiana court explained that “‘purposeful availment’” is “the touchstone of

jurisdictional due process.” Id. at 784. In assessing whether the seller in Michiana had so availed

itself of the privilege of conducting activities within Texas, the court identified three relevant

factors. “First, it is only the defendant’s contacts with the forum that count: purposeful availment

‘ensures that a defendant will not be haled into a jurisdiction solely as a result of . . . the unilateral

activity of another party or a third person.’” Id. at 785. “Second, the acts relied on must be

‘purposeful’ rather than fortuitous. Sellers who ‘reach out beyond one state and create continuing

relationships and obligations with citizens from another state’ are subject to the jurisdiction of the

                                                    6
latter in suits based on their activities. By contrast, a defendant will not be haled into a jurisdiction

solely based on contacts that are random, isolated, or fortuitous.” Id. “Third, a defendant must seek

some benefit, advantage, or profit by ‘availing’ itself of the jurisdiction.” Id.

                The seller’s contacts with Texas in Michiana did not amount to “purposeful

availment.” The seller did not initiate the contact with the Texas buyer and the decision to ship the

RV to Texas was made by the buyer unilaterally—“the seller had no say in the matter.” Id. at 787.

Further, the seller sought no benefits from Texas law. Once the sale was complete and the RV was

shipped to Texas, the seller had everything it wanted out of the contact “in hand” and needed no

further protection from Texas law. Id. And the Michiana court rejected the argument that the

seller’s alleged misrepresentation to the buyer in Texas was enough to establish specific jurisdiction.

In so doing, the court emphasized that the focus of specific jurisdiction analysis is the “‘relationship

among the defendant, the forum, and the litigation,’” rather than among the “‘plaintiff, the forum . . .

and the litigation.’” Id. at 790 (emphasis in original). Specific jurisdiction, the court held, turns on

defendant’s contacts themselves, not on whether the contacts were tortious. Id. at 792.

                Green Chevrolet’s contacts do not satisfy the requirements for personal jurisdiction

set forth in Michiana. As in Michiana, “[t]he sale at issue here was initiated entirely by” the buyer.

Id. at 784. Qatato contacted Green Chevrolet about the vehicle after conducting a search on

Autotrader.com, a website which is not affiliated with the seller. Like the seller in Michiana, Green

Chevrolet had “everything it wanted out of the contract in hand” once the sale was complete. See

id. at 787. In both cases, the buyer sent full payment to the seller, and also paid for and arranged for

the vehicle to be transported to Texas. Similar to Michiana, the decision in this case to ship the

                                                   7
vehicle to Texas was “entirely that of the purchaser; the seller had no say in the matter.” See id. And

like the buyer in Michiana, Qatato agreed to resolve disputes associated with the sale in Illinois, and

conceded that he did not plan to drive the Camaro to Illinois for regular maintenance. See id. at 781,

787. Thus, as was the case in Michiana, it is “hard to imagine” in this case “what possible benefits

and protections” Green Chevrolet enjoyed from Texas law from the isolated sale at issue here. See

id. at 787.

               Qatato contends that the multiple phone calls, text messages, emails, and other

correspondence between Green Chevrolet and him establish personal jurisdiction, but, as Michiana

noted, advances in technology have made communication via phone, email, and text an unreliable

indicator of purposeful availment. Id. at 791. Many of these communications were brief, perfunctory

text messages, such as “No problem,” Yes we can,” “I will check,” and “OK,” sent in rapid

succession. And, in any event, virtually all of the communications concerned an isolated sale and

were prompted by Qatato. Responding to a customer’s inquiries in a single sale does not amount

to a purposeful act “to create continuing relationships and obligations with citizens from another

state,” which the Michiana court deemed necessary to create personal jurisdiction. Id. at 785. The

few times that Green Chevrolet initiated contact, it was to send Qatato occasional announcements,

discount offers, and reminders that it may be time to service the vehicle, but “random, isolated, or

fortuitous” contacts such as these are not sufficient to establish personal jurisdiction. Id.

               Michiana also forecloses Qatato’s arguments that the terms of the warranty and Green

Chevrolet’s alleged misrepresentations establish personal jurisdiction. Although the warranty states

that Green Chevrolet “will pay 100% of the labor and 100% of the parts for the covered systems that

                                                  8
fail within the warranty period,” it also indicates that any “authorized GM dealer can make the

warranty repairs” and that the customer may “contact a GM dealer in the United States, Canada or

Mexico for warranty service.” The warranty further specifies that “[a]ll GM dealers are authorized

to perform qualifying warranty repairs on Certified Pre-Owned vehicles.” Qatato acknowledged that

he was aware of these terms, and that he did not plan to bring the Camaro to Green Chevrolet for

routine services. Therefore, the warranty does not create the kind of “continuing relationship”

described in Michiana, between the out-of-state defendant and a Texas resident that would give rise

to personal jurisdiction. See id. at 787 (explaining that a long-term agreement contemplating many

contacts over time may establish minimum contacts). And with respect to Qatato’s contention that

Green Chevrolet’s allegedly tortious conduct establishes jurisdiction, Michiana held to the contrary

that defendant’s contacts themselves—not whether the contacts are tortious—are the dispositive

factor in determining whether jurisdiction exists.       Id. at 792 (disapproving of opinions by

intermediate courts of appeal that “specific jurisdiction turns on whether a defendant’s contacts were

tortious rather than the contacts themselves”); see also GJP, Inc. v. Ghosh, 251 S.W.3d 854, 873–74

(Tex. App.—Austin 2008, no pet.). For the reasons already stated, Green Chevrolet’s “conduct and

connection to the forum” here do not support jurisdiction.

               Finally, Qatato contends that Green Chevrolet purposefully availed itself of Texas

through its online marketing efforts, including advertising on Autotrader.com and using its own

website to interact with customers and potential customers. The vice-president of Green Chevrolet

averred, however, that Green Chevrolet “does no advertising that specifically targets Texas residents,

as opposed to the residents of any other state” and that Autotrader.com “promotes vehicles for sale

                                                  9
on behalf of numerous clients through the internet and does not target the resident of any particular

state.” Qatato presented no contrary evidence establishing that Green Chevrolet targets Texas

residents specifically, either through Autotrader.com or other national websites. See Michiana,
168 S.W.3d at 785–86 (explaining that unless defendant “directs” its marketing efforts specifically

to Texas, “additional conduct” is required to conduct purposeful availment); Riverside Exps., Inc.

v. B.R. Crane & Equip., LLC, 362 S.W.3d 649, 655 (Tex. App.—Houston [14th Dist.] 2011, pet.

denied) (holding that “a business cannot be said to avail itself of the privilege of conducting activity

in a particular state” when it engages in “undifferentiated advertising, which is accessible nationally

and even internationally”). Moreover, the interaction between the parties on Green Chevrolet’s

website was minimal as it relates to the operative facts that gave rise to this litigation. Qatato’s

claims arise out of his agreement to purchase the Camaro. Most of Green Chevrolet’s alleged

misrepresentations as to the quality and condition of the Camaro were made via phone calls, text

messages, emails, and documents mailed to Qatato, and not through its website.3 Accordingly,

Green Chevrolet’s website does not give rise to specific jurisdiction. See Choice Auto Brokers, Inc.

v. Dawson, 274 S.W.3d 172, 177–78 (Tex. App.—Houston [1st Dist.] 2008, no pet.); Karstetter v.

Voss, 184 S.W.3d 396, 405 (Tex. App.—Dallas 2006, no pet.) (concluding that defendants’ use of

“interactive website” was insufficient to confer personal jurisdiction where “the interaction between

       3
            After this litigation commenced, Qatato visited Green Chevrolet’s website to order parts
and accessories. Qatato’s claims, however, do not involve the parts and accessories that he ordered.
Additionally, placing the order appears to have been primarily a litigation tactic. Qatato had already
sold the Camaro by the time that he visited the website under the pretense of ordering ground effects
and a cargo net for that vehicle. Further, Qatato testified that he “requested the parts and accessories
. . . on the basis of [the] advice of [his] attorney to demonstrate the interactivity of the website.”

                                                  10
the parties was minimal,” “[t]he email correspondence between the parties relating to the single

purchase was initiated by [the buyer],” and defendants’ contact with forum state was “random,

isolated, and fortuitous”).

                                         CONCLUSION

               The district court erred in concluding that it has personal jurisdiction over Green

Chevrolet. Accordingly, we reverse the district court’s order denying Green Chevrolet’s special

appearance and render judgment dismissing the case for want of jurisdiction.

                                             _________________________________________
                                             Michael Toth, Justice

Before Justices Puryear, Goodwin, and Toth

Reversed and Rendered

Filed: December 21, 2018

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