Court Opinion

ID: 2890029
Source: CourtListenerOpinion
Date Created: 2015-09-07 20:55:49.29209+00
Date Added: 2024-06-11T13:33:02.404236
License: Public Domain

NO. 07-04-0037-CV

                             IN THE COURT OF APPEALS

                     FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                        PANEL D

                                   OCTOBER 1, 2004

                         ______________________________

             DONALD S. BRYANT, JR. IND. AND AS TRUSTEE OF THE
                    BRYANT FAMILY TRUST, APPELLANT

                                            V.

          NICHOLAS ALLEN ROBLEE, A/K/A NICHOLAS RICHMOND,
  NICHOLAS A. RICHMOND, AND THOMAS E. ROBLEE; PREMIER MARKETING
    & INVESTMENTS, INC., A/K/A PREMIER MARKETING AND INVESTMENT
COMPANY, INC.; JEWELL MEYER; FIRST REPUBLIC BANK; EVERETT JUNG;
         CALIFORNIA FEDERAL BANK; JAE K. JUNG; LEE MCMILLIAN;
                  AND JOSEPH SARANELLO, APPELLEES

                       _________________________________

           FROM THE 72ND DISTRICT COURT OF LUBBOCK COUNTY;

            NO. 2002-520,479; HONORABLE J. BLAIR CHERRY, JUDGE

                        _______________________________

Before QUINN and REAVIS and CAMPBELL, JJ.

                                        OPINION

      Donald S. Bryant, Jr., acting individually and as trustee for the Bryant Family Trust,

brings this appeal from an order granting a special appearance filed by appellee, First

Republic Bank. We will affirm.
       The record before us shows Nicholas Roblee, a California resident, operated

Premier Marketing & Investments, Inc., a California corporation. Appellant Bryant, a Texas

resident, transferred $500,000 to Premier in the spring and summer of 2002 for investment

purposes. Bryant brought suit in late 2002. His petition alleged Roblee and Premier failed

to perform as agreed and failed to return the funds on his request. The petition also

alleged Roblee and Premier made false representations concerning return of the money

for the purpose of delaying his initiation of legal action against them.

       Bryant also named other defendants, including First Republic Bank and one of its

employees, Everett Jung.      His first amended petition alleged Jung improperly had

permitted Roblee and others to exercise authority over funds held in Premier’s accounts1

at the bank, and alleged First Republic was liable for Jung’s actions. First Republic, a

Nevada banking corporation, filed a special appearance pursuant to Rule of Civil

Procedure 120a, in which it asserted it was not, and had never been, a Texas resident and

was not otherwise amenable to process issued by Texas courts. Following a hearing, the

court signed an order granting First Republic’s special appearance. It then severed the

claims against the other parties, creating the final judgment from which Bryant now

appeals.

       1
       Premier had two accounts at First Republic, opened at a First Republic branch in
Los Angeles. Bryant’s suit does not allege the funds he transferred to Premier ever were
deposited in First Republic. The evidence indicates both accounts at First Republic were
opened early in 2001 and closed later that same year, several months before Bryant first
invested funds with Premier.

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       Bryant presents four issues, all challenging the sustention of First Republic’s special

appearance. Rule of Civil Procedure 120a provides for a special appearance by which a

party may object to the court’s jurisdiction over the party on the ground that it is “not

amenable to process issued by the courts of this State.” Tex. R. Civ. P. 120a; see Hotel

Partners v. KPMG Peat Marwick, 847 S.W.2d 630 (Tex.App.–Dallas 1993, writ denied).

Sections 17.041-.045 of the Civil Practice and Remedies Code provide for service of

process on nonresident defendants “doing business” in our state. Tex. Civ. Prac. & Rem.

Code Ann. § 17.042 (Vernon 2002). This provision of our long-arm statute extends

personal jurisdiction of Texas courts "as far as the federal constitutional requirements of

due process will permit." BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795

(Tex. 2002); see American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806

(Tex. 2002).

       The exercise of personal jurisdiction over nonresident defendants is constitutional

when two conditions are met: (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. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66
S. Ct. 154, 90 L. Ed. 95 (1945). Purposely established minimum contacts may give rise in

a particular case to jurisdiction that is specific or general. BMC Software, 83 S.W.3d at

795. When specific jurisdiction is asserted, the cause of action must arise out of, or relate

to, the nonresident defendant's contact with the forum state. Id. at 796. Pursuant to

general jurisdiction, a forum may exercise personal jurisdiction over a defendant even with

respect to a cause of action not arising from or relating to the defendant’s activities within

                                              -3-
the forum state, based on the defendant’s “continuous and systematic” contacts with the

forum state. American Type Culture, 83 S.W.3d at 807; BMC Software, 83 S.W.3d at 796.

It requires “a showing that the defendant conducted substantial activities within the forum,

a more demanding minimum contacts analysis than for specific jurisdiction.” Id. at 797.

Determination of what constitutes continuous and systematic contacts can be made only

on a case-by-case basis. American Type Culture, 83 S.W.3d at 810. A defendant should

not be subject to a foreign court's jurisdiction based upon "random," "fortuitous" or

"attenuated" contacts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L. Ed. 2d
528, 105 S. Ct. 2174 (1985).

        A defendant challenging, by special appearance, a Texas court's personal

jurisdiction over it must negate all jurisdictional bases alleged by the plaintiff. American

Type Culture, 83 S.W.3d at 807; Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203

(Tex. 1985). The question whether a court has personal jurisdiction over a defendant is

one of law. American Type Culture, 83 S.W.3d at 805-06; BMC Software, 83 S.W.2d at

794. When the challenge to a court’s jurisdiction over a nonresident defendant requires

factual determinations that are contested on appeal, a court of appeals reviews those

determinations under the standards for legal and factual sufficiency. BMC Software, 83
S.W.2d at 794. In this case, the jurisdictional facts are not disputed, so we review de novo

the trial court’s application of the law to the established facts. See C-Loc Retention

Systems, Inc. v. Hendrix, 993 S.W.2d 473, 476 (Tex.App.–Houston [14th Dist.] 1999, no

pet.)

                                            -4-
       Bryant does not argue his claims against First Republic arise from its contacts with

Texas. He seeks a finding of general jurisdiction over First Republic on the basis of what

he alleges are its continuing and systematic contacts with our state.2 No testimony was

presented at the hearing on the special appearance. The evidence includes an affidavit

of First Republic’s chief operating officer supporting its special appearance motion and

First Republic’s responses to Bryant’s interrogatories.

       First Republic’s principal office is in Las Vegas, Nevada, and its executive offices

are in San Francisco. As noted, Premier had two accounts at First Republic, opened at

a First Republic branch in Los Angeles. First Republic has no Texas branch, office or other

place of business, and no employees in Texas. It does not have a Texas agent for service

of process. Its officer’s affidavit states First Republic has made “an occasional loan” to a

Texas resident, but does not solicit business in Texas. The interrogatory responses reveal

First Republic held, at the time of the response, 24 loans made during the past five years

to customers with Texas mailing addresses, in the total principal amount of some

$17,218,178, and had a total of 37 such loans during that period.3 First Republic made

more than 12,000 loans during that period, and had 7340 open loans on its balance sheet

at the time of the response. It held real estate liens on eleven properties located in Texas,

       2
        Bryant’s first amended petition also alleged another employee of First Republic
made a false representation to him during a telephone conversation, but he does not
assert it as a basis for personal jurisdiction over First Republic.
       3
        First Republic’s responses also stated, in response to an interrogatory asking the
“number of loans made within the past five years which have been paid off by Texas
residents,” that First Republic had “closed” 15 loans over the past 5 years that were made
to customers with a mailing address in Texas.

                                             -5-
securing loans in the original principal amounts of about $10,000,000. In addition, First

Republic released five liens on Texas properties within the past five years. First Republic

does not direct any advertising to Texas, but does advertise in national publications and

maintain an Internet web site accessible from Texas.

       Bryant’s brief emphasizes First Republic’s ownership of loans secured by liens on

real property in Texas. He cites no authority in support of his premise that a nonresident

corporation’s ownership of loans secured by liens on Texas real property constitutes

continuous and systematic contacts with our state authorizing the exercise of personal

jurisdiction. Ownership of real property alone does not provide contacts sufficient to

establish general jurisdiction over a nonresident corporation. Potkovick v. Regional

Ventures, Inc., 904 S.W.2d 846, 847 (Tex.App.–Eastland 1995, no writ) (foreign

corporation’s ownership of real property sufficient basis for jurisdiction when property is

subject of suit); see Shaffer v. Heitner, 433 U.S. 186, 208, 97 S. Ct. 2569, 53 L. Ed. 2d 683

(1977); Goodenbour v. Goodenbour, 64 S.W.3d 69, 79 (Tex.App.--Austin 2001, pet.

denied) (specific jurisdiction case). Merely contracting with a Texas resident is not

sufficient. Magnolia Gas Co. v. Knight Equip. & Manufac. Corp., 994 S.W.2d 684, 691

(Tex.App.–San Antonio 1998, no pet.). Nor is correspondence with state residents.

National Indus. Sand Ass'n v. Gibson, 897 S.W.2d 769, 774 (Tex. 1995). Likewise, we find

that a nonresident corporation’s ownership of loans secured by liens on Texas real

property does not alone give our courts general jurisdiction over the corporation.4

       4
       A conclusion that First Republic’s mere taking of liens on Texas real property does
not constitute minimum contacts forming a basis for the exercise of personal jurisdiction,
and thus does not, standing alone, constitute “doing business” under the long-arm statute,

                                            -6-
       Bryant argues that First Republic has availed itself of the protections of our laws by

taking liens on Texas real property because it would utilize Texas law in foreclosure of the

liens. A similar contention could be made with respect to the ownership of legal title to real

property. Moreover, we have no evidence First Republic ever has foreclosed a lien on

property in Texas. That the nonresident might in the future find it necessary to take action

under Texas law to protect or enforce its rights in its property is not evidence of continuous

and systematic contacts with our state at present.

       Bryant also argues the quality of a nonresident defendant’s contacts, not the

number, should govern the minimum contacts analysis, and that the analysis here should

not be determined by the evidence that loans with ties to Texas represent only a small

fraction of First Republic’s loan portfolio. While we must agree with that proposition, see

American Type Culture, 83 S.W.3d at 806 (noting the quality and nature of contacts, rather

than the number, to be important to minimum contacts analysis), and while the total

principal amount of First Republic’s loans with ties to Texas is not inconsequential, the

evidence concerning the existence of the loans does not tell much about the quality and

nature of First Republic’s contacts with our state. The evidence does not show where or

in what manner the loans were made, nor does it characterize the loan customers as

individuals or entities. It does not show whether the loans secured by Texas real property

are the same loans as those made to customers having a mailing address in Texas at the

is consistent with provisions of Texas corporation law, by which foreign corporations are
not deemed to be transacting business in our state and required to obtain a certificate of
authority when they engage in transactions such as creating, acquiring or enforcing
security interests in real property. See Tex. Bus. Corp. Act Ann. art. 8.01, §§ B(7), B(8),
B(12) (Vernon 2003).

                                             -7-
time of the interrogatory responses. As noted, the evidence contains First Republic’s

acknowledgment that it has made “an occasional” loan to a resident of Texas, but the

record does not equate a customer’s having a Texas mailing address with Texas

residency. In short, the record does not demonstrate continuous and systematic contacts

between First Republic and our state so as to permit our courts to exercise general

jurisdiction over it. It is therefore unnecessary for us to address Bryant’s arguments that

the exercise of jurisdiction over First Republic in this case would be consistent with, and

would not offend, traditional notions of fair play and substantial justice. We overrule

Bryant’s issues, and affirm the order and judgment of the trial court.

                                                  James T. Campbell
                                                      Justice

                                            -8-