Court Opinion

ID: 2924963
Source: CourtListenerOpinion
Date Created: 2015-09-11 21:12:07.71713+00
Date Added: 2024-06-11T12:46:13.439063
License: Public Domain

NUMBER 13-07-00370-CV

                            COURT OF APPEALS

                 THIRTEENTH DISTRICT OF TEXAS

                    CORPUS CHRISTI - EDINBURG

LIMITED LOGISTICS SERVICES, INC.,                                          Appellant,

                                          v.

CARLOS ROMERO VILLEGAS, ET AL.,                                            Appellees.

  On appeal from the 206th District Court of Hidalgo County, Texas.

                                  OPINION

        Before Chief Justice Valdez and Justices Garza and Vela
                    Opinion by Chief Justice Valdez

      This is an accelerated, interlocutory appeal from an order denying a special

appearance. See TEX . CIV. PRAC . & REM . CODE ANN . § 51.014(a)(7) (Vernon Supp. 2007);

TEX . R. CIV. P. 120a. Appellee, Carlos Romero Villegas, brought the underlying personal

injury action against Rosemary Arredondo, individually and as an agent of Bath and Body

Works, Bath and Body Works, Limited Brands, Inc., Special Distribution Services, and

Limited Logistics Services, Inc. (hereinafter “Limited Logistics”).   Appellant, Limited
Logistics, is the only defendant that filed a special appearance, which the trial court denied.

By five issues, which may be properly categorized as three, Limited Logistics contends that

the trial court erred in making certain evidentiary rulings and not dismissing the suit for

want of jurisdiction. We affirm.

                                               I. BACKGROUND

        Villegas and Gary Wayne Tutt were employed by Special Distribution Services, Inc.,

a Texas company, as truck drivers. On December 6, 2005, the two were delivering

products to a Bath and Body Works store in McAllen, Texas. When they arrived at the

store, Villegas exited the truck to help guide Tutt into a loading bay. Arredondo, a Bath and

Body Works employee, supervised the delivery and talked to Villegas while Tutt was

backing the truck and trailer into the loading bay. Somehow, Tutt lost sight of Villegas as

he was backing up and pinned him between a wall and the trailer. Villegas sustained

severe medical injuries in the accident.

        On December 12, 2006, Villegas sued all of the aforementioned defendants for

negligence.1 In his December 2006 petition, Villegas’s jurisdictional theory with regard to

Limited Logistics was that Limited Brands, Bath and Body Works, Limited Logistics, and

Special Distribution Services were engaged in a single business enterprise and therefore

all defendants were amenable to jurisdiction in Texas because the contacts of Bath and

Body Works, a McAllen store, and Special Distribution Services, a Texas trucking

corporation, could be imputed to Limited Brands and Limited Logistics.2

        On January 16, 2007, Limited Logistics filed a generic special appearance and an

        1
          By a petition dated February 27, 2006, Villegas sued Tutt, Special Distribution Services, Arredondo,
and Bath and Body W orks. His Decem ber 12, 2006 am ended petition added Lim ited Brands and Lim ited
Logistics as defendants.

        2
            Villegas has since settled his claim s against Special Distribution Services.

                                                        2
affidavit by Kathleen Davies, an assistant secretary for Limited Logistics, which states that

Limited Logistics does not maintain a place of business in Texas. On April 16, 2007,

Villegas responded by arguing that Limited Logistics exercised sufficient control over

Special Distribution Services to make it amenable to Texas jurisdiction through the single

business enterprise theory and offered various print-outs of website pages evidencing the

defendants’ corporate structure.3 According to the print-outs, Limited Brands, Inc. is the

holding company that owns retail store chains, including Bath and Body Works.

        Villegas also filed a carrier agreement that was executed by Limited Logistics and

Special Distribution Services. The agreement spelled out the conditions, insurance limits,

and personnel requirements that Special Distribution Services must be responsible for in

order to be the shipper for Limited Logistics. Villegas’s final piece of jurisdictional evidence

was an expert report written by Whitney Morgan, a transportation expert. Morgan earned

a bachelor of science degree in business administration with a major in transportation from

the University of Tennessee in 1975 and had been employed as a special agent for the

United States Department of Transportation. Morgan reviewed fifty-three documents,

including the police report of the incident, deposition testimony from Tutt and Arredondo,

and the agreement, and he concluded that Special Distribution Services had violated

federal safety requirements.            Morgan also opined that “Limited [Logistics] made no

reasonable effort to enforce the [safety] obligations set forth in the Agreement.”

        On April 18, 2007, Villegas filed a second amended petition in which he alleged that

Limited Logistics had negligently hired Special Distribution Services as an independent

contractor. See TEX . R. CIV. P. 63. In his second amended petition, Villegas alleged that

        3
           Lim ited Logistics objected to the adm ission of the print-outs on the ground that they were not tim ely
filed; the trial court sustained its objection. They are contained, however, in the clerk’s record and noted
herein solely to orient the reader.

                                                        3
Tutt was an incompetent truck driver and that Special Distribution Services “knew or should

have known” that it was employing an incompetent truck driver to haul its goods into Texas.

       On April 23, a special appearance hearing was held. At the hearing, Limited

Logistics objected to the admission of: (1) the contract on hearsay grounds; (2) Morgan’s

report on the grounds that it was not supported by personal knowledge and that it drew

facts from hearsay; and (3) the print-outs that Villegas filed on April 18 because they were

not timely filed. Limited Logistics, however, did not object to the timing of Villegas’s filing

of his second amended petition, nor did it amend its special appearance in response to

Villegas’s newly added claim of negligent hiring.

       At the special appearance hearing, the trial court sustained the objection to the print-

outs, overruled Limited Logistics’ first two evidentiary objections, and orally denied Limited

Logistics’ special appearance. The trial court, however, did not sign a written order

denying Limited Logistics’ special appearance until April 30, 2007. The record does not

contain an amended special appearance or any other pleading by Limited Logistics that

responds to Villegas’s claim of negligent hiring of an independent contractor. No findings

of fact or conclusions of law were requested and none have been filed. This interlocutory

appeal ensued.

                                  II. EVIDENTIARY RULINGS

       By its first and second issues, Limited Logistics challenges the trial court’s decision

to admit the carrier agreement and Morgan’s expert affidavit. We review a trial court's

decision to admit or exclude evidence under an abuse of discretion standard. See

Interstate Northborough P'ship v. State, 66 S.W.3d 213, 220 (Tex. 2001); City of

Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995). The trial court's evidentiary

ruling will be upheld if there is any legitimate basis for the ruling. Owens-Corning Fiberglass

                                              4
Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). A trial court abuses its discretion if it acts

in an arbitrary or unreasonable manner, or without reference to any guiding rules or

principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985).

Under an abuse of discretion review, an appellate court is not free to substitute its own

judgment for the trial court's judgment. Bowie Mem'l Hosp. v. Wright, 79 S.W.3d 48, 52

(Tex. 2002).

A.     The Carrier Agreement

       In its second issue, Limited Logistics contends that the trial court erred in admitting

the carrier agreement over its hearsay objection. Specifically, Limited Logistics argues that

the carrier agreement constitutes inadmissible hearsay and that Villegas did not offer any

proof as to the agreement’s authenticity.         We note, however, that at the special

appearance hearing, Limited Logistic merely stated that, “[t]he objection is it’s hearsay, it’s

not supported by any competent evidence.” Clearly, Limited Logistics did not challenge

the agreement’s authenticity or raise any other objections to its admission; therefore, the

authenticity argument is waived. See TEX . R. APP. P. 33.1(a).

       Moreover, a party to a contract will not normally prevail on a hearsay objection to

a contract because a signed instrument, such as a contract, that creates legal rights is not

hearsay because it has legal effect independent of the truth of any statement contained

in it. See Thomas C. Cook, Inc. v. Rowhanian, 774 S.W.2d 679, 685 (Tex. App.–El Paso

1989, writ denied) (“Statements that constitute offer, acceptance or terms of a

contract—so-called “operative facts”—are not hearsay; the making of such statements are

in themselves relevant and thus evidence that such statements were made is not barred

by the hearsay rule.”); see also Kepner-Tregoe, Inc. v. Leadership Software Inc., 12 F.3d
527, 539-40 (5th Cir. 1994); Sanders v. Worthington, 382 S.W.2d 910, 915-16 (Tex. 1964).

                                              5
       In this case, Villegas offered the carrier agreement to demonstrate the existence of

a legal relationship between Limited Logistics and Special Distribution Services. The

carrier agreement appears to be signed by the director of Limited Logistics, and Limited

Logistics did not properly challenge the agreement’s authenticity. We conclude, therefore,

that the trial court did not err in overruling Limited Logistics’ hearsay objection. The second

issue is overruled.

B.     Morgan’s Affidavit and Expert Report

       Villegas offered an affidavit and expert report drafted by Morgan, and the trial court

admitted both over several objections. By its first issue, Limited Logistics contends that

Morgan’s affidavit and expert report were improperly admitted because they were not

based on Morgan’s personal knowledge.

       In his report, Morgan stated that it was his expert opinion that Tutt was not qualified

to operate a commercial truck because he had prior convictions for driving while intoxicated

and possession of a controlled substance. Morgan’s report also stated that:

       The [carrier agreement] between [Limited Logistics] and SDS [Special
       Distribution Services] contains language that demonstrates control by
       [Limited Logistics] over SDS pertaining to the hiring and retention of
       employees. The Agreement exercises substantially more control over a
       motor carrier by the shipper than is typical in the industry, including the right
       to audit the carrier’s records. . .
              ....

       Had [Limited Logistics] exercised [its right to review the backgrounds of
       Special Distribution Services’s employees], [it] would have discovered that
       Mr. Tutt did not meet the provisions set forth therein and he would have been
       automatically disqualified.

       In support of its first issue, Limited Logistics points us to authority pertaining to

affidavits in a summary judgment context. See Ryland Group, Inc. v. Hood, 924 S.W.2d
120, 122 (Tex. 1996); see also TEX . R. CIV. P. 166a(f) (requiring that “supporting and

                                              6
opposing affidavits shall be made on personal knowledge, shall set forth such facts as

would be admissible in evidence, and shall show affirmatively that the affiant is competent

to testify to the matters stated therein”). Morgan’s report, however, appears in the record

as an “attachment” and purports to be an expert report.4 Moreover, Limited Logistics does

not explain why expert reports tendered at a special appearance hearing should be he held

to the same standard as an affidavit presented at a summary judgment hearing. See TEX .

R. APP. P. 38.1(h) (providing that the brief must contain a clear and concise argument for

the contentions made).

        Instead, the appropriate prism through which to review expert testimony is well

settled. An expert witness may testify regarding "scientific, technical, or other specialized"

matters if the expert is qualified and if the expert's opinion is relevant and based on a

reliable foundation. TEX . R. EVID . 702; Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 499

(Tex. 2001). Before the trial court, Limited Logistics neither assailed Morgan’s “scientific,

technical, or other specialized” knowledge nor challenged whether his testimony was

relevant and based on a reliable foundation. Because Limited Logistics did not challenge

these factors, we conclude that the trial court did not abuse its discretion in overruling

Limited Logistics’ objection. Limited Logistics’ first issue is therefore overruled.

        Having resolved the evidentiary challenges, we now turn to Limited Logistics’

jurisdictional issue.

                                        III. PERSONAL JURISDICTION

        By its third issue, Limited Logistics contends that the trial court erred in denying its

        4
          Rule 120a(3) provides that, “[t]he court shall determ ine the special appearance on the basis of the
pleadings, any stipulations m ade by and between the parties, such affidavits and attachments as may be filed
by the parties, the results of discovery processes, and any oral testim ony.” T EX . R. C IV . P. 120a(3) (em phasis
added).

                                                         7
special appearance because the trial court did not have specific jurisdiction over Villegas’s

claim. At the outset of our jurisdictional analysis we note that neither party contends that

general jurisdiction is an issue in this appeal. Indeed, Villegas announced at oral argument

that his claims rely solely on a specific jurisdiction theory. We will, therefore, discuss only

specific jurisdiction, which is the only jurisdictional theory necessary to resolve this appeal.

See TEX . R. APP. P. 47.1.

A.     Standard of Review

       Whether a court has personal jurisdiction over a defendant is a question of law

subject to de novo review. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794

(Tex. 2002). As a general rule, the "plaintiff bears the initial burden of pleading sufficient

allegations to bring a nonresident defendant within the provisions of the long-arm statute."

Id. at 793. At that point, a "defendant challenging a Texas court's personal jurisdiction over

it must negate all jurisdictional bases." Id. To determine whether all jurisdictional bases

were negated, we review all of the evidence relied upon by the parties regarding each

respective special appearance hearing. SITQ E.U., Inc. v. Reata Rests., Inc., 111 S.W.3d
638, 645 (Tex. App.–Fort Worth 2003, pet. denied). As in this case, when a trial court does

not issue findings of fact and conclusions of law, we imply all facts necessary to support

the judgment. BMC Software, 83 S.W.3d at 795.

B.     Due Process & Personal Jurisdiction

1.     The Texas Long-Arm Statute

       The Texas long-arm statute grants Texas courts jurisdiction over nonresident

defendants doing business in Texas. See TEX . CIV. PRAC . & REM . CODE ANN . § 17.042

(Vernon 1997).     While the long-arm statute enumerates certain examples of doing

business, it does not provide an exclusive list. See id.; see also BMC Software, 83 S.W.3d
8
at 795; Schlobohm v. Schapiro, 784 S.W.2d 355, 356-57 (Tex. 1990). The statute is

construed as extending Texas courts' jurisdiction over nonresident defendants as far as

the federal constitutional requirement of due process permits. BMC Software, 83 S.W.3d

at 795.

2.     Minimum Contacts

       “The Due Process Clause of the Fourteenth Amendment limits the power of a state

court to render a valid personal judgment against a nonresident defendant.” World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). A Texas court's personal

jurisdiction over a nonresident defendant is constitutional when two conditions are met:

(1) the defendant has established minimum contacts with Texas; and (2) the exercise of

jurisdiction comports with traditional notions of fair play and substantial justice. BMC

Software, 83 S.W.3d at 795 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316

(1945)). The “touchstone” of the minimum contacts analysis is purposeful availment; i.e.,

that “the defendant purposefully avails itself of the privilege of conducting activities within

the forum State, thus invoking the benefits and protections of its laws.” Michiana Easy

Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005) (quoting Hanson v.

Denckla, 357 U.S. 235, 253 (1958)).

       The purposeful availment analysis has three components. See Michiana, 168
S.W.3d at 785. First, the purposeful availment requirement ensures that a nonresident

defendant's contacts with the forum state resulting from the unilateral activities of another

party or a third person will not be the sole basis of haling that defendant into the

jurisdiction. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985); Michiana, 168
S.W.3d at 785. Thus, we look at only the defendant's contacts with the forum. Michiana,
168 S.W.3d at 785. Second, the contacts must be "purposeful" rather than random,

                                              9
isolated, or fortuitous. Burger King, 471 U.S. at 462; Keeton v. Hustler Magazine, Inc., 465
U.S. 770, 774 (1984); Michiana, 168 S.W.3d at 785. Third, the defendant must have

“availed" itself of the jurisdiction by seeking some benefit, advantage, or profit from the

forum state so as to consent to suit there. Michiana, 168 S.W.3d at 785. Conversely, "a

nonresident may purposefully avoid a particular jurisdiction by structuring its transactions

so as neither to profit from the forum's laws nor be subject to its jurisdiction." Id.

3.     Specific Jurisdiction

       Specific jurisdiction exists when the defendant's alleged liability arises from or is

related to an activity conducted within the forum. See Moki Mac River Expeditions v.

Drugg, 221 S.W.3d 569, 585 (Tex. 2007).

4.     Traditional Notions of Fair Play and Substantial Justice

       The exercise of personal jurisdiction over a nonresident defendant must also

comport with “traditional notions of fair play and substantial justice.” Guardian Royal Exch.

Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex. 1991). The burden

is on the defendant to present a compelling case that the presence of some other

considerations renders the exercise of jurisdiction unreasonable. Id. at 231 (quoting

Burger King, 471 U.S. at 477). In making a determination, a court generally must look to

the following factors: “(1) the burden on the defendant; (2) the interests of the forum state

in adjudicating the dispute; (3) the plaintiff's interest 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 several states in furthering fundamental

substantive social policies.” Id. at 231. “Only in rare cases . . . will the exercise of

jurisdiction not comport with fair play and substantial justice when [a] nonresident

defendant has purposefully established minimum contacts with the forum state.” Id. at 231.

                                              10
Furthermore, distance from the forum is generally not sufficient to defeat jurisdiction

because the availability of “modern transportation and communication have made it less

burdensome for a party sued to defend himself in a state where he engages in economic

activity.” McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223 (1957).

C.     Analysis

       In his live petition, Villegas pleaded a claim for negligent hiring against Limited

Logistics, a foreign corporation, by alleging that it hired Special Distribution Services, a

Texas corporation, to deliver products to Texas when Limited Logistics: (1) retained

control over Special Distribution Services, and (2) “knew or should have known” that

Special Distribution Services employed an incompetent driver. See TEX . R. CIV. P. 63; see

also BMC Software, 83 S.W.3d at 794 (providing that “plaintiff bears the initial burden of

pleading sufficient allegations to bring a nonresident defendant within the provisions of the

long-arm statute”).

       Villegas produced the carrier agreement as evidence that Limited Logistics retained

some control over Special Distribution Services. The carrier agreement provided, in

relevant part, that:

       Carrier [Special Distribution Services] shall screen its own employees,
       agents, independent contractors and other Third Persons prior to handling
       Shipper’s Goods, and shall remove from the roster any individuals who, as
       a result of their record (theft, drugs or violence automatically disqualifies),
       may, at the discretion of Shipper [Limited Logistics], represent a threat to the
       security of any of the Goods, or any other property of Shipper. Shipper may
       request, and Carrier shall provide upon request of Shipper, copies of all
       background checks for all employees, agents and independent contractors
       or other Third Persons expected to be providing services on behalf of Carrier
       under this Agreement. . . . If Shipper notifies Carrier that any employee,
       agent, independent contractor of other Third Person of Carrier under contract
       with Carrier is not satisfactory to Shipper for any reason, then Carrier shall
       cease utilizing such individual in connection with services rendered
       hereunder on behalf of Carrier.

                                             11
              ....

       Carrier must effect inside delivery or pickup for all store locations.

The record also contains Morgan’s report, which states that Tutt was convicted for driving

while intoxicated on June 23, 1987. Morgan’s report also stated that on October 7, 1993,

Tutt was convicted on two felony counts of delivery and possession of a controlled

substance.

       Villegas was injured while Special Distribution Services’ delivery truck was backing

up to the loading bay of a Bath and Body Works store to make a delivery for Limited

Logistics. Moreover, Villegas was injured by Tutt, a driver who had, according to Morgan’s

report, a checkered past. The location—including the store to which Limited Logistics

directed Special Delivery Services’ delivery—and the circumstances surrounding Villegas’s

injuries—including Tutt’s qualifications and background—are the operative facts of the

underlying suit. See Moki Mac River Expeditions, 221 S.W.3d at 585. We conclude that

Villegas pleaded allegations which brought Limited Logistics within the long-arm statute of

this state. See EMI Music Mexico, S.A. de C.V. v. Rodriguez, 97 S.W.3d 847, 856-58

(Tex. App.–Corpus Christi 2003, no pet.) (finding that plaintiffs’ pleadings and special

appearance evidence provided sufficient jurisdictional allegations with respect to the

plaintiffs' claim of negligent hiring arising from an automobile accident in Mexico).

       It then became Limited Logistics’ obligation to negate jurisdiction. BMC Software,
83 S.W.3d at 793 (providing that a “defendant challenging a Texas court's personal

jurisdiction over it must negate all jurisdictional bases”).      Limited Logistics’ special

appearance states that:

       1. Defendant is not a resident of Texas.

       2. Defendant does not engage and has not engaged in business in Texas,

                                             12
       nor committed any tort, in whole or in part, within the state.

       3. Defendant does not maintain and has not maintained since the date of the
       incident made the basis of suit a place of business in Texas, and does not
       have any employees, officers, directors, or legal representatives within the
       state for purposes of conducting business in Texas.

       4. Defendant maintains no bank accounts in the state, had no telephone
       listing in the state, keeps no books or records in the state and pays no taxes
       in the state.

       5. Defendant does not solicit or advertise for business within the state of
       Texas.

The legal argument section of Limited Logistics special appearance states the general law

regarding jurisdiction over out-of-state defendants; it does not speak to Villegas’ negligent

hiring claim.

       On appeal, Limited Logistics argues that the carrier agreement does not establish,

for jurisdictional purposes, a right of control, which is an element to a negligent hiring claim,

because it did not control the “methods, means, or details” of in-store delivery. See

Elliott-Williams Co. v. Diaz, 9 S.W.3d 801, 804 (Tex. 1999). However, this argument was

never made to the trial court in Limited Logistics’ special appearance, at the special

appearance hearing, or during the time between the special appearance hearing and when

the written order was signed. It is, therefore, waived. See TEX . R. APP. P. 33.1; Anchia v.

DaimlerChrysler AG, 230 S.W.3d 493, 500 n.1 (Tex. App.–Dallas 2007, pet. denied)

(providing that special appearance issues not raised by an appellant to a trial court are

waived on interlocutory appeal); see also Michiana, 168 S.W.3d 782 (“If all the evidence

is filed with the clerk and only arguments by counsel are presented in open court, the

appeal should be decided on the clerk's record alone.”). We conclude that Limited

Logistics failed to negate all jurisdictional bases. See BMC Software, 83 S.W.3d at 793.

       Finally, we must determine whether the exercise of jurisdiction comports with

                                               13
traditional notions of fair play and substantial justice. Here, Limited Logistics asserted in

its special appearance that “[e]xercising jurisdiction over this Defendant’s person and

property would also violate traditional notions of fair play and substantial justice.” It also

asserted that “the exercise over this Defendant’s person would violate the Due Process

Clause of the Fourteenth Amendment to the United States Constitution, as well as the

Texas Constitutional and long-arm statute.” It did not provide further elaboration or

evidence regarding these arguments. Additionally, it presented no evidence that it would

be burdened by the exercise of jurisdiction in Texas. Accordingly, we find that the interest

in adjudicating this case in Texas far outweighs the burden that Limited Logistics presented

to the trial court. Limited Logistics third issue is overruled.

D.     Response to Dissent

       The dissent writes that “Villegas seeks to hold LLS responsible for the alleged

negligent actions of an unrelated entity and its employee, SDS and Tutt. In the absence

of a specific act performed in Texas by LLS, its only burden was to negate its residency.”

This proposed holding is incorrect in two respects. First, we have already held that a

foreign defendant is subject to jurisdiction in Texas on a negligent hiring claim if it directs

an allegedly incompetent driver into this state, even if the accident occurs elsewhere.

Rodriguez, 97 S.W.3d at 856-58. In this case, not only did Limited Logistics direct Special

Distribution Services’ trucks to Texas, but the accident also occurred here.

       Second, the dissent totally ignores the fact that Limited Logistics’ special

appearance did not challenge the assertion of jurisdiction based on Villegas’ negligent

hiring claim. Instead, the dissent entertains Limited Logistics’ untimely argument regarding

the negligent hiring claim. We, however, are bound by our procedural rules and will not

address waived arguments.

                                              14
                                               IV. CONCLUSION

      The trial court’s order denying Limited Logistics’ special appearance is affirmed.5

                                                                       ____________________
                                                                       ROGELIO VALDEZ
                                                                       Chief Justice

Dissenting Opinion by Justice Vela.

Opinion delivered and filed
this the 27th day of August, 2008.

      5
          Lim ited Logistics’ m otion to strike Villegas’s brief is denied.

                                                        15