Court Opinion

ID: 3097488
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:44:51.839406+00
Date Added: 2024-06-11T09:33:05.795989
License: Public Domain

NO. 07-12-0096-CV

                           IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                 AT AMARILLO

                                   PANEL B

                             SEPTEMBER 19, 2012
                        _____________________________

                              MARK J. WATTLES,

                                   Appellant
                                     v.

                           MINERVA PARTNERS, LTD.,

                                    Appellee
                        _____________________________

               FROM THE 99TH DISTRICT COURT OF LUBBOCK COUNTY;

          NO. 2011-557,807; HONORABLE WILLIAM C. SOWDER, PRESIDING
                        _____________________________

                             Memorandum Opinion
                        _____________________________

Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.
      Mark J. Wattles (Wattles) appeals from an order  denying  his  special
appearance in a lawsuit filed by  Minerva  Partners,  Ltd.  (Minerva).   The
latter sued Wattles to recover upon a  personal  guaranty.   We  affirm  the
order.
      Background
      Minerva is a limited partnership with its principal place of  business
in  Dallas,  Texas.   It  entered  into  a  lease  agreement  with  Ultimate
Acquisition Partners, L.P. (Ultimate), a Delaware limited  partnership,  for
space in a Lubbock, Texas, shopping center.  Wattles,  who  resided  in  Las
Vegas, Nevada, and was both an equity holder of  Ultimate  and  chairman  of
its general partner, executed a  personal  guaranty  in  favor  of  Minerva.
Through the document, he guaranteed repayment of  the  financial  obligation
incurred by Ultimate under the lease agreement.
      Minerva eventually assigned the lease to  Gill  Holdings  (Gill),  but
not the guaranty.  Gill later reassigned the lease to Minerva  so  that  the
latter could enforce the guaranty.  Apparently, Ultimate  defaulted  on  the
lease after making one payment.       Upon Minerva  suing  Wattles,  Wattles
filed a special appearance claiming he  was  not  subject  to  the  personal
jurisdiction of the Texas court.  The trial court  denied  the  plea,  which
led to this interlocutory appeal.
      Authority and Its Application
      The standard of review is de novo.   Moki  Mac  River  Expeditions  v.
Drugg, 221 S.W.3d 569, 574 (Tex. 2007).  We further note that the  defendant
had the burden  of  negating  all  bases  of  jurisdiction  alleged  by  the
plaintiff.  Id. at 574.
      Next, personal jurisdiction  may  arise  from  the  execution  of  one
contract.  Michiana Easy Livin' Country, Inc. v.  Holten,  168 S.W.3d 777,
787 (Tex. 2005), and it is not necessary that  the  non-resident  appear  on
Texas soil for the one contract to  suffice.   Retamco  Operating,  Inc.  v.
Republic Drilling, Inc., 278 S.W.3d 333,  339-40  (Tex.  2009).   However,
there must be a  showing  that  1)  the  non-resident  purposefully  availed
himself of the privilege of conducting activities in Texas, 2) the cause  of
action relates to or arises from those activities, and 3)  the  exercise  of
jurisdiction over the non-resident  comports  with  traditional  notions  of
fair play and  substantial  justice.   Id.  at  339-41.   Incidentally,  the
exercise  of  personal  jurisdiction  over  a  non-resident  seldom  offends
traditional notions of fair play  and  substantial  justice  when  the  non-
resident has  purposefully  established  minimum  contacts  with  the  forum
state.  Id. at 341.
      Here, the evidence illustrates that 1) the  property  subject  to  the
lease was located  in  Lubbock,  Texas,  2)  Minerva  relied  upon  Wattles'
execution of the guaranty in  leasing  the  property  to  Ultimate,  3)  the
guaranty recites that it was given to induce the execution of the lease,  4)
Wattles, who signed the guaranty in his individual capacity, represented  in
it that he would "derive substantial direct benefits from  the  transactions
contemplated by the Lease," 5) a representative of  Wattles  negotiated  the
terms of the guaranty on behalf of Wattles while the representative  was  in
Dallas, 6) Wattles mailed a signed  copy  of  the  guaranty  to  Dallas,  7)
Wattles agreed, via the guaranty, that the instrument  would  be  "construed
and enforced in accordance with the laws of the State in which the  Premises
are located," that state being Texas, 8) Wattles'  obligation  consisted  of
"absolutely, irrevocably and unconditionally guarantee[ing]  that  he  will,
on demand of Landlord, make the prompt and full payment  of  the  Guaranteed
Obligation" which includes "all amounts arising under  the  Lease  that  are
owed by Tenant to Landlord accruing  under  the  Lease,"  up  to  a  limited
amount, 9) Wattles agreed that  the  obligations  under  the  guaranty  "are
independent of the obligations of the Tenant and of the obligations  of  any
other  guarantor  or  person"  and   the   guaranty   is   "continuing   and
irrevocable," and 10) the controversy arises from and is  founded  upon  the
obligations allegedly imposed by the guaranty.  The foregoing  circumstances
permit one  to  reasonably  conclude  that  Wattles  not  only  purposefully
availed himself of the privilege of doing business in  Texas  but  also  had
sufficient minimum contacts with that state which should  have  led  him  to
reasonably expect to answer a suit in Texas.  See  J. D. Fields & Co. v.  W.
H. Streit, Inc., 21 S.W.3d 599, 604 (Tex. App.-Houston [1st Dist.] 2000,  no
pet.)  (finding  personal  jurisdiction   when   the   defendant   guarantor
telephoned a Houston office with the offer of guaranty to  induce  execution
of a contract, personally guaranteed an indebtedness  that  was  payable  in
Houston, and faxed a letter of  guaranty  to  Houston);  Gubitosi  v.  Buddy
Schoellkopf Products, Inc., 545 S.W.2d 528, 536 (Tex. Civ. App.-Tyler  1976,
no writ) (finding  personal  jurisdiction  when  a  guaranty  agreement  was
mailed to Texas and the signing of the guaranty was a deliberate  act  which
formed an inducement to execution of note agreements which were  payable  in
Texas); Mitchell v. Simpro, Inc., No. 14-01-0623-CV, Tex. App.  Lexis  7567,
at *15-16 (Tex. App.-Houston [14th Dist.] November 8, 2001,  no  pet.)  (not
designated for publication) (holding that a guarantor submitted  himself  to
the personal jurisdiction of Texas courts when he contacted the  prospective
recipient of a  guarantee,  executed  the  guarantee  to  induce  Simpro  to
continue selling its products to an Atlanta business, sent it to Texas,  and
agreed that Texas law should control its enforcement).   Moreover,  we  find
nothing of record suggesting that  the  exercise  of  personal  jurisdiction
over  Wattles  would  contravene  traditional  notions  of  fair   play   or
substantial justice.
      To  defeat  the  trial  court's  exercise  of  jurisdiction,  however,
Wattles argues that the guaranty is void.  And, because it is  void,  he  is
somehow shielded from the authority of a  Texas  court.   To  adopt  such  a
contention as defeating personal jurisdiction would be akin to "putting  the
cart before the horse."  The issue in question is whether  the  trial  court
can exercise personal jurisdiction over Wattles given his contacts with  the
state, not whether Minerva  has  a  viable  cause  of  action  against  him.
Personal jurisdiction may exist even if the plaintiff ultimately  loses  his
suit or has less than a certain claim.  If this was not so, then  the  trial
court could effectively require  Wattles  to  defend  against  or  otherwise
adjudicate the  merits  of  the  claim  even  if  no  personal  jurisdiction
existed.   Simply  put,  the  presence  of  personal  jurisdiction  is   not
dependent upon the merits of the underlying cause of action.   See  Michiana
Easy Livin' Country, Inc. v. Holten, 168 S.W.3d at 790  (cautioning  against
"equating the jurisdictional inquiry  with  the  underlying  merits").   Nor
does the authority cited by Wattles, that is In re Modern Textile,  Inc.  v.
P.  M.  Holdings  Corporation,  900 F.2d 1184  (8th  Cir.  1991),  suggest
otherwise.  Indeed, the existence of personal jurisdiction was not  even  an
issue there.
      We overrule Wattles' complaints and affirm  the  order  of  the  trial
court.

                                        Brian Quinn
                                        Chief Justice