Court Opinion

ID: 4693454
Source: CourtListenerOpinion
Date Created: 2021-06-08 09:15:56.701678+00
Date Added: 2024-06-11T08:05:23.269369
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                    NO. 03-19-00724-CV

   ACP Insurance Intermediate, LLC; ACP Insurance Holdings, Inc.; ACP Insurance
 Holdings, LP; Embark Insurance, LLC; Embark Holdco Management, LLC; Embark
   Insurance Intermediate, LLC; Embark Corporate Services, LLC; Embark General
 Insurance Adjusters, LLC; Embark General Insurance Agency, LLC; ACP Insurance
     Finance, Inc.; ACPI (Assignment for the Benefit of Creditors), LLC; ACPAHM
  (Assignment for the Benefit of Creditors), LLC; AGIA (Assignment for the Benefit of
         Creditors), LLC; ACS (Assignment for the Benefit of Creditors), LLC;
AGIAC (Assignment for the Benefit of Creditors), LLC; APF (Assingment for the Benefit
           of Creditors), LLC; Access General Agency of Arizona, LLC; and
                Access General Agency of Pennsylvania, LLC, Appellants

                                              v.

                                Cantilo & Bennett, LLP,
           Special Deputy Receiver of Access Insurance Company Inc., Appellee

                FROM THE 53RD DISTRICT COURT OF TRAVIS COUNTY
        NO. D-1-GN-19-000869, THE HONORABLE TIM SULAK, JUDGE PRESIDING

                          MEMORANDUM OPINION

              This is an interlocutory appeal from an order denying special appearances filed by

non-resident defendants ACP Insurance Intermediate, LLC; ACP Insurance Holdings, Inc.; ACP

Insurance Holdings, LP (collectively, “the ACP Respondents”); non-resident defendants Access

General Agency of Arizona, LLC, and Access General Agency of Pennsylvania, LLC

(collectively, “the Surviving Access Holdco Entities”); Embark Holdco Management, LLC

(“Embark Holdco”); Embark Corporate Services, LLC (“Embark Services”); Embark Insurance,

LLC (“Embark Insurance”); Embark Insurance Intermediate, LLC (“Embark Insurance
Intermediate”); Embark General Insurance Adjusters, LLC (“Embark Adjusters”); Embark

General Insurance Agency, LLC (“Embark Agency”); and ACP Insurance Finance, Inc. (“ACP

Finance”) (collectively, “the Embark Respondents”); and non-resident defendants ACPI

(Assignment for the Benefit of Creditors), LLC; ACPAHM (Assignment for the Benefit of

Creditors), LLC; AGIA (Assignment for the Benefit of Creditors), LLC; ACS (Assignment for

the Benefit of Creditors), LLC; AGIAC (Assignment for the Benefit of Creditors), LLC; and

APF (Assignment for the Benefit of Creditors), LLC (collectively, “the ABC Respondents”).

See Tex. Civ. Prac. & Rem. Code § 51.014(a)(7) (authorizing appeal from interlocutory order

that “grants or denies the special appearance of a defendant under Rule 120a, Texas Rules of

Civil Procedure”). In three issues, the appellants contend that the trial court erred in denying

each of their special appearances. We will reverse the trial court’s order denying the special

appearances and render judgment dismissing the claims against the appellants for lack of

personal jurisdiction.

                                            BACKGROUND

               In March 2018, the Texas Department of Insurance (the Department) sued Access

Insurance Company (Access) in Travis County District Court seeking an order designating the

Department’s Commissioner as the liquidator of Access pursuant to the Texas Insurance Code.

See Tex. Ins. Code § 443.151 (“An order to liquidate the business of an insurer shall appoint the

commissioner and any successor in office as the liquidator and shall direct the liquidator to take

possession of the property of the insurer and to administer it subject to this chapter.”). The

district court signed an agreed order that appointed the Commissioner the liquidator and vested

in him title to all of Access’s property.

                                                2
               Until it was placed into receivership, Access was a Texas-domiciled insurance

company regulated by the Department that specialized in private passenger nonstandard

automobile liability and physical damage policies. Access’s business was conducted through

a series of services agreements with Access Holdco Management, LLC (Access Holdco

Management), which as of 2015 was an unrelated company, and its subsidiaries.1 By 2018,

Access’s business deteriorated, causing Access to be placed into receivership. Having lost their

primary revenue stream due to Access’s insolvency, Access Holdco Management and a number

of its subsidiaries instituted what is referred to as an “assignment for the benefit of creditors”

proceeding in Delaware Chancery Court. See 10 Del. C. §§ 7301-87 (providing for proceedings

for discharge of debt upon insolvency).      As part of that process, which was governed by

Delaware law, Access Holdco Management and its subsidiaries assigned their assignable

assets and property to a group of newly created entities—the ABC Respondents. The ABC

Respondents were then responsible for liquidating those assets for the benefit of Access Holdco

Management’s creditors. Id. § 7328 (disposition of proceeds).

               In August 2018, the ABC Respondents executed an asset purchase agreement

whereby Embark Holdco and Embark Services acquired assets that had previously been assigned

to the ABC Respondents. In addition to purchasing assets, which were identified in a schedule to

the asset purchase agreement, Embark Holdco and Embark Services assumed one contract, a

Transition Services Agreement (the ABC TSA), that ACS (Assignment for the Benefit of

Creditors), LLC had entered into with Access Corporate Services, LLC, a subsidiary of Access

       1
           Until 2015, Access and Access Holdco Management were under common ownership.
In 2015, ownership of Access Holdco Management was transferred to a third party. As part of
that transaction, Access and Access Holdco Management entered into a contract whereby Access
Holdco Management and its subsidiaries operated Access’s day-to-day operations pursuant to a
series of services agreements.
                                                3
Holdco Management, in order to facilitate ACS (Assignment for the Benefit of Creditors), LLC’s

sale and transfer of the assets that Access Holdco Management had assigned to the ABC

Respondents.

               On February 21, 2019, Cantilo & Bennett, the court-appointed Special Deputy

Receiver for Access (“the SDR”), submitted a proof of claim in the Delaware Chancery Court

seeking to recover any proceeds that the ABC Respondents might receive in connection with

the sale of the assets assigned to them by Access Holdco Management and its subsidiaries.

The SDR also objected to the Delaware Chancery Court’s exercise of jurisdiction over the

assignment for the benefit of creditors proceeding based on its allegation that the proceedings

involved property owned by Access, title to which was vested in the SDR. The SDR argued that

the Texas Insurance Code vested jurisdiction over any proceeding affecting that property in the

Texas receivership proceeding in Travis County District Court. The SDR also filed a separate

lawsuit, the proceeding underlying this appeal, in Travis County District Court against the ABC

Respondents, the Embark Respondents, the ACP Respondents, and the Surviving Access Holdco

Entities alleging causes of action for breach of contract, negligence, and breach of fiduciary duty,

and sought relief pursuant to Texas Insurance Code sections 443.202 through 443.207 and

chapter 24 of the Texas Business and Commerce Code.              See Tex. Ins. Code §§ 443.202

(permitting receiver to recover property transferred by insurer to affiliate), .203 (permitting

receiver to avoid certain post-petition transfers by insurer), .204 (permitting receiver to avoid

certain preferences), .205 (permitting receiver to avoid certain fraudulent transfers), .206

(permitting receiver to avoid certain transfers of or liens on property of, or obligations incurred

by, insurer), .207 (establishing liability of transferee for avoided transfer); Tex. Bus. & Com.

Code ch. 24 (Uniform Fraudulent Transfer Act).

                                                 4
               The ABC Respondents, the Embark Respondents, the ACP Respondents, and the

Surviving Access Holdco Entities filed special appearances objecting to the district court’s

exercise of jurisdiction over them. See Tex. R. Civ. P. 120a. After a hearing, the trial court

denied the special appearance as to each of the ABC Respondents, the Embark Respondents, the

ACP Respondents, and the Surviving Access Holdo Entities. This appeal followed.

                                         DISCUSSION

               Texas courts may exercise jurisdiction over a non-resident if (1) the Texas

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

consistent with federal and state constitutional guarantees of due process. Moki Mac River

Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007); see Tex. Civ. Prac. & Rem. Code

§ 17.042 (Texas long-arm statute). The Texas long-arm statute allows Texas courts to exercise

personal jurisdiction “as far as the federal constitutional requirements of due process will

permit.” BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002) (quoting

U-Anchor Advert., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977)).             Consequently, “the

requirements of the Texas long-arm statute are satisfied if an assertion of jurisdiction accords

with federal due-process limitations.” Moki Mac River Expeditions, 221 S.W.3d at 575.

               The exercise of jurisdiction over a non-resident comports with due process when

(1) the non-resident has minimum contacts with the forum state, and (2) asserting jurisdiction

complies with traditional notions of fair play and substantial justice. Moncrief Oil Int’l, Inc. v.

OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013); see International Shoe Co. v. Washington,

326 U.S. 310, 316 (1945). “A defendant establishes minimum contacts with a state when it

purposefully avails itself of the privilege of conducting activities within the forum state, thus

                                                5
invoking the benefits and protections of its laws.” Retamco Operating, Inc. v. Republic Drilling

Co., 278 S.W.3d 333, 338 (Tex. 2009). If a non-resident’s Texas contacts are random, fortuitous,

or attenuated, the defendant is not subject to jurisdiction in Texas courts. Michiana Easy Livin’

Country, Inc. v. Holten, 168 S.W.3d 777, 778 (Tex. 2005). In addition, a defendant must seek

some benefit, advantage, or profit by availing itself of the jurisdiction of Texas. Id. The

defendant’s activities, whether they consist of direct acts within Texas or conduct outside of

Texas, “must justify a conclusion that the defendant could reasonably expect being called into a

Texas court.” American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex.

2002) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).

               A non-resident’s contacts can give rise to either specific or general jurisdiction.

BMC Software, 83 S.W.3d at 795. Specific jurisdiction is established if the defendant’s alleged

liability arises out of or relates to the defendant’s contacts with the forum. Moki Mac River

Expeditions, 221 S.W.3d at 575 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall,

466 U.S.408, 414 (1984)). When specific jurisdiction is alleged, our minimum-contacts analysis

must focus on the relationship among the defendant, the forum, and the litigation. Id. at 575-76.

For a non-resident’s forum contacts to support an exercise of specific jurisdiction, there must be

a substantial connection between those contacts and the operative facts of the litigation. Id. at 585.

               Whether a court has jurisdiction is a question of law that we review de novo.

Moncrief Oil, 414 S.W.3d at 150. The plaintiff bears “the initial burden of pleading allegations

sufficient to confer jurisdiction,” and the burden then shifts to the defendant “to negate all

potential bases for personal jurisdiction the plaintiff pled.” Id. at 149. A defendant can negate

jurisdiction either legally or factually. Kelly v. General Interior Constr., Inc., 301 S.W.3d 653,

659 (Tex. 2010). Legally, the defendant can show that the plaintiff’s alleged jurisdictional facts,

                                                  6
even if true, do not meet the personal jurisdiction requirement. Id. Factually, the defendant can

present evidence that negates one or more of the requirements, controverting the plaintiff’s

contrary allegations. Id. The plaintiff can then respond with evidence supporting the allegations.

Id. If the parties present conflicting evidence that raises a fact issue, we will resolve the dispute

by upholding the trial court’s determination. See Retamco Operating, 278 S.W.3d at 337; see

also BMC Software, 83 S.W.3d at 795. “When, as here, the trial court does not issue findings of

fact and conclusions of law, we imply all relevant facts necessary to support the judgment that

are supported by the evidence.” Moncrief Oil, 414 S.W.3d at 150. If the appellate record

includes the reporter’s record and clerk’s record, as it does in this case, the trial court’s implied

findings are not conclusive but may be reviewed for legal and factual sufficiency of the evidence.

BMC Software, 83 S.W.3d at 795. On appeal, the scope of the record includes all of the evidence

in the record. Washington DC Party Shuffle, LLC v. IGuide Tours, LLC, 406 S.W.3d 723, 729

(Tex. App.—Houston [14th Dist.] 2013, pet. denied). With these principles in mind, we consider

the allegations and evidence presented to the trial court to determine whether the trial court erred

by denying the special appearances.

               The SDR generally alleged that the trial court had jurisdiction over all eighteen

appellants as follows:

       This Court has jurisdiction over the parties herein pursuant to Tex. Ins. Code
       §443.005. Specifically, this court has personal jurisdiction over Defendants for
       the following reasons: this is a civil proceeding arising under and related to this
       delinquency proceeding under Chapter 443 of the Texas Insurance Code; the
       transactions and occurrences which form the basis for this Petition occurred, in
       whole or in part, in this state; defendants reside/and or conduct business in this
       state that is directly related to the subject matter of this suit; defendants fall under
       the Court’s statutory personal jurisdiction set out in Tex. Ins. Code §443.005(d)
       and Tex. Civ. Prac. & Rem. Code Chapter 17, and Defendants, individually and/or

                                                  7
       collectively, and/or their predecessors contracted with a Texas resident and
       performance of the agreement in whole or in part, was to occur in Texas.

We consider each of the five bases the SDR relied on to establish personal jurisdiction over the

appellants.

               First, the SDR asserted that the court had jurisdiction over the appellants because

the proceeding was “related to” a delinquency proceeding under Chapter 443 of the Texas

Insurance Code and because they collectively “fall under the Court’s statutory personal

jurisdiction set out in” section 443.005(d) of the Texas Insurance Code. The fact that the SDR’s

lawsuit was “related” to a delinquent insurer that was in receivership does not, however,

eliminate the requirement that the exercise of jurisdiction over the defendants to the underlying

proceeding also comport with state and federal due process requirements. See Guardian Royal

Exch. Assur. Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991); Walker v.

Loiseau, No. 03-02-00328-CV, 2003 WL 21705253, at *5 (Tex. App.—Austin Jul. 24, 2003, no

pet.) (mem. op.) (analyzing whether non-resident defendant had minimum contacts necessary for

Texas to assert personal jurisdiction over it in receivership suit). Section 443.005(d) of the

Texas Insurance Code provides that a receivership court has jurisdiction over five categories of

entities, including agents who have written policies for the insurer; entities that have entered into

contracts with the insured; officers and directors, and managers of the insurer; entities that hold

assets of the insurer; and entities or persons obligated to the insurer in an action incident to the

obligation. See Tex. Ins. Code § 443.005(d). As an initial matter, the underlying proceeding is

not a delinquency proceeding commenced under chapter 443 of the Texas Insurance Code. The

delinquency proceeding is a separate action that was filed in Travis County district court before

the SDR filed the underlying suit. Thus, it is not clear that section 443.005(d) has any relevance

                                                 8
to the court’s jurisdiction over the non-resident appellants. In any event, the live pleadings do

not include allegations that tie any of the individual appellants to any of the bases for jurisdiction

enumerated in section 443.005(d). The petition makes global allegations against groups of

defendants, and we are unable to discern from those allegations which defendants the SDR

maintains fall within any of the categories listed in section 443.005(d). Thus, the SDR failed to

allege jurisdictional facts that establish that chapter 443 of the Texas Insurance Code provides a

basis for the trial court to exercise personal jurisdiction over appellants that comports with state

and federal due process requirements. See Guardian Royal Exch., 815 S.W.2d at 226.

               Next, the SDR alleged that “transactions and occurrences which form the basis

for” the underlying suit occurred in whole or in part in Texas. The SDR’s petition, however,

does not identify any “transaction” or “occurrence” involving any appellant that occurred in

whole or in part in Texas. Similarly, the SDR’s assertion that “defendants reside and/or conduct

business” in Texas directly related to the subject of the underlying suit is unsupported by any

allegations of jurisdictional facts that identify what business any particular appellant conducted

in Texas or how any such business relates to the claims asserted in the suit. And it is undisputed

that none of the appellants are Texas residents.

               We next consider the SDR’s allegation that the appellants “individually or

collectively and/or their predecessors” contracted with a Texas resident and performance of the

contract occurred in whole or in part in Texas. See Tex. Civ. Prac. Rem. Code § 17.042 (acts

constituting business in Texas include contracting with Texas resident when either party is

to perform contract in whole or in part in Texas). The SDR first alleges that the appellants

“acted in concert with each other,” which, in its view, justifies its failure to make individual

jurisdictional allegations against each of them. Instead, the SDR appears to maintain that the

                                                   9
acts it describes as subjecting certain appellants to personal jurisdiction in Texas should

be ascribed to all the appellants. Assuming, without deciding, the validity of this theory, we

consider whether the SDR’s jurisdictional allegations establish that any of the appellants are

subject to personal jurisdiction in Texas. In its brief, the SDR asserts that appellants are “either

entities that contracted with a Texas insurance company or successors to such entities.” The

SDR argues that the ABC Respondents are “successors” to Access Holdco Management and its

subsidiaries and, consequently, were “successors in contracts” with Texas residents. The SDR

bases this argument on the transfer of assets that occurred as part of the assignment for the

benefit of creditors proceeding in Delaware Chancery Court. In that series of transactions,

the ABC Respondents acquired the assets previously held by Access Holdco Management and

its subsidiaries by assignment, not by a stock transfer.        Thus, the ABC Respondents are

not “successors” to any of the liabilities or obligations of Access Holdco Management or its

subsidiaries. See McKee v. American Transfer & Storage, 946 F. Supp. 485, 487 (N.D. Tex.

1996) (“Texas law does not generally recognize successor liability for subsequent purchases of

corporate assets.”). Thus, the ABC Respondents’ acquisition of assets owned by Access Holdco

Management and its subsidiaries does not establish that they should have reasonably foreseen

being haled into Texas courts in connection with any business conducted between Access

Holdco Management and its subsidiaries and Access. There is no evidence that the ABC

Respondents assumed, and therefore had any responsibility for, any liabilities of Access Holdco

Management or its subsidiaries. Cf. Kelly Inv., Inc. v. Basic Cap. Mgmt., 85 S.W.3d 371, 375-76

(Tex. App.—Dallas 2002, no pet.). In Kelly, the court held that the non-resident defendant was

subject to personal jurisdiction in Texas because it purchased contracts with Texas residents

knowing that, at the time of the purchase, those contracts were the subject of pending litigation in

                                                10
Texas and expressly assumed the “litigation risk” of the Texas cases. Id. Here, however, the

ABC Respondents did not assume any existing obligations or liabilities related to the assets it

acquired by assignment. Moreover, the SDR presented no evidence of what specific contracts it

was relying on to confer personal jurisdiction over the ABC Respondents other than to allege

that they were with “Texas residents.” Furthermore, other than to assert that all the appellants

“acted in concert with each other,” the SDR does not explain the basis for its contention that any

of the Embark Respondents, the ACP Respondents, or the Surviving Access Holdco Entities are

successors of entities that contracted with Access, nor does it identify any specific contracts that

any of those appellants had with a Texas company that are the basis of any of the claims asserted

in the underlying proceeding.

               On appeal the SDR also argues that all appellants agreed to submit to personal

jurisdiction in Texas because they or their predecessors were parties to an agreement with the

SDR that included a provision that the Texas court in which the receivership action was pending

would have exclusive jurisdiction over any litigation arising out of the agreement. The SDR

argues that this agreement constitutes consent by the appellants to personal jurisdiction in Texas.

The agreement the SDR refers to is a transition services agreement (the SDR TSA) that the SDR

entered into with Access Holdco Management and its subsidiaries in April 2018, shortly after

the Texas receivership proceedings were instituted. The stated purpose of the SDR TSA was for

Access Holdco Management and its subsidiaries to “provide services to the SDR in order to

facilitate the orderly liquidation of [Access].” The SDR argues that the appellants assumed the

SDR TSA from Access Holdco Management and, consequently, have consented to personal

jurisdiction in Texas for litigation arising out of that agreement. The SDR maintains that the

SDR TSA was one of the “assets” Access Holdco Management assigned to the ABC Respondents

                                                11
that were then sold to the Embark Respondents. At the hearing on the special appearances, the

SDR’s representative testified that she understood that the SDR TSA was assigned to Embark

Holdco as part of an August 2018 asset purchase agreement pursuant to which Embark Holdco

Management, LLC and Embark Corporate Services, LLC acquired certain of the assets that had

been assigned to the ABC Respondents. The SDR representative stated, however, that she was

not familiar with the specific assets that were sold or assigned in the August 2018 asset purchase

agreement and that her understanding was based on her review of the transaction documents.

She did not identify anything specific in those documents to support her understanding that either

of the Embark Respondents had been assigned or assumed the SDR TSA.

               For their part, the Embark Respondents submitted the sworn declaration of

Thomas A. Minick, president of each of the ABC Respondents. Minick averred that none of the

ABC Respondents had entered into any contract with the SDR or assumed or taken assignment

of any contracts between the SDR and Access Holdco Management. Minick further averred that

the only contract the ABC Respondents had assumed from Access Holdco Management and

subsequently assigned to the Embark Respondents was a different transition services agreement,

the ABC TSA that ACS (Assignment for the Benefit of Creditors), LLC had entered into with

Access Corporate Services, LLC in order to facilitate ACS (Assignment for the Benefit of

Creditors), LLC’s sale and transfer of the assets that Access Holdco Management had assigned

to the ABC Respondents.       The Embark Respondents submitted the sworn declaration of

Raimundo Ramirez, the president of Embark Holdco. Ruiz averred that none of the Embark

Respondents had entered into any contracts with the SDR and that none assumed any contract

from Access Holdco Management other than the ABC TSA. The ABC Respondents and the

Embark Respondents also attached as an exhibit to the sworn declaration of Matthew L. McGinnis

                                               12
a copy of the asset purchase agreement between the ABC Respondents and the Embark

Respondents, which specifies on Schedule 1.1(c) that the only contract assumed by the Embark

Respondents as part of the transaction was the ABC TSA, which is not the same agreement as

the SDR TSA. Thus, appellants established that none were parties to the SDR TSA or its

agreement to the jurisdiction of the Texas receivership court for litigation arising out of the

SDR TSA. Nor does the SDR explain how the claims it is asserting in this suit arise out of the

SDR TSA and, if they do, why they are properly brought in this proceeding as opposed to in the

separate receivership proceeding.

               The SDR also alleges that the appellants participated in “a scheme to defraud the

SDR and other Access creditors” by instituting the proceedings in Delaware Chancery Court that

resulted in the assignment of assets to the ABC Respondents and the sale of certain assets to the

Embark Respondents. The SDR asserts that these transactions constitute a tort committed in

whole or in part in Texas such that the appellants are subject to the district court’s jurisdiction.

The asset transfer was done pursuant to Delaware law and under the supervision of the Delaware

Chancery Court. Even if the asset transfer could be considered a tort,2 it was not “committed in

whole or in part” in Texas. See Tex. Civ. Prac. & Rem. Code § 17.042(2). The SDR did not

make any allegations or present evidence that showed a factual nexus between the alleged

wrongdoing and Texas such that the alleged wrongdoing could be said to have been committed

in whole or in part in Texas. See Searcy v. Parex Res., Inc., 496 S.W.3d 58, 67-68 (Tex. 2016)

       2
          The SDR has not presented evidence that the proceeding was improper or constituted
tortious conduct. In fact, the SDR has filed a proof of claim in the Delaware Chancery Court by
which it may recover from the estates of Access Holdco Management and its subsidiaries any
money or property to which it can show itself entitled. The SDR has not identified any evidence
of harm Access or the receivership estate suffered as a result of the assignment of Access Holdco
Management and its subsidiaries’ assets to the ABC Respondents.
                                                13
(“Thus, ‘the mere fact that a defendant’s conduct affected plaintiffs with connections to the

forum state does not suffice to authorize jurisdiction.’” (quoting Walden v. Fiore, 571 U.S. 277,

291 (2104))).

                The SDR further asserts that appellants are subject to personal jurisdiction

because, according to the SDR, “the entirety of [their] economic value derives from the contracts

with [a] Texas insurance company.” Relying on Cornerstone Healthcare Group Holding, Inc. v.

Nautic Managment VI, L.P., 493 S.W.3d 65 (Tex. 2016), the SDR argues that because the ACP

Respondents purchased Access Holdco Management, the parent company of the various entities

that contracted with Access to conduct its business before it was placed into receivership, they

are subject to the district court’s personal jurisdiction. The SDR’s reliance on Cornerstone is

misplaced. In Cornerstone, a Texas company claimed that non-resident private equity funds

had usurped a corporate opportunity by purchasing a chain of Texas hospitals from a Texas

company. Id. at 67-68. The court held that Texas courts had specific personal jurisdiction over

the non-resident funds because they had formed a Texas-based limited liability company for the

purpose of purchasing the hospitals. Id. at 67. In the present case, the ACP Respondents did not

form a Texas company, did not purchase a Texas company, and did not purchase assets from a

Texas company. Rather, the ACP Entities acquired a non-resident company, Access Holdco

Management, from another non-resident company, Access Insurance Holdings, LLC, in a

transaction governed by Delaware law.       Although the company acquired, Access Holdco

Management, had been a service provider to a Texas entity, that non-party’s provision of

services to a Texas entity in the ordinary course of its business prior to its acquisition is too

attenuated and fortuitous to constitute purposeful availment of the forum by the ACP

Respondents.    See BMC Software, 83 S.W.3d at 795.         Moreover, the SDR’s jurisdictional

                                               14
allegations do not establish that its claims relate to the ACP Respondents’ purchase of Access

Holdco Management such that the purchase can give rise to specific jurisdiction over the ACP

Respondents in a Texas court. See Ajamie LLP v. Podesta Grp., Inc., No. 01-19-00503-CV,

2020 WL 716734, at *4 (Tex. App.—Houston [1st Dist.] Feb 13, 2020, no pet.) (mem. op.)

(noting that relatedness prong of specific jurisdiction requires that there be “substantial

connection” between defendant’s forum contacts and operative facts of litigation).

               Finally, the SDR argues on appeal that the Surviving Holdco Entities have

sufficient minimum contacts with Texas to be subject to the jurisdiction of its courts because

each had managing general agency contracts with Access. The Surviving Holdco Entities were

two subsidiaries of Access Holdco Management that performed general services for Access and

other insurers in Arizona and in Pennsylvania. In its petition the SDR does not allege any

jurisdictional facts related to these two entities. Although the Surviving Holdco Entities did

provide certain services to Access, those services were performed in Pennsylvania and Arizona,

not in Texas. Furthermore, the SDR’s allegations do not establish that those services are the

basis for the SDR’s claims in the underlying proceeding. Thus, the SDR has failed to plead facts

that demonstrate that the Surviving Holdco Entities are subject to the district court’s personal

jurisdiction. See id. at *6 (holding that non-resident lobbying group’s services for Texas law

firm that were performed in Washington, D.C. were “insufficiently related to the operative facts

of [the] claim” to confer personal jurisdiction in Texas).

               We conclude that the SDR has failed to allege sufficient jurisdictional facts to

demonstrate that the appellants had contacts with Texas sufficient to support the exercise of

personal jurisdiction over them. Our review of the record also fails to reveal contacts between

the appellants and Texas sufficient to support personal jurisdiction. Having determined that the

                                                 15
appellants did not have sufficient minimum contacts with Texas to support personal jurisdiction,

we need not address whether the exercise of that jurisdiction would comport with notions of

fair play and substantial justice. See Brady v. Kane, No. 05-18-01105-CV, 2020 WL 2029245,

at *14 (Tex. App.—Dallas Apr. 28, 2020, no pet.) (mem. op.).

                                        CONCLUSION

               Because the SDR’s allegations in its petition are not sufficient to confer

jurisdiction and because, based on the record before us, the ACP Respondents’, the Embark

Respondents’, the ABC Respondents’, and the Surviving Holdco Entities’ contacts with Texas

are insufficient to establish specific jurisdiction, the trial court erred in denying their special

appearances. Consequently, we reverse the trial court’s order denying the ACP Respondents’,

the Embark Respondents’, the ABC Respondents’, and the Surviving Holdco Entities’ special

appearances and render judgment dismissing all claims against them for want of jurisdiction.

                                             __________________________________________
                                             Chari L. Kelly, Justice

Before Justices Goodwin, Kelly, and Smith

Reversed and Rendered

Filed: June 4, 2021

                                                16