Court Opinion

ID: 2887362
Source: CourtListenerOpinion
Date Created: 2015-09-07 19:26:43.138679+00
Date Added: 2024-06-11T12:26:29.335163
License: Public Domain

NO. 07-01-0456-CV

                              IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                      AT AMARILLO

                                         PANEL A

                                       MAY 3, 2002

                          ______________________________

                 VON BRIESEN, PURTELL & ROPER, S.C., APPELLANTS

                                             V.

                            WILLIAM J. FRENCH, APPELLEE

                        _________________________________

             FROM THE 251ST DISTRICT COURT OF RANDALL COUNTY;

                  NO. 45,515-C; HONORABLE JOHN FORBIS, JUDGE

                         _______________________________

Before BOYD, C.J., and REAVIS and JOHNSON, JJ.

       This is an appeal from a denial of a special appearance filed by a Minnesota law

firm in a suit against it filed by a former member of the firm. In the suit, appellee William

J. French (French) asserted that the law firm had tortiuously interfered with a contract and

conspired to further interfere with his contractual rights. Because the appellant law firm

waived any challenge to the trial court’s personal jurisdiction over it, we affirm the trial

court’s order.
       The factual and procedural history of the underlying dispute is complex but helpful

to an understanding of the issue presented. In 1995, French was a partner in the

Milwaukee law firm of Gibbs, Roper, Loots & Williams (the Gibbs firm) and represented

plaintiffs in several class action suits. The Gibbs firm decided that it no longer supported

that litigation. French left the Gibbs firm to join the Whittenburg law firm in Amarillo. Upon

his departure in December 1995, French entered into a detailed separation agreement with

the Gibbs firm that set out the rights of the parties to fees and costs recovered in the class

action suits. When French joined the Amarillo firm, it became Conant, Whittenburg,

French & Schachter (CWFS).          The Gibbs firm subsequently merged with another

Minnesota firm under the firm name von Briesen, Purtell & Roper (VPR). VPR does not

dispute that, by virtue of the merger, it became bound by the separation agreement.

       When settlement of the class action became imminent, a dispute arose about the

interpretation of the 1995 separation agreement. In April 1998, CWFS filed a declaratory

judgment suit in the 251st District Court of Randall County seeking a declaration of the

rights of the parties under the separation agreement. In the suit, VPR, French, and

another attorney named Robert Gegios were also named as parties. 1 The action was

removed to federal court in which VPR filed an answer, cross-claims, and counterclaims

against French and CWFS alleging breach of contract, interference with contract,

conversion, and unjust enrichment. The suit was subsequently remanded back to the

       1
       Because the interests of VPR and Gegios are aligned in the suit, to simplify our
discussion, we will use the name VPR to include Gegios.

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251st District Court in which VPR filed another answer and reasserted the cross-claims

and counterclaims.

       In 1998, two of the class actions were resolved, resulting in the award of attorneys’

fees and costs of over 24 million dollars. The undisputed portions of the attorneys’ fees

were distributed among the parties. CWFS retained the disputed portions, and on

November 25, 1998, CWFS, French and VPR agreed that CWFS would hold $650,000

pending resolution of the dispute concerning the 1995 separation agreement.

       In early 1999, French filed suit in state district court in Dallas alleging the managing

partner of CWFS improperly distributed approximately 2 million dollars in fees. In the early

hours of May 24, 1999, CWFS and VPR entered into a settlement agreement concerning

their claims in the Amarillo suit. The settlement agreement contained a mutual release of

claims between those parties, as well as an assignment of VPR’s contract claims against

French to CWFS in exchange for payments of some $800,000. VPR also released CWFS

from the November 25, 1998 agreement to retain the $650,000 in disputed fees. On the

same day, CWFS amended its pleadings adding the contract claims it obtained from VPR.

       On September 1, 1999, all the parties to the Dallas suit entered into a settlement

that provided for the division of the funds held by CWFS, a mutual release of the claims

asserted in that litigation, and a dismissal of the suit. However, one significant limitation

on the releases was that French’s release only covered his contract claims against VPR.

The following day, French asserted a cross-claim against VPR in the Amarillo suit in which

he alleged VPR “aided, abetted and knowingly participated in the breach of fiduciary

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obligation[s] of CWFS.” In response to this pleading, VPR filed its special appearance

challenging the Amarillo court’s personal jurisdiction over it. On October 13, 2001, the trial

court overruled those special exceptions. After a request by VPR, the trial court entered

findings of fact and conclusions of law. Included are 13 findings of fact in which the trial

court sets out the specific acts it found VPR performed in Texas. It also made six

conclusions of law in which it found that: 1) VPR waived any objection to the court’s

jurisdiction; 2) it invoked the jurisdiction of the court; 3) the court had personal jurisdiction

over VPR based upon its contacts with Texas; 4) the exercise of personal jurisdiction does

not offend traditional notions of fair play and substantial justice; 5) and 6) the claims arose

out of VPR’s acts in Texas. VPR now brings this interlocutory appeal from the trial court’s

ruling denying its special appearance to French’s tort claims.

       In its appeal, VPR presents two issues for our decision. They are 1) whether it had

“minimum contacts” with Texas to support a finding of personal jurisdiction, and 2) whether

its prior admission of “doing business” in Texas is sufficient to establish personal

jurisdiction. French’s brief addresses those issues, but initially focuses on whether VPR

waived any objection to personal jurisdiction by filing an answer not subject to a special

appearance.

       It is fundamental to a court’s jurisdiction to hear a dispute that it have both subject

matter jurisdiction and personal jurisdiction over the parties to the dispute. Federal

Underwriters Exchange v. Pugh, 141 Tex. 539, 174 S.W.2d 598, 600 (1943). The

standards for determining whether a court has personal jurisdiction over a foreign

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defendant are well established. The Texas long-arm statute authorizes the exercise of

jurisdiction over non-residents “doing business” in Texas. Tex. Civ. Prac. & Rem. Code

Ann. § 17.042 (Vernon 1997). Although it lists particular acts that constitute “doing

business,” the statute also provides that the non-resident’s “other acts” may satisfy the

“doing business” requirement. Id. See Schlobohm v. Schopiro, 784 S.W.2d 355, 257 (Tex.

1990). The “doing business” standard of our long-arm statute permits it to reach as far as

the federal constitutional requirements of due process will allow.        Guardian Royal

Exchange Assur. Ltd. v. English China Clays, P.I.C., 815 S.W.2d 223, 226 (Tex. 1981).

As a result, we consider only whether it is consistent with federal constitutional

requirements of due process for Texas courts to assert in personam jurisdiction over a non-

resident defendant. Id.; see also Helicopteros Nacionales de Columbia v. Hall, 466 U.S.
408, 413-14, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1964).

       Federal constitutional requirements of due process limit the power of the state to

assert personal jurisdiction over non-resident defendants. Helicopteros, 466 U.S. at 413-

14. The federal supreme court divides the due process requirements into two parts: 1)

whether the non-resident defendant has purposely established “minimum contacts” with

the forum state and, if so, 2) whether the exercise of jurisdiction comports with “fair play

and substantial justice.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76, 105 S. Ct.
2174, 85 L. Ed. 2d 528 (1985).

       The federal supreme court also recognizes two categories of personal jurisdiction,

namely, specific and general. Guardian Royal, 815 S.W.2d at 228. When specific

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jurisdiction is asserted, the causes of action must arise out of, or relate to, the non-resident

defendant’s contact with the forum state in order to satisfy the minimum contacts

requirements. Helicopteros, 466 U.S. at 414 n.8. General jurisdiction is applicable when

the cause of action does not arise from, or relate to, the non-resident defendant’s contact

with the forum state in order to satisfy the minimum contacts requirement. Helicopteros,
466 U.S. at 414-16.

       In explicating the minimum contacts requirement as it applies to specific jurisdiction,

the supreme court observed that due process requires a defendant have “fair warning” that

their conduct could make them subject to suit in a jurisdiction. Burger King, 105 U.S. at

472. It instructs that the “fair warning” requirement is satisfied if the defendant has

“purposefully directed” his activities at the residents of the forum state.           Id.   The

requirement that a defendant purposefully directed activities at forum residents ensures

that a non–resident defendant will not be haled into a jurisdiction based solely upon

“random,” “fortuitous” or “attenuated” contacts or the “unilateral activity of another party or

a third person.” Id. at 475; World-wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298,

100 S. Ct. 559, 62 L. Ed. 2d 490 (1980).

       After determining that the non-resident defendant purposefully established minimum

contacts with the forum state, we must then evaluate the contacts in light of other factors

in order to determine whether the assertion of personal jurisdiction comports with fair play

and substantial justice. A`sahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113-115,

107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987); Burger King, 471 U.S. at 476. These factors

                                               6
include 1) the burden on the defendant, 2) the interest 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. Burger King, 471 U.S. at 477. The federal supreme court has

even commented that “[t]hese considerations sometimes serve to establish the

reasonableness of jurisdiction upon a lesser showing of minimum contacts than would

otherwise be required.” Id.

       A defendant challenging a court’s exercise of personal jurisdiction through a special

appearance carries the burden of negating all bases of personal jurisdiction. Kawasaki

Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1986). This court has held that

review of a trial court’s resolution of questions of fact in a special appearance is one of

factual sufficiency. Ball v. Bingham, 990 S.W.2d 343, 347 (Tex.App.--Amarillo 1999, no

pet.). See also Shapolsky v. Brewton, 56 S.W.3d 120 (Tex.App.--Houston [14th Dist.]

2001, pet. denied). But see Whalen v. Laredo Nat. Bankshares, Inc., 37 S.W.3d 89, 91

(Tex.App.--San Antonio 2000, pet. denied).

       Under the factual sufficiency standard, we may only reverse the decision of the trial

court if its ruling is so against the great weight and preponderance of the evidence as to

be manifestly erroneous or unjust. See In re King’s Estate, 150 Tex. 662, 664-65, 244
S.W.2d 660, 661 (1951). On VPR’s request, the trial court filed findings of fact and

conclusions of law. We have held that findings of fact are of no effect when the trial court

                                             7
does not hear evidence. Zimmerman v. Robinson, 862 S.W.2d 162 (Tex.App.--Amarillo

1993, no writ) (citing Timmons v. Luce, 840 S.W.2d 582, 586 (Tex.App.--Tyler 1992, no

writ)).

          A party may waive any objection it might otherwise have to a court’s exercise of

personal jurisdiction over it. Burger King, 105 U.S. at 472, n.14; Shapolsky, 56 S.W.3d at

140. A party waives the right to contest personal jurisdiction over it when it makes a

general appearance before the court. Any answer or other appearance before judgment

is a general appearance unless it is made a “special appearance” for the purpose of

challenging the trial court’s jurisdiction over the party. Tex. R. Civ. P. 120a., Shapolsky,
56 S.W.3d at 140. A special appearance may be made as to a severable claim in the

plaintiff’s suit. Tex. R. Civ. P. 120a.

          Here, VPR filed an answer, initially in federal district court, and another answer in

state district court, neither of which were subject to a special appearance. In its appellate

brief, VPR does not explain why these answers did not constitute general appearances so

as to waive any challenge to the trial court’s personal jurisdiction over it. The only

discussion touching on this question is VPR’s procedural recitation that French’s

counterclaims “were not properly served [on VPR] originally. But, after formal service, VPR

filed its special appearance and motion to dismiss French’s claims.” This presumes that

a special appearance was only required before it answered French’s cross-claims.

                                                8
       However, the rule in Texas is that once a party has filed an answer or otherwise

appeared, he is before the court for all purposes and formal service of cross-actions is not

required. See Carter v. G. & L. Tool Co. of Utah, Inc., 428 S.W.2d 677, 681 (Tex.Civ.

App.--San Antonio 1968, no writ) (citing Sullivan v. Doyle, 108 Tex. 366, 194 S.W. 136

(1917)). Because VPR was already before the court by virtue of its answer to CWFS’s

petition, it waived any objection to personal jurisdiction with regard to French’s cross-

claims. Carter, supra.

       Our holding that VPR waived its objection to the trial court’s personal jurisdiction

obviates the need to address its issues discussing minimum contacts and whether the

exercise of jurisdiction over it comports with traditional notions of fair play and substantial

justice.

       Finding no reversible error, the judgment of the trial court is affirmed.

                                                   John T. Boyd
                                                    Chief Justice

Publish.

Johnson, J., concurs in the result.

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