Court Opinion

ID: 9387196
Source: CourtListenerOpinion
Date Created: 2023-04-16 07:10:18.483826+00
Date Added: 2024-06-11T17:18:12.022391
License: Public Domain

Affirmed and Memorandum Opinion filed April 11, 2023.

                                      In The

                     Fourteenth Court of Appeals

                               NO. 14-21-00504-CV

      DANUEL R. STANGER AND STEVEN PETERSON, Appellants

                                         V.
   DEREK LOETZERICH, AS RECEIVER FOR AND ON BEHALF OF
        JUDGMENT CREDITOR RITA MULLINS, Appellee

                    On Appeal from the 157th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2020-47794

                          MEMORANDUM OPINION

      Appellants Steven Peterson and Danuel R. Stanger bring this interlocutory
appeal from the trial court’s denial of their special appearance. See Tex. Civ. Prac.
& Rem. Code § 51.014(a)(7); Tex. R. Civ. P. 120a. Appellee Derek Loetzerich, as
receiver for Rita Mullins, sued Peterson and Stanger for fraudulent conveyance,
fraud, and civil conspiracy. In Peterson and Stanger’s special appearance, they
challenge the exercise of personal jurisdiction over them because they are residents
of Utah. Concluding that the trial court properly denied Peterson and Stanger’s
special appearance, we affirm.

                                          Background

       On October 5, 2017, Rita Mullins obtained a default judgment of $125,000
with interest at the rate of five percent per annum against Waterford Westheimer
Owner, LLC based on personal injuries she suffered because of defects in real
property owned by Waterford Westheimer.1 On July 14, 2020, Mullins filed an
application to appoint a receiver and turnover of Waterford Westheimer’s non-
exempt personal property. On August 6, 2020, the trial court signed an order
appointing Derek Loetzerich as receiver.

       Loetzerich claims that Waterford Westheimer previously owned two multi-
million-dollar apartment complexes located in Harris County, Texas. Unbeknownst
to Mullins (and Loetzerich), Waterford Westheimer conveyed their interest in the
two complexes to Bridge Acquisitions and Dispositions, LLC. Loetzerich also
claims that Waterford Westheimer executed an assumption agreement whereby
MTC Apartments Westheimer, LLC; MTC Apartments Westheimer 2, LLC; MTC
Apartments 3 Westheimer 3, LLC; and ROC III TX Waterford Westheimer, LLC
assumed Waterford Westheimer’s outstanding liabilities.2

       1
          At the time of Mullins’ injury, her apartment complex was owned by Waterford
Westheimer. At some point in 2014, prior to Mullins initiating this suit, Waterford Westheimer
conveyed its interest in two apartment complexes, including Mullins’ apartment complex, to
Bridge Acquisitions and Dispositions, LLC. Thereafter, Bridge assigned its rights in the properties
to four companies: MTC Apartments Westheimer, LLC; MTC Apartments Westheimer 2, LLC;
MTC Apartments 3 Westheimer 3, LLC; and ROC III TX Waterford Westheimer, LLC. On August
1, 2015, Mullins filed her original petition against Bridge Property Management; MCT Apartments
Westheimer, LLC; MTC Apartments Westheimer 2, LLC; MTC Apartments 3, LLC; and
Waterford Westheimer Owner, LLC.
       2
         Loetzerich did not file suit against these business entities, but for reference purposes, we
will collectively refer to them as MTC Apartments when necessary. The named defendants in
Loetzerich’s petition are M. Patrick Carroll, Darren Devore, Nathan W. Ricks, Steven Peterson,
                                                 2
       The assumption agreement provides that Waterford Westheimer was the
“Original Borrower”; MTC Apartments is the “New Borrow”; Capital Markets, Inc.
was the “Original Lender”; U.S. Bank National Association is the “Lender”; M.
Patrick Carroll and Darren Devore were the “Original Guarantor”; and Nathan W.
Ricks, Jonathan P. Slager, Donaldson L. Hartman, Peterson, and Stanger are the
“New Guarantor.”3 Loetzerich asserts that Peterson and Stanger, along with the other
named defendants, sought to conspire and conceal the aforementioned transaction
for the purpose of delaying and hindering the collection efforts of Mullins, and this
transfer constituted a fraudulent conveyance under Texas Business and Commerce
Code sections 24.005(a) and §24.006 (a) and (b).4 Loetzerich seeks to impose
liability against Peterson and Stanger, along with the other named defendants,
because Peterson and Stanger signed the assumption agreement as guarantors in their
individual capacities relating to real property located in Harris County, Texas.

       In Peterson and Stanger’s special appearance and attached affidavits, each
assert that they were residents of Utah, did not regularly conduct business in person
in Texas, did not maintain any offices in Texas, did not pay taxes in Texas, and did
not personally own or lease any property in Texas. They further claim that they do
not have any ownership interest, employment, or management function at Waterford
Westheimer.5 At the hearing on the special appearance, Peterson and Stanger’s
counsel insisted that Peterson and Stanger both had no ties to Texas. At the

Danuel R. Stanger, Jonathan P. Slager, Donaldson L. Hartman, and Josh Champion.
       3
        According to Loetzerich, no deed evidencing this transaction could be located in Harris
County’s real property records.
       4
         There is no evidence provided in the record regarding current ownership of the properties,
but the parties do not dispute that G & I IX Artesian, LP appears to be the current owner of said
properties.
       5
         The Texas Franchise Tax Public Information Report of Waterford Westheimer indicates
that M. Patrick Carroll is the president and Darren Devore and Josh Champion are vice presidents.

                                                3
conclusion of the hearing, the trial judge denied Peterson and Stanger’s special
appearance and did not enter separate findings of fact or conclusions of law.

                                    Discussion

      In a single issue, Peterson and Stanger challenge the trial court’s denial of
their special appearance, arguing that the record showed insufficient contacts with
Texas. In Loetzerich’s special appearance response, he contends that the trial court
has specific jurisdiction over Peterson and Stanger.

      Whether a court has personal jurisdiction over a defendant is a question of law
we review de novo. Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 150
(Tex. 2013). When, as here, the trial court does not issue findings of fact and
conclusions of law with its special appearance ruling, all facts necessary to support
the judgment and supported by the evidence are implied. See Worford v. Stamper,
801 S.W.2d 108, 109 (Tex. 1990); Zac Smith & Co. v. Otis Elevator Co., 734 S.W.2d
662, 666 (Tex. 1987); In re W.E.R., 669 S.W.2d 716, 717 (Tex. 1984). When the
appellate record includes the reporter’s and clerk’s records, these implied findings
are not conclusive and may be challenged for legal and factual sufficiency in the
appropriate appellate court. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.
1989); Zac Smith, 734 S.W.2d at 666. For legal sufficiency points, if there is more
than a scintilla of evidence to support the finding, the no evidence challenge fails.
Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992).

      Personal jurisdiction over nonresident defendants satisfies the constitutional
requirements of due process when the defendant has purposefully established
minimum contacts with the forum state and the exercise of jurisdiction is consistent
with traditional notions of fair play and substantial justice. TV Azteca v. Ruiz, 490
S.W.3d 29, 36 (Tex. 2016); Retamco Operating, Inc. v. Republic Drilling Co., 278
S.W.3d 333, 337 (Tex. 2009). A defendant establishes minimum contacts with a
                                          4
forum if the defendant has purposely availed himself of the privilege of conducting
activities within the forum state, thus invoking the benefits and protections of its
laws. Moncrief, 414 S.W.3d at 150; Retamco, 278 S.W.3d at 338. A defendant’s
minimum contacts may give rise to either specific jurisdiction or general jurisdiction.
Moncrief, 414 S.W.3d at 150; Retamco, 278 S.W.3d at 338.

      The plaintiff bears the initial burden of pleading sufficient allegations to bring
a nonresident defendant within the provisions of the long-arm statute. See McKanna
v. Edgar, 388 S.W.2d 927, 930 (Tex. 1965). Once the plaintiff has pleaded sufficient
jurisdictional allegations, the defendant filing a special appearance bears the burden
to negate all bases of personal jurisdiction alleged by the plaintiff. Kelly v. Gen.
Interior Const., Inc., 301 S.W.3d 653, 658 (Tex. 2010). A defendant challenging a
Texas court’s personal jurisdiction over it must negate all jurisdictional bases.
Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985). A defendant
can negate jurisdiction on either a factual or a legal basis. Kelly, 301 S.W.3d at 659.

      To negate jurisdiction on a factual basis, the defendant must “present evidence
that it has no contacts with Texas, effectively disproving the plaintiff’s allegations.”
Id. To negate jurisdiction on a legal basis, a defendant may show that even if the
plaintiff’s alleged facts are true, (1) the evidence is legally insufficient to establish
jurisdiction; (2) the defendant’s contacts with Texas do not amount to purposeful
availment; (3) for specific jurisdiction, the plaintiff’s claims do not arise from the
defendant’s contacts; or (4) the exercise of jurisdiction would offend traditional
notions of fair play and substantial justice. Id. The plaintiff can then respond with its
own evidence that affirms its allegations, but it risks dismissal of its lawsuit if it
cannot present the trial court with evidence establishing personal jurisdiction. Id.

      I.     Did Peterson and Stanger Waive Their Special Appearance?

      As a preliminary matter, we begin our analysis by considering Loetzerich’s
                                           5
assertion that Peterson and Stanger waived their special appearance by making a
general appearance in the case. See Dawson–Austin v. Austin, 968 S.W.2d 319, 321
(Tex. 1998). Specifically, Loetzerich contends that analyzing the case before us
under Freimer, Peterson and Stanger waived their special appearance by arguing the
merits of two affirmative defenses and seeking relief based on those grounds,
thereby invoking the judgment of the trial court on the merits of an issue unrelated
to the special appearance. See Freimer v. Escamilla, No. 13-04-006-CV, 2006 WL
645340, at *1 (Tex. App.—Corpus Christi Mar. 16, 2006, pet. denied) (mem. op.).
We disagree.6

       To promote judicial economy, rule 120a provides a special appearance
procedure by which a nonresident defendant may “challenge a court’s jurisdiction
without voluntarily subjecting himself to the jurisdiction of the court or waiving any
objections to the court’s actions.” Tex. R. Civ. P. 120a; see Conner v. ContiCarriers
and Terminals, Inc., 944 S.W.2d 405, 409 (Tex. App.—Houston [14th Dist.] 1997,
no writ) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985)).
A party who does not strictly comply with rule 120a waives its special appearance
and consents to personal jurisdiction. Tex. R. Civ. P. 120a (“Every appearance, prior
to judgment, not in compliance with this rule is a general appearance.”). A party is
considered to have entered a general appearance and therefore consented to personal
jurisdiction when the party “(1) invokes the judgment of the court on any question
other than the court’s jurisdiction, (2) recognizes by its acts that an action is properly
pending, or (3) seeks affirmative action from the court.” Exito Elecs. Co. v. Trejo,
142 S.W.3d 302, 304 (Tex. 2004); see also Dawson–Austin, 968 S.W.2d at 322.
Such an appearance waives a defendant’s challenge to personal jurisdiction. See

       6
        We note that while we respect our sister court’s decision as persuasive authority, we are
not bound by their precedent. See City of Houston v. Breckenridge, No. 14-21-00086-CV, 2022
WL 4103202, at *5 (Tex. App.—Houston [14th Dist.] Sept. 8, 2022, no pet.) (mem. op.).

                                               6
Glob. Paragon Dallas, LLC v. SBM Realty, LLC, 448 S.W.3d 607, 612 (Tex. App.—
Houston [14th Dist.] 2014, no pet.).

       In Freimer, appellants and appellee were research scientists in California.
2006 WL 645340 at *1. They entered into an agreement, which provided for
collaboration between the parties on existing and future research. Id. Appellee later
accepted a position in Texas and alleged that appellants failed to send him samples
and data in accordance with the agreement. Id. Appellee filed suit in Texas, and
appellants filed a special appearance. Appellee alleged that appellants waived their
right to challenge the trial court’s jurisdiction by arguing the affirmative defense of
res judicata in appellant’s “Reply to Plaintiff’s Response on Defendants’ Special
Appearance.” Id. at *3. After examining the reply and arguments at both special
appearance hearings, the appellate court found that appellants did not argue the
affirmative defense of res judicata, request dismissal of the suit on that basis, or
request any other affirmative relief from the trial court. Id. at *3–4.

       Here, we reject Loetzerich’s waiver argument for the simple reason that there
is no evidence before us that Peterson and Stanger requested relief inconsistent with
their special appearance. Peterson and Stanger each filed a single instrument
including a special appearance, answer, and affirmative defenses. They complied
with rule 120a’s due order of pleading requirement, and both the answer and
affirmative defenses were expressly made subject to the special appearance.7 The
only hearing requested by Peterson and Stanger was on their special appearance, and
the only pleading considered by the trial court was their special appearance.

       7
         Rule 120a permits other pleas, pleadings, and motions to be “contained in the same
instrument or filed subsequent thereto.” See Tex. R. Civ. P. 120a. “The rule makes matters in the
same instrument and subsequent matters subject to the special appearance without an express
statement to that effect for each matter.” Dawson–Austin v. Austin, 968 S.W.2d 319, 322 (Tex.
1998).

                                               7
Moreover, the record does not show that they plead res judicata, much less have the
trial court rule on any of their affirmative defenses before hearing their special
appearance.8

       At the conclusion of the hearing, the trial court overruled Peterson and
Stanger’s special appearance and made the following recitations in the order:

       The Court FINDS: (1) the Court has specific jurisdiction because
       Peterson and Stanger purposefully availed themselves by conducting a
       real estate transaction in Harris County, Texas under Retamco
       Operating v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009);
       (2) the cause of action in this case is for activities after the previous
       dismissal of Peterson and Stanger, and thus res judicata does not apply;
       and (3) because the Assumption Agreement specifically assumes
       outstanding liabilities and debts of the sale, and because Peterson and
       Stanger each individually signed the Assumption Agreement, the Court
       has jurisdiction over each.

       “The relevant inquiry ‘is not what a court does in response’ to the defendant’s
actions, but ‘whether a defendant truly seeks any affirmative action from the court’
by that action.” Glob. Paragon Dallas, LLC, 448 S.W.3d at 612 (quoting Angelou
v. African Overseas Union, 33 S.W.3d 269, 276 (Tex. App.—Houston [14th Dist.]
2000, no pet.). After examining the record, Peterson and Stanger did not invoke the
judgment of the trial court on the merits of an issue unrelated to their special
appearance or otherwise seek affirmative action from the court. We overrule
Loetzerich’s point and conclude that Peterson and Stanger did not waive their special
appearance.

       II.     Did Loetzerich Plead Sufficient Jurisdictional Facts?

       We next turn to whether and how Loetzerich met his initial burden to plead

       8
        The first mention of the term “res judicata” in the record was the proposed order prepared
by Loetzerich.

                                                8
jurisdictional facts to bring Peterson and Stanger within reach of the Texas long-arm
statute. See Kelly, 301 S.W.3d at 659. Peterson and Stanger posit that the trial court
could not permissibly rely on jurisdictional grounds raised by Loetzerich in his
special appearance response because a special appearance response is not a
“pleading.” We disagree.

       Though Loetzerich identifies Peterson and Stanger as defendants in his
petition, Loetzerich’s petition does not identify any jurisdictional connection with
Texas.9 Contrary to Peterson and Stanger’s assertion, Loetzerich’s petition, as well
as his response to Peterson and Stanger’s special appearance, can be considered in
determining whether Loetzerich has met his burden. Tex. R. Civ. P. 120a(3); Max
Protetch, Inc. v. Herrin, 340 S.W.3d 878, 883 (Tex. App.—Houston [14th Dist.]
2011, no pet.); see also Predator Downhole Inc. v. Flotek Indus., Inc., 504 S.W.3d
394, 402 (Tex. App.—Houston [1st Dist.] 2016, no pet.) (“[P]laintiff may carry that
burden in its petition or in response to the defendant’s special appearance”). We
therefore address Loetzerich’s jurisdictional allegations as raised in his petition and
response to the special appearance. See Kelly, 301 S.W.3d at 658.

       In Loetzerich’s petition, he alleges that Peterson and Stanger sought to
conspire and conceal certain transactions and conveyances of real property located
in Harris County, Texas for the purpose of delaying and hindering Mullins’
collection efforts pursuant to the Texas Uniform Fraudulent Transfer Act. See Tex.
Bus. & Com. Code §§ 24.005(a), 24.006(a)–(b). Loetzerich alleges that “the

       9
          When the pleading is wholly devoid of jurisdictional facts, the plaintiff should amend the
pleadings to include the necessary factual allegations. Kelly, 301 S.W. 3d at 659; see also Tex. R.
Civ. P. 63. While Loetzerich did not amend his petition, he did offer jurisdictional factual
allegations in his response to Peterson and Stanger’s special appearance. See Predator Downhole
Inc. v. Flotek Indus., Inc., 504 S.W.3d 394, 402 (Tex. App.—Houston [1st Dist.] 2016, no pet.);
Max Protetch, Inc. v. Herrin, 340 S.W.3d 878, 883 (Tex. App.—Houston [14th Dist.] 2011, no
pet.).

                                                 9
transfers were made to an insider without receiving a reasonably equivalent value
and some were made to an insider for an antecedent debt.” In his special appearance
response, he avers that Peterson and Stanger are subject to specific jurisdiction
because they signed an assumption agreement to purchase real property located in
Texas. Specifically, Loetzerich alleges that Peterson and Stanger, in their individual
capacities, signed the assumption agreement as guarantors.

       We conclude that although tenuous, Loetzerich has satisfied his burden of
pleading sufficient allegations to bring Peterson and Stanger within the reach of the
Texas long-arm statute. See Tex. Civ. Prac. & Rem. Code § 17.042; see also
Retamco, 278 S.W.3d at 337 (“[B]y taking assignment of Texas real property,
[respondent] reached out and created a continuing relationship with Texas.”).

       III.   Personal Jurisdiction

       We next consider whether and how Peterson and Stanger negated all bases of
personal jurisdiction alleged. See Kawasaki Steel Corp., 699 S.W.2d at 203. Peterson
and Stanger argue that the evidence supporting the trial court’s grounds for
jurisdiction is legally and factually insufficient. Peterson and Stanger offer the
following in support of their position: (1) there is no evidence that they signed any
agreement in Texas; (2) they did not execute, in any capacity, the original purchase
agreement transferring the apartment complexes from Waterford Westheimer to
Bridge; (3) the assumption agreement does not concern a real property transaction;
(4) Loetzerich’s claims only concern the transfer of the apartment complexes; and
(5) the only relevant contacts with Texas were in a representative capacity.10

       When specific jurisdiction is asserted, our analysis focuses on the relationship

        Peterson and Stanger’s second, third, and fourth argument each relate to the assumption
       10

agreement. As such, we will discuss these arguments collectively.

                                              10
between the defendant, Texas, and the litigation to determine whether the plaintiff’s
claim arises from Texas contacts. Moncrief, 414 S.W.3d at 150. We analyze
minimum contacts for specific jurisdiction on a claim-by-claim basis, unless all the
claims arise from the same forum contacts. Id. at 150–51. Specific jurisdiction is
established if the defendant’s alleged liability arises out of, or is related to, an activity
conducted within the forum. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569,
576 (Tex. 2007). For a nonresident defendant’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.

       To assess whether a nonresident defendant has purposely availed itself of the
privilege of conducting activities in Texas, we consider three factors. Moncrief, 414
S.W.3d at 151; Retamco, 278 S.W.3d at 338. First, only the defendant’s own actions
are relevant, not the unilateral activities of another party or a third party. Moncrief,
414 S.W.3d at 151; Retamco, 278 S.W.3d at 339. Second, a showing of random,
isolated, or fortuitous contacts is insufficient. Moncrief, 414 S.W.3d at 151;
Retamco, 278 S.W.3d at 339. Third, a defendant must seek some benefit, advantage,
or profit by availing itself of the jurisdiction. Moncrief, 414 S.W.3d at 151; Retamco,
278 S.W.3d at 339. We assess the quality and nature of the contacts, not the quantity.
Moncrief, 414 S.W.3d at 151; Retamco, 278 S.W.3d at 339. At its core, the
purposeful availment analysis seeks to determine whether a nonresident’s conduct
and connection to a forum are such that it could reasonably anticipate being hauled
into court there. Moncrief, 414 S.W.3d at 152.

              A. Physically Entering Texas

       Peterson and Stanger’s argument that they are not subject to personal
jurisdiction in Texas because they did not physically enter Texas has been expressly
rejected by Burger King. 471 U.S. at 476 (“Jurisdiction . . . may not be avoided

                                             11
merely because the defendant did not physically enter the forum state.”). As
explained in more detail below, Peterson and Stanger’s contacts are sufficient for
personal jurisdiction because they “purposefully availed [themselves] of the
privilege of conducting activities” within Texas when they signed a contract
regarding real property located in Texas that is governed by the laws of Texas. See
Moki Mac, 271 S.W.3d at 575 (citing Hanson v. Denckla, 357 U.S. 235, 253 (1958));
see also Retamco, 278 S.W.3d at 339. To find otherwise simply because Peterson
and Stanger did not physically enter Texas would offend well-established case law.

             B. Assumption Agreement

      Peterson and Stanger assert that they are not subject to personal jurisdiction
because they did not conduct a real property transaction in Texas; they only signed
an assumption agreement. Peterson and Stanger argue that the assumption agreement
is a contract for the transfer of loan payment obligations and not a real estate
transaction. We disagree.

      The primary consideration is not whether the assumption agreement is a real
estate transaction but rather if there is a “substantial connection” between Peterson
and Stanger’s contacts with Texas and the operative facts of this litigation. See Moki
Mac, 221 S.W.3d at 585.

      In this case, Loetzerich’s claims relate to an alleged fraudulent transfer of real
property that precluded Mullins from enforcing her judgment against Waterford
Westheimer. As purported evidence of the tort,11 we have a written assumption
agreement executed by Peterson and Stanger, in their individual capacities. Though
an assumption agreement is not a real estate transaction per se, it is nevertheless a

      11
          See In re Tex. Am. Express, Inc., 190 S.W.3d 720, 725 (Tex. App.—Dallas, no pet.)
(noting that a fraudulent transfer under the Uniform Fraudulent Transfer Act is a tort).

                                            12
contract. See Tex. Civ. Prac. & Rem. Code § 17.042(2) (“[A] nonresident does
business in this state if the nonresident commits a tort in whole or in part in this
state.”). The assumption agreement provides that the mortgaged property is located
in Harris County, Texas, and it “will be construed in accordance with the laws of the
Property Jurisdiction.”

      The real property and the alleged fraudulent transfer therefore are operative
facts of this case, or at the very least, have a substantial connection to the operative
facts of this case. See Retamco, 278 S.W.3d at 341. Without the real property, no
fraudulent transfer could have occurred under the Texas Uniform Fraudulent
Transfer Act. See Tex. Bus. & Com. Code § 24.002(2), (12). Based on the foregoing,
Texas certainly has an interest in adjudicating this dispute.

      Accordingly, Peterson and Stanger’s contacts with Texas were purposeful, not
random, fortuitous, or attenuated. See Retamco, 278 S.W.3d at 339. They were aware
that the assumption agreement was to be construed in accordance with the laws of
Texas, purposefully availed themselves of the privilege of conducting activities in
Texas, and could have reasonably anticipated being called into a Texas court. Id.

             C. Representative Capacity

      Peterson and Stanger’s claim that their only relevant contacts with Texas were
in a representative capacity is wholly inconsistent with the record before us. When
an agent negotiates a contract for its principal in Texas, it is the principal who does
business in this state, not the agent. See Mort Keshin & Co. v. Houston Chron. Pub.
Co., 992 S.W.2d 642, 647 (Tex. App.—Houston [14th Dist.] 1999, no pet.) (citing
Ross F. Meriwether & Assoc., Inc. v. Aulbach, 686 S.W.2d 730, 731 (Tex. App.—
San Antonio 1985, no writ)). “A signature followed by corporate office will result
in personal liability where the individual is clearly designated within the instrument
as personal surety for the principal.” Material P'ships, Inc. v. Ventura, 102 S.W.3d
                                          13
252, 259 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) (quoting Gulf &
Basco Co. v. Buchanan, 707 S.W.2d 655, 657 (Tex. App.—Houston [1st Dist.] 1986,
writ ref’d n.r.e.). “The fact that a person is under an agency relation to another which
is disclosed does not prevent him from becoming personally liable where the terms
of the contract clearly establish the personal obligation.” Am. Petrofina Co. of Tex.
v. Bryan, 519 S.W.2d 484, 487 (Tex. Civ. App.—El Paso 1975, no writ).

      In the case before us, Waterford Westheimer assigned all of its rights, title,
and interest in the mortgaged property to MTC Apartments. Both Peterson and
Stanger signed the assumption agreement as “manager” on behalf of MTC
Apartments. They also signed the assumption agreement as guarantors in their
individual capacities. Though Peterson and Stanger’s agency relation to MTC
Apartments was disclosed, they nevertheless signed the assumption agreement in
their individual capacities and thus became personally liable. See id.

                                     Conclusion

      Focusing on the quality and not the quantity of the alleged Texas contacts, we
conclude the evidence, viewed in the light most favorable to the trial court’s ruling
supports the trial court’s denial of Peterson and Stanger’s special appearance and
does not offend traditional notions of fair play and substantial justice. See Guardian
Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex.
1991). We affirm the trial court’s denial of Peterson and Stanger’s special
appearance.

                                        /s        Frances Bourliot
                                                  Justice

Panel consists of Justices Bourliot, Hassan, and Wilson.

                                             14