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 v. Cantilo & Bennett, LLP, Special Deputy Receiver of Access Insurance Company Inc. ( 2021 )

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