Jayco Hawaii, Inc. v. Viva Railings, LLC ( 2021 )

REVERSE and REMAND and Opinion Filed August 25, 2021
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-20-00528-CV
JAYCO HAWAII, INC., Appellant
V.
VIVA RAILINGS, LLC, Appellee
On Appeal from the 101st Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-19-17238
MEMORANDUM OPINION
Before Chief Justice Burns, Justice Molberg, and Justice Goldstein
Opinion by Justice Goldstein
Appellant Jayco Hawaii, Inc. (Jayco) appeals from the trial court’s order
confirming an arbitration award in favor of appellee Viva Railings, LLC (Viva).
Jayco contends that the trial court abused its discretion in failing to hold a hearing
on Jayco’s special appearance before hearing and granting Viva’s motion to confirm
the arbitration award. We agree. We reverse the trial court’s order and remand for
consideration of Jayco’s special appearance. Because all issues in this appeal are
settled in law, we issue this memorandum opinion. TEX. R. APP. P. 47.4.
BACKGROUND
In April 2017, Jayco, a Hawaii corporation, and Viva, a Texas limited liability
company, entered into a contract for the sale of materials related to a construction
project in Hawaii. The contract has a mandatory-arbitration provision, which states:
Any and all disputes concerning the Materials or this transaction shall
be decided by binding ARBITRATION under the then current
Construction Industry rules of the American Arbitration Association,
with no joinder of or consolidation with claims concerning any other
parties. Such arbitration shall be governed by Texas law, with venue in
Dallas County, Texas.
After a dispute arose, Jayco initiated arbitration in Dallas County, and Viva
counterclaimed. On final hearing, the arbitrator ruled in favor of Viva and awarded
damages, costs, attorneys’ fees, and interest.
On October 25, 2019, Viva initiated a lawsuit to confirm the arbitration award.
Jayco filed a special appearance, arguing that it is not amenable to personal
jurisdiction in Texas. On December 2, 2019, Jayco filed a notice of hearing on its
special appearance, setting the hearing for February 24, 2020.
On December 4, 2019, Viva filed a motion to confirm the arbitration award.
The following day, Viva filed a notice of hearing on the motion, which scheduled
the hearing to take place on February 10, 2020—two weeks before Jayco’s special
appearance hearing. Jayco received notice of the hearing on the motion to confirm
but did not respond to the motion or appear at the hearing. At the hearing on February
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10, 2020, the trial court granted Viva’s motion to confirm by written order.1 The
order adopted the arbitration award, awarded Viva attorneys’ fees, and stated it was
a final judgment disposing of all parties and claims. On March 10, 2020, Jayco filed
its “Motion for New Trial Subject to Special Appearance.”2 On May 8, 2020, Jayco
filed its notice of appeal.
DISCUSSION
I. Applicable Law
“To render a binding judgment, a court must have both subject matter
jurisdiction over the controversy and personal jurisdiction over the parties.” Spir Star
AG v. Kimich, 310 S.W.3d 868, 871 (Tex. 2010). A party may challenge a trial
court’s jurisdiction over it by filing a special appearance—a sworn motion asserting
that the court lacks personal jurisdiction—which may be filed without the movant
submitting to the court’s jurisdiction. See TEX. R. CIV. P. 120a(1). Rule 120a states
that “[e]very appearance, prior to judgment, not in compliance with this rule is a
general appearance.” Id.; see also Kawasaki Steel Corp. v. Middleton, 699 S.W.2d
199, 201 (Tex. 1985). Rule 120a requires strict compliance, and a non-resident
defendant will be subject to personal jurisdiction in Texas courts if the defendant
1
The order was signed by the Hon. Senior Judge Charles Stokes, sitting by assignment. See TEX. GOV’T
CODE ANN. § 74.052.
2
It appears from the record that the trial court did not rule on the motion for new trial, and the motion
was therefore denied by operation of law. See TEX. R. CIV. P. 329b. Jayco does not appeal the denial of its
motion for new trial. We therefore do not reach Viva’s argument that the trial court did not err in denying
Jayco’s motion for new trial by operation of law.
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enters a general appearance. Klingenschmitt v. Weinstein, 342 S.W.3d 131, 133 (Tex.
App.—Dallas 2011, no pet.); see also Burger King Corp. v. Rudzewicz, 471 U.S.
462, 472 n.14 (1985) (“[T]he personal jurisdiction requirement is a waivable right.”).
A party enters a general appearance and waives a special appearance “when it
(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).
A special appearance must be filed “prior to a motion to transfer venue or any
other plea, pleading or motion.” TEX. R. CIV. P. 120a(1); See also Trejo, 142 S.W.3d
at 305. (“[T]he plain language of Rule 120a requires only that a special appearance
be filed before any other ‘plea, pleading or motion.’”) “This is sometimes referred
to as the ‘due-order-of-pleading’ requirement.” Trejo, 142 S.W.3d at 305. Coupled
with the due-order-of-pleading requirement is a concomitant due-order-of-hearing
requirement that a special appearance motion “shall be heard and determined before
a motion to transfer venue or any other plea or pleading may be heard.” TEX. R. CIV.
P. 120a(2); Klingenschmitt, 342 S.W.3d at 133–34.
We review a trial court’s failure to hold a hearing pursuant to rule 120a for
abuse of discretion. See IRN Realty Corp. v. Hernandez, 300 S.W.3d 900, 903 (Tex.
App.—Eastland 2009, no pet.) (concluding that the trial court abused its discretion
in abating a special appearance hearing in favor of merits-based discovery). A trial
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court abuses its discretion when it clearly fails to analyze or apply the law correctly.
Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992).
II. Application of Law to Facts
Jayco contends that the trial court abused its discretion in ruling on Viva’s
motion to confirm the arbitrator’s award before the scheduled hearing on Jayco’s
special appearance. We agree.
Jayco was entitled to have its special appearance adjudicated prior to any
decision on the merits. See TEX. R. CIV. P. 120a(1); see also In re Perl, No. 05-20-
00170-CV, 2020 WL 2847533, at *3 (Tex. App.—Dallas June 2, 2020, no pet.)
(mem. op.) (“The party bringing the special appearance is entitled to have it heard
and decided before any other pleading.”). The rules of civil procedure give a trial
court no discretion to hear a plea or pleading, including a motion to confirm an
arbitration award, before hearing and determining a special appearance. See TEX. R.
CIV. P. 120a; see also TEX. R. CIV. P. 84 (“[M]atters shall be heard in such order as
may be directed by the court, special appearance and motion to transfer venue, and
the practice thereunder being excepted herefrom.”) (emphasis added); see also In re
H & R Block, 159 S.W.3d 127, 131–32 (Tex. App.—Corpus Christi 2004, no pet.).
Viva argues that Jayco waived its special appearance by contractual consent,
relying on RSR Corp. v. Siegmund, 309 S.W.3d 686, 704 (Tex. App.—Dallas 2010,
no pet.), and Vak v. Net Matrix Sols., Inc., 442 S.W.3d 553, 561 (Tex. App.—
Houston [1st Dist.] 2014, no pet.). In RSR Corp., we held that the trial court erred in
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sustaining a Chilean company’s special appearance because the company had
consented to jurisdiction by entering into an agreement with a forum-selection clause
specifying Dallas, Texas as the forum for any litigation arising from the agreement.
RSR Corp., 309 S.W.3d at 704.3 In Vak, the First Court of Appeals affirmed the trial
court’s denial of a California resident’s special appearance because his agreement
with the plaintiff, a Houston software company, contained a venue provision
selecting the courts of Harris County, Texas, as the exclusive venue for any disputes
arising thereunder. Vak, 442 S.W.3d at 561.
Both RSR Corp. and Vak are inapposite because the trial courts heard and
ruled on the respective foreign defendants’ special appearances. See RSR Corp., 309
S.W.3d at 697; Vak, 442 S.W.3d at 557. Neither involved the due-order-of-hearing
rule, the sole issue here.
This case is more akin to In re Stanton, in which we held that the trial court
abused its discretion in ordering “merits discovery during the pendency of the
[defendant’s] special appearance.” In re Stanton, No. 05-17-00834-CV, 2017 WL
3634298, at *1 (Tex. App.—Dallas Aug. 24, 2017, no pet.) (mem. op.) (“The party
bringing the special appearance is entitled to have it heard and decided before any
other pleading.”). Here, the trial court went beyond ordering discovery out of due
3
See also In re Fisher, 433 S.W.3d 523, 532 (Tex. 2014) (“Objections to personal jurisdiction may be
waived, so a litigant may consent to the personal jurisdiction of a court through a variety of legal
arrangements.”).
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order: it granted a dispositive motion against Jayco during the pendency of Jayco’s
special appearance. See also, e.g., In re GM Oil Properties, Inc., No. 10-00001-CV,
2010 WL 2653279, at *3 (Tex. App.—Houston [1st Dist.] July 1, 2010, no pet.)
(mem. op.) (“We conclude that the trial court abused its discretion when it
determined that Wade’s claims against GM Oil Properties and Moores are not
subject to a valid arbitration agreement before determining the defendants’ special
appearances.”).
Viva next contends that Jayco waived its special appearance by “previously
avail[ing] itself of the jurisdiction of Texas Courts” pursuant to the Texas General
Arbitration Act (TGAA).4 See TEX. CIV. PRAC. & REM. CODE ANN. § 171.001 et seq.
Section 171.081 of the TGAA provides:
The making of an agreement described by Section 171.001 that
provides for or authorizes an arbitration in this state and to which that
section applies confers jurisdiction on the court to enforce the
agreement and to render judgment on an award under this chapter.
Id. § 171.081; see also id. § 171.001 (providing that written arbitration agreements
are valid and enforceable in Texas). We interpret this provision to relate to the trial
court’s subject-matter jurisdiction. See Thomas v. Cook, 350 S.W.3d 382, 389 (Tex.
4
Viva also argues that the trial court had jurisdiction to confirm the arbitration award under the Federal
Arbitration Act (FAA). See 9 U.S.C. § 1 et seq. However, “[p]rocedural matters relating to the confirmation
of arbitration awards in Texas courts are governed by Texas law even if the FAA supplies the substantive
rules of decision.” Roehrs v. FSI Holdings, Inc., 246 S.W.3d 796, 804 (Tex. App.—Dallas 2008, pet.
denied). The sole issue before us involves the due-order-of-hearing rule, which is a procedural matter. See
Brady v. Kane, No. 05-18-01105-CV, 2020 WL 2029245, at *5 (Tex. App.—Dallas Apr. 28, 2020, no pet.)
(mem. op.) (discussing the “procedural requirements” of Rule 120a, “including the due-order-of-pleading
and due-order-of-hearing” provisions). Accordingly, the FAA does not apply. See Roehrs, 246 S.W.3d at
804.
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App.—Houston [14th Dist.] 2011, pet. denied) (holding that the trial court lacked
subject-matter jurisdiction under section 171.081 of the TGAA). Whether section
171.081 also confers personal jurisdiction on the trial court is an issue we need not
decide today, because nothing in the TGAA authorizes a deviation from the due-
order-of-hearing rule. On the contrary, the TGAA requires compliance with the
Texas Rules of Civil Procedure. See TEX. CIV. PRAC. & REM. CODE ANN. § 171.093
(“The court shall hear each initial and subsequent application under this subchapter
in the manner and with the notice required by law or court rule for making and
hearing a motion filed in a pending civil action in a district court.”).
Whether a party has waived its challenge to personal jurisdiction is an issue
to be decided by the trial court in connection with that party’s special appearance.
See TEX. R. CIV. P. 120a(1), (2). Absent a ruling by the trial court, we have no
authority to determine the merits of Viva’s waiver arguments. See TEX. R. APP. P.
33.1(a); see also Wilson v. Chemco Chem. Co., 711 S.W.2d 265, 266 (Tex. App.—
Dallas 1986, no writ) (“A special appearance not ruled upon by the trial court
presents nothing for review.”). The trial court’s failure to consider the special
appearance before ruling on Viva’s motion to confirm was an abuse of discretion
and reversible error. See id.; see also Finlay v. Jones, 435 S.W.2d 136, 139 (Tex.
1968) (“The two basic judicial decisions a trial judge must make before rendering
and entering a default judgment are (1) that the court has jurisdiction of the subject
matter and the parties to the suit, and (2) that, on the record, the case is ripe for the
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judgment.”); K & S Interests, Inc. v. Tex. Am. Bank/Dallas, 749 S.W.2d 887, 890
(Tex. App.—Dallas 1988, writ denied) (“A court must notice, even sua sponte, the
matter of its own jurisdiction, for jurisdiction is fundamental in nature and may not
be ignored.”).
Finally, Viva argues that Jayco’s failure to secure the reporter’s record
prevents us from reviewing the proceedings on Viva’s motion to confirm, and we
must therefore presume the evidence submitted therein supports the judgment.
Ordinarily, when a party fails to provide a reporter’s record from the hearing, we
presume the evidence presented supports the trial court’s ruling. Spin Doctor Golf,
Inc. v. Paymentech, L.P., 296 S.W.3d 354, 359 n.1 (Tex. App.—Dallas 2009, pet.
denied). That rule, however, is predicated on the reporter’s record being “necessary
to the appeal.” See id.; TEX. R. APP. P. 34.1 (“The appellate record consists of the
clerk’s record and, if necessary to the appeal, the reporter’s record.”). The record of
the hearing on Viva’s motion to confirm is not necessary for this appeal. The issue
is not whether the trial court correctly decided Viva’s motion to confirm, but rather
whether the trial court was authorized to make that determination out of due order.
Accordingly, we decline to affirm the trial court’s judgment on the grounds that
Jayco failed to present a reporter’s record for appeal.5
5
To the extent Viva argues that the trial court properly denied Jayco’s special appearance at the hearing
on Viva’s motion to confirm, we hold that doing so was an abuse of discretion. See Bruneio v. Bruneio, 890
S.W.2d 150, 154 (Tex. App.—Corpus Christi 1994, no writ) (“It is especially inappropriate to litigate the
special appearance in connection with the trial of the matter, since there is a definite need for separation of
the two procedures and determination of the question of personal jurisdiction first.”). Additionally, the
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CONCLUSION
The trial court abused its discretion in holding a hearing and ruling on Viva’s
motion to confirm before affording Jayco an opportunity to be heard on its special
appearance in due order. We sustain Jayco’s sole issue, reverse the judgment of the
trial court, and remand for proceedings consistent with this opinion.
/Bonnie Lee Goldstein/
BONNIE LEE GOLDSTEIN
JUSTICE
200528F.P05
record contains no notice to Jayco that its special appearance would be heard two weeks ahead of its
scheduled hearing time, thus depriving Jayco the opportunity to put forth evidence in support of its special
appearance. See TEX. R. CIV. P. 21(b) (requiring hearing notices); TEX. R. CIV. P. 120a(3) (parties’ evidence
related to special appearance must be served at least seven days before the hearing).
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
JAYCO HAWAII, INC., Appellant On Appeal from the 101st Judicial
District Court, Dallas County, Texas
No. 05-20-00528-CV V. Trial Court Cause No. DC-19-17238.
Opinion delivered by Justice
VIVA RAILINGS, LLC, Appellee Goldstein. Chief Justice Burns and
Justice Molberg participating.
In accordance with this Court’s opinion of this date, the judgment of the trial
court is REVERSED and this cause is REMANDED to the trial court for further
proceedings consistent with this opinion.
It is ORDERED that appellant JAYCO HAWAII, INC. recover its costs of
this appeal from appellee VIVA RAILINGS, LLC.
Judgment entered this 25th day of August 2021.
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