Steven Wormald and Elizabeth Anne Wormald v. Norman Villarina, Doug Wertheimer, Aaron Snegg and McGuffy Credit Facility 1, LLC , 543 S.W.3d 315 ( 2017 )

Affirmed and Opinion filed October 26, 2017.
In The
Fourteenth Court of Appeals
NO. 14-16-00553-CV
STEVEN WORMALD AND ELIZABETH ANNE WORMALD, Appellants
V.
NORMAN VILLARINA, DOUG WERTHEIMER, AARON SNEGG,
MCGUFFY CREDIT FACILITY 1, LLC, MCGUFFY INTERNATIONAL
COMPANY, MCGUFFY GROUP, INC., MCGUFFY DISTRIBUTION, LLC,
MCGUFFY POWER SYSTEMS, INC., NV FIELD SERVICES, LLC,
MCGUFFY ENERGY SERVICES, LLC, MCGUFFY LIMITED, PENRITH,
INC., Appellees
On Appeal from the 234th District Court
Harris County, Texas
Trial Court Cause No. 2014-56677
OPINION
This accelerated appeal of the granting of three special appearances arises
out of a borrower-lender dispute. After the lender, a limited liability company,
brought a collection suit against the borrowers and guarantors, the guarantors filed
a counterclaim against the lender and filed various claims against others. The
guarantors now challenge the trial court’s granting of the special appearances of
three California residents whom the guarantors allege are partners involved in the
lender’s management. The guarantors assert that the trial court erred in concluding
it lacked personal jurisdiction over the California partners because (1) the partners
are alter egos of the Texas limited-liability company that holds the note, (2) the
partners committed torts and fraud in Texas, and (3) one of the partners listed
himself as the registered agent for Texas limited-liability companies. We conclude
that the trial court did not err in granting the special appearances because the
partners did not have sufficient contacts with Texas to confer personal jurisdiction.
We affirm the trial court’s order.
FACTUAL AND PROCEDURAL BACKGROUND
McGuffy Credit Facility 1, LLC made two loans — one for more than $4.3
million and a second for more than $1 million — to McGuffy International
Company, McGuffy Group, Inc., McGuffy Distribution, LLC, McGuffy Energy
Services, LLC, McGuffy Power Systems, Inc., and NV Field Services, LLC
(collectively, the “McGuffy Borrowers”). The McGuffy Borrowers executed
promissory notes for each loan to McGuffy Credit Facility. The promissory notes
were secured by assets of the McGuffy Borrowers. Steven Wormald and Elizabeth
Anne Wormald guaranteed the notes.
The Lender’s Suit Against the McGuffy Borrowers and the Guarantors
McGuffy Credit Facility brought suit against the McGuffy Borrowers and
the Wormalds, alleging that the McGuffy Borrowers and the Wormalds were
indebted to McGuffy Credit Facility. McGuffy Credit Facility asserted a breach-
of-contract claim against the McGuffy Borrowers and the Wormalds, a breach-of-
guaranty claim against the Wormalds, and a fraud claim against the McGuffy
Borrowers. McGuffy Credit Facility requested a temporary restraining order and
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the appointment of a receiver.
The McGuffy Borrowers’ and the Guarantors’ Counterclaims
The McGuffy Borrowers and the Wormalds asserted counterclaims against
McGuffy Credit Facility and other associated entities and individuals who manage
those entities based on the seizure of assets and related actions. In particular, the
Wormalds asserted that McGuffy Credit Facility misrepresented the nature of the
notes by suggesting that the Wormalds would be entitled to remedies the notes did
not include. The Wormalds contend that McGuffy Credit Facility breached a
fiduciary duty and committed other torts when it seized the McGuffy Borrowers’
assets and transferred them to V-Gas, LLC. Additionally, the Wormalds contend
that McGuffy Credit Facility disparaged their business and defamed the Wormalds
based on communications McGuffy Credit Facility sent to employees and clients
after the seizure.
Aaron Snegg, Norman Villarina, and Doug Wertheimer manage a limited-
liability company, ICECM, LLC, which is the sole manager of McGuffy Credit
Facility and V-Gas, LLC. In their live pleading, the Wormalds incorporated their
counterclaims against McGuffy Credit Facility and asserted them against Snegg,
Villarina, and Wertheimer. The Wormalds also alleged that McGuffy Credit
Facility is an alter ego of Snegg, Villarina, and Wertheimer.
Special Appearances
Snegg, Villarina, and Wertheimer filed special appearances that contained
no verifications. The trial court held a hearing on pending motions later that day.
Trial counsel for Villarina, Snegg, and Wertheimer, who also represented McGuffy
Credit Facility, appeared at the hearing. At the beginning of the hearing, trial
counsel mentioned the due-order-of-pleadings rule and requested that the trial
3
court grant a continuance because the pending motions affected the interests of
Snegg, Villarina, and Wertheimer and they could not participate in the hearing due
to their special appearances. The trial court granted a continuance on all motions
that affected Snegg, Villarina, and Wertheimer, but ruled on one motion, subject to
the special appearance, that the trial court concluded did not affect Snegg,
Villarina, and Wertheimer. The next day, Snegg, Villarina, and Wertheimer filed
amended special appearances.
Snegg, Villarina, and Wertheimer contended that the trial court lacked
personal jurisdiction over them because they are California residents who had not
traveled to Texas except to conduct business that was unrelated to the lawsuit.
Snegg, Villarina, and Wertheimer asserted that McGuffy Credit Facility
maintained its corporate separateness.
The Wormalds filed several supplementary responses in which they attached
additional evidence that they argued showed (1) McGuffy Credit Facility is the
alter ego of Snegg, Villarina, and Wertheimer and (2) Snegg, Villarina, and
Wertheimer traveled to Texas to conduct business related to the litigation.
Villarina, Snegg, and Wertheimer filed responses.
Ultimately, the trial court signed an order granting the special appearances
of Snegg, Villarina, and Wertheimer. The Wormalds challenge this order in this
appeal.
ANALYSIS
The Wormalds argue that Snegg, Villarina, and Wertheimer (1) waived their
special appearances and (2) failed to negate all bases of possible jurisdiction.
A. Did Snegg, Villarina, and Wertheimer waive their special appearances?
The Wormalds contend that Snegg, Villarina, and Wertheimer waived their
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special appearances because they appeared generally before filing verified special
appearances. The Wormalds contend that Snegg, Villarina, and Wertheimer
appeared generally on two occasions. According to the Wormalds, first, Snegg,
Villarina, and Wertheimer appeared through counsel and asked for a continuance
before amending their special appearances, which were defective. Second, the
Wormalds assert that Snegg, Villarina, and Wertheimer appeared by filing a
motion on April 4, 2016, seeking dismissal of the Wormalds’ claims against them.
While the dismissal motion states that it was filed on behalf of other entities, the
Wormalds argue that because the entities are alter egos of Snegg, Villarina, and
Wertheimer, the motion was really filed on behalf of Snegg, Villarina, and
Wertheimer. Snegg, Villarina, and Wertheimer take the position that trial counsel
did not appear on their behalf at the hearing where counsel requested a continuance
and that the April 4, 2016 motion could not have been filed on their behalf because
they had not yet been served in the lawsuit.
Under Texas Rule of Civil Procedure 120a, a defendant may object to the
court’s exercise of personal jurisdiction over the defendant by making a special
appearance. Tex. R. Civ. P. 120a. The defendant may make a special appearance
by sworn motion filed before any motion to transfer venue or any other plea,
pleading, or motion and may amend the special appearance to cure defects. Id. A
special appearance that is unsworn or unverified is defective, but an amendment
that adds a verification cures the defect. Dawson-Austin v. Austin, 968 S.W.2d
319, 321–22 (Tex. 1998). A defendant may file an amended special appearance
any time before making a general appearance. Id. A party enters a general
appearance, and so waives its special appearance, if the party invokes the judgment
of the court on any question other than the court’s jurisdiction or recognizes by the
party’s acts that an action is properly pending against the party. See Exito Elecs.
5
Co. v. Trejo, 142 S.W.3d 302, 304 (Tex. 2004) (per curiam).
We need not address whether trial counsel was representing Snegg,
Villarina, or Wertheimer when trial counsel asked for the continuance because trial
counsel’s motion for a continuance was not a general appearance. Trial counsel’s
motion did not invoke the judgment of the court or recognize that an action in the
court was properly pending against Snegg, Villarina, or Wertheimer. See
Experimental Aircraft Ass’n Inc. v. Doctor, 76 S.W.3d 496, 502 (Tex. App.—
Houston [14th Dist.] 2002, no pet.) (holding that a party did not generally appear
by moving to continue proceedings until trial court could rule on special
appearance). The motion was consistent, not inconsistent, with challenging
jurisdiction. See id.
As we explain below, the Wormalds did not prove that McGuffy Credit
Facility is the alter ego of Snegg, Villarina, or Wertheimer, so any answer by
McGuffy Credit Facility did not waive the special appearances of Snegg, Villarina,
and Wertheimer. Furthermore, if McGuffy Credit Facility were the alter ego of
Snegg, Villarina, or Wertheimer, the trial court would have personal jurisdiction
over them for that reason, and there would be no need to address whether any party
waived the party’s special appearance. Snegg, Villarina, and Wertheimer did not
waive their special appearances. We now consider whether they are subject to
personal jurisdiction in Texas.
B. Did the trial court have personal jurisdiction over Snegg,
Villarina, and Wertheimer?
Principles of Personal Jurisdiction and Standard of Review
Whether Snegg, Villarina, and Wertheimer are subject to personal
jurisdiction in Texas is a question of law, which we review de novo. See BMC
Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). When the
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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 evidence.
M&F Worldwide Corp. v. Pepsi–Cola Metro. Bottling Co., Inc., 512 S.W.3d 878,
884–85 (Tex. 2017).
The exercise of personal jurisdiction in Texas state courts turns on both
federal and state law. Searcy v. Parex Res., Inc., 496 S.W.3d 58, 66 (Tex. 2016).
Courts may exercise personal jurisdiction over a defendant when (1) the Texas
long-arm statute grants jurisdiction, and (2) the exercise of jurisdiction comports
with federal constitutional guarantees of due process. Id. The long-arm statute
allows Texas courts to exercise personal jurisdiction as far as the federal
constitutional requirements of due process will permit, so Texas courts may
exercise personal jurisdiction as long as doing so comports with federal
constitutional guarantees of due process. Id. A trial court’s exercise of personal
jurisdiction comports with due process when (1) the defendant has established
minimum contacts with the forum state and (2) asserting personal jurisdiction over
the defendant does not offend traditional notions of fair play and substantial
justice. Searcy, 496 S.W.3d at 66.
A defendant’s contacts with the forum may give rise to either general or
specific jurisdiction. M&F Worldwide Corp., 512 S.W.3d at 884–85. A court has
general jurisdiction over a defendant if the defendant has made continual and
systematic contacts with the forum. See Moki Mac River Expeditions v. Drugg,
221 S.W.3d 569, 575 (Tex. 2007). The defendant’s contacts with the forum must
“render it essentially at home in the forum.” Searcy, 496 S.W.3d at 72. If the trial
court has personal jurisdiction over a corporation that is the alter ego of an
individual, the trial court may base personal jurisdiction over the individual upon
its jurisdiction over the corporation. See Puri v. Mansukhani, 973 S.W.2d 701, 712
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(Tex. App.—Houston [14th Dist.] 1996, no pet.). If a plaintiff alleges an alter-ego
theory to support a claim of personal jurisdiction, the plaintiff must prove the
allegation because Texas law presumes that the corporation and the defendant are
distinct entities. See BMC Software, 83 S.W.3d at 798.
Specific jurisdiction exists when the claims in question arise from or relate
to the defendant’s purposeful contacts with Texas. See Moki Mac, 221 S.W.3d at
575–76. For Snegg, Villarina, or Wertheimer’s contacts with Texas to support the
exercise of specific jurisdiction, there must be a substantial connection between the
purposeful contacts with Texas and the operative facts of the litigation. See id. at
585. If we determine Snegg, Villarina, or Wertheimer had sufficient minimum
contacts with Texas and the contacts are substantially connected to the operative
facts of the litigation, we must ensure the exercise of personal jurisdiction does not
offend traditional notions of fair play and substantial justice. See Fjell Tech. Grp.
v. Unitech Int'l, Inc., No. 14-14-00255-CV, 2015 WL 457805, at *9 (Tex. App.—
Houston [14th Dist.] 2015, pet. denied) (mem. op.).
Alter-Ego Theory of Personal Jurisdiction
Snegg, Villarina, and Wertheimer each filed affidavits in which they
asserted individually that they are partners, living in California, with fractional
interests in a non-Texas entity that owns a fractional interest in another non-Texas
entity that before the suit owned a fractional interest in the out-of-state entity that
manages McDuffy Credit Facility. Each affiant recites that each entity maintains
corporate separateness and that neither Snegg, Villarina, nor Wertheimer profited
personally from any transactions at issue in the case. The record also contains an
affidavit from Nghiep John Ngheim, a representative of McGuffy Credit Facility.
Ngheim avers that McGuffy Credit Facility, Industry Capital, V-Gas, LLC,
ICECM, LLC, and Industry Capital Management, LLC, maintain separate bank
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accounts, separate books, and separate records. Ngheim states that the entities do
not comingle funds and each entity maintains separate ownership of its assets.
According to Ngheim, none of the entities permits its funds to be used for the
personal benefit of its owners, employees, or managers.
The Wormalds filed several documents in camera in the trial court that they
argue show that McGuffy Credit Facility is an alter ego for Snegg, Villarina, and
Wertheimer. A cash-flow summary shows cash flows to and from McGuffy Credit
Facility. The cash-flow summary shows that partners made capital contributions
totaling over $5.6 million to McGuffy Credit Facility. McGuffy Credit Facility
loaned the McGuffy Borrowers $5.2 million. The additional capital appears to
have been used for business expenses. All interest payments on the loan were
distributed as equity. The cash-flow summary does not provide any details about
who received the equity payments. In one email communication, an individual
asks about shutting down two entities and was advised not to shut down McGuffy
Credit Facility because it is the plaintiff and defendant in the case against the
Wormalds. Another email communication shows that in a few cases one entity
paid legal bills for others. In one email exchange a vendor asked one entity to
serve as a guarantor for another and the entity’s officer expressed skepticism about
serving as a guarantor and said that the group needed to have a board meeting to
discuss the policy.
a. Legal Principles Underlying the Alter-Ego Theory
The Supreme Court of Texas has explained that when a party seeks to prove
one corporation is an alter ego of another, the elements required to pierce the
corporate veil for liability purposes differ from those used for jurisdictional
purposes. PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 174 (Tex.
2007). Courts use different standards because certain elements necessary to pierce
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the corporate veil are irrelevant to assessing jurisdictional contacts. See id. at 175.
“To ‘fuse’ a parent company and its subsidiary for jurisdictional purposes, the
plaintiffs must prove the parent controls the internal business operations and affairs
of the subsidiary.” PHC-Minden, 235 S.W.3d at 175 (quotation omitted). “The
rationale for exercising jurisdiction is that the parent corporation exerts such
domination and control over its subsidiary that they do not in reality constitute
separate and distinct corporate entities but are one and the same corporation for
purposes of jurisdiction.” Id. at 173. This court has used the standard for
jurisdictional veil-piercing of the corporate veil between a parent company and a
subsidiary company to assess jurisdictional veil-piercing as between an individual
and a corporation. See Greenfield Energy, Inc. v. Duprey, 252 S.W.3d 721, 731
(Tex. App.—Houston [14th Dist.] 2008, no pet.).
b. Evidence of Alter-Ego
The in-camera documents do not rise to the level of proof needed to show
that Snegg, Villarina, and Wertheimer (or any of them) are alter egos of McGuffy
Credit Facility. To the contrary, the documents show different individuals acted as
officers of different entities and questioned policies that might negatively affect the
entity the officer represented. And, while various corporate entities closely worked
together, there is no evidence that Snegg, Villarina, or Wertheimer dominated the
will of any of the entities. See Knight Corp. v. Knight, 367 S.W.3d 715, 730 (Tex.
App.—Houston [14th Dist.] 2012, no pet.). One vague document shows that
McGuffy Credit Facility made equity distributions, but the document does not give
specifics about the distributions. The same document shows McGuffy Credit
Facility made significant business expenditures and also shows that the McGuffy
Credit Facility kept its finances separate from the finances of Snegg, Villarina, and
Wertheimer. None of these documents suggest that McGuffy Credit Facility was
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not maintained as a distinct entity or that Snegg, Villarina, or Wertheimer directed
the business operations and affairs of McGuffy Credit Facility any more than
normally is associated with ownership and directorship. See S.L.A. Studio Land,
Inc. v. SRC Const., Inc., No. 14-10-01129-CV, 2011 WL 5118902, at *7 (Tex.
App.—Houston [14th Dist.] Oct. 27, 2011, pet. denied) (mem. op.).
The Wormalds argue that the evidence Snegg, Villarina, and Wertheimer
tendered is conclusory. Even if the evidence is conclusory, the Wormalds had the
burden to prove that each of these individuals is an alter ego of McGuffy Credit
Facility. See BMC Software, 83 S.W.3d at 798.
Based on the record evidence, the trial court was entitled to find that the
Wormalds did not put on sufficient proof to impute McGuffy Credit Facility’s
contacts to Snegg, Villarina, or Wertheimer. See Greenfield Energy, Inc., 252
S.W.3d at 731. Having concluded that McGuffy Credit Facility’s contacts cannot
be imputed to Snegg, Villarina, or Wertheimer, we turn now to the allegations that
the trial court had personal jurisdiction over Snegg, Villarina, and Wertheimer
based on their own contacts.
Direct Theory of Personal Jurisdiction
In their appellate brief, the Wormalds allege that Snegg, Villarina, and
Wertheimer “have purposefully availed themselves of the privileges of conducting
activities within Texas,” and “this lawsuit arose from and is related to their
contacts with Texas.” 1 The Wormalds argue that Snegg, Villarina, and Werthimer
had the burden to negate jurisdiction and that they failed to do so because they did
not provide any documentary evidence and the evidence they provided came from
interested parties. Arguing that interested witnesses can establish facts as a matter
1
The Wormalds do not assert that the trial court may exercise jurisdiction based on
general jurisdiction, and any such argument would lack merit.
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of law only when the evidence is not controverted, the Wormalds argue that Snegg,
Villarina, and Wertheimer did not negate jurisdiction as a matter of law because
their evidence raised fact issues about these individuals’ contacts with Texas and
because these individuals’ assertions rested on the fiduciary-shield doctrine, which
does not apply to this case. In particular, the Wormalds argue that Villarina’s
evidence did not negate jurisdiction because Villarina held himself out to be a
Texas resident. The Wormalds assert that he did not deny doing business in Texas
and did not deny that the Wormalds’ suit is related to his contacts with Texas. The
Wormalds argue that Snegg’s and Wertheimer’s evidence is insufficient because
neither denies doing business in Texas or that their contacts relate to the
Wormalds’ suit.
a. Minimum-Contacts Standards
In some situations the fiduciary-shield doctrine protects employees from
personal jurisdiction when the employee acted on behalf of his employer. Urban v.
Barker, No. 14-06-00387-CV, 2007 WL 665118, at *6 (Tex. App.—Houston [14th
Dist.] Mar. 6, 2007, no pet.) (mem. op.). But, even if an employee’s actions are
performed on behalf of an entity, the employee may be subject to personal
jurisdiction and held liable in his individual capacity for certain claims, such as
claims based on tortious acts or fraud. See id. The Wormalds’ live pleadings
include allegations of tortious acts and fraud. In their special appearances, though,
Snegg, Villarina, and Wertheimer asserted that they did not have sufficient
minimum contacts with Texas to give rise to jurisdiction.
We analyze minimum contacts for specific jurisdiction on a claim-by-claim
basis unless all claims are based on the same alleged forum contacts. Moncrief Oil
Int’l, Inc., 414 S.W.3d at 151. For a Texas court to exercise personal jurisdiction
based on specific jurisdiction, the court must find a substantial connection between
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the nonresident’s purposeful contacts with Texas and the operative facts of the
litigation. See Moki Mac, 221 S.W.3d at 585. Whether a court has personal
jurisdiction is a question of law. Am. Type Culture Collection, Inc. v. Coleman, 83
S.W.3d 801, 805–06 (Tex. 2002). But in resolving this question of law, a trial
court often must resolve questions of fact. Id. at 806. On appeal, we review de
novo the trial court’s determination to grant or deny a special appearance, and we
likewise may be called upon to review the trial court’s resolution of a factual
dispute. Id. When the trial court does not issue findings of fact, we presume that
the trial court resolved all factual disputes in favor of its judgment. Id.
b. Allegations Related to Contacts
In their live pleading, the Wormalds made the following allegations:
 The McGuffy Borrowers executed promissory notes, and the Wormalds
guaranteed the notes.
 McGuffy Credit Facility and all defendants (including Snegg, Villarina, and
Wertheimer) misrepresented the terms of the notes by representing that the
notes conferred rights, remedies, and obligations that were inaccurate.
 When the McGuffy Borrowers were unable to timely remit payment,
McGuffy Credit Facility and all defendants forcibly seized control of the
McGuffy Borrowers’ assets.
 The value of the assets seized exceeded the debt owed.
 The seizure occurred less than two weeks after the McGuffy Borrowers
failed to remit payment even though the terms of the notes gave the
McGuffy Borrowers thirty days to cure any default.
 After the seizure, McGuffy Credit Facility and all defendants transferred
assets from the company to other companies.
 After the seizure, McGuffy Credit Facility and all defendants defamed the
Wormalds by making statements that Steven Wormald retains in various
bank accounts at least $8 million he diverted from McGuffy Energy Services
client payments, and that Steven Wormald owes the Internal Revenue
Services (IRS), school-taxing authorities, various contactors, vendors, and
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other creditors.
 After the seizure, McGuffy Credit Facility and all defendants disparaged the
McGuffy Borrowers by telling former employees that the McGuffy
Borrowers owe $5 million to the IRS, have secreted millions of dollars into
accounts to avoid paying creditors, and that the businesses are no longer in
operation. McGuffy Credit Facility and all defendants disparaged the
business by telling potential clients and business associates that the McGuffy
Borrowers are no longer in business.
The Wormalds allege the above cited acts give rise to claims for slander,
business disparagement, fraud, breach of fiduciary duty, defamation, and claims
under the Texas Deceptive Trade Practices Act (DTPA), fraudulent transfer, and
civil conspiracy.2 Snegg, Villarina, and Wertheimer filed affidavits in which each
averred that he is a California resident, has no personal contacts with Texas, and
traveled to Texas only for business.3 In their response to the special appearances,
the Wormalds filed documents in camera that contain communications in which
Villarina discusses the dispute with the Wormalds and Villarina makes references
to a business trip to Houston, Texas. The communications discuss meetings with
company contacts and contain a meeting agenda. The agenda encompasses some
broad due-diligence questions and financial questions.
c. Evidence Related to Texas Contacts
Contrary to the Wormalds’ assertion on appeal, Snegg, Villarina, and
Wertheimer argued in their special appearances that their contacts with Texas did
2
The Wormalds initially asserted breach-of-contract claims, but they nonsuited these
claims.
3
In Villarina’s affidavit, Villarina stated that the trips were unrelated to the claims at
issue in the lawsuit. The Wormalds responded that the statement that Villarina’s trips were
unrelated to the claims in the lawsuit was untrue because Villarina was at the meeting where the
note was executed. Villarina filed a second affidavit in which he admitted that and explained
that he based the statement on his belief that the Wormalds had nonsuited their breach-of-
contract claims.
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not relate to the Wormalds’ claims. In their affidavits, they detailed their travel to
Texas and swore that the Texas travel did not relate to the subject matter of the
lawsuit. The Wormalds asserted that Snegg, Villarina, and Wertheimer traveled to
Texas and attended meetings that related to McGuffy Credit Facility business, but
the Wormalds did not assert that Snegg, Villarina, or Wertheimer did anything
actionable either in their personal capacity or as a partner, representative, or
employee of McGuffy Credit Facility. The record contains evidence that Snegg,
Villarina, and Wertheimer traveled to Texas to attend meetings, but the record does
not contain any evidence of what took place at those meetings. In their appellate
brief, the Wormalds attack the fiduciary-shield argument and argue that Snegg,
Villarina, and Wertheimer did not present competent evidence, but the Wormalds
do not make any arguments that any acts these defendants took in Texas
substantially relate to the operative facts of the litigation.
The Wormalds make one argument that a specific act by Villarina —
sending a defamatory email to co-defendants who are Texas residents — gives rise
to jurisdiction. In the email, Villarina referred to Steven Wormald as a “crook.”
Even under a liberal construction of the Wormalds’ live pleading, they do not
assert any claim based on this email, and they did not assert in the trial court that
they were basing a claim on this email. This contact does not substantially relate
to the operative facts of any of the Wormalds’ claims, including the defamation
claim and the business-disparagement claim. Other than pointing to Villarina’s
sending the email, the Wormalds have not argued that Snegg, Villarina, or
Wertheimer specifically made any type of misrepresentation, circulated any
disparaging communications, or engaged in any actionable conduct in Texas.
d. Minimum-Contacts Analysis
In the trial court, Snegg, Villarina, and Wertheimer had the burden to negate
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jurisdiction, but this burden did not require that the evidence present no factual
issues for the trial court to resolve. See id. Snegg, Villarina, and Wertheimer
presented competent evidence in the form of their affidavits showing no substantial
connection between their contacts with Texas and the operative facts of the
litigation. See Dresser-Rand Group, Inc. v. Centauro Capital, S.L.U., 448 S.W.3d
577, 587 (Tex. App.—Houston [14th Dist.] 2014, no pet.).
The Wormalds assert that Villarina is subject to personal jurisdiction in
Texas because he “held himself out to be a Texas resident who maintained an
office in Texas.” The record contains evidence that Villarina listed himself as the
registered agent on the certificates of formation for both McGuffy Credit Facility
and ICECM, LLC, which owns an interest in McGuffy Credit Facility. The record
contains an affidavit in which Villarina states that he did not know he was required
to be a Texas resident to serve as the registered agent for Texas corporations and
that listing himself as the registered agent was a mistake because he is not, and was
not, a Texas resident. Villarina averred that once he realized the mistake, he
amended all of the documents filed with the Texas Secretary of State.
Even if Villarina’s act of listing himself as a registered agent of service for
Texas corporations is sufficient to show contact with Texas, there is no substantial
connection between this Texas contact and the operative facts of the litigation, so
this contact does not support specific jurisdiction. To the extent the Wormalds are
arguing that Villarina is subject to the jurisdiction of Texas courts because he is a
resident, based on the evidence that Villarina has lived in California for the past
twelve years, the trial court reasonably could have found that Villarina made a
mistake filling out the form. See Owens Corning v. Carter, 997 S.W.2d 560, 571
(Tex. 1999); Mills v. Bartlett, 377 S.W.2d 636, 637 (Tex. 1964). The trial court
was entitled to credit Villarina’s affidavit and conclude that Villarina made a
16
mistake when he filled out the form. See City of Keller v. Wilson, 168 S.W.3d 802,
827 (Tex. 2005).
The Wormalds assert that even if Villarina is not a Texas resident, he is
estopped from asserting that Texas courts lack personal jurisdiction over him
because that assertion contradicts his act. The Wormalds contend that by
designating himself as a registered agent in Texas, he waived his right to contest
personal jurisdiction. The Wormalds did not make this argument in the trial court
and thus did not preserve error. See Tex. R. App. P. 33.1; CMC Steel Fabricators,
Inc. v. Red Bay Constructors, Inc., No. 14-13-00084-CV, 2014 WL 953351, at *5
(Tex. App.—Houston [14th Dist.] Mar. 11, 2014, no pet.) (mem. op.) (applying
preservation-of-error requirements in special-appearance context). In their
appellate brief, the Wormalds state the facts relating to Villarina listing himself as
a registered agent for service of process and provide the following argument with
respect to estoppel:
Villarina waived his special appearance and is estopped from
asserting that Texas courts lack personal jurisdiction over him. A
person is precluded from making assertions “in plain contradiction of
his former allegations or acts.” CKB & Associates, Inc. v. Moore
McCormack Petroleum, Inc., 734 S.W.2d 653, 656 (Tex. 1987)
(quoting Gulbenkian v. Penn, 252 S.W.2d 929, 932 (Tex. 1952)).
Waiver is “intentional conduct inconsistent with the assertion of a
known right.” Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848, 851
(Tex. 1980).
At the very least, the signing of these documents and his consent to
serve as the registered agent in Texas for a period of over two years
demonstrate that Villarina has purposefully availed himself of the
privileges and benefits of the laws of the State of Texas.
First, the Wormalds have not shown that the contact substantially relates to
the claims against Villarina in this case. Second, by signing the form, Villarina
agreed to serve as the registered agent for service of process for two corporations.
17
The Wormalds do not assert that they served either of those corporations through
Villarina, and neither of those corporations challenged service of process. Third,
even if the Wormalds had argued that Villarina was estopped from challenging
personal jurisdiction, the trial court had discretion to conclude the Wormalds did
not prove estoppel. In CKB & Associates, Inc., the Supreme Court of Texas held
that a party was not estopped from asserting claims because they were not
inconsistent with a previous settlement agreement. See CKB & Associates, Inc.,
734 S.W.2d 653, 656 (Tex. 1987). In CKB & Associates, the court did not state
which type of estoppel it was rejecting. See id. In Gulbenkian, the high court
concluded that a party had not shown the elements of equitable estoppel or
estoppel in pais, both of which include intent and reliance. See Gulbenkian, 252
S.W.2d at 932. Even if the Wormalds had preserved error, it was within the trial
court’s discretion to conclude that Villarina did not intend to make a false
representation or that the Wormalds had not proved reliance. To the extent the
Wormalds rely on any other theory of estoppel, they waived this argument due to
inadequate briefing. See Tex. R. App. P. 38.1(i); San Saba Energy, L.P. v.
Crawford, 171 S.W.3d 323, 338 (Tex. App.—Houston [14th Dist.] 2005, no pet.).
Other than the argument that Villarina held himself out as a Texas resident
and sent emails calling Steven Wormald a crook, the Wormalds have not briefed
any argument that the record evidence shows a substantial connection between
Snegg, Villarina, or Wertheimer’s contacts with Texas and the operative facts of
the litigation, so any such argument is waived due to inadequate briefing. See Tex.
R. App. P. 38.1(i); San Saba Energy, L.P., 171 S.W.3d at 338.
CONCLUSION
Neither Snegg nor Villarina, nor Wertheimer waived his special appearance.
The record does not contain sufficient evidence to prove that Snegg, Villarina, or
18
Wertheimer is the alter ego of McGuffy Credit Facility, or that any of the
Wormalds’ claims substantially relate to forum contacts of Snegg, Villarina, or
Wertheimer. The record contains evidence supporting the trial court’s conclusion
that it lacks personal jurisdiction over these defendants, and the trial court did not
err in granting their special appearances. Accordingly, we affirm the trial court’s
order.
/s/ Kem Thompson Frost
Chief Justice
Panel consists of Chief Justice Frost and Justices Donovan and Wise.
19