Pakistan Petroleum Limited v. Specialty Process Equipment Corporation ( 2023 )

Opinion issued January 26, 2023
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-21-00341-CV
———————————
PAKISTAN PETROLEUM LIMITED, Appellant
V.
SPECIALTY PROCESS EQUIPMENT CORPORATION, SPEC ENERGY
DMCC, SPEC OIL & GAS FZCO, S7 CONSTRUCTION INC., AND
NEWPORT OIL & GAS (USA), LLC, Appellees
On Appeal from the 11th District Court
Harris County, Texas
Trial Court Case No. 2019-35747
MEMORANDUM OPINION
Background
In this accelerated interlocutory appeal, appellant Pakistan Petroleum Limited
(PPL) appeals the trial court’s order denying its special appearance in the suit
brought against it by appellees Specialty Process Equipment Corporation, SPEC
Energy DMCC, SPEC Oil & Gas FZCO, S7 Construction Inc., and Newpoint Oil &
Gas (USA) LLC, asserting claims for breach of contract, unjust enrichment, and
quantum meruit. In two issues, PPL contends that the trial court erred in denying its
special appearance because there is insufficient evidence to support the exercise of
personal jurisdiction over it. We reverse and render.
Background
A. Factual History
PPL is a gas exploration and production company organized and existing
under the laws of Pakistan and with its principal place of business in Karachi. SPEC
Energy DMCC (DMCC) is a company organized and existing under the laws of the
United Arab Emirates (UAE) with its principal place of business in Dubai.
In 2015, PPL sought bids for a project to build a gas processing facility at
Gambat South Block in Sindh, Pakistan (the Project). It published an invitation to
bid in Dawn, the local newspaper in Pakistan, the Khaleej Times, a UAE newspaper,
and the Houston Chronicle in Texas. Fareed Siddiqui, PPL’s corporate
representative, testified that PPL published the invitation in the Houston Chronicle
because its website is widely read by oil and gas business professionals throughout
the world and PPL wanted to reach an international audience. DMCC did not see
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PPL’s invitation in the Houston Chronicle but instead learned about the invitation to
bid through “word of mouth.” DMCC submitted a bid for the Project.
PPL and DMCC conducted negotiations in Dubai and Pakistan. Following
PPL’s selection of DMCC as the contractor for the Project, PPL and DMCC
executed a Works Contract for Gas Processing Facility (GPF-III) at Gambat South
Block on Engineering, Procurement, Construction and Commissioning (EPCC)
Basis (the Contract) in Pakistan on May 9, 2016.
Under the Contract, DMCC was responsible for the design engineering,
procurement (supply) of materials, construction, installation/erection, pre-
commissioning, commissioning, and startup of the Project, as well as remedying any
defects arising during the defect liability period. Under Section 3.2 of the Contract,
all equipment and materials had to be supplied from vendors on PPL’s approved
vendor list which included vendors from all over the world. DMCC decided which
approved vendors to select from the list. Section 3.7 of the Contract provided that
DMCC was responsible for the cost of all services, including materials and personnel
required for its performance, and the import of equipment and materials. Under
Section 3.10, PPL was responsible for the issuance of documents required for
DMCC’s execution of its work.
Section 3.15 provided that daily progress review meetings would be held at
the plant site and monthly progress review meetings would be held in Karachi,
3
Pakistan. Under Section 3.17, DMCC was required to provide insurance that
complied with the applicable laws in the country of operation. Section 3.19 stated
that the Contract “shall be construed and governed in accordance with the laws in
Pakistan” and contract disputes were to “be referred for resolution by arbitration in
Karachi.” Section 3.34.1 provided:
In case of JV/Consortium, the invoice(s) shall be raised by the lead
consortium partner on behalf of itself and other JV consortium
partner(s) clearly stating the amounts attributable to each consortium
partner. The COMPANY shall make payment to the designated
accounts of each consortium partner respectively as per the amounts
mentioned in the invoices(s) [sic].
The Contract price was US $70,750,644.1 Under the Contract, PPL was
required to pay DMCC various percentages of the Contract price based upon
DMCC’s achievement of certain milestones. Section 3.28.13 of the Contract set forth
the procedure for DMCC to submit an invoice for payment by PPL of a percentage
of the Contract price once particular milestones were met. DMCC also provided
bank guarantees and bonds from financial institutions located in Pakistan and the
UAE.
B. Procedural History
By September 2018, relations between PPL and DMCC had deteriorated.
Citing Section 3.24, DMCC invoked the arbitration clause of the Contract and filed
1
The amount due was (i) US $63,000,764; and (ii) PKR 811,800,027.00 (equivalent
to US $7,749,880 on the date of the Contract) for the work.
4
for arbitration of the dispute in Pakistan. DMCC also filed claims against PPL in a
court in Dubai related to the encashing of performance bonds DMCC had provided
to PPL under the terms of the Contract. Additionally, DMCC and PPL have pending
claims in the High Court of Sindh, Pakistan, related to the contract dispute. In
February 2019, PPL and DMCC met in Islamabad to discuss their dispute and
attempt to reach a resolution, but to no avail. On May 10, 2019, PPL terminated the
Contract.
On May 23, 2019, DMCC and its “sister companies”—Specialty Process
Equipment Corporation (SPEC) (a Texas corporation), SPEC Oil & Gas FZCO
(SPEC Oil & Gas) (a UAE company), and S7 Construction Inc. (S7) (a Texas
corporation)—filed suit against PPL in Harris County, Texas, asserting claims for
breach of contract, unjust enrichment, and attorney’s fees. They alleged that they
entered into the Contract with PPL as a joint venture alliance with DMCC as the lead
partner. They later amended their petition to add Newpoint Oil & Gas (USA) LLC,
formerly known as Newpoint Gas LLC (a Texas limited liability company)
(Newpoint), as a plaintiff as well as a claim for quantum meruit. DMCC and the
other plaintiffs pleaded that the trial court had jurisdiction over PPL “pursuant to §
17.042 of the Texas Civil Practice and Remedies Code because [PPL] contracted
with a Texas resident (namely SPEC, S7[,] and Newpoint), and each of SPEC, S7,
and Newpoint performed the contract in whole or in part in Harris County, Texas.”
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On June 24, 2019, PPL filed a special appearance and motion to dismiss for
lack of jurisdiction which it later amended. PPL argued that (1) it is a non-resident
foreign corporation with its principal place of business in Pakistan, (2) the Contract
was executed by PPL and DMCC only, (3) PPL had no relationship or connection
with any other plaintiff, and (4) the entire work under the Contract was to be
completed in Pakistan. It further asserted that the contract was executed in Pakistan
and governed by the laws of Pakistan and that all payments under the Contract were
made to DMCC from Pakistan. It attached copies of the filings related to the
arbitration and litigation in Pakistan and the Contract as exhibits to its amended
special appearance.
On September 26, 2019, DMCC and the other plaintiffs filed a motion for
continuance of the special appearance hearing, a request for sanctions, and a motion
for limited discovery. On September 27, 2019, they filed a response to PPL’s
amended special appearance arguing that Texas courts could exercise specific
jurisdiction over PPL because (1) the Contract specifically authorized work to be
performed in Texas and (2) PPL’s contacts with Texas were substantial. They
attached the following as exhibits to their response:
1) a copy of the Contract,
2) a Recommended Vendors/Manufacturers List,
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3) Franchise Tax Account Status printouts reflecting that SPEC and S7 are
registered businesses in the State of Texas,
4) the declarations of Zafar Sheikh, a Director of DMCC, SPEC, SPEC
Oil & Gas, and S7, and Irtaza Sheikh, a Director of S7,
5) various purchase orders, and
6) photographs of employees at the Project site.
The trial court granted the motion for continuance and the request for limited
discovery.
The parties completed jurisdictional discovery and subsequently filed
additional briefing and evidence prior to the hearing on the special appearance.
Following a non-evidentiary hearing, the trial court signed an order denying PPL’s
special appearance on June 7, 2021. The trial court also denied PPL’s request for
findings of fact and conclusions of law. This interlocutory appeal followed.
Discussion
PPL contends that the trial court erred in denying its special appearance
because PPL lacks sufficient minimum contacts to support the assertion of specific
or general jurisdiction, and that any implied finding from the trial court that PPL had
sufficient minimum contacts to support the exercise of jurisdiction is not supported
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by legally or factually sufficient evidence.2 In support of its contention, it argues that
(1) PPL contracted only with DMCC, a UAE company, and not the Texas plaintiffs,
(2) an analysis of the factors applicable to breach-of-contract disputes demonstrates
that jurisdiction is lacking, and (3) the remaining alleged minimum contacts relied
on by appellees are insufficient. It further argues that exercising jurisdiction over
PPL would offend traditional notions of fair play and substantial justice.
Appellees respond that PPL failed to satisfy its burden to negate each of the
bases of personal jurisdiction alleged in their amended petition. They argue that PPL
engaged in sufficient minimum contacts to establish specific jurisdiction because it
(1) contracted with an entity with a strong presence in Texas, (2) conducted business
with Texas residents, (3) advertised in Texas, and (4) required appellees, vendors,
and contractors to comply with Texas law. It also asserts that a substantial amount
of work within the scope of the Contract was performed in Texas.
A. Standard of Review
We review de novo a trial court’s decision to grant or deny a special
appearance. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806
(Tex. 2002). A plaintiff must plead allegations that bring a non-resident defendant
2
A nonresident’s contacts can give rise to either general or specific personal
jurisdiction. Moncrief Oil Int’l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex.
2013). Because appellees concede on appeal that, on these facts, general jurisdiction
does not exist as to PPL, we consider only whether specific jurisdiction exists.
8
within the provisions of the Texas long-arm statute. BMC Software Belg., N.V. v.
Marchand, 83 S.W.3d 789, 793 (Tex. 2002). The Texas long-arm statute provides
that a non-resident who “does business” in the state, such as by contracting with a
Texas resident where the contract is to be performed in whole or in part in Texas, is
subject to personal jurisdiction. TEX. CIV. PRAC. & REM. CODE § 17.042(1); BMC
Software, 83 S.W.3d at 795.
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). “Because the plaintiff defines the scope and nature of the
lawsuit, the defendant’s corresponding burden to negate jurisdiction is tied to the
allegations in the plaintiff’s pleading.” Id. at 658; Brenham Oil & Gas, Inc. v. TGS–
NOPEC Geophysical Co., 472 S.W.3d 744, 764 (Tex. App.—Houston [1st Dist.]
2015, no pet.). The defendant can negate jurisdiction on either a factual or legal
basis. Kelly, 301 S.W.3d at 659. Factually, the defendant can present evidence that
it has no contacts with Texas, effectively disproving the plaintiff’s allegations. Id.
Legally, the defendant can show that even if the plaintiff’s alleged facts are true, the
evidence is legally insufficient to establish jurisdiction. Id.
When, as here, a trial court does not issue findings of fact and conclusion of
law in support of a special appearance ruling, then “all facts necessary to support the
9
judgment and supported by the evidence are implied.” BMC Software, 83 S.W.3d at
795. However, these findings are not conclusive when the appellate record includes
both the clerk’s and reporter’s records, as it does here, and a party may challenge
these findings for legal and factual sufficiency on appeal. Id.; Waterman Steamship
Corp. v. Ruiz, 355 S.W.3d 387, 402 (Tex. App.—Houston [1st Dist.] 2011, pet.
denied).
B. Applicable Law
Texas courts may assert personal jurisdiction over a nonresident defendant if
(1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the
exercise of jurisdiction is consistent with federal and state due process standards.
Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). 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, 83
S.W.3d at 795 (quotation omitted). Federal due process requires that the nonresident
defendant have purposefully established minimum contacts with the forum state,
such that the defendant reasonably could anticipate being sued there. Curocom
Energy LLC v. Young–Sub Shim, 416 S.W.3d 893, 896 (Tex. App.—Houston [1st
Dist.] 2013, no pet.). The exercise of personal jurisdiction must also comport with
traditional notions of fair play and substantial justice. Id.10
Specific jurisdiction arises when the defendant purposefully avails itself of
conducting activities in the forum state, and the cause of action arises from or is
related to those contacts or activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462,
472 (1985); Kelly, 301 S.W.3d at 658; Retamco Operating, Inc. v. Republic Drilling
Co., 278 S.W.3d 333, 338 (Tex. 2009). In a specific jurisdiction analysis, “we focus
. . . on the ‘relationship among the defendant, the forum[,] and the litigation.’” Moki
Mac, 221 S.W.3d at 575–76 (quoting Guardian Royal Exch. Assurance, Ltd. v.
English China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex. 1991)). The plaintiff must
show a substantial connection between the defendant’s contacts with the forum state
and the operative facts of the litigation. Id. at 585. The “purposeful availment”
inquiry has three parts. See Michiana Easy Livin’ Country, Inc. v. Holten, 168
S.W.3d 777, 785 (Tex. 2005). First, only the defendant’s contacts with the forum are
relevant, not the unilateral activity of another party or a third person. Id. Second, the
contacts relied upon must be purposeful rather than random, fortuitous, or
attenuated. Id.; see also Burger King, 471 U.S. at 475 n.18. Third, the “defendant
must seek some benefit, advantage, or profit by ‘availing’ itself of the jurisdiction.”
Michiana, 168 S.W.3d at 785.
C. Specific Jurisdiction —Breach of Contract Claim
In its amended petition, appellees pleaded that “[t]he Court has jurisdiction
over PPL pursuant to § 17.042 of the Texas Civil Practice and Remedies Code
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because [PPL] contracted with a Texas resident (namely SPEC, S7[,] and Newpoint),
and each of SPEC, S7[,] and Newpoint performed the contract in whole or in part in
Harris County, Texas.” PPL contends that the evidence conclusively negates this
alleged basis for jurisdiction. It argues that even if the evidence showed that such a
contract existed, jurisdiction would nevertheless be lacking.
1. Parties to the Contract
“As a general rule, the benefits and burdens of a contract belong solely to the
contracting parties, and no person can sue upon a contract except he be a party to or
in privity with it.” First Bank v. Brumitt, 519 S.W.3d 95, 102–03 (Tex. 2017)
(quotation omitted); Kenyon Int’l Emergency Servs., Inc. v. Starr Indem. & Liab.
Co., No. 01-17-00386-CV, 2018 WL 6241461, at *5 (Tex. App.—Houston [1st
Dist.] Nov. 29, 2018, pet. denied) (mem. op.). Here, the Contract for the construction
of the gas processing facility in Pakistan states that it is between PPL, the Company,
and DMCC, the Contractor. The contract is signed only by two parties: PPL and
DMCC. No other party appears on the face of the Contract.
Appellees argue that they are parties to the Contract because they bid on the
Project and executed the Contract as a consortium/joint venture. They assert that the
consortium/joint venture consisted of DMCC, as the lead consortium/joint venture
partner, and the other entities including SPEC, SPEC Oil & Gas, and S7. They argue
that the Contract “indisputably acknowledges that a consortium/joint venture is
12
being used for the Project.” In support of their argument, appellees point to Section
3.34.1 of the Contract:
In case of JV/Consortium, the invoice(s) shall be raised by the lead
consortium partner on behalf of itself and other JV consortium
partner(s) clearly stating the amounts attributable to each consortium
partner. The COMPANY shall make payment to the designated
accounts of each consortium partner respectively as per the amounts
mentioned in the invoices(s) [sic].
Section 3.34.1 does not establish that appellees executed the Contract as a
consortium/joint venture. Rather, the provision provides the procedure for invoicing
in the event of a joint venture/consortium. And, as noted above, the Contract itself
does not reflect execution as a consortium/joint venture. Siddiqui testified that the
bidding procedure for the Contract requires any joint venture be identified in writing
and that a copy of the joint venture agreement, which would include the composition
of the joint venture, be provided with the bidding document. There is nothing in the
record showing that a joint venture agreement was provided in the bid. Irtaza Sheikh,
appellees’ corporate representative, testified that he did not know if an agreement
among the purported consortium members existed. There is no evidence that
appellees executed the Contract as a joint venture.
PPL argues that even if DMCC had executed the Contract as a joint
venture/consortium, this fact alone would not render each individual member of the
joint venture an actual party to the agreement. We agree. “[A] joint venture, like a
partnership, is an entity legally distinct from the partners.” Bank One, Tex., N.A. v.
13
Stewart, 967 S.W.2d 419, 444 (Tex. App.—Houston [14th Dist.] 1998, pet. denied).
And, “a contract with one corporation . . . is generally not a contract with any other
corporate affiliates.” In re Merrill Lynch Trust Co. FSB, 235 S.W.3d 185, 191 (Tex.
2007) (orig. proceeding); see also R. Hassell Builders, Inc. v. Texan Floor Serv.,
Ltd., 546 S.W.3d 816, 829–30 (Tex. App.—Houston [1st Dist.] 2018, pet. denied)
(noting that while corporation and joint venture were part of same “corporate
family,” they were each separate legal entities and “[a]s such, they are each
responsible for their own debts and liabilities.”).
2. Purchase Orders
Appellees argue that, pursuant to the Contract, each individual invoice for
approved work performed by the consortium members constituted an agreement for
PPL to pay. They assert that each individual invoice that DMCC sent for SPEC and
S7 (Texas corporations) was an individual contract for PPL to pay SPEC and S7.
This argument is unavailing. The “invoices” upon which appellees rely are purchase
orders sent by DMCC to various vendors. PPL is not named as a purchaser on any
of the purchase orders. The materials purchased were all to be shipped to SPEC Oil
& Gas in Dubai. Irtaza Sheikh testified that only DMCC, and no other party, was to
receive payments from PPL under the Contract. This comports with Section 3.7.20
of the Contract which provides that DMCC was responsible for procuring and paying
vendors for the materials. Because PPL was not a party to the purchase orders, the
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orders do not establish a contract between PPL and SPEC or PPL and S7. See
Brumitt, 519 S.W.3d at 102 (noting benefits and burdens of contract belong only to
contracting parties); see also Shell Compania Argentina de Petroleo, S.A. v. Reef
Expl., Inc., 84 S.W.3d 830, 838 (Tex. App.—Houston [1st Dist.] 2002, pet. denied)
(holding that defendant was not party to various agreements and therefore
agreements were not relevant to consideration of issue of specific jurisdiction).
3. Factors Applicable in Breach-of-Contract Disputes
Moreover, even if appellees could demonstrate that PPL contracted with the
Texas entities, that fact alone is insufficient to confer jurisdiction. Merely
contracting with a Texas corporation does not satisfy the minimum contacts
requirement. Shell Compania Argentina, 84 S.W.3d at 837 (citing TeleVentures, Inc.
v. Int’l Game Tech., 12 S.W.3d 900, 908 (Tex. App.—Austin 2000, pet. denied)).
Prior negotiations, contemplated future consequences, the terms of a contract, and
the parties’ course of dealing are all factors that must be considered in determining
whether a defendant purposely established minimum contacts within the forum. Id.In this case, the undisputed evidence shows that contract negotiations and
execution of the Contract took place in Dubai or Pakistan, not Texas. As to
contemplated future consequences, the Contract expressly provides that any future
disputes would be governed by Pakistani law and subject to arbitration in Pakistan.
This evidence supports a finding that PPL did not purposefully avail itself of Texas.
15
See Michiana, 168 S.W.3d at 792 (noting that “insertion of a clause designating a
foreign forum suggests that no local availment was intended”).
The “place of contractual performance” is also an important consideration in
determining whether a defendant purposely availed itself of the forum state. See
Sayers Constr., L.L.C. v. Timberline Constr., Inc., 976 F.3d 570, 573 (5th Cir. 2020).
As part of this consideration, courts look at whether the contract contemplated or
required performance in Texas, where the defendant performed its obligations, and
where the contract centered. See M & F Worldwide Corp. v. Pepsi–Cola Metro.
Bottling Co., 512 S.W.3d 878, 889 (Tex. 2017) (noting fact that contract did not
contemplate or require performance in Texas); see also Moncrief Oil Int’l Inc. v.
OAO Gazprom, 481 F.3d 309, 312 (5th Cir. 2007) (concluding plaintiff’s unilateral
performance of activities in Texas was insufficient where “the defendant did not
perform any of its obligations in Texas, the contract did not require performance in
Texas, and the contract is centered outside of Texas.”). Here, the Contract is for the
construction of a gas processing facility located in Pakistan—thus, the place of the
Contract’s performance is centered in Pakistan. The Contract also provided that
regular status meetings would be held either in Karachi or at the site in Pakistan. All
payments were made to DMCC from Pakistan. Nothing in the Contract contemplates
or requires performance in Texas. See Univ. of Ala. v. Suder Found., No. 05-16-
00691-CV, 2017 WL 655948, at *7 (Tex. App.—Dallas Feb. 17, 2017, no pet.)
16
(mem. op.) (concluding circumstances did not establish purposeful availment where
“[the Defendant’s] contract performance was substantially in Alabama, and the
parties’ contractual relationship was centered in Alabama, not Texas”); Weatherford
Artificial Lift Sys., Inc. v. A & E Sys. SDN BHD, 470 S.W.3d 604, 615 (Tex. App.—
Houston [1st Dist.] 2015, no pet.) (concluding that evidence showing contract was
negotiated in Malaysia and required that payment would have been made from
Malaysia was insufficient to support exercise of jurisdiction in Texas).
4. Approved Vendor List
Appellees argue that Section 3.2 of the Contract contemplated performance in
Texas. That section provides: “All equipment and materials supplied under the
CONTRACT shall be new/unused and from the vendor as mentioned in
recommended manufacturer/vendor list . . .” They point out that over 90% of the
approved vendors are located outside of Pakistan, with many of them in the United
States, and the Contract contemplated that the parties to the Contract would use
Texas vendors for performance of the Project. Thus, they argue, PPL specifically
targeted Texas residents.
While the forty-four page approved vendor list includes some Texas vendors,
it includes companies from all over the world and nearly every one of the companies
is listed as international. The international focus of the approved vendor list suggests
that Texas was neither targeted nor the focus of the list. See Suder Found., 2017 WL
17655948, at *7 (concluding fact that defendant university was obligated to assist in
development of Texas-based foundation’s national program and provide it with data
to promote its larger nationwide mission underscored that contractual relationship
was not Texas-centered). And, appellees’ corporate representative testified that it
was DMCC who chose the Texas vendors, not PPL. Thus, it stands to reason that
DMCC could have equally chosen a vendor from outside of Texas.
5. Insurance Provision
Appellees assert that Section 3.17 of the Contract requires all vendors and
subcontractors to carry insurance that complies with the law of the state that the
vendor is in—that is, comply with the laws of the State of Texas. They argue that
this evidence demonstrates that PPL purposely availed itself of Texas law. However,
by its terms, Section 3.17 applies to any subcontractor anywhere in the world and is
not specific to Texas. This means that Texas law would only be implicated when
DMCC selected a Texas vendor. Such a contact is merely fortuitous rather than
purposeful. See Michiana, 168 S.W.3d at 785 (stating that contacts relied upon must
be purposeful rather than random, fortuitous, or attenuated to constitute purposeful
availment).
6. Work Performed in Texas and Other States
Appellees contend, as they did in the trial court below, that PPL engaged in
more than $16 million worth of work related to the Contract with entities located in
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the United States of which approximately 66% was performed in Texas or by Texas
residents. They assert that the total amount of work contracted for by Texas residents
on the project is $10,590,409.37. Thus, they argue, Texas residents made up a large
part of PPL’s business dealings related to the Project.
In their response to PPL’s special appearance, appellees included a chart
listing the vendors chosen by DMCC who provided materials for the Project. The
chart reflects that $16 million worth of work for the gas processing plant was
performed in Texas and various other states. The chart shows that a significant
portion of the materials were provided from vendors outside of Texas—including
Wisconsin, Tennessee, New York, Indiana, and Oklahoma—and two of the locations
are listed as “USA.” The work performed for the project outside of Texas is not
relevant to determining whether PPL had any contacts with Texas. See J. McIntyre
Mach., Ltd. v. Nicastro, 564 U.S. 873, 886 (2011) (plurality op.) (“Here the question
concerns the authority of a New Jersey state court to exercise jurisdiction, so it is
petitioner’s purposeful contacts with New Jersey, not with the United States, that
alone are relevant.”). After the amount of work performed by the non-Texas entities
is deducted, the chart shows that the amount of work performed in Texas is slightly
more than $10.5 million. The chart also includes two purchase orders from Newpoint
that DMCC stated in the arbitration were cancelled. With the cancellation of those
purchase orders, the amount of work performed in Texas is reduced to slightly more
19
than $1.8 million, of which only $180,000 was performed by an appellee (S7) in this
case. When viewed in the context of the entire amount ($16 million), and given the
undisputed evidence that DMCC, not PPL chose the vendors for the project, this
evidence is insufficient to support an implied finding that “millions of dollars’ worth
of work was perform[ed] in Texas by SPEC plaintiffs.”
7. Inspection in Texas
Appellees argue that, under the Contract, PPL ordered an inspection of the
work completed in Texas, and that this contact demonstrates purposeful availment.
Siddiqui testified that PPL hired TUV, an Austrian company, to perform
inspections all over the world, and that the inspectors would go “anywhere where
[]DMCC tells them to go for inspection.” Siddiqui testified that the company
performed one inspection in Texas, one in Colorado, and forty or fifty in the UAE.
One inspection in Texas, which occurred at DMCC’s direction, is merely an isolated
contact which cannot support jurisdiction. See Michiana, 168 S.W.3d at 785 (stating
that, for purposes of purposeful availment inquiry, only defendant’s contacts with
forum are relevant, not unilateral activity of third person, and contacts relied upon
must be purposeful rather than random, fortuitous, or attenuated).
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8. Houston Chronicle Advertisement
Appellees point to PPL’s advertisement in the Houston Chronicle to publish
its invitation to bid on the Project as evidence that PPL targeted Texas businesses
and marketed its project in Texas.
Siddiqui testified that PPL published the invitation to bid on the Project in
Dawn, the local newspaper in Pakistan, the Khaleej Times, a UAE newspaper, and
the Houston Chronicle in Texas. He testified that PPL published the invitation in the
Houston Chronicle because its website is widely read by oil and gas business
professionals throughout the world and PPL wanted to reach an international
audience. Irtaza Sheikh acknowledged that DMCC did not see the Houston
Chronicle listing but instead learned about the invitation to bid through “word of
mouth.” This single advertisement in the Houston Chronicle, intended for an
international audience and which DMCC did not see, is an isolated contact that does
not satisfy jurisdictional requirements. See id.
D. Specific Jurisdiction—Unjust Enrichment and Quantum Meruit Claims
In addition to their breach of contract claim, appellees asserted claims for
unjust enrichment and quantum meruit against PPL. As to their unjust enrichment
claim, appellees alleged:
• Defendant received Plaintiffs’ work valued at the full amount of the
contract. This money belongs to Plaintiffs in equity and good
conscience. Further, the goods and services were obtained by
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Defendant on account of fraud and taking undue advantage of Plaintiffs
(directly and indirectly[)] through Defendant’s representatives.
As to their quantum meruit claim, appellees alleged:
• Plaintiffs provided valuable services and materials to Defendant PPL
as evidenced by its detailed invoices documenting these items. These
services and supplies were rendered for the direct benefit of Defendant
PPL. Further, these services and supplies were accepted by Defendant
PPL, and Defendant PPL was notified that in performing these services
and providing these supplies, Plaintiff expected to be paid by Defendant
PPL.
Under Texas’s long-arm statute, appellees were required to plead that PPL
committed the alleged tortious acts in Texas. See Kelly, 301 S.W.3d at 658–59 (“If
the plaintiff fails to plead facts bringing the defendant within reach of the long-arm
statute (i.e., for a tort claim, that the defendant committed tortious acts in Texas), the
defendant need only prove that it does not live in Texas to negate jurisdiction.”);
Proppant Sols., LLC v. Delgado, 471 S.W.3d 529, 536 (Tex. App.—Houston [1st
Dist.] 2015, no pet.) (citing Kelly, 301 S.W.3d at 658–59). Neither appellees’
amended petition nor its responsive briefing alleges that PPL committed any acts in
Texas much less any tortious acts. That is, appellees did not plead where any alleged
fraud and taking of undue advantage occurred, and appellees do not contend that
these alleged acts occurred in Texas. Similarly, appellees’ allegations underlying
their quantum meruit claim do not identify where PPL’s alleged actions occurred.
Moreover, we note that any alleged services and supplies would presumably have
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been accepted by PPL at the plant in Pakistan.3 See Vinmar Overseas Singapore PTE
Ltd. v. PTT Int’l Trading PTE Ltd., 538 S.W.3d 126, 133 (Tex. App.—Houston [14th
Dist.] 2017, pet. denied) (“When the plaintiff fails to allege an act by the defendant
occurring in Texas, the plaintiff has not met its initial burden of pleading acts
sufficient to invoke jurisdiction over the nonresident defendant.”); see also
Moncrief, 414 S.W.3d at 153–54, 156–57 (holding nonresident defendant was
subject to jurisdiction for misappropriation of trade secrets claim where defendant
obtained trade secrets in Texas but not for tortious interference claim where alleged
acts of interference occurred outside of Texas). Because PPL proved that it is not a
Texas resident, it negated personal jurisdiction over appellees’ unjust enrichment
and quantum meruit claims. See Kelly, 301 S.W.3d at 658–59.
Accordingly, we conclude that the evidence is insufficient to support any
implied finding that PPL had sufficient minimum contacts with Texas to support the
exercise of jurisdiction over it. Because PPL did not purposefully avail itself of the
privilege of conducting activities in Texas, the trial court erred in denying its
amended special appearance. Having concluded that PPL negated all bases for the
assertion of personal jurisdiction, we sustain PPL’s issues.4
3
Appellees do not address the issue of jurisdiction over their unjust enrichment and
quantum meruit claims in their brief on appeal.
4
In light of our holding, we need not address the question of whether the exercise of
personal jurisdiction would offend the traditional notions of fair play and substantial
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Conclusion
We reverse the trial court’s June 7, 2021 order denying PPL’s amended
special appearance and render judgment dismissing appellees’ claims against PPL.
Amparo Guerra
Justice
Panel consists of Justices Goodman, Hightower, and Guerra.
justice. See 11500 Space Ctr., L.L.C. v. Private Cap. Grp., Inc., 577 S.W.3d 322,
336 n.9 (Tex. App.—Houston [1st Dist.] 2019, no pet.).
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