Timothy Oostveen and Stephanie Oostveen v. Helen Moreno ( 2008 )

i i i i i i
MEMORANDUM OPINION
No. 04-08-00231-CV
Timothy OOSTVEEN and Stephanie Oostveen,
Appellants
v.
Helen MORENO,
Appellee
From the 150th Judicial District Court, Bexar County, Texas
Trial Court No. 2007-CI-14363
Honorable Gloria Saldana, Judge Presiding
Opinion by: Alma L. López, Chief Justice
Sitting: Alma L. López, Chief Justice
Karen Angelini, Justice
Phylis J. Speedlin, Justice
Delivered and Filed: August 20, 2008
AFFIRMED
In this accelerated interlocutory appeal, nonresident defendants, Timothy and Stephanie
Oostveen (the Oostveens), challenge the trial court’s order denying their special appearance. The
Oostveens contend the trial court erred by: (1) deciding the Oostveens waived their special
appearance; and (2) improperly applying constitutional jurisdictional standards with regard to
minimum contacts. We affirm the trial court’s order.
BACKGROUND
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The Oostveens are Oklahoma residents, and the plaintiff, Helen Moreno, resides in San
Antonio, Texas. The Oostveens contacted Moreno in San Antonio and represented that they could
transport, house, feed, and care for Moreno’s exotic animals while she was recovering from an
accident that left her wheelchair-bound. The Oostveens drove to Texas to discuss the agreement
with Moreno whereby the Oostveens would take the animals from Texas to Oklahoma, board them,
breed them, and split the profits from the offspring with Moreno. After finalizing the agreement in
March of 2004, the Oostveens took three pair of marmosets from Texas to Oklahoma. They returned
in July of 2004 to pick up a pair of kinkajous and a baby kinkajous. The marmosets produced
offspring which were marketed and sold under Moreno’s trade name of “Helen’s Little Critters,”
which was registered in Bexar County. The profits were split between the parties.
Eight months later, the marmosets died while housed at the Oostveens’ residence in
Oklahoma. The Oostveens and Moreno agreed that Moreno would purchase more animals and
advance funds to the Oostveens for pen construction and operating expenses. In October of 2005,
the Oostveens picked up a trio of kinkajous from Moreno in Texas. Over the course of several
months, the Oostveens also picked up animals on behalf of Moreno from other Texas residents. Due
to the Oostveens’ alleged improper boarding and care of the animals, more of Moreno’s animals died
in Oklahoma. The Oostveens allegedly made other misrepresentations to Moreno and induced
Moreno to provide more funds for the care of the animals.
Eventually, Moreno sued the Oostveens for breach of contract and, alternatively, quantum
meruit and promissory estoppel. The Oostveens filed an unverified, pro se motion to dismiss for
lack of jurisdiction. After Moreno responded by pointing out a technical error in the Oostveens’
motion to dismiss, the Oostveens amended their motion to include a verification and renamed the
pleading “Amended Special Appearance & Subject Thereto, Original Answer.” After a hearing on
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the special appearance, the trial court denied the special appearance without issuing findings of fact
or conclusions of law. The Oostveens appeal.
STANDARD OF REVIEW
In Texas, “[a] special appearance is used to challenge the trial court’s jurisdiction over the
person or property based on the claim that neither is amenable to process in this state.” W. Wendell
Hall, Standards of Review in Texas, 38 ST. MARY’S L.J. 47, 81 (2006). We may review an
interlocutory appeal from a trial court’s ruling on a special appearance pursuant to section 51.014
of the Civil Practice and Remedies Code. TEX. CIV. PRAC. & REM. CODE ANN. § 51.014 (Vernon
Supp. 2007). Whether a trial court has personal jurisdiction over a defendant is a question of law
subject to de novo review. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.
2002). The plaintiff bears the initial burden to plead “sufficient allegations to bring a nonresident
defendant within the provisions of the long-arm statute.” Id. at 793. When nonresident defendants
file a special appearance, they are required to negate all bases of personal jurisdiction asserted by
the plaintiff. Id.
When ruling on a special appearance, the trial court considers the pleadings, affidavits,
attachments, stipulations of fact, and any oral testimony submitted by the parties. TEX. R. CIV. P.
120a. The trial court frequently resolves questions of fact before resolving the jurisdictional issue.
BMC Software Belgium, 83 S.W.3d at 794. When the trial court fails to issue findings of fact or
conclusions of law, all facts necessary to support the judgment and supported by the evidence are
implied. Id. at 795. However, “[w]hen the appellate record includes the reporter’s and clerk’s
records, these implied findings are not conclusive and may be challenged for legal and factual
sufficiency.” Id. In reviewing the legal sufficiency of the facts, we overrule the challenge if there
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is more than a scintilla of evidence to support the finding. Tempest Broadcasting Corp. v. Imlay,
150 S.W.3d 861, 868 (Tex. App.—Houston [14th Dist.] 2004, no pet.). When reviewing the factual
sufficiency of the findings, we may sustain the challenge only if the trial court’s finding is so
contrary to the overwhelming weight of the evidence as to be clearly wrong and manifestly unjust.
Id.
ANALYSIS
A. Waiver of Special Appearance
In their first issue, the Oostveens assert that they did not waive their special appearance by
initially filing an unsworn motion to dismiss for lack of jurisdiction. Prior to the hearing on the
special appearance, the Oostveens amended the motion by attaching the proper verifications and
renaming the pleading “Amended Special Appearance & Subject Thereto, Original Answer.” At
the hearing on the special appearance, the Oostveens’ counsel presented Texas Supreme Court
authority supporting a defendant’s ability to amend a challenge to the court’s jurisdiction by adding
a verification without causing a technical waiver of the special appearance. See Dawson-Austin v.
Austin, 968 S.W.2d 319, 322 (Tex. 1998). Rule 120a(1) allows defects in special appearances to be
cured. Id.; see also TEX. R. CIV. P. 120a(1). “The absence of a verification is such a defect, and an
amendment that adds a verification cures the special appearance.” Dawson-Austin, 968 S.W.2d at
322. Because the Oostveens timely amended their special appearance, their first issue is sustained.
See id.
B. Personal Jurisdiction
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Next, the Oostveens contend the trial court erred by improperly applying the applicable
jurisdictional standards when it determined that Moreno’s claims arose from and related to the
Oostveens’ purposeful contacts with Texas. Moreno was required to plead sufficient allegations to
bring the Oostveens within the long-arm statute of Texas. See BMC Software Belgium, 83 S.W.3d
at 793. The Oostveens argue that Moreno’s live pleadings represent the totality of the conduct that
is the subject matter of the suit, and the conduct complained of is the improper housing, feeding, and
care of the animals. The Oostveens argue that their conduct of traveling into Texas to contract with
Moreno and take possession of the animals is not the conduct complained of in Moreno’s suit and,
therefore, cannot be used by the trial court to evaluate the Oostveens’ minimum contacts with the
state. We disagree.
Texas courts may exercise personal jurisdiction over a nonresident if it is (1) authorized by
the Texas long-arm statute, and (2) consistent with state and federal due process.1 Moki Mac River
Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). Under the federal Due Process Clause,
jurisdiction is proper if a nonresident defendant establishes minimum contacts with Texas, and
“maintenance of the suit does not offend traditional notions of fair play and substantial justice.”
Int’l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945) (internal quotations omitted). A nonresident
1
Texas considers “doing business” in the state by a nonresident defendant sufficient to satisfy the long-arm
statute as long as the activities meet the federal due process requirements. TEX. CIV. PRAC. & REM. CODE ANN. § 17.042
(Vernon 1997). Although not an exclusive list, the statute provides that a nonresident defendant does “business” in
Texas if the nonresident: (1) contracts by mail or otherwise with a Texas resident and either party is to perform the
contract in whole or in part in Texas; (2) commits a tort in whole or in part in this state; and (3) recruits Texas residents,
directly or through an intermediary located in Texas, for employment inside or outside this state. Id.
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defendant’s minimum contacts with Texas can give rise to either general or specific jurisdiction.2
CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996).
1. Specific Jurisdiction
Specific jurisdiction is established if (1) the nonresident defendant purposely avails itself of
the privilege of conducting business in Texas and (2) the defendant’s liability arises from, or is
related to, those contacts. Moki Mac River Expeditions, 221 S.W.3d at 576. The Oostveens’
conduct, whether within or outside of Texas, must have caused the Oostveens to reasonably
anticipate being haled into a Texas court. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 297 (1980).
a. Purposeful Availment
Three principles guide our purposeful availment inquiry. First, we consider only the
Oostveens’ activities in Texas, not the unilateral activity of Moreno. Moki Mac River Expeditions,
221 S.W.3d at 575. Next, those activities must be purposeful and not random or fortuitous. See id.
Finally, the Oostveens must have sought some benefit, advantage, or profit by availing themselves
of the state’s jurisdiction. See id.
Applying the first principle, Moreno did not contact the Oostveens. The Oostveens contacted
Moreno in Texas after finding out about Moreno’s accident through “other people” in the industry.
The Oostveens induced Moreno to enter into an oral contract in Texas by claiming to “have a lot of
knowledge on the care of primates.” The Oostveens solicited a business partnership with Moreno
2
Because we conclude the Oostveens have sufficient minimum contacts to establish specific jurisdiction, we
do not address general jurisdiction.
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in Texas whereby Moreno would pay them to: take the animals to Oklahoma; board, feed, breed, and
sell them; and split the profits. See id. at 578-79.
Moving to the second principle, the Oostveens’ business with Moreno stemmed from their
deliberate solicitation of Moreno in Texas by phone and in person. The Oostveens contacted
Moreno in Texas, traveled to Texas to negotiate the agreement with Moreno, traveled to Texas on
several occasions to pick up animals, and marketed the joint-venture offspring under Moreno’s
Texas business entity. See id. The Oostveens created a continuing relationship with Moreno which
included ongoing obligations. See id. at 578.
Reviewing the third principle, the Oostveens purposefully availed themselves of the privilege
of contracting in Texas, transporting animals through Texas, making profits from a Texas business
relationship, and gaining the advantage of Moreno’s known reputation as an exotic animal dealer
in Texas. See id. at 578-79. Upon our review of the facts, the Oostveens satisfied the “purposeful
availment” prong of specific jurisdiction by “doing business” with Moreno in Texas. See id.
b. Substantial Connection
Next, we must decide whether the Oostveens’ liability arises from or is related to their
contacts with the state. See id. at 579. In Texas, we apply a “substantial connection” analysis. See
id. at 585. This means there must be a substantial connection between the purposeful contact and
the operative facts of the litigation, even where a single act supports jurisdiction. See id. at 584-85
(citing Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 230
(Tex. 1991)).
In this case, Moreno sued the Oostveens for breach of contract. Moreno and the Oostveens
orally agreed that the Oostveens would: (1) transport, board, and care for the animals; (2) locate and
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acquire animals that could produce offspring; and (3) reimburse Moreno for funds that she advanced
to the Oostveens. The operative facts are: (1) at least six animals that were picked up by the
Oostveens in Texas died while in the Oostveens’ possession; (2) some of the animals located and
acquired by the Oostveens from Texas with Moreno’s funds were incapable of reproducing; (3)
Moreno’s funds, advanced to the Oostveens to build proper pens, were not returned to Moreno in
Texas as agreed upon. Although the Oostveens claim that “[t]he record is simply void of evidence
of harm arising from anything other than” the care and housing of the animals in Oklahoma, this
belies the evidence in the record. There is evidence in the record that the Oostveens contracted for
and picked up animals in Texas which later died. The care of the animals was initiated in Texas
when the Oostveens took the animals into their possession in Texas and arises from the Oostveens’
contacts with the state. Animals located and obtained by the Oostveens in Texas were incapable of
producing offspring as represented. Moreno advanced funds to the Oostveens which were never
repaid as promised. The Oostveens marketed the offspring from the joint-venture under Moreno’s
Texas business entity. This is more than a scintilla of evidence to support the trial court’s implied
finding that the Oostveens’ liability arose from or was related to their contacts with Texas, and the
evidence is not so against the great weight of the evidence as to be clearly wrong and manifestly
unjust. See Tempest Broadcasting Corp., 150 S.W.3d at 868.
2. Fair Play and Substantial Justice
Because we conclude that the trial court properly applied the law to the facts supporting
specific jurisdiction, we now determine whether the assertion of personal jurisdiction comports with
fair play and substantial justice. Id. at 232. When making this determination, we consider the
following factors: “(1) the burden on the defendant; (2) the interests of the forum state in
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adjudicating the dispute; (3) the plaintiff’s interest in obtaining convenient and effective relief; (4)
the interstate judicial system’s interest in obtaining the most efficient resolution of controversies;
and (5) the shared interest of the several states in furthering fundamental substantive social policies.”
Id. “Only in rare cases, however, will the exercise of jurisdiction not comport with fair play and
substantial justice when the nonresident defendant has purposefully established minimum contacts
with the forum state.” Id. at 231. It is, therefore, incumbent upon the defendant to present a
compelling case as to why jurisdiction is unreasonable. Id.
Because the Oostveens are residents of Texas’s neighboring state, Oklahoma, and, by their
own admissions, they have made several trips to Texas to conduct business, we cannot say litigation
in Texas will be burdensome to them, especially given the fact that Moreno will carry the burden
of proof at trial. Furthermore, Texas has an inherent interest in protecting its citizens and providing
remedies for their damages; Moreno has a strong interest in obtaining convenient and effective relief
for her alleged losses; the interstate judicial system has an interest in efficiently resolving
controversies between citizens by continuing the suit in Texas rather than dismissing the suit and
allowing it to be re-filed in another forum; and Texas’s social policies of protecting its citizens’
contractual rights and promoting the humane treatment of animals will be furthered by Texas’s
exercise of jurisdiction over the Oostveens. Finally, the Oostveens presented no compelling
argument as to why jurisdiction in Texas would be unreasonable if minimum contacts were
established. After a careful analysis of these factors, we conclude that the assertion of personal
jurisdiction over the Oostveens comports with fair play and substantial justice. See id. at 231-232.
The Oostveens’ second issue is overruled.
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CONCLUSION
For the reasons discussed above, we affirm the trial court’s order denying the Oostveens’
special appearance.
Alma L. López, Chief Justice
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