Personal Touch Holding Corp., and PT Intermediate Holding, Inc. v. LMS Consulting, LLC ( 2015 )

ACCEPTED
04-14-00827-CV
FOURTH COURT OF APPEALS
SAN ANTONIO, TEXAS
3/4/2015 11:38:05 PM
KEITH HOTTLE
CLERK
No. 04-14-00827-CV
FILED IN
4th COURT OF APPEALS
IN THE COURT OF APPEALS FOR THE FOURTH DISTRICT OF
SANTEXAS
ANTONIO, TEXAS
AT SAN ANTONIO, TEXAS 3/4/2015 11:38:05 PM
KEITH E. HOTTLE
Clerk
PT INTERMEDIATE HOLDING, INC. AND PERSONAL TOUCH HOLDING CORP.,
Appellants,
v.
LMS CONSULTING LLC,
Appellee.
On Appeal from the 45th Judicial District Court, Bexar County
Honorable Peter Sakai of the 225th Judicial District Court, Presiding
BRIEF OF APPELLEE LMS CONSULTING LLC
Taylor Dunham and Rodriguez LLP Law Offices of Alejandro Mora PLLC
David E. Dunham Alejandro Mora
State Bar No. 06227700 alejandro@morahealthcarelaw.com
ddunham@taylordunham.com 7000 North Mopac Expressway
Jennifer Tatum Lee Suite 200
State Bar No. 24046950 Austin, Texas 78731
jtatum@taylordunham.com Telephone 512.514.6683
Isabelle M. Antongiorgi Facsimile 888.320.0589 (fax)
State Bar No. 24059386
ima@taylordunham.com
301 Congress Avenue, Suite 1050
Austin, TX 78701
Telephone 512.473.2257
Facsimile 512.478.4409
Counsel for Appellee LMS Consulting LLC
ORAL ARGUMENT REQUESTED
IDENTITY OF THE PARTIES AND COUNSEL
Appellant/Defendant PT Intermediate Holdings Inc.
Appellant/Defendant Personal Touch Holding Corp.1
Represented by:
Jackson Walker LLP
Josh Romero
jromero@jw.com
Monte James
mjames@jw.com
Kimberly Gdula
kgdula@jw.com
100 Congress Avenue, Suite 1100
Austin, Texas 78701
Telephone: 512.236.2000
Facsimile: 512.236.2002
Appellee/Plaintiff LMS Consulting LLC
Represented by:
Taylor Dunham and Rodriguez LLP Law Offices of Alejandro Mora PLLC
David E. Dunham Alejandro Mora
State Bar No. 06227700 alejandro@morahealthcarelaw.com
ddunham@taylordunham.com 7000 North Mopac Expressway
Isabelle M. Antongiorgi Suite 200
State Bar No. 24059386 Austin, Texas 78731
ima@taylordunham.com Telephone: 512.514.6683
Jennifer Tatum Lee Facsimile: 888.320.0589
State Bar No. 24046950
301 Congress Avenue, Suite 1050
Austin, Texas 78701
Telephone: 512.473.2257
Facsimile: 512.478.4409
1
Former Defendant Personal Touch Home Services of NY, Inc., which was dismissed
from the case on November 7, 2014 and is not a party to this appeal. Defendants PT Home
Services of Dallas, Inc. and PT Home Services of San Antonio, Inc. are not parties to this
interlocutory appeal but remain parties in the lawsuit.
Brief of Appellee LMS Consulting LLC Page i
TABLE OF CONTENTS
IDENTITY OF THE PARTIES AND COUNSEL ....................................................i
STATEMENT OF THE CASE .................................................................................vi
STATEMENT REGARDING ORAL ARGUMENT ............................................ vii
ISSUES PRESENTED........................................................................................... viii
INTRODUCTION ..................................................................................................... 1
STATEMENT OF FACTS ........................................................................................ 3
I. Appellants Do Business in Texas as "Personal Touch Home Care, Inc." ............ 5
A. The Personal Touch Home Care, Inc. Website ..................................... 6
B. Appellants Contracted with LMS under the false name
"Personal Touch Health Care Inc." ..................................................... 10
C. Appellants Control the Operations of "Personal Touch Home
Care Inc." and Performed Pursuant to the Contracts with LMS ......... 12
II. Appellants' Disavow Doing Business as "Personal Touch Home Care,
Inc." After Years of Performance under the Contracts with LMS
Consulting ........................................................................................................... 15
III. Plaintiff's Allegations and Appellants' Special Appearance............................... 16
SUMMARY OF ARGUMENT ............................................................................... 18
Brief of Appellee LMS Consulting LLC Page ii
ARGUMENTS AND AUTHORITIES ................................................................... 19
I. Standards of Review ........................................................................................... 19
A. Personal Jurisdiction............................................................................ 21
B. Burdens on a Special Appearance ....................................................... 23
II. Appellants' Contacts with Texas Are More Than Sufficient to Establish
Specific Jurisdiction and Provide Ample Grounds for Asserting General
Jurisdiction .......................................................................................................... 25
A. Appellants Failed to Negate Jurisdiction Arising out of their
"Personal Touch Home Care, Inc." Recruitment and Staffing
Contracts .............................................................................................. 26
B. Appellants Failed to Negate the Allegation That They Recruit
Employees in Texas and Contracted with Texas Residents ................ 32
C. Appellants Failed to Negate that They Had Committed a Tort,
In Whole or In Part, In this Sate .......................................................... 34
D. Appellants Fail to Demonstrate that the Exercise of Jurisdiction
Does Not Comport with Traditional Notions of Fair Play and
Substantial Justice ............................................................................... 34
III. Alternatively, the Texas Contacts of PT Dallas and PT San Antonio
Should Be Attributed to Appellants Pursuant to Jurisdictional Veil
Piercing Doctrine ................................................................................................ 35
CONCLUSION ........................................................................................................ 41
PRAYER FOR RELIEF .......................................................................................... 41
CERTIFICATE OF SERVICE ................................................................................ 43
CERTIFICATE OF COMPLIANCE ....................................................................... 43
APPENDIX .............................................................................................................. 44
Brief of Appellee LMS Consulting LLC Page iii
TABLE OF AUTHORITIES
Page(s)
Cases
Am. Type Culture Collection v. Coleman, 83 S.W.3d 801 (Tex. 2002) .................. 23
BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex.
2002) ...........................................................................................19, 20, 23, 24, 35
Capital Tech. Info. Servs. Inc. v. Arias & Arias Consultores, 240
S.W3d 741 (Tex. App.—Dallas 2008, pet denied)............................................. 37
Cappuccitti v. Gulf Indus. Prods., Inc., 222 S.W.3d 468 (Tex. 2007) ..............23, 37
In re Chinese-Manufactured Drywall Products Liab. Litig., 753 F.3d
521 (5th Cir. 2014).............................................................................................. 36
El Puerto De Liverpool, S.A. De CV v. Servi Mundo Llantero S.A. De
CV, 82 S.W.3d 622 (Tex. App.—Corpus Christi 2002, pet. dism'd
w.o.j.) .................................................................................................................. 36
Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C.,
815 S.W.2d 223 (Tex. 1991) .............................................................................. 35
Gutierrez v. Cayman Islands Firm of Deloitte & Touche, 100 S.W.3d
261 (Tex. App.—San Antonio 2002, pet. dism'd) ........................................24, 32
Huynh v. Nguyen, 180 S.W.3d 608 (Tex. App.—Houston [14th Dist.]
2005, pet. denied)....................................................................................23, 24, 26
Ji-Haw Indus. Co. v. Broquet, No. 04-07-00622-CV, 2008 WL
441822 (Tex. App.—San Antonio Feb. 20, 2008, no pet.) ....................24, 25, 26
Kelly v. Gen. Interior Const. Inc., 301 S.W.3d 653 (Tex. 2010)...........19, 20, 22, 23
Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007)
...........................................................................................................19, 20, 23, 24
Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142 (Tex. 2013),
reh'g denied (Dec. 13, 2013) ..................................................................22, 23, 24
Brief of Appellee LMS Consulting LLC Page iv
PHC-Minden LP v. Kimberly-Clark Corp., 235 S.W.3d 163 (Tex.
2007) ...........................................................................................21, 35, 36, 40, 41
Pulmosan Safety Equip. Corp. v. Lamb, 273 S.W.3d 829 (Tex. App.—
Houston [14th Dist.] 2008, pet. denied) ............................................................. 24
Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333
(Tex. 2009)........................................................................................21, 22, 23, 24
San Pedro Impulsora de Inmuebles Especiales, S.A. de C.V. v.
Villarreal, 330 S.W.3d 27 (Tex. App.—Corpus Christi 2010, no
pet.) ...............................................................................................................24, 26
Spir Star AG v. Kimich, 310 S.W.3d 868 (Tex. 2010) ......................................21, 23
Tempest Broad. Corp. v. Imlay, 150 S.W.3d 861 (Tex. App.—
Houston [14th Dist.] 2004, no pet.) .................................................................... 20
Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217
(Tex.2004).....................................................................................................24, 26
Touradji v. Beach Capital P'ship, LP., 316 S.W.3d 15 (Tex. App.—
Houston [1st Dist.] 2010, no pet.).................................................................24, 34
Watkins v. Isa, No. 04-11-00622-CV, 2012 WL 2021929 (Tex.
App.—San Antonio June 6, 2012, no pet.) (mem. op.) ...................................... 30
Wright v. Sage Eng'g, Inc., 137 S.W.3d 238 (Tex. App.—Houston [1st
Dist.] 2004, pet. denied)...................................................................................... 24
Statutes
Tex. Civ. Prac. & Rem. Code § 17.042 ................................................................... 21
Tex. Civ. Prac. & Rem. Code § 17.042 (1), (3) ....................................................... 32
Tex. Civ. Prac. & Rem. Code § 17.042 (2).............................................................. 34
Rules
Tex. R. Civ. P. 120a(3) ......................................................................................18, 25
Brief of Appellee LMS Consulting LLC Page v
STATEMENT OF THE CASE2
Nature of the Case: This is a suit for breach of various recruiting and
staffing contracts, as well as a case of tortious
interference with existing contracts. Appellee alleges
that it provided recruiting and staffing services
throughout Texas pursuant to contract. Appellants
Personal Touch Holding Corp. and PT Intermediate
Holding Inc., among other Defendants, are liable for
breach of the recruiting and staffing contracts and are
also liable for tortious interference with existing
contracts.
Course of Proceedings: Through its pleadings, Appellee named Appellants
Personal Touch Holding Corp. and PT Intermediate
Holding Inc. along with their subsidiaries, PT Home
Services of Dallas, Inc., PT Home Services of San
Antonio, Inc. and Personal Touch Home Care of N.Y.,
Inc., as Defendants. CR 1-11, 68-79, 269-88.
PT Home Services of Dallas, Inc. and PT Home
Services of San Antonio, Inc. filed answers. CR 28-39,
263-68. Appellants and Personal Touch Home Care of
N.Y., Inc. filed special appearances, challenging
personal jurisdiction. CR 12-27, 80-108, 109-178, 294-
324. Appellee filed several responsive pleadings.
CR 40-65, 179-261, 326-334. The special appearance
motions were heard by the Honorable Peter Sakai on
October 28, 2014. 2 RR 1.
Trial Court Disposition: On November 7, 2014, the trial court issued orders
denying Appellants' special appearances of Appellants
and sustaining the special appearance of Personal
Touch Home Care of N.Y., Inc. CR 337-341.
2
Being dissatisfied with Appellants Personal Touch Holding Corp. and PT Intermediate
Holding, Inc.'s Statement of the Case, Appellee LMS Consulting LLC submits its own pursuant
to Rule 38.2(b).
Brief of Appellee LMS Consulting LLC Page vi
STATEMENT REGARDING ORAL ARGUMENT
Pursuant to Texas Rule of Appellate Procedure 38.1(e), Appellee submits
that oral argument will assist the Court in the disposition of this appeal. Although
the law is well-established, the record in this case is extensive and there appears to
be significant disagreement between the parties regarding the issues to be
determined by this Court. Thus, Appellee requests oral argument.
Brief of Appellee LMS Consulting LLC Page vii
ISSUES PRESENTED3
1. Whether Appellants satisfied their burden to negate all potential bases of
jurisdiction not based on any jurisdictional veil piercing theory, specifically:
A. Appellee's assertion of specific jurisdiction arising from
Appellants' breach of their "Personal Touch Home Care, Inc."
recruiting and staffing contracts with Appellee which called for
and were performed in Texas for over two years;
B. Appellee's assertion of specific jurisdiction arising from
Appellants' recruitment of Texas residents for employment with
"Personal Touch Home Care, Inc." made pursuant to the
recruiting contracts that form the bases of Appellee's claims;
C. Appellee's assertion of specific jurisdiction arising from
Appellants' tortious interference with Appellee's contracts with
its contractors who worked in Texas; and
D. Appellee's assertion of general jurisdiction based on Appellants'
continuous and systematic contacts with Texas as "Personal
Touch Home Care, Inc." and otherwise.
2. Whether the exercise of jurisdiction in this case complies with traditional
notions of fair play and substantial justice.
3. Whether Appellants exercised sufficient control over their Texas
subsidiaries to justify attributing the contacts of their Texas subsidiaries to
Appellants.
3
Being dissatisfied with Appellants Personal Touch Holding Corp. and PT Intermediate
Holding, Inc.'s identification of the issues, Appellee LMS Consulting LLC submits its own
pursuant to Rule 38.2(b).
Brief of Appellee LMS Consulting LLC Page viii
TO THE HONORABLE COURT OF APPEALS:
INTRODUCTION
The trial court's order dismissing Appellant/Defendants Personal Touch
Holding Corp. and PT Intermediate Holding, Inc. ("PT Intermediate") should be
affirmed because Appellants have failed to satisfy their burden to negate all
potential bases of jurisdiction. Appellants' brief is based upon a fallacy—namely
that the only possible means for establishing personal jurisdiction is via
jurisdictional veil piercing.
Plaintiff/Appellee LMS Consulting LLC ("LMS Consulting") has asserted
(and the record supports) both general and specific jurisdiction due to Appellants'
conduct directed at Texas, and Appellants have failed to satisfy their burden to
negate these potential bases for jurisdiction.
Representing themselves to Appellee and the public as "Personal Touch
Home Care, Inc.," Appellants entered into over 20 recruiting and staffing contracts
with Appellee. These contracts called for LMS Consulting to supply Appellants'
Texas operations with personnel and facilitated Appellants' recruitment of Texas
residents for employment in this state. Appellee asserts that Appellants breached
these contracts by, among other things, failing to pay amounts owed.
Additionally, Appellee asserts that Appellants committed an intentional tort,
purposefully directed at Texas. When the parties' relationship soured, Appellants
Brief of Appellee LMS Consulting LLC Page 1
induced Appellee's contractors to breach their contracts with Appellee and begin
working directly for Appellants or for Appellee's competitors.
The only evidence Appellants offer to negate these jurisdictional bases is the
unsubstantiated assertion that they do not do business as "Personal Touch Home
Care, Inc." However, the record is replete with evidence that the Appellants did
business as "Personal Touch Home Care, Inc." Appellants presented themselves
to Appellee and the rest of the world as "Personal Touch Home Care, Inc.,"
controlled all significant aspects of the "Personal Touch Home Care, Inc."
business, and performed as "Personal Touch Home Care, Inc." for over two years
pursuant to the contracts at issue. For over two years, Appellants made the hiring
decisions with respect to persons referred by Appellee to "Personal Touch Home
Care, Inc." and paid Appellee's invoices that pertained to its Texas-based activities.
The trial court's denial of Appellants' special appearance should be affirmed
because Appellants failed to satisfy their burden to negate all bases of jurisdiction
and the evidence is more than sufficient to support the trial court's determination.
Alternatively, should the Court find that Appellants satisfied their burden to
negate all possible bases of jurisdiction (not based on a veil piercing theory,) the
contacts of Appellants' Texas subsidiaries, Defendants PT Home Services of
Dallas, Inc. ("PT Dallas") and PT Home Services of San Antonio, Inc. ("PT San
Antonio"), should be attributed to Appellants for jurisdictional purposes because
Brief of Appellee LMS Consulting LLC Page 2
Appellants control the internal business operations and affairs of these Texas
subsidiaries.
STATEMENT OF FACTS4
Appellants Personal Touch Holding Corp. and PT Intermediate, as well as
Defendants PT Dallas and PT San Antonio, are all part of a family of corporations
based out of Bayside, New York5 that identifies itself and does business as
"Personal Touch Home Care, Inc." CR 60-65 ("Personal Touch Home Care, Inc.
began operations in 1974 and since then has grown into a national company with
over 50 locations in 12 states."); CR 62-64; CR 233-235, CR 237-239; CR 241;
CR 247, CR 260-261; CR 49-53 at ¶¶ 3, 5-6, 8, 18.
Appellants operate and control the business of "Personal Touch Home Care,
Inc." PT Intermediate is a subsidiary of Personal Touch Holding Corp.
Defendants PT Dallas and PT San Antonio are two of many subsidiaries of PT
Intermediate and indirect subsidiaries of Personal Touch Holding Corp. CR 294.
As characterized by Appellants' counsel, his "client is a home health agency
that operates in 11 states, . . . including Texas." 2 RR 5:1-2; see also CR 60-65.
4
Being dissatisfied with Appellants Personal Touch Holding Corp. and PT Intermediate
Holding, Inc.'s Statement of Facts, Appellee LMS Consulting LLC submits its own pursuant to
Rule 38.2(b).
5
The corporate office is located at 22215 Northern Boulevard, Third Floor, Bayside,
New York, 11361. It is the official principal office and place of business for both Appellants and
PT San Antonio and PT Dallas. CR 190-91 at Interrogs. 2, 3; CR 324 at ¶ 9; App. 1, Balk Dep.
6:14-19, 17:15-18:1.
Brief of Appellee LMS Consulting LLC Page 3
No business entity incorporated and chartered under any state's laws called
"Personal Touch Home Care, Inc." actually exists. See 2 RR 35:21-36:19.
Further, Appellants do not present themselves by their proper names or otherwise
distinguish between any of the corporate entities, and did not do so in their
interactions with Appellees. See CR 49 at ¶ 3; CR 233-35, 237-39, 243-46; CR 60-
65.
Appellants use the appellation "Personal Touch Home Care Companies" to
collectively refer to Appellants and all of their subsidiaries, including PT Dallas
and PT San Antonio. App. 1, Balk Dep. 8:11-9:10; CR 93 at ¶ 2; CR 128 at ¶ 2;
CR 170 at ¶ 2; CR 172 at ¶ 2; CR 322 at ¶ 2. Appellee will employ the same
definition herein and will use "Personal Touch Home Care Company" to refer to
any and all of these entities.
Appellee LMS Consulting is a recruiting and staffing consulting company.
CR 49 at ¶ 2. Throughout 2011 and 2012, LMS entered into more than twenty
staffing and recruiting agreements with "Personal Touch Home Touch Inc." to
provide staff for its Texas operations. CR 49-50 at ¶ 3; e.g. CR 233-235, 237-239;
CR 274-76 at ¶¶ 15-17.
The parties did business in Texas pursuant to these contracts for over two
years; Appellants paid LMS Consulting pursuant to these very contracts. See App.
1 Balk Dep. 24:1-9; CR 173 ¶ 4; CR 52 at ¶ 17.
Brief of Appellee LMS Consulting LLC Page 4
Appellants no longer wish to pay the agreed upon rates and are attempting to
disavow the alias "Personal Touch Home Care, Inc." to avoid contractual liability.
According to Appellants, "Personal Touch Home Care, Inc." does not exist and the
continuous use of the name in their contracts, marketing, and communications over
the past 20 plus years was simply a matter of "inadvertence," a mistake. 2 RR
35:21-36:19, 42:5-10; see also App1, Balk Dep. 15:19-16:16, 17:15-18:7
Appellants allege that none of the Personal Touch Home Care Companies do
business as "Personal Touch Home Care, Inc." App. 1, Balk Dep. 13:19-22.
I. Appellants Do Business in Texas as "Personal Touch Home Care, Inc."
The Personal Touch Home Care Companies descend from a New York
entity formally incorporated as "Personal Touch Home Care, Inc." in 1974. CR 60.
In 1992, this entity changed its name to "Personal Touch Home Care of NY, Inc." 6
CR 52 at ¶ 19; App. 1Balk Dep. 13:23-10; 2 RR 23:20-21. However, as further
detailed herein, Appellants are "Personal Touch Home Care, Inc.":
(a) Appellants have presented themselves to Appellee and the world as
"Personal Touch Home Care, Inc.," CR 60-65 (Personal Touch Website);
CR 256; CR 286; CR 49-51 ¶¶ 3, 5, 6, 10, 17;
(b) Appellants have contracted as "Personal Touch Home Care, Inc.,"
including the contracts with Appellee and in the separate contracts with
Texas residents hired pursuant to LMS's recruiting efforts, CR 233-235,
237-239, CR 241; CR 247, CR 260-261; CR 49 at ¶ 3;
6
Personal Touch Home Care of NY, Inc. is no longer a party to this proceeding. CR 337.
Brief of Appellee LMS Consulting LLC Page 5
(c) Appellants performed as "Personal Touch Home Care, Inc." pursuant to
the contracts with LMS; Appellants made the personnel decisions with
respect to LMS referrals and paid (or did not pay) LMS's invoices, CR
49-52 at ¶¶ 8-9, 13-14, 17; CR 248-56;
(d) Appellants control and manage the operations of "Personal Touch Home
Care, Inc.," including the operations in Texas, through a handful of
executives in Bayside, New York, see CR 191-92 at Interrogs. 5, 6;
App.1, Balk Dep. 18:17-19, 24:16-20; CR. 52 ¶ 17; CR 172 at ¶ 2; see
also CR 57; and
(e) Appellants pay taxes as "Personal Touch Home Care, Inc." in Texas, see
CR 286.
A. The Personal Touch Home Care, Inc. Website
All of the Personal Touch Home Care Companies market their services
through a single website controlled entirely by Appellants, www.pthomecare.com
(the "Personal Touch Website"). CR 60-65; CR 324 at ¶ 9; App. ___ Balk Dep.
10:11-13, 14:11-13, 18-20. All of the email addresses of the various
representatives of the Personal Touch Home Care Companies reflected on the
correspondence with LMS Consulting utilizes the domain name
"pthomecare.com." CR. 50 at ¶ 5; e.g. CR 248-56.
The Personal Touch Website states that "Personal Touch Home Care, Inc.
began operations in 1974 and since then has grown into a company with over 50
locations in 12 states" and each page lists Appellants' Bayside, New York office as
the "Contact" address for "Personal Touch Home Care, Inc." CR 60-65; CR 191 at
Brief of Appellee LMS Consulting LLC Page 6
Interrog. No. 3. None of the webpages appear to identify any of the Personal
Companies proper names. See CR 60-65.
Touch Home Care Companies'
PERSONAL TOUCH HOMEPAGE EXCERPTS7
7
CR 60-65.
Brief of Appellee LMS Consulting LLC Page 7
EXCERPTS8
PERSONAL TOUCH TEXAS LOCATIONS WEBPAGE EXCE
8
CR 62-63.
Brief of Appellee LMS Consulting LLC Page 8
As reflected on the preceding page, until it became an issue in this suit,
App. 1, Balk Dep. 15:23-16:17, 18:2-7, the Personal Touch Website identified the
Texas locations (as well as every other location) as an office of "Personal Touch
Home Care, Inc." CR 62-63; see also CR 64-65. Like every other page, the Texas
locations page listed the Appellants' Bayside, New York office as the "Contact"
address for "Personal Touch Home Care, Inc." CR 62-63; see also CR 64-65.
When the Vice President of Operations for all of the Personal Touch Home
Care Companies, Dr. Trudy Balk, was asked about the website's repeated
invocation of "Personal Touch Home Care, Inc.," she replied that its use "was a
mistake." App. 1, Balk Dep. 18:2-5. Contrary to representations in her subsequent
affidavit, at her deposition Dr. Balk testified that the Appellants' Bayside office
was the proper contact address for the Texas locations of "Personal Touch Home
Care, Inc.":
Q: This page lists the Texas location contact address as 222-
15 in Bayside, New York. . . . Is that the correct contact
address?
Dr. Balk: Yes. That's the corporate office.
Q: And this website shows that the name of the Texas
locations is "Personal Touch Home Care, Inc.," correct?
Dr. Balk: Yes. As we said, it was a mistake.
App. ___ Balk Dep. 17:22-18:5; see also id. at 10:11-13; CR 190-191 at
Interrogs. 2, 3; Cf. CR 324 at ¶ 11.
Brief of Appellee LMS Consulting LLC Page 9
B. Appellants Contracted with LMS under the false name
"Personal Touch Health Care Inc."
As exemplified in the following image, all the contracts with LMS
Consulting identify "Personal
Personal Touch
T Home Care, Inc." as the signatory.
CR 233-35, 237-39. The listed Weslaco address for "Personal
Personal Touch Hom
Home Care,
Inc." on the contracts is identical
identic to that which appears adjacent to Appellants
Appellants'
Bayside, New York address on their website. CR 62-63.
Brief of Appellee LMS Consulting LLC Page 10
Dr. Balk is one of a handful of executives based out of Bayside, New York
who control and operate "Personal Touch Home Care, Inc."9 She has been with
the company for 28 years and works out of the New York corporate offices.;
CR 170 at ¶ 2; CR 50 at ¶ 6. As Vice President of Operations for all of the
Personal Touch Home Care Companies, she is charged with supervising all of the
offices across the country, including the Texas offices. CR 170 at ¶ 2; CR 50 at ¶ 6;
App. 1, Balk Dep. 9:17-10:10, 30:1-5.
Ms. Elizabeth De la Rosa, the representative that signed the contracts on
behalf of signatory "Personal Touch Home Care, Inc.," reports to Dr. Balk. CR 50
¶ 6; App. 1, Balk Dep. 11:11-18. Dr. Balk testified that Ms. De la Rosa, regional
administrator for the Texas offices, did not have authority to enter into these
contracts. App. 1, Balk Dep. 12:22-13:18 (Dr. Balk: "She was not authorized to
sign legal agreements on . . . behalf of the company.") Thus, it would appear that
Dr. Balk and Appellants dictate what contracts are to be entered into for the Texas
operations, though Dr. Balk denies having knowledge of the LMS contracts. Id. at
12:22-13:1.
9
The same executives control and manage Appellants and all of the subsidiaries,
including the Texas entities PT Dallas and PT San Antonio. Dr. Felix L. Glaubach is the
president and/or a director of the Personal Touch Home Care Companies; Mr. Robert Marx is a
director and/or vice president; Mr. Anthony Castiglione is the vice president and treasurer; and
Ms. Lorigay Laskin is the "contract manager." See CR 191-92 at Interrogs. 5, 6; App. 1, Balk
Dep. 18:17-19, 24:16-20; CR. 52 ¶ 17; CR 172 at ¶ 2; see also CR 57.
Brief of Appellee LMS Consulting LLC Page 11
C. Appellants Control the Operations of "Personal Touch Home
Care Inc." and Performed Pursuant to the Contracts with LMS
Appellants performed under these "Personal Touch Home Care, Inc."
contracts with LMS for over two years. Appellants are heavily involved in
managing human resources for the Personal Touch Home Care Companies,
including the Texas offices. Dr. Balk's duties as Vice President of Operations
include supervision of each offices' "personnel for sure." App. 1, Balk Dep. 9:17-
10:10, 30:1-5.
All Texas personnel decisions made with referrals from Appellee were
controlled by the corporate office and Dr. Balk. CR 42 at ¶ 13; see also CR 49-53
at ¶¶ 6, 14-16; CR 248, 250, 251, 253.
Routine correspondence from Personal Touch Home Care representatives
exchanged with LMS regarding the staffing and recruiting contracts that are at
issue in this case:
— "Please do not shoot the messenger, but one of the owners daughters in
New York niece [sic] has decided to consider the LVN position in
Dallas. . . . [I]f this corporate plan falls through I want to go with Twyla
at the $35.00 rate." CR 255.
— "I am having to send all the resumes to corporate before we set up
interviews." CR 248.
— "[C]orporate will not let me hire her. . . . I really liked liz [sic] for the
job but, it is not my decision." CR 250.
— "I think I have [an interview] through the head hunter from corporate."
CR 251.
Brief of Appellee LMS Consulting LLC Page 12
— "Corporate has approved Erika in El Paso. She will be in San Antonio
with me next week for Training." CR 253.
The New York personnel of Appellants prepared a referral form specifically
for LMS Consulting's use in Texas. CR 51 at ¶ 10; CR 256.
Employment applications filled out by LMS Consulting recruits, as well as
employment offers made to and accepted by LMS Consulting recruits for
employment in Texas, list "Personal Touch Home Care, Inc." as the employer. E.g.
CR 257, 260-61; 2 RR 28:12-30:5.
Appellants managed the payroll and employee benefits for all of LMS
recruits and staff ultimately engaged to provide services for the Personal Touch
Home Care, Inc. Texas operations. App. 1, Balk Dep. 9:17-10:10, 19:25-20:22,
30:1-5, 9-13. Appellants manage payroll and employee benefits for all of the
Personal Touch Home Care Companies, including the Texas operations. App. 1,
Balk Dep. 9:17-10:10, 19:25-20:22, 30:1-5, 9-13.
Appellants paid Appellee for the Texas recruiting and staffing services
provided by LMS Consulting from Appellants' master account; and decisions
about whether to pay or not pay LMS came from Dr. Balk and the Appellants in
New York. See App. 1, Balk Dep. 24:1-9; see also id at 22:21-23:2; CR 51-52 at
¶¶ 8, 14, 16-17; CR 173 at ¶ 4. Appellants handle the accounting and finances for
the Texas operations (as they do for all of the Personal Touch Home Care
Brief of Appellee LMS Consulting LLC Page 13
Companies), including accounts payable and receivable and taxes. App.1, Balk
Dep. 22:1-11, 22:21-23:2, 24:1-9; CR 173 ¶ 4; CR 57. CR 324-25 at ¶¶ 14, 15.
Appellants control the master account that is used to manage the funds of all
of the Personal Touch Home Care Companies, including the Texas operations.
App. 1, Balk Dep. 22:1-11, 22:21-23:2, 24:1-9; CR 173 ¶ 4. As Dr. Balk
testified, "It all comes from one pot." App.1, Balk Dep. 22:10.
Appellants also managed the invoicing and receivables for all of the
Personal Touch Home Care Companies, including the Texas operations. [cite].
Thus, Appellants billed and collected from Texas clients for the services provided
out of the "Personal Touch Home Care, Inc." Texas offices, including services
provided by LMS staff or recruits. App. 1, Balk Dep. 28:4-21; [cite Castiglione
Aff]; CR 254 (email referencing the involvement of "corporate" in retrieving
Medicaid payment for services provided in Texas through an LMS Consulting staff
placement).
Initially, Dr. Balk testified that PT Intermediate handled human resources
matters, billing and invoicing, and accounts payable for the Personal Touch Home
Care Companies (and also identified PT Intermediate as her employer), but
corrected herself in her errata sheet and identified Personal Touch Holding Corp.
as the entity that performed these functions. App. 1, Balk Dep. 19:25-20:22,
24:16-20, 30:9-15. It appears that she did not change everything that needed
Brief of Appellee LMS Consulting LLC Page 14
correcting however, because her October 5, 2014 affidavit conflicts with her
deposition testimony and other sworn statements. See infra pp. 29-32.
II. Appellants' Disavow Doing Business as "Personal Touch Home Care,
Inc." After Years of Performance under the Contracts with LMS
Consulting
Despite the extensive evidence to the contrary, Appellants deny that they do
business as "Personal Touch Home Care, Inc." Cf. CR 60-65; CR 233-235,
CR 237-239; CR 241; CR 247, CR 260-261; CR 49-53 at ¶¶ 3, 5-6, 8, 18. When
asked to explain their continued use of that appellation by the trial court,
Appellants called the operation of business under a false corporate name for the
past two decades—a name that lacks registration or other charter—"inadvertence":
Court: Mr. James, can you respond?
Mr. James: Yes, your Honor. First and foremost, Personal Touch
Home Care, Inc. has not been sued and is not a
defendant and is not before this Court.
Court: So there is a separate incorporation. Personal Touch
Home Care, Inc., . . . is a separate entity?
Mr. James: It is absolutely a separate entity. And it is -- and it is
not sued.
Court: Does it exist at this time?
Mr. James: I don't think that it exist. [sic] I think that it was
inadvertence on behalf of the holding company to
maintain that name, but it is unequivocal. I mean
Mr. Mora just said on the record that Personal Touch
Home Care, Inc. changed its name to Personal-Touch
Brief of Appellee LMS Consulting LLC Page 15
Home Care of N.Y., Inc. That was 22 years ago, Your
Honor. The name was changed then.
The fact that he has the -- and the website has been
changed, as well, I mean, they -- and, again, there was
no question that there was inadvertence. . . .
...
Court: But yet on their advertisement . . . their stationery,
they're all using Personal Touch Home Care, Inc.,
correct?
Mr. James: Yes sir. Your Honor it was inadvertence and that's
been changed.
2 RR 35:21-36:19; see also App. 1, Balk Dep. 15:19-16:16, 17:15-18:7.
III. Plaintiff's Allegations and Appellants' Special Appearance
Appellee pleads both specific and general personal jurisdiction as to
Appellants. Specifically, Plaintiff's Second Amended Petition provides
The Court has jurisdiction over defendants PT
Intermediate and Personal Touch Holding because each
of them committed an intentional tort of which Plaintiff
complains herein and such action constituting this
intentional tort was purposefully directed to Texas. The
Court has jurisdiction over defendants PT Intermediate
and/or Personal Touch Holdings also because both of
these entities purposefully availed themselves of the
benefits of conducting business in Texas. . . .
Brief of Appellee LMS Consulting LLC Page 16
Count 1
Breach of Contract
(Staffing Agreements)
10
. . . Defendants entered into valid and enforceable
Staffing Agreements with LMSC. . . . Defendants
breached their obligations to pay LMSC amounts due
under the Staffing Agreements. . . . .
...
Count 2
Breach of Contract
(Recruiting Agreements)
. . . Defendants entered into valid and enforceable
Recruiting Agreements with LMSC. . . . Defendants
breached their obligations to pay LMSC amounts due
under the Staffing Agreements. . . . .
Count 3
Tortious Interference
. . . All of the Defendants knew that LMSC has contracts
with these persons, including but not limited to Angela
Dickson, Carla Clark, and Hollie Richard. . . .
Defendants . . . willfully and intentionally interfered with
those contracts by soliciting those individuals to
terminate their contracts with LMSC. . . . Defendants'
willful and intentional interference with LMSC's
contracts with Angela Dickson, Carla Clark, and Hollie
Richard, and others constitute actions directed at
residents of Texas and directed toward Texas. . . .
CR 269-288 at ¶¶ 11, 31-32, 35-36, 39-41.
10
"Defendants" is defined in Plaintiff's Second Amended Petition as including Appellants
PT Intermediate Holding, Inc. and Personal Touch Holding Corp. See CR 269.
Brief of Appellee LMS Consulting LLC Page 17
In the alternative, Appellee asserts specific and general personal jurisdiction
over Appellants pursuant to the doctrine of jurisdictional veil piercing. CR 272 at ¶
11.
Considering the record in its entirety the including "the pleadings, . . . such
affidavits and attachments as may be filed by the parties, the results of the
discovery processes, and any oral testimony," Tex. R. Civ. P. 120a(3), the
Honorable Peter Sakai, denied Appellants' special appearances. CR 339-42.
SUMMARY OF ARGUMENT
The trial court's denial of Appellants' special appearances should be
affirmed because Appellants failed to satisfy their burden to negate all possible
bases for jurisdiction and the trial court's implied findings are supported by more
than a scintilla of evidence.
Appellants' recruiting and staffing contracts with LMS Consulting, made
under the guise of "Personal Touch Home Care, Inc.," facilitated and resulted in
Appellants' recruitment of Texas residents for employment in Texas. These facts,
which form the heart of Appellee's claims, are sufficient to establish both specific
and general jurisdiction. Appellants' conclusory assertion that they are not
"Personal Touch Home Care, Inc." is not sufficient to overcome the great weight of
the evidence, which supports the implied finding that Appellants are in fact
"Personal Touch Home Care, Inc."
Brief of Appellee LMS Consulting LLC Page 18
Additionally, with respect to the tortious interference claim, the Appellants
have offered absolutely no evidence to negate Appellee's assertion that Appellants
intentionally tortiously interfered with its contracts with LMS Consulting's Texas
contractors.
Alternatively, if the Court finds that Appellants satisfied their burden to
negate the foregoing bases for jurisdiction, it nonetheless should affirm the trial
court's determinations under a jurisdictional veil piercing analysis. The "Personal
Touch Home Care, Inc." contacts Appellants would attribute solely to Defendants
PT Dallas and PT San Antonio are properly attributed to Appellants in virtue of
their extensive control over the operations and affairs of the Texas operations and
the LMS contracts.
ARGUMENTS AND AUTHORITIES
I. Standards of Review
A trial court's determination of a nonresident's special appearance is
reviewed de novo. Kelly v. Gen. Interior Const. Inc., 301 S.W.3d 653, 657 (Tex.
2010) ("Whether a court can exercise personal jurisdiction over a nonresident
defendant is a question of law."); Moki Mac River Expeditions v. Drugg, 221
S.W.3d 569, 574 (Tex. 2007) (hereinafter "Moki Mac"); BMC Software Belgium,
N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002) (hereinafter "BMC").
"When as here, the trial court does not issue findings of fact and conclusions
of law with its special appearance ruling, all facts necessary to support the
Brief of Appellee LMS Consulting LLC Page 19
judgment and supported by the evidence are implied." Kelly, 301 S.W.3d at 657;
Moki Mac, 221 S.W.3d at 574; BMC, 83 S.W.3d at 795.
"When the appellate record includes the reporter's and clerk's records, these
implied findings may be challenged for legal and factual sufficiency." BMC, 83
S.W.3d at 795.
The same legal and factual sufficiency standard of review applies when, as is
the case here, an appellant requests conclusions of fact and law but the trial court
declines to file any. See Tempest Broad. Corp. v. Imlay, 150 S.W.3d 861, 867-69
(Tex. App.—Houston [14th Dist.] 2004, no pet.) ("Tempest does not provide any
authority supporting a de novo review of implied fact findings in this circumstance.
. . . Accordingly, we will review any implied findings of fact for legal and factual
sufficiency.").
A legal sufficiency challenge fails if there is more than a scintilla of
evidence to support the challenged finding. Id. at 868. "In reviewing a factual
sufficiency challenge, [the appellate court will] set aside the trial court's decision
only if its ruling is so contrary to the overwhelming weight of the evidence as to be
clearly wrong and manifestly unjust." Id.
"If a reviewing court determines that a conclusion of law is erroneous, but
the trial court rendered the proper judgment, the erroneous conclusion of law does
not require reversal." Id. at 794.
Brief of Appellee LMS Consulting LLC Page 20
A. Personal Jurisdiction
"Texas courts have personal jurisdiction over a nonresident defendant when
(1) the Texas long-arm statue provides for it; and (2) the exercise of jurisdiction is
consistent with federal and state due process guarantees." Spir Star AG v. Kimich,
310 S.W.3d 868, 871 (Tex. 2010).
The Texas long-arm statute provides as follows:
In addition to other acts that may constitute doing
business, a nonresident does business in this state 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 this state;
(2) commits a tort in whole or in part in this state; or
(3) recruits Texas residents, directly or through an
intermediary located in this states, for employment
inside or outside this state.
Tex. Civ. Prac. & Rem. Code § 17.042.
The Texas long-arm does not provide an exhaustive list of all activities that
may constituted "doing business;" rather, it identifies some examples. PHC-
Minden LP v. Kimberly-Clark Corp., 235 S.W.3d 163, 166 (Tex. 2007).
"[T]he Texas long-arm statute's broad 'doing-business' language allows the
statute to reach as far as the federal constitutional requirements of due process will
allow.'" Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337
Brief of Appellee LMS Consulting LLC Page 21
(Tex. 2009) (hereinafter "Retamco"). "Under constitutional due-process analysis,
personal jurisdiction is achieved when (1) the nonresident defendant has
established minimum contacts with the forum state, and (2) the assertion of
jurisdiction complies with 'traditional notions of fair play and substantial justice.'"
Id. at 338
"A Defendant establishes minimum contacts with a state when it
purposefully avails itself of the privilege of conducting activities within the forum
state, thus invoking the benefits and protections of its laws." Kelly, 301 S.W.3d at
653. "A nonresident's contacts can give rise to general or specific personal
jurisdiction. . . . Continuous and systematic contacts with a state give rise to
general jurisdiction, while specific jurisdiction exists when the cause of action
arises from or is related to purposeful activities in the state." Moncrief Oil Int'l Inc.
v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013), reh'g denied (Dec. 13, 2013).
"[S]pecific jurisdiction requires us to analyze jurisdictional contacts on a
claim-by-claim basis." Id. "[I]n some circumstances a single contract may meet
the purposeful-availment standard." Retamco, 278 S.W.3d at 339.
"Only in rare cases . . . 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." Retamco, 278 S.W.3d at 341.
Brief of Appellee LMS Consulting LLC Page 22
"When a nonresident defendant has purposefully availed itself of the
privilege of conducting business in a foreign jurisdiction, it is both fair and just to
subject that defendant to the authority of that forum's courts." Spir Star AG, 310
S.W.3d at 872.
B. Burdens on a Special Appearance
Texas "special-appearance jurisprudence dictates that the plaintiff and the
defendant bear shifting burdens of proof in a challenge to personal jurisdiction."
Kelly, 301 S.W.3d at 653. "[T]he plaintiff bears the initial burden of pleading
allegations sufficient to confer jurisdiction."11 Moncrief Oil Int'l Inc., 414 S.W.3d
at 149; see also Moki Mac, 221 S.W.3d at 574; Retamco, 278 S.W.3d at 337; Am.
Type Culture Collection v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002); BMC, 83
S.W.3d at 793. The fair notice pleading standard applies:
There is no requirement that plaintiffs . . . plead in their
petition the theories or bases of personal jurisdiction
upon which they rely; rather, the only relevant pleading
requirement flows from the need to plead allegations
sufficient to bring nonresident defendants within the
provisions of the long-arm statute. . . . This minimal
pleading requirement can be satisfied by alleging that
nonresident defendants are doing business in Texas.
Huynh v. Nguyen, 180 S.W.3d 608, 619 (Tex. App.—Houston [14th Dist.] 2005,
pet. denied) (internal citations omitted).
11
The burden shifting scheme does not apply to jurisdictional veil piercing, however.
When seeking to establish jurisdiction through veil piercing, the plaintiff bears the burden of
proof. E.g. Cappuccitti v. Gulf Indus. Prods., Inc., 222 S.W.3d 468, 482 (Tex. 2007).
Brief of Appellee LMS Consulting LLC Page 23
Additionally, the plaintiff's original pleadings, as well as its response to the
defendant's special appearance can be considered in determining whether the
plaintiff satisfied its burden. See Wright v. Sage Eng'g, Inc., 137 S.W.3d 238, 249
(Tex. App.—Houston [1st Dist.] 2004, pet. denied).
"In determining jurisdictional pleas asserted by a defendant, [courts] take as
true the pleadings and allegations of the plaintiff and review the pleadings and
allegations in the light most favorable to the plaintiff." Pulmosan Safety Equip.
Corp. v. Lamb, 273 S.W.3d 829, 839 (Tex. App.—Houston [14th Dist.] 2008, pet.
denied); see also Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226
(Tex.2004); Ji-Haw Indus. Co. v. Broquet, No. 04-07-00622-CV, 2008 WL
441822, at *2 (Tex. App.—San Antonio Feb. 20, 2008, no pet.); Huynh, 180
S.W.3d at 619; San Pedro Impulsora de Inmuebles Especiales, S.A. de C.V. v.
Villarreal, 330 S.W.3d 27, 38 (Tex. App.—Corpus Christi 2010, no pet.).
"When the initial burden is met, the burden shifts to the defendant to negate
all potential bases for personal jurisdiction the plaintiff pled." Moncrief Oil Int'l
Inc., 414 S.W.3d at 149 (emphasis added); see also Moki Mac, 221 S.W.3d at 574;
Retamco, 278 S.W.3d at 337; BMC, 83 S.W.3d at 793; See Touradji v. Beach
Capital P'ship, LP., 316 S.W.3d 15, 26 (Tex. App.—Houston [1st Dist.] 2010, no
pet.); Gutierrez v. Cayman Islands Firm of Deloitte & Touche, 100 S.W.3d 261,
268 (Tex. App.—San Antonio 2002, pet. dism'd) as supplemented (Jan. 29, 2003);
Brief of Appellee LMS Consulting LLC Page 24
Ji-Haw Indus. Co. v. Broquet, No. 04-07-00622-CV, 2008 WL 441822, at *4 (Tex.
App.—San Antonio Feb. 20, 2008, no pet.).
"The Court shall determine the special appearance on the basis of the
pleadings, any stipulations made by and between the parties, such affidavits and
attachments as may be filed by the parties, the results of the discovery processes,
and any oral testimony." Tex. R. Civ. P. 120a(3).
II. Appellants' Contacts with Texas Are More Than Sufficient to Establish
Specific Jurisdiction and Provide Ample Grounds for Asserting General
Jurisdiction
"Personal Home Care, Inc." lacks registration or official charter. See 2 RR
35:21-36:19. It does not have a veil to be pierced. Appellants confuse veil
piercing with what is actually their control of the business operating under the
bogus name "Personal Touch Home Care, Inc." Accordingly, Appellants have
been sued for breaching contracts specific to Texas pertaining to the business they
conduct in Texas under the false name "Personal Touch Home Care, Inc."
The trial court's orders should be affirmed because Appellants failed to
satisfy their burden to negate all potential bases of jurisdiction. Specifically,
Appellants failed to negate the following:
A. Appellee's assertion of specific jurisdiction arising from Appellants'
breach of their "Personal Touch Home Care, Inc." recruiting and
staffing contracts with Appellee which called for and were performed
in Texas;
Brief of Appellee LMS Consulting LLC Page 25
B. Appellee's assertion of general and specific jurisdiction arising from
Appellants' recruitment of Texas residents for employment with
"Personal Touch Home Care, Inc." made pursuant to the recruiting
contracts that form the bases of Appellee's claims; and
C. Appellee's assertion of specific jurisdiction arising from Appellants'
tortious interference with Appellee's contracts with its contractors who
worked in Texas.
Appellants also fail to demonstrate that the exercise of jurisdiction in this
case will not comport with traditional of notions of fair play and substantial justice.
A. Appellants Failed to Negate Jurisdiction Arising out of their
"Personal Touch Home Care, Inc." Recruitment and Staffing
Contracts
Plaintiff's Second Amended Petition alleges that Appellants did business in
this state and breached various recruiting and staffing agreements wherein
Appellee provided personnel for Appellants' Texas operations for a period of over
two years.12 See CR 269-288 at ¶¶ 11, 31-32, 35-36; see also CR 233-239; CR 49-
53 at ¶¶ 1, 6, 8, 17.
Appellants failed to present any competent evidence to show that they were
not acting as "Personal Touch Home Care, Inc." in entering into, performing under,
and breaching the 23 contracts that form the bases of LMS Consulting's breach of
contract claims.
12
Appellants brief is based on a fallacy—namely the only possible means for establishing
personal jurisdiction is via jurisdictional veil piercing. To the extent there is any ambiguity in the
record, the pleadings must be liberally construed in Appellee's favor. See Tex. Dep't of Parks &
Wildlife, 133 S.W.3d at 226; Ji-Haw Indus. Co., 2008 WL 441822, at *2; Huynh, 180 S.W.3d at
619; San Pedro Impulsora de Inmuebles Especiales, S.A. de C.V., 330 S.W.3d at 38.
Brief of Appellee LMS Consulting LLC Page 26
As was made clear at the special appearance hearing, there is no properly
incorporated entity formally registered to conduct business under the name
"Personal Touch Home Care, Inc." 2 RR 35:21-36:19 (Mr. James: "I don't think
that [Personal Touch Home Care, Inc.] exists [sic]. I think that it was inadvertence
on behalf of the holding company to maintain that name.").
All the Defendants deny doing business as "Personal Touch Home Care,
Inc." App. 1, Balk Dep. at 13:19-22 (Q: "Do the Texas Personal Touch entities
that are under your operational control go by the name of "Personal Touch Home
Care, Inc."? Dr. Balk: "No.").
However, it is apparent that somebody going by the name "Personal Touch
Home Care, Inc." contracted with Appellee to provide recruitment and staffing
services for operations in Texas and performed pursuant to those contracts for a
period of over two years. See e.g. CR 233-35, 237-39; CR 49-53. The record is
replete with assertions and evidence that Appellants are "Personal Touch Home
Care, Inc." including the following:
(a) Appellants presented themselves to Appellees as "Personal Touch
Home Care, Inc." and represented to Appellee that they were managed
and controlled from Appellants' Bayside, New York office, CR 233-35,
237-39; CR 60-65; CR 49 at ¶¶ 3, 5-6, 8, 13-14, 17-18; App. 1, Balk
Dep. CR 248-256;
Brief of Appellee LMS Consulting LLC Page 27
(b) Appellants exclusively manage and control the Personal Touch
Website, www.pthomecare.com, CR 324 at ¶ 9, through which they
have presented themselves to Appellee and the world as operating by
the name "Personal Touch Home Care, Inc." CR 60-65. Appellants do
not identify any proper corporate names or otherwise distinguish any
corporate entities. CR 248-56. The “Personal Touch Home Care, Inc.”
emails used to correspond with Appellee throughout the parties' course
of dealings, all end with "@pthomecare.com," CR 50 at ¶ 5; CR 248-
56.
(c) Although Appellants appear to control the contracting for the Texas
operations, App. 1, Balk Dep. 12:11-18, 22-13:4, 12-18, they made no
effort to name a proper and distinct entity in their (1) contracts with
Appellee, CR 233-35, 237-39; or (2) their contracts with Texas
residents referred to Appellants by LMS Consulting as "Personal Touch
Home Care, Inc.’" e.g., CR 260-261, CR 247;
(e) Appellants made the personnel decisions with respect to the persons
LMS Consulting had referred Appellants to for employment in Texas;
CR 50 at ¶¶ 8-9, 13-14, 17; CR 248-56;
(f) Appellants paid—and decided when not to pay—LMS Consulting's
invoices for the Texas recruiting and staffing services it provided out of
an account managed and controlled by Appellants, CR 50 at ¶¶ 8-9, 13-
14, 17; CR 173 ¶ 4; App. 1, Balk Dep. 24:2-9;
(g) Appellants paid the employees and staff that were engaged as a result of
the LMS Consulting's recruitment and staffing services—and all other
Texas vendors and employees—through an account managed and
controlled by Appellants, CR 173 at ¶ 4; App. 1, Balk Dep. 22:4-11, CR
324-25 at ¶ 14;
(h) To the extent provided, Appellants provided the employment benefits
for all of the Texas operations' employees, including those referred by
LMS Consulting, CR 324 at ¶ 12, App. 1, Balk Dep. 19:19-20:22, 30:9-
13;
(i) Appellants handled the accounts receivable for the Texas operations,
which including managing the billing for the Texas clients and
receiving the payments for services provided to Texas clients, including
Brief of Appellee LMS Consulting LLC Page 28
those receiving services from LMS referred staff CR 173 at ¶ 4, App. 1,
Balk Dep. 21:10-25, 28: 15-21;
(j) Appellants' Bayside, New York, corporate office is the proper contact
address for the Texas locations and is also the official principal office
for PT San Antonio and PT Dallas;
(k) Dr. Balk, Vice President of Operations for all of the Personal Touch
Home Care Companies oversees the Texas operations. App. 1, Balk
Dep. 9:17-10:10, 30:1-5. She is one of a handful of executives who
control the "Personal Home Touch Inc." business out of Appellants'
corporate Bayside, New York office. See supra Note 9. Ms. De la
Rosa, the Texas regional administrator who signed the contracts on
behalf of "Personal Touch Home Care, Inc." reports to Dr. Balk, CR
233-35, 237-39, CR 49-53 at ¶ 6; and
(l) Appellants pay taxes as "Personal Touch Home Care, Inc." in Texas,
see CR 286.
Appellant fail to present any competent or credible evidence to negate these
assertions that they were doing business as "Personal Touch Home Care, Inc." in
Texas with Appellees.
The only evidence presented to negate the implied finding that they are
"Personal Touch Home Care, Inc." and that they performed pursuant to these
contracts is the conclusory testimony of Dr. Trudy Balk and the mea culpa plea of
"mistake." App. 1, Balk Dep. 16:22, CR 94 at ¶94; CR 322 at ¶ 6.
Until the issue was raised in this lawsuit, Appellants presented themselves to
Appellee and the world as a single business operated out of Bayside, New York
only referred to as "Personal Touch Home Care, Inc." CR 60-65; App. 1, Balk
Dep. 16:19-17:17. Dr. Balks' assertions that (1) Appellants are not parties to
Brief of Appellee LMS Consulting LLC Page 29
"Personal Touch Home Care, Inc." contracts; (2) that the "Personal Touch Home
Care, Inc." Texas offices are not theirs; and (3) that the Texas residents recruited
for employment with "Personal Touch Home Care, Inc.," are conclusory and not
competent evidence. See Watkins v. Isa, No. 04-11-00622-CV, 2012 WL 2021929
at *3 (Tex. App.—San Antonio June 6, 2012, no pet.) (mem. op.) (“By simply
stating ‘at the time of the accident, Isa was acting within the course and scope of
her employment with Texas Tech University Health Sciences Center,’ McMahon
asserts only a legal conclusion without factual basis or rationale. . . . Affidavit
testimony that is conclusory is substantively defective and amounts to no
evidence.") (citing Coastal Transport Co. v. Crown Cent. Petroleum Corp., 136
S.W.3d 227, 232 (Tex. 2004)).
Dr. Balk is also not a credible witness. Her sworn testimony is inconsistent
throughout. For example, on April 7, 2014, Dr. Balk verified interrogatory
responses identifying the Bayside, New York address as the official principal
office of PT San Antonio, PT Dallas, and PT Intermediate. CR 188-193 at
Interrogs. 2, 3. At her April 30, 2014 deposition, Dr. Balk testified that the
Bayside, New York address was the correct address for PT Intermediate for PT
San Antonio and PT Dallas. App. 1, Balk Dep. 10:11-13, 17:22-18:1. However,
on October 3, 2014 she testified by affidavit that while Appellants share these
offices, PT San Antonio and PT Dallas do not share those offices. CR 324 at ¶ 9.
Brief of Appellee LMS Consulting LLC Page 30
At her deposition on April 30, 2014, Dr. Balk initially testified that
Appellant PT Intermediate handled human resources matters, billing and invoicing,
and accounts payable for the Personal Touch Home Care Companies (which would
include the Texas operations) and also identified PT Intermediate as her employer.
App. 1, Balk Dep. 19:25-20:22, 24:16-20. She later corrected herself in her errata
sheet and identified Personal Touch Holding Corp. as the entity that performed
these functions. App. 1, Balk Dep. 19:25-20:22, 24:16-20, 30:9-15. On June 3,
2014, by affidavit she testified that Appellant PT Intermediate had no employees
and performed no functions for its subsidiaries, whatsoever, CR 94-95 at ¶¶ 5, 7.
However, her October 3, 2014 affidavit states that Personal Touch Holding Corp.
does not provide billing services to PT Dallas or PT San Antonio. CR 324 at ¶ 13.
Appellants fail to identify who controls the contracting for the "Personal
Touch Home Care, Inc." operations in Texas. At her deposition, Dr. Balk testified
that Ms. De la Rosa, regional administrator for Texas, did not have authority to
enter into contracts for "the company (though her testimony did imply that she was
the person with authority)." App. 1, Balk Dep. 12:11-18, 22-13:4, 12-18. And by
affidavit on October 3, 2014, Dr. Balk testified that Appellant Personal Touch
Holding Corp. does not approve contracts for the Texas operations, CR 324 at ¶ 10.
Thus, just as Appellants disclaim "Personal Touch Home Care Inc," there is no one
who is charged with entering into contracts for its Texas operations.
Brief of Appellee LMS Consulting LLC Page 31
Although Appellants may have challenged the allegation that they are and
have operated in Texas as "Personal Touch Home Care, Inc.," they have failed to
effectively negate the bases. Gutierrez, 100 S.W.3d at 273-74 ("While DT–
Cayman effectively challenged all bases of personal jurisdiction, we are not
persuaded that it negated all bases. . . . We decline to impose on a plaintiff in a
special appearance hearing the burden of proving the elements of liability, as
opposed to showing the cause of action arose from or related to the nonresident's
activities.").
B. Appellants Failed to Negate the Allegation That They Recruit
Employees in Texas and Contracted with Texas Residents
The long-arm statute extends specifically to include a non-resident who
"recruits Texas residents, directly or through an intermediary located in this state,
for employment inside or outside this state" and those who contract with Texas
residents when the contract, at least in part, calls for performance in Texas. See
Tex. Civ. Prac. & Rem. Code § 17.042 (1), (3) (emphasis added).
"Count 2" of Plaintiff's Second Amended Petition is entitled "Breach of
Contract (Recruiting Agreements)." CR 279 at ¶ 34-37. Appellee has pled that
Appellants engaged in the very recruiting activity set forth in the long-arm statute.
CR 279 at ¶¶ 35-36.
Brief of Appellee LMS Consulting LLC Page 32
Appellants failed to negate the Appellee's allegation that Appellants recruit
employees in Texas. As should be quite apparent from the recruiting contracts
that form the bases of LMS Consulting's claims, "Personal Touch Home Care,
Inc." has recruited and hired employees to work in Texas. CR 257, 260-61; 2 RR
28:12-30:5, 31:10-32:6.
The evidence reflects that Appellants controlled all the hiring decisions for
"Personal Touch Home Care, Inc." made with respect to LMS referrals. See CR
248, 250, 251, 253, 255 (emails reflecting Appellant control over hiring decisions);
CR 49-53 ¶¶ 3, 13 (LMS engaged by "Personal Touch Home Care, Inc." and told
that hiring decisions were made by corporate in New York); App. 1, Balk Dep.
12:11-18, 22-13:4, 12-18 (Texas regional administrator not authorized to entered
into contracts on behalf of "company").
The evidence further reflects that Appellants provided guidance with respect
to the recruiting, CR 51 at ¶ 10, CR 256, paid the salaries and benefits for the
employees working for the operations in Texas, CR 324-25 at ¶¶ 12, 14, CR 173 at
¶ 4, App. 1, Balk Dep. 19:19-20:22, 22:4-11, 30:9-13 and determined whether the
recruiter would be paid. CR 50-51 ¶¶ 6, 8, 14, 16-17.
Because Appellants failed to negate this basis for both specific and general
jurisdiction, the trial court's order should be affirmed.
Brief of Appellee LMS Consulting LLC Page 33
C. Appellants Failed to Negate that They Had Committed a Tort, In
Whole or In Part, In this Sate
The long-arm statute specifically allows exercise of personal jurisdiction as
to a non-resident who commits a tort in whole or in part in this state. Tex. Civ.
Prac. & Rem. Code § 17.042 (2). Appellee properly pled that Appellants
intentionally committed the tort of tortious interference with its existing contracts
in Texas. CR 280 at ¶ 41. Accordingly, Appellants had the burden to negate this
possible basis for jurisdiction with evidence.
Appellants failed to offer any evidence that they did not tortiously interfere
with Appellee's contracts as alleged. Thus, they have failed to satisfy their burden
to negate this potential basis for jurisdiction. See Touradji, 316 S.W.3d at 26.
D. Appellants Fail to Demonstrate that the Exercise of Jurisdiction
Does Not Comport with Traditional Notions of Fair Play and
Substantial Justice
Appellants have presented no evidence of any extraordinary burden imposed
by the exercise of jurisdiction in this case.
The assertion of personal jurisdiction must comport with
fair play and substantial justice. In this inquiry, it is
incumbent upon the defendant to present 'a compelling
case that the presence of some consideration would
render jurisdiction unreasonable.' . . . 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.
Brief of Appellee LMS Consulting LLC Page 34
Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d
223, 231 (Tex. 1991).
Appellants simply make the conclusory assertion belied by the evidence that
they have no operations or offices here. This is insufficient to satisfy their heavy
burden.
III. Alternatively, the Texas Contacts of PT Dallas and PT San Antonio
Should Be Attributed to Appellants Pursuant to Jurisdictional Veil
Piercing Doctrine
Alternatively, the Court may properly exercise both personal and general
jurisdiction by ascribing to Appellants the contacts of Defendants PT Dallas and
PT San Antonio.
"Personal jurisdiction may exist over a non-resident defendant if the
relationship between the foreign corporation and [its subsidiary] that does business
in Texas is one that would allow the court to impute the [subsidiary] corporation's
"doing business" to the [parent corporation]." BMC, 83 S.W.3d at 798.
To 'fuse' the parent company and its subsidiary for
jurisdictional purposes, the plaintiffs must prove the
parent controls the internal business operations and
affairs of the subsidiary. But the degree of control must
be greater than that normally associated with common
ownership and directorship; the evidence must show that
the two entities cease to be separate so that the corporate
fiction should be disregarded to prevent fraud or
injustice.
Id. at 799; see also PHC-Minden, LP, 235 S.W.3d at 174.
Brief of Appellee LMS Consulting LLC Page 35
"[V]eil piercing for purposes of liability ('substantive veil piercing') is
distinct from imputing one entity's contacts to another for jurisdictional purposes
('jurisdictional veil piercing')." PHC-Minden LP, 235 S.W.3d at 174; see also In re
Chinese-Manufactured Drywall Products Liab. Litig., 753 F.3d 521, 546 (5th Cir.
2014) ("This court has noted that 'the alter ego test for attribution of contacts, i.e.,
personal jurisdiction, is less stringent than that for liability.'") (quoting Stuart v.
Spademan, 772 F.2d 1185, 1198 n.2 (5th Cir. 1985)).
[C]ourts should determine whether the subsidiary is
"separate and distinct from its parent corporation for
personal jurisdiction purposes," taking into account the
amount of the subsidiary's stock owned by the parent
corporation, the existence of separate headquarters, the
observance of corporate formalities, and the degree of the
parent's control over the general policy and
administration of the subsidiary.
PHC-Minden, 235 S.W.3d at 174 (quoting 4A CHARLES ALAN WRIGHT & ARTHUR
R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1069.4).
"The operative question in a jurisdictional analysis is whether [the]
subsidiary corporations are mere 'divisions' or 'branches' of a larger whole, such
that the subsidiaries' contacts with Texas should be attributed to [the parent]." El
Puerto De Liverpool, S.A. De CV v. Servi Mundo Llantero S.A. De CV, 82 S.W.3d
622, 634 (Tex. App.—Corpus Christi 2002, pet. dism'd w.o.j.)
Brief of Appellee LMS Consulting LLC Page 36
When seeking to establish jurisdiction through veil piercing, the plaintiff
bears the burden of proof. E.g., Cappuccitti v. Gulf Indus. Prods., Inc., 222
S.W.3d 468, 482 (Tex. 2007).
All of the relevant facts and circumstances surrounding the operations of the
parent and subsidiary must be examined to determine whether two separate and
distinct corporate entities exist. Capital Tech. Info. Servs. Inc. v. Arias & Arias
Consultores, 240 S.W3d 741, 749 (Tex. App.—Dallas 2008, pet denied).
In this case, the Texas entities were so "fused" that even Dr. Balk—who has
been with the company for 28 years—gets confused with respect to who is doing
what and what hat she is purportedly wearing. App. 1, Balk Dep. 19:25-20:22,
24:16-20, 30:9-15; CR 322 at ¶ 2.
The record reflects extensive control by Appellants over the Texas
operations:
(a) The same officers and directors control Appellants and PT San Antonio
and PT Dallas, CR 191-92 at Interrogs. 5, 6; App.1, Balk Dep. 18:17-
19, 24:16-20; CR. 52 ¶ 17; CR 172 at ¶ 2; see also CR 57;
(b) Dr. Balk, Vice President of Operations for all of the Personal Touch
Home Care Companies, oversees the Texas operations out of
Appellants' corporate Bayside, New York office. Ms. De la Rosa, the
Texas regional administrator who signed the contracts on behalf of
"Personal Touch Home Care, Inc." reports to Dr. Balk, CR 322 at ¶ 2,
App. 1, Balk Dep. 10:4-10, CR 50 at ¶¶ 6, 8;
(c) PT Intermediate owns PT San Antonio and PT Dallas and Personal
Touch Holding Corp owns PT Intermediate, see e.g. Appellants' Br.
p. 7;
Brief of Appellee LMS Consulting LLC Page 37
(d) Appellants' Bayside, New York office is also the principal office for PT
San Antonio and PT Dallas and the proper contact for the Texas
operations of "Personal Touch Home Care, Inc.," CR 190-191 at
Interrogs. 2, 3; CR 324 at ¶ 11; CR 60-65; App. 1, Balk Dep. 17:22-
18:5.
(e) The evidence suggests that Appellants control the contracting for the
Texas operations, see App. 1, Balk Dep. 12:11-18, 22-13:4, 12-18;
(f) Appellants control personnel decisions, including decisions to engage
persons referred by LMS Consulting for employment in Texas; CR 52
at ¶ 13; CR 248-56;
(g) Appellants pay vendors for the Texas operations (including LMS
Consulting) from Appellants' New York account, CR 52 at ¶¶ 16-17;
CR 173 at ¶ 4; App. 1, Balk Dep. 24:2-9;
(h) Appellants pay payroll for the Texas operations (including payroll
Texas residents referred to Appellants for employment in Texas)
through Appellants' New York account, App. 1, Balk Dep. 22:4-11,
CR 324-25 at ¶ 14, CR 173 at ¶ 4.
(i) Appellants provide employee benefits for the Texas operations through
Appellants' New York account, including payment of Texas residents
employed for Texas operations, CR 324 at ¶ 12; App. 1, Balk Dep.
19:19-20:22, 30:9-13;
(j) Appellants manage accounts receivable and provide billing services for
the Texas operations, including billing for Personal Touch clients
receiving services from LMS-referred staff, CR 173 at ¶ 4, App. 1,
Balk. Dep. 21:10-25, 28:15-21; and
(k) Appellants pay taxes as "Personal Touch Home Care, Inc." in Texas,
CR 286.
Appellants raise a factual challenge to Appellee's allegations of control with
respect to (1) the allegation that Appellants handle the personnel decisions; and
Brief of Appellee LMS Consulting LLC Page 38
(2) the allegation that Appellants manage the contracts. However there is ample
evidence to support both such contentions. Testimony presented by Appellee and
the documentary evidence indeed reflects that Appellants were controlling the
recruitment and hiring or personnel for the Texas operations. CR
Appellants would have the court believe that just as no one is doing business
as "Personal Touch Home Care, Inc.," no one has authority to contract on behalf of
the Texas corporations. Dr. Balk specifically testified that Ms. De la Rosa, the
regional administrator for Texas who reports to Dr. Balk, did not have authority to
enter into the contracts with LMS and her testimony suggests the responsibility lies
with her. See App. 1, Balk Dep. 11:11-16, 12:22-13:18 ("Q: Was Ms. De la Rosa
authorized to execute agreements with LMS on behalf of the Personal Touch
Home Care Companies?" . . . Dr. Balk: "I mean, I was not aware of the
contracts."). However, she also testified that Appellants do not perform this
function. Appellants offer no affirmative testimony on who decides matters of
contract for the Texas operations.
Appellants also seem to take issue with the assertion that they provide
billing services. But this was testified to by Dr. Balk at deposition (though later
contradicted by affidavit).
Brief of Appellee LMS Consulting LLC Page 39
Appellants' main challenge on veil piercing is a legal sufficiency challenge;
they allege that even if the allegations of factual control asserted are true, it is not
sufficient to satisfy Appellee's burden to show atypical parental control.
However, appellants consider these items in isolation and as a group of
factors to consider in determining "whether the subsidiary is separate and distinct
from its parent corporation." PHC-Minden, 235 S.W.3d at 176. No one item is
determinative. While it may be the case that Texas court have decline to pierce the
veil when one of these items obtains, but other do not, that does not mean that all
of these control items taken together would not satisfy the test.
The Personal Touch Home Care Companies are not "separate and distinct
entities." Id. They do not act or represent themselves as separate and distinct
entities, and they did not do so with respect to their dealings with Appellee.
Instead, Appellants act as "Personal Touch Home Care, Inc.," a single organization
operating in 12 states. CR 60-65. They don't identify any separate or distinct
entities in their business dealings.
All of the factors listed in PHC-Minden counsel in favor of piercing the
jurisdictional corporate veil: PT San Antonio and PT Dallas are wholly-owned
subsidiaries of PT Intermediate, which is a wholly-owned subsidiary of Personal
Touch Holding Corp.; Appellants share corporate offices and have the same
officers and directors; and Appellants were heavily involved not only in the
Brief of Appellee LMS Consulting LLC Page 40
performance of the recruitment and staffing contracts at issue in this case, but also
in the policies and general affairs of the Texas subsidiaries. Cf. PHC-Minden,
235 S.W.3d at 174, 176 (holding atypical requirement not satisfied when the parent
had no involvement with the subsidiary's recruitment efforts; companies had
separate headquarters and did not share directors; and subsidiary established its
own budget, policies and procedures).
Considering collectively, the contacts of PT Dallas and PT San Antonio are
properly attributed to Appellants because they are not separate and distinct from
the parent organizations.
CONCLUSION
Appellants confuse the issues. “Personal Touch Home Care, Inc.” has no
veil to pierce. All three grounds of the Texas long-arm statute were properly pled
against Appellants with respect to their conduct directed Texas and performed
under the false name “Personal Touch Home Care, Inc.” Appellants failed to
satisfy their burden to negate all possible bases for jurisdiction. The trial court’s
denial of Appellants’ special appearances should therefore be affirmed.
PRAYER FOR RELIEF
Appellee LMS Consulting LLC respectfully asks this Court to affirm the
trial court's orders denying Appellants PT Intermediate Holding Inc. and Personal
Touch Holding Inc.'s special appearances below in all respects, and that the Court
grant it such other and further relief to which it may be entitled.
Brief of Appellee LMS Consulting LLC Page 41
Respectfully submitted,
TAYLOR DUNHAM AND RODRIGUEZ LLP
301 Congress Avenue, Suite 1050
Austin, TX 78701
512-473-2257
512-478-4409 (fax)
By: /S/Isabelle M. Antongiorgi
David E. Dunham
State Bar No. 06227700
ddunham@taylordunham.com
Jennifer Tatum Lee
State Bar No. 24046950
jtatum@taylordunham.com
Isabelle M. Antongiorgi
State Bar No. 24059386
ima@taylordunham.com
Counsel for Appellee LMS Consulting LLC
Brief of Appellee LMS Consulting LLC Page 42
CERTIFICATE OF SERVICE
On March 4, 2015, the undersigned certifies that she served a copy of this
Brief of Appellees on the following by e-service, in compliance with Texas Rules
of Appellate Procedure 9.5 and 25.1(e):
Monte James
mjames@jw.com
Kimberly Gdula
kgdula@jw.com
Josh Romero
jromero@jw.com
Jackson Walker LLP
100 Congress Avenue
Suite 1100
Austin, Texas 78701
Counsel for Appellants
/S/Isabelle M. Antongiorgi
Isabelle M. Antongiorgi
CERTIFICATE OF COMPLIANCE
The undersigned certifies that this brief complies with the word limitation
contained in Texas Rule of Appellate Procedure 9.4(i)(2)(B) in that the brief
contains a total of 9,151 words, excluding parts of the brief exempted by Tex. R.
App. P. 9.4(i)(1).
/S/Isabelle M. Antongiorgi
Isabelle M. Antongiorgi
Brief of Appellee LMS Consulting LLC Page 43
APPENDIX
Appendix 1 Deposition of Trudy Balk (CR 194-227; CR 146-149)
Appendix 2 Watkins v. Isa
Appendix 3 Ji-Haw v. Indus. Co. Ltd. v. Broquet
Brief of Appellee LMS Consulting LLC Page 44
APPENDIX 1
TAB TWO TO EXHIBIT A
TRUDY BALK 4/30/2014
1
1 CAUSE NO. 2014CI00450
2 LMS CONSULTING, LLC, ) IN THE DISTRICT COURT
Plaintiff )
3 )
)
4 VS. ) 45TH JUDICIAL DISTRICT
)
5 PT HOME SERVICES OF DALLAS,)
INC. d/b/a Personal-Touch )
6 Home Care, Inc., PT HOME )
SERVICES OF SAN ANTONIO, )
7 INC. d/b/a Personal-Touch )
Home Care, Inc., and )
8 PERSONAL-TOUCH HOME CARE )
OF NY, INC. f/k/a )
9 PERSONAL-TOUCH HOME CARE, )
INC., )
10 Defendants ) BEXAR COUNTY, TEXAS
11 ********************************************************
12 ORAL DEPOSITION OF
13 TRUDY BALK
14 APRIL 30, 2014
15 ********************************************************
16 ORAL DEPOSITION OF TRUDY BALK, produced as a
17 witness at the instance of the Plaintiff, and duly
18 sworn, was taken in the above-styled and numbered cause
19 on April 30, 2014, from 9:10 a.m. to 9:59 a.m., before
20 Christi Sanford, CSR in and for the State of Texas,
21 reported by machine shorthand, at the offices of Jackson
22 Walker, LLP, 100 Congress Avenue, Suite 1100, Austin,
23 Texas, pursuant to the Texas Rules of Civil Procedure
24 and the provisions stated on the record or attached
25 hereto.
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1 APPEARANCES
2
For the Plaintiff:
3
Mr. Alejandro Mora
4 Law Offices of Alejandro Mora, PLLC
7000 North Mopac Expressway, Suite 200
5 Austin, Texas 78731
(512) 514-6683
6 (888) 320-0589 Fax
alejandro@morahealthcarelaw.com
7
For the Defendants:
8
Mr. Monte F. James
9 Ms. Jenny L. Smith
Jackson Walker, LLP
10 100 Congress Avenue, Suite 1100
Austin, Texas 78701
11 (512) 236-2000
(512) 236-2002 Fax
12 mjames@jw.com
jlsmith@jw.com
13
14
15
16
17
18
19
20
21
22
23
24
25
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3
1 INDEX
PAGE
2
Appearances 2
3
WITNESS: TRUDY BALK
4
Examination by Mr. Mora 4
5 Examination by Mr. James 28
6 Signature and Changes 30
Reporter's Certificate 32
7
8 EXHIBITS
9 NUMBER DESCRIPTION PAGE
10 1 Plaintiff's Notice of Deposition of the
Corporate Representative of Personal-Touch
11 Home Care of NY, Inc. 4
2 NPI Registry Provider Details,
12 Personal-Touch Home Care of NY, Inc. 6
3 Affidavit of Trudy Balk, PhD 7
13 4 Printout from Web site www.pthomecare.com,
New York, Long Island and Westchester
14 Locations 14
5 Printout from Web site www.pthomecare.com,
15 Texas Locations 16
6 Check Number 253128 to LMS Consulting, LLC
16 from Personal-Touch Home Aides, 4/5/13 22
7 Check Number 633995 to LMS Recruiting and
17 Staffing from Personal Touch Holding Corp.,
2/4/13 24
18 8 Personal-Touch Home Care of New York, Inc.
Stock Certificate 25
19 9 PT Home Services of Dallas Stock
Certificate 26
20 10 PT Home Services of San Antonio Stock
Certificate 26
21 11 Personal-Touch Home Care Employee Stock
Ownership Plan, 2012 Form 5500 by
22 BrightScope 26
23
24
25
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1 TRUDY BALK,
2 having been first duly sworn, testified as follows:
3 EXAMINATION
4 BY MR. MORA:
5 Q. Ms. Balk, good morning. My name is Alejandro
6 Mora. I'm the attorney for LMS Consulting, LLC.
7 Would you please introduce yourself one
8 more time?
9 A. Yeah. My name is Trudy Balk.
10 Q. Okay. I'm going to be handing you what I'm
11 going to be marking as Plaintiff's Exhibit Number 1.
12 It's the Plaintiff's Notice of Deposition to the
13 Corporate Representative of Personal-Touch Home Care
14 of NY, Inc.
15 (Exhibit Number 1 was marked)
16 Q. Have you seen this document before?
17 A. Yes.
18 Q. Do you understand that you're appearing here as
19 the corporate representative of Personal-Touch New York,
20 Inc., and you understand that your responses are not
21 only on behalf of yourself, but also the answers of
22 Personal-Touch Home Care of New York, Inc.?
23 MR. JAMES: Objection, form.
24 A. Yeah. Personal-Touch Home Care of NY, I think.
25 Q. (BY MR. MORA) NY, Inc. Thank you.
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1 Can we agree that when I refer to
2 Personal-Touch New York that we are referring to
3 Personal-Touch Home Care of NY, Inc.?
4 A. Yes.
5 MR. JAMES: Objection, form. You said the
6 wrong name.
7 MR. MORA: Personal-Touch Home Care of NY,
8 Inc. My question was: Can we -- can we agree that when
9 I refer to Personal-Touch New York that we're referring
10 to Personal-Touch Home Care NY, Inc.?
11 MR. JAMES: Maybe I misheard, and I
12 apologize.
13 A. Yes. That is correct. Yeah.
14 Q. (BY MR. MORA) Can you please explain what
15 you've done to -- aside from meeting with your attorney,
16 what you've done to prepare for this deposition?
17 A. Just talked to my attorneys, really.
18 Q. Okay. Are there any documents that you've
19 reviewed?
20 A. Just the ones -- my affidavit and the -- yeah,
21 some of the other documents that went back and forth.
22 Q. Okay. What is the address of the principal
23 place of business for Personal-Touch New York?
24 A. Personal-Touch New York? It's 18618 Hillside
25 Avenue --
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1 Q. Okay.
2 A. -- in Jamaica, New York.
3 Q. How long has that address been its principal
4 place of business?
5 A. That's a good question. I mean, over ten
6 years.
7 Q. Okay. And where was the previous place of
8 business?
9 A. For Personal-Touch New York --
10 Q. Yes, ma'am.
11 A. -- that you're referring to?
12 We had offices in Flushing, New York,
13 before we moved here.
14 Q. Okay. Does Personal-Touch New York maintain a
15 mailing address at 22215 Northern Boulevard, Third
16 Floor, Bayside, New York 11361?
17 A. That is our corporate offices.
18 Q. Your corporate offices?
19 A. Correct.
20 (Exhibit Number 2 was marked)
21 Q. Okay. I'm going to hand you what's been marked
22 as Exhibit 2. And it's been pulled from the NPI
23 Registry Web site. Are you familiar with the -- what an
24 NPI number is?
25 A. Yes.
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1 Q. Do you know if the NPI listed here for
2 Personal-Touch Home Care of NY, Inc., is the correct NPI
3 number?
4 A. I have no idea without looking at a list.
5 Q. Okay. Do you know Lorigay Laskin?
6 A. Yes.
7 Q. And who is she?
8 A. She's our contract manager. She works for me.
9 Q. Okay.
10 A. And she handles the NPI numbers.
11 Q. She's responsible for NPI?
12 A. Uh-huh.
13 Q. Okay. And the mailing address there is correct
14 for Personal-Touch Home Care of NY, Inc.?
15 A. On the second page there 18618, that's the
16 correct address for Personal-Touch New York.
17 (Exhibit Number 3 was marked)
18 Q. Okay. I'm going to hand you what's been marked
19 as Exhibit 3. And this is the affidavit of Trudy Balk.
20 Have you seen this document before?
21 A. Yes.
22 Q. Would you please turn to page 3 of the exhibit.
23 A. Okay.
24 Q. Would you confirm that that is your signature?
25 A. Yes, it is.
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1 Q. And you understand that when you signed the
2 affidavit, you swore that the statements contained in
3 the affidavit were within your personal knowledge and
4 are true and correct?
5 A. Yes.
6 Q. Are all the statements within this affidavit
7 within your personal knowledge?
8 A. Yes.
9 Q. Are all the statements true and correct?
10 A. Yes.
11 Q. Are you the vice president of operations for
12 the Personal-Touch Home Care companies?
13 A. Yes, I am.
14 Q. Okay. What companies are encompassed within
15 the Personal-Touch Home Care companies?
16 A. Okay. I'll try to list them, but don't hold me
17 to it.
18 Q. Okay.
19 A. Personal-Touch Home Care of NY, Inc.,
20 Personal-Touch Home Aides of New York, Inc.,
21 Personal-Touch Home Care of Westchester, Inc.,
22 Personal-Touch Home Care of Long Island, Inc., PTS of
23 Westchester, Inc., Personal-Touch Home Care of PA, Inc.,
24 Personal-Touch Home Care of VA, Inc., Personal-Touch
25 Home Care of Baltimore, Inc., Personal-Touch Home Care
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1 of Ohio, Inc., Personal-Touch Home Care of Kentucky,
2 Inc., Personal-Touch Home Care of Indiana, Inc.,
3 Personal-Touch Home Care of Greater Portsmouth, Inc.,
4 Personal-Touch Home Care of MA, Massachusetts,
5 Personal-Touch Home Care of SE Mass, Southeast Mass,
6 Inc.
7 Q. Okay.
8 A. And Texas. I forgot Texas. How could I do
9 that? PT Home Services of San Antonio, Inc., and PT
10 Home Services of Dallas, Inc.
11 Q. Okay. Are you the vice president of operations
12 for PT Home Services of Dallas, Inc.?
13 A. Yes.
14 Q. And are you the vice president of operations
15 for PT Home Services of San Antonio, Inc.?
16 A. Yes.
17 Q. Okay. From which of those entities do you
18 receive compensation as an employee?
19 A. I don't receive compensation from either one of
20 them.
21 Q. I'm sorry. From any of the Personal-Touch Home
22 Care companies that you referred to.
23 A. I receive my compensation from a parent
24 company.
25 Q. Okay. And who is the parent company?
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1 A. PT Intermediate Holding.
2 Q. Okay. And what services do you provide in
3 return for that compensation?
4 A. I supervise most of the offices directly. Some
5 of them report directly to someone else. But,
6 basically, I oversee the operations in terms of
7 regulatory changes, clinical -- I don't do this all
8 myself, but obviously have people that do it with me --
9 you know, clinical changes, financial changes that have
10 to be made, personnel for sure.
11 Q. Okay. What is the address of the principal
12 place of business for PT Intermediate Holding?
13 A. 22215 Northern Boulevard, Bayside, New York.
14 Q. Are you familiar with LMS Consulting, LLC?
15 A. Yes.
16 Q. Okay. Did any of the companies within the
17 Personal-Touch Home Care companies enter into any
18 staffing agreements with LMS Consulting, LLC?
19 A. Just the top -- the Texas offices.
20 Q. Could you be more specific?
21 A. Okay. PT Home Services of Dallas, PT Home
22 Services of San Antonio, and I believe a couple of the
23 branches of San Antonio, Weslaco and El Paso.
24 Q. Okay. Did any company within the
25 Personal-Touch Home Care companies enter into any
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1 recruitment agreement with LMS Consulting, LLC?
2 A. Yes. The same -- same entities.
3 Q. Okay. As the vice president of operations for
4 the Personal-Touch Home Care companies, did you approve
5 these agreements with LMS before Personal-Touch
6 companies entered into them?
7 A. No, I didn't.
8 Q. Did you read the agreements before they were
9 executed?
10 A. No, I didn't.
11 Q. Do you know Ms. Elizabeth DeLaRosa?
12 A. Yes.
13 Q. What is -- who is she and what is her role
14 within the Personal-Touch Home Care companies?
15 A. She's a regional administrator for the Texas
16 offices.
17 Q. Was she authorized to execute agreements with
18 LMS Consulting, LLC?
19 MR. JAMES: Objection, form.
20 Q. (BY MR. MORA) What was her -- what was her
21 role in entering into agreements with LMS Consulting,
22 LLC?
23 MR. JAMES: Objection, form. You know,
24 I'm having trouble -- you're not -- you're not
25 misstating anything, but I'm having trouble keeping up.
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1 You go so fast. I'm trying to keep up with it in my
2 mind. If you could slow down just a tad.
3 MR. MORA: Sure.
4 MR. JAMES: I don't mean to tell you how
5 to do it at all. I'm not trying to do that. But I'm
6 having trouble following -- you're using acronyms and
7 I'm having trouble keeping up with it, to make sure that
8 I get objections in.
9 MR. MORA: Sure. We can slow it down.
10 What I'll do is I'll refer to every entity fully.
11 MR. JAMES: Well, you don't have to do
12 that. That's not -- I'm not trying to make it
13 difficult. I literally am just having trouble keeping
14 up with you.
15 MR. MORA: Okay.
16 MR. JAMES: And I'm trying to listen and
17 type. I probably should quit typing and just listen.
18 MR. MORA: Okay.
19 MR. JAMES: Do you mind repeating that
20 one?
21 MR. MORA: That's not a problem.
22 Q. (BY MR. MORA) Was Ms. DeLaRosa authorized to
23 execute agreements with LMS on behalf of the
24 Personal-Touch Home Care companies?
25 MR. JAMES: Objection, form.
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1 A. I mean, I was not aware of the contracts.
2 Q. (BY MR. MORA) Okay. What is Ms. DeLaRosa's
3 authority in entering into agreements on behalf of
4 Personal-Touch?
5 MR. JAMES: Objection, form.
6 A. Say it again.
7 MR. JAMES: And I -- you know, and I won't
8 keep making speaking deals. I don't -- I don't do that.
9 But when you say Personal-Touch, that's why my
10 objection's out there. What company are you talking
11 about?
12 Q. (BY MR. MORA) What is Ms. DeLaRosa's -- was
13 she authorized to execute agreements on behalf of
14 Personal-Touch of San Antonio, Inc.?
15 A. She has a lot of autonomy, but she was -- she
16 is not authorized to sign legal agreements on --
17 Q. Okay.
18 A. -- behalf of the company.
19 Q. Do the Texas Personal-Touch entities that are
20 under your operational control go by the name of
21 Personal-Touch Home Care, Inc.?
22 A. No.
23 Q. Okay. Does Personal-Touch New York go by the
24 name of Personal-Touch Home Care, Inc.?
25 A. It did until a certain point, at which it was
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1 changed to Personal-Touch Home Care of NY, Inc.
2 Q. Okay. When did it change its name?
3 A. Oh, boy. I think the beginning of the '90s.
4 Q. Okay.
5 A. Like 1992, something like that.
6 Q. Were you the operations officer at that time?
7 A. Yes.
8 Q. Okay. And do you know why it changed its name
9 at that time?
10 A. I don't.
11 Q. Okay. Are you familiar with the Web site
12 address www.pthomecare.com?
13 A. Yes.
14 Q. And what Personal-Touch companies under your
15 operational control uses that Web site address?
16 MR. JAMES: Objection, form.
17 A. I'm not sure what you mean.
18 Q. (BY MR. MORA) Which Personal-Touch Home Care
19 companies use this Web site?
20 A. All of the Personal-Touch Home Care offices.
21 (Exhibit Number 4 was marked)
22 Q. Okay. I'm going to hand you what's been marked
23 as Exhibit 4. And this is a printout from the Web site
24 www.pthomecare.com.
25 A. Right.
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1 Q. Do you recognize this Web page as belonging --
2 A. Yes.
3 Q. -- as a Web site belonging to the
4 Personal-Touch Home Care companies?
5 A. Yes.
6 Q. Does this Exhibit 4 accurately reflect the
7 locations of the Personal-Touch Home Care companies in
8 New York?
9 MR. JAMES: Objection, form.
10 A. The addresses?
11 Q. (BY MR. MORA) Yes, ma'am. The locations.
12 A. The locations?
13 MR. JAMES: Objection, form.
14 Q. (BY MR. MORA) Does this represent the correct
15 address of the New York locations for Personal-Touch
16 Home Care companies?
17 MR. JAMES: Objection, form.
18 A. Yes. These are the addresses.
19 Q. (BY MR. MORA) Okay. Do the Personal-Touch
20 companies do business in New York as Personal-Touch Home
21 Care, Inc.?
22 A. No.
23 Q. If not, is there a mistake on this Web page?
24 A. Absolutely.
25 Q. Okay. And as the operations officer, would
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1 you be in charge of seeing that such a mistake was
2 remedied?
3 A. Yes.
4 Q. Okay. And that has not been done?
5 A. Yes, it has been.
6 Q. It has been corrected?
7 A. Yes.
8 Q. When was that corrected?
9 A. When we realized this a couple weeks ago, I
10 suppose.
11 Q. Okay.
12 A. A month ago.
13 Q. So until then, the Web site for the
14 Personal-Touch Home Care company is listed as doing
15 business in New York as Personal-Touch Home Care, Inc.,
16 correct?
17 A. Correct.
18 (Exhibit Number 5 was marked)
19 Q. I'm going to hand you what's been marked as
20 Exhibit 5. This is a printout from the Web page -- from
21 the Web site www.pthomecare.com. Do you recognize this
22 Web page as being from the Web site belonging to the
23 Personal-Touch Home Care companies?
24 MR. JAMES: Objection, form.
25 A. I'm not sure. I'd have to see. I don't
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1 remember exactly.
2 Q. (BY MR. MORA) Okay. Does this -- does this
3 Exhibit 5 accurately reflect the addresses of the
4 Texas locations for the Personal-Touch Home Care
5 companies?
6 MR. JAMES: Objection, form.
7 MR. MORA: Would you please clarify your
8 objection?
9 MR. JAMES: When you say Personal-Touch
10 Home Care companies, that's ambiguous.
11 MR. MORA: Okay. I'll restate it.
12 MR. JAMES: I'm looking for specific
13 entities.
14 MR. MORA: Okay.
15 Q. (BY MR. MORA) Does this Exhibit 5 accurately
16 reflect the locations of the -- business locations for
17 Personal-Touch of Dallas, Inc., and Personal-Touch of
18 San Antonio, Inc.?
19 MR. JAMES: Objection, form.
20 A. Yes. That is the address of the San Antonio
21 office and that is the address of the Dallas office.
22 Q. (BY MR. MORA) This page also lists the Texas
23 location contact address as 222-15 in Bayside, New York.
24 That's on the second page of Exhibit 5. Is that the
25 correct contact address?
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1 A. Yes. That's the corporate office.
2 Q. And this Web page shows that the name of each
3 of the Texas locations is Personal-Touch Home Care,
4 Inc., correct?
5 A. Yes. As we said, it was a mistake.
6 Q. Okay. And that has been corrected as well?
7 A. Yes, it has been.
8 Q. Okay. I'd like to turn to PT Intermediate
9 Holding.
10 A. Okay.
11 Q. What is the primary business of PT Intermediate
12 Holding?
13 A. It is the parent company to all the others.
14 Q. Okay. How long has it been the parent company?
15 A. Since 2010 or 2011. I'm not -- when we formed
16 in east side, when the company formed in East Side.
17 Q. Who are the directors of PT Intermediate
18 Holding?
19 A. Robert Marx and Dr. Glaubach.
20 Q. Are you, Trudy Balk, an officer or director of
21 PT Intermediate Holding, Inc.?
22 A. An officer.
23 Q. And who are the owners of PT Intermediate
24 Holding, Inc.?
25 A. It's owned by Personal-Touch Holding Company,
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1 which is all the companies.
2 Q. Are you the vice president of operations for
3 PT Intermediate Holding, Inc.?
4 MR. JAMES: Objection, form.
5 A. I'm confused by that question. Explain what
6 you mean.
7 Q. (BY MR. MORA) Are you the vice president of
8 operations for the PT Intermediate Holding, Inc.,
9 entity?
10 MR. JAMES: I'm sorry. Objection, form.
11 A. I'm a vice president of operations for the
12 entities.
13 Q. (BY MR. MORA) Okay. Who are the officers of
14 Personal-Touch Home Care of NY, Inc.?
15 A. Dr. Glaubach and Mr. Marx.
16 Q. Okay. And who are the directors for
17 Personal-Touch Home Care NY, Inc.?
18 A. The same two people.
19 Q. Okay. Does Personal-Touch of Dallas, Inc.,
20 provide any employee benefits, health insurance,
21 et cetera, to its employees?
22 A. Do we -- yes. As a company, we provide health
23 benefits to all our employees.
24 Q. Okay. And who provides -- who provides those
25 benefits? Is it Personal-Touch of Dallas, Inc.?
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1 A. What do you mean, provides?
2 Q. Who is -- which entity is responsible for
3 paying those -- paying those benefits?
4 MR. JAMES: Objection, form.
5 A. Obviously, the insurance is handled by the
6 corporate office, which insurance, the rates,
7 negotiating the contracts and so forth and so on, but it
8 is paid for by each of the entities.
9 Q. (BY MR. MORA) Okay. And would you please
10 clarify when you refer to the corporate office?
11 A. I'm talking about the parent office, parent
12 company.
13 Q. But the entity, please?
14 A. PT Intermediate Holding.
15 Q. Okay. Thank you.
16 How about retirement accounts for
17 Personal-Touch of Dallas, Inc., and Personal-Touch of
18 San Antonio, Inc., are those provided by PT Intermediate
19 Holding?
20 A. We don't have any.
21 Q. Any retirement benefits for employees?
22 A. No, we don't.
23 Q. Okay. Who handles the marketing for all the
24 Personal-Touch Home Care companies?
25 MR. JAMES: Objection, form.
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1 Q. (BY MR. MORA) Is PT Intermediate Holding
2 responsible for marketing?
3 A. No. Each of the entities is responsible for
4 marketing.
5 Q. Okay.
6 A. Let me clarify that. Obviously, there can be
7 input from the parent company, but each of them is
8 responsible for how they want to market and what they
9 market.
10 Q. Okay. As far as billing for the Texas
11 entities, both Personal-Touch of Dallas, Inc., and
12 Personal-Touch of San Antonio, Inc., who is responsible
13 for billing for those entities?
14 A. Billing meaning what? Billing for what?
15 Q. Billing for the services provided by those
16 entities.
17 A. Who is responsible for?
18 Q. For the billing and the services that are
19 provided by each of those entities.
20 A. Are you talking about payroll?
21 Q. No. I was going to ask about payroll as well,
22 but actually billing for the services that those
23 entities provide, the home health services, the --
24 A. Right. They bill it. The individual offices
25 bill it with oversight from the parent.
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1 Q. Okay. And is each individual office also
2 responsible for that office's payroll obligations?
3 A. They input all the payroll, yes.
4 Q. Okay. And are those checks then paid by those
5 entities as well?
6 A. They're paid by the holding company, but, you
7 know, obviously -- I'm forgetting the word, but
8 attributed to each of the companies.
9 Q. Okay.
10 A. It comes from one pot, but then it's, you
11 know --
12 MR. JAMES: Objection, nonresponsive.
13 Q. (BY MR. MORA) Have you heard of Personal-Touch
14 Home Aides?
15 A. Yes.
16 Q. Can you identify this company for us, its
17 correct legal name?
18 A. There is -- Personal-Touch Home Aides of
19 New York is our Brooklyn location.
20 (Exhibit Number 6 was marked)
21 Q. Okay. I'm handing you what's been marked as
22 Exhibit 6. This appears to be a check from
23 Personal-Touch Home Aides to LMS Consulting, LLC. Have
24 you seen this document?
25 A. Yes.
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1 Q. And do you know where this document came from?
2 A. From payroll, I suppose. Accounts payable.
3 Q. Okay. Does Personal-Touch Home Aides do
4 business under a different name?
5 A. Does who?
6 Q. I'm sorry. Does Personal-Touch Home Aides do
7 business under a different name?
8 A. No.
9 Q. Does Personal-Touch Home Aides have a contract
10 with LMS Consulting, LLC?
11 A. No.
12 Q. Does Personal-Touch Home Aides share an address
13 with Personal-Touch of NY, Inc.?
14 A. No.
15 Q. And do you perform any services for
16 Personal-Touch Home Aides?
17 A. Do what?
18 Q. Do you perform any services for Personal-Touch
19 Home Aides?
20 A. Meaning you or who?
21 Q. I'm sorry. You, as Trudy Balk, do you perform
22 any services for them?
23 A. For who?
24 Q. For Personal-Touch Home Aides, for this entity.
25 A. No.
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1 (Exhibit Number 7 was marked)
2 Q. I'm handing you what's been marked as Exhibit
3 Number 7, which appears to be a check from
4 Personal-Touch Holding Corp. to LMS Consulting, LLC.
5 Have you ever seen this document before?
6 A. Yes.
7 Q. And do you -- do you know where this document
8 came from?
9 A. From AP. It's a payment, yeah.
10 Q. Okay. And does Personal-Touch Holding Corp. do
11 business under a different name?
12 A. No.
13 Q. Okay. And does Personal-Touch Holding Corp.
14 have a contract with LMS Consulting, LLC?
15 A. No.
16 Q. Okay. Do you provide any services for
17 Personal-Touch Holding Corp.?
18 A. Do I personally?
19 Q. Yes, ma'am.
20 A. It's a holding corp. I work for the parent.
21 Q. Okay. Has Personal-Touch of NY, Inc., ever
22 been a plaintiff or defendant in a lawsuit?
23 MR. JAMES: Which entity?
24 A. Which entity?
25 Q. (BY MR. MORA) Personal-Touch of NY, Inc.
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1 A. Personal-Touch Home Care of --
2 Q. Of NY, Inc.
3 A. Not to my recollection.
4 (Exhibit Number 8 was marked)
5 Q. Okay. I'm handing you what's been marked as
6 Exhibit Number 8. It appears to be a stock certificate
7 of Personal-Touch Home Care of New York, Inc. Have you
8 ever seen this document before?
9 A. Yeah. Yes.
10 Q. Who owns the remainder of the authorized
11 shares?
12 MR. JAMES: Objection, form.
13 Q. (BY MR. MORA) The stock certificate says that
14 PT Intermediate Holding, Inc., is the owner of 40 shares
15 of Personal-Touch Home Care New York, Inc. What entity
16 holds -- is there any entity that holds any other shares
17 in Personal-Touch Home Care of New York, Inc.?
18 A. I actually do not know.
19 Q. Okay. Can you identify the -- on the bottom
20 left of the exhibit, there's a signature of the
21 secretary. Can you please identify the signature there?
22 A. Robert Marx.
23 Q. And on the bottom right-hand side, it says that
24 it's the signature of the president. Can you identify
25 the signature there?
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1 A. Dr. Felix Glaubach.
2 (Exhibit Number 9 was marked)
3 Q. I'm handing you what's been marked as Exhibit
4 Number 9, which appears to be a stock certificate of PT
5 Home Services of Dallas, Inc. Can you identify the
6 signature on the bottom left-hand corner for the
7 secretary?
8 A. Robert Marx.
9 Q. Okay. And would you please identify the
10 signature on the bottom right as the president?
11 A. Dr. Felix Glaubach.
12 (Exhibit Number 10 was marked)
13 Q. Okay. I'm handing you what's been marked as
14 Exhibit Number 10, which appears to be a stock
15 certificate of PT Home Services of San Antonio, Inc. Do
16 you recognize this document?
17 A. Yes.
18 Q. Would you please identify the signature of the
19 secretary on the bottom left hand of the exhibit?
20 A. Robert Marx.
21 Q. And would you please identify the signature on
22 the bottom right?
23 A. Dr. Felix Glaubach.
24 (Exhibit Number 11 was marked)
25 Q. I'm handing you what's been marked as Exhibit
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1 Number 11. With regards to Personal-Touch Holding
2 Corp., does Personal-Touch Holding Corp. administer an
3 employee stock ownership plan for the Personal-Touch
4 companies?
5 MR. JAMES: Objection, form.
6 A. That's legal stuff. I'm not sure who
7 administers it.
8 Q. (BY MR. MORA) Okay. Do you know who Anthony
9 Castiglione is?
10 A. Yes.
11 Q. Okay. And who is he?
12 A. He's a controller in the corporate office in
13 the parent company.
14 Q. Okay. And are you familiar with Personal-Touch
15 Home Care IPA, Inc.?
16 A. Yes.
17 Q. And who are they?
18 A. That is a new entity that is in formation,
19 basically, for business that is managed care business
20 that's being organized in New York state.
21 MR. MORA: Okay. I have no further
22 questions.
23 MR. JAMES: Okay. Let's take a quick
24 break. Is that okay?
25 MR. MORA: Sure.
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1 (Recess from 9:43 to 9:58)
2 EXAMINATION
3 BY MR. JAMES:
4 Q. Dr. Balk, earlier he asked you a question about
5 who bills for the services provided by the Dallas and
6 the San Antonio entities. Do you remember that
7 question?
8 A. Yes, I do.
9 Q. Okay. And if I remember correctly -- I was
10 trying to write while everyone was talking, but I think
11 you said the holding company did so. Which holding
12 company were you referring to when you said that a
13 holding company provided billing services for those
14 entities?
15 A. PT Intermediate Holding, Inc.
16 Q. Okay. All right. Now, does PT Intermediate
17 Holding, Inc., in fact, provide billing services for the
18 Dallas and San Antonio entities?
19 A. Yes. The billing is done by the entity itself
20 and then it comes to corporate where the files are
21 disbursed to the right --
22 Q. Who does the actual billing for the Dallas
23 entity, for example?
24 A. In the office. It is done locally.
25 Q. By the Dallas entity?
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1 A. By the Dallas entity.
2 Q. And who does the billing for the San Antonio
3 entity?
4 A. Also by the San Antonio entity.
5 Q. Okay. He asked you if you, Dr. Balk, provided
6 any services for Personal-Touch Holding Corp., and I
7 think that you said that you did not. Do you provide
8 any services for Personal-Touch Holding Corp.?
9 A. I'm the vice president of operations.
10 MR. JAMES: Okay. All right. I'll pass.
11 MR. MORA: No further questions.
12 MR. JAMES: Okay. Thank you very much.
13 MR. MORA: Thank you for your time.
14 THE REPORTER: How would you like to
15 handle signature?
16 MR. JAMES: Send it to me, please.
17 (Proceedings concluded at 9:59 a.m.)
18
19
20
21
22
23
24
25
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1 CHANGES AND SIGNATURE
2 WITNESS NAME: TRUDY BALK DATE: APRIL 30, 2014
3 PAGE LINE CHANGE REASON
4 ________________________________________________________
5 ________________________________________________________
6 ________________________________________________________
7 ________________________________________________________
8 ________________________________________________________
9 ________________________________________________________
10 ________________________________________________________
11 ________________________________________________________
12 ________________________________________________________
13 ________________________________________________________
14 ________________________________________________________
15 ________________________________________________________
16 ________________________________________________________
17 ________________________________________________________
18 ________________________________________________________
19 ________________________________________________________
20 ________________________________________________________
21 ________________________________________________________
22 ________________________________________________________
23 ________________________________________________________
24 ________________________________________________________
25 Signature: _________________________ Date: _____________
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1 I, TRUDY BALK, have read the foregoing deposition
2 and hereby affix my signature that same is true and
3 correct, except as noted above.
4
5 _______________________________
TRUDY BALK
6
7 THE STATE OF ______________)
8 COUNTY OF ______________)
9
10 Before me ___________________ on this day personally
11 appeared TRUDY BALK, known to me (or proved to me under
12 the oath or through ___________________) (description of
13 identity card or other document) to be the person whose
14 name is subscribed to the foregoing instrument and
15 acknowledged to me that they executed the same for the
16 purposes and consideration therein expressed.
17 Given under my hand and seal of office this ______
18 day of _____________________, ________.
19
20 _______________________________
NOTARY PUBLIC IN AND FOR
21
THE STATE OF __________________
22
COMMISSION EXPIRES: ___________
23
24
25
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1 CAUSE NO. 2014CI00450
2 LMS CONSULTING, LLC, ) IN THE DISTRICT COURT
Plaintiff )
3 )
)
4 VS. ) 45TH JUDICIAL DISTRICT
)
5 PT HOME SERVICES OF DALLAS,)
INC. d/b/a Personal-Touch )
6 Home Care, Inc., PT HOME )
SERVICES OF SAN ANTONIO, )
7 INC. d/b/a Personal-Touch )
Home Care, Inc., and )
8 PERSONAL-TOUCH HOME CARE )
OF NY, INC. f/k/a )
9 PERSONAL-TOUCH HOME CARE, )
INC., )
10 Defendants ) BEXAR COUNTY, TEXAS
11 ********************************************************
12 REPORTER'S CERTIFICATION
13 DEPOSITION OF TRUDY BALK
14 APRIL 30, 2014
15 ********************************************************
16 I, Christi Sanford, CSR, RPR, CRR, Certified
17 Shorthand Reporter in and for the state of Texas, hereby
18 certify to the following:
19 That the witness, TRUDY BALK, was duly sworn by the
20 officer and that the transcript of the oral deposition
21 is a true record of the testimony given by the witness;
22 That the deposition transcript/errata sheet was
23 submitted on ______________________ to the witness or to
24 the attorney for the witness for examination, signature
25 and return to the officer by ________________________;
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1 That the amount of time used by each party at the
2 deposition is as follows:
3 Mr. Alejandro Mora: 33 minutes
Mr. Monte F. James: 1 minute
4
5 That pursuant to information given to the deposition
6 officer at the time said testimony was taken, the
7 following includes all parties of record:
8 Mr. Alejandro Mora, Attorney for Plaintiff
Mr. Monte F. James, Attorney for Defendants
9
10 I further certify that I am neither counsel for,
11 related to, nor employed by any of the parties in the
12 action in which this proceeding was taken, and further
13 that I am not financially or otherwise interested in the
14 outcome of the action.
15 Further certification requirements pursuant to
16 Rule 203 of TRCP will be certified to after they have
17 occurred.
18 Certified to by me this 12th day of May, 2014.
19
20 ____________________________________
Christi Sanford, CSR, CRR, RPR
21 Texas Certification No. 6720
Certification Expires 12/31/15
22
Firm Registration No. 105
23 JANIS ROGERS & ASSOCIATES
1545 W. Mockingbird Lane, Suite 1032
24 Dallas, Texas 75235
(214) 631-2655
25
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1 FURTHER CERTIFICATION UNDER RULE 203 TRCP
2 DEPOSITION OF TRUDY BALK
3 APRIL 30, 2014
4 The original deposition was/was not returned to the
5 deposition officer signed/unsigned on ________________;
6 If returned, the attached Changes and Signature page
7 contains any changes and the reasons therefor;
8 If returned, the original deposition was delivered
9 to Mr. Alejandro Mora, Custodial Attorney;
10 That $_______ is the deposition officer's charges to
11 Plaintiff(s) for preparing the original deposition
12 transcript and any copies of exhibits;
13 That the deposition was delivered in accordance with
14 Rule 203.3, and that a copy of this certificate was
15 served on all parties shown herein on ____________, and
16 filed with the Clerk.
17 Certified to by me this ______ day of ____________,
18 2014.
19
20 ____________________________________
Christi Sanford, CSR, CRR, RPR
21 Texas Certification No. 6720
Certification Expires: 12/31/15
22
Firm Registration No. 105
23 JANIS ROGERS & ASSOCIATES
1545 W. Mockingbird Lane, Suite 1032
24 Dallas, Texas 75235
(214) 631-2655
25
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146
147
148
149
APPENDIX 2
Watkins v. Isa, Not Reported in S.W.3d (2012)
2012 WL 2021929
The automobile accident giving rise to the underlying
2012 WL 2021929 lawsuit occurred on August 5, 2009. Lynda Watkins
Only the Westlaw citation is currently available. timely filed her lawsuit against Isa alleging she was
negligent in the operation of her motor vehicle causing
SEE TX R RAP RULE 47.2 FOR DESIGNATION Watkins’s injuries. Isa moved for dismissal of the suit
AND SIGNING OF OPINIONS. against her asserting that at the time of the accident she
was driving in the course and scope of her employment as
MEMORANDUM OPINION a medical resident for the Texas Tech University Health
Court of Appeals of Texas, Sciences Center, a governmental unit. SeeTEX. CIV.
San Antonio. PRAC. & REM.CODE ANN. § 101.106(f) (West 2011).
Isa filed two affidavits in support of her motion to
Lynda J. WATKINS, Appellant dismiss—the affidavit of Gena Jones1 and the affidavit of
v. Dr. Terry McMahon.2 Watkins objected to both affidavits
Ohunene Ameena ISA, Appellee. as conclusory. Watkins did not amend her pleading to sue
only Texas Tech University Health Sciences Center, but
No. 04–11–00622–CV. | June 6, 2012. continued her suit against Isa only. The trial court
conducted a hearing on Isa’s motion to dismiss. The court
denied Watkins’s objections to the affidavits filed in
From the 407th Judicial District Court, Bexar County,
support of Isa’s motion and granted Isa’s motion to
Texas, Trial Court No. 2010–CI–11208, Olin B. Strauss,
dismiss her from the suit. This appeal followed. On
Judge Presiding.
appeal, Watkins contends that the trial court erred in (1)
Attorneys and Law Firms denying Watkins’s objections to the affidavit testimony
filed in support of Isa’s motion because the affidavits are
Oscar L. Cantu Jr., Law Offices of Oscar Cantu, San conclusory, self-serving, and fail to give any foundation
Antonio, TX, for Appellant. to support the conclusions of fact and law made therein,
and (2) granting Isa’s motion to dismiss because Isa was
Dan Vana, Cathrin J. Martinez, Benjamin, Vana, Martinez not sued within the general scope of her employment with
& Biggs, L.L.P, San Antonio, TX, for Appellee. a governmental entity.
Sitting: KAREN ANGELINI, Justice, SANDEE BRYAN
MARION, Justice, PHYLIS J. SPEEDLIN, Justice.
APPLICABLE LAW AND BURDEN
Section 101.106 of the Tort Claims Act, entitled “Election
of Remedies,” contains six subsections, (a) through (f),
MEMORANDUM OPINION dealing with grants of immunity and procedural
requirements for suits seeking to recover from a
governmental unit, its employee, or both. TEX. CIV.
Opinion by PHYLIS J. SPEEDLIN, Justice. PRAC. & REM.CODE ANN. § 101.106(a)-(f) (West
2011).Subsection (f) of section 101.106 applies when an
*1 The sole issue in this appeal is whether the trial court individual employee of a governmental entity is sued in
erred in granting Dr. Ohunene Isa’s motion to dismiss his official capacity and seeks dismissal based on official
under the election of remedies provision of the Texas Tort immunity. Id. at § 101.106(f). Subsection (f) provides,
Claims Act. Because we hold Isa did not prove she was
acting within the scope of her employment at the time of
If a suit is filed against an
the automobile accident at issue, we reverse the trial
employee of a governmental unit
court’s judgment.
based on conduct within the
general scope of that employee’s
employment and if it could have
been brought under this chapter
BACKGROUND against the governmental unit, the
suit is considered to be against the
employee in the employee’s official
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Watkins v. Isa, Not Reported in S.W.3d (2012)
2012 WL 2021929
capacity only. On the employee’s (Tex.2004). We review matters of statutory construction
motion, the suit against the de novo. City of Rockwall v. Hughes, 246 S.W.3d 621,
employee shall be dismissed unless 625 (Tex.2008).
the plaintiff files amended
pleadings dismissing the employee
and naming the governmental unit
as defendant on or before the 30th
day after the date the motion is DISCUSSION
filed.
Dr. Terry McMahon, Chairman of the Department of
Psychiatry for Texas Tech University Health Sciences
*2 Id. Based on the plain language of the statute, it is the
Center, testified by affidavit that Isa was acting in the
governmental employee’s burden to seek dismissal under
course and scope of her employment at the time of the
section 101.106(f).Id. Thus, as the moving party, it is the
automobile accident. His affidavit reads in relevant part as
employee’s burden to present evidence establishing (1)
follows:
that the suit is based on conduct within the general scope
of the employee’s employment and (2) that the suit could
have been brought under the Texas Tort Claims Act During August of 2009, Dr.
against the governmental unit. Id.;Franka v. Velasquez, Ohunene Ameena Isa was in San
332 S.W.3d 367, 381 (Tex.2011). Actually, the first prong Antonio as a part of her residency
of the above test encompasses two inquires—whether the training with Texas Tech
individual defendant was an employee of a governmental University Health Sciences Center.
unit and whether she was acting in the scope of that At the time of the accident on
employment at the relevant time. Turner v. Zellers, 232 August 5, 2009, Dr. Ohunene
S.W.3d 414, 417 Tex.App.-Dallas 2007, no pet.), Ameena Isa was acting within the
disapproved on other grounds byFranka, 332 S.W.3d at course and scope of her
382 n. 67. employment with Texas Tech
University Health Sciences Center.
In the instant case, the parties do not dispute that Texas
Tech University Health Sciences Center is a Watkins filed written objections to McMahon’s affidavit3
governmental entity, that Isa was an employee of that and argued during the hearing that the affidavit should be
governmental entity on the day of the accident, or that the disregarded because it failed to state facts to support the
suit could have been brought under the Texas Tort Claims legal conclusion that Isa was acting within the course and
Act against the governmental entity. They do dispute, scope of her employment with a governmental entity at
however, whether Isa was acting within the general scope the time of the accident. The trial court denied Watkins’s
of her employment at the time of the automobile accident. objections to McMahon’s affidavit. We review trial court
The Tort Claims Act defines “scope of employment” as rulings on the admissibility of evidence under an abuse of
“the performance for a governmental unit of the duties of discretion standard. K–Mart Corp. v. Honeycutt, 24
an employee’s office or employment and includes being S.W.3d 357, 360 (Tex.2000) (per curiam).
in or about the performance of a task lawfully assigned to
an employee by competent authority.”Tex. Civ. Prac. &
Rem.Code Ann. § 101.001(5) (West Supp.2011).
Evidentiary Challenge to Conclusory Affidavit
*3 “A conclusory statement is one that does not provide
the underlying facts to support the conclusion.”Rodriguez
v. Wal–Mart Stores, Inc., 52 S.W.3d 814, 823
STANDARD OF REVIEW (Tex.App.-San Antonio 2001), rev’d on other grounds,92
S.W.3d 502 (Tex.2002). Conclusory statements without
The election of remedies provision under the current factual support are not credible, and are not susceptible to
Texas Tort Claims Act confers immunity from suit or being readily controverted. Ryland Group, Inc. v. Hood,
recovery. Franka, 332 S.W.3d at 371 n. 9.“Immunity 924 S.W.2d 120, 122 (Tex.1996) (per curiam); TEX.R.
from suit deprives a trial court of jurisdiction.”City of CIV. P. 166a(f) (“Supporting and opposing affidavits
Houston v. Williams, 353 S.W.3d 128, 133 (Tex.2011). shall be made on personal knowledge, shall set forth such
We review a trial court’s ruling on a challenge to the trial facts as would be admissible in evidence, and shall show
court’s subject matter jurisdiction de novo.Tex. Dep’t of affirmatively that the affiant is competent to testify to the
Parks & Wildlife v. Miranda, 133 S.W.3d 217, 228 matters stated therein.”). Here, McMahon provides
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Watkins v. Isa, Not Reported in S.W.3d (2012)
2012 WL 2021929
absolutely no factual basis or explanation for his record, Isa has failed to meet her burden required for
statement that Isa was acting in the course and scope of dismissal pursuant to section 101.106(f).Franka, 332
her employment at the time of the accident. By simply S.W.3d at 381; Univ. of Tex. Health Sci. Ctr. at San
stating “at the time of the accident ... Isa was acting Antonio v. Webber–Eells, 327 S.W.3d 233, 242
within the course and scope of her employment with (Tex.App.-San Antonio 2010, no pet.)(“If the plaintiff
Texas Tech University Health Sciences Center,” decides to continue the suit against the employee, the
McMahon asserts only a legal conclusion without factual plaintiff need not take any action, and the employee’s
basis or rationale. See Brownlee v. Brownlee, 665 S.W.2d motion can be granted only if the employee proves that
111, 112 (Tex.1984). Affidavit testimony that is his conduct was within the general scope of his
conclusory is substantively defective and amounts to no employment and that the suit could have been brought
evidence. See Coastal Transport Co. v. Crown Cent. against the governmental unit.”).
Petroleum Corp., 136 S.W.3d 227, 232 (Tex.2004)
(opinion testimony that is conclusory or speculative is not *4 Nor are we persuaded by Isa’s argument that Watkins
relevant evidence, because it does not tend to make the had a burden to establish that Isa was not acting within
existence of a material fact more probable or less the course of her employment. First, that contention is
probable); Anderson v. Snider, 808 S.W.2d 54, 55 contrary to the plain language of the statute which places
(Tex.1991) (testimony comprised only of legal the burden on the governmental employee to seek
conclusions is insufficient to support summary judgment dismissal under section 101.106(f).TEX. CIV. PRAC. &
as a matter of law); City of Mission v. Popplewell, 156 REM.CODE ANN. § 101.106(f). It is the movant’s
Tex. 269, 294 S.W.2d 712, 717 (1956) (“Parol evidence burden to establish that the conditions of the statute have
in the form of opinions and conclusions without been met in order to obtain dismissal under section
documentary basis is inadmissible to establish such title, 101.106(f).See Kelemen v. Elliott, 260 S.W.3d 518, 520
and even if admitted without objection is of no probative (Tex.App.Houston [1st Dist.] 2008, no pet.). In Kelemen,
force.”). For this reason, we conclude the trial court erred a former city police officer brought suit against the city
when it denied Watkins’s objection to McMahon’s and a fellow officer claiming she was wrongfully
affidavit. We now turn to the remaining record to terminated after reporting that she had been sexually
determine if there is other proof that Isa was acting in the assaulted. Id. Her suit against the city asserted statutory
course and scope of her employment at the time of the claims of retaliation and discrimination and her suit
accident. against the individual officer asserted various common
law assault-based claims. Id. The city moved to dismiss
the individual officer from the lawsuit based on immunity
under section 101.106(f).Id. The Houston Court of
Course and Scope of Employment Appeals refused to dismiss the officer because he failed to
As a general rule, an employee is not in the course and meet the first prong of his burden of proof, that is, he
scope of his employment while driving his own vehicle to failed to show that the alleged assault of a fellow officer
and from his place of work. See Kennedy v. Am. Nat’l Ins. was within the general scope of his employment with the
Co., 130 Tex. 155, 107 S .W.2d 364, 365 (1937); Terrell city. Id. at 524.
ex rel. Estate of Terrell v. Sisk, 111 S.W.3d 274, 278
(Tex.App.-Texarkana 2003, no pet.)(holding that county
employee, who killed person with car, did not act in scope
of employment because she was on her way to personal
appointment in her own car). Although there are CONCLUSION
exceptions to this general rule, Isa has wholly failed to
present any evidence about the circumstances of her Because Isa did not meet her burden of establishing that
driving on the day of the accident. Other than the she was acting in the course and scope of her employment
conclusory statement by McMahon, Isa has presented no with a governmental entity at the time of the automobile
evidence that she was in the performance of the duties of accident, we reverse the trial court’s judgment and
her employment at the time of her automobile accident. remand the cause to the trial court for further proceedings.
As stated earlier, we find McMahon’s affidavit
substantively defective and therefore insufficient as a
matter of law. See Anderson, 808 S.W.2d at 55. On this
Footnotes
1 Jones, the Assistant Vice President of Human Resources for Texas Tech University Health Sciences Center, testified in relevant
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Watkins v. Isa, Not Reported in S.W.3d (2012)
2012 WL 2021929
part that Isa was “employed” by TTUHSC from September 1, 2007 until August 31, 2010.
2 McMahon, Chairman of the Department of Psychiatry for Texas Tech University Health Sciences Center, testified in relevant part
that at the time of the accident on August 5, 2009, Isa “was acting within the course and scope of her employment” with TTUHSC.
3 Watkins also filed objections to the affidavit of Gena Jones who testified that Isa was employed by Texas Tech University Health
Sciences Center. However, it is not necessary to our opinion to address Watkins’s objections to the Jones affidavit.
SeeTEX.R.APP. P. 47.1.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
APPENDIX 3
Ji-Haw Indus. Co., Ltd. v. Broquet, --- S.W.3d ---- (2008)
2008 WL 441822 Cases that cite this headnote
Only the Westlaw citation is currently available.
NOTICE: THIS OPINION HAS NOT BEEN
RELEASED FOR PUBLICATION IN THE
[2]
PERMANENT LAW REPORTS. UNTIL RELEASED, Courts
IT IS SUBJECT TO REVISION OR WITHDRAWAL. Allegations, pleadings, and affidavits
Court of Appeals of Texas, The plaintiff bears the initial burden of pleading
San Antonio. sufficient allegations to bring a nonresident
defendant within the provisions of the long-arm
JI–HAW INDUSTRIAL CO., LTD. and JBT statute. V.T.C.A., Civil Practice & Remedies
International, Inc., Appellants Code § 17.042.
v.
Bonnie BROQUET, Individually and as Next
Friend and as Legally Appointed Representative of Cases that cite this headnote
Kyla Deanne Lazo, a Minor, Microsoft
Corporation, Gamestop Corp., Gamestop of Texas
(GP), LLC, Gamestop of Texas, LP, and Roel
Santos, Appellees.
[3]
Courts
No. 04–07–00622–CV. | Feb. 20, 2008. Allegations, pleadings, and affidavits
In an action against a nonresident defendant, the
plaintiff is not required to detail all theories or
Synopsis
bases of personal jurisdiction relied upon; rather,
Background: Consumer brought products liability action
the only requirement is that the plaintiff plead
against nonresident manufacturer. The 229th Judicial
allegations sufficient to bring the nonresident
District Court, Duval County, Alex William Gabert, J.,
defendant within the province of the long-arm
denied manufacturer’s special appearance, and
statute. V.T.C.A., Civil Practice & Remedies
manufacturer appealed.
Code § 17.042.
Cases that cite this headnote
[Holding:] The Court of Appeals, Steven C. Hilbig, J.,
held that consumer alleged sufficient facts to bring
defendant manufacturer within long-arm statute.
[4]
Courts
Affirmed.
Presumptions and Burden of Proof as to
Jurisdiction
Once the plaintiff meets the pleading
West Headnotes (9) requirement pleads sufficient allegations to
bring a nonresident defendant within the
provisions of the long-arm statute, the burden
[1]
Appeal and Error shifts to the defendant challenging jurisdiction
Cases Triable in Appellate Court through a special appearance to negate all bases
of personal jurisdiction. V.T.C.A., Civil Practice
Whether a court has jurisdiction over a & Remedies Code § 17.042.
nonresident defendant is a question of law
subject to de novo review. Cases that cite this headnote
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Ji-Haw Indus. Co., Ltd. v. Broquet, --- S.W.3d ---- (2008)
Cases that cite this headnote
[5]
Courts
Presumptions and Burden of Proof as to
[8]
Jurisdiction Constitutional Law
Non-residents in general
In an action against a nonresident defendant, if a Courts
plaintiff does not plead jurisdictional Actions by or Against Nonresidents, Personal
allegations, i.e., that the defendant has Jurisdiction In;  “Long-Arm” Jurisdiction
committed any act in Texas, the defendant can
satisfy its burden to negate all bases of personal In an action against a nonresident defendant,
jurisdiction by simply proving it is a when the plaintiff has pled facts authorizing
nonresident. V.T.C.A., Civil Practice & jurisdiction under the long-arm statute, a
Remedies Code § 17.042. nonresident defendant can negate jurisdiction by
proving (1) the defendant is not amenable to
service under the long-arm statute, or (2)
1 Cases that cite this headnote exercising jurisdiction over the non-resident
defendant would not comport with due process.
U.S.C.A. Const.Amend. 14; V.T.C.A., Civil
Practice & Remedies Code § 17.042.
[6]
Courts
Presumptions and Burden of Proof as to Cases that cite this headnote
Jurisdiction
In an action against a nonresident defendant, if
the defendant proves nonresidency or otherwise
[9]
negates personal jurisdiction, the burden then Courts
returns to the plaintiff to show as a matter of law Allegations, pleadings, and affidavits
the trial court has personal jurisdiction over the Courts
defendant. V.T.C.A., Civil Practice & Remedies Presumptions and Burden of Proof as to
Code § 17.042. Jurisdiction
Consumer’s complaint, describing incident in
Cases that cite this headnote which video game allegedly caught fire, alleging
it was a result of the video game including
component parts manufactured by defendant,
alleging the incident forming the basis of the
[7]
suit occurred in Texas, and that consumer was a
Constitutional Law Texas resident, alleged sufficient facts to bring
Non-residents in general defendant manufacturer within long-arm statute,
Courts and thus manufacturer could not simply prove
Actions by or Against Nonresidents, Personal its nonresidency to sustain its burden to negate
Jurisdiction In;  “Long-Arm” Jurisdiction all bases of personal jurisdiction. V.T.C.A.,
Civil Practice & Remedies Code § 17.042(2).
Courts may assert personal jurisdiction over a
nonresident if (1) the long-arm statute authorizes
the exercise of jurisdiction, and (2) the exercise Cases that cite this headnote
of jurisdiction is consistent with federal and
state constitutional due-process guarantees.
U.S.C.A. Const.Amend. 14; V.T.C.A., Civil
Practice & Remedies Code § 17.042.
Attorneys and Law Firms
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Ji-Haw Indus. Co., Ltd. v. Broquet, --- S.W.3d ---- (2008)
Andrew L. Kerr, J. Alex Huddleston, Deborah D. After a hearing, the trial court denied Ji–Haw’s special
Difilippo, Strasburger & Price, L.L.P., San Antonio, TX, appearance. Ji–Haw timely perfected this appeal.
for Appellant.
Douglas A. Allison, Law Offices of Douglas A. Allison,
Darrell L. Barger, Hartline, Dacus, Barger, Dreyer &
Kern, L.L.P., David W. Green, Eduardo Roberto APPLICABLE LAW
Rodriguez, Rodriguez, Colvin, Chaney & Saenz, L.L.P.,
Brownsville, TX, Jerry K. Clements, Locke Liddell &
Sapp, L.L.P., Austin, TX, Thomas G. Yoxall, Locke Lord
Standard of Review and Burden of Proof
Bissell & Liddell L.L.P., Dallas, TX, Scot G. Doyen,
Doyen Sebesta, Ltd., L.L.P., Corpus Christi, TX, Reagan [1]
Whether a court has jurisdiction over a nonresident
Wm. Simpson, King & Spaulding LLP, Houston, TX, defendant is a question of law subject to de novo review.
William J. Tinning, William J. Tinning, P.C., Portland, Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569,
TX, for Appellee. 574 (Tex.2007) (citing BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 794 (Tex.2002)). When
Sitting: KAREN ANGELINI, Justice, SANDEE BRYAN
reviewing an issue de novo, the appellate court “exercises
MARION, Justice, STEVEN C. HILBIG, Justice.
its own judgment and redetermines each legal issue,”
without any deference to the trial court. Hotels.com, L.P.
v. Canales, 195 S.W.3d 147, 151 (Tex.App.-San Antonio
2006, no pet.) (quoting Quick v. City of Austin, 7 S.W.3d
OPINION 109, 116 (Tex.1998)).
[2] [3] [4] [5] [6]
“The plaintiff bears the initial burden of
Opinion by: STEVEN C. HILBIG, Justice. pleading sufficient allegations to bring a nonresident
defendant within the provisions of the long-arm statute.”
*1 This is an appeal from the denial of a special BMC Software, 83 S.W.3d at 793. The plaintiff is not
appearance. Ji–Haw Industrial Co., Ltd. and JBT required to detail all theories or bases of personal
International, Inc. (“Ji–Haw”) bring three issues jurisdiction relied upon. Huynh v. Nguyen, 180 S.W.3d
contending the trial court erred in denying their special 608, 619 (Tex.App.-Houston [14th Dist.] 2005, no pet.).
appearance. In its first issue, the resolution of which is Rather, the only requirement is that the plaintiff plead
dispositive of this appeal, Ji–Haw alleges its proof of allegations sufficient to bring the nonresident defendant
nonresidency was sufficient to sustain its special within the province of the long-arm statute. Id. Once the
appearance. We disagree and affirm the denial of plaintiff meets this pleading requirement, the burden
Ji–Haw’s special appearance. shifts to the defendant challenging jurisdiction through a
special appearance to negate all bases of personal
jurisdiction. BMC Software, 83 S.W.3d at 793. If,
however, “the plaintiff does not plead jurisdictional
allegations, i.e., that the defendant has committed any act
BACKGROUND in Texas,” the defendant can satisfy its burden by simply
proving it is a nonresident. Oryx Capital, 167 S.W.3d at
Bonnie Broquet, Individually and as Next Friend and as
441. If the defendant proves nonresidency or otherwise
Legally Appointed Representative of Kyla Deanne Lazo,
negates personal jurisdiction, the burden then returns to
a Minor, brought suit against Ji–Haw and several other
the plaintiff to show as a matter of law the trial court has
defendants to recover personal injury damages allegedly
personal jurisdiction over the defendant. Id.
sustained when an XBOX game system caught fire.
Ji–Haw filed a special appearance asserting as its only
ground that it was not a Texas resident. Ji–Haw provided
proof of nonresidency through the affidavit of an
employee. Ji–Haw argued proof of nonresidency was Substantive Law
sufficient to sustain its special appearance because
Broquet failed to plead any jurisdictional facts that would *2 [7] [8] Texas courts may assert personal jurisdiction over
subject Ji–Haw to the jurisdiction of a Texas court.1 See a nonresident if “(1) the Texas long-arm statute authorizes
Oryx Capital Int’l, Inc. v. Sage Apartments, L.L.C., 167 the exercise of jurisdiction, and (2) the exercise of
S.W.3d 432, 441 (Tex.App.-San Antonio 2005, no pet.). jurisdiction is consistent with federal and state
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Ji-Haw Indus. Co., Ltd. v. Broquet, --- S.W.3d ---- (2008)
constitutional due-process guarantees.” Moki Mac, 221 that Ji–Haw committed a tort in Texas, which is all that is
S.W.3d at 574. When the plaintiff has pled facts required under the long-arm statute. See Tex. Dep’t of
authorizing jurisdiction under the long-arm statute, a Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226
nonresident defendant can negate jurisdiction by proving (Tex.2004) (holding that in determining plea to
(1) the defendant is not amenable to service under the jurisdiction pleadings are liberally construed in favor of
Texas long-arm statute, or (2) exercising jurisdiction over pleader in assessing whether he has pled sufficient facts to
the non-resident defendant would not comport with due demonstrate trial court’s jurisdiction); id. at 240 (Brister,
process. See id. at 574–75. The long-arm statute J., dissenting) (categorizing substance of special
authorizes the exercise of jurisdiction over nonresidents appearance as plea to jurisdiction); see also TEX. CIV.
“doing business” in Texas. TEX. CIV. PRAC. & PRAC. & REM.CODE ANN. § 17.042(2). By describing
REM.CODE ANN. § 17.042 (Vernon 1997). The statute the incident, alleging it was a result of the XBOX,
describes what, “[i]n addition to other acts,” may including component parts manufactured by the
constitute doing business in Texas. Pertinent to this “Defendants,” alleging the incident forming the basis of
appeal is subsection two, which provides that a the suit occurred in Texas, and that she is a Texas
nonresident does business in Texas if it “commits a tort in resident, Broquet did, contrary to Ji–Haw’s assertion,
whole or in part in this state.” Id. § 17.042(2). allege sufficient facts to bring Ji–Haw within the
long-arm statute.
*3 Ji–Haw asserts that portions of the jurisdictional
allegations discussed above should not be considered
Analysis because they are contained in that part of the petition
[9] asserting venue and that Broquet’s tort allegations are
In its first issue, Ji–Haw contends the trial court erred insufficient. We disagree. In her petition, Broquet alleged:
in denying its special appearance because it met its
burden to negate all bases of jurisdiction. Ji–Haw argues
Venue is proper in Duval County,
that Broquet did not plead any jurisdictional allegations in
Texas, pursuant to Section
her petition. Ji–Haw contends it was therefore only
15.002(a)(1) of the Texas Civil
required to prove nonresidency and its proof on this point
Practice and Remedies Code. All
was undisputed. We recognize that a failure to plead
or a substantial part of the events
jurisdictional allegations requires the defendant simply to
or omissions giving rise to this
prove nonresidency to sustain its burden. However, we
claim occurred in Duval County,
disagree with the contention that Broquet did not plead
Texas.
jurisdictional allegations invoking the long-arm statute.
In her First Amended Petition, Broquet specifically (emphasis added). We have found no case, and Ji–Haw
has cited none, holding or suggesting that the sufficiency
named each defendant and stated that all defendants
would be referred to collectively as “Defendants.” She of jurisdictional allegations is dependent upon their
alleged that a fire started in her home as a result of a placement within the petition. Further, we have found no
case, and Ji–Haw has cited none, holding or suggesting
defect in an XBOX game system (“the game console
itself and/or the power line cord, and/or these components that we should not consider the petition as a whole in
in combination”) that was “designed, manufactured and determining whether a plaintiff has pled sufficient
jurisdictional facts to invoke the long-arm statute. At least
marketed by Defendants.” In a separate section of the
petition entitled “Defendants Ji–Haw,” Broquet alleged one court has held that consideration of the venue portion
Ji–Haw was “legally responsible for the incident made the of a petition is proper in determining the sufficiency of
jurisdictional allegations. See Thunderbird Supply Co. v.
basis of this suit.” She asserted Ji–Haw was guilty of
negligence and its negligence was a proximate cause of Williams, 161 S.W.3d 731, 733–34 (Tex.App.-Beaumont
the incident underlying the suit. Broquet further alleged 2005, no pet.).
Ji–Haw was strictly liable and that its conduct was a
producing cause of the fire and injuries. In asserting strict In Thunderbird, the plaintiff alleged he was a Jefferson
liability, she referenced the theories set forth against other County, Texas resident and in his venue allegation stated,
“Venue in Jefferson County is proper in that all or a
defendants earlier in the petition. Finally, she alleged that
“[a]ll or a substantial part of the events or omissions substantial part of the events or omissions giving rise to
the claims occurred in this county.” Id. at 733. In other
giving rise to this claim occurred in Duval County,
Texas,” and she is a resident of Texas. These allegations, portions of the petition the plaintiff alleged “he was
when considered together and liberally construed, assert exposed to ‘various toxic products designed,
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Ji-Haw Indus. Co., Ltd. v. Broquet, --- S.W.3d ---- (2008)
manufactured and marketed’ by the thirteen so-called each in separate sections of her petition. Broquet did not
‘Jewelry Defendants,’ ” but did not allege the exposure simply allege Ji–Haw was liable with the other defendants
occurred in Texas. Id. The court first noted that based on joint and several liability, agency, or conspiracy
commission of a tort within the state is one means by as did the plaintiff in Siskind. Moreover, Siskind was
which a nonresident may be deemed to be doing business clearly concerned with the absence of allegations of any
in Texas. Id. at 733–34 (citing TEX. CIV. PRAC. & acts by the individuals, not with the general nature of the
REM.CODE ANN. § 17.042(2) (Vernon 1997)). Then, negligence allegations, which is Ji–Haw’s actual
obviously considering the venue allegation with the complaint. Id. at 437.
general tort allegation, the court held the plaintiff had
“met his initial burden of pleading allegations sufficient to Ji–Haw, quoting Michiana, argues jurisdiction “cannot
bring [the defendant] within the long-arm statute,” turn on whether a plaintiff alleges wrongdoing—as
thereby shifting the burden to the defendant to negate all virtually all will.” 168 S.W.3d at 791. However, the issue
bases of personal jurisdiction alleged. Id. at 734. in Michiana was not whether the plaintiff’s petition
contained sufficient jurisdictional allegations to invoke
Just as in Thunderbird, Broquet alleged she was a Texas the long-arm statute. Rather, with regard to the quote
resident and, in the venue portion of her petition, alleged relied upon by Ji–Haw, the court was addressing whether
that all or a substantial part of the events or omissions jurisdiction is measured by an absence of minimum
giving rise to her claims occurred in Texas. In other contacts or a lack of culpability. Id. Clearly, Michiana is
portions of the petitions she included general negligence irrelevant to the issue in this case and like Siskind does
allegations against all of the defendants as well as not compel the result sought by Ji–Haw.
negligence allegations particular to Ji–Haw. Accordingly,
Broquet met her initial burden of pleading allegations We conclude Broquet alleged sufficient jurisdictional
sufficient to bring Ji–Haw within the long-arm statute. facts to bring Ji–Haw within the Texas long-arm statute.
See id. Accordingly, the burden shifted to Ji–Haw to negate all
bases of personal jurisdiction, see BMC Software, 83
Ji–Haw contends Thunderbird is inapplicable because it S.W.3d at 793, not merely prove non-residency. See Oryx
conflicts with Siskind v. Villa Found. for Educ., 642 Capital, 167 S.W.3d at 441. Because Ji–Haw only alleged
S.W.2d 434 (Tex.1982) and Michiana Easy Livin’ and proved non-residency in its special appearance, it did
Country, Inc. v. Holten, 168 S.W.3d 777 (Tex.2005). We not negate all bases of personal jurisdiction. See
disagree. Siskind is factually distinguishable and neither Temperature Sys., Inc. v. Bill Pepper, Inc., 854 S.W.2d
Siskind nor Michiana address the specific issue presented 669, 673 (Tex.App.-Dallas 1993, writ dism’d by ag’t).
in this case.
We overrule Ji–Haw’s first issue. Our resolution of this
*4 In Siskind, a plaintiff brought suit against an Arizona issue is dispositive of this appeal and, therefore we need
school and several individual school employees. 642 not address Ji–Haw’s other issues. The trial court’s order
S.W.2d at 434–35. The school and the individual denying Ji–Haw’s special appearance is affirmed.
defendants filed special appearances. Id. at 435. In
holding the individual defendants sustained their burden 1
After Ji–Haw filed its special appearance and set the
by proving nonresidency, the supreme court made it clear matter for hearing, Microsoft Corporation and the
the plaintiff had not alleged any acts by the individuals in Gamestop entities filed cross-claims against Ji–Haw.
Texas. In his allegations, apart from a breach of contract These entities also filed oppositions to Ji–Haw’s special
claim, the plaintiff failed to “differentiate between [the appearance. Given our disposition of this appeal, we
school] and the individual [defendants]”; rather, the need not address the effect, if any, of the cross-claims.
plaintiff claimed all the defendants were jointly and We note that only Microsoft Corporation and the
Gamestop entities have filed appellees’ briefs in this
severally liable, and that the individuals were individually
appeal.
liable and as agents of the school. Id. at 436 n. 3. Here,
while Broquet alleged the fire was caused by an XBOX
“that was designed, manufactured and marketed by
Defendants,” she also differentiated between the various
defendants, alleging negligence and other claims against
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
Ji-Haw Indus. Co., Ltd. v. Broquet, --- S.W.3d ---- (2008)
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6