Brad Bower v. American Lumber, Inc. ( 2015 )

IN THE
TENTH COURT OF APPEALS
No. 10-14-00322-CV
BRAD BOWER,
Appellant
v.
AMERICAN LUMBER, INC.,
Appellee
From the 85th District Court
Brazos County, Texas
Trial Court No. 13-002584-CV-85
MEMORANDUM OPINION
Brad Bower, a resident of Idaho, appeals the trial court’s denial of Bower’s special
appearance. Because the trial court erred, we reverse the trial court’s order and remand
this case to the trial court for further proceedings.
BACKGROUND
Eddie Winn and Andrew Keys worked for American Lumber, Inc. They both
signed non-competition agreements. At some point in time, Winn became unhappy with
his employment and contacted another lumber company, Eagle Forest Products, LLC, in
Idaho. Winn and Keys eventually accepted employment with Eagle Forest and began
selling lumber in Texas in competition with American Lumber. American Lumber sued
Winn, Keys, Eagle Forest, and Bower. Bower is the managing member of Eagle Forest.
Bower was not sued in his official capacity but rather was sued in his individual capacity.
In three issues on appeal, Bower contends the trial court erred in denying Bower’s
special appearance in which Bower objected to the trial court’s jurisdiction over him.
PERSONAL JURISDICTION
Pursuant to Rule 120a of the Texas Rules of Civil Procedure, a special appearance
may be made by any party for the purpose of objecting to the jurisdiction of the court
over the person or property of the defendant on the ground that such person or property
is not amenable to process issued by the courts of this State. TEX. R. CIV. P. 120a(1).
Personal jurisdiction is a question of law which we review de novo. Kelly v. General
Interior Constr., Inc., 301 S.W.3d 653, 657 (Tex. 2010); BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Texas courts have personal jurisdiction over a
nonresident defendant when (1) the Texas long-arm statute 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, 872 (Tex. 2010); Moki Mac River Expeditions v. Drugg,
221 S.W.3d 569, 574 (Tex. 2007).
Under the Texas long-arm statute, the plaintiff has the initial burden to plead
sufficient allegations to confer jurisdiction. Kelly, 301 S.W.3d at 658; Retamco Operating,
Bower v. American Lumber, Inc. Page 2
Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009); American Type Culture
Collection, Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002). The defendant seeking to avoid
being sued in Texas then has the burden to negate all potential bases for jurisdiction pled
by the plaintiff. See id. When, as here, the trial court does not make findings of fact and
conclusions of law in support of its ruling, "all facts necessary to support the judgment
and supported by the evidence are implied." Retamco, 278 S.W.3d at 337 (quoting BMC
Software, 83 S.W.3d at 795 (citations omitted)).
STEP ONE—THE LONG ARM STATUTE
The Texas long-arm statute provides, in relevant part:
In addition to other acts that may constitute doing business, a nonresident
does business in this state if the nonresident:
***
(2) commits a tort in whole or in part in this state; . . . .
TEX. CIV. PRAC. & REM. CODE ANN. § 17.042 (West xxxx). The statute's broad doing-
business language "allows the statute to reach as far as the federal constitutional
requirements of due process will allow." Retamco, 278 S.W.3d at 337 (quoting Moki Mac,
221 S.W.3d at 575 (citations omitted)); accord Michiana Easy Livin' Country, Inc. v. Holten,
168 S.W.3d 777, 788 (Tex. 2005). Therefore, we only analyze whether Bower’s acts would
bring him within Texas' jurisdiction consistent with constitutional due process
requirements. See Moki Mac, 221 S.W.3d at 575 (citations omitted).
STEP TWO—CONSTITUTIONAL DUE PROCESS GUARANTEES
Bower v. American Lumber, Inc. Page 3
Under a constitutional due-process analysis, personal jurisdiction is achieved
when (1) the non-resident 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." Moki Mac, 221 S.W.3d at 575 (quoting Int'l Shoe Co. v. Washington,
326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945)). We focus on the defendant's activities
and expectations when deciding whether it is proper to call the defendant before a Texas
court. Int'l Shoe Co., 326 U.S. at 316.
Minimum Contacts
A defendant establishes minimum contacts with a state when the defendant
"purposefully avails itself of the privilege of conducting activities within the forum state,
thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235,
253, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958) (citing Int'l Shoe Co., 326 U.S. at 319). "The
defendant's activities, whether they consist of direct acts within Texas or conduct outside
Texas, must justify a conclusion that the defendant could reasonably anticipate being
called into a Texas court." Am. Type Culture Collection, 83 S.W.3d at 806 (citing World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980)).
A nonresident's contacts can give rise to either specific or general jurisdiction. Am.
Type Culture Collection, 83 S.W.3d at 806. Here, only specific jurisdiction over Bower is at
issue. A court has specific jurisdiction over a defendant if the defendant’s alleged liability
arises from or is related to an activity conducted within the forum. Spir Star AG v. Kimich,
Bower v. American Lumber, Inc. Page 4
310 S.W.3d 868, 873 (Tex. 2010); CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996). In such
cases, "we focus on the 'relationship among the defendant, the forum[,] and the
litigation.'" Spir Star AG, 310 S.W.3d at 873 (quoting Moki Mac, 221 S.W.3d at 575-76).
Specific jurisdiction arises when (1) the defendant purposefully avails itself of conducting
activities in the forum state, and (2) the cause of action arises from or is related to those
contacts or activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S. Ct. 2174, 85
L. Ed. 2d 528 (1985); National Indus. Sand Ass'n v. Gibson, 897 S.W.2d 769, 774 (Tex. 1995).
Pleadings and Evidence
A plaintiff must also plead and, when challenged by the defendant, present
evidence of the relevant acts (those connected to the plaintiff’s claims) and that those acts
occurred, at least in part, in Texas. See Kelly v. General Interior Constr., Inc., 301 S.W.3d
653, 660-661 & 659 n. 5 (Tex. 2010) (citing Frank A. Smith Sales, Inc. v. Atl. Aero, Inc., 31
S.W.3d 742, 747 (Tex. App.—Corpus Christi 2000, no pet.)).
American Lumber pled in its first Amended Petition that Brad Bower, in his
individual capacity, was a resident of Idaho and a Managing Member of Eagle Forest
Products, LLC who tortuously interfered with the contractual relationship between
American Lumber and Eddie Winn and Andrew Keys; violated the Texas Uniform Trade
Secrets Act; intentionally formed a conspiracy to interfere with existing contractual
relations and prospective contractual relations; and conspired to violate the Texas
Uniform Trade Secrets Act.
Bower v. American Lumber, Inc. Page 5
Bower filed a verified special appearance pursuant to Rule 120a contending that
he was not a Texas resident, owned no property in Texas, had no bank account in Texas,
had no office, employees, or regular place of business in his individual capacity in Texas,
and committed no tort in Texas. Bower later filed a more specific affidavit declaring that,
in his individual capacity, he had not recruited any Texas resident to work for Eagle. He
acknowledged communicating with Winn and Keys about working for Eagle but that
those communications were on behalf of Eagle and did not occur while he was in Texas.
He also acknowledged that of all the communications with Winn and Keys, only one was
within Texas but that it was not business related. He recounted that he was in Texas on
a business trip to meet with an Eagle employee. The employee introduced Bower to Winn
and the two had dinner which was incidental to the trip. The dinner was a “get to know
you” occasion rather than a business meeting. Bower stated he did not make an offer of
employment at any time during the Texas trip. Bower also asserted that he never met
Keys in person in Texas prior to Keys being hired by Eagle; never committed tortious
activity in Texas or outside of Texas intended to harm a Texas resident; and never
received trade secrets of another company from Winn or Keys. Bower stated he knew
Winn and Keys had signed non-competition agreements with American Lumber but that
when Eagle offered employment to Winn and Keys, Bower believed he acted in good
faith because he understood the non-competition agreements to be unenforceable.
American Lumber responded to Bower’s special appearance, attaching excerpts of
Bower v. American Lumber, Inc. Page 6
deposition testimony of Winn and an affidavit of Barry Hendler, the president of Madera
Americana, Inc., d/b/a American Lumber, Inc. Winn testified at his deposition that Bower
knew of Winn’s non-competition agreement but there was no discussion between the two
about it. Winn further testified that he and Bower met in the spring of 2013 at a restaurant
in Humble, Texas. They “got to know one another” at the restaurant. Winn did not know
why Bower was in town. Winn could not recall whether it was Bower or Cary Holaday,
a sales manager, who called Winn on the phone a few months later to offer Winn
employment with Eagle. The only relevant information provided by Hendler’s affidavit
was a statement that Winn testified at his deposition that he met Bower in Humble and a
conclusion that Bower, individually, entered into an agreement to take the trade secrets
of American Lumber and sell products.1
Application
After reviewing the pleadings and evidence submitted, we find American Lumber
failed to plead what wrongful acts Bower took in his individual capacity and that any of
those acts occurred in Texas. The mere existence of a cause of action does not
automatically satisfy jurisdictional due process concerns. Kelly v. General Interior Constr.,
Inc., 301 S.W.3d 653, 660 (Tex. 2010). Thus, because Bower challenged American
Lumber’s pleadings, Bower could, and did, meet his burden to negate all bases of
jurisdiction by proving through his special appearance and affidavit that he was not a
1 Portions of Hendler’s affidavit were objected to and those objections were sustained.
Bower v. American Lumber, Inc. Page 7
Texas resident, owned no property in Texas, had no bank account in Texas, had no office,
employees, or regular place of business in his individual capacity in Texas, and
committed no tort in Texas. See Siskind v. Villa Foundation for Education, Inc., 642 S.W.2d
434, 438 (Tex. 1982).
CONCLUSION
Accordingly, we conclude that Bower did not purposefully avail himself of
conducting activities in Texas. Thus, Bower’s contacts are not sufficient to support
specific jurisdiction over Bower in his individual capacity, and his special appearance
should have been granted.2
Bower’s first two issues are sustained. The trial court’s order denying Bower’s
special appearance is reversed, and this case is remanded to the trial court to render an
order which grants Bower’s special appearance and dismisses American Lumber’s claims
against Bower for lack of personal jurisdiction.
TOM GRAY
Chief Justice
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
Reversed and remanded
Opinion delivered and filed April 16, 2015
[CV06]
2Because we decide this case based on the lack of alleged minimum contacts with Texas, we need not
discuss the “traditional notions of fair play and substantial justice” prong of personal jurisdiction.
Bower v. American Lumber, Inc. Page 8