Don A. Mitchell v. Freese & Goss, PLLC, Richard A. Freese, Tim K. Goss, Shelia M. Bossier, Dennis C. Sweet, and Sweet & Freese, PLLC. ( 2015 )

ACCEPTED
05-15-00868-CV
FIFTH COURT OF APPEALS
DALLAS, TEXAS
11/4/2015 5:18:15 PM
LISA MATZ
CLERK
No. 05-15-00868-CV
In the FILED IN
Court of Appeals for the Fifth District 5th COURT OF APPEALS
DALLAS, TEXAS
Dallas, Texas 11/4/2015 5:18:15 PM
LISA MATZ
Clerk
Don A. Mitchell,
Appellant,
v.
Freese & Goss, PLLC, et al.,
Appellees,
From the 95th Judicial District Court, Dallas County, Texas
Cause No. DC-14-08251
APPELLEES’ BRIEF
Jeffrey Tillotson, SBN 20039200
LYNN TILLOTSON PINKER & COX
2100 Ross Avenue, Suite 2700
Dallas, TX 75201
Phone: 214.981.3800
Fax: 214.981.3839
jtillotson@lynnllp.com
Mikel J. Bowers, SBN 02734550
Jason P. Steed, SBN 24070671
BELL NUNNALLY & MARTIN LLP
3232 McKinney Avenue, Suite 1400
Dallas, Texas 75204-2429
Phone: 214.740.1400
Fax: 214.740.1499
mbowers@bellnunnally.com
jsteed@bellnunnally.com
COUNSEL FOR APPELLEES
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
Table of Authorities ........................................................................... 3
Introduction ....................................................................................... 5
Factual & Procedural Background .................................................... 7
A. Mitchell enters a joint venture with Freese & Goss ................ 7
B. Mitchell turns joint-venture clients against his joint-
venture partner, Freese & Goss ............................................... 9
C. Freese & Goss files this lawsuit claiming Mitchell
breached his fiduciary duties to the joint venture ................. 11
Summary of the Argument .............................................................. 12
Arguments and Authorities ............................................................. 13
1. The trial court may exercise personal jurisdiction over
Mitchell because Mitchell has established “minimum
contacts” with Texas ............................................................... 15
1.1. Mitchell’s contacts with Texas were purposeful ........... 15
1.1.1. Mitchell was part of a joint venture with
Freese & Goss, a Texas law firm, and
together they conducted substantial
business in Texas ............................................... 17
1.1.2. Mitchell’s tortious conduct included
deliberately seeking out and recruiting
Texas residents who were joint-venture
clients, to bring suit against Mitchell’s
joint-venture partner, Freese & Goss. ............... 23
1.2. Freese & Goss’s causes of action relate to
Mitchell’s purposeful contacts with Texas. ................... 26
2. The trial court’s exercise of personal jurisdiction
comports with traditional notions of fair play and
substantial justice .................................................................. 28
Conclusion & Prayer ........................................................................ 31
Certificates ....................................................................................... 32
2
TABLE OF AUTHORITIES
CASES
Asahi Metal Indus. Co. v. Superior Court,
480 U.S. 102 (1987) ...................................................................... 28
BMC Software Belgium, N.V. v. Marchand,
83 S.W.3d 789 (Tex. 2002)............................................................ 28
Burger King Corp. v. Rudzewicz,
471 U.S. 462 (1985) .............................................................. passim
Capital Tech. Info. Serv’s., Inc. v. Arias & Arias Consultores,
270 S.W.3d 741 (Tex. App.—Dallas 2008, pet. denied) ......... 16, 21
Gordon & Doner, P.A. v. Joros,
287 S.W.3d 325 (Tex. App.—Fort Worth 2009, no pet.) .............. 22
Gray Ritter & Graham, PC v. Goldman Phipps, PLLC,
--- S.W.3d ---, 2015 WL 5895302 (Tex. App.—Corpus
Christi-Edinburg Oct. 8, 2015, no pet. h.) ............................. 20, 22
Guardian Royal Exchange Assur., Ltd. v. English China
Clays, P.L.C.,
815 S.W.2d 223 (Tex. 1991).......................................................... 29
IRA Resources, Inc. v. Griego,
221 S.W.3d 592 (Tex. 2007).................................................... 16, 20
Kelly v. Gen. Interior Constr., Inc.,
301 S.W.3d 653 (Tex. 2010).......................................................... 13
Lombardo v. Bhattacharyya,
437 S.W.3d 658 (Tex. App.—Dallas 2014, pet. denied) ... 13, 14, 15
Michiana Easy Livin’ Country, Inc. v. Holten,
168 S.W.3d 777 (2005)............................................................ 18, 24
3
Moki Mac River Expeditions v. Drugg,
221 S.W.3d 569 (Tex. 2007).............................................. 15, 26, 27
Moncrief Oil Int’l v. OAO Gazprom,
414 S.W.3d 142 (Tex. 2013).................................................. passim
Ring Power Sys. v. Int’l de Comercio Y Consultoria,
39 S.W.3d 350 (Tex. App.—Houston [14th Dist.] 2001, no
pet.) ............................................................................................... 29
Rogers v. TexWest, LLC,
261 S.W.3d 818 (Tex. App.—Dallas 2008, no pet.) .............. passim
Silbaugh v. Ramirez,
126 S.W.3d 88 (Tex. App.—Houston [1st Dist.] 2002, no
pet.) ............................................................................................... 23
Tempest Broad. Corp. v. Imlay,
150 S.W.3d 861 (Tex. App.—Houston [14th Dist.] 2004,
no pet.) .......................................................................................... 29
Wright v. Sage Engineering, Inc.,
137 S.W.3d 238 (Tex. App.—Houston [1st Dist.] 2004, pet.
denied) .................................................................................... 23, 29
STATUTES
Civ. Prac. & Rem. Code § 17.042 ..................................................... 14
4
INTRODUCTION
The parties to this case—all of whom are attorneys—were
involved in jointly representing clients in mass tort litigation in
Mississippi. When that litigation entered settlement, Appellant
Don Mitchell entered into a joint venture with Appellee Freese &
Goss, PLLC, a Texas-based law firm, to bring another group of
clients into the settlement.
But the parties’ relationship went bad during the
administration of the settlements. In this case, Appellees Freese &
Goss, PLLC, Richard A. Freese, Tim K. Goss, Sheila M. Bossier,
Dennis C. Sweet, and Sweet & Freese, PLLC allege that Mitchell
breached his fiduciary duties to Freese & Goss—his joint-venture
partner—by, among other things, recruiting joint-venture clients to
turn and sue Freese & Goss (and other Appellees) for allegedly
mishandling the settlement.
Mitchell barely mentions these allegations in his opening brief.
Indeed, the Court would never know what this case is about from
Mitchell’s Statement of Facts (Appellant’s Br. 2–10) because it
never mentions the allegations against Mitchell that form the basis
for this suit. Mitchell doesn’t mention the allegations against him
until the latter half of his brief (at 27–34).
Instead, Mitchell tries to focus the Court’s attention on
background disputes in Mississippi. This current dispute might be
5
called the Texas Breach-of-Duty Case. It arises from (a) Mitchell’s
partnership in a Texas-based joint venture and (b) Mitchell’s
breach of fiduciary duty—a breach that included purposefully
reaching out to joint-venture clients, including Texas residents, and
turning them against Mitchell’s joint-venture partner, Freese &
Goss. But the background to this Texas Breach-of-Duty Case
involves three other disputes, beginning with the mass tort
litigation in Mississippi. And Mitchell’s opening brief focuses on
those background disputes—and on their connections with
Mississippi—in an effort to direct the Court’s attention away from
Mitchell’s contacts with Texas.
The Court should reject Mitchell’s attempts at misdirection. In
this Texas Breach-of-Duty Case, the question is whether Mitchell
had minimum contacts with Texas to justify resolving this dispute
in a Texas court. Considering Mitchell’s partnership with a Texas-
based law firm, in a Texas-based joint venture, and considering
Mitchell’s purposeful contacts with joint-venture clients in Texas,
the Court should affirm the trial court’s determination that
Mitchell’s contacts with Texas are sufficient to support the exercise
of personal jurisdiction.
6
FACTUAL & PROCEDURAL BACKGROUND
As noted, there are three background disputes leading up to
this Texas Breach-of-Duty Case. These background disputes may
be labeled (1) “the PCB Litigation,” (2) “the Fees Lawsuit,” and (3)
“the Client Lawsuits.” The relevant details are as follows.
A. Mitchell enters a joint venture with Freese & Goss.
In 2007, Mitchell—a Mississippi lawyer—entered into a
written joint-venture agreement with a firm called Sweet & Freese
to represent plaintiffs in a mass tort action in Mississippi (“the
PCB Litigation”). CR 19, 450, 456. Initially thousands of plaintiffs
joined the mass action, including plaintiffs from Texas. CR 450. But
over time many were released to seek separate counsel, reducing
the number of plaintiffs to 348. CR 14–16, 450, 456. Later, when
the PCB Litigation entered settlement negotiations in 2010, the
decision was made to re-sign many of those previously discharged
clients. CR 17, 451.
By this time Sweet & Freese no longer existed. CR 16, 451.
Instead, Richard Freese had created a new firm with Tim Goss, a
Dallas lawyer. Freese & Goss was registered as a Texas PLLC and
located in Dallas, Texas. See CR 10, 451; see also Appellant’s Br. 18
(acknowledging Freese & Goss is “a Texas-based firm”). So, as the
PCB Litigation entered settlement in 2010, Mitchell and Freese &
7
Goss entered into a new joint venture pertaining to the processing
and administration of the settlement, which included re-signing
many of the previously discharged clients to a new joint-
representation agreement (the “Mitchell/Freese & Goss Contract”)
so they could participate in the settlement. CR 17–19, 763–764.
Notably, in furtherance of this new joint venture, Mitchell sought
out and re-signed at least 30 Texas residents to the Mitchell/Freese
& Goss Contract. CR 18, 451, 466.
Mitchell has acknowledged that his relationship with Freese &
Goss constituted a joint venture. CR 18, 763. And Mitchell knew
Freese & Goss was a Texas law firm. CR 451. Moreover, this new
joint venture was itself largely Texas-based. Most of the work,
processing and administering the settlement of the PCB Litigation,
occurred at Freese & Goss’s Dallas office. Cr. 17–18, 451; see RR
38:13–15 (Mitchell’s attorney admitting settlement work was
performed in Dallas). Client files and invoices were kept at the
Dallas office. CR 451, 458–459. Some of the settlement proceeds
(non-client funds) were at one time in Freese & Goss’s Dallas bank
account. CR 20, 1245. And Mitchell received compensation for his
work in the joint venture from this Dallas account. CR 20, 1245.
In sum, it is undisputed that (1) Mitchell entered into a joint
venture in 2010 with Freese & Goss, a Texas law firm, to find and
jointly represent a group of clients in the settlement of the PCB
8
Litigation; (2) the joint venture’s work of processing and
administering the settlement occurred primarily in Texas; and
(3) the joint-venture settlement involved Texas residents, many of
whom were re-signed as clients by Mitchell.
B. Mitchell turns joint-venture clients against his joint-
venture partner, Freese & Goss.
The business relationship between Mitchell and Freese & Goss
deteriorated during the administration of the settlement of the
PCB Litigation, as Mitchell became dissatisfied with his share of
attorney’s fees. CR 20–22, 451. Subsequently, Mitchell hired
Mississippi attorney Chuck McRae to represent him in suing
Freese & Goss (and others) in an effort to obtain a greater share of
the attorney’s fees (“the Fees Lawsuit”). CR 21, 451. The objective
of the Fees Lawsuit was for Mitchell to obtain a larger portion of
the attorney’s fees from Freese & Goss, generated from the
settlement being processed and administered in Texas—and the
fees he sought necessarily would come, in part, from Texas clients
involved in the settlement. See CR 20–22.
But this Fees Lawsuit did not go as Mitchell hoped it would, so
he and McRae devised a new strategy to pressure Freese & Goss to
pay Mitchell more fees. See CR 20–22, 452. Mitchell and McRae
approached another Mississippi attorney, Doug Wade, and enlisted
him in helping them to contact some of the people who had signed
9
the Mitchell/Freese & Goss Contract as joint-venture clients in the
settlement of the PCB Litigation. CR 22, 452, 1028, 1029.. In 2012,
Wade was representing the estate of a client who was involved in
the PCB Litigation, and Mitchell and McRae approached him at an
estate hearing to discuss how Wade could seek out clients from the
PCB Litigation on Mitchell and McRae’s behalf. CR 1259, 1295.
(For his part, Wade said he would never have been involved in
these disputes, had it not been for that meeting with Mitchell and
McRae. CR 1295.)
Acting together and through one another, Mitchell, McRae and
Wade misrepresented to clients—who had been or continued to be
jointly represented by Mitchell and Freese & Goss in the settlement
of the PCB Litigation—that Freese & Goss had mishandled the
Texas-based administration of the settlement, and that the clients
were entitled to receive additional funds. CR 22, 452–453. McRae
and Wade then filed seven different lawsuits against Freese &
Goss, on behalf of some of these joint-venture clients (“the Client
Lawsuits”). CR 22–24, 452, 1318, 1360.
Notably, nine Texas residents were recruited to participate in
the Client Lawsuits against Freese & Goss—and eight of those nine
Texas residents were among those who Mitchell had re-signed to
the Mitchell/Freese & Goss Contract so they could participate in
the settlement. CR 452–453, 466, 469.
10
In sum, Mitchell pursued contradictory positions. On the one
hand, he sought a greater share of attorney’s fees from the clients
in the settlement. Then, on the other hand—through McRae and
Wade—he sought to harm Freese & Goss by pushing some of those
same clients to claim Freese & Goss had mishandled the
administration of the settlement.
C. Freese & Goss files this lawsuit claiming Mitchell
breached his fiduciary duties to the joint venture.
Based on Mitchell’s misconduct—for example, his involvement
in making misrepresentations to joint-venture clients about Freese
& Goss’s handling of the settlement, and his involvement in
recruiting joint-venture clients to file the Client Lawsuits against
Freese & Goss—Freese & Goss filed this lawsuit (1) claiming
Mitchell breached his fiduciary duties and (2) seeking a declaratory
judgment dissolving the parties’ joint venture. CR 7–31.
Mitchell responded by filing a special appearance, claiming the
Texas trial court has no jurisdiction over him because he is a
Mississippi resident who has been representing clients in
Mississippi lawsuits. CR 36–40; see generally Appellant’s Br.
After hearing evidence and arguments on this jurisdictional
question, the trial court disagreed with Mitchell, finding (a) the
“focus” of this dispute “is what occurred in Texas”; (b) the joint
venture “was operating in Texas”; and (c) Mitchell was a “partner”
11
in the Texas-based joint venture—all of which was sufficient to
warrant the trial court’s exercise of personal jurisdiction over
Mitchell. See RR 88:2–5; RR 89:11–14, 17–20; RR 95:8–10; 97:24–
25; CR 2143 (order signed June 27, 2015).
SUMMARY OF THE ARGUMENT
It is undisputed that Appellant Don Mitchell purposefully
entered into a joint venture with Freese & Goss, a Texas-based law
firm. This joint venture involved processing and administering the
settlement of mass tort litigation—and it is undisputed that most of
the work of processing and administering this settlement occurred
in or from Freese & Goss’s office in Dallas, Texas. Moreover, it is
undisputed that Mitchell, in pursuit of this joint venture,
purposefully contacted and re-signed at least 30 Texas residents as
clients for representation in the joint-venture settlement.
Mitchell then sued to obtain a larger portion of attorney’s fees
from the Texas-based settlement—fees that would necessarily
come, in part, from Texas-resident clients. And, through others,
Mitchell purposefully contacted some of these Texas-resident
clients, made misrepresentations to them regarding Freese & Goss’
handling of the Texas-based settlement, and recruited some of
these Texas-resident clients to bring lawsuits against Freese &
Goss—Mitchell’s joint-venture partner.
12
Because all of the above constitutes sufficient “minimum
contacts” with Texas, the Court should affirm the trial court’s
determination that it may exercise specific personal jurisdiction
over Mitchell.
ARGUMENTS AND AUTHORITIES
A trial court’s exercise of personal jurisdiction over a
nonresident defendant is a question of law that the appellate court
reviews de novo. Moncrief Oil Int’l v. OAO Gazprom, 414 S.W.3d
142, 150 (Tex. 2013). When—as in this case—the trial court does
not issue formal findings of fact and conclusions of law, the
appellate court will imply all facts necessary to support the
jurisdictional ruling. Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d
653, 657 (Tex. 2010). To the extent Mitchell challenges the
sufficiency of evidence supporting any factual finding, he concedes
this challenge fails if even a scintilla of evidence supports the
finding. See Appellant’s Br. 12.
After Appellees alleged facts to support the exercise of
jurisdiction (see CR 11), the burden shifted to Mitchell to negate all
bases for jurisdiction. See Moncrief, 414 S.W.3d at 149; Lombardo
v. Bhattacharyya, 437 S.W.3d 658, 675–676 (Tex. App.—Dallas
2014, pet. denied)(stating burden shifts to defendant after plaintiff
meets initial burden to assert jurisdiction by alleging nonresident
13
defendant did business in Texas). Here, Mitchell has failed to carry
this burden.
The Texas Long-Arm Statute permits the exercise of personal
jurisdiction over a nonresident defendant who “commits a tort in
whole or in part in this state” or who “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.” Civ. Prac. & Rem. Code
§ 17.042(1)–(2). Here, Mitchell entered into a joint-venture
agreement with Freese & Goss, at least part of which was to be
performed in Texas. And Mitchell breached his fiduciary duties to
Freese & Goss through conduct that occurred, in part, in Texas. See
CR 24–28; see also Factual & Procedural Background. This satisfies
the Long-Arm Statute’s requirements. See Lombardo, 437 S.W.3d
at 679; Civ. Prac. & Rem. Code § 17.042(1)–(2).
To satisfy constitutional requirements of due process, the trial
court may exercise personal jurisdiction only if (1) the nonresident
defendant has established “minimum contacts” with Texas and
(2) the exercise of jurisdiction comports with traditional notions of
fair play and substantial justice. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 476 (1985); Moncrief, 414 S.W.3d at 149. Here, both
of these conditions are satisfied, as demonstrated below.
14
1. The trial court may exercise personal jurisdiction over
Mitchell because Mitchell has established “minimum
contacts” with Texas.
A nonresident defendant’s contacts with a forum state can give
rise to (1) general personal jurisdiction or (2) specific personal
jurisdiction. See Moncrief, 414 S.W.3d at 150. Here, Appellees
allege, and the trial court agreed, that Texas has specific personal
jurisdiction over Mitchell. CR 11–12, 2143.
A Texas court may exercise specific personal jurisdiction over a
nonresident defendant when (1) the defendant’s contacts with the
forum state are “purposeful” and (2) the cause of action arises from
or relates to those contacts. Lombardo, 437 S.W.3d at 677 (citing
Burger King, 471 U.S. at 474–475). The focus is on the relationship
between the nonresident defendant, the forum state, and the
current litigation. Moki Mac River Expeditions v. Drugg, 221
S.W.3d 569, 575–576 (Tex. 2007).
1.1. Mitchell’s contacts with Texas were purposeful.
The trial court may exercise personal jurisdiction when the
defendant has purposefully availed himself of the forum state,
thereby invoking the benefits and protections of its laws. Rogers v.
TexWest, LLC, 261 S.W.3d 818, 820–821 (Tex. App.—Dallas 2008,
no pet.). There are three aspects to determining “purposeful
availment”: (1) courts consider only the nonresident defendant’s
15
contacts with the forum; (2) the acts upon which jurisdiction is
based must be purposeful rather than random, fortuitous, or
attenuated; and (3) the defendant must seek some benefit,
advantage, or profit by availing himself of the forum state. IRA
Resources, Inc. v. Griego, 221 S.W.3d 592, 596 (Tex. 2007).
The court focuses on the “quality and nature of the defendant’s
contacts with the forum, rather than their number.” Rogers, 261
S.W.3d at 821. And purposeful availment relates to the defendant’s
expectations, not his geographical location: i.e., a court correctly
exercises personal jurisdiction when “[t]he defendant’s conduct,
regardless of where it takes place . . . justif[ies] the conclusion
that [he] would reasonably anticipate being sued in a Texas court.”
Rogers, 261 S.W.3d at 821 (emphasis added); Capital Tech. Info.
Serv’s., Inc. v. Arias & Arias Consultores, 270 S.W.3d 741, 749 (Tex.
App.—Dallas 2008, pet. denied) (citing Burger King, 471 U.S.
at 474). Notably, a defendant’s contacts with the forum state are
purposeful when aimed at getting substantial business from or in
the forum state. Moncrief, 437 S.W.3d at 153. And, again,
“[p]hysical presence in the state is not required.” Id. at 151.
As demonstrated below, the trial court’s exercise of jurisdiction
in this case is warranted because (1) Mitchell was part of a joint
venture with Freese & Goss, a Texas law firm, and conducted
16
substantial joint-venture business in Texas; and (2) Mitchell’s
tortious conduct occurred, in part, in Texas.
1.1.1. Mitchell was part of a joint venture with
Freese & Goss, a Texas law firm, and together
they conducted substantial business in Texas.
Though the parties in this case are lawyers, this dispute is not
about legal representation or the relationship between lawyers and
their clients. This dispute arises from the business relationship
between Mitchell and Freese & Goss, in the form of a joint venture
to process and administer the settlement of the PCB Litigation.
Mitchell knowingly and purposefully entered this joint venture
with Freese & Goss, a Texas law firm, and he admits that much of
the work of processing and administering the settlement occurred
in Dallas, Texas. Moreover, in furtherance of the joint venture,
Mitchell contacted and re-signed at least 30 Texas residents to be
represented as clients in the Texas-based settlement. See Factual &
Procedural Background.
The joint venture between Mitchell and Freese & Goss was
similar to the business arrangement in Rogers v. TexWest. In
Rogers, TexWest was a Texas corporation acting as the general
partner in a partnership with Rogers, a limited partner and the
nonresident defendant in the litigation. This Court examined
“whether [the limited partner’s] contacts with the forum, through
17
creation of the partnership, [gave] rise to specific jurisdiction.”
Because the general partner (TexWest) was a Texas LLC; because
the partnership had its principal place of business in Texas;
because the partnership managed its assets in Texas; and because
the partnership’s cash received was distributed by TexWest from
Texas, this Court concluded that the trial court had personal
jurisdiction over the nonresident limited partner. See 261 S.W.3d
at 820–822.
The defendant in Rogers argued that the actions of the
partnership should not form a basis for personal jurisdiction
because, as a limited partner, the defendant had no actual control
over the partnership’s actions. Id. But the Court rejected this
argument, finding the issue was the formation of the partnership
itself—something in which the appellant “had a substantial voice.”
Id. Relying on the Supreme Court’s decision in Michiana Easy
Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (2005), the defendant
also argued that a single contract—the partnership agreement—
could not form the basis for personal jurisdiction. Id. But the Court
rejected this argument too, explaining that Michiana dealt with a
single sales agreement. While a single sales agreement might not
form the basis for personal jurisdiction, under Michiana, a single
contract “may meet the purposeful availment standard in cases
where the agreement involves many contacts between the
18
defendant and the forum over a period of time.” Id. at 823. The
Court then noted that “the creation of a partnership was not a
unilateral activity. [The defendant] was an active party to
negotiating the contract, the substance of which [was] to be
performed in Texas.” Id.
Like the creation of the limited partnership in Rogers, the
formation of the joint venture in this case was not a unilateral
activity. Mitchell purposefully entered the joint venture knowing
that Freese & Goss was a Texas law firm. CR 17–19, 451. Mitchell
also knew that the files for the settlement were kept in Dallas, and
that most of the settlement work—i.e., most of the work pertaining
to the parties’ joint venture—was being performed in Dallas. CR
451, 458–459. Mitchell was also paid from the Dallas office. CR 20,
1245. And, as a joint venturer, Mitchell was partly responsible for
the administration of the settlement and had a greater degree of
control and influence in joint-venture operations than the limited
partner had in Rogers. Cf. 261 S.W.3d at 822. Therefore, just as the
trial court had a basis for exercising jurisdiction over the limited
partner in Rogers, the trial court has a basis for exercising
jurisdiction over Mitchell.
Furthermore, in addition to forming and entering a joint
venture with a Texas law firm, Mitchell actually sought substantial
business from Texas by seeking out and re-signing 30 Texas
19
residents as clients, in furtherance of the joint-venture settlement
the PCB Litigation. CR 18, 451, 466. This too, in itself, constitutes
“purposeful availment” of the forum state. See Moncrief, 437
S.W.3d at 153; Gray Ritter & Graham, PC v. Goldman Phipps,
PLLC, --- S.W.3d ---, 2015 WL 5895302, at *21 (Tex. App.—Corpus
Christi-Edinburg Oct. 8, 2015, no pet. h.).
In Gray Ritter, the court of appeals found that the defendant
worked with Texas lawyers and represented several Texas
residents in multidistrict litigation—client relationships from
which the defendant intended to benefit. See 2015 WL 5895302, at
*21. The court held that “the span and breadth of the litigation’s
nexus with Texas” outweighed the fact that the defendant did much
of his own legal work out of state. Id. Here, similarly, Mitchell
worked with Texas lawyers (Freese & Goss) and represented at
least 30 Texas residents in the settlement of mass tort litigation.
CR 23–24, 466, 799. Even if much of Mitchell’s own legal work
occurred out of state, the “span and breadth” of the settlement’s
nexus with Texas supports the trial court’s exercise of jurisdiction
over Mitchell. Cf. Gray Ritter, 2015 WL 5895302, at *21.
Mitchell’s relationship with these Texas clients and with
Freese & Goss was not isolated or fortuitous. Cf. IRA Resources,
221 S.W.3d at 596. To the contrary, Mitchell purposefully entered
the joint venture with Freese & Goss and he purposefully sought
20
out Texas residents to represent them in the joint-venture
settlement. CR 18, 451, 466. Based on his joint venture with a
Texas law firm and his efforts in re-signing at least 30 Texas
residents in furtherance of that joint venture, Mitchell should have
reasonably anticipated being haled into a Texas court for any
dispute that might arise from the joint venture. See Capital Tech.,
270 S.W.3d at 749.
Mitchell contends that his relationship with Freese & Goss
was a single, unilateral contact with Texas. Appellant’s Br. 18. But
the U.S. Supreme Court has explained that a contract represents
just one step in the parties’ relationship—a relationship that
includes the parties’ course of dealings before and after they form
the agreement and the consequences of the contract itself. Burger
King, 471 U.S. at 479. These consequences are “the real object” of
the agreement, and these surrounding circumstances must be
evaluated in determining personal jurisdiction. Id. Here, because
the parties’ joint venture involved (1) processing and administering
the settlement in or from Freese & Goss’s Dallas office and
(2) Mitchell’s efforts to contact and re-sign Texas residents as
clients in the joint-venture settlement, the circumstances
surrounding the joint-venture agreement support the Texas court’s
exercise of personal jurisdiction over Mitchell. Cf. Burger King, 471
U.S. at 479.
21
Mitchell cites Gordon & Doner, P.A. v. Joros, 287 S.W.3d 325,
328 (Tex. App.—Fort Worth 2009, no pet.), to argue that a joint
venture does not constitute purposeful availment of the forum
“where contract obligations are to be performed outside of Texas.”
Appellant’s Br. 19. But this misconstrues both the nature of the
parties’ joint venture and the holding in Joros.
In Joros the plaintiff had named a nonresident attorney and a
Texas law firm as defendants, then relied on the nonresident
attorney’s joint liability with the Texas law firm as a basis for the
court’s jurisdiction over the nonresident attorney. Joros, 287
S.W.3d at 328. The Fort Worth Court of Appeals held that imputed
liability cannot form the basis for personal jurisdiction because it
makes jurisdiction dependent upon the merits of the plaintiff’s
claim. Id. Here, Freese & Goss do not rely on any joint or imputed
liability as a basis for asserting the trial court has jurisdiciton over
Mitchell—because Mitchell is the only defendant remaining in this
suit. Here, the formation, implementation, and consequences of the
parties’ joint venture form the basis for the trial court’s specific
personal jurisdiction over Mitchell. Cf. Gray Ritter, 2015 WL
5895302, at *21.Thus, Joros is inapplicable.
Because Mitchell purposefully entered into a joint venture with
a Texas law firm; because much of the work of that joint venture
was performed in Texas; and because Mitchell, in furtherance of
22
the joint venture, acting either himself or through others,
purposefully sought out and re-signed Texas residents as clients in
the Texas-based settlement, the trail court has a sufficient basis for
exercising personal jurisdiction over Mitchell—and it should be no
surprise to him that he has been haled into a Texas court—for the
resolution of claims arising from Mitchell’s breach of the fiduciary
duties he owed to his joint venturer.
1.1.2. Mitchell’s tortious conduct included
deliberately seeking out and recruiting Texas
residents who were joint-venture clients, to
bring suit against Mitchell’s joint-venture
partner, Freese & Goss.
Texas has a strong interest in adjudicating causes of action
that involve tortious contacts with the state or tortious acts against
its residents. See Wright v. Sage Engineering, Inc., 137 S.W.3d 238,
254 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (“Texas has
a strong interest both in providing a forum for its residents and in
holding parties who committed tortious acts against its residents
accountable.”); Silbaugh v. Ramirez, 126 S.W.3d 88, 96 (Tex.
App.—Houston [1st Dist.] 2002, no pet.) (“Texas has an interest in
ensuring that its citizens are protected from breach of contract and
tortious acts committed by nonresidents conducting business in
Texas.”). Here, in addition to having business relationships and
activities in Texas, Mitchell committed tortious acts, in part, in
23
Texas. Thus, Mitchell’s tortious conduct also supports the trial
court’s exercise of personal jurisdiction.
The Supreme Court has held that Texas’s interest in protecting
its citizens against out-of-state tortfeasors may give rise to personal
jurisdiction. Moncrief, 414 S.W.3d at 152 (citing Michiana, 168
S.W.3d at 790–791). A defendant’s tortious contact supports
personal jurisdiction, for example, where the defendant’s contact
was not random or fortuitous, but was aimed at getting business in
or from the forum state. Id. at 152–153.
Here, Mitchell’s tortious contacts with Texas were not random
or fortuitous. Mitchell breached his fiduciary duty to his joint-
venture partner, Freese & Goss, by acting with and through his
intermediaries (McRae and Wade) to make misrepresentations to
joint-venture clients and to recruit some of those joint-venture
clients—including Texas residents—to bring at least seven Client
Lawsuits against Freese & Goss. See Factual & Procedural
Background. This constituted conduct aimed at getting “extensive
business in or from the forum state.” Cf. Moncrief, 414 S.W.3d
at 152–153.
Mitchell claims his tortious conduct cannot form a basis for
jurisdiction because it creates a circular “jurisdiction if guilty, no
jurisdiction if innocent” problem. See Appellant’s Br. 18. But
recruiting Texas residents who are joint-venture clients to bring
24
suits against Freese & Goss is not an effect of tortious conduct; it is
an act alleged to be tortious conduct. The trial court’s
determination of whether this act was tortious or not will have no
impact on the fact that the act occurred partially in Texas, forming
a basis for the Texas trial court to exercise jurisdiction.
Throughout his brief, Mitchell also relies on several
professional-negligence cases to argue that his tortious conduct
cannot support personal jurisdiction. E.g., Appellant’s Br. 24–25,
31–33 (citing, e.g., Bryan v. Gordon, 384 S.W.3d 908 (Tex. App.—
Houston [14th Dist.] 2012, no pet.); Proskauer Rose LLP v. Pelican
Trading, Inc., No. 14-08-00283-CV, 2009 Tex. App. LEXIS 667
(Tex. App.—Houston [14th Dist.[ Feb. 3, 2009, no pet.); Markette v.
X-Ray X-Press Corp, 240 S.W.3d 464 (Tex. App.—Houston [14th
Dist.] 2007, no pet.)).
None of those cases is applicable here. In those cases, the
tortious conduct at issue was the provision of substandard legal
work performed out of state. But this dispute is not about Mitchell’s
substandard representation of a Texas client, in legal work he
performed out of state. This is not at all a dispute between lawyer
and client. This is a dispute between business partners, arising
from a Texas-based joint venture. See CR 7–31. Here, Mitchell
breached his fiduciary duties to his joint-venture partner—Freese
& Goss—by, through his own actions or through others, contacting
25
former joint-venture clients in Texas, making misrepresentations to
them, and recruiting them to file at least seven different Client
Lawsuits against Freese & Goss (and other Appellees). CR 22 –24,
452–453, 1318, 1360. In effect, Mitchell sought to undo or alter the
Texas-based joint venture. That is, he sought to re-administer the
settlements that had been administered by the joint venture in and
from Freese & Goss’s Dallas office—by either obtaining more
attorney’s fees for himself or forcing the settlement to distribute
more money to clients.
These acts, whether the trial court determines they were
tortious or not, were acts that required Mitchell to make contacts
with Texas. Therefore, these acts support the trial court’s exercise
of specific personal jurisdiction over Mitchell.
1.2. Freese & Goss’s causes of action relate to Mitchell’s
purposeful contacts with Texas.
A trial court may exercise specific personal jurisdiction where
the defendant’s contacts with the forum state are substantially
related or connected to the plaintiff’s claims. See Moki Mac, 221
S.W.3d at 585. The court looks to the connection between the
alleged minimum contacts and the operative facts that will
underlie the pending suit. See id.
Here, the alleged minimum contacts include Mitchell’s
formation of a joint venture with Freese & Goss, a Texas law firm;
26
his involvement in the furtherance of that joint venture, which was
performed largely in Texas and which included Mitchell’s efforts to
re-sign clients—including Texas residents—for representation in
the joint-venture settlement; and Mitchell’s efforts to contact and
recruit some of these joint-venture clients—including Texas
residents—to bring lawsuits against Freese & Goss and others. See
Factual & Procedural Background.
Mitchell’s minimum contacts relate to the operative facts of
this suit because, in this suit, Freese & Goss (1) alleges Mitchell,
through his conduct, breached the fiduciary duties he owed to the
joint venture and to his joint-venture partner, Freese & Goss; and
(2) seeks a declaratory judgment dissolving the joint venture and
thereby ending the parties’ relationship with Mitchell, as it
pertains to the joint-venture clients. CR 18–21.
Because Mitchell’s contacts with Texas include his
involvement in the Texas-based joint venture and his
representation of Texas-resident clients, this suit seeking to
dissolve that joint venture—and to recover for Mitchell’s breach-of-
duties arising from that joint venture—is “substantially connected”
to Mitchell’s contacts with Texas. See Moki Mac, 221 S.W.3d at 585.
In his brief, Mitchell does not assert a lack of substantial
connection between the alleged minimum contacts and the
operative facts of this suit. Instead, he simply asserts a lack of
27
minimum contacts with Texas. He contends, for example: “the
claims against Mr. Mitchell have nothing to do with any act by him
in Texas.” Appellant’s Br. 33. Or, similarly, he contends: “all
[allegations] necessarily relate to conduct by Mr. Mitchell in
Mississippi.” Id. at 32. This theme continues throughout this
portion of Mitchell’s brief. See id. at 33–36. But these assertions are
about where Mitchell’s “contacts” occurred—not about whether the
alleged minimum contacts are substantially connected to the
operative facts of the suit.
Thus, Mitchell presents no argument or authority to challenge
the trial court’s implicit conclusion that Mitchell’s contacts with
Texas are related to the operative facts underlying this suit.
2. The trial court’s exercise of personal jurisdiction
comports with traditional notions of fair play and
substantial justice.
In addition to relying on “minimum contacts,” to satisfy due
process the exercise of personal jurisdiction must comport with
traditional notions of fair play and substantial justice. Asahi Metal
Indus. Co. v. Superior Court, 480 U.S. 102, 113 (1987); BMC
Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex.
2002). Determining this issue involves the evaluation of several
factors, including: (1) the burden on the nonresident defendant; (2)
the forum state’s interest in adjudicating the dispute; (3) the
28
plaintiff’s interest in obtaining convenient and effective relief; (4)
the interstate judicial system’s interest in obtaining the most
efficient resolution of controversies; and (5) the shared interest of
several states in furthering substantive social policies. Asahi Metal,
480 U.S. at 113.
“In this inquiry, it is incumbent upon the defendant to present
‘a compelling case that the presence of some consideration would
render jurisdiction unreasonable.” Guardian Royal Exchange
Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 231
(Tex. 1991) (quoting Burger King, 471 U.S. at 477). When a
nonresident has established minimum contacts with the forum
state, it will be only a rare case when the exercise of jurisdiction
does not comport with traditional notions of fair play and
substantial justice. Guardian Royal, 815 S.W.2d at 231.
Mitchell has failed to present a compelling case that
jurisdiction is unreasonable. He has presented no evidence, for
example, that this suit creates an undue burden. The “mere fact
that [he is] not physically located in Texas is not persuasive.”
Tempest Broad. Corp. v. Imlay, 150 S.W.3d 861, 877 (Tex. App.—
Houston [14th Dist.] 2004, no pet.); see also Ring Power Sys. v. Int’l
de Comercio Y Consultoria, 39 S.W.3d 350, 353–354 (Tex. App.—
Houston [14th Dist.] 2001, no pet.) (noting that “distance alone is
not ordinarily sufficient to defeat jurisdiction”).
29
As to the second factor, Texas has a strong interest in holding
out-of-state defendants responsible for torts committed against
Texas residents. See Wright, 137 S.W.3d at 254. This case involves
a tort committed against a Texas law firm (Freese & Goss)
involving other Texas residents (joint-venture clients in the Texas-
based settlement). Thus, Texas has a strong interest in holding
Mitchell responsible for his tortious conduct. Moreover, Texas has
an interest in ensuring and overseeing the proper wind-down of the
parties’ Texas-based joint venture.
As to the third and fourth factors, Freese & Goss have a strong
interest in resolving this matter expeditiously. Freese & Goss is
located in Dallas; the documents pertaining to the joint venture are
located in Dallas; and neither the Fees Lawsuit nor the Client
Lawsuits in Mississippi (see Factual & Procedural Background)
involves the issues presented in this lawsuit. Thus, the interests of
convenience and efficiency favor the resolution of this dispute in
the Dallas trial court.
Finally, as a matter of substantive social policy, it only makes
sense and is fair that a dispute (1) arising from a joint venture that
was being performed mostly in Texas, by and at the office of a
Texas law firm, and (2) involving tortious conduct by an out-of-
state partner in that Texas-based joint venture, who purposefully
30
contacted at least 30 Texas residents, may be litigated and resolved
in a Texas trial court.
CONCLUSION & PRAYER
For the reasons presented, Appellees respectfully ask the
Court to affirm the trial court’s exercise of personal jurisdiction
over Appellant Don Mitchell.
Respectfully submitted,
By: /s/ Jason P. Steed
Jeffrey Tillotson, SBN 20039200
LYNN TILLOTSON PINKER & COX
2100 Ross Avenue, Ste. 2700
Dallas, TX 75201
Phone: 214.981.3800
Fax: 214.981.3839
jtillotson@lynnllp.com
Mikel J. Bowers, SBN 02734550
Jason P. Steed, SBN 24070671
BELL NUNNALLY & MARTIN LLP
3232 McKinney Avenue, Ste. 1400
Dallas, Texas 75204-2429
Phone: 214.740.1400
Fax: 214.740.1499
mbowers@bellnunnally.com
jsteed@bellnunnally.com
COUNSEL FOR APPELLEES
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CERTIFICATE OF SERVICE
A true and correct copy of the foregoing has been served on
counsel for Appellant Don A. Mitchell through the Court’s
electronic filing system on November 4, 2015, in accordance with
Texas Rule of Appellate Procedure 9.5.
/s/ Jason P. Steed
Jason P. Steed
CERTIFICATE OF COMPLIANCE
I hereby certify that the relevant sections of this document
contain 5,655 words, and the document complies in all respects
with Texas Rule of Appellate Procedure 9.4.
/s/ Jason P. Steed
Jason P. Steed
2384429_1.docx / 9629.11
32