quality-lease-and-rental-holdings-llc-v-greta-yvette-mobley-david ( 2014 )

COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
NUMBER 13-14-00064-CV
QUALITY LEASE AND Appellant,
RENTAL HOLDINGS, LLC
v.
GRETA YVETTE MOBLEY,
DAVID MICHAEL MOBLEY,
TEXAS QUALITY MATS, LLC,
TEXAS QUALITY GATE GUARD
SERVICES, LLC, AND QUALITY
LEASE AIR SERVICE, LLC, Appellees.
NUMBER 13-14-00066-CV
ALLAN MARTIN, Appellant,
v.
GRETA YVETTE MOBLEY,
DAVID MICHAEL MOBLEY,
TEXAS QUALITY MATS, LLC,
TEXAS QUALITY GATE GUARD
SERVICES, LLC, AND QUALITY
LEASE AIR SERVICE, LLC, Appellees
On appeal from the 329th District Court
of Wharton County, Texas.
MEMORANDUM OPINION
Before Justices Rodriguez, Garza and Benavides
Memorandum Opinion by Justice Garza
These two interlocutory appeals arise from a commercial dispute involving
appellees Greta Yvette Mobley, David Michael Mobley, Texas Quality Mats, LLC, Texas
Quality Gate Guard Service, LLC, and Quality Lease Air Service, LLC (collectively
“Mobley”). In appellate cause number 13-14-00064-CV, appellant Quality Lease and
Rental Holdings (“QLRH”) contends that the trial court erred in denying its motion to
compel arbitration. In appellate cause number 13-14-00066-CV, appellant Allan Martin
contends that the trial court erred in denying his special appearance. We affirm the trial
court’s denial of QLRH’s motion to compel arbitration, and we affirm in part and reverse
and render in part with respect to Martin’s special appearance.
I. BACKGROUND
Michael Mobley is a Texas resident who owned oilfield service companies Quality
Lease Service, LLC (“Quality Lease”) and Quality Lease Rental Service (“Quality Rental”).
QLRH is a Delaware limited liability company formed by Martin, a Florida resident. QLRH
is owned by Rocaceia, LLC (“Rocaceia”), which is also a Delaware limited liability
company formed and managed by Martin.
On December 31, 2012, QLRH entered into a “Purchase and Contribution
Agreement” (the “Purchase Agreement”) by which it agreed to obtain all the stock of
Quality Lease and Quality Rental from Mobley in exchange for around $60 million. Under
the Purchase Agreement, Mobley was to retain a minority interest in QLRH through a
holding company. The following arbitration clause was included as section 10.10 of the
Purchase Agreement:
Notwithstanding any provision of this Agreement to the contrary, all
disputes, controversies or claims (with the exception of Third Party Claims
and any claim for equitable relief, including but not limited to injunctive relief
or specific performance) arising out of or relating to this Agreement and the
transactions contemplated hereby shall be resolved by agreement among
the parties, or, if not so resolved within thirty (30) days then the dispute shall
be resolved by final and binding arbitration in Tampa, Florida pursuant to
the then existing Commercial Arbitration Rules of the American Arbitration
Association [“AAA”]. The arbitrator will apply the law of the State of Florida,
United States of America, as to both substantive and procedural questions.
Such arbitration will take place before a single arbitrator. The single
arbitrator shall be agreed upon by the parties to the arbitration. In the event
the parties cannot agree upon an arbitrator within twenty (20) calendar days
after the effective date of either party’s notice to arbitrate, the arbitrator will
be appointed pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. . . .
The Purchase Agreement also contained the following section 10.11, entitled “Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial”:
(a) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Florida without giving effect to any
choice or conflict of law provision or rule (whether of the State of Florida or
any other jurisdiction) that would cause the application of the Laws of any
jurisdiction other than those of the State of Florida.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR BASED UPON THIS AGREEMENT, THE OTHER TRANSACTION
DOCUMENTS (EXCEPT AS PROVIDED FOR OTHERWISE THEREIN)
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY,
TO THE EXTENT NOT ARBITRABLE IN ACCORDANCE WITH SECTION
10.10, MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE
UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF
FLORIDA IN EACH CASE LOCATED IN THE CITY OF TAMPA AND
COUNTY OF HILLSBOROUGH, AND EACH PARTY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN
ANY SUCH SUIT, ACTION OR PROCEEDING. . . . THE PARTIES
3
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR ANY PROCEEDING
IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT,
ACTION, OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN ANY INCONVENIENT FORUM.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR
THE OTHER TRANSACTION DOCUMENTS IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH
PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL
ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. . . .
The same day that the Purchase Agreement was executed, Martin and Michael
Mobley executed a separate “Employment Agreement” as contemplated in the Purchase
Agreement. Under the Employment Agreement, QLRH agreed to employ Mobley as its
president for three years.1 The Employment Agreement contained non-compete, non-
disclosure, and exclusivity clauses, as well as a waiver of jury trial similar to the one
included in the Purchase Agreement; however, the Employment Agreement did not
contain its own arbitration clause. The Employment Agreement stated:
This Agreement will in all respects be governed by, and construed in
accordance with the laws of the State of Texas. The parties agree that any
action brought by either party under or in relation to this Agreement, shall
be brought in, and each party agrees to and does hereby submit to the
jurisdiction and venue of, any state court located in the County of
Hillsborough, Florida (or such other county as the headquarters of [QLRH]
may then be located) or in the federal district court of the United States
District Court for the Middle District of Florida, Tampa Division.
1 The Employment Agreement further stated:
Notwithstanding anything in the foregoing to the contrary, [Mobley] understands and
acknowledges that his employment with [QLRH] is “at-will” which means that either
[Mobley] or [QLRH] may terminate the employment relationship and this Agreement at any
time, for any reason, including with or without Cause (as defined herein), subject to the
provisions set forth in this Agreement.
4
On April 6, 2013, QLRH notified Mobley that he was being placed on administrative
leave pending an investigation as to whether he had breached the Employment
Agreement and his fiduciary duty to QLRH by, among other things, diverting QLRH
business to other companies affiliated with Mobley. Two days later, QLRH filed suit
against Mobley in the United States District Court for the Middle District of Florida, alleging
breach of contract, breach of fiduciary duty, and fraud. QLRH alleged that Mobley had
violated various provisions of the Employment Agreement. QLRH also alleged that
Mobley made a number of false statements in connection with the sale of Quality Lease
and Quality Rental, including misrepresentations regarding the “revenue and earnings of
the QLRH-purchased entities.” Mobley moved to dismiss the federal court lawsuit,
asserting that QLRH’s claims were meritless and merely reflected Martin’s “buyer’s
remorse” over the December 31, 2012 transaction.
Mobley then filed the instant suit in the 329th District Court of Wharton County,
Texas, on April 10, 2013, asserting claims of conversion and invasion of privacy against
QLRH. Mobley later filed an amended petition naming Martin as an additional defendant
and asserting an additional claim of assault and battery. 2 Martin filed a special
appearance in the Texas suit contending that the court lacked personal jurisdiction over
him in his personal capacity. QLRH answered the Texas suit and filed counterclaims for
breach of the Employment Agreement, equitable rescission of the Purchase Agreement,
injunctive relief, and tort damages. QLRH then filed an agreed motion to dismiss the
2 Mobley’s First Amended Petition also set forth a claim of negligent hiring, supervision, and
retention. Mobley abandoned this claim, however, in his Third Amended Petition, which was the live
pleading at the time the trial court rendered the judgments on appeal.
5
Florida federal court lawsuit without prejudice. The agreed motion noted that suit was
pending in Texas state court and stated: “The parties agree that it is most efficient for all
disputes among them and their affiliates to be resolved in Texas.”3
Mobley’s pleadings in the Texas suit were initially limited to claims arising from the
Employment Agreement, which did not contain an arbitration clause, and claims for
equitable relief arising under the Purchase Agreement, which were explicitly excluded
under that contract’s arbitration clause. On November 4, 2013, however, Mobley filed a
Third Amended Petition raising claims at law that arose under the Purchase Agreement4
and therefore, according to QLRH, were subject to arbitration. In particular, Mobley
alleged in his Third Amended Petition that Martin “never intended to perform” his
obligations under the Purchase Agreement and that he fraudulently induced Mobley to
enter into the agreement.
Believing that these new claims were covered by the Purchase Agreement’s
arbitration clause, QLRH filed a motion to compel arbitration in the Texas suit. In
response to the motion, Mobley contended that QLRH had waived arbitration by filing its
suit in Florida federal court. After a hearing, the trial court denied the motion and QLRH
appealed. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.016 (West, Westlaw through 2013
3d C.S.) (permitting interlocutory appeals “under the same circumstances that an appeal
3 On June 14, 2013, Mobley’s counsel sent an arbitration demand letter to Martin and QLRH
alleging that: (1) Martin and QLRH “have not complied with the ‘Post-Closing Adjustment’ requirements
contained in Section 2.04 of the [Purchase] Agreement”; (2) Mobley “failed to account for and pay the costs
associated with housing units that were incurred by [Mobley]”; and (3) Martin and QLRH have “failed to
complete 2012 tax filings.” According to QLRH, Mobley never filed a formal demand for arbitration with
AAA and no arbitration was ever initiated on these claims.
4 The Third Amended Petition stated in its venue section that the lawsuit “arises out of business
dealings between the parties in Wharton County, Texas, and it requires the construction of, and seeks relief
under, [the Purchase Agreement] dated December 31, 2012, and other documents entered into on that
same date.”
6
from a federal district court’s order or decision would be permitted by 9 U.S.C. Section
16”); see also 9 U.S.C.A. § 16(a)(1)(C) (West, Westlaw through P.L. 113-92) (stating that
an appeal may be taken from, inter alia, an order denying an application to compel
arbitration). The trial court also denied Martin’s special appearance, and Martin appealed.
See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(7) (West, Westlaw through 2013 3d
C.S.) (permitting appeal of interlocutory order granting or denying special appearance).
II. MOTION TO COMPEL ARBITRATION
It is undisputed that the new claims raised in Mobley’s Third Amended Petition
“ar[ose] out of or relat[ed] to” the Purchase Agreement and were therefore covered by the
arbitration clause contained therein. The only question with regard to those claims,
therefore, is whether or not QLRH waived its right to arbitrate. Mobley asserts that QLRH
waived arbitration by, among other things: (1) filing claims related to the Purchase
Agreement in its Florida federal suit; (2) filing counterclaims related to the Purchase
Agreement in the Texas suit; (3) stating in the agreed motion to dismiss the federal suit
that “all disputes” between the parties would be litigated in Texas; (4) “ignoring” Mobley’s
arbitration demands; and (5) conducting discovery.
A. Standard of Review and Applicable Law
A party seeking to compel arbitration must establish that (1) there is a valid
arbitration agreement, and (2) the claims raised fall within that agreement’s scope. In re
Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005) (orig. proceeding). Federal
and Texas law strongly favor arbitration, and arbitration agreements that comport with
traditional principles of contract law will be upheld. Forest Oil Corp. v. McAllen, 268
S.W.3d 51, 56 (Tex. 2008). If a trial court finds that the claim falls within the scope of a
7
valid arbitration agreement, the court has no discretion but to stay its own proceedings
and compel arbitration. Id.
Generally, we review a trial court’s denial of a motion to compel arbitration for
abuse of discretion. Schlumberger Tech. Corp. v. Baker Hughes Inc., 355 S.W.3d 791,
800 (Tex. App.—Houston [1st Dist.] 2011, no pet.). However, when an appeal from a
denial of a motion to compel arbitration turns on a legal determination, we apply a de
novo standard. Forest Oil Corp., 268 S.W.3d at 55 n.9; see Rachal v. Reitz, 403 S.W.3d
840, 843 (Tex. 2013) (“When reviewing a denial of a motion to compel arbitration, we
defer to the trial court’s factual determinations that are supported by evidence but review
the trial court’s legal determinations de novo.”).
Where, as here, the trial court makes no written 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.”5 Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d
333, 337 (Tex. 2009) (citing BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795
(Tex. 2002)). We will affirm the ruling if it can be upheld on any legal theory supported
by the evidence. In re W.E.R., 669 S.W.2d 716, 716 (Tex. 1984).
B. Choice of Law
As an initial matter, we address what body of substantive law should be applied to
the question of whether QLRH waived arbitration under section 10.10 of the Purchase
Agreement. Mobley contends that Florida state law must apply because of the choice of
5 At the conclusion of the December 11, 2013 hearing on QLRH’s motion to compel arbitration, the
trial court orally recited several conclusions of law, to which QLRH refers extensively in its brief. However,
no written findings of fact or conclusions of law were filed, and we may not consider a trial court’s oral
comments at a hearing as a substitute for formal written findings of fact and conclusions of law. See In re
W.E.R., 669 S.W.2d 716, 716 (Tex. 1984) (citing TEX. R. CIV. P. 296).
8
law provision contained in the Purchase Agreement. QLRH contends that, although
Florida law would apply to substantive issues due to the choice-of-law provision, the
Federal Arbitration Act (“FAA”) applies exclusively to the question of whether arbitration
was waived.6
We agree with Mobley that Florida law applies to the question of whether
arbitration has been waived. As noted, the choice of law provision in section 10.11 of the
Purchase Agreement states:
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Florida without giving effect to any choice or
conflict of law provision or rule (whether of the State of Florida or any other
jurisdiction) that would cause the application of the Laws of any jurisdiction
other than those of the State of Florida.
QLRH argues that the FAA applies exclusively because the Purchase Agreement
concerned a transaction involving interstate commerce. See Jack B. Anglin Co., Inc. v.
Tipps, 842 S.W.2d 266, 269–70 (Tex. 1992) (stating that the FAA “applies to all suits in
state and federal court when the dispute concerns a contract evidencing a transaction
involving commerce”) (citing Perry v. Thomas, 482 U.S. 483, 489 (1987)). However, the
FAA does not state what is necessary to show that a party waived arbitration, and there
is nothing in the FAA precluding parties from contracting to have a particular body of
substantive law apply to the statutorily-unaddressed question of waiver. Moreover, the
6 QLRH further argues that, “given the nature of the trial court’s findings,” the choice of law issue is
irrelevant here because “[t]he trial court’s error was in misinterpreting which claims were subject to the
arbitration clause and incorrectly interpreting the claims at issue in the Florida litigation.” However, as
noted, the trial court’s oral comments do not constitute formal findings of fact or conclusions of law. See
id. In any event, we find that the choice of law issue is relevant because, unlike Texas law, Florida law
provides that a party claiming waiver of arbitration is not obligated to show that it was prejudiced. Compare
Raymond James Fin. Servs., Inc. v. Saldukas, 896 So. 2d 707, 711 (Fla. 2005) (“[T]here is no requirement
for proof of prejudice in order for there to be an effective waiver of the right to arbitrate.”) with Perry Homes
v. Cull, 258 S.W.3d 580, 589–90 (Tex. 2008) (“[A] party waives an arbitration clause by substantially
invoking the judicial process to the other party’s detriment or prejudice.”).
9
United States Supreme Court has held that the FAA does not pre-empt state arbitration
law because Congress’s enactment of the statute did not evince an intent to “occupy the
entire field of arbitration.” Volt Info. Sciences, Inc. v. Bd. of Trustees of Leland Stanford
Jr. Univ., 489 U.S. 468, 469 (1989).
For the foregoing reasons, we conclude that Florida substantive law applies to the
question of whether QLRH waived arbitration under section 10.10 of the Purchase
Agreement. We now proceed to consider the merits of that question.
C. Analysis
Waiver is the voluntary and intentional relinquishment of a known right or conduct
which implies the voluntary and intentional relinquishment of a known right. Raymond
James Fin. Servs., Inc. v. Saldukas, 896 So. 2d 707, 711 (Fla. 2005). The right to
arbitration, like any contract right, can be waived. Id. A party’s contractual right to
arbitration may be waived by actually participating in a lawsuit or taking action
inconsistent with that right. Id.
The . . . strong federal policy in favor of enforcing arbitration agreements is
based upon the enforcement of contract, rather than a preference for
arbitration as an alternative dispute resolution mechanism. Thus, the
question of whether there has been waiver in the arbitration agreement
context should be analyzed in much the same way as in any other
contractual context. The essential question is whether, under the totality of
the circumstances, the defaulting party has acted inconsistently with the
arbitration right.
Id. (quoting Nat’l Found. for Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d
772, 774 (D.C. Cir. 1987)) (internal quotations and citations omitted). Under Florida law,
“there is no requirement for proof of prejudice in order for there to be an effective waiver
of the right to arbitrate.” Id.
10
QLRH asserts that the claims it brought in its Florida federal suit were related solely
to the Employment Agreement and that, therefore, its litigation of those claims did not
constitute “action inconsistent” with its right to arbitrate under the Purchase Agreement.
See id. However, QLRH’s complaint in the federal suit alleged in part that Mobley
committed fraud by, among other things, making false representations prior to the sale.
The complaint alleged that QLRH “relied on Mobley’s false representations to its
detriment” and requested money damages. These claims appear to implicate the
circumstances surrounding the development and execution of the Purchase Agreement.
Even if we were to assume that QLRH’s federal claims related exclusively to the
Employment Agreement, those claims were nevertheless arbitrable. As noted, though
the Employment Agreement itself did not contain its own arbitration clause, the Purchase
Agreement’s very broad arbitration clause applied to “all disputes, controversies or claims
(with the exception of Third Party Claims and any claim for equitable relief, including but
not limited to injunctive relief or specific performance) arising out of or relating to this
Agreement and the transactions contemplated hereby.” Crucially, the Purchase
Agreement specifically defined “Transaction Documents” as including “the Mobley
Employment Agreement.” From our review of the entire Purchase Agreement, we are left
with no doubt that the transaction evidenced by the Employment Agreement was one of
the “transactions contemplated” by the Purchase Agreement. Accordingly, claims arising
from Mobley’s employment with QLRH—“with the exception of Third Party Claims and
any claim for equitable relief”—were subject to arbitration. It follows that, by filing suit in
Florida on claims arising from the Employment Agreement, and by requesting money
damages on those claims, QLRH acted inconsistently with its right to arbitrate. See id.
11
Further, QLRH filed counterclaims in Mobley’s Texas state suit which mirrored the
claims brought by QLRH in federal court. Those claims arose under the Employment
Agreement, and the counterpetition sought money damages.7 Moreover, the
counterpetition did not state that the counterclaims were brought subject to the trial court’s
ruling on the motion to compel arbitration. The filing of those counterclaims, therefore,
also constituted action inconsistent with QLRH’s right to arbitrate under the Purchase
Agreement. See id.
Because QLRH “acted inconsistently with the arbitration right,” id., the trial court
did not err in denying QLRH’s motion to compel arbitration.8 We overrule QLRH’s issue
on appeal.
III. SPECIAL APPEARANCE
A. Standard of Review
Issues of personal jurisdiction are questions of law and are reviewed de novo.
Retamco Operating, Inc., 278 S.W.3d at 337 (citing BMC Software Belg., 83 S.W.3d at
795). The plaintiff has the initial burden to “plead sufficient allegations to confer
jurisdiction.” Id. Once that burden is met, the defendant seeking to avoid the court’s
7 QLRH sought rescission of the Purchase Agreement on grounds that Mobley committed fraud by
making misrepresentations as to the assets of Quality Lease and Quality Rental. QLRH alleged that Mobley
made those misrepresentations “with the intention that [QLRH] rely on them,” and that “[QLRH] did rely on
them in purchasing [Quality Lease] and [Quality Rental], in executing the [Purchase] Agreement, and in
partially paying the consideration therefor in excess of $60 million.” Rescission is an equitable remedy,
see, e.g., Cruz v. Andrews Restoration, Inc., 364 S.W.3d 817, 826 (Tex. 2012), and the arbitration clause
at issue did not apply to actions in equity, but QLRH’s counterpetition also asked for money damages based
on “[e]ach of the acts and omissions of” Mobley. QLRH’s filing of this counterclaim therefore arguably also
constituted “action inconsistent” with the right to arbitrate. See Raymond James Fin. Servs., Inc. v.
Saldukas, 896 So. 2d 707, 711 (Fla. 2005).
8 In light of this conclusion, we need not address Mobley’s assertions that QLRH waived arbitration
by other means. See TEX. R. APP. P. 47.1; In re W.E.R., 669 S.W.2d at 716 (“Where findings of fact and
conclusions of law are not properly requested and none are filed, the judgment of the trial court must be
affirmed if it can be upheld on any legal theory that finds support in the evidence.”).
12
jurisdiction takes on the burden to negate “all potential bases for jurisdiction pled by the
plaintiff.” Id.
The defendant can negate jurisdiction on either a factual or legal basis.
Factually, the defendant can present evidence that it has no contacts with
Texas, effectively disproving the plaintiff’s allegations. The plaintiff can then
respond with its own evidence that affirms its allegations, and it risks
dismissal of its lawsuit if it cannot present the trial court with evidence
establishing personal jurisdiction. Legally, the defendant can show that
even if the plaintiff’s alleged facts are true, the evidence is legally insufficient
to establish jurisdiction; the defendant’s contacts with Texas fall short of
purposeful availment; for specific jurisdiction, that the claims do not arise
from the contacts; or that traditional notions of fair play and substantial
justice are offended by the exercise of jurisdiction.
Kelly v. Gen. Interior Const., Inc., 301 S.W.3d 653, 659 (Tex. 2010) (footnotes omitted).
When, as here, a trial court does not issue formal written findings of fact or
conclusions of law to support its special-appearance determination, we presume that all
factual disputes were resolved in favor of the trial court’s ruling. Spir Star AG v. Kimich,
310 S.W.3d 868, 871–72 (Tex. 2010).
B. Applicable Law
Non-residents are subject to the personal jurisdiction of Texas courts if: (1)
jurisdiction is authorized under the state’s long-arm statute; and (2) jurisdiction comports
with guarantees of the United States and Texas Constitutions. Id. Under Texas’s long-
arm statute, a non-resident defendant is within the court’s jurisdiction if the defendant
does business in the state. See PHC–Minden, L.P. v. Kimberly–Clark Corp., 235 S.W.3d
163, 166 (Tex. 2007). A non-resident “does business in this state” if the non-resident,
among other things, “commits a tort in whole or in part in this state.” TEX. CIV. PRAC. &
REM. CODE ANN. § 17.042(2) (West, Westlaw through 2013 3d C.S.). The Texas Supreme
Court has held that, under the “broad language” of Texas’s long-arm statute, personal
13
jurisdiction extends “as far as the federal constitutional requirements of due process will
permit.” BMC Software Belg., 83 S.W.3d at 795 (citing U–Anchor Adver., Inc. v. Burt, 553
S.W.2d 760, 762 (Tex. 1977)).
The exercise of personal jurisdiction is constitutional when (1) the non-resident
defendant has established minimum contacts with the forum, and (2) the exercise of
jurisdiction follows the traditional notions of fair play and substantial justice. PHC–
Minden, L.P., 235 S.W.3d at 166 (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945)). Only in rare cases will the exercise of jurisdiction not comport with fair play and
substantial justice when the non-resident defendant has purposefully established
minimum contacts with the forum state. Guardian Royal Exch. Assur., Ltd. v. English
China Clays, P.L.C., 815 S.W.2d 223, 231 (Tex. 1991).
Personal jurisdiction exists if the nonresident defendant’s minimum contacts give
rise to either specific jurisdiction or general jurisdiction. BMC Software Belg., 83 S.W.3d
at 795–96 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413–
14 (1984)). Specific jurisdiction is established if the defendant’s alleged liability arises
from or is related to an activity conducted within the forum. Id. In contrast, general
jurisdiction is present when a defendant’s contacts in a forum are continuous and
systematic so that the forum may exercise personal jurisdiction over the defendant even
if the cause of action did not arise from or relate to activities conducted within the forum
state. Id.
C. Analysis
In his special appearance, Martin argued, as he does on appeal, that: (1) the trial
court did not have general jurisdiction over him due to the fiduciary shield doctrine; and
14
(2) Mobley alleged insufficient facts to establish specific jurisdiction over him. In
response, Mobley did not dispute that the trial court lacked general jurisdiction over
Martin. Accordingly, we address only whether the court had specific jurisdiction over
Martin with respect to the claims raised by Mobley.9 We will do so on a claim-by-claim
basis. See Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 274 (5th Cir. 2006) (“[I]f
a plaintiff’s claims relate to different forum contacts of the defendant, specific jurisdiction
must be established for each claim.”); cf. Touradji v. Beach Capital P’ship, L.P., 316
S.W.3d 15, 26 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (noting that “when separate
claims are based on the same forum contacts, a separate analysis of each claim is not
required”); cf. also Davis Invs., VI, LP v. Holtgraves, No. 14–08–00222–CV, 2009 WL
975961, at *12 n.7 (Tex. App.—Houston [14th Dist.] Feb. 26, 2009, pet. denied) (mem.
op.) (agreeing “with other courts that generally a specific-jurisdiction analysis should be
performed on a claim-by-claim basis” but declining to do so because plaintiff’s claims all
arose from same facts and defendant asserted single basis for his special appearance to
each claim).
In his first amended petition, Mobley brought claims of conversion, invasion of
privacy, and assault and battery against all defendants, including Martin in his individual
capacity. Martin then filed his special appearance on August 22, 2013. Subsequently,
Mobley filed two additional amended petitions, the latter of which contained additional
9 The parties devote much briefing to the issue of whether the fiduciary shield doctrine precludes
personal jurisdiction over Martin. That doctrine “prevents the attribution to corporate agents of contacts
with Texas resulting solely from transacting the corporate principal’s business in the state.” Stull v. LaPlant,
411 S.W.3d 129, 134 (Tex. App.—Dallas 2013, no pet.). However, “courts applying the fiduciary shield
doctrine have limited its application to attempts to exercise general jurisdiction over a nonresident
defendant.” Cagle v. Clark, 401 S.W.3d 379, 390 (Tex. App.—Texarkana 2013, no pet.) (emphasis in
original). Because Mobley did not dispute that the trial court lacked general jurisdiction over Mobley, we
do not address whether the fiduciary shield doctrine applies.
15
allegations that Martin committed fraud in the inducement and breach of fiduciary duty.
Mobley argues on appeal that Martin did not preserve any jurisdictional challenge to the
fraud and breach of fiduciary duty claims because his special appearance was filed before
those claims were brought and therefore did not address those claims. We agree.
Although both parties filed responses, replies, and briefs on the personal jurisdiction
issue, Martin did not file any pleading amending or supplementing his special appearance
motion to address the fraud and fiduciary duty claims. See TEX. R. CIV. P. 120a(1) (stating
that a special appearance “may be amended to cure defects”). Martin therefore did not
preserve any appellate issue with regard to those claims.10 See TEX. R. APP. P. 33.1; see
also State v. C.J.F., 183 S.W.3d 841, 852 (Tex. App.—Houston [1st Dist.] 2005, pet.
denied) (“Although subject matter jurisdiction may be raised for the first time on appeal,
whether the trial court had personal jurisdiction may not.”). We overrule Martin’s issue on
appeal as to those claims, and we proceed to address the remaining claims—namely,
conversion, invasion of privacy, and assault and battery.
Mobley’s conversion and invasion of privacy11 claims alleged that Martin broke into
a safe owned by Mobley but kept at QLRH’s offices in El Campo, Texas, and that Martin
“wrongfully exercised dominion and control” over Mobley’s personal property, including
10 We note that specific jurisdiction as to QLRH’s fraud and fiduciary duty claims would be based
on a wholly separate and distinct set of “contacts” with Texas than the assault, conversion and invasion of
privacy claims. Accordingly, we believe QLRH was required to address jurisdiction as to the fraud and
fiduciary duty claims specifically in order to preserve that issue for appellate review. See TEX. R. APP. P.
33.1 (stating that, to preserve an issue for appellate review, a party must make a complaint to the trial court
with “sufficient specificity to make the trial court aware of the complaint, unless the specific grounds were
apparent from the context”); Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 274 (5th Cir. 2006) (“[I]f
a plaintiff’s claims relate to different forum contacts of the defendant, specific jurisdiction must be
established for each claim.”).
11 This type of invasion of privacy claim has been characterized as an “intrusion upon seclusion”
claim. Valenzuela v. Aquino, 853 S.W.2d 512, 513 (Tex. 1993). An unwarranted intrusion upon seclusion
is proved by showing (1) an intentional intrusion, physical or otherwise, upon another’s solitude, seclusion,
or private affairs or concerns that (2) would be highly offensive to a reasonable person. Id.
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“personal income tax returns and other business and financial papers,” which were
contained in the safe. The assault claim alleged that QLRH’s security guards, at Martin’s
direction, assaulted Mobley when he attempted to retrieve personal belongings from
QLRH’s offices after he had been placed on administrative leave.
As part of his response to Martin’s special appearance, Mobley filed an affidavit in
which he stated, in relevant part, as follows:
On April 6, 2013, I was notified that I had been administratively placed on
leave by [QLRH]. After this notification, I entered the premises located at
480 County Road 355, El Campo, Wharton County, Texas, the location of
many of my personal items.
I encountered Allan Martin while at this location. I know Mr. Martin as I
concluded a sale of my business to him in December 2012 and his
company, [QLRH], was leasing the premises located at 480 County Road
355, El Campo, Wharton County, Texas. [QLRH] is managed and
controlled by Allan Martin. [QLRH] conducts business in the State of Texas
and has over 75 employees and other assets located in Texas.
I informed Mr. Martin that I was there to retrieve my personal belongings.
Mr. Martin was there with armed security guards. I proceeded to go to my
office on the second floor when I saw·Mr. Martin motion to the security
guards to prevent my access to the second floor. I was placed in a
chokehold for several moments by the security guards. My son who was
with me was pepper sprayed by the security guards when he attempted to
help me. It was apparent to me based on the non-verbal conduct of Mr.
Martin that included his gestures and motions, that he was in control of and
directed the security guards in their activities including their assault of me.
Mobley’s son stated the following in an affidavit attached to the response:
When my father went to go to the second floor, I saw Mr. Martin motion to
the security guards, by the nod of his head, to halt my father from going
upstairs. Immediately after Mr. Martin motioned to the security guards, the
security guards grabbed my father and placed him in a chokehold.
Immediately, I moved to assist my father and I was pepper-sprayed by the
security guards.
In reply to Mobley’s response and affidavit evidence, Martin argued that the
evidence “unequivocally demonstrates” that the security personnel were not acting at his
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direction when they allegedly assaulted Mobley. In an affidavit attached to his reply,
Martin stated, in relevant part:
2. In my personal capacity, I did not employ The BlackStone Group
Partners LP [“BSG”], a licensed private security firm. [BSG] was hired
by [QLRH] as an independent contractor to protect its employees and
property after Michael Mobley had assaulted its employees and
threatened further physical harm to both. I did not direct nor did I
supervise the agents of [BSG].
3. On April 6, 2013, I did not instruct, encourage or direct agents of [BSG]
to assault Michael Mobley. I did observe that agents of [BSG] made
physical contact with Michael Mobley but this was only when he
refused to obey instructions that he was not to enter the second story
of the company’s building. This contact was not made, however, at
my request or direction.
4. I have never reviewed any family or personal records of Yvette Mobley
nor have I ever had in my personal possession any personal income
tax returns or financial records belonging to the plaintiffs.
Martin’s reply also included an affidavit by Richard Kent Morrison Jr., one of the security
guards involved in the alleged assault. Morrison stated, in relevant part:
3. On April 6, 2013, I was at the offices of [QLRH] when Michael Mobley
entered in an aggressive and agitated state after he had previously
been instructed by Allan Martin not to come to the company offices.
He was instructed by BSG personnel to remain calm and to wait for
law enforcement, which had been called and was on its way.
4. Michael Mobley ignored these instructions and attempted to force his
way to the second floor of the building. I was compelled to grab him
in order to protect BSG Officer Kain Kennedy, who Mobley charged
towards in a threatening and aggressive manner. BSG personnel did
not place Michael Mobley in a chokehold but rather restrained him with
a variation of a full-nelson, which places no pressure on the throat of
the subject but merely traps an aggressor’s arms and prevents him
from harming others.
5. My actions and those of other BSG security personnel were in no way
directed or suggested by Allan Martin but were solely the result of
Michael Mobley’s aggressive actions toward security personnel.
Throughout the entire incident, Allan Martin was standing behind the
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security personnel so that neither we nor Michael Mobley could see
him.
Martin further contended in his reply that, even if all of Mobley’s allegations are true, there
can be no tort liability because: (1) “the employer of an independent contractor that
provides security services is not vicariously liable for the contractor’s actions unless the
employer exercises detailed control over the security personnel”; and (2) “[i]nstructing
security to prevent access to company property by a terminated employee does not
constitute assault.”
We agree with Martin that, even if Mobley’s factual allegations are taken as true,
they are legally insufficient to support personal jurisdiction. In Fifth Club, Inc. v. Ramirez,
the Texas Supreme Court considered whether a nightclub owner was vicariously liable
for an assault committed against a patron by a security officer hired as an independent
contractor by the nightclub. 196 S.W.3d 788, 790 (Tex. 2006). The Court noted the
general rule that “an employer may become liable for the independent contractor’s
tortious acts only if the employer controls the details or methods of the independent
contractor’s work to such an extent that the contractor cannot perform the work as it
chooses.” Id. at 791 (citing Lee Lewis Const., Inc. v. Harrison, 70 S.W.3d 778, 783 (Tex.
2001)).12 In Fifth Club, an employee of the nightclub “signaled” to the security officer to
remove the patron, but there was no evidence that any representative of the nightclub
12 There is a recognized exception to this general rule for “nondelegable duties.” Fifth Club, Inc. v.
Ramirez, 196 S.W.3d 788, 795 (Tex. 2006) (citing Shell Oil Co. v. Khan, 138 S.W.3d 288, 292 (Tex. 2004)).
A duty is “nondelegable” when it “is imposed by law on the basis of concerns for public safety.” Id. (citing
MBank El Paso, N.A. v. Sanchez, 836 S.W.2d 151, 153 (Tex. 1992)). In such cases, “the party bearing the
duty cannot escape it by delegating it to an independent contractor.” Sanchez, 836 S.W.2d at 153. The
Fifth Club Court found that the duties performed by the security officer in that case were not nondelegable.
Id. at 795 (noting that “the Legislature has not identified security work as carrying such nondelegable duties
or carved out a special exception allowing business owners or employers to be held liable for the conduct
of their independent-contractor security personnel”). Likewise, we find that the security work at issue in this
case was not nondelegable.
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“gave more than general directions” to the security officer, nor any evidence that it
“retained the right to control the manner in which [the security officer] performed his job.”
Id. at 792. The Court held, therefore, that the nightclub could not be held vicariously liable
for the security officer’s conduct. Id. We find the facts alleged by Mobley in his assault
claim to be analogous to those at issue in Fifth Club. Mobley and his son stated that
Martin “motioned” or “nodded” to Morrison prior to the assault, but there is no evidence
that Martin controlled the “details or methods” of Morrison’s work, nor is there any
evidence indicating that Morrison was unable to perform the work as he chose. See id.
at 791. Mobley therefore failed to meet his burden to produce evidence establishing
personal jurisdiction as to the assault claim. See Kelly, 301 S.W.3d at 659.
As to Mobley’s invasion of privacy and conversion claims against Martin, we find
that Martin has conclusively negated all potential bases for jurisdiction. See Retamco
Operating, Inc., 278 S.W.3d at 337. In particular, Martin stated in his affidavit that he
“never had in [his] personal possession any personal income tax returns or financial
records belonging” to Mobley. Mobley did not produce any affidavit testimony or other
affidavit testimony refuting this assertion. Accordingly, Mobley failed to meet his burden
to produce evidence establishing personal jurisdiction as to the conversion and invasion
of privacy claims. See id. We sustain Martin’s issue as to these claims.
IV. CONCLUSION
In appellate cause number 13-14-00064-CV, we affirm the trial court’s judgment
denying QLRH’s motion to compel arbitration. In appellate cause number 13-14-00066-
CV, we reverse the trial court’s judgment denying Martin’s special appearance as to
Mobley’s assault and battery, invasion of privacy, and conversion claims, and we render
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judgment granting the special appearance as to those claims. The remainder of the trial
court’s judgment denying Martin’s special appearance is affirmed.
DORI CONTRERAS GARZA,
Justice
Delivered and filed the
19th day of June, 2014.
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