Industrial Product Formulators of America, Inc. v. Rockford Business Interiors, Inc. ( 2015 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-14-00493-CV
Industrial Product Formulators of America, Inc., Appellant
v.
Rockford Business Interiors, Inc., Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
NO. D-1-GN-12-003380, HONORABLE TIM SULAK, JUDGE PRESIDING
MEMORANDUM OPINION
Industrial Product Formulators of America, Inc. (Formulators) appeals a district court
order denying a special appearance1 through which it had challenged personal jurisdiction in a suit
brought against it by McCoy-Rockford, Inc. (Rockford) (incorrectly identified in the caption as
“Rockford Business Interiors, Inc.”).2 We will affirm.
Rockford is an Austin-based Texas corporation that provides commercial interior
products and services, including furnishing and installing flooring for businesses. In connection with
its work on a project in Austin in 2010 and 2011, Rockford purchased quantities of a floor adhesive
known as Aquaflex from the product’s manufacturer, Formulators, a California corporation whose
1
See Tex. Civ. Prac. & Rem. Code § 51.014(a)(7).
2
McCoy-Rockford, Inc. (Rockford) was formed in late December 2010 through the merger
of Rockford Business Interiors, Inc. (the entity identified in the caption as appellee) and McCoy,
a general partnership. As will become apparent shortly, some of the alleged events underlying
Rockford’s suit predated the merger and involved the former Rockford Business Interiors, Inc. entity.
However, as the surviving entity of the merger, Rockford succeeded to Rockford Business Interiors,
Inc.’s rights, title, and interests. See Tex. Bus. Orgs. Code § 10.008. See also infra pp. 17–18.
sole office is also located in that state. The product failed to perform to Rockford’s satisfaction,
and Rockford subsequently filed suit against Formulators in Travis County district court, seeking
damages under contract and warranty theories.
A nonresident defendant like Formulators3 is subject to the personal jurisdiction of
Texas courts if (1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the
exercise of jurisdiction does not violate federal and state constitutional due-process guarantees,4 a
limitation that also defines the outer reaches of the long-arm statute itself.5 “Personal jurisdiction
is consistent with due process ‘when the nonresident defendant has established minimum contacts
with the forum state, and the exercise of jurisdiction comports with traditional notions of fair
play and substantial justice.’”6 A defendant establishes “minimum contacts” when it “purposefully
avails” itself of the privilege of conducting activities within the forum state, thus invoking the
benefits and protections of its laws.7 “[T]he acts relied upon must be ‘purposeful,’” not “‘random,
3
See Tex. Civ. Prac. & Rem. Code § 17.041 (“nonresident” under Texas long-arm statute
includes a foreign corporation).
4
Kelly v. General Interior Constr., Inc., 301 S.W.3d 653, 657 (Tex. 2010) (citing Schlobohm
v. Schapiro, 784 S.W.2d 355, 356 (Tex. 1990)).
5
Id. (“The broad ‘doing business’ language in Texas’s long-arm statute allows the
trial court’s jurisdiction to ‘reach as far as the federal constitutional requirements of due process will
allow.’” (quoting Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex. 2007)); see
Tex. Civ. Prac. & Rem. Code § 17.042 (“In addition to other acts that may constitute doing business,
a nonresident does business in this state if the nonresident: (1) contracts by mail or otherwise with
a Texas resident and either party is to perform the contract in whole or in part in this state . . . .”).
6
Kelly, 301 S.W.3d at 657 (quoting Moki Mac, 221 S.W.3d at 575 (internal quotations
omitted) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945))).
7
Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005) (citing
Hanson v. Denckla, 357 U.S. 235, 253 (1958)).
2
isolated, or fortuitous’”;8 the nonresident defendant must “seek some benefit, advantage, or profit
by ‘availing’ itself of the jurisdiction”;9 and “it is only the defendant’s contacts with the forum that
count,” not the “‘unilateral activity of another party or a third person.’”10 Underlying these principles
is implied consent—“that by invoking the benefits and protections of a forum’s laws,” as opposed
to “structuring its transactions so as neither to profit from the forum’s laws nor be subject to its
jurisdiction,” a nonresident “consents to suit there.”11
To support the district court’s assertion of personal jurisdiction over Formulators,
Rockford pleaded and, in response to Formulator’s special appearance, presented evidence
concerning the parties’ dealings relating to the purchase and sale of Aquaflex and alleged
performance issues, with emphasis on acts by Formulators that occurred in Texas.12 This evidence
included the affidavit and live testimony of Christi Wade, an account executive with Rockford.
Wade indicated that the first contact between the two companies occurred in July or August 2010,
when Formulators CEO Benny Dickens telephoned her to solicit Rockford’s purchase of Aquaflex
for use in its Austin project. During that conversation, according to Wade, Dickens assured her that
high levels of moisture present in the concrete slab at the project site—a potential challenge to the
functionality of flooring adhesives—“would not be a problem.”
8
Id. at 785 (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984)).
9
Id.
10
Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)).
11
Id. (citing Burger King, 471 U.S. at 473; World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 297 (1980); American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 808
(Tex. 2002)).
12
See generally Kelly, 301 S.W.3d at 658–59 (explaining the burden-shifting framework that
governs judicial determination of challenges to personal jurisdiction).
3
Following this initial exchange, according to Wade, she and Dickens had several
other communications leading up to Rockford’s decision to purchase Aquaflex. These included,
Wade claimed, Dickens’s shipment of a sample of Aquaflex to Rockford in Austin at no charge.
Around the same time, Wade added, Dickens sent her an email, also in evidence, touting Aquaflex
as “the first water-proof adhesive to solve moisture related adhesive bond failures once and for
all.” Dickens attached to his email pricing information and a two-page “Product Information”
sheet containing additional representations regarding Aquaflex’s properties and performance. The
document also set forth a five-year limited warranty against defects in materials and workmanship.
Terms of the warranty included a limitation of remedies to “the replacement of finished flooring
materials, labor and adhesive in affected areas only and as determined by Formulators.”
Wade further testified that Dickens offered to send an individual to Rockford’s Austin
project site to assist it in its initial application of Aquaflex. He also invited her to send him a sample
of the tile that Rockford planned to use in its Austin project so he could perform tests to ensure
compatibility with Aquaflex. She did so, and claimed that Dickens thereafter made representations
about the test results that, in combination with his other communications, prompted Rockford to
purchase Aquaflex.
According to Wade, Rockford ultimately made three purchases of Aquaflex for use
on the Austin project. The transactions were memorialized in three purchase orders on Rockford
letterhead dated October 19, 2010; December 13, 2010; and February 10, 2011. In connection
with each transaction, Rockford issued a check corresponding to the amount of Aquaflex it was
purchasing (which totaled approximately $62,000), plus the cost of shipping each purchase to Texas.
Upon receipt of each payment, Formulators shipped the Aquaflex to Rockford in Austin, with an
invoice that served as a receipt.
4
There was also evidence that Formulators’s contacts with Texas continued once
Rockford began purchasing the Aquaflex. Following Rockford’s first purchase, according to Wade,
she requested that Dickens, per his earlier offer, dispatch someone to the job site to ensure that
Rockford is “prepping the floor to your standards” in advance of using Aquaflex. Dickens agreed
to do so, and Formulators retained a contractor from Austin, Thomas Hintz, and sent him to the
Austin project site to give such guidance to Rockford. Subsequently, in May 2011, after Rockford
began complaining of product failure, Formulators, through Dickens, similarly retained another
Austin-based contractor, Mike Hart, to inspect the project site and help remedy any problems.
Thereafter, according to Wade, Formulators sent Hart to the Austin project site for a second time.
As the problems continued to defy resolution, it is undisputed that Dickens himself traveled to
Austin in July 2011 to view the project. He was accompanied by a contractor from New Hampshire,
William Lepito, whom Dickens had directed to come to the site “to do an official forensic
investigation” on the flooring materials.
In addition to proof regarding Formulators’s immediate dealings with Rockford,
Rockford relied on evidence that Formulators had made sales in Texas to other customers.13 This
evidence reflected that between 2008 and 2012, for example, Formulators made sales to a total of
eleven Texas customers, with at least one per year, garnering total revenues in excess of $128,000.
The chief thrust of Formulators’s challenge to personal jurisdiction, at least as it
relates to this appeal, was that the extent of the company’s contacts with Texas closely resembled
the circumstances addressed in the Texas Supreme Court’s seminal opinion Michiana Easy Livin’
13
See Moki Mac, 221 S.W.3d at 577 (“In determining whether the defendant purposefully
directed action toward Texas, we may look to conduct beyond the particular business transaction at
issue: ‘[a]dditional conduct of the defendant may indicate an intent or purpose to serve the market
in the forum State.’”) (quoting Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1987)).
5
Country, Inc. v. Holten.14 In that case, a Texas resident had telephoned an Indiana-based RV dealer
(Michiana) that had no Texas presence and did not advertise here, ordered an RV that was
constructed and equipped outside Texas, sent payment in advance to Indiana, requested shipment
to Texas at the resident’s own expense, and then later attempted to sue Michiana in Texas for
misrepresentations it allegedly made during the phone call.15 The Texas Supreme Court held that
none of these facts sufficed as purposeful availment by Michiana to the Texas forum. It relied on
precedents emphasizing that a single or “isolated” unsolicited purchase of a product made from the
forum state, or the ensuing shipment of the product there, could not alone establish jurisdiction
because the contact, as such, had resulted from the unilateral actions of the purchaser rather than
those of the seller.16 Similarly, the court reiterated that “a single contract with a Texas resident
[cannot] automatically establish jurisdiction”17 and that the real issue was the extent to which the
contract contemplated or entailed jurisdictionally significant contacts with the forum state.18 Such
contacts were lacking, the supreme court observed, where “Holten [the Texas resident] paid for the
RV in advance and could not have planned on taking it to Indiana regularly for service”—in short,
14
168 S.W.3d 777.
15
See id. at 781, 784.
16
See id. at 786–87, 788 (citing Woodson, 444 U.S. at 295; CMMC v. Salinas, 929 S.W.2d
435, 436, 439 (Tex. 1996)).
17
Id. at 786 (citing Burger King, 471 U.S. at 475 n.18).
18
Id. at 787 (“It is true that in some circumstances a single contract may meet the
purposeful-availment standard, but not when it involves a single contact taking place outside the
forum state. A long-term franchise agreement may establish minimum contacts because, though
it stems from a single contract, it involves many contacts over a long period of time. Similarly, a
life-insurance policy may stem from a single contract, but necessarily involves a series of contacts
until death does the parties part.”) (citing Burger King, 471 U.S. at 480; McGee v. International Life
Ins. Co., 355 U.S. 220, 223 (1957)).
6
“[e]verything Michiana wanted out of the contract it had in hand.”19 Under those circumstances, the
court concluded, “it is hard to imagine what possible benefits and protection Michiana enjoyed from
Texas law” or even “how Michiana would have conducted its activities any differently if Texas had
no law at all.”20
Formulators emphasized that, similar to Holten, Rockford had paid for the product
in advance (which, Dickens testified, is Formulators’s standard practice) and had requested
shipment to Texas at Rockford’s own expense. Formulators also disputed some of the facts to
which Rockford’s Wade had testified. According to Dickens, it was Wade who had first initiated
contact with him regarding her company’s purchase of Aquaflex, not the other way around. Dickens
further sought to minimize the extent of Formulators’s sales to Rockford, characterizing them as but
a single transaction involving three shipments rather than three separate transactions. Beyond these
discrepancies, however, the evidence was largely undisputed, and several material facts were even
conceded by Dickens. For example, Dickens acknowledged that Formulators had retained an Austin-
based independent contractor, Hintz, to demonstrate how Rockford should prepare its floor surface
in advance of using Aquaflex; later retained another Austin-based contractor, Hart, to address
Rockford’s claims of performance issues; sent yet a third contractor, Lepito, to Austin to conduct
a forensic analysis of the alleged failures; and that he had also traveled to Austin himself to
personally address these concerns. These actions, Dickens explained, had been undertaken “as
a customer service” to Rockford and as “part of honoring [Formulators’s] warranty.” He also
19
Id.
20
Id.
7
acknowledged that by selling to Rockford and other Texas residents, he had hoped to gain “further
referrals” that would afford Formulators more “opportunity” to “sell our Aquaflex product” in Texas.
After hearing evidence, the district court took the matter under advisement and
thereafter signed an order denying Formulators’s special appearance. The court subsequently
made findings of fact and conclusions of law. Among other facts, the district court found that
(1) from 2008 through 2012, “Formulators routinely did business in Texas”; (2) during this
same period “Mr. Dickens personally traveled to Texas at least twice to attend to customer
accounts”; (3) “Formulators made three significant sales of Aquaflex to Rockford, in Texas”; (4) in
connection with the sales to Rockford “Formulators hired three individuals—two of whom were
Texas residents—to help Formulators implement its agreement with Rockford”; (5) “Formulators
solicited Rockford in Texas”; (6) Dickens first called Wade in Texas; (7) Formulators “sent
Rockford information about Aquaflex, including product information, pricing, and warranty
information”; (8) “Formulators sold Aquaflex to Rockford in Texas with a five-year warranty”; and
(9) “Formulators admittedly hired” the three contractors “to visit the Project site [in Texas] as part
of its customer service and in an effort to honor its warranty agreement with Rockford.” These facts,
the court concluded, sufficed as “minimum contacts” that would support “specific jurisdiction”—i.e.,
that each of Rockford’s claims arises from or is related to the same contacts or acts through which
Formulators purposefully availed itself of conducting activities in Texas21—as contrasted with the
much more extensive showing required for “general jurisdiction.”22
21
See Kelly, 301 S.W.3d at 658.
22
See Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014) (“‘[a] court may assert general
jurisdiction over foreign . . . corporations . . . when their affiliations with the State are so “continuous
and systematic” as to render them essentially at home in the forum State’”) (quoting Goodyear
Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011)).
8
On appeal, Formulators continues its efforts to portray this case as essentially a
reprise of Michiana: an unsolicited, one-time sale of a product neither preceded by any purposeful
availment of the Texas forum, nor entailing any thereafter.23 Formulators insists that it “neither
solicits nor advertises or markets its products in Texas,” although it acknowledges that the
evidence regarding “who solicited who[m]” in the present case “is disputed.” It similarly asserts that
“[e]vidence of attempts to establish ongoing relationships with and to serve a Texas market is wholly
lacking,” that the “trial court misrepresents” that Dickens visited Texas “‘to attend to customer
accounts’ in general,” and that the parties entered into only “a single transaction,” not three.
These assertions are inconsistent with the district court’s fact findings, which are to
the effect that Formulators had advertised for and solicited business from Rockford in Texas and had
entered into ongoing relationships with Rockford and others that contemplated “customer service”
and “honor[ing] of its warranty” there. To the extent Formulators is seeking to challenge the legal
sufficiency of the evidence supporting these findings, we conclude that the evidence, previously
23
Formulators also devotes much of its briefing to negating general jurisdiction, but that
theory, again, was not the basis of the district court’s order. We focus instead on Formulators’s
arguments that are germane to specific jurisdiction. We similarly do not unnecessarily belabor
instances where Formulators appears to invoke inapposite principles governing general jurisdiction
to support its conclusions regarding specific jurisdiction. See Tex. R. App. P. 47.1.
9
summarized, abundantly supports the district court’s resolution of any factual discrepancies.24 In
fact, many of the material facts were undisputed, if not wholly conceded by Formulators’s Dickens.
As for the legal effect of these underlying facts as they bear upon personal
jurisdiction,25 the district court’s findings that Formulators advertised for and solicited Rockford’s
purchase of Aquaflex distinguishes this case from Michiana and brings it more closely in line with
cases like Moki Mac River Expeditions v. Drugg.26 In that case, the Texas Supreme Court held that
a nonresident guide service (Moki Mac) had purposefully availed itself of the Texas forum by
24
When reviewing a challenge to the legal sufficiency of the evidence supporting a fact
finding, we view the evidence in the light most favorable to the challenged finding and indulge
every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822
(Tex. 2005). We must credit favorable evidence if a reasonable fact-finder could and disregard
contrary evidence unless a reasonable fact-finder could not. Id. at 827. “‘“No evidence” points
must, and may only, be sustained when the record discloses one of the following situations: (a) a
complete absence of evidence of a vital fact; (b) the court is barred by rules of law or of evidence
from giving weight to the only evidence offered to prove a vital fact; (c) the evidence offered to
prove a vital fact is no more than a mere scintilla; (d) the evidence establishes conclusively the
opposite of the vital fact.’” Id. at 810 (quoting Robert W. Calvert, “No Evidence” and “Insufficient
Evidence” Points of Error, 38 Tex. L. Rev. 361, 362–63 (1960)); see also Merrell Dow Pharm., Inc.
v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). More than a scintilla of evidence exists to support a
finding when the evidence would allow reasonable and fair-minded people to differ in their
conclusions. Gharda USA, Inc. v. Control Solutions, Inc., 464 S.W.3d 338, 347 (Tex. 2015). In a
nonjury trial or hearing, “the trial court, as fact finder, ‘is the sole judge of the witnesses’ credibility
and the weight to be given their testimony, and is free to resolve any inconsistencies.’” Iliff v. Iliff,
339 S.W.3d 74, 83 (Tex. 2011) (quoting Montgomery Indep. Sch. Dist. v. Davis, 34 S.W.3d 559,
567 (Tex. 2000)); see also City of Keller, 168 S.W.3d at 819 (fact-finder “may choose to
believe one witness and disbelieve another. Reviewing courts cannot impose their own opinions
to the contrary.”).
25
Which is a question of law that we review de novo. See Moncrief Oil Int’l Inc. v. OAO
Gazprom, 414 S.W.3d 142, 150 (Tex. 2013) (“The ultimate question of whether a court has personal
jurisdiction over a nonresident defendant is a question of law we review de novo.”); Schlais
v. Valores Corporativos Softtek, S.A. de C.V., No. 03-11-00188-CV, 2012 WL 1499488, at *3
(Tex. App.—Austin Apr. 25, 2012, no pet.) (mem. op.) (“Whether, based on the facts, a court can
exercise personal jurisdiction over a nonresident defendant is ultimately a question of law that is
reviewed de novo.”).
26
221 S.W.3d 569.
10
sending brochures and a release form to a Texas family (the Druggs) in the course of soliciting its
business, “establish[ing] channels of regular communication with its Texas customers” through
emailed advertisements, and placing advertisements in publications calculated to reach the Texas
market.27 Although Moki Mac’s advertisements to the Texas market were admittedly more extensive
than Formulators’s were shown to have been here, the salient distinctions between that case
and Michiana were that “the evidence in this case indicates that Moki Mac does intend to serve
the Texas market,”28 that “Moki Mac’s contacts with Texas did not result . . . from the mere fortuity
that the Druggs happened to reside here,”29 and that Moki Mac “sought and obtained profit from
Texas residents, with whom the company maintained communications.”30 The same is true of
Formulators’s actions in Texas, at least in regard to Rockford.
Perhaps even more critical are the district court’s findings regarding Formulators’s
warranty and its efforts to honor that obligation. Formulators does not dispute—indeed,
acknowledges—that “as a customer service” and “as part of honoring [Formulator’s] warranty,” it
retained three contractors (Hintz, Hart, and Lepito) to provide services at Rockford’s project site
in Austin, and that its CEO Dickens similarly traveled to Austin to personally address product
complaints. Formulators insists, however, that only the October 2010 visit by Hintz is relevant
to our analysis because the others took place after Rockford’s alleged injury occurred. For this
proposition that we can only look to visits to Texas that occurred prior to Rockford’s injury, not
27
Id. at 577–78.
28
Id. at 577.
29
Id. at 578.
30
Id.
11
after, Formulators relies on this Court’s decision in MedCost, L.L.C. v. Loiseau, but that case spoke
only to general jurisdiction, not specific jurisdiction.31 An even more critical flaw in Formulators’s
contention is that this Court’s assertion in Loiseau regarding the period for assessing contacts was
abrogated by the Texas Supreme Court eight years ago.32
Formulators’s post-injury contacts with Texas are probative of the nature of the
relationship that Formulators contemplated with Rockford under its warranty and customer
relationship. Such facts demonstrate that Formulators intended to establish the sort of “continuing
relationships and obligations” with the Texas-based Rockford that constitute purposeful availment
of that forum,33 including performing future activities in Texas consistent with the parties’ respective
rights and obligations under the limited warranty it issued.34
31
See 166 S.W.3d 421, 434 (Tex. App.—Austin 2005, no pet.) (“An assertion of general
jurisdiction compels a more demanding minimum-contacts analysis than an assertion of specific
jurisdiction and requires a showing of substantial activities within the forum state. . . . The relevant
contacts are those up to the time of injury.”), abrogated by PHC-Minden, L.P. v. Kimberly-Clark
Corp., 235 S.W.3d 163, 169 (Tex. 2007).
32
See PHC-Minden, 235 S.W.3d at 169 (“We first determine the appropriate time period for
assessing contacts for purposes of general jurisdiction, an issue on which our courts of appeals are
in conflict. . . . We conclude that the relevant period ends at the time suit is filed.”).
33
See, e.g., Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338–39
(Tex. 2009) (“sellers who reach out beyond one state and create continuing relationships and
obligations with citizens of another state are subject to the jurisdiction of the latter in suits based on
their activities”); Moki Mac, 221 S.W.3d at 578 (“the contacts of ‘[s]ellers who “reach out beyond
one state and create continuing relationships and obligations with citizens of another state”’ are
purposeful rather than fortuitous”) (quoting Michiana, 168 S.W.3d at 785 (quoting Keeton, 465 U.S.
at 770)). See also Shell Compania Argentina de Petroleo, S.A. v. Reef Exploration, Inc., 84 S.W.3d
830, 841 (Tex. App.—Houston [1st Dist.] 2002, pet. denied) (“A trial court should examine a
defendant’s contacts with the forum state over a period that is reasonable under the circumstances,
up to and including the date the suit was filed.”).
34
See, e.g., Michiana, 168 S.W.3d at 787 (recognizing that certain contracts may represent
purposeful availment where they contemplate multiple contacts with the forum state) (citing Burger
King, 471 U.S. at 480; McGee, 355 U.S. at 223).
12
On appeal, Formulators does not dispute the remaining element of specific
jurisdiction—that each of Rockford’s claims arises from or is related to these same minimum
contacts through which Formulators purposefully availed itself of conducting activities in Texas.35
However, Formulators challenges the remaining requirement for personal jurisdiction—whether
the assertion of jurisdiction by a Texas court is consistent with traditional notions of fair play
and substantial justice.36 In making this determination, we “consider [Formulators’s] contacts in
light of: (1) ‘the burden on the defendant’; (2) ‘the interests of the forum state in adjudicating the
dispute’; (3) ‘the plaintiff’s interest in obtaining convenient and effective relief’; (4) the interstate
or international judicial system’s interest in obtaining the most efficient resolution of controversies;
and (5) the shared interest of the several nations or states in furthering fundamental substantive social
policies.”37 “‘Only in rare cases, however, will the exercise of jurisdiction not comport with fair play
and substantial justice when the nonresident defendant has purposefully established minimum
contacts with the forum state.’”38 “To defeat jurisdiction,” Formulators must present “‘a compelling
case that the presence of some consideration would render jurisdiction unreasonable.’”39
35
See Kelly, 301 S.W.3d at 658.
36
See Spir Star AG v. Kimich, 310 S.W.3d 868, 878 (Tex. 2010).
37
Id. (quoting Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C.,
815 S.W.2d 223, 231 (Tex. 1991)).
38
Id. (quoting Guardian Royal, 815 S.W.2d at 231 (citing Burger King, 471 U.S. at 477)).
See also id. at 872 (“Although this ‘fair play’ and ‘substantial justice’ test is well known to
appellate courts, the expression is imprecise. It gains meaning, however, when viewed in light of
the ‘minimum contacts’ a defendant has with the forum. . . . Significant contacts suggest that the
defendant has taken advantage of forum-related benefits, while minor ones imply that the forum
itself was beside the point. When a nonresident defendant has purposefully availed itself of the
privilege of conducting business in a foreign jurisdiction, it is both fair and just to subject that
defendant to the authority of that forum’s courts.”).
39
Id. at 878–79 (quoting Guardian Royal, 815 S.W.2d at 231).
13
The district court concluded that “it would be reasonable to exercise jurisdiction
over Formulators . . . given Rockford’s interest in obtaining relief, Texas’s interest in adjudicating
this dispute, the interstate judicial system’s interest in obtaining the most efficient resolution of
controversies, and the shared interests of the several States in furthering fundamental substantive
social policies.” It additionally concluded that “there is no undue burden on Formulators in
adjudicating the dispute in Texas.” Formulators urges that these conclusions are erroneous because
there is “uncontradicted evidence” that requiring it to litigate in Texas would be “ruinous” for it. In
support, Formulators relies entirely on the following testimony from Dickens:
Q. . . . What would happen if Formulators were forced to litigate this case
here in Travis County?
A. Frankly, it would be financially devastating.
Q. How so?
A. Well, as I previously testified, there are three people in the office, and of
the three, I do 99 percent of the work. I answer all -- all customer calls, all invoices,
all documentation. I pay all the bills.
Q. Is this, say, a distracting experience for you?
A. Absolutely. I’ve actually had inquiries today that I cannot follow up on,
and several that probably have already cost me business even today.
...
Q. . . . If Rockford were obliged to litigate this case in Orange County,
California, which is Formulators’[s] place of residence, is that something that would
be as burdensome?
A. No, of course not.
Q. Why is that?
A. Well, that’s my location. It’s close to my office. I have access to running
my business there.
14
We cannot conclude that the district court erred. The fact that Formulators is
headquartered in California cannot, by itself, defeat jurisdiction,40 as it can be said of all
nonresident defendants that subjecting them to suit in Texas will impose some burden on them.41
In considering the weight to be given Dickens’s claims of imminent “ruin” from Texas litigation due
to Formulators’s particular circumstances, the district court could have considered, among other
things, its findings that Dickens had previously traveled to Texas to attend to customer accounts,
including Rockford’s, and had also traveled to Texas for the special appearance hearing, all without
evident “ruin” to Formulators. This evidence falls far short of conclusively demonstrating “ruin”
or undue burden if Formulators is required to litigate in Texas.42
The remaining factors weigh heavily in Rockford’s favor. Texas has a significant
interest in exercising jurisdiction over this controversy because it arises from injuries Rockford, a
Texas resident, sustained from the Aquaflex product that Formulators purposefully sold in Texas
40
See Kimich, 310 S.W.3d at 879 (citing Guardian Royal, 815 S.W.2d at 231 (“Nor is
distance alone ordinarily sufficient to defeat jurisdiction: ‘modern transportation and communication
have made it much less burdensome for a party sued to defend himself in a State where he engages
in economic activity.’” (quoting McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957)))).
See also TexVa, Inc. v. Boone, 300 S.W.3d 879, 891 (Tex. App.—Dallas 2009, pet. denied) (“The
fact that the appellees reside and work in California and it would be burdensome to litigate in Texas
does not offend traditional notions of fair play and substantial justice. . . . [T]his argument has
frequently been rejected as a basis for denying personal jurisdiction.”).
41
See Moncrief Oil, 414 S.W.3d at 155.
42
See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (“When a party
challenges the legal sufficiency of the evidence supporting an adverse finding on an issue on
which it had the burden of proof, the appealing party can prevail only if it demonstrates that the
evidence conclusively establishes each of the required elements of an issue as a matter of law.”);
Havner, 953 S.W.2d at 711 (no evidence points may only be sustained when evidence establishes
conclusively the opposite of the vital fact).
15
and that Rockford, as well as other Texas companies, purchased and used here.43 Any burden on
Formulators is mitigated by the convenience to Rockford of litigating in the forum where it allegedly
sustained injuries.44 Additionally, Rockford “has an interest in resolving this controversy in Texas
because that is where the litigation began.”45 California does not have as significant an interest as
Texas does in resolving a claim for injuries sustained in Texas by a Texas resident.46 In this case,
the burden on Formulators is minimal and is outweighed by Rockford’s and Texas’s interests in
adjudicating the dispute here.47 Formulators has not presented “a compelling case that the presence
of some consideration would render jurisdiction unreasonable.”48
43
See Kimich, 310 S.W.3d at 879 (“Texas has a significant interest in exercising jurisdiction
over controversies arising from injuries a Texas resident sustains from products that are purposefully
brought into the state and purchased by Texas companies.”); IMV Techs. v. Ingram, LLC, No. 10-13-
00150-CV, 2013 WL 6051268, at *5 (Tex. App.—Waco Nov. 14, 2013, no pet.) (mem. op.) (same).
44
See, e.g., Moncrief Oil, 414 S.W.3d at 155 (burden on defendant somewhat mitigated by
convenience to Texas resident of litigating in forum where trade secrets were allegedly appropriated
and used); IMV Techs., 2013 WL 6051268, at *5 (“Texas has an interest in adjudicating disputes
involving Texas residents . . . .”); see also Keeton, 465 U.S. at 776 (“it is beyond dispute that [a
forum] has a significant interest in redressing injuries that actually occur within the State”).
45
Retamco, 278 S.W.3d at 341.
46
See, e.g., Moncrief Oil, 414 S.W.3d at 156 (“no other jurisdiction has as significant an
interest as Texas does in resolving a claim for a tort committed in Texas against a Texas resident”).
47
See Kimich, 310 S.W.3d at 879–80.
48
Id. at 879.
16
In its sole remaining argument on appeal, Formulators re-urges a challenge it
made below to the district court’s subject-matter (as opposed to personal) jurisdiction.49 The focus
of this challenge, first raised by Formulators during the hearing on its special appearance, was
that Rockford’s live pleadings at the time had identified the plaintiff not as Rockford, but as
the company’s predecessor, Rockford Business Interiors, Inc., which had ceased to exist upon the
2010 merger through which Rockford was formed.50 Relying on evidence of the corporate filings
reflecting these transactions, Formulators insisted that the plaintiff, then identified as “Rockford
Business Interiors, Inc.,” lacked “standing” because it was a defunct entity. Following the hearing,
but before the district court had ruled on the special appearance, Rockford filed a pleading
amendment clarifying that it was the proper plaintiff. Thereafter, the district court signed its
order denying Formulators’s special appearance (and, impliedly, any challenge to subject-matter
jurisdiction as well), and the court’s findings of fact and conclusions of law reflect its determination
that “Plaintiff McCoy-Rockford, Inc.” is the proper party.
On appeal, Formulators urges that its “uncontroverted documentary
evidence” compels dismissal of the cause for want of subject-matter jurisdiction. To the contrary,
Formulators’s evidence instead confirms that Rockford (i.e., McCoy-Rockford, Inc.) is the successor
49
Although Formulators has invoked our jurisdiction solely under Tex. Civ. Prac. & Rem.
Code § 51.014(a)(7), which is addressed to an interlocutory order that “grants or denies the special
appearance of a defendant under Rule 120a, Texas Rules of Civil Procedure,” we have jurisdiction
to address whether the district court had subject-matter jurisdiction over the underlying cause. See,
e.g., State v. Cook United, Inc., 464 S.W.2d 105, 106 (Tex. 1971) (grant of appellate jurisdiction to
review interlocutory order extends to prior rulings bearing on appealable order’s validity); see also
Rusk State Hosp. v. Black, 392 S.W.3d 88, 94 (Tex. 2012) (subject-matter jurisdiction can be raised
for the first time on appeal, including in context of interlocutory appeals) (citing Waco Indep. Sch.
Dist. v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000) (citing Texas Ass’n of Bus. v. Texas Air Control
Bd., 852 S.W.2d 440, 445 (Tex. 1993))).
50
See supra note 2.
17
in interest to Rockford Business Interiors, Inc., and is the proper plaintiff, and that the asserted
“standing” defect amounted merely to an innocuous misnomer.51 Formulators has made no attempt
to demonstrate that it was somehow misled or placed at some disadvantage by the misnomer.52
Regardless, Rockford’s pleading amendment to correct the misnomer related back to the filing of
its original petition.53 The district court had subject-matter jurisdiction over the cause.
We affirm the district court’s order overruling Formulators’s special appearance.
__________________________________________
Bob Pemberton, Justice
Before Justices Puryear, Pemberton, and Field
Affirmed
Filed: October 14, 2015
51
See In re Greater Houston Orthopaedic Specialists, Inc., 295 S.W.3d 323, 325 (Tex. 2009)
(per curiam) (“A misnomer occurs when a party misnames itself or another party, but the correct
parties are involved.”).
52
See Reddy P’ship/5900 N. Freeway LP v. Harris Cnty. Appraisal Dist., 370 S.W.3d 373,
376–77 (Tex. 2012) (per curiam) (“When the correct party sues or is sued under the incorrect name,
‘the court acquires jurisdiction after service with the misnomer if it is clear that no one was misled
or placed at a disadvantage by the error.’” (quoting Sheldon v. Emergency Med. Consultants, I., P.A.,
43 S.W.3d 701, 702 (Tex. App.—Fort Worth 2001, no pet.)).
53
See id. at 377 (citing In re Greater Houston Orthopaedic Specialists, 295 S.W.3d at 326).
18