Rainbow Management of Hillsborough, Inc. v. Monserrato Trevino ( 2011 )

NUMBER 13-10-00127-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
RAINBOW MANAGEMENT OF
HILLSBOROUGH, INC. Appellant,
v.
MONSERRATO TREVINO, Appellee.
On appeal from the County Court at Law
No. 1 of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Benavides
Memorandum Opinion by Justice Benavides
In this interlocutory, accelerated appeal, appellant, Rainbow Management of
Hillsborough, Inc. (―Rainbow‖), a North Carolina corporation, appeals the denial of its
special appearance in the underlying premises liability suit filed in Hidalgo County by
appellee, Monserrato Trevino. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(7)
(Vernon 2008) (providing for appeals from interlocutory orders granting or denying a
special appearance); TEX R. APP. P. 28.1 (setting out the requirements for an
accelerated appeal). By one issue, Rainbow contends that the trial court erred in
denying its special appearance because the trial court did not have personal jurisdiction
over Rainbow. We reverse and render judgment granting the special appearance.
I. BACKGROUND
In his first amended original petition, Trevino alleges that in June 2007, his
employer, Velacorp Pharmacists Inc. d/b/a San Juan Pharmacy, made a reservation on
his behalf at the Holiday Inn Express, located in Hillsborough, North Carolina, and that
during his two week stay, he suffered ―a severe allergic reaction in the form of skin
lesions as a result of a dangerous condition which persisted‖ in his room. Trevino
asserted negligence and DTPA causes of action based on ―insect bites‖ that he allegedly
suffered during his stay. Trevino named the following as co-defendants: (1) his
employer; (2) Rainbow Hospitality, LLC d/b/a Holiday Inn Express;1 and (3) Rainbow
Management of Hillsborough, Inc, the appellant in this case. Rainbow Management
filed a special appearance challenging the personal jurisdiction of the Hidalgo County
Court. In support, Rainbow filed an affidavit of Anjan Desai, Rainbow‘s President, in
which Desai asserted:
1
Rainbow Hospitality, LLC also filed a special appearance which was denied by the trial court and
appealed in a separate cause, No. 13-09-00533-CV.
2
Rainbow Management is not a resident of Texas. In this regard, Rainbow
Management is a North Carolina corporation and Rainbow Management‘s
principal place of business is located in the State of North Carolina.
Rainbow Management does not have any offices or businesses located in
the State of Texas. Rainbow Management does not have any employees
or agents who work for Rainbow Management in the State of Texas and
Rainbow Management has never had any employees or agents who have
worked for Rainbow Management in the State of Texas. Rainbow
Management does not have any bank accounts in the State of Texas and
Rainbow Management has never had any bank accounts in the State of
Texas. Rainbow Management has never sent any advertising letters or
advertising fliers to individuals in the State of Texas and Rainbow
Management has never sent any other types of advertising materials to
individuals in the State of Texas. Rainbow Management does not place
orders to companies in the State of Texas for any of the supplies that
Rainbow Management uses in its business. Rainbow Management does
not ship any types of products to the State of Texas. The incident that
[Trevino] is alleging in this lawsuit occurred in the State of North Carolina.
Rainbow Management did not contact Mr. Trevino about Mr. Trevino‘s
coming to the State of North Carolina for the stay that forms the basis of
Mr. Trevino‘s allegations. No part of Mr. Trevino‘s agreement with
Rainbow Management to stay at the hotel where the incident [making] the
basis of Mr. Trevino‘s lawsuit occurred was to be performed in the State of
Texas.
In an unsworn response to Rainbow‘s special appearance, Trevino contended
that Rainbow ―failed to negate each of the jurisdictional allegations‖ and, further, that
Rainbow ―failed to negate the issues giving rise to the causes of action that relate
specifically to its contacts with Texas via internet activity that resulted in contractual
services.‖ Rainbow failed to receive notice of the hearing date for the special
appearance, so the special appearance was denied on February 26, 2010 without
Rainbow being present. Upon a granted rehearing of Rainbow‘s special appearance,
counsel for Rainbow asserted that Rainbow was ―the company that actually manages
the hotel in North Carolina.‖ Counsel for Trevino argued at the rehearing that personal
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jurisdiction was based on the interactive nature of the hotel website but presented no
evidence about the website. The trial court did not amend its previous order denying
Rainbow‘s special appearance, and this appeal ensued.
II. STANDARD OF REVIEW AND APPLICABLE LAW
Whether a court has personal jurisdiction over a nonresident defendant is a
question of law. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.
2002); Exito Elecs. Co. v. Trejo, 166 S.W.3d 839, 849 (Tex. App.–Corpus Christi 2005,
no pet.). If an order on a special appearance is based on undisputed or otherwise
established facts, we review the exercise of personal jurisdiction de novo. Exito, 166
S.W.3d at 849 (citing Happy Indus. Corp. v. Am. Specialties, Inc., 983 S.W.2d 844, 848
(Tex. App.–Corpus Christi 1998, pet. dism'd w.o.j.)).
―Texas courts may assert personal jurisdiction over a nonresident defendant only
if such jurisdiction is authorized by the Texas long-arm statute, and is consistent with
federal and state standards of due process.‖ Exito, 166 S.W.3d at 850.
Jurisdiction is proper [under due process standards] if a nonresident
defendant has established ―minimum contacts‖ with Texas and
maintenance of the suit will not offend ―traditional notions of fair play and
substantial justice.‖ The purpose of minimum-contacts analysis is to
protect the defendant from being haled into court when its relationship with
Texas is too attenuated to support jurisdiction. Focus is therefore upon
the defendant's activities and expectations. This analysis requires that
the defendant ―purposefully avail‖ itself of the privilege of conducting
activities in Texas, thus invoking the benefits and protections of Texas laws
such that the defendant could reasonably anticipate being called into a
Texas court. Jurisdiction will not attach if contacts are random, fortuitous,
or attenuated. The quality and nature of the contacts, rather than their
number, are the focus of this analysis.
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Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985); World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980); Int'l Shoe Co. v. Wash., 326
U.S. 310, 316 (1940); Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806
(Tex. 2002); Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815
S.W.2d 223, 226, 230 n.11 (Tex. 1991); Schlobohm v. Schapiro, 784 S.W.2d 355, 357
(Tex. 1990)).
A nonresident defendant's minimum contacts with Texas may confer either
general or specific jurisdiction. BMC, 83 S.W.3d at 795. Specific jurisdiction is
established where activities of the defendant in the forum are isolated or disjointed, but
where the cause of action in issue arises from a particular activity in the forum state. Id.
at 796. ―Even a single act or event, if it creates or gives rise to the plaintiff's cause of
action, may constitute sufficient minimum contact to support the exercise of specific
jurisdiction.‖ Exito, 166 S.W.3d at 850-51. ―This requirement for a ‗substantial
connection‘ between the plaintiff's cause of action and the defendant's contacts means
that those contacts, both with the litigation and the forum, must be meaningful, not
‗random, fortuitous, or attenuated.‘‖ Id. at 851 (quoting Ahadi v. Ahadi, 61 S.W.3d 714,
719 (Tex App.–Corpus Christi 2001, pet. denied)). The substantial connection between
the nonresident defendant and the forum state necessary for a finding of minimum
contacts must come about by action or conduct of the nonresident defendant
purposefully directed toward the forum state. Guardian Royal, 815 S.W.2d at 226.
General jurisdiction is established where the defendant's activities in the forum
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are continuing and systematic. BMC, 83 S.W.3d at 796; Guardian Royal, 815 S.W.2d
at 228; Schlobohm, 784 S.W.2d at 357. ―General jurisdiction requires a showing that
the defendant conducted substantial activities within the forum, a more demanding
minimum contacts analysis than for specific jurisdiction.‖ BMC, 83 S.W.3d at 797.
―While a plaintiff bears the initial burden of pleading allegations sufficient to bring
a nonresident defendant within the provisions of the long-arm statute, upon the filing of a
special appearance the nonresident defendant assumes the burden to negate all bases
of personal jurisdiction alleged by the plaintiff.‖ Exito, 166 S.W.3d at 851 (citing
Coleman, 83 S.W.3d at 807; Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203
(Tex. 1985) (per curiam)). ―Once the defendant has produced credible evidence
negating all bases of jurisdiction, the plaintiff bears the ultimate burden to establish that
the Texas court has personal jurisdiction over the defendant as a matter of law.‖
M.G.M. Grand Hotel, Inc. v. Castro, 8 S.W.3d 403, 408 n.2 (Tex. App.–Corpus Christi
1999, no pet.).
III. ANALYSIS
By its only issue, Rainbow contends that the trial court did not have personal
jurisdiction over it—neither specific or general—and therefore, the court erred in denying
its special appearance. We apply all facts to the law de novo. See Exito, 166 S.W.3d
at 849. It is undisputed that Rainbow is a non-resident corporation. Therefore, our
analysis must determine: (1) what grounds for jurisdiction were alleged by Trevino; (2)
if Rainbow sufficiently negated all such alleged grounds; and (3) if Rainbow did negate
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all such grounds, whether Trevino met his burden of showing that personal jurisdiction
existed as a matter of law.
In his petition, Trevino alleged that: (1) Rainbow had ―continuous and
systematic‖ contacts with the State of Texas (general jurisdiction); and (2) Rainbow
―engaged in activities constituting business in the state of Texas as provided by Section
17.042 of the Texas Civil Practice and Remedies Code, in that [Rainbow] contracted with
a Texas resident and performance of the agreement in whole or in part thereof was to
occur in Texas‖ (specific jurisdiction). Because these grounds for jurisdiction were
alleged in the petition, we now turn to the question of whether Rainbow sufficiently
negated each ground. See Exito, 166 S.W.3d at 851.
First, in response to Trevino‘s allegation that general jurisdiction existed because
Rainbow had ―continuous and systematic‖ contacts with Texas, Desai‘s affidavit states
that Rainbow had none of the contacts with Texas that would normally justify general
jurisdiction. Specifically, he affirms that Rainbow did not ship to or order supplies from
Texas, did not purposefully advertise in Texas, and did not have offices, employees, or
bank accounts in Texas. We conclude this is a sufficient negation of the alleged
continuous and systematic contacts necessary to establish general jurisdiction over
Rainbow. See Reiff v. Roy, 115 S.W.3d 700, 706-07 (Tex. App.–Dallas 2003, pet.
denied) (affirming a Colorado hotel‘s special appearance under nearly identical facts);
BMC, 83 S.W.3d at 797 (noting that general jurisdiction requires ―a more demanding
minimum contacts analysis than [that] for specific jurisdiction‖). Where the defendant
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negates by sufficient evidence the alleged ground for personal jurisdiction, the plaintiff
ultimately has the burden of establishing jurisdiction. M.G.M. Grand, 8 S.W.3d at 408
n.2. In this case, Trevino presented no evidence to the trial court concerning any of the
continuous and systematic contacts that Rainbow allegedly had within the State of
Texas. Therefore, Trevino failed to meet his burden, and we conclude that the trial
court did not have general jurisdiction over Rainbow.
Second, Trevino alleges that personal jurisdiction existed because Rainbow
entered into a contract with Trevino in which performance of the contract, in part, was to
occur within the State of Texas. At the special appearance rehearing, counsel for
Trevino indicated that this partial performance was the payment of the room rental fee
over an internet site accessed in Texas. Desai stated in his affidavit that ―[t]he incident
that [Trevino] is alleging in this lawsuit occurred in the State of North Carolina. Rainbow
Management did not contact Mr. Trevino about Mr. Trevino‘s coming to the State of
North Carolina for the stay that forms the basis of Mr. Trevino‘s allegations.‖ He
additionally affied that ―[n]o part of Mr. Trevino‘s agreement with Rainbow Management
to stay at the hotel where the incident [making] the basis of Mr. Trevino‘s lawsuit
occurred was to be performed in the State of Texas.‖ These sworn statements were
enough to negate Trevino‘s allegation that partial performance of a contract between
Trevino and Rainbow occurred in Texas, and, therefore, the burden rested on Trevino to
ultimately prove that: (1) such a contract existed; (2) partial performance was to take
place within the State of Texas; and (3) exercising jurisdiction would not violate
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traditional notions of fair play and substantial justice. See TEX. CIV. PRAC. & REM. CODE
ANN. § 17.042 (Vernon 2008). However, again, Trevino provided no affidavits,
contracts, internet web pages, or any evidence whatsoever to establish the truth of his
allegations. Because the burden had shifted to Trevino, we conclude that he did not
establish specific jurisdiction due to in-state performance of a contract as a matter of law.
We do not reach the issue of whether the hotel‘s website actually created minimum
contacts within the state of Texas, because Trevino did not offer any evidence about the
characteristics of the website on which we could base such holdings.
Based on the foregoing, we sustain Rainbow‘s issue on appeal. See Guardian
Royal, 815 S.W.2d at 226; Reiff, 115 S.W.3d at 706-07.
IV. CONCLUSION
We reverse and render judgment granting the special appearance, and we
dismiss Trevino‘s claims against Rainbow for want of personal jurisdiction.
________________________
GINA M. BENAVIDES,
Justice
Delivered and filed the
28th day of April, 2011.
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