PetroSaudi Oil Services Ltd. v. William Hartley ( 2020 )

Opinion issued December 29, 2020
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-19-00607-CV
———————————
PETROSAUDI OIL SERVICES LTD., Appellant
V.
WILLIAM HARTLEY, Appellee
On Appeal from the 164th District Court
Harris County, Texas
Trial Court Case No. 2018-03171
OPINION
In this interlocutory appeal, William Hartley, a welder, sued PetroSaudi Oil
Services, Ltd. (PetroSaudi), among other defendants, under the Jones Act for injuries
he allegedly received while working on the M/V PetroSaudi Saturn, a drillship that
was anchored off the coast of Trinidad and Tobago. PetroSaudi filed a special
appearance, asserting that it was a nonresident of Texas and that Texas courts could
not exercise personal jurisdiction over it consistent with due process guarantees. The
trial court denied PetroSaudi’s special appearance. In three related issues, PetroSaudi
argues that: (1) it did not waive its special appearance; (2) the jurisdictional evidence
is not legally and factually sufficient to support the trial court’s exercise of personal
jurisdiction over it; and (3) its Houston-based subsidiary corporation is not its alter
ego, and therefore that company’s contacts with Texas cannot be imputed to
PetroSaudi.
We affirm.
Background
Hartley, a Louisiana resident, is a welder. On May 1, 2015, he was working
on the M/V PetroSaudi Saturn, a drillship anchored off the coast of Trinidad and
Tobago. Hartley alleges that he was seriously injured while carrying a large piece of
steel across the vessel. Specifically, he alleges that, as he lowered the piece of steel
to the deck, “he felt a knife-like sensation in his groin,” and he had to be transported
to a hospital onshore, where he underwent surgery for a hernia. He alleges that his
“current injuries include, but are not limited to, a right-side inguinal hernia, as well
as pain in his neck, back, bilateral buttocks, and left foot.”
2
On January 17, 2018, Hartley filed suit against several defendants: Spencer
Ogden, Inc., Spencer Ogden, Inc. d/b/a Spencer Ogden USA Inc., Procurement
Services (Delaware) Inc., and the appellant here, PetroSaudi Oil Services Ltd.1
Hartley asserted negligence and gross negligence claims under the Jones Act. He
alleged that his injuries were caused by the defendants’ breach of their duty to
provide a seaworthy vessel, and he alleged that, because he was injured while in the
service of the vessel, the defendants owed him a non-delegable duty to provide him
with the benefits of maintenance and cure.
Hartley alleged that two of the Spencer Ogden entities—Spencer Ogden, Inc.
and Spencer Ogden, Inc. d/b/a Spencer Ogden USA Inc.—were Texas corporations
with their principal places of business in Houston, and he alleged that Procurement
Services (Delaware) Inc. was a Delaware corporation with its principal place of
business in Houston. He alleged the following with respect to PetroSaudi:
Defendant PetroSaudi Oil Services Ltd, is a foreign company doing
business within the State of Texas for the purpose of accumulating
monetary profit, that is at home in the State of Texas. This Defendant
holds itself out as doing business in the State of Texas at, and operates
out of an office and conducts business via Procurement Services
(Delaware) Inc. This Defendant was the owner, operator and/or
manager of the vessel on which [Hartley] was working . . . at the time
of his injuries.
1
Hartley amended his petition in May 2018 and added claims against two additional
entities: Spencer Ogden International Ltd. and Saturn Drillships Pte Ltd. Hartley
later nonsuited his claims against these two companies. Neither of these defendants
is a party to this interlocutory appeal.
3
Hartley alleged, alternatively, that PetroSaudi was registered in the Cayman Islands
and did not maintain a principal office in Texas.
Hartley also alleged that the trial court could exercise personal jurisdiction
over all of the defendants. Specifically, he alleged:
Plaintiff’s claims and causes of action arise out of, are related to or are
connected with each defendant’s contacts with the State of Texas and
enable this Court to exercise specific personal jurisdiction over
Defendants without violating any defendant’s due process rights under
the United States Constitution. Such minimum contacts with the State
of Texas supporting the exercise of specific personal jurisdiction over
Defendants include, but are not limited to, the following. PetroSaudi
Oil Services Ltd. has an office located at [an address on the North Sam
Houston Parkway in Houston]. PetroSaudi Oil Services Ltd. contracted
with Griffin, a Houston-based company providing travel solutions to
the energy industry, for travel used by the Plaintiff [after his injury].
PetroSaudi Oil Services Ltd. through the use of an agent and/or an
intermediary solicits, hires, and employs a variety of workers on its
offshore vessel through a company located in Houston, Harris County,
Texas: Defendant Spencer Ogden Inc. PetroSaudi Oil Services Ltd.
contracted with Houston-based Defendant Spencer Ogden Inc. to
provide both training to Plaintiff and the services of qualified medics to
perform emergency medical treatment. As such, this Court has specific
jurisdiction or in the alternative, the quality and characteristics of both
Defendants’ contacts should deem them to be “at home” in the State of
Texas.
Hartley alleged that both PetroSaudi and Procurement Services have an office at the
same address in Houston. Hartley also alleged that the trial court could exercise
personal jurisdiction over PetroSaudi on an alter ego theory, alleging that PetroSaudi
controls the actions of Procurement Services to the degree that they are not separate
and distinct corporate entities. He alleged that Procurement Services is “at home” in
4
Texas because its principal office is located in Houston, and he alleged that
Procurement Services’ contacts with Texas can be imputed to PetroSaudi.
PetroSaudi filed a special appearance on July 18, 2018, which it amended
three times: on July 30, 2018, on September 11, 2018, and on February 26, 2019. It
argued that it lacked sufficient minimum contacts with Texas to support the exercise
of either general or specific personal jurisdiction, and it argued that Hartley’s
jurisdictional allegations in his petition were conclusory and failed to bring
PetroSaudi within the scope of the Texas long-arm statute. PetroSaudi also argued
that, even if it did have sufficient minimum contacts with Texas, exercising personal
jurisdiction over it would offend traditional notions of fair play and substantial
justice. Specifically, PetroSaudi argued that “[n]one of the events giving rise to this
litigation occurred in Texas,” that Hartley was a resident of Louisiana and had not
sought medical treatment in Texas, and that no relevant medical or fact witnesses
resided in Texas.
PetroSaudi attached the verification of its president, Timothy Myers, who
averred that PetroSaudi was incorporated in the Cayman Islands; that it does not
have an agent for service of process in Texas; that it does not have any shareholders,
officers, or directors who are Texas residents; that it has never maintained an office
in Texas; that it has never been licensed to do business in Texas; that it does not
solicit business in Texas; that it has never owned, rented, or leased any real or
5
personal property in Texas; that it has never maintained business records in Texas;
that it has never conducted banking business, “record keeping functions,” accounting
work, or administrative functions in Texas; it has never had a shareholders’ or
directors’ meeting in Texas; it has never applied for a loan or acted as a guarantor
on a bank loan in Texas; it has never paid franchise taxes in Texas or filed an income
tax return in Texas; it has never published advertisements in Texas; and it has never
initiated any litigation in Texas.
Myers also averred that PetroSaudi “has never managed or operated the M/V
PetroSaudi Saturn, a Singapore-flagged drill ship that has never operated from any
port in Texas”; it has never chartered the vessel to a Texas company; it has never
entered into a drilling contract with a Texas company; and it has never “been
awarded work through companies with offices located in Texas for work to be
performed in whole or in part within the State of Texas.” Myers averred that
PetroSaudi “sends employees to Texas for initial ISM training and certification, and
occasionally sends employees to Texas to attend other training courses, typically at
the request of the employee involved.” Myers further averred that none of the acts
complained of by Hartley occurred in Texas.
The parties conducted jurisdictional discovery, which included taking the
depositions of Myers and several employees of Procurement Services. PetroSaudi
filed its third amended special appearance in February 2019 and attached additional
6
evidence in support. This evidence included excerpts from Myers’ deposition. Myers
testified concerning the corporate structure of the PetroSaudi family of companies
and the role that each company plays. PetroSaudi Oil International is the parent
company of PetroSaudi Oil Services, which is the parent company of Procurement
Services, an entity that “provided services to other entities in the group,” and
PetroSaudi Oil Services (Venezuela) Ltd., an entity that was responsible for
managing and operating the M/V PetroSaudi Saturn. Myers testified that he is
PetroSaudi’s only employee and he works in London. He described the companies’
functions as follows:
I’m PetroSaudi Oil Services, Ltd., I’m looking out for—let PetroSaudi
(Venezuela) run the rig. Procurement Services here in Houston does its
thing procuring, supporting Venezuela. My PetroSaudi Oil Services
hat, I’m looking for new business opportunities . . . which would be,
you know, anywhere in the world.
He testified that he is a director of both Procurement Services and PetroSaudi
(Venezuela), but he does not “get involved in the daily activities” of Procurement
Services, that he has “minimal” involvement with that office, and that the employees
of Procurement Services “pretty much run themselves,” although they do ultimately
report to him.2
2
Myers also testified that, after the M/V PetroSaudi Saturn was shut down in late
2017 or early 2018, Procurement Services closed its Houston office, and the
remaining employees continued working on a contract basis from their homes.
7
Myers testified that a Charter Agreement existed between Saturn Drillships
Pte Ltd., which owned the vessel, and PetroSaudi (Venezuela), which operated the
vessel, but PetroSaudi did not have any contracts with either PetroSaudi (Venezuela)
or Procurement Services. Myers was asked during his deposition whether some of
the people who worked on the vessel were employed by PetroSaudi, and he
responded:
A handful, yes. And that was more of an administrative error. Up to a
certain point, they were all PetroSaudi (Venezuela). There were some
personnel changes, and someone on the form had accidentally put
PetroSaudi Oil Services, Ltd. . . . Basically, I mean, it was—it was just
an employment contract, and it just happened to say PetroSaudi Oil
Services, Ltd. They were treated just like all the other employees of
PetroSaudi (Venezuela). It was just a—I would call it a typo in a
document.
Myers acknowledged that some of the individuals working on the vessel were Texas
residents. Myers testified that “PetroSaudi (Venezuela) via Procurement Services”
provided supplies and support for the vessel, and “PetroSaudi (Venezuela) would
then pay Procurement Services for having provided that good or service.” With
regard to personnel for the vessel, PetroSaudi (Venezuela) would inform
Procurement Services of the different positions for which it needed crew.
Procurement Services would then contract with staffing companies, such as Spencer
Ogden, the company that hired Hartley, to provide qualified personnel. Procurement
Services paid Spencer Ogden based on a specified rate, and Spencer Ogden would
then pay the individual.
8
Myers testified that PetroSaudi never rented or leased any real or personal
property in Texas, but Procurement Services leased office space in Houston. He
stated that PetroSaudi did not have any employees in Houston. During his
deposition, Myers was asked about the email addresses, signature blocks, and
LinkedIn profiles of several Procurement Services employees. Each of these
employees had an email address with a PetroSaudi.com domain name. The email
signature blocks of each of these employees stated “PetroSaudi Oil Services, Ltd”
and then listed the North Sam Houston Parkway address in Houston, and each of
these employees listed PetroSaudi Oil Services as their employer on their LinkedIn
profile. Myers testified that all employees in the PetroSaudi family of companies
used the same domain name for their email addresses. He testified that he did not
know why the employees, in their email signature blocks and on their LinkedIn
profiles, stated that they were PetroSaudi employees because they were Procurement
Services employees, and he stated that he did not tell the employees to use
PetroSaudi’s name in this manner.
PetroSaudi also attached excerpts from the deposition of Chris Hudson,
Procurement Services’ Technical and Marine Manager, who was responsible for,
among other things, maintaining all regulatory requirements for the vessel and
making sure all maintenance on the vessel was performed timely and properly. He
testified that he had held this position with Procurement Services since May 2014
9
and that he has never been employed by PetroSaudi Oil Services. Hudson
acknowledged that he had testified differently in a deposition for a prior personal
injury case in which Procurement Services was a defendant.3 Hudson testified that
Myers is the only employee of PetroSaudi who he knows of; and when Hudson was
asked what PetroSaudi does, he stated, “I’m not sure what PetroSaudi Oil Services
does now that we’re separating it from Venezuela [PetroSaudi (Venezuela)]. I just
always kind of lumped them in.” He stated that specific orders and assignments for
workers on the vessel would come from PetroSaudi (Venezuela). Hudson testified
that he did not know anything about the capitalization of Procurement Services and
that its only assets were “some desks and some chairs, and that’s about it.”
Nysia Gaskin, Procurement Services’ former Human Resources Manager,
testified that Procurement Services would contract with staffing companies like
Spencer Ogden to obtain personnel to perform work on the vessel when it was
docked in places like Panama or Trinidad and Tobago. She stated that, to staff the
vessel, PetroSaudi (Venezuela) would tell her what positions it needed filled and
3
In the deposition for the underlying case, Hudson testified that he understood the
question asked of him in the deposition in the prior case to be about what he was
doing in Panama, where the plaintiff’s injury had occurred. Hudson testified that he
stated, “I get a paycheck from Procurement Services, and I was down there
managing a project for PetroSaudi.” He further testified that when he received a
copy of his deposition testimony to review, there was a mistake, but he was told that
he could not change his testimony. Hartley attached a copy of Hudson’s deposition
from the prior case as an exhibit to his response to PetroSaudi’s special appearance.
In that deposition, Hudson stated that his current employer was PetroSaudi and that
he had been working there since May 2014.
10
where the vessel was located, and depending on that information, Gaskin would “go
out and source not just Spencer Ogden but whoever we had actual service
agreements with and see who can get me the best labor at the best price with the
right credentials in a timely manner.” Gaskin testified that she believed that anyone
who was hired in this manner was an employee of Spencer Ogden; she stated that
these individuals were not employees of Procurement Services. Spencer Ogden
would invoice Procurement Services for payment of the workers, and Procurement
Services’ accounting department would verify the individual’s hourly rate and
handle payment to Spencer Ogden, which would then pay the worker. Gaskin
testified that the contract under which Hartley was hired was between Spencer
Ogden and PetroSaudi (Venezuela).
In response to PetroSaudi’s special appearance, as amended, Hartley argued
that PetroSaudi “undeniably conducts business” in Texas. He argued that this
business included having an office in Houston; holding training sessions for
employees in Houston; having a management team, a crewing manager, and a human
resources manager all located in Houston; and “performing work directly related to
the services provided by Hartley in Houston.” He argued that the invoices sent by
Spencer Ogden for payment for his services were sent to “PetroSaudi’s Houston
office.” These invoices, which Hartley attached as exhibits to his response, were
addressed to “PetroSaudi Oil Services Ltd.” and then stated an address on the North
11
Sam Houston Parkway in Houston—the same address that Procurement Services
used. Hartley also attached other documents addressed to “PetroSaudi Oil Services
Ltd.” that had the Houston address, including emails from Procurement Services
personnel that stated “PetroSaudi Oil Services Ltd” and the Houston address in the
signature block, travel documentation for Hartley’s return trip to the United States
following his injury, and compliance documents for the vessel’s “Safety
Management Certificate” and “International Ship Security Certificate.”4
Hartley also attached an email sent in September 2017 by Gaskin on behalf of
Myers to a list of undisclosed recipients. This email was entitled “PetroSaudi Oil
Services Town Hall Conference call script” and summarized an earlier conference
call that Myers had had with employees. Myers informed the employees that “[their]
current contract with PDVSA ends on November 7th this year [2017],” that Myers
“and the Executive Team in London have done their [utmost] to secure a contract
extension in Venezuela,” but because that did not appear likely, “the lack of business
prospects is likely to result in a restructuring of the business.” Myers stated that if a
contract extension could not be secured, the vessel would sail to Trinidad—where
4
Hartley also attached Myers’ complete deposition as an exhibit to his special
appearance response. In his deposition, Myers speculated that the reason Spencer
Ogden addressed its invoices for Hartley’s work in this manner was because Brian
Davis, Procurement Services’ Crewing Manager, stated, in his email signature
block, that he worked for PetroSaudi Oil Services and listed the Houston address.
Myers speculated that the same thing occurred with the organization that completed
the vessel’s required certificates.
12
the onboard equipment would be dismantled—and then on to Turkey to be sold for
scrap. Myers stated, “Regrettably this would have an impact on your employment
with the Company and although the HR team are looking at this on an individual
role basis I can provide some overall direction on what this is likely to look like.”
Myers stated:
For onshore employees including the Houston and Venezuelan offices
who are needed to closeout operations/offices, terminations are likely
to take place at the start of December. This could mean from now until
then the officer workers will work towards closing out items relating to
the [vessel] and the offices.
Once a more concrete plan is in place the HR team will be in a position
to communicate with each employee individually on their expected
termination date. Please understand that this may take some time.
It brings me great disappointment to have to deliver this news. I am
immensely proud of Oil Services who have worked tirelessly over the
years to perform the best job possible given the very difficult working
environment. We should all be proud of what we have achieved and it
is with regret that things did not turn out differently and I have had to
communicate such news today.
I will be flying to Houston next week to work with the management
team to make more detailed plans. We will continue to keep you
updated on any changes.
Gaskin’s email signature block identified her title—Human Resources Manager—
and stated “PetroSaudi Oil Services Ltd.” and the North Sam Houston Parkway
address.
Hartley also argued that PetroSaudi hired at least two Texas residents to work
on the M/V PetroSaudi Saturn, and he attached copies of these individuals’
13
employment agreements, which were entitled “PetroSaudi Oil Services Ltd (The
“Company”) Employment Agreement” and which listed Houston as the employee’s
“Point of Origin.” He further argued that PetroSaudi recruited Texas residents to
work on the vessel through both Procurement Services and Spencer Ogden and that
this constituted doing business in Texas. He argued that the trial court could exercise
general jurisdiction over PetroSaudi because it maintained an office in Texas and
therefore should be considered “at home” in this state. Alternatively, he argued that
PetroSaudi was subject to specific jurisdiction because it “relied on a Houston-based
company to extend an offer of employment to [Hartley] from a Houston address,”
“the Houston company invoiced PetroSaudi at its Houston address,” and “[i]t was
during this period of employment after being recruited by a Houston company that
[Hartley] suffered his injuries while working for PetroSaudi.”
Hartley then argued that Procurement Services was an alter ego of PetroSaudi
and its contacts with Texas could be imputed to PetroSaudi, pointing out that
Procurement Services was a wholly-owned subsidiary of PetroSaudi; Procurement
Services performed numerous functions for PetroSaudi but no contracts existed
between the companies; PetroSaudi submitted requisitions to Procurement Services
when the vessel needed supplies or personnel; Myers served as president of
PetroSaudi and as a director of Procurement Services; Procurement Services
ultimately reported to Myers; Procurement Services had little in the way of assets;
14
the companies shared a domain name; and Procurement Services employees stated
that they worked for PetroSaudi in their email signature blocks and LinkedIn
profiles.
Hartley also attached the full deposition of Chris Hudson. When asked to
explain the relationship between PetroSaudi Oil Services and Procurement Services,
Hudson testified:
Well, the way I understand it . . . is that PetroSaudi Oil Services is the
one that was running the show in Venezuela. They are the ones that
liaised with Pedevesa and the Venezuelans; and they provided the drill
crews onboard, is the way I understand it.
Procurement Services, what we did was, if they needed materials, they
submitted requisitions; if they needed services, they submitted
requisitions; and our procurement manager would look for whatever
they [were] asking for. And if it was, “We need lube oil,” she would
find lube oil and have it sent down there to them.
Procurement Services arranged whatever they asked—whatever they
needed, we arranged it.
Hudson testified that, at the time of the incident that formed the basis of the previous
personal injury lawsuit involving Procurement Services, he “was down there on
behalf of” PetroSaudi (Venezuela), but at the time he gave his deposition for that
prior case, he “was lumping everybody together. PetroSaudi Oil Services was
everybody outside Procurement Services, as far as I was concerned.” He testified, “I
do not now, nor have I ever, worked for . . . PetroSaudi Oil Services or PetroSaudi
15
Oil Services Venezuela.” He stated that, instead, he had worked for Procurement
Services since May 2014.5
On June 5, 2019, Hartley moved to strike PetroSaudi’s special appearance.
Hartley pointed out that, although PetroSaudi originally filed its special appearance
in July 2018, it amended its special appearance three times, did not set it for a hearing
until March 2019, passed the hearing after Hartley filed a response, and had not reset
the special appearance for a hearing. Hartley also pointed out that PetroSaudi had
refused to participate in merits-based discovery and that, while it had filed a motion
to quash and motion for a protective order related to this discovery, it had failed to
obtain the court’s ruling on these motions. Hartley argued that by failing to have its
special appearance heard by the court for over ten months PetroSaudi had waived its
special appearance.
PetroSaudi filed a reply and continued to argue that it did not have an office
in Texas and that it was not subject to personal jurisdiction in this state. As additional
evidence, PetroSaudi attached the affidavit of Alejandro Aguero, who was
Procurement Services’ Commercial Finance Manager and a director from April 2017
through April 2019. Aguero averred that PetroSaudi was a Cayman Islands
5
Hartley also attached the full transcript from Hudson’s deposition in the prior
lawsuit. In that deposition, Hudson was asked, “Has there ever been a point in time
where you’ve been a direct employee of Procurement Services?” Hudson answered,
“No.”
16
corporation and that it was his understanding that PetroSaudi “never maintained an
office in Texas, and it certainly never maintained an office here during the time [he]
worked for” Procurement Services. He averred:
[Procurement Services] provided services and procured materials, labor
and third-party services on an as-needed basis exclusively for
PetroSaudi entities, but primarily for [PetroSaudi (Venezuela)]. The
services it provided included, among other things, arranging for
PetroSaudi employees to attend various training seminars and courses
in Texas and elsewhere, arranging and booking airfare for those
employees, arranging air travel for employees and contractors,
including contract laborers, to and from projects, such as the
maintenance work on the only remaining PetroSaudi drillship,
PETROSAUDI SATURN.
Aguero averred that Procurement Services was responsible for obtaining the
required safety certifications for the vessel, and although the certifications were sent
to Procurement Services’ office, “those certifications named [PetroSaudi Oil
Services] because it was the PetroSaudi entity that was responsible for the adequacy
of the safety management protocol for the SATURN.” Aguero averred that the
certifications were sent to Procurement Services’ Houston office because two
Procurement Services employees worked with the issuing organization “in getting
those audit certifications issued on behalf of [PetroSaudi Oil Services].”
Aguero also averred that Procurement Services arranged for contract laborers
on the vessel, “and while [PetroSaudi (Venezuela)] coordinated the timing of their
arrivals and departures, [Procurement Services] would arrange for their payments.”
17
He averred that Procurement Services prepared the contract between PetroSaudi
(Venezuela) and Spencer Ogden, pursuant to which Hartley was hired. He averred:
In the case of Mr. Hartley, Spencer Ogden sent invoices to our office to
the attention of [PetroSaudi Oil Services], even though Spencer Ogden
entered into an agreement with [PetroSaudi (Venezuela)] for Mr.
Hartley’s work. I believe the invoices were issued in this manner
because Brian Davis, a [Procurement Services] contract employee who
was the Crewing Manager . . . , used the [PetroSaudi Oil Services]
name in his email signature block, and Spencer Ogden sent them to
[Procurement Services] for payment using the information shown in
Mr. Davis’s email.
He further averred that, after Hartley’s injury, Procurement Services made
arrangements for Hartley’s return to the United States “on behalf of” PetroSaudi
(Venezuela), “although the tickets were issued in the name of our parent company,
[PetroSaudi Oil Services].” Aguero speculated that because these arrangements were
made with Davis’s assistance, “the vendor or others merely referred to his name and
address on his emails when making these flight reservations.” Aguero also addressed
employment contracts for two individuals working on the vessel that were
“mistakenly prepared by [Procurement Services] in [PetroSaudi Oil Services’] name
instead of in [PetroSaudi (Venezuela)’s] name,” which Aguero described as an error
because PetroSaudi had no responsibility for manning the vessel—that was
PetroSaudi (Venezuela)’s responsibility.
Aguero also discussed the financing and control of Procurement Services. He
averred:
18
[Procurement Services] generated no income and was funded by
[PetroSaudi (Venezuela)]. [Procurement Services] entered into an
intercompany Services Agreement with [PetroSaudi (Venezuela)]
whereby [Procurement Services] provided agreed-upon services for
compensation to [Procurement Services] that included the costs of its
office space and related expenses, employee salaries, bonuses and
benefit programs, travel expenses, and all other costs and expenses
incidental to [Procurement Services’] provision of services to
[PetroSaudi (Venezuela)]. This agreement was in effect during the time
the PETROSAUDI SATURN was in drydock in Panama, and later at the
time of the incident forming the basis of Mr. Hartley’s lawsuit. . . .
The [Procurement Services] office was run by its employees without
any day-to-day supervision by [PetroSaudi Oil Services]. We instituted
our own procedures, set our own schedules and remained individually
responsible for accomplishing the work needed for other PetroSaudi
entities. We entered into agreements with vendors and other third
parties in the maintenance of our Houston office and the
accomplishment of our procurement function.
Aguero also averred that some of Procurement Services’ employees used
“PetroSaudi Oil Services” in their email signature blocks and LinkedIn profiles
“because [PetroSaudi Oil Services] is [Procurement Services’] parent company” and
“[t]he use of [PetroSaudi Oil Services’] name was no more than a matter of branding
than anything else.” He averred that none of Procurement Services’ employees were
instructed by PetroSaudi Oil Services to use the PetroSaudi name in that manner.6
In a separate filing, PetroSaudi responded to Hartley’s motion to strike its
special appearance and argued that it had not waived its special appearance.
6
PetroSaudi also attached the affidavit of Nysia Gaskin, and this affidavit contained
essentially the same facts as Aguero’s affidavit.
19
PetroSaudi pointed out that, although the special appearance had been pending for
nearly a year, the trial court had not entered any merits-based rulings against
PetroSaudi. It also noted that, while Texas Rule of Civil Procedure 120a contained
due-order-of-pleading and due-order-of-hearing requirements, it contained no
requirement that a special appearance must be heard within a particular time frame
or else it is waived.
After a hearing, the trial court denied PetroSaudi’s special appearance without
stating a reason for its ruling. This interlocutory appeal followed. See TEX. CIV.
PRAC. & REM. CODE ANN. § 51.014(a)(7) (providing that party may take
interlocutory appeal from order denying special appearance).
Special Appearance
In three related issues, PetroSaudi challenges the trial court’s denial of its
special appearance. In its first issue, it argues that it did not waive its special
appearance. In its second issue, it argues that the evidence is legally and factually
insufficient to support the trial court’s exercise of personal jurisdiction over it. And
in its third issue, it argues that Procurement Services is not its alter ego, and therefore
Procurement Services’ contacts with Texas cannot be imputed to PetroSaudi.
A. Standard of Review
Whether a trial court has personal jurisdiction over a nonresident defendant is
a question of law that we review de novo. Old Republic Nat’l Title Ins. Co. v. Bell,
20
549 S.W.3d 550, 558 (Tex. 2018); M & F Worldwide Corp. v. Pepsi-Cola Metro.
Bottling Co., 512 S.W.3d 878, 885 (Tex. 2017). In resolving this legal question,
however, the trial court must frequently resolve questions of fact. Am. Type Culture
Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002). When, as here, the
trial court does not issue findings of fact and conclusions of law relating to its
decision on a special appearance, we imply all relevant facts necessary to support
the judgment that are supported by evidence. Bell, 549 S.W.3d at 558; Moncrief Oil
Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013). We presume that the
trial court resolved all factual disputes in favor of its judgment. Coleman, 83 S.W.3d
at 806. If the appellate record includes the reporter’s record and the clerk’s record,
the trial court’s implied findings are not conclusive, and they may be challenged for
legal and factual sufficiency of the evidence. BMC Software Belg., N.V. v.
Marchand, 83 S.W.3d 789, 795 (Tex. 2002); Washington DC Party Shuttle, LLC v.
IGuide Tours, LLC, 406 S.W.3d 723, 729 (Tex. App.—Houston [14th Dist.] 2013,
pet. denied). On appeal, the scope of review includes all of the evidence in the record.
Washington DC Party Shuttle, 406 S.W.3d at 729.
We review the challenged factual findings by using the same standards that
we use to review jury findings. Id. When reviewing a finding for legal sufficiency,
we consider the evidence in the light most favorable to the finding and indulge every
reasonable inference that supports the challenged finding. Id. (citing City of Keller
21
v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005)). We credit favorable evidence if a
reasonable factfinder could, and we disregard contrary evidence unless a reasonable
factfinder could not. Id. Evidence is legally insufficient to support the implied
finding only if: (1) there is a complete absence of evidence of a vital fact; (2) we are
barred by rules of law or evidence from giving weight to the only evidence offered
to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a
mere scintilla; or (4) the evidence establishes conclusively the opposite of the vital
fact. Id.
In reviewing the factual sufficiency of the evidence supporting implied
findings, we consider all of the evidence, and we will set aside a finding only if it is
so against the great weight and preponderance of the evidence as to be clearly wrong
and unjust. Id. We may not substitute our judgment for that of the factfinder or pass
upon the credibility of the witnesses. Watamar Hldg. S.A. v. SFM Hldgs., S.A., 583
S.W.3d 318, 325 (Tex. App.—Houston [14th Dist.] 2019, no pet.). If the evidence
supports the implied fact findings, we must uphold the trial court’s judgment on any
legal theory supported by the findings. Washington DC Party Shuttle, 406 S.W.3d
at 729; Watamar Hldg., 583 S.W.3d at 325–26 (“The amount of evidence necessary
to affirm a judgment is far less than that necessary to reverse a judgment.”).
22
B. Exercise of Personal Jurisdiction
Texas courts may exercise personal jurisdiction over a nonresident defendant
if (1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the
exercise of jurisdiction is consistent with state and federal due-process guarantees.
Bell, 549 S.W.3d at 558 (quoting Moncrief Oil Int’l, 414 S.W.3d at 149). The long-
arm statute permits Texas courts to exercise jurisdiction over a nonresident
defendant that “does business” in Texas. BMC Software, 83 S.W.3d at 795. Under
the long-arm statute, a nonresident does business in Texas if, “[i]n addition to other
acts that may constitute doing business,” 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 Texas; (2) commits a tort in whole or in part in Texas; or (3) recruits
Texas residents, directly or through an intermediary located in Texas, for
employment inside or outside of Texas. TEX. CIV. PRAC. & REM. CODE ANN.
§ 17.042; Bell, 549 S.W.3d at 558–59.
To establish personal jurisdiction over a nonresident defendant, federal due
process standards require that the defendant have “certain minimum contacts with
[the forum state] such that the maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice.’” Bell, 549 S.W.3d at 559 (quoting Int’l
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). A defendant establishes
minimum contacts with a forum state when it “purposefully avails itself of the
23
privilege of conducting activities within the forum state, thus invoking the benefits
and protections of its laws.” Retamco Operating, Inc. v. Republic Drilling Co., 278
S.W.3d 333, 338 (Tex. 2009) (quoting Hanson v. Denckla, 357 U.S. 235, 253
(1958)). The defendant’s activities “must justify a conclusion that the defendant
could reasonably anticipate being called into a Texas court.” Bell, 549 S.W.3d at
559; Retamco Operating, 278 S.W.3d at 338; see TV Azteca v. Ruiz, 490 S.W.3d 29,
37 (Tex. 2016) (“Due process requires purposeful availment because personal
jurisdiction ‘is premised on notions of implied consent—that by invoking the
benefits and protections of a forum’s laws, a nonresident consents to suit there.’”)
(quoting Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex.
2005)).
When determining whether a defendant has purposefully availed itself of the
privilege of conducting activities in Texas, we consider three factors:
First, only the defendant’s contacts with the forum are relevant, not the
unilateral activity of another party or a third person. Second, the
contacts relied upon must be purposeful rather than random, fortuitous,
or attenuated. . . . Finally, the defendant must seek some benefit,
advantage or profit by availing itself of the jurisdiction.
Bell, 549 S.W.3d at 559 (quoting Moncrief Oil Int’l, 414 S.W.3d at 151); TV Azteca,
490 S.W.3d at 38 (stating that defendant’s contacts must be “purposefully directed”
to Texas and “must result from the defendant’s own ‘efforts to avail itself of the
forum’”) (quoting Guardian Royal Exch. Assurance, Ltd. v. English China Clays,
24
P.L.C., 815 S.W.2d 223, 228 (Tex. 1991), and Moki Mac River Expeditions v.
Drugg, 221 S.W.3d 569, 576 (Tex. 2007)). A nonresident may purposefully avoid
jurisdiction “by structuring its transactions so as neither to profit from the forum’s
laws nor be subject to its jurisdiction.” Michiana Easy Livin’ Country, 168 S.W.3d
at 785. We assess the quality and the nature of the contacts, not the quantity. TV
Azteca, 490 S.W.3d at 38.
A defendant’s contacts with the forum may give rise to either general or
specific jurisdiction. Bell, 549 S.W.3d at 559; M & F Worldwide, 512 S.W.3d at 885.
General jurisdiction, on which we base our decision, “involves a court’s ability to
exercise jurisdiction over a nonresident defendant based on any claim, including
claims unrelated to the defendant’s contacts with the state.” M & F Worldwide, 512
S.W.3d at 885 (quoting PHC-Minden, LP v. Kimberly-Clark Corp., 235 S.W.3d 163,
168 (Tex. 2007)); see Bristol-Myers Squibb Co. v. Superior Ct. of Cal., 137 S. Ct.
1773, 1780 (2017) (“A court with general jurisdiction may hear any claim against
that defendant, even if all the incidents underlying the claim occurred in a different
State.”). General jurisdiction is established when a defendant’s affiliations with the
state “are so ‘continuous and systematic’ as to render [it] essentially at home in the
forum State.” M & F Worldwide, 512 S.W.3d at 885 (quoting Goodyear Dunlop
Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)); Searcy v. Parex Res.,
25
Inc., 496 S.W.3d 58, 72 (Tex. 2016) (“[G]eneral jurisdiction relies on the defendant
itself being tied up—almost entangled in a web—with the forum state.”).
For a corporation the “paradigm” forums for the exercise of general
jurisdiction are the place of incorporation and its principal place of business.
Daimler AG v. Bauman, 571 U.S. 117, 137 (2014); see Bristol-Myers Squibb, 137
S. Ct. at 1780 (“For an individual, the paradigm forum for the exercise of general
jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place,
one in which the corporation is fairly regarded as at home.”) (quoting Goodyear
Dunlop Tires Operations, 564 U.S. at 924). “The exercise of general jurisdiction is
not limited to these forums; in an ‘exceptional case,’ a corporate defendant’s
operations in another forum ‘may be so substantial and of such a nature as to render
the corporation at home in that State.’” BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549,
1558 (2017) (quoting Daimler AG, 571 U.S. at 139 n.19); Searcy, 496 S.W.3d at 72
(“Continuous and systematic contacts that fail to rise to this relatively high level are
insufficient to confer general jurisdiction over a nonresident defendant.”).
The general jurisdiction inquiry “does not focus solely on the magnitude of
the defendant’s in-state contacts.” BNSF Ry., 137 S. Ct. at 1559 (quoting Daimler
AG, 571 U.S. at 139 n.20). Instead, “the inquiry ‘calls for an appraisal of a
corporation’s activities in their entirety” because “‘[a] corporation that operates in
many places can scarcely be deemed at home in all of them.’” Id. (quoting Daimler
26
AG, 571 U.S. at 139 n.20). The Texas Supreme Court has held that if a nonresident
corporation owns a subsidiary located in Texas, “this ownership is not ipso facto
sufficient to confer jurisdiction over the nonresident owner itself.” Searcy, 496
S.W.3d at 72. “Courts do not have general jurisdiction over corporate defendants
that are neither incorporated in the forum state nor have their principal place of
business there, absent some relatively substantial contacts with the forum state.” Id.
When personal jurisdiction is challenged, the plaintiff and the nonresident
defendant bear shifting burdens of proof. Bell, 549 S.W.3d at 559; Kelly v. Gen.
Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010). The plaintiff bears the
initial burden to plead sufficient allegations to bring the nonresident defendant
within the scope of Texas’s long-arm statute. Bell, 549 S.W.3d at 559; Kelly, 301
S.W.3d at 658. The trial court may consider the plaintiff’s original pleadings as well
as his response to the defendant’s special appearance in determining whether the
plaintiff satisfied his initial burden. Predator Downhole Inc. v. Flotek Indus., Inc.,
504 S.W.3d 394, 402 (Tex. App.—Houston [1st Dist.] 2016, no pet.); Touradji v.
Beach Capital P’ship, L.P., 316 S.W.3d 15, 23 (Tex. App.—Houston [1st Dist.]
2010, no pet.). If the plaintiff fails to plead facts bringing the defendant within the
reach of the long-arm statute, “the defendant need only prove that it does not live in
Texas to negate jurisdiction.” Kelly, 301 S.W.3d at 658–59. In conducting our
review, we accept as true the allegations in the petition. Touradji, 316 S.W.3d at 23.
27
If the plaintiff meets its initial pleading burden, the burden shifts to the
defendant to negate all bases of personal jurisdiction alleged by the plaintiff. Bell,
549 S.W.3d at 559; Kelly, 301 S.W.3d at 658 (“Because the plaintiff defines the
scope and nature of the lawsuit, the defendant’s corresponding burden to negate
jurisdiction is tied to the allegations in the plaintiff’s pleading.”). The defendant can
negate jurisdiction on either a factual or a legal basis. Kelly, 301 S.W.3d at 659.
Factually, the defendant can present evidence that it has no contacts with Texas,
“effectively disproving the plaintiff’s allegations.” Id. The plaintiff can then respond
with its own evidence affirming its allegations, and if it does not present evidence
establishing personal jurisdiction, it risks dismissal of its suit. Id. 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 do
not constitute purposeful availment; for specific jurisdiction, that the claims do not
arise from the contacts with Texas; or that the exercise of jurisdiction offends
traditional notions of fair play and substantial justice. Id.
If the defendant negates the plaintiff’s jurisdictional allegations, the plaintiff
must respond with evidence that establishes “the requisite link with Texas.” TMX
Fin. Hldgs., Inc. v. Wellshire Fin. Servs., LLC, 515 S.W.3d 1, 7 (Tex. App.—
Houston [1st Dist.] 2016, pet. dism’d) (quoting Kelly, 301 S.W.3d at 660). Once the
defendant has produced credible evidence negating all bases of jurisdiction, the
28
plaintiff then bears the ultimate burden to establish that Texas courts can exercise
personal jurisdiction over the defendant as a matter of law. Id. (quoting Vak v. Net
Matrix Sols., Inc., 442 S.W.3d 553, 558 (Tex. App.—Houston [1st Dist.] 2014, no
pet.)); Predator Downhole, 504 S.W.3d at 402.
C. Waiver of Special Appearance
Texas Rule of Civil Procedure 120a governs special appearances. It provides:
1. [A] special appearance may be made by any party either in
person or by attorney for the purpose of objecting to the jurisdiction of
the court over the person or property of the defendant on the ground
that such party or property is not amenable to process issued by the
courts of this State. . . . Such special appearance shall be made by
sworn motion filed prior to motion to transfer venue or any other plea,
pleading or motion . . . . Every appearance, prior to judgment, not in
compliance with this rule is a general appearance.
2. Any motion to challenge the jurisdiction provided for herein
shall be heard and determined before a motion to transfer venue or any
other plea or pleading may be heard. No determination of any issue of
fact in connection with the objection to jurisdiction is a determination
of the merits of the case or any aspect thereof.
TEX. R. CIV. P. 120a(1)–(2). A party availing itself of the special appearance
procedure in Rule 120a must strictly comply with the terms of the rule because
failure to do so results in waiver. Trenz v. Peter Paul Petroleum Co., 388 S.W.3d
796, 800 (Tex. App.—Houston [1st Dist.] 2012, no pet.). A party waives its special
appearance, and enters a general appearance, when it: (1) invokes the judgment of
the court on any question other than the court’s jurisdiction; (2) recognizes by its
acts that an action is properly pending; or (3) seeks affirmative action from the court.
29
Exito Elecs. Co. v. Trejo, 142 S.W.3d 302, 304 (Tex. 2004) (per curiam) (citing
Dawson-Austin v. Austin, 968 S.W.2d 319, 322 (Tex. 1998)). A party does not waive
its jurisdictional challenge by seeking affirmative relief consistent with the special
appearance. Nationwide Distrib. Servs., Inc. v. Jones, 496 S.W.3d 221, 225 (Tex.
App.—Houston [1st Dist.] 2016, no pet.).
The plain language of Rule 120a requires that a special appearance be filed
prior to a motion to transfer venue or any other plea, pleading, or motion—the “due
order of pleading” requirement. Exito Elecs., 142 S.W.3d at 305. Rule 120a also
“dictates the order in which motions may be heard with respect to a special
appearance—the due-order-of-hearing requirement.” Trenz, 388 S.W.3d at 800.
“The test for whether a party has made a general appearance by obtaining a hearing
on another motion before obtaining a ruling on his special appearance is whether the
other motion sought ‘affirmative relief inconsistent with [his] assertion that the
district court lacked jurisdiction.’” Id. at 803 (quoting Dawson-Austin, 968 S.W.2d
at 323).
Hartley argues that PetroSaudi waived its special appearance because
PetroSaudi filed its special appearance in July 2018, amended it three times over the
next seven months, passed the hearing that was scheduled on its special appearance
in March 2019, and did not immediately re-set the special appearance for a hearing.
Hartley argues that PetroSaudi’s “delay in bringing its special appearance before the
30
trial court waived its right to argue that it is not subject to the personal jurisdiction
of that court.” Hartley cites no law for the proposition that delay alone is enough to
waive a special appearance.
Hartley does not contend that PetroSaudi violated either the due-order-of-
pleading requirement or the due-order-of-hearing requirement. The record reflects
that PetroSaudi’s special appearance, filed on July 18, 2018, was the first pleading
that PetroSaudi filed in this case, thus satisfying the due-order-of-pleading
requirement. See TEX. R. CIV. P. 120a(1) (“Such special appearance shall be made
by sworn motion filed prior to motion to transfer venue or any other plea, pleading
or motion . . . .”). The record also reflects that, although PetroSaudi filed a motion
to quash and a motion for a protective order—seeking to halt Hartley’s pursuit of
allegedly merits-based discovery while the special appearance remained pending—
its special appearance was the first pleading brought to a hearing before the trial
court, thus satisfying the due-order-of-hearing requirement. See TEX. R. CIV. P.
120a(2) (“Any motion to challenge the jurisdiction provided for herein shall be heard
and determined before a motion to transfer venue or any other plea or pleading may
be heard.”).
The plain language of Rule 120a does not contain a requirement that a special
appearance be brought before the trial court within a specified time period, and we
31
decline to impose such a requirement here.7 We agree with PetroSaudi that in this
case, in which there was a delay before PetroSaudi’s special appearance was brought
to a hearing but the special appearance was still the first pleading heard by the trial
court, it did not waive its special appearance. We now turn to the merits of
PetroSaudi’s special appearance.
7
We note that our sister courts have held that “[a] defendant waives his special
appearance by not timely pressing for a hearing.” Milacron Inc. v. Performance Rail
Tie, L.P., 262 S.W.3d 872, 876 (Tex. App.—Texarkana 2008, no pet.) (stating such
in case in which defendant filed special appearance after opening statements and did
not secure ruling on special appearance before proceeding to trial on merits);
Bruneio v. Bruneio, 890 S.W.2d 150, 154 (Tex. App.—Corpus Christi–Edinburg
1994, no writ) (stating, in case in which defendant filed special appearance but did
not seek hearing on that issue before case went to trial on merits, that specially-
appearing defendant bears burden to request hearing and “specifically call that
request to the trial court’s attention” and stating that defendant “waives his special
appearance by not timely pressing for a hearing thereon”); Steve Tyrell Prods., Inc.
v. Ray, 674 S.W.2d 430, 436–37 (Tex. App.—Austin 1984, no writ) (holding, in
case in which defendants filed special appearance after default judgment was
rendered and then moved for new trial before trial court held hearing on special
appearance, that defendants “waived their special appearance by not timely pressing
for a hearing on their special appearance motion to the jurisdiction”); see also Kehoe
v. Pollack, 526 S.W.3d 781, 789–90 (Tex. App.—Houston [14th Dist.] 2017, no
pet.) (“A defendant waives its special appearance by failing to get a ruling on the
special appearance before the trial on the merits begins or before the court
adjudicates the merits of the claims against the defendant.”). None of these cases
require a special appearance to be heard within a specific time frame; instead, they
comport with the due-order-of-hearing requirement that, generally, a special
appearance must be the first matter heard by the trial court to avoid waiver of the
special appearance. Here, although one year passed between PetroSaudi’s filing of
its special appearance and the hearing on its special appearance, the special
appearance was the first matter heard by the trial court, and thus PetroSaudi
complied with the due-order-of-hearing requirement.
32
D. Minimum Contacts with Texas
1. Whether PetroSaudi has an office in Texas
PetroSaudi argues that it lacks minimum contacts with Texas to support the
exercise of either general or specific jurisdiction. Specifically, it argues that it is a
Cayman Islands corporation with its principal place of business in London, and it
does not have an office located in Houston—instead, that office belongs to
Procurement Services, PetroSaudi’s wholly-owned subsidiary. As evidence
supporting this argument, PetroSaudi points to the affidavit and deposition testimony
of Myers and the affidavit of Aguero. It also argues that it does not manage or operate
the vessel on which Hartley was allegedly injured, that this vessel has never been
chartered to a Texas company, and that PetroSaudi has never entered into a drilling
contract with a Texas company. It further argues that it does not solicit business in
Texas, does not own property in Texas, does not keep business records in Texas, has
not been involved in any banking or accounting work in Texas, has never performed
any work in whole or in part in Texas, has never paid any taxes in Texas, and has
never held any corporate meetings in Texas. PetroSaudi acknowledges that it has
occasionally sent employees to Texas for training and seminars. PetroSaudi argues
that this contact is not sufficient to confer jurisdiction upon it.
Hartley disputes PetroSaudi’s contention that it does not have an office in
Texas. He argues that the office on the North Sam Houston Parkway in Houston is
33
not just the office of Procurement Services, but is also an office of PetroSaudi itself.
As evidence supporting his argument, Hartley presented invoices from Spencer
Ogden concerning Hartley’s work on the vessel that were addressed to “PetroSaudi
Oil Services Ltd.” and listed the address on the North Sam Houston Parkway,
numerous emails from Brian Davis—who identified himself as a “Crewing
Manager”—concerning Hartley’s travel information after his injury that stated
“PetroSaudi Oil Services Ltd.” and the North Sam Houston Parkway address in the
signature block, documents from the travel agency that booked Hartley’s return
flight and listed “PetroSaudi Oil Services” and the North Sam Houston Parkway
address, and evidence that several Procurement Services employees, in their email
signature blocks and LinkedIn profiles, listed “PetroSaudi Oil Services Ltd.” and the
North Sam Houston Parkway address. Hartley presented compliance documents,
safety management certificates, and ship security certificates for the vessel, all
created by a third party, that listed “PetroSaudi Oil Services Ltd.” and the North Sam
Houston Parkway address. Hartley also presented an email sent by Procurement
Services’ Human Resources Manager on behalf of Myers concerning the future of
the vessel that referred to the “Houston office,” “Oil Services,” an “Executive Team”
in London, and a “management team” in Houston. None of these documents
referenced Procurement Services.
34
The trial court thus had before it conflicting evidence concerning whether
PetroSaudi has an office in Houston at the North Sam Houston Parkway address.
When, as here, the trial court does not make findings of fact and conclusions of law,
we imply all relevant facts necessary to support the judgment that are supported by
the evidence. See Bell, 549 S.W.3d at 558. We presume that the trial court resolved
all factual disputes in favor of its judgment. See Coleman, 83 S.W.3d at 806. We
therefore imply a factual finding that PetroSaudi has an office in Houston.
PetroSaudi argues on appeal that this finding is not supported by legally or
factually sufficient evidence. A legal sufficiency challenge must fail if there is any
evidence of probative force to support the challenged finding. Capital Tech. Info.
Servs., Inc. v. Arias & Arias Consultores, 270 S.W.3d 741, 751 (Tex. App.—Dallas
2008, pet. denied). When reviewing a finding for legal sufficiency, we consider the
evidence in the light most favorable to the finding and indulge every reasonable
inference that supports the challenged finding. Washington DC Party Shuttle, 406
S.W.3d at 729. Here, the evidence is conflicting concerning whether PetroSaudi has
an office in Houston at the North Sam Houston Parkway address. Because Hartley
presented some evidence of probative force supporting the implied finding that
PetroSaudi does have an office in Houston, we cannot conclude that this finding is
not supported by legally sufficient evidence.
35
Similarly, although the evidence is conflicting, the trial court’s implied
finding is not so against the great weight and preponderance of the evidence that it
is clearly wrong and unjust. See id. Myers, the president of PetroSaudi, testified in
his affidavit and in his deposition that PetroSaudi is registered in the Cayman
Islands, that he is its sole employee and that he works in London, and that PetroSaudi
has never had an office in Texas. Aguero, the former Commercial Finance Manager
of Procurement Services, testified similarly in his affidavit. The trial court had
evidence before it, however, that Procurement Services employees routinely
represented through their email signature blocks that their employer was “PetroSaudi
Oil Services Ltd.” with an address on the North Sam Houston Parkway in Houston.
Myers himself, in an email entitled “PetroSaudi Oil Services Town Hall Conference
call script,” referred to “Oil Services,” a “Houston office,” an “Executive Team” in
London, and a “management team” in Houston. Spencer Ogden invoiced
“PetroSaudi Oil Services Ltd.” at this Houston address for payment for Hartley’s
work on the vessel, the travel agency hired to obtained plane tickets for Hartley to
the United States after his injury referred to “PetroSaudi Oil Services Ltd” at the
Houston address, and the organization responsible for obtaining various
certifications for the vessel also referred to “PetroSaudi Oil Services Ltd” at the
Houston address. This evidence is more than an isolated reference to PetroSaudi and
a Houston address. We conclude that factually sufficient evidence supports the trial
36
court’s implied finding that PetroSaudi has an office in Houston. We now turn to
whether exercising personal jurisdiction over PetroSaudi comports with due process
guarantees.
2. General jurisdiction
Hartley argues that PetroSaudi’s contacts with Texas, specifically, its office
in Houston, subject it to both general and specific jurisdiction. As stated above,
general jurisdiction is established when a defendant’s affiliations with the state “are
so ‘continuous and systematic’ as to render [it] essentially at home in the forum
State.” M & F Worldwide, 512 S.W.3d at 885 (quoting Goodyear Dunlop Tires
Operations, 564 U.S. at 919); Searcy, 496 S.W.3d at 72 (“[G]eneral jurisdiction
relies on the defendant itself being tied up—almost entangled in a web—with the
forum state.”). Typically, for a corporation, the “paradigm” forums that can exercise
general jurisdiction are the corporation’s place of incorporation and its principal
place of business, see Daimler AG, 571 U.S. at 137, although the exercise of general
jurisdiction is not limited to these forums, and, in exceptional cases, “a corporate
defendant’s operations in another forum ‘may be so substantial and of such a nature
as to render the corporation at home in that State.’” BNSF Ry., 137 S. Ct. at 1558.
“Courts do not have general jurisdiction over corporate defendants that are neither
incorporated in the forum state nor have their principal place of business there,
37
absent some relatively substantial contacts with the forum state.” Searcy, 496
S.W.3d at 72.
This Court has stated that, for a Texas court to exercise general jurisdiction
over a defendant, the defendant “usually ‘must be engaged in longstanding business
in the forum state, such as marketing or shipping products, or performing services
or maintaining one or more offices there; activities that are less extensive than that
will not qualify for general in personam jurisdiction.’” Predator Downhole, 504
S.W.3d at 407 (quoting PHC-Minden, 235 S.W.3d at 168). The maintenance of an
office or a physical presence in Texas is an indicator of a corporation’s connection
with Texas. Bautista v. Trinidad Drilling Ltd., 484 S.W.3d 491, 502 (Tex. App.—
Houston [1st Dist.] 2016, no pet.). However, having an office or a physical presence
in Texas “does not require a finding of general jurisdiction.” Waterman S.S. Corp.
v. Ruiz, 355 S.W.3d 387, 418–19 (Tex. App.—Houston [1st Dist.] 2011, pet. denied)
(quoting Alenia Spazio, S.p.A. v. Reid, 130 S.W.3d 201, 217 (Tex. App.—Houston
[14th Dist.] 2003, pet. denied)). The significance of an office in Texas depends on
the type and nature of the office maintained. Id. at 419; Alenia Spazio, 130 S.W.3d
at 217 (“If a defendant maintains a permanent general business office through which
it solicits business in Texas, then this factor tends to weigh strongly in favor of
general jurisdiction.”). “[G]eneral jurisdiction is appropriate if the nature of a
defendant’s contacts with the forum is central to its business.” RSR Corp. v.
38
Siegmund, 309 S.W.3d 686, 708 (Tex. App.—Dallas 2010, no pet.) (concluding that
minimum contacts supported exercise of general jurisdiction over company where
company’s main business was “to search for possible international business
opportunities for one client and to provide services for managing construction
projects for another client,” employee who worked out of home office in Dallas was
“the sole provider for [the company’s] international business development services,”
and employee “actively managed one of the company’s main clients”); see Bautista,
484 S.W.3d at 502 (stating that general jurisdiction inquiry is whether quality and
nature of contacts in Texas render corporation “essentially at home” in Texas).
The special appearance record contains evidence that PetroSaudi was
incorporated in the Cayman Islands, had its principal place of business in London,
where Myers worked, and had an office in Houston. The business of PetroSaudi, as
well as that of its subsidiaries Procurement Services and PetroSaudi (Venezuela),
was focused on finding opportunities for and operating the vessel, a drillship which,
at the time of Hartley’s injury, was anchored off the coast of Trinidad and Tobago.
Activities conducted in the Houston office included obtaining supplies and crew for
the vessel, such as contracting with third-party companies like Spencer Ogden, and
making travel arrangements for crew personnel. Email correspondence reflects that
39
the Human Resources team and a “management team” were located in Houston.8
The record contains evidence—specifically, two “Company Employment
Agreements”—that PetroSaudi hired two Texas residents to work on the vessel and
that their “Point of Origin” was Houston. These contracts specifically stated
“PetroSaudi Oil Services Ltd.” as the employer. Although Myers testified in his
deposition and Aguero testified in his affidavit that these contracts were
“mistakenly” prepared in PetroSaudi’s name, and should have instead been prepared
in the name of PetroSaudi (Venezuela), the trial court, as the factfinder, could have
found this explanation to be not credible and so resolved this dispute against
PetroSaudi. See Coleman, 83 S.W.3d at 806 (presuming that trial court in special
appearance resolved all disputed facts in favor of judgment); Watamar Hldg., 583
S.W.3d at 325 (stating that we may not substitute our judgment for that of factfinder
or pass upon credibility of witnesses).
8
PetroSaudi argues that no “management team” existed in Houston because the only
employee of PetroSaudi was Myers, who worked in London, and he was the
“management team.” The September 2017 email sent by Nysia Gaskin on behalf of
Myers specifically stated, “I [Myers] will be flying to Houston next week to work
with the management team to make more detailed plans.” PetroSaudi argues on
appeal that this refers to Procurement Services’ management team. However,
Procurement Services is not mentioned in this email; only PetroSaudi Oil Services
is mentioned. We presume that the trial court resolved this factual dispute in favor
of its judgment and impliedly found that a PetroSaudi management team is located
in the Houston office. See Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d
801, 806 (Tex. 2002).
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It is clear from the evidence that the work performed in the Houston office
was integral to the operation of the vessel, the success of which was the focus of
PetroSaudi’s business. The Houston office was not merely incidental to PetroSaudi’s
work but was instead akin to a “general business office” located in Texas. We
therefore conclude that PetroSaudi’s contacts with Texas were such that it was
essentially “at home” in Texas and, therefore, the trial court did not err in ruling that
PetroSaudi had sufficient minimum contacts with Texas to support the exercise of
personal jurisdiction. See Bautista, 484 S.W.3d at 502; Siegmund, 309 S.W.3d at
708.
3. Fair play and substantial justice
As we have determined that PetroSaudi has sufficient minimum contacts with
Texas to support personal jurisdiction, we now must decide whether exercising that
jurisdiction comports with traditional notions of fair play and substantial justice. See
Bell, 549 S.W.3d at 559; Retamco Operating, 278 S.W.3d at 341. In making this
determination we consider the following factors, when appropriate:
(1) the burden on the defendant; (2) the interests of the forum in
adjudicating the dispute; (3) the plaintiff’s interest in obtaining
convenient and effective relief; (4) the international judicial system’s
interest in obtaining the most efficient resolution of controversies; and
(5) the shared interest of the several nations in furthering fundamental
substantive social policies.
Cornerstone Healthcare Grp. Hldg., Inc. v. Nautic Mgmt. VI, L.P., 493 S.W.3d 65,
74 (Tex. 2016); Moncrief Oil Int’l, 414 S.W.3d at 155. “If a nonresident has
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minimum contacts with the forum, rarely will the exercise of jurisdiction over the
nonresident not comport with traditional notions of fair play and substantial justice.”
Moncrief Oil Int’l, 414 S.W.3d at 154–55. The defendant bears the burden of
presenting a compelling case that the presence of some consideration would render
the exercise of jurisdiction over it unreasonable. Hoagland v. Butcher, 474 S.W.3d
802, 816 (Tex. App.—Houston [14th Dist.] 2014, no pet.).
On appeal, PetroSaudi argues, in a conclusory statement, that because it lacks
sufficient minimum contacts with Texas, exercising personal jurisdiction over it
would not comport with traditional notions of fair play and substantial justice. In its
special appearance, it argued that litigating this case in Texas would be a great
burden because it does not have minimum contacts with Texas, Hartley is a
Louisiana resident, none of the events giving rise to the litigation occurred in Texas,
and no relevant medical or fact witnesses are located in Texas. PetroSaudi argued
that because this dispute is “between two non-Texas citizens arising out of an alleged
incident that occurred outside of Texas and for which no medical treatment has been
rendered in Texas,” Texas has no special interest in adjudicating this dispute.
PetroSaudi also argued that dismissal of the suit against it would not prevent Hartley
from obtaining relief because “there are other forums available to him, i.e., Louisiana
(Plaintiff’s residence).”
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We have concluded, however, that evidence supports the trial court’s implied
finding that PetroSaudi maintains an office in Houston and that it has sufficient
minimum contacts with Texas to support the exercise of jurisdiction in this state.
Although it might be burdensome for Myers, as PetroSaudi’s president, to travel to
Texas to participate in litigation, “the same can be said of all nonresidents” and
“[d]istance alone cannot ordinarily defeat jurisdiction.” Moncrief Oil Int’l, 414
S.W.3d at 155; Guardian Royal Exch. Assurance, 815 S.W.2d at 231 (noting that
“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. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957)). Furthermore, there
is evidence in the record that Myers has traveled to Houston on business before.
PetroSaudi might be burdened by having to participate in litigation in Texas—a
burden that would occur regardless of where Hartley sued PetroSaudi—but
PetroSaudi has not demonstrated that this burden is an unreasonable one. See
Hoagland, 474 S.W.3d at 816 (stating that defendant bears burden of presenting
“compelling case” that Texas’s exercise of jurisdiction over it would be
unreasonable).
Although PetroSaudi is correct that Hartley is not a Texas resident, his alleged
injury did not occur in Texas, he did not seek medical treatment in Texas, and the
vessel was not located in Texas, and therefore Texas does not have as great an
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interest in this proceeding as it would were Hartley a Texas resident or his injury
occurred in Texas, Hartley also sued two Spencer Ogden entities and Procurement
Services, all of which are Texas residents and generally appeared in the underlying
lawsuit. Procurement Services is owned by PetroSaudi. Litigating the claims against
PetroSaudi, an entity that has minimum contacts with Texas, along with the other
named defendants together in Texas promotes judicial economy. See Cornerstone,
493 S.W.3d at 74 (considering facts that several other defendants had not challenged
jurisdiction and litigating claims against all defendants together promoted judicial
economy).
We conclude that PetroSaudi has not presented a “compelling case” that the
exercise of jurisdiction over it in Texas would be unreasonable such that exercising
jurisdiction would offend traditional notions of fair play and substantial justice. See
Moncrief Oil Int’l, 414 S.W.3d at 154–55 (“If a nonresident has minimum contacts
with the forum, rarely will the exercise of jurisdiction over the nonresident not
comport with traditional notions of fair play and substantial justice.”). We hold that
the trial court did not err by denying PetroSaudi’s special appearance.
We overrule PetroSaudi’s second issue.9
9
Because we hold that the trial court did not err to the extent it concluded that
PetroSaudi itself had minimum contacts with Texas, we need not address
PetroSaudi’s third issue—whether the trial court erred by impliedly concluding that
Procurement Services and PetroSaudi were alter egos, such that Procurement
Services’ contacts with Texas could be imputed to PetroSaudi.
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Conclusion
We affirm the order of the trial court.
Evelyn V. Keyes
Justice
Panel consists of Justices Keyes, Lloyd, and Landau.
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