Gespa Nicaragua, S.A. v. Recom AG, Flextronics International USA, Inc., Flextronics Automotive USA (Texas), LLC, and Expeditors International of Washington, Inc. ( 2024 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
§
GESPA NICARAGUA, S.A.,
§ No. 08-22-00244-CV
Appellant,
§ Appeal from the
v.
§ 120th Judicial District Court
RECOM AG, FLEXTRONICS
INTERNATIONAL USA, INC., § of El Paso County, Texas
FLEXTRONICS AUTOMOTIVE USA
(TEXAS), LLC, and EXPEDITORS § (TC# 2018-DCV-4112)
INTERNATIONAL OF WASHINGTON,
INC., §
Appellees. §
SUBSTITUTED OPINION
Appellant Gespa Nicaragua, S.A. (Gespa) and Appellee Expeditors International of
Washington, Inc. (Expeditors) have filed separate motions for rehearing of our opinion issued
March 20, 2024. We deny Gespa’s motion for rehearing and grant Expeditors’s motion. We
withdraw our opinion and judgment of said date and substitute the following opinion in its place.
This appeal stems from a contract dispute involving a large purchase of solar panels
intended for a solar park in Nicaragua. Gespa initially filed suit against Inabata, which is not a
party to this appeal; against Flextronics International USA, Inc. and Flextronics Automotive USA
(Texas), LLC, which are related companies (together, Flextronics); against Recom AG (Recom);
and against Expeditors (collectively, Appellees). Gespa’s suit alleged it had contracted with
Inabata to purchase premium-quality, Black Panther solar panels by Recom. But instead, it further
alleged it received lesser quality panels of a different type. It further claimed the panels were
fraudulently relabeled as Black Panther panels based on a scheme involving Appellees and Inabata.
Gespa brought claims of fraud, fraud by nondisclosure, civil conspiracy to defraud, negligent
misrepresentation, aiding and abetting, and unjust enrichment against each Appellee.
Before trial, the trial court dismissed Gespa’s suit against Recom based on lack of personal
jurisdiction; and against Expeditors based on enforcement of the forum-selection clause contained
within Gespa’s purchase agreement with Inabata. The case then proceeded to a jury trial against
Flextronics, the only remaining defendant. Following a verdict, the trial court entered a take
nothing judgment against Gespa. On appeal, Gespa brings issues challenging the trial court’s
rulings, as rendered both before and during trial. We affirm the trial court’s orders.
I. BACKGROUND
A. The project
In 2014, Gespa entered into a framework agreement to build an electricity-generating solar
park in Nicaragua. The project was generally known as “Solaris.” Initially, the facility was
designed to produce up to 100-megawatts of electricity. Gespa would serve as prime contractor of
engineering, procurement, and construction. The role required it to design the facility, provide all
specifications, and acquire all necessary equipment, materials and components. As planned, the
project would be built in three phases. The first stage would produce up to 12.5 megawatts of
power; the second stage would produce an additional 50 megawatts; and the third stage would
produce a final 37.5 megawatts. Once completed, Gespa intended to sell the facility’s produced
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electricity. To that end, it contracted with a national company to sell electricity at a set price of
$114 per megawatt for an initial, guaranteed term of 18 years.
After meeting Recom at a tradeshow in Germany, Gespa believed Recom could deliver the
type of panels it wanted for the project. Recom assured Gespa it could introduce it to Inabata, a
European company licensed to sell Recom’s products, and Inabata in turn could extend financing
to Gespa. In 2016, Inabata and Gespa signed a contract wherein Gespa would buy and Inabata
would sell solar panels and other related components (the Sales Agreement). Specifically, Gespa
purchased over 46,700 pieces of a specified Recom product, and related components from another
supplier, for a total purchase price of more than $11 million.
To supply the Gespa’s order, Inabata bought 270-watt, F-series (full monocrystalline) solar
panels from Flextronics, who had acquired said panels from a bankruptcy of SunEdison. Relatedly,
Inabata also obtained permission from Recom to use its trademark. Flextronics stored the
reacquired panels in Expeditors’s El Paso warehouse before it sold them to Inabata. Even after
Inabata took title, the solar panels remained stored in El Paso. Inabata eventually sold the stored
panels to Gespa and exported them to Nicaragua. While in storage, the SunEdison panels acquired
from the bankruptcy were relabeled as Recom “Black Panther” panels. Recom had finalized a co-
listing agreement with SunEdison’s restructuring officer. Expeditors also took part in the
relabeling of the panels.
The relabeled solar panels were installed in Nicaragua by MKG GmbH Montagebau Karl
Gobel (MKG) as part of the first phase of the facility. Once installed, Gespa hired a company to
provide a yield report to confirm the project construction was completed in accord with the plans
and specifications. At this point, Gespa discovered the solar panels it acquired and installed had
Recom labels placed over SunEdison labels. They also discovered the panels lacked certifications.
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B. The lawsuit and trial
In October 2017, Gespa filed a lawsuit in federal district court alleging Inabata, Recom,
Flextronics, and MKG all engaged in a deceptive “bait-and-switch-scheme” and cover-up to pass
off SunEdison panels as though they were premium-quality Recom Black Panther panels. Gespa
brought three causes of action—fraudulent misrepresentation, conspiracy to commit fraud, and
unjust enrichment, or alternatively, breach of contract—against all of the defendants. Additionally,
against Inabata only, it alleged it had violated the federal statutory racketeering and influences law
(RICO). 1 Inabata moved to dismiss the suit based on the Sales Agreement’s forum-selection
clause, which expressly provided for Germany as the parties’ chosen forum.
In March 2018, the federal district court granted Inabata’s motion to dismiss. Gespa soon
filed an amended complaint, adding a RICO claim against Flextronics. Months later, however,
defendants Flextronics, Recom, and MKG filed motions to dismiss challenging all claims asserted
based on lack of subject matter jurisdiction and other grounds. The federal district court granted
all three motions ordering that Gespa’s complaint was dismissed without prejudice.
On October 31, 2018, Gespa filed its original petition and jury demand in the 120th District
Court of El Paso County, again bringing claims of fraud, conspiracy, and unjust enrichment and
breach of contract against Inabata, Recom, Flextronics and MKG, and as against Inabata only, it
brought a RICO claim. In June 2019, Recom filed a special appearance contending it was a German
corporation, with its headquarters in Dusseldorf, Germany, and it conducted no business in Texas
nor did it have an office in San Francisco, California, as Gespa had alleged. It also argued it was
never an owner of the products sold to Gespa, nor a customer of Expeditors’s warehouse where
they were stored.
1
Gespa’s original complaint in the United States District Court for the Western District of Texas, El Paso Division,
was docketed as case number 3:17-cv-00306-PRM.
4
A month later, on July 8, 2019, Inabata removed Gespa’s lawsuit to federal district court—
where the case had earlier been dismissed without prejudice—alleging federal question jurisdiction
was established based on Gespa’s RICO claim brought against it. Gespa soon sought a remand
back to state court, while Inabata pursued a second motion to dismiss. In December 2019, the
federal district court dismissed Gespa’s claims against Inabata on the basis of collateral estoppel,
determining it had previously dismissed claims against Inabata based on the doctrine of forum non
conveniens. Also, due to a lack of federal question jurisdiction and diversity jurisdiction, the
federal district court granted Gespa’s motion to remand the suit back to state court.
In October 2020, after the suit had returned to state court, Gespa amended its petition
adding claims for the first time against Expeditors while otherwise maintaining like claims against
Recom and Flextronics. MKG was no longer included as a defendant. After a years’ time, the trial
court granted Recom’s special appearance. In March 2022, Expeditors filed a motion to dismiss
based on the Sales Agreement’s forum-selection clause, even though it was not in fact a signatory
of the contract. It claimed it was entitled to enforce the clause under doctrines of equitable estoppel
and as a third-party beneficiary of the agreement. In June 2022, the trial court granted Expeditors’s
motion to dismiss based on the Sales Agreement’s forum-selection clause.
Eventually, on July 25, 2022, the case proceeded to a multi-day jury trial against
Flextronics. The trial court allowed Flextronics to designate Recom, Inabata, Expeditors and MKG
as responsible third parties. At the close of Gespa’s case in chief, Flextronics moved for directed
verdict on all claims. The trial court granted directed verdict on the claims of unjust enrichment,
aiding and abetting, negligent representation, civil conspiracy, and fraud by nondisclosure, while
it denied directed verdict on joint enterprise and fraud. After Flextronics closed its case in chief,
the trial court additionally granted directed verdict on Gespa’s joint enterprise claim. Accordingly,
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only the fraud claim was submitted to the jury. When asked whether any of the following parties
committed fraud against Gespa, the jury answered “No” as to Expeditors, Flextronics, and MKG,
respectively, and “Yes,” as to Inabata and Recom. When assigning a percentage of responsibility
for damages, it answered: Recom 90% and Inabata 10%. The trial court subsequently rendered a
take-nothing final judgment against Gespa and in favor of Flextronics. The final judgment stated
on its face that it was final and appealable.
This appeal followed.
II. BRIEFING WAIVER AND ERROR PRESERVATION
Gespa presents ten issues, with multiple sub-issues included. As a preliminary matter, we
first note Appellees respond with reoccurring complaints of Gespa’s briefing deficiencies or its
failure to preserve error at trial. See Tex. R. App. P. 33.1(a)(1), 38.1(i).
As for briefing deficiency, the Texas Rules of Appellate Procedure control the required
contents and organization of an appellant’s brief, including requiring that it contain clear and
concise arguments, including appropriate citations to authority and to the record. See Tex. R. App.
P. 38.1(h). “This requirement is not satisfied by merely uttering brief conclusory statements
unsupported by legal citations.” Valadez v. Avitia, 238 S.W.3d 843, 845 (Tex. App.—El Paso
2007, no pet.) (citing Sweed v. City of El Paso, 195 S.W.3d 784, 786 (Tex. App.—El Paso 2006,
no pet.)). The Supreme Court of Texas has thus recognized that “[f]ailure to provide citations or
argument and analysis as to an appellate issue may waive it.” Ross v. St. Luke’s Episcopal Hosp.,
462 S.W.3d 496, 500 (Tex. 2015); see also In re A.N.G., 631 S.W.3d 471, 476–77 (Tex. App.—
El Paso 2021, no pet.) (explaining that issues “may be waived when appellant fails to provide
citations, argument, or analysis” and the Court is “not required to perform research nor develop an
argument for an appellant who inadequately prepares an appellate brief”). Yet, we are also
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instructed by our state’s highest court “to construe the Rules of Appellate Procedure reasonably,
yet liberally, so that the right to appeal is not lost by imposing requirements not absolutely
necessary to effect the purpose of a rule.” Republic Underwriters Ins. Co. v. Mex-Tex, Inc., 150
S.W.3d 423, 427 n.15 (Tex. 2004) (quoting Verburgt v. Dorner, 959 S.W.2d 615, 616–17
(Tex. 1997)). Thus, despite alleged deficiencies in Gespa’s briefing, we heed the Supreme Court’s
instruction and reach the conclusion that it is not absolutely necessary in this case to strictly enforce
the rules relating to briefing requirements. See Mex-Tex, 150 S.W.3d at 427; Verburgt, 959 S.W.2d
at 616–17. As a result, we decline to hold that any of Gespa’s issues on appeal are waived in their
entirety by a failure to comply with the briefing requirements. See Tex. R. App. P. 38.1. But as
for any of the sub-issues and subsidiary arguments, we will address briefing waiver individually
on a case-by-case basis throughout our discussion.
Appellees also contend that many of Gespa’s issues are not preserved for our review
because it did not properly object in the trial court. To preserve a complaint for appellate review,
a party must first present a timely request, objection, or motion to the trial court stating the specific
grounds for the desired ruling if said grounds are not apparent from the context. Tex. R. App. P.
33.1(a)(1). Also, for preservation purposes, the trial court must either have ruled on the request,
objection, or motion, either expressly or implicitly, or the complaining party must also have
objected to the court’s refusal to rule. Tex. R. App. P. 33.1(a)(2). We similarly determine it will
best serve our opinion to address lack of preservation of error in context, and thus we will do so
within each issue where it is raised. In sum, we address Gespa’s multiple issues and sub-issues to
the extent we are able and to the extent necessary to reach their merits. And finally, for brevity and
clarity, we reorder issues, grouping like issues together.
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III. PRE-TRIAL RULINGS
A. The Special Appearance
In its first issue, Gespa challenges, on both procedural and substantive grounds, the trial
court’s grant of Recom’s special appearance. Gespa contends Recom is subject to the jurisdiction
of Texas courts.
(1) Standard of review
Whether a trial court may exercise personal jurisdiction over a defendant is a question of
law reviewed de novo. Old Republic Nat’l Title Ins. Co. v. Bell, 549 S.W.3d 550, 558 (Tex. 2018);
Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007); BMC Software Belgium,
N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). “But in resolving this question of law, a trial
court must frequently resolve questions of fact.” Am. Type Culture Collection, Inc. v. Coleman, 83
S.W.3d 801, 806 (Tex. 2002). When the trial court does not issue findings of fact, as occurred here,
we presume it resolved all factual disputes in favor of its ruling. Id.; see Worford v. Stamper, 801
S.W.2d 108, 109 (Tex. 1990) (per curiam). When the appellate record includes a reporter’s record
and clerk’s record, the court’s implied findings are not conclusive and may be challenged for legal
and factual sufficiency. BMC Software, 83 S.W.3d at 795; I & JC Corp. v. Helen of Troy L.P., 164
S.W.3d 877, 883 (Tex. App.—El Paso 2005, pet. denied).
Initially, the plaintiff bears the burden to plead sufficient allegations to bring the
nonresident defendant within the provisions of the Texas long-arm statute. Kelly v. Gen. Interior
Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010). This pleading requirement is “minimal” and “can
be satisfied with an allegation that the nonresident defendant is doing business in Texas or
committed tortious acts in Texas.” Gaddy v. Fenenbock, 652 S.W.3d 860, 871 (Tex. App.—
El Paso 2022, no pet.). Once the plaintiff satisfies the initial burden, the defendant challenging
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jurisdiction has the burden to negate all bases for personal jurisdiction and focus its arguments to
allegations in plaintiff’s pleading. W. Techs., Inc. v. Omnivations II, L.L.C., 583 S.W.3d 786, 791
(Tex. App.—El Paso 2019, no pet.). “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.” Kelly, 301 S.W.3d at 658.
Personal jurisdiction can be negated on either a factual or legal basis. Id. at 659. Factually,
“the defendant can present evidence that it has no contacts with Texas, effectively disproving the
plaintiff’s allegations.” Id. Alternatively, the defendant may attack the legal basis for personal
jurisdiction in several different ways: (1) by challenging the legal sufficiency of the jurisdictional
facts; (2) by showing that its contacts do not rise to the level of purposeful availment; (3) for
specific jurisdiction, by showing that the plaintiff’s claims do not arise from the defendant’s
contacts; and (4) by demonstrating that the exercise of specific jurisdiction offends the traditional
notions of fair play and substantial justice. If a nonresident defendant has presented evidence to
disprove the jurisdictional allegations, the plaintiff must respond with evidence establishing
personal jurisdiction over the nonresident defendant. Id.
(2) Procedural arguments
Texas Rule of Civil Procedure 120a governs special appearances. It provides that “a special
appearance may be made by any party . . . 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.” Tex. R. Civ. P. 120a(1). A special
appearance shall be made by sworn motion filed “prior to motion to transfer venue or any other
plea, pleading or motion[.]” Tex R. Civ. P. 120a(1); see also Milacron Inc. v. Performance Rail
Tie, L.P., 262 S.W.3d 872, 875 (Tex. App.—Texarkana 2008, no pet.) (recognizing this provision
9
promotes judicial economy). And it must likewise be heard and determined before a motion to
transfer venue or any other plea or pleading. Tex. R. Civ. P. 120a(2). “This is sometimes referred
to as the ‘due-order-of-pleading’ requirement.” Exito Elecs. Co. v. Trejo, 142 S.W.3d 302, 305
(Tex. 2004) (per curiam).
Notably, no specified time period is included in the plain language of Rule 120a, but Texas
law has more specifically clarified that a special appearance is waived through participation in
trial. Milacron, 262 S.W.3d at 875 (holding that party waived special appearance by waiting until
after opening statements to file its special appearance and failing to request a hearing and secure a
ruling on it before proceeding to trial on the merits). But the “issuance of process for witnesses,
the taking of depositions, the serving of requests for admissions, and the use of discovery
processes, shall not constitute a waiver of such special appearance.” Tex. R. Civ. P. 120a(1). Even
so, a party does not waive its jurisdictional challenge by seeking affirmative relief consistent with
its special appearance. Nationwide Distrib. Servs., Inc. v. Jones, 496 S.W.3d 221, 225
(Tex. App.—Houston [1st Dist.] 2016, no pet.). In short, 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.” Exito Elecs., 142 S.W.3d at 304 (citing Dawson-Austin
v. Austin, 968 S.W.2d 319, 322 (Tex. 1998)). Here, Gespa argues three procedural grounds in
support of its claim that the trial court erred in granting Recom’s special appearance: (1) issue
preclusion; (2) undue delay; and (3) spoliation.
We consider each in turn.
(a) Issue preclusion
Gespa first argues that issue preclusion barred Recom from challenging personal
jurisdiction. It argues the federal district court failed to dismiss Recom from the suit before
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remanding the case to state court. It contends the lack of dismissal may be viewed as the district
court affirmatively exercising jurisdiction over Recom. It urges that “[i]ssue preclusion denied
Recom the right to take another bite at the same jurisdictional apple.” To this extent, it claims in
its briefing that Recom’s jurisdictional argument was “repeatedly rejected” by the federal court.
On this claim, however, Gespa cites no authorities and provides no substantive analysis.
And it neither cites to the record. Based on these deficiencies, this claim of issue preclusion is not
reviewable. “When an issue is inadequately briefed, and lacks a substantive analysis . . . it presents
nothing for our review.” Pedroza v. Tenet Healthcare Corp., 555 S.W.3d 608, 612 (Tex. App.—
El Paso 2018, no pet.) (citing ERI Consulting Engineers, Inc. v. Swinnea, 318 S.W.3d 867, 880
(Tex. 2010)); see Tex. R. App. P. 38.1(i) (a brief must contain clear and concise argument for
contentions made, with appropriate citations to authorities and the record).
Also, the record here shows the case was removed to federal district court based on the
presence of federal claims brought solely against Inabata. Once those claims were dismissed on
grounds of forum non conveniens, the federal district court remanded the suit back to state court
noting only that all remaining claims lacked federal subject matter jurisdiction. Thus, without
proper briefing or citation to the record, we cannot say that Recom’s jurisdictional arguments were
affirmatively or repeatedly rejected by the federal district court. We overrule Gespa’s claim of
issue preclusion.
(b) Undue delay
Gespa next argues Recom waived its right to object to personal jurisdiction by waiting
almost two years after the federal court had remanded the case back to State court before setting a
hearing on its special appearance.
Again, we conclude that Gespa failed to develop and support its argument with authorities
and record references. See Tex. R. App. P. 38.1(i). Even so, the record shows that Recom’s first
11
pleading that was brought to a hearing of any kind was its special appearance. 2 Other than mention
the number of months elapsing, Gespa makes no argument that Recom sought any substantive
relief from the trial court prior to the hearing on its special appearance. Although Recom filed a
motion to quash and a motion for protective order against Gespa’s discovery, those motions urged
that Gespa had sought discovery beyond the scope of the jurisdictional issues. Thus, Gespa only
sought relief consistent with its claim that the court lacked personal jurisdiction. See PetroSaudi
Oil Services Ltd. v. Hartley, 617 S.W.3d 116, 136 (Tex. App.—Houston [1st Dist.] 2020, no pet.)
(“A party does not waive its jurisdictional challenge by seeking affirmative relief consistent with
the special appearance.”).
As noted earlier, the plain language of Rule 120a does not contain a requirement that a
special appearance be brought within a specified time period, and we decline to impose such a
requirement here. Though many months passed while the case bounced back and forth between
state and federal court, Gespa fails to establish that Recom’s special appearance was not its first
pleading heard by the trial court.
We overrule Gespa’s claim of undue delay.
(c) Spoliation
Gespa argues that Recom should be estopped from challenging its personal jurisdiction
because it failed to cooperate with jurisdictional discovery. It contends Recom “overtly refused to
answer discovery and refused to appear for a Deposition.” It urges that Recom’s “intentional
failure to cooperate with discovery” was a spoliation tactic. In opposition, Recom asserts that any
complaint by Gespa about discovery was not properly preserved for review. We agree.
2
Although our record does not include a transcript of the hearing held on the special appearance, the parties do not
dispute that a hearing was held.
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If a party is not satisfied with an opposing party’s discovery objections or responses to
discovery inquiries, that party may move the trial court to compel discovery. See Tex. R. Civ. P.
215.1; see also Tex. R. Civ. P. 193.4 (providing that any party may request a hearing on an
objection or claim of privilege to a discovery request). To preserve error on a discovery dispute,
the appealing party must obtain a ruling by the trial court on the discovery issue. See also Tex. R.
App. P. 33.1(a)(1)(A) (requiring, for error preservation purposes, complaint to trial court by timely
request, objection, or motion stating grounds for ruling with sufficient specificity to make trial
court aware of complaint and ruling on request, objection, or motion); Epicous Adventure Travel,
LLC v. Tateossian, Inc., 573 S.W.3d 375, 390 (Tex. App.—El Paso 2019, no pet.) (providing that
obtaining a ruling or a refusal to rule, supported by objection, is an elemental requirement for
preservation of error).
Here, although Gespa filed a motion to compel depositions, it does not assert, and our
review of the record does not show, it similarly filed a motion as to any of the discovery inquiries.
Also, it appears the trial court neither heard the motion to compel depositions nor ever ruled on it.
Thus, Gespa’s failure to properly object and obtain a ruling on its discovery requests waives its
complaint on appeal.
Even so, we also reject Gespa’s characterization of Recom’s alleged actions as spoliation.
Gespa’s cited cases do not stand for the proposition that a nonresident defendant who objects to
jurisdictional discovery should be sanctioned for spoliating evidence, and its special appearance
should be denied. See Petroleum Sols., Inc. v. Head, 454 S.W.3d 482, 490 (Tex. 2014) (holding
the trial court abused its discretion in charging the jury with a spoliation instruction because any
spoliation error was harmless); Brookshire Bros., Ltd. v. Aldridge, 438 S.W.3d 9, 30 (Tex. 2014)
(holding the trial court abused its discretion in submitting a spoliation instruction when there was
13
no evidence the party intentionally concealed or destroyed evidence). Thus, we overrule Gespa’s
spoliation argument.
We turn next to consider Gespa’s merits-based argument.
(3) Merits argument
Substantively, Gespa contends that, because it affirmatively alleged that Recom did
business in Texas, it met minimal pleading requirements to confer personal jurisdiction over it. It
maintains the burden then shifted to Recom to affirmatively negate all bases of jurisdiction.
Ultimately, it argues that Recom failed to meet its evidentiary burden.
(a) Applicable law
Texas courts may exercise personal jurisdiction over a nonresident if (1) the Texas long-
arm statute authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction is consistent
with federal due-process guarantees. TV Azteca v. Ruiz, 490 S.W.3d 29, 36 (Tex. 2016) (citing
Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 149 (Tex. 2013)). The Texas long-arm
statute broadly permits jurisdiction over a nonresident doing “business in this state” if the
nonresident “commits a tort in whole or in part in this state[.]” Tex. Civ. Prac. & Rem. Code Ann.
§ 17.042(2). Thus, allegations that a tort was committed in Texas will generally satisfy the
requirements of the long-arm statute. Moncrief Oil, 414 S.W.3d at 149. However, such allegations
must also satisfy federal due-process requirements. Moki Mac, 221 S.W.3d at 575. Texas courts
interpret the long-arm statute to “reach as far as the federal constitutional requirements of due
process will allow.” Id. (quoting Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C.,
815 S.W.2d 223, 226 (Tex. 1991)).
To satisfy said requirements, personal jurisdiction may be exercised over a nonresident
defendant only if two requirements are met: (1) the defendant has “minimum contacts” with the
forum state, and (2) the exercise of jurisdiction will not offend “traditional notions of fair play and
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substantial justice.” See Luciano v. SprayFoamPolymers.com, LLC, 625 S.W.3d 1, 8 (Tex. 2021);
Moki Mac, 221 S.W.3d at 575. A nonresident 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.” Moki Mac, 221 S.W.3d at 575. That is, the in-state activities
support “a conclusion that the defendant could reasonably anticipate being called into a Texas
court.” Old Republic, 549 S.W.3d at 559 (quoting Retamco Operating, Inc. v. Republic Drilling
Co., 278 S.W.3d 333, 338 (Tex. 2009)). Even so, three important considerations guide a review of
a nonresident’s contacts with the state: (1) “only the defendants’ contacts with the forum are
relevant, not the unilateral activity of another party or a third person”; (2) “the contacts relied upon
must be purposeful rather than random, fortuitous, or attenuated; and” (3) “the defendant must
seek some benefit, advantage, or profit by availing itself of the jurisdiction.” Id. (quoting Moncrief
Oil, 414 S.W.3d at 151).
If established, minimum contacts with the forum state may give rise to either general or
specific jurisdiction. Spir Star AG v. Kimich, 310 S.W.3d 868, 872 (Tex. 2010). A court has general
jurisdiction over a nonresident defendant whose “affiliations with the State are so ‘continuous and
systematic’ as to render [it] essentially at home in the forum State.” TV Azteca, 490 S.W.3d at 37
(alteration in original) (quoting Daimler AG v. Bauman, 571 U.S. 117, 127 (2014)). By contrast,
specific jurisdiction “covers defendants less intimately connected with a State, but only as to a
narrower class of claims.” Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 592 U.S. 351,
358 (2021). The minimum contacts necessary for specific jurisdiction are established if the
defendant purposefully avails itself of the privilege of conducting activities in the forum state and
the suit arises out of or relates to the defendant’s contacts with the forum. Moki Mac, 221 S.W.3d
15at 575–76. More particularly, however, the defendant’s forum contacts must be substantially
connected to the operative facts of the litigation. Id. at 585.
Even when minimum contacts with a state are in fact established, the second prong of the
due process inquiry requires further proof that an exercise of jurisdiction over the nonresident
defendant comports with “traditional notions of fair play and substantial justice.” TV Azteca, 490
S.W.3d at 55 (quoting Int’l Shoe Co. v. State of Wash., Off. of Unemp. Comp. & Placement, 326
U.S. 310, 316 (1945); Moncrief Oil, 414 S.W.3d at 154). Under this requirement, courts must
consider several factors to evaluate the fairness and justness of exercising jurisdiction over a
nonresident defendant:
(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.
Id. at 55 (citing Moncrief Oil, 414 S.W.3d at 155). Also, when a defendant is a citizen of a foreign
country, and not just another state, we consider additional factors to include:
(6) the unique burdens placed upon the defendant who must defend itself in a
foreign legal system; (7) the state’s regulatory interests; and (8) the procedural and
substantive policies of other nations whose interests are affected as well as the
federal government’s interest in its foreign relations policies.
Id. (quoting Guardian Royal Exch. Assur., 815 S.W.2d at 229). A nonresident defendant may defeat
jurisdiction by presenting “a compelling case that the presence of some consideration would render
jurisdiction unreasonable.” Id. (quoting Spir Star AG, 310 S.W.3d at 879).
(b) Analysis
At the trial court level, Gespa did not contest Recom’s claim that it lacked general
jurisdiction in Texas, nor does it challenge the claim on appeal. Therefore, our jurisdictional
inquiry is confined to specific jurisdiction only. See Tex. R. App. P. 47.1.
16
In Gespa’s amended petition, it alleged that Recom had an office in San Francisco,
California, and it “intermediated a transaction” between co-defendants that were Texas entities.
Furthermore, Gespa asserted that Recom made false representations and committed fraud against
it. Assuming Gespa met its initial pleading burden, which is recognized as a minimal requirement,
we focus our inquiry on whether Recom negated Gespa’s allegations of jurisdictional facts. See
Omnivations, 583 S.W.3d at 791; see also Gaddy, 652 S.W.3d at 871 (stating the pleading
requirement is “minimal” and “can be satisfied with an allegation that the nonresident defendant
is doing business in Texas or committed tortious acts in Texas”).
Recom submitted a declaration asserting under penalty of perjury that it had no office in
the United States, nor any employees working in the United States. Instead, Recom averred it was
a German corporation with its headquarters in Dusseldorf. And more specifically, Recom denied
having any offices, employees, personal property, or real property in Texas. Recom contended the
agreement between Recom and Inabata was executed in Germany and no employees relabeled any
panels or otherwise met with Flextronic employees in Texas. Recom asserted it never owned any
of the solar panels that were purchased by Gespa. Rather, it avers that Inabata bought the panels
directly from Flextronics, then sold them to Gespa. As a result, it urges that Inabata was the
customer of the El Paso warehouse owned by Expeditors, not Recom. At most, then, it contends
that Recom merely authorized Inabata’s use of its trademark on the solar panels sold to Gespa.
Gespa contends Recom failed to negate alleged jurisdictional facts because the record
undisputedly established it had continuous and systematic contacts with Texas for over a year via
its agreement with Flextronics and Expeditors, and those Texas-based contacts were a direct cause
of harm to Gespa. In support, Gespa asserts the evidence established the following events or
activities: (1) that Recom entered into a contract with Flextronics, a Texas company, regarding the
17
sale of solar panels; (2) that Recom received a commission for selling such products in Texas; (3)
that Recom was responsible for intermediating the transaction between Inabata and Flextronics
regarding the purchase of solar panels; (4) that Recom negotiated the price for storage for the
warehouse and for relabeling the panels in Texas; (5) that Recom coordinated with Expeditors to
ship the panels from Texas to other parts of the world; and (6) that Recom communicated daily
with Expeditors throughout the process.
We first consider whether Recom’s agreement with Flextronics and Expeditors, and
activities related thereto, established Recom had purposefully availed itself of the privilege of
conducting activities in Texas such that it invoked the benefits and protections of the state’s laws.
Ordinarily, contracting with a Texas resident by itself is insufficient to subject a nonresident
defendant to jurisdiction in Texas. TeleVentures, Inc. v. Int’l Game Tech., 12 S.W.3d 900, 908–
909 (Tex. App.—Austin 2000, pet. denied) (citing Burger King Corp. v. Rudzewics, 471 U.S. 462,
478 (1985)). Rather, there must also be evidence demonstrating the contract was to be performed
in whole or in part in Texas. See Tex. Civ. Prac. & Rem. Code Ann. § 17.042(1). Here, there is no
allegation that Recom’s agreement was negotiated in Texas nor mention of it requiring
performance in Texas. Moreover, the record lacks any evidence that Recom sought to invoke the
benefits and protections of Texas’s laws in any of its course of conduct. Info. Servs. Group, Inc. v.
Rawlinson, 302 S.W.3d 392, 400 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) (holding it
is insufficient to establish purposeful availment when a nonresident defendant contracted with a
Texas company when there is no allegation of acts constituting a breach of the contract in Texas
or allegations that the contract required the nonresident defendant to conduct activities in Texas).
Moreover, evidence of daily phone calls with Expeditors, while Expeditors itself was
located in Texas, is insufficient to show purposeful availment. Old Republic, 549 S.W.3d at 560
18
(“When communications between a nonresident and a resident are alleged as the basis for
jurisdiction, we look to the quality and nature of the communications to establish purposeful
availment.”). Absent evidence that Recom ever sought a benefit, advantage, or profit from the
daily communications, these contacts are insufficient to constitute purposeful availment. See id.
Next, the allegations related to negotiating the price for storing the panels in Texas,
negotiating the price for relabeling the panels in Texas, and shipping the panels out of Texas to
other parts of the world are too fortuitous to confer jurisdiction. Such allegations were unsupported
with any evidence establishing that Recom itself used the El Paso warehouse or that it purposefully
selected Texas to gain a benefit from the forum. See Moncrief Oil, 414 S.W.3d at 151 (“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.”).
Even if we accept as true Gespa’s alleged facts, the asserted minimum contacts do not
establish Recom’s purposeful conduct sufficient to establish jurisdiction over it. Thus, we conclude
the trial court did not err in granting Recom’s special appearance; and to the extent Gespa claims
the trial court erred in dismissing Recom with prejudice, we further conclude Gespa’s complaint
was not preserved for our review. 3 See Tex. R. App. P. 33.1(a)(1).
3
Brought for the first time in its reply brief, Gespa asserts that the trial court erred in dismissing its claims against
Recom “with prejudice.” However, Gespa neither raised this issue in the trial court nor assigned error to it by its
opening brief. See Tex. R. App. P. 33.1(a)(1) (stating a party cannot raise for the first time on appeal an issue that was
not presented to the trial court by way of a timely request, motion, or objection); Tex. R. App. P. 38.1(f); see also
McCain v. NME Hosps., Inc., 856 S.W.2d 751, 755 (Tex. App.—Dallas 1993, no writ) (finding complaint that
dismissal of case with prejudice was not appropriate sanction was not preserved for appellate review because it was
not raised in trial court); Andrews v. ABJ Adjusters, Inc., 800 S.W.2d 567, 568–69 (Tex. App.—Houston [14th Dist.]
1990, writ denied) (op. on reh’g) (holding that appellant failed to preserve complaint that trial court improperly
dismissed claim “with prejudice” by not presenting alleged error first to the trial court). Accordingly, we conclude
that Gespa failed to preserve this portion of its complaint for our review.
19
We overrule Gespa’s first issue.
B The Forum-Selection Clause
In its second issue, Gespa contends the trial court erred in dismissing Expeditors based on
the Sales Agreement’s forum-selection clause.
Gespa added Expeditors as a named defendant on October 22, 2020, or nearly two years
after it originally filed its suit. On March 24, 2022, Expeditors filed its motion to dismiss based on
a forum selection clause contained in the Sales Agreement entered between Gespa and Inabata.
The forum-selection clause reads as follows:
The Parties hereto agree that the law of Germany shall apply, and voluntarily
submit to jurisdiction and venue in the courts of Dusseldorf is agreed as the
exclusive place of jurisdiction (venue) for any and all disputes which may arise out
of this Agreement or in connection herewith.
Enforcing Gespa’s agreement to litigate all disputes arising under the contract in Germany, the
trial court granted Expeditors’s motion and dismissed Gespa’s claims against Expeditors.
In three grounds, Gespa contends on appeal that the trial court erred in dismissing its claims
against Expeditors based on the following contractual and equitable theories: (1) that Expeditors
was estopped from disavowing the underlying Texas state court after it availed itself of the benefits
of litigating in the forum; (2) that no agreement containing a forum-selection clause existed
between Gespa and Expeditors, and Expeditors neither qualified as a third-party beneficiary of the
Sales Agreement; and (3) that public policy disfavors dismissal of Expeditors from the suit.
We reorder these grounds so as to first address whether Expeditors can enforce the Sales
Agreement as a non-signatory of the contract.
(1) Standard of review
Ordinarily, we review for an abuse of discretion a motion to dismiss predicated on a forum-
selection clause. See In re Lyon Fin. Services, Inc., 257 S.W.3d 228, 231 (Tex. 2008) (per curiam).
20
But when the dismissal centers on the interpretation of the clause as part of a contract, we review
the trial court’s interpretation de novo. Sullivan v. Microsoft Corp., 618 S.W.3d 926, 930
(Tex. App.—El Paso 2021, no pet.). In doing so, we interpret unambiguous clauses according to
their plain language under contract interpretation principles. Alattar v. Kay Holdings, Inc., 485
S.W.3d 113, 119 (Tex. App.—Houston [14th Dist.] 2016, no pet.).
(2) Applicable law
Parties preselect their dispute resolution mechanisms, to some extent, by including a
forum-selection clause in their contracts. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473
n.14 (1985); Pinto Tech. Ventures, L.P. v. Sheldon, 526 S.W.3d 428, 436 (Tex. 2017). In Texas,
these clauses are “generally enforceable and presumptively valid.” In re Laibe Corp., 307 S.W.3d
314, 316 (Tex. 2010) (orig. proceeding) (per curiam); see Rieder v. Woods, 603 S.W.3d 86, 93
(Tex. 2020). Even so, they are subject to public-policy constraints. Pinto Tech, 526 S.W.3d at 432.
Questions sometimes arise over who may benefit or be bound to a forum-selection clause,
and whether a claim falls within the scope of the clause. In resolving these disputes, courts are not
only guided by federal law, but also by drawing analogies to arbitration case law, as such clauses
are generally recognized as “a specialized kind of forum-selection clause.” Pinto Tech, 526 S.W.3d
at 437 (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 519, (1974)); In re AIU Ins. Co., 148
S.W.3d 109, 115 (Tex. 2004) (orig. proceeding). As to both clause-types, parties may benefit or
be bound only under recognized contract or agency principles. In re Western Dairy Transp.,
L.L.C., 574 S.W.3d 537, 545 (Tex. App.—El Paso 2019, no pet.) (orig. proceeding); In re Kellogg
Brown & Root, Inc., 166 S.W.3d 732, 739 (Tex. 2005) (orig. proceeding) (recognizing contract
and agency theories may bind non-signatories to arbitration agreements)).
21
As a general rule, neither an arbitration clause nor a forum-selection clause may be invoked
by a nonparty to the contract. See G.T. Leach Builders, LLC v. Sapphire V.P., L.P., 458 S.W.3d
502, 524 (Tex. 2015); Garg v. Pham, 485 S.W.3d 91, 105 (Tex. App.—Houston [14th Dist.] 2015,
no pet.). But exceptions to that rule are recognized, permitting nonparties to enforce such clauses
when criteria is met. See G.T. Leach Builders, 458 S.W.3d at 524; see also Kellogg, 166 S.W.3d
at 739 (listing six recognized theories that may bind nonparties with parties: “(1) incorporation by
reference; (2) assumption; (3) agency; (4) alter ego; (5) equitable estoppel; and (6) third-party
beneficiary”). Ultimately, we must determine the intent of the parties as expressed in the terms of
the agreement by applying ordinary principles of state contract law to determine whether
nonparties may enforce the forum selection clause. G.T. Leach Builders, LLC, 458 S.W.3d at 524.
Here, Expeditors argued multiple theories under which Expeditors could enforce the
forum-selection clause as a non-signatory of the contract: (1) equitable estoppel (based on both
direct-benefits estoppel and concerted misconduct); (2) collateral estoppel; and (3) that it qualified
as a third-party beneficiary under the terms of the contract given it falls in the category that
includes “assistants of Inabata.” Because it is dispositive, we begin with Expeditors’s first claim,
which asserts entitlement to the contract’s forum-selection clause based on direct-benefits
estoppel.
(3) Direct-benefits estoppel theory
There is no dispute that Expeditors is a nonsignatory to the Sales Agreement between
Gespa and Inabata. However, being a nonsignatory does not necessarily foreclose application of
that contract’s forum selection clause to Gespa’s claims against Expeditors. As the Texas Supreme
Court has observed in the arbitration context, “sometimes a person who is not a party to the
agreement can compel arbitration with someone who is. . . .” Meyer v. WMCO–GP, LLC, 211
22
S.W.3d 302, 305 (Tex. 2006) (citing In re Vesta Ins. Grp., Inc., 192 S.W.3d 759, 761–62
(Tex. 2006) (orig. proceeding) (per curiam)). A person who has agreed to resolve disputes with
one party in a particular forum may be required in some circumstances to resolve related disputes
with other parties in the same forum. See In re Trammell, 246 S.W.3d 815, 820 (Tex. App.—
Dallas 2008, orig. proceeding) (citing Meyer, 211 S.W.3d at 304). This results from application of
certain equitable principles. Id. at 820–21.
For example, direct-benefits estoppel allows a nonsignatory to enforce a contract against a
contract signatory. As analogously applied to arbitration, “[a] non-signatory may invoke the direct
benefits estoppel exception to enforce an arbitration clause contained in a contract that contains
other terms on which the signatory plaintiff must rely to prosecute its claims.” VSR Fin. Servs.,
Inc. v. McLendon, 409 S.W.3d 817, 831 (Tex. App.—Dallas 2013, no pet.). This estoppel applies
when “each of a signatory’s claims against a nonsignatory references or presumes the existence of
the written agreement.” In re Trammell, 246 S.W.3d at 821. In such case, it can be said that the
signatory’s claims “arise out of and relate directly to the written agreement, and arbitration is
appropriate.” Id. For sure, “[w]hen a party’s right to recover and its damages depend on the
agreement containing the arbitration provision, the party is relying on the agreement for its
claims.” Id. Said differently, “[t]he claim must ‘depend on the existence’ of the contract and be
unable to ‘stand independently’ without the contract.” G.T. Leach Builders, LLC v. Sapphire V.P.,
LP, 458 S.W.3d 502, 527–28 (Tex. 2015) (internal citations omitted). That is, the alleged liability
must “arise[] solely from the contract or must be determined by reference to it.” Weekley Homes,
180 S.W.3d at 132.
Here, Expeditors, a nonsignatory, seeks to enforce the Sales Agreement’s forum selection
clause against Gespa, a signatory, based upon direct-benefits estoppel. By its allegations against
23
Expeditors, Gespa asserted a claim of fraud against Expeditors and alleged Expeditors “conceived
a plan to further [Inabata’s and Recom’s] fraudulent scheme,” whereby it placed a Recom label
over the SunEdison labels of the purchased solar panels. Gespa alleged Expeditors relabeled the
panels with the intent that Gespa would rely upon the new labels and accept the delivered panels
as genuine Recom panels. Additionally, Gespa asserted Expeditors made material
misrepresentations by relabeling the panels and creating false and fraudulent data related thereto.
Gespa urged these misrepresentations harmed it because it relied on each false statement made to
it.
In considering the nature of the claim against Expeditors, Gespa’s allegations necessarily
presume the existence of the Sales Agreement itself because the fact of whether Expeditors made
false representations concerning the type of solar panels it stored depended entirely on the type of
panels Gespa had contracted to receive. The allegation that Expeditors fraudulently relabeled the
panels does not stand alone, but rather, it exists only with the understanding that Gespa contracted
to buy a certain type of solar panel under its contract with Inabata. The allegation that Expeditors
fraudulently changed the labels affixed to the panels depends on the claim that Gespa did not
receive the type of solar panels it contracted to receive by the terms of the Sales Agreement.
In sum, Expeditors asserts that Gespa cannot prove its fraud claims against it without
necessarily referencing the express terms of the contract with Inabata. On this point, we agree.
Accordingly, the Sales Agreement containing the forum-selection clause does include terms on
which Gespa must rely to pursue its claims against Expeditors because the relabeling allegation is
otherwise irrelevant unless Gespa first establishes it contracted to purchase Black Panther panels
supplied by Inabata. And here, that contractual right on which Gespa relies comes directly from
the terms of the Sales Agreement on which Gespa must rely to prosecute its claims. See In re
24
Trammell, 246 S.W.3d at 821 (citing Meyer, 211 S.W.3d at 306, and Grigson, 210 F.3d at 527);
Smith v. Kenda Capital, LLC, 451 S.W.3d 453, 460 (Tex. App.—Houston [14th Dist.] 2014, no
pet.).
Accordingly, because the claims against Expeditors presumes the existence of the Sales
Agreement, the circumstances here meet the criteria for allowing Expeditors to enforce that
agreement’s forum-selection clause against Gespa based upon a theory of direct-benefits estoppel.
Thus, because we conclude the trial court could have granted Expeditors’s motion to dismiss on
this theory alone, we need not address any of the other theories presented by Expeditors. See
Tex. R. App. P. 47.1. (providing that a court of appeals must hand down a written opinion that is
as brief as practicable but yet still addresses every issue raised and necessary for a final disposition
of the appeal).
(4) Waiver
Having concluded that Expeditors has a right to enforce the forum selection clause under
a direct-benefits estoppel theory, we turn next to consider whether the right was otherwise waived.
In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (orig. proceeding) (providing
that—“like other contractual rights”—a forum-selection clause may be waived, and it would
ordinarily be “unreasonable or unjust” for a court to enforce a forum-selection clause after it has
been waived).
“A party waives a forum-selection clause by substantially invoking the judicial process to
the other party’s detriment or prejudice.” Id at 713 “Whether litigation conduct is ‘substantial’
depends on context and is determined on a case-by-case basis from the totality of the
circumstances.” Id. Substantial invocation and resulting prejudice must both occur to waive the
right. Perry Homes v. Cull, 258 S.W.3d 580, 592–93 (Tex. 2008). In determining whether a right
25
has been waived, the Supreme Court has described that “the precise question is not so much when
waiver occurs as when a party can no longer take it back.” Id. at 595.
Gespa argues that Expeditors extensively availed itself of the benefits of the underlying
Texas forum such that it could no longer demand a dismissal based on a change of forum. To
demonstrate substantial invocation of the judicial process, it points to the extent of the litigation
conduct, highlighting that Expeditors engaged in extensive discovery including the taking of
numerous depositions; it filed a motion to exclude experts; it agreed to scheduling orders; it
participated in court ordered mediation; and it filed multiple, unsuccessful motions for summary
judgment. Based on the totality of this conduct within a Texas forum, Gespa argues that Expeditors
waived its right to enforce the contract’s forum-selection clause.
Expeditors acknowledges that it did not seek to enforce the forum-selection clause until
March 24, 2022, or approximately 17 months after it was first brought into the lawsuit as a named
defendant. But it urges that the record also shows it sought to enforce the forum-selection clause
only two months after it learned of its existence. Expeditors maintains it first learned of the clause
during the deposition of Gespa’s corporate representative on January 20, 2022. During that
deposition, Nygart testified to the contractual right by stating: “we know for sure that we have a
contract with Inabata that pertains to Germany, because it’s a German jurisdiction, that we have
to—where we have to address whatever we have pertaining to the contract in Germany.”
Immediately following, after learning of this contractual term, Expeditors supplemented its
responses to discovery, amended its answer, and filed its motion to dismiss based on its
enforcement of the forum-selection clause. Expeditors explains it lacked earlier knowledge of the
clause because Gespa had pleaded around the Sales Agreement and did not attach a copy to its
petition when it joined Expeditors as a party to the suit. In short, Expeditors argues it moved to
26
enforce the clause shortly after it learned of its existence, and it did not intentionally waive it
through its litigation conduct.
Based on the record and arguments, the trial court concluded that any delay on Expeditors’s
part was reasonable and found against waiver. Deferring to the trial court’s factual findings, as we
must, we conclude the Perry factor considering delay weighs against waiver. And as for other
factors considered, although Expeditors did participate in litigation, we cannot say it substantially
availed itself of the benefits of the forum once it learned of the existence of the forum-selection
clause. See In re Nationwide Ins., 494 S.W.3d at 713 (noting that “[w]hether a party has
substantially invoked the judicial process is a question of degree judged from the totality of the
circumstance”). Moreover, the test for waiver is one similar to estoppel. It is “a defensive theory
barring parties from asserting a claim or defense when their representations have induced ‘action
or forbearance of a definite and substantial character’ and ‘injustice can be avoided only by
enforcement.’” Id. at 714 (quoting Perry Homes, 258 S.W.3d at 593). Given that Expeditors moved
to enforce the forum-selection clause only a few months after learning of its existence, we conclude
that Gespa has failed to show the trial court abused its discretion by rejecting its claim that
Expeditors impliedly waived the forum-selection clause by substantially invoking the judicial
process to Gespa’s detriment or prejudice. We overrule Gespa’s second issue.
IV. TRIAL RULINGS
A. The directed verdict
In its third issue, Gespa contends the trial court erred in granting a directed verdict on its
claim of fraud by nondisclosure, which it had asserted against Flextronics.
27
(1) Standard of review
We review de novo the trial court’s grant of a directed verdict. JPMorgan Chase Bank,
N.A., v. Orca Assets G.P., L.L.C., 546 S.W.3d 648, 653 (Tex. 2018); City of Keller v. Wilson, 168
S.W.3d 802, 823 (Tex. 2005). In doing so, a directed verdict is reviewed under the same legal-
sufficiency standard that applies to no-evidence summary judgments. Merriman v. XTO Energy,
Inc., 407 S.W.3d 244, 248 (Tex. 2013). When responding to a motion for directed verdict, the
nonmovant bears the burden of identifying evidence raising a genuine issue of material fact as to
each challenged element of its cause of action. See Boerjan v. Rodriguez, 436 S.W.3d 307, 310
(Tex. 2014). We may affirm a directed verdict on any ground that supports it. RSL-3B-IL, Ltd. v.
Prudential Ins. Co. of Am., 470 S.W.3d 131, 136 (Tex. App.—Houston [1st Dist.] 2015, pet.
denied); Exxon Corp. v. Breezevale Ltd., 82 S.W.3d 429, 443 (Tex. App.—Dallas 2002, pet.
denied).
(2) Analysis
Gespa argues that, prior to trial, Flextronics filed a no-evidence motion for summary
judgment on the fraud by nondisclosure claim, and the trial court denied the motion. And during
its case-in-chief at trial, it claims it presented evidence establishing that Flextronics not only made
false statements to it, but also the labels affixed to the solar panels contained false statements and
false certifications. In briefing the issue, however, Gespa neither addresses the individual elements
of fraud by nondisclosure, nor does it provide analysis highlighting the nature and extent of
evidence of record raising a genuine issue of material fact on the fraud by nondisclosure claim.
Boerjan, 436 S.W.3d at 310. A party asserting error on appeal bears the burden of showing the
record supports the contention raised, and of specifying the place in the record where matters upon
28
which it relies or on which it complains are shown. See Tex. R. App. P. 38.1(h). On this issue, we
conclude that Gespa failed to carry its burden on appeal. See id.
We overrule Gespa’s third issue.
B. The trial court’s evidentiary rulings
In its fourth and fifth issues, Gespa challenges the trial court’s evidentiary rulings during
trial to the extent it admitted spliced-video testimony while excluding relevant evidence.
(1) Standard of review
Evidentiary rulings are reviewed for an abuse of discretion. Cent. Texas Water Supply
Corp. v. Kempner Water Supply Corp., 645 S.W.3d 799, 815–16 (Tex. App.—El Paso 2022, pet.
denied) (citing U-Haul Int’l, Inc. v. Waldrip, 380 S.W.3d 118, 132 (Tex. 2012)). A trial court
abuses its discretion when it rules “without regard for any guiding rules or principles.” City of
Brownsville v. Alvarado, 897 S.W.2d 750, 754 (Tex. 1995). “An appellate court must uphold the
trial court’s evidentiary ruling if there is any legitimate basis for the ruling.” Owens-Corning
Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). An appellate court should not reverse
a trial court for an erroneous evidentiary ruling unless the error probably caused the rendition of
an improper judgment. Id. (citing Tex. R. App. P. 44.1). A party asserting that a trial court’s
evidentiary ruling should be reversed must show: (1) the trial court erred in admitting or striking
evidence; (2) the error was regarding evidence that was controlling on a material issue dispositive
of the case and was not cumulative; and (3) the error probably caused rendition of an improper
judgment in the case. See Hall v. Domino’s Pizza, Inc., 410 S.W.3d 925, 929 (Tex. App.—El Paso
2013, pet. denied) (citing Texas Dep’t of Transp. v. Able, 35 S.W.3d 608, 617 (Tex. 2000)).
(2) Admission of evidence
Gespa’s fourth issue argues the trial court erred by allowing Flextronics to introduce a
purportedly “spliced video” of deposition testimony without hearing objections. Gespa contends
29
it timely objected to deposition questions, to the extent necessary, in accord with Rule 199.5(e) of
the Texas Rules of Civil Procedure. Yet, at trial, when it learned that Flextronics’s method of
editing to streamline the video presentation altered or changed the order of the deposition, it timely
raised its objection to the trial court. Gespa argued in the court below that it had planned on
objecting live while the video played to the jury, but it could no longer do so because it could not
track the video with the deposition transcript. The trial court advised that Gespa had an obligation
to timely file written objections to any party’s designation and to bring them to the court’s
attention. On appeal, Gespa argues the court’s ruling deprived it of its opportunity to raise
objections to the “spliced video,” and to seek a ruling from the court. In short, Gespa contends it
was denied procedural due process.
In a series of responses, Flextronics argues first that it had every right to arrange the video
deposition testimony in the way that made the most sense for the presentation of its case; second,
that it timely filed a designation of deposition excerpts informing Gespa of testimony it planned to
use during trial; third, that Gespa was given the same opportunity as all other parties to designate
and object to deposition testimony; fourth, that Gespa failed to timely raise objections for several
days prior to Flextronics’s playing of the video for the jury; fifth, that even at trial, Gespa failed to
obtain a ruling on its objections; and finally, that Gespa still has not specified which objections it
seeks to raise about video testimony, nor how admission of such testimony caused the rendition of
an improper judgment.
The record shows that, on July 25, 2022, or the morning of the first day of trial, Flextronics
filed its written notice of deposition excerpts. As for its witness, Spiros Corcokios, the designation
included page and line references from the deposition taken on October 26, 2021. After eight days
30
of trial, when Flextronics called Corcokios to testify by video deposition, and the video played for
three and a half pages of transcript, Gespa’s counsel objected, and a bench conference ensued.
The trial court asked counsel to clarify whether it objected that deposition objections had
been taken out of the edited video. Gespa’s counsel responded that he objected procedurally that
he had not had an opportunity to fully review the video as to how it was prepared for the jury. He
stated as follows:
It’s one thing to take the video and take out the objections. But when you couple
that with the fact that they have rearranged--wrong word--they have changed the--
gotten rid of sections to purportedly streamline it, that has changed the order of
which--changed the manner in which its being presented from the manner in which
I understood based on their disclosure it would be presented--if that makes sense.
Flextronics’s counsel interjected that the parties had been ordered to exchange objections. He
asserted he did not receive objections from Gespa after he sent his objections. Instead, to streamline
the process, Gespa asked for it to be allowed to object live while the video played during the trial.
Rejecting the request, the trial court made it clear that once Flextronics had filed its
designations, it was then incumbent on Gespa to object in writing and bring objections to the
court’s attention for a ruling. The trial court also rejected Gespa’s complaint that witness
designations were made late. The trial court offered extra time in between each side’s presentation
but it nonetheless stressed that no objections were brought to its attention regarding the
designations made. The court reiterated that Gespa could not obtain live rulings on objections it
had otherwise failed to make by bringing them to the court’s attention even as recently as that very
morning before trial had begun. On that point, the bench conference concluded, and the video
deposition continued playing to the jury.
31
After four pages of transcript continued, Gespa’s counsel objected and asked to approach
the bench. When the trial court asked if the objection was similar, counsel responded that he had
additional information he thought might be helpful. At the bench, Gespa’s counsel asserted:
I’ll just be brief, just so the record is clear. We did file--when we cross-designated-
-and we identified the form of the objections that we had to these various issues.
And so it was my understanding--and maybe I was wrong--but it was my
understanding that I did preserve the issue of the objections to these questions as
we’re going through. Because as we’re seeing, a lot of these questions were just flat
out leading, asking for various answers. So it was my intention to preserve that
objection and I did actually file this over the weekend with the objections
highlighted. And so if I somehow waived my objection, that was certainly not my
intent, but my intention was to preserve it.
After the trial court noted Gespa’s complaint, it permitted Flextronics to continue with playing the
video for the jury. The video played uninterrupted for another twenty pages of the reporter’s
record. Upon its conclusion, the trial court asked whether Gespa’s counsel wanted additional time
before it made its presentation. After Gespa responded affirmatively, the court recessed for the
day. The next morning, Gespa presented its cross-excerpts from the same deposition by reading
questions and answers from the deposition transcript.
On appeal, Gespa generally contends the trial court deprived it of procedural due process
by not allowing it to present live objections, and obtain corresponding rulings, pertaining to the
excerpted video testimony of witness Corcokios.
On this issue, we conclude that Gespa failed to preserve error at trial; and still, on appeal,
it failed to demonstrate how purported error probably caused the rendition of an improper
judgment. First, the record here shows that Gespa failed to identify at trial which portions of the
deposition testimony it found objectionable based on specific objections it raised. See Tex. R. App.
P. 33.1 Second, it failed to show on appeal how the court’s admission of purportedly, unidentified
32
testimony probably caused rendition of an improper judgment. See Tex. R. App. P. 44.1; Malone,
972 S.W.2d at 43. Accordingly, for these reasons, we overrule Gespa’s fourth issue.
(3) Exclusion of evidence
In its fifth issue, Gespa argues the trial court erred by excluding two types of evidence.
First, it complains of the exclusion of testimony from Edmond J. Martin, one of its experts. Second,
it complains of the exclusion of evidence showing lost profit damages pertaining to the remaining
two phases of the project, which were each identified as Phase II and III.
(a) Expert testimony
First, Gespa contends the trial court erred in excluding its expert, Edmond J. Martin.
Assuming without deciding that the exclusion was erroneous, Gespa nevertheless failed to make a
showing of resulting harm. On appeal, Gespa focuses on its showing of good cause for its late
designation, urging there was no unfair surprise or unfair prejudice. However, in bringing its
challenge, it fails to identify how the exclusion of its expert probably resulted in an improper
judgment. See Alvarado, 897 S.W.2d at 753 (“A person seeking to reverse a judgment based on
evidentiary error need not prove that but for the error a different judgment would necessarily have
been rendered, but only that the error probably resulted in an improper judgment, i.e., that,
considering the entire record, “the judgment turns on the particular evidence excluded or
admitted.”). In failing to address harm, we conclude that Gespa failed to meet its burden on appeal.
See id. Thus, to this extent, we overrule in part its fifth issue.
(b) Damages
In the remaining part of its fifth issue, Gespa claims the trial court erred in refusing to admit
evidence of damages resulting from the loss of the other two phases of the project, Phases II and
III. Gespa argues it preserved error by its proffer of proof at trial. The record shows that Gespa in
33
fact made a proffer of evidence of lost profit damages outside the presence of both the jury and the
court.
In its briefing on appeal, Gespa claims its offer of proof states conclusively the damages it
sustained from lost profit damages attributable to the loss of completion of Phases II and III.
Beyond a bare conclusory statement, Gespa provides no legal support nor argument with citation
to authorities in support of its claim. Tex. R. App. P. 38.1(i). Moreover, lost profits must be proven
with reasonable certainty. Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc.,
960 S.W.2d 41, 50 (Tex. 1998) (“Under the benefit-of-the bargain measure, lost profits on the
bargain may be recovered if such damages are proved with reasonable certainty.” (citing
RESTATEMENT (SECOND) OF TORTS § 549(2) (1977))). Last, Gespa only challenges exclusion of
evidence related to Phase II and III damages without addressing the trial court’s directed verdict,
which precluded the recovery of the same damages. See Tex. R. App. P. 33.1.
For these reasons, we conclude Gespa failed to show the trial court abused its discretion in
excluding evidence on its claim for lost profits for Phases II and III. Thus, we overrule the
remaining part of Gespa’s fifth issue.
C. The jury charge
In issues six, seven, and eight, Gespa contends the trial court erred in refusing to submit
jury questions for causes of action on which the trial court had granted directed verdict (i.e., joint
enterprise, aiding and abetting, and conspiracy). While Gespa’s ninth issue challenges the trial
court’s omission of a jury question on agency. Unlike issues six, seven, and eight, the trial court
did not grant a directed verdict on Gespa’s agency theory. But it did rule that it would not submit
an agency question to the jury, nor would it permit Gespa to argue agency as a disputed factual
issue. Finally, in its tenth issue, Gespa contends the trial court improperly submitted a question on
responsible third parties to the jury.
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We address these issues in two parts. First, we address the charge question regarding claims
on which the trial court granted directed verdict separate from the one it did not. Second, we
consider whether the trial court erroneously submitted responsible third parties to the jury.
(1) Standard of review
“We review a trial court’s decision to submit or refuse a particular instruction under an
abuse of discretion standard.” Thota v. Young, 366 S.W.3d 678, 687 (Tex. 2012) (quoting In re
V.L.K., 24 S.W.3d 338, 341 (Tex. 2000)). The trial court has considerable discretion to determine
proper jury instructions, and “[i]f an instruction might aid the jury in answering the issues
presented to them, or if there is any support in the evidence for an instruction, the instruction is
proper.” La.-Pac. Corp. v. Knighten, 976 S.W.2d 674, 676 (Tex. 1998) (per curiam). “An
instruction is proper if it (1) assists the jury, (2) accurately states the law, and (3) finds support in
the pleadings and evidence.” Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851,
855–56 (Tex. 2009). An appellate court will not reverse a judgment for an error of law unless it
concludes the error complained of: (1) “probably caused the rendition of an improper judgment;”
or (2) “probably prevented the appellant from properly presenting the case to the court of appeals.”
Tex. R. App. P. 44.1(a). “Charge error is generally considered harmful if it relates to a contested,
critical issue.” Hawley, 284 S.W.3d at 856.
(2) Applicable law
Rule 278 of the Texas Rules of Civil Procedure provides that a trial court “shall submit the
questions, instructions and definitions in the form provided by Rule 277, which are raised by the
written pleadings and the evidence.” Tex. R. Civ. P. 278. It is true that “[i]f an issue is properly
pleaded and is supported by some evidence, a litigant is entitled to have controlling questions
submitted to the jury.” Triplex Commc’ns, Inc. v. Riley, 900 S.W.2d 716, 718 (Tex. 1995).
35
(3) Analysis
(a) Claims resolved by directed verdict
As stated earlier, the trial court resolved Gespa’s claims of joint enterprise, aiding and
abetting, and conspiracy all by rendering directed verdict against Gespa. By doing so, these claims
were eliminated from the pleadings before they even had a chance to go to the jury. The trial
court’s directed verdict resulted in no duty to provide a jury charge on the claims. See Salazar v.
Sanders, 440 S.W.3d 863, 873 (Tex. App.—El Paso 2013, pet. denied). Charge error and directed
verdict error are two separate issues triggered by separate judicial rulings, which are reviewed
under separate standards of review. Id. That is, a challenge to a jury charge ruling does not
encompass a challenge to a trial court’s grant of directed verdict. That issue must be raised
separately. Salazar, 440 S.W.3d at 873; Tex. R. App. P. 38.1(f).
Yet, even if we construed Gespa’s issues as challenging the directed verdict rendered
against these claims, Gespa failed to carry its burden to show what evidence was before the trial
court that raised a genuine issue of material fact to support their required elements. Boerjan, 436
S.W.3d at 310. To illustrate, we address each claim individually, and in turn.
(b) Joint enterprise
The essential elements of joint enterprise are: “(1) an agreement, express or implied, among
the members of the group; (2) a common purpose to be carried out by the group; (3) a community
of pecuniary interest in that purpose, among the members; and (4) an equal right to a voice in the
direction of the enterprise, which gives an equal right of control.” Salazar v. Ramos, 361 S.W.3d
739, 751–52 (Tex. App.—El Paso 2012, pet. denied).
First, Gespa assumes that the trial court granted directed verdict based on Flextronics’s
argument that an intentional tort cannot be the underlying claim for joint enterprise. Gespa claims
this was in error because the Supreme Court of Texas only limited joint enterprise claims to those
36
that have a business or pecuniary interest. We conclude it is not necessary to address this issue
because it was not the only theory argued to the trial court and we may affirm a trial court’s directed
verdict on any ground that supports it. Prudential Ins., 470 S.W.3d at 136; Breezevale Ltd., 82
S.W.3d at 443. Moreover, Gespa fails to meet its burden of showing the record supports the
contention raised, and of specifying the place in the record where matters upon which it relies or
on which it complains are shown. See Tex. R. App. P. 38.1(h). Rather, it merely states the
following: “Gespa succeeded in proving its underlying fraud claim[,] . . . [t]herefore, based upon
Texas law, the trial court erred in dismissing Gespa’s theory of liability based upon joint
enterprise.” Lacking record references, we conclude this conclusory argument is insufficient to
overcome directed verdict. Boerjan, 436 S.W.3d at 310.
(c) Aiding and abetting
The Supreme Court of Texas “has not expressly decided whether Texas recognizes a cause
of action for aiding and abetting.” First United Pentecostal Church of Beaumont v. Parker, 514
S.W.3d 214, 224 (Tex. 2017). Even so, Gespa and Flextronics both acknowledge there are three
“types” of aiding and abetting conduct: concert action, assisting and participating, and assisting
and encouraging. Here, Gespa presents an argument for each by conclusively stating “[t]here is
evidence in the record to support imposition of joint and several liability[.]” Despite this claim, we
are not required to search through the record for facts supporting Gespa’s position. See Slagle v.
Prickett, 345 S.W.3d 693, 702 (Tex. App.—El Paso 2011, no pet.) (recognizing that, without
guidance, appellate courts are not required to search a record to determine whether assertions
regarding facts or theories are valid); see also Tex. R. App. P. 38.1. We conclude Gespa failed to
meet its burden to overturn directed verdict on aiding and abetting. Boerjan, 436 S.W.3d at 310.
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(d) Conspiracy
The elements of civil conspiracy are: “(1) two or more persons; (2) an object to be
accomplished; (3) a meeting of minds on the object or course of action; (4) one or more unlawful,
overt acts; and (5) damages as the proximate result.” Agar Corp., Inc. v. Electro Circuits Int’l,
LLC, 580 S.W.3d 136, 141 (Tex. 2019). Here, Gespa contends there is evidence in the record to
impose liability based on conspiracy. Without proper support to the record, we conclude Gespa
failed to meet its burden to overturn the directed verdict on conspiracy. See Slagle, 345 S.W.3d at
702; see also Tex. R. App. P. 38.1; Boerjan, 436 S.W.3d at 310.
For all of these reasons, we overrule Gespa’s sixth, seventh, and eighth issues.
(e) Agency theory
In its ninth issue, Gespa challenges the trial court’s omission of a jury question on agency.
Gespa contends the trial court refused to allow Gespa to elicit testimony or present argument on
whether Recom was acting as an agent for Flextronics. Flextronics responds arguing the question
of agency was never before the trial court because Gespa failed to assert agency in its pleadings.
Unlike issues six, seven, and eight, the trial court did not grant directed verdict on this theory.
Instead, it ruled it would not submit a question on agency to the jury nor allow Gespa to elicit
testimony referencing this claim.
It is within the trial court’s discretion to submit questions to the jury. See Thota, 366 S.W.3d
at 687. The trial court “shall submit the questions, instructions and definitions in the form provided
by Rule 277, which are raised by the written pleadings and the evidence.” Tex. R. Civ. P. 278.
Here, Gespa does not contest the court’s ruling that it failed to expressly assert agency in its live
pleadings. However, it contends that its pleadings provided fair notice of an agency theory by its
allegation that: “Flex[tronics] then entered into a Sales Representative Agreement with [Recom].”
At trial, Flextronics objected to questions referencing an agency relationship and inclusion of an
38
agency question in the jury charge. Flextronics specifically noted it wanted to make it clear it was
not trying the issue by consent.
On review, we conclude the issue of agency was not “raised by the written pleadings [or]
the evidence.” Tex. R. Civ. P. 278; see also Tex. R. Civ. P. 67 (allowing issues tried by express or
implied consent of the parties to be treated as if they had been raised in the pleadings).
Accordingly, we conclude the trial court did not err in refusing to submit a question to the jury on
agency.
We overrule Gespa’s ninth issue.
(f) Responsible third parties
In its tenth issue, Gespa contends the trial court did not have good cause for granting
Flextronics’s motion to designate Recom and Expeditors as responsible third parties, and to
thereafter submit these parties to the jury for a finding on proportionate responsibility.
Section 33.004 of the Civil Practice and Remedies Code provides: “A defendant may seek
to designate a person as a responsible third party by filing a motion for leave to designate that
person as a responsible third party. The motion must be filed on or before the 60th day before the
trial date unless the court finds good cause to allow the motion to be filed at a later date.” Tex. Civ.
Prac. & Rem. Code Ann. § 33.004(a). Gespa asserts two reasons on why the trial court’s grant of
designation was error. First, it contends “the indivisible injury makes it impossible to apportion
percentages to different defendants.” Second, Gespa asserts Flextronics did not designate Inabata
as a responsible third party, and it otherwise failed to timely designate Recom and Expeditors. We
consider each argument in turn.
(i) Joint liability
Gespa argues that because there is no market value for Phase I of the solar project, and
because the remaining phases were canceled, it claims it is not possible to apportion the resulting
39
harm. Gespa cites a string of cases asserting that Chapter 33 does not apply to vicarious liability
claims, and it further asserts “this is a conspiracy case.” See Guillory v. Dietrich, 598 S.W.3d 284,
296 (Tex. App.—Dallas 2020, pet. denied) (explaining claims for conspiracy are not subject to
Chapter 33); Lakes of Rosehill Homeowners Ass’n v. Jones, 552 S.W.3d 414, 420 (Tex. App.—
Houston [14th Dist.] 2018, no pet.) (same); Stephens v. Three Finger Black Shale P’ship, 580
S.W.3d 687, 719 (Tex. App.—Eastland 2019, pet. denied) (same).
Gespa contends Chapter 33 is inapplicable to this case because conspiracy was directly
asserted. However, the trial court granted directed verdict against Gespa on its conspiracy theory.
Thus, because the conspiracy claim was rejected, Chapter 33 applied to Gespa’s remaining claim
of fraud. See Tex. Civ. Prac. & Rem. Code Ann. § 33.002(a) (applying Chapter 33 to causes of
actions “based on tort in which a defendant, settling person, or responsible third party is found
responsible for a percentage of the harm for which relief is sought”).
(ii) Timeliness
Gespa next contends Flextronics failed to designate Inabata as a responsible third party and
failed to timely designate Recom and Expeditors as responsible third parties. The parties seem to
agree that the deadline for designating responsible third parties was May 26, 2022, or 60 days
before trial was set to begin. Nonetheless, the parties dispute the nature of the pleading filed and
on what date. We begin with a review of applicable motions for designations.
Our review of the record shows Flextronics did in fact file on September 13, 2021, a motion
to designate Inabata as a responsible third party, after Inabata was dismissed by a ruling of the
federal district court. Notably, Expeditors also filed a motion to designate Inabata as a responsible
third party. Flextronics also filed a motion for leave to designate Recom as a responsible third
party on February 15, 2022, after the court granted Recom’s special appearance. The record also
shows that Flextronics filed a motion to confirm Recom’s designation as a responsible third party
40
on June 28, 2022. On the same day, Flextronics filed a motion for leave to designate Expeditors
as a responsible third party.
From this record, we conclude that Inabata was timely designated as a responsible third
party. Gespa takes issue, however, because there is no order on Flextronics’s designation of
Inabata. But the record does contain an order on Expeditors’s motion to designate Inabata as a
responsible third party. Although Expeditors was later dismissed as a defendant, we see no reason
why the trial court’s order would otherwise not continue in effect. Moreover, Gespa gives no basis
for disregarding this order. Said differently, there is nothing in § 33.004 that would allow Inabata
to be struck on this ground. See Tex. Civ. Prac. & Rem. Code Ann. § 33.004(l) (articulating a
single ground for striking a designation of a responsible third party: “that there is no evidence that
the designated person is responsible for any portion of the claimant’s alleged injury or damage”);
see also In re Brokers Logistics, Ltd., 320 S.W.3d 402, 406 (Tex. App.—El Paso 2010, no pet.)
(rejecting argument that designation of a responsible third party should be rejected when basis not
authorized by the statute).
We also conclude Flextronics’s designations of Recom was timely made. Gespa only
references Flextronics’s motion to designate Recom on June 28, arguing it was untimely. But the
record shows Flextronics first sought to designate Recom on February 15, 2022, or more than 60
days before trial. The June 28 motion seems to be intended to obtain a ruling from the trial court.
Gespa does not show why the later motion results in untimeliness on the part of the original
designation.
As for Expeditors, Flextronics asserts Expeditors was dismissed from the suit on June 22,
2022, or less than 60 days before trial was set to begin. Thereafter, Flextronics filed their motion
to designate Expeditors as a responsible third party. In the motion, Flextronics argued it had good
41
cause for filing the motion when it did because Expeditors was a party at the 60-day mark and was
only dismissed 27 days before trial.
Gespa contends Flextronics did not have good cause because Expeditors was known to
Flextronics from the beginning of the case. We disagree and conclude Flextronics had good cause
for its later filing of its designation of Expeditors as a responsible third party. See In re CVR
Energy, Inc., 500 S.W.3d 67, 79 (Tex. App.—Houston [1st Dist.] 2016, orig. proceeding [mand.
denied]) (allowing the designation of a former co-defendant as a responsible third party 29 days
before trial because the former co-defendant was still a party at the 60-day mark); see also Sanchez
v. Castillo, No. 05-18-01033-CV, 2020 WL 1042519, at *5 (Tex. App.—Dallas Mar. 4, 2020, no
pet.) (mem. op.) (finding that because the party defendant sought to designate as a responsible
third party was a defendant in the lawsuit until the morning of trial, the current defendant was not
required to designate until that time). Gespa counters stating these cases are distinguishable
because the plaintiff had nonsuited the dismissed defendants from the suit. We find that to be a
distinction without a difference. Section 33.004 does not require a defendant to designate a co-
defendant as a responsible third party in disclosures. See Tex. Civ. Prac. & Rem. Code Ann.
§ 33.004(d). Accordingly, it is irrelevant whether the defendant was dismissed by a plaintiff’s
nonsuit or by a court’s order, Flextronics’s designation of Expeditors at the time it was dismissed
was timely. We conclude Flextronics supported their motion with good cause.
(iii) Statute of limitations
Gespa last contends Flextronics could not designate responsible third parties because the
four-year statute of limitations on its fraud claim had run at the time of the designations. See
Tex. Civ. Prac. & Rem. Code Ann. § 33.004 (barring designation of responsible third parties after
the statute of limitations had run as to that party). Gespa contends that the alleged fraud was
discovered in June 2017, which resulted in a deadline of June 2021 for bringing a fraud claim.
42
Accordingly, Gespa asserts Flextronics did not designate any responsible third parties until after
the fraud limitations period had run.
The limitation imposed by § 33.004 is a “procedural safeguard[] that prevent[s] a defendant
from undercutting ‘the plaintiff’s case by belatedly pointing its finger at a time-barred responsible
third-party against whom the plaintiff has no possibility of recovery.’” In re CVR Energy, 500
S.W.3d at 73. It “seeks to address a defendant’s interest in identifying nonparties who may have
some culpability while recognizing that a plaintiff has time limitations on pursuing its claims
against parties not already included in its suit.” Id.Flextronics asserts Gespa’s argument is a red herring because Inabata, Recom, and
Expeditors were all included as defendants by Gespa before the applicable statute of limitations
had run. By including them as defendants, Flextronics contends that Gespa already knew about
each party’s potential culpability prior to the running of limitations. We agree. Flextronics did not
have an obligation to “timely disclose” its co-defendants as responsible third parties, therefore,
§ 33.004 does not prevent it from designating its former co-defendant as a responsible third party
after that party was dismissed. Tex. Civ. Prac. & Rem. Code Ann. § 33.004(d).
For all these reasons, we overrule Gespa’s tenth and final issue.
V. CONCLUSION
We affirm the trial court’s order dismissing all claims against Recom. Additionally, we
affirm the trial court’s order enforcing the forum selection clause and granting Expeditors’s motion
to dismiss. Last, we affirm the trial court’s take nothing judgment entered against Gespa and in
favor of Flextronics.
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GINA M. PALAFOX, Justice
October 9, 2024
Before Alley, C.J., Palafox and Soto, JJ.
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