Anthony A. Rieder Ed Rapee III And Cadbury Solutions, LLC AND Kenny Woods v. Alan Meeker and CQuentia Series, LLC AND Anthony A. Rieder Ed Rapee III And Cadbury Solutions, LLC

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-17-00176-CV
___________________________
ANTHONY A. RIEDER, ED RAPEE III, AND CADBURY SOLUTIONS, LLC,
Appellants
V.
ALAN MEEKER, Appellee
and
ANTHONY A. RIEDER AND ED RAPEE III, Appellants
V.
CQUENTIA SERIES, LLC, Appellee
and
KENNY WOODS, Appellant
V.
ANTHONY A. RIEDER, ED RAPEE III, AND CADBURY SOLUTIONS, LLC,
Appellees
On Appeal from the 342nd District Court
Tarrant County, Texas
Trial Court No. 342-288556-16
Before Sudderth, C.J.; Bassel and Walker, JJ.
Memorandum Opinion by Justice Bassel
MEMORANDUM OPINION ON REMAND
I. Introduction
This special-appearance appeal is on remand from the Supreme Court of Texas
after that court granted the petition for review filed by Appellants and Appellees
Anthony A. Rieder, Ed Rapee III, and Cadbury Solutions, LLC (collectively,
Defendants) and reversed this court’s judgment. See Rieder v. Woods, 603 S.W.3d 86, 102
(Tex. 2020). Defendants filed a special appearance contesting the trial court’s personal
jurisdiction over them for the claims brought against them by Cross-Appellant Kenny
Woods, and they supplemented their special appearance to address the claims brought
against them by Appellees Alan Meeker and CQuentia Series, LLC (collectively,
Intervenors), who had intervened in Woods’s suit. The trial court granted the special
appearance as to Woods but denied it as to Meeker and CQuentia. On appeal, this
court held that an agreement with a forum selection clause between Cadbury and
CQuentia should be read together with another agreement as a single, unified
instrument and that the forum selection clause applied to all claims against Defendants.
The supreme court reversed this court’s judgment and remanded the case to this court
to address the parties’ issues that we had not previously reached. Id. Those unaddressed
issues are (1) whether Defendants are estopped from challenging enforcement of the
forum selection clause against them by nonsignatories (Woods’s fourth issue), and if
not, (2) whether Defendants’ contacts with Texas give rise to personal jurisdiction
(Woods’s fifth issue and Defendants’ first two issues), (3) whether justice and equity
3
counsel against the exercise of jurisdiction over Defendants (Woods’s sixth issue),
(4) whether Defendants made a general appearance as to all parties and claims (Woods’s
seventh issue), and (5) whether CQuentia’s claim against Cadbury (as brought by
Meeker) should be severed and abated (Defendants’ third issue). Because we hold that
the trial court has personal jurisdiction only over Cadbury for one of the claims against
it—for Meeker’s claim on behalf of CQuentia for a declaratory judgment regarding his
right to terminate the agreement between CQuentia and Cadbury—but does not have
jurisdiction over any of the Defendants for the remaining claims, we reverse in part and
remand the one claim against Cadbury.
II. Factual and Procedural Background
From the parties’ pleadings and jurisdictional evidence, we draw the following
facts. Wisconsin residents Rieder and Rapee formed Care Integrations LLC for the
purpose of providing telemedicine services. After a consultant introduced them to
Woods, they discussed hiring Woods as a consultant as well.
Woods had a business relationship with Meeker, a Texas resident and CEO of
CQuentia, and Woods told Meeker about Rieder and Rapee’s telemedicine business.
After that discussion, Woods went to Rieder and Rapee with the idea that they work
with CQuentia to distribute its genetic-testing services. 1
In the trial court, Meeker and Woods both used as jurisdictional evidence an
1
email from Rieder saying that his and Rapee’s working with CQuentia had been
Meeker’s idea. Meeker’s affidavit, on the other hand, could be read as saying that the
idea had come from Woods; Meeker stated in the affidavit that he and Woods began
4
Rieder, Rapee, and Woods purportedly formed Cadbury as a Nevada limited
liability company by executing the Cadbury Operating Agreement, effective as of
February 1, 2016. Also on February 1, 2016, Cadbury and CQuentia signed the
“Declaration of Series for CQuentia Series, LLC: Cadbury Solutions Series” (the CQ
Agreement), which formed a series limited liability company for the purpose of selling
and distributing DNA-testing services. See Tex. Bus. Orgs. Code Ann. § 101.601.
Woods signed on behalf of Cadbury, and Meeker signed for CQuentia. Under that
agreement, CQuentia would perform laboratory services at its Tennessee lab (or other
locations as determined by CQuentia), and Cadbury would provide marketing and sales
for those services. Meeker and Woods were listed as managers of the entity formed
under the agreement. The agreement contained a forum selection clause:
ANY CLAIMS OR CONTROVERSIES UNDER OR RELATED TO
THIS AGREEMENT SHALL BE EXCLUSIVELY DETERMINED
IN THE STATE AND/OR FEDERAL COURTS LOCATED IN
TARRANT COUNTY, TEXAS, TO WHOSE JURISDICTION EACH
PARTY IRREVOCABLY CONSENTS.
The parties’ new business relationship soon fell apart. In September 2016,
Meeker sent a letter to Woods, Rieder, and Rapee telling them that CQuentia had, in its
sole discretion, terminated the CQ Agreement with Cadbury but that CQuentia would
discussing Woods’s helping Meeker with his DNA-testing business, and after they
“began working together in that effort,” Woods introduced him to Rieder and Rapee.
Whether the idea to work with Rieder and Rapee to sell CQuentia’s services originated
with Meeker or with Woods, there is no dispute that the idea did not come from Rieder
or Rapee.
5
accept proposals from any of the three who wanted to continue working with CQuentia.
In response, Cadbury’s Wisconsin attorney sent a letter maintaining that the CQ
Agreement had not been properly terminated and that none of Cadbury’s members
could submit a proposal to CQuentia without violating their fiduciary duties to Cadbury
and the terms of the Cadbury Operating Agreement. The attorney also sent a letter to
Woods telling him that Cadbury would take legal action against him if he violated his
obligations to Cadbury. Woods took that letter to CQuentia, and CQuentia’s general
counsel responded with a letter to Cadbury’s attorney stating that the CQ Agreement
had been properly terminated and that Woods owed no fiduciary or contractual
obligations to Cadbury.
The next month marked the beginning of a series of lawsuits. First, Woods sued
Defendants in Tarrant County, Texas, for fraud, breach of contract, and tortious
interference, and for declarations that Cadbury was not a valid entity and had never
approved the CQ Agreement. Defendants responded by filing a special appearance
and, alternatively, motion to dismiss for forum non conveniens. In November 2016,
Cadbury sued Woods and Meeker in Wisconsin. Cadbury sued Woods for breach of
the Cadbury Operating Agreement; breach of the covenant of good faith and fair
dealing and his fiduciary duty to Cadbury; and usurpation of Cadbury’s corporate
opportunities, and it sought declarations that Cadbury is a viable entity and that the
Cadbury Operating Agreement is valid. Against Meeker, Cadbury pleaded claims for
tortious interference with the CQ Agreement and Cadbury’s prospective contracts and
6
for injuring Cadbury’s business in violation of a Wisconsin statute. Meeker and
CQuentia then each filed a plea in intervention in the Texas proceeding originally filed
by Woods. Meeker sought two declaratory judgments: (1) that he and any entity he
operates can utilize Woods’s services without violating the Cadbury Operating
Agreement and incurring contractual liability to any of the Defendants and (2) that as
CQuentia’s manager, he could terminate the CQ Agreement. CQuentia sued Rieder
and Rapee 2 for fraud, fraudulent inducement, and negligent misrepresentation.
Shortly after the pleas in intervention were filed, Defendants filed an amended
special appearance; while the filing acknowledged that “CQuentia ha[d] sought to
intervene” to sue Rieder and Rapee and asserted that the intervention did not “invoke[ ]
the forum selection clause” of the CQ Agreement, it did not specifically address
Intervenors’ jurisdictional allegations or explain why those allegations did not support
jurisdiction over Defendants. Defendants later filed a supplemental special appearance
in which they argued that they did not need to file a separate special appearance as to
Intervenors because the amended special appearance’s assertions disputing jurisdiction
applied equally to Intervenors’ alleged bases for jurisdiction, but also in which, out of
an abundance of caution, they supplemented their amended special appearance to
2
Although CQuentia’s petition names all three Defendants as parties to the
underlying suit, it alleges specific wrongdoing only by Rieder and Rapee. See Rieder, 603
S.W.3d at 101 n.69.
7
specifically address why a Texas court lacked jurisdiction to hear Intervenors’ claims
against them.
In the time period between Defendants’ amending their special appearance and
their supplementing it, Meeker attempted to conduct discovery on the merits. In
response, Defendants filed two motions entitled “Subject to Their Special Appearance,
Defendants[’] Motion to Quash” and “Subject to Their Special Appearance,
Defendants[’] Objections to . . . Meeker’s Written Discovery, Motion for Protective
Order, and Motion to Quash.” The motions argued that Meeker’s discovery requests
were “unrelated to the jurisdictional issues” raised in their special appearance and
instead related “to the heart of” Meeker’s claims and that the requested discovery was
therefore not available under Rule 120a. See Tex. R. Civ. P. 120a. After a hearing, the
trial court granted the motions and limited discovery to matters related to jurisdiction.
Relying in part on emails produced in that discovery, Woods and Intervenors filed
responses to Defendants’ special appearance.
At the hearing on the special appearance, the trial court found that it had no
personal jurisdiction over Defendants for Woods’s claims but that it did have
jurisdiction over them for Intervenors’ claims based on “specific jurisdictional
facts . . . of allegations against [Rieder and Rapee for] making representations directed
toward Texas [via telephone calls] that are alleged to be fraudulent.” The trial court
subsequently signed an order denying the special appearance and forum non conveniens
8
motion as to Intervenors’ claims but granting it as to Woods’s claims and dismissing his
claims with prejudice.3
Woods and Defendants appealed. Defendants raised three issues, while Woods
asserted eight. In our previous opinion, based on our conclusion that the Cadbury
Operating Agreement and the CQ Agreement should be read together, we held that the
CQ Agreement’s forum selection clause was enforceable by and against the
nonsignatory parties under the “closely related” and “transaction-participant” doctrines
and that the claims asserted by Woods and Intervenors fell within the clause’s scope.
Rieder, 587 S.W.3d at 46, 48, 50, 52, 54–56. Disagreeing with our conclusions, the Texas
Supreme Court reversed and remanded the case for this court to address the parties’
3
In our previous opinion, we overruled Defendants’ alternative forum non
conveniens arguments and sustained Woods’s eighth issue addressing the forum non
conveniens grounds. We did so, however, based on the applicability of the forum
selection clause to those claims. Rieder v. Meeker, 587 S.W.3d 32, 43–44 (Tex. App.––
Fort Worth Oct. 18, 2018) (mem. op.), rev’d sub nom., Rieder, 603 S.W.3d at 102. We
now hold that the forum selection clause applies only to Meeker’s second declaratory
judgment claim, and, accordingly, our previous determination of the forum non
conveniens arguments no longer applies to the rest of the claims against Defendants.
Nevertheless, on remand of the appeal we do not reach Woods’s eighth issue or
Defendants’ forum non conveniens arguments as to those claims. Because we sustain
the trial court’s dismissal of Woods’s claims on other grounds, we overrule Woods’s
eighth issue as moot. Likewise, in light of our disposition of the other issues on appeal,
Defendants’ forum non conveniens arguments are moot, and we deny their request for
mandamus relief. See In re ENSCO Offshore Int’l Co., 311 S.W.3d 921, 923 (Tex. 2010)
(orig. proceeding) (holding mandamus relief may be granted for denial of motion to
dismiss on forum non conveniens); Martinez v. Bell Helicopter Textron, Inc., 49 S.W.3d 890,
891 (Tex. App.—Fort Worth 2001, pet. denied) (per curiam) (holding interlocutory
appeal unavailable for denial of motion to dismiss on forum non conveniens).
9
issues that we had not previously addressed and which we itemized in this opinion’s
introduction. Rieder, 603 S.W.3d at 102.
III. Waiver and Estoppel
In addition to Woods’s traditional personal jurisdiction argument, he raises
preliminary issues––waiver and direct-benefits estoppel—that, if sustained, would moot
the traditional personal jurisdiction issue. Intervenors make essentially the same waiver
arguments that Woods makes, and Meeker adopts Woods’s estoppel arguments. We
begin our analysis with these waiver and estoppel arguments.4
A. Defendants did not waive their special appearance or make a general
appearance.
Woods addresses waiver in his seventh issue, in which he uses a two-step
argument to assert that Defendants made a general appearance as to his claims and thus
waived any objection to an exercise of jurisdiction over them by a Texas court. First,
he argues that Defendants violated the due-order-of-pleading requirement and thereby
made a general appearance as to Intervenors’ claims because they moved to quash
Meeker’s discovery requests before they supplemented their amended special
appearance to specifically address Intervenors’ claims. Second, he argues that his claims
4
Defendants address Woods’s arguments in their appellees’ brief, and, in their
appellants’ brief, they address the trial court’s jurisdiction over them for Intervenors’
claims. Specifically, their first issue addresses the trial court’s jurisdiction over them for
CQuentia’s claims, and their second issue addresses Meeker’s claims. Thus, while
addressing these preliminary issues, we also dispose of the parts of Defendants’ issues
related to these arguments.
10
are not severable from Intervenors’ claims and therefore that the general appearance as
to Intervenors’ claims also constituted a general appearance as to his.5 Woods also
contends that the rule on which Defendants relied in the trial court—that a party does
not waive a special appearance by seeking a ruling on a discovery dispute before the
special appearance is heard—does not apply here because that rule applies only when a
special appearance has already been filed against the party seeking discovery.6 We
disagree with the first premise of Woods’s argument that the motions to quash
constituted a general appearance and do not reach the second.
Civil Procedure Rule 120a provides a “special appearance” procedure by which
a party may make a limited appearance in a case for the purpose of challenging personal
jurisdiction. Tex. R. Civ. P. 120a. Under this rule, discovery does not constitute a
general appearance or a waiver of a special appearance, and other pleadings and motions
may be filed without entering a general appearance so long as they are made subject to
the special appearance. See id.; Int’l Turbine Serv., Inc. v. Lovitt, 881 S.W.2d 805, 808–09
(Tex. App.—Fort Worth 1994, writ denied). But a party who enters an appearance not
in compliance with Rule 120a waives that party’s special appearance. McCoy v. Platinum
5
Woods and Intervenors argue––perhaps irreconcilably—that Defendants’
amended special appearance did not apply to Intervenors’ claims because Intervenors’
claims and Woods’s claims arise from different jurisdictional facts but also argue that
their claims are not severable for due-order-of-pleading purposes because they arise
from the same facts and issues.
Intervenors make these same arguments in their appellees’ brief.
6
11
Power Moves, Inc., No. 01-17-00653-CV, 2018 WL 3581021, at *3 (Tex. App.—Houston
[1st Dist.] July 26, 2018, no pet.) (mem. op.). The test for whether a party has made a
general appearance by filing a motion or participating in a hearing on the motion is
simply this: after filing a special appearance, did the party request affirmative relief from
the trial court that is inconsistent with the party’s assertion that the court lacks
jurisdiction? See Dawson-Austin v. Austin, 968 S.W.2d 319, 323 (Tex. 1998); Abshire v.
Pannell, No. 01-19-00710-CV, 2020 WL 3820912, at *4 (Tex. App.—Houston [1st Dist.]
July 7, 2020, pet. filed) (mem. op.).
Before Meeker and CQuentia intervened, Defendants had filed their special
appearance and nothing else. After the pleas in intervention were filed and before
Defendants filed their supplemental special appearance, Defendants filed their
amended special appearance and their motions seeking to quash Meeker’s discovery.
The motions argued that Meeker’s discovery requests should be quashed because
Defendants had objected to the trial court’s exercise of jurisdiction over them and that
Meeker could therefore obtain discovery only as to the jurisdictional issues raised in
their special appearance.7 Defendants’ motions to quash contested jurisdiction, were
7
Defendants also filed a motion to sever CQuentia’s misrepresentation claims, if
any, against Cadbury, which they filed subject to their special appearance and in which
they argued that the trial court should dismiss Defendants for want of personal
jurisdiction but that if CQuentia had asserted a claim against Cadbury that would be
governed by the forum selection clause, the court should sever that claim and abate it
until resolution of Cadbury’s Wisconsin suit. Woods and Intervenors do not argue that
this motion constituted a general appearance. See, e.g., HMS Aviation v. Layale Enters.,
S.A., 149 S.W.3d 182, 189 (Tex. App.—Fort Worth 2004, no pet.) (holding motion to
12
filed “subject to” their special appearance, and were entirely consistent with the special
appearance. The motions did not acknowledge or concede the court’s jurisdiction over
them and did not seek affirmative relief unrelated to their special appearance or
inconsistent with their position that the trial court did not have jurisdiction over them.
The only relief that they requested—that discovery unrelated to the jurisdictional issues
not be compelled before the trial court’s ruling on the special appearance—was
consistent with that position. See Dawson-Austin, 968 S.W.2d at 322; see also Exito Elecs.
Co., Ltd. v. Trejo, 142 S.W.3d 302, 304 (Tex. 2004) (describing Dawson-Austin’s test for a
general appearance as whether a party “(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”).
Because Defendants’ motions to quash did not seek from the trial court
affirmative relief unrelated to their special appearance and did not recognize that any
claims against them were properly pending, the motions did not constitute a general
appearance as to Intervenors’ claims. And because they did not make a general
appearance as to Intervenors before filing their supplemental special appearance
specifically addressing Intervenors’ claims, 8 they did not make a general appearance as
increase sequestration bond did not waive a special appearance because it was filed
“subject to” the pending special appearance and the trial court ruled on the special
appearance before hearing or ruling on the sequestration bond motion).
Woods relies on correspondence between Intervenors’ attorney and
8
Defendants’ Texas attorney to support his general appearance argument. Intervenors’
13
to Woods, regardless of whether his claims and Intervenors’ are severable. See Tex. R.
Civ. P. 120a (providing that special appearance motion may be amended). We overrule
Woods’s seventh issue, and we sustain Defendants’ first two issues on this point.9
attorney wrote to Defendants’ to confirm that for the hearing on Defendants’ motion
for protective order and motion to strike, his understanding was that they would submit
briefs three days ahead of the hearing and that “the briefs [were] to concern whether
Defendants’ Special Appearance as to Plaintiff Woods’s claims limit[ed] the discovery
available to Intervenors, against whom Defendants have not specially appeared.”
Defendants’ attorney’s email response said, “Thanks, Bill. Good to meet you too. Your
letter fairly and accurately reflects what I recall as well.” But this letter does not
constitute a judicial admission, see Horizon/CMS Healthcare v. Auld, 34 S.W.3d 887, 905
(Tex. 2000) (defining judicial admission), and in the context of Defendants’ attorney’s
briefs and arguments at the hearing on the motion for protective order and motion to
quash, Defendants’ position appeared to be not that Defendants were not specially
appearing as to Intervenors but that they did not need to file a separate special
appearance because the interventions did not change the fact that the trial court did not
have personal jurisdiction over Defendants and that the amended special appearance
applied equally to Intervenors’ claims.
9
Intervenors argued in their appellees’ brief that we must affirm the trial court’s
order denying the special appearance as to their claims because Defendants’ appellants’
brief does not challenge the general appearance argument as to Intervenors. Broadly
and liberally construing Defendants’ issues and arguments on appeal—including their
position that the trial court had no jurisdiction over them and that they filed a special
appearance as to the entire lawsuit; that their motion for protective order was filed
subject to their special appearance; that the trial court erred by denying that special
appearance as to Intervenors; and that Meeker’s representative claim on behalf of
CQuentia against Cadbury should be severed from the remaining claims of Meeker and
CQuentia against Rieder and Rapee; as well as their pointing out that the trial court
granted in part their motion for protective order based on their argument that they
could not be forced to conduct merits-based discovery before a ruling on their special
appearance—we conclude that their first two issues fairly included an argument that
they did not make a general appearance, and we sustain that part of those issues. See
Tex. R. App. P. 38.1(f) (requiring appellate courts to treat an issue as covering every
subsidiary question that is fairly included); Traweek v. Long, No. 02-20-00311-CV, 2021
WL 733085, at *3–4 & n.1 (Tex. App.—Fort Worth Feb. 25, 2021, no pet. h.) (mem.
op.) (noting that we must liberally and reasonably construe briefs, considering the
14
B. Estoppel does not bar Defendants from challenging jurisdiction.
Woods’s fourth issue challenges the trial court’s failure to apply direct-benefits
estoppel to enforce the forum selection clause in the CQ Agreement between Cadbury
and CQuentia against Defendants for his claims; in other words, Woods asserts that the
trial court erred in sustaining Defendants’ jurisdictional objections directed at Woods’s
claims because they were estopped to deny the power of the forum selection clause to
force them to litigate in Tarrant County. Intervenors adopt Woods’s estoppel
arguments as to Meeker’s plea in intervention; therefore, we also address estoppel as to
those claims. As we noted in our prior opinion, we review a trial court’s decision on
whether to enforce a forum selection clause for an abuse of discretion, but we review
the trial court’s legal determinations de novo. Rieder, 587 S.W.3d at 39–40.
1. Meeker’s Claims
Before reviewing Woods’s arguments, we first address estoppel as to Meeker
because our resolution of his claims does not rely on the merits of Woods’s estoppel
argument. On appeal, Intervenors do not include an estoppel section in their brief, but
they incorporate Woods’s brief’s arguments about the applicability of the forum
selection clause. And in his brief, Woods argues that estoppel makes the forum
parties’ arguments, evidence, and citations, in order to resolve appeals on the merits
and not on procedural defects and citing Lion Copolymer Holdings, LLC v. Lion Polymers,
LLC, 614 S.W.3d 729, 732–33 (Tex. 2020); St. John Missionary Baptist Church v. Flakes,
595 S.W.3d 211, 214 (Tex. 2020); and Horton v. Stovall, 591 S.W.3d 567, 569 (Tex. 2019)).
15
selection clause applicable both to his and to Meeker’s claims (but not CQuentia’s). We
therefore read Intervenors’ appellees’ brief to argue estoppel as an alternative basis for
affirming the trial court’s order that overruled Defendants’ jurisdictional arguments as
to Meeker.10
Before applying a contract’s forum selection clause, we must first determine that
the clause is enforceable and that it encompasses the claims at issue. Carlile Bancshares,
Inc. v. Armstrong, Nos. 02-14-00014-CV, 02-14-00018-CV, 2014 WL 3891658, at *6 (Tex.
App.—Fort Worth Aug. 7, 2014, no pet.) (mem. op.). As a general rule, a contract’s
terms may be enforced only by and against its parties. See First Bank v. Brumitt, 519
S.W.3d 95, 102 (Tex. 2017); El Paso Cmty. Partners v. B & G/Sunrise Joint Venture, 24
S.W.3d 620, 626 (Tex. App.—Austin 2000, no pet.) (“[G]enerally someone who is not
a party to an agreement has no interest in the terms of that contract.”).
10
Similarly to their approach on appeal, in the trial court, Intervenors did not
explicitly argue in their special appearance response that estoppel made the forum
selection clause enforceable for their claims, but they incorporated Woods’s special
appearance response, which argued that estoppel applied to both his and Meeker’s
claims. The trial court appeared to reject Woods’s estoppel theory at the hearing, and
it then implicitly overruled the estoppel argument in its order when it granted the special
appearance as to Woods. Because on appeal Meeker does not seek more favorable
relief than he received in the trial court, he was not required to file a notice of appeal in
order to ask this court to overrule the trial court’s estoppel determination. See Tex. R.
App. 25.1(c). In their brief, Intervenors appear to adopt Woods’s estoppel argument
for CQuentia’s claims against Rieder and Rapee, but neither they nor Woods argued in
the trial court that it applied to those claims. Additionally, the estoppel argument is
based in part on the suit in Wisconsin and related demand; CQuentia is not a party to
that suit.
16
Estoppel has no relevance to Meeker’s first claim seeking a declaration related to
the validity of the Cadbury Operating Agreement. Under the CQ Agreement’s
respective forum selection clauses, the parties consented to jurisdiction in Texas for
claims “under or related to” that agreement. But Meeker’s first declaratory judgment
claim relates only to the Cadbury Operating Agreement, not to the CQ Agreement. His
plea in intervention asserted that
Meeker . . . learned that Cadbury itself had never begun operations; despite
being allegedly formed in [or] on February 1, 2016, by September 2016 it
had never had a board meeting, created a budget, or maintained corporate
books and records. In fact, it appears that Cadbury purported to enter the
Cadbury Series Agreement with CQuentia before Cadbury’s operating
agreement was even executed.
....
. . . After CQuentia terminated the Cadbury Series, Woods received
a letter from Cadbury’s counsel threatening him with various infractions
if he continued any relationship with CQuentia arising from a restrictive
covenant contained in Paragraph 12 of Cadbury’s operating agreement.
Woods shared the letter with CQuentia, whose general counsel requested
certain documents from Cadbury’s lawyer directed at determining whether
that agreement was enforceable, such as: documents reflecting board
member elections, board authorizations for entering the [CQ Agreement],
and corporate records establishing initial capital contributions. Rapee and
Rieder never provided the documents.
Based on these allegations, Meeker sought a declaration that “he and any entity he
operates ha[ve] the right to utilize Woods’[s] services without incurring liability under
Paragraph 12 of the Cadbury [O]perating [A]greement.”11
11
In the plea’s prayer, Meeker asked for a declaration that he is not violating any
contractual obligations to Rieder, Rapee, or Cadbury, but it is not clear from his
17
Even if we were to hold that Meeker, a nonsignatory to the CQ Agreement, could
rely on direct-benefits estoppel to force Defendants to defend in Texas any claim he
brings relating to that agreement, such a holding would not require litigating this claim
in Texas because the Cadbury Operating Agreement is separate from and independent
of the CQ Agreement.12 See Rieder, 603 S.W.3d at 102; see also G.T. Leach Builders, LLC
v. Sapphire V.P., LP, 458 S.W.3d 502, 529 (Tex. 2015); Kirby Highland Lakes Surgery Ctr.,
L.L.P. v. Kirby, 183 S.W.3d 891, 898 (Tex. App.—Austin 2006, orig. proceeding) (citing
Pennzoil Expl. & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1067–68 (5th Cir. 1998)
for the proposition that “related to” contract language extends to disputes having a
significant relationship to the contract or that “‘touch’ matters covered by” the
contract). Because Meeker’s claim relates only to the Cadbury Operating Agreement
and does not arise under or relate to the CQ Agreement, 13 the CQ Agreement forum
pleading that there is any dispute about whether he in his individual capacity has any
contractual obligations to Rieder and Rapee in their individual capacities. He does not
argue that he is a party to the Cadbury Operating Agreement or any other contract with
Rieder and Rapee and does not allege that Rieder and Rapee have claimed otherwise.
The only contract to which Rieder and Rapee were parties is the Cadbury Operating
Agreement.
12
We do not read Meeker’s plea as asserting this claim on behalf of CQuentia,
unlike his other declaratory judgment claim. For our purposes, however, it does not
matter in what capacity Meeker asserted this claim because even if it had been asserted
on behalf of CQuentia, the claim is not a claim “under or related to” the CQ Agreement.
Woods and Meeker argue that this first declaratory judgment claim relates to
13
the CQ Agreement because Meeker could terminate the CQ Agreement if Cadbury was
a nonentity, and, thus, proving Cadbury’s nonexistence is a prerequisite to proving
Meeker’s second declaratory judgment claim expressly based on the CQ Agreement.
18
selection clause does not require that claim to be litigated in Texas. Accordingly,
estoppel could not require this claim to be litigated here.
Estoppel is also inapplicable to Meeker’s second declaratory judgment claim
against Cadbury. We read the plea in intervention as asserting this claim in Meeker’s
capacity as CQuentia’s manager rather than in his individual capacity. We recognize
that in Meeker’s response to Defendants’ amended special appearance, he stated that
he had “intervened in his own right” after Defendants had “threatened him with
individual liability.” But for this particular claim, he sought a declaration asking about
his right “as Manager of CQuentia” to act under the CQ Agreement, not his right as an
individual. He thus at least attempted to plead a claim on behalf of CQuentia. See
Horizon/CMS Healthcare Corp., 34 S.W.3d at 896–97 (noting that “[a] petition is sufficient
if it gives fair and adequate notice of the facts upon which the pleader bases his claim”
and that “[t]he purpose of this rule is to give the opposing party information sufficient
to enable him to prepare a defense”). Such a representative claim would therefore be
by and against signatories to the CQ Agreement––Cadbury and CQuentia.14 Further,
But we must abide by the Texas Supreme Court’s conclusion that the Cadbury
Operating Agreement is “separate from” and “beyond the reach” of the CQ
Agreement. Rieder, 603 S.W.3d at 98.
14
Rieder and Rapee did not sign and are not parties to the CQ Agreement. But
to the extent that Meeker asserted this claim not just against Cadbury but also against
Rieder and Rapee, estoppel does not apply because, as we explain below, we reject
Woods’s estoppel arguments, which Meeker adopted.
19
because Meeker requested a declaration about his right to terminate the CQ Agreement,
the determination of the claim will require the trial court to consider the terms of that
agreement. Thus, the claim “touches” matters covered by the CQ Agreement and
therefore “relates to” that agreement. See Kirby, 183 S.W.3d 898 (noting “related to”
forum-selection-clause language includes claims that “touch” the contract).
Although Defendants dispute that CQuentia made a claim against Cadbury, they
acknowledge that any claim by CQuentia against Cadbury relating to the CQ Agreement
falls within the scope of the forum selection clause.15 Accordingly, under the forum
selection clause’s plain language, Cadbury has agreed that Texas courts have jurisdiction
over it for that claim. Whether the claim was properly asserted by a party with the
capacity to do so (Defendants argue that it was not) is not an issue in this appeal. See
6200 GP, LLC v. Multi Serv. Corp., No. 05-16-01491-CV, 2018 WL 3154594, at *3 (Tex.
App.—Dallas June 28, 2018, no pet.) (mem. op.) (noting that capacity is an affirmative
15
Several months after signing the CQ Agreement, Cadbury, CQuentia, and
Wisconsin business M3 Insurance Solutions, Inc. executed the “Declaration of Series
for CQuentia Series, LLC: M3 Cadbury Series” (M3 Agreement). The M3 Agreement
included a forum selection clause identical to the one in the CQ Agreement. Thus, had
CQuentia asserted a claim against Cadbury that was related to the M3 Agreement, that
claim would have to have been litigated in Tarrant County. But CQuentia made no
claim against Cadbury other than the one asserted through Meeker. Rieder, 603 S.W.3d
at 101 n.69. And while CQuentia’s plea in intervention alleged that Rieder’s and Rapee’s
representations induced it to sign both the CQ Agreement and the M3 Agreement, it
did not argue in the trial court that estoppel applied to make the M3 Agreement’s forum
selection clause enforceable against Rieder and Rapee for its claims, nor were Woods’s
direct-benefits estoppel arguments related to the CQ Agreement applicable to Rieder
and Rapee because they did not sue him or Meeker in Wisconsin.
20
defense); cf. Pike v. Tex. EMC Mgmt., LLC, 610 S.W.3d 763, 779–81 (Tex. 2020) (stating
that whether a claim brought by a partner actually belongs to the partnership is a matter
of capacity that does not affect the trial court’s subject matter jurisdiction and thus
should be decided on the merits). Estoppel is therefore irrelevant to this claim.
2. Woods’s Claims
We now turn to Woods’s argument that Defendants are estopped to deny the
effect of the forum selection clause in the CQ Agreement as to his claims against them.16
Woods is not a signatory to the CQ Agreement, and neither are Rieder and Rapee, but
Woods made several arguments for why he should nevertheless be permitted to enforce
its forum selection clause against Cadbury and nonparties Rieder and Rapee. Several
of those arguments were rejected by the Texas Supreme Court. Rieder, 603 S.W.3d at
101 (rejecting Woods’s transaction-participant and “closely related” enforcement
16
With respect to whether a forum selection clause encompasses Woods’s claims,
for purposes of our analysis, we assume that at least some of Woods’s claims relate to
the CQ Agreement. But at a minimum, two of his claims do not. His claim for a
declaratory judgment about the validity of the Cadbury Operating Agreement does not.
Like Meeker’s similar declaratory judgment claim, Woods’s claim was for a declaration
that Cadbury never legally came into being and therefore he owed no obligations to
Defendants under that agreement. This claim has no connection to the CQ Agreement.
Likewise, his claim for breach of the Cadbury Operating Agreement relates only to the
Cadbury Operating Agreement. As for Woods’s other claims, whether they “relate to”
the CQ Agreement (and therefore are encompassed by the forum selection clause) is a
question we must resolve only if the forum selection clause may be enforced against
Defendants via direct-benefits estoppel. Accordingly, because we find Woods’s
estoppel arguments unavailing, we need not analyze whether his other claims relate to
the CQ Agreement.
21
arguments). On remand, we consider his only remaining unaddressed enforceability
argument: direct-benefits estoppel.
Direct-benefits estoppel is an equitable doctrine under which an agreement’s
arbitration or forum selection clause becomes enforceable against a nonsignatory of the
agreement because of the nonsignatory’s knowing exploitation of the agreement.
Carlile, 2014 WL 3891658, at *7–8. Typically, courts apply this doctrine to “non-
signatories who, during the life of the contract, have embraced the contract despite their
non-signatory status but then, during litigation, attempt to repudiate the arbitration [or
forum selection] clause in the contract.” Id. at *7 (quoting Hellenic Inv. Fund, Inc. v. Det
Norske Veritas, 464 F.3d 514, 517–18 (5th Cir. 2006)).
In general, courts seriously consider applying this doctrine to enforce a forum
selection clause against a nonsignatory “only when ‘the nonsignatory ha[s] brought suit
against a signatory premised in part upon the agreement.’” Id. at *8 (quoting Bridas
S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347, 362 (5th Cir. 2003)); cf. G.T. Leach Builders,
458 S.W.3d at 529 (stating that arbitration clause in developer’s contract with general
contractor could not be enforced by nonsignatory insurance brokers, subcontractors,
and engineers in developer’s suit against them because, even if the developer’s claims
“related to” its contract with the general contractor, his suit did not seek a direct benefit
from that contract and instead sought benefits from his separate contracts with the
defendants). But suing to enforce the contract is not the only way that a nonsignatory
can “embrace” the contract and consequently be estopped from repudiating the
22
contract’s forum selection clause; a nonsignatory also “embraces” the contract by
otherwise knowingly seeking and obtaining direct benefits from the contract. Carlile,
2014 WL 3891658, at *7–8.
In his appellant’s brief, Woods appears to argue that Defendants sought to
benefit from the CQ Agreement by both methods. First, Woods quotes cases for the
proposition that direct-benefits estoppel applies when a nonsignatory such as Rieder or
Rapee embraces a contract during the life of the contract. While we construe his
citations to these cases to argue that nonsignatories Rieder and Rapee benefited from
the CQ Agreement outside of litigation, Woods does not detail in this section of the
brief what direct benefit they knowingly sought and obtained from the contract. But
elsewhere in his brief, Woods argues that they anticipated benefitting financially from
the CQ Agreement. Further, the record contains copies of checks that CQuentia gave
Cadbury for payments due under the CQ Agreement and an assertion in Woods’s
affidavit that Rieder withdrew “several thousand dollars” (presumably from Cadbury)
to use in a separate business.
These alleged benefits do not support Woods’s estoppel arguments, however,
because they are not direct and substantial benefits of the CQ Agreement. See In re
Weekley Homes, L.P., 180 S.W.3d 127, 134 (Tex. 2005) (orig. proceeding) (stating that
the doctrine does not apply when the alleged benefits are insubstantial or indirect); cf.
Carlile, 2014 WL 3891658, at *8–9 (holding that defendants, who were shareholders and
members of the board of directors of a bank and its holding company that merged with
23
another entity, were not bound under direct-benefits estoppel to a forum selection
clause in the merger agreement because the proceeds they received in the merger were
not a sufficient substantial benefit for estoppel purposes); St. Clair v. Brooke Franchise
Corp., No. 2-06-216-CV, 2007 WL 1095554, at *7 (Tex. App.—Fort Worth Apr. 12,
2007, no pet.) (mem. op.) (holding that in St. Clair’s suit for a declaration that she was
not bound by a noncompete signed by her husband when he sold his insurance
business, direct-benefits estoppel did not bind her to the arbitration clause in the sales
agreement because although proceeds from her husband’s sale of his business benefited
her through an increase in the couple’s community estate, this benefit was not direct
and substantial enough to bind her to the arbitration clause). If these benefits to Rieder
and Rapee related directly to any agreement, it would be the Cadbury Operating
Agreement; Rieder and Rapee have received or anticipated benefits from the CQ
Agreement only indirectly through their status as members of Cadbury. They have no
direct claim for benefits under the CQ Agreement, and there is no allegation or evidence
that they have insisted that others treat them as parties to that agreement. See Weekley
Homes, 180 S.W.3d at 134–35 (stating that direct-benefits estoppel “requires a colorable
claim to the [contract’s] benefits” and that a nonparty cannot “consistently and
knowingly insist[ ] that others treat it as a party” to a contract and then later “turn[ ] its
back on the portions of the contract . . . it finds distasteful” (footnotes omitted)).
Turning to the second method of invoking direct-benefits estoppel, citing In re
Lisa Laser United States, Inc., 310 S.W.3d 880, 886 (Tex. 2010) (orig. proceeding), and
24
Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 307 (Tex. 2006), Woods asserts that because
Cadbury is relying the CQ Agreement’s terms to assert claims against Woods and
Meeker in Wisconsin, Cadbury must abide by the agreement’s forum selection clause
not only in its Wisconsin suit, but also in Woods’s suit here in Texas. And, he argues,
because nonsignatories Rieder and Rapee authorized the Wisconsin suit, they also must
comply with the forum selection clause for his claims here in Texas.
We decline to hold that Woods, as a nonsignatory and plaintiff in this action,
may enforce the forum selection clause against Defendants.17 Whether a Wisconsin
court will agree with Woods that the forum selection clause applies to the claims
brought by Cadbury in that state is a matter for Wisconsin. 18 For this court, the question
is whether direct-benefits estoppel may be used by nonsignatory Woods as an offensive
tool to force nonsignatories Rieder and Rapee (and signatory Cadbury) to defend
17
As we note, the doctrine generally applies when a signatory defendant moves
to enforce an arbitration or forum selection clause against a nonsignatory plaintiff
because the plaintiff has directly benefited from the agreement containing the clause.
Courts have also sometimes applied the doctrine when the defendant is the
nonsignatory and is seeking to force the signatory plaintiff to arbitrate the plaintiff’s
claims, and the signatory plaintiff was the party who embraced the contract during its
life but repudiated its arbitration clause in litigation. See, e.g., Barantas Inc. v. Enter. Fin.
Group Inc., No. 05-17-00896-CV, 2018 WL 3738089, at *8 (Tex. App.—Dallas Aug. 7,
2018, no pet.) (mem. op.). But Woods has cited us to no Texas case in which a court
allowed a plaintiff to sue a defendant and then force the defendant to abide by a forum
selection clause in an agreement that the plaintiff did not sign.
Cadbury’s Wisconsin suit against Woods and Meeker has been stayed while this
18
appeal is pending. Cadbury did not name CQuentia, the other signatory to the CQ
Agreement, as a defendant in that suit.
25
against claims here. The answer is no. “[T]he party position of the nonsignatory in the
lawsuit—plaintiff or defendant—is an important distinction in deciding whether
estoppel can bind a nonsignatory to a contract’s terms.” Carlile, 2014 WL 3891658, at
*8. In other words, as this court has held, this form of estoppel applies when raised as
a defense. See id. (stating that direct-benefits estoppel is “not a theory by which a
signatory plaintiff may hold a nonsignatory defendant to the terms of a contract [that]
the nonsignatory defendant is not seeking to enforce”); cf. Kelly v. Rio Grande
Computerland Grp., 128 S.W.3d 759, 769 (Tex. App.—El Paso 2004, no pet.)
(“[E]quitable estoppel does not lend itself to an offensive posture.”).19 Woods has
provided no argument for why we should allow an offensive use of the doctrine by him
as a nonsignatory plaintiff. Even though Rieder and Rapee are interested parties in the
Wisconsin suit and we assume for our purposes that they both authorized Cadbury to
bring that suit, they themselves have asserted no claims to enforce the CQ Agreement
individually here or in Wisconsin, and they are not signatories of the agreement. And
while Woods’s claims against Cadbury are claims against a signatory to the CQ
Agreement and Cadbury has sued Woods and Meeker in Wisconsin, Cadbury has not
19
In one case cited by Woods, All Energy Corp. v. Energetix, LLC, 985 F. Supp. 2d
974, 988, 990 (S.D. Iowa 2012), a federal district court allowed a signatory plaintiff to
enforce an agreement’s forum selection clause against a nonsignatory defendant who
had benefited from the agreement, but the court did so applying Delaware law on
closely related parties. As noted, Woods has cited no Texas case in which a court upheld
the offensive use of the doctrine by a nonsignatory plaintiff to enforce a forum selection
clause.
26
sued Woods or Meeker in this suit, and it asserts no claim in this forum that seeks to
enforce the CQ Agreement or depends on that agreement’s existence. 20 Cf. G.T. Leach
Builders, 458 S.W.3d at 527.
Woods has not persuaded us that the trial court abused its discretion in
overruling his estoppel arguments, see Carlile, 2014 WL 3891658, at *9 (noting that
“estoppel is an equitable theory that may or may not be applied at the trial court’s
discretion”), and we therefore overrule his fourth issue. We sustain the part of
Defendants’ first and second issues arguing that the forum selection clause applies only
to claims asserted against Cadbury by CQuentia arising from the CQ Agreement, but
we overrule their argument that no such claim has been made and hold that Meeker’s
second declaratory judgment claim was brought against Cadbury on behalf of CQuentia
and therefore falls within the scope of the forum selection clause.
IV. Minimum Contacts and Traditional Personal Jurisdiction Issues
We now turn to the parties’ traditional personal jurisdiction arguments. In
Woods’s fifth issue, he argues that the trial court has personal jurisdiction over
Defendants and the trial court erred in granting their special appearance as to his claims
because, through the CQ Agreement, they sought profits from a Texas entity that was
to perform services in Texas. With this issue, we also address the remainder of
20
Our analysis does not turn on the timing of Woods’s lawsuit, but we point out
that Woods sued Defendants here before Cadbury sued him in Wisconsin, and he
therefore cannot argue that he filed suit here only in response to the Wisconsin suit.
27
Defendants’ first and second issues challenging the trial court’s ruling that it had
personal jurisdiction over them for Intervenors’ claims. “Whether a court has personal
jurisdiction over a defendant is determined as a matter of law, which appellate courts
review de novo.” Spir Star AG v. Kimich, 310 S.W.3d 868, 871 (Tex. 2010). We conclude
that the trial court does not have personal jurisdiction over Defendants for either
Woods’s claims or Intervenors’ claims21
A. Jurisdictional Requirements and Minimum Contacts
A Texas court may exercise personal jurisdiction over a nonresident defendant
when doing so is permitted by the Texas long-arm statute and is consistent with federal
and state due-process guarantees. TV Azteca v. Ruiz, 490 S.W.3d 29, 36 (Tex. 2016).
Under the long-arm statute, a nonresident is present in Texas for purposes of personal
jurisdiction when the nonresident “does business in this state.” Tex. Civ. Prac. & Rem.
Code Ann. § 17.042; Kerlin v. Sauceda, 263 S.W.3d 920, 927 (Tex. 2008). The long-arm
statute lists certain acts that constitute “doing business,” including “(1) contract[ing] by
mail or otherwise with a Texas resident” when “either party is to perform the contract
in whole or in part in this state” and “(2) commit[ting] a tort in whole or in part in this
state.” Tex. Civ. Prac. & Rem. Code Ann. § 17.042(1), (2).
Having already held that the forum selection clause applies to Meeker’s second
21
declaratory judgment claim against Cadbury, our traditional minimum contacts analysis
does not include that claim.
28
But “[c]onsistent with federal due process protections,” even if the long-arm
statute permits exercising jurisdiction over a nonresident defendant, a state court may
not exercise that jurisdiction unless “(1) the defendant has established ‘minimum
contacts’ with the state and (2) the exercise of jurisdiction comports with ‘traditional
notions of fair play and substantial justice.’” TV Azteca, 490 S.W.3d at 36 (quoting Int’l
Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)). “The minimum-
contacts requirement protects due-process rights by permitting a state to exercise
jurisdiction over a nonresident defendant only when the defendant ‘could reasonably
anticipate being haled into court there.’” Id. at 37 (quoting Moncrief Oil Int’l Inc. v. OAO
Gazprom, 414 S.W.3d 142, 152 (Tex. 2013)). Minimum contacts may give rise to either
general or specific personal jurisdiction. Id. at 36. Because Woods and Intervenors
alleged and argued only specific jurisdiction, we consider only specific jurisdiction in
our analysis. A nonresident defendant’s contacts with the forum state support specific
jurisdiction when the contacts are purposeful and the plaintiff’s cause of action arises
from or relates to those contacts. Id.; see also Moncrief Oil, 414 S.W.3d at 150 (stating that
for a nonresident’s contacts to support specific jurisdiction, the contacts must have a
substantial connection to the litigation’s operative facts).
B. Purposeful Availment
“A defendant establishes minimum contacts with a state when it purposefully
avails itself of the privilege of conducting activities within the forum state, thus invoking
the benefits and protections of its laws.” Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d
29653, 657–58 (Tex. 2010) (quoting Retamco Operating, Inc. v. Republic Drilling Co., 278
S.W.3d 333, 338 (Tex. 2009)). In considering purposeful availment, we apply three
principles:
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. Thus, “[s]ellers who ‘reach out beyond one state and create
continuing relationships and obligations with citizens of another state’ are
subject to the jurisdiction of the latter in suits based on their activities.”
Finally, the “defendant must seek some benefit, advantage or profit by
‘availing’ itself of the jurisdiction.” In contrast, a defendant may
purposefully avoid a particular forum by structuring its transactions in
such a way as to neither profit from the forum’s laws nor subject itself to
jurisdiction there.
Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex. 2007) (citations omitted)
(quoting Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex. 2005)); see
also TV Azteca, 490 S.W.3d at 38 (stating that the defendant’s contacts must result from
the defendant’s own efforts to avail itself of the forum). “In conducting this analysis,
we assess ‘the quality and nature of the contacts, not the quantity.’” TV Azteca, 490
S.W.3d at 38 (quoting Moncrief Oil, 414 S.W.3d at 151).
C. Shifting Burdens
The plaintiff has the initial burden to plead sufficient allegations to bring the
nonresident defendant within the reach of the long-arm statute, and the nonresident
defendant then has the burden of negating those alleged bases of jurisdiction. Moncrief
Oil, 414 S.W.3d at 150; see also Am. Finasco, Inc. v. Thrash, No. 09-15-00195-CV, 2017
WL 391377, at *3 (Tex. App.—Beaumont Jan. 26, 2017, no pet.) (mem. op.) (stating
30
that once the plaintiff alleges facts sufficient to meet its burden to show the defendant
is subject to the long-arm statute, the defendant must file verified pleadings negating
the plaintiff’s factual allegations that would otherwise show jurisdiction).
The nonresident defendant can negate jurisdiction on a legal or factual basis.
Kelly, 301 S.W.3d at 659. The defendant negates jurisdiction factually by presenting
evidence that it has no contacts with Texas, after which the plaintiff may respond with
evidence to affirm its jurisdictional allegations. Id. The defendant negates jurisdiction
legally by showing that even if the plaintiff’s allegations are true, “the evidence is legally
insufficient to establish jurisdiction; the defendant’s contacts with Texas fall short of
purposeful availment; . . . that the claims do not arise from the contacts; or that
traditional notions of fair play and substantial justice are offended by the exercise of
jurisdiction.” Id.
D. Analysis
Woods and Intervenors acknowledged in their live pleadings that Defendants are
not Texas residents, and no party disputes that, as asserted in Defendants’ special
appearance, Rieder and Rapee were not physically present in Texas for any of the alleged
acts relevant to this litigation. The disputed questions are whether acts that Rieder and
Rapee allegedly took while physically outside of Texas show purposeful availment and
whether the claims asserted against them arise from those out-of-state acts. Each of
the plaintiffs relies, in one way or another, on the CQ Agreement, its execution, or its
31
performance to show minimum contacts, and in each case, the alleged Texas contacts
are insufficient to support personal jurisdiction over Defendants for the claims asserted.
1. Insufficient Minimum Contacts for Meeker’s Intervention Claim
Against Defendants Related to the Cadbury Operating Agreement
As stated, the trial court denied Defendants’ special appearance as to Intervenors’
claims. Meeker’s first claim as Intervenor is for a declaratory judgment concerning the
Cadbury Operating Agreement. Meeker pleaded for “a declaration that he and any
entity he operates has the right to utilize Woods’[s] services without incurring liability
under Paragraph 12 of the Cadbury [O]perating [A]greement.” Because the operative
facts of that claim are unrelated to Defendants’ alleged Texas contacts, the trial court
does not have jurisdiction over Defendants for this claim. See Moki Mac, 221 S.W.3d at
585.
Meeker’s plea alleged that the trial court had jurisdiction over Defendants
because (1) Cadbury consented to jurisdiction in Texas by executing the CQ Agreement
containing the forum selection clause and Rieder and Rapee were members of Cadbury
when this consent was provided and (2) “on information and belief, Rapee and Rieder
have participated in, authorized and/or directed correspondence and other contacts
with the State of Texas out of which arise the causes of action stated herein.” But “for
a nonresident defendant’s forum contacts to support an exercise of specific jurisdiction,
there must be a substantial connection between those contacts and the operative facts
of the litigation.” Id. Any contacts that Defendants had with Texas based on the
32
negotiation or execution of the CQ Agreement are irrelevant to this claim relating to
the Cadbury Operating Agreement because the CQ Agreement has nothing to do with
the validity or construction of the Cadbury Operating Agreement. Meeker did not
allege or provide evidence that Cadbury is a Texas entity, that any party to the Cadbury
Operating Agreement is a Texas resident, that Rieder or Rapee negotiated or signed the
agreement in Texas, or that the agreement called for them or Woods to perform their
respective obligations under that agreement in Texas. And the facts that Meeker
pleaded to support his claim—that Cadbury had never had a board meeting, created a
budget, or maintained corporate books and records—are wholly unrelated to any acts
performed or required to be performed in Texas.
With respect to the allegation that Rapee and Rieder have had “correspondence
and other contacts with the State of Texas,” Meeker neither alleged nor provided
evidence of communications or contacts by Defendants with Texas that have relevance
to whether the Cadbury Operating Agreement is valid or whether its terms limit
Woods’s employment options. See TV Azteca, 490 S.W.3d at 52–53 (determining
whether there is a substantial connection between a nonresident’s contacts and the
operative facts of the litigation involves consideration of what the claim is principally
concerned with, whether the contacts will be the focus of the trial and consume most
if not all of the litigation’s attention, and whether the contacts are related to the
operative facts of the claim).
33
Because Defendants do not have minimum contacts with Texas for purposes of
Meeker’s claim that he has the right to use Woods’s services without liability, we sustain
Defendants’ second issue as to that claim. 22
2. Insufficient Minimum Contacts for Meeker’s Declaratory Judgment
Claim against Rieder and Rapee Regarding the CQ Agreement
Meeker’s claim on behalf of CQuentia requested a declaration that he had the
right as CQuentia’s manager to terminate the CQ Agreement under paragraph 5(c) of
that agreement. We have already held that Cadbury has conceded jurisdiction in Texas
for this claim. But Rieder and Rapee are not parties to the CQ Agreement, and there is
no allegation or evidence that they have the right to enforce it or contest its termination.
22
Intervenors argue that Defendants did not argue below that Texas lacks
jurisdiction over Cadbury for this claim and acknowledged that the trial court had
jurisdiction over Cadbury for both of Meeker’s claims. We disagree. While Defendants’
attorney stated generally at a hearing that there was no dispute that the trial court had
jurisdiction over Cadbury “to the extent it relates to the [I]ntervenors’ claims,”
Defendants’ supplemental special appearance clarified their position that the trial court
did not have jurisdiction over Cadbury for Meeker’s first declaratory judgment claim
under the CQ Agreement’s forum selection clause because CQuentia had not asserted
any claims against it, that they objected to personal jurisdiction as to both Intervenors’
claims, and that their arguments in their amended special appearance applied equally to
Intervenors’ claims. And Defendants’ brief in support asserted that the trial court had
a “clear lack of jurisdiction over Defendants” as to Intervenors’ claims and that their
amended special appearance challenging jurisdiction over Cadbury with respect to
Woods’s claims also applied to Meeker’s claim challenging the Cadbury Operating
Agreement, which they argued was identical to Woods’s claim. We consider these
filings to argue that while Defendants did not dispute that the trial court had jurisdiction
over Cadbury for claims by CQuentia, or at least for any claims related to the CQ
Agreement, they did dispute that any such claim had been asserted or, if it had, that the
trial court had jurisdiction over Cadbury for Meeker’s first declaratory judgment claim.
34
See First Bank, 519 S.W.3d at 102. Assuming, however, that Meeker pleaded this claim
against Rieder and Rapee as well, the focus of this claim will be the terms of the CQ
Agreement and the grounds for which it authorized termination. See Tex. Civ. Prac. &
Rem. Code Ann. § 37.004 (allowing a person interested under a contract to have a court
determine questions of the contract’s construction); Great Am. Ins. v. Primo, 512 S.W.3d
890, 893 (Tex. 2017) (“The goal of contract interpretation is to ascertain the parties’
true intent as expressed by the plain language they used.”).
To the extent that Meeker is seeking a declaration that the specific basis on which
he terminated the CQ Agreement was authorized by the agreement’s terms, the basis
for terminating the agreement will likely be an issue at trial.23 In Meeker’s termination
letter, his stated reason for termination was “discord among the members of Cadbury”
that “may threaten the ability of [Cadbury] to perform its obligations under the [CQ
Agreement] and adequately address the needs of” the agreement’s clients. But even if
we assume that Meeker’s reason for terminating will be an operative fact of his
declaratory judgment claim, there is no allegation or evidence that any of this discord
involved acts of Rieder or Rapee performed or required to be performed in Texas.
23
In correspondence between Cadbury and CQuentia in the record, the parties
disputed whether Meeker could terminate the agreement for any reason at all or only
for reasons specified in an amendment to the CQ Agreement that CQuentia claimed
was never validly executed by Cadbury.
35
In Meeker’s plea in intervention, he did not specifically state his basis for ending
the CQ Agreement, but he alleged elsewhere in the pleading that Rieder and Rapee had
failed to bring any clients to the business and “to provide several of their promised
advantages to Cadbury” and that Cadbury had failed to have a board meeting, create a
budget, or maintain corporate books and records. There is no allegation or evidence
that any of these acts were performed in Texas or required to be performed here. For
purposes of this claim, Rieder’s and Rapee’s alleged failure to bring in clients has only
an indirect connection to Texas to the extent that they were supposed to bring in clients
to perform their obligations to Cadbury so that Cadbury could in turn earn revenue
under the CQ Agreement. Even were we to consider their performance of Cadbury’s
contractual obligations as their individual acts rather than Cadbury’s acts, there is no
allegation or evidence that they were supposed to perform or that they did perform any
of that work in Texas or target Texas clients. And regardless of whether we attribute
those contacts to Cadbury or to Rieder and Rapee, any contacts they had with Texas
through their work for Cadbury are too inconsequential to constitute minimum
contacts.
Even assuming that what prompted Meeker to bring this claim was the letter
from Cadbury’s attorney asserting that the CQ Agreement had not been properly
terminated and threatening litigation if CQuentia did not honor its obligations, this
contact does not support jurisdiction over Rieder and Rapee. Although the letter stated
that the attorney represented all three defendants and that any communications with
36
the three should be directed to him, the letter’s assertions about the agreement’s
continuation were made on behalf of Cadbury regarding Cadbury’s expectation that
CQuentia would honor its obligations under the CQ Agreement. Rieder and Rapee
were mentioned only when the letter stated that all three of Cadbury’s members owed
Cadbury fiduciary duties. And, more importantly, the attorney’s letter will not be the
focus of the litigation over this claim because the letter is unnecessary to establish the
terms of the CQ Agreement or Meeker’s basis for terminating it. In summary, Meeker
did not allege or provide evidence of sufficient connection between any contacts that
Rieder and Rapee have with Texas and the operative facts of this particular claim. See
TV Azteca, 490 S.W.3d at 52–53. We sustain Defendants’ second issue as to CQuentia’s
right to terminate the CQ Agreement.
3. Insufficient Minimum Contacts for CQuentia’s Claims
CQuentia’s claims against Rieder and Rapee involve the execution of both the
CQ Agreement and the subsequent M3 Agreement. Its claims for fraud and fraudulent
inducement are based on the allegation that, in order to induce CQuentia to sign both
agreements, Rieder and Rapee made misrepresentations about the “nature and number
of their high-level contacts with several entities operating in the medical field, the
number and quality of their available sales representatives, and the work that they would
perform to obtain clients under” those agreements. CQuentia based its negligent
misrepresentation claim on these same representations, asserting that Rieder and Rapee
made these representations “in the course of CQuentia’s business” in order to “guide”
37
CQuentia to entering into the CQ Agreement and the M3 Agreement. As we explain,
Rieder’s and Rapee’s limited contacts with Texas residents through emails, telephone
calls, and videoconferences are insufficient to support minimum contacts.
a. Vague Jurisdictional Allegations
We begin by looking at CQuentia’s jurisdictional allegations. CQuentia’s plea in
intervention alleged that the trial court has subject matter jurisdiction because “th[ese]
cause[s] of action arose in part in Texas,” that venue was proper in Tarrant County
“because a substantial part of the causes of action occurred [t]here,” and that the trial
court had jurisdiction over Rieder and Rapee because they “have participated in,
authorized and/or directed correspondence and oral representations with the State of
Texas out of which arise the causes of action stated herein.” 24 CQuentia does not
provide any factual elaboration on what it means by saying that Rieder and Rapee
participated in or directed communications “with the State of Texas” and does not
actually allege that any of the alleged communications occurred while Rieder and Rapee
were physically present in Texas. 25 See City of White Settlement v. Emmons, No. 02-17-
24
The plea in intervention also asserted jurisdiction over Rieder and Rapee based
on the forum selection clause, but the Texas Supreme Court and now this court have
overruled the plaintiffs’ arguments that the forum selection clause applies to Rieder and
Rapee.
25
This phrasing may have been intended to invoke the “directing a tort”
jurisdictional analysis. If so, the pleading does not provide any factual allegations to
support an argument that Rieder and Rapee targeted Texas, as opposed to targeting
CQuentia. See TV Azteca, 490 S.W.3d at 43 (pointing out the “subtle yet crucial
difference between directing a tort at an individual who happens to live in a particular
38
00358-CV, 2018 WL 4625823, at *14 (Tex. App.—Fort Worth Sept. 27, 2018, pet.
denied) (mem. op.) (“A nonresident who, while physically present in the State of Texas,
makes statements alleged to be fraudulent is subject to specific jurisdiction in Texas in
a subsequent action arising from the statement.” (emphasis added)).
Other parts of the pleading, however, include the assertion that Rieder and Rapee
made representations to CQuentia. No specific CQuentia representative is identified
as the recipient of these representations, but because the plea discusses Woods’s
introducing Rieder and Rapee to Meeker, the implication is that the representations
were made to Meeker. But, again, there is no allegation of where these representations
were made or sent, and thus there is no indication of whether CQuentia’s allegation
that the communications were directed “at Texas” is based on the communications
being sent to and received in Texas, based on only the fact that the communications
were made to a Texas resident, or based on something else. See Hanor, 2020 WL
7364659, at *4 (“For the exercise of personal jurisdiction to comport with due process,
‘the plaintiff cannot be the only link between the defendant and the forum.’” (quoting
Walden v. Fiore, 571 U.S. 277, 285, 134 S. Ct. 1115, 1122 (2014))). Assuming, however,
state and directing a tort at that state” and stating that “the fact that the plaintiff lives
and was injured in the forum state is not irrelevant to the jurisdictional inquiry, but it is
relevant only to the extent that it shows that the forum state” was the focus of the
defendant’s activities); see also Hanor v. Hanor, No. 04-20-00142-CV, 2020 WL 7364659,
at *3 (Tex. App.—San Antonio Dec. 16, 2020, no pet. ) (mem. op.) (“We consider only
the defendant’s contacts with Texas itself, not his contacts with persons who live in
Texas.”).
39
that CQuentia’s vague allegation that “part of the causes of action” occurred in Texas
is sufficient to satisfy Texas’s long-arm statute, asserting personal jurisdiction over
Rieder and Rapee for these claims does not satisfy due process because the alleged
contacts do not show purposeful availment and are not sufficiently connected to the
operative facts of CQuentia’s claims. See Searcy v. Parex Res., Inc., 496 S.W.3d 58, 68–69
(Tex. 2016) (stating that specific jurisdiction does not turn on where a plaintiff happens
to be and that it is not enough for specific jurisdiction that the defendant knew that the
alleged harm would be felt in the forum state).
b. Insufficient Jurisdictional Evidence
Looking at the jurisdictional evidence provided by Intervenors, we have the
following contacts asserted by CQuentia as supporting jurisdiction. CQuentia is a Texas
entity, and CQuentia alleged that Rieder and Rapee made misrepresentations to its
representatives and that CQuentia contracted with Cadbury in reliance on those
representations. See Michiana, 168 S.W.3d at 787 (observing that in some circumstances
a single contract, such as one that involves many contacts over a long period of time,
may meet the purposeful-availment standard); Cent. Petroleum Ltd. v. Geoscience Res.
Recovery, LLC, 543 S.W.3d 901, 921 (Tex. App.—Houston [14th Dist.] 2018, pet.
denied) (op. on reh’g) (stating that the operative facts of a fraudulent misrepresentation
claim include defendant’s making of the misrepresentation and the plaintiff’s reliance
on the misrepresentation). And, in performing under the CQ Agreement, CQuentia
sent two checks to Cadbury—one for just under $3,000 and one for $115.49—for
40
Cadbury’s share of the revenue generated by its marketing, funds that would
presumably indirectly benefit Cadbury’s members. Further, Rieder and Rapee
exchanged many emails with Texas employees of CQuentia. But see Old Republic Nat’l
Title Ins. v. Bell, 549 S.W.3d 550, 564 (Tex. 2018) (stating that accepting money drawn
on a Texas bank is of negligible significance for purposes of determining whether a
nonresident has sufficient contacts with Texas); Michiana, 168 S.W.3d at 788 (stating
that “‘financial benefits accruing to the defendant from a collateral relation to the forum
State will not support jurisdiction if they do not stem from a constitutionally cognizable
contact with that State’” (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
299, 100 S. Ct. 559, 568 (1980)). And the CQ Agreement had a forum selection clause
designating Texas as the forum for any disputes among the parties arising from that
contract. Michiana, 168 S.W.3d at 792 (“[C]hoice-of-law provisions should not be
ignored in considering whether a defendant has ‘purposefully invoked the benefits and
protections of a State’s laws.’”).
On the other hand, CQuentia has not disputed Rieder and Rapee’s assertions in
their special appearance that they have not been physically present in Texas for any
purpose or act related to the claims against them in this suit, and there is no allegation
or evidence that Rieder and Rapee made any representations while physically in Texas. 26
Cadbury’s Wisconsin complaint identifies California and Wisconsin as the
26
location of in-person meetings among the parties that led to the CQ Agreement. But
see OZO Capital, Inc. v. Syphers, No. 02-17-00131-CV, 2018 WL 1531444, at *8 (Tex.
App.—Fort Worth Mar. 29, 2018, no pet.) (mem. op.) (pleadings are not evidence).
41
CQuentia’s plea in intervention did not specify the form of the correspondence that
Rieder and Rapee had with CQuentia, and the only evidence on that point is the
affidavits of Meeker and CQuentia president Stephen Mallick in which they averred that
the representations were made in phone calls27 and videoconferences. 28 These types of
communications do not, without more, establish personal jurisdiction based on a tort
committed in Texas or a tort directed at Texas. See Hatzenbuehler v. Essig, 526 S.W.3d
657, 665 (Tex. App.—Houston [1st Dist.] 2017, no pet.) (op. on reh’g). And while
Meeker averred that Rieder and Rapee were told that CQuentia is a Texas-based entity,
their knowledge of CQuentia’s headquarter’s location does not move the location of
their representations to Texas. While “‘[j]urisdiction . . . may not be avoided merely
because the defendant did not physically enter the forum state,’” Retamco Operating, 278
S.W.3d at 339 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S. Ct. 2174,
2184 (1985)), we are unpersuaded that in the context in which they were made, the
Whether the meetings were held in Wisconsin or elsewhere, what matters for our
analysis is that no party or evidence disputes that no in-person meetings occurred in
Texas. Thus, for jurisdiction to exist, it must be based on some other contact by Rieder
and Rapee with the forum.
27
Rieder and Rapee do not dispute that they exchanged phone calls with Meeker
about the formation of the CQ Agreement, but they do not concede that they made
any misrepresentations in those communications.
28
To the extent that mailed correspondence can show commission of a tort in
the forum state, CQuentia did not allege or provide evidence that the representations
were made in letters mailed to Texas.
42
telephone conversations and videoconferences, without more, are sufficient to support
jurisdiction over Rieder and Rapee for CQuentia’s claims. See Star Motors, LLC v.
Motorwerks Vehicle Sales LLC, No. 14-18-00763-CV, 2019 WL 2385755, at *3 (Tex.
App.—Houston [14th Dist.] June 6, 2019, pet. denied) (mem. op.) (citing cases of
appellate courts rejecting as insufficient to prove purposeful availment allegations of
tortious conduct occurring during telephone calls or in emails to a resident of the forum
state).
Further, CQuentia’s own evidence indicates that the idea of the business
partnership came from Meeker or Woods, not Rieder and Rapee. 29 Contra Lucas v. Ryan,
No. 02-18-00053-CV, 2019 WL 2635561, at *9 (Tex. App.—Fort Worth June 27, 2019,
no pet.) (mem. op.) (“Lucas and Invenias specifically chose to use, and initiated contact
with, a Texas resident for her skill and expertise.”). Meeker acknowledged that Rieder
and Rapee did not approach CQuentia to solicit its business. His affidavit states that
he and Woods discussed doing business together, and Woods then introduced Meeker
to Rieder and Rapee. CQuentia and Meeker’s response to the special appearance
We do not hold that conversations about doing business in Texas never support
29
personal jurisdiction over a nonresident defendant if the Texas resident approached the
defendant to do business rather than the other way around. Whether the nonresident
defendant approached the Texas resident first is merely a factor to consider in
determining whether the defendant has sufficient contacts with Texas. See, e.g., Raiden
Commodities, LP v. De Man, No. 01-17-00181-CV, 2018 WL 3151004, at *4 & n.3 (Tex.
App.—Houston [1st Dist.] June 28, 2018, no pet.) (mem. op.) (examining the
defendant’s contacts in a case in which the plaintiff, then a Texas resident, approached
the nonresident defendant about employment with the plaintiff’s companies).
43
attached as jurisdictional evidence an email from Rieder to a potential series partner in
which Rieder explained how he and Rapee became involved with Meeker. This email
supported the statement in Meeker’s affidavit that it was Woods who brought Meeker
to them and that the idea of selling CQuentia’s services did not come from Rieder or
Rapee. The email explained that Woods owns a finance company and had previously
done work for Meeker, and Meeker contacted Woods about a business partner’s
financing the purchase of a Wisconsin pharmacy. Rieder and Rapee had hired Woods
as a consultant for Care Integrations, and in a conversation between Meeker and
Woods, “[Meeker] introduced [Woods] to PGx, and [Woods] discussed how [Rieder
and Rapee] were distributing/educating [their] clients on telemedicine, and [Meeker]
offered [them] the option to distribute PGx and RRP testing.” Other evidence shows
that before Woods brought the idea to them, Rieder and Rapee were engaged together
in an entirely different line of business—telemedicine services—and there is no
evidence that they had plans to work with or solicit CQuentia or any other Texas entity.
Further, with respect to the CQ Agreement as a Texas contact, as the Texas
Supreme Court has already pointed out, Rieder and Rapee are not parties to that
contract and did not agree to be bound by it, Rieder, 603 S.W.3d at 101; cf. Burger King,
471 U.S. at 482, 105 S. Ct. at 2187 (choice of law provision, standing alone, is
insufficient to confer jurisdiction). They would not have foreseen that the forum
selection clause would be enforced against them and that they would be haled into court
in Texas under the agreement. See Rieder, 603 S.W.3d at 101; see also Volkswagen, 444
44
U.S. at 297, 100 S. Ct. at 567 (“[T]he foreseeability that is critical to due process analysis
is . . . that the defendant’s conduct and connection with the forum State are such that
he should reasonably anticipate being haled into court there.”).
The bulk of Intervenors’ jurisdictional evidence consisted of hundreds of pages
of email correspondence, primarily involving Rieder, Rapee, Woods, and Meeker.
These emails have only a loose connection to CQuentia’s claims and do not show a
sufficient connection to Texas. In these communications, Rapee (and to a lesser extent,
Rieder) sent emails to and responded to emails from Meeker, Woods, and others, setting
up meetings for clients and potential clients and then following up with each other after
those meetings. These emails do not show any representations by Rieder and Rapee
about their contacts in the medical field or their ability to supply a salesforce.30 And to
the extent that they relate to Rieder’s and Rapee’s promises about working under the
CQ Agreement and the M3 Agreement, they show Rieder and Rapee performing that
work, setting up meetings with potential clients. CQuentia does not allege that these
emails themselves show Rieder and Rapee making the alleged representations that
induced it to sign an agreement with Cadbury, and our review of the record did not
We do not need to address whether and in what context extensive exchanging
30
of emails can constitute minimum contacts for a claim because the record here does
not show that any emails contained the alleged misrepresentations, and Meeker’s and
Mallick’s affidavits say the alleged misrepresentations were made in telephone calls and
videoconferences.
45
reveal emails in which the alleged representations were made.31 Thus, even though
some of the emails were to or from CQuentia personnel, they do not show contacts
with Texas that will be the focus of litigating these claims.
In some of these emails, Rapee communicated with CQuentia employees about
providing CQuentia forms and educational materials to clients, and Meeker and Mallick
referenced these emails in their affidavits in order to demonstrate contacts with Texas.
For example, Rapee emailed a potential client in Wisconsin, attaching documents for
the client’s review and confirming an upcoming “lunch and learn” in Wisconsin. In
that email, he copied CQuentia employee Courtney Kramer and informed the client,
“[Kramer] will call you to go over the attached account set up form so when we meet
. . . you are an established account.” Kramer responded, identifying herself to the
potential client as “one of the liasons [sic] between CQuentia and [the client] to help
implement and manage PGx testing in [the client’s] facilities.” Rapee later emailed
Kramer and asked if he could call her during the upcoming meeting with that client “to
answer any questions [he] might not have covered.” In another exchange, Rapee
emailed Kevin Jones, CQuentia’s chief operating officer, about whether CQuentia had
testing for certain health conditions. And Mallick asserted in an affidavit that Rieder
31
Again, Meeker’s affidavit identifies phone calls and videoconferences, not these
emails, as the communication medium for the representations made to CQuentia.
46
and Rapee “often contacted” Kramer and another account representative through calls
and emails “to request assistance from CQuentia.”
But assuming that Rieder and Rapee’s performance of Cadbury’s contractual
obligations could create a sufficient relationship between them and Texas for purposes
of CQuentia’s misrepresentation claims, the evidence of their performance here—their
emails, telephone calls, and videoconferences with CQuentia employees—does not.
For the purposes of those communications, the CQuentia employees involved in those
long-distance emails, telephone calls, and videoconferences “could, quite literally, have
been based anywhere in the world,” and Rieder and Rapee would presumably have
interacted with CQuentia and its employees in the same way as they did here.32 See
Searcy, 496 S.W.3d at 74–75; see also Hatzenbuehler, 526 S.W.3d at 665 (stating that
telephone calls and emails, without more, are an insufficient basis for establishing
personal jurisdiction based on a tort committed in the state); Furtek & Assocs., L.L.C. v.
Maxus Healthcare Partners, LLC, No. 02-15-00309-CV, 2016 WL 1600850, at *5 (Tex.
App.—Fort Worth Apr. 21, 2016, no pet.) (mem. op.) (stating same and pointing out
that “[t]he rationale . . . is that jurisdiction should not be determined by the fortuitous
location of the Texas resident when the nonresident defendant communicates with
them”). Thus, they do not constitute purposeful contacts with Texas, even were we to
32
The CQ Agreement called for CQuentia to perform certain lab services, but it
specified that CQuentia would maintain a molecular diagnostic lab in Tennessee for
that purpose.
47
consider them to be substantially connected to CQuentia’s misrepresentation claims.
And there is no allegation or evidence that these contacts with employees contained the
representations relied on by CQuentia. See TV Azteca, 490 S.W.3d at 52–53. These
contacts are too inconsequential to constitute minimum contacts for these claims.
Intervenors further pointed to two connections to Texas through their
relationship with CQuentia, but neither shows a substantial connection between Texas
and Rieder and Rapee. First, the record contains evidence showing that through
Cadbury—or more particularly, through Woods—CQuentia developed a relationship
with Alliance Medical, an Austin, Texas entity, to provide sales representatives
“covering most major cities.”33 An email chain shows that not long after forming this
relationship, Woods emailed both Rapee and Gary Brown, Alliance’s president, to tell
Rapee, “Gary at Alliance has a V[eteran’s] A[dministration] contract that we can add
too. It may be useful for your VA contact. It may make sense for you two to speak.”
Rapee responded with his cell phone number, and the two arranged a phone call later
that day. Another email makes clear that the phone conversation took place and that
in that call, the two discussed Alliance’s VA contract. There is no allegation or evidence
33
Emails in the record indicate that it was Woods who met with and solicited
Alliance. But Cadbury’s Wisconsin complaint states that “Rieder, Rapee, and
Woods . . . developed a marketing and training program for sales representatives” with
Alliance, indicating that after the relationship with Alliance was formed, Rieder and
Rapee participated in training Alliance’s sales representatives—or at least that Cadbury
is willing to claim that they did. But see OZO Capital, 2018 WL 1531444, at *8 (noting
that pleadings generally are not evidence, even when verified).
48
that Rapee met with Brown or any other Alliance representative in Texas or that Rieder
and Rapee purposefully targeted Alliance, only that Rapee became involved with
Alliance at the behest of Woods. And there is no indication that Rapee’s
communications with Brown and Alliance, which were made in performance of
Cadbury’s obligations under the CQ Agreement, would be the focus of CQuentia’s
effort to establish that Rieder and Rapee made misrepresentations upon which
CQuentia relied. See TV Azteca, 490 S.W.3d at 52–53.
CQuentia also relied on an email that Rapee sent to Mallick and others seeking
to set up a web meeting with Rapee’s contact with the Veteran’s Administration.
Mallick stated in his affidavit that “Rieder and Rapee’s efforts to sell CQuentia’s PGx
services to Veteran Administration facilities included facilities located in Texas.” But
there is no indication that Rieder and Rapee were specifically targeting the VA’s Texas
facilities (as opposed to targeting the VA generally) and no allegation or evidence that
Rieder or Rapee made any representations about their ability to target VA facilities in
Texas in order to induce the execution of the CQ Agreement and the M3 Agreement.
Because Rieder and Rapee do not have minimum contacts with Texas for
purposes of CQuentia’s claims, we sustain Defendants’ first issue.
4. Insufficient Minimum Contacts for Woods’s Claims
The trial court did grant Defendants’ special appearance directed at Woods’s
claims. Woods argues in his fifth issue that the trial court has jurisdiction over
Defendants for his claims because of their solicitation of CQuentia “for business and
49
profits” and because of CQuentia’s partial performance of that business in Texas.34 We
disagree. Woods’s claims are all disputes among an out-of-state entity and its
nonresident members and have only a tenuous, insubstantial connection to Texas.
a. Declaratory Judgment Claims
Woods sought two declarations from the trial court. First, he requested a
declaration as to “the legal relations between himself on the one hand and Rieder,
Rapee, and Cadbury on the other” and “any obligations [he] may have to Cadbury,
which entity . . . never became legally efficacious.” More specifically, he wanted a
declaration that “the restrictive covenant of the [Cadbury] Operating Agreement never
became effective.”35 Second, he requested a declaration that, even if Cadbury is a viable
entity, “it in fact never entered into any legally enforceable contract with CQ[uentia]
because any such relationship was never undertaken by or ratified by the Board.”
Regarding the first declaratory judgment claim, Woods did not allege that the
Cadbury Operating Agreement had a Texas resident as a party or called for performance
34
We previously held that all of Woods’s claims were intertwined with the CQ
Agreement, but we did so based on our conclusion that the CQ Agreement and the
Cadbury Operating Agreement were part of the same business transaction and that we
should read the two contracts together to understand the parties’ agreement. Rieder,
587 S.W.3d at 46, 47–48. The Texas Supreme Court rejected these conclusions. Rieder,
603 S.W.3d at 102.
Meeker’s first declaratory judgment claim requested essentially the same
35
relief—a declaration that “he and any entity he operates has the right to utilize
Woods’[s] services without incurring liability under Paragraph 12 of the Cadbury
[O]perating [A]greement” on the basis that Cadbury had never begun operations.
50
in Texas, and the agreement’s terms show that it did not. Cadbury is undisputedly not
a Texas entity. As with Meeker’s related claim, there is no allegation or evidence that
any part of the Cadbury Operating Agreement was negotiated in Texas or that it was
signed in Texas. Woods’s claim that Cadbury never became operational is based on
allegation that its members never performed certain acts called for by its operating
agreement—selecting board members, holding board meetings and conducting other
official business, distributing a balance sheet, preparing a budget, and creating books
and records—and there is no allegation or evidence that any of these acts were
performed or were required to be performed in Texas. In short, with respect to the
operative facts of this claim, the Defendants have no connection at all to Texas. See
Moncrief Oil, 414 S.W.3d at 150 (stating that specific jurisdiction requires that the
nonresident’s forum contacts have a substantial connection to the litigation’s operative
facts).
Woods argued in a supplemental response to Defendants’ amended special
appearance that “the ‘genesis’ of that claim is whether Woods is precluded by the
Operating Agreement for Cadbury from continuing to deal with Meeker and CQuentia, as he
did before Cadbury was ‘formed.’” [Emphasis in original.] But while Woods’s desired
outcome is that he be allowed to do business with Meeker without any restrictions from
the Cadbury Operating Agreement, that desire does not connect any of the operative
facts of his claim to any contact by Defendants with Texas, and his motivation in filing
suit is not an operative fact of his claim. Instead, the focus of litigating the claim will
51
be on the terms of the Cadbury Operating Agreement and the acts or omissions of its
nonresident members in operating the out-of-state entity.
Likewise, Woods’s claim for a declaration regarding whether Cadbury’s board
ratified the CQ Agreement is not sufficiently connected to Texas for the trial court to
have jurisdiction over it. We do not ignore the facts that the CQ Agreement is an
agreement with a Texas entity and contains a Texas choice-of-law provision, that
Cadbury received some revenue checks under the agreement, and that Woods alleged
that Rieder took “several thousand dollars from money Woods brought in from
CQ[uentia].” But Woods’s claim is not substantially connected to these alleged
contacts. Woods’s allegation is that the Cadbury Operating Agreement prohibited one
member (in this case, Woods) from binding the company unless authorized in writing
to do so by the board and that the board never ratified the CQ Agreement that Woods
executed on Cadbury’s behalf. Woods’s claim turns on whether the members of a non-
Texas entity, none of whom are Texas residents, performed acts called for by the entity’s
operating agreement.
Woods also argues that this claim is based on Defendants’ Texas contacts
because he is suing to have the CQ Agreement declared invalid, and the CQ Agreement
is a contact between Defendants and Texas. But his claim has nothing to do with the
terms of the CQ Agreement, its negotiation, its performance, or its execution by himself
and Meeker on behalf of the respective entities. The connection between this claim
52
and Texas contacts is too tenuous to support personal jurisdiction over Defendants.
We overrule this part of Woods’s fifth issue.
b. Breach of Contract
For his breach of contract claim, Woods alleged that Rieder and Rapee “made
offers to Woods as to bringing in business and a sales force if Woods would enter into
[Cadbury] with them,” that he accepted that offer and joined Cadbury, and that Rieder
and Rapee breached that agreement by not bringing in business and a sales force.
Woods claimed unspecified damages resulting from that breach, and, in the alternative,
he sought a declaration that the breach “free[d] up Woods” from the Cadbury
Operating Agreement’s restrictive covenants.36
Again, Woods does not contend that the Cadbury Operating Agreement was
signed in Texas or by Texas residents, that it called for performance in Texas by any of
its parties, that it was negotiated in Texas, that it targeted Texas residents, or that it was
breached in Texas. See, e.g., IRA Res., Inc. v. Griego, 221 S.W.3d 592, 597 (Tex. 2007)
(considering fact that contract was not negotiated in Texas in determining whether the
contract gave rise to personal jurisdiction). There is no evidence that Woods, Rieder,
Woods’s petition asserts that he should be released from his obligations under
36
the Cadbury Operating Agreement because of Rieder and Rapee’s “prior material
breaches” of their “CQ obligations” to bring in business and a sales force for CQuentia,
which we read as asserting that Rieder and Rapee had those obligations under the terms
of the Cadbury Operating Agreement. But as the Texas Supreme Court has stated,
“[n]oticeably absent from the Cadbury [Operating] Agreement is any mention of
CQuentia or the [CQ] Agreement.” Rieder, 603 S.W.3d at 95.
53
and Rapee were the named parties to any contract that was signed or negotiated in
Texas, included a Texas resident as a party, called for a party’s performance in Texas,
or was breached in Texas.37
The operative facts of Woods’s breach of contract claim do not involve Texas
contacts by Defendants. We overrule Woods’s fifth issue as to this claim.
c. Fraud Claim
Woods asserted his fraud claim based on the following alleged
misrepresentations by Rieder and Rapee:
Rieder represented to Woods that he had multiple hospitals where he
practiced and had high level contacts, and he assured Woods that he
would bring this business to the new entity (which eventuated in Cadbury),
and that Rieder would roll out services to his clients. . . . Rieder further
assured Woods that Cadbury could and would replicate Rieder’s sleep
products and that Rieder would make this happen. . . . Rieder also
represented he would . . . use his background to write white papers and
speak on the topic of PGx testing . . . . For his part, Rapee assured Woods
that his own company would have 20 other sales representatives selling
products for Cadbury . . . . Rapee represented that he would travel and
help train the sales force, but did not.
....
37
Woods cites to Barnhill v. Automated Shrimp Corp., 222 S.W.3d 756, 764 (Tex.
App.—Waco 2007, no pet.), to argue that entering into a contract that “contemplates a
long-term relationship with Texas” can give rise to specific jurisdiction. Barnhill is
distinguishable because, among other things, in that case the nonresident defendant not
only contracted with a Texas entity in his individual capacity, he also received shares of
stock in a Texas corporation—Texas assets—for which he served as chairperson and
CEO. Id. at 764–66. The Cadbury Operating Agreement does not involve Texas
partners or assets.
54
. . . Based on the representations of Rieder and Rapee as aforesaid,
Woods agreed with Rieder and Rapee to undertake to create a Nevada
limited liability company, Cadbury, and then signed off on the [Cadbury
Operating Agreement].
Woods alleged that he “reasonably relied on those false representations and promises
by agreeing to form Cadbury and provide efforts to obtain business for Cadbury,
including with CQ[uentia].”
Woods did not allege, and no evidence showed, that Rieder and Rapee made
these representations while physically present in Texas or even that Woods relied on
any representations made in Texas. See Booth v. Kontomitras, 485 S.W.3d 461, 486 (Tex.
App.—Beaumont 2016, no pet.). Woods, the recipient of the alleged
misrepresentations, is not a Texas resident. The Cadbury Operating Agreement, which
allegedly resulted from the representations, does not call for performance in Texas or
involve a Texas resident as a party and or Texas assets.
In Woods’s amended petition and his responses to Defendants’ amended special
appearance, he noted that Cadbury signed the CQ Agreement with Texas-based
CQuentia under which Cadbury earned revenue (some of which, according to Woods,
Rieder withdrew for another one of his businesses). But even assuming that Cadbury’s
contracting with a Texas entity and earning revenue from the contract constitute
contacts by Rieder and Rapee with Texas, these contacts do not have a substantial
connection to Woods’s claim that Rieder and Rapee made misrepresentations to induce
55
(Utah-resident) Woods to form Cadbury with them to his detriment.38 See TV Azteca,
490 S.W.3d at 52–53; Cent. Petroleum, 543 S.W.3d at 921 (identifying the operative facts
of a fraudulent misrepresentation claim as facts showing a misrepresentation that was
false when made and made knowingly or recklessly, that the plaintiff relied on the false
representation, and that the plaintiff was injured by that reliance); WaterWorks Corral
Creek, LLC v. AquaTech Saltwater Disposal LLC, No. 03-16-00309-CV, 2018 WL 988907,
at *7 (Tex. App.—Austin Feb. 21, 2018, pet. dism’d) (mem. op.) (quoting Searcy, 496
S.W.3d at 67, for the proposition that “[a] forum state has specific jurisdiction over a
nonresident defendant when the defendant’s purposeful activities in the forum state
themselves give rise to the liabilities sued on” (internal quotations marks omitted)).
We acknowledge that the CQ Agreement has a tangential relation to the fraud
claim because Woods argues that the CQ Agreement arose from his soliciting business
from CQuentia (that is, from his contact with a Texas entity) on behalf of Cadbury,
which he did only after agreeing to form Cadbury, which he would not have done
Woods argues that because he was Cadbury’s agent with respect to the CQ
38
Agreement, his act of executing the CQ Agreement on behalf of Cadbury is a contact
with Texas that may be imputed to Cadbury. Woods includes this argument in the
section of his brief that sets out his transaction-participant arguments, but he cites cases
discussing agency with respect to minimum contacts, so we briefly address that
argument. Simply put, the agency argument makes no difference to our holding
because, in our analysis, we have assumed that Woods’s execution of the CQ Agreement
was an act of Cadbury. That contact, however, does not support personal jurisdiction
over Defendants because, for purposes of the claims against them, that contract is not
substantially connected to the operative facts of the claims, does not demonstrate
purposeful availment, or both.
56
without Rieder’s and Rapee’s representations.39 While Woods asserts in his brief that
he worked with Meeker and CQuentia in reliance on Rieder’s and Rapee’s
representations, his actual argument is not that was induced to his detriment to work
for Meeker and CQuentia; his expressed desire is to continue working for Meeker.
Rather, his argument is that he was induced to do that work for Cadbury’s benefit rather
than his own direct benefit. In any case, under Woods’s arguments, the CQ Agreement
arose from his Texas contact, whose business he brought to a Nevada corporation
based on representations made to him, a Utah resident, somewhere other than Texas
about how he, Rieder, and Rapee could operate a business based outside of Texas.
There is too tenuous a connection between Rieder and Rapee’s contacts with Texas and
Woods’s claim to support jurisdiction. At the end of the day, this claim is about a
dispute among three nonresidents about allegedly fraudulent representations that took
place outside of Texas and concerned Rieder’s and Rapee’s out-of-state acts and
business contacts.
39
Woods’s affidavit, though vague on the timing of events, is phrased to imply
that he first agreed with Rieder and Rapee to form Cadbury and then had discussions
with Meeker in which he sought CQuentia’s business for Cadbury. However, Woods
also argued in his responses to the amended special appearance that Cadbury was
formed specifically to pursue the CQ Agreement and that Rapee was interacting with
CQuentia at Woods’s behest prior to Cadbury’s formation. Defendants and
Intervenors all say that Woods introduced Meeker to Rieder and Rapee before
Cadbury’s formation. Whatever the timing, Woods is consistent in arguing that the CQ
Agreement arose from his contact (either on behalf of Cadbury or before Cadbury was
formed) with a Texas entity.
57
Like Intervenors, Woods also cites hundreds of pages of emails showing Rieder’s
and Rapee’s efforts to sell CQuentia’s services and their communication with Meeker
and other CQuentia personnel about those efforts. Woods also cites the same email
relied on by Intervenors in which Rieder told a potential partner about how he became
involved with CQuentia. In that email, Rieder stated that in a conversation between
Woods and Meeker on an unrelated matter, “[Meeker] introduced [Woods] to PGx, and
[Woods] discussed how we were distributing/educating our clients on telemedicine, and
[Meeker] offered us the option to distribute PGx and RRP testing.” The email went
on, “I bring the clinical background and hospital credibility, [Rapee] brings
network/distribution/sales team, and [Woods] brings Ops and contracting experience.”
In another email cited by Woods, Rieder told someone, “The money behind the lab is
from D. Alan Meeker (fort worth) not the geneticist if you google him.”
These emails relate to Rieder’s and Rapee’s attempts to sell CQuentia’s services
and their understanding of their relationship with CQuentia. Emphasizing the “offered
us” language in the first email, Woods cites the email as evidence that Rieder and Rapee
sought a profit through CQuentia. But none of these emails show a sufficient
connection between any contacts Rieder and Rapee had with Texas and the operative
facts of Woods’s fraud claim; they do not show any misrepresentations by Rieder and
Rapee to Woods on which he relied. 40
We do not ignore the fact that, based on the record before us, Rieder, Rapee,
40
and Woods all understood that Woods would be bringing or attempting to bring
58
Woods also points to emails showing that “Rapee was interacting with
CQ[uentia], at Woods’[s] behest, [and] copy[ing] Rieder, even before Cadbury was formed.”
These emails show Rapee, with Woods’s encouragement, trying to arrange meetings in
Wisconsin between CQuentia’s Mallick and potential Wisconsin clients. At that point,
Cadbury had not been formed, and there is no evidence or allegation that Rieder or
Rapee had a contract with CQuentia. Although we assume that Rapee was helping set
up the meetings because they would benefit him in some way, these emails do not
themselves demonstrate Rieder and Rapee directly profited from a relationship with
CQuentia. They show Rapee helping CQuentia attempt to get business in Wisconsin.
And, more importantly, they do not show Rieder and Rapee making misrepresentations
to Woods, in Texas or elsewhere.
Finally, quoting the argument of his attorney at a pretrial hearing, Woods argues
that his “work[ing] with CQuentia and Mr. Meeker and also continu[ing] to work for
M3” in performance of Cadbury’s contractual obligations is evidence of his justifiable
reliance on Rieder’s and Rapee’s misrepresentations and that “that’s an element of
fraud[,] and that happened down here in Texas.” He also cites emails showing that in
performing under the CQ Agreement, Woods met with Texas entity Alliance Medical
CQuentia’s business to Cadbury. But in this particular case, that fact is not enough to
show minimum contacts for purposes of Woods’s claims.
59
and successfully solicited it to provide sales representatives for CQuentia’s services.41
But even if these acts by Woods would be relevant in establishing Woods’s claim, his
selling CQuentia’s services and recruiting a Texas company are contacts by Woods. They
do not, without more, show contacts by Rieder and Rapee with Texas. See Moki Mac,
221 S.W.3d at 575 (explaining that only the defendant’s contacts with the forum matter
for personal jurisdiction). The fact that Woods solicited business in Texas on behalf of
Cadbury is not enough to confer jurisdiction over Rieder and Rapee for this claim given
that there is no evidence that Rieder and Rapee made the alleged misrepresentations in
Texas, that Cadbury is a Texas entity, that Woods is a Texas resident, or that the
representations concerned performance in Texas or Texas property.42
We overrule Woods’s fifth issue as to this claim.
d. Tortious Interference
Finally, Woods alleged that by threatening CQuentia with legal action if it
maintains its “business relationship and/or contractual relationship with Woods,
41
As noted above, Intervenors also produced emails showing that Rapee solicited
business with a contact with the VA and that the VA has some facilities in Texas, but
this contact does not have a substantial connection to Woods’s claim, either.
42
Woods cites Cornerstone Healthcare Group Holding, Inc. v. Nautic Management VI,
L.P., 493 S.W.3d 65, 73 (Tex. 2016), to support his argument. In that case, the
nonresident defendant invested in newly-created Texas subsidiaries that deliberately
sought out and purchased a chain of Texas hospitals—Texas assets—from a Texas
company and that were created for that purpose, and the plaintiff’s claims arose from
those contacts. Here, there is no allegation or evidence that Defendants sought out or
obtained Texas assets.
60
[Defendants] are tortiously interfering with that relationship.” The contacts from which
this claim directly arises are the letters from Cadbury’s Wisconsin attorney to Woods
and CQuentia in response to the letter that Meeker sent Cadbury’s three members.
Woods argues that these letters constituted voluntary contacts with CQuentia, a Texas
entity, and Meeker, a Texas resident. Woods also relies on the fact that the letters arose
from Woods’s attempt to take CQuentia’s business from Cadbury. In essence, he
contends that the letters interfered with his relationship with Meeker in order to protect
Cadbury’s relationship with CQuentia and that his claim therefore arises from
Defendants’ contacts with Texas—i.e., the CQ Agreement.
The attorney’s letters were responding to contact by Meeker and CQuentia. On
September 15, 2016, Meeker sent a letter to Woods, Rieder, and Rapee telling them that
“[i]t ha[d] come to [his] attention that there is discord among the [Cadbury]
members . . . [that] may threaten the ability of [Cadbury] to perform its obligations”
under the CQ Agreement, and, accordingly, CQuentia was terminating the agreement.
The letter went on to say that “[n]otwithstanding the foregoing, if any or all of you
would be interested in continuing to work with [CQuentia] under a new arrangement,
we would be interested in receiving your proposal in writing by 5 pm Central time,
September 23, 2016.”
Cadbury’s Wisconsin attorney sent a response informing Meeker that the
conditions for terminating the CQ Agreement had not been met and that Cadbury
would commence legal action if CQuentia failed to honor its obligations under the
61
agreement. Relevant to Woods’s claim, the letter also stated that none of the Cadbury
members—including Woods—could submit a proposal to work with CQuentia
because it would violate the Cadbury Operating Agreement and the Cadbury’s
members’ fiduciary duties to Cadbury. The letter requested that CQuentia notify the
attorney if Woods submitted a proposal in violation of his obligations to Cadbury “as
legal action will be commenced.” The letter further requested that CQuentia “cease
and desist all further contact with Kenny Woods that would be violative of” his
fiduciary duties to Cadbury.
Cadbury’s attorney also sent a letter to Woods. The letter reminded Woods of
his duties to Cadbury, informed him that the other members of Cadbury had learned
that Woods had done or intended to do business with “an active customer of Cadbury,”
and directed him to cease any further unauthorized contact with CQuentia. The letter
cautioned Woods that “[a]ny action undertaken by you in breach of your [fiduciary and
contractual] obligations will lead to legal action being commenced.”
Woods took that letter to CQuentia, and CQuentia’s general counsel replied to
the attorney on Woods’s behalf. In the reply, CQuentia’s attorney asserted that the CQ
Agreement had been properly terminated and that Woods owed no fiduciary or
contractual obligations to Cadbury. According to Woods’s amended petition and
affidavit, Cadbury’s attorney responded to CQuentia with a letter reiterating that the
CQ Agreement and Woods’s obligations to Cadbury both remained in effect and stating
that “[n]otice has been given to CQuentia not to interfere with that relationship.” Based
62
on these letters, Woods’s amended petition asserted that “[b]y now threatening
CQ[uentia] with legal action if it maintains its business relationship and/or contractual
relationship with Woods, Cadbury, Rieder, and Rapee are tortiously interfering with
that relationship.”
Woods relies on the fact that Cadbury’s attorney threatened CQuentia with
litigation if CQuentia did not honor the CQ Agreement and the fact that Cadbury
subsequently sued Woods and Meeker in Wisconsin on claims that assumed the validity
of the CQ Agreement. But Woods’s claim is not based on litigation over the validity
of the CQ Agreement. His claim is based on Defendants’ interference with his separate
relationship with Meeker and CQuentia, which he contends existed prior to and apart
from the CQ Agreement, and their threats to sue him under the Cadbury Operating
Agreement if Woods breached his obligations arising from that agreement. Certainly,
the letters attempted to dissuade Woods and Meeker from taking business from
Cadbury, and the letters have a relationship to the CQ Agreement in that it was Woods’s
allegedly taking CQuentia’s business from Cadbury that constituted Woods’s alleged
breach of duties to Cadbury and thus what prompted the letters. But the letters’ threats
to sue CQuentia for terminating the CQ Agreement do not form the basis of Woods’s
claim; the threats to sue over Woods’s duties to Cadbury do.
The CQ Agreement is not a contact of Rieder and Rapee for purposes of this
particular claim; they are not parties to that agreement, did not sign it in any capacity,
and cannot sue to enforce it in their individual capacities, and the letters did not threaten
63
to sue on it on their behalf. See First Bank, 519 S.W.3d at 102. As for Cadbury, the
existence of the CQ Agreement matters only to the extent that it can be used to show
a motive for Cadbury to prevent Woods and CQuentia from forming a business
relationship. See Faucette v. Chantos, 322 S.W.3d 901, 914–16 (Tex. App.—Houston [14th
Dist.] 2010, no pet.) (setting out the elements for tortious interference with an existing
contract and for tortious interference with prospective contractual relations, which
includes continuing business relations). But that single contract is not enough to show
minimum contacts for Woods’s claim. Unlike the letters themselves—which plainly
state that Woods could not work for CQuentia if doing so would violate his duties to
Cadbury and that Cadbury would sue if CQuentia hired Woods in violation of those
duties—the CQ Agreement will not be the focus of the litigation of the claim. See TV
Azteca, 490 S.W.3d at 52–53. The CQ Agreement (and the fact that it involves a Texas
entity) does not have a substantial connection to the operative facts of Woods’s claim,
and the fact that the agreement is with a Texas entity is merely fortuitous.43
43
To the extent that Woods relies on the argument that some of CQuentia’s
performance of the CQ Agreement was in Texas, there is no allegation or evidence that
Cadbury required or bargained for CQuentia to do so. Contra Citrin Holdings, LLC v.
Minnis, 305 S.W.3d 269, 281 (Tex. App.—Houston [14th Dist.] 2009, no pet.)
(upholding personal jurisdiction for contract claims “arising from a contract specifically
designed to benefit from the skills of a Texas resident who performs contractual
obligations in Texas”). Rather, that was the result of CQuentia’s choosing to locate its
headquarters there. Hanor, 2020 WL 7364659, at *5 (citing Magnolia Gas Co. v. Knight
Equip. & Mfg. Co., 994 S.W.2d 684, 692 (Tex. App.—San Antonio 1998, no pet.),
abrogated on other grounds by BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 n.1
(Tex. 2002)). Under the CQ Agreement, Cadbury was selling and marketing CQuentia’s
lab services, and there was no requirement or expectation for CQuentia to perform
64
As for the fact that the letters were sent to Texas residents and representatives
of a Texas entity, that fact does not meet the standard for purposeful availment because
for Cadbury’s purposes, it did not matter where Meeker and CQuentia’s general counsel
were located. Rather, the fact that the letters were sent to Texas was merely fortuitous
because of Meeker’s and CQuentia’s decision to be located there. See Motor Components,
LLC v. Devon Energy Corp., 338 S.W.3d 198, 205–06 (Tex. App.—Houston [14th Dist.]
2011, no pet.). Further, the letters were sent only in response to contact from Meeker
and from CQuentia’s general counsel. They were not contacts initiated by Cadbury.
We therefore overrule the remainder of Woods’s fifth issue.44
those services in Texas; to the contrary, the contract called for those services to be
performed elsewhere. There is evidence that Cadbury relied on some CQuentia
employees to provide educational materials and technical support, but for Cadbury’s
purposes—and for the purpose of proving Woods’s claims—the location of those
employees was irrelevant. And the evidence indicates that the idea for Cadbury’s and
CQuentia’s contractual relationship arose not from Rieder’s and Rapee’s attempts to
form a relationship with Texas but from Cadbury’s and CQuentia’s desire to make a
profit by targeting Rieder’s and Rapee’s contacts for CQuentia’s services, none of whom
were alleged to be based in Texas.
44
Woods additionally argues that the trial court erred by dismissing his claims
with prejudice, but he raised this argument for the first time in his reply brief. See Myers
v. Branch Banking & Tr. Co., No. 02-19-00080-CV, 2020 WL 1646751, at *4 n.3 (Tex.
App.—Fort Worth Apr. 2, 2020, no pet.) (mem. op.) (stating that an issue raised for the
first time in a reply brief is ordinarily waived). Even if we were to consider this
argument as fairly included in his opening brief, he failed to raise it in the trial court.
See Tex. R. App. P. 33.1; Bridwell v. Mulder, 315 S.W.3d 657, 659–60 (Tex. App.—Dallas
2010, no pet.) (“[E]rror in dismissing a case with prejudice must be presented to the
trial court and cannot be raised for the first time on appeal.”); see also Mann v. Denton
Cty., No. 02-16-00030-CV, 2017 WL 526309, at *5 n.8 (Tex. App.—Fort Worth Feb.
9, 2017, pet. denied) (mem. op.). We therefore do not address it.
65
D. Woods’s Sixth Issue
Because the trial court does not have personal jurisdiction over Defendants for
any of Woods’s claims, we need not address Woods’s sixth issue asserting that interests
of justice and equity do not counsel against the exercise of jurisdiction over Defendants.
V. Severance and Abatement
In Defendants’ third issue, they argue that the declaratory judgment claim
asserted by Meeker on behalf of CQuentia should be severed and abated from the rest
of the lawsuit pending the outcome of the Wisconsin lawsuit. Because the trial court
denied Defendants’ motion to dismiss Intervenors’ claims, it had no reason to consider
Defendants’ request to sever the one claim Meeker brought against Cadbury on behalf
of CQuentia and abate it pending the Wisconsin suit. Because we are dismissing all of
Intervenors’ claims save one, in the interest of judicial economy and in recognition of
the trial court’s wide discretion in managing its docket, see Clanton v. Clark, 639 S.W.2d
929, 931 (Tex. 1982), we decline to order abatement. But we remand that one claim to
the trial court for further proceedings consistent with this opinion and the opinion of
the Texas Supreme Court, including considering any request Defendants may raise there
to abate proceedings during the pendency of the Wisconsin suit.
VI. Conclusion
Having overruled Woods’s fifth, seventh, and eighth issues, and having sustained
Defendants’ first issue and their second issue in part, we affirm the trial court’s order
in part and reverse it in part. We affirm the part of the trial court’s order granting the
66
special appearance as to and dismissing Woods’s claims, and we affirm the part of the
order denying the special appearance as to Meeker’s declaratory judgment claim on
behalf of CQuentia for a declaration with respect to the CQ Agreement. But we reverse
the part of the order overruling Defendants’ special appearance as to all of Intervenors’
remaining claims, and we render judgment dismissing those claims without prejudice.
We remand this case to the trial court for further proceedings on the sole remaining
claim consistent with this opinion and the opinion of the Texas Supreme Court.
/s/ Dabney Bassel
Dabney Bassel
Justice
Delivered: April 22, 2021
67