Nationwide Distribution Services, Inc. v. Robert Jones and Poly Trucking, Inc.

Opinion issued June 9, 2016
In The
Court of Appeals
For The
First District of Texas
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NO. 01-15-00232-CV
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NATIONWIDE DISTRIBUTION SERVICES, INC., Appellant
V.
ROBERT JONES AND POLY TRUCKING, INC., Appellees
On Appeal from the 133rd District Court
Harris County, Texas
Trial Court Case No. 2013-64642
OPINION
This is an interlocutory appeal from the trial court’s denial of a special
appearance filed by appellant National Distribution Services, Inc. See TEX. CIV.
PRAC. & REM. CODE § 51.014(a)(7). On appeal, NDS argues that it did not have the
kinds of contact with Texas that would confer specific or general jurisdiction on the
court. It also denies having waived its special appearance.
Because NDS violated the due-order-of-hearing requirement of Rule 120a by
scheduling a hearing and obtaining affirmative relief inconsistent with a challenge
to the court’s jurisdiction, we conclude that it waived its special appearance, and we
affirm the trial court’s order.
Background
National Distribution Services, Inc. is a Tennessee corporation that operated
a warehouse in Roswell, Georgia, under a contract with Kimberly-Clark, a Delaware
corporation. In its capacity as warehouseman, NDS stored Kimberly-Clark’s
products and loaded them onto trucks in Georgia. In February 2012, NDS loaded a
truck owned by Poly Trucking, a Texas corporation with its principal place of
business in Grand Prairie, Texas, located in Dallas and Tarrant Counties. Robert
Jones, a Michigan resident and an employee of Poly Trucking, drove the truck from
Georgia to Harris County, Texas, where, upon unloading, the cargo fell out of the
trailer and struck his head and ankle. Jones was seriously injured and required
several surgeries.
Jones sued NDS in Texas for negligence, alleging that it improperly loaded
the cargo in Georgia. He also sued Kimberly-Clark. Poly Trucking intervened,
claiming that it was entitled to subrogation from the other defendants as a non-
2
subscriber to Texas Worker’s Compensation Insurance which had paid benefits to
Jones. The merits of the claim against the other defendants and Poly Trucking’s
subrogation claims are not relevant to the disposition of the procedural issues in this
appeal.
In March 2014, NDS filed a special appearance, a motion to dismiss for lack
of personal jurisdiction, and an original answer. In August 2014, it served
interrogatories and requests for production to Jones and to Poly Trucking. In
particular, NDS sought production of driver’s logs and vehicle inspections for the
two weeks immediately preceding the incident. In late October 2014, NDS filed
motions to compel Jones to provide more complete answers to interrogatories and to
compel Poly Trucking to produce the driver’s logs and vehicle-inspection reports for
the truck. In addition, NDS and its codefendants filed a joint motion for continuance
of the expert-designation deadline.
The trial court held a hearing in November 2014 on NDS’s motions to compel
and the motion for continuance. At that time, the case was set for trial in February
2015. With respect to the motion to compel, NDS argued that it needed the driver’s
logs, vehicle-inspection reports, and additional information from the plaintiff to
defend itself at trial. NDS also argued that because the case involved “a loading
incident,” “what was going on for that period of time while [Jones] was in transit,”
including “where he stopped” and “how long he stopped,” was “entirely relevant”
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to its defense. The trial court granted the motion to compel production of the driver’s
logs and vehicle-inspection reports.
As to the motion for continuance of the expert-designation deadline, NDS
argued that it would be difficult to meet the deadline without having taken the
plaintiff’s deposition, which, at that time, was set for mid-December 2014. Although
NDS had designated liability and damages experts “out of an abundance of caution,”
it argued that it might need to supplement or amend its designations based on Jones’s
deposition testimony. The trial court asked the parties to confer about scheduling,
and after the hearing a new docket control order extended the deadline for
designating experts by about two months and reset the case for trial in May 2015.
On February 6, 2015, NDS filed a notice that its special appearance would be
heard on February 23, 2015. Jones responded that NDS had waived its special
appearance by filing motions to compel discovery on issues relating to the merits of
his claim and by asserting that it planned to proceed to trial. Jones also argued that
NDS had minimum contacts with Texas sufficient to support both specific and
general jurisdiction. The trial court denied the motion to dismiss, and NDS filed this
interlocutory appeal.
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Analysis
On appeal, NDS contends that the trial court lacked general or specific
jurisdiction over it, and that it did not waive its right to contest jurisdiction. Because
it is dispositive, we address the waiver issue.
Jones and Poly Trucking argue that NDS waived its special appearance
because filing, setting for submission, and obtaining a ruling on a motion to compel
discovery on the merits of the case prior to obtaining a ruling on its special
appearance violated the due-order-of-hearing requirement of Rule 120a(2).
NDS argues that it did not waive its special appearance because Rule 120a
specifically provides that the “issuance of process for witnesses, the taking of
depositions, the serving of requests for admissions, and the use of discovery
processes, shall not constitute a waiver of such special appearance.” TEX. R. CIV.
P. 120a(1). It further argues that a motion is not a “plea or pleading,” and therefore
its motions to compel production did not violate the due-order-of-hearing rule. TEX.
R. CIV. P. 120a(2).
“To render a binding judgment, a court must have both subject matter
jurisdiction over the controversy and personal jurisdiction over the parties.” Spir Star
AG v. Kimich, 310 S.W.3d 868, 871 (Tex. 2010) (citing CSR Ltd. v. Link, 925 S.W.2d
591, 594 (Tex. 1996)). A party may challenge a trial court’s jurisdiction over it by
filing a special appearance—a sworn motion asserting that the court lacks
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jurisdiction—which may be filed without the movant submitting to the court’s
jurisdiction. See TEX. R. CIV. P. 120a(1). A defendant that does not strictly comply
with the procedural requirements of Rule 120a, including the due-order-of-pleading
and due-order-of-hearing requirements, waives its jurisdictional challenge and
enters a general appearance. See id. A defendant also waives a special appearance
and “enters a general appearance when it (1) invokes the judgment of the court on
any question other than the court’s jurisdiction, (2) recognizes by its acts that an
action is properly pending, or (3) seeks affirmative action from the court.” Exito
Elecs. Co., Ltd. v. Trejo, 142 S.W.3d 302, 304 (Tex. 2004) (citing Dawson-Austin v.
Austin, 968 S.W.2d 319, 322 (Tex. 1998)).
Rule 120a specifies a due order of hearing, which requires a specially
appearing party to ensure that his special appearance is heard and determined before
he obtains a ruling on a motion to transfer venue or any other plea or pleading. The
rule provides:
Any motion to challenge the jurisdiction provided for herein shall be
heard and determined before a motion to transfer venue or any other
plea or pleading may be heard. No determination of any issue of fact in
connection with the objection to jurisdiction is a determination of the
merits of the case or any aspect thereof.
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TEX. R. CIV. P. 120a(2).1 A specially appearing party will not waive the jurisdictional
challenge by seeking affirmative relief consistent with the special appearance. See
Dawson-Austin, 968 S.W.2d at 323. But if it obtains a hearing on a matter seeking
affirmative relief inconsistent with a special appearance before obtaining a ruling on
the special appearance, it has entered a general appearance and waived any challenge
to personal jurisdiction. See Trenz v. Peter Paul Petroleum Co., 388 S.W.3d 796,
803 (Tex. App.—Houston [1st Dist.] 2012, no pet.).
In Trenz v. Peter Paul Petroleum Co., 388 S.W.3d 796 (Tex. App.—Houston
[1st Dist.] 2012, no pet.), the defendant filed a special appearance, and the trial court
held a hearing without immediately issuing a ruling. Id. at 801. The defendant
subsequently obtained a ruling on a motion for summary judgment, and the case was
continued many times over several years. Id. at 801–02. Over six years after the
hearing on the special appearance, and three days before a final trial setting, the court
overruled the defendant’s special appearance. Id. at 802.
1
Rule 120a also specifies a due order of pleading, which requires that a
specially appearing party file the special appearance before filing a motion to
transfer venue or any other plea, pleading, or motion. TEX. R. CIV. P. 120a(1).
That rule further provides that “[t]he issuance of process for witnesses, the
taking of depositions, the serving of requests for admissions, and the use of
discovery processes, shall not constitute a waiver of such special appearance.”
Id. In this case, NDS filed motions to compel discovery from the plaintiff and
a codefendant. There is no dispute about the timing of the filing of the motions
relative to the special appearance. All parties agree that the special appearance
was filed before the discovery motions, and therefore no due-order-of-
pleading issue is presented by this appeal.
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On appeal, the plaintiff argued that the defendant had violated the due-order-
of-hearing requirement by obtaining a hearing on his motion for summary judgment
before obtaining a ruling on his special appearance. See id. at 802–03. The defendant
conceded that he had sought affirmative relief inconsistent with his assertion that the
trial court lacked jurisdiction, and he did not argue that the hearings were
“inextricably intertwined with, or otherwise related to, his special appearance.” Id.
at 803. Rather, the defendant asserted that there was no waiver because the court
impliedly ruled on his special appearance at the time of the hearing. Id. This court
rejected that argument, holding that the defendant had waived his special appearance
by continuing to prosecute the litigation while failing to obtain a ruling on his special
appearance until six years after the hearing. Id.
In this case, NDS filed motions to compel discovery that sought production
of driver’s logs and vehicle-inspection reports for the two weeks immediately
preceding Jones’s injury. Poly Trucking had objected to these discovery requests,
refusing to provide the requested records. NDS also sought to compel interrogatory
answers from Jones. It argued that the information it sought was necessary to defend
itself on the merits of the case at trial. NDS also filed a motion for continuance of
the expert-designation deadlines.
At the hearing on these discovery motions in November 2014, counsel for
NDS emphasized that the case was set for trial in February 2015 to show how much
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preparation—and how little time—remained. Cognizant that the trial court did not
want the trial postponed until the following summer, counsel for NDS said: “that’s
another reason why we’re here because we figured that by bringing this up to the
Court now in November . . . . we’d have a better chance of getting another trial
setting that’s closer to the February one . . . .” Counsel did not mention the pending
special appearance or any jurisdictional challenge.
NDS, the specially appearing party, was the party that set the motions to
compel, the motion for continuance, and its special appearance for hearings. As such,
it was NDS that elected to have its motion to compel heard before its special
appearance. See Trenz, 388 S.W.3d at 803 (specially appearing party has the burden
obtain a ruling on its special appearance in compliance with Rule 120a). On appeal,
NDS concedes that the evidence it sought in its motions to compel was relevant only
to the merits of the case, not the jurisdictional dispute.
Under the governing authorities of the Supreme Court of Texas, NDS has
failed to show that its discovery litigation actions were consistent with its
jurisdictional challenge under the specific facts of this case. In Dawson-Austin v.
Austin, 968 S.W.2d 319 (Tex. 1998), the Supreme Court considered whether, under
the particular facts of a divorce case, the specially appearing defendant’s actions
were consistent with the jurisdictional challenge. Dawson-Austin, 968 S.W.2d at
322. The wife had filed for divorce in California, while the husband had filed for
9
divorce in Texas. Id. at 321. In Texas the wife filed a special appearance, a motion
to quash service of citation, a plea to the jurisdiction, a plea in abatement, and an
original answer. Id. The husband set her motion and pleas for hearing, arguing that
he needed a ruling on these matters in order to protect his interests in the California
lawsuit. Id. at 323. After the wife moved for a continuance of the hearing, which the
trial court denied, the husband argued that the wife had violated the due-order-of
hearing requirement by obtaining a ruling on her motion for continuance. Id.
The Supreme Court explained that under the specific facts of that case, the
wife’s motion for continuance was not a general appearance. Id. at 324. Because the
wife “was entitled to request more time to prepare for the special appearance hearing
that [the husband] set,” her motion for continuance of the hearing was not unrelated
to the jurisdictional question. Id.
In Exito Electronics Co. v. Trejo, 142 S.W.3d 302 (Tex. 2004), the Supreme
Court held that a defendant did not waive its special appearance by obtaining an
order compelling production of jurisdictional discovery before obtaining a ruling on
its special appearance. Trejo, 142 S.W.3d at 306. In doing so, the Court applied the
Dawson-Austin framework and held that participating in the resolution of a
discovery dispute that pertains to the very issue at the center of the special
appearance “does not amount to a recognition that the action is properly pending or
a request for affirmative relief inconsistent with the jurisdictional challenge.” Id. at
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306–07. However, the Court also noted that it was “undisputed that the discovery”
in that case “concerned Exito’s special appearance.” Id. at 306 n.24. The Court
“express[ed] no opinion on the effect of parties’ participation in discovery that is
unrelated to the special appearance before its resolution.” Id.
By contrast, in this case there is no dispute that both the motion to compel
discovery and the motion for continuance of expert designation deadlines solely
concerned litigating the merits of the case and not the jurisdictional issue. NDS
argues on appeal that these motions were merely a contingency in the event that the
court denied the special appearance. But NDS elected to set the motion to compel
discovery as well as the motion for continuance of expert designation deadlines for
hearings prior to setting a hearing for its previously filed special appearance. And it
has not explained why it required a ruling on its motion to compel merits-based
discovery before it obtained a ruling on the special appearance or how the election
to obtain a ruling on merits-based discovery before obtaining a jurisdictional ruling
is consistent with its special appearance.
Instead, NDS contends that because its motion implicated discovery, the text
of Rule 120a provided a safe harbor protecting it from waiver of its special
appearance. Among other things, Rule 120a(1) states that the “issuance of process
for witnesses, the taking of depositions, the serving of requests for admissions, and
the use of discovery processes, shall not constitute a waiver of such special
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appearance.” TEX. R. CIV. P. 120a(1). The rule does not define “discovery
processes.”
In Silbaugh v. Ramirez, 126 S.W.3d 88 (Tex. App.—Houston [1st Dist.] 2002,
no pet.), a defendant sought protection from merits-based discovery by filing a
motion to quash a codefendant’s deposition and a motion for protection from the
plaintiff’s discovery requests. Silbaugh, 126 S.W.3d at 93. The defendant set her
motion for protection for submission, although the court never heard it or ruled on
it. Id. The plaintiff argued that the defendant waived her special appearance by
setting her motion for hearing. Id. This court held that the plaintiff did not waive her
special appearance because “the discovery process includes timely objections to
discovery and does not require a defendant to choose between waiving discovery
objections and waiving her special appearance,” and the defendant’s actions in
defending against merits-based discovery were “part of the discovery process.” Id.
Likewise, in Hotel Partners v. Craig, 993 S.W.2d 116 (Tex. App.—Dallas 1994,
pet. denied), the Dallas Court of Appeals held that a defendant’s filing of a motion
for a protective order in response to the plaintiffs’ motion to compel production was
“a proper use of the discovery process” and was “not a waiver of a previously filed
special appearance.” Hotel Partners, 993 S.W.2d at 123.
In Case v. Grammar, 31 S.W.3d 304 (Tex. App.—San Antonio 2000),
abrogated on other grounds by BMC Software Belgium, N.V. v. Marchand, 83
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S.W.3d 789 (Tex. 2002), several defendants participated in a deposition and filed
motions to compel answers to interrogatories and responses to requests for
production which pertained to both the merits of the case and the jurisdictional issue.
Case, 31 S.W.3d at 310–11. The motions were not heard, id. at 311, and the trial
court denied the special appearances. Id. at 307. The San Antonio Court of Appeals
held that the defendants did not waive their special appearance because Rule 120a
states that use of discovery processes is not waiver, and it “specifically contemplates
ongoing discovery by both the party challenging jurisdiction and the party invoking
it.” Id. at 311. In a subsequent opinion, the San Antonio Court of Appeals held that
participation at a hearing on a motion for default judgment, which was based on
discovery abuse, was also part of the discovery process and did not waive the special
appearance. Carone v. Retamco Operating, Inc., 138 S.W.3d 1, 9 (Tex. App.—San
Antonio 2004, pet. denied).
The foregoing cases involved defendants engaging in discovery in some way
that was consistent with a pending jurisdictional challenge, and therefore they are
factually distinguishable from this case. The case law shows that a specially
appearing party does not waive its jurisdictional challenge by: (1) serving
nonjurisdictional discovery requests;2 (2) filing a motion to compel nonjurisdictional
2
Horowitz v. Berger, 377 S.W.3d 115, 124 (Tex. App.—Houston [14th Dist.]
2012, no pet.); Silbaugh v. Ramirez, 126 S.W.3d 88, 93 (Tex. App.—Houston
[1st Dist.] 2002, no pet.).
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discovery but not scheduling a hearing or obtaining a ruling on such motion;3
(3) litigating a jurisdictional discovery dispute;4 (4) litigating other disputes that are
factually related to the special appearance;5 or (5) litigating opposition to merits-
based discovery sought by another party.6 To the extent each of these examples
involved a defendant’s “use of discovery processes,” none of them also involved a
violation of the due order of pleading.
NDS relies on cases involving compelled discovery from a specially
appearing party, but to no avail. Merits-based discovery should not be compelled
from a specially appearing defendant before ruling on the jurisdictional challenge.
See, e.g., In re Stern, 321 S.W.3d 828, 840–41 (Tex. App.—Houston [1st Dist.]
2010, no pet.) (motion to compel sought information that “far exceeded discovery
of jurisdictional facts”); see also IRN Realty Corp. v. Hernandez, 300 S.W.3d 900,
3
Horowitz, 377 S.W.3d at 124; Silbaugh, 126 S.W.3d at 93.
4
Exito Electronics Co., Ltd. v. Trejo, 142 S.W.3d 302, 304 (Tex. 2004).
5
First Oil PLC v. ATP Oil & Gas Corp., 264 S.W.3d at 767, 776–78 (Tex.
App.—Houston [1st Dist.] 2008, pet. denied).
6
Forest River, Inc. v. Quality Frames, Inc., No. 01-04-01038-CV, 2005 WL
615424, at *1–2 (Tex. App.—Houston [1st Dist.] Mar. 17, 2005, no pet.)
(mem. op.) (moving to quash deposition of specially appearing party’s
corporate representative does not waive special appearance); Gutierrez v.
Cayman Islands Firm of Deloitte & Touche, 100 S.W.3d 261, 267 (Tex.
App.—San Antonio 2002, pet. dism’d) (filing petition for writ of mandamus
opposing an order compelling discovery does not waive special appearance).
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902–03 (Tex. App.—Eastland 2009, no pet.) (holding that plaintiff was not entitled
to order compelling merits-based discovery before the trial court ruled on special
appearance). In such cases, it has been the plaintiff seeking an order from the court
to compel discovery on the merits, and plaintiffs in that circumstance do not contend
that the court lacks jurisdiction over the case. See Stern, 321 S.W.3d at 840–41; IRN
Realty Corp., 300 S.W.3d at 901–02.
In this case, NDS did not waive its special appearance merely by participating
in discovery processes. See Silbaugh, 126 S.W.3d at 93–94. It waived its special
appearance by obtaining affirmative relief from the trial court that was entirely
unrelated to the jurisdictional challenge. See Trejo, 142 S.W.3d at 306; Dawson-
Austin, 968 S.W.2d at 322. This was inconsistent with its claim that the court lacked
personal jurisdiction, and it was a violation of Rule 120a’s due-order-of-hearing
requirement. See TEX. R. CIV. P. 120a(2).
Conclusion
We conclude that NDS violated the due-order-of-hearing requirement of
Rule 120a(2) and that it waived its special appearance. In light of this conclusion,
we hold that the trial court did not err by denying it. Because we have found that
NDS waived its special appearance, it is not necessary for us to address NDS’s other
appellate issues. See TEX. R. APP. P. 47.1.
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We affirm the interlocutory ruling of the trial court.
Michael Massengale
Justice
Panel consists of Justices Keyes, Massengale, and Lloyd.
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