John Kevin Munz and Unimaginable Ventures, LLC v. Craig Schreiber

Affirmed and Memorandum Opinion filed April 23, 2019.
In The
Fourteenth Court of Appeals
NO. 14-17-00687-CV
JOHN KEVIN MUNZ AND UNIMAGINABLE VENTURES, LLC,
Appellants
V.
CRAIG SCHREIBER, Appellee
On Appeal from the 215th District Court
Harris County, Texas
Trial Court Cause No. 2016-81111
MEMORANDUM OPINION
Appellants John Kevin Munz (Munz) and Unimaginable Ventures, LLC
(UV) appeal the trial court’s order granting the special appearance of appellee
Craig Schreiber. Tex. Civ. Prac. & Rem. Code § 51.014(a)(7). Munz and UV
challenge the trial court’s order by arguing that: (1) the trial court erred in granting
the special appearance because it was not verified and thus did not comply with
Texas Rule of Civil Procedure 120a; (2) Schreiber did not negate all alleged
jurisdictional bases such that the exercise of personal jurisdiction would offend
traditional notions of fair play and substantial justice; and (3) the trial court erred
in denying their request for a continuance to obtain jurisdictional discovery.
We conclude the trial court did not err in granting the special appearance.
Schreiber attached an affidavit verifying the material facts of his special
appearance, thus satisfying Rule 120a. We also conclude that Schreiber
sufficiently negated the bases alleged for personal jurisdiction over him and that he
did not purposefully avail himself of the privileges and benefits of the state of
Texas for purposes of exercising personal jurisdiction. Finally, we conclude that
Munz and UV have not established a clear abuse of discretion based on the denial
of a continuance for additional discovery. We, therefore, affirm the trial court’s
order granting Schreiber’s special appearance.
BACKGROUND
Munz resides in Houston and is the manager of UV, a Texas corporation
with its principal office located in Harris County. Munz and UV allege in their
live petition that on July 27, 2015, Munz contracted by mail or otherwise for the
manufacture of a custom advertising truck with defendant Dynamic Mobile Media,
L.L.C. (DMM). DMM is a foreign limited liability corporation organized under
the laws of Nevada with its principal office located in Wisconsin. The contract
with DMM provided that Munz would purchase and deliver to DMM at its
manufacturing facility in Nevada a 14-foot box truck for a custom buildout. DMM
would then design, among other things, a metal framework used to mount on the
truck a folding LED screen measuring 8 feet 10 inches by 32 feet. The parties
agreed to a purchase price of $142,180, with a fifty percent deposit due at the time
of contract and the remaining fifty percent due five days before pick-up of the
truck. The contract provided that the modified truck would be available for pick-
2
up on or before October 9, 2015. The contract also provided that the truck could
be optionally delivered by a professional driver to the buyer’s location. Munz and
UV pleaded that Munz paid a fee to have the custom build expedited and that
DMM promised to deliver the truck to Munz in Houston.
Munz and UV further allege that DMM’s representative Peter Fischer, a
Wisconsin resident, made several representations to Munz prior to and after the
contract was executed. Fischer stated to Munz that DMM’s manufacturing
facilities were located in Las Vegas, that DMM operated in Las Vegas and
Wisconsin, that Schreiber was Fischer’s “partner and engineer,” that Fischer would
advertise the custom truck within a “600 mile radius of Houston,” and that
construction of the custom truck would commence upon delivery of the box truck
to the DMM facility in Nevada. According to Munz and UV, Schreiber
participated in the discussions between Fischer and Munz and affirmed Fischer’s
representations regarding DMM’s manufacture of the truck, time schedules, and
technical capabilities, and stated that Schreiber and Fischer had their own
manufacturing facility in China. Schreiber averred that all of his communications
with Munz “were either initiated by [Munz] by phone or electronically, or were in
response to his communications by phone or electronically.” Based on the
representations, Munz opened a line of credit with Spirit Bank of Texas, formed
UV, purchased and delivered a box truck to DMM in Nevada, and wired money
from the bank in Texas to Nevada for the deposit. Payment was made by Munz to
Fischer or DMM and Schreiber received no payment from Munz.
The truck was not completed by the time stated in the contract. Munz began
inquiring about the status of the truck with Fischer on September 10, 2015.
Fischer stated that the truck was not complete but promised to provide pictures of
the truck on October 9, 2015. Munz and UV allege that over the next nine months,
3
from October 10, 2015 until July of 2016, the truck remained unfinished despite
repeated inquiries from Munz and multiple promises by Fischer, Schreiber, and
DMM representative Kerry Horne, a resident of Canada, that the truck would be
complete soon.
Almost a full year after executing the contract for the custom build, on July
11, 2016, Munz travelled to Las Vegas to investigate the status of the truck in
person. When he arrived, he was told that the truck was still not complete nor
ready for delivery, but he observed the truck parked on a nearby street. Munz then
entered the cab of the truck and proceeded to drive it away. Munz alleges that
Schreiber pursued Munz in his own vehicle and ultimately collided his vehicle
with the truck being driven by Munz, resulting in injuries to Munz. After the
collision, Schreiber drove the truck back to a fenced area. The truck was never
completed, despite payment of the deposit, nor was the uncompleted truck returned
to Munz and UV. They allege Schreiber stripped the truck of all custom LED
equipment and it remains stripped to a mere cab and chassis in Nevada.1
Munz and UV filed the underlying suit against DMM, Fischer, Horne, and
Schreiber, asserting claims against all defendants for violations of the Texas
Deceptive Trade Practices Act, breach of contract, fraud, negligent
misrepresentation, and “money had and received/unjust enrichment.” Munz and
UV also asserted claims against Schreiber for assault and conversion. Munz and
UV asserted liability against Schreiber, Fischer, and Horne as officers or partners
of DMM, and as part of a conspiracy. The petition states that the trial court has
jurisdiction over the defendants because they: (1) engaged in business in Texas by
contracting with a Texas resident that was to be performed in whole or in part in
Texas; (2) committed a tort in whole or in part in Texas; and (3) purposefully
1
Munz averred that Schreiber claims a mechanic’s lien against the vehicle.
4
availed themselves of the privileges and benefits of conducting business in Texas.
Schreiber filed a special appearance seeking dismissal from the lawsuit for
lack of personal jurisdiction. Although the motion was not verified, Schreiber
attached an affidavit swearing to facts disputing the alleged bases of jurisdiction.
Schreiber averred, among other things, that he is a resident of Las Vegas, Nevada,
never owned, operated or worked at a business in Texas, owns no real estate or
bank accounts in Texas, has no agents, employees, or sales representatives in
Texas, is not obligated to pay taxes in Texas, and has never travelled to Texas in
pursuit of the work contracted for by Munz. Munz and UV filed an objection and
response to the special appearance, attaching an affidavit from Munz.2 After an
oral hearing, at which Schreiber appeared telephonically, the trial court granted the
special appearance, dismissing Schreiber from the lawsuit. The trial court issued
no findings of fact or conclusions of law and no findings or conclusions were
requested. This appeal followed.
ANALYSIS
Munz and UV list the following issues in their briefing: (1) whether
Schreiber’s special appearance complied with Rule 120a; (2) whether the trial
court committed error by sustaining Appellee’s special appearance; (3) whether
Schreiber negated all alleged jurisdictional bases set out in the Original Petition by
presenting sufficient evidence that he had no minimum contacts with Texas; (4)
whether Schreiber negated all alleged jurisdictional bases set out in the Original
Petition by presenting sufficient evidence that, even if he had contacts with Texas,
the exercise of jurisdiction would offend traditional notions of fair play and
2
In their response to the special appearance, Munz and UV made various objections and
a motion for continuance to conduct jurisdictional discovery. The record contains no ruling on
the objections or request for a continuance.
5
substantial justice; (5) if Schreiber negated all alleged jurisdictional bases set out in
the Original Petition, whether Munz and UV showed that the court had jurisdiction
over Schreiber when the burden shifted; and (6) whether the trial court’s denial of
Munz and UV’s request for a continuance to obtain jurisdictional discovery was
harmful error. We first address Munz and UV’s challenge to the trial court’s order
based on their argument that Schreiber’s special appearance did not comply with
Rule 120a because it was not verified. We next address issues two through five
together as they address the merits of whether the trial court properly determined
that personal jurisdiction over Schreiber is lacking. We then turn to issue six
regarding the denial of a continuance to conduct jurisdictional discovery.
I. The lack of a verification on the special appearance is not fatal because
Schreiber’s affidavit is sufficient.
Texas Rule of Civil Procedure 120a provides that a special appearance may
be made by a party for the purpose of objecting to the exercise of jurisdiction of
the court over the person or property of the party and that “[s]uch special
appearance shall be made by sworn motion filed prior to motion to transfer venue
or any other plea, pleading or motion. . ..” Tex. R. Civ. P. 120a(1). Schreiber filed
his special appearance before any other plea, pleading, or motion, asserting that
Texas courts lack personal jurisdiction over him. Schreiber did not verify his
special appearance, but he supported each of the factual statements in the special
appearance with a citation to his attached affidavit that in turn averred to the facts
contained in the special appearance.
Citing Casino Magic Corp. v. King, Munz and UV argue that the trial court
erred in finding a lack of personal jurisdiction because Schreiber did not verify the
special appearance. 43 S.W.3d 14, 18 (Tex. App.—Dallas 2001, pet. denied) (sub.
op.). In Casino Magic Corp., the court held that the special appearance in that case
6
was defective because it was unverified and contained several jurisdictional facts
that the witness did not attest to in the attached affidavit. Id. In Washington DC
Party Shuttle, LLC v. IGuide Tours, we found Casino Magic Corp. distinguishable
where the affidavit attached to an unverified special appearance contained
averments of each of the relevant jurisdictional facts stated in the special
appearance. 406 S.W.3d 723, 730–31 (Tex. App.—Houston [14th Dist.] 2013, pet.
denied). As in Washington DC Party Shuttle, Schreiber’s affidavit in this case
attests to the relevant jurisdictional facts set forth in the special appearance. On
appeal, Munz and UV do not identify any jurisdictional fact stated in Schreiber’s
special appearance that is not repeated and sworn to by Schreiber in his affidavit.
We therefore conclude that Schreiber’s affidavit sufficiently verified the special
appearance.3 Id. at 731.
Munz and UV also argue Schreiber’s affidavit is insufficient for failure to
include an unequivocal statement that the facts are “true and correct” or based on
personal knowledge. In Humphreys v. Caldwell, the Supreme Court of Texas
explained that “[a]n affidavit which does not positively and unqualifiedly represent
the facts as disclosed in the affidavit to be true and within the affiant’s personal
knowledge is legally insufficient.” 888 S.W.2d 469, 470 (Tex. 1994) (per curiam)
(orig. proceeding). The affidavit at issue in Humphreys stated the affiant’s
statements were made on his “own personal knowledge and/or knowledge which
he has been able to acquire upon inquiry.” Id. The Court held the statement failed
to “unequivocally show that they are based on personal knowledge.” Id. The
3
Munz and UV also cite Villalpando v. De La Garza, 793 S.W.2d 274, 276 (Tex. App.—
Corpus Christi 1990, no writ) in support of their contention that the lack of a verification renders
the special appearance defective. We likewise find Villalpando distinguishable. In that case, the
defendant filed an unsworn special appearance and failed to present any evidence negating
jurisdiction. See Villalpando, 793 S.W.2d at 276. In this case, Schreiber attached his sworn
affidavit setting forth the facts referenced in his special appearance.
7
affidavit was also insufficient because it contained no representation at all that the
facts disclosed in the affidavit were true. Id. at 470–71.
Schreiber’s affidavit in this case contains the following statements:
I am over 18 years of age and not under any restraint or legal
disability, am competent to testify to the matters state [sic] herein, and
make this affidavit based upon my own personal knowledge and
observations.
* * *
I declare under penalty of perjury under the laws of the United States
that the foregoing is true and correct and if sworn as a witness, I could
and would testify competently thereto.
The Schreiber affidavit is sworn and notarized. Unlike the affidavit found
insufficient in Humphreys, Schreiber’s affidavit is not qualified. It contains no
“and/or” language and unqualifiedly attests that the statements made are based on
his personal knowledge and observations. Further, the affidavit declares that the
“foregoing” is “true and correct.” The affidavit is legally sufficient. See Teal v.
State, 230 S.W.3d 427, 431–32 (Tex. App.—San Antonio 2007, pet. denied).
We overrule Munz and UV’s first issue.
II. Texas courts lack personal jurisdiction over Schreiber.
In issues two through five, Munz and UV contend the trial court erred in
granting Schreiber’s special appearance because Schreiber had sufficient minimum
contacts with Texas to permit the assertion of personal jurisdiction. We have
reviewed the record and conclude the trial court correctly determined that Texas
courts lack personal jurisdiction over Schreiber for the claims asserted in this
lawsuit.
8
A. Standards of review
A trial court’s determination of whether it may exercise personal jurisdiction
over a party is a question of law that we review de novo. See Moncrief Oil Int’l
Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013). When, as in this case,
the trial court does not issue findings of fact and conclusions of law, all relevant
facts that are necessary to support the judgment and supported by the evidence are
implied in favor of the trial court’s ruling. BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 795 (Tex. 2002). Because our appellate record
includes the reporter’s record and clerk’s record, the trial court’s implied findings
are not conclusive and may be challenged for legal and factual sufficiency. See id.;
Washington DC Party Shuttle, 406 S.W.3d at 729.
We review the trial court’s implied factual findings by applying the same
standards used in reviewing jury findings. Washington DC Party Shuttle, 406
S.W.3d at 729. When reviewing for legal sufficiency, we view the evidence in the
light most favorable to the finding and indulge all reasonable inferences supporting
the finding. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2006). We
credit favorable evidence if a reasonable factfinder could and disregard contrary
evidence unless a reasonable factfinder could not. Id. In reviewing for factual
sufficiency of the implied findings, we consider all the evidence and will set aside
a finding only if the finding is so against the great weight and preponderance of the
evidence as to be clearly wrong and unjust. Washington DC Party Shuttle, 406
S.W.3d at 729. “The factfinder is the sole judge of the credibility of the witnesses
and the weight of their testimony.” Id. We review conclusions of law de novo. Id.
B. Law applicable to the assertion of personal jurisdiction
The exercise of personal jurisdiction over a nonresident defendant is
permitted when: (1) the Texas long-arm statute grants jurisdiction; and (2) federal
9
and state constitutional guarantees of due process are satisfied. See Searcy v.
Parex Res., Inc., 496 S.W.3d 58, 66 (Tex. 2016). The Texas long-arm statute
provides that a nonresident does business in this state if the nonresident contracts
by mail or otherwise with a Texas resident and the contract is to be performed in
whole or in part in Texas or if a nonresident commits a tort in whole or in part in
this state. Tex. Civ. Prac. & Rem. Code § 17.042(1), (2). The plaintiff is required
to first plead allegations sufficient to confer jurisdiction under the long-arm statute.
See Moncrief Oil Int’l, Inc., 414 S.W.3d at 149. The burden then shifts to the
nonresident defendant to negate all potential bases pleaded for personal
jurisdiction. Kelly v. Gen. Interior Const., Inc., 301 S.W.3d 653, 658 (Tex. 2010).
If the plaintiff does not plead facts bringing the defendant within reach of the long-
arm statute, “the defendant need only prove that it does not live in Texas to negate
jurisdiction.” Id. at 658–59.
Federal and state constitutional guarantees of due process are satisfied if the
defendant has established minimum contacts with the state such that the assertion
of jurisdiction does not offend “traditional notions of fair play and substantial
justice.” See Searcy, 496 S.W.3d at 66 (citing Int’l Shoe Co. v. Washington, 236
U.S. 310, 316 (1945)); see also Old Republic Nat’l Title Ins. Co. v. Bell, 549
S.W.3d 550, 559 (Tex. 2018). Minimum contacts exist when a nonresident
“‘purposefully avails itself of the privilege of conducting activities within the
forum state, thus invoking the benefits and protections of its laws.’” Bell, 549
S.W.3d at 559 (quoting Retamco Operating, Inc. v. Republic Drilling Co., 278
S.W.3d 333, 338 (Tex. 2009)). Courts consider three factors to determine whether
a nonresident has purposefully availed itself of the privilege of conducting business
in Texas: (1) whether the defendant’s contacts are its own, rather than the
unilateral activity of another party or third person; (2) whether the contacts are
10
purposeful, rather than random, fortuitous, or attenuated; and (3) whether the
defendant sought some benefit, advantage, or profit by availing itself of Texas.
See Bell, 549 S.W.3d at 559; Washington DC Party Shuttle, 406 S.W.3d at 728.
Minimum contacts with a forum may give rise to either general or specific
jurisdiction. Searcy, 496 S.W.3d at 67. In this case, Munz and UV have not
pleaded or alleged in response to the special appearance4 that Schreiber has
continuous or systematic contacts with Texas sufficient to subject him to general
jurisdiction. Thus, we assess whether Schreiber has sufficient minimum contacts
for the assertion of specific jurisdiction. Specific jurisdiction is proper where the
claims in question arise from or relate to the defendant’s purposeful contacts with
Texas. Kelly, 301 S.W.3d at 658. In determining whether specific jurisdiction
exists, we consider the relationship among the defendant, the forum, and the
litigation. Id. There must be a substantial connection between the defendant’s
contacts with the forum state and the operative facts of the litigation. Moki Mac
River Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007). We perform the
specific jurisdiction analysis on a claim-by-claim basis unless all claims arise from
the same forum contacts. Moncrief, 414 S.W.3d at 150–51. In this case, all of the
claims arise out of the same alleged contacts, with the exception of the claims for
assault and conversion. Munz and UV do not assert on appeal that the contacts
underlying the assault and conversion claims support jurisdiction in Texas, and we
note all actions underlying those claims occurred in Nevada.
4
In determining the bases asserted for personal jurisdiction over a defendant, we consider
the plaintiff’s pleadings as well as the plaintiff’s response to the special appearance. See
Washington DC Party Shuttle, 406 S.W.3d at 738.
11
C. The asserted contacts are insufficient to establish specific jurisdiction.
On appeal, Munz and UV allege that Schreiber made the following contacts
with Texas:
 Schreiber and Fischer were partners of DMM.
 Schreiber promised to perform a contract in whole or in part in Texas;
Schreiber promised to deliver a vehicle to Texas and promised to
purchase a vehicle from Texas.
 Schreiber solicited the sale of, marketed, advertised and sold LED
screens over the internet on a nationwide basis, including Houston,
Texas. This includes use of an interactive website.
 Schreiber directed all communications to Munz and UV by email and
telephone to Houston, Texas.
 Schreiber made misrepresentations to Texas residents.
 Deemed admissions were entered into evidence at the hearing on the
special appearance.
We address each of the alleged contacts and the evidence relevant to those contacts
in turn, bearing in mind that “[j]urisdiction cannot turn on whether a defendant
denies wrongdoing—as virtually all will. Nor can it turn on whether a plaintiff
merely alleges wrongdoing—again as virtually all will.” Bell, 549 S.W.3d at 560
(quoting Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 791 (Tex.
2005)). That is, we do not equate the jurisdictional inquiry with the underlying
merits of the claims. See id.
1. Schreiber and Fischer as partners of DMM
In their petition, Munz and UV pleaded: “In discussions leading up to the
contract, Mr. Fischer represented that DMM’s manufacturing facilities were
located in Las Vegas, Nevada, and that DMM operated its business in Las Vegas
and Kenosha, Wisconsin. In those discussions, Mr. Fischer described Mr.
Schreiber as Mr. Fischer’s ‘partner and engineer’ and that Mr. Fischer told Mr.
12
Munz that he would be ‘very impressed when you see our manufacturing facility in
Las Vegas.’” For purposes of imposing liability, the petition asserts that Schreiber,
Fischer and Horne “represented themselves to be officers and/or partners of
DMM.” Munz’s affidavit attached to his response to the special appearance states
“Mr. Fischer described Mr. Schreiber as Mr. Fischer’s ‘partner and engineer.’”
Munz and UV contend on appeal that the trial court erred because Schreiber failed
to negate personal jurisdiction of the partnership. We disagree.
Munz and UV do not argue that Schreiber himself ever represented that he
and Fischer were partners—instead, they allege only that Fischer described the two
as partners. When assessing a nonresident defendant’s contacts with the state, we
consider only the contacts of the defendant himself rather than actions of another
defendant or third party. See Moncrief, 414 S.W.3d at 151–52 (stating “the
unilateral activity of another person cannot create jurisdiction”); Vinmar Overseas
Singapore PTE Ltd. v. PTT Int’l, 538 S.W.3d 126, 136 (Tex. App.—Houston [14th
Dist.] 2017, pet. denied) (holding that co-defendant’s act in signing agreement that
contained Texas choice of law provision did not support jurisdiction over non-
signatory nonresident). The only statements in the record attributed to Schreiber
himself regarding a purported partnership contest the existence of one. Munz’s
affidavit states: “Mr. Schreiber declared that he was never a partner of Mr. Fischer
or involved with DMM.” Schreiber’s affidavit states: “[n]either Fischer nor
‘DMM’ are related to my businesses in any way.” Munz and UV did not present
documentary evidence demonstrating a partnership or any other legal relationship
between Schreiber and any defendant. Given the evidence, the trial court could
reasonably credit the statements of Schreiber denying a partnership with Fischer or
affiliation with DMM and find that Munz and UV did not establish that Schreiber
was a partner of DMM as alleged. See Wormald v. Villarina, 543 S.W.3d 315, 326
13
(Tex. App.—Houston [14th Dist.] 2017, no pet.) (holding that, given conflicting
evidence of location of defendant’s residence, trial court could credit statement of a
mistake in affidavit and find defendant was not a resident).
2. Promise to perform a contract in whole or in part in Texas
Munz and UV next argue that minimum contacts exist from evidence of
Schreiber’s promise to perform a contract in whole or in part in Texas. Although
Munz and UV alleged in their petition that all defendants, including Schreiber,
breached the July 27, 2015 contract, only Munz and Fischer, on behalf of DMM,
executed the contract. Schreiber is not a party to the agreement. Schreiber states
in his affidavit that he lives and works in Las Vegas, Nevada, he is the principal
officer, director and shareholder of a number of businesses in Nevada that
manufacture LED displays, that he has never sold a product in Texas or had
dealings with any person in Texas for business or personal reasons, he never
received payments from Munz and UV, and that neither Fischer nor DMM are
related to his businesses in any way. Schreiber has thus negated as a basis of
jurisdiction the claim that he entered into the contract made the basis of Munz and
UV’s breach of contract claim.
Even if the contract could somehow be imputed to Schreiber, however, there
is no evidence to support Munz and UV’s allegation that the contract was to be
performed in whole or in part in Texas. Per the terms of the contract, the truck was
to be delivered to Nevada, all of the modifications to the truck would occur at the
facility in Nevada, and the truck would be available for pick-up once completed in
Nevada, unless the purchaser chose delivery by a professional driver to the buyer’s
location. The only evidence of activity under the contract occurring in Texas is the
wiring of funds from Munz from his Texas bank to Nevada for the deposit. But
“the mere act of accepting the transfer of money drawn on a Texas bank is “‘of
14
negligible significance for purposes of determining whether [a foreign defendant]
had sufficient contacts in Texas.’” Bell, 549 S.W.3d at 564 (quoting Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416–17 (1984)).
Munz and UV point to a contractual promise to deliver the completed
vehicle to Texas as evidence the contract was to be completed in whole or in part
in Texas. Although the contract itself states that the ship to location is “to be
determined,” Munz stated in his affidavit that “DMM promised to deliver the
Custom LED Truck to me in Houston, Harris County, Texas.” Schreiber does not
deny or dispute that the truck was to be delivered to Texas. Nevertheless, delivery
of the completed vehicle to Texas does not support the assertion of jurisdiction
because it is the result of Munz’s unilateral choice, rather than a purposeful contact
by Schreiber—who has not been shown to act for DMM. See Michiana Easy
Livin’ Country, 168 S.W.3d at 787. When Texas is the destination of delivery due
to the plaintiff’s unilateral choice, such contact is merely fortuitous and will not
support jurisdiction. See Riverside Exports, Inc. v. B.R. Crane & Equip., LLC, 362
S.W.3d 649, 654 (Tex. App.—Houston [14th Dist.] 2011, pet. denied) (discussing
Michiana).
Munz and UV also contend that the contract was to be performed in whole
or in part in Texas because DMM promised to purchase a car in Texas. They do
not point to a specific provision in the contract to support this argument, but we
presume Munz and UV refer to the statement in the DMM contract that “[i]f Buyer
ever decides they want to sell their truck, Dynamic Mobile Media will guarantee
that it will sell the Buyers Truck within Ninety (90) Days of written notification
and if we cannot sell it within that time frame we will buy it back for the amount
paid less Ten (10%) Percent during the first 12 Months of ownership or less
Fifteen (15%) Percent from 13 Months to 24 Months.” This provision in the
15
contract does not expressly provide that DMM is agreeing to purchase a car in
Texas, as it makes no reference to a place of purchase. To construe it as a promise
to purchase a car in Texas, the trial court would have to presume that the truck
would be in Texas at some specified time in the future when Munz and UV may or
may not decide to sell the truck to a third party or, if none is found, then to DMM.
We conclude this purported contact is too random, fortuitous, or attenuated to
support jurisdiction and would again be the result of unilateral activity of Munz
and UV. See id. The July 27, 2015 contract between Munz and DMM does not
support the assertion of jurisdiction over Schreiber.
3. Soliciting the sale of, marketing, advertising, and selling LED screens on
the internet through interactive website
Munz and UV next point to evidence that Schreiber “solicited the sale of,
market, advertise and sell LED screens over the internet on a nationwide basis,
including Houston, Texas.” Munz averred in his affidavit that Fischer, Horne,
Schreiber and DMM maintain and operate interactive websites allowing buyers of
LED screens, including Munz, to submit comments and questions to them. The
sites include colorledsigns.com, hdav.com, hdavoutdoor.com and seedisplays.com.
Munz further states that the LED signs are available to Texas residents on their
websites. Munz identifies one sale of an LED screen to a person called Mickey in
Houston, Texas, in which Mickey complains of the quality of the LED screen sold
and complains about Schreiber and Fischer. Munz does not, however, state
anywhere that he found DMM through one of these websites or even ordered the
custom truck build from these websites.
Schreiber does not address any websites in his affidavit. He does aver that
he has never solicited business in Texas, has never directly marketed products or
services in Texas, never purchased or sold equipment or parts that originate or
16
have outlets in Texas, never designed a product for the Texas market, advertised in
Texas, established channels for providing regular advice to customers in Texas, or
marketed a product through an agent or distributor in Texas.
Given this evidence the trial court could make an implied finding of fact that
Schreiber did not solicit Munz’s business related to the custom build of the truck,
did not directly market an LED product or service to Munz, and never purchased or
sold parts that originated or had an outlet in Texas for the custom truck. On this
record, Munz and UV have not provided evidence of contacts by Schreiber that
relate to the material, operative facts of the litigation. See Moki Mac, 221 S.W.3d
at 588 (holding that promotional activities in Texas were not sufficiently related to
claims for death occurring in Arizona to satisfy due process concerns).
The trial court also could have found that Schreiber did not have an
established channel for providing regular advice to Munz or Texas, though he
apparently had some part in the websites that allowed customers to communicate
and order LED signs. Although not clearly stated, Munz and UV presumably
contend that Schreiber’s mere use of interactive websites for his LED screens on
the internet allow assertion of jurisdiction anywhere, including Texas. We
disagree. When assessing contacts based on interactive websites, we evaluate the
defendant’s Texas contacts according to a sliding scale similar to that used in
Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa.
1997). See Washington DC Party Shuttle, 406 S.W.3d at 737. At one end of the
scale are passive websites, in which the nonresident defendant has simply posted
information on the website that can be viewed in other jurisdictions. Id. Such
websites do not give rise to personal jurisdiction. Id. On the other end of the scale
are cases in which residents of the forum can enter into contracts with the owner of
the website and show the knowing and repeated transmission of computer files
17
over the internet. Id. In the middle of the scale are cases, like this one, involving
interactive websites that allow an exchange of information with the owner of the
website. Id. Courts in those cases examine the level of interactivity and nature of
the exchange of information to determine whether sufficient contacts exist with the
forum. Id.
In this case, there is evidence that Schreiber is somehow connected to
websites that sell LED screens that allow buyers to submit comments and
questions via email. There is also evidence that one customer in Texas complained
on a different internet forum about Fischer, Schreiber, DMM, and HDAV LLC (a
Nevada company apparently formed by Schreiber) regarding an LED screen,
though it is not clear whether the customer used the interactive website to purchase
the screen. Although a single contact with Texas can, in some cases, suffice to
invoke jurisdiction in Texas,5 in this case the single contact does not relate to the
product purchased by Munz from DMM and does not show a significant level of
activity in Texas by Schreiber. See Moki Mac, 221 S.W.3d at 577 (“Thus, the
mere sale of a product to a Texas resident will not generally suffice to confer
specific jurisdiction upon our courts. Instead, the facts alleged must indicate that
the seller intended to serve the Texas market.”). There is no evidence that Munz
and UV used any of these websites to purchase the custom truck at issue. We
conclude that in this case the “level of interactivity and commercial nature of the
exchange of information” occurring on the websites cited by Munz and UV is
insufficient to establish purposeful availment of the privileges and benefits of
conducting activities in Texas.
5
See Michiana Easy Livin’ Country, 168 S.W.3d at 787 (“It is true that in some
circumstances a single contract may meet the purposeful-availment standard, but not when it
involves a single contact taking place outside the forum state.”) (emphasis in original).
18
4. Directing communications, including alleged misrepresentations, to
Munz by email and telephone
Munz and UV also argue Schreiber has minimum contacts with Texas
sufficient to support jurisdiction based on alleged misrepresentations made in
email and telephone communications. We of course do not consider the merits of
Munz and UV’s claim that Schreiber made misrepresentations in these
communications because to do so would improperly equate “the jurisdictional
inquiry with the underlying merits.” Bell, 549 S.W.3d at 560. Instead, we must
consider the quality and nature of the communications to determine whether they
show purposeful availment by Schreiber.
In Old Republic National Title Insurance Company v. Bell, the Supreme
Court of Texas explained:
When communications between a nonresident and a resident are
alleged as the basis for jurisdiction, we look to the quality and nature
of the communications to establish purposeful availment. . . On their
own, numerous telephone communications with people in Texas do
not establish minimum contacts, and we have noted that changes in
technology may render reliance on phone calls obsolete as proof of
purposeful availment.
549 S.W.3d at 560; see also Riverside Exports, Inc., 362 S.W.3d at 655 (applying
same rationale to email communications); Alenia Spacio, S.p.A. v. Reid, 130
S.W.3d 201, 204 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) (stating
“numerous telephone and facscimile communications with people in Texas relating
to an alleged contract do not establish minimum contacts”). We have noted that
certain communications between the resident plaintiff and nonresident defendant
do not support jurisdiction even when the plaintiff informs the defendant that the
plaintiff is located in Texas. See Vinmar Overseas Singapore, 538 S.W.3d at 134
n.2 (finding unpersuasive fact that plaintiff representative informed defendant that
19
representative was located in Houston because it would allow jurisdiction on the
basis of the unilateral activity of the plaintiff rather than on purposeful contacts of
defendant).
In his affidavit, Munz states that Schreiber directed all his communications
to Munz by email and telephone in Houston, and that he told Schreiber that he was
located in Houston and received emails and telephone calls from them in Texas.
Schreiber states in his affidavit that: “[a]ll communications I was involved with in
this matter that included [Munz] were either initiated by [Munz] by phone or
electronically, or were in response to his communications by phone or
electronically.” Thus, the undisputed evidence shows that any communications by
phone or email were initiated by Munz, rather than Schreiber. When the evidence
shows that the resident plaintiff initiated the communications with the nonresident
defendant, the communications typically do not establish purposeful availment
unless there is evidence of high frequency of contact or intent to create an ongoing
or lengthy relationship. See Peters v. Top Gun Exec. Group, 396 S.W.3d 57, 69
(Tex. App.—Houston [14th Dist.] 2013, no pet.); Riverside Exports, Inc., 362
S.W.3d at 655–56 (concluding court lacked personal jurisdiction when the
resident-buyer “initiate[d] the purchase of equipment outside Texas by contacting a
company outside Texas that does not direct marketing to Texas”). The
communications by telephone and email in response to Munz’s inquiries do not
support jurisdiction over Schreiber.
5. The deemed admissions
At the hearing on the special appearance the trial court admitted into
evidence thirteen deemed admissions resulting from Schreiber’s failure to respond
to a request for admissions. Munz and UV reference the deemed admissions, but
do not point out which of the deemed admissions would support jurisdiction over
20
Schreiber. Rule 38.1(i) of the Texas Rules of Appellate Procedure requires the
appellant’s brief to “contain a clear and concise argument for the contentions
made, with appropriate citations to authorities and to the record.” Tex. R. App. P.
38.1(i). Nevertheless, we have reviewed the admissions and find that for the
majority of the admissions, the evidence provided is either already contained in
Munz’s affidavit and addressed above or is irrelevant.
There are three deemed admissions that are not cumulative of evidence
found in Munz’s affidavit and that are relevant, though we conclude they do not
change the jurisdictional analysis. Those admissions include:
 Admission 3, that Schreiber has “solicited the sale of, sold,
marketed, advertised, and sold LED screens in Texas;”
 Admission 5, that Schreiber has “conducted business with Peter
Fischer in Texas within the last five (5) years;”
 Admission 8, that Schreiber has “conducted business with
Dynamic Mobile Media in Texas within the last (5) years.”
Even assuming the truth of each of the above statements, the statements are so
general that they do not show contacts of Schreiber related to the operative facts of
the litigation. None of the admissions are specific to the sale and construction of
the custom truck by DMM to Munz. As a result, the deemed admissions do not
establish sufficient contacts for purposes of asserting specific jurisdiction over
Schreiber. See Moki Mac, 221 S.W.3d at 579, 588 (holding that, although
defendant’s marketing in Texas and solicitation of Texas customers was sufficient
to show purposeful contact with Texas, the contact was not related to the operative
facts of the litigation and did not support jurisdiction).
We conclude that Munz and UV have not established that Schreiber had
sufficient minimum contacts with Texas to allow for the assertion of personal
jurisdiction consistent with due process. We overrule issues two through five.
21
III. The trial court did not abuse its discretion by denying a continuance.
In their last issue, Munz and UV contend the trial court erred by denying
their request for a continuance to allow them the opportunity to cross-examine
Schreiber. In their response to the special appearance, Munz and Schreiber stated
that if the court was inclined to grant the special appearance, the trial court should
grant a continuance under Texas Rule of Civil Procedure 120a(3) to allow them to
take Schreiber’s deposition. We conclude the trial court did not err in denying the
request for a continuance.
As an initial matter, we note that our record does not contain an order or
express ruling on Munz and UV’s request for a continuance. Texas Rule of
Appellate Procedure 33.1, requires a party to preserve a complaint for appeal by
presenting the complaint to the trial court and obtaining a ruling, either expressly
or implicitly. Tex. R. App. P. 33.1(a)(2). Although the record does not contain an
express ruling on the request for a continuance, we conclude that the trial court
impliedly overruled the request for a continuance by considering and ruling on the
special appearance, thereby preserving the issue for our review. See Favour
Leasing, LLC v. Mulligan, No. 05-13-01000-CV, 2014 WL 4090130, at *10 (Tex.
App.—Dallas Aug. 19, 2014, no pet.) (mem. op. on reh’g) (holding trial court
implicitly denied motion for continuance of special appearance hearing where trial
court proceeded with hearing and granted special appearance); see also In re
Z.L.T., 124 S.W.3d 163, 165 (Tex. 2003) (concluding error preserved by implicit
ruling on request for bench warrant where court proceeded to trial without issuing
the warrant).
We review a trial court’s order denying a motion for continuance for
additional discovery under a clear abuse of discretion standard. See BMC
Software, 83 S.W.3d at 800. A trial court clearly abuses its discretion when it
22
“reaches a decision so arbitrary and unreasonable as to amount to a clear and
prejudicial error of law.” Id.
Rule 120a(3) of the Texas Rules of Civil Procedure allows a trial court to
order a continuance of a special appearance hearing to permit jurisdictional
discovery when it appears from the affidavits of a party opposing a special
appearance that he cannot, for reasons stated in the affidavit, present facts essential
to justify his opposition to the special appearance. See Tex. R. Civ. P. 120a(3);
Lamar v. Poncon, 305 S.W.3d 130, 139 (Tex. App.—Houston [1st Dist.] 2009, pet.
denied). A party’s due diligence in seeking the discovery requested is a factor to
consider in determining whether the trial court abused its discretion in denying a
continuance for jurisdictional discovery. See BMC Software, 83 S.W.3d at 800-01
(holding no abuse of discretion shown where party did not file motion to compel
discovery); Parex Res., Inc. v. ERG Res., LLC, 427 S.W.3d 407, 434 & n.33 (Tex.
App.—Houston [14th Dist.] 2014, aff’d sub nom., Searcy, 496 S.W.3d 58) (noting
factors showing due diligence support right to a continuance).
Here, Munz and UV complain of the denial of their motion for continuance
to take the deposition of Schreiber. With regard to due diligence, their attorney’s
affidavit supporting the motion for continuance states only: “Plaintiffs have been
unable to secure this information despite diligent effort.” There is no explanation
contained in the affidavit of any attempts to depose Schreiber or why they have
been unsuccessful in obtaining Schreiber’s deposition before the hearing.
Conclusory statements of due diligence are generally insufficient. See Carter v.
MacFadyen, 93 S.W.3d 307, 310 (Tex. App.—Houston [14th Dist.] 2002, pet.
denied). Rule 120a(3) allows a continuance when it appears that the party
opposing the special appearance cannot “for reasons stated in the affidavit” present
facts essential to justify its opposition. See Tex. R. Civ. P. 120a(3). Because
23
Munz and UV have not established due diligence in seeking Schreiber’s deposition
nor explained why they cannot present facts essential to justify their opposition, we
cannot say the trial court committed a clear abuse of discretion in denying
additional time to cross-examine Schreiber. See BMC Software, 83 S.W.3d at 800-
01.
We overrule issue six.
CONCLUSION
Having overruled Munz and UV’s six issues on appeal, we affirm the trial
court’s order granting Schreiber’s special appearance.
/s/ Jerry Zimmerer
Justice
Panel consists of Justices Jewell, Zimmerer, and Spain.
24