Sarjak Container Lines Singapore PTE. Limited v. Barbara Semons

Opinion issued May 4, 2023
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-21-00508-CV
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SARJAK CONTAINER LINES SINGAPORE PTE LTD., Appellant
V.
BARBARA SEMONS, Appellee
On Appeal from the County Civil Court at Law No. 3
Harris County, Texas
Trial Court Case No. 1155769
MEMORANDUM OPINION
Appellant Sarjak Container Lines Singapore PTE Ltd. (“Sarjak”), a
Singaporean company, appeals the trial court’s denial of its special appearance.
Appellee Barbara Semons sued Sarjak asserting various employment-related claims.
After the county court entered a final no-answer default judgment against Sarjak,
Sarjak filed a special appearance challenging personal jurisdiction, which the trial
court denied by written order. In a single issue on appeal, Sarjak challenges the
denial of its special appearance. Semons argues that this Court lacks jurisdiction
because the case has become moot. We conclude that the appeal is not moot, and we
have jurisdiction to reach the merits of Sarjak’s appeal. We affirm.
Background
In her petition, Semons alleged that Sarjak hired her in October 2016 as an
executive director to work in Houston overseeing Sarjak’s American shipping
operations. At the time she was hired, Semons was Sarjak’s only employee stationed
in the United States. Two other employees, Soumen Majumdar and Ines Bigdeli,
lived overseas. In January 2017, Majumdar tasked Semons with forming a new
company in Texas, which would become Sebert Shipping, Inc., a wholly owned
subsidiary of Sarjak. Majumdar is Sebert Shipping’s sole officer.
After Semons formed Sebert Shipping, Majumdar obtained a visa and moved
to Texas to run Sebert Shipping’s operations. When he arrived in Texas, Semons
alleged that he began treating her differently than he had before he moved to Texas
because she was a female. For example, Semons alleged that Majumdar required her
to report to a male colleague in a position inferior to her own. She had to give up her
office to this male colleague and move into a “bull pen” setting that was much
2
smaller than her office. She also learned that the male colleague earned nearly twice
her salary despite holding an inferior position in the company. She also alleged that
this male colleague and Majumdar treated her “very cruelly,” including by cursing
at her.
In April 2018, Sarjak sent Semons a list of customers owing more than
$500,000 in tariffs that had not been collected by Sarjak’s previous agent. Semons
contacted all of the customers who owed tariffs, but the customers became upset
upon learning for the first time that they owed the tariffs. One customer’s attorney
sent a letter to Sarjak demanding a copy of tariff paperwork that Sarjak was required
to file with the Federal Maritime Commission before it could collect the tariffs from
the customers. Semons contacted another Sarjak employee to request the necessary
tariff paperwork, but that employee did not know any paperwork needed to be filed
so none had been filed. The Sarjak employee then contacted Sarjak’s tariff company
and its legal counsel. Sarjak then advised Semons that the paperwork had to be filed
or the tariffs could not be collected from the customers. Semons reported this
information to Majumdar, but he demanded that she collect the tariffs from the
customers anyway. Semons refused, which “enraged” Majumdar. He began
“constantly” yelling at, belittling, and embarrassing Semons in front of the entire
office. Semons was eventually terminated, and Sarjak told her she was terminated
for refusing to collect the tariffs.
3
Semons filed a charge of gender discrimination and retaliation with the Equal
Employment Opportunity Commission. She then sued Sarjak, Sebert Shipping, and
Majumdar for gender discrimination in violation of Title VII of the Civil Rights Act
of 1964 and the Texas Commission on Human Rights Act, wrongful discharge, and
tortious interference with her employment contract.1 Semons sought actual damages,
exemplary damages, attorney fees and costs, and interest.
On June 4, 2021, the county court signed a final no-answer default judgment
against Sarjak.2 The judgment recited that Semons’s claims against Sarjak were
meritorious, specifically reciting that Sarjak violated the Labor Code and caused
harm to Semons. The judgment stated that Sarjak intentionally and willfully violated
Semons’s rights under the Labor Code, which entitled Semons to exemplary
damages. The judgment did not, however, award her any exemplary damages. The
judgment awarded her actual damages, attorney’s fees, and costs. The judgment also
awarded her conditional appellate fees if Sarjak unsuccessfully appeals to this Court
or the Texas Supreme Court.
On July 2, 2021, Sarjak filed several pleadings in the county court proceeding:
a special appearance; a motion to vacate the default judgment and for new trial
1
Sebert Shipping and Majumdar are not parties to this appeal.
2
Before signing the final default judgment, the county court signed an interlocutory
judgment against Sebert Shipping, and Semons nonsuited her claims against
Majumdar.
4
subject to its special appearance; and an answer with affirmative defenses subject to
its special appearance.
In its special appearance, Sarjak argued that the county court lacked personal
jurisdiction over it because it was not a resident of Texas, it lacked minimum
contacts generally with Texas, and it lacked minimum contacts specifically related
to Semons because it did not employ, contract with, or have prior interactions with
Semons. The only evidence attached to Sarjak’s special appearance was a
declaration by Supal Shah, a resident of India, verifying that the facts stated in the
special appearance were within his personal knowledge and were true and correct.
However, Sarjak’s special appearance also referenced a declaration from Shah
that was attached to Sarjak’s contemporaneously filed motion to vacate and for new
trial. In this declaration, Shah averred that he is the president of finance and strategy
for Sarjak Container Lines PVT. LTD (“Sarjak India”), which Sarjak contends is a
separate entity despite the similarity in the two entities’ names. Nevertheless, Shah
averred that he has personal knowledge of Sarjak’s business and legal affairs.
He stated that Sarjak is a company incorporated in Singapore and has its
principal place of business in Singapore. He also stated that Sarjak does not conduct
business in Texas; have offices, facilities, or employees in Texas; or have a
registered agent for service of process in Texas. He also stated that Sarjak did not
employ or otherwise contract with Semons. Finally, Shah denied that he or any
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member of Sarjak’s management knew about Semons’s lawsuit until Sarjak received
the notice of default judgment entered against it.
Semons filed a response to Sarjak’s special appearance. She disputed that she
was not employed by Sarjak, arguing that Sarjak hired her directly and is the sole
parent company of Sebert Shipping. She attached the letter offering her employment
to prove that Sarjak hired her. She also attached two franchise tax reports filed with
the Texas Comptroller of Public Accounts, both of which list Sarjak as Sebert
Shipping’s sole parent company and Majumdar as Sebert Shipping’s sole officer.
At a hearing on its special appearance, Sarjak disputed that the letter of
employment proved that it hired Semons. Sarjak argued that the letter refers to Sarjak
India, not Sarjak, and the two entities are separate despite the substantial similarity
in their names. Sarjak argued that Shah’s declaration denying that Sarjak ever
employed or contracted with Semons supports this argument. Semons objected to
Shah’s declaration, as she had in her special appearance response, on the grounds
that the declaration included hearsay and incorrect statements. She also disputed that
the letter offering her employment showed that she was hired by Sarjak India rather
than Sarjak. Semons attended the hearing, and her counsel offered several times to
call her as a witness to prove that she was employed by Sarjak, but the court stated
that it did not need her testimony.
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Sarjak also argued that the Texas franchise tax reports showed only “an
ostensible ownership structure or ownership interest for a separate entity and does
not establish any of the requirements for minimum contacts.” When the county court
pressed Sarjak, however, its counsel conceded that Sarjak “is a fully owned
subsidiary of this Sarjak India,” the separate entity. Semons argued that Sarjak is the
sole owner of Sebert Shipping, and that Semons formed Sebert Shipping while
employed by Sarjak. Sarjak contended that mere ownership of a Texas subsidiary
does not confer personal jurisdiction over the nonresident parent company. At the
end of the hearing, the court denied the special appearance.
On September 2, 2021, the county court entered a written order denying
Sarjak’s special appearance. On September 21, 2021, Sarjak filed a notice of
accelerated appeal of the order denying its special appearance.
Jurisdiction
We first address a jurisdictional issue raised by Semons. In her appellate brief,
Semons argues that this appeal is moot because the notice of appeal was filed after
the county court lost plenary power over the proceedings. According to Semons’s
argument, because the county court lacked plenary power when Sarjak filed its
notice of appeal, this Court cannot redress Semons’s injuries and we therefore lack
jurisdiction over the appeal. Sarjak disputes that the county court had lost plenary
power either when the court denied the special appearance or when Sarjak filed the
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notice of appeal. For the reasons discussed below, we conclude that the appeal is not
moot because the county court had plenary power when it denied the special
appearance, and Sarjak timely filed the notice of appeal under the Rules of Appellate
Procedure thereby invoking this Court’s appellate jurisdiction.
Whether we have appellate jurisdiction is a question of law that we review de
novo. Caress v. Fortier, 576 S.W.3d 778, 781 (Tex. App.—Houston [1st Dist.] 2019,
pet. denied) (citing Tex. A&M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 840 (Tex.
2007)). “Unless specifically authorized by statute, Texas appellate courts only have
jurisdiction to review final judgments.” Bison Bldg. Materials, Ltd. v. Aldridge, 422
S.W.3d 582, 585 (Tex. 2012) (citations omitted); see Lehmann v. Har-Con Corp.,
39 S.W.3d 191, 195 & n.12 (Tex. 2001). An interlocutory order denying a special
appearance is expressly appealable under section 51.014(a)(7) of the Civil Practice
and Remedies Code. TEX. CIV. PRAC. & REM. CODE § 51.014(a)(7) (authorizing
appeal from county court order that “grants or denies the special appearance of a
defendant”).
To invoke the jurisdiction of an appellate court, a party must file a timely
notice of appeal. TEX. R. APP. P. 25.1(b) (“The filing of a notice of appeal by any
party invokes the appellate court’s jurisdiction over all parties to the trial court’s
judgment or order appealed from.”). Generally, in an appeal from a final judgment,
a notice of appeal must be filed within thirty days after the court signs the judgment.
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TEX. R. APP. P. 26.1. If, as here, a party files a timely motion for new trial or a motion
to modify the judgment, then the notice of appeal must be filed within ninety days
after the judgment is signed. TEX. R. APP. P. 26.1(a); see TEX. R. CIV. P. 329b(a), (g)
(stating that motion for new trial and motion to modify, correct, or reform judgment
must be filed within thirty days after judgment or order is signed).
The deadline to file a notice of appeal may be further extended if, within
fifteen days after the deadline, the party seeking to appeal files a notice of appeal
and a motion for extension of time to file a notice of appeal. TEX. R. APP. P. 26.3.
We will necessarily imply a motion for extension of time when an appellant acting
in good faith files a notice of appeal beyond the deadline but within the fifteen-day
period in which the appellant would be entitled to seek an extension of time to file a
notice of appeal. Brown Mech. Servs., Inc. v. Mountbatten Sur. Co., 377 S.W.3d 40,
42 (Tex. App.—Houston [1st Dist.] 2012, no pet.); see also Verburgt v. Dorner, 959
S.W.2d 615, 617 (Tex. 1997).
The county court signed the final default judgment on June 4, 2021. Sarjak
filed a motion to vacate the default judgment and for new trial on July 2, which was
timely because it was filed within thirty days after the judgment was signed. See
TEX. R. CIV. P. 329b(a), (g). The filing of this motion extended Sarjak’s deadline to
file a notice of appeal of the default judgment to ninety days after the judgment was
signed, or until September 2, 2021. See TEX. R. APP. P. 26.1(a). Because September
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2 was Sarjak’s deadline to file a notice of appeal, Sarjak had an additional fifteen
days to file a timely notice of appeal of the default judgment accompanied by a
motion to extend time. See TEX. R. APP. P. 26.3; Brown Mech. Servs., 377 S.W.3d at
42. Thus, Sarjak’s ultimate deadline to file a notice of appeal of the final default
judgment was September 17, 2021, which is ninety plus fifteen days after the
judgment was signed on June 4. See TEX. R. APP. P. 26.1(a), 26.3. Sarjak filed its
notice of appeal on September 21, 2021—four days after this final deadline. Thus,
Sarjak did not timely file a notice of appeal of the final default judgment.
However, Sarjak does not challenge the default judgment on appeal. Rather,
it challenges the order denying its special appearance, which was signed after the
final default judgment. Most post-judgment orders are not appealable because no
statute generally authorizes an appeal from post-judgment orders. Sunnyland Dev.,
Inc. v. Shawn Ibrahim, Inc., 597 S.W.3d 1, 2 (Tex. App.—Houston [1st Dist.] 2020,
no pet.). However, section 51.014 does authorize an appeal from an order denying a
special appearance. TEX. CIV. PRAC. & REM. CODE § 51.014(a)(7). Such an appeal is
accelerated, and the notice of appeal must be filed within twenty days after the order
is signed regardless of whether the party filed a motion for new trial or other post-
judgment motion. TEX. R. APP. P. 28.1(a), (b), 26.1(b).
The county court signed the order denying Sarjak’s special appearance on
September 2, 2021. Section 51.014 authorized Sarjak to appeal this order, and Sarjak
10
had twenty days to file a notice of appeal. See TEX. CIV. PRAC. & REM. CODE
§ 51.014(a)(7); TEX. R. APP. P. 26.1(b). Sarjak filed the notice of appeal on
September 21, 2021, which is within twenty days after the order was signed.
Therefore, Sarjak timely filed its notice of appeal of the order denying its special
appearance and invoked this Court’s jurisdiction. See TEX. R. APP. P. 25.1(b).
The county court’s plenary power is only relevant to this inquiry insofar as
the court must have plenary power to act, including by ruling on a special
appearance. See Metro. Transit Auth. v. Jackson, 212 S.W.3d 797, 801 (Tex. App.—
Houston [1st Dist.] 2006, pet. denied) (stating that plenary power or jurisdiction is
power to adjudicate, that is to grant or deny relief, and lack of jurisdiction is lack of
power to make any ruling); Martin v. Tex. Dep’t of Fam. & Protective Servs., 176
S.W.3d 390, 393 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (“Judicial action
taken after the trial court’s plenary power has expired is void.”). Lack of plenary
power deprives a trial court of the power to act, but it does not deprive this Court of
our appellate jurisdiction to review the challenged action assuming the appeal has
been timely perfected. See Martin, 176 S.W.3d at 394 (stating that party may appeal
judgment entered after trial court lost plenary power, and appellate court should
declare such judgment void, vacate judgment, and dismiss appeal). The parties do
not dispute that the county court had plenary power on September 2 when it ruled
on the special appearance. Sarjak was required to perfect its appeal according to the
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requirements in the Rules of Appellate Procedure, as discussed above. Whether the
county court had plenary power when Sarjak filed the notice of appeal is irrelevant
because the court was not acting when Sarjak filed the notice of appeal.
We disagree with Semons that this case has become moot. “A case becomes
moot if, since the time of filing, there has ceased to exist a justiciable controversy
between the parties—that is, if the issues presented are no longer ‘live,’ or if the
parties lack a legally cognizable interest in the outcome.” Heckman v. Williamson
Cnty., 369 S.W.3d 137, 162 (Tex. 2012) (quoting Williams v. Lara, 52 S.W.3d 171,
184 (Tex. 2001)). That is, “a case is moot when the court’s action on the merits
cannot affect the parties’ rights or interests.” Id. Courts cannot decide a case that has
become moot, and courts must vacate any order or judgment previously issued and
dismiss the case for lack of jurisdiction. Id.Both parties have a legally cognizable interest in the outcome of this appeal.
If Sarjak is successful on appeal and we determine that the county court lacked
personal jurisdiction over Sarjak, we must vacate the final default judgment and
dismiss the case for lack of jurisdiction. See id.; see also Koch Graphics, Inc. v.
Avantech, Inc., 803 S.W.2d 432, 433 (Tex. App.—Dallas 1991, no pet.) (“[I]t has
been held that, within the period when the trial court has plenary power over its
judgment, the court may address a special appearance.”). In doing so, Sarjak would
be relieved of liability for the default judgment entered against it. Conversely, if we
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affirm the denial of Sarjak’s special appearance, Semons would maintain her right
to the monetary award reflected in the default judgment. Thus, a justiciable
controversy exists between the parties: whether Texas courts have personal
jurisdiction over Sarjak such that the final default judgment is valid and enforceable.
We therefore conclude that this case is not moot.
Waiver for Inadequate Briefing
We next address Semons’s argument that Sarjak waived its issues on appeal
because its appellate brief does not cite to the record on appeal but instead cites only
to documents attached in the appendix of its brief. Sarjak responds that the
documents included in the appendix to its appellate brief are contained in the record
on appeal, and it cited to the documents both in the appendix and in the appellate
record.
Our review is confined to the formal record on appeal, which “consists of the
clerk’s record and, if necessary to the appeal, the reporter’s record.” TEX. R. APP. P.
34.1; see Tex. Windstorm Ins. Ass’n v. Jones, 512 S.W.3d 545, 552 (Tex. App.—
Houston [1st Dist.] 2016, no pet.) (“Evidence that is not contained in the appellate
record is not properly before this Court.”). “Documents attached as exhibits or
appendices to briefs do not constitute formal inclusion of such documents in the
record on appeal, and we cannot consider matters outside the record in our review.”
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Democratic Schs. Rsch., Inc. v. Rock, 608 S.W.3d 290, 305 (Tex. App.—Houston
[1st Dist.] 2020, no pet.).
The Rules of Appellate Procedure allow parties to append documents in the
record on appeal to their appellate briefs. See TEX. R. APP. P. 38.1(k). Indeed, an
appellant is required to include certain documents in an appendix, such as the order
or judgment being appealed; the jury charge and verdict, if any; findings of fact and
conclusions of law, if any; and the text of legal authority and documents that are
“central to the argument.” TEX. R. APP. P. 38.1(k)(1). The appellant’s appendix may
also include “any other item pertinent to the issues or points presented for review,”
including relevant legal authority and documents not otherwise required to be
contained in an appendix. TEX. R. APP. P. 38.1(k)(2).
Our review of the appendix to Sarjak’s brief reveals that it includes three
documents: (1) Semons’s original petition; (2) Sarjak’s letter offering employment
to Semons; and (3) one of two franchise tax reports relied upon by Semons in her
special appearance response. Each of these documents is labelled with the page
number on which it appears in the clerk’s record. Thus, the documents appended to
Sarjak’s brief are formally included in the record on appeal. And as Sarjak notes,
each citation in its brief to a document in the appendix includes a parallel citation to
the document in the appellate record. See TEX. R. APP. P. 38.1(g) (requiring
statement of facts to be supported by record references), (i) (requiring argument to
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be supported by citations to record). We conclude that Sarjak has not waived its
appeal for inadequate briefing.
Waiver of Special Appearance
We next address Semons’s argument that Sarjak waived its special appearance
and entered a general appearance because it filed its motion to vacate and for new
trial before it filed its special appearance. Sarjak responds that it filed its special
appearance before filing its motion to vacate and for new trial, and it points to the
timestamps on each document showing the date and time the respective documents
were filed in the county court.
Rule of Civil Procedure 120a governs special appearances. This rule
authorizes any party to object to a Texas court’s personal jurisdiction over the party
by filing a special appearance. TEX. R. CIV. P. 120a(1). A special appearance must
be made by sworn motion filed prior to any other pleading or motion, which is
known as the “due-order-of-pleading” requirement.3 Id; PetroSaudi Oil Servs. Ltd.
v. Hartley, 617 S.W.3d 116, 136 (Tex. App.—Houston [1st Dist.] 2020, no pet.)
(quoting Exito Elecs. Co. v. Trejo, 142 S.W.3d 302, 305 (Tex. 2004)). “Every
appearance, prior to judgment, not in compliance with [Rule 120a] is a general
3
Rule 120a also contains a due-order-of-hearing requirement, which states that a
special appearance “shall be heard and determined before a motion to transfer venue
or any other plea or pleading may be heard.” TEX. R. CIV. P. 120a(2). Neither party
disputes that Sarjak’s special appearance was heard before any other plea or
pleading that it filed in the county court.
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appearance.” TEX. R. CIV. P. 120a(1); see Nationwide Distrib. Servs., Inc. v. Jones,
496 S.W.3d 221, 224 (Tex. App.—Houston [1st Dist.] 2016, no pet.) (stating that
failure to strictly comply with Rule 120a, including its due-order-of-pleading
requirement, constitutes general appearance and waives challenge to personal
jurisdiction).
Sarjak did not appear in the county court before the court entered the default
judgment against it. After the default judgment was signed, Sarjak filed three
pleadings: (1) a special appearance, (2) a motion to vacate the default judgment and
for new trial, and (3) an answer and affirmative defenses. In the clerk’s record,
Sarjak’s motion to vacate and for default judgment appears first in sequential order,
followed by Sarjak’s special appearance and then its answer. All three documents
were filed on July 2, 2021. According to the file stamps on each document, Sarjak
filed its special appearance at 4:01 p.m. It filed its motion to vacate and for new trial
at 4:09 p.m. And it filed its answer at 4:20 p.m. Thus, the special appearance was
filed before any other pleading or motion, and therefore Sarjak complied with the
due-order-of-pleading requirement in Rule 120a. We conclude that Sarjak did not
waive its special appearance.
Special Appearance
Finally, we reach Sarjak’s sole issue on appeal: whether it purposefully
availed itself of the privilege of conducting activities in Texas, thus invoking the
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benefits and protections of Texas’s laws and subjecting it to personal jurisdiction in
Texas courts. See Old Republic Nat’l Title Ins. Co. v. Bell, 549 S.W.3d 550, 559
(Tex. 2018).
A. Standard of Review
Whether a court may exercise personal jurisdiction over a nonresident
defendant is a question of law that we review de novo. Id. at 558. In resolving this
question of law, however, courts frequently must resolve questions of fact. BMC
Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). When, as
here, the county court did 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. Old Republic, 549 S.W.3d at 558.
In a special appearance, the court is the sole judge of the witnesses’ credibility
and the weight to be given their testimony. Predator Downhole Inc. v. Flotek Indus.,
Inc., 504 S.W.3d 394, 402 (Tex. App.—Houston [1st Dist.] 2016, no pet.). We will
not disturb a county court’s resolution of conflicting evidence that turns on the
credibility or weight of the evidence. Id. We will affirm the county court’s ruling on
any legal theory that is supported by record evidence. Id.The parties bear shifting evidentiary burdens of proof in a special appearance.
Old Republic, 549 S.W.3d at 559. The plaintiff bears the initial burden to plead
allegations sufficient to confer jurisdiction under the long-arm statute. Id. We
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consider allegations both in the plaintiff’s petition and in the plaintiff’s response to
the special appearance. Predator Downhole, 504 S.W.3d at 402. If the plaintiff meets
this initial burden, the burden shifts to the nonresident defendant to negate all bases
of personal jurisdiction alleged by the plaintiff. Old Republic, 549 S.W.3d at 559.
“Because the plaintiff defines the scope and nature of the lawsuit, the defendant’s
corresponding burden to negate jurisdiction is tied to the allegations in the plaintiff’s
pleading.” Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010).
The defendant can negate jurisdiction on either a factual or a legal basis. Id.
at 659. Jurisdiction can be negated on a legal basis by showing that “even if the
plaintiff’s alleged facts are true, the evidence is legally insufficient to establish
jurisdiction.” Old Republic, 549 S.W.3d at 559 (quoting Kelly, 301 S.W.3d at 659).
Jurisdiction can be negated on a factual basis by presenting evidence that the
defendant’s “contacts with Texas fall short of purposeful availment.” Id. (quoting
Kelly, 301 S.W.3d at 659).
If the nonresident defendant produces evidence negating personal jurisdiction,
the burden shifts back to the plaintiff to show that the court has personal jurisdiction
over the defendant. Predator Downhole, 504 S.W.3d at 402.
B. Governing Law
Texas courts may assert personal jurisdiction over a nonresident defendant
when (1) the long-arm statute authorizes the exercise of jurisdiction; and (2) the
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exercise of jurisdiction is consistent with federal and state constitutional due process
guarantees. Old Republic, 549 S.W.3d at 558. The long-arm statute is satisfied by a
defendant doing business in Texas, including by contracting with a Texas resident
where either party is to perform the contract in Texas; by committing a tort in Texas;
or by recruiting Texas residents directly or through an intermediary located in Texas
for employment inside or outside of Texas. TEX. CIV. PRAC. & REM. CODE § 17.042.
Because the long-arm statute extends personal jurisdiction “as far as the federal
constitutional requirements of due process will allow,” the statute is satisfied if the
exercise of personal jurisdiction comports with federal due process. Moki Mac River
Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex. 2007) (quoting Guardian Royal
Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.
1991)).
Before a court may exercise personal jurisdiction over a nonresident
defendant, the defendant must have “certain minimum contacts with [the forum
state] such that the maintenance of the suit does not offend ‘traditional notions of
fair play and substantial justice.’” Old Republic, 549 S.W.3d at 559 (quoting Int’l
Shoe Co. v. State of Wash., Off. of Unemployment Comp. & Placement, 326 U.S.
310, 316 (1945)). A nonresident 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.’” Id.
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(quoting Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338
(Tex. 2009)).
Courts consider three factors when determining whether a defendant
purposefully availed itself of the privilege of conducting activities in Texas:
First, only the defendant’s contacts with the forum are relevant, not the
unilateral activity of another party or a third person. Second, the
contacts relied upon must be purposeful rather than random, fortuitous,
or attenuated. . . . Finally, the defendant must seek some benefit,
advantage or profit by availing itself of the jurisdiction.
Id. (quoting Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 151 (Tex.
2013)). A defendant’s activities “must justify a conclusion that the defendant could
reasonably anticipate being called into a Texas court.” Id. (quoting Retamco
Operating, 278 S.W.3d at 338).
A defendant’s contacts with a forum state may give rise to either general or
specific personal jurisdiction. Id. General jurisdiction, which is not at issue here,
requires that the nonresident defendant’s “affiliations with the state are so
continuous and systematic as to render [it] essentially at home in the forum State.”
Id. at 565 (quoting TV Azteca v. Ruiz, 490 S.W.3d 29, 37 (Tex. 2016)).
Specific jurisdiction, which is in dispute here, arises when the plaintiff’s
causes of action against the nonresident defendant arise from or relate to the
defendant’s purposeful in-state activities. Moki Mac, 221 S.W.3d at 576. A specific
jurisdiction analysis focuses on the relationship between the forum, the defendant,
20
and the litigation. Old Republic, 549 S.W.3d at 559. The contacts must be both
purposeful and substantially connected to the operative facts of the litigation. Id. at
559–60; Moki Mac, 221 S.W.3d at 585. The operative facts of the litigation are those
facts that “will be the focus of the trial, will consume most if not all of the litigation’s
attention, and the overwhelming majority of the evidence will be directed to that
question.” Moki Mac, 221 S.W.3d at 585; Fuji Elec. Co. v. Perez, 615 S.W.3d 508,
520 (Tex. App.—Houston [1st Dist.] 2020, no pet.). “Specific jurisdiction must be
established on a claim-by-claim basis unless all the asserted claims arise from the
same forum contacts.” M & F Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co.,
512 S.W.3d 878, 886 (Tex. 2017); Moncrief Oil, 414 S.W.3d at 150–51.
C. Jurisdictional Allegations and Evidence
In her petition, Semons named Sarjak as a defendant and alleged its status as
a foreign entity with a registered agent in Texas. She alleged that Majumdar, an
employee of Sarjak, hired her as an executive director for Sarjak to oversee its
operations in the United States. She alleged that she worked at Majumdar’s direction.
For example, Majumdar directed Semons to set up Sebert Shipping as a Texas
corporation, and she filed the necessary paperwork with the appropriate regulatory
agencies to do so.
When Majumdar moved to Texas to run Sebert Shipping, he began treating
Semons less favorably than male employees. After Semons refused to attempt
21
collection of certain tariffs, Majumdar began constantly yelling at, belittling, and
embarrassing Semons in front of her coworkers. Majumdar eventually terminated
her for refusing to collect the tariffs. Semons asserted three causes of action against
Sarjak for gender discrimination, wrongful termination, and tortious interference
with her employment contract.
In her response to Sarjak’s special appearance, Semons argued that Sarjak
directly hired her and is the sole owner of Sebert Shipping. See Predator Downhole,
504 S.W.3d at 402 (stating that plaintiff can meet initial burden to allege sufficient
jurisdictional facts through its petition and special appearance response). As proof
that Sarjak hired her, Semons relied on a September 2016 letter offering her
employment. As proof that Sarjak is the sole parent company of Sebert Shipping,
Semons relied on two franchise tax reports filed in Texas by Sebert Shipping. Both
reports list Sarjak as the 100% owner of Sebert Shipping and list Majumdar as the
sole officer of Sebert Shipping.
Semons’s allegations and evidence in her petition and special appearance
response satisfy the “doing business” requirement in the long-arm statute. See TEX.
CIV. PRAC. & REM. CODE § 17.042. Semons alleged that Sarjak conducts
international shipping business in Texas, that it entered into an employment contract
with her to work in Texas, that it employed her in Texas, and that it vicariously
committed torts against her in Texas causing her harm in Texas. See id. (stating that
22
long-arm statute extends to nonresident “doing business” in Texas, which includes
contracting with Texas resident where contract to be performed in Texas,
committing tort in Texas, or recruiting Texas residents for employment in Texas).
Furthermore, the parties do not dispute that all of Semons’s claims arise from
the same forum contacts, and therefore these contacts meet Semons’s pleading
burden with respect to all of her claims against Sarjak. See M & F Worldwide, 512
S.W.3d at 886; Moncrief Oil, 414 S.W.3d at 150–51. Therefore, we conclude that
Semons satisfied her initial burden to plead facts establishing personal jurisdiction
over Sarjak for each of her claims asserted against it. See Old Republic, 549 S.W.3d
at 559.
D. Purposeful Availment
Because Semons satisfied her initial burden, the burden of proof shifted to
Sarjak to negate all potential bases of jurisdiction. See id. Semons’s allegations
define the scope and nature of the lawsuit, and therefore Sarjak’s “corresponding
burden to negate jurisdiction is tied to” Semons’s allegations. See Kelly, 301 S.W.3d
at 658.
Sarjak challenges only the purposeful availment prong of personal
jurisdiction, arguing that it lacks purposeful contacts with Texas. This is a challenge
to the legal basis of jurisdiction. See Old Republic, 549 S.W.3d at 559 (stating that
23
defendant negates legal basis for jurisdiction by showing that even if jurisdictional
allegations are true, evidence is legally insufficient to establish jurisdiction).
1. Imputed Forum Contacts
Sarjak primarily argues that Semons sued the wrong party because it did not
hire or employ her. Sarjak argues that its parent company, Sarjak India, 4 actually
hired Semons, but no evidence shows that Sarjak India’s forum contacts can be
imputed to Sarjak. It further argues that no evidence allows the contacts of Sebert
Shipping, Sarjak’s wholly owned Texas subsidiary, to be imputed to it either.
Texas law presumes that two separate corporations are distinct entities,
although this presumption may be rebutted so that one entity’s forum contacts may
be imputed to the second entity. PHC-Minden, L.P. v. Kimberly-Clark Corp., 235
S.W.3d 163, 173, 175 (Tex. 2007). For example, when a parent company and its
subsidiary are alleged to be alter egos or in an agency relationship, one entity’s forum
contacts may be imputed to the other. Id. at 175; BMC Software, 83 S.W.3d at 798
4
Sarjak argues on appeal that there is no evidence in the clerk’s record supporting
Semons’s allegation that Sarjak India is the parent company of Sarjak. This is true,
but it ignores the representation made by Sarjak’s counsel to the county court during
the hearing on its special appearance, which appears in the reporter’s record, that
Sarjak “is a fully owned subsidiary of this Sarjak India.” This unchallenged judicial
admission establishes that Sarjak India is Sarjak’s parent company. See In re Est. of
Guerrero, 465 S.W.3d 693, 705 (Tex. App.—Houston [14th Dist.] 2015, pet.
denied) (stating that counsel’s statements on behalf of client can constitute judicial
admission that dispenses with production of evidence on issue and bars admitting
party from disputing it).
24
(“Personal jurisdiction may exist over a nonresident defendant if the relationship
between the foreign corporation and its parent corporation that does business in
Texas is one that would allow the court to impute the parent corporation’s ‘doing
business’ to the subsidiary.”).
The Texas Supreme Court has formulated the following inquiry to determine
whether a subsidiary’s forum contacts can be imputed to the nonresident parent
company for purposes of establishing personal jurisdiction over the parent:
To “fuse” the parent company and its subsidiary for jurisdictional
purposes, the plaintiffs must prove the parent controls the internal
business operations and affairs of the subsidiary. But the degree of
control the parent exercises must be greater than that normally
associated with common ownership and directorship; the evidence must
show that the two entities cease to be separate so that the corporate
fiction should be disregarded to prevent fraud or injustice.
PHC-Minden, 235 S.W.3d at 175; Cap. Fin. & Com. AG v. Sinopec Overseas Oil &
Gas, Ltd., 260 S.W.3d 67, 80 (Tex. App.—Houston [1st Dist.] 2008, no pet.). To
establish an alter-ego theory of jurisdiction, the plaintiff bears the burden to establish
that “the parent corporation exerts such domination and control over its subsidiary
that they do not in reality constitute separate and distinct corporate identities but are
one and the same corporation for purposes of jurisdiction.” PHC-Minden, 235
S.W.3d at 173 (quoting BMC Software, 83 S.W.3d at 798) (internal quotation marks
omitted).
25
a. Contacts Imputed from Sebert Shipping
Sarjak and Semons dispute whether Sarjak’s status as the sole parent company
of Sebert Shipping suffices to impute Sebert Shipping’s forum contacts to Sarjak. It
is undisputed that Sebert Shipping is a Texas corporation formed by Semons at
Majumdar’s direction, and Semons worked at Sebert Shipping’s Houston office. In
response to Sarjak’s special appearance, Semons introduced two franchise tax
reports that were filed in Texas in 2018 and 2019 listing Sarjak as Sebert Shipping’s
sole parent company. The parties do not rely on any other evidence relevant to the
issue of imputing Sebert Shipping’s forum contacts to Sarjak.
As stated above, the relationship between a parent company and its wholly
owned subsidiary alone is not sufficient to impute the subsidiary’s forum contacts to
the parent. See BMC Software, 83 S.W.3d at 798 (stating general rule that “courts
will not because of stock ownership or interlocking directorship disregard the
separate legal identities of corporations, unless such relationship is used to defeat
public convenience, justify wrongs, . . . protect fraud, or defend crime”). Rather,
Semons was required to prove that Sarjak controls Sebert Shipping’s internal
business operations and affairs to a degree greater than that generally associated with
common ownership and directorship. See PHC-Minden, 235 S.W.3d at 175. Neither
the franchise tax reports nor any other record evidence establishes Sarjak’s greater-
26
than-usual control over Sebert Shipping’s operations. Therefore, we conclude that
Sebert Shipping’s forum contacts may not be imputed to Sarjak. See id.
b. Contacts Imputed from Sarjak India
The parties primarily dispute whether Sarjak India’s forum contacts can be
imputed to Sarjak. Sarjak contends that the letter offering Semons employment
proves that Sarjak India—and not Sarjak—hired Semons. Sarjak further argues that
no evidence establishes that it hired or employed Semons, or that it controlled Sarjak
India to the degree required to fuse the two entities for jurisdictional purposes. We
note, however, that Sarjak does not argue that Sarjak India’s Texas contacts,
regardless of whether they can be imputed to Sarjak, are insufficient to subject Sarjak
India to personal jurisdiction in Texas.
Semons disputes that she was employed by some entity other than Sarjak. She
argues that Sarjak judicially admitted in its appellate brief that it is the same entity
as Sarjak India. She also argues that she communicated daily with both Sarjak and
Sarjak India, the two entities did not distinguish between themselves when
communicating with her, and they shared directors, managers, and officers.
We disagree with Semons that Sarjak judicially admitted that it is the same
entity as Sarjak India in its appellate brief. In its brief, Sarjak identified itself as a
“foreign India-based defendant . . . .” Sarjak vehemently disputes that it made such
a judicial admission, chalking it up to a drafting mistake that is inconsistent with the
27
section of its brief identifying the parties and their counsel. A judicial admission
results when a party makes a deliberate, clear, and unequivocal statement of fact that
conclusively disproves a right of recovery or defense. Ledesma v. City of Houston,
623 S.W.3d 840, 846 (Tex. App.—Houston [1st Dist.] 2020, pet. denied). As Sarjak
correctly notes, its brief also identifies Sarjak as a “company headquartered in
Singapore,” and therefore the statement referring to India is equivocal. Cf. id.Furthermore, even if Sarjak had clearly and unequivocally identified itself as an
Indian entity, this is not a clear and unequivocal statement that it and Sarjak India
are the same entity. Cf. id. Thus, we disagree with Semons that Sarjak judicially
admitted it is the same entity as Sarjak India.
We also disagree with Semons that Sarjak India’s contacts can be imputed to
Sarjak because the two entities did not distinguish between themselves in their
regular communication with Semons or because the two entities share directors,
managers, and officers. Semons did not make these allegations in either her petition
or her response to the special appearance. See Old Republic, 549 S.W.3d at 559
(stating that plaintiff bears initial burden to plead facts establishing jurisdiction);
Predator Downhole, 504 S.W.3d at 402 (stating that plaintiff can satisfy initial
pleading burden in either petition or special appearance response). These allegations
define the scope and nature of Semons’s lawsuit, and therefore Semons’s
jurisdictional allegations serve as the basis for Sarjak’s corresponding burden to
28
negate jurisdiction. See Kelly, 301 S.W.3d at 658. Because Semons did not assert
these jurisdictional allegations in the trial court, the burden of proof never shifted to
Sarjak to negate them. See Old Republic, 549 S.W.3d at 559.
Sarjak argues that the letter offering employment to Semons proves that
Sarjak India, a separate entity, hired Semons, and no record evidence establishes the
degree of control between the two entities necessary to subject Sarjak to personal
jurisdiction in this case. The letter includes the following relevant language. The
letterhead states “Sarjak Container Lines,” a phrase which appears in both Sarjak’s
and Sarjak India’s similar names. Printed at the bottom of the letter is Sarjak India’s
name: “Sarjak Container Lines PVT. LTD.” The letter thanks Semons for
“understanding the role at Sarjak Container Lines Pvt Ltd.” and informs her that her
role will be “Manager—Commercial” and she will be stationed in Houston. The
letter states that her “career at Sarjak Container Lines will be exciting, challenging
and rewarding.” Finally, the letter is signed by someone on behalf of Sarjak India
and bears a stamp with Sarjak India’s name and the word “Mumbai.”
We agree with Sarjak that this letter alone does not support an alter ego theory
of jurisdiction. We presume that Sarjak and Sarjak India are distinct entities for
jurisdictional purposes. See PHC-Minden, 235 S.W.3d at 173; BMC Software, 83
S.W.3d at 798. This letter does not mention Sarjak. Nothing in the letter indicates
that Sarjak India controls the internal business operations and affairs of Sarjak—or
29
vice versa—such that the two entities cease to be separate. See PHC-Minden, 235
S.W.3d at 175. Thus, the employment letter does not satisfy Semons’s burden to
overcome the presumption that Sarjak and Sarjak India are separate entities for
jurisdictional purposes. See id. at 173.
c. Contacts Imputed from Majumdar
We note, however, that other bases support personal jurisdiction over Sarjak.
The thrust of Semons’s complaint against Sarjak is that its employees’ in-state
tortious activity caused her harm, and Sarjak denies neither that its employees
participated in the tortious activity nor that such activity constitutes sufficient
minimum contact with Texas. As discussed below, Texas law allows an employee’s
forum contacts to be imputed to the employer.
Semons alleged that Majumdar hired her to oversee Sarjak’s United States
operations because Majumdar and Bigdeli “both lived overseas,” making Semons
“the only employee of Sarjak in the [] United States.” Majumdar also controlled
Semons’s work. He directed her to complete the paperwork required to form Sebert
Shipping as a Texas corporation, and she did so. When Majumdar’s visa was
approved and he moved to Texas, Semons found him an apartment and drove him
to and from work for several months. Majumdar began treating Semons less
favorably than a male colleague in a position inferior to Semons’s position, including
by having her directly report to the colleague, by giving up her larger office to the
30
colleague in exchange for a smaller office, and by being paid nearly half of the
colleague’s salary. Both Majumdar and the colleague treated her “very cruelly.”
Sarjak ordered Semons to collect $500,000 in tariffs that went uncollected by
Sarjak’s prior agent. Semons learned that the paperwork required to collect the tariffs
had not been filed, making the tariffs uncollectable, but Majumdar nevertheless
demanded that Semons collect the tariffs anyway. Semons refused to collect the
tariffs, which “enraged” Majumdar and caused him to yell at, belittle, and embarrass
Semons in front of her coworkers. Semons was eventually terminated for refusing
to collect the tariffs. She also alleged that these actions interfered with her
employment contract.
It is well established that, “even without other contacts, jurisdiction would
exist if [a foreign company] committed a tort while in the state.” Moncrief Oil, 414
S.W.3d at 148 (quoting Moncrief Oil Int’l Inc. v. OAO Gazprom, 481 F.3d 309, 314–
15 (5th Cir. 2007)). Furthermore, Texas law recognizes an agency-based theory of
imputed contacts, which allows forum contacts of an agent or employee to be
imputed to the foreign principal. Stocksy United v. Morris, 592 S.W.3d 538, 547
(Tex. App.—Houston [1st Dist.] 2019, no pet.); Huynh v. Nguyen, 180 S.W.3d 608,
622 (Tex. App.—Houston [14th Dist.] 2005, no pet.) (“The Texas contacts of agents
or employees are attributable to their nonresident principals.”). Sarjak does not
mention or dispute any of these jurisdictional allegations regarding its employees’
31
in-state tortious activity. See Old Republic, 549 S.W.3d at 559 (stating that
nonresident defendant bears burden to negate all bases of personal jurisdiction
alleged by plaintiff).
The commission of these torts was purposeful, not random, fortuitous, or
attenuated. See Old Republic, 549 S.W.3d at 559. Sarjak was not unilaterally haled
into making these contacts, but rather it sent Majumdar to Texas and, while in Texas,
Majumdar allegedly committed torts against Semons. See Moncrief Oil, 414 S.W.3d
at 153 (stating that foreign defendant’s Texas contacts were purposeful, not random,
fortuitous, or unilateral activities of third party, because defendant agreed to attend
meetings in Texas at which it accepted trade secrets that it later allegedly
misappropriated).
Moreover, the entire series of events that Semons complains about occurred
because Sarjak desired to form a Texas subsidiary to conduct international shipping
business. This shows that Sarjak sought and obtained a benefit, advantage, and profit
by availing itself of the privilege of conducting activities in Texas, thus invoking the
benefits and protections of its laws. See id. (stating that defendant’s contacts were
purposeful and substantial because the activity “was aimed at getting extensive
business in or from the forum state”) (quoting Michiana Easy Livin’ Country, Inc.
v. Holten, 168 S.W.3d 777, 789–90 (Tex. 2005)). We therefore conclude that
32
Majumdar’s forum contacts are properly imputed to Sarjak, and these purposeful
forum contacts subject Sarjak to personal jurisdiction in Texas courts.
2. Other Forum Contacts
There are other forum contacts alleged by Semons that Sarjak either did not
address or did not rely on any evidence to negate.5
a. Conducting Business, Advertising, Registering Corporation, and
Having Registered Agent in Texas
Sarjak argues that it does not conduct business in Texas, does not advertise in
Texas, is not a registered entity in Texas, and does not have a registered agent for
service of process in Texas. To support these arguments on appeal, Sarjak relies
solely on a “Taxable Entity Search” page on the website of the Texas Comptroller
of Public Accounts. See Taxable Entity Search, TEXAS COMPTROLLER OF PUBLIC
ACCOUNTS, https://mycpa.cpa.state.tx.us/coa (last visited August 1, 2022). In a
parenthetical, Sarjak directs the Court to “see” the “search” there without providing
any parameters to conduct a search for information that might support its arguments.
Nor does Sarjak otherwise explain how the website supports its arguments.
5
On appeal, Semons argues that Sarjak submitted to jurisdiction in Texas by
participating in mediation of her discrimination and retaliation claims. Semons did
not assert this jurisdictional allegation in the trial court, and therefore it was not a
basis for jurisdiction that Sarjak was required to negate. See Old Republic Nat’l Title
Ins. Co. v. Bell, 549 S.W.3d 550, 559 (Tex. 2018) (stating that burden shifts to
nonresident defendant to negate jurisdictional allegations only after plaintiff meets
initial burden to plead sufficient jurisdictional allegations).
33
On the website, a user can search for a taxable entity by tax ID, entity name,
or file number. See id. A search of “Sarjak” on the website reveals one entity, Sarjak
Enterprises Inc., a corporation formed in California. See id. This result lists the
entity’s taxpayer number, mailing address, state of formation, registered agent’s
name and address, “Effective SOS Registration Date,” “Texas File Number,” and
whether the entity has a right to transact business in Texas. See id. Presumably, these
results are provided for every listed entity, although there is no indication whether
all this information is provided for every listed entity or whether any additional
information is provided for some entities. Regardless, these results say nothing about
whether Sarjak advertises in Texas—an allegation Semons does not make—or
whether Sarjak conducts any business in Texas even if it does not have a right to
transact business here. See id. Thus, we cannot say this evidence negates jurisdiction
based on conducting business in Texas.6 See Old Republic, 549 S.W.3d at 559.
b. Communications
Finally, Semons alleged that Sarjak communicated with her while in Texas,
directly and through Majumdar. She alleged that she was the only Sarjak employee
in Texas before Majumdar moved there, and that Majumdar directed her work from
6
We note that the declaration of Sarjak India’s president, upon which Sarjak’s special
appearance partially relied, denied that Sarjak conducted business in Texas. But
Sarjak did not rely on this declaration to support its argument on appeal that it did
not conduct business in Texas.
34
overseas. Her communications with Sarjak included having her set up Sebert
Shipping as Sarjak’s wholly owned Texas subsidiary. Semons also communicated
with Sarjak about the issues she encountered while attempting to collect tariffs that
Sarjak’s prior agent failed to collect. Sarjak in turn communicated with a tariff
company and its legal counsel before advising Semons that she could not collect the
tariffs.
We look to the quality and nature of communications between a resident and
nonresident to determine whether the communications establish purposeful
availment. Old Republic, 549 S.W.3d at 560; see Michiana, 168 S.W.3d at 790–92
(disapproving of direct-a-tort theory under which specific jurisdiction is necessarily
established merely by allegations or evidence that nonresident directed tort at Texas
resident from another state). Sarjak’s communications with Semons concerned her
employment and the collection of tariffs owed to Sarjak. Sarjak does not dispute that
these communications are purposeful contacts with Texas that are substantially
related to the operative facts of the litigation. See Old Republic, 549 S.W.3d at 559.
Therefore, Sarjak did not negate Semons’s jurisdictional allegations regarding
communications between Sarjak and Semons. See id.
3. Substantial Connection and Fair Play and Substantial Justice
Sarjak does not dispute that its forum contacts are substantially related to the
operative facts of Semons’s claims. See Moki Mac, 221 S.W.3d at 585 (holding that
35
nonresident defendant’s purposeful forum contacts must be substantially connected
to operative facts of litigation to confer specific personal jurisdiction on defendant).
Nor does Sarjak dispute that exercising jurisdiction over it would not offend
“traditional notions of fair play and substantial justice.” See Old Republic, 549
S.W.3d at 559 (quoting Int’l Shoe Co., 326 U.S. at 316). Because Sarjak
“purposefully avail[ed] itself of the privilege of conducting activities [in Texas], thus
invoking the benefits and protections of its laws,” we conclude that the trial court
did not err by denying Sarjak’s special appearance. See id. (quoting Retamco
Operating, 278 S.W.3d at 338).
We overrule Sarjak’s sole issue on appeal.
Conclusion
We affirm the county court’s order denying Sarjak’s special appearance.
April L. Farris
Justice
Panel consists of Justices Landau, Guerra, and Farris.
36