Erlinda Garza v. Aramark Corp.--Appeal from 225th Judicial District Court of Bexar County

MEMORANDUM OPINION
No. 04-06-00358-CV
Erlinda GARZA,
Appellant
v.
ARAMARK CORPORATION,
Appellee
From the 225th Judicial District Court, Bexar County, Texas
Trial Court No. 2006-CI-07304
Honorable Karen H. Pozza, Judge Presiding

Opinion by: Steven C. Hilbig, Justice

 

Sitting: Catherine Stone, Justice

Karen Angelini, Justice

Steven C. Hilbig, Justice

 

Delivered and Filed: August 22, 2007

 

AFFIRMED

This is an appeal from a trial court's order sustaining ARAMARK Corporation's ("ARAMARK") special appearance. In a single point of error Erlinda Garza contends the trial court erred in granting the special appearance. We affirm.

 

FACTUAL AND PROCEDURAL BACKGROUND

Garza, employed by Citigroup, Inc., filed a personal injury suit against ARAMARK alleging that during the course and scope of her employment she slipped and fell in a cafeteria operated by ARAMARK. When ARAMARK failed to answer, Garza obtained a default judgment. ARAMARK filed a special appearance and a motion for new trial. With the agreement of all parties, the trial court entered an order granting the motion for new trial and setting aside the default judgment.

Following a hearing, the trial court orally sustained ARAMARK's special appearance. Garza filed a motion asking the court to reconsider the verbal order sustaining ARAMARK's special appearance and ARAMARK filed a response. After a hearing on the motion, the trial court entered a written order sustaining ARAMARK's special appearance, dismissing Garza's claims against ARAMARK, denying Garza's motion for rehearing, and granting leave for Garza to further amend her pleadings. The day after this hearing Garza filed an amended petition against ARAMARK and added ARAMARK Services, Inc. as a defendant, but otherwise left the petition as originally filed. ARAMARK Services, Inc. filed a motion for severance asking the court to sever Garza's action against it from the action against ARAMARK. Garza agreed to the severance. Following the court's order granting the severance, Garza perfected this appeal in which she contends the trial court erred in granting ARAMARK's special appearance. APPLICABLE AUTHORITY

Burden of Proof and Standard/Scope of Review

The plaintiff has the initial burden of pleading sufficient allegations to invoke jurisdiction over a nonresident defendant under the Texas long-arm statute. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007); Transportadora Egoba S.A. De C.V. v. Arredondo, 217 S.W.3d 603, 607 (Tex. App.-San Antonio 2006, pet. denied). If the plaintiff meets this burden, the nonresident defendant must then negate all bases of jurisdiction in those allegations. Id. Whether a court has personal jurisdiction over a defendant is a question of law and thus any ruling on a special appearance is reviewed de novo. Id. To resolve issues of personal jurisdiction, a trial court must often determine questions of fact. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002), cert. denied, 537 U.S. 1191 (2003); Arredondo, 217 S.W.3d at 607. As here, when the trial court does not issue findings of facts and conclusions of law, we presume the trial court resolved all factual disputes in favor of the judgment. Drugg, 221 S.W.3d at 574; Arredondo, 217 S.W.3d at 607. These implied findings are not conclusive and may be challenged for sufficiency when the appellate record includes a reporter's record and a clerk's record. Arredondo, 217 S.W.3d at 606 (citing BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002)). (1)

Personal Jurisdiction

"[P]ersonal jurisdiction concerns the court's power to bind a particular person or party." CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex. 1996) (orig. proceeding). Before a Texas court may assert personal jurisdiction over a nonresident defendant, two requirements must be met: (1) it must be authorized by the Texas long-arm statute, see Tex. Civ. Prac. & Rem. Code Ann. 17.041-.069 (Vernon 1997 & Vernon Supp. 2006); and (2) it must be consistent with the guarantees of due process. Drugg, 221 S.W.3d at 574; Arredondo, 217 S.W.3d at 607. Sections 17.043-.044 of the Texas long-arm statute authorize personal jurisdiction over a nonresident defendant who "does business" in Texas. Tex. Civ. Prac. & Rem. Code Ann. 17.043-.044 (Vernon 1997). (2) But the statute's broad language reaches only as far as the following federal due process criteria permit. Drugg, 221 S.W.3d at 575; Arredondo, 217 S.W.3d at 607. The due process clause permits a state to exert personal jurisdiction over a nonresident defendant only if that defendant has sufficient minimum contacts with the forum state and the exercise of jurisdiction will not offend "'traditional notions of fair play and substantial justice."' IRA Resources, Inc. v. Griego, 221 S.W.3d 592, 596 (Tex. 2007) (quoting Marchand, 83 S.W.3d at 795 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)); Arredondo, 217 S.W.3d at 607.

Minimum Contacts

The minimum-contacts analysis requires that the nonresident defendant "'purposefully avail[] itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.'" Drugg, 221 S.W.3d at 575 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958) (quoting Int'l Shoe, 326 U.S. at 319)). Purposeful availment is the "'touchstone of jurisdictional due process.'" Griego, 221 S.W.3d at 596 (quoting Michiana, 168 S.W.3d at 784 (quoting Hanson, 357 U.S. at 253)). There are three components to a purposeful availment inquiry. Drugg, 221 S.W.3d at 575. First, only the nonresident defendant's contacts with the forum are relevant; the unilateral activities of another party or a third person are irrelevant. Id. Second, the contacts must be purposeful rather than "random," fortuitous," or "attenuated." Id.; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985); Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991) (holding that underlying rationale for purposeful availment requirement is to prevent nonresident defendant from being subjected to personal jurisdiction based on "random," "fortuitous," or "attenuated" contacts). Finally, the nonresident defendant "must seek some benefit, advantage, or profit by 'availing' itself of the jurisdiction." Drugg, 221 S.W.3d at 575 (quoting Michiana, 168 S.W.3d at 785). In analyzing the contacts, it is not the number of contacts, but rather the nature and quality of the contacts that is important. Arredondo, 217 S.W.3d at 607-08.

Minimum contacts can give rise to either specific or general jurisdiction. Drugg, 221 S.W.3d at 575; Arredondo, 217 S.W.3d at 608. General jurisdiction exists when the nonresident defendant's contacts with the forum state are continuous and systematic, even if the plaintiff's cause of action does not arise from or relate to such contacts. Drugg, 221 S.W.3d at 575. In contrast, specific jurisdiction is established if the nonresident defendant's alleged liability arises out of or is related to an activity conducted by the defendant within the forum state. Id. at 576.

 

Traditional Notions of Fair Play and Substantial Justice

Even if minimum contacts are established, a court may not exercise jurisdiction over a nonresident defendant unless the exercise comports with traditional notions of fair play and substantial justice. Arredondo, 217 S.W.3d at 609 (citing CMMC v. Salinas, 929 S.W.2d 435, 437 (Tex. 1996)). It is incumbent on a nonresident defendant to show that jurisdiction would be unreasonable. Arredondo, 217 S.W.3d at 609 (citing Guardian Royal, 815 S.W.2d at 231). Thus, any contacts with the forum state must be evaluated in light of factors beyond mere contacts with the forum to determine whether the exercise of personal jurisdiction comports with fair play and substantial justice. Id. (citing Guardian Royal, 815 S.W.2d at 232). (3)

ANALYSIS

We begin by determining whether this case is subject to an analysis based on specific jurisdiction, general jurisdiction, or both. In her petition Garza invokes only specific jurisdiction by contending ARAMARK negligently operated a cafeteria causing her to fall and suffer injuries. In her motion for rehearing, however, Garza invoked general jurisdiction by alleging ARAMARK owned personal property in Texas. In support of this latter allegation, Garza attached documents from the Bexar Appraisal District ("BAD"), which she alleged established ARAMARK owned and paid taxes on personal property in Texas. An allegation that an entity owns and pays personal property taxes in Texas invokes a claim of general jurisdiction. See Drugg, 221 S.W.3d at 575; Arredondo, 217 S.W.3d at 608. During the hearing on her motion for rehearing, Garza also attempted to invoke general jurisdiction by claiming ARAMARK had continuous and systematic contacts with Texas through placement of ads in Internet and phone directories, solicitation of employees in Texas, and purchase of Texas worker's compensation insurance. However, as noted in footnotes one and two, Garza failed to plead these allegations in any document filed in the trial court and failed to properly admit any evidence before the court to support these allegations. Accordingly, we need only determine if ARAMARK negated Garza's allegations of jurisdiction based upon the commission of a tort on property it operated in Texas (specific) and ownership of other personal property in Texas (general). See Drugg, 221 S.W.3d at 574; Arredondo, 217 S.W.3d at 607.

In its special appearance, ARAMARK claimed it is a nonresident corporation that is not licensed to conduct business in Texas and is not required to maintain, and does not maintain, a registered agent in Texas. It further claimed it does not own any property in Texas and does not operate any business in Texas including the cafeteria where Garza was allegedly injured.

In support of its special appearance, ARAMARK originally submitted an affidavit from its vice-president of taxes, Michael J. O'Hara. He stated ARAMARK is Delaware corporation and is registered to do business only in Pennsylvania. According to O'Hara, ARAMARK may only conduct business in Delaware and Pennsylvania where it maintains registered agents. Its two hundred employees work in Pennsylvania and are paid from a bank account in Pennsylvania. The corporate officers are in Pennsylvania. ARAMARK is not licensed or qualified to do business in Texas and in fact does not do business in Texas. ARAMARK has never employed anyone in Texas, does not maintain offices in Texas, has not recruited any Texas residents for employment, and is not bound to perform any contracts in Texas.

It appears that on the basis of this affidavit, the trial court verbally granted ARAMARK's special appearance. Garza filed a motion for rehearing claiming O'Hara's affidavit was "false" and "made and entered in bad faith." She argued the affidavit was not credible and that absent any credible evidence that ARAMARK did not do business in Texas the special appearance should be denied. In support of her argument Garza attached an exhibit to her motion for rehearing consisting of certified copies of personal property tax records from the BAD. The records listed four separate accounts, which identified "ARAMARK CORPORATION" as the owner of certain personal property in Bexar County. According to Garza, this evidence establishes ARAMARK owns personal property in Texas, pays personal property taxes in Texas, and therefore does business in Texas.

ARAMARK filed a response to Garza's motion for rehearing and specifically denied the accuracy of the BAD's tax records. ARAMARK claimed the records are incorrect and the result of an administrative error, noting that ARAMARK "has never paid the property taxes on the Accounts." In support, ARAMARK submitted another affidavit from O'Hara in which he stated he prepared and signed tax returns for ARAMARK. He reasserted his denial that ARAMARK engaged in any business enterprises in Texas. As to the specific tax accounts referenced by Garza, O'Hara stated ARAMARK is not the owner of any of the personal property described in the accounts and the inclusion of ARAMARK on the accounts is an administrative error. He averred ARAMARK has never paid property taxes on those accounts.

ARAMARK also provided an affidavit from Joseph Knob, the tax manager in the corporate tax department that oversees the filing of personal property taxes for ARAMARK and "related entities." (4) Knob stated the account information relied upon by Garza is incorrect. He averred ARAMARK is not and has never been the owner of any of the property associated with those accounts. According to Knob, the documents from the BAD erroneously listed "ARAMARK CORPORATION" as the owner. ARAMARK has never paid property taxes on those accounts.

Knob then addressed each account relied upon by Garza. With regard to the account covering property located on East Market Street, Knob stated the correct owner of the personal property at that location was ARAMARK Sports and Entertainment Services, Inc. In support of this assertion, he attached a copy of the Business Personal Property Rendition filed by ARAMARK Sports and Entertainment Services, Inc. with the BAD that shows the property was owned by ARAMARK Sports and Entertainment Services, Inc. and not ARAMARK Corporation. Knob also attached correspondence he prepared and sent to the BAD pointing out the error in its records and asking that the records be corrected. He and Alexander P. Marino, vice president of ARAMARK Sports and Entertainment Services, Inc. and ARAMARK Refreshment Services, Inc., also issued a joint, notarized letter to the BAD advising of the ownership error on the East Market street account and asking that it be corrected.

Knob also denied ARAMARK owned the personal property located on Panam Expressway. According to Knob, that property is owned by ARAMARK Refreshment Services, Inc. Knob and Marino also sent a joint, notarized letter to the BAD with regard to this account advising that the correct owner of the property was ARAMARK Refreshment Services, Inc.

As to the remaining two accounts that covered personal property located on SBC Center Parkway and Montana Street, Knob again denied ownership by ARAMARK. He stated the personal property at these locations is owned by ARAMARK Sports and Entertainment Services, Inc. He prepared correspondence to Arthur P. Veltman & Associates, Inc., the property tax consulting firm for these properties, instructing them to correct the errors in the BAD's records. Veltman & Associates was also instructed to do the same with regard to a third account though the records for this account were not produced by Garza.

The evidence described above is the only evidence considered by the trial court in granting ARAMARK's special appearance given Garza's failure to properly introduce any other evidence. The question is whether this evidence supports the trial court's decision to grant the special appearance-that is, did ARAMARK negate all bases of jurisdiction alleged by Garza. We hold it did. ARAMARK's evidence showed it does not do business in Texas, thereby defeating jurisdiction under the "doing business" provision of section 17.042 of the Texas Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code Ann. 17.042 (Vernon Supp. 2007). Moreover, the evidence established that any exercise of jurisdiction in this case would be inconsistent with due process guarantees. See Drugg, 221 S.W.3d at 574; Arredondo, 217 S.W.3d at 607. While certain ARAMARK entities operate businesses in Texas and own personal property here, ARAMARK has never purposefully availed itself of the privilege of conducting activities in Texas. See Drugg, 221 S.W.3d at 575. Based on the record, ARAMARK has no contacts with Texas much less relevant, purposeful contacts, and has not sought any benefit, advantage, or profit in Texas. The alleged contacts produced by Garza-ownership of personal property at four locations in Texas-was refuted by ARAMARK. Thus, there was a factual dispute that we must resolve in favor of the trial court's judgment given the absence of any findings of fact and conclusions of law. Id. at 574; Arredondo, 217 S.W.3d at 607.

CONCLUSION

We conclude ARAMARK has no contacts with Texas and the exercise of jurisdiction would offend traditional notions of fair play and substantial justice. Accordingly, we affirm the trial court's judgment granting ARAMARK's special appearance.

 

Steven C. Hilbig, Justice

1. In this case, the appellate record does not contain a reporter's record from the original special appearance hearing. While the trial court's order states it considered the testimony of the plaintiff, the plaintiff did not ask that a record be prepared. Thus, we presume "the trial court considered only the evidence filed with the clerk." See Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 783 (Tex. 2005). There is a record of the hearing on Garza's motion for reheaing. The record does not demonstrate that this hearing was evidentiary in nature. While Garza "marked" four exhibits at the hearing, she did not introduce them into evidence and the trial court never admitted them. The exhibits are not part of the appellate records.

Documents not admitted into evidence may not generally be considered by the appellate court. In re B.R.G., 48 S.W.3d 812, 818 (Tex. App.-El Paso 2001, no pet.); Cox v. Prince, No. 02-03-00175-CV, 2003 WL 22725407, at *1 (Tex. App.-Fort Worth, Nov. 20, 2003, no pet.)(mem.op.). Appellate courts presume the trial court considered only the exhibits properly in evidence. Walton v. Canon, Short & Gaston, 23 S.W.3d 143, 151 (Tex. App.-El Paso 2000, no pet.). We recognize that evidence treated by the parties and the trial court as if it had been admitted is generally considered admitted. E.g., The Travelers Indem. Co. of R.I. v. Starkey, 157 S.W.3d 899, 904 (Tex. App.-Dallas 2005, pet. denied) (citing Sanchez v. Bexar County Sheriff's Dep't, 134 S.W.3d 202, 203-04 (Tex. 2004) (other citations omitted)). However, in this case there is no indication that both parties and the trial court treated Garza's exhibits as if they had been admitted. ARAMARK's counsel never addressed or referred to the exhibits. After the hearing, the trial court stated, "Here. Take your stuff back. I'm not changing anything that I did." Thus we will presume this hearing was nonevidentiary and will only consider evidence filed with the clerk. See Michiana, 168 S.W.3d at 783.

2. Section 17.042 defines "doing business" as: (1) contracting by mail or otherwise with a Texas resident with performance either in whole or in part in Texas; (2) committing a tort in whole or in part in Texas; (3) recruiting Texas residents, directly or through an intermediary located in Texas for employment inside or outside Texas; and (4) performing any other acts that may constitute doing business. Tex. Civ. Prac. & Rem. Code Ann. 17.042 (Vernon 1997). In this case, based on Garza's pleadings, the only applicable provision is (2), the commission of a tort in whole or in part in Texas. While Garza alleged at the hearing on her motion for rehearing that ARAMARK had listed itself in Internet and phone directories, attempted to recruit employees, and obtained worker's compensation insurance, she never pled any of this and never introduced evidence in support thereof at the hearing. Accordingly, these contentions cannot support her claims of personal jurisdiction. See Drugg, 221 S.W.3d at 574 (holding plaintiff has burden of pleading sufficient allegations to invoke jurisdiction under Texas long-arm statute and nonresident defendant must negate all bases of jurisdiction in those allegations); BRG, 48 S.W.3d at 818 (holding trial court only considers properly admitted evidence and documents not admitted into evidence generally may not be considered by appellate court).

3. The factors to be considered include: (1) the burden on the nonresident defendant to defend itself in a foreign legal system; (2) the interests of the forum state in adjudicating the dispute; and (3) the plaintiff's interest in obtaining convenient and effective relief. Arredondo, 217 S.W.3d at 609 (citing Guardian Royal, 815 S.W.2d at 232).

4. That certain ARAMARK entities may be related does not created jurisdiction over ARAMARK. All of the ARAMARK entities at issue in this case are corporations. Separate corporations are presumed to be distinct entities for jurisdictional purposes. Commonwealth Gen. Corp. v. York, 177 S.W.3d 923, 925 (Tex. 2005). Even stock ownership and a related right of control that stock ownership gives to stockholders is insufficient "to destroy distinctness of corporate entities for jurisdictional purposes." Id. In order to coalesce separate corporate entities for jurisdictional purposes, the plaintiff must prove alter ego or otherwise disregard any corporate fiction. See id. Here, there was no allegation or proof that ARAMARK was the alter ego of any other ARAMARK corporation.