Milliard P. Williams v. Frank J. Pichichero and Linda Pichichero--Appeal from 38th Judicial District Court of Medina County

MEMORANDUM OPINION

No. 04-06-00211-CV

Millard P. WILLIAMS,

Appellant

v.

Frank J. PICHICHERO and Linda L. Pichichero ,

Appellees

From the 38th Judicial District Court, Medina County, Texas

Trial Court No. 05-06-17417-CV

Honorable Mickey Pennington , Judge Presiding

Opinion by: Catherine Stone , Justice

Sitting: Catherine Stone , Justice

Sandee Bryan Marion , Justice

Rebecca Simmons , Justice

Delivered and Filed: August 9, 2006

AFFIRMED

This is an interlocutory appeal from an order denying a special appearance of an out-of-state defendant, Millard Williams. See Tex. Civ. Prac. & Rem. Code Ann. 51.014(a)(7) (Vernon Supp. 2005). We affirm the trial court's order.

Background

Williams, a resident of Louisiana, authorized Catherine and Mike Daylong (the "Daylongs"), to sell approximately 385 acres of real property he owns in Medina County, Texas. Pursuant to the authority Williams granted them, the Daylongs, who reside on the property, placed for sale signs on the property and advertised it on the internet and in various Texas newspapers.

Frank and Linda Pichichero (the "Pichicheros"), who reside in Florida, learned about Williams's property after a friend saw the for sale signs the Daylongs had placed on the property. The Pichicheros contacted the Daylongs at the number listed on the signs to inquire about the property. When the Pichicheros spoke with the Daylongs, the Daylongs allegedly held themselves out as the owners of the property and directed the Pichicheros to the internet web site providing information about the property.

The Pichicheros made arrangements to visit the property following their conversation with the Daylongs. When the Pichicheros visited the property, they informed the Daylongs that they were only interested in purchasing part of the property. The Pichicheros identified the portion of the property they were interested in by going around the perimeter of the desired parcel with the Daylongs. Although neither the Pichicheros nor the Daylongs knew the precise acreage of the parcel, everyone knew that the Pichicheros desired to purchase this specific portion of the property. The Pichicheros, however, left Texas without making an offer on the land.

Mr. Pichichero, who wanted to purchase the land he and his wife identified to the Daylongs as a gift for his wife, came back to Texas without Mrs. Pichichero in December 2004 to meet with the Daylongs. Mr. Pichichero and the Daylongs negotiated the terms of the sale and drafted the following handwritten document at the conclusion of their meeting:

Intent to Purchase Land

The sellers, Mike [and] Catherine Daylong, hereby agree in principle to sell Frank J. and Linda L. Pichichero approximately 225 acres of the property situated.

A plat of 384.441 Acres of land situated about 14.8 miles 512 30 of Hondo, in Medina County, Texas.

Purchase price $1750/acre. Final sale price to be determined after survey is completed. Terms are cash to seller at closing. Closing to occur on or before April 1, 2005.

In consideration buyer to provide $5000 earnest money deposit. (1)

Before the document was finalized, the Daylongs contacted Williams to confer with him about the terms and conditions of the sale. Williams advised the Daylongs concerning various provisions of the agreement and authorized the Daylongs to sign the agreement with the requested modifications. Upon receiving William's consent to the terms and conditions of the sale, the Daylongs signed the "Intent to Purchase Land" agreement.

The Pichicheros delivered to the Daylongs the $5,000 earnest money deposit required under the terms of the sale agreement, which the Daylongs deposited into a Texas bank account they controlled, and the Daylongs ordered a survey to be conducted on the property. A survey plat and metes bounds description of the land subject to sale was provided to the Daylongs and the Pichicheros. This survey showed that the property subject to sale consisted of 240 acres of land. (2)

Over the ensuing weeks, the Pichicheros and the Daylongs communicated by email concerning the sale. During these communications, the Pichicheros discussed the possibility of purchasing additional acreage. The Pichicheros, however, for financial reasons, decided against enlarging their purchase beyond the property forming the basis of their original sale agreement.

The Pichicheros delivered a copy of the sale agreement to attorney Thomas Rothe and instructed Rothe to close on the sale. Rothe met with the Pichicheros and the Daylongs to determine which party would bear the costs of closing. The parties reached an oral agreement concerning the distribution of these costs and Rothe prepared a Farm and Ranch Contract memorializing the parties' agreement. The Farm and Ranch Contract also included the terms from the "Intent to Purchase Land" document signed by both the Daylongs and the Pichicheros.

Although the Farm and Ranch Contract contained the same essential terms as the "Intent to Purchase Land" document, the Daylongs refused to sign the contract. The Daylongs complained that there were typographical errors in the contract and that the attorney needed to add certain restrictive covenants to the contract that were not part of the original sale agreement. For example, the Daylongs requested the attorney to add covenants restricting the Pichicheros from placing mobile homes on the property or from subdividing the property. Rothe corrected the typographical errors cited by the Daylongs and prepared several drafts of proposed restrictive covenants, but the Daylongs still refused to sign the Farm and Ranch Contract. (3) Because the Daylongs and Williams refused to sign the Farm and Ranch Contract, the Pichicheros could not close on the property. (4)

The Pichicheros filed suit against the Daylongs and Williams, claiming breach of contract, (5)DTPA violations, negligent misrepresentation, fraud, and conversion. Williams filed a special appearance in response to the suit, asserting he has insufficient contacts with Texas to give rise to personal jurisdiction in this case. (6) The trial court, however, denied Williams's special appearance. In support of its ruling, the trial court entered the following findings of fact and conclusions of law:

1. FINDINGS OF FACT

1. [Williams] is a resident of Louisiana.

2. [Williams] owns approximately 385 acres of land in Medina County, Texas, and the 240 acres of land which is the subject of this suit and Plaintiffs' claims is a part of said 385-acre tract of land owned by him (said 240-acre tract is herein referred to as "the real property").

***

4. [Williams], as the principal, authorized Defendants, Mike Daylong and Catherine Daylong, to act as his agents for the purposes of selling the real property and the Daylongs had broad approval and authority to act for Williams in Texas concerning the offer for sale, negotiations and sale of the real property to prospective buyers, including Plaintiffs.

5. Defendants, Mike and Catherine Daylong, acted as [Williams's] agents for the purposes of selling the real property and the Daylongs' conduct, acts and omissions concerning the offer for sale, negotiations for the sale of the real property to prospective buyers, including Plaintiffs, as well as their execution of the document entitled "Intent to Purchase Land" dated December 15, 2004, were that of agents for their principal, [Williams].

***

10. The Defendants, Daylongs, as the agents for their principal, [Williams], and with his knowledge and approval, while upon or near the real property in Texas completed the negotiations with Plaintiff, Frank Pichichero, and during part of the negotiations Mike Daylong communicated from Texas directly with [Williams] regarding the terms of the document entitled "Intent to Purchase Land" dated December 15, 2004, and after such telephone conversation the Daylongs executed said document in Medina County, Texas. Catherine Daylong wrote most of the document in her own handwriting.

***

13. [Williams] refused to convey to Plaintiffs the Medina County, Texas real property made the basis of the "Intent to Purchase Land" executed December 15, 2004 by his agents, the Daylongs.

***

2. CONCLUSIONS OF LAW

1. [Williams] failed to negate all bases of personal jurisdiction in order to prevail in his special appearance.

2. This Court has specific personal jurisdiction over [Williams] because the requirements of the Texas long-arm statute and the Due Process Clause of the Fourteenth Amendment are satisfied.

3. This Court has personal jurisdiction over [Williams] because he has purposefully established minimum contacts with Texas and the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice.

4. This court has personal jurisdiction over [Williams] because his conduct and connection with the State of Texas are such that he should reasonably anticipate being haled into court there.

5. This court has personal jurisdiction over [Williams] because the evaluation factors required by [Burger King Corp. v. Radzewicz, 471 U.S. 462, 477 (1985)] weigh in favor of finding personal jurisdiction over [Williams]. Mere distance alone is insufficient to defeat jurisdiction in light of modern transportation and communication . . . The burden on [Williams] in defending this action from Louisiana is no greater than the burden on the Pichicheros in prosecuting their claims from Florida. Texas has an interest in adjudicating this dispute. The real property underlying the parties' contract dispute and subject to the Pichichero entitlement for specific performance is situated in Medina County, Texas. [The] Pichicheros clearly have an interest in receiving effective relief in Texas -- the property lies here as well as two of the other defendants in this cause. Resolution of this matter in Texas promotes efficiency of the judicial systems of both Texas and Louisiana. Moreover, it would [be] impossible to bring this same action in Louisiana, which does not have jurisdiction over title to real property situated in Texas, and which does not have any jurisdiction over the other defendants in this case. To require the Pichicheros to maintain two different actions over the same disputed events against the Daylongs and [Williams] in two separate states adds to the proliferation of lawsuits and could lead to inconsistent results between forums. After careful consideration of these factors, it is unlikely that jurisdiction in Texas would offend traditional notions of fair play and substantial justice particularly when, as here, the nonresident defendant has purposefully established minimum contacts with the forum state.

***

7. For the reasons stated above, the minimum contacts prong of the test is satisfied. [Williams] has purposeful contacts with the forum state that include not only his ownership of the real property underlying the dispute, but also his involvement in the real estate transaction by and through his agents Mike and Catherine Daylong. Furthermore, when considering the fair play factors of . . . Burger King, the evidence is clearly and convincingly in favor of this Court's personal jurisdiction over [Williams].

Standard of Review

Whether a court has personal jurisdiction over a defendant is a question of law. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 805-06 (Tex. 2002). In resolving this question of law, a trial court must frequently resolve questions of fact. Id. at 806. If a trial court issues findings of fact and conclusions of law, we may review the fact findings for legal and factual sufficiency. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). If there is more than a scintilla of evidence to support the finding, the no-evidence challenge fails. Id. at 795. We reverse the ruling for factual insufficiency of the evidence only if the ruling is so against the great weight and preponderance of the evidence as to be manifestly erroneous or unjust. Ho Wah Genting Kintron Sdn Bhd v. Leviton Mfg. Co., 163 S.W.3d 120, 125 (Tex. App.--San Antonio, 2005, no pet.). Unchallenged fact findings are binding on the appellate court. Id. We review de novo the trial court's legal conclusions based on the findings of fact to determine their correctness. BMC Software, 83 S.W.3d at 794. If we determine a conclusion of law is erroneous but the trial court nevertheless rendered a proper judgment, the erroneous conclusion does not require reversal.Id.

Personal Jurisdiction

Personal jurisdiction concerns the power of the court to bind a particular person or party. CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex. 1996). The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provisions of the Texas long-arm statute. BMC Software, 83 S.W.3d at 793. Once the plaintiff pleads sufficient facts to satisfy the long-arm statute, the burden shifts to the defendant to negate all asserted jurisdictional bases. Id.

A Texas court may exercise jurisdiction over a nonresident defendant only if: (1) the Texas long-arm statute authorizes the exercise of jurisdiction; and (2) the exercise of jurisdiction comports with the state and federal constitutional guarantees of due process. Id. at 795. The Texas long-arm statute permits Texas courts to exercise jurisdiction over a nonresident that does business in Texas. Tex. Civ. Prac. & Rem. Code Ann. 17.042 (Vernon 1997). The long-arm statute 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) commission of a tort in whole or in part in Texas; (3) recruitment of Texas residents, directly or through an intermediary located in Texas, for employment inside or outside Texas; or (4) performance of any other acts that may constitute doing business. Id. The Texas long-arm statute extends as far as the federal constitutional requirements of due process will permit. Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991). Thus, the requirements of the long-arm statute are considered satisfied if the exercise of personal jurisdiction comports with federal due process limitations. Id.

A nonresident defendant's contacts with the forum state may give rise to either general or specific jurisdiction. BMC Software, 83 S.W.3d at 795-796. General jurisdiction is established when the defendant has made continuous and systematic contacts with the forum. Id. at 796. Specific jurisdiction is established if the defendant's alleged liability arises from or is related to an activity conducted within the forum. Id.

The "touchstone" of our jurisdictional analysis is whether the nonresident purposefully availed itself of the benefits of conducting business in Texas. Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005). "'[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Id. (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). There are three important aspects to be considered in evaluating purposeful availment. Id. at 785. "First, it is only the defendant's contacts with the forum that count: purposeful availment 'ensures that a defendant will not be haled into a jurisdiction solely as a result of . . . the unilateral activity of another party or a third person.'" Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). Second, the acts relied upon must be "purposeful" rather than "'random, isolated or fortuitous.'" Id. (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984)). Third, a defendant must seek some benefit, advantage, or profit by "availing" itself of the jurisdiction. Id.

"Once it has been determined that the nonresident defendant purposefully established minimum contacts with the forum state, the contacts are evaluated in light of other factors to determine whether the assertion of personal jurisdiction comports with fair play and substantial justice." Guardian Royal, 815 S.W.2d at 228. The following factors, when appropriate, should be considered: (1) the burden on the nonresident defendant; (2) the forum state's interest in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several states in furthering fundamental, substantive social policies. Id. "Only in rare cases, however, will the exercise of jurisdiction not comport with fair play and substantial justice when the nonresident defendant has purposefully established minimum contacts with the forum state." Id. at 231.

Discussion

Williams argues the trial court erred in overruling his special appearance, claiming there is insufficient evidence to support such ruling. The record, however, demonstrates that the trial court had sufficient evidence to conclude Williams had sufficient contacts with the State of Texas to make him subject to the jurisdiction of the courts of this state. The record demonstrates the underlying case centers upon a nonresident's ownership and attempted sale of his Texas real property. A nonresident's ownership of real property in Texas is a sufficient basis for jurisdiction over the nonresident when the ownership of the real property is the subject of the underlying suit. Potkovick v. Reg'l Ventures, Inc., 904 S.W.2d 846, 847 (Tex. App.--Eastland 1995, no writ) ("We conclude that mere ownership of the [Texas] real property alone is insufficient to bestow in personamjurisdiction: the ownership of the real property must be the subject of the underlying suit."). The record in this case clearly demonstrates that Williams's ownership of his Texas real property forms the basis of the Pichicheros' underlying suit. Accordingly, we hold the record shows Williams had sufficient minimum contacts with the State of Texas to subject himself to specific jurisdiction in this state. See id. at 850.

Having concluded Williams had sufficient minimum contacts with Texas, we next turn to whether the exercise of jurisdiction in Texas comports with fair play and substantial justice. We thus examine whether Williams presented a compelling case that the exercise of jurisdiction would be unreasonable. See Guardian Royal, 815 S.W.2d at 231 (stating "it is incumbent upon the defendant to present 'a compelling case that the presence of some consideration would render jurisdiction unreasonable.'"). Williams, however, did not present any evidence or argument addressing the burden that would be placed upon him by litigating in Texas. Nor did Williams present any evidence or argument as to any other consideration which would suggest jurisdiction in Texas would be unreasonable. Williams has therefore failed to discharge his burden regarding the reasonableness of Texas's jurisdiction. See Glattly v. CMS Viron Corp., 177 S.W.3d 438, 450-51 (Tex. App.--Houston [1st Dist.] 2005, no pet.).

Nevertheless, we note that distance alone is not sufficient to defeat the exercise of jurisdiction. Goodenbour v. Goodenbour, 64 S.W.3d 69, 80 (Tex. App.--Austin 2001, pet. denied). Moreover, Texas has a strong interest in adjudicating this dispute because it involves the disposition of Texas real property. The Pichicheros also have an obvious interest in litigating their claims in the state where the property forming the basis of their lawsuit is located and where several of the other defendants (the Daylongs) reside. Nothing in the record suggests that the Daylongs are amendable to the jurisdiction of a Louisiana court; thus, litigating in Texas promotes the interstate judicial system's interest in obtaining efficient resolution of the Pichicheros claims against Williams and the Texas defendants in a single proceeding. Accordingly, we conclude the exercise of personal jurisdiction over Williams comports with traditional notions of fair play and substantial justice.

Conclusion

Based on the foregoing, we hold that the trial court did not err when it denied Williams's special appearance.

Catherine Stone, Justice

1. The face of the document reveals several terms were changed by Mr. Pichichero and the Daylongs during the course of their negotiations. The document reveals the agreement was originally for the sale of "approximately 250 acres of the property" and included a closing date of August 1, 2005. The parties to the agreement, however, crossed out these original provisions and modified the terms of the agreement to provide for the sale of "approximately 225 acres of the property" and included a closing date of April 1, 2005. The parties' initials appear next to the handwritten modifications to the agreement.

2. Upon learning the exact size of the parcel of land they were purchasing, the Pichicheros modified their copy of the "Intent to Purchase Land" to provide for the sale of "approximately 240 acres of the property." None of the parties to the agreement, however, initialed the modifications appearing on the Pichicheros' copy of the agreement.

3. From his conversations with the Daylongs, Rothe discovered that Williams was the actual owner of the property in dispute. Rothe allegedly conveyed the information concerning Williams to the Pichicheros, who claim this was the first time they learned about Williams's interest in the property.

4. Although the sale did not close, the Daylongs, at the direction of Williams, retained the Pichicheros' $5,000 earnest money deposit.

5. The petition invokes the doctrines of promissory estoppel, specific performance, and reformation.

6. Williams later filed a motion for summary judgment, subject to the ruling on the special appearance, asking the court to grant him summary judgment on the ground that the court lacks jurisdiction over his person.