Triple SSS Aviation, Ltd. v. Ron Adkison--Appeal from 4th District Court of Rusk County

NO. 12-07-00328-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

TRIPLE SSS AVIATION, LTD., APPEAL FROM THE FOURTH

APPELLANT

V. JUDICIAL DISTRICT COURT OF

RON ADKISON,

APPELLEE RUSK COUNTY, TEXAS

MEMORANDUM OPINION

Triple SSS Aviation, Ltd. appeals from the trial court s denial of its special appearance contesting jurisdiction in this declaratory judgment action filed by Ron Adkison. In its sole issue, Triple SSS contends the trial court erred in exercising long arm jurisdiction over it. We reverse and render.

Background

Triple SSS is a corporation organized under the laws of Delaware, and its principal office is located in Michigan. Triple SSS contacted a Missouri broker for help in finding an airplane to purchase. One of that broker s clients was Texas resident Adkison who wished to sell his 1981 Cessna airplane. After negotiations, Adkison and Triple SSS entered into a written agreement for the sale of Adkison s airplane. Pursuant to that agreement, Triple SSS deposited $50,000.00 into an escrow account held by Insured Aircraft Title Services, an Oklahoma corporation. A few months later, but before the parties had worked out all the details, Triple SSS decided against purchasing the airplane.

Adkison filed a declaratory judgment action in his home county to determine ownership of the escrowed funds. Triple SSS filed a special appearance contesting the court s jurisdiction over it and a motion to stay proceedings because an identical lawsuit was filed in Michigan. Edward Mohrbacher, the chief financial officer of Triple SSS, provided an affidavit in which he stated that Triple SSS is not authorized to do business in Texas, has never done business in Texas, has no office, mailbox, or employees in Texas, does not manufacture a product that could enter the stream of commerce in Texas, does not advertise in Texas, has no clientele in Texas, has never solicited business in Texas, and does not maintain an internet website that could be viewed by a Texas resident.

At the hearing, the parties presented argument, and Adkison presented brief testimony stating that some negotiations took place in Texas and not all test flights took place in Michigan. Also, he received at least three telephone calls from Gary Salerno, the principal of Triple SSS. On cross examination, he stated that a great many of the negotiations were through the broker in Missouri and he never met face to face with anyone from Triple SSS. Without entering findings of fact or conclusions of law, the trial court denied the special appearance and the motion to stay.

Jurisdiction

In its sole issue, Triple SSS contends the trial court erred in exercising long arm jurisdiction over it. Triple SSS argues that it has not purposely availed itself of the benefits and protections of Texas through minimum contacts and the exercise of jurisdiction over it offends traditional notions of fair play and justice. Therefore, because it did not have substantial, continuous, and systematic contacts with Texas of a general business nature, nor did it have sufficient contacts based on the transaction at issue, the trial court did not have jurisdiction over it and should have dismissed all claims against it.

Applicable Law

The trial court s denial of a special appearance may be challenged on legal and factual sufficiency grounds. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). For legal sufficiency issues, if there is more than a scintilla of evidence to support the finding, the no evidence challenge fails. Id. at 795. The Texas long arm statute governs Texas courts exercise of jurisdiction over nonresident defendants. See Tex. Civ. Prac. & Rem. Code Ann. 17.041-.045 (Vernon 1997 & Supp. 2007). That statute extends Texas courts personal jurisdiction as far as the federal constitutional requirements for due process will permit. Marchand, 83 S.W.3d at 795. Personal jurisdiction over nonresident defendants is constitutional when two conditions are met: 1) the defendant has established minimum contacts with the forum state, and 2) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Int l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945). Minimum contacts analysis focuses solely on the actions and reasonable expectations of the defendant. Michiana Easy Livin Country, Inc. v. Holten, 168 S.W.3d 777, 790 (Tex. 2005). A defendant should not be subject to a foreign court s jurisdiction based upon random, fortuitous, or attenuated contacts. Marchand, 83 S.W.3d at 795. Minimum contacts may be established only through 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. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528 (1985). The actions of the nonresident defendant must justify a conclusion that the nonresident defendant should reasonably anticipate being called into court in the forum state. Id. 471 U.S. at 474, 105 S. Ct. at 2183. Only the defendant s forum state contacts matter, not anyone else s. IRA Res., Inc. v. Griego, 221 S.W.3d 592, 596 (Tex. 2007).

Personal jurisdiction exists if the nonresident defendant s minimum contacts give rise to either specific jurisdiction or general jurisdiction. Marchand, 83 S.W.3d at 795. Specific jurisdiction is established if the defendant s alleged liability arises from or is related to an activity conducted within the forum. Id. at 796. A defendant can trigger specific jurisdiction only through its own conduct, not the unilateral acts of third parties. Griego, 221 S.W.3d at 596.

General jurisdiction is present when a defendant s contacts in a forum are continuous and systematic so that the forum may exercise personal jurisdiction over the defendant even if the cause of action did not arise from or relate to activities conducted within the forum state. Marchand, 83 S.W.3d at 796. General jurisdiction requires a showing that the defendant conducted substantial activities within the forum, a more demanding minimum contacts analysis than for specific jurisdiction. Id. at 797. Usually, the defendant must be engaged in longstanding business in the forum state, such as marketing or shipping products, or performing services or maintaining one or more offices there. PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 168 (Tex. 2007). In contrast to specific jurisdiction, the incident made the basis of the suit should not be the focus in assessing continuous and systematic contacts, contacts on which jurisdiction over any claim may be based. Id. at 169.

Analysis

In determining whether a Texas trial court may exercise personal jurisdiction over Triple SSS based on general jurisdiction, we consider its activities within Texas that are not related to the contract at issue. See id. Triple SSS is not a Texas corporation and does not have an office in Texas. It does not advertise in Texas, solicit business in Texas, have clients or employees in Texas, manufacture a product that could be sold in Texas, or maintain an internet website that could be viewed by Texans. It is not engaged in a business in Texas, longstanding or otherwise. Thus, there is no showing that Triple SSS conducted any activities in Texas and no evidence of continuous and systematic contacts with Texas. See Marchand, 83 S.W.3d at 796-97. We conclude there is no evidence to support a finding of general jurisdiction.

We next consider whether Triple SSS, through its conduct, triggered specific jurisdiction. See Griego, 221 S.W.3d at 596. Triple SSS contacted a broker located in Missouri. The Missouri broker facilitated contact between Triple SSS and Texas resident Adkison. Therefore, the initial contact does not support a claim of purposeful availment. Further, Triple SSS s contacts with Texas, talking with Adkison on the phone about details of the sale, are too inconsequential to support a claim that it purposefully directed its activities here. See Griego, 221 S.W.3d at 598.

Additionally, the contract includes a choice of law provision specifying that the contract would be governed by the laws of Michigan. While a foreign choice of law provision does not prevent Texas courts from also exercising personal jurisdiction, a choice of law provision cannot be ignored when weighing purposeful availment. Id. This contract provision demonstrates that Triple SSS never anticipated Texas jurisdiction. See id. at 599; Michiana, 168 S.W.3d at 792.

Adkison asserts that delivery of the plane was to take place in Texas and that constitutes an additional contact. The contract did not specify the place of delivery and the record is not clear that the parties had ever agreed on that detail. However, assuming that Triple SSS was to take delivery in Texas, we would not give weight to that factor in determining whether Triple SSS purposefully availed itself of Texas courts because that would cause the airplane to become the agent for service of process, a conclusion the United States Supreme Court has expressly rejected. See World-Wide Volkswagens Corp. v. Woodson, 444 U.S. 286, 296, 100 S. Ct. 559, 566-67, 62 L. Ed. 2d 490 (1980). The important factor is the extent of Triple SSS s activities. Id. at 789.

Triple SSS purposely availed itself of a Missouri broker, not a Texas resident. Contact between the foreign corporation and Texas resident was initiated by a foreign third party. Most of the negotiations were through that third party. Test flights and inspections took place in Michigan. Adkison testified that not all test flights took place in Michigan, but he did not say where the others took place. There were no face to face meetings between the parties. The contract s choice of law provision names Michigan, not Texas. The title company and the disputed money are in Oklahoma. The only contact with Texas are phone calls to Adkison by a representative of Triple SSS during the course of negotiations. Triple SSS s contacts are minimal and fortuitous and it has not purposefully availed itself of the privilege of conducting activities within Texas. Triple SSS did nothing to indicate or to support an inference of any purpose to exercise the privilege of doing business in Texas. See U-Anchor Adver., Inc. v. Burt, 553 S.W.2d 760, 763 (Tex. 1977). Under these circumstances, this single contract with a Texas resident does not alone constitute a sufficient contact for due process purposes and Triple SSS is not subject to specific jurisdiction. See Burger King Corp., 471 U.S. at 478, 105 S. Ct. at 2185; Griego, 221 S.W.3d at 597-98. We sustain Triple SSS s sole issue.

 Conclusion

The trial court did not have personal jurisdiction over Triple SSS because Triple SSS had insufficient minimum contacts to give rise to either specific jurisdiction or general jurisdiction.

We reverse the trial court s judgment and render judgment dismissing Adkison s claims against Triple SSS for want of jurisdiction.

SAM GRIFFITH

Justice

Opinion delivered January 16, 2008.

Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.

(PUBLISH)