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Professional Association of Golf Officials v. Phillips Campbell & Phillips, L.L.P.

Court of Appeals of Texas, Second District, Fort Worth

December 27, 2013

PROFESSIONAL ASSOCIATION OF GOLF OFFICIALS, APPELLANT
v.
PHILLIPS CAMPBELL & PHILLIPS, L.L.P. AND PATRICK C. CAMPBELL JR., APPELLEES

FROM THE 96TH DISTRICT COURT OF TARRANT COUNTY

PANEL: MCCOY and GABRIEL, JJ; and DIXON W. HOLMAN (Senior Justice, Retired, Sitting by Assignment).

MEMORANDUM OPINION[1]

LEE GABRIEL JUSTICE

Appellant Professional Association of Golf Officials (PAGO) appeals from the trial court's order granting a special appearance filed by Appellees Phillips Campbell & Phillips, L.L.P. (Phillips LLP) and Patrick C. Campbell Jr. (Campbell) and dismissing PAGO's claims for lack of personal jurisdiction. We affirm.

I. BACKGROUND

A. Jurisdictional Facts

PAGO is a labor union representing golf tournament officials employed by three professional golf-tour organizations: the PGA Tour, the Nationwide Tour, and the Champions Tour (collectively, the Tour).[2] PAGO was organized by Phillips LLP in Pennsylvania and had its principal place of business in Pennsylvania at Phillips LLP's office. PAGO's corporate income tax returns through 2010 listed Pennsylvania as its tax residence, and PAGO used Phillips LLP's Pennsylvania office and support staff "for its administrative and support needs, such as answering phones, storing records, bookkeeping, and billing." Phillips LLP is a Pennsylvania law firm with one office located in Pennsylvania. None of its attorneys are licensed to practice law in Texas, and it does not market itself to Texas residents.

In 1992, PAGO entered into an agreement with Phillips LLP under which PAGO would pay Phillips LLP an annual fee plus a percentage of each member's per annum compensation in exchange for its legal representation of PAGO. PAGO is governed by a board of directors made up of six directors and a president. Only the president may "supervise, conduct[, ] and control all the business and affairs of [PAGO] and its officers." Members of PAGO were represented exclusively by PAGO "regarding wages, hours[, ] and terms and conditions of employment" and gave PAGO complete authority to act on their behalf. PAGO's primary counsel at Phillips LLP for the operative time period was Campbell.

Phillips LLP and Campbell negotiated collective-bargaining agreements with the tour on PAGO's behalf. During Phillips LLP's representation, PAGO occasionally would conduct board meetings telephonically where board members would call in and discuss business matters with Campbell. One board member, Rich Pierson, was a Texas resident and attended these meetings by phone from his home in Texas. Campbell would also communicate with the board members by mail and email.

In 2007, Phillips LLP and PAGO signed another retainer agreement stating that Phillips LLP would serve as PAGO's counsel from January 1, 2007 through December 31, 2011, which would automatically extend through December 31, 2015 unless written intent to terminate was given at least 180 days before December 31, 2011.[3] At some point after this agreement, PAGO became concerned that Phillips LLP was failing to negotiate favorable terms in its collective-bargaining agreement with the Tour: "Specifically, Plaintiff lost salary and benefits, automobile and automobile insurance, first class travel, and a number of other items. To make matters worse, [Phillips LLP and Campbell] advised [PAGO] not to challenge the Tour by and through the grievance process in an effort to keep a peaceful relationship."

The board of directors held its annual meeting in Texas on December 13 and 14, 2010, and discussed the loss of the automobile and automobile-insurance benefit. The location for the meeting was chosen by PAGO's board of directors. Campbell attended the meeting. At that time, PAGO's president was Mark Dusbabek. The relationship between PAGO and Phillips LLP continued to deteriorate, and PAGO decided to fire Phillips LLP. In late May 2011, Dusbabek, who was in Texas officiating the HP Byron Nelson Championship, called Campbell in Pennsylvania from his cell phone and verbally terminated the retainer agreement. On June 1, 2011, PAGO moved its headquarters to Texas. The next day, Campbell sent Dusbabek an email expressing "disappoint[ment]" with PAGO's decision and asking how to resolve their disagreements.[4] On June 6, 2011, Dusbabek sent Campbell a letter formally terminating the retainer agreement and requesting that PAGO's files be forwarded to PAGO's new attorney located in Texas.[5] Dusbabek also informed Campbell that Phillips LLP "has been paid handsomely for the services provided and we do not believe any compensation is due and owing." On November 9, 2011, PAGO paid Campbell $37, 922.00 "in complete satisfaction of the amounts claimed to be due and owing." On the check, PAGO's treasurer at the time, John Lillvis, noted PAGO's address as being located in Orange City, Florida.[6]

B. Procedural Facts

Phillips LLP filed a writ of summons in Pennsylvania state court on February 3, 2012, seeking to collect the amounts it believed PAGO still owed under the retainer agreement.[7] PAGO filed a petition in the trial court on March 1, 2012, raising claims against Phillips LLP and Campbell for legal malpractice, breach of fiduciary duty, and breach of contract. PAGO also requested a declaratory judgment that it properly terminated the retainer agreement and that it had fully paid Phillips LLP. Phillips LLP and Campbell filed a special appearance arguing that the trial court did not have personal jurisdiction over them. See Tex. R. Civ. P. 120a(1). PAGO amended its petition and alleged twenty-eight "venue" facts in an attempt to show personal jurisdiction over Phillips LLP and Campbell. The trial court held a non-evidentiary hearing and granted the special appearance, dismissing PAGO's claims for lack of personal jurisdiction. The trial court then entered the following "findings of fact" supporting its conclusion of law that personal jurisdiction over Phillips LLP and Campbell was not present:

1. Defendants are not, and have never been, residents of Texas or domiciled in Texas.
2. Defendants are not required to maintain a registered agent for service in Texas and [have] not registered with the Texas Secretary of State's office.
3. Defendants do not engage in business in Texas within the meaning of [section 17.042] . . . of ...

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