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Miles v. Barton

Court of Appeals of Texas, First District

February 23, 2017

JOHN H. BARTON, Appellee

         On Appeal from the 270th District Court Harris County, Texas Trial Court Case No. 2014-39794

          Panel consists of Justices Jennings, Keyes, and Brown.



         Appellant, Borris Miles, sued appellee, John H. Barton ("Barton"), for tortious interference with Miles's Texas-based contracts with co-defendants Dwayne Harris and Paul McCann[1] and knowing participation in a breach of fiduciary duty. Barton filed a special appearance, which the trial court granted. Miles argues, in his sole issue on appeal, that the trial court erred in granting Barton's special appearance because (1) Barton's actions purposefully directed into Texas establish specific jurisdiction as to Miles's claims, (2) physical presence in the forum state is not required to establish specific jurisdiction over a nonresident, and (3) exercising jurisdiction over Barton comports with traditional notions of fair play and substantial justice.

         We affirm.


         According to Miles's pleadings, Harris and McCann own and operate Attentive Hospice, LLC, a Houston, Texas based company that provides in-home hospice care in multiple states, including Texas and Louisiana. Specifically relevant here, the record demonstrates that Harris owned a company called "Attentive Hospice Metairie, LLC" that operated a hospice facility in Metairie, Louisiana ("the Metairie Facility"). The records of the Louisiana Secretary of State show Harris as the only member of this entity.

         In January 2012, Miles and Harris entered into a joint venture agreement ("JVA") to form and operate multiple hospice facilities in Texas and Louisiana that would be operated under the name Attentive Hospice.[2] The JVA provided that Harris "has, and continues to, organize and operate various hospice facilities" in Texas, Louisiana, and Arkansas and that Harris "requested, and Miles agreed to provide, financial and administrative assistance in the organization, operation and development" of the hospice facilities. This enterprise was the basis of the JVA ("the Venture"). The JVA stated that "Miles shall contribute the initial start-up capital for the Venture" and "administrative services to the [hospice facilities]." In return, Miles and Harris agreed to "share in all net profits from the Venture at 50% each for the life of the Venture." They also agreed to "share control and authority at 50% each and all decisions involving expenditures or commitments in excess of $10, 000 shall require unanimous approval of the Venturers." The JVA also stated that "[n]o Venturer shall assign his rights or its interest in this Venture without first obtaining the written approval and waiver of right of first refusal from the other Venturers."

         Miles also alleged that he and Harris entered into a consulting agreement and that Harris breached the terms of this agreement. No consulting agreement is contained in the appellate record.

         Miles alleged that some time near the end of 2012 or beginning of 2013, Barton began negotiations with Harris and Miles to purchase an interest in Attentive Hospice. Miles alleged that Barton called and spoke with him and Harris at their Houston, Texas office and that he informed Barton during this phone call that he had an ownership interest in Attentive Hospice.[3]

         Barton, however, denied that he initiated the negotiations over the Metairie Facility. Rather, he averred that he was contacted by David Parker, who represented himself as a consultant for Harris, regarding an opportunity to purchase an interest in the Metairie Facility. Barton knew Parker because of their previous work together with a different company. According to Barton, Parker informed him that the Metairie Facility was experiencing "serious operational difficulties" because it had lost its medical director and nursing director and had no patients. The state of Louisiana was preparing to shut down the facility, and the facility had approximately $10, 000 in debt. Barton averred that he met with Harris in Louisiana approximately four times regarding the Metairie Facility.

         Miles alleged that Harris sent Barton a proposed "Letter of Intent" ("LOI") to purchase an ownership interest in Attentive Hospice Metairie, LLC and its Metairie Facility. The record shows that Harris emailed Barton and Parker in February 2013, stating, "Hi Guys, Please review and call me with any questions." The email was signed, "Dwayne Harris[, ] Let's Make This Work." Parker averred that the LOI was attached to this email. This LOI listed a purchase price of $150, 000 in exchange for a fifty percent ownership interest in the Metairie Facility. It stated that "[t]he other fifty percent (50%) of ownership interest in the Company will be owned by Dwayne Harris and Borris Miles (the "Current Owners")." Barton did not sign the LOI.

         Barton and Harris executed the "Act of Sale of Membership Interest" regarding the ownership of the Metairie Facility ("Sale Agreement"). This agreement reflected that Harris signed it in Harris County, Texas, on July 17, 2013, while Barton signed it in Louisiana on August 7, 2013. Under the Sale Agreement, Barton paid $10, 000-the amount of the debt of the Metairie Facility-and provided services as the facility's medical director in exchange for a 57.5% ownership interest in the facility. Parker became the nursing director of the facility. Barton found patients and was able to keep the facility open. The Sale Agreement stated that it became effective June 22, 2013.

         The Sale Agreement stated that "no Operating Agreement has been adopted by the member of [Attentive Hospice Metairie, LLC]" and that Harris "currently owns one hundred percent (100%) of the outstanding membership interests in the LLC." The Sale Agreement further stated that Harris, as the seller, warranted "that he is the owner of the ownership interest transferred hereby" and that he "is not obligated to obtain any consent or approval in order to convey his ownership interest in the LLC." Finally, the Sale Agreement stated, "Buyer and Seller further acknowledge that no membership or other certificates evidencing ownership in the LLC have been issued." The records of the Louisiana Secretary of State list Harris as the only member of Attentive Hospice Metairie, LLC. Miles was not a party to the Sale Agreement.[4]

         The records of the Louisiana Secretary of State show that, on July 30, 2013, Harris added Barton and Parker as members of Attentive Hospice Metairie, LLC.[5]

         Harris then allegedly represented to Miles that the Metairie Facility had ceased operating, and Harris quit paying Miles revenues from that facility that would have been due under the JVA.

         Furthermore, Barton averred that he was not aware of the JVA between Miles and Harris until January 14, 2014-after he had acquired his interest in the Metairie Facility-when Miles contacted him and stated that he was a "partner" in the Metairie Facility.

         Miles then filed suit against Harris, McCann, and Barton. Specifically, Miles alleged:

[U]nbeknownst to Miles, Harris continued negotiating with Barton for the sale of interests in the Metairie Facility, and cut [Miles] out of all further negotiations. At all times, Barton knew, or should have known, that [Miles] had valid written contracts concerning the Metairie Facility. Harris failed to inform [Miles] of the negotiations and potential sale or transfer of interest in the Metairie Facility, as required under the [JVA] and the Consulting Agreement.

         Miles alleged that Harris breached the terms of the JVA and consulting agreement by, among other things, failing to give the required notice of the sale and failing to pay Miles his portion of the proceeds from that sale. Miles sued Harris and McCann for breach of contract, and he also sued Harris for fraudulent misrepresentation and breach of fiduciary duty.

         Miles sued Barton for tortious interference with a contract and for knowingly participating in a breach of fiduciary duty. Miles asserted that the JVA gave him a 50% share of control and authority over the Venture, including the Metairie Facility. He alleged that Barton knew or should have known of the existence of Miles's JVA and consulting agreement with Harris and that Barton interfered with those contracts by "negotiating with and ultimately inducing Harris to breach his contract with [Miles]" to sell an ownership or membership interest in the Metairie Facility. Miles further asserted that Barton "has personally availed himself of jurisdiction in this state by conducting business in Texas" and by "purposefully directing acts toward this forum, including the negotiation, entrance and performance of a contract with Harris, a Texas resident, to purchase a business owned, in part, by Miles." Miles alleged that the Sale Agreement "was to be partially performed in Texas, " that Barton "purposefully directed communications into Texas by calling Miles and Harris while they were both located in Houston, Texas to ...

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