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Nawracaj v. Genesys Software Systems, Inc.

Court of Appeals of Texas, Fourteenth District

March 7, 2017

RICHARD NAWRACAJ, Appellant
v.
GENESYS SOFTWARE SYSTEMS, INC., PEOPLESTRATEGY, INC., Appellees

         On Appeal from the 133rd District Court Harris County, Texas Trial Court Cause No. 2014-17013

          Panel consists of Justices Christopher, McCally (not participating), and Busby. [4]

          OPINION

          J. Brett Busby Justice.

         This interlocutory appeal from the denial of a special appearance presents the following question: when a lawyer who is not a Texas resident appears in a Texas court to represent a nonresident client, and the client wishes to sue the lawyer for malpractice and other claims related to the representation, do Texas courts have specific personal jurisdiction over the lawyer with regard to those claims? We conclude that the answer is yes.

         Appellant Richard Nawracaj is an attorney licensed to practice law in Illinois. He represented appellees PeopleStrategy, Inc. and its wholly owned subsidiary Genesys Software Systems, Inc. (collectively Genesys)[1] in various matters, including a lawsuit Genesys filed in federal court in Dallas. When local counsel in the federal litigation sued Genesys in state district court in Houston for non-payment of fees, Genesys filed a third-party petition against Nawracaj, alleging several causes of action regarding the services he provided to Genesys in the federal litigation. Nawracaj filed a special appearance, which the trial court denied after considering evidence submitted by the parties.

         Nawracaj argues that his representation of Genesys in Texas is insufficient to give a Texas court specific personal jurisdiction over claims regarding that representation, and that exercising jurisdiction violates fair play given the Illinois arbitration clause in his engagement agreement with Genesys. We disagree because Nawracaj purposefully availed himself of the privilege and financial benefit of practicing law in a Texas court on behalf of his client Genesys, he recruited and supervised local counsel in Texas, and his practice and supervision are the basis of Genesys's claims against him.

         Background

         Nawracaj's relationship with Genesys began in July 2009, when he entered into an engagement agreement with the company to represent it in various matters. Several years later, Genesys decided to file an intellectual-property lawsuit in federal court in Dallas against Comerica Bank, a Texas corporation (the "federal litigation").[2] Because Nawracaj is an Illinois attorney not licensed to practice in Texas, he sought local counsel to assist with the litigation. Nawracaj began drafting the complaint while directing numerous telephone calls to Texas to identify suitable local counsel. Nawracaj billed Genesys over $1, 000 for the time he spent soliciting, researching, and corresponding with potential local counsel.

         After communicating with the Travis Law Firm in Texas, Nawracaj referred Genesys to the firm. Genesys hired the Travis firm to serve as local counsel and entered into a fee agreement directly with that firm. Nawracaj continued working on the case in Illinois and communicated regularly with the Travis firm. Nawracaj requested to receive service from the Dallas federal court. He also applied for and obtained admission pro hac vice, allowing him to represent Genesys in the State of Texas for purposes of the federal litigation. Nawracaj testified that he handled at least 90% of the work on the case.

         According to Gregory R. Travis, he understood that the Travis firm was hired as "mere[ ] local counsel" and would fill a "support role." The pleadings filed with the court listed Gregory Travis as the "attorney in charge, " but the parties agreed that the Travis firm would be "working closely" with Nawracaj and taking direction from him. Nawracaj assisted the Travis firm in the drafting and filing of all documents and pleadings, and Nawracaj drafted two pleadings without the Travis firm's involvement.

         In February 2013, Genesys sent Nawracaj copies of invoices it had received from the Travis firm, which Genesys believed to be inflated. Nawracaj responded by advising Genesys not to pay the invoice because he believed the fees were unreasonable. He sent Genesys an email stating:

Do not - repeat, do not - pay this. Or any other amount to The Travis Law Firm.
I did the majority of the work on this matter (90% or so from my recollection). I am absolutely shocked at the total. . . . In my estimation, the most that should have been billed would be around $5, 000 for the amount of work they did.
. . . I will happily take care of this matter. . . .

         Genesys relied on Nawracaj's advice and did not pay the Travis firm's invoices.

         The Travis firm later sued Genesys for unpaid legal fees in state district court in Houston. Genesys counterclaimed for, among other claims, negligence, breach of fiduciary duty, breach of contract, and fraud. Genesys later amended its counterclaim and filed a third-party petition asserting the same causes of action against Nawracaj.

         Nawracaj filed a special appearance, objecting to the trial court's exercise of personal jurisdiction over him. In its response, Genesys argued that Nawracaj's actions in recruiting local Texas counsel, obtaining permission to practice law in Texas, and committing a tort in whole or in part in Texas were sufficient to confer jurisdiction over him. After jurisdictional discovery, in which Nawracaj gave a deposition, the parties filed supplemental briefing on the special appearance. The trial court signed an order denying the special appearance, and Nawracaj filed this interlocutory appeal. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(7) (West 2015).

         Analysis

         In two issues, Nawracaj complains that the trial court erred by denying his special appearance. Nawracaj argues that the facts do not support specific personal jurisdiction because (1) Genesys's allegations were insufficient to bring Nawracaj within the provisions of the Texas long-arm statute; (2) Genesys did not prove that Nawracaj purposefully established minimum contacts with Texas; and (3) the assertion of personal jurisdiction over Nawracaj does not comport with traditional notions of fair play and substantial justice because the parties agreed to arbitration in Illinois. We address each argument in turn.

         I. Standard of review

         Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law that we review de novo, but the trial court frequently must resolve questions of fact before deciding the question of jurisdiction. Waller Marine, Inc. v. Magie, 463 S.W.3d 614, 618 (Tex. App.-Houston [14th Dist.] 2015, no pet.). The trial court did not issue any findings of fact or conclusions of law with its special appearance ruling. Therefore, all factual findings necessary to support the court's ruling and supported by the evidence are implied. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002). These implied findings are not conclusive and may be challenged for evidentiary sufficiency. Id. Although Nawracaj argues that the evidence is insufficient to support the exercise of personal jurisdiction, he does not dispute the jurisdictional facts. When the facts underlying the jurisdictional issue are undisputed, we review the trial court's determination de novo. Nogle & Black ...


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