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Stein v. RevCap, LLC

Court of Appeals of Texas, Fourth District, San Antonio

April 5, 2017

Timothy STEIN, Appellant
v.
REVCAP, LLC, and Revere High Yield Fund LP, Appellees

         From the 216th Judicial District Court, Gillespie County, Texas Trial Court No. 14288 Honorable N. Keith Williams, Judge Presiding

         AFFIRMED

          Sandee Bryan Marion, Chief Justice Marialyn Barnard, Justice Luz Elena D. Chapa, Justice

          MEMORANDUM OPINION

          Luz Elena D. Chapa, Justice

         Timothy Stein appeals the trial court's order denying his special appearance. His sole issue on appeal is that the trial court erred by denying his special appearance because the trial court lacks personal jurisdiction over him. We affirm the trial court's order.

         Background

         Stein is a Missouri-licensed attorney who lives and works in Kansas. Stein represented Charles Trois, a Texas resident, in obtaining a loan from Revere High Yield Fund, LP, a Delaware limited partnership based in Connecticut.[1] Before approving the loan, Revere required Trois to obtain a title insurance policy on the property Trois intended to use as security for the loan. Trois used real property located in Gillespie County, Texas, as security for the loan. To obtain a title policy for Trois, Stein engaged an escrow officer in Texas at a national title insurance company and provided her with documents and information regarding the loan. Based on the documents and information Stein provided, the title company issued a title commitment for the property located in Texas.

         Revere alleged the information and documents Trois and Stein provided to them and the title insurance company represented the loan was sought for commercial purposes and the real property was not Trois's homestead. As part of the loan transaction, Stein sent Revere an opinion letter applying Texas law to the loan transaction. After Revere loaned Trois the money, Trois became delinquent on his payment obligations, and Revere sought to foreclose on Trois's property.

         Trois sued Revere in district court in Gillespie County to prevent foreclosure, alleging the real property used to secure the loan is his homestead. Revere added Stein as a third-party defendant, alleging various misrepresentation and fraud claims against him. Stein filed a verified special appearance to object to the trial court's personal jurisdiction. Revere responded, emphasizing that Stein sent Revere an opinion letter applying Texas law to the loan transaction; communicated with his Texas-resident client, Trois; communicated with a Texas-based representative of the lender; engaged an escrow officer in Texas that provided title insurance based on Stein's representations; and assisted in closing the real estate transaction.

         Revere did not allege any facts regarding the details of how Stein became Trois's attorney. Stein swore in his affidavit, which he filed in support of his special appearance, he "ha[s] not and do[es] not solicit, advertise, or promote [his] services in Texas." At the hearing on his special appearance, he explained he met Trois when he "was representing a client in Louisiana." According to Trois's deposition testimony, which Revere attached in response to Stein's special appearance and incorporated into the response by reference, Stein represented Trois on other matters including art collection, inheritance, and "fighting a battle in Italy with [Trois's] wife's family." The trial court denied Stein's special appearance, and Stein appeals.

         Personal Jurisdiction

         For a defendant to be subject to personal jurisdiction in a Texas court, "(1) the defendant must have established minimum contacts with the forum state; and (2) the assertion of jurisdiction cannot offend traditional notions of fair play and substantial justice." Searcy v. Parex Res., Inc., 496 S.W.3d 58, 66 (Tex. 2016). There are two types of personal jurisdiction: specific jurisdiction and general jurisdiction. Id. at 67 "[S]pecific jurisdiction exists when the plaintiff's claims arise out of or are related to the defendant's contact with the forum." Id. (internal quotation marks omitted). General jurisdiction exists when the defendant's affiliations with the state are so continuous and systematic as to render it essentially at home in the forum state. Id. at 72-73.

         A. Standard of Review

         To establish personal jurisdiction, "[t]he plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provisions of the long-arm statute." BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002); accord Tex. Civ. Prac. & Rem. Code Ann. §§ 17.041-.045 (West 2015). A defendant challenging a Texas court's personal jurisdiction over it must negate all jurisdictional bases." BMC Software, 83 S.W.3d at 793. Whether a trial court has personal jurisdiction over a defendant is a question of law, which we review de novo. Id. at 794. When, as here, the trial court does not make findings of fact and conclusions of law, "all facts necessary to support the judgment and supported by the evidence are implied." Id. at 795. "When the appellate record includes ...


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