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Friend v. Acadia Holding Corp.

Court of Appeals of Texas, Fifth District, Dallas

April 27, 2017


         On Appeal from the 162nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-13-11354

          Before Justices Bridges, Lang-Miers, and Whitehill.



         Gail Friend and Gail Friend, P.C., appeal the trial court's order granting the special appearance of Acadia Holding Corporation and Acadia Life Limited (Acadia). In a single issue, Friend argues the trial court erred in sustaining Acadia's special appearance. We affirm the trial court's order.

         Plaintiffs' fifth amended petition, the operative pleading in this case, alleged Friend began participating in 1994 in an investment plan (the PBT Plan) at the recommendation of Tracy Sunderlage. The PBT Plan was formed by Tracy, Sunderlage Resource Group International, and Sunderlage Resource Group. Tracy is a Florida resident. In or around 2000, Friend began receiving correspondence from Carey Sunderlage that continued to represent the viability of the PBT Plan. Carey is an Illinois resident. In 2005, Tracy restructured the PBT Plan to convert it to a foreign captive insurance company that would become the Maven Trust. In 2008, Friend attended a conference in Canada where Carey and Tracy induced Friend to invest in Acadia Life Limited, another offshore insurance company. In 2012, Friend received notice from the Maven Trust and Acadia Life Limited that her investments were lost.

         Carey and Linda Sunderlage, along with Acadia Holding Corporation and Acadia Life Limited were named as defendants in the fifth amended petition. The petition alleged Carey, Linda, Acadia Holding, and Acadia Life "made misrepresentations, concealed material facts, and breached fiduciary duties" to Friend. The petition asserted generally that Acadia Holding, a Florida resident, and Acadia Life, a Bermuda resident, did "business in and conducted torts in the State of Texas which [gave] rise to [Friend's] claims."

         Acadia Life and Acadia Holding both filed special appearances. Acadia Life argued it is a Bermuda corporation with its principal place of business in Hamilton, Bermuda; it does no business and has never conducted business in Texas; it does not market its insurance products to Texas residents, owns no property in Texas, and has no employees in Texas. Further, Acadia Life argued it has no agents in Texas, has not authorized any agents to act on its behalf in Texas, and has never issued a policy of insurance in Texas or in the United States. Instead, Acadia Life argued its only connection to this case is as an insurer that issued a single policy insuring Friend's life. The application for Friend's policy was executed in Canada on December 13, 2005, and a copy of Friend's Texas driver's license was attached. The application provided as follows:

The undersigned acknowledges that Acadia [Life] is authorized to transact any insurance business solely from Bermuda and specifically acknowledges that he has not been solicited with a view to the sale of life insurance or other insurance products in any place other than Bermuda and agrees that by signing this Application, he waives the right to assert otherwise at any time in the future. In addition, subsequent Life Insurance Purchase Contributions and communications with regard to the servicing of the Life Insurance Policy may be subject to restrictions by reason of the non-admitted status of Acadia in the place of residence or domicile of the undersigned.

         Thus, Acadia Life argued, it was not subject to personal jurisdiction in Texas, based either on general or specific jurisdiction.

         Acadia Holding also filed a special appearance asserting it is a Delaware corporation with its principal place of business in Florida, it has not purposely availed itself of the privileges of doing business in Texas, and it "lacks any connection to this case or the Friend Plaintiffs." Acadia Holding characterized Friend's allegations as an attempt to establish jurisdiction over it based on (1) the acts of Tracy, Linda, and Carey, (2) "the acts of other defendants by asserting conclusory allegations that the defendants were engaged in conspiracy and aided and abetted each other, and (3) the acts of Acadia Life." In response, Acadia Holding argued the unilateral activity of other defendants could not be imputed to Acadia Holding; Tracy, Linda, and Carey were not agents of Acadia Holding, and there was no basis for imputing the actions of Acadia Life to Acadia Holding.

         Acadia Holding's special appearance was supported by the affidavit of its president, Michael Goldberg. Goldberg's affidavit stated that, among other things, Acadia Holding has never conducted any business in Texas; does not have bank accounts, assets, offices or agents in Texas; did not have any contact with Friend regarding Acadia Life policies; was not involved in the sale, issuance, or administration of Friend's insurance policy; was not involved in the management of Acadia Life and did not control Acadia Life's operations; and did not employ Tracy, Linda, or Carey as its agents.

         Friend filed a response to the special appearances in which she grouped Acadia Life and Acadia Holding together as a single entity, "Acadia, " and asserted that "Acadia" and its agents induced Friend to invest "over $800, 000" in an Acadia Life policy and caused Friend to lose "all of her money due to the fraudulent nature of Acadia's investment scheme perpetrated by Carey Sunderlage and Tracy Sunderlage." Friend alleged Acadia and its "agents, " including Tracy, forged her signature on the policy application and listed Toronto, Canada, as the location where Friend executed the application. Friend alleged Tracy emailed the application to Friend in Houston and directed her to sign it but not to date it so that Acadia and its "agents" could "manipulate the date" and create "the illusion that everything occurred outside the United States." In addition to pointing out Friend's policy payments came from Texas, Friend alleged "Acadia" has issued at least ten insurance policies and/or annuities to Texas residents, resulting in payments of over $16 million to Acadia from Texas residents.

         Acadia Life and Acadia Holding filed a reply in which they argued Friend's "unpleaded and unsupported agency theory [did] not impute actions by Tracy Sunderlage or Carey Sunderlage to Acadia Life." Specifically, they argued Friend's fifth amended petition did not allege agency as a theory of jurisdiction; Friend did not and cannot prove the existence of an agency relationship between Acadia Life and Tracy or Carey; Tracy only provided investment management services to Acadia Life insureds who voluntarily elected him as their investment manager; and the Acadia Life investment management agreement provided that the investment manager is an independent contractor and has no authority to bind, obligate, or represent Acadia Life. The trial court subsequently granted Acadia Life's and Acadia Holdings' special appearances, and this appeal followed.

         In a single issue, Friend argues the trial court erred in granting Acadia's special appearance. The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the personal jurisdiction of a Texas court. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002). When this burden is met, the burden shifts to the nonresident to negate all bases of personal jurisdiction asserted by the plaintiff. Id. A defendant may negate jurisdiction on a legal basis by showing that even if the plaintiff's allegations are true, they do not establish jurisdiction. Kelly v. General Interior ...

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