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The Law Firm of Donald Wochna, LLC v. American Frontier Management, LLC

Court of Appeals of Texas, Third District, Austin

April 4, 2018

The Law Firm of Donald Wochna, LLC, Appellant
v.
American Frontier Management, LLC and David Barker, Appellees

          FROM THE DISTRICT COURT OF WILLIAMSON COUNTY, 395TH JUDICIAL DISTRICT NO. 16-0415-C395, HONORABLE RYAN D. LARSON, JUDGE PRESIDING

          Before Chief Justice Rose, Justices Pemberton and Goodwin.

          MEMORANDUM OPINION

          Melissa Goodwin, Justice.

         In this interlocutory appeal, the Law Firm of Donald Wochna, LLC, an Ohio company, appeals the trial court's order denying the Law Firm's special appearance. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(7); Tex.R.Civ.P. 120a. In one issue, the Law Firm argues that it did not have sufficient minimum contacts with the State of Texas to confer the trial court's specific jurisdiction over it. For the following reasons, we sustain the Law Firm's issue, reverse the trial court's order, and render judgment dismissing appellees' claims against the Law Firm for want of personal jurisdiction.

         Background

         The Law Firm was formed under the laws of the state of Ohio. The managing partner of the Law Firm is Donald Wochna, who is a sole practitioner licensed to practice in Ohio and not in Texas. The Law Firm does not maintain an office or advertise in Texas, and it has no assets, employees, bank accounts, or real property in Texas.

         American Frontier Management, LLC, is a Texas company, and David Barker is a Texas resident and member of American Frontier. American Frontier is a defendant in pending litigation in Ohio. The parties in the Ohio litigation entered into an agreed order governing electronic discovery, and the Law Firm was retained by the plaintiff's counsel Carlile, Patchen & Murphy (the Carlile Firm) in the Ohio litigation to assist with electronic discovery. In the engagement agreement between the Law Firm and the Carlile Firm, the Law Firm agreed to "supervise any third party computer forensic or electronic discovery expert retained by [the Carlile Firm] in this matter."[1] As compensation for its services, the parties agreed that the Law Firm would receive $200 per hour.[2] The parties also agreed that, if a third party expert was retained, the Carlile Firm would execute an engagement agreement with such expert and be responsible for all fees or costs charged by the expert and that the Law Firm was not authorized to retain a third party expert.

         After the Law Firm was retained by the Carlile Firm in the Ohio litigation, Wochna "identified and vetted" Prime Focus Forensics, LLC, as a "suitable third party computer forensic expert" to assist the Carlile Firm with copying electronically stored information from devices belonging to appellees pursuant to the agreed order governing electronic discovery in the Ohio litigation. Prime Focus is located in Hutto, Texas, licensed under the laws of the State of Texas, and operated by Mike Adams. The Carlile Firm thereafter retained Prime Focus to copy electronically stored information from devices belonging to appellees pursuant to the protocol in the agreed order in the Ohio litigation.[3]

         After Prime Focus was retained by the Carlile Firm, Adams began the process of copying electronically stored information from devices located in Texas belonging to appellees, but appellees stopped the process after a few days, accusing Adams of damaging and destroying data. Appellees thereafter filed the underlying suit in this case in which they alleged that (i) Prime Focus was "neither qualified, nor competent to copy American Frontier's devices"; (ii) Prime Focus "had deleted a massive amount of data-approximately 1.7 terabytes-from one of [American Frontier's] hard drives, including American Frontier's accounting data and other business files"; and (iii) "[d]ue to Prime Focus's incompetent attempts to copy American Frontier's devices over three days, and due to the resulting destruction and corruption of those devices, American Frontier's business operations were crippled for approximately eight days" and its "revenue stream was damaged for weeks."[4]

         Appellees sued multiple parties, including Prime Focus, the Law Firm, and the Carlile Firm, and sought direct and consequential damages based on negligence claims against Prime Focus and claims of vicarious liability and "negligent hiring, retention, and/or supervision" of Prime Focus against the Law Firm and others. The Law Firm filed a special appearance supported by an affidavit by Wochna, contending that appellees had not alleged sufficient facts to subject the Law Firm to suit in Texas and that Wochna's affidavit conclusively established that Texas courts had neither general nor specific personal jurisdiction over the Law Firm. In his affidavit, Wochna averred that he "decided to seek out a Texas company, such as Prime Focus, to assist in e-discovery" in the Ohio litigation because American Frontier, one of the defendants in the Ohio litigation, was located in Texas; that the Carlile Firm contracted with Prime Focus; and that he monitored Prime Focus pursuant to the Law Firm's engagement agreement with the Carlile Firm. He also averred about his contacts with plaintiff's counsel in the Ohio litigation and with Prime Focus after American Frontier expressed concerns about Prime Focus's competence to copy the electronically stored information. He explained that all of his actions with regard to Prime Focus "were performed in support of the Firm's obligations to the Carlile Firm in the Ohio litigation" and were done from the Law Firm's office in Ohio: "None of the services provided by the Firm in the Ohio litigation were performed in Texas, as they were all conducted from the Firm's office in Ohio. At no point did I, or any other representative of the Firm, travel to Texas to identify, vet, or supervise Prime Focus, or to perform any other service in the Ohio litigation."

         Appellees filed responses to the Law Firm's special appearance, asserting that the trial court had specific jurisdiction over the Law Firm. They alleged that Wochna's actions and omissions were directed at Texas, including his selection, instruction, and supervision of Prime Focus before and during the "botched copying attempt" and his "false assurance" to appellees during the process that Prime Focus "was performing the job safely." They supported their responses with evidence of email communications and other correspondence between Wochna and Adams and others concerning the hiring of Prime Focus, its subsequent efforts to copy appellees' electronically stored information, and its alleged destruction and corruption of their devices and electronically stored information.

         At the hearing on the Law Firm's special appearance, the only witness to testify was Wochna. He testified about his role in retaining Prime Focus as a computer forensic expert for the Ohio litigation and his communications with Adams, the Carlile Firm, and plaintiff's counsel in the Ohio litigation concerning Prime Focus's copying of electronically stored information from devices belonging to appellees. He explained that all of his communications and correspondence were related to the electronic discovery in the Ohio litigation and made by telephone or sent by email from his Ohio office and that he had never been to Texas prior to the special appearance hearing. He testified about the meaning of his agreement in the engagement letter with the Carlile Firm to "supervise any third party computer forensic or electronic discovery expert retained by [the Carlile Firm]" in the Ohio litigation as follows:

Between myself and the Carlile Patchen firm, when we executed that document, what we intended and what we meant and what "supervise" does mean is to monitor, make certain that you understand what's going on, be able to be aware of the status of everything at all times, be responsible for being able to report to the litigation counsel what is occurring, be responsive to litigation counsel's questions, be able to relay those questions to the experts performing the work in a manner so that we can get timely responses, communicate those responses back to lead counsel intelligently and properly, and then apply my legal knowledge many times, suggest to counsel strategies and suggest to counsel responses when needed.

         He denied that the Carlile Firm hired him to determine whether Adams did a good job or to tell him how to do the job, explaining that "as an attorney, I can't get involved in how the experts are doing their jobs." He also explained that he was not entitled to access American Frontier's electronically stored information at that time, but his role was to coordinate and relay information before and during the time period that Adams was copying American Frontier's electronically stored information in Texas. He testified that he was "not there to answer [the expert]'s questions about how to do the job, but [he did] need to know they're getting the job done." The ...


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