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Star Motors, LLC v. Motorwerks Vehicle Sales LLC

Court of Appeals of Texas, Fourteenth District

June 6, 2019

STAR MOTORS, LLC D/B/A MERCEDES-BENZ OF FORT LAUDERDALE, Appellant
v.
MOTORWERKS VEHICLE SALES LLC D/B/A MW CARLINE, Appellee

          On Appeal from the 281st District Court Harris County, Texas Trial Court Cause No. 2018-31936

          Panel consists of Chief Justice Frost and Justices Jewell and Bourliot.

          MEMORANDUM OPINION

          KEVIN JEWELL JUSTICE.

         Appellant, Star Motors, LLC d/b/a Mercedes-Benz of Fort Lauderdale ("Star Motors"), a nonresident of Texas, appeals the denial of its special appearance. Star Motors contends that it lacks the requisite purposeful contacts with the State of Texas. We agree, and we reverse the trial court's order denying Star Motors' special appearance and render judgment dismissing the case for want of jurisdiction.

         Background

         Motorwerks Vehicle Sales LLC d/b/a MW Carline ("MW Carline"), a Texas LLC, purchased a 2016 Bentley automobile from Star Motors, a Florida LLC. According to MW Carline's live pleading, Star Motors represented to MW Carline that the Bentley was "in perfect, like-new condition with a warranty." After MW Carline purchased the vehicle, it sold the Bentley to a buyer in California. But the California buyer quickly discovered that the vehicle had been flooded and unwound the transaction. When Star Motors refused to unwind the transaction with MW Carline, MW Carline sold the Bentley at auction for a loss of approximately $20, 000. MW Carline sued Star Motors for breach of contract, negligent misrepresentation, fraud, violations of the Texas Deceptive Trade Practices Act, and breach of warranty.

         Star Motors filed a special appearance supported by an unsworn declaration.[1]Star Motors' general manager, Giff Hummel, declared that Star Motors: (1) is a limited liability company organized and existing under Florida law with its principal place of business in Broward County, Florida; (2) is not registered to do business in Texas; (3) does not maintain a location to conduct business in Texas; and (4) does not maintain a registered agent in Texas. Hummel further declared that the contract for the purchase of the Bentley was created and executed in Florida, Star Motors did not affirmatively initiate the sale of the vehicle "in any jurisdiction outside Florida," the transaction "was performed and completed" in Florida, and the vehicle was transferred to MW Carline's possession or responsibility from New Jersey, which is where the vehicle was located when the sale occurred.

         In response to Star Motors' special appearance, MW Carline filed an unsworn declaration from its president, Omar George Harris, in support of its jurisdictional allegations. In the declaration, MW Carline asserted the following jurisdiction facts:

2. On behalf of MW Carline, I personally handled the transaction at issue in this lawsuit involving MW Carline's purchase and Star Motors, LLC d/b/a/ Mercedes Benz of Fort Lauderdale's ("Star Motors") sale of the 2016 Bentley Continental GT bearing VIN SCBGU3ZA1GC051003 (the "Vehicle").
3. MW Carline (in Houston, Texas) and Star Motors (in Fort Lauderdale, Florida) have had a business relationship for about four years. The business these two companies do with each other is the buying and selling of motor vehicles. In some of these numerous transactions, MW Carline is the buyer, and Star Motors is the seller. In some of these numerous transactions, MW Carline is the seller, and Star Motors is the buyer. Over the past four years or so, the total value of these transactions would be in the millions of dollars.
4. MW Carline did not do anything to initiate the transaction involving the purchase of the Vehicle in question. Rather, this transaction was affirmatively initiated exclusively by Star Motors' representative reaching out to me, in Houston, Texas by phone to solicit MW Carline's interest in purchasing the Vehicle involved in this lawsuit and one other vehicle. I did not call Star Motors in Fort Lauderdale to inquire about buying the Vehicle. Star Motors called me in Houston to try to sell MW Carline the Vehicle (and did so). The misrepresentations and omissions that MW Carline complains of in this case were made over the phone by Star Motors' representative who had called me in Houston. Star Motors transmitted the purchase agreement for the Vehicle to me in Houston, and I signed the purchase agreement on behalf of MW Carline in Houston. The Vehicle was delivered to MW Carline in Houston. Star Motors' representative called me in Houston for the purpose of selling me the Vehicle and delivering it to Houston. I signed the contract in Houston.

         Based on this evidence, MW Carline asserted that Star Motors failed to negate all grounds for personal jurisdiction alleged in its live pleading (amended petition), and thus the trial court should deny the special appearance.

         Star Motors replied to MW Carline's response, urging, inter alia, a tort allegedly committed in a single phone call with a Texas resident and signing a purchase contract with a Texas resident are insufficient contacts with Texas to confer specific jurisdiction. Star Motors also argued that subjecting it to jurisdiction in Texas would offend traditional notions of fair play and substantial justice.

         The trial court denied the special appearance after a hearing, finding in a written order that it had specific jurisdiction over Star Motors. This interlocutory appeal timely followed. ...


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