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Bunting v. Kyle Bunting Holdings, Inc.

Court of Appeals of Texas, Third District, Austin

June 27, 2019

Elizabeth Murphy Bunting, Appellant
v.
Kyle Bunting Holdings, Inc., Appellee

          FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT NO. D-l-GN-17-003646, HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING

          Before Justices Goodwin, Baker, and Smith

          MEMORANDUM OPINION

          Melissa Goodwin, Justice

         In this interlocutory appeal, Elizabeth Bunting, a nonresident defendant in the underlying case, challenges the trial court's denial of her special appearance in an action brought by the plaintiff Kyle Bunting Holdings, Inc. (KBH) for tortious interference with existing contracts, defamation, and business disparagement. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(7) (providing for interlocutory appeal from denial of special appearance); Tex.R.Civ.P. 120a (providing for special appearance). For the reasons described below, we affirm.

         I. BACKGROUND

         KBH, a Delaware company with its principal office in Austin, Texas, "markets decorative hide rugs and related products." Kyle Bunting formed KBH in 2000 and testified that he is "the sole founder, sole shareholder, and sole principal." Two years later, Kyle married Elizabeth and they lived in Texas until 2014, when Elizabeth moved to California. Elizabeth filed for divorce in California on January 6, 2015, and KBH alleges Elizabeth waited "exactly six months after the move" to file for divorce in "an apparent effort to take advantage of California marital property law."

         On July 28, 2017, KBH sued Elizabeth for tortious interference with existing contracts, defamation, and business disparagement and alleged that Elizabeth was falsely claiming to be the "Co Founder/Owner" of KBH and that her "move [to California], and the litany of harassing, threatening, interfering, and defamatory communications that followed, were part of a pattern to intentionally harm Kyle and [KBH] out of spite and/or to obtain an ownership interest in [KBH] that could not be obtained in Texas." Elizabeth filed a special appearance with a supporting affidavit and claimed that personal jurisdiction is improper because she is a resident of California, not Texas, and has not resided in Texas since 2014; she does not hold any interest in real property in Texas and does not pay taxes to the State of Texas; she does not have minimum contacts with the State of Texas; and even if the trial court asserted jurisdiction over her, it would offend traditional notions of fair play and substantial justice. See Tex. R. Civ. P. 120a. In an amended petition, KBH pleaded that jurisdiction exists because Elizabeth "was a Texas resident for ten years until at least 2014, she has (substantially more than) minimum contacts with the State of Texas, and the exercise of jurisdiction would not offend the traditional notions of fair play and substantial justice," and listed specific examples of the minimum contacts that will be discussed below.

         After a hearing, the trial court denied the special appearance. Elizabeth then requested findings of fact and conclusions of law, but the record does not indicate that any were issued. Elizabeth now appeals the trial court's denial of the special appearance. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(7).

         II. APPLICABLE LAW

         "The Texas long-arm statute governs Texas courts' exercise of jurisdiction over nonresident defendants" when they do business in Texas. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002) (citing Tex. Civ. Prac. & Rem. Code §§ 17.041-.045). The long-arm statute lists activities that constitute "doing business" in Texas-including committing a tort in whole or in part-but the list is not exclusive and "section 17.042's language extends Texas courts' personal jurisdiction 'as far as the federal constitutional requirements of due process will permit.'" Id. (quoting U-Anchor Adver., Inc. v. Burt, 553 S.W.2d760, 762 (Tex. 1977)). "A state's exercise of jurisdiction comports with federal due process if the nonresident defendant has 'minimum contacts' with the state and that the exercise of jurisdiction does not offend 'traditional notions of fair play and substantial justice.'" M &F Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co., 512 S.W.3d 878, 885 (Tex. 2017) (quoting Walden v. Fiore, 571 U.S. 277, 283 (2014)). Minimum contacts with a state exist when the defendant "purposefully avails [her]self of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws" and justifying the conclusion "that the defendant could reasonably anticipate being called into a Texas court." Old Republic Nat'l Title Ins. Co. v. Bell, 549 S.W.3d 550, 559 (Tex. 2018) (quoting Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009)). The purposeful availment requirement encompasses three considerations: (1) "only the defendant's contacts with the forum are relevant, not the unilateral activity of another party or a third person"; (2) "the contacts relied upon must be purposeful rather than random, fortuitous, or attenuated"; and (3) "the defendant must seek some benefit, advantage or profit by availing itself of the jurisdiction." Id. (quoting Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142, 151 (Tex. 2013)).

         A defendant's contacts may give rise to either general or specific jurisdiction. Id. (citing Moncrief Oil, 414 S.W.3d at 150). General jurisdiction exists when the contacts are "continuous and systematic with a state"; specific jurisdiction exists "when the cause of action arises from or is related to a defendant's purposeful activities in the state." Id. (citing Moncrief Oil, 414 S.W.3d at 150). Specific jurisdiction generally requires a "claim-by-claim" analysis, but when "all claims arise from the same forum contacts," we "need not assess contacts on a claim-by-claim basis." Moncrief Oil, 414 S.W.3d at 150-51.

         In a challenge to personal jurisdiction, the parties bear shifting burdens of proof. Kelly v. General Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010). The plaintiff bears the initial burden "to plead sufficient allegations to bring the nonresident defendant within the reach of Texas's long-arm statute." Id. The burden then shifts to the defendant "to negate all bases of personal jurisdiction alleged by the plaintiff," on "either a factual or legal basis." Id. at 658-59.

         "Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law that we review de novo." Old Republic, 549 S.W.3d at 558 (citing Moncrief Oil, 414 S.W.3d at 150). When no findings of fact and conclusions of law are issued, we infer all relevant facts supported by the evidence that are necessary to support the judgment. Id. (citing BMC, 83 S.W.3d at 795). But "when the appellate record includes the reporter's and clerk's records," as here, "these implied findings are not conclusive and may be challenged for legal and factual sufficiency in the appropriate appellate court." BMC, 83 S.W.3d at 795.

         III. ...


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