Appeal from the 152nd District Court Harris County, Texas
Trial Court Cause No. 2016-76781
consists of Justices Wise, Zimmerer, and Spain.
Charles A. Spain, Justice.
an interlocutory appeal from orders denying special
appearances made by nonresident individual defendants Yew
Yuen Chow and Jeffery Chow in a suit brought by appellee Jose
M. Rodriguez San Pedro. See Tex. R. Civ. P. 120a;
Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(7)
(Supp.). San Pedro's suit primarily concerns an alleged
earn-out payment arrangement and related discussions.
Specifically, he brings claims against Y.Y. Chow and J. Chow
for fraud, breach of fiduciary duty, negligent
misrepresentation, and promissory estoppel.
Pedro alleged that the trial court has general and specific
jurisdiction over Y.Y. Chow and specific jurisdiction over J.
Chow. Y.Y. Chow contends Texas is not his domicile. Y.Y. Chow
and J. Chow contend they are Singapore residents who only
acted in Texas in their corporate capacities for defendant
Keppel AmFELS L.L.C. (AmFELS) or its
conclude that Y.Y. Chow's Texas contacts are insufficient
to confer general jurisdiction over him. We conclude that the
allegations regarding San Pedro's promissory-estoppel
claims are insufficient to confer specific jurisdiction over
Y.Y. Chow and J. Chow. We conclude that Y.Y. Chow's Texas
contacts are insufficient to confer specific jurisdiction
over him with regard to San Pedro's fraud claim. However,
we conclude that Y.Y. Chow's and J. Chow's Texas
contacts are sufficient to confer specific jurisdiction over
both of them with regard to San Pedro's
breach-of-fiduciary-duty and negligent-misrepresentation
claims and that J. Chow's Texas contacts are sufficient
to confer specific jurisdiction over him with regard to San
Pedro's fraud claim. We also conclude that exercising
such jurisdiction over Y.Y. Chow and J. Chow comports with
fair play and substantial justice.
reverse in part the trial court's order concerning Y.Y.
Chow and render judgment granting Y.Y. Chow's special
appearance with regard to and dismissing San Pedro's
claims against Y.Y. Chow for promissory estoppel and fraud.
We reverse in part the trial court's order concerning J.
Chow and render judgment granting J. Chow's special
appearance with regard to and dismissing San Pedro's
claim against J. Chow for promissory estoppel. We otherwise
affirm the trial court's orders as challenged.
the parties involved in this appeal have a lengthy
business-related history, we endeavor to limit our background
discussion. San Pedro, a Florida resident, has experience in
power-plant development, financing, and construction in the
Caribbean Basin and Latin America. San Pedro founded the
Nicaraguan entity Corporacion Electrica Nicaragüense,
S.A. (CENSA). In 1995, Empresa Nicaragüense de
Electricidad (ENEL), the Nicaraguan state-owned electric
generation, transmission, and distribution company, entered
into a Power Purchase Agreement (PPA) with CENSA.
a Texas entity with a principal place of business in
Brownsville, Texas, and an office in Houston, was engaged in
the construction and repair of mobile drilling rigs and
platforms. In the mid-1990s, AmFELS sought to enter the Latin
American power-generation business. In 1995, Y.Y. Chow, then
president of AmFELS, reached out to San Pedro. They met in
Houston and discussed the possibility of requesting an
extension to the recently-expired PPA for a possible
co-venture with AmFELS. After ENEL granted CENSA a short
extension, however, the PPA terminated.
in 1995, J. Chow, then providing legal services for AmFELS,
approached San Pedro regarding spearheading AmFELS's
fledgling Power Development Division and preparing
AmFELS's bid package for a new PPA with ENEL. San Pedro
then met with AmFELS executives, including Y.Y. Chow and J.
Chow, in Brownsville. San Pedro began working with AmFELS.
March 1996, ENEL entered into a new PPA with AmFELS. In 1996,
San Pedro met with Y.Y. Chow and J. Chow in Brownsville to
discuss the sale of CENSA to AmFELS and San Pedro's
request for an earn-out agreement. San Pedro sold CENSA to
AmFELS for $75, 000.
January 22, 1997, AmFELS and San Pedro entered into a letter
agreement in Brownsville whereby AmFELS agreed to pay San
Padro $80, 000 per year, paid quarterly, "as long as the
[1996 PPA] is in full force and effect and ENEL has not
defaulted thereunder." Y.Y. Chow and J. Chow were both
present. Y.Y. Chow signed this earn-out agreement as
president of AmFELS; J. Chow prepared and initialed the
AmFELS earn-out agreement.
January 24, 1997, the 1996 PPA held by AmFELS was assigned to
CENSA "completely free of any charge or load" for
$20, 000. The assignment was accomplished through a notarized
instrument executed in Houston.
January 25, 1997, the newly elected CENSA board of directors,
including Y.Y. Chow and J. Chow, appointed San Pedro as
general manager of CENSA.
did not pay San Pedro any payments under the AmFELS earn-out
agreement. In March 1998, J. Chow called San Pedro from Texas
regarding his signing an earn-out agreement with CENSA. J.
Chow sent San Pedro a fax from Texas containing specific
language J. Chow wanted to be included in the CENSA earn-out
agreement. After San Pedro read the language and translated
it to Spanish, San Pedro called J. Chow in Texas to discuss a
clause prohibiting an assignment or sale of the earn-out
payments. J. Chow explained that the language would protect
San Pedro's wife and son "in case something
happened" to him. San Pedro further asked J. Chow
"if everything was taken care of and if [the CENSA
earn-out agreement] was in proper form." J. Chow assured
San Pedro "it was," and based on this statement,
San Pedro signed the CENSA earn-out agreement on March 18,
CENSA earn-out agreement stated that, in the 1997 assignment,
CENSA had "acquired" from AmFELS "the
obligation to pay annually" San Pedro $80, 000 in
quarterly installments, as long as the 1996 PPA was "in
force." CENSA began making payments to San Pedro under
the CENSA earn-out agreement.
2004, Otto Escorcia, CENSA's general manager, and
José Francisco Mojica, CENSA's financial manager,
requested an addendum to the CENSA earn-out agreement to
reflect that San Pedro's payments were "net"
for tax purposes. The addendum was executed in December 2004.
AmFELS sold CENSA to a Panamanian company in 2009.
2009, CENSA attempted to renegotiate the CENSA earn-out
agreement and 2004 addendum with San Pedro to substantially
lower his payments by 80 percent. San Pedro did not agree to
any reduction. In late 2013, CENSA stopped paying San
Pedro's earn-out payments.
2014, CENSA sued San Pedro in Nicaragua over the
"veracity" of the CENSA earn-out agreement and 2004
addendum. In 2016, the Nicaraguan court ruled in CENSA's
favor because the payment obligation "was never
assigned" from AmFELS and was a "nullity." San
Pedro was ordered to return payments he received from 1998 to
2013 totaling $969, 292.00.
Pedro brought claims against AmFELS, Y.Y. Chow, and J. Chow
in Harris County district court. Specifically, San Pedro
brought claims against all the defendants for fraud, breach
of fiduciary duty, promissory estoppel, and negligent
Chow and J. Chow each filed a verified special appearance
with attached declaration. San Pedro filed a response,
attaching his counter-affidavit.
Chow filed a reply, attaching excerpts from his deposition
and from San Pedro's deposition. J. Chow also filed a
reply, attaching excerpts from his deposition and from San
Pedro's deposition. The trial court held a hearing; no
evidence was admitted at the hearing. On April 30, 2018, the
trial court signed orders denying the special appearances.
Y.Y. Chow and J. Chow timely appealed.
Pedro alleged that the trial court has general jurisdiction
over Y.Y. Chow as a resident of and owner of real property in
Texas at the time this suit was filed. San Pedro alleged that
the trial court has specific jurisdiction over Y.Y. Chow and
J. Chow because they purposefully directed their activities
towards and in Texas and availed themselves of the privilege
of conducting business in Texas and benefits under Texas law;
their conduct and contacts with and within Texas were neither
fortuitous or isolated, but direct and intentional, giving
rise to the claims asserted against them; they committed
torts in whole or in part in Texas by making or directing
others to make multiple fraudulent and/or negligent false
representations or statements on or about March 18, 1998, and
other times, relied upon by San Pedro to his detriment; and
their conduct and contacts in Texas with San Pedro created
fiduciary relationships with San Pedro, both formal and
informal, which they breached by their conduct in Texas. The
trial court denied Y.Y. Chow's and J. Chow's special
appearances without specifying which type of jurisdiction it
overriding issue, Y.Y. Chow and J. Chow argue that the trial
court erred by denying their special appearances. Subissue
(1) concerns whether there is general jurisdiction over Y.Y.
Chow. Subissue (2) concerns whether San Pedro's
allegations and the evidence are sufficient to support
specific jurisdiction over Y.Y. Chow and J. Chow. We sustain
subissue (1) and sustain in part subissue (2).
Applicable law and standard of review
a trial court has personal jurisdiction over a defendant is a
question of law that we review de novo, but the trial court
frequently must resolve questions of fact in order to decide
the issue. BMC Software Belg., N.V. v. Marchand, 83
S.W.3d 789, 794 (Tex. 2002). When, as here, a trial court
does not issue findings of fact and conclusions of law with
its ruling on a special appearance, all findings necessary to
support the ruling and supported by the evidence are implied,
although the sufficiency of the record evidence to support
those findings may be challenged on appeal. Id. at
broad "doing business" language in the Texas
long-arm statute allows the exercise of personal jurisdiction
to "reach as far as the federal constitutional
requirements of due process will permit." U-Anchor
Advert., Inc. v. Burt, 553 S.W.2d 760, 762 (Tex. 1977)
(interpreting former Revised Statutes art. 2031b, Act of Mar.
18, 1959, 56th Leg., R.S., ch. 43, § 4, 1959 Tex. Gen.
Laws 85, 85-86 (amended 1979) (current version at Tex. Civ.
Prac. & Rem. Code § 17.042)); see Tex. Civ.
Prac. & Rem. Code Ann. § 17.042. Due process is
satisfied when the nonresident defendant has established
minimum contacts with the forum state and the exercise of
jurisdiction comports with traditional notions of fair play
and substantial justice. Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945).
nonresident defendant's minimum contacts can create
either general or specific jurisdiction. TV Azteca v.
Ruiz, 490 S.W.3d 29, 37 (Tex. 2016). Minimum contacts
exist when the nonresident defendant purposefully avails
itself of the privilege of conducting activities within the
forum state, thus invoking the benefits and protections of
its laws. Michiana Easy Livin' Country, Inc. v.
Holten, 168 S.W.3d 777, 784 (Tex. 2005). There are three
components to the "purposeful availment" inquiry.
Searcy v. Parex Res., Inc., 496 S.W.3d 58, 67 (Tex.
2016). First, the relevant contacts are those of the
defendant, not the unilateral activity of another party or a
third person. Id. Second, the contacts must be
purposeful rather than random, fortuitous, isolated, or
attenuated. Id. Third, the defendant must seek some
benefit, advantage, or profit by availing itself of the
jurisdiction is party focused. A trial court has general
jurisdiction over a nonresident defendant when the
defendant's contacts with the forum state are so
continuous and systematic that the defendant is essentially
at home in the state. TV Azteca, 490 S.W.3d at 37.
When a nonresident defendant is subject to general
jurisdiction, the trial court may exercise jurisdiction over
the defendant even if the plaintiff's cause of action
does not arise from or relate to the defendant's contacts
with the forum. Id. This test requires substantial
activities within the forum and is more demanding than the
test for specific jurisdiction. Id. "For an
individual, the paradigm forum for the exercise of general
jurisdiction is the individual's domicile."
Daimler AG v. Bauman, 571 U.S. 117, 137 (2014);
see Domicile, Black's Law Dictionary (11th ed.
2019) ("The place at which a person has been physically
present and that the person regards as home; a person's
true, fixed, principal, and permanent home, to which that
person intends to return and remain even though currently
residing elsewhere."). We determine an individual's
domicile for purposes of general jurisdiction as of the time
suit is filed. See Perkins v. Benguet Consol. Mining
Co., 342 U.S. 437, 447-48 (1952).
jurisdiction is transaction focused. A trial court has
specific jurisdiction over a nonresident defendant when (1)
the defendant's contacts with the forum state are
purposeful and (2) the cause of action arises from or relates
to those contacts. Kelly v. Gen. Interior Constr.,
Inc., 301 S.W.3d 653, 658 (Tex. 2010). When a
nonresident defendant is subject to specific jurisdiction,
the trial court may exercise jurisdiction over the defendant
even if the defendant's forum contacts are isolated or
sporadic. TV Azteca, 490 S.W.3d at 37. In conducting
a specific-jurisdiction analysis, we focus on the
relationship among the defendant, the forum, and the
litigation. Kelly, 301 S.W.3d at 658. There must be
a substantial connection between the defendant's contacts
and the operative facts of the litigation. Moncrief Oil
Int'l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 156
(Tex. 2013). Generally, a specific-jurisdiction analysis
should be performed on a claim-by-claim basis. Id.
at 150. When separate claims are based on the same forum
contacts, however, a separate analysis of each claim is not
required. Id. at 150-51.
special appearance, the plaintiff and the defendant bear
shifting burdens of proof. Kelly, 301 S.W.3d at 658.
The plaintiff bears the initial burden of pleading sufficient
facts to bring a nonresident defendant within the reach of
the Texas long- arm statute. Id.; see Tex.
Civ. Prac. & Rem. Code Ann. § 17.042. If the
plaintiff meets its initial burden, the burden then shifts to
the defendant to negate all bases of personal jurisdiction
alleged by the plaintiff. Kelly, 301 S.W.3d at 658.
"Because the plaintiff defines the scope and nature of
the lawsuit, the defendant's corresponding burden to
negate jurisdiction is tied to the allegations in the
plaintiff's pleading." Id. At the
special-appearance stage, we must take the plaintiff's
allegations as true. See Moki Mac River Expeditions v.
Drugg, 221 S.W.3d 569, 585 (Tex. 2007). A defendant can
negate jurisdiction on either a factual or a legal basis.
Kelly, 301 S.W.3d at 659. "Factually, the
defendant can present evidence that it has no contacts with
Texas, effectively disproving the plaintiff's
allegations." Id. Or the defendant can show
that even if the plaintiff's alleged facts are true, the
evidence is legally insufficient to establish jurisdiction.
Id. If the defendant meets its burden of negating
all alleged bases of personal jurisdiction, then the
plaintiff must respond with evidence "establishing the
requisite link with Texas." See id. at 660.
the court concludes that the defendant has sufficient minimum
contacts with the state to establish personal jurisdiction,
the defendant bears the burden of establishing that the
exercise of personal jurisdiction would offend traditional
notions of fair play and substantial justice. See
Guardian Royal Exch. Assurance, Ltd. v. English China Clays,
P.L.C., 815 S.W.2d 223, 231 (Tex. 1991).
determine whether the exercise of personal jurisdiction
offends traditional notions of fair play and substantial
justice, the court considers: (1) the burden on the
defendant, (2) the interests of the forum state in
adjudicating the dispute, (3) the plaintiff's interests
in obtaining convenient and effective relief, (4) the
international justice system's interest in obtaining the
most efficient resolution of controversies, and (5) the
shared interest of the nations in furthering fundamental
substantive social policies. Moncrief Oil, 414
S.W.3d at 155. Only in rare cases will the exercise of
personal jurisdiction not comport with fair play and