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Baldaramos v. Metamorphosis Consulting, LLC

Court of Appeals of Texas, Fourth District, San Antonio

December 11, 2019

Richard BALDARAMOS and Rejuvya, LLC, Appellants
v.
METAMORPHOSIS CONSULTING, LLC, Appellee

          From the 57th Judicial District Court, Bexar County, Texas Trial Court No. 2018-CI-16894 Honorable Laura Salinas, Judge Presiding.

          Sitting: Patricia O. Alvarez, Justice Irene Rios, Justice Beth Watkins, Justice.

          MEMORANDUM OPINION

          Irene Rios, Justice.

         REVERSED AND RENDERED

         Richard Baldaramos and Rejuvya, LLC ("Rejuvya") appeal the trial court's order denying their special appearances asserting the trial court erred because Metamorphosis Consulting, LLC ("Metamorphosis") failed to meet its pleading burden and Baldaramos and Rejuvya negated all bases of jurisdiction pled by Metamorphosis. We reverse the trial court's order and render judgment dismissing the claims against Baldaramos and Rejuvya.

         Background

         Metamorphosis filed the underlying lawsuit on September 5, 2018. The following facts are alleged in Metamorphosis's petition.

         Baldaramos is a resident of Nevada, and Rejuvya is a Nevada limited liability company. On or about March 21, 2014, Metamorphosis entered into a contract ("Contract") with Jill Cole in which Cole paid Metamorphosis $100, 332.00 in exchange for Metamorphosis's consulting services and a limited license to access Metamorphosis's trade secret materials (the "Trade Secrets"). The Contract provided the Trade Secrets could only be used by Cole in her practice and the limited license was not assignable to any other party. The Contract further provided Cole could not disclose the Trade Secrets to any party other than the parties specified in the Contract. When the Contract was signed, Cole was the sole member of Vitality Health Wellness Center, LLC, an Arizona limited liability company that operated a wellness center. The Contract provided it would be governed by Texas law and the sole place of venue for any legal action would be Bexar County, Texas.

         In October of 2014, Baldaramos became a member of Vitality and was active in its management. As a result, he used the Trade Secrets in the operation of Vitality's business and also attended classes provided by Metamorphosis in San Antonio in which the Trade Secrets were discussed and diagrammed. Cole stored the Trade Secrets on a secure digital server owned by Dropbox, and Baldaramos had access to Cole's dropbox on the digital server. Sometime between October of 2014 and December of 2015, Baldaramos copied the Trade Secrets from Cole's dropbox to a thumb drive.

         In December of 2015, Baldaramos and Cole ended their business relationship. At that time, Cole informed Baldaramos both verbally and in writing that he was no longer allowed to use her license to access the Trade Secrets. Cole also instructed Baldaramos to destroy any copies of the Trade Secrets in his possession.

         On April 21, 2016, Baldaramos and another defendant who is not an appellant formed a new Nevada limited liability company named Medela Centers, LLC which was later renamed Rejuvya, LLC. That entity opened a health center providing health-related goods and services in California. The health center was known as Health Renewal Centers on the date Metamorphosis filed its petition. Baldaramos provided an employee of the entity access to Cole's dropbox and/or the thumb drive and instructed the employee to familiarize herself with the Trade Secrets which were then used to facilitate the growth of the health center. In July of 2016, Metamorphosis refused to sell or license the Trade Secrets to Baldaramos and instructed him to stop using the Trade Secrets.

         In its petition, Metamorphosis alleged claims against Baldaramos for misappropriation of trade secrets and conversion. Metamorphosis also alleged a claim against Rejuvya for conversion in retaining the Trade Secrets. Baldaramos and Rejuvya filed special appearances.

         In his special appearance, Baldaramos asserted Metamorphosis failed to allege sufficient contacts to establish general jurisdiction over Baldaramos. In addition, Baldaramos asserted the alleged tort claims against him arose in December of 2015 when he allegedly used the Trade Secrets in Nevada and California after his business relationship with Cole ended. Baldaramos further asserted his attendance at one Metamorphosis training class in Texas in April or May of 2015 is not sufficient to establish specific jurisdiction because his attendance was authorized and his alleged actions misappropriating or converting the Trade Secrets occurred in December of 2015. Finally, Baldaramos asserted the exercise of personal jurisdiction over him would offend traditional notions of fair play and substantial justice. Baldaramos attached his affidavit to his special appearance in which he stated he resided in Nevada, never owned property in Texas, and did not rent property or pay taxes in Texas since 1981. He further stated he attended only one training meeting in Texas in April or May of 2015 and spent two or three nights in San Antonio for purposes of attending that meeting. Finally, he stated no business entity with which he is affiliated has ever done or solicited business in Texas.

         In its special appearance, Rejuvya asserted it is a Nevada limited liability corporation that was formed on November 20, 2018; therefore, Rejuvya was not formed until two months after Metamorphosis filed its petition. Rejuvya also asserted Metamorphosis failed to allege sufficient contacts to confer general jurisdiction in Texas. Rejuvya further asserted the conversion claim was based on Rejuvya's alleged unauthorized retention and use of the Trade Secrets which did not occur in Texas and could not have occurred before Metamorphosis filed its petition. Finally, Rejuvya asserted the exercise of personal jurisdiction over it would offend traditional notions of fair ...


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