Paul Priebe v. Cindy Kolmeier

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-98-00307-CV Paul Priebe, Appellant v. Cindy Kolmeier, Appellee FROM THE COUNTY COURT AT LAW OF COMAL COUNTY NO. 97-CV-085, HONORABLE FRED CLARK, JUDGE PRESIDING Cindy Kolmeier sued Paul Priebe seeking to recover damages for breach of contract and deceptive trade practices in connection with her purchase of a horse. Priebe made a special appearance to contest the trial court's exercise of jurisdiction over him. He appeals the trial court's denial of his special appearance. We will reverse the denial of the special appearance and dismiss the cause for lack of personal jurisdiction. The underlying dispute The following summary of the underlying dispute is drawn from the clerk's record and the reporter's record of the hearing on the special appearance. Live testimony at the hearing came from Kolmeier and Marcia Pigott, a Texas resident not a party to this suit. Evidence admitted at the hearing included excerpts from Priebe's answers to interrogatories, the affidavit of Kolmeier's agent, Paul Cates, and copies of the horse's pedigree. Documents in the clerk's record included Priebe's affidavit in support of his special appearance objecting to jurisdiction. Kolmeier and Cates initiated their relationship with Priebe, a horse trainer, while on a horse-buying trip to the Midwest. After a friend in Texas recommended they visit Priebe, Kolmeier and Cates went to Minnesota to look at a horse Priebe did not own but which was under his care. While Kolmeier was in Minnesota, Priebe told her the horse was an eight-year-old named The Storm Chaser. She testified that Priebe told her she would have thirty days after purchasing the horse to decide whether to keep it. Kolmeier testified she did not offer to buy the horse at that time. She requested the horse's pedigree, which Priebe faxed from Minnesota to Texas. The pedigree showed that the horse was an eleven-year-old named The Fox Chaser. From Texas, Cates called Priebe in Minnesota, who confirmed that the pedigree contained the correct name and age of the horse the Texans had seen. During that call, Priebe accepted Kolmeier's offer to buy the horse. After receiving funds from Kolmeier, Cates mailed a personal check from Texas to pay for the horse. The Texans arranged and paid for the horse's shipping from Minnesota. Cates's assertions in his affidavit agreed with Kolmeier's testimony and supplemented their version of events. Within the thirty-day approval period, he called Priebe from Texas to tell him that Kolmeier wanted to return the horse. During that call, Priebe offered to send a videotape from which Kolmeier could choose a replacement for the unsatisfactory horse. Kolmeier agreed to view the tape, but Priebe did not send the tape until after Kolmeier demanded return of her money, apparently through an attorney. According to Cates, Priebe refused to take the horse back after receiving the demand from an attorney. Priebe lived in Minnesota and did not travel to Texas during the entire transaction. He stated in his affidavit that, other than changing airplanes in Texas once, he had not been to Texas since 1974. According to his affidavit, he does not have a bank account, mailing address, or property in Texas, and does not advertise in Texas. His only contact with Texas was through the mail and telephone wires. He denied that he would sell a horse with a money-back guarantee, and particularly denied that he offered those terms to Kolmeier. He also denied offering a thirty-day approval period. He admitted making thirteen business-related calls to Texas in 1996 and 1997; he did not recall initiating any of the business contacts. Evidence showed that The Fox Chaser had been sold for $9,000 by Darlene Mannix to John Scott on December 1, 1996, while Priebe held the horse. On December 19, Scott sold the horse to Kolmeier for $13,500, though Cates's commission pushed her price to $15,000. Neither Mannix nor Scott lives in Texas, and there is no evidence that they formed any part of these contracts in Texas. Pigott testified that Priebe had called her in Texas and sent written communications, videotapes, and stock to her from Minnesota to Texas. She said he sent three horses to her in Texas during the 1990s. She had also sent him horses to sell as her agent. Analysis Kolmeier seeks return of her purchase money and damages from deceptive trade practices. The deceptive practices alleged include representing that an agreement, guarantee, or warranty confers rights, remedies, or obligations that it does not; breach of a money-back guarantee; and unconscionably failing to respond to her dissatisfaction promptly by refund of money or delivery of videotape of substitute horses. She complains that Priebe misrepresented the existence of the thirty-day approval period, failed to disclose the recent sale for a lower price, and failed to send the tape promptly after learning of her dissatisfaction. She also complains about Priebe's representations that the horse was eight years old and that she could return the horse within thirty days if dissatisfied. A Texas court may exercise personal jurisdiction over a nonresident defendant if the following conditions are met: (1) the Texas long-arm statute authorizes jurisdiction, and (2) the exercise of jurisdiction is consistent with federal constitutional due process standards. Schlobohm v. Schapiro, 784 S.W.2d 355, 356 (Tex. 1990). Because Priebe's activities satisfied the Texas long-arm statute's requirement, we will focus mostly on whether the exercise of personal jurisdiction over Priebe comports with federal due-process guarantees. The Texas long-arm statute extends personal jurisdiction over a nonresident who commits a tort in whole or in part in Texas, or who forms a contract by mail or otherwise with a Texas resident that either party is to perform in whole or in part in Texas. Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (West 1997). Priebe formed a contract with Texas resident Kolmeier over the telephone. She agreed to pay for the horse from Texas and to move the horse to Texas. The long-arm statute is satisfied. We review the court's decision on the federal constitutional standards with a mixed standard of review. We look at the entire record. J & J Marine, Inc. v. Le, 982 S.W.2d 918, 924 (Tex. App.--Corpus Christi 1998, no pet. h.). We review findings of fact, express or implied, for the sufficiency of the evidence; the findings are not conclusive when there is a complete record. Id. at 924. We review the court's conclusions of law for correctness. Id. at 925. A nonresident defendant must negate all bases of personal jurisdiction to prevail in a special appearance. CSR Ltd. v. Link, 925 S.W.2d 591, 596 (Tex. 1996). State courts can exercise personal jurisdiction over a defendant who has some minimum, purposeful contacts with the state only if the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice. CMMC v. Salinas, 929 S.W.2d 435, 437 (Tex. 1996). The defendant's contacts may create specific or general jurisdiction. See Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 227 (Tex. 1991). Specific jurisdiction attaches when the cause of action arises out of or relates to the nonresident defendant's activities purposefully directed toward Texas. Id. The contact must have resulted from the nonresident defendant's purposeful conduct and not the unilateral activity of the plaintiff or others. Id. The litigation must result from injuries that arise out of or relate to the defendant's activities directed toward the forum. Id. at 228. The specific-jurisdiction minimum-contacts analysis focuses on the relationship among the defendant, Texas, and the litigation. Id. The quality and nature of the nonresident's contacts with Texas, rather than the number of contacts, determine whether Texas can exercise jurisdiction over the party. See Memorial Hosp. Sys. v. Fisher Ins., 835 S.W.2d 645, 650 (Tex. App.--Houston [14th Dist.] 1992, no writ). Receipt of a single phone call in another state can confer specific jurisdiction over the receiver if, during that call, the receiver makes the material misrepresentation that causes the harm for which the Texas-based maker of the call seeks recompense. Id. at 651. General jurisdiction may arise over a nonresident defendant who has substantial continuous and systematic contacts with Texas even if the cause of action does not arise from or relate to the nonresident's conduct within Texas. Guardian, 815 S.W.2d at 228. General jurisdiction requires a showing of much more substantial activities in Texas than does specific jurisdiction. Id. If we find sufficient minimum contacts in Texas, we must decide whether the assertion of personal jurisdiction comports with "traditional notions of fair play and substantial justice." See id. at 228. At this stage, the defendant must present a compelling case that the exercise of jurisdiction is unreasonable. Id. at 231. Only in rare cases will the exercise of jurisdiction not comport with fair play and substantial justice when the nonresident defendant has purposefully established minimum contacts with the forum state. Id.; see also Schlobohm, 784 S.W.2d at 358. The facts of this case resemble the facts of J & J Marine, Inc. v. Le. 982 S.W.2d at 921-22. The plaintiffs were Texas residents who bought a shrimp boat from an Alabama boat builder. Id. at 921. The defendants did not advertise in Texas. Id. at 926. The defendants called a Texas resident (not a plaintiff in this case) asking whether she (or anyone she knew) was interested in boats they had available. Id. at 922 & 925. The Texas plaintiffs initiated the contact that led to the disputed sale by appearing in the defendants' Alabama office. Id. at 926. A Texas resident acting on behalf of the plaintiffs negotiated with the defendants over the telephone from Texas and sent loan papers for the boat purchases to Alabama. Id. at 925. The defendants knew the plaintiffs were Texas residents and that the boat would be moored in Texas. They built seven shrimp boats for Texas residents, though there was nothing particular to Texas about the construction. Id. at 922 & 926. The plaintiffs accepted the boats in Alabama and transported them to Texas. Id. at 926. The defendants also submitted applications to the American Bureau of Shipping's national office in Houston. Id. The Le court reversed the trial court's exercise of personal jurisdiction. The court found no support for an exercise of specific jurisdiction. Id. at 925. The court rejected the trial court's finding of general jurisdiction, terming the defendants' contacts with Texas "fortuitous." The court focused on a list of things the defendants did not do or have. In Texas, the defendants did not have a license to do business; own or lease property; have an office, bank account, officer, employee, agent, or representative; pay taxes; execute or perform contracts; solicit work or employees; or advertise in any medium intended to reach Texas. Id. at 926. The court concluded that the plaintiffs failed to show that defendants systematically, continuously, and purposefully directed contacts toward Texas. Id. at 926-27. The evidence in the special-appearance record shows Priebe had very little contact with Texas. Priebe made the representations and omissions while in Minnesota. There is no evidence that he made the thirty-day guarantee any time but when Kolmeier was in Minnesota. The undisclosed early-December sale occurred outside of Texas among non-Texans; at most, Priebe failed to mention it while on the phone to Texas. Though Kolmeier offered from Texas to buy the horse, Priebe accepted the offer over the phone while in Minnesota. Kolmeier mailed the payment from Texas, but Priebe received it and retained it in Minnesota. Priebe delivered the horse to Kolmeier when the movers picked up the horse in Minnesota. After Kolmeier expressed her dissatisfaction, Priebe at most offered to send the tape of the replacement candidates while on the phone from Minnesota to Texas; his failure to send it occurred in Minnesota. Priebe does not have a bank account, mailing address, or property in Texas, and does not advertise in Texas. His occasional contacts with Texas were through the mail and telephone wires. He did not recall initiating any of his business contacts with Texas. We conclude that the facts do not justify the finding of minimum contacts to support specific jurisdiction. Kolmeier initiated the relationship and many of the contacts. Priebe's fax to Texas regarding the horse's pedigree is not the basis for Kolmeier's claims in her amended petition; even if it were, Priebe sent the fax from Minnesota. Their verbal contract made over the phone is deemed to be made where the offer is accepted. See G.P. Enters., Inc. v. Adkins, 543 S.W.2d 913, 915-16 (Tex. Civ. App.--Texarkana 1976, no writ). Priebe made all of his omissions and commissions, if any, in Minnesota. We also conclude that a finding of minimum contacts to support general jurisdiction over Priebe is incorrect. Priebe's affidavit showed no continuous or systematic contacts with Texas. People from Texas occasionally contacted him, he responded, and some horses he held ended up in Texas, but there is no evidence that Priebe solicited business in Texas. Thirteen responsive phone calls over two years do not constitute continuous or systematic contacts with Texas. The evidence is that he did not direct activities toward Texas, but that he stayed in Minnesota and Texans occasionally came to him. Because Priebe did not have the minimum contacts necessary to support the exercise of personal jurisdiction over him, we need not discuss whether that exercise would comport with traditional notions of substantial justice and fair play. Conclusion We hold that Priebe did not have minimum contacts with Texas to support either specific or general jurisdiction. We therefore reverse the trial court's denial of his special appearance and dismiss the cause for lack of personal jurisdiction. Marilyn Aboussie, Chief Justice Before Chief Justice Aboussie, Justices Kidd and Powers* Judgment Reversed and Cause Dismissed Filed: April 8, 1999 Do Not Publish * Before John E. Powers, Senior Justice (retired), Third Court of Appeals, sitting by assignment. See Tex. Gov't Code Ann. § 74.003(b) (West 1998). rted them to Texas. Id. at 926. The defendants also submitted applications to the American Bureau of Shipping's national office in Houston. Id. The Le court reversed the trial court's exercise of personal jurisdiction. The court found no support for an exercise of specific jurisdiction. Id. at 925. The court rejected the trial court's finding of general jurisdiction, terming the defendants' contacts with Texas "fortuitous." The court focused on a list of things the defendants did not do or have. In Texas, the defendants did not have a license to do business; own or lease property; have an office, bank account, officer, employee, agent, or representative; pay taxes; execute or perform contracts; solicit work or employees; or advertise in any medium intended to reach Texas. Id. at 926. The court concluded that the plaintiffs failed to show that defendants systematically, continuously, and purposefully directed contacts toward Texas. Id. at 926-27. The evidence in the special-appearance record shows Priebe had very little contact with Texas. Priebe made the representations and omissions while in Minnesota. There is no evidence that he made the thirty-day guarantee any time but when Kolmeier was in Minnesota. The undisclosed early-December sale occurred outside of Texas among non-Texans; at most, Priebe failed to mention it while on the phone to Texas. Though Kolmeier offered from Texas to buy the horse, Priebe accepted the offer over the phone while in Minnesota. Kolmeier mailed the payment from Texas, but Priebe received it and retained it in Minnesota. Priebe delivered the horse to Kolmeier when the movers picked up the horse in Minnesota. After Kolmeier expressed her dissatisfaction, Priebe at most offered to send the tape of the replacement candidates while on the phone from Minnesota to Texas; his failure to send it occurred in Minnesota. Priebe does not have a bank account, mailing address, or property in Texas, and does not advertise in Texas. His occasional contacts with Texas were through the mail and telephone wires. He did not recall initiating any of his business contacts with Texas. We conclude that the facts do not justify the finding of minimum contacts to support specific jurisdiction. Kolmeier initiated the relationship and many of the contacts. Priebe's fax to Texas regarding the horse's pedigree is not the basis for Kolmeier's claims in her amended petition; even if it were, Priebe sent the fax from Minnesota. Their verbal contract made over the phone is deemed to be made where the offer is accepted. See G.P. Enters., Inc. v. Adkins, 543 S.W.2d 913, 915-16 (Tex. Civ. App.--Texarkana 1976, no writ).