Robert G. Morris, D.V.M. and Joyce M. Morris v. Beau Schilling

NUMBER 13-04-00175-CV COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI B EDINBURG ROBERT G. MORRIS, D.V.M. AND JOYCE M. MORRIS, Appellants, v. BEAU SCHILLING, Appellee. On appeal from the 343rd District Court of Live Oak County, Texas. MEMORANDUM OPINION Before Chief Justice Valdez and Justices Hinojosa and Rodriguez Memorandum Opinion by Justice Hinojosa This is an interlocutory appeal from the denial of special appearances filed by appellants, Robert G. Morris, D.V.M. (ARobert@) and Joyce M. Morris (AJoyce@).[1] The Morrises, non-residents of Texas, contend that any contact that arose with Texas was within the scope of their employment with a company owned and operated solely by them.[2] By four points of error, appellants contend the evidence is legally and factually insufficient to support the trial court=s finding that appellants satisfy jurisdictional requirements individually and personally, rather than as a corporation.[3] We affirm. Because the issues of law presented by this case are well settled and the parties are familiar with the facts, we will not recite the law and facts in this opinion except as necessary to advise the parties of the Court=s decision and the basic reasons for it. See Tex. R. App. P. 47.4. A. Standard of Review The Texas long-arm statute authorizes Texas courts to exercise personal jurisdiction over a non-resident defendant that Adoes business@ in Texas. See Tex. Civ. Prac. & Rem. Code Ann. '' 17.041-.045 (Vernon 1997& Vernon Supp. 2004-05). The plaintiff has the initial burden of pleading enough facts to bring the non-resident defendant within the provision of the long‑arm statute. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002). Whether a court has personal jurisdiction over a non-resident defendant is a question of law. BMC Software, 83 S.W.3d at 794. However, the trial court frequently resolves questions of fact before deciding the personal jurisdiction question. Id. If a trial court enters an order denying a special appearance and also issues findings of fact and conclusions of law, the non-resident defendant may challenge the fact findings on legal and factual sufficiency grounds. Id. This Court then reviews the factual findings for both legal and factual sufficiency, Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996), and the conclusions of law de novo. BMC Software, 83 S.W.3d at 794. Factual sufficiency is reviewed by considering all of the evidence that was before the trial court. Ortiz, 917 S.W.2d at 772; see also Valsangiacomo v. Americana Juice Import, Inc., 35 S.W.3d 201, 205 (Tex. App.BCorpus Christi 2000, pet. dism'd w.o.j.). The findings of the trial court must be upheld under this review unless they are so against the great weight and preponderance of the evidence as to be clearly wrong and manifestly unjust. Ortiz, 917 S.W.2d at 772. For legal sufficiency points, we consider only the evidence that supports the finding and we disregard all evidence and inferences to the contrary. Lenz v. Lenz, 79 S.W.3d 10, 19 (Tex. 2002). If there is more than a scintilla of evidence in the record which supports the trial court's findings, those findings will be upheld. BMC Software, 83 S.W.3d at 794. B. In Personam Jurisdiction If a non-resident defendant purposefully avails itself of the privileges and benefits of conducting business in the State of Texas, Texas has sufficient contacts to confer personal jurisdiction. See Tex. Civ. Prac. & Rem. Code Ann. ' 17.042 (Vernon 1997); BMC Software, 83 S.W.3d at 795. The Texas long-arm statute gives Texas courts the authority to exercise personal jurisdiction over a non-resident defendant Adoing business@ within the state. BMC Software, 83 S.W.3d at 795. The statute describes activities that constitute Adoing business@; however, the list is not exhaustive. Id. Committing a tort in whole or in part in Texas constitutes Adoing business.@ See id. The broad language of section 17.042 of the civil practice and remedies code extends Texas courts' personal jurisdiction as far as the federal constitutional requirements of due process will permit. Id. Thus, a court may rely on precedent from the United States Supreme Court and other federal courts, as well as the state court's decisions, in determining whether due process requirements have been satisfied in asserting personal jurisdiction. Id. Personal jurisdiction over non-resident defendants is constitutional when two conditions are met: (1) the defendant has established minimum contacts with the forum state; and (2) the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Id. Although not determinative, foreseeability is an important consideration in deciding whether the non-resident defendant has purposefully established "minimum contacts" with the forum state. Id. However, a defendant should not be subject to a foreign court's jurisdiction based upon "random," "fortuitous," or "attenuated" contacts. Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985)). The minimum contacts of a non-resident defendant can give rise to either general or specific personal jurisdiction. Id. General jurisdiction requires that the contacts in Texas be continuous and systematic but does not demand that the cause of action arise from or relate to activities conducted in Texas. Id. at 796. Specific jurisdiction is established when the defendant's alleged liability arises from or is related to an activity conducted within the forum. Id. at 795. The activity must be Apurposefully directed@ to the forum and the litigation must result from injuries arising out of or relating to the activity. See Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex. 1991). Moreover, the non-resident defendant=s contacts must be purposefully directed at Texas in such a manner that the defendant could reasonably foresee being haled into court within the state. M.G.M. Grand Hotel v. Castro, 8 S.W.3d 403, 408 (Tex. App.BCorpus Christi 1999, no pet.). Single or even occasional acts are not sufficient to support specific personal jurisdiction if their nature and quality and the circumstances of their commission create only an attenuated affiliation with the state. Id. If the non-resident defendant is found to have sufficient minimum contacts with the forum, we then evaluate the contacts in light of other factors to ensure that assertion of personal jurisdiction comports with traditional notions of fair play and substantial justice. Burger King, 471 U.S. at 476; Guardian Royal, 815 S.W.2d at 228. These factors include (1) the burden on the defendant, (2) the interests of the forum State in adjudicating the dispute, (3) the plaintiff=s interest in obtaining convenient and effective relief, (4) the interstate judicial system=s interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several States in furthering fundamental substantive social policies. Burger King, 471 U.S. at 476; Guardian Royal, 815 S.W.2d at 228. 1. Specific Personal Jurisdiction By their first point of error, appellants contend the trial court erred in denying their motion to dismiss this case for want of jurisdiction. Appellants challenge the following findings of fact made by the trial court: 2. Robert G. Morris and Joyce M. Morris have done business as Morris Genetics in Texas and in other states. . . . 6. Robert G. Morris performs the surgeries required during an embryo transfer program. Joyce M. Morris does embryology and does not perform any surgeries. Robert G. Morris and Joyce M. Morris worked together at all times while they were in Texas doing embryo transfer programs. 7. Robert G. Morris and Joyce M. Morris have performed services involved in the embryo transfer program in April and September of 2001 for Kallie Kohls-York in Schleicher County, Texas and have performed services involved in the embryo transfer program for Brenda Behring in Gonzales County, Texas in April and October of 2001. . . . 8. Robert G. Morris and Joyce M. Morris have billed in Texas for their services and have been paid in the State of Texas for such services. 12. Robert G. Morris and Joyce M. Morris are the only employees for Morris Genetics. . . . 15. Brenda Behring had work done by Robert G. Morris and Joyce M. Morris in Gonzales County, Texas in 1998. 16. Brenda Behring had work done by Robert G. Morris and Joyce M. Morris in 1998, 1999, and October, 2001. . . . 18. Joyce M. Morris has performed work with Robert G. Morris in the Spring and Fall of 2001 for Kallie Kohls-York and Brenda Behring. . . . 21. Robert G. Morris and Joyce M. Morris have performed services on 9/25, 9/26, 9/27, 9/28, and 9/29 2001 in Schleicher and Edwards Counties. . . . 26. Robert G. Morris and Joyce M. Morris have done programs in Texas in 1998, 1999, 2000 at the Morris [sic] Ranch in Sutton County, Texas. . . . 28. Robert G. Morris and Joyce M. Morris have done programs in Texas for Plaintiff in April, September, and December of 2000, and in April, September, and November of 2001 at the Schilling Ranch in Live Oak County, Texas. 29. Robert G. Morris and Joyce M. Morris have worked for themselves. 30. Robert G. Morris and Joyce M. Morris have done programs in Texas before and after September 2001 for Kallie Kohls and Norman Kohls. 31. Robert G. Morris has provided embryo transfer services in Cost, Texas on April 21, 2001, October 9, 2001, and October 10, 2001. . . 34. Joyce M. Morris was present in Texas in the Spring and Fall of 2001. 35. Robert G. Morris has provided embryo transfer services in between Eldorado, Texas and Fort McKavett, Texas on April 24, 2001, April 25, 2001, and September 23 and 24, 2001. 36. Joyce M. Morris has provided embryo transfer services in Cost, Texas on April 21, 2001, October 9, 2001 and October 10, 2001. 37. Joyce M. Morris has provided embryo transfer services in between Eldorado, Texas and Fort McKavett, Texas on April 24, 2001, April 25, 2001 and September 23 and 24, 2001. Appellants also challenge the following conclusions of law made by the trial court: 1. Robert G. Morris and Joyce M. Morris are non-residents of the State of Texas. Based upon the facts I have previously found, the Texas Long Arm Statute authorizes Texas Courts to exercise personal jurisdiction over non-residents [sic] defendants doing business in the State. Based upon the facts I have previously found, Robert G. Morris and Joyce M. Morris as non-residents entered into contracts by mail or otherwise with a Texas resident and the contracts were performed by Robert G. Morris and Joyce M. Morris in whole or in part in the State of Texas. 2. Robert G. Morris and Joyce M. Morris, individually, have purposefully established minimum contacts and/or continuous and systematic contacts with the State of Texas. 3. [T]he exercise of jurisdiction over Robert G. Morris and Joyce M. Morris comports with traditional notions of fair play and substantial justice. 4. Robert G. Morris and Joyce M. Morris purposefully availed themselves of the privilege of conducting activities within the State of Texas and invoked the benefits and protections of its laws. 5. [T]he controversy between the Plaintiff and Robert G. Morris and Joyce M. Morris arises out of their contacts within the State of Texas. . . . 7. [T]he fiduciary[-]shield doctrine does not apply to the facts of this case as a basis for limiting Texas jurisdiction over Robert G. Morris and Joyce M. Morris. 8. Robert G. Morris and Joyce M. Morris may be individually liable for fraudulent or tortuous [sic] acts committed while in the service of Morris Genetics, L.L.C. and/or Morris Genetics. 9. Robert G. Morris and Joyce M. Morris knew or should have known that the brunt of the injury will [sic] be felt by a resident or residents of the State of Texas and they knew or should have reasonably anticipated being haled into Court to answer for their actions. 10. Robert G. Morris and Joyce M. Morris committed specific acts in Texas with reasonably foreseeable consequences within Texas boundaries. 11. Robert G. Morris=[s] actions in connection with his actions in Texas based upon his Texas veterinary license are sufficient to establish general jurisdiction over him. Appellee, Beau Schilling, alleged the following facts in support of the trial court=s jurisdiction over appellants: (1) on or about September 17, 2001, November 27, 2001, and November 28, 2001, appellants came to the Schilling Ranch in Live Oak County, Texas and performed veterinary and embryo transfer work on appellee=s Boer Goats for the purpose of obtaining up to 101 Boer kids; (2) appellants transferred 152 Boer embryos over the same period; (3) appellants performed similar embryo transfer programs on other ranches in Texas during the same period and in previous years; (4) appellants represented they had the necessary skill, license and experience to have a successful embryo transfer program; (5) appellants represented that an estimated 101 pregnancies would occur from the embryo transfers; (6) appellants represented that Robert was a skilled and licensed veterinarian and that Joyce was a licensed and skilled embryologist; and (7) despite the represented pregnancies, there were only ten pregnancies to term (live births) in this embryo transfer program. Appellants concede that they were physically present in Texas for the purpose of performing embryonic transfers. However, appellants claim that appellee=s allegations fail to recognize they were performing their duties as employees of Morris Genetics, L.L.C., and not in an individual capacity. The main thrust of appellants= argument is that they are protected individually by the fiduciary-shield doctrine. We will first address appellants= activities in their respective individual capacities. See Shapolsky v. Brewton, 56 S.W.3d 120, 132 (Tex. App.BHouston [14th Dist.] 2001, pet. denied) (when there are multiple defendants, we test each defendant=s actions and contacts with the forum separately). Findings of fact 2, 7, 15, 16, 18, 21, 26, 28, 30, 31, and 35 refer to embryo transfer programs conducted in Texas by Robert over a period of time. Robert=s deposition testimony, as well as other documented evidence contained in the record, supports these findings. Robert testified he began performing embryo services in Texas in November 1995, and continued to do such each year thereafter. His presence in the state was not continual but scheduled periodically over the course of a few days or weeks each fall and spring. Robert said he became licensed to practice veterinary medicine in Texas in August, 2000. He also said that additional embryo transfer programs were already scheduled in Texas for future dates. Findings of fact 2, 7, 15, 16, 18, 21, 26, 28, 30, 31, 34, 36, and 37 refer to Joyce=s contacts with Texas. The record shows that Joyce was physically present in Texas on or about the specified dates to perform services as an embryologist. Joyce testified that she would Acollect the embryos, evaluate them, handle them, and then replace them back in.@ She also testified that she and her husband, Robert, worked together on all embryo transfer programs performed in Texas. The evidence supports the trial court=s findings that appellants were physically present in Texas and performed the transplant services that appellee alleged gave rise to the claims against them. Appellants purposefully conducted a substantial amount of business in Texas and it was reasonably foreseeable that they could be haled into court within this state. See M.G.M. Grand Hotel, 8 S.W.3d at 408. Because we conclude appellants have sufficient minimum contacts with this state, we now evaluate whether the assertion of personal jurisdiction comports with traditional notions of fair play and substantial justice. Burger King, 471 U.S. at 476; Guardian Royal, 815 S.W.2d at 228. Appellants have performed embryo transfer programs in Texas every year since 1995, and Robert is a licensed veterinarian in this state. Other than their contacts with Texas for business purposes, appellants have family in this state that they visit regularly. The assertion of specific personal jurisdiction comports with traditional notions of fair play and does not appear to overburden appellants. As for the interests of Texas in adjudicating the dispute, Texas has a heightened interest since the alleged torts occurred in Texas and Texas residents are involved. Appellants contend they performed all services as employees of Morris Genetics, L.L.C. However, corporate agents are individually liable for fraudulent or tortious acts committed while in the service of their corporation. See Shapolsky, 56 S.W.3d at 133. At this stage in the proceeding, we are not charged with determining the merits of appellee=s allegations against appellants. See Stern v. KEI Consultants, Ltd., 123 S.W.3d 482, 489 (Tex. App.BSan Antonio 2003, no pet.). Instead, we examine appellee=s allegations and then determine separately whether the evidence establishes a substantial connection between appellants and Texas. Id. In his deposition, Robert conceded that a possible reason for the substantial percentage drop in successful births was that he used a contaminated microscope. It is foreseeable that the use of a contaminated microscope to perform embryo transfers on goats in Texas will cause harm to their respective Texas-resident owners. For this reason, we conclude that a substantial nexus exists between appellants, Texas, and the alleged tortious acts. Accordingly, we hold the evidence is legally and factually sufficient to support the trial court=s finding that it has specific personal jurisdiction over both appellants. We overrule appellants= first point of error. 2. Fiduciary-Shield Doctrine By their second point of error, appellants complain that the fiduciary-shield doctrine prohibits the trial court from asserting personal jurisdiction over them. The fiduciary-shield doctrine protects a corporate officer or employee from the trial court=s exercise of general personal jurisdiction when the individual=s contacts with Texas were on behalf of the employer. SITQ E.U., Inc. v. Reata Rests. Inc., 111 S.W.3d 638, 650-51 (Tex. App.BFort Worth 2003, pet. dism=d); Brown v. Gen. Brick Sales Co., 39 S.W.3d 281, 297-98 (Tex. App.BFort Worth 2001, no pet.). The fiduciary-shield doctrine has not been expressly adopted by the Texas Supreme Court. Brown, 39 S.W.3d at 300. We note that the fiduciary‑shield doctrine has been applied only to the exercise of general personal jurisdiction over a non-resident defendant. See id. ("Where intermediate appellate courts have applied some aspects of the fiduciary-shield doctrine, they have limited its application to jurisdictional claims based on the theory of general jurisdiction as opposed to specific jurisdiction."). Moreover, the fiduciary‑shield doctrine does not protect an employee from specific personal jurisdiction as to intentional torts or fraudulent acts for which the employee may be held individually liable. SITQ, 111 S.W.3d at 651. In Texas, a non-resident defendant must negate all bases of personal jurisdiction to prevail in a special appearance. See Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex. 1985). Because we have held that the trial court has specific personal jurisdiction over both appellants, there is no need to evaluate general jurisdiction requirements or further discuss the fiduciary-shield doctrine. Appellants= second point of error is overruled. B. Sufficiency of Pleadings In their fourth point of error, appellants contend there is no legal theory on which the trial court could assert personal jurisdiction. Appellants complain that appellee failed to meet his burden of pleading allegations sufficient to establish the trial court=s personal jurisdiction over them individually. The record does not contain a motion to quash. Because appellants did not file a motion to quash, they waived any complaint that appellee failed to meet his pleading burden. See Kawasaki Steel Corp., 699 S.W.2d at 203. Therefore, the burden shifted to appellants to negate all bases for the trial court=s exercise of personal jurisdiction. See id. We have previously held, however, that the evidence is legally and factually sufficient to support the trial court=s finding that it has specific personal jurisdiction over both appellants. Accordingly, we overrule appellants= fourth point of error. We affirm the trial court=s order denying the special appearances of Robert G. Morris, D.V.M. and Joyce M. Morris. FEDERICO G. HINOJOSA Justice Memorandum Opinion delivered and filed this the 30th day of August, 2005. [1] Parties may challenge by interlocutory appeal trial court=s orders regarding special appearances. Tex. Civ. Prac. & Rem. Code Ann. ' 51.014(7) (Vernon Supp. 2004-05). [2] The Morrises have made similar challenges to jurisdiction in other cases filed in Texas. See Morris v. Powell, 150 S.W.3d 212, 217 (Tex. App.BSan Antonio 2004, pet. filed); Morris v. Kohls-York, 164 S.W.3d 686, 690 (Tex. App.BAustin 2005, pet. filed). [3] Appellants have waived review of their third issue, wherein they contend the evidence is insufficient to support the trial court=s finding that they committed an intentional tort, because they failed to direct this Court to such a finding and failed to present a concise argument for this contention. See Tex. R. App. P. 38.1(h). Furthermore, when reaching a decision to exercise or decline jurisdiction based on the defendant's alleged commission of a tort, the trial court should examine only the necessary jurisdictional facts and should not reach the merits of the case. See EMI Music Mexico, S.A. de C.V. v. Rodriguez, 97 S.W.3d 847, 856 (Tex. App.BCorpus Christi 2003, no pet.).