Sealift, Inc. v. Thomas F. Satterly, D.O.

Affirmed and Memorandum Opinion filed July 17, 2003 Affirmed and Memorandum Opinion filed July 17, 2003. In The Fourteenth Court of Appeals ____________ NO. 14-03-00051-CV ____________ SEALIFT, INC., Appellant V. THOMAS SATTERLY, D.O., Appellee On Appeal from the 56th District Court Galveston County, Texas Trial Court Cause No. 01CV0724 M E M O R A N D U M   O P I N I O N In this interlocutory appeal, Sealift challenges the trial court=s order granting Dr. Thomas Satterly=s special appearance. Because we find that Satterly=s contacts with the State of Texas were insufficient to establish specific jurisdiction, we affirm the judgment of the trial court. Background Satterly, a Missouri physician, treated Calvin D. Fairbanks, the plaintiff in the underlying suit and also a Missouri resident, for an injury Fairbanks allegedly sustained while working on a ship owned by Sealift. Upon returning to Missouri, Fairbanks sought orthopedic care from Satterly. Satterly performed several procedures on Fairbanks, including a total knee replacement. Fairbanks brought a personal injury suit against Sealift. In conjunction with this suit, Fairbanks= attorneys, Melancon, Hogue & Buzbee, L.L.P. (hereinafter Athe firm@), sent a letter of protection to Satterly stating the following: On behalf of Calvin Fairbanks, the firm agrees that your facility is to be paid for services provided to our client, if the following conditions are met: 1. The charges are reasonable; 2. Your facility provides this office with copies of the reports and itemized statements for the services and charges, preferably after each visit or on a regular basis; 3. I [Anthony Buzbee] am the attorney in charge at the time the case is settled or at the time a judgment is collected; 4. There is enough money from a settlement or judgment to cover the charges incurred after all attorney fees have been paid and expenses reimbursed to this office; and 5. The patient/client acknowledges his liability for the payment in full of any and all charges incurred by your facility and in no event is this firm and/or Richard L. Melancon and/or Michael W. Hogue and/or Anthony Buzbee personally liable. Satterly subsequently sent Fairbanks= bills to Fairbanks= insurance carrier in Florida, naming the firm as an additional insurer on a claim form. The record is unclear as to whether Satterly ever responded to the letter or otherwise directly communicated with the firm.[1] Sealift filed a third-party action against Satterly seeking contribution. Sealift claimed Satterly provided unnecessary medical treatment resulting in increased fees and potential financial harm. Sealift points to the letter of protection as constituting a contract with Fairbanks= counsel in Texas such that it should provide the court with specific jurisdiction over Satterly. For the reasons discussed below, we find the letter of protection was insufficient to establish jurisdiction in Texas. Standard of Review The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provisions of the long-arm statute. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex. 2002). A defendant challenging a Texas court=s personal jurisdiction over it must negate all jurisdictional bases. Id. Whether a court has personal jurisdiction over a defendant is a question of law, which we review de novo. Id. at 794. However, the trial court frequently must resolve questions of fact before deciding the jurisdiction question. Id. When, as here, the trial court does not issue findings of fact and conclusions of law with its special appearance ruling, all facts necessary to support the judgment and supported by the evidence are implied. Id. at 795. When the appellate record includes both the reporter=s and clerk=s records, however, these implied findings are not conclusive and may be challenged for legal and factual sufficiency. Id. Personal Jurisdiction The Texas long-arm statute authorizes Texas courts to exercise jurisdiction over a nonresident defendant that does business in Texas. See Tex. Civ. Prac. & Rem. Code Ann. ' 17.041-.045 (Vernon 1997 & Supp. 2002). The broad language of the Adoing business@ requirement in section 17.042 permits the statute to reach as far as the federal constitutional requirements of due process will allow. Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex. 1991). Thus, we rely on precedent from the United States Supreme Court and other federal courts, as well as Texas decisions, to determine whether the assertion of personal jurisdiction is consistent with the requirements of due process. BMC Software, 83 S.W.3d at 795. Personal jurisdiction over a nonresident defendant 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. A nonresident defendant that has Apurposefully availed@ itself of the privileges and benefits of conducting business in the forum state has sufficient contacts to confer personal jurisdiction. Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76 (1985)). A defendant should not be subject to jurisdiction based on random, fortuitous, or attenuated contacts. Id. (citing Burger King, 471 U.S. at 475). Furthermore, the nonresident=s contacts must result from its own purposeful activity and not the unilateral activity of the plaintiff or a third party. See Guardian Royal, 815 S.W.2d at 227. The defendant=s contacts can give rise to either specific or general jurisdiction. Specific jurisdiction exists when the plaintiff=s claims arise out of or relate to the nonresident defendant=s contacts with Texas. Guardian Royal, 815 S.W.2d at 230. These contacts, in turn, must arise from action or conduct by the defendant that was purposefully directed toward Texas. Id. At the special appearance hearing, appellants argued specific jurisdiction was established when Satterly entered into a contract with a Texas party, all of which allegedly was to have been performed in Texas. Appellant also argued Satterly inserted himself into Texas litigation by taking a financial interest in the outcome of the underlying lawsuit. In response, Satterly=s affidavit states he has never practiced medicine in Texas, attended school here, owned any property, been the subject of a lawsuit, advertised, or actively sought business in Texas. Appellant points to no case law, and we can find none in any jurisdiction, to support the proposition that jurisdiction may extend to an individual receiving an unsolicited letter of protection.[2] The letter of protection does not constitute a contract and, even if it were a contract, the letter does not provide the minimum contacts required to extend jurisdiction over Satterly. First, there are a multitude of reasons why this letter of protection does not constitute a contract.[3] Foremost is the fact that Satterly never accepted an offer by Fairbanks= lawyers. Sealift=s lawyers acknowledged in the trial court that Satterly did not solicit the letter. Further, no evidence exists showing he responded to the correspondence in any way. The only action Sealift points to is Satterly=s listing of Fairbanks= law firm as an additional insurer of medical bills on claim forms filed with his insurance company. This does not constitute acceptance. Sealift also contends that Satterly accepted the firm=s letter by performing more surgeries on Fairbanks. We find this argument to be without merit, as the letter of protection never requested further medical treatment as a condition of receiving payment for services already performed. Rather, Satterly continued a course of treatment begun prior to this suit. Therefore, no contract existed between the parties. Furthermore, even if a contract had been formed, it did not constitute doing business in Texas for purposes of the long-arm statute. Tex. Civ. Prac. & Rem. Code Ann. ' 17.042 (Vernon 1997). Texas courts have long held that personal jurisdiction is not justified by the single fact that a nonresident contracts with a Texas resident. Budgget Indus., Inc. v. Faber Eng=g, L.L.C., 14-02-01076-CV, 2003 WL 21087138, at *4 (Tex. App.CHouston [14th Dist.] May 15, 2003, no pet.) (memorandum opinion); J.D. Fields & Co., Inc. v. W.H. Streit, Inc., 21 S.W.3d 599, 604 (Tex. App.CHouston [1st Dist.] 2000, no pet.). Here, the purported contract does not establish minimum contacts as Satterly neither did business in the State nor purposefully availed himself of the privilege of conducting activities within it by contracting with a Texas resident. Sealift contends the letter of protection creates a contract between a Texas law firm and Satterly, a Missouri resident. The correspondence, however, was written on behalf of Fairbanks and expressly disavows any liability on the part of the firm. At the most, the letter would constitute an agreement between two Missouri residentsCFairbanks and Satterly. An agreement between two out-of-state residents does not constitute doing business within Texas. In order for an action to form the basis of jurisdiction, the contact between the nonresident defendant and the forum state must have occurred as a result of the nonresident defendant=s purposeful conduct and not the unilateral activity of the plaintiff or others. Guardian Royal, 815 S.W.2d at 227. The nonresident defendant=s activities must have been Apurposefully directed@ to the forum and the litigation must result from alleged injuries that Aarise out of or relate to@ those activities. When specific jurisdiction is asserted, the minimum contacts analysis focuses on the relationship among the defendant, the forum and the litigation. Id. at 228 (citations omitted). Satterly directed no activities toward Texas. He performed medical services on a Missouri resident in Missouri and sent medical bills to the patient=s insurance carrier in Florida. The only contact Satterly has had with this State is receiving the unsolicited letter of protection from a patient=s Texas law firm. If this were sufficient to constitute the grounds for jurisdiction, it would open a floodgate of litigation, pulling in out-of-state defendants based on no more than the receipt of a letter. We decline to make this finding and overrule appellant=s sole point of error. The trial court=s judgment is affirmed. /s/ Leslie Brock Yates Justice Judgment rendered and Memorandum Opinion filed July 17, 2003. Panel consists of Justices Yates, Hudson, and Frost. [1] Sealift points to special appearance exhibits to show that Satterly sent documents directly to the law firm. However, these exhibits do not show whether Satterly sent any bills directly to the firm or merely named the firm as an additional insurer on health claim forms sent to AMO Medical Plan in Dania, Florida. The records provided to AMO by the firm include documents from Phelps County Regional Medical Center in Missouri, but nothing specifically indicates they were provided by Satterly. Regardless of whether Satterly directly provided documents to the firm, it would not affect our analysis. [2] ALetters of protection@ are sometimes used by attorneys in personal injury litigation to guarantee payment to healthcare providers from the proceeds of any future recovery. See, e.g., Brown v. Comm=n for Lawyer Discipline, 980 S.W.2d 675, 678 (Tex. App.CSan Antonio 1998, no pet.); Belt v. Comm=n for Lawyer Discipline, 970 S.W.2d 571, 573 (Tex. App.CDallas 1997, no pet.). [3] The elements of a contract are: (1) an offer; (2) acceptance in strict compliance with terms of the offer; (3) a meeting of the minds; (4) a communication that each party has consented to the terms of the agreement; (5) execution and delivery of the contract with an intent that it become mutual and binding on both parties; and (6) consideration. Angelou v. African Overseas Union, 33 S.W.3d 269, 278 (Tex. App.CHouston [14th Dist.] 2000, no pet.).