Herbert Rolnick v. Sight's My Line, Inc., a Florida Corporation Stewart Lantz Riggs, Aleshire & Ray Blazier, Christensen, Bigelow & Vir, P.C. And Adams & Graham

ACCEPTED 03-15-00335-CV 6286512 THIRD COURT OF APPEALS AUSTIN, TEXAS 7/30/2015 9:54:05 AM JEFFREY D. KYLE CLERK NO. 03-15-00335-CV FILED IN IN THE THIRD COURT OF APPEALS 3rd COURT OF APPEALS ____________________________________________ AUSTIN, TEXAS 7/30/2015 9:54:05 AM JEFFREY D. KYLE HERBERT ROLNICK Clerk

v.

SIGHT’S MY LINE, INC, et al

____________________________________________ Accelerated Appeal from the 200th District Court Travis County, Texas

Brief of Appellee Riggs, Aleshire & Ray, P.C. ______________________________________________

KIDD LAW FIRM 819 West 11th Street Austin, TX 78701 512-330-1709 (fax) Scott R. Kidd State Bar No. 11385500 512-330-1713 scott@kiddlawaustin.com Scott V. Kidd State Bar No. 24065556 512-542-9895 svk@kiddlawaustin.com

TABLE OF CONTENTS

Table of Contents i Index of Authorities ii Caption 1 Statement of Facts 1 Summary of Argument 7 Argument & Authorities 8

Standard of Review 8

No Error In Denial Of Unsworn Special Appearance 9

Rolnick’s Contacts Meet The “Minimum Contacts” Test For Jurisdiction in Texas 12

Analysis Of The Jurisdictional Facts 15

Fair Play And Substantial Justice 22 Conclusion 25 Prayer 26 Certificate of Compliance 26 Certificate of Service 27 i

INDEX  OF  AUTHORITIES

Cases

Abilene Diagnostic Clinic, PLLC v. Paley, Rothman, Goldstein, Rosenberg, Eig & Cooper, Chartered, 364 S.W.3d 359 (Tex. App.—Eastland 2012, no pet.) 19

Ahrens & DeAngeli v. Flinn, 318 S.W.3d 474 (Tex.App.— Dallas 2010, pet. denied) 19

Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801 (Tex. 2002) 14

BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) 8, 9, 13

Burger  King  Corp.  v.  Rudzewicz,  471  U.S.  462  (1985)              22,  23

Casino Magic Corp. v. King, 43 S.W.3d 14 (Tex. App.— Dallas 2001, pet. denied) 10, 11

CSR  Ltd  v.  Link,  925  S.W.2d  591  (Tex.  1996)         12

Guardian Royal Exch. Assurance, Ltd v. English China Clays, P.L.C., 815 S.W.2d 223 (Tex. 1991) 15, 23

Kelly v. Gen. Interior Construction, Inc., 301 S.W.3d 653 (Tex. 2010) 12, 13

Kytel International Group, Inc. v. Rent-­‐A-­‐Center, Inc., 132 S.W.3d 717 (Tex. App.—Dallas 2004, no pet.) 11

Markette v. X-­‐Ray X-­‐Press Corp., 240 S.W.3d 464 Tex. App.—Houston[14th Dist.] 2007, no pet.) 20

Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005) 14, 15, 19, 20

ii

Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007) 12, 13, 14

Moncrief Oil International, Inc. v. OAO Gazprom, 414 S.W.3d 142 (Tex. 2013) 13, 15

Proskauer Rose LLP v. Pelican Trading, Inc., 2009 WL 242993 (Tex. App.—Houston [14th Dist.] 2009) 20, 22

Prosperous Maritime Corp. v. Farwah, 189 S.W.3d 389 (Tex. App.—Beaumont 2006, no pet.) 10, 11

Retamco Operating, Inc. v. Republic Drilling, 278 S.W.3d 333 (Tex. 2009) 13

Siemens AG v. Houston Casualty Company, 127 S.W.3d 436 (Tex. App.—Dallas 2004, no pet.) 11

Villapando v. De La Garza, 793 S.W.2d 274 (Tex. App.—Corpus Christi 1990, no writ) 10

York v. State, 73 Tex. 651, 11 S.W. 869 (1889), aff’d 137 U.S. 15, 11 S.Ct. 869 (1889) 9

Statutes  and  Rules TEX.  CIV.  PRAC.  &  REM.  CODE  §17.41                12 TEX.  R.  CIV.  P.  120a                          9 iii

NO. 03-15-00335-CV

IN THE THIRD COURT OF APPEALS ____________________________________________

HERBERT ROLNICK

v.

SIGHT’S MY LINE, INC, et al

____________________________________________ Accelerated Appeal from the 200th District Court Travis County, Texas

Brief of Appellee Riggs, Aleshire & Ray ______________________________________________

Comes   now   Appellee   Riggs,   Aleshire   &   Ray   and   files   this Appellee’s  Brief.

STATEMENT  OF  FACTS

Appellant’s   Statement   of   Facts   includes   many   characterizations   of the   facts   and   omits   certain   important   evidence.   Accordingly,   Appellee Riggs,  Aleshire  &  Ray  offers  its  own  Statement  of  Facts. Sight’s   My   Line,   Inc.,   (“SML”)   is   a   Florida   corporation   that   was engaged  in  the  retail  optical  business  in  Texas.  (CR  389,  390).    SML  had 1 locations  in  several  South  Texas  cities,  and  it  did  business  only  in  Texas. (CR   390,   514).     The   sole   stockholder   of   SML   was   Stewart   Lantz (“Lantz”),  a  resident  of  Florida.    (CR  391) Herbert   Rolnick   (“Rolnick”)   is   a   lawyer   living   in   Coral   Gables, Florida.  (CR  502).    He  has  represented  Lantz  and  entities  in  which  Lantz has  been  involved  for  over  twenty  years.  (CR  382).      Rolnick  represented Lantz  in  the  formation  of  SML.    (CR  390,  503). In   2009,   SML   came   under   investigation   by   the   Texas   Health   & Human   Services   Commission   related   to   a   possible   overcharge   claim. (CR   389,   548).     To   represent   SML   in   that   investigation,   Lantz   retained Jason  Ray  (“Ray”),  a  member  of  Riggs,  Aleshire  &  Ray  (“RAR”).    (CR  548). Ray   is   Board   Certified   in   Administrative   Law   by   the   Texas   Board   of Legal  Specialization.  (CR  548). Lantz   had   engaged   in   some   initial   negotiations   with   American Optical   Services   (“AOS”)   about   a   potential   sale   of   the   assets   of   SML   to AOS,   but   those   negotiations   had   not   progressed   and   Lantz   had abandoned   the   process.   (CR   503-­‐504).   However,   in   June   2012,   Lantz decided   that   he   should   again   pursue   sale   of   the   SML   business   due   to   his perception   of   the   regulatory   climate   related   to   the   business.   (CR   382). Negotiations  with  AOS  began  again.  (CR  504). 2 AOS  is  a  Delaware  Corporation  with  its  principal  place  of  business in  Nevada.    The  parties  did  negotiate  a  contract  for  sale  of  the  assets  of SML   to   AOS,   and   that   contract   was   dated   October   5,   2012.     Rolnick represented   SML   in   the   negotiations   and   sale   for   a   flat   fee   of   between $40,000.00   and   $50,000.00.   (CR   394,   514).   The   negotiations   for   the   sale were  all  handled  by  Rolnick.  (CR  391,  505,  559). On   or   about   October   1,   2012,   Lantz   and   Rolnick   telephoned   Ray. (CR   384,   391,   505,   549-­‐550).     They   explained   to   Ray   that   Lantz   had contracted  to  sell  the  assets  of  SML,  and  they  wanted  a  Texas  lawyer  to review   some   of   the   documents.   (CR   549).     There   is   a   dispute   in   the evidence  concerning  whether  Ray  informed  Lantz  and  Rolnick  that  Ray did  not  feel  qualified  to  review  documents  related  to  an  asset  sale.    Ray testified   that   he   did   inform   them   of   that   fact   and   indicated   that   he   did not   want   to   undertake   the   review.   (CR   549,551)     According   to   Ray’s testimony,   Lantz   and   Rolnick   stated   that   they   wanted   him   involved   in the   transaction   anyway.   (CR   549).     According   to   Lantz   and   Rolnick,   they were   not   informed   of   any   limitations   on   Ray’s   ability   to   review   the documents.  (CR  385,  506).    Ray  also  testified  that  he  informed  Lantz  and Rolnick  that  he  would  have  another  lawyer,  Paul  Browder,  an  attorney 3 with   Blazier,   Christensen,   Bigelow   &   Virr   (“BCBV”),   review   the documents-­‐-­‐testimony  that  Lantz  and  Rolnick  dispute.  (CR  549). Ray   had   one   more   conversation   with   Rolnick   shortly   after   the initial   conversation   with   Lantz   and   Rolnick.     Ray   then   received   an   email from   Rolnick’s   legal   assistant   with   instructions   as   to   what   Rolnick wanted  Ray  to  do.  (CR  506-­‐507,  552).

“Mr. Rolnick is out of the country this week, however, pursuant to your previous conversation with him, he asked that I forward you a copy of the Security Agreement and Promissory Note (which are attached to this email). Also attached you will find a copy of the fully executed copy of the Agreement so you have some understanding of the transaction. Mr. Rolnick would like you to review the Security Agreement and Promissory Note and confirm that these are acceptable for Texas law, i.e. that they can be recorded and that they would enable us to foreclose in the event of a default.” (CR 424)

Ray  received  the  executed  contract,  draft  security  agreement,  and  draft promissory  note.    Ray  then  forwarded  those  documents  to  Browder  for his   review.   (CR   550).     Browder   made   comments   and   raised   questions with  regard  to  the  documents.  (CR  550).    Ray  then  took  those  comments and   questions,   incorporated   them   into   an   email,   and   forwarded   them   to Rolnick.    (CR  550). Among  the  provisions  of  the  promissory  note  was  a  reference  that the   security   interest   would   be   recorded   in   Delaware.     The   specific 4 language  in  the  promissory  note  stated  “Holder  may  file  a  Form  UCC-­‐1 with  the  Secretary  of  State  of  the  State  of  Delaware  to  perfect  such  lien of   record.”   (CR   486).     Contrary   to   the   assertion   by   Appellant   in   his Statement   of   Facts   that   “comments   by   Ray   sent   back   to   Rolnick   in Florida,   however,   included   one   indicating   the   UCC-­‐1   instead   should   be filed   in   Texas   where   the   assets   at   issue   were   located,”   what   Browder actually  raised,  and  what  was  passed  on  in  Ray’s  email,  was  a  question. The  actual  question  that  was  raised  was  as  follows:

“Where will the assets be held? Texas, right? Shouldn’t the UCC-­‐1 be filed where the assets are located?”

Rolnick   never   contacted   Ray   to   resolve   those   questions.   (CR   508,   553) Rolnick   proceeded   to   close   the   transaction   on   November   1,   2012,   and Ray   had   no   knowledge   of   or   participation   in   the   drafting   of   the   final documents  or  the  closing.  (CR  508-­‐510,  560). The   next   time   Ray   had   any   participation   in   the   transaction   at   all (or  even  knew  that  it  had  closed)  was  when  he  was  contacted  by  Rolnick with   a   direction   to   record   the   UCC-­‐1   in   Texas   approximately   two months  after  the  transaction  had  closed.  (CR  555-­‐556,  560,  562).    Ray  at first  declined  because  he  did  not  know  procedurally  how  to  do  so.  (CR 562).    Rolnick  prevailed  on  Ray  to  do  so  for  him  since  Ray  was  in  Austin. 5 (CR   562).     Rolnick   sent   the   UCC-­‐1   to   Ray,   and   Ray   forwarded   it   to Browder  for  recordation  at  the  office  of  the  Secretary  of  State.    (CR  558). Ray   had   no   further   contact   with   Lantz   or   Rolnick   until   over   a   year later   when   he   was   contacted   about   AOS’s   default.   (CR   560).     Rolnick contacted   him   about   pursuing   litigation   to   foreclose   on   the   assets.   (CR 560).    Again,  that  was  not  Ray’s  area  of  practice,  and  SML  was  referred to  Adams  &  Graham  (“A&G”)  to  pursue  the  litigation.    (CR  387). SML   filed   suit   against   AOS   on   the   debt   and   to   foreclose   on   the security,   to   the   extent   the   collateral   still   existed.     At   that   time,   AOS’s parent  company,  MacEyser  Holdings,  filed  for  bankruptcy  protection  in Delaware.    SML  filed  a  motion  to  lift  stay  in  the  bankruptcy  proceeding. That   motion   was   denied   on   the   basis   that   SML   had   not   perfected   its security   interest   by   recording   the   UCC-­‐1   in   Delaware.     In   light   of   that ruling,   Lantz   contacted   Rolnick   and   Ray   concerning   the   issue   of perfection  of  the  security  interest.  (CR  512).    At  that  time,  Rolnick  was successful  in  diverting  Lantz’s  attention  from  him  to  Ray.  (CR  512-­‐513). SML   and   Lantz   then   filed   suit   in   Travis   County   District   Court against  RAR,  BCBV,  and  A&G.  (CR  3).    RAR  immediately  joined  Rolnick  as a  third-­‐party  defendant,  and  plaintiffs  then  amended  their  pleadings  to add  Rolnick  as  a  defendant.  (CR  17,  137).    In  answer  to  both  RAR’s  third-­‐ 6 party   petition   and   plaintiffs’   First   Amended   Original   Petition,   Rolnick filed   unsworn   special   appearances.   (CR   23,   147).     Rolnick’s   special appearance  was  heard  and  overruled  by  the  trial  court.  (CR  697).

SUMMARY  OF  ARGUMENT

The   requirements   for   filing   a   special   appearance   are   stated   in Rule   120a,   Texas   Rules   of   Civil   Procedure.     Strict   compliance   with   the rule   is   required.     Rule   120a   requires   that   the   special   appearance   be made  by  sworn  motion.    The  special  appearances  filed  by  Rolnick  were not  sworn,  and  therefore  were  not  in  compliance  with  Rule  120a.    The trial   court   does   not   commit   error   in   overruling   an   unsworn   special appearance. Jurisdiction   of   nonresident   defendants   is   determined   based   on whether   the   defendant   has   sufficient   minimum   contacts   with   Texas   to support   jurisdiction   under   the   Texas   Long-­‐Arm   Statute.     Those minimum   contacts   exist   if   the   nonresident   defendant   has   availed himself   of   the   privilege   of   conducting   activities   in   Texas.     The   contact with   Texas   must   have   been   purposeful,   and   the   defendant   must   have sought   some   benefit   from   the   contact.     In   addition,   the   assertion   of   such 7 jurisdiction   must   comport   with   traditional   notions   of   fair   play   and substantial  justice. SML’s  business  was  entirely  a  Texas  operation.    All  of  its  business activity   was   in   Texas,   and   all   of   its   assets   (including   its   real   estate interests)  were  in  Texas.    When  SML  sold  its  assets,  Rolnick  negotiated the   contract   and   closed   the   transaction.     He   had   Jason   Ray   review   the promissory   note   and   security   agreement,   but   all   decisions   about perfection   of   the   security   interest   were   made   by   Rolnick.     Rolnick   made the   decision   to   record   the   UCC-­‐1   in   Texas,   and   Rolnick   sent   it   to   Ray with   instructions   to   record   it   in   Texas.     When   SML’s   purchaser   sought bankruptcy  protection  it  was  discovered  that  Rolnick  had  recorded  the UCC-­‐1  in  the  wrong  state  to  properly  perfect  that  interest.    Since  the  suit by  SML  and  its  owner  is  over  the  failure  to  properly  perfect  that  security interest,  Rolnick  has  sufficient  contacts  with  Texas  to  be  subject  to  the jurisdiction  of  the  Texas  courts.

ARGUMENT  &  AUTHORITIES

Standard  of  Review Whether  a  trial  court  has  personal  jurisdiction  over  a  defendant  is a  matter  of  law  and  is  reviewed  de  novo.    BMC  Software  Belgium,  N.V.  v. 8 Marchand,  83   S.W.3d   789,   794   (Tex.   2002).     If   the   trial   court   does   not issue   findings   of   fact   and   conclusions   of   law,   all   facts   necessary   to support  the  judgment  and  supported  by  the  evidence  are  implied.    BMC at  795.

No  Error  In  Denial  of  Unsworn  Special  Appearance

Rule  120a  was  adopted  to  address  the  issue  presented  by  York   v. State,   73   Tex.   651,   11   S.W.   869   (1889),   aff’d   137   U.S.   15,   11   S.Ct.   869 (1889).       The   court   in   York   held   that   any   appearance,   even   one   to challenge  service  or  jurisdiction,  constituted  a  general  appearance.    This resulted   in   there   being   no   direct   way   that   a   nonresident   defendant could   challenge   the   court’s   jurisdiction   over   that   defendant.     That continued   to   be   the   law   in   Texas   until   the   Supreme   Court   of   Texas adopted   Rule   120a   in   1962.     Rule   120a   provided   a   vehicle   for   a defendant  to  challenge  the  court’s  in  personam  jurisdiction  without  the challenge  itself  constituting  a  general  appearance.

Rule   120a   provides   specific   requirements   to   which   the   special appearance  must  conform.    These  requirements  include,  among  others, that  the  “special  appearance  shall  be  made  by  sworn  motion  filed  prior to   motion   to   transfer   venue   or   any   other   plea,   pleading,   or   motion….” 9 The   motion   must   be   heard   before   a   motion   to   transfer   venue   or   any other  plea  or  pleading.

RAR  was  an  original  defendant  in  the  Plaintiffs’  Original  Petition. (CR   3).     Upon   filing   its   original   answer,   Herbert   Rolnick   was immediately   added   as   a   third-­‐party   defendant   by   RAR.   (CR   17).     Rolnick filed   a   special   appearance   to   the   third-­‐party   petition   filed   by   RAR,   and the   plaintiffs   then   amended   and   added   Rolnick   as   an   additional defendant.  (CR  137).    Rolnick  again  filed  a  special  appearance  as  to  the plaintiff’s   First   Amended   Original   Petition.   (CR   147).     Neither   of   the special   appearances   filed   by   Rolnick   were   sworn   as   required   by   Rule 120a.    Rolnick  did  file  two  nearly  identical  affidavits  in  conjunction  with the   special   appearances   he   filed.     However,   in   those   affidavits   Rolnick swears   to   the   facts   stated   in   the   affidavits   but   does   not   swear   to   the facts  stated  in  the  special  appearances  he  filed.    (CR  35,  159).

Strict   compliance   with   the   rule   governing   special   appearances   is required.     Casino   Magic   Corp.   v.   King,   43   S.W.3d   14   (Tex.   App.—Dallas 2001,   pet.   denied).     A   trial   court   does   not   commit   error   in   denying   an unsworn  special  appearance.    Casino  Magic  Corp  at  18;  Villapando  v.  De La   Garza,   793   S.W.2d   274,   276   (Tex.   App.—Corpus   Christi   1990,   no writ);     Prosperous  Maritime  Corp.  v.  Farwah,  189  S.W.3d  389,  392  (Tex. 10 App.—Beaumont   2006,   no   pet.).     When   the   affidavits   attached   to   the special   appearance   pleadings   do   not   state   that   the   facts   set   out   in   the pleadings   are   true   and   correct,   but   instead   state   only   that   the   facts   in the  affidavits  are  true  and  correct,  the  affidavits  do  not  verify  the  special appearance.    Prosperous  Maritime  at  393-­‐394;  Casino  Magic  at  18.    The courts  have  routinely  upheld  the  denial  of  a  special  appearance  on  the basis   that   the   nonresident   failed   to   file   a   sworn   motion.     See   Kytel International  Group,  Inc.  v.  Rent-­‐A-­‐Center,  Inc.,  132   S.W.3d   717,   719   (Tex. App.—Dallas   2004,   no   pet.);   Siemens   AG   v.   Houston   Casualty   Company, 127  S.W.3d  436,  439  (Tex.  App.—Dallas  2004,  no  pet.).

Rolnick  did  not  file  a  sworn  motion  as  required  by  Rule  120a.    (CR 23,   147).     While   Rolnick   did   file   affidavits   in   support   of   his   motion,   all that   the   affidavits   did   was   swear   to   the   facts   stated   in   the   affidavits.   (CR 35,   159).     Rolnick’s   affidavits   did   not   swear   to   the   facts   stated   in   his special  appearance.    Rolnick’s  special  appearance  was  not  in  compliance with  the  Rule,  and  therefore  the  trial  court  did  not  commit  any  error  in denying  the  special  appearance. 11

Rolnick’s Contacts Meet the “Minimum Contacts” Test for Jurisdiction in Texas

Jurisdiction  over  nonresident  defendants  is  governed  by  the  Texas Long-­‐Arm   Statute,   TEX.   CIV.   PRAC.   &   REM.   CODE   §17.41   et   seq.     The extent  of  the  jurisdictional  grant  in  the  Texas  Long-­‐Arm  Statute  is  to  the fullest   extent   permitted   by   the   federal   constitutional   requirements   of due  process.    Moki   Mac   River   Expeditions   v.   Drugg,   221  S.W.3d  569,  575 (Tex.  2007).

A   Texas   court   may   exercise   personal   jurisdiction   over   a nonresident   defendant   only   if   the   requirements   of   both   the   due   process clause   of   the   Fourteenth   Amendment   to   the   United   States   Constitution and   the   Texas   Long-­‐Arm   Statute   are   satisfied.     CSR   Ltd.   v.   Link,   925 S.W.2d   591,   594   (Tex.   1996).     The   assertion   of   jurisdiction   over   a nonresident   is   proper   and   consistent   with   due   process   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.     Kelly   v.   Gen.   Interior Construction,   Inc.,   301   S.W.3d   653   (Tex.   2010).     The   defendant   has established  minimum  contacts  with  the  forum  state  when  the  defendant has   purposefully   availed   himself   of   the   privilege   of   conducting   activities 12 within   the   forum   state,   and   has   thus   invoked   the   benefits   and protections   of   the   forum   state’s   laws.     Retamco   Operating,   Inc.   v. Republic   Drilling,   278   S.W.3d   333   (Tex.   2009);   Moncrief   Oil International,  Inc.  v.  OAO  Gazprom,  414  S.W.3d  142  (Tex.  2013).

The  plaintiff  (and  third-­‐party  plaintiff)  bears  the  initial  burden  of pleading   sufficient   allegations   to   bring   the   nonresident   defendant within   the   provisions   of   the   Texas   long-­‐arm   statute.     Moki  Mac  at   574; BMC  Software  at  793.    Once  the  plaintiff  satisfies  this  burden,  the  burden shifts   to   the   nonresident   defendant   to   negate   all   bases   for   personal jurisdiction  alleged  by  the  plaintiff.    Kelly  v.  Gen.  Interior  Constr.,  Inc.,  301 S.W.3d  653,  658  (Tex.  2010). As   noted   in   Retamco  Operating,  Inc,  a   nonresident’s   contacts   can give   rise   to   either   specific   jurisdiction   or   general   jurisdiction.     Specific jurisdiction   exists   when   the   defendant   purposefully   avails   himself   of conducting   activities   in   the   forum   state,   and   the   cause   of   action   arises from  or  is  related  to  those  contacts  or  activities. In   a   specific   jurisdiction   analysis,   the   court   must   focus   on   the relationship   between   the   defendant,   the   forum,   and   the   litigation. Moncrief  Oil,  414  S.W.3d  at  150.    There  must  be  a  substantial  connection between  the  defendant’s  contacts  with  the  forum  and  the  operative  facts 13 of   the   litigation   itself.     Moki   Mac,   221   S.W.3d   at   585.     In   the   specific jurisdiction   analysis,   the   court   must   focus   on   only   the   defendant’s contacts  with  the  forum.    The  defendant’s  contacts  must  be  purposeful and   not   random,   isolated,   or   fortuitous,   and   the   defendant   must   seek some   benefit,   advantage,   or   profit   by   availing   himself   of   the   jurisdiction. Michiana   Easy   Livin’   Country,   Inc.   v.   Holten,   168   S.W.3d   777,   785   (Tex. 2005). The   defendant’s   activities,   whether   they   consist   of   direct   acts within   Texas   or   conduct   outside   Texas,   must   justify   a   conclusion   that the   defendant   could   reasonably   anticipate   being   haled   into   a   Texas court.     Am.  Type  Culture  Collection,  Inc.  v.  Coleman,  83   S.W.3d   801,   806 (Tex.  2002).    Jurisdiction  is  premised  on  the  notions  of  implied  consent that,   by   invoking   the   benefits   and   protections   of   a   forum’s   laws,   the nonresident   consents   to   suit   there.     Michiana   at   785.     It   is   the   quality and   nature   of   the   defendant’s   contacts   with   the   forum   state,   rather   than their   number,   that   are   important   in   analyzing   minimum   contacts.     Am. Type  Culture  Collection  at  806. Specific   jurisdiction   is   established   if   the   defendant’s   alleged liability   arises   out   of   or   is   related   to   an   activity   conducted   within   the forum   state.     Moki   Mac   at   575-­‐576.     When   specific   jurisdiction   is 14 asserted,   the   minimum-­‐contacts   analysis   focuses   on   the   relationship among  the  defendant,  the  forum,  and  the  litigation.    Moncreif  Oil  at  150; Guardian   Royal   Exch.   Assurance,   Ltd   v.   English   China   Clays,   P.L.C.,   815 S.W.2d   223,   228   (Tex.   1991).     The   focus   is   on   the   defendant’s   conduct and  connections  with  the  forum  state  in  relation  to  the  alleged  liability. Michiana  at  788-­‐790.

Analysis  Of  The  Jurisdictional  Facts Rolnick   was   the   person   in   charge   of   negotiating   and   closing   the sale  of  SML’s  assets.  (CR  391,  392).    All  of  those  assets  were  located  in Texas,   including   SML’s   real   property   interests.   (CR   390).     Ray’s participation   in   the   transaction   was   minimal—he  was  asked  to  review  a note   and   security   agreement   to   see   if   they   could   be   recorded   in   Texas and   if   SML   would   be   able   to   foreclose   upon   default.     Rolnick   directed what  Ray  was  to  do,  and  the  limitations  on  Ray’s  engagement.    Ray  felt that  he  had  been  engaged  by  Rolnick.  (CR  556). After  forwarding  comments  and  questions  to  Rolnick,  Ray  was  not contacted  again  by  Rolnick  to  answer  any  of  the  questions  that  had  been raised   about   the   documents.   (CR   555-­‐556).     Instead,   Rolnick   made   all   of the   decisions   about   the   sale   of   the   Texas   assets   and   closed   the 15 transaction   without   Ray   even   being   informed   that   the   transaction   had closed. Approximately   two   months   after   closing,   Rolnick   contacted   Ray and  requested  that  Ray  record  the  UCC-­‐1  for  Rolnick  in  Texas.  (CR  555-­‐ 556).    The  UCC-­‐1  had  been  drafted  or  approved  by  Rolnick,  and  Ray  had never   seen   it.     At   first   resistant,   Ray   eventually   agreed   to   record   the document   for   Rolnick   with   the   Secretary   of   State.   (CR   561).     The decision   to   record   it   in   Texas   was   Rolnick’s   decision,   and   Ray   was merely  performing  a  favor  upon  Rolnick’s  request.  (CR  393,  562).    It  is no   different   than   if   Rolnick   had   himself   recorded   the   UCC-­‐l   at   the Secretary  of  State. None   of   this   analysis   focuses   on   the   conduct   of   anyone   but Rolnick.     He   negotiated   the   contract   for   the   sale   of   Texas   assets.     He negotiated   the   sale   of   Texas   real   estate   interests.     He   decided   how   to obtain  the  security  interest  in  the  Texas  assets.    And  most  importantly, Rolnick  directed  the  recordation  of  the  UCC-­‐1  in  Texas. The   plaintiffs’   claims   here   are   focused   on   their   claimed   losses from   the   loss   of   those   Texas   assets.     Their   complaints   relate   to   their claimed  security  interests  in  those  assets,  and  their  particular  complaint is  that  the  recordation  of  that  security  interest  in  Texas  was  negligence. 16 Rolnick   negotiated   and   closed   the   transaction,   and   he   made   all   of   the decisions   related   to   obtaining   and   protecting   the   plaintiffs’   security interests.     Most   specifically,   Rolnick   is   the   one   who   had   the   UCC-­‐1 recorded  in  Texas. These   are   not   fortuitous   contacts   with   Texas.     Rolnick   was certainly  aware  where  all  of  the  assets,  including  the  real  property,  were located   when   he   undertook   the   representation.     Rolnick   made   the conscious  decision  to  record  the  UCC-­‐1  in  Texas,  and  he  is  the  one  who sent  it  to  Texas  for  filing.    That  was  certainly  a  purposeful  contact,  and was   not   random,   fortuitous,   or   attenuated.     These   are   only   Rolnick’s contacts   with   Texas,   and   this   analysis   does   not   consider   any   other person’s  contacts  or  activities. Rolnick  certainly  sought  to  benefit  from  these  contacts.    Not  only had  he  represented  Lantz  and  his  entities  for  a  number  of  years,  Rolnick made  a  fee  of  over  $40,000.00  for  handling  this  Texas  sale.    To  say  that Rolnick  did  not  seek  or  obtain  any  benefit  from  his  contacts  with  Texas (including   the   recordation   of   the   UCC-­‐1)   is   to   turn   a   blind   eye   to   the realities  of  the  practice  of  law. These  contacts  are  directly  related  to  the  pending  litigation.    The plaintiffs’  claimed  damages  are  the  loss  of  the  Texas  assets  that  were  to 17 serve  as  security.    The  specific  act  about  which  the  plaintiffs’  complain  is the   recording   of   the   UCC-­‐1   in   Texas,   an   act   specifically   directed   by Rolnick.     Jurisdiction   of   Rolnick   is   obvious   based   on   his   conduct   and connections  with  Texas  in  relation  to  this  alleged  liability. Appellant   seems   to   argue   that   the   conventional   analysis   of personal   jurisdiction   that   applies   to   all   other   defendants   does   not   apply to  Rolnick  solely  because  he  is  a  lawyer.    According  to  the  argument  by Appellant,   there   is   a   special   “Lawyer   Rule.”     Under   that   “rule”   as advanced   by   Appellant,   as   long   as   the   nonresident   lawyer   sits   in   his office   in   another   State,   he   simply   cannot   be   subject   to   jurisdiction   in Texas   no   matter   how   much   he   has   contact   with   Texas   and   no   matter how  much  those  contacts  are  the  source  of  the  Texas  litigation.    That  is not  and  cannot  be  the  law. Lawyers  do  not  get  a  free  pass.    The  cases  cited  by  Appellant  for his  odd  argument  are  all  distinguishable  on  their  facts.    In  fact,  each  of those  cases  analyzes  the  jurisdictional  issues  just  as  Appellee  has  done in   this   brief.     In   those   cases,   the   court   has   analyzed   the   quality   and nature   of   the   lawyer’s   contacts   with   Texas.     In   each   of   those   cases,   the court   has   analyzed   the   connections   with   Texas   in   relation   to   the   alleged liability.     Those   courts   did   not   decide   that   simply   because   the   lawyer 18 was   not   physically   in   Texas   he   could   not   be   subject   to   jurisdiction   in Texas. In   Abilene   Diagnostic   Clinic,   PLLC   v.   Paley,   Rothman,   Goldstein, Rosenberg,   Eig   &   Cooper,   Chartered,   364   S.W.3d   359   (Tex.   App.— Eastland   2012,   no   pet.),   a   Texas   clinic   sued   a   Maryland   law   firm   for alleged   malpractice   in   the   preparation   of   a   defined   benefit   plan.     The claim  of  specific  jurisdiction  in  that  case  was  that  all  of  the  defendants “purposefully   availed   themselves   of   the   benefits   of   Texas   law   by   doing business  with  a  Texas  entity.”    In  sum,  what  the  defendant  had  done  is prepare   several   defined   benefit   plans   in   Maryland   and   send   them   to   the plaintiff   in   Texas.     As   the   court   noted,   this   is   the   “direct-­‐a-­‐tort” jurisdictional  theory  that  was  rejected  in  Michiana.    The  court  held  that to   determine   specific   jurisdiction,   the   court   had   to   focus   on   whether there  was  a  substantial  connection  between  the  defendant’s  purposeful contacts   with   the   forum   state   and   the   operative   facts   of   the   litigation. The   court   noted   that   Texas   authority   had   focused   on   where   the   legal work  was  performed,  but  the  jurisdictional  analysis  on  which  the  court determined  the  case  was  the  traditional  analysis  of  specific  jurisdiction. In   Ahrens  &  DeAngeli  v.  Flinn,  318   S.W.3d   474   (Tex.   App.—Dallas 2010,   pet.   denied),   a   Washington   and   Idaho   law   firm   was   sued,   along 19 with   others,   for   promoting   an   abusive   tax   shelter.     The   law   firm   had provided   representation   to   one   of   the   other   defendants   in   the developing   and   marketing   of   the   tax   shelter.     However,   the   legal   work had   all   been   performed   in   Washington   or   Idaho,   and   only communicated   to   a   codefendant   in   Texas.     The   court   utilized   the traditional   analysis   in   determining   that   there   were   not   sufficient contacts   with   Texas   to   support   personal   jurisdiction.     Performing   legal work   in   one   state   and   merely   communicating   with   persons   in   another state   is   not   enough   in   itself   to   support   jurisdiction.     However,   in   the present   case,   Rolnick   actually   took   action   in   Texas   with   regard   to perfecting  the  security  interest  in  the  collateral,  and  that  is  at  the  core  of plaintiffs’  claims  in  this  case. Proskauer  Rose  LLP  v.  Pelican  Trading,  Inc.,  2009   WL   242993   (Tex. App.—Houston   [14th   Dist.]   2009,   no   pet.)   also   involved   an   abusive   tax shelter.     The   plaintiffs   had   been   introduced   to   the   concept   of   the   tax shelter   by   their   accounting   firm.     The   accounting   firm   had recommended   that   the   plaintiffs   use   Proskauer   Rose   to   prepare   and deliver   an   opinion   letter   on   the   proposed   tax   shelter.     Proskauer   Rose prepared   drafts   of   the   opinion   letter,   communicated   with   the   plaintiffs (Texas  residents)  and  ultimately  prepared  the  opinion  letter  and  sent  it 20 to   the   Texas   residents.     However,   all   of   Proskauer   Rose’s   work   was   in New   York.     Again,   the   court   conducted   a   traditional   specific jurisdictional   analysis.     Routine   correspondence   from   the   out-­‐of-­‐state lawyer   is   not   the   kind   of   purposeful   contacts   that   support   personal jurisdiction,   and   the   sending   of   the   opinion   letter   to   Texas   could   not support   jurisdiction   as   “directing   a   tort   to   Texas”   under   the   holding   in Michiana.    The  present  case  differs  markedly  from  the  facts  in  Proskauer Rose.     In   the   present   case,   Rolnick’s   filing   of   the   UCC-­‐1   in   Texas   is   the basis  on  which  the  plaintiffs  claim  liability. Markette   v.   X-­‐Ray   X-­‐Press   Corp.,   240   S.W.3d   464   (Tex.   App.— Houston   [14th   Dist.]   2007,   no   pet.)   involved   an   Indiana   attorney representing   a   Texas   resident   in   an   Indiana   lawsuit.     The   client   had challenged  the  jurisdiction  of  the  Indiana  court,  and  that  challenge  had been   denied.     The   attorney   wrote   the   Texas   client   and   reviewed   the three   alternatives   available   to   it,   one   of   which   was   to   allow   a   default judgment  in  Indiana  and  challenge  the  Indiana  court’s  jurisdiction  when the  plaintiff  in  the  Indiana  case  sought  to  enforce  the  judgment  in  Texas. The  client  adopted  that  strategy,  and  it  ultimately  proved  unsuccessful. When   the   client   sued   the   Indiana   lawyer   for   malpractice   in   Texas,   the court   again   applied   a   traditional   specific   jurisdiction   analysis   and 21 determined  that  it  had  to  focus  on  the  connection  between  the  contacts and   the   litigation,   and   it   rejected   the   “direct-­‐a-­‐tort”   theory.     The   mere sending   of   a   letter   from   one   jurisdiction   to   another,   as   in   Proskauer, differs   markedly   from   the   filing   of   a   legal   document   such   as   a   UCC-­‐1, especially  when  the  filing  of  that  UCC-­‐1  is  at  the  core  of  the  litigation. Under   the   controlling   decisions   by   the   Supreme   Court   of   Texas and   the   evidence   in   this   record,   Rolnick   had   sufficient   minimum contacts   with   Texas   to   subject   him   to   jurisdiction   in   this   case. Accordingly,   the   District   Court   of   Travis   County   has   personal jurisdiction   of   him,   and   the   trial   court   correctly   decided   that   the minimum-­‐contacts   requirements   of   the   Texas   Long-­‐Arm   statute   had been  satisfied.

Fair  Play  and  Substantial  Justice Even   if   a   defendant   has   the   minimum   contacts   with   Texas   to justify  the  assertion  of  jurisdiction  under  the  long-­‐arm  statute,  the  court cannot  exercise  jurisdiction  if  doing  so  would  offend  traditional  notions of  fair  play  and  substantial  justice.    Burger  King  Corp.  v.  Rudzewicz,   471 U.S.   462,   477   (1985).     Only   in   “rare   cases”   will   the   exercise   of jurisdiction  not  comport  with  fair  play  and  substantial  justice  when  the nonresident   defendant   has   minimum   contacts   with   the   forum   state. 22 Burger  King  at  471.    In  determining  whether  the  assertion  of  jurisdiction comports  with  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   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.    Royal  Guardian  at  232. The   burden   on   this   particular   defendant   is   certainly   no   greater than   that   on   any   nonresident   defendant   who   must   defend   himself   in another   jurisdiction.     However,   defending   himself   in   Texas   would   not put   a   significantly   higher   burden   on   Rolnick   than   defending   himself   in Florida,  although  he  would  probably  have  to  travel  to  Texas  for  the  trial. While   the   initial   discovery   in   this   case   was   limited   to   the   issue   of jurisdiction,   Rolnick   has   already   been   deposed   and   it   may   not   be necessary   to   depose   him   again.     Therefore,   the   added   burden   of defending   himself   in   Texas   would   be   minimal,   especially   when compared  to  the  additional  burden  on  the  plaintiff  and  other  defendants in  pursuing  Rolnick  in  Florida  in  a  separate  case. 23 The   interests   of   Texas   in   adjudicating   the   dispute   certainly outweigh   the   interests   of   any   other   state   in   adjudicating   this   dispute. This  dispute  involves  interests  in  Texas  assets,  including  real  property. The   dispute   involves   the   application   of   Texas   law,   and   the   dispute involves   the   adjudication   of   the   liability   of   three   Texas   entities.     Since Rolnick   is   the   one   largely   (if   not   solely)   responsible   for   any   failure   to comply   with   the   standard   of   care,   Texas   has   a   significant   interest   in adjudicating  the  liability  of  all  the  parties  in  one  suit. The   plaintiff   can   only   get   jurisdiction   of   RAR,   BCBV,   and   A&G   in Texas.     While   the   plaintiffs   are   Florida   residents,   the   plaintiffs   must litigate   their   claim   against   the   Texas   defendants   in   Texas.     It   is   certainly more   convenient   for   the   plaintiffs   to   litigate   one   case   against   all   of   the defendants   in   Texas   than   to   litigate   one   case   in   Texas   against   three Texas  defendants  and  one  case  in  Florida  against  one  Florida  defendant. Additionally,   RAR   is   the   party   who   initially   joined   Rolnick   in   this litigation.     It   is   certainly   more   convenient   and   effective   for   RAR   to litigate  one  case  in  Texas  than  to  have  to  defend  the  case  in  Texas,  and  if an  adverse  result  is  reached,  pursue  a  separate  case  against  Rolnick  in Florida. 24 For  the  interstate  judicial  system,  the  most  efficient  resolution  of this   dispute   is   to   dispose   of   it   in   one   trial.     Since   the   Texas   defendants are  only  amenable  to  jurisdiction  in  Texas,  the  most  efficient  resolution is   to   try   one   case   in   Texas   against   all   defendants,   including   Rolnick, rather   than   try   one   case   in   Texas   and   potentially   multiple   cases   in Florida.

It   is   the   rare   case   indeed   when   asserting   jurisdiction   over   a nonresident   offends   the   traditional   notions   of   fair   play   and   substantial justice   if   the   defendant   has   sufficient   minimum   contacts   to   support jurisdiction.    This  is  not  that  rare  case.    Rolnick  has  sufficient  minimum contacts   with   Texas   to   support   the   assertion   of   jurisdiction,   and   the assertion   of   that   jurisdiction   does   not   offend   traditional   notions   of   fair play  and  substantial  justice.

CONCLUSION

The   transaction   out   of   which   this   case   grows   was   a   Texas transaction   involving   Texas   assets   and   Texas   real   property   interests. Rolnick   was   the   person   who   negotiated   the   contract,   prepared   all   of   the documents,   closed   the   transaction,   and   determined   to   record   the security   interest   in   Texas.     Rolnick’s   contacts   with   Texas,   especially   in the   all-­‐important   recording   of   the   UCC-­‐1   in   Texas,   were   not   fortuitous 25 but  rather  were  deliberate.    If  recording  the  UCC-­‐1  in  Texas,  as  Rolnick did,  is  the  basis  of  liability,  then  Rolnick  certainly  had  minimum  contacts with  Texas.    If  the  plaintiffs  are  going  to  assert  that  there  was  negligence in   the   way   the   security   interest   was   perfected   by   filing   in   Texas,   then Rolnick   needs   to   answer   for   that   act.     It   is   only   fair   and   just   that   he   be   a party  to  this  proceeding.

PRAYER

Wherefore,   Appellee   Riggs,   Aleshire   &   Ray   prays   that   the   court affirm  the  order  of  the  trial  court  denying  Rolnick’s  special  appearance.

KIDD LAW FIRM 819 West 11th Street Austin, TX 78701 512-330-1709 (fax) /s/Scott R. Kidd Scott R. Kidd State Bar No. 11385500 512-330-1713 scott@kiddlawaustin.com Scott V. Kidd State Bar No. 24065556 512-542-9895 svk@kiddlawaustin.com

Certificate of Compliance

This brief complies with the type-volume limitations of Texas Rule of Appellate Procedure 9.4. This brief was prepared using Microsoft Word for MAC, and exlusive of the exempted portions listed in Rule 9.4 contains 5157 words. /s/Scott R. Kidd

Certificate of Service

A copy of this brief has been served on Ruth Malinas, J. Hampton Skelton, Michael Johnson, and Robert Valdez through the electronic filing system this 29th day of July, 2015.

/s/Scott R. Kidd 27