regional-urology-llc-regional-urology-ambulatory-surgery-center-llc ( 2010 )

NO. 12-09-00142-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
REGIONAL UROLOGY, L.L.C., § APPEAL FROM THE
REGIONAL UROLOGY AMBULATORY
SURGERY CENTER, LLC, REGIONAL
UROLOGY PROPERTY GROUP, L.L.C.,
REGIONAL UROLOGY ONCOLOGY
AND RADIATION TREATMENT
CENTER, L.L.C., ANDREGIONAL
UROLOGY ONCOLOGY AND
RADIATION PROPERTY GROUP, L.L.C.,
APPELLANTS
§ COUNTY COURT AT LAW #2
V.
DAVID T. PRICE, M.D., DAVID T.
PRICE, M.D., A PROFESSIONAL
MEDICAL CORPORATION AND
UROLOGICAL ONCOLOGY
SPECIALISTS, INC.,
APPELLEES § GREGG COUNTY, TEXAS
MEMORANDUM OPINION
Regional Urology, L.L.C., Regional Urology Ambulatory Surgery Center, L.L.C.,
Regional Urology Property Group, L.L.C., Regional Urology Oncology and Radiation Treatment
Center, L.L.C., and Regional Urology Oncology and Radiation Group, L.L.C., (collectively the
“Regional Urology entities”) appeal the trial court‟s order denying their special appearance in a
suit filed by David T. Price, M.D., David T. Price, M.D., a Professional Medical Corporation,
and Urological Oncology Specialists, Inc. (collectively the “Price entities”). In one issue, the
Regional Urology entities argue that the trial court erred by denying their special appearance
1
because they negated all bases for personal jurisdiction. We affirm in part and reverse and
remand in part.
BACKGROUND
From 2001 to 2007, the Price entities had contractual relationships with the Regional
Urology entities. On October 6, 2008, the Price entities filed suit against the Regional Urology
entities alleging that they were entitled to relief under theories of breach of contract, promissory
estoppel, tortious interference with both existing and prospective contracts, invasion of privacy,
and business disparagement. Although each of the Regional Urology entities are Louisiana
corporations, the Price entities brought suit in Texas. Thereafter, the Regional Urology entities
filed a special appearance claiming that Texas courts lacked jurisdiction over them.
The record reflects that Regional Urology, L.L.C. had multiple contacts with Texas. It
advertised in Texas by billboard, television, newspaper, the “Yellow Pages,” and horse show
publication advertisements. Regional Urology, L.L.C. also maintained an office in Marshall,
Texas,1 and contracted with Marshall Health Services, Inc., which operated the office for it. The
record further indicates that Regional Urology, L.L.C. maintained a telephone listing in both the
Carthage and Marshall, Texas telephone directories. Finally, the record reflects that Regional
Urology, L.L.C. derived a portion of its income from Texas residents.2
The remaining Regional Urology entities do not have as many contacts with Texas.
These entities do not advertise, maintain offices, or contract in Texas. Nonetheless, the record
indicates that a portion of their respective incomes was derived from Texas residents.3
The trial court conducted a hearing on the Regional Urology entities‟ special appearance
on April 17, 2009. Following the hearing, the trial court determined that Texas had general
jurisdiction over all of the Regional Urology entities and denied their special appearance. This
accelerated appeal followed.
1
The record is unclear concerning the exact length of time that the Marshall office was open. The Regional
Urology entities claimed that Regional Urology, L.L.C. maintained a Marshall office for some unidentified period of
time until December 2003 and again from July 2007 until March 2008. The Price entities claimed that Regional
Urology, L.L.C. operated an office in Marshall sporadically between 2002 and 2009.
2
Patients with Texas zip codes accounted for 7.4% of the charges for the Regional Urology entities. These
numbers were not further allocated among the different Regional Urology entities.
3
See n.2.
2
PERSONAL JURISDICTION
In their sole issue, the Regional Urology entities argue that the trial court erred in denying
their special appearance because they negated all bases of personal jurisdiction of Texas courts
over them.
Standard of Review
A nonresident defendant must negate all bases of personal jurisdiction to prevail in a
special appearance. CSR v. Link, 925 S.W.2d 591, 596 (Tex. 1996). The question of whether a
trial court can assume personal jurisdiction over a nonresident defendant is a question of law that
we will review de novo. See BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794
(Tex. 2002); W. Gessmann, GmbH v. Stephens, 51 S.W.3d 329, 334 (Tex. App.–Tyler 2001, no
pet.). We review the trial court‟s resolution of any underlying factual questions for factual
sufficiency of the evidence and will affirm the trial court's order on any legal theory that finds
support in the evidence. See Guardian Royal Exch. Assurance Ltd. v. English China Clays,
P.L.C., 815 S.W.2d 223, 226 (Tex. 1991). When, as here, the trial court does not make any
findings of fact or conclusions of law, any questions of fact must be presumed and found in
support of the judgment. See Zac Smith & Co. v. Otis Elevator Co., 734 S.W.2d 662, 666 (Tex.
1987).
In reviewing the evidence, we consider and weigh all of the evidence, both the evidence
that tends to prove the existence of a vital fact as well as evidence that tends to disprove its
existence. Stephens, 51 S.W.3d at 335 (citing Ames v. Ames, 776 S.W.2d 154, 158–59 (Tex.
1989)). This court is not a fact finder and may not pass on the credibility of the witnesses or
substitute its judgment for that of the trier of fact, even if a different conclusion could be reached
on the evidence. See Herbert v. Herbert, 754 S.W.2d 141, 144 (Tex. 1988); Clancy v. Zale
Corp., 705 S.W.2d 820, 826 (Tex. App.–Dallas 1986, writ ref=d n.r.e.). If evidence supports the
implied findings of fact, we will uphold the trial court's judgment on any legal theory supported
by the findings. See Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990). Ultimately, we
must affirm unless we decide, based on all of the evidence in the record and facts presumed
resolved in support of the trial court‟s ruling, that the Regional Urology entities negated all bases
of personal jurisdiction. See Link, 925 S.W.2d at 596; Guardian Royal Exch., 815 S.W.2d at
226; Otis Elevator Co., 734 S.W.2d at 662.
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Bases of Personal Jurisdiction
A court may assert 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. See U.S. CONST. amend. XIV, § 1;
TEX. CIV. PRAC. & REM. CODE ANN. §§ 17.041–.042 (Vernon 2008); Hall v. Helicopteros
Nacionales De Colombia, S.A., 638 S.W.2d 870, 872 (Tex. 1982), rev’d on other grounds, 466
U.S. 408, 413–14, 104 S. Ct. 1868, 1871–72, 80 L. Ed. 2d 404 (1984). The Texas long arm
statute has been interpreted to be coextensive with the due process limits of the United States
Constitution. See Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990); Hall, 638 S.W.2d
at 872. Thus, if the exercise of personal jurisdiction satisfies the Due Process Clause of the
United States Constitution, then the Texas long arm statute is satisfied. See Link, 925 S.W.2d at
594; Guardian Royal Exch., 815 S.W.2d at 226.
Under the Due Process Clause, a defendant must have certain minimum contacts with the
forum “such that the maintenance of the suit does not offend „traditional notions of fair play and
substantial justice.‟” See Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158,
90 L. Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 343, 85 L. Ed.
278 (1940)). A nonresident defendant that has purposefully availed itself of the privileges and
benefits of conducting business in the foreign jurisdiction has sufficient contacts with the forum
to confer personal jurisdiction. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76, 105
S. Ct. 2174, 2183–84, 85 L. Ed. 2d 528 (1985). A defendant should not be subject to the
jurisdiction of a foreign court based upon “random,” “fortuitous,” or “attenuated” contacts. Id.
Furthermore, the trial court‟s exercise of personal jurisdiction is proper only to the extent
that, as to the nonresident defendant, it does not offend traditional notions of fair play and
substantial justice. See Burger King, 471 U.S. at 476, 105 S. Ct. at 2184; Guardian Royal
Exch., 815 S.W.2d at 228. In determining whether the trial court‟s assertion of personal
jurisdiction comports with fair play and substantial justice, we consider the following factors:
(1) the burden on Regional Urology, L.L.C.; (2) the interest of Texas in adjudicating the dispute;
(3) the Price entities‟ 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 policies. See Guardian
Royal Exch., 815 S.W.2d at 228. Only in rare instances will the exercise of personal jurisdiction
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not comport with fair play and substantial justice once the minimum contacts analysis has been
satisfied. Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 341 (Tex. 2009).
General versus Specific Jurisdiction
A trial court can obtain personal jurisdiction over a defendant either by a finding of
general or specific jurisdiction. See Link, 925 S.W.2d at 595. General jurisdiction is “personal
jurisdiction over a defendant in a suit not arising out of or related to the defendant‟s contacts
with the forum.” PHC-Minden L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 166 (Tex. 2007)
(quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, n.9, 104 S. Ct.
1868, 1872 n.9, 80 L. Ed. 2d 404 (1984)). General jurisdiction requires that a defendant's
contacts be continuous and systematic. See Link, 925 S.W.2d at 595 (citing Schlobohm, 784
S.W.2d at 357)). Furthermore, general jurisdiction requires a showing that the defendant
conducted substantial activities within the forum, a more demanding minimum contacts analysis
than for specific jurisdiction. See Guardian Royal Exch., 815 S.W.2d at 228. Usually, the
defendant must be engaged in longstanding business in the forum state, “such as marketing or
shipping products, or the performance of services or maintenance of one or more offices in the
forum state; activities that are less extensive than that will not qualify for general in personam
jurisdiction.” See PHC-Minden, 235 S.W.3d at 168 (quoting 4 WRIGHT & M ILLER, FEDERAL
PRACTICE & PROCEDURE § 1067.5). The analysis must be dispute blind because, for general
jurisdiction to be properly exercised, the defendant must be subject to Texas courts for any
dispute, even those wholly unrelated to the state. PHC-Minden, 235 S.W.3d at 168. These
contacts should be assessed over a reasonable number of years up to the date that the suit is filed.
Id. at 170.
When a cause of action relates to the defendant‟s contact with the forum, the “minimum
contacts” requirement is satisfied, and “specific jurisdiction is proper, so long as that contact
resulted from the defendant's purposeful conduct and not the unilateral activity of the plaintiff.”
See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297–98, 100 S. Ct. 559, 567–68,
62 L. Ed. 2d 490 (1980); see also Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir.
1987). There must be a substantial connection between the defendant and the forum state
necessary for a finding of minimum contacts, which must come about by an action of the
defendant purposefully directed toward the forum state. See CMMC v. Salinas, 929 S.W.2d 435,
438 (Tex. 1996). We direct our analysis to the relationship among the defendant, the forum, and
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the litigation. Guardian Royal Exch., 815 S.W.2d at 228. Additional conduct of the defendant
may indicate an intent or purpose to serve the market in the forum state; for example, advertising
in the forum state or establishing channels for providing regular advice to customers in the forum
state. See Salinas, 929 S.W.2d at 438.
General Jurisdiction-Regional Urology, L.L.C.
During July 2007 to March 2008, the record reflects that Regional Urology, L.L.C.
maintained an office in Marshall, Texas. Regional Urology, L.L.C. argues that this was a
temporary office. We disagree with this assessment. While the evidence indicates that the office
was open only one day per week, Regional Urology, L.L.C.‟s presence in Texas was continuous
during that time. The evidence indicates that the office had Regional Urology‟s sign on it at all
times. Moreover, Regional Urology was listed in the telephone directories for two Texas cities
and was conducting advertising. In sum, the record supports that Regional Urology, L.L.C. was
attempting to establish a business presence in Texas. While Regional Urology, L.L.C.‟s attempt
to have a Marshall office ultimately was unsuccessful, such failure does not attenuate the nature
of the contact. Under these facts, we agree with the trial court that Regional Urology, L.L.C. had
sufficient continuous and systematic contacts with Texas so as to permit Texas courts to exercise
general jurisdiction over it.
We next consider whether the trial court‟s exercise of personal jurisdiction over Regional
Urology, L.L.C. offends traditional notions of fair play and substantial justice. See Burger King,
471 U.S. at 476, 105 S. Ct. at 2184; Guardian Royal Exch., 815 S.W.2d at 228. Here, the
burden imposed on Regional Urology, L.L.C. in litigating the case in Texas is slight. Gregg
County, Texas, where the suit was filed, is little more than a one hour drive from Regional
Urology, L.L.C.‟s main office. Further, because Price is a Texas resident and the dispute
involves claims related to the taking of Texas patients, Texas has an interest in the dispute. Of
course, we note that Louisiana also has an interest in the litigation. Indeed, additional litigation
among the parties is pending in Louisiana, a factor the Regional Urology entities argue weighs
against the Price entities‟ assertion of jurisdiction. We agree that some factors weigh against a
Texas court‟s asserting jurisdiction over Regional Urology L.L.C. But having considered all of
the factors, we conclude that the instant case is not one of the rare instances where the exercise
of jurisdiction does not comport with fair play and substantial justice. As such, we hold that the
6
trial court properly overruled the Regional Urology entities‟ special appearance with regard to
Regional Urology, L.L.C.
General Jurisdiction-Remaining Regional Urology Entities
With regard to the remaining Regional Urology entities, there are no continuous and
systematic contacts with Texas. The affidavit of Brent L. Bodily set forth that Regional Urology,
L.L.C. alone maintained the Marshall office. While certain responses to discovery identified
Regional Urology, rather than Regional Urology, L.L.C., as the entity operating the Marshall
office, we decline to conclude that such responses establish that the remaining Regional Urology
entities were involved in the operation of that office. Significantly, in these discovery responses,
the Regional Urology entities expressly stated that they would refer to themselves collectively as
“„the Regional Urology entities‟ unless otherwise specified.” In the responses, however, the
Regional Urology entities did not refer to themselves collectively. Thus, we conclude that the
discovery responses in question were not evidence supporting that the remaining Regional
Urology entities had contacts with Texas.
Further, Regional Urology, L.L.C.‟s contacts cannot be imputed to the other Regional
Urology entities. Id. at 173 (Texas law presumes that two separate corporations are distinct
entities.). Therefore, we hold that the trial court erred in finding that it had general jurisdiction
over Regional Urology Ambulatory Surgery Center, L.L.C., Regional Urology Property Group,
L.L.C., Regional Urology Oncology and Radiation Treatment Center, L.L.C., and Regional
Urology Oncology and Radiation Group, L.L.C.
Specific Jurisdiction-Remaining Regional Urology Entities4
The Price entities further argue that specific jurisdiction exists over the Regional Urology
entities because Regional Urology, L.L.C. maintained an office in Marshall and because Gerald
Henry, M.D. and Thomas Palmer, M.D. sought to solicit, by written correspondence (the
“solicitation letter”), at least one Texas patient of Dr. Price. As set forth above, the existence of
the Marshall office demonstrates contacts that Regional Urology, L.L.C. maintained with Texas.
However, Regional Urology, L.L.C.‟s contacts are not imputed to the other Regional Urology
entities. See PHC-Minden, 235 S.W.3d at 173.
4
Because we have concluded that the trial court had general jurisdiction over Regional Urology, L.L.C., we
need not include it in our analysis of whether the trial court had specific jurisdiction over the remaining Regional
Urology entities. See T EX. R. APP. P. 47.1.
7
Moreover, the solicitation letter was written by a doctor who arguably had some
connection to a Regional Urology entity. But there is nothing in the record to impute the
existence of the Texas contact, if any, derived from this letter to any of the remaining Regional
Urology entities. The letter does not contain the letterhead of any of the remaining Regional
Urology entities. Moreover, the doctors do not identify themselves as members or officers of
any of the remaining Regional Urology entities. See Coleman v. Klockner & Co. AG, 180
S.W.3d 577, 588 (Tex. App.–Houston [14th Dist.] 2005, no pet.) (actions of independent
contractor, by themselves, not sufficient to subject nonresident corporation to jurisdiction of
forum state) (citing O’Quinn v. World Indus. Constructors, Inc., 874 F. Supp. 143, 145 (E.D.
Tex.), aff’d, 68 F.3d 471 (5th Cir. 1995)). Thus, we conclude that specific jurisdiction does not
exist over Regional Urology Ambulatory Surgery Center, L.L.C., Regional Urology Property
Group, L.L.C., Regional Urology Oncology and Radiation Treatment Center, L.L.C., and
Regional Urology Oncology and Radiation Group, L.L.C. Consequently, we hold that the trial
court improperly overruled the Regional Urology entities‟ special appearance with regard to
these remaining entities.
CONCLUSION
We have held that the trial court properly overruled the Regional Urology entities‟
special appearance with regard to Regional Urology, L.L.C. We have further held that the trial
court erred in overruling the Regional Urology entities‟ special appearance with regard to
Regional Urology Ambulatory Surgery Center, L.L.C., Regional Urology Property Group,
L.L.C., Regional Urology Oncology and Radiation Treatment Center, L.L.C., and Regional
Urology Oncology and Radiation Group, L.L.C. As such, we have sustained the Regional
Urology entities‟ sole issue in part and overruled it in part. Having done so, we reverse the trial
court‟s order denying the Regional Urology entities‟ special appearance with regard to Regional
Urology Ambulatory Surgery Center, L.L.C., Regional Urology Property Group, L.L.C.,
Regional Urology Oncology and Radiation Treatment Center, L.L.C., and Regional Urology
Oncology and Radiation Group, L.L.C. and remand the case with instructions that the trial court
dismiss the Price entities‟ causes of action against these entities for want of jurisdiction. We
affirm the remainder of the trial court‟s order denying the Regional Urology entities‟ special
appearance.
8
BRIAN HOYLE
Justice
Opinion delivered February 26, 2010.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.
(PUBLISH)
9