CMC Steel Fabricators, Inc D/B/A CMC Construction Services v. Red Bay Constructors, Inc. ( 2014 )

Reversed and Remanded and Memorandum Opinion filed March 11, 2014.
In The
Fourteenth Court of Appeals
NO. 14-13-00084-CV
CMC STEEL FABRICATORS, INC D/B/A CMC CONSTRUCTION
SERVICES, Appellant
V.
RED BAY CONSTRUCTORS, INC., Appellee
On Appeal from the County Civil Court at Law No. 3
Harris County, Texas
Trial Court Cause No. 1014960
MEMORANDUM OPINION
CMC Steel Fabricators, Inc. brought a suit on a sworn account against Red
Bay Constructors, Inc. Red Bay filed a special appearance, and the trial court
granted it and dismissed the suit for lack of personal jurisdiction. CMC appealed,
contending that Red Bay made a general appearance by failing to properly verify
its special appearance and thereafter filing a motion for continuance. CMC also
contends that the evidence is legally insufficient to support the trial court’s order
because Red Bay’s first set of affidavits were not based on personal knowledge,
and Red Bay’s supplemental affidavits were untimely and not before the trial court.
We agree with CMC’s legal sufficiency point, reverse the trial court’s order,
and remand for further proceedings.
I. PROCEDURAL BACKGROUND
CMC brought a suit on a sworn account against Red Bay for an unpaid
account of $35,057.52. CMC alleged in its petition that Red Bay was “a foreign
corporation that does not maintain a registered agent for service of process in the
state of Texas,” and acknowledged that Red Bay’s address was in South Carolina.
CMC also alleged, however, that “a substantial part of the acts or events or
obligations of the parties were to be performed in Harris County, Texas,” and that
Red Bay “contractually agreed that all obligations under its course of dealing with
CMC were to be performed in Harris County, Texas.”
On July 10, 2012, Red Bay filed a special appearance and, subject thereto,
original answer, contending Red Bay did not have sufficient minimum contacts
with Texas for personal jurisdiction. Red Bay attached (1) printouts from the
South Carolina Secretary of State website for Red Bay and CMC; (2) an affidavit
signed by Red Bay’s attorney, James Evans; (3) a verification signed by Eric
Labarca; and (4) an affidavit signed by Eric Labarca.1
On November 13, 2012, CMC filed a response to Red Bay’s special
appearance and filed written objections to all of Red Bay’s evidence. In particular,
CMC objected to the affidavits and verification because they were not based on
personal knowledge as required by Rule 120a(3) of the Texas Rules of Civil
Procedure.
1
Labarca’s affidavit testimony appears in the appendix to this opinion.
2
On November 26, 2012, Red Bay filed a supplemental special appearance
and attached (1) printouts from the South Carolina Secretary of State website; (2)
an affidavit signed by Evans; (3) a verification that was unsigned; and (4) an
affidavit for Labarca that was unsigned. 2 On the same day, Red Bay noticed a
hearing for its special appearance on December 3, the date of trial, and Red Bay
filed a motion to continue and issue a new docket control order. On November 27,
2012, Red Bay filed a supplemental affidavit signed by Evans, a supplemental
verification signed by Labarca, and a supplemental affidavit signed by Labarca.
Six days later, on December 3, the trial court held a hearing on Red Bay’s
special appearance. CMC’s counsel complained that Red Bay’s “initial affidavits
that they filed were not based on personal knowledge.” CMC’s counsel also
objected to Red Bay’s supplemental affidavits filed six days before the hearing
because Rule 120a required Red Bay to serve its affidavits seven days before the
hearing. CMC’s counsel asked the trial court to rule on his objections, but the
court said it would rule on them at a later time. 3
On January 8, 2013, the trial court signed an order granting Red Bay’s
special appearance and dismissing the case for lack of personal jurisdiction. On
January 31, CMC filed a motion for rulings on its objections, and the trial court
held a hearing on February 19. At the hearing, CMC’s counsel asked the court to
rule on the written objections and the oral objection regarding the timeliness of
Red Bay’s supplemental affidavits. The trial court said it would not be ruling on
2
The supplemental special appearance includes a certificate of service dated November
26.
3
CMC’s counsel said that he agreed to Red Bay’s continuance, and the trial court granted
it.
3
the objections at the time. On March 12, CMC filed a written objection to the trial
court’s refusal to rule on objections.4
CMC appealed, contending that (1) Red Bay made a general appearance
rather than a special appearance due to defects in its verification and the filing of a
request for a continuance; and (2) there is legally insufficient evidence to support
the trial court’s ruling. CMC’s second issue is dispositive, and we address it
below.
II. SUFFICIENCY OF THE EVIDENCE
CMC contends the evidence is insufficient to support the trial court’s order
granting the special appearance because (1) Red Bay’s initial affidavits were not
based on personal knowledge and (2) Red Bay’s supplemental affidavits were
untimely. Red Bay contends that regardless of whether any of its evidence was
sufficient to support the trial court’s order, the trial court correctly granted the
special appearance because CMC failed to adequately plead jurisdictional facts.
Red Bay also contends that the trial court may consider its supplemental affidavits
even though they were filed less than seven days before the hearing. Finally, Red
Bay contends that CMC waived its specific complaints about Red Bay’s initial
affidavits not being based on personal knowledge, but regardless, Red Bay’s initial
affidavits were based on personal knowledge.
First, we will address whether CMC met its burden to plead jurisdictional
facts. Then, we must determine what evidence was properly before the trial court
and thus should be included in the sufficiency review. In this task, we will address
whether Red Bay’s supplemental affidavits were properly before the trial court.
4
Meanwhile, CMC also filed a request for findings of fact and conclusions of law and a
notice of past due findings of fact and conclusions of law. The trial court ultimately signed
findings and conclusions as follows: “The Court finds it had no personal jurisdiction over the
defendant and thus, granted the Special Appearance.”
4
Next, we will address Red Bay’s contention that CMC waived its argument
concerning the initial affidavits’ failure to demonstrate personal knowledge; and
we will address the admissibility of those affidavits.
After determining what evidence was properly before the trial court, we will
address whether the evidence is sufficient to support the trial court’s order.
A. CMC met its burden to plead jurisdictional facts.
CMC had the initial burden of pleading sufficient allegations to bring Red
Bay, a nonresident defendant, within the reach of Texas’s long-arm statute. See
Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010). Red Bay
now attempts to show that even if CMC’s alleged facts are true, the allegations are
insufficient to establish jurisdiction. See id. at 659. Because this issue presents a
question of law, we review it de novo. See id. at 657.
“The Texas long-arm statute authorizes the exercise of jurisdiction over a
nonresident defendant who does business in Texas.” Perna v. Hogan, 162 S.W.3d
648, 652 (Tex. App.—Houston [14th Dist.] 2005, no pet). The statute provides
that “a nonresident does business in this state if the nonresident . . . contracts by
mail or otherwise with a Texas resident and either party is to perform the contract
in whole or in part in this state.” Tex. Civ. Prac. & Rem. Code Ann. § 17.042.
Thus, we have noted that a contract’s “place of performance is an important
consideration” for determining whether personal jurisdiction is satisfied. Citrin
Holdings, LLC v. Minnis, 305 S.W.3d 269, 281 (Tex. App.—Houston [14th Dist.]
2009, no pet.) (“A contract calling for performance in Texas can support personal
jurisdiction in appropriate circumstances.”).
In its petition, CMC alleged that “all or a substantial part of the acts or
events or obligations of the parties were to be performed in Harris County, Texas.”
Further, CMC alleged that Red Bay “contractually agreed that all obligations under
5
its course of dealing with CMC were to be performed in Harris County, Texas.”
These allegations are sufficient to bring Red Bay within the reach of Texas’s long-
arm statute. See Info. Servs. Group Inc. v. Rawlinson, 302 S.W.3d 392, 399 n.4
(Tex. App.—Houston [14th Dist.] 2009, pet. denied) (liberally construing the
pleadings, holding that although the defendant lacked minimum contacts with
Texas, the plaintiffs satisfied their initial pleading burden by alleging that the
defendant entered into a contract with Texas companies calling for performance in
part in Texas, engaged in significant activities in or related to Texas, and
conducted business in Texas); Huynh v. Nguyen, 180 S.W.3d 608, 619 (Tex.
App.—Houston [14th Dist.] 2005, no pet.) (“This minimal pleading requirement is
satisfied by an allegation that the nonresident defendants are doing business in
Texas.”).
Red Bay cites McKanna v. Edgar, 388 S.W.2d 927 (Tex. 1965), for the
proposition that “a ‘legitimate inference’ can by drawn that [Red Bay] does not do
business in Texas if it doesn’t maintain a designated agent for service.” In
McKanna, however, the Texas Supreme Court rejected the court of appeals’
inference that the defendant did not maintain a place of regular business in Texas
or designate an agent for service in Texas by the mere allegation that service could
be made on the Secretary of State of Texas. See id. at 929–30. In fact, the court
found the plaintiff’s allegation sufficient to satisfy the Texas long-arm statute for
“doing business” in Texas because the plaintiff alleged that the defendant executed
and delivered a “note payable to the order of plaintiff at 1210 Perry-Brooks
Building, Austin, Texas.” Id. at 929. The parties had even stipulated that the
defendant was doing business in Texas, so that issue was not before the court. Id.
McKanna is inapplicable.
6
Because CMC met its pleading burden, the burden shifted to Red Bay to
negate all bases of personal jurisdiction alleged by CMC. See Kelly, 301 S.W.3d at
658. Red Bay needed to negate jurisdiction by presenting evidence that it did not
have sufficient contacts with Texas for personal jurisdiction, effectively disproving
CMC’s allegations. See id. at 659. CMC contends that Red Bay failed to negate
jurisdiction because all of Red Bay’s evidence was either (1) untimely and
therefore not properly before the trial court, or (2) not based on personal
knowledge and therefore inadmissible. We will address each contention in turn.
B. Red Bay’s supplemental affidavits were not before the trial court.
The Texas Rule of Civil Procedure governing special appearances requires
that any affidavits filed by the parties “shall be served at least seven days before
the hearing.” Tex. R. Civ. P. 120a(3). We have previously held that a movant’s
affidavits filed in noncompliance with this deadline are “not properly before the
trial court and should not be considered.” Tempest Broad. Corp. v. Imlay, 150
S.W.3d 861, 870 (Tex. App.—Houston [14th Dist.] 2004, no pet.); see also Said v.
Maria Invs., Inc., No. 01-08-00962-CV, 2010 WL 457463, at *3–4 (Tex. App.—
Houston [1st Dist.] Feb. 11, 2010, pet. denied) (mem. op.) (trial court erred by
considering late-served affidavits in support of the special appearance).
Red Bay concedes that its signed supplemental affidavits were not served
until six days before the hearing on its special appearance. Red Bay contends,
however, that the trial court had discretion to consider the supplemental affidavits,
and we should presume the trial court allowed the late filing. We rejected this
argument in Imlay. See 150 S.W.3d at 870. Although the trial court has discretion
to allow the opposing party to file late affidavits upon showing that he cannot
present facts essential to justify his opposition, the rule does not address the
movant’s tardy affidavits. See id. (citing Potkovick v. Reg’l Ventures, Inc., 904
7
S.W.2d 846, 850 (Tex. App.—Eastland 1995, no writ)); see also Said, 2010 WL
457463, at *3. 5 Red Bay’s authorities concerning a trial court’s discretion on the
timeliness issue are inapplicable. See S.P.A. Giacomini v. Lamping, 42 S.W.3d
265, 269–70 (Tex. App.—Corpus Christi 2001, no pet.) (movant was objecting to
the non-movant’s affidavits); Potkovick, 904 S.W.2d at 850 (same).
Red Bay contends that the right to amend a special appearance motion6
should apply to evidentiary affidavits, citing Dawson-Austin v. Austin, 968 S.W.2d
319 (Tex. 1998), wherein the Texas Supreme Court held that an unverified special
appearance could be cured by amendment with the filing of a verification at any
time before there is a general appearance. See id. at 322 (citing Tex. R. Civ. P.
120a(1)). Dawson-Austin involved the question of when a defendant waives his
special appearance; it did not involve defective affidavits filed as evidentiary
support of the special appearance under Rule 120a(3). See id. In reaffirming the
holding of Dawson-Austin, the Texas Supreme Court in Exito Electronics, Co. v.
Trejo, 142 S.W.3d 302 (Tex. 2004), held that a defective verification and affidavit
would not result in waiver of a defendant’s special appearance. Id. at 307–08. The
court of appeals had concluded that the affidavit failed to demonstrate the affiant’s
personal knowledge, among other defects, and thus did not comply with Rule
120a(3); and the court of appeals held that the filing of a special appearance with
no evidentiary support in compliance with Rule 120a(3) resulted in the defendant
waiving its special appearance. See Exito Elecs., Co. v. Trejo, 99 S.W.3d 360,
5
Rule 120a(3) states, “Should it appear from the affidavits of a party opposing the
motion that he cannot for reasons stated present by affidavit facts essential to justify his
opposition, the court may order a continuance to permit affidavits to be obtained or depositions
to be taken or discovery to be had or may make such other order as is just.” Tex. R. Civ. P.
120a(3).
6
See Tex. R. Civ. P. 120a(1) (“A special appearance . . . may be amended to cure
defects.”).
8
372–73 (Tex. App.—Corpus Christi 2003), rev’d, 142 S.W.3d 302 (Tex. 2004).
The Texas Supreme Court reversed, reasoning that such defects would not result in
a waiver, but rather, “[a]ny defect in proof goes to the merits.” 142 S.W.3d at 308.
Likewise, we now evaluate the propriety of considering Red Bay’s evidence as part
of our review of the merits of its special appearance; we do not hold that Red Bay
waived its special appearance by the mere fact that its supplemental affidavits were
untimely. Dawson-Austin does not stand for the proposition that a special
appearance may be amended with evidentiary affidavits less than seven days
before the hearing.
Finally, Red Bay contends that the supplemental affidavits should be
considered because CMC was not prejudiced by Red Bay’s tardy filing. Red Bay
notes that (1) Red Bay had served identical unsigned and unsworn affidavits on
CMC seven days before the hearing; (2) the supplemental affidavits were identical
to the original affidavits “except for the inclusion of the words ‘personal
knowledge’”; and (3) CMC did not ask for additional time to respond to Red Bay’s
supplemental affidavits or gather additional evidence. Notwithstanding Red Bay’s
failure to cite any authority suggesting that prejudice is an appropriate inquiry at
this stage of the proceedings, we note that unsigned and unsworn statements are
generally not considered evidence,7 and it was not CMC’s burden to ask for
additional time; rather, Red Bay could have “requested leave of court to re-open
the evidence in a subsequent hearing to add the tardy affidavit.” Imlay, 150
S.W.3d at 870.
Accordingly, consistent with the precedent of this court and other courts of
appeals, Red Bay’s untimely supplemental affidavits were not properly before the
7
See, e.g., Alaniz v. Rebello Food & Beverage, L.L.C., 165 S.W.3d 7, 14 n.12 (Tex.
App.—Houston [14th Dist.] 2005, no pet.).
9
trial court, and we will not consider them when reviewing the sufficiency of the
evidence to support the trial court’s order. See id.; Said, 2010 WL 457463, at *4;
see also Hale v. Richey, No. 10-11-00187-CV, 2012 WL 89920, at *8 (Tex.
App.—Waco Jan. 11, 2012, no pet.) (mem. op.) (holding that the defendant’s
“supplemental affidavit was untimely and, therefore, not properly before the trial
court and should not be considered”).
C. CMC preserved error regarding its objection to Red Bay’s original
affidavits not being made on personal knowledge.
Turning to Red Bay’s original affidavits, Red Bay contends that CMC’s
objections in the trial court regarding lack of personal knowledge were more
limited than CMC’s complaints on appeal, and Red Bay repeatedly notes that the
trial court never ruled on CMC’s objections. Red Bay also contends that CMC
failed to state “any basis for a lack of actual personal knowledge” by the affiants,
and that if Red Bay “had been put on notice as to CMC’s specific objections as to
the contents of the affidavits and verification at any time prior to [Red Bay’s]
Reply Brief, then Red Bay could have taken steps to appropriately amend the
affidavits.”
Thus, Red Bay appears to argue that CMC failed to preserve error. See, e.g.,
Wash. DC Party Shuttle, LLC v. IGuide Tours, 406 S.W.3d 723, 736 (Tex. App.—
Houston [14th Dist.] 2013, pet. filed) (en banc) (litigants must preserve complaints
about a special appearance affiant’s lack of personal knowledge by objecting and
obtaining a ruling from the trial court); Moran v. Mem’l Point Prop. Owners Ass’n,
Inc., 410 S.W.3d 397, 407 (Tex. App.—Houston [14th Dist.] 2013, no pet.)
(complaints on appeal must comport with objections raised in trial court to
preserve error); Zurita v. Lombana, 322 S.W.3d 463, 477 (Tex. App.—Houston
[14th Dist.] 2010, pet. denied) (issues not raised until a reply brief are waived).
10
Rule 33.1 of the Texas Rules of Appellate Procedure requires a litigant to preserve
error by making an objection that states the grounds for the ruling sought with
sufficient specificity to make the trial court aware of the complaint; and the trial
court must rule on the objection, or refuse to rule on the objection with the
complaining party objecting to the refusal. See Tex. R. App. P. 33.1.
First, we will review CMC’s conduct in the trial court. CMC filed written
objections to the affidavits before the special appearance hearing, complaining in
particular about Labarca’s affidavit: “CMC objects to the affidavit of Eric Labarca
attached to Red Bay’s special appearance because it does not state that the affidavit
is based on his personal knowledge nor does it state that the facts recited therein
are true and correct. Therefore, the affidavit is not based on personal knowledge as
required by Tex. R. Civ. P. 120a(3) which requires affidavits be made on personal
knowledge.” At the special appearance hearing, CMC’s counsel complained that
Red Bay’s “initial affidavits that they filed were not based on personal
knowledge.” CMC’s counsel asked the trial court to rule on the objections, and
when the court did not rule before granting the special appearance, CMC filed a
motion for rulings on its objections. When the trial court again refused to rule on
CMC’s objections, CMC filed a written objection to the trial court’s refusal to rule
on the written and oral objections.
We hold that CMC’s conduct in the trial court was adequate to preserve
error for appellate review. CMC made a specific objection and then objected to the
trial court’s failure to rule. Red Bay had the opportunity to correct any defects in
its evidence, and it attempted to do so, but failed because its supplemental
affidavits were untimely. Red Bay cites no authority on appeal suggesting that
CMC needed to be more specific in its objections, and we have found none.
11
We now turn to Red Bay’s allegation that CMC raised a new issue in its
appellate reply brief. In its opening brief on appeal, CMC argued that the evidence
is legally insufficient because Red Bay’s affidavits were “not based on personal
knowledge [and] are hearsay,” which “will not support a judgment or other final
order.” Then, when Red Bay made specific arguments in its response brief about
why Labarca’s initial affidavit demonstrated personal knowledge (despite the lack
of any statement in the affidavit that it was based on personal knowledge), CMC
made a more detailed argument in its reply brief concerning how a job title alone
did not demonstrate personal knowledge. Red Bay then filed a sur-reply brief,
which we considered, affording Red Bay the opportunity to respond to CMC’s
reply brief.
We conclude that CMC’s reply brief did not raise an additional issue and
merely addressed a matter raised in Red Bay’s brief. See Tex. R. App. 38.3 (“The
appellant may file a reply brief addressing any matter in the appellee’s brief.”).
Thus, CMC preserved error, and we will now address the merits of whether
Labarca’s initial affidavit was admissible.8
D. Labarca’s affidavit was inadmissible and should not be considered
when reviewing the sufficiency of the evidence.
We review a trial court’s evidentiary ruling for an abuse of discretion. See
Asshauer v. Farallon Capital Partners, L.P., 319 S.W.3d 1, 12 (Tex. App.—Dallas
2008, no pet.) (reviewing for an abuse of discretion whether a special appearance
affidavit was made on personal knowledge). Any affidavits filed as evidentiary
support for a special appearance “shall be made on personal knowledge.” Tex. R.
Civ. P. 120a(3). If such an affidavit is not made on personal knowledge, then it
8
We do not address the admissibility of Evans’s affidavit and its attachments of website
printouts because, as addressed below, it alone does not negate CMC’s jurisdictional allegations
or support the trial court’s order.
12
may not be considered in a sufficiency review. See Urban v. Barker, No. 14-06-
00387-CV, 2007 WL 665118, at *2–3, *7 (Tex. App.—Houston [14th Dist.] Mar.
6, 2007, no pet.) (mem. op.) (reversing trial court’s denial of the special
appearance after finding the plaintiff’s affidavit was not based on personal
knowledge and could not be considered). See generally City of Keller v. Wilson,
168 S.W.3d 802, 810 (Tex. 2005) (reciting the general rule that a “no evidence”
point must be sustained when the court is barred by rules of law or of evidence
from giving weight to the only evidence offered to prove a vital fact).
“For an affidavit to have probative value, an affiant must swear that the facts
presented in the affidavit reflect his personal knowledge.” In re E.I. DuPont de
Nemours & Co., 136 S.W.3d 218, 224 (Tex. 2004). “However, an affidavit does
not need to specifically state that it is made on personal knowledge if the
statements in the affidavit show the affiant was speaking from personal
knowledge.” Pipkin v. Kroger Tex., L.P., 383 S.W.3d 655, 669 (Tex. App.—
Houston [14th Dist.] 2012, pet. denied). An affiant’s statements concerning his or
her job title or responsibilities may demonstrate an affiant’s personal knowledge of
the facts alleged. Valenzuela v. State & Cnty. Mut. Fire Ins. Co., 317 S.W.3d 550,
553 (Tex. App.—Houston [14th Dist.] 2010, no pet.). But statements in the
affidavit require factual specificity, such as the place, time, and exact nature of the
alleged facts. Pipkin, 383 S.W.3d at 669. “A special appearance affidavit must be
‘direct, unmistakable, and unequivocal’ as to the facts sworn to, so that perjury can
be assigned upon it.” Urban, 2007 WL 665118, at *2 (quoting Int’l Turbine Serv.,
Inc. v. Lovitt, 881 S.W.2d 805, 808 (Tex. App.—Fort Worth 1994, writ denied)).
“The key is whether the affidavit clearly shows the affiant is testifying from
personal knowledge.” Pipkin, 383 S.W.3d at 669 (quotations omitted). “The
13
affidavit must ‘itself’ state the facts and demonstrate the affiant’s competency.”
Valenzuela, 317 S.W.3d at 553.
For example, this court held that an affidavit did not show it was based on
personal knowledge when the affiant stated his job title, but he “did not identify his
responsibilities or other basis for personal knowledge of the facts he assert[ed].”
Lawrence Marshall Dealerships v. Meltzer, No. 14-07-00920-CV, 2009 WL
136908, at *4 (Tex. App.—Houston [14th Dist.] Jan. 20, 2009, no pet.) (mem. op.).
In another decision of this court, the affiant said he had personal knowledge of the
facts stated in the affidavit and said he was a claims manager for the plaintiff.
Valenzuela, 317 S.W.3d at 554. However, this court held the affidavit was not
based on personal knowledge because the affidavit did not show whether the
affiant “was the claims manager during the relevant time period, how her job
duties as the claims manager afforded her the knowledge about [the defendant’s]
claim, or how she was familiar with this particular claim.” Id.
In another decision of this court refusing to consider an affidavit submitted
in response to a special appearance, the affiant had sued the defendant regarding a
stock transaction involving the affiant’s late husband. Urban, 2007 WL 665118, at
*2–3. Although the affiant said in her affidavit that she had personal knowledge of
the matters stated in the affidavit and that she was married to her late husband, the
affidavit “lack[ed] facts as to when they married, or even if she was married to [her
late husband] when the original transaction occurred.” Id. at *2 & n.2. Further,
this court found several of the affiant’s statement to not be direct, unmistakable, or
unequivocal because the affiant referred to events happening at unspecific times,
such as “October or November 2004” and “sometime in mid 2005.” Id. at *2.
Red Bay’s affidavit from Labarca contains no recital that it is based on
personal knowledge. Labarca states, “In or about 2002, I formed Red Bay
14
Constructors, Inc., a South Carolina corporation.” However, that statement is the
extent of Labarca’s testimony concerning his involvement with Red Bay, and it is
not direct, unmistakable, or unequivocal. See id. Labarca does not describe his job
title, responsibilities, or involvement with Red Bay. Labarca does not explain how
he obtained any knowledge of Red Bay’s dealings with CMC, or whether he was at
the company during the relevant time periods, or whether he was involved in the
transactions with CMC at all. The affidavit itself does not demonstrate Labarca’s
personal knowledge of Red Bay’s dealings with CMC.9
Red Bay contends, however, that Labarca’s personal knowledge is shown by
the notary’s statement appearing in the affidavit before Labarca’s testimony:
“Before me, the undersigned authority, appeared Eric Labarca, an executive
officer of Red Bay Constructors, Inc. . . .” (emphasis added). Red Bay cites no
authority for considering this statement from the notary—which is not actually part
of Labarca’s testimony—and we have found none. Therefore, we do not consider
it when determining if Labarca demonstrated personal knowledge in his affidavit.
Accordingly, the trial court would have abused its discretion in considering
Labarca’s affidavit, and we will not consider it when reviewing the sufficiency of
the evidence.
E. The evidence is legally insufficient to support the trial court’s finding of
a lack of personal jurisdiction.
On its special appearance, Red Bay had the burden to negate all bases of
personal jurisdiction asserted by CMC. See BMC Software Belgium, N.V. v.
9
We note further that the credit application or contract referenced by both parties does
not contain Labarca’s name. Nor is Labarca’s name found anywhere in CMC’s petition or Red
Bay’s special appearance, nor in the invoices CMC attached to its petition. There is simply no
way to determine from this record how Labarca would have had personal knowledge of whether
Red Bay was to perform or actually performed any of its obligations under a contract with CMC
in Texas, as alleged in CMC’s petition.
15
Marchand, 83 S.W.3d 789, 793 (Tex. 2002). CMC contends that Red Bay failed
to meet its burden and the evidence is legally insufficient to support the trial
court’s order. See id. at 794 (parties may challenge sufficiency of the evidence
supporting a trial court’s findings on a special appearance). As discussed above,
CMC claimed the trial court could exercise personal jurisdiction based on the
allegations that “a substantial part of the acts or events or obligations of the parties
were to be performed in Harris County, Texas,” and that Red Bay “contractually
agreed that all obligations under its course of dealing with CMC were to be
performed in Harris County, Texas.”
Without Labarca’s affidavit, there is no evidence to disprove CMC’s
allegations, and the trial court could not have found that Red Bay lacked minimum
contacts with Texas for a court in this state to assert personal jurisdiction.
Although Red Bay’s special appearance was verified, it is not evidence. See
Laidlaw Waste Sys. (Dall.), Inc. v. City of Wilmer, 904 S.W.2d 656, 660 (Tex.
1995) (“Generally, pleadings are not competent evidence, even if sworn or
verified.”); cf. White v. State, 871 S.W.2d 833, 836 (Tex. App.—Houston [14th
Dist.] 1994, no pet.) (“[A] motion, sworn or otherwise, is not evidence.”),
overruled on other grounds by Richards v. State, 150 S.W.3d 762 (Tex. App.—
Houston [14th Dist.] 2004, pet. ref’d). Even if Evans’s first supplemental affidavit
and the attachments from the South Carolina Secretary of State website were
admissible and served timely, 10 Evans’s affidavit merely served to authenticate two
website printouts showing that Red Bay and CMC had registered agents in South
Carolina. Evans’s affidavit and attachments did not disprove CMC’s allegations
10
We note that Evans’s first supplemental affidavit, was signed and attached to Red
Bay’s supplemental special appearance, and dated November 26 (along with an unsigned
affidavit and verification for Labarca). A certificate of service in the clerk’s record indicates
service was made on November 26, a day before Red Bay served Labarca’s signed affidavit.
16
concerning Red Bay’s contacts with Texas or establish that Red Bay lacked
minimum contacts with Texas.
Because Red Bay failed to disprove the alleged basis for jurisdiction, there is
legally insufficient evidence supporting the trial court’s order. CMC’s second
issue is sustained.
III. CONCLUSION
Having sustained CMC’s second issue, we reverse the trial court’s order and
remand for proceedings consistent with this opinion.
/s/ Sharon McCally
Justice
Panel consists of Justices McCally, Busby, and Donovan.
17
APPENDIX: LABARCA’S INITIAL AFFIDAVIT TESTIMONY
1. My name is Eric Labarca, and I am in all things competent to make
this affidavit.
2. In or about 2002, I formed Red Bay Constructors, Inc. (“Red Bay”), a
South Carolina corporation. From its inception, Red Bay did business with
CMC Steel Fabricators d/b/a CMC Construction Services (“CMC”) a foreign
corporation duly authorized to conduct business in South Carolina and
having a principal place of business in North Charleston, South Carolina.
Red Bay made purchases from CMC and rented equipment from CMC for
use in Red Bay’s construction business in South Carolina.
3. I have never been to Texas and Red Bay has never done any business
in Texas. Specifically, Red Bay has never done any business with CMC in
Texas.
4. Red Bay never established an office in Texas, nor did it solicit
business, directly or indirectly, in Texas. Red Bay never had any dealings
with CMC other than as set forth in this Affidavit and the Special
Appearance and General Denial above.
7. [sic] At all relevant times, CMC maintained an office and yard in
South Carolina and all business done with CMC by Red Bay was
accomplished through CMC’s South Carolina operation and location. In
fact, CMC is still listed with the South Carolina Secretary of State as a
corporation in good standing to conduct business in South Carolina.
8. All financial and other dealings between Red Bay and CMC
originated and were completed in South Carolina.
9. Due to the failure of CMC to provide adequate and timely equipment
to Red Bay as contracted and committed to, Red Bay is not indebted to CMC
in any amount.
10. Further, Affiant sayeth not.
18