sbg-development-services-lp-v-nurock-group-inc-individually-and-dba ( 2011 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-11-00008-CV
SBG DEVELOPMENT SERVICES, APPELLANT
L.P.
V.
NUROCK GROUP, INC. APPELLEES
INDIVIDUALLY AND D/B/A
NUROCK DEVELOPMENT, INC.;
NUROCK DEVELOPMENT GROUP,
INC. D/B/A NUROCK
DEVELOPMENT, INC.; NUROCK
DEVELOPMENT, LTD. D/B/A
NUROCK DEVELOPMENT, INC.;
NUROCK DEVELOPMENT TX, LLC
D/B/A NUROCK DEVELOPMENT,
INC.; AND ROBERT G. HOSKINS,
INDIVIDUALLY AND D/B/A
NUROCK DEVELOPMENT, INC.
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FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION1
1
See Tex. R. App. P. 47.4.
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I. INTRODUCTION
The primary issue we address in this interlocutory appeal is whether a
defendant who elects to have his motion to strike the plaintiff‘s pleadings and to
dismiss the plaintiff‘s claims against him heard prior to his special appearance
has thereby made a general appearance and waived his special appearance.
Because we answer this question in the affirmative, we will reverse the trial
court‘s order sustaining the special appearance filed by Appellee Robert G.
Hoskins.
II. FACTUAL AND PROCEDURAL BACKGROUND
Appellant SBG Development Services, L.P. sued NuRock Development
Group, Inc.; NuRock Development, Ltd.; NuRock Development TX, LLC; and
Robert C. Hoskins, individually, for breach of contract, quantum meruit, and
attorney‘s fees. In a single pleading, Hoskins filed a special appearance, and
subject thereto, the NuRock entities filed an original answer and special
exceptions. SBG subsequently amended its petition twice: SBG named each of
the NuRock entities as ―d/b/a NuRock Development, Inc.‖; sued Hoskins in his
individual capacity and d/b/a NuRock Development, Inc.; added NuRock Group,
Inc. to the suit; and added claims for fraud by nondisclosure, breach of fiduciary
duty, civil conspiracy, and alter ego and abuse of the corporate form. NuRock
Group, Inc. answered and filed a general denial. The named NuRock defendants
are referred to collectively herein as Appellees.
2
On August 13, 2010, the trial court conducted a hearing on Appellees‘
special exceptions and granted them. 2 SBG then filed its fourth amended
petition.
Appellees, including Hoskins, subsequently filed a combined motion to
strike SBG‘s pleadings and motion for sanctions.3 The motion to strike portion of
the pleading requested that the trial court ―strike and dismiss all causes of action
asserted by‖ SBG because SBG had allegedly failed to comply with the trial
court‘s special exceptions order. The motion to strike challenged SBG‘s
pleadings concerning every element of every cause of action SBG alleged,
including all causes of action alleged against Hoskins; the motion to strike was
2
The order granting Appellees‘ special exceptions states that the trial court
heard Appellees‘ special exceptions on August 13, 2010, and reset Appellees‘
special appearance.
3
Appellees‘ motion to strike and for sanctions begins by providing, ―NOW
COME Defendants . . . and Robert Hoskins (collectively, ‗Defendants‘) file their
Motion to Strike Plaintiff‘s Pleadings as to all causes of actions asserted against
the NuRock Entities and Mr. Hoskins.‖
The motion for sanctions portion of the pleading sought sanctions based
on Texas Rule of Civil Procedure 13 and under chapter 10 of the civil practice
and remedies code, alleging that ―SBG and its legal counsel filed the pleading
against NuRock Development Group, Inc., . . . and Mr. Hoskins in bad faith
and/or for the purpose of harassment.‖ The motion for sanctions also alleged
that ―it was necessary‖ for ―Mr. Hoskins to incur attorneys [sic] fees in preparing
this motion for sanctions‖ and sought an award of ―all reasonable attorneys [sic]
fees incurred‖ as well as ―[a] penalty to be paid into the court in the amount of at
least $10,000.00.‖
3
not limited in any way to an alleged failure to plead jurisdictional facts.4
Appellees did not file additional special exceptions challenging SBG‘s fourth
amended petition, which was filed after the trial court‘s special exceptions order.
4
The motion to strike moves to dismiss all of SBG‘s claims; it alleges in its
entirety:
A. With respect to causes of action for breach of contract
asserted by Plaintiff, Plaintiff was ordered to but failed to specifically
plead factual allegations in support of each of the following elements
as to Defendants NuRock Development Group, Inc., NuRock
Development, Ltd., NuRock Development TX, L.L.C., and Robert
Hoskins:
i. the existence of a valid, enforceable contract
between Plaintiff and such Defendant;
ii. that Plaintiff performed, tendered performance, or
was excused from performing its contractual
obligations under such contract;
iii. that such Defendant breached such contract and
the manner in which such Defendant breached it;
and
iv. the amount of and manner in which Plaintiff‘s [sic]
was injured by such Defendant‘s alleged breach
of such contract.
B. With respect to causes of action for quantum meruit
asserted by Plaintiff, Plaintiff was ordered to but failed to specifically
plead factual allegations in support of each of the following elements
as to Defendants NuRock Development Group, Inc., NuRock
Development, Ltd., NuRock Development TX, L.L.C., and Robert
Hoskins:
i. the specific valuable services or materials that
was [sic] provided by Plaintiff to such Defendant;
4
ii. that such Defendant accepted such services or
materials;
iii. that such Defendant had reasonable notice that
Plaintiff expected compensation for such services
or materials from that Defendant; and
iv. the amount or [sic] and manner in which such
Defendant benefited from the services or
materials provided by Plaintiff.
C. With respect to causes of action for fraud by
nondisclosure asserted by Plaintiff, Plaintiff was ordered to but failed
to specifically plead factual allegations in support of each of the
following elements as to Defendants NuRock Group, Inc., NuRock
Development Group, Inc., NuRock Development, Ltd., NuRock
Development TX, L.L.C., and Robert Hoskins:
i. all specific non-disclosed facts that were subject
to a duty to disclose and not disclosed by such
Defendant;
ii. the specific basis giving rise to a duty by such
Defendant to disclose such non-disclosed facts;
iii. the materiality of such non-disclosed facts;
iv. what specific action or non-action Plaintiff was
allegedly induced to take or refrain from taking by
the nondisclosure of such non-disclosed facts;
and
v. factual allegations specifically identifying each
and every specific injury suffered by Plaintiff as a
result of the nondisclosure of such non-disclosed
facts, including the amount of and the manner in
which Plaintiff was injured, and how such injury is
separate and apart from the damages it has
alleged are economic loses [sic] under the subject
consulting agreement.
5
D. With respect to causes of action for breach of fiduciary
duty asserted by Plaintiff, Plaintiff was ordered to but failed to
specifically plead factual allegations in support of each of the
following elements as to Defendants NuRock Group, Inc., NuRock
Development Group, Inc., NuRock Development, Ltd., NuRock
Development TX, L.L.C., and Robert Hoskins:
i. factual allegations to establish a confidential
relationship between Plaintiff and such
Defendant;
ii. the specific duty owed by such Defendant to
Plaintiff that was breached and the manner in
which such Defendant breached such duty; and
iii. factual allegations specifically identifying each
and every specific injury suffered by Plaintiff as a
result of such breach of fiduciary duty, including
the amount of and the manner in which Plaintiff
was injured, and how such injury is separate and
apart from the damages it has alleged are
economic loses [sic] under the subject consulting
agreement.
E. With respect to causes of action for civil conspiracy
asserted by Plaintiff, Plaintiff was ordered to but failed to specifically
plead factual allegations in support of each of the following elements
as to Defendants NuRock Group, Inc., NuRock Development Group,
Inc., NuRock Development, Ltd., NuRock Development TX, L.L.C.,
and Robert Hoskins:
i. factual allegations specifically identifying which
two or more persons were part of the alleged
conspiracy;
ii. factual allegations specifically identifying the
objective or course of action that was agreed to
be accomplished by such persons and that each
such person agreed to such objective or course of
action;
6
iii. factual allegations specifically identifying each
unlawful, overt acts [sic] that were agreed upon
and committed by such persons; and
iv. factual allegations specifically identifying each
and every specific injury suffered by Plaintiff as a
result of such unlawful, overt acts, including the
amount of and manner in which Plaintiff was
injured, and how much injury is separate and
apart from the damages it has alleged are
economic loses [sic] under the subject consulting
agreement.
F. With respect to causes of action for alter ego and abuse
of corporate form asserted by Plaintiff against Defendant Robert
Hoskins, Plaintiff was ordered to but failed to specifically plead
factual allegations in support of each of the following elements as to
Robert Hoskins and each applicable Defendant:
i. factual allegations specifically identifying how
Robert Hoskins used such Defendant-entity for
the purpose of perpetrating a fraud on Plaintiff;
ii. factual allegations specifically identifying the
actual fraud committed on Plaintiff by use of such
Defendant-entity and factual allegations to
support each requisite element of such cause of
action for actual fraud;
iii. factual allegations specifically identifying how
Robert Hoskins directly personally benefited from
the actual fraud committed by him on Plaintiff by
use of such Defendant-entity; and
iv. factual allegations specifically identifying each
and every specific injury suffered by Plaintiff as a
result of such actual fraud, including the amount
of and the manner in which Plaintiff was injured,
and how such injury is separate and apart from
the damages it has alleged are economic loses
[sic] under the subject consulting agreement.
7
At a December 9, 2010 hearing, counsel for Appellees indicated that he
wanted the motion to strike to be heard first, prior to the special appearance or
the motion for sanctions. He stated, ―Well, I think I want to start with the motion
to strike the pleadings. It‘s a continuation of the special exceptions that were
granted . . . back on August 13th.‖ A few moments later, Appellees‘ counsel
clarified, ―My intent is to address those motions, then hit the special appearance,
and then hit the motion for sanctions, Your Honor.‖
After the hearing, the trial court signed an order striking ―all causes of
action asserted by Plaintiff against [all Appellees except NuRock Group, Inc.],
specifically including all causes of action for breach of contract, quantum meruit‖
and ―[against all Appellees for] fraudulent inducement, fraud, fraud by
nondisclosure, breach of fiduciary duty, negligent misrepresentation and civil
conspiracy.‖ The order also indicated that the trial court sustained Hoskins‘s
special appearance and that Appellees‘ motion for sanctions would be carried to
the end of the case.
III. WAIVER OF SPECIAL APPEARANCE
In its first issue, SBG argues that the trial court erred by sustaining
Hoskins‘s special appearance because Hoskins waived his special appearance
by seeking affirmative relief via the motion to strike.
8
A. Law Concerning Waiver of Special Appearance
Via a General Appearance
Under rule 120a, a special appearance, properly entered, enables a
nonresident defendant to challenge personal jurisdiction in a Texas court. Tex.
R. Civ. P. 120a. Strict compliance with rule 120a is required, and a nonresident
defendant will be subject to personal jurisdiction in Texas courts if the defendant
enters a general appearance. Morris v. Morris, 894 S.W.2d 859, 862 (Tex.
App.—Fort Worth 1995, no writ); see also Burger King Corp. v. Rudzewicz, 471
U.S. 462, 472 n.14, 105 S. Ct. 2174, 2182 (1985) (―[T]he personal jurisdiction
requirement is a waivable right.‖). Rule 120a states that ―[e]very appearance,
prior to judgment, not in compliance with this rule is a general appearance.‖ Tex.
R. Civ. P. 120a(1); see also Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199,
201 (Tex. 1985).
A party enters a general appearance and waives a special appearance
―when it (1) invokes the judgment of the court on any question other than the
court‘s jurisdiction, (2) recognizes by its acts that an action is properly pending,
or (3) seeks affirmative action from the court.‖ Exito Elecs. Co. v. Trejo, 142
S.W.3d 302, 304 (Tex. 2004) (citing Dawson-Austin v. Austin, 968 S.W.2d 319,
322 (Tex. 1998), cert. denied, 525 U.S. 1067 (1999)). The test for a general
appearance is whether a party requests affirmative relief inconsistent with an
assertion that the trial court lacks jurisdiction. Dawson-Austin, 968 S.W.2d at
323.
9
A party also enters a general appearance when it violates rule 120a‘s
―due-order-of-hearing‖ requirement. See Tex. R. Civ. P. 120a(2); Trejo, 142
S.W.3d at 306. The due-order-of-hearing requirement mandates that a special
appearance motion ―shall be heard and determined before a motion to transfer
venue or any other plea or pleading may be heard.‖ Tex. R. Civ. P. 120a(2);
Trejo, 142 S.W.3d at 306. If a defendant‘s motion to transfer venue or other plea
or pleading is heard prior to the defendant‘s special appearance, the defendant
has waived his special appearance and entered a general appearance. See
Klingenschmitt v. Weinstein, 342 S.W.3d 131, 134 (Tex. App.––Dallas 2011, no
pet.) (holding party waived special appearance by filing and obtaining hearing on
motion to dismiss plaintiff‘s claims with prejudice based on defendant‘s special
exceptions prior to hearing on special appearance); Landry v. Daigrepont, 35
S.W.3d 265, 267–68 (Tex. App.––Corpus Christi 2000, no pet.) (holding
defendant who filed special appearance and motion for new trial following default
judgment entered against him waived special appearance by, at hearing, having
motion for new trial heard prior to special appearance).
B. Waiver of Special Appearance and
Entry of General Appearance by Hoskins
Appellees‘ motion to strike SBG‘s pleadings requested affirmative relief
from the trial court specifically on behalf of Hoskins; Appellees‘ motion to strike
SBG‘s pleadings stated that Appellees ―respectfully request the Court to strike
and dismiss all causes of action asserted by Plaintiff against Defendants NuRock
10
Development Group, Inc., NuRock Development, Ltd., NuRock Development TX,
L.L.C., and Robert Hoskins.‖ [Emphasis added.] The allegations in Appellees‘
motion to strike concerning SBG‘s causes of action against Hoskins are not
limited to allegations requesting that SBG plead additional jurisdictional facts
pertaining to Hoskins‘s contacts with Texas or the purported basis for the trial
court‘s in personam jurisdiction over him. A pleading asserting special
exceptions or asserting a motion to strike based on a failure to satisfy special
exceptions does not constitute a challenge to the trial court‘s jurisdiction. See,
e.g., Peek v. Equip. Serv. Co. of San Antonio, 779 S.W.2d 802, 805 (Tex. 1989)
(explaining that plaintiff‘s failure to plead an element of his cause of action does
not deprive the trial court of jurisdiction). Because Hoskins, via the motion to
strike, specifically requested and prayed for affirmative relief from the trial court
inconsistent with his position that the trial court possessed no personal
jurisdiction over him––that being an order or judgment dismissing all of SBG‘s
claims against him for reasons other than the trial court‘s purported lack of
jurisdiction over him—he waived his special appearance. See Exito Elecs. Co.,
142 S.W.3d at 304; Klingenschmitt, 342 S.W.3d at 134.
Additionally, by choosing to have his motion to strike heard prior to his
special appearance, Hoskins violated rule 120a‘s due-order-of-hearing
requirement. See Landry, 35 S.W.3d at 267–68.5 Strict compliance with rule
5
In Landry, counsel, like counsel here, elected on the record to have a
motion seeking affirmative relief (a motion for new trial) heard at the hearing prior
11
120a is required; every appearance not in compliance with rule 120a is a general
appearance. Tex. R. Civ. P. 120a(1). Because Hoskins violated rule 120a‘s
due-order-of-hearing requirement, he entered a general appearance and waived
his special appearance. See Landry, 35 S.W.3d at 267–68; accord First Oil PLC
v. APT Oil & Gas Corp., 264 S.W.3d 767, 773, 781 (Tex. App.—Houston [1st
Dist.] 2008, pet. denied) (holding special appearance was not waived by filing
motion to strike pleadings based on addition of new party because motion to
strike was filed in response to plaintiff‘s motion for continuance of special
appearance hearing, and parties agreed that issues in motion for continuance
and motion to strike were ―overlapping‖ and ―intertwined‖).
Hoskins cites several cases holding that neither a motion for continuance
of the special appearance hearing nor a motion relating to discovery constitutes a
waiver of a special appearance. But these cases are not applicable to the facts
here. Hoskins did not seek a continuance of the special appearance hearing; he
elected to proceed first with his motion to strike all of SBG‘s causes of action
against him. And Hoskins likewise did not file or obtain a hearing on a motion
relating to discovery. Rule 120a specifically provides that ―[t]he issuance of
processes for witnesses, the taking of depositions, the serving of requests for
admissions, and the use of discovery processes‖ does not waive a party‘s special
appearance. See Tex. R. Civ. P. 120a(1). Hoskins‘s motion to strike all of
to the special appearance and thereby waived the special appearance. 35
S.W.3d at 267–68.
12
SBG‘s causes of action against him, purportedly based on special exceptions via
rule 91, cannot be considered ―the issuance of processes for witnesses, the
taking of depositions, the serving of requests for admissions, and the use of
discovery processes.‖ Compare Tex. R. Civ. P. 83–97 (entitled ―Pleadings of
Defendant‖), with Tex. R. Civ. P. 190–215 (entitled ―Discovery‖).
We hold that by seeking affirmative relief from the trial court inconsistent
with his special appearance and by violating rule 120a‘s due-order-of-hearing
requirement, Hoskins made a general appearance and waived his special
appearance. We sustain SBG‘s first issue.6
IV. TRIAL COURT ABUSED ITS DISCRETION BY GRANTING MOTION TO STRIKE
In subpart C of its second issue, SBG argues that the trial court erred by
granting Appellees‘ motion to strike.7 Although the trial court sustained
Appellees‘ special exceptions to SBG‘s original petition, SBG subsequently filed
three amended pleadings, making its fourth amended petition its live pleading at
the time the trial court struck SBG‘s claims. Appellees‘ motion to strike contains
the only special exceptions filed concerning SBG‘s fourth amended petition;
6
Because we hold that Hoskins made a general appearance and waived
his special appearance, we do not address the merits of the trial court‘s special
appearance ruling. See Tex. R. App. P. 47.1 (requiring court of appeals to
address only issues necessary to final disposition of the appeal).
7
We are authorized to review this ruling in connection with this interlocutory
appeal because the ruling impairs our jurisdiction over the special appearance
ruling and impairs the effectiveness of the relief we grant herein. See Tex. R.
App. P. 29.5(b); Perry v. Del Rio; 66 S.W.3d 239, 260–61 (Tex. 2001).
13
Appellees did not set a hearing or obtain a ruling on its special exceptions to
SBG‘s fourth amended petition prior to the hearing on its motion to strike. And
SBG was not given an opportunity to amend its fourth amended petition prior to
the trial court‘s order striking its claims. Nor did the trial court identify any
pleading failure in SBG‘s fourth amended petition. Instead, without reference to
any purported pleading defect, the trial court simply ordered ―that all causes of
action asserted by Plaintiff in its Fourth Amended Original Petition against
Defendants . . . specifically including all causes of action for breach of contract,
quantum meruit, fraudulent inducement, fraud, fraud by nondisclosure, breach of
fiduciary duty, negligent misrepresentation and civil conspiracy are stricken.‖
Special exceptions are a means of questioning the legal sufficiency of a
plaintiff's petition. See, e.g., Burgess v. El Paso Cancer Treatment Ctr., 881
S.W.2d 552, 554 (Tex. App.––El Paso 1994, writ denied). Texas follows the
―fair-notice‖ standard for pleading, requiring only that the opposing party be able
to ascertain from the pleading the nature and basic issues of the controversy and
what testimony will be relevant. See Tex. R. Civ. P. 47(a) (requiring petition to
contain ―short statement of the cause of action sufficient to give fair notice of the
claim involved‖); Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896
(Tex. 2000). A party is not required to describe the evidence in detail in its
petition. Paramount Pipe & Supply Co. v. Muhr, 749 S.W.2d 491, 494–95 (Tex.
1988). A motion to strike pleadings that attacks the substance of an amended
pleading, even if the motion is based on special exceptions, is an improper
14
procedural mechanism. See, e.g., Reynolds v. Murphy, 266 S.W.3d 141, 146
(Tex. App.––Fort Worth 2008, pet. denied) (explaining that ―[a] motion to strike
that attacks the substance of an amended pleading, even if based on special
exceptions, is an improper procedural mechanism‖) (citing Gallien v. Wash. Mut.
Home Loans, Inc., 209 S.W.3d 856, 861–62 (Tex. App.––Texarkana 2006, no
pet.)); see also Simulis, L.L.C. v. Gen. Elec. Capital Corp., No. 14-09-01055-CV,
2011 WL 505334, at *5 n.7 (Tex. App.––Houston [14th Dist.] Feb. 15, 2011, pet.
filed) (same).
Here, Appellees‘ motion to strike, as set forth and quoted above, does not
challenge the legal sufficiency of SBG‘s pleading; it repeatedly challenges the
factual sufficiency of the pleadings concerning every element of each of SBG‘s
causes of action. Thus, Appellees‘ motion to strike attacks the substance of
SBG‘s fourth amended pleading and constitutes the use of an improper
procedural mechanism. See, e.g., Simulis, L.L.C., 2011 WL 505334, at *5 n.7;
Reynolds, 266 S.W.3d at 146; Gallien, 209 S.W.3d at 861–62. Moreover, in the
absence of allegations by Appellees that SBG failed to state a cause of action,
the trial court‘s ruling striking claims in SBG‘s fourth amended petition was
premature because Appellees did not obtain a ruling on their special exceptions
to that pleading prior to entry of the order striking SBG‘s pleadings. See
Geochem Labs., Inc. v. Brown & Ruth Labs., Inc., 689 S.W.2d 288, 290 (Tex.
App.––Houston [1st Dist.] 1985, writ ref‘d n.r.e.) (holding plaintiff should have
been given opportunity to amend in light of defendants‘ new set of special
15
exceptions to plaintiff‘s third amended petition). For these reasons, we hold that
the trial court abused its discretion by striking all causes of action in SBG‘s fourth
amended petition.
We sustain subsection C of SBG‘s second issue. 8
V. CONCLUSION
Having sustained SBG‘s first issue and subsection C of its second issue
and having determined that we need not address the remainder of SBG‘s second
issue, we reverse the trial court‘s December 17, 2010 order sustaining Hoskins‘s
special appearance and striking SBG‘s claims in its fourth amended petition. We
remand this case for further proceedings consistent with this opinion.
SUE WALKER
JUSTICE
PANEL: WALKER, MEIER, and GABRIEL, JJ.
DELIVERED: November 3, 2011
8
Having determined that the trial court abused its discretion by striking the
claims asserted in SBG‘s fourth amended petition, we do not address SBG‘s
complaints concerning the propriety of the trial court‘s prior rulings on Appellees‘
special exceptions. See Tex. R. App. P. 47.1 (requiring appellate court to
address only issues necessary to disposition of the appeal).
16