WG&D Masonry, LLC v. Long Island's Finest Homes, LLC ( 2017 )

IN THE
TENTH COURT OF APPEALS
No. 10-16-00272-CV
WG&D MASONRY, LLC,
Appellant
v.
LONG ISLAND'S FINEST HOMES, LLC,
Appellee
From the 40th District Court
Ellis County, Texas
Trial Court No. 92757
MEMORANDUM OPINION
WG&D Masonry, LLC, a Texas company, sued Long Island’s finest Homes, LLC,
a New York company, in Texas for breach of contract and other causes of action in
connection with two leases of short term rental homes in New York and the subsequent
withholding of the security deposit for the first lease. Long Island filed a special
appearance. After both parties responded multiple times, attaching affidavits and
supporting documents, the trial court held a hearing and granted Long Island’s special
appearance and dismissed WG&D’s lawsuit against Long Island. Because the trial court
did not err in granting the special appearance, we affirm the trial court’s judgment.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Initially, WG&D complains on appeal that the trial court erred in failing to file
findings of fact and conclusions of law when timely requested and timely notified they
were past due. See TEX. R. CIV. P. 296, 297. As a remedy, WG&D contends we should
either abate the appeal for findings of fact and conclusions of law or reverse the trial
court’s order dismissing WG&D’s lawsuit for lack of personal jurisdiction.
Appeals of orders on special appearances are most commonly brought as appeals
of interlocutory orders, and findings of fact and conclusions of law are not required in
that procedural posture. See TEX. R. APP. P. 28.1(c); TEX. CIV. PRAC. & REM. CODE ANN.
§51.014(a)(7) (West 2014). Notwithstanding that, the order on Long Island’s special
appearance in this case is coupled with a dismissal of WG&D’s claims which makes it a
final judgment. However, WG&D is still not entitled to findings of fact and conclusions
of law. See TEX. R. CIV. P. 296. “The purpose of Rule 296 is to give a party a right to
findings of fact and conclusions of law finally adjudicated after a conventional trial on
the merits before the court.” Ikb Indus. v. Pro-Line Corp., 938 S.W.2d 440, 442 (Tex. 1997).
Where there is no conventional trial on the merits, findings and conclusions may be
proper, but a party is not entitled to them. See id. (findings and conclusions in dismissal
of suit as discovery sanction, helpful but not required). In this case, there was no
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conventional trial on the merits. Thus, WG&D was not entitled to findings of fact and
conclusions of law, and the trial court did not err in not providing them. 1 WG&D’s first
issue is overruled.
SPECIAL APPEARANCE
In its second and third issues, WG&D asserts that because Barry Turk was Long
Island’s agent (second issue) and because Long Island’s contacts through Turk
established personal jurisdiction (third issue), the trial court erred in granting Long
Island’s special appearance.
Pursuant to Rule 120a of the Texas Rules of Civil Procedure, a special appearance
may be made by any party for the purpose of objecting to the jurisdiction of the court
over the person or property of the defendant on the ground that such person or property
is not amenable to process issued by the courts of this State. TEX. R. CIV. P. 120a(1).
Whether a court has jurisdiction is a question of law that we review de novo. Moncrief
Oil Int'l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013). "When, as here, the trial
court does not issue findings of fact and conclusions of law, we imply all relevant facts
necessary to support the judgment that are supported by evidence." Id.
1 WG&D claims that without findings of fact and conclusions of law, it is left to speculate as to the grounds
of the trial court’s order. In a special appearance, the trial court’s sole determination is whether it has
jurisdiction over a particular party. Further, when the trial court does not issue findings of fact and
conclusions of law, we imply all relevant facts necessary to support the judgment that are supported by
evidence. Moncrief Oil Int'l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013). Thus, WG&D is still able
to present its appeal without findings of fact and conclusions of law. If the trial court had erred in failing
to file them, any error would be harmless.
WG&D Masonry, LLC v. Long Island's Finest Homes, LLC Page 3
Texas courts have personal jurisdiction over a nonresident defendant when (1) the
Texas long-arm statute provides for it, and (2) the exercise of jurisdiction is consistent
with federal and state due process guarantees. Spir Star AG v. Kimich, 310 S.W.3d 868,
872 (Tex. 2010); Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). The
Texas long-arm statute's broad doing-business language "allows the statute to reach as
far as the federal constitutional requirements of due process will allow." Retamco
Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009). Under a
constitutional due-process analysis, personal jurisdiction exists when (1) the non-resident
defendant has established minimum contacts with the forum state, and (2) the assertion
of jurisdiction complies with "traditional notions of fair play and substantial justice."
Moki Mac, 221 S.W.3d at 575 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.
Ct. 154, 90 L. Ed. 95 (1945)). We focus on the defendant's activities and expectations when
deciding whether it is proper to call the defendant before a Texas court. Int'l Shoe Co.,
326 U.S. at 316.
A defendant's contacts with a forum can give rise to either specific or general
jurisdiction. Am. Type Culture Collection v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002).
WG&D alleges that the trial court had both specific and general jurisdiction. A court has
specific jurisdiction over a defendant if the defendant's alleged liability arises from or is
related to an activity conducted within the forum. Spir Star AG v. Kimich, 310 S.W.3d 868,
873 (Tex. 2010); CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996). In such cases, "we focus
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on the 'relationship among the defendant, the forum[,] and the litigation.'" Spir Star AG,
310 S.W.3d at 873 (quoting Moki Mac, 221 S.W.3d at 575-76). General jurisdiction is
present when a defendant's contacts with a forum are "continuous and systematic," a
more demanding minimum-contacts analysis than specific jurisdiction. Id. at 807. For
general jurisdiction purposes, we do not view each contact in isolation. Am. Type Culture
Collection v. Coleman, 83 S.W.3d 801, 809 (Tex. 2002).
The plaintiff bears "the initial burden of pleading allegations sufficient to confer
jurisdiction," and the burden then shifts to the defendant "to negate all potential bases for
personal jurisdiction the plaintiff pled." Moncrief Oil Int'l, Inc. v. OAO Gazprom, 414
S.W.3d 142, 149 (Tex. 2013). A defendant can negate jurisdiction either legally or
factually. Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 659 (Tex. 2010). Legally, the
defendant can show that the plaintiff's alleged jurisdictional facts, even if true, do not
meet the personal jurisdiction requirements. See id. Factually, the defendant can present
evidence that negates one or more of the requirements, controverting the plaintiff's
contrary allegations. TV Azteca v. Ruiz, 490 S.W.3d 29, 36 fn. 4 (Tex. 2016). The plaintiff
can then respond with evidence supporting the allegations; and it risks dismissal of its
lawsuit if it cannot present the trial court with evidence establishing personal jurisdiction.
Id. If the plaintiff fails to plead facts bringing the defendant within reach of the long-arm
statute, the defendant need only prove that it does not live in Texas to negate jurisdiction.
Kelly, 301 S.W.3d. at 558-559. If the parties present conflicting evidence that raises a fact
WG&D Masonry, LLC v. Long Island's Finest Homes, LLC Page 5
issue, we will resolve the dispute by upholding the trial court's determination. See
Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex. 2009); see also
BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).
Agent
We must first decide whether Turk was Long Island’s agent. Because there are no
findings of fact and conclusions of law, the trial court impliedly found Turk was not Long
Island’s agent. To be an agent, a person must (1) act for and on behalf of another person
and (2) be subject to that person's control. Stanford v. Dairy Queen Prods., 623 S.W.2d 797,
801 (Tex. App.—Austin 1981, writ ref'd n.r.e.). Both elements are required; "the absence
of one will prevent the conclusion that an agency relationship exists." Id. An independent
contractor, on the other hand, may act for and in behalf of another; but since he is not
under the other's control, an agency relationship does not exist. Bertrand v. Mut. Motor
Co., 38 S.W.2d 417, 418 (Tex. Civ. App.—Eastland 1931, writ ref’d). Accord Stanford, 623
S.W.2d at 801. Thus, absent proof of control, there is no agency. St. Joseph Hosp. v. Wolff,
94 S.W.3d 513, 542 (Tex. 2002) ("The right of control is the 'supreme test' for whether a
master-servant relationship, rather than an independent contractor relationship, exists.");
Webster v. Lipsey, 787 S.W.2d 631, 635 (Tex. App.—Houston [14th Dist.] 1990, writ denied)
("essential element of proof of agency" is that alleged principal has right to assign agent's
task and to control means and details of process).
WG&D contends that Turk was Long Island’s agent because he was listed on Long
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Island’s website as a member of its “team,” and when Wendy Hernandez, the majority
owner and member-manager of WG&D, contacted Long Island through its website, Turk
replied to her through an email associated with Long Island.2 However, in its amended
special appearance, Long Island asserted by affidavit of Jonas J. Wagner, its president,
that Turk was an independent contractor, not Long Island’s agent. There is no evidence
in the record to show that Long Island had any control over Turk. Long Island’s name
was not on any of the leases entered into by WG&D, payments of rents and security
deposits were not wired to Long Island’s bank account, and Turk admitted he withheld
WG&D’s security deposit, not Long Island. Thus, there is nothing in the record to
establish that Turk was Long Island’s agent. Accordingly, the trial court did not err in
impliedly finding that Turk was not Long Island’s agent, and we overrule WG&D’s
second issue.
Personal Jurisdiction
We now look to whether Long Island, itself, not through the actions of Turk,
purposely availed itself of the privileges of doing business in Texas so as to subject itself
to personal jurisdiction in Texas.
WG&D sued Long Island for breach of contract, bad faith retention of security
deposit, civil theft, conversion, and unjust enrichment/quantum meruit, each stemming
from the same series of transactions allegedly with Long Island. WG&D alleged that
2
The remaining emails from Turk were through an “AOL” address, not Long Island’s address.
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Long Island engaged in the business of offering short-term leases of homes in or around
Long Island, New York to Texas residents and solicited Texas residents, like WG&D to
lease homes in New York. Specifically, WG&D alleged that it entered into a lease
agreement with Long Island for a home in New York which was performed in whole or
in part in Texas; that Long Island negotiated the terms of the lease in Texas via telephone,
electronic mail, and/or fax and presented the final draft of the lease to WG&D by fax for
signature in Texas; and that WG&D wired its security deposit, “realtor fee,” and monthly
rental payments from Texas to Long Island in accordance with the lease. WG&D claimed
that at the conclusion of the lease, Long Island communicated with WG&D via telephone,
electronic mail, and/or fax regarding the return of the security deposit and that Long
Island failed and wrongfully refused to return the deposit.
Long Island filed a special appearance asserting that the trial court did not have
jurisdiction over Long Island because Long Island was not a Texas company, did not
maintain an office or branch in Texas or have any employees in Texas; did not own or
lease any property in Texas, did not solicit business in Texas, did not purposefully direct
its activities toward Texas, was not amendable to process issued by a Texas court, and
has not done any act or consummated any transaction in Texas that would allow the court
to exercise personal jurisdiction over it. It further asserted that any contacts by Long
Island with the State of Texas were random, isolated and fortuitous.
In response, WG&D filed an affidavit of Wendy Hernandez who stated that based
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on the recommendation of a Texas company which had previously leased from Long
Island,3 WG&D called “Barry Turk of Long Island's Finest Homes,” to inquire about
property to rent in New York. Hernandez asserted she received proposed leases from
Turk, ultimately negotiated a lease with Turk, wired money to Long Island, and signed a
lease and faxed it back to Turk. Hernandez attached copies of the leases, the fax cover
sheets, letters from Turk, and the wire transfers. Long Island’s letterhead appears on the
fax cover sheets and letters from Turk which accompanied the leases. The leases
themselves made no mention of Long Island. The wire transfers, appearing to be filled
out by WG&D, indicated that some of the money was sent to a bank account under Turk’s
name and Long Island’s name.
Hernandez also asserted in her affidavit that she and Turk exchanged emails
regarding issues with the rented property, renting different property, wiring more
money, and the return of the security deposit. However, the documents attached to the
affidavit indicate that the emails from Turk originated from an AOL account, not from an
account associated with Long Island. Further the lease signed by WG&D did not include
any letterhead or fax coversheet from Long Island. Also, the wire transfers did not
consistently indicate to whom the money was sent. Some of the wire transfer documents
which used a Chase Bank account ending in “30” indicated the money was sent to Barry
Turk or to Turk and Long Island while some indicated the money was sent to a different
3
No documentation of this transaction was included with the affidavit.
WG&D Masonry, LLC v. Long Island's Finest Homes, LLC Page 9
Chase Bank account number and a different person, Lindon Morrison. Hernandez did
not explain whether or not Morrison had any connection to Long Island.4
WG&D’s response prompted Long Island to file a first amended special
appearance in which Long Island contended neither general nor specific jurisdiction
existed. In support of this contention, Long Island attached the affidavit of Jonas J.
Wagner, Long Island’s president. In his affidavit, Wagner stated Barry Turk was a real
estate broker who occasionally performed work on an independent contract-basis for
Long Island until his contract was terminated on June 5, 2015. He also stated Long Island
was unaware of the contacts between WG&D and Turk until after Long Island was sued
and never authorized Turk to use Long Island’s name, or anything else in connection
with any contract, agreement, communication or document by or between WG&D and
Turk. Wagner confirmed that the email address used in email communications between
Turk and WG&D was not Long Island’s email address.
Wagner further asserted that Long Island never entered into a business
relationship, contract, or agreement with WG&D, never received money from WG&D,
and never solicited business from WG&D in Texas. Wagner confirmed that the bank
account number on the documented wire transfers “has never been” Long Island’s bank
account. He then reasserted that Long Island: 1) never solicited any business in Texas;
2) never conducted business in Texas; 3) had no office in Texas; 4) owned no property in
4
The documents attached to Hernandez’s affidavit indicate Morrison was the landlord for the second lease
signed by WG&D.
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Texas; 5) had no registered agent for service of process in Texas; 6) had no employees in
Texas; 7) never advertised in Texas; 8) did not visit Texas in connection with the lease of
any property to WG&D; and 9) had not visited Texas in connection with the lease of any
other property.
Not to be outdone, WG&D responded to the amended special appearance and
attached another affidavit from Hernandez. In that affidavit, and contrary to her initial
affidavit, Hernandez stated that, based on the recommendation of the company
mentioned in her previous affidavit, Hernandez visited Long Island’s website and visited
the “Meet our Team” page. She attached a copy of that page as it purportedly appeared
in April of 2015. Turk is listed on that page. Hernandez stated that after visiting the page,
she filled out information on a “Contact Us” page on Long Island’s website. Attached to
the affidavit is a copy of that page as it purportedly appeared in April of 2015. Hernandez
asserted that after she filled out the “contact us” information, Turk responded to her
though an email account associated with Long Island. Hernandez responded to Turk at
the same email address. Copies of those emails are attached to the affidavit. A copy of
Turk’s Long Island business card allegedly given to Hernandez by Turk is also attached.
Lastly, Long Island supplemented its first amended special appearance with an
unsworn declaration by Turk. See TEX. CIV. PRAC. & REM. CODE ANN. § 132.001 (West
2011) (“(a) … an unsworn declaration may be used in lieu of a written sworn
declaration…or affidavit….”). Turk stated that Chase Bank account ending in “30” was
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his bank account and was not an account affiliated with Long Island. He also stated that
Suey Tan was the real estate broker and Turk was the real estate agent in connection with
the first lease to WG&D and that Tan and Turk shared the realtor fee in connection with
the lease. Turk affirmed that he held the security deposit for the lease and transferred
the security deposit to another lease by WG&D, but that when WG&D held over on that
second lease, Turk withheld the entire security deposit as damages.
Application
From the evidence described above, the contacts which WG&D asserts establish
the trial court’s jurisdiction over Long Island were either to or from Turk. We have
already held that Turk was not Long Island’s agent. Based on the evidence presented,
Long Island conducted no activity within and had no continuous and systemic contacts
with Texas. Thus, the trial court does not have specific or general jurisdiction over Long
Island. Further, since WG&D failed to plead facts bringing Long Island within reach of
the long-arm statute, to negate jurisdiction, Long Island needed only to prove, and did
so, that it does not “live” in Texas. Accordingly, the trial court did not err in granting
Long Island’s special appearance, and WG&D’s third issue is overruled.
CONCLUSION
Having overruled each issue on appeal, the trial court’s judgment is affirmed.
TOM GRAY
Chief Justice
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Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
Affirmed
Opinion delivered and filed June 7, 2017
[CV06]
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