485 S.W.3d 113
Tex. App.2016Background
- Khaled Alattar and Amir Mireskandari formed LY Retail LLC to operate LuxeYard, a luxury home‑goods website; LY merged into a public shell (Top Gear) to become LuxeYard.
- Alattar alleges a “pump and dump” scheme by investors and advisors (including Kevan Casey, Frederick Huttner, and others) who marketed stock, inflated the price, then sold restricted shares, causing losses.
- Alattar sued multiple defendants, including Kay Holdings, asserting fraud, securities claims, RICO, conspiracy, aiding and abetting, unjust enrichment, and related torts.
- Kay Holdings filed a special appearance contesting Texas personal jurisdiction and submitted an affidavit denying Texas contacts; Kay Holdings’ corporate representative Robert Wheat had signed a Subscription Agreement to buy LuxeYard stock.
- Alattar produced the Subscription Agreement containing a broad consent‑to‑jurisdiction clause submitting parties to Texas courts “in any action or proceeding arising out of or relating to this Agreement” and relied on Wheat’s deposition admissions that he returned signature pages (though he said he did not read the agreement).
- The trial court granted Kay Holdings’ special appearance; the appellate court reversed, holding Kay Holdings consented to Texas jurisdiction under the Subscription Agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kay Holdings is subject to Texas personal jurisdiction because it signed a Subscription Agreement containing a consent-to-jurisdiction clause | Alattar: Kay Holdings (through Wheat) signed the Subscription Agreement with a clause submitting to Texas courts for actions arising out of or relating to the agreement, so Kay Holdings consented to jurisdiction and the clause covers his claims | Kay Holdings: No signed agreement was evidenced; Wheat denied signing the relevant version; and Alattar’s tort claims fall outside the clause’s scope | The court held Kay Holdings consented to Texas jurisdiction: Wheat’s electronic signature and deposition admissions supported signing, failure to read is irrelevant, and the clause broadly covers claims that relate to the Subscription Agreement, so special appearance was wrongly granted |
Key Cases Cited
- Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142 (Tex. 2013) (plaintiff bears initial burden to plead jurisdictional facts; defendant must negate them)
- Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007) (standards for reviewing jurisdictional fact findings on appeal)
- BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (when trial court makes factual determinations on jurisdiction, appellate review treats implied findings)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal‑sufficiency review standards regarding evidence and inferences)
- Nat'l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419 (Tex. 2015) (party’s failure to read contract does not excuse enforceability of its terms or support fraudulent‑misrepresentation defenses)
- RSR Corp. v. Siegmund, 309 S.W.3d 686 (Tex.App.—Dallas 2010) (consent/forum clauses using “arising out of or relating to” are broadly construed to cover claims having any connection to the agreement)
- Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex. 1986) (factual sufficiency standard—set aside findings only if contrary to overwhelming weight)
- Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402 (Tex. 1998) (weighing evidence for factual sufficiency review)