558 S.W.3d 824
Tex. App.2018Background
- Ascentium sued C323, LLC (a Florida LLC) in Harris County to collect a loan default after C323 bought assets of Florida cosmetology school Hi‑Tech and continued operating the school in Miami.
- C323 has three manager‑members: Turnage (Texas, CEO), Riser (Maryland), and Pollak (North Carolina); C323’s sole operations and employees are in Miami.
- Public filings with the Florida Department of State listed a Carrollton, Texas address as C323’s “principal address” and the same address for Turnage and Pollak; annual reports signed by Turnage listed that as the company’s “current principal place of business.”
- C323 filed a special appearance denying Texas general jurisdiction, submitting affidavit/deposition evidence that C323’s “nerve center” and only business are in Florida and that the Texas address is a shareholder’s address.
- The trial court granted C323’s special appearance (no findings); Ascentium appealed, arguing C323’s principal place of business is Texas.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas has general jurisdiction over C323 based on its principal place of business | Ascentium: Florida filings listing Carrollton, TX as principal address and CEO Turnage’s Texas office show C323’s principal place of business is Texas | C323: Actual center of direction, control, and operations is Miami; Texas address is a shareholder’s address and filings are not dispositive | Court: Evidence conflicted; reasonable support for finding nerve center not in Texas; special appearance properly granted |
| Is a company’s “nerve center” the test for principal place of business? | Ascentium: yes; relies on nerve center concept | C323: agrees on legal test but argues nerve center is Florida | Court: Agreed — nerve center is operative test (Hertz) |
| Is CEO Turnage’s Texas office dispositive of C323’s nerve center? | Ascentium: Turnage’s Texas office and his CEO title make Texas the nerve center | C323: Turnage’s contacts are insufficient; other managers in other states and daily operations in Florida control | Court: Rejects dispositive weight of filings/CEO office; Turnage’s Texas presence alone does not establish nerve center |
| Whether the trial court erred in granting the special appearance and dismissing C323 | Ascentium: Trial court abused discretion because filings and other contacts point to Texas | C323: Trial court properly resolved factual disputes against Ascentium; filings do not compel jurisdiction | Court: Affirmed — reasonable fact‑resolution supported dismissal |
Key Cases Cited
- Daimler AG v. Bauman, 571 U.S. 117 (general jurisdiction tied to place of incorporation or principal place of business)
- Hertz Corp. v. Friend, 559 U.S. 77 (principal place of business = nerve center where officers direct, control, coordinate)
- Walden v. Fiore, 134 S. Ct. 1115 (defendant’s own contacts with forum required for jurisdiction)
- M & F Worldwide Corp. v. Pepsi‑Cola Metro. Bottling Co., 512 S.W.3d 878 (Texas long‑arm extends to federal due‑process limits)
- BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789 (trial court findings implied when none filed; standards for special appearance)
- Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653 (burden on defendant in special appearance)
- TV Azteca v. Ruiz, 490 S.W.3d 29 (conflicting jurisdictional evidence supports trial court’s factual resolution)
- Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333 (minimum contacts and purposeful availment principles)