Herbert Rolnick v. Sight's My Line, Inc., a Florida Corporation Stewart Lantz Riggs, Aleshire & Ray Blazier, Christensen, Bigelow & Vir, P.C. And Adams & Graham
03-15-00335-CV
Tex. App.Aug 5, 2015Background
- Plaintiffs Sight’s My Line, Inc. (SMLI) and Stewart Lantz contracted to sell substantially all SMLI assets (five Texas retail locations) to purchaser(s); the deal closed in Nov. 2012 and included a secured promissory note and a Security Agreement requiring a UCC-1 filing.
- Herbert Rolnick, a nonresident attorney, acted as lead/primary counsel for plaintiffs on the transaction, prepared and reviewed key documents (including the UCC‑1), coordinated with Texas-based co-counsel (Riggs Aleshire & Ray; Blazier, Christensen, Bigelow & Virr), and received a substantial flat fee for the work.
- The UCC‑1 financing statement was filed in the Texas Secretary of State’s office (rather than Delaware as required), and when the buyer defaulted and declared bankruptcy in Delaware, plaintiffs’ security interest was not perfected and they suffered damages.
- Plaintiffs sued multiple attorneys, including Rolnick, for legal malpractice in Texas. Rolnick filed a special appearance (unsworn) claiming lack of personal jurisdiction; the trial court denied the special appearance after limited jurisdictional discovery.
- Appellees argue Rolnick purposefully availed himself of Texas by providing legal services aimed at Texas assets and by directing and coordinating Texas counsel; alternatively, they argue agency/principal–agent principles impute Texas contacts of local counsel to Rolnick.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas courts have specific personal jurisdiction over nonresident Rolnick for malpractice arising from the Texas transaction | Rolnick purposefully availed himself of Texas by leading negotiations, drafting/reviewing UCC‑1 and other documents affecting Texas assets, communicating with Texas counsel and receiving a fee for Texas work | Rolnick argued lack of sufficient Texas contacts and that his role was conduit/out‑of‑state counsel; also asserted procedural defects (unsworn special appearance) | Trial court denied special appearance; appellate brief urges affirmance — finding record supports purposeful availment and contacts related to the claim |
| Whether contacts of Texas-based co-counsel can be imputed to Rolnick under agency/principal–agent principles | Appellees: Rolnick retained, directed, coordinated, and ratified work of Texas counsel, so their Texas contacts should be attributed to him | Rolnick did not address agency in his brief (and contested scope of his control in the record) | Appellees argue agency/ratification exists (billing, directives, delegated tasks); appellate posture favors upholding trial court unless clearly wrong |
| Whether the exercise of jurisdiction would offend due process (fair play & substantial justice) | Texas has strong interest (tort occurred in connection with Texas assets); burdens on defendant are minimal; plaintiff’s interest in single forum favors Texas | Defendant would argue burden and fairness favor his nonresident forum | Appellees contend the traditional fairness factors favor Texas; court found no clear due process bar given purposeful availment |
| Procedural sufficiency of Rolnick’s special appearance | Plaintiffs note Rolnick’s special appearance was unsworn, which may independently warrant refusal | Rolnick maintained the merits of his jurisdictional challenge despite procedural posture | Appellees assert unsworn special appearance is an additional ground to affirm denial; trial court proceeded to consider evidence |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and foreseeability standard for personal jurisdiction)
- Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007) (Texas standard for purposeful availment and specific vs. general jurisdiction)
- BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (standard of review for special appearances and burden shifting)
- Tempest Broad. Corp. v. Imlay, 150 S.W.3d 861 (Tex. App.—Houston [14th Dist.] 2007) (nonresident attorney subject to jurisdiction when he negotiated and drafted agreements affecting forum assets)
- Markette v. X‑Ray X‑Press Corp., 240 S.W.3d 464 (Tex. App.—Houston [14th Dist.] 2007) (malpractice outside forum that only had collateral effects in forum does not by itself create jurisdiction)
- Moncrief Oil Int’l v. OAO Gazprom, 414 S.W.3d 142 (Tex. 2013) (consider quality and nature of contacts; single acts can create substantial connection)
- Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984) (forum state’s interest in adjudicating torts causing injury in the state)