542 S.W.3d 90
Tex. App.2017Background
- CNA (Texas company) and Jutalia Recycling (New York company owned by Cardinale) negotiated sales of scrap metal: CNA sent Purchase Contracts (naming Texas/Fort Bend County jurisdiction); Jutalia returned Sales Orders/Agreements of Sale (naming Richmond County, New York jurisdiction) signed by both parties.
- Sales Orders contained an express clause that seller's acceptance was conditioned on the Sales Order terms and that the Sales Orders constituted the entire agreement.
- Goods were located in New York and shipped from New York to China; loading was supervised by Team Enterprise. CNA alleged the shipment contained worthless materials on arrival in China.
- CNA sued in Harris County, Texas for breach of contract and for fraud/conspiracy against Jutalia, Cardinale, Foshan Trading, and Team Enterprise. Jutalia and Cardinale filed a special appearance asserting lack of personal jurisdiction.
- The trial court denied the special appearance; appellants appealed interlocutorily. The appellate court reviews personal jurisdiction de novo and must determine consent and minimum contacts for specific jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Jutalia consented to Texas jurisdiction by accepting CNA's Purchase Contracts | CNA: Jutalia accepted the Purchase Contracts (buyer form) and thus consented to Texas jurisdiction | Jutalia: Its Sales Orders expressly conditioned acceptance on New York forum selection and therefore did not agree to Texas jurisdiction | Jutalia did not consent to Texas jurisdiction because its acceptance was expressly conditional on different forum terms |
| Whether a New York forum-selection clause precludes Texas courts from exercising jurisdiction | CNA: forum clause favoring New York doesn't bar Texas jurisdiction here | Jutalia: parties agreed to New York forum | Court: A forum-selection clause in favor of New York does not automatically preclude jurisdiction elsewhere under constitutional minimum-contacts analysis |
| Whether appellants established minimum contacts with Texas to permit specific jurisdiction | CNA: contacts include calls/emails to CNA in Texas, three contracts with CNA (a Texas entity), solicitation to wire payment from Texas, and acceptance of Purchase Contracts | Jutalia/Cardinale: Contacts were limited to communications with a Texas resident about goods located/shipped outside Texas; no performance in Texas; payments alone insufficient | Contacts were insufficient: communications and contracts with a Texas resident, payment routing, and non-Texas performance do not establish purposeful availment or specific jurisdiction |
| Whether alleged agents (Foshan/Chen) created contacts sufficient to bind Jutalia | CNA: Foshan/Chen acted as Jutalia’s agents, creating Texas contacts | Jutalia: either denies agency or that agency contacts suffice | Court: Even assuming agency, Foshan/Chen’s contacts with Texas were insufficient to confer jurisdiction on Jutalia |
Key Cases Cited
- Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142 (Tex. 2013) (standard for constitutional minimum contacts and de novo review of jurisdiction)
- Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333 (Tex. 2009) (purposeful availment and specific vs. general jurisdiction framework)
- Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007) (targeting the forum state required for specific jurisdiction; stream-of-commerce context)
- Searcy v. Parex Res., Inc., 496 S.W.3d 58 (Tex. 2016) (communications with Texas resident insufficient alone for jurisdiction)
- Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777 (Tex. 2005) (effect of forum-selection clauses on jurisdictional analysis)
- TV Azteca v. Ruiz, 490 S.W.3d 29 (Tex. 2016) (additional conduct beyond stream-of-commerce knowledge required to serve the forum market)
- Lisitsa v. Flit, 419 S.W.3d 672 (Tex. App.—Houston [14th Dist.] 2013) (contracting with Texas resident insufficient absent performance in Texas)
- Peredo v. M. Holland Co., 310 S.W.3d 468 (Tex. App.—Houston [14th Dist.] 2010) (numerous communications and contracting with Texas entity do not alone establish minimum contacts)