515 S.W.3d 1
Tex. App.2016Background
- Wellshire (three related Texas entities) sued several TMX-related entities and two individuals for misappropriation of trade secrets and tortious interference; most TMX co-defendants did not contest Texas jurisdiction.
- TMX Finance, LLC (TMX-Finance) is an in-state subsidiary; TMX Finance Holdings, Inc. (TMX-Holdings) is an out-of-state parent holding company that allegedly has no employees, operations, or Texas contacts.
- Wellshire alleged TMX-Holdings is the alter ego of TMX-Finance and sought to impute TMX-Finance’s Texas contacts to TMX-Holdings.
- TMX-Holdings filed a special appearance asserting it has no Texas contacts; it submitted an affidavit from its VP (Christopher Wall) denying operational control over TMX-Finance.
- The trial court denied the special appearance on alter-ego grounds; the court of appeals reversed and rendered dismissal of TMX-Holdings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wellshire waived alter-ego theory by not pleading it in the original petition | Wellshire relied on its special-appearance response to allege alter-ego and submitted evidence; the court may consider those filings | TMX-Holdings contended Wellshire waived the theory by failing to plead it earlier | The court held no waiver: Rule 120a allows consideration of pleadings and special-appearance response when deciding jurisdiction |
| Whether Wellshire proved TMX-Holdings is the alter ego of TMX-Finance (sufficient to impute contacts) | TMX-Holdings (through common ownership, shared officers/headquarters, capital infusions, undocumented liabilities, and lack of formalities) exerts abnormal control over TMX-Finance and should be fused for jurisdictional purposes | TMX-Holdings showed no involvement in TMX-Finance’s operations, marketing, personnel, or policies; parental monitoring and ownership alone are insufficient to prove atypical control | The court held Wellshire failed to prove the requisite abnormal/atypical control; alter-ego not established; special appearance should have been granted |
Key Cases Cited
- Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653 (Tex. 2010) (standard and burden-shifting for special appearances)
- BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (implied findings and proof required to pierce corporate veil for jurisdiction)
- PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163 (Tex. 2007) (PHC‑Minden factors and requirement of a "plus" factor showing atypical control for alter-ego jurisdiction)
- Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569 (Tex. 2007) (long-arm statute reaches to the extent of due process)
- Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333 (Tex. 2009) (purposeful availment minimum-contacts framework)
- Spir Star AG v. Kimich, 310 S.W.3d 868 (Tex. 2010) (fair play and substantial justice factors in jurisdictional analysis)
- Cappuccitti v. Gulf Indus. Prods., Inc., 222 S.W.3d 468 (Tex. App.—Houston [1st Dist.] 2007) (upholding alter-ego jurisdiction where individual and corporate control and intermingling were established)
