DRESSER-RAND GROUP, INC. and Dresser-Rand Holdings Spain, S.L.U., Appellants v. CENTAURO CAPITAL, S.L.U. and Joseba Grajales, Appellees.
No. 14-13-00444-CV.
Court of Appeals of Texas, Houston (14th Dist.).
Sept. 25, 2014.
443 S.W.3d 579
Regarding the two claims that this Court affirmed—tortious interference with existing contracts and civil conspiracy—Bossier Dodge cannot show that any error in limiting discovery or failing to hold a hearing on the motion to show authority probably caused the rendition of an improper judgment or prevented it from properly presenting the case to this Court. See
CONCLUSION AS TO CAUSE NO. 01-12-00346-CV
Because the bankruptcy court‘s judgments have been vacated and would nonetheless be subject to de novo review by the federal district court, they cannot serve as a basis for collateral estoppel, and the trial court erred in granting RLJ Group‘s Traditional Motion for Summary Judgment.
Because Bossier Dodge presented at least a scintilla of evidence to support its breach of contract, tortious interference with prospective business relations, unfair competition by misappropriation, quantum meruit, and fraud claims, the trial court erred in granting RLJ Group‘s no-evidence motion for summary judgment on those claims, and we reverse the no-evidence summary judgment on those claims and remand them for further proceedings.
Because Bossier Dodge did not bring forth a scintilla of evidence to support its claims for tortious interference with existing contracts or civil conspiracy, the trial court did not err in granting RLJ Group‘s no-evidence motion for summary judgment on Bossier Dodge‘s claims for tortious interference with existing contracts and civil conspiracy. Accordingly, we affirm the trial court‘s no-evidence summary judgment as to these claims only.
We overrule all pending motions.
James P. Karen, Dallas, N. Scott Fletcher, Houston, for Appellants.
Tracy Leroy, Mark K. Glasser, Houston, for Appellees.
Panel consists of Chief Justice FROST and Justices BOYCE and JAMISON.
OPINION
KEM THOMPSON FROST, Chief Justice.
This is an appeal by the plaintiffs from the trial court‘s order granting the special appearances of a Spanish citizen and a Spanish company. The main issue is whether the trial court erred in concluding
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff/appellant Dresser-Rand Group, Inc. (hereinafter “Dresser-Rand“) is a Delaware corporation with a principal office in Houston, Texas. Plaintiff/appellant Dresser-Rand Holdings Spain, S.L.U.
Unchallenged Findings of Fact
Centauro Capital is a holding company organized under the laws of Spain. All of Centauro‘s business is conducted from its offices in Vitoria-Gasteiz, Spain. Centauro Capital has no place of business, office, real estate, or facility of any kind in Texas. Nor does Centauro Capital have employees, servants, or agents in Texas. The company does not maintain an internet website or otherwise advertise in Texas. It has never paid taxes or owned any bank accounts in Texas. Nor has Centauro Capital ever filed a lawsuit in Texas, and before the case under review, it had never been sued in Texas. Centauro Capital does not recruit Texas residents for employment in Texas or outside of Texas.
Joseba Grajales, a citizen of Spain, is the sole director and shareholder of Centauro Capital. Grajales does not now own, nor at any time has he owned, any real estate, property, office, or business in Texas. In his individual capacity, Grajales has never negotiated any contracts with Texas residents or recruited Texas residents for employment. He has never had, and does not now have, any employees, servants, or agents in Texas; he has never paid taxes or owned any bank accounts in Texas. He has never filed a lawsuit in Texas, and until the case under review, Grajales had never been sued in Texas.
Before the 2011 share-purchase transaction involving the Dresser-Rand Parties, Centauro Capital owned approximately sixty-four percent of the shares of Grupo Guascor, S.L., a Spanish company (hereinafter “Grupo Guascor“). Before that transaction, Grajales was the chairman of the board and president of Grupo Guascor. Eleven Spanish investment companies held the remaining approximately thirty-six percent of Grupo Guascor‘s shares. Grupo Guascor was headquartered in Vitoria-Gasteiz, Spain. When Grajales served as an officer and director of Grupo Guascor, that company did not (1) have any customers in Texas, (2) own any real estate, property, office, or business in Texas, (3) engage in any contracts with Texas residents, (4) recruit Texas residents for employment, (5) have any employees, servants, or agents in Texas, (6) pay taxes in Texas, (7) own any bank accounts in Texas, or (8) file or defend any lawsuit in Texas.
Dresser-Rand approached the Centauro Parties to express its interest in purchasing Grupo Guascor. Dresser-Rand representatives traveled to Spain to express the company‘s interest to the Centauro Parties and then invited them to Texas for two later meetings if there was interest in a
The following year, on March 3, 2011, Centauro Capital, the eleven other Grupo Guascor shareholders, Dresser-Rand, and Grupo Guascor entered into a Share Purchase Agreement (hereinafter the “Agreement“). The in-depth due diligence for the Agreement, conducted in Spain and other European locations over a two-week period, and much of the negotiations, including the final negotiations and the execution of the Agreement, occurred in Spain and France. The Agreement provided for a stock and cash transaction in which Dresser-Rand agreed to pay Centauro Capital and the other eleven Grupo Guascor shareholders (hereinafter collectively the “Sellers“) Q204,868,000 in cash and Q170,625,000 in Dresser-Rand shares to acquire all shares of Grupo Guascor.
The Agreement required Dresser-Rand to transmit these payments and shares to the Sellers’ accounts, each of which was located in Spain. Centauro Capital‘s Dresser-Rand shares are held by Merrill Lynch. Centauro Capital communicates exclusively with personnel located in Merrill Lynch‘s Madrid offices regarding Centauro Capital‘s Dresser-Rand shares. Centauro Capital has never held or traded the Dresser-Rand shares or any other property through a United States bank or other entity. The Agreement provided that the Sellers would deposit Q30,000,000 of the cash consideration to be held in escrow by Banco Bilbao Vizcaya Argentaria, S.A. “or another Spanish institution” for use as a source of money to cover up to Q30,000,000 in potential post-closing liabilities from the Sellers to the buyer. The escrow amount was deposited with BNP Paribas Securities Services Sucursal en Espana, located in Madrid, Spain. The closing of the transaction, at which the Sellers transferred their shares of Grupo Guascor to Dresser-Rand, occurred solely in Spain and in accordance with Spanish law.
In accordance with the Agreement, the Dresser-Rand board of directors appointed Grajales to serve as an Advisory Director to Dresser-Rand. As an Advisory Director, Grajales had the right to attend Dresser-Rand board meetings, but he did not have a vote. Grajales attended Dresser-Rand‘s Board of Directors and General Shareholder Meetings in May 2011 and May 2012, in Houston.
Post-Closing Adjustment
The closing of the transaction occurred on May 4, 2011. Before the closing, Dresser-Rand entered into an assignment agreement with its subsidiary Dresser-Rand Spain. Section 2.6 of the Agreement sets forth procedures and formulas for calculating and effectuating a post-closing adjustment to the consideration paid by Dresser-Rand for the Grupo Guascor shares (hereinafter the “Adjustment“). Section 2.6(h) provides that under certain circumstances, Grajales, acting as the Seller Representative, “will cause to be paid to [Dresser-Rand]” an amount in cash determined pursuant to section 2.6 as an adjustment to the consideration to be paid by Dresser-Rand.1 Likewise, section 2.6(h)
Arbitration Provision
The parties agreed that the Agreement shall be governed by, and construed in accordance with the laws of France, without regard to conflict-of-laws principles, except to the extent the corporate law of Delaware or Spain mandatorily applies. In the Agreement the parties provided for arbitration of disputes arising out of or in relation to the Agreement that cannot be amicably resolved by reasonable efforts under informal dispute resolution procedures agreed to by the parties. Any such arbitration must take place in Paris, France, under the Rules of Arbitration of the International Chamber of Commerce (hereinafter “ICC“).
Appointment of Independent Expert
A dispute arose between the Dresser-Rand Parties and the Sellers as to the calculation of the amount of the Adjustment under section 2.6. In July 2012, Dresser-Rand Spain applied to the President of the Commercial Court of Paris for appointment of an independent expert to resolve this dispute and in October 2012, one was appointed (hereinafter the “Independent Expert“). When the trial court issued its findings of fact and conclusions of law, the proceeding before the Independent Expert was ongoing and had not been concluded. To date, no party has notified this court that this proceeding has concluded.
Arbitration Proceeding
Centauro Capital initiated an arbitration proceeding in Paris, France against the Dresser-Rand Parties under the Agreement‘s arbitration provision. When the trial court issued its findings of fact and conclusions of law, this arbitration proceeding was ongoing and had not been concluded. To date, no party has notified this court that this arbitration proceeding is completed.
Suit for Injunctive Relief in Texas Court
The Dresser-Rand Parties filed suit in the trial court against the Centauro Parties, seeking injunctive relief barring the Centauro Parties from selling Dresser-Rand stock totaling a value of Q25,068,236.14, or if Centauro or Grajales already has sold or desires to sell such stock in the future, requiring the Centauro Parties to place the proceeds of any such sale into escrow until final decisions are rendered in the pending arbitration proceeding and the proceeding before the Independent Expert.
The trial court issued a temporary restraining order. The Centauro Parties then filed special appearances. The trial court dissolved its temporary restraining order and then granted the Centauro Parties’ special appearances, dismissing the Dresser-Rand Parties’ claims against them for lack of personal jurisdiction. The Dresser-Rand Parties now challenge this ruling.
II. STANDARD OF REVIEW
Whether the Centauro Parties are subject to personal jurisdiction in Texas is a question of law subject to de novo review. See BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Parties may challenge the legal and factual sufficiency of the trial court‘s findings of fact, and the Dresser-Rand Parties have challenged the legal and factual sufficiency of the evidence supporting some of the trial court‘s fact findings.
III. ISSUES AND ANALYSIS
In eight appellate issues, the Dresser-Rand Parties challenge the trial court‘s conclusion that it could not exercise personal jurisdiction over the Centauro Parties based upon specific jurisdiction and that the exercise of personal jurisdiction over the Centauro Parties would not comport with traditional notions of fair play and substantial justice. The Dresser-Rand Parties further assert that the Centauro Parties come within the reach of the Texas long-arm statute and that the evidence is legally and factually insufficient to support some of the trial court‘s fact findings.
Legal Standards Regarding the Exercise of Personal Jurisdiction
The Texas long-arm statute governs a Texas court‘s exercise of jurisdiction over nonresident defendants.
Personal jurisdiction over a nonresident defendant is constitutional when two conditions are met: (1) the defendant has established minimum contacts with the forum state and (2) the exercise of personal jurisdiction comports with traditional notions of fair play and substantial justice. See BMC Software, 83 S.W.3d at 795. For a defendant to have sufficient contacts with the forum, it is essential that there be some act by which the defendant “purposefully avails” itself of the privilege of conducting activities in the forum state, thus invoking the benefits and protections of its laws. Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 784 (Tex. 2005). Although not determinative, foreseeability is an important consideration in deciding whether the nonresident defendant purposefully has established minimum contacts with Texas. BMC Software, 83 S.W.3d at 795. The concept of foreseeability is implicit in the requirement that there be a substantial connection between the defendants and Texas arising from their conduct purposefully directed toward Texas. See Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 227 (Tex. 1991). A defendant should not be subject to a Texas court‘s jurisdiction based upon random, fortuitous, or attenuated contacts. BMC Software, 83 S.W.3d at 795.
Specific jurisdiction exists when the claims in question arise from or relate to the defendant‘s purposeful contacts with Texas. Am. Type Culture Collection Inc. v. Coleman, 83 S.W.3d 801, 807 (Tex. 2002). In conducting a specific-jurisdiction analysis, we focus on the relationship among the defendants, Texas, and the litigation. See Guardian Royal, 815 S.W.2d at 228. For a nonresident defendant‘s contacts with Texas to support an exercise of specific jurisdiction, there must be a substantial connection between the defendant‘s purposeful contacts with Texas and the operative facts of the litigation. See Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 585 (Tex. 2007).
Specific-Jurisdiction Analysis
In conducting a personal-jurisdiction analysis, we review the claims in question and the evidence regarding the jurisdictional facts, but we do not adjudicate the merits of the claims. See Lisitsa v. Flit, 419 S.W.3d 672, 682 (Tex.App.-Houston [14th Dist.] 2013, pet. filed); Weldon-Francke v. Fisher, 237 S.W.3d 789, 792 (Tex.App.-Houston [14th Dist.] 2007, no pet.). Ultimate liability in tort is not a jurisdictional fact, and the merits of the Dresser-Rand Parties’ claims are not at issue in determining whether the trial court erred in dismissing these claims for lack of personal jurisdiction.3 See Lisitsa, 419 S.W.3d at 682; Weldon-Francke, 237 S.W.3d at 792.
- The sale of the Grupo Guascor stock under the Agreement closed on May 4, 2011.
- The Dresser-Rand Parties performed under the Agreement and paid the Closing Consideration to each of the Sellers in proportion to its respective share of Grupo Guascor‘s capital. As the largest shareholder, Centauro Capital received consideration that included 3,245,737 shares of Dresser-Rand stock.
- The Dresser-Rand Parties and the Sellers are currently in a dispute regarding the amount of the Adjustment. The Dresser-Rand Parties claim that, as a result of the Adjustment, they are entitled to receive a payment of approximately Q36 million.
- Pursuant to section 2.6(f) of the Agreement, Dresser-Rand Spain initiated a proceeding before the Independent Expert in Paris, France. The Sellers initiated an arbitration proceeding against the Dresser-Rand Parties before the International Chamber of Commerce in Paris, France.
- Until these proceedings are concluded and the parties’ claims resolved, the final purchase price of the Grupo Guascor stock remains undetermined.
- At closing, Q30 million of the Closing Consideration was placed in escrow to serve as partial security for the benefit of the Dresser-Rand Parties in respect of indemnification claims and the Adjustment. In addition to the dispute regarding the Adjustment, the Dresser-Rand Parties also have filed numerous indemnification claims against the Sellers under section 9.1 of the Agreement. The total amount of these indemnification claims is expected to be at least Q30 million, thus exhausting the escrow amount and not leaving any escrow amount as security for the Adjustment.
- The Dresser-Rand Parties are extremely concerned that, if Grajales or Centauro Capital is permitted to exercise complete control over the Closing Consideration that already has been paid, Grajales will not make a sufficient portion of that disputed consideration available to satisfy his and the Sellers’ obligations to the Dresser-Rand Parties. If Centauro Capital, the holder of approximately 3.2 million of the approximately 5 million shares of Dresser-Rand stock paid to the Sellers, is able to sell or otherwise control or encumber its Dresser-Rand stock or the cash proceeds thereof, the Centauro Parties, by being able to spend, conceal, or otherwise dispose of and dissipate the Closing Consideration in their possession, will be able to scuttle the process set forth in the Agreement and render the ongoing proceedings in Paris (hereinafter the “Paris Proceedings“) “fundamentally meaningless.”
- The only way to maintain the integrity of the Paris Proceedings is to assure that the Centauro Parties do not dispose of the Closing Consideration that is the subject of those proceedings. Therefore, the Dresser-Rand Parties seek injunctive relief barring the Centauro Parties from selling Dresser-Rand stock totaling a value of Q25,068,236.14, or if Centauro or Grajales already has sold or desires to sell such stock in
the future, requiring the Centauro Parties to place the proceeds of any such sale into escrow until final decisions are rendered in the Paris Proceedings. - Under a claim entitled “Preservation of Subject Matter of Pending Disputes,” the Dresser-Rand Parties allege that the Centauro Parties are about to perform an act that directly affects the subject matter of the Paris Proceedings. The injunctive relief sought by the Dresser-Rand Parties allegedly is required to protect the rights granted to the Dresser-Rand Parties under the Agreement and to preserve the status quo of the subject matter of the Paris Proceedings until final decisions are made in those proceedings and the parties’ disputes resolved in a meaningful way.
- Under the heading “Application for Temporary Injunction,” the Dresser-Rand Parties assert they are entitled to a temporary injunction granting the relief they seek because the Dresser-Rand Parties allegedly have a probable right to the relief they seek in the Paris Proceedings and because, absent such injunctive relief, they will suffer probable, imminent, and irreparable injury. Centauro Capital allegedly has taken steps to dissipate all of the Dresser-Rand stock it received as part of its Closing Consideration under the Agreement. The Dresser-Rand Parties assert, upon information and belief, that the Centauro Parties will complete this process well before a final determination is made in either of the Paris Proceedings.
- Under the heading “Permanent Injunction,” the Dresser-Rand Parties seek the same relief by means of a “permanent injunction” that they wish to be in effect until a final decision is rendered in both of the Paris Proceedings.
We analyze minimum contacts for specific jurisdiction on a claim-by-claim basis, unless all claims are based on the same alleged forum contacts. See Moncrief Oil Int‘l, Inc., 414 S.W.3d at 151. In the case under review, the Dresser-Rand Parties’ three claims are all based on the same purported contacts with Texas; therefore, we do not analyze minimum contacts for specific jurisdiction on a claim-by-claim basis. See Lisitsa, 419 S.W.3d at 672, 679 (Tex.App.-Houston [14th Dist.] 2013, pet. filed).
Although the Dresser-Rand Parties assert three claims, they seek the same injunctive relief under each and they allegedly seek to preserve the status quo pending resolution of both of the Paris Proceedings. Thus, the substance of each of the Dresser-Rand Parties’ three claims is an application for a temporary injunction preserving the status quo pending resolution of the Paris Proceedings.4
For a Texas court to be able to exercise personal jurisdiction over a nonresident based on specific jurisdiction, there must be a substantial connection between the nonresident‘s purposeful contacts with Texas and the operative facts of the litigation. See Id.
The evidence before the trial court for its special-appearance rulings does not show that any of these alleged steps or anticipated steps by either of the Centauro Parties occurred in Texas or would occur in Texas. Rather, the evidence shows that Grajales is a Spanish citizen living in Spain and that Centauro Capital is a Spanish company operating in Spain. The evidence also shows that Centauro Capital‘s Dresser-Rand shares are held by Merrill Lynch, and that Centauro Capital, when communicating with Merrill Lynch regarding its Dresser-Rand shares, deals exclusively with personnel located in Merrill Lynch‘s Madrid offices. On appeal, the Dresser-Rand Parties have not challenged the trial court‘s finding that Centauro Capital has never held or traded the Dresser-Rand shares or any other property through a United States bank or other entity. The special-appearance evidence shows that there is not a substantial connection between either of the Centauro Parties’ alleged purposeful contacts with Texas and the operative facts of this litigation.6 See id.; Transportes de Zima Real S.A. de C.V. v. Lizarraga, No. 14-13-00933-CV, 2014 WL 3512858, at *2-3 (Tex.App.-Houston [14th Dist.] July 15, 2014, no pet.) (mem. op.); Lamar v. Poncon, 305 S.W.3d 130, 138 (Tex.App.-Houston [1st Dist.] 2009, pet. denied).
The Dresser-Rand Parties assert that specific jurisdiction can be based on the following alleged purposeful contacts of the Centauro Parties with Texas: (1) the Centauro Parties allegedly participated in prolonged and deliberate contract negotiations with Texas-based Dresser-Rand, including two visits by Centauro Capital representatives, including Grajales, to
In the absence of such a substantial connection, the trial court did not err in granting the Centauro Parties’ special appearances.7 See Moki Mac River Expeditions, 221 S.W.3d at 585; Transportes de Zima Real S.A. de C.V., 2014 WL 3512858, at *2-3; Lamar, 305 S.W.3d at 138. Accordingly, we overrule the Dresser-Rand Parties’ third and sixth issues.8
IV. CONCLUSION
The operative facts of this litigation concern the steps allegedly taken by the Centauro Parties in the past to begin to “dissipate” all of the Dresser-Rand stock Centauro received as part of its Closing Consideration under the Agreement, as well as steps that the Centauro Parties may take in the future to complete this alleged dissipation. The special-appearance evidence shows that there is not a substantial connection between either of the Centauro Parties’ alleged purposeful contacts with Texas and the operative facts of this litigation. Absent such a substantial connection, the trial court did not err in granting the Centauro Parties’ special
Notes
KEM THOMPSON FROST
CHIEF JUSTICE
