EMO Trans, Inc. v. Inmobiliaria Axial, S.A. de C.V.

657 S.W.3d 772

EMO TRANS, INC., Appellant,

v.INMOBILIARIA AXIAL, S.A. DE C.V., Appellee.

No. 08-20-00200-CV

Court of Appeals of Texas, El Paso.

October 12, 2022

ATTORNEYS FOR APPELLANT: Elizabeth Z. Brabb, Michael W. Eady, William Mennucci, Thompson, Coe Cousins & Irons, L.L.P., 701 Brazos, Ste. 1500, Austin, TX 78701.

ATTORNEYS FOR APPELLEE: Jeffrie Lewis, Steve Chiscano, Gonzalez Chiscano Angulo & Kasson PC, 9601 McAllister Freeway, Ste. 401, San Antonio, TX 78216.

Before Rodriguez, C.J., Palafox, and Alley, JJ.

OPINION

GINA M. PALAFOX, Justice

This interlocutory appeal stems from the trial court's denial of Appellant EMO Trans, Inc.'s (EMO Trans) special appearance filed pursuant to Texas Rule of Civil Procedure 120a. Appellee Inmobiliaria Axial, S.A. de C.V. (Axial), the plaintiff in the underlying case, is the owner of a warehouse in Juarez, Mexico. Axial filed suit against EMO Trans and one of its employees to recover lease payments owed by warehouse tenant Empresa Mexicana Organizadora de Servicios Logisticos S. de R.L. (Empresa). EMO Trans objected to the trial court's exercise of general and specific jurisdiction, arguing it was not "at home" in Texas and Axial's claims did not arise out of or relate to any of EMO Trans' purposeful contacts with Texas. The trial court denied EMO Trans' special appearance. We reverse and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

EMO Trans is a New York corporation with its headquarters and principal place of business in Garden City, New York. Operating as a cargo logistics company, the business facilitates supply chain solutions for customers in the U.S. and other cities worldwide. The company maintains offices nationwide including three in Texas. One such office is located in El Paso. Out of EMO Trans' nearly four hundred employees in the United States, only thirty-eight are based in Texas. None of whom are officers of the corporation.

Axial is a Mexican corporation headquartered in Juarez, Mexico. Relevant to this appeal, Axial owns a warehouse in Juarez which was subject to two, sequential leases. In 2008, Axial leased warehouse space to Empresa (Lease 1) for a two-year term. After Lease 1 expired in 2010, Axial entered a second lease with Empresa for additional warehouse space (Lease 2). No party disputes that both leases were entered into by Axial and Empresa, and EMO Trans was not a named party to either lease.¹ EMO Trans acknowledges it stored its customers' cargo in the leased Mexican warehouse but it does not specify during which lease or for what duration.²

Axial alleges Empresa failed to make timely lease payments during three different time periods: July 2009 through October 2009; March 2012 through May 2012; and January 2014 through October 2016. Although many payments were ultimately resolved, Axial eventually sued Empresa in Mexico to recover unpaid rent and to evict the company from the Juarez warehouse. Axial successfully obtained a judgment of $1.6 million against Empresa, which it then domesticated in Texas. In February 2019, Axial demanded payment of the judgment from EMO Trans. When EMO Trans refused, Axial filed the underlying suit against EMO Trans and its employee Ernesto Yoshimoto.

Axial alleged that Yoshimoto, acting as the agent of EMO Trans, gave multiple assurances and representations that it would honor and comply with the "lease/financial obligations" of Empresa. Specifically, Axial asserted that EMO Trans' executives attended multiple meetings held at a Starbucks in El Paso. Axial contended the meetings concerned material matters pertaining to the warehouse lease in Mexico. Axial also contended that EMO Trans' Houston office was the point of contact for matters concerning the Mexican lease.³

Axial pleaded allegations of breach of contract, collateral estoppel, fraud, and joint enterprise, and sought actual, nominal, consequential, and exemplary damages. Following service of process, EMO Trans filed a special appearance. EMO Trans contended it was not subject to personal jurisdiction in the state of Texas as to the entire case and as to all claims asserted against it. Specifically, EMO Trans contended there was no statutory or constitutional basis for the trial court to exercise personal jurisdiction over it as to the claims asserted by the suit.

In support of its special appearance, EMO Trans provided the affidavit of Thomas Harlin, an Executive Vice President and Chief Financial officer of the corporation. Harlin averred that EMO Trans had never entered into an agreement of any kind with Axial, nor made any assurances or promises to it with respect to a lease that Axial had entered with Empresa. Harlin further averred that EMO Trans had no corporate ownership, no corporate affiliation, nor any affiliation with Empresa, and none of its corporate officers or employees were corporate officers or employees of Empresa. Harlin acknowledged, however, that EMO Trans had previously stored its customers' cargo in the Juarez warehouse that Empresa had leased from Axial.

When Axial served written discovery on EMO Trans and Yoshimoto, they both objected to all inquiries and requests for production. Axial filed a motion to compel urging it was entitled to discovery to the extent of EMO Trans' special appearance. Axial also responded to EMO Trans' special appearance and included an affidavit of Juan Alvarez, founder and sole administrator of Axial. Alvarez averred that, starting in 2008, he had an office in El Paso where he worked on a daily basis. To the extent he had phone communications and email exchanges with EMO Trans, he asserted those communications occurred in El Paso. Among other assertions, Alvarez claimed that EMO Trans' corporate executives made promises and assurances "that EMO Trans would honor and comply with lease obligations of its Mexican operations."

Following a non-evidentiary hearing, the trial court denied EMO Trans' special appearance, entering a general order without any associated findings of fact and conclusions of law. This interlocutory appeal then followed. See TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(a)(7) (authorizing interlocutory appeal from the denial of a special appearance).

II. DISCUSSION

In two issues, EMO Trans asserts the trial court erred in ruling it was subject to personal jurisdiction in Texas.

A. Standard of Review

Whether a court has personal jurisdiction over a defendant is a question of law. BMC Software Belgium, N.V. v. Marchand , 83 S.W.3d 789, 794 (Tex. 2002). To reach that question, however, a trial court must sometimes resolve questions of fact. Am. Type Culture Collection, Inc. v. Coleman , 83 S.W.3d 801, 806 (Tex. 2002). Thus, we review a trial court's denial of a special appearance under a mixed standard of review. Western Technologies, Inc. v. Omnivations II, L.L.C. , 583 S.W.3d 786, 791 (Tex. App.—El Paso 2019, no pet.). We defer to the trial court's resolution of contested facts so long as the findings are supported by legally and factually sufficient evidence. Id. We review de novo the trial court's application of those facts to the law. Id.

When no findings of fact and conclusions of law are filed by the trial court, as is applicable here, all relevant facts that are necessary to support the judgment and supported by the evidence are implied. Old Republic Nat'l Title Ins. Co. v. Bell , 549 S.W.3d 550, 558 (Tex. 2018) ; I & JC Corp. v. Helen of Troy L.P. , 164 S.W.3d 877, 883 (Tex. App.—El Paso 2005, pet. denied). When the appellate record includes the reporter's record and clerk's record, the implied findings are not conclusive and may be challenged for legal and factual sufficiency. I & JC Corp. , 164 S.W.3d at 883-84.

Initially, the plaintiff bears the burden to plead sufficient allegations to bring the nonresident defendant within the provisions of the Texas long-arm statute. Kelly v. Gen. Interior Constr., Inc. , 301 S.W.3d 653, 658 (Tex. 2010). This notice-pleading requirement is "minimal" and "can be satisfied with an allegation that the nonresident defendant is doing business in Texas or committed tortious acts in Texas." Gaddy v. Fenenbock , No. 08-22-00041-CV, 652 S.W.3d 860, 871 (Tex. App.—El Paso July 27, 2022, no pet.). Once the plaintiff satisfies the initial burden, the defendant challenging jurisdiction has the burden to negate all bases for personal jurisdiction and focus its arguments to allegations in plaintiff's pleading. Omnivations , 583 S.W.3d at 791. "Because the plaintiff defines the scope and nature of the lawsuit, the defendant's corresponding burden to negate jurisdiction is tied to the allegations in the plaintiff's pleading." Kelly , 301 S.W.3d at 658.

Personal jurisdiction can be negated on either a factual or legal basis. Id. at 659. Factually, "the defendant can present evidence that it has no contacts with Texas, effectively disproving the plaintiff's allegations." Id. The defendant may attack the legal basis for personal jurisdiction in any of the following ways: challenging the legal sufficiency of the jurisdictional facts; showing that its contacts do not rise to the level of purposeful availment; for specific jurisdiction, that the plaintiff's claims do not arise from the defendant's contacts; or that the exercise of jurisdiction offends the traditional notions of fair play and substantial justice. If a nonresident defendant has presented evidence to disprove the jurisdictional allegations, the plaintiff must respond with evidence establishing personal jurisdiction over the nonresident defendant. Id.

B. Applicable law

A Texas court may exercise personal jurisdiction over a nonresident defendant when doing so is permitted by the Texas long-arm statute and the exercise of jurisdiction is consistent with federal and state due-process guarantees. Bell , 549 S.W.3d at 558 ; TV Azteca v. Ruiz , 490 S.W.3d 29, 36 (Tex. 2016) ; see also TEX. CIV. PRAC. & REM. CODE ANN. §§ 17.041 -.045 (long-arm statute). Under the long-arm statute, a nonresident is present in Texas...