Rieder v. Meeker

ANTHONY A. RIEDER, ED RAPEE III, AND CADBURY SOLUTIONS, LLC, Appellants v. ALAN MEEKER, AppelleeandANTHONY A. RIEDER AND ED RAPEE III, Appellants v. CQUENTIA SERIES, LLC, AppelleeandKENNY WOODS, Appellant v. ANTHONY A. RIEDER, ED RAPEE III, AND CADBURY SOLUTIONS, LLC, Appellees

No. 02-17-00176-CV

Court of Appeals Second Appellate District of Texas at Fort Worth

April 22, 2021

On Appeal from the 342nd District Court Tarrant County, Texas

Trial Court No. 342-288556-16

Before Sudderth, C.J.; Bassel and Walker, JJ.

Memorandum Opinion by Justice Bassel MEMORANDUM OPINION ON REMAND

I. Introduction

This special-appearance appeal is on remand from the Supreme Court of Texas after that court granted the petition for review filed by Appellants and Appellees Anthony A. Rieder, Ed Rapee III, and Cadbury Solutions, LLC (collectively, Defendants) and reversed this court's judgment. See Rieder v. Woods, 603 S.W.3d 86, 102 (Tex. 2020). Defendants filed a special appearance contesting the trial court's personal jurisdiction over them for the claims brought against them by Cross-Appellant Kenny Woods, and they supplemented their special appearance to address the claims brought against them by Appellees Alan Meeker and CQuentia Series, LLC (collectively, Intervenors), who had intervened in Woods's suit. The trial court granted the special appearance as to Woods but denied it as to Meeker and CQuentia. On appeal, this court held that an agreement with a forum selection clause between Cadbury and CQuentia should be read together with another agreement as a single, unified instrument and that the forum selection clause applied to all claims against Defendants. The supreme court reversed this court's judgment and remanded the case to this court to address the parties' issues that we had not previously reached. Id. Those unaddressed issues are (1) whether Defendants are estopped from challenging enforcement of the forum selection clause against them by nonsignatories (Woods's fourth issue), and if not, (2) whether Defendants' contacts with Texas give rise to personal jurisdiction (Woods's fifth issue and Defendants' first two issues), (3) whether justice and equitycounsel against the exercise of jurisdiction over Defendants (Woods's sixth issue), (4) whether Defendants made a general appearance as to all parties and claims (Woods's seventh issue), and (5) whether CQuentia's claim against Cadbury (as brought by Meeker) should be severed and abated (Defendants' third issue). Because we hold that the trial court has personal jurisdiction only over Cadbury for one of the claims against it—for Meeker's claim on behalf of CQuentia for a declaratory judgment regarding his right to terminate the agreement between CQuentia and Cadbury—but does not have jurisdiction over any of the Defendants for the remaining claims, we reverse in part and remand the one claim against Cadbury.

II. Factual and Procedural Background

From the parties' pleadings and jurisdictional evidence, we draw the following facts. Wisconsin residents Rieder and Rapee formed Care Integrations LLC for the purpose of providing telemedicine services. After a consultant introduced them to Woods, they discussed hiring Woods as a consultant as well.

Woods had a business relationship with Meeker, a Texas resident and CEO of CQuentia, and Woods told Meeker about Rieder and Rapee's telemedicine business. After that discussion, Woods went to Rieder and Rapee with the idea that they work with CQuentia to distribute its genetic-testing services.¹

Rieder, Rapee, and Woods purportedly formed Cadbury as a Nevada limited liability company by executing the Cadbury Operating Agreement, effective as of February 1, 2016. Also on February 1, 2016, Cadbury and CQuentia signed the "Declaration of Series for CQuentia Series, LLC: Cadbury Solutions Series" (the CQ Agreement), which formed a series limited liability company for the purpose of selling and distributing DNA-testing services. See Tex. Bus. Orgs. Code Ann. § 101.601. Woods signed on behalf of Cadbury, and Meeker signed for CQuentia. Under that agreement, CQuentia would perform laboratory services at its Tennessee lab (or other locations as determined by CQuentia), and Cadbury would provide marketing and sales for those services. Meeker and Woods were listed as managers of the entity formed under the agreement. The agreement contained a forum selection clause:

ANY CLAIMS OR CONTROVERSIES UNDER OR RELATED TO THIS AGREEMENT SHALL BE EXCLUSIVELY DETERMINED IN THE STATE AND/OR FEDERAL COURTS LOCATED IN TARRANT COUNTY, TEXAS, TO WHOSE JURISDICTION EACH PARTY IRREVOCABLY CONSENTS.

The parties' new business relationship soon fell apart. In September 2016, Meeker sent a letter to Woods, Rieder, and Rapee telling them that CQuentia had, in its sole discretion, terminated the CQ Agreement with Cadbury but that CQuentia wouldaccept proposals from any of the three who wanted to continue working with CQuentia. In response, Cadbury's Wisconsin attorney sent a letter maintaining that the CQ Agreement had not been properly terminated and that none of Cadbury's members could submit a proposal to CQuentia without violating their fiduciary duties to Cadbury and the terms of the Cadbury Operating Agreement. The attorney also sent a letter to Woods telling him that Cadbury would take legal action against him if he violated his obligations to Cadbury. Woods took that letter to CQuentia, and CQuentia's general counsel responded with a letter to Cadbury's attorney stating that the CQ Agreement had been properly terminated and that Woods owed no fiduciary or contractual obligations to Cadbury.

The next month marked the beginning of a series of lawsuits. First, Woods sued Defendants in Tarrant County, Texas, for fraud, breach of contract, and tortious interference, and for declarations that Cadbury was not a valid entity and had never approved the CQ Agreement. Defendants responded by filing a special appearance and, alternatively, motion to dismiss for forum non conveniens. In November 2016, Cadbury sued Woods and Meeker in Wisconsin. Cadbury sued Woods for breach of the Cadbury Operating Agreement; breach of the covenant of good faith and fair dealing and his fiduciary duty to Cadbury; and usurpation of Cadbury's corporate opportunities, and it sought declarations that Cadbury is a viable entity and that the Cadbury Operating Agreement is valid. Against Meeker, Cadbury pleaded claims for tortious interference with the CQ Agreement and Cadbury's prospective contracts andfor injuring Cadbury's business in violation of a Wisconsin statute. Meeker and CQuentia then each filed a plea in intervention in the Texas proceeding originally filed by Woods. Meeker sought two declaratory judgments: (1) that he and any entity he operates can utilize Woods's services without violating the Cadbury Operating Agreement and incurring contractual liability to any of the Defendants and (2) that as CQuentia's manager, he could terminate the CQ Agreement. CQuentia sued Rieder and Rapee² for fraud, fraudulent inducement, and negligent misrepresentation.

Shortly after the pleas in intervention were filed, Defendants filed an amended special appearance; while the filing acknowledged that "CQuentia ha[d] sought to intervene" to sue Rieder and Rapee and asserted that the intervention did not "invoke[ ] the forum selection clause" of the CQ Agreement, it did not specifically address Intervenors' jurisdictional allegations or explain why those allegations did not support jurisdiction over Defendants. Defendants later filed a supplemental special appearance in which they argued that they did not need to file a separate special appearance as to Intervenors because the amended special appearance's assertions disputing jurisdiction applied equally to Intervenors' alleged bases for jurisdiction, but also in which, out of an abundance of caution, they supplemented their amended special appearance tospecifically address why a Texas court lacked jurisdiction to hear Intervenors' claims against them.

In the time period between Defendants' amending their special appearance and their supplementing it, Meeker attempted to conduct discovery on the merits. In response, Defendants filed two motions entitled "Subject to Their Special Appearance, Defendants['] Motion to Quash" and "Subject to Their Special Appearance, Defendants['] Objections to . . . Meeker's Written Discovery, Motion for Protective Order, and Motion to Quash." The motions argued that Meeker's discovery requests were "unrelated to the jurisdictional issues" raised in their special appearance and instead related "to the heart of" Meeker's claims and that the requested discovery was therefore not available under Rule 120a. See Tex. R. Civ. P. 120a. After a hearing, the trial court granted the motions and limited discovery to matters related to jurisdiction. Relying in part on emails produced in that discovery, Woods and Intervenors filed responses to Defendants' special appearance.

At the hearing on the special appearance, the trial court found that it had no personal jurisdiction over Defendants for Woods's claims but that it did have jurisdiction over them for Intervenors' claims based on "specific jurisdictional facts . . . of allegations against [Rieder and Rapee for] making representations directed toward Texas [via telephone calls] that are alleged to be fraudulent." The trial court subsequently signed an order denying the special appearance and forum non conveniensmotion as to Intervenors' claims but granting it as to Woods's claims and dismissing his claims with prejudice.³

Woods and Defendants appealed. Defendants raised three issues, while Woods asserted eight. In our previous opinion, based on our conclusion that the Cadbury Operating Agreement and the CQ Agreement should be read together, we held that the CQ Agreement's forum selection clause was enforceable by and against the nonsignatory parties under the "closely related" and "trans...