NO. 07-04-0037-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL D
OCTOBER 1, 2004
______________________________
DONALD S. BRYANT, JR. IND. AND AS TRUSTEE OF THE
BRYANT FAMILY TRUST, APPELLANT
V.
NICHOLAS ALLEN ROBLEE, A/K/A NICHOLAS RICHMOND,
NICHOLAS A. RICHMOND, AND THOMAS E. ROBLEE; PREMIER MARKETING
& INVESTMENTS, INC., A/K/A PREMIER MARKETING AND INVESTMENT
COMPANY, INC.; JEWELL MEYER; FIRST REPUBLIC BANK; EVERETT JUNG;
CALIFORNIA FEDERAL BANK; JAE K. JUNG; LEE MCMILLIAN;
AND JOSEPH SARANELLO, APPELLEES
_________________________________
FROM THE 72ND DISTRICT COURT OF LUBBOCK COUNTY;
NO. 2002-520,479; HONORABLE J. BLAIR CHERRY, JUDGE
_______________________________
Before QUINN and REAVIS and CAMPBELL, JJ.
OPINION
Donald S. Bryant, Jr., acting individually and as trustee for the Bryant Family Trust,
brings this appeal from an order granting a special appearance filed by appellee, First
Republic Bank. We will affirm.
The record before us shows Nicholas Roblee, a California resident, operated
Premier Marketing & Investments, Inc., a California corporation. Appellant Bryant, a Texas
resident, transferred $500,000 to Premier in the spring and summer of 2002 for investment
purposes. Bryant brought suit in late 2002. His petition alleged Roblee and Premier failed
to perform as agreed and failed to return the funds on his request. The petition also
alleged Roblee and Premier made false representations concerning return of the money
for the purpose of delaying his initiation of legal action against them.
Bryant also named other defendants, including First Republic Bank and one of its
employees, Everett Jung. His first amended petition alleged Jung improperly had
permitted Roblee and others to exercise authority over funds held in Premier’s accounts1
at the bank, and alleged First Republic was liable for Jung’s actions. First Republic, a
Nevada banking corporation, filed a special appearance pursuant to Rule of Civil
Procedure 120a, in which it asserted it was not, and had never been, a Texas resident and
was not otherwise amenable to process issued by Texas courts. Following a hearing, the
court signed an order granting First Republic’s special appearance. It then severed the
claims against the other parties, creating the final judgment from which Bryant now
appeals.
1
Premier had two accounts at First Republic, opened at a First Republic branch in
Los Angeles. Bryant’s suit does not allege the funds he transferred to Premier ever were
deposited in First Republic. The evidence indicates both accounts at First Republic were
opened early in 2001 and closed later that same year, several months before Bryant first
invested funds with Premier.
-2-
Bryant presents four issues, all challenging the sustention of First Republic’s special
appearance. Rule of Civil Procedure 120a provides for a special appearance by which a
party may object to the court’s jurisdiction over the party on the ground that it is “not
amenable to process issued by the courts of this State.” Tex. R. Civ. P. 120a; see Hotel
Partners v. KPMG Peat Marwick, 847 S.W.2d 630 (Tex.App.–Dallas 1993, writ denied).
Sections 17.041-.045 of the Civil Practice and Remedies Code provide for service of
process on nonresident defendants “doing business” in our state. Tex. Civ. Prac. & Rem.
Code Ann. § 17.042 (Vernon 2002). This provision of our long-arm statute extends
personal jurisdiction of Texas courts "as far as the federal constitutional requirements of
due process will permit." BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795
(Tex. 2002); see American Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806
(Tex. 2002).
The exercise of personal jurisdiction over nonresident defendants is constitutional
when two conditions are met: (1) the defendant has established minimum contacts with
the forum state, and (2) the exercise of jurisdiction comports with traditional notions of fair
play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66
S.Ct. 154, 90 L.Ed. 95 (1945). Purposely established minimum contacts may give rise in
a particular case to jurisdiction that is specific or general. BMC Software, 83 S.W.3d at
795. When specific jurisdiction is asserted, the cause of action must arise out of, or relate
to, the nonresident defendant's contact with the forum state. Id. at 796. Pursuant to
general jurisdiction, a forum may exercise personal jurisdiction over a defendant even with
respect to a cause of action not arising from or relating to the defendant’s activities within
-3-
the forum state, based on the defendant’s “continuous and systematic” contacts with the
forum state. American Type Culture, 83 S.W.3d at 807; BMC Software, 83 S.W.3d at 796.
It requires “a showing that the defendant conducted substantial activities within the forum,
a more demanding minimum contacts analysis than for specific jurisdiction.” Id. at 797.
Determination of what constitutes continuous and systematic contacts can be made only
on a case-by-case basis. American Type Culture, 83 S.W.3d at 810. A defendant should
not be subject to a foreign court's jurisdiction based upon "random," "fortuitous" or
"attenuated" contacts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L.Ed.2d
528, 105 S.Ct. 2174 (1985).
A defendant challenging, by special appearance, a Texas court's personal
jurisdiction over it must negate all jurisdictional bases alleged by the plaintiff. American
Type Culture, 83 S.W.3d at 807; Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203
(Tex. 1985). The question whether a court has personal jurisdiction over a defendant is
one of law. American Type Culture, 83 S.W.3d at 805-06; BMC Software, 83 S.W.2d at
794. When the challenge to a court’s jurisdiction over a nonresident defendant requires
factual determinations that are contested on appeal, a court of appeals reviews those
determinations under the standards for legal and factual sufficiency. BMC Software, 83
S.W.2d at 794. In this case, the jurisdictional facts are not disputed, so we review de novo
the trial court’s application of the law to the established facts. See C-Loc Retention
Systems, Inc. v. Hendrix, 993 S.W.2d 473, 476 (Tex.App.–Houston [14th Dist.] 1999, no
pet.)
-4-
Bryant does not argue his claims against First Republic arise from its contacts with
Texas. He seeks a finding of general jurisdiction over First Republic on the basis of what
he alleges are its continuing and systematic contacts with our state.2 No testimony was
presented at the hearing on the special appearance. The evidence includes an affidavit
of First Republic’s chief operating officer supporting its special appearance motion and
First Republic’s responses to Bryant’s interrogatories.
First Republic’s principal office is in Las Vegas, Nevada, and its executive offices
are in San Francisco. As noted, Premier had two accounts at First Republic, opened at
a First Republic branch in Los Angeles. First Republic has no Texas branch, office or other
place of business, and no employees in Texas. It does not have a Texas agent for service
of process. Its officer’s affidavit states First Republic has made “an occasional loan” to a
Texas resident, but does not solicit business in Texas. The interrogatory responses reveal
First Republic held, at the time of the response, 24 loans made during the past five years
to customers with Texas mailing addresses, in the total principal amount of some
$17,218,178, and had a total of 37 such loans during that period.3 First Republic made
more than 12,000 loans during that period, and had 7340 open loans on its balance sheet
at the time of the response. It held real estate liens on eleven properties located in Texas,
2
Bryant’s first amended petition also alleged another employee of First Republic
made a false representation to him during a telephone conversation, but he does not
assert it as a basis for personal jurisdiction over First Republic.
3
First Republic’s responses also stated, in response to an interrogatory asking the
“number of loans made within the past five years which have been paid off by Texas
residents,” that First Republic had “closed” 15 loans over the past 5 years that were made
to customers with a mailing address in Texas.
-5-
securing loans in the original principal amounts of about $10,000,000. In addition, First
Republic released five liens on Texas properties within the past five years. First Republic
does not direct any advertising to Texas, but does advertise in national publications and
maintain an Internet web site accessible from Texas.
Bryant’s brief emphasizes First Republic’s ownership of loans secured by liens on
real property in Texas. He cites no authority in support of his premise that a nonresident
corporation’s ownership of loans secured by liens on Texas real property constitutes
continuous and systematic contacts with our state authorizing the exercise of personal
jurisdiction. Ownership of real property alone does not provide contacts sufficient to
establish general jurisdiction over a nonresident corporation. Potkovick v. Regional
Ventures, Inc., 904 S.W.2d 846, 847 (Tex.App.–Eastland 1995, no writ) (foreign
corporation’s ownership of real property sufficient basis for jurisdiction when property is
subject of suit); see Shaffer v. Heitner, 433 U.S. 186, 208, 97 S. Ct. 2569, 53 L.Ed.2d 683
(1977); Goodenbour v. Goodenbour, 64 S.W.3d 69, 79 (Tex.App.--Austin 2001, pet.
denied) (specific jurisdiction case). Merely contracting with a Texas resident is not
sufficient. Magnolia Gas Co. v. Knight Equip. & Manufac. Corp., 994 S.W.2d 684, 691
(Tex.App.–San Antonio 1998, no pet.). Nor is correspondence with state residents.
National Indus. Sand Ass'n v. Gibson, 897 S.W.2d 769, 774 (Tex. 1995). Likewise, we find
that a nonresident corporation’s ownership of loans secured by liens on Texas real
property does not alone give our courts general jurisdiction over the corporation.4
4
A conclusion that First Republic’s mere taking of liens on Texas real property does
not constitute minimum contacts forming a basis for the exercise of personal jurisdiction,
and thus does not, standing alone, constitute “doing business” under the long-arm statute,
-6-
Bryant argues that First Republic has availed itself of the protections of our laws by
taking liens on Texas real property because it would utilize Texas law in foreclosure of the
liens. A similar contention could be made with respect to the ownership of legal title to real
property. Moreover, we have no evidence First Republic ever has foreclosed a lien on
property in Texas. That the nonresident might in the future find it necessary to take action
under Texas law to protect or enforce its rights in its property is not evidence of continuous
and systematic contacts with our state at present.
Bryant also argues the quality of a nonresident defendant’s contacts, not the
number, should govern the minimum contacts analysis, and that the analysis here should
not be determined by the evidence that loans with ties to Texas represent only a small
fraction of First Republic’s loan portfolio. While we must agree with that proposition, see
American Type Culture, 83 S.W.3d at 806 (noting the quality and nature of contacts, rather
than the number, to be important to minimum contacts analysis), and while the total
principal amount of First Republic’s loans with ties to Texas is not inconsequential, the
evidence concerning the existence of the loans does not tell much about the quality and
nature of First Republic’s contacts with our state. The evidence does not show where or
in what manner the loans were made, nor does it characterize the loan customers as
individuals or entities. It does not show whether the loans secured by Texas real property
are the same loans as those made to customers having a mailing address in Texas at the
is consistent with provisions of Texas corporation law, by which foreign corporations are
not deemed to be transacting business in our state and required to obtain a certificate of
authority when they engage in transactions such as creating, acquiring or enforcing
security interests in real property. See Tex. Bus. Corp. Act Ann. art. 8.01, §§ B(7), B(8),
B(12) (Vernon 2003).
-7-
time of the interrogatory responses. As noted, the evidence contains First Republic’s
acknowledgment that it has made “an occasional” loan to a resident of Texas, but the
record does not equate a customer’s having a Texas mailing address with Texas
residency. In short, the record does not demonstrate continuous and systematic contacts
between First Republic and our state so as to permit our courts to exercise general
jurisdiction over it. It is therefore unnecessary for us to address Bryant’s arguments that
the exercise of jurisdiction over First Republic in this case would be consistent with, and
would not offend, traditional notions of fair play and substantial justice. We overrule
Bryant’s issues, and affirm the order and judgment of the trial court.
James T. Campbell
Justice
-8-