Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-14-00827-CV
PT INTERMEDIATE HOLDING, INC. and Personal Touch Holding Corp.,
Appellants
v.
LMS Consulting
LMS CONSULTING, LLC,
Appellee
From the 45th Judicial District Court, Bexar County, Texas
Trial Court No. 2014-CI-00450
Honorable Peter Sakai, Judge Presiding
Opinion by: Karen Angelini, Justice
Sitting: Karen Angelini, Justice
Luz Elena D. Chapa, Justice
Jason Pulliam, Justice
Delivered and Filed: September 16, 2015
AFFIRMED
In this interlocutory appeal, PT Intermediate Holding, Inc. and Personal Touch Holding
Corp. (collectively, “appellants”) challenge the trial court’s orders denying their special
appearances in a suit brought against them by LMS Consulting, LLC (“appellee”). We affirm.
BACKGROUND
PT Intermediate Holding is the parent corporation of two Texas corporations, PT Home
Services of Dallas, Inc., and PT Home Services of San Antonio, Inc. (collectively, “the Texas
entities”). The Texas entities provide home health care services in Texas.
04-14-00827-CV
Personal Touch Holding Corp. is the parent company of PT Intermediate Holding, and the
“grandparent” of the Texas entities.
Appellee provides recruiting and staffing consulting services to businesses. In 2011 and
2012, appellee entered into more than twenty contracts under which it agreed to provide employee
recruiting and staffing to the Texas entities and related health care agencies located in Weslaco
and El Paso, Texas.
In 2014, appellee brought claims against the Texas entities and appellants for breach of
contract and tortious interference with a contract. As to its breach of contract claims, appellee
alleged it had entered into a series of contracts with a business known as “Personal Touch Home
Care, Inc.” to provide recruiting and staffing services to the Texas entities and related health care
agencies located in Weslaco and El Paso, and the Texas entities breached their obligations to pay
appellee under the contracts. Appellee further alleged that because of the control appellants
exercised over the Texas entities, including control over the decisions to breach the contracts in
question, appellants were liable for damages arising from the breach. As to its tortious interference
claims, appellee alleged it had valid contracts with several third parties, and that the Texas entities
and appellants willfully and intentionally interfered with those contracts by soliciting the third
parties to terminate their contracts with appellee. Appellee acknowledged in its petition that
appellants were nonresidents of Texas; however, appellee alleged that the trial court had personal
jurisdiction over appellants because they had committed an intentional tort that was purposefully
directed toward Texas, and because they had exerted control over the business operations of the
Texas entities, and therefore, the activities of the Texas entities could be imputed to appellants for
purposes of establishing minimum contacts.
Appellants, who are not Texas residents, filed special appearances claiming the trial court
had no personal jurisdiction over them. Appellants asserted that they did not have sufficient
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contacts with Texas to support the exercise of either specific or general jurisdiction over them; that
the contacts or activities of the Texas entities could not be imputed to them; and that the exercise
of personal jurisdiction over them would offend traditional notions of fair play and substantial
justice. Appellee opposed the special appearances, arguing that the trial court had both specific
and general jurisdiction over them because appellants were the alter egos of the Texas entities,
controlling their internal business operations and affairs. The trial court held a hearing on the
matter. The argument and evidence at the hearing centered on whether the contacts or activities of
the Texas entities could be imputed to appellants for purposes of establishing personal jurisdiction.
The trial court denied the special appearances. 1 Although requested, the trial court filed no findings
of fact and conclusions of law. This appeal ensued.
STANDARD OF REVIEW
Because personal jurisdiction over a nonresident defendant is a question of law, we review
the trial court’s ruling on a special appearance de novo. Moki Mac River Expeditions v. Drugg,
221 S.W.3d 569, 574 (Tex. 2007). When the trial court files no findings of fact and conclusions of
law, we imply “all facts necessary to support [the ruling] and supported by the evidence.” BMC
Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).
APPLICABLE PERSONAL JURISDICTION LAW
Personal jurisdiction involves a court’s power to bind a particular person or party to a
judgment. CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex. 1996). It flows from the Due Process
Clause of the U.S. Constitution and protects a party from being bound to the judgment of a forum
with which it has established no meaningful contacts, ties, or relations. Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 471-72 (1985).
1
LMS Consulting, LLC also sued Personal-Touch Home Care of N.Y., Inc. The trial court granted the special
appearance filed by Personal-Touch Home Care of N.Y., and the ruling was not appealed.
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Texas courts may assert personal jurisdiction over a nonresident defendant if the Texas
long-arm statute authorizes jurisdiction and the exercise of jurisdiction is consistent with federal
and state due process standards. Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d
333, 337 (Tex. 2009). The Texas long-arm statute permits Texas courts to exercise jurisdiction
over a nonresident defendant who “does business” in Texas. TEX. CIV. PRAC. & REM. CODE ANN.
§ 17.042 (West 2015). The statute lists some activities that constitute “doing business,” but the list
is not exclusive. BMC Software, 83 S.W.3d at 795. The statute’s broad doing-business language
allows the statute to reach as far as the federal constitutional requirements of due process will
allow. Moki Mac, 221 S.W.3d at 575.
The exercise of jurisdiction 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. Retamco, 278 S.W.3d at 338.
To establish minimum contacts, a defendant must “purposefully avail” itself of the privilege of
conducting activities within Texas, thereby invoking the benefits and protections of its laws. Id.
The defendant’s activities, whether they consist of direct acts within Texas or conduct outside
Texas, must justify a conclusion that the defendant could reasonably anticipate being haled into a
Texas court. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002).
A nonresident defendant’s minimum contacts may give rise to either specific or general
jurisdiction. Id. Specific jurisdiction exists if the defendant’s liability arises from or is related to
an activity conducted within the forum. BMC Software, 83 S.W.3d at 796. In a specific jurisdiction
inquiry, courts focus on the relationship among the defendant, the forum, and the litigation.
Retamco, 278 S.W.3d at 338. A general jurisdiction inquiry is very different from a specific
jurisdiction inquiry. PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 168 (Tex.
2007). General jurisdiction exists if a defendant’s contacts with the forum are continuous and
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systematic. Id. at 169. General jurisdiction requires a showing that the defendant conducted
substantial activities within the forum, and permits the forum to exercise personal jurisdiction over
the defendant even if the cause of action did not arise from or relate to the defendant’s activities
in the forum. CSR Ltd., 925 S.W.2d at 595.
Courts sometimes have personal jurisdiction over a nonresident defendant under an alter
ego theory. This occurs when a foreign corporation and its subsidiary that does business in Texas
have a relationship that allows a court to impute the subsidiary’s “doing business” in Texas to the
corporation. BMC Software, 83 S.W.3d at 798; Jones v. Beech Aircraft Corp., 995 S.W.2d 767,
771 (Tex. App.—San Antonio 1999, pet. dism’d w.o.j.) (“[I]n some circumstances, a close
relationship between a parent and its subsidiary may justify a finding that the parent ‘does
business’ in a jurisdiction through the local activities of its subsidiaries.”), disapproved of on other
grounds, BMC Software, 83 S.W.3d at 794 n.1. The rationale for exercising such jurisdiction is
that when a parent corporation exerts such domination and control over its subsidiary, they do not
in reality constitute separate and distinct corporate entities but are one and the same corporation
for purposes of jurisdiction. BMC Software, 83 S.W.3d at 798. To “fuse” a parent company and its
subsidiary for jurisdictional purposes, a plaintiff must prove the parent controls the internal
business operations and affairs of the subsidiary to the extent that the two entities effectively cease
to be separate. Id. at 799.
SPECIAL APPEARANCE BURDENS AND PROCEDURES
In a special appearance, the plaintiff has the initial burden of pleading allegations sufficient
to bring a 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). When the plaintiff has pleaded sufficient
jurisdictional allegations, the nonresident defendant seeking to avoid the court’s jurisdiction has
the burden of negating all bases of jurisdiction alleged by the plaintiff. Id. If the nonresident
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defendant produces evidence negating personal jurisdiction, the burden then returns to the plaintiff
to show as a matter of law that the court has personal jurisdiction over the plaintiff. Oryx Capital
Int’l Inc. v. Sage Apartments, L.L.C., 167 S.W.3d 432, 441 (Tex. App.—San Antonio 2005, no
pet.). However, when a plaintiff alleges that personal jurisdiction exists under an alter ego theory,
it has the burden of proving this allegation. BMC Software, 83 S.W.3d at 798-99. A court cannot
find personal jurisdiction based on an alter ego theory unless the plaintiff proves its alter ego
theory. See id. at 798. A trial court determines a special appearance from the pleadings, discovery,
stipulations, affidavits, attachments, and oral testimony. TEX. R. CIV. PROC. 120a(3).
ARGUMENTS PRESENTED ON APPEAL
In their briefing, appellants argue the trial court erred in denying their special appearances
because appellee failed to establish that the trial court had specific jurisdiction or general
jurisdiction over them. According to appellants, appellee failed to meet its burden to establish that
the appellants controlled the internal business operations and affairs of the Texas entities, thereby
allowing the activities of the Texas entities to be imputed to the appellants for the purpose of
establishing minimum contacts with Texas. Appellants further argue that the trial court erred in
denying their special appearances because the exercise of personal jurisdiction over them would
offend traditional notions of fair play and substantial justice.
On the other hand, appellee maintains that the trial court properly denied appellants’ special
appearances. Appellee contends the appellants failed to negate all potential bases for jurisdiction
asserted in its pleadings. Appellee also contends it met its burden to establish that the appellants
controlled the internal business operations and affairs of the Texas entities, and therefore, the
activities of the Texas entities were properly imputed to the Texas entities for purposes of
establishing minimum contacts with Texas. Appellee finally contends that appellants failed to
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establish that the exercise of personal jurisdiction over them would offend traditional notions of
fair play and substantial justice.
ALTER EGO THEORY
We first consider whether appellee met its burden to establish its alter ego theory for
exercising personal jurisdiction over appellants. If appellee met its burden to show that appellants
controlled the internal business operations and affairs of the Texas entities, then the activities of
the Texas entities can be imputed to appellants for the purpose of establishing minimum contacts
with Texas.
The crux of appellants’ argument is that (1) they did not control the Texas entities, and (2)
even if they did control the Texas entities, the level of control was insufficient to establish personal
jurisdiction. Under the applicable standard of review, we must imply all facts necessary to support
the trial court’s ruling and supported by the evidence. BMC Software, 83 S.W.3d at 795.
As previously mentioned, to “fuse” the parent company and its subsidiary for jurisdictional
purposes, a plaintiff must prove that the parent controls the internal business operations and affairs
of the subsidiary. BMC Software, 83 S.W.3d at 799. The degree of control the parent exercises,
however, must be greater than that normally associated with common ownership and directorship.
See PHC-Minden, 235 S.W.3d at 175; BMC Software, 83 S.W.3d at 799. The evidence must show
that the two entities cease to be separate so that the corporate fiction should be disregarded to
prevent fraud or injustice. BMC Software, 83 S.W.3d at 799. Examples of typical or appropriate
parental involvement include monitoring the subsidiary’s performance, supervision of the
subsidiary’s finance and capital budget decisions, and articulation of general policies. See PHC–
Minden, 235 S.W.3d at 176. The type of parental control that confers jurisdiction is evidenced by
a “plus” factor: “something beyond the subsidiary’s mere presence within the bosom of the
corporate family.” Id. There is no formula for determining whether the plaintiff has met its burden
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of establishing that the parent controls the internal business operations and affairs of the subsidiary.
Instead, courts examine all relevant facts and circumstances surrounding the operations of the
parent and the subsidiary. Id. at 173.
Texas appellate courts have upheld jurisdictional alter ego findings by trial courts under a
variety of circumstances. See Landmark Land Co., Inc. v. Bennett, No. 13-12-00117-CV, 2012
WL 4335294, at *9 (Tex. App.—Corpus Christi 2012, pet. denied); Capital Tech. Information
Serv., Inc. v. Arias, 270 S.W.3d 741, 754-55 (Tex. App.—Dallas 2008, pet. denied); Cappuccitti
v. Gulf Industr. Prod., Inc., 222 S.W.3d 468, 483 (Tex. App.—Houston [1st Dist.] 2007, no pet.).
For example, in Landmark Land, the appellate court concluded that there was some evidence that
a nonresident parent corporation and its Texas subsidiary were fused for jurisdictional purposes.
2012 WL 4335294, at *9. Although the evidence indicated the parent and subsidiary maintained
separate books and conducted separate meetings, the evidence also showed the subsidiary was
wholly-owned by the parent, the subsidiary’s franchise tax report showed it shared the same
address with its nonresident parent, and its marketing flyers and website marketing deliberately
obfuscated any distinction between the two entities. Id. at *8. In addition, the evidence showed
that the parent exercised greater than normal control over its subsidiary in that (1) the parent made
the decision that the subsidiary would purchase land and develop it as a golf course, and then
approved decisions regarding golf course development; (2) the parent regularly held its
shareholder meetings at a property owned and operated by its subsidiary; and (3) the parent’s vice
president oversaw the subsidiary’s development project in his capacity as the parent’s vice
president. Id.
Similarly, in Cappuccitti, the appellate court concluded that an individual, a parent
company, and a subsidiary were alter egos of one another and that the trial court had personal
jurisdiction over all of them. 222 S.W.3d at 484. The facts in that case showed that Cappuccitti,
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who was not a Texas resident, incorporated two Bahamian corporations. Cappuccitti owned 100%
of the parent company, and the parent company owned 90% of the subsidiary. Id. at 482. The
subsidiary formed a business relationship with a Texas corporation, and ultimately entered into a
contract with it. Id. at 475. When a disagreement arose, the Texas corporation terminated the
contract for non-performance, and filed suit against the subsidiary, its parent company, and
Cappuccitti. Id. at 475-78. The parent company and Cappuccitti filed special appearances, which
were denied by the trial court. Id. at 473. The appellate court concluded that the plaintiff had
presented sufficient proof to pierce the corporate veil for jurisdictional purposes. Id. at 484. In
reaching this conclusion, the appellate court cited evidence that Cappuccitti was the president of
both corporations, the only employee of the parent corporation, and one of only two employees of
the subsidiary; both companies operated out of Cappuccitti’s home; the subsidiary company paid
Cappuccitti $10,000.00 per month as a consultant; Cappuccitti negotiated with the Texas-based
manufacturer to grant rights of first refusal to both companies; on at least one occasion, Cappuccitti
paid the subsidiary’s bills with a check drawn from his personal account; and Cappuccitti, the
subsidiary, and the parent company were used interchangeably to transfer assets from one to the
other, which rendered the subsidiary insolvent. Id. at 482-84.
On the other hand, in PHC-Minden, the Texas Supreme Court concluded the evidence
failed to establish that the parent company and its subsidiary were fused for jurisdictional purposes.
235 S.W.3d at 176. In PHC-Minden, the evidence showed that the parent company and its
subsidiary maintained separate headquarters, that the subsidiary’s board approved the subsidiary’s
budget and oversaw its day-to-day operations, that the subsidiary established its policies and
procedures for providing health care to patients, that the parent and subsidiary shared no directors,
and that the parent was not involved in recruiting the physicians that worked for the subsidiary. Id.
There were a few areas, however, where the functions of the parent and subsidiary overlapped. For
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example, the parent provided general liability insurance for the subsidiary and group health
insurance for its employees, but the evidence showed the policies were funded from the
subsidiary’s revenues. Id. Additionally, several of the subsidiary’s employees received their
paychecks from the parent; however, the salaries were intercompany payables, which again meant
that the monies came from the subsidiary’s revenues. Id. Based on this evidence, the Texas
Supreme Court concluded there was no evidence of abnormal control by the parent company over
the subsidiary, and therefore, the Texas contacts of the parent could not be imputed to the
subsidiary. Id.
Turning to the present case, we note that appellee asserted its alter ego theory both in its
live pleading and in its written responses to appellants’ special appearances. Appellee maintained
that appellants controlled or supervised various aspects of the internal operations of the Texas
entities and that this control over the internal operations and business affairs exceeded typical
parental involvement. Specifically, appellee asserted that appellants: (1) oversaw or made
personnel decisions for the Texas entities; (2) made payments to vendors for the Texas entities;
(3) managed and issued payment for payroll of the Texas entities; (4) managed and controlled the
website that promoted the Texas entities; (5) retained authority to disapprove any contracts of the
Texas entities; (6) shared corporate offices with the Texas entities; (7) shared common directors
and officers with the Texas entities; (8) controlled and managed employee benefits for employees
of the Texas entities; and (9) oversaw billing and collection for the Texas entities. To establish that
appellants controlled the internal business operations and affairs of the Texas entities, appellee
cited deposition testimony, affidavits, and other documents, including responses to discovery.
In denying the special appearances, the trial court made an implied finding that appellants
controlled the internal business operations and affairs of the Texas entities, and that the degree of
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control was greater than that normally associated with common ownership and directorship. We
now review the record to determine whether there was evidence to support this finding.
1. Balk Deposition
In her deposition, Dr. Trudy Balk testified that she was the vice-president of operations for
PT Home Services of San Antonio, Inc., and PT Home Services of Dallas, Inc., and other Personal-
Touch Home Care companies located in New York, Pennsylvania, Virginia, Maryland, Ohio,
Kentucky, Indiana, New Hampshire, and Massachusetts. Balk did not receive compensation from
any of those entities; she received her compensation from the grandparent company, Personal
Touch Holding. Balk supervised most of the offices directly, including “oversee[ing] the
operations in terms of regulatory changes,” “clinical changes, financial changes that have to be
made, [and] personnel, for sure.” When asked if she was vice president of operations for the parent
company, PT Intermediate Holding, Balk stated she was vice president of operations “for the
entities.” Initially, when asked if she provided any services for the grandparent company, Personal
Touch Holding, Balk stated, “It’s a holding corp. I work for the parent.” Balk later clarified that
she was the vice president of operations for the grandparent company.
Balk acknowledged that the Texas entities, and some of their “branches”—Weslaco and El
Paso—entered into staffing and recruiting agreements with appellee. Balk did not read or approve
the agreements before they were executed. The agreements were signed by Elizabeth De La Rosa,
the regional administrator for the Texas offices. Balk stated that although De La Rosa had a lot of
autonomy, she was not authorized to execute legal agreements.
Balk testified that she was familiar with the website address, www.pthomecare.com. The
website, which was under Balk’s control, was used by all of the Personal-Touch Home Care
offices. Balk said the website listed the contact address for the Texas locations as “222-15 in
Bayside, New York.” Balk confirmed this was the correct address because it was the location of
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the corporate office. Balk also acknowledged that the name for each of the Texas locations was
listed on the website as “Personal-Touch Home Care, Inc.” Balk further stated that it was a mistake
to use the name “Personal-Touch Home Care, Inc.” to refer to the Texas entities, and it had recently
been corrected.
According to Balk, PT Intermediate Holding was the parent company to all of the other
companies, and had been since 2010 or 2011. The directors of PT Intermediate Holding were
Robert Marx and Dr. Glaubach; Balk was an officer but not a director. Balk testified that PT
Intermediate Holding Inc., was “owned by Personal-Touch Holding Company, which is all the
companies.”
When asked if Personal-Touch of Dallas, Inc. provided any employee benefits such as
health insurance, Balk stated that “as a company, we provide health benefits to all our employees.”
The insurance was handled by the corporate office, which negotiated the contracts with the
insurance companies, but the cost of the insurance was paid for by each of the entities. Balk
clarified that when she referred to the corporate office she meant the parent company, PT
Intermediate Holding. Balk said that each of the individual entities was responsible for marketing,
but “there can be input” from the parent company. Balk also testified that PT Intermediate Holding
provided billing services for the Texas entities. Specifically, the billing was done by the entity
itself, and then it went to corporate where the files were disbursed. The actual billing for the Texas
entities was done locally. Similarly, as to payroll, Balk said each of the individual entities “input”
the payroll information, and then the payroll checks were paid by PT Intermediate Holding and
attributed to each of the companies. Balk further indicated the Texas entities had retirement
benefits, namely a 401(k) program that was administered by the grandparent company, Personal
Touch Holding.
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2. Discovery Responses
In a response to appellee’s interrogatories, Personal Touch Home Care of New York, Inc.
listed the principal office address for the Texas entities as “222-15 Northern Boulevard, Bayside,
New York 11361,” and the principal office address for PT Intermediate Holding as “222-15
Northern Blvd., 3rd Floor, Bayside, New York 11361.”
3. Shane Affidavit
In an affidavit, appellee’s chief executive manager, Jesse Shane, testified that between June
2011 and October 2012, appellee entered into no less than twenty staffing and recruiting
agreements with a company holding itself out as and/or doing business as “Personal-Touch Home
Care, Inc.” The agreements were authorized by Elizabeth De La Rosa, an authorized
officer/administrator for “Personal-Touch Home Care, Inc.,” and were applicable to various
offices of Personal-Touch Home Care, Inc. located in Texas, namely, Dallas, San Antonio,
Weslaco, and El Paso.
Shane further testified that he was informed on numerous occasions by De La Rosa and
others that Balk worked in the New York corporate office, managed the Texas operations, and De
La Rosa reported to Balk. Shane stated that on numerous occasions during 2011, 2012, and 2013,
De La Rosa informed him that Balk had decided that the company would not pay certain recruiting
fees that fell under the agreements. De La Rosa also informed him that payments, invoices, and
related operations for the Texas entities were controlled and processed through the corporate office
in New York. Shane also stated that he was informed that the Texas entities had to obtain approval
from “the New York corporate office” before hiring certain recruits or staff brought to them by
appellee under the agreements, and that checks over a certain dollar amount had to be approved
by the corporate office in New York. According to Shane, payments made on invoices from
appellee to the Texas entities were paid by checks purporting to be from “Personal Touch Home
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Aides,” and the address listed on the checks was “222-15 Northern Boulevard, Bayside, New York
11361.”
Finally, Shane testified that the website address for the company that entered into the
staffing/recruiting agreements with appellee was www.pthomecare.com. When the contracts were
executed, and as of the date of Shane’s affidavit, the website listed the contact address for
“Personal Touch Home Care, Inc.” as “222-15 Northern Blvd., 3rd Floor Bayside, NY 11361.”
4. Emails
The record also contained emails indicating that appellants made personnel decisions for
the Texas entities. In an email dated October 20, 2011, De La Rosa explained to one of appellee’s
employees that she could not proceed with hiring a candidate for a nurse’s position for one of the
Texas entities because “one of the owners in New York” had a niece who was considering the
position. De La Rosa went on to state, “I have never met her, nor seen her, nor talked with her on
the phone. In six years this is a first for me … If this corporate plan falls through I want to go with
[the applicant you recommended] ….” In an email dated August 16, 2012, Cris Trevino, another
manager for one of the Texas entities, told one of appellee’s employees that she would not be
hiring an applicant recommended by appellee for a billing specialist position in El Paso. Trevino
stated “corporate will not let me hire her … I really liked [the applicant] for the job but [] it is not
my decision.” A few days later, one of appellee’s employees inquired about setting up an interview
for a billing specialist position, and Trevino responded that she was “having to send all resumes to
corporate before we set up interviews.” About two months later, in an email dated October 26,
2012, Trevino advised one of appellee’s employees that “corporate” had approved an applicant
and the applicant was set to begin training in San Antonio the following week. And finally, during
the same month, Trevino sent another email referring to an interview that had been set up by “the
head hunter from corporate.”
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The following factors have been identified as important to determining whether a
subsidiary is separate and distinct from its parent corporation for personal jurisdiction purposes:
(1) the amount of the subsidiary’s stock owned by the parent corporation; (2) the existence of
separate headquarters; (3) the observance of corporate formalities; and (4) the degree of the
parent’s control over the general policy and administration of the subsidiary. PHC-Minden, 235
S.W.3d at 175. In this case, evidence was presented concerning all of these factors except the
observance of corporate formalities. First, the evidence showed the Texas entities were wholly
owned subsidiaries of PT Intermediate Holding, and PT Intermediate Holding was wholly owned
by Personal Touch Holding. Second, there was some evidence, namely in the discovery responses
and the testimony about the website, indicating PT Intermediate Holding and the Texas entities
shared the same corporate headquarters. Finally, there was evidence that the appellants had a high
level of control over the general policy and administration of the Texas entities. As to recruiting
and hiring, this control was extensive. Balk stated in her deposition that she was involved in the
Texas entities’ personnel decisions, and the emails indicated that appellants had complete control
over hiring for the Texas entities. Appellants also exercised extensive control over some of the
Texas entities’ financial decisions. Shane testified that checks over a certain dollar amount had to
be approved by appellants, and that appellants decided whether or not appellee would be paid on
some of its invoices. Appellants controlled a common website for the Texas entities, and this
website identified all of the subsidiaries, including the Texas entities, under a common name
“Personal Touch Home Care, Inc.”
After considering all relevant facts and circumstances surrounding the operations of the
parents and the subsidiaries in this case, we conclude there was some evidence to support the trial
court’s implied finding that appellants exercised a degree of control over the Texas entities that
was greater than that normally associated with common ownership and directorship. Because
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appellee met its burden to show that appellants controlled the internal business operations and
affairs of the Texas entities, the trial court properly imputed the activities of the Texas entities to
appellants for purposes of establishing minimum contacts.
For obvious reasons, the Texas entities did not contest the exercise of personal jurisdiction
over them. Thus, once the activities of the Texas entities were imputed to appellants, appellants’
contacts with Texas were sufficient to permit the trial court to exercise personal jurisdiction over
appellants. See PHC-Minden, 235 S.W.3d at 168 (recognizing that to establish general jurisdiction,
a defendant must be engaged in longstanding business in the forum state, such as marketing or
shipping products, or performing services or maintaining one or more offices there); Cappuccitti,
222 S.W.3d at 481 (providing that once the contacts of a subsidiary that did not contest personal
jurisdiction were imputed to its nonresident parent corporation under an alter ego theory, the trial
court properly exercised personal jurisdiction over the nonresident parent corporation). We
conclude the trial court properly concluded that it had personal jurisdiction over appellants.
TRADITIONAL NOTIONS OF FAIR PLAY AND SUBSTANTIAL JUSTICE
Appellants further argue that the trial court erred in denying their special appearances
because the exercise of personal jurisdiction would offend traditional notions of fair play and
substantial justice. Even when a parent and a subsidiary are fused for jurisdictional purposes, the
trial court’s exercise of personal jurisdiction over a nonresident defendant must comport with
traditional notions of fair play and substantial justice. Capital Tech., 270 S.W.3d at 755. To
evaluate this component, we consider the nonresident’s contacts in light of (1) the burden on the
defendant, (2) the interests of the forum state in adjudicating the dispute, (3) the plaintiff’s interest
in obtaining convenient and effective relief, (4) the interstate judicial system’s interest in obtaining
the most efficient resolution of controversies, and (5) the shared interest of the several states in
furthering fundamental substantive social policies. Spir Star AG v. Kimich, 310 S.W.3d 868, 878
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(Tex. 2010). To defeat jurisdiction, appellants must present a compelling case that the exercise of
jurisdiction would be unreasonable. Id. at 878-79. “Only in rare cases . . . will the exercise of
jurisdiction not comport with fair play and substantial justice when the nonresident defendant has
purposefully established minimum contacts with the forum state.” Guardian Royal Exchange
Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 231 (Tex. 1991).
In their brief, appellants claim that the exercise of personal jurisdiction over them would
offend traditional notions of fair play and substantial justice because they have their principal
places of business in New York and no operations in Texas. Based on this claim, appellants assert
they would be uniquely burdened by litigating this case in Texas. We disagree. “Distance alone
cannot ordinarily defeat jurisdiction.” Moncrief Oil Int’l v. OAO Gazprom, 414 S.W.3d 142, 155
(Tex. 2013). Any burden on appellants would be minimal, particularly in light of the presence of
their subsidiaries in Texas. See id. Furthermore, appellee has an interest in resolving all of its
related claims in a single proceeding. And, it would be inefficient for the interstate justice system
to require appellee pursue virtually identical claims in two states. In sum, any possible burden on
appellants would be outweighed by the burden on appellee and the interstate justice system. We
conclude the exercise of personal jurisdiction over appellants comports with traditional notions of
fair play and substantial justice.
CONCLUSION
For these reasons, the trial court’s orders denying appellants’ special appearances are
affirmed.
Karen Angelini, Justice
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