Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-15-00398-CV
Caroline BUSWELL,
Appellant
v.
THE GWSPI COMPANY LLC as Successor in Interest to Wilmington Trust, NA,
Trustee of the Jeffrey P. Blanchard 2013 Family Trust,
Appellee
From the 224th Judicial District Court, Bexar County, Texas
Trial Court No. 2015-CI-06197
Honorable David A. Canales, Judge Presiding
Opinion by: Sandee Bryan Marion, Chief Justice
Sitting: Sandee Bryan Marion, Chief Justice
Marialyn Barnard, Justice
Luz Elena D. Chapa, Justice
Delivered and Filed: October 7, 2015
REVERSED AND RENDERED
This is an accelerated appeal of the trial court’s order denying Caroline Buswell’s special
appearance. Buswell contends the trial court erred in denying her special appearance because she
did not have minimum contacts with Texas, and the exercise of jurisdiction over her does not
comport with traditional notions of fair play and substantial justice. We reverse the trial court’s
order and dismiss the underlying claims against Buswell.
04-15-00398-CV
BACKGROUND
In February of 2013, Wilmington Trust, National Association as Trustee of The Jeffrey P.
Blanchard 2013 Family Trust submitted an application to Life Insurance Company of the
Southwest (LSW) for a $10,000,000 life insurance policy on the life of Jeffrey P. Blanchard. LSW
subsequently issued the policy effective April 11, 2013. Blanchard passed away in June of 2014,
and Cook TPA LLC, which was the trustee of the Trust at that time, submitted a claim to LSW for
the life insurance proceeds.
On August 1, 2014, Buswell, a claims examiner employed by LSW, sent a letter to
Blanchard’s estate in Texas and to Cook TPA in New York, informing them LSW had concluded
a claim review which included a contestable investigation. Based on LSW’s comparison of
Blanchard’s medical records and the information provided on the life insurance application, LSW
found material misrepresentations were made by Blanchard in the application and during the
underwriting process. Based on these material misrepresentations, LSW stated it was rescinding
the policy and was sending a check to Cook TPA refunding all premiums paid plus interest.
In April of 2015, The GWSPI Company LLC, as Successor in Interest to Wilmington Trust,
NA, Trustee of the Jeffrey P. Blanchard 2013 Family Trust (“Trustee”), sued Buswell,
individually, and LSW. The causes of action alleged against Buswell included fraud, conspiracy
to commit fraud, and violations of the Texas Insurance Code. With regard to the trial court’s
jurisdiction over Buswell, the petition alleged:
7. The Court has jurisdiction over Defendant Buswell because this defendant
engages in the business of insurance in the State of Texas, and Plaintiff’s causes of
action arise out of this defendant’s business activities in the State of Texas.
8. This Court has personal jurisdiction over each Defendant because they do
business in Texas and have sufficient contacts with the State of Texas, both
generally and with regard to this specific action, so that exercise of personal
jurisdiction over them is proper and does not offend traditional notions of fair play
and substantial justice.
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04-15-00398-CV
Buswell, who lives and works in Tennessee, filed a special appearance challenging both
general and specific jurisdiction. With regard to specific jurisdiction, Buswell asserted she was
not involved in the initial sale and issuance of the policy. Although she participated in the
rescission investigation, all of her actions related to the policy were taken in Tennessee, and the
letters to the Estate and the Trust were her only communications regarding the policy. Because
appellee did not become successor trustee of the Trust until 2014, Buswell never had any
communications with the current Trustee. Buswell asserted she did not have sufficient minimum
contacts with Texas and Texas’s exercise of jurisdiction over her would not comport with
traditional notions of fair play and substantial justice.
The Trustee filed a response asserting the trial court had specific jurisdiction over Buswell
because she committed acts or omissions in Texas constituting a tort or other violation of the law.
Specifically, the Trustee asserted Buswell was engaged in the business of investigating life
insurance claims in Texas and violated the Texas Insurance Code for which she is individually
liable. The Trustee further asserted Buswell’s wrongful conduct is evidenced by the August 1,
2014 letter she purposefully directed to the Estate in Texas in which she wrongfully rescinded the
life insurance policy.
After a hearing, the trial court denied Buswell’s special appearance. Buswell appeals.
STANDARD OF REVIEW
Whether a court can exercise personal jurisdiction over a nonresident defendant is a
question of law we review de novo. Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142,
150 (Tex. 2013); Kelly v. Gen. Interior Const., Inc., 301 S.W.3d 653, 657 (Tex. 2010). Because
the trial court did not issue findings of fact and conclusions of law with its special appearance
ruling, we imply all facts necessary to support the judgment that are supported by the evidence.
Moncrief Oil Int’l Inc., 414 S.W.3d at 150; Kelly, 301 S.W.3d at 657.
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04-15-00398-CV
PERSONAL JURISDICTION
Texas courts may exercise personal jurisdiction over a nonresident if: (1) the Texas long-
arm statute authorizes the exercise of jurisdiction; and (2) the exercise of jurisdiction does not
violate federal and state constitutional due process guarantees. Moncrief Oil Int’l Inc., 414 S.W.3d
at 149; Kelly, 301 S.W.3d at 657. Under the first prong, the Texas long-arm statute authorizes the
exercise of personal jurisdiction over a nonresident defendant who commits a tort in whole or in
part in this state. TEX. CIV. PRAC. & REM. CODE ANN. § 17.042(2) (West 2015); Moncrief Oil Int’l
Inc., 414 S.W.3d at 149; Kelly, 301 S.W.3d at 659. Under the second prong, personal jurisdiction
is consistent with due process when: (1) the nonresident defendant has minimum contacts with
Texas; and (2) the exercise of jurisdiction comports with traditional notions of fair play and
substantial justice. Moncrief Oil Int’l Inc., 414 S.W.3d at 150; Kelly, 301 S.W.3d at 657. A
defendant has minimum contacts with Texas when the defendant purposefully avails itself of the
privilege of conducting activities within Texas, thus invoking the benefits and protections of its
laws. Moncrief Oil Int’l Inc., 414 S.W.3d at 150; Kelly, 301 S.W.3d at 657-58. When determining
whether a nonresident purposefully availed itself of the privilege of conducting activities in Texas,
we consider three factors: (1) the defendant’s contacts with Texas; the unilateral activity of another
party or a third person is not relevant; (2) whether the contacts are purposeful rather than random,
fortuitous or attenuated; and (3) whether the nonresident defendant has sought some benefit,
advantage or profit by availing itself of Texas’s jurisdiction. Moncrief Oil Int’l Inc., 414 S.W.3d
at 151 (quoting Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338-39 (Tex.
2009)).
A nonresident’s contacts can give rise to general or specific personal jurisdiction. Id. at
150. In its response to Buswell’s special appearance and in its brief, the Trustee only argues
specific personal jurisdiction. Specific jurisdiction exists when the cause of action arises from or
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is related to the nonresident defendant’s purposeful activities in the forum state. Id. Specific
jurisdiction focuses on the relationship between the defendant, Texas, and the litigation to
determine whether the claim arises from the Texas contacts. Id.
BURDEN OF PROOF
The plaintiff and the defendant share shifting burdens of proof in a challenge to personal
jurisdiction. Kelly, 301 S.W.3d at 658. The plaintiff bears the initial burden to plead sufficient
allegations to bring the nonresident defendant within the reach of Texas’s long-arm statute. Id.
Once the plaintiff has pleaded sufficient allegations, the defendant bears the burden to negate all
bases of personal jurisdiction alleged by the plaintiff. Id. The defendant can negate jurisdiction
on either a factual or a legal basis. Id. at 659.
To negate jurisdiction on a factual basis, the defendant can present evidence that it has no
contacts with Texas, effectively disproving the plaintiff’s allegations. Id. The plaintiff can then
respond with its own evidence that affirms its allegations, and it risks dismissal of its lawsuit if it
cannot present the trial court with evidence establishing personal jurisdiction. Id.
To negate jurisdiction on a legal basis, the defendant can show that even if the plaintiff’s
alleged contacts are true: (1) the evidence is legally insufficient to establish jurisdiction; (2) the
defendant’s contacts with Texas fall short of purposeful availment; (3) for specific jurisdiction, the
claims do not arise from the contacts; or (4) traditional notions of fair play and substantial justice
are offended by the exercise of jurisdiction. Id.
ANALYSIS
In its pleadings, the Trustee alleged the trial court had specific jurisdiction because Buswell
committed a tort or violated the Texas Insurance Code while engaged in the business of
investigating life insurance claims in Texas. In her special appearance, however, Buswell
presented evidence to negate the Trustee’s allegations by showing she is engaged in the business
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of insurance in the State of Tennessee, and her only contact with Texas was the letter she sent to
Blanchard’s estate, which was neither the beneficiary of the policy nor a party to the underlying
lawsuit. In reply to Buswell’s special appearance, the Trustee referred to Buswell’s statements in
her letter that Blanchard’s medical records and the life insurance application were reviewed during
LSW’s investigation, asserting this established an additional contact with Texas. Buswell
responded that her review of the medical records and application occurred in Tennessee.
During the hearing on the special appearance, the trial court was heavily focused on the
Trustee’s allegations that Buswell violated the Texas Insurance Code, rather than on Buswell’s
contacts with Texas. In announcing its ruling denying Buswell’s special appearance, the trial court
stated:
All right. Among other things, I do see that Ms. Buswell is — her actions
relate to a Texas insurance policy, I’m sure that that much is clear. And it seems to
me that her — her actions are sufficient to establish that she’s in the business of
insurance; that she is a person defined under the [Texas Insurance] Code; that the
Petition I think it’s — in respects — is— you know, does allege that she engaged
in acts that are allegedly violate of 541, 542 — at least I saw 541 for sure.
Assuming the trial court is correct and Buswell is a “person” as that term is defined in the
Texas Insurance Code, 1 the Texas Supreme Court has explained:
[T]he mere existence of a cause of action does not automatically satisfy
jurisdictional due process concerns. A state is powerless to create jurisdiction over
a nonresident by establishing a remedy for a private wrong and a mechanism to
seek that relief. Instead, jurisdictional analysis always centers on the defendant’s
actions and choices to enter the forum state and conduct business. The concept of
minimum contacts is rooted in the notion that a defendant may reasonably be haled
into the forum state’s courts when it purposefully, not randomly or fortuitously,
engages in activities there.
1
“Person” is defined to include any individual engaged in the business of insurance, and is not restricted to individuals
engaged in the business of insurance in Texas. TEX. INS. CODE ANN. § 541.002(2) (West 2009). In its brief, the
Trustee refers to a violation of section 541.003. To violate section 541.003, a person must engage in a trade practice
in Texas that is defined or determined to be an unfair method of competition or unfair or deceptive act or practice in
the business of insurance. Id. at § 541.003.
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Kelly, 301 S.W.3d at 660-61 (internal citations omitted). Therefore, the Trustee’s allegation that
Buswell violated the Texas Insurance Code is not sufficient to establish personal jurisdiction over
her. Instead, as stated in Kelly, we must examine Buswell’s contacts with Texas.
In this case, the only contact the Trustee has shown Buswell had with Texas was her
mailing of the letter to Blanchard’s estate. The mailing of the letter to Texas, however, does not
establish that Buswell purposefully availed herself of the privilege of conducting activities in
Texas, thereby invoking the benefits and protections of its laws. See Moncrief Oil Int’l Inc., 414
S.W.3d at 150; Kelly, 301 S.W.3d at 657. Instead, all of Buswell’s activities in this regard,
including the reviewing of the medical records and life insurance application in conducting the
investigation, occurred in Tennessee where she worked. Sending a letter informing Blanchard’s
estate of the outcome of LSW’s investigation and its decision to rescind the policy does not
establish Buswell “engaged in activities that constitute any presence — let alone a substantial
presence — in this state.” Kelly, 301 S.W.3d at 661. “Although the trier-of-fact may ultimately
conclude that [Buswell] violated the [Texas Insurance Code], the mere commission of an act does
not grant Texas courts jurisdiction over the actor.” Id. at 660.
In its brief, the Trustee primarily relies on Fjell Tech. Group v. Unitech Int’l, Inc., No. 14-
14-00255-CV, 2015 WL 457805 (Tex. App.—Houston [14th Dist.] Feb. 3, 2015, pet. filed) (mem.
op.) and Carey v. State, No. 04-09-00809-CV, 2010 WL 2838631 (Tex. App.—San Antonio July
21, 2010, pet. denied) (mem. op.). In both of those cases, however, the nonresident defendants
had significantly greater contacts with Texas.
In Fjell Tech. Group, the trial court denied a special appearance filed by a Norwegian
corporation and one of its employees, a Dutch citizen living and working in Norway. 2015 WL
457805, at *1. Those nonresident defendants were sued by a Texas corporation, alleging its
product designs and confidential customer list had been misappropriated. Id. In holding the
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nonresident defendants purposefully availed themselves of the privilege of conducting activities
in Texas, the appellate court noted the nonresident defendants “initiated contact with Texas by
sending marketing emails to individuals in Texas and by communicating — via Skype, email and
in-person meetings — with [the] Texas-based employees” of the plaintiff. 2015 WL 457805, at
*6. In addition, the nonresident defendants “sought to profit when they sent mails [sic] into Texas
for the express purpose of becoming a supplier to Texas-based companies,” and “[t]hey did profit
when they garnered a purchase order from a Texas-based company.” Id.
In Carey, the trial court denied special appearances filed by James Edward Carey III and
Gwendolyn Faye Carey, who were not residents of Texas but were the sole officers, managers,
and members of two companies operating in Texas. 2010 WL 2838631, at *1. The companies
sold travel-related software licenses to Texas consumers for three years. Id. The State of Texas
sued the Careys for various torts, alleging they “fraudulently obtained millions of dollars from
Texas consumers through misrepresentations in the advertising and sale of travel-related software
licenses.” Id. With respect to James, the evidence showed he made two trips to Texas to arrange
for the companies’ offices. Id. at *5. He also visited the offices once or twice a year to meet with
staff regarding basic product training and reviewed “scripts” for the employees to use. Id. He also
responded to complaints by Texas consumers and signed personal guarantees and contracts for the
businesses. Id. Gwendolyn accompanied James on his trips to Texas, was aware of the complaints
by the Texas consumers, and also signed guaranteed obligations and loans for the businesses. Id.
at *6. Both James and Gwendolyn received proceeds from selling the retail installment contracts
the companies obtained from the Texas consumers to third-party finance companies. Id. at *5-6.
This court held the Careys’ “participation in the [companies’] businesses, which was aimed to
extract profits from Texas consumers[,] supports specific jurisdiction with regard to each of the
Careys.” Id. at *6.
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In each of the foregoing cases, the evidence established far greater contacts between the
nonresident defendants and Texas than the mailing of a single letter to a non-party Texas resident.
In addition, in each of those cases, the evidence established the nonresident defendants sought to
profit by selling products to Texas residents. In its brief, the Trustee suggests Buswell profited by
remaining employed by LSW as a result of the outcome of her investigation. First, the Trustee’s
suggestion or speculation is not evidence. See 2007 East Meadows, L.P. v. RCM Phoenix Partners,
L.L.C., 310 S.W.3d 199, 207 (Tex. App.—Dallas 2010, pet. denied) (noting speculation does not
support hailing nonresident defendant to court in Texas). Second, the Trustee’s suggestion does
not establish how Buswell sought to benefit or profit in Texas by retaining her employment in
Tennessee. Because Buswell did not purposefully avail herself of the privilege of conducting
activities in Texas and did not, therefore, have minimum contacts with Texas, the trial court erred
in denying her special appearance. 2
CONCLUSION
The trial court’s order is reversed, and the claims against Buswell in the underlying lawsuit
are dismissed.
Sandee Bryan Marion, Chief Justice
2
Because we hold Buswell did not have minimum contacts with Texas, we do not address whether the exercise of
jurisdiction over her would comport with traditional notions of fair play and substantial justice.
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