ACCEPTED
01-14-00904-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
2/13/2015 12:04:26 PM
CHRISTOPHER PRINE
CLERK
NO. 01-14-00904-CV
__________________________________________________________________
FILED IN
FIRST DISTRICT OF TEXAS AT HOUSTON 1st COURT OF APPEALS
HOUSTON, TEXAS
__________________________________________________________________
2/13/2015 12:04:26 PM
CHRISTOPHER A. PRINE
GRAMERCY ADVISORS LLC, GRAMERCY ASSET MANAGEMENT Clerk LLC,
GRAMERCY LOCAL MARKETS RECOVERY FUND LLC, AND
GRAMERCY FINANCIAL SERVICES LLC,
Defendants-Appellants,
v.
R.K. LOWRY, JR., ET AL.,
Plaintiffs-Appellees.
__________________________________________________________________
DEFENDANTS-APPELLANTS’ AMENDED BRIEF
__________________________________________________________________
From the District Court of Harris County, Texas,
80th Judicial District; Trial Court Case No. 2008-74262
David C. Mattka (TSB No. 13231500) Sean F. O’Shea (pro hac vice)
MUNSCH HARDT KOPF & HARR, P.C. Michael E. Petrella (pro hac vice)
401 Congress Avenue, Suite 3050 Daniel M. Hibshoosh (pro hac vice)
Austin, Texas 78701 O’SHEA PARTNERS LLP
(512) 391-6100 (telephone) 521 Fifth Avenue, 25th Floor
(512) 391-6149 (facsimile) New York, NY 10175
Email: dmattka@munsch.com Tel: (212) 682-4426
Fax: (212) 682-4437
soshea@osheapartners.com
mpetrella@osheapartners.com
dhibshoosh@osheapartners.com
ORAL ARGUMENT REQUESTED
REQUEST FOR ORAL ARGUMENT
Pursuant to Texas Rules of Appellate Procedure 38.1(e), 39.7, and
52.8(b)(4), Defendants-Appellants respectfully request oral argument because it
will materially aid the Court in determination of an important question of law
requiring careful consideration, particularly in light of the voluminous and
complex factual record below.
ii
IDENTITIES OF PARTIES AND COUNSEL
Defendants-Appellants:
GRAMERCY ADVISORS LLC; GRAMERCY ASSET MANAGEMENT LLC;
GRAMERCY LOCAL MARKETS RECOVERY FUND LLC; AND
GRAMERCY FINANCIAL SERVICES LLC.
David C. Mattka (TSB No. 13231500) Sean F. O’Shea (pro hac vice)
MUNSCH HARDT KOPF & HARR, P.C. Michael E. Petrella (pro hac vice)
401 Congress Avenue, Suite 3050 Daniel M. Hibshoosh (pro hac vice)
Austin, Texas 78701 O’SHEA PARTNERS LLP
Tel: (512) 391-6100 521 Fifth Avenue, 25th Floor
Fax: (512) 391-6149 New York, NY 10175
Tel: (212) 682-4426
Fax: (212) 682-4437
Plaintiffs-Appellees:
R. K. LOWRY, JR; L-FALLING CREEK, LLC; RUSSELL A. CHABAUD; R-
RAC WIMBLEDON LLC; JOHN P. MOFFITT; J-JASON LLC; RUSSELL A.
CHABAUD, TRUSTEE OF THE RUSSELL G. CHABAUD 1999
INVESTMENT TRUST; R-RUSSELL WIMBLEDON, LLC; RUSSELL A.
CHABAUD, TRUSTEE OF THE ASHLEY CHABAUD 1999 INVESTMENT
TRUST; R-ASHLEY WIMBLEDON, LLC; RUSSELL A. CHABAUD,
TRUSTEE OF THE AUDREY CHABAUD 1999 INVESTMENT TRUST; R-
AUDREY WIMBLEDON, LLC; LMC RECOVERY FUND, LLC; UNION GAS
FUNDING I, L.P.; RANA HOLDINGS, LLC; WESTY I LLC; AND MOGI, LLC.
W. Ralph Canada, Jr. (Lead Counsel)
David R. Deary, Wilson E. Wray and Tyler M. Simpson (Additional Counsel)
LOEWINSOHN FLEGLE DEARY, LLP
12377 MERIT DRIVE, SUITE 900
Dallas, Texas 75251
Tel: (214) 572-1700
Fax: (214) 572-1717
iii
TABLE OF CONTENTS
REQUEST FOR ORAL ARGUMENT .................................................................... ii
IDENTITIES OF PARTIES AND COUNSEL ....................................................... iii
TABLE OF AUTHORITIES ................................................................................... vi
RECORD REFERENCES ....................................................................................... ix
STATEMENT OF THE CASE ................................................................................ xi
ISSUE PRESENTED .............................................................................................. xii
STATEMENT OF FACTS ........................................................................................1
I. APPELLEES AND BDO DEVISE THE TAX TRANSACTIONS ..... 1
II. GRAMERCY AGREES TO SOURCE EMERGING MARKET
ASSETS FOR APPELLEES’ TAX TRANSACTION, AND TO
ARRANGE SEPARATE INVESTMENT FUND INVESTMENTS ... 1
III. APPELLEES ACKNOWLEDGE THEY RECEIVED NO TAX
ADVICE FROM GRAMERCY ........................................................................... 4
IV. THE IRS DISALLOWS ANY BENEFIT FROM THE TAX
TRANSACTION ........................................................................................................ 6
V. APPELLEES COMMENCE LITIGATION IN A FORUM TO
WHICH GRAMERCY HAS VIRTUALLY NO CONNECTION ........ 6
VI. GRAMERCY SEEKS DISMISSAL FOR LACK OF
PERSONAL JURISDICTION ............................................................................. 9
VII. THE COURT BELOW REJECTS GRAMERCY’S AMENDED
SPECIAL APPEARANCE .................................................................................. 11
SUMMARY OF THE ARGUMENT ......................................................................11
ARGUMENTS AND AUTHORITIES ...................................................................13
I. GRAMERCY DOES NOT HAVE THE MINIMUM CONTACTS
WITH TEXAS NECESSARY TO ESTABLISH SPECIFIC
JURISDICTION. ...................................................................................................... 13
A. Gramercy’s Attendance at Meetings in Texas Does Not
Give Rise to Jurisdiction. ......................................................................... 14
1. The Pre-Investment Meeting. .................................................... 15
2. The Post-Investment Meetings. ................................................ 20
iv
B. Gramercy’s Contractual Performance Outside Texas
Cannot Establish Personal Jurisdiction. ............................................. 22
C. Appellees’ Performance Of Contractual Obligations In
Texas Cannot Give Rise to Jurisdiction Over Gramercy. .......... 24
D. Gramercy’s Activities Concerning Appellees’ Tax
Strategy And Fund Investments Cannot Give Rise To
Specific Jurisdiction. ................................................................................. 25
1. Gramercy’s Ministerial Execution of Transactions
Necessary To Effectuate The Tax Transactions, And
Its Management Of Entities Involved In The Tax
Transactions, Do Not Give Rise To
Specific Jurisdiction. .................................................................... 25
2. Preparation Of Appellants’ Tax Returns Is Irrelevant
To Personal Jurisdiction Over Gramercy. ............................ 27
3. The Gramercy Defendants Earned No Fees
From Appellees, And Their Earnings From Other
Texas Residents Are Jurisdictionally Irrelevant................ 29
4. Gramercy’s Transmission of Account Statements
To Appellees Does Not Support A Finding of
Specific Jurisdiction. .................................................................... 30
5. Gramercy’s Limited Communications with Appellees
Do Not Give Rise to Jurisdiction. ........................................... 32
E. Gramercy’s Work on Behalf of Other Texas Clients is
Irrelevant. ....................................................................................................... 34
II. THE EXERCISE OF JURISDICTION OVER GRAMERCY
WOULD BE INCONSISTENT WITH DUE PROCESS. ...................... 35
PRAYER ..................................................................................................................38
CERTIFICATE OF COMPLIANCE .......................................................................39
CERTIFICATE OF SERVICE ................................................................................40
v
TABLE OF AUTHORITIES
Cases Page(s)
Asshauer v. Farallon Capital Partners, L.P.,
319 S.W.3d 1 (Tex. App. 2008)............................................................................20
BMC Software Belgium, N.V. v. Marchand,
83 S.W.3d 789 (Tex. 2002)...................................................................................21
Bozell Grp., Inc. v. Carpet Co-op of Am. Ass’n, Inc.,
00 CIV. 1248 (RWS), 2000 WL 1523282 (S.D.N.Y. Oct. 11, 2000) ..................18
Bryan v. Gordon,
384 S.W.3d 908 (Tex. App. 2012)........................................................................25
Cornerstone Healthcare Group Holding, Inc. v. Reliant Splitter, L.P.,
2014 WL 2538881 (Tex. App. 2014) ...................................................................29
Farwah v. Prosperous Mar. Corp.,
220 S.W.3d 585 (Tex. App. 2007)........................................................................17
Financial Strategy Group, PLC v. R.K. Lowry, Jr. et al.,
No. 01-14-00273 (Tex. App. 2015) ......................................................................11
Grand Aerie Fraternal Order of Eagles v. Haygood,
402 S.W.3d 766 (Tex. App. 2013)........................................................................34
Guardian Royal Exch. Assurance Ltd. v. English China Clays, P.L.C.,
815 S.W.2d 223 (Tex. 1991).......................................................................... 35, 36
Gustafson v. Provider HealthNet Servs., Inc.,
118 S.W.3d 479 (Tex. App. 2003)........................................................................17
Hotel Partners v. Craig,
993 S.W.2d 116 (Tex. App. 1994)........................................................................19
In re Stern,
321 S.W.3d 828 (Tex. App. 2010)........................................................................20
vi
IRA Resources, Inc. v. Griego,
221 S.W.3d 592 (Tex. 2007).............................................................. 22, 24, 28, 29
Johnson v. Pounds,
2008 WL 3845450 (Tex. App. 2008) ...................................................................28
KC Smash 01, LLC v. Gerdes, Hendrichson, Ltd., L.L.P.,
384 S.W.3d 389 (Tex. App. 2012)................................................................. 24, 33
Lang v. Capital Res. Investments, I, LLC,
102 S.W.3d 861 (Tex. App. 2003)........................................................................21
Magnolia Gas Co. v. Knight Equip. & Mfg. Corp.,
994 S.W.2d 684 (Tex. App. 1998)........................................................................21
Marathon Oil v. A.G. Ruhrgas,
182 F.3d 291 (5th Cir. 1999) ............................................................. 18, 24, 29, 30
Markette v. X-Ray X-Press Corp.,
240 S.W.3d 464 (Tex. App. 2007)........................................................... 22, 26, 28
McElroy Machine & Mfg. Co., Inc. v. Flores,
2010 WL 466901 (Tex. App. 2010) .....................................................................34
Michiana Easy Livin’ Country, Inc. v. Holten,
168 S.W.3d 777 (Tex. 2005).................................................................................14
Moki Mac River Expeditions v. Drugg,
221 S.W.3d 569 (Tex. 2007)......................................................................... passim
Nat’l Indus. Sand Ass’n v. Gibson,
897 S.W.2d 769 (Tex. 1995).................................................................................20
Olympia Capital Associates L.P. v. Jackson,
247 S.W.3d 399 (Tex. App. 2008)................................................................. 31, 33
Proskauer Rose LLP v. Pelican Trading, Inc.,
2009 WL 242993 (Tex. App. 2009) .............................................................. 22, 33
vii
Riverside Exports, Inc. v. B.R. Crane & Equip., LLC,
362 S.W.3d 649 (Tex. App. 2011)........................................................................31
Thomas v. UBS AG,
706 F.3d 846 (7th Cir. 2013) ..................................................................................6
Turan v. Universal Plan Inv. Ltd.,
70 F. Supp. 2d 671 (E.D. La. 1999),
aff'd in rel. part sub nom., 248 F.3d 1139 (5th Cir. 2001) ...................................18
Turan v. Universal Plan Inv. Ltd.,
No. 99-31379, 2001 WL 85902 (5th Cir. 2001)……………………… ..............21
Walden v. Fiore,
134 S. Ct. 1115 (2014) ..........................................................................................24
Statutes Page
Tex. Rev. Civ. Stat. Ann. art. 1528n § 7.01 ...............................................................7
Rules Page
Tex. R. App. P. 38.1(e) ............................................................................................. ii
Tex. R. App. P. 39.7.................................................................................................. ii
Tex. R. App. P. 52.8(b)(4) ........................................................................................ ii
Other Authorities Page
Larson, Erik, Record $8 Billion Tax Fraud Gets Ex-Lawyer 15 Years, Bloomberg
Businessweek, June 25, 2014, http://www.businessweek.com/news/2014-06-
25/ex-lawyer- sentenced-to-15-years-over-8-billion-tax-fraud ..............................7
viii
RECORD REFERENCES
Citations in this Appellant’s Amended Brief to the parties are as follows:
Appellants Gramercy Advisors LLC, Gramercy Asset Management LLC,
Gramercy Local Markets Recovery Fund LLC, and Gramercy Financial Services
LLC will be referred to collectively as “Gramercy.”
Appellees R. K. Lowry, Jr.; L-Falling Creek, LLC; Russell A. Chabaud; R-RAC
Wimbledon LLC; John P. Moffitt; J-Jason LLC; Russell A. Chabaud, Trustee of
the Russell G. Chabaud 1999 Investment Trust; R-Russell Wimbledon, LLC;
Russell A. Chabaud, Trustee of the Ashley Chabaud 1999 Investment Trust; R-
Ashley Wimbledon, LLC; Russell A. Chabaud, Trustee of the Audrey Chabaud
1999 Investment Trust; R-Audrey Wimbledon, LLC; LMC Recovery Fund, LLC;
Union Gas Funding I, L.P.; RanA Holdings, LLC, Westy I LLC, and MOGI, LLC
will be referred to as “Appellees.”
Citations in this Appellant’s Amended Brief to the record are as follows:
CR – Clerk’s Record (i.e. CR [page]; e.g. CR 1)
Supp. CR – Supplemental Clerk’s Record (i.e. Supp. CR [page]; e.g.
Supp. CR 1)
SSCR – Second Supplemental Clerk’s Record (i.e. SSCR [page]; e.g. SSCR 1)1
RR – Reporter’s Record (i.e. RR [page]; e.g. RR 1)
1
In preparing the Second Supplemental Clerk’s Record filed on February 12,
2014, the district court clerk appears to have unintentionally omitted record page
numbers. Accordingly, citations to the Second Supplemental Clerk’s Record are
provided based on what the page references would have been, had they been
included. In addition, the exhibits to the Affidavit of Robert Lanava dated
September 19, 2014 appear to have been inadvertently omitted from the Second
Supplemental Clerk’s Record. Given that the Second Supplemental Clerk’s
Record was filed just one day before the deadline to file this Amended Brief, rather
than seeking an additional extension of time to correct the district court clerk’s
filing, Gramercy has cited to identical copies of those exhibits included elsewhere
in the Clerk’s Record.
ix
App. – Appendix (i.e. App. [tab]; e.g. App. 1)
x
STATEMENT OF THE CASE
Nature of the Case: This appeal arises from the district court’s Order denying
Gramercy’s Amended Special Appearance.
Course of
Proceedings: Appellees filed an action against numerous defendants,
including Gramercy, regarding an alleged scheme to
defraud Appellees by inducing them to enter into certain
tax shelter transactions. Gramercy filed a Special
Appearance, and later an Amended Special Appearance,
contesting the court’s personal jurisdiction.
Trial Court: District Court of Harris County, Texas, 80th
Judicial District, Judge Larry Weiman
presiding; Case No. 2008-74262
Trial Court’s
Disposition: On May 30, 2014, Gramercy filed an Amended Special
Appearance. On October 17, 2014, the district court
entered an Order denying Gramercy’s Amended Special
Appearance.
xi
ISSUE PRESENTED
1. Did the district court err in denying Gramercy’s Amended Special
Appearance and exercising personal jurisdiction over Gramercy when Appellees
conceded Gramercy was not subject to general jurisdiction, and when there was
virtually no connection between Gramercy’s Texas contacts and the misconduct
forming the basis of Appellees’ claims?
xii
STATEMENT OF FACTS
I. APPELLEES AND BDO DEVISE THE TAX TRANSACTIONS
Appellees are ultra-wealthy businessmen who enjoyed large capital gains in
2000. CR 117 (Fifth Amended Petition (“FAP”) ¶ 83). Seeking to reduce their tax
liability on their multimillion-dollar earnings, Appellees approached defendant
below BDO USA, LLP (formerly known as BDO Seidman LLP) (“BDO”). CR
117 (FAP ¶ 84). At a September 26, 2000 meeting in Texas that Gramercy did not
attend, BDO suggested that Appellees execute a specific tax strategy it had
designed. CR 118-119 (FAP ¶ 86). Two well-known law firms that allegedly did
not attend the September 26, 2000 meeting, Sidley Austin, LLP (“Sidley Austin”)
and De Castro, West, Chodorow, Glickfeld & Nass, Inc. (“De Castro”), also
advised Appellees that they would benefit from the BDO-designed strategy. See,
e.g., CR 97-99 (FAP ¶¶ 43-44). Based on BDO’s representations at the September
26, 2000 meeting, Appellees decided to execute the tax transaction (the “Tax
Transaction”) designed by BDO.
II. GRAMERCY AGREES TO SOURCE EMERGING MARKET
ASSETS FOR APPELLEES’ TAX TRANSACTION, AND TO
ARRANGE SEPARATE INVESTMENT FUND INVESTMENTS
Gramercy’s role in the Tax Transaction was extremely limited and
peripheral because it is not an accounting or tax advisory firm. Gramercy is a
Connecticut-based asset management firm with particular expertise in emerging
markets. SSCR 4 (Affidavit of Robert Lanava dated Sept. 18. 2014 (“Lanava
1
Aff.”) ¶ 4). Gramercy’s reputation was known to BDO, which contacted Gramercy
and requested that it source emerging market and other assets for the Tax
Transaction. SSCR 8 (Lanava Aff. ¶ 20). Gramercy agreed to do so, but only on
the explicit condition that Appellees acknowledge Gramercy was not opining on,
or making representations as to, the effectiveness or legitimacy of the Tax
Transaction. CR 3646-3658 (Lanava Aff. Exs. 1-2).
Gramercy was introduced to Appellees at a November 2000 meeting in
Texas attended by Appellees, a Gramercy representative, Jay Johnston, and certain
BDO personnel. CR 3701-3702 (Affidavit of Jay Johnston dated July 18, 2014
(“Johnston Aff.”) ¶ 6). Mr. Johnston discussed Gramercy’s investment funds and
provided a description of the types of assets Gramercy would source for Appellees.
Id. Mr. Johnston did not discuss the tax aspects of the Tax Transaction or
speculate as to how the IRS might view the transaction. Id. Subsequent to the
November 2000 meeting, Appellees hired Gramercy to perform two separate tasks:
(1) acquire certain assets as directed by BDO for use in the Tax Transaction, and
(2) manage investments in some of Gramercy’s investment funds (the “Fund
Investments”). SSCR 8 (Lanava Aff. ¶ 21). This action arises from the IRS’s
ultimate decision to disallow Appellees any tax benefits from the Tax Transaction;
the litigation has nothing to do with the Fund Investments. CR 95-96 (FAP ¶ 39).
2
After the November 2000 meeting, Gramercy performed separate and
distinct tasks related to the two prongs of its engagement by Appellees:
Tax Transactions: In connection with the Tax Transactions (which
Appellees decided to engage in for the 2001-2005 tax years), Gramercy
acquired assets with characteristics determined by BDO. SSCR 8
(Lanava Aff. ¶¶ 21-22). Gramercy acquired these assets from either its
New York office (Gramercy was based in New York City from its
inception through mid-2001) or its Connecticut office (Gramercy has
been based in Connecticut since mid-2001). SSCR 9 (Lanava Aff. ¶¶ 25-
26). Gramercy reported the results of these transactions to Appellees’
independent accountants—BDO and Financial Strategy Group, PLC
(“FSG”)—who then prepared Appellees’ tax returns.2 SSCR 10-11
(Lanava Aff. ¶ 30). Gramercy did not execute any transactions related to
the Tax Transactions from Texas and all of the Tax Transaction trades
were processed through investment exchanges and banks located outside
of Texas. SSCR 8 (Lanava Aff. ¶ 22).
Fund Investments: In connection with the Fund Investments, Gramercy
managed Appellees’ investments; sent periodic account statements to
2
BDO prepared Appellees’ tax returns in its Chicago, Illinois headquarters.
SSCR 7 (Lanava Aff. ¶ 18). FSG prepared Appellees’ tax returns in its Memphis,
Tennessee office. SSCR 10-11 (Lanava Aff. ¶ 30).
3
Appellees and/or their advisors; and had occasional telephone calls with
Appellees and/or their advisors. SSCR 8, 9 (Lanava Aff. ¶¶ 21, 24). All
of these activities, which are unrelated to the Tax Transactions
underlying this lawsuit, were undertaken from Gramercy’s offices in
New York or Connecticut. SSCR 9 (Lanava Aff. ¶¶ 25-26). Gramercy
personnel also attended a limited number of meetings in Texas with
Appellees and/or their advisors at Appellees’ request in order to update
them on the performance of their Fund Investments or to discuss certain
investment opportunities unrelated to the Tax Transaction. SSCR 9; CR
3703 (Lanava Aff. ¶ 24; Johnston Aff. ¶ 8).
III. APPELLEES ACKNOWLEDGE THEY RECEIVED NO TAX
ADVICE FROM GRAMERCY
Gramercy’s performed its services for the Tax Transaction pursuant to an
Investment Management Agreement (“IMA”). Each of the investing Appellees
executed an IMA with Gramercy in it acknowledged in the plainest terms that
Gramercy had not rendered any advice concerning the tax implications of the
transactions in question:
[Gramercy] is not required to inquire into or take into
account the effect of any tax laws or the tax position of
[Appellee] in connection with managing the Account. To
the fullest extent permitted by law, neither [Gramercy],
its members or any of their respective affiliates and
their respective partners, members, officers, directors,
employees, shareholders and agents shall be liable in
4
any manner to [Appellee] with respect to the effect of
any U.S. federal, state, local or any other taxes of any
nature whatsoever on the Account of [Appellee] in
connection with managing the Account or in
connection with this Agreement or otherwise.
[Appellee] agrees that [it] has consulted [its] own tax
advisor regarding the possible tax consequences of
establishing the Account or entering into any investment
made under or in connection with this Agreement.
SSCR 10-11, CR 3650-3651 (Lanava Aff. ¶¶ 30, 32 and Ex. 1, ¶ 7(c) (emphasis
added)). Each of the IMAs has an integration clause and a New York choice-of-
law provision. CR 3653-3654 (Lanava Aff. Ex. 1, ¶¶ 14(a), 14(d)).
Similarly, in side “Belief Letters,” each investing Appellee explicitly
represented to Gramercy that
it has consulted with its own financial, tax and legal
advisors with respect to the Transactions and, in
particular, the effect of the tax laws and regulations
and the impact of any notices or announcements issued
by the IRS, (b) it has not relied on [Gramercy] for any
financial, tax or legal advice with respect to the
Transactions, and (c) it shall not have any claim against
[Gramercy] in the event that any tax liability, problem
or issue should arise in connection with the
Transactions other than as a direct result of any
negligence of [Gramercy] in effecting the investments
pursuant to the [IMA].
SSCR 10-11, CR 3657-3658 (Lanava Aff. ¶¶ 30, 33 and Ex. 2
(emphasis added)).
Additionally, each investing Appellee also executed an Interest Transfer
Agreement containing both a New York choice-of-law provision and a forum
5
selection clause in which the parties agreed to the non-exclusive jurisdiction of
courts located in New York City. SSCR 12, CR 3670 (Lanava Aff. ¶ 34 and Ex. 3
§ 9.5).
IV. THE IRS DISALLOWS ANY BENEFIT FROM THE TAX
TRANSACTION
Appellees’ tax returns for the 2001-05 tax years were prepared by BDO
and/or FSG. Gramercy had no role whatsoever in the preparation of those returns
other than supplying limited factual information to the relevant accounting
professional(s). SSCR 10-11 (Lanava Aff ¶ 30). After Appellees filed their tax
returns for the 2001-05 tax years, the IRS audited them. CR 184-185 (FAP ¶ 253).
Appellees claim the IRS has represented that they will be required to pay the taxes
they attempted to avoid through use of the Tax Transaction, and will also be
assessed penalties and interest. CR 185 (FAP ¶ 254).
V. APPELLEES COMMENCE LITIGATION IN A FORUM TO WHICH
GRAMERCY HAS VIRTUALLY NO CONNECTION
On December 18, 2008, Appellees initiated this lawsuit in Harris County,
Texas, seeking to make Gramercy the unwilling insurer of their inherently risky
Tax Transaction.3 Yet Gramercy has effectively no ties to Texas. Each Gramercy
3
The frivolousness of claims such as those Appellees assert in this case was
recently addressed by Judge Richard Posner of the United States Court of Appeals
for the Seventh Circuit, who labeled similarly situated persons “tax cheats” whose
sole aim was to avoid millions of dollars in federal income taxes. Thomas v. UBS
AG, 706 F.3d 846, 850 (7th Cir. 2013). Judge Posner referred to the lawsuit such
plaintiffs brought against the bank that maintained certain accounts for them
6
Defendant is a limited liability company organized under the laws of the State of
Delaware. SSCR 4, 5; CR 88-93 (Lanava Aff. ¶¶ 3, 4, 8; FAP ¶¶ 30-34). Prior to
2001, each Gramercy Defendant had its principal place of business in New York,
New York. SSCR 4 (Lanava Aff. ¶ 3). Since 2001, each Gramercy Defendant has
had its principal place of business in Greenwich, Connecticut. SSCR 4; CR 88-93
(Lanava Aff. ¶ 3; FAP ¶¶ 30-34). None of the Gramercy Defendants, nor any of
their members, has ever resided in Texas. SSCR 4, 5; CR 3701 (Lanava Aff. ¶¶ 4,
8; Johnston Aff. ¶¶ 3-4).
Gramercy does not transact business in Texas; does not maintain licensing
under the Texas foreign limited liability company laws to transact business here,
see Tex. Rev. Civ. Stat. Ann. art. 1528n § 7.01; is not required to, and thus does
not pay income or sales taxes in Texas; does not own or lease real or personal
property in Texas; does not maintain offices, bank accounts, telephone listings,
employees, or representatives in Texas; and does not advertise or affirmatively
solicit business in Texas by means of “cold calling” or other similar sales tactics.
outside the United States as a “travesty” and expressed surprise the defendant had
not asked for the imposition of sanctions. Id. at 854. Similarly, U.S. District Judge
William Pauley recently referred to tax shelter litigants such as Appellees as “real
estate tycoons, tire magnates and software developers” who refused to contribute
to the country that “made their achievements possible,” and further criticized “the
incredible greed of [these] super wealthy” individuals. Larson, Erik, Record $8
Billion Tax Fraud Gets Ex-Lawyer 15 Years, Bloomberg Businessweek, June 25,
2014, http://www.businessweek.com/news/2014-06-25/ex-lawyer- sentenced-to-
15-years-over-8-billion-tax-fraud.
7
SSCR 5-6; CR 3701 (Lanava Aff. ¶¶ 5-7, 9-12, 14; Johnston Aff. ¶¶ 4-5).
Additionally, none of Gramercy’s employees are professionally licensed in the
State of Texas. Id.
Gramercy operates a passive website which is not specifically directed to
persons in Texas. SSCR 6-7 (Lanava Aff. ¶¶ 14, 16-17). Gramercy’s website
merely provides information about Gramercy and general contact information for
its offices, none of which are located in Texas. Id. Gramercy’s website does not
allow for the direct purchase of any goods or services through the website. Id.
Gramercy has had a small number of Texas-based clients, but they comprise
a miniscule part of its business. From 2000 through 2008 (when Appellees filed
their initial complaint), Gramercy Advisors and Gramercy Financial Services were
the only Gramercy Appellants to have income derived from Texas clients.
Gramercy Advisors earned $150,000 from Texas-based clients in 2002 (the only
year it received income from Texas clients), representing seven-tenths of one
percent (.70%) of Gramercy Advisors’ income for that year. SSCR 7 (Lanava Aff.
¶ 18. Gramercy Financial Services earned $13,803 from Texas based clients in
2004 (the only year it received income from Texas clients), representing five-
hundredths of one percent (.05%) of Gramercy Financial Services’ income for
that year. Id. Gramercy did not have substantive conversations with BDO
8
personnel in Texas concerning the Tax Transactions. SSCR 8-9 (Lanava Aff. ¶
23).
VI. GRAMERCY SEEKS DISMISSAL FOR LACK OF PERSONAL
JURISDICTION
On May 6, 2009, Gramercy submitted a special appearance seeking
dismissal of all claims against it for lack of personal jurisdiction. CR 9-30 (Special
Appearance dated May 6, 2009). On November 11, 2011, Appellees filed a Fifth
Amended Petition, which is the operative pleading for purposes of this appeal. CR
80-214 (FAP dated Nov. 11, 2011). Although the FAP consists of 133 pages and
334 paragraphs and was filed after Gramercy gave notice of its intent to challenge
personal jurisdiction, it contains only the following boilerplate allegations as to
why jurisdiction over Gramercy is proper in Harris County, Texas:
This Court has personal jurisdiction over [Defendant]
pursuant to the constitution and laws of the United States
and the State of Texas. At all relevant times, [Defendant]
has done and is doing business in the State of Texas, but
does not maintain a regular place of business or current
designated agent upon whom service may be made in this
civil action. As described hereafter, [Defendant] has
contracted with a corporation through its Texas office,
and either party was to perform the contract in whole or
in part in the State of Texas. Additionally, [Defendant]
has committed torts, in whole or in part, in the State of
Texas, including intentional tortious acts directed at a
resident of the State of Texas where the brunt of the harm
was felt. [Defendant’s] conduct in the State of Texas has
been committed by officers, directors, employees, and/or
agents of [Defendant] acting within the scope of their
employment or agency. [Defendant] has purposefully
9
availed itself of the benefits and protections of the laws
of the State of Texas and could reasonably anticipate
being subject to the jurisdiction of courts of the State of
Texas. This suit against [Defendant] will not offend
traditional notions of fair play and substantial justice and
is consistent with due process of law. CR 88-89 (FAP ¶
30).
On May 30, 2014, in response to the FAP, Gramercy filed an Amended
Special Appearance, seeking dismissal of all claims against it for lack of personal
jurisdiction. CR 243-271 (Amended Special Appearance dated May 30, 2014).
On June 19, 2014, Appellees filed a Response to Gramercy’s Amended Special
Appearance, conceding that the court could not exercise general jurisdiction over
Gramercy, but nonetheless claiming it could exercise specific jurisdiction. CR 387
(Response dated June 19, 2014 at 43). Appellees’ Response sought to buffer the
conclusory and bare-bones jurisdictional allegations in the FAP with a half dozen
affidavits purporting to set forth jurisdictionally relevant facts.4 In reality,
however, Appellees’ affidavits concerned jurisdictional contacts other Defendants,
not Gramercy, had with Texas. Id. On July 22, 2014, Gramercy filed a Reply
scrutinizing the evidence submitted by Appellees and noting that it was insufficient
to give rise to personal jurisdiction. CR 3585-3632 (Reply).
4
See CR 446-452: Affidavit of David R. Deary dated June 16, 2014 (“Deary
Aff.”); CR 425-435: Affidavit of Russell A. Chabaud dated Feb. 28, 2014
(“Chabaud Aff.”); CR 1106-1117: Affidavit of R.K. Lowry, Jr. dated Feb. 17, 2014
(“Lowry Aff.”); CR 1122-1131: Affidavit of John P. Moffitt dated Feb. 10, 2014
(“Moffitt Aff.”); and CR 2084-2107: Affidavit of Newt Vannaman dated Feb. 18,
2014 (“Vannaman Aff.”).
10
VII. THE COURT BELOW REJECTS GRAMERCY’S AMENDED
SPECIAL APPEARANCE
On October 17, 2014, the district court held oral argument on Gramercy’s
Amended Special Appearance. RR 4 (Tr. at 4). Following that hearing, the district
court stated that it would exercise jurisdiction. RR 45 (Tr. at 45). The district
court later issued a written summary order denying Gramercy’s Amended Special
Appearance. App. A (Order dated Oct. 17, 2014). The district court did not offer
any explanation for its reasoning, nor any analysis of the record. On November 5,
2014, Gramercy filed a Request for Proposed Findings of Fact and Conclusions of
Law. CR 3765-3769. To date, the district court has not acted on that request, and
has never explained its reasons for denying Gramercy’s Amended Special
Appearance.5
SUMMARY OF THE ARGUMENT
The record below affords no basis for Texas courts to exercise personal
jurisdiction over Gramercy in this matter. Appellees have conceded that there is
no general jurisdiction over Gramercy, and accordingly bear the burden of showing
that their claims arise out of activities that Gramercy engaged in within Texas.
5
On January 27, 2015, this Court reversed the district court’s denial of a
special appearance by defendant FSG, finding its Texas contacts insufficient to
support a finding of personal jurisdiction. See Financial Strategy Group, PLC v.
R.K. Lowry, Jr. et al., No. 01-14-00273 (Tex. App. Houston—Jan. 27, 2015)
(unpublished), App. B.
11
Appellees failed to make such a showing in the district court, and indeed cannot do
so.
Gramercy does not have the minimum contacts with Texas necessary to
establish specific jurisdiction, and each and every argument that Appellees asserted
to the contrary below is infirm. By Appellees’ own account, Gramercy attended
just a single meeting with them prior to their decision to engage in the Tax
Transaction, and gave no tax advice at that meeting. Following the meeting,
Appellees signed written, integrated agreements acknowledging and promising that
Gramercy had given them no tax advice, and that they were not relying on
Gramercy for any such advice. Moreover, although Gramercy attended several
meetings with Appellees after the Tax Transaction, each involved Appellees’ Fund
Investments, which have nothing to do with this lawsuit, and in any case were held
at Appellees’ request. These facts preclude any finding that Gramercy duped
Appellees into engaging in the Tax Transaction, and establish that the district court
had no basis to exercise specific jurisdiction over Gramercy.
The Appellees note that Gramercy engaged in various activities and
communications related to the performance of its contractual
obligations. However, all that Appellees have established is that Gramercy
communicated with and rendered contractual performance to Texas residents from
outside of Texas. As a matter of law, that is insufficient to support specific
12
jurisdiction. Moreover, Appellees’ own contractual performance and
communications from Texas are irrelevant to whether Gramercy is subject to
specific jurisdiction here. Further, Gramercy’s transmission of information to
Appellees in Texas concerning their fund investments (as distinct from their Tax
Transaction investments) is unrelated to Appellees’ claims, and therefore
immaterial to specific jurisdiction. In addition, work Gramercy performed for, and
fees it received from, Texas clients other than Appellees are wholly irrelevant to
specific jurisdiction over Gramercy.
Finally, given the sparseness of Gramercy’s contacts with Texas, subjecting
it to personal jurisdiction would offend traditional notions of fair play and
substantial justice. The district court lacks personal jurisdiction over Gramercy
and erred in denying its Amended Special Appearance.
ARGUMENTS AND AUTHORITIES
I. GRAMERCY DOES NOT HAVE THE MINIMUM CONTACTS
WITH TEXAS NECESSARY TO ESTABLISH SPECIFIC
JURISDICTION.
To establish specific jurisdiction over Gramercy, Appellees must show that
it purposefully availed itself of the privilege of conducting activities within Texas,
and that their claims resulted from injuries that are alleged to arise from or relate to
Gramercy’s contacts with Texas. Moki Mac River Expeditions v. Drugg 221
S.W.3d 569, 575 (Tex. 2007). The nexus between the Texas contacts and the
operative facts of the litigation must be “substantial,” such that the defendant’s
13
forum contacts “will be the focus of the trial.” Id. Moreover, there are three
elements to the purposeful availment inquiry: (1) only the defendant’s contacts
with the forum are relevant, not the unilateral activity of another party or third
person; (2) the contacts must be purposeful instead of merely fortuitous; and (3)
through the contacts the defendant must be seeking some benefit, advantage, or
profit. Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex.
2005). “[A] nonresident may purposefully avoid a particular jurisdiction by
structuring its transactions so as neither to profit from the forum’s laws nor be
subject to its jurisdiction.” Id.
Appellees argued below that Gramercy had various types of contact with
Texas that were sufficient to give rise to specific jurisdiction. Yet the district court
made no specific finding of any connection between any of Gramercy’s alleged
Texas contacts and Appellees’ claims in the FAP. Moreover, the record is devoid
of evidence or allegations sufficient to establish such a connection.
A. Gramercy’s Attendance at Meetings in Texas Does Not Give
Rise to Jurisdiction.
Appellees argued below that Gramercy’s attendance at various meetings in
Texas, at which the Tax Transaction was purportedly discussed, was sufficient to
14
give rise to jurisdiction. Close examination of Appellees’ own accounts of the
meetings, however, contradicts their position.6
1. The Pre-Investment Meeting.
Appellees argued below that one Gramercy representative, Jay Johnston,
attended a single pre-investment meeting in Texas in November 2000 related to
their Tax Transaction, thus giving rise to specific jurisdiction. Yet Appellees’ own
account of that meeting in the record below reveals that Mr. Johnston made no
representations about the Tax Transaction.7 Specifically, Appellees’ affidavits
show that Paul Shanbrom of BDO led the meeting and made every single tax-
related representation:
“Shanbrom also made specific recommendations about the amount of
money [Appellees] should invest to maximize [their] tax savings.” CR
2087; CR 428; CR 1109; CR 1124 (Vannaman Aff. ¶ 11; Chabaud
Aff. ¶ 11; Lowry Aff. ¶ 11; Moffitt Aff. ¶ 10 (emphasis added)).
“Shanbrom made it clear that the distressed debt transactions
implemented by Gramercy were intended to take advantage of
purportedly legal tax loopholes to offset [Appellees’] anticipated tax
liability.” CR 2087-2088; CR 428; CR 1109-1110 (Vannaman Aff. ¶
12; Chabaud Aff. ¶ 12; Lowry Aff. ¶ 12 (emphasis added)).
6
Any Gramercy personnel who attended meetings in Texas with Appellees or
their representatives did so solely in their capacity as employees of Gramercy
Advisors LLC. SSCR 9; CR 3704 (Lanava Aff. ¶ 24; Johnston Aff. ¶ 10).
Accordingly, to the extent this Court finds such meetings relevant, that relevance is
limited to the Court’s ability to assert personal jurisdiction over Defendant-
Appellant Gramercy Advisors LLC alone.
7
Gramercy attended the meeting at the request of BDO and/or Appellees. CR
3703 (Johnton Aff. ¶ 8).
15
“Shanbrom led the discussion about how the tax savings were derived
. . . .” CR 2087; CR 428; CR 1109; CR 1124 (Vannaman Aff. ¶ 11;
Chabaud Aff. ¶ 11; Lowry Aff. ¶ 11; Moffitt Aff. ¶ 10 (emphasis
added)).
“Shanbrom repeatedly told [Appellees] that the distressed debt
transactions were legal.” CR 2088; CR 428-429; CR 1110; CR 1125
(Vannaman Aff. ¶ 13; Chabaud Aff. ¶ 13; Lowry Aff. ¶ 13; Moffitt
Aff. ¶ 12 (emphasis added)).
Shanbrom said that if the IRS challenged the validity of the distressed
debt strategy, [Appellees] would prevail.” CR 2088; CR 428-429; CR
1110; CR 1125 (Vannaman Aff. ¶ 13; Chabaud Aff. ¶ 13; Lowry Aff.
¶ 13; Moffitt Aff. ¶ 12 (emphasis added)).
“Shanbrom told [Appellees] that Sidley Austin, a reputable law firm,
would issue ‘independent’ opinion letters confirming the propriety of
the distressed debt strategy. Shanbrom touted R.J. Ruble, a partner at
Sidley Austin, as the recognized expert on distressed debt strategies.”
CR 2088; CR 428-429; CR 1110; CR 1125 (Vannaman Aff. ¶ 13;
Chabaud Aff. ¶ 13; Lowry Aff. ¶ 13; Moffitt Aff. ¶ 12 (emphasis
added)).
“According to Shanbrom, Ruble would draft the opinion letters that
would overcome any IRS challenge and would provide absolute
penalty protection.” CR 2088; CR 428-429; CR 1110; CR 1125
(Vannaman Aff. ¶ 13; Chabaud Aff. ¶ 13; Lowry Aff. ¶ 13; Moffitt
Aff. ¶ 12 (emphasis added)).
These unequivocal, considered statements by Appellees Lowry, Chabaud,
and Moffitt, as well as their accountant Vannaman, establish that Shanbrom alone
made any tax-related representations at the November 2000 meeting. Mr. Johnston
is alleged merely to have “confirm[ed] the details” and “discussed how Gramercy
made the distressed debt investment and the types of distressed debt assets
16
involved.” CR 2087; CR 428; CR 1109; CR 1124 (Vannaman Aff. ¶ 11; Chabaud
Aff. ¶ 11; Lowry Aff. ¶ 11; Moffitt Aff. ¶ 10). Appellees’ affidavits even concede
that Gramercy was only involved in discussions concerning the amount of taxes
Appellees sought to avoid to ensure that “Gramercy had enough distressed debt
assets to meet BDO’s recommendations and [Appellees’] needs.” CR 2087; CR
428; CR 1109; CR 1124 (Vannaman Aff. ¶ 11; Chabaud Aff. ¶ 11; Lowry Aff. ¶
11; Moffitt Aff. ¶ 10) (emphasis added); see also CR 3701-3702 (Johnston Aff. ¶
6).
To give rise to specific jurisdiction, a defendant’s contacts with the forum
must be specifically actionable in themselves. The crux of the Fifth Amended
Petition is that Gramercy sold Appellees faulty tax advice, yet they do not claim
Mr. Johnston made any of the tax-related statements that form the basis for their
claims at the November 2000 Texas meeting. Accordingly, any other statements
Mr. Johnston did make at that meeting are irrelevant to specific jurisdiction.8 See,
e.g., Gustafson v. Provider HealthNet Servs., Inc., 118 S.W.3d 479, 484 (Tex.
App.—Dallas 2003, no pet.) (several Texas meetings involving defendant’s
8
Even if Gramercy’s statements at the pre-investment meeting played some
role in Appellees’ decision to pursue the Tax Transaction, those statements are not
substantially related to Appellees’ claims that they were sold an inherently faulty
tax strategy, as Gramercy never made any representations regarding that strategy.
See Farwah v. Prosperous Mar. Corp., 220 S.W.3d 585, 597 (Tex. App.—
Beaumont 2007, no pet.) (that plaintiff’s claimed “injuries would not have
occurred ‘but for’ [defendant’s] presence in Texas” held insufficient to create
substantial connection between wrongful conduct and forum contacts).
17
representative insufficient to give rise to specific jurisdiction where plaintiff did
not allege representative “breached any duties to it or committed any torts during
these meetings”); Marathon Oil v. A.G. Ruhrgas, 182 F.3d 291, 295 (5th Cir.
1999) (no specific jurisdiction over non-resident defendant that attended three
meetings in Texas relating to gas sales contract over which plaintiff sued where
there was no evidence defendant made false statements at meetings); Moki Mac,
221 S.W.3d at 585 (in-state representations insufficient to give rise to specific
jurisdiction unless actionable in themselves, even where generally related to the
subject matter of the case); Turan v. Universal Plan Inv. Ltd., 70 F. Supp. 2d 671,
674 (E.D. La. 1999) aff’d in rel. part sub nom. 248 F.3d 1139 (5th Cir. 2001)
(“Travels to business meetings [in the forum], conversations on the telephone, and
correspondences by mail are not sufficient to establish minimum contacts unless
there is evidence that the plaintiffs’ claims directly arise from those specific
activities.”); Bozell Grp., Inc. v. Carpet Co-op of Am. Ass’n, Inc., 00 CIV. 1248
(RWS), 2000 WL 1523282, at *7 (S.D.N.Y. Oct. 11, 2000) (declining to exercise
specific jurisdiction over defendant who attended meetings in forum with plaintiff;
although meetings were related to plaintiff’s claims, court deemed them “mere
links in the chain of events leading to the claims for which relief is sought”).9
9
Moreover, because the conspiracy alleged by Appellees was, even according
to them, formed outside of Texas and well before the November 2000 meeting,
Mr. Johnston’s single pre-investment trip to Texas cannot give rise to specific
18
Crucially, even if Mr. Johnston did make tax-related statements at the
November 26, 2000 meeting with Appellees, that still would not be sufficient to
establish specific jurisdiction, because Appellees repeatedly acknowledged in
writing after that meeting that (i) Gramercy had not rendered any opinion or
advice on the tax implications of the transactions effectuated for Appellees; and (ii)
Appellees were relying on their tax and legal advisors—not Gramercy—
concerning the tax aspects of their investments. CR 3650-3651; CR 3657-3658
(Lanava Aff. Ex. 1, ¶ 7(c); Lanava Aff. Ex. 2); see also Facts § III, supra. Those
acknowledgements were contained in IMAs that included integration clauses. CR
3653 (Lanava Aff. Ex. 1, ¶ 14(a)). Those acknowledgements establish that no
prior tax-related representations by Gramercy can give rise to their claims, and thus
that they are insufficient to establish specific jurisdiction. See, e.g., Moki Mac, 221
S.W.3d at 585 (representations insufficient to give rise to specific jurisdiction
unless actionable in themselves, even where generally related to the subject matter
of the case).
jurisdiction. See Hotel Partners v. Craig, 993 S.W.2d 116, 122 (Tex. App.—
Dallas 1994, pet. denied) (no jurisdiction over defendant attorney who visited
Texas for meetings with plaintiffs concerning resort manager with whom he
allegedly conspired, where allegations demonstrated that purported conspiracy
arose and was conducted outside Texas and not purposefully directed at Texas).
The pre-investment meeting in Texas was not even decisive in forming the parties’
relationship, because Appellees subsequently traveled to New York to meet with
Gramercy before deciding to invest with it. SSCR 10 (Lanava Aff. ¶ 27).
19
To the extent Appellees seek to conflate BDO’s actions and statements at
the November 26, 2000 meeting (or at any other time) with Gramercy’s on the
grounds that they conspired together, those efforts are unavailing. Texas courts
reject attempts to blur the jurisdictional contacts of separate defendants on the
basis that they are engaged in a conspiracy. See Nat’l Indus. Sand Ass’n v. Gibson,
897 S.W.2d 769, 773 (Tex. 1995) (rejecting conspiracy theory of jurisdiction); In
re Stern, 321 S.W.3d 828, 841 (Tex. App.—Houston [1st Dist.] 2010, no pet.)
(personal jurisdiction inquiry limited to whether “the defendant itself purposefully
established minimum contacts such as would satisfy due process”); Asshauer v.
Farallon Capital Partners, L.P., 319 S.W.3d 1, 17 (Tex. App.—Dallas 2008, no
pet.) (“the supreme court has declined to recognize the assertion of personal
jurisdiction over a nonresident defendant based solely on the effects or
consequences of an alleged conspiracy [even] with a resident of the forum state”)
(citations omitted). Accordingly, the only question before this Court is whether
Gramercy itself has sufficient contacts with Texas to be subject to jurisdiction, not
whether any other Defendant below had such contacts, regardless of any alleged
“conspiracy.”
2. The Post-Investment Meetings.
Appellees also argued below that Gramercy attended several post-
investment meetings in Texas, and that those were sufficient to give rise to specific
20
jurisdiction. The meetings at issue, however, were held for the sole purpose of
updating them on their separate Fund Investments with Gramercy. CR 3703
(Johnston Aff. ¶ 8). The meetings thus have nothing to do with this case, and
cannot form the basis for specific jurisdiction. See, e.g., Turan v. Universal Plan
Investments Ltd., No. 99-31379, 2001 WL 85902, at *2 (5th Cir. Jan. 24, 2001)
(“Business meetings in the forum state and related communications … are not
sufficient to establish the requisite ‘minimum contacts’ unless Appellants’ claims
arose from those activities”); Lang v. Capital Res. Investments, I, LLC, 102 S.W.3d
861, 866 (Tex. App.—Dallas 2003, no pet.) (meeting with defendant in Texas to
discuss business plan did not confer specific jurisdiction where plaintiff’s claims
concerned defendant’s mismanagement of company, not business plan or any
statements made by defendant at meeting).
The meetings were also requested by Appellees, not Gramercy, and are
insufficient to give rise to specific jurisdiction for that reason as well. Magnolia
Gas Co. v. Knight Equip. & Mfg. Corp., 994 S.W.2d 684, 688, 691 (Tex. App.—
San Antonio 1998) (defendants’ travel to Texas for meetings they did not instigate
insufficient to give rise to specific jurisdiction), abrogated on other grounds, BMC
Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002).
21
B. Gramercy’s Contractual Performance Outside Texas
Cannot Establish Personal Jurisdiction.
Appellees argued below that Gramercy is subject to personal jurisdiction
because it entered into contracts with Texas residents. As a matter of law, such
contacts are irrelevant. A non-resident’s out-of-state contractual performance
pursuant to a contract entered into with Texas residents does not subject the out-of-
state defendant to personal jurisdiction. See IRA Resources, Inc. v. Griego, 221
S.W.3d 592, 595 (Tex. 2007) (reversing denial of special appearance by California
investment advisor who performed work for Texas residents from its California
office); Proskauer Rose LLP v. Pelican Trading, Inc., 14-08-00283-CV, 2009 WL
242993, at *5 (Tex. App.—Houston [14th Dist.] Feb. 3, 2009, no pet.) (New York
law firm not subject to personal jurisdiction where law firm drafted opinion letter
for Texas tax shelter client because preparation of letter was done in New York,
not Texas); Markette v. X-Ray X-Press Corp., 240 S.W.3d 464, 468 (Tex. App.—
Houston [14th Dist.] 2007, no pet.) (affirming special appearance of Indiana law
firm where advisory work allegedly giving rise to lawsuit was performed in
Indiana, not Texas, despite communication of results of work to plaintiffs in
Texas). Gramercy performed its contractual obligations outside of Texas, and
22
therefore its performance cannot form a basis for personal jurisdiction.10 SSCR 9
(Lanava Aff. ¶¶ 25, 26).
Appellees’ argument to the district court that Gramercy is subject to personal
jurisdiction because the relevant contracts contemplated a long-term agreement
between the parties is likewise without merit. Appellees executed new
transactional documents with Gramercy for each tax year in which they pursued
their BDO-designed tax strategy. See, e.g., CR 2126-2132, CR 2136-2201, CR
2208-2299, CR 2300-2318, CR 2378-2682, CR 2841-2923, CR 3085-3204, CR
3209-3464; CR 1300-1590, CR 1601-1718 (Vannaman Aff. Exs. 3, 5-10, 14-19,
20-24, 42, 47, 54-59, 62-79; Affidavit of Todd Simmens dated May 22, 2014
(“Simmens Aff.”), Exs. 12-14, 18-20).11 That fact utterly belies their argument
10
Moreover, Gramercy executed the contracts at issue in New York or
Connecticut. SSCR 11-12 (Lanava Aff. ¶¶ 32, 34-35). And all transactions
executed by Gramercy concerning the Tax Transaction were executed from New
York or Connecticut and processed through exchanges in New York or overseas.
SSCR 8-9 (Lanava Aff. ¶¶ 22, 26). Gramercy did not execute a single trade or
transaction with regard to the Tax Transaction from Texas or that was processed or
cleared through Texas. Id.
11
The Harris County District Clerk mistakenly included the Affidavit of Todd
Simmens dated June 13, 2014 in the Clerk’s Record, rather than the Affidavit of
Todd Simmens dated May 22, 2014. See CR 1136-1138. (The Affidavit dated
June 13, 2014 is included twice in the Clerk’s Record, at CR 1136-1138 and CR
2074-2076.) Nonetheless, the exhibits to the May 22, 2014 Simmens Affidavit are
included in the Clerk’s Record, and accordingly are cited herein.
23
that the parties intended to enter into a long-term agreement.12 In any event, even a
long-term agreement is insufficient to give rise to specific jurisdiction where, as
here, the defendant’s forum contacts were not actionable in themselves. Marathon
Oil v. A.G. Ruhrgas, 182 F.3d at 295 (requiring specifically actionable misconduct
to exercise specific jurisdiction); Moki Mac, 221 S.W.3d at 585 (same).
C. Appellees’ Performance Of Contractual Obligations In
Texas Cannot Give Rise to Jurisdiction Over Gramercy.
Appellees argued that their performance under their contracts with
Gramercy—which amounted to wiring money from Texas to accounts in New
York and elsewhere—is sufficient to give rise to specific jurisdiction. That is
incorrect; only Gramercy’s contacts with Texas are relevant to a determination of
whether it is subject to personal jurisdiction. See Walden v. Fiore, 134 S. Ct.
1115, 1125-26 (2014) (contacts relevant to jurisdictional analysis are those
between defendant and forum state, not those that may exist between plaintiff and
forum state); KC Smash 01, LLC v. Gerdes, Hendrichson, Ltd., L.L.P., 384
S.W.3d 389, 394 (Tex. App.—Dallas 2012, no pet.) (plaintiffs’ performance in
Texas cannot be considered factor in determining whether defendant subject to
personal jurisdiction); Griego, 221 S.W.3d at 597 (accepting money from Texas
resident to open financial account insufficient to confer jurisdiction). That certain
12
Moreover, Gramercy executed the transactions Appellees requested to
implement their tax strategy in a short period of time near the end of each calendar
year. SSCR 8 (Lanava Aff. ¶ 22).
24
agreements were signed by Appellees in Texas is also jurisdictionally irrelevant.
See Bryan v. Gordon, 384 S.W.3d 908, 917 (Tex. App.—Houston [14th Dist.]
2012, no pet.) (“disposition of the jurisdictional question should not turn on”
where a plaintiff signed a contract).
D. Gramercy’s Activities Concerning Appellees’ Tax Strategy
And Fund Investments Cannot Give Rise To Specific
Jurisdiction.
1. Gramercy’s Ministerial Execution of Transactions
Necessary To Effectuate The Tax Transactions,
And Its Management Of Entities Involved In The
Tax Transactions, Do Not Give Rise To Specific
Jurisdiction.
Appellees argued below that Gramercy’s execution of transactions pursuant
to certain Subscription Agreements gives rise to jurisdiction. This argument is
without merit. The Subscription Agreements, see, e.g., CR 2208-2299 (Vannaman
Exs. 14-19), facilitated the transfer of assets as part of Appellees’ Tax Transaction.
SSCR 12 (Lanava Aff. ¶ 35). Yet the agreements and related transactions had
nothing to do with Texas. Pursuant to the agreements, assets were moved from
one New York investment account to another New York investment account. CR
2221-2222, CR 2236-2237, CR 2251-2252, CR 2266-2267, CR 2281-2282, CR
2296-2297 (Vannaman Exs. 14-19 at Appendix A). The Subscription Agreements
also arranged for funds to be wired through a bank account outside of Texas for the
benefit of the New York investment accounts. CR 2221-2222, 2210-2211, CR
2236-2237, 2225-2226, CR 2251-2252, 2240-2241, CR 2266-2267, 2255-2256,
25
CR 2281-2282, 2270-2271, CR 2296-2297, 2285-2286 (Vannaman Exs. 14-19 at
Appendix A, at 2-3). The Subscription Agreements were sent to Gramercy’s New
York City office, where Gramercy’s performance pursuant to the agreements took
place. CR 2221-2222, 2210, CR 2236-2237, 2225, CR 2251-2252, 2240, CR
2266-2267, 2255, CR 2281-2282, 2270, CR 2296-2297, 2285; SSCR 9, 12
(Vannaman Exs. 14-19 at Appendix A, at 2; Lanava Aff. ¶¶ 25, 35). The
Subscription Agreements therefore fail to provide a basis for the exercise of
jurisdiction over Gramercy in Texas. See, e.g., Markette, 240 S.W.3d at 468 (out-
of-state contractual performance insufficient to establish personal jurisdiction,
despite communication of results of work to plaintiffs in Texas).
Appellees argued that Gramercy played a role in various limited liability
companies that implemented the Tax Transaction, thus giving rise to specific
jurisdiction. That argument is baseless. First, Appellees alleged that Gramercy
played a role in managing four of the entities that implemented the Tax
Transaction (LMC, MPICS, RDICTD, and SGASSI). Even taking that allegation
as true, all four companies were formed in Delaware, not Texas.13 Similarly,
Appellees argued that Gramercy held a 10% interest in several entities involved in
13
See CR 1233; CR 1732; CR 1784; CR 1836 (Simmens Aff. Ex. 2 at BDO
Lowry Court 0000399 (LMC a “Delaware limited liability company”); Simmens
Aff. Ex. 22 at BDO Lowry Court 0004662 (MPICS a “Delaware limited liability
company”); Simmens Aff. Ex. 24 at BDO Lowry Court 0004811 (SGASSI a
“Delaware limited liability company”); Simmens Aff. Ex. 26 at BDO Lowry Court
0005002 (RDICTD a “Delaware limited liability company”)).
26
the Tax Transaction (STKEE, DSAMP, and WAINKR). Yet those were Delaware
limited liability companies.14 Accordingly, Gramercy’s involvement with these
entities is irrelevant to the jurisdictional analysis.
2. Preparation Of Appellants’ Tax Returns Is
Irrelevant To Personal Jurisdiction Over
Gramercy.
Appellees argued that Gramercy’s purported role in preparing tax returns
reflecting their tax strategy is sufficient to give rise to specific jurisdiction. In fact,
the record evidence was undisputed that BDO prepared the tax returns reflecting
Appellees tax strategy for 2000 and 2001, while FSG prepared them for 2002
through 2004).15 Gramercy did not prepare the returns. SSCR 10-11 (Lanava Aff.
¶ 30). Gramercy’s only role with regard to the preparation of Appellees’ taxes was
to transmit raw financial information to either BDO’s New York office or to FSG’s
Memphis, Tennessee office. SSCR 10-11 (Lanava Aff. ¶ 30). The information
provided by Gramercy reflected the results of Gramercy’s ministerial execution of
14
See CR 3224; CR 3266; CR 3308 (Vannaman Aff. Ex. 68 at VANN0007253
(STKEE a “Delaware limited liability company); Vannaman Aff. Ex. 69 at
VANN0007592 (DSAMP a “Delaware limited liability company); Vannaman Aff.
Ex. 70 at VANN0007910 (WAINKR a “Delaware limited liability company)).
15
See, e.g., CR 2326; CR 2689; CR 2787; CR 3005; CR 3466; CR 3488; CR
3510 (Vannaman Exs. 28 at VANN0003025 (2000 return prepared by BDO); 44 at
VANN0003107 (2001 return prepared by BDO); 45 at VANN0003414 (2002
return prepared by FSG); 51 at VANN0003595 (2003 return prepared by FSG); 80
at GA0328286 (2004 tax return prepared by FSG); 81 at GA0328307 (2004 tax
return prepared by FSG); and 82 at GA0328328 (2004 tax return prepared by
FSG)).
27
transactions from either New York or Connecticut and with counterparties in New
York. Id.
As a matter of law, Appellees’ allegations are insufficient to give rise to
specific jurisdiction. Any work performed by Gramercy (or indeed, BDO and
FSG) on the tax returns was performed outside of Texas, thus rendering it
irrelevant to the personal jurisdiction analysis. See Markette, 240 S.W.3d at 468
(affirming special appearance of Indiana law firm where advisory work allegedly
giving rise to lawsuit was performed in Indiana, not Texas, despite communication
of results of plaintiffs in Texas). Further, Appellees’ claims arise from the content
of the returns (for which BDO and FSG are responsible), not their delivery, see CR
96-97 (FAP ¶¶ 40-41), and Gramercy’s transmission of any returns to Texas is
accordingly irrelevant. See Griego, 221 S.W.3d at 598 (IRA administrator’s acts
of “accepting payment for opening [an] account, and sending [forum plaintiff]
periodic account statements … are too inconsequential to support a claim that it
purposefully directed its activities” at Texas); Johnson v. Pounds, 11-07-00073-
CV, 2008 WL 3845450, at *5 (Tex. App.—Eastland, Aug. 14, 2008, pet. denied)
(affirming special appearance where plaintiff failed to establish that causes of
action arose from defendants’ contacts with Texas). And as noted, Appellees
specifically disclaimed reliance on any tax-related statements Gramercy could have
28
made, rendering them irrelevant to Appellees’ claims against Gramercy, and to
specific jurisdiction. See § I-A, supra.
3. The Gramercy Defendants Earned No Fees From
Appellees, And Their Earnings From Other Texas
Residents Are Jurisdictionally Irrelevant.
Appellees contended that Gramercy earned millions of dollars in fees from
implementing the Tax Transaction, thus giving rise to personal jurisdiction. That
argument is flat wrong. None of the Gramercy entities that are parties to this case
received income from the Appellees.16 SSCR 7 (Lanava Aff. ¶ 18). And even if
they had, that would be insufficient to establish jurisdiction. Griego, 221 S.W.3d
at 597 (accepting money from Texas resident to open financial account insufficient
to confer jurisdiction over out-of-state defendant).
Further, with respect to Gramercy’s earnings from Texas residents
unconnected to this case, Plaintiffs have conceded the issue of general jurisdiction,
so any such earnings are irrelevant.17 See generally Marathon Oil, 182 F.3d at 295
16
Appellees paid any fees relating to the Tax Transaction to Gramercy
Financial Products LLC (“GFP”), not to any of the Gramercy Defendants. CR
2077-2083 (Simmens Aff. re: Payments Ex. 1). GFP is a separate entity from any
of the Defendants and it is not a party to the lawsuit. SSCR 7 (Lanava Aff. ¶ 19).
Any payments received by GFP are therefore immaterial in determining whether
any of the Gramercy Defendants are subject to personal jurisdiction. See
Cornerstone Healthcare Group Holding, Inc. v. Reliant Splitter, L.P., 05-11-
01730-CV, 2014 WL 2538881, at *3-4 (Tex. App—Dallas Jun. 5, 2014) (granting
special appearance of corporate entity where entity in question did not have
jurisdictionally relevant ties to Texas, despite ties of subsidiary).
17
In any case, two of the Gramercy defendants (Gramercy Asset Management
and Gramercy Local Markets Recovery Fund) received no income from any Texas
29
(requiring specifically actionable misconduct to exercise specific jurisdiction);
Moki Mac, 221 S.W.3d at 585 (same).
4. Gramercy’s Transmission of Account Statements
To Appellees Does Not Support A Finding of
Specific Jurisdiction.
Appellees asserted that Gramercy’s transmission of account statements into
Texas supports a finding of specific jurisdiction. The account statements at issue,
however, solely concerned Appellees’ Fund Investments, not their Tax
Transaction. See, e.g. CR 2105 (Vannaman Aff. ¶ 54 (stating that “these email
‘flash’ previews of investment returns related to the non-tax reducing
investments”) (emphasis added)). Because this information concerned Fund
Investments wholly separate from the Tax Transaction that is the basis of
Appellees’ complaint, it is irrelevant to determining whether Gramercy is subject
to specific jurisdiction. See, e.g., Moki Mac, 221 S.W.3d at 569 (no specific
jurisdiction where subject of meetings distinct from issues in litigation); Marathon
Oil, 182 F.3d at 295 (same).
clients during the relevant time period. SSCR 7 (Lanava Aff. ¶ 18). The two
Gramercy Defendants that did receive income from Texas clients—Gramercy
Advisors and Gramercy Financial Services—received very small amounts and
percentages of their income from any Texas clients (let alone Appellees).
Gramercy Advisors earned $150,000 from Texas based clients in 2002 (the only
year from 2000-2008 in which it received income from Texas clients), representing
seven-tenths of one percent (.70%) of Gramercy Advisors’ income for that year.
Id. Gramercy Financial Services earned $13,803 in 2004 (the only year between
2000 and 2008 it received income from Texas clients), representing five-
hundredths of one percent (.05%) of Gramercy Financial Services’ income for that
year.
30
Moreover, even if the account statements at issue were relevant to
Appellees’ claims (which they are not), mere communication with a Texas resident
does not subject a nonresident defendant to jurisdiction. Olympia Capital
Associates L.P. v. Jackson, 247 S.W.3d 399, 418 (Tex. App.—Dallas 2008, no
pet.) (nonresident defendants’ transmission of investment statements and other
contract-related communications to Texas plaintiff “insufficient to establish the
minimum contacts necessary to support the exercise of specific personal
jurisdiction”).
Appellees also contended below that Gramercy’s maintenance of a website
containing certain Fund Investment account information is sufficient to give rise to
specific jurisdiction. In fact, the website merely contained information identical to
records Gramercy had already been providing to Appellees via mail and/or e-mail,
viewable on a password-protected basis. SSCR 6-7 (Lanava Aff., ¶¶ 16-17).
Appellees could take no action via the website. Id. These facts rendered the
website “passive” in nature and irrelevant to the jurisdictional analysis. Riverside
Exports, Inc. v. B.R. Crane & Equip., LLC, 362 S.W.3d 649, 655 (Tex. App.—
Houston [14th Dist.] 2011, pet. denied) (“Absent evidence that a business intends
to serve the Texas market, a website that is merely informational, presenting only
‘passive advertising,’ generally will not support the exercise of personal
jurisdiction.”); Washington DC Party Shuttle, LLC v. IGuide Tours, 406 S.W.3d
31
723, 737 (Tex. App.—Houston [14th Dist.] 2013), review denied (Aug. 22, 2014)
(passive website is one “in which the foreign defendant has simply posted
information on a website that can be viewed in other jurisdictions” and noting such
websites do not support the exercise of personal jurisdiction.”) (citation omitted).
5. Gramercy’s Limited Communications with
Appellees Do Not Give Rise to Jurisdiction.
Finally, Appellees contended before the district court that Gramercy is
subject to jurisdiction because it communicated consistently with them and their
representatives in Texas about various matters relating to the Tax Transactions.
See, e.g., CR 2090-2103 (Vannaman Aff. ¶¶ 20-21, 23-24, 26-29, 31-39, 41-47,
49-51). As a general matter, Appellees’ jurisdictional arguments concerning
Gramercy’s purported role in preparing their tax returns, attendance at meetings in
Texas, and performing under the parties’ agreements are without merit for reasons
addressed in §§ I-A, I-B, and I-D, supra. Beyond that, the communications
Appellees allege are insufficient to confer jurisdiction because they are limited to
the following:
Gramercy sent two faxes to Texas, one concerning an interest
purchase agreement and another transmitting a tax return extension.
CR 2095, 2098-2099 (Vannaman Aff. ¶¶ 32, 39).
Gramercy sent ten emails to Texas containing draft transaction
documents and the routine management of various out-of-state
companies. CR 2100, 2101, 2103 (Vannaman Aff. ¶¶ 43, 45, 50).
32
Gramercy participated in two phone calls with Appellees’ advisor
concerning transactions implementing their tax strategy. CR 2095
(Vannaman Aff. ¶ 32).
In sum, Appellees point only to two faxes, ten emails, and two phone calls in
five years to support their “consistent communications” argument, and even those
limited communications concerned work performed by Gramercy (or others)
outside of Texas.18 Such communications do not give rise to jurisdiction. See KC
Smash, 384 S.W.3d at 393 (nonresident defendant’s “telephone and email
communications and the sending of payments to [forum resident] do not
“constitute a contact demonstrating purposeful availment”); Olympia Capital
Associates, L.P. 247 S.W.3d at 418 (“[E]ngaging in communications related to the
execution and performance of [a] contract [between nonresident defendant and
forum resident] are insufficient to establish the minimum contacts necessary to
support the exercise of specific personal jurisdiction over the nonresident
defendant.”); Proskauer, 2009 WL 242993, at *4 (mailing documents to Texas
18
Appellees also alleged vaguely that their accountant, Vannaman, received
“hundreds of mailings from Gramercy.” CR 2101 (Vannaman Aff. ¶ 46). To the
extent such mailings have not been included in the record, this assertion is
conclusory and meaningless. Beyond that, it is impossible to determine whether
the subject matter of the purported communications relates in any way to
Appellees’ claims such that the district court can exercise specific jurisdiction over
Gramercy. Indeed, by Vannaman’s own admission, many of the purported
mailings concerned Appellees’ Fund Investments (which are concededly not at
issue in this case).
33
client and email exchanges with Texas client insufficient to give rise to
jurisdiction).
E. Gramercy’s Work on Behalf of Other Texas Clients is
Irrelevant.
Appellees argued that Gramercy’s involvement with other Texas clients
confers jurisdiction, but that argument is unavailing. As noted above, Appellees do
not allege that Gramercy is subject to general jurisdiction. See Facts § VI, supra.
Accordingly, the only contacts between Gramercy and Texas potentially relevant
to resolution of Gramercy’s Special Appearance are those that relate to the instant
lawsuit. See Grand Aerie Fraternal Order of Eagles v. Haygood, 402 S.W.3d 766,
774 (Tex. App.—Eastland 2013, no pet.) (holding defendant not subject to specific
jurisdiction and stating that “[i]n a specific jurisdiction analysis, the relevant facts
concern the relationship between the nonresident defendant and the forum that are
connected to the lawsuit.”); McElroy Machine & Mfg. Co., Inc. v. Flores, 13-08-
00528-CV, 2010 WL 466901, at *4 (Tex. App.—Corpus Christi Feb. 11, 2010, no
pet.) (specific jurisdiction lacking where defendants’ contacts with the forum state
not connected to operative facts of the litigation). The Fifth Amended Petition
contains no allegations that Gramercy’s work for Texas investors unrelated to
Appellees somehow gave rise to Appellees’ causes of action, and accordingly any
such work is irrelevant.
34
II. THE EXERCISE OF JURISDICTION OVER GRAMERCY WOULD
BE INCONSISTENT WITH DUE PROCESS.
Exercising personal jurisdiction over Gramercy would offend traditional
notions of fair play and substantial justice and would be inconsistent with the
constitutional requirements of due process. The following five factors should be
considered in evaluating whether the exercise of personal jurisdiction over
Gramercy would comport with due process: (1) the burden on Gramercy; (2) the
interest of Texas in adjudicating this dispute; (3) Appellees’ 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 the fundamental social policies. See Guardian
Royal Exch. Assurance Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 231
(Tex. 1991).
The Guardian factors point towards dismissal of this action against
Gramercy. Gramercy has no business presence in Texas and is headquartered in
Connecticut. SSCR 4-5 (Lanava Aff. ¶¶ 3, 7). Forcing Gramercy to litigate in
Texas would obviously burden it. Gramercy’s operations are and have been based
in the Northeast where its employees reside and where all of its files are kept.
SSCR 5 (Lanava Aff. ¶ 6). Moreover, while some Appellees reside in Texas,
Gramercy could not have been expected to believe that work it performed in New
35
York or Connecticut would somehow subject it to personal jurisdiction in Texas.
The first Guardian factor therefore weighs in favor of dismissal.
The third factor is virtually irrelevant because approximately half of the
Appellees are Delaware entities. CR 83-84 (FAP at 4-5) (stating that Appellees L-
Falling Creek LLC, R-RAC Wimbledon LLC, J-Jason LLC, R-Russell Wimbledon
LLC, R-Ashley Wimbledon LLC, R-Audrey Wimbledon LLC, and LMC Recovery
Fund LLC are Delaware entities). And none of Appellants are present in Texas.
The second and fourth factors also do not warrant the exercise of
jurisdiction. As described above, Appellees’ claims against Gramercy are focused
on Gramercy’s work in New York or Connecticut. Additionally, the contracts at
issue have New York choice of law clauses. Accordingly, not only does New
York have a greater interest than Texas in adjudicating this dispute as the location
of the alleged wrongful conduct, but also New York courts are better situated to
apply New York law. A New York forum would therefore better serve the interest
of providing the most efficient resolution of the instant dispute.
As this is a commercial dispute between sophisticated parties, the fifth factor
is not implicated. Thus, the first, second, and fourth factors weigh in favor of
dismissal while the third and fifth factors are neutral, establishing that the exercise
of personal jurisdiction over Gramercy would be inconsistent with due process.
See, e.g., Kaufman et al. v. BDO Seidman L.L.P. et al., No. 12 L 13292, Illinois
36
Circuit Court, Cook County, Opinion dated Nov. 26, 2014 (unpublished), App. D
at 7 (finding exercise of personal jurisdiction over Gramercy would offend
traditional notions of fair play and substantial justice on facts similar to those
present here); Coe et al. v. BDO Seidman, L.L.P., et al., No. 12 L 13691, Illinois
Circuit Court, Cook County, Opinion dated Nov. 26, 2014 (unpublished), App. C
at 7 (same).
37
PRAYER
For the foregoing reasons, Gramercy respectfully requests that the trial
court’s order denying Gramercy’s Amended Special Appearance be reversed, and
that this Court grant such other and further relief as it deems just and proper.
Dated: February 13, 2015
Respectfully submitted,
MUNSCH HARDT KOPF & HARR, P.C.
By:__/s/ David C. Mattka______________
David C. Mattka (TSB No. 13231500)
MUNSCH HARDT KOPF & HARR, P.C.
401 Congress Avenue, Suite 3050
Austin, Texas 78701
(512) 391-6100 (telephone)
(512) 391-6149 (facsimile)
Email: dmattka@munsch.com
Lead Counsel for Defendants-Appellants
Additional Counsel:
Sean F. O’Shea (pro hac vice)
Michael E. Petrella (pro hac vice)
Daniel M. Hibshoosh (pro hac vice)
O’Shea Partners LLP
521 Fifth Avenue, 25th Floor
New York, New York 10175
(212) 682-4426 (telephone)
(212) 682-4437 (facsimile)
Email: soshea@osheapartners.com
Email: mpetrella@osheapartners.com
Email: dhibshoosh@osheapartners.com
38
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4, I certify that the
foregoing brief of Defendants-Appellants was prepared using Microsoft Word and,
according to the reckoning of that software program, contains 8,835 words.
Daniel M. Hibshoosh (pro hac vice)
39
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing instrument was
served upon the parties listed below via the court's electronic filing system on
February 13,2015:
Via .E- Filing & Electronic Mail:
W. Ralph Canada, Jr.
David R. Deary
Wilson Wray
Tyler Simpson
Loewinsohn Flegle Deary, LLP
12377 Merit Drive, Suite 900
Dallas, TX 75271
Attorney for Plaintiffs-Appellees