Healix Infusion Therapy, Inc. v. South Florida Infectious Diseases & Tropical Medicine Center, LLC

Opinion issued July 24, 2008

In The

Court of Appeals

For The

First District of Texas

NO. 01-07-00849-CV

HEALIX INFUSION THERAPY, INC., Appellant

V.

SOUTH FLORIDA INFECTIOUS DISEASES & TROPICAL MEDICINE

CENTERS, LLC, Appellee

On Appeal from the 234th District Court

Harris County, Texas

Trial Court Cause No. 2007-36135

MEMORANDUM OPINION

In this accelerated, interlocutory appeal, appellant, Healix Infusion Therapy

("Healix"), challenges the trial court's order sustaining the special appearance of

appellee, South Florida Infectious Diseases & Tropical Medicine Center, LLC

("SFID"), and dismissing Healix's causes of action against SFID.

We affirm.

Background

Healix is a Texas corporation with its principal place of business in Fort Bend

County. (1) Dr. Juan C. Perez-Morales is an individual residing in the state of Florida,

practicing medicine in Miami, Florida. SFID is a medical practice and limited

liability corporation operating in Miami, Florida. (2) SFID was created by

Perez-Morales. SFID and Perez-Morales contracted with Healix for Healix to

manage and operate an on-site office infusion center (OIC), at SFID's offices in

Florida. (3) SFID placed orders over the phone and faxed, mailed, and emailed

documents to Healix in Texas. Although SFID initially had a pharmacist on staff in

Florida, this function was eventually replaced by ordering premixed medications from

Healix, who mixed them in Texas.

The contract included the following provision, "This Agreement shall be

governed, interpreted, and construed according to the laws of the State of Texas,

without giving effect to its conflict of laws provisions. This Agreement shall be

performable in Harris County, Texas." In addition to specifying Healix's

responsibilities and the parties' agreement regarding compensation, the contract also

precluded SFID from opening a competing office infusion center in certain nearby

areas in Florida.

Healix sued SFID and Perez-Morales in Harris County for breach of contract.

Healix alleged that SFID and Perez-Morales owed money under the contract. Healix

further alleged that SFID and Perez-Morales had breached the noncompetition

provisions of the contract through actions taken in Florida.

In its original petition, Healix alleged that jurisdiction was proper because the

amount in controversy was within the jurisdictional limits of the district court. The

petition alleged other facts germane to Healix's claims, but it did not recite any

actions taken by SFID in Texas.

SFID and Perez-Morales filed a verified special appearance, denying both

general and specific jurisdiction. In particular, they denied: (1) residing in Texas;

(2) maintaining a registered agent for service of process in Texas; (3) engaging in

business, trade, or commerce in Texas (or being authorized to do so); (4) maintaining

a place of business in Texas or regularly employing Texas residents; (5) owning

property in Texas; (6) paying taxes in Texas or soliciting business in Texas;

(7) developing a substantial connection with Texas, purposefully or otherwise; and

(8) having continuing and systematic contacts with Texas.

In its response, Healix argued that the contract's choice-of-law provision

mandated jurisdiction in Texas. Healix also argued that the numerous activities it had

conducted in Texas supported the exercise of personal jurisdiction as to SFID. Healix

attached several affidavits describing the activities in which Healix engaged. A few

days before the trial court's hearing on SFID's special appearance, Healix amended

its petition to allege the contract, the guaranty, and, in general, the Texas long-arm

statute as bases for the court to exercise personal jurisdiction. Like its predecessor,

the first amended petition did not recite any actions taken by SFID in Texas.

After a hearing, the trial court sustained SFID's special appearance and

dismissed Healix's claims as to SFID for want of jurisdiction. (4) The trial court did not

issue findings of fact. Healix appealed, arguing in three issues (5) that the trial court

erred because: (1) SFID did have sufficient minimum contacts to subject it to personal

jurisdiction in Texas; (2) exercising personal jurisdiction would not offend traditional

notions of fair play and substantial justice; and (3) the parties' contract waived

SFID's objection to personal jurisdiction.

Standard of Review

The existence of personal jurisdiction is a question of law reviewed de novo

by this Court. BMC Software Belg., N.V. v. Marchand , 83 S.W.3d 789 (Tex. 2002).

However, this question must sometimes be preceded by resolving underlying factual

disputes. Id. at 794 . When, as here, the trial court does not issue fact findings, we

presume that the trial court resolved all factual disputes in favor of its ruling. Am.

Type Culture Collection, Inc. v. Coleman , 83 S.W.3d 801, 806 (Tex. 2002). Personal Jurisdiction

"Texas courts may assert personal jurisdiction over a nonresident defendant

only if the Texas long-arm statute authorizes jurisdiction and the exercise of

jurisdiction is consistent with federal and state due process standards." Id. (citing

Guardian Royal Exch. Assurance Ltd. v. English China Clays, P.L.C. , 815 S.W.2d

223, 226 (Tex. 1991)); see Tex. Civ. Prac. & Rem. Code Ann. §§ 17.041 -.045

(Vernon Supp. 2007) (Texas's long-arm statute). The long-arm statute allows Texas

courts to exercise jurisdiction over a nonresident defendant that "does business" in

the state. Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (Vernon Supp. 2007).

In addition to other acts that may constitute doing business, a

nonresident does business in this state if the nonresident:

(1) contracts by mail or otherwise with a Texas resident and either

party is to perform the contract in whole or in part in this state;

(2) commits a tort in whole or in part in this state; or

(3) recruits Texas residents, directly or through an intermediary

located in this state, for employment inside or outside this state.

Id.

This list, however, is not exhaustive. BMC Software , 83 S.W.3d at 795 . The

Texas Supreme Court has held that "section 17.042's broad language extends Texas

courts' personal jurisdiction as far as the federal constitutional requirements of due

process will permit." Id. (citation omitted).

Initially, the plaintiff bears the burden of pleading allegations sufficient to

bring a nonresident defendant within the terms of the Texas long-arm statute. Am.

Type Culture Collection , 83 S.W.3d at 807. However, when a nonresident defendant

files a special appearance, that defendant assumes the burden of negating all bases of

personal jurisdiction that the plaintiff has alleged. Id.

Personal jurisdiction over nonresident defendants is constitutional when two

conditions are met: (1) the defendant has established minimum contacts with the

forum state and (2) the exercise of jurisdiction comports with traditional notions of

fair play and substantial justice. Id. at 806 (citing Int'l Shoe Co. v. Washington , 326

U.S. 310, 316 , 66 S. Ct. 154, 158 (1945)). A nonresident defendant's minimum

contacts must derive from purposeful availment: a nonresident defendant must have

"purposefully availed" itself of the privileges and benefits of conducting business in

the foreign jurisdiction to establish sufficient contacts with the forum to confer

personal jurisdiction. Id. (citing Burger King Corp. v. Rudzewicz , 471 U.S. 462,

474-76 , 105 S. Ct. 2174, 2183-84 (1985)); Xenos Yuen v. Fisher , 227 S.W.3d 193,

200 (Tex. App.--Houston [1st Dist.] 2007, no pet.). An act or acts "by which the

defendant purposefully avails itself of the privilege of conducting activities" in Texas

and "thus invok[es] the benefits and protections" of Texas law, constitute sufficient

contact with Texas to confer personal jurisdiction. Michiana Easy Livin' Country,

Inc. v. Holten , 168 S.W.3d 777, 784 (Tex. 2005) (quoting Hanson v. Denckla , 357

U.S. 235, 253 , 78 S. Ct. 1228, 1240 (1958)).

We consider three elements of purposeful availment. See Michiana Easy Livin'

Country , 168 S.W.3d at 785 ; see also First Oil PLC v. ATP Oil & Gas Corp. , No.

01-07-00703-CV, 2008 WL 2186781 (Tex. App.--Houston [1st Dist.] May 22, 2008,

no pet.). First, we consider only the defendant's own actions, not those of the

plaintiff or any other third party. Michiana Easy Livin' Country , 168 S.W.3d at 785 ;

First Oil PLC , 2008 WL 2186781, at *12 ; see also U-Anchor Advertising, Inc. v.

Burt , 553 S.W.2d 760, 762-63 (Tex. 1977) (quoting Hanson , 357 U.S. at 253 , 78 S.

Ct. at 1240 (1958) ("The unilateral activity of those who claim some relationship with

a non-resident defendant cannot satisfy the requirement of contact with the forum

State. The application of that rule will vary with the quality and nature of the

defendant's activity, but it is essential in each case that there be some act by which

the defendant purposefully avails itself of the privilege of conducting activities within

the forum State, thus invoking the benefits and protections of its laws."))

Second, the activities must be purposeful, not random, isolated, or fortuitous.

Michiana Easy Livin' Country , 168 S.W.3d at 785 ; First Oil PLC , 2008 WL

2186781, at *12 . "It is the quality rather than the quantity of contacts that is

determinative." First Oil PLC , 2008 WL 2186781, at *12 (emphasis in original).

Third, the defendant must seek some benefit, advantage, or profit by virtue of its

activities in the proposed forum state, because this element is based on the notion of

implied consent. Michiana Easy Livin' Country , 168 S.W.3d at 785 ; First Oil PLC ,

2008 WL 2186781 at *12 .

"A choice-of-law provision is a consideration." Preussag Aktiengesellschaft

v. Coleman , 16 S.W.3d 110, 125 (Tex. App.--Houston [1st Dist.] 2000, pet. dism'd

w.o.j.)); see Burger King , 471 U.S. at 482 , 105 S. Ct. at 2187 ; see also Project Eng'g

USA Corp. v. Gator Hawk, Inc. , 833 S.W.2d 716, 722 (Tex. App.--Houston [1st

Dist.] 1992, no writ) (contract containing choice-of-law and choice-of-forum clauses).

However, standing alone, it does not suffice to confer jurisdiction. Preussag

Aktiengesellschaft , 16 S.W.3d at 125 ; see Burger King , 471 U.S. at 482 , 105 S. Ct.

at 2187 . "Nor does it indicate a voluntary submission to the personal jurisdiction of

the state's courts in the absence of any express understanding to that effect."

Preussag , 16 S.W.3d at 125 .

Our jurisdictional analysis is further divided into general and specific personal

jurisdiction. CSR, Ltd. v. Link , 925 S.W.2d 591, 595 (Tex. 1996). General

jurisdiction will attach when "a defendant's contacts in a forum are continuous and

systematic permitting the forum to exercise personal jurisdiction over the defendant

even if the cause of action did not arise from or relate to activities conducted within

the forum state." Id. To support general jurisdiction, the defendant's forum activities

must have been "substantial," which requires stronger evidence of contacts than for

specific personal jurisdiction. Preussag Aktiengesellschaft , 16 S.W.3d at 114 .

Specific jurisdiction lies when the defendant's alleged liability arises from or

is related to an activity conducted within the forum. BMC Software , 83 S.W.3d at

796 . "For a nonresident defendant's forum contacts to support an exercise of specific

jurisdiction, there must be a substantial connection between those contacts and the

operative facts of the litigation." Moki Mac River Expeditions v. Drugg , 221 S.W.3d

569, 585 (Tex. 2007). This requirement assesses "the strength of the necessary

connection between the defendant, the forum, and the litigation." Id.

Discussion

In its first amended petition, Healix alleges that jurisdiction is proper as to

SFID because it purposefully availed itself of the privileges and benefits of

conducting business in Texas by (1) executing the contract between the parties,

(2) expressly agreeing to a contract provision stating that the contract would be

"performable" in Harris County, and (3) consenting to the application of Texas law

in any controversy arising out of the contract. At the hearing, Healix also alleged that

SFID communicated with Healix by telephone, facsimile, mail, and email on an

ongoing basis. Healix repeatedly detailed its own business activities in Texas in its

petition, response to SFID's special appearance, and arguments to the trial court.

SFID did enter into a contract "by mail or otherwise" with Healix, a Texas

resident, and Healix performed some actions regarding the contract in Texas, so the

long-arm statute is satisfied. Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (Vernon

Supp. 2007). However, this does not end our inquiry. The exercise of personal

jurisdiction is appropriate here only if it would comport with due process

requirements. Therefore, we must consider whether SFID has established the

requisite minimum contacts and if the exercise of jurisdiction comports with

traditional notions of fair play and substantial justice. As the trial court correctly

noted throughout the hearing, we must look only at what SFID did in Texas, and we

do not consider Healix's actions in determining whether the personal jurisdiction

exists as to SFID. See Michiana Easy Livin' Country , 168 S.W.3d at 784-85 . We

will consider only whether specific jurisdiction exists, because Healix did not argue

in favor of general jurisdiction in its briefing in our court.

Minimum Contacts

Healix first alleged that jurisdiction was proper in Texas because SFID entered

into a contract with Healix, a Texas corporation. As Healix argued to the trial court,

this contract required SFID to communicate with Healix, which it did through phone

calls, email, mail, and facsimile. (6) These contacts do not satisfy the minimum contacts

requirement for Texas jurisdiction. See, e.g. , Ashdon, Inc. v. Gary Brown & Assocs. ,

Inc. , No. 01-06-01186-CV, 2008 WL 2209203, at *10 (Tex. App.--Houston [1st

Dist.] May 29, 2008, no pet.) (holding that defendant lacked sufficient minimum

contacts to establish personal jurisdiction despite contracting with Texas plaintiff

over many years and communicating by phone, email, fax, or mail, traveling to Texas,

and being paid by checks drawn on Texas account); Alenia Spazio, S.p.A. v. Reid , 130

S.W.3d 201, 213 (Tex. App.--Houston [14th Dist.] 2003, pet. denied) (contracting

with Texas entity and numerous telephone and facsimile communications with people

in Texas relating to alleged contract do not establish minimum contacts);

TeleVentures, Inc. v. Int'l Game Tech. , 12 S.W.3d 900, 908-10 (Tex. App.--Austin

2000, pet. denied) ("Minimum contacts may not be satisfied by merely engaging in

communications with a Texas corporation during performance of a contract.").

Next, although the contract states that it would be "performable" in Harris

County, performance under the contract occurs in Florida. The noncompetition

provision and Exhibit A, describing premises, both refer to Miami-Dade County or

counties contiguous thereto. Both the first and second amendments to the contract

note that the SFID or its predecessor, Juan C. Perez Morales, M.D., P.A., are Florida

professional associations. The contract was for operational and managerial services

to be provided to the office infusion center located in Florida. (7) These facts, which we

view in a light most favorable to the trial court's ruling, do not weigh in favor of

personal jurisdiction of SFID. See Moncrief Oil Int'l Inc. v. OAO Gazprom , 481 F.3d

309, 312 (5th Cir. 2007) ("[A] plaintiff's unilateral activities in Texas do not

constitute minimum contacts where the defendant did not perform any of its

obligations in Texas, the contract did not require performance in Texas, and the

contract is centered outside of Texas."); see also Tabor, Chhabra & Gibbs, P.A. v.

Medical Legal Evaluations, Inc. , 237 S.W.3d 762, 774 (Tex. App.--Houston [1st

Dist.] 2007, no pet.).

Similarly, the choice-of-Texas-law provision, which states that the contract

shall be "governed, interpreted, and construed according to the laws of the State of

Texas," does not confer jurisdiction, in the absence of any indication that SFID

intended to voluntarily submit to personal jurisdiction in Texas. See Preussag

Aktiengesellschaft , 16 S.W.3d at 125 . No such indication is present in the record.

Substantial Relationship to Litigation

Although we conclude that SFID's alleged contacts were insufficient to satisfy

the minimum-contacts/personal jurisdiction analysis, we also note that the alleged

contacts are not substantially connected to the operative facts of the litigation. At

best, Healix alleged that SFID communicated with it in Texas. However, Healix's

petition alleges that SFID breached the contract by failing to pay monies owed as a

result of the activities conducted at the office infusion center in Florida as well as

by operating a competing office infusion center in Florida , in contravention of the

contract. SFID's alleged contacts with Texas, therefore, are not substantially

connected to the operative facts of the litigation. See Moki Mac River Expeditions ,

221 S.W.3d at 584-85 . We conclude that the evidence fails to show that SFID's conduct: (1) was

purposely directed at or occurred in Texas; (2) has a "substantial connection" to the

litigation's operative facts; and (3) satisfies federal due process requirements.

Therefore, we need not consider whether the exercise of jurisdiction comports with

traditional notions of fair play and substantial justice. We hold that the trial court did

not err by sustaining SFID's special appearance.

Conclusion

We affirm the order of the trial court.

Sam Nuchia

Justice

Panel consists of Justices Nuchia, Alcala, and Hanks.

1. Healix was located in Harris County when the parties initially signed their contract, but

Healix later moved to Fort Bend County.

2. In connection with the contract, Perez-Morales signed an individual guaranty of the contract

with Healix. This guaranty provided, in part, that "THE STATE COURTS IN THE STATE OF

TEXAS SHALL HAVE NONEXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY

CLAIMS OR DISPUTES WITH RESPECT TO THIS GUARANTY . . . ." The trial court overruled

his special appearance. Although he is listed as an appellee, the trial court's jurisdiction over Perez-Morales is not an issue in this case.

3. The initial contract was with Juan C. Perez Morales, M.D., P.A. The name of the physician

association's practice was changed to South Florida Infectious Diseases and Tropical Medicine

Center, LLC in the first amendment to the parties' contract.

4. The trial court

overruled Perez-Morales's special appearance, therefore, he is not an appellee

here.

5. "Point of Error One: The District Court erred in ruling that SFID did not have sufficient

minimum contacts to subject SFID to personal jurisdiction in Harris County, Texas.

Point of Error Two: The District Court erred in ruling that exercising personal jurisdiction

over SFID in Harris County, Texas would not comply with traditional notions of fair play and

substantial justice.

Point of Error Three: The District Court erred in ruling that the forum selection provision in

the HATS Agreement did not waive SFID's objection to personal jurisdiction in Harris County."

6. Healix also argues that SFID transferred money electronically to an account in Houston as

part of its performance of the contract.

In an affidavit attached to Healix's response to the special

appearance, Healix employee Joseph Gallegos testified, "Pursuant to the [parties' contract], Perez-Morales and SFID authorized electronic transfer of funds from their accounts to Healix's operating

account in Harris County, Texas. But the contract provided that Healix "shall have the right to

electronically transfer funds from the OIC Account to [Healix's] bank account to pay its

Management Fee" and other expenses. Whether the Healix or SFID carried out the electronic fund

transfers is, therefore, a question of fact, and we presume the trial court decided that this in favor of

its judgment, i.e. , that these actions could not be imputed to SFID. See Am. Type Culture Collection ,

83 S.W.3d at 806.

7. Even Healix concedes that it moved from Harris County to Sugar Land, in Fort Bend

County, Texas, during the time the parties' contract was in effect.