Paul Touradji and Deeprock Venture Partners, LP v. Play Oil & Gas GP, LLC, Playa LP, Beach Capital, and Gary M. Beach

Opinion issued April 8, 2010.

In The

Court

of Appeals

For The

First

District of Texas

————————————

NO. 01-09-00403-CV

———————————

Paul Touradji , Appellant

V.

Beach

Capital Partnership, L.P., Playa Oil & Gas GP, LLC, Playa Oil & Gas,

LP, and Gary M. Beach , Appellees

On Appeal from the 55th Judicial District Court

Harris County, Texas

Trial Court Case No. 2008-57962

O P I N I O N

In this

interlocutory appeal, appellant, Paul Touradji, appeals the trial court’s order

denying his special appearance. [1] Appellees, Beach Capital Partnership, L.P.,

Playa Oil & Gas GP, LLC, Playa Oil & Gas, LP, and Gary M. Beach

(collectively, “plaintiffs”) sued Touradji, a New York resident, and Touradji’s

business DeepRock Venture Partners, LP, alleging claims for interference with

contract and economic relations, fraud, breach of fiduciary duty, slander and

libel, and intentional infliction of emotional distress. Touradji filed a special appearance that the

trial court denied. In two issues, Touradji

contends the trial court erred by denying his special appearance because he is

not subject to either specific or general jurisdiction in Texas. We conclude that Touradji is not subject to

general jurisdiction in Texas but that he is subject to specific jurisdiction

for some of the claims against him. More

specifically, Touradji established minimum contacts with Texas and the claims

for interference with contract, fraud, and breach of fiduciary duty

sufficiently relate to those contacts to subject Touradji to personal

jurisdiction in Texas. We also conclude plaintiffs

failed to plead sufficient jurisdictional allegations concerning the claims for

slander and libel and for intentional infliction of emotional distress to

subject Touradji to personal jurisdiction in Texas. We affirm in part, reverse in part and remand

this case to the trial court.

Background

This case involves a dispute over

ownership of Playa Oil & Gas, LP, a Texas limited partnership, as well as

control of its ongoing operations.

A. Overview of Entities Involved

Playa Oil & Gas, LP (“Playa LP”)

is a Texas limited partnership with its principal place of business in Houston,

Texas. Playa LP was established in 2005

by Gary M. Beach, a Texas resident, and Paul Touradji, a New York resident,

through other entities as described below.

The partners of Playa LP are its general partner, Playa Oil & Gas

GP, LLC (“Playa GP”), and its limited partners, Beach Capital Partnership, L.P.

(“Beach Capital”) and DeepRock Venture Partners, LP (“DeepRock”). Playa GP owns 0.1% of Playa LP, while Beach

Capital owns 19.9% and DeepRock owns 80%.

Playa GP is a Texas limited liability

company with its principal place of business in Houston, Texas. Playa GP, as the general partner of Playa LP,

operates Playa LP and manages its business affairs. Playa GP is run by four managers, one

appointed by Beach and the remaining three by DeepRock. Touradji is a manager of Playa GP and, prior

to this controversy, Beach was a manager and the CEO. Playa GP is wholly owned by Beach.

Beach Capital is a Texas limited

partnership. Its principal place of

business is Houston, Texas. Beach owns

100% of Beach Capital.

DeepRock is a Delaware limited

partnership with its principal place of business in New York. Touradji indirectly owns 100% of

DeepRock. DeepRock was created for the

purpose of becoming a partner in Playa LP, for Touradji to manage his

investment in Playa LP.

B.

The Controversy

In 2008, after Playa LP had been

operating almost three years, Touradji and DeepRock sought to restructure the parties’

relationship. Touradji and DeepRock

declined to make any further investment in Playa LP unless DeepRock received

100% of Playa LP’s revenues until DeepRock’s entire investment had been

recovered. In May 2008, Beach and Beach

Capital executed an “Amended and Restated Agreement of Limited

Partnership.” Touradji and DeepRock did

not execute the agreement. Touradji and

DeepRock also did not make any further investment in Playa LP.

Touradji, as one of the managers of

Playa GP, authorized the sale of Playa LP assets, specifically, real property

in East Texas, for approximately $41 million.

Touradji also authorized the distribution of the $41 million in proceeds

to DeepRock, but no distribution was made to the other limited partner, Beach

Capital. By the terms of the partnership

agreement, approximately $8.2 million of the proceeds should have been

distributed to Beach Capital.

On September 26, 2008, Beach learned that

the “Amended and Restated Agreement of Limited Partnership” had not been

executed by Touradji or DeepRock. Beach

and Beach Capital withdrew their consent to the amended agreement.

Plaintiffs filed this suit on October

1, 2008. A few days later, Touradji, acting on behalf of DeepRock, approved the

“Amended and Restated Agreement of Limited Partnership” of Playa LP and

appointed new managers of Playa GP, including re-appointing himself as

manager. On October 10, 2008 Touradji,

acting for DeepRock, sent a letter to plaintiffs in Texas notifying plaintiffs

that he had appointed new managers and accepted new regulations for Playa

GP.

On October 15, Touradji and the

managers he had appointed removed Beach from control of the partnership,

stripping him of his status as a manager and CEO. From the time of the October

meeting, plaintiffs contend that Touradji and DeepRock have refused to

cooperate in the operations of the partnership and “continued in their breaches

of their duties to plaintiffs,” including preventing plaintiffs from receiving

their fair share of revenue and destroying the remaining value of the

partnership.

C. Special Appearance in the Trial Court

Touradji filed a special appearance asserting

he is not subject to personal jurisdiction in Texas. Specifically, in his special appearance

Touradji contends that he is not subject to specific jurisdiction in Texas

because plaintiffs failed to plead sufficient jurisdictional allegations and he

did not purposefully avail himself of the privilege of conducting business in

Texas. Touradji also asserts his

contacts with Texas are not extensive enough to subject him to general

jurisdiction. In support of his special

appearance, Touradji filed an affidavit in which he avers he is not a Texas

resident, does not maintain a place of business in Texas, and does not own real

property in Texas. Touradji also states

he either made or received approximately 10 telephone calls with people in Texas

and visited Texas approximately five times concerning the business of Playa

LP.

Personal Jurisdiction and Special

Appearance

A. Standard

of Review

A legal conclusion concerning the

existence of personal jurisdiction is a question of law subject to de novo review, but that

conclusion must sometimes be preceded by the resolution of underlying factual

disputes. Am. Type Culture Collection

Inc. v. Coleman , 83 S.W.3d 801 , 805–06 (Tex. 2002); BMC Software Belg.,

N.V. v. Marchand , 83 S.W.3d 789, 794 (Tex. 2002). “When . . . the trial court does

not issue fact findings, we presume that the trial court resolved all factual

disputes in favor of its ruling.” Glattly

v. CMS Viron Corp. , 177 S.W.3d 438, 445 (Tex. App.—Houston [1st

Dist.] 2005, no pet.) (citing Am. Type Culture Collection , 83 S.W.3d at

805–06). However, “we review de novo if

the underlying facts are undisputed or otherwise established.” Preussag Aktiengesellschaft v. Coleman ,

16 S.W.3d 110, 113 (Tex. App.—Houston [1st Dist.] 2000, pet. dism’d

w.o.j.).

B. Law of Special Appearance

A plaintiff bears the initial burden

of pleading allegations sufficient to bring a non-resident defendant within the

terms of the Texas long-arm statute. Kelly

v. Gen. Interior Const., Inc. ,

301 S.W.3d 653, 658 (Tex. 2010); Am. Type Culture Collection , 83

S.W.3d at 807. To establish jurisdiction over a nonresident defendant, the plaintiff

must plead a “connection between the defendant[’s] alleged wrongdoing and the

forum state.” Kelly , 301 S.W.3d at 655 . In

a tort case, the plaintiff must plead that the defendant committed a tortious

act in Texas. Id. at 659 ; Ji-Haw Indus.

Co., Ltd. v. Broquet , No. 04-07-00622-CV, 2008 WL 441822 , at *2 (Tex.

App.—San Antonio Feb. 20, 2008, no pet. h.)

If

the plaintiff pleads sufficient jurisdictional allegations, t he nonresident defendant then assumes

the burden of negating all bases of jurisdiction in those allegations. Kelly , 301 S.W.3d at 658 ; Moki Mac River Expeditions v. Drugg ,

221 S.W.3d 569, 574 (Tex. 2007). If the

plaintiff does not plead sufficient jurisdictional facts, the defendant meets

its burden to negate jurisdiction by proving it is not a Texas resident. Kelly ,

301 S.W.3d at 658–59 . The plaintiff’s original pleadings as well

as its response to the defendant’s special appearance can be considered in

determining whether the plaintiff satisfied its burden. Wright v. Sage Eng’g, Inc. , 137 S.W.3d

238 , 249 n.7 (Tex. App.—Houston [1st Dist.] 2004, pet. denied). In conducting our review, we accept as true

the allegations

in the petition. Pulmosan

Safety Equip. Corp. v. Lamb ,

273 S.W.3d 829, 839 (Tex. App.—Houston [14th Dist.] 2008, pet. denied).

C. The Law of Personal Jurisdiction

A court may assert personal jurisdiction over a

non-resident defendant if the requirements of the Due Process Clause of the

United States Constitution [2]

and the Texas long-arm statute [3]

are both satisfied. Helicopteros

Nacionales de Colombia, S.A. v. Hall , 466 U.S. 408, 414 , 104 S. Ct. 1868,

1872 (1984); CSR, Ltd. v. Link , 925 S.W.2d 591, 594 (Tex. 1996). “Because the Texas long-arm statute reaches

‘as far as the federal constitutional requirements of due process will allow,’

the statute is satisfied if the exercise of personal jurisdiction comports with

federal due process.” Preussag

Aktiengesellschaft , 16 S.W.3d at 113 (quoting CSR, Ltd. , 925 S.W.2d

at 594 ). We thus examine only

whether a Texas court’s exercise of jurisdiction over Touradji would comport

with the requirements of federal due process.

See id.

To meet the requirements of federal

due process, “the nonresident defendant must have purposefully established such

minimum contacts with the forum state that it could reasonably anticipate being

sued there.” [4] Id. (citing Burger King Corp. v.

Rudzewicz , 471 U.S. 462, 475 , 105 S. Ct. 2174, 2183 (1985)). “If the nonresident defendant has

purposefully availed itself of the privileges and benefits of conducting

business in a state, it has sufficient contacts to confer personal

jurisdiction.” Id. (citing Burger

King , 471 U.S. at 475 , 105 S. Ct. at 2183 ).

“Random, fortuitous, or attenuated contacts do not suffice.” Id. (citing Burger King , 471

U.S. at 475 , 105 S. Ct. at 2183 ).

To assess whether a non-resident

defendant has purposefully availed himself of the privileges and benefits of

conducting business in Texas, we examine three factors. See Michiana Easy Livin’ Country, Inc. v.

Holten , 168 S.W.3d 777, 785 (Tex. 2005).

First, only the defendant’s own actions may constitute purposeful

availment; a defendant may not be haled into a jurisdiction based solely on the

unilateral activities of a third party. Id.

(citing Burger King , 471 U.S. at 475 , 105 S. Ct. at 2183 ). Second, the defendant’s acts must be

purposeful, and a showing of random, isolated, or fortuitous contacts is

insufficient. Id. (citing Keeton

v. Hustler Magazine, Inc. , 465 U.S. 770, 774 , 104 S. Ct. 1473, 1478

(1984)). Third, a defendant must seek

some benefit, advantage, or profit through his purposeful availment, because

jurisdiction is based on notions of implied consent; that is, by seeking the

benefits and protections of a forum’s laws, a non-resident consents to suit

there. Id. (citing World-Wide

Volkswagen Corp. v. Woodson , 444 U.S. 286, 297 , 100 S. Ct. 559, 567

(1980)). The purposeful availment test

should focus on “the defendant’s efforts to avail itself of the forum” and not

“the form of the action chosen by the plaintiff.” Moki Mac , 221 S.W.3d at 576 .

Minimum-contacts analysis is further

divided into specific personal jurisdiction and general jurisdiction. Preussag Aktiengesellschaft , 16 S.W.3d

at 114 .

1. Specific

Jurisdiction

A court may exercise specific personal

jurisdiction over a non-resident defendant if (1) the non-resident purposely

directed its activities toward the forum state or purposely availed itself of

the privileges of conducting activities there and (2) the controversy arises

out of or is related to the non-resident’s contacts with the forum state. Freudensprung v. Offshore Tech. Servs.,

Inc. , 379 F.3d 327, 343 (5th Cir. 2004).

The non-resident defendant’s purposeful conduct, not the unilateral acts

of the plaintiff, must have caused the contact.

See Helicopteros Nacionales de Colombia, S.A. , 466 U.S. at 414 ,

104 S. Ct. at 1872. Foreseeability of an

injury in Texas is not solely determinative, Michiana Easy Livin’ Country , 168 S.W.3d at 789 , but foreseeability

of causing injury is “an important consideration” in deciding whether a

nonresident defendant has purposefully established minimum contacts. BMC

Software , 83 S.W.3d at 795 .

Even if a non-resident has

purposefully availed himself of the benefits of conducting business in Texas,

there is no specific jurisdiction over the non-resident unless the cause of

action “arises from or is related to an activity conducted within the

forum.” BMC Software , 83 S.W.3d

at 796 . We focus our analysis on the

relationship among the non-resident, the forum, and the litigation to determine

if the alleged liability arises from or is related to an activity conducted in

Texas. Counter Intelligence, Inc. v.

Calypso Waterjet Sys., Inc. , 216 S.W.3d 512, 517 (Tex. App.—Dallas 2007, no

pet. h.). The focus of the examination

must be the nature of the contacts and the “nexus” that these contacts create

with the forum state. McDermott v.

Cronin , 31 S.W.3d 617 , 621–22 (Tex. App.—Houston [1st Dist.] 2000, no

pet.). The “arises from or is related

to” requirement of specific personal jurisdiction requires a “substantial

connection” between the non-resident defendant’s contacts and the “operative

facts of the litigation.” Moki Mac ,

221 S.W.3d at 584–85. That is, the

non-resident’s conduct must have been purposely directed towards or have

occurred in the forum and must have a “substantial connection” with the

litigation’s operative facts. Id. ;

Glattly , 177 S.W.3d at 447 .

2. General Jurisdiction

General jurisdiction does not require

that the cause of action relate directly to the defendant’s contacts with the

forum. Preussag Aktiengesellschaft ,

16 S.W.3d at 114 (citing CSR, Ltd. , 925 S.W.2d at 595 ). To negate general jurisdiction a defendant

must show that its contacts in Texas were not “continuous and systematic.” Id.

To support general jurisdiction, the defendant’s forum activities must

have been “substantial,” which requires stronger evidence of contacts than for

specific jurisdiction. Id. The Texas supreme court has described it as a

“more demanding minimum contacts analysis.”

PHC-Minden, L.P. v. Kimberly-Clark

Corp. , 235 S.W.3d 163, 168 (Tex. 2007) (quoting CSR, Ltd. v. Link , 925 S.W.2d at 595 ). “Usually, ‘the defendant must be engaged in

longstanding business in the forum state, such as marketing or shipping

products, or performing services or maintaining one or more offices there;

activities that are less extensive than that will not qualify for general in

personam jurisdiction.’” Id. (quoting 4 Charles Alan Wright & Arthur R. Miller, Federal Practice &

Procedure § 1067.5 (2007)).

Analysis

A. General Jurisdiction

In

his first issue, Touradji asserts the trial court erred by denying his special

appearance because he is not subject to general jurisdiction in Texas. As noted above, general jurisdiction requires

more substantial contacts with Texas than specific jurisdiction. PHC-Minden ,

235 S.W.3d at 168 . Here, the plaintiffs’

petition contains no allegations that Touradji had any longstanding or

substantial business activities in Texas—such as marketing or shipping products

or maintaining an office here. See id.

Accordingly, Touradji’s affidavit asserting he is not a Texas resident

is sufficient to negate general jurisdiction as a basis for the trial court’s

exercise of personal jurisdiction. See Kelly , 301 S.W.3d at 659 . We sustain Touradji’s first issue.

B. Specific Jurisdiction

As a

threshold matter, Touradji asserts we must examine his special appearance

concerning specific jurisdiction on a claim-by-claim basis. Although the Texas supreme court did not hold

that specific jurisdiction must be analyzed for each specific claim, in Kelly , it analyzed the sufficiency of

the jurisdictional allegations of the plaintiff’s claims separately. See

Kelly , 301 S.W.3d at 660 (addressing jurisdictional allegations for fraud

claim separately from claim under Texas Property Code). In addition, the Fifth Circuit has held that

the “arise from or related to” portion of the specific jurisdiction analysis must

be conducted on a claim-by-claim basis to comply with due process when the

claims are based on different forum contacts.

Seiferth v. Helicopteros Atuneros,

Inc. , 472 F.3d 266, 274 (5th Cir. 2006) (citing cases from First, Third,

Eight, and Ninth Circuits); see also

Barnhill v. Automated Shrimp Corp. , 222 S.W.3d 756, 767 (Tex. App.—Waco

2007, no pet.) (following Seiferth ). However, when separate claims are based on

the same forum contacts, a separate analysis of each claim is not

required. See Sutton v. Advanced Aquaculture Sys., Inc. , 621 F.Supp.2d 435,

442 (W.D. Tex. 2007) (distinguishing Seiferth

on basis that plaintiff’s claims all arose from same set of forum contacts); see also Davis Invs., VI, LP v. Holtgraves ,

No. 14-08-00222-CV, 2009 WL 975961 , at *12 n.7 (Tex. App.—Houston [14th

District] Feb. 26, 2009, pet. denied)

(agreeing “with other courts that generally a specific-jurisdiction analysis

should be performed on a claim-by-claim basis” but declining to do so because

plaintiff’s claims all arose from same facts and defendant asserted single

basis for his special appearance to each claim). In this case, neither party provides any

argument or analysis concerning whether these claims arise from the same forum

contacts or different ones. P laintiffs’ pleadings do not clearly

show that all the claims arise out of the same facts. Plaintiffs’ live petition contains a

background section making certain allegations, but it also has separate

sections for each cause of action that appear to discuss other allegations, so

it is unclear whether those separate sections are discussing the same

underlying facts for all the claims. We

therefore examine the sufficiency of the jurisdictional allegations of each

claim against Touradji separately in our specific jurisdiction analysis. [5] See

Kelly , 301 S.W.3d at 659–60. As

discussed below, we conclude that not all of plaintiffs’ claims—specifically,

the claims for slander and libel and for intentional infliction of emotional

distress—are supported by sufficient jurisdictional allegations. The remaining claims for interference with

contract and economic relations, fraud, and breach of fiduciary duty are based,

in large part, upon the same contacts with Texas, namely, Touradji’s

involvement with the ongoing operations of a Texas business. We therefore address the “arise from or

related to” requirement of specific jurisdiction together for these claims. See

Sutton , 621 F.Supp.2d at 442 ; see also Davis Invs., VI, LP , 2009 WL

975961 at *12 n.7.

Within

his issue concerning specific jurisdiction, Touradji asserts three reasons the

trial court erred in denying his special appearance. First, Touradji asserts that plaintiffs

failed to sufficiently allege jurisdictional facts to support each claim. Second, Touradji contends that under the

supreme court’s opinion in Michiana ,

Touradji has not purposefully availed himself of doing business in Texas. Third, Touradji asserts that, even if his

contacts were sufficient to support a finding of minimum contacts, his contacts

are not substantially connected to the operative facts of this litigation to

support jurisdiction under Moki Mac .

1. Sufficiency of Allegations

Plaintiffs

alleged five causes of action against Touradji: (a) interference with contracts

and economic relations; (b) fraud; (c) slander and libel; (d) breach of

fiduciary duty; and (e) intentional infliction of emotional distress.

(a) Interference with Contract and

Economic Relations

Concerning

this cause of action, plaintiffs alleged Touradji and DeepRock communicated with

plaintiffs in Texas. Plaintiffs also

alleged Touradji executed a “consent” causing Playa GP, as general partner of

Playa LP, to sell Texas properties to raise revenue. Plaintiffs further alleged Touradji caused

distributions of this revenue to be made to DeepRock, but withheld any

distribution to Beach Capital. Finally,

plaintiffs alleged that Touradji has taken control of Playa GP and Playa LP and

“failed to cooperate with and otherwise obstructed the operations of Playa LP.” [6]

Unlike

the allegations in Kelly , here

plaintiffs pleaded that Touradji communicated with them in Texas. Touradji, acting as a manger for a Texas limited

liability company, allegedly caused a Texas limited partnership to sell Texas

property to raise revenue. Touradji then

allegedly caused the distribution of those revenues from the Texas entities to

DeepRock, and withheld any distribution to the other limited partner, Beach Capital,

another Texas entity. We hold these

allegations are sufficient to plead a connection between the alleged wrongful

acts and Texas. See Pulmosan Safety Equip. Corp. , 273 S.W.3d at 839 (holding we

accept allegations as true in reviewing special appearance); see also Retamco Operating, Inc. v. Republic Drilling Co. , 278 S.W.3d 333, 340 (Tex. 2009)

(finding personal jurisdiction appropriate where defendant accepted transfer of

Texas real property even though transaction occurred outside of Texas); TexVa,

Inc. v. Boone , 300 S.W.3d

879, 889 (Tex. App.—Dallas 2009, pet. filed) (finding jurisdiction proper over

nonresident defendants who formed partnership with Texas, later incorporated

business under laws of Texas, served as officers and directors of that

corporation, and allegedly breached fiduciary duties to Texas corporation and

Texas shareholder).

(b)

Fraud

Concerning

the allegations of fraud, Touradji asserts the “bare assertions of fraud . . .

, without more, are neither material nor relevant in assessing contacts to

determine personal jurisdiction over a nonresident defendant.” See Capital

Fin. & Commerce AG v. Sinopec Overseas Oil & Gas, Ltd. , 260 S.W.3d

67, 78 (Tex. App.—Houston 2008, no pet.)

In Kelly , the supreme court

found an allegation of fraud insufficient to invoke personal jurisdiction over

the defendant when it did not mention Texas at all. Kelly ,

301 S.W.3d at 656, 660 . The allegation

in that case stated “the material representations made by [defendant] were

false and were made with the intention that [plaintiff] would rely

thereon.” Id. at 655 . In contrast, the

allegations in this case are that Touradji made a representation to plaintiffs in

Texas and that the representation concerned the ongoing operation of two Texas

entities. These allegations specifically

mention Texas, pleading a connection between Touradji’s allegedly wrongful acts

and Texas. See id. at 655, 660 . We hold

these allegations are sufficient.

(c) Breach of Fiduciary Duty

In

his brief to this court, Touradji specifically states that he “does not appeal

the finding of specific jurisdiction over him with respect to the claims of

breach of fiduciary duty, to the extent that such a duty arose by virtue of

Touradji’s position as a Manager of Playa GP.”

In their petition, the only allegation of fiduciary duties owed by

Touradji made by plaintiffs is that “Touradji, as manager of Playa Oil &

Gas GP, LLC, owes fiduciary duties to Plaintiff Playa Oil & Gas GP, LLC,

and along with DeepRock, owes fiduciary duties to Playa Oil & Gas GP, LLC,

Playa Oil & Gas LP, and Beach Capital Partnership, LP.” Because Touradji concedes there is

jurisdiction over the breach of fiduciary duty claim on the only basis alleged

by the plaintiffs, we affirm the trial court’s order denying Touradji’s special

appearance with respect to breach of fiduciary duty claim.

(d) Slander and Libel

Concerning

the slander and libel claims, Touradji asserts that plaintiffs’ “generalized

allegations” of slander and libel, without any pleading that the “supposed

statements were made in Texas or even

to anyone who was located in Texas,”

are insufficient. (Emphasis in

original). In the facts section of their

live pleading, plaintiffs alleged, “Paul Touradji has slandered and libeled

Gary M. Beach by disseminating oral and written untrue and injurious

statements, which were intended to be disseminated public[ly], including in

Texas.” In the causes of action section,

plaintiffs alleged, “Paul Touradji has slandered and libeled Gary M. Beach by

uttering and causing the publication of untruths concerning Mr. Beach, which

statements were injurious to his reputation and standing.” The only mention of Texas in these allegations

is that the defamatory statements were intended to be made publicly “including

in Texas.” There is no allegation of any

connection to Texas. There is no

allegation that the statements were made or disseminated in Texas. These allegations closely resemble the

allegations of fraud in Kelly that

pleaded no Texas conduct and no connection to Texas. See

Kelly , 301 S.W.3d at 656, 660 . We hold these allegations are insufficient.

(e) Intentional Infliction of

Emotional Distress

Touradji

asserts the same arguments concerning the allegations of intentional infliction

of emotional distress as he does concerning the allegations of slander and libel. Plaintiffs alleged, “Paul Touradji has

threatened and slandered the other managers of Playa Oil & Gas GP, LLC . .

. .” Plaintiffs also pleaded, “Paul Touradji

has, on several occasions, threatened the managers and personnel of Playa Oil

& Gas GP, LLC, with economic and bodily harm, such conduct being so

intentional, extreme, and outrageous as to be utterly intolerable in a

civilized community, causing severe emotional distress, injury and damages to

Plaintiffs.” Like the allegations in Kelly , these allegations make no mention

of Texas. These allegations contain no

pleading of a connection between Touradji’s alleged wrongdoing and Texas. Kelly , 301 S.W.3d at 660 . We hold

these allegations are insufficient.

For the remaining analysis, we do not

address the claims of intentional infliction of emotional distress or slander

and libel because we have concluded the plaintiffs did not meet their initial

burden of sufficiently alleging Touradji came within the terms of the Texas

long-arm statute for those claims. See id. at 659. Nor do we address the

claim of breach of fiduciary duty because Touradji has not appealed the trial

court’s denial of his special appearance for that claim. For the remaining claims—interference with

contract and economic relations and fraud—the burden is on Touradji to negate

all bases of jurisdiction alleged by plaintiffs. See id. ;

Moki Mac River Expeditions , 221 S.W.3d at 574 .

2. Purposeful Availment

Within

this portion of his second issue, Touradji contends this case is governed by

the Texas supreme court’s opinion in Michiana . Touradji asserts we must look to “Texas-based

conduct” and “where the defendant’s actions were carried out.” Although these are factors that could impact

a personal jurisdiction analysis, the Supreme Court’s holding in Michiana is not so narrow.

(a) Michiana Easy Livin’ Country, Inc. v. Holten

In Michiana , the Texas supreme court held

that the exercise of personal jurisdiction was not proper over Michiana because

its sole contact with Texas was not the result of actions it directed towards

Texas. Michiana Easy Livin’ Country, Inc. , 168 S.W.3d at 794 . Michiana, an Indiana company, received a

phone call from Holten, a Texas resident.

Id. at 784 . Holten arranged to buy an RV from Michiana

and to have it shipped to Texas at his own expense. Id. During the course of this phone call,

Michiana allegedly made misrepresentations to Holten. Id. The supreme court rejected cases that upheld

personal jurisdiction based on whether the defendant “directed a tort” towards

Texas in a single phone call. Id. at 190–91. First, the court explained the focus must

remain on the relationship among the defendant, the forum, and the litigation,”

but a “directing a tort” analysis shifts the focus to the relationship among

the plaintiff, the forum, and the litigation.

Id. at 190. Second, “directing a tort” analysis

improperly focuses on the merits of the claim; the focus should be on the

defendant’s contacts with Texas, not whether those contacts were tortious. Id.

at 790–91. Third, focusing on whether

the defendant directed a tort toward Texas could alter the outcome of

jurisdictional analysis based on whether the plaintiff alleged a tort or a

contract claim based on the same actions.

Id. at 791. The supreme court disapproved of intermediate

court holdings that “(1) specific jurisdiction is necessarily established by

allegations or evidence that a nonresident committed a tort in a telephone call

from a Texas number, or that (2) specific jurisdiction turns on whether a

defendant’s contacts were tortious rather than the contacts themselves.” Id.

at 791–92 (footnotes omitted).

The supreme court did not hold that

specific jurisdiction turns only on

“Texas-based conduct” and “where the defendant’s actions were carried out,” as

Touradji asserts. Texas supreme court

decisions since Michiana make this

clear. In Moki Mac , the supreme court found sufficient minimum contacts over

Moki Mac, an Arizona company. Moki

Mac River Expeditions , 221 S.W.3d at 579 .

In that case the supreme court noted that a personal jurisdiction

analysis must consider whether a nonresident defendant “purposefully directed

action towards Texas.” Id. at 577 . Among other activities, Moki Mac regularly

advertised in Texas and solicited business from Texas residents through mass

and targeted direct-marketing email campaigns.

Id. at 577–78. In finding sufficient minimum contacts, the

supreme court stated, “Moki Mac’s business with Texas residents stems from its

marketing and advertising activities purposefully directed at gaining Texas

customers, and it thus availed itself of doing business here.” Id.

at 579 .

The supreme court also found personal

jurisdiction over a California company in Retamco

Operating, Inc. v. Republic Drilling Co. , 278 S.W.3d 333 (Tex. 2009). Retamco, a Texas company, sued Republic

Drilling Company, a California corporation, over Republic receiving oil and gas

wells and leases, allegedly in violation of the Uniform Fraudulent Transfer

Act. Retamco

Operating, Inc. , 278 S.W.3d at 336 .

Republic filed a special appearance, asserting that it did not have

minimum contacts with Texas because the allegedly fraudulent transfer occurred

entirely outside of Texas. Id. at 336–37. The supreme court stated that “[j]urisdiction

. . . may not be avoided merely because the defendant did not physically enter

the forum state.” Id. at 339 (quoting Burger

King , 471 U.S. at 476 , 105 S. Ct. at 2184 ).

The supreme court noted that Republic knowingly and willingly entered

into the transaction to accept real property in Texas, and that this was

sufficient to constitute purposeful availment of doing business in Texas. Id.

at 339–40. Thus, our focus is on

Touradji’s actions that were purposefully directed towards Texas, not solely on

whether he physically performed those actions in Texas. See

Retamco , 278 S.W.3d at 339 ; Moki Mac River Expeditions , 221 S.W.3d

at 579 .

(b) Touradji’s Contacts

Here, Touradji formed DeepRock for the

sole purpose of becoming a limited partner in Playa LP, a Texas entity. The partnership agreement recites the

principal place of business of Playa LP is Houston, Texas. The agreement also provides, “ Applicable Law. This Agreement

and the rights and obligations of the parties hereunder shall be governed by

and interpreted, construed and enforced in accordance with the laws of the

State of Texas without regard to any choice of law principles.” (Emphasis in original). Although he signed the partnership agreement

on behalf of DeepRock, the agreement shows Touradji knew he was becoming

involved with a Texas entity, doing business in Texas and subject to the laws

of Texas.

Touradji, in his individual capacity,

also agreed to serve as a manager of Playa GP, another Texas entity. Playa GP’s sole purpose was to act as the

general partner of Playa LP and carry out its business, which included oil and

gas interests in Texas. Additionally, the

articles of organization of Playa GP specifically invoke the provisions of the

Texas Business Corporations Act concerning indemnification of the

managers.

Touradji communicated with Beach, a

Texas resident, and with Beach Capital, another Texas entity, concerning the

ongoing business of Playa LP and Playa GP.

Touradji consented to Playa LP’s sale of Texas oil and gas interests to

raise revenue, which was distributed to DeepRock and not to the other limited

partner, Beach Capital. Touradji also

met with other managers of Playa GP to remove Beach as a manager and CEO of

Playa GP.

(c) Analysis

Touradji purposefully directed his

activities towards Texas. First, the

actions stated above are Touradji’s actions, not the unilateral actions of some

third party. See Retamco , 278 S.W.3d at 340 (finding nonresident defendant’s

contact with Texas not result of unilateral activity of third party when

defendant was “willing participant in a transaction with an affiliated Texas

company to purchase Texas property”); TexVa, Inc. , 300 S.W.3d at 889 (nonresident defendants’ Texas contacts not

unilateral activity of third party where they formed partnership with Texas

resident, later incorporated partnership under Texas law, agreed to serve as

officers and directors of corporation, and traveled to Texas twice to discuss

business). Second, Touradji’s

contacts cannot be characterized as random, isolated, or fortuitous. See

Retamco , 278 S.W.3d at 340 (finding nonresident defendant’s contact with

Texas not “random, fortuitous, or attenuated” because defendant “reached out

and created a continuing relationship in Texas” by knowingly accepting transfer

of real property located in Texas); TexVa, Inc. , 300 S.W.3d at 889 (finding nonresident defendants’ Texas contacts

purposeful and not “random, isolated, or fortuitous” where defendants agreed to

create ongoing business relationship with Texas residents, form Texas

corporation, act as officers and directors of Texas corporation, and twice

traveled to Texas to discuss ongoing business of corporation). Third, Touradji sought benefits,

advantages, and profits through his purposeful availment of Texas. See

Retamco , 278 S.W.3d at 340 (finding nonresident defendant sought “benefit,

advantage or profit” in Texas by accepting real property located in Texas

because defendant could enforce warranties and covenants related to real property,

received revenue from property, and sold portion of property); TexVa,

Inc. , 300 S.W.3d at 889

(finding nonresident defendants’ acts in creating Texas corporation and ongoing

business relationship with Texas residents “clearly sought to profit” from

contact with Texas). We hold Touradji’s

contacts were purposefully directed towards Texas.

We

also note Touradji bears the burden of negating all bases of jurisdiction

alleged by the plaintiffs. See Kelly , 301 S.W.3d at 659 . Here, in his affidavit, Touradji admitted

that he had approximately 10 phone calls to and from Texas discussing the

ongoing business of Playa LP. Touradji

also visited Texas five times for Playa LP business. Concerning the specific allegations of fraud

(that Touradji made representations to plaintiffs in Texas) and interference

with contract (that Touradji took control of Playa LP, obstructed its ongoing

operations, and denied plaintiffs their share of revenues), Touradji avers, “To

the extent that any of the aforementioned allegations occurred—and I deny any

and all allegations of wrongdoing—Plaintiffs have not, and cannot, allege that

any of the allegations with respect to me occurred in Texas.” As discussed above, physical presence in

Texas is not the only basis for personal jurisdiction and plaintiffs’

allegations of fraud and interference with contract did sufficiently allege a

Texas connection.

3. Substantial Connection

In

this portion of his second issue, Touradji asserts that his contacts with Texas

are not substantially connected to the operative facts of the litigation. In order to meet the final requirement for

specific jurisdiction—that the claims arise from or relate to the defendant’s

contacts with Texas—there must be a substantial connection between those

contacts and the operative facts of the litigation. Moki Mac , 221 S.W.3d at 584–85.

Touradji’s contacts with Texas all relate to the ongoing business of

Playa GP and Playa LP. As discussed

above, these contacts include communicating to Texas residents concerning the

ongoing operations of Texas entities, consenting to the sale of Texas real

property, causing distributions to be made from a Texas entity, removing Beach

as a manager and officer of a Texas entity, and taking control of two Texas

entities. The underlying litigation

concerns whether, during the course of these activities, Touradji made

fraudulent representations to Texas residents, breached fiduciary duties that

he owed to Texas residents, or interfered with the business relationships and

contracts of Texas residents. This is a

sufficient basis to conclude the claims in this case are substantially related

to Touradji’s purposeful contacts with Texas.

See TexVa, Inc. , 300 S.W.3d at

890 (holding “no difficulty concluding” litigation concerning breach of

business agreements and breach of fiduciary duty arose from or was related to

defendants’ contacts that constituted ongoing business relationship with Texas). In addition, part of the alleged wrongdoing

involves the sale of Texas real property and the disbursement of the proceeds

from that sale to DeepRock from the Texas entities. See Retamco , 278 S.W.3d at 341 (suit

concerning allegedly fraudulent transfer of Texas real property from Texas

entity arises from or relates to Texas contacts even though transaction

occurred outside of Texas). We hold the

underlying litigation arises from or relates to Touradji’s contacts with Texas.

Touradji

relies upon two recent court of appeals cases to support his contention that he

is not subject to specific jurisdiction.

First, Touradji cites to Lamar v.

Poncon , No. 01-08-01036-CV, 2009 WL 3152181 (Tex. App.—Houston [1st Dist.]

Oct. 1, 2009, pet. filed). In Lamar , the Lamars booked a vacation in

Nicaragua. 2009 WL 3152181 at *1 . While driving the Lamars from the airport to

the resort, the driver fell asleep, severely injuring the Lamars in the ensuing

accident. Id. The nonresident

defendant allegedly made representations to the Lamars that their travel from

the airport to the resort would be safe.

Id. at *6. This court held specific jurisdiction was not

present because there was no substantial connection between the representation

and the operative facts of the litigation because the litigation would focus on

whether the nonresident defendant and its driver were negligent in

Nicaragua. Id. Unlike Lamar , the operative facts of this

litigation revolve around the ongoing business operations of a Texas entity

with its principal place of business in Texas.

Touradji’s contacts relate directly to the facts of the litigation, and

the focus of the litigation will not be on an accident or injury that occurred

outside of Texas. Lamar is distinguishable and therefore not controlling in this

case.

Touradji

also cites to Proctor v. Buell , 293

S.W.3d 924 (Tex. App.—Dallas 2009, no pet.).

In Proctor , the plaintiffs,

Texas residents, alleged the defendants, including Proctor, fraudulently

induced plaintiffs to invest $120,000 to acquire Texas property, of which

plaintiffs would receive partial ownership.

Proctor , 293 S.W.3d at

926 . Proctor filed a special appearance

that the trial court denied. Id. at 927 . The court of appeals held the trial court

erred because Proctor was not subject to specific jurisdiction in Texas. Id.

at 932 . Although Proctor contributed

money to acquire the Texas property and profited from the allegedly wrongful

sale of the property, the operative facts of the litigation would focus

primarily on the alleged misrepresentations made to plaintiffs and the

undisputed evidence showed that Proctor never communicated with plaintiffs in

any way. Id. The court therefore held

there was not a substantial connection between Proctor’s contacts and the

operative facts of the litigation. Id.

Here, plaintiffs have alleged that Touradji communicated with them

concerning the operations of a Texas entity.

This lawsuit involves those allegedly fraudulent communications. Further, it is undisputed that Touradji

communicated with plaintiffs, both over the phone and while physically present

in Texas. Proctor is distinguishable on the facts of the case.

We

sustain Touradji’s second issue concerning the claims for slander and libel and for intentional

infliction of emotional distress. We

overrule Touradji’s second issue concerning the claims for fraud, breach of

fiduciary duty, and interference with contract and economic relations.

Conclusion

We reverse the trial court’s denial of

Touradji’s special appearance concerning the claims for slander and libel and

for intentional infliction of emotional distress. We also reverse the trial court’s denial of

Touradji’s special appearance concerning general jurisdiction. We affirm the trial court’s order in all other

respects. We remand this case to the

trial court for further proceedings.

Elsa

Alcala

Justice

Panel consists

of Chief Justice Radack and Justices Alcala and Higley.

[1] See

Tex.

Civ. Prac. & Rem. Code Ann.

§ 51.014(a)(7) (Vernon 2008) (authorizing interlocutory appeal of order denying

special appearance).

[2]

U.S. Const. amend. XIV, § 1.

[3] See Tex. Civ. Prac. & Rem. Code Ann. §

17.042 (Vernon 2008).

[4] Due process also requires that the

exerc ise of personal jurisdiction over a nonresident

defendant “comport with fair play and substantial justice.” Preussag

Aktiengesellschaft v. Coleman , 16 S.W.3d 110, 113 (Tex. App.—Houston [1st

Dist.] 2000, pet. dism’d w.o.j.).

Touradji does not assert that the exercise of personal jurisdiction over

him would violate fair play and substantial justice. We therefore do not address this issue.

[5] Plaintiffs assert that Touradji’s

concession that specific jurisdiction exists with respect to certain claims,

discussed below, waives his special appearance with respect to all remaining

claims. To support this assertion,

plaintiffs cite to this Court’s opinion in Glattly

v. CMS Viron Corp. , 177 S.W.3d 438 (Tex. App.—Houston [1st Dist.] 2005, no

pet.). In Glattly , we stated that the trial court properly denied Glattly’s

special appearance if personal jurisdiction existed with respect to any claim

asserted against him. Glattly , 177 S.W.3d at 447 . We noted that Glattly had filed a special

appearance “to the entire proceeding” rather than making a special appearance

as to specific claims. Id. ; see

also Tex. R. Civ. P.

120a(1) (“A special appearance may be made as to an entire proceeding or as to

any severable claim involved therein.”).

We also noted that Glattly’s personal jurisdiction briefing in the trial

court did not assert separate arguments for separate causes of action brought

against him or assert that any cause of action asserted against him was

severable. Id. Glattly is distinguishable.

Here, Touradji filed a brief with the trial court specifically asserting

that different

causes of action must be examined separately for personal jurisdiction and citing

Seiferth v. Helicopteros Atuneros, Inc. , 472 F.3d 266 (5th

Cir. 2006). At the special appearance

hearing, Touradji also specifically argued that specific jurisdiction must be

established separately for each cause of action.

[6] In his brief to this Court, Touradji

states he is not appealing the trial court’s denial of his special appearance

concerning the claim for interference with contract and economic relations, but

only to the extent “this cause of action arises from Touradji’s actions as a manager of Playa GP.” (Emphasis in original). Unlike the claim for breach of fiduciary

duty, discussed below, the allegations do not clearly limit this cause of

action as arising from Touradji’s role as a manager of Playa GP. We therefore address this claim on the merits

of the jurisdictional issue.