David Franke, Bruce Nickel, Mike Schankenburg, Kent Schankenburg and Rick Zimmer v. Guidewave Consulting, L.L.C., Johan Bollen, Individually & Rocky v. Emery, Individually

Opinion issued November 5, 2019

In The

Court of Appeals

For The

First District of Texas

————————————

NO. 01-18-00890-CV

———————————

DAVID FRANKE, BRUCE NICKEL, MIKE SCHANKENBURG, KENT

SCHANKENBURG, AND RICK ZIMMER, Appellants

V.

JOHAN BOLLEN, Appellee

On Appeal from the 127th District Court

Harris County, Texas

Trial Court Case No. 2017-83163

MEMORANDUM OPINION

Appellants David Franke, Bruce Nickel, Mike Schankenburg, Kent

Schankenburg, and Rick Zimmer (collectively, the Investors) challenge the trial

court’s grant of the special appearance of appellee Johan Bollen. The Investors

assert that Bollen had contacts with Texas in connection with the sale of securities

to Texas residents and that his status as a control person of an entity that engaged

in securities fraud in Texas supports the exercise of personal jurisdiction over him.

Because we conclude that the Investors failed to allege or provide any evidence of

Bollen’s purported contacts with Texas that gave rise to this litigation, we affirm

the trial court’s grant of Bollen’s plea to the jurisdiction.

Background

Bollen is the founder and majority shareholder in Guidewave Consulting,

LLC. The Investors sued Bollen individually, Guidewave, and another Guidewave

officer, Rocky Emery, alleging fraudulent inducement and securities fraud in

connection with the Investors’ decision to invest $495,000 in predictive

technology.

In their original petition, the Investors alleged that Guidewave is a privately

owned company based in Indiana, founded by Bollen in 2011 “to monetize

predictive technology he developed while working at Indiana University.”

According to the Investors’ petition, “Guidewave’s technology allegedly allows it

to analyze data from social media to determine a global ‘mood’ that can predict

trends or outcomes including, but not limited, to financial markets, political

elections, and major world events.”

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The Investors alleged causes of action for fraudulent inducement and

securities fraud against Guidewave, Bollen, and Emery, stating that the Guidewave

parties:

jointly and severally represented, among other things, that:

(1) Guidewave’s social media analytics could make reliable and

consistent predictions regarding movements in the financial markets,

political elections, and major world events; and that (2) KPMG was

going to be a 50% investor in Guidewave, which would make

Guidewave a billion dollar company; and (3) that the [Investors]

would earn a substantial return on their investment.”

The Investors asserted that the Guidewave parties knowingly or recklessly made

these material and false representations and that the Investors relied on the

misrepresentations “in their decision to invest approximately $495,000.00, and

suffered financial harm as a proximate cause of the false representations.”

The Investors further alleged that Bollen and Emergy “were the majority

members and beneficial owners of Guidewave” and “[c]aused Guidewave to be

used for the purpose of perpetrating and did perpetrate an actual fraud on [the

Investors] for the direct personal benefit of themselves and are personally liable

under the common law” and Business Organizations Code sections 101.002 and

21.223(b). And they alleged that because the Guidewave parties’ “conduct relates

to the sale of a security, their fraudulent conduct constitutes securities fraud.”

The Investors did not specifically identify any statements by Bollen, made

either directly or indirectly, that they relied upon. Nor did the they identify the

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nature of their investment with Guidewave. It appears from the record that the

Investors actually invested money in a third company—Predictor Technology

Corp.—but that company is not a party to this lawsuit, and the Investors do not

explain the relationship, if any, between Predictor and Guidewave or Bollen. The

Investors alleged only that Guidewave at some point approved Emery’s transfer of

a portion of his own interest in Guidewave to them, without explaining when or

how they paid for such a transfer. Rather, the Investors alleged the following facts

in support of their fraud claims:

• Emery “was not only an investor and company officer in Guidewave, but

was authorized by Guidewave and [Bollen] to solicit other investors for

the purpose of raising capital to fund Guidewave’s operations.”

• The Investors were contacted by Emery on Guidewave’s behalf in

February 2014 because Emery wanted them to invest in Guidewave.

• Emery “made representations with a particular emphasis on Guidewave’s

purported ability to predict movements in financial markets” and Bollen

“conferred with [the Investors] about Guidewave’s technology and uses.”

Emery “for his own benefit and that of Guidewave, secured signed

buy/sell agreements with” the Investors.

• The Guidewave parties used “sales tactics” that included sending the

Investors Guidewave’s newsletter, “as well as hand-picked ‘Guidewave

Alerts’ and ‘Guidewave Indicators of the Day,’ which purported to show

how closely Guidewave predicted market movements, but always after

the predictions had come true.”

• Emery represented “that KPMG had expressed an interest in acquiring as

much as 50% of Guidewave, which, according to Mr. Emery, would ‘. . .

make [Guidewave] a billion dollar company. . . .’”

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• Emery became Guidewave’s chief operating officer with a 35%

ownership interest in June 2014 and “immediately agreed to sell a portion

of his 35% interest in order to help capitalize Guidewave.”

• Investors “understood that their investment equated to a 9.9% ownership

interest in Guidewave” collectively and that their total investment was

$495,000.

• “In June 2014, the [Investors] became suspicious that something was

amiss. More specifically, by this time period, none of the [Investors] had

received membership certificates or any other documentation showing

that they were members of Guidewave. This was particularly worrisome

because several of the [Investors] had reached out to Mr. Emery asking

for such documentation. Mr. Emery would always assure those who

inquired that the documents would be forthcoming.”

• Emery resigned his position as Guidewave’s COO in December 2014

“because he planned to form a hedge fund using Guidewave’s analytics.”

Emery “divested himself of his interest in Guidewave” by transferring his

units to Bollen, “ostensibly to avoid any appearance of a conflict of

interest.” Thus, Bollen became a 79.4% owner of Guidewave.

• “To this day none of the [Investors] has ever received any income or

dividends from his investment in Guidewave. Nor has any [Investor]

received any tax returns, K-1s, bank statements or other forms of

financial information that an owner would commonly receive.”

Bollen filed a special appearance that he supported with his sworn

declaration. Bollen asserted that he is a resident of Indiana, does not maintain a

residence, office, or place of business in Texas, does not do business in Texas, and

is neither required to nor does he actually maintain an agent for service of process

in Texas. Bollen further alleged that he does not “own, rent, lease, or hold any

other interest in any real or personal property located in the State of Texas”; he

does not maintain any bank accounts in Texas; he does not advertise within Texas;

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and he “has never sued anyone in the state or federal courts in Texas and has only

been sued once in Texas: in this lawsuit.”

Regarding the specific allegations of the Investors, Bollen asserted that he

did not, “in an individual capacity,” authorize Emery or anyone else “to solicit

investors for the purpose of raising capital to fund [Guidewave’s] operations.”

Bollen acknowledged that, in June 2014, Guidewave authorized Emery to sell a

portion of the membership units owned by Emery himself, but neither Guidewave

nor Bollen authorized Emery to make any misrepresentations, nor were they

“aware of any such misrepresentations having been made by [Emery] or anyone

else.” Bollen further alleged that he did not personally “direct any Guidewave

newsletters, ‘Guidewave alerts’ or ‘Guidewave Indicators of the Day’” to the

Investors, and he asserted that he had “no recollection of having ever met or

spoken to” the Investors, and he has never had any business of personal dealings

with the Investors.

Bollen stated that “it is possible that I participated in a web conference in

which one or more of the [Investors] participated, but if I did, I have no

recollection of it” and “would have attended any such web conference from the

State of Indiana.” Bollen stated in his special appearance that his “only connection

with the state of Texas are two trips to Texas in 2014 for meetings with John

Mauldin and representatives from KPMG [who are not parties to the underlying

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suit] and one trip to Texas in 2012 to speak at the South by Southwest Conference

in Austin.”

In their response to Bollen’s special appearance, the Investors argued that

Bollen has minimum contacts with Texas. They asserted that he had the following

contacts with Texas:

• “Bollen directed and participated in recruiting Texas investors.” He

“made a presentation in an interactive web conference in February 2014,

which was intended to explain to several Texas residents [Guidewave’s]

predictive technology” and that the Texas residents included Franke (one

of the Investors in this suit) and two other Texas residents who are not

parties to this suit.

• In June 2014, Bollen, “as the majority owner of Guidewave, approved a

motion to permit [Emery] to raise capital for Guidewave.”

• In June or July 2014, Emery organized a trip to Houston during which

“Bollen attended between six (6) and twelve (12) meetings with a total of

approximately twenty (20) potential investors including, but not limited

to KPMG, Glaw, and Casey, among others.”

• Later in 2014, Bollen “issued or caused to be issued ownership

certificates” indicating that the Investors collectively owned 9.9% of

Guidewave.

• “Bollen personally engaged in marketing efforts by making national

media appearances promoting both himself and his technology,”

including an appearance on Fox News that aired on February 2, 2015.

The Investors also asserted that Bollen “is a control person as defined” in the

Texas Securities Act, and they argued that “personal jurisdiction may be found

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where a defendant takes part in any aspect of a tortious scheme that impacts Texas

citizens, regardless of a defendant’s other links to this State.”

The Investors also provided some evidence in support of their response to

Bollen’s plea to the jurisdiction. Emery made a declaration that he participated in

an interactive web conference in February 2014 and that one purpose of the

conference was to present to the Investors “how Guidewave’s technology could

analyze social media . . . and then be used to make predictions about certain

events.” Emery stated that the web conference was attended by “some of the Texas

[Investors]” in addition to other Texas residents who were “evaluating Guidewave

as a potential investment for themselves and/or their clients.”

Emery further declared that “[s]hortly after the February 2014 conference,

the [Investors] invested in a company called Predictor Technology Corp. The

[Investors’] interest in Guidewave was acquired later in 2014.” He stated that, in

June or July 2014, Bollen came to Texas for a series of meetings with “potential

investors and/or buyers of Guidewave,” including KPMG and other individuals

who are not parties to this suit, and Emery stated, “Any buyer’s acquisition of

Guidewave would have included a sale of Bollen’s individual interest in

Guidewave.” Emery also declared that Bollen “made multiple media appearances

that reached viewers in Texas, and which promoted his technology,” including but

not limited to the February 2, 2015 interview on Fox News. Emery “mentioned

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Bollen’s Fox News appearance in an email sent to [some of the Investors] on

February 4, 2015.” And Emery stated that “Bollen used the interview as one,

among many, efforts to create an individual media persona known as the Twitter

Predictor.” Emery stated that in the fall of 2014, “as the majority owner of

Guidewave, [Bollen] personally approved that the [Investors] would receive a

collective 9.9% ownership interest in Guidewave” that was transferred from

Emery’s own interest in the company.

The Investors also supplied the declaration of Investor David Franke. He

stated that he participated in the February 2014 interactive web conference, which

was attended by other Texas residents who were not parties to this suit. Franke and

the other investors “invested in a company called Predictor Technology Corp”

shortly after the February 2014 conference and then “acquired” their interest in

Guidewave “later in 2014.” Franke further declared that Bollen met with people in

Texas, but he did not allege that he personally met with Bollen. Rather, Franke

stated, “From my discussions with Rocky Emery, I understood that the purpose of

the KPMG meeting was to see if KPMG would either buy Guidewave and its

technology, invest in Guidewave, or encourage one or more of its clients to invest

in Guidewave.”

Franke further stated, “I understand from Rocky Emery that other meetings

occurred between Bollen and Texas residents, including further discussions with

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KPMG, regarding possible investment in Guidewave.” Franke also mentioned

Bollen’s “multiple media appearances that reached viewers in Texas, and which

promoted his technology.” He specifically mentioned the February 2, 2015

interview on Fox News and stated that he and his fellow Investors “learned of

Bollen’s interview from a February 4, 2014 email that we received from Rocky

Emery.”

Franke further stated, “In or about October 2014, Rocky Emery sent me

information that appeared to confirm that Bollen, as the majority owner of

Guidewave, personally approved that the [Investors] would receive a collective

9.9% ownership interest in Guidewave.” The attached email was sent on October

29, 2014, from Emery, and copied Bollen. It stated, “Here are your certs and the

agreement with IU and CAP Table as of 10/29/2014[.] I will send operating

agreements later. Thanks for your patience and support as always. . . . Will get

originals of everything to you when we have lunch again. Let me know some dates

that work.” The attached “table” of ownership interest showed that the transfer of

ownership to the Investors was made from Emery’s interest in Guidewave. The

emails also included Guidewave’s certificate of organization, articles of

incorporation, and “LLC Membership Certificates” in Guidewave for each Investor

according to his percentage interest in the company.

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The Investors also provided Guidewave’s “special meeting minutes” from

the June 15, 2014 meeting in which Bollen, as “the chairperson of the meeting,”

conducted business including hiring Emery as COO in exchange for 35% of

Guidewave’s membership units. The minutes also reflected that Emery “agreed to

sell some of his units in order to capitalize [Guidewave].” And the minutes

included a “CAP TABLE AS OF 6/15/2014” reflecting the Investors’ interest in

Guidewave. These minutes were signed by Emery, but not by Bollen. The

Investors also provided special meeting minutes from the December 31, 2014

meeting in which Emery stepped down from the Guidewave Board and agreed to

transfer his ownership interest in Guidewave to Bollen. These minutes were signed

by Emery and Bollen.

Bollen replied in support of his special appearance, pointing out that there

were no allegations that he personally had ever met or dealt with the Investors. He

asserted:

In fact, the Investors did not invest in [Guidewave]. Rather, on

February 26, 2014, the [Investors] invested their money in a company

called Predictor Technologies Corp. (“Predictor”). In this regard, the

[Investors] executed agreements for the purchase of shares in

Predictor in which they [acknowledged that no statements,

representations, or warranties had been made or furnished to them by

the “Company” or any person acting on behalf of the “Company”]

[and] [e]ach of the agreements was addressed to Rocky and Julie

Emery and the funds were to be transmitted to the Attorney Escrow

account of Mintz & Faraade, P.C.

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Bollen asserted that the Investors’ response to the special appearance

“acknowledge[d] that their investments in February 2014 were in Predictor,” not

Guidewave.

Bollen further asserted that, although the Investors asserted and provided

statements indicating that at least one of them participated in the February 2014

web conference, they have not asserted or demonstrated that Bollen participated in

that conference. He asserted that the Investors pleaded generally that Bollen made

misrepresentations to them in connection with their investment, but they failed to

present evidence of any such misrepresentation and have “wholly fail[ed] to

articulate, in any way, the factual basis for any claims against Bollen, including

any claims for common law or securities fraud.” Finally, Bollen argued that the

Investors did not provide any evidence of what Bollen allegedly said in his

February 2015 Fox News interview “or how what he said could have impacted

their decision to make financial investments [in] 2014.” Bollen attached four

purchase agreements between individual Investors and Emery to purchase shares in

Predictor Technologies Corp. These agreements indicated that four of the Investors

paid a total of $250,000 for the Predictor stock. There was no evidence from any

source, nor even any pleadings, indicating with whom or for what consideration

the remaining alleged investments occurred. Nothing in the pleadings or evidence

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explains the nature of the relationship, if any, between Predictor and Bollen or

Guidewave.

The trial court granted Bollen’s special appearance and dismissed all of the

claims against Bollen. The trial court subsequently signed findings of fact and

conclusions of law that Bollen is a resident of Indiana and has not had any dealings

or contacts with Texas except for two trips to Texas in 2014 for meetings with

third parties and a meeting in 2012 to speak at a conference in Austin. The trial

court found that Bollen “did not personally direct any Guidewave newsletters” or

other communications to the Investors and that “Bollen has never had any business

or personal dealings with any of the [Investors].” The trial court also found that the

Investors did not invest in Guidewave but instead “executed agreements for the

purchase of shares in Predictor. . . .” The trial court further found that, “[a]lthough

the [Investors] allege to have participated in a web conference related to

[Guidewave] in February 2014, they have not alleged that Bollen also participated

in that web conference” and that the “record does not contain evidence regarding

the substance” of Bollen’s February 2, 2015 interview with Fox News.

Special Appearance

The Investors argue on appeal that the trial court erred in granting Bollen’s

special appearance given Bollen’s “contacts with the State of Texas in connection

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with the sale of securities to Texas residents” and Bollen’s “status as a control

person of an entity which engaged in securities fraud in Texas.”

A. Standard of Review

Whether a court can exercise personal jurisdiction over a nonresident

defendant is a question of law, and thus we review de novo the trial court’s ruling

on a special appearance. Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 657

(Tex. 2010); Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.

2007). However, the trial court frequently must resolve questions of fact before

deciding the jurisdiction question. BMC Software Belg., N.V. v. Marchand, 83

S.W.3d 789, 794 (Tex. 2002).

“If a trial court enters an order denying a special appearance, and the trial

court issues findings of fact and conclusions of law, the appellant may challenge

the fact findings on legal and factual sufficiency grounds,” and the court may

review fact findings for both legal and factual sufficiency. Id. We review a trial

court’s conclusions of law as a legal question, and, while an appellant may not

challenge a trial court's conclusions of law for factual insufficiency, we may

nevertheless review the trial court’s legal conclusions drawn from the facts to

determine their correctness. Id. If we determine that a conclusion of law is

erroneous, but the trial court rendered the proper ruling, the erroneous conclusion

of law does not require reversal. Id.

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Texas courts may exercise personal jurisdiction over a nonresident if the

long-arm statute authorizes it, consistent with federal and state constitutional due-

process guarantees. Moncrief Oil Int'l Inc. v. OAO Gazprom, 414 S.W.3d 142, 149

(Tex. 2013). The long-arm statute permits Texas courts to exercise jurisdiction

over a nonresident defendant that “does business” in Texas, and it provides a non-

exhaustive list of activities that constitute “doing business,” including committing

a tort “in whole or in part” in Texas. See TEX. CIV. PRAC. & REM. CODE

§ 17.042(2); BMC Software, 83 S.W.3d at 795. Personal jurisdiction over a

nonresident is consistent with due process when the nonresident has established

minimum contacts with the forum state and the exercise of jurisdiction comports

with traditional notions of fair play and substantial justice. Moki Mac, 221 S.W.3d

at 575. In most cases, the exercise of jurisdiction over a nonresident defendant will

not conflict with notions of fair play and substantial justice if the nonresident has

minimum contacts with the forum. Moncrief Oil, 414 S.W.3d at 154–55.

“A defendant establishes minimum contacts with a state when it

‘purposefully avails itself of the privilege of conducting activities within the forum

state, thus invoking the benefits and protections of its laws.’” Retamco Operating,

Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009) (quoting Hanson v.

Denckla, 357 U.S. 235, 253 (1958)). The Texas Supreme Court has identified three

distinct aspects of the “purposeful availment” requirement. First, only the

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defendant’s contacts with the forum are relevant, because a nonresident should not

be called to court in a jurisdiction solely as a result of the unilateral activity of

another party. Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 785

(Tex. 2005). Second, the defendant’s acts must be purposeful, as opposed to

random, isolated, or fortuitous. Id. Third, the defendant must seek some benefit,

advantage, or profit by availing itself of the jurisdiction. Id.

A defendant’s contacts can vest a court with either specific or general

jurisdiction. BMC Software, 83 S.W.3d at 795. Specific jurisdiction requires that

the claims at issue arise from or relate to the defendant’s purposeful contacts with

Texas. Kelly, 301 S.W.3d at 658. General jurisdiction, on the other hand, is

predicated on the defendant’s “continuous and systematic” contacts that render it

“essentially at home in the forum State,” irrespective of whether its alleged liability

arises from those contacts. TV Azteca v. Ruiz, 490 S.W.3d 29, 37 (Tex. 2016)

(quoting Daimler AG v. Bauman, 571 U.S. 117 (2014)).

When a defendant challenges the exercise of personal jurisdiction in a

special appearance, the plaintiff and the defendant bear shifting burdens. Kelly, 301

S.W.3d at 658. The initial burden is on the plaintiff to plead sufficient allegations

to establish jurisdiction over the defendant. Id. After the plaintiff meets its initial

burden, the burden shifts to the defendant to negate all bases of jurisdiction alleged

by the plaintiff. Id.

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The defendant can negate jurisdiction on either a factual or a legal basis. Id.

at 659. To negate jurisdiction on a factual basis, the defendant can “present

evidence that it has no contacts with Texas, effectively disproving the plaintiff’s

allegations.” Id. Alternatively, the defendant can negate jurisdiction on a legal

basis by showing that “even if the plaintiff’s alleged facts are true,” (1) the

evidence is legally insufficient to establish jurisdiction; (2) the defendant’s

contacts with Texas do not amount to purposeful availment; (3) for specific

jurisdiction, the plaintiff’s claims do not arise from the defendant’s contacts; or

(4) the exercise of jurisdiction would offend traditional notions of fair play and

substantial justice. Id.

B. General Jurisdiction

“[G]eneral jurisdiction is only present when a defendant not only has

continuous and systematic contacts with the forum state, but also has these kinds of

contacts to such an extent that they render it essentially at home in that state.”

Searcy v. Parex Res., Inc., 496 S.W.3d 58, 72–73 (Tex. 2016); Ruiz, 490 S.W.3d at

37. Because general jurisdiction permits a court to exercise personal jurisdiction

over a nonresident for claims not directly linked to his contacts with the state, a

general jurisdiction inquiry requires a more demanding minimum-contacts analysis

with a “substantially higher threshold.” PHC-Minden, L.P. v. Kimberly-Clark

Corp., 235 S.W.3d 163, 168 (Tex. 2007).

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The Investors have not provided any pleadings or evidence indicating that

Bollen can be considered “essentially at home” in Texas. The uncontroverted

evidence indicated that Bollen is an Indiana resident who owns no property in

Texas and has only traveled to Texas on three occasions. They have not pleaded

that Bollen individually does business regularly in Texas or that he maintains any

kind of office or presence in the state. The Investors alleged generally that Bollen

approved Emery’s acts in Texas, but Emery’s actions on his own behalf or on

behalf of Guidewave cannot constitute contacts between Bollen and Texas. See

Michiana, 168 S.W.3d at 785 (only defendant’s contacts with forum are relevant

because nonresident should not be called to court in jurisdiction solely as result of

unilateral activity of another party); Citrin Holdings, LLC v. Minnis, 305 S.W.3d

269, 279 (Tex. App.––Houston [14th Dist.] 2009, no pet.) (“When there are

multiple defendants, the contacts of each defendant must be analyzed

individually.”) (citing Calder v. Jones, 465 U.S. 783, 790 (1984)).

Furthermore, the Investors did not provide any information regarding

Bollen’s, Emery’s, or Guidewave’s activities in their entirety to place any contacts

with Texas in the proper context. “[W]ithout evidence about the full nature of

[defendant]’s business and contacts with Texas as compared to other forums, the

record does not support the exercise of general jurisdiction based on the presence

of a single employee in Texas.” Bautista v. Trinidad Drilling Ltd., 484 S.W.3d

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491, 503 (Tex. App.—Houston [1st Dist.] 2016, no pet.); see also Brenham Oil &

Gas, Inc. v. TGS-NOPEC Geophysical Co., 472 S.W.3d 744, 759 (Tex. App.—

Houston [1st Dist.] 2015, no pet.) (“Occasional travel to Texas is insufficient by

itself to establish continuous and systematic contacts with the state.”); DENSO

Corp. v. Hall, 396 S.W.3d 681, 693–94 (Tex. App.—Houston [14th Dist.] 2013, no

pet.) (trips to Texas by foreign corporation personnel over ten-year period did not

support general jurisdiction because evidence did not establish general business

presence).

Because the Investors’ allegations and the evidence do not support a finding

that Bollen’s contacts with Texas were so substantial that he was “essentially at

home” in Texas, we conclude that Bollen satisfied his burden to negate general

jurisdiction on a legal basis. See Kelly, 301 S.W.3d at 659.

C. Specific Jurisdiction

For a Texas court to exercise specific jurisdiction over Bollen, two things are

required: Bollen’s Texas contacts must have been purposeful, and the Investors’

claims for fraudulent inducement and securities fraud must arise from those

contacts. See Old Republic Nat’l Title Ins. Co. v. Bell, 549 S.W.3d 550, 559 (Tex.

2018); Michiana, 168 S.W.3d at 795.

Our analysis centers on Bollen’s actions and choices to enter the State of

Texas and conduct business, as opposed to his contacts with Texas residents. See

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Old Republic, 549 S.W.3d at 561 (“[A] proper minimum-contacts analysis looks to

the defendant’s contacts with the forum state itself, not the defendant’s contacts

with persons who reside there.”); Searcy, 496 S.W.3d at 76 (“[T]he proper focus is

on the quality of the defendant’s contacts with the forum, as opposed to the

residence of the plaintiff.”). In other words, we consider only Bollen’s contacts

resulting from his own “efforts to avail [himself] of the forum.” Ruiz, 490 S.W.3d

at 38 (quoting Moki Mac, 221 S.W.3d at 576).

The record does not contain evidence of any Texas contact by Bollen that

could give rise to the Investors’ claims for fraudulent inducement or securities

fraud. See Old Republic, 549 S.W.3d at 561; Searcy, 496 S.W.3d at 76. There is no

indication that Bollen made any representations to the Investors before their

February 2014 investment with Predictor. There is no evidence of any relationship

between Bollen individually and Predictor. There is no evidence that the Investors

paid any money to Bollen personally or that Bollen benefitted—either personally

or as a principal of Guidewave—from any payments that the Investors made to

Predictor through Emery.

The Investors point to their evidence regarding the February 2014 interactive

web conference. They argue that the declarations of Emery and Franke undermine

Bollen’s assertions that there is no evidence that he participated in the web

conference and that there is no evidence of the content of the web conference. But

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nothing in either Emery’s or Franke’s declaration indicated that Bollen himself

participated in the web conference. Franke’s declaration stated,

I participated in an interactive WebEx conference. One purpose of the

web conference, among others, was to present to the [Investors] how

Guidewave’s technology could analyze social media, such as Twitter

and Facebook, and then be used to make predictions about certain

events, including, but not limited to, the financial markets, politics,

and major world events. . . .

The persons from Texas who attended the February 2014 web

conference included not only some of the Texas [Investors], but other

Texas residents [who are not parties to this lawsuit]. I understood that

the [third parties] were evaluating Guidewave as a potential

investment for themselves and/or their clients.

Emery’s statement on this issue was substantively identical. Nothing in either

statement asserts that Bollen participated in the conference. Neither statement

identifies any misrepresentation by Bollen or other action that could have

contributed to the Investors’ subsequent decision to invest in Predictor.

Furthermore, electronically transmitting an allegedly fraudulent or negligent

misrepresentation to a Texas resident does not constitute the commission of a tort

in Texas and therefore does not establish specific jurisdiction. 11500 Space Ctr.,

L.L.C. v. Private Capital Grp., Inc., 577 S.W.3d 322, 331–32 (Tex. App.—

Houston [1st Dist.] 2019, no pet.); cf. Michiana, 168 S.W.3d at 791 (“[C]hanges in

technology have made reliance on phone calls obsolete as proof of purposeful

availment.”); Chameli v. Fla. Gas Transmission Co. LLC, No. 01-17-00823-CV,

2018 WL 3059732, at *6 (Tex. App.—Houston [1st Dist.] June 21, 2018, no pet.)

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(mem. op.) (defendant’s email and phone communications, including alleged

misrepresentation, to plaintiffs in Texas did not alone constitute minimum

contacts); Majors Mgmt., LLC v. Price & Co., No. 09-17-00063-CV, 2018 WL

771008, at *7–8 (Tex. App.—Beaumont Feb. 8, 2018, no pet.) (mem. op.) (no

purposeful availment where all of nonresident defendant’s contacts with plaintiff

were through telephone calls, email messages, and wire transfers); Hatzenbuehler

v. Essig, 526 S.W.3d 657, 665 (Tex. App.—Houston [1st Dist.] 2017, no

pet.) (telephone calls and emails alleged to contain misrepresentations were “not

sufficient to establish that [defendant’s] alleged tortious acts were directed to

Texas” because “[t]he Supreme Court of Texas has specifically rejected telephone

calls, without more, as a basis for establishing personal jurisdiction based on a tort

committed in the state”).

The Investors also point to the meetings between Bollen and Texas residents

in June and July 2014. Nothing in the record indicates that Bollen met with any of

the Investors who are a party to this suit. Nothing indicates that Bollen ever made

any representations to the Investors about his meeting with KPMG or other

investors. The Investors do not cite any facts indicating how Bollen’s meetings

with third parties—meetings that occurred months after the Investors paid Emery

for shares of Predictor—formed the basis of this suit. “[F]or a nonresident

defendant’s forum contacts to support an exercise of specific jurisdiction, there

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must be a substantial connection between those contacts and the operative facts of

the litigation.” Moki Mac, 221 S.W.3d at 585. The Investors have not shown any

connection between Bollen’s 2014 meetings and the operative facts of this

litigation. See id.

The Investors also asserted that Bollen issued or caused to be issued

ownership certificates indicating the transfer of some of Emery’s interest in

Guidewave to the Investors, thus giving the Investors a 9.9% interest in

Guidewave. Nothing in the pleadings or evidence, however, indicates that the

Investors paid money to Guidewave in connection with this transfer. Nothing in the

pleadings or evidence indicates that Bollen himself received a benefit from this

transfer or that Bollen availed himself of doing business in Texas by approving the

transfer. See Retamco Operating, 278 S.W.3d at 338 (defendant establishes

minimum contacts with forum state by “purposefully avail[ing] itself of the

privilege of conducting activities within the forum state, thus invoking the benefits

and protections of its laws”); Michiana, 168 S.W.3d at 785 (contacts must be

purposeful, as opposed to random, isolated, or fortuitous, and defendant must seek

some benefit, advantage, or profit by availing itself of forum state’s jurisdiction).

The record demonstrates only that the Investors paid Emery in connection with a

company called Predictor, and Emery later transferred some of his interest in

Guidewave with approval from Guidewave’s board, on which Bollen serves.

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Likewise, there are no pleadings or explanation of how this transaction gave rise to

the Investors’ claims for fraudulent inducement or fraud in connection with a sale

of securities against Bollen. See Kelly, 301 S.W.3d at 659 (specific jurisdiction

requires that claims at issue arise from or relate to defendant’s purposeful contacts

with Texas).

Finally, the Investors point to Bollen’s “multiple media appearances” but

specifically mention only the February 2, 2015 appearance on Fox News to discuss

his technology’s ability to predict terror attacks. They argue that these appearances

reached Texas residents, including the Investors themselves. Franke’s declaration

indicates that he was made aware of the appearance two days after it occurred

when Emery forwarded a link to the interview by email two days later. Again,

however, the Investors have not shown any connection between this purported

contact and the operative facts of this litigation. Nothing in the pleadings or

evidence identified any particular statement made by Bollen during this

presentation that could support the Investors’ fraud claims, and there is no

explanation for how Bollen’s 2015 interview could have fraudulently induced the

Investors to invest in Predictor in the previous months. See id.

The Investors have not pointed to any contacts between Bollen and Texas

that could form the basis of their fraudulent inducement or securities fraud claims.

See Old Republic, 549 S.W.3d at 561; Searcy, 496 S.W.3d at 76. Accordingly, the

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trial court properly concluded that it could not exercise specific jurisdiction over

Bollen. Kelly, 301 S.W.3d at 659 (defendant can negate jurisdiction on legal basis

by showing that even if plaintiff’s alleged facts are true, defendant’s contacts with

Texas do not amount to purposeful availment).

Conclusion

We sustain the trial court’s grant of Bollen’s plea to the jurisdiction.

Richard Hightower

Justice

Panel consists of Justices Kelly, Hightower, and Countiss.

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