Michael Wayne Briggs John Cockerham, Individually and D/B/A Briggs-Cockerham, LLC And Briggs-Cockerham, LLC v. Seacoast Power, L.L.C. Old Dominion Electric Cooperative Energy Services, Inc. CSC Services, Inc. Cooperative Services International And MCI Power Group, LLC

Citation: Not availableDocket: 03-01-00286-CV

Court: Court of Appeals of Texas; October 25, 2001; Texas; State Appellate Court

Original Court Document: View Document

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The Texas Court of Appeals, Third District, affirmed the district court's order sustaining the appellees' special appearance, determining that Texas courts could not assert in personam jurisdiction over the out-of-state corporations involved in a contract for electrical power in Ecuador. The case originated from a contract negotiated between Seacoast, Inc. and an Ecuadorian agency, which was later transferred to a new entity, Seacoast Power, LLC, through a joint venture agreement. Appellants Michael Wayne Briggs and John Cockerham, operating as Briggs-Cockerham, LLC, executed the agreement in Texas, but all appellees were out-of-state corporations with no presence in Texas. The agreement involved significant financial contributions and transfers related to equipment and contracts. 

The dispute arose when Ronald W. Watkins accused Briggs of breaching the agreement, leading to a default judgment against Seacoast due to a failure to notify its board of directors. In challenging the district court's ruling on jurisdiction, Briggs-Cockerham argued that the appellees had invoked Texas jurisdiction by engaging with a Texas corporation and entering the agreement. The court clarified that the question of personal jurisdiction is a legal issue, subject to de novo review when facts are undisputed, leading to the conclusion that the appellees were not subject to Texas jurisdiction.

The district court's lack of findings of fact and conclusions of law implies all necessary facts to support its judgment, which can only be set aside if such implied findings are manifestly erroneous or unjust. If evidence supports these findings, the judgment must be upheld under any valid legal theory. Texas courts' personal jurisdiction over nonresidents is governed by the Texas long-arm statute, allowing jurisdiction to the fullest extent permitted by the U.S. Constitution, limited only by the Fourteenth Amendment. Due process is satisfied when a nonresident has established "minimum contacts" with Texas, ensuring that maintaining a lawsuit does not violate traditional notions of fair play and substantial justice. The minimum contacts analysis considers the nonresident's intentional activities and expectations regarding Texas jurisdiction, distinguishing between general jurisdiction (based on continuous and systematic contacts) and specific jurisdiction (based on particular activities). Briggs-Cockerham asserts specific jurisdiction based on the appellees' contract to purchase a Texas corporation and the execution of the agreement in Texas; however, they do not claim the appellees executed the agreement in Texas. The Texas long-arm statute does allow jurisdiction if a nonresident contracts with a Texas resident, provided any part of the contract is performed in Texas. However, since the agreement's purpose was to provide electrical power in Ecuador, it was not performable in Texas. Texas law establishes that unilateral acts by those claiming a relationship with a nonresident cannot establish minimum contacts; specific jurisdiction requires that the cause of action arises from the nonresident's purposeful contacts with Texas, not from the plaintiff's unilateral actions.

In TeleVentures, Inc. v. International Game Tech., the court emphasized that establishing specific jurisdiction requires a nonresident to purposefully direct activities towards Texas. Appellees did not incur jurisdictional consequences from Briggs's unilateral agreement execution, as they were merely responding to contract solicitations from Briggs-Cockerham, a Texas corporation. The mere act of contracting with a Texas entity does not, on its own, create sufficient minimum contacts for jurisdiction. Briggs-Cockerham's claim that returning signature pages conferred jurisdiction was rejected, with the court noting that contractual formalities are secondary to the actual business intent and the broader context of the relationship. Mailing a $100 payment also failed to establish jurisdiction, as Texas law specifies that such action alone is insufficient. The court highlighted the necessity of foreseeability in the minimum contacts analysis, concluding that appellees, having not initiated contact and with the joint venture aimed at providing services in Ecuador, could not have foreseen being subject to Texas jurisdiction. Ultimately, the court ruled that none of the actions taken by appellees constituted sufficient grounds for jurisdiction in Texas.

Briggs-Cockerham contends that the sale of Seacoast Power's assets to Marathon Oil, a Texas corporation, establishes minimum contacts necessary for jurisdiction. The court rejects this argument, emphasizing that contractual arrangements alone do not suffice for jurisdiction. Briggs-Cockerham also claims that a letter sent to him in Texas regarding an alleged breach of the joint venture agreement warrants jurisdiction; however, the court finds such correspondence inadequate for establishing minimum contacts, as mere communication during contract performance cannot constitute purposeful availment of Texas law benefits. 

Briggs-Cockerham further argues that the cumulative actions of the appellees—including purchasing a Texas corporation, executing an agreement, mailing payments, and sending breach notifications—collectively create sufficient contact for jurisdiction. The court disagrees, asserting that these acts do not demonstrate the required purposeful availment.

Additionally, Briggs-Cockerham asserts that the appellees are alter egos of one another, which should establish jurisdiction. However, the court clarifies that to prove alter ego, evidence of fraud or misuse of the corporate form must be shown, which Briggs-Cockerham failed to plead. The court finds no jurisdiction based on the alter ego theory since the claims pertain only to the relationships among out-of-state corporations.

Briggs-Cockerham's claim that the appellees' agreement to share losses supports jurisdiction is also dismissed, as no evidence is presented to show that such an agreement has jurisdictional implications in Texas. Lastly, the assertion that appellees submitted to jurisdiction by filing a bill of review is deemed meritless since the filing was done solely by Seacoast without involvement from the appellees. The court concludes that personal jurisdiction must be analyzed based solely on the actions of the appellees, not on Briggs-Cockerham's unilateral actions.

Appellees engaged in a contractual relationship with Briggs-Cockerham for electrical power provision in Ecuador, a connection initiated by Briggs-Cockerham. This unilateral action does not establish sufficient contacts to justify jurisdiction in Texas courts, as it lacks the required purposeful conduct from the appellees. Consequently, the court affirms the district court's decision to sustain appellees' special appearance, indicating that jurisdiction over them in Texas is constitutionally impermissible. The ruling was finalized on October 25, 2001, with Justices Kidd, Yeakel, and Patterson concurring. The document also clarifies the collective references to parties involved, with appellees being Seacoast Power, L.L.C. and others, and Briggs-Cockerham referring to the appellants collectively.