The Court of Appeals for the Eighth District of Texas is reviewing an interlocutory appeal regarding the denial of special appearances by non-resident defendants Keith Copeland and Eugene Saunders in a case brought by Justin Mayers. Mayers alleges that the defendants owe him money from sports bets, specifically claiming a wager from February 23, 2020, that should have yielded $75,000. He asserts that despite multiple payment demands, the defendants refused to pay or provide restitution.
Mayers contends that his relationship with the defendants began in Spring 2018 when Copeland contacted him through a mutual acquaintance, Mike Muniz. He claims to have regularly placed bets through the defendants' website, www.sunwager.com, and exchanged significant sums of money with them, backed by text message evidence.
Conversely, Copeland denies any business partnership with Ames and Saunders, asserting that he first spoke to Mayers while in Colorado and was unaware of Mayers’ location during their communications. He refutes claims of ever receiving funds from Mayers or having any contractual agreements with him. The court ultimately finds that the appellants meet the statutory and due-process requirements for specific jurisdiction, affirming the trial court's decision to deny their special appearance.
Saunders denies any ownership, employment, contracts, wagers, or financial connections to www.sunwager.com, asserting he is a nonresident of Texas with no purposeful contacts in the state. He claims no partnership or personal relationship with Defendants Ames and Copeland, although he acknowledges a long-time friendship with Ames, who occasionally visits him in Miami, Florida. Saunders explains that Ames uses his FedEx business account for shipping during these visits, characterizing this as a typical arrangement among friends and business contacts. He contends that his involvement in the lawsuit stems solely from his FedEx account, not from ties to Texas or the website.
In the procedural context, after Mayers filed a lawsuit in Travis County for damages related to these transactions, Saunders and Copeland filed special appearances contesting personal jurisdiction. Mayers amended his petition and provided an affidavit detailing his allegations, along with text messages exchanged with the Defendants. Saunders and Copeland subsequently filed amended special appearances, contesting Mayers’ affidavit on grounds of lack of personal knowledge and hearsay. The trial court reviewed their special appearances and denied them, issuing findings of fact that established a series of transactions between the Defendants and Mayers, originating or completing in Austin, Texas. It noted that Copeland initiated contact with Mayers, who had extensive communications with all Defendants, which financially benefited them. The court confirmed its jurisdiction, highlighting that all Defendants were aware of Mayers’ residency in Austin, including a personal meeting between Ames and Mayers in December 2019.
The trial court concluded that it has jurisdiction over non-residents Eugene Saunders and Keith Copeland under the Texas long-arm statute, Tex. Civ. Prac. Rem. Code. 17.042, affirming that such jurisdiction aligns with federal and state due process standards. The plaintiff successfully established specific jurisdiction by detailing interactions and agreements that created a continuous relationship with the defendants in Texas, indicating that the defendants purposefully engaged in business activities within the state. The agreement between the plaintiff and the defendants involved transactions to be performed in Texas and was sufficient to support claims of torts occurring partly in the state.
The court noted that the defendants had established 'minimum contacts' with Texas, fulfilling the requirements of fair play and substantial justice. The defendants did not negate any potential bases for jurisdiction that the plaintiff had presented. Both Saunders and Copeland appealed the trial court's decision.
The standard of review for such appeals is de novo, focusing on whether personal jurisdiction exists, which is a legal question, though factual determinations may be necessary. Appellants can challenge findings of fact for legal or factual sufficiency, with specific criteria for each type of challenge outlined. Jurisdiction requires both subject matter jurisdiction and personal jurisdiction, with the Texas long-arm statute and due process considerations being essential for personal jurisdiction over non-residents.
The plaintiff must initially plead sufficient allegations to establish jurisdiction over a nonresident defendant under the long-arm statute, which can be met by claiming the defendant is conducting business or committing tortious acts in Texas. Upon meeting this burden, the responsibility shifts to the defendant to disprove the jurisdictional claims either factually, by demonstrating a lack of contacts with Texas, or legally, by arguing that even if the allegations are true, they do not legally suffice to establish jurisdiction. The Texas long-arm statute allows jurisdiction over nonresidents conducting business in Texas or committing torts within the state, aligning with federal due-process standards that require minimum contacts with the forum state to avoid offending traditional notions of fair play and substantial justice.
Jurisdiction is analyzed through general and specific jurisdiction. General jurisdiction applies when the defendant's affiliations with the state are continuous and systematic, rendering them essentially at home in the forum state. Specific jurisdiction, applicable in less intimate connections, requires that the claims arise from the defendant’s contacts with the state. For specific jurisdiction, a minimum-contacts showing entails that the defendant purposely availed themselves of conducting activities in Texas and that the suit relates to those contacts. Purposeful availment is assessed using the defendant’s contacts with the forum, ensuring that jurisdiction is not based solely on the unilateral actions of another party.
Contacts must be purposeful, not random or fortuitous, for a court to assert jurisdiction over nonresident defendants. Such defendants are subject to jurisdiction if they engage in ongoing relationships and obligations with residents of another state and seek benefits from that jurisdiction. Jurisdiction is based on implied consent, as defendants benefit from the forum's laws. A nonresident can avoid jurisdiction by structuring transactions to not profit from the forum. The quality and nature of contacts are assessed, not merely the quantity.
Specific jurisdiction requires that the cause of action arises from or relates to the defendant's purposeful activities in the state, analyzed on a claim-by-claim basis. The relatedness requirement establishes the necessary connection between the nonresident defendant, the litigation, and the forum.
In this case, Copeland and Saunders contest the trial court's denial of their special appearances, arguing insufficient contacts with Texas for specific jurisdiction. Copeland claims Mayers' allegations do not support jurisdiction, asserting that the communications do not demonstrate purposeful availment and that he did not perform activities in Texas. He also argues that Mayers improperly relies on third-party actions and that the relatedness prong is unmet. Saunders raises similar issues, questioning the adequacy of Mayers' claims and evidence for establishing personal jurisdiction and asserting a lack of sufficient contacts with Texas.
Ultimately, the court concludes that sufficient evidence shows that the Appellants purposefully availed themselves of Texas's privileges, that Mayers' claims relate to those contacts, and that exercising jurisdiction aligns with due-process standards. Therefore, the court affirms the trial court's conclusions regarding specific jurisdiction and does not consider the applicability of general jurisdiction.
Mayers adequately established jurisdiction over Appellants under Texas's long-arm statute by alleging that they conducted business in Texas, entered into agreements related to sporting events, and engaged in transactions with him while he resided in Austin. Specifically, he claimed that Copeland instructed him to send funds to a third party in Houston. Following Texas's liberal notice-pleading standards, the allegations were deemed sufficient to assert specific jurisdiction. The trial court confirmed this in its conclusion of law #6.
In evaluating the trial court's findings of fact regarding the nature of the transactions between Mayers and the Appellants, a no-evidence challenge can only succeed under specific circumstances, such as a lack of evidence supporting a vital fact or evidence conclusively contradicting a vital fact. Saunders contested the trial court's findings, which indicated that the defendants engaged in numerous transactions with Mayers, communicated regularly with him, and were aware of his residency in Austin. He argued that these findings were based solely on Mayers' affidavit and claimed that the trial court improperly overruled his objections to this affidavit. Saunders further contended that Mayers failed to demonstrate any specific transactions involving him and that he did not benefit from these alleged dealings, nor did he provide evidence that he was aware of Mayers' residence. Despite Saunders’ objections, it was the trial court's role to assess and determine the weight of the evidence presented.
The record supports all four findings of fact regarding Mayers’ interactions with Defendants Keith Copeland, Mr. Ames, and Mr. Saunders. Mayers states that he began betting on sunwager.com in Summer 2018 and that financial transactions occurred between him and the defendants, including cash sent via FedEx for owed amounts. He indicates that Copeland directed payments to Ames or Saunders and communicated regularly with Mayers until March 2020, earning approximately $9,000 in commissions from these transactions. Text messages between Mayers and the defendants further corroborate their ongoing communications and the logistics of sending or receiving money related to betting activities.
The trial court's findings are upheld as consistent with the evidence, detailing that Copeland initiated contact with Mayers, they engaged in transactions for nearly two years, and the defendants were aware of Mayers' residence in Austin, Texas. Saunders’ objection to the competence of Mayers' affidavit, claiming it lacked personal knowledge and factual basis, is deemed unpersuasive. Under Texas Rule of Evidence 602, the threshold for personal knowledge is low, and Mayers established his involvement in the betting and payment discussions with the defendants. Although Copeland and Saunders dispute the characterization of their relationship as business partners, the trial court did not rely on this assertion in its findings. Any potential error related to this aspect is considered harmless, as it did not influence the trial court's judgment. No judgment can be reversed on appeal unless the error likely caused an improper outcome.
The trial court's decision to overrule Saunders' objections regarding the special appearances was upheld. The court found that Mayers had adequately pleaded allegations to bring the Appellants under the long-arm statute. The focus then shifted to whether Copeland and Saunders could provide evidence to counter specific jurisdiction based on minimum contacts or demonstrate that exercising jurisdiction would violate due-process standards.
Copeland argued against the existence of minimum contacts with Texas, asserting he lives and works in Colorado and has no substantial connection to Texas, aside from having family in the state. He claimed that his interactions with Mayers were limited to phone calls and texts initiated by Mayers after they met in 2018. He denied being involved in any transactions related to Mayers' claims, not being a business partner with Ames or Saunders, and having no ownership interest in the website www.sunwager.com. Additionally, he stated he never met Mayers in person, never asked for or received funds from him, and all communications occurred from Colorado. Copeland emphasized that the mere fact that Mayers received his communications in Texas was coincidental, as it depended on Mayers' location, not any purposeful action by him.
To support his argument, Copeland referenced the cases of Michiana and Old Republic, where courts ruled that isolated or fortuitous contacts, such as a single phone call initiated by a Texas resident, did not establish purposeful availment necessary for jurisdiction. The courts concluded that numerous phone communications alone do not suffice; instead, the quality and nature of those communications must be assessed to determine purposeful availment.
In the Old Republic case, the court found that while a nonresident had a close friendship with a Texas resident and frequently communicated via phone, there was no evidence that the nonresident initiated those calls or engaged in planning fraudulent transfers. As a result, the court ruled that these communications did not establish sufficient contacts with Texas to confer jurisdiction. Copeland's situation, however, differs significantly. Evidence indicates that he engaged in multiple transactions with Mayers, who resides in Texas, including directing Mayers to send money to others in Texas and arranging for funds to be sent to Mayers. Specific interactions between Copeland and Mayers are detailed, showcasing Copeland's active participation in financial exchanges, including requests for money transfers, sending addresses for shipments, and queries about tracking packages. These communications, along with the initiation and direction of transactions involving Texas, suggest a level of purposeful availment that contrasts with the lack of jurisdictional contacts seen in Old Republic.
Mayers' affidavit indicates he was introduced to Copeland through a mutual friend and began placing bets with Copeland and his partners, Saunders and Ames. When debt was owed, Copeland would direct him on where to send money, typically to Saunders or Ames, while debts owed to Mayers were often sent to him via FedEx. He engaged in discussions with Copeland and the other defendants regarding the debts owed.
Copeland's affidavit asserts that he met Mayers through a mutual friend and communicated with him via phone or text while in Colorado, unaware of Mayers' location during these exchanges. He denies being business partners with Ames or Saunders, having any ownership of www.sunwager.com, personally meeting Mayers, entering into a contract with him, or sending/receiving money from him, and claims he never traveled to Texas related to any transactions involving Mayers.
The court concluded that Copeland purposefully initiated contact with Mayers, knowing he resided in Texas, and engaged in transactions that involved performance in Texas, establishing jurisdiction in Texas for suits based on these activities. Copeland contended that electronic communication with a Texas resident does not prove purposeful availment, but the court disagreed, noting that while technology has changed the landscape of jurisdiction, telephone calls can still demonstrate minimum contacts. The court distinguished Copeland's case from cited precedents, which lacked evidence of purposeful business relationships with Texas residents, confirming that Copeland's actions warranted jurisdiction in Texas.
The Third Court of Appeals upheld the trial court's decision to deny an out-of-state defendant's special appearance, affirming that the defendant had sufficient contacts with Texas. Despite the defendant's claim that his interactions with the Texas plaintiffs were too minimal to support a finding of purposeful availment—arguing he never signed a formal agreement and only communicated via phone, email, mail, and fax—the court found that he actively sought out the Texas plaintiffs, maintained ongoing communication regarding fees and services rendered in Texas, and made payments to them. The court ruled that the defendant had purposefully availed himself of the privilege of conducting activities in Texas through these interactions.
Similarly, Copeland's case was analyzed, revealing his extensive communication with a Texas resident, Mayers, through phone calls, text messages, and financial transactions. Despite Copeland's assertions of lacking minimum contacts—citing no in-person meetings or direct transactions—evidence indicated he received commissions from Mayers' activities. The court noted that Copeland's engagement involved multiple transactions over time, contradicting his claims of minimal involvement. His acknowledgment of receiving commissions from Mayers was sufficient to establish that he benefited from his interactions, thereby satisfying the requirements for jurisdiction.
The trial court also determined that Saunders had established minimum contacts with Texas. Saunders contested his jurisdictional ties, claiming limited interaction with Mayers through the use of a FedEx account by another individual, Ames, on four occasions.
Saunders denies any involvement with Mayers’ finances, any promises made to him, and any business or personal relationships with the gambling site or with Copeland and Ames. He contends that the trial court should have disregarded Mayers’ affidavit, which includes claims of business transactions, debts owed, and expected lawsuits in Texas. Even if Mayers’ allegations were accepted as true, Saunders argues they lack sufficient minimum contacts with Texas, describing his interactions as random and not purposeful. He references the Old Republic case to support his argument that mere money transfers do not establish jurisdiction.
Evidence presented includes communications and transactions where Copeland sent packing slips from Saunders in Florida to Mayers in Austin, and a text from Mayers indicating previous financial interactions with Saunders. Mayers claims to have been introduced to Copeland, who facilitated betting arrangements involving Saunders and Ames, detailing instances where he was directed to send payments to them and received cash from them.
The trial court found that the evidence supported the conclusion that the defendants, including Saunders, purposefully engaged in activities within Texas, leading to the denial of their special appearances to contest jurisdiction. Specific findings include that Saunders had approximately one year and nine months of transaction history with Mayers and that he and the other defendants owe Mayers $75,000. Despite Saunders’ claims of no agreements or financial connections to Mayers or the gambling site, the interactions and transactions evidenced a substantial connection to Texas, affirming the trial court’s decision.
The Supreme Court of Texas has established that a single contract can satisfy the purposeful-availment standard if it involves ongoing relationships beyond mere contact outside the forum state. In this case, Saunders engaged in substantial interactions with Texas resident Justin Mayers, which included extensive communication regarding proof of deliveries and financial transactions that benefited the defendants. Despite Saunders claiming he did not profit from these interactions, the trial court found that he was a party to a series of transactions with Mayers, who was located in Texas. The court's factual findings supported the jurisdictional analysis, concluding that Saunders purposefully availed himself of conducting business in Texas.
Additionally, both Copeland and Saunders argued that the relatedness prong for jurisdiction was not satisfied. Copeland asserted that his communications with Mayers were too tangential to establish a legal connection to the claims. However, the court clarified that while a but-for analysis is insufficient for jurisdiction, Copeland’s communications were directly connected to Mayers’ claims related to the transactions in question. The court distinguished this case from prior rulings, emphasizing that the interactions were substantially linked to the claims made by Mayers, thereby establishing the necessary jurisdictional grounds.
Copeland's communications with Mayers related to the transactions in question satisfy the relatedness inquiry for jurisdiction. He argues that such communications cannot establish jurisdiction, but the standard requires that the lawsuit arise from the defendant's contacts with the forum state, rather than solely a causation-based approach. Copeland's assertion that his communications do not indicate liability for the alleged claims is viewed as a merits issue, which is not addressed in a special appearance context.
Saunders also claims the relatedness prong is unmet, asserting that Mayers' claims do not stem from his contacts with Texas. However, as reflected in Mayers' petition, Saunders' ongoing financial transactions with Mayers in Texas are sufficiently connected to the claims to satisfy this prong.
Regarding traditional notions of fair play and substantial justice, a defendant must demonstrate that exercising jurisdiction would be unreasonable. Copeland contends that Mayers' jurisdictional claims fail to meet the necessary threshold and that asserting jurisdiction would offend fair play principles. However, he does not provide legal citations or evidence supporting his claims about the burdensomeness of jurisdiction. The minimum contacts analysis considers fairness, and it is rare for jurisdiction not to align with fair play when a defendant has established such contacts. Saunders argues that exercising jurisdiction over him would be burdensome as a Florida resident. Overall, neither defendant has successfully demonstrated that jurisdiction should not be exercised.
Saunders argues that traveling to Texas for his defense poses a significant burden, particularly since his co-defendant and witness, Ames, resides in Florida. He claims that if Ames does not appear in Texas, he will miss out on crucial testimony and document production. Moreover, Saunders asserts that there is no clear evidence supporting the convenience of Texas as the proper forum for resolving the dispute. However, once Mayers established sufficient facts for personal jurisdiction under the long-arm statute, the onus shifted to the Appellants (including Saunders) to demonstrate that no grounds for jurisdiction existed. The court finds that, similar to Copeland's situation, Saunders' case does not fall into the rare category where exercising jurisdiction would violate fair play and substantial justice, as he has purposefully established minimum contacts with Texas. The court concludes that the claims relate to these contacts, affirming that specific jurisdiction over the Appellants is appropriate. Consequently, the trial court's judgment is upheld, and general jurisdiction is not considered necessary since it was not alleged by Mayers.
