Hinduja Global Solution, Inc. and HGS Healthcare, LLC v. Ali Ganjaei

Citation: Not availableDocket: 05-22-00052-CV

Court: Court of Appeals of Texas; January 12, 2023; Texas; State Appellate Court

Original Court Document: View Document

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Hinduja Global Solution, Inc. (HGSI) appeals the trial court's decision granting Ali Ganjaei's special appearance, arguing that it met the burden of establishing jurisdiction under the Texas long-arm statute and that Ganjaei failed to negate all jurisdictional bases. HGSI, along with HGS Healthcare, LLC, seeks to vacate the special appearance order and remand for further proceedings based on new evidence obtained post-hearing. HGS Healthcare also requests clarification that the order only pertains to HGSI’s claims against Ganjaei, as it was not a party during the jurisdiction challenge.

The case arose from a dispute with Synergy Global Outsourcing, LLC, which accused HGSI of breaching a broker agreement established in 2011. HGSI counterclaimed against Synergy and joined Ganjaei, alleging breach of fiduciary duty and conspiracy. These claims are linked to Ganjaei’s prior role as a legal advisor and board member of HGSI, and his connection to HBI, which acquired a controlling interest in Synergy. HGSI contends that Ganjaei breached his fiduciary duties by advising them to enter the broker agreement without disclosing HBI's majority ownership in Synergy, thereby benefiting personally from HGSI's payments. Additionally, HGSI claims Ganjaei manipulated Synergy’s business dealings and shared confidential information to undermine HGSI, collaborating with Synergy and other former board members in these breaches. The appellate court affirmed the trial court's ruling, dismissing HGSI's claims against Ganjaei.

Ganjaei, a New Jersey resident, contested the trial court's personal jurisdiction over him by submitting a declaration outlining his lack of ties to Texas. He has never lived, worked, or owned property in Texas, nor does he maintain a bank account there. Ganjaei is a New York-licensed attorney whose legal work has exclusively occurred in New York. His only involvement with HGSI was as a board member providing business advice related to mergers, with no legal services rendered in Texas. He did not participate in negotiating or drafting the Broker Agreement; his involvement was limited to a brief review of the document for consistency after its finalization. Ganjaei also did not participate in HBI's acquisition of Synergy, which took place outside Texas, nor did he attend any board meetings there or receive compensation tied to Synergy's performance. HGSI presented 17 exhibits at the hearing, many irrelevant to the jurisdiction issue, and although HGSI's president claimed reliance on Ganjaei's assurances regarding the Broker Agreement, he did not counter Ganjaei's assertion that all legal services were performed outside Texas. The trial court considered the special appearance and later granted it, leading to an interlocutory appeal.

Jurisdiction over a nonresident defendant is a legal question reviewed de novo by the courts. The trial court must resolve factual disputes before determining jurisdiction. In the absence of specific findings from the trial court, it is presumed that any factual disputes were resolved in favor of the court's ruling unless legally challenged. Texas courts can exercise personal jurisdiction if the Texas long-arm statute is applicable and constitutional due process is satisfied. The long-arm statute allows for jurisdiction over nonresidents conducting business in Texas, aligning with federal due process standards.

For specific jurisdiction, two criteria must be met: (1) purposeful availment and (2) relatedness. Purposeful availment examines the defendant's actions, ensuring they are not random or fortuitous, and evaluates whether the defendant sought benefits from conducting business in Texas. The nature and quality of contacts, rather than their quantity, are critical in this analysis. Relatedness assesses the connection between the defendant's forum contacts and the litigation, requiring that the plaintiff's cause of action arises from or relates to those contacts. The plaintiff and defendant share the burden of proof in challenges to personal jurisdiction, with their responsibilities shifting as the case progresses.

The plaintiff must initially plead sufficient allegations to establish jurisdiction over a non-resident defendant under Texas's long-arm statute. Once this burden is met, it shifts to the defendant to negate jurisdiction claims on factual or legal grounds. Factual negation can involve evidence showing a lack of contacts with Texas, while legal negation can demonstrate that the plaintiff's allegations do not legally establish jurisdiction or that specific jurisdiction is not satisfied based on the defendant's activities in Texas. In the case concerning Ganjaei, the plaintiff, HGSI, claimed personal jurisdiction based on Ganjaei's minimum contacts with Texas through activities conducted for his benefit. The court determined that HGSI met the pleading requirement, shifting the burden to Ganjaei to refute jurisdiction. The court noted that HGSI is not a Texas corporation and highlighted that jurisdiction cannot be established simply through Ganjaei's alleged conspiracy with a Texas resident or by referencing other parties’ actions. Only Ganjaei's individual contacts with Texas are relevant for jurisdiction, rendering his connections as a representative of HBI irrelevant. HGSI's argument for jurisdiction relies on theories of directing a tort and targeting assets, given Ganjaei's limited physical presence in Texas.

The Texas Supreme Court has established that a nonresident's remote tortious conduct directed at Texas is insufficient for specific jurisdiction. In this case, HBI's actions cannot be attributed to Ganjaei for jurisdictional purposes, and HBI did not target Texas assets but merely acquired an interest in a Nevada LLC providing non-asset-based services. Ganjaei's alleged contacts with Texas are analyzed within five categories concerning HGSI's breach of fiduciary duty claims: (1) legal services related to the Broker Agreement; (2) Ganjaei's role as a board member and involvement in the Broker Agreement; (3) involvement in contracts and business relationships with HGSI affiliates; (4) participation in legal actions involving Texas; and (5) failure to disclose conflicts of interest. The analysis focuses on two prongs: purposeful availment and relatedness, which necessitate a substantial connection between a nonresident's forum contacts and the litigation's facts.

For legal services, Texas law generally does not establish personal jurisdiction based solely on an attorney-client relationship without sufficient forum contacts. Legal work performed outside Texas does not confer jurisdiction, as affirmed in Ahrens. Isolated communications and trips to Texas do not constitute purposeful availment. In this case, Ganjaei's relationship with HGSI did not involve Texas residents, nor did he promote business in Texas. Ganjaei denied acting as HGSI’s general counsel, and any legal services would have occurred outside Texas, negating jurisdiction over claims against him as a lawyer. Regarding his role on HGSI's board, any involvement in the Broker Agreement was minimal and took place in New York or New Jersey, further negating jurisdiction over claims against him in this capacity.

HGSI alleges that Ali Ganjaei and other fiduciaries targeted Texas assets, specifically a controlling interest in Synergy and a Colombian call center, intending to profit from these investments. However, evidence shows that Ganjaei did not personally target Texas or seek Texas assets or customers; instead, HBI, not Ganjaei, acquired an interest in Synergy, a Nevada LLC, without establishing that HBI is Ganjaei’s alter ego. Ganjaei’s involvement in HBI’s acquisition occurred in New York or New Jersey, not Texas. Furthermore, Ganjaei was not involved in the daily operations of Synergy and did not draft or negotiate any agreements with HGSI or its affiliates, indicating he did not purposefully avail himself of Texas law benefits regarding these claims.

Regarding HGSI's claims about Ganjaei's involvement in Texas litigation related to HGS Healthcare, those contacts lack substantial relevance to the claims against him. Allegations of Ganjaei's involvement in employment issues in El Paso, Texas, are similarly disconnected from HGSI's claims. HGSI's assertion that Ganjaei failed to disclose conflicts of interest does not demonstrate purposeful availment of Texas jurisdiction, as failure to disclose implies a lack of contact with the forum. Ganjaei established he did not profit from any connection to Synergy, as his compensation from HBI was not linked to Synergy's performance.

Consequently, Ganjaei negated any purposeful availment of Texas jurisdiction, and the long-arm statute does not authorize jurisdiction over him for HGSI's claims. Therefore, the court concluded that there is no need to assess whether exercising jurisdiction would violate traditional notions of fair play and substantial justice. The trial court's order granting Ganjaei's special appearance is affirmed, and since HGS Healthcare was not a party to the jurisdictional challenge, its claims against Ganjaei remain unresolved. The judgment was entered on January 13, 2023.