Peredo v. Grupo Cuadro, S.A. De C.V. (pdf) (Tex.App.- Houston [14th Dist.] Mar 2. 2010)
(Anderson)
(
denial of special appearance was error, cause against defendant severed and dismissed for lack of
personal jurisdiction)
A Mexican corporation brought suit in Harris County against a vendor and two of the
vendors’ Texas employees.  The vendor counterclaimed against the Mexican
corporation’s president, who resides in California, and the trial court denied the
nonresident counterdefendant’s special appearance.  Because the evidence does not
support the trial court’s exercise of personal jurisdiction over the nonresident, we
reverse and remand.
Because the contacts at issue in this case do not constitute ―purposeful availment,‖
we sustain Peredo‘s sole issue on appeal, reverse the trial court‘s order denying
Peredo‘s special appearance, and remand for severance and dismissal of the claims
against him.
REVERSED AND REMANDED: Opinion by Justice Anderson     
Before Justices Anderson and Brown   
14-08-01032-CV  Miguel Peredo v. Grupo Cuadro, S.A. de C.V.    
Appeal from 234th District Court of Harris County
Trial Court Judge:
Reese Rondon

OPINION

A Mexican corporation brought suit in Harris County against a vendor and two of the vendors‘ Texas
employees. The vendor counterclaimed against the Mexican corporation‘s president, who resides in
California, and the trial court denied the nonresident counterdefendant‘s special appearance. Because the
evidence does not support the trial court‘s exercise of personal jurisdiction over the nonresident, we reverse
and remand.\

I. FACTUAL AND PROCEDURAL BACKGROUND

Since approximately 2005, Grupo Cuadro, S.A. de C.V. (―Cuadro‖), a Mexican corporation that
manufactures plastic ―shrink wrap‖ and other plastic wrapping and storage products, has purchased resin
from M. Holland Company ("Holland"). As Cuadro
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asserted in its pleadings, Holland‘s corporate offices are in Illinois, but its international sales are handled
through its Houston office, and the sales to Cuadro were initiated in Texas. Cuadro also sent its purchase
orders to the Houston office, and Holland‘s invoices to Cuadro were sent from the Houston office. Holland‘s
products were delivered and transferred to Cuadro in Laredo, Texas. According to Cuadro, Holland
eventually began selling Cuadro a more expensive resin that did not perform as well, and Cuadro‘s
customers returned the products made from that resin. On March 9, 2007, Cuadro filed suit in Harris County
against Holland and two of Holland‘s international sales representatives, Antonio Palazuelos and John
Crowley, each of whom resides in Texas. According to Cuadro, the defendants violated the Texas Deceptive
Trade Practices – Consumer Protection Act, tortiously interfered with actual and prospective contracts and
business relations, and committed breach of contract, common-law fraud, commercial disparagement and
defamation, breach of the duty of good faith and fair dealing, and breaches of the implied warranties of
merchantability and fitness for a particular purpose. Cuadro additionally asserted several causes of action
under Mexican law. After the case had been pending for more than sixteen months, Holland filed a third-party
petition on July 16, 2008 in which it asserted claims of fraud and fraudulent inducement against Cuadro‘s
president, California resident Miguel Angel Peredo Luna (―Peredo‖). Peredo and his siblings formerly
owned Cuadro, but by the time of Peredo‘s deposition, ownership had been transferred to Peredo‘s wife and
mother. According to Holland, Peredo repeatedly made material, false representations to Holland in 2006
and 2007 about past payments and false promises of future payments. These representations were made by
Peredo to secure the continuation of sales and shipping of resin to Quadro in reliance on such statements,
to continue to sell and ship resins to Cuadro. Holland further alleged that despite these representations,
Cuadro had failed to pay for some of the resin shipped by Holland in 2006.
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Peredo filed a special appearance which the trial court denied, and the court stayed further proceedings
against Peredo during the pendency of this interlocutory appeal.

II. ISSUE PRESENTED

In the sole issue presented, Peredo challenges the trial court‘s denial of his special appearance. III.
STANDARD OF REVIEW The existence of personal jurisdiction is a question of law. BMC Software Belg., N.V.
v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). The plaintiff bears the initial burden of pleading sufficient
allegations to bring a nonresident within the provisions of the long-arm statute. Id. at 793. The nonresident
defendant then bears the burden of proof to negate all bases of personal jurisdiction asserted by the
plaintiff. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007). On appeal, we consider all
of the evidence before the trial court on the question of jurisdiction. Fish v. Tandy Corp., 948 S.W.2d 886,
891 (Tex. App.-Fort Worth 1997, writ denied). When a trial court does not issue findings of fact and
conclusions of law with its special appearance ruling, all facts necessary to support the judgment and
supported by the evidence are implied. BMC Software, 83 S.W.3d at 795. IV. GOVERNING LAW

Because the personal jurisdiction of Texas courts extends as far as the federal constitutional requirements of
due process will permit, we rely on both state and federal precedent in determining whether a nonresident
defendant has met its burden to negate all bases of jurisdiction. Id. (quoting U-Anchor Adver., Inc. v. Burt,
553 S.W.2d 760, 762 (Tex. 1977)). State statutory and federal due-process requirements are satisfied if (a)
the nonresident has minimum contacts with Texas, and (b) our exercise of personal jurisdiction over the
nonresident does not offend ―traditional notions of fair play and substantial justice.‖ See Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S. Ct. 1868, 1872, 80 L. Ed. 2d 404 (citing Int’l
Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945)).
4

C. Specific Jurisdiction

There are two types of personal jurisdiction: specific and general. On appeal, Peredo challenges only the
existence of specific jurisdiction and represents that Holland at some point conceded that general jurisdiction
does not exist. At oral argument, Holland agreed that only the existence of specific jurisdiction ultimately was
argued to and ruled upon by the trial court. We therefore address only the question of whether the record
supports the trial court‘s exercise of specific jurisdiction.

Specific jurisdiction is dispute-specific, and it attaches when the plaintiff‘s cause of action arises out of or
relates to the nonresident defendant‘s contacts with the forum state. Conner, 944 S.W.2d at 410. To invoke
a state‘s specific jurisdiction, the defendant‘s activities must have been ―purposefully directed‖ to the forum,
id., and there must be a substantial connection between the defendant‘s forum contacts and the operative
facts of the litigation. Moki Mac River Expeditions, 221 S.W.3d at 585.1

V. ANALYSIS

A. Minimum Contacts

The first due process requirement, that of sufficient minimum contacts, is satisfied if the nonresident
defendant has ―‗purposefully avail[ed] itself of the privilege of conducting activities within the forum State,
thus invoking the benefits and protections of its laws.‘‖ Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475,
105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct.
1228, 1239–40, 2 L. Ed. 2d 1283 (1958)). The ―purposeful availment‖ requirement ensures that a
nonresident will not be haled into a foreign jurisdiction based on ―‗[t]he unilateral activity of those who claim
some relationship‖ with the defendant or as the result of ―‗random,‘ ‗fortuitous,‘ or ‗attenuated‘ contacts.‖
Id., 471 U.S. at 474–75, 105 S. Ct. at 2183 (quoting Hanson, 357
1 Operative facts are those having principal relevance. See A DICTIONARY OF MODERN LEGAL USAGE,
620 (Bryan A. Garner, 2d ed., 1995).
5

U.S. at 253, 78 S. Ct. at 1239–40); Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S. Ct. 1473,
1478, 79 L. Ed. 2d 790 (1984). To determine whether the nonresident defendant has purposefully availed
itself of the privileges of conducting business within the State of Texas, we focus on three factors. See
Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex. 2005). First, we consider only each
defendant‘s own actions. Id. Second, the acts of the defendant must be purposeful, rather than random,
isolated, or fortuitous. Id. Third, the ―defendant must seek some benefit, advantage, or profit by ‗availing‘
itself of the jurisdiction.‖ Id. We do not consider any of a defendant‘s contacts in isolation, but instead apply
these factors to all of the nonresident defendant‘s contacts with Texas. Schlobohm v. Schapiro, 784 S.W.2d
355, 359 (Tex. 1990). ―[I]t is not the number, but rather the quality and nature of the nonresident defendant
‘s contacts with the forum state that [are] important.‖ Guardian Royal Exch. Assurance, Ltd. v. English China
Clays, P.L.C., 815 S.W.2d 223, 230 n.11 (Tex. 1991). 1. Peredo’s Affidavit In support of his special
appearance, Peredo presented uncontroverted evidence of the following facts: Peredo resides in California.
He has never resided in Texas or maintained an office, place of business, agent, telephone listing, or bank
account here. Peredo does not own, lease, or control any real or personal property in Texas. He has no
Texas employees. He has never paid taxes in Texas. He does not advertise any business in Texas or provide
any service here. He does not solicit business in Texas. Although he has met with Holland representatives in
Illinois, California, and Mexico, he has never met with Holland representatives in Texas.
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He is not certain if any Holland representative was in Texas when the representative telephoned Peredo or
received an email from him. He is the president of a California company and is needed in California on a daily
basis to run that business.

Both in the trial court and on appeal, Holland responded to this evidence as follows: In late 2006 and early
2007, because Cuadro fell grossly behind in its payment, M. Holland, through Antonio Palazuelos and later,
other M. Holland employees, began contacting Miguel Peredo, on almost a daily basis, to inquire about the
status of payments for resins allegedly forthcoming. . . . . In response to these inquiries, Peredo promised . . .
partial payment had been made and further payment would be forthcoming. Many of these communications,
including Peredo‘s false promises, were directed to Texas and Antonio Palazuelos. . . . . As a result of Peredo
‘s communications with Antonio Palazuelos and others, M. Holland continued to conduct business with M.
Holland [sic]. Antonio Palazuelos was primarily responsible for maintaining the business relationship. . . .
Notwithstanding Peredo‘s promises of partial payment and future payment, payment was not forthcoming
when promised, if ever. . . .
These communications alone – namely, those communications directed to Texas and which gave rise to the
claims of fraud – are sufficient to create specific jurisdiction under the purposeful availment test.2 Thus, in
response to Peredo‘s evidence demonstrating that he did not establish minimum contacts with Texas, Holland
appears to argue that a Texas resident established minimum contacts with him. This construction of Holland‘s
jurisdictional theory is borne out by the evidence on which Holland relies. 2. Reply Emails
In support of its argument, Holland produced copies of several email exchanges, including ten emails from
Peredo to Palazuelos over an eighteen month period.3
2 This language, taken from Holland‘s response in the trial court, is repeated almost verbatim in Holland‘s
appellate brief.
7

Significantly, none of Peredo‘s email exchanges with Palazuelos were initiated by Peredo. To the contrary,
each of Peredo‘s emails to Palazuelos is a reply to an email he received from Palazuelos.4 Such evidence is
analogous to that presented in Weldon-Francke v. Fisher, 237 S.W.3d 789 (Tex. App.—Houston [14th Dist.]
2007, no pet.). In that case, a New Hampshire attorney gave legal advice to Texas residents in New
Hampshire and drafted documents concerning the transfer of their New Hampshire summer home to a trust.
Id. at 794–95. The Texas residents and their Texas counsel later contacted the New Hampshire attorney
through correspondence, facsimile, and telephone with inquiries about the trust, and the attorney responded
in telephone calls and correspondence to the clients and their counsel in Texas. Id. at 795. The clients
subsequently sued the New Hampshire attorney in Texas, and argued that specific jurisdiction was proper
because the attorney performed tortious acts in her calls and letters to Texas. Id. at 797. We rejected that
argument, and explained that because the attorney did not engage in purposeful contacts with Texas by
rendering legal services to Texas residents in New Hampshire, she did not engage in purposeful contacts
with Texas by responding to telephone calls and correspondence from Texas about that advice. Id.

Here, the evidence on which Holland relies is even more attenuated than that presented in Weldon Francke.
Like the attorney in that case, Peredo responded to inquiries from Texas, but unlike the attorney in Weldon-
Francke, the subject of those inquiries was not his performance of a contract with a Texas resident; rather,
the inquiries concerned payments to be sent to a company in Illinois by a Mexican corporation pursuant to a
contract to which Peredo was not a party. As we stated in Weldon-Francke, the
3 Because we consider only the nonresident defendant‘s actions, see Michiana, 168 S.W.3d at 785, we do
not consider the emails cited by Holland that were merely received by Peredo. 4 Palazuelos had multiple
email addresses, and although at least one email from another Holland employee was sent to Palazuelos at
an email address in which ―houston‖ appeared as part of the domain name, the emails that Palazuelos sent
to Peredo and to which Peredo responded do not include any geographic identifier in Palazuelos‘s email
address.
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allegation that a nonresident committed a tort in the course of such communications is insufficient to
overcome the nonresident‘s lack of purposeful contacts. Id. (citing Michiana, 168 S.W.3d at 788–92). 3. Calls
to a Mobile Telephone Number Holland also relies on an affidavit by Palazuelos in which he attests that his ―
email and mobile phone numbers are both Texas[-]based.‖ He further attested as follows: 4. In connection
with M. Holland‘s relationship with Grupo Cuadro, I frequently received telephone calls and emails from
Miguel Peredo directed to me in Texas. 5. In the telephone calls and emails I received in Texas from Miguel
Peredo, Mr. Peredo discussed and negotiated resin orders and pricing. Also in those telephone calls and
emails made and sent by Miguel Peredo while I was in Texas, Mr. Peredo discussed Grupo Cuadro‘s
payment terms with M. Holland; past due invoices with M. Holland; and when Grupo Cuadro would pay M.
Holland for resins Grupo Cuadro had purchased. Miguel Peredo initiated many of these communications to
me, and I also made phone calls and sent emails to Miguel Peredo while I was located in Texas. But as the
Texas Supreme Court explained in Michiana, [C]hanges in technology have made reliance on phone calls
obsolete as proof of purposeful availment. While the ubiquity of ―caller ID‖ may allow nonresidents to know
a caller‘s telephone number, that number no longer necessarily indicates anything about the caller‘s location.
If jurisdiction can be based on phone conversations ―directed at‖ a forum, how does a defendant avail itself
of any jurisdiction when it can never know where the other party has forwarded calls or traveled with a mobile
phone? Michiana, 168 S.W.3d at 791.

Moreover, we have previously stated that a nonresident does not establish minimum contacts simply by
contracting with a Texas entity and engaging in numerous communications, by telephone or otherwise, with
people in Texas concerning the contract. See Alenia Spazio, S.p.A. v. Reid, 130 S.W.3d 201, 213 (Tex. App.
CHouston [14th Dist.] 2003, pet. denied) (contracting with Texas entity and numerous telephone and
facsimile communications with people in Texas relating to alleged contract do not establish
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minimum contacts); see also TeleVentures, Inc. v. Int’l Game Tech., 12 S.W.3d 900, 908–10 (Tex. App.--
Austin 2000, pet. denied) (―Minimum contacts may not be satisfied by merely engaging in communications
with a Texas corporation during performance of a contract.‖). Here, neither of the parties to the contract is a
Texas entity, and Peredo is not even a party to the contract; thus, his contacts with Texas concerning the
contract between Cuadro and Holland are even less purposeful and more attenuated than those we have
previously held insufficient to satisfy the minimum-contacts requirement. 4. Content of Communications

Holland also argues that the content of Peredo‘s communications with Palazuelos is sufficient to support
specific jurisdiction. In support of this argument, Holland relied in the trial court on Wien Air Alaska, Inc. v.
Brandt, in which the Fifth Circuit wrote, ―When the actual content of communications with a forum gives rise
to intentional tort causes of action, this alone constitutes purposeful availment.‖ 195 F.3d 208, 213 (5th Cir.
1999).5 But as we have previously stated, the ―directed tort‖ rationale employed in Wien was rejected by
the Texas Supreme Court in Michiana. Proskauer Rose LLP v. Pelican Trading, Inc., No. 14-08-00283-CV,
2009 WL 242993, at *4 (Tex. App.--Houston [14th Dist.] Feb. 3, 2009) (mem. op.).

Moreover, the reasoning of the Wien court is based on facts that are readily distinguishable from those
presented here. The statement quoted by Holland continues, ―The defendant is purposefully availing
himself of ‗the privilege of causing a consequence‘ in Texas.‖ Wien, 195 F.3d at 213. But here, the
substance of Holland‘s claim is that the California president of a Mexican corporation made
misrepresentations about when the corporation sent payments to a supplier in Illinois. The jurisdictional
inquiry does not focus on the state in which the plaintiff relied on the alleged misrepresentation. Michiana,
168 S.W.3d at 789B91. Assuming that Peredo committed
5 Holland repeated this argument almost verbatim on appeal, but without citing authority.
10

the tort alleged, the consequences occurred in Illinois, where Holland resides6 and payment was expected,
and not in Texas, where a Holland representative retrieved his email and spoke on his mobile telephone. See
Buffet Partners, L.P. v. Sheffield Square, L.L.C., 256 S.W.3d 920, 924 (Tex. App.—Dallas 2008, no pet.)
(rejecting specific jurisdiction where ―[t]he sole connection to Texas was that it was the state in which [the
plaintiff] received the communications‖). Not only was it simply fortuitous that a Holland representative
received Peredo‘s statements in Texas, but there is no substantial connection between Peredo, Texas, and
Holland‘s claims. See id.; see also Moki Mac, 221 S.W.3d at 588 (rejecting specific jurisdiction and
distinguishing cases in which the forum contact bore a ―direct link‖ to the claimed injury); Brocail v.
Anderson, 132 S.W.3d 552, 563 (Tex. App.—Houston [14th Dist.] 2004, pet. denied) (―Any tort occurred in
the exercise of medical judgment in prescribing a course of physical therapy in Michigan, not from the
communication of that prescription [to Texas].‖). 5. Holland’s Business Relationship with Cuadro

Holland further contends that the trial court could exercise personal jurisdiction over Peredo because ―the
broader business relationship between Cuadro and M. Holland, was based, in large part, on communications
occurring in Texas or with a Texas resident.‖ But Cuadro‘s relationship with Texas is not necessarily the
same as Peredo‘s relationship with Texas, and in our jurisdictional inquiry, we may consider only purposeful
contacts by Peredo in which he sought some benefit, profit, or advantage by availing himself of Texas
jurisdiction. See Michiana, 168 S.W.3d at 785. Because Holland has made no allegations that, if established,
might permit the trial court to impute Cuadro‘s contacts to Peredo,7 Cuadro‘s contacts with Texas do not form
part of our analysis.
6 See Moni Pulo Ltd. v. Trutec Oil & Gas, Inc., 130 S.W.3d 170, 175 n.7 (Tex. App.—Houston [14th Dist.]
2003, pet. denied) (―[a] corporation‘s residence is the place where its corporate affairs are conducted—its
principal place of business.‖ (quoting Ring Power Sys. v. Int’l De Comercio Y Consultoria, S.A., 39 S.W.3d
355 (Tex. App.—Houston [14th Dist.] 2001, no pet.), disapproved on other grounds, Michiana, 168 S.W.3d at
791–92 & n.81)).
7 Cf. Greenfield Energy, Inc. v. Duprey, 252 S.W.3d 721, 730 (reviewing trial court‘s rejection of plaintiffs‘
theories of agency, alter ego, and single business enterprise as grounds for imputing corporation‘s contacts
to individual).
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In sum, we conclude that Peredo negated Cuadro‘s allegations of purposeful availment, and the evidence
does not support implied findings from which the trial court could have concluded that the minimum-contacts
requirements has been satisfied.

B. Fair Play and Substantial Justice

In light of our conclusion that Peredo negated Cuadro‘s allegations of purposeful availment, we do not reach
the second prong of the due process requirements. See Panda Brandywine Corp. v. Potomac Elec. Power
Co., 253 F.3d 865, 870 (5th Cir. 2001) (per curiam) (declining to examine the fair-play-and-substantial-
justice prong of the due process requirements after concluding that the nonresident defendant lacked
minimum contacts with Texas); Moki Mac, 221 S.W.3d at 585–88 (omitting consideration of this due-process
requirement after concluding that there was no substantial connection between the defendant‘s conduct and
the operative facts of the litigation).

VI. CONCLUSION

Because the contacts at issue in this case do not constitute ―purposeful availment,‖ we sustain Peredo‘s
sole issue on appeal, reverse the trial court‘s order denying Peredo‘s special appearance, and remand for
severance and dismissal of the claims against him.

/s/
John S. Anderson Justice

Panel consists of Justices Anderson and Brown. Former Justice Guzman not participating.