                            NUMBER 13-12-00117-CV

                           COURT OF APPEALS

                 THIRTEENTH DISTRICT OF TEXAS

                    CORPUS CHRISTI – EDINBURG

LANDMARK LAND COMPANY, INC. AND                                          Appellants,
WILLIAM VAUGHN A/K/A WILLIAM W. VAUGHAN III,


                                          v.

R. SEBASTIAN BENNETT, PH.D.,                                              Appellee.


                   On appeal from the 404th District Court
                        of Cameron County, Texas.


                        MEMORANDUM OPINION
        Before Chief Justice Valdez and Justices Garza and Vela
                Memorandum Opinion by Justice Garza
      Appellants, Landmark Land Company, Inc. (“Landmark”) and William Vaughn III

(“Vaughn”) a/k/a William W. Vaughan III, bring this accelerated, interlocutory appeal of

the trial court’s order denying their special appearances. See TEX. CIV. PRAC. & REM

CODE ANN. § 51.014(a)(7) (West Supp. 2011). By three issues, appellants contend that:
(1) Vaughn is not subject to the specific jurisdiction of the trial court; (2) the fiduciary

shield doctrine protects Vaughn from the exercise of general jurisdiction over him; and

(3) there is no evidence establishing personal jurisdiction over Landmark under the alter

ego theory. We affirm.

                                            I. BACKGROUND

       In August 2011, appellee, R. Sebastian Bennett, Ph.D., sued South Padre Island

Development, L.P. (“SPID, LP”), South Padre Island Development, L.L.C. (“SPID,

LLC”), Landmark, South Padre Island Golf Villas Association (“the Association”), and

Vaughn.1 Bennett alleged that he suffered damages when he was induced to purchase

a home at South Padre Island Golf Course, a development in Laguna Vista, Texas, on

the misrepresentation that the home was covered by “all risk” insurance, when it was

not. Bennett claimed that a misrepresentation was specifically made to him by SPID,

LP through SPID, LLC that the “all risk” insurance coverage covered replacement costs

from any damage to the home, including windstorm and flood damage. The alleged

misrepresentation occurred in Texas. Bennett further alleged that Landmark controls

the operations of SPID, LP and SPID, LLP and makes all contractual decisions for those

entities, including the selection of insurance. Bennett claimed that in February 2010, he

noticed problems with water pooling toward his home after a rain storm. In June 2010,

after a heavy rain storm, Bennett noticed that portions of the drywall and flooring in the

home were saturated with water. In the course of reporting the damage to his insurance

agent, Bennett learned that his insurance claims would not be paid because his

insurance coverage did not cover all risks and did not cover many of the losses he had

suffered.
       1
           Out of these defendants, only Vaughn and Landmark are parties to this interlocutory appeal.

                                                     2
      Vaughn filed a special appearance in which he asserted that:          (1) Bennett’s

petition alleges that he (Vaughn), as Landmark’s officer and legal counsel, was involved

in the decision not to procure the “all risk” insurance, and therefore, Bennett appears to

be contending that Vaughn is subject to specific jurisdiction; (2) Bennett has not alleged

the type of contacts that would support general jurisdiction over Vaughn; and (3)

Bennett has made no allegations that would support jurisdiction over Vaughn under an

alter ego theory. Vaughn supported his special appearance with his own affidavit, in

which he stated that he is not a resident of Texas, does not individually conduct

business in Texas, owns no property in Texas, has no telephone listing in Texas, and

has no agent in Texas with authority to conduct business on his behalf. He further

stated that he made no representation to Bennett either in his individual or

representative capacity pertaining to Bennett’s claims.

      Landmark filed a special appearance in which it asserted that it conducts no

business in Texas, has not entered into a contract with a Texas resident, owns no

property in Texas, has no telephone listing in Texas, and has no employees in Texas.

Landmark further asserted that Bennett failed to: (1) adduce proof that jurisdiction over

Landmark can be sustained on the basis of an alter ego theory, (2) allege that

Landmark is subject to specific jurisdiction, or (3) allege that Landmark is subject to

general jurisdiction. Landmark attached the affidavit of Vaughn, in which he additionally

asserted that the daily operations of Landmark and the other corporate defendants are

separate, that the corporations file separate income tax returns, maintain separate

books and accounts, and conduct separate shareholder and directors’ meetings.

      On January 18, 2012, the trial court held a hearing on Vaughn and Landmark’s



                                            3
special appearances.        Appellants called one witness, Vaughn; Bennett called three

witnesses: Mark Kerney, Debbie Camacho, and Justin Awtrey. We summarize the

pertinent testimony adduced at the hearing below.

A.      William Vaughn

        Vaughn testified that he is employed by DPMG, Inc., a Delaware corporation with

its principal place of business in Maryland; DPMG, Inc. is a subsidiary of Landmark.

Landmark is a Delaware corporation with its principal place of business in Maryland.

Landmark is a holding company that has no employees and has been engaged in the

development of property since the early 1970s. Vaughn is an officer and director of

Landmark. SPID, LLC is also a subsidiary of Landmark. According to Vaughn, he has

never been a resident of Texas and has never owned property or conducted business in

Texas.      Vaughn testified that he had never made any representations regarding

Bennett’s home and he has never spoken to Bennett.

        On cross-examination, Vaughn stated that he is the president, general counsel,

and a member of the board of directors of Landmark. Vaughn testified that SPID, LP

was converted into SPID, LLC in the “mid-2000s.”2 Pursuant to questions from the trial

court, Bennett’s counsel stated that Bennett purchased his condominium from SPID,

LLC, which is a subsidiary of Landmark, but Bennett alleges that the subsidiaries are

controlled and directed by Landmark. Vaughn testified that Mark Kerney, the director of

the SPID golf course, was sent to the site by Landmark.                     According to Vaughn,

Landmark owns no property and has no employees; its subsidiaries build golf courses.

In the case of the Laguna Vista project, SPID, LP—later changed to SPID, LLC—owned


        2
          Vaughn testified that the LP was converted into an LLC in 2006 to take advantage of the change
in the Texas franchise tax administration.

                                                   4
and operated the property.

      Bennett’s counsel questioned Vaughn about Plaintiff’s Exhibit 8, a three-page

print-out depicting Landmark’s website.    The website identifies Landmark as “Golf,

Resort & Community Developers.”         It refers to the experience of “Landmark’s

management team” and states that “Landmark’s greatest asset has always been its

employees,” specifically noting that it “has employed each of the 15 top corporate

officers for over 20 years.” The website identifies Justin Awtrey as project director of

the South Padre Island Golf Club. Vaughn confirmed that Awtrey is in charge of the

operations at the South Padre Island Golf Club in Laguna Vista and serves on the

Association’s board as the representative of the developer, SPID, LLC.

      Vaughn said that over the years, he had two or three discussions with Dave Hall,

then an insurance agent with Coleman, Hall & Heinze insurance agency in Port Isabel.

Vaughn denied being involved in the placement of insurance coverage for the Golf

Villas Condominiums, but admitted that he discussed the condominium insurance

coverage with Hall. Vaughn testified that the Association requested Hall to provide the

broadest insurance coverage available for the condominiums, but that there are always

exclusions in insurance policies. After Hurricane Katrina, for example, wind-driven rain

became a common exclusion and coverage for it could not be purchased. At the time,

no coverage was available to the Association for wind-driven rain. Hall sometimes

attended the Association’s meetings to explain various coverage options and upgrade

options available to individual homeowners for additional coverage of their personal

property. Vaughn stated that the insurance company determined that the damage to

Bennett’s residence resulted from high winds that blew water through the windows.



                                           5
Multiple units sustained water damage from rain blowing through shingles or through

windows, and the insurance company took the position that its exclusion precluded

reimbursement for that type of damage.

      Vaughn testified that SPID, LLC is a Delaware corporation that is licensed to do

business in Texas. Vaughn is a vice president of SPID, LLC. Vaughn confirmed that

DPMG, Inc. is authorized to do business in Texas and has the same office and

corporate officers as Landmark and SPID, LLC.        Bennett’s counsel introduced into

evidence a flyer showing the various types of residences available at the Laguna Vista

development; the flyer identifies the development as “A Landmark Land Community.”

Vaughn testified that Bennett’s residence is a townhouse.         Mark Kerney, then an

employee of SPID, LP, came to Texas in 1996.

      Vaughn stated that he traveled to Laguna Vista for director’s meetings “every

three months or so.” Vaughn estimated that he has made 20 or 30 business trips to

Cameron County, each lasting a couple of days, on business related to the Laguna

Vista development. On occasion, other corporate officers visited the area; Gary Kerney,

an employee of DPMG, Inc. (father of Mark Kerney, co-manager of the South Padre

Island Golf Development), traveled to the site occasionally.           Vaughn stated that

“probably” four of the five top corporate officers of DPMG, Inc. and Landmark are the

same people.    Vaughn also said that Gerald Barton, the CEO and chairman of

Landmark, has been to the Laguna Vista development, and that “up until three or four

years ago,” Landmark regularly held its shareholders’ meetings at Laguna Vista.

      On   re-direct   examination,   Vaughn   clarified   that   he    never made   any

representations to Bennett, and Landmark could not have made any such



                                          6
representation because “[t]here was nobody at Landmark to make representations.”

B.    Mark Kerney

      Kerney testified that he was sales and marketing director or vice president of

SPID, LLC. Kerney stated that his father, Gary Kerney, was senior vice president of

Landmark. Kerney testified that the relationships of the various Landmark subsidiaries

are “very complicated” and that he does not “know the details.” He confirmed that

Landmark’s trademark emblem, the orange oak tree, has always been used by SPID,

LLC. Kerney stated that Landmark made the decision to develop the golf course project

at Laguna Vista and set up various companies to carry out the project in Cameron

County. Kerney stated that there were corporate meetings for various corporations held

at Laguna Vista, but he did not know which entities. In the “early days,” Kerney said

that his paychecks came from Landmark’s offices.

      On cross-examination, Kerney clarified that his paychecks were issued by “New

Delos Partners” and “South Padre Island Development.”

C.    Debbie Camacho

      Camacho testified that she is the custodian of records at Coleman, Hall &

Heinze. She stated that Hall, now deceased, handled the insurance account with the

South Padre Island Golf Course properties; Hall handled the account from his office or

by meeting people at the Laguna Vista golf course.

D.    Justin Awtrey

      Awtrey testified that his father is Jim Awtrey, who is a board member and former

officer of Landmark. Awtrey stated that he works at the South Padre Island Golf Club

Development and is SPID, LLC’s representative on the Association’s board. Awtrey



                                          7
stated that, in accepting the position as project manager for the golf course, he spoke to

Gary Kerney, then executive vice president of Landmark. He said that Gary Kerney, in

his capacity as Landmark vice president, “oversaw the project down here.” Awtrey

confirmed that the Association negotiated the insurance coverage for the Golf Villas

through Coleman, Hall & Heinze. According to Awtrey, Vaughn actually made decisions

regarding the types of insurance coverage that were obtained for the Golf Villas

property.

                      II. STANDARD OF REVIEW AND APPLICABLE LAW

       The issue on appeal is whether the trial court erred in denying appellants’ special

appearances. Issues of personal jurisdiction are questions of law and reviewed de

novo. Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 337 (Tex.

2009) (citing BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002)).

The plaintiff has the initial burden to “plead sufficient allegations to confer jurisdiction.”

Id. Once that burden is met, the defendant seeking to avoid the court’s jurisdiction

takes on the burden to negate “all potential bases for jurisdiction pled by the plaintiff.”

Id. Where, as here, the lower court does not make findings of fact and conclusions of

law in support of its ruling, “all facts necessary to support the judgment and supported

by the evidence are implied.” Id.

       Non-residents are subject to the personal jurisdiction of Texas courts if:          (1)

jurisdiction is authorized under the state’s long-arm statute; and (2) it comports with

guarantees of the U.S. and Texas Constitutions.             Id. (quoting Moki Mac River

Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007)). Under Texas’s long-arm

statute, a non-resident defendant is within the court’s jurisdiction if the defendant



                                              8
conducts business in the state. See PHC–Minden, L.P. v. Kimberly-Clark Corp., 235

S.W.3d 163, 166 (Tex. 2007) (noting that the long-arm statute’s language extends as far

as the U.S. and Texas Constitutions permit, so courts should also rely on due process

precedents as guides).      Thus, the exercise of personal jurisdiction is constitutional

when:    (1) the non-resident defendant has established minimum contacts with the

forum; and (2) the exercise of jurisdiction follows the traditional notions of fair play and

substantial justice. Id. (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

        The Texas Supreme Court recently expanded on the meaning of the phrase “fair

play and substantial justice”:

        Although this “fair play” and “substantial justice” test is well known to
        appellate courts, the expression is imprecise. It gains meaning, however,
        when viewed in light of the “minimum contacts” a defendant has with the
        forum.    Significant contacts suggest that the defendant has taken
        advantage of forum-related benefits, while minor ones imply that the forum
        itself was beside the point.           When a nonresident defendant has
        purposefully availed itself of the privilege of conducting business in a
        foreign jurisdiction, it is both fair and just to subject that defendant to the
        authority of that forum’s courts.

Spir Star AG v. Kimich, 310 S.W.3d 868, 872 (Tex. 2010) (citations omitted).

        “A defendant’s contacts with a forum can give rise to either specific or general

jurisdiction.” Id. (citing CSR Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996)). “General

jurisdiction exists when a defendant’s contacts are continuous and systematic, even if

the cause of action did not arise from activities performed in the forum state.” Id. (citing

CSR, 925 S.W.2d at 595).

        The Spir Star court also restated the principles governing specific jurisdiction:

        A court has specific jurisdiction over a defendant if its alleged liability
        arises from or is related to an activity conducted within the forum. CSR,
        925 S.W.2d at 595. Unlike general jurisdiction, which requires a “more
        demanding minimum contacts analysis,” id. at 595, specific jurisdiction

                                              9
      “may be asserted when the defendant’s forum contacts are isolated or
      sporadic, but the plaintiff’s cause of action arises out of those contacts
      with the state.” 4 CHARLES ALAN W RIGHT & ARTHUR R. MILLER, FEDERAL
      PRACTICE & PROCEDURE § 1067.5 (3d ed. 2002). In such cases, “we focus
      on the ‘relationship among the defendant, the forum[,] and the litigation.’”
      Moki Mac, 221 S.W.3d at 575–76 (quoting Guardian Royal [Exch.
      Assurance, Ltd. v. English China Clays, P.L.C.,] 815 S.W.2d [223], 228
      [(Tex. 1991)]. Specific jurisdiction is appropriate when (1) the defendant’s
      contacts with the forum state are purposeful, and (2) the cause of action
      arises from or relates to the defendant’s contacts. See Retamco, 278
      S.W.3d at 338.

Spir Star, 310 S.W.3d at 873.

                                    III. DISCUSSION

      In his original petition, Bennett pleaded that Landmark “makes all major

contractual decisions” for SPID, LLC and the Association, including the “selection of and

placement of insurance for properties within the association, including the home

purchased by Plaintiff.” Bennett pleaded that Landmark, acting through Vaughn, made

the decision not to procure insurance coverage in compliance with the Association’s

strict requirements. Bennett also pleaded that SPID, LP and SPID, LLC were “acting at

the control and direction of Landmark” when they misrepresented the scope of the

insurance coverage on Bennett’s home. We conclude that Bennett’s pleadings were

sufficient to satisfy his initial burden because they alleged facts that would support

specific jurisdiction, and thus shifted the burden to appellants to negate all potential

bases alleged. See El Puerto de Liverpool v. Servi Mundo Llantero, 82 S.W.3d 622,

629 (Tex. App.—Corpus Christi 2002, pet. dism’d w.o.j.).

A. Specific Jurisdiction Over Vaughn

      By their first issue, appellants contend that the trial court did not have specific

jurisdiction over Vaughn because there is “no connection between Vaughn’s contacts



                                           10
with Texas and the operative facts of the litigation.”       Appellants further argue that

although Vaughn admitted that he discussed the insurance coverage for the properties

with Hall, “that contact is not substantially connected to the operative facts of the

litigation.”

        We disagree.      As noted, specific jurisdiction is appropriate when (1) the

defendant’s contacts with the forum state are purposeful, and (2) the cause of action

arises from or relates to the defendant’s contacts. Spir Star, 310 S.W.3d at 873. The

gravamen of Bennett’s complaint is that he purchased his home based on the

representation by SPID, LLC that it was covered by “all risk” insurance, when it was not,

and that Landmark, acting through Vaughn, made the decision not to procure the “all

risk” insurance coverage as represented.          Vaughn testified that he traveled to the

Laguna Vista development “every three months or so” for director’s meetings, for a total

of twenty or thirty trips, each lasting a couple of days. Vaughn also admitted that “over

the years,” he had several discussions with Hall regarding the insurance coverage for

the Laguna Vista properties. Significantly, Awtrey testified that Vaughn actually made

decisions regarding the types of insurance coverage obtained for the Golf Villas

property.      We conclude that this evidence shows that, considering only Vaughn’s

contacts with Texas, his contacts with Texas were purposeful and the cause of action

arose from or related to his contacts with Texas. See id. We hold that Vaughn had the

necessary minimum contacts sufficient to allow Texas courts to assert specific

jurisdiction over him.

        We must now determine whether jurisdiction is consistent with traditional notions

of fair play and substantial justice. See id. at 878.



                                             11
       “‘Only in rare cases . . . will the exercise of jurisdiction not comport with fair play

and substantial justice when the nonresident defendant has purposefully established

minimum contacts with the forum state.’” Id. (quoting Guardian Royal, 815 S.W.2d at

231). To evaluate this component, we consider Vaughn’s contacts in light of: (1) “the

burden on the defendant”; (2) “the interests of the forum state in adjudicating the

dispute”; (3) “the plaintiff’s interest in obtaining convenient and effective relief”; (4) the

interstate or international judicial system’s interest in obtaining the most efficient

resolution of controversies; and (5) the shared interest of the several nations or states in

furthering fundamental substantive social policies. Id. To defeat jurisdiction, appellants

must present “‘a compelling case that the presence of some consideration would render

jurisdiction unreasonable.’” Id. at 878–79 (quoting Burger King Corp. v. Rudzewicz, 471

U.S. 462, 477 (1985)).

       Requiring Vaughn to defend Bennett’s claim in Texas would not impose an

undue burden on him. See id. at 879. Vaughn testified that he travels to Texas for

director’s meetings “every three months or so.”        Secondly, Texas has a significant

interest in exercising jurisdiction over controversies arising from injuries a Texas

resident sustains as a result of misrepresentations regarding insurance coverage. See

id. Third, Bennett has an interest in resolving the controversy in Texas because that is

where the alleged misrepresentation and damage occurred. See id. The fourth and

fifth factors are not particularly applicable. We conclude that the burden on appellants

of defending against the suit is minimal, and is outweighed by Bennett’s and Texas’s

interests in adjudicating the dispute here.       See id. at 879–80.     Asserting personal




                                             12
jurisdiction over Vaughn comports with traditional notions of fair play and substantial

justice. See id. at 880.

        We hold the trial court correctly concluded that it had personal jurisdiction over

Bennett’s claims against Vaughn. We overrule appellants’ first issue.

B. Fiduciary Shield Doctrine

        By their second issue, appellants contend that the fiduciary shield doctrine

protects Vaughn from the exercise of general jurisdiction over him. Because we have

already determined that the trial court properly exercised specific jurisdiction over

Vaughn, we need not determine whether he was subject to the court’s general

jurisdiction. See TEX. R. APP. P. 47.1.

C. Jurisdiction Over Landmark

        By their third issue, appellants contend that no personal jurisdiction can be

imputed to Landmark pursuant to an alter ego theory. Specifically, appellants argue

that the evidence does not establish that Landmark exercised a degree of control over

SPID, LLC greater than that normally associated with common ownership and

directorship. See Spir Star, 310 S.W.3d at 873–74 (citing PHC–Minden, 235 S.W.3d at

172).

        A parent company and its subsidiary may be “fused” for jurisdictional purposes if

the plaintiff proves that “the parent controls the internal business operations and affairs

of the subsidiary.” BMC Software, 83 S.W.3d at 799. “But the degree of control the

parent exercises must be greater than that normally associated with common ownership

and directorship; the evidence must show that the two entities cease to be separate so

that the corporate fiction should be disregarded to prevent fraud or injustice.” Id. A



                                            13
parent company cannot be subjected to personal jurisdiction based on the local

activities of its subsidiary when “the subsidiary’s presence in the state is primarily for the

purpose of carrying on its own business and the subsidiary has preserved some

semblance of independence from the parent and is not acting as merely one of its

departments . . . .” 4A W RIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 1069.4

(3d ed. 2002). “[T]he party seeking to ascribe one corporation's actions to another by

disregarding their distinct corporate entities [must] prove this allegation, because Texas

law presumes that two separate corporations are distinct entities.” PHC—Minden, 235

S.W.3d at 173.

       Appellants argue that the evidence does not show that Landmark exercised a

degree of control over SPID, LLC greater than that normally associated with common

ownership and directorship. Bennett points to the following in support of his argument

that Landmark and its subsidiaries are fused into one operation: (1) Landmark includes

its subsidiaries in presenting consolidated financial statements in its Securities and

Exchange Commission (SEC) 10-Q filings; (2) in marketing its properties through its

website, Landmark identifies the Laguna Vista development as a “Landmark” project;

(3) Mark Kearny was directed to the Laguna Vista development by his father, Gary

Kearney, and by Doug Barton, the son of Gerald Barton, chairman and CEO of

Landmark; (4) Vaughn testified that Landmark made the decision to acquire the Laguna

Vista property; (5) Mark Kearney testified that decisions regarding the development

were approved by Landmark; and (6) Landmark utilizes its logo, an oak tree, on its

internet marketing materials to “brand” its golf course resort communities, and the




                                             14
marketing flyer for the South Padre Island Golf Club identified the development as a

“Landmark Land Community.”

       In response, appellants argue that federal securities regulations permit a

registrant to file with its consolidated subsidiaries, and that the consolidated filing is not

evidence that Landmark exercised a degree of control over SPID, LLC greater than that

normally associated with common ownership and directorship.

       Vaughn’s affidavit, attached to Landmark’s special appearance, states, in

pertinent part:

       Defendant Landmark Land Company, Inc. and the other corporate
       Defendants are distinct and adequately capitalized financial units and are
       separate by [sic] incorporated and maintained. The daily operations of
       Defendant Landmark Land Company, Inc. and the other corporate
       Defendants are separate. The other corporate Defendants file income tax
       returns separate from the consolidated return filed by Defendant
       Landmark Land Company, Inc. Defendant Landmark Land Company, Inc.
       and the other corporate Defendants maintain separate books and
       accounts. Defendant Landmark Land Company, Inc. and the other
       corporate Defendants conduct separate meeting[s] of their shareholder[s]
       and directors.

       The Texas Supreme Court has relied on the following factors in determining

whether a subsidiary is “separate and distinct from its parent corporation for personal

jurisdiction purposes”: (1) the amount of the subsidiary's stock owned by the parent

corporation; (2) the existence of separate headquarters; (3) the observance of corporate

formalities; and (4) the degree of the parent’s control over the general policy and

administration of the subsidiary. PHC–Minden, 235 S.W.3d at 175 (citing 4A W RIGHT &

MILLER, FEDERAL PRACTICE & PROCEDURE § 1069.4).             Ultimately, the evidence must

establish that the two entities are not factually and legally separate and the corporate




                                             15
veil should therefore be pierced to prevent fraud or injustice. BMC Software, 83 S.W.3d

at 799.

      Parent companies normally exercise at least some control over their subsidiaries,

and “[a] subsidiary corporation will not be regarded as the alter ego of its parent merely

because of stock ownership, a duplication of some or all of the directors or officers, or

an exercise of the control that stock ownership gives to stockholders.” Gentry v. Credit

Plan Corp. of Houston, 528 S.W.2d 571, 573 (Tex. 1975). The Texas Supreme Court

has held that “‘[a]ppropriate parental involvement includes monitoring the subsidiary’s

performance, supervision of the subsidiary’s finance and capital budget decisions, and

articulation of general policies.’” PHC–Minden, 235 S.W.3d at 176 (quoting 16 MOORE'S

FEDERAL PRACTICE § 108.42[3][b]).       To pierce the corporate veil in the personal-

jurisdiction context, there must be “something beyond the subsidiary’s mere presence

within the bosom of the corporate family.”       Id.   (quoting Dickson Marine, Inc. v.

Panalpina, Inc., 179 F.3d 331, 338 (5th Cir. 1999)).

      Here, the evidence shows that SPID, LLC is a wholly-owned subsidiary of

Landmark. Landmark has its corporate headquarters in Maryland. Plaintiff’s Exhibit No.

10, a copy of SPID, LLC’s “Texas Franchise Tax Public Information Report,” shows that

SPID, LLC’s “principal office” address is the same as Landmark’s.          There is little

evidence in the record regarding the observance of corporate formalities, other than

Vaughn’s assertion in his affidavit that the companies maintain separate books and

conduct separate meetings.      Although not evidence of the absence of corporate

formalities, Landmark’s marketing flyers and website marketing deliberately obfuscated

any distinction between the entities by identifying the Laguna Vista project as a



                                           16
Landmark development. The evidence that Landmark exercised a degree of control

over SPID, LLC greater than that normally associated with common ownership and

directorship is:   (1) Mark Kearney’s testimony that Landmark made the decision to

purchase the property and develop it as a golf resort and that Landmark approved

decisions regarding the golf course development; (2) up until the last three or four

years, Landmark regularly held its shareholders’ meetings at Laguna Vista; and (3)

Awtrey’s testimony that Gary Kerney “oversaw” the Laguna Vista project in his capacity

as Landmark’s executive vice president.

         We conclude that this evidence constitutes some evidence that Landmark and

SPID, LLC may be fused for jurisdictional purposes. See Spir Star, 310 S.W.3d at 880

(“Under the appropriate standard of review, our task ends when, as here, some

evidence supports the trial court’s denial of AG’s special appearance.”).       Because

Bennett pleaded allegations sufficient to confer jurisdiction under an alter ego theory,

appellants had the burden to negate that basis for jurisdiction.     See Retamco, 278

S.W.3d at 337. We conclude that appellants failed to negate the alter ego basis for

jurisdiction. See id. We hold that the trial court did not err in exercising personal

jurisdiction over Landmark under an alter ego theory. We overrule appellants’ third

issue.

         As noted, Bennett pleaded an alter ego theory by alleging that Landmark “makes

all major contractual decisions” for SPID, LLC and the Association. He further pleaded

specific allegations of misrepresentation and fraudulent conduct by SPID, LLC “acting at

the control and direction of Landmark.” In its special appearance, Landmark argued

that it was not subject to the court’s general or specific jurisdiction and that personal



                                           17
jurisdiction could not be exercised over it under an alter ego theory of jurisdiction.

Construing Bennett’s pleadings liberally as pleading allegations which confer general

jurisdiction over Landmark itself, we address Landmark’s assertion in its special

appearance that it is not subject to the court’s general jurisdiction.

       General jurisdiction is subject to a “dispute-blind” analysis—without regard to the

nature of the claim—and involves a “more demanding minimum contact analysis.”

PHC–Minden, 235 S.W.3d at 168. However, the requisite level of minimum contacts

must be substantial and involve a defendant who has been engaged in longstanding

business with the forum state. Id. In a minimum contacts analysis, the threshold issue

to determine is whether the foreign corporation has “continuous and systematic general

business contacts” with the forum state. Helicopteros Nacionales de Colombia, S.A. v.

Hall, 466 U.S. 408, 416 (1984). Continuous and systematic contacts are determined

only on a “case-by-case basis” and should be examined for the quality of the contacts,

rather than the quantity. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801,

810 (Tex. 2002).

       The second prong of a general jurisdiction analysis requires the court to evaluate

“whether the assertion of personal jurisdiction comports with fair play and substantial

justice.” Guardian Royal, 815 S.W.2d at 228. To make this evaluation, the court is

advised to look at several factors, including: (1) the burden on the defendant; (2) the

interest of the forum state in adjudicating the dispute; (3) the plaintiff’s interest in

obtaining convenient and effective relief; (4) the interstate judicial system’s interest in

obtaining the most efficient resolution of controversies; and (5) the shared interest of the

states in furthering fundamental substantive social policies. Id.



                                             18
       Vaughn is president, general counsel, and a member of Landmark’s board of

directors. Vaughn testified that “up until three or four years ago,” Landmark regularly

held shareholders’ meetings at Laguna Vista. As noted above, Vaughn testified that he

has made twenty or thirty business trips to Texas related to the Laguna Vista

development. Awtrey testified that Gary Kerney “oversaw” the Laguna Vista project in

his capacity as Landmark’s executive vice president. We hold that these contacts,

which are more than isolated, rise to a sufficient level that are continuous and

systematic to satisfy general jurisdiction. See Spir Star, 310 S.W.3d at 872 (noting that

general jurisdiction exists when a defendant’s contacts are continuous and systematic,

even if the cause of action did not arise from activities performed in the forum state).

       Having found that Landmark had minimum contacts with the state of Texas, we

must decide whether subjecting it to jurisdiction here would violate “traditional norms of

fair play and substantial justice.”   See Guardian Royal, 815 S.W.2d at 228 (listing

factors to consider).

       Viewing the facts through the prism of the factors, we conclude that traditional

norms of fair play and substantial justice are not violated by subjecting Landmark to

jurisdiction in Texas. First, although it may be somewhat burdensome for Landmark to

litigate in Texas (rather than in Maryland, where its corporate office is located), the

burden is outweighed by the fact that all of the alleged misrepresentations took place in

Texas, and therefore, the majority of the documents and witnesses necessary for trial

are in Texas. Moreover, the burden on Landmark must be viewed in light of the fact

that “up until three or four years ago,” it regularly held its shareholders’ meetings in

Laguna Vista. See id. at 232 (noting that “the interests of the forum state and the



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plaintiff will justify the severe burden placed upon the nonresident defendant”). The

second and third factors—the interests of Texas and Bennett—also favor jurisdiction in

Texas. Texas has an interest in adjudicating the dispute because the claim was filed by

a Texas resident and involves alleged misrepresentations and fraudulent conduct that

occurred in Texas. See id. at 232–33. Bennett’s interest is served by having his claims

adjudicated in Texas, where he resides and where the alleged misrepresentations and

fraudulent conduct occurred. See Pessina v. Rosson, 77 S.W.3d 293, 299 (Tex. App.—

Austin 2001, pet. denied). The interests of the interstate judicial system indicate that

Texas is the proper forum. Again, Bennett’s claims are based on misrepresentations

which were allegedly committed in Texas and allegedly fraudulent conduct that occurred

in Texas. See id. These same reasons relate to the fifth factor, the shared interest of

the respective states in furthering substantive social policies.

       Based on the preceding factors, we conclude that the exercise of personal

jurisdiction over Landmark comports with fair play and substantial justice. See Spir

Star, 310 S.W.3d at 872. We hold that the trial court did not err in exercising general

jurisdiction over Landmark.

                                      IV. CONCLUSION

       We hold that the trial court did not err in denying Landmark’s and Vaughn’s

special appearances. We affirm.




                                                  DORI CONTRERAS GARZA
                                                  Justice

Delivered and filed the
20th day of September, 2012.

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