Affirmed and Opinion filed August 30, 2018.




                                        In The

                     Fourteenth Court of Appeals

                                NO. 14-17-00880-CV

                    ASCENTIUM CAPITAL LLC, Appellant
                                          V.
   HI-TECH THE SCHOOL OF COSMETOLOGY CORP., JOSEPH R.
  LICCI, COSMETOLOGY CAREER CENTER, L.L.C., AND C323, LLC,
                         Appellees

                    On Appeal from the 113th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2015-74175

                                  OPINION


      In this appeal from the grant of a special appearance, plaintiff Ascentium
Capital LLC argues that defendant C323, LLC’s principal place of business is in
Texas, and thus, the trial court erred in concluding that it lacked general jurisdiction
over the company. Because there is conflicting evidence on the subject, we conclude
that the trial court did not abuse its discretion in granting C323’s special appearance
and dismissing the claims against it. We accordingly affirm the trial court’s
judgment.

                                        I. BACKGROUND

      Appellant Ascentium Capital LLC’s predecessor in interest loaned “Hi-Tech
the School of Cosmetology Corp.” money to buy equipment to run a cosmetology
school in Florida. Hi-Tech then sold its assets to appellee C323, LLC and defaulted
on the loan. C323 now operates the cosmetology school at the same location and
using the same assets previously used by Hi-Tech. C323 also hired Hi-Tech’s
shareholder and former president Hector Gonzalez as “campus manager.”

      C323 is a limited liability company organized under Florida law, and the
cosmetology school is its only business. The company is owned by its three
manager-members. John Turnage, a Texas resident, is chief executive officer of the
company. The two remaining manager-members, Charles Riser and Steve Pollak,
live respectively in Maryland and North Carolina.

      To recover on the debt, Ascentium filed suit in a Harris County district court
against Hi-Tech, C323, and the loan guarantors. As the basis of general personal
jurisdiction over C323,1 Ascentium alleged that the company’s “principal address”
is in Texas; that the company is both a resident of Texas and does business in Texas;
and that the webpage of the Florida Department of State’s Division of Corporations
lists Texas addresses for two of the company’s three managers. Ascentium also
pleaded that the C323 may be served by serving Turnage in Texas.

      C323 filed a special appearance contesting the court’s exercise of general
personal jurisdiction and asserting that its principal place of business is in Florida.
In support of the special appearance, Gonzalez attested that the company’s

      1
          Ascentium alleged only general jurisdiction, not specific jurisdiction.

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operations are located entirely in Florida and that the address stated on the
documents on which Ascentium relies is merely the address of one of the company’s
shareholders.

       The trial court granted the special appearance and dismissed the claims against
C323 without issuing findings of fact and conclusions of law.2 Ascentium now
appeals that ruling.

                                   II. GOVERNING LAW

       The Texas long-arm statute “extends Texas courts’ personal jurisdiction ‘as
far as the federal constitutional requirements of due process will permit.’” M & F
Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co., 512 S.W.3d 878, 885 (Tex.
2017) (quoting BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex.
2002)).    Federal due-process requirements are satisfied if (a) the nonresident
defendant has “minimum contacts” with the forum state, and (b) the court’s exercise
of jurisdiction “does not offend ‘traditional notions of fair play and substantial
justice.’” Id. (quoting Walden v. Fiore, –U.S.–, 134 S. Ct. 1115, 1121, 188 L. Ed.
2d 12 (2014)).

       The principle underlying minimum-contacts analysis is that “[t]he defendant’s
activities, whether they consist of direct acts within Texas or conduct outside Texas,
must justify a conclusion that the defendant could reasonably anticipate being called
into a Texas court.” M & F Worldwide, 512 S.W.3d at 886 (quoting Retamco
Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009)). A
defendant has established minimum contacts with the forum state if it has
“purposefully avail[ed] itself of the privilege of conducting activities within the

       2
         Ascentium initially requested findings of fact and conclusions of law, but abandoned the
request by failing to file a notice of past due findings as required by the Texas Rules of Civil
Procedure. See TEX. R. CIV. P. 297.

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forum state, thus invoking the benefits and protections of its laws.” Id. (quoting
Moncrief Oil Int’l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013)). When
determining whether the defendant has purposefully availed itself of the privilege of
conducting activities in Texas, three rules are paramount. First, only the defendant’s
contacts are relevant, not the unilateral activity of someone else. See id. (citing
Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex. 2005)).
Second, the defendant’s acts must be purposeful and not random or fortuitous. See
id. And, third, the defendant “must seek some benefit, advantage, or profit by
‘availing’ itself of the jurisdiction” such that it impliedly consents to suit in the forum
state. Id. (quoting Michiana, 168 S.W.3d at 785).

       The minimum contacts sufficient to establish personal jurisdiction varies
depending on whether general jurisdiction or specific jurisdiction is alleged. See
Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010) (pointing out
that the burden borne by a defendant who files a special appearance is to “negate all
bases of personal jurisdiction alleged by the plaintiff”).           Here, only general
jurisdiction is at issue.

       A court may exercise general jurisdiction over a defendant limited liability
company if the company was organized under the law of the forum state or has its
principal place of business there. See Daimler AG v. Bauman, 571 U.S. 117, 137
(2014) (explaining that a corporation’s place of incorporation and principal place of
business are the “paradig[m] . . . bases for general jurisdiction” (quoting Lea
Brilmayer et al., A General Look at General Jurisdiction, 66 TEX. L. REV. 721, 735
(1988) (alteration in original)); id. at 139 (applying the identical test to both a
corporation and a limited liability company). In addition, a court has general
jurisdiction over the defendant if the company’s contacts with the forum state “are
so ‘continuous and systematic’ as to render [it] essentially at home in the forum

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State.” M & F Worldwide, 512 S.W.3d at 885 (quoting Goodyear Dunlop Tires
Operations, SA v. Brown, 564 U.S. 915, 919 (2011) (alteration in original)).

                             III. STANDARD OF REVIEW

      Whether a court can exercise personal jurisdiction over a nonresident
defendant is a question of law, which we review de novo. Kelly, 301 S.W.3d at 657.
If the trial court must resolve a factual dispute to decide the jurisdictional issue but
does not issue findings, then all facts necessary to support the judgment and
supported by the evidence are implied. BMC Software Belg., N.V. v. Marchand, 83
S.W.3d 789, 795 (Tex. 2002). If conflicting evidence raises a fact issue, we must
uphold the trial court’s resolution of it. See TV Azteca v. Ruiz, 490 S.W.3d 29, 36
n.4 (Tex. 2016) (citing Retamco, 278 S.W.3d at 337).

                    IV. ASCENTIUM’S ISSUES AND ALLEGATIONS

      Acentium presents the following four issues for review:

   1. Is C323 subject to personal jurisdiction where its principal place of business
      is located?

   2. In the context of general personal jurisdiction, is a company’s “nerve center”
      its principal place of business?

   3. Is the Texas office of C323’s CEO John Turnage the company’s principal
      place of business?

   4. Did the trial court err in sustaining C323’s special appearance and dismissing
      the claims against it for lack of personal jurisdiction?

      Ascentium’s first two issues are undisputed; both sides agree—and the law
holds—that a company is subject to general jurisdiction in the state of its principal
place of business. See Daimler AG, 571 U.S. at 137. A company’s principal place


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of business, often referred to as a company’s “nerve center,” is the place where the
company’s officers “direct, control, and coordinate” the company’s activities. Hertz
Corp. v. Friend, 559 U.S. 77, 92–93 (2010). The company’s nerve center normally
is its headquarters, unless that is not the actual center of direction, control and
coordination. Hertz, 559 U.S. at 93. The parties dispute whether the company’s
“nerve center” is in Texas or Florida.

      As a basis for general jurisdiction, Ascentium alleged only that “C323’s
principal address is in Texas” and “two of C323’s three managers list their addresses
in Texas.” Attached to and incorporated in Ascentium’s pleadings were print-outs
of three pages from the Florida Department of State’s Division of Corporations. The
first page provides detail about C323. The company is identified as a Florida limited
liability company, with a “principal address” and “mailing address” at the same
location in Carrollton, Texas.3 The same address is stated for company managers
John Turnage and Steve Pollak.             A third manager, Charles Riser, resides in
Maryland, and the company’s registered agent is in Florida. The second and third
pages are the company’s 2016 and 2017 annual reports. In both reports, the names
and addresses of the three managers and the registered agent are unchanged, as is
the company’s mailing address. Instead of identifying the Texas address as the
company’s “principal address,” the annual reports identify it as C323’s “current
principal place of business.” Both reports are signed by Turnage as “CEO.”

      Construing the pleading liberally in favor of the plaintiff, as we must, 4 we
understand Ascentium to mean that C323’s principal place of business is in Texas
because documents filed with the Florida Department of State identify Carrollton,



      3
          Initial capitalization has been removed from each quote from these documents.
      4
          See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).

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Texas, as C323’s “principal address” or principal place of business and as the
address for managers Turnage and Pollak.

      C323 had the burden to negate these bases for jurisdiction, and could do so on
factual or legal grounds. See Kelly, 301 S.W.3d at 659. Factually, it could attempt
to disprove the allegations, and legally, it could attempt to show that, even if true,
the allegations are insufficient to establish jurisdiction. See id. C323 challenged the
allegations on both grounds.

                        V. THE JURISDICTIONAL EVIDENCE

      C323 does not dispute that Turnage has a Texas address but does dispute that
Texas is Pollak’s address and C323’s principal place of business. In support of this
position, Gonzalez attested that C323 is “incorporated” under Florida law; that its
“sole business” is the operation of a cosmetology school in Miami, Florida; and that
it has no other campuses or business offices. Gonzalez further states that all of
C323’s employees work from the school in Miami; that the company neither owns
nor stores any property in Texas; that it has no employees in Texas; and that it has
never advertised or solicited business in Texas. He attested that the Texas address
is not C323’s “principal address” but instead is “merely an address of one of C323’s
shareholders,” adding that Pollak lives in North Carolina, not Texas. According to
Gonzalez, “C323’s only office is in Miami, Florida, where it operates its only
business: a cosmetology school.”

      In response, Ascentium produced C323’s Articles of Organization, which
state that C323’s “principal office address” and “mailing address” is in Carrollton,
Texas, at the same address listed for Turnage. The other members of the company
are Riser, whose address is in Maryland, and Pollak, whose address is in North
Carolina, as Gonzalez stated. The Articles of Organization are signed by Turnage
as “Manager,” the same title given to Riser and Pollak. Ascentium also produced an
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affidavit of service showing that C323 had been served by serving Turnage in Texas;
however, Turnage also is the president of co-defendant Cosmetology Career Center,
L.L.C., a Texas limited liability company in Plano, Texas. Turnage was served at
Cosmetology Career Center’s office, not at the C323’s alleged principal place of
business in Carrollton, Texas.

      Ascentium also relied on excerpts from Gonzalez’s deposition. Gonzalez
testified that as campus manager, he was responsible for the “general operations of
the day-to-day business of the school.” He stated that co-defendant Hi-Tech is no
longer operating, but he had been a shareholder and Hi-Tech’s president. He also
related that he and his son, who also resides in Florida, negotiated with Turnage for
C323’s purchase of Hi-Tech’s assets, and that the negotiations took place in Florida.
All recruitment of students takes place in Dade County, Florida, and all employees
are hired from the Miami area. No employees ever travel to Texas. Gonzalez stated
that C323 has no leases or loans from Texas companies, but the school’s rent is paid
from a checking account at a Texas bank. He admitted that Turnage, Riser, and
Pollak all were his direct superiors and he reported to all three of them, but he stated
that he does not know “the ranking of the partners” in the company. Gonzalez stated
that he reported anything concerning compliance or finances to Riser in Maryland,
and anything concerning education to Turnage in Texas. Gonzalez stated that he
does not know how often Turnage, Pollak, or Riser visited the school, but that when
they do come to town, “they don’t like really perform any type of businesses like—
it’s more like a social visit when they come down to Miami.”

      In its reply, C323 also relied on excerpts from Gonzalez’s deposition.
Gonzalez stated that after he was hired, he spoke with Turnage only about once a
month. He attested that his wages from C323 were paid from a Florida bank account
and that the company’s accountants are in Rhode Island. He explained that although

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he reported matters concerning education to Turnage, Turnage was not “in charge”
of education, but only made suggestions. According to Gonzalez, educational
decisions were made by Gonzalez and “the education leader in the school.” He
testified that C323 “had to be in compliance with the Department of Education” and
that Turnage had spoken to the Department on C323’s behalf, but so too did Riser
and Pollak.

      On this record, there is some evidence to support the trial court’s implied
finding that C323’s nerve center is not in Texas. The company purchased Florida
assets and negotiated the purchase in Florida. Its only business is the operation of
Florida school, and all educational decisions are made in Florida. All of the
company’s employees are in Florida, and although no employees travel to Texas, the
company’s managers travel to Florida. The company’s manager-members make
some decisions in Texas, but they also make decisions in North Carolina and
Maryland; thus, the trial court reasonably could find that the company’s “principal
place of business” is not in any one of those three states.

                           VI. ASCENTIUM’S ARGUMENTS

      According to Ascentium, the company’s public filings identifying Texas as
its principal address and principal place of business should be dispositive, or nearly
so. But, as C323 has pointed out, the United States Supreme Court has rejected the
suggestion that “the mere filing of a form” is itself sufficient to establish a location
as the company’s nerve center. Hertz, 559 U.S. at 97. A company’s principal place
of business in not the place that is denominated its “headquarters,” but the place that
is “the actual center of direction, control, and coordination.” Id. at 93 (emphasis
added). A form’s identification of a company’s principal place of business is some
evidence that it is, but to treat the form as dispositive “would readily permit
jurisdictional manipulation.” Id. at 97. We accordingly agree with C323 that the

                                           9
documents on which Ascentium relies are insufficient to establish that Texas is the
company’s principal place of business.

      Ascentium additionally argues that the “undisputed facts” dictate the
conclusion that C323’s principal place of business is in Texas. But, Ascentium relies
on only some of the facts and on the undue weight it erroneously attaches to C323’s
public filings. For example, Ascentium points out that C323 pays its rent from a
Texas bank account, but Ascentium ignores that C323 pays its employees from a
Florida bank account. Ascentium asserts that Gonzalez answers to Turnage, but
when asked if any of C323’s manager-members was his direct superior, Gonzalez
answered, “Definitely, I reported to all three of them.” Ascentium says that Turnage
communicates directly with the Department of Education and has authority to bind
the company, but Gonzalez testified that the same is true of Riser and Pollak.
Ascentium also points out that Turnage is listed as the company’s CEO; his office is
listed as the company’s principal place of business; and Turnage’s office was the
company’s only place of business before it purchased Hi-Tech’s assets. But, as
discussed, the public filings are not dispositive, and according to Gonzalez, all three
managers direct the company. That Texas was once the company’s only place of
business is entitled to little weight because the company’s principal place of business
is determined as of the time suit is filed. See, e.g., Perkins v. Benguet Consol. Mining
Co., 342 U.S. 437, 447–48 (1952).

      Ascentium also advances several arguments based on C323’s contacts with
Turnage, who lives and works in Texas, but minimum-contacts analysis requires a
court to analyze a defendant’s contacts with Texas, not its contacts with Texas
residents. See Walden v. Fiore, 571 U.S. 277, 285 (2014). For example, Ascentium
states that Turnage formed the company; however, Turnage chose to form a Florida
company. See Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 808

                                          10
(Tex. 2002) (company may “structure its affairs in a manner calculated to shield it
from the general jurisdiction of the courts of other states such as Texas” (quoting
Bearry v. Beech Aircraft Corp., 818 F.2d 370, 375–76 (5th Cir. 1987))). Ascentium
notes that Turnage negotiated and executed C323’s purchase of assets, but it is
undisputed that Turnage negotiated in Florida for the purchase of Florida assets,
which then remained in Florida. Ascentium also cites Gonzalez’s testimony that
Turnage interviewed Gonzalez, but Gonzalez testified that Turnage interviewed him
in Florida, where all of C323’s potential employees are interviewed.

      Although the evidence of C323’s principal place of business is conflicting,
the evidence suffices to support the trial court’s implied finding that the company’s
principal place of business is not in Texas. We overrule Ascentium’s third and fourth
issues.

                                 VII. CONCLUSION

      A limited liability company is subject to general jurisdiction in the state in
which its “nerve center” is located. Because some evidence reasonably supports the
trial court’s implied finding that C323’s principal place of business is not in Texas,
the trial court did not abuse its discretion in granting the company’s special
appearance and dismissing the claims against the company. See TV Azteca, 490
S.W.3d at 36 n.4. We accordingly affirm the trial court’s judgment.




                                       /s/    Tracy Christopher
                                              Justice


Panel consists of Chief Justice Frost and Justices Christopher and Jamison.

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