         TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                                        444444444444444
                                        NO. 03-01-00204-CV
                                        444444444444444


                                     Stefano Pessina, Appellant

                                                   v.

         Joe S. Rosson; Elizabeth G. Rosson; Ghent W. Rosson; Todd A. Rosson; and
                           Trevor J. Rosson, Individually, Appellees


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   FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
        NO. GNO-01419, HONORABLE PETER LOWRY, JUDGE PRESIDING
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                Appellant Stefano Pessina brings this appeal from the district court’s denial of his

special appearance. Pessina contends the district court erred by (1) denying his special appearance,

(2) holding Texas has specific jurisdiction over him, (3) determining that the exercise of personal

jurisdiction would not offend traditional notions of fair play and substantial justice, and (4) failing to

hold that the fiduciary shield doctrine applied to Pessina’s acts.1 We will affirm the district court’s

order.



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           Pessina presents his argument that the district court erred by failing to apply the fiduciary
shield doctrine in two parts. The first of these is framed as requiring a purely legal determination:
“Did the district court err in holding that the fiduciary shield doctrine does not apply to an individual
whose only acts within Texas, performed solely as a corporate representative, establish personal
jurisdiction over the corporate representative individually?” Because we find no place in the record
in which the district court made such a holding, and because both the district court’s letter order and
formal order address the facts of this case specifically, we limit our discussion of the fiduciary shield
doctrine to the facts of this case. See Tex. R. App. P. 38.1(h).
                                          BACKGROUND

               Pessina, a resident of Monaco and citizen of Italy, represented Alliance Unichem

(“Alliance”), an English corporation, in investment negotiations with Rx.com, an Austin corporation

formerly owned and controlled by the Rossons. Pessina traveled to Texas five times within a span

of two years to meet with Joe Rosson concerning business dealings between Alliance and Rx.com.

Rosson alleges that, as a result of those meetings and certain assurances made by Pessina, Rosson

entered into a course of dealings ultimately culminating in Rx.com’s insolvency. Alliance assumed

ownership of Rx.com as a result of its creditor status with the company. The Rossons initially

brought suit against Alliance and other corporate defendants and later amended their pleadings to

include Pessina individually. Pessina filed a special appearance, which the district court denied.

Pessina now brings this interlocutory appeal.


                                           DISCUSSION

Specific Jurisdiction

                In his first two issues, Pessina argues the district court erred by denying his special

appearance and by holding Texas has personal jurisdiction over him. Generally, the standard of

review for a district court’s denial of a special appearance is a factual sufficiency review. See, e.g.,

Minucci v. Sogevalor, 14 S.W.3d 790, 794 (Tex. App.—Houston [1st Dist.] 2000, no pet.); Cadle

v. Graubart, 990 S.W.2d 469, 470 (Tex. App.—Beaumont 1999, no pet.). However, “[w]here . .

. the special appearance is based on undisputed or otherwise established facts, an appellate court

should conduct a de novo review of the trial court’s order.” Brown v. Gen. Brick Sales Co., Inc., 39

S.W.3d 291, 294 (Tex. App.—Fort Worth 2001, no pet. h.); see also Daimler-Benz

                                                   2
Aktiengesellschaft v. Olson, 21 S.W.3d 707, 715 (Tex. App.—Austin 2000, pet. dism’d w.o.j.). In

his reply brief and at oral argument, Pessina contends the facts underlying the jurisdictional inquiry

are undisputed:


       A concession made by the Rossons’ counsel at the hearing below removed the only
       factual controversy from the personal jurisdiction calculus, leaving for the decision the
       application of controlling law to the undisputed facts. Specifically, the Rossons’
       attorney told the district court it did not have to resolve any factual conflict as to
       whether Mr. Pessina stood to benefit personally from any of the activity that the
       Rossons claim forms the basis of personal jurisdiction.


To support his argument that there are no disputed facts, Pessina points to the following statement

made by the Rossons’ attorney during the special appearance hearing:


       I think we’re going to have a real argument about the personal gain of Mr. Pessina
       versus Mr. Rosson, about whether they were trying to make a personal profit separate
       and apart from the corporation. We’re not going to agree on that, but that’s
       irrelevant.


               We do not agree with Pessina that this statement by the Rossons’ attorney renders this

dispute purely legal; a factual dispute still exists as to whether Mr. Pessina acted in a personal or

representative capacity during some of his negotiations with Mr. Rosson. Therefore, we will review

the district court’s denial of his special appearance under a factual sufficiency review. See Cadle, 990

S.W.2d at 471.

                We note that the Rossons do not have the burden to establish facts to support the

exercise of jurisdiction over Pessina; it is Pessina who has the burden of negating all bases of

jurisdiction. See id. To prevail in a special appearance, a nonresident must negate all bases of



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personal jurisdiction. Id. at 470. When a trial court overrules a special appearance, the defendant

should request findings of fact under Texas Rule of Civil Procedure 296. Daimler-Benz, 21 S.W.3d

at 715. Because the trial court made no findings in this case, we must imply all facts necessary to

support the ruling. Id.

               A Texas court may exercise jurisdiction over a nonresident defendant if the Texas

long-arm statute authorizes the exercise of jurisdiction and the exercise of jurisdiction comports with

due process. Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d

223, 226 (Tex. 1991); see also Tex. Civ. Prac. & Rem. Code Ann. § 17.042 (West 1997 & Supp.

2001). The broad language of the long-arm statute permits an expansive reach, limited only by the

federal constitutional requirements of due process. Schlobohm v. Schapiro, 784 S.W.2d 355, 357

(Tex. 1990). As a result, we consider only whether it is consistent with federal due process for the

Texas courts to assert personal jurisdiction over Pessina. See Daimler-Benz, 21 S.W.3d at 714.

               The federal due process clause protects a nonresident’s liberty interest in not being

subject to the jurisdiction of a forum with which that nonresident has established no meaningful

contacts, ties, or relations. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985). Under

the federal due process clause, a state may assert personal jurisdiction over a nonresident defendant

only if the defendant has purposefully established minimum contacts with the forum state and the

exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Id. at

476. The touchstone of minimum contacts is whether the nonresident defendant has purposefully

availed itself of the privilege of conducting activities in Texas so that it is reasonable for the

nonresident defendant to expect the call of a Texas court. Daimler-Benz, 21 S.W.3d at 714.



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                The minimum contacts analysis has been refined into two types of jurisdiction—

general and specific. Id. The parties stipulate that general jurisdiction is not at issue, and that this

appeal is limited to whether Texas has specific jurisdiction over Pessina. Specific jurisdiction exists

when the cause of action arises out of or relates to the nonresident’s contacts with the forum state.

Id. The defendant’s activities must have been purposefully directed toward the forum state. Id.

Under specific jurisdiction, the minimum contacts analysis focuses on the relationship among the

defendant, the forum, and the litigation. Id. (citing Guardian Royal, 815 S.W.2d at 228).

                In their fourth amended petition, the Rossons allege that Pessina caused and exploited

Rx.com’s financial crisis and oppressed its shareholders:


        44. Pessina encouraged Rx.com to privately place Rx.com equity needed to fund its
            operations. Pessina further demanded, as a condition to the Security Purchase
            Agreement for the purchase of the Convertible Note, that Rx.com accelerate its
            expansion and marketing plans. Pessina explained that he would be able to
            obtain additional capital for Rx.com before Rx.com spent its present cash in the
            accelerated development efforts. Based upon Pessina’s representations and
            requests, Rx.com agreed to accelerate the development plans of Rx.com. This
            accelerated development led directly to the cash crisis at Rx.com which Alliance
            Pessina [sic] exploited to steal Rx.com’s technology and the value of the
            Plaintiff’s stock at Rx.com. The meeting between Plaintiff Rosson and Rx.com
            was held in the offices of Rx.com in Austin, Texas.

        45. Mr. Pessina traveled to Austin in April 2000 to negotiate the term sheet under
            which Plaintiffs agreed to resign their management positions at Rx.com. Indeed,
            Mr. Pessina was the individual who insisted that Plaintiffs leave their
            management positions. This exit became the vehicle which Alliance and Pessina
            used to oppress the Plaintiffs’ interest as shareholders.


These pleadings sufficiently allege that Pessina is subject to specific jurisdiction in Texas. Tex. R.

Civ. P. 45(d); Tex. Civ. Prac. & Rem. Code Ann § 17.042(2) (West 1997) (“[A] nonresident does



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business in this state if the nonresident commits a tort in whole or in part in this state.”). In support

of these allegations, the Rossons offered the affidavit of Mr. Rosson, which stated that Pessina acted

in his personal capacity by negotiating for a personal interest in a future business venture and offering

to invest personal funds to facilitate the Rossons’ withdrawal from Rx.com:


        8.   Moreover, Mr. Pessina did not act merely in his capacity as an officer of Alliance,
             he acted in his personal capacity as well. In December 1999, Mr. Pessina
             requested that I agree to restructure the pan-European Joint venture to include
             a personal interest for Mr. Pessina and for myself. In addition, in April 2000,
             during the negotiation of the term sheet in Austin, Texas, Mr. Pessina offered to
             invest his personal funds in another business venture of mine as compensation for
             the value of my and the other Plaintiffs’ Rx.com stock if it would facilitate my
             and the other Plaintiffs’ withdrawal from our management positions at Rx.com.


Based on the Rossons’ pleadings and affidavit, there is sufficient evidence to support the conclusion

that Pessina is subject to specific jurisdiction in Texas. See Tex. R. Civ. P. 120a(3). Accordingly,

the district court did not err in denying Pessina’s special appearance, and we overrule his first and

second issues.


Traditional Notions of Fair Play and Substantial Justice

                 In his third issue, Pessina argues that the trial court erred by determining that the

exercise of personal jurisdiction over him comports with traditional notions of fair play and substantial

justice. After a court finds the minimum contacts necessary to exercise personal jurisdiction over a

nonresident defendant, federal due process requires a determination of whether the exercise of that

jurisdiction comports with traditional notions of fair play and substantial justice. Guardian Royal,

815 S.W.2d at 228. In deciding this issue, we consider the following factors: (1) the burden on the



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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 judicial system’s interest in obtaining

the most efficient resolution of controversies, and (5) the shared interest of the several states in

furthering fundamental substantive social policies. Daimler-Benz, 21 S.W.3d at 725. “When the

defendant is a resident of another nation, the court must also consider the procedural and substantive

policies of other nations whose interests are affected by the assertion of jurisdiction by a state court

as well as the federal government’s interest in its foreign relations policies.” Id. at 725-26.

                Another court of appeals has observed that “[o]nly 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.” Minucci, 14 S.W.3d at 798-99.

Accordingly, it is necessary that Pessina “present a compelling case that the presence of some

consideration would render the assertion of jurisdiction unreasonable.” Id. at 798. Pessina

emphasizes that he resides in Monaco and is a citizen of Italy, has neither a business office nor

residence in Texas, has no registered agent for service in Texas, owns no real estate and pays no taxes

in Texas, has never been licensed to do business in Texas, does not maintain any bank accounts in

Texas, and does not conduct any business in Texas. The basis of his last claim, of course, is that he

has never conducted business in Texas in a personal capacity and therefore has not purposefully

availed himself of the benefits and protections of the laws of Texas.

                Pessina cites two cases holding that, although a nonresident defendant had minimum

contacts, the exercise of personal jurisdiction would not comport with notions of fair play and

substantial justice. See Guardian Royal, 815 S.W.2d at 233; Minucci, 14 S.W.3d at 799. Guardian



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Royal involved a dispute between two insurers, neither of which was a Texas consumer or insured;

accordingly, the court held “Texas’ interest in adjudicating the dispute is considerably diminished.”

Guardian Royal, 815 S.W.2d at 233. Similarly, the First Court of Appeals explained why the exercise

of personal jurisdiction over Minucci, an Italian citizen, did not comport with notions of fair play and

substantial justice:


        Texas has no interest in adjudicating this dispute. The cause of action did not occur
        in Texas; neither party is a resident of this state; Swiss law governs the dispute, none
        of the investors were Texas citizens, and the contract was written in Italian. Thus,
        Texas would not be protecting its citizens from the potential future actions of
        Minucci.


Minucci, 14 S.W.3d at 798.

                In the case at bar, however, Texas’ interest in adjudicating the dispute is significant:

Rx.com is a Texas corporation; the Rossons are residents of Texas; Pessina’s alleged tortious acts

occurred in Texas; and whether Pessina is liable will be determined according to Texas law. In this

case, “the interests of the forum state and the plaintiff will justify the severe burden placed upon the

nonresident defendant.” Guardian Royal, 815 S.W.2d at 232. Furthermore, Pessina does not

contend that the procedural and substantive policies of other nations or the federal government’s

foreign relations policies will be affected by the exercise of personal jurisdiction over him. Therefore,

we overrule Pessina’s third issue.


The Fiduciary Shield Doctrine

                In his final issue, Pessina argues the district court erred in failing to apply the fiduciary

shield doctrine to his acts, rendering him individually amenable to suit in Texas. The fiduciary shield

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doctrine is a theory of liability that has been applied in a jurisdictional context. See Siskind v. Villa

Found. for Educ., Inc., 642 S.W.2d 434, 437-38 (Tex. 1982) (speaking in terms of “alter ego”). The

doctrine shields a nonresident defendant from suit in a forum state when his or her only contacts with

that state are in a representative capacity. See Cadle, 990 S.W.2d at 473. The parties agree that this

doctrine has been used to shield a nonresident defendant from suit based on general jurisdiction, but

there is some disagreement about whether it applies in a specific jurisdiction context.

                The Rossons’ pleadings specifically allege that Pessina caused and exploited Rx.com’s

financial crisis and oppressed its shareholders. In addition, Mr. Rosson’s affidavit asserts that Pessina

acted in his personal capacity by negotiating for a personal interest in a future business venture and

offering to invest personal funds to facilitate the Rossons’ withdrawal from Rx.com. This case is

therefore distinguishable from two of the main cases Pessina relies upon for the contention that he

is protected from personal jurisdiction by the fiduciary shield doctrine. See Siskind, 642 S.W.2d at

437-38 (emphasizing that plaintiff’s petition did not attribute specific acts of conspiracy or

misrepresentations to individual respondents); Cadle, 990 S.W.2d at 473 (noting that plaintiff’s

“allegations and evidence relevant to the tortious conduct are non-specific” and that the only evidence

presented by plaintiff in support of his argument that the court should have personal jurisdiction over

defendant is that he “was the president, sole shareholder, and sole director” of defendant company);

see also Calder v. Jones, 465 U.S. 783, 790 (1984) (“Petitioners are correct that their contacts with

[the forum state] are not to be judged according to their employer’s activities there. On the other

hand, their status as employees does not somehow insulate them from jurisdiction.”).




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                Because the Rossons attribute tortious conduct to Pessina individually as well as in

his representative capacity, the district court did not err in failing to apply the fiduciary shield

doctrine. Accordingly, we overrule Pessina’s final issue.


                                         CONCLUSION

                We overrule all of Pessina’s complaints on appeal. We therefore affirm the judgment

of the district court.




                                              Marilyn Aboussie, Chief Justice

Before Chief Justice Aboussie, Justices B. A. Smith and Puryear

Affirmed

Filed: November 15, 2001

Publish




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