ACCEPTED 03-15-00335-CV 6286512 THIRD COURT OF APPEALS AUSTIN, TEXAS 7/30/2015 9:54:05 AM JEFFREY D. KYLE CLERK NO. 03-15-00335-CV FILED IN IN THE THIRD COURT OF APPEALS 3rd COURT OF APPEALS ____________________________________________ AUSTIN, TEXAS 7/30/2015 9:54:05 AM JEFFREY D. KYLE HERBERT ROLNICK Clerk

v.

SIGHT’S MY LINE, INC, et al ____________________________________________ Accelerated Appeal from the 200th District Court Travis County, Texas Brief of Appellee Riggs, Aleshire & Ray, P.C. ______________________________________________

KIDD LAW FIRM West 11th Street Austin, TX 78701 512-330-1709 (fax) Scott R. Kidd State Bar No. 11385500 512-330-1713 [email protected] Scott V. Kidd State Bar No. 24065556 512-542-9895 [email protected]

TABLE OF CONTENTS Table of Contents i Index of Authorities ii Caption 1 Statement of Facts 1 Summary of Argument 7 Argument & Authorities 8 Standard of Review 8 No Error In Denial Of Unsworn Special Appearance 9 Rolnick’s Contacts Meet The “Minimum Contacts” Test For Jurisdiction in Texas 12 Analysis Of The Jurisdictional Facts 15 Fair Play And Substantial Justice 22 Conclusion 25 Prayer 26 Certificate of Compliance 26 Certificate of Service 27

i

INDEX OF AUTHORITIES

Cases

Abilene Diagnostic Clinic, PLLC v. Paley, Rothman,

Goldstein, Rosenberg, Eig & Cooper, Chartered,

364 S.W.3d 359 (Tex. App.—Eastland 2012, no pet.)

Ahrens & DeAngeli v. Flinn, 318 S.W.3d 474 (Tex.App.—

Dallas 2010, pet. denied)

Am.

Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801 (Tex. 2002)

BMC Software Belgium, N.V. v. Marchand,

83 S.W.3d 789 (Tex. 2002)

8, 9,

Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985)

22,

Casino Magic Corp. v. King, 43 S.W.3d 14 (Tex. App.—

Dallas 2001, pet. denied)

10,

CSR Ltd v. Link, 925 S.W.2d 591 (Tex. 1996)

Guardian Royal Exch.

Assurance, Ltd v. English

China Clays, P.L.C., 815 S.W.2d 223 (Tex. 1991)

15,

Kelly v. Gen. Interior Construction, Inc.,

301 S.W.3d 653 (Tex. 2010)

12,

Kytel International Group, Inc. v. Rent-­‐A-­‐Center, Inc.,

132 S.W.3d 717 (Tex. App.—Dallas 2004, no pet.)

Markette v. X-­‐Ray X-­‐Press Corp., 240 S.W.3d 464

Tex. App.—Houston[14th Dist.]

2007, no pet.)

Michiana Easy Livin’ Country, Inc. v. Holten,

168 S.W.3d 777 (Tex. 2005)

14, 15, 19,

ii

Moki Mac River Expeditions v. Drugg,

221 S.W.3d 569 (Tex. 2007)

12, 13,

Moncrief Oil International, Inc. v. OAO Gazprom,

414 S.W.3d 142 (Tex. 2013)

13,

Proskauer Rose LLP v. Pelican Trading, Inc.,

2009 WL 242993 (Tex. App.—Houston [14th Dist.]

2009)

20,

Prosperous Maritime Corp. v. Farwah, 189 S.W.3d 389

(Tex. App.—Beaumont 2006, no pet.)

10,

Retamco Operating, Inc. v. Republic Drilling,

278 S.W.3d 333 (Tex. 2009)

Siemens AG v. Houston Casualty Company,

127 S.W.3d 436 (Tex. App.—Dallas 2004, no pet.)

Villapando v. De La Garza, 793 S.W.2d 274

(Tex. App.—Corpus Christi 1990, no writ)

York v. State, 73 Tex. 651, 11 S.W. 869 (1889),

aff’d 137 U.S. 15, 11 S.Ct. 869 (1889)

Statutes and Rules

TEX. CIV. PRAC. & REM.

CODE §17.41

TEX. R. CIV. P. 120a

iii

NO. 03-15-00335-CV IN THE THIRD COURT OF APPEALS ____________________________________________ HERBERT ROLNICK

v.

SIGHT’S MY LINE, INC, et al ____________________________________________ Accelerated Appeal from the 200th District Court Travis County, Texas Brief of Appellee Riggs, Aleshire & Ray ______________________________________________

Comes now Appellee Riggs, Aleshire & Ray and files this

Appellee’s Brief.

STATEMENT OF FACTS

Appellant’s Statement of Facts includes many characterizations of

the facts and omits certain important evidence.

Accordingly, Appellee

Riggs, Aleshire & Ray offers its own Statement of Facts.

Sight’s My Line, Inc., (“SML”) is a Florida corporation that was

engaged in the retail optical business in Texas. (CR 389, 390).

SML had

locations in several South Texas cities, and it did business only in Texas.

(CR 390, 514).

The sole stockholder of SML was Stewart Lantz

(“Lantz”), a resident of Florida.

(CR 391)

Herbert Rolnick (“Rolnick”) is a lawyer living in Coral Gables,

Florida. (CR 502).

He has represented Lantz and entities in which Lantz

has been involved for over twenty years. (CR 382).

Rolnick represented

Lantz in the formation of SML.

(CR 390, 503).

In 2009, SML came under investigation by the Texas Health &

Human Services Commission related to a possible overcharge claim.

(CR 389, 548).

To represent SML in that investigation, Lantz retained

Jason Ray (“Ray”), a member of Riggs, Aleshire & Ray (“RAR”).

(CR 548).

Ray is Board Certified in Administrative Law by the Texas Board of

Legal Specialization. (CR 548).

Lantz had engaged in some initial negotiations with American

Optical Services (“AOS”) about a potential sale of the assets of SML to

AOS, but those negotiations had not progressed and Lantz had

abandoned the process. (CR 503-­‐504).

However, in June 2012, Lantz

decided that he should again pursue sale of the SML business due to his

perception of the regulatory climate related to the business. (CR 382).

Negotiations with AOS began again. (CR 504).

AOS is a Delaware Corporation with its principal place of business

in Nevada.

The parties did negotiate a contract for sale of the assets of

SML to AOS, and that contract was dated October 5, 2012.

Rolnick

represented SML in the negotiations and sale for a flat fee of between

$40,000.00 and $50,000.00. (CR 394, 514).

The negotiations for the sale

were all handled by Rolnick. (CR 391, 505, 559).

On or about October 1, 2012, Lantz and Rolnick telephoned Ray.

(CR 384, 391, 505, 549-­‐550).

They explained to Ray that Lantz had

contracted to sell the assets of SML, and they wanted a Texas lawyer to

review some of the documents. (CR 549).

There is a dispute in the

evidence concerning whether Ray informed Lantz and Rolnick that Ray

did not feel qualified to review documents related to an asset sale.

Ray

testified that he did inform them of that fact and indicated that he did

not want to undertake the review. (CR 549,551) According to Ray’s

testimony, Lantz and Rolnick stated that they wanted him involved in

the transaction anyway. (CR 549).

According to Lantz and Rolnick, they

were not informed of any limitations on Ray’s ability to review the

documents. (CR 385, 506).

Ray also testified that he informed Lantz and

Rolnick that he would have another lawyer, Paul Browder, an attorney

with Blazier, Christensen, Bigelow & Virr (“BCBV”), review the

documents-­‐-­‐testimony that Lantz and Rolnick dispute. (CR 549).

Ray had one more conversation with Rolnick shortly after the

initial conversation with Lantz and Rolnick.

Ray then received an email

from Rolnick’s legal assistant with instructions as to what Rolnick

wanted Ray to do. (CR 506-­‐507, 552).

“Mr. Rolnick is out of the country this week, however, pursuant to your previous conversation with him, he asked that I forward you a copy of the Security Agreement and Promissory Note (which are attached to this email).

Also attached you will find a copy of the fully executed copy of the Agreement so you have some understanding of the transaction.

Mr. Rolnick would like you to review the Security Agreement and Promissory Note and confirm that these are acceptable for Texas law, i.e. that they can be recorded and that they would enable us to foreclose in the event of a default.” (CR 424)

Ray received the executed contract, draft security agreement, and draft

promissory note.

Ray then forwarded those documents to Browder for

his review. (CR 550).

Browder made comments and raised questions

with regard to the documents. (CR 550).

Ray then took those comments

and questions, incorporated them into an email, and forwarded them to

Rolnick.

(CR 550).

Among the provisions of the promissory note was a reference that

the security interest would be recorded in Delaware.

The specific

language in the promissory note stated “Holder may file a Form UCC-­‐1

with the Secretary of State of the State of Delaware to perfect such lien

of record.” (CR 486).

Contrary to the assertion by Appellant in his

Statement of Facts that “comments by Ray sent back to Rolnick in

Florida, however, included one indicating the UCC-­‐1 instead should be

filed in Texas where the assets at issue were located,” what Browder

actually raised, and what was passed on in Ray’s email, was a question.

The actual question that was raised was as follows:

“Where will the assets be held?

Texas, right?

Shouldn’t the UCC-­‐1 be filed where the assets are located?”

Rolnick never contacted Ray to resolve those questions. (CR 508, 553)

Rolnick proceeded to close the transaction on November 1, 2012, and

Ray had no knowledge of or participation in the drafting of the final

documents or the closing. (CR 508-­‐510, 560).

The next time Ray had any participation in the transaction at all

(or even knew that it had closed) was when he was contacted by Rolnick

with a direction to record the UCC-­‐1 in Texas approximately two

months after the transaction had closed. (CR 555-­‐556, 560, 562).

Ray at

first declined because he did not know procedurally how to do so. (CR

562).

Rolnick prevailed on Ray to do so for him since Ray was in Austin.

(CR 562).

Rolnick sent the UCC-­‐1 to Ray, and Ray forwarded it to

Browder for recordation at the office of the Secretary of State.

(CR 558).

Ray had no further contact with Lantz or Rolnick until over a year

later when he was contacted about AOS’s default. (CR 560).

Rolnick

contacted him about pursuing litigation to foreclose on the assets. (CR

560).

Again, that was not Ray’s area of practice, and SML was referred

to Adams & Graham (“A&G”) to pursue the litigation.

(CR 387).

SML filed suit against AOS on the debt and to foreclose on the

security, to the extent the collateral still existed.

At that time, AOS’s

parent company, MacEyser Holdings, filed for bankruptcy protection in

Delaware.

SML filed a motion to lift stay in the bankruptcy proceeding.

That motion was denied on the basis that SML had not perfected its

security interest by recording the UCC-­‐1 in Delaware.

In light of that

ruling, Lantz contacted Rolnick and Ray concerning the issue of

perfection of the security interest. (CR 512).

At that time, Rolnick was

successful in diverting Lantz’s attention from him to Ray. (CR 512-­‐513).

SML and Lantz then filed suit in Travis County District Court

against RAR, BCBV, and A&G. (CR 3).

RAR immediately joined Rolnick as

a third-­‐party defendant, and plaintiffs then amended their pleadings to

add Rolnick as a defendant. (CR 17, 137).

In answer to both RAR’s third-­‐

party petition and plaintiffs’ First Amended Original Petition, Rolnick

filed unsworn special appearances. (CR 23, 147).

Rolnick’s special

appearance was heard and overruled by the trial court. (CR 697).

SUMMARY OF ARGUMENT

The requirements for filing a special appearance are stated in

Rule 120a, Texas Rules of Civil Procedure.

Strict compliance with the

rule is required.

Rule 120a requires that the special appearance be

made by sworn motion.

The special appearances filed by Rolnick were

not sworn, and therefore were not in compliance with Rule 120a.

The

trial court does not commit error in overruling an unsworn special

appearance.

Jurisdiction of nonresident defendants is determined based on

whether the defendant has sufficient minimum contacts with Texas to

support jurisdiction under the Texas Long-­‐Arm Statute.

Those

minimum contacts exist if the nonresident defendant has availed

himself of the privilege of conducting activities in Texas.

The contact

with Texas must have been purposeful, and the defendant must have

sought some benefit from the contact.

In addition, the assertion of such

jurisdiction must comport with traditional notions of fair play and

substantial justice.

SML’s business was entirely a Texas operation.

All of its business

activity was in Texas, and all of its assets (including its real estate

interests) were in Texas.

When SML sold its assets, Rolnick negotiated

the contract and closed the transaction.

He had Jason Ray review the

promissory note and security agreement, but all decisions about

perfection of the security interest were made by Rolnick.

Rolnick made

the decision to record the UCC-­‐1 in Texas, and Rolnick sent it to Ray

with instructions to record it in Texas.

When SML’s purchaser sought

bankruptcy protection it was discovered that Rolnick had recorded the

UCC-­‐1 in the wrong state to properly perfect that interest.

Since the suit

by SML and its owner is over the failure to properly perfect that security

interest, Rolnick has sufficient contacts with Texas to be subject to the

jurisdiction of the Texas courts.

ARGUMENT & AUTHORITIES

Standard of Review

Whether a trial court has personal jurisdiction over a defendant is

a matter of law and is reviewed de novo.

BMC Software Belgium, N.V. v.

Marchand, 83 S.W.3d 789, 794 (Tex. 2002).

If the trial court does not

issue findings of fact and conclusions of law, all facts necessary to

support the judgment and supported by the evidence are implied.

BMC

at 795.

No Error In Denial of Unsworn Special Appearance

Rule 120a was adopted to address the issue presented by York v.

State, 73 Tex. 651, 11 S.W. 869 (1889), aff’d 137 U.S. 15, 11 S.Ct. 869

(1889).

The court in York held that any appearance, even one to

challenge service or jurisdiction, constituted a general appearance.

This

resulted in there being no direct way that a nonresident defendant

could challenge the court’s jurisdiction over that defendant.

That

continued to be the law in Texas until the Supreme Court of Texas

adopted Rule 120a in 1962.

Rule 120a provided a vehicle for a

defendant to challenge the court’s in personam jurisdiction without the

challenge itself constituting a general appearance.

Rule 120a provides specific requirements to which the special

appearance must conform.

These requirements include, among others,

that the “special appearance shall be made by sworn motion filed prior

to motion to transfer venue or any other plea, pleading, or motion….”

The motion must be heard before a motion to transfer venue or any

other plea or pleading.

RAR was an original defendant in the Plaintiffs’ Original Petition.

(CR 3).

Upon filing its original answer, Herbert Rolnick was

immediately added as a third-­‐party defendant by RAR. (CR 17).

Rolnick

filed a special appearance to the third-­‐party petition filed by RAR, and

the plaintiffs then amended and added Rolnick as an additional

defendant. (CR 137).

Rolnick again filed a special appearance as to the

plaintiff’s First Amended Original Petition. (CR 147).

Neither of the

special appearances filed by Rolnick were sworn as required by Rule

120a.

Rolnick did file two nearly identical affidavits in conjunction with

the special appearances he filed.

However, in those affidavits Rolnick

swears to the facts stated in the affidavits but does not swear to the

facts stated in the special appearances he filed.

(CR 35, 159).

Strict compliance with the rule governing special appearances is

required.

Casino Magic Corp. v. King, 43 S.W.3d 14 (Tex. App.—Dallas

2001, pet. denied).

A trial court does not commit error in denying an

unsworn special appearance.

Casino Magic Corp at 18; Villapando v. De

La Garza, 793 S.W.2d 274, 276 (Tex. App.—Corpus Christi 1990, no

writ); Prosperous Maritime Corp. v. Farwah, 189 S.W.3d 389, 392 (Tex.

App.—Beaumont 2006, no pet.).

When the affidavits attached to the

special appearance pleadings do not state that the facts set out in the

pleadings are true and correct, but instead state only that the facts in

the affidavits are true and correct, the affidavits do not verify the special

appearance.

Prosperous Maritime at 393-­‐394; Casino Magic at 18.

The

courts have routinely upheld the denial of a special appearance on the

basis that the nonresident failed to file a sworn motion.

See Kytel

International Group, Inc. v. Rent-­‐A-­‐Center, Inc., 132 S.W.3d 717, 719 (Tex.

App.—Dallas 2004, no pet.); Siemens AG v. Houston Casualty Company,

127 S.W.3d 436, 439 (Tex. App.—Dallas 2004, no pet.).

Rolnick did not file a sworn motion as required by Rule 120a.

(CR

23, 147).

While Rolnick did file affidavits in support of his motion, all

that the affidavits did was swear to the facts stated in the affidavits. (CR

35, 159).

Rolnick’s affidavits did not swear to the facts stated in his

special appearance.

Rolnick’s special appearance was not in compliance

with the Rule, and therefore the trial court did not commit any error in

denying the special appearance.

Rolnick’s Contacts Meet the “Minimum Contacts” Test

for Jurisdiction in Texas

Jurisdiction over nonresident defendants is governed by the Texas

Long-­‐Arm Statute, TEX. CIV. PRAC. & REM.

CODE §17.41 et seq.

The

extent of the jurisdictional grant in the Texas Long-­‐Arm Statute is to the

fullest extent permitted by the federal constitutional requirements of

due process.

Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575

(Tex. 2007).

A Texas court may exercise personal jurisdiction over a

nonresident defendant only if the requirements of both the due process

clause of the Fourteenth Amendment to the United States Constitution

and the Texas Long-­‐Arm Statute are satisfied.

CSR Ltd. v. Link, 925 S.W.2d 591, 594 (Tex. 1996).

The assertion of jurisdiction over a

nonresident is proper and consistent with due process when the

nonresident defendant has established minimum contacts with the

forum state and the exercise of jurisdiction comports with traditional

notions of fair play and substantial justice.

Kelly v. Gen. Interior

Construction, Inc., 301 S.W.3d 653 (Tex. 2010).

The defendant has

established minimum contacts with the forum state when the defendant

has purposefully availed himself of the privilege of conducting activities

within the forum state, and has thus invoked the benefits and

protections of the forum state’s laws.

Retamco Operating, Inc. v.

Republic Drilling, 278 S.W.3d 333 (Tex. 2009); Moncrief Oil

International, Inc. v. OAO Gazprom, 414 S.W.3d 142 (Tex. 2013).

The plaintiff (and third-­‐party plaintiff) bears the initial burden of

pleading sufficient allegations to bring the nonresident defendant

within the provisions of the Texas long-­‐arm statute.

Moki Mac at 574;

BMC Software at 793.

Once the plaintiff satisfies this burden, the burden

shifts to the nonresident defendant to negate all bases for personal

jurisdiction alleged by the plaintiff.

Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010).

As noted in Retamco Operating, Inc, a nonresident’s contacts can

give rise to either specific jurisdiction or general jurisdiction.

Specific

jurisdiction exists when the defendant purposefully avails himself of

conducting activities in the forum state, and the cause of action arises

from or is related to those contacts or activities.

In a specific jurisdiction analysis, the court must focus on the

relationship between the defendant, the forum, and the litigation.

Moncrief Oil, 414 S.W.3d at 150.

There must be a substantial connection

between the defendant’s contacts with the forum and the operative facts

of the litigation itself.

Moki Mac, 221 S.W.3d at 585.

In the specific

jurisdiction analysis, the court must focus on only the defendant’s

contacts with the forum.

The defendant’s contacts must be purposeful

and not random, isolated, or fortuitous, and the defendant must seek

some benefit, advantage, or profit by availing himself of the jurisdiction.

Michiana Easy Livin’ Country, Inc. v. Holten, 168 S.W.3d 777, 785 (Tex.

2005).

The 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 haled into a Texas

court.

Am.

Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806

(Tex. 2002).

Jurisdiction is premised on the notions of implied consent

that, by invoking the benefits and protections of a forum’s laws, the

nonresident consents to suit there.

Michiana at 785.

It is the quality

and nature of the defendant’s contacts with the forum state, rather than

their number, that are important in analyzing minimum contacts.

Am.

Type Culture Collection at 806.

Specific jurisdiction is established if the defendant’s alleged

liability arises out of or is related to an activity conducted within the

forum state.

Moki Mac at 575-­‐576.

When specific jurisdiction is

asserted, the minimum-­‐contacts analysis focuses on the relationship

among the defendant, the forum, and the litigation.

Moncreif Oil at 150;

Guardian Royal Exch.

Assurance, Ltd v. English China Clays, P.L.C., 815 S.W.2d 223, 228 (Tex. 1991).

The focus is on the defendant’s conduct

and connections with the forum state in relation to the alleged liability.

Michiana at 788-­‐790.

Analysis Of The Jurisdictional Facts

Rolnick was the person in charge of negotiating and closing the

sale of SML’s assets. (CR 391, 392).

All of those assets were located in

Texas, including SML’s real property interests. (CR 390).

Ray’s

participation in the transaction was minimal—he was asked to review a

note and security agreement to see if they could be recorded in Texas

and if SML would be able to foreclose upon default.

Rolnick directed

what Ray was to do, and the limitations on Ray’s engagement.

Ray felt

that he had been engaged by Rolnick. (CR 556).

After forwarding comments and questions to Rolnick, Ray was not

contacted again by Rolnick to answer any of the questions that had been

raised about the documents. (CR 555-­‐556).

Instead, Rolnick made all of

the decisions about the sale of the Texas assets and closed the

transaction without Ray even being informed that the transaction had

closed.

Approximately two months after closing, Rolnick contacted Ray

and requested that Ray record the UCC-­‐1 for Rolnick in Texas. (CR 555-­‐ 556).

The UCC-­‐1 had been drafted or approved by Rolnick, and Ray had

never seen it.

At first resistant, Ray eventually agreed to record the

document for Rolnick with the Secretary of State. (CR 561).

The

decision to record it in Texas was Rolnick’s decision, and Ray was

merely performing a favor upon Rolnick’s request. (CR 393, 562).

It is

no different than if Rolnick had himself recorded the UCC-­‐l at the

Secretary of State.

None of this analysis focuses on the conduct of anyone but

Rolnick.

He negotiated the contract for the sale of Texas assets.

He

negotiated the sale of Texas real estate interests.

He decided how to

obtain the security interest in the Texas assets.

And most importantly,

Rolnick directed the recordation of the UCC-­‐1 in Texas.

The plaintiffs’ claims here are focused on their claimed losses

from the loss of those Texas assets.

Their complaints relate to their

claimed security interests in those assets, and their particular complaint

is that the recordation of that security interest in Texas was negligence.

Rolnick negotiated and closed the transaction, and he made all of the

decisions related to obtaining and protecting the plaintiffs’ security

interests.

Most specifically, Rolnick is the one who had the UCC-­‐1

recorded in Texas.

These are not fortuitous contacts with Texas.

Rolnick was

certainly aware where all of the assets, including the real property, were

located when he undertook the representation.

Rolnick made the

conscious decision to record the UCC-­‐1 in Texas, and he is the one who

sent it to Texas for filing.

That was certainly a purposeful contact, and

was not random, fortuitous, or attenuated.

These are only Rolnick’s

contacts with Texas, and this analysis does not consider any other

person’s contacts or activities.

Rolnick certainly sought to benefit from these contacts.

Not only

had he represented Lantz and his entities for a number of years, Rolnick

made a fee of over $40,000.00 for handling this Texas sale.

To say that

Rolnick did not seek or obtain any benefit from his contacts with Texas

(including the recordation of the UCC-­‐1) is to turn a blind eye to the

realities of the practice of law.

These contacts are directly related to the pending litigation.

The

plaintiffs’ claimed damages are the loss of the Texas assets that were to

serve as security.

The specific act about which the plaintiffs’ complain is

the recording of the UCC-­‐1 in Texas, an act specifically directed by

Rolnick.

Jurisdiction of Rolnick is obvious based on his conduct and

connections with Texas in relation to this alleged liability.

Appellant seems to argue that the conventional analysis of

personal jurisdiction that applies to all other defendants does not apply

to Rolnick solely because he is a lawyer.

According to the argument by

Appellant, there is a special “Lawyer Rule.”

Under that “rule” as

advanced by Appellant, as long as the nonresident lawyer sits in his

office in another State, he simply cannot be subject to jurisdiction in

Texas no matter how much he has contact with Texas and no matter

how much those contacts are the source of the Texas litigation.

That is

not and cannot be the law.

Lawyers do not get a free pass.

The cases cited by Appellant for

his odd argument are all distinguishable on their facts.

In fact, each of

those cases analyzes the jurisdictional issues just as Appellee has done

in this brief.

In those cases, the court has analyzed the quality and

nature of the lawyer’s contacts with Texas.

In each of those cases, the

court has analyzed the connections with Texas in relation to the alleged

liability.

Those courts did not decide that simply because the lawyer

was not physically in Texas he could not be subject to jurisdiction in

Texas.

In Abilene Diagnostic Clinic, PLLC v. Paley, Rothman, Goldstein,

Rosenberg, Eig & Cooper, Chartered, 364 S.W.3d 359 (Tex. App.— Eastland 2012, no pet.), a Texas clinic sued a Maryland law firm for

alleged malpractice in the preparation of a defined benefit plan.

The

claim of specific jurisdiction in that case was that all of the defendants

“purposefully availed themselves of the benefits of Texas law by doing

business with a Texas entity.”

In sum, what the defendant had done is

prepare several defined benefit plans in Maryland and send them to the

plaintiff in Texas.

As the court noted, this is the “direct-­‐a-­‐tort”

jurisdictional theory that was rejected in Michiana.

The court held that

to determine specific jurisdiction, the court had to focus on whether

there was a substantial connection between the defendant’s purposeful

contacts with the forum state and the operative facts of the litigation.

The court noted that Texas authority had focused on where the legal

work was performed, but the jurisdictional analysis on which the court

determined the case was the traditional analysis of specific jurisdiction.

In Ahrens & DeAngeli v. Flinn, 318 S.W.3d 474 (Tex. App.—Dallas

2010, pet. denied), a Washington and Idaho law firm was sued, along

with others, for promoting an abusive tax shelter.

The law firm had

provided representation to one of the other defendants in the

developing and marketing of the tax shelter.

However, the legal work

had all been performed in Washington or Idaho, and only

communicated to a codefendant in Texas.

The court utilized the

traditional analysis in determining that there were not sufficient

contacts with Texas to support personal jurisdiction.

Performing legal

work in one state and merely communicating with persons in another

state is not enough in itself to support jurisdiction.

However, in the

present case, Rolnick actually took action in Texas with regard to

perfecting the security interest in the collateral, and that is at the core of

plaintiffs’ claims in this case.

Proskauer Rose LLP v. Pelican Trading, Inc., 2009 WL 242993 (Tex.

App.—Houston [14th Dist.]

2009, no pet.) also involved an abusive tax

shelter.

The plaintiffs had been introduced to the concept of the tax

shelter by their accounting firm.

The accounting firm had

recommended that the plaintiffs use Proskauer Rose to prepare and

deliver an opinion letter on the proposed tax shelter.

Proskauer Rose

prepared drafts of the opinion letter, communicated with the plaintiffs

(Texas residents) and ultimately prepared the opinion letter and sent it

to the Texas residents.

However, all of Proskauer Rose’s work was in

New York.

Again, the court conducted a traditional specific

jurisdictional analysis.

Routine correspondence from the out-­‐of-­‐state

lawyer is not the kind of purposeful contacts that support personal

jurisdiction, and the sending of the opinion letter to Texas could not

support jurisdiction as “directing a tort to Texas” under the holding in

Michiana.

The present case differs markedly from the facts in Proskauer

Rose.

In the present case, Rolnick’s filing of the UCC-­‐1 in Texas is the

basis on which the plaintiffs claim liability.

Markette v. X-­‐Ray X-­‐Press Corp., 240 S.W.3d 464 (Tex. App.— Houston [14th Dist.]

2007, no pet.) involved an Indiana attorney

representing a Texas resident in an Indiana lawsuit.

The client had

challenged the jurisdiction of the Indiana court, and that challenge had

been denied.

The attorney wrote the Texas client and reviewed the

three alternatives available to it, one of which was to allow a default

judgment in Indiana and challenge the Indiana court’s jurisdiction when

the plaintiff in the Indiana case sought to enforce the judgment in Texas.

The client adopted that strategy, and it ultimately proved unsuccessful.

When the client sued the Indiana lawyer for malpractice in Texas, the

court again applied a traditional specific jurisdiction analysis and

determined that it had to focus on the connection between the contacts

and the litigation, and it rejected the “direct-­‐a-­‐tort” theory.

The mere

sending of a letter from one jurisdiction to another, as in Proskauer,

differs markedly from the filing of a legal document such as a UCC-­‐1,

especially when the filing of that UCC-­‐1 is at the core of the litigation.

Under the controlling decisions by the Supreme Court of Texas

and the evidence in this record, Rolnick had sufficient minimum

contacts with Texas to subject him to jurisdiction in this case.

Accordingly, the District Court of Travis County has personal

jurisdiction of him, and the trial court correctly decided that the

minimum-­‐contacts requirements of the Texas Long-­‐Arm statute had

been satisfied.

Fair Play and Substantial Justice

Even if a defendant has the minimum contacts with Texas to

justify the assertion of jurisdiction under the long-­‐arm statute, the court

cannot exercise jurisdiction if doing so would offend traditional notions

of fair play and substantial justice.

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).

Only in “rare cases” will the exercise of

jurisdiction not comport with fair play and substantial justice when the

nonresident defendant has minimum contacts with the forum state.

Burger King at 471.

In determining whether the assertion of jurisdiction

comports with fair play and substantial justice, the court considers (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 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.

Royal Guardian at 232.

The burden on this particular defendant is certainly no greater

than that on any nonresident defendant who must defend himself in

another jurisdiction.

However, defending himself in Texas would not

put a significantly higher burden on Rolnick than defending himself in

Florida, although he would probably have to travel to Texas for the trial.

While the initial discovery in this case was limited to the issue of

jurisdiction, Rolnick has already been deposed and it may not be

necessary to depose him again.

Therefore, the added burden of

defending himself in Texas would be minimal, especially when

compared to the additional burden on the plaintiff and other defendants

in pursuing Rolnick in Florida in a separate case.

The interests of Texas in adjudicating the dispute certainly

outweigh the interests of any other state in adjudicating this dispute.

This dispute involves interests in Texas assets, including real property.

The dispute involves the application of Texas law, and the dispute

involves the adjudication of the liability of three Texas entities.

Since

Rolnick is the one largely (if not solely) responsible for any failure to

comply with the standard of care, Texas has a significant interest in

adjudicating the liability of all the parties in one suit.

The plaintiff can only get jurisdiction of RAR, BCBV, and A&G in

Texas.

While the plaintiffs are Florida residents, the plaintiffs must

litigate their claim against the Texas defendants in Texas.

It is certainly

more convenient for the plaintiffs to litigate one case against all of the

defendants in Texas than to litigate one case in Texas against three

Texas defendants and one case in Florida against one Florida defendant.

Additionally, RAR is the party who initially joined Rolnick in this

litigation.

It is certainly more convenient and effective for RAR to

litigate one case in Texas than to have to defend the case in Texas, and if

an adverse result is reached, pursue a separate case against Rolnick in

Florida.

For the interstate judicial system, the most efficient resolution of

this dispute is to dispose of it in one trial.

Since the Texas defendants

are only amenable to jurisdiction in Texas, the most efficient resolution

is to try one case in Texas against all defendants, including Rolnick,

rather than try one case in Texas and potentially multiple cases in

Florida.

It is the rare case indeed when asserting jurisdiction over a

nonresident offends the traditional notions of fair play and substantial

justice if the defendant has sufficient minimum contacts to support

jurisdiction.

This is not that rare case.

Rolnick has sufficient minimum

contacts with Texas to support the assertion of jurisdiction, and the

assertion of that jurisdiction does not offend traditional notions of fair

play and substantial justice.

CONCLUSION

The transaction out of which this case grows was a Texas

transaction involving Texas assets and Texas real property interests.

Rolnick was the person who negotiated the contract, prepared all of the

documents, closed the transaction, and determined to record the

security interest in Texas.

Rolnick’s contacts with Texas, especially in

the all-­‐important recording of the UCC-­‐1 in Texas, were not fortuitous

but rather were deliberate.

If recording the UCC-­‐1 in Texas, as Rolnick

did, is the basis of liability, then Rolnick certainly had minimum contacts

with Texas.

If the plaintiffs are going to assert that there was negligence

in the way the security interest was perfected by filing in Texas, then

Rolnick needs to answer for that act.

It is only fair and just that he be a

party to this proceeding.

PRAYER

Wherefore, Appellee Riggs, Aleshire & Ray prays that the court

affirm the order of the trial court denying Rolnick’s special appearance.

KIDD LAW FIRM West 11th Street Austin, TX 78701 512-330-1709 (fax) /s/Scott R. Kidd Scott R. Kidd State Bar No. 11385500 512-330-1713 [email protected] Scott V. Kidd State Bar No. 24065556 512-542-9895 [email protected] Certificate of Compliance This brief complies with the type-volume limitations of Texas Rule of Appellate Procedure 9.4. This brief was prepared using Microsoft Word for MAC, and exlusive of the exempted portions listed in Rule 9.4 contains 5157 words. /s/Scott R. Kidd

Certificate of Service A copy of this brief has been served on Ruth Malinas, J. Hampton Skelton, Michael Johnson, and Robert Valdez through the electronic filing system this 29th day of July, 2015.

/s/Scott R. Kidd