Turman v. POS Partners, LLC
Turman v. POS Partners, LLC
Opinion of the Court
In this case asserting contract and breach-of-fiduciary-duty claims, defendant Richard Turman appeals from the trial court's ruling denying his special appearance. Turman's Texas contacts are insufficient to support general jurisdiction; however, the record supports the trial court's implied finding that there is a substantial connection between Turman's Texas contacts and the operative facts of the breach-of-fiduciary-duty claim alleged by plaintiff POS Partners, LLC ("POSP"). We therefore conclude that the trial court did not err in exercising specific jurisdiction over that claim. We conclude, however, that there is no such substantial connection between Turman's Texas contacts and POSP's request for a declaration that it is not liable to Turman under the terms of a compensation agreement executed by Turman and a POSP employee. We accordingly affirm the trial court's ruling in part, reverse it in part, and remand the case to the trial court with instructions to sever and dismiss POSP's contract claim for lack of personal jurisdiction.
I. BACKGROUND
POSP is a Texas company that does business in several states. The company *899markets and sells point-of-sale hardware, software, and services, including credit card processing services.
Oklahoma resident Turman worked for a similar company, CRS Inc., in Oklahoma. After POSP purchased CRS Inc. or its assets in the summer of 2013, POSP began doing business in Oklahoma under the name CRS Oklahoma or CRS Oklahoma, LLC. Turman became a regional account manager for POSP and was paid as a commissioned sales agent. While working for POSP, Turman also formed his own company, Specialized POS Systems, LLC. Turman purchased the equipment that Specialized POS sells from Nelson Distributing in Texas, which POSP alleges is the same vendor that supplies POSP's equipment.
Turman received sales leads from POSP, and on four occasions, these included POSP customers in Texas. Turman sold POSP equipment to Speedy Mart in Wheeler, Texas and Pasqual, Inc. in Wichita Falls, Texas. According to Turman, he contacted these companies at POSP's direction, and the two companies placed their orders for equipment upgrades by telephone. Regarding the third instance, POSP states in a footnote in its live pleading that Turman has filed an affidavit in which he admits receiving a lead from POSP that Robbin's True Value Hardware in Canadian, Texas, needed a broken cash register replaced. POSP further states that Turman admits he sold and installed the cash register in Texas through his own company rather than through POSP. In the fourth instance, POSP alleges that it informed Turman that Ginger's Point Corporation d/b/a Blue Bayou wanted to buy a cash register and that Turman instead sold the equipment through his own company and kept the sales proceeds. The customer's sales order and canceled checks, which POSP attached to its pleading, identify only an Oklahoma address; however, as with Robbin's True Value Hardware, POSP states in a footnote that "Turman has filed an affidavit admitting ... that he personally sold and installed (in Texas) the point-of-sale equipment that Blue Bayou was seeking to purchase from POSP...."
After discovering that Turman had used his own company to sell equipment to POSP's customers, POSP informed Turman in April 2016 that he was terminated. In response, Turman emailed POSP that it had breached its contract with him by failing to pay all of the commissions POSP owed him. He produced a document dated September 16, 2013 with POSP's logo above the heading, "RE: Sales Compensation Schedule, Richard Turman, Regional Account Manager."
*900POSP sued Turman in Texas for breach of fiduciary duty, alleging that Turman made sales on behalf of other companies to POSP's existing or potential customers. POSP also sued for construction of the compensation contract, asking the trial court for a declaration that the 2013 compensation agreement between POSP and Turman is invalid or unenforceable. POSP argued in the alternative that Turman ratified a change in the compensation agreement because throughout the three years of his employment, Turman accepted POSP's payment of only a 12% commission with no automobile allowance.
Turman filed an original and two amended special appearances contesting the court's exercise of personal jurisdiction over him. The record does not show that POSP responded, and we have no record of the oral hearing on the special appearance, which we presume was non-evidentiary.
The trial court denied Turman's special appearance, and in a single issue, Turman challenges the trial court's ruling.
II. STANDARD OF REVIEW
In the trial court, the plaintiff bears the initial burden to allege facts bringing the defendant within reach of the Texas long-arm statute. See Kelly v. Gen. Interior Constr., Inc. ,
Because the existence of personal jurisdiction is a question of law, we review the trial court's ruling de novo. See Am. Type Culture Collection, Inc. v. Coleman ,
III. GOVERNING LAW
Our state 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. ,
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 ,
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
The extent of a defendant's contacts that are sufficient to support personal jurisdiction depends upon whether general jurisdiction or specific jurisdiction is alleged. See Kelly v. Gen. Interior Constr., Inc. ,
A single act can support specific jurisdiction as long as there is a substantial connection with the forum state. See Phillips v. Phillips ,
*902POSP alleged both general and specific jurisdiction. We consider the two types of jurisdiction separately.
IV. GENERAL JURISDICTION
To determine whether the trial court has general jurisdiction over Turman, we analyze all contacts for proof of a pattern of continuing and systematic activity. See Am. Type Culture Collection , 83 S.W.3d at 809.
POSP begins by pointing out that Turman "negotiated and entered into an employment agreement with POSP, a Texas resident, that was partially performable by POSP in Texas." Under the Texas long-arm statute, contracting with a Texas resident constitutes doing business in this state if either party is to wholly or partially perform the contract in Texas. TEX. CIV. PRAC. & REM. CODE ANN. § 17.042(a) (West 2015). But, without more, merely contracting with a Texas resident does not represent purposeful availment.
When an employee lives and works outside of Texas, employment "by a company with its principal place of business in Texas is not sufficient to establish the requisite minimum contacts with Texas." Rushmore Inv. Advisors, Inc. v. Frey ,
Many of the remaining contacts identified by POSP are the result of its own unilateral activity or are too attenuated, random, or fortuitous to constitute purposeful availment. These include (1) Turman's receipt, in Oklahoma, of compensation, benefits, and sales leads that POSP provided from Texas; and (2) Turman's oral and electronic communications to POSP's supervisory and support personnel who were located in Texas. But cf. N803RA, Inc. v. Hammer ,
POSP further alleges that Turman purchased from a Texas vendor the *903equipment he sold through his own company. But "purchases from Texas vendors will not alone support the exercise of general jurisdiction." Am. Type Culture Collection , 83 S.W.3d at 808.
In addition to all of the above, POSP alleges that Turman traveled to Texas on behalf of POSP and made presentations and sales in Texas on POSP's behalf; however, Turman's second amended special appearance is supported by his affidavit testimony, "I did not make solicitations or make sales presentations on behalf of POSP to customers located in Texas." This shifted the burden back to POSP, which failed to respond with controverting evidence. See Laidlaw Waste Sys. (Dall.), Inc. v. City of Wilmer ,
Turman's carefully worded statement that he did not make solicitations or sales presentations "on behalf of POSP to customers located in Texas" does not foreclose the possibility that Turman (a) made unsolicited sales initiated by Texas customers; or (b) made solicitations or sales presentations to Texas customers when he was not acting on POSP's behalf. Of the four sales to Texas customers alleged by POSP, Turman essentially has characterized two of the sales as unsolicited and two as sales that were not made on POSP's behalf.
Regarding the first category, Turman attests that he did not solicit or provide sales presentations to Texas companies Speedy Mart and Pasqual Inc., but that these companies instead contacted POSP's Oklahoma branch about updating their equipment. Turman states that the Oklahoma branch directed him to contact Speedy Mart and Pasqual, so he telephoned them and they placed their orders by phone.
As to Turman's Texas contacts that were not made on POSP's behalf, POSP alleges that Turman admittedly sold equipment through his own company and installed the equipment in the stores of POSP Texas customers Blue Bayou and Robbin's True Value Hardware. Turman does not dispute this. In his live special appearance, Turman does not discuss Blue Bayou, and he admits selling the equipment to Robbin's True Value Hardware.
In sum, Turman's Texas contacts over the three years that he worked for POSP
V. SPECIFIC JURISDICTION
Specific jurisdiction is established on a claim-by-claim basis unless all the asserted claims arise from the same forum contacts. M & F Worldwide ,
A. Specific Jurisdiction Over POS's Breach-of-Fiduciary-Duty Claim
Regarding POSP's tort claim for breach of fiduciary duty, the Texas long-arm statute authorizes the exercise of personal jurisdiction over a defendant who "commits a tort in whole or in part in this state." TEX. CIV. PRAC. & REM. CODE ANN. § 17.042(2). But as previously mentioned, specific jurisdiction exists only if there is a "substantial connection" between the defendant's forum contacts and the operative facts of the litigation. Moki Mac ,
Breach of fiduciary duty requires proof that (1) a fiduciary relationship existed between the plaintiff and the defendant, (2) the defendant breached its fiduciary duty, and (3) the breach resulted in injury to the plaintiff or benefit to the defendant. Heritage Gulf Coast Props., Ltd. v. Sandalwood Apartments, Inc. ,
The record before us accordingly supports the existence of specific jurisdiction over POSP's breach-of-fiduciary duty claim. Although the record does not support the existence of continuous and systematic contacts with Texas, Turman's sale to Robbin's True Value Hardware is a contact that satisfies all of the requirements of purposeful availment for the purpose of specific jurisdiction.
We accordingly affirm the denial of Turman's special appearance as it applies to POSP's claim for breach of fiduciary duty.
B. Specific Jurisdiction Over POSP's Contract-Construction Claim
POSP also asserted a contract-construction claim, requesting a declaration that it owes Turman nothing under the compensation agreement because the agreement is invalid or unenforceable, or alternatively, because Turman ratified an implicit modification to the contract by accepting less remuneration than the contract required POSP to pay. See MBM Fin. Corp. v. Woodlands Operating Co. ,
As applied to POSP's request for declaratory relief, the claim falls within our long-arm statute, which provides that contracting with a Texas resident constitutes doing business in this state if either party is to wholly or partially perform the contract in Texas. TEX. CIV. PRAC. & REM. CODE ANN. § 17.042(a). Nevertheless, exercising specific jurisdiction over a foreign defendant based on such a contract violates due process if the defendant has not purposefully availed itself of the privileges and benefits of conducting activities in the forum state or if there is not a substantial connection between the defendant's forum contacts and the operative facts of the litigation.
Some contacts are easily eliminated from this analysis. If the contract is enforceable, POSP would owe Turman commissions only on sales he made on POSP's behalf, not sales he made on behalf of his own company. Because sales Turman made through his own company are not covered by the compensation agreement, those contacts have no substantial connection to the operative facts of this claim, even if Turman made the sales in Texas.
This leaves only Turman's Texas contacts created by his employment and contractual relationship with POSP. Regarding contacts created by a contractual relationship, we must consider prior negotiations, contemplated future consequences, the contract's terms, and the actual course of dealing. See Burger King Corp. v. Rudzewicz ,
Turman attested, without contradiction, that he negotiated and entered into the contract with POSP in Oklahoma. The contract contains no choice-of-law or choice-of-forum provisions. It identifies Turman as the regional account manager, and although it does not identify the region concerned, POSP offered no evidence controverting Turman's testimony that he made no solicitations or sales presentations in Texas on POSP's behalf. POSP contends that Turman ratified a modification to the contract by accepting lower compensation than the contract required, but POSP does not allege that Turman accepted the compensation in Texas.
Specific jurisdiction over POSP's contract-construction claim also is unsupported by Turman's telephoning of Texas customers Speedy Mart and Pasqual Inc., by his receipt in Oklahoma of sales leads that POSP provided from Texas, or by Turman's oral and electronic communications with POSP's supervisory and support personnel in Texas. Three cases concerning a Texas employer's assertion of specific jurisdiction based on a former employee's employment-related Texas contacts illustrate why this is so.
In Information Services Group, Inc. v. Rawlinson , defendant Rawlinson lived and *907worked in the U.K. while employed by Texas company TPI Eurosourcing, L.L.C., with operations in the U.K.
Just as Rawlinson attended meetings in Texas at his employer's direction, so too did Turman contact POSP's Texas customers Speedy Mart and Pasqual Inc. at POSP's direction. And just as Rawlinson's use of the company's website and email through Texas servers was the fortuitous result of decisions made unilaterally by his employer, POSP's unilateral decision to provide sales leads, supervision, and support for its Oklahoma operations from Texas rendered these contacts merely fortuitous. Finally, just as in Rawlinson , there is no substantial connection between the defendant's forum contacts and the contract claim at issue.
In the similar case of Gustafson v. Provider HealthNet Services, Inc. , Texas employer Provider HealthNet Services, Inc. ("PHNS") sued former employee Gustafson for breach of a confidentiality agreement, misappropriation of trade secrets, and breach of fiduciary duty.
In the case of Gonzalez v. AAG Las Vegas, L.L.C. ,
Because the contacts alleged are merely fortuitous, and for the independent reason that there is no substantial connection between Turman's Texas contacts and the operative facts of POSP's request for declaratory relief concerning Turman's compensation agreement, we conclude that the trial court erred in denying Turman's special appearance as to that claim.
VI. CONCLUSION
Turman's contacts with Texas are insufficient to support the exercise of general jurisdiction, but are sufficient to support specific jurisdiction over POSP's claim for breach of fiduciary duty; thus, the trial court did not err in denying Turman's special appearance as to that claim. Regarding POSP's request for a declaration that it is not liable to Turman under the compensation agreement, there is no substantial connection between the operative facts of the litigation and Turman's Texas contacts, which were merely the fortuitous result of POSP's unilateral decisions.
We therefore conclude that the trial court properly denied Turman's special appearance as to the breach-of-fiduciary-duty claim, but erred in failing to grant Turman's special appearance over POSP's contract claim. We accordingly affirm in part, reverse in part, and remand the case to the trial court with instructions to sever and dismiss POSP's request for declaratory relief regarding the compensation agreement from the remainder of the case, and for further proceedings consistent with this opinion.
POSP likely is referring to Turman's affidavit attached to earlier iterations of his special appearance. After POSP filed its second amended petition referring to the affidavit, Turman filed a second amended special appearance to which he attached a second amended affidavit. The new affidavit contains the same admissions about the sale to Robbin's True Value Hardware, but omits any mention of Blue Bayou.
We have added commas to indicate the end of each line.
See Michiana Easy Livin' Country, Inc. v. Holten ,
There can be exceptions to the general rule that pleadings are not evidence-for example, allegations in a suit on a sworn account will be treated as evidence in certain circumstances-but no such exception applies here.
This is the only period for which there are allegations or evidence.
We have used Robbin's True Value Hardware as an example, but the analysis would be the same for other sales Turman made through his own company to Texas customers.
To the contrary, POSP attached Turman's 2014 W-2 forms to its live pleading, and those forms state the amount of Turman's compensation and taxes withheld, but link Turman only to his address in Oklahoma. The W-2 forms also show that Oklahoma state income tax was withheld from Turman's compensation. While the documents attached to POSP's pleading are not evidence, see Duruji v. Duruji , No. 14-05-01185-CV,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.