Aaron Kaufman v. Amerihealth Laboratory, LLC
2020 WL 6438786 (Tex. App.—Dallas Oct. 30, 2020, no pet.) (mem. op.) (2020)
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Rule of Law:
A nonresident defendant makes a general appearance and waives any objection to personal jurisdiction by taking actions that recognize the case is properly pending or seek affirmative relief, such as having counsel actively participate in a temporary restraining order hearing, argue the merits, and agree to a court-ordered discovery plan before filing a special appearance.
Facts:
- AmeriHealth Laboratory, LLC is a clinical laboratory based in Texas.
- AmeriHealth entered into a consulting agreement with Final Inch, LLC, a Florida-based company, for technology and management services.
- Aaron Kaufman, a Florida resident, is the CEO of Final Inch and was its point person and signatory on the agreement.
- In performing its services, Final Inch gained access to AmeriHealth's confidential and proprietary information.
- A dispute arose, with AmeriHealth alleging Kaufman tortiously interfered with its business and that both Kaufman and Final Inch breached the contract.
- Kaufman denied ever traveling to Texas for business related to the agreement, asserting that all contract negotiations and services occurred in Florida.
Procedural Posture:
- AmeriHealth Laboratory, LLC sued Aaron Kaufman and Final Inch, LLC in the 134th Judicial District Court of Dallas County, Texas.
- AmeriHealth sought a temporary restraining order (TRO), and a hearing was held on November 1, 2019.
- Kaufman's counsel appeared at the TRO hearing, argued on Kaufman's behalf, and entered into a 'Rule 11 Agreement' regarding discovery, which the parties asked the court to order them to comply with.
- The trial court signed the TRO, which included modifications based on Kaufman's arguments.
- On November 8, 2019, Kaufman filed a special appearance arguing the court lacked personal jurisdiction over him.
- The trial court held a hearing and subsequently signed an order denying Kaufman's special appearance.
- Kaufman, as appellant, appealed the trial court's denial of his special appearance to the Court of Appeals for the Fifth District of Texas at Dallas.
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Issue:
Does a nonresident defendant waive a special appearance by having counsel appear at a temporary restraining order hearing, argue the merits of the case, and agree to a court-ordered discovery plan before filing the special appearance?
Opinions:
Majority - Justice Browning
Yes. A nonresident defendant waives a special appearance by having counsel appear at a temporary restraining order hearing, argue the merits of the case, and agree to a court-ordered discovery plan before filing the special appearance. The test for a general appearance is whether a party requests affirmative relief inconsistent with an assertion that the trial court lacks personal jurisdiction. Here, Kaufman's counsel did more than merely observe the TRO hearing; counsel actively participated by arguing the merits (e.g., that Kaufman was not a signatory to the contract), successfully sought modifications to the TRO, and agreed to a Rule 11 discovery plan. Critically, Kaufman's counsel also agreed to AmeriHealth's request that the court order the parties to comply with the discovery agreement, thereby invoking the court's jurisdiction to obtain affirmative relief. These actions recognized the action as properly pending and were inconsistent with a later assertion that the court lacked jurisdiction. Any subsequent attempt to preserve the special appearance in a written order was ineffective, as the general appearance had already occurred.
Analysis:
This decision reinforces the strict requirements for preserving a special appearance in Texas courts. It clarifies that any action beyond mere observation in a preliminary hearing can constitute a general appearance if it seeks affirmative relief or addresses the merits. The ruling serves as a significant warning to practitioners that even seemingly minor participation, such as agreeing to have the court enforce a discovery plan, can be fatal to a jurisdictional challenge. This case emphasizes that the timing is critical; actions taken before a special appearance is filed will be scrutinized to determine if they are inconsistent with a challenge to jurisdiction.
