Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Don Nichols, a resident of Oklahoma, established a boat dealership in McAlester, Oklahoma, in 1972. Don’s son, Gary Nichols, established Nichols Marine of Texas, LLC, and Marine Holdings Corporation. Don has never had any ownership interest in Nichols Marine of Texas, LLC, or Marine Holdings Corporation. It is alleged that Nichols Marine of Texas, LLC, entered into an employment agreement with James Bridges and that Bridges was wrongfully terminated by Nichols Marine of Texas, LLC Bridges further alleged that he and Gary Nichols entered into a business plan agreement whereby Gary Nichols would arrange for the necessary funding for all company acquisitions and operations. Nichols Marine of Texas, LLC, was dissolved, and Gary Nichols then incorporated Nichols Marine of Longview, LLC Bridges sued Gary Nichols, Nichols Marine of Longview, LLC, Marine Holdings Corporation, Don Nichols, individually, and d/b/a Nichols Marine of McAlester, Oklahoma. Don filed a special appearance alleging the trial court did not have jurisdiction over him. After a hearing, the trial court denied the motion, which denial is being appealed. Gary’s corporation was structured to allow a transfer of boats from Oklahoma to Texas regardless of which company was obligated for the floor plan financing. Don was allowed to participate with Gary’s corporation as a buying group through Marine Holdings Corporation, which allowed Don to obtain discounts or rebates from the manufacturers. Don was aware that the group purchasing and the floor plan financing allowed the Longview store to acquire inventory. Don’s company received rebates from boat manufacturers during the time that Gary and Bridges were involved in the Longview store. The rebates were to be received by Marine Holdings Corporation and then disbursed to the respective stores, including the Longview store. Don challenges the legal and factual sufficiency of the implied findings of fact to support the judgment. HOLDING:Reversed. The language of Texas Rule of Civil Procedure 63 allows an amendment to a pleading within seven days of the “date of trial.” No cases have been found determining that a special appearance plea hearing is a “date of trial” as envisioned by Rule 63. However, a special appearance is similar to a summary judgment in that each may lead to a final disposition of the case. Summary judgment proceedings have been held to be a trial within the meaning of Rule 63. The court construes the special appearance hearing as requiring the trial court’s approval in order to consider amended pleadings filed within seven days of the hearing date or thereafter. The trial court heard the oral presentation of the motion Nov. 1, 2004. On Nov. 3, 2004, the second amended original petition was filed, and the court ruled on the motion by an order filed Nov. 23, 2004. The amended pleadings added more definite allegations concerning Don, but none of the pleadings have been shown to be a surprise to Don. The allegations in the first and second amended pleadings both alleged a conspiracy between the defendants to terminate the business of Nichols Marine of Texas, LLC, and a failure to fund the Longview operation to allow it to comply with the agreement with Bridges. The second amended original petition stated more specifically that Don received rebates attributable to Nichols Marine of Texas, LLC, and failed to properly remit the rebates to Nichols Marine of Texas, LLC. The “rebate” allegation was discussed during the deposition of Don, which is before this court, and therefore should not have come as a surprise. Finally, there is no indication the trial court did not consider this allegation, since several weeks transpired before the trial court filed its order and after the trial judge stated that he would “review everything else.” When the record is silent of any basis to conclude that the amended pleading was not considered by the trial court and when no surprise or prejudice is shown, leave of court is presumed. Goswami v. Metro. Sav. & Loan Ass’n, 751 S.W.2d 487 (Tex. 1988). The court considers the second amended original petition. The strongest case to be made for specific jurisdiction is that Don failed to pay certain rebates to Nichols Marine of Texas, LLC. In turn, Nichols Marine of Texas, LLC, became financially insolvent and therefore could not honor Bridges’ contract. The court believes such consequences are too remote and attenuated, and are not reasonably foreseeable. The court holds that a Texas court may not assert specific personal jurisdiction over Don. There is no evidence that Don conducted systematic and continuous activities giving rise to general jurisdiction, the court holds OPINION:Carter, J.; Morriss, C.J., Ross and Carter, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.