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Click here for the full text of this decision FACTS:Susan Hollister is the president of California-based Tri-State Building Specialties Inc., and Jennie Bush is the vice president. Tri-State bought garage doors from Able Doors of California, a company that went bankrupt and whose assets were bought by NCI Building Systems, a Texas company. On March 12, 2004, NCI and Tri-State signed an “application for credit,” setting forth the terms by which NCI would make future sales to Tri-State. The agreement contained a forum-selection clause picking Harris County as the court system where all disputes would be resolved. NCI filed a “suit on account” and a breach-of-contract claim against Tri-State, Hollister and Bush in June 2004. Claiming Tri-State owed it more than $90,000, NCI incorporated what it called “Exhibit A” into its pleading. Exhibit A contained an affidavit from NCI’s credit manager stating the amount of the debt; an accounts receivable itemized invoice report of dealings between Tri-State and NCI between Dec. 16, 2003, and April 23, 2004; and a copy of the application for credit. The defendants did not file an answer, and so a trial court entered a default judgment against them in October 2004. A month later, the defendants filed a special appearance, a motion for new trial and other motions. In its amended special appearance, Tri-State conceded that the trial court had subject matter jurisdiction over the claims between it and NCI after March 12, 2004; however, Tri-State also averred that it was not subject to personal jurisdiction in Texas over claims arising before the credit application was filed. Hollister and Bush claimed that the trial court did not have in personam jurisdiction over them at all: They had no contacts with Texas, and they were merely employees of Tri-State. NCI’s response reiterated the materials incorporated into Exhibit A, which showed that NCI and Tri-State had communications and made transactions in Texas before March 12, 2004. As to Hollister and Bush, NCI argued that they were subject to jurisdiction in Texas because Tri-State had lost its corporate privileges in California, so that made them, as officers of the company, personally and individually liable for Tri-State’s debts. NCI offered confirmation from the California Secretary of State about Tri-State’s loss of corporate privileges, as well as provisions from the California and Texas tax codes. The trial court denied the defendants’ special appearances. HOLDING:Affirmed in part; reversed and rendered in part. The court first reviews whether the trial court had in personam jurisdiction over Tri-State. The court points out that NCI specifically incorporated Exhibit A into its original pleading, and that it presented evidence of Tri-State’s contacts with Texas in its response to Tri-State’s special appearance. Both sides referred to the application for credit, the court adds, and, even though it was incorporated into the original pleading, not the special appearance response, it was proper under Texas Rule of Civil Procedure 120a(3) for the trial court to consider that exhibit in its assessment. The court says that the dispositive question is whether the trial court could have properly denied Tri-State’s special appearance based on the forum-selection clause in the credit application. Forum-selection clauses are prima facie valid and should be enforced unless the clause is unreasonable under the circumstances. Further, the court says, the party opposing enforcement of the clause has a heavy burden of showing the why the clause should not be enforced. Here, Tri-State did not challenge the validity of the forum-selection clause; in fact, it conceded that it was applicable, at least after March 12, 2004. Additionally, Tri-State does not show how application of the clause to pre-March 12, 2004, matters would be unreasonable. Nor did Tri-State show: 1. the clause was the product of fraud or overreaching; 2. “Houston, Harris County, Texas” is so inconvenient as to deprive Tri-State of its day in court; or 3. enforcement would contravene a strong public policy of the forum. The trial court properly denied Tri-State’s special appearance. The court next examines the denial of Hollister’s and Bush’s special appearances. The court notes that the certification from the California Secretary of State showing Tri-State’s loss of corporate privileges does not show the date the loss was effected. Furthermore, the certification did not show that the company’s corporate privileges were forfeited, as required by Texas Tax Code 171.255(a) for transferring liability to officers when a company loses its corporate privileges. Moreover, NCI offered no legal argument or authority showing that subsection 171.255(a) applies when the circumstances involve a corporation that has had its corporate privileges suspended in another state for nonpayment of taxes in that jurisdiction. “Although not expressly stated in Chapter 171, it is logical that subsection 171.255(a) applies only to corporations that have failed to file a report or to pay a tax or penalty as required by Texas law. That is, it follows that subsection 171.255(a) applies when a corporation has its corporate privileges forfeited in Texas, not in California. Here, NCI has not shown that subsection 171.255(a) applies to Tri-State, a California corporation, whose corporate rights and privileges were suspended by California authorities for noncompliance with California tax laws.” NCI, thus, did not establish that in personam jurisdiction over Hollister and Bush was proper, and the trial court erred in denying the women’s special appearance. OPINION:Higley, J.; Nuchia, Jennings and Higley, JJ.

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