Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Navasota Resources, Ltd., challenges the trial court’s denial of its special appearance. Appellee Heep Petroleum Inc. sued Navasota and several other defendants for breach of contract, breach of fiduciary duties, fraud, conversion, and tortious interference with a contract arising out of oil and gas leases primarily located in Montana and North Dakota. Boone Heep, III, Heep Petroleum’s president and chief executive officer, first heard of Navasota in 1993 when he met Jim Simpson, who Heep understood to be “affiliated” with Navasota, at a barbeque in Texas. In the fall of 1995, Simpson told Heep that he was looking for oil and gas projects on Navasota’s behalf and expressed an interest in the Williston Program, that involved oil and gas leases in Montana and North Dakota. Shortly thereafter, Simpson came back to Texas to meet with Heep and learn more about the project. On Oct. 19, 1995, Simpson met with Heep and the owner of another Texas corporation that was a partner in the Williston Program. At the conclusion of the presentation, Simpson called Navasota’s president, Bill Sanesh, and explained the deal. Simpson hung up and told Heep, “We’ll take the deal.” The parties Navasota, Heep Petroleum and two other Texas companies then drafted and executed a letter of intent based on the meeting’s negotiations; Sanesh signed on Navasota’s behalf, and Heep signed for Heep Petroleum. In December 1995, the same parties executed a Participation and Exploration Agreement setting forth the terms of the joint venture; Sanesh again signed on behalf of Navasota. The agreements provided that the laws of Texas would govern the validity, construction, and interpretation of the agreement and required that any disputes be submitted to binding arbitration under the Texas General Arbitration Act. In 1997, Heep Petroleum and others sued two Texas citizens who had worked with Heep Petroleum in marketing various oil and gas projects, including the Williston joint venture. In 1999, Heep Petroleum amended its petition to join Navasota as a defendant. Navasota filed a special appearance, asserting that it was not subject to personal jurisdiction in Texas. After a hearing, the trial court overruled the special appearance. Navasota appeals, arguing that it lacks sufficient minimum contacts with Texas to justify the trial court’s exercise of personal jurisdiction. Navasota contends that because the various agreements concerned oil and gas leases in Montana and North Dakota, the trial court improperly exercised jurisdiction; it further disputes whether Simpson had the authority to act on Navasota’s behalf in negotiating the terms of the Williston Program. HOLDING:Affirmed. There was sufficient evidence to support the following implied findings of fact: Simpson, acting as Navasota’s head of corporate development, traveled to Texas, where he told Heep he was looking into oil and gas projects on Navasota’s behalf. Simpson expressed an interest in the Williston Program, and on Oct. 19, he returned to Texas and met with Heep and the president of another Texas-based company, who provided a presentation about the project. At the end of the meeting, Simpson called Navasota’s president and then told Heep, “We’ll take the deal.” The parties drafted a letter of intent summarizing the terms negotiated during the meeting, and the parties executed the letter of intent on Nov. 1; Navasota’s president signed on Navasota’s behalf. From December into early 1996, Navasota and Heep Petroleum negotiated and signed amendments to their letter of intent and other contracts related to this and one other project in South Dakota. Although the Williston Program sites were not located in Texas, Navasota purposefully availed itself of the benefits of doing business in Texas. The claims at issue in this case arise directly out of Navasota’s purposeful contacts with Texas, thus satisfying the requirements for specific jurisdiction, the court decides. Navasota argues that the burden of litigating this cause in Texas would be great because it is a Canadian company located in a remote region of British Columbia and travel expenses are prohibitive. Simpson traveled to Texas multiple times to solicit business for Navasota, Navasota held leasehold interests in other projects in several Texas counties, and Navasota did not offer evidence at the hearing or identify its representatives or witnesses. Litigating the dispute in Texas would not be unreasonably burdensome. Texas has a legitimate interest in adjudicating this dispute because the parties negotiated the agreements here and chose Texas law to govern their agreements. Allowing these issues to be resolved in one lawsuit here in Texas, rather than possibly through separate suits in North Dakota and Montana, will further the judicial system’s interest in efficient dispute resolution. The court holds that the exercise of jurisdiction over Navasota will not offend traditional notions of fair play and substantial justice. OPINION:Puryear, J.; before Smith, Patterson and Puryear, J.J. CONCURRENCE:Patterson, J. “The parties dispute whether it is proper to exercise general jurisdiction over Navasota based on its doing business in the State of Texas. Although in its special appearance Navasota denied that it had ever engaged in business in the State of Texas, once Heep Petroleum produced evidence that it had done so, Navasota was required to negate this basis for jurisdiction with evidence. Navasota argues without producing evidence at the hearing that it formally terminated all activities in the State of Texas prior to being served with the amended petition. Because Navasota’s contacts were sufficient to support the exercise of general jurisdiction, withdrawal prior to suit does not necessarily eliminate jurisdiction. In any event, because Navasota failed to negate this basis for jurisdiction, I would conclude that the denial of special appearance may be affirmed on this ground as well.”

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.