Opinion by Justice MYERS.
Bob Montgomery Chevrolet, Inc. d/b/a Bob Montgomery Collision appeals the trial court's denial of its special appearance in this suit brought by Dent Zone Companies. See TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(7) (West Supp.2012). Montgomery brings five issues asserting the trial court erred by denying its special appearance. The parties' arguments include whether a written contract incorporated by reference terms and conditions, including a forum-selection clause, listed on an internet web site. We conclude the forum-selection clause was not incorporated by reference and the trial court erred by denying Montgomery's special appearance. We render judgment dismissing the cause against Montgomery for want of personal jurisdiction.
Montgomery is an automobile dealership in Louisville, Kentucky. The company does not sell any cars in Texas, advertise or solicit in Texas, or otherwise overtly conduct business in Texas. The company has a "collision center" that repairs vehicles. Dent Zone is a company providing "paintless dent repair" service.
In April 2012, a hailstorm struck Louisville, damaging many vehicles in the area. Duane Geise, a representative of Dent Zone, approached Anthony Rich, the manager of Montgomery's collision center, about making Montgomery a certified repair center in Dent Zone's "PDR Linx Service Program." If Montgomery became a certified repair center, Dent Zone would send its technicians to Montgomery's premises to perform paintless dent repairs, Dent Zone and insurance companies would direct their customers with hail damage to Montgomery's location to have dent repair performed, and Montgomery would receive a percentage of the payments for dent repair. Geise showed Rich Dent Zone's one-page application to become a certified repair center for Dent Zone.
Dent Zone's technicians came to Montgomery's location, and Montgomery provided space for them to perform the paintless dent repairs. For a few weeks, the parties operated amicably: automobile insurers directed their customers with hail damage to Montgomery for dent repair,
Dent Zone brought suit against Montgomery in Dallas for breach of contract, alleging Montgomery "has consented to suit in Texas by the terms of the contract." Montgomery filed a special appearance. At the hearing on the special appearance, the evidence presented was Geise's testimony in court, the affidavits of Anthony Rich and Steven Montgomery, and various documents including the application, a printout of the internet document, checks from Montgomery to Dent Zone, and invoices and other records. The trial court denied the special appearance and made findings of fact and conclusions of law in support of its decision.
In its first four issues, Montgomery contends (1) the trial court erred by denying Montgomery's special appearance, (2) Montgomery sustained its burden of negating all bases of jurisdiction pleaded by Dent Zone, (3) the trial court erred by concluding Montgomery waived and consented to jurisdiction, and (4) there was legally and factually insufficient evidence to support the trial court's findings of fact and conclusions of law that Montgomery had knowledge of and agreed to the forum-selection clause in the internet document.
Whether a trial court has personal jurisdiction over a nonresident defendant is a question of law. Michiana Easy Livin' Country, Inc. v. Holten, 168 S.W.3d 777, 790-91 (Tex.2005); BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002). Because the trial court's exercise of personal jurisdiction over a nonresident defendant is one of law, an appellate court reviews the trial court's determination of a special appearance de novo. Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.2007); BMC Software, 83 S.W.3d at 794. However, the trial court must frequently resolve fact questions before deciding the jurisdictional question. BMC Software, 83 S.W.3d at 794; Capital Tech. Info. Servs., Inc. v. Arias & Arias, Consultores, 270 S.W.3d 741, 748 (Tex.App.-Dallas 2008, pet. denied) (en banc).
The plaintiff bears the initial burden of pleading sufficient allegations to bring a nonresident defendant within the provisions of the Texas long-arm statute. Moki Mac, 221 S.W.3d at 574; BMC Software, 83 S.W.3d at 793. The nonresident defendant then has the burden of negating all bases of jurisdiction alleged in the plaintiff's petition. Moki Mac, 221 S.W.3d at 574; BMC Software, 83 S.W.3d at 793.
A trial court's findings of fact in a nonjury trial carry the same force and dignity as a jury's verdict on jury questions. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex.1991); Kahn v. Imperial
In a legal sufficiency review, we view the evidence in the light most favorable to the fact-finding, credit favorable evidence if a reasonable fact-finder could do so, and disregard contrary evidence unless a reasonable fact-finder could not. See id. at 827. "[F]indings of fact bind an appellate court only if the findings are supported by evidence of probative force." Thomas v. Casale, 924 S.W.2d 433, 437 (Tex.App.-Fort Worth 1996, writ denied). Unchallenged findings of fact are binding on the appellate court "unless the contrary is established as a matter of law, or if there is no evidence to support the finding." Id. (quoting McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex.1986)). Anything more than a scintilla of evidence is legally sufficient to support the finding. Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). In a factual sufficiency review, we view all the evidence in a neutral light and set aside the finding only if the finding is so contrary to the overwhelming weight of the evidence such that the finding is clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986) (per curiam); Morris v. Wells Fargo Bank, N.A., 334 S.W.3d 838, 842 (Tex.App.-Dallas 2011, no pet.).
We review de novo a trial court's conclusions of law. See BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002). A conclusion of law is erroneous as a matter of law if the factual findings supporting the conclusion are not supported by any evidence. Wright Group Architects-Planners, P.L.L.C. v. Pierce, 343 S.W.3d 196, 205 (Tex.App.-Dallas 2011, no pet.). If we determine that the trial court made an erroneous conclusion of law, we will not reverse if the trial court rendered the proper judgment. See BMC Software, 83 S.W.3d at 794. We uphold conclusions of law if the judgment can be sustained on any legal theory supported by the evidence. Adams v. H & H Meat Prods., Inc., 41 S.W.3d 762, 769 (Tex.App.-Corpus Christi 2001, no pet.).
The Texas long-arm statute permits Texas courts to exercise jurisdiction over nonresident defendants that do business in Texas. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 17.041-045 (Vernon 2008); PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163, 166 (Tex.2007); BMC Software, 83 S.W.3d at 795. Under the statute, a nonresident does business in Texas if he: (1) contracts by mail or otherwise
The Due Process Clause of the Fourteenth Amendment operates to limit the power of a state to assert personal jurisdiction over a nonresident defendant. Asahi Metal Indus. Co., Ltd. v. Superior Court of Cal., Solano Cnty., 480 U.S. 102, 108, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 294, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Under the Due Process Clause, personal jurisdiction over a nonresident defendant is constitutional when the nonresident defendant has established minimum contacts with the forum state and the exercise of jurisdiction comports with traditional notions of fair play and substantial justice. Burger King, 471 U.S. at 476, 105 S.Ct. 2174; Int'l Shoe, 326 U.S. at 320, 66 S.Ct. 154. However, personal jurisdiction is a waivable right, and a party may agree to a forum's jurisdiction. Burger King, 471 U.S. at 472 n. 14, 105 S.Ct. 2174.
In this case, the only basis for personal jurisdiction Dent Zone alleged was that Montgomery "has consented to jurisdiction in Texas by the terms of the contract."
Montgomery contends the trial court erred by concluding Montgomery consented to jurisdiction through the forum-selection clause in the internet document. Montgomery asserts the forum-selection clause was not incorporated by reference into the parties' contract, and that the court erred by concluding Montgomery had knowledge of and agreed to the clause.
Dent Zone alleged Montgomery consented to the jurisdiction of the Texas courts by agreeing in the internet document "to submit to the jurisdiction of the courts of the State of Texas which shall be the sole and exclusive jurisdiction for any legal dispute between us." Montgomery asserts the internet document was not part of the contract;
When construing a contract, our primary goal is to determine the parties' intent as expressed in the terms of the contract. Chrysler Ins. Co. v. Greenspoint Dodge of Hous., Inc., 297 S.W.3d 248, 252 (Tex.2009); Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). Unsigned documents may be incorporated into the parties' contract by referring in the signed document to the unsigned document. Owen v. Hendricks, 433 S.W.2d 164, 167 (Tex.1968). The language used to refer to the incorporated document is not important as long as the signed document "plainly refers" to the incorporated document. Id.; In re C & H News Co., 133 S.W.3d 642, 645 (Tex.App.-Corpus Christi 2003, orig. proceeding). Documents incorporated into a contract by reference become part of that contract. In re 24R, Inc., 324 S.W.3d 564, 567 (Tex.2010) (orig. proceeding) (per curiam). When a document is incorporated into another by reference, both instruments must be read and construed together. In re C & H News Co., 133 S.W.3d at 645-46.
Plainly referring to a document requires more than merely mentioning the document. See Trico Marine Servs., Inc. v. Stewart & Stevenson Technical Servs., Inc., 73 S.W.3d 545, 549-50 (Tex.App.-Houston [1st Dist.] 2002, mandamus denied). The language in the signed document must show the parties intended for the other document to become part of the agreement. See One Beacon Ins. Co. v. Crowley Marine Servs., Inc., 648 F.3d 258, 267 (5th Cir.2011) (citing 11 SAMUEL WILLISTON & RICHARD A. LORD, A TREATISE ON THE LAW OF CONTRACTS § 30:25, at 234 (4th ed. 1999) ("in order to uphold the validity of terms incorporated by reference, it must be clear that the parties to the agreement had knowledge of and assented to the incorporated terms")); 17A C.J.S. Contracts § 402 (2011) ("For an incorporation by reference to be effective, it must be clear that the parties to the agreement had knowledge of and assented to the incorporated terms.").
No Texas case has expressly held that the complete incorporation by reference of another document requires the original document show the parties intended for the referenced document to become part of the contract. However, the requirement for such a showing is supported by the general principle of contract law that reference to a document for a particular purpose incorporates that document only for the specified purpose. See, e.g., 17A C.J.S. Contracts § 402 (2011). In Valero Marketing & Supply Co. v. Baldwin Contracting Co., No. H-09-2957, 2010 WL 1068105 (S.D.Tex. Mar. 19, 2010), the issue was whether a forum-selection clause was incorporated by reference. In that case, the defendant purchased asphalt from the plaintiff, and the parties' signed contract stated, "All prices quoted above are subject to Valero's General Terms and Conditions for Petroleum Product Purchases/Sales." Id. at *1, 3. The General Terms and Conditions included a forum-selection clause. Id. at *3. The district court concluded the incorporation of the General Terms and Conditions did not extend to the forum-selection clause because it was not relevant to the quotation of prices, see id. at *5, and the incorporating language did not "suggest that Defendant is bound by all of the General Terms and Conditions." Id. (emphasis omitted); see
In this case, the signed application stated Montgomery would "become a `Certified Repair Center' as detailed in our PDR LINX Service Program," and would "be an independent contractor working within the PDR LINX Service Program." The application also stated, "Additional benefits, qualifications and details of the PDR LINX Service Program are available for your review at our website: http://www.linxmanager.com/pdf/CRCTermsConditions.pdf." The question is whether this last-quoted sentence incorporated the internet document by reference.
The language, "Additional benefits, qualifications and details of the PDR LINX Service program are available for your review at our website: http://www.linxmanager.com/pdf/CRCTermsConditions.pdf" does not state the internet document is incorporated by reference into the parties' agreement, does not plainly refer to additional terms and conditions in the internet document as becoming part of the parties' agreement, and does not otherwise suggest that the parties intended for the internet document to become part of their agreement. Instead, this language indicates that the internet document contained informative material only, not binding terms and conditions intended to be part of the parties' contract.
None of the cases Dent Zone cites involved the type of language in this case. Instead, in all the cases except one where the courts found incorporation by reference, the referring language made clear that the parties intended for the outside material to become part of the contract.
In In re International Profit Associates, Inc., 286 S.W.3d 921 (Tex.2009) (orig. proceeding) (per curiam), the forum-selection clause the defendant sought to enforce was contained on the first page of the parties' agreement, which was missing from the copy the plaintiff signed. Id. at 923. The court held the plaintiff should have realized a page of the contract was missing because he signed pages stating "2 of 4," "3 of 4," and "4 of 4" and a clause on one of the pages he signed stated, "This document, 4 pages in total, constitutes the entire agreement for services ...." Id. This language clearly indicated there was a page "1 of 4" missing from the plaintiff's copy of the contract that was intended to be part of the contract.
In In re Boulder Crossroads, LLC, 2012 WL 1066482 (Bankr.W.D.Tex. Mar. 28, 2012), the parties' first agreement had attached to it a document titled, "April 2001 Terms and Conditions," which contained a limitation-of-liability provision. Id. at *1. The second agreement may not have had the "April 2001 Terms and Conditions" attached, but the last paragraph of the second agreement stated, "Terms and Conditions dated April 2001 (see attached) are hereby incorporated into and made part of this Work Authorization." Id. at *2. The court concluded that the "April 2001 Terms and Conditions" were incorporated
Owen v. Hendricks, 433 S.W.2d 164 (Tex.1968), involved two letters that did not refer to each other but involved the same transaction. Id. at 165-67. The Texas Supreme Court concluded that the letters did not incorporate one another by reference. Id. at 167. The court stated, "It is uniformly held that an unsigned paper may be incorporated by reference in the paper signed by the person sought to be charged. The language used is not important provided the document signed by the defendant plainly refers to another writing." Id. at 166. Because the documents did not reference each other, the court did not have before it whether the signed contract must show the parties intended for the referenced document to become part of the contract.
In re Prudential Insurance Co. of America, 148 S.W.3d 124 (Tex.2004) (orig. proceeding), involved incorporation of terms in a lease into a signed personal guaranty of the lease. The lease, which was between a corporate landlord and limited-partnership tenant, stated that in the event of litigation, the parties to the lease waived their right to a jury trial. Id. at 127-28. The principals of the tenant's limited partner also signed a personal guaranty stating they promised "to `faithfully perform and fulfill all of [the] terms, covenants, conditions, provisions, and agreements' of the lease in the event of the partnership's default." Id. at 135. The supreme court concluded this language incorporated the terms of the lease, including the jury waiver, into the guaranty agreement because the guaranty plainly referred to the lease's terms and because "documents executed at the same time, with the same purpose, and as part of the same transaction, are construed together." Id. The language in the guaranty incorporating by reference the terms of the lease made clear that the parties intended for all the agreements in the lease to become binding on the guarantors when the partnership defaulted.
In Gray & Co. Realtors, Inc. v. Atlantic Housing Foundation, Inc., 228 S.W.3d 431 (Tex.App.-Dallas 2007, no pet.), a seller and purchaser of real estate entered into a real estate contract. Id. at 432. In a separate written agreement, the purchaser promised to pay a commission to a broker if the transaction was closed or consummated. Id. at 432-33. Nominal title was passed to the purchaser for tax purposes, but the purchaser never paid the purchase price, and it later returned the title to the seller. Id. at 433. The broker sued for its commission, and one of the issues was whether the terms of the real estate contract were incorporated by reference into the broker's representation agreement. Id. This Court concluded the real estate contract was incorporated by reference because it was mentioned six times in the representation agreement and because the representation agreement had no purpose without the real estate contract. Id. at 436. Thus, the parties did not merely mention the real estate contract but intended for its terms to be included in the representation agreement.
Castroville Airport, Inc. v. City of Castroville, 974 S.W.2d 207 (Tex.App.-San Antonio 1998, no pet.), involved a dispute over a city's lease of an airport. The parties entered into a settlement memorandum, and the city drafted a new lease. Id. at 209. The lessee rejected the new lease, and the city sued the lessee for breach of the settlement memorandum and the original lease. Id. The lessee argued the settlement
Id. at 211-12 (citations omitted). The court then set forth the requirements for an enforceable lease and stated, "The Settlement Memorandum contains each of these terms." Id. at 212. Although the court did not quote the language referring to the exhibits, the court's description of the language shows the parties intended for the exhibits to become part of their contract.
Dent Zone also cited Westland Oil Development Corp. v. Gulf Oil Corp., 637 S.W.2d 903 (Tex. 1982). Dent Zone quotes the opinion in its brief as stating, "`any description, recital of fact, or reference to other documents puts the purchaser upon inquiry, and he is bound to follow up this inquiry, step by step, from one discovery to another and from one instrument to another,' until he obtains `complete knowledge' of all of the matters referred to." (Quoting Westland, 637 S.W.2d at 908.) That case involved title to oil and gas leases and whether one party was put on notice of another party's equitable title from a reference to a letter agreement contained in an operating agreement that was part of the party's chain of title. The supreme court stated that in matters of chain of title, "[i]t is well settled that `a purchaser is bound by every recital, reference and reservation contained in or fairly disclosed by any instrument which forms an essential link in the chain of title under which he claims.'" Id. at 908 (quoting Wessels v. Rio Bravo Oil Co., 250 S.W.2d 668, 670 (Tex.Civ.App.-Eastland 1952, writ ref'd)). The court then set forth the language quoted by Dent Zone.
The parties cite one case involving incorporation by reference of terms and conditions found on an internet site, One Beacon Insurance Co. v. Crowley Marine Services, Inc., 648 F.3d 258 (5th Cir. 2011).
We conclude the referring language in this case, "Additional benefits, qualifications and details of the PDR LINX Service Program are available for your review at our website: http://www.linxmanager.com/pdf/CRCTermsConditions.pdf," does not indicate the parties intended to incorporate the internet document. Instead, the language indicates the internet document contained informative but noncontractual material about the PDR LINX Service Program.
Dent Zone also asserts incorporation by reference occurred through Geise's telling Rich before he signed the application that the website contained terms and conditions applicable to the program. The trial court made findings of fact and conclusions of law in support of this incorporation theory. However, when a contract is unambiguous, we determine the parties' intent from the terms of the written contract, not from parol evidence. David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex.2008) ("An unambiguous contract will be enforced as written, and parol evidence will not be received for the purpose of creating an ambiguity or to give the contract a meaning different from that which its language imports."). In this case, the language referring to the internet document does not show any intent by the parties that the internet document would become part of their written contract. There is no ambiguity concerning the parties' intent to incorporate the internet document, and we do not consider any parol evidence. We conclude the trial court erred by determining the internet document was incorporated by reference into the parties' contract.
Montgomery challenged the sufficiency of the evidence supporting the trial
The challenged findings and conclusion are based on Montgomery's admitting knowledge of all the terms and conditions and admitting they applied to the contract. There is no evidence that Montgomery admitted knowledge of the terms and conditions in the internet document or that Montgomery admitted those terms and conditions applied to the contract. Instead, the evidence shows Montgomery never agreed that the internet document was part of the contract, and no evidence shows Montgomery had knowledge of the terms and conditions.
Geise testified that when Rich told him Dent Zone would have to leave, Geise told Rich they had a contract and that Rich should be prepared for someone to contact him about the contract. Geise testified about what happened next:
This testimony shows Rich admitted being aware of the website address printed on the application he signed, but the testimony does not contain evidence that Rich admitted knowledge of the actual terms and conditions or that he admitted the terms and conditions listed on the website applied to their agreement. Instead, the record shows Geise did not know whether Rich or anyone else at Montgomery ever looked at the internet document, and Geise's testimony shows Rich rejected Geise's statement that the terms and conditions in the internet document were part of their agreement. We conclude that no evidence supports the trial court's findings and conclusions that Montgomery admitted knowledge of the terms and conditions on the website and that the dealership admitted those terms and conditions applied to the contract.
We next consider whether the record supports the trial court's conclusion of law that Montgomery ratified the terms and conditions in the internet document by accepting the benefits of the contract after Geise told Rich that the internet document applied to the contract. We conclude no ratification occurred.
Ratification is the adoption or confirmation, by one with knowledge of all material facts, of a prior act that did not then legally bind that person and which that person had a right to repudiate. Thomson Oil Royalty, LLC v. Graham, 351 S.W.3d 162, 165 (Tex.App.-Tyler 2011, no pet.). Ratification of a contract occurs when a party recognizes the validity of a contract by acting under, performing under it, or affirmatively acknowledging it. Barrand, Inc. v. Whataburger, Inc., 214 S.W.3d 122, 146 (Tex.App.-Corpus Christi 2006, pet. denied); Mo. Pac. Ry. Co. v. Lely Dev. Corp., 86 S.W.3d 787, 792 (Tex. App.-Austin 2002, pet. dism'd). In other words, a party ratifies a contract by conduct recognizing the contract as valid with knowledge of all relevant facts. Barrand, 214 S.W.3d at 146. Any act inconsistent with an intent to avoid a contract has the effect of ratifying the contract. Id.; Barker v. Roelke, 105 S.W.3d 75, 85 (Tex.App.-Eastland 2003, pet. denied). Whether a party has ratified a contract may be determined as a matter of law if the evidence is not controverted or is incontrovertible. Barrand, 214 S.W.3d at 146; Barker, 105 S.W.3d at 85.
The doctrine of ratification is not applicable in this appeal. Montgomery does not dispute on appeal that the parties had a legally binding contract or argue that any contract was voidable.
The trial court entered conclusions of law that Montgomery was estopped, quasi-estopped, and equitably estopped from denying applicability of the terms and conditions of the internet document to the parties contract:
All of these conclusions are based on the court's findings that the terms and conditions in the internet document were terms of the parties' contract and that Montgomery agreed that the terms in the internet document were part of the contract. As discussed above, the contents of the internet document did not become part of the parties' agreement because the document
Having determined (1) the internet document was not incorporated by reference into the parties' contract, (2) Montgomery did not ratify the internet document, and (3) the evidence does not support the trial court's conclusions of law that Montgomery was estopped from denying the terms and conditions in the internet document applied to the contract, we conclude the forum-selection clause was not a part of the parties' contract. Accordingly, the trial court erred by concluding Montgomery consented to jurisdiction in Texas. We sustain Montgomery's first four issues.
We reverse the trial court's order denying Montgomery's special appearance, and we render judgment granting the special appearance and dismissing the cause for want of personal jurisdiction.
The internet document also included a limited warranty, indemnity, and details regarding division of collected funds.
Westland Oil, 637 S.W.2d at 908 (quoting Loomis v. Cobb, 159 S.W. 305, 307 (Tex.Civ. App.-El Paso 1913, writ ref'd)).
One Beacon, 648 F.3d at 268 (quoting Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 403 (2nd Cir.2004)).
Barrand, Inc., 214 S.W.3d at 146 (citation omitted).
