Jurisdiction; Injunction; Special Appearance

Prior History:

Cherubino Valsangiacomo, S.A. v. Americana Juice Imports, Inc., 1999 Tex. App. LEXIS 375; abstracted at 2000 Annual Survey of Letter of Credit Law & Practice 299.


Applicant, a citizen of Texas, opened an LC for US$ 548,352 to secure the purchase of grape juice concentrate from the beneficiary, a citizen of Spain. When the applicant was unhappy with the product received, it sued the beneficiary for breach of contract and fraud, and sought injunctive relief against the issuer to enjoin it from honoring the LC. On the day of the hearing on the temporary injunction, counsel for the beneficiary (defendant) filed for a special appearance and participated in the hearing for temporary injunction. The District Court of Hidalgo County, Texas granted the injunction against the issuer and denied beneficiary's application for a special appearance. The court's denial of a special appearance rendered counsel's participation as a general appearance, which, if upheld, would constitute a waiver of defendant's (beneficiary's) right to object to personal jurisdiction in this matter.

On appeal, the Court of Appeals of Texas, Thirteenth District, reversed the order for the injunction against the issuer, and the issuer was nonsuited. Beneficiary then appealed the District Court's denial of its application for a special appearance, claiming that it was not subject to personal jurisdiction in Texas.

The appellate court noted that "because the temporary injunction hearing was related to an ancillary matter which did not resolve the issues of law or fact alleged in the underlying suit . . . counsel's appearance and participation did not constitute a general appearance."

The applicant argued that beneficiary was subject to general personal jurisdiction in Texas because it "maintained ongoing, systematic contacts with Texas". Applicant also maintained that, absent the court's finding of general jurisdiction, beneficiary should be subject to "specific jurisdiction based on the existence of a contract with a Texas resident, correspondence sent into Texas, the juice sent into Texas, partial performance of the contract in Texas, and commission of fraud by [beneficiary] with reliance by [applicant] in Texas."

The appellate court noted that the evidence presented established that beneficiary did not have systematic and continuous contacts with Texas in a way that would give rise to general jurisdiction. Nor did any of its actions give rise to specific jurisdiction in Texas. It concluded that, "[beneficiary] met its burden of negating all bases of personal jurisdiction," and, accordingly, it reversed the judgment of the trial court and dismissed the case for lack of personal jurisdiction.



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