You Get One Phone Call

After Media Consultants, LLC defaulted on its lease and filed for bankruptcy, plaintiff 11327 Reeder Road, Inc. filed suit against Kenneth Guarino and Capital Video Corp. to recover the unpaid rent owed under the lease agreement, alleging that Media Consultants and Capital Video were Guarino’s alter egos. 11327 further alleged that Guarino had fraudulently induced it to enter into a lease modification, and that Media Consultants had conspired with Guarino to commit fraud. However, Guarino and Media Consultants were not residents of Texas, and they filed a special appearance to contest personal jurisdiction. On interlocutory review from the denial of the special appearances, the Court of Appeals reversed. Proof that an individual is an officer, director, or majority owner of a company is insufficient, standing alone, to establish alter ego. Nor was there general jurisdiction over Guradino because “Making telephone calls and sending e-mails about separate business entities in another state are not the types of continuous and systematic contacts that approach the relationship between the state and its own residents.” 11327 also failed to establish jurisdiction over Guradino through proof that he had negotiated the lease modification through a telephone call to Texas, because a single telephone call to Texas that included alleged misrepresentations does not demonstrate the defendant purposefully availed himself of the privilege of conducting activities in Texas sufficient to support specific jurisdiction.

Guarino v. 11327 Reeder Road, Inc., No. 05-12-01573-CV