Preview
FILED
DALLAS COUNTY
9/23/2019 4:16 PM
FELICIA PITRE
DISTRICT CLERK
Kevin Molden
CAUSE NO. DC-19-11136
BERNARD BURKHOLDER AND IN THE DISTRICT COURT
BLAKE BURKHOLDER,
INDIVIDUALLY AND IN THEIR
CAPACITY AS A LIMITED
PARTNERS OF WESTERN
DEVELOPMENT GROUP, LP, AND
AS MANAGERS OF WESTERN
DEVELOPMENT GROUP, GP, LLC
Plaintiffs,
V. mwmmwmmwmmwwmwmmwwmwmmw
192ml JUDICIAL DISTRICT
THOMAS A. MACDONALD AND
KAREN MACDONALD
Defendants.
AND WESTERN DEVELOPMENT
GROUP, LP AND WESTERN
DEVELOPMENT GROUP GP, LLC
Nominal Defendants. DALLAS COUNTY, TEXAS
DEFENDANTS THOMAS A. MACDONALD AND KAREN MCDONALD’S
SPECIAL APPEARANCE AND ORIGINAL ANSWER AND
SPECIAL EXCEPTIONS SUBJECT THERETO
Come now, Defendants Thomas A. Macdonald and Karen McDonald (“Defendants”) Who
file this their Special Appearance pursuant t0 Rule 120a of the TEXAS RULES OF CIVIL
PROCEDURE for the sole purpose of obj ecting t0 the jurisdiction of this Court over them, as they
are not subject to jurisdiction in Texas, and respectfully request that the Court dismiss them a
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 1
parties to this suit.1
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S
SPECIAL APPEARANCE
I. INTRODUCTION
1.01 This Court does not have jurisdiction over Defendants. Defendants attach their
Declarations as Exhibit “A” and Exhibit “B” in support of this Special Appearance. Defendants
are individual residing in the state of Oregon, have not purposefully availed themselves 0f the
privileges and benefits 0f conducting business in Texas, and lack sufficient minimum contacts t0
subj ect them t0 jurisdiction in the state 0f Texas. Defendants d0 not maintain a principle place 0f
business in Texas, have not designated a registered agent for service of process in Texas, do not
have a mailing or telephone listing in Texas, do not advertise 0r solicit services in Texas, own n0
personal 0r real property in Texas, and do not maintain a residence in Texas. Simply put,
Defendants do not do business in Texas and lack sufficient minimum contacts to subject them to
personal jurisdiction here. Accordingly, this Court lacks personal jurisdiction over Defendants in
Texas and any attempt t0 exercise jurisdiction over Defendants in Texas would offend traditional
notions of fair play and substantial justice, and amount to a Violation of constitutional due process.
1.02 Plaintiffs fail t0 even allege basic jurisdictional facts in support 0f their claim
against Defendants. Plaintiffs only alleged basis for jurisdiction is Defendants are partners 0f a
1
Defendants provide notice that this Special Appearance Will be amended in accordance With the provisions 0f Texas
Rule 0f Civil Procedure 120a t0 verify the facts negating jurisdiction. Accord Dawson-Austin v. Austin, 968 S.W.2d
3 19, 322 (Tex. 1998) (holding an unverified special appearance preserves jurisdictional challenge and does not waive
jurisdictional challenge; “Dawson—Austin did not enter a general appearance by filing an unsworn special appearance
or by amending it it was overruled”).
only after
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 2
Texas Partnership and/or members of a Texas Limited Liability Company are insufficient
jurisdictional facts that would subj ect Defendants to jurisdiction in Texas.
1.03 This Court should grant Defendants Special Appearance and dismiss them from
this suit for two reasons: (1) mere membership in a Partnership or Limited Liability Company
organized under Texas law is insufficient t0 confer jurisdiction (Texas, as well as states across the
country, holds this to be insufficient); and (2) Plaintiffhas not plausibly alleged jurisdictional facts
related specifically to Defendants in their Petition, much less multiple facts that would be sufficient
t0 bring Defendants within the provisions of the Texas long-aim statute. It is Plaintiffs’ burden t0
allege facts sufficient to maintain jurisdiction, and they have failed to d0 so.
1.04 Finally, even if Plaintiffs had alleged facts sufficient to create a prima facia case 0f
Defendants "doing business" in Texas, this allegation would be negated by the declarations 0f
Defendants. For these reasons the exercise of jurisdiction over Defendants is improper and
Defendants should be dismissed from this suit.
II. ARGUMENT AND AUTHORITY
A. Special Appearance Standard.
2.01 In order for a Texas court t0 exercise jurisdiction over a nonresident, two conditions
must be met? The exercise ofjurisdiction must: (1) be authorized by the Texas long-arm statute;
and (2) must comport With the due process guaranteed by the state and federal constitutions.3
Because the Texas long-arm statute “permits Texas courts t0 exercise jurisdiction t0 the fullest
extent permissible under the federal constitutional requirements of due process,” a Texas court
2
Schlobohm v. Schapiro, 784 S.W.2d 355, 356 (TeX. 1990).
3
Id
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 3
may only exercise jurisdiction over a nonresident defendant if that defendant has “purposefully
established the requisite minimum contacts With Texas, and the exercise ofjurisdiction comports
with traditional notions of fair play and substantial justice.”4 Sufficient contacts exist When the
nonresident defendant has “purposefully availed” himself 0f the “privileges and benefits 0f
conducting business in the foreign jurisdiction.”5
2.02. Personal jurisdiction exists When the nonresident defendant’s minimum contacts
“give rise to either specific 0r general jurisdiction.”6 While specific jurisdiction is established
When the nonresident defendant’s alleged liability arises from or is related t0 the activities he
conducted in the forum state, Texas has general jurisdiction over a defendant When his contacts
with Texas are “continuous and systematic,” regardless 0f whether the cause 0f action arises from
0r is related to the defendants’ activities in Texas.7
2.03. Initially, the plaintiff carries the burden 0f pleading allegations that are sufficient
to invoke personal jurisdiction over the nonresident defendant under the Texas long-arm statute.8
Then, the nonresident defendant has the burden of negating all grounds for personal jurisdiction
that the plaintiff alleged in its petition.9 Due to the fact that the plaintiff “defines the scope and
nature of the lawsuit, the defendant's corresponding burden to negate jurisdiction is tied to the
allegations in the plaintiffs pleading.”10
4
Id.
5
BCM Software Belgium, N. V. v. Marchand, 83 S.W.3d 789, 795 (TeX. 2002).
6
Id.
7
Id.
8
Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex. 2007).
9
Id.
1°
Kelly v. Gen. Interior C0nst., Ina, 301 S.W.3d 653, 658 (Tex. 2010).
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 4
B. Plaintiffs fail to carry their initial burden 0f pleading allegations sufficient t0
invoke personal jurisdiction over Defendants in the State 0f Texas.
a. Plaintiffs fail to allege facts sufficient for general iurisdiction.
2.04. Plaintiffs fail to allege a colorable basis for suit in Texas against Defendants much
less facts sufficient t0 confer general jurisdiction. Plaintiffs have the initial burden of pleading
sufficient allegations to bring a nonresident defendant within the provisions of the Texas long-arm
statute, and therefore it must plead enough facts t0 affirmatively demonstrate that the trial court
11
has personal jurisdiction over the defendant.
2.05 From the face of the pleading, it must be evident to the court that a defendant has
12
purposefully availed himself of the privileges and protections of conducting business in Texas.
2.06. Here, Plaintiffs judicially admit in their Petition for Judicial Expulsion that:
13
0 Defendants do not maintain a place of regular business in Texas;
14
0 Defendants have no designated agent in Texas;
0 Bernard Burkholder is a resident of Mississippi;15
0 Blake Burkholder is a resident of Mississippi;16
17
0 Thomas A. MacDonald is a resident of Oregon;
11
BCM Software, 83 S.W.3d at 795; Texas Dept. ofCriminal Justice v. Miller, 51 S.W.3d 583, 587 (TeX. 2001).
12
Kelly, 301 S.W.3d at 660-61; BMC Software, 83 S.W.3d at 795 (“Although not determinative, foreseeability is an
important consideration in deciding Whether the nonresident defendant has purposefully established ‘minimum
contacts’ with the forum state. However, a defendant should not be subj ect to a foreign court's jurisdiction based upon
‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.”) (internal citations omitted).
13
Plaintiff’ Petition for Judicial Expulsion at 1.03
14
Id. at 1.04
15
Id. at 1.02
16
Id. at 1.03
17
Id. at 1.04
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 5
18
0 Karen MacDonald is a resident 0f Oregon.
2.07 As gleaned from Plaintiff’s Petition for Judicial Expulsion, the basis for personal
jurisdiction over the Defendants appears t0 be that:
19
Western Development Group, LP is a Texas Limited Partnership.
20
Western Development Group GP, LLC is a Texas Limited Liability Company.
Defendants are engaged and have engaged in business in Texas.
Defendants have executed agreements, contracts, deeds, loans and other
documents including, Without limitation, (i) the Partnership Agreement 0n behalf
0f the Texas Partnership (ii) the Regulations on behalf of the Texas General
Partner, (iii) a Partnership Pledge Agreement on behalf of the Texas Partnership,
(iv) loan agreements on behalf of the Texas Partnership and (V) deeds 0n behalf of
the Texas Partnership;
Defendants have organized and invested in a Texas limited partnership as a limited
partner and currently each own a 24. 7 5% limited partnership interest in the
Partnership (collectively 49.5%);
Defendants have organized and invested in a Texas limited liability company as
members and currently each own a 25% membership interest in the General Partner
18
Id. at 1.05
19
Id. 1.05
2°
Id. 1.06
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 6
0 The claims and controversies involved in this cause of action arise out of 0r relate
to the Defendants contacts with the state 0f Texas with regard to the Partnership
and General Partnership; and
o Both the Partnership Agreement and the General Partner Regulations provide that
such entities shall be governed by the laws 0f the state 0f Texas; and (f) both the
Partnership Agreement, the General Partner Regulations and certificates filed with
the Texas Secretary of State provide that their Registered Agent, Principal Place of
Business and/or Principal Office are located in Dallas County, Texas.”
2.08 Plaintiffs attempt to exercise over the Defendants by Virtue of Western
Development Group, LP and Western Development Group GP, LLC being registered in Texas is
misplaced. In Texas, partnerships and limited liability companies considered t0 be citizen of the
states in which one or more of its members are citizens.”
2.09 As the only partners and or members of either 0f these entities are citizens 0f
Mississippi and Oregon, Plaintiff have not pleaded sufficient facts t0 demonstrate that there is
personal jurisdiction over the Defendants.
2. 1 0 Similarly, Plaintiffs assertion that there is personal jurisdiction over the Defendants,
by Virtue of their participation 0f membership in the foregoing entities is inaccurate and not
consistent with Texas law. Courts both in Texas and across the nation hold that mere membership
in a business entity is insufficient to confer general jurisdiction.”
21
Id. at 1.03
22
Harvey v. Gray WolfDrl'lling C0., 542 F.3d. 1077, 1080-81 (5th Cir. 2008); See also Carden v. Arkoma Assocs.,
494 U.S. 185, 195—96, 110 S.Ct. 1015, 1021—22, 108 L.Ed.2d 157 (1990)
23
See Breckenridge Enterprises, Inc. v. Avio Alternatives, LLC, 3:08-CV-1782-M, 2009 WL 1469808 (ND. TeX. May
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 7
2.1 1. Rather, to obtain jurisdiction over a member 0f a business entity, a separate
24
minimum contacts test must be performed to determine if Defendants are “at home” in Texas.
Plaintiffs do not and cannot allege such facts, and thus there is no general jurisdiction over
Defendants in Texas.
C. Plaintiff fails to allege facts sufficient t0 confer specific jurisdiction.
2.12. As stated above, there are no jurisdictional facts plead that would confer specific
jurisdiction. In determining whether specific jurisdiction exists, the Court must conduct the
minimum contacts analysis separately for each cause of action.” For specific jurisdiction to exist,
the plaintiffs claim must arise out 0f 0r be related to those contacts.26
2.13. Here, the only contact with Texas Defendants have even tenuously related to this
action is their alleged membership interest in Western Development Group, LP is a Texas Limited
Partnership and/or Western Development Group GP, LLC is a Texas Limited Liability Company,
which is insufficient to conferjurisdiction. Plaintiffs have not and cannot allege more. Defendants
have committed no tort in Texas and did not conduct business in Texas related t0 this matter
2.14. This Court need only look at the face 0f the petition t0 unequivocally determine
27, 2009)(h01ding that members’ contact with Texas due t0 such member’s activities performed 0n behalf 0f an LLC
were Within the scope 0f the “fiduciary shield doctrine” and, therefore, the court did not have personal jurisdiction);
see also Mountain Funding, LLC v. Blackwater Crossing, LLC, N0. 3:05CV5 13-MU, 2006 WL 1582403, at *2
(W.D.N.C. June 5, 2006)(h01ding that since LLCS protect members from liability for company obligations, personal
jurisdiction over an LLC does not immediately extend personal jurisdiction t0 its members); Clemend v. Lipson, 999
So. 2d 1072 (Fla. Dist. Ct. App. 2008)(holding that personal jurisdiction could not be extended over LLC managers
when such managers acted only in the capacity of managers and there were no facts to support that the managers had
engaged in independent torts.)
24
Breckenridge Enterprises, Ina, 2009 WL 1469808, at *4-5.
25
Id. at *2.
26
Id.
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 8
that there are no specifically alleged basis for personal jurisdiction over the Defendants, and that
the Defendants should be dismissed as a party t0 this lawsuit.
2.15. For these reasons, Texas has neither general nor specific jurisdiction over the
Defendants, Defendants do not have minimum contacts with Texas sufficient to establish
jurisdiction over them in the State 0f Texas, and therefore Defendants respectfully submit that this
Court should grant this Special Appearance and dismiss Defendants from this lawsuit.
III. RESERVATION OF RIGHTS
3.01. This Special Appearance t0 contest the court's assertion of personal jurisdiction
over Defendants is filed prior to any other plea, pleading, or motion Defendants will file in this
proceeding — including, but not limited to, their Original Answer detailed below. Any such
pleadings filed hereafter, including the below sections containing Defendants Original Answer,
are strictly conditioned upon, Without waiver of, and subject to the above Special Appearance,
until the issue of personal jurisdiction over Defendants is resolved.
IV. GENERAL DENIAL
4.01. This General Denial is being filed subject t0, and Without waiver 0f, Defendant’s
Special Appearance, above. Pursuant to Rule 92 ofthe TEXAS RULES OF CIVIL PROCEDURE,
Defendants generally deny each and every, all and singular, allegations contained in the live
petition filed in this lawsuit by Plaintiffs. Plaintiffs in the above-styled and numbered cause, along
with any other pleading seeking affirmative relief subsequently filed by Plaintiffs in this lawsuit,
Whether amended, supplemental, and/or otherwise, and Defendants hereby demand strict proof
thereof by a preponderance 0f the credible evidence.
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 9
V. AFFIRMATIVE AND OTHER DEFENSES
5.01. Subject to, and Without waiver 0f, Defendants’ Special Appearance, Defendants
assert the following affirmative defenses:
0 Plaintiffs have failed t0 state a claim against Defendants on Which relief can be
granted.
o Plaintiffs’ claims are barred, in whole 0r part, under the economic loss doctrine.
o Plaintiffs’ claims are barred by judicial estoppel.
o Plaintiffs’ claims are barred, in Whole or part, under the Fiduciary Shield Doctrine.
0 Defendants assert the affirmative defense of equitable estoppel.
0 Defendants assert that the Court does not have subj ect matter jurisdiction.
0 Defendants reserve the right t0 assert other affirmative and other defenses as
discovery warrants.
VI. PRAYER
WHEREFORE, PREMISES CONSIDERED, Defendants pray that this Court set
Defendants’ Special Appearance for hearing as early as practical, sustain Defendants’ Special
Appearance, and that this entire proceeding be dismissed for want ofjurisdiction over Defendants.
Subj ect to and Without waiving Defendants Special Appearance, Defendants pray that Plaintiffs
take nothing from this action and grant Defendants any and all relief they may show themselves
entitled in law 0r equity.
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 10
Respectfully submitted,
COX L.L.P.
/s/ Jas Braich
CLINTON V. COX
StateBar No. 24040738
ccox@coxpllc.com
JAS BRAICH
StateBar No. 24033 1 98
jbraich@coxpllc.com
7859 Walnut Hill Lane, Suite 3 10
Dallas, Texas 75230
214-444-7050
469-340-1884 [Fax]
ATTORNEYS FOR DEFENDANT
CERTIFICATE OF SERVICE
Ihereby certify that a true and correct copy of the foregoing document has been served in
accordance With the TEXAS RULES OF CIVIL PROCEDURE 0n the 23rd day of September, 2019 t0 all
/s/ Jas Braich
JAS BRAICH
DEFENDANTS THOMAS A. MACDONALD AND KAREN MACDONALD’S SPECIAL APPEARANCE
AND ORIGINAL ANSWER SUBJECT THERETO PAGE - 11
EXHIBIT A
CAUSE NO. DC-19-11136
BERNARD BURKHOLDER AND IN THE DISTRICT COURT
BLAKE BURKHOLDER,
INDIVIDUALLY AND IN THEIR
CAPACITY AS A LIMITED
PARTNERS OF WESTERN
DEVELOPMENT GROUP, LP, AND
AS MANAGERS OF WESTERN
DEVELOPMENT GROUP, GP, LLC
Plaintiffs,
V. mwmmwmmwmmwwmwmmwwmwmmw
192ml JUDICIAL DISTRICT
THOMAS A. MACDONALD AND
KAREN MACDONALD
Defendants.
AND WESTERN DEVELOPMENT
GROUP, LP AND WESTERN
DEVELOPMENT GROUP GP, LLC
Nominal Defendants. DALLAS COUNTY, TEXAS
DECLARATION OF THOMAS A. MACDONALD
State 0f Oregon
WWW
County 0f Lake County
1. My name is Thomas A. Macdonald. My address is P.O. BOX 87, Summer Lake,
Oregon. I am over 18 years of age and am fully competent to make this Declaration and testify. I
am of sound mind and have never been convicted of any felony or crime of moral turpitude. The
facts stated in this Declaration are Within my personal knowledge and are true and correct:
DECLARATION OF THOMAS A. MACDONALD
2. I have read Defendant Special Appearance and Original Answer Subject
Thereto (the “Special Appearance”). The facts set forth in the Special Appearance are based 0n
my personal knowledge and are true and correct.
3. I am an individual residing in the state of Oregon.
4. I have never resided in Texas.
5. I conduct n0 business in Texas and have n0 clients in Texas.
6. I am not required to and do not maintain any agent for service of process in the
State 0f Texas.
7. I d0 not own or lease any interest in any real estate, warehouse, 0r other real
property in the State of Texas.
8. Ihave n0 agents or employees in the State 0f Texas.
9. Ihave not entered into any contracts in the State 0f Texas that are t0 be performed,
in whole or in part, in the State of Texas.
10. I d0 not have a mailing addresses or telephone listings in the State 0f Texas.
11. I d0 not conduct any advertising, solicitation, service or sales activities in the State
of Texas.
12. I do not maintain an office or principle place 0f business in Texas.
13. I have not previously, at any point in time, subj ected myself to the personal
jurisdiction 0f the courts of the State of Texas. Ihave never filed a lawsuit in Texas. Ihave never
sought the enforcement 0f a judgment in Texas.
14. By making this Declaration, I am, in no way, attempting to subject myself to the
personal jurisdiction of the Court or any court in Texas. This Declaration is subject t0 and
DECLARATION OF THOMAS A. MACDONALD
WwaivinganySpecialAppwm Ideclueundupemltyofpeljmyufiefingohgis
madm
THOMAS A. MACDONALD
DMNHON OF moms A. W
EXHIBIT B
CAUSE NO. DC-19-11136
BERNARD BURKHOLDER AND IN THE DISTRICT COURT
BLAKE BURKHOLDER,
INDIVIDUALLY AND IN THEIR
CAPACITY AS A LIMITED
PARTNERS OF WESTERN
DEVELOPMENT GROUP, LP, AND
AS MANAGERS OF WESTERN
DEVELOPMENT GROUP, GP, LLC
Plaintiffs,
V. mwmmwmmwmmwwmwmmwwmwmmw
192ml JUDICIAL DISTRICT
THOMAS A. MACDONALD AND
KAREN MACDONALD
Defendants.
AND WESTERN DEVELOPMENT
GROUP, LP AND WESTERN
DEVELOPMENT GROUP GP, LLC
Nominal Defendants. DALLAS COUNTY, TEXAS
DECLARATION OF KAREN MACDONALD
State 0f Oregon
WWW
County 0f Lake County
1. My name is Karen Macdonald. My address is P.O. Box 87, Summer Lake, Oregon.
I am over 18 years 0f age and am fully competent to make this Declaration and testify. I am of
sound mind and have never been convicted 0f any felony 0r crime of moral turpitude. The facts
stated in this Declaration are Within my personal knowledge and are true and correct:
DECLARATION OF KAREN MACDONALD
2. I have read Defendant Special Appearance and Original Answer Subject
Thereto (the “Special Appearance”). The facts set forth in the Special Appearance are based 0n
my personal knowledge and are true and correct.
3. I am an individual residing in the state of Oregon.
4. I have never resided in Texas.
5. I conduct n0 business in Texas and have n0 clients in Texas.
6. I am not required to and do not maintain any agent for service of process in the
State 0f Texas.
7. I d0 not own or lease any interest in any real estate, warehouse, or other real
property in the State of Texas.
8. Ihave n0 agents or employees in the State 0f Texas.
9. Ihave not entered into any contracts in the State 0f Texas that are t0 be performed,
in whole or in part, in the State of Texas.
10. I d0 not have a mailing addresses or telephone listings in the State 0f Texas.
11. I d0 not conduct any advertising, solicitation, service or sales activities in the State
of Texas.
12. I do not maintain an office or principle place 0f business in Texas.
13. I have not previously, at any point in time, subj ected myself to the personal
jurisdiction 0f the courts of the State of Texas. Ihave never filed a lawsuit in Texas. Ihave never
sought the enforcement 0f a judgment in Texas.
14. By making this Declaration, I am, in no way, attempting to subject myself to the
personal jurisdiction of the Court or any court in Texas. This Declaration is subject t0 and
DECLARATION OF KAREN MACDONALD
DECLARAM OF KAREN MACDONALD