author: MURRY B. COHEN, Justice.

text:
    PREUSSAG AKTIENGESELLSCHAFT, Appellant, v. Marshall COLEMAN, et al., Appellees.

    No. 01-99-00502-CV.
    Court of Appeals of Texas, Houston (1st Dist.).
    March 30, 2000.
    Rehearing Overruled May 5, 2000.

      Kathy D. Patrick, Jennifer Horan Greer, Andrew L. Pickens, John Albert Basinger, Houston, for appellant.
    Francis I. Spagnoletti, Houston, for ap-pellees.
    Panel consists of Justices COHEN, NUCHIA, and DUGGAN.

       A complete list of all appellees appears on pages i through xxvi of appellant’s brief.

      . The Honorable Lee Duggan, Jr., retired Justice, Court of Appeals, First District of Texas at Houston, sitting by assignment.

   OPINION

MURRY B. COHEN, Justice.

Preussag Aktiengesellschaft (“Preussag AG”) takes this interlocutory appeal from an order denying its special appearance. See Tex. Civ. Prac. & Rem.Code Ann. § 51.014(a)(7) (Vernon Supp.2000). The issue in this appeal is whether a German holding corporation, whose relations with its indirect Texas subsidiaries are virtually its sole Texas contacts, must defend, in a Brazoria County court, a cause of action based on its sales of products to Iraq, when those products were allegedly converted to weapons and later used against American soldiers. We answer this question in the negative. Therefore, we reverse and remand with instructions to dismiss Preussag AG for lack of personal jurisdiction.

I. Factual and Procedural Background

Appellees are veterans of the 1991 Persian Gulf War and some of their family members. Of the nearly 1800 plaintiffs in this case, approximately 185 are Texas residents. Appellees allege they were exposed to biological and chemical materials in Iraq or Kuwait during the war, resulting in physical and emotional injuries. Appellees maintain that the over 80 defendants, one of which is Preussag AG, sold Iraq the biological, chemical, and other materials that it then used in weapons.

In June 1994, appellees sued the defendants in Brazoria County, Texas, on theories of negligence and product liability. Preussag AG was not yet a defendant. The defendants removed the case to the federal court, where Preussag AG was added as a defendant. Preussag AG moved to dismiss for lack of personal jurisdiction, but Judge Kent dismissed the entire case for lack of subject-matter jurisdiction. Coleman v. Alcolac, 888 F.Supp. 1388, 1404 (S.D.Tex. 1995) (order granting motion to dismiss for lack of subject-matter jurisdiction and remanding cause to state court).

On remand, Preussag AG specially appeared. The trial judge denied Preussag AG’s special appearance without filing fact findings or legal conclusions. Preussag AG appeals.

II. Standard of Review and Burden of Proof

We review all evidence to determine if Preussag AG negated all possible grounds for personal jurisdiction. Garner v. Furmanite Australia, Pty., Ltd., 966 S.W.2d 798, 802 (Tex.App. — Houston [1st Dist.] 1998, pet. denied). Existence of personal jurisdiction is a question of law, but that determination must sometimes be preceded by the resolution of underlying factual disputes. James v. Illinois Cent. R.R. Co., 965 S.W.2d 594, 596 (Tex.App.— Houston [1st Dist.] 1998, no pet.). When, as here, the trial judge files no fact findings, we presume all factual disputes were resolved to support the judge’s decision. Garner, 966 S.W.2d at 802. While we generally review for factual sufficiency, we review de novo if the underlying facts are undisputed or otherwise established. C-Loc Retention Sys., Inc. v. Hendrix, 993 S.W.2d 473, 476 (Tex.App. — Houston [14th Dist.] 1999, no pet.).

III.Jurisdictional Test

A court may assert personal jurisdiction over a nonresident defendant only if the requirements of both the Fourteenth Amendment’s due process clause and the Texas long-arm statute are satisfied. CSR, Ltd. v. Link, 925 S.W.2d 591, 594 (Tex.1996) (orig.proeeeding). Because the Texas long-arm statute reaches “as far as the federal constitutional requirements of due process will allow,” the statute is satisfied if the exercise of personal jurisdiction comports with federal due process. Id.

Federal due process requirements are two-fold. First, the nonresident defendant must have purposefully established such minimum contacts with the forum state that it could reasonably anticipate being sued there. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985). If the nonresident defendant has purposefully availed itself of the privileges and benefits of conducting business in a state, it has sufficient contacts to confer personal jurisdiction. Id. Random, fortuitous, or attenuated contacts do not suffice. Id. It is the quality and nature of the contacts, rather than their number, that is important. Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 230 n. 11 (Tex.1991). Minimum contacts are particularly important when the defendant is a foreign national because of the unique and onerous burden of defending a suit in a foreign legal system. Asahi Metal Indus. Co., Ltd. v. Superior Court, 480 U.S. 102, 114, 107 S.Ct. 1026, 1033, 94 L.Ed.2d 92 (1987); CSR, Ltd., 925 S.W.2d at 595.

Minimum contacts analysis is further divided into general and specific personal jurisdiction. CSR, Ltd., 925 S.W.2d at 595. Appellees concede that this is a case of general personal jurisdiction, which requires Preussag AG to show its contacts in Texas were not continuous and systematic. Id. To support a finding of general jurisdiction, the defendant’s forum activities must have been “substantial,” which requires stronger evidence of contacts than for specific personal jurisdiction. Id.

Second, if the nonresident defendant has purposefully established minimum contacts with the forum, the exercise of jurisdiction must comport with fair play and substantial justice. Burger King Corp., 471 U.S. at 477, 105 S.Ct. at 2184; Guardian Royal, 815 S.W.2d at 231

IV. Jurisdictional Facts

The following evidence was developed at the special appearance hearing. Preussag AG is a publicly traded German corporation headquartered in Hanover, Germany. It is an investment holding company, with direct and indirect investments in 500 to 600 subsidiaries worldwide. It does not manufacture anything. It is not authorized by the state government of Texas to do business in Texas, and it does not manufacture or sell products, have an office, keep business records, solicit business, own real property, or have an agent for service of process in Texas. Preussag AG did not enter into contracts in Texas for the products it sold to Iraq, and the sales of these products took place entirely outside Texas.

A. Preussag AG’s Six Indirect Subsidiaries in Texas

Preussag AG does, however, own indirect interests in six companies that do business in Texas: (1) Delta Steel, Inc. (“Delta”), (2) Cron Chemical Corporation (“Cron”), (3) Deutag Marketing and Technical Services, Inc. (“DMTS”), (4) PB-KBB Inc., Houston (“PB-KBB”), (5) Pipe-tronix, Houston (“Pipetronix”), and (6) Triple D Supply Corporation Dallas (“Triple D”). Like many of Preussag AG’s worldwide subsidiaries, the indirect Texas subsidiaries are part of what the parties call the “Preussag Group” of companies. Ap-pellees allege that Preussag AG’s contacts with these six Texas subsidiaries make it amenable to suit in Texas. Therefore, we discuss these indirect six Texas subsidiaries further below.

B. The Subsidiaries that were Sued

Besides Preussag AG, appellees also sued five direct or indirect subsidiaries of Preussag AG: (1) Deutshe Tiefbohr AG (“Deutag”); (2) Preussag Handel; (3) Preussag North America (“PNA”), formerly Preussag Industrial Corporation (“PIC”); (4) Preussag Stahl AG (“Stahl”); and (5) Preussag Anlagenbau GmbH (“An-lagenbau”), the only directly owned subsidiary. Although these five subsidiaries were not Texas corporations, they did not contest personal jurisdiction.

Appellees’ “live” petition at the time of the hearing alleged that Preussag AG and these five subsidiaries were alter egos of each other for liability purposes, but appel-lees now admit that these five subsidiaries “are not the foundation of the jurisdictional finding” in this case, through alter ego or agency theory or otherwise. Therefore, we discuss them only insofar as they relate to the six indirect Texas subsidiaries on which appellees’ jurisdictional argument rests.

C. Preussag AG’s Relevant Operational Scheme

Following are what the parties identify as the relevant aspects of the Preussag Group’s operational scheme. This operational scheme applies to at least some of the six indirect Texas subsidiaries.

German law requires Preussag AG to publish an annual, consolidated financial statement including the financial information of any subsidiary in which it owns a 50 percent minimum interest. To comply, Preussag AG periodically requests financial information from its subsidiaries. This is sometimes accomplished by the subsidiaries’ reporting their information to another Preussag Group company, which then forwards it to Preussag AG; other times, the subsidiaries report directly to Preussag AG.

To prepare these financial reports, some Preussag Group companies, including at least some of the six indirect Texas subsidiaries, use Preussag AG’s “Greenbook,” which uses standard German accounting procedures. Preussag AG keeps all the reported data in a computer database; therefore, Preussag Group companies receive Preussag AG’s Holding Management Handbook on how to enter this data.

Preussag AG has extended lines of credit, made on commercially reasonable terms and at market-rate interest, to some of the Preussag Group companies. It also has certain cash-management procedures for group companies. For example, to facilitate foreign-currency payments by some of its German subsidiaries, Preussag AG has foreign currency accounts through which it makes payments on their behalf. The Preussag Group companies are expected to use these accounts for such payments.

Preussag AG also provides “banking” sendees to some Preussag Group companies to facilitate intercompany dividend payments, loan repayments, or payments for services and products sold between group companies. These “banking” services are more akin to a debit/credit or clearing-account system. For example, on the subsidiaries’ instructions, Preussag AG debits or credits their accounts monthly, depending upon which company bought and which sold goods or services that month. The participating Preussag Group companies also receive a monthly report, like a checking account statement, reflecting the month’s debits, credits, and current balance. As part of this system, the participating Preussag Group companies may open new bank accounts only with the approval of Preussag AG’s financial department, and excess funds from the participants’ bank accounts are transferred daily to Preussag AG. This is not an accounting system, as each subsidiary maintains its own accounting system.

Each Preussag Group subsidiary has its own primary insurance, but Preussag AG’s excess liability policy also covers its subsidiaries in which it holds a 50 percent minimum interest. At one time, Preussag AG studied the feasibility of consolidating the total employee benefit package for the Preussag Group’s U.S. subsidiaries. A memorandum shows that Preussag AG representatives attended two meetings in 1992 or 1993, one in Florida and the other in Illinois, for this purpose.

Preussag AG sometimes provides administrative assistance to the Preussag Group companies at the companies’ cost, e.g., insurance brokerage services, computer support, and project financing for some of the Preussag Group companies’ customers.

D. Specific Preussag AG Contacts with the Six Indirect Subsidiaries in Texas

In addition to the contacts under the Preussag Group’s general operational scheme, appellees argue the following contacts between Preussag AG and its six indirect Texas subsidiaries show personal jurisdiction.

1. Delta

Delta is a Texas corporation providing general warehousing, offering value-added processing, and producing plates, coil, and tubing. It is owned 55 percent by PNA, which is owned 100 percent by Salzgitter Huttenwork GmbH, which in turn is owned 100 percent by Preussag AG. Delta buys some steel products from, is managed by, and reports to Preussag Handel, which is 100 percent owned by Preussag Stahl, which in turn is owned 99.5 percent (directly or indirectly) by Preussag AG.

Pursuant to Preussag Handel’s regulations, Delta submits capital expenditure requests over $40,000 to Preussag Handel for its approval; Preussag Handel in turn submits the requests for Preussag AG’s approval. Delta has also provided Preus-sag AG with proposed capital budgets for approval and comment. Using the Green-book, Delta reports its financial and related information regularly to Preussag Handel, which sends it to Preussag AG for the annual, consolidated financial statement required by German law. Preussag AG has apparently also transferred funds to Preussag Handel’s account on Delta’s behalf, under the Preussag Group cash-management system discussed above, to pay for sales from Preussag Handel to Delta.

Appellees also point to the following direct contacts between Preussag AG and Delta. The record contains copies of 11 letters between the two companies from 1993 through 1995. One is a letter asking Delta for a copy of a rent contract and an explanation why certain Delta executives’ salaries had increased, although Delta’s president testified that Preussag AG’s approval was not needed for salary expenditures. Some others concern the reporting for Delta that Preussag AG must compile. Delta’s phone records also reflect it made about 35 calls over several years to Hanover, where Preussag AG is headquartered. In 1994, Preussag AG’s new board chairman once met in Boston with officers of all U.S. Preussag Group subsidiaries, including Delta’s president, to discuss their products, expectations, and performance and the chairman’s global philosophy. The only other meeting between Delta and Preussag AG representatives was in 1995, when someone from Preussag AG’s corporate development department came to Houston while “visiting various companies to see their operations.” Preussag AG once wrote what Delta’s president described as a “comfort letter” that could be used in support of loans that Delta’s parent company, PIC (now PNA), would take out on Delta’s behalf. The letter said Preussag AG would use its influence on PIC to ensure PIC met any obligations under the credit agreements PIC executed for Delta’s benefit. We have found no evidence that this comfort letter was written for or sent to Texas banks, and Delta’s president testified PIC’s lenders at the time were not in Texas. Finally, every few years and at its own expense, Preus-sag AG sent either its own auditors or those of Price Waterhouse to audit Delta.

2. Triple D

Triple D is a Texas corporation that supplies drilling equipment mainly to a Preussag Group drilling company. Triple D is owned by Deutag Friesland BV, which is owned by Deutag. The evidence conflicts whether Preussag AG owns Due-tag directly, or whether Deutag is 100 percent owned by Preussag Energie GmbH, which Preussag AG did not fully acquire until 1991. Under its cash-management system described above, Preus-sag AG has transferred funds to Triple D’s Houston bank account on Deutag’s behalf, to pay for sales from Triple D to Deutag.

Triple D’s audits are sent to Preussag AG’s auditors. Triple D now reports its financial information to Deutag, but for a few years during the 1980s, it reported to Preussag AG directly using the Green-book.

8. PB-KBB

PB-KBB, a Delaware corporation with a Houston office, specializes in subsurface systems and technology. PB-KBB is owned half by a Preussag Group company (KBB) and half by a company outside the Preussag Group. Preussag AG has extended lines of credit to PB-KBB at market-rate interest. Some of these loans were deposited into PB-KBB’s Texas bank account. The record contains several faxes and memoranda of phone conversations discussing potential or actual loans from Preussag AG to PB-KBB from 1987 to 1992. There was contrary testimony from PB-KBB’s vice-president of finance that PB-KBB did not borrow from Preussag AG, but we presume the judge found it did, as there were no fact findings to settle this conflicting evidence. The record also shows that PB-KBB sometimes requested to borrow or got loans from (1) Preussag Finance BV, (2) an undefined “Preussag,” and (3) PIC (now PNA), as well. Preussag AG once sent its own auditors, and another time sent those of Price Waterhouse, to audit PB-KBB.

4.Pipetronix

Pipetronix is a Texas corporation that offers pipeline inspections and cleaning services in the U.S. mainly for Pipetronix GmbH. Pipetronix became part of the Preussag Group in 1991 and is a wholly owned subsidiary of PNA, a corporation headquartered in Chicago that is the holding company for most of the Preussag Group’s U.S. companies. Pipetronix’s phone records show it called Germany very often over several years. A Pipetro-nix officer testified many calls were likely to Pipetronix GmbH, located in Karlsruhe, Germany, because the two companies frequently spoke by phone, but it appears that roughly a third were to Hanover, where both Preussag AG and Anlagenbau were headquartered in the same building. Because Anlagenbau is the parent of Pipe-tronix GmbH, for which Pipetronix provides services, the same Pipetronix officer speculated that his office might have sometimes called Anlagenbau, but Preussag AG did not show how many of the calls to Hanover were to it or to Anlagenbau. Using the Greenbook, Pipetronix provides its financial reports to PNA, which forwards them to Preussag AG. Finally, to show Preussag AG’s “pervasive” control over Pi-petronix, appellees rely on the following testimony of a Pipetronix officer, explaining how he had heard of Preussag AG:

I suppose daily in conversation — not daily, but in conversation around the office, obviously there’s reference to who Preussag [AG] is, but not ever in .any relationship as to any reporting to them or anything.... I think it’s more an identity thing, as far as we’re concerned, in that Preussag [AG] is the big mother in the sky up there somewhere, you know, and I think we can all identify that we are a part of the Preussag AG companies, but other than that, no relationship at all.

5. DMTS

DMTS has offices in Houston and is owned by Deutag. Deutag and DMTS, which markets drilling services, conduct drilling business in the U.S. A deposit slip indicates that Preussag AG paid some of DMTS’s invoices to Deutag, depositing funds into DMTS’s Texas bank account.

6. Cron

Cron is a Texas company that is owned by Amalgamet, Inc. Using the Greenbook, Cron reports its financial and operations information to Amalgamet’s London office, which sends the information to Preussag AG for the annual, consolidated financial statement required by German law. De-loitte & Touche prepares Cron’s year-end account for Preussag AG.

E. Other Actions by Preussag AG

1. Contracts

In 1986, Preussag AG sold its stock in Preussag Oil & Gas back to the corporation. The agreement recites it is “governed by the laws of the State of Texas.”

In 1992, PB-KBB merged into Preussag Oil & Gas. The agreement recited that these two companies had approved the merger “pursuant to the Texas Business Corporation Act.” Preussag AG also signed the agreement, but solely as indem-nitor for pre-merger environmental liability of Preussag Oil & Gas, its former indirect subsidiary. The agreement was to be “governed by, and construed in accordance with, the laws of the State of Texas.”

2. Texas Attorneys

From about 1986, Vinson & Elkins’s Houston office performed various services for Preussag AG or its subsidiaries. For example, the two contracts discussed above were possibly executed with the firm’s assistance, as copies of the agreements were in its records.

Appellees first point to around 27 invoices for the firm’s services from 1986 to 1993, some including fairly substantial fees. Some invoices were billed to Preus-sag Oil & Gas’s account, but most were billed to that of “Preussag AG,” showing a Houston address. However, it appears the vast majority of these invoices were mailed to Preussag Oil & Gas in Houston, not Preussag AG, or were for services that could have been rendered only for the former. The record also contains a 1990 phone message instructing that invoices should be billed to the account of “Preus-sag Oil & Gas,” not “Preussag AG.” Nevertheless, because there are no fact findings, we must presume the trial judge found that at least the few invoices that (1) were not mailed to Preussag Oil & Gas or (2) did not itemize services that could have been performed only for Preussag Oil & Gas were for the firm’s work for Preussag AG.

Appellees also point to about 16 items of correspondence between Preussag AG and the firm from 1993 to 1996. Some of these referenced travel plans or meetings, a few were personal, and others concerned an attorney’s service on PNA’s board after this lawsuit was filed. In 1996, Preussag AG agreed to hold that attorney harmless from liability he might incur as a PNA board member.

V. Discussion

Because the Texas long-arm statute reaches as far as federal due process allows, we need examine only whether the exercise of personal jurisdiction over Preussag AG comports with federal due process. See CSR, Ltd., 925 S.W.2d at 595.

Appellees argue that Preussag AG is subject to Texas’s general jurisdiction because Preussag AG (1) has a close business relationship with its six indirect Texas subsidiaries, (2) once wrote a comfort letter on one’s behalf, (3) twice contracted with Texas entities, and (4) employed a Houston law firm. Under these facts, we disagree.

A. Preussag AG’s Relationship with its Six Indirect Texas Subsidiaries

Appellees disavow any alter ego or agency theory of personal jurisdiction, ie., they do not attempt to impute the six indirect Texas subsidiaries’ activities to Preussag AG. Rather, they focus on Preussag AG’s normal, corporate actions within the Preussag Group system — such as occasional audits; unified financial procedures for the annual reporting required by German law; a unified “banking” system, involving loans and intercompany payments and requiring some deposits into the subsidiaries’ Texas bank accounts; parent approval of large expenditures and budgets; consideration of adopting a group benefits system; and the communications and visits that accompany these activities — directed at these six indirect Texas subsidiaries.

1. Texas and Fifth Circuit Case Law: Personal Jurisdiction over Nonresident Parent Corporation

In support, appellees rely on four Texas or Fifth Circuit cases for the proposition that a “close business relationship” between a foreign parent company and its Texas subsidiary can justify subjecting the parent to Texas jurisdiction. See Conner v. ContiCarriers & Terminals, Inc., 944 S.W.2d 405, 418 (Tex.App. — Houston [14th Dist.] 1997, no writ) (plurality opinion); 3-D Elec. Co. v. Barnett Constr. Co., 706 S.W.2d 135, 139 (Tex.App. — Dallas 1986, writ refd n.r.e.); Hargrave v. Fibreboard Corp., 710 F.2d 1154, 1159 (5th Cir.1983) (Texas); Walker v. Newgent, 583 F.2d 163, 167 (5th Cir.1978) (Texas). However, the court in each of these cases was performing an alter ego analysis to pierce the veil between parent and subsidiary:

Arguing that ContiCarriers is the “alter ego” of its parent company, Continental Grain, the Conners contend that Continental Grain’s Texas contacts should be imputed to ContiCarriers. ContiCarri-ers is the wholly owned subsidiary of Continental Grain, which operates several grain elevators and maintains offices in Texas. Generally, a foreign parent corporation is not subject to the jurisdiction of a forum state simply because its subsidiary is present or doing business there. The mere existence of a parent-subsidiary relationship is not sufficient to warrant the assertion of jurisdiction over the foreign parent. In some circumstances a close relationship between a parent and its subsidiary may justify a finding that the parent “does business” in a jurisdiction through the local activities of its subsidiaries. The rationale for such an exercise of jurisdiction is that the parent corporation exerts such dominance and control over its subsidiary “that they do not in reality constitute separate and distinct corporate entities but are one and the same corporation for purposes of jurisdiction. ” These principles apply not only in the situation where jurisdiction is sought over the parent corporation through its subsidiary’s local activities, but also when jurisdiction is sought over the subsidiary through its parent corporation.

Conner, 944 S.W.2d at 418 (citations omitted, emphasis added); accord 3-D Elec., 706 S.W.2d at 139 (applying same analysis to determine whether two companies, which were not parent and subsidiary, were each other’s alter ego); Hargrave, 710 F.2d at 1159 (applying same rale in alter ego analysis); Walker, 583 F.2d at 167 (same). These cases do not create a rule that, outside an alter ego situation, a parent’s normal relationship with its subsidiary, pursuant to an overarching system that is not directed at any particular state, suffices to subject the parent to jurisdiction in its subsidiary’s state.

In fact, Conner implies the opposite. See id., 944 S.W.2d at 417-19. In Conner, it was undisputed that the two corporations maintained “significant ties,” including the sharing of headquarters outside Texas; a unified payroll and benefits system; the Texas parent’s provision of legal, accounting, and other services to the nonresident subsidiary; and the fact that -50 percent of the subsidiary’s revenue came from servicing the parent corporation. Id. at 419. The plaintiffs argued both that (1) the nonresident subsidiary had direct contacts with Texas and (2) its Texas parent’s actions could be imputed to the nonresident subsidiary under an alter ego theory. Id. Nonetheless, in discussing the subsidiary’s direct contacts with Texas, neither the plaintiffs nor the court considered the nonresident subsidiary’s everyday relations (unified benefits and payment systems, intercompany services, profit flow, etc.) with its Texas parent. See id. at 417. Rather, they considered these parent-subsidiary contacts only in connection with the alter ego analysis. See id. at 418-19. Although the case was not decided on this point, we would expect that, if such routine parent-subsidiary contacts were important in determining the nonresident subsidiary’s direct contacts with Texas, someone in Conner would have said so. No one did.

Bearry v. Beech Aircraft Corporation is also instructive. 818 F.2d 370 (5th Cir. 1987). In Beech, the survivors of two individuals killed in a Beech aircraft in Mississippi sued Beech in Texas on product liability theories. Id. at 372. Beech engaged in a nationwide marketing campaign, during which nearly $250 million of its products flowed to 17 independent Texas dealers. Id. at 373. Beech representatives occasionally visited the Texas dealers at the dealers’ request. Id. One of the Texas dealers was a wholly owned subsidiary of another Beech subsidiary. Id. Regarding this “indirect” Texas subsidiary, the Beech court noted that “because [the indirect subsidiary] is operated as a distinct corporation, the district court properly held that its contacts with Texas could not be imputed to Beech.” Id. However, the district court had also characterized the independent Texas dealers as “Beech retailers,” implicitly attributing their activities to Beech, despite Beech’s lack of control over their operations. Id. at 375 & n. 2 (“Although the district court noted that the activities of the independent dealers could not be attributed to Beech, it found the existence of the distribution system in Texas to establish conduct by Beech within that forum.”). The district court had further characterized all aircraft sales to Beech’s Texas dealers as occurring in Texas, although all sales were negotiated and completed in Kansas. Id. at 375. The Fifth Circuit Court of Appeals rejected these two characterizations:

But Beech exercised its right to structure its affairs in a manner calculated to shield it from the general jurisdiction of the courts of other states such as Texas, carefully requiring the negotiation, completion, and performance of all contracts in Kansas. Beech has not afforded itself the benefits and protections of the laws of Texas, but instead has calculatedly avoided them.

Id. at 375-76. It further held that “distributors selling Beech manufactured products for their own account do not create minimum contacts sufficient to warrant general jurisdiction over Beech. Id. at 376. Beech has no office in Texas, has no agents in Texas, and has no control over the Texas dealers. Id. at 377. As such, Beech is not ‘doing business’ in Texas.” Id. at 376. We conclude that Beech generally supports Preussag AG’s position.

Dalton v. R & W Marine, Inc. also supports Preussag AG’s position. 897 F.2d 1359 (5th Cir.1990). Dalton involved the Louisiana long-arm statute, which, like that of Texas, extended to the limits of due process. Id. at 1361. In Dalton, the plaintiff sued his employer. Id. at 1360. He also sued Hartley Marine Corporation, of which the plaintiffs employer was an unincorporated division, and Midland Enterprises, Hartley’s nonresident parent corporation. Id. at 1360-61. Midland was a holding company with multiple subsidiaries, including five incorporated under Louisiana law and four licensed to do business there. Id. at 1361. Midland had no employees, offices, or property in Louisiana, and it did not conduct business there. Id. However, Midland owned most of the vessels its Louisiana subsidiaries used, bare-boat chartered the vessels to them (yielding about 12.9 percent of Midland’s total revenues), advertised nationally, and sometimes bought vessels at marshals’ sales within the state. Id.

The plaintiff argued that Midland was subject to Louisiana’s general jurisdiction because it (1) had direct contacts with Louisiana and (2) was the alter ego of its subsidiaries. Id. In rejecting the first argument (direct contacts), the Dalton court held as follows:

Dalton asserts that Midland bareboat charters its boats to its Louisiana subsidiaries ..., engages in advertising that reaches Louisiana, and has purchased vessels at marshals’ sales within the state. These contacts, however, are not sufficiently systematic and continuous to constitute a general presence in the state. The strongest support for jurisdiction is Midland’s bareboat charters, which by definition vest most of the incidents of ownership in the charterer operating the vessel. Although Midland’s continued ownership of these vessels presents a somewhat more “continuous and systematic” presence in the state than Beech’s airplane sales in Be-arry, like Beech, Midland takes care that these charters are entered into, and payments made pursuant to them are remitted, in Cincinnati. A corporation’s “obvious intent to exercise its due process rights” should not be disregarded lightly.

Id. at 1362 (internal citations omitted). In short, the direct contact analysis included such things as bareboat chartering contracts with the subsidiaries, but did not include the type of intercorporate activities, such as unified banking and benefit schemes and communications, on which ap-pellees rely to show Preussag AG’s general presence in Texas. In contrast, when the Dalton court rejected the second argument (alter ego), it considered these contacts:

Several factors point to Midland as the alter ego of its subsidiaries. Midland owns 100% of its subsidiaries and remains responsible for general policy. Its subsidiaries funnel their revenues into centralized bank accounts and file a consolidated federal tax return with Midland. Finally, Midland offers benefit plans to its subsidiaries’ employees. Nonetheless, these factors are outweighed, albeit modestly, by the fact that Midland observes corporate formalities, makes its subsidiaries responsible for daily operations including all personnel decisions, and allows each subsidiary to keep its records and accounts in separate books and file its own state tax return. Having concluded that Midland cannot be considered the alter ego of its subsidiaries, we need not address whether Hartley can be considered the alter ego of Midland.

Id. at 1363. Dalton indicates that the type of parent-subsidiary contacts appellees rely on to show jurisdiction over Preussag AG — such as unified banking and benefits schemes, i.e., those routinely occurring under the overall Preussag Group system— are more properly considered as part of an alter ego analysis, rather than as examples of Preussag AG’s direct contacts with Texas. See also Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 214 (5th Cir. 2000) (op. on remand) (holding (1) foreign holding company was not subject to Texas jurisdiction because of its subsidiaries’ activities there absent alter ego showing; (2) considering holding company’s receipt of dividends from, interest-bearing loans to, and percentage ownership in subsidiaries only in alter ego analysis; and (3) concluding no alter ego showing was made).

2. Other Jurisdictions’ Case Law: Personal Jurisdiction over Nonresident Parent Corporation

Appellees rely on four decisions of the federal district court for the eastern district of Wisconsin, each of which we distinguish. In Handlos v. Litton Industries, Inc., the court considered whether two wholly owned subsidiaries, which plaintiff served with process on behalf of their nonresident parent corporation, were the parent’s agents or alter egos, so that the parent was “doing business” under the Wisconsin long-arm statute through them. 304 F.Supp. 347, 348 (E.D.Wis.1969). The Handlos court concluded there was sufficient evidence of both, and it denied the motion to dismiss. Id. at 350-51. Here, in contrast, appellees disavow either agency or alter ego theory.

Appellees also rely on Hayeland v. Jaques, in which there was federal-question jurisdiction based on federal statute. 847 F.Supp. 630, 632 (E.D.Wis.1994). The Hayeland court first noted that, when a federally created right is at issue, the Fifth Amendment’s due process clause applies, rather than that of the Fourteenth Amendment. Id. It then adopted the minority view that, to determine personal jurisdiction when a federal question is involved, the court need look only to a defendant’s “national contacts,” rather than to its contacts with the state in which the federal court sits:

When exercising the power of the national sovereign, logic suggests that a federal court is not limited by the same constitutional concerns that limit the power of a state sovereign. Of course, a forum state’s long-arm statute must still be satisfied_ But once the requirements of the long-arm statute are met, the only due process concern should be whether the defendant has sufficient national contacts such that the exercise of jurisdiction by the nation’s courts under the nation’s laws does not offend traditional notions of fair play and substantial justice. Here, it is clear that [the nonresident defendant] has extensive contacts with the United States. The only remaining question is whether jurisdiction is satisfied under Wisconsin’s long-arm statute.

Id. at 634 (emphasis added). The Haye-land court then concluded that the nonresident defendant was amenable to suit under the Wisconsin long-arm statute through the actions of its Wisconsin subsidiary, because case law interpreting that statute had held a subsidiary’s actions could be so considered. Id. In contrast, a “national contacts” analysis does not apply in state court, and Hayeland was decided under statute, not the due process clause.

Appellees next rely on Brunswick Corp. v. Suzuki Motor Co., Ltd., in which a Wisconsin manufacturer sued two Japanese manufacturers for patent infringement. 575 F.Supp. 1412, 1415 (E.D.Wis. 1983). The Japanese companies sold products other than those at issue in the suit through partially or wholly owned U.S. subsidiaries, which in turn made substantial sales of these products in Wisconsin. Id. at 1415-16. The Brunswick court held as follows:

This court believes that the constitutional analysis under International Shoe [v. State of Wash, Office of Unemployment Compensation and Placement, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945)] permits consideration of a nonresident defendant’s contacts with the forum state through its wholly owned subsidiaries without regard to whether the affiliated corporations have maintained a formal separation of corporate identities. Thus, Cannon does not preclude this Court from considering the Wisconsin contacts of the [two Japanese parent corporations’] subsidiaries in judging the fairness under the due process clause of requiring the Japanese parents to defend themselves in this forum.

Id. at 1419. Without using agency or alter ego theories, the Brunswick court then held that, considering the subsidiaries’ activities, it could exercise jurisdiction over the parent corporations under both the Wisconsin long-arm statute and the due process clause. Id. at 1422-23. We distinguish Brunswick in that the parent corporations there were using their subsidiaries to market and sell the parents’ products, while here, Preussag AG is not marketing anything through its Texas subsidiaries. See id. at 1415-16. To the extent Brunswick is not distinguishable, though, we find it contrary to the Texas precedent cited above, requiring alter ego or agency theory for a subsidiary’s actions to be attributed to the parent for jurisdictional purposes. See Conner, 944 S.W.2d at 418; McFee v. Chevron Int’l Oil Co., Inc., 753 S.W.2d 469, 471 (Tex.App.— Houston [1st Disk] 1988, no writ); Beech, 818 F.2d at 375-76. Cf. 3-D Elec., 706 S.W.2d at 139 (applying same rule between two corporations that were not parent and subsidiary).

Appellees also rely on Johnson Worldwide Associates, Inc. v. Brunton Co., which involved a 15-year licensing agreement between two unrelated corporations — one of which was a resident (Johnson Worldwide) and one of which was not (Silva, Brunton’s parent) — under which the parties’ business dealings were extensive. 12 F.Supp.2d 901, 904-05, 907-08 (E.D.Wis.1998). In fact, because the dispute arose out of the termination of that licensing agreement, the Johnson court held it also had specific, as well as general, personal jurisdiction over the nonresident corporation. Id. at 911. Johnson Worldwide is, therefore, distinguishable.

Finally, appellees cite Lung v. Yachts International, Ltd., in which the court determined it had specific jurisdiction — a less rigorous test — over a nonresident that allegedly breached a contract and defrauded Wisconsin state residents. 980 F.Supp. 1362, 1367-68 (D.Hawai’i 1997). Lung is likewise distinguishable.

3. Application

We conclude that Preussag AG’s routine activities within the Preussag Group system with its six indirect Texas subsidiaries do not make Preussag AG amenable to suit in Texas.

The six indirect Texas subsidiaries’ use of Preussag AG’s “banking” and financing systems does not show Preussag AG’s purposeful contacts with Texas. Preussag AG’s services were provided to the six indirect Texas subsidiaries as they would be to any member of the Preussag Group in any location. In Primera Vista S.P.R. de R.L. v. Banca Serfin, S.A Institución de Banca Multiple Grupo Financiero Ser-fin, the court held a Mexican bank’s (1) $1.5 billion in “pass-through” accounts in 11 U.S. banks, through which it facilitated its Mexican clients’ foreign transactions, and (2) lines of credit the Mexican bank maintained with Texas banks, but which were used only to support the Mexican bank’s clients that imported U.S. goods, did not result in general jurisdiction. 974 S.W.2d 918, 926 (Tex.App. — El Paso 1998, no pet.). The Primera Vista court reasoned as follows:

Although Banca Serfin charged its Mexican customers for use of the Texas bank accounts and lines of credit, its maintenance and use of the accounts is more in the nature of facilitating its Mexican customers’ business activities. Accordingly, there was evidence from which the trial court could have reasonably concluded that Banca Serfin’s Texas accounts are a by-product of Banca Ser-fin’s business in Mexico with Mexican importer customers rather than an indication of any substantial, purposeful business activity conducted by Banca Serfin on its own behalf in Texas. By maintaining and charging for the use of the Texas accounts, Banca Serfin clearly conducts some marginal business activity in the state. This activity alone, however, is somewhat attenuated and not substantial enough to subject Banco Ser-fin to suit in Texas for all purposes.

Id. at 926. Like the pass-through accounts of the Mexican bank in Primera Vista, Preussag AG’s “banking” system— in which Preussag Group members deposit excess funds daily with Preussag AG, Preussag AG lends money on commercial terms, Preussag AG credits and debits members’ accounts for inter-member sales, and foreign currency transactions are conducted — exists to accommodate the whole Preussag Group, of which Preussag AG is a part. The fact that Preussag AG deposits funds under this system in some subsidiaries’ Texas bank accounts is a fortuitous contact, since the “banking” system is not itself directed toward Texas. Cf. Alpine View, at 214 (in holding foreign holding company’s Texas subsidiaries were not its alter ego and, thus, Texas had no jurisdiction over former, stating, “The existence of intercorporate loans does not establish the requisite [alter ego] dominance, and, in fact, interest-bearing loans suggest separation of corporate entities.”) (citations omitted). Therefore, we conclude that Preussag AG did not purposefully avail itself of conducting business in Texas.

Neither do we place much weight on the communications between some of the six indirect Texas subsidiaries and Preussag AG. In all, appellees’ brief cites to fewer than 60 written communications — including currency exchange and deposit confirmations — among Preussag AG and all six Texas subsidiaries from 1987 to 1995. Many of these written communications concerned the financial reporting required by German law, periodic audits, or loans under the Preussag Group “banking” system, all of which we consider part of the normal relations between this parent and its subsidiaries. For the same reason, it is not surprising that Preussag AG and Delta and Pipetronix would communicate by phone.

Aside from occasional visits of Preussag AG representatives for audits, and once for an inspection of Delta, the only other visits between Texas subsidiaries’ personnel and that of Preussag AG were outside of Texas. Occasional travel to Texas is insufficient by itself to establish continuous and systematic contact. See Gamer, 966 S.W.2d at 803 (holding no general jurisdiction over individual who made eight to 10 visits over 60 days to Texas); compare Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 418, 104 S.Ct. 1868, 1870, 1874, 80 L.Ed.2d 404 (1984) (finding no general personal jurisdiction despite defendant corporation’s sending management and personnel to Texas for consultation and training over seven-year period). Moreover, we perceive Preussag AG’s monitoring of its six indirect Texas subsidiaries through periodic audits, and its approval of Delta’s large expenditures, as part of the normal, parent-subsidiary relationship between these companies.

The fact that the six indirect subsidiaries reported financial information that was relayed to Preussag AG does not weigh in favor of finding jurisdiction, either. This information was required by German law, not just for Preussag AG’s own benefit, and was apparently part of the normal parent-subsidiary relationship under the Preussag Group system. Neither is it surprising that Preussag Group companies would use a unified software and reporting system to compile this information. This activity was directed at all subsidiaries in which Preussag AG had at least a 50 percent interest, not just at subsidiaries in Texas. The mere existence of a unified, international system between a parent and its subsidiaries does not show purposeful availment of Texas’s benefits.

Finally, the excess liability policy Preus-sag AG maintains for its subsidiaries benefits them, not it, and does not show purposeful availment of anything in Texas.

B. Preussag AG’s Comfort Letter

Preussag AG wrote a “comfort letter” that could be used in support of loans that PNA might take out on Delta’s behalf. There is no showing the letter was written to or for a Texas lender, as Delta’s president testified none of PIC’s lenders was in Texas, and there is nothing systematic or continuous about it in any event.

C. Preussag AG’s Two Contracts

We do not find Preussag AG’s contracting twice, six years apart, with Texas corporations to show systematic and continuous contact with Texas.

Mere contracting with a Texas resident does not satisfy the minimum contacts requirement. See, e.g., Magnolia Gas Co. v. Knight Equip. & Mfg. Corp., 994 S.W.2d 684, 691 (Tex.App.—-San Antonio 1998, no pet.) (contract dispute). In the 1986 transaction, Preussag AG sold back its stock in Preussag Oil & Gas. If anything, this shows Preussag AG’s desire to distance itself from Texas. Likewise, the 1992 merger was between PB-KBB and Preus-sag Oil & Gas. Appellees rely on the agreement’s reference to the Texas Business Corporation Act, but it was PB-KBB and Preussag Oil & Gas, not Preussag AG, that recited they were merging pursuant to that act. Preussag AG signed the agreement not as a principal, but as an indemnitor for pre-merger environmental liability of its former indirect subsidiary. In doing so, Preussag AG assumed liability related to a Texas merger; it did not avail itself of any privileges or benefits of doing business in Texas.

Each contract contained a choice-of-law clause, but only for matters relating to those contracts. A choice-of-law provision is a consideration. See Burger King, 471 U.S. at 482, 105 S.Ct. at 2187; Project Eng’g USA Corp. v. Gator Hawk, Inc., 883 S.W.2d 716, 722 (Tex.App.—Houston [1st Dist.] 1992, no writ) (contract containing choice-of-law and choice-of-forum clauses). However, standing alone, it cannot suffice to confer jurisdiction. See Burger King, 471 U.S. at 482, 105 S.Ct. at 2187. Nor does it indicate a voluntary submission to the personal jurisdiction of the state’s courts in the absence of any express understanding to that effect. 3-D Elec., 706 S.W.2d at 145 n. 9. Here, if these choice-of-law clauses showed voluntary submission at all, they showed it only for disputes arising from those two particular contracts.

D. Preussag AG’s Retention of a Houston Law Firm

Although the majority of the law firm’s invoices were sent to or were for services for Preussag Oil & Gas, we must presume the trial judge found that a few of the firm’s services were performed for Preussag AG. However, we conclude that these services do not amount to substantial or systematic and continuous contact with Texas. Cf. Wilson v. Belin, 20 F.3d 644, 660-51 (5th Cir.1994) (holding no general personal jurisdiction in a defamation suit despite nonresident’s carrying legal malpractice insurance through a Texas law firm for less than a year, performing at least one legal project a year over three years for various Texas law firms, and being a pro bono consultant of a Texas historical society for several years). Contrast Commonwealth of Puerto Rico v. SS ZOE COLOCOTRONI, 628 F.2d 652, 667-68 (1st Cir.1980) (holding general personal jurisdiction existed over British insurers when (1) ships insured by them were involved, in the forum’s waters, in numerous incidents giving rise to claims; (2) the insurers’ local law firm, acting as the insurers’ local correspondent, was instructed to take actions to forestall claims, to provide services for insured shipowners, or to prepare for litigation; and (3) the insurers advertised to their insured shipowners that the above services would be available through this law firm).

Additionally, some of the contacts with Vinson & Elkins are irrelevant because of when they took place. Federal authority indicates that contacts occurring after suit is filed are irrelevant because “district courts should examine a defendant’s contacts with the forum state over a period that is reasonable under the circumstances — up to and including the date the suit was filed — to assess whether they satisfy the ‘continuous and systematic’ standard.” Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 569-70 (2nd Cir.1996); see also Noonan v. Winston Co., 135 F.3d 85, 94-95 (1st Cir.1998); Asarco, Inc. v. Glenara, Ltd., 912 F.2d 784, 787 n. 1 (5th Cir.1990); Haas v. AM. King Indus., Inc., 28 F.Supp.2d 644, 648 (D.Utah 1998). Some Texas authority implies that the relevant contacts are those up to the time of the injury. See Scott v. Huey L. Cheramie, Inc., 833 S.W.2d 240, 242 (Tex.App. — Houston [14th Dist.] 1992, no writ); Middleton v. Kawasaki Steel Corp., 687 S.W.2d 42, 45 (Tex.App. — Houston [14th Dist.] 1985), writ refd n.r.e., 699 S.W.2d 199 (Tex.1985). Whether the cutoff date for determining general jurisdiction is the date of the injury or the date the suit is filed, the result is the same: the majority of the 16 items of correspondence between Preussag AG and Vinson & El-kins were generated after this suit’s filing and are irrelevant to the jurisdictional inquiry. Similarly, a Vinson & Elkins’s attorney’s post-petition service on PNA’s board is irrelevant and, in any event, would not show Preussag AG’s purposeful availment of anything in Texas. Likewise, Preussag AG’s post-petition promise to hold that attorney harmless in that position would be neither relevant nor, if relevant, “continuous and systematic.”

E. Resolution

We hold that Preussag AG did not purposefully establish minimum contacts with Texas on a continuous and systematic basis. Therefore, we hold Texas courts have no jurisdiction over it. Because we conclude that no general personal jurisdiction exists over Preussag AG, we need not decide whether exercise of that jurisdiction would comport with notions of fair play and substantial justice. See, e.g., Reyes v. Marine Drilling Cos., 944 S.W.2d 401, 405 (Tex.App. — Houston [14th Dist.] 1997, no writ).

VI. Conclusion

We reverse the order denying Preussag AG’s special appearance and remand with instructions to dismiss Preussag AG for lack of personal jurisdiction.

      . By "indirect subsidiaries,” we mean those in which Preussag AG does not directly hold stock, but in which it has a financial interest by virtue of holding stock in another company that, in turn, holds stock in the Texas subsidiary.

      . U.S. Const, amend. XIV, § 1.

      . Tex Civ. Prac. & Rem.Code Ann. § 17.042 (Vernon 1997).

      . Specific personal jurisdiction exists if the defendant’s alleged liability arises from or is related to an activity conducted within the forum. CSR, Ltd. v. Link, 925 S.W.2d 591, 595 (Tex. 1996).

      . Appellees correctly note that PNA (formerly PIC) extended Delta a $30 million open line of credit. However, this fact does not con-cem Preussag AG’s actions, as appellees disavow any attempt to pierce the corporate veil between Preussag AG and PNA.

      . Appellees' brief correctly states that PNA extended Pipetronix a line of credit. However, this fact does not concern Preussag AG's actions, as appellees disavow any attempt to pierce the corporate veil between Preussag AG and PNA.

      . The alter ego theory generally allows one corporation’s actions to be ascribed to another by disregarding their distinct corporate entities. See, e.g., Lucas v. Texas Indus., Inc., 696 S.W.2d 372, 374 (Tex. 1984) (corporate form normally not disregarded absent its use for fraudulent purposes, to avoid liability, or under like exceptional circumstance).

      . Moreover, each court found there was no jurisdiction over the parent corporation under an alter ego theory.

      . Accord, see Garner v. Furmanite Australia Pty., Ltd., 966 S.W.2d 798, 802 (Tex.App.— Houston [1st Dist.] 1998, pet. denied); McFee v. Chevron Int'l Oil Co., 753 S.W.2d 469, 471 (Tex.App. — Houston [1st Dist.] 1988, no writ); Jones v. Beech Aircraft Corp., 995 S.W.2d 767, 771-72 (Tex.App. — San Antonio 1999, pet. dism'd); Alpine View Co. Ltd. v. Atlas Copco AB, No. 97-20879, at 214 (5th Cir. 2000) (op. on remand) (Texas); Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 492-93 (5th Cir. 1974) (Texas); Murdock v. Volvo of Am. Corp., 403 F.Supp. 55, 56-57 (N.D.Tex.1975) (Texas). Cf. Vosko v. Chase Manhattan Bank, N.A., 909 S.W.2d 95, 99-100 (Tex.App.— Houston [14th Dist.] 1995, writ denied) ("Similarly, jurisdiction over an individual generally cannot be based on jurisdiction over a corporation with which he is associated unless the corporation is the alter ego of the individual.”); Solow v. Century Assets Corp., 12 S.W.3d 512, 515-16 (Tex.App. — Beaumont 1999, no pet.) (same); Stuart v. Spademan, 772 F.2d 1185, 1196-97 (5th Cir. 1985) (Texas) (same).

      . A bareboat charier vest most incidents of ownership in the charterer operating the vessel. Id. at 1362.

      . The Dalton court also held that neither Midland’s advertising, the emphasis of which was national, nor its vessel purchases, for which the sale contracts were executed, paid, and delivered outside Louisiana, provided for jurisdiction. Id. at 1362 n. 3.

      . The Wisconsin long-arm statute provided for jurisdiction over a defendant that "is engaged in substantial and not isolated activities within this state, whether such activities are wholly interstate, intrastate, or otherwise.” Wis. Stat. § 801.05(l)(d) (1994) (emphasis added).

      . Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 45 S.Ct. 250, 69 L.Ed. 634 (1925).

      . Moreover, Delta called Hanover (presumably Preussag AG) only about 35 times over several years, and we cannot discern how many of Pipetronix’s calls to Hanover were to Preussag AG or to Anlagenbau, the latter of which Pipetronix’s officer speculated his company might have sometimes called.

      . We realize the Gator Hawk court considered, in determining personal jurisdiction, a choice-of-law provision in a contract that was not the subject of that suit, but we distinguish that case because (1) the contract also contained a choice-of-forum clause, (2) the defendant had more direct contacts with Texas than Preussag AG did, and (3) the defendant put on little proof to carry its burden. See Project Eng’g USA Corp. v. Gator Hawk, Inc., 833 S.W.2d 716, 720-21 (Tex.App.—Houston [1st Dist.] 1992, no writ).


source: Caselaw Access Project

author: TIM TAFT, Justice.

license: Public Domain

text:
    LOCKHEED MARTIN CORPORATION, Appellant, v. August GORDON, Alfred Allen and wife, Mary Allen, Eddie Bennett and wife, Rosa Mae Bennett, Eddie J. Billingsley and wife, Arlene Billingsley, Willie J. Bolden and wife, Patricia Bolden, Oscar William Booker, Samuel Boswell and wife, Billie Ruth Boswell, Robert L. Brasfield and wife, Dorothy A. Brasfield, Dennis Brown, Individually and as personal Representative of The Estate of Porter Bradley Brown, Burt Brown, Jr., and wife, Dora Brown, John T. Bryant, Carrie Bryant and Robert Lee Bryant, Individually and as Representatives of the Estate of Samuel W. Bryant, Leonard B. Burroughs and wife, Olene Burroughs, Joe Louis Bush, Jr., and wife, Alma Bush, Lim Cabbil, Jr., and wife, Rosie Cabbil, Tom W. Carpenter and wife, Weddie Carpenter, Thelma Chatman, Individually and as Personal Representative of the Estate of Claude D. Chatman, Jr., Eddie Clark Jr., Robert Lee Coleman and wife, Bertha Coleman, David F. Collins and wife, Lizzie Collins, Charlie Collins, Jr., and wife, Ernestine P. Collins, Wilbur Cosby and wife, Sarah Cosby, Ernest Richard Craig and wife, Emma Craig, Robert Lee Crowell and wife, Willie Lee Crowell, Charlie Day and wife, Claudia Day, Sam Dudley and wife, Sirlelia Dudley, John W. Davis and wife, Rebecca Davis, Clarence E. Englebert and wife, Zellena Englebert, Ben Franklin and wife, Jeanette Franklin, Clarence L. Gadson and wife, Claudette Gadson, Charlie Lee Gay and wife, Dorothy Gay, Mortimer Gilbert and wife, Evelyn Gilbert, Samuel Lee Hall and wife, Geraldine Hall, Evelyn Hallman, Individually and as Personal Representative of the Estate of Charles W. Hallman, Sadie Lee Hanks, Individually and as Personal Representative of the Estate of Joe Hanks, Willie Darnell Harper and wife, Fannie Harper, Willie Lee Hemphill, Individually and as Personal Representative of the Estate of David Hemphill, Sr., Johnny Wesley Henderson, Sr. and wife, Katie Henderson, Joseph R. Henson, David Sr. Hicks and wife, Wilma Hicks, William W. Hill and wife, Patricia Ann Hill, Emory Taylor Holcombe and Wife, Sara Holcombe, James O. Holifield, Jr. and wife, Clara Mae Holifield, Sherry Hood, Individually and as Personal Representative of the Estate of William H. Hood, Frank Hopkins, Individually and as Personal Representative of the Estate of Floyd Hopkins a/k/a Floyd Zell Hopkins a/k/a Flozell Hopkins, Wilson Hubbard, John Oliver Hudson and wife, Annie Laura Hudson, Lillian Marie Hughes, Individually and as Personal Representative of the Estate of Jimmie Lee Hughes, Joe Nathan Hunter and wife, Dorothy Hunter, Hosie Hunter, Jr. and wife, Louise Hunter, James Earl Ingram, Individually and as Personal Representative of the Estate of Tommie L. Ingram, L.D. Jackson and wife, Mattie Jackson, Odell Jackson, Jr. and wife, Stella Jackson, Sam Jackson Jr. and wife, Annie Jackson, Dora V. Jackson, Individually and as Personal Representative of the Estate of Scarley Jackson, Sr., Mack F. Johnson, Sr., Marion Johnson and wife, Ileen Johnson, Wallace Cornelius Johnson and wife, Dorothy Johnson, Bob Jones and wife Omah Jones, O.C. Jones, Jr. and wife, Lillie Jones, Clarence David Judkins and wife, Linda Judkins, James Junkin and wife, Edwina Junkin, Rilla Junkin, Individually and as Personal Representative of The Estate of William R. Junkin, Edward Rufus King, Robert Edward Lee and wife, Theodore Lee, Lemmie D. Lewis and wife, Dorothy Lewis, Levi Lyles and wife, Carrie Lyles, Simon Mabry and wife, Rena C. Mabry, Willard Mckeller, Ralph E. Mckenney and Reginald A. Mckinney, Individually and as Personal Representatives of The Estate of William E. Mckenney, Curtis Mcmullen and wife, Anna J. Mcmullen, Don Mcmullen, Individually and as Personal Representative of The Estate of Vonnie Mcmullen, Robert E. Nickerson, Individually and as Grandson and as Personal Representative of the Estate of Sam Millender, Milton L. Miller and wife, Mary Elizabeth Miller, William Mills and wife, Carolyn Mills, William Page, Sr. and wife, Ethel Mae Page, Emanuel Milton Palmer, Fred Palmer, Jr., Wayne Pate, Pauline Patterson, Individually and as Personal Representative of the Estate of Joseph Wilton Patterson a/k/a Wilton Patterson, Robert James Perkins and wife, Rebecca Perkins, John Pleasant and wife, Lula Mae Pleasant, Flenoid Province and wife, Emma Province, James E. Pylant, Melvin O. Pylant and wife, Bonnie Pylant, Thomas Ray Reece and wife, Beatrice Cecilia Reece, William Cecil Reed, Elijah Richardson, Earnest S. Robertson and wife, Annie Lee Robertson, Ruben Stacy Robertson, Individually and as Personal Representative of the Estate of Ruben Robertson, Willie N. Rogers, Willie C. Ryan and Margarite Jones, Individually and as Personal Representative of The Estate of Freeman Ryans, Richard Sanders and wife, Julia Sanders, Willie Sewell and wife, Lucille Sewell, Jimmie Charles Sheppard and wife, Dorothy Jean Sheppard, Paris W. Shirley and wife, Joan Shirley, Robert Lee Shirley and wife, Catherine Shirley, Benjamin Shorter and wife, Hattie M. Shorter, Moses Simmons and wife, Virginia Simmons, John Patton Smalley and wife, Williedean Smalley, Pealie Stewart, O.C. Strickland and wife, Jean Strickland, Ottis Wilson Strickland and wife, Margie Strickland, Glenn Doran Sullivan and wife, Martha Sullivan, Olivia Taylor, Individually and as Personal Representative of The Estate of Dred Taylor, John W. Taylor, Thomas Taylor and wife, Jessie Taylor, John B. Tidwell and wife, Frances Tidwell, David Niven, Individually and as Personal Representative of the estate of Jack Tilley, Jr., Dave Townsend and wife, Clozell Townsend, Jerry W. Tubbs and wife, Brenda Tubbs, Rufus Walker, Sr., George Ware and wife, Silver Ware, Rubbie White, Sr., George Williams and wife, Ruby Lee Williams, John A. Williams, John D. Williams and wife, Lorene Williams, Willie G. Williams and wife, Dollie Mae Williams, Jimmie Lewis Woods, Individually and as Personal Representative for the Estate of Lawyer Woods, Appellees.
    No. 01-99-00436-CV.
    Court of Appeals of Texas, Houston (1st Dist.).
    March 30, 2000.

      Robert M. Martin, Michael G. Oddo, Vic Houston Henry, Dallas, for Appellant.
    Guy Gladstone Fisher, Richard N. Coun-tiss, Denman H. Heard, Houston, for Ap-pellees.
    Panel consists of Justices MIRABAL, TAFT, and PRICE.

       The Honorable Frank C. Price, former Justice, Court of Appeals, First District of Texas at Houston, participating by assignment.

   OPINION

TIM TAFT, Justice.

This is a successor-liability case decided on cross-motions for summary judgment. Appellant, Lockheed Martin Corporation, challenges the summary judgment rendered in favor of appellees (the workers). The workers are members of a class of plaintiffs seeking damages for personal injuries resulting from exposure to silica and silica-containing dust. Lockheed claims the trial court misconstrued an agreement for the acquisition of corporate assets in ruling that Lockheed is contractually liable, as a successor to Wedron Silica Company of Delaware, for any damages adjudicated against Wedron for the workers’ claims. Lockheed also claims the trial court erred by not rendering summary judgment in favor of Lockheed on limitations grounds. The workers contend the judgment is not final and that we therefore lack jurisdiction to consider this appeal. We reject the workers’ jurisdictional challenge and reverse and render judgment that Lockheed is not contractually liable as a successor to Wedron.

Facts and Procedural History

The workers filed suit in 1995. They originally numbered 140 plaintiffs, who sued more than 80 defendants for injuries they claim resulted from exposure to silica compounds at foundries where the workers were employed. The defendants include manufacturers and suppliers of silica products and manufacturers and suppliers of safety equipment for the foundries. One of these defendants, Martin-Marietta Corporation, purchased the assets of Wedron Silica Company of Delaware in 1979. Wedron allegedly supplied silica compounds to the foundries. As a result of a series of corporate transactions, Lockheed succeeded Martin-Marietta as successor-in-interest to Wedron. The workers claim that Wedron supplied industrial silica sand to their factories, but the workers apparently did not timely sue the correct Wed-ron entity. Lockheed was added as a defendant shortly before 10 of the workers went to trial in the first stage of the class-action litigation.

Lockheed’s liability for Wedroris alleged torts against the workers depends on whether Lockheed’s predecessor, Martin-Marietta, assumed liability for those torts when it purchased Wedroris assets in 1979. In keeping with its interpretation of the 1979 purchase and sale agreement, Lockheed answered the workers’ lawsuit with a verified denial that challenged its capacity to be sued. See Tex.R. Civ. P. 93(l)-(2), (4).

The parties filed cross-motions for summary judgment based on their interpretations of the 1979 purchase and sale agreement. In moving for summary judgment, the workers maintained that Maryland law governed interpretation of the agreement because Lockheed is a Maryland corporation, and that Lockheed incurred successor liability for the workers’ alleged torts due to Martin-Marietta’s having expressly assumed liability for Wedroris torts under the 1979 purchase and sale agreement. Lockheed referenced Delaware choice-of-law provisions of the agreement in its motion for summary judgment, but claimed it was immaterial whether Texas, Maryland, or Delaware law controlled, because the law of each of these states established that Martin-Marietta had neither expressly nor impliedly assumed liability for Wedroris contingent torts, and that Lockheed therefore had no successor liability. Lockheed also moved to sever the successor-liability controversy for appeal.

The trial court’s order rendering summary judgment in favor of the workers states in part:

... [T]he Cross-Motion for Summary Judgment filed by the [workers] is GRANTED and this Court enters a final Judgment that Lockheed Martin Corporation is contractually liable for any damages adjudicated against Wedron Silica Company of Delaware with respect to [the workers’] alleged cause of action.
It is further ORDERED that all of the [workers’] causes of action against the Defendant Lockheed Martin Corporation be and the same are hereby SEVERED from the remainder of this suit and this judgment shall be final between said parties.
It is further ORDERED that the Clerk assign the cause of action between [the workers] and the Defendant Lockheed Martin Corporation a separate cause number and that this Judgment be removed from the docket of the captioned case.
All relief not expressly granted herein is denied.

Although it specifies that Lockheed “is contractually liable” for any damages adjudicated against Wedron, the face of the order does not reflect whether the trial court concluded that Martin-Marietta had expressly assumed liability under the 1979 purchase and sale agreement, or merely impliedly assumed liability. The order clearly renders summary judgment in favor of the workers, however, who had premised their motion solely on Martin-Marietta’s having expressly assumed liability under the 1979 purchase and sale agreement. By granting the workers’ motion for summary judgment and rendering judgment in their favor, therefore, the trial court necessarily concluded that Martin-Marietta had expressly assumed liability for Wedron’s contingent torts under the 1979 purchase and sale agreement.

Following severance, the trial court entered a nunc pro tunc order that confirmed its earlier rulings and formally transferred specified documents to constitute this cause.

Is the Judgment Final?

The workers raise a preliminary, jurisdictional challenge, contending we must dismiss for lack of jurisdiction because the trial court resolved only the successor-liability issue and did not intend to dispose of all issues and parties. To be final and appealable, a summary judgment must dispose of all parties and issues before the court. Maflige v. Ross, 866 S.W.2d 590, 591 (Tex.1993). When, as here, a summary judgment includes “Mother Hubbard” language purporting to dispose of all claims and parties, the general rule is that we must treat the judgment as final for purposes of appeal. Inglish v. Union State Bank, 945 S.W.2d 810, 811 (Tex.1997) (citing Mafrige, 866 S.W.2d at 592); Kaigler v. General Elec. Mortgage Ins. Corp., 961 S.W.2d 273, 274 (Tex. App. — Houston [1st Dist.] 1997, no pet.); see also Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625 (Tex.1996) (stating that a judgment becomes final when both parties move for summary judgment and the trial court grants one motion and denies the other).

It is undisputed that Lockheed did not manufacture or supply any product used at the foundry, that any liability assessed against Lockheed for Wedron’s torts requires a determination that Martin-Marietta assumed liability for those torts when it purchased Wedron’s assets in 1979, and that the amount of liability would be the amount of damages adjudicated against Wedron. Lockheed’s liability as successor is the only issue presented by the ^parties’ pleadings, the only issue presented by the cross-motions for summary judgment, and the only issue resolved by the summary judgment order, which recites, several times, that it is a final judgment. The same order denied Lockheed’s motion for summary judgment and denied all relief not expressly granted.

We conclude the judgment is final and overrule the workers’ jurisdictional challenge.

Standard of Review

We follow the usual standard of review for traditional summary judgments granted under rule 166a(c) of the Rules of Civil Procedure: A party seeking summary judgment must establish each element of its claim or defense, as a matter of law, or negate an element of each claim or defense of the opposing party, as a matter of law. Tex.R. Crv. P. 166a(a)-(b) (comment). This standard is well-established in cases construing written agreements. Coker v. Coker, 650 S.W.2d 391, 393-94 (Tex.1983) (construing property-settlement agreement containing guaranty provisions); Sears, Roebuck & Co. v. Commercial Union Ins. Corp., 982 S.W.2d 151, 154 (Tex.App.— Houston [1st Dist.] 1998, no pet.) (construing insurance contract); Crispin v. Paragon Homes, Inc., 888 S.W.2d 78, 79 (Tex. App. — Houston [1st Dist.] 1994, writ denied) (construing deed restrictions); Groschke v. Gabriel, 824 S.W.2d 607, 610-11 (Tex.App. — Houston [1st Dist.] 1991, writ denied) (construing several written instruments).

When a motion for summary-judgment raises multiple grounds, we may affirm if any ground is meritorious. Cincinnati Life Ins. Co., 927 S.W.2d at 625; Hanson v. Republic Ins. Co., 5 S.W.3d 824, 327 (Tex.App. — Houston [1st Dist.] 1999, pet. denied). The supreme court has further instructed us to consider all properly preserved grounds that the trial court rules on, but has allowed us, in the interests of judicial economy, to consider other grounds not ruled on that a movant preserves for review. Cincinnati Life Ins. Co., 927 S.W.2d at 626. In this case, we may determine all questions presented, including any error in overruling Lockheed’s motion, because the workers and Lockheed each moved for final summary judgment relief. See Cincinnati Life Ins. Co., 927 S.W.2d at 625; Hanson, 5 S.W.3d at 327. Accordingly, while the trial’s court’s order is premised on Martin-Marietta’s having expressly assumed liability for Wedron’s torts, we also address whether Martin-Marietta impliedly assumed that liability.

Successor Liability by Express or Implied Assumption

Lockheed’s first point of error challenges the summary judgment rendered in the workers’ favor and the denial of its own motion for summary judgment. Lockheed contends that, in ruling that Lockheed is contractually liable as Martin-Marietta’s successor for any damages awarded to the workers, the trial court misconstrued the terms of the 1979 agreement by which Martin-Marietta purchased Wedron’s assets. Lockheed maintains it cannot be contractually liable for Wedron’s alleged torts against the workers because Martin-Marietta neither expressly nor impliedly assumed liability for those torts. As in the trial court, the workers contend Martin-Marietta expressly assumed Wed-ron’s torts under the 1979 purchase and sale agreement.

A. Choice of Law

The 1979 agreement formalizing Martin-Marietta’s purchase of Wedron’s assets specifies that Delaware law controls the validity, interpretation and performance of the agreement. Determining which state’s law applies is a question of law. Gutierrez v. Collins, 583 S.W.2d 312, 319 (Tex.1979). Except when a contract with a valid choice-of-law clause applies, Duncan v. Cessna Aircraft, Co., 665 S.W.2d 414, 421 (Tex.1984), Texas courts apply the substantive law of the state with the most significant relationship to the particular dispute at issue. Gutierrez, 583 S.W.2d at 318-19 (adopting Restatement (Second) op Conflict of Laws §§ 6, 145 (1971)). Neither Lockheed nor the workers dispute the validity of the choice-of-law provision. Provided the law of the chosen state bears some reasonable relationship to the parties and the transaction, Texas will apply the law specified in the contract. De Santis v. Wackenhut Corp., 793 S.W.2d 670, 678-79 (Tex.1990) (applying Restatement (Second) of Conflict of Laws § 187(2) (1971)); Securities Inv. Co. v. Finance Acceptance Corp., 474 S.W.2d 261, 271 (Tex.Civ.App. — Houston [1st Dist.] 1971, writ ref d n.r.e.).

Lockheed relies on the Delaware choice-of-law provision in the 1979 purchase and sale agreement to contend Delaware law controls whether Martin-Marietta assumed liability for Wedron’s contingent torts. Lockheed also claims Delaware law controls under the “most significant relationship” test because Wedron is incorporated in Delaware, which therefore has a reasonable relationship to the sale of Wedron’s assets. As in the trial court, the workers contend we should apply Maryland law because Lockheed is incorporated in that state, which therefore has a reasonable relationship to whether Lockheed is liable for Wedron’s torts. The workers alternatively contend this dispute poses no choice-of-law problems because the pertinent principles of successor liability are identical under Texas, Delaware, and Maryland law.

We conclude that Delaware law controls because it is specified in the 1979 purchase and sale agreement. As already noted, no one disputes the validity of the Delaware choice-of-law provisions, and Delaware has a reasonable relationship to the sale of Wedron’s assets. See DeSantis, 793 S.W.2d at 678-79.

1. Majority Rule — Successor Not Liable

The Third Restatement of the Law of Torts for Products Liability states the majority rule: a successor business that purchases only the assets of another business is not subject to liability for harm caused by defective products sold commercially by the predecessor unless:

(1) in acquiring the assets, the successor agrees to assume liability;
(2) the acquisition results from a fraudulent conveyance to escape liability for the debts or liabilities of the predecessor;
(3) the acquisition constitutes a consolidation or merger with the predecessor; or
(4) the acquisition results in the successor becoming a continuation of the predecessor.

See Restatement (Thied) of the Law of Torts, PRODUCTS Liability § 12 (1998). The rule of non-liability for asset acquisitions is frequently the reason why parties choose that option in acquiring a business, as opposed to a merger or stock acquisition, in which the predecessor’s obligations and liabilities continue in the surviving entity. James Ryan & Robert Beasley, Asset Acquisitions: Caveat Emptor, 53 Tex. B.J. 1221,1221 (1990).

Delaware and Maryland recognize all four exceptions to the rule of non-liability by case law. Elmer v. Tenneco Resins, 698 F.Supp. 535, 540 (D.Del.1988); Nissen Corp. v. Miller, 323 Md. 613, 617, 632, 594 A.2d 564, 565-66 (1991). The Business Corporation Act controls in Texas. The Act specifies that purchase of all or substantially all of the assets of the seller’s corporation “does not make the acquiring [entity] responsible or liable for any liability or obligation of the selling corporation” unless the acquiring entity expressly assumes the liability or the obligation, or unless another statute expressly provides to the contrary. Tex. Bus. Corp. Act art. 5.10(B)(2) (Vernon Supp.2000). This controversy involves only the first exception.

2. Exception for Liability Assumed in Acquiring Assets

Texas, Delaware, and Maryland precedents all recognize the first exception, but differ in applying it. James Ryan & Robert Beasley, Asset Acquisitions: Caveat Emptor, 58 Tex. B.J. 1221, 1221 (1990). The successor may expressly or impliedly assume contingent liability in Delaware and Maryland. See Elmer, 698 F.Supp. at 540 (recognizing express and implied assumption as imposing liability on successor); Nissen Corp., 323 Md. at 617, 632, 594 A.2d at 565-66, 573 (same). In Texas, the successor incurs no liability of the predecessor unless the successor expressly assumes that liability. Tex. Bus. Coep. Act Ann. 5.10(B)(2); see Mudgett, 709 S.W.2d at 758. This has long been Texas law. Southwestern Gas, Light & Power Co. v. Jay, 275 S.W. 735, 736 (Tex. Civ.App. — El Paso, 1925, writ ref d).

B. Lockheed Did Not Incur Successor Liability by Express or Implied Assumption

Lockheed and the workers premise their express assumption arguments exclusively on the 1979 purchase and sale agreement by which Martin-Marietta acquired Wed-ron’s assets. Lockheed’s contentions against implied assumption likewise center on the agreement itself, rather than on the conduct of any party. Neither party contends this agreement is ambiguous.

1. Interpretation of an Unambiguous Written Instrument

We review an unambiguous written instrument as a matter of law; our focus is on ascertaining and effectuating the intent of the parties, as expressed in the instrument. Coker, 650 S.W.2d at 393; Sears, Roebuck & Co., 982 S.W.2d at 154. To achieve this, we examine and consider the entire instrument to harmonize and give effect to all its provisions, so that none will be rendered meaningless. Coker, 650 S.W.2d at 393; Mudgett, 709 S.W.2d at 756-57 (interpreting sales agreement in successor-liability case). Delaware and Maryland follow substantially the same standards. See Northwestern Nat’l Ins. Co. v. Esmark, Inc., 672 A2d 41, 43 (Del.1996); Jones v. Hubbard, 356 Md. 513, 534, 740 A.2d 1004, 1016 (1999).

2. Terms of the 1979 Purchase and Sale Agreement

The 1979 purchase and sale agreement indicates that Martin-Marietta acquired only Wedron’s assets and those liabilities disclosed on the balance sheet as of the date of closing. Section 4(B) of the agreement reflects the following concerning Martin-Marietta’s and Wedron’s understandings of the assets acquired and the liabilities incurred:

At the Closing Date ... all assets shall be at the June 2, 1979 levels as shown on the Balance Sheet ... and likewise that the liabilities shall not exceed the June 2, 1979 levels shown on the Balance Sheet....

A balance sheet certified by public accountants as “representing the financial position of [Wedron] at June 2, 1979,” is Exhibit C to the agreement. Neither the balance sheet nor the accompanying notes lists any actual or contingent tort liabilities.

Section 1 of the agreement contains 14 clauses that list and pertain to Wedron’s representations and warranties concerning its properties and liabilities. In Section 1(1), Wedron referred to Exhibits G and F of the agreement as identifying all known, pending, or threatened actions, suits, or proceedings in which Wedron was either a party or in which Wedron or its property might be affected. Section 1(1) specifically warranted, in addition, that there were no other known, pending, or threatened actions, suits, or proceedings. Concerning liabilities, Wedron stated, in Section 1(M) of the agreement:

To the best of Wedron’s knowledge and belief, there are no liabilities that might adversely and materially affect Wedron’s operations that would have to be required to be disclosed in a balance sheet prepared in accordance with generally accepted accounting principles consistently applied that have not been stated in the Balance Sheet or disclosed to [Martin-Marietta] under this Agreement. ,

In Exhibit G, which identifies three pending lawsuits and one threatened lawsuit known to Wedron,. the agreement specified that Wedron and its insurers had undertaken the defense of the pending lawsuits and would undertake the defense of the threatened lawsuit if it materialized. In Exhibit F, which addressed environmental claims, Wedron identified an Illinois plant with possible violations of levels of silica dust and noise, and stated it was developing engineering and administrative measures and monitoring emissions, as requested by the Illinois Environmental Protection Agency.

. Section 5 of the 1979 purchase and sale agreement defined the terms of “Sale, Purchase and Assumption.” In addition to establishing the $33,000,000 purchase price and initial deposit, this section outlined the liabilities of Wedron that Martin-Marietta assumed as part of the asset purchase.

D. Except as provided below, as of the Closing Date, Wedron shall assign to [Martin-Marietta] and [Martin-Marietta] shall assume all of the obligations and liabilities of Wedron on the Closing Date including:

(i) The liabilities and obligations of Wedron on the Balance Sheet, except to the effect such liabilities and obligations shall have been discharged or satisfied prior to the Closing Date;
(ii) The liabilities and obligations of Wedron that have arisen in the ordinary course of business prior to the Closing Date and have not been discharged or satisfied by Wedron prior to the Closing Date;
(iii) The liabilities and obligations of Wedron under the pension plans covering hourly, employees, labor agreements, employment contracts and future obligations in respect of Wedron’s employees set forth in Exhibits H and I;
(iv) The liabilities and obligations of Wedron under the Wedron Silica Company Retirement Plan for Salaried Employees (“Salaried Plan”) in respect of the participants under such Plan as of the Closing Date (other than those participants who terminated employment with Wedron prior to the Closing Date), it being understood that such liabilities and obligations will be transferred in accordance with the requirements of Federal law to a separate pension plan to be maintained by Martin Marietta, as set forth n Section ll.E; and
(v) The liabilities and obligations of Wedron under all leases of real property, or mining claims described in Exhibits A-l or A-2; leases of equipment, machinery and tangible personal property described in Exhibit B — 1; material contracts, agreements and commitments described in Exhibit D and any other agreements, contracts and commitments entered into by Wedron in the ordinary course of business;
provided, however, that [Martin-Marietta] shall not assume any other material obligation or liability of Wedron (i) that does not appear on the Balance sheet, (ii) that has not been disclosed to [Martin-Marietta] under this Agreement, or (iii) to which [Martin-Marietta] ha[s] not specifically consented in writing on or before the Closing Date to assume as of the Closing Date.

Lockheed maintains the foregoing provisions, taken together as they must be as a matter of contract law, show that Martin-Marietta assumed only those limited liabilities specified in the balance sheet and purchase and sale agreement, but did not assume any tort liability, either expressly or impliedly. Lockheed argues that the limited liabilities Martin-Marietta assumed relate solely to day-to-day operating, and that nothing in the 1979 purchase and sale agreement contemplates, or can be construed as impliedly contemplating, an agreement to assume Wedron’s contingent tort liabilities. Lockheed contends its interpretation of the agreement is underscored by Wedron’s having specifically retained liability for its known and anticipated torts, by the agreement’s repeated references to the balance sheet as of the date of closing, which discloses no tort liabilities, and by Wedron’s disclosure and express assumption of all known tort liabilities, including contingent liabilities.

The workers defend the trial court’s ruling principally by relying on paragraph D of Section 5 of the 1979 purchase and sale agreement, which defines the terms of sale, purchase and assumption. Paragraph D, excerpted in full above, lists five categories of “liabilities and obligations” of Wedron that Martin-Marietta assumed “on the Closing Date.” The workers rely on sub-paragraph (ii) of paragraph D, which includes, among the assumed obligations, “The liabilities and obligations of Wedron that have arisen in the ordinary course of business prior to the Closing Date and have not been discharged or satisfied by Wedron prior to the Closing

Date.” The workers claim that liability for their alleged injuries is liability that Wed-ron incurred in the ordinary course of its business of supplying sand to the foundries and that Martin-Marietta therefore assumed that liability by this sub-paragraph.

Lockheed responds that the workers ignore the parameters under which Martin-Marietta assumed the five categories of liabilities and obligations in the subpara-graphs of paragraph D. These parameters appear in the introduction of paragraph D and in its concluding clause. Paragraph D begins by qualifying the obligations that Martin-Marietta undertook in acquiring Wedron’s assets with the following proviso: “Except as provided below, as of the Closing Date.... ” Paragraph D then lists the five following categories of liabilities and obligations: balance sheet, which, we have noted, reflects no tort liabilities; ordinary course of business; pension plans and other employee agreements; retirement plans; and leases and other contractual commitments. But, as the concluding clause states:

provided, however, that [Martin-Marietta] shall not assume any other material obligation or liability of Wedron (i) that does not appear on the Balance sheet, (ii) that has not been disclosed to [Martin-Marietta] under this Agreement, or (iii) to which [Martin-Marietta] ha[s] not specifically consented in writing on or before the Closing Date to assume as of the Closing Date.

3. No Express or Implied Assumption under Delaware or Maryland Law

Lockheed and the workers each rely on Elmer v. Tenneco Resins, Inc., a decision of the Unites States District Court for the District of Delaware. Elmer was a products liability action brought by the surviv- or of a patient who died from deposits of an X-ray contrast material called Thoros-tat. 698 F.Supp. at 536. Heyden Chemical Corporation, which manufactured and sold the Thorostat, had transferred its assets to the Elmer defendants. /¿The defendants sought summary judgment on the successor-liability issue on grounds similar to those Lockheed argued in this case, specifically, that they had assumed only the liabilities that Heyden disclosed and that existed as of the closing date. Id. at 540-41.

The district judge first recognized that, under Delaware law, a successor may incur liability for its predecessor’s torts by expressly or impliedly assuming liability. Id. at 540. In declining to grant summary judgment for the defendants, the court emphasized that while the liabilities assumed under asset acquisition were those that existed “as of the closing date,” the plan also described those liabilities as “whether accrued, absolute, contingent, or otherwise.” Id. at 541 (emphasis added). By specifically contemplating contingent or potential liabilities, and not simply those disclosed by the balance sheet, summary judgment for the defendants was improper. Id. In this case, however, Wedron assumed its known tort and contingent liabilities, while Martin-Marietta assumed no tort liabilities whatsoever. Moreover, the balance sheet here disclosed no tort liabilities, and the “liabilities and obligations” Martin-Marietta did assume under Paragraph D of Section 5 of the agreement were neither potential nor contingent. Rather, they pertained to the known, ordinary operating costs of the business, and responsibilities to the employees of the business.

Maryland, like Delaware, also recognizes express or implied assumption of liability as an exception to the general rule that a successor who purchases the assets of a business incurs no liability for the predecessor’s contingent torts. Nissen Corp., 323 Md. at 617, 632, 594 A.2d at 565-66, 573; see also Smith v. Navistar Int’l Transp. Corp., 737 F.Supp. 1446, 1448-49 (D.Md.1988) (citing general rule on non-liability and four exceptions).

In applying the general rule of non-liability to render summary judgment for the successor entity in Smith, the United States District Court for the District of Maryland concluded the first exception did not apply because the successor had not expressly assumed tort liability for the plaintiffs injuries. In contrast to this case, the successor expressly assumed some liabilities in Smith. 737 F.Supp. at 1449-51. But the asset-acquisition agreement in Smith distinguished between damages “incurred” before the closing date, when the plaintiffs injuries occurred and which the predecessor retained, from liability sustained after the closing date. While the successor’s express assumption included liability for products manufactured before the closing date, the agreement provided that the express assumption did not apply to injuries that occurred before the closing date. Id. at 1449-50. Because the plaintiffs injuries occurred before the closing date, summary judgment for the successor was proper. Id. at 1450. Here, there is no provision that Martin-Marietta assume any tort liability, all of which Wedron retained.

Martin-Marietta’s and Wedron’s recitals in the 1979 purchase and sale agreement occur within the framework of the first exception to the general rule in both Delaware and Maryland: Martin-Marietta, and thus Lockheed, as Martin-Marietta’s successor, incurred no liability for Wedron’s torts unless Martin-Marietta expressly or impliedly assumed that liability in acquiring Wedron’s assets. In the 1979 purchase and sale agreement, Wedron stated there were no liabilities that might adversely affect Martin-Marietta, except those disclosed in the balance sheet or in the agreement, as of the closing date. The balance sheet discloses no tort liabilities. Concerning the tort liabilities Wedron disclosed, both actual and contingent, Wedron and its insurers retained full responsibility. These recitals clarify Wedron’s and Martin-Marietta’s intent that the asset-acquisition agreement fall well within, rather than even marginally outside, the general rule of non-liability for the successor entity.

With respect to the five categories of-“liabilities and obligations” of Wedron that Martin-Marietta assumed under Paragraph D of Section 5 of the agreement, we conclude these liabilities and obligations do not encompass contingent tort liabilities so as to expressly or impliedly take the asset-acquisition outside the general rule of non-liability followed in Delaware and Maryland. All of these liabilities and obligations (balance sheet; ordinary course of business; pension plans and other employee agreements; retirement plans; and leases and other contractual commitments) relate to everyday operation of the business Martin-Marietta acquired, and not to contingent tort liability. Wedron and Martin-Marietta clarified this apparent intent through the concluding exception in paragraph D of Section 5 of the agreement, which disclaims any other “liabilities and obligations” that did not appeal' on the balance sheet, that Wedron did not disclose, or that Martin-Marietta did not specifically consent, in writing, to assume as of the closing date.

The workers dispute this interpretation of the concluding exception by claiming it modifies only the preceding subparagraph (v), which lists leases and other contractual commitments. This interpretation has no merit because it renders meaningless the introduction to Paragraph D, and thus violates basic rules of contract interpretation. See Northwestern Nat’l Ins. Co., 672 A.2d at 43; Jones, 356 Md. at 534, 740 A.2d at 1016. Paragraph D not only encompasses the five categories that follow, but also refers specifically to the concluding exception. Moreover, the concluding exception appears flush at the margin and directly beneath the introduction to Paragraph D. Accordingly, we conclude the exception modifies all of the five sub-paragraphs that precede it, and not just sub-paragraph (v).

The workers also contend that the liability for their alleged injuries is liability that Wedron sustained in the ordinary course of its business, which Martin-Marietta expressly assumed under sub-paragraph (ii) of Paragraph D. Considering Paragraph D(ii) within the context of the entirety of Paragraph D, as well as the entirety of the agreement, this is not a reasonable interpretation. The liabilities and obligations that Martin-Marietta assumed by paragraph D affect the day-today operation of the business. Moreover, the concluding exception specifically disclaims any other “material” liability or obligation, and Wedron also warranted, in Section 1(M) of the agreement, there were no other liabilities that “might adversely and materially affect” operations of its business than those it did disclose. That tort liabilities are not in the “ordinary course of business” is underscored by Wedroris having listed its known and contingent tort and environmental liabilities and obligations in separate exhibits to the sales agreement.

We conclude that Martin-Marietta did not expressly or impliedly assume liability for the workers’ alleged injuries and that Lockheed was therefore entitled to summary judgment under both Delaware and Maryland law.

4. No Express Assumption under Texas Law

As addressed above, Texas strongly embraces the non-liability rule. To impose liability for a predecessor’s torts, the successor corporation must have expressly assumed liability. Tex. Bus. CoRP. Act art. 5.10(B)(2). The statute protects both Texas corporations and foreign corporations like Lockheed, which is incorporated in Maryland. See id. We conclude there is no basis in Texas law for interpreting the 1979 purchase and sale agreement as encompassing an express assumption of liability for Wedroris alleged torts against the workers, for the same reasons that we rejected that interpretation under Delaware and Maryland law.

While we relied on the agreement itself, rather than case law, to conclude that, in expressly assuming “ordinary course of business” liabilities and obligations, Martin-Marietta did not expressly or impliedly assume contingent tort liabilities, Texas precedents reject similar arguments. See Mudgett, 709 S.W.2d at 755 (applying Ohio law); Southwestern Gas, Light & Power Co., 275 S.W. at 736; see also Tuscarora Corp. v. HJS Indus., Inc., 794 S.W.2d 435, 439-40 (Tex.App. — Corpus Christi 1990, writ denied) (holding that successor merchant did not incur liability for predecessor’s breach of purchase order by accepting transfer of obligations “entered into in the ordinary course of business” because this term refers to matters that transpire “as a matter of daily custom in business”) (quoting from Black’s Law DictionaRY (4th ed.1979)).

We sustain Lockheed’s first point of error. Having determined that Lockheed established its right to summary judgment, as a matter of law, on the grounds that it was not contractually liable as a successor to Wedron for its contingent torts, we need not address Lockheed’s second point, which assigns error to the trial court’s having not rendered summary judgment in favor of Lockheed on limitations grounds.

Conclusion

We reverse the judgment of the trial court and render judgment that Lockheed is not contractually liable for any damages adjudicated against Wedron Silica Company of Delaware for the workers’ alleged causes of action.

      . The record shows that the workers had initially sued an Ohio corporation, Wedron Silica Company. The Ohio Wedron corporation prevailed on a motion for summary judgment claiming it had ceased operations in 1980 and could not have furnished products to the workers’ factories.

      . In contending that Delaware law controls, Lockheed has abandoned its trial-court reliance on the laws of Delaware, Texas, and Maryland.

      . In contrast to Lockheed, which has narrowed its choice-of-law arguments, the workers have expanded theirs, by adopting Lockheed’s reliance on the laws of Delaware, Texas, and Maryland, albeit toward a different result. While we may not ordinarily consider arguments not presented to the trial court when reviewing a summary judgment, Tex.R. Civ. P. 166a(c), we consider the workers’ contentions here as raised by Lockheed's motion. See Cincinnati Life Ins. Co., 927 S.W.2d at 625 (holding that review of cross-motions for summary judgment encompasses all questions presented to the trial court).

      . Nevertheless, we will demonstrate how the result would be the same under Maryland and Texas law.

      . The rationale for the rule of non-liability is that the successor did not sell or distribute the allegedly defective product, and therefore does not fall within the general rule by which commercial sellers and distributors of products incur liability. Restatement (Third) of Products Liability § 12 cmt. a (1998) (quoting from Restatement (Third) of Products Liability § 1 (1998) ("[0]ne ... who sells or distributes a defective product is subject to liability for harm ... caused by the defective product.”) (emphasis in original)).

      . Article 5.10(B)(1) eliminates the "de facto merger” doctrine, the third exception under the Restatement. Tex. Bus. Corp. Act Ann. 5.10(B)(1) (Vernon Supp.2000). See Mudgett v. Paxson Mach. Co., 709 S.W.2d 755, 758-59 (Corpus Christi 1986, writ ref’d n.r.e.). In Mudgett, the Corpus Christi Court of Appeals rejected the "mere continuation” theory, the fourth exception recognized by the Restatement, as contrary to the legislative intent of article 5.10(B). Griggs v. Capitol Mach. Works, rejected yet another exception, the "product line” theory, as incompatible with the basic product-liability principle, addressed in the preceding footnote, in that the successor did not create the risk associated with its predecessor’s product. 690 S.W.2d 287, 294 (Tex.App. — Austin), writ refd n.r.e. per curiam, 701 S.W.2d 238 (Tex.1985).