author: CHARLES W. SEYMORE, Justice.

text:
    Marshall COLEMAN, et al., Appellants, v. KLÖCKNER & CO. AG and Klöckner Industrie-Anlagen GmbH, Appellees.
    No. 14-04-00118-CV.
    Court of Appeals of Texas, Houston (14th Dist.).
    Aug. 18, 2005.
    Rehearing Overruled Nov. 17, 2005.

      James T. Liston, Francis I. Spagnoletti, Jerry Von Sternberg, Houston, for appellants.
    Brian John Hurst, Elizabeth Ann Hand-schuch, Jay Forrest Utley, Kenya Scott Woodruff, Dallas, for appellees.
    Panel consists of Chief Justice HEDGES and Justices FOWLER and SEYMORE.
   OPINION

CHARLES W. SEYMORE, Justice.

Appellants bring this interlocutory appeal from an order granting the special appearances of Klockner & Co. AG (“Klockner & Co.”) and Klockner Indus-trie-Anlagen GmbH INA (“Klockner INA”). We affirm the trial court’s judgment. ■

I. BACKGROUND

Appellants are veterans of the 1991 Persian Gulf War and some of their family members. In 1994, appellants filed suit against approximately eighty defendants alleging that the defendants sold to Iraq the material, equipment, and technology used to create biological and chemical weapons used in the war. The case was removed to federal court, which dismissed 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).

Subsequent to remand, Klockner & Co. and Klockner INA (collectively, the “Klockner defendants”), were added as defendants. The Klockner defendants filed special appearances pursuant to Texas Rule of Civil Procedure 120a, challenging personal jurisdiction. On October 7, 2003, the trial court granted both special appearances, and appellants filed this interlocutory appeal from the trial court’s order. See Tex. Civ. PraC. & Rem.Code Ann. § 51.014(a)(7) (Vernon Supp.2004^05).

II. STANDARD OP REVIEW

The plaintiff bears the initial burden of pleading sufficient allegations to bring a non-resident defendant within the personal jurisdiction of a Texas court. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex.2002); McKanna v. Edgar, 388 S.W.2d 927, 930 (Tex.1965). A defendant who challenges the trial court’s exercise of personal jurisdiction through a special appearance bears the burden of negating all bases of personal jurisdiction. Marchand, 83 S.W.3d at 793; Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 203 (Tex.1985).

Whether a trial court has personal jurisdiction over a defendant is question of law, which we review de novo. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 805-06 (Tex.2002); Marchand, 83 S.W.3d at 794. However, the trial court frequently must resolve questions of fact before deciding the question of jurisdiction. Marchand, 83 S.W.3d at 794. When, as here, the trial court does not issue findings of facts and conclusions of law with its special appearance ruling, all fact findings necessary to support the judgment and supported by the evidence are implied. Id. at 795; Worford v. Stamper, 801 S.W.2d 108, 109 (Tex.1990). When the appellate record includes both the reporter’s and clerk’s records, however, these implied findings are not conclusive and may be challenged for legal and factual sufficiency. Marchand, 83 S.W.3d at 795.

III. The Law op Personal Jurisdiction

A Texas Court may exercise personal jurisdiction over a non-resident defendant only if (1) the Texas long-arm statute authorizes the exercise of personal jurisdiction, and (2) the exercise of personal jurisdiction comports with the state and federal constitutional guarantees of due process. See id. The Texas long-arm statute permits Texas courts to exercise jurisdiction over a non-resident that “does business” in Texas. Tex. Civ. Prao. & Rem. Code Ann. § 17.042 (Vernon 1997). The broad language of the “doing business” requirement in section 17.042 permits the statute to reach “as far as the federal constitutional requirements of due process will allow.” Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991). Thus, the requirements of the long-arm statute are satisfied if the exercise of personal jurisdiction comports with federal due process requirements. See id.

The due process clause of the federal constitution permits a court to exercise jurisdiction over a nonresident defendant if (1) the defendant has purposely established “minimum contacts” with the forum state, and (2) the exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice. Coleman, 83 S.W.3d at 806; Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Minimum contacts must be based on “some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Burger King v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The purposeful availment requirement ensures that a non-resident will not be haled into a Texas court based solely upon random, fortuitous, or attenuated contacts or the unilateral activity of another party or third person. Guardian Royal, 815 S.W.2d at 226. The defendant’s activities, whether they are direct acts within Texas or conduct outside Texas, must justify a conclusion that the defendant could reasonably anticipate being called into a Texas court. Coleman, 83 S.W.3d at 806. In conducting a minimum contacts analysis, it is the quality of the defendant’s contacts, rather than their minimum number, that is important. Id.

While the jurisdiction of Texas courts always depends on the existence of some minimum contacts, the requisite extent of those contacts varies depending upon whether the litigants are asserting specific or general jurisdiction. Guardian Royal, 815 S.W.2d at 227; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Specific jurisdiction is established when (1) a defendant’s contacts with the forum are purposeful, and (2) the cause of action arises from or relates to a defendant’s contacts. Guardian Royal, 815 S.W.2d at 227-28. In contrast, general jurisdiction is established when a defendant’s contacts in the forum are continuous and systematic, allowing the forum to exercise jurisdiction over the defendant even if the cause of action did not arise from or relate to activities conducted within the forum state. Id. at 228. General jurisdiction requires a showing that the non-resident defendant conducted substantial activities within the forum state, a more demanding minimum contacts analysis than for specific jurisdiction. Id. To satisfy due process under either general or specific jurisdiction, the exercise of jurisdiction must not be unreasonable; that is, the exercise of jurisdiction must comport with traditional notions of fair play and substantial justice. See id, at 228-33.

In this case, the parties agree that only general jurisdiction is applicable. Therefore, we limit our analysis to determining whether the Klockner defendants’ contacts with Texas give rise to general jurisdiction.

IV. Evidence Relevant to Minimum Contacts

A. Klockner & Co.

Klockner & Co. is a German holding company that is headquartered in Duisburg, Germany. Klockner & Co. does not manufacture any products; rather it sells and markets throughout the world products made by various affiliated companies. There is no evidence to show, and appellants do not contend, that Klockner & Co. has had any contacts with Texas.

B. Klockner INA

Klockner INA, at the time pertinent to this case, was a wholly-owned subsidiary of Klockner & Co. Klockner INA is an international engineering and contracting firm that focuses on a broad range of projects in the following industries: power plants and distribution systems; ports; water treatment plants; pipeline and irrigation systems; material handling and transportation systems; glass and ceramics; textiles; wood processing; hotels; and steel production and processing. The only contact that Klockner INA had with Texas was a single visit to Texas by Klockner INA’s former CEO, Gunther Hering, in which he met with representatives from the Texas engineering firm Haliburton Co. to discuss potential business developments.

C. Subsidiary Corporations

In support of their jurisdictional argument, appellants contend that the Texas contacts of two subsidiary corporations, Kloekner Industrial Installations, Inc. (“Kloekner Industrial”) and Union Air Transport (“UAT”), should be imputed to the Kloekner defendants.

1. Union Air Transport

UAT, at the time pertinent to this case, was a wholly-owned subsidiary of Kloekner & Co. UAT is a New York Corporation with its principal place of business in Texas. UAT is a named defendant in this case, but did not contest personal jurisdiction in the trial court and is not a party to the present appeal.

2. Kloekner Industrial

In 1975, Kloekner INA founded Klóck-ner Industrial, a Delaware corporation with its principal office in New York. Kloekner Industrial is a wholly-owned subsidiary of Kloekner INA. Kloekner Industrial consists of only three employees: a president, a project manager, and a secretary. Kloekner Industrial’s president, Klaus Brosig (“Brosig”), testified that one of the purposes for which Kloekner INA established Kloekner Industrial was to secure Exim Bank financing for international construction projects to be built by Klóck-ner INA. However, since its inception, Kloekner Industrial has expanded its business activities beyond those which it was set up to perform. Brosig testified that Kloekner Industrial is not limited to working on Kloekner INA projects. Rather, Kloekner Industrial has begun to serve as an “exporter of record,” whereby it assists other companies in purchasing and exporting U.S. manufactured goods.

Appellants point to various contacts that Kloekner Industrial had with Texas engineering firms between 1986 and 1994, including Hudson Engineering and Project Management Corp., Haliburton Co., Brown & Root, Merex Corp., Xytel-Bechtel, Gulf Interstate Engineering, Howe-Baker Engineers and Bechtel (collectively, “the Texas engineering firms”). However, the only relevant contacts with the Texas engineering firms are those that occurred prior to the time of appellants’ injuries. See MedCost, L.L.C. v. Loiseau, 166 S.W.3d 421, 434 (Tex.App.-Austin 2005, no pet. h.) (“The relevant contacts are those up to the time of injury.”); Botter v. Am. Dental Ass’n, 124 S.W.3d 856, 865 (Tex.App.-Austin 2003, no pet.) (“Texas authority implies that the relevant contacts are those up to the time of the injury.”); AmQuip Corp. v. Cloud, 73 S.W.3d 380, 388 (Tex.App.-Houston [1st Dist.] 2002, no pet.) (holding that telephone calls made after accident were irrelevant to jurisdiction); Scott v. Huey L. Cheramie, Inc., 833 S.W.2d 240, 242 (Tex.App.-Houston [14th Dist.] 1992, no writ) (holding that contract signed after injury occurred was irrelevant to jurisdiction). The latest time period that appellants’ injuries could have occurred was the summer of 1991 because this was the time that the last American troops returned home from the Persian Gulf War. Therefore, the only contacts by Kloekner Industrial with the Texas engineering firms that are potentially relevant to our jurisdictional analysis are the ones which occurred prior to the summer of 1991 (the “relevant time period”).

During the relevant time period, Klóck-ner Industrial’s president, Klaus Brosig, attended several meetings in Houston, Texas, in an effort to identify technical partners to work with Kloekner Industrial on international projects. Kloekner Industrial also entered into four contracts with Texas-based engineering firms and, at various times, corresponded with them. These contacts are further described below.

(a) Hudson Engineering and Project Management Corp.

On October 19, 1990, Klóckner Industrial entered into a “pre-proposal” agreement with Hudson Engineering whereby the parties agreed to work together exclusively in submitting a bidding proposal for a gas treatment plant project in Bolivia. The agreement contemplated that if the parties were awarded the contract on the project, Klóckner Industrial would serve as prime contractor (exporter of record), and Hudson Engineering, as subcontractor, would “assume responsibility for performing design engineering, procurement of materials and fabricated equipment sourced in the U.S.[,] and supervision of field installation and start-up services.” The agreement provided that it was to be governed by the laws of the State of New York.

(b) Haliburton Co.

On April 4, 1991, Brosig, along with Klóckner INA’s former CEO, Gunther Hering, traveled to Texas to attend a meeting with representatives from Hali-burton Co., Brown & Root, Inc. and Brown & Root Braun. A meeting report indicates that the activities and capabilities of each company were discussed. However, the record does not indicate whether any specific business opportunities were discussed at either of these meetings.

On February 14,1991, Brosig attended a meeting in Houston, Texas, at which representatives from Haliburton Co. and Brown & Root, Inc. were present. A meeting report indicates that Haliburton Co. was investigating the possibility of engaging in certain countertrade transactions, and that the parties discussed whether Klóckner Industrial could assist in structuring such transactions. The record also contains a letter dated June 12, 1991 that Brosig sent to Dave Stegemeyer, International Credit Manager, Oil Field Services Group, discussing potential counter-trade activities.

(c)Brown & Root, Inc.

On August 24, 1988, Brosig attended a meeting in Houston, Texas, with representatives from Brown & Root, Inc. On June 19, 1991, Klóckner Industrial entered into a “pre-proposal” agreement with Brown & Root whereby the parties agreed to work together exclusively in submitting a bidding proposal for a gas treatment plant project in Bolivia. The agreement contemplated that if the parties were awarded the contract on the project, Klóckner Industrial would serve as prime contractor (exporter of record), and Brown & Root, as subcontractor, would “assume responsibility for all technical aspects of the Project[,] supplying to Klóckner the necessary design engineering, materials and fabricated equipment sourced in the U.S. and supervision of field installation and start-up services.” The agreement provided that it was to be governed by the laws of the State of New York.

The record also contains a letter, dated April 26, 1988, sent by Wayne T. Mitchell, Manager of Business Development, Mineral & Metal Industries of Brown & Root, Inc., to Brosig declining an invitation to a Klockner INA exhibit in Germany. In the letter, Mitchell identified other Brown & Root executives who he thought might be interested in attending the exhibit.

(d) Merex Corporation

On February 12, 1991 and April 3, 1991, Brosig met with representatives from Me-rex Corporation in Houston, Texas. As a result of these meetings, the parties entered into a contract whereby they agreed to cooperate in providing equipment and materials for an international construction project. Under the contract, Klockner Industrial was to assume the role of “exporter of record.”

Y. Single Business Enterprise Theory

In their first issue, appellants contend that Klockner & Co., Klockner INA, Klockner Industrial, and UAT (collectively “the German entities”) operate as a single business enterprise under Texas law. Therefore, appellants contend that the Texas contacts of UAT and Klockner Industrial should be imputed to the Klockner defendants for personal jurisdiction purposes.

The “single business enterprise” theory is an equitable doctrine used to disregard the separate existence of corporations when the corporations are not operated as separate entities, but rather integrate their resources to achieve a common business purpose. Old Republic Ins. Co. v. Ex-Im Servs. Corp., 920 S.W.2d 393, 395-96 (Tex.App.-Houston [1st Dist.] 1996, no writ). Factors to be considered in determining whether corporations operate as a single business enterprise include, but are not limited to, the following: (1) common employees; (2) common offices; (3) centralized accounting; (4) payment of wages by one corporation to another corporation’s employees; (5) common business name; (6) services rendered by the employees of one corporation on behalf of another corporation; (7) undocumented transfers of funds between corporations; and (8) unclear allocation of profits and losses between corporations. Paramount Petroleum Corp. v. Taylor Rental Ctr., 712 S.W.2d 534, 536 (Tex.App.-Houston [14th Dist.] 1986, writ ref'd n.r.e.).

Appellants did not plead the “single business enterprise” theory as a basis for imputing the contacts of Klockner Industrial and UAT to the German defendants. Instead, appellants alleged that the German defendants should be subject to liability based on theories of agency and alter ego, and the German concept of Kon-zem. Furthermore, appellants did not present the “single business enterprise” theory at the special appearance hearing. Accordingly, the Klockner defendants argue that appellants have waived their contention that the German entities operate as a single business enterprise.

Appellants respond that the “single business enterprise” theory has just recently begun to emerge in Texas appellate courts, and that a litigant cannot waive a previously undeveloped legal doctrine. Appellants also point out that in Southern Union Co. v. City of Edinburg, the Texas Supreme Court recently declined to decide whether “a theory of ‘single business enterprise’ is a necessary addition to Texas law” for purposes of disregarding corporate structure. 129 S.W.3d 74, 87 (Tex.2003). Nevertheless, before appellants filed the operative pleadings in this case, several Texas appellate courts previously recognized the “single business enterprise” theory as a method by which to disregard the corporate structure of related entities. See, e.g., Hall v. Timmons, 987 S.W.2d 248, 252 (Tex.App.-Beaumont 1999, no pet.); Beneficial Personnel Servs. of Tex., Inc. v. Rey, 927 S.W.2d 157, 165 (Tex.App.-El Paso 1996), vacated by agreement, 938 S.W.2d 717 (Tex.1997); Old Republic Ins. Co., 920 S.W.2d at 395-96; Paramount Petroleum Corp., 712 S.W.2d at 536. Accordingly, we conclude that appellants had notice of the “single business enterprise” theory, and thus had the opportunity to assert this theory in order to persuade the trial court to disregard the corporate structure of the German entities.

Appellants further maintain that they should not be deemed to have waived the “single business enterprise” theory because “the fairness and avoidance-of-surprise considerations that ordinarily undergird issues of waiver are lacking due to the fact that [appellants] have long and consistently claimed that the two Klockner defendants (both German companies) are subject to Texas jurisdiction based, in large part, on the U.S. activities of their subsidiaries.” We find this argument unpersuasive. While avoidance of surprise to the opposing party is one of the justifications for requiring a party to plead a theory relied upon, an equally important justification is to prevent an appellate court from reversing an otherwise error-free judgment based on an argument that was not raised in the trial court. It is an established rule of Texas Procedure that, absent fundamental error, an appellate court has no discretion to reverse an otherwise error-free judgment based on a new argument raised for the first time on appeal. Larsen v. FDIC/Manager Fund, 835 S.W.2d 66, 74 (Tex.1992).

Here, the “single business enterprise” theory was not presented to the trial court. Moreover, there is nothing in the record to suggest that the trial court either explicitly or implicitly considered the relevant factors of the “single business enterprise” theory as part of its jurisdictional analysis. Therefore, we have no discretion to reverse the trial court’s decision based upon this theory of law. Absent the requisite “fundamental error,” we hold that appellants have waived this claim by not presenting it at the trial court level. Accordingly, we overrule appellants’ first issue.

VI. Agency Theory

In their second issue, appellants contend that Klockner Industrial’s contacts with Texas should be imputed to Klockner INA for jurisdictional purposes because Klock-ner Industrial served as an agent of Klock-ner INA.

A. Standard of Review

The question of whether an agency relationship exists is generally a question of fact. Lyons v. Lindsey Morden Claims Management, Inc., 985 S.W.2d 86, 90 (Tex.App.-El Paso 1998, no pet.); Jorgensen v. Stuart Place Water Supply Corp., 676 S.W.2d 191, 194 (Tex.App.-Corpus Christi 1984, no writ). Here, the trial court did not expressly find the absence of an agency relationship between Klockner INA and Klockner Industrial. Nevertheless, all the facts necessary to support the trial court’s judgment and supported by the evidence are implied. Marchand, 83 S.W.3d at 795. Accordingly, we construe appellants’ argument that an agency relationship exists between Klockner INA and Klockner Industrial as a challenge to the legal and factual sufficiency of the evidence to support the trial court’s implied finding that no such agency relationship exists. See SITQ E.U., Inc. v. Reata Rests., Inc., 111 S.W.3d 638, 652 (Tex.App.-Fort Worth 2003, pet. denied) (noting that agency is generally a question of fact and holding that the evidence was legally and factually sufficient to support trial court’s implied finding that an agency relationship existed); Townsend v. Univ. Hospital-University of Colo., 83 S.W.3d 913, 921 (Tex.App.-Texarkana 2002, pet. denied) (holding that evidence was factually sufficient to support trial court’s implied finding that there was no agency relationship between the parties).

In reviewing the legal sufficiency of evidence, we consider all the evidence in the light most favorable to the prevailing party, indulging every reasonable inference in that party’s favor. Associated Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285-86 (Tex.1998); see City of Keller v. Wilson, 48 Tex. Sup.Ct. J. 848, 849 (Tex. June 10, 2005). A legal sufficiency challenge fails if there is more than a scintilla of evidence to support the finding. Lee Lewis Constr., Inc. v. Harrison, 70 S.W.3d 778, 782 (Tex.2001); Marchand, 83 S.W.3d at 795. More than a scintilla of evidence exists if the evidence of a vital fact furnishes some reasonable basis for differing conclusions by reasonable minds. Lee Lewis Constr., Inc., 70 S.W.3d at 782-83. In reviewing a factual sufficiency challenge, we set aside the trial court’s decision only if its ruling is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986), overruled on other grounds, Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 388 (Tex.2000).

B. Review of Agency Principles

Because the parties dispute whether Klockner Industrial is an agent of Klockner INA — an issue which affects our minimum contacts analysis — we turn to the applicable agency principles to resolve the issue. An agent’s contacts can be imputed to the principal for purposes of the jurisdictional inquiry. Walker Ins. Servs. v. Bottle Rock Power Corp., 108 S.W.3d 538, 549 n. 4 (Tex.App.-Houston [14th Dist.] 2003, no pet.). However, agency will not be presumed, and the party asserting the relationship has the burden of proving it. Schultz v. Rural/Metro Corp., 956 S.W.2d 757, 760 (Tex.App.-Houston [14th Dist.] 1997, no writ). An agency relationship may be found from the underlying facts or direct and circumstantial evidence showing the relationship of the parties. Id.

An agent is one who is authorized by a person or entity to transact business or manage some affair for the person or entity. Townsend, 83 S.W.3d at 921. The critical element of an agency relationship is the right to control, and the principal must have control of both the means and details of the process by which the agent is to accomplish his task in order for an agency relationship to exist. Id. Absent proof of the right to control the means and details of the work performed, only an independent contractor relationship is established. Happy Indus. Corp. v. Am. Specialties, Inc., 983 S.W.2d 844, 852 (Tex.App.-Corpus Christi 1998, pet. dism’d w.o.j.). The distinction between an independent contractor and an agent is important to the jurisdictional inquiry because the actions of an independent contractor by themselves are not sufficient to subject a non-resident corporation to the jurisdiction of the forum state. O’Quinn v. World Indus. Constructors, Inc., 874 F.Supp. 143, 145 (E.D.Tex.), aff'd, 68 F.3d 471 (5th Cir.1995).

C. Application of Agency Principles to Klockner INA and Klockner Industrial

Appellants contend that Klockner Industrial is an agent of Klockner INA, and therefore, all of Klockner Industrial’s contacts with the Texas engineering firms should be imputed to Klockner INA for jurisdictional purposes. In support of their argument, appellants contend (1) Brosig acted as agent of Klockner INA when he visited and corresponded with the Texas engineering firms because he solicited the firms to participate in foreign projects with Klockner INA, (2) the fact that Klockner Industrial consisted of only three employees demonstrates that it was merely an agent of Klockner INA, (3) Bro-sig made representations to the Texas engineering firms that prove an agency relationship between Klockner Industrial and Klockner INA, and (4) Klockner Industrial is an “indispensable” agent of Klockner INA because, without Klockner Industrial, Klockner INA could not (a) legally export U.S.-manufactured machinery and equipment abroad, or (b) obtain financing from the U.S. government-backed Exim Bank to ship U.S. manufactured goods overseas for use on Klockner INA projects.

1. Solicitation of Business for Klock-ner INA

Appellants contend that Brosig acted as an agent of Klockner INA when he visited and corresponded with the Texas engineering firms because he solicited the firms to participate in foreign projects in which Klockner INA was involved in the construction. In his deposition, Brosig testified that Klockner Industrial would sometimes serve as “exporter of record” for U.S.-manufactured goods for projects on which Klockner INA was involved in construction of the project, but that, on other occasions, Klockner INA was not involved in the project. The record also reflects that Klockner Industrial entered into contracts with Klockner INA whereby Klockner Industrial agreed to identify “qualified U.S. firms, which can assume the role of technical partners in [Klockner INA’s] international projects.” This constitutes some evidence from which it can be inferred that Brosig visited the Texas engineering firms, in part, to promote the business of Klockner INA.

However, the Klockner defendants argue there is insufficient evidence that Klockner Industrial was acting as the agent of Klockner INA when it contacted the Texas engineering firms because appellants failed to prove the critical element of “control.” The Klockner defendants cite Williamson v. Petrosakh Joint Stock Co., 952 F.Supp. 495 (S.D.Tex.1997) and Dickson Marine, Inc. v. Panalpina, Inc., 179 F.3d 331 (5th Cir.1999) to support their position that the evidence fails to establish the “control” element that is requisite to an agency relationship.

In Williamson, the plaintiffs filed a wrongful death lawsuit against Petrosakh, a Russian corporation. 952 F.Supp. at 496. Petrosakh was owned 95% by Nimir Petroleum Petrosakh Limited (“Nimir Cyprus”), a Cyprus company. Id. Nimir Cyprus’ sister company, Nimir Petroleum Company U.S.A., Inc. (“Nimir USA”), which was based in Texas, had a technical services contract with Petrosakh under which Nimir USA would recruit and hire independent contractor consultants to work at the Petrosakh refinery in Russia. Id.

Pursuant to the contract, Nimir USA located and hired Williamson, a Texas resident, to work at the Petrosakh refinery in Russia. Id. After Williamson died in an incident at the refinery, the plaintiffs filed the wrongful death suit against Petrosakh in a Texas court. Id. The plaintiffs asserted that jurisdiction over Petrosakh was proper based on the Texas contacts of Nimir USA. Id. The plaintiffs argued that Nimir USA was Petrosakh’s agent because Nimir USA had recruited and hired Williamson on behalf of Petrosakh. Id. at 498. The court, however, held there was insufficient evidence to establish an agency relationship, despite the close corporate relationship between the entities. Id. The court concluded there was no evidence to show that Petrosakh had the right to control the details of Nimir USA’s work, even though Nimir USA acted on behalf of Pe-trosakh in fulfillment of the technical services contract. Id. Therefore, the court found there was only an independent contractor relationship between the entities and declined to impute the Texas contacts of Nimir USA to Petrosakh. Id.

The same issue of control was also present in Dickson Marine, which involved the Louisiana long-arm statute. Similar to Texas, the Louisiana long-arm statute extends to the limits of due process. See 179 F.3d at 336. In Dickson Marine, a vessel owned and operated by Dickson Marine, Inc. (“Dickson”) needed repair work while operating off the coast of West Africa. Id. at 335. Dickson contacted Air Sea Broker, Ltd. (“Air Sea”), a Swiss corporation, to arrange for the repairs. Id. Air Sea referred Dickson to Panalpina Transports Mondiaux Gabon S.A. (“Panalpina Gabon”), a sister company, to handle the repairs. Id. During the repair work, the vessel capsized. Id. Dickson filed suit against Panalpina Gabon and Air Sea in a Louisiana court to recover for property damage to the vessel. Id. Dickson asserted that jurisdiction over Panalpina Gabon was proper based on the Louisiana contacts of Air Sea because Air Sea acted as Panalpina Gabon’s agent. Id. at 338.

The court, however, found that there was insufficient evidence to show that Pan-alpina Gabon asserted sufficient control over Air Sea to establish an agency relationship. Id. The court noted it was undisputed that Air Sea had frequently benefit-ted Panalpina Gabon by assisting maritime companies in contracting with Panalpina Gabon for services to be performed in Gabon. Id. While the evidence showed that Air Sea was a “middleman” who assisted vessel owners in contracting with the Panalpina Worldwide Subsidiaries for maritime services, the court held that those facts alone were not sufficient to establish the control required to prove an agency relationship. Id. at 338.

Similarly, in this case, we find there is insufficient evidence in the record to show that Klockner INA controlled Klockner Industrial, or its president, Klaus Brosig. We find no evidence that Klockner INA directed Brosig to travel to Texas to meet with the Texas engineering firms, nor do we find any evidence that Klockner INA controlled the means and details of Bro-sig’s work. Moreover, we find no evidence that Klockner Industrial had actual authority to negotiate or enter into contracts on behalf of Klockner INA. Cf. Orozco v. Sander, 824 S.W.2d 555, 556 (Tex.1992) (holding that under the facts and circumstances of the case, it could be implied that the alleged agent entered into the contract at the direction of and on behalf of the principal).

Although Brosig may have contacted the Texas engineering firms for the mutual benefit of both Klockner Industrial and Klockner INA, we find that such evidence alone is insufficient to establish an agency relationship. The missing element is Klockner INA’s right to control the means and details of Klockner Industrial’s work. See Gutierrez v. Cayman Islands Firm of Deloitte & Touche, 100 S.W.3d 261, 271 (Tex.App.-San Antonio 2002, pet. dism’d) (finding that evidence failed to establish an agency relationship between related accounting firms, even though one accounting firm performed auditing work for the other, because there was no evidence that one had the right to control the other’s work).

2. Limited Size of Klockner Industrial

Although appellants cite no direct evidence of control, they contend that the fact that Klockner Industrial consisted of only three employees demonstrates that it was merely an agent of Klockner INA. Appellants contend that Klockner Industrial lacked any in-house engineering capabilities and assert that such a small company could not physically implement the construction projects in which it solicited the Texas engineering firms to participate. Therefore, appellants assert that any actual construction contracts Klockner Industrial obtained were performed by and through Klockner INA.

However, Brosig testified that Klockner Industrial’s work is not restricted to projects in which Klockner INA was involved in the project. Brosig further testified that Klockner Industrial does not need financial support from Klockner INA in order to serve as “exporter of record” or to export U.S. equipment and material. The record further indicates that Klockner Industrial was able to independently generate revenues, operate with sufficient capital, pay its own salaries and expenses, and maintain separate property. Under these circumstances, we will not presume that an agency relationship existed merely because of Klockner Industrial’s limited resources and personnel.

3. Representations Made by Brosig

Appellants also rely on Brosig’s testimony concerning representations he made to the Texas engineering firms. In his deposition, Brosig testified as follows:

Q: Now, I take it when you would go [to] the various businesses, like Brown & Root or Haliburton or Hudson Engineering, and solicit their business to represent them in order to be the prime contractor for major projects overseas that you wouldn’t come in and represent that you were asking them to contract with [Klockner Industrial] that had total assets of $1.7 million for one hundred million dollar projects overseas, were you?
[Witness nodded head]. t>
You were representing that you were coming in as the representative of Klockner INA Germany, weren’t you? <©
Yes. >
And I would think that if I, Joe Blow, with an office in Garden City, New York and one secretary walked into M.W. Kellog and said, I want you to use me as prime contractor on a one hundred million dollar project, they would laugh me out of the door. But now when you walk in, they see you, and what you tell them is that, I’m a representative of Klockner INA Germany, don’t you? ¿o
No. I represented I’m a member of Klockner INA in New York.
Isn’t true that you represented to those customers that you were there to speak on behalf of Klockner INA Germany? &
[No audible answer].
Mr. Brosig, you’re under oath to tell the truth. <0
Yes. !>
The truth is the truth. <Q
Can you please phrase this question again? !>
When you were in Houston during '92 and '93, and at any other time, soliciting customers, didn’t you represent to those potential customers that you were representing the interests of Klockner INA Germany? &
I represented interests of Klockner INA international group.
Q: Which includes Klockner INA Germany, doesn’t it?
A: Yes.

An alleged agent may testily to facts concerning his authority to act on behalf of the principal. See Cook v. Hamer, 158 Tex. 164, 309 S.W.2d 54, 58 (1958). However, we find that Brosig’s broad assertion that he represented the interests of Klockner INA international group does not establish a sufficient factual basis to prove an agency relationship. Moreover, to the extent that appellants’ argument can be construed as an assertion that Brosig’s representations to the Texas engineering firms gave him apparent authority to act on behalf of Klockner INA, we note that only an alleged principal’s words or conduct that are represented to the third party can clothe an alleged agent with apparent authority. BML Stage Lighting, Inc. v. Mayflower Transit, Inc., 14 S.W.3d 395, 401 (Tex.App.-Houston [14th Dist.] 2000, pet. denied). Therefore, an agency relationship cannot be established through any representations that Brosig made to the Texas engineering firms.

4. “Indispensable” Agent Theory

In further support of their claim of agency, appellants contend that Klockner Industrial was an “indispensable” agent of Klockner INA because, without Klockner Industrial, Klockner INA could not (1) legally export U.S. — manufactured machinery and equipment abroad, or (2) obtain financing from the U.S. government— backed Exim Bank to ship U.S. manufactured goods overseas for use on Klockner INA projects.

Brosig testified that on certain projects in which Klockner INA was involved in construction of the project, Klockner Industrial would assist Klockner INA’s foreign customer in obtaining U.S. financing so that the foreign customer could purchase U.S. machinery and equipment to be used during construction. On these projects, Klockner Industrial would also serve as “exporter of record.” Brosig testified that United States law requires the “exporter of record” to be an American company, and that Exim Bank financing is only available when the “expert of record” is an American company. Therefore, appellants contend that Klockner Industrial, as an American company, performed an “indispensable” function for Klockner INA.

The record clearly establishes that on certain occasions, Klockner Industrial performed a beneficial function for Klockner INA. But the mere existence of a subsidiary corporation that performs a beneficial function for the parent does not automatically establish the existence of an agency relationship. Where, as here, there is an absence of any evidence to show that the parent controls the subsidiary’s work, we do not presume the existence of an agency relationship. See Schultz, 956 S.W.2d at 760 (stating that an agency relationship will not be presumed).

After reviewing all of the evidence, we conclude that there is some evidence supporting the trial court’s implied finding that Klockner Industrial was not acting as the agent of Klockner INA when it contacted the Texas engineering firms. See Lee Lewis Constr., 70 S.W.3d at 782-83. Moreover, we conclude that the trial court’s implied finding that Klockner Industrial was not the agent of Klockner INA with respect to these contacts is not manifestly unjust. See Pool, 715 S.W.2d at 635. Therefore, we find that the evidence is legally and factually sufficient to support the trial court’s implied finding that no agency relationship existed with respect to Klockner Industrial’s contacts with the Texas engineering firms.

Accordingly, we overrule appellants’ second issue.

VII. GeneRAL Jurisdiction

In their third issue, appellants contend that the Texas contacts of Klock-ner Industrial and UAT, combined with the singular direct contact by Klockner INA’s former CEO, support a finding that Klockner INA and Klockner & Co. are subject to the general jurisdiction of Texas courts. However, because we have determined that the Texas contacts of Klockner Industrial and UAT cannot be imputed to Klockner INA and Klockner & Co. for jurisdictional purposes, the issue is narrowed to whether Klockner INA’s single contact with Texas by Klockner INA’s former CEO is sufficient to support general jurisdiction.

Applying the guidelines for analyzing general jurisdiction, we conclude that this single Texas contact is not the kind of continuous and systematic general business activity that is necessary to justify the assertion of general jurisdiction. See Helicopteros, 466 U.S. at 416, 104 S.Ct. 1868 (concluding that a single business trip to Texas for the purpose of negotiating a contract could not be regarded as a contact of a continuous and systematic nature). Accordingly, we find there is no basis for the assertion of general jurisdiction over the Klockner defendants and overrule appellants’ third issue.

VIII. Conclusion

We hold that because appellants failed to present the “single business enterprise” theory to the trial court, they have waived their contention that the German entities operate as a single business enterprise. We further hold that there is some evidence to support the trial court’s implied finding that Klockner Industrial is not the agent of Klockner INA, and that this finding is not against the great weight and preponderance of the evidence. Accordingly, we conclude that the Texas contacts of Klockner Industrial and UAT cannot be imputed to the Klockner defendants under either a single business enterprise theory or an agency theory.

Having concluded that the Texas contacts of Klockner Industrial and UAT cannot be imputed to the Klockner defendants, the only relevant Texas contact for jurisdictional purposes is thé single visit to Texas by Klockner INA’s former CEO. We hold that this single contact is insufficient to support general jurisdiction over the Klockner defendants. Accordingly, we affirm the trial court’s judgment granting the special appearances of the Klockner defendants.

      . Klockner INA was owned 100% by Klock-ner & Co. until 1996, when Klockner & Co. sold 75% of Klockner INA to NUKEM Group. NUKEM Group subsequently purchased the remaining 25% of Klockner INA in 1998.

      . The record further contains a memo and a fax sent from Brosig to Gunther Hering regarding Haliburton Co.’s interest in funding certain transactions. , However, we find no evidence that these documents were written for or sent to Haliburton Co. in Texas.

      . Brosig testified that Klóckner Industrial sought to work on the Bolivian project with Brown & Root after the plans to work on the project with Hudson Engineering did not come to fruition.

      . Air Sea and Panalpina Gabon are both subsidiaries of Panalpina World Transport, Inc.

      . Having concluded that the evidence fails to establish that the Klockner defendants had minimum contacts with Texas, we do not reach appellants’ fourth issue addressing the “fair play and substantial justice” prong of the personal jurisdiction analysis. See Guardian Royal, 815 S.W.2d at 228 (“Once it has been determined that the nonresident defendant purposefully established minimum contacts with the forum state, the contacts are evaluated in light of other factors to determine whether the assertion of personal jurisdiction comports with fair play and substantial justice.").


source: Caselaw Access Project

author: TERRY McCALL, Justice.

license: Public Domain

text:
    Theda SPURGEON, Appellant, v. COAN & ELLIOTT, Attorneys at Law, Appellee.
    No. 11-04-00050-CV.
    Court of Appeals of Texas, Eastland.
    Aug. 31, 2005.

      Matthew E. Ritchie, Asbury & Asbury, L.L.P., Abilene, William K Clary, William K. Clary, P.C., Bridgeport, for appellant.
    Wayne S. Weaver, Stephenville, for ap-pellee.
    Panel consists of: WRIGHT, J., and McCALL, J.

      . W.G. Arnot, III, Chief Justice, retired effective July 31, 2005. The chief justice position is vacant.

   Opinion

TERRY McCALL, Justice.

Coan & Elliott, Attorneys at Law, (C & E) obtained a jury verdict in its suit against Theda Spurgeon for unpaid attorney’s fees and legal expenses that had been charged to Spurgeon by Coan & Elliott, L.L.P., (C & E LLP) in connection with an earlier lawsuit involving real estate. C & E alleged that it was the successor in interest to C & E LLP. In four issues, Spurgeon asserts that (1) C & E had no standing to sue; (2) the trial court erred in granting C & E a partial summary judgment on the ground that C & E LLP had no duty to pursue Spurgeon’s alleged claim against Alamo Title Insurance of Texas; (3) the trial court also erred in granting the partial summary judgment on the ground that Spurgeon could not demonstrate any damage because of C & E LLP’s failure to pursue her claim against Alamo; and (4) the trial court erred in admitting the initial judgment from the underlying real estate litigation into evidence. We affirm.

Spurgeon had retained C & E LLP to defend her in a suit brought by her brother, Bennie C. Hanson. Hanson claimed that a deed he had given Spurgeon had been intended to be a mortgage to secure repayment of a note that he owed Spur-geon. Spurgeon claimed that the deed represented a conveyance of the property. C & E LLP successfully obtained a judgment in favor of Spurgeon which also awarded attorney’s fees to Spurgeon in the sum of $27,000. Hanson appealed the case to the Tenth Court of Appeals in Waco. On appeal, a different attorney represented Spurgeon. The Tenth Court of Appeals abated the case and ordered mediation. Hanson and Spurgeon settled the case, but the judgment based on the settlement ordered that each party pay his or her own attorney’s fees.

In its petition in this lawsuit, C & E alleged that Spurgeon still owed $11,000 in attorney’s fees and expenses. Spurgeon’s answer asserted various affirmative defenses based, in part, on an allegation that C & E (not C & E LLP) had breached its contract for legal services with her by failing to pursue a claim against Alamo after Alamo had denied coverage and refused to defend Spurgeon against her brother’s lawsuit. Spurgeon also filed a counterclaim, asserting that C & E (not C & E LLP) had breached its contractual and fiduciary duties by failing to pursue the alleged claim against Alamo. Spur-geon’s answer implicitly assumed that C & E was the successor in interest to C & E LLP. She did not challenge C & E’s right to sue. After the trial court entered a partial summary judgment that C & E had no duty to pursue a claim against Alamo, C <& E obtained a jury verdict for the unpaid attorney’s fees and expenses.

Standing vs. Capacity

Spurgeon filed a motion for judgment n.o.v. on the ground that C & E had no standing because there was no evidence that C & E had an interest in the claim of C & E LLP. This was the first time that Spurgeon raised the issue of standing. After the trial court denied the motion for judgment n.o.v., Spurgeon filed a motion for new trial on the ground that there was no evidence that C & E LLP had assigned its claim to C & E or that C & E had any interest in the claim. The trial court denied Spurgeon’s motion for new trial.

A plaintiff must have both standing and capacity to bring a lawsuit. Austin Nursing Center, Inc. v. Lovato, No. 03-0659, 171 S.W.3d 845, 2005 WL 1124764 (Tex.2005). As the supreme court in Lo-vato explained:

The issue of standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a “justicia-ble interest” in its outcome, whereas the issue of capacity “is conceived of as a procedural issue dealing with the personal qualifications of a party to litigate.” 6A Charles Alan Wright, Arthur R. Miller, and Mary Kay Kane, Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 1559, at 441 (2d ed.1990). (Emphasis added)

Although Spurgeon raised the matter of standing in the trial court, standing is a component of subject matter jurisdiction that can be raised for the first time on appeal. Texas Association of Business v. Texas Air Control Board, 852 S.W.2d 440, 445-46 (Tex.1993); Pan American Life Insurance Company v. Erbauer Construction Company, 805 S.W.2d 395, 396 (Tex.1991). Whether the trial court had subject matter jurisdiction is a question of law subject to de novo review. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998). A plaintiff has standing to sue when he or she is personally aggrieved by the alleged wrong, regardless of whether the plaintiff is acting with legal authority. Nootsie, Ltd. v. Williamson County Appraisal District, 925 S.W.2d 659, 661 (Tex.1996). A party has capacity when that party has the legal authority to act, regardless of whether the party has a justiciable interest in the controversy. Nootsie, Ltd. v. Williamson County Appraisal District, supra.

Because James J. Elliott and Richard D. Coan both worked on Spur-geon’s earlier case, each had a justiciable interest in their fees and could have sued Spurgeon as a partner of C & E LLP. The matter is one of capacity, rather than standing. Capacity must be challenged by a verified pleading or it is waived. TEX. R.CIV.P. 93; see Pledger v. Schoellkopf, 762 S.W.2d 145, 145-46 (Tex.1988) (contention that corporation rather than plaintiff shareholder owned fraud and tortious interference claims challenged capacity to sue and was waived); Southwest Industries Investment Company, Inc. v. Berkeley House Investors, 695 S.W.2d 615, 617 (Tex.App.-Dallas 1985, writ ref'd n.r.e.).

Although not published, the case of Stephenson v. Lynch, No. 05-99-01874-CV, 2001 WL 126403 (Tex.App.-Dallas, Feb. 15, 2001, pet’n den’d), had similar facts. On appeal, Stephenson challenged Lynch’s standing to bring a suit for attorney’s fees because the evidence at trial established that the debt Stephenson owed was owed to Lynch & Calvert, P.C., a professional corporation. There was no evidence explaining the relationship between Lynch, who was suing individually, and Lynch & Calvert, P.C. Stephenson also argued that there was no evidence of an essential element of Lynch’s breach of contract claim because there was no evidence that Lynch individually owned the claim. Just as Spurgeon in our case does not argue that Coan and Elliott had no interest in payment for the legal work that they performed for her, the Dallas Court pointed out that Stephenson did not argue that Lynch had no interest in payment for the legal work he performed for Stephenson. Stephenson complained of Lynch’s authority rather than his justiciable interest. Citing Pledger v. Schoellkopf the court held that Stephenson had waived his argument by fading to comply with Rule 93.

We hold that Spurgeon waived her argument by failing to comply with Rule 93. Spurgeon’s first issue is overruled.

The Alleged Claim Against Alamo

Spurgeon alleged claims of breach of fiduciary duty, breach of contract, and fraud against C & E. Her claims arose, in part, from C & E’s alleged failure to pursue a claim against Alamo, her title insurance company, for a defense of the underlying suit. The trial court granted a partial summary judgment in favor of C & E on Spurgeon’s claims to the extent the claims related to the alleged failure to pursue a claim against Alamo. The trial court determined that Alamo did not have a duty to defend Spurgeon in the underlying suit and that, therefore, C & E did not have a duty to pursue a claim against Alamo. In her second issue, Spurgeon argues that the trial court erred in granting the partial summary judgment.

Spurgeon requested Alamo to provide her a defense in the underlying suit. However, Alamo believed that Spurgeon’s policy excluded Hanson’s allegations from coverage and, therefore, denied Spur-geon’s request for a defense.

The duty to defend and the duty to indemnify by an insurer involve different principles. Trinity Universal Insurance Company v. Cowan, 945 S.W.2d 819, 821-22 (Tex.1997). An insurance company owes no duty to defend unless the petition in the underlying suit contains allegations of fact which fall within the scope of coverage provided for in the policy of insurance. National Union Fire Insurance Company of Pittsburgh, PA v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex.1997).

Courts apply the “eight corners rule,” also known as the “complaint allegation rule,” in determining whether a duty to defend exists. King v. Dallas Fire Insurance Company, 85 S.W.3d 185, 187 (Tex.2002); Trinity Universal Insurance Company v. Cowan, supra. Under the “eight corners rule,” we look solely at the pleadings and the insurance policy to determine whether the petition contains allegations which come within the scope of coverage. King v. Dallas Fire Insurance Company, supra. We consider the allegations in the petition in light of the policy terms without considering either the truth or falsity of the allegations or what the parties know or believe the true facts to be. Heyden Newport Chemical Corporation v. Southern General Insurance Company, 387 S.W.2d 22, 24 (Tex.1965). The same is true even if there has already been a judicial determination of the facts. Heyden Newport Chemical Corporation v. Southern General Insurance Company, supra. We will not look outside the pleadings and the policy of insurance in our assessment of whether there is a duty to defend. National Union Fire Insurance Company of Pittsburgh, PA v. Merchants Fast Motor Lines, Inc., supra. If a petition does not allege facts that fall within the scope of coverage, an insurer is not required to defend a suit against.its insured. American Physicians Insurance Exchange v. Garcia, 876 S.W.2d 842, 848 (Tex.1994). If a petition only alleges facts excluded by the policy, the insurer is not required to defend its insured. Fidelity & Guaranty Insurance Underwriters, Inc. v. McManus, 633 S.W.2d 787, 788 (Tex.1982).

In the underlying suit, Hanson sought to set aside a deed of real property to Spur-geon. Hanson alleged that, on or about November 30, 1993, he executed and delivered to Spurgeon a warranty deed conveying his homestead property to Spurgeon. On its face, the deed was an absolute deed of the property. However, Hanson alleged that he had borrowed money from Spur-geon and that the deed was in reality a mortgage to secure the payment of the loan. Hanson stated in his petition that “[t]he deed ... was intended as a mortgage to secure [his] payment of the Note of November 30, 1993, to [Spurgeon].” Hanson further alleged that the deed was void because it constituted a mortgage of his homestead property. Hanson requested the court to cancel the deed on the ground that it was void. Thus, Hanson’s claim depended on his alleged agreement with Spurgeon that the deed was in reality a mortgage, instead of an absolute deed of the property.

Spurgeon’s policy required Alamo to “provide for the defense of an insured in litigation in which any third party asserts a claim adverse to the title or interest as insured.” C & E relied on two policy exclusions in arguing that Alamo did not have a duty to defend Spurgeon in the underlying suit. The policy provided in part as follows:

The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys’ fees or expenses that arise by reason of:
3. Defects, liens, encumbrances, adverse claims or other matters:
(a) created, suffered, assumed or agreed to by the insured claimant;
(b) not known to the Company, not recorded in the public records at Date of Policy, but known to the insured claimant and not disclosed in writing to the Company by the insured claimant prior to the date the insured claimant became an insured under this policy.

If Hanson’s allegations in the underlying suit fell within either of the above policy exclusions, Alamo did not have a duty to defend Spurgeon in the suit. Fidelity & Guaranty Insurance Underwriters, Inc. v. McManus, supra at 788. Hanson’s claim to the property was based on an alleged agreement he had with Spur-geon that the deed was in reality a mortgage. Hanson’s allegations fell within both of the above exclusions because (1) his adverse claim to the property was allegedly agreed to by the insured (Spur-geon) and (2) the alleged agreement was not known to Alamo.

In her counterclaim, Spurgeon denied that she and Hanson agreed the deed was actually a mortgage. Spurgeon asserted that, because there was no such agreement, Hanson’s claim did not fall within the policy exclusions. Spurgeon’s assertion begged the question. The issue of Alamo’s duty to defend did not depend upon whether an agreement actually existed. Rather, the issue depended upon a consideration of Hanson’s allegations in light of the policy terms without considering either the truth or falsity of the allegations. Heyden Newport Chemical Corporation v. Southern General Insurance Company, supra at 24. Because Hanson alleged that an agreement existed, his allegations fell within the above policy exclusions. Alamo did not have a duty to defend Spurgeon in the underlying suit. Therefore, the trial court did not err in granting partial summary judgment to C & E. Spurgeon’s second issue is overruled.

Because the trial court correctly based its ruling that C & E had no duty to pursue a claim against Alamo on the “eight corners rule,” we need not address Spur-geon’s third issue.

Evidence of the Earlier Judgment

When C & E introduced a copy of the trial court’s judgment awarding $27,000 in attorney’s fees to Spurgeon, Spurgeon objected only on the basis that the judgment was not a final judgment and had been changed by the Waco Court of Appeals. The trial court admitted the judgment for the limited purpose of allowing the jury to see what had happened in the trial court in the Hanson litigation. During the trial, C & E made it clear to the jury that the earlier judgment had not been a final judgment. Spurgeon also made it clear to the jury that the judgment had been changed on appeal. Even if the trial court erroneously admitted the evidence of the earlier judgment, Spurgeon must also show that the error was calculated to cause and probably did cause the rendition of an improper judgment. TEX. R.APP.P. 44.1; McCraw v. Maris, 828 S.W.2d 756, 758 (Tex.1992). Spurgeon has not demonstrated how the trial court’s admission of the evidence harmed her. Spurgeon’s fourth issue is overruled.

This Court’s Ruling

The judgment of the trial court is affirmed.


author: PER CURIAM.

text:
    Charlie CANNON d/b/a Charlie Cannon Contracting, Appellant, v. The CITY OF HURST, Texas, Appellee.
    No. 2-04-049-CV.
    Court of Appeals of Texas, Fort Worth.
    Sept. 22, 2005.
    Charlie Cannon, Arlington, pro se.
    Harrison, Steck, Hoover & Drake, P.C., Stephen D. Harrison, Fort Worth, for ap-pellee.
   ORDER

PER CURIAM.

Currently pending before this court is appellant’s August 24, 2005 “Motion to Re-cuse Justices” that comprise the newly appointed panel in the above-referenced cause' — Justices Terrie Livingston, Sue Walker, and Robert McCoy — under Texas Rule of Civil Procedure 18b(2).

Appellant’s motion appears to challenge the impartiality of the justices comprising the newly formed panel under rule 18b(2) that requires a judge to recuse himself or herself in any proceeding in which the judge’s impartiality might reasonably be questioned. Tex.R. Civ. P. 18b(2). Appellant points primarily to the “close working relationship of the new and old panels” as well as the “magnitude of bias” that the new panel might subject appellant to.

Rule 16 of the Texas Rules of Appellate Procedure states that the grounds for re-cusal are the “same as those provided in the Rules of Civil Procedure.” Tex.R.App. P. 16.2; see also Tex.R. Civ. P. 18a, 18b. Rule 18b(2) of the Texas Rules of Civil Procedure identifies the grounds for recu-sal. Tex.R. Civ. P. 18b(2); McCullough v. Kitzman, 50 S.W.3d 87, 88 (Tex.App.-Waco 2001, pet. denied) (order). It provides that a judge shall recuse himself or herself in a proceeding in which the judge’s impartiality might reasonably be questioned, as asserted by appellant here. Tex.R. Civ. P. 18b(2)(a).

Rule 16.3 of the Texas Rules of Appellate Procedure prescribes the procedure to be followed for recusal of an appellate justice or judge:

Before any further proceeding in the case, the challenged justice or judge must either remove himself or herself from all participation in the case or certify the matter to the entire court, which will decide the motion by a majority of the remaining judges sitting en banc. The challenged justice or judge must not sit with the remainder of the court to consider the motion as to him or her.

Tex.R.App. P. 16.3(b).

Pursuant to the procedure set forth in rule 16.3(b), upon the filing of the recusal motion and prior to any further proceedings in this appeal, each of the challenged justices of this court considered the motion in chambers. Id. Justices Terrie Livingston, Sue Walker, and Robert McCoy each found no reason to recuse themselves and certified the matter in writing to the remaining members of the court en banc. See id.; McCullough, 50 S.W.3d at 88. This court then followed the accepted procedure set out in rule 16.3(b). Tex.R.App. P. 16.3(b); Manges v. Guerra, 673 S.W.2d 180, 185 (Tex.1984); McCullough, 50 S.W.3d at 88. The three remaining justices met to deliberate and decide the motion to recuse with respect to each challenged justice by a vote of the remaining justices en banc. No challenged justice sat with the other members of the court when his or her challenge was considered. See Tex.R.App. P. 16.3(b); McCullough, 50 S.W.3d at 88. Each recusal was considered on a case-by-case fact-intensive basis. See McCullough, 50 S.W.3d at 89; Williams v. Viswanathan, 65 S.W.3d 685, 688 (Tex.App.-Amarillo 2001, no pet.) (order).

Having carefully examined the pleadings and the record as to the allegations pertaining to each challenged justice, and finding the allegations to be unsubstantiated, each motion to recuse is denied with respect to each challenged justice. The court enters the following orders:

ORDER DENYING MOTION AS TO JUSTICE LIVINGSTON

This court, Justice Livingston not participating, finds no reason to recuse Justice Livingston. See Tex.R.App. P. 16.2; Tex.R. Civ. P. 18b(2). Accordingly, appellant’s motion to recuse Justice Livingston is denied.

CAYCE, C.J.; DAUPHINOT and GARDNER, JJ., recused.

LIVINGSTON, J., not participating.

ORDER DENYING MOTION AS TO JUSTICE WALKER

This court, Justice Walker not participating, finds no reason to recuse Justice Walker. See Tex.R.App. P. 16.2; Tex.R. Crv. P. 18b(2). Accordingly, appellant’s motion to recuse Justice Walker is denied.

CAYCE, C.J.; DAUPHINOT and GARDNER, JJ., recused.

WALKER, J., not participating.

ORDER DENYING MOTION AS TO JUSTICE McCOY

This court, Justice McCoy not participating, finds no reason to recuse Justice McCoy. See Tex.R.App. P. 16.2; Tex.R. Civ. P. 18b(2). Accordingly, appellant’s motion to recuse Justice McCoy is denied.

CAYCE, C.J.; DAUPHINOT and GARDNER, JJ., recused.

McCOY, J., not participating.

      . Chief Justice John Cayce and Justices LeeAnn Dauphinot and Anne Gardner have voluntarily recused themselves in this matter.


author: JOHN G. HILL, Justice

text:
    In the ESTATE OF Jacqueline Elizabeth GRIMM, Deceased.
    No. 11-04-00243-CV.
    Court of Appeals of Texas, Eastland.
    Sept. 29, 2005.

      Charles C. Self, III, Whitten & Young, Abilene, for appellant.
    John R. Saringer, Wagstaff, Alvis, Stub-beman, Seamster & Longacre, Abilene, for appellee.
    Panel consists of WRIGHT, J., and McCALL, J., and HILL, J.

      . John G. Hill, Former Chief Justice, Court of Appeals, 2nd District of Texas at Fort Worth sitting by assignment.

   Opinion

JOHN G. HILL, Justice

(Assigned).

Theda Carpenter and Jack George Grimm appeal from a summary judgment granting motions for summary judgment filed by Shari Spencer, Phyllis Sue Thomas, and Stephanie Savage, the appellees. In a single point, the appellants urge that the trial court erred in granting the appel-lees’ motions for summary judgment because genuine issues of material fact exist that prevent the granting of those motions. We reverse and remand.

In ruling on the motions for summary judgment, the trial court set aside its order admitting to probate a 1990 will of Jacqueline Elizabeth Grimm, which Carpenter had sought to probate, and admitted to probate a 1999 will, together with its 2001 codicil, all as sought by Spencer. Carpenter and Jack Grimm are the surviving children of the deceased and beneficiaries of the 1990 will. Spencer and Savage are nieces of the deceased, while Thomas was a housekeeper for the deceased. Spencer, Savage, and Thomas are all beneficiaries of the 1999 will and 2001 codicil. After the appellees had filed their application to set aside the order probating the 1990 will, the appellants filed their answer, alleging lack of testamentary capacity on the part of the deceased and undue influence exerted by the appellees. After the appellants filed their answer, the appellees filed, in connection with their motion to set aside the probate of the 1990 will, a traditional motion for summary judgment asserting that there was no material issue of fact on the issue of testamentary capacity and a no-evidence motion for summary judgment with respect to the issue of undue influence. In their response to the appellees’ motions for summary judgment, the appellants sought to show that there was a material issue of fact on the issue of the deceased’s testamentary capacity and to present summary judgment evidence of undue influence exerted by the appellees.

We will first consider the appellants’ argument relating to the appellees’ motion for traditional summary judgment in which the appellees assert that there is no material issue of fact with respect to the deceased’s testamentary capacity to make the 1999 will and 2001 codicil. As mov-ants, the appellees had the burden of showing that there is no genuine material fact issue and that they are entitled to judgment as a matter of law. Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 121 (Tex.1996). When reviewing a summary judgment, we take as true all evidence favorable to the non movant, and we indulge every reasonable inference and resolve any doubts in the nonmovant’s favor. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex.2004). Evidence that favors the movant’s position will not be considered unless it is uncontroverted. Great American Reserve Insurance Company v. San Antonio Plumbing Supply Company, 391 S.W.2d 41, 47 (Tex.1965). The summary judgment will be affirmed only if the record establishes that the mov-ant has conclusively proved all essential elements of the movant’s cause of action or defense as a matter of law. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999); City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex.1979).

The testatrix executed her will on March 26, 1999, and subsequently executed a codicil on January 26, 2001. “Testamentary capacity” means possession of sufficient mental ability at the time of execution of the will (1) to understand the business in which the testatrix is engaged, the effect of making the will, and the general nature and extent of her property; (2) to know the testatrix’s next of kin and the natural objects of her bounty; and (3) to have sufficient memory to assimilate the elements of the business to be transacted, to hold those elements long enough to perceive their obvious relation to each other, and to form a reasonable judgment as to them. Guthrie v. Suiter, 934 S.W.2d 820, 829 (Tex.App.-Houston [1st Dist.] 1996, no writ). The question of testamentary capacity is ordinarily one of fact for the jury. Payne v. Chance, 4 S.W.2d 328, 329 (Tex.Civ.App.-Amarillo 1928, no writ).

Appellants’ summary judgment evidence consists of affidavits executed by Theda Carpenter and her husband, Doug Carpenter. In her affidavit, Theda discussed her mother’s long-term drinking problem. She said that, over the period of her drinking, her mother had a noticeable decline in cognitive thinking and a loss of short-term memory, exhibited by the inability to recall names, places, and/or events in periods of inebriation or abstinence. She also indicated that the long-term drinking impacted her mother’s ability to function effectively and to exhibit good decision skills in that, among other things, she had no awareness of how her household bills were being paid, no reality in regard to finances, and constant and continued delusional/paranoid thinking. She indicated that her mother had been diagnosed with dementia related to alcoholism. She referred to several instances of confusion, at least one occurring in 1998. She stated that her mother’s alcohol intake continued to make her mother significantly confused. She insisted that her mother’s short-term memory loss continued to be exhibited even during periods of abstinence. She gave examples of her mother thinking that items taken from the home for legitimate reasons had instead been stolen. She stated that in the summer of 1998 her mother was in a constant state of paranoid/delusional thinking. She insisted that her mother’s short-term memory loss only got worse from just before the will was executed until she died. The affidavit of Theda’s husband, Doug, repeated evidence of his mother-in-law’s drinking problems and stated that the testatrix had very little short-term memory in the early 1990s. He stated that her short-term and long-term memory worsened by the mid-1990s. He also affirmed the truthfulness of his wife’s affidavit. The appellees presented summary judgment evidence to the effect that the testatrix had testamentary capacity at the time she executed the 1999 will and 2001 codicil. We hold that the summary judgment evidence showing chronic impairment of cognitive mental abilities and delusional thinking on the part of the testatrix, both before and after the making of the will and codicil, shows that there is a material fact issue with respect to the testatrix’s testamentary capacity. See Guthrie v. Suiter, supra at 830-31.

The appellees object to both affidavits as being conclusory. As examples of conclu-sory statements relating to testamentary capacity, they set forth the following: (1) “[t]here was no significant time span of sobriety with one exception for a short period of time in 1998”; (2) “[d]uring the last 15-20 years or more, Mother has self-isolated to her home with no social interaction except weekly visits to the beauty shop”; (3) “[a]s her physical health improved, her agitation increased significantly”; (4) “Mother has been told at least 300 times that this chair is in the shop for repair”; and (5) “[h]er short term memory loss only got worse from then [March 24, 1999] until she died.” We have considered all of these and find that they are statements of fact and not conclusory. We hold that there is sufficient non-conclusory summary judgment evidence to show that there is a material fact issue with respect to the testatrix’s testamentary capacity. We disagree with the appellees’ conclusion that such evidence creates merely a suspicion that the testatrix lacked testamentary capacity.

The appellees contend that the evidence is insufficient to raise a material fact issue with respect to testamentary capacity because it merely shows chronic alcoholism and dementia. They rely on the cases of Payne v. Chance, supra, and an unpublished case, In re Estate of Hall, No. 05-98-01929-CV, 2001 WL 753795, at *4 (Tex. App.-Dallas July 5, 2001, no pet’n). We find both cases to be distinguishable. In Payne, evidence showed that the testator, a heavy drinker, when not in a drunken condition, was a man more than above average in intelligence and above average in mentality. Payne v. Chance, supra at 331. The evidence also showed that the testator did not attempt to conduct his business affairs when he was intoxicated. Id. at 330. There was no credible evidence showing that the testator was intoxicated at the time he executed the will. Id. In this case, Theda’s affidavit shows that, in addition to alcoholism, the testatrix had cognitive deficits or dementia both before and after the execution of the 1999 will and 2001 codicil, to the extent that a reasonable person could conclude that she would not have had testamentary capacity at the time she executed them.

In Hall, the testatrix made the will after being diagnosed with Alzheimer’s disease in 1991. There was evidence that her physical and mental condition worsened in the years following. A witness testified that she did not understand the effect of her act in making a will after 1991, that she did not know her material possessions, and that she did not have the lucidity of mind to understand the elements of business transacted in the execution of the will. The court held that the affidavit was con-clusory because it did not state facts showing how the testatrix’s conduct, interactions, and living conditions changed so as to demonstrate her “irreversible” and “worsened” condition between her diagnosis and making of the will. Further, the witness’s affidavit did not demonstrate the effects of the testatrix’s impairment. In the ease at bar, however, Theda’s affidavit cites examples of her mother’s impairment from the time of her being diagnosed until her death.

The appellees also contend that the affidavits are insufficient because they do not show the testatrix’s lack of testamentary capacity on the day of the execution of the will and codicil. In a will contest on the ground of testamentary incapacity, the issue is the condition of the testatrix’s mind on the date the will was executed. Guthrie v. Suiter, supra at 830. Evidence of incompetency at other times can be used to establish incompetency on the date the will was executed if it demonstrates that the condition persists and has some probability of being the same condition that existed at the time of the will’s making. Croucher v. Croucher, 660 S.W.2d 55, 57 (Tex.1983); Guthrie v. Suiter, supra at 830. The evidence shows that the testatrix had diminished capacity both before and after the execution of the will and codicil and that the condition persisted for a long period of time, including periods of abstinence. Consequently, as previously noted, the evidence- raises a material fact issue as to her testamentary capacity.

We next consider the appellants’ claim that the trial court erred in granting the no-evidence motion for summary judgment with respect to the issue of undue influence. A no-evidence summary judgment is essentially a pretrial directed verdict, and we apply the same legal sufficiency standard in reviewing such a summary judgment as we apply in reviewing a directed verdict. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex.2003). Therefore, in considering a no-evidence motion for summary judgment, we review the evidence in the light most favorable to the nonmovant, disregarding all contrary evidence and inferences. Id. at 751. A no-evidence point will be sustained when (a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact. Id. Therefore, a no-evidence summary judgment is improperly granted if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Id. Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. Id. More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Id.

The only summary judgment evidence offered by the appellants in support of their claim of undue influence is contained in Theda’s affidavit and reads as follows:

Sue Thomas was later rehired as a sitter for my mother by court appointed attorney, Forrest McCray. She took over all activities in the home, including the continued purchasing of vodka for my mother. She further was added to her checking account and paid bills of my mother signing checks in my mother’s name on some occasions. I have personally seen checks paid which bore the signature of Sue Thomas on my Mother’s account. Sue Thomas isolated my mother in her home and handled all her functions at the time of the will and codicil in question. She made all decisions for her. Sue Thomas had such control over my mother that overpowered the mind of my mother at the time of executing the will and codicil in question and my mother would not have executed them otherwise.

As previously noted, Theda’s husband, Doug, in his affidavit, affirmed the statements made by Theda in her affidavit. As we analyze this affidavit, it merely shows that, as her mother’s caregiver, Sue Thomas had the opportunity to exert undue influence. While it suggests that Thomas isolated the testatrix in her home, Theda previously stated in her affidavit that, “Mother has self-isolated to her home.” Theda’s assertion that “Sue Thomas had such control over [her] mother that overpowered the mind of [her] mother at the time of executing the will and codicil in question and [her] mother would not have executed them otherwise” is conclusory. Consequently, the evidence is insufficient to present a material fact issue so as to defeat a no-evidence motion for summary judgment with respect to the issue of undue influence. In re Estate of Butts, 102 S.W.3d 801, 803 (Tex.App.-Beaumont 2003, pet’n den’d); Guthrie v. Suiter, supra at 832. Accordingly, we sustain the appellants’ point on appeal with respect to the traditional motion for summary judgment on the issue of testamentary capacity, and we overrule the appellants’ point on appeal with respect to the no-evidence motion for summary judgment on the issue of undue influence.

We reverse the judgment and remand the cause to the trial court for further proceedings in accordance with this opinion.