HOUSTON -- A special appearance for a New York resident in a Texas court was affirmed Oct. 22 in the First District of Texas Court of Appeals during a dispute over an investment into the prepaid-phone industry.
The appeals court affirmed the special appearance for Carlos Gomez of New York, in his case with Lloyd R. Cunningham, a trustee for Cunningham Interests II Ltd.
Justice Sarah Beth Landau wrote the opinion . Justices Russell Lloyd and Gordon Goodman concurred.
“The trial court, as factfinder, had sufficient evidence and discretion to accept one version of events and reject the other, Landau rules. "We will not substitute our judgment for the trial court’s on issues of evidentiary weight or factfinding.”
Although both sides showed completely different versions of what possibly happened, there was enough evidence to back the lower court’s choice to grant Gomez special appearance. In his affidavit, Gomez said he never went to a business meeting in Houston to talk about investing into a company, Unlimited Recharge Inc., or Cunningham’s trust investing $1.3 million in the company. Gomez also denied that he had ownership of Unlimited and that he said he had personally pay back the $1.3 million.
Considering a second person, Johnny Rodriguez, who was at the Houston meeting in question, matched Gomez’s affidavit, the lower court took that into account. The appeals court pointed to an unsigned copy of a convertible loan. There was a generic signature for Unlimited instead of an actual name, the complaint states, so the person who signed it iis not listed. Considering this, the court ruled, Cunningham did not show any proof that Gomez was actually at the Houston meeting, and that he agreed to allow Cunningham to loan Unlimited $1.3 million, and that he said he’d pay back the loan if Cunningham demanded.
“The trial court had sufficient evidence to support its implied findings in Gomez’s favor," Landau wrote. "While there was evidence from which a contrary conclusion could have been reached, we cannot conclude the trial court’s ruling was against the great weight and preponderance of the evidence so as to be manifestly erroneous or unjust.”
The legal action started after Cunningham expressed interest in serving as an investor for the prepaid-calling-card market. He met with people connected to Unlimited, a business known for its international long-distance services. Cunningham said he sat down with Gomez and Johnny Rodriguez in Houston in 2011 as the trio talked investing in Unlimited.
While there, Cunningham said Gomez said he was a majority owner and Rodriguez said he was a minority owner of Unlimited. Cunningham claimed he agreed to loan unlimited $1 million with a right to convert the loan principal to 10% equity in Unlimited. He said he and Rodriguez signed on to a convertible note in November 2011 as it relates to the loan.
He said Gomez vowed to repay the loan if Cunningham would ask him to do so in the future. Cunningham went on to loan $300,000 more to Unlimited via the terms of the 2011 convertible note, with the same guarantee as the first loan (that Gomez would pay back the loan personally if Cunningham asked).
Unfortunately, the calling-card deal was not as great as they hoped, and Cunningham asked for the $1.3 million loan to get repaid. And Gomez allegedly failed to do so. Cunningham then sued Unlimited and Gomez for breach of contract, and Gomez for fraud.
Gomez filed a special appearance and challenged Cunningham’s account of what happened. Most important, he shut down the allegation that he had ownership interest in Unlimited and denied even meeting with Cunningham in Texas to talk about the loan. He also said he never confirmed he’d pay the $1.3 million debt. He did say he met with Cunningham in Houston one time but said that meeting was about something completely unrelated, buying a boat. Gomez said specific jurisdiction wasn’t present on such a small contact with the state that wasn’t even connected to the lawsuit.
Gomez subsequently submitted an affidavit from Rodriguez, who said that he did meet with Cunningham but Gomez was not present. Instead, it was Gomez’s brother, Antonio Gomez, who was at the meeting and is the majority owner of Unlimited. Rodriguez said he didn’t know about Gomez ever going to Texas to discuss a loan.
Cunningham provided an affidavit from J. Brent Baker, who said he was at the meeting with Cunningham and Carlos where the men talked over Unlimited. Carlos also said he was a principal owner of Unlimited.
The trial court granted Gomez’s special appearance shortly afterward, leaning to Cunningham’s appeals.