Nacho Remodeling Co.
v. Calsherm Partners, L.P.
Dallas Court of Appeals, No. 05-14-00048-CV (August 5, 2014)
Justices Moseley, Lang (Opinion), and Brown
Dallas Court of Appeals, No. 05-14-00048-CV (August 5, 2014)
Justices Moseley, Lang (Opinion), and Brown
Nacho performed repairs on an apartment complex in Sherman owned by Calsherm, a Texas limited partnership. When Calsherm didn’t pay, Nacho sued. In an amended petition, Nacho added the limited partners of Calsherm as defendants. Those limited partners, California residents all (hence, “Calsherm”), filed special appearances supported by affidavits demonstrating their lack of contacts individually with Texas. Nacho did not controvert those affidavits, but argued instead that their conduct in voluntarily forming a Texas limited partnership doing business in Texas was sufficient to support the exercise of personal jurisdiction. Adding one more brick to the wall of protection surrounding limited partners, the Dallas Court of Appeals rejected that argument. In Rogers v. TexWest, LLC, the Court had affirmed denial of a special appearance by a limited partner where the claims at issue dealt with the formation of a Texas limited partnership. But in Hotel Partners v. Craig, the Court found no personal jurisdiction over limited partners where claims arose from the conduct of a “foreign-registered limited partnership headquartered in Texas”; the Court reasoned that “a limited partner’s investment in the partnership was not an activity purposefully directed to Texas ‘because limited partners have no voice in management.’” Employing that same rationale, the Dallas Court extended its Hotel Partners decision to domestic limited partnerships, finding that, even where the limited partnership was formed under the laws of Texas and for the purpose of doing business here, in a lawsuit that focuses on the actions of the partnership rather than on its formation, “[t]he limited partners’ passive investments are not activities purposefully directed to Texas” sufficient to support the exercise of personal jurisdiction.
