Carey v. State

In Carey v. State, No. 04-09-00809-CV, 2010 WL 2838631 (Tex. App.--San Antonio July 21, 2010, pet. denied), the trial court denied special appearances filed by James Edward Carey III and Gwendolyn Faye Carey, who were not residents of Texas but were the sole officers, managers, and members of two companies operating in Texas. The companies sold travel-related software licenses to Texas consumers for three years. Id. The State of Texas sued the Careys for various torts, alleging they "fraudulently obtained millions of dollars from Texas consumers through misrepresentations in the advertising and sale of travel-related software licenses." Id. With respect to James, the evidence showed he made two trips to Texas to arrange for the companies' offices. He also visited the offices once or twice a year to meet with staff regarding basic product training and reviewed "scripts" for the employees to use. Id. He also responded to complaints by Texas consumers and signed personal guarantees and contracts for the businesses. Id. Gwendolyn accompanied James on his trips to Texas, was aware of the complaints by the Texas consumers, and also signed guaranteed obligations and loans for the businesses. Both James and Gwendolyn received proceeds from selling the retail installment contracts the companies obtained from the Texas consumers to third-party finance companies. The Court held the Careys' "participation in the companies' businesses, which was aimed to extract profits from Texas consumers, supports specific jurisdiction with regard to each of the Careys."