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Schlobohm v. Schapiro

Supreme Court of Texas

February 14, 1990

No. C-8131

Opinion

 [*356]  This case presents us with a Pennsylvania defendant and the question whether a Texas court has the power to adjudicate a Texan's claims against him. The courts below found that the defendant's contacts with Texas were too minimal to allow the exercise of in personam jurisdiction. Because we hold that his contacts with Texas were continuing and systematic enough to permit the imposition of jurisdiction, we reverse the judgment of the court of appeals.

The Pennsylvania defendant is Rolf Schapiro ("Schapiro"). His son, Douglas, lives in Dallas. In July 1984, Schapiro invested $ 10,000 in a corporation named Hangers, Inc., which was formed by Douglas and his wife to establish a dry cleaning business in Dallas. Schapiro received stock in Hangers and became its sole director. Douglas became president. Although Schapiro did not participate in the incorporation,  [**2]  he conducted Hangers' first meeting in Dallas. Corporate records were kept by his attorney in Pittsburgh.

Hangers leased space for some of its outlets, and Schapiro guaranteed some of the leases. In late 1984, Charles and Joneen Schlobohm leased a building to Hangers. A sixty month lease was negotiated and signed by Douglas, as president. Schapiro did not participate in the negotiations, and he did not guarantee the lease.

In November, Schapiro loaned Hangers $ 30,000 of his personal funds to buy equipment to expand the business. He later visited Dallas and obtained financing for the rest of the plant, signing a promissory note in his individual capacity for $ 136,702.10. Schapiro owned the equipment and leased it to Hangers.

Schapiro's involvement in Hangers' plant expansion was not an unusual event in the history of his entanglement with Hangers. He frequently provided funds during start-up, expansion, and throughout Hangers' decline. Hangers' payroll and other expenses were continually covered by Schapiro's deposits. These sums, which were characterized as loans, totaled an estimated $ 474,000. Schapiro claimed that Douglas signed promissory notes for the loans, but the notes [**3]  are not in the record.

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784 S.W.2d 355 *; 1990 Tex. LEXIS 16 **; 33 Tex. Sup. J. 222

CHARLES H. SCHLOBOHM and JONEEN L. SCHLOBOHM, Petitioners, v. ROLF L. SCHAPIRO, INDIVIDUALLY AND d/b/a HANGERS DRY CLEANER AND LAUNDRY, ETC., Respondents

Prior History:   [**1]     FROM DALLAS COUNTY, FIFTH DISTRICT.

CORE TERMS

formula, minimum contact, contacts, fair play, lease, cause of action, systematic, exercise of jurisdiction, substantial justice, forum state, long-arm, due process, courts

Civil Procedure, In Rem & Personal Jurisdiction, In Personam Actions, General Overview, Constitutional Law, Fundamental Rights, Procedural Due Process, Jurisdiction, Jurisdictional Sources, Constitutional Limits, Statutory Sources, Minimum Contacts, Subject Matter Jurisdiction, Jurisdiction Over Actions