1. Appeal and Error--appealability--denial of motion to dismiss
for lack of jurisdiction
The denial of a motion to dismiss for lack of jurisdiction
is immediately appealable.
2. Jurisdiction--personal--prima facie proof
The trial court erred by denying a motion to dismiss for
lack of personal jurisdiction over the nonresident defendant
where the complaint did not state the section of the long-arm
statute under which jurisdiction was obtained or allege facts as
to activity being conducted in North Carolina by defendant at the
time of service of process, and a review of the record and
complaint showed that plaintiff failed to meet his burden of
proving prima facie a statutory basis for personal jurisdiction.
N.C.G.S. § 1-75.4.
3. Pleadings--Rule 11 sanctions
The trial court did not err by denying a motion for Rule 11
sanctions for a complaint filed in North Carolina arising from an
automobile accident in Louisiana.
Kuehnert Bellas & Bellas, PLLC, by Eric R. Bellas, for
plaintiff-appellee.
Patton, Starnes, Thompson, Aycock, Teele & Ballew, P.A., by
Larry A. Ballew, for defendants-appellants.
WALKER, Judge.
Plaintiff, a North Carolina resident, filed an action against
Central Express, Inc. (defendant Central Express) and Dennis L.
Jenny (defendant Jenny) on 6 January 2000, alleging negligence onthe part of defendant Jenny resulting from an automobile accident.
In his complaint, plaintiff sought damages for personal injury and
property loss.
The accident occurred on 7 January 1998 around 7:08 p.m. in
the parking lot of a fuel station in Hammond, Louisiana. At the
time of the accident, plaintiff was sitting in the passenger side
of his vehicle, which was parked in a marked parking space.
Defendant Central Express' vehicle, which was being driven by its
employee, defendant Jenny, collided with the passenger side of
plaintiff's vehicle.
In his complaint, plaintiff alleged defendant Jenny was acting
within the course and scope of his employment at the time of the
accident. Plaintiff served defendant Jenny by certified mail but
did not obtain service on defendant Central Express.
On 14 February 2000, defendants filed a motion to dismiss the
action, alleging lack of jurisdiction under Rule 12(b)(2). N.C.
R. Civ. P. 12(b)(2)(1999). In their motion, defendants asserted
that defendant Central Express is a Missouri corporation, defendant
Jenny is a citizen and resident of Highland, Illinois, and the
accident giving rise to this action occurred in or near Hammond,
Louisiana. Defendants further moved for sanctions and costs
pursuant to Rule 11 of the North Carlina Rules of Civil Procedure
“for the defense of this action which has no basis in law or fact.”
N.C.R. Civ. P. 11 (1999). By order filed 3 March 2000, the trial
court denied defendants' motion to dismiss and for sanctions.
[1]In their assignment of error, defendants contend the trial
court erred in denying their motion to dismiss for lack ofjurisdiction pursuant to Rule 12(b)(2) because defendants have
insufficient contacts with this State and because defendant Central
Express was not served with process. N.C.R. Civ. P. 12(b)(2).
At the outset, we note “[t]he denial of a motion to dismiss
for lack of jurisdiction is immediately appealable” and not
interlocutory. Bruggeman v. Meditrust Acquisition Co., 138 N.C.
App. 612, 614, 532 S.E.2d 215, 217, cert. denied, 353 N.C. 261,
546 S.E.2d 90 (2000), citing N.C. Gen. Stat. § 1-277(b)(1999);
Teachy v. Coble Dairies, Inc., 306 N.C. 324, 293 S.E.2d 182 (1982).
Whether the courts of this State may exercise personal jurisdiction
over a nonresident defendant involves a two-prong analysis: “(1)
Does a statutory basis for personal jurisdiction exist, and (2) If
so, does the exercise of this jurisdiction violate constitutional
due process?” J.M. Thompson Co. v. Doral Mfg. Co., 72 N.C. App.
419, 424, 324 S.E.2d 909, 913, cert. denied, 313 N.C. 602, 330
S.E.2d 611 (1985). The assertion of personal jurisdiction over a
defendant comports with due process if defendant is found to have
sufficient minimum contacts with the forum state to confer
jurisdiction. Fungaroli v. Fungaroli, 51 N.C. App. 363, 276 S.E.2d
521, cert. denied, 303 N.C. 314, 281 S.E.2d 651 (1981).
[2]The statutory basis for asserting personal jurisdiction
pursuant to N.C. Gen. Stat. § 1-75.4 is referred to as the “long-
arm statute.” N.C. Gen. Stat. § 1-75.4 (1999); Godwin v. Walls,
118 N.C. App. 341, 346, 455 S.E.2d 473, 478, cert. granted, 341 N.
C. 419, 461 S.E.2d 757 (1995)(motion to withdraw petition fordiscretionary review granted 19 October 1995). Our long-arm
statute provides several methods by which personal jurisdiction may
be exercised over a defendant and includes in pertinent part:
(1) Local Presence or Status. -- In any
action, whether the claim arises within or
without this State, in which a claim is
asserted against a party who when service of
process is made upon such party:
N.C. Gen. Stat. § 1-75.4(1)(d). “This statute is liberally
construed to find personal jurisdiction over nonresident defendants
to the full extent allowed by due process.” DeArmon v. B. Mears
Corp., 67 N.C. App. 640, 643, 314 S.E.2d 124, 126 (1984), rev'd on
other grounds, 312 N.C. 749, 325 S.E.2d 223 (1985). However,
“[t]he burden is on [the] plaintiff to establish itself within some
ground for the exercise of personal jurisdiction over defendant.”
Public Relations, Inc. v. Enterprises, Inc., 36 N.C. App. 673, 677,
245 S.E.2d 782, 784 (1978), citing Bryson v. Northlake Hilton, 407
F. Supp. 73 (M.D.N.C. 1976); Munchak Corp. v. Riko Enterprises,
Inc., 368 F. Supp. 1366 (M.D.N.C. 1973). “The failure to plead the
particulars of jurisdiction is not fatal to the claim so long as
the facts alleged permit the inference of jurisdiction under the
statute.” Williams v. Institute for Computational Studies, 85 N.C.
App. 421, 428, 355 S.E.2d 177, 182 (1987). If a defendant
challenges the court's jurisdiction, “a trial court may hold anevidentiary hearing including oral testimony or depositions or may
decide the matter based on affidavits. If the court takes the
latter option, the plaintiff has the initial burden of establishing
prima facie that jurisdiction is proper.” Bruggeman, 138 N.C. App.
at 615, 532 S.E.2d at 217 (citations omitted).
Plaintiff, in the instant case, alleges in his complaint
“[u]pon information and belief, both named defendants are subject
to the personal jurisdiction of the Courts of this State pursuant
to N.C.G.S. § 1-75.4[.]” Although the complaint cites our long-
arm statute as providing personal jurisdiction over defendants, the
complaint does not state the section of this statute under which
jurisdiction is obtained nor does it allege any facts as to
activity being conducted in this State at the time of service of
process. On appeal, plaintiff argues that personal jurisdiction is
based upon N.C. Gen. Stat. § 1-75.4(1)(d) because defendant Central
Express was engaged in substantial activity in that defendants
“regularly conduct business within this [S]tate by delivering
freight from, to or through this State.”
In Godwin, this Court held plaintiff failed to prove a prima
facie statutory basis for jurisdiction under N.C. Gen. Stat. § 1-
75.4(1). Godwin, 118 N.C. App. 341, 455 S.E.2d 473. In that case,
neither the complaint nor amended complaint contained any
allegations regarding the nature of defendants' contacts with this
State and the record was devoid of evidence to support the trial
court's presumed finding of substantial activity within this State.
Id. at 351-352, 455 S.E.2d at 481. Recently, this Court in Cooperv. Shealy, 140 N.C. App. 729, 537 S.E.2d 854 (2000) held th
at a
motion to dismiss for lack of personal jurisdiction under N.C. Gen.
Stat. § 1-75.4(4)(a) was properly denied where allegations in
plaintiff's complaint satisfied requirements of the long-arm
statute by sufficiently claiming that defendant carried on
solicitations within the meaning of the statute.
A review of the record and plaintiff's complaint shows he
failed to meet his burden of proving prima facie a statutory basis
for personal jurisdiction. Accordingly, the trial court erred by
denying defendant's motion to dismiss for a lack of personal
jurisdiction.
[3]In light of our disposition of this case under our “long
arm statute,” we need only address defendants' additional
assignment of error that the trial court erred in denying their
motion for sanctions pursuant to Rule 11 of our Rules of Civil
Procedure and in failing to enter findings and conclusions in its
order. N.C.R. Civ. P. 11.
Defendant claims Rule 11 sanctions are warranted because
plaintiff “through his counsel, filed a complaint which lacks legal
sufficiency, factual sufficiency and was filed only to 'forum-shop'
in North Carolina after the applicable one year statute of
limitations had expired in Louisiana.”
The trial court's decision whether or not to impose Rule 11
sanctions is reviewable de novo. Dodd v. Steele, 114 N.C. App.
632, 635, 442 S.E.2d 363, 365, cert. denied, 337 N.C. 691, 448
S.E.2d 521 (1994), citing Turner v. Duke University, 325 N.C. 152,165, 381 S.E.2d 706, 714 (1989), cert. denied, 329 N.C. 505
, 407
S.E.2d 552 (1991). In general, an order imposing or denying
sanctions must be supported by findings of fact and conclusions of
law. Turner, 325 N.C. at 165, 381 S.E.2d at 714. The trial
court's failure to make findings and conclusions results in error,
which generally requires the case to be remanded for the resolution
of any disputed factual issues. Taylor v. Taylor Products, Inc.,
105 N.C. App. 620, 630, 414 S.E.2d 568, 576 (1992). “However,
remand is not necessary when there is no evidence in the record,
considered in the light most favorable to the movant, which could
support a legal conclusion that sanctions are proper.” Id.
Rule 11, which sets forth the circumstances under which
sanctions may be imposed, states in pertinent part:
The signature of an attorney or party
constitutes a certificate by him that he has
read the pleading, motion, or other paper;
that to the best of his knowledge,
information, and belief formed after
reasonable inquiry it is well grounded in fact
and is warranted by existing law or a good
faith argument for the extension,
modification, or reversal of existing law, and
that it is not interposed for any improper
purpose, such as to harass or to cause
unnecessary delay or needless increase in the
cost of litigation.
N.C.R. Civ. P. 11. In other words, Rule 11 provides that a
pleading must contain the following to avoid the imposition of
sanctions: (1) legal sufficiency; (2) factual sufficiency; and
(3) a proper purpose. Williams v. Hinton, 127 N.C. App. 421, 423,
490 S.E.2d 239, 241 (1997). A pleading lacking in any of these
three areas is sufficient to support sanctions under Rule 11. Id. To determine whether a pleading is legally
sufficient, the
trial court should look “first to the facial plausibility of the
pleading and only then, if the pleading is implausible under
existing law, to the issue of 'whether to the best of the signer's
knowledge, information, and belief formed after reasonable inquiry,
the complaint was warranted by the existing law.'” Bryson v.
Sullivan, 330 N.C. 644, 661, 412 S.E.2d 327, 336 (1992), quoting
dePasquale v. O'Rahilly, 102 N.C. App. 240, 246, 401 S.E.2d 827,
830 (1991). This is measured by “an objective standard of
reasonable inquiry.” Id. (citation omitted).
To determine whether a complaint is factually sufficient, the
court must determine: “(1) whether the plaintiff undertook a
reasonable inquiry into the facts and (2) whether the plaintiff,
after reviewing the results of his inquiry, reasonably believed
that his position was well grounded in fact.” McClerin v. R-M
Industries, Inc., 118 N.C. App. 640, 644, 456 S.E.2d 352, 355
(1995).
A complaint has been influenced with an improper purpose when
its purpose is “'any purpose other than one to vindicate rights. .
. or to put claims of right to a proper test.'” Brown v. Hurley,
124 N.C. App. 377, 382, 477 S.E.2d 234, 238 (1996)(citation
omitted). For example, “a party 'will be held responsible if his
evident purpose is to harass, persecute, otherwise vex his
opponents or cause them unnecessary cost or delay.'” Id. “An
objective standard is used to determine the existence of an
improper purpose, with the burden on the movant to prove suchimproper purpose.” Id.
After careful review, we cannot conclude the complaint was
legally and factually deficient or filed with an improper purpose
such that sanctions should be imposed.
In sum, the trial court's order denying defendants' motion to
dismiss for a lack of personal jurisdiction pursuant to Rule
12(b)(2) is reversed. N.C.R. Civ. P. 12(b)(2). The trial court's
order denying defendants' motion for sanctions pursuant to Rule 11
is affirmed. N.C.R. Civ. P. 11.
Reversed in part and affirmed in part.
Judges HUNTER and CAMPBELL concur.
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