Plaintiff argues that by dismissing its complaint for lack of
personal jurisdiction, the trial court committed reversible error.
We disagree.
“Jurisdiction has been defined as 'the power to hear and to
determine a legal controversy; to inquire into the facts, apply the
law, and to render and enforce a judgment[.]'”
High v. Pearce, 220
N.C. 266, 271, 17 S.E.2d 108, 112 (1941) (quoting McIntosh,
Practice and Procedure, sec. 5) (citations omitted). “Personal
jurisdiction refers to the Court's ability to assert judicial powerover the parties and bind them by its adjudication.”
Japan Gas
Lighter Asso. v. Ronson Corp., 257 F. Supp. 219, 224 (D.N.J. 1966).
A trial court ruling on the defendant's challenge to the exercise
of personal jurisdiction may either (1) decide the matter based on
affidavits, or (2) conduct an evidentiary hearing with witness
testimony or depositions. N.C.G.S. § 1A-1, Rule 43(e) (2001).
Either way, “[t]he burden is on the plaintiff to prove by a
preponderance of the evidence that grounds exist for the exercise
of personal jurisdiction over a defendant.”
Filmar Racing, Inc. v.
Stewart, 141 N.C. App. 668, 671, 541 S.E.2d 733, 736 (2001);
Murphy
v. Glafenhein, 110 N.C. App. 830, 431 S.E.2d 241,
disc. review
denied, 335 N.C. 176, 436 S.E.2d 382 (1993). Moreover, “when the
defendant supplements its motion [for dismissal] with affidavits or
other supporting evidence, the allegations of the plaintiff's
complaint 'can no longer be taken as true or controlling and
plaintiff[] cannot rest on the allegations of the complaint,' but
must respond 'by affidavit or otherwise . . . setting forth
specific facts showing that the court has jurisdiction.'”
Wyatt v.
Walt Disney World Co., 151 N.C. App. 158, 163, 565 S.E.2d 705, 708
(2002) (quoting
Bruggeman v. Meditrust Acquisition Co., 138 N.C.
App. 612, 615-16, 532 S.E.2d 215, 218,
disc. review denied, 353
N.C. 261, 546 S.E.2d 90 (2000)) (citation omitted).
The trial court's determination regarding the existence of
grounds for personal jurisdiction is a question of fact.
Hiwassee
Stables, Inc. v. Cunningham, 135 N.C. App. 24, 519 S.E.2d 317
(1999). “'The standard of [appellate] review of an order
determining personal jurisdiction is whether the findings of fact
by the trial court are supported by competent evidence in therecord; if so, this Court must affirm the order of the trial
court.'”
Wyatt, 151 N.C. App. at 163, 565 S.E.2d at 708 (quoting
Replacements, Ltd. v. Midwesterling, 133 N.C. App. 139, 140-41, 515
S.E.2d 46, 48 (1999)). “Where no findings are made, proper
findings are presumed, and our role on appeal is to review the
record for competent evidence to support these presumed findings.”
Bruggeman, 138 N.C. App. at 615, 532 S.E.2d at 217-18 (citing
Sherwood v. Sherwood, 29 N.C. App. 112, 223 S.E.2d 509 (1976)).
In its determination regarding the existence of personal
jurisdiction, the trial court undertakes a two part analysis.
First, the North Carolina long-arm statute
must permit the exercise of personal
jurisdiction. Second, the exercise of
personal jurisdiction must comport with the
due process clause of the Fourteenth Amendment
of the United States Constitution. 'However,
when personal jurisdiction is alleged to exist
pursuant to the long-arm statute, the question
of statutory authority collapses into one
inquiry -- whether defendant has the minimum
contacts necessary to meet the requirements of
due process.'
Filmar Racing, 141 N.C. App. at 671, 541 S.E.2d at 736 (quoting
Hiwassee Stables, 135 N.C. App. at 27, 519 S.E.2d at 320)
(citations omitted).
N.C.G.S. § 1-75.4 (2001), North Carolina's “long-arm statute,”
confers jurisdiction over non-residents. In the instant case,
plaintiff did not reference G.S. § 1-75.4 in its complaint.
However, “[t]he 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). On appeal, plaintiff argues that statutoryauthority for the assertion of personal jurisdiction exists under
N.C.G.S. § 1-75.4(5), which, in pertinent part, confers
jurisdiction on actions:
a. Aris[ing] out of a promise, made anywhere
to the plaintiff or to some third party for
the plaintiff's benefit, by the defendant to
perform services within this State or to pay
for services to be performed in this State by
the plaintiff; or
b. Aris[ing] out of services . . . actually
performed for the defendant by the plaintiff
within this State if such performance within
this State was authorized or ratified by the
defendant[.] . . .
N.C.G.S. § 1-75.4(5)(a) and (b) (2001). Plaintiff alleges that it
performed legal services for defendants, and that defendants either
authorized or promised to pay for these services. We conclude
plaintiff has asserted sufficient facts to support a statutory
basis for the exercise of personal jurisdiction over defendants.
We next consider whether minimum contacts consistent with
constitutional principles exist.
“The Due Process Clause of the Fourteenth Amendment operates
to limit the power of a state to assert
in personam jurisdiction
over a non-resident defendant.”
Hiwassee Stables, 135 N.C. App. at
28, 519 S.E.2d at 320 (citing
Helicopteros Nacionales de Columbia
v. Hall, 466 U.S. 408, 413, 80 L. Ed. 2d 404, 410 (1984)). The
pivotal inquiry for a court's determination of whether the exercise
of personal jurisdiction comports with due process is whether the
defendant has “certain minimum contacts with [the forum state] such
that the maintenance of the suit does not offend 'traditional
notions of fair play and substantial justice.'”
International Shoe
Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102 (1945)(quoting
Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 283
(1940)) (citation omitted).
“In addition, '[t]he United States Supreme Court has noted two
types of long-arm jurisdiction: 'specific jurisdiction,' where the
controversy arises out of the defendant's contacts with the forum
state, and 'general jurisdiction,' where the controversy is
unrelated to the defendant's activities within the forum, but there
are 'sufficient contacts' between the forum and the defendant.'”
Wyatt, 151 N.C. App. at 165, 565 S.E.2d at 709 (quoting
Helicopteros, 466 U.S. at 414, 80 L. Ed. 2d at 411). “General
jurisdiction exists where the defendant has continuous and
systematic contacts with the forum state[.]”
Wyatt, 151 N.C. App.
at 165, 565 S.E.2d at 710 (citing
Frisella v. Transoceanic Cable
Ship Co., 181 F. Supp. 2d 644, 647 (E.D. La. 2002)). In the
instant case, plaintiff does not assert the presence of general
jurisdiction, and we find no basis for its existence. We turn,
therefore, to the question of whether grounds exist for the
exercise of specific jurisdiction.
“North Carolina exercises specific jurisdiction over a party
when it exercises personal jurisdiction in a suit arising out of
that party's contacts within the state.”
Fran's Pecans, Inc. v.
Greene, 134 N.C. App. 110, 114, 516 S.E.2d 647, 650 (1999). “To
effectuate minimum contacts, a defendant must have acted to
purposefully avail itself of the privileges of conducting
activities within this State, thus invoking the benefits and
protection of our laws.”
Bates v. Jarrett, 135 N.C. App. 594, 597,
521 S.E.2d 735, 736 (1999) (citing
International Shoe, 326 U.S. at
319, 90 L. Ed. at 103). The 'purposeful availment' requirement ensures
that a defendant will not be haled into a
jurisdiction solely as a result of 'random,'
'fortuitous,' or . . . 'unilateral activity of
another party or a third person[.]'
Jurisdiction is proper, however, where the
contacts proximately result from actions by
the defendant himself that create a
'substantial connection' with the forum State.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 85 L. Ed. 2d
528, 542 (1985) (quoting
Keeton v. Hustler Magazine, Inc., 465 U.S.
770, 774, 79 L. Ed. 2d 790, 797 (1984), and
Helicopteros, 466 U.S.
at 417, 80 L. Ed. 2d at 413). Therefore, “[t]he significant
contacts considered are those actually generated by the defendant.
It is firmly established that 'the unilateral activity of those who
claim some relationship with a nonresident defendant cannot satisfy
the requirement of contact with the forum State.'
. . .
Jurisdiction may not be manufactured by the conduct of others.”
Chung v. NANA Development Corp., 783 F.2d 1124, 1127 (4th Cir.)
(quoting
Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283,
1298 (1958)),
cert. denied, 479 U.S. 948, 93 L. Ed. 2d 381 (1986).
Preliminarily, we note that plaintiff argues in its brief that
personal jurisdiction is proper in part because “Queller made a
partial payment to [plaintiffs] in North Carolina.” However,
plaintiff has since submitted an exhibit to this Court, retracting
this argument and stating this earlier allegation was “an
inadvertent misstatement.” Accordingly, we have disregarded
plaintiff's earlier statements on this matter, and our holding in
this case is not based in any respect on the assertion in
plaintiff's brief that Queller had made a partial payment to
plaintiff for appellate legal services. Plaintiff argues on appeal that co-defendant Robert Jacobs
“authorized and directed [plaintiff], on behalf of himself and
[defendants], to perfect the appeal, preserve all appellate rights
and handle a wide range of post-judgment motions and other
matters.” However, both defendants flatly contradicted this
assertion in their affidavits, each of which stated that:
Robert Jacobs is not now and never has been my
agent for any purpose associated with the New
Horizon case. Robert Jacobs is not now and
never has been authorized to deal with Adams
Kleemeier or Mr. Hedges as my agent or to
retain Adams Kleemeier or Mr. Hedges to
represent me.
Plaintiff offers no documentary or other evidentiary support of its
claim that Robert Jacobs was authorized to contract on behalf of
defendants. Nor does Hedges' affidavit include any reference to
Robert Jacobs' acting on behalf of defendants. Instead, plaintiff
relies solely upon assertions in its verified complaint, which
plaintiff contends must be treated as an affidavit. On this basis,
plaintiff argues that defendants' affidavits “do[] nothing more
than create a factual dispute, which must be resolved in
[plaintiff's] favor for purposes of [defendants'] [m]otion to
[d]ismiss.” Plaintiff misapprehends the law in this regard.
It is true that a “'verified complaint may be treated as an
affidavit if it (1) is made on personal knowledge, (2) sets forth
such facts as would be admissible in evidence, and (3) shows
affirmatively that the affiant is competent to testify to the
matters stated therein.'”
Spinks v. Taylor and Richardson v.
Taylor Co., 303 N.C. 256, 264, 278 S.E.2d 501, 506 (1981) (quoting
Page v. Sloan, 281 N.C. 697, 705, 190 S.E.2d 189, 194 (1972)).
However, the allegations in plaintiff's complaint regarding RobertJacob's authority to act on behalf of defendants “meet[] neither
the first nor the third requirements of the rule for affidavits and
therefore may not be considered.”
Page,
281 N.C. at 705, 690
S.E.2d at 194;
see also Talbert v. Choplin, 40 N.C. App. 360, 365,
253 S.E.2d 37, 41 (1979) (verified affidavit that failed to
establish that plaintiff was competent to testify to matter
asserted had “failed to meet the requirements for an affidavit to
be considered under Rule 56(e)” and thus could not be considered by
the trial court). Because plaintiff failed to offer any evidence,
by affidavit or otherwise, that Robert Jacobs entered into a
contract on behalf of defendants, this allegation is disregarded in
our determination of whether grounds exist for the exercise of
personal jurisdiction over defendants.
Plaintiff bases its argument that defendants were subject to
personal jurisdiction primarily upon evidence that Hedges “sent
Defendants approximately 20 letters on Adams Kleemeier letterhead
regarding their case.” Plaintiff acknowledges that when the
New
Horizon trial ended, defendants “had not made or conveyed to trial
counsel any decisions about appellate representation[,]” and also
concedes that defendants “continually and entirely ignored”
plaintiff's “repeated and frequent attempts to propose, negotiate
and execute a formal written engagement with Defendants for post-
trial and appellate services[.]” However, plaintiff argues on
appeal that defendants'
passive receipt of these letters
constitutes the required “minimum contact” between defendants and
North Carolina. We disagree.
It is settled law that personal jurisdiction is not created by
the unilateral acts of plaintiff. “'The unilateral activity ofthose who claim some relationship with a nonresident defendant
cannot satisfy the requirement of contact with the forum State[.]'”
Miller v. Kite, 313 N.C. 474, 477, 329 S.E.2d 663, 665 (1985)
(quoting
Hanson, 357 U.S. at 253, 2 L. Ed. 2d at 1298);
see, e.g.,
Allegiant Physicians Services v. Sturdy Mem. Hosp., 926 F. Supp.
1106, 1115 (N.D. Ga. 1996) (personal jurisdiction not proper where
defendant “received several unsolicited promotional brochures” from
plaintiff before “finally respond[ing] to one of Plaintiff's
inquiries”);
Covenant Bank for Sav. v. Cohen, 806 F. Supp. 52, 55
(D.N.J. 1992) (where record contains “no allegation that defendants
solicited or initiated the contact with [plaintiff],” Court finds
exercise of personal jurisdiction improper, noting that
“plaintiff's unilateral acts, directed to a nonresident defendant,
do not create sufficient minimum contacts between the nonresident
defendant and the forum”).
In the present case, it is
uncontroverted that plaintiff's letters to defendants were
unsolicited. It is equally undisputed that defendants did not
respond to plaintiff's solicitations to provide appellate legal
services. We conclude that the mailing by plaintiff of letters to
defendants in Florida was not an action
by defendants directed
towards North Carolina, and do not constitute a contact that
defendants made with this State.
Plaintiff also asserts the existence of personal jurisdiction
based on the contents of the letters it sent to defendants.
Plaintiff contends that its letters either established an implied
contract for appellate representation, or at least gave rise to an
obligation on defendants' part to respond. Our examination of the
letters reveals no basis for this assertion. Plaintiff directs our attention to self-serving excerpts from
these letters. For example, plaintiff's letter of 3 August 1999 to
defendant Born states that “[y]ou have accepted that I, and [Adams,
Kleemeier] will perform the bulk of the work on the New Horizon
appeal[.]” There is no evidence in the record supporting this
statement, or suggesting that defendant ever accepted plaintiff's
proposed terms of engagement. Indeed, the letter also states the
following:
It is critically important that we have your
financial commitment to this appeal. . . .
[M]y firm simply will not make an appearance
in this appeal without a dependable commitment
to the payment of the considerable fees and
expenses. . . . You must bring your account
current with Patton Boggs as of July 31,
1999.
I will require a substantial retainer
for Adams, Kleemeier. . . .
. . . .
I understand that you experienced some sticker
shock at the $900,000 figure demanded by Read.
. . . The history of slow pay to prior lawyers
has hurt you and will continue to hurt you.
Adams, Kleemeier will not make the
considerable commitment of resources to obtain
a reversal on appeal if you will not give us
the financial fuel to do our best on your
behalf.
(emphasis added). Plaintiff's letter, which unequivocally warns
that it “will not make an appearance in this appeal” absent payment
of a “substantial retainer,” is properly construed as an offer to
provide appellate representation only upon receipt of “a dependable
commitment to the payment of the considerable fees[.]” Similar
language appears in the other letters included in the record. The
29 July 1999 letter from McCaffrey to defendant Born states, in
relevant part, that:
[Plaintiff] will not allow [this] matter to
come in the door without a retainer. . . .
[T]o keep [Hedges] involved . . .
we need$900,000.00. . . .
This is as low as we can
go and still receive permission from firm
management to go forward.
(emphasis added). This was followed by plaintiff's letter of 3
August 1999, discussed above. Plaintiff subsequently wrote to both
defendants on 1 September 1999, that
it is necessary that we establish an agreement
to the terms of representation. . . .
The
retainer I request to go forward with the
appeal is $150,000.00. . . . Other
terms of
our engagement are set forth on the enclosed
term sheet.
We require that you acknowledge
acceptance of and agreement to [these] terms
by signing the enclosed copy of this letter
and returning same to me . . . along with your
contribution [and] the
required retainer.”
(emphasis added). This letter makes clear that as of 1 September
1999, no agreement had been reached regarding plaintiff's retention
as appellate counsel. On 16 September 1999, plaintiff again wrote
to defendants:
[P]lease execute my engagement letter
forwarded to you on September 1, 1999 and
return it to me with the requested retainer.
We must establish an engagement with my new
firm in order for me to continue to be
involved in your representation.
(emphasis added). This was followed on 4 October 1999 by letters
from plaintiff to defendants stating in pertinent part “
I have not
heard from you concerning my proposed terms of engagement for
handling the appeal on your behalf.” (emphasis added). These
unsolicited letters to defendants expressly condition plaintiff's
representation of defendants upon defendants' agreement to
plaintiff's financial terms, and their payment of a “substantial
retainer.” Defendants were entitled to rely upon plaintiff's clear
statements that it would not “receive permission from firm
management to go forward” without payment of a retainer, and would“not make an appearance in this appeal without a dependable
commitment” to payment of fees.
See Spartan Leasing v. Pollard,
101 N.C. App. 450, 455, 400 S.E.2d 476, 479 (1991) (“One to whom a
definite representation has been made is entitled to rely on that
representation if the representation is of a character to induce
action by a person of ordinary prudence and is reasonably relied
upon.”) (citing
Fox v. Southern Appliances, 264 N.C. 267, 141
S.E.2d 522 (1965)). It is undisputed that defendants neither
responded to these letters, nor sent plaintiff any money. We
conclude that plaintiff's letters to defendants do not establish
the existence of an implied contract for legal representation.
Plaintiff also argues that personal jurisdiction is properly
exercised over defendants because they owe plaintiff in
quantum
meruit for legal services rendered on their behalf. Plaintiff
contends that defendants' implied promise to pay for legal services
provided by plaintiff is demonstrated by the fact that defendants
“never told [plaintiff] to stop representing their interests[.]”
However, the record is devoid of evidence that defendants had ever
granted plaintiff permission to represent them in the first place.
Plaintiff essentially argues that its unsolicited letters to
defendants established a contractual arrangement, making it
defendants' responsibility to amend or terminate their
“representation.” The letters provide no factual basis for this
position. As discussed above, each of the letters makes clear that
legal representation was contingent upon the parties reaching an
agreement. We conclude that plaintiff's letters to defendants in
no way justified plaintiff in
assuming that defendants had chosen
to hire the firm on appeal. We further conclude that in theabsence of any evidence of an express or implied contract between
plaintiff and defendants, plaintiff has no right to recovery in
quantum meruit.
See Twiford v. Waterfield, 240 N.C. 582, 585, 83
S.E.2d 548, 551 (1954) (to recover in
quantum meruit “plaintiff
must show by the greater weight of the evidence that both parties,
at the time the labor was done or the services were rendered,
contemplated and intended that pecuniary recompense should be made
for the same”);
Thomas v. Thomas, 102 N.C. App. 124, 125, 401
S.E.2d 396, 397 (1991) (“Recovery on
quantum meruit must rest upon
implied contract.”)
.
Indeed, absent permission, plaintiff had no authority or right
to represent defendants.
Dunkley v. Shoemate, 350 N.C. 573, 577,
515 S.E.2d 442, 444 (1999) (“'no person has the right to appear as
another's attorney without the authority to do so, granted by the
party for which he [or she] is appearing'”) (quoting
Johnson v.
Amethyst Corp., 120 N.C. App. 529, 532, 463 S.E.2d 397, 400
(1995));
Stamm v. Salomon, 144 N.C. App. 672, 682, 551 S.E.2d 152,
159 (2001) (where “[n]othing in the record suggests that
[defendant] gave his former attorneys permission to further
represent him . . . his former counsel was without authority to
make motions on his behalf”),
disc. review denied, 355 N.C. 216,
560 S.E.2d 139 (2002). We conclude that plaintiff's assertion of
a right to recover in
quantum meruit does not advance its
contention that defendants were subject to personal jurisdiction in
North Carolina.
Plaintiff further contends that defendants “authorized and
ratified [plaintiff's] work[.]” To support this assertion,
plaintiff points out that defendants forwarded federal bankruptcyexemption forms to Hedges when requested to do so by Patton Boggs.
The record shows that the bankruptcy forms were prepared by, and
provided to, defendants by Patton Boggs attorneys. A Patton Boggs
attorney mailed the forms to defendants, accompanied by a letter on
Patton Boggs stationary, directing defendants to sign the forms and
to forward them in the enclosed stamped and pre-addressed envelope.
We conclude that the forwarding of these forms does not constitute
“authorization” for plaintiff law firm to provide appellate
representation, particularly as the bankruptcy exemption forms did
not pertain to their appeal from the jury verdict.
We also reject plaintiff's argument that
Forman & Zuckerman v.
Schupak, 31 N.C. App. 62, 228 S.E.2d 503 (1976), “involv[es] almost
identical facts” and thus “is controlling in this case.” Although
both cases address the issue of personal jurisdiction, the evidence
in
Schupak showed that “defendants sought out plaintiff to assist
them in performance of professional services[;] . . . defendants
supervised the work product of plaintiff; . . . [and] otherwise
directly participated in the legal services being performed[.]”
Schupak, 31 N.C. App. at 66, 228 S.E.2d at 506. Because pertinent
facts in
Schupak regarding the exercise of personal jurisdiction
are entirely different from those presented on the record before
us, the case has little or no bearing on the decision herein.
In sum, we conclude that “the bulk of [plaintiff's]
allegations consist merely of a recitation of unilateral activity
on its part, which is insufficient to establish minimum contacts.”
Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 65
(3d Cir. 1984). As expressed by the South Carolina Supreme Court: Every communication between the parties was
initiated by [plaintiff.] . . . If the
'minimum contacts inquiry can be manipulated
to create personal jurisdiction where an
in-state resident manufactures contacts
between its home forum and a nonresident
entity by means of its own extraterritorial
inducements, then very little legal
predictability remains to enable potential
defendants to structure their primary conduct
with some minimum assurance as to where that
conduct will subject them to suit.'
Aviation Associates v. Jet Time, Inc., 303 S.C. 502, 508-09, 402
S.E.2d 177, 180 (1991) (quoting
Wells American Corp. v. Sunshine
Electronics, 717 F. Supp. 1121, 1125, n.3 (D.S.C. 1989)).
We conclude that the record supports the presumed finding of
fact made by the trial court in its order dismissing this case for
lack of personal jurisdiction over defendants. “Although we are
cognizant of the liberal trend toward exercising personal
jurisdiction over non-resident defendants, the minimum contacts
which are 'absolutely necessary' between the defendant and our
[S]tate for North Carolina to invoke jurisdiction are missing
here.”
Filmar Racing, 141 N.C. App. at 673, 541 S.E.2d at 737-38
(quoting
Tutterrow v. Leach, 107 N.C. App. 703, 708, 421 S.E.2d
816, 819 (1992)).
The trial court did not err by dismissing plaintiff's action
for lack of personal jurisdiction. Accordingly, the trial court's
order dismissing plaintiff's action is
Affirmed.
Judge WYNN dissents.
Judge TIMMONS-GOODSON concurs in result.
WYNN, Judge dissenting.
Because I disagree with the majority's holding that in this
case, the “minimum contacts which are absolutely necessary between
the defendant and our state for North Carolina to invoke
jurisdiction are missing,” I respectfully dissent.
The majority correctly states the two-part analysis required
for determining the existence of personal jurisdiction:
First, the North Carolina long-arm statute
must permit the exercise of personal
jurisdiction. Second, the exercise of
personal jurisdiction must comport with the
due process clause of the Fourteenth Amendment
of the United States Constitution.
I agree with the majority's conclusion that the requirements of the
North Carolina long-arm statute have been met. However, I disagree
with the majority's resolution of the due process analysis.
In a lengthy analysis, the majority narrowly focuses its
personal jurisdiction due process inquiry to the defendants'
relationship with the plaintiff excluding all of defendants' other
related contacts with our State. Indeed, “there is no requirement
that the cause of action, pursuant to which the jurisdictional
claim is raised, be related to the activities of the defendant
which give rise to the in personam jurisdiction.”
Hankins v.
Somers, 39 N.C. App. 617, 621, 251 S.E.2d 640, 643 (1979)(quoting
Munchak Corp. v. Riko Enterprises, Inc., 368 F. Supp. 1366, 1372
(M.D.N.C. 1973));
see also, ETR Corporation v. Wilson Welding
Service, Inc., 96 N.C. App. 666, 386 S.E.2d 766 (1990)(where this
Court considered activities related and unrelated to the legal
action in that case to determine whether a basis for in personam
jurisdiction existed). “In determining whether the exercise of personal jurisdiction
comports with due process, the crucial inquiry is whether the
defendant has certain minimum contacts with the forum state such
that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice. To generate minimum
contacts, the defendant must have acted in such a way so as to
purposefully avail itself of the privilege of conducting activities
within the forum state, thus invoking the benefits and protections
of the laws of North Carolina. Moreover, the relationship between
the defendant and the state must be such that the defendant should
reasonably anticipate being haled into a North Carolina court.”
Filmar Racing, Inc. v. Stewart, 141 N.C. App. 668, 671-72, 541
S.E.2d 733, 736-37 (2001). “The existence of minimum contacts
cannot be ascertained by mechanical rules, but rather by
consideration of the facts of each case in light of traditional
notions of fair play and justice. The factors to be considered are
(1) quantity of contacts, (2) nature and quality of the contacts,
(3) the source and connection of the cause of action to the
contacts, (4) the interest of the forum state, and (5) convenience
to the parties.”
Marion v. Long, 72 N.C. App. 585, 587, 325 S.E.2d
300, 302 (1985).
In this case, the defendants had several contacts with North
Carolina such that it would not be unreasonable for them to
anticipate being haled into the courts of this State.
Significantly, the defendants hired two other North Carolina law
firms to represent them in North Carolina courts. The defendants
hired Patton Boggs L.L.P., a law firm with offices in Greensboro
and Raleigh, to represent them in the Eastern District of NorthCarolina. During this trial, the federal district court denied
defendants' motion to dismiss for lack of personal jurisdiction and
the trial resulted in a $21,000,000 verdict against defendants.
Steven Hedges, one of the trial attorneys, joined the plaintiff law
firm after the trial in the Eastern District of North Carolina and
in his sworn statement, Mr. Hedges alleges he handled several
matters in defendants' appeal. Defendants contend they did not
hire Mr. Hedges or the plaintiff law firm to handle any appellate
matters. Rather, they hired another North Carolina law firm, the
Raleigh office of Smith Helms Mulliss & Moore to prosecute their
appeal. The plaintiff alleges it assisted in the prosecution of
defendants' appeal by handling several matters including filing a
motion and preparing and filing the docketing statement.
I would hold that the requirements of due process are
satisfied in this case. By their business activities including
retaining two law firms in this State to represent them on the
underlying matters giving rise to this action, defendants have
“purposefully [availed themselves] of the privilege of conducting
activities within [North Carolina], thus invoking the benefits and
protections of its laws.”
Hanson v. Denckla, 357 U.S. 235, 253
(1958),
see also, ETR Corporation v. Wilson Welding Service, Inc.,
96 N.C. App. 666, 386 S.E.2d 766 (1990).
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