Link to original WordPerfect file
How to access the above link?
All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the
print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
TEJAL VYAS, LLC and DR. P.K. VYAS, Plaintiffs, v. CARRIAGE PARK
LIMITED PARTNERSHIP, VILAS DEVELOPMENT CORP., GANESAN ISVABHARATHY,
and STONESAN VISVABHARATHY, Defendants
NO. COA03-1144
Filed: 7 September 2004
1. Jurisdiction_long arm_out-of-state investment
Defendants were subject to jurisdiction under North Carolina's long arm statute where there
was a solicitation in a memorandum sent to plaintiffs' attorney in North Carolina about defendants'
investment proposal, and a thing of value shipped from North Carolina in a check sent from
plaintiffs to defendants for one investment unit. N.C.G.S. § 1-75.4.
2. Jurisdiction_minimum contacts_out-of-state investment
Defendants did not have the necessary minimum contacts with North Carolina for the
exercise of personal jurisdiction without a due process violation where there was an investment
presentation in Georgia, material sent from Illinois to North Carolina after plaintiffs initiated
contact, and a telephone call from defendants to plaintiffs' attorneys in North Carolina at plaintiffs'
request. Five factors are reviewed to determine whether minimum contacts exist: the quantity of
contacts, the nature and quality of contacts, the source and connection of the cause of action to the
contacts, the interest of the forum state, and the convenience of the parties.
Judge TIMMONS-GOODSON dissenting.
Appeal by plaintiffs from order entered 13 May 2003 by Judge
Evelyn W. Hill in Wake County Superior Court. Heard in the Court
of Appeals 19 May 2004.
Herring McBennett Mills & Finkelstein, PLLC, by Mark A.
Finkelstein, for plaintiffs-appellants.
Hafer & Caldwell, P.A., by Colleen Kochanek, for defendants-
appellees.
TYSON, Judge.
Tejal Vyas, LLC and Dr. P.K. Vyas (Dr. Vyas) (collectively,
plaintiffs) appeal the trial court's order granting the motions
to dismiss for lack of personal jurisdiction filed by Carriage Park
Limited Partnership (Carriage Park), Vilas Development Corp.,
Ganesan Visvabharathy (Visvabharathy), and Stonesan Visvabharathy(collectively, defendants). We affirm.
I. Background
In 1994, Visvabharathy made a presentation concerning
financial investments at a conference for physicians practicing in
the southeast region of the United States. Dr. Vyas attended this
conference held in Georgia. During the presentation, Visvabharathy
discussed real estate investments, such as Carriage Park, and
informed the conference attendees of the opportunity to invest in
Carriage Park through Vilas Development Corp., the general partner
of Carriage Park. Visvabharathy provided attendees with contact
information for Vilas Development Corp.
After the presentation, Dr. Vyas approached Visvabharathy to
further discuss investment opportunities. Visvabharathy described
the Carriage Park investment to him in general terms. Plaintiffs
contacted defendants in Illinois seeking to invest in Carriage Park
and invested $100,000.00. The investment was facilitated by
plaintiffs' attorneys, both of whom are licensed North Carolina
attorneys. A Subscription Agreement was signed by plaintiffs on 18
July 1994 and sent to defendants in Illinois. Plaintiffs and their
attorneys communicated with Visvabharathy via telephone and by mail
through 2000.
On 6 August 2002, plaintiffs instituted this action against
defendants alleging breach of fiduciary duty, breach of contract,
and misrepresentation. On 11 October 2002 and 1 February 2003,
defendants filed motions to dismiss plaintiffs' complaint pursuant
to N.C.R. Civ. P. 12(b)(2) for lack of personal jurisdiction over
defendants. Following a hearing, the trial court issued an orderon 9 May 2003 containing the following findings of fact:
1 1.
The plaintiff, Tejal Vyas, is a North
Carolina Limited Liability Company and
the plaintiff, Dr. P.K. Vyas, is an
individual citizen and resident of Wake
County, North Carolina.
2 2.
Carriage Park Limited Partnership is an
Illinois limited partnership and Vilas
Development Corporation is an Illinois
corporation. Defendant Ganesan R.
Visvabharathy is a citizen and resident
of Illinois.
3 3.
Defendants made an investment
presentation in the State of Georgia to a
group of physicians which included the
plaintiff[s].
4 4.
Plaintiffs contacted defendants in
Illinois to invest in the Carriage Park
Investment property.
5 5.
At no time did any of the defendants
solicit business in North Carolina.
6 6.
All of the investment property, the
documentation regarding the investments,
the investor's accountants, and the
attorneys regarding the property are
located in Illinois.
7 7.
The only parties located in North
Carolina are the plaintiffs and the
plaintiffs' attorney.
8 8.
There are not sufficient contacts in
North Carolina by the defendants to allow
the North Carolina courts to assume
jurisdiction.
II. Issue
The sole issue on appeal is whether the trial court erred in
granting defendants' motions to dismiss for lack of personal
jurisdiction.
III. Standard of Review
The standard of review of an order determining jurisdictionis whether the findings of fact by the trial court are supported by
competent evidence in the record; if so, this Court must affirm the
order of the trial court. Better Business Forms, Inc. v. Davis,
120 N.C. App. 498, 500, 462 S.E.2d 832, 833 (1995). If presumed
findings of fact are supported by competent evidence, they are
conclusive on appeal despite evidence to the contrary. Cameron-
Brown Co. v. Daves, 83 N.C. App. 281, 285, 350 S.E.2d 111, 114
(1986).
A court must engage in a two-part inquiry to determine whether
personal jurisdiction over a non-resident defendant is properly
asserted. Better Business Forms, Inc., 120 N.C. App. at 500, 462
S.E.2d at 833. First, the court must determine whether North
Carolina's long-arm statute authorizes jurisdiction over the
defendant. N.C. Gen. Stat. § 1-75.4 (2003). If so, the court must
determine whether the court's exercise of jurisdiction over the
defendant is consistent with due process. Better Business Forms,
Inc., 120 N.C. App. at 500, 462 S.E.2d at 833.
IV. North Carolina's Long-Arm Statute
[1] Personal jurisdiction is proper here under two provisions
of North Carolina's long-arm statute:
(4) Local Injury; Foreign Act _ In any action
claiming injury to person or property within
this State arising out of an act or omission
outside this State by the defendant, provided
in addition that at or about the time of the
injury:
(a) Solicitation or services activities were
carried on within the State by or on behalf of
the defendant [and] . . . .
. . .
(5) Local Services, Goods or Contracts _ Inany action which:
. . .
(d) Relates to goods, documents of title, or
other things of value shipped from this State
by the plaintiff to the defendant on his order
or direction.
N.C. Gen. Stat. § 1-75.4(4)(a) and (5)(d) (2003).
The memorandum sent to plaintiffs' attorney in North Carolina
to consider defendants' investment proposal constitutes a
solicitation under N.C. Gen. Stat. § 1-75.4(4)(a). See Godwin v.
Walls, 118 N.C. App. 341, 349, 455 S.E.2d 473, 480, disc. rev.
allowed, 341 N.C. 419, 461 S.E.2d 757 (1995) (stating the statute
does not require proof of such injury; the plaintiff need only
allege an injury). Also, the $100,000.00 check sent from
plaintiffs in North Carolina to defendants in Illinois for payment
for one investment unit in Carriage Park constitutes a thing[] of
value shipped from this state by plaintiffs to defendants on their
order or direction pursuant to N.C. Gen. Stat. § 1-75.4(5)(d). For
either of these two reasons, the defendants are subject to
jurisdiction under North Carolina's long-arm statute, N.C. Gen.
Stat. § 1-75.4.
V. Due Process
[2] Since at least one requirement under North Carolina's
long-arm statute allows plaintiffs to assert jurisdiction over
defendants, the inquiry becomes whether plaintiffs' assertion of
jurisdiction over defendants complies with due process. When
personal jurisdiction is alleged to exist pursuant to the long-arm
statute, the question of statutory authority collapses into oneinquiry _ whether defendant has the minimum contacts with North
Carolina necessary to meet the requirements of due process.
Hiwassee Stables, Inc. v. Cunningham, 135 N.C. App. 24, 27, 519
S.E.2d 317, 320 (1999) (citing Murphy v. Glafenhein, 110 N.C. App.
830, 431 S.E.2d 241, disc. rev. denied, 335 N.C. 176, 436 S.E.2d
382 (1993)).
The Due Process Clause of the Fourteenth Amendment limits the
power of a state to exercise in personam jurisdiction over a non-
resident defendant. Hiwassee Stables, Inc., 135 N.C. App. at 28,
519 S.E.2d at 320. 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.'
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), [reh'g denied,
312 U.S. 712, 85 L. Ed. 1143
(1941)]
).
To generate minimum contacts, the defendant must have
purposefully availed itself of the privilege of conducting
activities within the forum state and invoked the benefits and
protections of the laws of North Carolina. International Shoe Co.,
326 U.S. at 319, 90 L. Ed. at 104; Buying Group, Inc. v. Coleman,
296 N.C. 510, 515, 251 S.E.2d 610, 614 (1979); Hiwassee Stables,
Inc., 135 N.C. App. at 28, 519 S.E.2d at 320-21; Godwin, 118 N.C.
App. at 353, 455 S.E.2d at 482. The relationship between the
defendant and the forum state must be such that the defendantshould reasonably anticipate being haled into a North Carolina
court. Cherry Bekaert & Holland v. Brown, 99 N.C. App. 626, 632,
394 S.E.2d 651, 656 (1990). The facts of each case determine
whether the defendant's activities in the forum state satisfy due
process. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 445,
96 L. Ed. 485, 492, reh'g denied,
343 U.S. 917, 96 L. Ed. 1332
(1952)
.
Here, we hold defendants did not engage in sufficient minimum
contacts in North Carolina to justify the exercise of personal
jurisdiction without violating defendants' due process rights.
Plaintiffs assign error to only two of the trial court's
findings of facts: 5) At no time did any of the defendants
solicit business in North Carolina; and 8) There are not
sufficient minimum contacts in North Carolina by defendants to
allow the North Carolina courts to assume jurisdiction. Finding
of fact No. 8 is the ultimate issue on appeal and will be addressed
after weighing all of the evidence. See Hiwassee Stables, Inc.,
135 N.C. App. at 27, 519 S.E.2d at 317. Evidence to support
finding of fact No. 5 shows that after an investment presentation
in Georgia, plaintiffs contacted and requested defendants to send
investment materials to them from Illinois to North Carolina.
Defendants also spoke with plaintiffs' attorneys in North Carolina
upon plaintiffs' request after plaintiffs received the investment
offering. Our Supreme Court has held that a contractual
relationship between a North Carolina resident and an out-of-state
party alone does not automatically establish the necessary minimum
contacts with this State. Tom Togs, Inc. v. Ben Elias IndustriesCorp., 318 N.C. 361, 367, 348 S.E.2d 782, 786 (1986). The
presentation and initial discussions between plaintiffs and
defendants occurred in Georgia. Plaintiffs initiated contact with
defendants in Illinois. Competent evidence in the record supports
the trial court's finding of fact No. 5.
To determine whether the remaining finding of fact is
supported by competent evidence, and thus conclusive on appeal, we
review five factors from precedents to determine whether minimum
contacts existed. Eluhu v. Rosenhaus, 159 N.C. App. 355, 583
S.E.2d 707 (2003), aff'd, 358 N.C. 372, 595 S.E.2d 146 (2004) (No
personal jurisdiction involving alienation of affections claim
where the defendant was physically present in North Carolina, owned
and rented property in North Carolina, and had resided in North
Carolina).
The factors are: (1) the quantity of the 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 of the parties. Cherry Bekaert,
99 N.C. App. at 632, 394 S.E.2d at 655 (quoting New Bern Pool &
Supply Co. v. Graubart, 94 N.C. App. 619, 624, 381 S.E.2d 156, 159,
aff'd per curium, 326 N.C. 480, 390 S.E.2d 137 (1990)); Tutterrow
v. Leach, 107 N.C. App. 703, 708, 421 S.E.2d 816, 819 (1992),
appeal dismissed,
333 N.C. 466, 428 S.E.2d 185 (1993)
.
This Court must also weigh and consider the interests of and
fairness to the parties involved in the litigation. Tutterrow, 107
N.C. App. at 708, 421 S.E.2d at 819; see Eluhu, 159 N.C. App. 355,
583 S.E.2d 707. Where evidence supports unchallenged findings offact, this Court must affirm the order of the trial court
dismissing this action for lack of personal jurisdiction over
defendants. Better Business Forms, Inc., 120 N.C. App. at 500, 462
S.E.2d at 833.
A. Quantity of Contacts
The evidence shows that plaintiffs and defendants
independently traveled to Georgia to give and attend a presentation
at a physicians' convention. After returning to North Carolina,
plaintiffs initiated contact with defendants in Illinois to inquire
about the investment opportunities discussed in Georgia and
requested defendants to mail investment materials to North
Carolina. See CFA Medical, Inc. v. Burkhalter, 95 N.C. App. 391,
395, 383 S.E.2d 214 (1989) (Which party initiates the contact is
taken to be a critical factor in assessing whether a non-resident
defendant is subject to personal jurisdiction based on minimum
contacts.)
B. Nature and Quality of Contacts
Defendants have never been physically present in North
Carolina. Any contact by defendants with plaintiffs in North
Carolina resulted from an initiation and request by plaintiffs.
Defendants' contacts were to mail the brochure and place a
telephone call to plaintiffs' attorney in North Carolina, at
plaintiffs' request.
C. Source and Connection of the Cause of the Action to the
Contacts
Plaintiffs' cause of action arises out of partnerships, real
property, services, and activities located solely in Illinois.
Neither defendants nor any of the investment property is located inNorth Carolina.
D. Interest of the Forum State
Plaintiffs expressly agreed that the Subscription Agreement
was to be governed by the laws of Illinois. While choice of law
clauses are not determinative of personal jurisdiction, they
express the intention of the parties and are a factor in
determining whether minimum contacts exist and due process was met.
Corbin Russwin, Inc. v. Alexander's Hdwe., Inc., 147 N.C. App. 722,
728, 556 S.E.2d 592, 597 (2001).
E. Convenience of the Parties
Defendants all reside in or are entities based in Illinois.
None have been physically present in North Carolina. Defending
against a suit in North Carolina would be inconvenient.
After reviewing all five factors, competent evidence supports
the trial court's conclusion that defendants did not engage in
requisite minimum contacts to satisfy the Due Process Clause. U.S.
Const. amend. V and amend. XIV, § 1. The trial court properly
granted defendants' motions to dismiss. Plaintiffs' assignments of
error are overruled.
The dissenting opinion argues that defendants' activities
satisfy the statutory and constitutional requirements for personal
jurisdiction and cites Carson v. Brodin, 160 N.C. App. 366, 585
S.E.2d 491 (2003) and New Bern Pool & Supply Co., 94 N.C. App. 619,
381 S.E.2d 156.
In Carson, a North Carolina couple sued a Virginia resident
they hired to construct a home in Virginia. This Court upheld the
plaintiffs' assertion of personal jurisdiction over the defendantbased on two factors which are distinguishable from the facts here.
First, the defendant in Carson made two, possibly three, trips
to North Carolina. Carson, 160 N.C. App. at 368, 585 S.E.2d at
494. The defendant met personally with the plaintiffs while in
North Carolina to discuss the construction project. Id. The trips
to the forum state and face-to-face meetings were determinative
factors to this Court in upholding personal jurisdiction to the
plaintiffs. Id. at 372, 585 S.E.2d at 496 (other factors included,
entering into a contract with North Carolina residents that was
executed in North Carolina, making numerous phone calls, mailings
into the state during the contract negotiations, and sending bills
into North Carolina which were paid from plaintiffs' North Carolina
bank account).
Unlike Carson, no evidence shows defendants ever visited North
Carolina during the events at issue or for any other business
transaction, a fact acknowledged by the dissenting opinion. The
only personal contact between the parties occurred in Georgia
following defendants' investment presentation. After returning to
North Carolina, plaintiffs telephoned defendants and requested
investment literature. The remaining relationship existed over the
telephone and through the mail with plaintiffs in North Carolina
and defendants in Illinois. The lack of any prior visits to or
physical presence in North Carolina by defendants distinguishes
this case from Carson. Also, the contract in Carson involved a
consumer contract between homeowners and a builder. Here, the
parties are sophisticated investors in a speculative commercial
venture and represented by counsel. The second distinction the dissenting opinion shows to justify
upholding personal jurisdiction over defendants are three
particular items mailed between the two parties: (1) a memo from
defendants to plaintiffs soliciting investments for a real estate
venture in Illinois; (2) a Subscription Agreement executed by
plaintiffs in North Carolina and mailed to defendants in Illinois;
and (3) plaintiffs' check drawn on a North Carolina bank and mailed
to defendants in Illinois. The dissenting opinion claims this
series of correspondence establishes minimum contacts between the
forum state and defendants. These items were all necessary
components of the contract being negotiated and executed for sale
of an investment interest in real estate located in Illinois. The
result was a single contract between the parties. Both our Supreme
Court and this Court have recognized that more contacts with the
forum state by a defendant is required.
Our Supreme Court ruled that a substantial connection to the
state is required in addition to a single contract to uphold
personal jurisdiction. Tom Togs, Inc., 318 N.C. at 367, 348 S.E.2d
at 786 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478,
85 L. Ed. 2d 528, 545 (1985); McGee v. International Life Ins. Co.,
355 U.S. 220, 2 L. Ed. 2d 223 (1957); Goldman v. Parkland of
Dallas, Inc., 277 N.C. 223, 176 S.E.2d 784 (1970)). In Tom Togs,
Inc., the out of state defendants performed their obligations under
the contract in the forum state, a critical point in finding
personal jurisdiction. 318 N.C. at 367, 348 S.E.2d at 786-87. The
Court also considered the defendants made an offer to the plaintiff
whom defendants knew to be located in North Carolina, the plaintiffaccepted the offer in North Carolina, and the goods were
manufactured and shipped from this State.
This Court has ruled that the mere act of entering into a
contract with a forum resident . . . will not provide the necessary
minimum contacts with the forum state, especially when all the
elements of the defendants' performance . . . are to take place
outside the forum. Phoenix America Corp. v. Brissey, 46 N.C. App.
527, 532, 265 S.E.2d 476, 480 (1980) (citing Iowa Electric Light
and Power Co. v. Atlas Corp., 603 F.2d 1301 (8th Cir. 1979), cert.
denied,
445 U.S. 911, 63 L. Ed. 2d 327 (1980)
).
The contract's purpose was to invest in real estate ventures
located in Illinois. The agreement required defendants to perform
their obligations in Illinois, governed by Illinois law.
Defendants' only connection to North Carolina was plaintiffs'
limited liability company registered and located in North Carolina
that contracted with defendants to become an investor. Our Courts
require more than a single contact with an out of state defendant
to satisfy the due process requirements for personal jurisdiction.
Phoenix America Corp., 46 N.C. App. at 532, 265 S.E.2d at 480.
The dissenting opinion also cites New Bern Pool & Supply Co.
where personal jurisdiction was upheld despite the defendant never
having physically visited North Carolina. 94 N.C. App. 619, 381
S.E.2d 156. In that case, the plaintiff, a North Carolina
corporation, responded to an advertisement in a trade magazine
placed by the defendant, a New Jersey resident, for the sale of an
airplane. Id. at 621, 381 S.E.2d at 157. After consummating the
sale, the plaintiff experienced troubles with the plane and filedsuit. Id. This Court found personal jurisdiction in North
Carolina based on several factors: the defendant solicited the
sale of the airplane in a national trade magazine, made numerous
telephone calls and mailings to the plaintiff in North Carolina,
and directed plaintiff to forward funds drawn on a North Carolina
bank to New York. Id. at 625-26, 381 S.E.2d at 160. In addition,
the opinion noted that
[i]n terms of convenience to the parties . . .
repairs to the aircraft in question were
performed in North Carolina[,] . . . witnesses
to [the] repairs . . . are residents of North
Carolina, and FAA personnel who were potential
witnesses as a result of having inspected the
plane in North Carolina, were also residents
of North Carolina.
Id. at 625, 381 S.E.2d at 160.
The key distinctions between the case at bar and New Bern Pool
& Supply Co. are how the parties became acquainted and where the
post-contractual activities occurred. Defendants here never
visited North Carolina. They did not advertise directly to the
State or its citizens to solicit or maintain commercial interests
within North Carolina. The sales presentation occurred in Georgia.
The defendant in New Bern Pool & Supply Co. placed an advertisement
in a national trade magazine delivered to the plaintiff in North
Carolina for the sale of an airplane. 94 N.C. App. at 624, 381
S.E.2d at 159. This Court ruled that advertising in national
magazines alone is not determinative of personal jurisdiction.
Hankins v. Somers, 39 N.C. App. 617, 621, 251 S.E.2d 640, 643,
disc. rev. denied, 297 N.C. 300, 254 S.E.2d 920 (1979) (citing
International Shoe Co., 326 U.S. at 316, 90 L. Ed. at 102).
Defendants solicited business from a limited audience, in a livepresentation given in another state, and did not solicit plaintiffs
by placing an ad in a national magazine delivered in North
Carolina.
The dissenting opinion also cites New Bern Pool & Supply Co.
and its discussion on the convenience of the parties that where
the post-contractual activities occurred strengthens a finding of
personal jurisdiction. In New Bern Pool & Supply Co., witnesses to
the repairs of the faulty aircraft, the FAA inspectors, and the
repairs themselves were located and occurred in North Carolina. 94
N.C. App. at 625-26, 381 S.E.2d at 160. Here, defendants, the real
estate partnership, partnership documents and witnesses, the
investor's accountants, and the underlying investment property are
located in Illinois. Two of the three counts complained of by
plaintiffs, Breach of Fiduciary Duty and Breach of Contract, arise
from alleged activities, or a lack thereof, in Illinois.
Convenience of the parties mitigates for defendants. Plaintiffs'
assignments of error are overruled.
VI. Conclusion
Plaintiffs failed to show the trial court erred in granting
defendants' motions to dismiss for lack of personal jurisdiction.
The order of the trial court is affirmed.
Affirmed.
JUDGE MCGEE concurs.
JUDGE TIMMONS-GOODSON dissents.
TIMMONS-GOODSON, Judge dissenting.
I respectfully dissent from the majority's opinion which
affirms summary judgment in favor of defendants. The majority has established that defendants' activity
satisfies the statutory requirements of the jurisdictional
analysis. Thus, I focus this dissent on the question of whether
defendants have the minimum contacts with North Carolina necessary
to meet the requirements of due process. I find the cases of
Carson v. Brodin, 160 N.C. App. 366, 585 S.E.2d 491 (2003)
and
New
Bern Pool & Supply Co. v. Graubert, 94 N.C. App. 619, 381 S.E.2d
156 (1989),
aff'd, 326 N.C. 480, 390 S.E.2d 137 (1990), to be
instructive on the issue.
In
Carson, the plaintiffs were North Carolina residents who
decided to build a vacation home in Virginia. They entered into a
contract with the defendant, a Virginia resident, to construct the
home. The plaintiffs initiated contact with the defendant in
Virginia. The plaintiffs signed the initial construction contract
in Virginia. The defendant mailed a subsequent contract to the
plaintiffs in North Carolina, which they signed and mailed back to
the defendant in Virginia. The defendant visited the plaintiffs in
North Carolina two or three times to discuss the construction
project, he telephoned them in North Carolina on numerous
occasions, and sent numerous mailings to them in North Carolina.
The plaintiffs sued the defendant in North Carolina for breach of
contract, breach of warranty, and negligence, all relating to the
construction of their home in Virginia. The defendant challenged
North Carolina's jurisdiction over the matter, arguing that his
contacts in North Carolina were not sufficient to give the state
personal jurisdiction over him.
On appellate review, this Court held that [b]y negotiatingwithin the state and entering into a contract with North Carolina
residents, defendant purposefully availed himself of the privilege
of conducting activities within North Carolina with the benefits
and protection of its laws.
Carson, 160 N.C. App. at 372, 585
S.E.2d at 496 (citing
Hanson v. Denckla, 357 U.S. 235 (1958)).
Defendant's actions in contracting with North Carolina residents
establish minimum contacts for specific jurisdiction because the
actions are directly related to the basis of plaintiffs' claim.
Id. (citing
Fran's Pecans, Inc. v. Greene, 134 N.C. App. 110, 115,
516 S.E.2d 647, 651 (1999)). Because we have found minimum
contacts sufficient to establish specific jurisdiction, due process
is satisfied.
Id. at 372-73, 585 S.E.2d at 496.
In the case
sub judice, the evidence presented tends to show
that defendants corresponded with plaintiffs or plaintiffs'
attorneys in North Carolina via mail and telephone on numerous
occasions. The mail correspondence included the following: a
memorandum mailed by defendants to North Carolina soliciting
investments in the Carriage Park project; a subscription document
executed by plaintiffs in North Carolina and mailed to defendants
in Illinois; and a check issued by plaintiffs in North Carolina,
drawn on a North Carolina bank, and mailed to defendants in
Illinois. I submit that these mailings and telephone calls are
evidence of three factors in a minimum contacts analysis.
See New
Bern Pool & Supply Co., 94 N.C. App. at 624, 381 S.E.2d at 159
(The factors to be considered are (1) quantity of the contacts,
(2) nature and quality of the contacts, (3) the source and
connection of the cause of action to the contacts, (4) the interestof the forum state, and (5) convenience to the parties.) (citation
omitted).
The minimum contacts analysis is satisfied as follows: The
mailings and telephone calls demonstrate the quantity of the
contacts by demonstrating the volume of communication between
plaintiffs and defendants at the time of the transaction. The
communications demonstrate the nature and quality of the contacts
as evidence of a high-level transaction involving substantial
documentation and a sum of $100,000. Finally, the communications
demonstrate the source and connection of the cause of action to
the contacts as evidence that the transaction that is the subject
of these communications is the transaction that is in dispute in
this case.
The fourth factor, the interest of the forum state, is best
described by the following language from
New Bern Pool & Supply
Co.: The interest of the State of North Carolina in providing
consumer protection for its citizens and corporate entities and a
forum for the adjudication of controversies involving them is
substantial.
94 N.C. App. at 625, 381 S.E.2d at 160. This Court
should have an interest in providing a forum for plaintiffs to
resolve this controversy, particularly because it involves such a
large investment of $100,000.
With regard to the fifth factor, convenience of the parties,
we note that [t]here is almost always some hardship to the party
required to litigate away from home.
Byham v. House Corp., 265
N.C. 50, 60, 143 S.E.2d 225, 234 (1965). However, this state has
a greater interest in providing a convenient forum for its citizens to seek redress for injuries.
Inspirational Network, Inc. v.
Combs, 131 N.C. App. 231, 241, 506 S.E.2d 754, 761 (1998). In
light of the powerful public interest of [North Carolina] in
protecting its citizens against out-of-state tortfeasors, the court
has more readily found assertions of jurisdiction constitutional.
Id. (citing
Ciba-Geigy Corp. v. Barnett, 76 N.C. App. 605, 608, 334
S.E.2d 91, 93 (1985)).
I concede that the case
sub judice is distinguished from
Carson by the fact that defendant did not travel to North Carolina
as the defendant in
Carson did. However, I do not consider this to
be a determinative factor in awarding personal jurisdiction. In
New Bern Pool & Supply Co., this Court asserted personal
jurisdiction over a defendant who did not travel to North Carolina
in connection with the transaction at issue. 94 N.C. App. 619, 381
S.E.2d 156.
In
New Bern Pool & Supply Co., the plaintiff was a resident of
Craven County, North Carolina, who responded to an advertisement
for a Beechcraft Baron airplane that the defendant, a New Jersey
resident, placed in an aviation trade magazine. After their
initial telephone conversation, the defendant mailed to the
plaintiff photographs and specifications for the airplane. The
plaintiff mailed to the defendant a check for $5,000 in exchange
for the defendant's promise not to sell the airplane until the
plaintiff had the opportunity to travel to New York to examine and
inspect the airplane. The parties also negotiated the terms of a
potential deal before the plaintiff went to New York.
The plaintiff flew to New York, examined and inspected theairplane, and closed the deal with the defendant. On that day, the
plaintiff twice asked the defendant to give him the log books for
the airplane. The defendant did not give the plaintiff the log
books. The following morning, as the plaintiff prepared to return
to North Carolina, he again asked the defendant for the log books.
The defendant gave the log books to the plaintiff just prior to his
departure. The plaintiff flew the Beechcraft Baron airplane to
North Carolina. During the flight home, the plaintiff discovered
that some of the navigation aids aboard the airplane were not
functioning properly. The plaintiff later discovered that the
airplane was overdue for an inspection.
The plaintiff filed a complaint against the defendant, which
the defendant sought to have dismissed on summary judgment for lack
of personal and subject matter jurisdiction. The trial court
denied the defendant's motion for summary judgment, and this Court
found no error in the trial court's judgment. This Court held as
follows:
Defendant's intentional acts in this case
are such that defendant can be said to have
purposely availed himself of the privilege of
doing business in the State of North Carolina
to the extent that defendant should have
reasonably anticipated being haled into court
in this State. We conclude that defendant had
sufficient minimum contacts with the State of
North Carolina so as to allow the trial court
to exert personal jurisdiction over him and
that the maintenance of this action in North
Carolina does not offend traditional notions
of fair play and substantial justice.
94 N.C. App. at 626, 381 S.E.2d at 160. In the case
sub judice, as
in
New Bern Pool & Supply Co., the totality of the circumstances
provides an adequate basis for personal jurisdiction, even thoughdefendants did not travel to North Carolina.
I am satisfied, pursuant to
Carson and
New Bern Pool & Supply
Co., that defendants' actions establish minimum contacts in North
Carolina to establish jurisdiction without offending our
traditional conception of fair play and substantial justice.
International Shoe Co. v. Washington, 326 U.S. 310, 326 (1945).
Thus, I would reverse the order for summary judgment and remand to
the trial court.
*** Converted from WordPerfect ***