An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced ure.

NO. COA03-280

NORTH CAROLINA COURT OF APPEALS

Filed: 2 March 2004

JENNIFER A. PRICE,
    Plaintiff

v .                                 Wake County
                                    No. 02 CVS 004005
HAGAR FINANCIAL CORPORATION,
THOMAS ANDREW HAGAR, BRENT
ATWOOD, NOOSHIN MOHAMMADI
McKINNY, THOMAS L. HAGAR,
MARGARET BRANNEN HAGAR and
HAGAR DIVERSIFIED HOLDINGS,
    Defendants

    Appeal by plaintiff from an order entered 20 August 2002 by Judge Narley L. Cashwell in Wake County Superior Court. Heard in the Court of Appeals 3 December 2003.

    Jennifer A. Price, plaintiff-appellant, pro se.

    Rolinski, Terenzio & Suarez, L.L.P., by Danielle M. Espinet; and Kimberly A. Wallis, for plaintiff-appellant.

    Davis & Harwell, P.A., by Mark H. Hoppe, for defendant- appellees Thomas L. Hagar, Margaret Brannen Hagar, and Hagar Diversified Holdings.

    HUNTER, Judge.

    Jennifer A. Price (“plaintiff”) appeals an order dismissing her complaint as to defendants Thomas L. Hagar (“defendant Thomas”), Margaret B. Hagar (“defendant Margaret”), and Hagar Diversified Holdings (“defendant HDH”) (collectively “defendants”) on the ground of lack of personal jurisdiction. For the reasons stated herein, we affirm the trial court's order with respect todefendants Thomas and Margaret, but reverse the order with respect to defendant HDH.
    Defendants Thomas and Margaret, residents and citizens of Florida, are the parents of Thomas Andrew Hagar (“Andrew”). Andrew is the president of both Hagar Financial Corporation (“HFC”) and defendant HDH, a corporation that holds an ownership interest in HFC. HFC is a Georgia corporation that is registered and does business in North Carolina.
    On or about 14 August 2000, plaintiff entered into an employment contract with HFC in North Carolina. She worked in the company's Raleigh, North Carolina branch office until her termination on 23 March 2001. On 28 March 2002, plaintiff filed an unverified complaint asserting claims against HFC, Andrew, Brent A. Atwood (HFC-Raleigh branch manager), Nooshin M. McKinney (HFC vice- president and compliance manager), and defendants alleging breach of an employment contract, fraud, deceit, misrepresentation, negligent misrepresentation, libel, slander, wrongful discharge, intentional infliction of emotional distress, civil conspiracy, negligent failure to supervise, and permanent injunctive relief. Defendant Margaret was named as a party because plaintiff alleged that defendant Margaret had an ownership interest in HFC. As to HFC, plaintiff also alleged that HFC was the alter ego of defendants HDH and Thomas; thus, plaintiff asked the trial court to disregard the corporate entity.
    On 20 May 2002, Andrew, HFC, and defendants filed a motion to dismiss plaintiff's complaint on the grounds of lack of personaljurisdiction and service of process.   (See footnote 1)  A hearing on the motion was held on 9 August 2002, during which the trial court considered the record in the case, the arguments of counsel, and the sworn affidavits of Andrew and defendants Thomas and Margaret. By order filed 20 August 2002, the trial court denied defendants' motion with respect to Andrew and HFC on both grounds. However, the trial court granted the motion to dismiss plaintiff's complaint as to defendants on the ground of lack of personal jurisdiction. Plaintiff appeals. Additional facts pertinent to this appeal are included as necessary in analyzing plaintiff's arguments.
    Both assigned errors raised by plaintiff take issue with the trial court's order granting defendants' motion to dismiss plaintiff's complaint on the ground of lack of personal jurisdiction. At the outset, we recognize that:
            Under North Carolina case law a two-step inquiry and analysis is necessary to determine whether a non-resident defendant is subject to the in personam jurisdiction of our courts: (1) does the transaction which gave rise to the underlying action fall within the language of the State's “long-arm” statute; and (2) if so, does the decision to exercise personal jurisdiction violate the due process clause of the fourteenth amendment to the United States Constitution.
Combustion Sys. Sales v. Hatfield Htg. and Air Conditioning, 102 N.C. App. 751, 754, 403 S.E.2d 600, 602 (1991). “In determining whether the 'long-arm' statute [N.C. Gen. Stat. § 1-75.4 (2003)] permits our courts to entertain an action against a particulardefendant, the statute should be liberally construed in favor of finding jurisdiction.” Strother v. Strother, 120 N.C. App. 393, 395, 462 S.E.2d 542, 543 (1995). Once it has been determined that N.C. Gen. Stat. § 1-75.4 permits the extension of personal jurisdiction, due process demands the courts to ascertain “whether the defendant has purposefully established minimum contacts with the forum state so that he should reasonably anticipate being haled into court in that forum.” Buck v. Heavner, 93 N.C. App. 142, 145, 377 S.E.2d 75, 77 (1989).
    Additionally, we note that the trial court's order granting defendants' motion to dismiss in the case sub judice contained no findings of fact. “Where no findings are made, proper findings are presumed, and [the] role [of the appellate court] is to review the record for competent evidence to support these presumed findings.” Bruggeman v. Meditrust Acquisition Co., 138 N.C. App. 612, 615, 532 S.E.2d 215, 217-18 (2000). Other than plaintiff's unverified complaint, the only evidence of the presence or lack of personal jurisdiction were the sworn affidavits of Andrew and defendants Thomas and Margaret. In such an instance, this Court has held that
        “[w]here unverified allegations in the complaint meet plaintiff's 'initial burden of proving the existence of jurisdiction . . . and defendant[s] d[o] not contradict plaintiff's allegations in their sworn affidavit,' such allegations are accepted as true and deemed controlling.” However, where . . . defendants submit some form of evidence to counter plaintiff['s] allegations, those allegations can no longer be taken as true or controlling and plaintiff[] cannot rest on the allegations of the complaint. . . . In such a case, the plaintiff's burden of establishing prima facie that grounds for personaljurisdiction exist can still be satisfied if some form of evidence in the record supports the exercise of personal jurisdiction. . . . Thus, in evaluating [an] appeal . . . , we look to the uncontroverted allegations in the complaint and the uncontroverted facts in the sworn affidavit for evidence supporting the presumed findings of the trial court.
Bruggeman
, 138 N.C. App. at 615-16, 532 S.E.2d at 218 (citations omitted). The trial court's presumed findings are conclusive on appeal if based upon competent evidence of record, even if such evidence is controverted. See Olivetti Corp. v. Ames Business Systems, Inc., 319 N.C. 534, 541, 356 S.E.2d 578, 582 (1987).

I.

    Plaintiff argues the trial court erred in not exercising personal jurisdiction over defendants Thomas and Margaret. Specifically, plaintiff contends the trial court erred in not finding that defendants Thomas and Margaret (1) were subject to North Carolina's long-arm statute because they are the alter ego of defendant HDH and/or HFC, (2) established sufficient minimum contacts with North Carolina so as not to offend due process by conducting substantial activities through a North Carolina corporation, and (3) were involved in an uncontroverted conspiracy which supports the exercise of personal jurisdiction over these defendants. Based on the trial court's order, it is presumed that the court found insufficient evidence to support each of plaintiff's contentions. Therefore, we must determine whether there was competent evidence to support the trial court's presumed findings.
1. Alter Ego
    Plaintiff contends that, under North Carolina's long-arm statute, the contacts that defendants Thomas and Margaret had with North Carolina as the alter ego of defendant HDH and/or HFC should have resulted in the trial court piercing the corporate veil and asserting personal jurisdiction over them. However, plaintiff's complaint fails to contain any allegations asserting that (1) Margaret is the alter ego of HFC, or (2) either defendant is the alter ego of defendant HDH. Since plaintiff makes these allegations for the first time on appeal, they are not properly before this Court. See N.C.R. App. P. 10. Thus, our inquiry is limited to whether defendant Thomas' contacts with North Carolina as the alleged alter ego of HFC should have subjected him to this state's long-arm statute.
    Specifically, plaintiff argues that since HFC was merely an instrument of defendant Thomas, the trial court could have pierced the corporate veil and exercised jurisdiction over defendant under five separate provisions of North Carolina's long-arm statute. See N.C. Gen. Stat. §§ 1-75.4(1)(d), (3), (4)(a), (5)(a), and (5)(b).
            It is well recognized that courts will disregard the corporate form or “pierce the corporate veil,” and extend liability for corporate obligations beyond the confines of a corporation's separate entity, whenever necessary to prevent fraud or to achieve equity. In North Carolina, what has been commonly referred to as the “instrumentality rule,” forms the basis for disregarding the corporate entity or “piercing the corporate veil.” The decisions of this Court have stated the rule as follows: “'[An entity] which exercises actual control over another, operating the latter as a mere instrumentality or tool, is liable for the torts of the corporation thus controlled. In suchinstances, the separate identities . . . may be disregarded.'”

Glenn v. Wagner, 313 N.C. 450, 454, 329 S.E.2d 326, 330 (1985) (citations omitted).
    Here, plaintiff's unverified complaint alleged that “Thomas Hagar actually [made] the policy and business decisions for HFC on a substantial and continuous basis.” One of three enumerated elements our Supreme Court recognizes as supporting an attack on a separate entity under the instrumentality rule is whether that entity is in “'[c]ontrol, not mere majority or complete stock control, but complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own[.]'” Id. at 455, 329 S.E.2d at 330 (citation omitted). While plaintiff's allegation initially met the burden of proving this element, defendant Thomas' subsequently filed sworn affidavit countered that allegation as follows: “I am not now, nor have I ever been, in control of [HFC], and I have never 'regularly, continuously and substantially' taken part in the decision-making and supervision of the operation of [HFC] as is alleged in the Complaint.” Defendant Thomas' sworn statement prevented the trial court from simply taking plaintiff's allegation as true, and thus, provided competent evidence to support the trial court's presumed finding that defendant Thomas was not the alter ego of HFC.
    We further note that, absent defendant Thomas being deemed the alter ego of HFC, the presumed findings of fact do not otherwiseestablish he had sufficient contacts with North Carolina to subject him to North Carolina's jurisdiction under the long-arm statute. In addition to the evidence previously mentioned, defendant Thomas' affidavit also provided that he (1) has been a resident and citizen of Florida for sixty-three years, (2) was never a citizen or resident of North Carolina, (3) never owned real property in North Carolina, and (4) was never engaged in any substantial activity within North Carolina. This evidence, although controverted by the allegations in plaintiff's unverified complaint, provided competent evidence upon which the trial court could conclude (and plaintiff's complaint appears to indirectly acknowledge) that defendant Thomas lacked sufficient contacts with North Carolina for the long-arm statute to apply to him in the absence of defendant Thomas being deemed the alter ego of HFC.
2. Minimum Contacts

    Next, plaintiff contends defendants Thomas and Margaret established sufficient minimum contacts with North Carolina by conducting substantial activities through a North Carolina corporation so as not to offend due process. However, as stated earlier, a consideration of due process is only necessary after it has been determined that North Carolina's long-arm statute permits the extension of personal jurisdiction. See Buck, 93 N.C. App. at 145, 377 S.E.2d at 77. Having previously concluded the long-arm statute does not confer jurisdiction over these defendants, we need not consider the sufficiency of their minimum contacts with this state.
3. Conspiracy Theory

    Plaintiff further contends defendants Thomas and Margaret were involved in an uncontroverted conspiracy that allows the trial court to exercise personal jurisdiction over them. In support of her argument, plaintiff cites Gemini Enterprises, Inc. v. WFMY Television Corp., 470 F. Supp. 559 (M.D.N.C. 1979), a case in which the United States District Court for the Middle District of North Carolina concluded that certain undisputed facts provided the basis for exercising personal jurisdiction over a defendant using the conspiracy theory of personal jurisdiction. Gemini Enterprises, Inc. provides that this theory can be fairly stated as follows: “[W]hile the mere presence of a conspirator within the forum state is not sufficient to permit personal jurisdiction over co-conspirators, certain additional connections between the conspiracy and the forum state will support exercise of jurisdiction over co-conspirators.” Id. at 564. However, this is a federal case that has not been cited by any North Carolina state court. Moreover, we have found no North Carolina case law recognizing a conspiracy theory argument as a ground for establishing personal jurisdiction over a party and thus, decline to do so in this case. See Stetser v. TAP Pharm. Products, ___ N.C. App. ___, ___ S.E.2d ___ (No. COA03-180 filed 3 February 2004).
    Accordingly, the trial court's presumed findings supporting its lack of personal jurisdiction over defendant's Thomas and Margaret are deemed conclusive on appeal.
II.

    Finally, plaintiff argues the trial court erred in not exercising personal jurisdiction over defendant HDH. As to this argument, we note that in defendants' motion to dismiss, they only argued that all claims against defendant HDH be dismissed due to insufficient service of process. Defendants never denied the following allegations in plaintiff's complaint that the trial court had personal jurisdiction over defendant HDH:
            11.    Defendant [HDH] is a Corporation which, at all times relevant to these proceedings and upon information and belief, held an ownership interest in HFC. In addition, HDH was paying the salary of Plaintiff Jennifer Price. Ms. Price[']s W2s were issued from HDH, rather than HFC.

            . . . .

            96.    The corporate form of HFC must be disregarded. HFC is actually controlled by [HDH], with HDH paying the salary of the Plaintiff, all bills of HFC going to HDH . . . .

            97.    Upon information and belief, HFC is in fact the alter ego of HDH . . . . Because HFC is a mere instrumentality and tool of . . . HDH . . . , having no separate mind, will or existence of its own, [HDH is] also liable for the torts HFC is liable for.

These allegations were also not disputed in the affidavits submitted with defendants' motion to dismiss. Since defendants offered no evidence to counter plaintiff's allegations, these uncontroverted allegations establish the court's personal jurisdiction over defendant HDH and “'are accepted as true and deemed controlling.'” Bruggeman, 138 N.C. App. at 615, 532 S.E.2d at 218 (citation omitted). Therefore, the trial court erred indismissing plaintiff's action against defendant HDH for lack of personal jurisdiction.
    In conclusion, we affirm the trial court's dismissal of the claims against defendants Thomas and Margaret, but reverse the dismissal of the claims against defendant HDH.
    Affirmed in part; reversed in part.
    Judges McGEE and GEER concur.
    Report per Rule 30(e).


Footnote: 1
     Service of process was subsequently effected on those defendants between 6 July 2002 and 15 July 2002.

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