D.A. WESLEY GROUP, INC.,
Plaintiff,
v
.
Durham County
No. 02 CVS 4653
WINDBRELLA PRODUCTS CORPORATION,
DEFENDANT.
Harriss & Marion, P.L.L.C., by Joseph W. Marion, for
plaintiff-appellee.
Bennett & Guthrie, P.L.L.C., by Richard V. Bennett and Roberta
B. King, for defendant-appellant.
THORNBURG, Judge.
Defendant Windbrella Products Corporation appeals the trial
court's denial of its motion to dismiss for lack of personal
jurisdiction. The evidence presented showed that plaintiff is a
North Carolina corporation with its principal place of business in
Durham. Defendant is a New York corporation with its headquarters
in Jericho, New York. Defendant is engaged in the manufacture and
sale of wind-proof umbrellas. On or about 17 March 1997, defendant
and plaintiff entered into a contract whereby defendant appointed
plaintiff as its sales representative. The contract specified that
plaintiff would represent defendant in the sale of wind-proofumbrellas to Hammacher Schlemmer (“Hammacher”), a home goods retail
operation.
The contract contained the following relevant provisions:
[Defendant] shall, at no expense to
[plaintiff], supply to [plaintiff] catalogs,
price lists, brochures and other literature in
such quantities as [defendant] deem[s]
reasonable. Samples, will be billed on memo,
payable in 90 days from date of shipment.
In obtaining orders for [defendant's]
products, [plaintiff] shall quote prices and
terms fixed by [defendant]. [Plaintiff] shall
forward all orders promptly to [defendant] and
each order shall be subject to [defendant's]
acceptance. [Defendant] reserve[s] the right
to withhold shipments to any account for any
reason with just cause.
All payments shall be made directly to
[defendant]. Neither [plaintiff] nor
[plaintiff's] agents or employees shall
collect any moneys from the accounts without
specific written authorization. [Plaintiff]
shall not be responsible for payment or
collection of any accounts, but when requested
by [defendant], [plaintiff] shall endeavor to
make collection from specific delinquent
accounts.
[Plaintiff's] commission shall be paid to
[plaintiff], based on net billings, on all
orders received by [defendant] during the term
and under the terms of this agreement. . . .
. . . .
[Plaintiff] shall pay all costs of conducting
[plaintiff's] operations hereunder, including,
but not limited to, commissions or
compensation to other [sic] employed by you.
Plaintiff brought suit for breach of contract and alleged that
defendant has made regular and continuous sales to Hammacher of its
products, but has only sporadically made small commission payments
due under the agreement to plaintiff. Defendant moved to dismiss the suit for lack of personal
jurisdiction pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(2). We
first note that an adverse ruling as to a Rule 12(b)(2) motion to
dismiss for lack of personal jurisdiction, which “raises a due
process question of whether his contacts within the forum state
were sufficient to justify the court's jurisdictional power over
him,” is immediately appealable under N.C. Gen. Stat. § 1-277(b).
Berger v. Berger, 67 N.C. App. 591, 595, 313 S.E.2d 825, 829, disc.
review denied, 311 N.C. 303, 317 S.E.2d 678 (1984).
“The test for establishing in personam personal jurisdiction
over a foreign corporation is two-fold: first, 'Whether North
Carolina's 'long-arm' statute permits courts in this jurisdiction
to entertain the action;' and second, 'whether exercise of this
jurisdictional power comports with due process of law.'” Fran's
Pecans, Inc. v. Greene, 134 N.C. App. 110, 112, 516 S.E.2d 647, 649
(1999), (quoting ETR Corporation v. Wilson Welding Service, 96 N.C.
App. 666, 668, 386 S.E.2d 766, 767 (1990)). Defendant challenges
the trial court's ruling on both prongs of this test.
Either party may request that the trial court make findings
regarding personal jurisdiction, but in the absence of such a
request, findings are not required. See J.M. Thompson Co. v. Doral
Manufacturing Co., 72 N.C. App. 419, 324 S.E.2d 909, disc. review
denied, 313 N.C. 602, 330 S.E.2d 611 (1985); Trust Co. v. Eways, 46
N.C. App. 466, 265 S.E.2d 637 (1980). In the case before us, the
trial court's order contained no findings, but there is nothing in
the record to show that either party requested them. Where nofindings are made, proper findings are presumed, and our role on
appeal is to review the record for competent evidence to support
these presumed findings. Sherwood v. Sherwood, 29 N.C. App. 112,
223 S.E.2d 509 (1976).
Defendant contends that North Carolina's long-arm statute does
not permit the exercise of in personam jurisdiction over them. Our
courts have held that our long-arm statute should be liberally
construed in favor of finding jurisdiction. Starco, Inc. v. AMG
Bonding and Ins. Services, 124 N.C. App. 332, 338, 477 S.E.2d 211,
216 (1996).
The long-arm statute provides for in personam jurisdiction
over a party in an action that “[a]rises out of a promise, made
anywhere to the plaintiff . . . by the defendant . . . to pay for
services to be performed in this State by the plaintiff[.]” N.C.
Gen. Stat. § 1-75.4(5)(a) (2003). The contract out of which this
action arises is a promise by defendant to pay for services to be
performed in this state by the plaintiff. Plaintiff was to
represent defendant in the sale of certain products to Hammacher.
To this end, defendant provided plaintiff with product information,
which was sent to plaintiff's office in Durham. Plaintiff used
this information to sell defendant's umbrellas to Hammacher. By
affidavit, plaintiff showed that most of these services were
carried out from its office in Durham. Pursuant to the contract,
defendant agreed to pay plaintiff a commission based on the amount
of sales made by defendant to Hammacher. In effect, defendant
agreed to pay for services, the establishment of a salesrelationship between defendant and Hammacher, which plaintiff
performed from its office in Durham. These facts bring this case
squarely within the scope of the quoted statute. We affirm the
trial court's ruling that the exercise of in personam jurisdiction
over defendant met the requirements of North Carolina's long-arm
statute.
When in personam jurisdiction is alleged to exist under the
North Carolina long-arm statute, the court must decide “whether the
defendant has the minimum contacts with North Carolina necessary to
meet the requirements of due process.” Replacements, Ltd. v.
Midwesterling, 133 N.C. App. 139, 143, 515 S.E.2d 46, 49 (1999).
“Due process requires defendant to have sufficient minimum contacts
with the forum state before being hailed into court.” First Union
Nat'l Bank of Del. v. Bankers Wholesale Mortgage, LLC, 153 N.C.
App. 248, 252, 570 S.E.2d 217, 221 (2002) (citing World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 62 L. Ed. 2d 490,
501 (1980)). Minimum contacts must be such that the exercise of in
personam jurisdiction 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)).
When our courts exercise personal jurisdiction in a suit
arising out of that party's contact within the state, we are
exercising specific jurisdiction. Fran's Pecans, 134 N.C. App. at
114, 516 S.E.2d at 650. In establishing specific jurisdiction, the
court looks at the “relationship among the parties, the cause ofaction, and the forum state” to determine if minimum contacts are
established. ETR Corporation v. Wilson Welding Service, 96 N.C.
App. 666, 669, 386 S.E.2d 766, 768 (1990).
The test for minimum contacts is not mechanical, but instead
requires individual consideration of the facts in each case.
Fran's Pecans, 134 N.C. App. at 114, 516 S.E.2d at 650. “The
factors to consider for minimum contacts include: (1) the quantity
of the contacts; (2) the quality and nature of the contacts; (3)
the source and connection of the cause of action to the contacts;
(4) the interests of the forum state; and (5) the convenience to
the parties.” Id.
“Although 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,
nevertheless, a single contract may be a sufficient basis for the
exercise of in personam jurisdiction if it has a substantial
connection with this State.” Tom Togs, Inc. v. Ben Elias
Industries Corp., 318 N.C. 361, 367, 348 S.E.2d 782, 786 (1986)
(emphasis in original). In Tom Togs, the court found a substantial
connection to this forum because (1) defendant contacted plaintiff,
whom defendant knew to be located in North Carolina, thus the
contract for the manufacture of shirts was made in North Carolina;
(2) defendant was told the shirts would be cut in North Carolina,
and defendant agreed to send its personal labels to plaintiff in
North Carolina to be attached, thus defendant was aware that the
contract would be performed in this state; (3) shirts weremanufactured and shipped from this state; and (4) after defendant
became dissatisfied with the shirts, it returned them to this
state. Id. at 367, 348 S.E.2d at 786-87.
In the instant case, defendant contacted plaintiff to
establish the relationship between defendant and Hammacher. The
contract out of which this action arises, was signed by defendant
and mailed to plaintiff in Durham to sign. “For a contract to be
made in North Carolina, the final act necessary to make it a
binding obligation must be done here.” Realty Corp. v. Savings &
Loan Assoc., 40 N.C. App. 675, 677, 253 S.E.2d 621, 624, disc.
review denied, 297 N.C. 612, 257 S.E.2d 435 (1979). Thus, the
contract was made in North Carolina. Defendant agreed to send its
“catalogs, price lists, brochures and other literature,” and did in
fact send such items, to plaintiff in this state. Defendant admits
that it has received orders and made sales to Hammacher since
entering into the contract with plaintiff. Plaintiff has
testified, in an affidavit, that all services performed in
establishing the relationship with Hammacher were performed by its
employee at its office in Durham, North Carolina. Defendant
obligated itself to make payments to plaintiff in North Carolina
and actually did make some of the required payments.
While defendant focuses on the insubstantial nature of its
contacts with this state otherwise, we conclude that the contract
between defendant and plaintiff had a “substantial connection” with
this state. The instant case is similar to the Tom Togs case, in
that the evidence before the trial court tended to show that (1)the contract for services was made in this state; (2) defendant's
actions, in sending its sales literature, show it was aware
services would be performed in this state; (3) services were in
fact performed in this state; and (4) in response to those services
being performed, defendant sent payments to plaintiff in this
state.
Other factors also support the conclusion that jurisdiction is
proper in this case. Plaintiff is located in North Carolina, its
sole employee is located in North Carolina and plaintiff performs
the vast majority of its activities in North Carolina. “North
Carolina has a manifest interest in providing its residents with a
convenient forum for addressing injuries inflicted by parties out
of state.” Fran's Pecans, 134 N.C. App. at 115, 516 S.E.2d at 651.
Defendant has not shown any reason why litigation would be unfair
in North Carolina. Nor has defendant shown any disparity between
itself and plaintiff that would make litigation in North Carolina
unfair. Further, in making an offer to plaintiff to enter into a
contract made in this state and having a substantial connection
with it, defendant purposefully availed itself of the protection
and benefits of our laws. After examining the relationship among
the defendant, the forum and the cause of action, we find
sufficient minimum contacts to justify the exercise of personal
jurisdiction over the defendant in this case without violating the
due process clause of the fourteenth amendment to the United States
Constitution. U.S. Const. amend. XIV, § 1. We affirm the trial court's order denying defendant's motion
to dismiss due to lack of personal jurisdiction.
Affirmed.
Judges MARTIN and HUNTER concur.
Report per Rule 30(e).
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