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BANC OF AMERICA SECURITIES LLC, Plaintiff, v. EVERGREEN
INTERNATIONAL AVIATION, INC.; EVERGREEN INTERNATIONAL AIRLINES,
INC.; EVERGREEN AGRICULTURAL ENTERPRISES, INC.; EVERGREEN AIR
CENTER, INC.; EVERGREEN AIRCRAFT SALES & LEASING CO.; EVERGREEN
AVIATION GROUND LOGISTICS ENTERPRISE, INC.; EVERGREEN
HELICOPTERS, INC.; QUALITY AVIATION SERVICES, INC., Defendants
1. Appeal and Error--appealability--interlocutory order--jurisdiction--minimum
Although the order denying defendants' motion to dismiss based on lack of personal jurisdiction is an interlocutory order, defendants' appeal of the trial court's N.C.G.S. § 1A-1, Rule 12(b)(2) decision is proper under N.C.G.S. § 1-277(b) because the appeal involves minimum contacts questions.
2. Jurisdiction--personal--minimum contacts--motion to dismiss
The trial court did not err in a breach of contract and quantum meruit case by denying the nonresident defendants' motion to dismiss under N.C.G.S. § 1A-1, Rule 12(b)(2) based on lack of personal jurisdiction, because: (1) defendants solicited plaintiff company in North Carolina to perform services for it, plaintiff agreed to do so in North Carolina, and the contracts were substantially performed in North Carolina; (2) the trial court could properly conclude that defendants purposefully acted in a manner so as to avail themselves of the privilege of conducting activities within the State of North Carolina and thus invoked the benefits and protections of North Carolina laws; (3) although the parties chose New York law to apply to any dispute, choice of law clauses are not determinative of personal jurisdiction even though they express the intention of the parties and are a factor in determining whether minimum contacts exist and due process was met; (4) the record does not indicate that any one state would be more convenient to all the parties and witnesses than another; (5) it cannot be said that the factors regarding this state's interest and the convenience to the parties favor one party over the other to the extent that subjecting defendants to the jurisdiction of North Carolina's courts would be unfair; (6) once the first prong of purposeful minimum contacts is satisfied, defendant bears a heavy burden in escaping the exercise of jurisdiction based on other factors; (7) the inconclusive nature of additional factors in this case do not necessarily override the trial court's presumed finding that defendants had sufficient minimum contacts with North Carolina; and (8) since each defendant was a party to at least one of the three contracts, the North Carolina judicial system's exercise of specific personal jurisdiction is appropriate over each defendant.
Helms, Mulliss & Wicker, P.L.L.C., by Peter J. Covington and
Robert A. Muckenfuss, for plaintiff-appellee.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by James T. Williams, Jr., Jennifer K. Van Zant, and John S. Buford, for defendants-appellants.
The sole issue to be decided on appeal is whether the trial court erred in denying defendants' motion to dismiss under N.C.R. Civ. P. 12(b)(2) for lack of personal jurisdiction. Because we have concluded that competent evidence supports the trial court's determination that defendants have sufficient minimum contacts with North Carolina to meet the requirements of due process, we affirm.
By describing the various tasks actually performed in North
Carolina, Mr. Brechnitz' affidavit also provided evidence that the
Group performed the work required under the July and October
contracts primarily in North Carolina.
(See footnote 3)
We believe that this evidence parallels the evidence found
sufficient in Tom Togs. BAS' evidence indicates that defendants
solicited the Group in North Carolina to perform services for it,
BAS agreed to do so in North Carolina, and the contracts were
substantially performed in North Carolina. As this Court has
previously held: "Which party initiates the contact is taken to be
a critical factor in assessing whether a nonresident defendant has
made 'purposeful availment' [of the privilege of conducting
activities within the forum State]." CFA Med., Inc. v. Burkhalter,
95 N.C. App. 391, 395, 383 S.E.2d 214, 216 (1989). See also
Inspirational Network, 131 N.C. App. at 241, 506 S.E.2d at 761 (by
"initiat[ing] and voluntarily enter[ing] into a contractual
arrangement with [plaintiff], a North Carolina based corporation,"
defendant purposefully availed itself of the privileges of
conducting business in North Carolina).
Defendants argue that their evidence establishes that they did not solicit the Group, the contracts were not negotiated or entered into in North Carolina, and it did not expect for the contract work to be performed in North Carolina. (See footnote 4) Because we are required topresume that the trial judge made findings of fact supportive of its order, we must presume that the judge found plaintiff's evidence more credible and gave it greater weight. Under the applicable standard of review, we are not free on appeal to reach a different resolution of the conflicting evidence.
Since plaintiff's evidence in this case directly parallels the evidence found sufficient in Tom Togs, it necessarily meets the requirement that the contract at issue have a "substantial connection with this State." Tom Togs, 318 N.C. at 367, 348 S.E.2d at 786. Accordingly, the trial court could properly conclude that defendants "purposefully acted in a manner so as to avail [themselves] of the 'privilege of conducting activities' within the State of North Carolina and thus invoked 'the benefits and protections of [the North Carolina] laws.'" Liberty Fin. Co. v. North Augusta Computer Store, Inc., 100 N.C. App. 279, 285, 395 S.E.2d 709, 712 (1990) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 1298, 78 S. Ct. 1228, 1240 (1958)) (holding that when the defendant entered its order for computer products with a North Carolina company, it invoked the benefits and protections of North Carolina laws). See also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473, 85 L. Ed. 2d 528, 541, 105 S. Ct.2174, 2183 (1985) ("[W]ith respect to interstate contractual obligations, we have emphasized that parties who reach out beyond one state and create continuing relationships and obligations with citizens of another state are subject to regulation and sanctions in the other State for the consequences of their activities." (internal quotation marks omitted)); Climatological Consulting Corp. v. Trattner, 105 N.C. App. 669, 674, 414 S.E.2d 382, 384-85 (holding that the evidence was sufficient to establish a substantial connection with this State when the defendant initially contacted plaintiff to engage its services, knowing that the majority of plaintiff's services would be performed in North Carolina, and when 80% of the services were in fact performed in this State), disc. review denied, 332 N.C. 343, 421 S.E.2d 145 (1992).
Even when the trial court concludes that a defendant has "purposefully established minimum contacts within the forum State," the court must also consider those contacts "in light of other factors to determine whether the assertion of personal jurisdiction would comport with 'fair play and substantial justice.'" Burger King, 471 U.S. at 476, 85 L. Ed. 2d at 543, 105 S. Ct. at 2184 (quoting Int'l Shoe, 326 U.S. at 320, 90 L. Ed. at 104, 66 S. Ct. at 160). In making this determination, the North Carolina appellate courts have considered (1) the interest of North Carolinaand (2) the convenience of the forum to the parties. Replacements, 133 N.C. App. at 143, 515 S.E.2d at 49. See also Burger King, 471 U.S. at 477, 85 L. Ed. 2d at 543, 105 S. Ct. at 2185 (noting that courts should consider "'the forum State's interest in adjudicating the dispute'" and "'the plaintiff's interest in obtaining convenient and effective relief'" (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 62 L. Ed. 2d 490, 498, 100 S. Ct. 559, 564 (1980))).
With respect to North Carolina's interest, Tom Togs establishes this State's interest in providing a forum for resolution of conflicts arising in North Carolina. Tom Togs, 318 N.C. at 367, 348 S.E.2d at 787. In contrast to Tom Togs, 318 N.C. at 367-68, 348 S.E.2d at 787, however, the parties in this case provided that New York law rather than North Carolina law would apply to any dispute. This Court has held that "[w]hile 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." Tejal Vyas, LLC v. Carriage Park, Ltd. P'ship, 166 N.C. App. 34, 41, 600 S.E.2d 881, 887 (2004), aff'd per curiam, 359 N.C. 315, __ S.E.2d __, 2005 N.C. LEXIS 200 (NC Mar. 4, 2005). This factor does not, therefore, favor one party over the other. With respect to the convenience to the parties, the evidence is also conflicting. Of course, engaging in litigation in North Carolina would not be convenient for defendants' employees located in Oregon, but, by the same token, litigation in another state would not be convenient for plaintiff's witnesses. Mr. Wahlberg's affidavit suggests that non-party individuals located in New York, California, Illinois, Connecticut, and the District of Columbia "would possess information relevant to this litigation," including documents. Mr. Brechnitz' affidavit, however, states that many of these individuals would not be necessary or critical witnesses in this case. We must presume that the trial court accepted Mr. Brechnitz' assertions. Regardless, it is apparent that this factor is inconclusive. The record does not indicate that any one State would be more convenient to all of the parties and witnesses than another. See Climatological Consulting Corp., 105 N.C. App. at 675, 414 S.E.2d at 385 (holding that although three material witnesses were located in Washington, D.C., "this fact is counterbalanced by the fact that plaintiff's materials and offices are located here[;] North Carolina is a convenient forum to determine the rights of the parties").
With respect to the fairness of this State exercising jurisdiction, defendants argue that they have never set foot in North Carolina. Our courts have observed, however, that "[i]t iswell settled . . . 'that a defendant need not physically enter North Carolina in order for personal jurisdiction to arise.'" Williamson Produce, 122 N.C. App. at 594, 471 S.E.2d at 99 (quoting Better Business Forms, Inc. v. Davis, 120 N.C. App. 498, 501, 462 S.E.2d 832, 834 (1995)). See also Tom Togs, 318 N.C. at 368, 348 S.E.2d at 787 ("Lack of action by defendant in a jurisdiction is not now fatal to the exercise of long-arm jurisdiction."). On the other hand, "defendant[s] [have not] pointed to any disparity between plaintiff and [themselves] which might render the exercise of personal jurisdiction over [them] unfair." Id.
In sum, we cannot say that the factors regarding the State's interest and the convenience to the parties favor one party over the other to the extent that subjecting defendants to the jurisdiction of North Carolina's courts would be unfair. We also observe that the United States Supreme Court has stressed that once the first prong of purposeful minimum contacts is satisfied, the defendant will bear a heavy burden in escaping the exercise of jurisdiction based on other factors. Burger King, 471 U.S. at 476_78, 85 L. Ed. 2d at 543_44, 105 S. Ct. at 2184_85. We do not believe that the inconclusive nature of these additional factors necessarily overrides the trial judge's presumed finding that defendants had sufficient minimum contacts with North Carolina. Since each defendant was a party to at least one of the three contracts, the North Carolina judicial system's exercise of specific personal jurisdiction is appropriate over each defendant. For these reasons, we affirm the trial court's denial of defendants' 12(b)(2) motion to dismiss.
Judges CALABRIA and STEELMAN concur.
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