An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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. COA04-1248


Filed: 5 July 2005


     v .                                 Forsyth County
                                        No. 04 CVD 964< br> MARS SYSTEMS, INC., GARY THOMAS

    Appeal by defendants from an order entered 22 July 2004 by Judge Lawrence J. Fine in Forsyth County Superior Court. Heard in the Court of Appeals 22 April 2005.

    Blanco Tackabery Combs & Matamoros, P.A., by Nathan B. Atkinson, for plaintiff appellee.

    Mitchell, Brewer, Richardson, Adams, Burge & Boughman, by Ronnie M. Mitchell and Harold Lee Boughman, Jr., for defendant appellants.

    McCULLOUGH, Judge.

    The present appeal arises from the trial court's denial of defendants' motion to dismiss for lack of personal jurisdiction. We affirm.
    Plaintiff Blue Ridge Investors, LLC (“Blue Ridge”), is a limited liability company organized under North Carolina law with an office and principal place of business in Advance, North Carolina, and an office in Forsyth County, North Carolina. Defendant Mars Systems, Inc. (“Mars”), is a Virginia corporation with its office and principal place of business located in theState of Virginia. Blue Ridge and Mars entered into a lease and option agreement under which Mars was to rent and operate an assisted living facility in the State of Virginia. Defendants Gary Thomas Campbell and Karla Little-Campbell (“the Campbells”) negotiated the lease on behalf of Mars and signed a guaranty agreement under which they agreed to act as guarantors for Mars.
    On 13 February 2004, Blue Ridge filed a complaint in superior court against Mars for breach of contract and against the Campbells for action on a guaranty, conversion, and unjust enrichment. Mars and the Campbells (“defendants”) filed a motion to dismiss the suit for lack of personal jurisdiction.
    In response, Blue Ridge filed an affidavit from its manager, D. Gray Angell, Jr., in which he stated, inter alia, the following:
        4. [The Campbells] . . . telephoned [Blue Ridge's] office in Advance, North Carolina on numerous occasions for the purpose of inquiring about the assisted living facility, [and] discussing and negotiating the Lease and Guaranty.

        5. The Lease and Guaranty were executed by [the Campbells] and delivered in Forsyth County, North Carolina.

        6. Final execution of the Lease and Guaranty by Blue Ridge took place in Forsyth County, North Carolina. As such, the last act to make the Lease and Guaranty binding occurred in North Carolina.

        7. Mars . . . granted a first lien to Blue Ridge upon all of Mar['s] . . . “inventory, goods, chattels, furniture, furnishings, equipment and tangibles,” as well as numerous other property rights of Mars . . . .

        8. Each rent payment pursuant to the Lease was delivered by Mars . . . to Blue Ridge . . . at 138 Bayhill Drive, Advance, North Carolina, 27006. Blue Ridge accepted each of the rent payments under the Leasein North Carolina and deposited those funds [in]to bank accounts held in North Carolina.

        9. Section 16 of the Guaranty, executed by [the Campbells], states:

        “This Guaranty shall be deemed to be a contract made under, and for all purposes shall be construed in accordance with, the internal laws and judicial decisions of the State of North Carolina. Guarantor acknowledges that this Guaranty was made and delivered in the State of North Carolina. The Guarantor and the Lessor agree that any dispute arising out of this Guaranty shall be subject to the jurisdiction of the state and federal courts of North Carolina. For that purpose, the Guarantor hereby submits to the jurisdiction of the state and federal Courts of North Carolina. Guarantor further agrees to accept service of process out of any of the aforementioned Courts in any such dispute by Registered or Certified Mail addressed to such Guarantor.”

        10. Paragraph 18(a) of the Lease represents and warrants that the lessor is a North Carolina limited liability company. Additionally, pursuant to Paragraph 21 of the Lease, Mars . . . was obligated to deliver all notices, consents, requests, and other communications in connection with the Lease to Forsyth County, North Carolina.

        11. As such, [Mars and the Campbells] were aware that Mars . . . had contracted with a North Carolina entity, leased commercial property owned by a North Carolina entity and had availed themselves of the benefits of doing business with a North Carolina entity.

The Campbells filed practically identical affidavits in which each of them stated the following:
        3. . . . I am a citizen and resident of . . . Virginia.

        4. . . . I have never resided in . . . North Carolina.

        5. My [spouse] and I own Mars Systems, Inc.

        6. Mars . . . is a Virginia corporation conducting business solely in . . . Virginia.
        7. Mars . . . has never conducted business in North Carolina.

        8. The Lease and Option Agreement[] at issue was for Mars . . . to lease and manage an assisted living facility in . . . Virginia.

        9. The Lease, Option Agreement and Guaranty were all drafted by the attorneys for [Blue Ridge] and I was not able to negotiate the boilerplate language.

        10. It was never my intent for [Blue Ridge] to sue me in North Carolina over the guaranty since all business transactions involved property in Virginia.

        11. [Blue Ridge] contacted me in . . . Virginia and negotiated with me in . . . Virginia for Mars . . . to lease and manage the facilities in Virginia.

Defendants also noted that paragraph twenty-eight of the lease and paragraph sixteen of the option agreement provide for each respective document to be governed by Virginia law.
    In a 26 July 2004 order, the trial court entered the following ruling:
    Defendant Mars . . . had sufficient contacts with the State of North Carolina, including, but not limited to the execution of the Lease in Forsyth County, North Carolina, payments of funds owed pursuant to the Lease in North Carolina, and negotiation of those funds by Plaintiff in North Carolina, so as to subject Mars . . . to . . . jurisdiction [in North Carolina Superior Court]. . . . [The Campbells] have each executed a Guaranty subjecting themselves to . . . jurisdiction [in North Carolina Superior Court].

The trial court denied the motion to dismiss for lack of subject matter jurisdiction. From this order, defendants now appeal.
    Before addressing defendants' arguments, we note that the denial of a motion to dismiss for lack of personal jurisdiction, although interlocutory, is immediately appealable. N.C. Gen. Stat. § 1-277(b) (2003). On appeal, “the trial court's findings of factare conclusive if supported by any competent evidence and judgment supported by such findings will be affirmed, even though there may be evidence to the contrary.” Shamley v. Shamley, 117 N.C. App. 175, 180, 455 S.E.2d 435, 438 (1994). This Court reviews de novo the issues of law which determine whether a non-resident defendant is subject to the in personam jurisdiction of our courts: “whether North Carolina law provides a statutory basis for the assertion of personal jurisdiction in the action the plaintiff has brought against the defendant . . . [and] whether the exercise of personal jurisdiction comports with the due process requirements of the Fourteenth Amendment [of the United States Constitution].” Butler v. Butler, 152 N.C. App. 74, 76, 566 S.E.2d 707, 708-09 (2002).
    The North Carolina “long-arm” statute subjects a foreign defendant to personal jurisdiction in the courts of this state in an action which “[r]elates to goods, documents of title, or other things of value actually received by the plaintiff in this State from the defendant through a carrier without regard to where delivery to the carrier occurred.” N.C. Gen. Stat. § 1-75.4(5)(e) (2003). “[M]oney payments are a 'thing of value' within the meaning of [N.C. Gen. Stat. § 1-75.4(5)].” Pope v. Pope, 38 N.C. App. 328, 331, 248 S.E.2d 260, 262 (1978). Thus, the allegation that a defendant has assented to a contractual obligation to deliver payments within this state is sufficient to provide a statutory basis, under N.C. Gen. Stat. § 1-75.4(5), for our courts to exercise personal jurisdiction over such a defendant. See Cameron-Brown Co. v. Daves, 83 N.C. App. 281, 284, 350 S.E.2d 111,113 (1986) (holding that an “action aris[ing] out of a promise by [a party] to deliver within this State . . . (insurance premiums) . . . comes within the North Carolina jurisdictional statutes”).
    Likewise, the long-arm statute vests our courts with jurisdiction over an action arising from a contract to be performed in this state. N.C. Gen. Stat. § 1-75.4(5)(a). “[A] promise to pay the debt of another which is owed to a North Carolina creditor is a contract to be performed in North Carolina.” Brickman v. Codella, 83 N.C. App. 377, 383, 350 S.E.2d 164, 167 (1986); see also Koppers Co., Inc. v. Chemical Corp., 9 N.C. App. 118, 126, 175 S.E.2d 761, 768 (1970) (holding that, in the absence of an agreement to the contrary, a debt is payable where creditor resides). A guaranty agreement, standing alone, may be constitutionally insufficient to subject a nonresident to jurisdiction in this state. Buying Group, Inc. v. Coleman, 296 N.C. 510, 518, 251 S.E.2d 610, 615 (1979). However, the signing of a guaranty is sufficient to create jurisdiction under the long-arm statute. See Brickman, 83 N.C. App. at 380, 350 S.E.2d at 166 (noting that the defendant in that case did not even question the trial court's finding that N.C. Gen. Stat. § 1-75.4(5) applied to an action involving a guaranty).
    To satisfy the requirements of the Due Process Clause of the United States Constitution, there must exist “certain minimum contacts [between the non-resident defendant and the forum] such that the maintenance of the suit does not offend 'traditionalnotions 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)). Specifically, there must be “some act by which the defendant purposefully avails [him]self of the privilege of conducting activities within the forum [s]tate, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 1298 (1958), reh'g denied, 358 U.S. 858, 3 L. Ed. 2d 92 (1958). The relationship between the defendant and the forum must be “such that he should reasonably anticipate being haled into court there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 62 L. Ed. 2d 490, 501 (1980). If an action arises from a defendant's contacts with the forum state, the state may exercise “specific” jurisdiction, in which case the relationship among the defendant, the forum state, and the cause of action is the essential foundation for in personam jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8, 80 L. Ed. 2d 404, 411 n.8 (1984). In the case of specific jurisdiction, a defendant must have “fair warning” that he may be sued in the state asserting jurisdiction for injuries arising from activities that he “purposefully directed” toward that state's residents. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 85 L. Ed. 2d 528, 540-41 (1985).
    This Court has held that subjecting a nonresident to jurisdiction in this state did not violate the Due Process Clausewhere a defendant placed at least one telephone call to a resident of this state to negotiate a lease, the lease was consummated by the plaintiff's signature in this state, and defendant mailed four monthly payments due under the lease to the plaintiff's address in this state. Brickman, 83 N.C. App. at 382-83, 350 S.E.2d at 167-68. Likewise, this Court has held that the Due Process Clause was not violated where a contractual consent to jurisdiction was enforced against a nonresident defendant. MRI/Sales Consultants of Asheville, Inc. v. Edwards Publ'ns, Inc., 156 N.C. App. 590, 596, 577 S.E.2d 393, 398 (2003); see also Burger King, 471 U.S. at 472 n.14, 85 L. Ed. 2d at 540 n.14 (“Where such forum-selection provisions have been obtained through 'freely negotiated' agreements and are not 'unreasonable and unjust,' their enforcement does not offend due process.”) (citations omitted).
    In the instant case, the parties presented conflicting affidavits. The trial judge adopted Blue Ridge's evidence and found the facts to be as set forth in its affidavit. This ruling is clearly supported by the record and is binding on appeal.
    Further, we discern no error in the trial court's conclusion that jurisdiction is proper in this state. For purposes of the long-arm statute, jurisdiction over Mars is proper pursuant to N.C. Gen. Stat. § 1-75.4(5)(e) because Mars sent rent payments due under the parties' lease to North Carolina, and jurisdiction over the Campbells is appropriate pursuant to N.C. Gen. Stat. § 1-75.4(5)(a) because they signed a guaranty which created a debt to be paid in North Carolina. The requirements of the Due Process Clause aresatisfied by competent evidence that (1) defendants placed telephone calls to North Carolina to negotiate the terms of the parties' arrangement; (2) the final execution of the parties' lease occurred in Forsyth County, North Carolina; (3) rent payments owed pursuant to the lease were delivered in North Carolina, and (4) the Campbells each executed a Guaranty subjecting themselves to jurisdiction in North Carolina.
    Finally, we note that there is no merit to defendants' argument that a governing law provision in the lease and option agreements has any bearing on whether jurisdiction in this state is proper. Such a provision determines only the law to be applied to a controversy, not where the controversy may be heard. Johnston County v. R. N. Rouse & Co., 331 N.C. 88, 92, 414 S.E.2d 30, 33 (1992) (“[A] choice of law provision[] names a particular state and provides that the substantive laws of that jurisdiction will be used to determine the validity and construction of the contract, regardless of any conflicts between the laws of the named state and the state in which the case is litigated.”).
    Therefore, the trial court's order must be, and hereby is,
    Judges TIMMONS-GOODSON and STEELMAN concur.
    Report per Rule 30(e).

*** Converted from WordPerfect ***