BLUE RIDGE HEALTH INVESTORS, LLC,
Plaintiff,
v
.
Forsyth County
No. 04 CVD 964<
br>
MARS SYSTEMS, INC., GARY THOMAS
CAMPBELL and KARLA LITTLE-CAMPBELL,
Defendants.
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,
Affirmed.
Judges TIMMONS-GOODSON and STEELMAN concur.
Report per Rule 30(e).
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