Converted WP file 050735-1

Appeal by defendant from judgment entered 9 December 2004 by Judge James M. Webb in Forsyth County Superior Court. Heard in the Court of Appeals 11 January 2006.

Carruthers & Bailey, P.A., by Joseph T. Carruthers, for plaintiff-appellee.

Hendrick & Bryant, LLP, by Matthew H. Bryant, and Kenneth C. Otis, for defendant-appellant.

    LEVINSON, Judge.

    Defendant (The Excelsior Packaging Group, Inc.) appeals from an order denying its motion to dismiss for lack of personal jurisdiction. We affirm.
    Resolution of this appeal does not require a detailed recitation of the underlying facts. Briefly, plaintiff (Treofan America, Inc.), a Delaware corporation doing business in North Carolina, is a distributor of polypropylene film. On 20 February 2004 plaintiff sued defendant for breach of contract, on the grounds that defendant had failed to pay for certain film “sold and delivered” to defendant. Defendant answered on 20 April 2004, andasserted that the goods at issue were defective. On 21 September 2004 defendant filed an amended complaint “incorporating by reference its original answer” and raising various affirmative defenses. Defendant also made a counterclaim for damages caused by plaintiff's delivery of defective film. On 14 October 2004 defendant moved to dismiss plaintiff's claim raising, for the first time, the defense of lack of personal jurisdiction. In the ensuing correspondence between the parties, plaintiff's attorney informed defendant that its motion was subject to Rule 11 sanctions, to which defense counsel responded that an “eighteen month delay in the North Carolina case, is acceptable to [us].”
    On 9 December 2004 the trial court denied defendant's motion to dismiss in an order finding, in pertinent part, that:
    1.    The Complaint was filed on February 20,2004.

    2.    Paragraph 3 of the Complaint reads as follows:

        “The Court has jurisdiction over Excelsior pursuant to N.C.G.S. § 1-75.4(1) and (5). Excelsior has engaged in substantial activity within North Carolina. In addition, this lawsuit arises out of a contract for goods sold which was accepted and entered into in North Carolina, which such goods were shipped by Treofan from North Carolina to Excelsior on Excelsior's order or direction.”

    3.    An Answer was filed on April 20,2004.

    4.    Paragraph 3 of the Answer reads as follows:

        “As to the allegations contained in paragraph 3 of the Complaint, Excelsior denies that the Court has jurisdiction of it pursuant to N.C.G.S. § 1-75-4(1) and denies that it has engaged in substantial activity within North Carolina. Excelsior does not deny that this Court has jurisdiction of it pursuant to N.C.G.S. § 1-75.4(5) and that, in part, thisaction arises out of a contract for goods sold which were shipped by Treofan from North Carolina to Excelsior on Excelsior's order or direction. Except as admitted herein, the allegations contained in paragraph 3 of the Complaint are denied.”

    5.    The Answer did not make any Motion to Dismiss pursuant to Rule 12(b)(2) . . . nor did the Answer contain within it any objection to the Court's exercise of personal jurisdiction.

        . . . .

    43.    On October 15, 2004, plaintiff's attorney urged defendant's attorney to examine the Rule 11 implications of the Motion to Dismiss (and any subsequent appeal).

    44.    On November 3, 2004, defendant's attorney stated that if the Motion to Dismiss was unsuccessful at the trial court level that defendant had an immediate right of appeal which defendant would exercise, and that an expensive trial in New York or an eighteen month delay in North Carolina was acceptable to defendant.

    45.    Defendant cited to the Court no case from North Carolina supporting (by holding or dicta) defendant's contention that its Answer preserved the defense of no personal jurisdiction.

(emphasis added). Based on these and other findings of fact, the trial court concluded in relevant part that:
    1.    Defendant waived any objection to personal jurisdiction by failing to include in the Answer filed on April 20, 2004 any objection to personal jurisdiction and/or any motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) and by failing to file any Motion to Dismiss pursuant to Rule 12(b)(2) before or with the Answer.

    2.    Defendant failed to make a timely objection to personal jurisdiction.

    3.    Defendant's statement in paragraph 3 of the Answer that “Excelsior does not deny that thisCourt has jurisdiction of it pursuant to N.C.G.S. § 1-75.4(5)” constituted an admission that the Court had personal jurisdiction over it.

        . . . .

    6.     Based on the foregoing Findings of Fact and the foregoing Conclusions of Law, the Court is not required to analyze whether long-arm jurisdiction exists and/or whether due process is satisfied by the exercise of personal jurisdiction in this case. . . .

        . . . .

    13.    Defendant's Motion to Dismiss is not well grounded in fact.

    14.    Defendant's Motion to Dismiss is not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.

Based on these and other conclusions of law, the trial court denied defendant's motion to dismiss. From this order defendant timely appealed.

    “Although the denial of a motion to dismiss is generally interlocutory and not immediately appealable, a party has the right of immediate appeal from an adverse ruling as to the jurisdiction of the court over the person. N.C. Gen. Stat. § 1-277(b) [(2005)]. On appeal, we review an order determining personal jurisdiction to ascertain whether the trial court's findings of fact are supported by competent evidence; if so, we must affirm the trial court.” Strategic Outsourcing v. Stacks, __ N.C. App. __, __, __ S.E.2d __, __ (COA05-47, filed 21 February 2006) (citing Cooper v. Shealy, 140 N.C. App. 729, 732, 537 S.E.2d 854, 856 (2000)). Moreover, “if theevidence tends to support the trial court's findings, these findings are binding on appeal, even though there may be some evidence to support findings to the contrary.” Starco, Inc. v. AMG Bonding & Ins. Services, 124 N.C. App. 332, 335, 477 S.E.2d 211, 214 (1996) (citation omitted).
    Under N.C. Gen. Stat. § 1A-1, Rule 12 (2005):
    (b)    Every defense, in law or fact, to a claim for relief in any pleading, . . . shall be asserted in the responsive pleading thereto . . . except that the following defenses may . . . be made by motion . . . (2) Lack of jurisdiction over the person[.]

    (h)    (1) A defense of lack of jurisdiction over the person . . . is waived . . . (ii) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof[.]

Accordingly, where “defendant never raised the defense of lack of jurisdiction over the person either by way of a pre-answer motion or by including the defense in her answer[,] . . . the defense is waived.” Harris v. Pembaur, 84 N.C. App. 666, 670, 353 S.E.2d 673, 676 (1987). “Thus, where a defendant makes a general appearance before filing a motion contesting personal jurisdiction, he waives his right to challenge the court's exercise of personal jurisdiction over him from that date forward.” Stern v. Stern, 89 N.C. App. 689, 692-93, 367 S.E.2d 7, 9 (1988) (citing Lynch v. Lynch, 303 N.C. 367, 279 S.E.2d 840 (1981)). In Stern, the defendant's answer included a motion for dismissal under Rule 12(b)(6), but not a motion to dismiss for lack of personal jurisdiction. This Court held that by “filing his answer without contesting personal jurisdiction, [defendant's] right to challengethe court's exercise of personal jurisdiction over him was waived. G.S. 1A-1, Rule 12(h)[.]” Stern, 89 N.C. App. at 693, 367 S.E.2d at 9.
    In the instant case, we conclude the court's findings are supported by competent evidence, and support its conclusion of law that defendant “waived any objection to personal jurisdiction by failing to include in the Answer filed on April 20, 2004 any objection to personal jurisdiction and/or any motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) and by failing to file any Motion to Dismiss pursuant to Rule 12(b)(2) before or with the Answer.” Indeed, defendant's answer expressly stated that it “does not deny that this Court has jurisdiction of it pursuant to N.C.G.S. § 1-75.4(5)[.]” We conclude that defendant waived the defense of personal jurisdiction in its answer.
    Defendant, however, would have us construe the remainder of paragraph number three of its answer as an assertion of the defense of lack of personal jurisdiction. As found by the trial court, the entire sentence from which the quoted phrase is taken reads: “Excelsior does not deny that this Court has jurisdiction of it pursuant to N.C.G.S. § 1-75.4(5), and that, in part, this action arises out of a contract for goods sold which were shipped by Treofan from North Carolina to Excelsior on Excelsior's order or direction.” Thus, in addition to conceding personal jurisdiction, defendant also admitted that (1) the action arose from a “contract for goods sold”; (2) the goods “were shipped by Treofan from North Carolina to Excelsior”; and (3) the goods were shipped “onExcelsior's order or direction.” Defendant argues that, inasmuch as it later learned that the goods were not shipped from North Carolina, this Court should disregard its express statement that “Excelsior does not deny that this Court has jurisdiction of it pursuant to N.C.G.S. § 1-75.4(5)” and should hold that defendant “denied the specific jurisdictional allegations” of the complaint. Defendant describes its answer as a “less than artful” assertion of lack of personal jurisdiction that merely failed to “follow conventional pleading practice.” However, defendant cites no cases supporting such an interpretation, and we find none.
    “Since we find that defendant waived his right to challenge the court's exercise of personal jurisdiction over him, we need not address his . . . contention that the trial court did not have personal jurisdiction over him[.]” Stern, 89 N.C. App. at 693, 367 S.E.2d at 9. 693, 367 S.E.2d at 9. This assignment of error is overruled.

    We next consider plaintiff's motion for sanctions under N.C. R. App. P. 34. Plaintiff argues that defendant's appeal was frivolous, and that “a plethora of evidence” supported the trial court's determination that defendant's motion to dismiss was “not well grounded in fact” and “not warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.” We agree.
    This Court may sanction a “party or attorney or both” upon determination that an appeal was frivolous because it “was not wellgrounded in fact and warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law” or was “taken or continued for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.” N.C.R. App. P. 34 (a)(1) and (2).
    In the instant case, defendant moved for dismissal despite filing an answer that explicitly conceded personal jurisdiction and did not include a Rule 12(b)(2) motion to dismiss. Defendant's amended complaint likewise failed to raise the issue of personal jurisdiction. Defendant made many general appearances in the case without objecting to personal jurisdiction. Moreover, the trial court observed that defendant cited “no case from North Carolina supporting (by holding or dicta) defendant's contention that its Answer preserved the defense of no personal jurisdiction.”
    Defendant's appeal from the denial of its motion is, if anything, more frivolous than the original motion. In its brief, defendant cites no cases supporting its contention that its answer was just an “inartful” assertion of the defense of lack of personal jurisdiction. We also note defendant's statement that “an eighteen month delay” during appeal from the trial court's ruling would be an “acceptable” result for defendant.
    Plaintiff's motion for Rule 34 sanctions is granted. Upon remand, the trial court shall determine the complete, reasonable counsel fees associated with responding to this appeal; double this amount; and require defendant to pay the same within fifteen (15) days of the entry of its order.    Affirmed.
    Judges McCULLOUGH and ELMORE concur.
    Report per Rule 30(e).

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