Appeal by Defendants from an order entered 5 January 2007 by
Judge J. Gentry Caudill in Cleveland County Superior Court. Heard
in the Court of Appeals 18 September 2007.
Robinson, Bradshaw & Hinson, P.A., by Garland S. Cassada and
Jonathan C. Krisko, for Douglas Brown, Sr. Plaintiff-Appellee.
Forman Rossabi Black, P.A., by Amiel J. Rossabi and Emily J.
Meister, for Ian Williamson and S. Bruce Wunner
Defendants/Third Party Plaintiff-Appellants.
ARROWOOD, Judge.
Defendants, Ian Williamson and S. Bruce Wunner, appeal from
the denial of their motion to dismiss for lack of personal
jurisdiction. We affirm. The record establishes the following: Defendant Refuel
America, Inc. (Refuel), which is not a party to this appeal, is a
Delaware corporation with offices in Charlotte, North Carolina.
Defendant Ian Williamson, a resident of the United Kingdom, is the
President and a Director of Refuel; Defendant Bruce Wunner, a
resident of Florida, is Refuel's Chief Executive Officer and Vice
Chairman of its Board of Directors. Ray Thomas Petroleum Company,
Inc., (Thomas Petroleum) is a North Carolina corporation based in
Shelby, North Carolina.
In 2005 Thomas Petroleum owed Plaintiff a sum in excess of
$2,000,000.00. That year the parties negotiated a commercial
transaction involving Plaintiff's loan of an additional one million
dollars ($1,000,000.00) to Thomas Petroleum; Refuel's acquisition
of Thomas Petroleum; and Refuel's issuance to Plaintiff of shares
in Refuel. However, after Refuel's anticipated purchase of Thomas
Petroleum failed to take place, a dispute arose among the parties
regarding various aspects of their agreement and the proper
disposition of shares in Refuel.
On 16 August 2006 Plaintiff filed suit against Defendants
seeking a declaratory judgment establishing his ownership of
certain shares in Refuel, and seeking damages for fraud, breach of
contract, breach of fiduciary duty, civil conspiracy, negligent
misrepresentation, and securities fraud. Defendants filed an
unverified answer that included a motion for dismissal of
Plaintiff's complaint for lack of personal jurisdiction over eitherDefendant. The trial court denied their motion in an order filed
5 January 2007, from which Defendants have appealed.
Defendants appeal from the court's denial of their motion to
dismiss for lack of personal jurisdiction.
Preliminarily, we note that this appeal, while
interlocutory, is properly before us because
motions to dismiss for lack of personal
jurisdiction are statutorily deemed to be
immediately appealable. N.C. Gen. Stat. §
1-277(b) (2005) (“Any interested party shall
have the right of immediate appeal from an
adverse ruling as to the jurisdiction of the
court over the person or property of the
defendant[.]”).
Fox v. Gibson, 176 N.C. App. 554, 556-57, 626 S.E.2d 841, 843
(2006).
“Whether the courts of this State may exercise
personal jurisdiction over a nonresident
defendant involves a two-prong analysis: '(1)
Does a statutory basis for personal
jurisdiction exist, and (2) If so, does the
exercise of this jurisdiction violate
constitutional due process?' The assertion of
personal jurisdiction over a defendant
comports with due process if defendant is
found to have sufficient minimum contacts with
the forum state to confer jurisdiction.”
Jaeger v. Applied Analytical Indus. Deutschland GMBH, 159 N.C. App.
167, 170, 582 S.E.2d 640, 643 (2003) (quoting
Golds v. Central
Express Inc., 142 N.C. App. 664, 665-66, 544 S.E.2d 23, 25 (2001)).
As a practical matter, the two-step analysis collapses into
the single question of “whether due process of law would be
violated by permitting the courts of this jurisdiction to exercise
their power over defendant[:]” By the enactment of G.S. [§] 1-75.4(1)(d)
[permitting jurisdiction over any defendant
'engaged in substantial activity within this
State, whether such activity is wholly
interstate, intrastate, or otherwise'], it is
apparent that the General Assembly intended to
make available to the North Carolina courts
the full jurisdictional powers permissible
under federal due process. . . . Thus, we hold
that G.S. [§] 1-75.4(1)(d) . . . statutorily,
grants the courts of North Carolina the
opportunity to exercise jurisdiction over
defendant to the extent allowed by due
process.
Dillon v. Funding Corp., 291 N.C. 674, 676, 231 S.E.2d 629, 630-31
(1977).
“Upon a defendant's personal jurisdiction challenge, the
plaintiff has the burden of proving
prima facie that a statutory
basis for jurisdiction exists. Where unverified allegations in the
plaintiff's complaint meet plaintiff's initial burden of proving
the existence of jurisdiction and defendant does not contradict
plaintiff's allegations in its sworn affidavit, such allegations
are accepted as true and deemed controlling[.]”
Wyatt v. Walt
Disney World, Co., 151 N.C. App. 158, 162-63, 565 S.E.2d 705, 708
(2002) (alterations omitted) (internal quotation marks and
citations omitted). However, where the defendant submits an
affidavit in support of his motion to dismiss for lack of personal
jurisdiction, the court will “look to the uncontroverted
allegations in the complaint and the uncontroverted facts in the
sworn affidavit” in its determination of the issue.
Bruggeman v.
Meditrust Acquisition Co., 138 N.C. App. 612, 616, 532 S.E.2d 215,
218,
disc. review denied, 353 N.C. 261, 546 S.E.2d 90 (2000).
Factual allegations in Defendants' unverified answer are notcompetent evidence; therefore, we assume the trial court did not
consider these and do not consider them on appeal.
See, e.g.,
Spinks v. Taylor and Richardson v. Taylor Co., 303 N.C. 256, 278
S.E.2d 501 (1981) (holding, in context of summary judgment
proceeding, that verified complaint may be treated as affidavit);
Excel Staffing Serv., Inc. v. HP Reidsville,
Inc., 172 N.C. App.
281, 283, 616 S.E.2d 349, 351 (2005) (“Filing an unverified answer
to a complaint does not constitute a response to requests for
admissions[.]”);
Hill v. Hill, 11 N.C. App. 1, 10, 180 S.E.2d 424,
430 (1971) (“An unverified complaint is not an affidavit or other
evidence.”).
“The determination of whether jurisdiction is statutorily and
constitutionally permissible due to contact with the forum is a
question of fact. The standard of review of an order determining
personal jurisdiction is whether the findings of fact by the trial
court are supported by competent evidence in the record; if so,
this Court must affirm the order of the trial court.”
Replacements, Ltd v. MidweSterling, 133 N.C. App. 139, 140-41, 515
S.E.2d 46, 48 (1999) (citations omitted). “Moreover, if the trial
court's findings of fact resolving the defendant's jurisdictional
challenge 'are not assigned as error, the court's findings are
'presumed to be correct.'”
Wyatt, 151 N.C. App. at 163, 565 S.E.2d
at 709 (quoting
Inspirational Network, Inc. v. Combs, 131 N.C. App.
231, 235, 506 S.E.2d 754, 758 (1998)).
We first note that the trial court's denial of Defendants'
dismissal motion included the following
unchallenged findings of
fact, which are thus conclusively established,
See Wyatt:
2. . . . [T]he Individual Defendants on multiple
occasions, visited the State of North
Carolina, evaluating aspects of a transaction
involving the acquisition of Thomas Petroleum
Company, Inc., a North Carolina company
headquartered in Shelby. While the Individual
Defendants were within the State, they
proposed Plaintiff Brown's involvement in this
Venture, which they planned to locate in North
Carolina.
3. All of the Individual Defendants'
communications with Plaintiff, from which this
action arises, occurred while one or both
Individual Defendants were located in North
Carolina, or were directed to Brown while he
was located in North Carolina.
4. The offer by Williamson, on behalf of Wunner
and their affiliates, for Plaintiff Brown to
participate in the Venture was made to Brown
in North Carolina.
5. Williamson delivered a share certificate,
containing certifications by both Williamson
and Wunner that the share certificate
represented shares owned by Brown in North
Carolina. In addition, Williamson accepted
from Brown on behalf of himself, Wunner, and
their affiliates, a $1 million loan proceeds
check and another check in North Carolina.
6. In the Complaint, Brown asserts that
Williamson's and Wunner's conduct within and
without the State, including their fraudulent
representations, misleading statements and
omissions, among other things: (i) induced
Brown to pay the $1 million loan proceeds to
Thomas Petroleum, from which Williamson's and
Wunner's affiliates (including a company owned
by Wunner) obtained benefits of approximately
$239,000; and (ii) allowed Williamson and
Wunner to obtain increased benefits through
the Share Exchange described in the Complaint.
7. In the Complaint, Brown asserts that
Williamson's and Wunner's actions, in and
directed toward the State of North Carolina,
have denied Brown his equity interest in
Refuel, and the value of participating in the
Share Exchange, and benefitted each of
Williamson and Wunner personally.
8. Refuel, a company formed by Williamson, Wunner
and their affiliates, and NewGen Technologies,
Inc., Refuel's parent, maintain offices in
Charlotte, North Carolina. Williamson
continues to serve as President and Director
of Refuel. Wunner serves as Refuel's Chief
Executive Officer and Vice Chairman of the
Board of Directors. Williamson and Wunner
continue to maintain offices of those
companies located in Charlotte, North Carolina
through which they have corresponded with
Brown.
N.C. Gen. Stat. § 1-75.4 (2005) governs North Carolina's
exercise of personal jurisdiction over a nonresident defendant. In
the instant case, the court found jurisdiction to exist under the
following statutory provisions authorizing the exercise of personal
jurisdiction over a nonresident defendant where the plaintiff's
claim arose from:
§ 1-75.4(3) . . . an act or omission within
this State by the defendant.
§ 1-75.4(4)(a.) . . . an act or omission
outside this State by the defendant . . . [if
at] the time of the injury . . . Solicitation
or services activities were carried on within
this State by or on behalf of the defendant;
§ 1-75.4(5)(c.) . . . a promise [to the
plaintiff] . . by the defendant to deliver or
receive within this State . . . documents of
title, or other things of value;
§ 1-75.4(6)(c.) . . . [a] claim that the
defendant return, restore, or account to the
plaintiff for any asset or thing of value
which was within this State at the time thedefendant acquired possession or control over
it.
We easily conclude that the uncontradicted findings support
the court's conclusions that both Williamson and Wunner were
subject to the court's jurisdiction as defined by statute, and that
their “contacts with North Carolina support the exertion of
'specific' jurisdiction, and therefore, the exercise of
jurisdiction by this Court over their persons does not violate the
Due Process Clause of the Fourteenth Amendment of the United States
Constitution.”
We have considered and we reject Defendants' argument to the
contrary. Defendants do not argue the lack of evidence of the
occurrence of events set out in the trial court's findings of fact.
Instead, their sole argument is that, regardless of the accuracy of
the court's findings about their actions, actions they took while
acting as agents of “corporate entities” don't “count” as part of
the determination of jurisdiction. Defendants assert in their
brief that:
absent a showing that a corporate officer or
employee acted as the alter ego of the
corporation or outside of his official
capacity . . . jurisdiction cannot be asserted
over a corporate agent without affirmative
acts committed in the agents individual
capacity[.]
On the basis of this contention, Defendants argue that the exercise
of personal jurisdiction is defeated because:
The evidence . . . shows that the actions of
Defendants Williamson and Wunner were taken or
made on behalf of corporate entities for which
they were employed or otherwise acted as an
agent. No evidence exists as to the acts ofDefendants Williamson and Wunner individually
and personally.
Defendants cite
Godwin v. Walls, 118 N.C. App. 341, 455 S.E.2d
473 (1995) and
Robbins v. Innham, __ N.C. App. __, 635 S.E.2d 610
(2006),
disc. review denied, 361 N.C. 221, 642 S.E.2d 448 (2007) as
support for their position that if “an individual acts not in his
personal capacity but on behalf of another, North Carolina courts
have refused to consider or count such actions for purposes of
establishing personal jurisdiction over the individual[.]” This
reliance is misplaced because, neither of these cases holds that,
for purposes of determining the extent of a defendant's contacts
with North Carolina, the actions of a defendant taken as an
employee or agent of another do not “count.”
Additionally, relevant North Carolina jurisprudence has held
to the contrary.
See, e.g., Buying Group, Inc. v. Coleman, 296
N.C. 510, 515, 251 S.E.2d 610, 614 (1979) (where defendant was a
principal shareholder and agent for corporation, this Court holds
“his corporate acts may be attributed to him for the purpose of
determining whether the courts of this State may assert personal
jurisdiction over him”);
Centura Bank v. Pee Dee Express, Inc., 119
N.C. App. 210, 213, 458 S.E.2d 15, 18 (1995) (acts taken in North
Carolina by defendant who is officer and principal shareholder in
corporation may be imputed to defendant individually for purpose of
determining existence of minimum contacts) (citations omitted). In
the instant case, it is undisputed that Defendants were officers
and principals in Refuel. As discussed above, North Carolina common law interprets G.S.
§ 1-75.4 to extend jurisdiction to the full extent permitted by the
Due Process Clause of the U.S. Constitution. In this regard, we
find it persuasive that in
Calder v. Jones, 465 U.S. 783, 79 L. Ed.
2d 804 (1984), the United States Supreme Court expressly rejected
the argument made by the instant Defendants. The
Calder defendant,
a Florida resident and newspaper reporter, challenged California's
exercise of personal jurisdiction over him on the basis that,
notwithstanding his contacts with California, principles of due
process prohibited exercise of jurisdiction on the basis of his
actions as an employee of the newspaper.
The United States Supreme
Court disagreed:
Petitioners are correct that their contacts
with California are not to be judged according
to their employer's activities there. On the
other hand, their status as employees does not
somehow insulate them from jurisdiction. Each
defendant's contacts with the forum State must
be assessed individually. . . . In this case,
petitioners are primary participants in an
alleged wrongdoing intentionally directed at a
California resident, and jurisdiction over
them is proper on that basis.
Calder, 465 U.S. at 790, 79 L. Ed. 2d at 813. Finally, we note
that Plaintiff has moved to dismiss this appeal as frivolous and
for sanctions. Appellants did not respond to the motion.
Nevertheless, we have reviewed the substance of the appeal. As
stated above, we find the appeal to be without merit, however, in
our discretion, we decline to impose sanctions. The trial court did not err in concluding that personal
jurisdiction was properly asserted over Defendants, and that its
order is
Affirmed.
Chief Judge MARTIN and Judge STROUD concur.
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