LEASING UNLIMITED OF
SOUTHERN PINES, INC.,
No. 05 CVS 1057
BILLY WAYNE MOBLEY
Van Camp, Meacham & Newman, PLLC, by Thomas Van Camp, for
McCoy Weaver Wiggins Cleveland Rose Ray, PLLC, by James A. Mclean, III, for defendant-appellant.
Billy Wayne Mobley (defendant) appeals the trial court's order denying its motion to dismiss for lack of personal jurisdiction pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(2). We affirm.
The pertinent facts may be summarized as follows: Plaintiff (Leasing Unlimited of Southern Pines, Inc.) is a North Carolina corporation, created in 1987 by George Barnhart, with its central office located in Moore County. Plaintiff is engaged in arranging lease financing of various products. The lease agreements are sold to financial institutions through broker agreements. The company also has various distributorship agreements with companies that possess a North Carolina Dealer License to sell certain types ofequipment. Leasing Unlimited obtains most of its business through advertisements, trade shows, customer referrals and manufacturer referrals.
Defendant is a resident and citizen of Tift County, Georgia. He learned of Barnhart through a third party, and approached Barnhart about employment as a broker. Defendant signed a Broker Agreement on 20 July 1993 with Plaintiff to solicit lease transactions. By the terms of the contract, defendant's territory was the entire United States, and particularly North Carolina, South Carolina, and Virginia. The contract would be extended each year unless one party provided notice of termination. The caption of the contract recited Moore County, North Carolina.
In connection with his business relationship with plaintiff, defendant worked from his office in Tifton, Georgia by submitting credit applications for potential customers to plaintiff. Defendant received a company car that was owned by plaintiff and registered in North Carolina. Defendant was also given a BB&T credit card in plaintiff's name that was issued in North Carolina. All credit card bills which defendant incurred in conducting business on behalf of plaintiff was forward to plaintiff's central office in North Carolina. Plaintiff provided defendant with office equipment in Georgia from plaintiff's main office in Southern Pines, North Carolina, including telephones, computers and fax machines, advertising materials, trade show information, client lists, and leads for new businesses. During the parties' businessrelationship, defendant was provided a phone extension and voice mailbox at the North Carolina office.
During the business relationship, lease agreements were prepared in North Carolina and sent to defendant to obtain signatures. After obtaining these signatures, defendant sent the agreements back to North Carolina. Defendant attended trade shows in North Carolina that were paid for by Leasing Unlimited. It was customary for defendant to contact the North Carolina office to discuss issues concerning customers; inquire about products; and discuss terms of lease agreements. Defendant also attended sales meetings and a 10-year anniversary celebration in North Carolina at plaintiff's North Carolina office.
In 1999, the business relationship between plaintiff and defendant began to deteriorate, and in 2001 both parties agreed that defendant would work for plaintiff only on a case-by-case basis as mutually agreed. In 2004, defendant severed his financing ties with plaintiff.
Plaintiff filed the subject lawsuit against defendant in Moore County, North Carolina on 3 August 2005. The complaint alleged, inter alia, breach of contract, constructive fraud, breach of fiduciary duty, unfair and deceptive trade practices, and conversion. Defendant filed a motion to dismiss pursuant to Rule 12(b)(2) on 14 October 2005. Defendant asserted that the court lacked personal jurisdiction over him because he did not consummate or substantially perform any contract with plaintiff inNorth Carolina and had little business related contact with the State of North Carolina.
In an order filed 27 March 2006, the trial court denied defendant's motion to dismiss based on lack of personal jurisdiction. The trial court found, inter alia, that [d]uring the course of [defendant's] association with [plaintiff], [defendant] had constant and substantial contact, both written and oral, with the main office in Southern Pines, North Carolina. Accordingly, the trial court concluded that [d]efendant has established sufficient minimum contacts with the State of North Carolina for this Court to exercise personal jurisdiction over the defendant without interfering with defendant's constitutional due process rights. . . . Defendant appeals.
As an preliminary matter, we observe that this appeal concerns an interlocutory order, and that such orders are not ordinarily immediately appealable. An order is either interlocutory or the final determination of the rights of the parties. N.C. Gen. Stat. § 1A-1, Rule 54(a) (2005). A final judgment is one which disposes of the cause as to all the parties, leaving nothing to be judicially determined between them in the trial court. An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy. Veazey v. Durham, 231 N.C. 357, 361-62, 57 S.E.2d 377, 381 (1950) (citations omitted). Our courts have recognized, however, that orders implicating personal jurisdictionand due process may be immediately appealable. See 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[.]); see also Love v. Moore, 305 N.C. 575, 579-80, 291 S.E.2d 141, 145 (1982) (substantial right exists to permit an immediate appeal from an interlocutory order denying a motion to dismiss for lack of personal jurisdiction when it raises questions concerning due process). Accordingly, we address defendant's contentions on the merits.
In defendant's sole argument on appeal, he contends that the trial court erred by concluding that its exercise of personal jurisdiction over him did not violate his constitutional protection of due process. While defendant concedes that the requirements set forth in North Carolina's Long-Arm Statute codified in N.C. Gen. Stat. § 1-75.4 (2005), have been satisfied, he contends that his due process rights have been violated because his contractual relationship with plaintiff did not result in purposeful minimum contacts with the State of North Carolina such that it would be fundamentally unfair for it to assert in personam jurisdiction over him.
The standard of review of an order determining 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. Better Business Forms, Inc. v. Davis, 120 N.C. App. 498, 500, 462 S.E.2d 832, 833 (1995). If thepresumed findings of fact are supported by competent evidence, they are conclusive on appeal despite evidence to the contrary. Cameron-Brown Co. v. Daves, 83 N.C. App. 281, 285, 350 S.E.2d 111, 114 (1986)(citations omitted).
The trial court made the following findings of fact:
2. Barnhart first met defendant Mobley (hereinafter Mobley) through a mutual acquaintance. Mobley subsequently approached Barnhart about coming to work for Leasing Unlimited as a broker. Mobley signed a Broker Agreement, dated July 20, 1993, with Leasing
Unlimited to solicit lease transactions on behalf of the company. Per this Broker Agreement, Mobley's territory was the entire United States, and particularly North Carolina, South Carolina, and Virginia. The contract contained a non-compete provision, which includes North Carolina. The Agreement renewed itself yearly unless one party provided notice of termination. The caption of the contract recited Moore County, North Carolina.
5. During the course of Mobley's association with Leasing Unlimited, Mobley had constant and substantial contact, both written and oral, with the main office in Southern Pines, North Carolina. Mobley would contact the main office to discuss issues with customers, inquire about certain products, and discuss terms of lease agreements and other documents that were exchanged between Mobley and the main office in Southern Pines.
6. During Mobley's association with Leasing Unlimited, Mobley had a phone extension and voice mailbox at the North Carolina office. Mobley's cell phone charges were billed to and paid to the main office in North Carolina. In addition, Mobley attended sales meetings at the plaintiff's main office in Moore County, North Carolina, throughout the term of the broker agreement. If Mobley was not available at his office in Georgia, calls to that office would be forwarded to the North Carolina office in Moore County. Mobley also attended the Leasing Unlimited's 10-year anniversary in Moore County, North Carolina. Mobley also had stationery, Office supplies, and a Sam's Club membership card, all for business purposes,and these items were sent to Mobley from Leasing Unlimited's office in Moore County, North Carolina.
As regards finding of fact number 2, defendant contends that no competent evidence in the record supports: (1) the finding that defendant's territory was the entire United States, and particularly, North Carolina, South Carolina, and Virginia; and (2) the implication that the contract between plaintiff and defendant was a North Carolina contract to be construed in accordance with North Carolina law. We disagree.
In an affidavit, Barnhart stated that defendant had the right to transact business in the United States and particularly North Carolina, South Carolina and Virginia.
In addition, defendant's argument that the second challenged portion of finding of fact 2 implied that the contract between plaintiff and defendant is a North Carolina contract is without merit. The finding plainly states that [t]he caption of the contract recited Moore County, North Carolina. The caption of the contract did, in fact, recite Moore County, North Carolina. Finding of fact number 2 is supported by competent evidence.
With respect to finding of fact number 5, defendant asserts that no record evidence supports the court's finding that his contact with plaintiff was constant and substantial. We disagree. Evidence before the trial court established that (1) plaintiff furnished defendant with office equipment, phone service, a company vehicle registered in North Carolina, and a credit card; (2) plaintiff provided defendant with advertising materials, clientlists, and trade show information and business leads; (3) plaintiff paid certain of defendant's expenses; (4) plaintiff prepared the lease agreements in North Carolina and provided them to defendant for execution and defendant, in turn, returned them to plaintiff's main office in Southern Pines, North Carolina; (5) defendant sent payments from his negotiated transactions to North Carolina; (6) defendant placed phone calls to plaintiff's North Carolina office regarding customers, products, and terms of lease agreements; and (7) defendant attended trade shows, sales meetings, and a 10-year company anniversary event _ all in North Carolina. Consequently, competent record evidence supports the finding that defendant had constant and substantial contact with plaintiff in North Carolina.
Finally, defendant contends that finding of fact number 6 is not supported by competent evidence because the finding implies that the assistance provided by plaintiff to defendant did not occur at the same level throughout the parties' business relationship. This argument is simply without merit and we reject it outright. We conclude that finding of fact number 6 is supported by competent evidence.
We now review whether the trial court's action in asserting personal jurisdiction over defendant comported with constitutional requirements of due process.
A two-step analysis applies when determining whether a court may exercise in personam jurisdiction over a non-resident defendant. First, is there statutory authority that confers jurisdiction on the court? This is determined by looking at North Carolina's long arm, section 1-75.4 of the North Carolina General Statutes. Second, if statutoryauthority confers in personam jurisdiction over the defendant, does the exercise of in personam jurisdiction violate the defendant's due process rights? In Dillon [v. Numismatic Funding Corp.], our Supreme Court stated that G.S. 1-75.4(1)(d) . . . grants the courts of North Carolina the opportunity to exercise jurisdiction over defendant to the extent allowed by due process. When evaluating the existence of personal jurisdiction under section 1-75.4(1)(d),the question of statutory authority collapses into the question of whether [the defendant] has the minimum contacts with North Carolina necessary to meet the requirements of due process.
To satisfy the requirements of the due process clause, there must exist certain minimum contacts [between the non-resident defendant and the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. There must be some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.
A.R. Haire, Inc. v. St. Denis, 176 N.C. App. 255, 259, 625 S.E.2d 894, 898-99 (2006)(internal quotation marks and citations omitted).
In determining whether minimum contacts exist, we analyze several ad-hoc balancing factors: (1) the quantity of the contacts; (2) the nature and quality of the contacts; (3) the source and connection of the cause of action with those contacts; (4) the interest of the forum state; and (5) the convenience to the parties. Phoenix America Corp. v. Brissey, 46 N.C. App. 527, 530-31, 265 S.E.2d 476, 479 (1980). The determination cannot be made by using a 'mechanical formula or rule of thumb, but by ascertaining what is fair and reasonable and just in the circumstances.' Id. at 531, 265 S.E.2d at 479 (quoting Farmer v.Ferris, 260 N.C. 619, 625, 133 S.E.2d 492, 497 (1963)). While no one factor is dispositive, all pertinent considerations must be weighed in light of fundamental fairness and the [particular] circumstances of the case. B.F. Goodrich Co. v. Tire King and Smith, 80 N.C. App. 129, 132, 341 S.E.2d 65, 67 (1986). We next consider these factors.
First, the quantity of defendant's contacts with North Carolina weigh heavily in favor of concluding defendant had the minimum contacts necessary to satisfy due process. Defendant was engaged in a contractual relationship with plaintiff spanning nearly a decade. During that time, plaintiff furnished defendant with equipment and a vehicle registered in North Carolina. It was the practice for plaintiff to prepare lease agreements in North Carolina and forward them to defendant, who thereafter returned them to plaintiff's main office in North Carolina after they were executed. Defendant sent payments from his negotiated transactions to North Carolina and placed phone calls to plaintiff's North Carolina office. And defendant attended trade shows, sales meetings and a company anniversary event in North Carolina.
Second, the nature and quality of the contacts between defendant and North Carolina suggest a conclusion that a North Carolina court may exercise personal jurisdiction over defendant. The parties' business ties _ originally initiated by defendant _ concerned an ongoing contractual relationship that lasted nearly a decade and that included numerous business-related trips by defendant to this State. See CFA Medical, Inc. v. Burkhalter, 95N.C. App. 391, 395, 383 S.E.2d 214, 216 (1989) (Which party initiates the contact is taken to be a critical factor in assessing whether a non-resident defendant has made 'purposeful availment.').
We briefly address the remaining factors. The source and connection of the cause of action arise out of defendant's contacts with plaintiff, and this State has an interest in adjudicating this matter. Indeed, [t]his Court has 'readily' found jurisdiction constitutional in tort cases, because of the 'powerful public interest of a forum state in protecting its citizens against out-of-state tortfeasors.' Summit Lodging, LLC v. Jones, Spitz, Moorhead, Baird & & Albergotti, P.A., 176 N.C. App. 697, 703, 627 S.E.2d 259, 265 (2006) (quoting Saxon v. Smith, 125 N.C. App. 163, 173, 479 S.E.2d 788, 794 (1997)). Here, plaintiff's complaint alleges breaches of e.g., fiduciary duty, conversion, and unfair and deceptive trade practices. And although requiring defendant to defend this action in a North Carolina court will involve some inconvenience, defendant has not set forth a showing of unusual or harmful inconvenience which would be suffered by defendant in litigating this action in North Carolina. Byham v. National Cibo House Corp, 265 N.C. 50, 60, 143 S.E.2d 225, 234 (1965).
Because defendant has had the requisite minimum contacts with North Carolina such that the State may exercise personal jurisdiction over him, see International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102 (1945), and because the conduct here falls within North Carolina's long-arm statute, weconclude the trial court did not err by denying defendant's motion to dismiss. See Ciba-Geigy Corp. v. Barnett, 76 N.C. App. 605, 609, 334 S.E.2d 91, 94 (1985)(personal jurisdiction was properly exercised by the trial court when defendant, employee, working in Indiana, had a lengthy business relationship with plaintiff, employer, located in Greensboro, North Carolina and routinely submitted purchase orders, reimbursement claims and other correspondence to plaintiff's office in North Carolina and the alleged tort directly arose of out defendant's purposeful availment of North Carolina).
Judges HUNTER and STEELMAN concur.
Report per Rule 30(e).
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