Bruggeman v. Meditrust Acquisition Co.

Decision Date05 July 2000
Docket NumberNo. COA99-648.,COA99-648.
Citation532 S.E.2d 215,138 NC App. 612
CourtNorth Carolina Court of Appeals
PartiesMichael BRUGGEMAN, Jackson Newton, and Mark McGonigal, v. MEDITRUST ACQUISITION COMPANY, Meditrust Company, LLC, and Meditrust Golf Group, II, Inc.

Johnson & Lambeth, by Robert White Johnson and Maynard M. Brown, Wilmington, for plaintiff-appellees.

Rountree & Seagle, L.L.P., by George K. Freeman, Jr., Wilmington, for defendant-appellants.

MARTIN, Judge.

Plaintiffs Michael Bruggeman, Jackson Newton, and Mark McGonigal brought this action alleging that in January 1998, Meditrust Acquisition Company (MAC) engaged Bruggeman, a licensed real estate broker in Virginia and Maryland, as its agent to locate golf course properties for investment purposes by MAC. Bruggeman associated Newton, a real estate broker licensed in North Carolina, and McGonigal, a real estate broker licensed in New Jersey, to assist him.

Plaintiffs further alleged MAC is a Florida corporation with offices in Palm Beach, Florida, and that MAC merged with Meditrust Company, LLC (MCLLC), a Delaware corporation with offices in Florida, in May 1998. Plaintiffs alleged that they procured several prospects, including Carolina Golf Services, for defendants and assisted defendants in procuring golf course assets of Carolina Golf Services in North Carolina and Virginia. They alleged that defendants contracted to purchase the properties located by plaintiffs and did not compensate plaintiffs for their services.

Defendants moved to dismiss the complaint for lack of personal jurisdiction, failure to state a claim upon which relief could be granted, failure to join a necessary party, and in the alternative, for a more definite statement. In the motion to dismiss for lack of personal jurisdiction and accompanying affidavit in support thereof, defendants denied contracting with any of plaintiffs to perform any services, denied a merger between MAC and MCLLC, and denied that either company had any contacts with North Carolina other than MCLLC's ownership of a parcel of land in Mecklenburg County which it leases to a third party and MCLLC's maintenance of a registered agent in North Carolina due to its status as a foreign company.

Plaintiffs subsequently moved to amend their complaint to add Meditrust Golf Group, II, Inc. (MGG), a Delaware corporation with offices in Massachusetts, as a defendant. Plaintiffs alleged that MAC had been acting on behalf of MCLLC and MGG, and that either MCLLC or MGG, using the information provided to MAC by plaintiffs, had actually purchased the properties located by plaintiffs. Plaintiffs seek compensation for the services allegedly rendered to defendants.

The trial court denied defendants' motions to dismiss, and allowed their motion for a more definite statement. Defendants MAC and MCLLC appeal from the order denying their motion to dismiss for lack of personal jurisdiction. Meditrust Golf Group, II, Inc. is not a party to the appeal.

The sole issue presented by this appeal is whether the trial court properly denied defendants' motion to dismiss for lack of personal jurisdiction. The denial of a motion to dismiss for lack of jurisdiction is immediately appealable. N.C. Gen.Stat. § 1-277(b); Teachy v. Coble Dairies, Inc., 306 N.C. 324, 293 S.E.2d 182 (1982).

In order for the courts of this State to exercise jurisdiction over the person of a nonresident defendant, (1) there must be statutory authority for the exercise of jurisdiction, and (2) the nonresident defendant must have sufficient contacts with this State such that the exercise of jurisdiction does not violate the federal due process clause. See Cherry Bekaert & Holland v. Brown, 99 N.C.App. 626, 394 S.E.2d 651 (1990). The allegations of the complaint must disclose jurisdiction although the particulars of jurisdiction need not be alleged. See Williams v. Institute for Computational Studies, 85 N.C.App. 421, 355 S.E.2d 177 (1987). If the exercise of personal jurisdiction is challenged by a defendant, a trial court may hold an evidentiary hearing including oral testimony or depositions or may decide the matter based on affidavits. N.C. Gen.Stat. § 1A-1, Rule 43(e). If the court takes the latter option, the plaintiff has the initial burden of establishing prima facie that jurisdiction is proper. Williams at 424, 355 S.E.2d at 179. Of course, this procedure does not alleviate the plaintiff's ultimate burden of proving personal jurisdiction at an evidentiary hearing or at trial by a preponderance of the evidence. See J.M. Thompson Co. v. Doral Mfg. Co. Inc., 72 N.C.App. 419, 324 S.E.2d 909,disc. review denied, 313 N.C. 602, 330 S.E.2d 611 (1985). Either party may request that the trial court make findings regarding personal jurisdiction, but in the absence of such request, findings are not required. See id.; Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C.App. 466, 265 S.E.2d 637 (1980). In the case before us, the trial court's order contained no findings, but there is nothing in the record to show that either party requested them. Where no findings are made, proper findings are presumed, and our role on appeal is to review the record for competent evidence to support these presumed findings. See Sherwood v. Sherwood, 29 N.C.App. 112, 223 S.E.2d 509 (1976).

Other than plaintiffs' unverified complaint, the only other source of evidence of the presence or lack of personal jurisdiction in the record before us is the sworn affidavit of Michael Benjamin, senior vice president and general counsel for MCLLC and special counsel for MAC, which was attached to defendants' motion to dismiss. This affidavit contradicts almost every material allegation in plaintiffs' complaint. "Where unverified allegations in the complaint meet plaintiff's `initial burden of proving the existence of jurisdiction ... and defendant[s] d[o] not contradict plaintiff's allegations in their sworn affidavit,' such allegations are accepted as true and deemed controlling." Inspirational Network, Inc. v. Combs, 131 N.C.App. 231, 235, 506 S.E.2d 754, 758 (1998) (quoting Bush v. BASF Wyandotte, Corp., 64 N.C.App. 41, 45, 306 S.E.2d 562, 565 (1983)). However, where, as in this case, defendants submit some form of evidence to counter plaintiffs' allegations, those allegations can no longer be taken as true or controlling and plaintiffs cannot rest on the allegations of the complaint. See Brandi v. Belger Cartage Serv., Inc., 842 F.Supp. 1337, 1339 (D.Kan.1994) ("The plaintiff has the duty to support jurisdictional allegations in a complaint by competent proof of the supporting facts if the jurisdictional allegations are challenged by an appropriate pleading."); Weller v. Cromwell Oil Co., 504 F.2d 927, 929-30 (6th Cir.1974) ("Where a motion to ... dismiss is filed, supported by affidavits, the nonmoving party may not rest upon allegations or denials in his pleadings but his response by affidavit or otherwise must set forth specific facts showing that the court has jurisdiction."); Honeycutt v. Tour Carriage, Inc., 997 F.Supp. 694, 696 n. 1 (W.D.N.C. 1996) ("Because Plaintiff did not respond in opposition to any of the motions filed by Defendants, the undersigned finds the facts as presented by Defendants."). In such a case, the plaintiff's burden of establishing prima facie that grounds for personal jurisdiction exist can still be satisfied if some form of evidence in the record supports the exercise of personal jurisdiction. See Liberty Finance Co. v. North Augusta Computer Store, 100 N.C.App. 279, 395 S.E.2d 709 (1990) (holding that a court could find the necessary competent evidence supporting personal jurisdiction in defendant's affidavits). Thus, in evaluating the appeal before us, we look to the uncontroverted allegations in the complaint and the uncontroverted facts in the sworn affidavit for evidence supporting the presumed findings of the trial court.

G.S. § 1-75.4 is North Carolina's long-arm statute and confers jurisdiction over non-residents. Plaintiffs contend that G.S. § 1-75.4(1)(d), which confers personal jurisdiction "[i]n any action, whether the claim arises within or without this State, in which a claim is asserted against a party who... (d) [i]s engaged in substantial activity within this State ...," authorizes the exercise of personal jurisdiction over MCLLC because it engages in substantial activity in North Carolina. According to Mr. Benjamin's affidavit, MCLLC owns and leases a parcel of property in Mecklenburg County to a management company and maintains an agent for service of process in North Carolina. Although property ownership alone is insufficient to allow a non-resident to be subject to the personal jurisdiction of the courts of this State, See Eways, supra, we must determine whether MCLLC's leasing activities in this State would constitute "substantial activities."

In Dillon v. Numismatic Funding Corp., 291 N.C. 674, 676, 231 S.E.2d 629, 630-31 (1977), the North Carolina 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." In other words, when evaluating the existence of personal jurisdiction pursuant to G.S. § 1-75.4(1)(d), "the question of statutory authorization `collapses into the question of whether [the defendant] has the minimum contacts with North Carolina necessary to meet the requirements of due process.'" Hanes Companies v. Ronson, 712 F.Supp. 1223, 1226 (M.D.N.C.1988) (citations omitted). Therefore, we proceed directly to the due process inquiry.

Defendant MCLLC contends that its contacts with North Carolina, being unrelated to the case at hand, are insufficient and thus an assertion of jurisdiction in this case would violate their rights to due process. We disagree.

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
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