Bryson v. Northlake Hilton

• Citation: 407 F. Supp. 73
• Decision Date: 22 January 1976
• Docket Number: No. C-75-259-G,C-75-265-G.,C-75-259-G
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Patricia BRYSON, Plaintiff, v. The NORTHLAKE HILTON, Defendant. Thomas M. BRYSON, by his Guardian Ad Litem John K. Patterson, Plaintiff, v. The NORTHLAKE HILTON, Defendant.

407 F. Supp. 73

Patricia BRYSON, Plaintiff, v. The NORTHLAKE HILTON, Defendant.

Thomas M. BRYSON, by his Guardian Ad Litem John K. Patterson, Plaintiff, v. The NORTHLAKE HILTON, Defendant.

Nos. C-75-259-G, C-75-265-G.

United States District Court, M. D. North Carolina, Greensboro Division.

January 22, 1976.

David I. Smith, Burlington, N.C., for plaintiffs.

Thomas C. Duncan, Greensboro, N.C., for defendant.

MEMORANDUM

GORDON, Chief Judge.

The issues raised by these two cases are, for all practical purposes, identical. The two plaintiffs, Patricia Bryson and Thomas Bryson, her son (who as a minor is represented by his guardian ad litem John K. Patterson), are both seeking damages from the defendant, The Northlake Hilton, for flea bites which they allege that they received while staying in the defendant motel in Tucker, Georgia. Because of the common issues of fact and questions of law presented, these cases are being considered together.

The jurisdictional basis of these actions is founded on diversity of citizenship. Both plaintiffs are citizens of Alamance County, North Carolina. The defendant The Northlake Hilton (hereafter referred to as Northlake) is a motor inn owned and operated by Northlake Hotel Developers, Ltd., a limited partnership organized and doing business in the State of Georgia.

The defendant has moved, in timely fashion, to dismiss these complaints for lack of in personam jurisdiction, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. The parties have filed briefs and affidavits in support of their contentions. In general, the defendant asserts that neither the due process clause of the United States Constitution nor applicable North Carolina statutory law permits the exercise of jurisdiction by this Court.

The plaintiffs allege that from July 3, 1974, through July 6, 1974, they were guests of Northlake in Tucker, Georgia, and that, while guests of the defendant-establishment, they were each bitten by numerous flea-like insects which caused them grave personal injuries. Northlake holds a franchise from Hilton Inn, Inc., to do business in Tucker, Georgia, as The Northlake Hilton Inn.

The plaintiffs have brought their actions in tort and in contract, seeking to recover monetary damages for the personal injuries which they allege were sustained because of negligence and/or breach of contract by the defendant. Each plaintiff asserts a claim for both actual and punitive damages.

When in personam jurisdiction is contested in diversity cases, as it is here, the court must undertake a two-part inquiry. First, it must determine if the applicable state law would allow the exercise of in personam jurisdiction over the party in question; second, assuming the answer to the first inquiry is yes, the court must determine if the exercise of jurisdiction by state law comports with due process concepts embodied in the Fourteenth Amendment to the United States Constitution. Bowman v. Curt G. Joa, Inc., 361 F.2d 706 (4th Cir. 1966); Munchak Corporation v. Riko Enterprises, Inc., 368 F.Supp. 1366 (M.D.N.C.1973).

The plaintiffs rely in chief upon the provisions of North Carolina General Statutes § 1-75.4(4), which states, in pertinent part:

"A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j) of the Rules of Civil Procedure under any of the following circumstances . . ..

"(4) Local Injury; Foreign Act. — In any action for wrongful death occurring within this State or in any action claiming injury to person or property within this State arising out of an act or omission outside this State by the defendant, provided in addition that at or about the time of the injury either:

"a. Solicitation or services activities were carried on within this State by or on behalf of the defendant; or

"b. Products, materials or thing processed, serviced or manufactured by the defendant were used or consumed within this State in the ordinary course of trade."

The burden is on the plaintiffs to prove the existence of jurisdiction, but that burden can be met by a prima facie showing that jurisdiction is conferred by a statute such as this one. Further, the introductory language of this statute, set forth in § 1-75.1, and the case law interpreting it clearly indicate that the statutory provisions are to be construed liberally in favor of finding personal jurisdiction, as long as such a finding is consistent with due process. First Citizens Bank and Trust Co. v. McDaniel, 18 N.C. App. 644, 197 S.E.2d 556 (1973); Munchak Corporation v. Riko Enterprises, Inc., supra.

The plaintiffs allege that Northlake comes under the provisions of § 1-75.4(4) because, as a Hilton franchise, it benefits from the reputation of Hilton franchises in North Carolina; it is part of the network of motels that are covered by the general advertising campaign for all Hilton Inns and, as such, solicits business in North Carolina; and it makes use of and is part of the Hilton Reservation Service which is available at Hilton Inns in North Carolina. Specifically, the plaintiffs claim that brochures advertising Northlake were found in the Hilton Inn in Burlington, North Carolina;¹ that, in making their reservations with Northlake, they relied on advertising for Hilton Inns and the general reputation of Hilton Inns in North Carolina; and that their reservations at Northlake were made through the Hilton Inn in Burlington, where another member of their family was a full-time employee.

Defendant Northlake counters by asserting that plaintiffs' claims do not fall within the provisions of § 1-75.4(4) but, if they are covered at all, it is by § 1-75.4(1). Northlake further contends that the plaintiffs fail to meet the requirement of substantiality imposed by § 1-75.4(1). That portion of the statute reads, in pertinent part:

"A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j) of the Rules of Civil Procedure under any of the following circumstances:

"(1) Local Presence or Status. — In any action, whether the claim arises within or without this State, in which a claim is asserted against a party who when service of process is made upon the party; . . .

"Is engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise."

Defendant Northlake is correct in asserting that the claims being raised by the plaintiffs are not based upon a "local injury," as required by § 1-75.4(4). The alleged injuries took place in Georgia, not in North Carolina. The plaintiffs, while citizens of North Carolina, were not "within the State" at the time their injuries occurred, as required by this subsection of the statute.

It is a more plausible interpretation of the various subsections of § 1-75.4 to find that the plaintiffs' claims as set forth in the pleadings and sworn affidavits of this case should be considered under subsection (1), as suggested by the defendant. Here too, however, the plaintiffs are in difficulty. The plaintiffs are suing Northlake, a limited partnership in Georgia that holds a Hilton Inn franchise. They are not suing the franchisor which apparently runs the reservation system, grants franchises to motels in North Carolina, and does general advertising designed to promote all Hilton Inns. The most direct contact that the Northlake partnership might have with North Carolina, if the pleadings are to be taken in a light most favorable to the plaintiffs, is the placing of brochures advertising the Northlake Hilton Inn in the lobby of one Hilton Inn in North Carolina. This degree of solicitation of business can hardly be considered "substantial," as required by subsection (1) of the statute.

As noted above, however, North Carolina General Statutes § 1-75.4 does contain the admonition that its provisions must be liberally construed. Even if the language of the statute could be so generously interpreted as to permit the plaintiffs to proceed, there would still remain the matter of whether an exercise of jurisdiction by this Court would comport with the due process requirements of the Fourteenth Amendment.

In order for jurisdiction to be exercised, the defendant must be found to have "certain minimum contacts" with the State of the forum "such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). This concept of due process was extensively discussed in Erlanger Mills v. Cohoes Fibre Mills, 239 F.2d 502 (4th Cir. 1956):

"In recent years, however, the fictional phrase `constructive presence' has been replaced by tests couched in more realistic language. The standard of jurisdictional due process as now expressed is that the defendant have `certain minimum contacts' with the state of the forum, `such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."' International Shoe Co. v. State of Washington, supra, 326 U.S. at p. 316, 66 S.Ct. at p. 158, 90 L.Ed. 95; Travelers Health Association v. Com. of Virginia, 339 U.S. 643, 648, 70 S.Ct. 927, 94 L.Ed. 1154. The problem in each case, therefore, is to determine whether or not the relationships, ties, and contacts between the defendant and the state of the forum warrant jurisdiction."

A case which arose in this district also discussed "due process." In Golden Belt Manufacturing Co. v. Janler Plastic Mold Corp., 281 F.Supp. 368 (M.D.N.C.1967), this Court stated:

"Nevertheless, it cannot agree with the plaintiff that the law has been liberalized to the extent necessary to subject the defendant under this factual situation to the in personam jurisdiction of the court in North Carolina.

"The plaintiff argues `that the maintenance of the suit does not offend traditional notions of fair

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