Cameron-Brown Co. v. Daves

Decision Date18 November 1986
Docket NumberCAMERON-BROWN,No. 8626SC486,8626SC486
Citation350 S.E.2d 111,83 N.C.App. 281
PartiesCOMPANY v. Gene A. DAVES.
CourtNorth Carolina Court of Appeals

Hamel, Helms, Cannon, Hamel & Pearce, P.A. by Hugo A. Pearce, III and James M. Gilbert, III, Charlotte, for plaintiff-appellant.

Haynes, Baucom, Chandler, Claytor, Benton & Morgan, P.A. by Rex C. Morgan, Charlotte, for defendant-appellee.

BECTON, Judge.

Cameron-Brown Company, a North Carolina corporation, filed this action against Gene A. Daves, a resident of South Carolina, for recovery of unpaid insurance premiums. Mr. Daves moved to dismiss pursuant to Rule 12(b) of the Rules of Civil Procedure for lack of personal jurisdiction. The trial court, after considering the arguments of counsel and affidavits submitted by the parties, concluded that Mr. Daves lacked the minimal contacts with North Carolina necessary to justify the assertion of jurisdiction over him. From the trial judge's order dismissing the action, Cameron-Brown appeals. We affirm.

I

From 1 January 1983 to 31 December 1984, Cameron-Brown contracted to provide insurance coverage for a number of motor vehicles owned and operated by Mr. Daves. Cameron-Brown's Complaint alleges that Mr. Daves is currently in default with respect to that insurance coverage in the amount of $32,659.78.

On the day the Complaint was filed, Cameron-Brown attached three checks totaling $23,675.71 payable to Mr. Daves from Atlas Underwriters, Inc. The parties disagree with regard to the location of the insured vehicles and with respect to the extent of Mr. Daves' contacts, if any, with the State of North Carolina. Mr. Daves supported his motion to dismiss with an affidavit in which he asserted the following.

Mr. Daves is a life-long citizen and resident of York County, South Carolina. He owns no real or personal property located in North Carolina, and the equipment insured by the policies referred to in the Complaint had its situs in South Carolina. The business conducted by Mr. Daves with Cameron-Brown was solicited by Cameron-Brown, with all contract negotiations taking place in South Carolina. At no relevant time did Mr. Daves travel to North Carolina to conduct business with Cameron-Brown; rather, when a meeting was necessary, a representative of Cameron-Brown would travel to South Carolina to meet with Mr. Daves.

In contrast, Cameron-Brown produced an affidavit of Mr. Thompson, one of its employees, whose assertions were based solely upon his review of the insurance company's books and records. Mr. Thompson stated that most of the insurance policies showed on their faces that they were written for equipment located in North Carolina. He further avowed that the policies were written in Cameron-Brown's Charlotte office and delivered to Mr. Daves in South Carolina, that bills were sent from Charlotte to Mr. Daves in South Carolina, and that payment was returned by Mr. Daves to the Charlotte office. Furthermore, almost all of the business between Cameron-Brown and Mr. Daves was conducted pursuant to telephoned requests to Charlotte from Mr. Daves for additional insurance coverage, and Mr. Daves occasionally travelled to Charlotte to transact business with the company.

II

Cameron-Brown maintains that Mr. Daves is subject to both in personam and quasi in rem jurisdiction. For the reasons discussed hereafter, we conclude that neither theory of jurisdiction is applicable in this case.

A In Personam Jurisdiction

A two-step test is utilized to resolve a question of in personam jurisdiction over a non-resident defendant: (1) Does a basis for jurisdiction exist under the North Carolina "long-arm" statute, N.C.Gen.Stat.Sec. 1-75.4 (1983); and (2) If so, will the exercise of this jurisdiction over the defendant comport with constitutional standards of due process? E.g., Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977); J.M. Thompson Co. v. Doral Manufacturing Co., 72 N.C.App. 419, 324 S.E.2d 909, disc. rev. denied, 313 N.C. 603, 330 S.E.2d 611 (1985).

In answer to the first inquiry, Cameron-Brown asserts that the following statutory grounds justify assertion of jurisdiction over Mr. Daves: (1) that the action arises out of a promise made to Cameron-Brown by Mr. Daves to pay for services to be performed in this State by the insurance company, G.S.Sec. 1-75.4(5)(a); (2) that the action arises out of services actually performed by Cameron-Brown for Mr. Daves in this State, G.S.Sec. 1-75.4(5)(b); (3) that the action arises out of a promise by Mr. Daves to deliver within this State things of value (insurance premiums), G.S.Sec. 1-75.4(5)(c); (4) that the action arises out of a contract of insurance and Cameron-Brown was a resident of this State when the "event" occurred out of which the claim arises, G.S.Sec. 1-75.4(10)(a); and (5) that Mr. Daves has been involved in "substantial activity" within this State, G.S.Sec. 175.4(1)(d). The ground for the trial court's ruling that jurisdiction over Mr Daves does not exist was not lack of a statutory basis for jurisdiction, but lack of the necessary minimum contacts to satisfy due process. Moreover, Mr. Daves does not seriously contest the lack of a statutory basis. Therefore, we hold, without further discussion, that this action comes within the North Carolina jurisdictional statutes.

Despite the existence of a statutory basis for jurisdiction, due process prohibits our state courts from exercising that jurisdiction unless the defendant has had certain "minimum contacts" with the forum state such that "traditional notions of fair play and substantial justice" are not offended by maintenance of the suit. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The existence of adequate minimum contacts is not to be determined by an application of mechanical or per se rules, but rather by a careful scrutiny of the particular facts of each case. E.g., International Shoe Co.; Dillon v. Numismatic Funding Corp.; Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C.App. 466, 265 S.E.2d 637 (1980). Some factors to be considered are: (1) quantity of the contacts between the defendant and the forum state, (2) quality and nature of the contacts, (3) the source and connection of the cause of action to the contacts, (4) the interest of the forum state, and (5) convenience of the parties. E.g., Marion v. Long, 72 N.C.App. 585, 325 S.E.2d 300 (1985). Other factors are the location of critical witnesses and material evidence, and the existence of a contract which has a substantial connection with the forum state. Georgia R.R. Bank & Trust Co. v. Eways. Although the application of the "minimum contacts" standard may vary with the facts of each case, it is essential that there be some act by which the defendant purposefully availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528, 542 (1985); Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283, 1298 (1958); United Buying Group v. Coleman, 296 N.C. 510, 251 S.E.2d 610 (1979).

Before applying the foregoing criteria to the instant case, we further review the standards by which we must weigh the record before us. Absent a request by one of the parties, the trial court is not required to make findings of fact when ruling on a motion. Instead, it will be presumed that the judge, upon proper evidence, found facts sufficient to support his ruling. J.M. Thompson Co. v. Doral Manufacturing Co., 72 N.C.App. at 424, 324 S.E.2d at 912-13. If the presumed findings of fact are supported by competent evidence, they are conclusive on appeal despite evidence to the contrary. Id. See also Fungaroli v. Fungaroli, 51 N.C.App. 363, 276 S.E.2d 521, disc. rev. denied, 303 N.C. 314, 281 S.E.2d 651 (1981). Cameron-Brown did not request the trial court to make findings of fact. Thus the issue before us is sufficiency of the evidence.

In the case sub judice, the parties presented affidavits which materially conflicted. The trial judge apparently believed the evidence of Mr. Daves and presumably found the facts to be as set forth and supported by his affidavit. Assuming as we must, therefore, that Mr. Daves' insured vehicles and equipment were all located in South Carolina, that Cameron-Brown solicited and initiated their business dealings, that contract negotiations occurred in South Carolina, that Mr. Daves owned no property in North Carolina nor ever travelled here to conduct business with Cameron-Brown, it appears that Mr. Daves' only contact with the state of North Carolina was the mailing of premium payments to Cameron-Brown's Charlotte office pursuant to the insurance contracts. We conclude that this, standing alone, is insufficient contact to justify requiring him to litigate here.

We are aware that in Wohlfahrt v. Schneider, 66 N.C.App. 691, 311 S.E.2d 686 (1984), this court held that a non-resident defendant who obligated himself to make payments pursuant to a promissory note...

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