Church v. Carter

• Citation: 380 S.E.2d 167,94 N.C.App. 286
• Decision Date: 20 June 1989
• Docket Number: No. 8823SC930,8823SC930
• Court: Court of Appeal of North Carolina (US)
• Parties: Wayne G. CHURCH, Bruce M. Church, and Vernon Foster v. James R. CARTER.

Page 167

380 S.E.2d 167

94 N.C.App. 286

Wayne G. CHURCH, Bruce M. Church, and Vernon Foster v. James R. CARTER.

No. 8823SC930.

Court of Appeals of North Carolina.

June 20, 1989.

Vannoy, Moore, Colvard, Triplett, Freeman & McLean by Anthony R. Triplett, North Wilkesboro, for plaintiff-appellees.

McElwee, McElwee, Cannon & Warden by William C. Warden, Jr., North Wilkesboro, for defendant-appellant.

BECTON, Judge.

This is an appeal from an order denying defendant's motion to dismiss a Complaint for lack of subject matter and personal jurisdiction. We affirm.

Plaintiffs, Wayne G. Church, Bruce M. Church, and Vernon Foster, are residents and citizens of North Carolina. Defendant, James R. Carter, is a resident and citizen of South Carolina. In 1986, plaintiffs and defendant entered into an oral agreement to form the Kings Port Partnership. The purpose of this venture was to purchase, construct, and sell various condominium units and patio-home lots in North Myrtle Beach, South Carolina. Plaintiffs allege that, in their roles as financial investors in the partnership, they forwarded sums of money to defendant for his use in acquiring options on five tracts of land in South Carolina. Plaintiffs sent these monies to South Carolina from Wilkes County, North Carolina. In August 1986, the partnership executed a guaranty agreement, in favor of Southern National Bank of North Carolina, to secure a $60,000 loan. Defendant signed the guaranty on behalf of the partnership.

In 1987, plaintiffs filed a Complaint in the Superior Court of Wilkes County, charging defendant with fraud and praying for damages, an accounting, and dissolution of the partnership. Defendant moved to dismiss the Complaint, pursuant to Rule 12(b)(1) and Rule 12(b)(2) of the Rules of Civil Procedure, for lack of subject matter and personal jurisdiction. Following a hearing, the trial judge denied the motion, and defendant appealed.

I

Ordinarily, an order denying a motion to dismiss for lack of subject matter jurisdiction is interlocutory and is not immediately appealable. Shaver v. N.C. Monroe Constr. Co., 54 N.C.App. 486, 487, 283 S.E.2d 526, 527 (1981), cited with approval, Teachy v. Coble Dairies, Inc., 306 N.C. 324, 327, 293 S.E.2d 182, 184 (1982). However, since defendant also has challenged the trial court's power to exercise personal jurisdiction over him, we must, at this time, decide the issue he has raised concerning subject matter jurisdiction. See N.C.Gen.Stat. Sec. 1-75.4 (1983) (subject matter jurisdiction prerequisite to court's exercising personal jurisdiction); W. Shuford, North Carolina Civil Practice and Procedure Sec. 12-6, n. 1 (1988).

N.C.Gen.Stat. Sec. 7A-240 (1983) confers subject matter jurisdiction on the trial divisions of the General Courts of Justice "[in] all justiciable matters of a civil nature," except for areas in which jurisdiction specifically lies elsewhere. See Harris v. Pembaur, 84 N.C.App. 666, 668, 353 S.E.2d 673, 675 (1987). Defendant contends that North Carolina lacks subject matter jurisdiction because the Kings Port Partnership is a South Carolina business entity. For reasons we shall elaborate upon infra., we conclude that the judge found that plaintiffs and defendant formed a North Carolina partnership. Evidence in the record supports this finding. Plaintiffs' allegations of fraud, their demand for an accounting from defendant, and their prayer that the court dissolve the partnership are clearly justiciable in our courts. See N.C.Gen.Stat. Secs. 59-51, 59-52, and 59-62 (1982 & Supp.1988).

Defendant contends that plaintiffs have made a demand for one-fourth of the guaranty amount but have not alleged that a default on the loan repayment has occurred. Defendant thus argues that plaintiffs, in making their demand, have failed to state a claim against him. The alleged failure of a complaint to state a cause of action for which relief can be granted, however, does not equate with a lack of jurisdiction over the subject matter of the complaint. Dale v. Lattimore, 12 N.C.App. 348, 352, 183 S.E.2d 417, 419-20 (1971), cert. denied, 279 N.C. 619, 184 S.E.2d 113 (1971).

We hold that North Carolina has subject matter jurisdiction to adjudicate each of plaintiffs' claims against defendant, and we overrule this assignment of error.

II

Defendant next argues that the trial judge erred by denying defendant's motion to dismiss the Complaint for lack of personal jurisdiction. It is well-established that determining whether a forum has jurisdiction over a defendant necessitates a two-step analysis. See Dillon v. Numismatic Funding Corp., 291 N.C. 674, 675, 231 S.E.2d 629, 630 (1977). First, we determine whether statutory authority confers jurisdiction upon our courts. Id. The second, and critical, inquiry is this: Will the exercise of jurisdiction violate constitutional guarantees of due process? Brickman v. Codella, 83 N.C.App. 377, 380, 350 S.E.2d 164, 166 (1986).

Plaintiffs bear the burden of showing, by a preponderance of the evidence, that defendant placed himself within the reach of our jurisdictional statutes. J.M. Thompson Co. v. Doral Mfg. Co., Inc., 72 N.C.App. 419, 423, 324 S.E.2d 909, 912 (1985), disc. rev. denied, 313 N.C. 602, 330 S.E.2d 611 (1985). When the parties do not request that the judge make findings of fact in support of a ruling on a motion to dismiss, we presume that the judge found facts sufficient to support the judgment. Id. 72 N.C.App. at 423-24, 324 S.E.2d at 912. Our task is to determine whether the presumed findings of fact are supported by competent evidence in the record; if they are, the findings are conclusive on appeal, notwithstanding other evidence in the record to the contrary. See id. at 424, 324 S.E.2d at 912-13.

We turn now to the question whether statutory authority allows our courts to exercise jurisdiction over this defendant.

A

N.C.Gen.Stat. Sec. 1-75.4 (1983), the North Carolina "long-arm" statute, lists twelve "circumstances" under which a court, having subject matter jurisdiction, will also acquire personal jurisdiction. Our statute is designed to extend jurisdiction over nonresident defendants to the fullest limits permitted by the Fourteenth Amendment's due-process clause. E.g., Pope v. Pope, 38 N.C.App. 328, 330, 248 S.E.2d 260, 261 (1978). We thus give a broad and liberal construction to the provisions of the statute, within the perimeters established by federal due process. See First Nat'l Bank v. Gen. Funding Corp., 30 N.C.App. 172, 176, 226 S.E.2d 527, 530 (1976).

Plaintiffs contend that statutory jurisdiction lies under several of the provisions listed in Section 1-75.4. As any one of the enumerated circumstances is adequate to meet the statutory requirement, we need not examine and discuss each of the circumstances plaintiffs allege exist in this case. From the evidence in the record, we are satisfied that the judge correctly found that statutory jurisdiction lies.

In their Complaint and affidavits, plaintiffs allege they advanced $67,500 to defendant, at his direction, to be used by him to acquire options on certain real property in South Carolina and to obtain a mobile home for use in the partnership business. Plaintiffs maintain that these monies were sent to defendant from Wilkes County. Consequently they argue, Section 1-75.4(5)(d) applies. Subsection 5(d) confers jurisdiction when "things of value [are] shipped from this State by the plaintiff to the defendant on his order or direction." We agree with plaintiffs that subsection 5(d) is applicable.

In Pope, we held that "[m]oney payments are clearly a thing of value" under subsection (5)(c) of the long-arm statute. In Schofield v. Schofield, we said such payments also constituted "things of value" under subsection (5)(d). 78 N.C.App. 657, 660, 338 S.E.2d 132, 134 (1986). Both Pope and Schofield were domestic cases involving spousal-support payments. Their holdings, however, apply here. We hold that plaintiffs shipped "things of value" to defendant at his direction, and that statutory jurisdiction is thus established under Section 1-75.4(5)(d).

Having satisfied the first test of our two-part inquiry, we turn to the question whether the court's exercise of jurisdiction in this case comports with the due-process safeguards to which defendant is entitled.

B

Constitutional due process requires that a defendant have sufficient "minimum contacts" with the forum state so that that state's exercise of personal jurisdiction "does not offend 'traditional notions of fair play and substantial justice.' " Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945) (citations omitted); see Miller v. Kite, 313 N.C. 474, 477, 329 S.E.2d 663, 665 (1985). The existence of such contacts is determined by a careful consideration of the facts of each case in order to ascertain what is just under the circumstances. Brickman, 83 N.C.App. at 380, 350 S.E.2d at 166. Factors we consider are these: 1) the quantity of the contacts; 2) the nature and quality 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 to the parties. Marion v. Long, 72 N.C.App. 585, 587, 325 S.E.2d 300, 302, disc. rev. denied and appeal dismissed, 313 N.C. 604, 330 S.E.2d 612 (1985). The location of critical witnesses and material evidence, and the existence of a contract having a substantial connection with the forum state are also probative concerns. Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C.App. 466, 469, 265 S.E.2d 637, 640 (1980). In each case, it is essential that there be some act by which the defendant purposefully adopts "the privilege of conducting activities within the forum State, thus invoking the protections and benefits of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283, 1298, reh'g denied, 358 U.S. 858, 79 S.Ct. 10, 3 L.Ed.2d 92 (1958) (citation omitted); see ...