Credit Union Auto Buying Serv., Inc. v. Burkshire Props. Grp. Corp., COA15–187.

Decision Date15 September 2015
Docket NumberNo. COA15–187.,COA15–187.
Citation776 S.E.2d 737,243 N.C.App. 12
CourtNorth Carolina Court of Appeals
Parties CREDIT UNION AUTO BUYING SERVICE, INC., Plaintiff, v. BURKSHIRE PROPERTIES GROUP CORP., Joseph Felix Strevell and Chauncey Strevell, all individually and d/b/a Joe's Garage and RJC Trading Company; State Line Auto Auction, Inc., Straight Line, L.L.C., Defendants.

Spillman Thomas & Battle, PLLC, Winston–Salem, by Bryan G. Scott, for plaintiff-appellee.

Connors Morgan, PLLC, by Jeffrey T. Workman, and Daniel W. Koenig, Greensboro, for defendant-appellant.

ZACHARY, Judge.

Where the property at issue was located in North Carolina, the trial court did not err in exercising quasi in rem jurisdiction over the controversy.

I. Factual and Procedural Background

Credit Union Auto Buying Service, Inc. (appellee CUABS) is a not-for-profit corporation organized under North Carolina law, with its principal place of business in Winston–Salem, North Carolina. CUABS is an automobile dealer that sells cars, primarily to credit unions. State Line Auto Auction, Inc. (State Line) is a company incorporated in New York, with its principal place of business in Waverly, New York. State Line acts as a broker for vehicle sales at its auction location in Waverly. Burkshire Properties Group Corp., doing business as Joe's Garage and RJC Trading Company, (Burkshire) is another corporation organized under New York law with its place of business in New York; it is owned by Joseph Felix Strevell and Chauncey Strevell (the Strevells).

Burkshire purchased vehicles from State Line under a line of credit extended by Straight Line, L.L.C. (appellant Straight Line). Appellant Straight Line maintained a security interest in the vehicles and retained the certificates of title to the vehicles as collateral. All transactions between Burkshire, State Line, and appellant Straight Line occurred in New York.

Appellee CUABS began purchasing vehicles from Burkshire in January of 2013. Appellee CUABS would pay money to Burkshire to cover the price of the vehicles, the buyer's fees, fees to transfer certificates of title, and fees for delivery of the vehicles to North Carolina for resale. In April of 2014, Burkshire failed to provide to appellee CUABS the certificates of title for 46 vehicles that appellee CUABS had purchased. The vehicles at issue had been purchased by Burkshire at a State Line auction with financing provided by appellant Straight Line, and appellant Straight Line claimed a security interest in the vehicles. Burkshire delivered these vehicles to appellee CUABS in North Carolina.

On 10 June 2014, appellee CUABS brought this action against Burkshire, the Strevells, State Line, and appellant Straight Line, alleging breach of contract and unjust enrichment, and seeking a declaratory judgment and specific performance. On 25 August 2014, appellant Straight Line moved to dismiss the complaint pursuant to Rule 12(b)(2) of the North Carolina Rules of Civil Procedure due to an alleged lack of personal jurisdiction. On 13 November 2014, the trial court denied this motion.

Appellant Straight Line filed timely notice of appeal.

II. Standard of Review

As a general rule, denial of a motion to dismiss is deemed to be interlocutory, and is not immediately reviewable by this Court. An exception lies, however, as concerns a denial of a motion to dismiss based on a lack of personal jurisdiction. N.C. Gen.Stat. § 1–277 "allows a party to immediately appeal an order that ... constitutes an adverse ruling as to personal jurisdiction." Can Am S., LLC v. State, ––– N.C.App. ––––, ––––, 759 S.E.2d 304, 307, review denied, 367 N.C. 791, 766 S.E.2d 624 (2014). This right of immediate appeal "is limited to rulings on ‘minimum contacts' questions, the subject matter of Rule 12(b)(2)." Love v. Moore, 305 N.C. 575, 581, 291 S.E.2d 141, 146 (1982). Accordingly, this matter is proper for review by this Court at this time.

Additionally, it is well established that:

[t]he determination of whether jurisdiction is statutorily and constitutionally permissible due to contact with the forum is a question of fact. The standard of [appellate] review of an order determining personal 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.

Wyatt v. Walt Disney World Co., 151 N.C.App. 158, 163, 565 S.E.2d 705, 708 (2002) (quoting Replacements, Ltd. v. MidweSterling, 133 N.C.App. 139, 140–141, 515 S.E.2d 46, 48 (1999) ).

III. Personal Jurisdiction

Appellant Straight Line contends that the trial court erred in denying its motion to dismiss for lack of personal jurisdiction. We disagree.

The appropriate exercise of personal jurisdiction by our courts is determined first by the existence of a statutory basis for the exercise of jurisdictional authority, and second by the dictates of federal due process.

The trial court in the instant case exercised quasi in rem jurisdiction over the controversy pursuant to N.C. Gen.Stat. § 1–75.8. This statute provides that quasi in rem jurisdiction may be invoked "[w]hen the subject of the action is real or personal property in this State and the defendant has or claims any lien or interest therein, or the relief demanded consists wholly or partially in excluding the defendant from any interest or lien therein." N.C. Gen.Stat. § 1–75.8(1) (2013). In the instant case, appellee CUABS's claim concerned the security interest in several vehicles it had purchased and the certificates of title to said vehicles.

Even though quasi in rem jurisdiction is provided by statute, such jurisdiction must also meet the standards of federal law. "[T]he final determinative factor is whether the nonresident defendant has certain minimum contacts with the forum state such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ " Canterbury v. Monroe Lange Hardwood Imports Div. of Macrose Indus.Corp., 48 N.C.App. 90, 93, 268 S.E.2d 868, 870 (1980) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945) ). There are two forms of personal jurisdiction which might bring this case within the jurisdiction of North Carolina courts: specific jurisdiction, in which the controversy arises from a defendant's contact with the forum state; and general jurisdiction, in which, although the controversy is unrelated to defendant's activities within the forum, sufficient contacts exist between defendant and the forum so as to permit jurisdiction. Wyatt, 151 N.C.App. at 165, 565 S.E.2d at 709. Specific jurisdiction exists if the defendant has purposely directed his conduct towards a resident of the forum state, and thereby "purposefully availed itself of the privilege of conducting activities in-state, thereby invoking the benefits and protections of the forum state's laws," whereas general jurisdiction exists if the defendant has continuous and systematic contacts with the forum state. Id. at 165, 565 S.E.2d at 710.

The United States Supreme Court has held that "when claims to the property itself are the source of the underlying controversy between the plaintiff and the defendant, it would be unusual for the State where the property is located not to have jurisdiction." Shaffer v. Heitner, 433 U.S. 186, 207, 97 S.Ct. 2569, 2581, 53 L.Ed.2d 683, 700 (1977). This Court, relying on Shaffer, has upheld jurisdiction where the property at issue was located in North Carolina. For example, in Canterbury, the plaintiff, based in West Virginia, sought and obtained an order of attachment on a quantity of lumber...

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3 cases
  • Dipasupil v. Neely
    • United States
    • North Carolina Court of Appeals
    • November 19, 2019
    ...lack of personal jurisdiction "is limited to rulings on minimum contacts questions." Credit Union Auto Buying Serv., Inc. v. Burkshire Props. Grp. Corp. , 243 N.C. App. 12, 14, 776 S.E.2d 737, 739 (2015) (internal quotation marks and citation omitted)."Ordinarily, an order denying a motion ......
  • U.S. Chem. Storage, LLC v. Berto Constr., Inc.
    • United States
    • North Carolina Court of Appeals
    • May 2, 2017
    ...of the court over a person or property based upon minimum contacts. See Credit Union Auto Buying Servs., Inc. v. Burkshire Props. Grp. Corp. , ––– N.C. App. ––––, ––––, 776 S.E.2d 737, 739 (2015) (holding that N.C. Gen. Stat. § 1-277(b) guarantees a right to immediate appeal that is limited......
  • A&D Envtl. Servs., Inc. v. Miller
    • United States
    • North Carolina Court of Appeals
    • September 15, 2015

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