DeArmon v. B. Mears Corp., 8326SC186

• Decision Date: 17 April 1984
• Docket Number: No. 8326SC186,8326SC186
• Citation: 314 S.E.2d 124,67 N.C.App. 640
• Court: North Carolina Court of Appeals
• Parties: Edd W. DeARMON, Jr., Administrator of the Estate of William Amarillo v. B. MEARS CORPORATION, a Florida Corporation, Richard Hensel and Marilyn Hensel, d/b/a Hensel & Sons, and Allen F. Canady.

Page 124

314 S.E.2d 124

67 N.C.App. 640

Edd W. DeARMON, Jr., Administrator of the Estate of William Amarillo v. B. MEARS CORPORATION, a Florida Corporation, Richard Hensel and Marilyn Hensel, d/b/a Hensel & Sons, and Allen

F. Canady.

No. 8326SC186.

Court of Appeals of North Carolina.

April 17, 1984.

DeLaney, Millette, DeArmon & McKnight by Steven A. Hockfield, Charlotte, for plaintiff-appellee.

Grier, Parker, Poe, Thompson, Bernstein, Gage & Preston by William E. Poe and Irvin W. Hankins, III, Charlotte, for defendant-appellant.

EAGLES, Judge.

I

The first issue is whether the trial court erred in denying defendant B. Mears Corporation's motion to dismiss for lack of in personnam jurisdiction over it. Resolution of this issue depends upon a two-part determination: (1) whether the statutes permit the courts of this jurisdiction to entertain the action against the defendant; and (2) if so, whether the exercise of this statutory power comports with due process of law. Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977). Defendant argues that neither prong of this test has been satisfied. We do not agree.

1. Statutory grounds. The pertinent "long-arm" statute is G.S. 1-75.4(3), which provides that 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) or Rule 4(j1) of the Rules of Civil Procedure under the following circumstances:

(3) Local Act or Omission.--In any action claiming injury to person or property or for wrongful death within or without this State arising out of an act or omission within this State by the defendant.

This statute is liberally construed to find personal jurisdiction over nonresident defendants to the full extent allowed by due process. Dillon, supra; Sparrow v. Goodman, 376 F.Supp. 1268 (W.D.N.C.1974).

In concluding that North Carolina had personal jurisdiction over B. Mears Corporation, the trial judge also relied upon G.S. 20-71.1(b), which provides in pertinent part as follows:

Proof of the registration of a motor vehicle in the name of any ... corporation, shall ... be prima facie evidence of ownership and that such motor vehicle was then being operated by and under the control of a person for whose conduct the owner was legally responsible, for the owner's benefit, and within the course and scope of his employment.

This statute shows a clear legislative intent to provide victims of highway collisions with the opportunity to recover from the owner as well as the driver of the vehicle involved in the accident. See Broadway v. Webb, 462 F.Supp. 429 (W.D.N.C.1977). It enables the plaintiff relying on an agency theory to submit a prima facie case to the jury. Scallon v. Hooper, 49 N.C.App. 113, 270 S.E.2d 496 (1980), disc. review denied, 301 N.C. 722, 276 S.E.2d 284 (1981). Since the owner of a vehicle may be held liable for the negligence of an non-owner/operator under the doctrine of respondeat superior, Howard v. Sasso, 253 N.C. 185, 116 S.E.2d 341 (1960), proof of ownership is sufficient to take the case to the jury on the question of the legal responsibility of the defendant for the operation of the vehicle. Travis v. Duckworth, 237 N.C. 471, 75 S.E.2d 309 (1953).

For the purpose of jurisdictional fact-finding, a prima facie showing is sufficient to support a finding of jurisdiction. See Ghazoul v. International Management Services, Inc., 398 F.Supp. 307 (S.D.N.Y.1975); Kemper v. Rohrich, 508 F.Supp. 444 (D.Kan.1980). Hence the evidence that B. Mears Corporation is the owner of the Peterbilt tractor constituted prima facie evidence of agency sufficient to support a finding of jurisdiction.

Applying the provisions of G.S. 1-75.4(3) and the prima facie showing of agency afforded by G.S. 20-71.1 to the facts alleged, i.e., that the deceased was killed in North Carolina by a motor vehicle owned by the defendant B. Mears Corporation, a Florida corporation, we conclude that the trial court was correct in holding, for purposes of the Rule 12(b) motion, that North Carolina does have personal jurisdiction over the B. Mears Corporation.

2. Minimum contacts. Due process requires that the defendant have certain minimum contacts with the forum state so that maintenance of the suit therein does not offend "traditional notions of fair play and substantial justice." International Shoe Company v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945). Whether the exercise of jurisdiction pursuant to the long-arm statute comports with due process is the critical inquiry. Chadbourn, Inc. v. Katz, 285 N.C. 700, 208 S.E.2d 676 (1974).

The determination of whether minimum contacts are present cannot be made by using a mechanical formula or rule of thumb, but must be made by ascertaining what is fair and reasonable and just in the circumstances, and depends upon the facts of a particular case. Dillon, supra; Farmer v. Ferris, 260 N.C. 619, 133 S.E.2d 492 (1963). Fairness to both the plaintiff and the defendant must be considered. Dillon, supra.

The criteria for determining whether sufficient minimum contacts exist include: the quantity, quality and nature of the contacts, the source and connection of the cause of action with the contacts and with the forum state; the interest of the forum state with respect to the activities and contacts of the defendant; an estimate of the inconvenience to the defendant in being forced to defend suit away from home; and the location of crucial witnesses and material evidence. Fieldcrest Mills, Inc. v. Mohasco Corp., 442 F.Supp. 424 (M.D.N.C.1977); Phoenix America Corp. v. Brissey, 46 N.C.App. 527, 265 S.E.2d 476 (1980); Georgia R.R. Bank & Trust Co. v. Eways, 46 N.C.App. 466, 265 S.E.2d 637 (1980).

Applying these criteria, we believe that defendant B. Mears Corporation has sufficient contacts with North Carolina that it is fair and does not offend due process to require defendant to defend in this state. The Peterbilt tractor owned by B. Mears Corporation was in North Carolina using North Carolina roads built and maintained to a large degree with North Carolina taxpayers' funds. This state has an obligation to protect persons using these roads, whether they are citizens of this state or out- of-state citizens. Indeed, plaintiff's intestate was a citizen of this state. The methods of protection are diverse and the cost of protection is substantial. B. Mears Corporation, through ownership of the vehicle, is using North Carolina highways and enjoys not only the use of the highways but also the protection afforded to all users.

The accident occurred on a North Carolina highway, so the cause of action arose in this state. Since the conduct giving rise to the cause of action occurred in North Carolina, material evidence and crucial witnesses are more likely to be located within this state. Further, the inconvenience to a corporate defendant in being forced to defend suit away from home is not overwhelming in today's mobile society.

North...