Hargett v. Reed

• Decision Date: 05 September 1989
• Docket Number: No. 883SC740,883SC740
• Citation: 95 N.C.App. 292,382 S.E.2d 791
• Court: North Carolina Court of Appeals
• Parties: Sarah White HARGETT and Coley Hargett, Jr. v. Mary Virginia REED and Eddie Winn.

Page 791

382 S.E.2d 791

95 N.C.App. 292

Sarah White HARGETT and Coley Hargett, Jr. v. Mary Virginia REED and Eddie Winn.

No. 883SC740.

Court of Appeals of North Carolina.

Sept. 5, 1989.

Robert G. Raynor Jr., New Bern, for plaintiffs-appellees.

Ward & Smith, P.A. by David A. Stoller, New Bern, for defendants-appellants.

BECTON, Judge.

We granted certiorari in this automobile accident case to determine whether the trial judge correctly denied the summary judgment motion of one of the nonresident defendants, Eddie Winn ("Winn"). Winn contests this State's exercise of personal jurisdiction over him, contending that he was not the owner of the car involved in the accident. Although denial of a motion for summary judgment ordinarily is not appealable, an appeal will lie, when, as here, the summary judgment motion was based on a challenge to personal jurisdiction. See, e.g., N.C.Gen.Stat. Sec. 1-277(b) (1983); cf. Poret v. State Personnel Comm'n, 74 N.C.App. 536, 538, 328 S.E.2d 880, 882, disc. rev. denied, 314 N.C. 117, 332 S.E.2d 491 (1985) (appeal from motion to dismiss for lack of jurisdiction over the person). For the reasons that follow, we affirm the order denying summary judgment.

I

The plaintiffs, Sarah White Hargett and Coley Hargett, Jr., alleged in their Complaint that Winn, a Georgia resident, was the owner of the 1979 Buick Regal which struck their car in New Bern, North Carolina, on 27 July 1986, seriously injuring Mrs. Hargett. Plaintiffs also alleged that the Buick's driver, defendant Mary Virginia Reed ("Reed"), also a Georgia resident, operated the car with Winn's permission. Pursuant to this State's long-arm statute, N.C.Gen.Stat. Sec. 1-75.4, and our nonresident motorist statute, N.C.Gen.Stat. Sec. 1-105, plaintiffs attempted substituted service of process on Winn by serving the North Carolina Commissioner of Motor Vehicles.

Winn moved for summary judgment, contending that this method of service was ineffective to confer jurisdiction over him because he was no longer the owner of the Buick, having sold the car to his employer, an automobile dealership, four days before the accident. Winn further alleged that the dealership sold the car the same day to an automobile rental company, which, in turn, rented it to defendant Reed.

Winn supported his motion with the following: (1) Winn's answers to plaintiffs' interrogatories, in which he denied owning the Buick; (2) his affidavit, in which he averred that he sold the Buick on 23 July 1986 to his employer, Sunshine Toyota, and that the employer-dealership subsequently sold the car the same day to H & L U-Save Auto Rentals ("H & L"); (3) attached to the affidavit as an exhibit, a copy of the certificate of title to the Buick--on its face, naming Winn as registered owner, and on the back, signed in blank by Winn, with no date and no indication to whom the Buick was sold; (4) also attached as exhibits to the affidavit, two receipts dated 23 July 1986, typed on the employer-dealership's forms, indicating that Winn sold the Buick to the dealership and that the dealership sold it to H & L; (5) defendant Reed's third-party Complaint against H & L, in which Reed alleged that the Buick was rented from H & L and that H & L was the owner of the car; and (6) plaintiff's Reply to Reed's counterclaim for property damage, in which plaintiffs alleged that H & L, not Reed, was the owner of the Buick.

To oppose the motion, plaintiffs offered the affidavit of the North Carolina state trooper who investigated the accident. In his affidavit, the trooper averred that he "obtained information at the scene ... indicating the registered owner of [the Buick bearing license number HWA266] to be Eddie Winn of Bristol, Georgia." Plaintiffs forecast no other evidence.

Winn appeals from denial of his motion for summary judgment, contending that Georgia law controls the ownership issue, and that under that State's law, ownership passed to the dealer even though the certificate of title was not properly assigned at the time of the sale. As a result, Winn asserts, North Carolina lacks personal jurisdiction over him. Winn further contends that the plaintiffs failed to come forward with admissible evidence to resist his motion for summary judgment, and, therefore, that he was entitled to judgment as a matter of law.

II

North Carolina's nonresident motorist statute provides a means for obtaining personal jurisdiction over any nonresident "involved" in an automobile accident in this State by virtue of the operation of a vehicle in North Carolina either "by ... or for" the nonresident, or by someone "under his control or direction, express or implied." N.C.Gen.Stat. Sec. 1-105 (1983). Under this statute, jurisdiction may be asserted over the owner of the vehicle as well as the driver so long as the owner had the legal right to control the car's operation. See, e.g., Howard v. Sasso, 253 N.C. 185, 116 S.E.2d 341 (1960); Davis v. St. Paul-Mercury Indemnity Co., 294 F.2d 641 (4th Cir.1961) (applying North Carolina law). As the court in Davis explained:

[North Carolina] has a strong interest in being able to provide a convenient forum where its citizens may be able to seek, from the owner as well as the actual operator, compensation for injuries that will often be extremely serious. Jurisdiction over the driver who inflicted the injury does not exhaust the state's interest; it is not pushing the matter too far to recognize that the state may also assert the jurisdiction of its courts over the owner who placed the vehicle in the driver's hands to take it onto the state's highways.

294 F.2d at 648.

Proof of registration of the vehicle in a person's name raises a rebuttable statutory presumption that the named person was the owner of the vehicle, that he was legally responsible for the driver's actions, and that the car was operated for his benefit and with his authority, consent, and knowledge. N.C.Gen.Stat. Sec. 20-71.1 (1983). See DeArmon v. B. Mears Corp., 312 N.C. 749, 755-56, 325 S.E.2d 223, 228 (1985). However, this evidentiary presumption is not conclusive, and merely permits, but does not compel, a finding that the driver was the owner's agent. Id. at 756, 325 S.E.2d at 228. When the owner presents positive evidence, which, if believed, establishes the absence of agency, the only issue becomes whether the judge believes that contrary evidence. Id. at 756, 325 S.E.2d at 228.

III

The key issue to be determined is whether Winn successfully proved that he was not the owner of the car involved in the collision. If Winn did so, North Carolina has no basis for asserting jurisdiction over him, and summary judgment should have been granted in his favor. If Winn failed to establish that he was no longer the owner of the car, a genuine issue of material fact remains for trial, and summary judgment was properly denied.

A

We turn first to the parties' choice of law arguments. Winn contends that under the "interest analysis" approach to choice of law questions, Georgia law should determine the ownership issue because Winn's contract to sell the Buick to the dealership was formed in that state. Under Georgia law, Winn asserts, sale of a vehicle is effective to transfer ownership even if the seller fails to properly assign the certificate of title to the buyer.

Plaintiffs disagree, asserting that North Carolina law controls the ownership question because this State adheres to the traditional choice of law rule that substantive rights and obligations arising out of a tort action are to be determined by the law of the situs of the claim. See Boudreau v. Baughman, 322 N.C. 331, 368 S.E.2d 849 (1988). Plaintiffs argue that the alleged sale was ineffective to transfer ownership under North Carolina law because the certificate of title was not properly assigned to the dealer. See N.C.Gen.Stat. Sec. 20-72(b) (1983); see also Jenkins v. Aetna Cas. & Sur. Co., 324 N.C. 394, 378 S.E.2d 773 (1989).

Both parties' contentions are flawed. Section 20-72 applies only to vehicles registered under the provisions of the North Carolina Motor Vehicle Act; here, the Buick was registered under Georgia's Certificate of Title Act. More importantly, "[c]hoice of law is a separate inquiry from personal jurisdiction and the two should not be confused." Terry v. Pullman Trailmobile, 92 N.C.App. 687, 694, 376 S.E.2d 47, 51 (1989) (emphasis added). The relevant inquiry in a challenge to a forum state's exercise of personal jurisdiction is whether the nonresident defendant had sufficient minimum contacts with the state so as not to offend " 'traditional notions of fair play and substantial justice.' " Dillon v. Numismatic Funding Corp., 291 N.C. 674, 678, 231 S.E.2d 629, 632 (1977) (citations omitted). Winn's only contact with this State is through his alleged ownership of a vehicle involved in an accident here.

In our view, it would be manifestly unjust, if not absurd, to require a nonresident, who must comply with his own state's requirements for title transfer, to comply with the requirements of all other states to which a subsequent purchaser might someday take the vehicle--or face being subject to jurisdiction there. Thus, we believe that in deciding the threshold jurisdiction question, due process considerations require Winn's status as owner to be examined under the law of Georgia, the state governing his title to and registration of the Buick.

B

Georgia's Certificate of Title Act defines an "owner" as "a person, other than a lienholder or a security interest holder, having ... title to a vehicle." Ga.Code Ann. Sec. 40-1-1(34) (Supp.1988). Section 40-3-31(d) of the Act provides Except ... as between the parties, a transfer by an owner is not effective until this Code section and Code Section 40-3-32 [concerning transfers to or from a dealer] have been complied with; and no purchaser or transferee shall acquire any right, title, or interest in and to a vehicle purchased by him unless and until...