Havey v. Valentine

• Decision Date: 16 August 2005
• Docket Number: No. COA04-1298.,COA04-1298.
• Citation: 616 S.E.2d 642
• Parties: Timothy HAVEY and Marilyn Sommers, Plaintiffs, v. Mark VALENTINE, Yellow Roadway Corporation and Yellow Transportation, Inc., Defendants and Third-Party Plaintiffs, v. Stahler Furniture Company, Third-Party Defendant.
• Court: North Carolina Supreme Court

616 S.E.2d 642

Timothy HAVEY and Marilyn Sommers, Plaintiffs, v. Mark VALENTINE, Yellow Roadway Corporation and Yellow Transportation, Inc., Defendants and Third-Party Plaintiffs, v. Stahler Furniture Company, Third-Party Defendant.

No. COA04-1298.

Court of Appeals of North Carolina.

August 16, 2005.

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Appeal by third-party defendant from an order entered 24 August 2004 by Judge Howard E. Manning, Jr. in Wake County Superior Court. Heard in the Court of Appeals 20 April 2005.

Smyth & Cioffi, L.L.P., by Andrew P. Cioffi, Raleigh, for plaintiff-appellees.

Teague, Campbell, Dennis & Gorham, L.L.P., by J. Matthew Little and Robert M. Tatum, Raleigh, for defendants/third-party plaintiff-appellees.

Cranfill, Sumner & Hartzog, L.L.P., by F. Marshall Wall and Kari R. Johnson, Raleigh, for third-party defendant-appellant.

HUNTER, Judge.

Third-party defendant, Stahler Furniture Company ("Stahler Furniture"), appeals the trial court's order denying its motion to dismiss for lack of personal jurisdiction. After careful review, we reverse the order below.

The record tends to indicate the following: Stahler Furniture is a Vermont corporation located in Lyndonville, Vermont. Timothy Havey ("Havey") and Marilyn Sommers ("Sommers") (collectively "plaintiffs") are North Carolina residents. On or about 22 July 2003, plaintiffs visited the Stahler Furniture store in Vermont and purchased a corner cabinet and an end table. Stahler Furniture contracted with defendants and third-party plaintiffs, Yellow Transportation, Inc. ("Yellow Transportation"), an Indiana corporation, to transport the furniture to plaintiffs' residence in North Carolina from Stahler Furniture's business facility in Lyndonville, Vermont.

Specifically, on or about 10 November 2003, Stahler Furniture contracted with Yellow Transportation to deliver an end table and corner cabinet to plaintiffs' home in Raleigh, North Carolina. Defendant Mark Valentine ("Valentine") was the truck driver. On 14 November 2003, Valentine arrived at plaintiffs' home. According to plaintiffs' complaint, as Valentine was unloading a crate containing a piece of furniture from the tractor-trailer, Valentine pushed the crate out of the truck "in an unsafe and dangerous manner causing it to fall on and permanently injure" Havey.

On 12 March 2004, Havey and Sommers filed a complaint against Valentine and Yellow Transportation alleging negligence. Defendants answered and filed a third-party complaint against Stahler Furniture alleging negligence, negligent misrepresentation, and breach of contract. Stahler Furniture filed a N.C. Gen.Stat. § 1A-1, Rule 12(b)(2) motion to dismiss the third-party complaint for lack of personal jurisdiction. On 24 August 2004, the trial court denied Stahler Furniture's motion. Stahler Furniture appeals.

"`The standard of review of an order determining 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.'" Tejal Vyas, LLC v. Carriage Park Ltd. P'ship, 166 N.C.App. 34, 37, 600 S.E.2d 881, 884 (2004) (quoting Better Business Forms, Inc. v. Davis, 120 N.C.App. 498, 500, 462 S.E.2d 832, 833 (1995)), per curiam affirmed, 359 N.C. 315, 608 S.E.2d 751 (2005). In this case, however, the trial court made no findings of fact. "Where no findings are made, proper findings are presumed, and our role on appeal is to review the record for competent evidence to support these presumed findings." Bruggeman v. Meditrust Acquisition Co., 138 N.C.App. 612, 615, 532 S.E.2d 215, 217-18, appeal dismissed and disc. review denied, 353 N.C. 261, 546 S.E.2d 90 (2000).

Our Supreme Court has held that

a two-step analysis must be employed to determine whether a non-resident defendant is subject to the in personam jurisdiction of our courts. First, the transaction must fall within the language of the State's "long-arm" statute. Second, the exercise of jurisdiction must not violate the due process clause of the fourteenth amendment to the United States Constitution.

Tom Togs, Inc. v. Ben Elias Industries Corp., 318 N.C. 361, 364, 348 S.E.2d 782, 785 (1986) (citation omitted). For purposes of this appeal, neither party disputes that North Carolina's long-arm statute applies to the facts of this case. Thus, our inquiry focuses upon whether the exercise of personal jurisdiction would violate the due process clause of the Fourteenth Amendment to the United States Constitution.

To comply with due process, there must be minimum contacts between the non-resident defendant and the forum so that allowing the suit does not offend traditional notions of fair play and substantial justice. Id. at 365, 348 S.E.2d at 786 (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95, 102 (1945)).

[T]here must be some act by which the defendant purposefully avails himself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws; the unilateral activity within the forum state of others who claim some relationship with a non-resident defendant will not suffice.

Id.

"When a controversy is related to or `arises out of' a defendant's contacts with the forum, the [United States Supreme] Court has said that a `relationship among the defendant, the forum, and the litigation' is the essential foundation of in personam jurisdiction." Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404, 411 (1984) (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683[, 698] (1977)). This type of personal jurisdiction has been characterized as specific jurisdiction. Id. at 414 n. 8, 104 S.Ct. at 1872 n. 8, 80 L.Ed.2d at 411 n. 8. When the suit does not arise out of a defendant's activities in the forum state, personal jurisdiction is present when there are sufficient contacts between the state and the defendant. Id. at 414, 104 S.Ct. 1868, 80 L.Ed.2d at 411. This type of personal jurisdiction has been characterized as "general jurisdiction." Id. at 414 n. 9, 104 S.Ct. at 1872 n. 9, 80 L.Ed.2d at 411 n. 9.

A. Specific Jurisdiction

"`Specific jurisdiction exists if the defendant has purposely directed its activities toward the resident of the forum and the cause of action relates to such activities.'" Wyatt v. Walt Disney World Co., 151 N.C.App. 158, 165, 565 S.E.2d 705, 710 (2002) (quoting Frisella v. Transoceanic Cable Ship Co., 181 F.Supp.2d 644, 647 (E.D.La.2002)). To determine whether it may assert specific jurisdiction over a defendant, the court considers "(1) the extent to which the defendant `purposefully avail[ed]' itself of the privilege of conducting activities in the State; (2) whether the plaintiffs' claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally `reasonable.'" ALS Scan, Inc. v. Digital Service Consultants, 293 F.3d 707, 712 (4th Cir.2002) (citation omitted), cert. denied, 537 U.S. 1105, 123 S.Ct. 868, 154 L.Ed.2d 773 (2003). When specific jurisdiction exists, "a defendant has `fair warning' that he may be sued in a state for injuries arising from activities that he `purposefully directed' toward that state's residents." Tom Togs, Inc., 318 N.C. at 366, 348 S.E.2d at 786.

(1) Purposeful Availment

Purposeful availment is shown "if the defendant has taken deliberate action within the forum state or if he has created continuing obligations to forum residents." Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir.1995). Although contacts that are "isolated" or "sporadic" may support specific jurisdiction if they create a "substantial connection" with the forum, the contacts must be more than random, fortuitous, or attenuated. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-75, 105 S.Ct. 2174, 85 L.Ed.2d 528, 540-42 (1985). Furthermore, it is not required that a defendant be physically present within the forum, provided its efforts are purposefully directed toward forum residents. Id. at 476, 105 S.Ct. at 2184, 85 L.Ed.2d at 543.

The record indicates that Stahler Furniture is a Vermont corporation with one retail location in Lyndonville, Vermont. Stahler Furniture is not licensed or registered to do business in North Carolina. Stahler Furniture neither has any employees in North Carolina, nor does it have any real or personal property in this state. Stahler Furniture has not shipped more than one or two other pieces of furniture to North Carolina in the last ten years.

On or about 22 July 2003, plaintiffs went to Stahler Furniture's store in Lyndonville, Vermont, and purchased two pieces of furniture. The furniture was completely paid for by plaintiffs in Vermont on or about 22 July 2003. Stahler Furniture and Yellow Transportation, an Indiana corporation, entered into a contract for Yellow Transportation to deliver plaintiffs' furniture to North Carolina. The contract negotiations and the contract execution between Stahler Furniture and Yellow Transportation did not occur in North Carolina. Yellow Transportation picked up the furniture for delivery in Lyndonville, Vermont. The description and weight of the property to be delivered were given to Yellow Transportation by Stahler Furniture in Vermont. While attempting to deliver the furniture in North Carolina, Valentine, an employee of Yellow Transportation, dropped a furniture crate onto Havey. No employees or representatives of Stahler Furniture were present at the scene of the delivery accident.

Stahler Furniture does not advertise in North Carolina. However, Stahler Furniture does have an Internet website. Yellow Transportation argues that because "Stahler [Furniture], through the use of its website and catalog, holds itself out as a seller of furniture to residents of North Carolina[,] . . . [it has] deliberately availed itself...