Jermaine Parson v. Oasis Legal Finance Llc

• Decision Date: 02 August 2011
• Docket Number: No. COA10–1414.,COA10–1414.
• Citation: 715 S.E.2d 240
• Parties: Jermaine PARSON, Plaintiffv.OASIS LEGAL FINANCE, LLC, Jeff Baloun, and Gary Chodes, Defendants.
• Court: North Carolina Court of Appeals

715 S.E.2d 240

Jermaine PARSON, Plaintiff

v.OASIS LEGAL FINANCE, LLC, Jeff Baloun, and Gary Chodes, Defendants.

No. COA10–1414.

Court of Appeals of North Carolina.

Aug. 2, 2011.

Appeal by defendants from order entered 26 July 2010 by Judge Catherine C. Eagles in Guilford County Superior Court. Heard in the Court of Appeals 27 April 2011.

Robertson Medlin & Bloss, P.L.L.C., by John F. Bloss, and Barron & Berry, L.L.P., by Frederick L. Berry, Esq., for plaintiff-appellee.

Brooks Pierce McLendon Humphrey & Leonard, L.L.P., by Robert J. King, III, and Clint S. Morse, for defendant-appellants.

BRYANT, Judge.

Where the last act essential to a meeting of the minds was a signature made in Illinois, the contract was not entered into in North Carolina. Further, where the enforcement of the forum selection clause would not be unfair and unreasonable, we reverse the trial court's order and remand.

On 18 February 2010, in Guilford County Superior Court, plaintiff Jermaine Parson filed suit as a class action against Oasis Legal Finance, L.L.C. (Oasis), Jeff Baloun (Baloun), and Gary Chodes (Chodes) alleging the following causes of action: usury, violation of the consumer finance act, unfair and deceptive trade practices, constructive trust, declaratory judgment, rescission/restitution, maintenance, champerty, and injunction.¹

The allegations as set forth in the complaint, as well as answers to plaintiff's interrogatories and statements made during a deposition, indicate that on 27 October 2007, plaintiff was injured by a motor vehicle while he was crossing the street. Plaintiff retained Joseph A. Williams, P.A., as legal representative for an ensuing action against the vehicle driver. On 15 January 2008, plaintiff entered into an agreement with Oasis for an advance of funds to pay for plaintiff's legal representation. In exchange, plaintiff agreed that, in the event he recovered compensation for his personal injuries, he would repay the amount advanced by Oasis plus an additional sum determined by the length of time the advance had been outstanding.

Oasis was organized under the laws of the state of Delaware with its offices located in Illinois. Baloun, an Oasis officer and manager, held the title of Director of Legal Funding. Chodes, another officer and manager, held the title of Chief Executive Officer. Both Baloun and Chodes reside in Illinois.

On 15 January 2008, plaintiff and Joseph A. Williams, P.A., received from Oasis an unsigned agreement for the advancement of $3,000.00. Plaintiff and a representative from Joseph A. Williams, P.A., signed the purchase agreement and faxed it back to Oasis the same day. On 16 January 2008, plaintiff received a check for $2,972.00.² The record includes documentation that plaintiff entered into another purchase agreement with Oasis on 18 February 2008 in exchange for an advance of $750.00. Both agreements contained a governing law clause stating that “all lawsuits, disputes, claims, or proceedings arising out of or relating to this Purchase Agreement ... shall be governed, construed and enforced in accordance with the laws of the State of North Carolina.” Also, both agreements contained a forum selection clause stating “[t]he Parties hereby irrevocably and unconditionally consent ... and agree not to commence any such lawsuit, dispute, claim or other proceeding except in the Circuit Court of Cook County, Illinois.

In June 2009, plaintiff settled the underlying action for $30,000.00. Under the terms of the 15 January 2008 purchase agreement, if the repayment occurred between 15 April 2009 and 14 July 2009, the total amount due would be $7,500.00. Under the terms of the February purchase agreement, if the repayment occurred between 18 May 2009 and 17 August 2009, the amount due would be $1,875.00. However, pursuant to a letter issued by Oasis to Joseph A. Williams, Esq., “Oasis [would] agree to accept as payment in full fees of 15.9%, plus return of the original amount funded. Therefore, the amount due and owing is $4,575.48 ....“ On 15 June 2009, plaintiff's attorney disbursed to Oasis $4,575.78. Plaintiff thereafter filed his claims in superior court in Guilford County, North Carolina.

On 23 April 2010, defendants filed a motion to dismiss plaintiff's claims alleging improper venue pursuant to Rule 12(b)(3). On 26 July 2010, the trial court entered an order denying defendant's motion to dismiss.³ Defendants appeal.

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On appeal, defendants argue the trial court erred in finding (I) the Purchase Agreement was entered into in North Carolina; and (II) that enforcing the forum selection clause would be unreasonable and unfair.

Initially, we note that “[a]lthough a denial of a motion to dismiss is an interlocutory order, where the issue pertains to applying a forum selection clause, our case law establishes that [a] defendant may nevertheless immediately appeal the order because to hold otherwise would deprive him of a substantial right.” Hickox v. R & G Group Int'l, Inc., 161 N.C.App. 510, 511, 588 S.E.2d 566, 567 (2003) (citation omitted); see also N.C. Gen.Stat. § 7A–27(d) (2009).

I

Defendants first ask that we determine whether the trial court erred in finding the Purchase Agreement was entered into in North Carolina. Contrary to the trial court's conclusion that the contract was entered into on 16 January 2008 when plaintiff received his check, defendant contends the contract was “entered into” when an Oasis representative counter-signed the agreement in Illinois. We agree in part.

Because the disposition of forum selection matters is highly fact-specific, “[w]e employ the abuse-of-discretion standard to review a trial court's decision concerning clauses on venue selection.” Mark Group Int'l, Inc. v. Still, 151 N.C.App. 565, 566, 566 S.E.2d 160, 161 (2002).

“The essence of any contract is the mutual assent of both parties to the terms of the agreement so as to establish a meeting of the minds.” Snyder v. Freeman, 300 N.C. 204, 218, 266 S.E.2d 593, 602 (1980) (citation omitted). “Mutual assent is normally established by an offer by one party and an acceptance by the other, which offer and acceptance are essential elements of a contract.” Creech v. Melnik, 347 N.C. 520, 527, 495 S.E.2d 907, 912 (1998) (citation omitted). The moment of mutual assent may differ from the time the contract is to be effective. Black's Law Dictionary defines “effective date” as “[t]he date on which a statute, contract, insurance policy, or other such instrument becomes enforceable or otherwise takes effect, which sometimes differs from the date on which it was enacted or signed.” Black's Law Dictionary 533 (7th ed.1999). E.g., Rental Towel and Uniform Serv. v. Bynum Int'l, Inc., 304 N.C. 174, 282 S.E.2d 426 (where the last signature to the contract was acquired on 8 November 1978 but the contract was not effective until 11 December 1978), rev'g 51 N.C.App. 203, 281 S.E.2d 664 (1981).

[I]t is a generally accepted principle that the test of the place of a contract is as to the place at which the last act was done by either of the parties essential to a meeting of minds. Until this act was done there was no contract, and upon its being done at a given place, the contract became existent at the place where the act was done. Until then there was no contract.

Bundy v. Commercial Credit Co., 200 N.C. 511, 515, 157 S.E. 860, 862 (1931). In Szymczyk v. Signs Now Corp., 168 N.C.App. 182, 606 S.E.2d 728 (2005), the plaintiffs, a North Carolina couple, contested whether a forum selection clause within a franchise agreement entered into with the defendant, a Florida corporation, was enforceable. In response to an alleged violation of the agreement, the defendant filed a complaint and a demand for arbitration in Manatee County, Florida. Id. at 184, 606 S.E.2d at 731. A Wilson County Superior Court granted the plaintiffs an injunction against further proceedings in Florida. Id. On appeal from the Wilson County order, this Court considered whether the trial court was correct in enjoining the Florida action, specifically, whether North Carolina law applied to the forum selection clause. The Court acknowledged that pursuant to N.C. Gen.Stat. § 22B–3, North Carolina courts will not honor provisions in certain contracts—choice of law, forum selection—if found to be contrary to North Carolina public policy. The Court noted, however, that the consideration was limited to those contracts “entered into in North Carolina.” Id. at 186–87, 606 S.E.2d at 732 (citing Key Motorsports v. Speedvision Network, L.L.C., 40 F.Supp.2d 344 (M.D.N.C.1999)). Ultimately concluding that North Carolina law did not apply to the interpretation of the forum selection clause, the Szymczyk Court, citing the test articulated in Bundy, held that the last act essential to the formation of the contract was a signing that took place in Florida, and thus, the contract was entered into in Florida. Id. at 187, 606 S.E.2d at 733. See also, e.g. Map Supply, Inc. v. Integrated Inventory Solutions, Inc., 2008 WL 2096791, 2008 N.C.App. LEXIS 1008 (COA07–733) (heard 12 December 2007) (unpublished) (holding that despite a discussion and verbal agreement which occurred in North Carolina, the final signature necessary to the contract was procured in Michigan; therefore, the contract was formed in Michigan).

Here, in its findings of fact, the trial court noted that the agreement contained the following language, “[t]his Agreement shall not be effective until the Purchase Price is paid to the Seller” and that plaintiff received his advance in North Carolina. The trial court then concluded that the agreement was entered into in North Carolina. We hold otherwise.

The record indicates that Oasis advertised “5 Easy Steps to Funding,” which included (1) “Complete the ATTORNEY EXPRESS FUNDING application” (a one page overview of the applicant's underlying pending legal case); (2) “Oasis reviews [the applicant's application for...