Leake v. AutoMoney, Inc.
| Citation | 284 N.C.App. 389,877 S.E.2d 22 |
| Decision Date | 19 July 2022 |
| Docket Number | COA21-411 |
| Parties | Jennifer LEAKE and Elizabeth Wakeman, Plaintiffs, v. AUTOMONEY, INC., Defendant. |
| Court | Court of Appeal of North Carolina (US) |
Brown, Faucher, Peraldo & Benson PLLC, Greensboro, by James R. Faucher, for Plaintiffs-Appellees.
Womble Bond Dickinson (US) LLP, by Michael Montecalvo, Winston-Salem, and Scott D. Anderson, Raleigh, for Defendant-Appellant.
¶ 1 AutoMoney, Inc. ("Defendant") appeals from an order denying its motion to dismiss under N.C. Gen. Stat. § 1A-1 Rules 12(b)(2) and 12(b)(6). On appeal, Defendant argues the trial court erred by 1) not enforcing the choice of law provisions within its loan agreements, and 2) determining minimum contacts existed to render personal jurisdiction over it. Defendant petitions this Court by writ of certiorari to review the trial court's denial of its motion to dismiss under Rule 12(b)(6). In our discretion, we grant Defendant's writ of certiorari and affirm in part the trial court's order and reverse in part with respect to Elizabeth Wakeman's ("Plaintiff Wakeman") claims.
¶ 2 This dispute arises out of car title loan agreements Defendant made with Jennifer Leake ("Plaintiff Leake") and Elizabeth Wakeman (collectively, "Plaintiffs"). Defendant is a South Carolina corporation with its principal place of business in Charleston, South Carolina who provides car title loans, or loans secured by a motor vehicle, to individuals. Plaintiffs are North Carolina residents.
¶ 3 In 2015, Plaintiff Leake contacted Defendant to inquire about a car title loan. Plaintiff Leake "had heard about AutoMoney car title loans from a friend" and "called AutoMoney from North Carolina." Plaintiff Leake spoke with one of Defendant's employees who asked her "if ... [she] had a car with a clear title[,] ... [the] year, make and model" of her car, and "how much money ... [she] wanted to borrow." Plaintiff Leake was told to drive to Defendant's store in South Carolina and to bring her car, car title, proof of employment, and driver's license to acquire the loan.
¶ 4 On August 7, 2015, Plaintiff Leake drove to Defendant's Cheraw, South Carolina office. There, she finalized and signed the loan agreement, presented her vehicle for an appraisal and inspection, and received a loan for $815.00 at an interest rate of 158.034%. Plaintiff Leake provided her vehicle as a security interest for the loan. Per the terms of Defendant's loan agreement, a choice of law clause designated South Carolina as the governing forum should a dispute arise:
This Loan Agreement, Promissory Note[,] and Security Agreement is entered into by and between Lender/Secured Party and Borrower/Debtor in the state of South Carolina as of the above date, subject to the terms and conditions set forth and any and all representations Borrower has made to Lender in connection with this Loan Agreement, Promissory Note and Security Agreement. As Lender is a regulated South Carolina consumer finance company and you, as Borrower, have entered into this Agreement in South Carolina, this Agreement shall be interpreted, construed, and governed by and under the laws of the State of South Carolina, without regard to conflicts of law rules and principles (whether of the State of South Carolina or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of South Carolina.
Thereafter, Defendant utilized a third-party electronic title storage company to record Plaintiff Leake's loan with the North Carolina Department of Motor Vehicles.
¶ 5 Plaintiff Leake proceeded to make loan payments to Defendant over the phone from North Carolina, where she resided. Ultimately, Plaintiff Leake stopped making payments. Defendant thereafter repossessed Plaintiff Leake's car from a location in North Carolina and sold it.
¶ 6 On June 18, 2020, Plaintiffs filed an unverified complaint, arguing Defendant violated N.C. Gen. Stat. §§ 53-165, 75-1.1, and 24-1.1. Plaintiffs then amended their complaint and filed an unverified, amended complaint on June 29, 2020. On August 3, 2020, Defendant filed a motion to dismiss pursuant to N.C. Gen. Stat. § 1A-1, Rules 12(b)(2), 12(b)(3), and 12(b)(6). Plaintiffs and Defendant then filed numerous affidavits and exhibits with the trial court.
¶ 7 Linda Derbyshire ("Derbyshire"), Defendant's owner and executive manager, executed an affidavit stating the following: Defendant has no offices within North Carolina, does not make car title loans in North Carolina, is not registered to do business in North Carolina, does not have a representative agent in North Carolina, does not have a mailing address or telephone number in North Carolina, and does not directly market into North Carolina. Defendant only accepts loan applications inperson at one of its South Carolina locations. Furthermore, Defendant's customers can pay their loans directly to Defendant by mail, by telephone, by debit card, online, and through Western Union. Defendant sends customer service follow-ups, regardless of the customer's state of residency.
¶ 9 Additionally, a representative for Steals & Deals, a North Carolina publication which primarily advertises in North Carolina counties along with four counties in South Carolina, explained by way of affidavit that from February 2013 to May 2019, Defendant ran a weekly advertisement in its publication. Affidavits from North Carolina residents who borrowed money from Defendant further attested to Defendant's involvement in North Carolina, stating Defendant offered referral fees in exchange for referring new North Carolina borrowers.
¶ 10 Notably, Plaintiff Wakeman did not file an affidavit nor any exhibits with the trial court. Derbyshire's affidavit attested she had
¶ 11 On November 30, 2020, Defendant's motion to dismiss came on for hearing before the trial court. By order entered January 15, 2021, the trial court denied Defendant's motion to dismiss. Therein, the trial court found it possessed personal jurisdiction over Defendant and that "[t]he State of North Carolina has a strong interest in the enforcement of its consumer protection law and in protecting its citizens from what under North Carolina law are usurious loan rates." Defendant gave timely notice of appeal. Defendant also petitions this court by a writ of certiorari to review the trial court's denial of its motion to dismiss under Rule 12(b)(6).1
¶ 12 Defendant appeals from the trial court's denial of its motion to dismiss under Rule 12(b)(2) and Rule 12(b)(6). "[T]he denial of a motion to dismiss is not immediately appealable to this Court because it is interlocutory in nature." Can Am South, LLC v. State , 234 N.C. App. 119, 122, 759 S.E.2d 304, 307 (2014) (quoting Reid v. Cole , 187 N.C. App. 261, 263, 652 S.E.2d 718, 719 (2007) ). A party may not appeal from "an interlocutory order or ruling of the trial judge unless such ruling or order deprives the appellant of a substantial right which he would lose if the ruling or order is not reviewed before final judgment." North Carolina Consumers Power, Inc. v. Duke Power Co. , 285 N.C. 434, 437, 206 S.E.2d 178, 181 (1974) (citations omitted); see also N.C. Gen. Stat. § 1-277 (2021). Therefore, since Defendant's appeal from the trial court's order denying its motion to dismiss is interlocutory, we first determine whether this appeal affects a substantial right.
¶ 13 Turning first to Defendant's Rule 12(b)(2) motion, "motions to dismiss for lack of personal jurisdiction affect a substantial right and are immediately appealable." A.R. Haire, Inc. v. St. Denis , 176 N.C. App. 255, 257-58, 625 S.E.2d 894, 898 (2006) (citations omitted); see N.C. Gen. Stat. § 1-277(b) (); Can Am South, LLC , 234 N.C. App. at 122, 759 S.E.2d at 307 ; State ex rel. Cooper v. Ridgeway Brands Mfg. , LLC, 188 N.C. App. 302, 304, 655 S.E.2d 446, 448 (2008). Thus, Defendant's appeal from the order denying its Rule 12(b)(2) motion is properly before us on appeal.
¶ 14 Regarding Defendant's Rule 12(b)(6) motion, Defendant petitions us by a writ of certiorari to review the denial of its Rule 12(b)(6) motion. We have held "it is an appropriate exercise of this Court's discretion to issue a writ of certiorari in an interlocutory appeal where there is merit to an appellant's substantive arguments and it is in the interests of justice to treat an appeal as a petition for writ of certiorari."
Cryan v. Nat'l Council of YMCA of the United States , 280 N.C. App. 309, 2021-NCCOA-612, ¶ 17, 867 S.E.2d 354 (cleaned up) (quoting Zaliagiris v. Zaliagiris , 164 N.C. App. 602, 606, 596 S.E.2d 285, 289 (2004) ). Particularly, we have issued a writ of certiorari when the issue in question is significant, important, and will promote judicial economy. Id. at ¶ 18. The issue raised by Defendant's ...
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