Mecum Auction, Inc. v. McKnight
| Decision Date | 04 June 2019 |
| Docket Number | No. COA18-1208,COA18-1208 |
| Court | North Carolina Court of Appeals |
| Parties | MECUM AUCTION, INC., Plaintiff v. JAMES MCKNIGHT, Defendant |
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
Mecklenburg County, No. 18 CVS 13202
Appeal by Defendant from Order entered 26 September 2018 by Judge Todd Pomeroy in Mecklenburg County Superior Court. Heard in the Court of Appeals 10 April 2019.
Hedrick Gardner Kincheloe & Garofalo LLP, by Allen C. Smith, and Foran, Glennon, Palandech, Ponzi & Rudloff, PC, by Douglas J. Palandech and Michael P. Sever, pro hac vice, for plaintiff-appellee.
Eisele Ashburn Greene & Chapman, PA, by Douglas G. Eisele, for defendant-appellant.
James McKnight (Defendant) appeals from an Order Denying Defendant's Motion to Dismiss (Motion to Dismiss Order) filed on 26 September 2018, concluding that the foreign judgment from the Circuit Court of Walworth County, Wisconsin (Wisconsin Judgment), filed with the Clerk of Superior Court for Mecklenburg County remains in effect until satisfied. The facts and procedural history pertinent to the instant appeal are as follows:
On or about 12 December 2016, Mecum Auction, Inc. (Plaintiff) and Defendant entered into an "Auction Listing Contract" and "Auction Selling Contract" (collectively referred to as the Agreement). The Agreement states Plaintiff will present Defendant's 1968 Chevrolet Corvette (Vehicle) for auction sale at Plaintiff's January 2017 Auction in Kissimmee, Florida (Auction).
Following a request from Defendant, Plaintiff sent standard, blank forms of the Agreement to Defendant's office in Iredell County, North Carolina. Defendant completed the forms, affixed his signature, and returned them to Plaintiff's principal place of business in Walworth, Wisconsin, via mail. Upon receiving the forms, Plaintiff reviewed the information provided by Defendant—including, but not limited to, the VIN number, mileage, vehicle history, and reserve price—and approved the Vehicle for presentation at the Auction. The Agreement obligated Defendant to both represent his Vehicle accurately and hold Plaintiff harmless from and against any claims surrounding the accuracy and truthfulness of Defendant's representations regarding the Vehicle.
On 12 January 2017, Plaintiff presented the Vehicle for auction sale in Kissimmee, Florida, where it sold for a total sale price of $90,759. Subsequent topurchase, the winning bidder alerted Plaintiff to several misrepresentations in Defendant's vehicle description. Plaintiff informed Defendant of the winning bidder's complaints. Upon review, Plaintiff concluded Defendant's representations regarding the Vehicle were not fact-supported. At Plaintiff's request, Defendant agreed to take back the Vehicle, and the winning bidder received a full refund. However, Defendant did not agree to compensate Plaintiff for the $14,490 commission-revenue loss arising out of his alleged misrepresentation, per the terms of the Agreement.
On 21 April 2017, Plaintiff filed suit against Defendant in the Circuit Court of Walworth County, Wisconsin (the Wisconsin Court), in accordance with the Agreement's Forum-Selection Clause, which provides:
This agreement shall be governed by, and construed in accordance with, laws of the State of Wisconsin without giving effect of any choice or conflict of law provision or rule that would cause the application of the laws of any jurisdiction other than the State of Wisconsin. The seller/consignor irrevocably submits to the jurisdiction of the State of Wisconsin, Circuit Court of Walworth County, over any dispute arising out of, or relating in any way, to this agreement or to the transaction(s) to which it relates. The seller/consignor irrevocably agrees that all claims shall be heard and determined in such court. The seller/consignor irrevocably waives, to the fullest extent permitted by law, any objection or defense which he, she or it may now have, or come to have, regarding the inconvenience of this forum.
Service of process was perfected on Defendant by the Iredell County Sheriff's Department on 28 April 2017. Defendant did not file an appearance or a responsive pleading in the Wisconsin Court action. On 23 June 2017, 56 days after Defendantwas served with the underlying Complaint and 26 days after his responsive pleading was due, Plaintiff filed a Motion for Default Judgment. A true copy of the Motion for Default Judgment was sent to Defendant by certified mail, which Defendant apparently received as reflected on the Certified Mail Receipt.
On 5 July 2017, the Wisconsin Court entered the Wisconsin Judgment, which granted Plaintiff's Motion for Default Judgment and awarded Plaintiff judgment in the amount of $25,945, accounting for the lost auction commission together with Plaintiff's costs and attorney's fees.
On 3 July 2018, Plaintiff enrolled the Wisconsin Judgment with the Mecklenburg County Clerk of Superior Court, pursuant to N.C. Gen. Stat. § 1C-1703. Plaintiff served the Notice of Filing of Foreign Judgment on Defendant on 11 July 2018 and filed its Affidavit of Service of Notice of Filing of Foreign Judgment on 24 July 2018. On 26 July 2018, Defendant filed a Notice of Defense to Filing of Foreign Judgment (Notice of Defense Motion) alleging "the Judgment obtained in Wisconsin is void and unenforceable against Defendant in North Carolina because at the time the Judgment was entered in Wisconsin, the Courts in Wisconsin had no jurisdiction over Defendant" and seeking "this action to enforce the foreign Judgment obtained by Plaintiff against Defendant in Wisconsin be dismissed for lack of jurisdiction of the Wisconsin Courts over this Defendant."
On 26 September 2018, the trial court entered its Motion to Dismiss Order. The trial court made no findings of fact or conclusions of law, and the Motion to Dismiss Order provides, in relevant part:
From this Order, Defendant appeals.
Defendant contends, and Plaintiff does not dispute, the Motion to Dismiss Order is an interlocutory order that affects a substantial right, thus appealable under N.C. Gen. Stat. § 1-277(a). See N.C. Gen. Stat. § 1-277(a) (2017) (). However, after reviewing the Record, the Motion to Dismiss Order appears to be a final judgment. "A finaljudgment disposes of the cause as to all the parties, leaving nothing to be judicially determined between them in the trial court, . . . while an interlocutory ruling does not determine the issues but directs some further proceeding preliminary to the final decree." Burwell v. Griffin, 67 N.C. App. 198, 203, 312 S.E.2d 917, 920 (1984) (citations omitted).
Here, although the trial court denied Defendant's Notice of Defense Motion, which the trial court characterized as a motion to dismiss, the trial court's Motion to Dismiss Order also states the Wisconsin Judgment "shall remain in effect until satisfied." Because Plaintiff brought this action to enforce the Wisconsin Judgment, the fact that the trial court ordered the Judgment shall remain in effect until satisfied renders the Motion to Dismiss Order a final judgment, as this Order effectively "disposes of the cause as to all the parties[ and] leav[es] nothing to be judicially determined between them in the trial court[.]" See id. (citations omitted). Therefore, we treat the Motion to Dismiss Order as a final judgment, and Defendant's appeal is properly before this Court.
The sole issue on appeal is whether the trial court erred in denying Defendant's Notice of Defense Motion and concluding the Wisconsin Judgment is enforceable in North Carolina. In support of his position, Defendant argues the undisputed facts establish the Agreement was executed in North Carolina and that N.C. Gen. Stat. §22B-3 invalidates the Agreement's Forum-Selection Clause, thus depriving the Wisconsin Court of personal jurisdiction over Defendant.
Defendant essentially argues the Wisconsin Judgment is not entitled to full faith and credit in North Carolina because the Wisconsin Court lacked personal jurisdiction over Defendant. "We review de novo the issue of whether a trial court has properly extended full faith and credit to a foreign judgment." Marlin Leasing Corp. v. Essa, ___ N.C. App. ___, ___, 823 S.E.2d 659, 662-63 (2019) (citing Tropic Leisure Corp. v. Hailey, 251 N.C. App. 915, 917, 796 S.E.2d 129, 131, appeal dismissed and disc. rev. denied, 369 N.C. 754, 799 S.E.2d 868-69, cert. denied, ___ U.S. ___, 199 L. Ed. 2d 385 (2017)).
"The Full Faith and Credit Clause of the United States Constitution requires North Carolina to enforce a judgment rendered in another state, if the judgment is valid under the laws of that state." Florida National Bank v. Satterfield, 90 N.C. App. 105, 107, 367 S.E.2d 358, 360 (1988). "[B]ecause a...
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