Miller v. Szilagyi

• Decision Date: 05 June 2012
• Docket Number: No. COA11–1458.,COA11–1458.
• Citation: 726 S.E.2d 873
• Parties: Vaughn Scott MILLER, Plaintiff, v. Elizabeth SZILAGYI, SZ*B Corporation, Michael McNamara, James H. Thompson and Mary M. Thompson, Defendants.
• Court: North Carolina Court of Appeals

726 S.E.2d 873

Vaughn Scott MILLER, Plaintiff,

v.Elizabeth SZILAGYI, SZ*B Corporation, Michael McNamara, James H. Thompson and Mary M. Thompson, Defendants.

No. COA11–1458.

Court of Appeals of North Carolina.

June 5, 2012.

Appeal by plaintiff from order entered 15 September 2011 by Judge John O. Craig, III, in Surry County Superior Court. Heard in the Court of Appeals 21 March 2012.

Robinson, Bradshaw & Hinson, P.A., Charlotte, by R. Steven DeGeorge, for the plaintiff.

John J. Korzen for the defendants.

THIGPEN, Judge.

Vaughn Scott Miller (“Plaintiff”) appeals from an order of the trial court granting James and Mary Thompson's (“the Thompsons”) N.C. Gen.Stat. § 1A–1, Rule 12(b)(2) motion to dismiss Plaintiff's cause of action against the Thompsons due to a lack of personal jurisdiction.¹ On appeal, Plaintiff contends there are sufficient minimum contacts between the Thompsons and North Carolina to establish specific jurisdiction. We affirm the order of the trial court.

The record tends to show the following: On 19 July 2006, Plaintiff—who, at the time of the filing of the complaint in this case, was a resident of Surry County, North Carolina ²—and Richard Hadden, who is not a party to this lawsuit, entered into an agreement (“First Agreement”) with the Thompsons to purchase Healthmark Corporation, Inc., Healthmark of Walton, Inc., and Healthmark of Walton Rural Health Clinic, Inc., (collectively, “Healthmark”), as well as the partnership assets of JTMT, LLP, the Hospital Annex Building, and a quantity of land owned by the Thompsons.³ Plaintiff wrote a $360,000.00 check to be deposited into a trust account retained by the Thompsons' attorney. Of the $360,000.00, $50,000.00 was deemed nonrefundable, and $310,000.00 was to be refunded to Plaintiff upon certain circumstances.

The parties did not close on the First Agreement. Instead, on 7 February 2007, the Thompsons informed Plaintiff that the First Agreement had expired. The Thompsons retained the entire $360,000.00 deposit.

On 7 April 2008, the Thompsons entered into an agreement (“Second Agreement”) with Doctors Hospital of DeFuniak Springs, Inc. (“Doctors Hospital”), pursuant to which the Thompsons agreed to sell, and Doctors Hospital agreed to purchase, the capital stock of Healthmark. Plaintiff was the vice president and director of Doctors Hospital, which was a North Carolina corporation with its principal place of business in Surry County, North Carolina.

On 14 April 2008, Mr. Thompson sent Plaintiff an unsigned agreement (“Third Agreement”) for Doctors Hospital's purchase of the capital stock of Healthmark. Plaintiff signed the agreement in his capacity as vice president and director of Doctors Hospital and had it notarized in Surry County, North Carolina. The Thompsons signed the agreement on 15 April 2008.

On 28 March 2011, Plaintiff filed a complaint against Defendants, which contained no allegations pertaining to personal jurisdiction, to recover the refundable $310,000.00 portion of the deposit from the First Agreement.

On 27 April 2011, the Thompsons filed a N.C. Gen.Stat. § 1A–1, Rule 12(b)(2) motion to dismiss the complaint for a lack of personal jurisdiction on the grounds that the Thompsons did not have sufficient minimum contacts with North Carolina. The Thompsons stated in their motion that they “have had no contacts with North Carolina and have not purposefully availed themselves of the privilege of conducting activities within North Carolina.” The Thompsons also submitted a brief in support of their motion to dismiss, which included three affidavits. Plaintiff filed a brief in opposition to the motion to dismiss, which also included three affidavits.

On 15 September 2011, the trial court entered an order granting the Thompson's N.C. Gen.Stat. § 1A–1, Rule 12(b)(2) motion to dismiss Plaintiff's cause of action against the Thompsons. The trial court concluded:

Subjecting the Thompsons to the jurisdiction of North Carolina would violate the due process clause of the United States Constitution because the Thompsons did not have sufficient minimum contacts with North Carolina[,] and thus the exercise of jurisdiction would not comport with traditional notions of fair play and substantial justice.

From this order, Plaintiff appeals.

I: Interlocutory Order

Preliminarily, we note that the order from which Plaintiff appeals is an interlocutory order, because it dismisses Plaintiff's cause of action against the Thompsons, but not Plaintiff's causes of action against the remaining defendants—Elizabeth Szilagyi, SZ*B Corporation, and Michael McNamara. Plaintiff's claims against Elizabeth Szilagyi, SZ*B Corporation, and Michael McNamara are still pending. See Flitt v. Flitt, 149 N.C.App. 475, 477, 561 S.E.2d 511, 513 (2002) (“An order is interlocutory if it is made during the pendency of an action and does not dispose of the case but requires further action by the trial court in order to finally determine the rights of all the parties involved in the controversy”) (emphasis added). “Generally, there is no right to appeal from an interlocutory order.” Id. However, Plaintiff's appeal in this case is proper pursuant to N.C. Gen.Stat. § 1–277(b) (2011), which provides that “[a]ny interested party shall have the right of immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of the defendant[.]” See also Dailey v. Popma, 191 N.C.App. 64, 68, 662 S.E.2d 12, 15 (2008) (holding, “[s]ince plaintiff's claim was dismissed as a result of the trial court's decision that it lacked personal jurisdiction over defendant, plaintiff has a right to an immediate appeal of that order”). We now address the merits of Plaintiff's appeal.

II: Personal Jurisdiction

On appeal, Plaintiff contends that the trial court erred in concluding the Thompsons did not have sufficient “minimum contacts” with North Carolina to support the exercise of personal jurisdiction over them. Plaintiff further contends the trial court erred in concluding that Plaintiff failed to meet his burden of proof with regard to personal jurisdiction. We disagree with both contentions.

“The standard of review of an order determining personal jurisdiction is whether the findings of fact by the trial court are supported by competent evidence in the record[.]” Bell v. Mozley, –––N.C.App. ––––, ––––, 716 S.E.2d 868, 871 (2011) (quotation omitted). “Where no exception is taken to a finding of fact by the trial court, the finding is presumed to be supported by competent evidence and is binding on appeal.” Id. (quotations omitted). “We review de novo the issue of whether the trial court's findings of fact support its conclusion of law that the court has personal jurisdiction over defendant.” Id. (citation omitted).

“Our courts engage in a two-step inquiry to resolve whether personal jurisdiction over a non-resident defendant is properly asserted: first, North Carolina's long-arm statute must authorize jurisdiction over the defendant. If so, the court must then determine whether the exercise of jurisdiction is consistent with due process.” Bauer v. Douglas Aquatics, Inc., 207 N.C.App. 65, 67, 698 S.E.2d 757, 760 (2010) (citation omitted).

Plaintiff asserts and Defendants do not dispute that pursuant to N.C. Gen.Stat. § 1–75.4(5)(d), a component of the North Carolina long-arm statute, the Thompsons are subject to personal jurisdiction because there exists an action related to “goods, documents of title, or other things of value shipped from this State by the plaintiff to the defendant on his order or direction[.]” Defendant states that the Thompsons directed Plaintiff to send the $360,000.00 check, drawn on Plaintiff's North Carolina bank account, to the Thompsons' attorney in Florida. Defendant also cites Lab. Corp. of Am. Holdings v. Caccuro, ––– N.C.App. ––––, 712 S.E.2d 696 (2011), for the proposition that the check constituted a “thing of value” for purposes of N.C. Gen.Stat. § 1–75.4(5)(d). See id. at ––––, 712 S.E.2d at 700 (holding that “all that is required to satisfy N.C. Gen.Stat. § 1–75.4(5)(d) is that a defendant demanded money from the plaintiff and the plaintiff paid the money from North Carolina”). We agree with Plaintiff's assertion that North Carolina's long-arm statute authorizes personal jurisdiction over the Thompsons. Therefore, we must now determine whether the exercise of jurisdiction over the Thompsons is consistent with due process.

“The Due Process Clause of the Fourteenth Amendment operates to limit the power of a state to assert in personam jurisdiction over a non-resident defendant.” Hiwassee Stables, Inc. v. Cunningham, 135 N.C.App. 24, 28, 519 S.E.2d 317, 320 (1999) (citations omitted). “In order for personal jurisdiction to exist, a sufficient connection between defendant and the forum state must be present so as to make it fair to require defense of the action in the forum state.” Id. (citations omitted). “The pivotal inquiry is whether the defendant has established certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Id. (quotations omitted).

“There are two types of personal jurisdiction. General jurisdiction exists when the defendant's contacts with the state are not related to the cause of action but the defendant's activities in the forum are sufficiently continuous and systematic. Specific jurisdiction exists when the cause of action arises from or is related to defendant's contacts with the forum.” Skinner v. Preferred Credit, 361 N.C. 114, 122, 638 S.E.2d 203, 210 (2006) (quotation omitted). Plaintiff in this case only argues that specific jurisdiction exists. “[F]or the purposes of asserting specific jurisdiction, [o]ur focus should ... be upon the relationship among the defendant, this State, and the cause of action.” Id. at 123, 638 S.E.2d at 210 (quotation omitted).

The factors used in determining the...