Professional Vending Services, Inc. v. Sifen, Inc., No. COA08-1383 (N.C. App. 8/4/2009)
| Decision Date | 04 August 2009 |
| Docket Number | No. COA08-1383,COA08-1383 |
| Parties | PROFESSIONAL VENDING SERVICES, INC., Plaintiff, v. MICHAEL D. SIFEN, INC., MICHAEL D. SIFEN and MARC SIFEN, Defendants. |
| Court | North Carolina Court of Appeals |
SMITH MOORE LEATHERWOOD LLP, by Sidney S. Eagles, Jr., Elizabeth Brooks Scherer, and Kelly T. Ensslin, and CROSSLEY, MCINTOSH, COLLIER, HANLEY & EDES, PLLC, by Clay Allen Collier, for Defendants.
No brief for Plaintiff.
Michael D. Sifen, Inc., Michael D. Sifen, and Marc Sifen (collectively, Defendants) appeal from an order entered 14 January 2008 granting the motion of Professional Vending Services, Inc., (Plaintiff) for summary judgment pursuant to N.C. Gen. Stat. § 1A1-1, Rule 56, and from orders entered 21 July 2008 granting Plaintiff's motion to strike Defendants' affidavits; denying Defendants' motion for relief from judgment pursuant to N.C. Gen. Stat. § 1A-1, Rule 60; denying Defendants' motion to alter or amend judgment pursuant to N.C. Gen. Stat. § 1A-1, Rule 59(e); and denying Defendants' motion for attorneys fees pursuant to N.C. Gen. Stat. § 1A-1, Rule 56(g). After careful consideration, we conclude that the trial court's order denying Defendants' motion for relief from judgment pursuant to N.C. Gen. Stat. § 1A-1, Rule 60(b)(4) should be reversed and that this case should be remanded to the trial court for the entry of orders granting Defendants' motion for relief from judgment, vacating the trial court's order granting summary judgment in favor of Plaintiff, and dismissing this case without prejudice.
On 27 March 2007, Plaintiff filed an unverified complaint against Defendants seeking either (1) recovery of two vending machines and damages for loss of use of the vending machines in question or (2) damages in the amount of the value of the vending machines in question and for loss of use of those vending machines. Plaintiff alleged that Defendants were Virginia residents and stated, without further elaboration, that jurisdiction in North Carolina was proper pursuant to N.C. Gen. Stat. § 1-75.4. Plaintiff further alleged that Defendants possessed two of Plaintiff's vending machines which were worth a total of $3,950.00 and which contained inventory worth $300.00. According to Plaintiff, Defendants deprived Plaintiff of the use of these vending machines after 15 January 2007; the vending machines would allegedly have generated income of approximately $20.00 per day.
The complaint and summons directed to Defendant Michael D. Sifen, Inc., were served on the Defendant corporation's registered agent in Virginia Beach, Virginia, on 28 March 2007.1 Although Plaintiff filed Returns of Service indicating that the summons and complaint were served on Defendants Michael D. Sifen and Marc Sifen at 500 Central Drive, Suite 106, Virginia Beach, Virginia 23454, the delivery confirmation receipts are signed by Karen O'Donnell. None of the Defendants filed an answer to Plaintiff's complaint.
On 3 April 2007, R. Edward Bourdon, Jr. (Bourdon), an attorney licensed to practice in Virginia who represented Defendants and served as registered agent for Defendant Michael D. Sifen, Inc., wrote Plaintiff's attorney, Matthew G. Nestor (Nestor), as follows:
I have confirmed that neither Michael D. Sifen, Inc., Michael D. Sifen, nor Marc Sifen owns any property, real or personal, which is located anywhere within the State of North Carolina.
Neither Michael D. Sifen, Inc., Michael D. Sifen nor Marc Sifen have possession of any "Asset" or "Thing of Value" which is or was ever within the State of North Carolina. In addition, neither Michael D. Sifen, Inc., Michael D. Sifen nor Marc Sifen is in possession of any vending machines or inventory of [Plaintiff] located in any jurisdiction. As a result, Bourdon indicated that he and his clients "look[ed] forward to receiving confirmation that this baseless Complaint has been dismissed."
Nestor replied to Bourdon's 3 April 2007 letter on 22 May 2007, by means of a letter sent by facsimile machine stating that "Professional Vending Services, Inc., has two vending machines located at 1060 Lynnhaven Parkway, Virginia Beach, Virginia in space previously occupied by I.C. Grand Buffet[.]" Although he disputed Bourdon's contention that the North Carolina courts lacked personal jurisdiction over Defendants, Nestor indicated that Plaintiff is "agreeable to dismiss the Complaint if arrangements are made to pick up the equipment today and your client agrees to pay legal fees." Attached to Nestor's letter was a copy of a "Vending Location Agreement" involving the placement of "Single Ball" and "Speed King" machines at "I.C. Grand Buffet," 1060 Lynnhaven Parkway, Virginia Beach, Virginia 23452.
In a response transmitted by facsimile machine later that day, Bourdon reiterated his contention that Defendants did not possess any vending machines or inventory belonging to Plaintiff in any jurisdiction. Furthermore, Bourdon stated that he had passed on the information concerning the location of the two vending machines to Don Smith (Smith) of Sifen Development Company, Inc. (Sifen Development), and that either Bourdon or Smith would be in touch with Plaintiff after Smith had returned to Virginia Beach and had an opportunity to review certain information provided by Nestor relating to the ownership and location of the vending machines. Bourdon concluded by stating that none of the Defendants "will be agreeing to pay any legal fees or other costs your client may have incurred in pursuing a legally baseless and patently frivolous lawsuit."
On 4 January 2008, Plaintiff filed a motion for summary judgment pursuant to N.C. Gen. Stat. § 1A-1, Rule 56, and attached an affidavit by Perry Johnston, Plaintiff's President (Johnston), in which Johnston stated that the Defendants had denied him and his employees the right of access to a building located at 1060 Lynnhaven Parkway, Virginia Beach, Virginia, in which vending machines owned by Plaintiff were located. On 9 January 2008, Bourdon wrote Nestor again; indicated that he had received a calendar request, Johnston's affidavit, and the summary judgment motion; and stated that "[it] is a fraud on the Court for you to continue to assert that the General Court of Justice District Court Division in Brunswick County, North Carolina[,] has jurisdiction over any of my three clients based on [N.C. Gen. Stat. § 1-75.4]." According to Bourdon, "[n]one of the parties you have named in your client's suit" were involved in the operation of the business to whom the vending machines in question were provided, and Defendants have not "held title to the real property" specified in Johnston's affidavit. Moreover, Bourdon informed Nestor that:
A check of the public records in the Clerk's Office of the Circuit Court of the City of Virginia Beach readily reveals the fact that the property located at 1060 Lynnhaven Parkway, Virginia Beach, Virginia, is and has been titled in the name of Sifen Development Co., Inc.[,] for many years. Bourdon also told Nestor that Smith had "confirmed that [Sifen Development Co., Inc., is] in possession of two (2) vending machines which they have had in storage for some time" and that Plaintiff should contact Smith at a phone number specified in Bourdon's letter in order to verify the ownership of the machines and pick them up if the machines were, in fact, owned by Plaintiff.
On 14 January 2008, the trial court heard Plaintiff's motion for summary judgment. Defendants did not appear at the hearing. On that date, the trial court entered an order granting Plaintiff's motion for summary judgment and awarding Plaintiff $11,530.00 in damages plus the costs.
On 23 January 2008, Defendants filed a motion to dismiss pursuant to N.C. Gen. Stat. § 1A-1, Rules 12(b)(1), (2), and (5); a motion for relief from judgment pursuant to N.C. Gen. Stat. § 1A-1, Rule 60; a motion to alter or amend the judgment pursuant to N.C. Gen. Stat. § 1A-1, Rule 59(e); and a motion for attorneys fees pursuant to N.C. Gen. Stat. § 1A-1, Rule 56(g). On 29 January 2008, Defendants filed the affidavits of Bourdon, Defendant Michael D. Sifen, and Defendant Marc Sifen. In his subsequently stricken affidavit, Bourdon described his communications with Nestor, including his assertions that the North Carolina courts lacked jurisdiction over Defendants, that Defendants were not in possession of Plaintiff's vending machines, that Defendants did not own the building in which the vending machines were currently located, that the contract provided by Plaintiff relating to the vending machines was not signed by any of the Defendants, and that Plaintiff could pick up its vending machines by contacting Smith. The subsequently stricken affidavits of Defendants Michael D. Sifen and Marc Sifen stated that they did not conduct business in North Carolina, that they had not contracted with Plaintiff, and that they had no interest in the business that rented the vending machines from Plaintiff or in the property at which the vending machines were located. On 26 February 2008, Plaintiff filed a motion to strike the affidavits filed by Defendants on the grounds that they were not served contemporaneously with the motions as required by N.C. Gen. Stat. § 1A-1, Rule 6(d).
All pending motions came on for hearing before the trial court at the 17 March 2008, session of the Brunswick County District Court. On 21 July 2008, the trial court entered orders denying each of Defendants' motions and granting Plaintiff's motion to strike Defendants' affidavits. The trial court based these decisions on determinations that the affidavits were "untimely served[;]" that "[t]he complaint in this action was . . ....
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