Ronald W. Bassett, Bassett Gutters & More, Inc. v. Strickland's Auto & Truck Repairs, Inc.

• Decision Date: 23 July 2018
• Docket Number: 1:17CV590
• Court: U.S. District Court — Middle District of North Carolina
• Parties: RONALD W. BASSETT, BASSETT GUTTERS AND MORE, INC., a North Carolina Corporation, BR RACING, LLC, a North Carolina Limited Liability Company, and LISA BASSETT, Plaintiffs, v. STRICKLAND'S AUTO & TRUCK REPAIRS, INC., Defendant.

RONALD W. BASSETT, BASSETT GUTTERS AND MORE, INC.,a North Carolina Corporation, BR RACING, LLC,a North Carolina Limited Liability Company,and LISA BASSETT, Plaintiffs, v. STRICKLAND'S AUTO & TRUCKREPAIRS, INC., Defendant.

1:17CV590

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

July 23, 2018

MEMORANDUM OPINION AND ORDER

OSTEEN, JR., District Judge

Pending before this court is a Motion to Dismiss filed by Defendant Strickland's Auto & Truck Repairs, Inc. ("Defendant"). (Doc. 5.) This motion is made pursuant to Rule 12(b)(2) and alleges that this court lacks personal jurisdiction over Defendant.¹ Plaintiffs responded to the motion(Doc. 11)² and filed a memorandum in support of their response (Pls.' Mem. (Doc. 12)). Plaintiffs also filed an amended motion requesting limited jurisdictional discovery. (Doc. 14.) That motion was granted by the Magistrate Judge and discovery was allowed on the issue of personal jurisdiction. (Doc. 15.) The timetable set forth in the order suggests that discovery should be completed within thirty days. On December 6, 2017, approximately fifty days after the discovery order was entered, Plaintiffs filed a supplemental brief addressing additional facts found during discovery. (Doc. 16.) Defendant has not filed a further response. The motion to dismiss, (Doc. 5), is ripe for ruling. For the following reasons, this court finds Defendant's motion should be denied.

I. The Complaint and Jurisdictional Facts

According to the Complaint and admitted in the Answer, Plaintiffs are all residents of North Carolina. (Complaint ("Compl.") (Doc. 1) ¶¶ 1-3; Answer (Doc. 7) at 2.) Plaintiffs Ronald and Lisa Bassett are residents of Forsyth County, North Carolina; Plaintiff Bassett Gutters and More, Inc., is a North Carolina corporation with a principal place of business in Davidson County; and Plaintiff BR Racing, LLC, is a North Carolina limited liability company with a principal place of business in Forsyth County. (Compl. (Doc. 1) ¶¶ 1-3.) Defendant is a Virginia corporation with a principal place of business in Cana, Virginia. (Id. ¶ 4.)

Plaintiffs allege in the Complaint that they sought to have a replacement engine installed in a 2005 Freightliner tractor. (Id. ¶ 10.) Defendant operates a truck repair business in Cana, Virginia. (Id. ¶ 20.) Defendant towed Plaintiffs' Freightliner tractor to Defendant's business in Virginia and Defendant installed a replacement engine. (Id. ¶¶ 35-36, 41.) Plaintiffs paid for repairs and picked up the tractor. (Id. ¶ 43.) Plaintiffs allege that they moved the tractor to their garage and thereafter the garage caught fire, causing damage to the garage, machines, and tools stored in the garage. (Id. ¶¶ 47-48, 52-54.) Plaintiffs contend, generally as the basis of theirclaims, that the origin of the fire was the tractor, (id. ¶ 58), and the fire in the tractor's engine resulted from improper installation of electrical wiring of the replacement engine. (Id. ¶¶ 59-60.) Plaintiffs assert claims of negligence and breach of an express warranty. (See generally Compl. (Doc. 1).)

In support of its motion to dismiss for lack of personal jurisdiction, Defendant has filed the affidavit of Kristie Strickland ("Strickland"), the current owner of Defendant. (Aff. of Kristie Strickland ("Strickland Aff.") (Doc. 6) ¶ 1.) Strickland states in her affidavit that Defendant does not solicit business in North Carolina and "all work is performed in Virginia at Strickland's place of business." (Id. ¶¶ 3, 6.) Strickland states that its customers are primarily from Virginia but that they also have customers in other states including North Carolina. (Id. ¶¶ 5-6.) Strickland candidly acknowledges that it does on occasion receive calls for auto services in North Carolina, (id. ¶ 7), and that Defendant does travel to North Carolina occasionally to pick up cars or trucks for jobs that it performs in Virginia, (id. ¶ 10). Defendant advertises in the Carolina/Virginia Truck Trader, distributed in North Carolina and Virginia. (Id. ¶ 8; see also Pls.' Suppl. Br., Ex. A, Limited Interrogs. ("Interrogs.") (Doc. 16-1) at 3.) With respect to the work on the tractor for Plaintiffs, Stricklandstates that Defendant traveled to North Carolina, towed the tractor back to its business in Cana, Virginia, and performed the work in Virginia. (Strickland Aff. (Doc. 6) ¶ 11.) Plaintiffs picked up the tractor in Virginia. (Id. ¶ 12.)

Following jurisdictional discovery, Plaintiffs submitted additional facts obtained from Defendant through interrogatories and document production. (Pls.' Suppl. Br. (Doc. 16) at 2; Ex. A, Interrogs. (Doc. 16-1).) Those invoices submitted show that in the last three years, forty-nine of seventy-nine invoices were billed to customers in North Carolina. (Pls.' Suppl. Br. (Doc. 16) at 2; Ex. A, N.C. Invoices attached to Interrogs. ("Invoices") (Doc. 16-1) at 8-88.) Four invoices reflect that Defendant towed the vehicle from North Carolina to its garage in Virginia. (Pls.' Suppl. Br. (Doc. 16) at 2; Invoices (Doc. 16-1) at 8-88.) Defendant did not file a supplemental brief following jurisdictional discovery.

II. LEGAL STANDARD OF REVIEW

"Under Rule 12(b)(2), a defendant must affirmatively raise a personal jurisdiction challenge, but the plaintiff bears the burden of demonstrating personal jurisdiction at every stage following such a challenge." Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016) (citation omitted); Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). Such a challenge may be resolvedby the court as a preliminary matter. Grayson, 816 F.3d. at 267. While this burden varies depending on the procedural posture of the case,

when the court addresses the personal jurisdiction question by reviewing only the parties' motion papers, affidavits attached to the motion, supporting legal memoranda, and the allegations in the complaint, a plaintiff need only make a prima facie showing of personal jurisdiction to survive the jurisdictional challenge. When determining whether a plaintiff has made the requisite prima facie showing, the court must take the allegations and available evidence relating to personal jurisdiction in the light most favorable to the plaintiff.

Id. at 268 (citations omitted). "A plaintiff makes a prima facie showing in this context when it 'present[s] evidence sufficient to defeat a motion for judgment as a matter of law.'" Debbie's Staffing Servs., Inc. v. Highpoint Risk Servs., LLC, No. 1:17CV657, 2018 WL 1918603, at *2 (M.D.N.C. Apr. 20, 2018) (citations omitted).

"Where the defendant has provided evidence, however, that denies facts essential for jurisdiction, the plaintiff must present sufficient evidence to create a factual dispute on each jurisdictional element that has been denied by the defendant and on which the defendant has presented evidence." Vogel v. Wolters Kluwer Health, Inc., 630 F. Supp. 2d 585, 594 (M.D.N.C. 2008); see also Wolf v. Richmond Cnty. Hosp. Auth., 745 F.2d 904, 908 (4th Cir. 1984) ("In ruling on a motion to dismiss forlack of personal jurisdiction, the allegations of the complaint, except insofar as controverted by the defendant's affidavit, must be taken as true." (internal quotation marks omitted)).

A federal district court may only assert personal jurisdiction over a nonresident defendant when two conditions are satisfied: "First, the exercise of jurisdiction must be authorized by the long-arm statute of the forum state, and, second, the exercise of personal jurisdiction must also comport with Fourteenth Amendment due process requirements." Christian Sci. Bd. of Dirs. of First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001) (citation omitted). North Carolina's long-arm statute, N.C. Gen. Stat. § 1-75.4(1)d, is construed "to extend jurisdiction over nonresident defendants to the full extent permitted by the Due Process Clause." Christian Sci. Bd. of Dirs., 259 F.3d at 215 (citing Century Data Sys., Inc. v. McDonald, 109 N.C. App. 425, 427, 428 S.E.2d 190, 191 (1993)). "Thus, the dual jurisdictional requirements collapse into a single inquiry as to whether the defendant has such 'minimal contacts' with the forum state that 'maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Id. (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

Minimum contacts sufficient to establish personal jurisdiction over a nonresident defendant may exist by virtue of either specific jurisdiction or general jurisdiction. See Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 397 (4th Cir. 2003). Specific jurisdiction considers instances where the nonresident defendant's "contacts with the forum also provide the basis for the suit" whereas general jurisdiction considers instances where the defendant's contacts with the forum are so "continuous and systematic" as to provide support for jurisdiction over any cause of action. See id. (citation omitted). A defendant's conduct and connection to the forum must be "such that [it] should reasonably anticipate being haled into court there." Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 559 (4th Cir. 2014)

III. ANALYSIS

In their Complaint and response to Defendant's motion, Plaintiffs allege this court has personal jurisdiction over Defendant because Defendant engages in substantial activity in North Carolina, has customers in North Carolina, the injury was suffered in North Carolina, and Defendant solicited business within this state. (Compl. (Doc. 1) at 2; Pls.' Mem. (Doc. 12) at 7.) Defendant contends this court does not have personal jurisdiction because the work performed for Plaintiffs wasperformed in Virginia, and Defendant does not actively nor regularly solicit business in North Carolina. (Def.'s Br. (Doc. 13) at 7.) In this case, Plaintiffs have not stated whether they seek to demonstrate that this court has general or specific jurisdiction over the corporate Defendant in this...