Rossetto Usa v. Greensky Financial, LLC

• Decision Date: 01 July 2008
• Docket Number: No. COA07-1529.,COA07-1529.
• Citation: 662 S.E.2d 909
• Parties: ROSSETTO USA, INC., Plaintiff, v. GREENSKY FINANCIAL, LLC, Furniture Retailers, LLC, and EclecticGlobal, LLC, Defendants.
• Court: North Carolina Court of Appeals

662 S.E.2d 909

ROSSETTO USA, INC., Plaintiff, v. GREENSKY FINANCIAL, LLC, Furniture Retailers, LLC, and EclecticGlobal, LLC, Defendants.

No. COA07-1529.

Court of Appeals of North Carolina.

July 1, 2008.

Appeal by Defendants Greensky Financial, LLC, and Furniture Retailers, LLC, from order entered 1 October 2007 by Judge L. Todd Burke in Guilford County Superior Court. Heard in the Court of Appeals 1 May 2008.

Forman Rossabi Black, P.A., by Amiel J. Rossabi and Emily J. Meister, Greensboro, for Plaintiff-Appellee.

Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Clinton R. Pinyan and John S. Buford, Greensboro, for Defendants-Appellants.

ARROWOOD, Judge.

Greensky Financial, LLC (Greensky), and Furniture Retailers, LLC (Furniture Retailers) (together, Defendants), appeal from order entered 1 October 2007 denying Defendants' N.C. Gen.Stat. § 1A-1, Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. EclecticGlobal, LLC (Eclectic), did not challenge the jurisdiction of the court. Defendants appeal pursuant to N.C. Gen. Stat. § 1-277(b). We affirm in part and reverse in part.

The evidence of record tends to show that Greensky and Furniture Retailers are Limited Liability Companies with their principal places of business in Atlanta, Georgia. Eclectic also operated with its principal place of business in Georgia. Rossetto USA, Inc. (Rossetto), operates with its principal place of business in Guilford County, North Carolina, selling and distributing furniture. In 2004, Rossetto entered into a contract to sell furniture to Eclectic, and Rossetto shipped furniture from North Carolina to Georgia. Greensky, a financing company, had a contractual relationship with Eclectic, and pursuant thereto, Greensky made "frequent" payments on behalf of Eclectic to Plaintiff between 2004 and 2006, either by mailing checks to Rossetto at Rossetto's office in North Carolina or by wiring payments to Rossetto's account in North Carolina. Rossetto also received numerous communications and phone calls from Greensky in North Carolina.

In November 2006, Eclectic placed an order for various items of furniture with Rossetto. While the items were in transit, Rossetto learned from Greensky that Furniture Retailers had "[begun] to operate, control or assume the business of Eclectic." Rossetto immediately issued a revised invoice to Furniture Retailers, who took possession of the furniture upon delivery. Rossetto also received a call in their office in North Carolina from a man named, "Dean," — an employee of Furniture Retailers, who had questions about the furniture. Rossetto learned that Furniture Retailers advertised Rossetto furniture online through eBay. Rossetto received an email from a customer, which was "issued or sent by Greensky." The email "shows that Greensky [attempted] to sell Rossetto's furniture even though it has not paid Rossetto for such furniture."

On 25 April 2007, Rossetto filed a complaint against Greensky, Furniture Retailers and Eclectic, alleging breach of contract or quasi-contract and conversion.

On 2 July 2007, Greensky and Furniture Retailers filed a motion to dismiss for lack of personal jurisdiction, contending that Greensky and Furniture Retailers had no "local presence or status" in North Carolina and that they "did not make a promise to Plaintiff[,]" with regard to an exchange of goods or services in North Carolina. Defendants submitted the affidavit of David Zalik (Zalik), managing member of both Greensky and Furniture Retailers, and Plaintiffs submitted the affidavit of Andrea Verardo (Verardo), an employee of Rossetto. Eclectic did not challenge the jurisdiction of the court.

On 1 October 2007, the trial court entered an order denying Defendants' motion to dismiss for lack of personal jurisdiction. From this order, and pursuant to N.C. Gen.Stat. § 1-277(b) (2007), which provides for "the right of immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of the defendant[,]" Defendants appeal.

Personal Jurisdiction

The dispositive issues here are whether Greensky and Furniture Retailers had the requisite "minimum contacts" with North Carolina such that the exercise of personal jurisdiction over Greensky and Furniture Retailers did not violate their right to due process under the U.S. Constitution. When addressing a question of personal jurisdiction, the court engages in a two-step inquiry.

"First, the court must determine whether the applicable long-arm statute permits the exercise of jurisdiction over the defendant. Next, the court determines whether the exercise of jurisdiction comports with due process under the Fourteenth Amendment. North Carolina's long-arm statute, N.C. Gen.Stat. § 1-75.4, was enacted to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process. Since the North Carolina legislature designed the long-arm statute to extend personal jurisdiction to the limits permitted by due process, the two-step inquiry merges into one question: whether the exercise of jurisdiction comports with due process."

Lang v. Lang, 157 N.C.App. 703, 707-08, 579 S.E.2d 919, 922 (2003) (quoting Regent Lighting Corp. v. Galaxy Elec. Mfg., Inc., 933 F.Supp. 507, 509-10 (1996)) (internal quotation marks omitted).

Generally, our "`standard of review of an order determining jurisdiction is whether the findings of fact by the trial court are supported by competent evidence in the record; if so, this Court must affirm the order of the trial court.'" Tejal Vyas, LLC v. Carriage Park Ltd. P'ship, 166 N.C.App. 34, 37, 600 S.E.2d 881, 884 (2004) (quoting Better Business Forms, Inc. v. Davis, 120 N.C.App. 498, 500, 462 S.E.2d 832, 833 (1995)), aff'd, 359 N.C. 315, 608 S.E.2d 751 (2005). "The standard of review to be applied by a trial court in deciding a motion under Rule 12(b)(2) depends upon the procedural context confronting the court." Eaker v. Gower, N.C.App. ___, ___, 659 S.E.2d 29, 31 (2008); see also Banc of Am. Secs. LLC v. Evergreen Int'l Aviation, Inc., 169 N.C.App. 690, 693, 611 S.E.2d 179, 182-83 (2005). When parties "submit dueling affidavits ... the court may hear the matter on affidavits presented by the respective parties, or the court may direct that the matter be heard wholly or partly on oral testimony or depositions." Eaker, ___ N.C.App. at ___, 659 S.E.2d at 31-32. "If the trial court chooses to decide the motion based on affidavits, the trial judge must determine the weight and sufficiency of the evidence presented in the affidavits much as a juror." Id., 659 S.E.2d at 32.

Here, the trial court did not make findings of fact in its order. However, absent a request by the parties, which does not appear in the record, the trial court is not required to find the facts upon which its ruling is based. N.C. Gen.Stat. § 1A-1, Rule 52(a)(2) (2007). "`In such case, it will be presumed that the judge, upon proper evidence, found facts sufficient to support his judgment.'" A.R. Haire, Inc. v. St. Denis, 176 N.C.App. 255, 258, 625 S.E.2d 894, 898 (2006) (quoting City of Salisbury v. Kirk Realty Co., Inc., 48 N.C.App. 427, 429, 268 S.E.2d 873, 875 (1980)) (internal quotation marks omitted). Defendants and Plaintiff submitted dueling affidavits addressing personal jurisdiction. Therefore, we review the record to determine whether it contains competent evidence to support the trial court's presumed findings to support its ruling that Defendants were subject to personal jurisdiction in the courts of this state.

"To establish in personam jurisdiction over non-resident defendants, there must be `certain minimum contacts [between the non-resident defendant and the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" A.R. Haire, 176 N.C.App. at 255, 625 S.E.2d at 897 (quoting Tom Togs, Inc. v. Ben Elias Indus. Corp., 318 N.C. 361, 365, 348 S.E.2d 782, 786 (1986)).

"Application of the minimum contacts rule `will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'"

Skinner v. Preferred Credit, 361 N.C. 114, 123, 638 S.E.2d 203, 210-211 (2006) (quoting Chadbourn, Inc. v. Katz, 285 N.C. 700, 705, 208 S.E.2d 676, 679 (1974)).

In determining minimum contacts, the court looks at several factors, including: (1) the quantity of the contacts; (2) the nature and quality of the contacts; (3) the source and connection of the cause of action with those contacts; (4) the interest of the forum state; and (5) the convenience to the parties.

A.R. Haire, 176 N.C.App. at 260, 625 S.E.2d at 899. No single factor controls, but all factors "must be weighed in light of fundamental fairness and the circumstances of the case." B.F. Goodrich Co. v. Tire King; Smith v. Hill, 80 N.C.App. 129, 132, 341 S.E.2d 65, 67 (1986). "Whether minimum contacts are present is determined not by using a mechanical formula or rule of thumb but by ascertaining what is fair and reasonable under the circumstances." Better Business Forms, Inc., 120 N.C.App. at 500, 462 S.E.2d at 833-34. "In light of modern business practices, the quantity, or even the absence, of actual physical contacts with the forum state merely constitutes a factor to be considered and is not controlling in determining whether minimum contacts exists." Starco, Inc. v. AMG Bonding and Ins. Services, 124 N.C.App. 332, 340, 477 S.E.2d 211, 216 (1996).

We first examine whether the exercise of personal jurisdiction of the court with regard to Greensky comports with due process. We conclude Greensky had minimum contacts in this State.

The affidavits submitted by Zalik and Verardo provided the following evidence to support the trial court's presumed findings...