Skinner v. Preferred Credit
| Decision Date | 16 August 2005 |
| Docket Number | No. COA04-1450.,COA04-1450. |
| Citation | 616 S.E.2d 676 |
| Parties | Garry Lee SKINNER, and wife Judy Cooper Skinner, individually and on behalf of other similarly situated individuals, Plaintiffs, v. PREFERRED CREDIT, also known as Preferred Credit Corporation, also known as Preferred Mortgage Company, also known as T.A.R. Preferred Mortgage Corporation; US Bank N.A.; US Bank NA, ND; Imperial Credit Industries, Inc; ICIFC Secured Assets Corporation 1997-1; Mortgage Pass-Through Certificates, Series 1997-1; ICIFC Secured Assets Corporation Mortgage Pass-Through Certificates, Series 1997-2; ICIFC Secured Assets Corporation Mortgage Pass-Through Certificates, Series 1997-3; Empire Funding Home Loan Owner Trust 1998-1; Credit Suisse First Boston Mortgage Securities Corporation; CS First Boston Mortgage Securities Corporation Preferred Mortgage Asset-Backed Certificates, Series 1996-2; Credit Suisse First Boston Mortgage Securities Corporation Preferred Credit Asset-Backed Certificates, Series 1997-1; Bankers Trust Company; GMAC-Residential Funding Corporation; Life Bank; Life Financial Home Loan Owner Trust 1997-3; United Mortgage C.B., LLC; Banc One Financial Services; IMH Assets Corp. Collateralized Asset-Backed Bonds Series 1999-1; and Wilmington Trust Company, Defendants. |
| Court | North Carolina Supreme Court |
Shipman Gore Mason & Wright, LLP, by Gary K. Shipman, Wilmington, and William G. Wright, Raleigh, for plaintiffs-appellants.
Womble Carlyle Sandridge & Rice, PLLC, by Hada V. Haulsee and Ronald R. Davis; Leslie A. Greathouse, Santa Ana, CA, pro hac vice, for defendants-appellees Preferred Credit Trust 1997-1 and Bankers Trust Company.
Garry Lee Skinner and Judy Cooper Skinner ("Skinners"), as individuals and on behalf of all other individuals similarly situated (collectively, "plaintiffs"), appeal an order dismissing plaintiffs' complaint against Preferred Credit Trust 1997-1 ("Trust 1997-1") and Bankers Trust Company (collectively, "defendants") under Rule 12(b)(1), Rule (2), and Rule (6) of the North Carolina Rules of Civil Procedure. We affirm.
The Skinners obtained a second mortgage loan from defendant Preferred Credit on 22 January 1997. The loan was secured by a lien on their residential real property. After the closing date, the loan was assigned to Trust 1997-1. Trust 1997-1 holds mortgage loans, receives income from the mortgage loans, and distributes that income to holders of its certificates.
The Skinners allege defendant Preferred Credit charged excessive loan origination fees and interest rates for the loan in violation of North Carolina's usury law. Plaintiffs filed a class action complaint on 3 December 2001 against multiple defendants asserting violations of North Carolina's Usury Statutes and Unfair and Deceptive Trade Practices Act.
On 12 May 2003, the Chief Justice of the North Carolina Supreme Court designated this case as "exceptional" and assigned Judge Hight to hold sessions. Defendants' motions to dismiss under Rule 12(b)(1), Rule (2), and Rule (6) were heard by Judge Hight. The trial court reviewed the pleadings, read briefs submitted by plaintiffs and defendants, and heard statements and arguments in open court by both plaintiffs and defendants.
On 9 June 2004, the trial court entered its order which determined: (1) plaintiffs voluntarily dismissed claims against defendants Credit Suisse First Boston Mortgage Securities Corporation, Imperial Credit Industries, Inc., Banc One Financial Services, Life Bank, Life Financial Home Loan Owner Trust 1997-3, Wilmington Trust Company, and GMAC-Residential Funding Corporation; (2) plaintiffs voluntarily dismissed all claims against defendant U.S. Bank, N.A., ND. with prejudice; (3) plaintiffs conceded lack of standing against defendants U.S. Bank N.A., Empire Funding Home Loan Owner Trust 1998-1, ICIFC Secured Assets Corporation Mortgage Pass-Through Certificates, Series 1997-1, ICIFC Secured Assets Corporation Mortgage Pass-Through Certificates, Series 1997-2, ICIFC Secured Assets Corporation Mortgage Pass-Through Certificates, Series 1997-3, Preferred Mortgage Trust 1996-2, United Mortgage C.B., LLC, and IMH Assets Corp. Collateralized Asset-Backed Bonds Series 1999-1; (4) plaintiffs lack personal jurisdiction over IMPAC Mortgage Holdings, Inc., IMPAC Secured Assets Corporation, IMPAC Secured Assets CMN Trust Series 1998-1 Collateralized Asset-Backed Notes, Series 1998-1, and Trust 1997-1; (5) plaintiffs lack standing to assert claims against defendants IMPAC Funding Corporation, IMPAC Mortgage Holdings, Inc., IMPAC Secured Assets Corporation, Bankers Trust Company of California, NA, and Bankers Trust Company; and (6) plaintiffs' complaint fails to state any claim upon which relief may be granted against any of defendants. Plaintiffs appeal.
The issues on appeal are whether: (1) plaintiffs have personal jurisdiction over Trust 1997-1; and (2) the applicable statute of limitations periods have expired concerning plaintiffs' claims against defendants for violations of N.C. Gen.Stat. § 24-10 and N.C. Gen.Stat. § 75-1.1.
After filing its notice of appeal, plaintiffs filed with this Court a motion to dismiss its appeal with respect to: (1) IMPAC Funding Corporation; (2) IMPAC Mortgage Holdings, Inc.; (3) IMPAC Secured Assets Corporation; (4) IMPAC Secured Assets CMN Trust Series 1998-1 Collateralized Asset-Backed Notes, Series 1998-1; and (5) Bankers Trust Company of California, N.A. We allowed this motion pursuant to Rule 37 of the North Carolina Rules of Appellate Procedure. N.C.R.App. P. 37 (2004). The sole remaining defendants are Trust 1997-1 and its trustee, Bankers Trust Company.
Plaintiffs assert the trial court erred in determining they lacked personal jurisdiction over Trust 1997-1. We disagree.
"The 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." Better Business Forms, Inc. v. Davis, 120 N.C.App. 498, 500, 462 S.E.2d 832, 833 (1995). "If presumed findings of fact are supported by competent evidence, they are conclusive on appeal despite evidence to the contrary." Cameron-Brown Co. v. Daves, 83 N.C.App. 281, 285, 350 S.E.2d 111, 114 (1986).
A court must engage in a two-part inquiry to determine whether personal jurisdiction over a non-resident defendant is properly asserted. Better Business Forms, Inc., 120 N.C.App. at 500, 462 S.E.2d at 833. First, the court must determine whether North Carolina's "long-arm" statute authorizes jurisdiction over the defendant. N.C. Gen.Stat. § 1-75.4 (2003). If so, the court must determine whether the court's exercise of jurisdiction over the defendant is consistent with due process. Better Business Forms, Inc., 120 N.C.App. at 500, 462 S.E.2d at 833.
Tejal Vyas, LLC v. Carriage Park Ltd. P'ship, 166 N.C.App. 34, 37, 600 S.E.2d 881, 884-85 (2004), aff'd per curiam, 359 N.C. 315, 608 S.E.2d 751 (2005).
Plaintiffs assert three subsections of North Carolina's long-arm statutes provide them personal jurisdiction over Trust 1997-1:(1) N.C. Gen.Stat. § 1-75.4(1)(d); (2) N.C. Gen.Stat. § 1-75.4(5)(d); and (3) N.C. Gen.Stat. § 1-75.4(6)(b).
N.C. Gen.Stat. § 1-75.4(1)(d) (2003) provides that if the defendant is "engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise[,]" personal jurisdiction exists. N.C. Gen.Stat. § 1-75.4(5)(d) (2003) states that if the plaintiff shipped "goods, documents of title, or other things of value from [North Carolina to the defendant on its] order or direction," personal jurisdiction exists. Under N.C. Gen.Stat. § 1-75.4(6)(b) (2003), personal jurisdiction exists
[i]n any action which arises out of: A claim to recover for any benefit derived by the defendant through the use, ownership, control or possession by the defendant of tangible property situated within this State either at the time of the first use, ownership, control or possession or at the time the action is commenced[.]
Trust 1997-1 correctly notes and our review of the record shows plaintiffs' claims against defendants arose out of allegedly "excessive and illegal origination fees" and "unfair and deceptive acts associated with the making and collection of the loans." Trust 1997-1 had no connection with the origination of the loans, payment of the origination fees, and does not directly collect or direct the collection of loan payments. Trust 1997-1 has no employees and merely holds payments for the benefit of its certificate holders after receipt from its servicer in California. Trust 1997-1 neither engages in "substantial activity within this State" to satisfy N.C. Gen.Stat. § 1-75.4(1)(d) nor receives "shipped goods, documents of title, or other things of value" from North Carolina under N.C. Gen.Stat. § 1-75.4(5)(d).
This Court addressed the applicability of N.C. Gen.Stat. § 1-75.4(6)(b) to a nonresident defendant who only had an interest in a note secured by a deed of trust on real property in North Carolina in Whitener v. Whitener, 56 N.C.App. 599, 601, 289 S.E.2d 887, 889, disc. rev. denied, 306 N.C. 393, 294 S.E.2d 221 (1982). In Whitener, the plaintiff filed a complaint in North Carolina state court against his exwife, a Florida resident. Id. He sought an accounting of payments she received in Florida from a purchase money note related to a pre-divorce sale of North Carolina real property. Id. at 602, 289 S.E.2d at 889. The defendant challenged the existence of personal jurisdiction. Id. at 600, 289 S.E.2d...
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