Starco, Inc. v. AMG Bonding and Ins. Services, Inc.

• Decision Date: 05 November 1996
• Docket Number: No. COA95-1315,COA95-1315
• Citation: 124 N.C.App. 332,477 S.E.2d 211
• Parties: STARCO, INC., Plaintiff v. AMG BONDING AND INSURANCE SERVICES, INC., Dale Clark, Dale Clark Bonding, Inc., Defendants.
• Court: North Carolina Court of Appeals

Page 211

477 S.E.2d 211

124 N.C.App. 332

STARCO, INC., Plaintiff v. AMG BONDING AND INSURANCE SERVICES, INC., Dale Clark, Dale Clark Bonding, Inc., Defendants.

No. COA95-1315.

Court of Appeals of North Carolina.

Nov. 5, 1996.

Wallace, Morris, Barwick & Rochelle, P.A. by Edwin M. Braswell, Jr., Kinston, for plaintiff-appellee.

Teague, Campbell, Dennis & Gorham, L.L.P. by George H. Pender, Raleigh, for defendant-appellee Dale Clark.

White & Allen, P.A. by John C. Archie, Kinston, for defendant-appellant AMG Bonding Insurance Services, Inc.

JOHNSON, Judge.

On 24 February 1995, plaintiff Starco, Inc. filed this action alleging claims for breach of contract and negligence against defendants AMG Bonding and Insurance Services, Inc. (AMG) and Dale Clark. Defendant Clark filed an answer generally denying any liability to plaintiff. AMG filed a motion to dismiss pursuant to Rule 12(b)(2) of the North Carolina Rules of Civil Procedure, contending that the court lacked personal jurisdiction in the action. This motion came on for hearing before Judge D.B. Herring during the 11 September 1995 civil session of Lenoir County Superior Court.

The evidence presented tended to show the following. AMG is a corporation organized under and existing by virtue of the laws of Arizona. AMG's only business office is located in Scottsdale, Arizona. AMG is in the business of procuring bonds for various purposes. AMG locates and provides potential corporate or individual sureties with information concerning the contractor or the project, or both. Most of AMG's business comes from referrals, rather than active solicitation. AMG does not own, lease or maintain real or personal property in North Carolina; does not have bank accounts in North Carolina; does not have employees or agents in North Carolina; does not have mailing addresses or maintain phone numbers in North Carolina; does not conduct its internal corporate affairs in North Carolina; has never borrowed money in North Carolina; does not collect debts in North Carolina; does not advertise in North Carolina; and does not manufacture, process, or service goods which are used or consumed in North Carolina. Further, AMG has never filed any documents to be registered as a foreign corporation with the office of the North Carolina Secretary of State. There is, however, evidence in the record which tends to show that an agent of defendant AMG had solicited defendant Clark's business, Clark Bonding Company, Inc., d/b/a The Bond Exchange, for assistance in bonding some of their clients some five years previously. Moreover, in July or August of 1994, an AMG agent telephoned defendant Clark soliciting business for defendant AMG; and followed up this telephone conversation with mailing defendant Clark a business card, information regarding AMG's individual surety program, a copy of AMG's bond request form, and several pages of federal regulations in reference to the federal acquisition regulation system. As a result, defendant Clark submitted underwriting packages for plaintiff, Superior Industrial Maintenance, Whitehurst Fence and Science and Technology. Consequently, defendant AMG issued bid bonds for plaintiff, Superior Industrial Maintenance and Science and Technology.

After hearing all of the evidence and the arguments of all of the parties, Judge Herring entered an order denying defendant AMG's motion to dismiss plaintiff's claim for lack of personal jurisdiction. Defendant AMG appeals. On appeal, defendant AMG brings forth some fourteen (14) assignments of error and arguments on appeal. For purposes of thorough, but concise discussion, these arguments will be grouped herein.

A. Errors in the Trial Court's Findings of Fact

Defendant AMG, in assignments of error 1 and 2, takes issue with the trial court's finding of fact 2--"That on the 27th day of February 1995, the defendant AMG Bonding and Insurance Services, Inc. was served with said Summons and a copy of said Complaint by certified mail"; and finding of fact 10--"That said affidavit is incorporated herein by reference and the statements in said affidavit are accepted by the [c]ourt as findings of fact." Defendant contends that these findings of fact are unsupported by competent evidence and are, therefore, error.

1. FINDING OF FACT 2

It is well-settled that appellate review of findings of fact and conclusions of law made by a trial judge, without a jury, is limited to a determination of whether there is competent evidence to support his findings of fact and whether, in light of such findings, his conclusions of law were proper. Shear v. Stevens Building Co., 107 N.C.App. 154, 160, 418 S.E.2d 841, 845 (1992). Moreover, findings of fact by a trial judge in a non-jury trial have the force and effect of a jury verdict; and if the evidence tends to support the trial court's findings, these findings are binding on appeal, even though there may be some evidence to support findings to the contrary. Id.

In the instant case, defendant AMG is quite correct in its contention that the trial court, in finding of fact 2, misstated the date of service of plaintiff's summons and complaint as 27 February 1995, instead of the correct date of 28 February 1995 as noted in plaintiff's affidavit. However, to obtain relief on appeal, an appellant must not only show error, but that appellant must also show that the error was material and prejudicial, amounting to denial of a substantial right that will likely affect the outcome of an action. Cook v. Southern Bonded, Inc., 82 N.C.App. 277, 346 S.E.2d 168 (1986), disc. review denied, 318 N.C. 692, 351 S.E.2d 741 (1987). This, defendant AMG has failed to do.

2. FINDING OF FACT 10

The purpose of requiring a trial judge in a non-jury trial to make appropriate findings of fact and conclusions of law is to assist the appellate courts in its review of said findings and conclusions. Mashburn v. First Investors Corp., 102 N.C.App. 560, 402 S.E.2d 860 (1991). While defendant AMG militates to the contrary, there is no prohibition against incorporating documents by reference and utilizing the contents of such documents as the trial court's findings of fact. See Sealey v. Grine, 115 N.C.App. 343, 444 S.E.2d 632 (1994) (incorporating an exhibit showing costs of court in the trial court's order); Rogers v. Rogers, 111 N.C.App. 606, 432 S.E.2d 907 (1993) (incorporating a separation agreement into a divorce judgment); Cohen v. Cohen, 100 N.C.App. 334, 396 S.E.2d 344 (1990) (incorporating an affidavit into the trial court's child support order), disc. review denied, 328 N.C. 270, 400 S.E.2d 451 (1991). Defendant AMG's reliance on Quick v. Quick, 305 N.C. 446, 290 S.E.2d 653 (1982), for support of this argument is misplaced. In Quick, our Supreme Court was presented with an order, awarding permanent alimony, that was clearly without sufficient findings of facts to support the conclusions of law therein. Id. Herein, the trial court's order is supported by sufficient findings of fact, which are supported by adequate evidence on the record.

As defendant AMG fails to show that any prejudice has resulted in either of the trial court's findings discussed herein, we find no prejudicial error in regards to these assignments of error.

B. Errors in the Trial Court's Conclusions of Law

While a trial court's findings of fact are binding if supported by sufficient evidence, its conclusions of law are reviewable de novo on appeal. Shear, 107 N.C.App. at 160, 418 S.E.2d at 845. Defendant assigns error (assignments of error 3-12) to the following conclusions of law made by the trial court:

2. That the defendant AMG Bonding and Insurance Services, Inc. is engaged in substantial business activity within this State and has a substantial connection with this State.

3. That the plaintiff's suit does not offend traditional notions of fair play and substantial justice.

4. That by soliciting bond business in the State of North Carolina, the defendant AMG Bonding and Insurance Services, Inc. has purposefully availed itself of the laws and protection of the State of North Carolina, and the contact of the defendant AMG Bonding and Insurance Services, Inc. with the State of North Carolina is not random, fortuitous or attenuated.

5. That the defendant is being sued in North Carolina for alleged injuries allegedly arising from activities which he purposefully directed toward a North Carolina resident.

6. That the plaintiff's Complaint alleges that the bid bond in question was to be used in connection with a construction project to be performed in North Carolina and therefore there is significant connection and interest in North Carolina with the subject matter of this action.

7. That North Carolina is the most convenient forum for the plaintiff to seek redress of its alleged injuries.

8. That the defendant AMG Bonding and Insurance Services waived its right to challenge personal jurisdiction by seeking affirmative relief from the Court when it obtained an extension of time to answer the plaintiff's discovery request and thereby invoked the adjudicatory powers of the Court in a matter not directly related to a question of jurisdiction.

9. That the defendant Dale Clark argued for, and concurred with, the entry of this Order.

10. That this Court has jurisdiction over the person of defendant AMG Bonding and Insurance Services, Inc.

11. That the motion of the defendant AMG Bonding and Insurance Services, Inc. to dismiss should be denied.

As all of these conclusions of law address the court's ability to exercise personal jurisdiction over defendant AMG, we will address these assignments of error in tandem.

In order to properly exercise in personam jurisdiction over a nonresident defendant, a two-prong determination must be made. First, we must determine if the General Statutes of North Carolina permit the courts of this state to consider this action against defendant. Second, if so, it must be determined whether the exercise of this...