TD Bank, N.A. v. Crown Leasing Partners, LLC

• Decision Date: 31 December 2012
• Docket Number: No. COA12–648.,COA12–648.
• Citation: 737 S.E.2d 738
• Parties: TD BANK, N.A., Successor–In–Interest to Carolina First Bank, a South Carolina Corporation, Plaintiff v. CROWN LEASING PARTNERS, LLC, a North Carolina Limited Liability Company; Melvin Russell; and Timothy J. Blanchat, Defendants.
• Court: North Carolina Court of Appeals

737 S.E.2d 738

TD BANK, N.A., Successor–In–Interest to Carolina First Bank, a South Carolina Corporation, Plaintiff

v.CROWN LEASING PARTNERS, LLC, a North Carolina Limited Liability Company; Melvin Russell; and Timothy J. Blanchat, Defendants.

No. COA12–648.

Court of Appeals of North Carolina.

Dec. 31, 2012.

Appeal by Defendants from order entered 18 February 2012 by Judge Sharon Tracey Barrett in Buncombe County Superior Court. Heard in the Court of Appeals 23 October 2012.

Moore & Van Allen PLLC, Charlotte, by Daniel G. Clodfelter, for Plaintiff.

Young, Morphis, Bach & Taylor, L.L.P., Hickory, by Jimmy R. Summerlin, Jr., for Defendants.

THIGPEN, Judge.

Crown Leasing Partners, LLC, a North Carolina Limited Liability Company (“Defendant Crown Leasing”), Melvin Russell Shields (“Defendant Shields”), and Timothy J. Blanchat (“Defendant Blanchat”) (together, “Defendants”) appeal from an order entered denying their motion for change of venue from Buncombe County to Catawba County. We reverse and remand the order of the trial court.

The evidence of record tends to show the following: TD Bank, N.A., (“Plaintiff”) is a National Association organized and existing under the National Bank Act under the supervision of the Office of the Comptroller of Currency, and Plaintiff is the successor to Carolina First Bank, a corporation formerly organized and existing under the laws of the State of South Carolina and formerly authorized to conduct business in the State of North Carolina. On 6 October 2011, Plaintiff filed a complaint ¹ in Buncombe County, North Carolina, against Defendants, all of whom are residents of Catawba County, North Carolina.

On 5 December 2011, Defendants filed a motion to dismiss for improper venue pursuant to N.C. Gen.Stat. § 1A–1, Rule 12(b)(3) (2011), or alternatively, a motion to change venue pursuant to N.C. Gen.Stat. §§ 1–83(1) and (2) (2011). As a third alternative, Defendants moved that the complaint should be dismissed pursuant to N.C. Gen.Stat. § 1A–1, Rule 12(b)(5) (2011), due to insufficiency of service of process. However, Defendants withdrew their motions to dismiss pursuant to N.C. Gen.Stat. §§ 1A–1, Rule 12(b)(3) and Rule 12(b)(5) at trial.

In Defendants' motion to change venue pursuant to N.C. Gen.Stat. § 1–83(1) and (2), they argued that “Plaintiff is a National Association and is not a resident of the State of North Carolina and that Defendants are all residents of Catawba County, North Carolina.” Defendants also contended that “most, if not all, witnesses expected to be called herein are residents of Catawba and/or Burke Counties, North Carolina[,]” and “a foreclosure proceeding concerning the Deed of Trust alleged to secure the debt alleged in the Complaint is presently pending in Catawba County, North Carolina.”

At the hearing on their motion, Defendants stated the following:

Your Honor, venue in this action is controlled by General Statute 1–82 which provides that unless otherwise specifically designated, in Article 7 of the General Statutes the case must be tried in the county where the plaintiffs or the defendants or any of them reside. Your Honor, in this case all of the defendants reside in Catawba County, North Carolina, and TD Bank, the plaintiff, does not reside in the state of North Carolina. TD Bank is a national association incorporated under the laws of the National Bank Act. It has its executive offices in Maine and New Jersey. It's not been domesticated into North Carolina and is not subject to the North Carolina Business Corporations Act. It's not a registered entity with the North Carolina Secretary of State Corporations Division. Your Honor, based on that, the fact that TD Bank is a foreign entity not registered and domesticated into North Carolina, the defendants contend that proper venue in this county would be wherever the defendants reside, Catawba County, North Carolina.

On 18 February 2012, the trial court entered an order denying Defendants' motion for change of venue. In the trial court's order, it made the following findings of fact:

1. That the Plaintiff, TD Bank, N.A., is a National Association organized and existing under the National Bank Act under the supervision of the Office of the Comptroller of Currency.

2. That Plaintiff, as the surviving entity following merger, is successor to Carolina First Bank, a corporation formerly organized and existing under the laws of the State of South Carolina and formerly authorized to conduct business in the State of North Carolina.

3. That Plaintiff's principal offices are located in the States of Maine and New Jersey, with branches and has offices in Buncombe County, North Carolina.

4. That each of the Defendants resides in Catawba County, North Carolina.

5. That venue is proper under G.S. § 1–82 in Buncombe County, North Carolina.

6. That there was an insufficient showing by the Defendants as to why justice would not be served through the denial of a change in venue.

7. That the Defendants withdrew the Motion(s) to Dismiss.

8. That the Defendants shall have thirty (30) days from the date of this Order to file a responsive pleading.

Based on the foregoing findings of fact, the trial court ordered the following:

1. That the Defendants' Motion to Change Venue to Catawba County, North Carolina as a matter of right pursuant to G.S. § 1–82 and G.S. § 1–83 is DENIED;

2. That the Defendants' Motion to Change Venue to Catawba County, North Carolina for the convenience of the witnesses and promotion of the ends of justice pursuant to G.S. § 1–83 is DENIED;

3. That the Defendants' Motions to Dismiss pursuant to Rule l2(b)(3) and Rule l2(b)(5) were withdrawn and are DENIED; and

4. That the Defendants shall have to and including thirty (30) days from the date of this Order to file a responsive pleading.

From this order, Defendants appeal.

I. Interlocutory Appeal

Preliminarily, we note that the trial court's order denying Defendants' motion for change of venue is interlocutory, as it is an order made during the pendency of the action, which did not dispose of the case. See Veazey v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381,rehearing denied,232 N.C. 744, 59 S.E.2d 429 (1950) (stating that “[a]n interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy”) (citation omitted); see also Jenkins v. Hearn Vascular Surgery, P.A., ––– N.C.App. ––––, ––––, 719 S.E.2d 151, 153 (2011) (stating that a trial court's order denying a motion for change of venue is an interlocutory order).

“As a general rule, interlocutory orders are not immediately appealable.” Turner v. Hammocks Beach Corp., 363 N.C. 555, 558, 681 S.E.2d 770, 773 (2009) (quotation omitted). However, “immediate appeal of interlocutory orders and judgments is available in at least two instances: when the trial court certifies, pursuant to N.C.G.S. § 1A–1, Rule 54(b), that there is no just reason for delay of the appeal; and when the interlocutory order affects a substantial right under N.C.G.S. §§ 1–277(a) and 7A–27(d)(1).” Id. (citation and quotation marks omitted).

“[T]he denial of a motion for change of venue, though interlocutory, affects a substantial right and is immediately appealable where the county designated in the complaint is not proper.” Caldwell v. Smith, 203 N.C.App. 725, 725, 692 S.E.2d 483, 484 (2010) (citations omitted); see also Roberts v. Adventure Holdings, LLC, 208 N.C.App. 705, 707, 703 S.E.2d 784, 786 (2010), disc. review denied,365 N.C. 187, 707 S.E.2d 241 (2011) (stating that “the grant or denial of venue established by statute is deemed a substantial right, it is immediately appealable”) (internal citation and quotation marks omitted). Because Defendants have alleged the county indicated in the complaint is improper, we address the merits of Defendants' appeal.

II. Venue

Defendants' sole argument on appeal is that the trial court erred by entering an order denying Defendants' motion for change of venue pursuant to N.C. Gen.Stat. § 1–83(1).² Specifically, Defendants argue that venue is improper in Buncombe County because Plaintiff is not a domestic corporation in North Carolina, does not maintain a registered office in the State of North Carolina or Buncombe County, and was not formed under the laws of the State of North Carolina; therefore, Defendants contend, venue is proper in the county where Defendants reside, which is Catawba County. Defendant's argument has merit.

In Defendants' motion and on appeal, Defendants contend venue was improper pursuant to N.C. Gen.Stat. § 1–83(1), which provides that “[t]he court may change the place of trial ... [w]hen the county designated for that purpose is not the proper one.” Id. “The provision in N.C.G.S. § 1–83 that the court ‘may change’ the place of trial when the county designated is not the proper one has been interpreted to mean ‘must change.’ ” Roberts v. Adventure Holdings, LLC, 208 N.C.App. 705, 707, 703 S.E.2d 784, 786 (2010), disc. review denied,365 N.C. 187, 707 S.E.2d 241 (2011) (quotation omitted). “A determination of venue under N.C. Gen.Stat. § 1–83(1) is ... a question of law that we review de novo.” Stern v. Cinoman, –––N.C.App. ––––, ––––, 728 S.E.2d 373, 374,disc. review denied,––– N.C. ––––, 731 S.E.2d 145 (2012) (citations omitted).

N.C. Gen.Stat. § 1–82 (2011) provides, generally, that venue is proper “in the county in which the plaintiffs or the defendants, or any of them, reside at [the] commencement [of the case], or if none of the defendants reside in the State, then in the county in which the plaintiffs, or any of them, reside [.]” Id.N.C. Gen.Stat. § 1–83 provides an avenue of relief to a defendant against whom an action is brought in an improper venue, stating that “[i]f the county designated for that purpose in the summons and complaint is not the proper one, the action may, however, be tried...