Wall v. Automoney, Inc.

• Decision Date: 19 July 2022
• Docket Number: COA21-419
• Parties: Doris WALL, Patricia Smith, Corey Davis, Mario Robinson, Timothy Smith, Gloria Gilliam, Michael Waddell, Teria Bouknight, June Barbour, Emmanuel Smith, Donquis Jones, Dianne Kirkpatrick, Asbury Forte, III, Aretha Hayes and Poonam Patel, Plaintiffs, v. AUTOMONEY, INC., Defendant.
• Court: North Carolina Court of Appeals

284 N.C.App. 514

877 S.E.2d 37

Doris WALL, Patricia Smith, Corey Davis, Mario Robinson, Timothy Smith, Gloria Gilliam, Michael Waddell, Teria Bouknight, June Barbour, Emmanuel Smith, Donquis Jones, Dianne Kirkpatrick, Asbury Forte, III, Aretha Hayes and Poonam Patel, Plaintiffs,

v.AUTOMONEY, INC., Defendant.

No. COA21-419

Court of Appeals of North Carolina.

Filed July 19, 2022

Brown, Faucher, Peraldo & Benson, PLLC, Greensboro, by James R. Faucher and Jeffrey K. Peraldo, for plaintiffs-appellees.

Womble Bond Dickinson (US) LLP, by Michael Montecalvo, Winston-Salem, and Scott D. Anderson, Raleigh, and Law Offices of L. W. Cooper Jr., LLC, by Lindsey W. Cooper Jr., for defendant-appellant.

HAMPSON, Judge.

Factual and Procedural Background

¶ 1 Automoney, Inc. (Defendant) appeals from an Order entered 15 January 2021 denying Defendant's Motion to Dismiss under N.C.R. Civ. P. 12(b)(2), (b)(3) and (b)(6). The Record before us—including the factual allegations contained in Plaintiffs’ Complaint—tends to reflect the following:

¶ 2 Defendant is a South Carolina corporation who makes consumer car title loans to residents of North Carolina. Plaintiffs are residents of North Carolina who entered into loan agreements with Defendant in amounts ranging from $621.00 to $3,520.00. Defendant based the amount of the loan on the value of an individual Plaintiff's car and placed a lien on the vehicle to secure the loan. Defendant registered these liens with the North Carolina Department of Motor Vehicles. Plaintiffs’ loan agreements included an annual percentage rate (APR) set by Defendant that ranged from 129% to 229%. All the loan agreements also included a choice-of-law provision that read, in relevant part:

As Lender is a regulated South Carolina consumer finance company and you, as Borrower, have entered into this Agreement in South Carolina, this Agreement shall be interpreted, construed, and governed by and under the laws of the State of South Carolina, without regard to conflicts of law rules and principles ... that would cause the application of the laws of any jurisdiction other than the State of South Carolina.¹

In 2018, this choice-of-law provision was updated to include a choice-of-venue provision that stated, in relevant part:

In the event that any dispute whatsoever arises between the Parties ... the Dispute shall be brought exclusively in the courts of competent jurisdiction located in the State of South Carolina, and the exclusive jurisdiction of the state and federal courts located therein....

Ten out of the fifteen Plaintiffs’ agreements included this choice-of-venue provision.

¶ 3 On 4 June 2020, Plaintiffs filed a Complaint in Richmond County Superior Court alleging three causes of action against Defendant for violations of N.C. Gen. Stat. § 53-165 et. seq. —the North Carolina Consumer Finance Act (NCCFA)—, N.C. Gen. Stat. § 75-1.1 —Unfair and Deceptive Trade Practices Act (UDTPA)—, and alternatively, N.C. Gen. Stat. § 24-1.1, et seq. —Usury. Specifically, Plaintiffs alleged Defendant violated the NCCFA by charging each Plaintiff annual interest rates that far exceed the maximum annual rate of interest allowed by the statute; alternatively, violated the usury laws by soliciting Plaintiffs for the loans, discussing and negotiating the loans, offering to make Plaintiffs loans, and receiving each Plaintiffs’ acceptance to the loans while Plaintiffs were in the State of North Carolina; and violated the UDTPA by knowingly extending usurious loans to North Carolina residents. Plaintiffs sought a declaratory judgment declaring the loans and security interests thereon to be void and unenforceable and to recover statutory damages in an amount not in excess of $75,000.00 each.

¶ 4 Moreover, in their Complaint, Plaintiffs alleged:

3. This Court has jurisdiction over Defendant pursuant to N.C. G.S. § 1-75.4 in that at all times relevant to the events and transactions alleged herein, Defendant, via the internet, cellular telephone and other media and communication methods solicited, marketed, advertised, offered, accepted, discussed, negotiated, facilitated, collected on, threatened enforcement of, and foreclosed upon automobile title loans with Plaintiffs and other North Carolina citizens ... Plaintiffs further allege that, for a considerable amount of time prior to the events and transactions with Plaintiffs as alleged herein, Defendant had regular, ongoing, continuous and systematic contacts with the State of North Carolina and its citizens ... such that this Court has personal jurisdiction over Defendant.

7. Defendant has knowingly and intentionally constructed and engineered it[s] internet advertising to ensure that Defendant's South Carolina office locations appear as internet search results when a North Carolina consumer conducts an internet search for a "car title loan" or similar terms.

8. Defendant has purposefully established its business locations just across the North Carolina-South Carolina state line to avoid the application of North Carolina law to loan contracts Defendant enters into with North Carolina residents, such as Plaintiffs.

¶ 5 On 22 July 2020, Defendant filed a Motion to Dismiss alleging: (1) Defendant was not subject to personal jurisdiction in North Carolina and the action should be dismissed pursuant to N.C.R. Civ. P. 12 (b)(2) ; (2) venue was improper in Richmond County under N.C.R. Civ. P. 12(b)(3) and the matter was required to be brought in South Carolina based on the forum selection clause contained in ten out of the fifteen named Plaintiffs’ loan agreements; and, (3) the Complaint failed to state a claim on which relief under North Carolina law could be granted under N.C.R. Civ. P. 12(b)(6) based on the choice-of-law clauses in the Plaintiffs’ loan agreements. In support of its Motion to Dismiss, Defendant also filed the Affidavit of Linda Derbyshire, (Derbyshire) the owner, executive officer, and manager of Defendant. Derbyshire denied Plaintiffs’ allegations that Defendant solicited, marketed, advertised, offered, accepted, discussed, negotiated, facilitated, or otherwise made any title loans in North Carolina. Defendant also attached Plaintiffs’ loan agreements showing the choice-of-law provisions and forum selection clauses.

¶ 6 Plaintiffs subsequently filed Affidavits in opposition to Defendant's Motion to Dismiss. In these affidavits, Plaintiffs rebuffed Derbyshire's claim that Defendant had no contacts with North Carolina. For example, Plaintiffs submitted, inter alia , an authenticated page from Defendant's website that specifically targeted North Carolina residents and claimed to have made "thousands" of loans to North Carolinians and be the "trusted name in title loans" in North Carolina; an affidavit from an assistant manager and loan officer for Defendant who stated Defendant mailed loan solicitation flyers into North Carolina to both current and former borrowers and regularly engaged in phone conversations with North Carolina residents regarding Defendant's loans; an affidavit from the Owner and Managing Member of the North Carolina publication "Steals & Deals" who—from February 2013 to May 2019—ran a weekly advertisement for Defendant's title loans to residents of North Carolina; and a manager of Associates Asset Recovery, LLC, a North Carolina business, who recovered 442 motor vehicles for Defendant in North Carolina over the course of four years.

¶ 7 On 30 November 2020 Defendant's Motion to Dismiss came on for hearing and the trial court denied the Motions to Dismiss by Order entered 15 January 2021. Defendant filed Notice of Appeal on 10 February 2021.

Appellate Jurisdiction

¶ 8 Here, the trial court's Order constitutes three separate interlocutory rulings denying Defendant's Motion to Dismiss alleging lack of personal jurisdiction, improper venue, and failure to state a claim. "Generally, the denial of a motion to dismiss is not immediately appealable to this Court because it is interlocutory in nature." McClennahan v. N.C. School of the Arts , 177 N.C. App. 806, 808, 630 S.E.2d 197, 199 (2006) (citation and quotation omitted). "An 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." Id. "However, N.C. Gen. Stat. § 1-277 allows a party to immediately appeal an order that either (1) affects a substantial right or (2) constitutes an adverse ruling as to personal jurisdiction." Id.

¶ 9 First, the denial of Defendant's Motion asserting lack of personal jurisdiction is clearly immediately appealable under Section 1-277(b). See Cohen v. Cont'l Motors, Inc. , 279 N.C. App. 123, 2021-NCCOA-449, ¶ 16-17, 864 S.E.2d 816, disc. rev. denied , ––– N.C. ––––, 868 S.E.2d 859 (2022) ; see also A.R. Haire, Inc. v. St. Denis , 176 N.C. App. 255, 257–58, 625 S.E.2d 894, 898 (2006) ("[M]otions to dismiss for lack of personal jurisdiction affect a substantial right and are immediately appealable").

¶ 10 Second, we have previously recognized an order denying a motion based on improper venue and which asserts venue is proper elsewhere may affect a substantial right. Thompson v. Norfolk & Southern Ry. , 140 N.C. App. 115, 121-122, 535 S.E.2d 397, 401 (2000). Likewise, orders addressing the validity of a forum selection clause also affect a substantial right. US Chem. Storage, LLC v. Berto Constr., Inc. , 253 N.C. App. 378, 381, 800 S.E.2d 716, 719 (2017). Thus, Defendant's appeal from the denial of its motion based on improper venue is also properly before us.

¶ 11 Third, immediate appealability of the denial of Defendant's Motion to Dismiss under Rule 12(b)(6) based on the assertion of a choice-of-law clause is less clear. Nevertheless, in several other cases involving choice-of-law related issues, this Court has elected to review the matter under writ of certiorari. Harco Nat. Ins. Co. v. Grant Thornton LLP , 206 N.C. App. 687, 691, 698...