Opinion
No. COA12–1146.
2013-05-7
Randy Lynn EDWARDS, Plaintiff, v. Barry Roy HACKNEY, Defendant.
Law Offices of Timothy D. Welborn, P.A., by Jeffery Maggs, Timothy D. Welborn, and Sigsbee Miller, for plaintiff-appellant. Davis and Hamrick, L.L.P., by Kent L. Hamrick and Ann C. Rowe, for defendant-appellee.
Appeal by plaintiff from order entered 11 May 2012 by Judge L. Todd Burke in Alleghany County Superior Court. Heard in the Court of Appeals 12 February 2013. Law Offices of Timothy D. Welborn, P.A., by Jeffery Maggs, Timothy D. Welborn, and Sigsbee Miller, for plaintiff-appellant. Davis and Hamrick, L.L.P., by Kent L. Hamrick and Ann C. Rowe, for defendant-appellee.
Gallivan, White & Boyd, P.A., by James M. Dedman, IV, Christopher M. Kelly, and Gillian S. Crowl, for unnamed defendant-appellee.
DAVIS, Judge.
Plaintiff Randy Lynn Edwards (“plaintiff”) appeals from the Honorable L. Todd Burke's order granting the motion to dismiss filed by defendant Barry Roy Hackney (“defendant”), a Virginia resident, for lack of personal jurisdiction. We affirm the trial court's order.
Factual Background
This case arises out of a collision that occurred on 21 October 2009 in Grayson County, Virginia. Plaintiff was traveling east on Route 58 when defendant, who was traveling west on a motorcycle, crossed the centerline and collided head-on with plaintiff's vehicle. On 12 October 2011, plaintiff filed a complaint in Alleghany County Superior Court alleging that defendant's negligence was the proximate cause of plaintiff's injuries. Zurich North American Insurance (“Zurich”), the insurance company that provided underinsured motorist (“UIM”) coverage to plaintiff, filed an answer denying plaintiff's allegations of negligence and asserting various affirmative defenses. Defendant filed an answer and motion to dismiss based on Rule 12(b)(2) of the North Carolina Rules of Civil Procedure. The motion to dismiss alleged that the trial court lacked personal jurisdiction over defendant.
On 18 April 2012, plaintiff served defendant with discovery requests, including interrogatories and a request for production of documents. Five days later, defendant's motion to dismiss was heard by the trial court. At the conclusion of the hearing, plaintiff requested that the trial court deny defendant's motion or, in the alternative, grant plaintiff more time to conduct discovery in order to determine “in more detail what [defendant's] current contacts are with North Carolina.” The trial court denied plaintiff's motion for a continuance, granted defendant's motion to dismiss, and dismissed plaintiff's complaint with prejudice. The trial court also dismissed plaintiff's complaint against Zurich on the ground that this claim was purely derivative in nature. Plaintiff gave timely notice of appeal.
Analysis
I. Personal Jurisdiction
A. Existence of Minimum Contacts
Plaintiff's first argument on appeal is that the trial court erred in granting defendant's motion to dismiss for lack of personal jurisdiction. Plaintiff contends that defendant has sufficient minimum contacts with the State of North Carolina such that the trial court possessed personal jurisdiction over him. Plaintiff also asserts that defendant waived the defense of lack of personal jurisdiction by making a general appearance.
“The standard of review to be applied by the trial court in deciding a motion under Rule 12(b)(2) depends on the procedural context confronting the court.” Banc of Am. Secs. LLC v. Evergreen Int'l Aviation, Inc., 169 N.C.App. 690, 693, 611 S.E.2d 179, 182 (2005). If, as here, the defendant submits an affidavit or other supplemental evidence in support of his motion to dismiss under 12(b)(2) rebutting the allegations in the complaint, “those allegations can no longer be taken as true and the plaintiff can no longer rest on the allegations.” Lulla v. Effective Minds, LLC, 184 N.C.App. 274, 278, 646 S.E.2d 129, 133 (2007). The trial court must then consider “(1) any allegations in the complaint that are not controverted by the defendant's affidavit and (2) all facts in the affidavit (which are uncontroverted because of the plaintiff's failure to offer evidence)” when determining whether there is sufficient evidence to establish personal jurisdiction over the defendant. Banc of Am. Secs. LLC, 169 N.C.App. at 693–94, 611 S.E.2d at 182–83.
The trial court is not required to make findings of fact in an order dismissing an action for lack of personal jurisdiction unless requested by the parties. Dailey v. Popma, 191 N.C.App. 64, 68, 662 S.E.2d 12, 15–16 (2008). In the absence of findings of fact, it is presumed that the trial court found facts sufficient to support its decision, and we review the record on appeal “to determine whether there is competent evidence to support the trial court's presumed findings.” Id. (citation and quotation marks omitted).
Whether a North Carolina court may exercise jurisdiction over a nonresident defendant requires a two-pronged analysis: First, the court must identify whether a statutory basis for personal jurisdiction exists. If so, the court must then determine whether the exercise of such jurisdiction would violate the defendant's due process rights under the Constitution. J.M. Thompson Co. v. Doral Mfg. Co., 72 N.C.App. 419, 424, 324 S.E.2d 909, 913 (1985).
Under North Carolina's long arm statute, N.C. Gen.Stat. § 1–75.4, a court may exercise jurisdiction over a nonresident defendant if the defendant is “engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise” so long as defendant is properly served with process. N.C. Gen.Stat. § 1–75.4(1)(d) (2011). Thus, the dispositive issue in this case is whether defendant has sufficient minimum contacts with the State of North Carolina “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L.Ed. 95, 102 (1945) (citation and quotation marks omitted).
In determining the existence of minimum contacts, we consider “(1) the quantity of the contacts, (2)[the] nature and quality of the contacts, (3) the source and connection of the cause of action to the contacts, (4) the interest of the forum state, and (5)[the] convenience of the parties.” Filmar Racing, Inc. v. Stewart, 141 N.C.App. 668, 672, 541 S.E.2d 733, 737 (2001).
Plaintiff relies primarily on Sherlock v. Sherlock, 143 N.C.App. 300, 545 S.E.2d 757 (2001), in arguing that defendant had the necessary minimum contacts to permit the exercise of personal jurisdiction over him. Plaintiff contends that defendant's contacts with North Carolina are even more substantial than those deemed sufficient by our Court in Sherlock. In Sherlock, we determined that although the defendant was “seldom physically present within the state,” he had established sufficient minimum contacts by developing “an assortment of financial, legal, and personal connections within North Carolina,” including obtaining a North Carolina driver's license, maintaining a North Carolina bank account where his salary was directly deposited, and executing a power of attorney filed in the Durham County Registry. Id. at 305–06, 545 S.E.2d at 762.
Here, unlike in Sherlock, defendant has a permanent residence outside of North Carolina and has not—within the time period relevant to this action—“purposefully avail[ed] himself of the privilege of conducting activities within the forum state.” Tom Togs, Inc. v. Ben Elias Indus. Corp., 318 N.C. 361, 365, 348 S.E.2d 782, 786 (1986) (citing Hanson v. Denckla, 357 U.S. 235, 253, 2 L.Ed.2d. 1283, 1298 (1958)). Defendant submitted an affidavit in support of his motion to dismiss stating that he has lived in Grayson County, Virginia for the past seven years and—during such time—has not “been engaged in any substantial activity in North Carolina.” He further attested that he files Virginia tax returns, uses Virginia banking institutions, votes in Virginia, maintains a Virginia driver's license, owns only vehicles licensed and tagged in the state of Virginia, is married to a Virginia resident, pays Virginia property and income taxes, and receives all of his mail at his home in Virginia.
In opposing defendant's motion, plaintiff submitted to the trial court unsworn documents evidencing defendant's past connections with North Carolina, including records from the Forsyth County Register of Deeds, Guilford County tax records, and a criminal record search conducted by the Clerk of Superior Court of Forsyth County. Plaintiff also asserted that defendant's wife works in North Carolina, that defendant has likely “taken advantage of North Carolina highways and so forth to visit his family,” and that it “stretches the imagination to believe that [defendant] is not driving vehicles in North Carolina” and purchasing North Carolina goods and services because he lives and works so close to the state line. Finally, plaintiff asserts that defendant's own affidavit stated that he lived in North Carolina prior to moving to Virginia in 2004.
We believe that the evidence offered by plaintiff does not sufficiently rebut defendant's affidavit because the criminal and real estate records relied upon by plaintiff all involved activities by defendant that occurred prior to 2005 and are unrelated to the facts underlying the present cause of action.
In cases which arise from or are related to defendant's contacts with the forum, a court is said to exercise “specific jurisdiction” over the defendant. However, in cases ... where defendant's contacts with the state are not related to the suit, an application of the doctrine of “general jurisdiction” is appropriate. Under this doctrine, “jurisdiction may be asserted even if the cause of action is unrelated to defendant's activities in the forum as long as there are sufficient continuous and systematic contacts between defendant and the forum state.”
Eluhu v. Rosenhaus, 159 N.C.App. 355, 358–59, 583 S.E.2d 707, 710 (2003) (quoting Bruggeman v. Meditrust Acquisition Co., 138 N.C.App. 612, 617, 532 S.E.2d 215, 219 (2000)), aff'd per curiam, 358 N.C. 372, 595 S.E.2d 146 (2004).
The distinction between general and specific jurisdiction is significant because the Supreme Court of the United States has recognized that “the threshold for satisfying minimum contacts for general jurisdiction is higher than in specific jurisdiction cases” and requires a showing that defendant has “ ‘substantial’ forum-related minimum contacts.” Fraser v. Littlejohn, 96 N.C.App. 377, 383, 386 S.E.2d 230, 234 (1989) (citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414, 80 L.Ed.2d 404, 411 (1984)).
Here, plaintiff's complaint alleges that the car accident that is the basis of his claim occurred in Grayson County, Virginia. Neither the complaint nor the record suggests that defendant's alleged contacts with North Carolina are in any way related to the collision. Thus, in this case, because the plaintiff's claim is unrelated to defendant's alleged activities within North Carolina, the doctrine of general jurisdiction applies, and plaintiff must demonstrate that defendant has continuous and systematic contacts with North Carolina. See Bruggeman, 138 N.C.App. at 615, 532 S.E.2d at 217 (holding that plaintiff has burden of proving by preponderance of evidence that jurisdiction is proper at evidentiary hearing on personal jurisdiction).
Plaintiff's assertions that defendant has traveled to North Carolina to visit family or purchase goods are purely speculative and, therefore, inadequate to demonstrate that defendant has the requisite level of contacts with North Carolina. Plaintiff offered no evidence at the hearing that sufficiently contests defendant's affidavit testimony that he has not engaged in any substantial activity in North Carolina within the past seven years. Plaintiff's failure to present such evidence is fatal to his argument that personal jurisdiction existed over defendant. See Wyatt v. Walt Disney World Co., 151 N.C.App. 158, 168, 565 S.E.2d 705, 711 (2002) (affirming trial court's order dismissing action for lack of personal jurisdiction where plaintiff's evidence did not adequately rebut defendants' affidavits showing that they did not advertise or otherwise conduct business in North Carolina); see also Birtha v. Stonemor, N.C., LLC, ––– N.C.App. ––––, ––––, 727 S.E.2d 1, 6 (2012) (upholding trial court's determination that defendant corporation did not fall under long arm statute based on its uncontroverted affidavit).
Thus, we conclude that plaintiff failed to establish that defendant had sufficient continuous and systematic contacts with North Carolina to confer personal jurisdiction over him. As such, the trial court properly granted defendant's motion to dismiss.
B. Waiver of Personal Jurisdiction Defense
Plaintiff next argues that defendant waived his defense of lack of personal jurisdiction by serving discovery requests, requesting a statement of monetary relief sought, granting plaintiff an extension of time to respond to discovery, and seeking an extension of time to file a responsive pleading to the complaint. See Harris v. Pembaur, 84 N.C.App. 666, 669–70, 353 S.E.2d 673, 677 (1987) (A defendant waives the defense of lack of personal jurisdiction if he “submits to the jurisdiction of the court by formally entering a voluntary appearance, by seeking some affirmative relief at the hands of the court, or by utilizing the facilities of the court” before raising the defense.).
However, plaintiff did not raise the waiver argument in the trial court. “[I]ssues and theories of a case not raised below will not be considered on appeal.” N.C. Farm Bureau Mut. Ins. Co. v. Holt, 154 N.C.App. 156, 159, 574 S.E.2d 6, 9 (2002) (citation and quotation marks omitted). In Holt, we addressed this same issue and found that because the plaintiff had not raised the waiver argument during the hearing in the trial court, the argument would not be considered on appeal. Id.
Even if plaintiff had, in fact, raised this issue in the trial court, we would not reach a different result on this factual record. There is no indication in the record that defendant actually did engage in discovery or serve a request for a statement of monetary relief sought, and neither defendant's request for an extension of time to file an answer nor his submission of an offer of judgment, filed on the same day as his answer and motion to dismiss, constitute a general appearance. SeeN.C. R. Civ. P. 12(b) (“Obtaining an extension of time within which to answer or otherwise plead shall not constitute a waiver of any defense” under Rule 12(b).); Draughon v. Harnett Cty. Bd. of Educ., 166 N.C.App. 449, 452, 602 S.E.2d 717, 719 (2004) (“If a defendant makes a general appearance in conjunction with or after a responsive pleading challenging jurisdiction pursuant to Rule 12(b), his right to challenge personal jurisdiction is preserved.”).
II. Denial of Plaintiff's Motion to Continue
Finally, plaintiff contends that the trial court erred in denying plaintiff's request for additional time to conduct discovery before it ruled on defendant's motion to dismiss. Plaintiff asserts that the trial court's ruling resulted in a “manifest injustice” because it prevented him from acquiring the information necessary to show through discovery that defendant did, in fact, have sufficient minimum contacts with the State of North Carolina. We disagree.
A trial court's decision whether to grant a party's request for a continuance is “ ‘solely within the discretion of the trial judge and will be reversed only when there is a manifest abuse of discretion.’ “ Cox v. Roach, ––– N.C.App. ––––, ––––, 723 S.E.2d 340, 347 (2012) (quoting Young v. Fun Services–Carolina, Inc., 122 N.C.App. 157, 163, 468 S.E.2d 260, 264,disc. review denied,344 N.C. 444, 476 S.E.2d 134 (1996)). Here, defendant filed his answer and motion to dismiss on 22 February 2012 alleging that the trial court lacked personal jurisdiction over him. Plaintiff did not serve discovery requests bearing on the personal jurisdiction issue until 18 April 2012. Thus, plaintiff was put on notice of defendant's jurisdictional defense for almost two full months before undertaking discovery to challenge the validity of this defense. Indeed, he waited until the week before the hearing on the motion to dismiss before initiating discovery. For these reasons, we believe that the trial court acted well within its discretion by denying plaintiff's request for a continuance under these circumstances.
III. Claim against Zurich
Because Zurich is the UIM carrier, plaintiff's claim against it is purely derivative of his claim against defendant. See Spivey v.. Lowery, 116 N.C.App. 124, 126, 446 S.E.2d 835, 837 (1994) (“As a general rule, a UIM carrier's liability is derivative of the tortfeasor's liability.”). Accordingly, the trial court properly dismissed the claim against Zurich upon its dismissal of the claims against defendant. See Grimsley v. Nelson, 342 N.C. 542, 548, 467 S.E.2d 92, 96 (1996) (finding that when a cause of action was properly dismissed against the named defendant for lack of personal jurisdiction, the action should have also been dismissed against the UIM carrier as “nothing remained to be decided, and no liability [could] be imposed ...”).
Conclusion
For the reasons stated above, we affirm the trial court's order dismissing the complaint for lack of personal jurisdiction.
AFFIRMED. Judges HUNTER and McCULLOUGH concur.
Report per Rule 30(e).