Cox v. Hozelock, Ltd.

411 S.E.2d 640, 105 N.C. App. 52, 1992 N.C. App. LEXIS 2
CourtCourt of Appeals of North Carolina
DecidedJanuary 7, 1992
Docket9121SC195
StatusPublished
Cited by10 cases

This text of 411 S.E.2d 640 (Cox v. Hozelock, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cox v. Hozelock, Ltd., 411 S.E.2d 640, 105 N.C. App. 52, 1992 N.C. App. LEXIS 2 (N.C. Ct. App. 1992).

Opinions

WALKER, Judge.

In order to establish personal jurisdiction over a foreign defendant a two part test must be satisfied. First, there must be a North Carolina statute which permits the exercise of personal jurisdiction over defendant. In the instant case the trial court properly exerted jurisdiction over defendant under G.S. l-75.4(4)b, and defendant conceded this point. The second part of the inquiry addresses whether the exercise of such personal jurisdiction over defendant is consistent with the well ingrained constitutional notions of due process and fairness. It is this question which we consider on appeal.

We begin by noting that the ability of our courts to exercise personal jurisdiction over a foreign defendant was articulated early on by the U. S. Supreme Court in International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 90 L.Ed. 95, 102 (1945), where the Court held:

[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”

More recently the Supreme Court’s decision in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 62 L.Ed.2d 490 (1980), [54]*54is instructive as to when jurisdiction may lawfully be asserted. In World-Wide, plaintiffs were New York residents who purchased an automobile from a retailer in New York. Following an accident involving the automobile in Oklahoma, plaintiffs initiated suit against the New York retailer and New York distributor in Oklahoma state court. The Supreme Court held, however, that such an exercise of personal jurisdiction over the New York defendants was incompatible with the Due Process Clause of the Fourteenth Amendment in light of the fact that the sole connection with the forum state of Oklahoma was that the accident had occurred there. Though it was arguably foreseeable a product sold elsewhere could reach the forum state, the World-Wide Court noted that “foreseeability alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause.” Id. at 295, 62 L.Ed.2d at 500. The Court clarified this statement, however, by noting:

This is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.

Id. at 297, 62 L.Ed.2d at 501. As to when defendant’s connection with the forum state would cross that threshold so that it would be consistent with the notions of due process and fairness to subject the defendant to the personal jurisdiction of the forum state, the Court stated:

[I]f the sale of a product of a manufacturer or distributor ... is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream .of commerce with the expectation that they will be purchased by consumers in the forum State.

Id. at 297-298, 62 L.Ed.2d at 501-502 (emphasis added).

This Court relied on the language of World-Wide in rendering our decision in Bush v. BASF Wyandotte Corp., 64 N.C.App. 41, [55]*55306 S.E.2d 562 (1983). In Bush, a North Carolina plaintiff was injured while operating a washing machine for her employer. The machine had been manufactured by a Swedish corporation which sold several such machines to a distributor in New York. The New York distributor then sold the washing machine to plaintiff’s employer. At no time did defendant corporation attempt to limit the area of distribution so as to exclude North Carolina. Upon an analysis of various state court and federal decisions, this Court held:

[I]n light of the fact that defendant-appellees purposefully injected their product into the stream of commerce without any indication that it desired to limit the area of distribution of its product so as to exclude North Carolina, we hold that the courts of North Carolina may lawfully assert personal jurisdiction over defendant-appellees.

Id. at 51, 306 S.E.2d at 568.

We explicitly reaffirmed Bush in the more recent decision of Warzynski v. Empire Comfort Systems, Inc., 102 N.C.App. 222, 401 S.E.2d 801 (1991). In that case, defendant was a Spanish corporation with its principal office in Spain. Defendant manufactured a gas heater which it then sold to an Illinois distributor and conferred upon that distributor the exclusive rights to distribution of its product in the United States. The Illinois distributor had a North Carolina company acting as distributor in North Carolina. The North Carolina distributor thereby sold the heater to a North Carolina retailer who then sold it to plaintiff. Plaintiffs sued after the heater allegedly started a fire in their home. This Court found that insofar as the defendant intentionally injected the product into the stream of commerce, Bush was the controlling authority and defendant had “subjected itself to the jurisdiction of the courts of this state.” Id. at 229, 401 S.E.2d at 805.

We are struck by the factual similarities between Bush, Warzynski, and the case before us. Without question, this defendant purposefully and intentionally placed the product in the stream of interstate commerce. The findings of fact by the trial judge indicated defendant regularly sold its Polyspray and replacement parts to Geiger and True Temper. Further, defendant was fully aware that Geiger was a wholesaler which bought goods from manufacturers such as defendant and resold those goods in the United States. At no time did defendant attempt to limit its area [56]*56of distribution so as to exclude North Carolina. These facts therefore indicate defendant knew or reasonably should have known that, due to its relationship with Geiger, its products would be used in states other than Pennsylvania. Otherwise, defendant corporation would not have sold such products to a distributor but to someone with whom the product would remain for use, or would have taken steps to limit the distribution area of the product. Instead, defendant sought to expand its operations so as to reap profits in the U. S. marketplace. As such, defendant availed itself of the laws of these various states.

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Cox v. Hozelock, Ltd.
411 S.E.2d 640 (Court of Appeals of North Carolina, 1992)

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Bluebook (online)
411 S.E.2d 640, 105 N.C. App. 52, 1992 N.C. App. LEXIS 2, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cox-v-hozelock-ltd-ncctapp-1992.