Fireman's Fund Insurance v. Washington

308 S.E.2d 758, 65 N.C. App. 38, 1983 N.C. App. LEXIS 3414

• Court: Court of Appeals of North Carolina
• Decided: November 15, 1983
• Docket: No. 8210SC857
• Status: Published

Opinion

PHILLIPS, Judge.

Though the order appealed from is interlocutory, the matter is here properly, since G.S. l-277(b) gives “the right of immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of the defendant. . . .” In deciding the appeal, since the Washingtons reside in another state and the court is attempting to exercise in personam jurisdiction over them, we must first determine whether any North Carolina statute authorizes the exercise of such jurisdiction over them under the circumstances involved; and, if so, whether haling them into court here violates due process of law under the Constitution of the United States. Fiber Industries, Inc. v. Coronet Industries, Inc., 59 N.C. App. 677, 298 S.E. 2d 76 (1982). For a comprehensive discussion of the necessity for making these two determinations in cases like this, see Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E. 2d 629 (1977).

In this instance statutory authority adequate to the purpose certainly exists. G.S. l-75.4(l)(d) states:

§ 1-75.4. Personal jurisdiction, grounds for generally.

A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j) of the Rules of Civil Procedure under any of the following circumstances:

(1) Local Presence or Status. —In any action, whether the claim arises within or without this State, in which a claim is asserted against a party who when service of process is made upon such party:

d. Is engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise.

That this statute is far-reaching enough in this instance to embrace the Washingtons, who at this time are in our courts prosecuting a lawsuit, a very substantial activity, indeed, is self-evident. The statute has been interpreted to authorize jurisdiction to the fullest extent permitted under the due process clause of the United States Constitution. Mabry v. Fuller-Shuwayer Co., 50 N.C. App. 245, 273 S.E. 2d 509, disc. rev. denied, 302 N.C. 398, 279 S.E. 2d 352 (1981). Thus, only the due process determination remains.

In determining how far the statute can be applied constitutionally, we must look to the “minimum contacts” doctrine laid down by the Supreme Court of the United States. In International Shoe Co. v. Washington, 326 U.S. 310, 90 L.Ed. 95, 66 S.Ct. 154 (1945), it was ruled that in the absence of certain minimum contacts with the forum state that subjecting a non-resident defendant to in personam jurisdiction offended the due process concept of fair play and substantial justice. In McGee v. International Life Insurance Co., 355 U.S. 220, 2 L.Ed. 2d 223, 78 S.Ct. 199 (1957), where personal jurisdiction over a foreign insurance company was upheld on the basis of the single policy sued on, the Court in deciding the due process question apparently considered the plaintiffs status and activities — a forum state resident, who mailed the premiums from there — as well as those of the defendant. In a subsequent case, however, the Court made plain that the minimum contacts required are those brought about by the defendant non-resident, and that “it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253, 2 L.Ed. 2d 1283, 1298, 78 S.Ct. 1228, 1240 (1958). In applying these principles to this case, however, no rule of thumb exists to guide us. Thus, in the final analysis, whether the non-resident defendants have subjected themselves to the jurisdiction of our court depends not upon a formula of some kind, but upon what is fair and reasonable — and what is fair and reasonable, of course, depends upon the circumstances of their case. Farmer v. Ferris, 260 N.C. 619, 133 S.E. 2d 492 (1963). Under the circumstances recorded here we are of the opinion that certain of their activities in this state did subject the non-resident defendants to the jurisdiction of our courts and that exerting that jurisdiction is in keeping with due process of law concepts of fairness and reasonableness.

Though the contacts that the non-resident defendants have had with this state make a rather long list, some of them by themselves would have little or no effect on the determination of this appeal. That through no fault of their own, while traveling through our state, they had the misfortune to be injured or killed, thereby making it necessary to obtain medical and hospital care here, is no basis for subjecting them to in personam jurisdiction with respect to the coverage conditions of appellee’s insurance policy, as the appellee contends. Basing personal jurisdiction in a case like this upon such involuntary and imposed activities as that would, we think, clearly violate due process. But the voluntary, purposeful steps that the Washingtons took following the tragic accident changed the picture. By employing counsel here to investigate their rights and to take legal steps to enforce them; by the family head qualifying in our court as ancillary administrator for the estate of his deceased son and as guardian ad litem for the injured minor children; by all of them filing suit for their injuries and damages in our court and appointing another local lawyer as their process agent; and by cooperating with their lawyer here ever since in preparing their case for trial, they have purposefully availed themselves of the benefits and protection of our laws and cannot validly object to being haled into court here in connection therewith.

In contending that their activities in this state were insufficient to subject them to the court’s jurisdiction, the defendant appellants mainly rely on three cases in each of which it was held that the non-resident defendant had not subjected itself or himself to in personam jurisdiction in North Carolina by participating in certain litigation in this state. Neither of these cases, however, involved circumstances at all similar to those recorded here. In Munchak Corporation v. Riko Enterprises, Inc., 368 F. Supp. 1366 (M.D.N.C. 1973), the lawsuit that the non-resident defendant participated in was over and it participated not as a plaintiff voluntarily seeking legal relief in this state, but as a behind the scenes supporter of a defendant, who was in court here against his will. In Georgia Railroad Bank & Trust Co. v. Eways, 46 N.C. App. 466, 265 S.E. 2d 637 (1980), a suit to enforce a loan guaranty made in South Carolina, the lawsuit that the Pennsylvania defendant participated in as a plaintiff was also over and it involved a tract of land owned by defendant, which property had no relation at all to plaintiffs suit. Finally, Winder v. Penniman, 181 N.C. 7, 105 S.E. 884 (1921) stands only for the ancient, universally recognized, but irrelevant proposition that a non-resident who is in the state for the sole purpose of testifying as a party or witness in a lawsuit cannot be served with process while here.

In contrast, the Washingtons’ lawsuit here is still in progress and it relates directly to the subject matter of this case. If their suit is won collection cannot be accomplished until the coverage, defense and liability issues raised by the appellee in this case are resolved. Requiring those issues to be litigated here will not be unfair to the Washingtons, who could have anticipated as much when they sued appellee’s insured here under all theories available to them.

Affirmed.

Judges Hedrick and Wells concur.