HV Allen Co., Inc. v. Quip-Matic, Inc.

266 S.E.2d 768, 47 N.C. App. 40, 1980 N.C. App. LEXIS 2997
CourtCourt of Appeals of North Carolina
DecidedJune 3, 1980
Docket7918SC869
StatusPublished
Cited by8 cases

This text of 266 S.E.2d 768 (HV Allen Co., Inc. v. Quip-Matic, Inc.) 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
HV Allen Co., Inc. v. Quip-Matic, Inc., 266 S.E.2d 768, 47 N.C. App. 40, 1980 N.C. App. LEXIS 2997 (N.C. Ct. App. 1980).

Opinions

MARTIN (Harry C.), Judge.

It is unnecessary that we reach the interesting substantive question posed by plaintiff on this appeal: Is the defendant estopped to plead the Uniform Commercial Code statute of frauds, N.C.G.S. 25-2-201, in this construction bid case? We must address the jurisdictional issue raised on defendant’s cross-assignment of error first, and in so doing we find that the trial court erred in not granting defendant’s motion to dismiss for lack of in personam jurisdiction over it, a foreign corporation not doing business in North Carolina.

[43]*43Plaintiff contends that either N.C.G.S. 55-145(a) or N.C.G.S. l-75.4(l)d confers personal jurisdiction over defendant, an Illinois corporation. N.C.G.S. 55-145(a) provides as follows:

Every foreign corporation shall be subject to suit in this State, whether or not such foreign corporation is transacting or has transacted business in this State and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows:
(1) Out of any contract made in this State or to be performed in this State; or
(2) Out of any business solicited in this State by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the State; or
(3) Out of the production, manufacture, or distribution of goods by such corporation with the reasonable expectation that those goods are to be used or consumed in this State and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed, or sold or whether or not through the medium of independent contractors or dealers; or
(4) Out of tortious conduct in this State, whether arising out of repeated activity or single acts, and whether arising out of misfeasance or nonfeasance.

This section confers jurisdiction over a cause of action arising out of four specific and well-delineated activities. “If one of these four activities is present but the cause of action arises elsewhere, or if none of the four activities is present although others may be present, there is no jurisdictional grant.” Bowman v. Curt G. Joa, Inc., 361 F. 2d 706, 714 (4th Cir. 1966), on appeal from Western District of North Carolina. The only possible subsection which might apply in the instant case is subsection (1). Yet the record fails to show that a contract was ever [44]*44made in North Carolina between plaintiff and defendant. Plaintiff certainly alleged that a binding contract was entered into, but defendant vigorously denied any contract. It cannot be conclusively stated that a contract was made at all, and therefore this subsection is inapplicable.

With this ruling we turn to the question whether N.C.G.S. l-75.4(l)d is applicable.

N.C.G.S. l-75.4(l)d confers jurisdiction over defendant upon a court in North Carolina having subject matter jurisdiction as follows:

(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.

Our Supreme Court, although taking note of the phrase “substantial activity,” has held that N.C.G.S. l-75.4(l)d grants the courts of North Carolina the opportunity to exercise jurisdiction over a foreign corporation to the extent allowed by due process.

By the enactment of G.S. l-75.4(l)(d), it is apparent that the General Assembly intended to make available to North Carolina courts the full jurisdictional powers permissible under federal due process. See 1 McIntosh, North Carolina Practice and Procedure § 937.5 (Supp. 1970). Thus, we hold that G.S. 1-75.4 (l)(d) applies to defendant and, statutorily, grants the courts of North Carolina the opportunity to exercise jurisdiction over defendant to the extent allowed by due process.

[45]*45Dillion v. Funding Corp., 291 N.C. 674, 676, 231 S.E. 2d 629, 630-31 (1977). Therefore, the first step of the requisite “two-fold determination” has been met; the statutes of North Carolina permit courts of this jurisdiction to entertain this action against defendant. Id. But has the second step been met? Would due process of law be violated by permitting the courts of North Carolina to exercise their power over defendant? Id.

In International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102 (1945), the United States Supreme Court stated:

[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.”

Our Supreme Court, although noting the trend toward expansion of personal jurisdiction over nonresidents, has echoed the decision in International Shoe: “Unless a nonresident defendant has had ‘minimum contacts’ with the forum state, that state may not exercise jurisdiction over him.” Chadbourn, Inc. v. Katz, 285 N.C. 700, 705, 208 S.E. 2d 676, 679 (1974). Quoting from Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 1298 (1958), the Court went on to state that “[application of the ‘minimum contacts’ rule ‘will vary with the quality and nature of the defendant’s activity, but 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.’ ” 285 N.C. at 705, 208 S.E. 2d at 679. In a very recent decision of the Supreme Court of North Carolina, it was reiterated: “Absent such purposeful activity by defendant in the forum State, there can be no contact with the forum State sufficient to justify personal jurisdiction over defendant.” Buying Group, Inc. v. Coleman, 296 N.C. 510, 515, 251 S.E. 2d 610, 614 (1979).

[46]*46The determination of the existence of minimum contacts depends upon the particular facts of each case. Chadbourn, Inc. v. Katz, supra. The order of the trial court denying defendant’s motion to dismiss for lack of personal jurisdiction contained no findings of fact or conclusions of law. Absent request by a party the court had no duty to make such findings, Rule 52(a)(2), N.C.R. Civ. Proc., and the record reveals no such request. Although the presumption is that the court on proper evidence found facts to support its order, Leasing Corp. v. Equity Associates, 36 N.C. App. 713, 245 S.E. 2d 229 (1978), the record may clearly reveal that the court erroneously drew legal conclusions from these facts. We hold that based on the interrogatories and answers that are part of the record, defendant had insufficient minimum contacts to justify personal jurisdiction over it.

Defendant has neither offices nor property in North Carolina.

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HV Allen Co., Inc. v. Quip-Matic, Inc.
266 S.E.2d 768 (Court of Appeals of North Carolina, 1980)

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Bluebook (online)
266 S.E.2d 768, 47 N.C. App. 40, 1980 N.C. App. LEXIS 2997, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hv-allen-co-inc-v-quip-matic-inc-ncctapp-1980.