Peter Millar, LLC v. Shaw's Menswear

Opinions

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA19-1078

Filed: 1 December 2020

Durham County, No. 19 CVS 1958

PETER MILLAR, LLC, Plaintiff-Appellant,

v.

SHAW’S MENSWEAR, INC., d/b/a THE SHAW GROUP RETAIL CONSULTANTS, Third-Party Plaintiff-Defendant-Appellee,

v.

JC NAPLES, INC., G.C. OF WINTER PARK, INC., JCWP, LLC, and HOWARD CRAIG DELONGY, Third-Party Defendants-Appellants.

Appeal by plaintiff-appellant and third-party defendants-appellants from

order entered 6 August 2019 by Judge Orlando F. Hudson, Jr. in Durham County

Superior Court. Heard in the Court of Appeals 12 August 2020.

Williams Mullen, by Camden R. Webb and Lauren E. Fussell, for plaintiff- appellant.

Manning Fulton & Skinner P.A., by William S. Cherry, III and Jessica B. Vickers, for defendant-appellee.

Graebe Hanna & Sullivan, PLLC, by Christopher T. Graebe and J. William Graebe, for third-party defendants-appellants.

BERGER, Judge.

On August 6, 2019, the trial court entered an order denying Appellants JC

Naples, Inc.; G.C. of Winter Park, Inc.; JCWP, LLC; and Howard Craig Delongy’s

(collectively, “Delongy Stores”) motions to dismiss and granting Appellee Shaw’s

Opinion of the Court

Menswear, Inc.’s (“Shaw”) motion to stay. Appellant Peter Millar, LLC (“Millar”)

argues the trial court erred when it granted the motion to stay. Delongy Stores

argues the trial court erred when it (1) denied the motions to dismiss the third-party

complaint for improper venue and for lack of personal jurisdiction, and (2) did not

award attorneys’ fees pursuant to the contract between the parties. For the reasons

stated herein, we affirm the trial court’s order granting the motion to stay and

denying attorneys’ fees. We remand with instructions to enter an order dismissing

the third-party complaint for improper venue and lack of personal jurisdiction.

Factual and Procedural Background

Delongy Stores and Shaw are parties to various consignment agreements (the

“Consignment Agreements”). Shaw, a men’s clothing wholesaler in Georgia, agreed

to purchase inventory from manufacturing suppliers for Delongy Stores, a group of

men’s clothing retailers in Florida. Pursuant to the Consignment Agreements,

Delongy Stores “select[s] the inventory to be consigned” to them by submitting orders

to the manufacturing suppliers using forms provided by Shaw. Shaw is “responsible

for approving the amount of inventory requested by and to be consigned” to Delongy

Stores. Then, Shaw will “deliver or cause to be delivered” the selected inventory to

Delongy Stores. Shaw retains ownership of the inventory while it is in the possession

of Delongy Stores. As Delongy Stores sells its consigned inventory, the sale proceeds

are deposited in an account owned by Shaw. Shaw uses the proceeds to reimburse

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the manufacturing suppliers, take a commission, and pay the balance to Delongy

Stores.

Millar, a North Carolina men’s clothing manufacturer, provides inventory to

Shaw, some of which was consigned in Delongy Stores. According to Millar’s verified

complaint, “[a]s part of Shaw’s services, . . . on behalf of Delongy Stores,” Shaw was

required to “pay[] [Millar] for merchandise that [was] shipped to [Delongy Stores].”

As of February 6, 2019, Shaw owed Millar $448,050.66 for inventory shipped to

Delongy Stores.

On February 8, 2019, Shaw filed suit against Delongy Stores in Georgia

Superior Court for default and breach of the Consignment Agreements. Shaw did not

name Millar as a party in the Georgia action. Delongy Stores removed the Georgia

action to the United States District Court for the Middle District of Georgia.

However, that court remanded the action back to Georgia Superior Court because the

forum selection clause in the Consignment Agreements “requires the suit to take

place in [the proper Georgia Superior court.]”

On February 6, 2019, Millar filed suit against Shaw in Durham County (North

Carolina) Superior Court for the past due account. Shaw filed an answer, and also

filed a third-party complaint against Delongy Stores. Delongy Stores subsequently

filed a motion to dismiss the third-party complaint for improper venue and for lack of

personal jurisdiction. Shaw filed a motion to stay the North Carolina action.

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On August 6, 2019, the trial court entered an order denying Delongy Stores’

motions to dismiss and granting Shaw’s motion to stay. Millar argues the trial court

erred when it granted Shaw’s motion to stay. Delongy Stores argues the trial court

erred when it (1) denied the motions to dismiss the third-party complaint for improper

venue and for lack of personal jurisdiction, and (2) did not award attorneys’ fees

pursuant to the Consignment Agreements. We address each issue below.

Analysis

I. Interlocutory Appeals

“As a general rule, there is no right of appeal from an interlocutory order.”

Edwards v. Foley, 253 N.C. App. 410, 411, 800 S.E.2d 755, 756 (2017).

However, when “a motion for a stay . . . is granted, any nonmoving party shall

have the right of immediate appeal.” N.C. Gen. Stat. § 1-75.12(c) (2019). Thus,

Millar’s appeal is properly before this Court.

In addition, Delongy Stores’ appeal of its motion to dismiss the third-party

complaint for lack of personal jurisdiction is properly before this Court. “Any

interested party shall have the right of immediate appeal from an adverse ruling as

to the jurisdiction of the court over the person or property of the defendant[.]” N.C.

Gen. Stat. § 1-277(b) (2019).

Further, Delongy Stores’ appeal of its motion to dismiss the third-party

complaint for improper venue is properly before us. This Court has previously stated,

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“an appeal from a motion to dismiss for improper venue based upon a jurisdiction or

venue selection clause dispute deprives the appellant of a substantial right that

would be lost.” Mark Grp. Int’l, Inc. v. Still, 151 N.C. App. 565, 566, 566 S.E.2d 160,

161 n.1 (2002). See Hill v. StubHub, Inc., 219 N.C. App. 227, 232, 727 S.E.2d 550,

554 (2012) (“immediate appellate review of an interlocutory order is available . . .

when the interlocutory order affects a substantial right under N.C. Gen. Stat. § 1-

277(a)[.]”).

However, an “order granting attorney’s fees is interlocutory as it does not

finally determine the action nor affect a substantial right which might be lost,

prejudiced or be less than adequately protected by exception to entry of the

interlocutory order.” Benfield v. Benfield, 89 N.C. App. 415, 419, 366 S.E.2d 500, 503

(1988) (citation and quotation marks omitted). Here, the trial court’s decision to not

award attorneys’ fees is interlocutory and is “best left until the underlying action has

been resolved[.]” Andaloro v. Sawyer, 144 N.C. App. 611, 614, 551 S.E.2d 128, 131

(2001). Therefore, we dismiss this issue as interlocutory.

II. Motion to Stay

“We review a trial court’s grant of a motion to stay for an abuse of discretion.”

Bryant & Assocs., LLC v. ARC Fin. Servs., LLC, 238 N.C. App. 1, 4, 767 S.E.2d 87, 90

(2014) (citation omitted). This Court

[does] not re-weigh the evidence before the trial court or endeavor to make our own determination of whether a stay

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should have been granted. Instead, mindful not to substitute our judgment in place of the trial court’s, we consider only whether the trial court’s [grant] was a patently arbitrary decision, manifestly unsupported by reason.

Id. at 4, 767 S.E.2d at 90 (citation omitted). “[A]ppellate review is limited to insuring

that the decision could, in light of the factual context in which it was made, be the

product of reason.” Home Indem. Co. v. Hoechst Celanese Corp., 128 N.C. App. 113,

118, 493 S.E.2d 806, 809 (1997) (citation omitted).

If, in any action pending in any court of this State, the judge shall find that it would work substantial injustice for the action to be tried in a court of this State, the judge on motion of any party may enter an order to stay further proceedings in the action in this State.

N.C. Gen. Stat. § 1-75.12(a) (2019). Traditionally, our Courts have considered the

following factors to determine whether a substantial injustice would result if the trial

court denied the stay:

(1) the nature of the case, (2) the convenience of the witnesses, (3) the availability of compulsory process to produce witnesses, (4) the relative ease of access to sources of proof, (5) the applicable law, (6) the burden of litigating matters not of local concern, (7) the desirability of litigating matters of local concern in local courts, (8) convenience and access to another forum, (9) choice of forum by plaintiff, and (10) all other practical considerations.

Lawyers Mut. Liab. Ins. Co. v. Nexsen, Pruet, Jacobs & Pollard, 112 N.C. App. 353,

356, 435 S.E.2d 571, 573 (1993) (citation omitted).

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“A court will not have abused its discretion in failing to consider each

enumerated factor.” Id. at 357, 435 S.E.2d at 574.

Further, in determining whether to grant a stay, it is not necessary that the trial court find that all factors positively support a stay, as long as it is able to conclude that (1) a substantial injustice would result if the trial court denied the stay, (2) the stay is warranted by those factors present, and (3) the alternative forum is convenient, reasonable, and fair.

Wachovia Bank v. Harbinger Capital Partners Master Fund I, Ltd., 201 N.C. App.

507, 520, 687 S.E.2d 487, 495 (2009) (citation omitted).

Millar argues that the trial court did not make a finding of fact that Shaw

would suffer a substantial injustice if the trial court denied the stay. However, the

trial court is not required to make written findings of fact and conclusions of law,

rather, these are necessary on motions only when requested by a party. See N.C.

Gen. Stat. § 1A-1, Rule 52(a)(2) (2019). Here, Millar made no specific request for

findings of fact or conclusions of law, therefore, the trial court was not required to

find facts. See Allen v. Trust Co., 35 N.C. App. 267, 269, 241 S.E.2d 123, 125 (1978)

(holding that “absent a request for findings of fact to support his decision on a motion,

the judge is not required to find facts . . . and it is presumed that the [j]udge, upon

proper evidence, found facts to support this judgment.” (citation omitted)).

Here, there was sufficient evidence to support the trial court’s order granting

the motion to stay because the potential for inconsistent judgments from

simultaneous proceedings in two different states addressing the same issue could

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result in a substantial injustice. See Wachovia Bank, 201 N.C. App. at 520-21, 687

S.E.2d at 495-96. In the Georgia action, Shaw alleges that Delongy Stores breached

the Consignment Agreements in several respects, some of which may directly impact

this action. In addition, “the stay is warranted by [the Lawyers Mutual] factors[,]”

including: the nature of the case, the convenience of the witnesses, the availability of

compulsory process to produce witnesses, and the relative ease of access to sources of

proof. Id. at 521, 687 S.E.2d at 496.

Accordingly, the trial court did not totally abandon consideration of the

Lawyers Mutual factors and was able to conclude that a substantial injustice would

result if it denied the stay. See Wachovia Bank, 201 N.C. App. at 521, 687 S.E.2d at

496. Because the trial court did not make “a patently arbitrary decision, manifestly

unsupported by reason,” the trial court did not abuse its discretion when it granted

the motion to stay. Bryant & Assocs., LLC, 238 N.C. App. at 4, 767 S.E.2d at 90

(citation omitted). Accordingly, we affirm the trial court’s order granting the motion

to stay.

III. Motions to Dismiss

Delongy Stores argues that the trial court erred when it denied the motions to

dismiss the third-party complaint for improper venue and for lack of personal

jurisdiction. We agree.

A. Improper Venue

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“A trial court’s interpretation of a forum selection clause is an issue of law that

is reviewed de novo.” US Chem. Storage, LLC v. Berto Constr., Inc., 253 N.C. App.

378, 382, 800 S.E.2d 716, 720 (2017) (citation omitted). “Under a de novo review, the

court considers the matter anew and freely substitutes its own judgment for that of

the lower tribunal.” Sony Ericsson Mobile Communications USA, Inc. v. Agere

Systems, Inc., 195 N.C. App. 577, 579, 672 S.E.2d 763, 765 (2009) (citation and

quotation marks omitted).

In general, a court interprets a contract according to the intent of the parties to the contract. Further, the Supreme Court of North Carolina has held that where parties to a contract have agreed that a given jurisdiction’s substantive law shall govern the interpretation of the contract, such a contractual provision will be given effect.

Szymczyk v. Signs Now Corp., 168 N.C. App. 182, 186, 606 S.E.2d 728, 732 (2005)

(citations and quotation marks omitted). Specifically, when a contract contains a

mandatory forum selection clause, it “vest[s] exclusive jurisdiction” in a particular

state or court. US Chem. Storage, 253 N.C. App. at 383, 800 S.E.2d at 720; see also

S&S Family Bus. Corp. v. Clean Juice Franchising, LLC, No. COA19-264, 2020 WL

549627, *3 (N.C. Ct. App. Feb. 4, 2020) (unpublished) (“A mandatory forum selection

clause vests exclusive jurisdiction in a particular state or court.”).

Delongy Stores and Shaw stipulated that the forum selection clause at issue

here is mandatory. In fact, the forum selection clause explicitly states that the

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Consignment Agreements are subject to “the laws of the State of Georgia.” Thus, we

apply Georgia law to determine whether the forum selection clause is valid.

Georgia courts have adopted the United States Supreme Court’s ruling in The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 SC 1907, 32 LE2d 513 (1972), that forum selection clauses are prima facie valid and should be enforced unless the opposing party shows that enforcement would be unreasonable under the circumstances.

Equity Tr. Co. v. Jones, 339 Ga. App. 11, 11, 792 S.E.2d 458, 459 (2016) (citation and

quotation marks omitted).

To invalidate a mandatory forum selection clause under Georgia law,

the opposing party must show that trial in the chosen forum will be so inconvenient that he will, for all practical purposes, be deprived of his day in court. A freely negotiated agreement should be upheld absent a compelling reason such as fraud, undue influence, or overweening bargaining power.

OFC Capital v. Colonial Distrib.’s, 285 Ga. App. 815, 817, 648 S.E.2d 140, 142 (2007)

(emphasis added) (citation and quotation marks omitted).

Shaw contends that enforcement of the forum selection clause may increase

the risk of inconsistent outcomes. However, Shaw has not demonstrated that trial in

Georgia would be “so inconvenient” that it will “be deprived of its day in court.” Id.

at 817, 648 S.E.2d at 142 (citation and quotation marks omitted). In fact, Shaw is

having its day in court as evidenced by the lawsuit that it filed against Delongy Stores

in Georgia. Moreover, Shaw has failed to allege or demonstrate a compelling reason

that the forum selection clause, which establishes venue in Shaw’s home state, was

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the result of “fraud, undue influence, or overweening bargaining power.” Id. at 817,

648 S.E.2d at 142 (citation and quotation marks omitted). We note that not only did

Shaw draft the forum selection clause, but has also relied on its enforceability in the

pending Georgia case. Specifically, Shaw previously stated that the “contractual

forum selection clause is enforceable and is mandatory and that any dispute between

Shaw and the Delongy [Stores] arising out of the Consignment Agreement must be

litigated in the Putnam County, Georgia Superior Court.” (emphasis added).

Based on the record, Shaw has failed to demonstrate that the forum selection

clause is unenforceable. Thus, the trial court erred when it failed to enforce the

mandatory forum selection clause and granted Delongy Stores’ motion to dismiss for

improper venue. Id. at 817, 648 S.E.2d at 142. We remand with instructions to enter

an order dismissing Shaw’s third-party complaint for improper venue.

B. Lack of Personal Jurisdiction

“When this Court reviews a decision as to personal jurisdiction, it considers

only whether the findings of fact by the trial court are supported by competent

evidence in the record; if so, this Court must affirm the order of the trial court.” Banc

of Am. Secs. LLC v. Evergreen Int’l Aviation, Inc., 169 N.C. App. 690, 694, 611 S.E.2d

179, 183 (2005) (citation and quotation marks omitted). “Competent evidence is

evidence that a reasonable mind might accept as adequate to support the finding.”

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City of Asheville v. Aly, 233 N.C. App. 620, 625, 757 S.E.2d 494, 499 (2014) (citation

omitted).

When a defendant challenges personal jurisdiction pursuant to Rule 12(b)(2),

a trial court may hold an evidentiary hearing including oral testimony or depositions or may decide the matter based on affidavits. . . . Of course, this procedure does not alleviate the plaintiff’s ultimate burden of proving personal jurisdiction at an evidentiary hearing or at trial by a preponderance of the evidence.

Bruggeman v. Meditrust Acquisition Co., 138 N.C. App. 612, 615, 532 S.E.2d 215, 217

(2000) (citations omitted). When “the trial court chooses to decide the motion based

on affidavits, the trial judge must determine the weight and sufficiency of the

evidence presented in the affidavits much as a juror.” Banc of Am. Secs., 169 N.C.

App. at 694, 611 S.E.2d at 183 (purgandum). It is not for this Court to “reweigh the

evidence presented to the trial court.” Don’t Do It Empire, LLC v. Tenntex, 246 N.C.

App. 46, 57, 782 S.E.2d 903, 910 (2016) (citation and quotation marks omitted).

When reviewing the issue of personal jurisdiction on appeal, this Court

“employs a two-step analysis.” Skinner v. Preferred Credit, 361 N.C. 114, 119, 638

S.E.2d 203, 208 (2006). “First, jurisdiction over the action must be authorized by

N.C.G.S. § 1-75.4, our state’s long-arm statute.” Id. at 119, 638 S.E.2d at 208 (citation

omitted). “Second, if the long-arm statute permits consideration of the action,

exercise of jurisdiction must not violate the Due Process Clause of the Fourteenth

Amendment to the U.S. Constitution.” Id. at 119, 638 S.E.2d at 208.

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“[N.C. Gen. Stat. §] 1-75.4 is commonly referred to as the ‘long-arm’ statute.”

Dillon v. Numismatic Funding Corp., 291 N.C. 674, 676, 231 S.E.2d 629, 630 (1977).

Specifically, a North Carolina court has personal jurisdiction “[i]n any action which

. . . [r]elates to goods, documents of title, or other things of value shipped from this

State by the plaintiff to the defendant on his order or direction[.]” N.C. Gen. Stat. §

1-75.4(5)(d) (2019). “Essentially, this section of the long-arm statute reaches

defendants who engage in commercial transactions with residents of this state.”

Skinner, 361 N.C. at 120, 638 S.E.2d at 209 (citing Johnston Cnty. v. R.N. Rouse &

Co. Inc., 331 N.C. 88, 95, 414 S.E.2d 30, 35 (1992) (describing N.C. Gen. Stat. § 1-

75.4(5) as “authoriz[ing] the courts of North Carolina to exercise jurisdiction over a

nonresident contracting within the state or contracting to perform services within the

state”)). As the third-party plaintiff, Shaw “has the burden of establishing prima

facie evidence that one of the statutory grounds [for personal jurisdiction] applies.”

Chapman v. Janko, U.S.A. Inc., 120 N.C. App. 371, 374, 462 S.E.2d 534, 536 (1995)

(citation omitted); see also Miller v. Szilagyi, 221 N.C. App. 79, 84-85, 726 S.E.2d 873,

878-79 (2012) (“[T]he plaintiff bears the burden of proving, by a preponderance of the

evidence, grounds for exercising personal jurisdiction over a defendant.” (citation

omitted)).

Here, Millar did not act “at the order or direction” of Delongy Stores, but rather

at the “order or direction” of Shaw. Pursuant to the Consignment Agreements,

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Delongy Stores “select[s] the inventory to be consigned to them” and Shaw is then

“responsible for approving the amount of inventory requested[.]” Once approved,

Shaw then “deliver[s] or cause[s] to be delivered” the selected inventory to Delongy

Stores. Further, there was evidence before the trial court that “since about 2012 . . .

[Millar] has always sent its invoices and its account statements directly to Shaw, and

Shaw has always paid those invoices and account statements for merchandise that

was shipped to [Delongy Stores].” The only goods “shipped from [North Carolina]”

were those items that Shaw contracted for and purchased from Millar, which Delongy

Stores previously requested from Shaw. Moreover, all of Delongy Stores’ orders and

directions to Shaw occurred in either Florida or Georgia, not North Carolina. See

Skinner, 361 N.C. at 120, 638 S.E.2d at 209 (finding N.C. Gen. Stat. § 1-75.4(5)(d) did

not confer personal jurisdiction over a nonresident defendant because “[t]here [was]

no direct contact between plaintiffs and the [nonresident defendant].”).

Although Shaw argues Delongy Stores ordered directly from Millar, there is no

competent evidence in the record to suggest that there was direct contact between

Millar and Delongy Stores. Rather, the only evidence in the record alleging direct

orders between Delongy Stores and Millar are conclusory statements in Shaw’s

answer and interrogatories. These general statements, without more, do not

demonstrate direct orders between Delongy Stores and Millar. Thus, Shaw, as the

third-party plaintiff, has failed “to establish itself within some ground for the exercise

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of personal jurisdiction” over Delongy Stores. Parker v. Pfeffer, ___ N.C. App. ___,

___, ___ S.E.2d ___, ___ (2020). Therefore, the trial court’s finding that N.C. Gen.

Stat. § 1-75.4(5)(d) applies here is not supported by competent evidence.

While the dissent asserts that Delongy Stores and Millar “dealt with each other

directly with relation to goods shipped from this State” and that this ought to be

“sufficient to maintain personal jurisdiction” under our long-arm statute, this

reasoning ignores the second operative portion of N.C. Gen. Stat. § 1-75.4(5)(d). In

fact, N.C. Gen. Stat. § 1-75.4(5)(d) requires both that the action relate to goods

shipped from our State and also that those goods were shipped to the defendant on

the defendant’s order or direction. The General Assembly could have applied this

long-arm provision to all transactions involving goods shipped from this State, but

instead chose narrower language. Accordingly, we must apply that plain language

and, here, there simply is no evidence to satisfy the second prong of N.C. Gen. Stat. §

1-75.4(5)(d).

Here, Shaw served as a consignment intermediary between Millar and Delongy

Stores, and there is insufficient evidence of direct contact or of a contractual

agreement between Millar and Delongy Stores to confer jurisdiction under N.C. Gen.

Stat. § 1-75.4(5)(d). Even assuming Shaw “caused [Millar] to deliver[]” the selected

inventory shipments directly to Delongy Stores, this is insufficient for purposes of

N.C. Gen. Stat. § 1-75.4(5)(d) because Delongy Stores did not directly order from

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Millar. See Robbins v. Ingham, 179 N.C. App. 764, 769, 635 S.E.2d 610, 614-15 (2006)

(refusing to impute the affirmative actions of an intermediary to a third-party

defendant for purposes of establishing personal jurisdiction under N.C. Gen. Stat. §

1-75.4(5)(d)). Therefore, “[b]ecause [Shaw] has failed to meet [its] burden of proving

a statutory basis for personal jurisdiction, we need not conduct a due process inquiry

because any further inquiry will be fruitless.” Parker, ___ N.C. App. at ___, ___ S.E.2d

at ___; see also Skinner, 361 N.C. at 120, 638 S.E.2d at 209 (ending its personal

jurisdiction analysis after concluding that “[a]lthough [N.C. Gen. Stat. § 1-

75.4(5)(d)’s] grant of jurisdiction is far-reaching, the transactions in this case do not

fall within its grasp.”).

Thus, we remand with instructions to enter an order dismissing the third-party

complaint for lack of personal jurisdiction.

Conclusion

For the foregoing reasons, we dismiss Delongy Stores’ appeal on the issue of

attorneys’ fees as interlocutory. We affirm the trial court’s order granting the motion

to stay, and remand with instructions to enter an order dismissing Shaw’s complaint

for improper venue and lack of personal jurisdiction.

DISMISSED IN PART; AFFIRMED IN PART; AND REMANDED IN PART.

Judge DIETZ concurs.

Judge ARROWOOD concurs in part, dissents in part.

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No. COA19-1078 – Peter Millar, LLC v. Shaw’s Menswear Inc.

ARROWOOD, Judge, concurs in part and dissents in part.

I concur in the portion of the majority opinion that affirms the trial court’s

order granting the motion to stay. I further agree that the forum selection clause

under the contract is valid, however, I would vacate the order denying dismissal with

respect to that issue and remand this matter to the trial court to enter an order

making appropriate findings of fact with respect to the issue of whether there are

appropriate reasons under Georgia law as constrained by United States Supreme

Court precedent for North Carolina to refuse to honor that provision of the contract.

I respectfully dissent from the portion of the majority opinion holding the trial court

lacked personal jurisdiction over the third-party defendants.

I. Venue

Although the cases which address contract forum selection clauses normally

deal with both jurisdiction and venue and the two issues are sometimes “blurred,” the

two inquiries are different. ITS Leasing, Inc. v. RAM DOG Enterprises, LLC, 206

N.C. App. 572, 578, 696 S.E.2d 880, 884 (2010) (citing Perkins v. CCH Computax, Inc.,

333 N.C. 140, 144, 423 S.E.2d 780, 783 (1992)). Generally, “courts no longer view

forum selection clauses as ousting the courts of their jurisdiction[,]” but instead “allow

a court to refuse to exercise that jurisdiction in recognition of the parties’ choice of a

different forum.” Perkins v. CCH Computax, Inc., 333 N.C. 140, 143, 423 S.E.2d 780,

782 (1992).

Justice Arrowood, concurring in part

In this case, the Consignment Agreements between Delongy and Shaw include

the following forum selection clause, in relevant part:

This Agreement will be governed by and construed in accordance with the laws of the State of Georgia. The parties agree that the situs and venue of any suit commenced under this contract shall be Putnam County, Georgia. The parties further agree that any negotiations on transactions affecting this contract and the entry into this contract shall be deemed to have taken place in Putnam County, Eatonton, Georgia. [Delongy Stores] hereby consents to the personal jurisdiction of the courts of Putnam County, Georgia, and agrees to acknowledge service of any suit filed against [Delongy Stores] by [Shaw] in Putnam County, Georgia.

As the clause makes apparent, although the venue “shall be” designated in Georgia,

the matter of jurisdiction is separate.

Defendant concedes that the forum selection clause is enforceable, however,

they argue that they can avoid its enforcement by showing that it is “unfair or

unreasonable.” See Perkins, 333 N.C. at 146, 423 S.E.2d at 784 (citing M/S Bremen

v. Zapata Off-Shore Co., 407 U.S. 1, 32 L. Ed. 2d 513 (1972)).

I believe that the trial court needs to make findings of fact and conclusions of

law with respect to this enforceability under the standard for enforceability set forth

by the United States Supreme Court in Bremen in order for us to appropriately review

the same. I do not believe that we, as a matter of law, can make the determination

reached by the majority that the forum selection clause is enforceable without

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findings from the trial court under the test established by Bremen as to whether it

would be unfair or unreasonable to enforce based upon the facts of this case.

Therefore, I would hold that the trial court erred in failing to make appropriate

findings of fact and conclusions of law with respect to why the forum selection clause

should not be enforced. I would vacate that portion of the order and remand this

issue to the trial court to make the appropriate finding and conclusion.

II. Personal Jurisdiction

The majority concludes that the forum selection clause is mandatory and vests

exclusive jurisdiction in Georgia, in addition to asserting that there was not

competent evidence to establish grounds for the exercise of personal jurisdiction

under the long-arm statute. I respectfully disagree with the majority’s statutory

analysis and application of our caselaw.

As previously noted, the issues of venue and jurisdiction require separate

analyses in the context of forum selection clauses. The general rule is when a

jurisdiction is specified in a provision of contract, the provision generally will not be

enforced as a mandatory selection clause with respect to jurisdiction without some

further language that indicates the parties’ intent to make jurisdiction exclusive.

Printing Servs. of Greensboro, Inc. v. Am. Capital Grp., Inc., 180 N.C. App. 70, 74,

637 S.E.2d 230, 232 (2006), aff’d, 361 N.C. 347, 643 S.E.2d 586 (2007). Indeed,

mandatory forum selection clauses recognized by our appellate courts have contained

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words such as “exclusive” or “sole” or “only” which indicate that the contracting

parties intended to make jurisdiction exclusive. Id. This Court has not interpreted

the phrase “shall be” as sufficient to create a mandatory forum selection clause. R.H.

Donnelley Inc. v. Embarq Corp., 228 N.C. App. 568, 749 S.E.2d. 112, 2013 WL

4005261, *3 (2013) (unpublished) (citing Mark Grp. Int’l, Inc. v. Still, 151 N.C. App.

565, 568, 566 S.E.2d 160, 162 (2002); Cable Tel Servs., Inc. v. Overland Contr’g, Inc.,

154 N.C. App. 639, 645, 574 S.E.2d 31, 35 (2002)).

In this case, the forum selection clause states that the “situs and venue of any

suit commenced under this contract shall be Putnam County, Georgia[,]” and goes on

to acknowledge that Delongy Stores “consents to the personal jurisdiction of the

courts of Putnam County, Georgia[.]” While this certainly allows Georgia courts to

exercise jurisdiction over Delongy Stores, it does not include language that indicates

that the parties intended to make jurisdiction exclusive, nor does it preclude the

exercise of jurisdiction in North Carolina.

In examining whether a non-resident defendant is subject to personal

jurisdiction in our courts, we engage in a two-step analysis. Beem USA Ltd.-Liab.

Ltd. P’ship v. Grax Consulting LLC, 373 N.C. 297, 302, 838 S.E.2d 158, 161 (2020)

(citing Skinner v. Preferred Credit, 361 N.C. 114, 119, 638 S.E.2d 203, 208 (2006)).

First, jurisdiction over the defendant must be authorized by N.C. Gen. Stat. § 1-75.4—

North Carolina’s long-arm statute. Id. Second, “if the long-arm statute permits

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consideration of the action, exercise of jurisdiction must not violate the Due Process

Clause of the Fourteenth Amendment to the U.S. Constitution.” Id. (quotation marks

omitted).

A. The Long-Arm Statute

This Court has held that “[w]hile choice of law clauses are not determinative

of personal jurisdiction, they express the intention of the parties and are a factor in

determining whether minimum contacts exist and due process was met.” Banc of

Am. Secs. LLC v. Evergreen Int’l Aviation, Inc., 169 N.C. App. 690, 700, 611 S.E.2d

179, 186 (2005) (internal quotation marks and citation omitted). Thus, while we must

consider this clause in our due process analysis, it does not, standing alone, operate

to defeat personal jurisdiction over third-party defendants. R.H. Donnelley Inc., 2013

WL 4005261 at *3 (citing Banc of Am. Secs. LLC, 169 N.C. App. at 700, 611 S.E.2d at

186).

In this case, I would hold that there is statutory authority under N.C. Gen.

Stat. § 1-75.4(5)(d). A North Carolina court has personal jurisdiction “[i]n any action

which . . . [r]elates to goods, documents of title, or other things of value shipped from

this State by the plaintiff to the defendant on his order or direction.” N.C. Gen. Stat.

§ 1-75.4(5)(d) (2019). “Essentially, this section of the long-arm statute reaches

defendants who engage in commercial transactions with residents of this [S]tate.”

Skinner, 361 N.C. at 120, 638 S.E.2d at 209.

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North Carolina’s long-arm statute

is liberally construed to find personal jurisdiction over nonresident defendants to the full extent allowed by due process. Accordingly, when evaluating the existence of personal jurisdiction pursuant to [this statute], the question of statutory authorization collapses into the question of whether [the defendant] has the minimum contacts with North Carolina necessary to meet the requirements of due process.

Lulla v. Effective Minds, LLC, 184 N.C. App. 274, 277, 646 S.E.2d 129, 132 (2007)

(citation omitted).

Although the majority seeks to engage in a plain language analysis of the long-

arm statute, I would adhere to the liberal construction of the long-arm statute in

accordance with our precedent. I am concerned by the potential implications of the

majority’s holding. By narrowly interpreting the long-arm statute, the majority

opinion effectively creates a loophole to allow individuals and corporations to shield

themselves from the exercise of personal jurisdiction in North Carolina by conducting

business through an intermediary. Although I do not seek to apply the long-arm

statute to all transactions involving goods shipped from this State, as the majority

suggests, I believe the facts of this case, specifically the intertwined nature of the

business relationships and the knowledge of Delongy Stores that it was ordering

goods from a North Carolina vendor, require a holding that the third-party

defendants are subject to the jurisdiction of North Carolina courts. While the facts

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in this case are unique in that the North Carolina entity that sold and shipped the

goods is not seeking to invoke jurisdiction against the ultimate recipient of those

goods, because they are suing a third-party to recover for those goods, I believe that

this provision of the long-arm statute is met and that jurisdiction lies against the

third-party defendants to the extent that it is not violative of due process.

I further dissent from the majority’s holding that there was insufficient

evidence to support the trial court’s order denying the motion to dismiss. Under N.C.

Gen. Stat. § 1A-1, Rule 52(a)(2), the trial judge need not make findings of fact and

conclusions of law when making a decision on a motion unless they are requested by

a party or required by Rule 41(b) which is not applicable here. Fungaroli v.

Fungaroli, 51 N.C. App. 363, 367, 276 S.E.2d 521, 524 (1981). When the record

contains no findings of fact, “ ‘[i]t is presumed . . . that the court on proper evidence

found facts to support its judgment.’ ” Id. (quoting Sherwood v. Sherwood, 29 N.C.

App. 112, 113-14, 223 S.E.2d 509, 510-11 (1976)). On review, this Court is “not free

to revisit questions of credibility or weight that have already been decided by the trial

court.” Banc of Am. Secs. LLC, 169 N.C. App. at 695, 611 S.E.2d at 183.

In this case, as in Fungaroli and Banc of America Securities LLC, the record

contains no indication that the parties requested that the trial judge make specific

findings of fact, nor did the order contain any findings of fact. Accordingly, we must

presume that the trial judge made factual findings sufficient to support ruling in

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favor of Shaw. It is this Court’s task to review the record to determine whether there

is any evidence to support the trial court’s conclusion that North Carolina courts may

exercise jurisdiction over Delongy Stores without violating Delongy Stores’ due

process rights.

The record reflects that the third-party defendants Delongy Stores ordered

merchandise directly from plaintiff, Millar, who then shipped the merchandise from

North Carolina. The majority’s observation that defendant Shaw’s received “invoices

and account statements for every bit of merchandise that was shipped,” ignores the

fact that Delongy Stores and Millar dealt with each other directly with relation to

goods shipped from this State. Although defendant Shaw was primarily involved in

the overall business arrangement, the alleged “over-orders” by Delongy Stores and

the direct transactions between Delongy Stores and Millar are in my opinion

sufficient to maintain personal jurisdiction over Delongy Stores in this matter. The

existence of Shaw as an intermediary does not change the fact that Delongy Stores

has availed themselves of the privilege of purchasing and receiving goods from this

State.

B. Due Process

The second step under N.C. Gen. Stat. § 1-75.4 is whether the exercise of

personal jurisdiction by North Carolina courts violates due process of law. “By the

enactment of [N.C. Gen. Stat. §] 1-75.4(1)(d), it is apparent that the General Assembly

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intended to make available to the North Carolina courts the full jurisdictional powers

permissible under federal due process.” Dillon v. Funding Corp., 291 N.C. 674, 676,

231 S.E.2d 629, 630 (1977).

To satisfy the requirements of the due process clause, there must exist “certain

minimum contacts [between the non-resident defendant and the forum] such that the

maintenance of the suit does not offend ‘traditional notions of fair play and

substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L.

Ed. 95, 102 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 283

(1940)). In each case, there must be some act by which the defendant purposefully

avails themselves of the privilege of conducting activities within the forum state, thus

invoking the benefits and protections of its laws; the unilateral activity within the

forum state of others who claim some relationship with a non-resident defendant will

not suffice. Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 1298 (1958). This

relationship between the defendant and the forum must be “such that [they] should

reasonably anticipate being haled into court there.” Tom Togs, Inc. v. Ben Elias

Indus. Corp., 318 N.C. 361, 365-66, 348 S.E.2d 782, 786 (1986) (internal quotation

marks and citation omitted). Following the mandate of the United States Supreme

Court, our courts have rejected any per se rule of long-arm jurisdiction. Buying Group

v. Coleman, 296 N.C. 510, 251 S.E.2d 610 (1979).

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Although a contractual relationship between a North Carolina resident and an

out-of-state party alone does not automatically establish the necessary minimum

contacts with this State, nevertheless, a single contract may be a sufficient basis for

the exercise of personal jurisdiction if it has a substantial connection with this State.

Tom Togs, 318 N.C. at 367, 348 S.E.2d at 786. In Tom Togs, our Supreme Court

analyzed whether a contract between a North Carolina resident plaintiff and a non-

resident defendant for the sale of shirts presented a substantial connection with this

State. The defendant in Tom Togs was aware that the plaintiff was a North Carolina

resident, and that the shirts were to be shipped from this State. Id., 318 N.C. at 367,

348 S.E.2d at 787. Accordingly, our Supreme Court held that the contract and

business dealings between defendant and plaintiff created a “substantial connection”

with this State.

Here, as in Tom Togs, third-party defendants Delongy Stores were aware that

plaintiff Millar is a North Carolina resident, and each party maintained a series of

business transactions involving the shipment of clothing from a North Carolina

resident plaintiff to a non-resident defendant. Although there was not a written

contract between Delongy Stores and Millar, the nature of the business transactions

and the ongoing business relationship between the plaintiff and the third-party

defendants which resulted in the alleged debt that plaintiff is suing defendant Shaw

over in my opinion presents a “substantial connection” with this State.

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Accordingly, both steps of analysis under the North Carolina long-arm statute

are satisfied, and the exercise of personal jurisdiction over Delongy Stores does not

violate due process requirements. Therefore, I would hold that the trial court did not

err in denying the third-party defendants’ motion to dismiss for lack of personal

jurisdiction.

III. Conclusion

I would affirm the order denying the motion to dismiss for lack of jurisdiction,

vacate the order denying the motion to dismiss for improper venue and remand for

the trial court to make findings of fact with respect to whether third-party plaintiff

can meet the standard established under Bremen to circumvent the forum selection

clause under the contract between Shaw and Delongy Stores. While Georgia law

applies, it is constrained by the overarching mandate of the United States Supreme

Court with respect to the enforcement of forum selection clauses.

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