Soma Tech. Inc. v. Dalamagas, 2017 NCBC 26.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION MECKLENBURG COUNTY 16 CVS 11100
SOMA TECHNOLOGY, INC.,
Plaintiff, ORDER AND OPINION ON v. DEFENDANT DESAI’S MOTION TO DISMISS FOR LACK OF PERSONAL PHOTIOS DALAMAGAS; DENOVA JURISDICTION OR, IN THE MEDICAL, INC.; and HIREN ALTERNATIVE, STAY UNDER N.C. DESAI, GEN. STAT. § 1-75.12 Defendants.
1. THIS MATTER is before the Court upon Defendant Hiren Desai’s (“Desai”)
motion to dismiss for lack of personal jurisdiction under N.C. R. Civ. P. 12(b)(2) (the
“12(b)(2) Motion”) or, in the alternative, stay under N.C. Gen. Stat. § 1-75.12 (the
“Alternative Stay Motion”) (collectively, the “Motions”) in the above-captioned case.
2. Having considered the Motions, the parties’ briefs in support of and in
opposition to the Motions, supplemental briefs, appropriate evidence of record, and
the arguments of counsel at the hearing on December 1, 2016, the Court DENIES
the Motions as set forth below.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Daniel F.E. Smith and Robert J. King III, and Shapiro Law Offices, LLC, by Jonathan M. Shapiro, for Plaintiff Soma Technology, Inc.
Law Office of Faith Fox, PLLC, by Paul Stevens, for Defendants Photios Dalamagas and Denova Medical, Inc.
Tin, Fulton, Walker & Owen, PLLC, by Sam McGee, for Defendant Hiren Desai.
Bledsoe, Judge. I.
PROCEDURAL BACKGROUND
3. Soma Technology, Inc. (“Soma” or “Plaintiff”) initiated this action on June
21, 2016 by asserting claims against Defendants Photios Dalamagas (“Dalamagas”)
and Denova Medical, Inc. (“Denova”) (collectively, the “North Carolina
Defendants”). Soma filed an amended complaint on July 18, 2016 (“Amended
Complaint”) asserting claims against Dalamagas, Denova, and Desai (collectively,
“Defendants”).1
4. Soma’s allegations principally arise from what Soma contends is the
improper interference and control of Soma Tech Pvt. Ltd. (“Soma India”), an Indian
private limited company, by Desai and Dalamagas. (Am. Compl. ¶¶ 11, 20, 25–29.)
Soma specifically contends that Desai and Dalamagas (and in certain respects,
1 Peter Leonidas (“Leonidas”), Soma’s President and a shareholder, verified the Amended Complaint, which was filed on July 18, 2016, via an affidavit filed on November 30, 2016 (the “Leonidas Affidavit”). (Leonidas Aff. ¶ 3.) “[A] verified complaint may be treated as an affidavit if it (1) is made on personal knowledge, (2) sets forth such facts as would be admissible in evidence, and (3) shows affirmatively that the affiant is competent to testify to the matters stated therein.” Bauer v. Douglas Aquatics, Inc., 207 N.C. App. 65, 69, 698 S.E.2d 757, 761 (2010) (quotation marks omitted). Desai objected to the Court’s consideration of the Leonidas Affidavit because it was filed only one day before the motion hearing in violation of N.C. R. Civ. P. 6, which requires opposing affidavits to be filed at least two days before a motion hearing. Because Desai had notice of the allegations of the Amended Complaint for more than four months before the hearing, however, the Court finds that Desai shall not be prejudiced by the Court’s consideration of the Amended Complaint as a verified complaint and, further, that the ends of justice in these circumstances require, and are served by, the Court’s consideration of the allegations of the Amended Complaint as verified. Thus, the Court elects, in the exercise of its discretion, to consider the Leonidas Affidavit to the extent it verifies the Amended Complaint. The Court declines, in the exercise of its discretion, however, to consider any other averments in the Leonidas Affidavit because Desai did not have an opportunity to respond to these sworn declarations prior to the hearing. See N.C. R. C. P. 6(d); Raper v. Oliver House, LLC, 180 N.C. App. 414, 418, 637 S.E.2d 551, 554 (2006) (recognizing that Rule 6(d) provides the trial court discretion to consider late-filed affidavits, including where “the ends of justice require”). Denova, a North Carolina corporation owned by Dalamagas, (Am. Compl. ¶¶ 2–3))
have conspired together (i) to improperly exert control over Soma India to benefit
themselves personally and Denova, (Am. Compl. ¶ 44), and (ii) to harm Soma by (a)
refusing to pay invoices for equipment provided by Soma’s transfer agent to Soma
India, (Am. Compl. ¶¶ 20, 30–31), (b) refusing to do business with Soma, (Am.
Compl. ¶¶ 22, 43), and (c) directing business that should have been directed to
Soma to Denova, (Am. Compl. ¶¶ 28, 31).
5. Based on these allegations, Soma asserts claims against Dalamagas and
Desai for statutory and common law unfair competition and fraud, and against all
Defendants for tortious interference with contract and with reasonable business
expectations. Soma further requests (i) the entry of a declaratory judgment and
permanent injunction as to all Defendants, (ii) the declaration of a constructive
trust against all Defendants, (iii) punitive damages against all Defendants, and (iv)
an accounting of each Defendant’s business transactions with Soma India, an entity
sharing common shareholders with Soma but not formally affiliated with Soma.
6. On August 29, 2016, Desai moved to dismiss Soma’s Amended Complaint
as to him under Rule 12(b)(2) for lack of personal jurisdiction and, in the
alternative, moved to stay this action under N.C. Gen. Stat. § 1-75.12. That same
day Desai also moved to dismiss the claims asserted against him for failure to state
a claim under Rule 12(b)(6) (“Desai’s 12(b)(6) Motion”). 7. On September 16, 2016, Denova and Dalamagas filed a motion to dismiss
the Amended Complaint under Rule 12(b)(6) (the “North Carolina Defendants’
Motion to Dismiss”).
8. On September 21, 2016, Soma filed an “alternative motion” to take
jurisdictional discovery and for leave to amend the Amended Complaint in the event
the Court determined it could not resolve Desai’s Rule 12(b)(2) motion on the
pleadings or found that any cause of action as pleaded in the Amended Complaint
suffers from a pleading deficiency. Soma did not file proposed amendments to the
Amended Complaint.
9. On September 28, 2016, the Court granted Soma’s motion to take
jurisdictional discovery and ordered the parties to serve discovery requests and
objections.
10. On October 7, 2016, the Court, after hearing Desai’s objections to the
discovery requests, ordered Desai to produce documents, answer interrogatories,
and submit to a deposition of no more than two hours limited to jurisdictional
issues. The Court deferred ruling on Soma’s alternative motion to amend
(“Alternative Motion to Amend”) until the Court considered Desai’s 12(b)(6)
Motion.2
11. On November 22, 2016, Soma moved both to compel discovery from Desai
it alleged had been authorized by the Court’s October 7, 2016 Order and for
additional jurisdictional discovery from the North Carolina Defendants, which
2 The Court will decide Desai’s 12(b)(6) Motion, the North Carolina Defendants’ Motion to
Dismiss, and Soma’s Alternative Motion to Amend in a separate Order and Opinion. Soma acknowledged was not contemplated by the time deadline set in the Court’s
October 7, 2016 Order.
12. On November 22, 2016, the Court entered an order (the “November 22,
2016 Order”) requiring Desai (i) to supplement his responses to Plaintiff’s document
requests by providing (a) redacted invoices, additional phone records, documents
concerning Desai’s nephew’s activities in obtaining and transporting equipment for
the North Carolina Defendants in May 2015, and (b) documents concerning the
assistance Desai gave to a Soma India employee to obtain a visa for travel from
India to North Carolina in September 2016, and (ii) to file an affidavit detailing the
procedures Desai followed in locating relevant documents in response to Soma’s
document requests and concerning other issues raised by Plaintiff and delineated in
the November 22, 2016 Order.
13. In addition, the November 22, 2016 Order denied both Plaintiff’s request to
compel Desai to submit to a forensic examination of his emails and Plaintiff’s
request for jurisdictional discovery from the North Carolina Defendants, the latter
because Plaintiff failed to show good cause for Plaintiff’s failure to move for
jurisdictional discovery prior to the Court’s deadline in the October 7, 2016 Order.
Finally, the Court ordered Desai and Plaintiff to supplement their briefs in support
of and in opposition to Desai’s 12(b)(2) Motion upon completion of jurisdictional
discovery.
14. On November 28, 2016, Desai filed an affidavit addressing the directives
set forth in the Court’s November 22, 2016 Order (“Second Desai Affidavit”). 15. The Court held a hearing on the Motions on December 1, 2016, at which all
parties were represented by counsel. The Court noted at the hearing that
Defendants had each moved, either directly or in the alternative, to stay this action
under N.C. Gen. Stat. § 1-75.12(a), but that no Defendant had filed a stipulation of
consent to suit in another jurisdiction as required for the Court to grant a motion to
stay pursuant to N.C. Gen. Stat. § 1-75.12(a).
16. On December 2, 2016, the Court entered an order directing Desai and his
co-Defendants to file a stipulation of consent to jurisdiction in another jurisdiction
by December 15, 2016 if any Defendant intended for the Court to consider a stay of
this action. No Defendant filed a stipulation of consent to jurisdiction in any other
forum.
17. The Motions are now ripe for resolution.
II.
DESAI’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
18. Desai argues that this Court lacks jurisdiction over him because Plaintiff
cannot point to “one contract Defendant has entered here,” “one dollar . . . paid or
received to anyone in North Carolina,” or that “Desai is in control of Soma India.”
(Desai’s Supplemental Mem. Supp. 12(b)(2) Motion 2.) Desai fails, however, to cite
any relevant case law to support his contentions that these factors are
determinative of personal jurisdiction, and, instead, contends without persuasive
support that more contacts with North Carolina than are present here are required to establish personal jurisdiction when an out-of-state plaintiff seeks to sue an out-
of-state defendant in North Carolina.
19. Although the Court agrees that a trial court may consider the plaintiff’s
residence when determining whether jurisdiction is proper, see Dillon v.
Numismatic Funding Corp., 291 N.C. 674, 679, 231 S.E.2d 629, 632 (1977), a
plaintiff’s residence is not determinative of this Court’s jurisdiction because no
specific fact or contact controls whether a defendant has minimum contacts with the
forum, see B.F. Goodrich Co. v. Tire King of Greensboro, Inc., 80 N.C. App. 129, 132,
341 S.E.2d 65, 67 (1986) (“No single factor controls, but they all must be weighed in
light of fundamental fairness and the circumstances of the case.”). Based on the
Court’s review of the record and controlling legal precedent, the Court concludes, as
explained below, that Desai has sufficient minimum contacts with this State for the
Court to properly exercise personal jurisdiction over Desai in the circumstances
presented here.
A. Standard of Review
20. A North Carolina court has jurisdiction over a nonresident defendant if (1)
statutory authority for the exercise of jurisdiction under the long-arm statute, N.C.
Gen. Stat. § 1-75.4, exists and (2) the exercise of jurisdiction comports with due
process under federal law. See e.g., Skinner v. Preferred Credit, 361 N.C. 114, 119,
638 S.E.2d 203, 208 (2006).
21. A complaint must allege facts sufficient to support the inference of
jurisdiction but does not need to plead the particulars of jurisdiction. Williams v. Inst. for Computational Studies, 85 N.C. App. 421, 428, 355 S.E.2d 177, 182 (1987).
However, where, as here, the defendant challenges the court’s jurisdiction under
Rule 12(b)(2), the burden falls on the plaintiff to establish that grounds for
asserting jurisdiction exist. Id. at 424, 355 S.E.2d at 179; see also Mannise v.
Harrell, 791 S.E.2d 653, 659 (N.C. Ct. App. 2016) (reversing finding of personal
jurisdiction when plaintiff presented no evidence to rebut defendant’s affidavit
stating that he had no contacts with North Carolina).
22. If the court is presented with competing affidavits and nothing more, the
plaintiff must only establish a prima facie basis for jurisdiction. Deer Corp. v.
Carter, 177 N.C. App. 314, 322, 629 S.E.2d 159, 166 (2006). However, if the court
holds an evidentiary hearing, the trial court must act as fact-finder and determine
personal jurisdiction by a preponderance of the evidence. Id.; see also Banc of Am.
Sec. LLC v. Evergreen Int’l Aviation, Inc., 169 N.C. App. 690, 694, 611 S.E.2d 179,
183 (2005) (discussing Rule 12(b)(2) standard of review). If both parties submit
competing affidavits and depositions, and the trial court holds a hearing on
personal jurisdiction, the trial court should consider the matter as if an evidentiary
hearing had occurred. Deer Corp., 177 N.C. App. at 322, 629 S.E.2d at 166; see also
Parker v. Town of Erwin, 776 S.E.2d 710, 722 (N.C. Ct. App. 2015) (finding that
where each party submitted affidavits, depositions, and other documentary evidence
for the trial court’s consideration, the court should act as fact-finder and determine
personal jurisdiction by a preponderance of the evidence). 23. Because the Court has considered the parties’ competing submissions of
evidence and held a hearing on the Motion, the Court will consider the Motion to
Dismiss subject to the requirements attendant to an evidentiary hearing and thus
acts as a fact finder and determines the facts relating to the exercise of personal
jurisdiction over Desai by a preponderance of the evidence.
B. North Carolina’s Long-Arm Statute
24. N.C. Gen. Stat. § 1-75.4(1)(d) provides that a North Carolina trial court
has personal jurisdiction over a defendant “whether the claim arises within or
without this State, . . . [if the defendant] [i]s engaged in substantial activity within
this State, whether such activity is wholly interstate, intrastate, or otherwise.”
Because the North Carolina Supreme Court has concluded that through “the
enactment of G.S. 1-75.4(d)(1) . . . the General Assembly intended to make available
to the North Carolina courts the full jurisdictional powers permissible under federal
due process,” Dillon, 291 N.C. at 676, 231 S.E.2d at 630, personal jurisdiction exists
so long as the defendant has engaged in some activity in North Carolina and the
exercise of personal jurisdiction over the defendant comports with due process,
Skinner, 361 N.C. at 119, 638 S.E.2d at 208; see also Rossetto USA, Inc. v.
Greensky Fin., LLC, 191 N.C. App. 196, 199, 662 S.E.2d 909, 912 (2008).
25. As a result, “the question of statutory authority collapses into one
inquiry—whether defendant has the minimum contacts necessary to meet the
requirements of due process.” Cambridge Homes of N.C. L.P. v. Hyundai Constr., Inc., 194 N.C. App. 407, 412, 670 S.E.2d 290, 295 (2008) (quoting Filmar Racing,
Inc. v. Stewart, 141 N.C. App. 668, 671, 541 S.E.2d 733, 736 (2001)).
C. Due Process—“Minimum Contacts”
26. “To satisfy the due process prong of the personal jurisdiction analysis,
there must be sufficient ‘minimum contacts’ between the nonresident defendant and
our state ‘such that the maintenance of the suit does not offend ‘traditional notions
of fair play and substantial justice.’” Skinner, 361 N.C. at 122, 638 S.E.2d at 210
(quoting Int’l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)).
27. A court may have personal jurisdiction through general jurisdiction or
specific jurisdiction. Id. “General jurisdiction exists when the defendant’s contacts
with the state are not related to the cause of action but the defendant’s activities in
the forum are sufficiently ‘continuous and systematic.’” Id. “For an individual, the
paradigm forum for the exercise of general jurisdiction is the individual’s domicile;
for a corporation, it is an equivalent place, one in which the corporation is fairly
regarded as at home.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S.
915, 924 (2011).
28. “Specific jurisdiction exists when the cause of action arises from or is
related to defendant’s contacts with the forum.” Skinner, 361 N.C. at 122, 638
S.E.2d at 210. The trial court must focus on “the relationship among the defendant,
the forum, and the litigation” to determine whether the court may assert specific
jurisdiction over a nonresident defendant. Tom Togs, Inc. v. Ben Elias Indus., Inc.,
318 N.C. 361, 366, 348 S.E.2d 782, 786 (1986). The relationship with the forum “must arise out of contacts that the ‘defendant himself” creates with the forum
State.” Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014) (citing Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475 (1985)); see Centura Bank v. Pee Dee Express, Inc.,
119 N.C. App. 210, 213, 458 S.E.2d 15, 18 (1995) (noting that minimum contacts
analysis “focuses on the actions of the non-resident defendant over whom
jurisdiction is asserted, and not the unilateral actions of some other entity”). These
contacts must be intentional and purposeful and not based solely on “random,
fortuitous, or unilateral activity of another party or a third person.” Cambridge
Homes, 194 N.C. App. at 413, 670 S.E.2d at 296.
29. Therefore, the trial court must carefully scrutinize the facts of each case to
determine if a defendant’s dispute-related contacts with the forum state constitute
sufficient minimum contacts to exercise personal jurisdiction over the defendant in
the forum state. Deer Corp., 177 N.C. App. at 327, 629 S.E.2d at 169; see also B.F.
Goodrich, 80 N.C. App. at 131, 341 S.E.2d at 67 (observing that, for minimum
contacts analysis, primary factors include “quantity of contacts, nature and quality
of contacts, and the source and connection of the cause of action with these contacts”
and secondary factors include “interest of the forum state and convenience to the
parties”).
30. In engaging in this analysis, our courts have made clear that “[t]o base
personal jurisdiction on the bare fact of a defendant’s status as, e.g., corporate
officer or agent, would violate his due process rights.” Saft Am., Inc. v. Plainview
Batteries, Inc., 189 N.C. App. 579, 595, 659 S.E.2d 39, 49 (2008) (Arrowood, J., dissenting), reversed for reasons stated in dissent, 363 N.C. 5, 673 S.E.2d 864
(2009) (per curiam). Thus, “North Carolina precedent has consistently required
that, before a defendant is subject to personal jurisdiction, there be evidence that he
personally took some action subjecting him to North Carolina’s jurisdiction.” Id.
31. In particular, North Carolina law is clear that “personal jurisdiction over a
defendant may . . . be based on the contacts he has with the state in the course of
his private life” and that a defendant’s contacts “count” even “if they were made as
part of his employment.” Id. at 596, 659 S.E.2d at 50; see, e.g., Godwin v. Walls,
118 N.C. App. 341, 354–55, 455 S.E.2d 473, 483 (1995) (finding personal jurisdiction
based on defendant’s actions taken as part of his employment); see also Calder v.
Jones, 465 U.S. 783, 790 (1984) (holding that defendants’ “status as employees does
not somehow insulate them from jurisdiction. Each defendant’s contacts with the
forum State must be assessed individually. . . . In this case, petitioners are primary
participants in an alleged wrongdoing intentionally directed at a [forum State]
resident, and jurisdiction over them is proper on that basis.”).
32. Ultimately, the trial court must determine “whether the defendant’s
conduct connects him to the forum in a meaningful way.” Walden, 134 S. Ct. at
1125.
D. Findings of Fact
33. Based on the Court’s review of the parties’ exhibits, the verified Amended
Complaint, Desai’s deposition and affidavits, and the arguments of counsel at the hearing, the Court makes the following findings of fact solely for the purpose of
deciding the 12(b)(2) Motion.
34. Desai is a resident of Massachusetts. (Am. Compl. ¶ 5; Desai Aff. ¶ 3.)
35. Dalamagas is a resident and citizen of North Carolina and has lived in
North Carolina at all times relevant to the pending dispute. (Am. Compl. ¶ 2; Desai
Dep. 10:24–11:6.)
36. Denova is a corporation organized and existing under North Carolina law
with its principal place of business in North Carolina. (Am. Compl. ¶ 3; Desai Dep.
11:8–10.)
37. Denova only has offices in North Carolina. (Desai Dep. 11:11–13.)
38. Desai was an employee of Soma until February 26, 2015. (Am. Compl. ¶
24.) In that role, he was actively involved with Soma India’s business. (Desai Dep.
25:15–25:22.)
39. Desai is a shareholder of Soma India and has been actively involved in the
meetings and votes of shareholders and directors of Soma India. (Am. Compl. ¶¶
13, 25, 36, 39; Desai Aff. ¶ 6; Desai Dep. 25:15–26:8.)
40. Desai had a contract to provide services as an independent consultant to
Soma India from March 2015 until June 2016. (Desai Dep. 24:4–25:11; Desai Dep.
Ex. 1 p. 4.)
41. Desai has been, and continues to be, involved with the operation and
business of Soma India. (Desai Dep. 24:4–25:11, 26:9-27:11, 28:12-29:5, 29:18– 29:22, 30:1-30:4; 30:11–30:14, 31:16-31:22, 31:25-32:8, 33:7-33:15, 33:19–34:1,
35:11–35:10, 39:19–40:4; Desai Dep. Ex. 1 p. 3–4, Exs. 3, 4, 6, 7.)
42. Denova and Soma India are each other’s preferred supplier and preferred
dealer and have agreed not to compete with each other. Soma India is Denova’s
partner for distribution in India. (Desai Dep. 57:24–58:8, 61:2–61:8, 61:14–62:8;
Desai Dep. Ex. 2 pp. 28, 67, 58.)
43. Desai made and accepted frequent telephone calls to and from North
Carolina in communicating with co-defendant Dalamagas. These telephone calls
involved business matters concerning co-defendant Denova and Soma India and
relate to the matters in dispute in this litigation. (Desai Dep. 36:16–36:19, 37:13–
38:8, 49:22–50:6; 114:10–115:3; Desai Dep. Ex. 1 pp. 5–6, Ex. 2 pp. 1–19.) Based on
the records produced by Desai for the period between May 27, 2016 and September
26, 2016, Desai called Dalamagas in North Carolina 37 times and received phone
calls from Dalamagas in North Carolina on 15 additional occasions. (Desai Dep.
114:10–115:3; Desai Dep. Ex. 2 pp. 1–19.)
44. Desai sent, forwarded, received, and was copied on frequent emails from
co-defendant Dalamagas in North Carolina, and employees of co-defendant Denova
in North Carolina. These emails involved business matters and opportunities
concerning Soma India and North Carolina-based Denova and relate to the matters
in dispute in this litigation. (Desai Dep. 37:13–38:9; Desai Dep. Ex. 2 pp. 22, 23, 25,
26–27, 28–30, 33, 34, 36, 37, 39, 40, 43, 44–48, 49–50, 51–77, 84–92, 96–99.) 45. Desai was aware of and copied on numerous invoices sent by co-defendant
Denova in North Carolina to Soma India and on payment receipts for invoices,
which were issued by co-defendant Denova in North Carolina and paid by Soma
India to Denova in North Carolina. These invoices are at issue in this litigation.
(Desai Dep. 53:4–53:24; Desai Dep. Ex. 2 pp. 20–21, 78–93, 93–95, 100–01.)
46. Desai has helped, and continues to help, with locating business
opportunities for North Carolina-based Denova, (Dep. 56:19–59:8, 89:9–90:6; Desai
Dep. Ex. 2 p. 25), and has made arrangements for transportation of Denova’s
purchases to Denova in North Carolina, (Desai Dep. Ex. 8).
47. Desai directed a Denova employee in North Carolina to pay an invoice
owed by Soma India that was issued by a third party. (Desai Dep. 69:1–72:13; Dep.
Ex. 2 pp. 102–04).
48. Desai helped an employee of Soma India obtain a visa to travel to North
Carolina to train at Denova. (Desai Dep. 95:13–96:22; Desai Dep. Exs. 10, 16.)
49. Desai traveled to North Carolina for business twice over a nine-month
period, visited Dalamagas during both trips, and also visited Denova’s principal
place of business in North Carolina. (Desai Dep. 38:20–38:23; 42:21–43:13; Desai
Dep. Ex. 1, pp. 9–10; contra Desai Aff. ¶ 4(a).)
50. On his two trips to North Carolina, Desai contacted executives of medical
equipment companies in North Carolina for business purposes and to further
advance the interests of North Carolina-based Denova and Soma India. (Desai Dep.
43:14–44:18, 46:11–47:3, 47:14–49:11.) 51. Desai’s travel to North Carolina and correspondence with co-defendants
Dalamagas and Denova through e-mail and telephone calls directed to and from
North Carolina was part of Desai’s effort to coordinate the business of Soma India
to benefit himself, Dalamagas, and Denova and to shift business away from Soma.
(Desai Aff. ¶¶ 5, 7, 9–10; Desai Dep. 23:8–24:9, 35:11–36:10, 36:16–36:19, 37:13–
38:8, 38:20–38:23.)
52. The record before the Court of Desai’s contacts with North Carolina is not
complete because some documents, emails, phone records, or emails have been
deleted, are missing, or were not obtained by Desai. (Desai Dep. 13:14–14:1
(documents); 15:23–16:23, 17:16–19:13 (emails); 21:8–22 (phone records); 52:5–24
(text messages); see e.g., Desai Dep. 80:21–23; Second Desai Aff. ¶¶ 2–3.)
53. Desai has not stipulated to consent to suit in another jurisdiction for the
claims raised in this case.
54. Dalamagas and Denova have not stipulated to consent to suit in another
jurisdiction for the claims raised in this case.
E. Conclusions of Law
55. Based on the Court’s findings of fact, the Court concludes, as a matter of
law, that Plaintiff has established, by a preponderance of the evidence, that Desai
has engaged in substantial activity within this State, N.C. Gen. Stat. 1-75.4(1)(d),
and has sufficient minimum contacts with North Carolina “such that the
maintenance of [this] suit does not offend ‘traditional notions of fair play and substantial justice,’” Skinner, 361 N.C. at 122, 638 S.E.2d at 210 (quoting Int’l Shoe
Co., 326 U.S. at 316).
56. Desai has initiated numerous contacts with North Carolina arising in
connection with the current dispute. See Centura Bank, 119 N.C. App. at 213–14,
458 S.E.2d at 18; Walden, 134 S. Ct. at 1122. These contacts constitute a
substantial connection with North Carolina that establish Desai’s minimum
contacts with this State and are sufficient for the Court’s exercise of specific
jurisdiction over Desai.
57. Desai’s relevant contacts with this forum are not merely based on his
contract to provide services to Soma India or on contacts Soma India has with North
Carolina, see Saft Am., supra ¶ 30, and are not based simply on his relationship
with Plaintiff or a third-party to this litigation. Rather, Desai’s relevant contacts
are based on the extensive and systematic contacts he has had, and frequently
initiated, with Denova and Dalamagas in North Carolina that relate to this dispute.
See Cambridge Homes, 194 N.C. App. at 413, 670 S.E.2d at 296 (“Nonresident
defendants must engage in acts by which they purposely avail themselves of the
privilege of conducting activities within the forum State to support a finding of
minimum contacts.”) (citations and quotation marks omitted).
58. Desai’s contacts with North Carolina are not attenuated contacts arising
from interaction with a person or entity that happens to be a resident or citizen of
North Carolina but instead are intentional contacts he has directed at North
Carolina and at North Carolina residents and citizens. Compare Walden, 134 S. Ct. at 1124 (holding that a Nevada court lacked personal jurisdiction when defendant
“never traveled to, conducted activities within, contacted anyone in, or sent
anything or anyone to Nevada”), with Calder, 465 U.S. at 785–86, 788–89 (holding
that a California court had personal jurisdiction over defendant on a libel claim
where defendant contacted sources in California for information used in the article
at issue and frequently traveled to California for business, the acts described in the
article occurred in California, the article was distributed in California, and
plaintiff’s reputational injury was predominately felt in California).
59. Desai exchanged numerous calls and emails to and from Denova and
Dalamagas in North Carolina, and traveled on several occasions to and from North
Carolina. These were all meaningful contacts with North Carolina because they
involved a North Carolina entity and a North Carolina resident in North Carolina,
the conduct of the North Carolina Defendants’ business in North Carolina, and
invoices sent by the North Carolina Defendants to Soma India, all of which are
closely intertwined with Plaintiff’s claims in this action. See, e.g., Walden, 134 S.
Ct. at 1222 (“physical entry into the State — either by the defendant in person or
through an agent, goods, mail, or some other means — is certainly a relevant
contact”); Brown v. Ellis, 363 N.C. 360, 361–63, 678 S.E.2d 222, 222–24 (2009)
(holding that where an out-of-state defendant made telephone calls and sent emails
to plaintiff’s wife, who resided in North Carolina, the court could properly exercise
personal jurisdiction over defendant in alienation of affections case). 60. Desai has, through his activities described above, “purposefully avail[ed]
[himself] of the privilege of conducting activities within the forum State, thus
invoking the benefits and protection of its laws,” and, as a result, can reasonably
anticipate being haled into a North Carolina court to answer for his alleged conduct.
Rossetto USA, 191 N.C. App. at 201–03, 662 S.E.2d at 913–14 (quoting Skinner, 361
N.C. at 123, 638 S.E.2d at 210–11) (holding that “consistent and continuous two-
year interaction” of calls and payments to buyer in North Carolina supported
conclusion that defendant “purposefully availed himself of the privilege of
conducting activities in North Carolina”).
61. The convenience of resolving the claims against Desai and the North
Carolina Defendants in North Carolina outweighs the inconvenience to Desai of
litigating in North Carolina, particularly when Desai, through his conduct, could
reasonably anticipate being haled into a North Carolina court, and when it appears
that no other forum may have jurisdiction over all Defendants. See generally B.F.
Goodrich, 80 N.C. App. at 133, 341 S.E.2d at 68.
62. There is no evidence to suggest that Desai would be “unfairly prejudiced”
by litigating Plaintiff’s claims in North Carolina. See, e.g., Inspirational Network,
Inc. v. Combs, 131 N.C. App. 231, 241, 506 S.E.2d 754, 761 (1998) (finding lack of
prejudice a factor that weighed in favor of personal jurisdiction over out-of-state
defendants).
63. Considering the circumstances presented here, and balancing all of the
considerations set forth above, the Court concludes that the Court’s exercise of specific jurisdiction over Desai in this action is reasonable and fundamentally fair
and comports with traditional notions of fair play and substantial justice. The
Court thus concludes that Desai’s 12(b)(2) Motion should be denied.
III.
DESAI’S ALTERNATIVE MOTION TO STAY
64. For the trial court to enter a stay of an action in North Carolina so that the
action may proceed in another jurisdiction, N.C. Gen. Stat. § 1-75.12(a) requires
that the “moving party . . . stipulate his consent to suit in another jurisdiction found
by the judge to provide a convenient, reasonable and fair place of trial.”
Accordingly, absent a stipulation of consent by the moving party, the Court must
deny the moving party’s motion to stay.
65. Despite the instructions to Defendants in the Court’s December 2, 2016
Order, Desai has not filed a stipulation of consent to jurisdiction in Connecticut,
where there is ongoing litigation in state court between Desai and Leonidas and in
federal court between Dalamagas and Leonidas, or in any other state. Therefore,
the Court concludes that Desai’s Alternative Stay Motion should be denied for
failure to comply with N.C. Gen. Stat. § 1-75.12(a).
66. Moreover, even if Desai had properly complied with section 1-75.12, Desai
has failed to carry his burden to justify relief under that section. Our courts have
held that a trial court must find 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 1, Ltd., 201 N.C. App. 507, 520, 687
S.E.2d 487, 495 (2009) (quoting Lawyers Mut. Liab. Ins. Co. of N.C. v. Nexsen Pruet
Jacobs & Pollard, 112 N.C. App. 353, 357, 435 S.E.2d 571, 574 (1993)).
67. Based on the Court’s review of the evidence of record, the Court concludes
that Desai has not offered sufficient evidence to carry his burden to merit a stay at
this stage in the litigation. In particular, the Court cannot conclude that a
substantial injustice would result if the Court denied the stay and allowed this
litigation to go forward against Desai in North Carolina or that a stay is warranted
in light of the substantial and meaningful contacts Desai has had with North
Carolina in connection with the facts relevant to this dispute.
IV.
CONCLUSION
68. Based on the foregoing, the Court hereby DENIES both Desai’s Motion to
Dismiss under Rule 12(b)(2) and Desai’s Alternative Stay Motion under N.C. Gen.
Stat. § 1-75.12(a).
SO ORDERED, this the 24th day of March, 2017.
/s/ Louis A. Bledsoe, III Louis A. Bledsoe, III Special Superior Court Judge for Complex Business Cases