Atl. Coast Props., Inc. v. Saunders
256 N.C. App. 165
| N.C. Ct. App. | 2017Background
- Atlantic Coast Properties, Inc. (petitioner), a Delaware corporation, filed a verified petition to partition real property in Currituck County alleging a one-half undivided interest; respondents asserted exclusive possession and ownership by adverse possession.
- Respondents moved for summary judgment; after procedural developments and a prior appeal remanding part of the case, respondents filed a second summary-judgment motion alleging petitioner lacked capacity to sue because its Delaware charter was suspended and its North Carolina certificate of authority was suspended for revenue noncompliance.
- The trial court found (1) petitioner's Delaware charter was void as of March 1, 2013, (2) its NC certificate of authority was suspended May 15, 2013, and (3) petitioner failed to plead its corporate existence and capacity under Rule 9(a); the court dismissed the petition with prejudice.
- On appeal the majority affirmed, holding petitioner's failure to affirmatively aver its legal existence and capacity to sue (Rule 9(a)) deprived it of standing; petitioner did not challenge the underlying factual findings about suspension.
- Judge Dillon dissented, arguing: (a) owning real property and maintaining or defending an action are not "transacting business" requiring a certificate of authority, and (b) a dissolved corporation may still sue and need not aver non-dissolution here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether petitioner had capacity/standing where it failed to plead corporate existence and capacity (Rule 9(a)) | Rule 9(a) noncompliance is not dispositive; petitioner alleged it was a Delaware corporation and sought relief | Petitioner failed to make the affirmative averment required by Rule 9(a); failure deprives petitioner of standing | Court: Failure to plead legal existence and capacity under Rule 9(a) means no standing; summary judgment affirmed |
| Whether petitioner needed a NC certificate of authority to maintain partition when it owns property and filed suit | Ownership of real property and maintaining an action do not constitute "transacting business" — no certificate required | Petitioner lacked certificate of authority at filing and had revenue suspension later; foreign corp must have certificate prior to trial per statute unless cured | Court: Certificate issue alone could be cured before trial, but petitioner did not challenge suspension facts; Rule 9(a) failure independently dispositive |
| Effect of Delaware charter suspension and NC revenue suspension on petitioner's ability to litigate | A dissolved/chartered-suspended foreign corp may still sue to partition real property and wind up affairs | Respondents: Charter suspension and revenue suspension mean acts after suspension are invalid and petitioner lacks capacity | Court: Petitioner did not contest those factual findings; they are binding; combined with Rule 9(a) failure supports dismissal |
| Admissibility/authentication of respondents' documentary proof of suspension | Documents were uncertified; plaintiff objects to their form | Respondents: Documents are public records; offered to certify; factual content unaffected | Court: Petitioner challenged form but not the underlying facts; findings on suspension stand and are binding |
Key Cases Cited
- Atl. Coast Props., Inc. v. Saunders, 243 N.C. App. 211, 777 S.E.2d 292 (N.C. Ct. App. 2015) (prior appeal: petitioner forecasted evidence creating genuine issue on cotenant recognition of title)
- In re Will of Jones, 362 N.C. 569, 669 S.E.2d 572 (N.C. 2008) (summary judgment standard and de novo review)
- Forbis v. Neal, 361 N.C. 519, 649 S.E.2d 382 (N.C. 2007) (summary judgment standard)
- Koufman v. Koufman, 330 N.C. 93, 408 S.E.2d 729 (N.C. 1991) (unchallenged findings of fact are binding on appeal)
- Harold Lang Jewelers, Inc. v. Johnson, 156 N.C. App. 187, 576 S.E.2d 360 (N.C. Ct. App. 2003) (foreign corporation may obtain certificate prior to trial to cure lack of authority)
- Kyle & Assocs., Inc. v. Mahan, 161 N.C. App. 341, 587 S.E.2d 914 (N.C. Ct. App. 2003) (same; certificate obtained after issue raised but before court considered matter)
- North Iredell Neighbors for Rural Life v. Iredell Cty., 196 N.C. App. 68, 674 S.E.2d 436 (N.C. Ct. App. 2009) (organization’s failure to aver legal existence/capacity justified dismissal for lack of standing)
- Barcello v. Hapgood, 118 N.C. 712, 24 S.E. 124 (N.C. 1896) (foreign corporations may acquire and deal with real property like domestic corporations)