373 N.C. 297
N.C.2020Background:
- Beem USA was a Nevada limited‑liability limited partnership formed by Grax Consulting LLC (South Carolina) and Stephen Stark (Chapel Hill, NC); Grax was the general partner, Stark a 90% limited partner.
- Grax, through its owner Mason Boyd, opened a Bank of America account in Charlotte, made deposits and wires for Beem, traveled to North Carolina several times to meet Stark and Beem’s banker, and sent frequent emails, texts, calls, and mailed records to Stark in NC.
- Stark removed Grax as general partner on December 5, 2016; thereafter Grax allegedly continued to act for Beem (billing, changing online bank access, withdrawing funds, filing tax documents) and withheld records needed to wind up Beem and complete taxes.
- Stark and Beem sued Grax in Orange County (breach of contract and breach of fiduciary duty). Service delays led to a default; plaintiffs moved for default judgment but Business Court required proof of personal jurisdiction under N.C.G.S. §1‑75.11.
- The Business Court denied default judgment, finding plaintiffs’ affidavits insufficient and that the contacts giving rise to the claims were limited and not sufficiently connected to North Carolina.
- The North Carolina Supreme Court reversed, holding Grax’s partnership‑related contacts with NC satisfied the long‑arm statute and due‑process minimum‑contacts for specific jurisdiction.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether North Carolina courts may constitutionally exercise specific personal jurisdiction over nonresident Grax | Grax purposefully availed itself of NC by conducting partnership business here (opened NC bank account, traveled to NC, communicated frequently with Stark in NC); claims arise from those partnership activities | Grax’s contacts were insufficient or too attenuated to the claims (Business Court emphasized contacts after removal were limited to a couple letters) | Reversed: specific jurisdiction exists because Grax’s partnership‑related contacts with NC were case‑linked and satisfied due process |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (1945) (establishes minimum‑contacts due process standard)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and reasonable anticipation of suit in forum)
- Walden v. Fiore, 571 U.S. 277 (2014) (focus on defendant’s forum‑connected actions rather than plaintiff’s location)
- Bristol‑Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (specific jurisdiction requires affiliation between forum and underlying controversy)
- Daimler AG v. Bauman, 571 U.S. 117 (2014) (limits on general jurisdiction—‘at home’ standard)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) (clarifies scope of general jurisdiction)
- Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) (discusses limits of personal jurisdiction)
- Tom Togs, Inc. v. Ben Elias Indus. Corp., 318 N.C. 361, 348 S.E.2d 782 (1986) (North Carolina case applying specific‑jurisdiction analysis to contract with substantial forum connection)