262 N.C. App. 610
N.C. Ct. App.2018Background
- On July 4, 2014 plaintiff Joseph Padron was seriously injured in North Carolina while using a 2006 Bentley Industries pontoon boat; he sued Bentley Marine Group, LLC and individuals including Keenan W. Green for product-liability and related claims.
- The complaint alleges Bentley Industries manufactured a defective boat with a dangerous "pinch point," and that Bentley Marine Group and the individual defendants purchased Bentley Industries (assets and liabilities) around 2008 and failed to warn or recall.
- Padron asserted North Carolina long-arm jurisdiction over Green and alleged Green was an alter ego of Bentley Marine Group to pierce the corporate veil.
- Green, a South Carolina resident, filed an affidavit that he was a brief, silent investor in 2008, never managed day-to-day operations, had no North Carolina residency, property, offices, or business registrations, and moved to dismiss for lack of personal jurisdiction.
- The trial court denied Green’s motion without making factual findings. The Court of Appeals reviewed the record and concluded Green’s only contacts with North Carolina were passive investment ties to a company whose products entered the State’s stream of commerce.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether North Carolina has personal jurisdiction over Green based on Bentley Marine Group’s sale of boats in NC (stream-of-commerce attribution) | Padron: Bentley Marine Group sold boats in NC, so Green, as a buyer/investor in the company, is subject to NC jurisdiction. | Green: He was a brief, passive investor/silent member with no personal contacts, activities, or purposeful availment related to NC. | Held: No. Corporate stream-of-commerce contacts cannot be imputed to an individual absent the individual’s own purposeful contacts. |
| Whether veil piercing (alter-ego) allows jurisdiction over Green | Padron: Green served as alter ego of Bentley Marine Group, so veil piercing permits NC courts to reach him. | Green: The complaint alleges alter-ego only conclusorily; plaintiff offered no competent evidence of control or domination. | Held: No. Conclusory alter-ego allegation unsupported by evidence is insufficient to establish jurisdiction. |
Key Cases Cited
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (establishes stream-of-commerce/foreseeability limits for due-process contacts)
- Tom Togs, Inc. v. Ben Elias Indus. Corp., 318 N.C. 361 (due-process minimum-contacts standard in NC)
- Robbins v. Ingham, 179 N.C. App. 764 (corporate contacts cannot automatically impute jurisdiction over individual officers/shareholders)
- J.M. Thompson Co. v. Doral Mfg. Co., 72 N.C. App. 419 (long-arm/statutory jurisdiction coextensive with due process)
- United Buying Grp., Inc. v. Coleman, 296 N.C. 510 (when an individual's corporate acts may be attributed to him for jurisdictional purposes)
- Ridgeway Brands Mfg., LLC v. State ex rel. Cooper, 188 N.C. App. 302 (conclusory alter-ego allegations insufficient to establish jurisdiction)
- Tart v. Prescott's Pharm., Inc., 118 N.C. App. 516 (personal jurisdiction upheld where individuals personally orchestrated forum-directed marketing/sales)
- Wyatt v. Walt Disney World Co., 151 N.C. App. 158 (plaintiff must produce specific facts by affidavit to establish jurisdiction when defendant submits contrary affidavits)