Speedway Motorsports International Ltd. v. Bronwen Energy Trading, Ltd.
209 N.C. App. 474
| N.C. Ct. App. | 2011Background
- SMIL, a North Carolina company, opened an account with BNPP Suisse in 2006 to finance petroleum transactions.
- SMIL guaranteed letters of credit for Bronwen in 2007 under a series of oil contracts, with all guarantees to be maintained in SMIL's BNPP Suisse account.
- The First Oil Contract (July 12, 2007) and Amended Oil Contract (July 13, 2007) included a Mecklenburg County, North Carolina forum selection clause.
- BNPP Suisse issued and administered first demand guarantees for Bronwen’s LC obligations to BNPP France, with related instructions and drafts exchanged in July 2007.
- In November 2007 BNPP France attempted to draw on the guarantees; SMIL terminated the first guarantee, but BNPP Suisse paid BNPP France and debited SMIL's account.
- SMIL sued BNPP Suisse and others in North Carolina for various contract, fraud, and jurisdiction-related claims, asserting NC jurisdiction under the long-arm statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether incorporation by reference binds BNPP Suisse to the NC forum clause | SMIL argues the Instructions incorporated the NC forum clause via reference to Oil Contracts. | BNPP Suisse contends the Instructions only identify separate contracts and do not bind to their forum clause. | Incorporation by reference did not bind BNPP Suisse to NC forum clause. |
| Whether BNPP Suisse consented to NC jurisdiction | SMIL contends the NC forum clause constitutes consent to jurisdiction. | BNPP Suisse argues no binding consent via the Instructions and no incorporation of the NC forum clause. | Consent not established; no personal jurisdiction by NC courts. |
| Whether NC long-arm statute § 1-75.4(4)(a) applies | SMIL asserts BNPP Suisse engaged in solicitation or services in NC leading to injury in NC. | BNPP Suisse contends there was no solicitation by BNPP Suisse in NC; actions were due to contract terms and requests from BNPP France. | Long-arm jurisdiction not established under § 1-75.4(4)(a). |
| Whether exercise of jurisdiction would violate due process | SMIL would rely on minimum contacts and purposeful availment through BNPP Suisse's involvement. | BNPP Suisse argues there are insufficient contacts and that activities were tied to separate, independent entities. | Due process not satisfied; NC court cannot exercise jurisdiction over BNPP Suisse. |
Key Cases Cited
- Booker v. Everhart, 294 N.C. 146 (1978) (incorporation by reference can make terms binding or not depending on intent)
- Schenkel & Shultz, Inc. v. Hermon F. Fox & Assocs., 362 N.C. 269 (2008) (whether incorporation by reference captures indemnification terms; intent governs scope)
- Wyatt v. Walt Disney World Co., 151 N.C.App. 158 (2002) (rejects treating related entities as one for jurisdiction without proof of unity)
- Elec-Trol, Inc. v. C.J. Kern Contractors, Inc., 54 N.C.App. 626 (1981) (integration/independence principle in contract references)
- Joyner v. Adams, 87 N.C.App. 570 (1987) (ambiguities in writings presumed against the drafter)
- Brown v. Ellis, 363 N.C. 360 (2009) (two-step analysis for jurisdiction under NC long-arm statute and due process)