Fran's Pecans, Inc. v. GreeneFran's Pecans, Inc. v. Greene
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- Before:
- Lewis
Defendant Centennial Foods, Inc. appeals the trial court’s denial of its motion to dismiss for lack of personal jurisdiction or, alternatively, to dismiss on the grounds
offorum non conveniens.
Defendant William A. Greene (“Greene”) is not a party to this appeal. The evidence presented showed that plaintiff is a Georgia corporation with its principal place of business in Charlotte and an office in Harlem, Georgia. Plaintiff acquired space in an office building in Charlotte
In 1996 plaintiff attempted to acquire Eilenberger’s Bakery, (“Eilenberger’s”) a commercial bakery based in Texas, for $1.6 million. Greene and Charles Calhoun began their own attempt to purchase both plaintiff and Eilenberger’s in October 1996. Since plaintiff knew that Greene wished to acquire both it and Eilenberger’s, plaintiff did not pursue the purchase of Eilenberger’s further. The anticipated sale to Greene fell through. In May 1997 Greene learned that Eilenberger’s was again for sale, this time for less than $1 million. Rather than inform plaintiff, Greene told Calhoun. Calhoun incorporated defendant in Georgia for the purpose of acquiring Eilenberger’s. It did so on 15 August 1997. Greene resigned from plaintiff effective 1 September 1997 and began working for defendant on that same day. Greene’s employment with defendant included responsibilities for sales and marketing of their product. Defendant mailed 1,937 of its catalogs to North Carolina residents, 239 of whom placed orders totaling $12,323.95 in sales. Plaintiff alleges these sales opportunities were the result of Greene’s taking valuable information about trade secrets and proprietary information with him upon his termination of employment with plaintiff.
In its notice of appeal, defendant claims it is entitled to a dismissal under the common law doctrine of
forum non conveniens.
However, defendant failed to assign error to Conclusion of Law No. 5, in which the trial court stated, “Dismissing or staying this litigation under . . . the common law doctrine of
forum non conveniens
would be inappropriate, as there is insufficient evidence to establish that a substantial injustice would result from Defendant Centennial litigating this case in North Carolina.” The appellant must assign error to each conclusion it believes is not supported by the evidence.
Defendant also moved for a motion to dismiss for lack of personal jurisdiction. The test for establishing in personam personal jurisdiction over a foreign corporation is two-fold: first, “Whether North Carolina’s ‘long-arm’ statute permits courts in this jurisdiction to entertain the action;” and second, “whether exercise of this jurisdictional power comports with due process of law.” ETR Corporation v. Wilson Welding Service, 96 N.C. App. 666, 668, 386 S.E.2d 766, 767 (1990). Defendant challenges both prongs of this test.
Defendant first challenges plaintiff’s assertion of jurisdiction under our long-arm statute, G.S. Section l-75.4(4)(a). The statute allows the exercise of personal jurisdiction
in any action claiming injury to person or property within this State arising out of an act or omission outside this State by the defendant, provided in addition that at or about the time of the injury . . . :
a. [solicitation or services activities were carried on within this State by or on behalf of the defendant....
N.C. Gen. Stat. § l-75.4(4)(a) (1996). To exercise personal jurisdiction over a foreign corporation, the plaintiff must establish: 1) an action claiming injury to a North Carolina person or property; 2) that the alleged injury arose from activities by the defendant outside of North Carolina; and 3) that the defendant was engaging in solicitation or services
Defendant mistakenly argues that the statute demands plaintiff prove an actual injury to a person or property within the state. However, the statute requires only that plaintiff allege an injury. Vishay Intertechnology, Inc. v. Delta International Corp., 696 F.2d 1062, 1067 (4th Cir. 1982). Plaintiff alleges that defendant misappropriated trade secrets, interfered with prospective business relations and carried on unfair trade practices, thereby harming plaintiffs business. Intangible injuries like these are considered injuries under G.S. Section 1.75-4(4)(a). Munchak Corporation v. Riko Enterprises, Inc., 368 F. Supp. 1366, 1372 (M.D.N.C. 1973). Specifically, a plaintiffs claim to loss of potential profits and damage to business reputation constitutes injury under G.S. Section l-75.4(4)(a). Vishay, 696 F.2d 1062. Furthermore, a defendant’s misuse of inside information amounts to an injury to a plaintiff. Hankins v. Somers, 39 N.C. App. 617, 621, 251 S.E.2d 640, 643, disc. rev. denied, 297 N.C. 300, 254 S.E. 920 (1979). These claimed injuries all occurred with the implementation of defendant’s solicitation and sales to North Carolina customers in the fall of 1997. By this time plaintiff had relocated its headquarters to North Carolina and could then claim injury to its person or property in the state, thus fulfilling the statutory requirement.
Next, these local injuries were the result of activities by defendant outside of North Carolina. Defendant engaged in sales and solicitation activities with North Carolinians in the fall of 1997 via catalog distribution by mail.
Finally, under G.S. Section 1.75-4(4)(a), a defendant need only be carrying on solicitation or services with North Carolinians “at or about the time of the injury.” Statutes used to establish personal jurisdiction are to be liberally construed in favor of establishing the existence of personal jurisdiction. Inspirational Network, Inc. v. Combs, 131 N.C. App. 231, 506 S.E.2d 754, 757 (1998). By its own admission defendant engaged in sales and solicitation activities with North Carolina residents during the fall of 1997. These activities contributed to plaintiffs alleged injury and are proximate enough in time to fulfill the statute’s requirements. Therefore, we conclude that personal jurisdiction over defendant exists under G.S. Section 1.75-4(4)(a).
Defendant also challenges plaintiffs assertion of jurisdiction under G.S. Section l-75.4(l)(d). Since personal jurisdiction has been established under G.S. Section l-75.4(4)(a) we need not address this issue.
We next consider whether the exercise of in personam jurisdiction satisfies due process, “not offending traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 102 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 283 (1940)). North Carolina exercises specific jurisdiction over a party when it exercises personal jurisdiction in a suit arising out of that party’s contacts within the state. Fraser v. Littlejohn, 96 N.C. App. 377, 383, 386 S.E.2d 230, 234 (1989). To establish specific jurisdiction, the court looks at “the relationship among the parties, the cause of action, and the forum state” to see if minimum contacts are established. ETR Corporation, 96 N.C. App. at 669, 386 S.E.2d at 768. The test for minimum contacts is not mechanical, but instead requires individual consideration of the facts in each case. Ciba-Geigy Corp. v. Barnett, 76 N.C. App. 605, 607, 334 S.E.2d 91, 92 (1985). The activity must be such that defendant could reasonably anticipate being brought into court there. World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 292, 62 L. Ed. 2d 490, 498 (1980). The factors to consider for minimum contacts include: (1) the quantity of the contacts; (2) the quality and nature of the contacts; (3) the source and connection of the cause of action to the contacts; (4) the interests of the forum state; and (5) the convenience to the parties. Marion v. Long, 72 N.C. App. 585, 587, 325 S.E.2d 300, 302, disc. rev. denied, 313 N.C. 604, 330 S.E.2d 612 (1985).
In the present case, defendant has engaged in numerous contacts with the state. Defendant mailed at least 1,937 of its sales
Litigating this matter in North Carolina serves both plaintiff’s and North Carolina’s best interests. Plaintiff is headquartered in North Carolina and performs all of its administrative functions in North Carolina. North Carolina has a manifest interest in providing its residents with a convenient forum for addressing injuries inflicted by parties out of state. Id. In addition, defendant has failed to assign error to Conclusion of Law No. 5, holding that no substantial injustice would result from defendant litigating this case in North Carolina. We hold that defendant has made sufficient minimum contacts to justify the exercise of personal jurisdiction in this state without violating due process.
Affirmed.
Judges TIMMONS-GOODSON and HORTON concur.