Green Thumb Industry v. Warren County Nursery

264 S.E.2d 753 (1980)

GREEN THUMB INDUSTRY OF MONROE, INC. v. WARREN COUNTY NURSERY, INC.

No. 7920SC894.

Court of Appeals of North Carolina.

April 15, 1980.

*755 William H. Helms, Monroe, for plaintiff-appellant.

Griffin, Caldwell & Helder by H. Ligon Bundy, Monroe, for defendant-appellee.

ERWIN, Judge.

The only question for our determination is: Did the trial court commit error by allowing defendant's motion to dismiss pursuant to G.S. 1A-1, Rule 12(b)(2), of the Rules of Civil Procedure for lack of personal jurisdiction over defendant? For the reasons that follow, we answer, "No," and affirm the judgment entered by the trial court.

The resolution of the question of in personam jurisdiction involves a two-fold determination: (1) do the statutes of North Carolina permit the courts of the jurisdiction to entertain this action against defendant, and (2) does the exercise of this power by the North Carolina courts violate due process of law. Dillon v. Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977). The grounds on which a court may assert personal *756 jurisdiction over a person are set forth in G.S. 1-75.4.

GS 1-75.4(2) provides:

"§ 1-75.4. Personal jurisdiction, grounds for generally.A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j) of the Rules of Civil Procedure under any of the following circumstances: . . . . . (2) Special Jurisdiction Statutes.In any action which may be brought under statutes of this State that specifically confer grounds for personal jurisdiction."

G.S. 55-145 is just such a special jurisdiction statute; it reads in pertinent part as follows:

"§ 55-145. Jurisdiction over foreign corporations not transacting business in this State.(a) Every foreign corporation shall be subject to suit in this State, whether or not such foreign corporation is transacting or has transacted business in this State and whether or nor it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows: . . . . . (2) Out of any business solicited in this State by mail or otherwise if the corporation has repeatedly so solicited business, whether the orders or offers relating thereto were accepted within or without the State; or (3) Out of the production, manufacture, or distribution of goods by such corporation with the reasonable expectation that those goods are to be used or consumed in this State and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed, or sold or whether or not through the medium of independent contractors or dealers . . ."

It is generally accepted that North Carolina's long-arm statute (G.S. 1-75.4) should be liberally construed in favor of finding personal jurisdiction, subject, of course, to due process limitations. Leasing Corp. v. Equity Associates, 36 N.C.App. 713, 245 S.E.2d 229 (1978). In a case considering G.S. 55-145(a)(1), Byham v. House Corp., 265 N.C. 50, 57, 143 S.E.2d 225, 232 (1965), our Supreme Court stated, citing McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957): "It is sufficient for the purposes of due process if the suit is based on a contract which has substantial connection with the forum state." See also Chadbourn, Inc. v. Katz, 285 N.C. 700, 208 S.E.2d 676 (1974); Parris v. Disposal, Inc., 40 N.C.App. 282, 253 S.E.2d 29, dis. rev. denied, 297 N.C. 455, 256 S.E.2d 808 (1979). The due process doctrine requires that in order to subject this nonresident corporation to in personam jurisdiction, it must have certain minimum contacts with this State to the extent that the suit does not offend "`traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95, 102 (1945).

Application of the minimum contact rule varies with the quality and nature of defendant's activities, but it is essential in each case that there be some act by which defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958); Parris v. Disposal, Inc., supra. The existence of minimal contacts is a question of fact. Chadbourne, Inc. v. Katz, supra.

Here, the evidence showed, and the court found: that defendant does not have any salesman who solicits in North Carolina; that defendant, through its routine advertising, mails its price list, which includes some North Carolina addresses; and that over the last two years, plaintiff has received four magazines through the United States mail, including "American Nurseryman" and "Nursery Business," which magazines are published for people in the nursery business. These magazines include advertisements for defendant's nursery. G. G. *757 Gilmore, president of Gilmore Plant and Bulb, testified that it is his customary practice to drive one of his vehicles to Tennessee to pick up his order, "but he occasionally receives a portion of his order either by UPS or common carrier at his place of business in Julian, North Carolina. This occurs maybe once per year. Most of Mr. Gilmore's orders are placed by telephone from Julian, North Carolina to Warren County Nursery in Tennessee."

One other North Carolina company had placed orders with defendant by telephone from Gastonia to Tennessee, was billed by defendant, and had paid by checks mailed from North Carolina and drawn on North Carolina banks. Plaintiff has done business with defendant for six years and has placed six or seven orders with defendant of which four were placed by plaintiff's president while in Tennessee. Others were placed by plaintiff's president over the telephone. The order for the shipment in question was placed by plaintiff with defendant at its place of business in Tennessee. The findings of the trial court are supported by competent evidence and are, therefore, conclusive on appeal. Goldman v. Parkland, 277 N.C. 223, 176 S.E.2d 784 (1970).

The record in this case does not show sufficient contacts on the part of defendant in North Carolina for the courts of this State to acquire in personam jurisdiction over it. The judgment entered by the trial court was in all respects proper.

Judgment affirmed.

ROBERT M. MARTIN and CLARK, JJ., concur.