Watson v. Graf Bae Farm, Inc. ( 1990 )

392 S.E.2d 651 (1990) 99 N.C. App. 210

Dr. Robert WATSON and Laurie Watson, Plaintiffs,
v.
GRAF BAE FARM, INC., Defendant.

No. 8926DC878.

Court of Appeals of North Carolina.

June 19, 1990.

Knox, Knox & Freeman by H. Edward Knox, Allen C. Brotherton, and Bobby L. Bollinger, Jr., Charlotte, for plaintiffs-appellees.

Law Offices of Chandler & deBrun by W. James Chandler, Charlotte, for defendant-appellant.

LEWIS, Judge.

Defendant appeals this case solely on the issue of whether there were sufficient minimum contacts to support in personam jurisdiction. The existence of minimum contacts is a question of fact and is controlled by the definition of "minimum contacts" found in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945).

[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." ... "Presence" in the state in this sense has never been doubted when the activities of the corporation there have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no consent to be sued or authorization to an agent to accept service of process has been given.

Id. at 316-17, 66 S. Ct. at 158-59, 90 L.Ed. at 102. (Citations omitted.)

The North Carolina "long-arm statute" which controls in this case is N.C.G.S. § 1-75.4.

A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action ... under any of the following circumstances:

.....

(5) Local Services, Goods or Contracts.— In any action which:

.....

c. Arises out of a promise, made anywhere to the plaintiff ... by the defendant to deliver or receive within this State goods ... or other things of value....

It is clear both from the wording of this statute and applicable case law that the provisions of this statute are to be liberally construed in favor of finding personal jurisdiction, consistent with due process limitations.

The criteria for determining whether minimum contacts are present include: (1) the quantity of the contacts, (2) the nature and quality of the contacts, (3) the source and connection of the cause of action with those contacts, (4) the interest of the forum state, and (5) convenience to the parties. Phoenix America Corp. v. Brissey, 46 N.C.App. 527, 530-31, 265 S.E.2d 476, 479 (1980), quoting Aftanase v. Economy Baler Co., 343 F.2d 187, 197 (8th Cir.1965). This Court recently decided, in a case similar in several respects to the case at bar, that the defendant had made sufficient minimum contacts with the State of North Carolina to satisfy due process. New Bern Pool & Supply Co. v. Graubart, 94 N.C.App. 619, 381 S.E.2d 156 (1989), aff'd, 326 N.C. 480, 390 S.E.2d 137 (1990). An examination of the facts in the case at bar in light of the factors cited above leads to the conclusion that defendant corporation made sufficient minimum contacts with this state sufficient to support in personam jurisdiction.

This cause of action arose directly from defendant's refusal to allow the return of the horse and refunding the money. When "the defendant has `purposefully directed' his activities at residents of the forum ... and the litigation results from alleged injuries that `arise out of or relate to' those activities," then minimum contacts are more likely to be found. Brickman v. Codella, 83 N.C.App. 377, 384, 350 S.E.2d 164, 166 (1986), quoting Burger King v. Rudzewicz, 471 U.S. 462, 472, 105 S. Ct. 2174, 2182, 85 L. Ed. 2d 528, 541 (1985).

Defendant's contacts with North Carolina which subject it to in personam jurisdiction are as follows:

(1) Plaintiffs first became aware of the sale of show horses by defendant through a magazine advertisement in a nationally distributed magazine which was sold in North Carolina. See Keeton v. Hustler Magazine, 465 U.S. 770, 104 S. Ct. 1473, 79 L. Ed. 2d 790 (1984).

(2) A condition of the sale was that plaintiffs have the horse examined in North Carolina by a veterinarian to determine if the horse is suitable for plaintiffs' intended purposes. This pre-purchase examination of the horse was contemplated by the parties from the very beginning of the transaction.

(3) The final act of the contract, the veterinarian's pre-purchase examination of the horse, took place in North Carolina. The contract was contingent upon this final act. However, the veterinarian did not approve the horse for plaintiffs' intended purposes, so the condition was not fulfilled. See N.C. G.S. §§ 25-2-601, 25-2-602.

(4) The horse was delivered to North Carolina as part of the contract.

We hereby affirm the judgment of the trial court.

Affirmed.

WELLS and COZORT, JJ., concur.