JDG Envtl., LLC v. BJ & Assocs. ( 2023 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA21-692
Filed 17 October 2023
Carteret County, No. 20 CVS 436
JDG ENVIRONMENTAL, LLC d/b/a ADVANTACLEAN OF OKC, Plaintiff,
v.
BJ & ASSOCIATES, INC. d/b/a G.A. JONES CONSTRUCTION and THE COVES
AT NEWPORT II ASSOCIATION, INC., Defendants.
Appeal by Defendant from order entered 26 July 2021 by Judge Clinton Rowe
in Carteret County Superior Court. Heard in the Court of Appeals 25 May 2022.
Bell, Davis, & Pitt, P.A., by Joshua B. Durham, for Plaintiff-Appellant.
Harvell & Collins, P.A., by Wesley A. Collins, for Defendant-Appellee BJ &
Associates, Inc.
White & Allen, P.A., by Brian Z. Taylor and Christopher J. Waivers, for
Defendant-Appellee The Coves At Newport II Association, Inc.
CARPENTER, Judge.
JDG Environmental, LLC (“Plaintiff”) appeals from the superior court’s grant
of summary judgment in favor of BJ & Associates, Inc. (“Defendant BJ”) and The
Coves at Newport II (“Defendant Coves”).1 On appeal, Plaintiff asserts the superior
court prematurely granted summary judgment because Plaintiff maintained an
opportunity to obtain a certificate of authority until the beginning of trial. After
1 We will refer to Defendant BJ and Defendant Coves collectively as “Defendants.”
JDG ENVTL., LLC V. BJ & ASSOCS., INC.
Opinion of the Court
careful review, we agree with Plaintiff. Therefore, we vacate the superior court’s
order and remand this case for further proceedings.
I. Factual & Procedural Background
On 13 September 2018, Hurricane Florence damaged Defendant Coves, a
residential community in Newport, North Carolina. In order to clean and repair the
community, Defendant Coves hired Defendant BJ. Defendant BJ hired Plaintiff, an
Oklahoma LLC, as a subcontractor on the project. On 15 May 2020, after a dispute
between Plaintiff and Defendant BJ concerning payment, Plaintiff initiated this
lawsuit, asserting claims for breach of contract and unjust enrichment.
On 24 March 2021, Plaintiff filed a motion for summary judgment. During a
hearing on the motion, Defendant BJ orally moved for summary judgment, arguing
that judgment should instead be entered against Plaintiff because Plaintiff lacked a
“certificate of authority,” a statutory requirement for certain out-of-state companies
to litigate in North Carolina courts. Indeed, Plaintiff had yet to obtain a certificate
of authority. But on 2 June 2021, Plaintiff obtained a certificate of authority. In an
order entered 26 July 2021, the superior court granted Defendant BJ’s motion for
summary judgment against Plaintiff. Plaintiff timely appealed from the superior
court’s order. Plaintiff has not challenged that it is was required to register as a
foreign entity based on the facts of this case; thus, the trial courts findings and
conclusions on this issue are binding on appeal.
II. Jurisdiction
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Opinion of the Court
This Court has jurisdiction pursuant to N.C. Gen. Stat. § 7A-27(b)(1) (2021).
III. Issues
The issues on appeal are whether the superior court erred by: (1) granting
Defendant BJ’s motion for summary judgment; (2) failing to make requisite findings
of fact in its order granting summary judgment; and (3) dismissing Plaintiff’s action
with prejudice.
IV. Standard of Review
“Our standard of review of an appeal from summary judgment is de novo; such
judgment is appropriate only when the record shows that ‘there is no genuine issue
as to any material fact and that any party is entitled to a judgment as a matter of
law.’” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (quoting
Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)).
V. Analysis
On appeal, Plaintiff argues the superior court erred in granting Defendants’
motion for summary judgment. Plaintiff asserts it had until trial to obtain a
certificate of authority, so granting Defendants summary judgment prematurely
deprived Plaintiff of its ability to do so. After careful review, we agree with Plaintiff:
The superior court erred in granting Defendants summary judgment.2
2 For this reason, we need not address Plaintiff’s arguments concerning whether the superior
court made the necessary findings of fact, or whether it was appropriate for the court to dismiss
Plaintiff’s case with prejudice.
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Opinion of the Court
Under N.C. Gen. Stat. § 57D-7-02:
No foreign LLC transacting business in this State without
permission obtained through a certificate of authority may
maintain any proceeding in any court of this State unless
the foreign LLC has obtained a certificate of authority prior
to trial. An issue arising under this subsection must be
raised by motion and determined by the trial judge prior to
trial.
N.C. Gen. Stat. § 57D-7-02(a) (2021). In other words, a foreign LLC must obtain a
certificate of authority before the trial of its case in North Carolina. See N.C. Gen.
Stat. § 57D-7-02(a).
Here, Plaintiff is a foreign LLC transacting business in North Carolina.
Therefore, Plaintiff is required to obtain a certificate of authority prior to trial. See
N.C. Gen. Stat. § 57D-7-02(a). Because Plaintiff lacked a certificate of authority at
the summary-judgment stage, the superior court granted Defendant BJ’s motion for
summary judgment, ending the litigation and Plaintiff’s ability to obtain the requisite
certificate.
Procedurally, summary judgment is “a judgment as a matter of law.” N.C.
Gen. Stat. § 1A-1, Rule 56(c) (2021). When summary judgment is granted on an issue,
that issue is not tried: Receiving summary judgment has the same effect as winning
at trial—but without going to trial. See Kessing v. Nat’l Mortg. Corp., 278 N.C. 523,
533, 180 S.E.2d 823, 829 (1971) (“The purpose of summary judgment can be
summarized as being a device to bring litigation to an early decision on the merits
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JDG ENVTL., LLC V. BJ & ASSOCS., INC.
Opinion of the Court
without the delay and expense of a trial where it can be readily demonstrated that no
material facts are in issue.”).
The obligation to obtain a certificate of authority is statutory. See N.C. Gen.
Stat. § 57D-7-02(a). In statutory interpretation, “[w]e take the statute as we find it.”
Anderson v. Wilson, 289 U.S. 20, 27, 53 S. Ct. 417, 420, 77 L. Ed. 1004, 1010 (1933).
This is because “a law is the best expositor of itself.” Pennington v. Coxe, 6 U.S. (2
Cranch) 33, 52, 2 L. Ed. 199, 205 (1804). And when examining statutes, words that
are undefined by the legislature “must be given their common and ordinary meaning.”
In re Clayton-Marcus Co., 286 N.C. 215, 219, 210 S.E.2d 199, 202–03 (1974).
Again, N.C. Gen. Stat. § 57D-7-02 states “[n]o foreign LLC transacting
business in this State without permission obtained through a certificate of authority
may maintain any proceeding in any court of this State unless the foreign LLC has
obtained a certificate of authority prior to trial.” N.C. Gen. Stat. § 57D-7-02(a)
(emphasis added). The phrase “prior to trial” is not defined in the statute. See N.C.
Gen. Stat. § 57D-7-02. Therefore, the phrase must be given its “common and ordinary
meaning.” See In re Clayton-Marcus Co., 286 N.C. at 219, 210 S.E.2d at 202–03.
Given its ordinary meaning, “prior to trial” means exactly that: any time before
the trial commences. Generally, a trial commences when a jury is empaneled. Pratt
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Opinion of the Court
v. Bishop, 257 N.C. 486, 504, 126 S.E.2d 597, 610 (1962).3 If the General Assembly
wants “prior to trial” to mean something other than the generally understood
meaning, it must say so. See Appeal of Clayton-Marcus Co., Inc., 286 N.C. at 219,
210 S.E.2d at 202. Otherwise, we must “take the statute as we find it.” See Anderson,
289 U.S. at 27, 53 S. Ct. at 420, 77 L. Ed. at 1010.
We must also give the last sentence of N.C. Gen. Stat. § 57D-7-02 its ordinary
meaning. It reads as follows: “An issue arising under this subsection must be raised
by motion and determined by the trial judge prior to trial.” N.C. Gen. Stat. § 57D-7-
02(a) (emphasis added). In North Carolina courts, the judge who hears a summary-
judgment motion may not be the judge who presides over the trial. In fact, this is
quite common. So, when the General Assembly says the “trial judge,” we must
assume they meant the judge presiding over the trial, and not the judge hearing a
summary-judgment motion. See N.C. Gen. Stat. § 57D-7-02(a); In re Clayton-Marcus
Co., 286 N.C. at 219, 210 S.E.2d at 202–03.
Harold Lang Jewelers, Inc. v. Johnson illustrates how this works in practice.
156 N.C. App. 187, 576 S.E.2d 360 (2003). In Harold Lang, this Court wrestled with
N.C. Gen. Stat. § 55-15-02(a) (2021), the corporation analogue to N.C. Gen. Stat. §
57D-7-02. Id. at 189, 576 S.E.2d at 361; see also N.C. Gen. Stat. § 55-15-02(a) (“No
3 Alternatively, in a bench trial, trial commences when a judge “begins to hear evidence.”See State
v. Brunson, 96 N.C. App. 347, 350–51, 385 S.E.2d 542, 544 (1989). Our analysis, however, remains
the same because in a jury trial, the jury must be empaneled before it can hear evidence. In other
words, whatever is “prior to” a jury trial is also “prior to” a bench trial.
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Opinion of the Court
foreign corporation transacting business in this State without permission obtained
through a certificate of authority under this Chapter . . . shall be permitted to
maintain any action or proceeding in any court of this State unless the foreign
corporation has obtained a certificate of authority prior to trial.”). This Court stated:
“On January 7, 2002, the case was called for trial. At that time, Johnson orally raised
the defense of Lang’s failure to obtain a certificate of authority and requested a
hearing on that issue. After hearing evidence and argument, the district court
granted the motion and dismissed Lang’s action.” Harold Lang, 156 N.C. App. at
188, 576 S.E.2d at 361. Lang lacked a certificate of authority, and this Court found
“the trial court acted within its discretion when it addressed this dispositive issue as
it did—prior to commencing trial . . . .” Id. at 189, 576 S.E.2d at 361. In Harold Lang,
the trial judge properly ruled on the motion. Id. at 189, 576 S.E.2d at 361.
Likewise, this is how N.C. Gen. Stat. § 57D-7-02—the LLC analogue to N.C.
Gen. Stat. § 55-15-02(a)—operates. Failure to obtain a certificate of authority “must
be raised by motion and determined by the trial judge prior to trial.” N.C. Gen. Stat.
§ 57D-7-02(a). Summary judgment is not necessarily determined by the trial judge.
And the plain language of N.C. Gen. Stat. § 57D-7-02 requires the judge presiding
over trial—not summary judgment—to determine whether the non-moving party
obtained a certificate of authority. See Harold Lang, 156 N.C. App. at 188, 576 S.E.2d
at 361; N.C. Gen. Stat. § 57D-7-02(a).
Here, Plaintiff could have obtained a certificate any time before the trial court
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Opinion of the Court
empaneled a jury—which includes time after the summary-judgment stage. See
Pratt, 257 N.C. at 504, 126 S.E.2d at 610. And Plaintiff did so. Regardless, if
Defendant BJ wanted a determination of whether Plaintiff obtained a certificate, it
was required to raise a motion to the trial judge, not the summary-judgment judge.
See Harold Lang, 156 N.C. App. at 188, 576 S.E.2d at 361; N.C. Gen. Stat. § 57D-7-
02(a). Defendant BJ did not do so. Thus, granting Defendant BJ’s summary-
judgment motion deprived Plaintiff of its legislatively allotted time to obtain a
certificate and infringed on the trial judge’s statutory authority to determine
Plaintiff’s compliance with N.C. Gen. Stat. § 57D-7-02(a).
In Leasecomm, this Court also addressed N.C. Gen. Stat. § 55-15-02(a). See
Leasecomm Corp. v. Renaissance Auto Care, Inc., 122 N.C. App. 119, 122, 468 S.E.2d
562, 564 (1996). The Leasecomm Court did not directly address the issue before us:
whether a court may grant summary judgment against a non-moving party because
the non-moving party lacks a certificate of authority. The issue before the Leasecomm
Court was whether a court could grant summary judgment to a moving party who
lacked a certificate of authority. See id. at 121, 468 S.E.2d at 564. Regardless of the
precise issue in Leasecomm, the Court’s reasoning concerning N.C. Gen. Stat. § 55-
15-02(a) supports our plain reading of N.C. Gen. Stat. § 57D-7-02(a). See id. at 122,
468 S.E.2d at 563. The Court held that under N.C. Gen. Stat. § 55-15-02(a), a moving
party lacking a certificate of authority cannot prevail at summary judgment without
first obtaining the required certificate of authority. See id. at 122, 468 S.E.2d at 564.
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Opinion of the Court
The Leasecomm holding is based on this premise: If a court grants summary
judgment to a moving party that lacks a certificate of authority, the court
prematurely assumes the moving party will gain a certificate before trial. See id. at
122, 468 S.E.2d at 564. Although our issue was not before the Leasecomm Court, it
follows that if a lower court grants summary judgment because the non-moving party
lacks a certificate of authority, the court also prematurely assumes the non-moving
party will not gain one before trial. See id. at 122, 468 S.E.2d at 564. In other words,
just as a moving party lacking a certificate of authority cannot prevail at summary
judgment without first obtaining the required certificate of authority, a moving party
cannot prevail at summary judgment merely because the non-moving party lacks a
certificate of authority. See id. at 122, 468 S.E.2d at 564. This is correct because the
trial judge must make the certificate-of-authority determination, and both scenarios
take the determination away from the trial judge. See id. at 122, 468 S.E.2d at 564;
Harold Lang, 156 N.C. App. at 188, 576 S.E.2d at 361; N.C. Gen. Stat. § 57D-7-02(a).
Here, when the superior court indicated in open court its intention to grant
Defendant BJ’s motion for summary judgment, the court prematurely assumed
Plaintiff would not satisfy N.C. Gen. Stat. § 57D-7-02 before trial. See Leasecomm,
122 N.C. App. at 122, 468 S.E.2d at 564. And notably, before the court entered its
written order granting Defendant BJ’s motion for summary judgement on 26 July
2021, Plaintiff obtained a certificate of authority. So not only did the superior court
not have the authority to grant summary judgment; it purported to do so after
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Opinion of the Court
Plaintiff actually obtained the requisite certificate of authority. See N.C. Gen. Stat.
§ 57D-7-02(a).
Accordingly, the superior court erred in granting Defendants summary
judgment, rather than allowing the trial judge to make the certificate-of-authority
determination. Such a judgment contradicts the plain text of the statute and our
caselaw. See N.C. Gen. Stat. § 57D-7-02; Leasecomm, 122 N.C. App. at 122, 468
S.E.2d at 564; Harold Lang, 156 N.C. App. at 188, 576 S.E.2d at 361; Pratt, 257 N.C.
at 504, 126 S.E.2d at 610.
VI. Conclusion
We hold the superior court’s entry of summary judgment against Plaintiff was
improper. Therefore, we vacate the associated order and remand this case to the
lower court. Because the court erred in granting summary judgment, we need not
consider whether the requisite findings were made, or whether the case should have
been dismissed with or without prejudice.
VACATED AND REMANDED.
Judge ARROWOOD concurs.
Judge MURPHY dissents in a separate opinion.
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No. COA21-692 – JDG Envtl., LLC v. BJ & Assocs., Inc.
MURPHY, Judge, dissenting.
While I would also reverse the order of the trial court, I dissent from the
Majority’s interpretation of N.C.G.S. § 57D-7-02(a) and its conclusions as to the
procedural steps that follow the order’s reversal. The contention that N.C.G.S. § 57D-
7-02(a) allows an uncertified business plaintiff until the moment the jury is
empaneled to obtain a certificate of authority is not only impossible to reconcile with
the plain text of the whole statute, but also squarely contradicts our holding in
Leasecomm, conflicts with the official comment to the analogous certification statute
regarding corporations, and undermines the statute’s own function.
N.C.G.S. § 57D-7-02(a) reads as follows:
No foreign LLC transacting business in this State without
permission obtained through a certificate of authority may
maintain any proceeding in any court of this State unless
the foreign LLC has obtained a certificate of authority prior
to trial. An issue arising under this subsection must be
raised by motion and determined by the trial judge prior to
trial.
N.C.G.S. § 57D-7-02(a) (2022). N.C.G.S. § 57D-7-02(a) thus contains two provisions
pertaining to the timing of certification relative to trial: first, it makes maintaining a
proceeding in this State contingent upon “obtain[ing] a certificate of authority prior
to trial”; and, second, it provides that “[a]n issue arising under this subsection must
be raised by motion and determined by the trial judge prior to trial.” Id. As the
Majority explains, both of these provisions must “be given their common and ordinary
meaning.” Appeal of Clayton-Marcus Co., Inc., 286 N.C. 215, 219 (1974).
JDG ENVTL., LLC V. BJ & ASSOCS., INC.
Murphy, J., dissenting
“Prior to trial” means any time before trial commences, and trial commences
at the moment the jury is empaneled. See Pratt v. Bishop, 257 N.C. 486, 504 (1962).
The Majority, without specific analysis, augments this explanation with the unstated
proposition that an uncertified business Plaintiff is statutorily entitled to a period
that runs until the jury is empaneled to receive the certificate. Therefore, as the
Majority reads the statute, the trial court may not grant summary judgment against
an uncertified business plaintiff until the moment the jury is empaneled. And, using
the same interpretation, the plain meaning of the requirement that “[a]n issue arising
under [N.C.G.S. § 57D-7-02(a)] must be raised by motion and determined by the trial
judge prior to trial” is that the window of time allotted to trial judges to rule on a
motion concerning a certification issue is until the moment the jury is empaneled.
N.C.G.S. § 57D-7-02(a) (2022).
This interpretation results in a total impasse: the Majority’s reading of the
statute makes it impermissible for the trial court to ever rule on a motion concerning
a business plaintiff’s lack of certification. Summary judgment, it holds, is rendered
“prematurely” if entered against a plaintiff before the moment the jury is empaneled.
See supra. Likewise, the trial court is statutorily stripped of its ability to render any
such judgment the moment the jury is empaneled. Following the Majority’s logic to
its necessary end, the result is a totally unenforceable statutory scheme.
Perhaps realizing the absurdity of this reading, we have, on multiple occasions
in the past, permitted trial courts to enter summary judgment against an uncertified
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Murphy, J., dissenting
business plaintiff prior to trial. In Harold Lang Jewelers, Inc. v. Johnson, for
example, we affirmed the dismissal of an action, prior to trial, by a corporation that
failed to satisfy the analogous certification requirement arising under N.C.G.S. § 55-
15-02(a):
[The defendant] argued that [the uncertified corporation]
could not sue in a North Carolina court because [it] was
transacting business in the state without a certificate of
authority to do so. The trial court agreed and dismissed
the suit prior to trial.
....
[The corporation] contends that the trial court erred when
it dismissed the action, arguing that the court should have
continued the case to permit [it] to obtain the requisite
certificate of authority. The applicable statute, [N.C.G.S.]
§ 55-15-02, does not specify the procedure in the event of
failure to obtain a certificate of authority. The statute
simply indicates that an action cannot be maintained
unless the certificate is obtained prior to trial. [N.C.G.S.]
§ 55-15-02(a). [The corporation] has not cited, nor have we
found, a case where a continuance has been granted by a
court in these circumstances. Moreover, [the corporation]
was aware that [the defendant’s] motion was pending and
could have obtained the certificate in the year and a half
that passed between the filing of the motion and the court’s
dismissal of the case. In the absence of statutory or other
authority dictating a continuance, we hold that the trial
court acted within its discretion in dismissing the action.
Harold Lang Jewelers, Inc. v. Johnson, 156 N.C. App. 187, 188, 192, disc. rev. denied,
357 N.C. 458 (2003); see also N.C.G.S. 55-15-02(a) (2022) (“No foreign corporation
transacting business in this State without permission obtained through a certificate
of authority under this Chapter or through domestication under prior acts shall be
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Murphy, J., dissenting
permitted to maintain any action or proceeding in any court of this State unless the
foreign corporation has obtained a certificate of authority prior to trial. An issue
arising under this subsection must be raised by motion and determined by the trial
judge prior to trial.”). Moreover, in Leasecomm Corp. v. Renaissance Auto Care, Inc.,
we reversed the determination of a trial court that denied a motion for summary
judgment against an uncertified corporate plaintiff under the same statute:
Defendants argue that the trial court erred in granting
plaintiff’s summary judgment motion because plaintiff
lacked authority to maintain an action in North Carolina
to enforce the foreign judgment. We agree.
....
[The] plaintiff had no authority to maintain an action to
enforce its foreign judgment in North Carolina because [the
plaintiff’s assignor] has never been granted authority to do
business here . . . . Accordingly, we hold that the trial court
erred in granting summary judgment for plaintiff and
denying defendant’s summary judgment motion.
Leasecomm Corp. v. Renaissance Auto Care, Inc., 122 N.C. App. 119, 121-22 (1996).
The Majority cites Leasecomm for the proposition that, “[i]f a trial court grants
summary judgment to a moving party that lacks a certificate of authority, the trial
court prematurely assumes the moving party will gain a certificate before trial”; and,
by extension, that “if a trial court grants summary judgment because the non-moving
party lacks a certificate of authority, the trial court prematurely assumes the non-
moving party will not gain one before trial.” Neither of these supposed holdings is
apparent from the face of Leasecomm, and the attempt to extrapolate them from the
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Murphy, J., dissenting
opinion obscures its actual, unambiguous holding: that a business plaintiff seeking to
register a foreign judgment in North Carolina should, prior to trial, have summary
judgment rendered against it if it fails to comply with relevant certification
requirements. Leasecomm, 122 N.C. App. at 122. The Majority’s contention that
“[t]he Leasecomm Court did not directly address . . . whether a court may grant
summary judgment against a non-moving party because the non-moving party lacks
a certificate of authority” obfuscates the fact that the panel addressing Leasecomm
treated the grant and denial of summary judgment as two sides of the same legal
issue, and its holding is no less binding as to the former than it is the latter.
Similar problems exist with its reading of Harold Lang. The Majority cites
Harold Lang for its position that the incorrect official ruled on Defendant’s motion
and purportedly as an example of how its own interpretation operates in practice, see
supra, but Harold Lang is fully irreconcilable with its holding. Despite directly
quoting Harold Lang’s holding that “the trial court acted within its discretion when
it addressed this dispositive issue . . . prior to commencing trial[,]” Harold Lang, 156
N.C. App. at 189, the Majority’s interpretation of N.C.G.S. § 57D-7-02(a) would
necessarily dictate that a trial court may not dismiss an uncertified business
plaintiff’s case prior to trial and that the trial court has no discretion to do so. See
supra (“[W]hen the [S]uperior [C]ourt indicated in open court its intention to grant
Defendant BJ’s motion for summary judgment, the court prematurely assumed
Plaintiff would not satisfy [N.C.G.S.] § 57D-7-02 before trial. . . . [N]ot only did the
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Murphy, J., dissenting
[S]uperior [C]ourt not have the authority to grant summary judgment; it purported
to do so after Plaintiff actually obtained the requisite certificate of authority.”). With
both Harold Lang and Leasecomm, the Majority’s attempts to harmonize our
precedent with its holding misses the forest for the trees, passing over core procedures
and applications of law that contradict its interpretation of N.C.G.S. § 57D-7-02 in
favor of magnifying minutiae.
Neither our caselaw nor the meaning of the statute as a whole are reconcilable
with the Majority’s holding. Neither still can the Majority’s holding account for the
procedures described in the official comment to N.C.G.S. § 55-15-02, which allow an
optional stay of proceedings in the event that a foreign corporate plaintiff is deemed
to require certification under circumstances analogous to those in N.C.G.S. § 57D-7-
02. See N.C.G.S. § 55-15-02 (2022) (official comment) (“[S]ection 15.02(c) authorizes
a court to stay a proceeding to determine whether a corporation should have qualified
to transact business and, if it concludes that qualification is necessary, it may grant
a further stay to permit the corporation to do so.”). If uncertified business plaintiffs
were truly entitled to wait until trial to receive a certificate of authority, a stay of
proceedings in such circumstances would be mandatory, not permissive. Finally,
while less significant than the interpretive problems discussed above, there is serious
reason to doubt that the General Assembly would have drafted a statute affirmatively
requiring foreign businesses to comply with a certification requirement in order to
access the courts of this State, only to permit the gamesmanship that would
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Murphy, J., dissenting
inevitably arise from forbidding a trial court from taking action to ensure that the
requirement is met until the moment the jury is empaneled.4
Nothing in the language of N.C.G.S. § 57D-7-02(a) entitles an uncertified LLC
plaintiff to wait until the moment the jury is empaneled to receive a certificate of
authority or forbids a trial court from taking action to address such a plaintiff’s lack
of certification. Our caselaw and the analogous procedure described in the official
comment to N.C.G.S. § 55-15-02 is instead consistent with a flexible, discretionary
approach in which a trial court may, prior to trial, take appropriate action to address
a plaintiff’s lack of certification. At times, that may result in a stay of proceedings to
allow the plaintiff time to obtain a certificate of authority. See id; cf. Kyle & Assocs.,
Inc. v. Mahan, 161 N.C. App. 341, 344 (2003) (affirming the trial court’s denial of the
defendant’s motion to strike on the basis of the plaintiff corporation’s lack of
certification where the plaintiff received its certificate prior to the hearing on the
motion), aff’d, 359 N.C. 176 (2004). At others, dismissal or summary judgment may
be appropriate. Harold Lang, 156 N.C. App. at 192; Leasecomm, 122 N.C. App. at
122. In any event, these are matters we have previously recognized as within the
discretion of our trial courts so that they can ensure foreign business plaintiffs do not
4 Indeed, even setting aside the conflict the Majority’s interpretation would create with the
statutorily mandated timeframe in which a trial court must resolve certification issues, there are
cases—like Leasecomm itself—which have no realistic possibility of ever reaching trial. See
Leasecomm, 122 N.C. App. 119, 121 (concerning the registration of a foreign judgment). If a trial
court were not permitted to dismiss until the empanelment of the jury, a foreign business plaintiff
would be functionally exempt from certification requirements in any such case.
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Murphy, J., dissenting
eschew our State’s certification requirements before “utilizing the courts of North
Carolina.” Kyle & Assocs., 161 N.C. App. at 343. While permitting such an exercise
of discretion in no way conflicts with such plaintiffs’ statutory obligation to “obtain[]
a certificate of authority prior to trial[,]” N.C.G.S. § 57D-7-02(a) (2022), a reading of
the statute that ties the hands of our trial courts renders the entirety of N.C.G.S. §
57D-7-02 a dead letter.
In an attempt to evade the cascade of irreconcilable conflicts with our existing
law arising from its interpretation of N.C.G.S. § 57D-7-02(a), the Majority accepts
perhaps the most dubious of Plaintiff’s arguments: that the “trial judge” should have
resolved the matter rather than what Plaintiff terms the “motions judge.” Even
setting aside the fact that all of the aforementioned problems with its reading of
N.C.G.S. § 57D-7-02(a) still exist—Harold Lang, as explained previously, would be
incorrectly decided by the Majority’s logic since the trial court dismissed that
plaintiff’s case before the jury was empaneled, see Harold Lang, 156 N.C. App. at189—neither the Majority nor Plaintiff point to any controlling cases in which a “trial
judge” has meant something other than a judge presiding over the trial court or has
constituted limiting language differentiating one judge from another within the same
tribunal. And, for Plaintiff’s part, the term “motions judge” has never appeared in
either our statutes or our caselaw.
What our caselaw does reveal is that, in in judicial writing and statutory
construction, just as in practice, “trial court” and “trial judge” are generally
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Murphy, J., dissenting
synonymous unless it is contextually clear that “judge” refers to the particular official
presiding over the court. See State v. Thompson, 254 N.C. App. 220, 223 (2017)
(marks omitted) (“In reviewing whether a trial judge abused his discretion, we
consider not whether we might disagree with the trial court, but whether the trial
court’s actions are fairly supported by the record.”); State v. VanCamp, 150 N.C. App.
347, 354 (2002) (“In Boykin, the trial court polled the jurors as to what they had seen,
as in the present case, the trial judge asked counsel if they had any questions and
they indicated that they did not have any.”); Matter of E.D., 372 N.C. 111, 119 (2019)
(citations omitted) (“In each of these cases we concluded that there was a statutory
mandate that automatically preserved an issue for appellate review when the
mandate was directed to the trial court either: (1) by requiring a specific act by the
trial judge; or (2) by requiring specific courtroom proceedings that the trial judge has
authority to direct.”); State v. Chandler, 376 N.C. 361, 366 (2020) (same). But see
Daughtridge v. N. Carolina Zoological Soc’y, Inc., 247 N.C. App. 33, 36 (2016) (marks
omitted) (“[O]ne trial judge may not reconsider and grant a motion for summary
judgment previously denied by another judge.”). Our best available legal definitions
recognize this interchangeability. Court, Black’s Law Dictionary 444 (11th Ed. 2019)
(emphasis added) (“A place where justice is judicially administered; the locale for
legal proceedings . . . . The judge or judges who sit on such a tribunal[.]”); Judge,
Black’s Law Dictionary 1005 (11th Ed. 2019) (emphasis added in part) (“A public
official appointed or elected to hear and decide legal matters in court; a judicial officer
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Murphy, J., dissenting
who has the authority to administer justice. . . . [I]n ordinary legal usage, the term
is limited to the sense of an officer who (1) is so named in his or her commission, and
(2) presides in a court. Judge is often used interchangeably with court.”).
Indeed, North Carolina has, for nearly four decades, rejected the Majority’s
understanding of the term “trial judge.” Between 1970 and 1975, we consistently
interpreted “trial judge,” as used in N.C.G.S. § 1-282 and Rule 50 of the Rules of
Practice in the Court of Appeals, to invalidate orders extending the time for service
of cases on appeal by judges who did not personally preside over the trials at issue.
See, e.g., State v. Lewis, 9 N.C. App. 323 (1970); State v. Baker, 8 N.C. App. 588 (1970);
Keyes v. Hardin Oil Co., 13 N.C. App. 645 (1972); State v. Taylor, 14 N.C. App. 703,
cert. denied, 281 N.C. 763 (1972); see also N.C.G.S. § 1-282 (1969) (“If it appears that
the case on appeal cannot be served within the time prescribed above, the trial judge
may, for good cause and after reasonable notice to the opposing party or counsel, enter
an order or successive orders extending the time for service of the case on appeal and
of the countercase or exceptions to the case on appeal.”). Our Supreme Court and
General Assembly abrogated these cases in 1975 with the repeal of N.C.G.S. § 1-282
and the enactments of Rule 36 of the Rules of Appellate Procedure and N.C.G.S. § 1-
283, clarifying that “trial judge,” for purposes of our interpretation, means “the judge
of [S]uperior [C]ourt or of [D]istrict [C]ourt from whose order or judgment an appeal
has been taken . . . .” N.C.G.S. § 1-283 (2022); cf. N.C. R. App. P. 36(a)(1)-(2) (2023)
(“The judge who entered the judgment, order, or other determination from which
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Murphy, J., dissenting
appeal was taken . . .”).5 The Majority’s resurrection of this Court’s long-corrected,
half-century-old interpretation of “trial judge” solves none of the outstanding
conceptual problems with its reading of N.C.G.S. § 57D-7-02 and presents an open
invitation for appellants to engage in the type of gamesmanship the 1975
clarifications sought to avoid.
Although the Majority’s analysis of N.C.G.S. § 57D-7-02 and perplexing
readings of Leasecomm and Harold Lang do not, in my view, justify our holding, I
agree the trial court’s order should be reversed because, in order for Plaintiff to have
been required to obtain a certificate of authority at all, the trial court must have found
sufficient facts on the Record to support its conclusion that Plaintiff was actually
5 N.C.G.S. § 1-283, entitled “[t]rial judge empowered to settle record on appeal; effect of
leaving office or of disability[,]” reads in full as follows:
Except as provided in this section, only the judge of superior court or
of district court from whose order or judgment an appeal has been
taken is empowered to settle the record on appeal when judicial
settlement is required. A judge retains power to settle a record on
appeal notwithstanding he has resigned or retired or his term of office
has expired without reappointment or reelection since entry of the
judgment or order. Proceedings for judicial settlement when the judge
empowered by this section to settle the record on appeal is
unavailable for the purpose by reason of death, mental or physical
incapacity, or absence from the State shall be as provided by the rules
of appellate procedure.
N.C.G.S. § 1-283 (2022). “Although the title given to a particular statutory provision is not
controlling, it does shed some light on the legislative intent underlying the enactment of that
provision.” State v. James, 371 N.C. 77, 87 (2018). Here, the recapitulative function of N.C.G.S. § 1-
283’s title signals that, since the General Assembly and our Supreme Court corrected our
jurisprudence with respect to the term “trial judge” in 1975, “trial judge” means “the judge of
superior court or of district court from whose order or judgment an appeal has been taken . . . .”
N.C.G.S. § 1-283 (2022); see also id. (marks omitted) (“[E]ven when the language of a statute is plain,
the title of an act should be considered in ascertaining the intent of the legislature.”).
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Murphy, J., dissenting
“transacting business” in North Carolina. Here, as the trial court’s findings on the
Record did not support a determination that Plaintiff was transacting business in
North Carolina, I would reverse the trial court’s order on that basis.
“[T]ransacting business in this State[,]” for purposes of N.C.G.S. § 57D-7-02(a),
requires more than an isolated act or acts. N.C.G.S. § 57D-7-02(a) (2022). Without
more,
a foreign LLC is not considered to be transacting business
in this State for the purposes of this Chapter by reason of .
. . [m]aintaining or defending any proceeding . . . [,]
[t]ransacting business in interstate commerce[,] [or]
[c]onducting an isolated transaction completed within a
period of six months but not repeated transactions of a
similar nature.
N.C.G.S. § 57D-7-01(b)(1), (8), (9) (2022); see also Quantum Corporate Funding, Ltd.
v. B.H. Bryan Bldg. Co., 175 N.C.App. 483, 486 (2006) (remarking that, with respect
to the analogous registration requirements for corporations, “a foreign corporation
need not obtain a certificate of authority in order to maintain an action or lawsuit so
long as the company is not otherwise transacting business in this State”). Rather,
“[o]ur Court has interpreted transacting business to ‘require the engaging in, carrying
on or exercising, in North Carolina, some of the functions for which the [business]
was created.’” Harbin Yinhai Tech. Dev. Co. v. Greentree Fin. Grp., Inc., 196 N.C. App.
615, 624 (2009) (quoting Harold Lang, 156 N.C. App. at 190). “The activities carried
on by a corporation in North Carolina must be substantial, continuous, systematic,
and regular” to qualify, and “[t]ypical conduct requiring a certificate of authority
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Murphy, J., dissenting
includes maintaining an office to conduct local intrastate business, selling personal
property not in interstate commerce, entering into contracts relating to the local
business or sales, and owning or using real estate for general [business]
purposes.” Id.In its findings of fact, the trial court noted that “Plaintiff entered a contract
with The Coves at Newport II Association . . . to perform remediation and repair
services for damaged units” and that “Plaintiff . . . contracted with BJ & Associates,
Inc., d/b/a G.A. Jones Construction (G.A. Jones), a North Carolina Corporation
transacting business in North Carolina[] [and] serv[ing] as general contractor for the
Coves.” The trial court also remarked that, “[i]n entering the transactions at issue
in this litigation, Plaintiff engaged in, carried on, and exercised in North Carolina,
the functions for which Plaintiff was created, namely, emergency services for real
properties that have incurred water losses, as well as mold testing and remediation,
moisture control, restoration services, and air duct cleanings.” From this, the trial
court concluded as a matter of law that “[t]here is no genuine issue of material fact
that Plaintiff is a foreign [LLC] for purposes of [certification], transacting business in
North Carolina.”
This analysis does not justify the trial court’s conclusion. N.C.G.S. § 57D-7-
01(b)(10) specifies that “a foreign LLC is not considered to be transacting business in
this State . . . by reason of . . . [c]onducting an isolated transaction completed within
a period of six months but not repeated transactions of a similar nature.” N.C.G.S. §
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Murphy, J., dissenting
57D-7-01(b)(10) (2022). Assuming, arguendo, that entering into two distinct
contracts in North Carolina qualifies as engaging in “repeated transactions”—which
is itself doubtful given that the two contracts were only entered into to secure the
completion of a singular project—N.C.G.S. § 57D-7-01(b) is a non-exhaustive list of
activities a foreign LLC may perform without technically transacting business in
North Carolina. See N.C.G.S. § 57D-7-01(b) (2022) (emphasis added) (“Without
excluding other activities that may not constitute transacting business in this State, a
foreign LLC is not considered to be transacting business in this State for the purposes
of this Chapter by reason of conducting in this State any one or more of the following
activities . . .”). By specifying in a non-exhaustive list that “an isolated transaction
completed within a period of six months” does not itself qualify as transacting
business but excluding “repeated transactions of a similar nature[,]” N.C.G.S. § 57D-
7-01(b)(10) is not communicating that any foreign LLC technically engaging in
multiple transactions in North Carolina automatically transacts business for
certification purposes; rather, it is communicating that those multiple transactions
are not necessarily exempt from the meaning of “transacting business.” N.C.G.S. §
57D-7-01(b)(10) (2022).
The applicable standard remains that “[t]he activities carried on by [an LLC]
in North Carolina must be substantial, continuous, systematic, and regular” to
qualify as “transacting business.” Harbin Yinhai, 196 N.C. App. at 624. The trial
court’s order, which specified only that Plaintiff entered into two contracts in North
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Murphy, J., dissenting
Carolina in order to complete a single repair project, supported no such conclusion.
However, as insufficient information exists in the Record from which we can discern
whether Plaintiff’s other business activities in North Carolina, if any, either in
isolation or in combination with those discussed above, qualify as “substantial,
continuous, systematic, and regular,” id., or whether “any party [was otherwise]
entitled to a judgment as a matter of law[,]” N.C.G.S. § 1-A1, Rule 56(c) (2022), I
would reverse the order of the trial court and remand for further findings of fact
adequately supporting a determination of whether Plaintiff was transacting business
in North Carolina. In the event the trial court found Plaintiff had conducted
sufficient activities in North Carolina to require certification, dismissal at this point
in the proceedings would be proper. However, if the trial court’s factfinding revealed
no further instances in which Plaintiff had conducted business activities in North
Carolina, Plaintiff would not be required to obtain a certificate of authority.
15