              IN THE COURT OF APPEALS OF NORTH CAROLINA

                                   No. COA15-187

                              Filed: 15 September 2015

Forsyth County, No. 14 CVS 3592

CREDIT UNION AUTO BUYING SERVICE, INC., Plaintiff,

             v.

BURKSHIRE PROPERTIES GROUP CORP., JOSEPH FELIX STREVELL and
CHAUNCEY STREVELL, all individually and D/B/A JOE’S GARAGE and RJC
TRADING COMPANY; STATE LINE AUTO AUCTION, INC., STRAIGHT LINE,
L.L.C., Defendants.


      Appeal by defendant Straight Line, L.L.C., from order entered 13 November

2014 by Judge Anderson D. Cromer in Forsyth County Superior Court. Heard in the

Court of Appeals 26 August 2015.


      Spillman Thomas & Battle, PLLC, by Bryan G. Scott, for plaintiff-appellee.

      Connors Morgan, PLLC, by Jeffrey T. Workman and Daniel W. Koenig, for
      defendant-appellant.


      ZACHARY, Judge.


      Where the property at issue was located in North Carolina, the trial court did

not err in exercising quasi in rem jurisdiction over the controversy.

                       I. Factual and Procedural Background

      Credit Union Auto Buying Service, Inc. (appellee CUABS) is a not-for-profit

corporation organized under North Carolina law, with its principal place of business

in Winston-Salem, North Carolina. CUABS is an automobile dealer that sells cars,
      CREDIT UNION AUTO BUYING SERV., INC. V. BURKSHIRE PROPS. GRP. CORP.

                                    Opinion of the Court



primarily to credit unions. State Line Auto Auction, Inc. (State Line) is a company

incorporated in New York, with its principal place of business in Waverly, New York.

State Line acts as a broker for vehicle sales at its auction location in Waverly.

Burkshire Properties Group Corp., doing business as Joe’s Garage and RJC Trading

Company, (Burkshire) is another corporation organized under New York law with its

place of business in New York; it is owned by Joseph Felix Strevell and Chauncey

Strevell (the Strevells).

       Burkshire purchased vehicles from State Line under a line of credit extended

by Straight Line, L.L.C. (appellant Straight Line).            Appellant Straight Line

maintained a security interest in the vehicles and retained the certificates of title to

the vehicles as collateral.    All transactions between Burkshire, State Line, and

appellant Straight Line occurred in New York.

       Appellee CUABS began purchasing vehicles from Burkshire in January of

2013. Appellee CUABS would pay money to Burkshire to cover the price of the

vehicles, the buyer’s fees, fees to transfer certificates of title, and fees for delivery of

the vehicles to North Carolina for resale. In April of 2014, Burkshire failed to provide

to appellee CUABS the certificates of title for 46 vehicles that appellee CUABS had

purchased. The vehicles at issue had been purchased by Burkshire at a State Line

auction with financing provided by appellant Straight Line, and appellant Straight




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Line claimed a security interest in the vehicles. Burkshire delivered these vehicles

to appellee CUABS in North Carolina.

        On 10 June 2014, appellee CUABS brought this action against Burkshire, the

Strevells, State Line, and appellant Straight Line, alleging breach of contract and

unjust enrichment, and seeking a declaratory judgment and specific performance. On

25 August 2014, appellant Straight Line moved to dismiss the complaint pursuant to

Rule 12(b)(2) of the North Carolina Rules of Civil Procedure due to an alleged lack of

personal jurisdiction. On 13 November 2014, the trial court denied this motion.

        Appellant Straight Line filed timely notice of appeal.

                                II. Standard of Review

        As a general rule, denial of a motion to dismiss is deemed to be interlocutory,

and is not immediately reviewable by this Court. An exception lies, however, as

concerns a denial of a motion to dismiss based on a lack of personal jurisdiction. N.C.

Gen. Stat. § 1-277 “allows a party to immediately appeal an order that . . . constitutes

an adverse ruling as to personal jurisdiction.” Can Am S., LLC v. State, ___ N.C. App.

___, ___, 759 S.E.2d 304, 307, review denied, 367 N.C. 791, 766 S.E.2d 624 (2014).

This right of immediate appeal “is limited to rulings on ‘minimum contacts’ questions,

the subject matter of Rule 12(b)(2).” Love v. Moore, 305 N.C. 575, 581, 291 S.E.2d

141, 146 (1982). Accordingly, this matter is proper for review by this Court at this

time.



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      Additionally, it is well established that:

             [t]he determination of whether jurisdiction is statutorily
             and constitutionally permissible due to contact with the
             forum is a question of fact. The standard of [appellate]
             review of an order determining personal jurisdiction is
             whether the findings of fact by the trial court are supported
             by competent evidence in the record; if so, this Court must
             affirm the order of the trial court.

Wyatt v. Walt Disney World Co., 151 N.C. App. 158, 163, 565 S.E.2d 705, 708 (2002)

(quoting Replacements, Ltd. v. MidweSterling, 133 N.C. App. 139, 140–141, 515

S.E.2d 46, 48 (1999)).

                               III. Personal Jurisdiction

      Appellant Straight Line contends that the trial court erred in denying its

motion to dismiss for lack of personal jurisdiction. We disagree.

      The appropriate exercise of personal jurisdiction by our courts is determined

first by the existence of a statutory basis for the exercise of jurisdictional authority,

and second by the dictates of federal due process.

      The trial court in the instant case exercised quasi in rem jurisdiction over the

controversy pursuant to N.C. Gen. Stat. § 1-75.8. This statute provides that quasi in

rem jurisdiction may be invoked “[w]hen the subject of the action is real or personal

property in this State and the defendant has or claims any lien or interest therein, or

the relief demanded consists wholly or partially in excluding the defendant from any

interest or lien therein.” N.C. Gen. Stat. § 1-75.8(1) (2013). In the instant case,



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appellee CUABS’s claim concerned the security interest in several vehicles it had

purchased and the certificates of title to said vehicles.

      Even though quasi in rem jurisdiction is provided by statute, such jurisdiction

must also meet the standards of federal law. “[T]he final determinative factor is

whether the nonresident defendant has certain minimum contacts with the forum

state such that the maintenance of the suit does not offend ‘traditional notions of fair

play and substantial justice.’” Canterbury v. Monroe Lange Hardwood Imports Div.

of Macrose Indus. Corp., 48 N.C. App. 90, 93, 268 S.E.2d 868, 870 (1980) (quoting

International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L.Ed. 95, 102 (1945)).

There are two forms of personal jurisdiction which might bring this case within the

jurisdiction of North Carolina courts: specific jurisdiction, in which the controversy

arises from a defendant’s contact with the forum state; and general jurisdiction, in

which, although the controversy is unrelated to defendant’s activities within the

forum, sufficient contacts exist between defendant and the forum so as to permit

jurisdiction. Wyatt, 151 N.C. at 165, 565 S.E.2d at 709. Specific jurisdiction exists if

the defendant has purposely directed his conduct towards a resident of the forum

state, and thereby “purposefully availed itself of the privilege of conducting activities

in-state, thereby invoking the benefits and protections of the forum state’s laws,”

whereas general jurisdiction exists if the defendant has continuous and systematic

contacts with the forum state. Id. at 165, 565 S.E.2d at 710.



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      The United States Supreme Court has held that “when claims to the property

itself are the source of the underlying controversy between the plaintiff and the

defendant, it would be unusual for the State where the property is located not to have

jurisdiction.” Shaffer v. Heitner, 433 U.S. 186, 207, 53 L.Ed.2d 683, 700 (1977). This

Court, relying on Shaffer, has upheld jurisdiction where the property at issue was

located in North Carolina. For example, in Canterbury, the plaintiff, based in West

Virginia, sought and obtained an order of attachment on a quantity of lumber owned

by the defendant, a New York corporation. The lumber in question was located in

North Carolina. The plaintiff subsequently filed a complaint alleging that he had

sold the lumber to the defendant and, pursuant to the defendant’s orders, shipped it

to North Carolina. The defendant, in its answer, moved to dismiss the complaint for

lack of jurisdiction. The trial court entered an order dismissing the complaint, and

the plaintiff appealed. Canterbury, 48 N.C. App. at 91-92, 268 S.E.2d at 869.

      On appeal, this Court held that statutory grounds existed for the exercise of

personal jurisdiction pursuant to N.C. Gen. Stat. § 1-75.8, and then found a

combination of several factors that established the requisite connection between the

defendant and the forum: (1) the presence of the lumber in the forum state; (2) the

relationship of the lumber to the controversy; (3) the defendant’s specific instruction

to ship the lumber to North Carolina; and (4) the tangible nature of the property, as

lumber is a physical object over which a court may exercise jurisdiction. Id. at 93-95,



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268 S.E.2d at 870-71.     Based on these factors, we held that jurisdiction was

appropriate.

      The instant case presents similar facts. The vehicles in question are located

in North Carolina, and their ownership is central to the controversy.        Further,

appellant Straight Line was not unaware of the vehicles’ destination. In its responses

to appellee CUABS’s interrogatories, appellant Straight Line acknowledged that it

was aware that Burkshire “was purchasing vehicles at State Line Auto Auction to

eventually send to a Burkshire customer in North Carolina.” Appellant Straight Line

was informed that the North Carolina customer “paid Burkshire thirty days after any

vehicles were purchased at the auction, thus necessitating Straight Line’s financing.”

These conversations between Burkshire and appellant Straight Line took place in

late June and early July of 2013.       On 26 July 2013, after having had these

conversations and having been made aware of the destination of the vehicles it was

financing, appellant Straight Line signed a financing and security agreement with

Burkshire. Although appellant Straight Line did not direct the vehicles to be shipped

to North Carolina, appellant had no reason to doubt that any challenge to its security

interest would occur here. Lastly, the tangible nature of the vehicles as the subject

of controversy and as objects over which quasi in rem jurisdiction can be exercised is

parallel to that of the lumber in Canterbury. As the facts in the instant case satisfy




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the same reasoning as Canterbury, it is evident that quasi in rem jurisdiction was

appropriately exercised in this case.

      Appellant Straight Line makes extensive arguments regarding the fact that,

aside from this transaction, it has had no contact with North Carolina. Appellant

Straight Line contends that North Carolina has neither specific nor general

jurisdiction over it, and that it would be unconstitutional to exercise quasi in rem

jurisdiction under those circumstances.

      Even assuming arguendo that appellant Straight Line has had no contact with

North Carolina beyond this transaction, the controversy at hand concerns a number

of vehicles in which appellant Straight Line claims a security interest. These vehicles

were purchased by a North Carolina plaintiff and the vehicles are located in North

Carolina. Moreover, appellant Straight Line had prior knowledge that these vehicles

would be sold in North Carolina. Shaffer and Canterbury make quite clear that the

presence of these vehicles in the State is a perfectly reasonable basis upon which a

trial court could find the existence of quasi in rem jurisdiction, as their presence

constitutes evidence of contact with the State. We hold that the trial court’s finding

of contact is supported by this evidence, and that the trial court did not err in denying

appellant Straight Line’s motion to dismiss.

      This argument is without merit.

      AFFIRMED.



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                         Opinion of the Court



Judges STEPHENS and McCULLOUGH concur.




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