Civil Practice – Personal Jurisdiction – Minimum Contacts – Ohio Resident – Corporate Acts

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Peters v. Norwalk Furniture Corp. (Lawyers Weekly No. 10-16-0899, 17 pp.) (Ann Marie Calabria, J.) Appealed from Burke County Superior Court. (Robert C. Ervin, J.) N.C. App. Unpub.

Holding: Where the individual defendant had many contacts with North Carolina in his capacity as a corporate officer, and where this lawsuit arises from the individual defendant’s acts as a corporate officer, N.C. courts have personal jurisdiction over the Ohio defendant.

We affirm the trial court’s denial of defendant’s motion to dismiss for lack of personal jurisdiction.

Defendants decided to close a manufacturing facility in Valdese. Defendant Gerken promoted and helped to implement stay bonuses for employees who stayed until the plant closed. Gerken also allegedly refused to provide the collateral to the corporate defendants that would have allowed them to pay those bonuses.

Personal jurisdiction over an individual officer or employee of a corporation may not be predicated merely upon the corporate contacts with the forum. Plaintiffs may not assert jurisdiction over a corporate agent without some affirmative act committed in his individual official capacity. To base personal jurisdiction on the bare fact of a defendant’s status as, e.g., corporate officer or agent, would violate his due process rights.

Where a defendant is an officer and principal shareholder of a corporation, the N.C. Supreme Court has explicitly directed that we consider his corporate actions in determining personal jurisdiction. Under N.C. precedent the determination of whether personal jurisdiction is properly exercised over a defendant does not exclude consideration of defendant’s actions merely because they were undertaken in the course of his employment.

Defendant Hickory Hill Furniture Corp. admitted that its principal place of business is in North Carolina, and that it is a wholly owned subsidiary of defendant Norwalk Furniture Corp., an Ohio corporation registered to do business in N.C. Further, defendant Gerken admitted that he previously served as a director of Norwalk.

Gerken traveled to North Carolina twice a year to attend the High Point Furniture Market on behalf of Norwalk and Hickory Hill, and “traveled to Valdese, North Carolina, in December 2006 and in March or April 2008 on business for Hickory Hill Furniture Company.” While Gerken worked in Ohio, he “occasionally exchanged electronic data and had telephone contact with employees of Hickory Hill Furniture Corporation at its Valdese, North Carolina, location. …”

Plaintiff Quez Little averred that Gerken’s refusal to provide additional collateral to the corporate defendants caused them to “go under,” which resulted in the non-payment of all stay bonuses. Gerken knew that the bonuses would not get paid without providing more collateral.

Gerken had numerous and significant contacts with North Carolina in his capacity as a corporate officer for Norwalk and Hickory Hill, and these contacts were aimed at taking affirmative steps to keep the Valdese facility operational, including offering plaintiffs a stay bonus.

Defendants failed to pay plaintiffs’ wages for remaining at the Valdese facility as full-time employees until they were laid off. The affidavits of plaintiffs Sigmon and Little show that Gerken was instrumental in offering the stay bonus to plaintiffs. Gerken sent an e-mail on Aug. 16, 2008, to “Everyone-Norwalk,” confirming that Charles Rowe was no longer chief restructuring officer of Norwalk, and adding, “Until further notice, please direct any matters to Jim Gerken, Chairman.” This email supports a conclusion that the alleged breach of contract was related to Gerken’s contacts with North Carolina in his corporate capacity.

This state has an interest in providing a forum for resolution of conflicts arising in North Carolina.

There is no evidence in the record to indicate that is would be more convenient for the parties to litigate this matter in a different forum. In fact, there are multiple N.C. plaintiffs who would have to travel to another jurisdiction if N.C. were not the forum state.

The record shows Gerken initiated numerous contacts with Hickory Hill and plaintiffs, as chairman and president of Hickory Hill and as chairman of Norwalk. These contacts were aimed at taking affirmative steps to keep the Valdese facility operational, including offering plaintiffs a stay bonus. In the process of establishing this relationship with plaintiffs,

Gerken purposefully invoked the benefits and protection of the laws of North Carolina. Gerken had access to the courts of this state to enforce the rights growing out of the transactions between him and plaintiffs.

Defendant’s knowledge that plaintiff is located in North Carolina and that the services expected from plaintiff were to be performed in North Carolina enabled it to ‘reasonably anticipate being brought into court in North Carolina.

Gerken knew plaintiffs were in North Carolina. Gerken had traveled to North Carolina on numerous occasions in his corporate capacity as an officer for Norwalk and Hickory Hill. Gerken’s contacts with N.C. are such that he should have reasonably anticipated being brought into court in this state.

We conclude Gerken has purposely availed himself of the benefits of doing business in North Carolina and “should reasonably anticipate being haled” into an N.C. court. We hold that Gerken has sufficient minimum contacts with North Carolina to justify the exercise of personal jurisdiction over him without violating the due process clause.

Affirmed.