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Civil Practice – Personal Jurisdiction – Real Property – Promissory Note – General Jurisdiction – Prior Litigation

Civil Practice – Personal Jurisdiction – Real Property – Promissory Note – General Jurisdiction – Prior Litigation

Synovus Bank v. Schaur (Lawyers Weekly No. 12-04-0967, 18 pp.) (Martin Reidinger, J.) 1:11-cv-00189; W.D.N.C.

Holding: Even though an N.C. state court found that it had personal jurisdiction over the Michigan defendant, that action was voluntarily dismissed without prejudice; therefore, the court’s finding does not have collateral estoppel effect. Moreover, the state court litigation involved the original promissory note between the parties whereas this action involves a renewal promissory note.

Defendant’s motion to dismiss for lack of personal jurisdiction is granted.

While defendant has had previous contacts with North Carolina, this action concerns his purchase of a lot in the Seven Falls Golf and River Club in Henderson County. At no time did defendant enter North Carolina for any purpose related to the transaction at issue.

The plaintiff-bank has not chosen to foreclose on the deed of trust on the lot, electing instead to bring suit solely on the renewal note, an instrument executed by defendant in Michigan and delivered to the bank in South Carolina. In the action pled by the bank, the N.C. real property simply is not at issue. As such, defendant’s execution of a deed of trust encompassing N.C. property does not constitute the minimum contacts required to establish specific personal jurisdiction in this case.

The court also finds that it lacks general personal jurisdiction over defendant. Over a period of eight years, defendant purchased three lots in North Carolina, two of which were purchased for the purpose of building a vacation home (which was never built) and one of which was purchased for investment purposes and subsequently sold. Defendant currently retains only one unimproved parcel of N.C. real property. Contrary to the bank’s argument, defendant’s real estate activity was not so extensive and systematic as to justify the exercise of general jurisdiction over him in this case.

Similarly, defendant’s participation in the prior state-court litigation does not warrant the exercise of general jurisdiction over him. In that action, defendant challenged the state court’s exercise of jurisdiction and sought to dismiss the action or stay it pending resolution of litigation pending in Georgia. These defensive legal maneuvers do not constitute contacts of a continuous and systematic nature with the forum state such that general jurisdiction is created.


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