By: Brian Bernhardt
Jurisdiction is a foundation of what we do as trial and appellate practitioners. While a litigant can waive lack of personal jurisdiction, lack of subject matter jurisdiction is death for a case. In its opinions issued February 7, 2023, the Court of Appeals issued two cases dealing with jurisdictional issues.
In Bassiri v. Pilling, No. COA22-411, 2023 WL 1794176 the Court addressed our old friends, alienation of affections, criminal conversation, and intentional infliction of emotional distress. Plaintiff and his wife live in North Carolina. Plaintiff alleged that his wife had intimate relations with defendant in California, Nevada, and Utah. Defendant acknowledged meeting plaintiff’s wife in those states but denied having indulged in sexual intercourse. Defendant also admitted that he and plaintiff’s wife had contacted each other through social media, texts, and email while the wife was in North Carolina.
During the proceedings, defendant voluntarily dismissed his North Carolina Rule of Civil Procedure 12(b)(2) motion to dismiss for lack of personal jurisdiction, and plaintiff voluntarily dismissed all his claims except for alienation of affection. Defendant then moved to dismiss the complaint for lack of subject-matter jurisdiction, pursuant to Rule 12(b)(1). Following a hearing, the trial court allowed defendant’s 12(b)(1) motion, finding that no evidence indicated that intimate acts had occurred in North Carolina. In its order, the trial court cited Jones v. Skelley, 195 N.C. App 500, 673 S.E.2d 385 (2009) for the proposition that alienation of affection is a transitory tort “and for North Carolina substantive law to apply a Plaintiff must show that the alleged tort occurred in the state of North Carolina.”
On appeal, the Court of Appeals reversed the trial court. The Court noted with that while this case, like many others, could bog down in “thornier issues of personal jurisdiction and conflicts of laws,” it also could be “resolved simply by recognition of the broad grant of general jurisdiction to our trial courts” under N.C.G.S. 7A-240, which (with exceptions not relevant here) gives original general jurisdiction of “all justiciable matters of a civil nature” to courts in the trial division.
The Court of Appeals, like the trial court, cited Jones v. Skelley but noted that Jones’ requirement that the intimate acts take place in North Carolina in order for the trial court to have subject matter jurisdiction did not take into account instances where the conduct constituting the offense occurred in a state that also recognizes the tort of alienation of affection. Here, both North Carolina and Utah recognize the offense. Because plaintiff alleged actionable deeds in Utah, the trial court erred in finding that it did not have subject matter jurisdiction. The Court of Appeals remanded the case for further proceedings.
The second jurisdiction case is Janu, Inc. et al. v. Mega Hospitality, LLC, et al., No. COA22-194, 2023 WL 1794086. The details of this contract action are straightforward. Plaintiff sued for breach of a contract, alleging that defendant failed to pay plaintiff for work performed at defendant’s hotel.
According to the trial court order, defendant moved pursuant to Rule 12(b)(2) to dismiss plaintiff’s complaint against the corporate defendant, arguing lack of personal jurisdiction. Defendant also moved pursuant to Rule 12(b)(6) (failure to state a claim upon which relief may be granted) to dismiss the complaint as to the individual defendant, who was the member-manager of the corporate defendant.
Defendant twice attempted to schedule both motions for a hearing, but plaintiff objected both times. Plaintiff’s counsel told defendant that while he had no problem scheduling the Rule 12(b)(6) motion for hearing, he objected to hearing the motion relating to personal jurisdiction until defendant provided discovery relating to jurisdiction. Eventually, defendant noticed only the 12(b)(6) motion.
During the hearing on the 12(b)(6) motion, however, defendant addressed the pending Rule 12(b)(2) jurisdictional motion. In response to questions from the bench triggered by defendant’s comments, plaintiff advised the court that the current hearing was limited to the Rule 12(b)(6) motion, that the two issues were discrete, and that plaintiff was awaiting discovery regarding jurisdiction.
The Court of Appeals noted rather acidly that the trial court did not issue its ruling until 574 days after the hearing. In its order, the trial court not only allowed defendant’s Rule 12(b)(6) motion to dismiss for failure to state a claim as to the individual defendant (even though plaintiff had dismissed the individual over a year earlier), but also allowed defendant’s Rule 12(b)(2) motion to dismiss the corporate defendant for lack of personal jurisdiction, even though that latter motion was not before the trial court.
Plaintiff appealed, arguing that the trial court improperly addressed the Rule 12(b)(2) motion and also erred by finding that it lacked personal jurisdiction over defendant. The Court of Appeals affirmed in part, vacated in part, and remanded (some of this resolution address appealed issues that are not pertinent to the discussion of personal jurisdiction. Check out the link above for the whole megillah.)
In its analysis, the Court noted the number of times and consistency with which plaintiff had objected to having the jurisdictional matter heard while discovery was pending. The Court observed that by local rule, statute, and the North Carolina Constitution, motions must be noticed in advance as an essential element of due process. Here, however, the trial court addressed the personal jurisdiction issue following a hearing where that issue had not been noticed and where plaintiff explicitly objected to the trial court considering it. Accordingly, the Court of Appeals found the trial court’s order granting the Rule 12(b)(2) motion regarding lack of personal jurisdiction to be irregular and vacated that portion of the order.
Even though the Court had vacated the trial court’s order as to defendant’s Rule 12(b)(2) motion, it went on to address the trial court’s determination that it lacked personal jurisdiction over defendant (presumably the corporate defendant, though the opinion isn’t explicit). The Court observed that General Statute § 1-75.7 allows a court having subject matter jurisdiction to exercise personal jurisdiction over a person who makes a general appearance in an action. In addition, the Court cited Farm Credit Bank v. Edwards, 121 N.C. App. 72, 464 S.E.2d 305 (1995) for the proposition that, in addition to making a general appearance, the “seeking [of] affirmative relief from a court on any basis other than lack of jurisdiction constitutes a waiver of jurisdictional objections.” The Court observed that defendant both calendared a Rule 12(b)(6) hearing and then sought affirmative relief from the court. Accordingly, not only did the trial court hear the Rule 12(b)(2) motion improperly, but it also made the wrong ruling when it did so. In short, the trial court had jurisdiction over defendant and erred both by failing to exercise personal jurisdiction over defendant and by dismissing plaintiff’s claims.
These cases illustrate that nuances of jurisdiction law can bite. Keep your guard up.
–Bob Edmunds and Brian Bernhardt