Opinion
NO. COA14-969
02-17-2015
HEATHER GREEN and HUGH FRANK GREEN, III, Plaintiffs, v. WENDY MARIE CLARKE and SUSAN TONKONOGY CLARKE, Defendants.
Temple Law Firm, PLLC, by G. Henry Temple, Jr., and Ian S. Richardson, for Plaintiffs. Hedrick Gardner Kincheloe & Garofalo, LLP, by James R. Baker and Patricia P. Shields, for Defendants.
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. Wake County
No. 13 CVS 8399
Appeal by Defendants from order entered 8 May 2014 by Judge Lucy Inman in Wake County Superior Court. Heard in the Court of Appeals 8 January 2015. Temple Law Firm, PLLC, by G. Henry Temple, Jr., and Ian S. Richardson, for Plaintiffs. Hedrick Gardner Kincheloe & Garofalo, LLP, by James R. Baker and Patricia P. Shields, for Defendants. STEPHENS, Judge.
Factual and Procedural Background
This appeal arises from an action for damages allegedly sustained by Plaintiffs Heather Green and her husband, Hugh Frank Green, III, when their car was struck by a car driven by Defendant Wendy Marie Clarke and owned by Wendy's mother, Defendant Susan Tonkonogy Clarke. In their complaint, Plaintiffs allege that, on 26 August 2010, Wendy was negligent in failing to stop and yield the right of way to Defendants and that Wendy's negligence is imputed to Susan. The complaint was filed 20 June 2013.
On the same day the complaint was filed, Plaintiffs issued summonses to each Defendant using the addresses listed in the August 2010 accident report: to Wendy at 1700 Carrington Park Circle, Morrisville, N.C. 27560 and to Susan's purported residence at 104 Firewood Circle, Raleigh, N.C. 27607. The return of service for Wendy was returned indicating that she was not served because she had not lived at that address for two years. Plaintiffs retained a private detective to locate Wendy. Two possible addresses were discovered: Susan's purported residence at 104 Firewood Circle, Raleigh, N.C. 27607 and an address on Fieldstone Drive in Raleigh. Plaintiffs' counsel contacted Wendy's insurance company and, on 8 July 2013, learned that James R. Baker would be representing Defendants in the matter. When contacted, Baker told Plaintiffs that Wendy had moved to Australia.
Plaintiffs were also unsuccessful in their attempts to serve Susan, whose return of service was returned indicating that she was not served at her purported residence because she was "avoiding service." In July 2013, Plaintiffs issued a set of alias and pluries summonses addressed to Susan at her residence and to Wendy, address "unknown." On 31 July 2013, Plaintiffs sent a letter to both Defendants at Susan's purported residence advising them of the complaint and of the sheriff's attempts to serve them. In August 2013, November 2013, and February 2014, three more sets of alias and pluries summonses were issued to Defendants, all addressed to both Defendants at Susan's purported residence.
Plaintiffs then published notice of service by publication in the Eastern Wake News, one of a series of community newspapers printed and circulated by the News & Observer to various communities in and around Wake County, on 27 and 30 October 2013, and on 3, 6, 10, and 13 November 2013. On 28 October 2013, Plaintiffs mailed a copy of notice of service of process by publication to both Defendants at Susan's residence.
On 5 December 2013, Defendants moved to dismiss Plaintiffs' lawsuit pursuant to Rule of Civil Procedure 12(b)(1), (2), (4), (5), and (6). Specifically, Defendant contended that (1) Plaintiffs failed to provide sufficient process and service of process, (2) the trial court lacked jurisdiction to hear the case, (3) the complaint failed to state a claim upon which relief may be granted, and (4) Plaintiffs' claims were barred by the applicable statute of limitations.
On 18 February 2014, Plaintiffs set the hearing on Defendants' motion for the 31 March 2014 civil session of Wake County Superior Court. On 27 March 2014, Plaintiffs filed an affidavit of service of Defendants by publication. On 1 April 2014, Defendants filed an affidavit of their counsel, Baker, in support of their motion to dismiss. Baker's affidavit included a circulation map from the News & Observer which showed that the Eastern Wake News is not circulated in the zip code where Susan resides.
The matter came on for hearing that afternoon. After hearing arguments of counsel, the trial court recessed until the following day with instructions for the parties to submit written briefs that evening. On 2 April 2014, Baker filed another affidavit in support of Defendants' motion to dismiss, this one including screen shots from the News & Observer website that indicate the Eastern Wake News is circulated to homes in Wendell, Zebulon, and Knightdale, but not in Raleigh, where Susan purportedly resides. When the trial court reconvened, Plaintiffs objected to the trial court's consideration of the two affidavits of Defendants' trial counsel. The court sustained the objection and denied Defendants' motion to dismiss. The court entered a written order memorializing its ruling on 8 May 2014. From that interlocutory order, Defendants appeal.
Plaintiffs' Motion to Dismiss
On 12 November 2014, Plaintiffs moved to dismiss this appeal. That motion was referred to this panel by order of the Court entered 3 December 2014. The basis for Plaintiffs' motion is the statement of jurisdiction included on page 3 of the record on appeal, which states: "The Parties to this proceeding agree that, at all relevant times, the Superior Court, Wake County had jurisdiction over the parties hereto and that such jurisdiction was properly obtained by stipulation between the parties and/or findings of fact based upon competent evidence." Plaintiffs contend that this statement is itself a stipulation by Defendants that the Wake County Superior Court has personal jurisdiction over Defendants. We are not persuaded.
While personal jurisdiction may be obtained by consent or stipulation, see Hale v. Hale, 73 N.C. App. 639, 641, 327 S.E.2d 252, 253 (1985), here, as Defendants strenuously point out in their response to Plaintiffs' motion to dismiss, it is clear that Defendants did not intend to stipulate to the trial court's personal jurisdiction over them since that is the sole matter raised and argued in the trial court and on appeal. Rather, Defendants' counsel states that he inadvertently included the statement of jurisdiction's "boilerplate language" under an erroneous belief that such a statement is required in a record on appeal. Defendants' counsel has filed, contemporaneously with the response to Plaintiffs' motion to dismiss, a motion to amend the record on appeal to substitute a statement of jurisdiction which accurately states the parties' dispute of that issue.
"It has been said that unless it is clear from the record that the parties assented, there is no stipulation . . . ." 73 Am Jur 2d Stipulations § 2 (2012). We conclude that the record here indicates quite clearly that Defendants have not assented to the personal jurisdiction of the Wake County Superior Court. Further, even if the statement of jurisdiction was a stipulation on the issue of personal jurisdiction, "[c]ourts have broad discretion in determining whether to hold a party to a stipulation and may set aside a stipulation where enforcement would not be conducive to justice." 73 Am Jur 2d Stipulations § 12 (2012). Enforcing a stipulation regarding personal jurisdiction in this matter based upon an apparent inadvertent error "would not be conducive to justice." See id. Accordingly, we deny Plaintiffs' motion to dismiss and allow Defendants' motion to amend the record on appeal.
Grounds for Appellate Review
At the hearing on their motion to dismiss, Defendants argued only that the trial court lacked personal jurisdiction over them as a result of insufficient service of process. In its order denying Defendants' motion to dismiss, the court concluded that service on Defendants by publication was warranted and that Plaintiffs had established the presumption of proper service of process under N.C. Gen. Stat. § 1-75.10 and Rule 4(j1) of our Rules of Civil Procedure. As a result, the court concluded that it could exercise personal jurisdiction over Defendants in the matter.
We first address whether Defendant's appeal of the trial court's order denying their motion to dismiss is properly before this Court at this time. "An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy." Veazey v. City of Durham, 231 N.C. 357, 361-62, 57 S.E.2d 377, 381 (citations omitted), reh'g denied, 232 N.C. 744, 59 S.E.2d 429 (1950). Section 1-277(b) of our General Statutes "permits the immediate appeal of an order denying a motion made pursuant to Rule 12(b)(2) to dismiss for lack of jurisdiction over the person . . . ." Teachy v. Coble Dairies, Inc., 306 N.C. 324, 327, 293 S.E.2d 182, 184 (1982). However, "the right of immediate appeal of an adverse ruling as to jurisdiction over the person, under that statute, 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, reh'g denied, 306 N.C. 393 (1982).
Love, like the matter before this Court, concerned a purported appeal from an interlocutory order denying the defendant's motion to dismiss for lack of personal jurisdiction. However, as our Supreme Court observed,
[t]he true character of [the] defendant's motion . . . is not one attacking personal jurisdiction as contemplated by Rule 12(b)(2). [The d]efendant's motion, although denominated as one challenging the court's jurisdiction over the person of [the defendant,] Frank Willard Moore, in reality challenges the sufficiency of the service as contemplated by Rule 12(b)(5) and the sufficiency of the process as contemplated by Rule 12(b)(4). Specifically, [the plaintiff,] Nationwide[,] contended that use of the incorrect middle name in the published notice made the process itself insufficient and that service by publication was unconstitutional under the peculiar facts of this case and, thus, was defective. Again, these challenges are encompassed by Rule 12(b)(4) and Rule 12(b)(5), respectively. A challenge to the court's jurisdiction over the person, Rule 12(b)(2), concerns whether the court has power, assuming it is properly invoked, to require the defendant to come into court to adjudicate the claim, a test which has come to be known as "minimum contacts." Challenges to sufficiency of process and service do not concern the [S]tate's fundamental power to bring a defendant before its courts for trial;
instead they concern the means by which a court gives notice to the defendant and asserts jurisdiction over him. [Section] 1-277(b) applies to the [S]tate's authority to bring a defendant before its courts, not to technical questions concerned only with whether that authority was properly invoked from a procedural standpoint. This is not a mere technical distinction; it has far-reaching substantive effect. If the court has no personal jurisdiction over the defendant, it has no right to require the defendant to come into court. A trial court determination concerning such an important fundamental question is made immediately appealable by [section] 1-277(b). However, if the court has the jurisdictional power to require that the party defend and the challenge is merely to the process of service used to bring the party before the court, [section] 1-277(b) does not apply.Id. at 579-80, 291 S.E.2d at 145 (citations omitted; certain emphasis added).
Here, as in Love, Defendants' motion to dismiss raised only the issue of sufficiency of service of process, rather than any question of their "minimum contacts" with the State. Thus, section 1-277(b) does not provide Defendants a right of immediate appeal from the trial court's order denying their motion to dismiss.
We next address the "stipulation" of the parties in the record on appeal that "[t]he trial court certified th[e] order for immediate appellate review pursuant to N.C. Gen. Stat. [§] 1A-1, Rule 54(b)." However, the record does not include a Rule 54(b) certification, and the stipulation of the parties is insufficient to confer appellate jurisdiction on this Court. "[P]arties cannot stipulate to give a court subject matter jurisdiction where no such jurisdiction exists." Northfield Dev. Co. v. City of Burlington, 165 N.C. App. 885, 887, 599 S.E.2d 921, 924, disc. review denied, 359 N.C. 191, 607 S.E.2d 278 (2004); see also 73 Am Jur 2d Stipulations § 4 (2012) ("Parties may not by stipulation, however, invest a court with jurisdiction over the subject matter of a cause which it would not otherwise have had although parties may stipulate to personal jurisdiction.").
Rule 54(b) provides that,
[w]hen more than one claim for relief is presented in an action, . . . or when multiple parties are involved, the court may enter a final judgment as to one or more but fewer than all of the claims or parties only if there is no just reason for delay and it is so determined in the judgment. Such judgment shall then be subject to review by appeal or as otherwise provided by these rules or other statutes. In the absence of entry of such a final judgment, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties and shall not then be subject to review either by appeal or otherwise except as expressly provided by the rules or other statutes. . . .
Further, even if the record before us did include a Rule 54(b) certification, it would not provide Defendants a right of immediate appellate review of the denial of a motion to dismiss based upon allegedly insufficient service of process. See Howze v. Hughes, 134 N.C. App. 493, 495, 518 S.E.2d 198, 199 (1999) (holding that a "trial court's attempt at Rule 54(b) certification fails" to permit immediate appeal from the denial of Rule 12 motions to dismiss on various grounds, including inter alia, insufficient service of process, because "there has been no adjudication as to any claim(s) or part(ies) within the meaning of Rule 54(b)").
For the reason stated above, Defendants' purported appeal from the 8 May 2014 order must be
DISMISSED.
Judges GEER and DILLON concur.
Report per Rule 30(e).
N.C. Gen. Stat. § 1A-1, Rule 54(b) (2013)