Opinion ID: 1266312
Heading Depth: 3
Heading Rank: 1

Heading: Substantial Activity

Text: N.C.G.S. § 1-75.4(1) applies to defendants with a Local Presence or Status and grants personal jurisdiction [i]n any action . . . in which a claim is asserted against a party who . . . [i]s engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise. N.C.G.S. § 1-75.4(1)(d) (2005). This Court has stated that the enactment of N.C.G.S. § 1-75.4(1)(d) was intended to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process. Dillon, 291 N.C. at 676, 231 S.E.2d at 630 (citing 1 McIntosh, North Carolina Practice & Procedure § 937.5 (Supp. 1970)). However, by its plain language the statute requires some sort of activity to be conducted by the defendant within this state. Here, the 1997-1 Trust was created after the origination of plaintiffs' loan as a mechanism for holding notes, receiving income, and issuing related certificates. Only 114 (approximately 3%) of the 3,537 loans deposited at the inception of the 1997-1 Trust related to North Carolina indebtedness. These activities occurred outside of North Carolina, in California and New York. The only local activities that link the plaintiffs to the 1997-1 Trust are: (1) the loan itself, an activity completed by Preferred Credit before the creation of 1997-1 Trust; and (2) loan payments made by the plaintiffs, activities conducted by a separate servicer, not by the 1997-1 Trust. Thus, even under N.C.G.S. § 1-75.4(1)(d)'s very broad terms, the facts of this case fail to invoke jurisdiction.