Court Opinion

ID: 9348824
Source: CourtListenerOpinion
Date Created: 2022-12-20 14:17:40.678253+00
Date Added: 2024-06-11T16:43:46.676368
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                            2022-NCCOA-26

                                            No. COA21-317

                                      Filed 18 January 2022

     Guilford County, No. 20 CVS 5804

     DANIEL ALLEN CARMICHAEL, Plaintiff,

                   v.

     LEO W. CORDELL, Defendant.

             Appeal by plaintiff from order entered 14 October 2020 by Judge John O. Craig,

     III, in Guilford County Superior Court. Heard in the Court of Appeals 14 December

     2021.

             Gordon Law Offices, by Harry G. Gordon, for plaintiff-appellant.

             Nelson Mullins Riley & Scarborough LLP, by Fred M. Wood, Jr., and Holland
             & Knight, LLP, by Vivian L. Thoreen and Lydia L. Lockett admitted pro hac
             vice, for defendant-appellee.

             TYSON, Judge.

¶1           Daniel Carmichael (“Plaintiff”) appeals an order by the trial court granting Leo

     Cordell’s (“Defendant”) motion to dismiss. We affirm in part, reverse in part and

     remand.

                                       I.     Background

¶2           Defendant has been a California resident since 1954. Defendant married

     Patricia Cordell (“Decedent”) on 8 July 1961.          Defendant and Decedent (the
                                    CARMICHAEL V. CORDELL

                                        2022-NCCOA-26

                                       Opinion of the Court

     “Cordells”), lived in California during the entirety of their marriage until Decedent

     died on 10 January 2020. The Cordells are parents of two daughters, Caroline P.

     Condon (“Ms. Condon”) and Wendy Cordell. Decedent was the mother of one son,

     Plaintiff, from a previous relationship.       Plaintiff resides in North Carolina.

     Defendant has never traveled to, conducted business in, or has any other ties to or in

     North Carolina.

¶3         The Cordells acquired assets during their 58 years of marriage, which are

     purportedly classified as community property under California law.         Defendant

     allegedly discovered after Decedent had died that Decedent had set up separate

     accounts for Plaintiff and made changes to certain accounts, which affected the

     disposition of their asserted community property assets. Decedent had purportedly

     removed the Cordell’s two daughters as beneficiaries on some accounts, leaving

     Plaintiff as the sole beneficiary. Decedent had also purportedly changed the address

     on the accounts to Plaintiff’s address in North Carolina.

¶4         Plaintiff claimed ownership of funds from three accounts held by Decedent

     which named him as the sole beneficiary for twenty years.         On 30 April 2020,

     Defendant sent Plaintiff a letter and threatened to sue Plaintiff. Defendant claimed

     the transfers Decedent made in trust to Plaintiff should be voided because Defendant

     did not approve the changes.
                                    CARMICHAEL V. CORDELL

                                         2022-NCCOA-26

                                        Opinion of the Court

¶5         On 8 July 2020, Defendant sued Plaintiff in California (“CA action”).

     Defendant filed a first amended complaint against Plaintiff in the CA action for: (1)

     aiding and abetting breach of fiduciary duty; (2) elder financial abuse; (3) declaratory

     relief regarding non-probate transfers; and, (4) declaratory relief regarding transfer

     of stock. This amended complaint alleges Plaintiff unduly influenced Decedent to

     change the beneficiary designations of the accounts containing community funds and

     naming Plaintiff as the sole beneficiary of those accounts upon Decedent’s death.

¶6         On 14 July 2020, Plaintiff filed his verified complaint as a declaratory

     judgment action, which initiated the instant litigation against Defendant in North

     Carolina (“NC Action”). This complaint was served on Defendant in California on 22

     July 2020. The NC action arises out of the same facts as alleged in Defendant’s CA

     action, and centers around actions the Decedent took in California involving the

     purported marital property and Defendant’s spousal rights and duties as California

     residents. Plaintiff amended his complaint on 11 September 2020 and added Ms.

     Condon, Defendant’s daughter, and his attorney-in-fact, as a party. The NC action

     seeks a declaratory judgment holding Plaintiff is the sole and rightful owner of the

     funds placed in trust accounts, by Decedent, for his benefit in North Carolina, yet to

     be paid to him. Plaintiff filed a motion challenging Ms. Condon’s standing and

     alleging conflicts of interest on 2 October 2020.
                                        CARMICHAEL V. CORDELL

                                                2022-NCCOA-26

                                               Opinion of the Court

¶7            Plaintiff also filed a petition for probate of lost will in California on 14 August

       2020. In that petition, Plaintiff sought to probate a document purported to be a

       handwritten will of Decedent dated 24 October 2003, along with a document

       purported to be a handwritten codicil dated 10 July 2011.

¶8            Defendant filed his motion to dismiss for lack of personal jurisdiction.

       Defendant’s motion was granted in the superior court on 12 October 2020. Plaintiff

       appeals.

                                         II.      Jurisdiction

¶9            This appeal is properly before this Court pursuant to N.C. Gen. Stat. §§ 7A-

       27(b)(1) and 1-277(b) (2021).

                                               III.    Issues

¶ 10          Plaintiff challenges whether the trial court erred: (1) by granting Defendant’s

       motion to dismiss for lack of personal jurisdiction; (2) by not finding North Carolina

       possesses in rem jurisdiction over the property and proceeds; and, (3) in failing to

       rule on Plaintiff’s motion challenging the standing of Caroline Condon and asserted

       conflicts of interest.

                                         IV.          Argument

                                       A. Personal Jurisdiction

                                                1. In Personam

¶ 11          “Once jurisdiction is challenged, plaintiff has the burden of proving prima facie
                                      CARMICHAEL V. CORDELL

                                           2022-NCCOA-26

                                          Opinion of the Court

       that a statutory basis for jurisdiction exists.” Williams v. Institute for Computational

       Studies, 85 N.C. App. 421, 424, 355 S.E.2d 177, 179 (1987). For North Carolina courts

       to exercise in personam jurisdiction over a nonresident defendant, there is a two-part

       test: “first, the court must have jurisdiction over the person of defendant under our

       State’s long-arm statute, and second, the exercise of jurisdiction must not violate the

       due process clause of the fourteenth amendment of the United States Constitution.”

       Id. (internal quotation marks omitted).

                    A court of this State having jurisdiction of the subject
                    matter has jurisdiction over a person

                    (1) Local Presence or Status.--In any action, whether the
                    claim arises within or without this State, in which a claim
                    is asserted against a party who when service of process is
                    made upon such party:

                     ....

                    d. Is engaged in substantial activity within this State,
                    whether such activity is wholly interstate, intrastate, or
                    otherwise.

       N.C. Gen. Stat. § 1-75.4(1)(d) (2021) (emphasis supplied).

¶ 12         “The Due Process Clause of the Fourteenth Amendment operates to limit the

       power of a State to assert in personam jurisdiction over a nonresident defendant.”

       Beem USA Ltd.-Liab. Ltd. P’ship v. Grax Consulting LLC, 373 N.C. 297, 302, 838

       S.E.2d 158, 161-62 (2020) (citations omitted). For North Carolina courts to assert

       jurisdiction the due process requirements must be satisfied. The primary concern of
                                      CARMICHAEL V. CORDELL

                                            2022-NCCOA-26

                                          Opinion of the Court

       the Due Process Clause as it relates to a court’s jurisdiction over a nonresident

       defendant is the protection of an individual’s liberty interest in not being subject to

       the binding judgments of a forum with which he has established no meaningful

       contacts, ties, or relations.” Id. at 302, 838 S.E.2d. at 162 (citations and internal

       quotation marks omitted).

                    The United States Supreme Court has made [it] clear that
                    the Due Process Clause permits state courts to exercise
                    personal jurisdiction over an out-of-state defendant so long
                    as the defendant has certain minimum contacts with [the
                    forum state] such that the maintenance of the suit does not
                    offend traditional notions of fair play and substantial
                    justice.

       Id.

¶ 13         “Specific jurisdiction exists if the defendant has purposely directed its

       activities toward the resident of the forum and the cause of action relates to such

       activities.” Havey v. Valentine, 172 N.C. App. 812, 815, 616 S.E.2d 642, 646 (2005)

       (citations and internal quotation marks omitted). “[T]he court considers (1) the

       extent to which the defendant purposefully availed itself of the privilege of conducting

       activities in the State; (2) whether the plaintiffs’ claims arise out of those activities

       directed at the State; and (3) whether the exercise of personal jurisdiction would be

       constitutionally reasonable.” Id. at 815, 616 S.E.2d at 647 (alterations, citations and

       quotation marks omitted).

¶ 14         “Purposeful availment is shown if the defendant has taken deliberate action
                                      CARMICHAEL V. CORDELL

                                            2022-NCCOA-26

                                          Opinion of the Court

       within the forum state or if he has created continuing obligations to forum residents.”

       Id. “[C]ontacts that are isolated or sporadic may support specific jurisdiction if they

       create a substantial connection with the forum, the contacts must be more than

       random, fortuitous, or attenuated.” Id. (citation and internal quotation marks

       omitted).

¶ 15         Here, Defendant has never been to North Carolina, he has never conducted

       any business in North Carolina, and except for his relationship with Plaintiff, he has

       no other known ties to North Carolina. Defendant has not purposely availed himself

       of conducting activities in North Carolina sufficient to justify him being haled into a

       court of this State under in personam jurisdiction.           Assertion of in personam

       jurisdiction over Defendant is unreasonable because he has no contacts with this

       forum. This portion of the trial court’s order is affirmed.

                                               2. In Rem

¶ 16         Plaintiff argues Defendant may be haled into North Carolina courts based

       upon in rem jurisdiction. Assertions of in rem and quasi in rem actions should be

       evaluated in accordance with the minimum contacts standard. See Ellison v. Ellison,

       242 N.C. App. 386, 390, 776 S.E.2d 522, 525-26 (2015) (stating the defendant and

       State must possess minimum contacts so the jurisdiction does not offend “traditional

       notions of fair play and substantial justice”).

                    Jurisdiction in rem or quasi in rem may be invoked in any
                                     CARMICHAEL V. CORDELL

                                              2022-NCCOA-26

                                          Opinion of the Court

                    of the following cases:

                    (1) When the subject of the action is real or personal
                    property in this State and the defendant has or claims any
                    lien or interest therein, or the relief demanded consists
                    wholly or partially in excluding the defendant from any
                    interest or lien therein. This subdivision shall apply
                    whether any such defendant is known or unknown.

       N.C. Gen. Stat. § 1-75.8 (2021).

¶ 17         In Lessard v. Lessard this Court held:

                    The estate of the defendant’s deceased daughter is personal
                    property in this State and the relief demanded is to exclude
                    the defendant from any interest in this property.

       68 N.C. App. 760, 762, 316 S.E.2d 96, 97 (1984).

¶ 18         This Court further held in Ellison, “[t]he relief sought in the present action,

       like in Lessard, is to exclude [d]efendant from any interest in property located in

       North Carolina. When the subject matter of the controversy is property located in

       North Carolina, the constitutional requisites for jurisdiction will generally be met.”

       Ellison, 242 N.C. App. at 391, 776 S.E.2d at 526.

¶ 19         Here, Defendant initiated the controversy by threatening to sue Plaintiff by

       claiming an interest in the accounts in North Carolina.        Defendant essentially

       reached into North Carolina to claim the property being held within this state by a

       citizen of this state. Plaintiff responded by filing a declaratory judgment to bar

       Defendant from taking an interest in the accounts in North Carolina. Defendant

       challenges and asserts a superior interest in the property purportedly owned by a
                                      CARMICHAEL V. CORDELL

                                            2022-NCCOA-26

                                          Opinion of the Court

       person, who is located in and is a citizen of North Carolina. Plaintiff’s complaint

       demands relief which excludes Defendant from property within North Carolina. This

       is sufficient and reasonable to establish the in rem jurisdiction of North Carolina

       courts for Plaintiff’s declaratory action over funds and accounts held in North

       Carolina.

                                   B. Standing of Ms. Condon

                                      1. Standard of Review

¶ 20          “It is well established that where matters are left to the discretion of the trial

       court, appellate review is limited to a determination of whether there was a clear

       abuse of discretion.” White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985).

                                            2. Analysis

¶ 21          Plaintiff argues the trial court erred by declining to hear Plaintiff’s Motion

       Challenging the Standing of Caroline Patricia Condon and Finding Conflicts of

       Interest (“Plaintiff’s Motion”) and instead of granting Defendant’s Motion to Dismiss

       for lack of jurisdiction.

¶ 22          Prior to the hearing, the trial judge emailed counsel for Plaintiff and Defendant

       and stated: “I do not need to address [Plaintiff counsel’s] additional motion. . . . you

       can cite the G.S. Sec. 32C-2-212, as well as the fact that even though the objection

       was served more than five days before, it was not calendared with my TCC and the

       court received no notice of it until the day of the hearing.” N.C. Gen. Stat. § 32C-2-
                                      CARMICHAEL V. CORDELL

                                             2022-NCCOA-26

                                          Opinion of the Court

       212 (2021) permits a power of attorney to “assert and maintain before a court . . . an

       action to recover property or other thing of value.”

¶ 23         Plaintiff amended his complaint to include Ms. Condon as a party and made

       allegations asserting her power of attorney and her “total control” over Defendant.

       In his discretion, the trial judge determined Plaintiff failed to comply with the

       motion’s prior notice and calendaring requirements to bar Ms. Condon’s standing or

       find conflict of interest.   The trial judge acted within his authority.    Plaintiff’s

       argument fails to show any abuse of that discretion and is overruled.

                                        V.     Conclusion

¶ 24         The trial court properly ruled assertion of personal jurisdiction over Defendant

       is unreasonable because he has no contacts with this forum. Plaintiff’s interest in

       the bank accounts and funds located in North Carolina permits the courts of this

       State to exercise in rem jurisdiction over his declaratory judgment action to address

       his claims. The trial court did not err in refusing to hear Plaintiff’s arguments

       concerning Caroline Condon’s standing and asserted conflicts of interest. We affirm

       in part, reverse in part, and remand for further proceedings.

             AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

             Judges Carpenter and Gore concur.