Plaintiff filed this action for declaratory judgment seeking to have terminated its rights and duties with respect to a contract it entered into with defendant on 11 February 1970. The contract provided that defendant "shall render such consulting and advisory services as may from time to time be requested of him by [plaintiff] Corporation, consistent with the type of services he rendered during his prior employment. . . ." The contract further provided that, although plaintiff's home office and two manufacturing plants were located in North Carolina, defendant was not required to live in North Carolina. As part of his services defendant agreed that during the life of the contract he would reveal to plaintiff's board of directors "all matters coming to his attention pertaining to the business or interest of Corporation." As partial compensation plaintiff maintained an $100,000 life insurance policy on defendant, which was subsequently incorporated on 29 October 1970 into a trust agreement set up with The Northwestern Bank in North Wilkesboro, North Carolina.
On 1 March 1979, defendant moved pursuant to G.S. 1-75.4 and G.S. 1A-1, Rule 12(b)(2) to dismiss the action on the ground that the court lacked jurisdiction over defendant's person. Defendant's motion alleged that plaintiff's action involved "the construction of a contract under the terms of which the defendant is to perform services for the plaintiff." The motion further stated that "defendant is a resident of the State of Connecticut and all services rendered hereunder by the defendant to the plaintiff were rendered in the State of New York and no services were rendered by the defendant to the plaintiff within the State of North Carolina." Defendant, therefore, concluded that the "service of summons upon the defendant was void for the reason that the defendant was beyond the jurisdiction of this Court."
Defendant filed an affidavit dated 5 March 1979 in support of his motion to dismiss, wherein he swore the following:
In a verified response to defendant's motion to dismiss, plaintiff stated that it had properly served process on defendant pursuant to G.S. 1A-1, Rule 4(j)(9)(b), as evidenced by the registry receipt attached to the motion. Responding to defendant's contention that he performed no services pursuant to the contract in North Carolina, plaintiff averred that "[s]ince all manufacturing facilities of the plaintiff are physically located in the State of North Carolina, and since the management personnel of the corporation are located in the State of North Carolina, any advice or consultation required of the defendant under his February 11, 1970 Agreement would necessarily require the defendant to perform services for the plaintiff within the State of North Carolina." Plaintiff stated that defendant's agreement to perform services within North Carolina is evidenced by the contract provision that defendant would not be required to live in the vicinity of North Wilkesboro, North Carolina. Plaintiff stated further that defendant had contact with North Carolina in that the life insurance policy under which he was insured was handled by Northwestern Bank, and defendant's monthly compensation checks were drawn on the same bank. Plaintiff concluded that it would be impossible for defendant to fulfill the contract terms without coming into contact with plaintiff's physical location in North Carolina.
On hearing, the trial court made findings of fact which were substantially similar to those facts alleged in defendant's affidavit, including the following:
Plaintiff thereafter appealed pursuant to G.S. 1-277(b).
MORRIS, Chief Judge.
The sole question posed for decision is whether the trial court acquired personal jurisdiction over defendant pursuant to G.S. 1-75.4(5) and Rule 4(j) of the North Carolina Rules of Civil Procedure. G.S. 1-75.4 provides, in pertinent part, as follows:
A court of this State having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to Rule 4(j) of the Rules of Civil Procedure under any of the following circumstances:
. . .
(5) Local Services, Goods or Contracts. — In any action which:
(a) Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff's benefit, by the defendant to perform services within this State or to pay for services to be performed in this State by the plaintiff. . . .
G.S. 1A-1, Rule 4(j), prescribes the manner of service of process in any action where the State has acquired personal jurisdiction by G.S. 1-75.4. The manner of service of process is not disputed.
In order to exercise jurisdiction over a nonresident defendant under these sections, a court must have proper statutory authorization, and its exercise of such jurisdiction must comport with the requirements of due process. United Buying Group, Inc. v. Coleman, 296 N.C. 510, 251 S.E.2d 610 (1979); Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629 (1977). We must, therefore, determine whether personal jurisdiction may be exercised over defendant on the basis of the contract between the parties in this case.
With respect to statutory authorization, we recognize that the provisions of G.S. 1-75.4, commonly referred to as the "longarm" statute, are to be liberally construed in favor of finding personal jurisdiction. Munchak Corp. v. Riko Enterprises, Inc., 368 F. Supp. 1366 (M.D.N.C. 1973); Telerent Leasing Corp. v. Equity Assocs., Inc., 36 N.C. App. 713, 245 S.E.2d 229 (1978). This section is only part of a broad legislative attempt to assert personal jurisdiction over nonresident defendants to the full extent permitted by the Due Process Clause of the United States Constitution. Dillon v. Numismatic Funding Corp., supra. However, in order for G.S. 1-75.4(5)(a) to apply to the contract under consideration, the contract must embody "a promise, made anywhere to the plaintiff" by the defendant "to perform services within this State." Here, the contract required that defendant perform certain consulting services, and in fact defendant did perform such services on two occasions via long distance telephone conversation. However, the contract is silent as to whether those services were to be performed in North Carolina. We need not determine whether the contract is in accord with G.S. 1-75.4(5)(a), since we hold that even if the statute is satisfied here, due process is not.
"[D]ue process, and not the language of the statute, is the ultimate test of `long-arm' jurisdiction over a nonresident. . . ." Chadbourn, Inc. v. Katz, 285 N.C. 700, 706, 208 S.E.2d 676, 680 (1974). The due process doctrine requires that in order to subject a nonresident defendant to a judgment in personam, he must have 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". International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L.Ed. 95, 102, 66 S.Ct. 154, 158 (1945); United Buying Group, Inc. v. Coleman, supra; Dillon v. Numismatic Funding Corp., supra; Telerent Leasing Corp. v. Equity Assocs., Inc., supra. In determining whether there are sufficient minimum contacts to invoke in personam jurisdiction, the interests of and fairness to both plaintiff and defendant must be carefully weighed and considered. Dillon v. Numismatic Funding Corp., supra. We find language from Farmer v. Ferris, 260 N.C. 619, 625, 133 S.E.2d 492, 497 (1963), pertinent:
Whether the type of activity conducted [by defendant] within the State is adequate to satisfy the requirements [of due process] depends upon the facts of the particular case. Perkins v. Benguet Consolidated Mining Co.,
342 U.S. 437, 445,
96 L.Ed. 485, 492. It seems . . . that the question cannot be answered by applying a mechanical formula or rule of thumb, but by ascertaining what is fair and reasonable and just in the circumstances. In the application of this flexible test, a relevant inquiry is whether defendant engaged in some act or conduct by which [he] may be said to have invoked the benefits and protections of the law of the forum. Hanson v. Denckla,
357 U.S. 235, 253,
2 L.Ed.2d 1283, 1298; International Shoe Co. v. Washington, supra, U.S. p. 319, L.Ed. p. 104.
See also Parris v. Garner Commercial Disposal, Inc., 40 N.C. App. 282, 253 S.E.2d 29, cert. denied and appeal dismissed, 297 N.C. 455, 256 S.E.2d 808 (1979). Absent such purposeful activity by defendant in the forum State, there can be no contact sufficient to justify personal jurisdiction over defendant. United Buying Group, Inc. v. Coleman, supra.
This lawsuit revolves around defendant's alleged connection with North Carolina. It is well settled that a single contract can provide the basis for the exercise of jurisdiction over a nonresident defendant. McGee v. International Life Ins. Co., 355 U.S. 220, 223, 2 L.Ed.2d 223, 226, 78 S.Ct. 199, 201 (1957) (Where the Court said: "It is sufficient for purposes of due process that the suit [is] based on a contract which [has] substantial connection with [the forum] State."); Chadbourn, Inc. v. Katz, supra; Byrum v. Register's Truck Equip. Co., 32 N.C. App. 135, 231 S.E.2d 39 (1977). However, it remains essential that "there be some act by which the defendant purposefully avails [himself] of the privilege of conducting activities within the forum State. . . ." Hanson v. Denckla, 357 U.S. 235, 253, 2 L.Ed.2d 1283, 1298, 78 S.Ct. 1228, 1240 (1958). In our opinion, neither the contract in dispute nor any activities by defendant provide sufficient minimum contacts with this State so as to satisfy the requirements of due process. The findings of fact make it clear that the contract was entered into outside of North Carolina; that the contract is governed by the law of another state; that there is no provision in the contract requiring defendant to perform services within North Carolina; that defendant has performed all services under the contract outside of North Carolina; and that for the life of the contract defendant has not been in this State for any purpose. These findings are supported by competent evidence and are, therefore, conclusive on appeal. Goldman v. Parkland of Dallas, Inc., 277 N.C. 223, 176 S.E.2d 784 (1970). Therefore, defendant's connection with the State of North Carolina is far too attenuated, under the standards implicit in the Due Process Clause of the Constitution, to justify imposing upon him the "burden and inconvenience" of defense in North Carolina. See Kulko v. California Superior Court, 436 U.S. 84, 56 L.Ed.2d 132, 98 S.Ct. 1690, rehearing denied, 438 U.S. 908, 57 L.Ed.2d 1150, 98 S.Ct. 3127 (1978). We hold that the trial court properly dismissed plaintiff's action for want of personal jurisdiction.
The judgment entered thereon is hereby
Affirmed.
Judges PARKER and HILL concur.