{ "id": 3805951, "name": "B. KELLEY ENTERPRISES, INC., Plaintiff-Appellant v. VITACOST.COM, INC., Defendant-Appellee", "name_abbreviation": "B. Kelley Enterprises, Inc. v. Vitacost.com, Inc.", "decision_date": "2011-05-03", "docket_number": "No. COA10-645", "first_page": "592", "last_page": "599", "citations": [ { "type": "official", "cite": "211 N.C. App. 592" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "622 S.E.2d 490", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12634497, 12634498 ], "year": 2005, "opinion_index": 0, "case_paths": [ "/se2d/622/0490-01", "/se2d/622/0490-02" ] }, { "cite": "612 S.E.2d 184", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12632787 ], "weight": 2, "pin_cites": [ { "page": "193" }, { "page": "194", "parenthetical": "Steelman, J. dissenting" } ], "opinion_index": 0, "case_paths": [ "/se2d/612/0184-01" ] }, { "cite": "659 S.E.2d 762", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12640826 ], "weight": 2, "year": 2008, "pin_cites": [ { "page": "764" }, { "page": "767" } ], "opinion_index": 0, "case_paths": [ "/se2d/659/0762-01" ] }, { "cite": "453 S.E.2d 165", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "opinion_index": 0 }, { "cite": "339 N.C. 608", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2559772 ], "year": 1995, "opinion_index": 0, "case_paths": [ "/nc/339/0608-01" ] }, { "cite": "437 S.E.2d 884", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "pin_cites": [ { "page": "887" } ], "opinion_index": 0 }, { "cite": "113 N.C. 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Stat. \u00a7 48.193", "category": "laws:leg_statute", "reporter": "Fla. Stat.", "opinion_index": 0 }, { "cite": "274 S.E.2d 259", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1981, "pin_cites": [ { "page": "260" }, { "page": "260" } ], "opinion_index": 0 }, { "cite": "50 N.C. App. 553", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 2677424 ], "weight": 2, "year": 1981, "pin_cites": [ { "page": "554" } ], "opinion_index": 0, "case_paths": [ "/nc-app/50/0553-01" ] }, { "cite": "Fla. Stat. Ann. \u00a7 48.194", "category": "laws:leg_statute", "reporter": "Fla. Stat. Ann.", "year": 2006, "pin_cites": [ { "page": "(1)" } ], "opinion_index": 0 }, { "cite": "Fla. Stat. \u00a7 48.194", "category": "laws:leg_statute", "reporter": "Fla. Stat.", "weight": 2, "opinion_index": 0 }, { "cite": "577 S.E.2d 184", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "pin_cites": [ { "page": "187", "parenthetical": "internal citation omitted" } ], "opinion_index": 0 }, { "cite": "156 N.C. App. 583", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9191647 ], "year": 2003, "pin_cites": [ { "page": "587", "parenthetical": "internal citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/156/0583-01" ] }, { "cite": "478 S.E.2d 513", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "pin_cites": [ { "page": "516" } ], "opinion_index": 0 }, { "cite": "124 N.C. App. 629", "category": "reporters:state", "reporter": "N.C. 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App.", "case_ids": [ 11914810 ], "year": 1996, "pin_cites": [ { "page": "649" } ], "opinion_index": 0, "case_paths": [ "/nc-app/123/0647-01" ] }, { "cite": "360 N.C. 158", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 3788280 ], "year": 2005, "opinion_index": 0, "case_paths": [ "/nc/360/0158-01" ] }, { "cite": "170 N.C. App. 17", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9004086 ], "weight": 2, "pin_cites": [ { "page": "30" }, { "page": "31" } ], "opinion_index": 0, "case_paths": [ "/nc-app/170/0017-01" ] }, { "cite": "349 S.E.2d 552", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "318 N.C. 421", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4736107 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/318/0421-01" ] }, { "cite": "189 N.C. App. 755", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 4156804 ], "year": 2008, "pin_cites": [ { "page": "757" } ], "opinion_index": 0, "case_paths": [ "/nc-app/189/0755-01" ] } ], "analysis": { "cardinality": 766, "char_count": 17069, "ocr_confidence": 0.722, "pagerank": { "raw": 7.71345629579384e-08, "percentile": 0.4538718280486623 }, "sha256": "61210c3dab53e48da8cf58d92d8df48d035fb174ea4d361c4b3014553ee73fe8", "simhash": "1:11097c3db2ea06f1", "word_count": 2789 }, "last_updated": "2023-07-14T21:31:50.212435+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge MARTIN and Judge ERVIN concur." ], "parties": [ "B. KELLEY ENTERPRISES, INC., Plaintiff-Appellant v. VITACOST.COM, INC., Defendant-Appellee" ], "opinions": [ { "text": "McGEE, Judge.\nB. Kelley Enterprises, Inc. (Plaintiff) filed a complaint on 18 February 2009 against Vitacost.com, Inc. (Defendant), seeking to collect money due under a rental agreement. Plaintiff also sought to recover late fees, interest, attorneys\u2019 fees, and costs. Defendant filed an answer in which it pleaded, inter alia, the defenses of res judicata and collateral estoppel. Defendant contended that the matters in dispute had already been determined in an earlier action filed by Defendant, in which Defendant had been granted default judgment against Plaintiff. In the present case, Defendant filed a motion for judgment on the pleadings, pursuant to N.C. Gen. Stat. \u00a7 1A-1, Rule 12(c), on 3 February 2010. In an order entered 8 March 2010, the trial court granted Defendant\u2019s motion. Plaintiff appeals.\nPlaintiff alleged in its complaint that Plaintiff and Defendant entered into an agreement on or about 11 August 2008, whereby Defendant agreed to lease certain equipment and purchase certain supplies from Plaintiff for a period of sixty months. Defendant failed to purchase the agreed upon minimum amount of supplies for the month of February 2009. Plaintiff \u201caccelerated the rental payments under the Rental Agreement as provided therein\u201d and filed its complaint on 18 February 2009.\nI. The Florida Action\nThe fundamental issue in this case involves a judgment in a lawsuit filed by Defendant against Plaintiff in Palm Beach County, Florida (the Florida action). We note that Defendant\u2019s complaint is file-stamped 2 February 2009, but is dated 4 February 2009 and, in its brief, Defendant states that it \u201csued\u201d Plaintiff on 5 February 2009. In the Florida action, Defendant sought, inter alia, cancellation of the rental agreement, as well as damages based on alleged defects in the equipment provided to Defendant by Plaintiff. In the present case, Defendant attached to its answer a \u201creturn of service\u201d of a summons from the Florida action, signed by a \u201cNC Process Server.\u201d The process server attested that he served Plaintiff \u201cin compliance with Florida Statute 48.031 or other state statute as applicable.\u201d A deputy clerk of Palm Beach County, Florida entered a default on 16 March 2009. \u201c[A]fter entry of default against [Plaintiff][,]\u201d a judge of the Florida Circuit Court entered a \u201cFinal Judgment\u201d on 6 April 2009.\nII. Service of Process\nPlaintiff first argues that the trial court in the action before us erred in granting Defendant\u2019s motion for judgment on the pleadings because the Florida court lacked personal jurisdiction over Plaintiff in the Florida action. Plaintiff contends that Defendant never properly served Plaintiff with process and, therefore, the Florida court\u2019s judgment \u201cwould have no res judicata effect on the action brought by Plaintiff in North Carolina.\u201d We agree.\n\u201cThis Court reviews a trial court\u2019s grant of a motion for judgment on the pleadings de novo.\u201d Carpenter v. Carpenter, 189 N.C. App. 755, 757, 659 S.E.2d 762, 764 (2008). \u201cA motion for judgment on the pleadings should not be granted unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law.\u201d Id. at 761, 659 S.E.2d at 767.\nOur Supreme Court summarized the doctrines of res judicata and collateral estoppel in Thomas M. McInnis & Assoc., Inc. v. Hall, 318 N.C. 421, 349 S.E.2d 552 (1986).\nThus, under res judicata as traditionally applied, a final judgment on the merits in a prior action will prevent a second suit based on the same cause of action between the same parties or those in privity with them. When the plaintiff prevails, his cause of action is said to have \u201cmerged\u201d with the judgment; where defendant prevails, the judgment \u201cbars\u201d the plaintiff from further litigation. In either situation, all matters, either fact or law, that were or should have been adjudicated in the prior action are deemed concluded. Under collateral estoppel as traditionally applied, a final judgment on the merits prevents relitigation of issues actually litigated and necessary to the outcome of the prior action in a later suit involving a different cause of action between the parties or their privies. Traditionally, courts limited the application of both doctrines to parties or those in privity with them by requiring so-called \u201cmutuality of estoppel\u201d: both parties had to be bound by the prior judgment.\nId. at 428-29, 439 S.E.2d at 556-57 (internal citations omitted).\nIn a dissenting opinion adopted per curiam by our Supreme Court, Judge Steelman stated: \u201cFor either doctrine to apply, the prior action must have been a final judgment on the merits in a court of competent jurisdiction.\u201d Sawyers v. Farm Bureau Ins. of N.C., Inc., 170 N.C. App. 17, 30, 612 S.E.2d 184, 193 (Steelman, J. dissenting), rev\u2019d per curiam for reasons stated in the dissent, 360 N.C. 158, 622 S.E.2d 490 (2005). \u201cA judgment by default is a final judgment^]\u201d Moore v. Sullivan, 123 N.C. App. 647, 649, 473 S.E.2d 659, 660 (1996). However, \u201cabsent valid service of process, a court does not acquire personal jurisdiction over the defendant and the action must be dismissed.\u201d Fender v. Deaton, 130 N.C. App. 657, 659, 503 S.E.2d 707, 708 (1998). Thus, in determining whether judgment on the pleadings was proper in the present case based on res judicata and collateral estoppel, we must determine whether the judgment in the Florida action was a final judgment and whether it was entered by a court of competent jurisdiction.\n\u201cThe introduction into evidence of a copy of the foreign judgment, authenticated pursuant to Rule 44 of the Rules of Civil Procedure, establishes a presumption that the judgment is entitled to full faith and credit.\u201d Gardner v. Tallmadge, \u2014 N.C. App. -, \u2014, 700 S.E.2d 755, 759 (2010), aff'd - N.C. \u2014, - S.E.2d - (2011). \u201cHowever, a judgment of a court of another state may be attacked in North Carolina, but only upon the grounds of lack of jurisdiction, fraud in the procurement, or as being against public policy.\u201d Thrasher v. Thrasher, 4 N.C. App. 534, 540, 167 S.E.2d 549, 553 (1969).\nDefendant argues that Plaintiff failed to properly challenge personal jurisdiction in the action before us, because Plaintiffs complaint in the present case contains no allegations concerning the Florida action. Defendant also contends that it satisfied its burden of showing that the Florida judgment was authentic and that Plaintiff failed to satisfy its burden \u201cto bring forward evidence to rebut the presumption of full faith and credit.\u201d However, we note that Defendant filed a motion for judgment on the pleadings in the present case. \u201c[BJurdens of proof have no place in a motion for judgment on the pleadings, a motion which is ruled upon in the absence of any evidence^]\u201d Benson v. Barefoot, 148 N.C. App. 394, 396, 559 S.E.2d 244, 246 (2002).\nAs stated above, in determining whether res judicata and collateral estoppel warrant a judgment on the pleadings, a trial court must first determine whether the prior action resulted in a final judgment by a court of competent jurisdiction. \u201cOnly the pleadings and exhibits which are attached and incorporated into the pleadings may be considered by the trial court.\u201d Helms v. Holland, 124 N.C. App. 629, 633, 478 S.E.2d 513, 516 (1996). Thus, the trial court in the present case was required to make its determination based solely on the pleadings and on Defendant\u2019s answer, which included copies of the record in the Florida action.\nPlaintiff does not argue that the Florida judgment was not a final judgment. Rather, Plaintiff contends that, because of improper service, the Palm Beach County Circuit Court lacked jurisdiction over Plaintiff. Plaintiff also contends that service in the present case was improper under North Carolina law because Plaintiff was served by a private process server, and not by the Forsyth County Sheriff\u2019s Office. Defendant counters that Florida\u2019s law regarding service of process controls, and that service in the Florida action was proper under Florida law.\nWe must first determine whether North Carolina law or Florida law controlled when service was attempted in the Florida action.\nSubstantive questions of law \u2018are controlled by the law of the place \u2014 the lex loci-, whereas matters of procedure are controlled by the law of the forum \u2014 the lex fori.' Although North Carolina is the forum for the current suit, the validity of the judgment to bar the current action must be reviewed according to the laws of [Florida].\nFreeman v. Pacific Life Ins. Co., 156 N.C. App. 583, 587, 577 S.E.2d 184, 187 (2003) (internal citation omitted). Thus, Florida\u2019s rules of procedure are controlling.\nUnder Florida law, service of process on persons located outside of Florida is governed by Fla. Stat. \u00a7 48.194, which states: \u201cExcept as otherwise provided herein, service of process on persons outside of this state shall be made in the same manner as service within this state by any officer authorized to serve process in the state where the person is served.\u201d Fla. Stat. Ann. \u00a7 48.194(1) (West 2006). Our Court, in Russ v. Russ, 50 N.C. App. 553, 274 S.E.2d 259 (1981), previously interpreted Florida\u2019s service of process statutes. In Russ, the plaintiff sought to enforce a default judgment entered by a Florida court that granted the plaintiff alimony. Id. at 553, 274 S.E.2d at 260. A North Carolina trial court ruled that the Florida judgment was entitled to full faith and credit; however, our Court reversed, holding that service in the original action was improper. Id. The defendant in Russ was served in North Carolina by a postal official, as evidenced by a return receipt signed at the defendant\u2019s house by his stepdaughter. Id. In determining whether this service was sufficient to grant the Florida court personal jurisdiction over the defendant, we conducted the following analysis:\nAn examination of Florida law reveals that Fla. Stat. \u00a7 48.193, that state\u2019s long-arm statute, gives Florida jurisdiction, with respect to proceedings for alimony or child support, over any person who resided in the state before or at the time of the commencement of the action. Fla. Stat. \u00a7 48.194 governs service of process upon out-of-state defendants in cases such as the one sub judice. The statute allows service of process by \u201cany officer authorized to serve process in the state where the person is served\u201d in the same manner as service within Florida could be accomplished.\nService within Florida is governed, for our purposes, by two statutes. Fla. Stat. \u00a7 48.021(1) provides, in pertinent part, that \u201c(a)ll process shall be served by the sheriff of the county where the person to be served is found ....\u201d\u00a7 48.031 goes on from there; and in 1977, when service was made, provided that service could be completed by \u201cdelivering a copy of it to the person to be served ... or by leaving the copies at his usual place of abode with some person of the family who is 15 years of age or older and informing the person of their contents.\u201d\nUpon examination of the statutes cited above, it appears to this Court that Florida requires service of process within the state to be by the county sheriff or special process server appointed by the county sheriff. Florida carries this requirement over to service of process outside the state, except in certain enumerated situations, by requiring that out-of-state defendants be served by officers rather than postal officials.\nRuss, 50 N.C. App. at 554, 274 S.E.2d at 260.\nWe also find guidance in Florida\u2019s judicial interpretations of its service of process requirements. In Takiff By And Through Stateman v. Takiff, 683 So. 2d 595 (Fla. Dist. Ct. App. 1996), the Florida District Court of Appeal addressed whether out-of-state service had been properly effectuated in Illinois. In Takiff, the plaintiff had filed for dissolution of marriage against her husband, the defendant. Id. at 596. The defendant lived in Cook County, Illinois, and was served there by a \u201cprocess server specifically appointed by the Dade [County, Florida] Circuit Court.\u201d Id. In determining that service was proper, the Florida District Court of Appeal conducted the following analysis:\nUnder Illinois law, in Cook County, which has a population of over one million, process must be served \u201ceither by a sheriff or by a disinterested person appointed by the court.\u201d Ill.Rev.Stat. ch. 110, para. 2-202(a) (1985). The husband successfully argued below that the \u201ccourt\u201d referred to in that Illinois statute must be an Illinois court. We disagree, and hold that the service in Illinois, concededly performed by a disinterested person, was sufficient. The Dade County Circuit Court had specially appointed the Illinois private investigator to serve the husband, and thus complied with both Florida and Illinois statutory requirements.\nId.; see also Thompson v. King, 523 F. Supp. 180, 183 (M.D. Fla. 1981) (\u201c3. Defendant King was personally served in the manner prescribed by Fed.R.Civ.P. 4(d)(1), which parallels the manner of in-state service upon an individual prescribed by Florida law. 4. The Deputy United States Marshal who served King was authorized to serve process within the state of South Carolina. It logically follows from these' facts that the manner of effecting service upon the defendant herein was proper.\u201d).\nTherefore, it appears that Florida\u2019s statutes governing service of process require out-of-state service to be carried out by persons authorized to conduct such service by the laws of the state where the service will occur. N.C. Gen. Stat. \u00a7 1A-1, Rule 4(a) (2009), which governs service of process within North Carolina, states that the \u201cproper person shall be the sheriff of the county where service is to be made or some other person duly authorized by law to serve summons.\u201d N.C.G.S. \u00a7 1A-1, Rule 4(h) further provides:\nWhen proper officer not available. \u2014 If at any time there is not in a county a proper officer, capable of executing process, to whom summons or other process can be delivered for service, or if a proper officer refuses or neglects to execute such process, or if such officer is a party to or otherwise interested in the action or proceeding, the clerk of the issuing court, upon the facts being verified before him by written affidavit of the plaintiff or his agent or attorney, shall appoint some suitable person who, after he accepts such process for service, shall execute such process in the same manner, with like effect, and subject to the same liabilities, as if such person were a proper officer regularly serving process in that county.\nService must generally be carried out by the sheriff of the county where service is to occur. While the clerk of the issuing court may appoint an alternative person to carry out service, that \u201c[c]lerk is not required or authorized to appoint a private process server as long as the sheriff is not careless in executing process.\u201d Williams v. Williams, 113 N.C. App. 226, 229-30, 437 S.E.2d 884, 887 (1994) aff'd, 339 N.C. 608, 453 S.E.2d 165 (1995).\nThere is no evidence in the record that the Clerk of Court for Palm Beach County appointed the process server used in the present case; nor is there any evidence that such an appointment would have been justified by neglect of the sheriff. Rather, the summons was directed to the attention of: \u201cAll and Singular the Sheriffs of the State.\u201d Thus, in the Florida action, service of process should have been carried out by the Sheriff of Forsyth County \u2014 the sheriff in the county where Plaintiff was to be served. Because service of process was not properly executed, the Palm Beach County Circuit Court was not a court of \u201ccompetent jurisdiction.\u201d See Fender, 130 N.C. App. at 659, 503 S.E.2d at 708. Therefore, the doctrines of res judicata and collateral estoppel do not make the Florida judgment a bar to Plaintiffs complaint. Sawyers, 170 N.C. App. at 31, 612 S.E.2d at 194 (Steelman, J. dissenting). We must therefore reverse the trial court\u2019s order granting judgment on the pleadings in this action.\nReversed and remanded.\nChief Judge MARTIN and Judge ERVIN concur.", "type": "majority", "author": "McGEE, Judge." } ], "attorneys": [ "Carruthers & Roth, P.A., by Rachel Scott Decker and Kevin A. Rust, for Plaintiff-Appellant.", "Bell, Davis & Pitt, P.A., by Bradley C. Friesen, for DefendantAppellee." ], "corrections": "", "head_matter": "B. KELLEY ENTERPRISES, INC., Plaintiff-Appellant v. VITACOST.COM, INC., Defendant-Appellee\nNo. COA10-645\n(Filed 3 May 2011)\nProcess and Service\u2014 Florida law \u2014 improper service \u2014 lack of personal jurisdiction \u2014 no res judicata or collateral estoppel effect on North Carolina action\nThe trial court erred by granting defendant\u2019s motion for judgment on the pleadings because a Florida court lacked personal jurisdiction over plaintiff in the Florida action. Defendant never properly served plaintiff with process, and therefore, the Florida court\u2019s judgment had no res judicata or collateral estoppel effect on plaintiff\u2019s North Carolina action.\nAppeal by Plaintiff from order entered 8 March 2010 by Judge Catherine C. Eagles in Superior Court, Forsyth County. Heard in the Court of Appeals 15 November 2010.\nCarruthers & Roth, P.A., by Rachel Scott Decker and Kevin A. Rust, for Plaintiff-Appellant.\nBell, Davis & Pitt, P.A., by Bradley C. Friesen, for DefendantAppellee." }, "file_name": "0592-01", "first_page_order": 600, "last_page_order": 607 }