NO. COA13-1030
NORTH CAROLINA COURT OF APPEALS
Filed: 6 May 2014
GECMC 2006-C1 CARRINGTON OAKS,
LLC,
Plaintiff,
v. Mecklenburg County
No. 12 CVS 3684
SAMUEL WEISS and EZRA BEYMAN,
Defendants.
Appeal by defendant Samuel Weiss from order entered
17 April 2013 by Judge W. Robert Bell in Mecklenburg County
Superior Court. Heard in the Court of Appeals 3 February 2014.
McGuireWoods, LLP, by William O. L. Hutchinson, Steven N.
Baker, and T. Richmond McPherson, III, for plaintiff–
appellee.
Copeland, Richards & Anderson, PLLC, by Shawn A. Copeland
and Michael F. Anderson, for defendant–appellant Samuel
Weiss.
MARTIN, Chief Judge.
Defendant Samuel Weiss (“defendant Weiss”) appeals from an
order denying his motion to dismiss the Verified Amended
Complaint (“the Complaint”) filed by plaintiff GECMC 2006-C1
Carrington Oaks, LLC (“GECMC”) pursuant to N.C.G.S. § 1A-1,
Rule 12(b)(2). We affirm.
GECMC, a North Carolina-based limited liability company,
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filed the Complaint in Mecklenburg County Superior Court against
defendant Weiss and against Ezra Beyman (“defendant Beyman”),
both citizens of Monsey, New York. In its Complaint, GECMC
alleged that it was the holder of a promissory note (“the Note”)
for $28,290,000.00 made by Empirian at Carrington Place, LLC
(“Empirian”) to Deutsche Bank Mortgage Capital, LLC and its
successors and assigns. Defendant Beyman signed the Note as
president of Empirian, which is a Delaware-based limited
liability company with its principal place of business in
Montvale, New Jersey. The Note was secured by a deed of trust
“covering certain real property located in Mecklenburg County,
North Carolina.”
Attached to the Complaint was a Guaranty and Indemnity
(“the Guaranty”) which expressly references the Note executed by
defendant Beyman as President of Empirian. The Complaint
alleged that such Guaranty was signed by defendants Beyman and
Weiss. The document expressly provides that defendants Beyman
and Weiss individually “unconditionally and irrevocably
guarantee[] up to $6,240,000.00 of the principal balance of the
Loan,” until such time as certain specified conditions are met,
as when there is no event of default continuing. The Guaranty
also contains the following provision, entitled “Submission To
Jurisdiction”:
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EACH GUARANTOR, TO THE FULL EXTENT PERMITTED
BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, (A) SUBMITS TO PERSONAL
JURISDICTION IN THE STATE IN WHICH THE
PROPERTY IS LOCATED OVER ANY SUIT, ACTION OR
PROCEEDING BY ANY PERSON ARISING FROM OR
RELATING TO THIS GUARANTY, (B) AGREES THAT
ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION SITTING IN THE COUNTY
AND STATE IN WHICH THE PROPERTY IS LOCATED,
(C) SUBMITS TO THE JURISDICTION OF SUCH
COURTS, AND (D) AGREES THAT NEITHER OF THEM
WILL BRING ANY ACTION, SUIT OR PROCEEDING IN
ANY OTHER FORUM (BUT NOTHING HEREIN SHALL
AFFECT THE RIGHT OF LENDER TO BRING ANY
ACTION, SUIT OR PROCEEDING IN ANY OTHER
FORUM).
According to the Complaint, Empirian defaulted under the
terms of the Note and GECMC demanded payment for the
indebtedness due, but Empirian refused and still refuses to pay,
and defendants Beyman and Weiss defaulted “for failure to pay
the amounts due under the Note and the Empirian Guaranty.”
GECMC claimed that defendants breached their commercial guaranty
agreement with GECMC and sought to recover the principal amount
of $6,240,000.00, as well as interest accrued, reasonable costs,
and attorney’s fees.
Defendant Weiss moved to dismiss the Complaint pursuant to
N.C.G.S. § 1A-1, Rules 12(b)(2), (b)(4), and (b)(5), for lack of
personal jurisdiction, insufficiency of process, and
insufficiency of service of process, respectively. After
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conducting a hearing, the court denied defendant Weiss’s motion
to dismiss “to the extent that it [sought] dismiss[al] for
insufficiency of process and service of process,” but deferred
ruling on the motion to dismiss for lack of personal
jurisdiction to allow GECMC to “take jurisdictional discovery of
[d]efendant Weiss.”
In his affidavit and in his briefs submitted in support of
his motion to dismiss for lack of personal jurisdiction,
defendant Weiss asserted that, although the Guaranty is signed
by what “appears to be [his] signature” underneath the word
“GUARANTOR” and above the words “SAMUEL WEISS, an individual,”
defendant Weiss attested that he “was never presented with this
Guaranty Agreement,” and that he “did not sign and would not
have signed this Guaranty Agreement” because he “had no intent
to expose [him]self in a manner greater than [his] capital
contribution.”
In its briefs submitted in support of its opposition to
defendant Weiss’s motion to dismiss, GECMC acknowledged that
defendant Weiss “admitted in his deposition testimony that he
did not know the contents of all the documents he executed in
connection with [this] transaction,” but argued that defendant
Weiss’s “failure to exercise diligence in executing the loan
documents does not provide [defendant Weiss] with a shield to
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avoid liability on the Guaranty Agreement after he benefitted
financially from the loan transaction before the loan went into
default.” GECMC also submitted an affidavit from Dmitry Sulsky,
an asset manager of a limited liability company, the sole
non-member manager of GECMC, and special servicer of the loan
that is the subject of this action. Mr. Sulsky’s affidavit also
included as exhibits documents that he attests “are maintained
in the course of the regularly conducted business activities” of
his company, which include opinion letters from counsel involved
in the transaction at issue that repeatedly refer to defendants
Beyman and Weiss as the “Guarantors” of the transaction.
After conducting a hearing and considering the parties’
briefs and corresponding affidavits, on 17 April 2013, the trial
court entered an order in which it found that, “[a]s a condition
of making the loan to Empirian, Deutsche Bank required that
[d]efendant Samuel Weiss and [d]efendant Ezra Beyman execute a
guaranty agreement,” that “[d]efendant Weiss signed and executed
a guaranty agreement guaranteeing $6,240,000 of the principal
balance of the loan made to Empirian,” and that “[t]he guaranty
agreement executed by Weiss contains a ‘consent to jurisdiction’
clause whereby [d]efendant Samuel Weiss ‘voluntarily . . .
submit[ted] to personal jurisdiction in the State in which the
property is located.’” The court then concluded that it had
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personal jurisdiction over defendant Weiss “by virtue of the
agreement in which [d]efendant Weiss expressly submitted to
jurisdiction in the state where the underlying property is
situated, North Carolina.” The trial court also concluded that
its exercise of personal jurisdiction of defendant Weiss
“comports with Due Process and [that] the maintenance of suit
against Samuel Weiss in North Carolina does not offend
traditional notions of fair play and substantial justice.”
Defendant Weiss appeals from the trial court’s 17 April 2013
denial of his motion to dismiss the Complaint pursuant to
N.C.G.S. § 1A-1, Rule 12(b)(2). Defendant Beyman, against whom
the court entered a default judgment upon GECMC’s motion, is not
a party to this appeal.
_________________________
Defendant Weiss first contends the trial court erred when
it concluded that it had personal jurisdiction over him because
he asserts that the court did not consider competent evidence
when it found that defendant Weiss “signed and executed a
guaranty agreement guaranteeing $6,240,000 of the principal
balance of the loan made to Empirian.” Thus, defendant Weiss
argues that the court erred by concluding that he “expressly
submitted to jurisdiction in the state where the underlying
property is situated, North Carolina,” “by virtue of the
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agreement.” We disagree.
Although defendant Weiss’s appeal is from an interlocutory
order, a defendant has “an immediate right of appeal from the
denial of their motion to dismiss for lack of personal
jurisdiction.” Retail Investors, Inc. v. Henzlik Inv. Co.,
113 N.C. App. 549, 552, 439 S.E.2d 196, 198 (1994); see also
N.C. Gen. Stat. § 1-277(b) (2013) (“Any interested party shall
have the right of immediate appeal from an adverse ruling as to
the jurisdiction of the court over the person or property of the
defendant or such party may preserve his exception for
determination upon any subsequent appeal in the cause.”).
The general rule requires that the trial court, “as a
prerequisite to exercising jurisdiction,” Retail Investors,
Inc., 113 N.C. App. at 552, 439 S.E.2d at 198, make two basic
inquiries: “(1) whether any North Carolina statute authorizes
the court to entertain an action against the defendant and if
so, (2) whether defendant has sufficient minimum contacts with
the state so that considering the action does not conflict with
‘traditional notions of fair play and substantial justice.’”
Id. (quoting Johnston Cnty. v. R.N. Rouse & Co., 331 N.C. 88,
96, 414 S.E.2d 30, 35 (1992)).
“A defendant may, however, consent to personal jurisdiction
and in such event, the two step inquiry is unnecessary to the
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exercise of personal jurisdiction over the defendant.” Id.
“One method of consenting to personal jurisdiction is the
inclusion in a contract of a consent to jurisdiction provision.”
Id. “This type of provision does not violate the Due Process
Clause and is valid and enforceable unless it is the product of
fraud or unequal bargaining power or unless enforcement of the
provision would be unfair or unreasonable.” Id.
“The standard of review to be applied by a trial court in
deciding a motion under Rule 12(b)(2) depends upon the
procedural context confronting the court.” Banc of Am. Sec. LLC
v. Evergreen Int’l Aviation, Inc., 169 N.C. App. 690, 693,
611 S.E.2d 179, 182 (2005). When, as here, “both the defendant
and the plaintiff submit affidavits addressing the personal
jurisdiction issues,” see id., “the court may hear the matter on
affidavits presented by the respective parties, . . . [or] the
court may direct that the matter be heard wholly or partly on
oral testimony or depositions.” Id. at 694, 611 S.E.2d at 183
(alteration and omission in original) (internal quotation marks
omitted). “If the trial court chooses to decide the motion
based on affidavits, [t]he trial judge must determine the weight
and sufficiency of the evidence [presented in the affidavits]
much as a juror.” Id. (alterations in original) (internal
quotation marks omitted). “When this Court reviews a decision
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as to personal jurisdiction, it considers only whether the
findings of fact by the trial court are supported by competent
evidence in the record; if so, this Court must affirm the order
of the trial court.” Id. (internal quotation marks omitted).
In the present case, at the hearing on defendant Weiss’s
motion to dismiss, the court was presented with evidence
consisting of defendant Weiss’s affidavit, Mr. Sulsky’s
affidavit, and defendant Weiss’s deposition, as well as the
exhibits accompanying each. In his deposition, defendant Weiss
admitted that he did “about 15, 16 deals” involving real estate
in different states with defendant Beyman’s company, one of
which was the deal at issue in the present case concerning the
Carrington Oaks property in Mecklenburg County, North Carolina.
Defendant Weiss, who has between 20 and 25 years of experience
in real estate management and ownership, said that all of his
deals with defendant Beyman’s company would follow a particular
pattern:
[T]his is the same example which I used with
all the investments that we did with
[Empirian] which related to property. Let’s
assume [a member of defendant Beyman’s
company] would say that we are about to
approach to buy a particular property in a
particular state for $30 million, the cost
to buy the property. Of the $30 million, he
will probably get from the bank
approximately 20 to 22 million, about two-
thirds, maybe a little bit more. Then the
cash equity required to establish such a
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deal would be let’s say $8 million. From
the $8 million, we put up 75 percent, “we”
meaning our family, Beyman puts up
25 percent. We get a return on the
75 percent first, and we have a 25 percent
upside after everybody’s paid back——only if
there’s an upside. If there’s a certain
return of 9 percent, 10 percent, 11 percent
on the money, then there’s an upside, so if
there’s an upside. That’s a generalization
of it. Now, if we take $8 million,
75 percent of that is approximately
6 million, then I would call my family
partners, I would tell them the deal’s
coming up now, 6 million equity is required,
how much do you feel you want to invest in a
particular deal. They would give me the
numbers, I would put together the numbers.
Sometimes it would be more than enough,
sometimes it’s a little less, we’d ask
somebody else to substitute. That’s how the
deal was structured. . . . Once that was
established, $6 million came out of the
closing and was sent to one of the accounts
which Beyman established. The documents
would be drafted by Beyman’s lawyer and
reviewed by our lawyer, Elliot Gross. Once
the documents were signed, they could give
fund instructions, and the funding
instructions would follow via a wire.
Defendant Weiss also said that, when he was notified that
documents were ready for him to sign regarding a transaction
with Beyman’s company, he went to a small conference room off of
the main lobby of the Dreier Law Firm, where he was met by
someone from the firm who “came out with approximately sometimes
30, 40, 45 signature pages” and told him that the papers were
“for the transaction,” and he would sign those papers.
Defendant Weiss said that, in these interactions at the firm, he
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would be presented with signature pages for multiple documents
for a particular deal and it would take him about five to ten
minutes to sign all of the papers presented to him at that time.
He said he “understood that these were the documents which the
law firm prepared on behalf of the bank [responsible for giving
the loan] at the time,” and that he did not ask anyone at the
firm for copies of any of the documents he signed.
Here, as indicated above, defendant Weiss admitted that, of
the “15, 16 deals” he did with defendant Beyman’s company, he
“did one in North Carolina,” and agreed it was the Carrington
Oaks property in Mecklenburg County. Defendant Weiss also
admitted that his company “[h]ad a loan for [Empirian], and the
loan was established as, you know, Carrington Place [sic].”
Additionally, defendant Weiss indicated that the procedure he
followed to execute the paperwork related to this transaction
was consistent with the procedure from his other dealings with
defendant Beyman’s company. First, defendant Weiss was told by
his secretary to go to the Dreier Law Firm to sign documents
regarding the transaction. Then, upon his arrival, the firm’s
receptionist called someone, who met him and escorted him into a
small room off of the lobby and presented him with “a bunch of
papers” that he was asked to sign. After spending between five
and ten minutes signing between 25 to 35 documents, defendant
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Weiss then left without asking any questions about the contents
of the documents he was signing and without requesting copies of
the documents he was signing. Defendant Weiss then admitted in
his deposition that the signature that appeared on the signature
page of the Guaranty——which had “GUARANTOR” typed above the
signature and “SAMUEL WEISS, an individual” typed below it——
“appear[ed] to be [his] signature.” Perhaps because defendant
Weiss would not definitively admit or deny that he signed the
signature page of the Guaranty, plaintiff’s counsel questioned
defendant Weiss further. When asked whether he was claiming
that the document contained a forged signature, whether someone
else signed his name, or whether the signature on the Guaranty
was an authentic copy of his signature, defendant Weiss
repeatedly responded, “I did not say that.” Since it is the
responsibility of the trial court to determine the weight and
sufficiency of this evidence, based on our review of the record,
we conclude that there was competent evidence to support the
court’s finding that defendant Weiss signed and executed the
Guaranty that contained the consent to jurisdiction provision
that expressly submitted defendant Weiss to the jurisdiction of
the State of North Carolina.
We note that defendant Weiss purports to argue that he
cannot be bound to the consent to jurisdiction provision of the
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Guaranty because he cannot be bound to the terms of an agreement
that he signed but did not read. However, it has long been held
in this State that “one who signs a paper writing is under a
duty to ascertain its contents,” Williams v. Williams, 220 N.C.
806, 809, 18 S.E.2d 364, 366 (1942), and “in the absence of a
showing that he was willfully misled or misinformed by the
defendant as to these contents, or that they were kept from him
in fraudulent opposition to his request, he is held to have
signed with full knowledge and assent as to what is therein
contained.” Id. at 809–10, 18 S.E.2d at 366. Defendant Weiss
does not bring forward any argument in his brief that he was
“willfully misled or misinformed” about the contents of the
documents that comprised the transaction at issue, and suggests
only in a footnote and without support that, because he “did not
have a contract before him to read” during the five to ten
minutes that he chose to spend signing between 25 to
35 signature pages of legal documents in the lobby of a law
firm, the proposition that he is charged with knowledge of the
contents of the contract at issue is misplaced. However, in the
absence of any allegation that the contents of the Guaranty were
“kept” from him in fraudulent opposition to his request, we find
defendant Weiss’s suggestion unpersuasive.
Accordingly, we hold that the trial court did not err when
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it concluded that it had personal jurisdiction over defendant
Weiss “by virtue of the agreement in which [d]efendant Weiss
expressly submitted to jurisdiction in the state where the
underlying property is situated, North Carolina.” Moreover,
because we have determined that defendant Weiss consented to
personal jurisdiction by agreement, we need not consider the
arguments in his brief concerning whether the court correctly
determined that he had sufficient contacts with North Carolina
to allow the court to exercise personal jurisdiction over him in
this matter. See Retail Investors, Inc., 113 N.C. App. at 552,
439 S.E.2d at 198. Our disposition renders it unnecessary to
consider defendant Weiss’s remaining arguments on appeal and we
decline to do so.
Affirmed.
Judges ELMORE and HUNTER, JR. concur.