[Harold Lang Jewelers, Inc. (Lang)] filed suit * * * alleging that Johnson owed it $160,322.90 plus

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[Harold Lang Jewelers, Inc. (‘‘Lang’’)] filed suit * * * alleging that Johnson owed it $160,322.90 plus interest for jewelry sold or consigned. Johnson answered * * * asserting as one of its eight affirmative defenses that Lang could not sue in a North Carolina court because Lang had failed to obtain a certificate of authority to transact business in the state. * * * [T]he district court granted the motion and dismissed Lang’s action. Lang now appeals. 

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   * * * Lang argues that the trial court did not find sufficient facts to support its conclusion that Lang was, in fact, transacting business in the state of North Carolina. * * * 

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   Our courts have interpreted transacting business in the state to ‘‘require the engaging in, carrying on or exercising, in North Carolina, some of the functions for which the corporation was created.’’ [Citation.] The business done by the corporation must be of such nature and character ‘‘as to warrant the inference that the corporation has subjected itself to the local jurisdiction and is, by its duly authorized officers and agents, present within the State.’’ [Citation.] In other words, the activities carried on by the corporation in North Carolina must be substantial, continuous, systematic, and regular. [Citation.]

   Here, the trial court concluded that Lang’s business activity in North Carolina was regular, continuous, and substantial such that it was transacting business in the state. We uphold this conclusion only if it is supported by the findings of fact, and, contrary to Lang’s assertion, we hold that it is. [Citation.] Specifically, the court found that Lang, through its single employee, had sold and consigned merchandise to jewelry stores in Franklin, Asheville, and Highlands, North Carolina, since 1970. The court also found that Lang’s employee came to North Carolina at least twice every six weeks during the year and at least twice every four weeks during the summer months for the purpose of transacting business. Sometime he came to North Carolina to transact business as often as three times a month. The court found that when the employee came to North Carolina, he always brought jewelry with him for delivery. When he visited jewelry stores in the state, he would either (1) make a direct sale on the spot without any confirmation from any other person or entity in any other place or (2) consign the jewelry, also without any further confirmation or approval from any other person or entity anywhere. When the employee took orders, he either shipped the ordered items to the business in North Carolina or personally delivered the merchandise. He also took returns of merchandise from customers in the state. The court further found that the business that Lang conducted in North Carolina did not require it to communicate with any other person or seek any authority from any other person.

   In sum, we conclude that the trial court’s conclusions of law are adequately supported by the facts found in this case. There is ample evidence that Lang’s business in this state has been regular, systematic, and extensive. Lang has been coming to North Carolina since about 1970 to sell and consign merchandise to several jewelry stores. In fact, Lang routinely came to North Carolina as frequently as twice every four weeks during some parts of the year, and each time he brought with him merchandise to deliver. Moreover, * * * Lang’s employee finalized the sales in North Carolina. * * *

   Finally, Lang contends that the trial court erred when it dismissed the action, arguing that the court should have continued the case to permit Lang to obtain the requisite certificate of authority. The applicable [N.C.] statute, [citation], does not specify the procedure in the event of failure to obtain a certificate of authority. The statute simply indicates that an action cannot be maintained unless the certificate is obtained prior to trial. [Citation.] Lang has not cited, nor have we found, a case where a continuance has been granted by a court in these circumstances. Moreover, Lang was aware that Johnson’s motion was pending and could have obtained the certificate in the year and a half that passed between the filing of the motion and the court’s dismissal of the case. * * *

   For the reasons set forth above, we affirm the decision of the trial court.

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Smith and Roberson Business Law

ISBN: 978-0538473637

15th Edition

Authors: Richard A. Mann, Barry S. Roberts

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