Powell v. Best Buy Co., Inc.

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

3:21-cv-00064-MOC-DSC

DWIGHT POWELL, )

)

Plaintiff, )

) ORDER

vs. )

)

BEST BUY CO. INC., )

)

Defendants. )

___________________________________ )

THIS MATTER comes before the Court on three Motions to Dismiss on the grounds

that service of process was insufficient as a matter of law and that Plaintiff fails to state a claim

upon which relief may be granted pursuant to Federal Rules of Civil Procedure 12(b)(5) and (6).

(Doc. No. 5).

I. PROCEDURAL BACKGROUND

Plaintiff commenced this action against Best Buy by filing a Complaint on January 6,

2021 in the General Court of Justice, District Court Division, Mecklenburg County, North

Carolina, bearing file number 21-CVM-86. The Complaint alleges that Best Buy “knowingly and

willingly added a Hard Pull to [Plaintiff’s] credit without [his] consent causing [his] credit to be

damaged.” Compl. ¶ 2.1 The Complaint asserts a right to recover punitive damages and damages

for emotional distress. Additionally, Plaintiff includes a claim for conversion of his credit report.

1 Best Buy branded credit cards are actually issued by Citibank, N.A., a national banking

association headquartered in Sioux Falls, South Dakota, thus Best Buy reserves the right to

contest whether it is even the proper party for the claims asserted in this action. See Best Buy

Credit Cards: Rewards & Financing, https://www.bestbuy.com/site/misc/financing-

rewards/pcmcat102500050032.c?id=pcmcat102500050032

1

On February 10, 2021, Best Buy removed this action to the United States District Court

for the Western District of North Carolina, bearing civil action number 3:21-CV-64-MOC-DSC

on the grounds that this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331.

II. STANDARD OF REVIEW

A court cannot obtain jurisdiction over a defendant without that defendant first being

served with process. See Mid-Continent Wood Products, Inc. v. Harris, 936 F.2d 297, 301 (7th

Cir.), reh'g en banc denied, 1991 WL 117311 (7th Cir.1991) (“The court has long recognized that

valid service of process is necessary in order to assert personal jurisdiction over a defendant.”);

Hickory Travel Systems, Inc. v. Tui AG, 213 F.R.D. 547, 551 (N.D. Cal. 2003) (“A party must

be properly served for the Court to obtain personal jurisdiction over that party.”). Therefore, if

process or service is insufficient, the court lacks the jurisdiction over the defendant and a

judgment entered therein is invalid. See Recreational Props., Inc., v. Southwest Mortgage Serv.

Corp., 804 F. 2d 311, 314 (5th Cir. 1986) (“If a court lacks jurisdiction over the parties because

of insufficient service of process, the judgment is void and the district court must set it aside.”).

“A Rule 12(b)(5) motion is a proper means of raising any procedural defense related to

service.” Wilson v. Kenny, 941 F.2d 1208 (4th Cir. 1991). A United States district court can

grant a defendant’s Rule 12(b)(5) motion to dismiss if the district court deems that there was

insufficient service of process. See Hyman v. City of Gastonia, 466 F.3d 284, 286 (4th Cir.

2006). Once the defendant challenges service, “[t]he plaintiff bears the burden of establishing

that service of process has been accomplished in a manner that complies with Rule 4” of the

Federal Rules of Civil Procedure. Plant Genetic Systems, N.V., v. Ciba Seeds, 933 F. Supp. 519,

526 (M.D.N.C. 1996); see Hickory, 213 F.R.D. at 551. Rule 4 is “there to be followed, and plain

requirements for the means of effecting service of process may not be ignored.” Armco, Inc. v.

2

Penrod-Stauffer Building Systems, Inc., 733 F.2d 1087, 1089 (4th Cir.1984). Thus, a court may

properly dismiss a complaint for the plaintiff’s failure to comply with Rule 4. See Brown v. Blue

Cross & Blue Shield of North Carolina, 226 F.R.D. 526 (M.D.N.C. 2004).

Federal Rule of Civil Procedure 12(b)(6) provides that a motion may be dismissed for

failure to state a claim upon which relief can be granted. A motion to dismiss pursuant to Rule

12(b)(6) tests the sufficiency of the complaint without resolving contests of fact or the merits of a

claim. Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). Thus, the Rule

12(b)(6) inquiry is limited to determining if the allegations constitute “a short and plain

statement of the claim showing the pleader is entitled to relief” pursuant to Federal Rule of Civil

Procedure 8(a)(2). To survive a defendant’s motion to dismiss, factual allegations in the

complaint must be sufficient to “raise a right to relief above a speculative level.” Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007). Thus, a complaint will survive if it contains “enough

facts to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Twombly, 550 U.S. at 570).

For the purposes of a Rule 12(b)(6) analysis, a claim has facial plausibility “when the

plaintiff pleads factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” (Id.) (quoting Twombly, 550 U.S. at 556). The

Court must draw all reasonable factual inferences in favor of the plaintiff. Priority Auto Grp.,

Inc. v. Ford Motor Co., 757 F.3d 137, 139 (4th Cir. 2014). In a Rule 12(b)(6) analysis, the Court

must separate facts from legal conclusions, as mere conclusions are not entitled to a presumption

of truth. Iqbal, 556 U.S. at 678. Importantly, “[t]hreadbare recitals of the elements of a cause of

action, supported by mere conclusory statements, do not suffice.” (Id.). However, well-pleaded

factual allegations are entitled to a presumption of truth, and the court should determine whether

3

the allegations plausibly give rise to an entitlement to relief. (Id. at 679).

III. DISCUSSION

A. Insufficient Service of Process

“In the absence of service of process (or waiver of service by the defendant), a court

ordinarily may not exercise power over a party the complaint names as defendant.” Murphy

Bros. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999). “[B]efore a federal court may

exercise personal jurisdiction over a defendant, there must be more than notice to the defendant .

. . Absent consent, there must be authorization for service of summons the defendant. Omni

Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 97 (1987).

Plaintiff commenced this action in state court and therefore was bound to the North

Carolina Rules of Civil Procedure at the time he served the Civil Summons and Complaint

against Defendant Best Buy. See FED. R. CIV. P. 81(c) (federal rules of civil procedure apply

after removal). Under North Carolina law, foreign corporation may be served in the following

ways:

a. By delivering a copy of the summons and of the complaint to an officer, director,

or managing agent of the corporation or by leaving copies thereof in the office of such

officer, director, or managing agent with the person who is apparently in charge of the

office.

b. By delivering a copy of the summons and of the complaint to an agent authorized

by appointment or by law to be served or to accept service of process or by serving

process upon such agent or the party in a manner specified by any statute.

c. By mailing a copy of the summons and of the complaint, registered or certified

mail, return receipt requested, addressed to the officer, director or agent to be served as

specified in paragraphs a and b.

d. By depositing with a designated delivery service authorized pursuant to 26 U.S.C.

§ 7502(f)(2) a copy of the summons and complaint, addressed to the officer, director, or

agent to be served as specified in paragraphs a. and b., delivering to the addressee, and

obtaining a delivery receipt.

N.C. R. CIV. P. 4(j)(6).

The North Carolina Secretary of State identifies “CT Corporation System” as the

4

registered and authorized agent to accept service of process on behalf of Best Buy Co., Inc at the

address “160 Mine Lake Ct Ste 200, Raleigh, NC 27615-6417.” (See Doc. No. 6-1). The

Secretary of State website also provides that “7601 Penn Avenue S., Richfield, MN 55423” is the

mailing and principal office address. Plaintiff did not attempt service at either of these addresses.

On January 26, 2021, the Complaint and Summons was delivered by sheriff to an address

“10221 Premeter Parkway Charlotte, NC 28216”2 and to an individual listed as “Deron Pittman

– Loss Prevention”. See Exhibit B. While there is a Best Buy retail store located at “10221

Perimeter Parkway, Charlotte, NC 28216,” the limited return of service provided by the Sheriff

does not prove that Deron Pittman was an agent authorized by law or appointment to accept

service of process on behalf of an out of state corporation. Best Buy is a multinational electronics

retailer headquartered in Richfield, Minnesota. Accordingly, as it relates to Rule 4 of the North

Carolina Rules of Procedure, Best Buy’s “office” is in Richfield, Minnesota. A copy of the

summons and complaint must be left in the office of an officer, director, or managing agent of

defendant corporation with the person who is apparently in charge of the office. See City of

Durham v. Lyckan Dev. Corp., 26 N.C. App. 210, 218 (1975) (finding that the defendant

corporation was not properly served where the summons and complaint were delivered to an

individual, who was not shown to be in charge of the office, nor an office, director, or managing

agent).

For the above reasons, service was not proper and therefore this Complaint will be

dismissed for insufficient service of process.

B. Failure to State a Claim

Because the court resolves this case on Rule 12(b)(5) grounds, the court will not proceed

to a 12(b)(6) analysis.

5

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS Defendant’s Motion to Dismiss for

Insufficient Service of Process; therefore, Plaintiff's Complaint is dismissed WITHOUT

PREJUDICE.

IT IS, THEREFORE, ORDERED that:

1. The Motions to Dismiss for Insufficient Service of Process, filed by Defendants,

(Doc. No. 5) is GRANTED.

Signed: March 22, 2021

Korine.

Max O. Cogburn i )

United States District Judge ttget