Complaint Review: Terry L Smith - Pittsburgh Pennsylvania
- Terry L Smith
409 Broad Street, 2nd Floor
- Phone: 412-352-8130
- Category: Real Estate Fraud, Real Estate Scam Artist
Terry L Smith Pittsburgh, Pa. ADVANCE FEE FRAUD Pittsburgh Pennsylvania
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Terry L. Smith/Pittsburgh, Pa
Commercial Real Estate Financing, Inc.
P.O. Box 81 Sewickley, PA 15143
Car Barn Shops 409 Broad Street, 2nd Floor, Sewickley, PA15143
Terry L. Smith of Pittsburgh, Pennsylvania, United States of America is a Convicted of "Advance Fee Fraud in North Carolina.
Terry L Smith claims to be CEO of a company called CREF-Commercial Real Estate Financing
“CREF, Inc., is an international banking and development group that directly provides equity infusion, tailor made debt vehicles and Green Energy Grants for projects in Smart Cities, Commercial Real Estate and Energy Development Projects. Development projects up to $900 million US dollars in size. [continued below]....
In 2015 he tried to pull off another CON against my hometown, Johnstown, Pa.
Smith was convicted in North Carolina of “Advance Fee Fraud”. He also attempted the same scam in Johnstown, Pa.
How does Smith scam? He tells you his company can access millions of dollars in financing for projects. He claims he has a long list of successful projects he has obtained funds for. However, if you ask him to speak with someone he has successfully obtained money for; he'll tell you that his clients want to be kept confidential. Smith then tells you that he needs an “upfront fee” to begin work, do due diligence, etc. He then does NOTHING because he has no connection to money!
However, his contract with your company stipulates that your “Advance Fee” is no refundable!
Below are two cases involving Smith. He was convicted in North Carolina and in Johnstown, Pa. he tried to pull the same scam.
CASE ONE: North Carolina. Terry L. Smith of Pittsburgh, Pa. wass convicted of “Advance Fee” fraud and ordered to pay $850,000. in restitution to his victims.
Terry L. Smith ("Smith") "conspired1to form and successfully implemented a species of Advance Fee Fraud to rob [SCDF] of a substantial deposit."
SOUTHEAST COASTAL DEVELOPMENT FUND, L.L.C., Plaintiff, v. COMMERCIAL REAL ESTATE INC., and TERRY L. SMITH, Defendants.
United States District Court, E.D. North Carolina, Western Division.https://leagle.com/images/logo.png
April 3, 2009.
April 3, 2009.
United States District Court, E.D. North Carolina, Western Division.
JAMES C. FOX, District Judge.
This matter is before the court on Defendants' Motion to Dismiss [DE-18]. Also before the court is the Motion to Seal [DE-23] filed by Plaintiff Southeast Coastal Development Fund, L.L.C., and Defendants' Second Motion to File Documents Under Seal [DE-30]. All motions have been briefed and are ripe for ruling.
I. STATEMENT OF THE CASE
Plaintiff Southeast Coastal Development Fund, L.L.C. ("SCDF") initiated this action on January 10, 2008, by filing a Complaint [DE-1] in this court. In the 29-page Complaint, SCDF alleges that Defendants Commercial Real Estate Inc. ("CREF") and Terry L. Smith ("Smith") "conspired1 to form and successfully implemented a species of Advance Fee Fraud to rob [SCDF] of a substantial deposit."2 Compl. [DE-1] at p. 1. SCDF also alleges that Defendants' actions deprived it of "related business opportunities measuring in the millions of dollars." Id. SCDF asserts claims for fraud, constructive fraud, violation of North Carolina's Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1, and breach of contract. On March 4, 2008, Defendants filed the instant Motion to Dismiss [DE-18], arguing that dismissal is appropriate because (1) the court lacks subject matter jurisdiction over this matter; (2) the court cannot assert personal jurisdiction over Defendants; (3) SCDF has failed to state certain claims, and (4) SCDF has failed to join indispensable parties.
II. STATEMENT OF THE FACTS
The undisputed facts, as taken from the Complaint and the submissions of the parties, are as follows
SCDF is a North Carolina limited liability company whose principal business involves the acquisition, development, and sale of real property. Compl. [DE-1] ¶ 14. Defendant CREF is a small Pennsylvania corporation, with its principal place of business in Sewickley, Pennsylvania. Compl. [DE-1] ¶ 2, Decl. of Mark Wenick [DE-26] ¶ 9. CREF's principal shareholder and officer is Defendant Smith, who is also resident of Pennsylvania. Compl. [DE-1] ¶ 3; Decl. of Mark Wenick [DE-26] ¶ 9-10.
In the early part of 2007, SCDF contracted to purchase a 972-acre tract of land along the Cape Fear River ("the Property") for $33,500,000.00. Id. ¶¶ 15.1, 15.2. The purchase agreement names "Southeast Coastal Development Fund, LLC" as the purchaser. Decl. of Mark Wenick [DE-26] ¶ 6, Ex. 2. The purchase agreement required an escrow deposit of $200,000.00. Compl. [DE-1] ¶ 15.3. Pursuant to the purchase agreement, SCDF agreed that $50,000.00 of the escrow deposit would be transferred to the seller on April 27, 2007, and, in the event that SCDF did not cancel is obligations under the agreement, the remaining $150,000.00 would be transferred to the seller on July 31, 2007. Id. at ¶¶ 15.4-15.5. Closing was to occur no later than August 30, 2007. Id. at ¶ 15.6. SCDF contends that it intended to acquire and develop the property into a high-end golfing and marine-based residential community, and that it required capitalization or debt financing in the aggregate amount of $50,000,000.00. Id. at ¶¶ 16-17.
SCDF admits that it initiated contact with Defendants in or around May 2007, "to determine whether [Defendants were able and willing to assist plaintiff in the procurement of sufficient funds to acquire and preliminarily develop the property." Id. at ¶ 18. SCDF contends that from May through July 2007, its managing members communicated with Smith on many occasions about the prospect of SCDF engaging CREF's services to procure the substantial financing needed for the project. Id. at ¶ 19, Decl. of Mark Wenick [DE-26] ¶¶ 9-24. SCDF alleges that during these communications, Defendants made false representations regarding their abilities, track record, and efforts to be taken on behalf of SCDF. Compl. [DE-1] ¶¶ 20-24.
In late June 2007, Smith sent a proposed "Confidentiality and Business Agreement" ("CBA") to SCDF. The draft agreement included what SCDF characterizes as "several dozen typographical errors," including referring to SCDF as "`Southeast Costal[sic] Development Funds, Fund 11', LLC a.ka. Balmoral."3 Decl. of Mark Wenick [DE-26], Ex. 4. The June Confidentiality and Business Agreement states it was "between the following parties":
Mark J. Wenick, (MW), Individual and CEO, Steve Burch, (SB), individual and Managing Member, and Anthony Jay Mouser, (AJM), Individual and Managing Member of the Special purpose created entity known as Southeast Costal[sic] Development Funds, Fund 11, a.k.a. Balmoral. (Entity), whose address is c/o Don Hunt, Esquire Akins Hunt Attorneys at Law 134 North Main Street, Suite 204, Fuquay-Varina, NC 27526, U.S.A.
Terry L. Smith, (TLS) President of Commercial Real Estate Financing, Inc., (CREF), whose present address is 325 Sixth Avenue, Pittsburgh, PA 15222, U.S.A., and future address of Car Barn Shops, 2nd Floor, P.O. Box 81 Sewickley, PA 15143, U.S.A.
Id. The document provided: "The above referenced parties have entered into this agreement to obtain financing monies, including debt and/or equity for the transaction presently known as `Southeast Costal [sic] Developments Funds, Fund 11, LLC. a.k.a. Balmoral['] (Entity)." Id. The document also explicitly provided:
This Agreement has an expiration date of June 21, 2007 to be accepted and TIME IS OF THE ESSANCE [sic]. Should this Agreement not be accepted by close of business on June 21, 2007, all exclusive rights to the funding and service providers remains with (TLS) & (CREF[)] for life, and the Agreement will need to be negotiated to the terms of (TLS) & (CREF).
Mark Wenick, the managing member and chief executive officer of SCDF, contends that despite being "alarmed" by the number of "typographical errors," he spoke to Smith over the next several days about the proposed CBA. Decl. of Mark Wenick [DE-26] ¶ 14. Wenick maintains that he discussed with Smith "the misspelling of Southeast Coastal Development Fund, LLC's name and that none of the managing members of the company intended to be personal parties to his proposed transaction." Id. Wenick contends that Smith "indicated that he understood [Wenick's] concerns ... [but] his attorneys would not allow him to modify the text of his proposal." Id. There is no indication that the June 18, 2007, CBA was accepted by SCDF or any other entity.
On July 9, 2007, Smith faxed a new version of the CBAto SCDF's offices in North Carolina. Id. at ¶ 15, Ex. 5. The July 9, 2007, CBA proposal contained the same description of the "parties" present in the June 18, 2007 proposal. With regard to the timing of acceptance, the July 9, 2007, proposal provided:
This Agreement has an expiration date of July 10, 2007, to be accepted and TIME IS OF THE ESSANCE [sic]. Should this Agreement not be accepted by close of business on July 10, 2007, all exclusive rights to the fund and service providers remains with (TLS) & (CRE[)] for life, and the Agreement will need to be negotiated to the terms of (TLS) & (CREF).
Id. The proposal also provided:
Should any party of this transaction cause a breach of this contract, legal action will be taken against the breaching party in the state of the breached party, and any and all legal expenses are to be paid by the breaching party.
By placing your signature on the space provided, any and/or all parties have read, understand and agree to the terms and conditions of this agreement. This Agreement is binding and non-negotiable.
__________________________________________________________ Mark J. Wenick, Individual and CEO of (Entity). __________________________________________________________ Steve Burch, Individual and Managing Member of the (Entity). __________________________________________________________ Anthony Jay Mouser, Individual and Managing Member of the (Entity) __________________________________________________________ Terry L. Smith, President of (CREF).
Id. Smith, as President of CREF, already had signed the document when it was received by SCDF.
On July 10, 2007, Wenick sent an email to Smith that included a proposed addendum to the proposed agreement. Decl. of Mark Wenick ¶ 16, Ex. 6. Wenick avers he sent the addendum because the proposed agreement "continued to contain typographical errors," and because he thought "the name Southeast Coastal Development Fund, LLC and the limited role its managing members were to have in connection with the agreement" needed clarification. Id. In the email, Wenick wrote:
Attached is the recommended addendum to the Confidentiality and Business Agreement. As you will see, the addendum provides further clarification on the issues that we discussed last Friday:
1. Our personal liability,
2. The funding sources you bring to the table and the funding sources with which we are already working,
3. The fee will be paying your firm for funding and break up; and,
4. The marketing of the project[.]
Upon your review, discussion regarding any issues and your eventual approval, we will put this addendum on our letterhead, execute the same and send to you for signature.
Decl. of Mark Wenick, Ex. 6. The addendum specified that the "two business entities entering the Agreement are (i) Commercial Real Estate Financing, Inc. (CREF) and (ii) Southeast Coastal Development Fund, L.L.C., a North Carolina Limited Liability Company." Id. The addendum also stated: "CREF will disclose financing sources within two (2) business days after the Agreement and this Addendum are executed by the parties." Id. Smith replied to Wenick's email, adamantly rejecting, in no uncertain terms, the addendum.4
No member of SCDF, or any other party, signed the proposed CBA by the close of business on July 10, 2007. Nevertheless, Wenick indicates that Smith continued to communicate with Wenick via telephone. Despite the red flags being waved, including the numerous "typographical errors" and Smith's adamant opposition to the addendum, Wenick contends" the managers of Southeast Coastal Development Fund, LLC agreed to engage Mr. Smith and his company provided he would accept a few what I considered to be basic and straightforward modifications to his proposed agreement." Decl. of Mark Wenick ¶ 17.5
Consequently, on July 12, 2007, Wenick and Anthony Mouser, another managing member of SCDF, signed the CBA, and sent it and a check payable to CREF in the amount of $35,000.00 to Smith via Federal Express Overnight courier. Id. at ¶ 18. Along with the signed CBA and check, Wenick also included a letter to Smith "outlining [SCDF's] expectations and modifications to the proposed agreement," along with" literally several hundred pages of documents relating to the Balmoral project." Id. Despite SCDF's assertion that the letter, together with the signed CBA, constituted a counteroffer with differing terms from CREF's original proposal, the letter does not state as much. Instead, the letter states, in part, the following:
Please find enclosed are [sic] the following items:
1. Executed Business and Confidentiality Agreement;
2. Check payable to CREF, Inc in the amount of $35,000.00; and
3. Personal financial information from Burch, Mouser and Wenick.
The company is looking forward to working with you to complete the funding of our Balmoral Project through debt and equity financing provided to Southeast Coastal Development Fund, LLC. I want to confirm with you that we are not interested in pursuing any financing arrangements that require personal signatures which result in our personal financial liability.
Our intention when signing the enclosed Agreement personally was to satisfy your request and acknowledge that we are providing financial information to you. It is our understanding that we are to have no other personal liability under the agreement or for any other claims related to the agreement.
Decl. of Mark Wenick [DE-26], Ex. 7.
On July 13, 2007, Smith sent an email to Wenick informing him that his "package arrived in good order today." Decl. of Mark Wenick [DE-26] ¶ 19, Ex. 8. Smith also negotiated SCDF's check. Id.
Throughout the months of July and August 2007, the parties maintained communications with each other. Of particular importance to SCDF was the fact that most of the escrow deposit it had paid pursuant to the purchase agreement for the Balmoral project was conditionally refundable provided SCDF cancelled the purchase agreement on or before July 31, 2007. Decl. of Mark Wenick [DE-26] ¶ 21. Wenick contends that on or about July 31, 2007, he personally spoke with Smith about whether SCDF should cancel the purchase agreement. He represents that Smith "unequivocally advised me that [SCDF] should not cancel the contract and implicit in his representation was the acknowledgment that Mr. Smith had arranged financing from one of his `sources.'" Id. at ¶ 22. Wenick contends that on reliance of this representation, SCDF did not cancel the purchase agreement, and the escrow deposit became non-refundable. Id. Wenick contends that shortly thereafter, Defendants ceased communicating with SCDF altogether, and did not arrange financing for the project. Id. at ¶¶ 23-24.
III. STANDARD OF REVIEW
With regard to Defendants' motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), the Fourth Circuit has summarized the applicable legal standards:
When a Rule 12(b)(1) motion challenge is raised to the factual basis for subject matter jurisdiction, the burden of proving subject matter jurisdiction is on the plaintiff. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). In determining whether jurisdiction exists, the district court is to regard the pleadings' allegations as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment. Id.; Trentacosta v. Frontier Pacific Aircraft Indus., 813 F.2d 1553, 1558 (9th Cir. 1987). The district court should apply the standard applicable to a motion for summary judgment, under which the nonmoving party must set forth specific facts beyond the pleadings to show that a genuine issue of material fact exists. Trentacosta, supra, 813 F.2d at 1559 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986)). The moving party should prevail only if the material facts are not in dispute and the moving party is entitled to prevail as a matter of law. Trentacosta, supra, 813 F.2d at 1558.
Richmond, Fredericksburg, & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).
When a court considers a motion to dismiss pursuant to Rule 12(b)(6), the factual allegations in a complaint will be construed in the nonmoving party's favor and treated as true. Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). The court is "`not so bound with respect to [the complaint's] legal conclusions.'" Self v. Norfolk Southern Corp., No. 07-1242, 2008 WL 410284, slip. op. at 1 (4th Cir. Feb. 13, 2008) (per curiam)(quoting Dist. 28, United Mine Workers, Inc. v. Wellmore Coal Corp., 609 F.2d 1083, 1085-86 (4th Cir. 1979)). The complaint need only contain a "short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a). If a claim has been adequately stated in the complaint, it may be supported by showing any set of facts consistent with the allegations in the complaint. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1969 (2007).
Dismissal, however, is appropriate when the face of the complaint clearly reveals the existence of a meritorious affirmative defense. See Brooks v. City of Winston-Salem, 85 F.3d 178, 181 (4th Cir. 1996). See generally, 5B CHARLES ALAN WRIGHT & ARTHUR R. Miller, Federal Practice and Procedure § 1357 (3d ed. 2004) ("A complaint showing that the statute of limitations has run on the claim is the most common situation in which the affirmative defense appears on the face of the pleading," rendering dismissal appropriate). Furthermore, in considering a motion to dismiss, a court may take judicial notice of matters of public record, and consider documents attached to the complaint and the motion to dismiss, so long as the documents are integral to the complaint and authentic. Secretary of State For Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007).
A court also may dismiss an action pursuant to Rule 12(b)(7) for failure to join a party in accordance with Rule 19. A court faced with a motion under Rule 12(b)(7) first determines if the absent party should be joined as a required party under Rule 19(a)(1). See, e.g. RPR & Assocs. v. Obrien/Atkins Assocs., P.A., 921 F.Supp. 1457, 1463 (M.D.N.C. 1995). Pursuant to Rule 19, a party is "required" if (1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of an action and is so situated that the disposition of the act in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to risk of incurring multiple or otherwise inconsistent obligations by reason of the claimed interest. FED. R. Civ. P. 19(a)(1). If a court, after viewing the allegations in the pleadings, determines that a person is required under Rule 19(a), and if joinder of that person is impossible due to jurisdictional or equitable limitations, the court shall determine whether in equity or good conscience the action should proceed among the parties before it, or should be dismissed under Rule 12(b)(7). See Fed. R. CIV. P. 19(b).
Finally, a federal court may dismiss an action pursuant to Rule 12(b)(2) if the court lacks personal jurisdiction over non-resident defendants. When the court decides a motion to dismiss for lack of jurisdiction solely on the basis of the motions, legal memoranda, and affidavits submitted to the court, the plaintiff bears the burden of making a prima facie showing of personal jurisdiction. See Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). When considering a jurisdictional challenge, the court "must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction." Id.
A. Introduction to Analysis
Underlying all of the parties' briefings is their fundamental disagreement over when a contract was formed between the parties, if any, and the terms thereof. The parties' dispute implicate the most fundamental maxims of contract law, and also affects this court's choice of law analysis.
A federal court sitting in diversity must apply the law of the highest court of the state in which the suit was brought. See Private Mortgage Inv. Servs., Inc. v. Hotel & Club Assocs., Inc., 296 F.3d 308, 312 (4th Cir. 2002). Thus, this court must apply the choice-of-law rules of the North Carolina Supreme Court. Klaxon v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). For tort actions, North Carolina adheres to the lex loci delicit rule—it applies the law of the state wherein the injury occurred. Boudreau v. Baughman, 368 S.E.2d 849, 853-54 (N.C. 1988). For claims sounding in contract, however, North Carolina adheres to the rule of lex loci contractus, which mandates the application of "the substantive law of the state where the last act to make a binding contract occurred." Fortune Ins. Co. v. Owens, 526 S.E.2d 463, 465-66 (N.C. 2000).
But, in this case, the parties disagree as to when and how the contract at issue—the CBA—was formed. Defendants contend that the CBA was fully formed and executed once Wenick and Mouser signed the proposed CBA in North Carolina. SCDF, however, contends the proposal for the CBA expired, according to its terms, on July 10, 2007—before it was signed by any members of SCDF. Thus, according to SCDF, the signing and mailing of the CBA, along with the check and letter, constitutes an offer, which was accepted by Defendants when Defendants cashed the check in Pennsylvania.
Under either North Carolina or Pennsylvania law, an "offer may specify in it the time within which acceptance must occur; if it does, the power of acceptance is limited accordingly." 1 ARTHUR LINTON CORBIN, CORBIN ON CONTRACTS § 2.14 (Rev. Ed. 2008). See also Normile v. Miller, 326 S.E.2d 11, 14-15 (N.C. 1985)(quoting Arthur Linton Corbin, Offer and Acceptance, and Some of the Resulting Legal Relations, 26 YALE L.J. 169, 182 (1917)) (explaining that "the offeree's ... power of acceptance was controlled by the duration of time for acceptance of the offer" and if the offeror "`names a specific period for [the] existence [of the offer], the offeree can accept only during this period'"). Thus, SCDF appears to be correct in its assertion that the offer from CREF expired on July 10, 2007. However, SCDF's own submissions indicate that Wenick continued to discuss the CBA after the July 10, 2007, deadline, which indicates that CREF may have extended the deadline for acceptance. The substance of those conversations are not before the court at this juncture, and consequently the court cannot conclude when, if ever, a valid contract was formed between the parties.6 For this reason, when contractual analysis is required in this order, the court will consult both North Carolina and Pennsylvania law.
B. 12(b)(1) Motion-Standing
The court first address the threshold issue of standing. Pye v. United States, 269 F.3d 459, 466 (4th Cir. 2001) ("Standing is a threshold jurisdictional question."). Defendants contend that the action must be dismissed because SCDF is not a party to the CBA, and therefore, does not have standing to bring any of the claims in the Complaint. Based on the allegations in the Complaint, combined with the evidence submitted by the parties, the court cannot agree.
It is well-settled that "[a] mistake in setting out the name of a corporation in an instrument is not fatal where the identity of the corporation is apparent." WILLIAM MEADE FLETCHER, FLETCHER CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS § 3014 (1997). See also Troy & North Carolina Gold Mining Co. v. Snow Lumber Co., 170 N.C. 273, 273, 87 S.E. 40, 42 (1915)("A misnomer [in a deed] does not vitiate, provided the identity of the corporation with that intended to be named by the parties is apparent."); In re Hendel v. Berks & Dauphin Turnpike Road, 16 Serg & Rawle 92 (Pa. 1827). In this case, the evidence submitted to the court would allow a jury to find that SCDF, as opposed to "`Southeast Costal[sic] Development Funds, Fund 11', a.k.a. Balmoral," was the party with which CREF contracted. Defendants cannot now credibly claim that CREF contracted with a non-existent entity7, especially after Wenick repeatedly referred to the entity in question as "Southeast Coastal Development Fund" and Smith, on behalf of CREF, negotiated the check drawn on SCDF's account. See Decl. of Mark Wenick [DE-26], Ex. 6 (proposed addendum identifying the entity as "Southeast Coastal Development Fund, L.L.C."), Ex. 7 (letter stating "The company is looking forward to working with you to complete the funding of our Balmoral Project through debt and equity financing provided to Southeast Coastal Development Fund, LLC" and signed" Southeast Coastal Development Fund, LLC" as well as a check written on an account listed as "Southeast Coastal Development Fund LLC"). Consequently, Defendants' motion to dismiss pursuant to Rule 12(b)(1) for lack of standing is DENIED.
B. 12(b)(2) Motion-Personal Jurisdiction
Defendants argue that they lack sufficient minimum contacts with the State of North Carolina, such that this action must be dismissed because this court cannot exercise personal jurisdiction over them.
1. Personal Jurisdiction
Analysis of personal jurisdiction consists of a two-part inquiry. First, the court must determine whether North Carolina's long-arm statute authorizes the exercise of personal jurisdiction over the defendants. See Christian Scientist Bd. of Directors of First Church of Christ v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001). Second, if the long-arm statute does authorize jurisdiction, then the court must examine whether the exercise of personal jurisdiction comports with the Due Process Clause of the Fourteenth Amendment. See id. North Carolina's long-arm statute, N.C. Gen. Stat. § 1-75.4, was enacted "to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process." Dillon v. Numismatic Funding Corp., 231 S.E.2d 629, 630 (N.C. 1977). Because North Carolina long-arm jurisdiction has been interpreted to be coextensive with the limits of due process, the normal two-step personal jurisdiction test has been collapsed into a single inquiry of whether the exercise of jurisdiction comports with due process. See Nolan, 259 F.3d at 215.
"The Due Process Clause of the Fourteenth Amendment operates to limit the power of a State to assert in personam jurisdiction over a nonresident defendant." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 404, 413-14 (1984). "`[T]he constitutional touchstone'" of the due process inquiry is "`whether the defendant purposefully established" minimum contacts" in the forum State.'" Asahi Metal Indus. Co., Ltd. v. Superior Court of California, 480 U.S. 102, 108-09 (1987) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945))). These minimum contacts must arise out of "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Burger King, 471 U.S. at 475. Furthermore, the "defendant's conduct and connection with the forum State" must be "such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). If the defendant's "contacts proximately result from actions by the defendant himself that create a `substantial connection' with the forum state," then jurisdiction is proper. Burger King, 471 U.S. at 475 (quoting McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223 (1957)). Once the court decides that a defendant purposefully established minimum contacts within the forum state, the court must then consider whether its assertion of personal jurisdiction would violate "`traditional notions of fair play and substantial justice.'" Int'l Shoe Co., 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
"The requisite contacts may be established by way of general or specific jurisdiction." Hardee's Food Sys., Inc. v. Beardmore, 169 F.R.D. 311, 314 (E.D.N.C. 1996). General jurisdiction enables a foreign forum to exercise jurisdiction over a defendant due to the defendant's "continuous and systematic" contacts with the forum. Helicopteros, 466 U.S. at 414-16. Specific jurisdiction exists when the suit itself arises out of a defendant's contact with the forum state. See id. at 414 n.8. In this case, SCDF does not contend that general jurisdiction exists.
Here are links to Johnston, Pennsylvania Newspaper and TV station outling Smith's attempt to defraud the city for “Advance Fee Fraud”.
The Tribune Democrat, Johnstown, PA
The Cambria Somerset Authority had a perfectly valid reason for turning down an offer of $65 million for an overhaul of its water system.
To accept the money – or even the promise of money – would be to violate state law.
At a recent CSA meeting, Terry Smith, CEO of Commercial Real Estate Financing Inc., told the authority that he was authorized to offer an exclusive deal with funds from something called the United Nations Clean Energy Fund.
The catch: The CSA had three days to respond, and was required to pay a retainer of $2,500 up front and not disclose to the taxpaying public – its owners – that it had done so.
Bound by a slew of state guidelines – including the requirement that any project valued at $10,000 or more be put out for bids – the CSA had no choice but to decline. The CSA officials were also troubled by Smith’s demand that his company oversee the project exclusively.
“Nobody wants to turn away $65 million,” authority Chairman Jim Greco said.
“But we can’t go breaking the law to get it.”
Greco noted that the authority is required to hold public meetings and adhere to prevailing wage guidelines for any project to comply with the Municipal Authorities Act, the Sunshine Act and other Pennsylvania laws. We don’t blame Greco, CSA Solicitor Dan Rullo and others involved for being skeptical. Smith was previously involved in the plan to put the Aspen Fluids treatment facility in Johnstown, but withdrew over questions about a $30,000 payment he said he required in advance of any work.
And as we’ve reported previously, federal court documents in North Carolina show that Smith’s Sewickly-based company was issued a default judgment in 2009 connected with a civil case involving advance fees. The court records show Commercial Real Estate Financing was ordered to pay $185,000 to Southeast Coastal Development Fund. Despite that, this proposal to the CSA just didn’t smell right. As our David Hurst reported, Rullo called Smith’s proposal “confusing” and “very unusual.”
Perhaps the entire offer was legitimate and 193 nations really have authorized CREF and Smith to spend $400 million dollars on green energy projects around the world. Smith declared that for his company, “$65 million is nothing,” and he was ready to move on to other potential projects if CSA declined.
On his company website, Smith lists 19 other projects with funding levels as high as $774 million – including one for Pennsylvania “Health Care Facilities” signing up for a loan of $53 million. Each listing notes: Client wishes to remain “confidential” or “a confidential source.” We’ll watch the progress of the other projects with great interest. And we’re sure the CSA leaders are happy they kept that $2,500 in their bank account – not that they had a choice to do otherwise.
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