E.I.C., Inc. v. Bank of Virginia

Cross-complainant E.I.C., Inc. appeals two superior court orders quashing service of process upon cross-defendants Bank of Virginia, a Virginia corporation, and J. Robert Carlton, a Virginia resident. The underlying action was brought by Lincoln Savings Bank, a New York corporation, to enforce a deficiency judgment obtained in Kentucky against E.I.C., a California corporation, and against PN Corporation, a Virginia corporation. E.I.C.’s cross-complaint alleged a conspiracy by Bank of Virginia, J. Robert Carlton, and others to defraud E.I.C.

In accordance with the usual rule of appellate review, we state the facts most favorably to the prevailing parties below.

In December 1972 E.I.C. purchased Kentucky property from PN Corporation, a Virginia corporation wholly owned by Carlton Industries, Inc., of which J. Robert Carlton was an officer and sole shareholder. Under the purchase contract E.I.C. agreed (1) to assume a preexisting construction loan, (2) to execute a note payable to PN and secured by the Kentucky property (the PN mortgage), and (3) to pay PN $250,000. In the event PN failed to fulfill certain terms and conditions of the contract, it would repay the $250,000…