17 F.3d 123 (5th Cir. 1994), 92-7587, Caldas & Sons, Inc. v. Willingham

Docket Nº:92-7587.
Citation:17 F.3d 123
Party Name:CALDAS & SONS, INC. and Angelo Caldas, Plaintiffs-Appellants, Cross-Appellees, v. Ben H. WILLINGHAM, Jr., et al., Defendants, Ben H. Willingham, Jr., et al., Defendants-Appellees, Cross-Appellants. Andrew R. CARR and Virginia E. Carr, Plaintiffs, v. G. Rives NEBLETT, et al., Defendants.
Case Date:March 29, 1994
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 123

17 F.3d 123 (5th Cir. 1994)

CALDAS & SONS, INC. and Angelo Caldas,

Plaintiffs-Appellants, Cross-Appellees,


Ben H. WILLINGHAM, Jr., et al., Defendants,

Ben H. Willingham, Jr., et al., Defendants-Appellees,


Andrew R. CARR and Virginia E. Carr, Plaintiffs,


G. Rives NEBLETT, et al., Defendants.

No. 92-7587.

United States Court of Appeals, Fifth Circuit

March 29, 1994

Page 124

W.O. Luckett, Jr., Clarksdale, MS, Nancy Wagner, Michael T. Lewis, Lewis & Lewis, Clarksdale, MS, for plaintiffs-appellant cross-appellees.

Grady F. Tollison, Jr., William F. Brown, Tollison, Austin & Twiford, Oxford, MS, for Willingham, et al.

Appeals from the United States District Court for the Northern District of Mississippi.

Before WIENER and EMILIO M. GARZA, Circuit Judges, and CLEMENT [*], District Judge.

CLEMENT, District Judge:

Plaintiffs-Appellants/Cross Appellees Angelo Caldas & Caldas & Sons, Inc. (collectively, "Caldas") appeal the district court's grant of summary judgment in favor of Defendants-Appellees/Cross Appellants Corim Agri, Inc., Corim, Inc. and Ben H. Willingham, Jr. (collectively, the "Corim defendants") for Caldas's failure to raise a genuine issue of material fact in connection with agricultural real estate transactions in Mississippi. The Corim defendants have cross appealed, arguing that the district court erred in refusing to dismiss Caldas' complaint for lack of jurisdiction, given a forum selection clause in the principal contract under consideration. After reviewing the record de novo, we find the presence of sufficient summary judgment evidence to constitute genuine issues of material fact in connection with Caldas' claims and therefore reverse the district court's grant of summary judgment dismissing those claims. But we affirm the district court's refusal to dismiss Caldas' complaint on the basis of the forum selection clause.



This case arose out of two sales contracts for the same parcel of farmland in Bolivar County, Mississippi. The tract was known as Cloverdale Place; in one contract Corim Agri, Inc. was the buyer; in the other Corim Agri, Inc. was the seller. The other parties to those contracts--the initial seller and the ultimate buyer--were not aware of each other.

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In 1981, Andrew and Virginia Carr, plaintiffs below, 1 decided to sell some of their rural real estate holdings. Mr. Carr reached an understanding regarding the sale of Cloverdale Place with G. Rives Neblett, Mr. Carr's neighbor, real estate broker, and attorney: Carr would sell Cloverdale Place if Neblett could find a willing buyer. Although no price was placed on the property, Carr and Neblett agreed that once a purchaser was found who was willing to pay a price satisfactory to Carr, Neblett would take care of all details needed to consummate the sale.

Although several prospective purchasers looked at Cloverdale Place between 1982 and 1984, no satisfactory offer was forthcoming. In 1984, Ben Willingham, Jr., president of defendant Corim Agri, Inc. 2 contacted Neblett about the property. In turn, Carr was informed by Neblett that he had found a buyer willing to pay $1,100 per acre for Cloverdale Place, a price Carr found satisfactory. Neblett and Carr agreed that Carr would receive $1,050 per acre net, with the remaining $50 per acre to be received by Neblett as his broker's commission. On April 25, 1984, Carr granted Corim Agri, Inc. a thirty-day option which specified that if the option were exercised Carr would sell Cloverdale Place to Corim Agri, Inc. for a net price of $1,050 per acre, and Corim Agri, Inc. would pay Carr's broker, Neblett, an additional $50 per acre as his commission. If the option were thus exercised and the sale consummated, Carr would receive $1,034,215.00. The option was not exercised, however; rather, it expired on its own terms on May 25, 1984. Then, on July 19, 1984, Carr and Corim Agri, Inc. entered into a Contract of Sale for Cloverdale Place, on essentially the same terms and for the same price as had been provided in the option.

Prior to the execution of this contract for Carr to sell Cloverdale Place to Corim Agri, Inc., however, plaintiff Angelo Caldas, a native of Portugal, had entered the picture. On June 13, 1984, Rolf Schlegel, a Corim employee, wrote to Caldas regarding his possible purchase of farmland in the United States. Schlegel indicated that Corim had identified three parcels of land for Caldas to consider. Although not identified by name, one of the three was Cloverdale Place. On July 16, 1984, Caldas and Corim Inc., through its president, Willingham, signed a sales agreement for Cloverdale Place. In that contract, though, Corim, Inc. disguised the identity of Cloverdale Place, using the pseudonym Walnut Bayou Farm. Caldas agreed to pay $1,277,900.00 for the property. By entering the agreement with Caldas on July 16, 1984, Corim, Inc. had agreed to "sell" Cloverdale Place before it either owned the property or had an enforceable contract entitling Corim to purchase it from Carr.

The Corim-Caldas contract also provided that Corim would manage the agricultural operations thereon for Caldas. At the time the sales agreement was executed, the parties agreed that Corim, Inc. would form a United States corporation, Caldas & Sons, Inc., to take title to the property. As noted above, three days after the Corim-Caldas contract was consummated, Corim obtained the right to purchase the property from Carr. Neblett, acting as attorney for all parties, closed both land sales--Carr to Corim and Corim to Caldas--on December 31, 1984. No one from the Caldas organization attended the closing.

In 1989, Steve Kovac, who by then had replaced Corim, Inc. as Caldas' manager of Cloverdale Place following the expiration of the Corim management contract, informed the Carrs that Caldas had purchased the property from Corim, Inc. for approximately $1,300 per acre simultaneously with the Carrs' sale of the property to Corim for a net $1,050 per acre. Upon learning this, Carr filed suit against Ben H. Willingham, Jr., Corim Agri, Inc., Corim, Inc., Carl W. Stowe (the "Corim defendants") and Neblett. Shortly thereafter, Caldas & Sons, Inc. filed the action now before us on appeal.

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Caldas & Sons, Inc.'s complaint against the Corim defendants and G. Rives Neblett sought civil damages for RICO violations, breach of fiduciary duty as both purchasing and managing agent, breach of fiduciary duty as a corporate officer, breach of contract, fraud, intentional misrepresentation, deceit and trickery, legal malpractice, conspiracy and punitive damages. The complaint was eventually amended to add Angelo Caldas, individually, as a plaintiff.

In the Caldas action the Corim defendants filed a number of preliminary motions in attempts to dispose of the litigation. They filed two motions to dismiss based on a purported forum selection clause in the Corim-Caldas contract. The motions alleged lack of jurisdiction, both personal and subject matter, as well as improper venue. As these motions were predicated on matters beyond the pleadings, the district court treated them as motions for summary judgment pursuant to Rule 12(c) and denied all motions. The court held that although forum selection clauses are not invalid per se, the court was not compelled by the mere presence of such a clause to dismiss the case. Specifically, the court found the clause's language "sufficiently vague to render [it] ambiguous" as to the parties' intent. As the clause was susceptible of two reasonable yet conflicting interpretations, the court construed the language against Corim, which had drafted the clause, and refused to dismiss the case.

Alternatively, the court reasoned that even if the clause were unambiguous, it was clearly permissive rather than mandatory. The clause merely evidenced the consent of the parties to the jurisdiction of the Zurich courts. In other words, regardless of the parties' agreement that disputes could be litigated in Zurich, nothing in the contract mandated Zurich as the exclusive forum. As noted, the Corim defendants have cross appealed the district court's denial of their motions to dismiss.

The Corim defendants also filed motions for summary judgment on the merits. These motions were granted by the district court. The court granted summary judgment in favor of all defendants on plaintiff's RICO claims and granted summary judgment in favor of all of the Corim defendants on the claims of breach of fiduciary duty as purchasing agent, fraud, and conspiracy to defraud. The court subsequently amended its ruling, on the motion of the Corim defendants, to dismiss Caldas' breach of contract claim as well. Subsequent to the court's order granting summary judgment, the parties agreed to dismiss with prejudice all of the claims not theretofore dismissed by the court's summary judgment. After the Caldas plaintiffs filed their notice of appeal, the parties filed a joint motion of dismissal of the appeal as to defendant Neblett, and we granted that motion. The plaintiffs do not appeal the district court's rulings on their RICO claims. Accordingly, the issues presented for review are (1) the district court's refusal to dismiss on forum selection grounds, and (2) the district court's grant of summary judgment dismissing plaintiffs' claims of breach of fiduciary duty as purchasing agent, breach...

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