Robinson v. Ladd Furniture, Inc.
| Decision Date | 01 April 1993 |
| Docket Number | No. 92-2286,92-2286 |
| Citation | 995 F.2d 1064 |
| Parties | NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit. Sam ROBINSON, Plaintiff-Appellant, v. LADD FURNITURE, INC., a North Carolina Corporation; American Drew, a North Carolina Corporation, Defendants-Appellees. . Argued: |
| Court | U.S. Court of Appeals — Fourth Circuit |
Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. William L. Osteen, Sr., District Judge. (CA-92-273-2)
Andrew Dean Morrison, Beverly Hills, California, for Appellant.
Louis Whittier Doherty, Petree, Stockton, Winston-Salem, North Carolina, for Appellees.
Penni P. Bradshaw, Petree, Stockton, Winston-Salem, North Carolina; F. Joseph Treacy, Jr., Petree, Stockton Charlotte, North Carolina, for Appellees.
M.D.N.C.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Before RUSSELL and WILLIAMS, Circuit Judges, and SPROUSE, Senior Circuit Judge.
The claims in this case arise out of American Drew's termination of an independent sales representative agreement with Sam Robinson. The district court dismissed Robinson's claims under Federal Rule of Civil Procedure 12(b)(6), holding that the agreement was enforceable and its terms foreclosed Robinson's causes of action for breach of an oral, implied-in-fact contract and for age discrimination in violation of California law. We agree with the district court's conclusion that the written contract between the parties forecloses any claim for breach of an oral contract. We differ, however, with the district court's decision to apply the contractual choice of law provision to Robinson's statutory and tort claims. Accordingly, we remand for further consideration of these claims under North Carolina choice of law principles.
Sam Robinson resides in California and until October 1991, he sold furniture for American Drew 1 in Arizona and the southern regions of Nevada and California. Robinson signed an independent sales representative agreement with American Drew which, among other things, provided that he was an independent contractor, that the agreement was governed by North Carolina law, that any disputes under the agreement were to be resolved in North Carolina courts, that all prior agreements of the parties were revoked with the execution of the agreement, and that the agreement could only be modified in writing.
On September 6, 1991, American Drew exercised its option to terminate the agreement and provided the requisite thirty days notice. As a consequence, Robinson's relationship with American Drew as a sales representative ended on October 6, 1991, when he was sixty-nine years of age. Robinson alleged that he was replaced by a younger sales representative.
Robinson initially filed a complaint in California state court alleging wrongful termination in violation of California public policy and breach of an oral employment agreement to terminate him only for good cause. 2 American Drew removed the action to California federal district court on the basis of diversity jurisdiction. American Drew then filed a motion to dismiss for lack of venue under Federal Rule of Civil Procedure 12(b)(3). The motion sought enforcement of a forum selection clause in the sales agreement which specified that any dispute arising under the agreement "shall be resolved by the courts within North Carolina." (J.A. at 102.) After briefing and a hearing, the California federal district court enforced the clause and dismissed the entire case.
Robinson then refiled his case in federal district court in North Carolina. In the North Carolina complaint, Robinson alleged a violation of California's Fair Employment and Housing Act, Cal. Govt. Code § 12941(a) (West 1992), as well as termination in violation of the public policy of California and breach of an oral employment contract.
American Drew moved to dismiss the case under Rule 12(b)(6) because the sales agreement specified that North Carolina law, rather than California law, was applicable to any claims Robinson may have, and because the breach of oral contract claim was barred by a clause in the agreement stating that all prior agreements were revoked. The district court dismissed the breach of oral contract claim with prejudice and dismissed the age discrimination claims with leave to refile under North Carolina law. Robinson appeals.
We review de novo dismissals for failure to state a claim upon which relief can be granted. Revene v. Charles County Comm'rs, 882 F.2d 870, 872 (4th Cir. 1989). We apply the legal standard that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In so doing we construe the claims in the light most favorable to the non-moving party and take its allegations as true. Jenkins v. McKeithen, 395 U.S. 411, 421 (1969).
We first address the propriety of the dismissal of Robinson's breach of an oral contract claim. Robinson contends that in terminating his employment relationship, American Drew breached an oral, implied-in-fact employment agreement which provided that he could only be terminated for good cause. This oral contract claim is based on an alleged agreement between the parties prior to the execution of the written agreement. The key question we must resolve regarding this claim is whether the independent sales representative agreement is enforceable. The sales agreement explicitly provides that it supersedes all prior agreements, whether written or oral; therefore, if the agreement is enforceable, Robinson's claim was properly dismissed. Robinson contends that the agreement is not enforceable because it lacked consideration.
The district court concluded that the agreement was enforceable because of the collateral estoppel effect of the California district court's order dismissing the case for lack of venue. According to the district court, the California court's enforcement of the forum selection provision implicitly determined that the contract was enforceable and Robinson was precluded from relitigating the enforceability issue in the North Carolina court. Even if the California court implicitly determined that the contract was enforceable for purposes of deciding the proper forum, this determination does not preclude Robinson from challenging American Drew's motion to dismiss.
In demonstrating collateral estoppel, American Drew bore the burden of proving that: (1) Robinson had a full and fair opportunity to litigate the enforceability of the contract earlier in the case; (2) the California district court actually determined that the contract was enforceable; and (3) the California court necessarily decided that the contract was enforceable. See Combs v. Richardson, 838 F.2d 112, 114 (4th Cir. 1988). We do not believe that these elements were satisfied here.
First, Robinson did not have a full and fair opportunity to litigate the contract question because he bore the burden in the California action of proving that the court had jurisdiction, whereas in the Rule 12(b)(6) proceeding the burden of proof was on American Drew. As we stated in Newport News Shipbuilding & Dry Dock Co. v. Director OWCP, 583 F.2d 1273, 1279 (4th Cir. 1978), cert. denied, 440 U.S. 915 (1979):
Relitigation of an issue is not precluded by the doctrine of collateral estoppel where the party against whom the doctrine is invoked had a heavier burden of persuasion on that issue in the first action than he does in the second, or where his adversary has a heavier burden in the second action than he did in the first.
Secondly, the issue was not actually determined or necessarily litigated because the determination of the enforceability of a venue provision for purposes of a Rule 12(b)(3) motion is a matter of federal law and the enforceability of a contract is a matter of state law. Manetti-Farrow, Inc. v. Gucci America, Inc., 858 F.2d 509, 513 (9th Cir. 1988). Indeed, under Ninth Circuit precedent"forum selection clauses are prima facie valid, and are enforceable absent a strong showing by the party opposing the clause that enforcement would be unreasonable or unjust, or that the clause is invalid for such reasons as fraud or over-reaching." Id. at 514 (quoting The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972). Thus, the California court did not have to find that the entire contract was enforceable to apply the forum selection clause; it only had to find that a prima facie case of enforceability had been shown for venue determination. Here, American Drew has to prove enforceability, not merely a prima facie case, in order to prevail. For these reasons, collateral estoppel is not an appropriate basis for concluding that the agreement is enforceable.
Nevertheless, it is clear from the pleadings that the sales agreement is enforceable under North Carolina law. Generally, for purposes of evaluating a motion to dismiss under Rule 12(b)(6) the court is limited to a review of the allegations in a complaint. However, the complaint includes any document which is attached to it as an exhibit, Fed. R. Civ. P. 10(c), or incorporated into it by reference, Goldman v. Belden, 754 F.2d 1059, 1065 (2d Cir. 1985). In this case, Robinson specifically referred to the independent sales representative agreement in discussing his breach of an oral, implied-in-fact contract claim in paragraph 26 of the complaint. Therefore, in reviewing the propriety of the district court's grant of American Drew's motion to dismiss, we will also consider the provisions of the agreement.
It is clear from the complaint itself...
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