Manion v. Nagin, PLAINTIFF-APPELLANT

• Decision Date: 11 June 2001
• Docket Number: DEFENDANTS-APPELLEES,No. 00-3150,PLAINTIFF-APPELLANT,00-3150
• Citation: 255 F.3d 535
• Parties: (8th Cir. 2001) PATRICK T. MANION, JR.,, v. STEPHEN E. NAGIN; HERZFELD & RUBIN; HERZFELD & RUBIN, P.C.; NAGIN GALLOP FIGUEREDO, P.A.; BOAT DEALERS' ALLIANCE, INC., Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 535

255 F.3d 535 (8th Cir. 2001)

PATRICK T. MANION, JR., PLAINTIFF-APPELLANT, v. STEPHEN E. NAGIN; HERZFELD & RUBIN; HERZFELD & RUBIN, P.C.; NAGIN GALLOP FIGUEREDO, P.A.; BOAT DEALERS' ALLIANCE, INC., DEFENDANTS-APPELLEES.

No. 00-3150

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: June 11, 2001

Filed: July 6, 2001

Appeal from the United States District Court for the District of Minnesota.

Before Wollman, Chief Judge, Hamilton¹, and Murphy, Circuit Judges.

Murphy, Circuit Judge

This case grows out of an employment agreement Patrick Manion had with Boat Dealers' Alliance, Inc. (BDA), a buying cooperative of independent retail marine dealers. After Manion was terminated as executive director, he brought this action against BDA and its general counsel Stephen E. Nagin and associated entities, alleging breach of contract and of fiduciary duty, negligence, and interference with contract, and seeking declaratory and injunctive relief. The district court² denied preliminary injunctive and declaratory relief, ordered the parties to arbitration, and stayed the action. Manion appeals. We affirm the order denying a preliminary injunction and dismiss the remainder of the appeal for lack of jurisdiction.

Patrick Manion is a Minnesota resident with many years of experience in the retail boat industry. In 1995, Manion hired attorney Stephen Nagin to help him organize and operate a buying cooperative of independent retail marine dealers. With Nagin's assistance, Boat Dealer's Alliance, Inc. (BDA), was incorporated in Florida later that year. Nagin subsequently drafted a long term Management Agreement (Agreement) between Manion and BDA. This Agreement, which provided that Manion would serve as executive director of BDA for a period of not less than twenty years, included an arbitration clause in the event of any dispute between the parties.³ The Agreement also included a provision permitting either party to request interim judicial relief:

The power conferred by this paragraph is without prejudice to the right of a party under applicable law to request interim relief directly from any court, tribunal, or other governmental authority of competent jurisdiction, and to do so without prior authorization of the arbitrator(s). Such a request for interim relief neither shall be deemed incompatible with, nor a waiver of, the requirement of arbitration of disputes.

Another provision indicated that a party would be "entitled to injunctive relief in case of any breach."

In February 1999, the membership of BDA voted to terminate Manion's employment for gross mismanagement. A year later, Manion filed this lawsuit against BDA, Nagin, and various law firms with which Nagin was or had been affiliated (the Nagin defendants). Manion's complaint alleged a breach of contract claim against BDA and sought declaratory and injunctive relief. Against the Nagin defendants he alleged breach of fiduciary duty, negligence, and interference with contract. Manion also initiated a parallel arbitration proceeding with the American Arbitration Association for determination of the issue of whether BDA had valid cause to terminate him.

The arbitration proceedings were stayed while Manion brought motions in district court, seeking injunctive relief against BDA for reinstatement of the salary and benefits that it had discontinued on termination and declaratory relief regarding the interpretation of the term "anniversary date" in the Agreement. BDA moved in turn to dismiss this action and to compel arbitration, and the Nagin defendants moved for dismissal or for a stay pending arbitration between Manion and BDA. The law firm of Litchford and Christopher moved to dismiss the claims against it for lack of personal jurisdiction.

The court applied federal law to examine whether Manion's claims fell within the scope of the arbitration agreement and concluded that the arbitration clause covered disputes about interpretation of the terms of the Agreement. The court granted BDA's motion to compel arbitration but stayed this action rather than dismissing it. It denied Manion's requests for declaratory and injunctive relief, granted the motion of the Nagin defendants to stay proceedings pending completion of arbitration between Manion and BDA, and dismissed the law firm of Litchford and Christopher for lack of personal jurisdiction.

Manion attempts to appeal all aspects of the district court's order except its dismissal of Litchford and Christopher. He contends that the district court erred in denying his contractual right to interim relief in aid of arbitration, in denying his motion for declaratory relief (which is now described as a motion for partial summary judgment), and in staying Manion's claims against the Nagin defendants. BDA and the Nagin defendants contend that the entire appeal should be dismissed for lack of appellate jurisdiction, but ask for affirmance if jurisdiction exists.

We start with Manion's appeal from the denial of his motion for injunctive relief because interlocutory appellate jurisdiction exists under 28 U.S.C. § 1292(a)(1). See Morgenstern v. Wilson, 29 F.3d 1291, 1294-95 (8th Cir. 1994) ("if an interlocutory order expressly grants or denies a request for injunctive relief . . . the order is immediately appealable as of right"). A district court has broad discretion when ruling on requests for preliminary injunctions, and we will reverse only for clearly erroneous factual determinations, an error of law, or abuse of discretion. See Entergy, Arkansas, Inc. v. Nebraska, 210 F.3d 887, 898 (8th Cir. 2000).

In denying Manion's motion for an injunction, the district court relied on Peabody Coalsales Co. v. Tampa Elec. Co., 36 F.3d 46 (8th Cir. 1994), for the proposition that injunctive relief is inappropriate in a case involving arbitrable issues unless the contract terms contemplate such relief and it can be granted without addressing the merits. The district court observed that the Agreement between Manion and BDA did not contain language similar to the contract in Peabody, which provided for continued performance during the pendency of arbitration, and that it could not grant Manion's motion without interpreting the Agreement and entangling itself in the merits. The court also noted that Manion had not received his salary or benefits for nearly a year before filing this action so an injunction was not needed to maintain the status quo.

Manion claims that Peabody entitles him to injunctive relief. He maintains that the Agreement contains the following qualifying language for such relief:

Both parties acknowledge that a lawsuit merely for damages that occur, or are likely to occur, as a consequence of a breach of any of the provisions of this Agreement will be inadequate, and that either party is entitled to injunctive relief in case of any breach, as well as all other relief available via law or equity.

[The agreement to arbitrate] is without prejudice to the right of a party under applicable law to request interim relief directly from any court, tribunal, or other governmental authority of competent jurisdiction, and to do so without prior authorization of the arbitrator(s). Such a request for interim relief neither shall be deemed incompatible with, nor a waiver of, the requirement of arbitration of disputes (emphasis supplied).

In a case involving the Federal Arbitration Act...