Pirkey v. Hospital Corp. of America, Civ. A. No. 76-K-100.
| Citation | 483 F. Supp. 770 |
| Decision Date | 01 February 1980 |
| Docket Number | Civ. A. No. 76-K-100. |
| Parties | Will P. PIRKEY, M. D., Plaintiff, v. HOSPITAL CORPORATION OF AMERICA, a Foreign Corporation, Defendant. |
| Court | U.S. District Court — District of Colorado |
John A. Meininger, Denver, Colo., Richard D. Dittemore, Englewood, Colo., for plaintiff.
C. Willing Browne, Shayne M. Madsen, Gorsuch, Kirgis, Campbell, Walker & Groves, Denver, Colo., for defendant.
This breach of contract action concerns agreements involving the employment of plaintiff, Dr. Pirkey, as an otolaryngologist at the King Faisal Specialist Hospital in Riyadh, Saudi Arabia. Defendant is an international recruiting and hospital management company. It asserts that in regard to the transactions which are the focus of the controversy involved in the instant case, it acted as the agent for the King Faisal Specialist Hospital.
Plaintiff allegedly first became aware of the employment possibilities at the King Faisal Specialist Hospital when he read a recruitment advertisement in a national medical publication. Plaintiff alleges that in reliance upon an oral offer made by defendant, he made arrangements in preparation for departure to Saudi Arabia. Such arrangements allegedly included the termination of his practice, the sale of his equipment, the referral of patients to other physicians and the shipment of his personal belongings to Saudi Arabia.
Before Dr. Pirkey's scheduled departure for Saudi Arabia, he received two employment agreements providing for the first and second years of employment. These contracts followed discussions between Dr. Pirkey and employees of defendant regarding employment. Plaintiff signed the two agreements. Included in each was a clause providing that the agreements would be construed in accordance with the laws of Saudi Arabia. The first year agreement provided that the employee would be on probation for the first 90 days. Provisions specifically relating to termination of employment were also included in the agreement.
Because of the assassination of King Faisal as well as other reasons, Dr. Pirkey did not proceed to Riyadh as scheduled. Thereafter, defendant informed plaintiff that his employment was terminated effective May 12, 1975. Termination of plaintiff's employment followed an investigation of Dr. Pirkey's application and references. Defendant alleges that among other things, Dr. Pirkey did not include in his application information regarding his 1974 conviction for shoplifting. Plaintiff alleges that he plead nolo contendere to the alleged petty theft.
Plaintiff seeks damages arising from an alleged breach of contract as well as damages from actions brought pursuant to theories of promissory estoppel and outrageous conduct.
Defendant's motion to dismiss was denied on June 18, 1976, and its motion for summary judgment was denied on March 9, 1979. At the time both motions were denied, Chief Judge Winner indicated that Saudi Arabian law applied to the substantive issues of the case. The parties have been unable to agree upon the import and extent of the application. On May 21, 1979, defendant filed a motion for an in limine determination of choice-of-law which is now before me for consideration.
Defendant contends that Saudi Arabian and not Colorado law governs the contractual rights and duties of the parties. The choice-of-law rules of Colorado determine whether Colorado or Saudi Arabia provide the appropriate body of substantive law applicable to the issues involved in this controversy. Klaxon v. Stentor Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Recently, the Colorado Supreme Court in Wood Bros. Homes, Inc. v. Walker Adjustment Bureau, Colo., 601 P.2d 1369 (1979), expressly adopted the Restatement (Second) of Conflict of Laws for contract actions.
Restatement (Second) of Conflict of Laws § 187 provides:
In support of its assertion that Saudi Arabian law is applicable, defendant directs the court's attention to the choice-of-law clause contained within the employment agreement. The clause provides:
This agreement shall be construed in accordance with the Laws and Regulations of the Kingdom of Saudi Arabia.1
Under the Restatement approach the forum should apply the law chosen by the parties unless there is no reasonable basis for the choice. It is clear that Saudi Arabia bears enough of a relationship to this transaction to remove doubts that there was not a reasonable basis for the parties choice. Under the contract, Dr. Pirkey's services were to be rendered at the King Faisal Hospital in Saudi Arabia. Thus performance was to occur in Saudi Arabia. This fact alone provides a sufficient basis for the parties' choice.2
Choice-of-law provisions such as the one contained in the employment agreement are ordinarily given effect; they are considered a clear manifestation of the parties' intentions.3 Plaintiff, however, attacks the validity of the choice-of-law provision. In his brief, plaintiff suggests that the provision is contained in an adhesion contract and as such should not be respected. Plaintiff seeks support in Comment b to § 187 which reads as follows:
Impropriety or mistake. A choice-of-law provision, like any other contractual provision, will not be given effect if the consent of one of the parties to its inclusion in the contract was obtained by improper means, such as by misrepresentation, duress, or undue influence, or by mistake . . .. A factor which the forum may consider is whether the choice-of-law provision is contained in an "adhesion" contract namely one that is drafted unilaterally by the dominant party and then presented on a "take-it-or-leave-it" basis to the weaker party who has no real opportunity to bargain about its terms. Such contracts are usually prepared in printed form, and frequently some of their provisions are in extremely small print. Common examples are tickets of various kinds and insurance policies. Choice-of-law provisions contained in such contracts are usually respected. (Emphasis added.) Nevertheless, the forum will scrutinize such contracts with care and will refuse to apply any choice-of-law provision they may contain if to do so would result in substantial injustice to the adherent.
In the instant case, the choice-of-law provision explicitly provided that the agreement would be construed in accordance with Saudi Arabian law. Although the agreement is a printed form apparently prepared by the King Faisal Specialist Hospital, this alone does not define adhesion contracts. Clinic Masters v. District Court for Cty. of El Paso, Colo., 556 P.2d 473 (1976). As the court stated in the above-cited case, plaintiff does not show that there was no opportunity for negotiation. Further, this is not a case involving a party with superior bargaining power attempting to take advantage of a weaker party who is incapable of fully understanding the contract provisions. The evidence indicates that Dr. Pirkey signed the contract with full knowledge of its contents. In fact not only the choice-of-law provision but several other provisions in the contract make reference to the applicability of Saudi Arabian Rules and Regulations.4 Further, there is an absence of any evidence that Dr. Pirkey protested the inclusion of such provisions in the contract at the time he signed it or at any other time prior to the initiation of this action.
Protection of parties' expectations is a central policy underlying the law of contracts. Wood Bros. Homes, Inc. v. Walker Adjustment Bureau, supra....
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