Tetrev v. Pride Intern., Inc.

• Decision Date: 28 April 2006
• Docket Number: C.A. No. 2:04-cv-23161-23.
• Citation: 444 F.Supp.2d 524
• Parties: Peter V. TETREV, Plaintiff, v. PRIDE INTERNATIONAL, INC., Petrodrill Four, Ltd. a/k/a Petrodrill Construction, and Petroleum International PTE Ltd., Defendants.
• Court: U.S. District Court — District of South Carolina

444 F.Supp.2d 524

Peter V. TETREV, Plaintiff, v. PRIDE INTERNATIONAL, INC., Petrodrill Four, Ltd. a/k/a Petrodrill Construction, and Petroleum International PTE Ltd., Defendants.

C.A. No. 2:04-cv-23161-23.

United States District Court, D. South Carolina, Charleston Division.

April 28, 2006.

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Coming Ball Gibbs, Jr., Gibbs and Holmes, David B. Marvel, Robertson and Hollingsworth, Jeffrey A. Barnwell, Leath Bouch and Crawford, Charleston, SC, for Plaintiff.

Carol B. Ervin, Nancy Bloodgood, Young Clement Rivers, Anne Louise Ross, Marvin Dewitt Infinger, Haynsworth Sinkler Boyd, Charleston, SC, Stephen B. Crain, Bracewell and Giuliani, Houston, TX, for Defendants.

ORDER

DUFFY, District Judge.

This matter is before the court on Plaintiff Tetrev's Motion to Reconsider this court's Order (Doc. No. 44) granting in part and denying in part Defendant's Motion to Dismiss. Tetrev brings this Motion pursuant to Rules 59 and 60 of the Federal Rules of Civil Procedure.

In its Order dated February 27, 2006, the court found that the 2004 employment contract between PIPL and Tetrev, which was the subject of several of Plaintiffs claims, contained an enforceable forumselection provision. Accordingly, the court declined to exercise jurisdiction over the causes of action arising from the employment contract. The court dismissed Plaintiff's claims as against all defendants for (1) breach of the 2004 employment contract, (2) intentional misrepresentation, and (3) wages, pursuant to Rules 12(b)(1), 12(b)(3), and 12(b)(6).

I. Motion to Reconsider

Tetrev's Motion to Reconsider is filed under Rule 59(e). Reconsideration of a judgment is an extraordinary remedy which should be used sparingly. Pacific Ins. Co. v. American Nat. Fire Ins. Co., 148 F.3d 396, 403 (4th Cir.1998). A motion to reconsider may be granted for three reasons: 1) to accommodate an intervening change in controlling law; 2) to account for new evidence not available at trial; or 3) to correct a clear error of law or a manifest injustice. Id. Motions to reconsider may not be used to initiate arguments or legal theories that the proponent had the ability to address prior to the judgment. Id.

Tetrev argues that 1) reconsideration is necessary to accommodate an intervening change in controlling law and 2) reconsideration is needed to correct a clear error of law and a manifest injustice.

1) Intervening Change in Controlling Law

Tetrev submits that the South Carolina Supreme Court decision of Myron Johnson & Building Environmental Services, Inc. v. Key Equipment Finance, et al., 367 S.C. 665, 627 S.E.2d 740 (2006), is an intervening change in controlling law such that this court should reconsider its Order. In a case of first impression, the Myron Court held "when wrongs arise inducing a party to execute a contract, and [they are] not directly from the breach of that contract, the remedies and limitations, [including forum selection clauses,] specified by the contract do not apply." Id. at 367 S.C. at 666-67, 627 S.E .2d 740. The South Carolina Supreme Court noted that this holding is "consistent with South Carolina's general disfavoring of forum selection clauses." Id. Relying on the ruling in Myron, which Tetrev argues applies to this case via the Erie doctrine, Tetrev urges the court to reconsider its dismissal of the fraudulent inducement claim, and to generally reconsider its decision to enforce the forum selection provision.

Contracts of employment of seaman, such as the 2004 employment contract between Tetrev and PIPL, are "maritime contracts." Kossick v. United Fruit Company, 365 U.S. 731, 81 S.Ct. 886, 6 L.Ed.2d 56 (1961) (Justice Harlan pointed out that "[w]ithout doubt a contract for hire either of a ship or of the sailors and officers to man her is within the admiralty jurisdiction"). Generally, federal maritime law governs maritime contracts; state law applies only when "no federal statute or well established rule of admiralty exists." Commercial Union Ins. Co. v. Charleston Marine Leasing Co., 843 F.Supp. 124, 127 (E.D.Va.1994); see also Randall v. Chevron U.S.A., Inc., 13 F.3d 888 (5th Cir.1994) ("Although the construction of maritime contracts is governed by federal law, the law of the state in which the maritime insurance contract was issued is applied if no relevant federal law exists."). Where both state and federal law exists, state law should not govern if it is materially different from federal law. Windsor Mount Joy Mut. Ins. Co. v. Giragosian, 57 F.3d 50 (1st Cir.1995).

In this case, it is clear that the federal rule favoring the enforcement of forum selection clauses¹ is directly in conflict with South Carolina's "general disfavoring" of such clauses. Accordingly, the court correctly applied the federal rule favoring enforcement in its February 27 Order, and finds that the federal rule continues to control this issue. As such, the South Carolina Myron case does not constitute an "intervening change in controlling law" such that reconsideration of the court's Order is necessary.

2) Clear Error of Law/Manifest Injustice

a. Whether the Court Applied the Appropriate Standard of Review

Plaintiff next contends that the court erred in its analysis because it went outside the pleadings in determining whether the forum selection clause is enforceable. Plaintiff claims that considering evidence outside the pleadings is inappropriate under a Rule 12 Motion to Dismiss, as was brought by Defendant.

Defendant made its motion to dismiss in deference to the forum selection clause pursuant to Rule 12(b)(1), 12(b)(3) or 12(b)(6) because "there does not appear to be a consensus as to which rule such a motion should be made pursuant to." Atlantic Floor Services, Inc. v. Wal-Mart Stores, Inc., 334 F.Supp.2d 875, 877 (D.S.C.2004). Regardless of the rule cited, the proper approach is to regard a motion raising a forum selection clause, however labeled, as one to specifically enforce the clause. Insurance Products Marketing, Inc. v. Indianapolis Life Ins. Co., 176 F.Supp.2d 544, 547 (D.S.C.2001); see MIS Bremen, 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972); Shell v. R.W. Sturge Ltd., 55 F.3d 1227, 1229 (6th Cir.1995); Licensed Practical Nurses v. Ulysses Cruises, Inc., 131 F.Supp.2d 393, 407-09 (S.D.N.Y.2000) (extensive discussion). When evaluating a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) or 12(b)(3), the court does not have to accept the pleadings as true, and may go beyond the face of the complaint and consider evidence outside of the pleadings. See Evans v. B.F. Perkins Co., 166 F.3d 642 (4th Cir.1999) (12(b)(1) motion); R.A. Argueta v. Banco Mexicano, S.A., 87 F.3d 320, 324 (9th Cir.1996) ("Analysis under Rule 12(b)(3) ... permits the district court to consider facts outside of the pleadings and is consistent with the Supreme Court standard for resolving forum selection clause cases."). In so doing, the court does not convert the motion to dismiss into one for summary judgment. See Williams v. United States, 50 F.3d 299, 304 (4th Cir.1995); Richmond, Fredericksburg & Potomac R. Co. v. U.S., 945 F.2d 765, 768 (4th Cir.1991). Further, on a 12(b)(6) motion, the court may properly consider a contract that is integral to the allegations contained in the complaint, which is referenced in both the complaint and the plaintiffs briefing in response to the motion to dismiss, and which the plaintiff had possession of and relied upon in framing his complaint. See Maltz v. Union Carbide Chemicals & Plastics Co., Inc., 992 F.Supp. 286, 294-5 (S.D.N.Y. 1998).

In determining whether to specifically enforce the subject forum-selection provision, the court therefore properly considered evidence outside the face of the complaint and in doing so did not convert the motion into one for summary judgment. Accordingly, regardless of whether the court's analysis was under 12(b)(1), 12(b)(3), or 12(b)(6), the court's consideration of the language of the contract and other evidence outside the pleadings does not constitute a "clear error of law" such that reconsideration of its Order is appropriate.

b. Whether the Court Erred in Applying the Law

In the Motion for Reconsideration, Tetrev re-hashes his earlier arguments citing to no clear error of law in the court's decision² and raises several new arguments that could have been raised before the judgment was issued.³ These arguments are not an appropriate basis for reconsideration. Pacific Ins. Co. v. American Nat. Fire Ins. Co., 148 F.3d 396, 403 (4th Cir.1998)("Rule 59(e) motions may not be used, however, to raise arguments which could have been raised prior to the issuance of the judgment, nor may they be used to argue a case under a novel legal theory that the party had the ability to address in the first instance."); Hutchinson v. Staton, 994 F.2d 1076, 1082 (4th Cir.1993) ("While plaintiffs disagreed with how the district court applied the Christiansburg standard, mere disagreement does not support a Rule 59(e) motion."); McCall v. Williams, 59 F.Supp.2d 556, 558 (D.S.C.1999) ("Mere disagreement with how the law is applied does not support a Rule 59(e) motion."). Thus, Tetrev's Motion for Reconsideration must be denied.

In the interests of clarity, however, the court briefly addresses again Tetrev's argument that the forum selection provision should be set aside because (1) an unknown agent of either Pride or PIPL fraudulently induced him to sign the 2004 employment contract by telling him that it was the same as his previous contract, and (2) he was forced to sign the contract "under duress".

The fact that an agent of PIPL or Pride assured Tetrev that the 2004 employment contract was the same as his previous contract is not sufficient to invalidate the forum-selection provision. Forum-selection clauses "should be given full effect" when "a freely negotiated private international agreement (is) unaffected by fraud," The Bremen...