Schwarz v. St. Jude Med., Inc.
Schwarz v. St. Jude Med., Inc.
Opinion
*748 The Mecklenburg County Superior Court dismissed plaintiff's complaint against her former employer, St. Jude Medical S.C., Inc., and its parent company, St. Jude Medical, Inc., because the forum-selection clause in the employment agreement designates Ramsey County, Minnesota, as the exclusive venue to litigate plaintiff's claims. Pursuant to N.C. Gen. Stat. § 22B-3 (2015), "any provision in a contract entered into in North Carolina that requires the prosecution of any action ... that arises from the contract to be instituted or heard in another state is against public *749 policy and is void and unenforceable." Because the employment agreement was "entered into in North Carolina," not Texas as the trial court concluded, the forum-selection clause is void and unenforceable under N.C. Gen. Stat. § 22B-3. Reversed.
I. Background
Plaintiff Molly Schwarz is a resident of Mecklenburg County. Defendants St. Jude Medical and St. Jude Medical S.C. are Minnesota corporations doing business in Mecklenburg County. St. Jude Medical S.C. has its principal office in Austin, Texas.
*786 Plaintiff was employed as a clinical specialist with St. Jude Medical S.C. from 2004 to 2009. St. Jude Medical S.C. employs a sales team that sells medical devices to hospitals, clinics, and other medical providers. In her role, plaintiff supported the sales representatives and their provider accounts, including Duke University and Duke University Health Systems, Inc. (collectively, Duke), where Dr. Thomas J. Weber Jr. was employed.
After her first term of employment ended, plaintiff re-applied for the same position. On 27 August 2012, she executed an at-will employment agreement with St. Jude Medical S.C. and began working. The agreement addresses standard employment issues including duties, compensation, and termination. It also contains the following choice-of-law and forum-selection provisions:
Governing Law . This Agreement will be governed by the laws of the state of Minnesota without giving effect to the principles of conflict of laws of any jurisdiction.
Exclusive Jurisdiction . All actions or proceedings relating to this Agreement will be tried and litigated only in the Minnesota State or Federal Courts located in Ramsey County, Minnesota. Employee submits to the exclusive jurisdiction of these courts for the purpose of any such action or proceeding, and this submission cannot be revoked. Employee understands that Employee is surrendering the right to bring litigation against SJMSC outside the State of Minnesota.
Plaintiff signed the agreement in North Carolina and faxed it to a representative of St. Jude Medical S.C. in Austin, Texas, where, on 13 September 2012, Keith Boettiger executed the agreement on behalf of St. Jude Medical S.C. By its terms, the agreement was effective as of 4 September 2012.
*750 Plaintiff's sales team worked primarily with Duke. In July 2014, plaintiff reported to management that Dr. Weber was involved in an extramarital affair with one of plaintiff's co-workers. When Ted Cole, a manager for St. Jude Medical S.C., spoke with Dr. Weber about the allegations, Dr. Weber was "irate." He told Cole that plaintiff was in his clinic "talking to his staff members around patients" about his personal life. Dr. Weber demanded a letter of apology and informed Cole that plaintiff was no longer welcome in the Duke-Raleigh system, which comprised more than 85 percent of St. Jude Medical S.C.'s Raleigh territory.
Seven months later, on Friday, 27 February 2015, Cole received an e-mail from a patient who reported feeling "very uncomfortable" during an appointment with plaintiff. The patient complained that plaintiff read the film backwards, exposed the patient to unnecessary radiation, and several times during three visits she was "loud," "argumentative," and asked "the same questions over and over again." Cole forwarded the e-mail to his manager, Eric Delissio, who in turn sent the e-mail to human resources. Plaintiff was terminated the following Monday.
Plaintiff filed a complaint in Mecklenburg County Superior Court alleging claims of wrongful discharge from employment in violation of public policy and libel against St. Jude Medical and St. Jude Medical S.C.; tortious interference with contractual rights and libel against Cole and Delissio; and tortious interference with contractual rights against Duke and Dr. Weber.
St. Jude Medical and St. Jude Medical S.C. (collectively, the St. Jude defendants) moved to dismiss plaintiff's complaint pursuant to Rule 12(b)(3) of the North Carolina Rules of Civil Procedure. 1 The St. Jude defendants argued that venue in Mecklenburg County was improper because the forum-selection clause in the employment agreement provides that all claims related to the agreement must be litigated in the state or federal courts located in Ramsey County, Minnesota. Although out-of-state forum-selection clauses are void and unenforceable in North Carolina, see N.C. Gen. Stat. § 22B-3, the St. Jude defendants averred that the contract was not formed in this State.
*787 The trial court granted the St. Jude defendants' motion to dismiss for improper venue. The court concluded that the agreement was formed in Texas, rather than North Carolina, because Boettiger's signature was the "the last essential act." As such, N.C. Gen. Stat. § 22B-3 did not apply and the forum-selection clause was valid, reasonable, and enforceable.
*751 The court also concluded that requiring plaintiff to prosecute her claims in Minnesota "is not seriously inconvenient" and would not effectively deprive her of her day in court. Plaintiff timely appeals.
II. Discussion
A. Jurisdiction
We first address whether plaintiff has vested jurisdiction in this Court to review her appeal on the merits. "An order ... granting a motion to dismiss certain claims in an action, while leaving other claims in the action to go forward, is plainly an interlocutory order."
Pratt v. Staton
,
Plaintiff appeals from an interlocutory order dismissing her claims against the St. Jude defendants while allowing her other claims to move forward against defendants Cole, Delissio, Duke, and Dr. Weber. While the order was "a final judgment as to one or more but fewer than all of the claims or parties," N.C. Gen. Stat. § 1A-1, Rule 54(b), the trial court did not certify the order for immediate appellate review. By virtue of the substantial right doctrine, however, plaintiff has provided an alternative basis to appeal the interlocutory order.
First, as plaintiff correctly notes, "our case law establishes firmly that an appeal from a motion to dismiss for improper venue based upon a jurisdiction or venue selection clause dispute deprives the appellant of a substantial right that would be lost."
Mark Grp. Int'l, Inc. v. Still
,
*752
See, e.g.
,
Hickox v. R&G Grp. Int'l, Inc.
,
Second, "[a] party has a substantial right to avoid two trials on the same facts in different forums where the results would conflict."
Clements v. Clements ex rel. Craige
,
*788
The libel claim against Cole and Delissio is pending in Mecklenburg County Superior Court but the libel claim against the St. Jude defendants, alleged on the theory of
respondeat superior
, was dismissed for improper venue. Dismissing the appeal and allowing plaintiff to prosecute the same claims in different forums "creat[es] the possibility of inconsistent verdicts."
Estate of Harvey v. Kore-Kut, Inc.
,
B. Dismissal for Improper Venue
1. Claims "Relating to" the Employment Agreement
Plaintiff first argues that the trial court erred in dismissing the complaint under Rule 12(b)(3) because her tort claims against the St. Jude defendants are not "related to" the employment agreement and are not subject to the forum-selection clause.
Under our choice-of-law principles, "the interpretation of a contract is governed by the law of the place where the contract was made."
Tanglewood Land Co. v. Byrd
,
Whether a forum-selection clause applies to a plaintiff's claim is a question of law, reviewed by the Minnesota courts
de novo
.
Alpha Sys. Integration, Inc. v. Silicon Graphics, Inc.
,
The forum-selection clause at issue is broadly worded to encompass "all actions or proceedings relating to " the agreement. (Emphasis added.) "Relating to" implies merely "some connection or relation." Webster's New World College Dictionary 1225 (5th ed. 2014). While plaintiff's claims may sound in tort, they still have "some connection" to the employment agreement. Plaintiff's wrongful discharge claim directly implicates the employer-employee relationship created by the agreement. The same can be said of the libel claim, in which plaintiff alleged that "to instigate the termination of plaintiff from St. Jude Medical S.C.," Cole and Delissio published "false and defamatory statements" implying plaintiff was incompetent. As additional evidence of its breadth, the clause provides: "Employee understands that Employee is surrendering the right to bring litigation against SJMSC outside the state of Minnesota." Such language indicates that all claims by an employee against the employer are subject to the forum-selection clause whether in contract, tort, or otherwise. Because the clause reflects an intention to litigate plaintiff's claims in Minnesota, the trial court did not err in finding implicitly that the claims are subject to the forum-selection clause.
2. Forum-Selection Clause
Next, plaintiff argues that the forum-selection clause is void and unenforceable pursuant to N.C. Gen. Stat. § 22B-3, which provides in relevant part:
*754 Except as otherwise provided in this section, any provision in a contract entered into in North Carolina that requires the prosecution of any action ... that arises *789 from the contract to be instituted or heard in another state is against public policy and is void and unenforceable.
N.C. Gen. Stat. § 22B-3 (2015). Plaintiff maintains that the employment agreement was "entered into in North Carolina" because her signature was the last act necessary to the formation of the contract. She contends, therefore, that the forum-selection clause is void and enforceable as a matter of law, and that venue in Mecklenburg County was proper.
As previously noted, plaintiff and the St. Jude defendants agreed that the contract "will be governed by the laws of the state of Minnesota." Nevertheless, our courts have not honored choice-of-law provisions in contracts when
"application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which ... would be the state of applicable law in the absence of an effective choice of law by the parties."
Cable Tel Servs., Inc.
,
As a "determination requiring the ... application of legal principles,"
In re Helms
,
"The essence of any contract is the mutual assent of both parties to the terms of the agreement...."
Snyder v. Freeman
,
Mutual assent of the parties "is operative only to the extent that it is manifested." Restatement (Second) of Contracts § 18 cmt. a. The manifestation of mutual assent "requires that each party either make a promise or begin or render a performance,"
Ordinarily one party, by making an offer, assents in advance; the other, upon learning of the offer, assents by accepting it and thereby forms the contract. The offer may be communicated directly or through an agent; but information received by one party that another is willing to enter into a bargain is not necessarily an offer. The test is whether the offer is so made as to justify the accepting party in a belief that the offer is made to him.
Restatement (Second) of Contracts § 23 cmt. a;
see also
T.C. May Co.
,
*790 1 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 4:3 (4th ed. 2007) ("[I]t is typically the case that one making an offer assents in advance to the proposed bargain, after which all that is required to complete the mutual assent necessary is the assent of the offeree." (footnote omitted)).
The manifestation of mutual assent is judged by an objective standard:
The apparent mutual assent of the parties, essential to the formation of a contract, must be gathered from the language employed by them. The undisclosed intention is immaterial in the absence of mistake, fraud, and the like, *756 and the law imputes to a person an intention corresponding to the reasonable meaning of his words and acts. It judges of his intention by his outward expressions and excludes all questions in regard to his unexpressed intention. If his words or acts, judged by a reasonable standard, manifest an intention to agree in regard to the matter in question, that agreement is established, and it is immaterial what may be the real but unexpressed state of his mind on the subject, as mental assent to the promises in a contract is not essential.... The question whether a contract has been made must be determined from a consideration of the expressed intention of the parties-that is, from a consideration of their words and acts.... [T]he test of the true interpretation of an offer or acceptance is not what the party making it thought it meant or intended it to mean, but what a reasonable person in the position of the parties would have thought it meant.
Howell v. Smith
,
"Under North Carolina law, a contract is made in the place where the last act necessary to make it binding occurred."
Tom Togs, Inc. v. Ben Elias Indus. Corp.
,
The last act necessary to contract formation usually occurs at the place of acceptance. In
Goldman
, the defendant, a Texas corporation with its principal office in Dallas, sent the plaintiff, a North Carolina
*757
resident, a letter detailing the terms of a proposed employment contract.
Relying on
Goldman
, our Supreme Court reached a similar conclusion in
Tom Togs
,
In some instances, a contract may not be formed until the offeror manifests assent through a counter-signature. In
Parson v. Oasis Legal Finance, LLC
,
Other decisions have distinguished between acts which are necessary to form a binding obligation and those which are merely administrative. In
Murray v. Ahlstrom Industrial Holdings, Inc.
,
At this point the contract for employment was complete. Relying upon this employment contract, plaintiff packed up his family and moved to Mississippi for the duration of the project. Although the paperwork filled out by plaintiff was required before he could begin work, this seems to be, and in fact was admitted by [the defendant] to be, mostly administrative. The paperwork appears to be more of a consummation of the employment relationship than the "last act" required to make it a binding obligation.
Id.
at 297,
Analogizing to Goldman and Tom Togs , we agree with plaintiff that the contract in this case was made in North Carolina. By presenting the employment agreement to plaintiff on her first day at work, St. Jude Medical S.C. undeniably signaled a willingness to enter into a bargain, offering plaintiff employment under the terms set forth in the agreement. See Restatement (Second) of Contracts § 24 ("An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it."). In contrast to Parson , where the plaintiff had to sign a release of his credit report and indicate *792 on the draft agreement *759 his desired method to receive funds, here plaintiff was only required to sign the proposed agreement. There were no terms left to negotiate. Cf. Restatement (Second) of Contracts § 33 ("The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance."). Because plaintiff did not propose amended or additional terms, her signature and delivery constituted acceptance.
Defendant maintains that its blank signature line on the last page of the agreement is evidence that plaintiff's acceptance would not conclude the deal; the agreement required further assent by defendant. Based on the language in the agreement and the conduct of the parties, however, defendant's signature was merely a "consummation of the employment relationship," as the Court concluded in
Murray
,
III. Conclusion
The trial court erred in dismissing plaintiff's claims against the St. Jude defendants pursuant to Rule 12(b)(3) of the North Carolina Rules of Civil Procedure. The last act necessary to the formation of the employment agreement was plaintiff's signature and delivery in North Carolina rather than Boettiger's signature in Texas, which can be more aptly described as a "consummation of the employment relationship." Because the contract was "entered into in North Carolina," the Minnesota forum-selection clause is void and unenforceable pursuant to N.C. Gen. Stat. § 22B-3. We reverse the court's order dismissing plaintiff's claims against the St. Jude defendants for improper venue.
REVERSED.
Judge DILLON concurs.
Judge ARROWOOD concurs by separate opinion.
ARROWOOD, Judge, concurring by separate opinion.
*760 I concur in the majority opinion that the Minnesota forum-selection clause is void and unenforceable pursuant to N.C. Gen. Stat. § 22B-3 because the contract was entered into in North Carolina, and therefore, that the trial court's order dismissing plaintiff's complaint must be reversed. However, I reach that result by a somewhat different analysis. I believe that the contract was entered into in North Carolina for the following reasons: When defendant made its offer of employment to plaintiff, the proposed Employment Agreement contained the following language:
C. Modification Prior to Full Execution . No modifications may be made to the terms of this Agreement prior to the full execution of the Agreement without the prior approval of an authorized representative of SJMSC.
The Employment Agreement also provided that:
TO WITNESS THEIR AGREEMENT THE PARTIES HAVE SIGNED BELOW AS OF THE FIRST DAY WRITTEN ABOVE.
The "first day written above" was designated as 4 September 2012.
"The question whether a contract has been made must be determined from a consideration of the expressed intention of the parties-that is from a consideration of their words and acts."
Normile v. Miller
,
The St. Jude defendants also moved to dismiss plaintiff's wrongful discharge and libel claims pursuant to Rule 12(b)(6).
Reference
- Full Case Name
- Molly SCHWARZ, Plaintiff, v. ST. JUDE MEDICAL, INC., St. Jude Medical S.C., Inc., Duke University, Duke University Health System, Inc., Eric Delissio, Ted Cole, and Thomas J. Weber, Jr., Defendants.
- Cited By
- 21 cases
- Status
- Published
- Syllabus
- Interlocutory improper venue forum selection clause contract formation last essential act