254 N.C. App. 747
N.C. Ct. App.2017Background
- Molly Schwarz, a North Carolina resident, signed an at-will employment agreement with St. Jude Medical S.C. on August 27, 2012 while in North Carolina; she faxed the signed agreement to St. Jude in Austin, Texas, where a company representative later signed it. The agreement was effective September 4, 2012.
- The agreement contained a Minnesota choice-of-law clause and an exclusive forum-selection clause designating Ramsey County, Minnesota courts for all actions “relating to” the agreement.
- Schwarz was terminated in February 2015 and sued in Mecklenburg County, alleging wrongful discharge, libel, and tortious interference against St. Jude and other defendants.
- St. Jude moved to dismiss for improper venue under Rule 12(b)(3), arguing the contract was formed in Texas and the Minnesota forum-selection clause was enforceable; the trial court granted the motion.
- The Court of Appeals considered (1) whether it had jurisdiction to hear the interlocutory appeal and (2) whether the contract was ‘‘entered into in North Carolina’’ so that N.C. Gen. Stat. § 22B-3 renders the out-of-state forum clause void.
- The court held the last act necessary to form the contract was Schwarz’s signing and delivery in North Carolina, so the contract was entered into in North Carolina and the Minnesota forum-selection clause is void under N.C. Gen. Stat. § 22B-3; the dismissal for improper venue was reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether tort and wrongful discharge claims are covered by the agreement's forum-selection clause | Schwarz: claims "relate to" the employment agreement but even if they do, clause unenforceable under statute | St. Jude: clause broadly covers "all actions relating to" the agreement, so plaintiff's claims must be litigated in Minnesota | Held: Clause language is broad and covers plaintiff's tort and wrongful discharge claims (they "relate to" the agreement) |
| Whether the forum-selection clause is enforceable under N.C. Gen. Stat. § 22B-3 | Schwarz: contract was entered into in North Carolina because her signing/delivery was the last act; §22B-3 voids out-of-state forum clauses | St. Jude: contract formed in Texas when company rep counter-signed; §22B-3 does not apply | Held: Contract formed in North Carolina (last act was plaintiff's signing/delivery); §22B-3 applies and voids the Minnesota forum-selection clause |
| Proper place of contract formation (choice-of-law for formation question) | Schwarz: North Carolina has materially greater interest; apply NC law to formation | St. Jude: points to Minnesota/Texas connections and defers to contract's Minnesota choice-of-law | Held: Public policy and interests require applying North Carolina law to determine formation; NC law governs where contract was made |
| Appealability of interlocutory dismissal for improper venue | Schwarz: appealable because substantial right affected (risk of inconsistent trials, loss of right to proper forum) | St. Jude: interlocutory order not final; no immediate appeal | Held: Court has jurisdiction under substantial-right doctrine to review interlocutory dismissal for improper venue |
Key Cases Cited
- Veazey v. City of Durham, 231 N.C. 357 (N.C. 1950) (defining interlocutory order and finality principles)
- Goldston v. Am. Motors Corp., 326 N.C. 723 (N.C. 1990) (interlocutory orders and appealability principles)
- Goldman v. Parkland of Dallas, Inc., 277 N.C. 223 (N.C. 1970) (contract formed where last act of acceptance occurred)
- Tom Togs, Inc. v. Ben Elias Indus. Corp., 318 N.C. 361 (N.C. 1986) ("last act" test for place of contract formation)
- Parson v. Oasis Legal Finance, LLC, 214 N.C. App. 125 (N.C. Ct. App. 2011) (counter-signature as last act may determine contract formation)
- Murray v. Ahlstrom Indus. Holdings, Inc., 131 N.C. App. 294 (N.C. Ct. App. 1998) (distinguishing administrative paperwork from last act of formation)
- Terra Int’l, Inc. v. Miss. Chem. Corp., 119 F.3d 688 (8th Cir. 1997) (forum-selection clause scope—whether tort claims fall within clause depends on clause wording and facts)