Sherrill K. Rhodes v. Unisys Corporation

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 05-14783
March 14, 2006
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK
D. C. Docket No. 03-00187-CV-W-N
SHERRILL K. RHODES,
Plaintiff-Appellant,
versus
UNISYS CORPORATION,
a Corporation,
LARRY WEINBACH,
Individually, Chairman and Chief Executive
Officer,
MALCOLM BLACK,
Individually, a Manager,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Alabama
_________________________
(March 14, 2006)
Before BIRCH, BLACK and BARKETT, Circuit Judges.
PER CURIAM:
This case requires us to apply Alabama tort law in a diversity case appealed
from the Middle District of Alabama, to review the district court’s decision not to
allow Rhodes to amend his complaint, and to decide whether we may exercise
personal jurisdiction over Larry Weinbach, the CEO of the defendant-appellee
corporation, Unisys. The district court ruled against Rhodes on his fraud claim,
decided not to allow Rhodes to amend his complaint to add a claim against
Weinbach, and declined to exercise personal jurisdiction over Weinbach. We
AFFIRM.
I. BACKGROUND
Rhodes worked in various capacities for Unisys for over 21 years. In 1994,
he was promoted to Director of the company’s Montgomery Data Center. In
December 2001, he retired pursuant to an early retirement incentive program.
In July 2001, Rhodes was selected to participate in the 2001 Federal
Program Manager Incentive Compensation Plan. Under the plan, Rhodes could
earn $15,000 in incentive compensation for meeting various performance targets.
He signed the agreement on 31 July 2001 and subsequently achieved the
performance targets for the year.
2
The plan described performance goals and laid out the relationship between
those goals and the fiscal incentives. The plan also provided that Unisys retained
the ability to terminate or revise the provisions of the plan at any time. Unisys
exercised this right to terminate the plan in early 2002 when the company failed to
meet its business objectives for the year.1
Bringing both contract and tort causes of action, Rhodes sued Unisys and
some of its management in federal court in Alabama. The district court concluded
that there was a valid contract between Rhodes and Unisys that was breached when
Unisys did not pay Rhodes under the plan. Rhodes was awarded $19,297.50. The
district court granted Unisys summary judgment on the parallel tort claims, one of
which is before us on appeal.
The court concluded that it did not have personal jurisdiction over Weinbach
for the breach of contract claim and two of the three fraud claims. As to the third
fraud claim, for fraudulent misstatement, the court found that Rhodes had failed to
state a claim upon which relief could be granted and dismissed it. Rhodes now
appeals the district court’s determination regarding personal jurisdiction over
Weinbach.
1
The notification of termination came by way of an email from Unisys’s CEO, Larry
Weinbach, that was sent to all incentive plan participants. This email is the basis upon which
Rhodes asserts that a court in Alabama could hale Weinbach before it. There is no evidence in
the record that Rhodes actually received the email from Weinbach, which was dated 3 January
2002, the week after Rhodes retired from the company.
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Finally, Rhodes sought to amend his complaint to add a claim for
interference with a contract against Weinbach. The district court denied his motion
to amend because such amendment would be futile. Rhodes appeals, asserting that
his claim against Weinbach is neither futile on the merits nor due to be dismissed
for lack of personal jurisdiction.
II. DISCUSSION
“We review a grant of summary judgment de novo, using the same legal
standard as the district court.” Merritt v. Dillard Paper Co., 120 F.3d 1181, 1184
(11th Cir. 1997). “[S]ummary judgment is proper ‘if the pleadings, depositions . . .
and . . . affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.’” Celotex
Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 2552 (1986) (quoting Fed. R.
Civ. P. 56(c)). The evidence, and all inferences drawn from the facts, “must be
viewed in the light most favorable to the [nonmoving party].” Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986).
We also review decisions regarding personal jurisdiction de novo. Meier v.
Sun Int’l Hotels, Ltd., 288 F.3d 1264, 1268 (11th Cir. 2002). “We review the
district court’s refusal to grant leave to amend for abuse of discretion, although we
review de novo the underlying legal conclusion of whether a particular amendment
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to the complaint would be futile.” Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194,
1199 (11th Cir. 2001) (citations and quotations omitted). We next address
Rhodes’s three enumerations of error: (1) the district court’s grant of summary
judgment on the promissory fraud claim to Unisys; (2) the district court’s
conclusion that it could not assert personal jurisdiction over Weinbach; and (3) the
district court’s decision not to allow Rhodes’s to amend his complaint to add a tort
claim against Weinbach.
A. Promissory Fraud
To establish a promissory fraud claim under Alabama law, the plaintiff must
show that the defendant made a false representation of a material fact upon which
the plaintiff reasonably relied; the plaintiff was injured as a proximate result of the
misrepresentation; the defendant had no intention to perform the promised act; and
the defendant acted with the intent to deceive. Brabham v. Am. Nat’l Bank of
Union Springs, 689 So. 2d 82, 87 (Ala. Civ. App. 1996). The district court
concluded that Rhodes had failed to show Unisys’s intent to deceive. Intent to
deceive must be substantiated by the evidence in order for there to be a jury
question regarding a claim for promissory fraud. Cabnetware, Inc. v. Birmingham
Saw Works, Inc., 614 So. 2d 1034, 1037 (Ala. 1993) (“The failure to perform,
alone, is not evidence of intent not to perform at the time the promise was made.”).
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Reviewing the record, we conclude that Rhodes attempts to rely on an inference of
intent not to perform, which might be drawn from Unysis’s failure to perform,
rather than providing any actual evidence of Unisys’s intent to deceive at the time
of contract formation. Because there is no evidence in the record of intent to
defraud, the district court did not err when it granted summary judgment to Unisys.
B. Personal Jurisdiction
Federal courts sitting in diversity are bound by the same due process limits
on the exercise of personal jurisdiction as local state courts. Charlie Fowler
Evangelistic Ass’n v. Cessna Aircraft Co., 911 F.2d 1564, 1565 (11th Cir. 1990)
(per curiam). Alabama allows the courts of its state to exercise jurisdiction to the
limit provided by the Due Process Clause of the Fourteenth Amendment. Ruiz de
Molina v. Merritt & Furman Ins. Agency, Inc., 207 F.3d 1351, 1355–56 (11th Cir.
2000). Thus, a court may summon a defendant to a forum when the cause of action
is related to his contacts with that forum. Helicopteros Nacionales de Colombia v.
Hall, 466 U.S. 408, 414–15 nn. 8, 9, 104 S. Ct. 1868, 1872 nn. 8, 9 (1984). Of
course, a court could also summon a nonresident to answer claims unrelated to his
contacts with the forum so long as those contacts are “continuous and systematic.”
Id. Rhodes concedes that there is no such general personal jurisdiction over
Weinbach in Alabama.
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The fundamental inquiry of specific jurisdiction is whether the defendant has
such “minimum contacts with [the state] such that the maintenance of the suit does
not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co.
v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945) (citation omitted).
Such minimum contacts exist if “the defendant’s conduct and connection with the
forum State are such that he should reasonably anticipate being haled into court
there.” Burger King v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2183
(1985) (citations omitted). Thus, jurisdiction would be proper when “the litigation
results from alleged injuries that ‘arise out of or relate to’” activities engaged in by
the defendant, such that the defendant has “purposefully avail[ed]” himself of the
forum state. Id. at 473, 475, 105 S. Ct. at 2182, 2183 (citations omitted). “This
‘purposeful availment’ requirement ensures that a defendant will not be haled into
a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.”
Id. at 475, 105 S. Ct. 2183 (citations omitted). “Jurisdiction is proper, however,
where the contacts proximately result from actions by the defendant himself that
create a ‘substantial connection’ with the forum State.” Id., 105 S. Ct. at 2183–84
(citations omitted).
Rhodes cites Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482 (1984), for the
proposition that the allegedly tortious decision made in a nonforum state that has
an effect in Alabama makes the exercise of jurisdiction in Alabama proper. In
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Calder, a libel action was commenced in California against a Florida defendant
author. Id. at 785, 104 S. Ct. at 1484. The Court observed that California was the
focal point of the article and the harm. Id. at 789, 104 S. Ct. at 1486. Because the
email from Weinbach was not focused on causing injury in Alabama, the Calder
analysis is inapposite. The Calder effects test is a lens through which the
connectivity between defendant, cause of action, and forum state may be viewed.
As discussed in the following sections, we conclude that there is no connection
between the asserted contact and any cause of action, so Rhodes’s argument fails.
Because Rhodes concedes that federal courts would only have personal
jurisdiction over Weinbach for specific causes of action, we must review each
cause of action to see if any of them sufficiently connect Weinbach to the
jurisdiction such that the exercise of jurisdiction over him is appropriate. See
Helicopteros, 466 U.S. at 414 n.8, 104 S. Ct. at 1872 n.8. Rhodes asserts three
causes of action, which must each be examined to see if any would allow the court
to assert jurisdiction over Weinbach. These causes of action are for breach of
contract, fraud in the inducement, and fraudulent suppression.
The district court concluded that the only contact between Weinbach and the
state of Alabama was the January email that informed plan participants about the
company’s failure to meet its financial objectives and that disclosed the company’s
intention not to pay incentive plan bonuses as a result. On appeal, Rhodes does not
8
argue that there were other relevant contacts. Instead, Rhodes argues that the one
email is sufficient.
It is unlikely that a single contact with the forum state by Weinbach will be
sufficient to create jurisdiction over him by the courts in Alabama. See, e.g.,
Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1251 (11th Cir.
2000) (per curiam) (finding no personal jurisdiction from limited telephonic
contact and no visit to forum state); Borg-Warner Acceptance Corp. v. Lovett &
Tharpe, Inc., 786 F.2d 1055, 1060 (11th Cir. 1986) (collecting cases where
personal jurisdiction was not found over nonresidents for one-time transactions).
The causes of action that Rhodes brought were unrelated to the email sent by
Weinbach. Because Weinbach was not a party to the incentive contract, his email
could not have breached the contract. Likewise, the email came in January, well
after the contract’s July formation, so there is no connection between the email and
a claim for fraud in the inducement. Finally, a claim for fraudulent suppression
would lie only if information were withheld during the pendency of contract
formation or performance. Because the email came after performance was
completed, it could not be related to information suppressed during the formation
or performance of the contract.
A single email contact with a forum, especially when the email is unrelated
to the causes of action, will not provide a basis for personal jurisdiction.
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Weinbach, therefore, could not reasonably believe that he would be haled into a
court in Alabama. The district court properly dismissed these causes of action for
lack of personal jurisdiction over Weinbach.
C. Motion to Amend
The district court declined to allow Rhodes to amend his complaint because
such amendment would be futile. If the claim is futile, then the decision to deny
the motion would not be an abuse of the court’s discretion. See, e.g., Corsello v.
Lincare, Inc., 428 F.3d 1008, 1015 (11th Cir. 2005) (per curiam). Thus, we must
determine whether Rhodes’s claim against Weinbach for contract interference
states a claim upon which relief could be granted.
Under Alabama law, a claim for intentional interference with contractual
relations requires “(1) the existence of a contract or business relation; (2) the
defendant’s knowledge of the contract or business relation; (3) intentional
interference by the defendant with the contract or business relation; (4) the absence
of justification for the defendant’s interference; and (5) damage to the plaintiff as a
result of the interference.” Waddell & Reed, Inc. v. United Investors Life Ins. Co.,
875 So. 2d 1143, 1153 (Ala. 2003). However, in the context of a corporate
employee interfering with a contract of the corporation, the plaintiff must also
show that the employee acted outside the scope of his employment and that the
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employee acted with actual malice. Hickman v. Winston County Hosp. Bd., 508
So. 2d 237, 239 (Ala. 1987). “In order to show malice, the plaintiff must make a
strong showing of a pattern of interference.” Hanson v. New Tech., Inc., 594 So.
2d 96, 102 (Ala. 1992) (citation omitted).
Rhodes sought to amend his complaint, alleging that Weinbach interfered
with his contract with Unisys, causing breach. This allegation of a single act of
interference is insufficient to satisfy Alabama’s requirement that there be a pattern
of interference. Thus, the district court was correct that Rhodes’s amendment
would be futile, and, therefore, the district court did not abuse its discretion when it
denied Rhodes’s motion to amend his complaint.2
III. CONCLUSION
The district court ruled against Rhodes on his fraud claim, declined to
exercise personal jurisdiction over Weinbach, and decided not to allow Rhodes to
amend his complaint to add a claim against Weinbach. We agree that summary
judgment was appropriate because Rhodes failed to introduce evidence of an intent
to defraud, that the court did not abuse its discretion by denying Rhodes’s motion
2
Weinbach argues that he is not subject to the jurisdiction of the district court. Because
we agree with his alternative argument that Rhodes has failed to state a claim under Alabama
law for contract interference, we need not address Weinbach’s argument concerning personal
jurisdiction, which was not addressed by the district court in the first instance.
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to amend, and that the court could not exercise jurisdiction over Weinbach because
he did not have sufficient contacts with Alabama. AFFIRMED.
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