Court Opinion

ID: 1029350
Source: CourtListenerOpinion
Date Created: 2013-07-05 07:55:53.396598+00
Date Added: 2024-06-11T15:34:59.753880
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 08-1385

ALLY BAKER,

                Plaintiff - Appellant,

           v.

ADIDAS AMERICA, INCORPORATED,

                Defendant - Appellee.

Appeal from the United States District Court for the Eastern
District of North Carolina, at New Bern.  Louise W. Flanagan,
Chief District Judge. (5:07-cv-00168-FL)

Argued:   May 14, 2009                     Decided:   June 30, 2009

Before NIEMEYER, MOTZ, and TRAXLER, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Allison S. H. Ficken, DOVIN        MALKIN & FICKEN, LLC,
Atlanta, Georgia, for Appellant.           Robert Meynardie, THE
MEYNARDIE LAW FIRM, PLLC, Raleigh, North    Carolina, for Appellee.
ON BRIEF: Edward J. Dovin, DOVIN MALKIN    & FICKEN, LLC, Atlanta,
Georgia, for Appellant.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

        Ally    Baker     appeals        an     order         of     the    district         court

dismissing her action on the basis of improper venue.                                     See Fed.

R. Civ. P. 12(b)(3).         Finding no error, we affirm.

                                               I.

     Baker,       a     resident    of    Raleigh,            North       Carolina,        was    an

outstanding       junior     tennis      player          who       achieved      national        and

international success as an amateur.                           While she was a junior,

Adidas     provided       free     merchandise            for       her     to      use     during

tournaments.

     In        August     2002,    at         the       age    of     16,        Baker      turned

professional, and in March 2003, Baker hired an agent to handle

endorsement       agreements.         Still         a    minor,      she    entered        into    a

“Representation Agreement” with SFX Sports Group, who was to

serve     as     Baker’s      exclusive             representative            for     marketing

negotiations.         The agreement guaranteed $150,000 to Baker to be

paid by SFX in installments over a two-year period.                                       It also

provided that whatever money she made through agreements SFX

secured would be retained by SFX and applied to the guarantee

until it was repaid.               Baker and her father both signed this

agreement.

     Subsequently, on or about April 10, 2003, Baker—still a

minor—signed an endorsement agreement with Adidas International

                                               2
Marketing BV (“Adidas International”), which is headquartered in

Amsterdam,        the     Netherlands,      and     which     is        the     corporate

grandparent of defendant Adidas America, Inc (“Adidas America”).

The agreement was retroactively effective as of January 1, 2003.

Pursuant   to      this    agreement      (the    “Adidas     Agreement”),            Baker

agreed to wear Adidas footwear and apparel for $20,000 in the

first year of the contract and for $25,000 per year for each of

the   final       two    years,     and    Adidas       agreed     to     pay     certain

performance bonuses.           Baker expressly appointed her agent SFX to

receive, on her behalf, payments from Adidas International that

came due under the Adidas Agreement.                      Baker agreed that any

payment from Adidas International to her agent completed Adidas

International’s         duty   to   pay   her,    and   Baker    agreed       that,     for

purposes     of    the     Adidas     Agreement,        any   revocation         of    her

appointment of SFX as her agent would be in writing.                             Finally,

the Adidas Agreement provided that any claim of Baker’s arising

out of, or relating to the agreement would be governed by the

law of the Netherlands and settled by Amsterdam courts. 1

      1
         The  agreement  provided, however,  that “[A]didas
International shall additionally be entitled, at its sole
option, to bring proceedings against [Baker] in the courts
competent for” Baker. J.A. 40.

                                           3
       In 2003, the first year of the Adidas Agreement, Adidas

International        wired   two     $10,000     payments    to   SFX    for    Baker.

Adidas also shipped shoes and clothes to Baker, which she wore

while playing tennis.

       In January 2004, Baker began experiencing problems with her

left foot and withdrew from her tournament schedule.                      In April,

Adidas International sent a representative from Portland, Oregon

to North Carolina to examine Baker’s foot and the shoes she was

using.       During this timeframe, Adidas International also made

payment to SFX for Baker’s travel expenses for a training camp.

On April 10, 2004, Baker turned 18.

       On    April    19,    2004,    Adidas      International        sent    another

payment to SFX for Baker in the amount of $12,500.                      In May 2004,

the company flew Baker to Portland to try a redesigned shoe and

gave   her    additional      merchandise        while    she    was   there.     The

redesigned shoes did not help Baker.                     In October 2004, Adidas

International wired $12,500 to SFX for Baker, thus completing

its contractual obligation to pay Baker a $25,000 endorsement

fee for the 2004 contract year.

       In    November       2004,    with       Baker    still    injured,      Adidas

International suspended further payments to her under Section 10

of the Adidas Agreement, which permitted suspension of payments

“[w]ithout prejudice to the right to terminate th[e] Agreement”

if Baker became unable to compete at world-class level for six

                                            4
months or more.          J.A. 39.                After undergoing surgeries and

therapy, Baker was unable to recover and retired in 2005.

      On August 4, 2005, Baker and SFX entered into an agreement

and     release     terminating        the       Representation        Agreement   and

“settl[ing] all issues between them.”                      J.A. 149.     Simultaneous

with the termination of SFX’s representation of Baker, Baker

received a $24,716.50 payment from SFX, which she deposited in a

bank account that she held jointly with her father.

      In a letter dated December 20, 2006, from Baker’s attorney

to Adidas International, counsel stated, “Now that Ms. Baker has

reached the age of majority, you are hereby notified that she

has elected to declare the Agreement void.                         Accordingly, the

jurisdictional provisions and limitations of liability set forth

in the Agreement are unenforceable.”                 J.A. 146.

      In 2007, Baker brought this action against Adidas America

in North Carolina state court, alleging that the shoes selected

for her caused her injuries and ended her career.                       The complaint

asserts a negligence claim and claims alleging breaches of the

implied warranty of fitness for a particular purpose and the

implied warranty of merchantability.

      Adidas      America    removed    the       action    to   federal   court   and

moved    to    dismiss      under   Rule         12(b)(3)    for   improper    venue,

pointing to the forum-selection clause contained in the Adidas

Agreement.        In her deposition, Baker stated that she did not

                                             5
remember signing the Adidas Agreement although she acknowledged

that her signature is on it.                   She also stated that she was not

aware      of     the    payments      that        were        made    to     her    under         that

agreement.         In his deposition, Baker’s father, who did not sign

the   agreement,         contended      he     did       not    even    know     the       agreement

existed until about the time this suit was initiated.

      The       district      court     granted          Adidas        America’s          motion    to

dismiss.         The court reasoned that since Baker entered into the

Adidas Agreement—which contained the forum-selection clause—when

she was a minor, it was voidable at her election under North

Carolina law within a reasonable time after she reached the age

of 18. 2        The court noted that Baker clearly authorized SFX under

the       Adidas        Agreement       to         accept        payments           from      Adidas

International           and   that    SFX     in       fact    received       $25,000       in     such

payments        after     Baker      turned    18.             The    court     concluded          that

regardless         of    whether       Baker       had        actual     knowledge          of     the

payments, knowledge of them was imputed to her because SFX was

her agent.         The court also noted that, after Baker turned 18,

she allowed Adidas International to attempt to redesign shoes

for her and to fly her the next month to Portland, Oregon, for

the same purpose.             The court concluded that Baker’s “failure to

      2
        The parties agree                   that        North        Carolina       law     controls
regarding this issue.

                                                   6
undertake       the    steps       necessary          to    disaffirm        the    [Adidas]

Agreement within a reasonable time, combined with defendant’s

continued performance of the contract through payments to SFX,

requires this court to reject plaintiff’s arguments that the

contract    is     avoidable       due    to    age    or     proper    disaffirmation.”

J.A. 163.

    Because the forum-selection clause was prima facie valid,

the district court concluded that the burden was on Baker to

demonstrate that it should not be enforced under federal law.

The court concluded that the mere fact that Amsterdam was a

foreign forum did not automatically allow Baker to avoid the

clause.      The      court    also      determined         that     application        of    the

clause     would      not     contravene        North       Carolina     public         policy,

specifically       N.C.      Gen.       Stat.       § 22B-3    (2009),       because         that

statute     applies         only    to    contracts         entered      into      in     North

Carolina, and Baker had not demonstrated that the agreement was

finalized in North Carolina.

     Baker now appeals the grant of Adidas America’s motion to

dismiss.

                                               II.

     The    validity         of     a    forum-selection           clause     is    properly

analyzed under Federal Rule of Civil Procedure 12(b)(3), and we

review    the    district      court’s      disposition         of    such    a    motion      de

                                                7
novo.    See Sucampo Pharms., Inc. v. Astellas Pharma, Inc., 471

F.3d 544, 550 (4th Cir. 2006).

                                        A.

      Baker   first   argues     that    she   did   not    ratify    the    Adidas

Agreement     after   she    turned     18   and   that    the    district    court

therefore erred in concluding that she was bound by it under

North Carolina law.         We disagree.

      Under North Carolina law, “agreements or contracts, except

for   those   dealing   with     necessities       and    those    authorized   by

statute, are voidable at the election of the infant and may be

disaffirmed by the infant during minority or within a reasonable

time of reaching majority.”             Creech v. Melnik, 556 S.E.2d 587,

591 (N.C. Ct. App. 2001) (internal quotation marks omitted).

What constitutes a reasonable time in this context “depends upon

the circumstances of each case, no hard-and-fast rule regarding

precise time limits being capable of definition.”                     Nationwide

Mut. Ins. Co. v. Chantos, 214 S.E.2d 438, 444 (N.C. Ct. App.

1975).    “The privilege of disaffirmance may be lost where the

infant affirms or otherwise ratifies the contract after reaching

majority.”     Bobby Floars Toyota, Inc. v. Smith, 269 S.E.2d 320,

322 (N.C. Ct. App. 1980).

      Here, after turning 18, Baker accepted two payments from

Adidas International totaling $25,000.               The second payment was

                                         8
received more than six months after her eighteenth birthday. 3

She also accepted Adidas International’s attempt to redesign her

shoes, as well as other merchandise at no charge to her one

month    after     her   birthday.      After   receiving   all   of   these

benefits, it was not until two years later—more than 32 months

after she achieved the age of majority—that Baker communicated

to Adidas International that she wished to void her contract.

Under    the     facts   of   this   case,   this   delay   constituted   an

unreasonable length of time to elect disaffirmance. 4             Cf. Bobby

Floars Toyota, 269 S.E.2d at 322-23 (holding that minor waited

an unreasonable length of time to void purchase money security

agreement to finance automobile when he continued to drive the

vehicle and make payments on it for 10 months after reaching

majority).       In any event, Baker’s acceptance of the two payments

     3
       Baker claims that it was her agent, SFX, that actually
received the payments, but under North Carolina law, a principal
is liable for the acts of her agent that are within the scope of
the agent’s authority.   See Harris v. Ray Johnson Constr. Co.,
534 S.E.2d 653, 655 (N.C. Ct. App. 2000).

     4
        Baker argues that she stopped performing under the
contract when she became injured in that she did not engage in
competitive tennis after that and that Adidas International
stopped performing when it suspended payments to her because of
her injury.   However, none of the conduct identified by Baker
even constitutes a breach of the agreement, let alone a
manifestation of an intention to void it.

                                       9
and other benefits after turning 18 “constituted a ratification

of the contract, precluding subsequent disaffirmance.”                           Id. at

323; see McCormic v. Leggett, 53 N.C. (8 Jones) 425, at *2

(1862) (holding that when minor sold real property, he ratified

the sale by accepting payment after reaching age of majority). 5

                                             B.

       In    The    Bremen    v.    Zapata   Off-Shore     Co.,   407    U.S.    1,   15

(1972), the Supreme Court held that forum-selection provisions

are presumptively valid and should be enforced absent a clear

showing that enforcement would be “unreasonable or unjust, or

that       the    clause   was     invalid    for   such   reasons      as   fraud    or

overreaching,” or that enforcement “would contravene a strong

public policy of the forum in which suit is brought.”                             Baker

maintains that the district court erred in ruling that she could

not avoid the forum-selection clause here on that basis.                              We

disagree.

       Baker       contends      that   the       forum-selection       clause     “was

obtained         through   overreaching”      in    that   “[A]didas     went    around

       5
       Baker argues alternatively that the forum-selection clause
cannot be enforced because the injury for which she seeks
compensation in this lawsuit occurred before she turned 18.
Even assuming that the time of her injury had some relevance,
the agreement was certainly not void at that time.     Her status
as an infant made the contract voidable, not void, during the
time that she was a minor, and she did not disavow the contract
during that time.

                                             10
Baker’s father and her attorney and dealt directly with her when

she was only 16.”            Brief of Appellant at 26.               In this regard,

Baker    argues       that   the   forum-selection          clause   contravenes       the

public policy “protecting minors from being taken advantage of

in unfair bargains at a time when the law recognizes they are

too young to adequately protect their own interests.”                             Id. at

30.      Baker’s       allegation      notwithstanding,        the     “Agreement      and

Release” entered into by SFX and Baker specifically recites that

the Adidas Agreement was “negotiated by SFX,” J.A. 150, which

was precisely the arrangement contemplated when Baker contracted

with SFX to negotiate such contracts on her behalf.                         The notion

that Adidas International was somehow taking advantage of an

uncounseled         sixteen-year-old        is     simply    without    basis     in   the

record.

        Baker additionally argues that the forum-selection clause’s

chosen       forum,    Amsterdam,      is    too    inconvenient       to   her   to   be

enforced.       We disagree.

        “[W]here it can be said with reasonable assurance that at

the time [of the making of] the contract, the parties to a

freely       negotiated      private     international        commercial     agreement

contemplated the claimed inconvenience,” such inconvenience will

not generally warrant setting aside the clause.                        The Bremen, 407

U.S.    at    16.      However,     if      the    party    challenging     the   clause

demonstrates “that trial in the contractual forum will be so

                                             11
gravely     difficult       and       inconvenient    that        he    will     for    all

practical purposes be deprived of his day in court,” the clause

may be avoided.         Id. at 18.

       Baker contends that Amsterdam “has no connection to the

parties or events at issue.”               Brief of Appellant at 27.              Without

citation to the record, Baker claims that “all of the witnesses

are in the United States, most in North Carolina.”                             Id. at 29.

Defendant responds, however, that “Baker’s claims are based upon

the use of a tennis shoe that was designed and thoroughly tested

in Europe, where a number of potential witnesses are located.”

Brief of Appellee at 29.                  Additionally, Adidas International,

the    party     with    whom     Baker    contracted,       is    headquartered         in

Amsterdam.       Thus, Baker has failed to show a lack of connection

between this case and the chosen forum.

       Baker     further    maintains,         though,    that     she    is     only    “a

college student at [the University of North Carolina] with no

source     of     income”       and     that     “Amsterdam       does     not     permit

contingency fee arrangements.”                 Brief of Appellant at 29.                She

therefore       argues     that   she     “cannot    afford       the    extraordinary

expense of traveling to Amsterdam and paying for attorneys there

to prosecute these claims.”                Id.     On this basis, she contends

that     the    forum-selection           clause    should        not    be     enforced.

However,       especially    because       Baker    has   not     demonstrated         that

these burdens were unforeseeable to her when she ratified the

                                            12
agreement, we do not believe Baker has shown that enforcement of

the forum-selection clause would be unjust.             Cf. Paper Express,

Ltd. v. Pfankuch Maschinen GmbH, 972 F.2d 753, 758 (7th Cir.

1992)    (holding   that   additional   expense   and    inconvenience   of

litigating in foreign forum did not justify avoidance of forum-

selection clause because plaintiff “was presumably compensated

for this burden by way of the consideration it received under

the contract”).      We therefore conclude that the district court

properly enforced the clause.

                                  III.

        In sum, finding no error in the district court’s decision,

we affirm.

                                                                  AFFIRMED

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