Court Opinion

ID: 1008962
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:48:15.6917+00
Date Added: 2024-06-11T09:13:19.636239
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

GAME WORLD, INCORPORATED,             
               Plaintiff-Appellant,
                 v.
                                                  No. 02-1172
OLHAUSEN BILLIARD MANUFACTURING,
INCORPORATED,
               Defendant-Appellee.
                                      
            Appeal from the United States District Court
     for the Eastern District of North Carolina, at Wilmington.
                James C. Fox, Senior District Judge.
                          (CA-01-151-7-F)

                      Argued: September 25, 2002

                      Decided: October 28, 2002

    Before WILKINS, WILLIAMS, and KING, Circuit Judges.

Reversed and remanded by unpublished per curiam opinion.

                             COUNSEL

ARGUED: John Richard Rittelmeyer, HARTZELL & WHITEMAN,
L.L.P., Raleigh, North Carolina, for Appellant. Catharine Biggs Arro-
wood, PARKER, POE, ADAMS & BERNSTEIN, L.L.P., Raleigh,
North Carolina, for Appellee. ON BRIEF: Brian D. Darer, PARKER,
POE, ADAMS & BERNSTEIN, L.L.P., Raleigh, North Carolina;
Charles A. Bird, Edward Patrick Swan, Jr., LUCE, FORWARD,
HAMILTON & SCRIPPS, L.L.P., San Diego, California, for Appel-
lee.
2           GAME WORLD v. OLHAUSEN BILLIARD MANUFACTURING
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                                 OPINION

PER CURIAM:

   Game World, Incorporated (Game World) appeals a district court
order dismissing its action against Olhausen Billiard Manufacturing,
Incorporated (Olhausen), arguing that the district court erred in ruling
that the action was barred by the statute of frauds. See N.C. Gen. Stat.
§ 75-4 (2001). We reverse and remand for further proceedings.

                                     I.1

   Game World is a North Carolina retailer of billiard tables and other
gaming equipment. Olhausen is a California billiard table manufac-
turer. In 1985, the parties entered into an agreement designating
Game World as the exclusive distributor of Olhausen products in the
Carolinas. The agreement was memorialized in a letter ("the 1985 let-
ter") from an Olhausen executive to Game World’s president. The let-
ter provided in part:

        As per our conversation this A.M., we at Olhausen . . . are
        giving you [the] states of North Carolina and South Carolina
        completely, for one year from this date, for exclusive repre-
        sentation of our pool tables. . . .

        If, after the one year, you have demonstrated a reasonable
        effort in selling our product, this agreement will, by all
        means continue.

        By reasonable effort, we feel that this agreement should be
    1
   The following facts are derived from Game World’s complaint and
the documents in the record whose authenticity is not challenged. See
Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) (explaining that court
may consider such documents in deciding a motion to dismiss).
         GAME WORLD v. OLHAUSEN BILLIARD MANUFACTURING                3
    a two way street. We will not sell [to] any of your competi-
    tors in your states, and you will not carry and actively push
    competitive models of pool tables. . . .

    This agreement is in no way binding on you, but is meant
    to commit us.

J.A. 95. Thereafter, Game World made reasonable efforts to sell
Olhausen’s products, and thus, Game World’s right to the exclusive
distributorship continued through the time of the actions that are the
basis of this suit.

  In 1994, Olhausen sued Game World for amounts owed on an open
account. The parties resolved the suit by way of a settlement agree-
ment ("the Settlement Agreement"), which referred to their previous
agreement:

       1.4 Both GAME WORLD, INC. and [Olhausen]
    acknowledge that their manner of doing business in the past
    has been for [Olhausen] to treat GAME WORLD, INC. as
    its exclusive dealership in the state of North Carolina, and
    that so long as GAME WORLD, INC. meets its obligations
    under Paragraphs 1.2 and 1.3 above and abides by all terms
    of this AGREEMENT, that manner of doing business shall
    continue.

Id. at 62-63. The parties eventually renegotiated their settlement terms
in a letter agreement designed to "resume normal business relations"
between the two companies. Id. at 106. The agreement required that
Olhausen "cancel" the Settlement Agreement. Id.

   In early 2000, while preparing to open a new store in North Caro-
lina, Game World contacted Olhausen to ensure that the new store
would be supplied with Olhausen products. When Olhausen repre-
sented that it would supply its products, Game World made consider-
able expenditures in reliance on this promise. Olhausen reneged on
this promise, and it sought other North Carolina retailers to sell its
products.
4           GAME WORLD v. OLHAUSEN BILLIARD MANUFACTURING
   Game World then sued Olhausen in North Carolina Superior Court.
After the action was removed to the Eastern District of North Caro-
lina, Game World filed an amended complaint alleging breach of the
exclusive distributorship agreement and unfair trade practices, see
N.C. Gen. Stat. § 75-1.1 (2001). Olhausen moved to dismiss Game
World’s complaint, relying on N.C. Gen. Stat. § 75-4, which states in
relevant part:

           No contract or agreement hereafter made, limiting the
        rights of any person to do business anywhere in the State of
        North Carolina shall be enforceable unless such agreement
        is in writing duly signed by the party who agrees not to enter
        into any such business within such territory.2

The district court agreed with this argument and granted the motion
to dismiss.

                                     II.

   Game World contends that the district court erred in ruling that
§ 75-4 bars its claims. We agree.

   We review de novo the decision of the district court to grant a
motion to dismiss for failure to state a claim upon which relief may
be granted. See Mayes v. Rapoport, 198 F.3d 457, 460 (4th Cir.
1999). This court accepts as true the facts alleged in the complaint,
views them in the light most favorable to the plaintiff, and recognizes
that dismissal is inappropriate "unless it appears to a certainty that the
plaintiff would be entitled to no relief under any state of facts which
could be proved in support of his claim." Mylan Labs., Inc. v. Mat-
kari, 7 F.3d 1130, 1134 & n.4 (4th Cir. 1993) (internal quotation
marks omitted). Although matters outside the complaint are generally
not considered, a narrow exception to this rule allows consideration
    2
   Olhausen also argued that to the extent Game World sought to sue for
breach of the Settlement Agreement, its suit should be dismissed for lack
of jurisdiction, based on a forum selection clause in that agreement.
However, Game World responded that its claims were not based upon a
breach of the Settlement Agreement.
         GAME WORLD v. OLHAUSEN BILLIARD MANUFACTURING               5
of "documents the authenticity of which [is] not disputed by the par-
ties." Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993).

   Olhausen first contends that the 1985 letter did not satisfy § 75-4
because the letter did not state that Game World provided any consid-
eration to Olhausen. This argument is at odds with North Carolina
law. A document signed by one party and describing that party’s obli-
gation suffices under § 75-4 to support an action against that party.
See Lewis v. Murray, 97 S.E. 750, 751 (N.C. 1919); Miller v. Irvine,
18 N.C. (1 Dev. & Bat.) 103, 1834 WL 455, at *1 (1834). It is not
necessary that the writing contain the signature or the obligations of
the party seeking to enforce the agreement. See Miller, 1834 WL 455,
at *1; Purchase Nursery, Inc. v. Edgerton, 2002 WL 31055792, at *4
(N.C. Ct. App. Sept. 17, 2002). Nor must the writing recite the con-
sideration given by that party. See Brooks Distrib. Co. v. Pugh, 378
S.E.2d 31, 31 (N.C. 1989) (per curiam) (adopting dissent in Brooks
Distrib. Co. v. Pugh, 373 S.E.2d 300, 306 (N.C. Ct. App. 1988)
(Cozort, J., dissenting in part)); Green v. Thornton, 49 N.C. (4 Jones)
230, 1856 WL 1696, at *2 (1856).

   Olhausen next argues that § 75-4 was not satisfied because the
1985 letter did not state the terms under which Game World would
purchase Olhausen’s products. This argument also fails. Section 75-4
only requires written documentation of the promise to limit rights to
do business in North Carolina. The statute does not pertain to other
aspects of the parties’ business relationship. Cf. Manpower of Guil-
ford County, Inc. v. Hedgecock, 257 S.E.2d 109, 113-14 (N.C. Ct.
App. 1979) (holding that only covenant to limit right to conduct busi-
ness need be in writing to satisfy § 75-4, even when that covenant was
part of a broader agreement).

   Finally, we reject Olhausen’s contention that because the 1985 let-
ter bound Olhausen for only one year, it did not satisfy § 75-4.
Olhausen’s written obligation was not limited to one year. Rather, the
1985 letter explicitly granted Game World an exclusive distributor-
ship of indefinite duration, so long as Game World "demonstrated a
reasonable effort" in marketing Olhausen’s products. Thus, the letter
satisfies the statute.
6        GAME WORLD v. OLHAUSEN BILLIARD MANUFACTURING
                                  III.

   In sum, because we hold that the district court erred in ruling that
§ 75-4 barred Game World’s suit, we reverse the order dismissing the
action and remand for further proceedings.3

                                         REVERSED AND REMANDED
    3
   We do not address Olhausen’s contention, raised for the first time at
oral argument, that the Settlement Agreement terminated any agreement
memorialized in the 1985 letter. Also, because we hold that the district
court erred in ruling that the statute of frauds barred Game World’s
action, we do not reach Game World’s other arguments.