Court Opinion

ID: 4204165
Source: CourtListenerOpinion
Date Created: 2017-09-18 15:00:37.166994+00
Date Added: 2024-06-11T07:47:36.993420
License: Public Domain

16-465
     Pagaduan v. Carnival Corp. et al

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 18th day of September, two thousand seventeen.
 5
 6       PRESENT: DENNIS JACOBS,
 7                JOSÉ A. CABRANES,
 8                RICHARD C. WESLEY,
 9                                Circuit Judges.
10
11       - - - - - - - - - - - - - - - - - - - -X
12       Rodrigo R. Pagaduan,
13                Plaintiff-Appellant,
14
15                    -v.-                                               No. 16-465
16
17       Carnival Corporation, dba Carnival
18       Cruise Lines, Carnival PLC, Melvin
19       Babi, Doctor Doe (Ship’s Doctor),
20       Nurse Doe (Ship’s Nurse),
21                Defendants-Appellees.
22       - - - - - - - - - - - - - - - - - - - -X
23
24       FOR APPELLANT:                        Felix Q. Vinluan, Law Office of
25                                             Felix Q. Vinluan, New York, New
26                                             York.
27

                                                  1
 1   FOR APPELLEES:               Edgar R. Nield (Jeffrey B.
 2                                Maltzman, Gabrielle De Santis
 3                                Nield, on the brief), Maltzman &
 4                                Partners, PA, Encinitas,
 5                                California.
 6
 7        Appeal from a judgment of the United States District
 8   Court for the Eastern District of New York (Gleeson, J.).
 9
10        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
11   AND DECREED that the judgment of the district court be
12   AFFIRMED.
13
14       Rodrigo Pagaduan appeals from the judgment of the

15   United States District Court for the Eastern District of New

16   York (Gleeson, J.), granting defendants-appellees’ motion to

17   compel arbitration.    We review de novo a district court’s

18   order to compel arbitration.    Genesco, Inc. v. T. Kakiuchi &

19   Co., 815 F.2d 840, 846 (2d Cir. 1987).    On appeal from an

20   order compelling arbitration, this Court “applies a standard

21   similar to that applicable for a motion for summary

22   judgment.”    Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d

23   Cir. 2003).   We assume the parties’ familiarity with the

24   underlying facts, the procedural history, and the issues

25   presented for review.

26       Rodrigo Pagaduan (“Pagaduan”) is a Filipino national

27   who served as a motorman on the Queen Mary 2, a liner owned

28   by defendants-appellees (“Carnival”).    Pagaduan sued

29   Carnival in the Eastern District of New York for negligence

30   and related claims in connection with injuries sustained in

                                    2
 1   the course of his employment.       Carnival moved to compel

 2   Pagaduan’s claims to arbitration in the Phillippines on the

 3   basis of Pagaduan’s Contract of Employment.

 4       The terms of his employment are largely dictated by a

 5   body of the Philippines government, the Philippine Overseas

 6   Employment Administration (“POEA”).       The second paragraph of

 7   the Contract states that the “herein terms and conditions in

 8   accordance with POEA Governing Board Resolution No. 09 and

 9   Memorandum Circular No. 10 ... shall be strictly and

10   faithfully observed.”   J. App’x at 94.      The Memorandum

11   Circular No. 10 implements Standard Terms and Conditions

12   that serve as “the minimum requirements acceptable to the

13   POEA for the employment of Filipino seafarers on board

14   ocean-going ships.”   Id. at 204.     Section 29 of those

15   Standard Terms and Conditions reads as follows:

16            In cases of claims and disputes arising from this
17            employment, the parties covered by a collective
18            bargaining agreement shall submit the claim or
19            dispute to the original and exclusive jurisdiction
20            of the voluntary arbitrator or panel of voluntary
21            arbitrators. If the parties are not covered by a
22            collective bargaining agreement, the parties may
23            at their option submit the claim or dispute to
24            either the original and exclusive jurisdiction of
25            the National Labor Relations Commission...or to
26            the original and exclusive jurisdiction of the
27            voluntary arbitrator or panel of arbitrators.
28
29   Id. at 221.   Judge Gleeson granted the motion.

                                     3
 1       On appeal, Pagaduan argues that material factual issues

 2   remain in dispute on the threshold question of arbitrability

 3   under the Convention on the Recognition and Enforcement of

 4   Foreign Arbitral Awards (“Convention”), 9 U.S.C. §§ 201-208,

 5   and that the district court erred in denying him a trial.

 6   See Scherk v. Alberto-Culver Co., 417 U.S. 506, 519-20

 7   (1974); see also Howsam v. Dean Witter Reynolds, Inc., 537

 8   U.S. 79, 83 (2002) (existence of an agreement to arbitrate

 9   is a question for judicial determination).      The Convention,

10   which the parties agree applies here, prescribes four

11   requirements for the enforcement of arbitration agreements:

12   (1) there must be a written agreement; (2) that provides for

13   arbitration in the territory of a signatory of the

14   convention; (3) the subject matter must be commercial; and

15   (4) it cannot be entirely domestic in scope.       Smith/Enron

16   Cogeneration Ltd. P’ship, Inc. v. Smith Cogeneration Int’l.,

17   Inc., 198 F.3d 88, 92 (2d Cir. 1999).      The only requirement

18   disputed on appeal is the existence of the written

19   agreement.

20       Pagaduan admits to having entered into a contract of

21   employment with the entities Career Philippines

22   Shipmanagement Ltd. and Columbia Shipmanagement, Inc. to

23   work aboard the Queen Mary 2.       He contends, however, that

24   the signed Contract of Employment contains no arbitration

                                     4
 1   provision, that it does not incorporate the POEA Standard

 2   Terms and Conditions and that, in any event, Carnival as a

 3   non-party cannot enforce it.

 4       Arbitration agreements are creatures of contract.

 5   Questions concerning the language or construction of an

 6   arbitration agreement “‘must be addressed with a healthy

 7   regard for the federal policy favoring arbitration.’”

 8   Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,

 9   473 U.S. 614, 626 (1985) (quoting Moses H. Cone Memorial

10   Hospital, 460 U.S. 1, 24-25 (1983)).

11       A contract may incorporate another document by

12   reference by describing it in such clear and unambiguous

13   terms that its identity can be ascertained beyond reasonable

14   doubt.   See Progressive Cas. Ins. Co. v. C.A. Reaseguradora

15   Nacional de Venezuela, 991 F.2d 42, 47 (2d Cir. 1993);

16   Glencore Ltd. v. Degussa Engineered Carbons L.P., 848 F.

17   Supp. 2d 410, 428 n. 14 (S.D.N.Y. 2012); Republic of Ecuador

18   v. Chevron Corp., 638 F.3d 384, 395 (2d Cir. 2011).

19   Maritime contracts frequently incorporate by reference other

20   documents and industry terms and conditions.   See, e.g., Son

21   Shipping Co. v. De Fosse & Tanghe, 199 F.2d 687, 688 (2d

22   Cir. 1952).   Incorporation by reference is a matter of law

23   that can be resolved on summary judgment and does not

24   require a trial to discard a contrary interpretation urged

                                    5
 1   by one party.   Progressive Cas. Ins. Co., 991 F.2d at 47 &

 2   n.8 (“We also disagree with the district court’s ruling that

 3   a trial is necessary to determine whether the Policy

 4   identified the FRA with sufficient specificity to

 5   incorporate it by reference into the Policy.    The Policy

 6   specifically and directly identifies the FRA by name.”);

 7   Roling v. E*Trade Sec. LLC, 860 F. Supp. 2d 1035, 1041 (N.D.

 8   Cal. 2012) (under New York law, provision “properly

 9   incorporated by reference” “as a matter of law”).

10       Pagaduan’s single-page Contract of Employment does not

11   contain an arbitration provision on its face.   It does,

12   however, reference secondary documents that govern seafaring

13   employment contracts and that do call for arbitration, e.g.,

14   the Memorandum Circular No. 10.   The Contract clearly and

15   unambiguously describes the documents whose terms would

16   apply to Pagaduan’s employment.   See, e.g., JGA Constr.

17   Corp. v. Burns Elec. Co., 145 A.D.2d 945, 946 (4th Dep’t

18   1988); Bautista v. Star Cruises, 396 F.3d 1289, 1293 (11th

19   Cir. 2005).   The Contract of Employment incorporates the

20   Standard Terms and Conditions and its arbitration provision

21   by reference as a matter of law, foreclosing any material

22   factual dispute.

23       Pagaduan quibbles with the language of the second

24   paragraph of the Contract of Employment, arguing that it

                                   6
 1   simply states that the terms “herein” are in accordance with

 2   the POEA documents.   The Eleventh Circuit, however, analyzed

 3   nearly identical language in a similar case and found the

 4   second paragraph incorporated by reference the POEA Standard

 5   Terms and Conditions.   Bautista, 396 F.3d at 1293.     We agree

 6   with the Eleventh Circuit’s analysis, particularly in the

 7   context of the purpose of the POEA to supervise, regulate,

 8   and monitor overseas employment.   See id.; Navarette v.

 9   Silversea Cruises Ltd., 620 F. App’x 793, 794-95 (11th Cir.

10   Aug. 5, 2015) (per curiam).

11       Pagaduan contends that this Court would be compelled to

12   make significant leaps in rational deduction to “connect the

13   dots” between the Contract of Employment and Section 29 of

14   the POEA Standard Terms and Conditions.   But the connection

15   is achieved by ordinary contract law principles.      See

16   Massena Towne Ctr. Assoc. v. Sear-Brown Grp., Inc., 255

17   A.D.2d 893, 895 (4th Dep’t 1998) (incorporating by reference

18   multiple layers of documents).

19       Pagaduan protests that he was unaware of the

20   arbitration clause; that he was never told about it; and

21   that he never consented to incorporation by reference of any

22   additional terms.   None of this rebuts the powerful

23   presumption in favor of enforcing freely negotiated

24   contracts, especially in the arbitration context.

                                   7
 1   Progressive Cas. Ins. Co., 991 F.2d at 46 (“Under New York

 2   law, in the absence of fraud or other wrongful conduct, a

 3   party who signs a written contract, is conclusively presumed

 4   to know its contents and to assent to them, and he is

 5   therefore bound by its terms and conditions.”); Metzger v.

 6   Aetna Ins. Co., 227 N.Y. 411, 416 (1920)(“Ignorance through

 7   negligence or inexcusable trustfulness will not relieve a

 8   party from his contract obligations.     He who signs or

 9   accepts a written contract in the absence of fraud or other

10   wrongful act on the part of another contracting party is

11   conclusively presumed to know its contents and to assent to

12   them.”).     The same rules apply to terms incorporated by

13   reference.    See, e.g., Level Export Corp. v. Wolz, Aiken &

14   Co., 305 N.Y. 82, 86 (1953); 4Connections LLC v. Optical

15   Commc’ns Grp., Inc., 618 F. Supp. 2d 178, 183-84 (E.D.N.Y.

16   2009).

17       The parties debate a number of secondary issues,

18   including whether Pagaduan separately signed the Amended

19   Standard Terms and Conditions, the authenticity of that

20   signature, and the timeliness of the document.     However,

21   Carnival does not need to prove that Pagaduan signed both

22   the Contract of Employment and the documents incorporated by

23   reference into that contract at the same time.     Pagaduan

24   signed a Contract of Employment that specifically referenced

                                     8
 1   a set of industry-wide standard terms and conditions, the

 2   minimum requirements for all seafaring employees.    No fraud

 3   or overreaching is alleged.   Section 29 of those terms

 4   mandates that Pagaduan pursue his claims via arbitration.1

 5   The District Court properly held that Pagaduan is bound by

 6   the terms of this contract, including the arbitration

 7   clause.

 8       Since the word “Carnival” does not appear on his

 9   Contract of Employment, Pagaduan argues that Carnival cannot

10   enforce the arbitration clause in the POEA Standard Terms

11   and Conditions.    This argument fails on numerous theories

12   discussed below.

13       Pagaduan’s complaint states that Carnival was his

14   employer.   See J. App’x at 30 (pleading he was “employed by

15   the Defendants Carnival”).    This alone permits Carnival to

16   move to compel by estoppel under the contract.    It would

17   perpetrate an inequitable result to permit Padaguan to sue

18   Carnival on claims arising out of its Contract of

19   Employment, but resist arbitration with Carnival on terms

         1
          If Pagaduan is not party to a collective bargaining
     agreement, he has the option of selecting the National Labor
     Relations Commission dispute resolution process in lieu of
     arbitration. The Court notes that whether Pagaduan is party
     to a collective bargaining agreement or not has no bearing
     on the outcome of this appeal since he is compelled to
     arbitration regardless.
                                    9
 1   found in the same document.    See, e.g., Barton Enterprises,

 2   Inc. v. Cardinal Health, Inc., No. 4:10 CV 324 DDN, 2010 WL

 3   2132744, *4 (E.D. Mo. May 27, 2010) (“Because its claims

 4   against Cardinal Health depend on the interpretation of fee

 5   terms found in the license agreement, it would be unfair to

 6   allow Barton Enterprises to rely on these terms for its

 7   complaint, yet disavow the arbitration terms found in the

 8   very same license agreement.”).

 9       On appeal, Pagaduan seeks to distance himself from the

10   Carnival entities, stating they are not his employer and are

11   not parties to the contract.    However, agency principles

12   dictate that Carnival is a party capable of enforcing an

13   arbitration agreement made by its agents.    Comer v. Micor,

14   Inc., 436 F.3d 1098, 1101 (9th Cir. 2006); Arnold v. Arnold

15   Corp.-Printed Commc’ns for Business, 920 F.2d 1269, 1282

16   (6th Cir. 1990).   Carnival submitted two declarations that

17   establish through business records that Columbia

18   Shipmanagement Ltd. and Career Shipmanagement, Inc. act as

19   manning agents on behalf of Carnival.    See Major League

20   Baseball Prop., Inc. v. Salvino, Inc., 542 F.3d 290, 312-13

21   (2d Cir. 2008) (accepting sworn declarations at the summary

22   judgment stage to establish admissibility as business

23   records).   Moreover, Pagaduan’s Contract of Employment does

24   specify his charge as the Queen Mary 2, which suggests a

                                    10
 1   contractual relationship with the vessel and its owner,

 2   Carnival.   See Putnam v. Lower, 236 F.2d 561, 563 (9th Cir.

 3   1956); Piedmont & Georges Creek Coal Co. v. Seaboard

 4   Fisheries Co., 254 U.S. 1, 9 (1920).   Carnival is therefore

 5   a party capable of exercising rights under Pagaduan’s

 6   Contract of Employment to work aboard its vessel.

 7       For the foregoing reasons, and finding no merit in

 8   Pagaduan’s other arguments, we hereby AFFIRM the judgment of

 9   the District Court.

10
11                               FOR THE COURT:
12                               CATHERINE O’HAGAN WOLFE, CLERK
13

                                   11