may not be cited except as provided by
Minn. Stat § 480A.08, subd. 3 (1996)
STATE OF MINNESOTA
IN COURT OF APPEALS
ARCA of St. Louis, Inc.,
Earl M. Fritz,
Appliance Recycling Centers of America, Inc.,
Filed October 6, 1998
Hennepin County District Court
File No. CT9834
Todd C. Pearson, Law Office of Todd C. Pearson, 700 Lumber Exchange Building, 10 South Fifth Street, Minneapolis, MN 55402 (for respondent Fritz)
Paul M. Floyd, Rau & Floyd, 527 Marquette Avenue, Suite 525, Minneapolis, MN 55402 (for respondent Appliance Recycling Centers of America)
Considered and decided by Lansing, Presiding Judge, Klaphake, Judge, and Thoreen, Judge.*
In an employer's declaratory judgment action to determine rights and liabilities under an employment agreement, the former employee challenged venue. The district court determined that the employment agreement and a reorganization agreement incorporating it constituted a single unambiguous contract, applied the forum selection clause in the reorganization agreement, and dismissed the action. We affirm.
Appliance Recycling Centers of America, Inc. (ARCA), bought out Earl Fritz's interest in Major Appliance Pickup Service of St. Louis (MAPS), a Missouri corporation, and entered into an employment agreement with Fritz to continue managing the St. Louis operation. ARCA formed a subsidiary called "ARCA of St. Louis," which acquired Fritz's interest in MAPS and began operating in St. Louis in August.
The terms of the purchase and Fritz's continued employment were set forth in an "Agreement and Plan of Reorganization" (reorganization agreement) and an "Employment Agreement." The reorganization agreement, executed by ARCA, ARCA of St. Louis, MAPS, and Earl and Sharon Fritz on August 21, 1995, contained three relevant provisions--a Missouri forum selection clause, a Missouri choice-of-law clause, and the following reference to an employment agreeement:
2. EMPLOYMENT AGREEMENT. Earl M. Fritz agrees that he shall enter into an agreement for employment in the form of Exhibit "C" attached hereto and incorporated herein by reference (the "Employment Agreement").
Fritz and ARCA of St. Louis executed the employment agreement, dated August 18, 1995, before they executed the reorganization agreement. Under the terms of the employment agreement, Fritz became general manager of the St. Louis operation. ARCA guaranteed the agreement, which ran through December 31, 2000, and was to be automatically renewed for 12-month periods. The agreement included a Missouri choice-of-law clause but was silent as to forum selection.
Fritz was terminated October 8, 1997. On October 23, 1997, Fritz sent a letter to ARCA alleging that ARCA and/or ARCA of St. Louis breached the terms of the employment agreement and tortiously interfered with his contractual rights. When ARCA of St. Louis filed this declaratory judgment action against Fritz and ARCA, Fritz moved to dismiss the action based on the Missouri forum selection clause in the reorganization agreement, forum nonconveniens, and lack of personal jurisdiction.
The district court determined that it had jurisdiction and was a convenient forum, but found that the reorganization agreement incorporated the employment agreement by reference and the Missouri forum selection clause required dismissal of the action. ARCA of St. Louis now appeals.
ARCA of St. Louis challenges the district court's determination that the employment agreement and reorganization agreement were not ambiguous. We note that the parties could not produce a reorganization agreement containing Earl Fritz's signature or an employment agreement labeled as Exhibit "C" as referenced in the reorganization agreement. At oral argument both parties agreed that they were proceeding on the assumption that Fritz had signed the reorganization agreement and that the employment agreement dated August 18 was the only employment agreement between the parties. Therefore, the dispositive issue on appeal is whether the district court made an improper factual determination that the parties intended the agreements to form a single contract. We conclude that it did not.
The plain language of each agreement indicates that the parties intended to execute them in conjunction with each other. The following passage from the "Remedies" provision of the employment agreement, which is cited in the district court's memorandum, explicitly outlines the relationship between the agreements:
Reasonableness of Restrictions and Remedies. Employee acknowledges the reasonableness of the terms, conditions, geographical area, scope and periods set forth in paragraphs 8 and 9 above. The reasonableness of these provisions as well as the remedies agreed to in this Section 11 is acknowledged and is in consideration for this Agreement, as well as in conjunction with that Agreement and Plan of Reorganization of even date herewith by which Employee has exchanged all the Stock of Major Appliance Pickup Service of St. Louis, Inc. [with] shares of ARCA. Employee acknowledges that the restrictions, covenants, and warranties of paragraphs 8 and 9, as well as the remedies granted in this Section 11 formed a material inducement to Company to enter the Agreement and Plan of Reorganization referenced herein.
(Emphasis added.) Another reference to the reorganization agreement appears in section 8(b) of the employment agreement, which details competitive restrictions. In fact, Fritz agreed that he would refrain from certain competitive activities "[s]o long as the Company has fully performed its obligations under this Agreement and the Agreement and Plan of Reorganization." Employment agreement at § 8(b) (emphasis added).
Our reading is buttressed by the fact the reorganization agreement explicitly incorporates the parties' employment agreement by reference in provision 2. Because matters incorporated into a contract by reference are as much a part of the contract as if set out verbatim, the district court did not err in concluding that the two agreements formed a single contract. Jim Carlson Constr., Inc. v. Bailey, 769 S.W.2d 480, 481 (Mo. Ct. App. 1989); Welch v. North Hills Bank, 442 S.W.2d 98, 101 (Mo. Ct. App. 1969).
We read this clause to mean the employment agreement supersedes all previous agreements relating to Fritz's employment with ARCA of St. Louis. But we do not read this clause to mean that the employment agreement supersedes contemporaneous agreements pertaining to the broader issue of reorganization and merger. Although the employment agreement is silent as to the issue of forum selection, the parties executed the agreements in conjunction with the same transaction. The district court did not violate the integration clause in the employment agreement by applying the forum selection clause in the reorganization agreement.
*Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.