Filed: Mar. 01, 2004
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 3-1-2004 Bouriez v. Carnegie Mellon Univ Precedential or Non-Precedential: Precedential Docket No. 03-1709P Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "Bouriez v. Carnegie Mellon Univ" (2004). 2004 Decisions. Paper 897. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/897 This decision is brought to you for free and open access by t
Summary: Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit 3-1-2004 Bouriez v. Carnegie Mellon Univ Precedential or Non-Precedential: Precedential Docket No. 03-1709P Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004 Recommended Citation "Bouriez v. Carnegie Mellon Univ" (2004). 2004 Decisions. Paper 897. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/897 This decision is brought to you for free and open access by th..
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Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
3-1-2004
Bouriez v. Carnegie Mellon Univ
Precedential or Non-Precedential: Precedential
Docket No. 03-1709P
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
Recommended Citation
"Bouriez v. Carnegie Mellon Univ" (2004). 2004 Decisions. Paper 897.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/897
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2004 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
PRECEDENTIAL
___________ (Filed: March 1, 2004)
UNITED STATES COURT OF ___________
APPEALS FOR THE THIRD CIRCUIT
James A. Vollins, Esq. (Argued)
No. 03-1709 Squire, Sanders & Dempsey
___________ 127 Public Square
4900 Key Tower
CHRISTIAN BOURIEZ; Cleveland, OH 44114-1304
MONTANELLE BEHEER B.V., Counsel for Appellants
Appellants,
George E. Yokitis, Esq. (Argued)
vs. DeForest, Koscelnik & Yokitis
436 Seventh Avenue
CARNEGIE MELLON UNIVERSITY 3000 Koppers Building
___________ Pittsburgh, PA 15219
Counsel for Appellee
APPEAL FROM THE UNITED
STATES DISTRICT COURT FOR THE ___________
WESTERN DISTRICT OF
PENNSYLVANIA OPINION OF THE COURT
___________
(D.C. No. 02-cv-02104)
NYGAARD, Circuit Judge.
District Judge:
The Honorable Arthur J. Schwab Christian Bouriez and M ontanelle
___________ Beheer B.V. (collectively referred to as
“Bouriez”) appeal the District Court’s
ARGUED order compelling arbitration and
JANUARY 27, 2004 dismissing their case. We will reverse
and remand.
BEFORE:
NYGAARD and FUENTES,
Circuit Judges, and
O’NEILL,* District Judge.
(...continued)
* Honorable Thomas N. O’Neill, States District Court for the Eastern
Jr., Senior District Judge for the United District of Pennsylvania, sitting by
(continued...) designation.
I.
By the end of 2000, Carnegie
In 1996, Carnegie Mellon Mellon was in need of additional funds
University entered into an agreement (the for the Project. Carnegie Mellon again
“1996 Agreement”) with Zeta Projects approached Bouriez and he agreed to
Limited. Under the terms of this assist Carnegie Mellon in finding
Agreement, Zeta Projects would fund additional investors. Before finding
certain of Carnegie Mellon’s research those investors, the Project underwent an
projects. In 1997, Governors Refining audit and, according to Bouriez, that
Technologies assumed Zeta Projects’ audit revealed that Carnegie Mellon
position in the 1996 Agreement. never had Proof-of-Concept for the
Governors Refining was a partially Project. As a result of this discovery,
owned subsidiary of Governors Bouriez did not try to find additional
Technologies Corp. investors for the Project and sued
Carnegie Mellon. Bouriez claims that
In 1999, Carnegie Mellon Carnegie Mellon made
approached Bouriez about investing in a misrepresentations to him about the
research project (“the Project”) that was status of the Project in order to convince
being conducted under the 1996 him to purchase shares in Governors
Agreement. 1 According to Bouriez, Technologies and, thereby fund the
Carnegie Mellon represented to him that Project.
they had Proof-of-Concept on the
technology at issue. Bouriez agreed to Carnegie Mellon filed a
support the Project and did so by motion seeking to compel Bouriez to
investing in, and thereby becoming a arbitrate his claims and to have his
shareholder of, Governors Technologies. federal action dismissed. Carnegie
Governors Technologies then took the Mellon based this motion on the
$5,000,000 that Bouriez invested and arbitration clause contained in the 1996
used it to fund the Project. Agreement. The clause requires that,
“Any dispute or claim arising out of or
relating to the Agreement will be settled
by arbitration in Pittsburgh,
1. The 1996 Agreement does not
Pennsylvania.” App. 24. Neither
specifically lay out research projects, but
Bouriez nor Governors Technologies
contemplates that proposals will be
signed this Agreement.
submitted pursuant to the terms of that
Agreement. The project that Governors
The District Court granted
Refining was involved in was submitted
Carnegie Mellon’s motion after finding
under this procedure and involved the
that Bouriez “as agent[] of [Governors
upgrading of crude petroleum using
Technologies], [is] bound by [his]
microwave-enhanced catalytic cracking.
2
principal’s [Governors Technologies] inappropriate to force a party to arbitrate
agreement to arbitrate” and “[Bouriez] their disputes unless that party agreed to
embraced the Agreement and directly such arbitration. E.I. Dupont de
benefitted therefrom and thus [is] Nemours & Co. v. Rhone Poulenc Fiber
equitable [sic] estopped from avoiding its & Resin Intermediates, S.A.S., 269 F.3d
arbitration clause.” App. at 6. 187, 194 (3d Cir. 2001). A party,
however, can be compelled to arbitrate
II. under an agreement, even if he or she did
not sign that agreement, if common law
We have jurisdiction over this principles of agency and contract support
appeal under 28 U.S.C. § 1291.2 We such an obligation on his or her part. Id.
exercise plenary review over the District at 194-95.
Court’s order compelling arbitration.
Pritzker v. Merrill Lynch, Pierce, Fenner Generally, the common law
& Smith, Inc.,
7 F.3d 1110, 1113 (3d theories used to bind a non-signatory to
Cir. 1993). an arbitration clause include third party
beneficiary, agency and equitable
The right to a jury trial is a estoppel. Here, Carnegie Mellon argued,
fundamental right that is expressly and the District Court accepted, that
protected by the Seventh Amendment to Bouriez could be compelled to arbitrate
the United States Constitution. Molthan under the 1996 Agreement based on the
v. Temple Univ. of Com. Sys. of Higher principles of agency and equitable
Educ., 778 F.2d 955, 963 (3d Cir. 1985). estoppel.
Although the Federal Arbitration Act
“establishes a strong federal policy in In its agency analysis, the District
favor of compelling arbitration over Court found that Bouriez was an agent of
litigation,” this Court has held that it is Governors Technologies and, therefore,
was bound to arbitrate under the 1996
Agreement. Bouriez raises several
factual arguments regarding his status as
2. We note that as its primary form
an agent of Governors Technologies and
of relief, Carnegie Mellon requested that
Governors Technologies’ obligation to
the District Court compel arbitration and
arbitrate under an agreement assumed,
dismiss Bouriez’s federal action. We
not by Governors Technologies, but by
express no opinion as to whether, had
Governors Refining. However, even
Carnegie Mellon requested a stay under
assuming Bouriez was an agent of
Section 3 of the Federal Arbitration Act,
Governors Technologies and it was
9 U.S.C. § 3, it would have been proper
obligated to arbitrate under the 1996
for the District Court to dismiss this
Agreement, this does not mean Bouriez
action, and for us to hear an appeal from
was also obligated to arbitrate his claims.
that dismissal.
3
In Bel-Ray Co. v. Chemrite, we held that Group., Inc., 215 F.3d 677 (7th Cir.
an agent can only be bound by the 2000).
agreements of his principal when that
principal acted with the agent’s actual, In Industrial Electronics, iPower
implied, or apparent authority. 181 F.3d approached Industrial Electronics in an
435, 445 (3d Cir. 1999). There is no attempt to convince it to join an
evidence that Governors Technologies, association of other companies.
Id. at
Governors Refining, or any other entity 678-79. Once established, that
was acting with implied, actual or association would enter into a franchise
apparent authority for Bouriez when it agreement with iPower, for iPower to
agreed to the 1996 Agreement. In fact, provide computer software that would
the record shows that Bouriez did not allow customers to purchase from all
even become involved in the Project until members of the association in a single
1999, approximately two years after order.
Id. Industrial Electronics decided
Governors Refining assumed the 1996 to enter into the association, which was
Agreement. Therefore, the District Court created as a limited liability corporation.
is incorrect in its conclusion that any
Id. at 679. One year later, the association
agency relationship between Bouriez and entered into the intended franchise
Governors Technologies obligated him to agreement with iPower.
Id.
arbitrate.
Eventually, Industrial Electronics
A person may also be equitably came to believe that iPower
estopped from challenging an agreement misrepresented certain facts and
that includes an arbitration clause when fraudulently induced Industrial
that person embraces the agreement and Electronics to enter the association. Id.
directly benefits from it. E.I. Dupont, It sued iPower.
Id. In an attempt
to
269 F.3d at 199-200. Here, there is compel arbitration, iPower argued that
simply no evidence in the record to Industrial Electronics was bound by an
indicate that Bouriez directly benefitted arbitration clause that existed in the
from the 1996 Agreement. At most, the franchise agreement between iPower and
facts show that Bouriez became a the association.
Id. The Court of
minority shareholder in Governors Appeals for the Seventh Circuit correctly
Technologies for the sole purpose of observed that Industrial Electronics’
funding the Project. There is no claims were not based on the franchise
evidence that any benefit the Project agreement, but on iPower’s statements
would produce would go to him directly. that induced it to enter into the
In this respect, this case is nearly association.
Id. at 680-81. Thus,
identical to Industrial Electronics Corp. Industrial Electronics was not exploiting
of Wisconsin v. iPower Distribution or directly benefitting from the
agreement that contained the arbitration
4
clause, and would not be equitably
estopped from avoiding that clause.
The facts here are not
distinguishable and we find Industrial
Electronics persuasive. Bouriez is
complaining that Carnegie Mellon
wrongly induced him to enter into a
shareholder agreement with Governors
Technologies. While the purpose of that
agreement was that Bouriez could
provide money to Governors
Technologies that Governors
Technologies would use to fund
Carnegie Mellon, the fact remains that
Bouriez’s claims deal with his
shareholder agreement, and not the 1996
Agreement. As in Industrial Electronics,
“A dispute that arises under one
agreement may be litigated
notwithstanding a mandatory arbitration
clause in a second agreement, even
where the two agreements are closely
intertwined.” Id. at 681. Such is the
circumstance here. The District Court’s
contrary conclusion fails to acknowledge
that Bouriez was one step removed from
the 1996 Agreement and, therefore, is not
equitably estopped from avoiding the
arbitration clause contained in that
Agreement.
III.
For the foregoing reasons, we will
remand the cause.
_________________________
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