Brown v. Ryan's Family Steak Houses, Inc. , 113 F. App'x 512 ( 2004 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-1351
JEWEL BROWN,
Plaintiff - Appellee,
versus
RYAN’S FAMILY STEAK HOUSES, INCORPORATED;
RYAN’S FAMILY STEAK HOUSE MANAGEMENT,
INCORPORATED; RYAN’S FAMILY STEAK HOUSES EAST,
INCORPORATED; ROD WESSINGER,
Defendants - Appellants,
and
DAVID BARBER,
Defendant.
Appeal from the United States District Court for the District of
South Carolina, at Charleston. Patrick Michael Duffy, District
Judge. (CA-03-2582-23BG)
Argued: October 1, 2004 Decided: October 29, 2004
Before LUTTIG and MICHAEL, Circuit Judges, and Jackson L. KISER,
Senior United States District Judge for the Western District of
Virginia, sitting by designation.
Affirmed by unpublished opinion. Judge Kiser wrote the opinion, in
which Judge Luttig and Judge Michael joined.
ARGUED: Edward Grantland Burns, Michael Stuart Pitts, NEXSEN
PRUETT, Greenville, South Carolina, for Appellants. Tanya Briana
Spavins, STEWART, ESTES & DONNELL, Nashville, Tennessee, for
Appellee. ON BRIEF: Mary L. Hughes, NEXSEN PRUETT, Charleston,
South Carolina, for Appellants. M. Reid Estes, Jr., STEWART, ESTES
& DONNELL, Nashville, Tennessee; Jack D. Cordray, Charleston, South
Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
- 2 -
KISER, Senior District Judge:
This appeal arises from a suit under Title VII by appellee
Jewel Brown against appellants Ryan’s Family Steak Houses
(“Ryan’s”), her former employer. Ryan’s filed a motion to dismiss
and a motion to compel arbitration based on an arbitration
agreement (“Agreement”) signed by Jewel Brown (“Brown”) and Pearl
Gassaway (“Gassaway”), her legal guardian. Applying South Carolina
contract law and federal arbitration law, the district court
determined that the Agreement was void on several grounds,
including 1) Brown was a minor at the time of signing the Agreement
and Pearl Gassaway, her guardian, did not have the requisite mental
capacity to enter into a binding contract; 2) the Agreement was not
notarized as stipulated in the terms of the Agreement; 3) Ryan’s
violated the Agreement by failing to provide Brown and Gassaway
with a copy of the rules of the arbitration system established in
the Agreement; and 4) Brown could not effectively vindicate her
Title VII rights in the arbitral forum established in the
Agreement. The district court therefore denied the motion to
dismiss and the motion to compel arbitration. For the reasons set
forth below, we affirm the district court’s decision.
- 3 -
I.
We will limit our recitation of facts to those which bear on
Gassaway’s lack of mental capacity to execute the Agreement. On
May 25, 2001, one week after her sixteenth birthday, Brown applied
for a position as a server at Ryan’s in North Charleston, South
Carolina. As part of the application process and before she
commenced any work with Ryan’s, Brown was given various forms
including a mandatory arbitration agreement with EDSI, an
arbitration company contracted by Ryan’s. Brown took these forms
to her car to fill them out. Because Brown was a minor at the time
of the signing, Pearl Gassaway, her great-great aunt1 and legal
guardian, also signed the agreement.
Gassaway died in 2002. Gassaway’s sister, Jewel Craig
(“Craig”), testified that Gassaway had two strokes and could not
perform daily tasks such as cooking, driving, or answering the
phone for years leading up to her death. In at least one incident,
Gassaway left the house in the middle of the night, went to a
neighboring house, and could not find her way home. Furthermore,
Dr. John Sanders, Gassaway’s treating physician for sixteen years,
stated that Gassaway had been physically and mentally declining for
three to four years before her death in 2002. Among her various
1
The district court’s opinion refers to Gassaway as a great
aunt. Considering that both the magistrate’s report and
plaintiff’s briefs refer to her as a great-great aunt, we will
assume that the district court simply made an oversight.
- 4 -
ailments, Gassaway was afflicted by atrophy of the brain and a
subclavian steal syndrome, a disease resulting in decreased blood
flow to the brain and causing her to lose consciousness. In 2001,
there was an investigation into whether she should retain
guardianship of Brown. In March 2001, Dr. Sanders wrote a letter
supporting the retention of custody by Gassaway with “proper
counseling and assistance.”
On August 7, 2003, Brown, sued Ryan’s under Title VII for
sexual harassment, discrimination, wrongful termination, and
retaliation in connection with her employment. On August 27, 2003,
Ryan’s filed a motion to dismiss and petitioned to compel
arbitration under an agreement signed by Ms. Brown at the time of
her job application. The Magistrate Judge issued a report
recommending that Ryan’s motion to dismiss be denied based on the
invalidity of the arbitration agreement. Ryan’s objected to the
Magistrate’s report. On February 27, 2004, the District Court
adopted portions of the Magistrate’s report and denied Ryan’s
motion to dismiss and petition to compel arbitration. Ryan’s filed
a Notice of Appeal on March 8, 2004.
II.
We review de novo a decision of the lower court on a motion to
dismiss pursuant to Rule 12(B)(6). Brooks v. City of Winston-
Salem, N.C., 85 F.3d 178 (4th Cir. 1996). Dismissal under Rule
- 5 -
12(B)(6) is appropriate when, accepting as true the well-pleaded
facts in the complaint and viewing them in the light most favorable
to the plaintiff, the court finds with certainty that a plaintiff
would not be entitled to relief under any state of facts which
could be proved in support of the plaintiff’s claim. See id. We
also review de novo a district court's denial of a motion to compel
arbitration. Sydnor v. Conseco Financial Servicing Corp., 252 F.3d
302 (4th Cir. 2001).
A district court’s underlying findings of fact, however, are
reviewed for clear error. Giovani Carandola, Ltd. v. Bason, 303
F.3d 507, 511 (4th Cir. 2002). This Court has indicated that a
determination of mental capacity is a factual determination.
Shrader v. Heckler, 754 F.2d 142 (4th Cir. 1985). Furthermore,
South Carolina common law treats determinations of mental capacity
as findings of fact appropriate for juries. See Vereen v. Hardee,
328 S.E.2d 666 (S.C.App.,1985); Byrd v. Byrd, 308 S.E.2d 788 (S.C.
1983) (affirming jury determination concerning mental capacity);
Vereen v. Bell, 182 S.E.2d 296 (S.C. 1971) (stating that
determination of mental capacity to execute a deed was a finding of
fact); Dominick v. Rhodes, 24 S.E.2d 168 (S.C. 1943) (indicating
that a Master’s determination of a businessman’s mental
incompetency was a finding of fact); Gladden v. Southern Ry. Co.,
141 S.E. 90 (S.C. 1928) (holding that the validity of a release
signed by an injured plaintiff based on concerns over her mental
- 6 -
capacity and duress was an appropriate question for the jury). We
therefore review the district court’s determination of mental
capacity under the clear error standard.
Finally, we review a district court’s evidentiary rulings for
abuse of discretion. General Elec. Co. v. Joiner, 522 U.S. 136,
141-42 (1997).
III.
We disagree with Ryan’s assertion that the district court
erred in finding that Gassaway did not have the mental capacity to
enter into a binding contract. Under South Carolina law, a person
must have the mental capacity to understand or comprehend the
subject of the contract, its nature, and its probable consequences.
Macauly v. Wachovia Bank of South Carolina, N.A., 569 S.E.2d 371,
376 (S.C. Ct. App. 2002). The party alleging lack of capacity
bears the burden of proving incapacity at the time of the
transaction by a preponderance of the evidence. Grapner v. Atl.
Land Title Co., 416 S.E.2d 617, 618 (S.C. 1992). Under the Federal
Rules of Evidence and Supreme Court precedent, expert testimony
must meet certain requirements to be admissible. See Daubert v.
Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993); Fed. R.
Evid. 702. The Fourth Circuit has held, however, that Daubert does
not apply to fact witnesses, such as a medical examiner who
- 7 -
examines the victim of an accident. Binakonsky v. Ford Motor Co.,
133 F.3d 281 (4th Cir 1998). Furthermore, if a witness is not
testifying as an expert, he may testify to opinions or inferences
which are rationally based on his perception of the facts if it is
helpful to a clear understanding of a fact in issue and not based
on scientific, technical, or specialized knowledge. Fed. R. Evid.
701.
In the present case, Ryan’s argues that the district court
erred in admitting two pieces of evidence offered by Brown. Ryan’s
first objects to a letter from Dr. Sanders, Gassaway’s treating
physician for sixteen years, which stated that Gassaway had been
physically and mentally declining for three to four years before
her death in 2002. In the letter, Dr. Sanders detailed Gassaway’s
various ailments including atrophy of the brain and a subclavian
steal syndrome,2 a disease resulting in decreased blood flow to the
brain and causing her to lose consciousness. Ryan’s argues that
Dr. Sanders’s testimony fails to meet the standards established by
Daubert.
In reviewing the district court’s decision to admit Dr.
Sanders’s letter, we find that the district court did not abuse its
2
Although neither the district court nor the magistrate
specifically mention subclavian steal syndrome, both mentioned that
Dr. Sanders’s letter chronicled the various ailments afflicting
Gassaway and cited the letter as a basis for their rulings. The
letter listed various serious ailments including subclavian steal
syndrome.
- 8 -
discretion. First, Dr. Sanders’s diagnosis of Gassaway’s ailments
does not have to meet Daubert standards because Dr. Sanders is a
fact witness observing the condition of a patient, like the medical
examiner in Binakonsky. Second, Dr. Sanders’s opinion that
Gassaway could not have reasonably understood the terms of the
Agreement is admissible under Rule 701 of the Federal Rules of
Evidence. Fed. R. Evid. 701. His opinion on Gassaway’s mental
well-being was based on his perception of Gassaway and her
ailments, not on “scientific, technical, or specialized knowledge.”
Furthermore, Dr. Sanders is the most qualified person available to
testify to Mrs. Gassaway’s mental capacity. Gassaway has passed
away and is not available for further medical examination. Dr.
Sanders was her treating physician for sixteen years. The fact
that his practice is internal medicine rather than neurology does
not negate the fact that he is a qualified physician with more
first-hand knowledge concerning Gassaway’s physical and mental
well-being than any other medical professional. The district
court, therefore, did not abuse its discretion in admitting his
letter.
Ryan’s also argues that the district court erred in accepting
the affidavit of Craig, Gassaway’s sister. The affidavit describes
the behavior of Gassaway in the final years of her life and her
ability to perform daily tasks. Ryan’s argues that the affidavit
- 9 -
is irrelevant because it only describes limitations on Gassaway’s
physical capacity rather than her mental capacity.
These arguments also fail. Deficiencies in mental well-being
often manifest themselves in physical actions. Craig lived with
Gassaway for fifteen years. She described situations in which
Gassaway became lost and confused, and she described Gassaway’s
inability to perform simple daily tasks. Certainly, the district
court could have considered these situations and capabilities as
physical manifestations of her diminished mental capacity such that
it was not clear error for the district court to consider Craig’s
testimony.
Although Ryan’s does not offer any evidence of their own to
rebut Brown’s evidence, Ryan’s does try to assert that the district
court erred because Brown’s evidence actually shows that Gassaway
did have the mental capacity to enter into a binding contract.
Ryan’s argues that a letter written by Dr. Sanders to support
Gassaway’s efforts to retain guardianship of Brown in March 2001
indicates that Gassaway did have the mental capacity to enter into
a binding contract because Dr. Sanders opines that Gassaway had
been a “responsible parent” and should retain guardianship over
Brown.
Again, Ryan’s arguments lack merit. This letter specified that
Gassaway could be a responsible parent with proper assistance and
counseling. A statement that a person needs somebody else to
- 10 -
assist and counsel them to be responsible does not indicate that
the person has the mental capacity to enter into a binding
contract. Because Dr. Sanders indicated that Gassaway needed
assistance and counseling to be a responsible parent, his letter
does not show that she had the requisite mental capacity.
Finally, Ryan’s argues that the district court failed to
properly consider the affidavit of Brown, the only witness to
Gassaway’s signing of the Agreement. The affidavit does not
mention anything that would indicate a diminished mental capacity
at the time of the signing. Because the only material witness to
the signing did not indicate that Gassaway lacked mental capacity
at the time, Ryan’s argues that the district court erred in finding
that Gassaway lacked the requisite mental capacity to enter into a
binding contract.
We find that the lack of description in Brown’s affidavit of
any mental deficiencies afflicting Gassaway, however, is hardly
determinative or even persuasive in analyzing Gassaway’s mental
capacity. Brown has offered the testimony of Dr. Sanders and Craig
to prove Gassaway’s diminished mental capacity. The simple lack of
a definitive statement in Brown’s affidavit cannot outweigh the
affirmative assertions of Gassaway’s treating physician and live-in
sister. Therefore, the district court did not clearly err in its
consideration of Brown’s affidavit.
- 11 -
In conclusion, we note that Ryan’s has not offered a shred of
evidence to rebut the evidence offered by Brown. Although the
affidavit of Craig and the letter by Dr. Sanders are by no means
perfect indicators of Gassaway’s mental capacity, we cannot find
that the district clearly erred in determining that Gassaway lacked
the mental capacity to enter into a binding contract at the time
she signed the Agreement. Without countervailing evidence, we must
concur with the district court’s finding that the Agreement was
unenforceable.
Because we find the Agreement is unenforceable on this ground,
we find it unnecessary to address the other grounds of invalidity
found by the district court.
IV.
Because the district court did not abuse its discretion in
admitting and considering evidence offered by Brown to prove
Gassaway’s mental incapacity and Ryan’s offered no proof to rebut
the evidence, the district court did not clearly err in finding
that Gassaway did not have the mental capacity to enter into a
binding contract. Because Brown was a minor at the time of signing
the Agreement and Gassaway lacked the mental capacity to make the
Agreement enforceable, the district court’s decision to deny the
motion to dismiss and the motion to compel arbitration is
AFFIRMED.
- 12 -