F I L E D
United States Court of Appeals
Tenth Circuit
PUBLISH
JUN 25 1999
UNITED STATES COURT OF APPEALS
PATRICK FISHER
Clerk
TENTH CIRCUIT
GALE D. GIBSON, formerly known
as Gale D. Widmer,
Plaintiff - Appellant,
v. No. 98-8040
WAL-MART STORES INC., a
Delaware Corporation; BECKY
BROOKS,
Defendants - Appellees.
Appeal from the United States District Court
for the District of Wyoming
(D.C. No. 97-CV-1044- B)
James R. McCarty, Casper, Wyoming, for Plaintiff-Appellant.
Rosemary Orsini (David P. Hersh, Diane Vaksdal Smith on the brief), Burg &
Eldredge, Englewood, Colorado, for Defendants-Appellees.
Before PORFILIO, MAGILL, * and LUCERO, Circuit Judges.
MAGILL, Circuit Judge.
*
Honorable Frank Magill, Senior Circuit Judge, United States Court of Appeals for
the Eighth Circuit, sitting by designation.
Several years after being injured while stocking shelves at a Wal-Mart
Stores, Inc. (Wal-Mart) store and receiving more than $31,000 in benefits from
Wal-Mart's private workers' compensation plan, Gale Gibson brought this action
against Wal-Mart and Becky Brooks, a former co-employee, alleging that they
negligently caused her injuries. Gibson appeals the district court's order granting
Wal-Mart's motion to compel arbitration and dismissing her claims. We affirm.
I.
On December 17, 1993, Gale Gibson and Becky Brooks were moving stock
in the back room of a Wal-Mart store located in Wyoming. Gibson was injured
when a box being placed on top of a shelf by Brooks fell on her. While at work
nearly a week later, on December 22, 1993, Gibson determined that she needed to
see a doctor because of her injuries. She asked the store's assistant manager, Jim
Miller, whether Wal-Mart would pay for her to see a doctor. Miller told her that
Wal-Mart would pay for her medical expenses only if she signed some release
papers and sought benefits through Wal-Mart's private workers' compensation
plan. Miller also told her that her health insurance (secured through Wal-Mart)
would not cover her medical expenses because her injury was work-related. Later
that day, Gibson went to the store manager, Gary Powers, and asked to sign the
release papers. Powers presented her with a "WAIVER AND RELEASE OF
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RIGHT TO SUE" agreement (the Agreement), which Gibson signed without
reading.
In the Agreement, Gibson "expressly and voluntarily waive[d] and
release[d] . . . any and all rights which he/she may have to file any independent
action in any court against Wal-Mart, its officers, directors, employees, agents or
attorneys as the result of any accident . . . which arises in any manner out of [her]
employment with Wal-Mart." Agreement at 1. She "acknowledge[d] that if
he/she does file any action against Wal-Mart as the result of any occupational
injury . . ., he/she forfeits all benefits under Wal-Mart's workers' compensation
plan . . . ." Id. She also "agree[d] to arbitrate any disputes as to entitlement to
benefits under Wal-Mart's workers' compensation plan, which shall be a full and
final resolution, binding on both parties." Id. In addition, she acknowledged that
she "underst[oo]d the nature of this waiver and release" and that she "ha[d] been
given the opportunity to review completely the Workers' Compensation Plan of
Wal-Mart . . . [and] to consult with counsel of his/her choosing prior to signing
this document." Id. at 1-2. In consideration for this release and waiver, Wal-
Mart maintained a private workers' compensation plan and agreed to pay benefits
to Gibson under the terms of that plan.
After signing the Agreement, Gibson received more than $31,000 in
benefits under Wal-Mart's workers' compensation plan over several years. The
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plan ceased paying benefits to Gibson when two independent doctors diagnosed
her as having attained her point of maximum medical improvement.
Notwithstanding the doctors' diagnoses and the termination of her benefits,
Gibson continued to seek medical treatment and incur expenses. She then filed
this diversity action against Wal-Mart and Brooks, alleging that they were liable
for her injuries. Invoking the Agreement and its arbitration clause, Wal-Mart
filed a motion to compel arbitration. The district court granted the motion and
dismissed the lawsuit.
II.
We review a district court's grant of a motion to compel arbitration de
novo. See Armijo v. Prudential Ins. Co. of Am., 72 F.3d 793, 796 (10th Cir.
1995). The parties agree that we should review the record under the standard for
summary judgment. Summary judgment is appropriate if "there is no genuine
issue as to any material fact and . . . the moving party is entitled to a judgment as
a matter of law." Fed. R. Civ. P. 56(c). When applying this standard, we
examine the evidence in the light most favorable to the nonmoving party, Gibson.
See Byers v. City of Albuquerque, 150 F.3d 1271, 1274 (10th Cir. 1999). "If
there is no genuine issue of material fact in dispute, then we next determine if the
substantive law was correctly applied by the district court." Wolf v. Prudential
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Ins. Co. of Am., 50 F.3d 793, 796 (10th Cir. 1995). Because this is a diversity
case, we review the district court's determinations of state law, in this case
Wyoming law, 1 de novo. See Salve Regina College v. Russell, 499 U.S. 225, 231
(1991).
In Wyoming, "[t]he right to submit a dispute to arbitration is contractual,"
Jackson State Bank v. Homar, 837 P.2d 1081, 1085 (Wyo. 1992), and a written
agreement between an employer and an employee "to submit any existing or
future controversy to arbitration is valid, enforceable and irrevocable, save upon
such grounds as exist at law or in equity for the revocation of the contract."
Wyoming Stat. § 1-36-103. Gibson contends that she did not contractually agree
to arbitrate the present dispute and, even if she did, the Agreement is invalid and
unenforceable on both legal and equitable grounds. We address these contentions
in reverse order.
A. The Agreement is enforceable.
Gibson asserts legal and equitable grounds for revoking the Agreement.
She first contends that the Agreement is void and unenforceable because it
violates two provisions of the Wyoming Constitution and one Wyoming statute.
She also argues that the Agreement is void and unenforceable because she signed
it under duress. See Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912
1
It is undisputed that Wyoming law applies in this case.
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F.2d 1238, 1241 (10th Cir. 1990) ("Under Wyoming law a contract may be
cancelled because of duress."). We disagree with both contentions.
1. The Agreement is valid under Wyoming law.
Gibson contends that the Agreement violates Article 10, § 4 and Article 19,
§ 7, of the Wyoming Constitution, as well as Wyoming Statute § 27-1-105.
However, it is clear from the express language of these constitutional and
statutory provisions that they are not applicable to the Agreement.
The Agreement does not violate Article 10, § 4 of the Wyoming
Constitution. That section provides, in relevant part, that "[a]ny contract or
agreement with any employee waiving any right to recover damages for causing
the death or injury of any employee shall be void." Wyo. Const. art. 10, § 4. In
this case, the Agreement specifically provides for Gibson to recover benefits for
her injuries and, in fact, she received more than $31,000 in benefits from Wal-
Mart's workers' compensation plan. Accordingly, the Agreement does not run
afoul of Article 10, § 4. See Lea v. D&S Casing Serv., Inc. (In re Lea), 707 P.2d
754, 755-56 (Wyo. 1985) (holding that a stipulation entered into between an
employer and employee providing for the employer to pay a fixed amount of
workers compensation benefits was binding and "was not an agreement 'waiving
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any right to recover damages for causing the death or injury of any employee'
prohibited by Article 10, § 4").
The Agreement also does not violate either Article 19, § 7 of the Wyoming
Constitution or Wyoming Statute § 27-1-105. This constitutional provision and
statute prohibit an employer from conditioning employment on an employee's
assent to a release or discharge from liability for injuries occurring in the course
of employment. 2 Here, however, there is no evidence that Wal-Mart conditioned
Article 19, § 7 provides:
2
It shall be unlawful for any person, company or corporation, to require of its
servants or employees as a condition of their employment, or otherwise, any
contract or agreement whereby such person, company or corporation shall
be released or discharged from liability or responsibility, on account of
personal injuries received by such servants or employees, while in the
service of such person, company or corporation, by reason of the negligence
of such person, company or corporation, or the agents or employees thereof,
and such contracts shall be absolutely null and void.
Wyo. Const. art. 19, § 17.
The statute provides:
It shall be unlawful for any person, company or corporation to require of its
servants or employees, as a condition of their employment or otherwise, any
contract or agreement whereby such person, company or corporation shall
be released or discharged from liability or responsibility on account of
personal injuries received by such servants or employees while in the
service of such person, company or corporation, by reason of the negligence
of such person, company or corporation, or the agents or employees thereof,
and such contracts shall be absolutely null and void.
(continued...)
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Gibson's employment on her assent to any release of liability. Moreover, the
Agreement does not operate to release Wal-Mart from liability or responsibility
for Gibson's injuries. Rather, Wal-Mart, through its private workers'
compensation plan, accepted liability for Gibson's injuries and paid her more than
$31,000. See Lea, 707 P.2d at 756 (finding that an employer's stipulation to pay a
fixed amount of workers' compensation benefits to its employee "did not operate
to relieve the employer from liability," but demonstrated that "the employer
accepted liability"). Accordingly, we hold that the Agreement does not violate
either Article 19, § 7 or § 27-1-105.
2. There was no duress.
Gibson also asserts that the Agreement is void because she signed it under
duress. The facts do not support this assertion.
Gibson, the party seeking to cancel the Agreement, bears the burden of
proving that she signed it under duress. See Goodson v. Smith, 243 P.2d 163, 171
(Wyo. 1952). "[D]uress exists whenever a person is induced, by the unlawful act
of another, to perform some act under circumstances which deprive him of the
existence of free will." In re TR, 777 P.2d 1106, 1111 (Wyo. 1989). "Therefore,
in order to show duress in Wyoming a party must show deprivation of free will
(...continued)
2
Wyo. Stat. § 27-1-105.
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because of the unlawful act of another." Applied Genetics, 912 F.2d at 1241-42.
Whether particular facts are sufficient to constitute duress is a question of law.
See Blubaugh v. Turner, 842 P.2d 1072, 1074 (Wyo. 1992).
Gibson contends that she signed the Agreement because she understood that
she would not be reimbursed for her medical bills if she failed to do so. In
essence, Gibson is raising an economic duress claim, i.e., Wal-Mart threatened
not to cover her medical expenses and she had no economically viable choice
other than to sign the Agreement in light of that threat. Wyoming courts have
recognized economic duress and held that "economic duress occurs when (1) a
party involuntarily accepts the terms of another, (2) circumstances permit no other
alternative, and (3) such circumstances are the result of coercive acts of the other
party." Id. at 1075. "Economic duress does not exist, however, unless a person
has been the victim of a wrongful act and has no reasonable alternative but to
agree with the terms of another or be faced with a serious financial hardship." Id.
"'Thus, in order to avoid a contract, a party must . . . show that he had no
reasonable alternative to agreeing to the other party's terms, or, as it is often
stated, that he had no adequate remedy if the [other party's] threat were to be
carried out.'" Id. at 1076 (quoting Totem Marine Tug & Barge, Inc. v. Alyeska
Pipeline Serv. Co., 584 P.2d 15, 22 (Alaska 1978)).
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In this case, we fail to see that Wal-Mart committed any wrongful or
unlawful act. Although Gibson alleges that requiring her to sign the Agreement
violated Wyoming law, we have already rejected this contention. Moreover, we
hold that Gibson has failed to present sufficient facts to demonstrate that she had
no alternative but to sign the Agreement. Specifically, she "wholly failed to
present anything which would in any way indicate that, if [she] did not sign the
agreement, [she] would face such immediate financial ruin that [she] could not
seek" other remedies at law. Id. She did not present any evidence regarding her
ability or inability to pay for her medical expenses as of the day she signed the
Agreement. Similarly, she failed to introduce any evidence suggesting that she
could not seek remedies at law in the event that Wal-Mart refused to pay for her
medical expenses because of her refusal to sign the Agreement. In fact, her
conduct immediately prior to filing this suit--willfully incurring medical expenses
notwithstanding the Wal-Mart plan's refusal to disburse any more benefits--
suggests that Gibson was not economically coerced.
In further support of her duress argument, Gibson complains that she was
not given any time to deliberate on the Agreement, she was not told that she had a
right to consult with an attorney, she was not encouraged to consult with an
attorney, she was unable to negotiate the terms of the Agreement, and she was
suffering from some physical discomfort at the time she signed the Agreement.
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See Torrez v. Public Serv. Co. of N.M., Inc., 908 F.2d 687, 689-90 (10th Cir.
1990) (per curiam) (explaining that, in determining whether party acted
voluntarily in signing a release and waiver, the court should consider, inter alia,
"'the amount of time plaintiff had for deliberation about the release before signing
it[,] . . . whether plaintiff was encouraged to seek, or in fact received benefit of
counsel'" and "'whether there was an opportunity for negotiation of the terms of
the Agreement'" (quoting Cirillo v. Arco Chem. Co., 862 F.2d 448, 451 (3d Cir.
1988))). However, we do not believe that these allegations, either individually or
collectively, support a finding of duress. See Blubaugh, 842 P.2d at 1075-76
(finding that a release of liability agreement was not signed under economic
duress when the plaintiff did not have the opportunity to negotiate the terms of
his release, was in shock and distraught at the time he signed the release, and was
not told that he had a right to consult with an attorney).
Initially, we point out that Gibson had an opportunity to review the
Agreement, and the Agreement specifically provides that Gibson was given the
opportunity to consult with counsel. Rather than presenting any evidence to the
contrary, Gibson testified in her deposition that she chose to sign the Agreement
without reading it. We will not credit her deliberate refusal to read the
Agreement as supporting an inference that she had no opportunity to either
consider the Agreement or consult with an attorney about the Agreement.
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Regardless, the Wyoming Supreme Court has explained that "[n]egotiations
through counsel are not the sine qua non of a valid contract" and, thus, a failure to
consult with counsel does not require a finding of duress. Id. at 1076. Similarly,
Gibson's inability to negotiate the terms of the Agreement does not amount to
duress. See id. Likewise, the mere fact that Gibson was suffering from some
physical discomfort at the time she signed the Agreement does not constitute
duress. See Goodson, 243 P.2d at 171 (holding that duress was not established
even though plaintiff signed deed late at night, when she was tired, in a smoke-
filled room in which "there was a good deal of talking . . . causing confusion");
cf. Blubaugh, 842 P.2d at 1076 (explaining that plaintiff had not demonstrated
duress when he signed the contract when "in shock and distraught" because
"[e]motional distress is not the equivalent of duress"). Moreover, these
circumstances in their totality fail to constitute duress. See id.
We believe that this case is one involving
"someone who was initially satisfied with his settlement, but who, upon
subsequent reflection, concludes that he could have gotten more out of the
deal and therefore attempts to renege on it. However, it is well settled that
the mere fact of an improvident or bad bargain or a feeling of latent
discontent is not a sufficient basis to avoid the effect of an otherwise valid
release."
Id. at 1077 (quoting Horgan v. Industrial Design Corp., 657 P.2d 751, 754 (Utah
1982)). Thus, we hold that the undisputed material facts do not constitute
sufficient duress to invalidate the Agreement.
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B. The arbitration clause applies to this dispute.
Gibson contends that, even if the Agreement is enforceable, the
Agreement's arbitration clause does not apply to the present dispute. We
disagree.
Because arbitration is a matter of contract, a party may not be required to
arbitrate a dispute "unless it has agreed to arbitration of that dispute." American
Nat'l Bank of Denver v. Cheyenne Hous. Auth., 562 P.2d 1017, 1020 (Wyo.
1977). "By the same token, a party should not be required to litigate disputes
which are subject to an arbitration agreement, and there is . . . a strong policy
favoring arbitration of disputes where the parties have bargained for this
procedure in their contract." Id. "In the face of an arbitration clause which is
couched in broad terms, litigation instead of arbitration should not be available at
the option of a party." Id.
In this case, Gibson executed the Agreement for the express purpose of
receiving coverage for her medical expenses. The Agreement provides that
medical expenses are covered only under the terms of Wal-Mart's workers'
compensation plan. In the Agreement, Gibson "acknowledge[d] that if he/she
executes this [Agreement] that he/she is agreeing to arbitrate any disputes as to
entitlement to benefits under Wal-Mart's workers' compensation plan."
Agreement at 1 (emphasis added). She also "expressly and voluntarily waive[d]
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and release[d] . . . any and all rights which he/she may have to file any
independent action in any court against Wal-Mart, its officers, directors,
employees, agents or attorneys as the result of any accident . . . which arises in
any manner out of [her] employment with Wal-Mart." Id. By signing the
Agreement and accepting benefits under Wal-Mart's plan, Gibson thus clearly
waived her right to bring this suit against Wal-Mart and agreed to arbitrate all
disputes concerning her eligibility for benefits under its plan.
III.
Gibson raises a few other challenges which we dismiss summarily. First,
she argues that Wal-Mart has waived its right to enforce the Agreement because it
has stopped paying her any benefits under the workers' compensation plan.
However, the Agreement specifically provides that any disputes as to benefits
under the plan are to be resolved through arbitration. Rather than waiving its
right to enforce the Agreement, Wal-Mart is specifically attempting to enforce the
terms of the Agreement by seeking arbitration of her eligibility for further
benefits. Second, Gibson argues that the district court improperly dismissed her
claims against Brooks. However, the Agreement specifically provides that
Gibson has waived and released her claims against not only Wal-Mart, but also
Wal-Mart's employees. There is no dispute that Brooks is a Wal-Mart employee,
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and the mere fact that Brooks did not join in Wal-Mart's motion to compel
arbitration does not render the district court's ruling erroneous. Cf. Malak v.
Associated Physicians, Inc., 784 F.2d 277, 280 (7th Cir. 1986) ("where one
defendant files a motion for summary judgment which the court grants, the
district court may sua sponte enter summary judgment in favor of additional non-
moving defendants if the motion raised by the first defendant is equally effective
in barring the claim against the other defendants and the plaintiff had an adequate
opportunity to argue in opposition to the motion"). 3
IV.
For the foregoing reasons, we AFFIRM the district court.
3
The fact that Brooks did not individually sign the Agreement does not preclude
enforcement of the Agreement with respect to Gibson's claims against her because it is
clear that Brooks was, at the very least, a third party beneficiary of the Agreement. See
MS Dealer Serv. Corp. v. Franklin, --- F.3d ---, No. 98-6699, 1999 WL 342495, at *3
(11th Cir. May 28, 1999) (explaining that a nonsignatory may enforce an arbitration
agreement under a third party beneficiary theory when the parties to the agreement have
agreed, upon the formation of their agreement, to confer the benefits thereof to the
nonsignatory); Ex parte Gray, 686 So.2d 250, 251 (Ala. 1996) (individual defendant
could compel arbitration of claims arising from his actions as co-defendant's employee,
notwithstanding fact that he was not a signatory to arbitration agreement between plaintiff
and co-defendant, because "[a] party should not be able to avoid an arbitration agreement
merely by suing an employee of a principal"); cf. Arnold .v Arnold Corp.--Printed
Communications for Bus., 920 F.2d 1269, 1281 (6th Cir. 1990) (citing cases from several
circuits for the proposition that nonsignatories of arbitration agreements may be bound by
such agreements under ordinary contract and agency principles).
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