EBC, Inc. v. Clark Building System, Inc.

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 09-1182

_______________

EBC, INC.; STATE STEEL SUPPLY, INC.

v.

CLARK BUILDING SYSTEMS, INC.; AMERICAN

COMPOST CORPORATION;

A&M COMPOSTING, INC.; SOLID WASTE SERVICES,

INC.

State Steel Supply, Inc., Appellant

_______________

On Appeal From the United States District Court

for the Western District of Pennsylvania

(Civil No. 2:05-cv-1549)

District Judge: Honorable Nora B. Fischer

Submitted Under Third Circuit LAR 34.1(a)

February 23, 2010

________________

Before: SCIRICA and CHAGARES, Circuit Judges,

and RODRIGUEZ * , District Judge

(Filed: August 18, 2010)

Jennifer L. Gardner, Esq.

Margaret M. Metzinger, Esq.

*

The Honorable Joseph H. Rodriguez, Senior Judge of the

United States District Court for the District of New Jersey, sitting

by designation.

Stewart D. Roll, Esq.

Climaco Law Firm

55 Public Sq., Ste. 1950

Cleveland, OH 44113

Paul R. Rosenberger, Esq.

Persky, Shapiro & Arnoff

25101 Chagrin Blvd., Ste. 350

Beachwood, OH 44122

Counsel for Appellant

Albert A. DeGennaro, Esq.

2650 Audobon Rd.

Audobon, PA 19403

William F. Fox, Jr., Esq.

J.P. Mascaro & Sons

320 Godshall Dr.

Harleysville, PA 19438

Counsel for Appellees

__________________

OPINION

__________________

CHAGARES, Circuit Judge.

In April 2004, now-defunct Clark Building Systems, Inc.

(“Clark”) entered into a contract with appellee A&M Composting,

Inc. (“A&M”), under which Clark would fabricate and deliver

components for a large steel building to be assembled at A&M’s

facility. Clark, in turn, subcontracted with appellant State Steel

Supply, Inc. (“State Steel”) to supply raw steel for the project.

When State Steel was not paid for a significant portion of the steel

that it supplied, it brought this diversity action against A&M in the

United States District Court for the Western District of

Pennsylvania. The District Court granted A&M’s motion for

2

summary judgment in part, rejecting State Steel’s claims for breach

of contract and an account stated. It denied summary judgment on

State Steel’s claims of unjust enrichment and fraudulent

inducement, and a bench trial ensued. The District Court thereafter

granted A&M’s motion for judgment on partial findings pursuant

to Rule 52(c) of the Federal Rules of Civil Procedure, and entered

final judgment. State Steel now appeals. We will affirm.

I.

A.

A&M operates a composting facility in Lancaster,

Pennsylvania.1 In February 2003, a severe snowstorm caused the

roof of its building to collapse, requiring replacement of the entire

structure. On April 14, 2004, A&M engaged Clark in a contract

(the “Contract”) to fabricate a 465,000-square-foot facility

composed of three steel buildings (collectively, the “Project

Buildings”) to replace the original. Joint Appendix (“JA”) 320-21.

A&M agreed to pay Clark a fixed price of $2,418,476, to be paid

according to the following schedule:

Initial Down Payment Upon

Execution of the Agreement: $90,000

Second Down Payment Seven

Days After Execution of the Agreement: $507,619

Phased Payments Upon Delivery

of Fabricated Buildings According

to Phased Delivery Schedule: $1,820,857

JA 322-23. The Contract did not itemize expenses for project

1

Defendants American Compost Corporation, Solid Waste

Services, Inc., and A&M Composting, Inc. are affiliated entities

doing business as J.P. Mascaro & Sons. We refer only to A&M

herein, although portions of the record that we cite refer to

“Mascaro.”

3

components, but the second payment was to be deposited into a

joint checking account and was specifically “to be used to pay

suppliers of the raw materials necessary for Clark to fabricate the

Project Buildings.” JA 323. Upon delivery of each segment of the

Project Buildings, Clark was to invoice A&M, and A&M was to

satisfy the invoice within seven days. JA 41, 323-24.

The Contract, under which time was of the essence, required

Clark to fabricate the steel materials at its own facility and deliver

them to A&M for assembly. Selected third parties would be

responsible for the following: erecting the buildings, galvanizing

the component steel materials, and supplying the necessary anchor

bolts. JA 40, 322. Clark also represented that it “ha[d] the ability

to secure and ha[d] made the necessary arrangements to secure the

raw materials required for the fabrication of the Project Buildings

. . . .” JA 325. To that end, Clark entered into subcontracts with,

among others, State Steel and EBC, Inc. (“EBC”) to provide the

raw materials. Pursuant to these agreements, EBC was to supply

purlins, roofing, and siding materials, and State Steel was to deliver

shipments of raw steel to Clark’s facility. JA 273, 278, 308-09.

A&M was not a party to these subcontracts.

A&M paid Clark the initial down payment ($90,000) and

thereafter deposited the second down payment ($507,619) into the

joint checking account established for Clark’s suppliers. EBC was

paid from this account a deposit of $110,000 on April 23, 2004. JA

392-93. State Steel was also paid from this account a deposit of

$100,000 on May 7, 2004. JA 337-38, 565-66.

On May 26, 2004, A&M’s General Counsel, William Fox,

sent a letter to State Steel’s President, Adrienne Chizek,2 which

read in relevant part:

Re: Your Contract with Clark Building Systems,

Inc. For Web Materials for Further Processing by

Clark

2

Chizek’s surname is now Berg. For continuity, we refer

only to the surname Chizek.

4

I am General Counsel for Solid Waste Services, Inc.

d/b/a J.P. Mascaro & Sons and its affiliated

companies (“Mascaro”)[,] one of which is A&M

Composting, Inc., the owner of the A&M

Composting facility in Lancaster County,

Pennsylvania.

Mascaro is a large regional company headquartered

in Montgomery County, Pennsylvania, that engages

in the collection, recycling, processing,

transportation, disposal[,] and composting of solid

waste. Mascaro has been in business for 35 years, it

competes successfully with the national waste

companies, it has strong, long-term bonding and

banking relationships[,] and it is rated 5-A-1 by

Dunn & Bradstreet.

Mascaro has contracted with Clark Building

Systems, Inc. to provide a large fabricated steel

building (i.e. approximately 465,000 square feet)

related to the reconstruction of the A&M Compost

facility. Clark has previous experience in providing

this type of building to Mascaro, the last of which

was a 250,000 square foot fabricated building for use

at Mascaro’s Wetzel County Compost facility in

2002.

We understand that Clark has contracted with your

company to provide web materials for the A&M

reconstruction project. We also understand that the

amount of their contract with your company is

approximately $450,000 and that Clark has made a

substantial down payment to your company.

I am writing to advise you that under our contract

with Clark, we make payment to Clark within seven

days of the building material delivery for each

completed phase, without defect, to our site. With

respect to any balance that Clark may owe your

5

company for the web materials, [our] company is

willing, with Clark’s permission, to pay you directly

or by joint check made payable to Clark and your

company within the seven day period, as long as our

payment is credited by Clark against the amount due

under our contract with Clark. It is our

understanding that Clark is agreeable to this

arrangement.

I am providing a copy of this letter to Sol Wansor

and Jeff Smith, the President and Controller of

Clark, and if you have any questions, please feel free

to contact either of them or me.

JA 308-09. Fox sent identical letters to EBC and another

subcontractor with whom Clark had entered into a supply

agreement. JA 309A-D. The letter (the “Fox Letter”) underpins

this dispute.

From May through November of 2004, State Steel delivered

to Clark’s facility a series of steel shipments, and it invoiced Clark

accordingly. JA 42-43, 267. On August 4, 2004, Clark sent a

request to A&M to forward a payment of $90,000 directly to State

Steel for materials for which Clark had not yet paid. JA 568-70.

A&M did so the following day. JA 49, 567. On September 24,

2004, Clark again requested that A&M forward $90,000 to State

Steel for steel that had yet to be paid for, and A&M forwarded the

payment to State Steel on September 27, 2004. JA 49-50, 571-72.

These direct payments did not come from the joint checking

account, and A&M made them with the understanding that its

balance to Clark would be deducted accordingly. JA 49-50, 290.

In all, A&M paid State Steel $280,000. JA 48.

Clark fell behind schedule in delivering the fabricated steel

components to A&M. On September 2, 2004, Fox wrote to Clark’s

President, Sol Wansor, detailing Clark’s “serious failure to adhere

to the delivery and completion schedule” set forth by the Contract.

Supplemental Appendix (“SA”) 8. He explained that A&M was

unable to operate without the new buildings, and that Clark’s delay

jeopardized a $200 million composting contract with a

6

governmental entity. Id. A&M ultimately hired mitigation

subcontractors to complete the work for which Clark had been

responsible under the Contract. JA 335-36; SA 11-15. This

mitigation cost increased the total purchase price by $119,459.22,

and was reflected in a Change Order form. JA 53, 336; SA 15. In

a letter to Wansor dated October 7, 2004, Fox stated: “As a follow

up to earlier correspondences, I have executed your form Change

Order regarding the subcontractors that are now performing a

portion of your work under the above-referenced contract. As

indicated in my earlier letters, we have agreed to pay the

subcontractors directly for the work they do.” JA 335.

Delivery of the fabricated steel components was completed

in January 2005, and the buildings were assembled by March 2005.

JA 55. On July 11, 2005, Wansor wrote to Mascaro about

outstanding balances that A&M purportedly owed to Clark’s

subcontractors. Wansor attached an earlier memorandum written

by Jefferey Smith (Clark’s Controller) indicating that A&M owed

State Steel an additional $214,958.20 and EBC an additional

$117,781.95. JA 347. A&M vigorously denied that it owed

anything more to either of these subcontractors. JA 56-57. Though

it had invoiced Clark for steel materials valued at $489,902.15, it

is undisputed that State Steel received only three payments totaling

$280,000. JA 55. EBC, too, never received full compensation for

the materials that it had supplied. Clark ultimately went out of

business and its assets were sold at a sheriff’s sale. JA 7 n.2.

B.

State Steel and EBC filed this action against A&M and

3

Clark on November 7, 2005, asserting four claims against A&M:

3

Though Wansor and Smith testified at trial, Clark did not

respond to the complaint or attempt to defend itself, and the

District Court entered default judgment against it on December 16,

2008. JA 7 n.2, 29-30 & nn.3-4, 78. Additionally, EBC

voluntarily dismissed its claims against the defendants before the

District Court granted summary judgment, leaving State Steel as

the only remaining plaintiff. JA 6 n.1, 29 n.2. Accordingly, we

7

(1) breach of contract; (2) fraudulent inducement; (3) unjust

enrichment; and (4) an account stated. State Steel alleged that the

Fox Letter constituted an enforceable agreement requiring A&M

to pay directly the outstanding balance on the invoices for the steel

supplied to Clark. Alternatively, it asserted that A&M, via the Fox

Letter, fraudulently induced it to deliver the steel without any intent

to provide full payment. Finally, State Steel claimed that A&M

had been unjustly enriched by accepting the Project Buildings and

that it had an unpaid and overdue account in the amount of

$214,958.20.4

A&M moved for summary judgment on all counts, which

the District Court granted in part and denied in part. With respect

to the breach of contract claim, the District Court determined that

it was “not unreasonable for a person in [State Steel’s] position to

view the letter . . . as an enforceable agreement.” JA 14. However,

the court concluded as a matter of undisputed material fact that

State Steel had not regarded the Fox Letter as an offer to enter into

a binding agreement. Relying on Chizek’s deposition testimony,

the District Court held that State Steel’s outward and objective

manifestations undermined any contractual agreement between

A&M and State Steel. JA 15-16. The District Court also rejected

State Steel’s claim for an account stated because such a claim

requires both parties to have agreed that a sum certain is owed, an

element not satisfied under the undisputed facts. JA 22-23. But

the District Court found genuine issues of material fact underlying

the claims for fraudulent inducement and unjust enrichment, and it

denied summary judgment on those two causes of action. JA 16-

22.

State Steel moved the District Court to reconsider its

disposition of the breach of contract claim. It relied upon an errata

sheet to Chizek’s deposition testimony that had been included as an

exhibit to its original papers opposing A&M’s motion for summary

review only State Steel’s claims against A&M.

4

Evidently $5,056.05 of this sum had actually been paid.

Accordingly, State Steel seeks payment for $209,902.15. See State

Steel Br. at 41 & n.5.

8

judgment. The errata sheet purported to clarify the answers upon

which the District Court had relied in rejecting the claim. JA 282.

Finding it untimely and otherwise noncompliant with Rule 30(e),

the District Court refused to consider the errata sheet and denied

the motion for reconsideration. EBC, Inc. v. Clark Bldg. Sys., No.

05-1549, 2008 U.S. Dist. LEXIS 3728, at *2-6 (W.D. Pa. Jan. 16,

2008). State Steel filed a second motion for reconsideration, which

the District Court denied in a summary order.5

The District Court held a two-day bench trial on the

remaining claims, during which State Steel presented the testimony

of four witnesses: Wansor, Smith, Fox (as an adverse witness), and

Chizek. JA 33-34. During its case-in-chief, State Steel stipulated

to A&M’s offer of two key exhibits into evidence: (1) Joint

Exhibit 25, a spreadsheet summarizing A&M’s total disbursements

to Clark and its subcontractors; and (2) Defendants’ Exhibit 1, a

voluminous set of business records submitted to substantiate Joint

Exhibit 25. JA 64, 246. After State Steel rested its case, A&M

moved for judgment on partial findings pursuant to Rule 52(c), and

State Steel again moved for reconsideration of the breach of

contract claim. On November 13, 2008, the District Court issued

a comprehensive memorandum opinion: (1) denying State Steel’s

motion for reconsideration for the reasons it had previously stated;

and (2) granting A&M’s Rule 52(c) motion in toto. Rejecting the

unjust enrichment claim, the court found that A&M had paid more

than the adjusted Contract price, and therefore held that it would be

inequitable to force A&M to pay, in effect, for the same raw

materials again. JA 60-68. The court also rejected the fraudulent

inducement claim, concluding that State Steel had not proven any

material misrepresentations. JA 68-74. State Steel timely

5

Shortly before trial, State Steel filed alternative motions

pursuant to Rule 54(b) and 28 U.S.C. § 1292(b), requesting that the

District Court either direct the entry of final judgment on the

breach of contract claim or certify an interlocutory appeal. JA 33.

It also requested permission to question Chizek at trial regarding

the breach of contract claim. Id. The District Court denied these

requests as well. EBC, Inc. v. Clark Bldg. Sys., No. 05-1549, 2008

U.S. Dist. LEXIS 21018 (W.D. Pa. Mar. 17, 2008).

9

appealed.6

II.

State Steel argues first that the District Court erred by

granting A&M’s motion for summary judgment on the breach of

contract claim.7 It asserts that by offering to tender direct payments

to it (instead of Clark) upon delivery of the steel, A&M incurred an

unqualified legal obligation to make such payments. A&M,

conversely, argues that the letter was a mere accommodation to pay

the subcontractor in a more convenient manner, but in no way

constituted a binding legal obligation to make direct payments.

We review the District Court’s grant of summary judgment

de novo, using the same standard that it was required to apply.

Brown v. J. Kaz, Inc., 581 F.3d 175, 179 (3d Cir. 2009). A court

reviewing a summary judgment motion must evaluate the evidence

in the light most favorable to the nonmoving party and draw all

reasonable inferences in that party’s favor. Brewer v. Quaker State

Oil Ref. Corp., 72 F.3d 326, 330 (3d Cir. 1995). Summary

judgment is appropriate “only when the record ‘shows that there is

no genuine issue as to any material fact and that the moving party

is entitled to judgment as a matter of law.’” Giles v. Kearney, 571

F.3d 318, 322 (3d Cir. 2009) (quoting Fed. R. Civ. P. 56(c)).

“Facts that could alter the outcome are ‘material facts,’ and

disputes are ‘genuine’ if evidence exists from which a rational

person could conclude that the position of the person with the

burden of proof on the disputed issue is correct.” Clark v. Modern

Group Ltd., 9 F.3d 321, 326 (3d Cir. 1993) (citing Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986)). “In determining whether the

dispute is genuine, the court’s function is not to weigh the evidence

or to determine the truth of the matter . . . .” Am. Eagle Outfitters

v. Lyle & Scott Ltd., 584 F.3d 575, 581 (3d Cir. 2009) (citing

Anderson, 477 U.S. at 247-48).

6

The District Court had jurisdiction under 28 U.S.C. §

1332(a), and we have jurisdiction under 28 U.S.C. § 1291.

7

State Steel does not challenge the District Court’s rejection

of the claim for an account stated and we do not discuss it further.

10

It is undisputed that Pennsylvania law applies. The District

Court focused its analysis on State Steel’s outward manifestations

with respect to the Fox Letter, and so shall we. The relevant test

under Pennsylvania law “for [the] enforceability of an agreement

is whether both parties have manifested an intention to be bound by

its terms and whether the terms are sufficiently definite to be

specifically enforced.” Channel Home Ctrs. v. Grossman, 795 F.2d

291, 298-99 (3d Cir. 1986) (citing Lombardo v. Gasparini

Excavating Co., 123 A.2d 663, 666 (Pa. 1956); Linnet v.

Hitchcock, 471 A.2d 537, 540 (Pa. Super. Ct. 1984)). It is well

established in Pennsylvania that “[i]n ascertaining the intent of the

parties to a contract, it is their outward and objective

manifestations of assent, as opposed to their undisclosed and

subjective intentions, that matter.” Espenshade v. Espenshade, 729

A.2d 1239, 1243 (Pa. Super. Ct. 1999) (citation omitted). State

Steel argues that it “understood the [Fox Letter] to be a promise[]

by [A&M] to pay State Steel for steel which it delivered,” and that

because A&M had a contrary understanding, a genuine issue of

material fact regarding the parties’ intent remains. State Steel Br.

at 24.8

It is true that “when the record contains conflicting evidence

regarding intent, the question of whether the parties formed a

completed contract is one for the trier of fact.” Channel Home

Ctrs., 795 F.2d at 300 n.9 (citing Field v. Golden Triangle Broad.,

Inc., 305 A.2d 689, 691 (Pa. 1973); Yellow Run Coal Co. v.

8

Throughout its appellate brief, State Steel cites testimony

later adduced at trial to support its challenge to the District Court’s

grant of summary judgment. That evidence, of course, was not

before the District Court at the time it addressed the summary

judgment motion, and we may not consider it when reviewing the

court’s decision. See Hildebrandt v. Ill. Dep’t of Natural Res., 347

F.3d 1014, 1040 (7th Cir. 2003) (“In evaluating the propriety of

summary judgment on appeal, we are limited to reviewing what the

district court had before it at the time it granted summary

judgment; such evidence does not include trial testimony.” (citing

Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 242

(4th Cir. 2002))).

11

Alma-Elly-Yv Mines, Ltd., 426 A.2d 1152, 1154 (Pa. Super. Ct.

1981)). The District Court specifically recognized as much, JA 14,

but concluded – based on Chizek’s deposition testimony – that

there was no evidence supporting State Steel’s supposed belief that

the Fox Letter constituted a legally binding agreement. That

deposition testimony, in pertinent part, reads as follows:

Q. Do you know why [the Fox Letter] was sent?

A. Honestly I don’t.

Q. [D]id you indicate or have any conversations

with Clark about your concern about them

paying invoices?

A. I don’t remember that part. We knew that it

had to be up front, so I don’t remember what

– why it came to this, that [A&M] sent it.

...

Q. What was your understanding of that letter?

A. That Mascaro – between Mascaro and Clark,

we would be taken care of and they were

doing the building for a good company.

Q. Did you ever think that as a result of that

letter, that you would be billing any of the

Mascaro entities?

A. No.

Q. Did you ever think from that letter that any of

the Mascaro entities were . . . guaranteeing

payment of your invoices?

A. I don’t know that I really thought about it, it’s

just it was going to come from Clark and they

had a sound contract with Mascaro and

12

everything would be okay.

...

Q. [B]ased upon getting that letter, what was

your understanding of how your invoices

would be paid if and when A&M . . . had paid

the 2.4 million and you still had invoices

outstanding?

A. I never thought about it.

Q. Would you think if [A&M] had a contract

with Clark to pay them 2.4 million for the

whole nine yards, which included your

materials, and that they paid Clark the 2.4

million, that they would be paying you

additional monies for the materials[?]

A. No, I don’t think I would have expected that.

JA 274-75.

We agree with the District Court that “[i]f State Steel

believed that no contract existed as a result of the [Fox Letter] and

its manifested intent to . . . A&M did not demonstrate a belief to

the contrary, then no contract . . . exist[ed].” JA 15-16. We further

agree that Chizek’s testimony removes any genuine issue of

material fact concerning the Fox Letter’s legal import. Chizek

twice admitted at her deposition that she did not know why Fox

wrote the letter, and also conceded that she had never considered

whether the letter was a guarantee. Critically, she admitted that she

would not have expected A&M to be responsible for paying State

Steel if A&M made payments equaling the final Contract price.

Chizek’s admissions regarding her beliefs – and her company’s

failure to conduct itself in a manner inconsistent with those beliefs

– evidence beyond repudiation that State Steel did not objectively

regard the Fox Letter to constitute a binding contract.

State Steel does not seriously dispute that Chizek’s original

13

deposition testimony undermines the existence of a binding

agreement, but argues that the District Court improperly refused to

consider the errata sheet that Chizek executed four months after her

deposition. The errata sheet, the substance of which we reproduce

below, altered the deposition testimony upon which the District

Court relied in granting summary judgment. We will assume,

arguendo, that the propriety of summary judgment on the breach of

contract claim rests on the propriety of refusing to consider

Chizek’s submitted errata.

The District Court’s interpretation of the Federal Rules of

Civil Procedure is a legal issue that we review de novo, but

assuming it has correctly interpreted the rules, its ultimate decision

to ignore the errata sheet is reviewed for abuse of discretion. See

United Auto. Workers Local 259 Soc. Sec. Dep’t v. Metro Auto

Ctr., 501 F.3d 283, 286 (3d Cir. 2007); Hambleton Bros. Lumber

Co. v. Balkin Enters., Inc., 397 F.3d 1217, 1224 nn.4-5 (9th Cir.

2005). This Court has not spoken previously regarding: (1) the

extent to which a party may establish a genuine issue of material

fact by using a deposition errata sheet; and (2) whether and when

a District Court may ignore a noncompliant errata sheet.

Accordingly, we first take the opportunity to address the contours

of the rule governing errata sheets. We then apply the standards we

enunciate.

A.

Rule 30(e) of the Federal Rules of Civil Procedure provides

as follows:

(e) Review by the Witness; Changes.

(1) Review; Statement of Changes. On request by

the deponent or a party before the deposition is

completed, the deponent must be allowed 30 days

after being notified by the officer that the transcript

14

or recording [9] is available in which:

(A) to review the transcript or

recording; and

(B) if there are changes in form or

substance, to sign a statement listing

the changes and the reasons for

making them.

(2) Changes Indicated in the Office’s Certificate.

The officer must note in the certificate prescribed by

Rule 30(f)(1)[10] whether a review was requested and,

if so, must attach any changes the deponent makes

during the 30-day period.

Fed. R. Civ. P. 30(e). The rule contemplates a number of

procedural requirements to be satisfied by both the party/deponent

and the “officer” – assumed herein to be the court reporter, see Fed.

R. Civ. P. 28 – before changes to deposition testimony may be

permitted. Upon satisfaction of these procedural hurdles, the rule

then envisions “changes in form or substance.” We address the

procedural and substantive aspects of the rule in turn.11

9

For purposes of this opinion, we will refer to the

“transcript or recording” as the “deposition transcript.”

10

Rule 30(f)(1) governs the certification and delivery of the

deposition transcript by the court reporter. Relevant here, the rule

requires the court reporter to certify in writing that the deponent

was duly sworn and that the transcript accurately depicts the

deponent’s testimony. Fed. R. Civ. P. 30(f)(1). Further, the court

reporter’s certification must accompany the deposition transcript,

and the transcript must be delivered promptly to the attorney who

arranged for the transcript’s production. Id.

11

Rule 30 was amended in 2007 as part of the general

restyling of the Federal Rules of Civil Procedure. “These changes

[we]re intended to be stylistic only.” Fed. R. Civ. P. 30 advisory

committee’s note. Accordingly, the pre-amendment cases cited

15

1.

The procedural requirements of Rule 30(e) are clear and

mandatory. As a threshold, Rule 30(e)(1) requires the party or

deponent to request review of the deposition before the deposition

itself is completed. See Hambleton Bros., 397 F.3d at 1226

(“[Rule] 30(e) . . . requires the deponent or the interested party to

request review of the deposition in order to make corrections.”);

Rios v. Bigler, 67 F.3d 1543, 1551-52 (10th Cir. 1995) (“Under the

plain language of Rule 30(e) . . . the deponent or party must request

review of the deposition before its completion. . . . [This procedure

is] an absolute prerequisite to amending or correcting a deposition

under Rule 30(e).”); Agrizap, Inc. v. Woodstream Corp., 232

F.R.D. 491, 494 (E.D. Pa. 2006) (barring witness from changing

deposition transcript for failure to request review before

completion of the deposition). Rule 30(e)(2) also requires the court

reporter to certify that review was in fact requested. Without such

a certification, a court cannot determine whether the threshold

requirement has been satisfied. See Rios, 67 F.3d at 1552;

Blackthorne v. Posner, 883 F. Supp. 1443, 1454 n.16 (D. Or.

1995).

“If the party or deponent [has] properly request[ed] review,

[he or she] may submit changes to [the] deposition within thirty

days after being notified by the officer that the transcript is

available for review.” Rios, 67 F.3d at 1552; accord Agrizap, 232

F.R.D. at 492-94; Griswold v. Fresenius USA, Inc., 978 F. Supp.

718, 722 (N.D. Ohio 1997). We emphasize that Rule 30(e)’s

thirty-day clock begins to run when the party is notified by the

court reporter that transcript is available for review, not when the

party or deponent physically receives the transcript from the court

reporter. See Hambleton Bros., 397 F.3d at 1224 (“[Rule] 30(e)

states that the thirty-day correction clock begins upon notification

of availability, not possession.”); Welsh v. R.W. Bradford Transp.,

231 F.R.D. 297, 298-99 (N.D. Ill. 2005) (“At least part of Rule 30

could not be more straightforward: a deponent has 30 days after

notification by the court reporter to review the deposition transcript

herein apply with equal force to the amended rule.

16

and to sign a statement setting forth any changes and the reasons

for those changes.” (emphasis in original)); Holland v. Cedar Creek

Mining, Inc., 198 F.R.D. 651, 653 (S.D. W. Va. 2001) (“[T]he 30

day period begins on the date that the deponent receives notice of

the availability of the transcript from the court reporter.”). Courts

are entitled to enforce Rule 30(e)’s time limit strictly and strike

untimely errata. See Holland, 198 F.R.D. at 653 (“This court, like

most courts, will insist on strict adherence to the technical

requirements of Rule 30(e).”).12

Rule 30(e)’s final procedural hurdle requires the party or

deponent seeking to change a deposition transcript to include with

the proposed changes a statement of reasons for making them. As

the Court of Appeals for the Ninth Circuit has explained:

A statement of reasons explaining corrections is an

important component of errata submitted pursuant to

[Rule] 30(e), because the statement permits an

assessment concerning whether the alterations have

a legitimate purpose. . . . The absence of any stated

reasons for the changes supports the magistrate

judge’s concern that the “corrections” were not

corrections at all, but rather purposeful rewrites

tailored to manufacture an issue of material fact . . .

and to avoid a summary judgment in [the

defendant’s] favor.

12

Note, however, the phrasing of the rule – it provides that

a party or deponent “must be allowed 30 days” to submit errata (the

rule formerly stated that the party or deponent “shall have 30

days”). Fed. R. Civ. P. 30(e)(1). The natural language of the rule,

then, does not preclude courts from allowing more time upon a

prior request or forgiving minor untimeliness after the fact.

Instead, the rule grants courts discretion to do so under appropriate

circumstances. While courts retain the authority to enforce the

amendment window strictly, we leave the matter to their sound

discretion to determine if and when extension of the time limit is

appropriate.

17

Hambleton Bros., 397 F.3d at 1224-25; see also Hawthorne

Partners v. AT&T Techs., Inc., 831 F. Supp. 1398, 1406 (N.D. Ill.

1993) (“[Rule] 30(e) allows a witness to make . . . ‘changes in form

or substance’ to a deposition transcript but requires a statement of

reasons for making them.”).

Courts have found that the failure to provide a statement of

reasons alone suffices to strike a proposed change. See, e.g.,

Holland, 198 F.R.D. at 653 (“The witness is also plainly bound by

the rule to state specific reasons for each change.”); Duff v.

Lobdell-Emery Mfg. Co., 926 F. Supp. 799, 804 (N.D. Ind. 1996)

(“The rule is not onerous . . . but there must be a reason for every

change.” (quotation marks omitted)). We agree with these courts.

If the party or deponent proffering changes in the form or

substance of a deposition transcript fails to state the reasons for the

changes, the reviewing court may appropriately strike the errata

sheet.13

2.

Upon procedural compliance with Rule 30(e), the court will

determine the effect of the errata sheet on the deposition transcript.

The courts are divided on the extent to which a party or deponent

may change substantively the deposition transcript after review.

Some courts have determined that the rule places no limitation on

changes. Therefore, according to these courts, substantive changes

must be permitted, even if they contradict the original answers or

the reasons for making the changes are unpersuasive.14 To protect

13

While a party need only provide some reason to clear Rule

30(e)’s procedural hurdle, courts – as discussed infra – may

consider unsatisfactory or conclusory reasons when addressing

whether contradictory errata should be permitted as a substantive

matter.

14

See, e.g., Podell v. Citicorp Diners Club, Inc., 112 F.3d

98, 103 (2d Cir. 1997); Reilly v. TXU Corp., 230 F.R.D. 486, 489-

92 (N.D. Tex. 2005); Foutz v. Town of Vinton, 211 F.R.D. 293,

295 (W.D. Va. 2002); DeLoach v. Phillip Morris Cos., Inc., 206

F.R.D. 568, 572-73 (M.D.N.C. 2002);; Elwell v. Conair, Inc., 145

18

against abuse, these courts emphasize that the earlier testimony is

not expunged from the record, thus subjecting the deponent to

cross-examination and impeachment at trial with respect to the

contradictory testimony. See, e.g., Reilly, 230 F.R.D. at 490-91;

Foutz, 211 F.R.D. at 295, Elwell, 145 F. Supp. 2d at 87. Some

courts also permit the deposing party to reopen the deposition (with

costs to be borne by the amending party) to question the deponent

on the alteration. See Reilly, 230 F.R.D. at 490.

Other courts have read Rule 30(e) more narrowly. These

courts have determined that the rule permits changes of substance

only to the extent that the proposed alteration is consistent with the

deponent’s testimony. The champion of this view is Greenway v.

International Paper Co., in which the court explained:

The purpose of Rule 30(e) is obvious. Should the

reporter make a substantive error, i.e., he reported

“yes” but I said “no,” or a formal error, i.e., he

reported the name to be “Lawrence Smith” but the

proper name is “Laurence Smith,” then corrections

by the deponent would be in order. The Rule cannot

be interpreted to allow one to alter what was said

under oath. If that were the case, one could merely

answer the questions with no thought at all then

return home and plan artful responses. Depositions

differ from interrogatories in that regard. A

deposition is not a take home examination.

144 F.R.D. 322, 325 (W.D. La. 1992).15

F. Supp. 2d 79, 86-87 (D. Me. 2001); Holland, 198 F.R.D. at 653;

Titanium Metals Corp. v. Elkem Mgmt., Inc., 191 F.R.D. 468, 472

(W.D. Pa. 1998); United States ex rel. Burch v. Piqua Eng’g, Inc.,

152 F.R.D. 565, 566-67 (S.D. Ohio 1993); Sanford v. CBS, Inc.,

594 F. Supp. 713, 714-15 (N.D. Ill. 1984); Lugtig v. Thomas, 89

F.R.D. 639, 641 (N.D. Ill. 1981); Allen & Co. v. Occidental

Petroleum Corp., 49 F.R.D. 337, 340 (S.D.N.Y. 1970).

15

See also Hambleton Bros., 397 F.3d at 1225; Garcia v.

Pueblo Country Club, 299 F.3d 1233, 1242 n.5 (10th Cir. 2002);

19

We are called upon to interpret Rule 30(e) in the summary

judgment context. We believe that a flexible approach – consistent

with our prior analogous jurisprudence – is appropriate. As a

general proposition, a party may not generate from whole cloth a

genuine issue of material fact (or eliminate the same) simply by re-

tailoring sworn deposition testimony to his or her satisfaction. See

Hambleton Bros., 397 F.3d at 1225 (“While the language of [Rule]

30(e) permits corrections ‘in form or substance,’ this permission

does not properly include changes offered solely to create a

material factual dispute in a tactical attempt to evade an

unfavorable summary judgment.” (citing Combs v. Rockwell Int’l

Corp., 927 F.2d 486, 488-89 (9th Cir. 1991))); Garcia v. Pueblo

Country Club, 299 F.3d 1233, 1242 n.5 (10th Cir. 2002) (finding

summary judgment inappropriate and rejecting defense counsel’s

attempt to eliminate genuine issues of material fact through

changes in a deposition transcript, admonishing “[w]e do not

condone counsel’s allowing for material changes to deposition

testimony and certainly do not approve of the use of such altered

testimony that is controverted by the original testimony.”); Thorn

v. Sundstrand Aerospace Corp., 207 F.3d 383, 389 (7th Cir. 2000)

(affirming the grant of summary judgment, and concluding that “a

change of substance which actually contradicts the transcript is

impermissible unless it can plausibly be represented as the

correction of an error in transcription, such as dropping a ‘not’”).

Where proposed changes squarely contradict earlier

testimony materially bearing on the case, preserving the original

testimony or reopening the deposition may often prove to be

Thorn v. Sundstrand Aerospace Corp., 207 F.3d 383, 389 (7th Cir.

2000); Wyeth v. Lupin Ltd., 252 F.R.D. 295, 297 (D. Md. 2008);

Adams v. Allied Sec. Holdings, 236 F.R.D. 651, 652 (C.D. Cal.

2006); Wigg v. Sioux Falls Sch. Dist. 49-5, 274 F. Supp. 2d 1084,

1090-91 (D.S.D. 2003); Summerhouse v. HCA Health Servs. of

Kan., 216 F.R.D. 502, 504-08 (D. Kan. 2003); Coleman v. S. Pac.

Transp. Co., 997 F. Supp. 1197, 1201 (D. Ariz. 1998); S.E.C. v.

Parkersburg Wireless LLC, 156 F.R.D. 529, 535-36 (D.D.C. 1994);

Rios v. Welch, 856 F. Supp. 1499, 1502 (D. Kan. 1994); Barlow v.

Esselte Pendaflex Corp., 111 F.R.D. 404, 406 (M.D.N.C. 1986).

20

insufficient remedies. Moreover, requiring trial judges in all cases

to permit contradictory alterations could risk the defeat of summary

judgment in a large swath of cases for which a Rule 56 disposition

otherwise would be appropriate. Preservation of the original

testimony for impeachment at trial serves as cold comfort to the

party that should have prevailed at summary judgment. And

reopening the deposition before disposition might not be a

sufficient remedy, for the deponent who has reviewed his original

testimony and settled on an opposite answer may prove

unimpeachable.

We therefore hold that when reviewing a motion for

summary judgment, a district court does not abuse its discretion

under Rule 30(e) when it refuses to consider proposed substantive

changes that materially contradict prior deposition testimony, if the

party proffering the changes fails to provide sufficient justification.

At the same time, we emphasize that courts may, in their discretion,

choose to allow contradictory changes (and implement the remedial

measures discussed above) as the circumstances may warrant.

Our “sham affidavit” cases – which permit courts to ignore

affidavits that contradict earlier deposition testimony without

adequate explanation – provide useful guidance. See Hambleton

Bros., 397 F.3d at 1225 (applying sham affidavit cases in analyzing

Rule 30(e) issue); Burns v. Bd. of County Comm’rs, 330 F.3d

1275, 1281-82 (10th Cir. 2003) (same); Thorn, 207 F.3d at 389

(same). In Martin v. Merrell Dow Pharmaceuticals, Inc., we

affirmed a district court’s refusal to consider a “squarely

contradict[ory]” affidavit filed after a summary judgment motion

had been filed. 851 F.2d 703, 705-06 (3d Cir. 1988). We

explained:

We recognize that there are situations in which

sworn testimony can quite properly be corrected by

a subsequent affidavit. Where the witness was

confused at the earlier deposition or for some other

reason misspoke, the subsequent correcting or

clarifying affidavit may be sufficient to create a

material dispute of fact. The case before us,

however, does not present such a situation. . . .

21

Plaintiff’s affidavit, submitted only after she faced

almost certain defeat in summary judgment, flatly

contradicted no less than eight of her prior sworn

statements[.] . . . [T]he objectives of summary

judgment would be seriously impaired if the district

court were not free to disregard the conflicting

affidavit. . . . When, as in the present case, the

affiant was carefully questioned on the issue, had

access to the relevant information at that time, and

provided no satisfactory explanation for the later

contradiction, the courts of appeals are in agreement

that the subsequent affidavit does not create a

genuine issue of material fact.

Id. (emphasis in original)16 ; see also Baer v. Chase, 392 F.3d 609,

624 (3d Cir. 2004) (“[A] party may not create a material issue of

fact to defeat summary judgment by filing an affidavit disputing his

or her own sworn testimony without demonstrating a plausible

explanation for the conflict.” (citing Hackman v. Valley Fair, 932

F.2d 239, 241 (3d Cir. 1991))); Franks v. Nimmo, 796 F.2d 1230,

1237 (10th Cir. 1986); Perma Research & Dev. Co. v. Singer Co.,

410 F.2d 572, 578 (2d Cir. 1969). Also pertinent to our analysis in

Martin was the importance of the questioning on which the plaintiff

had altered her testimony and the questionable timing of the

affidavit. 851 F.2d at 705. These considerations, of course, must

be taken into account with all of the surrounding circumstances.

See Baer, 392 F.3d at 624.

Recently, in Jiminez v. All American Rathskeller, Inc., we

16

While we emphasized the absence of any explanation for

the change in testimony, we did not purport to allow in all cases the

simple expedient of claiming confusion to legitimate a proposed

change. Indeed, we stated that the affiant must provide a

“satisfactory explanation for the later contradiction.” Martin, 851

F.2d at 706 (emphasis added). Thus, courts are free to, and should,

review the sufficiency of the stated reasons for submitting an errata

sheet, as well as the surrounding circumstances, in determining

whether contradictory changes should be permitted.

22

reaffirmed the sham affidavit doctrine’s “continued vitality and

importance”:

A sham affidavit is a contradictory affidavit that

indicates only that the affiant cannot maintain a

consistent story or is willing to offer a statement

solely for the purpose of defeating summary

judgment. A sham affidavit cannot raise a genuine

issue of fact because it is merely a variance from

earlier deposition testimony, and therefore no

reasonable jury could rely on it to find for the

nonmovant. . . . [I]f it is clear that an affidavit is

offered solely for the purpose of defeating summary

judgment, it is proper for the trial judge to conclude

that no reasonable jury could accord that affidavit

evidentiary weight and that summary judgment is

appropriate.

503 F.3d 247, 253 (3d Cir. 2007) (citations omitted). We explained

that while some courts have prescribed a formulaic application to

the sham affidavit doctrine, we “have adopted a more flexible

approach.” Id. at 254 (citing Baer, 392 F.3d at 624; Hackman, 932

F.2d at 241; Martin, 851 F.2d at 705-06). In other words, “not all

contradictory affidavits are necessarily shams,” and “‘when there

is independent evidence in the record to bolster an otherwise

questionable affidavit, courts generally have refused to disregard

the affidavit.’” Id. (quoting Baer, 392 F.3d at 625).17

17

Moreover, we have gone so far as to reverse a district

court, in part for refusing to consider an affidavit that did not in

fact contradict the earlier deposition testimony. See Farrell v.

Planters Lifesavers Co., 206 F.3d 271, 276 n.3, 284 (3d Cir. 2000);

see also Baer, 392 F.3d at 624 (“[I]t is clear that merely because

there is a discrepancy between deposition testimony and the

deponent’s later affidavit a district court is not required in all cases

to disregard the affidavit.”); Kennett-Murray Corp. v. Bone, 622

F.2d 887, 893 (5th Cir. 1980) (“[A] district court . . . cannot

disregard a party’s affidavit merely because it conflicts to some

degree with an earlier deposition.”).

23

We see no principled reason to distinguish between

affidavits and errata sheets in this context, and we conclude that the

proper analysis for each is the same. Requiring consideration of

contradictory errata in all cases, no less so than contradictory

affidavits, “would greatly diminish the utility of summary judgment

as a procedure for screening out sham issues of fact.” Perma

Research, 410 F.2d at 578. But nothing in the foregoing requires

courts to strike contradictory errata if sufficiently persuasive

reasons are given, if the proposed amendments truly reflect the

deponent’s original testimony, or if other circumstances satisfy the

court that amendment should be permitted. Each case will present

fact-sensitive circumstances, and we are disinclined to prescribe a

one-size-fits-all rule. Our discussion above, however, along with

our existing sham-affidavit jurisprudence, should provide needed

guidance for district courts to use hereafter.

B.

We now apply these standards to Chizek’s handwritten

errata sheet. It is undisputed that State Steel adequately requested

review before the close of the deposition. In addition, the court

reporter certified “that the inspection, reading[,] and signing of

[the] deposition were NOT waived by counsel for the respective

parties and by the witness.” JA 281 (capitalization in original).

Finally, we note that Chizek provided a reason, although

perfunctory, for the errata: “After reading the transcript, I realized

that I was confused and misunderstood some of the questions.” JA

282.

Chizek and State Steel’s compliance with Rule 30(e),

however, terminates there. The District Court held that the errata

sheet was untimely. We agree, and we therefore find no abuse of

discretion in the court’s refusal to consider it. Chizek was deposed

on December 13, 2006. The court reporter certified the original

transcript and provided notice of its availability to State Steel’s

counsel on January 15, 2007. JA 281, 283. Thus, the deadline to

amend was February 14, 2007.

Chizek purportedly executed the errata sheet on March 12,

2007, twenty-six days after the deadline, and defense counsel never

24

received it for attachment to the original transcript. JA 282; SA 2-

3. State Steel revealed the errata sheet for the first time as an

exhibit to its opposition to A&M’s motion for summary judgment,

three months after the amendment window had closed.18

State Steel argues that it did not receive the original

transcript until February 20 or 21, 2007 due to a payment issue with

the transcription company. State Steel Reply Br. at 5. But as we

have explained, the thirty-day time limit runs from the date the

court reporter provides notice of the transcript’s availability, not

from the date when the transcript is physically received. The

District Court did not abuse its discretion in requiring strict

adherence to the time limit, payment issues notwithstanding. See

Del. Valley Floral Group, Inc. v. Shaw Rose Nets, LLC, 597 F.3d

1374, 1380-81 (Fed. Cir. 2010) (“[The appellant] did not attempt

to submit an errata sheet to make substantive changes to his

unequivocal testimony until after the thirty days permitted under

Rule 30(e) . . . . Under the circumstances here, [he] has failed to

demonstrate that the district court abused its discretion by

excluding his errata sheet.”).

Even if State Steel had complied with the procedural

requirements of Rule 30(e), we would still find no error in the

18

The District Court also rejected the errata sheet because

it was not properly filed with the court, provided to the court

reporter, or disclosed to A&M’s counsel. See EBC, Inc. v. Clark

Bldg. Sys., No. 05-1549, Dkt. Entry # 81 (W.D. Pa. Feb. 5, 2008).

State Steel argues, however, that Chizek did indeed return the

errata sheet to the court reporter, but that the court reporter never

attached it to the original transcript. State Steel filed an affidavit

of counsel attesting to that fact in its second motion for

reconsideration. A&M, in response, filed an affidavit of the court

reporter attesting that neither she nor her company ever received

the errata sheet. We are left to wonder why State Steel waited to

submit counsel’s affidavit until its second reconsideration motion.

In any event, even according to counsel’s own affidavit, Chizek

forwarded the errata sheet to the court reporter after the thirty-day

amendment window had closed, making it untimely still.

25

District Court’s refusal to consider the errata sheet. When asked in

her deposition whether she knew why the Fox Letter had been sent,

Chizek answered, “Honestly I don’t.” JA 274. The errata sheet

stated quite the opposite: “Yes – because State Steel Supply, Inc.

was not comfortable with extending that much credit to Clark Bldg.

That is why we required the $100,000 check up front. We

discussed that with Clark from the beginning.” JA 282. When

asked whether she thought the Fox Letter was guaranteeing

payment of State Steel’s invoices, Chizek answered, “I don’t know

that I really thought about it . . . .” JA 274. The errata sheet,

however, tells a different story: “Yes – I would take the letter to be

a guarantee of payment.” JA 282.19

These contradictory amendments cannot establish a genuine

issue of material fact where the original testimony did not.

Chizek’s answers were central to the contractual analysis, and were

in response to careful and repeated questioning. We also find no

record support for Chizek’s conclusory explanation that she

realized, upon review, that she had been confused by the questions.

The only corroborative evidence to which State Steel points is

Chizek’s later trial testimony, which was consistent with her

amended answers. We do not consider this evidence, see supra

note 8, but find it unsurprising that after review of her damaging

deposition testimony, Chizek settled on consistent and,

incidentally, helpful answers. Given all of the circumstances under

which the errata sheet was revealed, the District Court could have

excluded the contradictory errata as a substantive matter.

* * *

We conclude that the District Court did not abuse its

discretion in refusing to consider Chizek’s untimely and

contradictory errata sheet. On the evidence before it, therefore, the

District Court correctly granted summary judgment on the breach

of contract claim and denied State Steel’s motions for

19

Chizek’s other two amended answers are fairly consistent

with her original testimony, but do refer to a “guarantee” that did

not appear in her original testimony.

26

reconsideration.

III.

We turn to the claims for unjust enrichment and fraudulent

inducement, the subjects of the bench trial. State Steel argues that

the District Court erred by granting A&M’s motion for judgment

on partial findings pursuant to Rule 52(c). That rule provides:

If a party has been fully heard on an issue during a

nonjury trial and the court finds against the party on

that issue, the court may enter judgment against the

party on a claim or defense that, under the

controlling law, can be maintained or defeated only

with a favorable finding on that issue. The court

may, however, decline to render any judgment until

the close of the evidence. A judgment on partial

findings must be supported by findings of fact and

conclusions of law as required by Rule 52(a).

Fed. R. Civ. P. 52(c). The rule’s objective is to “conserve[] time

and resources by making it unnecessary for the court to hear

evidence on additional facts when the result would not be different

even if those additional facts were established.” 9 James Wm.

Moore et al., Moore’s Federal Practice, § 52.50[2] (3d ed. 2010).20

A court may grant a Rule 52(c) motion made by either party

or may grant judgment sua sponte at any time during a bench trial,

20

Subdivision (c) was added to Rule 52 in 1991. It replaced

a portion of Rule 41(b), which previously permitted a court to enter

judgment against a plaintiff at the close of his or her case-in-chief

if he or she failed to meet the applicable burden of proof. See Fed.

R. Civ. P. 52(c) advisory committee’s note. Thus, Rule 52(c)

operates more broadly than did its predecessor, because courts may

now make partial findings on any claim or defense, of any party, at

any time. Nonetheless, pre-1991 cases interpreting Rule 41(b)

continue to provide guidance. See Fechter v. Conn. Gen. Life Ins.

Co., 800 F. Supp. 182, 196 (E.D. Pa. 1992).

27

so long as the party against whom judgment is to be rendered has

been “fully heard” with respect to an issue essential to that party’s

case. As a result, the court need not wait until that party rests its

case-in-chief to enter judgment pursuant to Rule 52(c). See N.Y.

Susquehanna & W. Ry. Corp. v. Jackson, 500 F.3d 238, 246 n.6

(3d Cir. 2007) (“[T]he Federal Rules of Civil Procedure . . . allow

judgment after partial findings against a party that has been fully

heard on the relevant issue.”); Feliciano v. Rullan, 378 F.3d 42, 59

(1st Cir. 2004) (“When a party has finished presenting evidence [as

to a particular issue] and that evidence is deemed by the trier

insufficient to sustain the party’s position, the court need not waste

time, but, rather, may call a halt to the proceedings and enter

judgment accordingly.”); Granite States Ins. Co. v. Smart Modular

Techs., Inc., 76 F.3d 1023, 1031 (9th Cir. 1996) (“[T]he rule

‘authorizes the court to enter judgment at any time that it can

appropriately make a dispositive finding of fact on the evidence.’”

(quoting Fed. R. Civ. P. 52(c) advisory committee’s note)).21 Of

course, the court may opt to reserve judgment until all the evidence

is in or until the close of the non-movant’s case-in-chief. See Int’l

Union of Operating Eng’rs, Local Union 103 v. Ind. Constr. Corp.,

13 F.3d 253, 257 (7th Cir. 1994) (“[I]t is within the trial court’s

sound discretion to decline rendering judgment until hearing all of

the evidence.”).

In considering whether to grant judgment under Rule 52(c),

the district court applies the same standard of proof and weighs the

evidence as it would at the conclusion of the trial. See Emerson

Elec. Co. v. Farmer, 427 F.2d 1082, 1086 (5th Cir. 1970); Falter

v. Veterans Admin., 632 F. Supp. 196, 200 (D.N.J. 1986).

21

The requirement that a party must first be “fully heard”

does not, however, “amount to a right to introduce every shred of

evidence that a party wishes, without regard to the probative value

of that evidence.” First Va. Banks, Inc. v. BP Exploration & Oil,

Inc., 206 F.3d 404, 407 (4th Cir. 2000). In this respect, it is within

the discretion of the trial court to enter a judgment on partial

findings even though a party has represented that it can adduce

further evidence, if under the circumstances, the court determines

that the evidence will have little or no probative value. See id.

28

Accordingly, the court does not view the evidence through a

particular lens or draw inferences favorable to either party. See

Ritchie v. United States, 451 F.3d 1019, 1023 (9th Cir. 2006);

Giant Eagle, Inc. v. Fed. Ins. Co., 884 F. Supp. 979, 982 (W.D. Pa.

1995). The district court should also make determinations of

witness credibility where appropriate.22 See Parker v. Long Beach

Mortgage Co., 534 F. Supp. 2d 528, 535 (E.D. Pa. 2008); Falter,

632 F. Supp. at 200. Finally, if the court enters judgment under

Rule 52(c), it must make findings of fact and conclusions of law

pursuant to Rule 52(a).

We review the district court’s factual findings for clear error

and its legal conclusions de novo. See Rego, 181 F.3d at 400. For

a finding to be clearly erroneous, we must be left with the definite

and firm conviction that a mistake has been committed. Gordon v.

Lewistown Hosp., 423 F.3d 184, 201 (3d Cir. 2005). We will not

reverse “[i]f the district court’s account of the evidence is plausible

in light of the record viewed in its entirety” even if we would have

weighed that evidence differently. Anderson v. City of Bessemer

City, 470 U.S. 564, 573-74 (1985). “[W]hen a trial judge’s finding

is based on his decision to credit the testimony of one of two or

more witnesses, each of whom has told a coherent and facially

plausible story that is not contradicted by extrinsic evidence, that

finding, if not internally inconsistent, can virtually never be clear

error.” Id. at 575; accord MacDraw, Inc. v. CIT Group Equip. Fin.,

Inc., 157 F.3d 956, 962 (2d Cir. 1998).

A.

State Steel argues that A&M was unjustly enriched by

accepting assembly of the Project Buildings (containing the raw

steel) without providing full compensation. To prevail on an unjust

22

In these respects, judgments on partial findings differ

qualitatively from judgments as a matter of law under Rule 50(a).

See Rego v. ARC Water Treatment Co. of Pa., 181 F.3d 396, 400

(3d Cir. 1999); Fed. R. Civ. P. 52(c) advisory committee’s note

(“The standards that govern judgment as a matter of law in a jury

case have no bearing on a decision under Rule 52(c).”).

29

enrichment claim in Pennsylvania, a plaintiff must demonstrate the

following elements: (1) a benefit conferred on the defendant by the

plaintiff; (2) appreciation of such benefit by the defendant; and (3)

acceptance and retention of such benefit under circumstances such

that it would be inequitable for the defendant to retain the benefit

without payment to the plaintiff. AmeriPro Search, Inc. v. Fleming

Steel Co., 787 A.2d 988, 991 (Pa. Super. Ct. 2001); see also

Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 447 (3d

Cir. 2000). “The most significant element of the doctrine is

whether the enrichment of the defendant is unjust; the doctrine

does not apply simply because the defendant may have benefited

as a result of the actions of the plaintiff.” AmeriPro, 787 A.2d at

991. Instead, “a claimant must show that the party against whom

recovery is sought either wrongfully secured or passively received

a benefit that . . . would be unconscionable for her to retain.”

Sovereign Bank v. BJ’s Wholesale Club, Inc., 533 F.3d 162, 180

(3d Cir. 2008) (quoting Torchia v. Torchia, 499 A.2d 581, 582 (Pa.

Super. Ct. 1985)). In this case, A&M argues only that the third

element has not been satisfied, and we proceed directly to it.

Relying on Joint Exhibit 25 and Defendants’ Exhibit 1, the

District Court found as fact that A&M had disbursed a total of

$2,752,329.00 to the various parties providing services and

materials under the Contract. JA 54, 63-64. Comparing that figure

to the adjusted Contract price of $2,537,935.22, the District Court

found that A&M had made payment in excess of its contractual

obligation. JA 64-65. Citing Meyers Plumbing & Heating Supply

Co. v. West End Federal Savings & Loan Ass’n, 498 A.2d 966 (Pa.

Super. Ct. 1985), the court then held that since A&M had made

such excess payments, it could not have been “unjustly” enriched.

In the District Court’s words, requiring A&M to “pick up Clark’s

tab and pay twice for the same goods” would itself be an

inequitable result. JA 68.

In Meyers, a subcontractor brought suit against two owners

and their general contractor when the owners discontinued payment

to the general contractor due to a contractual dispute. 498 A.2d at

967. As is relevant here, the subcontractor had sold to the general

contractor, but had not yet been paid for, certain plumbing and

heating materials that were then provided to the owners. Id. The

30

Superior Court affirmed the trial court’s grant of summary

judgment with respect to the subcontractor’s unjust enrichment

claim against the owners, because the owners had already disbursed

payments totaling 96.5% of the original Contract price. Id. at 969.

Under these circumstances, the Superior Court held that the benefit

conferred was not unjust: “[T]o require [the owners] to pay [the

subcontractor] in this action would obligate them to pay for the

same items twice. As a result of the money having already been

paid once, it can hardly be said that the owners’ ‘enrichment’ from

the plumbing and heating materials is unjust.” Id.

State Steel does not challenge the District Court’s legal

analysis or its reliance on Meyers, with which we entirely agree.

It instead attacks the key factual finding underlying the analysis:

that A&M paid in the aggregate more than the adjusted Contract

price. State Steel complains that by granting the Rule 52(c)

motion, the District Court did not afford it an opportunity to

challenge Defendants’ Exhibit 1. Specifically, State Steel claims

that it acquiesced to the exhibit’s admission “only as to

authenticity,” but that due to the Rule 52(c) motion, it never had the

opportunity to cross-examine A&M’s witnesses on the accuracy of

that evidence. State Steel Reply Br. at 8. Because Defendants’

Exhibit 1 “does not contain copies of cancelled checks or bank

records,” it says, “the documents which purport to represent

payment are nothing more than unsubstantiated records of

[A&M].” State Steel Br. at 34. Accordingly, State Steel argues

that “the District Court committed reversible error when it granted

[A&M’s Rule 52(c) motion] and did not require [A&M] to present

evidence or testimony regarding State Steel’s claims . . . .” State

Steel Reply Br. at 1-2. We disagree.

We do not understand State Steel to argue that it was not

“fully heard” on its claim for unjust enrichment, rendering a Rule

52(c) disposition unavailable.23 Instead, we understand it to

23

If that is its contention, we reject it. Having rested its

case, State Steel was heard fully on its two remaining causes of

action. State Steel’s tactical decision to permit the admission of

A&M’s exhibits without objection, and its failure to adduce

31

challenge the District Court’s key factual finding as clearly

erroneous because A&M did not present testimony corroborating

Joint Exhibit 25 and Defendant’s Exhibit 1. This, it says,

precluded it from cross-examining A&M’s witnesses in the hopes

of undermining the reliability of the exhibits. Unapparent to us,

however, is any reason why A&M would shoulder an affirmative

burden to introduce testimony for the sole purpose of allowing

State Steel an opportunity to deconstruct the documentary

evidence. To the contrary, Rule 52 and the Supreme Court instruct

us to review factual findings for clear error, no matter the character

of the evidence cited in support:

If the district court’s account of the evidence is

plausible in light of the record viewed in its entirety,

the court of appeals may not reverse it even though

convinced that had it been sitting as the trier of fact,

it would have weighed the evidence differently. . . .

This is so even when the district court’s findings do

not rest on credibility determinations, but are based

instead on physical or documentary evidence or

inferences from other facts. . . . Rule 52(a) does not

make exceptions or purport to exclude certain

categories of factual findings from the obligation of

a court of appeals to accept a district court’s findings

unless clearly erroneous.

Bessemer City, 470 U.S. at 573-74 (quotation marks and citations

omitted); see also Fed. R. Civ. P. 52(a)(6) (prescribing clear-error

review “whether based on oral or other evidence”).

The burdens of production and persuasion rested entirely

with State Steel to establish its claim, see Torchia, 499 A.2d at 582,

and therefore A&M need not have presented any evidence at all.

If State Steel desired to examine A&M’s employees with respect

to payments allegedly made, it should have called those witnesses

additional testimony enabling it to challenge that evidence, cannot

be ascribed as the failure of the District Court to ensure that it had

been “fully heard.”

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during its case-in-chief (as it did with Fox 24 ). Alternatively, if it

was ill-prepared to challenge the documentary evidence using the

testimony of the witnesses that it did call, it should not have

stipulated to admission of the documents during its case-in-chief.

Either way, State Steel cannot now attack the District Court’s

factual findings as a product of the court’s “failure” to force A&M

to proffer unnecessary testimony. We find neither an abuse of

discretion in the District Court’s reliance on the documents nor

clear error in its finding that A&M disbursed more than the

Contract price. We will affirm its rejection of the unjust

enrichment claim.25

B.

Finally, State Steel challenges the District Court’s judgment,

again made on partial findings, against its claim for fraudulent

inducement. In Pennsylvania, fraud-based claims of this sort

require proof of the following elements by clear and convincing

evidence:

24

Contrary to State Steel’s claim that “the record is devoid

of any testimony concerning the invoices and payment records

submitted by” A&M, State Steel Br. at 33, Fox did indeed testify

that Joint Exhibit 25 was “a summary of all of the payments that

were made in connection with the reconstruction of the A&M

compost building . . . .” JA 246. This testimony, which the District

Court found credible, supports reliance on the documentary

evidence despite State Steel’s claim that no such testimony exists.

25

An unjust enrichment claim in Pennsylvania is still viable

in this context if the owner misled the subcontractor into providing

a benefit. See D.A. Hill Co. v. CleveTrust Realty Investors, 573

A.2d 1005, 1009 (Pa. 1990); Limbach Co., LLC v. City of Phila.,

905 A.2d 567, 577 (Pa. Commw. Ct. 2006). The District Court

correctly went on to examine whether State Steel proved that A&M

misled it into providing the raw steel to Clark, and concluded that

it had not. JA 65-67. Specifically as to the claim for unjust

enrichment, State Steel makes no mention to us of this additional

finding, and we do not address it.

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(1) a representation; (2) which is material to the

transaction at hand; (3) made falsely, with

knowledge of its falsity or recklessness as to whether

it is true or false; (4) with the intent of misleading

another into relying on it; (5) justifiable reliance on

the misrepresentation; and (6) the resulting injury

was proximately caused by the reliance.

Skurnowicz v. Lucci, 798 A.2d 788, 793 (Pa. Super. Ct. 2002)

(quoting Bortz v. Noon, 729 A.2d 555, 560 (Pa. 1999)); see also

Bouriez v. Carnegie Mellon Univ., 585 F.3d 765, 771 (3d Cir.

2009); Overall v. Univ. of Pa., 412 F.3d 492, 498 (3d Cir. 2005).

“Matters of misrepresentation, knowledge, reliance, causation, and

scienter are questions of fact” subject to clear-error review. Healey

v. Chelsea Res., Ltd., 947 F.2d 611, 618 (2d Cir. 1991) (citing Fed.

R. Civ. P. 52(a)); accord Tracinda Corp. v. DaimlerChrysler AG,

502 F.3d 212, 229 (3d Cir. 2007) (citing Healey).

State Steel argues that the following statement in the Fox

Letter was a material misrepresentation, and induced it to continue

delivering steel to Clark: “With respect to any balance that Clark

may owe your company . . . , [our] company is willing, with

Clark’s permission, to pay you directly or by joint check made

payable to Clark and your company . . . .” JA 308-09. Though a

material representation, the District Court found that this statement

was not a misrepresentation. Absent such a false statement, the

court also found lacking an intent to mislead, justifiable reliance,

and proximate causation of damages. JA 71-74. Reviewing the

District Court’s evaluation of the factual evidence and its

credibility determinations 26 underlying its conclusion, we find no

26

The District Court found Wansor’s testimony to be

generally not credible, and Smith’s testimony to be contradicted by

the evidence on several key points. JA 37-38. It also found Fox to

be credible despite an inconsistent statement he had made in his

deposition. JA 38 & n.7. Finally, the court found Chizek’s

testimony to be credible generally, but noted an “important

discrepancy” and also stated that she had an “inherent bias” against

A&M given her role with State Steel. JA 38-39. State Steel

34

clear error.

Chizek testified at trial that she understood the Fox Letter

to be a guarantee that A&M “would take care of our invoices.” JA

266. Additionally, Fox admitted that his letter did not refer to the

balance in the joint checking account (perhaps tending to

demonstrate that A&M’s payments to State Steel would not be

limited by the funds in that account), or state specifically that A&M

would not pay State Steel once it had fully paid the Contract price.

JA 248-49. State Steel emphasizes these points, and argues that the

trial testimony, along with Fox’s October 7, 2004 letter (indicating

to Wansor that A&M would pay the subcontractors as discussed in

his “earlier letters”) established a material misrepresentation.

Though a plausible conclusion, we do not agree that it is the only

permissible one.

The District Court took these considerations into account,

but found that the Fox Letter did not misrepresent that A&M

guaranteed to satisfy State Steel’s invoices if Clark failed to do so.

The court believed Chizek’s earlier deposition testimony – that she

would not have expected A&M to pay more than the Contract price

(despite the letter’s failure to say so) – to be a reliable indicator of

the true meaning of the Fox Letter. JA 72. Chizek’s earlier belief

is corroborated by Fox’s trial testimony that A&M would “make

direct payments as long as [it] c[ould] deduct them against what [it]

owe[d] Clark,” but that “by definition, we are not going to make

payments if we don’t owe Clark any more money.” JA 249. The

court also credited Fox’s testimony that he drafted the letter at

Clark’s request, that A&M never received an invoice from State

Steel, that he had no prior dealings with State Steel, and that he

challenges this last point as clear error because the District Court

did not make a corresponding finding with respect to Fox’s

position at A&M. State Steel Br. at 30. We take the District Court

at its word, however, and review its analysis keeping in mind that

it found Chizek’s testimony to be credible except where it

specifically noted otherwise. We find no internal inconsistency

with the court’s credibility determinations, and we credit them

accordingly.

35

“wouldn’t know State Steel from the man on the moon.” JA 72-73,

250. This lack of a historical relationship between Fox and State

Steel undercuts an interpretation that the Fox Letter contained an

unqualified and false promise to guarantee payment.

Further, the District Court found that the “earlier letters”

that Fox had referenced in his October 7 correspondence did not

reference the Fox Letter or guarantee direct payment to all

subcontractors, but only did so as to the mitigation subcontractors

retained after Clark fell behind schedule. JA 72 n.16. This reading

is not clearly erroneous. At bottom, the District Court read the Fox

Letter as merely “seek[ing] to establish a process by which

payment could be made,” rather than “obligat[ing] [A&M] as a

guarantor of the agreement between Clark and [State Steel].” JA

73. Since this is precisely the manner in which A&M conducted

itself, the court found no misrepresentation in the Fox Letter.

Under all of these circumstances, we conclude that the

record evidence supported the District Court’s interpretation of the

Fox Letter as an administrative proposal to streamline payments,

and nothing more. The District Court did not clearly err in finding

that State Steel had failed to prove a material misrepresentation by

clear and convincing evidence. Consequently, it did not err in

rendering judgment under Rule 52(c) on the claim for fraudulent

inducement.

IV.

For these reasons, we will affirm the judgment of the

District Court in all respects.

36