2005 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
1-4-2005 

# P r o S pice I nc v

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w . v i l l a no va . e du/thir dc ir c uit_2005/1586NOT PRE CEDENT IAL
UNITED STATES COURT OF APPEALS FO R T HE TH IRD CIR CU IT
Nos. 03-4556 /

04-1450 / 04- 1609
PR O S PIC E, IN C.,

Appellant s (03-4556 and 04- 1450)
v. OM NI TR AD E G RO UP , IN C.; SH AN K’ S E XT RA CT S, IN C.; YO RK IM PO RT & EX PO RT , IN C.; ANDYAN RAHARDJ A,

Appellant s (04-1609) App eal from th e Un ited States District Co urt for the Easte rn D istrict of P enns ylvania (D.C. Civi l Action No. 01-cv-01661) Distri ct Judge: Honorable Ronald L. Buckwalter

Argued December 6, 2004
Be for e: A M BR O, a nd V AN AN TW ER PE N, Circuit Judges SH AD UR *, Distri ct Judge (Opinion fi led: J anuary 4, 2005)
*Honorable Milt on I. Shadur , Unite d States Distri ct Judge for the Northern Distri ct of Ill inois , si tti ng by des ignati on.2

Jonathan L. Sw ichar, Esquire Du ane M orris 1650 Market Stree t One LibertyPlace, 37th Floor Philadelphia, PA 19103-7396 Steven M. Richman, Esqui re (Argued) Du ane M orris 100 College Road West, Suite 100 Princet on, NJ 08540 Atto rneys fo r Ap pellan t/ Cross Appelle e Eric A. Savage, Esquire ( Argued) Gary S. Prish, Esq uire Littler Mendelson One Gateway Center Third Floor Newark, NJ 07102 Attorney s for Appell ee/ Cross Appellant

OPI NION
AM BR O, Circuit

Judge Because we write s olely for the be nefit

of the parties , we do not rec ount the volu mino us fa cts givin g rise to this app eal. W e note mere ly that the un derlying d ispute involves an alleged agree ment fo r the sale of va nilla beans to Pro Spice, Inc. (“Pro Spice”) by

Omni Trade Group, Inc. (“Omni”). On appeal, Pro Spi ce argues t hat the Distri ct Court e rred i ) by concludi ng that no e nforceabl e contra ct exi sted and i i) by3

enterin g jud gm ent ag ainst P ro Sp ice on its related fraud claim . A third issue lies in bo th parti es’ chal lenge of the District Court ’s award of di scoverysancti ons agains t Omni. For the rea sons set

forth bel ow, we reject

the part ies’ arguments and a ffirm al l appeal ed orde rs of th e D istrict Co urt. The Distri ct Court e xercis ed juri sdiction pursuant to 28 U.S. C. § 1332. We revie w its final orders pur suant t o 28 U.S.C. § 1291. I. Bre ach of Co ntra ctCla im. The Distric t Cou rt rejected the bre ach o f con tract claim of P ro Sp ice be caus e it fail ed to demonstr ate that an enfor ceable cont ract e xist ed. We assess this conclusi on und era mi xe d s ta ndard of re vi ew. The district court ’s factual findi ngs, especiall y with respect to the parties’ intent ions, will not

be revers ed unless the rec ord demonstr ates t hat the y are cl early

erroneous . Simil arly , the inter pretat ion of contractua l langua ge to disce rn co ntractu al inten t is a fac tual qu estion, w hich w e w ill accordi ngly review under aclearly erroneous standar d. Conclusi ons drawn with respe ct to the legal effec t of any agreem ent, how ever, are que stio ns of

la w an d the re fo re su bj ec t to pl en ar y re vi ew. ATA CS Corp. v. Trans Worl d Communications, Inc. , 155 F.3d 659, 665 (3d Cir. 1998) (cit ations omitt ed). The r elevant porti ons of the Dis tri ct Court’ s opini on assess the parties’ c ontrac tual inten t, includ ing an interpre tation o f the d ocum entary ev idenc e in order t o discern that i ntent and an evaluation of witne ss tes timony . For this re ason, t he perti nent aspec ts of the District Court ’s opini on are entitl ed to the deference ac corded a fact finder, revers ible onlyif clearl y erroneous.4

Und er this deferential standa rd, we find no reason to disturb the D istrict Court’s conclusi on that t

he crit ical December 3, 1999 let ter fr om Om ni was not an offe r, but merely“a quotation of pri ces for beans based upon avai labil ity .” Pro Spice, Inc. v. Omni Trade Group, Inc
. , 2003 W L 224 77862 , *4 (E.D . Pa. Oct 31 , 2003). Th e District Cou rt properl y bas ed this conclusi on on its assess ment of the par ties ’ int ent aft er a det aile d review of the evidence a nd testimony presented. Though it vi gorously disput es the conclusi on reached, Pro Spice fai ls t o offer a compell ing argument that t he conclusi on
was cl ea rl y erro ne ous , and w e d is ce rn no s uc h e rr orupo n ou r o wn r ev ie w. Even assumin g that the D ecemb er 3 letter was an offer sus cepti ble to a binding
acce ptanc e, Om ni’s sub sequ ent D ecem ber 6 , 1999 letter rev oked that of fer by rep lacing it with a new offer. At oral argument, couns el for Pr o Spice argue d that Omni’s December 6 letter had no le gal effect on its December 3 “offer” because it did not al ter any

of the material terms of the propo sed barga in. This argum ent unde rwhelm s, as the Dec embe r 6 letter pre sented new terms of d elivery an d, mo st notab ly, a higher price f or the v anilla beans listed. Th us, even if O mni’s D ecemb er 3 letter was an offer, it was rev oked b efore it was accepted, and no contract exist ed between the parties. Lastly, w e note that Pro Spic e’s relian ce on 13 P a. C.S .A. § 2 201 (b) is bo th misplaced and m isleading. Part of P ennsylvania’s cod ification of the U niform Commercial Code, t

hat provi sion provi des an exception to t he stat ute of frauds’ writing requir ement for agr eements between merchants when the mer chant al leging breach has1 To c onstru e the sta tute as P ro Sp ice pro pose s prod uces absu rd resu lts. If the sta tute

provided a ba sis for

the formati on of a c ontrac t, a mer chan t could , for ex amp le, simp ly send written “confi rmations ” of highl y advant ageous agree ments to ot her merchant s and sue th ose f ailing to objec t timely to the “con firma tions” f or en force men t of the contra cts “deemed to exi st” under the st atute . 5 provided a wri tten c onfirmation of a pri or agreement to it s counter

part, and the other
merc hant in turn fa ils to ob ject to the written conf irmatio n in a tim ely fashio n. Th is excepti on to the s tatute of frauds does not halt the complai ning party’ s dutyto show that an ag reem ent w as fo rmed

— that is, that th ere w as a “m eeting of the mind s.” It simp ly enables the partyalleging breach of an existing contract to overcome the statute of frauds’ writing requ ireme nt. Pro Spic e’s co ntentio n that u nder this pro vision “a co ntract will be deemed to exist unless t he merchant pr ovides a wri tten obj ecti on,” Appell ant Br. at 28 (emp hasis a dded ), presu ppo ses a c onclu sion (a contra ct) that is in stead a preco ndition to applying § 220 1(b). 1 Acco rd U.C .C. § 2 -201 cmt. 3 (199 5) (ex plainin g that “ [t]he o nly effect [of

§ 2-202] . . . i s to t ake away fr om the party who fail s to answer [ the conf irmatio n] the d efen se of the S tatute o f Fra uds; the bu rden of per suad ing . . . that a contract was in fact

made orally pr ior to the written conf irmati on is unaf

fected ”) (emph asis added ). Bec ause no co ntract e xisted, P ro Sp ice’s b reach claim mu st fail. II . F ra ud Cl ai m. Accepting the District Court ’s fact ual fi ndings dooms Pro Spi ce’s fr aud clai m as well. Most signif

icantly , the Distri ct Court c oncluded that Pro Spi ce, through it s agent6

Pallone, “knew well that there was not

mutual meeting of the minds.” Pro Spice , 2003 WL at *5. Because Pro Spi ce knew there was no cont ract, by defi niti on it cannot establ ish that it

was fraudulently induced t o agree. Moreover, the Distri ct Court f ound that O mn i’s re pre sen tatio ns a bou t bea ns f or sa le w ere a ll “ba sed on a vaila bility,” und erm inin g P ro S pice ’s co nten tion that a ction able mis rep rese ntati ons we re m ade
. Id. Lastly , the Distri ct Court’ s findi ng that Omni l acked int ent to e xtend an offer undermines Pr o Sp ic e’ s arg ume ntth at Omni ac te d i n ba d fai th orwit h a n i nt en t to de fr au d. As we know of no reason to di sturb t hose findi ngs, they s tand, leavi ng Pro Spice’ s clai m of fraud beref t of su ppo rt. III. Propri ety of Sanctions. Both parti es argue t

hat the Distri ct Court abused it s discretion i n imposing $1, 500 in sanctions agai nst Omni for i ts di scoveryabuses. Pro Spice ar gues that the Dist rict Court shoul d have imposed a gr eater sancti on award, while Omni argues that no award of sanctions was legallyauthorized. We quickly dispense with t hese cross-claims. Bo th p artie s arg ue, inter alia , that the Dis tri ct Court a warded sancti ons under Fed eral R ule of Civil P roced ure 3 7(b)(2 ), wh ich pro vides that “[ i]f a pa rty . . . fails to obey an order to pr ovide or permit di scovery , . . . the court i n which the action is pending may make such or ders i n regard t o the fai lure as are jus t.” The Rule furthe r provi des that “the c ourt shall requir e the party fail ing to obey the order

or the at torneyadvisi ng that partyor both t o pay t

he reasonabl e expenses, includi ng attorney’ s fees, caused bythe7

fail ure, unl ess the court fi nds that
. . . award of expenses unj ust. ” Id. (em pha sis ad ded ). After de scribing a “history of [O mni's] not respon ding timely [to discov ery request s] requiring court interventi on,” the District Court concluded that thi s lack of dili gence was “preci selywhat happened agai n in the motion [for s ancti ons] befor e the court. ” Pro Spice, Inc. v. Omni Trade Group, Inc. , 200 3 W L 2 301 878 6, *2 (E.D . Pa., Dec 16, 2003). After subse quently reviewing e vidence submi tted by the part ies, the Distri ct Court c oncluded that $1, 500 repres ented the reasonabl e expenses caused by Om ni’s ( in)a ction
. Pro Spice, Inc. v. Omni Trade Group, Inc. , 2004 WL 286869, *1 (E.D. Pa ., Feb 11, 200 4). It appears that the C ourt determ ined that O mni’s discov ery abuses ra n afoul of Rule 37( b)(2), a sancti on was requir ed, but the mini mum w as
assess ed. This fall s well wit hin the e xpansive di scretion accor ded the Court by Rule 37. IV. Conclusi on. For the reaso ns described above , we reject all of the a rgume nts presented in Pro Spic e’s ap peal a nd O mn i’s cross -app eal an d aff irm the judg men ts of th e D istrict Co urt.