Opinion ID: 3012773
Heading Depth: 3
Heading Rank: 2

Heading: The Purchase Order

Text: As the District Court’s ruling was in the context of Rule 12(c), we must decide if its standards have been satisfied. Under Rule 12(c), a court must “view the facts in the pleadings in the light most favorable to the plaintiff and must grant the motion only if the moving party establishes that no material issue of fact remains and that it is entitled to judgment as a matter of law.” Shelly, 798 F.2d at 97 n.4. Basic contract interpretation standards are well established. Determining whether 4 We also find unpersuasive CitiSteel’s argument that the District Court’s decision — stating CitiSteel should be barred “from recovering consequential damages” — indicates it improperly considered evidence outside the pleadings because the CitiSteel complaint never uses the term “consequential damages.” As stated previously, CitiSteel’s complaint seeks damages due, in part, to a reduction of production capacity, depletion of steel supply and inability to fulfill contracts, all of which flow consequentially from the contractual violation CitiSteel alleges. 6 a contract provision is ambiguous is a question of law. Sanford Inv. Co. v. Ahlstrom Mach. Holdings, Inc., 198 F.3d 415, 421 (3d Cir. 1999). Absent ambiguity, a court enforces a contract as written absent ambiguity. Id. A contract is not ambiguous unless “the provisions in controversy are reasonably or fairly susceptible of different interpretations.” Kaiser Aluminum Corp. v. Matheson, 681 A.2d 392, 395 (Del. 1996) (internal citations omitted); 5 see also Emerson Radio Corp. v. Orion Sales, Inc., 253 F.3d 159, 163-64 (3d Cir. 2002). The test is not the parties’ subjective intent, but rather “what a reasonable person in the position of the parties would have thought” the contract provision meant. Kaiser Aluminum Corp., 681 A.2d at 395 (internal citations and quotations omitted); see also Emerson Radio Corp., 253 F.3d at 164 (stating that a court must “determine if there [are] objective indicia that . . . the terms of the contract are susceptible of different meanings”) (internal citations and quotations omitted).6 As the dispute in this case centers on whether the GE Conditions of Sale were incorporated into the Purchase Order, we must also examine the specific standards for incorporation by reference. These standards are also well established. A contract may 5 The parties agree that Delaware law applies regardless which contractual terms apply. 6 It is for this reason that CitiSteel’s reliance on its own subjective intent is misplaced. Although not an exhaustive list, objective indicia of intent could include past dealings between CitiSteel and GE, general custom in the industry or representations made by GE to CitiSteel regarding the warranty. CitiSteel has failed to allege the existence of, or allude to, any objective evidence, nor has it alleged any legal defense, such as fraud or mistake, which warrants looking beyond the Purchase Order. 7 incorporate provisions contained in another instrument so long as the incorporated provisions are “specifically set forth or identified.” State v. Black, 83 A.2d 678, 681 (Del. Super. 1951), as cited in Star States Develop. Comp. v. CLK, Inc., No. 93L-08-048, 1994 Del. Super. LEXIS at  (Del. Super. 1994). We recently reiterated this tenet of hornbook law in Standard Bent Glass Corp. v. Glassrobots Oy, 333 F.3d 440, 447 (3d Cir. 2003). Moreover, in the context of incorporation by reference, it “is appropriate to require a merchant to exercise a level of diligence that might not be appropriate to expect of a non-merchant” because the “goal of commercial contract law is to efficiently facilitate business transactions between seasoned merchants.” Id. at 447 n.10. In accordance with these standards, we find that the Purchase Order unambiguously incorporated the GE Conditions of Sale. This is the only reasonable interpretation of the language used in CitiSteel’s Purchase Order — “included for general warranty information is [the GE Conditions of Sale].” See Citadel Holding Corp. v. Roven, 603 A.2d 818, 822 (Del. 1992) (stating courts typically determine the parties’ intent “from the language of the contract” and give those terms their ordinary meaning).7 CitiSteel falls far short from asserting successfully that the language of the Purchase Order should not be given its plain meaning. See Hercules, Inc. v. AIU Ins. Co., 784 7 The cases CitiSteel cites to attack the specificity of the language of incorporation in the Purchase Order are distinguishable. They generally stand for the proposition that a specific reference to another document for the purpose of defining the applicable standards of performance, or to define the scope of work involved, does not incorporate other, more general terms. See, e.g., Falcon Steel Co. v. Weber Engineering Co., Inc., 517 A.2d 281 (Del. Ch. 1986). Such is not the case here. 8 A.2d 481, 490 n.24 (Del. 2001) (stating a party cannot create ambiguity where none exists). Accordingly, we reject as unpersuasive the arguments advanced by CitiSteel in support of its position that the Purchase Order is ambiguous.8 We also note that CitiSteel (not GE) prepared the Purchase Order. Therefore, even assuming the Purchase Order’s language is ambiguous, that language is construed against CitiSteel as the drafter. Graham v. State Farm Mut. Auto. Ins. Co., 565 A.2d 908, 912 (Del. 1989). Finally, CitiSteel argues the CitiSteel General Terms prevented incorporation of the GE Conditions of Sale and expressly reserved the rights and remedies supposedly disclaimed by the GE Conditions of Sale. These arguments are also unpersuasive. Courts must strive to give effect to all provisions of a contract and not render any provision meaningless. Elliott Assocs., L.P. v. Avatex Corp., 715 A.2d 843, 854 (Del. 1998). If CitiSteel’s argument were to be accepted, then the language “included for general warranty information” on the Purchase Order is meaningless. In addition, when the terms of a contract cannot be reconciled, the more specific terms control over the general and 8 In arguing the Purchase Order’s ambiguity, CitiSteel misconstrues and mis-cites several cases. In Emerson Radio Corp., the district court granted summary judgment despite finding that the contract term at issue was ambiguous. 253 F.3d at 164. As such, we held the district court improperly prevented the jury from resolving this ambiguity through extrinsic evidence. Id. We did not conclude, however, that a district court must analyze extrinsic evidence in determining whether a contract is ambiguous. Further, the issue in J.A. Jones Constr. Co. v. City of Dover, 372 A.2d 540 (Del. Super. 1977), was whether a contract provision disclaiming liability applied to a particular fact situation. Denying summary judgment, the Court noted that a contract must disclaim liability with a sufficient degree of clarity. Id. at 553. CitiSteel, however, has never argued that the GE Conditions of Sale (if applicable) failed to disclaim liability clearly. 9 typewritten terms prevail over printed or standardized language. Stasch v. Underwater Works, Inc., 158 A.2d 809, 812 (Del. Super. 1960); see also Goldstein v. Blumenfield, 574 A.2d 109, 110 (Pa. Super. 1990); 11 S AMUEL W ILLISTON, A T REATISE ON THE L AW OF C ONTRACTS § 32.13 (4th ed. 1999). While both the GE Conditions of Sale and the CitiSteel General Terms are standardized, the specific language of incorporation in the Purchase Order is typewritten. This indicates the terms referenced by the language of incorporation control.