Court Opinion

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Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

12-31-2008

Eastern Adhesives v. Scapa N Amer Inc
Precedential or Non-Precedential: Non-Precedential

Docket No. 07-2590

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Recommended Citation
"Eastern Adhesives v. Scapa N Amer Inc" (2008). 2008 Decisions. Paper 24.
http://digitalcommons.law.villanova.edu/thirdcircuit_2008/24

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                                                              NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT

                                    No. 07-2590

                          EASTERN ADHESIVES, INC.,
                                               Appellant

                                         v.

                         SCAPA NORTH AMERICA, INC.

                   On Appeal from the United States District Court
                      for the Eastern District of Pennsylvania
                         D.C. Civil Action No. 06-cv-1727
                            (Honorable J. Curtis Joyner)

                  Submitted Pursuant to Third Circuit LAR 34.1(a)
                               November 20, 2008

             Before: SCIRICA, Chief Judge, RENDELL, Circuit Judge,
                    and O’CONNOR, Retired Associate Justice *

                             (Filed: December 31, 2008)

                            OPINION OF THE COURT

  *
   The Honorable Sandra Day O’Connor, Retired Associate Justice of the Supreme
Court of the United States, sitting by designation.
SCIRICA, Chief Judge.

       Eastern Adhesives appeals an order of the District Court denying its motion for

leave to file a Second Amended Complaint and granting Scapa North America’s motion

to strike the Second Amended Complaint. Eastern Adhesives’s pleadings alleged Scapa

breached a 2001 oral contract. Under the agreement, Scapa would supply Eastern

Adhesives’s requirements of a tape product, SP357-.003, for resale to a third party, and

Scapa would not itself sell SP357-.003 or similar products to the third party. Because the

alleged agreement was for more than five-hundred dollars and made orally, we consider

whether the Pennsylvania statute of frauds, 13 Pa. Cons. Stat. § 2201, bars enforcement of

Eastern Adhesives’s claims.1

                                              I.

       At the outset we must address waiver because four of Eastern Adhesives’s

arguments were neither raised in the District Court nor were grounds for the District

Court’s judgment. “Generally, failure to raise an issue in the District Court results in its

waiver on appeal.” Huber v. Taylor, 469 F.3d 67, 74 (3d Cir. 2006). Eastern Adhesives

makes four new arguments: (1) the merchant’s exception to the statute of frauds in 13 Pa.

Cons. Stat. § 2201(b) applies; (2) the § 2201(c)(3) exception to the statute of frauds

regarding goods received and accepted applies; (3) Scapa waived the statute of frauds

   1
    The District Court had diversity jurisdiction under 28 U.S.C. § 1332, and we have
jurisdiction under 28 U.S.C. § 1291.

                                              2
defense because oral agreements are the standard practice in the trade, see Atl. Paper Box

Co. v. Whitman’s Chocolates, 844 F. Supp. 1038, 1043–45 (E.D. Pa. 1994); and (4) under

ALA, Inc. v. CCAIR, Inc., 29 F.3d 855 (3d Cir. 1994), a plaintiff can survive a Rule

12(b)(6) motion if the defendant might admit the existence of the contract in its pleadings,

discovery, or in court. Because Eastern Adhesives did not raise these issues in the

District Court2 and because they were not part of the District Court’s holding, they are

waived and we address only Eastern Adhesives’s two remaining claims.3

                                              II.

       Eastern Adhesives contends the letters it exchanged with Scapa in 2002 and which

it attached to the Complaint are sufficient to satisfy the statute of frauds. A contract for

the sale of goods for five hundred dollars or more is not enforceable “unless there is some

writing sufficient to indicate that a contract for sale has been made between the parties

and signed by the party against whom enforcement is sought.” 13 Pa. Cons. Stat. §

   2
     Eastern Adhesives made four and only four arguments before the District Court.
First, Eastern Adhesives argued its course of dealing with Scapa should be interpreted to
establish a contract. (Brief of Plaintiff Opposing Motion to Dismiss Amended
Complaint, Supp. App. at 3–5.) Second, Eastern Adhesives argued a contract was made
by way of an oral promise at a 2001 meeting and subsequent acceptance of that promise.
(Id.) Third, Eastern Adhesives argued it had made out a claim for promissory estoppel.
(Id. at 5–6) Fourth and finally, Eastern Adhesives made procedural arguments in support
of a motion for leave to file the Second Amended Complaint: despite filing the Second
Amended Complaint late, Eastern Adhesives argued the District Court had discretion to
accept the Second Amended Complaint. (Brief of Plaintiff Opposing Motion to Strike
Second Amended Complaint, App. at 86–87.)
   3
    To the extent Eastern Adhesives has raised promissory estoppel claims on appeal, it’s
pleadings do not claim reliance damages.

                                              3
2201(a). Eastern Adhesives argues a letter it sent Scapa in June 2002, which refers to an

“account protection agreement,” 4 established the context for Scapa’s signed, written

responses in July and October 2002. Because these subsequent communications fail to

disclaim such an agreement, the argument goes, Scapa’s letters admit the agreement.

       To the extent Eastern Adhesives suggests the merchant’s exception to the statute of

frauds applies because Scapa failed to object, the argument is waived. See supra. To the

extent Eastern Adhesives suggests Scapa’s letters incorporated the assertion of an

agreement by reference in its own signed writings, the letters attached to the pleadings

provide no support. Scapa’s letters do not refer to an account protection agreement. They

recognize Eastern Adhesives lost one of its clients when Scapa began selling directly to

that client. Additionally, they acknowledge Scapa sought to avoid losing Eastern

Adhesives for other business. These documents do not refer to Eastern Adhesives’s

assertions of an account protection agreement, nor do they demonstrate a requirements

   4
     Eastern Adhesives’s June 2002 letter identifies a different agreement than the one
identified in the pleadings. The pleadings suggest Rakesh Kumar and Joe Craig entered
into an oral contract in 2001. The account protection agreement identified in the June
2002 letter purportedly involved Chris Thomas and Marvin Hickman and was purportedly
entered into “several years ago,” notably in a year prior to 2001. (App. at 16.)
Eastern Adhesives admitted before the District Court, however, that prior to the 2001 oral
promise alleged in the pleadings, no agreement existed. (Supp. App. at 5) (noting that at
the time of the 2001 agreement, “[e]ither party could have ceased doing business with the
other at any time”). Accordingly, by Eastern Adhesives’s own admission, the June 2002
letter claimed a contractual relationship that did not exist. The statute of frauds guards
against enforcement.

                                             4
contract between Eastern Adhesives and Scapa. Accordingly, the letters do not satisfy the

statute of frauds.

                                             III.

       Second, Eastern Adhesives contends Scapa’s Connecticut state-court action admits

the exclusive requirements contract. A contract is enforceable if “the party against whom

enforcement is sought admits in his pleading, testimony or otherwise in court that a

contract for sale was made.” Id. § 2201(c)(2). The contract, however, “is not enforceable

under this provision beyond the quantity of goods admitted.” Id. Eastern Adhesives does

not identify a quantity of goods in the Connecticut Complaint, much less an agreement to

fill its requirements. Accordingly, because the contract cannot be enforced beyond the

quantity admitted, id., and Eastern Adhesives does not identify the quantity, Scapa’s

Connecticut action does not satisfy the statute of frauds.

                                             IV.

       For the foregoing reasons, we will affirm the judgment of the District Court.

                                              5