Court Opinion

ID: 6105300
Source: CourtListenerOpinion
Date Created: 2022-01-20 18:00:44.989706+00
Date Added: 2024-06-11T08:53:47.750779
License: Public Domain

PRECEDENTIAL

     UNITED STATES COURT OF APPEALS
          FOR THE THIRD CIRCUIT
              _______________

              Nos. 19-1028 & 19-1107
                _______________

              SODEXOMAGIC, LLC

                         v.

              DREXEL UNIVERSITY

                              SodexoMAGIC, LLC,
                               Appellant in No. 19-1028

                           Drexel University,
                            Appellant in No. 19-1107
                 _______________

   On Appeal from the United States District Court
      for the Eastern District of Pennsylvania
              (D.C. No. 2:16-cv-05144)
   District Judge: Honorable Michael M. Baylson
                 _______________

              Argued: March 16, 2020

Before: AMBRO, BIBAS, and PHIPPS, Circuit Judges.

              (Filed: January 20, 2022)
                 _______________
Shay Dvoretzky      [ARGUED]
Skadden Arps Slate Meagher & Flom
1440 New York Avenue, N.W.
Washington, DC 20005
      Attorney for SodexoMAGIC, LLC

Jared D. Bayer
Stephen A. Cozen [ARGUED]
Robert W. Hayes
Cozen O’Connor
1650 Mark Street
One Liberty Place, Suite 2800
Philadelphia, PA 19103
       Attorneys for Drexel University
                         __________

                         OPINION OF THE COURT
                               __________

PHIPPS, Circuit Judge.

                           TABLE OF CONTENTS

I.        Introduction ................................................................... 5
II.       Factual Background ...................................................... 6
     A.   The Competition to Provide Food Services at Drexel
          University...................................................................... 6
     B.   Negotiation of the Management Agreement................. 8
     C.   The Short Unhappy Life of the Management
          Agreement ..................................................................... 9
III.      Procedural History and Jurisdictional Analysis .......... 12

                                             2
 A.        The Parties’ Claims and Counterclaims ..................... 12
 B.        The District Court’s Jurisdiction over the Dispute ..... 13
 C.        The District Court’s Resolution of All Claims and
           Counterclaims ............................................................. 15
 D.        Appellate Jurisdiction ................................................. 16
IV.        Discussion ................................................................... 17
 A.        The Parties’ Competing Fraudulent Inducement
           Claims Have Different Fates: SodexoMAGIC’s
           Claim Survives; Drexel’s Counterclaim Does Not. .... 19
      1.        Common-Law Fraud Claims in Pennsylvania ..... 20
      2.        SodexoMAGIC’s Fraudulent Inducement Claim
                for Compensatory Damages Survives Summary
                Judgment............................................................... 23
       a.       SodexoMAGIC Presents Sufficient Evidence of
                a Misrepresentation as Well as Concealment. ...... 23
       b.       The District Court Did Not Abuse Its Discretion in
                Denying Drexel’s Motion to Strike Declarations
                by Three SodexoMAGIC Witnesses. ................... 28
       c.       Drexel’s Remaining Counterarguments for
                Upholding Summary Judgment in Its Favor
                Also Fail. .............................................................. 34
      3.        The Parol Evidence Rule Does Not Bar Sodexo-
                MAGIC’s Claim for Fraudulent Inducement. ...... 36
       a.       Integration Clauses, the Parol Evidence Rule,
                and Fraudulent Inducement Claims Under
                Pennsylvania Law. ................................................ 37

                                             3
      b.        The Management Agreement Lacks Fraud-
                Insulating Provisions, so the Parol Evidence Rule
                Does Not Preclude SodexoMAGIC’s Fraudulent
                Inducement Claim. ............................................... 42
     4.         Pennsylvania’s Gist of the Action Doctrine
                Does Not Bar SodexoMAGIC’s Fraud Claim...... 44
     5.         Drexel’s Fraudulent-Inducement Counterclaim
                Fails ...................................................................... 47
 B.       SodexoMAGIC’s Breach-of-Contract Claim for
          Failure to Renegotiate in Good Faith Survives
          Summary Judgment. ................................................... 51
     1.         A Promise to Renegotiate in Good Faith May Be
                Enforceable Under Pennsylvania Law, and the
                Promise Between These Parties Is Enforceable. .. 51
     2.         A Genuine Dispute of Material Fact Remains as
                to Whether Drexel Renegotiated in Good Faith. .. 59
 C.       SodexoMAGIC’s Claim for Enhanced Payments for
          Fall 2016 Survives Summary Judgment. .................... 65
     1.         There Was Consideration for a Separate
                Contract for the Fall 2016 Semester. .................... 65
     2.         A Reasonable Jury Could Find that
                SodexoMAGIC Accepted Drexel’s Offer. ........... 66
 D.       Drexel’s Challenge to SodexoMAGIC’s Catering-
          Shortfall Claim Fails. .................................................. 68
 E.       SodexoMAGIC’s Claims for Unjust Enrichment
          Fail. ............................................................................. 70
V.        Conclusion .................................................................. 73

                                               4
                    I.     INTRODUCTION

    After a long-standing business relationship went bad, this,
the ensuing litigation, went big. For years, a vendor provided
food services at a private university, but in 2014 the university
announced that it would competitively bid the contract for on-
campus dining. Although the same vendor ultimately won that
competition, the process of bidding, negotiating, and finalizing
that new contract fractured the relationship beyond repair.
About two years into the contract’s ten-year period of
performance, the vendor sued the university for fraud, multiple
breaches of contract, and alternatively for unjust enrichment.
The university responded with fraud and breach-of-contract
counterclaims.

    In resolving cross-motions for summary judgment and
attendant motions to strike, the District Court rejected the bulk
of both parties’ claims. All that survived summary judgment
were relatively small pieces of the vendor’s breach-of-contract
claims and portions of the university’s breach-of-contract
claim. Rather than proceed to trial on the fragments of their
respective cases, the parties referred the remaining claims and
counterclaims to arbitration and jointly moved to dismiss them.
The District Court granted that motion and entered final
judgment, which the parties now appeal, primarily to dispute
the summary judgment ruling.

    In reviewing the District Court’s summary judgment
rulings de novo, see Cranbury Brick Yard, LLC v. United
States, 943 F.3d 701, 708 (3d Cir. 2019), and the motion-to-
strike order for an abuse of discretion, see Daubert v. NRA
Grp., LLC, 861 F.3d 382, 389 (3d Cir. 2017), the District Court

                               5
correctly resolved much of this controversy, but it erred in
rejecting the vendor’s fraud and breach-of-contract claims.
Thus, we will affirm the judgment in part, vacate in part, and
remand this case for further proceedings.

               II.     FACTUAL BACKGROUND

   A. The Competition to Provide Food Services at Drexel
      University

    For nearly twenty years, either directly or through one of its
predecessor companies, SodexoMAGIC, LLC (‘SDM’)
provided on-campus dining services at Drexel University, a
private university in Philadelphia. But in early 2014 one of
SDM’s rivals, Aramark Corporation, which has its global
headquarters in Philadelphia, made an unsolicited offer to
Drexel to take over campus dining services. SDM responded
with its own unsolicited offer to continue providing food
services. Rather than select one of those offers, Drexel
announced a two-phase competitive bidding process for the on-
campus dining contract.

   In the first phase, Drexel sought to identify qualified
bidders. It proposed a scope of work that involved providing
“world class dining and catering services” at its campuses.
Drexel Univ., Request for Proposal for a Campus Dining
Strategic Partnership (SA133). Drexel also expected the food-
service provider to make capital investments of $20 million
over the span of the ten-year contract. While Drexel’s phase-
one solicitation did not contain many details about on-campus
dining, it did represent that Drexel would share “as much detail
about the desired relationship and facts around the current
program as can be reasonably provided.” Id. (SA131). The

                                6
solicitation also included an estimate that the contract, over its
full term, would have a value between $275 and $300 million.
At the end of the first phase, Drexel determined that SDM and
Aramark, along with two other bidders, qualified to advance to
the second phase.

    The second phase took place during the summer of 2014,
and it involved competitive negotiations. In its more detailed
phase-two solicitation, Drexel provided an overview of its on-
campus dining and food-service operations. That overview
pointed out that Drexel’s Strategic Plan called for an increase
of its then-current enrollment of 26,132 students to a student
population of 34,000 by 2021. Drexel noted, however, that not
all students had to have all-inclusive meal plans – that
requirement applied only to first-year undergraduates. And an
appendix to the solicitation informed bidders that Drexel was
projecting an incoming first-year class of 3,100 students for the
2014–15 academic year. But for purposes of its own internal
budget, Drexel estimated that class size at 2,800 students. As
succinctly stated in internal correspondence from one of
Drexel’s senior associate vice presidents, “we gave the bidders
participant numbers based on a freshman class size of 3,100
and the FY15 budget that was loaded by Finance is based on
2,800.” Email from Joe Campbell, Senior Associate Vice
President, Drexel, to Rita LaRue, Senior Associate Vice
President, Drexel (Aug. 4, 2014) (SA182).

    Three of the remaining bidders submitted proposals.
Drexel selected two of them – SDM and Aramark – as finalists
and requested that they each submit a best and final offer,
referred to as a ‘BAFO.’ In its BAFO, SDM included an
additional term: an offer to increase its capital contributions by
$4 million beginning in year six of the contract. After

                                7
considering both BAFOs, Drexel determined that SDM’s
BAFO had more favorable financial terms and was superior in
other respects. On August 15, 2014, Drexel selected SDM for
the dining services contract and broke off negotiations with
Aramark. Having won the competition, SDM continued to
provide on-campus dining services for the 2014–15 academic
year while it worked with Drexel to finalize a new contract.

   B. Negotiation of the Management Agreement

    Finalizing the new contract was not a smooth process.
Problems started in September 2014 when SDM proposed an
initial draft that omitted the additional $4 million capital
contribution that it had proposed in its BAFO. After several
months of negotiations, the parties agreed to condition that
investment on certain sales levels, evaluated before year six of
the contract.

    But that was not the only point of contention. SDM also
proposed that Drexel guarantee annual increases in its first-
year student enrollment. Instead of a guarantee, the parties
agreed that SDM had relied on Drexel’s representations of its
future student enrollment and that they would renegotiate in
good faith if first-year student enrollment did not increase
annually by at least two percent.

    Having overcome those and other obstacles, the parties
executed the contract, known as the ‘Management Agreement,’
on May 28, 2015. Although it was signed then, the
Management Agreement specified a commencement date of
August 25, 2014, so that it covered the services SDM provided
after it had won the competitive bidding process. The
Management Agreement also included an integration clause,

                               8
which stated that it contained all agreements between the
parties on the subject matter.

   C. The Short Unhappy Life of the Management
      Agreement

    The Management Agreement may have been doomed from
the start. The day it was executed, The Philadelphia Inquirer
reported that Drexel’s first-year class had nearly 200 fewer
students than the prior year. See Susan Snyder, That Big
Enrollment Change at Drexel: How Did it Go?, Phila. Inquirer
(May 28, 2015) (SA1553–54). Soon afterward, through a
‘Dear Colleague’ letter, Drexel’s President informed university
stakeholders, including SDM, that the university had “focused
on attracting a smaller pool of exceptionally qualified
applicants,” with the result being that the “enrolled class will
be smaller than in previous years,” causing the university to
operate “with less revenue than [it] historically experienced.”
Letter from John A. Fry, President, Drexel, to Colleagues of
Drexel (June 8, 2015) (SA519–20). According to SDM, that
news of reduced student enrollment came as “a complete
shock.” Email from Nancy C. Arnett, Vice President, Sodexo,
to Greg Klose, Vice President, Sodexo (June 12, 2015)
(SA524). And when SDM asked about that development,
Drexel’s lead negotiator for the Management Agreement
forwarded the inquiry to one of Drexel’s executive directors,
who remarked, “I guess they were going to find out sooner or
later.” Email from Donald Liberati, Executive Director,
Drexel, to Rita LaRue, Senior Associate Vice President, Drexel
(June 9, 2015) (SA526).

   Consistent with those revelations, Drexel enrolled 2,720
students in the first-year class for the 2015–16 academic year –

                               9
a seven percent decrease from the year before. Even with that
diminution, SDM made an initial capital contribution of $9.3
million in July 2015, which funded construction of a new
dining facility, the Urban Eatery at Lancaster Avenue. But the
reduced first-year student enrollment had an immediate effect
on SDM’s revenues.

    In November 2015, only six months after executing the
contract, revenue from catering and meal plans fell below the
assumptions referenced in the Management Agreement. And
SDM requested compensation for that shortfall. For several
months, the parties engaged in discussions to restructure
certain aspects of the Management Agreement, including
reducing the additional capital contributions that SDM had
promised.

   As the parties’ relationship soured, the termination
provisions of the Management Agreement took on greater
significance. Those terms provided two mechanisms for
termination before full term: for cause and for convenience. To
terminate for cause, a party had to notify the other of a breach,
and that would commence a cure period. If the breach was not
cured or otherwise resolved by the end of the cure period, then
the complaining party could terminate the Management
Agreement.      The termination-for-convenience provision
required 60 days’ notice that a party would terminate, and upon
expiration of that period, the Management Agreement would
terminate.

   After several months without resolution, on July 25, 2016,
SDM began the process to terminate the Management
Agreement for cause. It notified Drexel that it believed the
shortfalls were material breaches on the theory that sales fell

                               10
below the amounts listed as assumptions in the Management
Agreement. SDM then tolled the cure period, and the parties
continued discussions through August 2016.

    Upon receiving SDM’s notice of breach, Drexel also began
pursuing other options. Two days after SDM’s notice, Drexel
reconnected with other bidders to explore their interest in
taking over the on-campus food-services operations. Using
five-year projections for an incoming first-year class of 2,400
students, Drexel and Aramark discussed the possibility that
Aramark would start providing on-campus food services in
January 2017.

    As that possibility became more likely, and without
reconciling completely with SDM, Drexel exercised its option
to terminate the Management Agreement for convenience.
Although the Management Agreement required only 60 days’
notice to terminate for convenience, by letter dated
September 19, 2016, Drexel provided 82 days’ notice: it stated
its intention to terminate the Management Agreement for
convenience on December 10, 2016, the last day of the fall
semester. By that same correspondence, Drexel offered SDM
various financial incentives to remain on campus and provide
food services for the rest of the Fall 2016 Semester. Those
incentives included an increased daily rate for certain meal
plans, a reduced commission due to Drexel, and a release of
SDM’s obligation to make additional capital contributions
under the Management Agreement.

   The days following Drexel’s notice of termination were
eventful. On September 23, 2016, senior staff at Drexel met
with Aramark and conditionally agreed to contract with
Aramark for on-campus dining services starting in January

                              11
2017. On September 26, 2016, SDM responded to Drexel’s
notice of termination. In that letter, SDM gave notice that it
was ending the cure period, and it purported to terminate the
Management Agreement for cause effective at the close of
business that day. But through that same communication,
SDM also agreed to remain on campus for the remainder of the
Fall 2016 Semester, explaining that it “does not leave students
in mid-term.” Letter from Timothy J. Fazio, Manion Gaynor
& Manning, LLP, to Stephen A. Cozen, Cozen O’Connor P.C.
(Sept. 26, 2016) (JA158). The next day, SDM filed this lawsuit
in the Eastern District of Pennsylvania.

    Despite suing Drexel, SDM remained on campus and
provided services through December 10, 2016. Drexel did not
accept a reduced commission or make enhanced payments for
dining services provided by SDM, and SDM did not make any
further capital contributions.

   III.   PROCEDURAL HISTORY AND JURISDICTIONAL
                     ANALYSIS

   A. The Parties’ Claims and Counterclaims

    In its original complaint, SDM pursued three causes of
action. First, it alleged that Drexel fraudulently induced it to
enter the Management Agreement, and it sought compensatory
and punitive damages. Second, SDM alleged that Drexel
breached its contractual duty to renegotiate in good faith.
Third, as a claim in the alternative, SDM alleged that Drexel
was unjustly enriched when SDM assumed certain liabilities
and provided dining services at reduced rates.

                              12
    Drexel also sought to vindicate its grievances against SDM.
It counterclaimed that SDM breached the Management
Agreement by failing to perform specific obligations,
including filling key management positions, making financial
contributions to certain Drexel initiatives, meeting certain
performance standards, and securing campus appearances from
Earvin “Magic” Johnson.

    Both parties later revised their initial pleadings. SDM
amended and supplemented its complaint to add another
breach-of-contract claim. In that count, SDM alleged that
Drexel refused to pay invoices due under the Management
Agreement and that Drexel owed SDM enhanced payments for
dining services provided during the Fall 2016 Semester. After
discovery, on September 12, 2017, Drexel supplemented its
counterclaim to allege that SDM’s offer of additional capital
contributions in its BAFO was insincere and that through that
term SDM fraudulently induced Drexel to award the contract
to SDM instead of Aramark.

   B. The District Court’s Jurisdiction over the Dispute

   Under the diversity statute, the District Court had subject
matter jurisdiction over this case. That statute requires
complete diversity of citizenship between opposing parties and
an amount in controversy in excess of $75,000. See 28 U.S.C.
§ 1332(a); Exxon Mobil Corp. v. Allapattah Servs., Inc.,
545 U.S. 546, 553 (2005) (explaining that the presence of a
single plaintiff from the same state as a single defendant
deprives a district court of original diversity jurisdiction);
Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267 (1806).
Both of those jurisdictional requirements are satisfied here.

                              13
    There is complete diversity because SDM and Drexel are
not citizens of the same state. As a limited liability
corporation, SDM takes on the citizenship of its members and
submembers. See Zambelli Fireworks Mfg. Co. v. Wood,
592 F.3d 412, 420 (3d Cir. 2010) (explaining that determining
an LLC’s citizenship requires drilling down “through however
many layers of partners or members there may be” to evaluate
the citizenship of each (internal quotation marks omitted)); cf.
Lincoln Benefit Life Co. v. AEI Life, LLC, 800 F.3d 99, 111
(Ambro, J., concurring) (“There is no good reason to treat
LLCs differently from corporations for diversity-of-citizenship
purposes.”). Accounting for those members and submembers,
SDM is a citizen of Delaware, Maryland, and California for
purposes of the diversity statute.1 As a non-profit corporation,
Drexel has citizenship for purposes of the diversity statute in
the state of its incorporation and in the state of its principal
place of business – Pennsylvania in both instances. See
28 U.S.C. § 1332(c)(1); see also Zambelli, 592 F.3d at 419.
Without any overlap in the citizenship of SDM and Drexel, the
complete diversity requirement is satisfied.

1
  SDM has two members: Sodexo Operations, LLC and Magic
Food Provision, LLC. Sodexo Operations, LLC has one
member, Sodexo, Inc., which, as a corporation, has citizenship
in Delaware as its state of incorporation and in Maryland
through its principal place of business. See 28 U.S.C.
§ 1332(c)(1); see also Zambelli, 592 F.3d at 419. SDM’s other
member, Magic Food Provision, LLC, is a wholly owned
subsidiary of Magic Johnson Enterprises, Inc., that is both
incorporated and has its principal place of business in
California.

                              14
    The amount in controversy also exceeds the $75,000
threshold in the diversity statute. See 28 U.S.C. § 1332(a).
The multi-million-dollar value of the Management Agreement
coupled with the nature of SDM’s claims for compensatory
damages, expectation damages, and punitive damages
precludes a finding that to “a legal certainty” SDM seeks a
recovery less than the jurisdictional amount. Auto-Owners Ins.
Co. v. Stevens & Ricci Inc., 835 F.3d 388, 395 (3d Cir. 2016)
(quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S.
283, 288–89 (1938)). Accordingly, this case also clears the
$75,000 amount-in-controversy threshold.

   C. The District Court’s Resolution of All Claims and
      Counterclaims

    The District Court resolved much of this dispute by
partially granting and partially denying the parties’ cross-
motions for summary judgment. That ruling decimated SDM’s
case. It lost its fraudulent inducement claim, its breach-of-
contract claims (which were based on Drexel’s alleged failure
to renegotiate in good faith and failure to pay enhanced
compensation for services during the Fall 2016 Semester), and
its alternative claim for unjust enrichment. The District Court
reached those outcomes despite denying Drexel’s motion to
strike three declarations by SDM employees under the sham
affidavit rule. But Drexel lost more than that motion: the
District Court also rejected its fraudulent inducement
counterclaim.

    Shortly before the scheduled trial on the remaining counts,
SDM moved for clarification on whether its breach-of-contract
claim for failure to pay a catering-shortfall invoice survived

                              15
summary judgment. Over Drexel’s objection, the District
Court permitted that claim.

    With that issue resolved, both parties agreed to arbitrate the
remaining claims and counterclaims. To that end, they jointly
filed a motion to dismiss and attached exhibits identifying the
remaining claims and counterclaims. The District Court
granted that motion and, through a separate document, entered
final judgment on December 6, 2018. See Fed. R. Civ. P.
58(a). Both parties then appealed.

   D. Appellate Jurisdiction

    As timely challenges to a final order, both appeals come
within this Court’s appellate jurisdiction. See 28 U.S.C.
§ 1291. The District Court’s judgment on December 6, 2018,
was final and appealable because all outstanding claims and
counterclaims had been resolved through the combination of
the summary judgment ruling and the subsequent order
dismissing the remaining claims. See Aluminum Co. of Am. v.
Beazer E., Inc., 124 F.3d 551, 559–62 (3d Cir. 1997) (holding
that an order dismissing and referring to private arbitration all
unresolved claims achieved finality). SDM’s notice of appeal,
filed on January 2, 2019, was within the time permitted by rule.
See Fed. R. App. P. 4(a)(1)(A) (requiring parties in a civil case
to file a notice of appeal within 30 days after entry of the
judgment).      Drexel’s notice of cross-appeal, filed on
January 11, 2019, was also timely. See Fed. R. App. P. 4(a)(3)
(providing that a notice of cross-appeal must be filed within
14 days of another party’s notice of appeal or within the time
otherwise remaining for the other party to appeal, whichever is
longer).

                               16
                     IV.    DISCUSSION

    The summary judgment standard has not substantively
changed since a trilogy of Supreme Court cases on the topic in
1986.2 By the text of Rule 56, summary judgment is
appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also
Brooks v. Kyler, 204 F.3d 102, 105 n.5 (3d Cir. 2000). As
explained by the Supreme Court, for a factual dispute to be
material, its resolution must have the potential to affect the
outcome of the suit. See Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). A dispute is genuine “if the
evidence is such that a reasonable jury could return a verdict
for the nonmoving party,” id., but “the mere existence of a
scintilla of evidence” favoring the non-moving party will not
prevent summary judgment, id. at 252. See also Jutrowski v.
Twp. of Riverdale, 904 F.3d 280, 288–89 (3d Cir. 2018). Still,
in assessing the genuineness of a potential factual dispute,
inferences from the underlying facts should be drawn in favor

2
  See Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Anderson
v. Liberty Lobby, Inc., 477 U.S. 242 (1986); Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986); see also
Fed. R. Civ. P. 56 advisory committee’s note to 1987
amendment (explaining that “[n]o substantive change is
intended”); id. advisory committee’s note to 2007 amendment
(explaining that “[t]hese changes are intended to be stylistic
only”); id. advisory committee’s note to 2009 amendment
(consolidating and revising the timing provisions for summary
judgment, but not affecting the standard); id. advisory
committee’s note to 2010 Amendment (“The standard for
granting summary judgment remains unchanged.”).

                              17
of the nonmoving party. See Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986); In re IKON
Office Solutions, Inc., 277 F.3d 658, 666 (3d Cir. 2002). But
if the nonmoving party “fails to make a showing sufficient to
establish the existence of an element essential to [its] case, and
on which [it] will bear the burden of proof at trial,” then
summary judgment is appropriate for the moving party.
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

    In exercising diversity jurisdiction, a federal court employs
the choice-of-law principles of its forum state to determine
which substantive law governs whether a party is entitled to
judgment as a matter of law. See Klaxon Co. v. Stentor Elec.
Mfg. Co., 313 U.S. 487, 496–97 (1941). Under Pennsylvania
choice-of-law rules, the first step involves assessing whether a
conflict exists between the substantive law of multiple
jurisdictions. See Auto-Owners, 835 F.3d at 404. But here, the
parties have identified no such conflict and have litigated this
case under Pennsylvania substantive law. Thus, substantive
issues should be decided as the Pennsylvania Supreme Court
“would rule if it were deciding this case.” Id. at 403 (quoting
Norfolk S. Ry. Co. v. Basell USA Inc., 512 F.3d 86, 91–92 (3d
Cir. 2008)); see generally Hanna v. Plumer, 380 U.S. 460, 471
(1965) (providing “rough[]” guidance that in diversity cases
“federal courts are to apply state ‘substantive’ law and federal
‘procedural’ law”). In making that prediction, the decisions of
intermediate Pennsylvania appellate courts receive “significant
weight in the absence of an indication that the highest state
court would rule otherwise.” Polselli v. Nationwide Mut. Fire
Ins. Co., 126 F.3d 524, 528 n.3 (3d Cir. 1997) (quoting City of
Phila. v. Lead Indus. Ass’n, 994 F.2d 112, 123 (3d Cir. 1993));
see also Pac. Emps. Ins. Co. v. Glob. Reinsurance Corp. of
Am., 693 F.3d 417, 433 (3d Cir. 2012).

                               18
   A. The Parties’ Competing Fraudulent Inducement
      Claims Have Different Fates: SodexoMAGIC’s
      Claim Survives; Drexel’s Counterclaim Does Not.

    The parties both sued each other for fraudulent inducement.
In its fraud claim against Drexel, SDM alleged that Drexel
misrepresented and concealed its future student-enrollment
projections, which led SDM to bid more favorably on the
Management Agreement. Drexel countersued for fraudulent
inducement on allegations that SDM’s BAFO included capital
contributions that SDM never intended to make and that such
deceit prompted Drexel to negotiate exclusively with SDM, not
Aramark.

    Both parties moved for summary judgment against their
opponent’s fraud claims. At the prompting of the District
Court, they each argued that the parol evidence rule did not bar
their fraud claim. They also asserted that the gist of the action
doctrine precluded the other’s fraud claim. SDM additionally
argued that Pennsylvania’s statute of limitations foreclosed
Drexel’s counterclaim.

    The District Court rejected the parties’ competing fraud
claims at summary judgment. See SodexoMAGIC, LLC v.
Drexel Univ., 333 F. Supp. 3d 426, 456, 466–67 (E.D. Pa.
2018). In so doing, the District Court found that SDM
produced evidence of a prima facie fraud claim but entered
summary judgment for Drexel due to the parol evidence rule
and the gist of the action doctrine. Id. at 445–57. The District
Court relied on those same affirmative defenses to reject
Drexel’s fraud claim. Id. at 466–67. In ruling for SDM on

                               19
those grounds, the District Court did not address SDM’s
statute-of-limitations defense.

    On appeal, each party challenges the District Court’s fraud
rulings. SDM argues that the District Court misapplied the
parol evidence rule and the gist of the action doctrine to its own
fraud claim. Consistent with that position, SDM does not
defend the District Court’s reliance on those principles to bar
Drexel’s fraud claim. Instead, it offers two alternative bases
for sustaining the judgment against Drexel’s fraud claim: it
renews the statute-of-limitations defense that the District Court
did not consider, and it argues for the first time on appeal that
Drexel has not produced evidence needed for the justifiable-
reliance and causation elements of a prima facie fraud case.
Drexel takes a more nuanced approach. It contends that the
parol evidence rule and the gist of the action doctrine do not
apply to its fraud counterclaim but that they do bar SDM’s
fraud claim. As an alternative, Drexel argues for the first time
on appeal that SDM did not demonstrate a misrepresentation
needed for a prima facie fraud case. For the reasons below,
SDM’s fraud claim survives summary judgment, but Drexel’s
fraud counterclaim does not.

       1. Common-Law Fraud Claims in Pennsylvania

    To redress injuries caused by intentional falsehoods – either
false statements or deliberately concealed facts – Pennsylvania
recognizes a civil action for fraud. See Moser v. DeSetta,
589 A.2d 679, 682 (Pa. 1991) (“The concealment of a material
fact can amount to a culpable misrepresentation no less than
does an intentional false statement.”). As developed in
Pennsylvania common law, a fraud claim consists of six
elements:

                               20
       (1) (a) A misrepresentation or
            (b) A concealment;
       (2) Which is material to the transaction at hand;
       (3) (a) Made with knowledge of its falsity or
           recklessness as to whether it is true or false
           (for a misrepresentation), or
            (b) Calculated to deceive (for a conceal-
            ment);
       (4) With the intent of misleading another into
           relying on it;
       (5) Justifiable reliance on the misrepresenta-
           tion; and
       (6) A resulting injury proximately caused by
           such reliance.

See Gibbs v. Ernst, 647 A.2d 882, 889 & n.12 (Pa. 1994);
Youndt v. First Nat’l Bank of Port Allegany, 868 A.2d 539, 545
(Pa. Super. Ct. 2005). To prevail, a fraud plaintiff must prove
each of those elements by clear and convincing evidence. See
Moser, 589 A.2d at 682; Gerfin v. Colonial Smelting & Refin.
Co., 97 A.2d 71, 72 (Pa. 1953). Upon such proof, a fraud
plaintiff may recover compensatory damages. See Neuman v.
Corn Exch. Nat’l Bank & Tr. Co., 51 A.2d 759, 766 (Pa. 1947)
(explaining that compensatory damages are recoverable for
fraudulent misrepresentation claims); Smith v. Renault,
564 A.2d 188, 193 (Pa. Super. Ct. 1989) (same); see also
McShea v. City of Phila., 995 A.2d 334, 347 n.5 (Pa. 2010)
(Baer, J., dissenting) (explaining that a “tort plaintiff usually
recovers the actual damages or compensatory damages that she
suffered because of the tort”).

                               21
    A successful fraud plaintiff may also recover punitive
damages. But to do so requires the additional showing “that
the defendant has acted in an outrageous fashion due to either
the defendant’s evil motive or [its] reckless indifference to the
rights of others.” Phillips v. Cricket Lighters, 883 A.2d 439,
445 (Pa. 2005) (internal quotation marks omitted); see also
Feld v. Merriam, 485 A.2d 742, 747–48 (Pa. 1984) (“Punitive
damages must be based on conduct which is malicious,
wanton, reckless, willful, or oppressive.” (internal quotation
marks omitted)). Thus, proof of the six elements of fraud
without additional evidence of outrageous conduct enables a
fraud plaintiff to recover compensatory damages but not
punitive damages. See Pittsburgh Live, Inc. v. Servov,
615 A.2d 438, 442 (Pa. Super. Ct. 1992) (explaining that even
when fraud supports an award of compensatory damages, “the
same fraudulent conduct is not sufficient to [support] an award
of punitive damages without more”).

    The six elements of fraud apply to the two subspecies of
fraud claims related to the formation of contracts: fraudulent
inducement and fraud in the execution. A claim for fraudulent
inducement requires proof of the six elements and is available
when a person under no duty to enter a contract was deceived
into doing so. See Coll. Watercolor Grp., Inc. v. William H.
Newbauer, Inc., 360 A.2d 200, 206 (Pa. 1976) (quoting
Restatement (Second) of Contracts § 476 (1932)); see also
Justin Sweet, Promissory Fraud and the Parol Evidence Rule,
49 Calif. L. Rev. 877, 888 (1961) (“Fraud in the inducement
occurs when one party, by means of false statements of fact,
warranties, or promises, misleads another into contracting.”).
A claim for fraud in the execution consists of the same six
elements but with a different focus: proof that a party “was

                               22
mistaken as to the terms and actual contents of the agreement
[it] executed due to the other’s fraud.” Toy v. Metro. Life Ins.
Co., 928 A.2d 186, 206 (Pa. 2007); see also Sweet, Promissory
Fraud, supra, at 888 (defining “fraud in the execution” as
“deception by one party about the contents of the written
instrument”). Here, both parties’ claims are for fraudulent
inducement, not fraud in the execution.

       2. SodexoMAGIC’s Fraudulent Inducement Claim for
          Compensatory Damages Survives Summary Judg-
          ment.

          a. SodexoMAGIC Presents Sufficient Evidence of a
             Misrepresentation as Well as Concealment.

   In attacking SDM’s fraudulent inducement claim, Drexel
argues that SDM cannot prove the misrepresentation element.
But SDM produces evidence that would allow a jury to find a
misrepresentation or concealment by clear and convincing
evidence.

    The theme of SDM’s fraudulent inducement claim is that
Drexel provided it with one set of projections for future student
enrollment but then used another set of projections for its
internal purposes. SDM cites Drexel’s phase-two solicitation
from July 2014 that included an estimate of an incoming first-
year class of 3,137 students for the 2014–15 academic year.
And SDM also produces other evidence that, less than a month
later, in August 2014, Drexel calculated its budget based on an
estimated first-year class of 2,800 students, roughly 300 less
students than the figure it provided SDM. Ultimately, 2,926
first-year students enrolled at Drexel for the 2014–15 academic
year.

                               23
    Those figures show a disconnect between what Drexel told
bidders during the summer of 2014 and its actual student
enrollment projections. But SDM did not execute the
Management Agreement until May 2015 – after it provided on-
campus dining services for the 2014–15 academic year. Thus,
even if Drexel provided a false projection of its first-year
students for the 2014–15 academic year, SDM would struggle
mightily to prove that it justifiably relied on that figure in May
2015, when it finalized the Management Agreement. See Toy,
928 A.2d at 207 (explaining that a person “is not justified in
relying upon the truth of an allegedly fraudulent
misrepresentation if he knows it to be false or if its falsity is
obvious”).

    But that is not SDM’s only evidence of Drexel’s deception
regarding its long-term student-enrollment projections. In its
initial solicitation for bids, Drexel represented that it would
share “as much detail about the desired relationship and facts
around the current program as can be reasonably provided.”
Request for Proposal (SA131). And in providing information
to the bidders, Drexel noted that its Strategic Plan called for an
enrollment increase from 26,132 students to 34,000 students
by 2021. Similarly, three SDM employees, who were involved
in various phases of the bidding and negotiation process for the
Management Agreement, signed declarations that Drexel
“repeatedly represented . . . that freshman enrollment would
continue to grow over the ten-year life of the contract, or at the
very least, enrollment would stay flat for the first three years.”
Sherman Decl. ¶ 23 (JA247); Riccio Decl. ¶ 23 (JA254–55);
Arnett Decl. ¶ 9 (JA259). Those same employees also averred
that Drexel never told them during negotiations “that there was
a risk of enrollment decline” or “that enrollment was already

                               24
declining, and that Drexel was budgeting for that decline.”
Sherman Decl. ¶ 22 (JA247); Riccio Decl. ¶ 22 (JA254);
Arnett Decl. ¶ 9 (JA259). But at their prior depositions those
same employees testified somewhat differently, with one of
them recounting that Drexel represented that student
enrollment “might go up” or “it might go down.” Sherman
Dep. 225:17–226:1 (JA200–01).

    Some of SDM’s strongest evidence of deceit comes not
from its own witnesses but from Drexel’s employees. In email
correspondence, Drexel’s Executive Vice President recounted
that “[w]hen [Drexel] contracted with Sodexo two years ago,
we never told them we were dialing back our freshman
enrollment.” Email from Helen Bowman, Executive Vice
President, Drexel, to Robert Francis, Drexel (Apr. 22, 2016)
(SA529). Another internal memorandum prepared in early
May 2015 reveals that Drexel expected that its first-year
enrollment would decline in 2015–16, leading to an even lower
budgetary forecast of a 2,600 student first-year class.

    But Drexel was not entirely secretive about its plan to
decrease first-year student enrollment while it negotiated the
Management Agreement. A March 2015 article from a leading
industry news provider reported that Drexel was “making
major changes in admissions.” Ry Rivard, Drexel U. Charts A
New Course For Itself, Inside Higher Ed (Mar. 27, 2015)
(SA1546). The article explained that after it received a report
from a consulting firm in 2013, Drexel decided to shift
approaches away from its enrollment target of 34,000 students
by 2021, and it “was now looking to slow growth.” SA1546–
47.

                              25
     Nonetheless, SDM alleges that it did not gain insight into
the full extent of Drexel’s student enrollment decline until after
it signed the Management Agreement. The same day that the
parties executed the Management Agreement, The
Philadelphia Inquirer published an article in which Drexel’s
Senior Vice President for Enrollment Management reported
that in the Spring, Drexel had “overhauled its admission
process” and now anticipated a decline in freshman enrollment
for Fall 2015. Snyder, Enrollment Change at Drexel, supra
(SA1553–54). Shortly afterwards, in June 2015, Drexel’s
President emailed the Drexel community, including SDM, with
notice not only that it was now expecting a decline in first-year
student enrollment but also that Drexel had “focused on
attracting a smaller pool of exceptionally qualified applicants.”
Email from John A. Fry, President, Drexel, to Drexel Listserv
(June 8, 2015) (SA527). In response to the shock of that news,
SDM emailed a request for an update on the precise enrollment
for the Fall 2015 Semester first-year class, and the Executive
Director of one of Drexel’s student centers remarked, “I guess
they were going to find out sooner or later.” Email from
Donald Liberati, Executive Director, Drexel, to Rita LaRue,
Senior Associate Vice President, Drexel (June 9, 2015)
(SA526). Ultimately, less than a month after executing the
Management Agreement, Drexel informed SDM that its
incoming class size would be lower than the year before –
projecting it to be between 2,600 and 2,700 students.

    Considered in aggregate, while not airtight, this evidence
would allow a reasonable jury to conclude that Drexel misled
SDM or concealed its true intention from SDM until after
finalization of the Management Agreement. If a jury resolves
this genuine dispute of material fact in SDM’s favor, then SDM

                               26
could recover compensatory damages. See Neuman, 51 A.2d
at 766.

    But SDM’s evidence does not permit recovery of punitive
damages. Under Pennsylvania law, the same evidence used to
establish fraud cannot be the sole support for an award of
punitive damages. See Smith, 564 A.2d at 193 (“If the rule
were otherwise, punitive damages could be awarded in all
fraud cases. This is not the law.”); see also Pittsburgh Live,
615 A.2d at 442. Something more is required: outrageous
conduct. See Phillips, 883 A.2d at 445. And SDM does not
come forth with sufficient evidence3 that Drexel acted with an

3
  The standard of proof required for punitive damages for a
fraud claim is not clear under Pennsylvania law. See, e.g.,
Weston v. Northampton Pers. Care, Inc., 62 A.3d 947, 960–61
(2013) (explaining that fraud claims require clear-and-
convincing proof but not addressing standard of proof for
punitive damages); Pittsburgh Live, 615 A.2d at 441–42
(same). The likely answer is that the standard of proof for
punitive damages mirrors the standard of proof for the
underlying claim. Compare Martin v. Johns-Manville Corp.,
494 A.2d 1088, 1098 (Pa. 1985) (applying a preponderance
standard for punitive damages in a product liability case, which
otherwise requires such proof), abrogated on other grounds by
Kirkbride v. Lisbon Contractors, Inc., 555 A.2d 800 (Pa.
1989), with Hepps v. Phila. Newspapers, Inc., 485 A.2d 374,
389 (1984) (applying a clear-and-convincing standard for
punitive damages for a defamation claim, which otherwise
requires such proof), rev’d on other grounds, 475 U.S. 767
(1986), and Polselli v. Nationwide Mut. Fire Ins. Co., 23 F.3d
747, 750 (3d Cir. 1994) (applying a clear-and-convincing
standard for punitive damages for a claim of bad-faith conduct

                              27
evil motive or that Drexel’s conduct was malicious, vindictive,
or evidenced a wholly wanton disregard for SDM’s rights. See
id. Without such evidence, SDM’s claim for punitive damages
fails at summary judgment. See Celotex, 477 U.S. at 322.

          b. The District Court Did Not Abuse Its Discretion
             in Denying Drexel’s Motion to Strike Declara-
             tions by Three SodexoMAGIC Witnesses.

    By way of counterargument, Drexel invokes the sham
affidavit rule to contend that the District Court abused its
discretion by considering three declarations by SDM
employees. See SodexoMAGIC, 333 F. Supp. 3d at 443
(reasoning that the witnesses’ declarations could be reconciled
with their prior deposition testimony). The sham affidavit rule
allows a court to disregard a later statement by a deponent on
two conditions: the later statement contradicts the witness’s
deposition testimony, and the discrepancy between the two
statements is neither supported by record evidence nor
otherwise satisfactorily explained. See Daubert, 861 F.3d at
391–92; Jiminez v. All Am. Rathskeller, Inc., 503 F.3d 247, 254
(3d Cir. 2007) (explaining that “courts generally have refused
to disregard the affidavit” where there is “independent
evidence in the record to bolster an otherwise questionable
affidavit” (internal quotation marks omitted)); see generally
10A Charles Alan Wright, Arthur R. Miller & Mary K. Kane,

by insurers, which otherwise requires such proof). If so, then
SDM would need to supply clear-and-convincing evidence of
outrageous conduct, and it does not. But due to the paucity of
its evidence of such conduct, SDM’s punitive damages claim
would similarly fail at summary judgment under the
preponderance standard.

                              28
Federal Practice and Procedure § 2726.1 (4th ed. 2021) (“[A]n
interested witness who has given clear answers to
unambiguous questions cannot create a conflict and resist
summary judgment with an affidavit that is clearly
contradictory, without providing a satisfactory explanation of
why the testimony is changed.”). On abuse-of-discretion
review, the District Court’s decision not to apply the sham
affidavit rule holds up – by a narrow margin.

   Three SDM witnesses involved in negotiating the
Management Agreement testified at their depositions about
representations that Drexel made about future student
enrollment. One SDM witness testified that Drexel could not
predict future student enrollment and that Drexel was
noncommittal about future student enrollment:

      Q.     In every meeting that you had with
             [Drexel’s representative], did she not say
             that nobody could predict what the
             freshman enrollment would be going
             forward?
      A.     Every time –
      Q.     Well, answer my question.
      A.     Yes.
                            ***
      Q.     It could go up, it could go down. They
             didn’t know exactly where it would be.
      A.     What I recollect is a noncommittal, they
             didn’t know exactly where it would be.

                             29
Riccio Dep. 101:10–15; 141:20–23 (JA206–07); see also Hunt
Dep. 90:16–91:3 (JA211–12) (adopting that testimony through
SDM’s designated Rule 30(b)(6) corporate witness as SDM’s
official position). A second witness testified similarly – that
Drexel was noncommittal and stated that future student
enrollment might increase or it might decrease:

       Q.     [Drexel’s representative] told you she
              couldn’t make any commitment as to
              what the enrollment would be, correct?
       A.     Correct.
       Q.     One way or the other, correct?
       A.     Correct.
       Q.     It might go up, it might go down?
       A.     Correct.

Sherman Dep. 225:17–226:1 (JA200–01). A third witness
testified that she knew in March 2015 that Drexel’s growth
initiatives did not include increasing the first-year class size:

       Q.     The second sentence you say, “Jim needs
              to know that the financial model did not
              hurdle at the new understanding of
              [Drexel’s] growth initiatives (no new
              students – just growing retention, grad
              students and online students).” Do you
              see that?
       A.     Yes.
       Q.     So that’s what Drexel told you, right?

                               30
       A.     That was the knowledge that I had on
              3/18.

Arnett Dep. 218:12–23 (SA1744).

    Later, each of those witnesses signed declarations under
penalty of perjury with statements about the negotiation of the
Management Agreement. See Sherman Decl. (JA244–49);
Riccio Decl. (JA251–56); Arnett Decl. (JA258–61); see also
28 U.S.C. § 1746. Most of those averments do not contradict
the witnesses’ prior deposition testimony. For example, the
declarations state that Drexel never told SDM that, following
recommendations from a consulting firm, it implemented an
initiative that could affect student enrollment and revenues for
the first few years of its implementation. See Sherman
Decl. ¶¶ 6–9, 11 (JA245–46); Riccio Decl. ¶¶ 6–9, 11 (JA252–
53); Arnett Decl. ¶¶ 6–7 (JA259).

    The sham affidavit rule does not apply to those
noncontradictory portions of the declarations. Because
summary judgment does not present an occasion to make
credibility assessments, see Jiminez, 503 F.3d at 253, the sham
affidavit rule does not permit striking the entirety of a later-
provided affidavit or declaration since doing so would require
a broader assessment of the witness’s credibility. Thus, the
sham affidavit rule permits striking only contradictory
statements in later-provided affidavits or declarations.

    Here, the witnesses’ declarations also contained statements
in tension with their deposition testimony. All three witnesses
averred that Drexel repeatedly represented during the bidding
and negotiation process “that freshman enrollment would
continue to grow over the ten-year life of the contract, or at the

                               31
very least, enrollment would stay flat for the first three years.”
Riccio Decl. ¶ 23 (JA254–55); Sherman Decl. ¶ 23 (JA247);
Arnett Decl. ¶ 9 (JA259). The declarations also state that the
witnesses first learned that Drexel expected a significant
decline in first-year student enrollment through the ‘Dear
Colleague’ letter sent after SDM had executed the
Management Agreement. See Riccio Decl. ¶ 31 (JA256);
Sherman Decl. ¶ 31 (JA249); Arnett Decl. ¶ 18 (JA261).

    For the first two witnesses, it is hard to reconcile their later
statements with their prior deposition testimony. At their
depositions, they testified that Drexel was non-committal
about future student enrollment. See Riccio Dep. 101:10–15;
141:20–23 (JA206–07); Sherman Dep. 225:17–226:1 (JA200–
01). That is different from their later statements that Drexel
consistently predicted increased or steady student enrollment.
See Riccio Decl. ¶ 23 (JA254–55); Sherman Decl. ¶ 23
(JA247). But the sham affidavit rule does not reject later
statements solely because they conflict with prior deposition
testimony. See Baer v. Chase, 392 F.3d 609, 624 (3d Cir.
2004) (“[M]erely 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.”).     When a later statement is supported by
independent record evidence, courts generally refuse to strike
those statements. See id. at 625. And record evidence indicates
that in its initial phase-one solicitation Drexel predicted that
student enrollment would increase through 2021.

    Permitting consideration of the third witness’s seemingly
contradictory statements also requires a fine line. That witness
testified that she had a “new understanding” of Drexel’s
student enrollment in March 2015. Arnett Dep. 218:12–23

                                32
(SA1744). But in her later declaration she stated that she first
learned that Drexel expected a “significant decline” in first-
year student enrollment from the ‘Dear Colleague’ letter in
June 2015. Arnett Decl. ¶ 18 (JA261). Most generously, those
statements can be harmonized by reading them as reflecting
emerging knowledge about Drexel’s plans for future
enrollment: the witness had knowledge in March 2015 that
enrollment would not increase and learned later in June 2015
that enrollment would decline significantly. That construction
of these statements, coupled with the lenient standard of
appellate review, leads to the conclusion that the District Court
did not abuse its discretion in refusing to apply the sham
affidavit rule.

    For greater repose, SDM’s fraud claim would survive
summary judgment even if the sham affidavit rule did exclude
the challenged statements in these three declarations. The
sham affidavit rule does not permit a court to reject a witness’s
prior deposition testimony. And here, one of SDM’s declarants
testified at his earlier deposition that Drexel held open the
possibility that first-year student enrollment “might go up.”
Sherman Dep. 225:23–226:1 (JA200–01). But if Drexel were
following a plan to dramatically reduce first-year enrollment,
a reasonable jury could find that it was a misrepresentation for
Drexel to state that student enrollment could still increase.
Most significantly, SDM’s evidence of a misrepresentation or
concealment does not come solely from these three witnesses’
testimony or declarations. As explained above, statements by
Drexel employees also suggest that Drexel deceived SDM
about its plans for future student enrollment.4

4
  This decision does not preclude a jury from considering these
three witnesses’ declarations in assessing their credibility – if

                               33
           c. Drexel’s Remaining Counterarguments for
              Upholding Summary Judgment in Its Favor Also
              Fail.

   Drexel attacks SDM’s prima facie case of fraudulent
inducement on three additional grounds. None of those have
merit.

    Drexel argues that SDM’s fraud claim fails as a matter of
law. According to Drexel, its student-enrollment projections
were forward-looking statements, and an entity cannot be
liable in fraud for incorrectly predicting the future. In general,
that is correct: due to the known unreliability of predicting the
future, forward-looking statements typically cannot constitute
misrepresentations for purposes of a fraud claim. See Coll.
Watercolor, 360 A.2d at 206. But that principle does not apply
when an entity misrepresents its true future projections. And
that is the premise of SDM’s fraud claim. It does not sue
because Drexel’s projections did not come true but rather
because it believes that Drexel provided false projections.
Such conduct qualifies as “a misrepresentation of an existing
fact” that could support a fraud claim. Id. (citing Rose v. Rose,
123 A.2d 693, 697 (Pa. 1956)); see also Nat’l Data Payment
Sys., Inc. v. Meridian Bank, 212 F.3d 849, 858 (3d Cir. 2000)
(citing College Watercolor, 360 A.2d at 206, for the
proposition that, under Pennsylvania law, statements about
plans or projections may be fraudulent if they “knowingly
misstate[]the speaker’s true state of mind when made”).

otherwise permissible under the Federal Rules of Evidence.
See, e.g., Fed. R. Evid. 613, 801(d)(1)(A).

                               34
Because false future projections qualify as misrepresentations,
SDM’s fraud claim is not barred as a matter of law.

    Drexel also submits that it did not commit fraud because it
had no duty to inform SDM that it would miss its future
enrollment targets. That is incorrect. Drexel had a duty not to
misrepresent its student enrollment projections, and even if it
provided accurate initial projections, when those facts
materially changed, it had a duty to not intentionally conceal
that development. See Neuman, 51 A.2d at 764 (“The
deliberate nondisclosure of a material fact amounts to culpable
misrepresentation no less than does an intentional affirmation
of a material falsity.” (citing Restatement (Second) of Torts
§ 551)); see also Restatement (Second) of Torts § 551(2)(c)
cmt. f (explaining that a person who makes a representation
initially believed to have been true but “remains silent after he
has learned that it is untrue and that the person to whom it is
made is relying upon it in a transaction with him is morally and
legally in the same position as if he knew that his statement
was false when made”).

    Drexel’s final counterargument has undertones of
concession. Drexel asserts that SDM cannot sue for fraud,
despite any misrepresentations or concealments that Drexel
may have made, because SDM learned the true enrollment
numbers shortly after the Management Agreement was
finalized and SDM should have terminated the contract for
convenience rather than perform. But Pennsylvania law is not
so unkind to the defrauded. Instead, it allows for an election
of remedy: a defrauded party may affirm the contract and sue
for tort damages or pursue contract damages. See Tilghman v.
Dollenberg, 213 A.2d 324, 327 (Pa. 1965) (“The affirmance of
a contract induced by fraud of the seller does not extinguish the

                               35
right of the purchaser, and it is not a waiver of the fraud, nor
does it bar the right of the purchaser to recover damages for the
fraud.”); see also Allied Erecting & Dismantling, Co. v. USX
Corp., 249 F.3d 191, 199 (3d Cir. 2001) (“[A] party can affirm
a contract over a period of time without waiving a claim to
fraudulent inducement.”). Thus, SDM was not required to
terminate the Management Agreement once it suspected fraud;
it was allowed to perform and seek remedies in tort, which it
now does.

    For these reasons, Drexel’s counterarguments lack merit,
and the evidence produced by SDM would allow a reasonable
jury the option of concluding by clear and convincing evidence
that Drexel misrepresented or concealed its own projections for
student enrollment. See Moser, 589 A.2d at 682 (“[A] party
alleging fraud has the burden of proving the same by clear and
convincing evidence.”). But without additional evidence of
outrageous conduct by Drexel, SDM cannot proceed with its
claim for punitive damages. See Phillips, 883 A.2d at 445
(explaining that punitive damages claims require evidence of
outrageous conduct); Pittsburgh Live, 615 A.2d at 442
(explaining that fraud plaintiff cannot rely solely on evidence
supporting underlying fraud claim).

       3. The Parol Evidence Rule Does Not Bar
          SodexoMAGIC’s Claim for Fraudulent Inducement.

   In another effort to defeat SDM’s fraud claim, Drexel
invokes Pennsylvania’s parol evidence rule. Drexel argues that
because the Management Agreement contains an integration
clause, the parol evidence rule prevents the use of extrinsic
evidence to establish the alleged misrepresentations at the heart
of SDM’s fraud claim. For the reasons below, Drexel’s

                               36
argument overextends Pennsylvania’s parol evidence rule,
which does not preclude SDM’s fraud claim.

           a. Integration Clauses, the Parol Evidence Rule,
              and Fraudulent Inducement Claims Under Penn-
              sylvania Law.

    The parol evidence rule attaches legal consequences to an
integrated contract – a contract that is the only agreement
between the parties on a specific topic. See Restatement
(Second) Contracts § 209(1) (“An integrated agreement is a
writing or writings constituting a final expression of one or
more terms of an agreement.”). To demonstrate integration,
parties commonly include an integration clause in a contract.
Such a clause typically states that the contract contains the final
expression of all the terms of the parties’ agreement and that it
supersedes all prior agreements on the subject matter. For
integrated contracts, the parol evidence rule prevents the use of
extrinsic evidence to add to or modify the contract’s terms:

       Once a writing is determined to be the parties’
       entire contract, the parol evidence rule applies
       and evidence of any previous oral or written
       negotiations or agreements involving the same
       subject matter as the contract is almost always
       inadmissible to explain or vary the terms of the
       contract.

Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436–
37 (Pa. 2004) (emphasis added).5

5
  The parol evidence rule is not absolute; Pennsylvania
recognizes four exceptions. Extrinsic evidence may be used to

                                37
    Under that formulation, the parol evidence rule is a
substantive rule of contract law that prevents the use of
extrinsic evidence to nullify, modify, or augment the terms of
a contract. See id.; see also Rose v. Food Fair Stores, Inc.,
262 A.2d 851, 854 (Pa. 1970) (holding that the parol evidence
rule precludes proof of oral representations that would
“directly contradict the clear meaning of the written contract”);
Nicolella v. Palmer, 248 A.2d 20, 22–23 (Pa. 1968) (holding
that for an integrated contract, the parol evidence rule prevents
extrinsic evidence to establish an additional contract term).
Importantly, the rule does not prevent the use of extrinsic
evidence for other purposes. See, e.g., Berger v. Pittsburgh
Auto Equip. Co., 127 A.2d 334, 335 (Pa. 1956) (allowing
evidence of a misrepresentation “not to alter or vary” the terms
of an integrated contract, but to rescind it). And for fraudulent
inducement claims, the purpose of extrinsic evidence is to
prove a precontractual misrepresentation or concealment – not
to alter or vary the terms of the contract. See Blumenstock v.
Gibson, 811 A.2d 1029, 1036 (Pa. Super. Ct. 2002) (explaining
that, for fraudulent inducement claims, the party seeks to offer

modify contract terms when an integrated contract is
ambiguous or to add contract terms omitted by fraud in the
execution, by accident, or by mistake. See Yocca, 854 A.2d at
437 (stating that parol evidence is admissible to explain or
clarify an ambiguous term in a contract “whether the ambiguity
is created by the language of the instrument or by extrinsic or
collateral circumstances” (quoting In re Est. of Herr, 161 A.2d
32, 34 (Pa. 1960))); Nicolella v. Palmer, 248 A.2d 20, 22 (Pa.
1968) (stating that extrinsic evidence to vary terms of an
integrated agreement is barred “in the absence of fraud,
accident, or mistake”). None of those are at issue in this case.

                               38
extrinsic evidence to show not “that the representations were
omitted from the written agreement, but, rather, . . . that the
representations were fraudulently made”); 1726 Cherry St.
P’Ship v. Bell Atl. Props., Inc., 653 A.2d 663, 666 (Pa. Super.
Ct. 1995) (same). Thus, the parol evidence rule acting alone
does not prevent fraudulent inducement claims arising out of
integrated contracts. See generally Sweet, Promissory Fraud,
supra, at 877 (“It is generally agreed that the parol evidence
rule does not prevent admission of evidence of fraud.”).

    A contract may, however, contain fraud-insulating clauses.
Those provisions take many forms, but they often have a
common objective: to prevent a party from satisfying the
justifiable-reliance element of a fraudulent inducement claim.
One such fraud-insulating term is a no-reliance clause, through
which a party expressly disclaims reliance on another party’s
precontractual representations.6 Other similar fraud-insulating
provisions are clauses that assume joint responsibility for

6
  See Glenn D. West & Kim M. Shah, Debunking the Myth of
the Sandbagging Buyer: When Sellers Ask Buyers to Agree to
Anti-Sandbagging Clauses, Who Is Sandbagging Whom?,
11 The M&A Lawyer, no. 1, Jan. 2007, at 4 (explaining that
no-reliance clauses “relieve the seller of extra-contractual tort
claims” based on precontractual representations because “the
existence of such a clause makes the buyer’s claim of reliance
on such statements to its detriment unjustified and
unreasonable” (citation omitted)); see also Allen Blair, A
Matter of Trust: Should No-Reliance Clauses Bar Claims for
Fraudulent Inducement of Contract?, 92 Marq. L. Rev. 423,
468–75 (2009) (explaining that sophisticated commercial
parties bargain for no-reliance clauses in their agreements for
many reasons).

                               39
precontractual representations, see, e.g., Bardwell v. Willis Co.,
100 A.2d 102, 103–04 (Pa. 1953), or that state that the
representations in the contract either supersede all prior
representations, see, e.g., Yocca, 854 A.2d at 431, or are the
only representations made, see, e.g., 1726 Cherry St., 653 A.2d
at 670.

    When an integrated contract includes a fraud-insulating
term – to form what may be called an ‘integration-plus’
contract – that extends the reach of the parol evidence rule. In
that circumstance, the parol evidence rule prevents the use of
extrinsic evidence to vary the fraud-insulating term. And
without such evidence, it is virtually impossible to establish the
justifiable-reliance element needed for a fraud claim. As the
Pennsylvania Supreme Court has explained for integrated
contracts, “due to the parol evidence rule’s operation, a party
cannot be said to have justifiably relied on prior
representations that he has superseded and disclaimed.” Toy,
928 A.2d at 207 (emphasis added).

    For example, consider an integrated contract between
sophisticated parties with a no-reliance clause. There, the parol
evidence rule prevents the use of extrinsic evidence to vary the
terms of the contract, including the no-reliance clause. Left
undisturbed by extrinsic evidence, a no-reliance clause,
through which a party disclaims reliance on any prior
representations, makes it legally impossible for a party to
establish that it justifiably relied on a precontractual
representation. See Glenn D. West & W. Benton Lewis, Jr.,
Contracting to Avoid Extra-Contractual Liability – Can Your
Contractual Deal Ever Really Be the “Entire” Deal?, 64 Bus.
Law. 999, 1018 (2009) (explaining that no-reliance clauses
“purport to preclude proof of the mandatory reliance element

                               40
of extra-contractual misrepresentation actions” (internal
quotation marks omitted)); Joseph Wylie, Using No-Reliance
Clauses to Prevent Fraud-in-the-Inducement Claims, 92 Ill.
Bar J. 536, 539 (2004) (“[A] party agreeing to [a no-reliance]
clause in essence agrees in advance to waive any causes of
action it may have for fraud.”). Thus, through the operation of
the parol evidence rule, a no-reliance clause in an integrated
contract precludes fraudulent inducement claims that depend
on a precontractual misrepresentation.

    Pennsylvania caselaw abounds with similar examples. A
seminal application of this principle occurred in Bardwell v.
Willis Co., when the Pennsylvania Supreme Court rejected a
tort claim for deceit arising out of an integrated contract with
joint diligence and joint representation terms. 100 A.2d at
104–05. There, the Court reasoned that the parol evidence rule
prevented extrinsic evidence from nullifying those terms, and
with those provisions unaltered, the complaining party had no
redress in tort. See id. The Pennsylvania Supreme Court
reached a similar conclusion for an integrated contract that
contained a clause stating that the contract superseded “any
representations or agreements previously made or entered into
by the parties hereto.” Yocca, 854 A.2d at 431 (emphasis
added).      Because the parol evidence rule prevented
modification of that term through extrinsic evidence, the
complaining party could not demonstrate justifiable reliance on
prior disclaimed representations. See id. at 439. Pennsylvania
courts treat integrated contracts with no-additional-
representations clauses similarly: the parol evidence rule
prevents fraudulent inducement claims based on precontractual
misrepresentations. See 1726 Cherry St., 653 A.2d at 670
(holding that the parol evidence rule prevented the use of
evidence of a prior representation when the integrated contract

                              41
stated that there were “no other representations or
understandings” between the parties); see also Blumenstock,
811 A.2d at 1036 (“[T]he case law clearly holds that a party
cannot justifiably rely upon prior oral representations yet sign
a contract denying the existence of those representations.”);
McGuire v. Schneider, Inc., 534 A.2d 115, 119 (Pa. Super. Ct.
1987) (same).

    In sum, Pennsylvania’s parol evidence rule does not
prevent fraudulent inducement claims for all integrated
contracts, but the rule may preclude such claims based on
misrepresentations for ‘integration-plus’ contracts – integrated
contracts with fraud-insulating provisions. See Youndt,
868 A.2d at 546 (explaining that “parol evidence is
inadmissible where the contract contains terms that deny the
existence of representations regarding the subject matter of the
alleged fraud,” but “when the contract contains no such term
denying the existence of such representations, parol evidence
is admissible to show fraud in the inducement”).

          b. The Management Agreement Lacks Fraud-Insu-
             lating Provisions, so the Parol Evidence Rule
             Does Not Preclude SodexoMAGIC’s Fraudulent
             Inducement Claim.

    The parol evidence rule does not apply to SDM’s fraud
claim because, although the Management Agreement contains
an integration clause, it lacks fraud-insulating provisions. The
Management Agreement’s integration clause references prior
agreements; it does not mention, much less disclaim, prior
representations:

                              42
       This Agreement contains all agreements of the
       parties with respect to matters covered herein,
       superseding any prior agreements, and may not
       be changed other than by an agreement in writing
       signed by the parties hereto.

Management Agreement § 10.11 (emphasis added) (SA66).
And lest any uncertainty remain, the Management Agreement
also includes an express reliance clause that states explicitly
that the parties relied on certain categories of prior assumptions
and representations:

       The financial terms set forth in this Agreement
       and      other     obligations     assumed      by
       SodexoMAGIC hereunder are based on
       conditions in existence on the date
       SodexoMAGIC           commences        operations,
       including by way of example [Drexel’s] student
       population; labor, food and supply costs; and
       federal, state and local sales, use and excise tax.
       In addition, each party has relied on
       representations regarding existing and future
       conditions and projections made by the other in
       connection with the negotiation and execution of
       this Agreement.

Id. § 9.1 (emphases added) (SA57). One category of those
recognized representations – projections about future student
population – is the basis for SDM’s fraud claim.

    Under these circumstances, the parol evidence rule does not
preclude SDM’s fraudulent inducement claim. SDM seeks to
introduce extrinsic evidence of Drexel’s precontractual

                               43
misrepresentations of its student enrollment projections. But it
does not proffer that evidence for the purpose prohibited by the
parol evidence rule: to nullify, vary, or supplement a
contractual term. See Yocca, 854 A.2d at 436–37. Rather,
SDM accepts the terms of the Management Agreement as they
are – in particular, those related to its obligations to make
investments and provide dining services – and it seeks to use
the extrinsic evidence to prove that Drexel fraudulently
induced it to enter into the Management Agreement. Nor does
the Management Agreement contain a fraud-insulating
provision. It does not disclaim reliance on precontractual
representations, and it does not state that representations in the
Management Agreement are exclusive or supersede all prior
representations. Thus, here, the parol evidence rule does not
prevent the use of extrinsic evidence to prove precontractual
misrepresentations. See Youndt, 868 A.2d at 546.7

       4. Pennsylvania’s Gist of the Action Doctrine Does
          Not Bar SodexoMAGIC’s Fraud Claim.

    The District Court also barred SDM’s fraud claim under
Pennsylvania’s gist of the action doctrine. It did so on the
theory that Drexel owed SDM no duty apart from those
imposed by the Management Agreement and thus SDM’s fraud
claim was prohibitively duplicative of its breach-of-contract
claim. See SodexoMAGIC, 333 F. Supp. 3d at 454–56. That is
mistaken.

7
  Because the Management Agreement does not contain any
fraud-insulating provisions regarding intentional concealments
of material facts, the parol evidence rule likewise does not bar
SDM from pursuing a fraudulent inducement claim based on
concealment.

                               44
    Under Pennsylvania law, the gist of the action doctrine
prevents a purely contractual duty from serving as the basis for
a tort claim. See Bruno v. Erie Ins. Co., 106 A.3d 48, 65 (Pa.
2014). Tort actions arise from the breach of a duty owed to
another as a matter of social policy, while breach-of-contract
actions arise from the breach of a duty created by contract. See
id. at 68 (explaining that tort claims involve a “violation of a
broader social duty owed to all individuals” and thus exist
“regardless of the contract”); eToll, Inc. v. Elias/Savion
Advert., Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002); Bohler-
Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79, 103–
04 (3d Cir. 2001). When a duty is created by contract, the gist
of the action doctrine requires that a claim for a breach of that
duty be brought in contract, not tort. See Bruno, 106 A.3d at
68 (“[If] the duty breached is one created by the parties by the
terms of their contract . . . then the claim is to be viewed as one
for breach of contract.”).

    The doctrine has a long lineage in Pennsylvania, having its
roots in precedents from the first half of the nineteenth century.
See generally id. at 60–64 (tracing this principle from its
origins to the present). Examples of its application include the
case of a bailor who was alleged to have negligently misplaced
a bailment, but who under the doctrine could not be sued in
tort. See McCahan v. Hirst, 7 Watts 175, 179 (Pa. 1838). As
the Pennsylvania Supreme Court more recently explained,
without the bailment agreement, the bailor had no duty to
properly handle the property, and the gist of the action doctrine
barred the tort claim. Bruno, 106 A.3d at 63 (citing McCahan,
7 Watts at 179). Similarly, a party who contractually promised
to safely keep and pasture horses was not liable in tort for
negligently keeping and pasturing the horses because, absent

                                45
the contract, that party had no duty to keep and pasture those
horses. See id. at 64 (citing Cook v. Haggarty, 36 Pa. 67, 69
(Pa. 1859)). In sum, under the gist of the action doctrine, “the
nature of the duty alleged to have been breached . . . [is] the
critical determinative factor,” with the doctrine permitting tort
claims that exist “regardless of the contract.” Id. at 68.

    Under the doctrine, it is still possible for the same act to
breach both a duty under tort law and a contractual duty. One
such example occurred when a party contractually promised to
maintain a fence but then removed a portion of the fence near
a quarry and a horse owned by the other party to the contract
tumbled to its death in the unfenced quarry. See id. at 64 (citing
Krum v. Anthony, 8 A. 598 (Pa. 1887)). Because the party who
removed a portion of the fence near the quarry would be liable
for the horse’s death regardless of the contractual duty to
maintain the fence, the gist of the action doctrine did not bar a
tort claim. See id. As another example, a landlord who
promised to repair a defective porch could be subject to tort
claims after the porch had collapsed on the tenant because the
landlord had a duty to invitees even absent the promise to
repair the porch. See id. at 65–66 (citing Reitmeyer v.
Sprecher, 243 A.2d 395 (Pa. 1968)).

   The gist of the action doctrine does not apply here because
SDM’s fraudulent inducement claim does not depend on the
breach of a contractual duty. SDM alleges that Drexel
misrepresented and intentionally concealed its internal student
enrollment projections while the parties were negotiating the
Management Agreement. At that time, however, the parties
had not executed the Management Agreement. And without a
binding contract, any duty Drexel owed SDM during
negotiations was grounded only in tort.

                               46
    In reaching a contrary conclusion, the District Court
attributed Drexel’s duty to the terms of the Management
Agreement. See SodexoMAGIC, 333 F. Supp. 3d at 455–56.
But a precontractual duty not to deceive through
misrepresentation or concealment exists independently of a
later-created contract. See Moser, 589 A.2d at 682 (explaining
that parties are under a duty to avoid “intentional false
statement[s]” or “concealment[s] of material fact[s]” (citing
Commonwealth v. Monumental Props., Inc., 329 A.2d 812, 829
(Pa. 1974))). And even if such a duty could be retroactively
incorporated into a contract, that would still not foreclose a tort
action. When a contractual duty duplicates an obligation
generally owed to another in society, the gist of the action
doctrine does not bar a tort claim; it prevents only the
contractual duty from serving as a basis for a tort claim. See
Bruno, 106 A.3d at 62–65; see also, e.g., Reitmeyer, 243 A.2d
at 398; Krum, 8 A. at 600. Because SDM’s tort-based fraud
claim would exist with or without a later-in-time contract, the
gist of the action doctrine does not bar such a claim here.

       5. Drexel’s     Fraudulent-Inducement        Counterclaim
          Fails.

    In counterclaiming for fraudulent inducement, Drexel
asserts that SDM had no intention of making the $4 million
capital contribution that it promised in its BAFO. According
to Drexel, SDM’s misrepresentation caused Drexel to award
the contract to SDM, not Aramark.

   Typically, a fraudulent inducement claim involves
deception that leads a person to enter a contract. See Maguire
v. Wheeler, 150 A. 882, 884 (Pa. 1930) (“Where the person

                                47
making the promise under such circumstances intended at the
time not to perform it, thus fraudulently making use of the
promise as a device to procure the contract or deed, equity will
grant relief . . . .”). Yet Drexel makes no such allegation here.
Instead, it claims that SDM’s misrepresentation induced it to
forgo contracting with Aramark. While a nontraditional
application, the Pennsylvania Supreme Court would likely
recognize such a fraudulent inducement cause of action
because a promise without an intention to perform may form
the basis of a fraud claim. See Rose, 123 A.2d at 697
(explaining that promises made without the intention to carry
out the promise support an action for fraud); Sweet,
Promissory Fraud, supra, at 888 (“The general rule is that a
promise made without the intent to perform it is fraud.”).

   But this is an unusual context to advance such a theory. The
evidence here suggests that Drexel misrepresented its
predictions for future student enrollment not just to SDM but
to all bidders, including Aramark. From that perspective,
Drexel is claiming that it lost the opportunity to contract with
Aramark on the basis of misrepresentations that it made to
Aramark. Under these circumstances, it is doubtful that
Pennsylvania would permit a fraudulent-inducement claim.
But it is unnecessary to reach that novel question of state law
here.

    That is so because Drexel’s fraud claim is untimely. Under
the relevant statute of limitations, a party has two years to sue
for fraud. See 42 Pa. Stat. and Cons. Stat. § 5524(7). That
period commences when a cause of action accrues. See Rice v.
Diocese of Altoona-Johnstown, 255 A.3d 237, 246 (Pa. 2021).
Working backwards, Drexel first filed its fraud counterclaim
on July 13, 2017. Thus, to be timely, its claim must have

                               48
accrued on or after July 13, 2015 – a little less than two months
after the parties finalized the Management Agreement.

    Yet Drexel’s fraud claim accrued well before that date. See
Gleason v. Borough of Moosic, 15 A.3d 479, 484 (Pa. 2011)
(explaining that a cause of action accrues “when an injury is
inflicted and the corresponding right to institute a suit for
damages arises”). SDM proposed its BAFO on August 8,
2014, and Drexel awarded the contract to SDM a week later,
on August 15, 2014. As of that date, Drexel relied on SDM’s
alleged false promise and discontinued competitive
negotiations with Aramark and could have sued SDM for
fraud. And because Drexel did not initiate its counterclaim for
over two years – not until July 13, 2017 – Pennsylvania’s
statute of limitations, through its normal operation, would bar
Drexel’s fraud claim.

    Drexel contends that the statute of limitations should not
operate normally in this case. Instead, according to Drexel, the
statute of limitations should be tolled by either the discovery
rule or the fraudulent-concealment exception.

    Drexel argues first that the discovery rule should toll the
statute of limitations until April 28, 2017. That is the date on
which Drexel received discovery materials from SDM
suggesting that SDM never intended to fulfill the commitments
it made in its final offer. See In re Risperdall Litig., 223 A.3d
633, 640 (Pa. 2019) (explaining that the discovery rule tolls the
statute of limitations for the period that “an injury or its cause
[are] not reasonably knowable”). It is undisputed that Drexel
had constructive knowledge of SDM’s allegedly false
intentions by that date. And such knowledge stops tolling
under the discovery rule. See Gleason, 15 A.3d at 484.

                               49
    But discovery-rule tolling ceases once a party has “actual
or constructive knowledge of at least some form of significant
harm and of a factual cause linked to another’s conduct,
without the necessity of notice of the full extent of the
injury . . . or precise cause.” Id. (quoting Wilson v. El-Daief,
964 A.2d 354, 364 (Pa. 2009)); see also Fine v. Checcio,
870 A.2d 850, 858 (Pa. 2005) (explaining that the discovery
rule still requires reasonable diligence, measured under an
objective standard of whether a plaintiff used “the means of
information within [its] reach, with the vigilance the law
requires” (citation omitted)).        And here, Drexel had
constructive      knowledge      of    a    potential     material
misrepresentation at an earlier point in time, when SDM
circulated an initial draft of the Management Agreement on
September 12, 2014, without the $4 million capital
contribution. As alleged by Drexel, that term was “one of the
principal financial advantages distinguishing Sodexo’s BAFO
from Aramark’s,” Am. Countercl. ¶ 54 (SA13), and Drexel’s
lead negotiator suspected that SDM was pulling a bait and
switch. Thus, as of September 12, 2014, the discovery rule no
longer tolled the statute of limitations. Drexel still had two
years to investigate and sue, but it did not file its counterclaim
within that period.

    The related but distinct doctrine of fraudulent-concealment
tolling does not salvage Drexel’s counterclaim. That doctrine
allows tolling of the statute of limitations for the period in
which the opposing party, through fraud or concealment,
causes another party to “relax [its] vigilance or deviate from
[its] right of inquiry into the facts.” Fine, 870 A.2d at 860. But
here, although Drexel alleges that SDM’s BAFO
misrepresented its intention to make an additional $4 million

                               50
capital contribution, that alleged misrepresentation was not
concealed after SDM circulated its first draft of the
Management Agreement. At that point, because the draft did
not include that previously promised term, SDM was no longer
concealing its intention to not make that additional investment.
Thus, fraudulent-concealment tolling ceased on September 12,
2014, as well. And because Drexel did not file its fraud
counterclaim until over two years after that date, the statute of
limitations bars it.

   B. SodexoMAGIC’s Breach-of-Contract Claim for
      Failure to Renegotiate in Good Faith Survives
      Summary Judgment.

    SDM also sued Drexel for breaching the Management
Agreement for failing to renegotiate in good faith after annual
first-year student enrollment did not increase by two percent.
The District Court granted summary judgment to Drexel on
this count, reasoning primarily that promises to renegotiate in
good faith are too indefinite to be enforced.                 See
SodexoMAGIC, 333 F. Supp. 3d at 457–59. As an alternative
ground, the District Court found that Drexel did renegotiate in
good faith. See id. at 459 n.6. Both conclusions are incorrect:
the first as a matter of law; the second due to a genuine dispute
of material fact.

       1. A Promise to Renegotiate in Good Faith May Be
          Enforceable Under Pennsylvania Law, and the
          Promise Between These Parties Is Enforceable.

    Pennsylvania affords parties broad latitude in fashioning
their agreements. See Cent. Dauphin Sch. Dist. v. Am. Cas.
Co., 426 A.2d 94, 96 (Pa. 1981); see also Restatement

                               51
(Second) of Contracts, ch. 8, intro. note (“In general, parties
may contract as they wish, and courts will enforce their
agreements without passing on their substance.”). As part of
that flexibility, a voluntarily-agreed-to contract term is
enforceable unless a statute or the common law specifically
prevents enforcement of that term. See Greene v. Oliver
Realty, Inc., 526 A.2d 1192, 1194 (Pa. Super. Ct. 1987)
(“Contemporary contract law generally provides that a contract
is enforceable when the parties reach mutual agreement,
exchange consideration and have outlined the terms of their
bargain with sufficient clarity.”); Stephan v. Waldron Elec.
Heating & Cooling LLC, 100 A.3d 660, 665 (Pa. Super. Ct.
2014) (same). Statutorily prohibited contracts include oral
contracts subject to the statute of frauds8 and contracts for
wages below the minimum wage.9 The common law prevents
enforcement of other types of promises, including promises

8
 See 13 Pa. Stat. and Cons. Stat. § 2201(a); 33 Pa. Stat. and
Cons. Stat. § 1.
9
  See 43 Pa. Stat. and Cons. Stat. § 333.104; Chevalier v. Gen.
Nutrition Ctrs., Inc., 220 A.3d 1038, 1055 (Pa. 2019)
(recognizing the Pennsylvania General Assembly’s declaration
of policy that, in the fair wage context, “‘freedom of contract’
as applied to [employees’] relations with their employers is
illusory” (quoting 43 Pa. Stat. and Cons. Stat. § 333.101)
(alteration in original)).

                              52
that are illegal;10 that otherwise violate public policy;11 or that
are indeterminate, indefinite, or vague.12

10
    Dippel v. Brunozzi, 74 A.2d 112, 114 (Pa. 1950) (“[A]n
agreement which violates a provision of a statute, or which
cannot be performed without violation of such a provision, is
illegal and void.”); see Am. Ass’n of Meat Processors v. Cas.
Reciprocal Exch., 588 A.2d 491, 495 (Pa. 1991) (“What we
consider controlling, however, . . . is that the alleged contract
is illegal under a statute enacted in aid of significant public
policies identified by the Pennsylvania legislature.”); Rounick
v. Neducsin, 231 A.3d 994, 1000 n.6 (Pa. Super. Ct. 2020)
(explaining that “the courts of this Commonwealth will not be
used to enforce contracts that are illegal pursuant to a statute”).
11
   Pittsburgh Logistics Sys., Inc. v. Beemac Trucking, LLC,
249 A.3d 918, 930 (Pa. 2021) (“Generally, a clear and
unambiguous contract provision must be given its plain
meaning unless to do so would be contrary to a clearly
expressed public policy.” (quoting Eichelman v. Nationwide
Ins. Co., 711 A.2d 1006, 1008 (Pa. 1998))); Tayar v.
Camelback Ski Corp., 47 A.3d 1190, 1199 (Pa. 2012);
Ferguson v. McKiernan, 940 A.2d 1236, 1244 (Pa. 2007).
12
   See Devlin v. City of Phila., 862 A.2d 1234, 1244 n.9 (Pa.
2004) (“[T]o create an enforceable contract, parties must
delineate the terms of their bargain with sufficient clarity.”
(citation and internal quotation marks omitted)); id. (“[A]n
agreement cannot be enforced if its terms are indefinite.”
(citation and internal quotation marks omitted)); Seiss v.
McClintic-Marshall Corp., 188 A. 109, 110 (Pa. 1936) (“The
contract here set up is so lacking in precision, so indefinite and
vague, that nothing certain about it can be formulated.”);
Edgcomb v. Clough, 118 A. 610, 614 (Pa. 1922) (“In order that

                                53
     Those categories do not specifically include promises to
renegotiate in good faith. Nonetheless, such a promise could
still be unenforceable if it shares attributes with a prohibited
category.

   The only prohibited category potentially implicated by a
promise to renegotiate in good faith is the rule against
indeterminate promises. But as a general matter, promises to
renegotiate are not too indefinite to be enforceable. Indeed, the
Pennsylvania Supreme Court long ago relied on a right-to-
renegotiate-in-good-faith clause as a basis for its decision. See
Cosgrove v. Kappel, 168 A.2d 319, 320 (Pa. 1961). More
recently, three Justices of the Pennsylvania Supreme Court
favored resolving a dispute through the enforceability of a
similar agreement to negotiate in good faith. See Dep’t of Gen.
Servs. v. On-Point Tech. Sys., 870 A.2d 873, 874 (Pa. 2005)
(Saylor, J., joined by Nigro and Baer, JJ., concurring in part
and dissenting in part) (“I would also specifically confirm the
Third Circuit’s prediction that this Court would cognize a
contract-based cause of action for breach of an agreement to
negotiate in good faith.”).          And several intermediate
Pennsylvania courts, along with this Court, have concluded

a contract may be enforceable, its terms must be certain and
explicit and not vague or indefinite.”); Ingrassia Constr. Co. v.
Walsh, 486 A.2d 478, 484 (Pa. Super. Ct. 1984) (“A court
cannot enforce a contract unless it can determine what it is.”
(quoting 1 A. Corbin, Corbin on Contracts § 95 (1963))); Reed
v. Pittsburgh Bd. of Pub. Educ., 862 A.2d 131, 135 (Pa.
Commw. Ct. 2004) (“If a court, due to indefiniteness or
incompleteness, is unable to determine if a contract was
performed, the court must find no contract existed in the first
place.”).

                               54
that the Pennsylvania Supreme Court would recognize a
contract-based cause of action for breach of a promise to
negotiate in good faith. See GMH Assocs. Inc. v. Prudential
Realty Grp., 752 A.2d 889, 903–04 (Pa. Super. Ct. 2000);
Jenkins v. Cnty. of Schuylkill, 658 A.2d 380, 385 (Pa. Super.
Ct. 1995); see also Flight Sys., Inc. v. Elec. Data Sys. Corp.,
112 F.3d 124, 130 (3d Cir. 1997); Channel Home Ctrs. v.
Grossman, 795 F.2d 291, 299 (3d Cir. 1986). Thus, under
Pennsylvania law, a promise to renegotiate in good faith is
likely not – as a category – too indeterminate to be enforceable.
See Flight Sys., 112 F.3d at 130; Channel Home Ctrs.,
795 F.2d at 299.

    Still, an individual promise to renegotiate may be too vague
or indefinite to be enforceable. Courts decline to enforce
promises to renegotiate that lack a framework for evaluating
the parties’ good-faith obligations. See, e.g., Jenkins, 658 A.2d
at 385 (rejecting a claim for breach of a duty to negotiate in
good faith where the language of the letter did “not reveal that
the parties intended to be bound by any terms of the original
specifications” and “no specific terms were even agreed
upon”).13 But here, two attributes of the Management

13
      See also A/S Apothekernes Laboratorium for
Specialpraeparater v. I.M.C. Chem. Grp., Inc., 873 F.2d 155,
158–59 (7th Cir. 1989); (rejecting a similar claim where “the
letter [of intent] did not set forth any previously agreed upon
terms much less provide a general framework within which the
parties intended to conduct their negotiations”); Tchrs. Ins. &
Annuity Ass’n of Am. v. Tribune Co., 670 F. Supp. 491, 498
(S.D.N.Y. 1987) (explaining that agreements to negotiate open
terms in good faith commit parties “to the obligation to

                               55
Agreement’s promise to renegotiate in good faith give it the
structure needed to be enforceable: the trigger for the
obligation to renegotiate and the parameters for the proposed
renegotiation.

    First, the Management Agreement has a sufficiently
definite trigger for renegotiation obligations. Drexel and SDM
agreed to “renegotiate[] on a mutually agreeable basis” upon
certain changes to “representations regarding existing and
future conditions” that they made to each other in negotiating
the Management Agreement:

      [E]ach party has relied on representations
      regarding existing and future conditions and
      projections made by the other in connection with
      the negotiation and execution of this Agreement.
      In the event of a change in the conditions or the
      inaccuracy or breach of, or the failure to fulfill,
      any such representation by a party, the financial
      terms and other obligations assumed by the other
      party shall be renegotiated on a mutually
      agreeable basis to reflect such change,
      inaccuracy or breach.

Management Agreement § 9.1 (SA57) (emphases added).
Those representations include the statement that Drexel’s
growth was a critical factor in determining certain
contractually defined “Investments” that SDM promised.14

negotiate the open issues in good faith in an attempt to reach
the alternate objective within the agreed framework”).
14
   The Investments consist of specific classes of capital
contributions. See id. § 8.5 (SA49–52). Most of those

                              56
Management Agreement § 8.5 (SA49). They also include
SDM’s projection that future first-year student enrollment
would increase annually by two percent:

       Parties agree that the University’s growth is a
       critical factor in calculating the Investments
       afforded under this Agreement and it has been
       projected by SodexoMAGIC that this growth
       will realize an increase of 2% per year in the
       freshman class year over year.

Id. § 9.2 (SA58) (emphasis added). And recognizing that
changes to the assumed future student population could have
an adverse economic effect on SDM, the parties agreed to work
“in good faith to mutually agree upon solutions in an effort to
counter such impact”:

contributions occurred in the past, such as when SDM or one
of its affiliates made improvements to Drexel’s dining
facilities. See id. § 8.5(A)–(B) (SA49–50). For those past
contributions, the Management Agreement provided for a
straight-line amortization schedule for Drexel to reimburse
SDM over time, typically a ten-year period. See id. One class
of Investments related to construction of an urban eatery. See
id. § 8.5(C) (SA50). Another class of Investments was for
promised enhancements related to a food truck, a dining center,
and the urban eatery. See id. § 8.5(D) (SA51–52). The parties
budgeted those future Investments at $10.7 million, an amount
that Drexel would repay through a straight-line amortization
schedule beginning on the date the funds are paid out and
continuing through June 30, 2025. See id.

                              57
       [Drexel] recognizes that Sodexo MAGIC [sic]
       made certain assumptions in preparing the
       financial package offered in this Agreement and
       understands that changes to the financial
       assumptions below may have an adverse
       economic impact on SodexoMAGIC; in such
       cases [Drexel] shall work with SodexoMAGIC
       in good faith to mutually agree upon solutions in
       an     effort    to   counter     such    impact.
       SodexoMAGIC acknowledges its responsibility
       to respond quickly and expertly to factors under
       their control that may affect these outcomes.

Id. § 9.2 (emphasis added). Together, these terms identify a
trigger to renegotiate as an annual future first-year student
enrollment increase of less than two percent. In light of these
terms, no one disputes that the duty to renegotiate in good faith
was in fact triggered.

    Second, the Management Agreement defines the scope of
renegotiations. Future student enrollment was expressly linked
to the Investments that SDM promised. See id. (stating that
student “growth is a critical factor in calculating the
Investments afforded under this Agreement”). Through
renegotiation of the promises related to the Investments, the
parties could agree to reduce future capital contributions for
those Investments, see id. § 8.5(C)–(D), accelerate the
amortization schedule for those Investments, see id. § 8.5(A)–
(B), or provide some other setoff. By limiting the topics
subject to renegotiation, the Management Agreement enables
evaluation of whether good-faith renegotiations occurred.
That, along with the definite trigger for renegotiation, removes

                               58
the promise to renegotiate in good faith from the realm of
indeterminacy.

       2. A Genuine Dispute of Material Fact Remains as to
          Whether Drexel Renegotiated in Good Faith.

    The District Court alternatively concluded that Drexel did
renegotiate in good faith. See SodexoMAGIC, 333 F. Supp. 3d
at 459 n.6. Evaluating that issue requires an understanding of
the concept of good faith, which varies by context. See
Stamerro v. Stamerro, 889 A.2d 1251, 1259 (Pa. Super. Ct.
2005) (explaining that “[t]he obligation to act in good faith in
the performance of contractual duties varies somewhat with the
context” (quoting Somers v. Somers, 613 A.2d 1211, 1213 (Pa.
Super. Ct. 1992))). The Management Agreement did not
specifically define the term, and the Pennsylvania Supreme
Court has not given meaning to good faith in the context of a
promise to renegotiate. In the abstract, however, the duty of
good faith is ambiguous: it could require nothing more than
that the parties avoid acting in bad faith, or it could impose an
affirmative obligation on the parties.

    The first view is more prevalent in the context of an implied
duty of good faith. The Restatement (Second) of Contracts, in
discussing an implied duty of good faith, explains that good
faith “excludes a variety of types of conduct characterized as
involving ‘bad faith’ because they violate community
standards of decency, fairness or reasonableness.”
Restatement (Second) of Contracts § 205 cmt. a; see also
Robert S. Summers, “Good Faith” in General Contract Law
and the Sales Provisions of the Uniform Commercial Code,
54 Va. L. Rev. 195, 196 (1968) (arguing that “good faith, as
used in the case law, is best understood as an ‘excluder’ – it is

                               59
a phrase which has no general meaning or meanings of its own,
but which serves to exclude many heterogeneous forms of bad
faith”). And some Pennsylvania cases have picked up on the
notion that good faith means only the absence of bad-faith
conduct. See, e.g., Stamerro, 889 A.2d at 1259 (describing
good faith through express reference to recognized forms of
bad-faith conduct); Herzog v. Herzog, 887 A.2d 313, 317 (Pa.
Super. Ct. 2005) (finding a violation of an implied duty of good
faith in part because one party’s “conduct [wa]s unfair and
unreasonable”); Somers, 613 A.2d at 1213 (explaining that an
implied duty of good faith excludes various types of bad faith,
including, among other things, “evasion of the spirit of the
bargain, lack of diligence and slacking off, [and] willful
rendering of imperfect performance”).

    Alternatively, a duty of good faith could impose an
affirmative obligation. In the commentary, the Restatement
leaves room for that view by referencing two definitions of
good faith from the Uniform Commercial Code in which the
duty is affirmative. See Restatement (Second) of Contracts
§ 205 cmt. a (explaining that good faith is defined as “honesty
in fact in the conduct or transaction concerned” in U.C.C. § 1-
201(19) and as “honesty in fact and the observance of
reasonable commercial standards of fair dealing in the trade”
in U.C.C. § 2-103(1)(b)). Consistent with an interpretation that
good faith imposes an affirmative duty in the renegotiation
context, Pennsylvania courts have examined the sincerity of
the parties’ intention to reach an agreement pursuant to an
obligation to negotiate in good faith in the labor contexts and
for contracts governed by the U.C.C. See, e.g., Markham v.
Wolf, 190 A.3d 1175, 1188 (Pa. 2018) (explaining that, in the
labor context, good-faith bargaining entails “evincing an intent
to bargain in an attempt to reach an agreement if possible”);

                              60
Eighth North-Val, Inc. v. William L. Parkinson, D.D.S., P.C.,
Pension Tr., 773 A.2d 1248, 1254 (Pa. Super. Ct. 2001)
(requiring for good faith in contract modifications under
U.C.C. § 2-209 “an honest desire to compensate for
commercial exigencies”). In those cases, in evaluating good-
faith negotiations, Pennsylvania courts have examined the
reasonableness of the negotiation process. See, e.g., Markham,
190 A.3d at 1188 (explaining, in the labor context, that
bargaining in good faith “includes a wide range of legally
enforceable responsibilities, including meeting at certain
times, places, with certain frequency”); Eighth North-Val,
773 A.2d at 1254 (“In analyzing [the good-faith requirement
for contract modification under U.C.C. § 2-209], the trier of
fact must determine whether the means used to obtain the
modification constitute extortion or overreaching.”). Thus, an
affirmative duty to renegotiate in good faith could be viewed
as requiring a sincere intention to reach an agreement and the
use of reasonable negotiation tactics.

    Both formulations – good faith as an excluder and good
faith as an affirmative duty – have a core commonality: they
each relate to the renegotiation process, not the outcome. For
that reason, a promise to renegotiate in good faith does not
compel the parties to agree. See Burbach Broad. Co. v. Elkins
Radio Corp., 278 F.3d 401, 407 n.2 (4th Cir. 2002) (“Th[e]
obligation [to negotiate in good faith] does not guarantee that
the final contract will be concluded if both parties comport with
their obligation, because good faith differences in the
negotiation of the open issues may prevent the parties from
reaching a final contract.”). Moreover, such a promise does
not prevent one party from out-negotiating the other – that may
be done as long as a party avoids bad faith (under the excluder
formulation) or acts with a sincere intention to reach an

                               61
agreement and employs reasonable bargaining tactics (under
an affirmative duty formulation). See Creeger Brick & Bldg.
Supply, Inc. v. Mid-State Bank & Tr. Co., 560 A.2d 151, 154
(Pa. Super. Ct. 1989) (“[I]t cannot be said that a lender has
violated a duty of good faith merely because it has negotiated
terms of a loan which are favorable to itself.”).

    Those general principles alone do not resolve which
understanding of the term ‘good faith’ should apply here. On
the one hand, the Management Agreement makes express the
duty to renegotiate in good faith, and that strains the
applicability of the good-faith-as-an-excluder approach, which
has been applied most commonly when the duty of good faith
is implied. On the other hand, the Management Agreement
falls outside the contexts in which Pennsylvania courts have
imposed an affirmative duty of good faith: labor disputes and
contracts governed by the U.C.C. Ultimately, it is not
necessary to select one meaning of good faith over the other
because either definition generates the same outcome here.

    As a baseline, without considering the evidence of fraud,
the record evidence indicates that Drexel did renegotiate in
good faith with SDM. Under the view that good faith functions
only to exclude bad-faith conduct, Drexel met its obligation
because the record lacks evidence of bad faith during the
renegotiation correspondence. Alternatively, if good faith
imposes an affirmative duty, both components of that duty
appear to have been satisfied. Drexel negotiated with a sincere
intention to reach an agreement: SDM’s own internal
documents characterized Drexel as “forthcoming” and
recognized that, although the numbers did not match up, the
“meeting went extremely well,” with both parties showing
determination to reach a deal. See Email from Nancy C.

                              62
Arnett, Vice President, Sodexo, to Leonard Riccio, Senior Vice
President, Sodexo (May 20, 2016) (SA1572–73). Similarly,
evidence suggests that Drexel employed reasonable
negotiation tactics. At first, SDM proposed reducing its future
capital contributions by $12.7 million, for a total future
contribution of $2 million. In response, Drexel also proposed
reducing SDM’s obligation for future capital contributions, but
by less, $9 million. That counterproposal represented a 60%
discount off the original promise to invest $14.7 million. The
parties went back and forth several times on key terms, and
Drexel provided specific reasons for its counteroffer. See
Email from Helen Bowman, Executive Vice President, Drexel,
to John A. Fry, President, Drexel (July 13, 2016) (SA533–36).
The outstanding $3.7 million separating the parties from
agreement, while an obstacle, amounted to about 14% of the
initially promised future capital contribution. Although the
parties could not close that gap, that alone does not prevent a
finding of good faith, and here Drexel appears to have used
reasonable tactics in negotiating with SDM. In short, looking
only at the renegotiation correspondence, Drexel appears to
have acted in good faith.

   But due to SDM’s fraudulent-inducement evidence, the
context for evaluating good faith is broader. Under either
formulation of a good-faith duty, a party cannot fraudulently
induce a promise and also in good faith renegotiate that
obligation as if the fraud never occurred. Knowingly gaining
the benefit of one’s own prior uncured fraud would likely
qualify as bad faith under Pennsylvania law.               And
renegotiating without correcting and offsetting prior deceit
undermines sincerity and is not a reasonable negotiation tactic.
Thus, the question of whether Drexel renegotiated in good faith
hinges on whether Drexel fraudulently induced SDM to enter

                              63
the Management Agreement. Because that underlying issue is
subject to genuine dispute, so is the question of whether Drexel
renegotiated in good faith.

    In sum, it is inconsequential which formulation of good
faith the Pennsylvania Supreme Court would apply to a
contractual duty to renegotiate because, under either, SDM’s
prima facie evidence of fraudulent inducement carries its
good-faith renegotiation claim past summary judgment.15

15
    Although both SDM’s fraud claim and SDM’s breach-of-
contract claim for failure to renegotiate in good faith survive
summary judgment, that does not mean that SDM is entitled as
a matter of law to recover on both claims. It may be that SDM
will have to elect one of those claims over the other. See
Gamesa Energy USA, LLC v. Ten Penn Ctr. Assocs., L.P.,
217 A.3d 1227, 1239 (Pa. 2019) (explaining that although
“inconsistent remedies may be pleaded and pursued in
litigation, damages calculated pursuant to only one theory may
be recovered”); see also Schwartz v. Rockey, 932 A.2d 885,
893 n.10 (Pa. 2007) (citing Olympia Hotels Corp. v. Johnson
Wax Dev. Corp., 908 F.2d 1363, 1371 (7th Cir. 1990), for its
discussion of the timing of the choice between inconsistent
claims for fraud and breach of contract). But assessing and
applying Pennsylvania election-of-remedies law is left for the
District Court in the first instance on remand. See generally
Dan B. Dobbs & Caprice L. Roberts, Law of Remedies § 9.3,
at 740 (3d ed. 2018) (recognizing that some courts “suggest
that the election of remedies doctrine is based on a policy to
avoid duplication of relief,” while others justify the doctrine on
the ground that a party cannot seek recovery for remedies that
are “logically inconsistent”).

                               64
   C. SodexoMAGIC’s Claim for Enhanced Payments for
      Fall 2016 Survives Summary Judgment.

    Through an amended and supplemental count, SDM sought
to recover for additional alleged breaches of contract. Beyond
requesting compensation allegedly due under the Management
Agreement, SDM also claimed that Drexel owed enhanced
payments under a separate contract governing the Fall 2016
Semester. Finding a lack of consideration and acceptance, the
District Court concluded that the parties did not enter a separate
contract and rejected SDM’s claim for enhanced payments for
food services that semester. See SodexoMAGIC, 333 F. Supp.
3d at 461–64. That was incorrect, and SDM’s breach-of-
contract claim for Fall Semester 2016 survives summary
judgment.

       1. There Was Consideration for a Separate Contract for
          the Fall 2016 Semester.

    SDM provided consideration for a separate contract for the
Fall 2016 Semester through forbearance. In its notice
terminating the Management Agreement for convenience,
Drexel specified a termination date 82 days later. But the
Management Agreement required only 60 days’ notice to
terminate for convenience. So once it received Drexel’s notice,
SDM could have responded with its own notice of termination
for convenience with an accelerated termination date. For
example, SDM could have immediately given a 60-day notice
of termination for convenience, which would have terminated
the Management Agreement 22 days before Drexel’s proposed
date. Thus, to accept Drexel’s offer, SDM would have to
refrain from issuing its own accelerated notice to terminate for
convenience and leaving campus as a result. And under deeply

                               65
entrenched Pennsylvania law, a party may provide
consideration by agreeing to “refrain[] from doing anything
which [it] has a right to do.” York Metal & Alloys Co. v.
Cyclops Steel Co., 124 A. 752, 754 (Pa. 1924) (citation
omitted); see generally Stelmack v. Glen Alden Coal Co.,
14 A.2d 127, 128 (Pa. 1940) (explaining that, under
Pennsylvania law, consideration must be “bargained for as the
exchange for the promise,” and it must confer some “benefit to
the party promising, or a loss or detriment to the party to whom
the promise is made” (internal quotation marks omitted)); but
cf. Chatham Commc’ns, Inc. v. Gen. Press. Corp., 344 A.2d
837, 840 (Pa. 1975) (“[T]he performance of an act which one
party is legally bound to render to the other party is not legal
consideration.”). By remaining on campus despite its ability
to leave early, SDM provided the requisite consideration for a
separate contract governing food services for the Fall Semester
2016.16

       2. A Reasonable Jury Could Find that SodexoMAGIC
          Accepted Drexel’s Offer.

    The District Court separately rejected SDM’s claim for
breach of contract for the Fall 2016 Semester due to a lack of
a meeting of the minds. See SodexoMAGIC, 333 F. Supp. 3d
at 463 (“There was no meeting of the minds as to the terms
which Drexel proposed in its September 19 letter for Sodexo’s
rates and commissions. Sodexo may not accept some terms,
reject others, and then assert that an agreement conclusively
existed.”). But under Pennsylvania law a party may accept a

16
  Similarly, if SDM’s termination for cause were valid, then
SDM’s continued provision of food services would also
constitute consideration.

                              66
contract offer by promise or performance. See Herman v.
Stern, 213 A.2d 594, 600 (Pa. 1965) (acceptance through
promise); Ross v. Leberman, 148 A. 858, 859 (Pa. 1930)
(acceptance through performance); Hartman v. Baker,
766 A.2d 347, 351 (Pa. Super. Ct. 2000) (same); see also
Restatement (Second) of Contracts § 50 cmt. a (1981) (“In case
of doubt, the offeree may choose to accept either by promising
or by rendering the requested performance.”). And here, a
reasonable jury could conclude that SDM accepted Drexel’s
offer either by promise or, if it finds that SDM did not reject
Drexel’s offer, through performance.

    The key evidence that SDM accepted through promise is
SDM’s letter in response to Drexel’s offer.         In that
correspondence, SDM stated that it “agree[d] to remain on
campus through December 10, 2016.” Letter from Timothy J.
Fazio, Manion Gaynor & Manning, LLP, to Stephen A. Cozen,
Cozen O’Connor P.C. (Sept. 26, 2016) (JA158). Even though
the same letter also purports to terminate the Management
Agreement for cause, a reasonable jury could still conclude
that SDM separately promised to remain on campus through
the specified date.

   Drexel disputes that SDM’s letter could qualify as an
acceptance. It argues that SDM’s letter was not an acceptance
because it did not reference Drexel’s offer and because it
provided a different reason for staying – a commitment not to
leave students mid-term. But Pennsylvania law does not
require that an acceptance letter specifically reference the offer
being accepted. See Ingrassia, 486 A.2d at 483 (“Offer and
acceptance need not be identifiable and the moment of
formation need not be pinpointed.”). Nor does an accepting
party need to share the same motive as the offering party to

                               67
enter a contract. See generally 1 Corbin on Contracts § 3.4
(2021) (“[I]t is not necessary that the sole motive of the offeree
must be the desire for the offered reward. It need not even be
the offeree’s principal or prevailing motive.”). Drexel next
contends that because the parties disagreed about whether
SDM terminated the Management Agreement for cause, they
could not have the meeting of the minds needed to form a
contract for the Fall 2016 Semester. But a reasonable jury
could find that, regardless of a broader disagreement between
the parties, they still agreed to the “the material and necessary”
terms on which SDM would remain on campus and provide
dining services through December 10, 2016. Lombardo v.
Gasparini Excavating Co., 123 A.2d 663, 666 (Pa. 1956).

    For these same reasons, a jury could reasonably conclude
that SDM did not reject Drexel’s offer. With that finding, a
jury could also conclude that SDM accepted Drexel’s offer
through performance. It is undisputed that SDM remained on
campus and provided the requested dining services – all with
Drexel’s knowledge. And under Pennsylvania law, post-offer
performance provides strong evidence of acceptance. See Selig
v. Phila. Title Ins. Co., 111 A.2d 147, 151 (Pa. 1955);
Hartman, 766 A.2d at 351; Accu-Weather, Inc. v. Thomas
Broad. Co., 625 A.2d 75, 78–80 (Pa. Super. Ct. 1993). Thus,
even if SDM’s written response to Drexel’s offer was
ambiguous, a reasonable jury could still find that SDM
accepted Drexel’s offer through performance.

   D. Drexel’s Challenge to SodexoMAGIC’s Catering-
      Shortfall Claim Fails.

   After the District Court’s summary judgment order, a
dispute arose between the parties over which claims survived

                               68
summary judgment. They disagreed about whether SDM’s
claim for catering shortfalls remained. SDM calculated those
shortfalls based on a $3.4 million benchmark referenced in
Section 9.2 of the Management Agreement.17 But through a
later clarifying order, the District Court specified that “[c]laims
based on Section 9.2 that are not related to any breach of a duty
to renegotiate in good faith are still in the case.” Order re: Trial
on Count V Issues (Nov. 1, 2018) (JA85).

    Following that order, the parties referred all remaining
claims and counterclaims to arbitration and jointly moved to
dismiss them. The granting of the parties’ joint motion
achieved finality, which permitted the parties to appeal the
District Court’s summary judgment ruling. See 28 U.S.C.
§ 1291.

    Now, after the joint motion dismissing all remaining
claims, Drexel challenges the District Court’s clarifying order.
It argues that the catering-shortfall claim did not survive
summary judgment.

   That argument is meritless, nearing frivolous. In jointly
moving to dismiss all remaining claims, Drexel represented to
the District Court that the catering-shortfall claim remained.
The arbitration agreement, which was an exhibit to the joint

17
  The legal premise for any catering shortfall is vulnerable to
the extent that the Management Agreement does not guarantee
minimum catering net sales of $3.4 million the first year but
provides only an assumption in that respect. Thus, if SDM had
only an expectation but not a right to recover, its claim would
be improperly premised on false billing – the submission of
invoices for which there was no obligation to pay.

                                69
motion, stated that the only remaining claims were those in the
parties’ mediation statements.        And SDM’s mediation
statement, which was an exhibit to the arbitration agreement,
specifically identified the catering-shortfall claim. By those
representations to the District Court, Drexel waived the right
to argue the already-tenuous proposition that the District
Court’s clarifying order impermissibly conflicted with its prior
summary judgment ruling.18

     E. SodexoMAGIC’s Claims for Unjust Enrichment
        Fail.

    On appeal, SDM also pursues unjust enrichment as an
alternative remedy for two of its breach-of-contract claims.
First, it seeks unjust enrichment if the duty to renegotiate in
good faith in the Management Agreement is unenforceable.
Second, SDM resorts to unjust enrichment to recover enhanced
payments if the parties did not form a separate contract
governing dining services for the Fall 2016 Semester. The
District Court rejected SDM’s unjust enrichment claim due to
pleading deficiencies, but it also concluded that the claim
would fail as a matter of law. See SodexoMAGIC, 333 F. Supp.
3d at 473–74. For the reasons below, unjust enrichment is
unavailable as a matter of law.

18
   See In re Fine Paper Antitrust Litig., 685 F.2d 810, 817 (3d
Cir. 1982) (“We will not interfere with a trial court’s control of
its docket except upon the clearest showing that the procedures
have resulted in actual and substantial prejudice to the
complaining litigant.” (internal quotation marks omitted)); see
also In re Asbestos Prods. Liab. Litig. (No. VI), 921 F.3d 98,
109 (3d Cir. 2019); United States v. Wecht, 484 F.3d 194, 217
(3d Cir. 2007).

                               70
    SDM’s first argument for unjust enrichment rests on a
novel legal theory. It argues that if the promise to renegotiate
cannot be enforced, then despite the remainder of the
Management Agreement, SDM should be able to seek
compensation for the benefits Drexel received as a result of the
unenforceability of that promise. Although it has not
addressed that specific question, the Pennsylvania Supreme
Court has left no doubt that “unjust enrichment is inapplicable
when the relationship between parties is founded upon a
written agreement or express contract, regardless of how ‘harsh
the provisions of such contracts may seem in the light of
subsequent happenings.’” Wilson Area Sch. Dist. v. Skepton,
895 A.2d 1250, 1254 (Pa. 2006) (quoting Third Nat’l Bank &
Tr. Co. of Scranton v. Lehigh Valley Coal Co., 44 A.2d 571,
574 (Pa. 1945)).19 From the breadth and force of that
expression, it may well be that the Pennsylvania Supreme
Court would disallow an unjust enrichment claim even when a
contract governing the parties’ relationship contains an
unenforceable promise. But it is unnecessary to reach that
issue. As explained above, the promise in the Management

19
   See also Hershey Foods Corp. v. Ralph Chapek, Inc.,
828 F.2d 989, 999 (3d Cir. 1987) (“Quantum meruit will not
be awarded when there is an express agreement.” (citing
Murphy v. Haws & Burke, 344 A.2d 543, 546 (Pa. Super. Ct.
1975))); Dan B. Dobbs & Caprice L. Roberts, Law of
Remedies § 4.1(2), at 379 & n.64 (3d ed. 2018) (“A valid
contract defines the obligations of the parties as to matters
within its scope, displacing to that extent any inquiry into
unjust enrichment.” (quoting Restatement (Third) of
Restitution and Unjust Enrichment § 2(2) (2011) (emphasis
omitted))).

                              71
Agreement to renegotiate in good faith is enforceable, and with
a fully enforceable contract governing the parties’ relationship,
the quasi-contractual remedy of unjust enrichment is
unavailable.

    SDM also invokes unjust enrichment to recover enhanced
compensation for providing on-campus dining services during
the Fall 2016 Semester. At the outset, SDM’s claim for unjust
enrichment is actionable only to the extent that no contract
governs the parties’ relationship for that time period. See
Wilson Area Sch. Dist., 895 A.2d at 1254. But here, if a jury
finds that no contract governs the provision of Fall 2016 dining
services, that would have to be because SDM did not accept
Drexel’s offer. In that circumstance – the only one in which
an unjust enrichment claim could proceed – the obstacle to
SDM’s receiving enhanced compensation would be its own
failure to accept Drexel’s offer. Yet an unjust-enrichment
claim requires the “acceptance and retention of . . . benefits
under such circumstances that it would be inequitable.” Meyer,
Darragh, Buckler, Bebenek & Eck, P.L.L.C. v. Law Firm of
Malone Middleman, P.C., 179 A.3d 1093, 1102 (Pa. 2018)
(internal quotation marks omitted); see also Shafer Elec. &
Constr. v. Mantia, 96 A.3d 989, 993 (Pa. 2014). And it is
neither unjust nor inequitable to deny compensation to an
entity that conferred a benefit but did not accept an offer for
such compensation.

    Similarly, the Pennsylvania Supreme Court has rejected a
claim of unjust enrichment when a benefit that a party confers
upon another also protects its own interest. See Am. & Foreign
Ins. Co. v. Jerry’s Sport Ctr., Inc., 2 A.3d 526, 546 (Pa. 2010).
Here, by continuing to provide dining services, SDM served its
own interest by maintaining its professed commitment to not

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leave students without dining services mid-term.
Accordingly, it would not be unjust or inequitable if SDM does
not receive enhanced compensation for the dining services it
provided for the Fall 2016 Semester.

                     V.     CONCLUSION

    For the foregoing reasons, we will affirm in part and vacate
in part the District Court’s judgment and remand the remaining
claims.

    We will affirm summary judgment in Drexel’s favor on
SDM’s unjust enrichment and punitive damages claims as well
as summary judgment in SDM’s favor on Drexel’s fraudulent
inducement claim. Likewise, we will affirm the District
Court’s clarifying order and its decision to deny Drexel’s
motion to strike declarations by SDM witnesses under the
sham affidavit rule.

    We will vacate the District Court’s order granting summary
judgment to Drexel on SDM’s claims for fraudulent
inducement, breach of contract for failure to renegotiate in
good faith, and breach of a supplemental agreement for the Fall
2016 Semester. Those surviving claims will be remanded to
the District Court.

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