Pacitti v. Macy's ( 1999 )

Opinions of the United
1999 Decisions States Court of Appeals
for the Third Circuit
10-5-1999
Pacitti v Macy's
Precedential or Non-Precedential:
Docket 98-1803
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Filed October 5, 1999
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 98-1803
JOANNA PACITTI, a minor, by JOSEPH PACITTI, and
STELLA PACITTI, her parents and guardians,
Appellants
v.
MACY'S; MACY'S EAST, INC.
ON APPEAL FROM THE UNITED STATES
DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
(D.C. No. 97-cv-02557)
(District Judge: Honorable James T. Giles)
Argued: July 15, 1999
Before: GREENBERG, ALITO, Circuit Judges, and
STAFFORD, District Judge*
(Opinion Filed: October 5, 1999)
_________________________________________________________________
* The Honorable William H. Stafford, Jr., United States District Judge for
the Northern District of Florida, sitting by designation.
ALFRED W. PUTNAM, JR. (argued)
Drinker, Biddle & Reath
1345 Chestnut Street
Philadelphia National Bank Building
Philadelphia, PA 19107-3496
ALBERT C. OEHRLE
One East Airy Street
P.O. Box 657
Norristown, PA 19404
JOSEPH F. CLAFFY
Joseph F. Claffy & Associates, PC
100 S. High Street
West Chester, PA 19382
Counsel for Appellants
ROBERT P. JOY (argued)
DIANE M. SAUNDERS
Morgan, Brown & Joy, LLP
One Boston Place, Suite 1616
Boston, MA 02108-4472
JAMES M. PENNY, JR.
Obermayer Rebmann Maxwell
& Hippel LLP
One Penn Center - 19th Floor
1617 John F. Kennedy Boulevard
Philadelphia, PA 19103-1895
Counsel for Appellees
OPINION OF THE COURT
ALITO, Circuit Judge:
Stella and Joseph Pacitti, on behalf of their daughter,
Joanna Pacitti ("plaintiffs"), appeal the District Court's
grant of summary judgment in favor of Macy's East, Inc.
("Macy's") on their state-law contract and tort claims arising
from Macy's role as promoter and host of "Macy's Search
for Broadway's New ``Annie' " (the "Search"). Plaintiffs also
appeal the District Court's order limiting the scope of
2
discovery. For the reasons that follow, we reverse on both
grounds and remand for further proceedings.
I.
In May 1996, the producers of "Annie," the Classic Annie
Production Limited Partnership (the "producers"), and
Macy's, a retail department store chain, entered into an
agreement under which Macy's agreed to sponsor the
"Annie 20th Anniversary Talent Search." See App. at 129a-
32a. Specifically, Macy's agreed to promote the event and to
host the auditions at its stores in the following locations:
New York City, Boston, Atlanta, Miami, and King of Prussia,
Pennsylvania. See id. at 129a-30a. The producers agreed to
select one finalist from each regional store to compete in a
final audition at Macy's Herald Square store in New York
City. See id. at 130a. The producers also agreed to offer the
winner of the final audition "a contract for that role to
appear in the 20th Anniversary Production of Annie .. .,
subject to good faith negotiations and in accordance with
standard Actors' Equity Production Contract guidelines"
(the "standard actors' equity contract"). 1 Id.
Macy's publicized the Search in newspapers and in its
stores in the five regional locations. All of the promotional
materials referred to the event as "Macy's Search for
Broadway's New ``Annie.' " See id. at 59a-83a. Plaintiffs
learned of the Search from an advertisement in the
Philadelphia Inquirer that stated, in pertinent part:
If you are a girl between 7 and 12 years old and 4 È6
or under, the starring role in this 20th Anniversary
Broadway production and national tour could be yours!
Just get your hands on an application . . . and bring
it to the audition at Macy's King of Prussia store. . . .
Annie's director/lyricist . . . will pick the lucky actress
_________________________________________________________________
1. The Actors' Equity Association requires producers to attach its
standard "Agreement and Rules Governing Employment under the
Production Contract" to "all contracts where production is bonded as a
Bus and Truck Tour." See App. at 141a. As we discuss below, that
contract provides, among other things, that the producer retains the
authority to replace the actor at any time so long as the actor is
compensated through the term of the contract. See id. at 168a.
3
for final callbacks . . . at Macy's Herald Square. Annie
goes on the road this fall and opens on Broadway
Spring 1997.
Id. at 208a.
In June 1996, Joanna, then 11-years old, and her
mother picked up an application at the King of Prussia
store. The application form announced:
Annie, America's most beloved musical[,] and Macy's,
the world's largest store, are conducting a talent search
for a new "Annie" to star in the 20th Anniversary
Broadway production and national Tour of Annie. . . .
Id. at 22a. The reverse side of the application form
contained the "Official Rules [of] Macy's Search for
Broadway's New ``Annie.' " See id. at 23a. In addition to
explaining the two-part audition process, the official rules
provided, in relevant part:
1. All participants must be accompanied by a parent or
legal guardian and must bring completed application
forms to one of the Macy's audition locations . . . and
be prepared to audition. . . .
2. The "Annie" selected at the "Annie-Off-Final
Callback" will be required to work with a trained dog.
The tour commences in Fall 1996, with a Broadway
opening tentatively scheduled for Spring 1997, [and]
with a post-Broadway tour to follow.
***
6. [Y]ou and your parent or legal guardian are
responsible for your own conduct, and hereby release
Macy's . . . and the Producers . . . from any liability to
or with regard to the participants and/or her parent or
legal guardian with respect to the audition(s).
***
8. All determinations made by the Producers or their
designated judges are being made at their sole
discretion and each such determination is final.
Id.3 Unlike Macy's contract with the producers, neither the
(Text continued on page 6)
_________________________________________________________________
3. Because the District Court relied heavily on the official rules in
rendering its decision, we provide them here in full:
4
1. All participants must be accompanied by a parent or legal
guardian and must bring completed application forms to one of the
Macy's audition locations on the dates and times listed on the
reverse of this form and be prepared to audition. Only one parent
or
legal guardian may accompany each participant.
2. The "Annie" selected at the "Annie-Off-Final Callback" will be
required to work with a trained dog. The tour commences Fall 1996,
with a Broadway opening tentatively scheduled for Spring 1997,
[and] with a post-Broadway tour to follow. Parent(s) or guardian(s)
will accompany tour children. Additional information on
arrangements for the final call-back and show rehearsals and
performances will be provided to each regional finalist selected to
attend the "Annie-Off-Final Callback" audition in New York City.
3. By participating, you agree to follow these Official Rules and
you
consent to the taking of a photograph, for identification purposes
only. You also agree that Macy's (and/or a Macy's designee) may use
your name, likeness, biographical data and/or [sic] voice for
advertising, promotional activities and/or publicity, whether or
not
related to the audition and also acknowledge that such use requires
neither any further permission nor any compensation. Participants
who are members of Actors' Equity Association must identify
themselves to an event representative as such, and will not be
audio
or video taped during the audition process. All application forms
are
the sole property of Macy's and Macy's is not responsible for any
lost, destroyed, incomplete, illegible or otherwise deficient or
unusable application forms.
4. In order to participate in the audition, you must complete and
return the reverse application form, be a U.S. resident, between
the
ages of 7 and 12 as of June 2, 1996[,] and you must be available
for
the final audition on Thursday, August 8, 1996[,] in New York City.
5. Macy's may require that you verify your date of birth and may
require that you provide a certified copy of your birth or
baptismal
certificate, school records or other document that states your date
of birth.
6. Participants' parents or legal guardians are responsible for any
tax obligations and expenses you may incur (such as the cost of
travel or hotel accommodations) for the initial audition. The
Classic
Annie Production Limited Partnership (the "Producers") will provide
travel and hotel accommodations to finalists selected for the
"Annie-
5
official rules4 nor any of the promotional materials included
a provision informing the participants that the winner of
the Search would receive only the opportunity to enter into
a standard actors' equity contract with the producers.
Joanna and her mother signed the official rules and
proceeded to the initial audition at the King of Prussia
store. Macy's publicized the event by placing balloons,
signs, pins, and other promotional materials advertising
"Macy's Search for Broadway's New ``Annie' " throughout the
store. After auditioning hundreds of "Annie" hopefuls, the
producers selected Joanna as the regional finalist. In a
press release, Macy's announced Joanna's success to the
public: "One in Ten She'll Be a Star!!! Macy's Brings Local
Girl One Step Closer Towards ``Tomorrow' to Become
Broadway's New ``Annie.' " Id. at 77a. The press release
further provided:
Philadelphia's own, twelve year-old Joanna Pacitti, will
join nine other talented girls for a final audition to cast
the title role in the 20th Anniversary production of the
classic Tony Award-winning musical, Annie, coming to
Broadway this season. . . . Ten finalists, most of whom
were selected from over two thousand "Annie" hopefuls
_________________________________________________________________
Off" call-back in Macy's Herald Square on Thursday, August 8,
1996. In addition, you and your parent or legal guardian are
responsible for your own conduct, and hereby release Macy's East,
Inc., its affiliates and each of their respective officers,
directors,
employees, agents, successors and assigns (for purposes of this
Paragraph 6, all included within the term "Macy's") and the
Producers and their successors and assigns from any liability to or
with regard to the participants and/or her parent or legal guardian
with respect to the audition(s).
7. The audition is subject to all applicable laws and regulations.
8. All determinations made by the Producers or their designated
judges are being made at their sole discretion and each such
determination is final.
App. at 23a.
4. Throughout the remainder of this opinion, we refer to the official
rules
and the application form as the "official rules."
6
. . ., will vie for the chance to become Broadway's new
"Annie."
Id. (emphasis in original).
At the producers' expense, Joanna and her mother
traveled to New York City for Joanna to participate in the
"Annie-Off-Final Call Back" at Macy's Herald Square store.
After auditioning for two days, the producers selected
Joanna to star as "Annie" in the 20th Anniversary
Broadway production. Again, Macy's announced Joanna's
success to the public, referring to her as "Broadway's New
``Annie.' " See id. at 59a-83a.
Joanna and her mother met with the producers and
signed an "Actors' Equity Association Standard Run-of-the-
Play Production Contract." See id. at 133a-68a. Consistent
with the Actors' Equity Association's rules governing
production contracts, the producers retained the right to
replace Joanna with another actor at any time as long as
they paid her salary through the term of her contract. See
id. at 168a.
For nearly a four-month period, Joanna performed the
role of "Annie" in the production's national tour. In so
doing, Joanna appeared in over 100 performances and in
six cities. In February 1997, approximately three weeks
before the scheduled Broadway opening, the producers
informed Joanna that her "services [would] no longer be
needed," and she was replaced by her understudy. Id. at
12a.
On March 21, 1997, plaintiffs filed suit against Macy's in
Pennsylvania state court, alleging breach of contract and
the following tort claims: (1) fraudulent misrepresentation,
(2) equitable estoppel, (3) public policy tort, (4) breach of
implied covenant of good faith and fair dealing, and (5)
punitive damages. See id. at 15a-21a. In particular,
plaintiffs alleged that Macy's failed to deliver the prize it
had offered, i.e., the starring role of "Annie" on Broadway,
and that Macy's knew it could not award this prize but
promoted its ability to do so nonetheless. See id. Macy's
subsequently removed the suit to federal district court
based on diversity.
7
During discovery, plaintiffs sought to uncover information
on the relationship between Macy's and the producers and
on the pecuniary benefit Macy's received from sponsoring
the Search. Macy's objected to their request, and the
District Court limited discovery to "what promises, if any,
were made by defendant prior to and at the final audition
. . . in New York City that the person selected at that
audition would appear in the role as Annie." Id. at 38a.
Plaintiffs moved for reconsideration, and the District Court
denied that motion on December 19, 1997. See id. at 50a.
Macy's then moved for summary judgment, contending
that it did not deprive Joanna of any prize she had been
promised and that her rights were limited by the terms of
her contract with the producers. See id. at 24a, 126a. In
support of its motion, Macy's proffered, among other things,
its contract with the producers, which, as explained above,
specified that the successful contestant would receive only
the opportunity to enter into a standard actors' equity
contract with the producers.
The District Court granted summary judgment in favor of
Macy's. See Pacitti v. Macy's, No. Civ. A. 97-2557, 1998 WL
512938 (E.D. Pa. Aug. 18, 1998). Addressing plaintiffs'
breach of contract claim, the District Court concluded that
the contract was unambiguous and capable of only one
reasonable interpretation -- i.e., that Macy's offered only an
audition for the opportunity to enter into a standard actors'
equity contract with the producers for the title role in
"Annie." See id. at *3-4. Therefore, the Court rejected
plaintiffs' contention that Macy's offered Joanna a
guaranteed Broadway opening, see id. at *4, and the Court
concluded:
Plaintiffs received the benefit of their bargain by being
offered a contract with the Producers for the "Annie"
role, in exchange for Ms. Pacitti participating in
"Macy's Search for Broadway's New Annie." . . . When
the Producers offered a contract to Plaintiffs consistent
with the terms of the Official Rules[,] any possible
obligation Macy's had to Plaintiffs was fully met.
Id.
8
After rejecting plaintiffs' breach of contract claim, the
District Court turned to their tort claims. See id. Reasoning
that each cause of action was predicated upon the
assertion that Macy's offered Joanna the role of "Annie" on
Broadway, and concluding that Macy's made no such
representation, the District Court granted Macy's motion for
summary judgment on these claims as well. See id.
Plaintiffs then took this appeal. In their notice of appeal,
plaintiffs state only that they appeal from the District
Court's order granting summary judgment for Macy's. See
App. at 235a. In this appeal, however, plaintiffs also argue
that the District Court abused its discretion in limiting the
scope of discovery.
II.
A. We turn first to plaintiffs' argument that the District
Court erred in granting summary judgment in favor of
Macy's on the breach of contract claim. We exercise plenary
review over a grant of summary judgment and apply the
same legal standard used by the District Court. See Hullet
v. Towers, Perrin, Forster & Crosby, Inc., 38 F.3d 107, 111
(3d Cir. 1994). In so doing, we evaluate the evidence in the
light most favorable to the nonmoving party and draw all
reasonable inferences in that party's favor. See id. We
conclude that the District Court erred.
Under the law of Pennsylvania,5"[t]he promoter of a
[prize-winning] contest, by making public the conditions
and rules of the contest, makes an offer, and if before the
offer is withdrawn another person acts upon it, the
promoter is bound to perform his promise." Cobaugh v.
Klick-Lewis, Inc., 561 A.2d 1248, 1249 (Pa. Super. Ct. 1989)
(quoting Annotation, Private Rights and Remedies Growing
Out of Prize-winning Contests, 87 A.L.R.2d 649, 661). An
_________________________________________________________________
5. Because the laws of New York and Pennsylvania are identical in all
aspects material to the resolution of this case, and because the parties
do not assert a preference for the law of one jurisdiction over the other,
we, like the District Court, will not engage in a choice of law analysis.
See Pacitti v. Macy's, No. Civ. A. 97-2557, 1998 WL 512938, at *2 n.2
(E.D. Pa. Aug. 18, 1998). In addressing plaintiffs' breach of contract
claim, however, we refer only to the law of Pennsylvania.
9
offer has been defined as "a manifestation of willingness to
enter into a bargain, so made as to justify another person
in understanding that his assent to that bargain is invited
and will conclude it." Cobaugh, 561 A.2d at 1249 (citing
Restatement (Second) of Contracts S 24; 8 P.L.E. Contracts
S 23). The offer to award a prize results in an enforceable
contract if the offeree performs the required action before
the offer is withdrawn. See id.
Here, the parties entered into an enforceable contract
under Pennsylvania law. Macy's offered girls the
opportunity of becoming "Broadway's New ``Annie' " by
participating in and winning the auditions, and Joanna
participated in and won the auditions. Therefore, the
dispute in this appeal relates to the parties' interpretation
of that contract and, in particular, to the question whether
the District Court properly found that the contract is
unambiguous. Determining whether a contract is
ambiguous is a legal question, and our review is plenary.
See Mellon Bank, N.A. v. Aetna Business Credit, Inc., 619
F.2d 1001, 1011 (3d Cir. 1980).
The purpose of contract interpretation is to ascertain and
effectuate the objectively manifested intentions of the
contracting parties. See Hullet v. Towers, Perrin, Forster &
Crosby, Inc., 38 F.3d 107, 111 (3d Cir. 1994) (citing Mellon
Bank, 619 F.2d at 1009). The court first determines
whether the contract is ambiguous. See Hullet , 38 F.3d at111 (citing Stendardo v. Federal Nat'l Mortgage Ass'n, 991
F.2d 1089, 1094 (3d Cir. 1993)). A contract is ambiguous
if it is capable of more than one reasonable interpretation.
See Mellon Bank, 619 F.2d at 1011 (defining ambiguity as
an "[i]ntellectual uncertainty [or] the condition of admitting
two or more meanings, of being understood in more than
one way, or referring to two or more things at the same
time. . . ."). If the contract as a whole is susceptible to more
than one reading, the factfinder resolves the matter. See
Hullet, 38 F.3d at 111. On the other hand, where it is
unambiguous and can be interpreted only one way, the
court interprets the contract as a matter of law. See id.In determining whether a contract is ambiguous, the
court "assumes the intent of the parties to an instrument
is ``embodied in the writing itself, and when the words are
10
clear and unambiguous the intent is to be discovered only
from the express language of the agreement.' " Id. (citing
County of Dauphin v. Fidelity & Deposit Co., 770 F. Supp.
248, 251 (M.D. Pa.), aff'd, 937 F.2d 596 (3d Cir. 1991)).
This does not mean, however, that the court is confined to
the "four corners of the written document." Hullet, 38 F.3d
at 111 (citing Mellon Bank, 619 F.2d at 1011). Rather, the
court reads the contract in the context in which it was
made. See Hullet, 38 F.3d at 111 (citing Steuart v.
McChesney, 444 A.2d 659, 662 (Pa. 1982)). Therefore, to
determine the parties' intentions, the court may consider,
among other things, "the words of the contract, the
alternative meaning suggested by counsel, and the nature
of the objective evidence to be offered in support of that
meaning." Hullet, 38 F.3d at 111 (quoting Mellon Bank, 619
F.2d at 1011).
In this case, the District Court concluded that the
contract was unambiguous and capable of only one
reasonable interpretation -- i.e., that Macy's offered only an
audition for the opportunity to enter into a standard actors'
equity contract with the producers for the title role in
"Annie." See Pacitti v. Macy's, No. Civ. A. 97-2557, 1998 WL
512938, at *3-4 (E.D. Pa. Aug. 18, 1998). In reaching this
conclusion, the Court noted that the official rules
repeatedly referred to the promotion as an "audition," as
opposed to a "contest," and vested "sole discretion" in the
producers to make final determinations. See id. at *3.
Hence, the District Court found that "Plaintiffs could not
reasonably have relied upon Macy's as the selector of
``Annie' or as a controller of the Producers," id., and that "it
was obvious that Macy's was promoting auditions for the
benefit of the Annie Producers." Id. at *4. The District Court
also found that plaintiffs "knew that while Macy's was
promoting the search, it was not the entity that would be
contracting with the new ``Annie.' " Id. at *3. Rather, the
District Court noted, plaintiffs "wholly expected" to sign a
standard actors' equity contract with the producers and,
according to the Court, their expectation is evidenced by
the fact that they executed such a contract after Joanna
won the Search. See id. The Court explained further:
The contract which she signed with the Producers did
not guarantee her that she would open on Broadway,
11
but instead considered her to be like every other actor
in "Annie" who had won their role through an audition
process but could be replaced at the Producers'
discretion pursuant to the standard equity contract.
Id. Therefore, the District Court rejected plaintiffs'
contention that Macy's offered Joanna a guaranteed
Broadway opening, see id. at *4, and the Court concluded:
Plaintiffs received the benefit of their bargain by being
offered a contract with the Producers for the "Annie"
role, in exchange for Ms. Pacitti participating in
"Macy's Search for Broadway's New Annie." . . . When
the Producers offered a contract to Plaintiffs consistent
with the terms of the Official Rules[,] any possible
obligation Macy's had to Plaintiffs was fully met.
Id.
Applying the standards discussed above, we conclude
that the District Court erred in determining that the
contract was capable of only one reasonable interpretation.
Plaintiffs' interpretation -- that Macy's offered the prize of
performing as "Annie" on Broadway for at least some period
-- is a reasonable alternative to that of the District Court.
The official rules and promotional materials referred to
the promotion as "Macy's Search for Broadway's New
``Annie.' " The official rules provided that the producers and
Macy's were "conducting a talent search for the new ``Annie'
to star in the 20th Anniversary Broadway production," and
the advertisement in the Philadelphia Inquirer promised
that "[t]he starring role in this 20th Anniversary Broadway
Production and National Tour could be yours!" From these
assertions, one reasonably could conclude that Macy's
offered the winner of the Search the prize of starring as
"Annie" on Broadway. In addition, the use of the word
"audition," as opposed to "contest," in the official rules does
not make plaintiffs' interpretation unreasonable. As
plaintiffs assert:
[T]he word ``audition' refers to the process a contestant
must undergo before she can ``win' the prize. . . . It
follows, one would think, the girl selected after the
``final audition' has won something more than an
``audition.'
12
Appellants' Br. at 20-21 (emphasis in original).
Moreover, it is not unreasonable to conclude that Macy's
had the ability to offer the winner of the Search the starring
role on Broadway. The official rules provided that:
Annie, America's most beloved musical[,] and Macy's,
the world's largest store, are conducting a talent search
for a new "Annie" to star in the 20th Anniversary
Broadway production and national Tour of Annie. . . .
App. at 22a (emphasis added). That passage suggests that
Macy's and the producers jointly promoted and hosted the
Search. It does not indicate any relative imbalance of
authority in favor of the producers. Nor do we believe that
the clause vesting "sole discretion" in the producers
supports only the interpretation that the producers were
"the sole determiners of the Annie role." Pacitti, 1998 WL
512938, at *3 (emphasis added). Rather, that clause can be
interpreted more narrowly as only restricting Macy's from
selecting the winner of the auditions.
Further, Macy's at no point revealed -- either through its
printed materials or other means -- that the winner of the
Search would receive only the opportunity to sign a
standard actors' equity contract with the producers. 6 Nor do
the facts suggest that plaintiffs -- none of whom was a
member of the Actors' Equity Association -- had any
knowledge greater than that provided by Macy's. 7 We do not
believe that Macy's role was so "obvious" that it need not
_________________________________________________________________
6. Macy's should have manifested its intention in the contract by limiting
or qualifying its offer accordingly. See Cobaugh , 516 A.2d at 1250-51
(noting that it is the duty of the drafter of the contract to exercise due
care in explaining its offer so as not to mislead the public); Hutchinson
v. Sunbeam Coal Corp., 519 A.2d 385, 390 n.5 (Pa. 1986) ("[I]n
determining the intention of the parties to a written contract, the
writing
must be construed against the party drafting the document.").
7. We disagree with the District Court's assertion that based on the
general release clause, it is clear that plaintiffs"knew that while Macy's
was promoting the search, it was not the entity that would be
contracting with the new ``Annie.' " Pacitti, 1998 WL 512938, at *3. That
clause provides:
[Y]ou and your parent or legal guardian are responsible for your
own
conduct, and hereby release Macy's . . . and the Producers . . .
from
any liability to or with regard to the participants and/or her
parent
or legal guardian with respect to the audition(s).
App. at 23a. As is clear from the language quoted above, that clause not
only releases Macy's but also the producers.
13
have limited its offer to public, and we find it telling that
Macy's contract with the producers contained qualifications
on the prize to be offered. Therefore, we conclude that it
was reasonable for plaintiffs to believe that Macy's offered
the starring role of "Annie" on Broadway.
We reach this conclusion even though plaintiffs executed
a standard actors' equity contract with the producers.
Courts may consider the subsequent actions of the
contracting parties to ascertain the parties' intentions and
resolve any ambiguities. See Department of Transp. v.
Mosites Constr. Co., 494 A.2d 41, 43 (Pa. Commw. Ct.
1985) ("The intention of the parties must control the
interpretation of the contract but if the intent is unclear
from the words of the contract, we may examine extrinsic
evidence including consideration of the subject matter of
the contract, the circumstances surrounding its execution
and the subsequent acts of the parties."); see also In re
Estate of Herr, 161 A.2d 32, 34 (Pa. 1960). Joanna's
contract with the producers, however, does not
demonstrate plainly and unambiguously that when
plaintiffs contracted with Macy's, they "wholly expected" to
execute a standard actors' equity contract with the
producers.
For these reasons, we hold that the contractual language
is ambiguous, and its interpretation should be left to the
factfinder for resolution. Accordingly, the District Court
erred in concluding that Macy's is entitled to judgment as
a matter of law.
B. Macy's also contends that plaintiffs' claims are barred
by the express release in the official rules. The official rules
provide, in pertinent part:
[Y]ou and your parent or legal guardian are responsible
for your own conduct, and hereby release Macy's . . .
and the Producers . . . from any liability to or with
regard to the participants and/or her parent or legal
guardian with respect to the audition(s).
App. at 23a. That paragraph simply releases Macy's from
liability "with respect to the audition(s)." It does not allow
Macy's to escape liability arising from this action. We
therefore reject Macy's contention.
14
C. With respect to the tort causes of action, plaintiffs
maintain that the District Court erred in granting summary
judgment. As noted above, the District Court dismissed
these claims because it had rejected the predicate upon
which each claim was based, i.e., that Macy's offered the
successful participant the role of "Annie" on Broadway. See
Pacitti, 1998 WL 512938, at *4. Because we conclude that
the contract reasonably may be interpreted to make such
an offer, we reverse on these claims as well and remand for
further proceedings.
III.
We now turn to plaintiffs' contention that the District
Court abused its discretion by limiting the scope of discovery.8
Specifically, plaintiffs argue that the District Court's
discovery order precluded them from uncovering facts
relevant to their fraudulent misrepresentation claims.
Macy's asserts that review of this issue is improper and, in
the alternative, that the District Court's order was a proper
exercise of discretion. We conclude that review is
appropriate and that the District Court abused its
discretion.
A. As a preliminary matter, we must determine whether
we have jurisdiction to review the discovery order. Macy's
argues that we lack jurisdiction because plaintiffs' notice of
appeal does not indicate that they are appealing the
discovery order. In their notice of appeal, plaintiffs specify
only the District Court's order of August 19, 1998, granting
summary judgment for Macy's. See App. at 235a.9 We
_________________________________________________________________
8. Citing Arnold Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564,
568 (3d Cir. 1986), and Mannington Mills, Inc. v. Congoleum Indus., Inc.,
610 F.2d 1059, 1073 (3d Cir. 1979), plaintiffs also argue that they were
not given sufficient opportunity to conduct discovery to withstand Macy's
motion for summary judgment and that therefore reversal of the
summary judgment order is required. In response, Macy's contends that
because plaintiffs failed to file a Rule 56(f) motion, they have not
preserved this issue for appeal. Because we are reversing on the breach
of contract claim, we need not address this issue.
9. The notice of appeal provides, in full:
15
conclude that plaintiffs' notice of appeal from the District
Court's final judgment is sufficient to support the Court's
earlier discovery order.
Federal Rule of Appellate Procedure 3(c) states that the
notice of appeal must "designate the judgment, order or
part thereof appealed from." Fed. R. App. P. 3(c). However,
we liberally construe the requirements of Rule 3(c). See
Drinkwater v. Union Carbide Corp., 904 F.2d 853, 858 (3d
Cir. 1990); Williams v. Guzzardi, 875 F.2d 46, 49-50 (3d
Cir. 1989). Thus, we have stated:
[W]hen an appellant gives notice that he is appealing
from a final order, failing to refer specifically to earlier
orders disposing of other claims or other parties does
not preclude us from reviewing those orders.
Shea v. Smith, 966 F.2d 127, 129 (3d Cir. 1992) (citing
Murray v. Commercial Union Ins. Co., 782 F.2d 432, 434 (3d
Cir. 1986)). And we have explained: "[S]ince . . . only a final
judgment or order is appealable, the appeal from afinal
judgment draws in question all prior non-final orders and
rulings." See Drinkwater, 904 F.2d at 858 (exercising
jurisdiction over unspecified order because finality doctrine
barred plaintiff from appealing that order until after the
entry of final judgment) (citing Elfman Motors, Inc. v.
Chrysler Corp., 567 F.2d 1252, 1253 (3d Cir. 1977) (per
curiam)); see also Polonski v. Trump Taj Mahal Assocs., 137
F.3d 139, 144 (3d Cir.), cert. denied, 119 S. Ct. 66 (1998)
("[Liberal] treatment is particularly appropriate where the
order appealed is discretionary and relates back to the
judgment sought to be reviewed."); Tabron v. Grace, 6 F.3d
_________________________________________________________________
Notice is hereby given that Joanna Pacitti, a minor, by Joseph
Pacitti and Stella Pacitti, her parents and guardians, plaintiffs
in the
above-named case, hereby appeal to the United States Court of
Appeal[s] for the Third Circuit from an order granting summary
judgment in favor of defendant Macy's and Macy's East and against
plaintiffs which dismissed the action as to defendant Macy's and
Macy's East. The said Order hereby appealed from was entered in
this action on the 19th day of August, 1998.
App. at 235a.
16
147, 153 n.2 (3d Cir. 1993) ("[W]e construe notices of
appeal liberally as covering unspecified prior orders if they
are related to the specified order that was appealed from.");
Wright, Miller & Cooper, Federal Practice & Procedure,
Jurisdiction 3d S 3949.4 ("[A] notice of appeal that names
the final judgment is sufficient to support review of all
earlier orders that merge in the final judgment under the
general rule that appeal from a final judgment supports
review of all earlier interlocutory orders.").
We have reviewed orders not specified in the notice of
appeal where: (1) there is a connection between the
specified and unspecified order, (2) the intention to appeal
the unspecified order is apparent, and (3) the opposing
party is not prejudiced and has a full opportunity to brief
the issues. See Polonski, 137 F.3d at 144 (exercising
jurisdiction over order granting attorney's fees even though
notice of appeal specified only the order granting summary
judgment); Tabron, 6 F.3d at 153 n.2 (reviewing order
denying request for counsel even though notice of appeal
specified only the order granting summary judgment).
Review is appropriate here. The discovery order is
sufficiently related to the order granting summary
judgment. The final judgment rule barred plaintiffs from
appealing the discovery order until the District Court
granted Macy's motion for summary judgment. Plaintiffs'
notice of appeal from the final judgment, therefore, brought
up for review the earlier interlocutory discovery order. Cf.
Drinkwater, 904 F.2d at 858; Polonski, 137 F.3d at 144;
Tabron, 6 F.3d at 153 n.2; Wright, Miller & Cooper, Federal
Practice & Procedure, Jurisdiction 3d S 3949.4. Moreover,
Macy's had notice of plaintiffs' intent to appeal the
discovery order since plaintiffs sought review of the entire
judgment and argued the merits of the discovery order in
their opening appellate brief. See Polonski, 137 F.3d at 144(stating that "the appellate proceedings clearly manifest an
intent to appeal"); see also Canady v. Crestar Mortgage
Corp., 109 F.3d 969, 974 (4th Cir. 1997) (noting that
arguing merits of issue in opening appellate brief puts
appellee on notice as to that issue). And finally, we discern
no prejudice to Macy's. Accordingly, we have jurisdiction.
17
B. Having found that we have jurisdiction to review this
issue, we must next determine whether the District Court
abused its discretion in limiting discovery to "what
promises, if any, were made by defendant prior to and at
the final audition . . . in New York City that the person
selected at that audition would appear in the role as
Annie." App. at 38a. Plaintiffs contend that the District
Court abused its discretion by unduly limiting discovery to
preclude them from obtaining information relevant to their
fraudulent misrepresentation claims. We review the District
Court's discovery order for abuse of discretion. See Arnold
Pontiac-GMC, Inc. v. General Motors Corp., 786 F.2d 564,
568 (3d Cir. 1986).
The Federal Rules of Civil Procedure provide, in pertinent
part:
Parties may obtain discovery regarding any matter, not
privileged, which is relevant to the subject matter
involved in the pending action, whether it relates to the
claim or defense of the party seeking discovery or to
the claim or defense of any other party. . . . The
information sought need not be admissible at the trial
if the information sought appears reasonably
calculated to lead to the discovery of admissible
evidence.
Fed. R. Civ. P. 26(b)(1). It is well recognized that the federal
rules allow broad and liberal discovery. See In re Madden,
151 F.3d 125, 128 (3d Cir. 1998) ("Pretrial discovery is . . .
``accorded a broad and liberal treatment.' ") (citing Hickman
v. Taylor, 329 U.S. 495, 507 (1947)); see also Wright, Miller
& Marcus, Federal Practice & Procedure, Civil 2d S 2007
("The rule does allow broad scope to discovery and this has
been well recognized by the courts.").
To succeed on a claim for fraudulent misrepresentation
under Pennsylvania law, plaintiffs must establish the
following elements: (1) a misrepresentation, (2) a fraudulent
utterance, (3) an intention to induce action on the part of
the recipient, (4) a justifiable reliance by the recipient upon
the misrepresentation, and (5) damage to the recipient as a
proximate result. See Banks v. Jerome Taylor & Assocs.,
700 A.2d 1329, 1333 (Pa. Super. Ct. 1997). To prove these
18
elements, plaintiffs must demonstrate that Macy's
fraudulently misrepresented that the successful participant
would perform as "Annie" on Broadway, that it did so with
the intent to induce participation in the Search, and that
Joanna relied to her detriment upon the misrepresentation.
Plaintiffs seek production of the following: (1) Macy's
communications with, and relationship to, the producers
regarding the terms of the contract that the producers
intended to offer the successful contestant and (2) the
pecuniary benefit Macy's received as a result of the Search.
See Appellants' Br. at 12, 24. This information could shed
light on Macy's knowledge that it could not offer a
Broadway opening and its motives for failing to limit the
offer accordingly. Thus, we conclude that the discovery
sought here is directly relevant to the subject matter of this
dispute.
We also find it noteworthy that Macy's submitted its
contract with the producers in support of summary
judgment. As previously noted, the federal rules permit
discovery of, among other things, "any matter, not
privileged, which is relevant to the subject matter involved
in the pending action, whether it relates to the claim or
defense of the party seeking discovery or to the claim or
defense of any other party . . . ." Fed. R. Civ. P. 26(b)(1)
(emphasis added).
Macy's asserts that the only relevant representations are
"those to which plaintiffs were . . . privy" and "upon which
plaintiffs could have reasonably relied." Appellee's Br. at 34.
This "what they don't know can't hurt them" argument is
unconvincing. The fact that plaintiffs were not privy to the
information that Macy's possessed when Joanna relied on
its representations and participated in the Search forms the
very basis of plaintiffs' fraudulent misrepresentation claims.10
_________________________________________________________________
10. Plaintiffs also argue that the District Court erred in limiting the
number of depositions. In light of our disposition here, the District
Court
on remand can reconsider whether additional depositions are necessary
to effectuate plaintiffs' discovery needs with respect to their fraudulent
misrepresentation claims. Only if one of the factors in Federal Rules of
Civil Procedure 26(b)(2) is present should the Court limit the number of
depositions. See Fed. R. Civ. P. 26(b)(2) (setting forth situations in
which
courts may limit the number of depositions).
19
Accordingly, we conclude that the District Court erred in
limiting discovery.
IV.
For the reasons discussed above, we reverse the grant of
summary judgment on all claims and remand for further
proceedings in accordance with this opinion. We also
reverse and remand for plaintiffs to conduct discovery
consistent with this opinion.
20
WILLIAM STAFFORD, Senior District Judge, dissenting.
I cannot agree that the district judge erred in granting
summary judgment in favor of Macy's. Macy's offered
Joanna Pacitti the opportunity of starring in the 20th
Anniversary Broadway production and national tour of
"Annie." Joanna Pacitti received that opportunity. She
auditioned for the part of Annie; she was selected by the
show's producers to play the part of Annie; and she, in fact,
played the part of Annie, performing in over one hundred
performances in six cities during the production's national
tour. She did not, however, appear on Broadway because
the producers decided to replace her before the Broadway
opening.
The district court concluded, and I agree, that Joanna
Pacitti received the benefit of her bargain with Macy's.
Because I do not believe that her contract with Macy's was
subject to the interpretation urged by Plaintiffs, I must
respectfully dissent.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
21