UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

ICAP, INCORPORATED,
Plaintiff-Appellant,

v.
                                                                   No. 99-2087
GLOBAL DIGITAL SATELLITE SYSTEMS,
INCORPORATED, a British Virgin
Island Corporation,
Defendant-Appellee.

Appeal from the United States District Court
for the Eastern District of Virginia, at Alexandria.
Theresa Carroll Buchanan, Magistrate Judge.
(CA-98-1209-A)

Argued: June 6, 2000

Decided: July 31, 2000

Before LUTTIG, TRAXLER, and KING, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Michael Edward Geltner, GELTNER & ASSOCIATES,
P.C., Washington, D.C., for Appellant. Earl John Oberbauer, Jr.,
Manassas, Virginia, for Appellee.

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Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

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OPINION

PER CURIAM:

Appellant ICap, Inc., brought this action against Global Digital Sat-
ellite Systems, Inc., alleging that Global breached an oral contract to
pay ICap a finder's fee of $1,000,000. The parties agreed to a bench
trial before a magistrate judge, see 28 U.S.C.A. § 636(c)(1) (West
1993), who ruled against ICap on its claims.1 ICap appeals, and we
affirm.

I.

Global, which manufactures and installs satellite-based telecommu-
nications systems, was searching for a joint-venture partner to facili-
tate the installation of a telephone system in Egypt. Global retained
the services of ICap, an investment banking firm that provides financ-
ing for national and international public infrastructure projects, to
locate a qualified partner. The parties initially anticipated that, in
addition to locating a partner, ICap would serve as the project man-
ager for the joint venture. All involved agreed that ICap would be
compensated for its services, although the amount and terms of the
compensation were not agreed to in advance.

ICap arranged for meetings between Global and Ashraf Nour, who
had located a qualified principal in Egypt. It later became apparent
that Nour would manage the project, and ICap's role was reduced to
that of a finder only.

In February 1998, shortly before the formalization of the agreement
between Global and Nour, ICap made a concerted effort to finalize its
agreement with Global. On February 14, ICap's principals placed a
_________________________________________________________________
1 The magistrate judge also rejected ICap's quantum meruit claim, and
ICap does not pursue that claim on appeal.

                    2
telephone call to Nagaraj Murthy, the person designated by Global to
negotiate the terms of the agreement with ICap. According to ICap,
Murthy agreed during that telephone call that ICap would be paid
$1,000,000 as a finder's fee. After Murthy agreed to that figure, and
while the telephone call continued, ICap faxed Global a proposed
agency agreement that included the $1,000,000 finder's fee.

All three of ICap's principals who participated in the February 14
telephone conversation testified at trial that Murthy specifically
agreed to a $1,000,000 fee during the call. Murthy, however, testified
that he did not agree to that fee and that he told ICap the proposed
agreement was too complicated and would need to be approved by
Laurence Goshorn, Global's president.

Because Global did not execute the February agreement, ICap
faxed another agreement to Goshorn on March 10, 1998. The letter
accompanying the March agreement stated that "in order to document
our agreement, we enclose a revised draft, which is based on docu-
ments discussed and negotiated with representatives of [Global] since
November. We believe it also to be responsive to all issues raised by
[Murthy]." J.A. 122. Although the March agreement reflected the
$1,000,000 finder's fee, it contained different terms for the payment
of the fee. Mark Latimer, one of ICap's principals, explained at trial
that he meant to fax the February agreement to Global, but that he
inadvertently sent a prior draft of the agreement. According to Lati-
mer, he believed that ICap and Global had reached an agreement in
February, and the March fax was not intended to be further negotia-
tion of their compensation.

When Goshorn received the March agreement, he faxed a response
stating that he was "shocked at the points on your cover letter" and
that the $1,000,000 finder's fee "leaves me baffled!" J.A. 125. Com-
munications between ICap and Global broke down thereafter.

Global entered into an agreement with the Egyptian principal
located by Nour to install Global's telecommunications system in
Egypt. As of the time of the hearing, however, the Egyptian govern-
ment had refused to issue the necessary permits, and, consequently,
the joint venture had earned no money.

                    3
By July 1998, ICap had decided that it would be necessary to file
suit against Global to collect its fee. ICap called Global to inform it
that a lawsuit was forthcoming. A Global representative suggested
that the parties make a "last ditch effort" at settling the claim. J.A. 61.
After more discussions, Global faxed ICap a letter offering to pay
ICap $50,000. ICap rejected that offer as "insulting low," J.A. 127,
and made a counteroffer of $794,000. Global refused ICap's coun-
teroffer, and this action followed.

After a bench trial, the magistrate judge concluded that no contract
had been reached between the parties on February 14:

          [T]he statements and outward expressions of the parties
          after February 14, 1998, constitute on-going negotiation of
          [ICap's] fee. These on-going negotiations, which continued
          until the end of July 1998, establish that the parties never
          had a meeting of the minds as to the amount and terms of
          [ICap's] compensation . . . . [B]ecause payment was contin-
          gent upon the signing of the joint venture agreement and the
          success of the project, the Court finds that the terms of pay-
          ment are a material element of the contract. Consequently,
          the Court finds that there was not a meeting of the minds on
          all material elements of the contract and there is no express
          oral contract that is binding on the parties.

J.A. 139-40. The court thus ruled against ICap on its breach of con-
tract claim.

II.

ICap first argues that the magistrate judge considered settlement
negotiations between the parties when concluding that no agreement
had been reached, thus violating Rule 408 of the Federal Rules of
Evidence. ICap contends that all of the communications with Global
after February 14 were attempts to settle its claim with Global.
According to ICap, the magistrate judge specifically did not make the
pivotal credibility determination--whether ICap's or Global's wit-
nesses were telling the truth about the substance of the February 14
telephone conversation--and instead resolved the case solely through
an impermissible consideration of settlement evidence. We disagree.

                     4
Rule 408 provides that:

          Evidence of (1) furnishing or offering or promising to fur-
         nish, or (2) accepting or offering or promising to accept, a
         valuable consideration in compromising or attempting to
         compromise a claim which was disputed as to either validity
         or amount, is not admissible to prove liability for or invalid-
         ity of the claim or its amount. Evidence of conduct or state-
         ments made in compromise negotiations is likewise not
         admissible. This rule does not require the exclusion of any
         evidence otherwise discoverable merely because it is pres-
         ented in the course of compromise negotiations. This rule
         also does not require exclusion when the evidence is offered
         for another purpose, such as proving bias or prejudice of a
         witness, negativing a contention of undue delay, or proving
         an effort to obstruct a criminal investigation or prosecution.

We will assume for the purposes of this opinion that ICap did not
waive its Rule 408 claim by introducing the disputed evidence with-
out mentioning Rule 408 or otherwise bringing to the court's attention
that the evidence should not be considered when determining the
validity of ICap's claims or its amount.2 With this assumption, then,
the question that must be resolved is whether the evidence of the com-
munications between the parties after February 14 in fact falls within
the scope of Rule 408.

To determine whether statements come within Rule 408, the
inquiry is whether the "statements or conduct were intended to be part
of the negotiations for compromise." Fiberglass Insulators, Inc. v.
DuPuy, 

, 654 (4th Cir. 1988). The determination that a
statement does or does not fall within the rule is a factual determina-
tion that must be accepted on appeal unless clearly erroneous. See id.
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2 ICap did file a post-trial motion in which it argued that it reached an
oral agreement with Global on February 14 and that the March 10 agree-
ment was not intended as further negotiation of the terms of that oral
agreement. However, even in that motion, ICap did not mention Rule
408 or otherwise argue that the communications after February were part
of any effort to settle its breach of contract claim.

                    5
The magistrate judge did not specifically find that the post-
February communications were not negotiations to settle the disputed
claim, which is not surprising given that ICap raised the issue for the
first time on appeal. Nonetheless, the magistrate judge concluded that,
during the February 14 telephone call, the parties did not come to a
meeting of the minds as to the amount of ICap's fee or the terms for
payment of the fee. This conclusion is an implicit, but inescapable,
rejection of ICap's argument.

Clearly, there must first have been an agreement between ICap and
Global on the essential terms of how much ICap would be paid and
the terms under which that payment would be made before there
could be any attempt to settle a dispute over Global's failure to com-
ply with the agreement. By concluding that the parties did not reach
an agreement on those critical terms, the magistrate judge effectively
determined that the post-February communications were further, but
ultimately unsuccessful, contract negotiations.

Contrary to ICap's argument, the magistrate judge did make a
determination about the credibility of the witnesses when resolving
this issue. The appealed order states that "[b]oth parties presented wit-
ness testimony on [the issue of an oral contract]" and that "[t]he Court
finds the witnesses credible." J.A. 138. As we understand the order,
the magistrate judge concluded that all the witnesses involved in the
February 14 telephone call believed their trial testimony to be true--
ICap's principals believed Murthy agreed to the $1,000,000 fee, and
Murthy believed he did not agree to the fee. Thus, the magistrate
judge concluded that the parties never reached an agreement on the
essential terms of the contract.

Given the disputed evidence about the substance of the February
14 telephone conversation and the statements in the letter accompany-
ing the March 10 agreement that characterized the agreement as a "re-
vised" one that was "responsive" to issues raised by Global, the
magistrate judge's no-meeting-of-the-minds finding is not clearly
erroneous. And, from that finding, the conclusion that the post-
February communications between the parties were contract negotia-

                    6
tions, not settlement negotiations, necessarily follows. Under these
circumstances, Rule 408 is simply inapplicable to this case.3

III.

ICap sought to admit the testimony of an expert who would testify
that Scott, one of ICap's principals, had taken and passed a polygraph
examination that asked whether Murthy had agreed to the $1,000,000
fee during the February 14 telephone conversation. The magistrate
judge refused to consider the evidence, concluding that the use of
polygraph evidence to bolster or impeach the testimony of a witness
is not allowed in this circuit.

According to ICap, the Supreme Court's opinion in Daubert v.
Merrell Dow Pharmaceuticals, Inc., 

 (1993), calls into
question our prior cases establishing a per se rule against the use of
polygraph evidence to impeach or bolster the credibility of witness.
See, e.g., United States v. A & S Council Oil Co., 

,
1134 (4th Cir. 1991) ("This court's precedents preclude direct attacks
on or bolstering of the credibility of a witness through evidence that
the witness has taken a polygraph test."). ICap thus contends the mag-
istrate judge erred in concluding that polygraph evidence is per se
inadmissible. We find no error.

In its pre-trial memorandum addressing the testimony of its poly-
graph expert, ICap sought to admit the evidence only if Global
attempted "to impeach Mr. Scott's credibility on the issue of whether
[Global] orally agreed to the $1,000,000 finder's fee." J.A. 21. At
trial, after the court denied ICap's request to call the polygraph
expert, counsel for ICap noted he "thought that it would be responsive
to bolstering after impeachment," J.A. 94, but that he had not heard
any impeachment.
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3 Even if the July discussions should be considered settlement negotia-
tions, the substance of the March agreement and accompanying letter,
when considered with the testimony about the February telephone call,
is more than sufficient to support the magistrate judge's conclusion that
there was no meeting of the minds as to the essential terms of the agree-
ment between ICap and Global.

                    7
Our review of Global's cross-examination of Scott confirms that
Global did not inquire into or otherwise challenge Scott's recollection
of the substance of the February 14 telephone call. Because the only
factual predicate under which ICap sought to admit the expert's
testimony--the impeachment of Scott's testimony--did not occur, the
magistrate judge committed no error in refusing to allow the expert
to testify.4

Moreover, in United States v. Sanchez, 

 (4th Cir.
1997), we reaffirmed our per se rejection of the use of polygraph evi-
dence to impeach the credibility of a witness and concluded that the
cases establishing that rule remain binding precedent notwithstanding
the change in the law arguably worked by Daubert . See id. at 197 n.3.
We also note that the Supreme Court recently concluded that a per se
rule excluding all polygraph evidence is constitutional. See United
States v. Scheffer, 

 (1998). We therefore reject ICap's
challenge to the exclusion of the polygraph evidence.

IV.

Accordingly, for the foregoing reasons, the decision of the magis-
trate judge is hereby affirmed.

AFFIRMED
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4 Given that the magistrate judge found ICap's witnesses to be credible,
the evidence would have been cumulative in any event.

                    8