O'NEILL, JR., District Judge.
Reynolds alleged that Penn breached its contract with him or, alternatively, that Penn had been unjustly enriched. At the conclusion of a six day trial, the jury found that Penn had been unjustly enriched and awarded Reynolds $66,000. Both parties filed post trial motions. Reynolds argues that I erroneously excluded evidence at trial and therefore a new trial is warranted. Penn argues that for several reasons it is entitled to judgment as a matter of law ("JMOL"). The motions are fully briefed and presently ripe for disposition.
Reynolds was a student in Penn's Executive Masters in Technology Management program. He alleges that Penn promised that upon his completion of the program Reynolds would be entitled to certain benefits. He further alleges that he never received such benefits. As a result, Reynolds filed this lawsuit.
Prior to his enrollment in the EMTM program, Reynolds was a marketing executive at the Xerox Corporation. Trial Tr. 58:1-10, Reynolds Test. (June 15, 2010). At the same time, he also served as President and CEO of Expand the Knowledge, a not-for-profit company that he had co-founded. Id. at 40:15-25. He testified that he logged approximately 110 hours of work per week between the two jobs. Id. at 40:15-16.
Reynolds first learned about the EMTM program from an advertisement in an in-flight magazine he reviewed while traveling. Id. at 40:10-12. At that time, Reynolds held four degrees: a Bachelor of Science degree in Marketing from Rider University; a Master of Science degree in Psychology from Chestnut Hill College; a Master of Science degree in E-Business from Temple University and a Master of Business Administration degree in Health
EMTM Website,
Reynolds next telephoned Joel Adler, then-associate director of the EMTM program, in an attempt to learn more about the program. Trial Tr. 46:14-16, Reynolds Test. (June 15, 2010). Adler invited Reynolds to attend an informational session directed toward prospective students. Id. at
After the informational session, Reynolds questioned Adler at length about why the degree was issued through the School of Engineering. Id. at 53:12-13. According to Reynolds, Adler explained to him that due to "turf wars" at Penn, "Wharton had to partner with [E]ngineering in order to issue the degree." Id. at 53:17-24. Adler clarified, however, that EMTM graduates receive three documents: (1) a degree issued by the University; (2) "a document signed by both deans of Wharton and Penn Engineering"; and (3) "a Moore Certificate [which represents] the engineering school's contribution to the program." Id. at 54:1-9. Reynolds testified that he expected to receive each of the three documents. Id. at 54:9-12.
Reynolds, who was primarily concerned with benefitting from the Wharton brand, asked Adler how he could represent his status with respect to Wharton. Id. at 54:12-14. Reynolds testified that Adler told him "it depends on who you're talking to ... you can use it any way you want.... if you're with engineers, you can talk about your Master's of Science in Engineering, and if you're with business people, you can talk about your Master's of Technology Management from the Wharton School." Id. at 54:14-19. Reynolds recalled that Adler, who had a Ph.D. in computer science from Wharton, told him "I'm a Wharton alumni [and] you're going to be equal to me." Id. at 55:21-23.
After considering all the information available to him, Reynolds decided to apply for admission to the EMTM program. Id. at 56:13-14. He addressed his application to "EMTM, Graduate Admissions Office, Penn Engineering." Id. at 58:25-59:11. In July 2002, Reynolds was accepted into the program. See Email from Reynolds to Adler (July 25, 2002, 5:50:01 A.M.) (Pl.'s Ex. 9).
He began his EMTM studies in August 2002. Trial Tr. 65:10-11, Reynolds (June 15, 2010). He testified that at first his experience "was good, we were able to use all the Wharton resources, I was a Wharton student, I was proud, I was showing up [] every other week." Id. at 65:20-22. In his first week in the EMTM program, with the help of Wharton's career services department, Reynolds was hired by the Siemens Corporation as the Director of Global Business Development. Id. at 66:1-3. In his new role, Reynolds was "responsible for 132 countries" and reported directly to the CEO, George Nolan. Id. at 66:1-6.
Despite his newfound professional success, Reynolds claimed that he was immediately dissatisfied with the education he was receiving in the EMTM program. Id. at 66:22-67:3. Eighteen of his twenty-one professors were adjuncts—a category of professors that Reynolds characterized as "hired guns." Id. at 66:16-22. In addition, Reynolds described the EMTM courses as "half courses" which required only eighteen hours of instruction as opposed to the thirty-six to forty-five hours required by "full Wharton courses." Id. at 67:6-9. Nevertheless, Reynolds successfully completed his first year of studies. Id. at 68:21-23.
It was not until the Autumn of 2003, the beginning of Reynolds's second year, that "everything went haywire." Id. at 69:5. By Reynolds's account, students were "outraged" over the fact that Penn had hired a new co-director of the EMTM program, Ziv Katalan, who allegedly intended to "eliminate [the] Wharton brand." Id. at 69:7-70:3. Reynolds's first disagreement with the new administration occurred while he was helping a student society organize a seminar series. When he attempted to reserve a room in Jon M. Huntsman Hall, a Wharton School building, he was told that he was not a Wharton student and therefore could not reserve a room in Huntsman Hall. Id. at 73:5-11. Because he had worked on a similar project during his first year in the program and had no trouble reserving a room, id. at 73:5-6, he called the EMTM program to find out why the policy had changed. Id. at 74:21-23. He was told that Katalan had forbidden EMTM students from reserving rooms in Wharton School buildings. Id. at 74:24-25.
The inability to reserve a room in Huntman Hall did not prevent Reynolds from going forward with the speaker series. On September 9, 2003, he invited Robert Cohen, Chief Information Officer of AstraZeneca, to speak at the seminar series. See Letter from Reynolds to Robert Cohen, Chief Information Officer, AstraZeneca (Sep. 9, 2003) (Def.'s Ex. 79). That letter was sent on Wharton letterhead and purported to extend the invitation "[o]n behalf of the Wharton School of Business." Id. Reynolds, along with his EMTM classmate Anurag Harsh, also circulated a flier on Wharton letterhead advertising a presentation given by John C. Carrow, Chief Information Officer of the Unisys Corporation. See Wharton Technology Club Executive Seminar Series Advertisement (Def.'s Ex. 81 at 18). The flier indicated that the presentation was sponsored by Siemens and supported by the Wharton Technology Club.
As a result of these publications, Katalan became concerned that Reynolds and Harsh were misrepresenting themselves as Wharton students and, worse, were purporting to act on behalf of the Wharton School. Id. at 26:11-23. So Katalan scheduled a meeting at a local Starbucks with Reynolds and Harsh to discuss his concerns. Trial Tr. 22:13-14, Reynolds Test. (June 16, 2010); 57:6-14, Katalan Test. (June 17, 2010). Reynolds testified that Katalan told those in attendance that they were not Wharton students. Trial Tr. 83:6-8, Reynolds Test. (June 15, 2010). Reynolds also asserted that Katalan "basically attacked us ... smashing a book on our table ... [spilling] coffee all over us, flipping out on us ...." Id. at 82:9-12. Katalan denied discussing in any manner the students' affiliation with the Wharton School and he further denied raising his voice, slamming a book or causing coffee to spill. Trial Tr. 64:22-65:2, Katalan Test. (June 17, 2010).
Following the meeting, Reynolds wrote to Judith Rodin, the President of the University of Pennsylvania, "to seek protection... from what has become a witch-hunt against me and conducted by Ziv Katalan Ph.D." See Letter from Reynolds to Rodin (Sep. 29, 2003) (Def.'s Ex. 88). Notably, Reynolds recited several of Katalan's "intolerable actions" but did not include allegations that Katalan slammed a book or spilled coffee. See id. He also did not allege in his letter to Rodin that Katalan told those in attendance that they were not Wharton students. See id.; but see Trial Tr. 83:6-8, Reynolds Test. (June 15, 2010) (Reynolds testified: "[y]eah, [Katalan] said we were not Wharton students....").
Katalan's actions lead to a "flurr[y] of surveys," presumably by student organizations, asking if EMTM students believed themselves to be Wharton students. Id. at 75:10-13. Katalan's own survey lead to yet another altercation between Reynolds and Penn's administration. Id. at 77:17-25. Reynolds believed that Katalan's survey contained a flaw that prevented the software from recording votes in favor of the answer Reynolds preferred. Id. at 77:21-23. So he voted multiple times. Id. at 78:3-6. This prompted Penn's Office of Student Conduct to initiate disciplinary proceedings against Reynolds for violating the Code of Student Conduct—which Reynolds described at trial as "some kind of stupid code"—by voting multiple times in the survey and by representing himself to be a Wharton student. See Letter from Michelle Goldfarb, Director of the Office of Student Conduct, to Reynolds (Oct. 15, 2003) (Pl.'s Ex. 22); see also Trial Tr. 78:14, 81:23-25, Reynolds Test. (June 15, 2010). Reynolds, apparently unimpressed by Penn's disciplinary efforts, described the proceedings as "petty" and "pathetic." Trial Tr. 78:15, Reynolds (June 15, 2010).
On November 1, 2003, Penn administration scheduled a town hall meeting. The purpose of the meeting was to clarify the nature of the EMTM program's affiliation with the Wharton School. See Townhall Meeting Tr. at 7-8 (Nov. 1, 2003).
According to Reynolds, the fact that he was considered an engineering student and not a Wharton student was potentially career ending. Trial Tr. 94:14-15, Reynolds Test. (June 15, 2010). He felt that in order to be competitive in his field, he needed to have a degree from a top ten business school.
This case has evolved rather dramatically over the course of its five year life span. Reynolds commenced this lawsuit on October 18, 2005 by filing a writ of summons in the Philadelphia County Court of Common Pleas. On March 6, 2006, Reynolds filed a verified complaint that alleged eight counts
Penn removed the case to this Court on March 22, 2006. (Doc. No. 1). Subject matter jurisdiction was predicated on 28 U.S.C. § 1331 as count 8 of the complaint alleged violations of the federal RICO statute. Penn filed an answer on May 16, 2006 and the case proceeded to discovery.
The discovery process was contentious, requiring frequent judicial intervention. Penn was compelled to file no fewer than ten discovery motions to obtain necessary documents and information from Reynolds and Harsh.
On June 14, 2007, Penn filed another motion to compel Reynolds and Harsh to produce electronic data concerning the PowerPoint presentation and emails that they alleged to have contained misrepresentations by Penn. See Def.'s Mot. to Compel. (June 14, 2007) (Doc. No. 31). In essence, Penn's motion requested access to Reynolds's and Harsh's personal computers and Harsh's email account. See id. at 6.
On August 4, 2008, Penn moved for an order excluding the documents that it suspected had been altered by Reynolds and Harsh. See Def.'s Mot. in Limine (Doc. No. 43). During discovery, Penn had concluded that the PowerPoint presentation that Reynolds claimed to have relied upon
On September 15, 2008, Harsh voluntarily withdrew his case with prejudice. I granted costs to Penn which the Clerk of Court calculated to be $12,222.49. See Order, No. 06-1236 (Dec. 17, 2008) (Doc. No. 54). Several days later, Richard J. Heleniak, the attorney who ultimately would represent Reynolds at trial, entered his appearance on behalf of Reynolds.
On November 7, 2008, Penn moved to compel the videotaped deposition of Harsh. See Def.'s Mot. to Compel (Doc. No. 49). I granted that motion. See Order (Nov. 20, 2008) (Doc. No. 51).
Less than two weeks before trial was scheduled to begin,
On September 18, 2009, Reynolds amended his trial exhibit list to include a DVD recording of the November 1, 2003 town hall meeting. See Supplement to Pretrial Mem. (Doc. No. 77). Penn, in response, moved to exclude any reference to the town hall meeting. See Def.'s Mot. in Limine (Sep. 23, 2009) (Doc. No. 81). It argued that the meeting and statements made therein were subsequent remedial measures and therefore inadmissible under Rule 407 of the Federal Rules of Evidence. See id. In an oral ruling on the day before trial began, I granted Penn's motion.
On September 28, 2009, the day trial was scheduled to begin, Reynolds filed a motion "to Preclude Evidence Related to Anurag Harsh." Def.'s Mot. in Limine (Doc. No. 84). The motion, however, was broader than its title indicates—Reynolds sought to exclude reference to: (1) lawsuits brought by Harsh; (2) Harsh's status as a plaintiff in a parallel proceeding against Penn; (3) Harsh's attorney-client relationship with Messa & Associates; and (4) forty-three of Penn's exhibits which, according to Reynolds, pertained exclusively to Harsh. See id. Included in those exhibits was the email exchange between Adler and Harsh that Penn contended
The case proceeded to trial. On the first day of trial, Reynolds agreed to dismiss the individual defendants in light of Penn's stipulation that those defendants were acting within the scope of their employment during the relevant time period.
After a five day trial, the jury found in favor of Penn on the UTPCPL claim but awarded Reynolds $435,678.00 on his breach of contract claim. See Verdict Sheet (Oct. 6, 2009) (Doc. No. 97). The jury did not render a verdict on the unjust enrichment claim. See id.
On October 21, 2009, Penn moved for judgement as a matter of law or, alternatively, for a new trial. Def.'s Mot. for Judgment as a Matter of Law (Doc. No. 101). It argued that my exclusion of evidence related to Harsh and the altered documents was erroneous. After hearing oral argument on the question, I denied Penn's motion for JMOL but granted the motion for a new trial. See Reynolds v. Univ. of Penn., 684 F.Supp.2d 621, 633 (E.D.Pa.2010) (Doc. Nos. 118 & 119).
In advance of the retrial, both parties filed motions in limine. Reynolds again moved to exclude reference to Harsh and
Retrial on the breach of contract and unjust enrichment claims began on June 15, 2010. At the beginning of the second day of trial, Reynolds moved for reconsideration of my exclusion of any reference to the town hall meeting. He argued for the first time that Rule 407 does not apply to breach of contract claims. Upon reconsideration, I affirmed my decision. At the conclusion of Reynolds's case, Penn moved for JMOL. I reserved judgment on the motion until after trial. Trial Tr. 91:14-17 (June 17, 2010). Penn renewed and supplemented its motion at the close of all evidence. Trial Tr. 104:2-105:7 (June 21, 2010). The jury found that Penn had not breached a contract with Reynolds but that Penn had been unjustly enriched. It accordingly awarded $66,000 to Reynolds.
The present cross-motions followed.
Rule 59 governs the court's ability to grant a new trial. The rule allows the court to grant a new trial after a jury trial "for any reason for which a new trial has heretofore been granted in an action at law in federal court ...." Fed.R.Civ.P. 59(a)(1)(A). The standard by which a motion for a new trial is judged depends on the grounds upon which the motion rests. Klein v. Hollins, 992 F.2d 1285, 1289-90 (3d Cir.1993).
Where a new trial is sought on the grounds that the jury's verdict was against the weight of the evidence, the court may grant the motion "only where the record shows that the jury's verdict resulted in a miscarriage of justice or where the verdict, on the record, cries out to be overturned or shocks our conscience." Williamson v. Consol. Rail Corp., 926 F.2d 1344, 1353 (3d Cir.1991). This high standard provides due respect for the jury's primary function as factfinder. Otos Tech., Co., Ltd. v. OGK America, Inc., No. 03-1979, 2007 WL 2374995, at *3 (D.N.J. Aug. 13, 2007) (citing Hurley v. Atlantic City Police Dep't., 933 F.Supp. 396, 403 (D.N.J.1996)).
Rule 50(b) of the Federal Rules of Civil Procedure governs the court's ability to grant JMOL after a jury trial. JMOL, a sparingly invoked remedy, is appropriate only where "a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). In determining whether such a legally sufficient evidentiary basis exists, the court must review all the evidence in the record and draw all reasonable inferences in favor of the non-moving party. Id. at 150, 120 S.Ct. 2097. The court may not, however, make credibility determinations or weigh the evidence—those functions are reserved for the jury. Id. In sum, a motion for JMOL "should be granted only if, viewing the evidence in the light most favorable to the nonmovant and giving it the advantage of every fair and reasonable inference, there is insufficient evidence from which a jury reasonably could find liability." Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d Cir.1993).
Reynolds moves for a new trial on two grounds. First, he argues that my exclusion of any reference to the EMTM website alterations and the town hall meeting was erroneous because Rule 407 does not apply to breach of contract claims. Second, he argues that even if the exclusion of that evidence was proper I improperly prohibited him from using statements made at the town hall meeting for impeachment purposes. I will discuss each argument in turn.
Rule 407 provides:
The primary purpose of Rule 407 is to encourage individuals "to take, or at least not to discourage individuals from taking, steps in furtherance of added safety." See Fed.R.Evid. 407, Advisory Comm.'s Note; see also Stecyk v. Bell Helicopter Textron,
Plaintiff asserts that the plain language of Rule 407 demonstrates that the Rule is inapplicable to contract disputes. Def.'s Br. at 6. He points specifically to the clause "evidence of the subsequent measures is not admissible to prove negligence or culpable conduct...." He implies, without saying so directly, that a breach of contract is not the type of culpable conduct to which the Rule is meant to apply.
I disagree. Had the drafters of the Rule intended it to apply only to tortious conduct, they could have used the words "tortious conduct" in place of "culpable conduct." By choosing the broader of the two phrases, the drafters clearly demonstrated their intent not to confine the application of the Rule to tort cases. Because a breach of contract is culpable conduct, see Pastor v. State Farm Mut. Auto. Ins. Co., 487 F.3d 1042, 1045 (7th Cir.2007) (Posner, J.), I find that the plain language of Rule 407 indicates that it applies to breach of contract cases.
Second, the purpose of Rule 407 applies with equal force to both tort cases and breach of contract cases. Judge Posner, writing for the Court of Appeals for the Seventh Circuit in Pastor, recognized as much. There, the plaintiff argued that under the terms of her insurance policy the defendant was obligated to pay her $10 for every day that her car was unusable but that she did not rent a car.
The present case is analogous. Penn revised its EMTM marketing materials in light of the apparent confusion of Reynolds and his classmates. It also held a town hall meeting to discuss the clarifications and address student concerns with respect thereto. As the Pastor Court recognized, such clarifications are inadmissible at trial under Rule 407. Id. To hold otherwise would discourage Penn, and organizations like it, from making clarifications necessary to avoid future confusion. Such an arrangement of incentives would directly contradict the policy underlying Rule 407.
Reynolds also argues that the cases upon which the Pastor Court relied all involved personal injury claims. See id. at 6-7. Review of that decision, however, reveals a discussion of cases applying Rule 407 to remedial measures that were not "repair[s] in the literal sense." See Pastor, 487 F.3d at 1045. For example, the court noted that Hickman v. GEM Ins. Co., 299 F.3d 1208, 1213-14 n. 9 (10th Cir.2002), applied Rule 407 to a dispute over the meaning of an insurance clause. See id. Moreover, the fact that the Pastor Court cited cases involving personal injury does not mean that Rule 407 applies only in such cases. It simply means that the Rule applies more frequently in personal injury cases. A review of the case law confirms this meaning. See, e.g., Lust v. Sealy, Inc., 383 F.3d 580, 585 (7th Cir. 2004) (noting "there is no basis in the language or rationale of the rule for confining it to nonintentional torts, though they are the usual occasion for its invocation.").
Finally, I find that Rule 407 applies to breach of contract claims because the application of the Rule cannot depend on whether a plaintiff chooses, potentially years later, to bring a lawsuit sounding in tort or one sounding in contract. In order for the Rule to accomplish its salutary purpose of incentivizing remedial action, its application at trial must be predictable. That is, a potential defendant must be confident that when he takes remedial action it will not later be admitted at trial as evidence of his liability.
Reynolds's suggested distinction would dramatically reduce the predictability of the Rule's application. Before taking remedial action, a potential defendant would need to assess the likelihood that a plaintiff will couch his claim in contract terms.
Rule 407 allows evidence of subsequent remedial measures to be offered in
Reynolds's argument pertains to an exchange on the third day of trial. Reynolds had called Ziv Katalan, co-director of the EMTM program, to testify as on cross. Trial Tr. 36:14-25, Katalan Test. (June 17, 2010). Reynolds contended throughout the case that he had been promised "official alumnus status" but that he had received only "honorary alumnus status." See Trial Tr. 55:21-25, Reynolds Test. (June 15, 2010). In inquiring into this discrepancy, Reynolds's counsel asked Katalan: "[d]id you have a description of alumni benefits for EMTM graduates on the website in 2004?" Trial Tr. 36:14-15, Katalan Test. (June 17, 2010). Penn's counsel immediately objected on the grounds that the question referenced website clarifications that I had excluded as subsequent remedial measures. Id. at 36:16. At sidebar, Reynolds's counsel stated: "I'm gonna ask him whether he—the program ever told him the EMTM people were not official alumnus [sic]." Id. at 37:15-17. I instructed him not to ask that question because to do so would violate Rule 407. Id. at 37:18-19. In response, Reynolds's counsel asserted that he was simply referring to the website for impeachment purposes: "[i]f he says no, he didn't [tell EMTM students that they were not official alumni], I should be able to use [the 2004 version of the website] to impeach him." Id. at 38:13-15.
I returned briefly to my chambers to consider whether Reynolds should be allowed to refer to the website. After reflection, I noted "I think Rule [407's] exception is designed to prevent, on [d]irect, a client getting on the stand and lying about whether it ever changed, and then not being able to use that to impeach that statement." Id. at 39:20-25. I went on to explain that I was concerned that Reynolds was attempting essentially to fabricate an impeachment opportunity by questioning Katalan about statements made solely on the website and at the meeting before Katalan had testified inconsistently. Id. at 39:24-40:1. Accordingly, I sustained Penn's objection and informed Reynolds's counsel that he would not be permitted to use the excluded evidence to impeach Katalan. Id. at 41:12-16.
Nevertheless, Reynolds's counsel asked Katalan "in representing to prospective EMTM students that they would have full advantages of being Penn Engineering and Wharton alumni, does that indicate that they would have official alumni status in each of those schools?" Id. at 41:23-42:1. Katalan answered "yes." Id. at 42:2. Reynolds's counsel then asked "[d]id that policy ever change?" Id. at 42:3. Penn's counsel immediately objected and I sustained the objection. Id. at 42:4-6. The following exchange then occurred between Reynolds's counsel and Katalan:
Id. at 42:8-13.
Reynolds now argues that he should have been permitted to impeach Katalan with the website and the statements he made at the town hall meeting. Specifically, he would have referred to a statement on the revised website that noted "the Wharton School has also invited graduates
First, the two questions he asked Katalan that yielded arguably impeachable answers were themselves improper. The only instances in the record of Penn informing EMTM students that they were not official alumni of the Wharton School occurred at the town hall meeting and on the 2004 EMTM website—both of which I had excluded as subsequent remedial measures.
Second, counsel for Reynolds attempted to circumvent my ruling by fabricating an impeachment. The impeachment exception to Rule 407 is designed "to prevent litigants from taking unfair advantage of the Rule by adopting a position at trial that is inconsistent with their previous decision to take remedial measures after the accident." Minter v. Prime Equip. Co., 451 F.3d 1196, 1212 (10th Cir.2006). Muzyka v. Remington Arms Co., Inc., 774 F.2d 1309, 1312 (5th Cir.1985) (cited by Petree v. Victor Fluid Power, Inc., 887 F.2d 34, 38 (3d Cir.1989)), illustrates this principle. There, the question presented to the jury was whether "[the rifle at issue] was unreasonably dangerous because the bolt-action design required that the rifle be placed in the "fire" position, i.e., the safety-off position, before it could be unloaded." Id. at 1310. A defense expert took the stand on direct and testified that "the two-position, bolt-lock safety was the best safety available—indeed, that it was the best and the safest rifle on the market." Id. Under the circumstances, the Court of Appeals for the Fifth Circuit held that the district court erred in excluding evidence of a subsequent design change offered for impeachment purposes. See id. at 1314. By testifying that the rifle was the safest on the market, the defense expert opened the door to questioning on why the defendant would change such a "superlative" design. See id.; see also Wood v. Morbark Indus., Inc., 70 F.3d 1201, 1208 (11th Cir.1995) (where the designer of a wood chipper testified that its seventeen inch shoot was the "safest length chute you could possibly put on the machine[,]" such testimony opened the door to cross examination by reference to subsequent modifications to the chute).
The present case is different in one important respect—Katalan did not open the door to the introduction of the subsequent remedial measures. Unlike the defense expert in Muzyka, whose testimony that the rifle was the safest on the market was inconsistent with the decision to change the safety mechanism, Katalan did not, without prompting, adopt a position inconsistent with the decision to take remedial action. Instead, plaintiff's counsel attempted to open the door by asking whether the EMTM students were informed that they would be honorary alumni of the Wharton School—a question that Katalan could not answer without referring to the
Finally, the probative value of the impeachment evidence was substantially outweighed by its prejudicial effect. It was therefore excludable under Federal Rule of Evidence 403. See Stecyk, 295 F.3d at 416 ("Under Rule 407, together with the Rule 403, unfair prejudice/probative value weighing, the trial court retains broad power to insure that remedial measures evidence is not improperly admitted under the guise of the impeachment exception."). The probative value of the impeachment evidence was that it served to discredit Katalan and thereby reduce the effectiveness of his testimony.
The prejudicial effect of introducing the impeachment evidence, however, was significant. It would be extremely difficult for the jury to hear the statements made at the town hall meeting and see the 2004 website clarifications without inferring that those measures were admissions of liability. This, of course, is exactly the inference that Rule 407 is designed to prevent. See Kelly v. Crown Equip. Co., 970 F.2d 1273, 1276 (3d Cir.1992) ("Rule 407 rejects the suggested inference that fault is admitted when remedial measures are taken subsequent to an injury."). Accordingly, even if Reynolds's line of questioning were otherwise proper, I would exercise my discretion under Rule 403 to preclude the impeachment evidence. See Petree, 887 F.2d at 39 (quoting 2 Weinstein & Berger, Weinstein's Evidence ¶ 407[05], at 407-33 (1988)) ("Care should be taken that needless inquiry and concern over credibility does not result in unnecessarily undercutting the policy objective of the basic exclusionary rule.").
For these reasons, my decision not to allow Reynolds to attempt to impeach Katalan by reference to the excluded evidence was not erroneous.
In sum, I find that Rule 407 applies to breach of contract claims. I further find that Reynolds's proposed impeachment of
Penn moves for judgment as a matter of law pursuant to Rule 50(b). It offers two arguments in support of its motion. First, because a contract governed the relationship between Penn and Reynolds, the doctrine of unjust enrichment is inapplicable. Second, Reynolds's complaint constituted a fraud on the court and therefore his complaint must be dismissed. Reynolds, of course, disagrees with both arguments.
As an initial matter, I must ensure that Penn has satisfied the procedural dictates of Rule 50.
At the conclusion of Reynolds's case, Penn moved for JMOL pursuant to Rule 50(a) on three grounds:
Under normal circumstances, then, Penn would be precluded from asserting that an express contract governed the relationship
In Williams, the plaintiff sued the United States Postmaster General for various Title VII violations. Id. at 569-70. Prior to trial, the Postmaster moved for dismissal on the grounds that the plaintiff had not exhausted her administrative remedies. Id. at 570. The district court denied the motion and scheduled the case for trial. Id. At the conclusion of the plaintiff's case, the Postmaster moved for JMOL under Rule 50(a), stating "there is no legally sufficient evidentiary basis for a reasonable jury to find for the Plaintiff on any of the issues that counsel have set forth in this case." Id. at 571. The jury found in favor of the plaintiff on one count and against her on the others. Id. The Postmaster then filed a Rule 50(b) motion which included, inter alia, the argument that the plaintiff had not exhausted her administrative remedies. Id. The plaintiff did not argue that the exhaustion argument had not been raised in the Rule 50(a) motion, instead choosing to address the merits of the argument. Id. The district court granted the Rule 50(b) motion on the ground that the plaintiff had not properly exhausted her administrative remedies. Id.
On appeal, the Court of Appeals noted that "[i]t is clear that the Postmaster did not raise the exhaustion issue in his motion for a directed verdict." Id. at 572. However, it held that the plaintiff's failure to raise that argument in the district court resulted in waiver of the argument. Id. "The need to preserve the issue through a proper objection in the context of Rule 50 is to ensure that both parties are aware of and can raise dispositive issues earlier in the proceeding rather than later, so that the district court can resolve the issues correctly and without delay. This is just as true when a plaintiff opposes a Rule 50(b) motion as when a defendant moves for a directed verdict under Rule 50(a)." Id.
This case is analogous. Although Penn did not raise in its Rule 50(a) motion the argument that the express contract between the parties precluded an unjust enrichment claim, Reynolds did not, in response to Penn's Rule 50(b) motion, object to that failure. Instead, Reynolds merely acknowledged that "[Penn] has now filed a somewhat different [m]otion" and then proceeded to address Penn's argument on its merits.
Having found that Penn is entitled
No reasonable juror could conclude that the first and third elements were not satisfied in this case. "In assessing intent, the object of inquiry is not the inner, subjective intent of the parties, but rather the intent a reasonable person would apprehend in considering the parties' behavior." Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 582 (3d Cir.2009). The intent of the parties in this case to be bound by the contract could hardly have been clearer. Reynolds submitted an application, paid his tuition and attended EMTM classes for nearly three years. Penn invited Reynolds into the EMTM program, accepted his tuition payments and provided him with three years worth of education.
Questions arise, however, with respect to the second element. "Whether the terms of a contract are sufficiently definite is a question of law [appropriate for disposition by the court]." Am. Eagle Outfitters, 584 F.3d at 585. The Court of Appeals has distinguished the question at issue here—whether the contractual terms are sufficiently definite so as to be enforceable—from the related yet distinct question of whether the contractual terms are unambiguous. See id. at 586-87 (reviewing a contract and noting that the terms were sufficiently definite to render the contract enforceable but that the terms were ambiguous and therefore not susceptible of judicial interpretation); see also Ambrose v. Krause Publ'n., Inc., 354 Fed. Appx. 711, 714 (3d Cir.2009) (same); Boyd v. Cambridge Speakers Series, Inc., No. 09-4921, 2010 WL 2545541, at *5 n. 11 (E.D.Pa. June 18, 2010) ("a court may find that the parties intended to be bound and that the terms of the agreement are sufficiently definite so that an enforceable contract was formed as a matter of law, but that the language chosen by the parties is ambiguous, necessitating interpretation of the contract terms by a jury.") (internal quotation marks omitted). Where contractual terms are indefinite, the contract is unenforceable. See Am. Eagle Outfitters, 584 F.3d at 587. Where contractual terms are ambiguous, the contract is enforceable but must be submitted to a jury for resolution of the ambiguity. Id. In any event, "courts generally disfavor the destruction of contracts because of uncertain terms." Consol. Rail Corp. v. Canada Malting Co., Ltd., No. 98-5984, 2000 WL 151160, at *9 (E.D.Pa. Feb. 10, 2000).
Lombardo v. Gasparini Excavating Co., 385 Pa. 388, 123 A.2d 663, 666 (1956), involved the relatively rare circumstances in which a court found contractual terms too indefinite to be enforced. There, the plaintiff attempted to convince the defendant to strip mine the coal from the plaintiff's land. Id. at 664. The defendant met with the plaintiff and promised to send a dragline
My review of the case law reveals that courts more frequently find contractual language to be ambiguous than indefinite. American Eagle Outfitters illustrates the distinction between an indefinite contract and an ambiguous contract. See id. There, the plaintiff was an American clothing retailer and the defendant was a British clothing retailer. Both companies used eagles as their trademarks. In order to prevent infringement, the parties entered into a written contract governing the use of their trademarks. Prior to trial, the defendant argued that the contract was unenforceable on the grounds that two of the ten contractual provisions were indefinite. Id. at 588. The arguably indefinite provisions stated:
Id. at 579.
The Court of Appeals held first that the terms of the contract were not indefinite because "the parties covered all the necessary bases—there are no undetermined matters—and the agreement is not impossible to understand." Id. at 585. It noted that courts ordinarily find a contract to be indefinite only where "the parties never reach[ ] any kind of accord over the necessary components of their deal." Id. (citing Mazzella v. Koken, 559 Pa. 216, 739 A.2d 531, 537 (1999); Lombardo v. Gasparini Excavating Co., 385 Pa. 388, 123 A.2d 663, 666 (1956)). "The parties addressed all the essential issues that necessitated their meeting in London: the use of the eagle logo, [the plaintiff's] right to sell its products online and overseas, the payment of taxes and attorneys' fees, [the plaintiff's] withdrawal from the golf market, and the scope and nature of each parties' registration." Id. at 586. Because the contract addressed all the material terms, it was not too indefinite to be enforced. Id.
Nevertheless, the Court found the two contractual provisions set forth above to be ambiguous. See id. at 586-87. "[A] contract is ambiguous, and thus presents a question of interpretation for a jury, if the contract is reasonably susceptible of different constructions and capable of being understood in more than one sense." Id. at 587 (internal quotation marks omitted). The Court noted that the agreement "[was] not a prime example of clear drafting" as it was "marked by incomplete sentences and haphazard punctuation." Id. at 585. It concluded that there was more than one reasonable interpretation of the agreement and therefore remanded the case in order to have a jury resolve the ambiguity. Id. Notably, the ambiguity did not render the contract unenforceable. Id. at 586 ("Disputes over the meaning of a given phrase are common in contract disputes; the presence of such interpretative ambiguity, however, does not go to whether the contract is enforceable, but rather who (the judge or the jury) must decide what the given clause means.").
The present case is analogous. The parties did not disagree over the essential terms of the contract; rather, they disagreed over the definition of several of
Like in American Eagle Outfitters, the parties' disagreement arises out of two related areas of ambiguity—not indefiniteness—in the contract. The first involves the relationship between the Wharton School and the School of Engineering. The parties agree that the program is cosponsored by the two schools but disagree on the definition of "cosponsor." Reynolds contends that cosponsorship implies that EMTM graduates would receive a "joint degree." In academic parlance, a
The second area of ambiguity is related to the first. The parties disagree over the definitions of "alumnus," "student" and "graduate." Adler concedes that he told prospective students, including Reynolds, that they could "represent themselves as alumni and as students" of the Wharton School, the School of Engineering or the University of Pennsylvania. Id. at 84:19-24. Reynolds argues that this statement constitutes a promise that he could represent himself as a "graduate" of the Wharton School and that he would receive a degree from the Wharton School. Trial Tr. 221:8-11, Reynolds Test. (June 15, 2010) ("Q. And you think that means that the School of Engineering grants a Wharton degree? A. [Reynolds]: When I combine that with all the information that Joel gave me, absolutely."). The terms "alumnus," "student" and "graduate" are susceptible of more than one definition. The jury heard extensive testimony about the possible meanings of each. They are thus ambiguous. They are not, however, ambiguous enough to render the contract indefinite. A jury is perfectly capable of resolving this "garden-variety" ambiguity. See Am. Eagle Outfitters, 584 F.3d at 585; Johnston the Florist, Inc. v. TEDCO Const. Corp., 441 Pa.Super. 281, 657 A.2d 511, 516 (1995) ("Furthermore, in the case of a disputed oral contract, what was said and done by the parties, as well as what was intended by what was said and done by the parties, are questions of fact to be resolved by the trier of fact[.]").
Despite the ambiguity in the contract, I conclude that there was an express contract between Penn and Reynolds and that such contract was definite enough to be enforceable. Accordingly, I must grant JMOL in Penn's favor on Reynolds's unjust enrichment claim. See Skepton, 895 A.2d at 1254 ("the doctrine of unjust enrichment is inapplicable when the relationship between parties is founded upon a written agreement or express contract.").
For the reasons discussed supra, I will deny Reynolds's motion for a new trial. I will also grant Penn's motion for JMOL with respect to Reynolds's claim for unjust enrichment.
An appropriate Order follows.
AND NOW, this 25th day of October, 2010, after consideration of Frank Reynolds's motion for a new trial and The University of Pennsylvania's response thereto, it is ORDERED that Reynolds's motion is DENIED.
After consideration of Penn's motion for judgement as a matter of law, Reynolds's response and Penn's reply, it is ORDERED that Penn's motion is GRANTED. It is FURTHER ORDERED that the judgement entered June 22, 2010 is VACATED and JUDGEMENT IS ENTERED in favor of The University of Pennsylvania and against Frank Reynolds.
It is FURTHER ORDERED that Reynolds's motion to amend the judgment to add prejudgment interest is DENIED as moot.
The motion Reynolds filed on September 28, 2009 raised exactly the same issue that I had disposed of in my September 15, 2008 Order. Startlingly, the parties took positions on the second motion directly opposite to their positions on the earlier motion. Reynolds argued that the allegedly altered evidence should be excluded at trial and Penn argued that the evidence should be admitted. The change in positions alone was not problematic—the parties conceivably could have changed their stances for any number of good reasons. It was regrettable, however, that both attorneys failed in their obligation as officers of the Court to inform me that I had already ruled on that issue. Consequently, one year and more than forty docket entries later, I ruled inconsistently.
I instructed the jury accordingly:
Trial Tr. 27:11-20, Jury Charge (June 22, 2010). Shortly thereafter, I summarized my instruction: "[b]ut I'm asking you on the verdict sheet which I'll explain to you, nonetheless to decide both claims, with the understanding that if you should decide both claims in favor of [Reynolds] he will only recover on one." Id. at 27:25-28:4.