04-1450 / 04-1609 Pro Spice, Inc. v. Om Ni Trade Group, Inc.

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 03-4556 / 04-1450 / 04-1609
PRO SPICE, INC.,
Appellants (03-4556 and 04-1450)
v.
OM NI TRADE GROUP, INC.;
SHANK’S EXTRACTS, INC.;
YORK IMPORT & EXPORT, INC.;
ANDYAN RAHARDJA,
Appellants (04-1609)
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 01-cv-01661)
District Judge: Honorable Ronald L. Buckwalter
Argued December 6, 2004
Before: AMBRO, and VAN ANTWERPEN, Circuit Judges
SHADUR*, District Judge
(Opinion filed: January 4, 2005)
*Honorable Milton I. Shadur, United States District Judge for the Northern District
of Illinois, sitting by designation.

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Jonathan L. Swichar, Esquire
Duane M orris
1650 Market Street
One Liberty Place, 37th Floor
Philadelphia, PA 19103-7396
Steven M. Richman, Esquire (Argued)
Duane M orris
100 College Road West, Suite 100
Princeton, NJ 08540
Attorneys for Appellant/
Cross Appellee
Eric A. Savage, Esquire (Argued)
Gary S. Prish, Esquire
Littler Mendelson
One Gateway Center
Third Floor
Newark, NJ 07102
Attorneys for Appellee/
Cross Appellant
OPINION
AM BRO, Circuit Judge
Because we write solely for the benefit of the parties, we do not recount the
voluminous facts giving rise to this appeal. We note merely that the underlying dispute
involves an alleged agreement for the sale of vanilla beans to Pro Spice, Inc. (“Pro
Spice”) by Omni Trade Group, Inc. (“Omni”). On appeal, Pro Spice argues that the
District Court erred i) by concluding that no enforceable contract existed and ii) by

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entering judgment against Pro Spice on its related fraud claim. A third issue lies in both
parties’ challenge of the District Court’s award of discovery sanctions against Omni. For
the reasons set forth below, we reject the parties’ arguments and affirm all appealed
orders of the District Court.
The District Court exercised jurisdiction pursuant to 28 U.S.C. § 1332. We review
its final orders pursuant to 28 U.S.C. § 1291.
I. Breach of Contract Claim.
The District Court rejected the breach of contract claim of Pro Spice because it
failed to demonstrate that an enforceable contract existed. We assess this conclusion
under a mixed standard of review.
The district court’s factual findings, especially with respect to the parties’
intentions, will not be reversed unless the record demonstrates that they
are clearly erroneous. Similarly, the interpretation of contractual language
to discern contractual intent is a factual question, which we will
accordingly review under a clearly erroneous standard. Conclusions
drawn with respect to the legal effect of any agreement, however, are
questions of law and therefore subject to plenary review.
ATACS Corp. v. Trans World Communications, Inc., 155 F.3d 659, 665 (3d Cir. 1998)
(citations omitted). The relevant portions of the District Court’s opinion assess the
parties’ contractual intent, including an interpretation of the documentary evidence in
order to discern that intent and an evaluation of witness testimony. For this reason, the
pertinent aspects of the District Court’s opinion are entitled to the deference accorded a
fact finder, reversible only if clearly erroneous.

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Under this deferential standard, we find no reason to disturb the District Court’s
conclusion that the critical December 3, 1999 letter from Omni was not an offer, but
merely “a quotation of prices for beans based upon availability.” Pro Spice, Inc. v. Omni
Trade Group, Inc., 2003 WL 22477862, *4 (E.D. Pa. Oct 31, 2003). The District Court
properly based this conclusion on its assessment of the parties’ intent after a detailed
review of the evidence and testimony presented. Though it vigorously disputes the
conclusion reached, Pro Spice fails to offer a compelling argument that the conclusion
was clearly erroneous, and we discern no such error upon our own review.
Even assuming that the December 3 letter was an offer susceptible to a binding
acceptance, Omni’s subsequent December 6, 1999 letter revoked that offer by replacing it
with a new offer. At oral argument, counsel for Pro Spice argued that Omni’s December
6 letter had no legal effect on its December 3 “offer” because it did not alter any of the
material terms of the proposed bargain. This argument underwhelms, as the December 6
letter presented new terms of delivery and, most notably, a higher price for the vanilla
beans listed. Thus, even if Omni’s December 3 letter was an offer, it was revoked before
it was accepted, and no contract existed between the parties.
Lastly, we note that Pro Spice’s reliance on 13 Pa. C.S.A. § 2201(b) is both
misplaced and misleading. Part of Pennsylvania’s codification of the Uniform
Commercial Code, that provision provides an exception to the statute of frauds’ writing
requirement for agreements between merchants when the merchant alleging breach has

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1 To construe the statute as Pro Spice proposes produces absurd results. If the statute
provided a basis for the formation of a contract, a merchant could, for example, simply
send written “confirmations” of highly advantageous agreements to other merchants and
sue those failing to object timely to the “confirmations” for enforcement of the contracts
“deemed to exist” under the statute.
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provided a written confirmation of a prior agreement to its counterpart, and the other
merchant in turn fails to object to the written confirmation in a timely fashion. This
exception to the statute of frauds does not halt the complaining party’s duty to show that
an agreement was formed—that is, that there was a “meeting of the minds.” It simply
enables the party alleging breach of an existing contract to overcome the statute of frauds’
writing requirement. Pro Spice’s contention that under this provision “a contract will be
deemed to exist unless the merchant provides a written objection,” Appellant Br. at 28
(emphasis added), presupposes a conclusion (a contract) that is instead a precondition to
applying § 2201(b).1 Accord U.C.C. § 2-201 cmt. 3 (1995) (explaining that “[t]he only
effect [of § 2-202] . . . is to take away from the party who fails to answer [the
confirmation] the defense of the Statute of Frauds; the burden of persuading . . . that a
contract was in fact made orally prior to the written confirmation is unaffected”)
(emphasis added).
Because no contract existed, Pro Spice’s breach claim must fail.
II. Fraud Claim.
Accepting the District Court’s factual findings dooms Pro Spice’s fraud claim as
well. Most significantly, the District Court concluded that Pro Spice, through its agent

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Pallone, “knew well that there was not mutual meeting of the minds.” Pro Spice, 2003
WL at *5. Because Pro Spice knew there was no contract, by definition it cannot
establish that it was fraudulently induced to agree. Moreover, the District Court found
that Omni’s representations about beans for sale were all “based on availability,”
undermining Pro Spice’s contention that actionable misrepresentations were made. Id.
Lastly, the District Court’s finding that Omni lacked intent to extend an offer undermines
Pro Spice’s argument that Omni acted in bad faith or with an intent to defraud. As we
know of no reason to disturb those findings, they stand, leaving Pro Spice’s claim of
fraud bereft of support.
III. Propriety of Sanctions.
Both parties argue that the District Court abused its discretion in imposing $1,500
in sanctions against Omni for its discovery abuses. Pro Spice argues that the District
Court should have imposed a greater sanction award, while Omni argues that no award of
sanctions was legally authorized. We quickly dispense with these cross-claims.
Both parties argue, inter alia, that the District Court awarded sanctions under
Federal Rule of Civil Procedure 37(b)(2), which provides that “[i]f a party . . . fails to
obey an order to provide or permit discovery, . . . the court in which the action is pending
may make such orders in regard to the failure as are just.” The Rule further provides that
“the court shall require the party failing to obey the order or the attorney advising that
party or both to pay the reasonable expenses, including attorney’s fees, caused by the

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failure, unless the court finds that . . . award of expenses unjust.” Id. (emphasis added).
After describing a “history of [Omni's] not responding timely [to discovery
requests] requiring court intervention,” the District Court concluded that this lack of
diligence was “precisely what happened again in the motion [for sanctions] before the
court.” Pro Spice, Inc. v. Omni Trade Group, Inc., 2003 WL 23018786, *2 (E.D. Pa.,
Dec 16, 2003). After subsequently reviewing evidence submitted by the parties, the
District Court concluded that $1,500 represented the reasonable expenses caused by
Omni’s (in)action. Pro Spice, Inc. v. Omni Trade Group, Inc., 2004 WL 286869, *1
(E.D. Pa., Feb 11, 2004). It appears that the Court determined that Omni’s discovery
abuses ran afoul of Rule 37(b)(2), a sanction was required, but the minimum was
assessed. This falls well within the expansive discretion accorded the Court by Rule 37.
IV. Conclusion.
For the reasons described above, we reject all of the arguments presented in Pro
Spice’s appeal and Omni’s cross-appeal and affirm the judgments of the District Court.

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