American Eagle Outfitters v. Lyle & Scott Ltd.

*589JORDAN, Judge,

concurring in part and dissenting in part.

I agree with Judge Fuentes that the London Memorandum is ambiguous as to the registration rights that the parties were prepared to grant each other.11 But I also believe that American Eagle has failed to establish that it is entitled to summary judgment on whether the parties manifested an intent to be bound by the jottings in that very brief document. I believe there remains a material question of fact as to the parties’ intent, and, accordingly, would let a jury determine whether there was a contract at all.

Under Pennsylvania law, which the parties have treated as controlling, “the test for enforceability of an agreement is whether both parties have manifested an intention to be bound by its terms and whether the terms are sufficiently definite to be specifically enforced.” Channel Home Ctrs., Div. of Grace Retail Corp. v. Grossman, 795 F.2d 291, 298-99 (3d Cir.1986) (citing Lombardo v. Gasparini Excavating Co., 385 Pa. 388, 123 A.2d 663, 666 (1956)). We have sanctioned a factfinder’s use of a number of criteria in order to evaluate whether the parties manifested an intent to be bound, including,

whether the contract is of that class which are usually found to be in writing, whether it is of such nature as to need a formal writing for its full expression, whether it has few or many details, whether the amount involved is large or small, whether it is a common or unusual contract, [and] whether the negotiations themselves indicate that a written draft is contemplated as the final conclusion of the negotiations.

In re ABC-Federal Oil & Burner Co., 290 F.2d 886, 889 (3d Cir.1961) (quoting Mississippi & Dominion Steamship Co. v. Swift, 86 Me. 248, 29 A. 1063, 1067 (1894)); see Price v. Confair, 366 Pa. 538, 79 A.2d 224, 226 (1951) (determining intent with reference to things such as “the surrounding circumstances, the situation of the parties, the objects they apparently have in view, and the nature of the subject-matter of the agreement.”); see also Consarc Corp. v. Marine Midland Bank, N.A., 996 F.2d 568, 575-76 (2d Cir.1993) (suggesting the following factors: (1) number of terms agreed upon compared to total number to be included in a formal document; (2) relationship of the parties; (3) degree of formality attending similar contracts; (4) acts of partial performance by one party accepted by the other; (5) usage and custom of the industry; (6) subsequent conduct and interpretation by the parties themselves; (7) whether writing is contemplated merely as “memorial;” (8) whether contract needs a formal writing for its full expression; (9) whether any terms remain to be negotiated; (10) whether the sup*590posed contract has few or many details; (11) whether amount involved is large or small; (12) whether a standard form is widely used in similar transactions or whether this is an unusual type of contract; (13) the speed with which the transaction must be concluded; (14) the simplicity or complexity of the transaction; (15) the availability of information necessary to decide whether to enter into a contract; and (16) the time the supposed contract was entered). With the variety of issues and evidence available for review in evaluating whether there has been a manifestation of intent to form a contract, it is no surprise that, as the Magistrate Judge’s opinion notes, such an issue is “rarely appropriate for disposition by the Court.” American Eagle Outfitters, Inc. v. Lyle & Scott Ltd., No. 2:06-cv-00607, 644 F.Supp.2d 624, 629, 2008 WL 5101354, at *1 (W.D.Pa. Nov.26, 2008); see id. at 635-36, at *7 (reciting the 16 factors listed in Consarc).

A reasonable jury in this case could conclude that the requisite manifestation was absent, based on a number of elements in the record.

First, both Hall and Fiore testified that they believed the term “without prejudice” — the term that indisputably applied to the parties’ London meeting — meant “non-binding.” (App. 951:20-952:12 (Fiore Depo); App. 340 at 126:18-127:2 (Hall Depo).) The legal significance of “without prejudice” may be relevant (see Maj. Op. at n. 7), but it is hardly dispositive in light of the testimony from both parties’ non-lawyer representatives indicating their particular understanding of the term. A jury could reasonably conclude that the “without prejudice” label they hung on the meeting, if not on the document, manifested an intent not to be bound by anything that occurred during the meeting.

Second, the London Memorandum is unsigned. Of course, Pennsylvania law does not require a signature in order for an agreement of the kind at issue here to be binding. Commerce Bank/Pennsylvania v. First Union Nat’l Bank, 911 A.2d 133, 145-46 (Pa.Super.Ct.2006).12 Importantly, however, American Eagle’s in-house counsel, Strohm, specifically told Hall, who is not an attorney, to refrain from signing the list of bullet points at the conclusion of them meeting. From the deposition transcripts alone, it is hard to tell how emphatically Strohm delivered that instruction to Hall, but a jury could reasonably conclude that she effectively conveyed to Hall an intent not to be bound by the hand-written notes that emerged from the meeting. That conclusion is especially reasonable in light of the Delaware choice-of-law provision that Strohm included in the draft formal document that she later circulated, which indicates that she believed the London Memorandum would not be binding without a signature. See Del.Code Ann. tit. 6, § 2714(a) (prohibiting enforcement of an obligation lasting more than a year, unless the contract giving rise to the obligation is reduced to a signed writing); Shovel Transfer & Storage, Inc. v. Pennsylvania Liquor Control Bd., 559 Pa. 56, 739 A.2d 133, 136 (1999) (“As a general rule, signatures are not required unless such signing is expressly required by law or by the intent of the parties.”).13

*591Third, American Eagle appeared to act inconsistently with the London Memorandum. The sixth bullet point by which the parties allegedly agreed to be bound states, “Each party shall consent to the registration of the other’s eagle and AE shall withdraw its opposition against LS application in the US.” (App. at 645.) Whatever that means, it certainly does not mean that American Eagle was free to file an opposition to Lyle & Scott’s trademark application in the United States. Yet it did just that, approximately one month after the parties supposedly reached their binding agreement. See Retail Royalty Co. v. Lyle & Scott Ltd., Opposition No. 91169126 (T.T.A.B. filed Feb. 8, 2006). A jury could reasonably infer from American Eagle’s filing that the parties had not sufficiently conveyed to each other an intent that the London Memorandum bind them.

Fourth, the striking brevity and lack of formality in the alleged agreement is at odds with the extent of the commitments that the parties were negotiating to undertake. The Magistrate Judge observed that “the London Memorandum certainly lacks the formality one normally associates with a contract for so significant a venture,” and yet the Judge concluded that the lack of formality was insignificant. American Eagle Outfitters, Inc., 644 F.Supp.2d at 639, 2008 WL 5101354, at *10. That conclusion is open to reasonable debate and therefore cannot support summary judgment. Although the Magistrate Judge did not cite authority for her conclusion, the language she used tracks that previously used by the Pennsylvania Supreme Court in Goldman v. McShain, 432 Pa. 61, 247 A.2d 455, 458 (1968) (“While this document certainly lacks the formality one normally associates with a contract for so significant a venture, it seems fairly certain that the instrument shows that the parties agreed to construct the the-ater_”). Goldman, however, suggests that a jury should consider the distinct disparity between the rough-notes nature of the London Memorandum and the highly significant legal venture the parties contemplated. It is noteworthy that the court in Goldman did not say that the existence of a contract had been established in that case as a matter of law; it held just the opposite, saying, “it is not at all clear from the pleadings in the present case that Goldman and McShain did not consummate a binding agreement. Only a trial can uncover this crucial fact.” Id. at 459 (emphasis added). Similarly, the Magistrate Judge should have recognized, as should we, that the question of whether the parties before us stumbled into a perpetual and worldwide trademark coexistence agreement is one for the jury.

Fifth, and finally, the parties were unable to reach a more formal agreement. To be sure, “parties may bind themselves contractually although they intend, at some later date, to draft a more formal document.” Goldman, 247 A.2d at 459; see Melo-Sonics Corp. v. Cropp, 342 F.2d 856, 859-60 (3d Cir.1965) (“[I]t is well-settled in Pennsylvania that where the parties have settled upon the essential terms and the only remaining act to be done is the formalization of the agreement, the latter is not inconsistent with the present contract....”). But these rules do not prevent Lyle & Scott from relying on the parties’ failure to draft a formal document as evidence that a question of intent re*592mains for-trial. In fact, both the Goldman court, as noted above, and the Melo-Son-ics court remanded for trial the question of whether an agreement existed. Goldman, 247 A.2d at 459; Melo-Sonics, 342 F.2d at 860 (“Whether this plaintiff can establish the facts which he has alleged in his complaint and bring himself within the rule above discussed is a matter which only a trial can settle .... ”); see also Building Mart, Inc. v. Allison Steel Mfg. Co., 380 F.2d 196, 199 (10th Cir.1967) (“The question whether the parties intended any prior agreement to be binding notwithstanding a contemplated later written memorialization ... was a question of fact inappropriate for summary resolution”). Thus, certain differences and later disagreements about what terms should be in the formal document may support an inference, left for the factfinder to accept or reject, that the parties did not intend the London Memorandum to control.

One type of evidence that ought not play a role in evaluating the parties’ manifestation of intent is evidence of things never expressed by one side to the other. Contracting parties must outwardly and objectively demonstrate their intent to be bound; subjective beliefs and reservations are irrelevant. See Long v. Brown, 399 Pa.Super. 312, 582 A.2d 359, 363 (1990) (“[Ojbjective manifestation is the governing factor, regardless of subjective beliefs and reservations.”). The majority’s acknowledgment that subjective intent is irrelevant is at odds with its statement that Hall’s notes of his conversations with his employer are “particularly instructive” and that they support a conclusion that he “consistently” referred to the settlement as an agreement. (See Maj. Op. at II.B. l.a.) Lyle & Scott’s internal discussions are only relevant if we infer that Hall somehow conveyed the substance of those discussions to American Eagle. But that inference is inappropriate for us to make at the summary judgment stage. See Siegel Transfer, Inc. v. Carrier Exp., Inc., 54 F.3d 1125, 1127 (3d Cir.1995) (“In considering a motion for summary judgment, a court ... must view facts and inferences in the light most favorable to the party opposing the motion.”). Indeed, we are bound to make inferences in favor of the non-movant, and in this instance one could surely infer that Lyle & Scott’s internal thoughts were not conveyed to American Eagle since one is generally less open with adversaries than with one’s own side.

My colleagues express a concern that Lyle & Scott is now backpedaling from a proposal that its agent appeared all too eager to accept when he was at the bargaining table. (Maj. Op. at n. 9.) I share that concern. The law of Pennsylvania, however, states that both parties must manifest an intent to be bound, and, until that happens, each side is free to have second thoughts. Where, as here, competing inferences are possible, the law does not allow us to take away from a jury the question of whether such an intent was conveyed.

I am not suggesting that the evidence presented clearly shows that Lyle & Scott is entitled to disregard the London Memorandum. A jury might conclude from certain parts of the record in this case that the parties actually did manifest an intent to be bound. The very existence of the document at issue, especially the preliminary statement in the document that the “[pjarties agree as follows” (App. at 645), is strong evidence of a manifestation of intent. See In re ABC-Federal Oil & Burner Co., 290 F.2d at 889 (“If a written draft is proposed, suggested, or referred to during the negotiations, it is some evidence that the parties intended it to be the final closing of the contract.”) (quotation omitted). And some of the emails between the parties subsequent to their meeting *593provide support for American Eagle, particularly the one from Hall stating that the parties “came to an agreement.” (App. at 644.)

Nevertheless, it is fundamental under Federal Rule of Civil Procedure 56 that we must acknowledge evidence that supports a different conclusion than the one proposed by the party moving for summary judgment, even if that evidence does not directly speak to parts of the record that, standing alone, support the movant’s case. Big Apple BMW, Inc. v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d Cir.1992). In other words, Lyle & Scott does not need to match, item for item, each piece of evidence proffered by American Eagle in order to raise a genuine issue of material fact. Because of the bad taste left by Lyle & Scott’s negotiating tactics, we have, I fear, ventured into weighing evidence and usurped the role of the fact-finder.

For the foregoing reasons, I concur that remand is appropriate so that a jury may attempt to determine what the parties intended to say in the London Memorandum. I respectfully dissent, however, to the extent that our decision prevents the jury from considering whether an enforceable contract exists at all.

. While I agree there is ambiguity, I do not join all of Judge Fuentes’s opinion on this point. To the extent his conclusions about the ambiguities are couched in language assuming a contract existed, I part company with him, for the reasons stated herein, though I do agree that, were there a contract, the language is not so ambiguous as to be beyond enforcement. I also disagree with Judge Nygaard, who concludes in a partial dissent that the language of the fourth and sixth clauses of the London Memorandum is "crystal clear.” Nowhere in that document is it stated that the parties agreed to give each other perpetual and worldwide registration rights. To the contrary, while the parties might have intended something to be "perpetual and worldwide pertaining to goods of LS registrations” (App.645), the London Memorandum itself gives little clue as to what that something is. Although that language might relate to registration rights, it is also quite plausible that it only provides American Eagle with a perpetual and worldwide license to sell goods of LS registrations. That interpretation is bolstered by the parties' decision to deal specifically with registration in a separate clause.

. In Commerce Bank, the trial court had decided that an unsigned settlement agreement was enforceable, but only after it had held an evidentiary hearing. 911 A.2d at 146-47. The Superior Court affirmed the trial court’s ruling. Id.

. Fiore’s self-serving testimony that, at the end of the meeting, he "probably said something to the effect that we have a deal” (App. 969:22-23) is hardly conclusive evidence that American Eagle manifested an intent to be bound. Hall, whose deposition was taken *591earlier, never had a chance to address Fiore's description of events. Similarly, Strohm's later email to Hall stating that "[d]uring our meeting in London, we reached an agreement ('London Agreement’) on the various points at issue” (App. 1194) was the last communication between the parties before this suit was filed and can reasonably be seen as mere pre-litigation posturing.