EBC v. CLARK BUILDING SYSTEMS

e us, however, does not present such a situation. . . . Plaintiffs affidavit, submitted only after she faced almost certain defeat in summary judgment, flatly contradicted no less than eight of her prior sworn statements[.] . . . [T]he objectives of summary judgment would be seriously impaired if the district court were not free to disregard the conflicting affidavit. . . . When, as in the present case, the affiant was carefully questioned on the issue, had access to the relevant information at that time, and provided no satisfactory explanation for the later contradiction, the courts of appeals are in agreement that the subsequent affidavit does not create a genuine issue of material fact. Id. (emphasis in original) ; see also Boer v. Chase, 392 F.3d 609, 624 (3d Cir. 2004) ("[A] party may not create a material issue of fact to defeat summary judgment by filing an affidavit disputing his or her own sworn testimony without demonstrating a plausible explanation for the conflict." (citing Hackman v. Valley Fair, 932 F.2d 239, 241 (3d Cir. 1991))); Franks v. Nimmo, 796 F.2d 1230, 1237 (10th Cir. 1986); Perma Research Dev. Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969). Also pertinent to our analysis in Martin was the importance of the questioning on which the plaintiff had altered her testimony and the questionable timing of the affidavit. 851 F.2d at 705. These considerations, of course, must be taken into account with all of the surrounding circumstances. See Boer, 392 F.3d at 624.

While we emphasized the absence of any explanation for the change in testimony, we did not purport to allow in all cases the simple expedient of claiming confusion to legitimate a proposed change. Indeed, we stated that the affiant must provide a satisfactory explanation for the later contradiction." Martin, 851 F.2d at 706 (emphasis added). Thus, courts are free to, and should, review the sufficiency of the stated reasons for submitting an errata sheet, as well as the surrounding circumstances, in determining whether contradictory changes should be permitted.

Recently, in Jiminez v. All American Rathskeller, Inc., we reaffirmed the sham affidavit doctrine's "continued vitality and importance":

A sham affidavit is a contradictory affidavit that indicates only that the affiant cannot maintain a consistent story or is willing to offer a statement solely for the purpose of defeating summary judgment. A sham affidavit cannot raise a genuine issue of fact because it is merely a variance from earlier deposition testimony, and therefore no reasonable jury could rely on it to find for the nonmovant. . . . [I]f it is clear that an affidavit is offered solely for the purpose of defeating summary judgment, it is proper for the trial judge to conclude that no reasonable jury could accord that affidavit evidentiary weight and that summary judgment is appropriate.

503 F.3d 247, 253 (3d Cir. 2007) (citations omitted). We explained that while some courts have prescribed a formulaic application to the sham affidavit doctrine, we "have adopted a more flexible approach." Id. at 254 (citing Boer, 392 F.3d at 624; Hackman, 932 F.2d at 241; Martin, 851 F.2d at 705-06). In other words, "not all contradictory affidavits are necessarily shams," and "when there is independent evidence in the record to bolster an otherwise questionable affidavit, courts generally have refused to disregard the affidavit.'" Id. (quoting Boer, 392 F.3d at 625).

Moreover, we have gone so far as to reverse a district court, in part for refusing to consider an affidavit that did not in fact contradict the earlier deposition testimony. See Farrell v. Planters Lifesavers Co., 206 F.3d 271, 276 n. 3, 284 (3d Cir. 2000); see also Baer, 392 F.3d at 624 ("[I]t is clear that merely because there is a discrepancy between deposition testimony and the deponent's later affidavit a district court is not required in all cases to disregard the affidavit."); Kennett-Murray Corp. v. Bone, 622 F.2d 887, 893 (5th Cir. 1980) ("[A] district court . . . cannot disregard a party's affidavit merely because it conflicts to some degree with an earlier deposition.").

We see no principled reason to distinguish between affidavits and errata sheets in this context, and we conclude that the proper analysis for each is the same. Requiring consideration of contradictory errata in all cases, no less so than contradictory affidavits, "would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact." Perma Research, 410 F.2d at 578. But nothing in the foregoing requires courts to strike contradictory errata if sufficiently persuasive reasons are given, if the proposed amendments truly reflect the deponent's original testimony, or if other circumstances satisfy the court that amendment should be permitted. Each case will present fact-sensitive circumstances, and we are disinclined to prescribe a one-size-fits-all rule. Our discussion above, however, along with our existing sham-affidavit jurisprudence, should provide needed guidance for district courts to use hereafter.

B.

We now apply these standards to Chizek's handwritten errata sheet. It is un-disputed that State Steel adequately requested review before the close of the deposition. In addition, the court reporter certified "that the inspection, reading[,] and signing of [the] deposition were NOT waived by counsel for the respective parties and by the witness." J A 281 (capitalization in original). Finally, we note that Chizek provided a reason, although perfunctory, for the errata: "After reading the transcript, I realized that I was confused and misunderstood some of the questions." JA 282.

Chizek and State Steel's compliance with Rule 30(e), however, terminates there. The District Court held that the errata sheet was untimely. We agree, and we therefore find no abuse of discretion in the court's refusal to consider it. Chizek was deposed on December 13, 2006. The court reporter certified the original transcript and provided notice of its availability to State Steel's counsel on January 15, 2007. JA 281, 283. Thus, the deadline to amend was February 14, 2007.

Chizek purportedly executed the errata sheet on March 12, 2007, twenty-six days after the deadline, and defense counsel never received it for attachment to the original transcript. JA 282; SA 2-3. State Steel revealed the errata sheet for the first time as an exhibit to its opposition to A M's motion for summary judgment, three months after the amendment window had closed.

The District Court also rejected the errata sheet because it was not properly filed with the court, provided to the court reporter, or disclosed to A M's counsel. See EBC, Inc. v. Clark Bldg. Sys., No. 05-1549, Dkt. Entry # 81 (W.D.Pa. Feb. 5, 2008). State Steel argues, however, that Chizek did indeed return the errata sheet to the court reporter, but that the court reporter never attached it to the original transcript. State Steel filed an affidavit of counsel attesting to that fact in its second motion for reconsideration. A M, in response, filed an affidavit of the court reporter attesting that neither she nor her company ever received the errata sheet. We are left to wonder why State Steel waited to submit counsel's affidavit until its second reconsideration motion. In any event, even according to counsel's own affidavit, Chizek forwarded the errata sheet to the court reporter after the thirty-day amendment window had closed, making it untimely still.

State Steel argues that it did not receive the original transcript until February 20 or 21, 2007 due to a payment issue with the transcription company. State Steel Reply Br. at 5. But as we have explained, the thirty-day time limit runs from the date the court reporter provides notice of the transcript's availability, not from the date when the transcript is physically received. The District Court did not abuse its discretion in requiring strict adherence to the time limit, payment issues notwithstanding. See Del. Valley Floral Group, Inc. v. Shaw Rose Nets, LLC, 597 F.3d 1374, 1380-81 (Fed. Cir. 2010) ("[The appellant] did not attempt to submit an errata sheet to make substantive changes to his unequivocal testimony until after the thirty days permitted under Rule 30(e). . . . Under the circumstances here, [he] has failed to demonstrate that the district court abused its discretion by excluding his errata sheet.").

Even if State Steel had complied with the procedural requirements of Rule 30(e), we would still find no error in the District Court's refusal to consider the errata sheet. When asked in her deposition whether she knew why the Fox Letter had been sent, Chizek answered, "Honestly I don't." JA 274. The errata sheet stated quite the opposite: "Yes — because State Steel Supply, Inc. was not comfortable with extending that much credit to Clark Bldg. That is why we required the $100,000 check up front. We discussed that with Clark from the beginning." JA 282. When asked whether she thought the Fox Letter was guaranteeing payment of State Steel's invoices, Chizek answered, "I don't know that I really thought about it. . . ." JA 274. The errata sheet, however, tells a different story: "Yes — I would take the letter to be a guarantee of payment." JA282.

Chizek's other two amended answers are fairly consistent with her original testimony, but do refer to a "guarantee" that did not appear in her original testimony.

These contradictory amendments cannot establish a genuine issue of material fact where the original testimony did not. Chizek's answers were central to the contractual analysis, and were in response to careful and repeated questioning. We also find no record support for Chizek's conclusory explanation that she realized, upon review, that she had been confused by the questions. The only corroborative evidence to which State Steel points is Chizek's later trial testimony, which was consistent with her amended answers. We do not consider this evidence, see supra note 8, but find it unsurprising that after review of her damaging deposition testimony, Chizek settled on consistent and, incidentally, helpful answers. Given all of the circumstances under which the errata sheet was revealed, the District Court could have excluded the contradictory errata as a substantive matter.

* * *

We conclude that the District Court did not abuse its discretion in refusing to consider Chizek's untimely and contradictory errata sheet. On the evidence before it, therefore, the District Court correctly granted summary judgment on the breach of contract claim and denied State Steel's motions for reconsideration.

III.

We turn to the claims for unjust enrichment and fraudulent inducement, the subjects of the bench trial. State Steel argues that the District Court erred by granting A M's motion for judgment on partial findings pursuant to Rule 52(c). That rule provides:

If a party has been fully heard on an issue during a nonjury trial and the court finds against the party on that issue, the court may enter judgment against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue. The court may, however, decline to render any judgment until the close of the evidence. A judgment on partial findings must be supported by findings of fact and conclusions of law as required by Rule 52(a).

Fed.R.Civ.P. 52(c). The rule's objective is to "conserve[] time and resources by making it unnecessary for the court to hear evidence on additional facts when the result would not be different even if those additional facts were established." 9 James Wm. Moore et al., Moore's Federal Practice, § 52.50[2] (3d ed. 2010).

Subdivision (c) was added to Rule 52 in 1991. It replaced a portion of Rule 41(b), which previously permitted a court to enter judgment against a plaintiff at the close of his or her case-in-chief if he or she failed to meet the applicable burden of proof. See Fed.R.Civ.P. 52(c) advisory committee's note. Thus, Rule 52(c) operates more broadly than did its predecessor, because courts may now make partial findings on any claim or defense, of any party, at any time. Nonetheless, pre-1991 cases interpreting Rule 41(b) continue to provide guidance. See Fechter v. Conn. Gen. Life Ins. Co., 800 F.Supp. 182, 196 (E.D.Pa. 1992).

A court may grant a Rule 52(c) motion made by either party or may grant judgment sua sponte at any time during a bench trial, so long as the party against whom judgment is to be rendered has been "fully heard" with respect to an issue essential to that party's case. As a result, the court need not wait until that party rests its case-in-chief to enter judgment pursuant to Rule 52(c). See N.Y. Susquehanna W. Ry. Corp. v. Jackson, 500 F.3d 238, 246 n. 6 (3d Cir. 2007) ("[T]he Federal Rules of Civil Procedure . . . allow judgment after partial findings against a party that has been fully heard on the relevant issue."); Feliciano v. Rullan, 378 F.3d 42, 59 (1st Cir. 2004) ("When a party has finished presenting evidence [as to a particular issue] and that evidence is deemed by the trier insufficient to sustain the party's position, the court need not waste time, but, rather, may call a halt to the proceedings and enter judgment accordingly."); Granite State Ins. Co. v. Smart Modular Techs., Inc., 76 F.3d 1023, 1031 (9th Cir. 1996) ("[T]he rule `authorizes the court to enter judgment at any time that it can appropriately make a dispositive finding of fact on the evidence.'" (quoting Fed.R.Civ.P. 52(c) advisory committee's note)). Of course, the court may opt to reserve judgment until all the evidence is in or until the close of the nonmovant's case-in-chief. See Int'l Union of Operating Eng'rs, Local Union 103 v. Ind. Constr. Corp., 13 F.3d 253, 257 (7th Cir. 1994) ("[I]t is within the trial court's sound discretion to decline rendering judgment until hearing all of the evidence.").

The requirement that a party must first be "fully heard" does not, however, "amount to a right to introduce every shred of evidence that a party wishes, without regard to the probative value of that evidence." First Va. Banks, Inc. v. BP Exploration Oil, Inc., 206 F.3d 404, 407 (4th Cir. 2000). In this respect, it is within the discretion of the trial court to enter a judgment on partial findings even though a party has represented that it can adduce further evidence, if under the circumstances, the court determines that the evidence will have little or no probative value. See id.

In considering whether to grant judgment under Rule 52(c), the district court applies the same standard of proof and weighs the evidence as it would at the conclusion of the trial. See Emerson Elec. Co. v. Farmer, 427 F.2d 1082, 1086 (5th Cir. 1970); Falter v. Veterans Admin., 632 F.Supp. 196, 200 (D.N.J. 1986). Accordingly, the court does not view the evidence through a particular lens or draw inferences favorable to either party. See Ritchie v. United States, 451 F.3d 1019, 1023 (9th Cir. 2006); Giant Eagle, Inc. v. Fed, Ins. Co., 884 F.Supp. 979, 982 (W.D.Pa. 1995). The district court should also make determinations of witness credibility where appropriate. See Parker v. Long Beach Mortgage Co., 534 F.Supp.2d 528, 535 (E.D.Pa. 2008); Falter, 632 F.Supp. at 200. Finally, if the court enters judgment under Rule 52(c), it must make findings of fact and conclusions of law pursuant to Rule 52(a).

In these respects, judgments on partial findings differ qualitatively from judgments as a matter of law under Rule 50(a). See Rego v. ARC Water Treatment Co. of Pa., 181; F.3d 396, 400 (3d Cir. 1999); Fed.R.Civ.P. 52(c) advisory committee's note ("The standards that govern judgment as a matter of law in a jury case have no bearing on a decision under Rule 52(c).").

We review the district court's factual findings for clear error and its legal conclusions de novo. See Rego, 181 F.3d at 400. For a finding to be clearly erroneous, we must be left with the definite and firm conviction that a mistake has been committed. Gordon v. Lewistown Hosp., 423 F.3d 184, 201 (3d Cir. 2005). We will not reverse "[i]f the district court's account of the evidence is plausible in light of the record viewed in its entirety" even if we would have weighed that evidence differently. Anderson v. City of Bessemer City, 470 U.S. 564, 573-74, 105 S.Ct. 1504, 84 L.Ed.2d 518. (1985). "[W]hen a trial judge's finding is based on his decision to credit the testimony of one of two or more witnesses, each of whom has told a coherent and facially plausible story that is not contradicted by extrinsic evidence, that finding, if not internally inconsistent, can virtually never be clear error." Id. at 575, 105 S.Ct. 1504; accord MacDraw, Inc. v. CIT Group Equip. Fin., Inc., 157 F.3d 956, 962 (2d Cir. 1998).

A.

State Steel argues that A M was unjustly enriched by accepting assembly of the Project Buildings (containing the' raw steel) without providing full compensation. To prevail on an unjust enrichment claim in Pennsylvania, a plaintiff must demonstrate the following elements: (1) a benefit conferred on the defendant by the plaintiff; (2) appreciation of such benefit by the defendant; and (3) acceptance and retention of such benefit under circumstances such that it would be inequitable for the defendant to retain the benefit without payment to the plaintiff. AmeriPro Search, Inc. v. Fleming Steel Co., 787 A.2d 988, 991 (Pa.Super.Ct. 2001); see also Allegheny Gen. Hosp. v. Philip Morris, Inc., 228 F.3d 429, 447 (3d Cir. 2000). "The most significant element of the doctrine is whether the enrichment of the defendant is unjust;. the doctrine does not apply simply because the defendant may have benefited as a result of the actions of the plaintiff." AmeriPro, 787 A.2d at 991. Instead, "a claimant must show that the party against whom recovery is sought either wrongfully secured or passively received a benefit that . . . would be unconscionable for her to retain." Sovereign Bank v. BJ's Wholesale Club, Inc., 533 F.3d 162, 180 (3d Cir. 2008) (quoting Torchia v. Torchia, 346 Pa.Super. 229, 499 A.2d 581, 582 (1985)). In this case, A M argues only that the third element has not been satisfied, and we proceed directly to it.

Relying on Joint Exhibit 25 and Defendants' Exhibit 1, the District Court found as fact that A M had disbursed a total of $2,752,329.00 to the various parties providing services and materials under the Contract. JA 54, 63-64. Comparing that figure to the adjusted Contract price of 274 618 FEDERAL REPORTER, 3d SERIES'$2,537,935.22, the District Court found that A M had made payment in excess of its contractual obligation. JA 64-65. Citing Meyers Plumbing Heating Supply Co. v. West End Federal Savings Loan Ass'n, 345 Pa.Super. 559, 498 A.2d 966 (1985), the court then held that since A M had made such excess payments, it could not have been "unjustly" enriched. In the District Court's words, requiring A M to "pick up Clark's tab and pay twice for the same goods" would itself be an inequitable result. JA 68.

In Meyers, a subcontractor brought suit against two owners and their general contractor when the owners discontinued payment to the general contractor due to a contractual dispute. 498 A.2d at 967. As is relevant here, the subcontractor had sold to the general contractor, but had not yet been paid for, certain plumbing and heating materials that were then provided to the owners. Id. The Superior Court affirmed the trial court's grant of summary judgment with respect to the subcontractor's unjust enrichment claim against the owners, because the owners had already disbursed payments totaling 96.5% of the original Contract price. Id. at 969. Under these circumstances, the Superior Court held that the benefit conferred was not unjust: "[T]o require [the owners] to pay [the subcontractor] in this action would obligate them to pay for the same items twice. As a result of the money having already been paid once, it can hardly be said that the owners' `enrichment' from the plumbing and heating materials is unjust." Id.

State Steel does not challenge the District Court's legal analysis or its reliance on Meyers, with which we entirely agree. It instead attacks the key factual finding underlying the analysis: that A M paid in the aggregate more than the adjusted Contract price. State Steel complains that by granting the Rule 52(c) motion, the District Court did not afford it an opportunity to challenge Defendants' Exhibit 1. Specifically, State Steel claims that it acquiesced to the exhibit's admission "only as to authenticity," but that due to the Rule 52(c) motion, it never had the opportunity to cross-examine A M's witnesses on the accuracy of that evidence. State Steel Reply Br. at 8. Because Defendants' Exhibit 1 "does not contain copies of cancelled checks or bank records," it says, "the documents which purport to represent payment are nothing more than un-substantiated records of [A M]." State Steel Br. at 34. Accordingly, State Steel argues that "the District Court committed reversible error when it granted [A M's Rule 52(c) motion] and did not require [A M] to present evidence or testimony regarding State Steel's claims. . . ." State Steel Reply Br. at 1-2. We disagree.

We do not understand State Steel to argue that it was not "fully heard" on its claim for unjust enrichment, rendering a Rule 52(c) disposition unavailable. Instead, we understand it to challenge the District Court's key factual finding as clearly erroneous because A M did not present testimony corroborating Joint Exhibit 25 and Defendant's Exhibit 1. This, it says, precluded it from cross-examining A M's witnesses in the hopes of undermining the reliability of the exhibits. Unapparent to us, however, is any reason why A M would shoulder an affirmative burden to introduce testimony for the sole purpose of allowing State Steel an opportunity to deconstruct the documentary evidence. To the contrary, Rule 52 and the Supreme Court instruct us to review factual findings for clear error, no matter the character of the evidence cited in support:

If that is its contention, we reject it. Having rested its case, State Steel was heard fully on its two remaining causes of action. State Steel's tactical decision to permit the admission of A M's exhibits without objection, and its failure to adduce additional testimony enabling it to challenge that evidence, cannot be ascribed as the failure of the District Court to ensure that it had been "fully heard."

If the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. . . . This is so even when the district court's findings do not rest on credibility determinations, but are based instead on physical or documentary evidence or inferences from other facts. . . . Rule 52(a) does not make exceptions or purport to exclude certain categories of factual findings from the obligation of a court of appeals to accept a district court's findings unless clearly erroneous.

Bessemer City, 470 U.S. at 573-74, 105 S.Ct. 1504 (quotation marks and citations omitted); see also Fed.R.Civ.P. 52(a)(6) (prescribing clear-error review "whether based on oral or other evidence").

The burdens of production and persuasion rested entirely with State Steel to establish its claim, see Torchia, 499 A.2d at 582, and therefore A M need not have presented any evidence at all. If State Steel desired to examine A M's employees with respect to payments allegedly made, it should have called those witnesses during its case-in-chief (as it did with Fox). Alternatively, if it was ill-prepared to challenge the documentary evidence using the testimony of the witnesses that it did call, it should not have stipulated to admission of the documents during its case-in-chief. Either way, State Steel cannot now attack the District Court's factual findings as a product of the court's "failure" to force A M to proffer unnecessary testimony. We find neither an abuse of discretion in the District Court's reliance on the documents nor clear error in its finding that A M disbursed more than the Contract price. We will affirm its rejection of the unjust enrichment claim.

Contrary to State Steel's claim that "the record is devoid of any testimony concerning the invoices and payment records submitted by" A M, State Steel Br. at 33, Fox did indeed testify that Joint Exhibit 25 was "a summary of all of the payments that were made in connection with the reconstruction of the A M compost building. . . ." JA 246. This testimony, which the District Court found credible, supports reliance on the documentary evidence despite State Steel's claim that no such testimony exists.

An unjust enrichment claim in Pennsylvania is still viable in this context if the owner misled the subcontractor into providing a benefit. See D.A. Hill Co. v. CleveTrust Realty Investors, 524 Pa. 425, 573 A.2d 1005, 1009 (1990); Limbach Co., LLC v. City of Phila., 905 A.2d 567, 577 (Pa.Commw.Ct. 2006). The District Court correctly went on to examine whether State Steel proved that A M misled it into providing the raw steel to Clark, and concluded that it had not. JA 65-67. Specifically as to the claim for unjust enrichment, State Steel makes no mention to us of this additional finding, and we do not address it.

B.

Finally, State Steel challenges the District Court's judgment, again made on partial findings, against its claim for fraudulent inducement. In Pennsylvania, fraud-based claims of this sort require proof of the following elements by clear and convincing evidence:

(1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance.

Skurnowicz v. Lucci, 798 A.2d 788, 793 (Pa.Super.Ct. 2002) (quoting Bortz v. Noon, 556 Pa. 489, 729 A.2d 555, 560 (1999)); see also Bouriez v. Carnegie Mellon Univ., 585 F.3d 765, 771 (3d Cir. 2009); Overall v. Univ. of Pa., 412 F.3d 492, 498 (3d Cir. 2005). "Matters of misrepresentation, knowledge, reliance, causation, and scienter are questions of fact" subject to clear-error review. Healey v. Chelsea Res., Ltd., 947 F.2d 611, 618 (2d Cir. 1991) (citing Fed.R.Civ.P. 52(a)); accord Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d 212, 229 (3d Cir. 2007) (citing Healey).

State Steel argues that the following statement in the Fox Letter was a material misrepresentation, and induced it to continue delivering steel to Clark: "With respect to any balance that Clark may owe your company . . ., [our] company is willing, with Clark's permission, to pay you directly or by joint check made payable to Clark and your company. . . ." JA 308-09. Though a material representation, the District Court found that this statement was not a misrepresentation. Absent such a false statement, the court also found lacking an intent to mislead, justifiable reliance, and proximate causation of damages. JA 71-74. Reviewing the District Court's evaluation of the factual evidence and its credibility determinations underlying its conclusion, we find no clear error.

The District Court found Wansor's testimony to be generally not credible, and Smith's testimony to be contradicted by the evidence on several key points. JA 37-38. It also found Fox to be credible despite an inconsistent statement he had made in his deposition. JA 38 n. 7. Finally, the court found Chizek's testimony to be credible generally, but noted an "important discrepancy" and also stated that she had an "inherent bias" against A M given her role with State Steel. JA 38-39. State Steel challenges this last point as clear error because the District Court did not make a corresponding finding with respect to Fox's position at A M. State Steel Br. at 30. We take the District Court at its word, however, and review its analysis keeping in mind that it found Chizek's testimony to be credible except where it specifically noted otherwise. We find no internal inconsistency with the court's credibility determinations, and we credit them accordingly.

Chizek testified at trial that she understood the Fox Letter to be a guarantee that A M "would take care of our invoices." JA 266. Additionally, Fox admitted that his letter did not refer to the balance in the joint checking account (perhaps tending to demonstrate that A M's payments to State Steel would not be limited by the funds in that account), or state specifically that A M would not pay State Steel once it had fully paid the Contract price. JA 248-49. State Steel emphasizes these points, and argues that the trial testimony, along with Fox's October 7, 2004 letter (indicating to Wansor that A M would pay the subcontractors as discussed in his "earlier letters") established a material misrepresentation. Though a plausible conclusion, we do not agree that it is the only permissible one.

The District Court took these considerations into account, but found that the Fox Letter did not misrepresent that A M guaranteed to satisfy State Steel's invoices if Clark failed to do so. The court believed Chizek's earlier deposition testimony — that she would not have expected A M to pay more than the Contract price (despite the letter's failure to say so) — to be a reliable indicator of the true meaning of the Fox Letter. JA 72. Chizek's earlier belief is corroborated by Fox's trial testimony that A M would "make direct payments as long as [it] c[ould] deduct them against what [it] owe[d] Clark," but that "by definition, we are not going to make payments if we don't owe Clark any more money." JA 249. The court also credited Fox's testimony that he drafted the letter at Clark's request, that A M never received an invoice from State Steel, that he had no prior dealings with State Steel, and that he "wouldn't know State Steel from the man on the moon." JA 72-73, 250. This lack of a historical relationship between Fox and State Steel undercuts an interpretation that the Fox Letter contained an unqualified and false promise to guarantee payment.

Further, the District Court found that the "earlier letters" that Fox had referenced in his October 7 correspondence did not reference the Fox Letter or guarantee direct payment to all subcontractors, but only did so as to the mitigation subcontractors retained after Clark fell behind schedule. JA 72 n. 16. This reading is not clearly erroneous. At bottom, the District Court read the Fox Letter as merely "seek[ing] to establish a process by which payment could be made," rather than "obligat[ing][A M] as a guarantor of the agreement between Clark and [State Steel]." JA 73. Since this is precisely the manner in which A M conducted itself, the court found no misrepresentation in the Fox Letter.

Under all of these circumstances, we conclude that the record evidence supported the District Court's interpretation of the Fox Letter as an administrative proposal to streamline payments, and nothing more. The District Court did not clearly err in finding that State Steel had failed to prove a material misrepresentation by clear and convincing evidence. Consequently, it did not err in rendering judgment under Rule 52(c) on the claim for fraudulent inducement.

IV.

For these reasons, we will affirm the judgment of the District Court in all respects.