Joanna Pacitti, a Minor, by Joseph Pacitti, and Stella Pacitti, Her Parents and Guardians v. MacY MacY East, Inc
Docket: 98-1803
Court: Court of Appeals for the Third Circuit; October 5, 1999; Federal Appellate Court
Stella and Joseph Pacitti, representing their daughter Joanna, appeal the District Court's summary judgment favoring Macy's East, Inc. regarding state-law contract and tort claims associated with Macy's sponsorship of the "Macy's Search for Broadway's New `Annie'." The Court also reviews an order restricting the discovery scope. The case centers on a May 1996 agreement between Macy's and the producers of "Annie," where Macy's was to promote and host auditions across several locations. The agreement included selecting finalists for a final audition at Macy's Herald Square, with the promise of a contractual offer to the winner.
Macy's publicized the event widely, including through an advertisement in the Philadelphia Inquirer aimed at young girls eligible for auditioning. Joanna, aged 11, and her mother obtained an application from the King of Prussia store, which outlined the audition process and specified that participants must be accompanied by a parent or guardian. The appellate court reversed the District Court's decisions and remanded the case for further proceedings.
The selected 'Annie' from the 'Annie-Off-Final Callback' must work with a trained dog, with the tour beginning in Fall 1996 and a Broadway opening tentatively set for Spring 1997. Participants, including Joanna Pacitti, are responsible for their conduct and release Macy's and the Producers from liability related to the auditions. All decisions made by the Producers or judges are final. Joanna, who was selected as a regional finalist from over two thousand applicants, participated in the final auditions in New York City, where she was ultimately chosen to star as 'Annie' in the 20th Anniversary production. Joanna and her mother signed an Actors' Equity contract, which allowed producers to replace her at any time, provided her salary was paid through the contract's term. Joanna performed in over 100 shows during a national tour but was informed three weeks before the Broadway opening that her services were no longer needed, leading to her replacement. In March 1997, Joanna and her mother filed a lawsuit against Macy's in Pennsylvania state court for breach of contract and various tort claims, alleging that Macy's misrepresented its ability to deliver the promised starring role. Macy's later moved the case to federal court based on diversity jurisdiction.
During discovery, plaintiffs aimed to obtain information regarding Macy's relationship with the producers and the financial benefits it gained from sponsoring a talent search. Macy's objected, and the District Court restricted discovery to whether Macy's made any promises regarding a specific audition. The plaintiffs' motion for reconsideration was denied on December 19, 1997. Macy's subsequently filed for summary judgment, asserting it had not deprived Joanna of any promised prize, and that her rights were defined by her contract with the producers. Macy's submitted its contract, which indicated that the winner would only receive a chance to enter into a standard actors' equity contract.
The District Court granted Macy's summary judgment, determining that the contract's terms were clear and indicated that Macy's only offered an audition, not a guaranteed Broadway role. The Court found that the plaintiffs were adequately compensated by being offered a contract consistent with the official rules of the contest, fulfilling any obligations Macy's had to them. The Court also dismissed the plaintiffs' tort claims, reasoning that they were based on the false assertion that Macy's had promised Joanna the role of 'Annie.'
The plaintiffs appealed the summary judgment, arguing that the District Court improperly limited discovery. The appellate review revealed potential error in the District Court's summary judgment, referencing Pennsylvania law which states that a contest promoter is bound to perform their promise once an offer is made and acted upon before withdrawal. An offer is defined as a willingness to engage in a bargain that invites acceptance, and an enforceable contract arises if the offeree completes the required action before the offer is rescinded.
The parties formed an enforceable contract under Pennsylvania law, wherein Macy's provided an opportunity for girls to become 'Broadway's New `Annie`' through auditions, which Joanna won. The appeal concerns the interpretation of this contract, specifically whether the District Court correctly determined it was unambiguous. The court's determination of ambiguity is a legal question subject to plenary review. A contract is deemed ambiguous if it allows for multiple reasonable interpretations; otherwise, it is interpreted as a matter of law.
To assess ambiguity, the court considers the parties' intentions as expressed in the contract's language, while also contextualizing the contract beyond its literal wording. In this case, the District Court concluded the contract was unambiguous, indicating that Macy's merely offered an audition for a standard actors' equity contract with the producers, not a contest for the role itself. The official rules consistently referred to the event as an 'audition' and granted the producers sole discretion in decisions, indicating Macy's was promoting auditions for the producers' benefit.
The District Court further noted that the plaintiffs could not reasonably rely on Macy's for selection, understanding that Macy's was not the contracting entity. The plaintiffs anticipated signing a standard actors' equity contract with the producers, which was confirmed when Joanna executed such a contract post-audition.
The contract signed by the plaintiffs with the Producers did not guarantee a Broadway opening but treated the plaintiffs like any other auditioning actors in 'Annie,' who could be replaced at the Producers' discretion. The District Court dismissed the plaintiffs' claim that Macy's provided a guaranteed Broadway role, determining the contract fulfilled Macy's obligations by offering a role in 'Annie' in exchange for participation in 'Macy's Search for Broadway's New Annie.' The court found the plaintiffs' interpretation—that the winner would perform as 'Annie' on Broadway—was reasonable, contrasting with the District Court's view that the contract had only one interpretation. The promotional materials and official rules indicated that Macy's and the Producers were conducting a talent search for a new 'Annie,' suggesting that the winner would receive a starring role. The use of the term ‘audition’ did not negate this interpretation, as it implied a process leading to a significant prize. Furthermore, the official rules did not indicate that Macy's had any diminished authority in the selection process, and there was no communication from Macy's that the winner would only receive a standard contract without a guaranteed role. Thus, it was reasonable for the plaintiffs to believe they were offered the opportunity to star as 'Annie' on Broadway.
The court finds that despite the plaintiffs executing a standard actors' equity contract with the producers, the contract's language is ambiguous regarding the parties' intentions. Courts may consider extrinsic evidence, such as the contract's subject matter and the actions of the parties, to clarify ambiguities. The specific contract in question does not clearly indicate that the plaintiffs expected to execute this standard contract when dealing with Macy's. Therefore, the interpretation of the contract should be determined by a factfinder, and the District Court erred by granting judgment in favor of Macy's as a matter of law.
Macy's argues that the plaintiffs' claims are barred by a release clause in the official rules, which states that participants and their guardians are responsible for their conduct and release Macy's from liability regarding auditions. However, this release pertains only to audition-related liability and does not absolve Macy's from liability in this case, leading the court to reject Macy's argument.
Regarding the plaintiffs' tort claims, the District Court had granted summary judgment based on the premise that Macy's did not offer the role of 'Annie' on Broadway. The court concludes that the contract can be interpreted to imply such an offer, reversing the District Court's dismissal of these claims and remanding for further proceedings.
Additionally, the plaintiffs contend that the District Court abused its discretion by limiting discovery, which they claim hindered their fraudulent misrepresentation claims. Macy's counters that the appeal regarding discovery is improper and that the District Court acted within its discretion. The court determines it has jurisdiction to review the discovery order, as the plaintiffs’ notice of appeal adequately encompasses the District Court's prior discovery decisions, despite not explicitly mentioning them. The court adopts a liberal interpretation of the appeal rules, allowing for the review of earlier orders when a final judgment is appealed.
Only final judgments or orders are appealable, and an appeal from a final judgment encompasses all prior non-final orders. This principle allows for jurisdiction over unspecified orders if they relate to the specified order under appeal, particularly when the appeal involves discretionary decisions. A notice of appeal that names the final judgment is adequate to review all previous orders merged into it. For the court to exercise jurisdiction over unspecified orders, there must be a connection between the specified and unspecified orders, evident intent to appeal the unspecified orders, and no prejudice to the opposing party.
In this case, the discovery order was sufficiently linked to the summary judgment order, allowing for review despite the plaintiffs only appealing the final judgment. The court then needed to assess whether the District Court abused its discretion by limiting discovery to specific promises made by the defendant at a particular audition, which the plaintiffs argued restricted their ability to gather relevant information for their fraud claims. Discovery orders are reviewed for abuse of discretion, and the Federal Rules of Civil Procedure support broad and liberal discovery, permitting the pursuit of information relevant to any claims or defenses in the case, even if not immediately admissible.
To establish a claim for fraudulent misrepresentation under Pennsylvania law, plaintiffs must demonstrate five elements: 1) a misrepresentation, 2) a fraudulent utterance, 3) an intention to induce action by the recipient, 4) justifiable reliance by the recipient on the misrepresentation, and 5) resultant damage to the recipient. The plaintiffs argue that Macy's fraudulently misrepresented that the successful participant would perform as 'Annie' on Broadway, intending to induce participation in the Search, and that Joanna relied on this misrepresentation to her detriment.
The plaintiffs seek discovery of Macy's communications with the producers regarding the contract terms intended for the successful contestant, as well as the financial benefits Macy's gained from the Search. This information is relevant to determining Macy's knowledge about the feasibility of offering a Broadway role and its motivations for the representations made.
Macy's contends that only representations the plaintiffs were privy to are relevant, but this argument fails since the plaintiffs' claims rely on information that Macy's possessed but did not disclose. The District Court's limitation of discovery was deemed erroneous. Consequently, the court reversed the summary judgment on all claims and remanded the case for further proceedings, allowing plaintiffs to conduct discovery related to their claims. Additionally, relevant procedural notes regarding the contractual obligations and audition requirements for participants were included.
The tour is set to begin in Fall 1996, with a Broadway opening planned for Spring 1997, followed by a post-Broadway tour. Children participating must be accompanied by a parent or guardian. Selected regional finalists for the "Annie-Off-Final Callback" audition in New York City will receive additional details regarding final rehearsals and performances. By participating, individuals agree to the Official Rules and consent to the use of their image and name for promotional purposes by Macy's without further permission or compensation. Participants affiliated with Actors' Equity Association must disclose their membership and will not be recorded during auditions.
To audition, individuals must complete and return the application form, be U.S. residents aged 7 to 12 as of June 2, 1996, and be available for the final audition on August 8, 1996, in New York City. Macy's may require proof of age, such as a birth certificate or school records. Parents or guardians are responsible for any taxes and expenses incurred for the initial audition, while Macy's will cover travel and hotel costs for finalists selected for the callback. Participants and their guardians assume responsibility for their conduct and release Macy's and the Producers from liability related to the auditions.
The audition process must comply with applicable laws and regulations, and decisions made by the Producers or judges are final. The document notes that both New York and Pennsylvania laws are identical in relevant respects, and breach of contract claims will be analyzed under Pennsylvania law. Macy's is expected to clarify its contractual intentions within its offer.
The drafter of a contract has a duty to clarify the offer to avoid misleading the public. In assessing the parties' intentions in a written contract, the document is construed against the drafter. The court disagreed with the District Court's interpretation of a release clause which indicated that plaintiffs understood Macy's was not the contracting entity for the new "Annie." The release clause absolves both Macy's and the producers from liability concerning the auditions. Plaintiffs claimed they were not given adequate opportunity for discovery to counter Macy's motion for summary judgment, but Macy's argued that the issue was not preserved for appeal due to the absence of a Rule 56(f) motion. The notice of appeal was filed by Joanna Pacitti, a minor, through her parents, challenging the summary judgment favoring Macy's. Additionally, plaintiffs contended the District Court incorrectly limited the number of depositions, but the appellate court noted that this could be re-evaluated on remand concerning the plaintiffs' discovery needs. A dissenting opinion stated that Joanna Pacitti was offered and accepted a role in the production of "Annie," auditioning and performing successfully, even though she was replaced before the Broadway opening. The dissenting judge agreed with the District Court's conclusion that Pacitti received the benefits of her contract with Macy's and did not support the plaintiffs' interpretation of the contract.
