On Appeal From The United States District Court For The Eastern District of Pennsylvania (D.C. Civil No. 88-5529).
Sloviter and Greenberg, Circuit Judges, and Fisher, District Judge*fn* .
Before us is an appeal from an order granting summary judgment against appellant's diversity suit for fraud. Because our review is plenary, we address the record and the issues in the same manner as would a district court when ruling on a summary judgment motion. Ashenbaugh v. Crucible, Inc., 1975 Salaried Retirement Plan, 854 F.2d 1516, 1522 (3d Cir. 1988), cert. denied, 490 U.S. 1105, 109 S. Ct. 3155, 104 L. Ed. 2d 1019 (1989); Bushman v. Halm, 798 F.2d 651, 656 (3d Cir. 1986). For the reasons discussed below, we have concluded that the lower court incorrectly granted summary judgment. We will reverse and remand.
Appellant, Albert J. Wood, is a retired businessman. In the summer of 1987 he was approached by Cahill Magee, President of Impirex International, Ltd. ("Impirex"). Impirex wanted Wood's financial backing in order to print Welcome magazine, a publication designed to commemorate the visit of His Holiness John Paul II to the United States in September of 1987. Proceeds from the magazine's sale were to be divided between printing costs and various charitable organizations.
Impirex also negotiated with R.R. Donnelley & Sons Company ("Donnelley & Sons"), in order to print Welcome contemporaneously with the Pope's visit. Impirex envisioned a print run of 1.3 million copies, and Donnelley & Sons estimated the cost of printing at $547,000. Because Donnelley & Sons did not wish to rely on sales for its payment, it asked to be made the beneficiary of standby letters of credit. Two letters of credit were eventually issued in Donnelley & Sons' favor. The first, for $110,000, was made on behalf of Owen Traynor, a California businessman. The second, for $80,000, was posted by Wood through Continental Bank, N.A. ("Continental").
Wood testified*fn1 that Donnelley & Sons had told him that Welcome would not be printed until the company had been made the beneficiary of three letters of credit. Under this alleged promise, one letter was to be ordered by Traynor for $110,000. The second and third letters were to be ordered by Wood and a Dr. Rocco Martino for $80,000 each. Wood also said that he had been told the three letters would guarantee only the first $270,000 of Donnelley & Sons' costs and would be drawn upon pro rata to satisfy that amount.*fn2 Wood claimed that he had ordered the letter of credit on the basis of these alleged representations.
Donnelley & Sons asserted that it had never made the issuing of three letters a prerequisite for printing Welcome. Moreover, the company claimed that it had clearly told Wood that his $80,000 letter would be drawn upon to the extent necessary to cover all the printing costs. The printer's witnesses testified that Wood may have suggested the above scheme to Donnelley & Sons and others, but that the printer had clearly explained appellant's liability to him.
On August 4, 1987, Wood caused Continental to issue an "Irrevocable Stand-By Letter of Credit" for $80,000. The letter named Donnelley & Sons, "as Agents for Donnelley Receivables, Inc.," as the beneficiary. The letter also refers to Wood as an "Account Party." Id. The letter stated that it could be drawn down upon presentation of a signed statement that:
[Payments] required under a certain Contract by and between R.R. Donnelley & Sons Company and Impirex International Ltd., Dublin, Ireland in connection with the printing of the Papal Souvenir Magazine has (have) not been received by Donnelley Receivables, Inc.
The document also contained an integration clause stating that it "set[ ] forth in full the terms of [the parties'] undertaking and such undertaking shall not be in any way modified, amended, or amplified" by collateral documents, agreements or representations.
When the time to print Welcome arrived, only Traynor and Wood had issued their letters of credit; Martino had not issued his own letter. Steven Korol, Senior Sales Representative of Donnelley & Sons' Magazine Group, testified ...