Aerel S.R.L. v. PCC Airfoils, LLC ( 2006 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 06a0177p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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Plaintiff-Appellant, -
AEREL, S.R.L.,
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No. 05-3864
v.
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PCC AIRFOILS, L.L.C., -
Defendant-Appellee. -
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Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 04-00744—Patricia A. Gaughan, District Judge.
Argued: April 25, 2006
Decided and Filed: May 23, 2006
Before: SUHRHEINRICH, GILMAN, and ROGERS, Circuit Judges.
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COUNSEL
ARGUED: Timothy John Fitzgerald, GALLAGHER SHARP, Cleveland, Ohio, for Appellant. M.
Neal Rains, FRANTZ WARD LLP, Cleveland, Ohio, for Appellee. ON BRIEF: Timothy John
Fitzgerald, George H. Carr, James F. Koehler, GALLAGHER SHARP, Cleveland, Ohio, for
Appellant. M. Neal Rains, Lindsey A. Carr, FRANTZ WARD LLP, Cleveland, Ohio, for Appellee.
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OPINION
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RONALD LEE GILMAN, Circuit Judge. Aerel, S.R.L., an Italian company that served as
the exclusive sales agent for PCC Airfoils, L.L.C. in Italy, sued PCC for the breach of a contract that
the parties executed in 2000. PCC is an Ohio-based company that provides castings for parts used
in jet engines and power generating equipment. Aerel maintains that the contract required PCC to
pay Aerel commissions for all orders that Aerel obtained for PCC in Italy during the term of the
contract, even if those orders were not finalized until after the contract had expired. The district
court concluded that the contract unambiguously permitted PCC to cease paying commissions upon
the termination of the contract on December 31, 2002, and therefore granted summary judgment in
favor of PCC. For the reasons set forth below, we AFFIRM the judgment of the district court.
1
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 2
I. BACKGROUND
A. Factual background
Aerel entered into its first contract with PCC in July of 1987. Under that contract, PCC
agreed to pay Aerel commissions at a rate of 4% on the sale of certain PCC products in Italy, with
the understanding that higher or lower commissions on other products or services could be
established by mutual agreement. Commission payments were to extend for 18 months following
the 1989 expiration date of the contract. Aerel would thus receive commissions during this extended
period on orders placed, but not completed or paid for, during the contract term. Article V of the
contract provided in relevant part as follows:
5-C Upon the termination of this AGREEMENT, PCC Airfoils, Inc.[’s]
obligation to pay commission on sales of PRODUCTS promoted by AEREL
hereunder shall cease except AEREL shall be paid commission on purchase
orders then in force for castings to be delivered up to 18 months after the
termination of the contract where the PRODUCTS covered thereby have not
been delivered or paid for.
After the initial contract expired in December of 1989, the parties renewed their arrangement with
similar agreements—all of which contained ¶ 5-C—in 1990, 1993, and 1995. Aerel continued to
serve as PCC’s exclusive sales agent in Italy following the expiration of the 1995 agreement, but
operated without a written contract.
In July of 2000, the parties signed a new sales agreement that modified their previous
arrangement. Three provisions of the 2000 contract are at issue in the present case:
2-F PCC AIRFOILS, INC. agrees to pay AEREL in full under terms of net thirty
(30) days from the date of receipt of payment to PCC AIRFOILS, INC. from
the customer.
2-G On all sales originating from the Territory, PCC AIRFOILS, INC. shall pay
AEREL as follows:
1. Tooling and fixtures 0%
2. Commission to be paid for CF6-8OC2 and GE90 airfoils sold
to any Italian customer will not exceed 2%
3. Castings for any other program of PCC AIRFOILS,
INC. 4%
4. It is understood that higher or lower commissions may be
required with regard to certain products or services, by
mutual agreement.
***
5-B Upon the termination of this Agreement, PCC AIRFOILS, INC.[’s]
obligation to pay commission on sales of Products promoted by AEREL
hereunder shall cease.
Just three months after signing the new contract, the parties further modified the terms of the
agreement by amending subparagraph 2 of ¶ 2-G to include other PCC products at the 2% rate.
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 3
Absent from the 2000 contract, however, was any language confirming Aerel’s right to commission
payments for timely placed orders delivered and paid for during the 18 months after the contract
terminated. All of the prior contracts between the parties had included that language in ¶ 5-C.
Luciano Cosentini, Aerel’s principal, testified in his deposition that he knew of the change
in the language and was not pleased with it. But he acknowledged that he had signed the 2000
contract voluntarily. Notwithstanding this testimony, Cosentini filed an affidavit accompanying
Aerel’s motion for partial summary judgment in which he offered a detailed reason for the deletion
of ¶ 5-C. Cosentini claimed that the language previously in Article V was eliminated because Aerel
had requested a commission “tail” that would have permitted Aerel to collect commissions on orders
that were negotiated directly by PCC, without Aerel’s help, after the contract had expired. Aerel
insisted that it was entitled to these extra commissions because it had developed a market in Italy
for PCC products. But PCC rebuffed Aerel’s efforts and, according to Cosentini, employed
language in the new ¶ 5-B that expressly rejected the idea of commission tails. Cosentini
maintained, however, that this did not alter his ongoing oral understanding with PCC’s Sales
Director Alan Peterson that Aerel would continue to receive commissions on all Aerel-obtained
orders placed during the contract term, even if those orders were not completed and paid for until
after the contract expired.
During the term of the 2000 contract, Aerel negotiated blanket purchase orders of PCC
products with two Italian companies, FiatAvio and Nuovo Pignone. As the parties explained at oral
argument, the blanket purchase orders in question, although submitted during the period of the
agreement, did not become binding contracts until both the purchaser and PCC confirmed a specific
draw-down against the blanket purchase order. These specific purchase orders led to continued sales
in 2003, 2004, and 2005. In 2003, for example, sales under the specific purchase orders totaled
$30,974,297. The FiatAvio purchase orders expired at the end of 2003, but the Nuovo Pignone
orders still led to significant sales in 2004 and 2005. At the rates in the 2000 contract, Aerel
estimated that it would have earned over $650,000 in commissions on the FiatAvio and Nuovo
Pignone purchase orders between 2003 and 2005. But in October of 2002, two months before the
contract was set to expire, PCC informed Aerel that the sales arrangement would not be renewed.
PCC sent a check and an accompanying explanatory letter in March of 2003, purporting to pay Aerel
for all of the commissions owed under the expired contract.
B. Procedural background
Aerel filed its complaint in the district court in April of 2004. The complaint sought
recovery under the theories of breach of contract, quasi-contract, and unjust enrichment. After
attempts at mediation failed, PCC filed a motion for summary judgment. Aerel responded with a
cross-motion for partial summary judgment. The district court denied Aerel’s cross-motion and
granted PCC’s motion. Aerel, S.R.L. v. PCC Airfoils, L.L.C., 371 F. Supp. 2d 933, 943 (N.D. Ohio
2005). Aerel argued that the language of the contract clearly requires PCC to pay commissions on
all orders initiated during the contract period or, in the alternative, that the contract was ambiguous.
Rejecting both of these arguments, the district court held that, under ¶ 5-B of the contract, “Aerel
is not entitled to commissions after the termination of the contract.” Id. at 939.
The district court also rejected Aerel’s contention that an alleged oral modification of the
terms of ¶ 5-B after the contract was executed precluded summary judgment. This contention, the
district court observed, was supported only by Cosentini’s affidavit. Id. at 941. In paragraphs 7 and
11 of the affidavit, Cosentini averred that PCC Sales Director Peterson had told him during and after
the negotiation of the 2000 contract that Aerel would receive the contested commissions, and that
Peterson’s representations “either confirmed [his] interpretation of the written contract, or modified
the written contract to match [his] previous interpretation.” But the district court determined that
these statements should have been revealed in Cosentini’s deposition testimony. It therefore struck
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 4
the two paragraphs in the affidavit that related to the alleged oral modification. Id. at 942. Finally,
the district court granted summary judgment to PCC on the quasi-contract and unjust-enrichment
claims, neither of which Aerel has pursued on appeal. Id. at 943.
II. ANALYSIS
A. Standard of review
We review de novo a district court’s grant of summary judgment. Int’l Union v. Cummins,
Inc., 434 F.3d 478, 483 (6th Cir. 2006). Summary judgment is proper where there exists no genuine
issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(c). In considering a motion for summary judgment, the district court must construe the
evidence and draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The central issue is “whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 251-52 (1986).
B. The district court did not err in determining that no commissions were
due after the contract expired
Aerel first argues, as it did before the district court, that ¶ 2-G of the contract clearly entitles
Aerel to all of the post-termination commissions that it seeks. This argument fails for two reasons.
The first is that Aerel itself recognizes that the operative phrase in ¶ 2-G—“sales originating from
the Territory”—“is susceptible to two or more reasonable interpretations.” See Schachner v. Blue
Cross & Blue Shield of Ohio, 77 F.3d 889, 893 (6th Cir. 1996) (“Contract language is ambiguous
if it is subject to two reasonable interpretations.”). Those varied interpretations center on the word
“originating,” which could mean simply “ordered,” or, alternatively, could include the entire
transactional process, from placement of the order through manufacturing, shipping, and receipt of
payment. In other words, ¶ 2-G, standing alone, does not answer the question of whether the
contract required PCC to pay Aerel commissions for products ordered, but not yet shipped, accepted,
or paid for, during the term of the contract.
The second reason that Aerel’s argument fails is that ¶ 5-B specifically covers the topic of
post-termination commissions and therefore supersedes the more general terms of ¶ 2-G. Under
Ohio law, “[a] specific provision controls over a general one.” Monsler v. Cincinnati Cas. Co., 598
N.E.2d 1203, 1209 (Ohio Ct. App. 1991); see also BP Chemicals, Inc. v. First State Ins. Co., 226
F.3d 420, 426-27 (6th Cir. 2000) (explaining the principle that “more specific provisions control
over general ones”). Unlike ¶ 2-G, which governs commission rates generally for “all sales” during
the contract period, ¶ 5-B focuses on the precise time when PCC’s duty to pay commissions ended.
The latter paragraph fixes the cessation of that duty at the termination of the contract, and
does so in plain terms. Aerel’s response—that ¶ 5-B refers only to “products that had previously
been promoted by Aerel”—is unpersuasive both because it adds a nonexistent term to an otherwise
clear contractual provision and because, as soon as the contract period ended, any PCC product
promoted by Aerel would be one that Aerel “previously promoted.” Because the plain language of
¶ 5-B controls and displaces the general terms of ¶ 2-G, and because ¶ 2-G does not address the
payment of post-termination commissions, we reject Aerel’s first argument.
Aerel’s alternative argument is that ¶¶ 2-F and 2-G, when juxtaposed with ¶ 5-B, create an
ambiguity that must be construed against PCC as the drafter. See Graham v. Drydock Coal Co., 667
N.E.2d 949, 952 (Ohio 1996) (reciting the rule that “a contract is to be construed against the party
who drew it”). Rejecting this contention, the district court concluded that the unambiguous language
of ¶ 5-B controls the issue of post-termination commissions. Aerel, 371 F. Supp. 2d at 939. The
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 5
district court further reasoned that the structure of the contract favored the interpretation advocated
by PCC, since Article II discusses the various aspects of the parties’ dealings during the contract
term, whereas the two provisions in Article V specifically refer to when the contract expires and
what happens upon termination. Id. at 940.
We agree with the district court’s interpretation of the contract and reject Aerel’s argument
that the contract is ambiguous. Aerel insists that the phrase “sales of Products promoted by AEREL
hereunder” in ¶ 5-B is susceptible to at least two reasonable interpretations, one of which is that the
phrase refers only to those products “previously promoted and marketed by Aerel.” These latter
products would be distinguished from products sold by PCC to existing customers during the
requested tail period that would follow the termination of the contract. Aerel’s reading of this
otherwise straightforward language is an obvious attempt to create ambiguity where none exists, an
attempt that contravenes Ohio law in two ways.
The first way is that Aerel, in support of its reading, relies on the extrinsic evidence of its
request for commission “tails” to prove that ¶ 5-B addressed only that request. Ohio courts,
however, will “not use extrinsic evidence to create an ambiguity; rather, the ambiguity must be
patent, i.e., apparent on the face of the contract.” Covington v. Lucia, 784 N.E.2d 186, 190 (Ohio
Ct. App. 2003) (citations and quotation marks omitted); see also Shifrin v. Forest City Enterprises,
Inc., 597 N.E.2d 499, 501 (Ohio 1992) (explaining that extrinsic evidence will “be considered in an
effort to give effect to the parties’ intentions” only if “the language of a contract is unclear or
ambiguous”). No such patent ambiguity exists in the 2000 contract.
Second, Aerel appears to believe that the existence of competing readings of contractual
language is sufficient in and of itself to render the provision ambiguous. This argument has been
consistently rejected by various Ohio courts. See, e.g., Ohio Water Dev. Auth. v. W. Res. Water
Dist., 776 N.E.2d 530, 535 (Ohio Ct. App. 2002) (explaining that “the fact that parties may adopt
conflicting interpretations of a contract between them, while involved in litigation, will not create
ambiguity or a basis for unreasonable interpretation of the language”). The Ohio Supreme Court
has recently reaffirmed that a contract’s susceptibility to more than one reading does not necessarily
render the writing ambiguous. See State v. Porterfield, 829 N.E.2d 690, 692-93 (Ohio 2005)
(discussing the “level of lucidity necessary for a writing to be unambiguous” in the context of
statutory interpretation); see also United Tel. Co. of Ohio v. Williams Excavating, Inc., 707 N.E.2d
1188, 1200 (Ohio Ct. App. 1997) (observing that contract language is ambiguous only if “it is
susceptible of two conflicting but reasonable interpretations”) (emphasis added). Aerel’s proposed
construction of ¶ 5-B strikes us as unreasonable because such a construction would require PCC to
pay Aerel sales commissions for an indefinite period of time following termination—something that
not even former ¶ 5-C required PCC to do under the previous agreements between the parties.
The structure of the contract also supports the district court’s conclusion. Article II contains
nine provisions that, among other things, established Aerel as PCC’s exclusive sales representative
in Italy, bound Aerel via a noncompete clause for one year after the contract period, and dictated the
time of payment and the commission rates. In contrast, Article V contains only two provisions, the
first of which set forth the beginning and the end of the contract period and the second of which,
¶ 5-B, eliminated PCC’s obligation to pay commissions upon the termination of the contract. As
explained above, nothing in Article II covers the payment of post-termination commissions, leaving
the clear language of ¶ 5-B as the only section of the contract to address that issue directly.
Paragraphs 2-F and 2-G are therefore logically read as governing particular aspects of the parties’
ongoing relationship during the contract period, whereas ¶ 5-B resolves a question left unanswered
by the former provisions.
The argument emphasized by Aerel in its Reply Brief—that the district court’s attempt to
harmonize Articles II and V leads to an absurd result—is likewise unpersuasive. Aerel contends
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 6
that, under the district court’s interpretation of ¶¶ 2-F and 5-B, PCC could have refused to pay
Aerel’s commission on a completed contract if PCC’s payment obligation did not mature until less
than 30 days remained before the contract expired. This is possible, Aerel says, because ¶ 2-F
required that PCC pay Aerel within 30 days of receiving payment from the customer, thereby
permitting PCC to deprive Aerel of commissions otherwise due simply by withholding payment
until after the contract expired.
We do not believe that the interpretation adopted by the district court leads to the absurd
consequences that Aerel postulates. First and foremost, the scenario envisioned by Aerel is not the
one at issue in the present case, which concerns blanket purchase orders that potentially generated
commissions well after the termination date of the contract. These blanket purchase orders, as we
explained above, did not become binding contracts—and thus did not generate sales
commissions—until the customer confirmed a specific draw-down against its blanket purchase
order.
Secondly, Aerel’s counsel confirmed at oral argument that no commissions on these specific
draw-downs became due in the last 30 days of the contract term. In any event, principles of equity,
which “regard[] as done that which ought to be done,” Syring v. Sartorious, 277 N.E.2d 457, 458
(Ohio Ct. App. 1971) (citations and quotation marks omitted), would likely have barred PCC from
withholding commissions fully payable within 30 days of the contract’s expiration.
Aerel therefore confuses a hypothetical attempt by PCC to deprive Aerel of commissions
with PCC’s right under the contract to decline to pay commissions on orders that were initially
negotiated during the contract term but were not finalized until after termination. In other words,
¶ 5-B of the contract would not likely have permitted PCC to deny Aerel the commission payments
otherwise due at the time of termination, but did permit PCC to refuse to pay commissions for orders
that did not even become final until after the contract had expired. We acknowledge that, read in
this manner, the 2000 contract might have decreased Aerel’s incentive to seek out long-term
contracts on PCC’s behalf, and might also have affected Aerel’s desire to work for PCC during the
final months of the contract period. But enforcement of the document’s unambiguous terms,
although adverse to Aerel’s financial interests, is no more absurd or manifestly unjust than refusing
to grant PCC the benefit of a bargain that it successfully negotiated with another experienced
commercial entity.
Finally, the district court correctly distinguished this court’s decision in Harry W. Applegate,
Inc. v. Stature Electric, Inc., 275 F.3d 486 (6th Cir. 2001). As in the present case, Applegate
involved a dispute over commissions on blanket purchase orders placed before the contract expired
but not paid for until after termination. Id. at 488. This court first found that the written agreement
was ambiguous and then, applying New York law, held that the plaintiff was entitled to the
requested commissions. Id. at 489. Central to this court’s holding was the fact—repeated three
times in the opinion—that “the Agreement does not clearly provide a contrary provision.” Id.; see
also id. at 488 (mentioning twice that the plaintiff was entitled to the commissions under New York
law because the agreement was silent on the issue). In the present case, in contrast, ¶ 5-B of the
contract unambiguously addresses the issue of post-termination commissions and renders resort to
default principles of state contract law unnecessary. Because Aerel’s ambiguity argument finds no
support in the decisions of either this court or the Ohio courts, we agree with the district court’s
conclusion that the contract was unambiguous.
C. The district court’s decision to strike two paragraphs from
Cosentini’s affidavit
Aerel next attacks the district court’s decision to strike paragraphs 7 and 11 from the post-
deposition affidavit submitted by Cosentini. Had those sections of the affidavit not been excluded,
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 7
Aerel contends, there would have been a genuine issue of material fact as to whether the 2000
contact was orally modified after its signing. The district court based its decision on the rule that
a party cannot create a disputed issue of material fact by filing an affidavit that contradicts the
party’s earlier deposition testimony. See Penny v. United Parcel Service, 128 F.3d 408, 415 (6th
Cir. 1997) (“[A] party cannot create a genuine issue of material fact by filing an affidavit, after a
motion for summary judgment has been made, that essentially contradicts his earlier deposition
testimony.”); see also Reid v. Sears, Roebuck & Co., 790 F.2d 453, 460 (6th Cir. 1986) (establishing
this general principle). According to Aerel, the district court erred by extending the rule announced
in Reid—which applies where the later affidavit “essentially contradicts” the earlier testimony—to
a situation where the affidavit covers a topic omitted in the prior testimony.
We will not overturn a district court’s decision to grant or deny a motion to strike an affidavit
unless the lower court abused its discretion. Int’l Union, United Automobile, Aerospace, and
Agricultural Implement Workers of Am. v. Aguirre, 410 F.3d 297, 304 (6th Cir. 2005) (applying the
abuse-of-discretion standard in evaluating a challenge to the district court’s decision to strike the
affidavit of an expert witness). A district court abuses its discretion when it “relies on erroneous
findings of fact, applies the wrong legal standard, misapplies the correct legal standard when
reaching a conclusion, or makes a clear error of judgment.” Reeb v. Ohio Dept. of Rehabilitation
and Correction, 435 F.3d 639, 644 (6th Cir. 2006).
In striking the two paragraphs from Cosentini’s affidavit, the district court relied both on the
general rule announced in Reid and also on three unpublished opinions from this court applying that
rule. Aerel, 371 F. Supp. 2d at 942 (citing the three unpublished decisions of Lockard v. General
Motors Corp., 52 F. App’x 782, 788-89 (6th Cir. 2002), Smith v. Consolidated Rail Corp., No. 95-
3727, 1996 WL 366283, at *4 (6th Cir. 1996), and Rosinski v. Electronic Data Systems Corp., No.
90-2133, 1991 WL 105747, at *6 (6th Cir. 1991) (per curiam)). This court’s decision in Smith v.
Consolidated Rail Corp. provides little insight into the present case because that decision concerned
only the basic factual setting addressed in Reid, where the deponent had been “specifically
questioned” about the key factual issue. See Smith, 1996 WL 366283, at *4; Reid, 790 F.2d at 460.
The Rosinski decision, however, expands the Reid rule to cover a situation in which the later-
filed affidavit revealed an omission in the party’s deposition testimony. See Rosinski, 1991 WL
105747, at *6 (striking an affidavit that, though not directly contradictory, “point[ed] to a significant
omission in” the plaintiff’s deposition testimony). Finally, the court in Lockard appears to have
recast one of the policy justifications underlying the Reid rule—that a party’s “ample opportunity
during discovery to present evidence provides courts with reason to prevent that party from
introducing new evidence in an affidavit opposing summary judgment”—as an independent ground
for striking portions of an affidavit. See Lockard, 52 F. App’x at 789 (citing Biechele v. Cedar
Point, Inc., 747 F.3d 209, 215 (6th Cir. 1984)).
In our opinion, the expansive view of the Reid rule adopted in the latter two of these
nonprecedential opinions is unwarranted. The rule set forth in Reid is grounded on the sound
proposition that a party should not be able to create a disputed issue of material fact where earlier
testimony on that issue by the same party indicates that no such dispute exists. Reid and its progeny
have thus barred the nonmoving party from avoiding summary judgment by simply filing an
affidavit that directly contradicts that party’s previous testimony. See, e.g., Peck v. Bridgeport
Machines, Inc., 237 F.3d 614, 619 (6th Cir. 2001) (holding that a post-deposition affidavit submitted
by the plaintiff’s expert was “not cognizable for purposes of the summary judgment decision”
because it was “plainly contradictory” to the expert’s previous deposition testimony).
This is a far cry, however, from preventing a party who was not directly questioned about
an issue from supplementing incomplete deposition testimony with a sworn affidavit. Such an
affidavit fills a gap left open by the moving party and thus provides the district court with more
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 8
information, rather than less, at the crucial summary judgment stage. Because the deponent is under
no obligation to volunteer information not fairly sought by the questioner, we see no reason to apply
Reid and its progeny to such a situation. See Bass v. City of Sioux Falls, 232 F.3d 615, 618 (8th Cir.
1999) (reversing the district court’s decision to disregard an allegedly inconsistent affidavit because
the deponent “had no duty to volunteer [the relevant] information during the deposition absent a
question from plaintiffs’ counsel seeking that information”); see also In re B-E Holdings, Inc., 240
B.R. 751, 753 (Bankr. E.D. Wisc. 1999) (observing that although deponents must appear and
provide forthright answers, they need not “volunteer information, explain trial strategies, or reveal
privileged information”).
Our conclusion is in accord with the variations of the Reid rule adopted by our sister circuits.
As the Supreme Court has observed, the lower federal courts
have held with virtual unanimity that a party cannot create a genuine issue of fact
sufficient to survive summary judgment simply by contradicting his or her own
previous sworn statement (by, say, filing a later affidavit that flatly contradicts that
party’s earlier sworn deposition) without explaining the contradiction or attempting
to resolve the disparity.
Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 806 (1999) (collecting cases). These rules
invariably reflect the importance of distinguishing legitimate efforts to supplement the summary
judgment record from attempts to create a sham issue of material fact. The Fifth Circuit, for
example, has held that a nonmoving party “cannot defeat a motion for summary judgment by
submitting an affidavit [that] directly contradicts, without explanation, his previous testimony.”
Albertson v. T.J. Stevenson & Co., Inc., 749 F.2d 223, 228 (5th Cir. 1984). That court does not,
however, permit a district court to strike or “disregard a party’s affidavit merely because it conflicts
to some degree with an earlier deposition.” Kennett-Murray Corp. v. Bone, 622 F.2d 887, 893-94
(5th Cir. 1980) (holding that the district court erred in refusing to consider an affidavit that was “not
inherently inconsistent” with the party’s deposition testimony) (emphasis added). Rather, the post-
deposition affidavit should be considered unless “the issue raised by the contradictory affidavit
constituted a sham.” Id. at 894; see also S.W.S. Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 495 (5th
Cir. 1996) (distinguishing Bone as a case in which the later affidavit “simply supplement[ed] the
previous sworn deposition”).
Other circuits likewise permit district courts to consider post-deposition affidavits that appear
to contradict prior deposition testimony so long as the affidavit is not intended to create a sham issue
of fact—that is, if the nonmoving party was confused during the deposition or has some other
legitimate justification. See, e.g., Franks v. Nimmo, 796 F.2d 1230, 1237 (10th Cir. 1986) (holding
that a contradictory affidavit should be disregarded when it attempts to create a sham fact issue, and
listing factors to be used in determining whether the affidavit creates such an issue); Miller v. A.H.
Robins, Co., 766 F.2d 1102, 1104 (7th Cir. 1985) (holding that “an inconsistent affidavit may
preclude summary judgment . . . if the affiant was confused at the deposition and the affidavit
explains those aspects of the deposition testimony or if the affiant lacked access to material facts and
the affidavit sets forth the newly-discovered evidence”). Both these rules and the exceptions thereto
recognize, as the Tenth Circuit has cogently explained, “that the utility of summary judgment as a
procedure for screening out sham fact issues would be greatly undermined if a party could create
an issue of fact merely by submitting an affidavit contradicting his own prior testimony.” Franks,
796 F.2d at 1237.
As we interpret Reid and the other relevant authorities, then, a district court deciding the
admissibility of a post-deposition affidavit at the summary judgment stage must first determine
whether the affidavit directly contradicts the nonmoving party’s prior sworn testimony. See
Albertson, 749 F.2d at 228 (employing the “directly contradicts” language). A directly contradictory
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 9
affidavit should be stricken unless the party opposing summary judgment provides a persuasive
justification for the contradiction. See A.H. Robins, 766 F.2d at 1104 (setting forth instances in
which “an inconsistent affidavit may preclude summary judgment”). If, on the other hand, there is
no direct contradiction, then the district court should not strike or disregard that affidavit unless the
court determines that the affidavit “constitutes an attempt to create a sham fact issue.” See Franks,
796 F.2d at 1237. A useful starting point for this inquiry is the nonexhaustive list of factors
articulated by the Tenth Circuit in Franks, where the court noted that the existence of a sham fact
issue turns on “whether the affiant was cross-examined during his earlier testimony, whether the
affiant had access to the pertinent evidence at the time of his earlier testimony or whether the
affidavit was based on newly discovered evidence, and whether the earlier testimony reflects
confusion [that] the affidavit attempts to explain.” Id.
The district court in the present case struck portions of Cosentini’s affidavit that admittedly
did not directly contradict his deposition testimony, but rather revealed information that was not
fully explored during that testimony. See Aerel, 371 F. Supp. 2d at 942 (recognizing that paragraphs
7 and 11 did “not represent a direct contradiction between Cosentini’s Affidavit and prior deposition
testimony”). Absent a direct contradiction, as we have said, the district court should not have struck
those two paragraphs unless they were added in an attempt to create a sham fact issue. But nothing
in the record suggests that Cosentini attempted to “create an issue of fact merely by submitting an
affidavit contradicting his own prior testimony.” See Franks, 796 F.2d at 1237. The transcript of
Cosentini’s deposition testimony instead reveals that he was questioned about his understanding of
the contract and that he referred to discussions with PCC Sales Director Alan Peterson, but that
PCC’s counsel quickly shifted the inquiry to topics other than Cosentini’s discussions without fully
exploring the issue. Paragraphs 7 and 11 of the affidavit are therefore properly viewed as an
“attempt[] to explain” the oral understandings that were alluded to but not explored during the three-
hour deposition. See id. (listing “whether the earlier testimony reflects confusion [that] the affidavit
attempts to explain” as one factor in determining the existence of sham fact issue).
The district court’s ruling, though consistent with the unpublished decisions of this court
discussed above, therefore strikes us as a potentially significant extension of the principle announced
in Reid—one that threatens to transform the straightforward, objective inquiry needed to decide
whether an affidavit contradicts deposition testimony into a more subjective evaluation of a party’s
prior “opportunit[ies] during discovery to present evidence” and whether that party could have or
should have been more forthcoming in her deposition. See Lockard, 52 F. App’x at 789. This court
has not yet endorsed such an extension of Reid in any published decision, and we decline to do so
today.
We do not need to decide, however, whether the district court’s apparent extension of the
Reid rule or its reliance on this court’s unpublished decisions rose to the level of an abuse of
discretion. This is because, even if the district court improperly applied that rule and should have
accepted the affidavit in full, PCC was still entitled to summary judgment. Cf. Lockard, 52 F. App’x
at 790 (“More importantly, even if the district court had acted improperly in granting [the
defendant’s] motion to strike, any error would not change the disposition of the present case.”).
Under Ohio law, an oral modification to a written contract, other than a contract for the sale
of goods, must be supported by additional consideration to be binding. Valmac Industries, Inc. v.
Ecotech Machinery, Inc., 738 N.E.2d 873, 875 (Ohio Ct. App. 2000) (applying this rule in assessing
the validity of a forum-selection clause); see also Richland Builders v. Thome, 100 N.E.2d 433, 437
(Ohio Ct. App. 1950) (“An oral agreement, to have the effect to alter or modify the terms of a prior
written contract, must be a valid and binding contract of itself, resting upon some new and distinct
consideration.”). Consideration is defined as “bargained for legal benefit and/or detriment.”
Kostelnik v. Helper, 770 N.E.2d 58, 61 (Ohio 2002) (citation omitted). “[E]ither a detriment to the
No. 05-3864 Aerel, S.R.L. v. PCC Airfoils, L.L.C. Page 10
promisee or a benefit to the promisor” suffices to establish consideration under Ohio law. Ford v.
Tandy Transp., Inc., 620 N.E.2d 996, 1009 (Ohio Ct. App. 1993).
In the present case, PCC’s alleged post-signing promise to pay the disputed commissions is
not supported by “new and distinct consideration.” See Richland Builders, 100 N.E.2d at 437. The
purported promise to pay was not exchanged for anything that benefitted PCC or caused a detriment
to Aerel. See Ford, 620 N.E.2d at 1009. Instead, the promise—if in fact it was made—would
constitute a one-sided deal in which PCC gratuitously agreed to pay additional commissions for
services that Aerel had already agreed to provide in the written agreement. The result of such a deal
would not have been “regarded by [PCC] as beneficial enough to induce [its] promise.” See Carlisle
v. T & R Excavating, Inc., 704 N.E.2d 39, 43 (Ohio Ct. App. 1997) (holding that a husband’s desire
to help his wife’s business in order to increase marital income did not constitute consideration).
Aerel’s oral-modification argument therefore fails as a matter of law, entitling PCC to summary
judgment even if Cosentini’s affidavit should have been admitted in its entirety.
III. CONCLUSION
For all of the reasons set forth above, we AFFIRM the judgment of the district court.