Summary of Contractor Utility Sales v. Certain-Teed Products, 638 F. 2d 1061 (1981)

Relevant Facts: Pl, CUSCo, was a distributor of vinyl pipe and the Df was the manufacturer.  The Pl alleged in its original complaint that the Df fraudulently misrepresented the fact that it would grant an exclusive sales territory and maintain the Pl on the same status as other agents/distributors of the Df regarding price availability of materials, then the Pl amended its complaint an alleged only that Certain-teed induced Pl to execute the sales agreement by fraudulently representing the Df would keep Pl ‘competitive w/ his contractor-customers in the rural water market.’  Df sought to introduce the original complaint as a material admission by the majority shareholder of CUSCo that the Df only promised to treat the Pl the same as other agents, and because of the inconsistency with the final complaint, the inconsistency was relevant for impeachment of the witness.

Legal Issue(s): Whether the d. ct properly excluded portions of Pl’s original complaint where the Pl had admitted relevant issues related to breach of contract and fraud by claiming those portions were hearsay?

Court’s Holding: Yes, Although amending the complaint removed the conclusive effect of the admission, the party could not avoid the evidentiary use of the statement by claiming that it was hearsay.

Procedure: The D. Ct. concluded that despite the inconsistencies between the pleadings, the superseded pleadings are inadmissible.  Ct. of App. The exclusion was prejudicial and reversible error.

Law or Rule(s):  801(d)(2) A statement is not hearsay if the statement is offered against a party and is (A) the party’s own statement, in either an individual or representative capacity;

Rationale: The trial court found some inconsistency between the pleadings where the Pl first claimed that the Df promised to keep Cusco “competitive” and then to treat the Pl the same as others. The apparent conflict in the Plaintiff’s complaints is material and significant.  Introduction of the prior complaint is an understandable and legitimate means of impeaching the majority shareholder’s testimony.  The inconsistency between the admissions between the Complaints was critical to Cusco’s fraud claim.  Although prior pleadings cease to be conclusive judicial admissions, they are admissible in a civil action as evidentiary admissions. . . .When a pleading is amended or withdrawn, the superceded portion ceased to be a judicial admission, but it still remains as a statement once seriously made by an authorized agent, and as such it is competent evidence of the facts stated, though controvertible, like any other extrajudicial admission made by a party or his agent.