Paul V. Ambrose, an individual who is a citizen of the Commonwealth of Pennsylvania v. KRAUSE PUBLICATIONS, INC., A Wisconsin Corporation Licensed to Conduct Business…

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-1513
PAUL V. AMBROSE, an individual who is
a citizen of the Commonwealth of Pennsylvania,
Appellant
v.
KRAUSE PUBLICATIONS, INC., A Wisconsin Corporation
Licensed to Conduct Business within the Commonwealth of Pennsylvania;
DAVID DOYLE, an individual who is a citizen of the State of Tennessee
KRAUSE PUBLICATIONS, INC., A Wisconsin Corporation
Licensed to Conduct Business within the Commonwealth of Pennsylvania;
DAVID DOYLE, an individual who is a citizen of the State of Tennessee,
Counter-Claimants
v.
AMBROSEBAUER TRAINS; PAUL V. AMBROSE, an
individual who is a citizen of the Commonwealth of Pennsylvania,
Counterclaim Defendants
On Appeal from the United States District Court
for the Western District of Pennsylvania
D.C. Civil Action No. 07-cv-00873
(Honorable Arthur J. Schwab)

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Nos. 08-2523, 08-2711 & 08-2806
PAUL V. AMBROSE, an individual who is
a citizen of the Commonwealth of Pennsylvania
v.
TRAIN COLLECTORS ASSOCIATION,
a Pennsylvania Non-Profit (Non Stock) Corporation;
EASTERN DIVISION - T.C.A.,
a Pennsylvania Non-Profit (Non Stock) Corporation,
Defendants/Third Party Plaintiffs
v.
KRAUSE PUBLICATIONS, INC.; DAVID DOYLE,
Third Party Defendants
Paul V. Ambrose, an individual who is a citizen
of the Commonwealth of Pennsylvania,
Appellant at No. 08-2523
Krause Publications, Inc.,
Cross-Appellant at No. 08-2711
Train Collectors Association and Eastern Division - T.C.A.,
Cross-Appellants at No. 08-2806
On Appeal from the United States District Court
for the Western District of Pennsylvania
D.C. Civil Action No. 07-cv-01248
(Honorable Arthur J. Schwab)
Argued November 2, 2009
Before: SCIRICA, Chief Judge, JORDAN and GREENBERG, Circuit Judges.

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(Filed : November 30, 2009)
DREW J. BAUER, ESQUIRE (ARGUED)
3555 Valley Drive #3
P.O. Office Box 14537
Pittsburgh, Pennsylvania 15234
Attorney for Appellant, Paul V. Ambrose
STEPHEN E. GILLEN, ESQUIRE (ARGUED)
Greenbaum Doll & McDonald
2900 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202
Attorney for Appellee/Cross-Appellant,
Krause Publications, Inc.
SUZANNE L. DeWALT, ESQUIRE (ARGUED)
STANLEY J. LEHMAN, ESQUIRE
BEVERLY A. BLOCK, ESQUIRE
Sherrard, German & Kelly
Two PNC Plaza, 28th Floor
620 Liberty Avenue
Pittsburgh, Pennsylvania 15222
Attorneys for Appellees/Cross-Appellants,
Train Collectors Association and Eastern Division - T.C.A.
OPINION OF THE COURT
SCIRICA, Chief Judge.
In 2007, Krause Publications, Inc. published two toy train catalogs authored by
David Doyle. Paul Ambrose brought a copyright infringement action against Krause and
Doyle claiming the catalogs infringed Ambrose’s copyrights in toy train catalogs and
books he authored (the “Doyle Action”). Within a few months, the parties settled all their

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Ambrose does not contend on appeal that the District Court erred by failing to find1
Krause in breach of the CSA. For ease of reference, we refer to Ambrose’s motion as a
motion to void the CSA.
The District Court had jurisdiction in both actions under 28 U.S.C. §§ 1331, 1332,2
1338, and 1400(a). We have jurisdiction under 28 U.S.C. § 1291.
4
claims, and the District Court dismissed the case with prejudice pursuant to the terms of
the parties’ Confidential Settlement Agreement (“CSA”).
At the time of settlement, Ambrose had a separate, but related copyright action
pending against the Train Collectors Association and Eastern Division – T.C.A.
(collectively, “TCA”) (the “TCA Action”). Paragraph 11 of the CSA permitted Ambrose
to seek relief from TCA in the TCA Action, “provided, however, that [Ambrose] [would]
not seek to collect from [TCA] any judgment on such claims if collection of such
judgment or part thereof might foreseeably lead to a claim for indemnification against
Krause . . . .” Shortly after the CSA was executed, TCA filed a third-party complaint
against Krause, asserting claims for indemnification and contribution. Krause then
sought leave in the Doyle Action to disclose in the TCA Action the terms of the CSA, and
Ambrose simultaneously filed a motion to void the CSA, or, in the alternative, to find
Krause in breach thereof. The District Court granted Krause’s motion to disclose the1
CSA and denied Ambrose’s motion to void it. TCA and Krause then moved for summary
judgment and partial summary judgment, respectively, based on the terms of the CSA.
The court granted both motions and entered judgment against Ambrose, finding the CSA
barred the TCA Action as a matter of law. We will affirm.2

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Ambrose contends his motion was a Rule 60(b)(3) motion for relief from a final3
judgment for fraud, misrepresentation, or misconduct, while Krause contends the motion
was brought pursuant to Rule 60(b)(1) for relief for mistake. Ambrose’s sole argument
for voiding the CSA was that there was no “meeting of the minds” with respect to
paragraph 11. Ambrose contended the parties had “substantial conflicting understandings
of the contractual language contained in Paragraph 11.” Because Ambrose’s motion
made no mention of fraud, misrepresentation, or misconduct by Krause, we will review
the motion under Rule 60(b)(1).
Ambrose asserted that he believed the restrictions contained in paragraph 11 would4
only be applicable once a judgment was entered and that Krause, whose counsel drafted
the CSA, either shared this belief or knew of Ambrose’s belief.
We review the District Court’s denial of Ambrose’s Rule 60(b) motion for abuse of5
discretion. Brown v. Philadelphia Housing Auth., 350 F.3d 338, 342 (3d Cir. 2003).
5
Ambrose filed a motion in the Doyle Action to declare the CSA void at his election
and to reopen the Doyle Action because there was no “meeting of the minds” regarding
whether Ambrose would be permitted to continue the TCA Action to judgment in the
event of an indemnification claim. Although Ambrose did not seek relief under any
particular Federal Rule of Civil Procedure, the parties agree his motion was in effect a
Rule 60(b) motion for relief from a final judgment. Ambrose contends he set forth3
“mutual and/or unilateral mistake that was known to both parties,” and that the District4
Court abused its discretion by denying his motion without holding a hearing, allowing
discovery, or issuing findings of fact and conclusions of law.5
The District Court’s dismissal of Ambrose’s motion was not an abuse of discretion
under the circumstances of this case. Rule 52(a)(3) provides the court is not required to
state findings or conclusions when ruling on a motion unless the rules provide otherwise,

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The parties agree that Pennsylvania law applies to this dispute.6
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and Rule 60(b) does not do so. See Fed. R. Civ. P. 52(a)(3); Fed. R. Civ. P. 60(b);
Delzona Corp. v. Sacks, 265 F.2d 157, 159-60 (3d Cir. 1959) (“Rule 52(a) . . . does not
require findings of fact and conclusions of law for cases arising under Rule 60(b).”).
Ambrose’s motion, moreover, failed as a matter of law, and thus did not require
resolution of factual issues. Ordinary principles of contract law govern settlement
agreements under Pennsylvania law. Consol. Rail Corp. v. Portlight, Inc., 188 F.3d 93,6
96 (3d Cir. 1999). A mistake of one or both parties at the time of contracting may be a
valid ground for rescinding a settlement agreement. See id.; Lanci v. Metro. Ins. Co., 564
A.2d 972, 974 (Pa. Super. Ct. 1989). “A mistake is a belief that is not in accord with the
facts.” Restatement (Second) of Contracts § 151; see also Consol. Rail Corp., 188 F.3d
at 96 (“‘Mutual mistake exists where both parties to a contract are mistaken as to existing
facts at the time of execution.’” (quoting Holt v. Dep’t of Pub. Welfare, 678 A.2d 421,
423 (Pa. Commw. Ct. 1996))).
Ambrose’s argument misunderstands the nature of the mistake doctrine. In his
motion to void the CSA, he did not contend that he executed the CSA under a belief that
was not in accord with the facts. Instead, Ambrose set forth his interpretation of
paragraph 11. Stated differently, Ambrose raised a dispute over the meaning of a
particular provision in the CSA. “Disputes over the meaning of a given phrase are
common in contract disputes; the presence of such interpretive ambiguity, however, does

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Our review of an order granting summary judgment is plenary, and we apply the7
same standard as the District Court. Am. Eagle Outfitters, 584 F.3d at 580-81. Summary
judgment should be granted “if the pleadings, the discovery and disclosure materials on
file, and any affidavits show that there is no genuine issue as to any material fact and that
the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). “All
inferences must be drawn in the light most favorable to the nonmoving party.” Am. Eagle
Outfitters, 584 F.3d at 581 (citation omitted).
The District Court also determined paragraph 12 barred the TCA Action because8
TCA was one of the intended beneficiaries of paragraph 12's release provision. Because
we agree with the District Court that paragraph 11 barred the TCA Action once the
indemnification claim was asserted, we do not need to decide whether the District Court
properly interpreted paragraph 12.
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not go to whether the contract is enforceable, but rather who (the judge or the jury) must
decide what the given clause means.” Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d
585-86 (3d Cir. 2009). “To hold otherwise would improperly transform run-of-the-mill
challenges to the interpretation of contractual language into far more significant disputes
over contractual enforceability.” Id. at 586. Because Ambrose did not allege a “mistake”
that could void the CSA, the District Court did not abuse its discretion by denying his
motion.
Ambrose’s dispute over the meaning of paragraph 11 was addressed by the District
Court in its grant of summary judgment in favor of TCA, which Ambrose also
challenges. The District Court determined the CSA unambiguously barred the TCA7
Action as a matter of law once TCA asserted its indemnification claim against Krause.8
Ambrose contends paragraph 11 contained ambiguous language because he believed the
provision that he would not “seek to collect” any judgment meant “execute” a judgment.

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Under Ambrose’s interpretation, he would be permitted to continue the TCA Action to
judgment, and only upon judgment would he be prohibited from executing the judgment
“if collection . . . might foreseeably lead to a claim for indemnification against Krause.”
Ambrose contends the District Court erred by failing to identify this ambiguity and
consider the parol evidence he offered.
Ambrose’s argument is without merit. “When a written contract is clear and
unequivocal, its meaning must be determined by its contents alone.” Mellon Bank, N.A. v.
Aetna Bus. Credit, Inc., 619 F.2d 1001, 1010 (3d Cir. 1980) (citation omitted); Mace v.
Atl. Ref. & Mktg. Corp., 785 A.2d 491, 496 (Pa. 2001). A contract is ambiguous if it is
reasonably susceptible to different constructions and capable of being understood in more
than one sense. St. Paul Fire & Marine Ins. Co. v. Lewis, 935 F.2d 1428, 1431 (3d Cir.
1991). Under Pennsylvania law, ambiguous contracts are interpreted by the trier of fact,
and unambiguous contracts are interpreted by the court as a matter of law. Mellon Bank,
619 F.2d at 1011 n.10. We agree with the District Court’s conclusion that paragraph 11
unambiguously barred Ambrose from obtaining any judgment from TCA once the

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Ambrose further contends the District Court erred by dismissing his state law claims9
because they were not impacted by the CSA. The Amended Complaint included state law
claims for unfair trade practices (Count V), civil conspiracy (Count VI), breach of
contract (Count VIII), and for a declaratory judgment (Count IX). To the extent any of
these claims were not dismissed as barred by the CSA, they were dismissed without
prejudice as the District Court declined to exercise jurisdiction over any pendent state law
claims.
Krause and TCA bring separate appeals. Krause challenges the District Court’s10
order denying its motion for leave to file a counterclaim against TCA in the TCA Action.
A few hours before the court entered its summary judgment order, Krause filed a motion
for leave to file a counterclaim against TCA for negligence and breach of the duty of
good faith and fair dealing. The court denied Krause’s motion as moot, but in subsequent
orders explained that Krause’s motion was denied without prejudice for the counterclaims
to be filed in state court. The court expressly declined to exercise jurisdiction over any
pendent state law claims. Krause’s appeal is without merit. “A district court may decline
to exercise supplemental jurisdiction over a claim if ‘the district court has dismissed all
claims over which it has original jurisdiction.’” Elkadrawy v. Vanguard Group, Inc., 584
F.3d 169, 174 (3d Cir. 2009) (quoting 28 U.S.C. § 1367(c)(3)). Because the District
Court had dismissed Ambrose’s federal claims, it did not abuse its discretion by denying
Krause’s motion without prejudice for the state law counterclaims to be filed in state
court.
TCA contends its third-party complaint against Krause contained state law claims
distinct from its claims for indemnification and contribution. We have reviewed the
third-party complaint. The only claims asserted are for indemnification and contribution.
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indemnification claim was asserted. Accordingly, we will affirm the judgment of the9
District Court.10

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