                                                                 NOT PRECEDENTIAL

                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                  __________

                                      No. 12-2228
                                      No. 12-2357
                                      __________

                                GF PRINCETON, L.L.C.,

                           Appellant in 12-2357/Cross-Appellee in 12-2228

                                            v.

                           HERRING LAND GROUP, L.L.C.,

                              Appellant in 12-2228/Cross-Appellee in 12-2357
                                     __________

                 On Appeal from the United States District Court for the
                                District of New Jersey
                         (District Court No. 3-06-cv-02585)
                        District Judge: Hon. Mary L. Cooper
                                     __________

                       Submitted under Third Circuit LAR 34.1(a)
                                  February 12, 2013

  Before: HARDIMAN and ALDISERT, Circuit Judges, and STARK, District Judge.

                                (Filed: February 27, 2013)

                                      __________

                              OPINION OF THE COURT
                                    __________



         Honorable Leonard P. Stark, Judge of the United States District Court for the
District of Delaware, sitting by designation.
STARK, District Judge.

          In these consolidated appeals, both parties appeal aspects of the district court‟s

determinations following a two-step bench trial. Because we find no error, we will

affirm.

                                                 I

          As we write primarily for the parties, who are familiar with the record, we limit

our discussion of the factual and procedural background to only what is necessary for our

resolution of the issues on appeal.

          By agreement dated December 27, 1985 (the “Ground Lease”), non-parties New

Jersey National Bank (“NJNB”) and Textron Financial-New Jersey, Inc. (“Textron”)

agreed that NJNB, as Ground Lessor, would lease to Textron, as Ground Lessee, certain

land and improvements. As pertinent here, the Ground Lease applied to land known as

370 Scotch Road, Ewing, New Jersey (the “Subject Property”). Specifically, the Subject

Property consisted of approximately 16 acres, improved with two buildings having

approximately 179,000 square feet of office space (the “Improvements”). NJNB and

Textron entered into a second lease agreement (the “Improvements Lease” and,

collectively with the Ground Lease, the “Leases”), also dated December 27, 1985.
          In January 2006, Appellant/Cross-Appellee, Herring Land Group, L.L.C.

(“Herring”), became successor to NJNB under the Leases. Separately, in December

2007, Appellee/Cross-Appellant GF Princeton, L.L.C. (“GF Princeton”), became

successor to Textron under the Leases and acquired the two buildings on the Subject

Property.

          Beginning on January 14, 2006, Paragraph 4 of the Ground Lease called for the

Ground Lessee to pay the Ground Lessor the fair market value of the Subject Property,


                                                 2
determined in five-year intervals (the “Ground Rent”). If the Ground Lessee and Ground

Lessor were not able to reach an agreement on the fair market value within sixty days,

Section 16 of the Improvements Lease provided for an appraisal process. Specifically,

Section 16 provides that:
             . . . Lessor and Lessee shall each appoint an appraiser within
             10 days of their failure to agree, and the fair market value
             shall be determined by the two appraisers so appointed within
             45 days of appointment. If the two appraisers so appointed
             shall be unable to agree upon fair market value, fair market
             value shall be the average of the amounts determined by the
             appraisers if the greater of such amounts is no more than
             105% of the lesser of such amounts. If the greater of such
             amounts shall exceed 105% of the lesser of such amounts, a
             determination shall be made by a third appraiser, who shall be
             selected within 10 days by the two appraisers appointed by
             the parties hereto. Such determination shall be made by the
             third appraiser within 45 days of his appointment. In such
             event, fair market value shall be in the average of the two
             closest appraised amounts . . . .
(JA12)

       On June 8, 2006, Textron filed suit against Herring in the District of New Jersey,

seeking a declaratory judgment as to the proper methodology to be used by the appraisers

in setting the Ground Rent for the period from January 14, 2006 to January 14, 2011.1

Prior to filing suit, Textron had provided Herring with an appraisal (the “Textron

Appraisal”), but Herring had chosen not to provide an appraisal. On August 1, 2006,
Herring answered Textron‟s complaint and filed counterclaims, including one seeking

specific enforcement of the appraisal provisions of the Ground Lease. Subsequently, in

an amended complaint, Textron added a claim for breach of contract, based on Herring‟s


       1
       The parties are presently engaged in litigation in the New Jersey Superior Court,
Chancery Division, General Equity Part, Mercer County, relating to the appraisal period
from January 14, 2011 to January 14, 2016.
                                            3
failure to deliver an appraisal. Eventually, on October 2, 2007, in connection with

discovery in the litigation, Herring provided Textron an appraisal (the “Herring

Appraisal”).

       In February 2008, GF Princeton moved to substitute for Textron, as GF Princeton

had assumed all of Textron‟s rights and interests under the Ground Lease. In October

2008, after considering Herring‟s opposition, the district court substituted GF Princeton

for Textron. Shortly thereafter, GF Princeton moved for leave to file a second amended

complaint. The district court denied this request.

       In February 2009, GF Princeton entered into an agreement to lease a portion of the

Improvements to Scotch Road Trust, L.L.C., for use and occupancy by Vantage

Communications. Pursuant to this lease agreement, GF Princeton recognized limited

revenue between February 2009 and January 2011.

       Trial proceeded in two phases. During Phase I, held between December 2010 and

March 2011, the district court heard evidence regarding the parties‟ dispute as to the

correct methodology for determining the Ground Rent for the 2006 to 2011 period. In

order to gain an understanding of the appraisal process, the Court ordered the parties‟

appraisers to select a third appraiser. They selected Peter Korpacz, who prepared his own
appraisal (the “Korpacz Appraisal”).

       On June 29, 2011, the district court issued an extensive opinion. It determined

that the appraisal process for the 2006 to 2011 period should be completed, the Textron

Appraisal used the correct methodology, and the Herring Appraisal had used an improper

methodology. The district court directed Herring to provide a new appraisal. On July 19,

2011, Herring designated a new appraiser and, on September 9, 2011, Herring delivered

to GF Princeton its revised appraisal (the “Herring Revised Appraisal”).


                                             4
       Phase II of the trial was held in August and September 2011. It concerned GF

Princeton‟s claim for breach of contract and Herring‟s counterclaim for rent due under

the Ground Lease. On March 30, 2012, the district court issued another extensive

opinion, dismissing both parties‟ claims. These appeals followed.

                                              II

       The district court had jurisdiction pursuant to 28 U.S.C. § 1332. We have

jurisdiction to review the district court‟s entry of final judgment pursuant to 28 U.S.C.

§ 1291.

       We review the district court‟s factual findings following trial for clear error and its

conclusions of law de novo. See Sec‟y of Labor v. Doyle, 675 F.3d 187, 199 (3d Cir.

2012). We review the district court‟s evidentiary decisions, refusal of leave to amend,

and weighing of the equities for abuse of discretion. See Stecyk v. Bell Helicopter

Textron, Inc., 295 F.3d 408, 412 (3d Cir. 2002); Cureton v. Nat‟l Collegiate Athletic

Ass‟n, 252 F.3d 267, 272 (3d Cir. 2001); Sheet Metal Workers‟ Int‟l Ass‟n Local 19 v.

Herre Bros., Inc., 201 F.3d 231, 249 (3d Cir. 1999).

                                             III

       Herring appeals the district court‟s denial of its claim for equitable relief, which
seeks enforcement of the Ground Lease for the payment of Ground Rent. For the reasons

discussed below, we will affirm the district court.2


       2
        Herring seeks payment of annual Ground Rent due under the Ground Lease by
GF Princeton for the 2006 to 2011 period. Specifically, Herring seeks judgment in the
amount of $1,306,650, which is five years of annual rent as calculated by averaging the
Textron Appraisal and the Korpacz Appraisal. Herring has agreed to waive its right to
complete the appraisal process for 2006 to 2011, which would arguably allow it to submit
the Herring Revised Appraisal, or possibly yet another new appraisal, to be factored into
the determination of the annual Ground Rent.
                                              5
       In seeking specific performance of a contract, Herring had the burden of

demonstrating: (i) the contract at issue is valid and enforceable; (ii) the terms of the

contract are sufficiently clear, such that the court can determine, with reasonable

certainty, each party‟s duties and the conditions under which those duties arise; and

(iii) an order compelling performance would not be “harsh or oppressive.” See Marioni

v. 94 Broadway, Inc., 866 A.2d 208, 214-15 (N.J. Super. Ct. App. Div. 2005).3 The

district court concluded that Herring failed to meet its burden on the second prong,

explaining: “When Herring filed the Counterclaim, the contractual terms at issue – that is,

the appraisal process set forth by Paragraph 4 of the Ground Lease and Section 16 of the

Improvements Lease – were not „sufficiently clear‟ and „reasonabl[y] certain[]‟, such that

the Court could readily determine „each parties‟ duties and the conditions under which‟

they arose.” (JA56)

       Herring insists that “[t]he question is not whether the terms were „sufficiently

clear‟ when [its] Counterclaim was filed, but whether the Court was ultimately able to

determine the parties‟ duties after trial.” (Herring Br. 19) (internal emphasis omitted)

Herring adds that there was never uncertainty as to the parties‟ duties but, rather,

uncertainty only as to the appraisal methodology for determining the Ground Rent.
       Herring cites no authority for the proposition that the relevant time at which to

assess the certainty of the contract terms is after trial, and we are not persuaded by its

arguments. The Ground Lease was silent as to the appraisal methodology. Into this

vacuum, Textron (later GF Princeton) provided an appraisal based on appraising the land

as encumbered by the then-existing improvements. Herring, by contrast, provided an

appraisal based on appraising the land as if it had been developed with a new, costly


       3
           The parties agree New Jersey law governs the interpretation of the Leases.
                                               6
development of an additional 400,000 square feet. As GF Princeton describes, “[i]t took

the [District] Court four (4) years of discovery and approximately six (6) days of trial

testimony from expert appraisers to sort through all of these issues and then . . . reject[]

Herring‟s assertions as to methodology.” (GF Princeton Br. 57) In seeking equity, it ill-

behooves Herring to have contested the appropriate methodology under the Leases,

placing before the district court a bona fide dispute requiring years of litigation to

resolve, and then to proclaim that the appraisal methodology adopted by the district court

– over Herring‟s vigorous objection – should be viewed as “reasonably certain.”

       Herring contends that the district court‟s decision “contravenes the purposes of the

Declaratory Judgment Act,” suggesting the district court treated the mere fact that

Herring had to file its counterclaim as sufficient evidence of uncertainty to bar Herring‟s

requested equitable relief. (Herring Br. 25) However, the district court did not rest its

decision on uncertainty alone. The district court also found support for its refusal to

order specific performance in other facts and equitable factors which, “taken together, . . .

„pour content‟ into [the] decision, because the parties have demonstrated that enforcing

the parties‟ contract . . . would lie against the equities.” (JA60) These other

considerations included: (1) the Ground Rent dispute prevented Textron and GF
Princeton from attracting tenants; (2) the only tenant Textron and GF Princeton secured

was given concessions, including decreased rent and favorable contract terms; (3) GF

Princeton bore all costs associated with the Subject Property; (4) GF Princeton‟s suit was

delayed by eight months due to Herring‟s unsuccessful opposition to GF Princeton‟s

motion to substitute; and (5) Herring‟s sole loss was its inability to collect Ground Rent.

       Herring challenges the district court‟s determination that the parties‟ dispute made

it nearly impossible for GF Princeton to attract tenants, which the district court based on


                                              7
the testimony of Sab Russo, GF Princeton‟s real estate broker. Herring contends that the

district court abused its discretion in permitting Russo‟s testimony, arguing that his

statements were inadmissible hearsay. Whether a statement is hearsay is a legal question

subject to plenary review. See United States v. Price, 458 F.3d 202, 205 (3d Cir. 2006).

“If the district court correctly classifies a statement as hearsay, its application of the

relevant hearsay exceptions is subject to review for abuse of discretion.” Id.

       Russo testified as follows:
             There was clearly, after a period of marketing this property,
             and it became well-known in the market that there was an
             issue with the ground rent on this property. When I first
             started with Textron, we followed the protocol on the lease,
             we got our appraisal done, and the idea was to get that issue
             behind us and establish a ground rent and be able to move on
             and know what we were marketing. Since we didn‟t really
             know what we were marketing, and the market was starting to
             understand that there was an issue there.
(JA5845-46) Russo‟s statement is his opinion as to customer motivations, including

discussions he had with prospective and/or actual tenants. Testimony as to customer

motivation is admissible as an exception to hearsay under Fed. R. Evid. 803(3). See

Callahan v. A.E.V., Inc., 182 F.3d 237, 251-52 (3d Cir. 1999).
       Herring‟s reliance on this Court‟s decision in Stelwagon Mfg. Co. v. Tarmac

Roofing Sys., Inc., 63 F.3d 1267, 1274 (3d Cir. 1995), in which we found error in the

district court‟s admission of customer testimony elicited through plaintiff‟s employee, is
unavailing. As we explained subsequently in Callahan, the error in Stelwagon arose from

the facts that the customer testimony was being offered to prove the amount of business

lost to a competitor, and that no non-hearsay evidence had been introduced to establish

loss. See Callahan, 182 F.3d at 251-53. Here, in contrast to Stelwagon and analogous to

Callahan, Russo‟s testimony was offered “for the limited purpose of proving customer


                                               8
motive,” not to prove an amount of actual loss. See Callahan, 182 F.3d at 252. That is,

Russo‟s testimony went to whether tenants may have been discouraged from entering into

transactions with GF Princeton as a result of the unresolved issues over the Ground Rent.

Also, as in Callahan, GF Princeton corroborated its evidence of tenant motivation with

non-hearsay evidence. For example, in order to secure its sole tenancy with Vantage

Communications, GF Princeton had to make a number of concessions, including six

months of free rent, a below-market security deposit, and an escape provision allowing

Vantage Communications to terminate the lease nearly at will.

       The district court did not abuse its discretion in permitting Russo‟s testimony. Nor

has Herring demonstrated that the district court abused its discretion in any other respect

in denying Herring equitable relief. Thus, we will affirm the district court‟s disposition

of Herring‟s claims.

                                              IV

       We now turn to the issues presented by GF Princeton in its appeal.

                                              A

       The district court properly dismissed GF Princeton‟s breach of contract claim

based on the timing of GF Princeton‟s filing. The district court‟s finding that Textron‟s
filing of suit on June 5, 2006 tolled the time for Herring to submit an appraisal is not

clearly erroneous,4 as we are not left with a “definite and firm conviction that a mistake

has been committed.” United States v. Igbonwa, 120 F.3d 437, 440 (3d Cir. 1997). The

“clearly erroneous” standard allows the reviewing court room “to consider whether there



       4
         The parties agree that this issue is reviewed for clear error. Even if, alternatively,
it is viewed as a matter of contract interpretation subject to de novo review, we would
reach the same conclusion.
                                               9
is enough evidence in the record to support the factual findings of the district court.” Id.

at 441.

          Herring and Textron began negotiating the Ground Rent on January 25, 2006, and

met on February 16, 2006 for further discussions. At the time, the parties advised each

other as to their positions on the appraisal process they sought to apply: Textron would

appraise based on the then-existing state of the Subject Property, while Herring would

appraise based on the potential development of the Subject Property. The parties were

not able to reach an agreement during their February meeting, and Textron engaged an

appraiser who eventually prepared the Textron Appraisal. Thereafter, the parties

continued to negotiate, discussing the Ground Rent during two telephone conference calls

in March 2006 and again in two letters exchanged in May 2006.

          In particular, by letter dated May 10, 2006, Textron‟s counsel advised Herring‟s

counsel, “we are willing to continue settlement discussions only for an additional two (2)

weeks from the date we send you the appraisal.” (JA29) Herring believed the letter was

a further attempt to resolve the dispute through negotiations; Herring did not interpret the

letter as Textron‟s invocation of the Section 16 appraisal process. Then, on May 22,

2006, as the parties were still in discussions, Textron provided Herring with the Textron
Appraisal. When the parties failed to reach an agreement within the two weeks after May

22, 2006 – that is, by June 5, 2006 – then, consistent with Textron‟s May 10 and 22

letters, negotiations were over. On June 7, 2006, Herring retained an appraiser, although

it did not inform Textron it had done so.

          Pursuant to the Section 16 of the Improvements Lease, Herring had a period of ten

days from the date of the parties‟ “failure to agree” on the fair market value in which to

appoint an appraiser. As Textron had concluded on June 5, 2006 that the parties failed to


                                              10
agree, Herring had until June 15, 2006 to appoint an appraiser. Yet, Textron filed suit

prematurely on June 8, 2006, a date on which Herring still had a week left to appoint its

appraiser. On this basis, the district court concluded Herring did not breach the contract.

We agree.

       Contrary to GF Princeton‟s protestations, the district court‟s decision does not

result in, as GF Princeton argues, “the wrongdoer [being] rewarded for its own

misconduct.” (GF Princeton Br. 26) Nothing in GF Princeton‟s lengthy briefing

provides any reason to find Herring in breach of a contractual deadline that had not yet

expired.

       Moreover, the district court did not, as GF Princeton suggests, rule that the

pendency of the litigation made it impossible for Herring to comply with the Ground

Lease and provide its own appraisal. Instead, the district court found that it was

reasonable for Herring, after being sued, to wait to produce its appraisal until after the

district court determined the appropriate appraisal methodology, as this was the very

dispute placed before the court by GF Princeton. (JA53) (“Without some resolution of

the methodology question, appointing appraisers or producing appraisal reports would

have been a fruitless endeavor in either May or June 2006.”) Thus, we find no error in
the district court‟s dismissal of GF Princeton‟s breach of contract claim.5

                                              B

       As we are affirming the district court‟s dismissal of GF Princeton‟s breach of

contract claim, there is no need to reach GF Princeton‟s contention that the district court

erred by not awarding GF Princeton affirmative damages. See Murphy v. Implicito, 920

       5
        GF Princeton argues that the district court failed to consider the “covenant of
quiet enjoyment.” For the same reasons Herring was not in breach of the contract, it also
did not breach GF Princeton‟s right to quiet enjoyment.
                                             11
A.2d 678, 689 (N.J. Super. Ct. App. Div. 2007); see also Weatherford v. Bursey, 429

U.S. 545, 564 n.3 (1977) (declining to assess damages where there is no liability). For

the same reason, there is no need to address GF Princeton‟s lengthy challenges to the

district court‟s decisions regarding damages evidence.

                                                C

       Finally, GF Princeton contends that the district court should have permitted it to

file a second amended complaint, after GF Princeton was allowed into the case and

substituted as plaintiff in October 2008. However, GF Princeton “stands in the shoes” of

Textron. A party stepping into the shoes of its predecessor takes over the original

litigant‟s position and decisions. See Brook, Weiner, Sered, Kreger & Weinberg v.

Rankin, 53 F.3d 851, 852 (7th Cir. 1995); see also Adels v. Bierbach, 2011 WL 1457132,

at *5 (M.D. Pa. Apr. 15, 2011) (stating that substituted party stands in shoes and assumes

responsibility of original litigant). “Any other approach would make a shambles of

litigation; a party could sell its interest or change its internal structure . . . and require the

court to start the case from scratch.” Brook, 53 F.3d at 852.

       Magistrate Judge Bongiovanni denied GF Princeton‟s motion for leave to file a

second amended complaint after weighing a number of factors. She began her analysis
by noting that while motions for leave to amend are “freely given, there are limits to the

Court‟s leniency.” (JA546) GF Princeton sought to add new factual allegations, new

claims for damages, and new causes of action. If the motion was granted, it would

require the court to reopen fact discovery, which would undoubtedly delay resolution of

the matter, increasing costs. GF Princeton had failed to show that Textron could not have

filed the claims GF Princeton now proposed to add. While no trial date had yet been set,

the case was otherwise ready for dispositive motions and had been pending for more than


                                                12
a year when GF Princeton first sought to be added to the case. The district court did not

abuse its discretion in affirming the Magistrate Judge‟s decision to deny leave to amend.

                                            V

      For the reasons stated, we will affirm the district court‟s judgment.




                                            13
