### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 16

‐ 1871

E STATE OF W ILLIAM J. B URFORD

, Plaintiff

‐ Appellant

,

v.

A CCOUNTING P RACTICE S ALES

, I NC

. and G ARY L. H OLMES

, Defendants

‐ Appellees

.

____________________

Appeal from the United States District Court for the

Southern District of Illinois.

No. 12

‐ cv

‐ 01212

‐ JPG

‐ SCW

— J. Phil Gilbert

, Judge

.

____________________

A RGUED J ANUARY 12, 2017

— D ECIDED M ARCH 13, 2017

____________________

Before B AUER

, S YKES

, and H AMILTON

, Circuit Judges

.

H AMILTON

, Circuit Judge

. Defendant Accounting Practice

Sales (APS) terminated its brokerage contract with William

Burford after he failed, in his exclusive territory for APS, to

meet his minimum yearly sales volume for four consecutive

years. Burford sued. APS defended on the grounds that Bur

‐

ford failed to meet his sales requirement and that his contract

was terminable at will. The case was tried after an earlier ap

‐ peal in the case, and the jury ruled in favor of APS. While this2 No. 16

‐ 1871

appeal by Burford was pending, he passed away. His estate

has carried on the appeal, arguing that the district court erred

by permi tt ing APS to defend on the basis of Burford’s failure

to meet his sales volume requirement, by refusing to admit an

exhibit, and by refusing to order a new trial on the theory that

the jury verdict was contrary to the weight of the evidence as

to whether APS waived its right to terminate the contract.

None of these arguments warrants a new trial. We a ffi rm the

judgment of the district court in favor of APS.

I. Factual and Procedural Background

Defendant APS acts as a broker for the purchase and sale

of accounting practices. APS works through brokers who are

treated as independent contractors and are assigned exclusive

sales territories for APS. The brokers and APS share commis

‐

sions for successful sales. Plainti ff Burford became a broker

for APS in 2003, and over the next several years, he and APS

agreed to add additional states as part of his exclusive terri

‐

tory. Burford’s contract included a “minimum yearly sales

volume” requirement. On appeal, the parties do not dispute

that Burford did not meet this requirement for four consecu

‐

tive years.

In March 2010, APS owner Gary Holmes spoke with Bur

‐

ford about his poor performance. Burford acknowledged that

he needed to improve, but he failed to meet his minimum

yearly sales volume requirements again in 2010 and 2011. In

2012, APS terminated Burford’s contract and reassigned his

sales territory.

Burford brought suit in an Illinois state court, claiming

that APS breached his contract by terminating it without the

required good cause. He also sought to pierce the corporateNo. 16

‐ 1871 3

veil to hold Holmes personally liable for the breach. The dis

‐

trict court granted summary judgment in favor of the defend

‐

ants on the theory that Burford’s contract with APS was ter

‐

minable at will. In the earlier appeal, we reversed on that

point, fi nding that the contract’s provision that “APS cannot

terminate this agreement unless it is violated by Burford”

meant that the contract was not terminable at will. Burford v.

Accounting Practice Sales, Inc.

, 786 F.3d 582, 587–88 (7th Cir.

2015). We remanded for trial on the contract claim. The jury

found for APS, and the district court entered judgment on the

verdict.

On appeal, Burford raises three issues. First, he claims that

the trial court erred by supposedly allowing APS to change

the legal theory for its defense in violation of the “mend

‐ the

‐

hold” doctrine in Illinois law. Second, Burford argues that the

district court abused its discretion by denying admission of

an exhibit. Third, he claims that the jury’s verdict was con

‐

trary to the weight of the evidence on whether APS waived its

right to enforce the minimum sales requirement.

II

. Analysis

“Mend the Hold”

Burford’s fi rst argument on appeal is that APS should not

have been allowed to assert its defense that it terminated Bur

‐

ford’s contract for good cause since he had missed his mini

‐

mum sales requirements for several years. Burford’s theory is

a variation of the “mend

‐ the

‐ hold” doctrine in Illinois law.

That doctrine, which takes its name from a nineteenth

‐ cen

‐

tury wrestling phrase, is less a set of rules than a fl exible con

‐

cept of equity. It prevents one party to litigation, especially in4 No. 16

‐ 1871

contract disputes, from trying to change its position or theo

‐

ries at such a late stage in the dispute as to cause unfair prej

‐

udice to the opposing party. See Harbor Ins. Co. v. Continental

Bank Corp.

, 922 F.2d 357, 362 (7th Cir. 1990) (“[W]here a party

gives a reason for his conduct and decision touching any thing

involved in a controversy, he cannot, after litigation has be

‐

gun, change his ground, and put his conduct upon another

and a di ff erent consideration. He is not permi tt ed thus to

mend his hold.”), quoting Ohio & Mississippi Railway Co. v.

McCarthy

, 96 U.S. 258, 267–68 (1877); see also Ryerson Inc. v.

Federal Ins. Co

., 676 F.3d 610, 614 (7th Cir. 2012) (collecting

cases); Horwi tz‐ Ma tt hews, Inc. v. City of Chicago

, 78 F.3d 1248,

1251 (7th Cir. 1996); FHP Tectonics Corp. v. American Home As

‐

surance Co.

, 57 N.E.3d 575, 587–88 (Ill. App. 2016) (declining

to apply doctrine in absence of unfair surprise or arbitrari

‐ ness). The doctrine seems to correlate fairly closely to federal

courts’ approach to e ff orts to amend pleadings under Federal

Rule of Civil Procedure 15. The doctrine also lies close to the

boundary between ma tt ers of substance and procedure for

purposes of Erie Railroad Co. v. Tompkins

. See Harbor Insurance

,

922 F.2d at 363–65.

Whatever the scope of the mend

‐ the

‐ hold doctrine, and

whether it is procedural or substantive, it does not help Bur

‐

ford in this case. From its earliest discovery responses, APS

advanced two central arguments in defense: fi rst, it termi

‐

nated Burford’s contract for good cause because he failed to

meet his minimum yearly sales volume, and second, the

agreement was terminable at will. Dkt. No. 129, Ex. 1 at 4 (re

‐

sponse to interrogatories).

Burford bases his mend

‐ the

‐ hold argument on the strat

‐

egy APS pursued, but that strategy was perfectly reasonableNo. 16

‐ 1871 5

and not unfair in any way to Burford. It is easy to imagine that

a motion for summary judgment based on Burford’s failure to

meet his sales volume requirements could quickly bog down

in disputes about accounting, waiver, and competing equities.

APS chose instead to move for summary judgment on the nar

‐

row ground that its contract with Burford was terminable at

will. There was nothing unfair or unsound about that strate

‐ gic choice, and the district court granted summary judgment

for APS on that basis. We reversed in the earlier appeal, hold

‐ ing that the contract was not terminable at will. Burford

, 786

F.3d at 588.

It is not unusual or unfair for a defendant who believes he

has a solid legal defense to assert that defense fi rst in a Rule

12(b)(6) motion or summary judgment motion in the hope of

winning an early and relatively inexpensive victory. Filing ei

‐

ther sort of motion simply does not waive other defenses that

may be available to that party. (Consider for a moment the

consequences of a contrary ruling on that point, treating as

waived a substantive defense that the defendant did not in

‐

clude in a summary judgment motion. That rule would create

powerful incentives for defendants to load up summary judg

‐

ment motions with all of their defenses, including theories

that would have no hope on summary judgment even though

they might be winners at trial. Imagine the costs and burdens

for civil litigation, in return for no apparent bene fi t. And Rule

56 has no such waiver rule, as compared to Rule 12(h).)

In the trial after remand, APS pursued its alternative, more

fact

‐ centered defense, arguing that it had good cause to ter

‐

minate the contract because Burford had failed for several

years to meet his minimum yearly sales volume. Burford at

‐ tempted to block this route, arguing in a motion in limine that6 No. 16

‐ 1871

APS could not assert any defense other than the terminable

‐

at

‐ will defense without violating the “mend

‐ the

‐ hold” doc

‐

trine. The district court denied that motion. Burford’s claim

went to trial, and the jury returned a verdict in favor of APS.

Even the most aggressive versions of the mend

‐ the

‐ hold

doctrine would not block APS from proving it had good cause

to terminate Burford’s contract. APS did not change its de

‐

fense. APS maintained two defense theories from the start,

and they are not inconsistent with each other (though a party

is allowed to pursue even inconsistent theories for its claims

or defenses, see Fed. R. Civ. P. 8(d)). In addition, there was no

prejudice to Burford, who was not surprised by APS’s argu

‐

ment that it terminated him for cause. See Dkt. No. 73 at 3

(transcript from Nov. 1, 2013 pretrial conference where Bur

‐

ford’s counsel identi fi ed cause to terminate as a key issue); see

also Ryerson Inc.

, 676 F.3d at 614 (“When there is no prejudice

to the opposing party, invoking the doctrine of mend the hold

to bar a valid defense is overkill.”). The district court did not

err by allowing APS to defend its termination for cause.

B. Trial Exhibit 13

Burford next argues that the district court erred when it

did not admit his Exhibit 13, which was a document that Gary

Holmes sent to APS brokers in 2010 to answer frequently

asked questions about APS’s proposed transition into a fran

‐

chise operation. One answer in the document said: “There

will be a minimum production requirement. This has been

discussed but never really enforced. But it is time that territo

‐

ries all be productive. This will not a ff ect all brokers but will

some.” While Burford had rejected APS’s franchise overtures,

he argues the document was nonetheless relevant to show

that APS had waived its right to enforce its minimum yearlyNo. 16

‐ 1871 7

sales requirement. We review such an evidentiary ruling only

for abuse of discretion. Morgan v. City of Chicago

, 822 F.3d 317,

338 (7th Cir. 2016).

The district court did not abuse its discretion by denying

admission of Exhibit 13. Federal Rule of Evidence 403 pro

‐

vides: “The court may exclude relevant evidence if its proba

‐

tive value is substantially outweighed by a danger of

... un

‐

due delay, wasting time, or needlessly presenting cumulative

evidence.” While Exhibit 13 may have been relevant, its exclu

‐

sion was not an abuse of discretion because it would have

been needlessly cumulative.

Burford sought to introduce Exhibit 13 to prove that APS

had not previously enforced the minimum sales volume re

‐ quirement in his contract. His theory was that APS had

waived its right to terminate for such failures. Burford argued

that Exhibit 13 “related only to what APS had admi tt edly

done previously in not enforcing any minimum production

requirement.” However, this point was not in real dispute.

The issue at trial was not whether APS had enforced the min

‐

imum yearly sales volume in the past; it clearly had not. Gary

Holmes himself readily testi fi ed to this e ff ect. The real dispute

at trial was whether APS’s earlier failure to enforce the sales

requirement amounted to an implicit waiver of its right to en

‐

force the sales requirement later.

Burford himself acknowledged that APS’s past non

‐ en

‐

forcement was well established at trial: “there was ample and

conclusive testimony at trial to establish that APS had waived

the minimum yearly sales volume.” Whether the earlier fail

‐

ure to enforce minimum sales requirements amounted to a

waiver was controversial, but not the point from Exhibit 13

that the requirements had not been enforced in the past. Since8 No. 16

‐ 1871

this point was already established, it was not unreasonable for

the court to exclude Exhibit 13 as cumulative under Rule 403,

and Burford’s substantial rights were not a ff ected by the ex

‐

clusion. See Fed. R. Civ. P. 61.

C. Su ffi ciency of the Evidence

Finally, Burford argues that the jury’s verdict was contrary

to the weight of the evidence because there was “overwhelm

‐ ing and indisputable evidence of waiver.” Waiver is “the in

‐

tentional relinquishment of a known right, [and it] can arise

either expressly or by conduct inconsistent with an intent to

enforce the right.” Wald v. Chicago Shippers Ass’n

, 529 N.E.2d

1138, 1147 (Ill. App. 1988) (Illinois contract law). Burford

sought to establish waiver by showing that APS could have

terminated him sooner but did not do so.

We review for abuse of discretion the district court’s ruling

on a Rule 59 motion for a new trial. Davis v. Wisconsin Dep’t of

Corrections

, 445 F.3d 971, 979 (7th Cir. 2006), citing Latino v.

Kaizer

, 58 F.3d 310, 314 (7th Cir. 1995). A new trial should be

granted “only when the record shows that the jury’s verdict

resulted in a miscarriage of justice or where the verdict, on the

record, cries out to be overturned or shocks our con

‐

science.” Id.

, citing Latino

, 58 F.3d at 314.

There was su ffi cient evidence here for the jury to fi nd that

APS did not waive its right to terminate Burford. The contract

gave APS the option to terminate its contract with Burford if

he failed to meet certain thresholds. It did not require APS to

fi re Burford in such instances. When we last considered this

contract, we said: “APS could terminate the contract only if

Burford violated it. There is a decisive di ff erence between say

‐ ing that A may terminate if B breaches and saying that A mayNo. 16

‐ 1871 9

terminate only if B breaches.” Burford

, 786 F.3d at 587. At that

point, we made this distinction to show that APS could fi re

Burford only for cause, not at will.

Those same terms in the contract illustrate a di ff erent but

equally valid point: saying that A may terminate if B breaches

does not mean A must do so immediately or else lose forever

the right to terminate. Adopting Burford’s theory of this con

‐

tract would lead to perverse results. In any case of material

breach, the non

‐ breaching party would need to terminate the

contract promptly or forever waive the right to terminate.

Such a draconian approach would destabilize commercial re

‐ lationships where breaches may be tolerated for a host of rea

‐

sons, from the di ffi culty in fi nding substitutes to recognizing

headwinds from macroeconomic troubles, or to humane rea

‐

sons like excusing Burford’s failure to record any sales in a

year when he had serious health problems.

At trial, APS’s Holmes testi fi ed to such reasons. He said he

did not terminate Burford’s contract earlier because he

“wanted to be fair” and wanted “to give him a chance” to im

‐

prove his performance. Holmes noted that Burford had re

‐

ceived surgery in one year, and that 2008 was a bad economic

time for everyone. During another year, Burford was involved

in a lawsuit, which had evidently taken up much of his time.

For these reasons, Holmes testi fi ed, APS gave Burford multi

‐ ple chances to improve his performance. When Burford con

‐

tinued to struggle, Holmes ultimately had a “heart

‐ to

‐ heart”

with him in 2010 before terminating his contract at the begin

‐ ning of 2012. The jury was not required to accept APS’s expla

‐

nation, but given this and other evidence o ff ered at trial, the

jury’s verdict that APS had not waived its right to terminate10 No. 16

‐ 1871

Burford was certainly not contrary to the weight of the evi

‐

dence.

This result is entirely consistent with our reasons for re

‐ versing in the earlier appeal and fi nding that the contract was

not terminable at will. It made good sense for the parties to

agree that Burford would have an exclusive territory and that

his contract could be terminated only for cause. Otherwise,

APS could have watched while Burford built up his territories

and then terminated his contract, grabbing for itself all the

fruits of his labors. 786 F.3d at 587–88. At the same time, if a

manufacturer or other upstream company like APS agrees to

give a sales representative an exclusive territory, its right to

terminate for poor performance is critical. Without that right,

it risks e ff ectively abandoning the territory, unable to replace

the poor performer in his exclusive territory. For that reason,

neither courts nor juries should quickly fi nd waiver when the

manufacturer or upstream company tolerates poor perfor

‐

mance but ultimately loses patience and terminates the con

‐

tract for the exclusive territory.

The judgment of the district court is AFFIRMED.