### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT J anu ary 6, 2006 THO MAS K. KAH N CL ERK [DO NOT PUBLISH] UNITED STAT ES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ___ N o. 03- 1619 7

____ ____ ____ ____ ____ ___ D. C. Docket N o. 02-23434 -CIV -PCH BAKRAC, INC., d .b.a. Po nc e De Leo n Ho te l, Plaintiff-C ount er D ef en dant- Appe llant, SA VN I BA KRA C, Pl ai nti ff -Appe llant, ve rs us VILLAGER FRANCHISE SYSTEMS, INC ., De fendant-Counter Claim ant-Appellee, CENDANT CORPORATION, KENNET H RODGERS, D ef en dants -Appe lle es .

____ ____ ____ ____ ____ __ Appeal f rom the United State s District Court fo r the S outhe rnD istri ct

of F lor ida

____ ____ ____ ____ ____ __ (J an ua ry6, 200 6)Ho no ra ble Ric ha rd Mil ls, Un ite d St ate s D istri c t Judg e of the Ce ntr a l D ist

ri c t of I lli no is, * sitti ngby desig nation. 2 Before CA RNE S and CO X, Circuit Judges, and MIL LS , D istrict Judg e. * RICH ARD MIL LS , D istrict Judg e: I. BACK GROUND T his c as e soun ds i n c ontra ct . Savni Bakrac (“ Bakrac ”) is the sole owner of Bakra c, Inc. , a

com pany that co nsi sts of

thr ee S t. P et er sbur g, F lor ida hot el s. Ac oll eg e gr ad

ua te w ho m aj or ed

in m ec hanic al e ngi ne er ing , Bakr ac be gan hi s c om pany in 1988 a ft er

im m igr at ing from Yugoslavia. Bakr ac ha d op er at ed

the c om pany f or ove r el ev eny ears w he n V ill ag e Fr an ch ise S y ste m s, I nc . ( a Ce ndant C or por at ion ) co nta ct ed

him about af ranc his e o p p o rt u n i t y. Atth e t i m e, Ke n n et h Ro d g er s wa s Vi l l ag e F ra n ch i s e S yst ems, In c. ’s (h erei na fte r “ VFS”) p res id en t an d R on al d M urray was a co m pa ny offi ci al . A cc or din g to Bakr ac , V FS sa le spe rs on B ra d S m ithm et w ithhim a nd p ro m ise d: a lowint er es t l oan; a

f re e “ state of

the a rt ” re se rv at ionm an ag em en t/c as h in take sy ste m ; a 70% oc cu

panc y r at e; m an ag em en t tra ini ng and o n- sit e ne wpr ope rty tr ai nin g; a de qua te m ar

ke tin g, a dve rt isi ng, pr om oti on, a nd p ubl ic ity ; and m ult ipl e te rm inatio n r igh ts. S m itha lle ge dly m ad e the se pr om ise s inMarc h 19 99.3

About aw ee k a ft er

m ee tin g w ithS m ith , V FS m ai le d B akra c a co py of it s U nif orm F ranc his e O ff

er ing Ci rc ular (“ U FO C” ). T he U FO C c ont ai ne d a m an da tor y F ed er al T ra de Co m

m iss ionw ar

nin g w hic h st at ed : TO PROTECT YOU, W E’ VE REQUIRED YOUR FRANCHISOR TO GI VE YO U T HI S IN FO RMA TI ON . . . . S TU DYIT CAREFULLY. W HILE IT INCLUDES SOME INFORMATION ABOUT YOUR CONTRACT, DON ’T RELY ON IT ALONE T O UNDERSTAND YO UR CONTRACT. READ ALL OF YOUR CON TR ACT CA RE FU LL Y. BU YINGA FRA NCH ISE IS A COMP LICATED INVESTMENT. TAKE YOUR TIME TO DE CID E. IF PO SSI BL E, SH OW YO UR CON TR

ACT AN D T HI S INFORM ATION TO AN ADVISOR, LIKE ALAWYER OR ACCOUNTANT. Bakr ac did

not r ea d any part of the U FO C o the r than th e co ve r pa ge . H ad he don e so, he w oul d have f

ound that he w as r equir ed

to pur ch as e a co m

put er sy ste m a nd sof tw ar e, he did

not qua lif y f or a n in te re st- fr ee loan, a nd V FS ’ s ave ra ge oc cupa nc y

rat e was 57 .43 %. De s p i t e f ai l i n g t o re ad th e U FO C, Ba kra c w as s k ep t i ca l ab o u tSmit h ’s pr om ise s. H e co nta ct ed

aV FS a ff

ili at e in L ak el an d, F L ( “ V ill ag er L ak el an d” ) to investig ate Sm ith’s 70% occupancy pledge. V illager L akeland could no t confirm an occupancy

rate, but stated that it was “ very busy .” Bakra c took no addition al ste ps t o ve ri fy

S m ith ’ s c la im s. Ba kra c’s d o ub t s p er s i s t ed an dh e r ep ea t ed l y as k ed Smit h t o p u tVF S’s4

pr om ise s inw ri tin g. I n M ay 199 9, Bakr ac ins ist ed

on h av ing a n a dde ndum

to the fr an ch ise a gr ee m en t. T he A dde ndum w as c re at ed

be ca use , Bakr ac “ didn’ t tru st som e stu ff

so [ he ] w an te d to have it in w ri tin g. ” T he A dde ndum pr ovi de d a re duc ed ini tia l f ranc his e fe e, r ed

uc ed r oy al ty f ee s, a$4, 000 ro y al ty

c re dit , a nd m ult ipl e no- pe na lty

te rm inatio n r igh ts. A f t e r th e A d d e n du m w a s c r e a t e d , B a kr a c e x e c u t e dac o p y o f th e A d d e n du m, a Fr an ch ise A gr ee m en t, a n I nte gr at ed S y ste m s A gr ee m en t, a nd a S of tw ar e an d Se rv ic es A gr ee m en t. T he F ranc his e A gr ee m en t i nc lud ed a“ W ai ve r of

Jur y T ri al ” w hic h st at ed : T he part ie s w ai ve the r igh t t o aj ur y tr ia l i n any

a ct ionr el at ed

to thi s Agre em ent or the relationship b etwe en the franchisor, the franchisee, an y guaranto r, a nd the ir

r es pe ct ive suc ce sso rs a nd a ssi gns. The F ranchise A greem ent also contained th e following integration clause: Ne ither [V FS] nor any

person acting on o ur behalf has m ade any oral or w ri tte n r ep re se ntatio n or pr om ise to y ou o n w hic h y ou are r el y ing on to en te r in to th is Agre em en t t ha t i s n ot writ te n i n t hi s Ag reem en t. Y ou r el ea se a ny

c la im a ga ins t us or

our a ge nts ba se d ona ny

or al or w ri tte n r ep re se ntatio n or

pr om ise not

state d inthi s A gr ee m en t. T his A gr ee m en t, tog ethe r w iththe e xhi bit s and s ch ed ule s a tta ch ed , is the entire agre em ent superseding all previous oral and written re pr es en ta tio ns, a gr ee m en ts, a nd unde rs tandi ngs of the part ie s a

bout the Facility

and the Lice nse. Y ou a cknow le dge that no sa le spe rs on h as m ad e an y pr om ise or pr ovi de d any

inf orm at ionto y ou a

bout pr oj ec te d sa le s, r ev enue s,5

incom e, profits or expenses from the Fac ility

except as stated in Item 19 o f the U FO C o r in a

w ri tin g th at

is atta ch ed

to thi s A gr ee m en t. Item 19 m erely

noted that while VF S’ s average occ upancy rate is 57.43% and that VF S does not gu arantee an occupancy rate. Bakr ac spe nt $ 80, 000 re -m ak ing his hot el s in to V ill ag er hot el s. V FS did not prov ide him

with a lowinterest loan, on-site training, or anything else that Bakrac believed VF S to have prom ised to him . By Novem ber 2002, Bakra c had be co m e so d ist

ur be d w ithV FS , he sto ppe d c om ply ing w iththe F ranc his e Agre em ent. I n Dec em

ber 2002, VF S inform ed Bakrac and Bakrac , I nc. that they we re r equired to pay

$93,600.00 in liquid ated dam ages and $41,602 .94 in other dam ages because they

prem aturely

term inated the Franchise A greem ent. B akrac an d B akra c, I nc . r es pond ed by f ili ng a m ai l f ra ud c la im a ga ins t V FS pur suant t o th e Rac ke te er In flu en cedan d C orrupt Orga ni zat io ns Act (“ RICO” ), 18 U.S.C. § 1961 et seq . Ac cording to Bakrac and Bakra c, Inc. , V FS m ade prom ises it never int en de d to ke ep . Upon VF S’ s m otion , the district court found that the record evidence showed Bakrac and Bakrac , I nc. validly wa ived their right to jury trial. V FS co unt er cl ai m ed

f or br ea chof

c ontra ct a nd m ove d f

or sum m ar y j udgm en t m oti on on Plaintiff’ s RICO claim . Bakrac and Bakrac , I nc. tr ied to defeat the sum m ary6

j udgm en t m oti on b y

a rg uin g th at

ge nui ne iss ue s of

m at er ia l f

ac t w er e cr eate d vi a VF S’ s oral prom ises and the prom ises contained in the Addendum . How ever, Bakr ac a nd B akra c, I nc . f ai le d to of

fe r a sin gle a ff

idavit , de posi tio n, or

oth er ty pe of e vid en ce to supp ort the ir pos iti on. T he dis tr ic t c ourt f

ound that the paro l e vid en ce r ule barr ed

the a dm iss ionof those prom ises and entered sum m ary j udgm ent in VFS ’ s favor. T he case then we nt to bench trial for the sole purpos e of deter m ining dam ages. The district court held that Bakrac and Bakrac, Inc. we re j ointl y and severally

liable to VFS . Bakrac an d B akra c, I nc . ti m el y

appe al ed . II. A N A LY SI S W e re vie wthe dis tr ic t c ourt’ s r uli ngs on m oti on f

or sum m ar y j udgm en t de novo , a pply ing th e sam e legal standards that boun d the district court. N ational Fi re I nsur . Co . of

H ar tf or d v. F ortun e Co nst . Co . , 320 F . 3d 1 260, 126 7 ( 11th Cir. 2003 ). “ The standard of r eview f or a m otion of sum

m ary j udgm ent is whether a ge nui ne iss ue e xis ts a s to a ny m at er ia l f

ac t and whe the r the m ovi ng p ar ty is en tit le d to j udgm en t a s am atte r of law . ” S ar fati v. W ood H oll y A sso ci at es , 874 F.2 d 1 52 3, 1 52 5 (1 1t h C ir.1 98 9) ; Fe d.R .Civ .P. A. Jury Trial Waiver A party m ay va lid ly w ai ve it s S ev en th A m en dm en t r igh t t o aj ur y tr ia l soThe c ircuits are split as to which party has the burden of provin g whether 1 a co nt ract ua l ju ry

tri al waiv er, s uc h a s t he on e h ere, was kn owi ng an d v ol un ta ry . Se e Pi er ce v. A tc his on T ope ka& Santa F e Ry . Co . , 110 F . 3d 4 31, 435 n. 4 ( 7th Ci r. 1997 ) (c oll ec tin g c as es ). A lth oughthi s C ir cu it ha s no t r ule d onthe m atte r, the dis tr ic t c ourt pu t the bur de n onV FS . T he dis tr ic t c our t’ s a ppr oa chis co nsi ste nt wit h t he ap pr oa ch us edin Lui s Aco st a, In c. v. Ci ti ba nk , N.A. , 920 F . Su pp. 15, 18 (D . P. R. 1996 ) (p ar

ty se ek ing to en fo rc e the w ai ve r be ar s th e bur de n) . W e ne ed not de te rm ine w he the r thi s is the c or re ct appr oa ch . V FS pr ev ai ls r eg ar dle ss o f w ho ha s th e bur de n. 7 lon g a s th e w ai ve r is k

now ing a nd v oluntary . S ee Br ookh ar t v. Janis , 384 U . S. 1, 4, 5, 86 S.C t. 1245, 1246, 1247 , 16 L .E d.2d 314 (196 6); see also L easing Service Co rp . v C rane , 804 F . 2d 8 28, 833 ( 4thCi r. 198 6) . I n m ak ing thi s a sse ssm en t, 1 co urts c onsi de r the c onsp ic uous ne ss o f the w ai ve r pr ovi sio n, the part ie s’ r el at ive barg ai nin g po w er , the sop his tic at ionof the party c ha lle ngi ng the w ai ve r, a nd w he the r the te rm s of

the c ontra ct

w er e ne got ia

ble . S ee Cr an e, 804 F . 2d at 83 3; See Whirlpoo l Financial Corp. v. S avaux, 866 F.S upp. 1102 (N .D .I ll. 1994). Inthi s c as e, Bakr ac ’ s a

bil ity to ne got ia te a n A dde ndum ind ic at es that the co ntr ac t w as ne got ia

ble . T he w ai ve r w as c onsp ic uous ly se t f orth i n th e Fr an ch ise Agre em ent in large ty

pe and plain langu age. Bakrac wa s a college-educate d m echanical engineer who had eleven y ears e xperience as a hotel operator. T here is n o in dic at ionthat B akra c w as und er dur es s or that V FS pr es sur ed

him to sig n the F ranc his e A gr ee m en t. V FS m er el y of fe re d B akra c w ha t he tho ught w as a good de al a nd h e ha d pl en ty

of ti m e to c onsi de r the te rm s. U nde r the se8

circum stances, one m

ust conclud e that Bakra c knowingly and volu ntarily

wa ived his r igh t t o aj ur

y tr ia l. B. V F S’ s S um m ar y Ju dg m en t M ot ion A pla int if f m ust pr ove the f

oll ow ing e le m en ts t o e sta bli sh l ia bil ity und er the fe de ra l m ai l and w ir e fr au d st at ute s: (1 ) that de fe ndants kno w ing ly de vis ed or part ic ipate d inasc he m e to d ef ra ud the pla int if

f( s) ; ( 2) that the de fe ndants did so w ill ing ly w itha n in te nt t o de fr au d; and ( 3) that the de fe ndants use d th e U . S. m ai ls or the int er state w ir es f

or the pur pose of e xe cu tin g th e sc he m e. S ee L an gf or d v. Ri te A id o f A la

ba m a, I nc . , 231 F . 3d 1 308, 131 3 ( 11th C ir . 200 0) . T o de te rm ine if co nduc t i s f

ra udul en t, the Co urt l ooks to state law . S ee P el le tie r v. Z w ei fe l, 921 F. 2d 1 465, 150 3 ( 11th C ir . 200 3) . B ec au se the F ranc his e A gr ee m en t’ s c hoi ce of lawpr ovi sio n de sig na te d N ewJe rs ey lawa s bi ndi ng a

uth or ity , the Co urt r el ie s on N ewJe rs ey

pr ec ed en t. T hus, to es ta bli sh f ra ud, Bakr ac a nd B akra c, I nc . m ust showam at er ia l m isr ep re se ntatio n of apr es en tly

e xis tin g or

pa st f ac t; know le dge or be lie f by the de fe ndant o f its f

al sity ; an in te nti on that the oth er pe rs on r el y

on i t; reasonable reliance thereon by the other person; and resultin g dam ages. See G en nari v. W ei ch er

t C o. Re al tor s, 148 N . J. 582 , 610 , 691 A . 2d 3 50 ( 1997 ) (c iti ng Jewish Ctr. of Sussex Countyv. Whale, 86 N. J. 619, 624, 432 A. 2d 52 1 (1981)). Bakr ac a nd B akra c, I nc . c la im that V FS de fr au de d th em by not pr ovi din g9

t h e m w i t h th i n g s i tp r o mi s e dt o th e m o r a l l y a n di n th e A d d e n du m ( i.e. loans, tra in in g, et c.). Und er New J ers ey law,

“ [w ] he n tw o part ie s have m ad e a co ntr ac t and h av e expr es se d it in a w ri tin g to w hic h th ey

have both a sse nte d a s th e co m ple te a nd ac curate int eg ratio n of

that c ontra ct , e vid en ce , w he the r paro l or oth er w ise , of a nte ce de nt unde rs tandi ngs an d ne got ia tio ns w ill not be adm itt ed f or the pur pose of vary ing or

c ontra dic tin g th e w ri tin g. See Film life, Inc. v. Ma l”Z” Ena, Inc. , 251 N. J.Super. 570, 573 (App.D iv.1991). Inthi s c as e, ne ith er

loans, nor

tr ai nin g, nor

oc cu panc y r at es w er e pr om ise d inthe Fr an ch ise A gr ee m en t. T he re fo re , Bakr ac a nd B akra c, I nc . c oul d no t pr ev ai l on an y of the ir c la im s. III. CO NC LUS ION Fo r th e rea so ns st at edab ov e, th e d is tri ctco ur t’s d eci si on is AFFIRM ED.