Opinion ID: 172063
Heading Depth: 2
Heading Rank: 1

Heading: New Defense Theory

Text: Ms. Kreisler first raises a procedural argument. She contends the court erred when it allowed CCC to present evidence that Ms. Flanigan lacked authority to bind CCC to the modified agreement because CCC never raised this theory as an affirmative defense in its pleadings or its trial brief. [2] Generally, whether a party has waived an affirmative defense is a mixed question of law and fact, requiring us to accept the district court's factual conclusions unless clearly erroneous but review the application of the facts to the law under a de novo standard. FDIC v. Oaklawn Apartments, 959 F.2d 170, 173 (10th Cir.1992). To the extent Ms. Kreisler challenges the district court's admission of evidence as to this defense, however, we review only for plain error because Ms. Kreisler merely objected to the late submission of the supplemental brief. This objection and her request for additional time cannot be construed as an objection to the admission of evidence of authority as falling outside the pleadings. Ms. Kreisler never claimed the evidence fell outside the pleadings until she filed a motion to strike after trial. Moreover, she made no contemporaneous or continuing objections to any of the evidence offered at trial. See McEwen v. City of Norman, 926 F.2d 1539, 1544 (10th Cir.1991); see also Macsenti v. Becker, 237 F.3d 1223, 1230-31 (10th Cir.2001) (finding motion to strike at the close of evidence insufficient to preserve the issue for review). Therefore, the admission of evidence is properly reviewed for plain error. To secure relief under this standard, Defendant must show: (1) an error, (2) that is plain (clear or obvious under current law), and (3) that affects substantial rights. United States v. Goode, 483 F.3d 676, 681 (10th Cir.2007). If Defendant satisfies these criteria, we may exercise discretion to correct the error if it seriously affects the fairness, integrity or public reputation of judicial proceedings. Id. (internal quotations marks omitted). At the outset, this claim is difficult to analyze because Ms. Kreisler began the case pro se. Nonetheless, it is clear from her answer to CCC's complaint that she asserted mutual release both as a general basis of denial of CCC's claims and as a basis for her counterclaim. Put differently, in her counterclaim, Ms. Kreisler asserted the validity of the severance contract and her entitlement to the benefits of it, including the mutual release provision. Rule 8(c) requires defendants to set forth specified affirmative defenses in an answer along with any other matters constituting an avoidance or affirmative defense. Fed.R.Civ.P. 8(c). CCC's theory of lack of authority is an avoidance defense to Ms. Kreisler's assertion that the mutual release was valid and enforceable. Consequently, under Rule 8, CCC had an obligation to specifically plead lack of authority in its response to the counterclaim. See id.; Radio Corp. of Am. v. Radio Station KYFM, Inc. 424 F.2d 14, 18 (10th Cir.1970). However, CCC failed to do so, instead raising other defenses in its answer and reserving the right to identify additional defenses as they arose during the course of discovery. CCC first formally identified its lack-of-authority theory for the court in its supplemental brief filed the first day of trial. The general rule is that a party waives its right to raise an affirmative defense at trial when the party fails to raise the defense in its pleadings. Hassan v. U.S. Postal Service, 842 F.2d 260, 263 (11th Cir.1988). However, in considering this rule, we must keep in perspective that the liberal pleading rules established by the Federal Rules of Civil Procedure apply to the pleading of affirmative defenses. Id. Therefore, [w]e must avoid hypertechnicality in pleading requirements and focus, instead, on enforcing the actual purpose of the rule. Id. Rule 8(c)'s ultimate purpose is simply to guarantee that the opposing party has notice of any additional issue that may be raised at trial so that he or she is prepared to properly litigate it. When a plaintiff has notice that an affirmative defense will be raised at trial, the defendant's failure to comply with Rule 8(c) does not cause the plaintiff any prejudice. And, when the failure to raise an affirmative defense does not prejudice the plaintiff, it is not error for the trial court to hear evidence on the issue. Id. (citation omitted). Although it would have been preferable for CCC to raise the defense earlier, in light of the circumstances, we conclude the district court did not err by allowing CCC to supplement its brief, nor did it err  much less plainly err  by allowing CCC to present evidence on the issue of authority. Because we conclude, for the reasons discussed below, that Ms. Kreisler had notice of the defense of lack of authority and, therefore, suffered no prejudice from CCC's failure to comply with Rule 8(c), we see no error in the court's decision. As of June 2005, Ms. Kreisler had actual (albeit informal) notice of CCC's authority defense. During her own deposition, CCC asked Ms. Kreisler numerous questions about Ms. Flanigan's authority, as well as about Ms. Kreisler's authority when she had similar job duties at CCC. Therefore, Ms. Kreisler had notice of the theory during discovery  well before trial  when she had full opportunity to follow up with her own research and discovery. During discovery, Ms. Kreisler conducted numerous depositions and requested detailed document production. She had ample opportunity to pursue the issue. Indeed, it appears she did  at oral argument, Ms. Kreisler's counsel asserted that the written proffer of testimony the court refused to accept at the end of trial related to the issue of lack of authority, suggesting Ms. Kreisler was prepared to address the issue of authority at trial. Further, the court minimized any prejudice to Ms. Kreisler by providing her with a reasonable opportunity to respond to the authority evidence. After Ms. Kreisler initially objected to the supplemental brief, the court gave her time to read it and asked her to suggest evidence she might raise if granted a continuance. Ms. Kreisler was unable to suggest any relevant evidence she might raise. Finally, the court gave Ms. Kreisler the opportunity to fully brief and rebut the tardily raised affirmative defense after the trial. In her briefing, Ms. Kreisler provided her perspective on the law, but still could not direct the court to any evidence, expected evidence, or theory of discovery that would impact the issue of authority. In light of all of this, the court did not err by allowing CCC to assert an additional affirmative defense, even so late in the proceedings. In the end, the purpose of the federal rules is to provide the maximum opportunity for each claim to be decided on the merits rather than on the basis of procedural factors. The main purpose of the rules would be evaded if we were to hold that the defense was not properly raised. State Distribs., Inc. v. Glenmore Distilleries Co., 738 F.2d 405, 411 (10th Cir.1984). Because Ms. Kreisler faced no unfair surprise, CCC's technical failure to comply with Rule 8(c) is not fatal in this case. In a related claim, Ms. Kreisler argues she was entitled to a jury trial on the issue of lack of authority. The core of Ms. Kreisler's argument is that, by denying her motion for a continuance, the court left her unable to assess her right to a jury, thereby effectively denying her the right. Although Ms. Kreisler recognizes that the question of whether agency existed is a question of law for the court under Kansas law, see Wheat v. Kinslow, 316 F.Supp.2d 944, 954 (D.Kan.2003), she contends there were a series of underlying factual disputes that should have been decided by a jury. We cannot agree that by denying Ms. Kreisler's motion for a continuance, the court denied her a jury trial. Rather, Ms. Kreisler waived her right to a jury trial by stipulating that the validity of the severance agreement should be determined by the court. She cannot now claim she only consented to a bench trial with respect to certain challenges to the validity of the release. [W]aiver is the `intentional relinquishment or abandonment of a known right.' United States v. Olano, 507 U.S. 725, 733, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993) (quoting Johnson v. Zerbst, 304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938)). A party who has waived a right is not entitled to appellate review. United States v. Teague, 443 F.3d 1310, 1314 (10th Cir.2006). In this case, Ms. Kreisler intentionally waived her right to a jury trial with respect to the validity of the severance agreement; thus, we will not review this claim on appeal.