Opinion ID: 8414559
Heading Depth: 2
Heading Rank: 1

Heading: “Mend the Hold”

Text: Burford’s first argument on appeal is that APS should not have been allowed to assert its defense that it terminated Burford’s contract for good cause since he had missed his minimum 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-century wrestling phrase, is less a set of rules than a flexible concept of equity. It prevents one party to litigation, especially in contract disputes, from trying to change its position or theories at such a late stage in the dispute as to cause unfair prejudice 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 begun, change his ground, and put his conduct upon another and a different consideration. He is not permitted thus to mend his hold.”), quoting Ohio & Mississippi Railway Co. v. McCarthy, 96 U.S. 258, 267-68, 24 L.Ed. 693 (1877); see also Ryerson Inc. v. Federal Ins. Co., 676 F.3d 610, 614 (7th Cir. 2012) (collecting cases); Horwitz-Matthews, Inc. v. City of Chicago, 78 F.3d 1248, 1251 (7th Cir. 1996); FHP Tectonics Corp. v. American Home Assurance Co., 404 Ill.Dec. 816, 57 N.E.3d 575, 587-88 (2016) (declining to apply doctrine in absence of unfair surprise or arbitrariness). The doctrine seems to correlate fairly closely to federal courts’ approach to efforts to amend pleadings under Federal Rule of Civil Procedure 15. The doctrine also lies close to the boundary between matters 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 Burford in this case. From its earliest discovery responses, APS advanced two central arguments in defense: first, it terminated Bur-ford’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 (response to interrogatories). Burford bases his mend-the-hold argument on the strategy APS pursued, but that strategy was perfectly reasonable 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 narrow ground that its contract with Burford was terminable at will. There was nothing unfair or unsound about that strategic choice, and the district court granted summary judgment for APS on that basis. We reversed in the earlier appeal, holding 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 first in a Rule 12(b)(6) motion or summary judgment motion in the hope of winning an early and relatively inexpensive victory. Filing either 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 include in a summary judgment motion. That rule would create powerful incentives for defendants to load up summary judgment 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 benefit. 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 terminate the contract because Burford had failed for several years to meet his minimum yearly sales volume. Burford attempted to block this route, arguing in a motion in limine that APS could not assert any defense other than the terminable-at-will, defense without violating the “mend-the-hold” doctrine. 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 defense.- 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 argument that it terminated him for cause. See Dkt. No. 73 at 3 (transcript from Nov. 1, 2013 pretrial conference where Burford’s counsel identified 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.