Opinion ID: 3011076
Heading Depth: 1
Heading Rank: 3

Heading: Jury Instruction on Waiver

Text: The case went to the jury on the Carters' breach of contract claims, and the jury found that the Carters waived performance of Exxon's contractual duty to repair the tanks from October 18, 1990, to December 30, 1990. The Carters argue that the court erred in instructing the jury that waiver could be found based upon inaction or silence. The Carters timely objected to the instruction. We must determine whether the jury instructions as a whole stated the correct legal standard. See Ryder v. Westinghouse Elec. Corp., 128 F.3d 128, 135 (3d Cir. 1997), cert. denied, 118 S.Ct. 1052 (1998). If, looking at the charge as a whole, the instructions were capable of confusing and thereby misleading the jury, we must reverse. Mosley v. Wilson, 102 F.3d 85, 94 (3d Cir. 1996) (quotations omitted). The breach of contract claim was asserted under New Jersey law, and we look to New Jersey law to determine the applicable definition of waiver. The Supreme Court of New Jersey in West Jersey Title & Guaranty Co. v. Industrial Trust Co., 141 A.2d 782 (N.J. 1958), held that waiver requires a clear, unequivocal, and decisive act of the party showing such a purpose or acts amounting to an estoppel on his part . . . . Id. at 787. See also Petrillo v. Bachenberg, 623 A.2d 272, 276 (N.J. Super. Ct. App. Div. 1993), aff 'd, 655 A.2d 1354 (N.J. 1995); Country Chevrolet, Inc. v. Township of North Brunswick Planning Bd., 463 A.2d 960, 962 (N.J. Super. Ct. App. Div. 1983). New Jersey law thus requires a decisive act, rather than mere inaction, as a basis for waiver, and we conclude the district court's instruction was contrary to New Jersey law. Moreover, during closing argument, Exxon's counsel argued that the Carters' silence in the face of the destruction of the tanks and Exxon's corresponding higrade proposal made it reasonable for Exxon to proceed on the proposals, rather than to start replacing the tanks. The district court instructed the jury that it mustfind a waiver if the Carters expressly agreed to or clearly acquiesced in a 12 delay of performance under the contract which reasonably led Exxon to believe that the Carters would not insist the tanks be repaired or replaced. Introducing the issue of Exxon's reasonable belief is also contrary to New Jersey law, and further compounded the error. See Petrillo, 623 A.2d at 272, 276 (holding that it is erroneous to define waiver as conduct causing an objective observer to believe party had relinquished her rights). Including inaction, silence, and reasonable belief in the definition of waiver creates an incorrect statement of the legal standard and could confuse the jury as to the basis for waiver. The district court's instruction is reversible error.