Jury Demand Violated Contractual Waiver Of Jury Trial

The Texas Supreme Court has enforced contract language under which a borrower waived the right to a jury trial on any claim or cause of action arising from a promissory note. In re General Electric Capital Corp., 203 S.W.3d 314 (Tex. Sept. 22, 2006).

General Electric brought a non-jury action on the amount remaining unpaid on a note. The trial court originally posted the case to its non-jury docket, but at some point the borrower filed a jury demand and the court moved the case to its jury calendar. The company never received notice from the borrower of the jury demand, but it did receive forms from the court showing the jury docket was being used. Ten months after the jury demand, the company moved to strike the jury demand due to lack of notice and the violation of the contract.

The trial court denied the motion and the appellate court denied relief, but the high court granted mandamus. It found that the contractual language was conspicuous and enforce­able, that the company never waived it, and that the trial court abused its discretion in failing to enforce the contract by striking the jury demand.

Moving To Strike Portions Of Appellate Brief Is Sanctionable In The Seventh Circuit

In Custom Vehicles, Inc. v. Forest River, Inc., 464 F.3d 725 (7th Cir. Sept, 25, 2006), Judge Easterbrook of the U.S. Seventh Circuit Court of Appeals issued an opinion as motions judge to publicize his practice of denying all motions to strike portions of appellate briefs and penalizing the moving party by reducing the size allowed for their merits brief.

He noted that the Federal Rules of Appellate Procedure contain no provision for a motion to strike, and that such a motion improperly attempts to have the motions judge decide part of the merits of the case in advance, as if he or she were a fourth member of the merits panel, through the act of editing the offending brief.

Judge Easterbrook announced that from now on he will penalize parties who move to strike by reducing the allotted length of their merits briefs by double the amount consumed by the motion papers.

Forum-Selection Clause In International Contract Must Be Interpreted Pursuant To Choice-of-Law Clause

In a matter of first impression, the Tenth Circuit recently held that “when an international commercial agreement has both choice-of-law and forum-selection provisions, the forum-selection provision must ordinarily be interpreted under the law chosen by the parties” instead of the law where the suit is pending.

In Yavuz v. 61 MM, Ltd., 465 F.3d 418 (10th Cir. Sept. 20, 2006), plaintiff Turkish citizen entered into a contract with a Swiss corporation to receive funds in resolution of a dispute involving Oklahoma real estate. It contained a paragraph stating, “This convention is governed by the Swiss law. . . . Place of courts is Fribourg” (Switzerland).

When plaintiff sued in Oklahoma state court, defendants removed and then moved for dismissal on the grounds of improper venue. The district court granted the motion, and in doing so implicitly interpreted the contract according to United States law, holding that the forum selection clause was enforceable and meant that the dispute was required to be litigated in Fribourg, Switzerland.

Noting that the issue of forum selection clauses in international agreements “has received virtually no attention from the federal courts or even scholars,” the Tenth Circuit looked to several Supreme Court cases arising in the international context. Concluding that the parties’ chosen law should govern the whole contract, including the forum selection clause, it held that the district court should have looked to Swiss law to interpret whether the apparently permissive language “Place of courts is Fribourg” required the claims to be brought in Swiss courts.

Clerk’s Entry Of Judgment Started Appeal Countdown Even Without Court Approval

Federal Rule of Civil Procedure 58 requires that judgments be entered on a separate piece of paper, which is docketed by the clerk. The intent of the rule was to make it very clear when the time would begin to run for filing a notice of appeal. However, the “Rule 58 judgment” concept created some unique problems. For example, if the Rule 58 judgment was never created, the time for appeal could last forever.

In an effort to address that problem, the rule was revised in 2002 to provide that certain types of judgments need not be memorialized in a separate document but are to be docketed by the clerk automatically. All other types of judgments must be placed in a separate document under Rule 58(B)(1), but the clerk must also record on the docket the substance of the judgment. If the separate document is never created, an absolute cap of 150 days from the time the clerk notes the substance of the judgment on the docket under Rule 79(a) limits the time to appeal.

The Fifth Circuit recently applied this rule in Burnley v. City of San Antonio, 470 F.3d 189 (5th Cir. Sept. 15, 2006). There, the clerk entered the fact of a judgment on the docket, but the court never prepared a required Rule 58 judgment. The defendant argued that the clerk’s docketing was “not authorized” and therefore a nullity, but the court held that a clerk has “independent authority and a duty to enter the judgment based on the verdict in the civil docket.” When 150 days passed without the filing of a separate Rule 58 judgment, the clerk’s entry became the judgment as a matter of law. The appellant did not file its appeal within 30 days of that entry, so the appeal was dismissed.

Skeletal Rule 59(e) Motion Fails To Extend Time For Filing Appeal

Under Fed. R. App. P. 4(a)(4)(A), certain post-judgment motions, including motions under Fed. R. Civ. p. 59(e), extend the time in which to file a notice of appeal. However, in Goodspeed v. Quechee Lakes Corp., 463 F.3d 195 (2d Cir. Sept. 13, 2006), the court held that a Rule 59(e) motion that is so “skeletal” that it fails to raise proper grounds for relief under Rule 59(e) does not qualify to extend the time for appeal.

The motion in this case was clearly perfunctory. It merely stated that counsel required an extension of time to support the motion itself so that counsel could perform a review and determine whether there was something there to bring to the court’s attention. The Second Circuit held that such a motion fails to “state with particularity” the grounds for relief, as required under Rule 7(b)(1), and also seeks an improper end-run around the prohibition in Rule 6(b) against extending the time for taking any action under Rule 59(e).

Viability Of Claim For Conversion Of Electronic Data Certified To New York Court

The Second Circuit has asked the highest court of New York state to clarify the law regarding whether a claim of conversion can exist where the property converted consists solely of electronic data.

In Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400 (2d Cir. Aug. 21, 2006), a former insurance agent who leased a computer system from his principal sued for conversion when the insurance company reclaimed the computer. The agent had installed various software of his own on the leased system and created electronic documents with that software, all of which he alleged were converted when the company took the computer.

The district court dismissed conversion claims based on the fact that the company owned the computer, but the Second Circuit disagreed that such ownership interest alone was a barrier to the claim. However, it analyzed New York law concerning the applicability of conversion claims to intangible property and found the matter “unsettled.” It certified the question of whether “a claim for the conversion of electronic data [is] cognizable under New York law.”

Sixth Circuit Finds Rule 26(a)(2) Requires Disclosure Of All Information Provided To Testifying Experts

In Regional Airport Authority v. LFG, LLC, No. 05-5754, 2006 WL 2368323 (6th Cir. Aug. 17, 2006), the Sixth Circuit became the second court of appeals to hold that the 1993 amendments to Fed. R. Civ. P. 26(a)(2) created a bright-line rule mandating disclosure of all information provided to testifying experts, even if such materials included attorney work product.

Since 1993, courts have split over the issue of whether work product that attorneys provide to their retained testifying experts must be disclosed. Beginning with Haworth, Inc. v. Herman Miller, Inc., 162 F.R.D. 289 (W.D. Mich. 1995), some district courts have held that work product shared with a testifying expert does not necessarily need to be produced because Rule 26(b)(3) and (4) retain some protections for work product.

However, in Regional Airport Authority the Sixth Circuit overruled the Haworth rule and found that amended Rule 26(a)(2) trumps Rule 26(b)(3) and (4).

Third Circuit Examines Split Regarding Preclusive Effect Of Alternative Findings

The doctrine of collateral estoppel holds that a ruling on a particular issue has preclusive effect and may not be re-litigated in a later proceeding where the identical issue was actually adjudicated, there was a full and fair opportunity to litigate the issue, and the determination by the adjudicator was necessary to the decision in the case. However, courts are split over whether this doctrine applies to a ruling based on alternative findings because of the difficulty in concluding that any one alternative finding was any more “necessary to the decision” than the others.

In Jean Alexander Cosmetics, Inc. v. L’Oreal USA, Inc., No. 05-4321, 2006 WL 2337267 (3d Cir. Aug. 14, 2006), the Third Circuit observed that the First Restatement of Judgments adopted the view that any alternative findings should be given equally preclusive effect, but 40 years later the Second Restatement reached the opposite conclusion, refusing to give preclusive effect to alternative findings that were each independently sufficient to support the judgment. The federal courts of appeal have split behind those two positions, with the majority following the First Restatement.

The Third Circuit rejected the Second Restatement position and sided with the Second, Seventh, Ninth and Eleventh Circuits.

Time To Appeal Of Class Certification Ruling Not Extended By Renewed Motion

Interlocutory appeal of rulings on class certification motions is available, at the discretion of the appellate court, by filing a petition under Fed. R. Civ. P. 23(f) within ten days of the ruling.

In Carpenter v. Boeing Co., No. 04-3334, 2006 WL 2244242 (10th Cir. Aug. 8, 2006), the Tenth Circuit held that the 10-day period is not subject to extension through the filing of a motion seeking the district court’s reconsideration of its ruling. In the Carpenter case, plaintiffs filed a petition within 10 days after the district court denied their “renewed” motion for class certification. The appellate court viewed that motion as a motion to reconsider, and dismissed the petition as untimely.

Substitution Of Correct Defendant After Expiration Of Statute Of Limitations Denied

In Locklear v. Bergman & Beving AB, No. 04-2506, 2006 WL 2244532 (4th Cir. Aug. 7, 2006), a plaintiff sued a company it named “Hassleholms Mekanisk AB” in a products liability complaint filed shortly before the statute of limitations expired. Plaintiff claimed that company was the manufacturer of equipment responsible for his personal injuries.

Subsequently he learned that the manufacturers actually were entities called “Luna AB” and “Bergman & Beving AB.” After allowing him to amend the complaint to substitute those parties as defendants, the court dismissed the complaint as time-barred because the original complaint did not toll the statute of limitations against the new defendants under Fed. R. Civ. P. 15(c)(3).

In affirming, the Fourth Circuit noted that where the Rule speaks in terms of relation-back in the case of a “mistake concerning the identity of the proper party,” courts distinguish between “mistake due to a lack of knowledge and mistake due to a misnomer.” A complaint amended to correct a mere misnomer relates back to the original complaint for limitations purposes, but a correction such as the one in Locklear to add a new party that the plaintiff simply did not know about “drags a new defendant into the case” and does not relate back.