United States Court of Appeals
For the First Circuit
Nos. 04-1054; 04-1209
JOHN G. ALDEN, INC. OF MASSACHUSETTS;
JOHN G. ALDEN INSURANCE AGENCY, INC.,
Plaintiffs-Appellants\Cross-Appellees,
v.
JOHN G. ALDEN INSURANCE AGENCY OF FLORIDA, INC.;
JOHN G. ALDEN SPECIAL RISKS, INC.,
Defendants-Appellees\Cross-Appellants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Patti B. Saris, U.S. District Judge]
Before
Lynch, Circuit Judge,
Campbell, Senior Circuit Judge,
and Stahl, Senior Circuit Judge.
Michael A. Albert, with whom John L. Strand, Lawrence M.
Green, and Wolf, Greenfield & Sacks, P.C., were on brief, for
appellants.
Kevin J. D'Espies, with whom Rutherford Mulhall, P.A., was on
brief, for appellees.
November 10, 2004
STAHL, Senior Circuit Judge. Plaintiffs-Appellants John
G. Alden, Inc. of Massachusetts and John G. Alden Insurance Agency,
Inc. (collectively "Alden Mass") brought this breach of contract
and trademark infringement action under the Lanham Act, 15 U.S.C.
§ 1117(a), against Defendants-Appellees John G. Alden Insurance
Agency of Florida, Inc. ("Alden Florida") and John G. Alden Special
Risks, Inc. ("Special Risks") (collectively, "Appellees"). The
district court granted summary judgment to Appellees, and Alden
Mass now appeals.1 Because the district court failed to comply
with Federal Rule of Civil Procedure 56(c), and failed to address
at least one significant legal issue, we vacate the judgment and
remand for further proceedings.
I. BACKGROUND
Plaintiff-Appellant John G. Alden, Inc. of Massachusetts
owns several federal registrations for trademarks related to the
Alden name.2 On December 9, 1981, Alden Mass and Alden Florida
entered into a license agreement (the "License Agreement") which
granted Alden Florida, as licensee:
1
Alden Florida and Special Risks filed a cross-appeal from the
district court's denial of attorneys' fees under Federal Rule of
Civil Procedure 68 and Section 35 of the Lanham Act, 15 U.S.C. §
1117. We do not reach this issue in light of our disposition of
the case.
2
These marks include: U.S. Service Mark Registration Nos.
2,308,835 and 2,307,288 for ALDEN®; No. 2,290,215 for JOHN G.
ALDEN®; and Nos. 2,292,686, 2,291,150, 2,294,400, and 2,291,119 for
variations of a rope logo.
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The exclusive right and license in the State
of Florida to operate an insuran[c]e,
excluding life insurance, brokerage and agency
business under the name "John G. Alden
Insurance Agency of Florida, Inc." together
with the right to use [Alden Mass'] commonly
known logo on advertising matters and
stationery.
In exchange, Alden Florida agreed "to pay [Alden Mass] three
percent (3%) of gross commissions paid to [Alden Florida] and its
salespersons for sale of insurance." The License Agreement also
provided that Alden Florida could not assign or transfer the
license without prior written approval of Alden Mass, and that
Alden Mass could terminate the license if Alden Florida failed to
make the payments required by the License Agreement.
Alden Florida made payments under the License Agreement
from its execution in 1981 until approximately 1987, at which time
Alden Florida stopped making payments. Although Alden Mass made an
initial effort to collect from Alden Florida, it stopped all
collection efforts no later than 1993.
On September 30, 2002, pursuant to the termination clause
in the License Agreement, Alden Mass gave written notice to Alden
Florida, purporting to terminate the License Agreement. Alden
Florida did not respond, and continued to use Alden Mass'
registered marks until 2003.
Frank Atlass, the founder, Chairman, and CEO of Alden
Florida, incorporated Special Risks on November 18, 1999. There
was never any license agreement between Alden Mass and Special
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Risks. Nonetheless, at all times from its incorporation until a
few months after Alden Mass filed this suit, Special Risks used
Alden Mass' registered marks to promote its business.
On November 1, 2002, Alden Mass filed suit against Alden
Florida and Special Risks. In a scheduling order, the district
judge set a July 10, 2003 deadline for discovery, an August 10,
2003 deadline for the filing of summary judgment motions, and a
September 10, 2003 deadline for the filing of oppositions to any
summary judgment motions. After Alden Florida and Special Risks
filed their answer, Alden Mass filed a timely motion for summary
judgment. On August 7, 2003, the parties filed a joint motion for
the entry of an injunction, which the court allowed. Pursuant to
that injunction, Appellees ceased using the Alden name, the Alden
Mass registered marks, and the website domain name of
www.aldeninsurance.com. On August 11, 2003, Alden Florida and
Special Risks filed an opposition to Alden Mass' motion for summary
judgment and, for the first time, advanced the theory that Alden
Florida had repudiated the License Agreement at least fifteen years
earlier by "not making any payments." On August 15, 2003, Alden
Mass filed a reply, contending that as a matter of law, a contract
cannot be repudiated by mere inaction.
Then, Alden Florida and Special Risks, with the
permission of the court, took a late deposition of Nancy G. Ronan,
a former employee of Plaintiff-Appellant John G. Alden Insurance
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Agency, Inc. As a result of information learned during that
deposition, on September 30, 2003, over a month-and-a-half after
the deadline for filing summary judgment motions had passed,
Appellees filed a motion for leave to file a late motion for
summary judgment. For the first time, Appellees advanced the
theory that they had repudiated the contract not only by non-
payment, but also by affirmatively "informing [Alden Mass] that
future payments would not be made." On October 3, 2003, the court
denied Appellees' motion to file late.
On October 15, 2003, the district judge held a hearing on
Alden Mass' motion for summary judgment ("Hearing"). That same
day, Appellees filed a motion for reconsideration of the district
court's order denying their motion for leave to file late ("Motion
for Reconsideration").
During the Hearing, the district judge noted that
Appellees' new affirmative repudiation theory was being presented
to the court for the first time. In light of this new argument,
and the fact that discovery was already closed, the district judge
invited Alden Mass to submit a "letter" to the court, alerting the
judge to anything "else in the [Ronan] deposition [she should] look
at . . . . Or, [to point to any other] piece of evidence that
makes [the statements in the Ronan deposition] a disputed issue of
fact." The district judge was clear, however, that "discovery is
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closed" and "there's no more briefing." In response, Alden Mass
submitted a letter to the court on October 23, 2003.
On November 26, 2003, the district judge granted
Appellees' Motion for Reconsideration, and on the same day, entered
an order denying Alden Mass' motion for summary judgment and
granting summary judgment to Alden Florida and Special Risks. The
district judge determined that Alden Florida had repudiated the
contract approximately fifteen years prior to suit, and therefore,
Alden Mass' contract claims were barred by the statute of
limitations, and its Lanham Act claims were barred by the equitable
doctrine of laches. The district judge's decision made no mention
of Special Risks' use of Alden Mass' marks.
II. DISCUSSION
Federal Rule of Civil Procedure 56(c) provides that a
summary judgment motion "shall be served at least 10 days before
the time fixed for the hearing." Fed. R. Civ. P. 56(c). "We have
interpreted Rule 56(c) to allow an adverse party at least ten days
to respond to a motion for summary judgment." Delgado-Biaggi v.
Air Transp. Local 501, 112 F.3d 565, 567 (1st Cir. 1997); see
Stella v. Town of Tewksbury, 4 F.3d 53, 55 (1st Cir. 1993)
("[S]ummary judgment targets should be secure in the knowledge that
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they will have at least ten days in which to formulate and prepare
their best opposition to an impending motion.").3
Here, it is unclear whether the district judge granted
Appellees' motion for summary judgment or whether the judge raised
the summary judgment motion sua sponte (and coincidentally granted
Appellees' Motion for Reconsideration the same day as the judgment
was entered).4 For purposes of Rule 56(c), however, this
determination is irrelevant. See Stella, 4 F.3d at 56 ("[I]t is
well settled in this circuit that all summary judgment proceedings,
including those initiated by the district judge, will be held to
the standards enunciated in Rule 56 itself.").
Moreover, appellate review is "equally unaffected" by
whether summary judgment was raised on motion of one of the parties
or by the court sua sponte. See Berkovitz v. Home Box Office,
Inc., 89 F.3d 24, 30 (1st Cir. 1996). We engage in plenary review
of the district court's grant of summary judgment. See id.
3
We note that, "while Rule 56(c) refers to a 'hearing' in
relation to the ten day proviso, the rule does not require oral
argument in connection with the motion." Delgado-Biaggi, 112 F.3d
at 567 n.4.
4
Part of this ambiguity stems from the wording in the district
court's order. The order states: "[Alden Mass'] motion is DENIED
and the Court orders entry of judgment in favor of defendant [sic]
pursuant to Fed. R. Civ. P. 56(b)," instead of, for example,
"[Alden Mass'] motion is DENIED, [Alden Florida's and Special
Risks'] motion is ALLOWED, and the Court orders entry of judgment
in favor of defendants pursuant to Fed. R. Civ. P. 56(b)."
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Here, Alden Mass learned for the first time that it was
the target of a motion for summary judgment on November 26, 2003,
when the district judge granted Appellees' Motion for
Reconsideration. That very same day, the court entered summary
judgment in favor of Appellees. Clearly, Alden Mass was not
afforded the ten days to reply as required by Rule 56(c). See Fed.
R. Civ. P. 56(c).
It could be argued that the district court's failure to
comply with the strictures of Rule 56(c) was harmless. See, e.g.,
Am. Int'l Ins. Co. of P.R. v. Am. Nat'l Fire Ins. Co. (In re San
Juan Dupont Plaza Hotel Fire Litig.), 45 F.3d 564, 568 (1st Cir.
1995) ("If we were completely certain that the merits of the
summary judgment issue had been fully presented to the district
court, it might be reasonable to conclude either that the essence
of the [] notice requirement had been satisfied or that the failure
to satisfy it was harmless.") (emphasis in original). We need not
determine, however, whether our harmless error jurisprudence
applies to the requirements of Rule 56, because the error here was
not harmless.
First, we have held that "[w]hen a court announces that
it will follow a procedural course, the parties are entitled to
rely on that announcement unless and until the court signals an
impending change and affords a reasonable opportunity to regroup."
Leyva v. On The Beach, Inc., 171 F.3d 717, 720 (1st Cir. 1999); see
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Berkovitz, 89 F.3d at 30 ("A court cannot alter its bearings mid-
course without signalling the impending change to the parties.").
Here, the district judge gave Alden Mass every indication that it
would not grant Appellees' Motion for Reconsideration. At one
point, when Alden Mass requested an opportunity to respond to
Appellees' newly raised affirmative repudiation theory, the
district judge stated: "[I]t's too late. I didn't let [Alden
Florida and Special Risks] file a late motion. I'm not going to
let you file a late motion." Furthermore, the district judge made
clear at the Hearing that there would be "no more briefing."
Moreover, the district judge informed the parties that after the
Hearing, "we will set up the damages hearing. Because [Alden Mass]
will be getting something." Plainly, Alden Mass had no notice that
the district court was about to change its "procedural course" and
not only accept Appellees' late motion, but also grant summary
judgment in Appellees' favor. See Berkovitz, 89 F.3d at 31
(finding no notice where, inter alia, the court's pre-ruling
statements pointed in the opposite direction).
Second, although it is true the district judge invited
Alden Mass to submit a "letter" regarding the Ronan deposition, and
to use that letter to point to any other piece of "evidence that
makes [the statements in the Ronan deposition] a disputed issue of
fact," Rule 56(c) requires more. At a minimum, the party preparing
the response must have the motivation of knowing that it is the
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target of a summary judgment motion. See In re San Juan Dupont
Plaza Hotel Fire Litig., 45 F.3d at 568 (finding no notice where
the only issue pending was whether the court would grant permission
to file a summary judgment motion). Here, Alden Mass did not know
it had become the target of a summary judgment motion. Also, the
district court had made it clear that it would not accept any
further evidentiary submissions or further legal argument.
Therefore, Alden Mass did not have a "meaningful opportunity to
cull the best evidence supporting [its] position, and to present
that evidence, together with developed legal argumentation, in
opposition to the entry of summary judgment." Berkovitz, 89 F.3d
at 31.
In addition to the district court's failure to follow the
requirements of Rule 56(c), we also note that remand here is
necessary because there is at least one "significant legal issue,
not squarely addressed by the district court" that remains
unresolved. See In re San Juan Dupont Plaza Hotel Fire Litig., 45
F.3d at 568. The district court's decision is devoid of any
reference to Special Risks' use of Alden Mass' registered marks.
Special Risks is a separate legal entity from Alden Florida, formed
merely three years prior to the filing of this suit. We are unsure
how any alleged repudiation of the License Agreement between Alden
Mass and Alden Florida in the late 1980s or early 1990s could
justify Special Risks' use of Alden Mass' registered marks. That
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said, "[g]iven the case's posture," we decline to "leapfrog[] to
the merits." Stella, 4 F.3d at 55. This issue is more
appropriately addressed on remand. Furthermore, the district judge
did not squarely address Alden Mass' argument that laches does not
apply to damages for Alden Florida's (and Special Risks') continued
use of its registered marks after the date Alden Mass filed suit.
See In re San Juan Dupont Plaza Hotel Fire Litig., 45 F.3d at 568.
Again, this issue is more appropriately addressed on remand.
We recognize that in the end, Alden Mass may not be able
to "muster enough evidence to ward off a properly advertised
summary judgment." Berkovitz, 89 F.3d at 31. That possibility,
however, does not affect our decision today: "The issue here is
one of process and fundamental fairness, not one of substance."
Rogan v. Menino, 175 F.3d 75, 80 n.4 (1st Cir. 1999).
III. CONCLUSION
For the foregoing reasons, we vacate the judgment of
the district court and remand the case for proceedings consistent
with this opinion. Costs to appellants.
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