John G. Alden, Inc. of Massachusetts v. John G. Alden Insurance Agency of Florida, Inc.

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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