In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16‐1871
ESTATE OF WILLIAM J. BURFORD,
Plaintiff‐Appellant,
v.
ACCOUNTING PRACTICE SALES, INC. and GARY L. HOLMES,
Defendants‐Appellees.
____________________
Appeal from the United States District Court for the
Southern District of Illinois.
No. 12‐cv‐01212‐JPG‐SCW — J. Phil Gilbert, Judge.
____________________
ARGUED JANUARY 12, 2017 — DECIDED MARCH 13, 2017
____________________
Before BAUER, SYKES, and HAMILTON, Circuit Judges.
HAMILTON, Circuit Judge. Defendant Accounting Practice
Sales (APS) terminated its brokerage contract with William
Burford after he failed, in his exclusive territory for APS, to
meet his minimum yearly sales volume for four consecutive
years. Burford sued. APS defended on the grounds that Bur‐
ford failed to meet his sales requirement and that his contract
was terminable at will. The case was tried after an earlier ap‐
peal in the case, and the jury ruled in favor of APS. While this
2 No. 16‐1871
appeal by Burford was pending, he passed away. His estate
has carried on the appeal, arguing that the district court erred
by permitting APS to defend on the basis of Burford’s failure
to meet his sales volume requirement, by refusing to admit an
exhibit, and by refusing to order a new trial on the theory that
the jury verdict was contrary to the weight of the evidence as
to whether APS waived its right to terminate the contract.
None of these arguments warrants a new trial. We affirm the
judgment of the district court in favor of APS.
I. Factual and Procedural Background
Defendant APS acts as a broker for the purchase and sale
of accounting practices. APS works through brokers who are
treated as independent contractors and are assigned exclusive
sales territories for APS. The brokers and APS share commis‐
sions for successful sales. Plaintiff Burford became a broker
for APS in 2003, and over the next several years, he and APS
agreed to add additional states as part of his exclusive terri‐
tory. Burford’s contract included a “minimum yearly sales
volume” requirement. On appeal, the parties do not dispute
that Burford did not meet this requirement for four consecu‐
tive years.
In March 2010, APS owner Gary Holmes spoke with Bur‐
ford about his poor performance. Burford acknowledged that
he needed to improve, but he failed to meet his minimum
yearly sales volume requirements again in 2010 and 2011. In
2012, APS terminated Burford’s contract and reassigned his
sales territory.
Burford brought suit in an Illinois state court, claiming
that APS breached his contract by terminating it without the
required good cause. He also sought to pierce the corporate
No. 16‐1871 3
veil to hold Holmes personally liable for the breach. The dis‐
trict court granted summary judgment in favor of the defend‐
ants on the theory that Burford’s contract with APS was ter‐
minable at will. In the earlier appeal, we reversed on that
point, finding that the contract’s provision that “APS cannot
terminate this agreement unless it is violated by Burford”
meant that the contract was not terminable at will. Burford v.
Accounting Practice Sales, Inc., 786 F.3d 582, 587–88 (7th Cir.
2015). We remanded for trial on the contract claim. The jury
found for APS, and the district court entered judgment on the
verdict.
On appeal, Burford raises three issues. First, he claims that
the trial court erred by supposedly allowing APS to change
the legal theory for its defense in violation of the “mend‐the‐
hold” doctrine in Illinois law. Second, Burford argues that the
district court abused its discretion by denying admission of
an exhibit. Third, he claims that the jury’s verdict was con‐
trary to the weight of the evidence on whether APS waived its
right to enforce the minimum sales requirement.
II. Analysis
“Mend the Hold”
Burford’s first argument on appeal is that APS should not
have been allowed to assert its defense that it terminated Bur‐
ford’s contract for good cause since he had missed his mini‐
mum 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‐cen‐
tury wrestling phrase, is less a set of rules than a flexible con‐
cept of equity. It prevents one party to litigation, especially in
4 No. 16‐1871
contract disputes, from trying to change its position or theo‐
ries at such a late stage in the dispute as to cause unfair prej‐
udice 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 be‐
gun, 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 (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 As‐
surance Co., 57 N.E.3d 575, 587–88 (Ill. App. 2016) (declining
to apply doctrine in absence of unfair surprise or arbitrari‐
ness). 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 Bur‐
ford in this case. From its earliest discovery responses, APS
advanced two central arguments in defense: first, it termi‐
nated Burford’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 (re‐
sponse to interrogatories).
Burford bases his mend‐the‐hold argument on the strat‐
egy APS pursued, but that strategy was perfectly reasonable
No. 16‐1871 5
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 nar‐
row ground that its contract with Burford was terminable at
will. There was nothing unfair or unsound about that strate‐
gic choice, and the district court granted summary judgment
for APS on that basis. We reversed in the earlier appeal, hold‐
ing 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 ei‐
ther 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 in‐
clude in a summary judgment motion. That rule would create
powerful incentives for defendants to load up summary judg‐
ment 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 ter‐
minate the contract because Burford had failed for several
years to meet his minimum yearly sales volume. Burford at‐
tempted to block this route, arguing in a motion in limine that
6 No. 16‐1871
APS could not assert any defense other than the terminable‐
at‐will defense without violating the “mend‐the‐hold” doc‐
trine. 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 de‐
fense. 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 argu‐
ment that it terminated him for cause. See Dkt. No. 73 at 3
(transcript from Nov. 1, 2013 pretrial conference where Bur‐
ford’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.
B. Trial Exhibit 13
Burford next argues that the district court erred when it
did not admit his Exhibit 13, which was a document that Gary
Holmes sent to APS brokers in 2010 to answer frequently
asked questions about APS’s proposed transition into a fran‐
chise operation. One answer in the document said: “There
will be a minimum production requirement. This has been
discussed but never really enforced. But it is time that territo‐
ries all be productive. This will not affect all brokers but will
some.” While Burford had rejected APS’s franchise overtures,
he argues the document was nonetheless relevant to show
that APS had waived its right to enforce its minimum yearly
No. 16‐1871 7
sales requirement. We review such an evidentiary ruling only
for abuse of discretion. Morgan v. City of Chicago, 822 F.3d 317,
338 (7th Cir. 2016).
The district court did not abuse its discretion by denying
admission of Exhibit 13. Federal Rule of Evidence 403 pro‐
vides: “The court may exclude relevant evidence if its proba‐
tive value is substantially outweighed by a danger of … un‐
due delay, wasting time, or needlessly presenting cumulative
evidence.” While Exhibit 13 may have been relevant, its exclu‐
sion was not an abuse of discretion because it would have
been needlessly cumulative.
Burford sought to introduce Exhibit 13 to prove that APS
had not previously enforced the minimum sales volume re‐
quirement in his contract. His theory was that APS had
waived its right to terminate for such failures. Burford argued
that Exhibit 13 “related only to what APS had admittedly
done previously in not enforcing any minimum production
requirement.” However, this point was not in real dispute.
The issue at trial was not whether APS had enforced the min‐
imum yearly sales volume in the past; it clearly had not. Gary
Holmes himself readily testified to this effect. The real dispute
at trial was whether APS’s earlier failure to enforce the sales
requirement amounted to an implicit waiver of its right to en‐
force the sales requirement later.
Burford himself acknowledged that APS’s past non‐en‐
forcement was well established at trial: “there was ample and
conclusive testimony at trial to establish that APS had waived
the minimum yearly sales volume.” Whether the earlier fail‐
ure to enforce minimum sales requirements amounted to a
waiver was controversial, but not the point from Exhibit 13
that the requirements had not been enforced in the past. Since
8 No. 16‐1871
this point was already established, it was not unreasonable for
the court to exclude Exhibit 13 as cumulative under Rule 403,
and Burford’s substantial rights were not affected by the ex‐
clusion. See Fed. R. Civ. P. 61.
C. Sufficiency of the Evidence
Finally, Burford argues that the jury’s verdict was contrary
to the weight of the evidence because there was “overwhelm‐
ing and indisputable evidence of waiver.” Waiver is “the in‐
tentional relinquishment of a known right, [and it] can arise
either expressly or by conduct inconsistent with an intent to
enforce the right.” Wald v. Chicago Shippers Ass’n, 529 N.E.2d
1138, 1147 (Ill. App. 1988) (Illinois contract law). Burford
sought to establish waiver by showing that APS could have
terminated him sooner but did not do so.
We review for abuse of discretion the district court’s ruling
on a Rule 59 motion for a new trial. Davis v. Wisconsin Dep’t of
Corrections, 445 F.3d 971, 979 (7th Cir. 2006), citing Latino v.
Kaizer, 58 F.3d 310, 314 (7th Cir. 1995). A new trial should be
granted “only when the record shows that the jury’s verdict
resulted in a miscarriage of justice or where the verdict, on the
record, cries out to be overturned or shocks our con‐
science.” Id., citing Latino, 58 F.3d at 314.
There was sufficient evidence here for the jury to find that
APS did not waive its right to terminate Burford. The contract
gave APS the option to terminate its contract with Burford if
he failed to meet certain thresholds. It did not require APS to
fire Burford in such instances. When we last considered this
contract, we said: “APS could terminate the contract only if
Burford violated it. There is a decisive difference between say‐
ing that A may terminate if B breaches and saying that A may
No. 16‐1871 9
terminate only if B breaches.” Burford, 786 F.3d at 587. At that
point, we made this distinction to show that APS could fire
Burford only for cause, not at will.
Those same terms in the contract illustrate a different but
equally valid point: saying that A may terminate if B breaches
does not mean A must do so immediately or else lose forever
the right to terminate. Adopting Burford’s theory of this con‐
tract would lead to perverse results. In any case of material
breach, the non‐breaching party would need to terminate the
contract promptly or forever waive the right to terminate.
Such a draconian approach would destabilize commercial re‐
lationships where breaches may be tolerated for a host of rea‐
sons, from the difficulty in finding substitutes to recognizing
headwinds from macroeconomic troubles, or to humane rea‐
sons like excusing Burford’s failure to record any sales in a
year when he had serious health problems.
At trial, APS’s Holmes testified to such reasons. He said he
did not terminate Burford’s contract earlier because he
“wanted to be fair” and wanted “to give him a chance” to im‐
prove his performance. Holmes noted that Burford had re‐
ceived surgery in one year, and that 2008 was a bad economic
time for everyone. During another year, Burford was involved
in a lawsuit, which had evidently taken up much of his time.
For these reasons, Holmes testified, APS gave Burford multi‐
ple chances to improve his performance. When Burford con‐
tinued to struggle, Holmes ultimately had a “heart‐to‐heart”
with him in 2010 before terminating his contract at the begin‐
ning of 2012. The jury was not required to accept APS’s expla‐
nation, but given this and other evidence offered at trial, the
jury’s verdict that APS had not waived its right to terminate
10 No. 16‐1871
Burford was certainly not contrary to the weight of the evi‐
dence.
This result is entirely consistent with our reasons for re‐
versing in the earlier appeal and finding that the contract was
not terminable at will. It made good sense for the parties to
agree that Burford would have an exclusive territory and that
his contract could be terminated only for cause. Otherwise,
APS could have watched while Burford built up his territories
and then terminated his contract, grabbing for itself all the
fruits of his labors. 786 F.3d at 587–88. At the same time, if a
manufacturer or other upstream company like APS agrees to
give a sales representative an exclusive territory, its right to
terminate for poor performance is critical. Without that right,
it risks effectively abandoning the territory, unable to replace
the poor performer in his exclusive territory. For that reason,
neither courts nor juries should quickly find waiver when the
manufacturer or upstream company tolerates poor perfor‐
mance but ultimately loses patience and terminates the con‐
tract for the exclusive territory.
The judgment of the district court is AFFIRMED.