Landmark Financial Corp. v. Fresenius Medical Care Holdings, Inc.

863 F. Supp. 2d 118, 2012 U.S. Dist. LEXIS 67075, 2012 WL 1701558
CourtDistrict Court, D. Massachusetts
DecidedMay 11, 2012
DocketCivil No. 10-10372-NMG
StatusPublished
Cited by4 cases

This text of 863 F. Supp. 2d 118 (Landmark Financial Corp. v. Fresenius Medical Care Holdings, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Landmark Financial Corp. v. Fresenius Medical Care Holdings, Inc., 863 F. Supp. 2d 118, 2012 U.S. Dist. LEXIS 67075, 2012 WL 1701558 (D. Mass. 2012).

Opinion

MEMORANDUM & ORDER

GORTON, District Judge.

Plaintiff Landmark Financial Corporation (“Landmark”) brings suit against defendant Fresenius Medical Care Holdings, Inc. (“Fresenius”) for breach of a letter agreement (“the Letter Agreement”) purportedly entitling Landmark to a finder’s fee in connection with its introduction of Fresenius to Luitpold Pharmaceuticals, Inc., a company with which Fresenius subsequently entered into a sublicense, distribution, manufacturing and supply agreement.

Filed in March 2010, the Complaint asserts causes of action for 1) breach of contract (Count One), 2) unjust enrichment (Count Two), 3) breach of the implied covenant of good faith and fair dealing (Count Three) and 4) violation of section 11 of the Massachusetts Consumer Protection Act, codified at M.G.L. ch. 93A (“Chapter 93A”) (Count Four). Defendant filed a timely Answer and asserted a demand for a jury trial with respect to “all claims so triable.”

In July 2011, the parties filed cross-motions for summary judgment. Magistrate Judge Marianne B. Bowler issued a Report and Recommendation (“R & R”) recommending that plaintiffs motion for partial summary judgment be denied and that defendant’s motion for summary judgment be allowed with respect to Counts Two and Four but denied with respect to Counts One and Three. Finding the R & R to be thorough and well-reasoned, this Court accepted and adopted it over the parties’ objections.

A jury trial to adjudicate the breach of contract and implied covenant of good faith and fair dealing claims has been scheduled for June 25, 2012. Defendant has since moved to withdraw its earlier demand for a jury trial. That motion, which has been opposed by the plaintiff, is currently pending before the Court.

I. Issues Presented

Defendant’s motion presents three issues: A) whether Paragraph 4 of the Letter Agreement (“the jury waiver provision”) is otherwise valid and enforceable, B) whether the Federal Rules of Civil Procedure prevent the defendant from withdrawing its jury demand without the plaintiffs consent and C) whether equitable considerations prevent the defendant from enforcing the jury waiver provision. To assess those issues, the Court reviews the language of the jury waiver provision, [120]*120canvasses the relevant provisions of the Federal Rules of Civil Procedure and considers how equitable principles bear upon this novel situation.

A. The Jury Waiver Provision

Paragraph 4 of the Letter Agreement reads, in pertinent part:

[Fresenius] and [Landmark] agree to waive trial by jury in any action, proceeding, or counterclaim brought by or on behalf of either party against the other on any matter whatsoever related to or arising out of any Transaction, Arrangement, acquisition, proxy solicitation, or other actual or proposed acquisition or restructuring transaction or the engagement of or performance by [Landmark] hereunder.

Unsurprisingly, the parties’ dispute is not over the language of the provision, which unambiguously provides for waiver of the parties’ respective rights to a jury trial on matters arising out of the contract. Rather, it is about whether the provision is binding in light of the Extension Agreement signed two years later which extended the term of the Letter Agreement but did not, itself, contain a similar jury waiver provision.

Of the three issues, this is the most readily resolved. Paragraph 4 of the Extension Agreement provides that the Letter Agreement “shall remain in full force and effect” with the lone exception of “inconsistent” terms and conditions set forth in the Extension Agreement. Because the jury waiver provision is not inconsistent with the Extension Agreement, which contains no contrary provision, it remains in effect. Neither party disputes that the Letter Agreement and the Extension Agreement were entered into knowingly and voluntarily, nor is there any doubt that the language of the jury waiver provision covers the claims asserted. Accordingly, the jury waiver provision, considered in isolation, is otherwise valid and enforceable.

B. Preserving the Right to Trial by Jury

The constitutional right to a jury trial, which extends to “[s]uits at common law,” is guaranteed by the Seventh Amendment to the United States Constitution. A litigant may also have a statutory right to a jury trial if an applicable federal statute so provides.

Federal Rules of Civil Procedure 38 and 39 set forth the procedure a litigant must follow to preserve its pre-existing right to a jury trial. Rule 38(b) provides that, “on any issue triable of right by a jury,” a party must file a jury demand in a pleading or within 14 days after the last pleading directed to the issue is served. A litigant waives its right to a jury trial unless it files a demand pursuant to Rule 38 or reasonably relies on the properly filed jury demand of another party. Fed. R.Civ.P. 38(d); In re N-500L Cases, 691 F.2d 15, 22 (1st Cir.1982) (recognizing reliance exception). Once filed, a jury demand may not be withdrawn unless all parties consent. Fed.R.Civ.P. 38(d). If a jury trial is demanded and not withdrawn, the trial must proceed by jury unless the Court finds that “there is no right to a jury trial.” Fed.R.Civ.P. 39(a).

As plaintiff sees it, defendant’s withdrawal of its earlier jury demand is barred by Fed.R.Civ.P. 38(b), which states that a demand may be withdrawn “only if the parties consent.” Because plaintiff does not consent, it would seem to follow that defendant may not withdraw its jury demand. Plaintiff fails to acknowledge, however, that Rules 38 and 39 do not themselves confer the right to a jury trial but rather set forth the procedure a litigant must follow in order to preserve that right. Where a litigant has no right to a [121]*121jury trial or, as here, waived that right at some earlier time, a defendant’s disregard of the federal rules does not create that right out of thin air. See Kramer v. Banc of Am. Sec., LLC, 355 F.3d 961, 966-68 (7th Cir.2004); Quinn Construction, Inc. v. Skanska USA Building, Inc., No. 07-406, 2010 WL 4909587, at *2-4 (E.D.Penn. Nov. 30, 2010).

Some courts suspend their analysis at this stage, having concluded that the plaintiffs right to a jury trial, initially waived by contract, was not subsequently revived by the defendant’s subsequent jury demand. E.g., Kramer, 355 F.3d 961. This Court, however, proceeds to consider one final matter.

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863 F. Supp. 2d 118, 2012 U.S. Dist. LEXIS 67075, 2012 WL 1701558, Counsel Stack Legal Research, https://law.counselstack.com/opinion/landmark-financial-corp-v-fresenius-medical-care-holdings-inc-mad-2012.