Shuffle Tech made automatic card-shuffling equipment for the consumer market and particularly for casinos. In 2010, Shuffle Tech and Wolff Gaming, a distributor of the equipment, signed a letter of intent that expressed their mutual commitment to proceed with a draft agreement regarding product development and distribution.
The agreement laid out a deal in which Shuffle Tech and Wolff Gaming would collaborate to develop a casino-grade shuffling machine. In return for providing financial assistance, Wolff would become the exclusive equipment distributor in the Western Hemisphere.
The next year, but before the new equipment was developed, Shuffle Tech wrote to Wolff proposing that the companies part ways and settle all outstanding business. Several months later, Shuffle Tech filed a lawsuit in the federal court seeking a declaratory judgment that the draft agreement was not an enforceable contract, that the letter of intent was enforceable and that Wolff had broken the letter of intent agreement.
Wolff filed a counterclaim claiming breach of contract, fraud and unjust enrichment. The U.S. District Court judge granted summary judgment for Shuffle Tech as to its requested declaratory judgment and to Wolff’s counterclaims.
The trial judge also granted summary judgment in favor of Wolff as to Shuffle Tech’s breach of contract claim. In effect, the district court judge rescinded the draft agreement. In granting declaratory relief, the judge did not mention the return of earnest money that Wolff had paid Shuffle Tech upon signing the letter of intent.
After the district court’s decision, Wolff requested the return of the earnest money. Shuffle Tech refused. Then Wolff filed a motion based on Federal Rule 60 requesting that the district court judge order Shuffle Tech to refund the earnest money. In response, the court entered a post-judgment order that amended the final judgment to specify that Shuffle Tech was required to return the earnest money to Wolff. Shuffle Tech then appealed claiming that it had no obligation to return that money.
The U.S. Court of Appeals began its opinion by noting that Rule 60(a) allows the district court judge to correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment or order. The Rule allows a judge to do so sua sponte or on motion from a party, with or without notice to the parties.
However, the panel continued stating that when the ground for changes in the judgment is likely to raise an issue that may benefit from an adversary point of view, Rule 60(b) does require explaining the reason for the change to be set out in a motion by that party.
The appeals panel then noted that one significant difference between Rule 60(a) and Rule 60(b) is that a correction authorized by Rule 60(a) may be made at any time, even years after the entry of a judgment, but that Rule 60(b) has deadlines. The court cited United States v. Griffin, where it was noted that the deadlines were in place to prevent interest payments created by a reasonable reading of an original judgment.
The court of appeals then concluded that it was not possible for Shuffle Tech to reasonably rely upon the original judgment entered by the district court as rescission of a contract. The judgment was not intended to put the parties in a position they would have occupied had there never been a contract. Furthermore, the panel noted that the interval between the original judgment and the correction was just 29 days, a time period that was not long enough to be likely to upset interest payment. Therefore, the decision of the district court judge was affirmed.
Shuffle Tech International, LLC v. Wolff Gaming, Inc. No. 13-3576 (U.S. Court of Appeals, 7th Cir., July 9, 2014).
Kreisman Law Offices has been handling business disputes, commercial litigation and contract litigation for individuals, families and businesses for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Roselle, Rosemont, Sauk Village, Schaumburg, Winnetka, Westchester, River Forest, Oak Forest, Midlothian, Morton Grove, Maywood, Markham, Matteson, Lansing, Highwood, Homewood, Brookfield, Broadview, Bridgeview, Blue Island, Bellwood, Barrington, Alsip, Chicago (Back of the Yards, Armitage, Lincoln Square, Lithuanian Plaza, Little Italy, Lower West Side, McKinley Park, Near Northside, Norwood Park, Old Town, Pill Hill, Printer’s Row, Princeton Park, Portage Park, Sheffield, Hyde Park, Irving Park), Round Lake and Palatine, Ill.
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