Jury Trial Waiver: Which Party Bears Burden of Proving Knowingness & Voluntariness of Waiver? — Circuit Split

Servicios Comerciales Lamosa, S.A. v. De La Rosa, 2018 U.S. Dist. LEXIS 148905 (N.D. Tex. Aug. 30, 2018):

Before [*2]  the court are Plaintiff Revestimientos Porcelanite, S.A. de C.V.'s Motion for Summary Judgment (Doc. 90), filed April 17, 2018; Plaintiff Servicios Comerciales Lamosa, S.A. de C.V.'s Motion for Summary Judgment (Doc. 93), filed April 17, 2018; Plaintiffs' Motion to Exclude the Opinion Testimony of Defendant Mauricio De la Rosa (Doc. 96), filed April 17, 2018; and Plaintiffs' Motion to Strike Jury Demand (Doc. 98), filed April 17, 2018.1 Having considered the motions, legal briefing, appendixes, evidence, record, and applicable law, the court denies Plaintiff Revestimientos Porcelanite, S.A. de C.V.'s Motion for Summary Judgment (Doc. 90); denies Plaintiff Servicios Comerciales Lamosa, S.A. de C.V.'s Motion for Summary Judgment (Doc. 93); denies Plaintiffs' Motion to Exclude the Opinion Testimony of Defendant Mauricio De la Rosa (Doc. 96); and denies Plaintiffs' Motion to Strike Jury Demand (Doc. 98).

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IV. Plaintiffs' Motion to Strike Jury Demand

Mundo Tile requests a trial by jury. See Ans. & Countercl. ¶ 55 (Doc. 14). Lamosa Commercial Services and Porcelanite [*37]  argue that Mundo Tile relinquished its right to trial by jury when it "signed nine separate [Loan Agreements] containing conspicuous jury waivers[.]" Pls.' Mot. to Strike Jury Demand 2 (Doc. 98).9 Five of the Loan Agreements contain a clause that reads: Mundo Tile "knowingly, intentionally, irrevocably, unconditionally and voluntarily . . . waives, relinquishes, and forever forgoes the right to a trial by jury in any action or proceeding based upon, arising out of, or in any way relating to [the Loan Agreements] or any conduct, act or omission of Lender or Debtor. . . ." See Pls.' App. in Supp. of Mot. to Strike Jury Demand 9 (Guaranty Agreement ¶ 30) (Doc. 99).10 Four of the Loan Agreements contain a jury waiver covering "any action, proceeding or counterclaim arising out of or relating to any of the [Loan Agreements]." Id. at 24, 49, 77, 102, 113, 125, 137, 158. The issue presented is whether these Loan Agreements constitute a waiver by Mundo Tile of its right to a jury trial.

A. Legal Standard

The Seventh Amendment of the Constitution preserves the common law right to a jury trial in civil suits. U.S. Const. amend. VII. The right, however, may be waived by prior written agreement of the parties. Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 848, 106 S. Ct. 3245, 92 L. Ed. 2d 675 (1986); RDO Fin. Servs. Co. v. Powell, 191 F. Supp. 2d 811, 813 (N.D. Tex. 2002). "There is a presumption, however, against a waiver of the right to a jury trial." Yumilicious Franchise, L.L.C. v. Barrie, 2014 U.S. Dist. LEXIS 113049, 2014 WL 4055475, at *11 (N.D. Tex. Aug. 14, 2014) (Lindsay, J.) [*38]  (citing Powell, 191 F. Supp. 2d at 813), reconsideration denied, Yumilicious Franchise, L.L.C. v. Barrie, 2015 U.S. Dist. LEXIS 52503, 2015 WL 1822877 (N.D. Tex. Apr. 22, 2015), aff'd, 819 F.3d 170 (5th Cir. 2016). Such written agreements to waive the right to jury trial are generally enforceable against parties who bring suit, as long as the waiver was made knowingly, voluntarily, and intelligently. Jennings v. McCormick, 154 F.3d 542, 545 (5th Cir. 1998) (discussing waiver in the civil context). In determining whether a jury-trial waiver was made knowingly, voluntarily, and intelligently, courts in the Fifth Circuit generally balance four factors: (1) whether both parties had an opportunity to negotiate the terms of the agreement, (2) whether the provision waiving jury trial was conspicuous, (3) the relative bargaining power of the parties, and (4) the business acumen or professional experience of the party opposing the waiver. See, e.g., Jones v. Tubal-Cain Hydraulic Sols., Inc., 2017 U.S. Dist. LEXIS 144493, 2017 WL 3887235, at *1-2 (S.D. Tex. Sept. 5, 2017); Yumilicious, 2014 U.S. Dist. LEXIS 113049, 2014 WL 4055475, at *11; Seven Seas Petroleum, Inc. v. CIBC World Mkts. Corp., 2012 U.S. Dist. LEXIS 6940, 2012 WL 175415, at *2 (S.D. Tex. Jan. 20, 2012) (citations omitted). Some courts in the Fifth Circuit use a five-factor test that asks whether the party was represented by counsel. See, e.g., JPMorgan Chase Bank, N.A. v. Classic Home Fin., Inc., 2012 U.S. Dist. LEXIS 7525, 2012 WL 201533, at *3 (S.D. Tex. Jan. 23, 2012), aff'd, 548 F. App'x 205 (5th Cir. 2013); Westside-Marrero Jeep Eagle, Inc. v. Chrysler Corp., Inc., 56 F. Supp. 2d 694, 707 (E.D. La. 1999) (citation omitted). Although the court will not treat legal representation as an additional factor, the court will address this inquiry within its discussion of the third and fourth factors (disparity of bargaining power and business acumen). See, e.g., Jones, 2017 U.S. Dist. LEXIS 144493, 2017 WL 3887235, at *1 (finding that inquiry into legal representation is [*39]  subsumed within the broader third and fourth factors).

"Circuits are split on the issue of which party in a jury trial waiver dispute bears the burden of showing the knowingness and voluntariness of a waiver." 2017 U.S. Dist. LEXIS 144493, [WL] at *1-2 (collecting cases). The Fifth Circuit has yet to decide the issue. Id.; see also Zavala v. Aaron's, Inc., 2015 U.S. Dist. LEXIS 127775, 2015 WL 5604766, at *2 (E.D. Tex. Sept. 23, 2015) (recognizing that the Fifth Circuit has "never expressly decided the issue"); Yumilicious, 2014 U.S. Dist. LEXIS 113049, 2014 WL 4055475, at *11 (same); Powell, 191 F. Supp. 2d at 813 (same). In keeping with the majority of federal courts in this circuit, this court previously recognized that the burden of demonstrating waiver should be placed on the party asserting waiver. Yumilicious, 2014 U.S. Dist. LEXIS 113049, 2014 WL 4055475, at *11; see also Jones, 2017 U.S. Dist. LEXIS 144493, 2017 WL 3887235, at *2 (placing the burden on the party seeking waiver and noting that "several of our sister district courts recognize that the majority of federal courts place the burden on the party seeking waiver and have followed suit") (citations omitted); Zavala, 2015 U.S. Dist. LEXIS 127775, 2015 WL 5604766, at *2 (collecting cases). Accordingly, in keeping with its prior jurisprudence and the majority of federal courts to consider the issue, the court places the burden on Lamosa Commercial Services and Porcelanite to demonstrate that Mundo Tile knowingly, voluntarily, and intelligently waived the right to a jury trial.

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