Pearson v. Countrywide Home Loans, Inc. et al
Filing
76
ORDER granting 15 Defendants' Joint Motion to Strike Plaintiff's Demand for Jury Trial. The jury trial waiver located in the loan documents is conspicuous, plainly worded so as not to require any special education to understand, and there is no evidence the Plaintiff was in a weaker bargaining position and unable to negotiate terms of the contract. See Order for further details. Signed by Judge Elizabeth A. Kovachevich on 2/6/2015. (rjm)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
JOEL T. PEARSON,
Plaintiff,
vs.
CASE NO. 8:13-CV-1075-T-17AEP
COUNTRYWIDE HOME LOANS, INC.
AND BANK OF AMERICA
CORPORATION,
Defendants.
_____________________________________/
ORDER GRANTING DEFENDANTS’
MOTION TO STRIKE PLAINTIFF’S DEMAND FOR JURY TRIAL
This matter comes before the Court pursuant to Defendants’, COUNTRYWIDE
HOME LOANS, INC. (“Countrywide”) and BANK OF AMERICA CORPORATION (“Bank
of America”), Joint Motion to Strike Plaintiff’s Demand for Jury Trial, (Doc. # 15), filed
March 3, 2014, and JOEL PEARSON’s (“Plaintiff”) Response in Opposition, (Doc. # 19),
filed March 24, 2014. For the reasons set forth below, the Plaintiff’s Motion is GRANTED.
BACKGROUND AND PROCEDURAL HISTORY
In 2005, Plaintiff and his former wife, Jean Pearson, decided to purchase a
condominium in Venice, Florida. (Doc. # 2, ¶7). Plaintiff and his former wife contacted
Anthony Clevenger (“Clevenger”) with Countrywide to arrange financing.
Id. at ¶8.
Plaintiff alleges Clevenger and Countrywide helped Plaintiff and his former wife structure
the financials and details of the loan application in a manner that would allow Plaintiff and
his former wife to obtain a loan for which they might otherwise not qualify, id. at ¶¶8–10:
Plaintiff and his former wife had an approximated $4,000.00 monthly income, whereas
CASE NO. 8:13-CV-1075-T-17AEP
the loan application stated an approximate $21,600.00 monthly income, id. at ¶11; the
down payment for the loan was sourced from a home equity loan, but the loan application
stated the down payment was from their savings account, id; and the Plaintiff was not
employed and in the process of obtaining social security disability, while the loan
application represented he was employed. Id.
On September 30, 2005, Countrywide issued a loan to Plaintiff and his former wife
in the sum of $516,000.00. The parties executed a mortgage to secure the note. Id. at
¶14–16. With the proceeds of the home equity loan Plaintiff and his former wife obtained,
as well as the $516,000.00 loan from Countrywide, Plaintiff and his former wife purchased
the condominium unit in Venice, Florida, for $645,000.00. Id. at ¶17. Unable to fulfill the
obligations and payments on the loan, Plaintiff and his former wife sold the condominium
via short sale, and subsequently brought the subject action against Countrywide and its
successor-in-interest Bank of America. Id. at ¶¶18, 3.
On March 15, 2013, Plaintiff brought the subject action in state court, and
Defendants timely removed the action to district court. (Doc. ## 1, 2). In his Complaint,
Plaintiff alleges the Defendants: 1) violated the Truth in Lending Act, 15 U.S.C. § 1601,
and Federal Reserve Regulation Z, 12 C.F.R. § 226.1; 2) violated the Real Estate
Settlement Procedures Act, 12 U.S.C. § 2601, and Regulation X, 24 C.F.R. § 3500;
3) breached a fiduciary duty owed to Plaintiff; 4) misrepresented the interest rate of the
loan and Plaintiff’s ability to fulfill the monthly mortgage obligation; 5) negligently
supervised Clevenger’s lending practices; and 6) violated Florida’s Deceptive and Unfair
Trade Practices Act (“FDUPTA”). Id. at ¶¶19–68. On April 29, 2013, Defendants jointly
moved to dismiss Plaintiff’s Complaint in its entirety, (Doc. # 7), and Plaintiff responded
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in opposition May 10, 2013. (Doc. # 9). The Court dismissed Counts I, II, IV, and V of the
Complaint, and allowed Plaintiff to proceed on Counts III and VI, (Doc. # 16), for which
Plaintiff demanded a jury trial. (Doc. # 2).
Defendants jointly move to strike Plaintiff’s demand for jury trial based on the jury
trial waiver contained in the mortgage. (Doc. # 15). Plaintiff opposes the motion, and
contends: 1) Defendants failed to meet their burden of proof that Plaintiff knowingly,
voluntarily, and intelligently waived his right to jury trial; 2) Defendants failed to show that
the relevant factors for analyzing a jury trial waiver militate in their favor; and 3) striking
the jury trial is unconscionable, contrary to public policy, and unfair. (Doc. # 19).
LEGAL STANDARD
To determine whether a jury trial waiver is knowing and voluntary, courts consider,
among other factors: 1) the conspicuousness of the provision of the contract; 2) the level
of sophistication and experience of the parties entering into the contract; 3) the
opportunity to negotiate terms of the contract; 4) the relative bargaining power of each
party; and 5) whether the waiving party was represented by counsel. Correa v. BAC
Home Loans Servicing LP, 2012 WL 1176701 at *15 (M.D. Fla. 2012) (citing Collins v.
Countrywide Home Loans, Inc., 680 F.Supp.2d 1287, 1294 (M.D. Fla. 2010); Allyn v.
Western United Life Assurance Co., 347 F.Supp.2d 1246, 1251 (M.D. Fla. 2004). No
single factor is determinative; rather, the Court must determine “whether, in light of all the
circumstances, the Court finds the waiver to be unconscionable, contrary to public policy,
or simply unfair.” Allyn, 347 F.Supp.2d at 1252.
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DISCUSSION
The waiver, in light of the circumstances, is not unconscionable, contrary to public
policy, or unfair. The parties do not dispute the waiver at issue reads as follows:
25. Jury Trial Waiver. The Borrower hereby waives any right
to a trial by jury in any action, proceeding, claim, or
counterclaim, whether in contract or tort, at law or in equity,
arising out of or in any way related to this Security Instrument
or the Note.
(Doc. # 15-1 at 11).
The jury trial waiver is conspicuous. Plaintiff implores the Court to consider “where
the waiver appears in the document [], where signatures appear in the document [],
whether initials are required where the waiver is located on the page, or on the page itself.
…along with type face, whether the type is in captials, bold, etc.” (Doc. # 19 at 4–5).
Plaintiff’s counsel admits the waiver “was not especially hidden or buried deep in the
mortgage,” but argues the font size was unchanged from the rest of the document, the
font size was not in bold typeface or capital letters, and Plaintiff was not required to initial
the area. (Doc. # 19 at 5). Plaintiff’s counsel cites cases in which courts have found
waivers conspicuous.
In Collins v. Countrywide Home Loans, Inc., the jury waiver
appeared directly above the plaintiff’s signature. 680 F.Supp.2d. 1287 (M.D. Fla. 2010).
In Oglesbee v. IndyMac Financial Services, the plaintiff initialed the page that contained
the jury trial waiver. 675 F.Supp.2d 1155 (S.D. Fla. 2009). Plaintiff’s signature appears
less than one inch away from the jury trial waiver, and the waiver is below a section
entitled “Attorneys’ Fees.” (Doc. # 15-1 at 11). These are the only provisions, and both
titles appear in bold, contained on the last page of the mortgage—the page Plaintiff
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signed. (Doc. # 15-1 at 11). The jury trial waiver is worded in clear and unambiguous
language. Plaintiff’s counsel’s arguments fail to move the Court.
Plaintiff claims “[t]he allegations contained in the Complaint filed in this
action…plainly illustrate Plaintiff’s lack of both sophistication and experience in these
matters,” and that Defendants bear the burden of establishing the level of sophistication
of Plaintiff. The Court is unmoved by this argument. In Correa—a case Plaintiff’s counsel
cited in his Response in Opposition—the court found the plain language of a similarlyworded jury trial waiver did “not require any special education or expertise to understand”
the implications of the waiver, and that “disputes in any loan agreement are reasonably
foreseeable.” Correa, 2012 WL 1176701 at *16. Here, the jury trial waiver was sufficiently
worded in plain language so as to allow even an unsophisticated, inexperienced borrower
to understand he or she waived his or her right to a jury trial.
Plaintiff next argues his individual, rather than corporate, status, places him at a
weaker bargaining position and inability to negotiate the terms of the contract. Plaintiff
admits he “[a]rguably…could have walked away from the transaction,” and that Plaintiff
and his wife “placed a substantial deposit as a downpayment [sic] on the transaction.”
(Doc. # 19 at 7). Plaintiff posits that Plaintiff and his wife would have lost their substantial
deposit had they walked away from the deal by unsuccessfully demanding Defendants
strike the jury trial waiver—that, essentially, Plaintiff and his wife had no other choice but
to sign the document. (Doc. # 19 at 7). Plaintiff offers no evidence to this effect—either
in the form of sworn deposition testimony or sworn affidavits. This same argument, and
the lack of submitted evidence, was summarily dismissed in Correa. 2012 WL 1176701
at * 16). It is so dismissed here.
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Plaintiff finally argues Plaintiff was without legal representation at the closing of the
mortgage transaction. (Doc. # 19 at 8). Correa also addresses this factor, ruling “a
contractual waiver is not unenforceable because one party is ‘a large corporation
represented by counsel and the other party is an individual not represented by counsel.’”
Correa, 2012 WL 1176701 at *16 (quoting Collins, 680 F.Supp.2d at 1296).
Based on the foregoing analysis, and the totality of the circumstances, Plaintiff
knowingly and voluntarily waived his right to a jury trial. The jury trial waiver is applicable
to the claims raised in Plaintiff’s Complaint because they arise out of or are related to the
security instrument or note. Accordingly, it is ORDERED that Plaintiff’s demand for jury
trial is stricken, and this matter will proceed as a bench trial.
DONE and ORDERED in Chambers, in Tampa, Florida, this 6th day of February,
2015.
Copies to:
All Counsel and Parties of Record
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