Integrated Management Systems, Inc. v. Basavegowda

Filing 31

ORDER granting 22 Motion to Strike Jury Demand. Signed by District Judge Denise Page Hood. (DTof)

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.403 Filed 12/03/20 Page 1 of 11

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
INTEGRATED MANAGEMENT
SYSTEMS, INC.,
Plaintiff,

CASE NO. 17-13764
HON. DENISE PAGE HOOD

v.
MAHESH BASAVEGOWDA,
Defendant.
/
ORDER GRANTING PLAINTIFF’S MOTION TO STRIKE DEMAND FOR
JURY TRIAL [#22]
I.

BACKGROUND
A. Procedural History
On or about November 20, 2017, Plaintiff Integrated Management Systems

Incorporated (“Plaintiff” or “IMSI”) commenced this action, asserting one count
for Breach of Contract against Mahesh Basavegowda (“Defendant”). [ECF No. 1]
A jury trial was scheduled for January 2020, but it was postponed for a settlement
conference. Currently, there is no jury trial date set. On January 21, 2018,
Defendant filed an answer, affirmative defenses, and a jury demand. [ECF No.
10]. On March 18, 2020, IMSI filed a motion to strike Defendant’s jury demand.
[ECF No. 22]

1

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.404 Filed 12/03/20 Page 2 of 11

B. Factual Background

Plaintiff IMSI is an information technology (“IT”) staffing firm that hires
skilled IT workers, facilitates their emigration to the United States, and places
them with end clients. [ECF No. 12, Pg. ID 207; ECF No. 4] On April 26, 2017,
Defendant, a highly skilled IT worker, signed the Employment Agreement with
IMSI as a programmer. [ECF No. 22-2, Employment Agreement] The
Employment Agreement contains a non-compete provision that states that
Defendant agrees to not obtain employment directly with Plaintiff’s end-client for
at least 2 years after start of employment with Plaintiff for an end-client. Id. The
alleged violation of the non-compete provision is the basis of IMSI’s breach of
contract claim against Defendant. [ECF No. 1]
The signed Employment Agreement also contains a jury trial waiver which
states that each of the parties knowingly and voluntarily agree to have all disputes
determined in front of a judge instead of a jury. [ECF No. 22-2] Two years after
Defendant filed his demand for a jury trial, Plaintiff now asks the Court to grant
their motion to strike the demand for a jury trial because Defendant knowingly and
voluntarily agreed to the jury waiver. [ECF No. 4; ECF No. 22]

2

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.405 Filed 12/03/20 Page 3 of 11

II.

LEGAL ANALYSIS
A. Standards of Review
Rule 39 and 39(a)(2) of the Federal Rules of Civil Procedure (“FRCP”)

provide that “the trial on all issues so demanded must be by jury unless: the court,
on motion or on its own, finds that on some or all of those issues there is no federal
right to a jury trial.” Fed. R. Civ. P. 39 & 39(a)(2). Rule 39 imposes no time
restraints or deadline on the filing of a motion to strike a jury demand.
The question of right to jury trial is governed by federal and not state law
and parties to a contract may by prior written agreement waive the right to jury
trial. K.M.C. Co. v. Irving Tr. Co., 757 F.2d 752, 755 (6th Cir. 1985). The United
States Court of Appeals for the Sixth Circuit holds that the constitutional right to
jury trial may only be waived if done knowingly, voluntarily and intentionally. Id.
“In evaluating whether a [waiver] has been knowingly and voluntarily executed,
we look to (1) plaintiff's experience, background, and education; (2) the amount of
time the plaintiff had to consider whether to sign the waiver, including whether the
employee had an opportunity to consult with a lawyer; (3) the clarity of the waiver;
(4) consideration for the waiver; as well as (5) the totality of the circumstances.”
Morrison v. Circuit City Stores, Inc., 317 F.3d 646, 668 (6th Cir. 2003) (citing
Adams v. Philip Morris, Inc., 67 F.3d 580, 583 (6th Cir. 1995)). The party seeking
to avoid a jury trial waiver must show that they did not knowingly and voluntarily

3

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.406 Filed 12/03/20 Page 4 of 11

agree to the provision. High v. Capital Senior Living, Inc., 594 F. Supp. 2d 789,
800 (E.D. Mich. 2008).
B. Application
Defendant responded to Plaintiff’s motion by claiming that the motion to
strike was so “grossly untimely” as to result in a waiver by the Plaintiff of any
objection to Defendant’s jury demand and prejudice to Defendant if granted. [ECF
No. 27, Pg. ID 377]. In their reply, Plaintiff states that not only has Defendant
made no demonstration that he knowingly and voluntarily agreed to the jury
waiver, but that their motion was not untimely, and Plaintiff did not waive their
right to strike the jury demand.
Defendant does not deny that Mr. Basavegowda knowingly and voluntarily
agreed to the jury trial waiver. Instead, Defendant argues that Plaintiff’s motion
should be denied because it is egregiously untimely. [ECF No. 27, Pg. ID 377]
Defendant not only argues that this untimeliness has waived the Plaintiff’s right to
challenge the jury demand, but that if this motion were to be granted, it would
result in prejudice to Defendant due to the amount of time spent preparing for a
jury trial. Id. at 383-387. Lastly, Defendant argues that COVID-19 should have
no impact on the Court’s denial of Plaintiff’s motion due to the Court’s ability to
take precautions to ensure everyone’s health and safety.

4

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.407 Filed 12/03/20 Page 5 of 11

1. Plaintiff’s motion was not untimely because there is no binding
authority that would suggest the opposite.
While Plaintiff’s motion to strike the jury demand seems to be extremely
late, both parties have already stated in their briefs that Rule 39(a)(2) of the FRCP
imposes no time restraint on when the motion can be filed. [ECF No. 22, Pg. ID
348; ECF No. 27, Pg. ID 382] Defendant attempts to ameliorate this admission by
citing to non-binding authority that demonstrates that “the court has discretion to
decide whether a motion to strike a jury demand is timely or too late.” Id. Burton
v. Gen. Motors Corp., Case No. 1:95-cv- 1054-DFH-TAB, 2008 WL 3853329 at
*7 (S.D. Ind. Aug. 15, 2008) (Ex. 2) (citing Tracinda v. Daimler Chrysler AG, 502
F.3d 212, 226-27 (3d Cir. 2007)). On the contrary, Plaintiff has cited to binding
Sixth Circuit cases and federal court cases within the Sixth Circuit in support of
their motion.
As it concerns Defendant’s issue with the timeliness of the motion, not only
does FRCP 39 state no time restraint on filing the motion, but Plaintiff has cited to
federal courts within the Sixth Circuit that hold the same. [ECF No. 22, Pg. ID
348] As stated in Jones-Hailey, “[Rule 39] contains no time limit within which
TVA was required to object to Jones-Hailey’s jury demand. This Court cannot
impose a right to a jury trial where none exists even though TVA waited until one
month before the scheduled trial date to move the Court to strike the jury demand.”

5

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.408 Filed 12/03/20 Page 6 of 11

Jones-Hailey v. Corp. of Tenn. Valley Auth., 660 F. Supp. 551, 553 (E.D. Tenn.
1987).
In their response brief, Defendant cited to Burton which stated that the Court
has discretion to decide whether the motion was timely or not. [ECF No. 27, Pg.
ID 382] Burton v. Gen. Motors Corp., Case No. 1:95-cv- 1054-DFH-TAB, 2008
WL 3853329 at *7 (S.D. Ind. Aug. 15, 2008). However, Plaintiff cites to two
Eastern District of Michigan cases where it was determined that out-of-circuit
cases were not controlling. [ECF No. 29, Pg. ID 396]; Little v. United States, 242
F. Supp. 2d 478, 481 (E.D. Mich. 2003); Grove Press, Inc. v. Blackwell, 308 F.
Supp. 361, 373 (E.D. Mich. 1969). Due to the fact that Defendant has cited to no
binding authority to support their position, while Plaintiff has cited to binding
authority to support their position and because both parties agree that Rule 39 has
no time restraint, Defendant’s argument that the motion was untimely fails before
the Court.
2. Due to the fact that Rule 39(a)(2) imposes no time restraint on when a
motion to strike a jury demand can be filed, Plaintiff has not waived
their right to file the motion due to a delay.
Defendant stated in their response brief that courts have denied a Rule
39(a)(2) motion when it is filed on the eve of trial and that Plaintiff can waive their
right to file this motion as a result of their delay in filing. [ECF No. 27, Pg. ID
383] In support of their position, Defendant again cites to a series of non-binding

6

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.409 Filed 12/03/20 Page 7 of 11

authority where the party that filed the Rule 39(a)(2) motion was denied based
upon their significant delay in filing the motion. Id. at 383-384; Burton v. Gen.
Motors Corp., Case No. 1:95-cv-1054-DFH-TAB, 2008 WL 3853329 at *7 (S.D.
Ind. Aug. 15, 2008); Adams v. Falcon Drilling Co., Case No. CIV.A. 97-1143,
1998 WL 195981 at **1-2 (E.D. La. 1998); United States v. 79.36 Acres of Land,
No. 90-15779, 1991 WL 275355 at **2-3 (9th Cir. Dec. 20, 1991); Cantiere
DiPortovenere Piesse S.p.A. v. Kerwin, 739 F.Supp. 231, 235 (E.D. Pa. 1990).
As stated in Plaintiff’s reply brief, these cases are non-binding and out of
context because none of the cases involved a jury waiver. [ECF No. 29, Pg. ID
396-397] In Burton, unlike here, a knowing and voluntary waiver of the right to a
jury trial was not present. Id. at 396. In Adams, the court denied Plaintiff’s motion
to strike their own jury demand on the basis of FRCP 15 and not on FRCP 39(a)(2)
or a knowing and voluntary standard. Id. at 397. In 79.36 Acres of Land, the court
decided, on the basis of FRCP 71A(h), that defendant’s delay in moving to strike
resulted in the plaintiff’s jury demand being improperly stricken. Id. Because the
case was not decided on FRCP 39(a)(2) grounds, it is not useful for guidance in
this matter. Finally, in Cantiere, similar to the other cases cited by Defendant,
there was no jury waiver and the court denied the defendant’s motion to strike their
own jury demand based on standards that do not involve FRCP 39(a)(2). Id.;

7

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.410 Filed 12/03/20 Page 8 of 11

Cantiere DiPortovenere Piesse S.p.A. v. Kerwin, 739 F.Supp. 231, 235 (E.D. Pa.
1990).
While these cases all involve situations where the court denied the party
filing the motion to strike the jury demand on the premise that the motion was filed
too late, none of these cases are controlling and the decisions of the court were not
based upon one of the party’s waiving their right to have a jury trial as in this case.
FRCP 39(a)(2) does not have a time limit on when the motion to strike a jury
demand can be filed. FRCP 39(a)(2) also does not state that a plaintiff can waive
their motion to strike after a significant delay. While other, out-of-circuit courts
have ruled this a possibility, Defendant has cited to no Sixth Circuit cases where
this has happened. Due to Defendant’s lack of controlling cases on this point, the
Court rules that Plaintiff has not waived their right to file a motion to strike a jury
demand.
3. The Defendant has cited to no in-circuit authority that states that
prejudice to the Defendant is the, or is a part of the, standard for
denying a Rule 39(a)(2) motion.
In Defendant’s response brief, it was argued that the motion to strike the jury
demand should be denied because the timing of the filing is prejudicial to the
Defendant’s trial preparation. [ECF No. 27, Pg. ID 387] In support of this
argument, Defendant cites to two non-binding cases where the court refused to
strike the jury demand because the parties had already prepared their cases for a

8

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.411 Filed 12/03/20 Page 9 of 11

trial by jury and granting the motion would present a “deleterious effect on the
orderly preparation for trial for both the parties and the Court.” Id.; Burton v. Gen.
Motors Corp., Case No. 1:95-cv-1054-DFH-TAB, 2008 WL 3853329 at *7 (S.D.
Ind. Aug. 15, 2008); Adams v. Falcon Drilling Co., Case No. CIV.A. 97-1143,
1998 WL 195981 at *2.4 (E.D. La. 1998).
While Plaintiff’s motion was filed over two years after the jury demand was
filed, Defendant has cited to no controlling authority that states that prejudice to a
party is a factor in the decision of denying a motion to strike a jury demand.
Defendant also has not addressed the test laid out in High, where the Eastern
District of Michigan adopted the Sixth Circuit’s five-factor test to decide whether a
waiver of the right to a jury trial was knowing and voluntary. High v. Capital
Senior Living Props. 2 Heatherwood, Inc., 594 F. Supp. 2d 789, 800 (E.D. Mich.
2008). In High, the court stated, “where there is a clear, express waiver of the right
to a jury trial, the party seeking to avoid that waiver must demonstrate that she did
not knowingly and voluntarily agree to the provision.” Id. Defendant has not
argued that his signing of the waiver was not knowing and voluntary. In fact,
Defendant admitted to signing the employment agreement in earlier pleadings.
[ECF No. 16, Pg. ID 289] Because Defendant ignored this controlling standard in
their response brief, it cannot be said that they have satisfied it. Due to this fact,

9

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.412 Filed 12/03/20 Page 10 of 11

the Court finds that Defendant’s signing of the employment agreement with the
jury trial waiver was knowing and voluntary.
4. Plaintiff has provided valid public health and safety concerns.
Defendant argued in their response brief that the ongoing pandemic should
have no influence on the decision to deny Plaintiff’s motion to strike the jury
demand because the Court has the ability to enact measures to ensure everyone’s
health and safety. [ECF No. 27, Pg. ID 388] However, in Plaintiff’s motion to
strike, it was argued that the totality of circumstances weighed in favor of granting
Plaintiff’s motion to strike. [ECF No. 22, Pg. ID 352] The totality of
circumstances is one factor of the five-factor test adopted by the Eastern District of
Michigan in High that Defendant failed to address. High, 594 F. Supp. 2d at 800.
Plaintiff argued that jurors would be subjected to the risk of contracting the virus
by being in close proximity with each other and that it has been recommended by
government leaders to socially distance in order to limit the spread of the virus.
[ECF No. 22, Pg. ID 352] Plaintiff’s argument for a bench trial seems to better
serve the interests of public health and safety as many credible government
officials (CDC; U.S. Department of Health & Human Services; Governor Gretchen
Whitmer) have stated, like Plaintiff argued in their motion, unnecessary human
contact should be avoided. Id. What makes human contact unnecessary in this
case is the fact that Defendant knowingly and voluntarily signed an employment

10

Case 2:17-cv-13764-DPH-RSW ECF No. 31, PageID.413 Filed 12/03/20 Page 11 of 11

agreement with a jury trial waiver. Due to the fact that Plaintiff’s argument better
suits public safety during this global pandemic, the Court finds in favor of Plaintiff
and GRANTS the Motion to Strike the Jury Demand.
III. CONCLUSION
Due to Defendant’s arguments not being based on controlling authority and
their neglect in addressing the five-factor test adopted by the Eastern District of
Michigan, Plaintiff prevails on their Motion to Strike the Jury Demand.
For the reasons stated above,
IT IS HEREBY ORDERED that Plaintiff’s Motion to Strike the Jury Demand
[ECF No. 22] is GRANTED.
s/Denise Page Hood
DENISE PAGE HOOD
United States District Judge

DATED: December 3, 2020

11