CBR Funding, LLC v. Jones et al
Filing
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ORDER GRANTING DEFENDANTS' 73 MOTION FOR JURY TRIAL. Signed by Chief Judge J. Daniel Breen on 9/14/15. (Breen, J.)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
EASTERN DIVISION
CBR FUNDING, LLC
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Plaintiff,
v.
CHARLES A. JONES and
SARAH C. JONES,
Defendants/Third-Party Plaintiffs,
v.
DAVID B. GRIFFIN,
Third-Party Defendant.
No. 13-1280
ORDER GRANTING DEFENDANTS’ MOTION FOR JURY TRIAL
On September 20, 2013, the Plaintiff, CBR Funding, LLC (“CBR Funding”) initiated this
lawsuit against Defendants, Charles A. Jones and Sarah C. Jones, in Henry County, Tennessee
Chancery Court alleging breach of contract claims. (Docket Entry (“D.E.”) 1.) The Defendants
removed the case to this Court under diversity jurisdiction. (D.E. 1.) Both parties submitted
motions for summary judgment. (D.E. 23 & 33.) On November 14, 2014, this Court ruled that
CBR Funding was entitled to summary judgment on the issue of Defendants’ liability but denied
summary judgment on the issue of damages.1 (D.E. 49.) Defendants then filed a Motion for
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Plaintiff argues that this Court could dispose of the issue of damages by setting a
hearing pursuant to existing proceedings under Fed. R. Civ. P. 56. (D.E. 75.) However, this
Court has fully disposed of the Rule 56 motions in this case, and therefore setting a hearing
pursuant to Rule 56 would be improper.
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Jury Trial on the issue of damages. (D.E. 73.) For the reasons discussed below, Defendants’
motion is GRANTED.
Analysis
1. Validity of the Jury Waiver Provision
Although the right to a jury trial is guaranteed, the relinquishment of such right is allowed
pursuant to both the Sixth Circuit and Tennessee jurisprudence if the waiver is valid.2 See Key
Equip. Fin., Inc. v. Poag McEwen Lifestyle Ctrs., LLC, No. 2:09-cv-02731-JPM-tmp, 2010 WL
2696195, at *2 (W.D. Tenn. July 6, 2010) ( “It is well settled, however, that parties to a contract
may waive this [Seventh Amendment] right [to a jury] by prior written agreement.”); Regions
Bank v. Lost Cove Cabins & Campgrounds, Inc., No. M2009-02389-COA-R3-CV, 2010 WL
4514957, at *4 (Tenn. Ct. App. Nov. 9, 2010) (a jury waiver is valid if it is “knowing, voluntary,
and intelligent”). Here, the validity of the jury waiver is not at issue as Defendants never
challenged its legitimacy. (D.E. 76).
2. Enforcement of the Jury Waiver Provision
Defendants contend that they “have a right to jury trial because Plaintiff, itself, made a
demand for a jury. By including the jury demand in its Complaint, Plaintiff has waived any rights
it may have had to enforce the contractual waiver of a jury trial.” (D.E. 76 at 3.) The Complaint
was filed in 2013. (D.E. 1). Additionally, Defendants highlight that Plaintiff had not withdrawn
its jury demand, did not object to this Court setting the matter for a jury trial, and included the
phrase “JURY DEMAND” in all caps in its pleadings—most notably in its Response in
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As discussed in this Court’s Order Granting in Part and Denying n Part Plaintiff’s
Motion for Summary Judgment and Denying Defendants’ Motion for Summary Judgment,
Tennessee law governs pursuant to the valid choice-of-law provisions contained in the contracts
at issue. (D.E. at 10-11.)
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Opposition to Defendants’ Motion for Jury Trial. (D.E. 75 at 1.) Plaintiff argues the jury waiver
is enforceable regardless of its original demand and in an effort to clarify its current position, has
withdrawn its request for a jury and waived any right to a jury trial. (D.E. 77-1 at 1.)
A party may waive its right to enforce a contract clause if it engages in “unequivocal and
decisive acts . . . or an act which shows determination not to have the benefit intended . . . .” Key
Equip. Fin., Inc., 2010 WL 2696195, at *4. In Key, the plaintiff filed a motion to strike the
defendants’ jury demand pursuant to the parties’ contractual jury waiver provision. Id. at *1.
The plaintiff never made a jury demand. Id. After the filing of the complaint but before the
defendants filed their answer, the plaintiff’s counsel sent the defense counsel a proposed
scheduling order. Id. The defense counsel made several changes, including a one to reflect a
jury trial. Id. After receiving the changes, the plaintiff’s attorney submitted the proposed order
without any alterations to the Magistrate Judge. Id. The Magistrate Judge’s assistant contacted
both parties confirming the indication of a jury request was correct. Id. While the defense
responded affirmatively, stating a demand would be made in the answer, the plaintiff never
replied. Id. After both the scheduling order was entered and the defendants filed their answer
containing a jury demand, the plaintiff asserted the defense was precluded from seeking a trial by
jury because of the contractual waiver. Id. at *2. The defendants argued that the plaintiff
consented to the jury trial because it forwarded the proposed scheduling order to the Magistrate
Judge without removing the jury request and it did not object to the subsequent email inquiry.
Id. at *4. The court rejected the defendants’ arguments, finding that these actions did not amount
to consent and further, were “not a clear, unequivocal, decisive act signaling its intent not to
claim the benefits of the waiver provision.” Id. (internal citations omitted). In its holding, the
court pointed out that the plaintiff “had not requested a jury trial in its [c]omplaint, [the
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d]efendants had not yet filed their [a]nswer requesting a jury trial, and entering a scheduling
order that indicates a trial by jury is not a recognized method of requesting a jury trial . . . .” Id.
Finally, the court held that the “[p]laintiff’s silence leading up to and at the time of the entry of
the Scheduling Order was not unequivocally inconsistent with claiming its rights under the jury
waiver provisions.” Id.
Additionally, in Regions Bank, the Tennessee Court of Appeals held that the plaintiff did
not waive its right to enforce a jury waiver provision simply because it failed “to timely object to
the demand [by the defendant] and allow[ed] the matter to be set for a jury trial on more than one
occasion.” Regions Bank, 2010 WL 4514957, at *5. There, the defendants filed a jury demand
in both their answer and counterclaim in November 2004, and “for some period of time,” the
case was set on a jury docket. Id. at *3-5. At no point did the plaintiff demand a jury trial. See
id. at 3. Almost four years later, the plaintiff moved to strike the demand pursuant to the parties’
contractual jury waiver. Id. at *5. The trial court granted the plaintiff’s motion and in a
subsequent bench trial, found against the defendants. Id. at *3. On appeal to the Tennessee
Court of Appeals, the defendants argued that the plaintiff’s failure to object to their jury demand
for four years and allow a jury trial to be set at one point constituted an effective waiver. Id. at
*5. The court rejected the defendants’ argument. Id. at 6. Citing to the rule that allows a party
to move to strike a jury demand “up to the eve of trial,” the court found the entry of a scheduling
order and a lack of an objection was not enough to constitute a “clear, unequivocal and decisive
act[] . . . .” See id. at *5-6.
In the instant matter, Plaintiff specifically demanded a jury in its complaint. (D.E. 1-1.)
The demand itself was emphasized in a separate section, entitled “JURY DEMAND”—in all
caps and bold lettering, which stated that “Plaintiff demands that this case be tried before a jury
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of twelve.” Id. This demand was the last section before Plaintiff’s counsel affixed his name. Id.
After the Complaint was filed on September 20, 2013, a jury trial was scheduled for December
10, 2014, to which CBR Funding did not object. (D.E. 1, 22.) Further, it consistently filed all of
its motions with the words “JURY DEMAND” in the captions, including in its Response in
Opposition to Defendants’ Motion for Jury Trial. (D.E. 75.) Indeed, Plaintiff did not seek to
withdraw its jury demand until after Defendants filed their Supplemental Brief in Support of Jury
Trial. (D.E. 76, 77-1). CBR Funding, the Jones, and this Court operated for nearly two years
under the premise that a trial, if it were to occur, would be heard by a jury. This case is
distinguishable from Key Equipment Finance, Inc. and Regions Bank because here the Plaintiff
engaged in the express act of demanding a jury trial, rather than merely remaining silent or
failing to object to the other side’s demand. See Key Equip. Fin., Inc., 2010 WL 2696195, at *4;
Regions Bank, 2010 WL 4514957, at *4-5. Therefore, this Court finds that Plaintiff engaged in a
clear, unequivocal, and decisive act that demonstrated an intent to waive its right to enforce the
contractual jury waiver provision.
Moreover, an expectation existed that Defendants could rely upon Plaintiff’s demand of a
trial by jury. Pursuant to Federal Rule of Civil Procedure 39, once a jury trial has been
demanded, the trial will be heard by a jury unless consent to a bench trial is agreed upon by both
parties. Defendants never contested Plaintiff’s jury demand or stipulated to a bench trial, and
thus CBR Funding cannot withdraw its demand without their consent. Fed. R. Civ. P. 39(a)(1)
(“The trial on all issues so demanded must be by jury unless: (1) the parties or their attorneys file
a stipulation to a nonjury trial or so stipulate on the record . . . .”); see Fed. R. Civ. P. 38(d) (“A
proper demand may be withdrawn only if the parties consent.”); see also Chicago Ins. Co. v.
Capwill, No. 3:01-CV-2588, 2010 WL 2723716, at *2 (N.D. Ohio July 8, 2010) (“Because of
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[the] official record of their previous objection to a jury trial, Defendants’ consent is not required
for the Plaintiff to withdraw its jury demand.”).
Conclusion
Therefore, because the Court finds that Plaintiff demonstrated an intent to waive the
contractual jury waiver provision and that Defendants never consented to a nonjury trial, the
Defendants’ Motion for a Jury Trial is GRANTED.
IT IS SO ORDERED this 14th day of September 2015.
s/ J. DANIEL BREEN
CHIEF UNITED STATES DISTRICT JUDGE
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