Henry v. First Exch. Bank (In re First Exch. Bank)

• Decision Date: 06 December 2013
• Docket Number: 1111353.
• Citation: 150 So.3d 1010 (Mem)
• Parties: Ex parte FIRST EXCHANGE BANK et al. (In re Thomas Henry and Darla Henry v. First Exchange Bank et al.).
• Court: Alabama Supreme Court

150 So.3d 1010 (Mem)

Ex parte FIRST EXCHANGE BANK et al.

(In re Thomas Henry and Darla Henry

v.First Exchange Bank et al.).

1111353.

Supreme Court of Alabama.

Dec. 6, 2013.

Rehearing Denied March 21, 2014.

Robert P. Reynolds and Gilbert C. Steindorff IV of Reynolds, Reynolds & Little, LLC, Tuscaloosa, for petitioners.

J. McGowin Williamson of Williamson & Williamson, LLC, Greenville, for respondents.

Opinion

PER CURIAM.

PETITION DENIED. NO OPINION.

STUART, BOLIN, PARKER, MURDOCK, SHAW, MAIN, WISE, and BRYAN, JJ., concur.

MOORE, C.J., concurs specially.

MOORE, Chief Justice (concurring specially).

I concur with the decision of the Court to deny the petition for a writ of mandamus. I write specially to explain my reasons for denying the petition: (1) the petitioners' delay in moving to strike the demand for a jury trial and (2) the unconstitutionality of predispute contractual jury waivers as violating the right to a jury trial.

I. DELAY IN MOVING TO STRIKE JURY DEMAND

First Exchange Bank, Farmers Exchange Bank, and Dan Thomas, the defendants below (“the petitioners”), seek a writ of mandamus directing the trial court to enter an order striking the jury demand of Thomas Henry and Darla Henry, the plaintiffs below.

A. Facts and Procedural History

On November 18, 2008, the Henrys executed a real-estate mortgage (“the mortgage”) in favor of First Exchange Bank of Brewton, Alabama, a division of Farmers Exchange Bank. The mortgage contains the following provision:

“28. WAIVER OF JURY TRIAL. To the extent not prohibited by law, Mortgagor and Lender knowingly and intentionally waive the right, which the party may have, to a trial by jury with respect to any litigation arising from the Secured Debt, or any other agreement executed in conjunction with the Evidence of Debt and this Mortgage. Mortgagor and Lender each acknowledge that this section has either been brought to the attention of each party's legal counsel or that each party had the opportunity to do so.”

On September 22, 2010, the Henrys sued the petitioners, demanding a jury trial and alleging, among other things, fraud, breach of contract, and breach of fiduciary duty. The petitioners filed an answer and a counterclaim on November 1, 2010, but did not challenge the jury demand or mention the jury-waiver clause in the mortgage. On April 30, 2012, the petitioners filed a motion to strike the jury demand. The trial court, after holding a hearing on June 7, 2012, denied the motion without comment. The petitioners then filed their petition for a writ of mandamus directing the trial court to enter an order striking the Henrys' jury demand.

This Court has previously allowed mandamus review of an order addressing the availability of a jury trial. See Ex parte Cupps, 782 So.2d 772, 775 (Ala.2000) (“Mandamus is an appropriate remedy where the availability of a jury trial is at issue....”). See also Ex parte Southtrust Bank of Alabama, N.A., 679 So.2d 645 (Ala.1996) (granting a petition for a writ of mandamus and reversing the trial court's order denying a motion to strike a jury demand).

B. Standard of Review

“Mandamus is a drastic and extraordinary writ, to be issued only where there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court.”

Ex parte Integon Corp., 672 So.2d 497, 499 (Ala.1995). “ ‘The standard of review applicable to a trial court's striking a party's jury demand is whether the court's action clearly exceeded the limits of its discretion.’ ” Ex parte Sweeney, 104 So.3d 877, 880 (Ala.2012) (quoting Smith v. Smith, 6 So.3d 534, 541 (Ala.Civ.App.2008) ).

C. Discussion

1. Validity of the Jury Waiver

The petitioners urge, and the Henrys do not contest, that the jury-waiver clause in the mortgage was facially enforceable.

“In Gaylord Department Stores of Alabama v. Stephens, 404 So.2d 586, 588 (Ala.1981), this Court articulated three factors to consider in evaluating whether to enforce a contractual waiver of the right to trial by jury: (1) whether the waiver is buried deep in a long contract; (2) whether the bargaining power of the parties is equal; and (3) whether the waiver was intelligently and knowingly made.”

Ex parte BancorpSouth Bank, 109 So.3d 163, 166 (Ala.2012). The jury-waiver clause in the mortgage is conspicuously set out in a separate paragraph entitled—in all capital letters—“WAIVER OF JURY TRIAL.” The Henrys were experienced in real-estate transactions and were under no compulsion to accept the bank's loan terms. In addition, the Henrys initialed the page containing the jury-waiver provision. In their response to the petition for a writ of mandamus, the Henrys concede, though in inartful language, that the jury-waiver clause in the mortgage satisfied the Gaylord factors:

“Petitioners are correct in that Alabama law clearly recognizes the validity and enforceability of contractual waivers of the right to a jury trial, and equally correct that the Henrys do not contest herein that a court could not find that [sic] satisfy each of the three relevant factors for determining the enforceability of such waivers; the Henrys do not contest herein that a Court could not find that. Also, there is no question the Henrys knowingly and intelligently signed the mortgage agreements [sic] in issue, nor any question as to whether the Henrys were aware that a ‘jury waiver’ clause was contained therein. Mall, Inc. v. Robbins, 412 So.2d 1197, 1199 (Ala.1982), citing Gaylord Department Stores of Alabama v. Stephens, 404 So.2d 586, 588 (Ala.1981).”

Henrys' brief, at 8. “Such an explicit admission in a brief is binding on the party making it.” Ford v. Carylon Corp., 937 So.2d 491, 502 (Ala.2006). At the hearing on the motion to strike, the Henrys' attorney stated that the Henrys were “[r]eally not disputing the validity of the [mortgage] document.” Henrys' brief, App. D, at 5. “Again, the grav[amen] of our complaint is not that these people didn't sign a document and not that they're not knowledgeable people....” Id. at 8.

2. Laches

a. Procedural Posture

The Henrys argued that the trial court acted within its discretion in denying the petitioners' motion to strike the Henrys' jury demand because, they say, the motion was untimely. The Henrys' complaint filed on September 22, 2010, included a jury demand, but the petitioners did not file their motion to strike the jury demand until April 30, 2012, 19 months later. At the hearing on the motion, counsel for the Henrys stated: “First, the Court needs to look, we think, at the timing of this motion. The Complaint is two years old. Their answer is approaching two years old.... [The jury-waiver issue] is not raised in their pleadings.” Henrys' brief, App. D., at 6–7. Though raising the issue of delay, counsel for the Henrys stated that he could not find any cases on point. “So there really aren't any cases that I could find that says if you wait two years to assert your right to the waiver, that you can't do it anymore.” Id. at 7.

In their petition for the writ of mandamus, the Henrys present their untimeliness argument as an application of the equitable doctrine of laches. Henrys' brief, at 17–20. This Court will allow a party to present “new arguments or authorities” in support of propositions urged below. Ex parte Jenkins, 26 So.3d 464, 473 n. 7 (Ala.2009). The Henrys' argument to the trial court that the motion to strike their jury demand was untimely reasonably invoked the doctrine of laches, though not by name. Courts have construed an objection to a motion to strike a jury demand based on untimeliness as making an implicit laches argument. Responding to an argument that the party filing the motion to strike “delayed unreasonably in moving to strike the jury demand,” one court stated: “[Defendant] does not use the word, but its appeal is to the equitable doctrine of laches.” Bear, Stearns Funding, Inc. v. Interface Group–Nevada, Inc. (No. 03 Civ. 8259(CSH), Nov. 7, 2007) (S.D.N.Y.2007) (not reported in F.Supp.2d). Another court, faced with the same argument, stated: “The Court construes this as a laches argument....” Engines, Inc. v. MAN Engines & Components, Inc. (Civil No. 10–277 (RMB/KMW), Feb. 22, 2012) (D.N.J.2012) (not reported in F.Supp.2d).

Even if the Henrys did not adequately preserve their laches argument, this Court could still address it. Although “we will not reverse a trial court on a ground or argument not first presented to the trial court,” Taylor v. Stevenson, 820 So.2d 810, 814 (Ala.2001), we may affirm a trial court's judgment “on any valid argument, regardless of whether the argument was presented to, considered by, or even rejected by the trial court.” Ex parte Ryals, 773 So.2d 1011, 1013 (Ala.2000). Accordingly, I address the laches argument raised in the Henrys' brief to this Court.

b. Merits

Laches “is inexcusable delay in asserting a right; an implied waiver arising from knowledge of existing conditions and an acquiescence in them; such neglect to assert a right as, taken in conjunction with the lapse of time, ... and other circumstances causing prejudice to an adverse party....” Dunn v. Ponceler, 235 Ala. 269, 276, 178 So. 40, 45 (1937). “Laches, in legal significance, is not mere delay, but delay that works a disadvantage to another.” Chase v. Chase, 20 R.I. 202, 37 A. 804, 805 (1897) (quoted in Hauser v. Foley & Co., 190 Ala. 437, 440, 67 So. 252, 253 (1914) ). Laches thus assumes the existence of a right but denies its enforcement because of unjustifiable delay that prejudices an adversary.

Rule 39(a), Ala. R. Civ. P., governs motions to strike a jury demand:

“When trial by jury has been demanded as provided in Rule 38, the action shall be designated upon the docket as a jury action. The trial of all issues so demanded shall be by jury, unless ... (2) the court upon motion or of its own initiative finds that a right of trial by

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