L & R Realty v. Connecticut Nat. Bank, 15796
Court | Supreme Court of Connecticut |
Writing for the Court | Before CALLAHAN; KATZ |
Citation | 715 A.2d 748,246 Conn. 1 |
Decision Date | 04 August 1998 |
Docket Number | No. 15796,15796 |
Parties | L & R REALTY et al. v. CONNECTICUT NATIONAL BANK. CONNECTICUT NATIONAL BANK v. L & R REALTY et al. |
Page 748
v.
CONNECTICUT NATIONAL BANK.
CONNECTICUT NATIONAL BANK
v.
L & R REALTY et al.
Decided Aug. 4, 1998.
Page 749
Robert M. Dombroff, with whom was Ann M. Siczewicz, Hartford, for appellant (Fleet National Bank).
[246 Conn. 3] Robert G. Skelton, New Haven, with whom was Adam M. Brouillard, for appellees (L & R Realty et al.).
Before CALLAHAN, C.J., and BORDEN, BERDON, NORCOTT and KATZ, JJ.
KATZ, Associate Justice.
This certified joint appeal concerns the enforceability of a written waiver of the right to a jury trial contained in commercial loan documents. The trial court had struck the cases from the jury docket. The Appellate Court, in a divided opinion, reversed the ensuing judgment of the trial court, holding that an evidentiary hearing on the enforceability of the written waiver was required. We granted certification to appeal, 1 and now reverse the judgment of the Appellate Court.
The facts, as set out by the Appellate Court, are as follows. "On or about June 30, 1989, the Connecticut National Bank (CNB) loaned L and R Realty (L & R) $500,000 in connection with the purchase by L & R of approximately three acres of land in Colchester. At the June 30, 1989 closing, L & R delivered to CNB (1) a commercial promissory note in the principal amount of $500,000 (note), (2) a guarantee agreement (guarantee) by which the general partners of L & R personally guaranteed payment of the note, (3) a mortgage by which L & R created a first mortgage lien on the Colchester property in favor of CNB to secure due performance of L & R's obligations under the note,
Page 750
and (4) a collateral assignment of rents and security agreement by which L & R provided CNB with further security for the performance of L & R's obligations due under the note."The general partners of L & R claimed that prior to the closing, a senior vice president of CNB orally agreed to subordinate its mortgage to any future construction [246 Conn. 4] mortgage placed on the Colchester property. In reliance on this oral subordination agreement, L & R began construction on the Colchester property. In a letter dated October 26, 1990, another CNB vice president wrote to L & R that CNB intended 'to stand behind the verbal representation made by [L & R's] prior account officer concerning the subordination of [CNB's] mortgage on the Colchester parcel.'
"On March 25, 1991, L & R received a commitment from Mechanics Savings Bank that it would loan L & R funds for construction on the Colchester property. L & R notified CNB of the construction loan and requested that CNB subordinate its mortgage to this new construction mortgage. On April 15, 1991, CNB refused to subordinate their mortgage to this new construction mortgage without additional collateral. This refusal prevented the construction loan from closing. In April, 1991, L & R stopped paying the CNB note. On February 24, 1992, CNB commenced an action to foreclose its mortgage. L & R responded by bringing a lender liability action against CNB, claiming compensatory and punitive damages on a number of theories: (1) breach of the subordination agreement, (2) promissory estoppel, (3) breach of good faith and fair dealing, (4) fraud, (5) wrongful interference with prospective business relations, (6) economic duress, and (7) engagement in unfair and deceptive practices in violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. L & R also asserted those claims as counterclaims in the foreclosure action." L & R Realty v. Connecticut National Bank, 46 Conn.App. 432, 433-34, 699 A.2d 291 (1997).
Prior to trial, L & R filed claims for a jury trial in both the foreclosure and lender liability actions. CNB subsequently filed motions to strike the cases from the jury docket based on contractual waivers of the right [246 Conn. 5] to a jury trial contained in the loan documents. 2 At oral argument on these motions, L & R requested a hearing to determine whether the contractual jury trial waivers constituted a knowing, voluntary and intelligent waiver of the right to a jury trial. CNB argued that the general partners of L & R, Raymond G. LeFoll and Curtis H. Roggi, both of whom were attorneys, and Gail LeFoll, the wife Raymond LeFoll, 3 had signed the loan agreement and a guarantee that contained an express waiver of the right to a jury trial, and that the execution of those documents was sufficient to waive the parties' right to a jury trial. L & R argued that CNB had the burden of proving that the waivers were enforceable. L & R did not, however, allege that the general partners of L & R and Gail LeFoll had not intended to be bound by the waivers. Without conducting a hearing or taking additional evidence, the trial court, Hurley, J., granted CNB's motions to strike the cases from the jury docket, specifically finding "that by signing the note [L & R] waived all claims to a trial by jury."
The cases subsequently were consolidated for trial before Austin, J. "After a nine day
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trial, the trial court [246 Conn. 6] found that the note, the mortgage, and the other security documents delivered by L & R at the closing constituted a complete, final and integrated agreement, and, thus, the trial court found that there was no valid subordination agreement. Accordingly, on June 20, 1995, the trial court rendered judgment in favor of CNB in both the foreclosure and the lender liability actions." L & R Realty v. Connecticut National Bank, supra, 46 Conn.App. at 434-35, 699 A.2d 291.L & R appealed from both judgments, claiming, inter alia, that the trial court improperly had stricken the cases from the jury docket without holding an evidentiary hearing to determine whether the contractual jury trial waivers had been voluntary and knowing. 4 In separate opinions, the Appellate Court reversed the judgments in both the foreclosure and lender liability actions and remanded the cases to the trial court. Id., at 443, 699 A.2d 291; Connecticut National Bank v. L & R Realty, 46 Conn.App. 443, 445, 699 A.2d 297 (1997). The Appellate Court concluded that "the trial court improperly granted [CNB's] motion to strike [L & R's claims] from the jury docket. The only evidence before the trial court was the loan documents. Execution of a document that contains a jury trial waiver provision does not automatically constitute a valid waiver of the right to a jury [246 Conn. 7] trial.... Thus, the trial court should have held an evidentiary hearing where [CNB] bore the burden of proving that the contractual jury trial waivers were knowing, voluntary and intelligent." L & R Realty v. Connecticut National Bank, supra, 46 Conn.App. at 442, 699 A.2d 291. This appeal followed. 5
On appeal, CNB argues that: (1) the written waiver was prima facie evidence that L & R knowingly and voluntarily had waived its right to a jury trial; (2) because L & R had not alleged that its waiver had been involuntary, no evidentiary hearing to determine its enforceability was required; and (3) the evidence before the trial court was sufficient to permit the court to evaluate the voluntariness of the waiver provisions under the criteria outlined by the Appellate Court, and was sufficient to support the trial court's conclusions that the waivers were, in fact, voluntary. 6 L & R argues [246 Conn. 8] in response that the
Page 752
Appellate Court properly concluded that, in order to determine whether the waiver was knowing and voluntary, an evidentiary hearing was necessary. We conclude that a commercial contractual jury trial waiver provision such as the one at issue in this case is prima facie evidence that the party bound thereby intentionally has waived its constitutional right to a trial by jury. When the party seeking to avoid the waiver fails to allege and to come forward with evidence of a lack of intent to be bound by the waiver provision, the trial court need not conduct an evidentiary hearing to determine its validity. 7The standard by which the trial court determines the validity of a jury trial waiver is a question of law that is subject to de novo review. See Potter v. Chicago Pneumatic Tool Co., 241 Conn. 199, 694 A.2d 1319 (1997) (de novo review of standard set forth by trial court in jury instruction regarding whether product defectively designed). Once that standard has been established, "[w]hether a party has waived his right to a jury trial presents a question of fact for the trial court. Stevens v. Mutual Protection Fire Ins. Co., 84 N.H. 275, 283, 149 A. 498 [1930]." Krupa v. Farmington River Power Co., 147 Conn. 153, 156, 157 A.2d 914, dismissed and cert. denied, 364 U.S. 506, 81 S.Ct. 281, 5 L.Ed.2d 258 (1960). "We do not examine the record to determine whether the trier of fact could have reached a conclusion other than the one reached. Rather, we focus on the conclusion of the trial court, as well as the method by which it arrived at that conclusion, to determine whether it is legally correct and factually supported." Pandolphe's Auto Parts, Inc. v. Manchester, 181 Conn. 217, 222, 435 A.2d 24 (1980). "A finding is clearly erroneous when although there is evidence to support it, the [246 Conn. 9] reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." (Internal quotation marks omitted.) Normand Josef Enterprises, Inc. v. Connecticut National Bank, 230 Conn. 486, 504, 646 A.2d 1289 (1994).
The constitution of Connecticut, article first, § 19, provides that "[t]he right of trial by jury shall remain inviolate." That provision "guarantees the right to a jury trial in all cases for which such a right existed at the time of the adoption of that constitutional provision in 1818. Commissioner of Environmental Protection v. Connecticut Building Wrecking Co., 227 Conn. 175, 182, 629 A.2d 1116 (1993); Skinner v....
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