Poole v. Bank

Decision Date08 April 2010
Docket NumberNo. W2009–01507–COA–R3–CV.,W2009–01507–COA–R3–CV.
Citation337 S.W.3d 771
CourtTennessee Court of Appeals


Denied by Supreme Court

Sept. 23, 2010.

Brett A. Schubert, Memphis, Tennessee, for the appellant, Gregory Poole.Caren B. Nichol and Lewis Clayton Culpepper, III, Memphis, Tennessee, for the appellee, Union Planters Bank, N.A.


DAVID R. FARMER, J., delivered the opinion of the Court, in which ALAN E. HIGHERS, P.J., W.S., and J. STEVEN STAFFORD, J., joined.DAVID R. FARMER, J.

The plaintiff/appellant, an owner-operator truck driver, entered into a note, disclosure, and security agreement with the defendant/appellee, Union Planters Bank, for the purchase of a tractor-trailer truck. At the time of the original agreement, the bank promised to have the vehicle's title converted to a Tennessee certificate of title. The plaintiff filed suit several years later to recover damages incurred due to the bank's failure to timely provide a copy of said title. Prior to trial, the bank moved to compel arbitration and to strike the plaintiff's jury demand based on contractual language found in the original agreement and a subsequent refinancing agreement. The trial court declined to compel arbitration but granted the motion to strike. At trial, the plaintiff recovered in breach of contract. On appeal, the plaintiff challenges the enforcement of his pre-dispute contractual waiver of the right to trial by jury, the involuntary dismissal of his Tennessee Consumer Protection Act claim, the calculation of his damages, and the denial of his claim for prejudgment interest. We affirm.

I. Background and Procedural History

The plaintiff/appellant, Gregory Poole (“Mr. Poole”), is an owner-operator truck driver. In May 2000, Mr. Poole entered in a note, disclosure, and security agreement with Union Planters Bank (“the Bank”) to facilitate the purchase of a 1998 Freightliner XL Classic Truck from Long–Lewis Sterling Ford in Bessemer, Alabama.1 Pursuant to the agreement, the Bank provided Mr. Poole with $62,014 for the purchase of the vehicle, which he agreed to repay with interest over sixty months. The agreement did not set forth any specific obligations with respect to the transfer of the vehicle's title from Alabama to Tennessee. Lue Young (“Ms. Young”), manager of the Bank's Southgate Branch located on South Third Street in Memphis, nevertheless agreed to “take care” of the matter for Mr. Poole at the time of the original loan.2

The transfer of title was important to Mr. Poole because he needed a copy of the vehicle's Tennessee certificate of title to renew his tags on a yearly basis. Unfortunately, the Bank lost the vehicle's Alabama certificate of title before it could be transferred. The Bank, as a result, was unable to provide Mr. Poole with a copy of Tennessee title for a period of years, which nonetheless did not prevent Mr. Poole from persuading state workers to renew his tags on multiple occasions. Their leniency, however, eventually wore thin and Mr. Poole was not allowed to renew his tags in August 2004. Consequently, Mr. Poole could not lawfully operate his vehicle and was, in effect, temporarily put out of business beginning September 2004. The Bank, after substantial effort on its own part, was able to secure a duplicate of the vehicle's original Alabama certificate of title, transfer the vehicle's title to Tennessee, and provide a copy of the vehicle's Tennessee certificate of title to Mr. Poole in early December 2004. Mr. Poole renewed his tags and resumed operation within a matter of days.

Mr. Poole filed this suit to recover damages for the period of time he could not lawfully conduct his business due to the Bank's failure to transfer title. His complaint alleged breach of contract, breach of the duty of good faith and fair dealing, unjust enrichment, and violation of the Tennessee Consumer Protection Act of 1977 (“TCPA”). The complaint demanded a jury trial on all issues and sought multiple remedies including compensatory damages, consequential damages, lost wages, rescission, treble damages, prejudgment interest, and attorney's fees. In its answer, the Bank denied Mr. Poole's claims and set forth several affirmative defenses. The Bank's answer did not mention waiver of the right to trial by jury, which it raised nearly four years after the commencement of suit in a motion to compel arbitration or, in the alternative, to strike the plaintiff's jury demand. The trial court denied the Bank's motion to compel arbitration but granted its motion to strike Mr. Poole's jury demand. Shortly thereafter, the court granted summary judgment in favor of the Bank on all claims except Mr. Poole's claims for breach of contract and violation of the TCPA.

The parties proceeded to trial in June 2009. At the close of the plaintiff's proof, the Bank moved to involuntarily dismiss the alleged violation of the TCPA. The court concluded after considerable argument that Mr. Poole's claim did not arise in the context of commerce or a consumer transaction and granted dismissal. As the trial proceeded, however, it became evident that the Bank had breached the contract between it and Mr. Poole.3 Accordingly, the court found in favor of Mr. Poole, awarded him $6,566 in damages for the three-month period he was unable to operate, but denied his request for prejudgment interest. The chancellor incorporated his oral ruling into a final order and Mr. Poole appealed.

II. Issues Presented

Mr. Poole presents the following issues for our consideration on appeal:

(1) Whether the trial court erred when it granted the Bank's motion to strike his jury demand;

(2) Whether the trial court erred when it dismissed his Tennessee Consumer Protection Act claim;

(3) Whether the trial court erred when it calculated damages based on the monthly average net profit of his business;

(4) Whether the trial court erred when it declined to award prejudgment interest on his breach of contract claim.

III. Standard of Review

This Court reviews the judgment of a trial court in a bench trial de novo upon the record, according a presumption of correctness to the factual findings of the court below. Tenn. R.App. P. 13(d); Union Carbide Corp. v. Huddleston, 854 S.W.2d 87, 91 (Tenn.1993) (citation omitted). We will not disturb a trial court's findings of fact unless a preponderance of the evidence is to the contrary. Berryhill v. Rhodes, 21 S.W.3d 188, 190 (Tenn.2000) (citation omitted). Our review is de novo with no presumption of correctness if the trial court does not produce findings of fact. Archer v. Archer, 907 S.W.2d 412, 416 (Tenn.Ct.App.1995) (citations omitted). Questions of law are similarly reviewed de novo with no presumption of correctness. Bowden v. Ward, 27 S.W.3d 913, 916 (Tenn.2000) (citation omitted).

IV. Analysis
A. Jury Waiver

This appeal presents an issue of first impression in Tennessee concerning the permissibility of pre-dispute contractual waiver of the right to trial by jury in civil cases, absent an enforceable arbitration agreement. 4 Two jurisdictions have interpreted their state constitutions to prohibit pre-dispute contractual waiver of the right to a civil jury trial—a position Mr. Poole now asks this Court to adopt. Our review of the relevant authority leads us to conclude that pre-dispute contractual waiver of the right to trial by jury is not prohibited in Tennessee. We leave for future consideration, however, additional issues of first impression concerning the principles courts should apply when determining the enforceability of particular provisions. We are satisfied that the evidence in the record supports enforcement of Mr. Poole's jury waiver under any standard, regardless of which party bears the initial and/or ultimate burden of proof. Because pre-dispute contractual jury waiver can be enforced upon motion at any time up to the eve of trial, the grant of the Bank's motion to strike Mr. Poole's jury demand is affirmed.

The threshold question before this Court is whether pre-dispute contractual jury waiver is permissible under Tennessee law. Article 1, Section 6 of the Tennessee Constitution states that “the right of trial by jury shall remain inviolate....” Tenn. Const. art. 1, § 6. This constitutional guarantee has appeared in every version of our constitution and defends one of the most important personal rights found in the Tennessee Declaration of Rights. Jones v. Greene, 946 S.W.2d 817, 823 (Tenn.Ct.App.1996) (citations omitted). As a general rule, however, one may waive a constitutional provision enacted for his personal benefit and protection if the waiver does not offend public policy. State, Dep't of Highways v. Urban Estates, Inc., 225 Tenn. 193, 465 S.W.2d 357, 360–61 (1971) (citing State ex rel. Barnes v. Henderson, 220 Tenn. 719, 423 S.W.2d 497, 502 (Tenn.1968)). Furthermore, prior decisions illustrate that waiver of the right to jury trial in civil cases is not wholly prohibited. See, e.g., Russell v. Hackett, 190 Tenn. 381, 230 S.W.2d 191, 192 (1950); E. Tenn., V. & G.R. Co. v. Martin, 85 Tenn. 134, 2 S.W. 381, 382 (1886); Nagarajan v. Terry, 151 S.W.3d 166, 176 (Tenn.Ct.App.2003); Beal v. Doe, 987 S.W.2d 41, 48–49 (Tenn.Ct.App.1998); Davis v. Ballard, 946 S.W.2d 816, 817 (Tenn.Ct.App.1996). The Tennessee Rules of Civil Procedure expressly provide for certain types of post-dispute jury waiver. See Tenn. R. Civ. P. 39.01(a). Tennessee courts, however, have not considered whether pre-dispute contractual waiver of the right to trial by jury, which is not expressly authorized by our constitution, statutes, or procedural rules, is permitted.

A majority of courts to address this issue have found no bar to the enforcement of pre-dispute jury-waiver provisions. See, e.g., Telum, Inc. v. E.F. Hutton Credit Corp., 859 F.2d 835, 837 (10th Cir.1988), cert. denied, 490 U.S. 1021, 109 S.Ct. 1745, 104 L.Ed.2d 182 (1989); K.M.C. Co....

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