Court Opinion

ID: 3127320
Source: CourtListenerOpinion
Date Created: 2015-10-16 15:36:43.855629+00
Date Added: 2024-06-11T11:45:52.756370
License: Public Domain

COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                               FORT WORTH

                               NO. 2-10-163-CV

IN RE PROFESSIONAL                                                    RELATOR
PHARMACY II

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                           ORIGINAL PROCEEDING

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                       MEMORANDUM OPINION1
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      This is an original proceeding in which Relator Professional Pharmacy II

(Professional Pharmacy) contends that the trial court abused its discretion by

issuing its March 8, 2010 order granting JP Morgan Chase Bank, NA‘s (JP

Morgan‘s) motion to strike jury demand and enforce contractual waiver of jury

trial. Professional Pharmacy argues that the trial court abused its discretion by

granting the motion because it was filed more than a year and a half after

Professional Pharmacy filed its jury demand and only forty-six days before trial

      1
       Tex. R. App. P. 47.4.
was set to begin and because JP Morgan failed to prove the existence of a valid

jury waiver. Professional Pharmacy also contends that the provision at issue is

an arbitration provision and that JP Morgan waived its right to invoke arbitration.

We will conditionally grant the writ.

                                    Background

      On July 14, 2008, Professional Pharmacy filed suit against JP Morgan

asserting breach of a depository contract, seeking declaratory relief, and

requesting a jury trial. Over the next eighteen months, the parties conducted

discovery, filed motions, and filed a joint motion for continuance. On February 4,

2010, JP Morgan filed a motion to strike Professional Pharmacy‘s jury demand

and enforce a contractual waiver of jury trial contained within a ―master account

agreement.‖ On February 17, 2010, Professional Pharmacy filed a response to

the motion to strike in which it argued that JP Morgan had failed to meet its

burden to prove the existence of a valid and enforceable jury waiver and that the

provision relied upon by JP Morgan was not a jury waiver but rather an

unenforceable arbitration provision that had been waived by JP Morgan‘s

actions. On March 5, 2010, the trial court held a hearing on JP Morgan‘s motion

to strike the jury demand, and it granted the motion by an order signed on March

8, 2010. On March 9, 2010, Professional Pharmacy paid the jury fee.2 On May

21, 2010, Professional Pharmacy filed this petition for writ of mandamus.

      2
      Although Professional Pharmacy had not paid the jury fee more than thirty
days before the trial setting as required by Rule 216 of the Texas Rules of Civil
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                                Standard of Review

      Mandamus relief is proper only to correct a clear abuse of discretion when

there is no adequate remedy by appeal. In re Columbia Med. Ctr. of Las Colinas,

290 S.W.3d 204, 207 (Tex. 2009) (orig. proceeding).

      A trial court clearly abuses its discretion when it reaches a decision so

arbitrary and unreasonable as to amount to a clear and prejudicial error of law.

Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). With

respect to the resolution of factual issues or matters committed to the trial court‘s

discretion, we may not substitute our judgment for that of the trial court unless

the relator establishes that the trial court could reasonably have reached only

one decision and that the trial court‘s decision is arbitrary and unreasonable. Id.

at 839–40. This burden is a heavy one. In re CSX Corp., 124 S.W.3d 149, 152

(Tex. 2003) (orig. proceeding).      We give deference to a trial court‘s factual

determinations, but we review the trial court‘s legal determinations de novo. In re

Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig. proceeding). A

trial court abuses its discretion if it incorrectly interprets or improperly applies the

Procedure, that issue was not one of the grounds in JP Morgan‘s ―motion to
strike and enforce a contractual jury waiver‖, and the trial court‘s March 8, 2010
order does not list the failure to pay as a reason for granting JP Morgan‘s motion
to strike. See Tex. R. Civ. P. 216; Huddle v. Huddle, 696 S.W.2d 895, 895 (Tex.
1985); Univ. Printing Co., Inc. v. Premier Victorian Homes, Inc., 73 S.W.3d 283,
289 (Tex. App.—Houston [1st Dist.] 2001, pet. denied).

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law. In re Dep’t of Family & Protective Servs., 273 S.W.3d 637, 642–43 (Tex.

2009) (orig. proceeding); Walker, 827 S.W.2d at 840.

      Absent extraordinary circumstances, mandamus will not issue unless

relator lacks an adequate remedy by appeal. In re Van Waters & Rogers, Inc.,

145 S.W.3d 203, 210–11 (Tex. 2004) (citing Walker, 827 S.W.2d at 839).

Whether a clear abuse of discretion can be adequately remedied by appeal

depends on a careful analysis of costs and benefits of interlocutory review. In re

McAllen Med. Ctr., Inc., 275 S.W.3d 458, 464 (Tex. 2008) (orig. proceeding). As

this balance depends heavily on circumstances, it must be guided by analysis of

principles rather than simple rules that treat cases as categories.       Id.   An

appellate remedy is adequate when any benefits to mandamus review are

outweighed by the detriments. In re Prudential Ins. Co. of Am., 148 S.W.3d 124,

136 (Tex. 2004) (orig. proceeding). When the benefits outweigh the detriments,

we must conduct further analysis. Id. An appeal is inadequate for mandamus

purposes when parties are in danger of permanently losing substantial rights,

such as when the appellate court would not be able to cure the error, the party‘s

ability to present a viable claim or defense is vitiated, or the error cannot be

made part of the appellate record. Van Waters & Rogers, Inc., 145 S.W.3d at

210–11; Walker, 827 S.W.2d at 843–44. An appellate court should also consider

whether mandamus will allow the court to give needed and helpful direction to

the law that would otherwise prove elusive in appeals from final judgments and

whether mandamus will spare litigants and the public the time and money utterly

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wasted enduring eventual reversal of improperly conducted proceedings. In re

Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex. 2008) (orig. proceeding).

      Improper denial of the constitutional right to trial by jury amounts to an

abuse of discretion. See McDaniel v. Yarbrough, 898 S.W.2d 251, 253 (Tex.

1995); In re Bradle, 83 S.W.3d 923, 928 (Tex. App.—Austin 2002, orig.

proceeding); Union Pac. Fuels, Inc. v. Johnson, 909 S.W.2d 130, 133 (Tex.

App.—Houston [14th Dist.] 1995, orig. proceeding); Rosenthal v. Ottis, 865
S.W.2d 525, 529 (Tex. App.—Corpus Christi 1993, orig. proceeding). The issue

of whether a presuit waiver of trial by jury is enforceable is reviewable by

mandamus. See In re Prudential, 148 S.W.3d at 138.

  The Trial Court Abused its Discretion by Granting the Motion to Strike
Professional Pharmacy’s Jury Demand because JP Morgan Failed to Prove
                   a Valid and Enforceable Jury Waiver

      In its second issue, Professional Pharmacy argues that the trial court

abused its discretion by granting the motion to strike the jury demand because

JP Morgan failed to establish the existence of a valid and enforceable jury

waiver.    Professional Pharmacy contends that the contractual provision

contained within the master account agreement that JP Morgan contends is a

―jury waiver‖ is not a jury waiver but rather a portion of an arbitration clause. The

complete provision reads as follows:

      4.     Most disputes arising under this Agreement related to
      accounts or services hereunder are subject to mandatory binding
      arbitration. Rights to trial by judge or jury are waived hereby. Bank
      must be notified by depositor of claims and proceedings to enforce
      any such claims must be brought, within the time requirements

                                         5
      established in the Account Disclosures and Regulations.

      JP Morgan contends that the jury waiver ―provision provides for either

arbitration or for jury waiver.‖3 JP Morgan specifically argues that under the

provision at issue,

      If a party files a lawsuit the dispute may be subject to arbitration (i.e.
      ―most disputes . . . are subject to‖ arbitration). In such a case, a
      party may invoke the arbitration provision, and an arbitration would
      be conducted by an arbitrator-not a judge. On the other hand, if a
      party files a lawsuit, and if arbitration is not sought or the claims are
      not subject to arbitration, the right to trial by jury is still waived.
      There is nothing that precludes a party from invoking one portion of
      the provision-i.e. right to trial by jury is waived.

      This argument requires us to apply basic principles of contract

construction.   When construing contracts and other written instruments, our

primary concern is to ascertain the true intent of the parties as expressed in the

instrument. See Baldaran v. Safeco Ins. Co., 972 S.W.2d 738, 741 (Tex. 1998);

NP Anderson Cotton Exch., L.P. v. Potter, 230 S.W.3d 457, 463 (Tex. App.—Fort

Worth 2007, no pet.); In re Estate of Dellinger, 224 S.W.3d 434, 438 (Tex. App.—

Dallas 2007, no pet.) (applying general principles of contract construction to the

interpretation of a bank account application); Allen v. Wachtendorf, 962 S.W.2d
3
        In its response, JP Morgan also argues that Professional Pharmacy lacks
standing to assert claims against it for breach of contract, wrongful foreclosure,
negligence, and conversion because it is not a party to the master account
agreement. However, JP Morgan had filed a motion for summary judgment on
the standing issue, and the motion was denied by the trial court before this
original proceeding was filed. JP Morgan further argues that, even though
Professional Pharmacy lacks standing to complain of a breach of the master
account agreement, it is nonetheless bound by the ―jury waiver‖ contained within
the agreement.

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279, 283 (Tex. App.—Corpus Christi 1998, pet. denied) (applying general

principles of contract construction to the interpretation of a bank account

signature card). If a written contract is so worded that it can be given a certain or

definite legal meaning or interpretation, then it is not ambiguous and the court will

construe the contract as a matter of law. See Nat’l Union Fire Ins. Co. v. CBI

Indus., 907 S.W.2d 517, 520 (Tex. 1995). We must examine and consider the

entire contract in an effort to harmonize and give effect to all provisions so that

none are rendered meaningless. See Potter, 230 S.W.3d at 463; see also J.M.

Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). ―We construe

contracts ‗from a utilitarian standpoint bearing in mind the particular business

activity sought to be served‘ and ‗will avoid when possible and proper a

construction which is unreasonable, inequitable, and oppressive.‘‖ Frost Nat’l

Bank v. L & F Dist., Ltd., 165 S.W.3d 310, 312 (Tex. 2005) (quoting Reilly v.

Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987)). ―If, after the pertinent

rules of construction are applied, the contract can be given a definite or certain

legal meaning, it is unambiguous and we construe it as a matter of law.‖ Id.

(citing Webster, 128 S.W.3d at 229).

      Examining the provision at issue in light of the pertinent rules of

construction, we conclude that JP Morgan‘s contention that the provision at issue

is both an arbitration provision and a jury waiver is incorrect. ―[A] difference

exists between a jury trial waiver and an agreement to arbitrate disputes.‖ See

Chambers v. O’Quinn, 305 S.W.3d 141, 149 (Tex. App.—Houston [1st Dist.]

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2009, no pet.). Arbitration is an agreement to resolve disputes out of court in the

first instance, not an agreement to waive a particular constitutional right available

within the judicial process. See id. (citing D. Wilson Const. Co., Inc. v. McAllen

Indep. Sch. Dist., 848 S.W.2d 226, 231 (Tex. App.—Corpus Christi 1992, writ

dism‘d w.o.j.)). When a party contractually agrees to arbitrate a dispute, it waives

its rights to recourse in the courts. D. Wilson Const. Co., Inc., 848 S.W.2d at

231.

       The first sentence in the provision at issue clearly relates to arbitration as

the method that has been selected for resolving disputes.4 The sentence waiving

trial by judge or jury also clearly contemplates arbitration as it attempts to take

the dispute resolution out of the court system altogether. ―Judge‖ and ―jury‖ are

mentioned in the same sentence, and there is nothing to indicate the waiver of

jury standing alone. Accordingly, JP Morgan‘s contention that the provision is a

valid jury waiver fails. See Chambers, 305 S.W.3d at 149. Moreover, even if this

provision was meant to serve as a jury waiver, it would fail because it is not

conspicuous. See In re Bank of America, 278 S.W.3d 342, 344–45 (Tex. 2009)

(per curiam); Prudential, 148 S.W.3d at 134.

       Further, because Professional Pharmacy stands to lose a substantial right,

it lacks an adequate remedy by appeal. See Rosenthal, 865 S.W.2d at 529

       4
       We note that the provision refers to ―most disputes‖ without delineating
the disputes that are encompassed by that term. Because JP Morgan is not
seeking arbitration, however, we need not decide whether this language renders
the provision enforceable.

                                          8
(stating adequate remedy by appeal does not exist for denial of jury trial). We

therefore sustain Professional Pharmacy‘s second issue and conditionally grant

Professional Pharmacy‘s petition for writ of mandamus.                Because of our

disposition of Professional Pharmacy‘s second issue, we need not consider the

remaining issues, which all relate to the improper granting of JP Morgan‘s motion

to strike. See Tex. R. App. P. 47.1.

                                      Conclusion

      Having determined that the trial court abused its discretion by granting JP

Morgan‘s motion to strike Professional Pharmacy‘s jury demand, we order the

trial court to vacate its March 8, 2010 order granting the motion to strike. Only if

the trial court fails to comply with this court‘s order will we issue the writ.

                                                       ANNE GARDNER
                                                       JUSTICE

PANEL: LIVINGSTON, C.J.; GARDNER and MCCOY, JJ.

DELIVERED: September 23, 2010

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