Court Opinion

ID: 2857212
Source: CourtListenerOpinion
Date Created: 2015-09-04 19:33:27.089666+00
Date Added: 2024-06-11T10:02:38.715405
License: Public Domain

COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                               NO. 2-08-381-CV

IN RE COLUMBIA MEDICAL CENTER                                         RELATOR
OF LEWISVILLE SUBSIDIARY, L.P.,
D/B/A MEDICAL CENTER OF LEWISVILLE

                                   ------------

                           ORIGINAL PROCEEDING

                                   ------------

                                  OPINION

                                   ------------

                                I. INTRODUCTION

      The issue we address in this original proceeding is whether the trial court

abused its discretion by refusing to enforce a prelitigation contractual jury

waiver contained in a lease executed by Relator Columbia Medical Center of

Lewisville Subsidiary, L.P. d/b/a Medical Center of Lewisville (Medical Center)

and Real Party in Interest, CenterPlace Properties, Ltd. (CenterPlace). Because

Medical Center—as the party seeking to enforce the contractual jury

waiver—met its evidentiary burden to rebut the presumption that the waiver
was not knowingly and voluntarily made and because CenterPlace did not offer

any evidence that it did not knowingly and voluntarily agree to the contractual

jury waiver in the lease, the trial court abused its discretion by refusing to

enforce the waiver. Accordingly, we will conditionally grant the writ.

                   II. F ACTUAL AND P ROCEDURAL B ACKGROUND

      CenterPlace is a Texas limited partnership that owns property in Flower

Mound and the buildings located on that property known as CenterPlace I and

CenterPlace II. Medical Center is a Texas limited partnership. In November

2004, CenterPlace and Medical Center executed a lease agreement.               The

parties represented at oral argument that the lease was “Medical Center’s”

lease, that is, that the lease was initially prepared by Medical Center.       Dr.

Ganesh Harpavat, in his capacity as President and General Partner of

CenterPlace, signed the lease for CenterPlace as landlord.            Howard K.

Patterson, in his capacity as Vice President of Medical Center, signed the lease

for Medical Center as tenant. Dr. Harpavat initialed six separate provisions of

the nineteen-page lease and made six handwritten revisions to the lease.

Section 24 of the lease, appearing on page fourteen, is a jury waiver provision.

The provision is not bolded, not initialed by the parties, and is not set forth any

differently than any other section in the lease.

                                        2
      Section 30 of the lease is titled “Right to Lease Additional Space” and

notifies the “Tenant,” i.e., Medical Center, that its rights are “subject to and

subordinate to superior option rights or rights of first refusal held by the

following tenants as of the Lease Date.”      The lease then lists eleven other

tenants in the CenterPlace II building and their corresponding suite numbers.

      In February 2006, the parties began negotiating an amended lease.

Copies of e-mails exchanged by the parties and their attorneys appear in the

record. CenterPlace was represented by counsel during the negotiations of the

“First Amendment to Lease Agreement.”          One e-mail from Dr. Harpavat

expressly states that “I have asked my attorney . . . to prepare the lease

amendment papers.”      After approximately four months of negotiations, the

parties executed the “First Amendment to Lease Agreement.” The amendment

contains a provision numbered as 11, which is titled “Ratification,” and

provides that “[t]he Lease remains in full force and effect as expressly modified

by this Amendment, and is ratified and confirmed.”

      Subsequently, CenterPlace sued Medical Center, asserting various causes

of action arising from the parties’ dealings concerning the lease and the

amended lease. Eventually, CenterPlace filed a demand for a jury trial. Medical

Center filed a motion to quash CenterPlace’s jury demand. Medical Center filed

an affidavit and a supplemental affidavit in support of its motion to quash.

                                       3
Numerous documents are attached to these affidavits, including the lease, the

amended lease, and e-mails between the lawyers and the parties. Over 300

pages of documents were filed by Medical Center with the trial court prior to

the hearing on Medical Center’s motion to quash.

      The trial court conducted a hearing on Medical Center’s motion to quash;

neither side presented live testimony at the hearing. Medical Center relied upon

the documents attached to the affidavits it filed in support of its motion to

quash. CenterPlace did not file a response or any documents in response to

Medical Center’s motion to quash. After the hearing, the trial court signed an

order denying Medical Center’s motion to quash. Medical Center then filed this

original proceeding.

                           III. S TANDARD OF R EVIEW

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

there is no adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148
S.W.3d 124, 135–36 (Tex. 2004) (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).

                                       4
                                  IV. T HE L AW

      The constitutional right to trial by jury may be waived via contract so long

as the waiver is made knowingly, voluntarily, and intelligently with sufficient

awareness of the relevant circumstances and likely consequences. See In re

Prudential, 148 S.W.3d at 132; Mikey’s Houses L.L.C. v. Bank of Am. 232
S.W.3d 145, 149 (Tex. App.—Fort Worth 2007, no pet., [mand. pending]).1

We begin our analysis with a presumption against the waiver of jury trial; the

burden is on the party seeking to enforce the prelitigation contractual jury

waiver to rebut this presumption with prima facie evidence that the waiver was

knowingly and voluntarily made with full awareness of the legal consequences.

      1
        … By way of explanation for the unusual subsequent history citation for
Mikey’s Houses, the parties in that case perfected an interlocutory appeal to our
court. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(d). Although one
justice dissented in Mikey’s Houses, Bank of America did not file a petition for
review with the Texas Supreme Court. See Tex. Gov’t Code Ann. § 22.225(c)
(Vernon 2004 & Supp. 2008) (granting supreme court appellate jurisdiction over
interlocutory appeal when appellate court justice issues a dissent). Instead,
after this court issued its mandate, Bank of America filed a mandamus with the
Texas Supreme Court naming this court as respondent and praying that the
supreme court issue a mandamus directing this court to “vacate and withdraw
the opinion and judgment” entered in the interlocutory appeal. See In re Bank
of Am., N.A., No. 07-0901 (pet. for writ of mandamus filed Nov. 2, 2007,
courtesy copy served on Second Court of Appeals) (quoting language in prayer);
see also id., Brief in Support of Petition for Writ of Mandamus, at 33 (filed Mar.
21, 2008), available at http://www.supreme.courts.state.tx.us/ebriefs/07/
07090101.pdf (quoting same language in prayer). That petition for writ of
mandamus is pending in the Texas Supreme Court.

                                        5
Mikey’s Houses, L.L.C., 232 S.W.3d at 152 (citing In re Prudential, 148
S.W.3d at 132–33 and In re Gen. Elec. Capital Corp., 203 S.W.3d 314, 316

(Tex. 2006)).    Evidence of the following nonexclusive factors may be

considered in determining whether the party seeking to enforce a contractual

waiver of the right to a jury trial has rebutted the presumption against the

waiver by prima facie evidence that the waiver was knowingly and voluntarily

made: (1) the parties’ experience in negotiating the particular type of contract

signed; (2) whether the parties were represented by counsel; (3) whether the

waiving party’s counsel had an opportunity to examine the agreement; (4) the

parties’ negotiations concerning the entire agreement; (5) the parties’

negotiations concerning the waiver provision, if any; (6) the conspicuousness

of the provision; and (7) the relative bargaining power of the parties. Id. at

153; accord In re Gen. Elec. Capital Corp., 203 S.W.3d at 316 (examining

conspicuousness); In re Prudential, 148 S.W.3d at 134 (examining several of

the listed factors); RDO Fin. Servs. Co. v. Powell, 191 F. Supp. 2d 811,

813–14 (N.D. Tex. 2002) (examining several of the listed factors).

                   V. A PPLICATION OF THE L AW TO THE F ACTS

      Here, the evidence presented to the trial court by Medical Center

concerning the above nonexclusive list of factors constitutes prima facie

evidence rebutting the presumption against the waiver of the constitutional

                                       6
right to trial by jury and is some evidence that CenterPlace made the waiver

knowingly and voluntarily. The evidence presented by Medical Center shows

that CenterPlace was experienced in negotiating leases. CenterPlace was a

landlord involved in leasing space in large commercial buildings. Section 30 of

the lease executed by the parties indicates that when CenterPlace executed the

lease containing the contractual jury waiver provision, it had already entered

into leases with at least eleven other tenants in the same building. Although

the record is silent as to whether CenterPlace was represented by counsel when

the original lease was executed, the evidence conclusively establishes that

CenterPlace was represented by counsel when the “First Amendment to Lease

Agreement” was negotiated and executed. Numerous provisions of the original

lease were modified by the amended lease, but the jury waiver provision was

not. And the First Amendment to Lease Agreement ratified the unmodified

portions of the original lease. Consequently, before CenterPlace entered into

the lease amendment, counsel for CenterPlace did have the opportunity to

review the jury waiver provision and did have the opportunity to make it part

of the negotiations that occurred with respect to the amended lease.       The

parties’ negotiations concerning both the original lease and the lease

amendment were extensive. The original lease contains numerous handwritten

interlineations made by Dr. Harpavat on behalf of CenterPlace.       The lease

                                      7
amendment was negotiated by CenterPlace’s counsel over a period of

approximately four months. The record contains no indication that the jury

waiver provision was specifically negotiated. The jury waiver provision set

forth in section 24 of the original lease is not conspicuous. It is set forth in the

exact same manner as each of the other thirty-eight sections of the lease. The

relative bargaining power of the parties was fairly equal. Both were Texas

limited partnerships. They were entering into a landlord-tenant relationship

through a lease agreement.

      Thus, Medical Center produced prima facie evidence on five of the seven

nonexclusive factors rebutting the presumption against waiver of the

constitutional right to trial by jury. Weighing each of these factors, and viewing

the totality of the circumstances surrounding the transaction as reflected in the

record before us, Medical Center’s evidence rebuts the presumption against the

waiver. The burden then shifted to CenterPlace to produce evidence that its

contractual waiver of its right to trial by jury was not knowingly and voluntarily

made. In re Gen. Elec. Capital Corp., 203 S.W.3d at 316; Mikey’s Houses,

L.L.C., 232 S.W.3d at 156. CenterPlace offered no evidence at the hearing and

filed no affidavits or evidence with the trial court prior to the hearing.

      CenterPlace nonetheless contends that the facts here are similar to the

facts in Mikey’s Houses, L.L.C. and compel the same result as Mikey’s Houses,

                                         8
L.L.C.     In Mikey’s Houses, L.L.C., this court, in a permissive interlocutory

appeal, held that the party seeking to enforce a contractual jury waiver—Bank

of America—had not met its burden of rebutting the presumption against waiver

of the constitutional right to trial by jury. See Mikey’s Houses, L.L.C., 232
S.W.3d at 157. The facts here, however, are nothing like the facts in Mikey’s

Houses, L.L.C.

         In Mikey’s Houses, L.L.C., the contractual jury waiver provision was set

forth not in the sales contract executed between Mikey’s Houses, L.L.C. and

Bank of America, but in an addendum to the contract prepared by Bank of

America on a Bank of America form that was not a standard Texas Real Estate

Commission Form and that was presented to the two owners of Mikey’s

Houses L.L.C. after the sales contract had already been executed. See id. at

147–48.      Here, the contractual jury waiver provision was set forth in the

primary lease executed by CenterPlace and Medical Center. Mikey’s Houses,

L.L.C. was a business formed by two ladies to buy foreclosed homes and to

renovate them for sale.      Id. at 147.       Here, CenterPlace was a much more

sophisticated business; CenterPlace owned property in Flower Mound and two

buildings located on that property known as CenterPlace I and CenterPlace II.

In Mikey’s Houses, L.L.C., one of its owners testified that she believed the

entire Bank of America addendum was just a typical “as is” provision,

                                           9
establishing that Mikey’s Houses, L.L.C. purchased the house and the property

“as is.”   Id. at 154.   CenterPlace offered no explanation indicating that it

misunderstood the nature of the contract containing the jury waiver provision.

Mikey’s Houses, L.L.C. was not represented by an attorney at any time in its

dealings with Bank of America. Id. at 154–55. CenterPlace was represented

by an attorney during extensive negotiations for the lease amendment, and the

lease amendment ratified the entire prior lease, including the contractual jury

waiver provision. Additionally, CenterPlace had executed leases with at least

eleven other tenants for space in its CenterPlace II building prior to executing

the lease with Medical Center for space in that building. No evidence existed

that Mikey’s Houses, L.L.C. had negotiated any aspect of its sales contract or

the Bank of America addendum containing the jury trial waiver. Id. at 155.

Here, the original lease contains numerous interlineations initialed by

CenterPlace and Medical Center, and the record contains correspondence

relating to and red-lined versions of the lease amendment, establishing that

CenterPlace did negotiate both the lease and the lease amendment.

      In summary, the facts here do not compel the same result as in Mikey’s

Houses, L.L.C.    Bank of America in Mikey’s Houses, L.L.C.—as the party

seeking to enforce the contractual jury waiver—did not meet its burden to rebut

the presumption that the waiver was not knowingly and voluntarily made with

                                      10
prima facie evidence of a knowing and voluntary waiver. Id. at 156. Here,

Medical Center—as the party seeking to enforce the contractual jury

waiver—did meet its burden to rebut the presumption that the waiver was not

knowingly and voluntarily made by introducing prima facie evidence that the

waiver was knowing and voluntarily made. Consequently, the burden shifted

to CenterPlace to establish that the waiver was not made knowingly and

voluntarily. See In re Gen. Elec. Capital Corp., 203 S.W.3d at 316; Mikey’s

Houses, L.L.C., 232 S.W.3d at 153. CenterPlace did not offer any evidence at

the hearing on Medical Center’s motion to quash the jury demand and did not

file any evidence for the trial court’s consideration. Accordingly, CenterPlace

did not meet the burden that shifted to it to establish that the waiver was not

made knowingly and voluntarily.

      We hold that in this case the trial court abused its discretion by failing to

enforce the contractual jury waiver provision in the lease executed by the

parties. Additionally, because no right of appeal exists from the trial court’s

ruling denying Medical Center’s motion to quash CenterPlace’s jury demand,

Medical Center has no adequate remedy at law. See In re Prudential, 148
S.W.3d at 135-36.

                                       11
                                VI. C ONCLUSION

      Having determined that the trial court abused its discretion by failing to

grant Medical Center’s motion to quash CenterPlace’s jury demand and having

determined that Medical Center possesses no adequate remedy at law, we

conditionally grant mandamus relief, order the trial court vacate its August 8,

2008 order denying Medical Center’s motion to quash, remand this case to the

trial court, and direct the trial court to place it on the court’s nonjury docket.

                                                  SUE WALKER
                                                  JUSTICE

PANEL: GARDNER and WALKER, JJ.; and DIXON W. HOLMAN, J. (Senior
Justice, Retired, Sitting by Assignment).

DELIVERED: January 8, 2009

                                       12