Court Opinion

ID: 7801149
Source: CourtListenerOpinion
Date Created: 2022-08-17 06:11:05.063383+00
Date Added: 2024-06-11T16:29:14.445372
License: Public Domain

Conditionally Grant and Opinion Filed August 15, 2022

                                       In The
                             Court of Appeals
                      Fifth District of Texas at Dallas
                                No. 05-22-00153-CV

                  IN RE FIVE STAR GLOBAL, LLC, Relator

           Original Proceeding from the 68th Judicial District Court
                            Dallas County, Texas
                     Trial Court Cause No. DC-20-08643

                         MEMORANDUM OPINION
                 Before Justices Molberg, Pedersen, III, and Garcia
                          Opinion by Justice Pedersen, III
      In this mandamus action, relator Five Star Global, LLC asks us to compel the

trial court: (a) to vacate its February 18, 2022 order, which denied relator’s

Expedited Motion to Reconsider Ruling on Jury Waiver and thereby left in place the

trial court’s oral ruling granting real parties in interest’s Motion to Strike Jury

Demand; (b) to remove this case from the non-jury docket; and (c) to reset this case

for jury trial. We conclude that real parties in interest waived their right to enforce

the parties’ contractual jury waivers. Accordingly, the trial court abused its

discretion by granting the Motion to Strike Jury Demand. We conclude further that
relator has no adequate appellate remedy for the erroneous deprivation of its right to

a jury trial. Accordingly, we conditionally grant the petition for writ of mandamus.

                                    Background

      In May 2018, real parties in interest Mark Hulme and Five Points Holding,

LLC (FPH), plaintiffs in the underlying suit, sold various business assets to relator

Five Star Global, LLC (FSG). The parties signed three contracts with respect to the

transaction: (1) an employment agreement between FSG and Hulme, (2) an asset

purchase and contribution agreement (the APA) among FSG and both real parties,

and (3) a master services agreement (the MSA) between FSG and FPH’s

predecessor, Five Star Media, LLC. Each contract contained a jury waiver provision.

      In November 2019, Hulme sued FSG in the 68th Judicial District of Dallas

County for breach of the employment agreement. The original petition contained a

“Jury Demand” section, and in the prayer, the petition further requested that “[t]he

Court empanel a jury to determine any issue of fact.” Hulme contemporaneously

filed a separate “Enter Demand for Jury,” acknowledging payment of the jury fee.

Less than a month later, Hulme’s business FPH joined in the suit. Together, real

parties filed a first and then a second amended petition containing a “Jury Demand”

section and reiterating the jury request in the prayer section.

      FSG filed counterclaims for breach of all three contracts. FSG similarly

demanded a jury trial and paid the required fee. All parties agreed to a proposed

                                         –2–
scheduling order in which the case would be “set for jury trial” and joined in a

motion asking the trial court to enter the proposed scheduling order.

        Real parties then filed a third amended petition. This time, the petition omitted

the “Jury Demand” section. However, real parties did not object to FSG’s jury

demand, and they again reiterated the request in the prayer section that the trial court

empanel a jury to determine any issue of fact.

        The case was briefly removed to federal court in May of 2020, but after a

dismissal without prejudice on a procedural ground, real parties refiled their claims

in state court, and the case was returned to the 68th Judicial District. The refiled case

was assigned a different cause number, but in their new petition, real parties

explained that “they ha[d] continued the sequential numbering of their pleadings,

and, therefore, they have captioned this pleading as their ‘fourth amended

[petition].’”1 Real parties’ refiled pleading again prayed that “[t]he Court empanel a

jury to determine any issue of fact and, upon final hearing of this cause, the Court

find for Plaintiffs.” FSG then refiled its counterclaims with a jury demand.

        On September 21, 2020, the trial judge held a hearing to determine whether a

case filed in a different court should be transferred to the 68th district court; real

parties were not involved in the motion. In fact, when the judge remarked on the

presence of counsel for real parties at the hearing, counsel stated, “I’m here

    1
       Likewise, real parties titled their subsequent pleadings the Fifth Amended Petition, Sixth Amended
Petition, and Seventh Amended Petition.
                                                  –3–
observing for the other case. I don’t have a dog in the fight between Mr. Riemer’s

client and Mr. Bexley’s client[s].” Nevertheless, when the issue of a jury trial arose

in the movant’s case, real parties’ counsel spoke to that matter:

       I haven’t looked into all the specifics of that jury waiver, but it is my
       belief that there is a jury waiver, and the documents between my client
       and Mr. Bexley’s client, Mr. Bexley can certainly correct me if I’m
       wrong, but that was my understanding is that there is a jury waiver. If
       I’m wrong, Mr. Bexley can correct me, but I don’t think we could have
       waived the jury. . . . Because I do strongly recall that there being a jury
       waiver that is going to apply, I assume to all claims. But again, I haven’t
       drilled that down.
One month later, on October 21, 2020, real parties filed their fifth amended pleading.

That petition added back real parties’ “Jury Demand” and again prayed for the court

to empanel a jury. Real parties did not object to FSG’s jury demand.

       Two days later, the trial court sent a notice that the case was set on the non-

jury docket for June 15, 2021. FSG quickly sent the court a responsive letter,

advising that its counterclaims included a request for jury trial and that it was paying

the jury fee at that time.

       On November 19, 2020, FSG filed “Defendants’ Motion for Jury Trial Setting

and Entry of Scheduling Order.” The motion sought a later trial date—in November

2021, rather than June—and proposed a scheduling order. But before addressing

those topics, FSG asserted:

       Recently, the Court set both lawsuits for non-jury trial on June 15, 2020.
       In the Hulme Lawsuit, Plaintiffs and Defendants have demanded a jury,
       and Defendants have tendered the requisite jury trial fee. Therefore, the
       Hulme Lawsuit must be transferred to the jury trial docket.

                                          –4–
At the December 21, 2020 hearing, real parties’ counsel agreed to the scheduling

order as to form “to move things along,” but she noted that real parties were not in

agreement on whether the FSG matter should be tried to a jury and that she believed

“there [would] be additional motions on the issue.” The trial court entered a

scheduling order setting this case for a jury trial.

       On February 24, 2021—fifteen months after real parties filed the original

case—they filed a sixth amended petition and answer. The petition did not include a

“Jury Demand” section and, for the first time, real parties did not request a jury trial

in the pleading’s prayer section. At the same time, real parties filed a motion to strike

the jury demand in FSG’s latest counterclaims on the ground that the employment

agreement, APA, and MSA contained contractual jury waiver provisions. FSG

objected, arguing that real parties had long ago waived any right to enforce those

contractual provisions by repeatedly requesting a jury trial themselves and by failing

to assert any objection in response to FSG’s jury demands. FSG pointed out that real

parties chose to wait to assert their contractual right to a non-jury trial until (a) fifteen

months after their own initial jury demand in the original action, (b) more than eight

months after their own jury demand in the refiled action, and (c) more than five

months after FSG filed its jury demand in the refiled action.

       Real parties maintained that they had not waived the contractual jury waivers

because they had preserved their objections during previous hearings. They pointed

to the statements made by real parties’ counsel when she was observing the

                                            –5–
September motion-to-transfer hearing and when she was “moving things along” in

the December hearing on a scheduling order.

      The trial court did not finally hear and decide the motion to strike until

September 10, 2021. The parties agreed that the motion turned on whether real

parties’ conduct, specifically their history of demanding a jury trial in their

pleadings, had waived their right to rely on contractual jury waivers. The trial court

asked the parties directly:

      Are there any cases on either side that talk about if you have a situation
      where the movant in a motion to I guess, or however you want to put it,
      the person seeking to enforce the jury trial waiver has asserted a
      demand for a jury, that that somehow waves [sic] the right to enforce
      the -- are there any cases either way that discuss that issue?
Counsel for both parties stated that they were unaware of such a case. In the absence

of such authority, the trial court orally granted the motion to strike, apparently

persuaded by real parties’ reliance upon In re C-Span Entertainment, Inc., 162

S.W.3d 422 (Tex. App.—Dallas 2005, orig. proceeding). In In re C-Span, this Court

found that the trial court did not abuse its discretion by rejecting relator’s argument

that real party waived its right to enforce contractual jury waivers based on real

party’s agreement to seven scheduling orders that included a date for a jury trial

setting. Id. at 425–26.

      On February 8, 2022, FSG filed a motion for reconsideration, relying upon

this Court’s recent decision in In re PlainsCapital Bank, No. 05-20-00765-CV, 2021

WL 1921020, *3–4 (Tex. App.—Dallas May 13, 2021, orig. proceeding) (mem. op.),

                                         –6–
in which we concluded that the trial court abused its discretion by removing a case

from the jury docket after real party repeatedly demanded a jury in a series of

pleadings and paid a jury fee. Nevertheless, the trial court denied the motion for

reconsideration on February 18, 2022.

                       The Petition for Writ of Mandamus

      One week later, on February 25, 2022, FSG filed this petition for writ of

mandamus. In the petition, FSG argues that the trial court clearly abused its

discretion by erroneously holding that real parties had not waived their right to a

non-jury trial, even though real parties spent fifteen months making six jury demands

and failed to oppose FSG’s two demands. FSG further argues that, as soon as real

parties demanded a jury trial themselves, Texas Rule of Civil Procedure 220

prohibited withdrawal of the case from the jury docket over FSG’s objections.

      In response, real parties first argue that the petition should be denied on the

ground of laches because FSG waited nearly five months from the trial court’s

September 2021 oral ruling to file its reconsideration motion in the trial court, and

then it waited until close to the trial date to file its mandamus petition. Real parties

also contend that FSG’s petition fails on the merits because the predecessor case

should not be conflated with the refiled case. Real parties assert that in the refiled

case, they never paid the jury fee, and they made it clear less than three months into

the refiled case that they intended to invoke the contractual jury waivers. Real parties

                                          –7–
insist that the boilerplate jury requests included in the early versions of their petition

were merely form language that their counsel mistakenly forgot to delete.

        In reply, FSG contends that laches does not apply here because the trial court’s

September 2021 oral pronouncement was too vague to be enforceable and was

conditioned on a future motion to resolve whether co-defendant Southfield

Mezzanine Capital L.P. was entitled to a jury trial.2 FSG contends that real parties

cannot demonstrate prejudice because the trial has been reset to August 2022. FSG

also maintains that real parties cannot distance themselves from the predecessor case

simply because it bore a different case number, especially when real parties

themselves demonstrated and represented repeatedly that the two proceedings are

the same lawsuit. FSG asserts that real parties’ descriptions of their conduct are

unsupported and contradicted by the record, and that in any event, their waiver

occurred long before the refiled case.

                                               Discussion

        Mandamus is an extraordinary remedy requiring the relator to show that the

trial court abused its discretion and that the relator lacks an adequate remedy on

appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004) (orig.

proceeding). We have stated that mandamus review is an appropriate method to

    2
      Southfield was not a party to the contractual jury waivers. The trial court has recently clarified this
aspect of its rulings: real parties’ claims against FSG are scheduled to be tried to the court beginning on
August 23 of this year; their claims against Southfield will be tried simultaneously, but to a jury.
                                                    –8–
determine questions of entitlement to or waiver of jury trial. In re PlainsCapital

Bank, 2021 WL 1921020, at *3. And we have concluded that “when a trial court

abuses its discretion by improperly granting a motion to strike a jury demand, relator

lacks an adequate remedy by appeal, and mandamus relief is available.” Id.

                                       Laches

      At the threshold, we address real parties’ argument that our review of relator’s

petition should be foreclosed by the doctrine of laches. It is true that unreasonably

delaying the filing of a petition for mandamus relief may waive the right to

mandamus. See In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 676 (Tex. 2009)

(orig. proceeding) (per curiam). In this case, however, no such unreasonable delay

occurred. Indeed, after the trial court denied the motion for reconsideration, relator

promptly filed this petition for writ of mandamus just one week later. Contrary to

real parties’ argument, the issue of delay is measured between the denial of the

reconsideration motion and the filing of the mandamus petition. See In re Laibe

Corp., 307 S.W.3d 314, 318 (Tex. 2010) (orig. proceeding) (per curiam) (measuring

time between denial of reconsideration motion and mandamus filing and concluding

two months is not unreasonable delay).

      Real parties also complain about the five-month delay between the trial

court’s September 2021 oral pronouncement and the filing of the motion for

reconsideration. However, for purposes of this original proceeding, “unreasonable

delay is calculated with reference to the mandamus petition’s filing.” See In re

                                         –9–
Episcopal Sch. of Dallas, Inc., 556 S.W.3d 347, 360 (Tex. App.—Dallas 2017, orig.

proceeding). Moreover, because the trial court’s September 2021 oral ruling granted

the motion to strike without prejudice to its contingent ruling upon Southfield’s

future motion for a jury trial, relator reasonably waited for the trial court to resolve

the issues with Southfield before seeking mandamus relief. Accordingly, we reject

real parties’ laches argument.

                                     Jury Waiver

      Any contractual right can be waived. In re PlainsCapital Bank, 2021 WL

1921020, at *3 (citing Perry Homes v. Cull, 258 S.W.3d 580, 593 (Tex. 2008)).

Litigation conduct establishes such a waiver if “the party’s conduct—action or

inaction—clearly demonstrates the party’s intent to relinquish, abandon, or waive

the right at issue.” LaLonde v. Gosnell, 593 S.W.3d 212, 219–20 (Tex. 2019).

Enforcement of a contractual right to a non-jury trial may be waived by a party’s

conduct. See In re Gen. Elec. Capital Corp., 203 S.W.3d 314, 316 (Tex. 2006) (orig.

proceeding) (per curiam). Waiver is largely a matter of intent, and for implied waiver

to be found through a party’s actions, intent must be clearly demonstrated by the

surrounding facts and circumstances. Id. Waiver is ordinarily a question of fact, but

when the surrounding facts and circumstances are undisputed, the question becomes

one of law. Id.

      As the Texas Supreme Court has explained, this state’s strong policy of

freedom of contract provides not only that “individuals can control their destiny and

                                         –10–
structure their business interactions through agreements with other competent

adults,” but also that “‘any competent adult can abandon a legal right and if he does

so then he has lost it forever.’” Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471,

482 (Tex. 2017) (citing In re Prudential Ins. Co., 148 S.W.3d at 129, and quoting

13 WILLISTON ON CONTRACTS § 39:14 (4th ed. 2013)). Even “a party’s rights under

a nonwaiver provision may indeed be waived expressly or impliedly.” Id. at 482–

83. Thus, the Texas Supreme Court has determined that when a party is on notice

that a case has been set on the jury docket, failure to pursue enforcement diligently

waives a party’s right to enforce its contractual jury waiver. See Rivercenter Assocs.

v. Rivera, 858 S.W.2d 366, 367–68 (Tex. 1993) (orig. proceeding) (holding that

Rivercenter was not entitled to mandamus relief to enforce its contractual right

because record did not show a justification for four-month delay in pursuing its right

to a non-jury trial).

       Relator first relies upon Rule 220 of the Texas Rules of Civil Procedure, which

states that “[w]hen any party has paid the fee for a jury trial, he shall not be permitted

to withdraw the cause from the jury docket over the objection of the parties adversely

interested.” TEX. R. CIV. P. 220. We question the applicability of Rule 220 in this

case, because the removal to federal court technically divided this case in two, with

the proceedings bearing different cause numbers. Arguably, the parties were

required to pay court fees—including the jury fee—anew when the case was refiled.

We are aware of no rule to the contrary.

                                          –11–
      Regardless, though, real parties’ payment of the jury fee in the predecessor

suit, as well as other conduct from that suit, are circumstances that we may consider

when assessing whether real parties relinquished their right to enforce the

contractual jury waivers. In this regard, real parties expressly decided to follow the

sequential numbering of the pleadings from the predecessor suit in captioning the

pleadings in the refiled suit. Thus, real parties themselves connected the refiled suit

to the first suit. Moreover, once a party has abandoned a legal contractual right, it

has lost the right forever. See In re PlainsCapital Bank, 2021 WL 1921020, at *4.

Accordingly, we conclude that real parties’ conduct in the original suit is relevant

here. In addition to paying the jury fee, real parties also explicitly demanded a jury

in six pleadings filed between November 15, 2019 and October 21, 2020. Although

real parties deleted the “Jury Demand” paragraph in two of the pleadings, those

pleadings still requested a jury in the prayer section, and the “Jury Demand”

paragraph even re-appeared in their October 21, 2020 pleading. Moreover, real

parties never objected to FSG’s jury demand until they filed their motion to strike in

February 2021, which was fifteen months after they initiated the lawsuit against

FSG. See LaLonde, 593 S.W.3d at 219–20 (noting that inaction is also relevant for

waiver purposes).

      Because the fundamental issue in this case is whether real parties’ conduct

demonstrates a relinquishment of their right to enforce contractual jury waivers, we

look to our recent decision in In re PlainsCapital Bank. In that case, the parties had

                                        –12–
signed agreements containing jury waiver provisions. 2021 WL 1921020, at *1–2.

Although relator’s original petition did not include a jury demand, real parties

demanded a jury repeatedly, beginning with their July 2016 filing and then in a series

of amended pleadings after that. Id. at *2. They also paid the jury fee. Id. No party

objected to the pleadings or correspondence demanding a jury or paying the fee. Id.

On August 2, 2019, however, real parties filed a motion seeking to have the case

removed from the jury docket and reset as a non-jury trial. Id. The trial court granted

the motion. Id. This Court granted mandamus relief after determining that real

parties had expressly renounced their contractual right to a non-jury trial when they

repeatedly demanded a jury and paid the jury fee. Id. at *3. We concluded that real

parties waived their right to enforce their contractual jury waivers by mandamus. Id.

Similarly, real parties in this case repeatedly asked for a jury in a series of pleadings.

They also paid a jury fee when the suit was originally filed in November 2019, and

they never objected to FSG’s jury demands in the first suit or the second suit.

      Real parties continue to argue that they preserved their objections to the jury

setting, pointing to statements made by their counsel at the September 2020 hearing.

But at that hearing, real parties’ counsel acknowledged no more than “I haven’t

looked into all the specifics of that jury waiver” and “I haven’t drilled it down.” Such

statements are equivocal at best and do not qualify as a diligent preservation of real

parties’ right to enforce the jury waivers. See Rivercenter Assocs., 858 S.W.2d at

367 (requiring “diligent pursuit of any right to a non-jury trial” to enforce the right

                                          –13–
by mandamus). Further, shortly after that September hearing, real parties filed their

fifth amended pleading, which did not object to FSG’s jury demand, affirmatively

added the “Jury Demand” paragraph back in after it had been deleted in previous

pleadings, and again asked the court to empanel a jury to determine any issue of fact.

Given the character of this October pleading, we reject the argument that counsel’s

September statements could act as a preservation of real parties’ right to enforce the

jury waivers.

      But in any event, we conclude that real parties’ efforts to tie preservation to

the September 2020 hearing were already too late. By then, ten months had passed

since real parties made their initial jury demand in their original pleading in the first

suit and paid the jury fee. Real parties had also filed four pleadings requesting a jury

during that timeframe without objecting to relator’s request for a jury. We conclude

that by September 10, real parties had waived their right to enforce the contractual

jury waivers. See id. at 367–68 (holding four-month delay in pursuing right to non-

jury trial waived right). The right to rely on the contractual waivers could not be

resuscitated by equivocal statements of counsel, especially in the face of continued

pleadings-based demands for a jury trial.

                                      Conclusion

      We conclude that the trial court abused its discretion by striking relator’s jury

demand and refusing to reconsider that ruling. We conclude further that relator lacks

an adequate remedy by appeal if forced to try this case without a jury. We

                                         –14–
conditionally grant relator’s petition, and we direct the trial judge: to vacate his

order of February 18, 2022; to deny real parties’ Motion to Strike Jury Demand; to

remove this case from the non-jury docket; and to reset this case for jury trial. We

are confident the judge will promptly comply. Our writ will issue only if he does

not.

                                          /Bill Pedersen, III//
220153f.p05                               BILL PEDERSEN, III
                                          JUSTICE

                                       –15–