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
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ORIGINAL PROCEEDING
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OPINION
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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.
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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.
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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).
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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.
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… 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.
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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
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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
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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,
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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,
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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
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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.
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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
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