Webster Bank, N.A. v. GFI Groton, LLC et al.
CV096001323
Decided: January 17, 2012
The plaintiff, Webster Bank, N.A., (hereinafter referred to as ?plaintiff? or ?Webster Bank?) filed a motion to strike the defendants’, GFI Groton, LLC, GFI Investments V Groton, LLC, CAT Developers, LLC, John Deliso and Steven E. Goodman (hereinafter referred to as ?defendants?) claim for a jury trial, motion #?120, filed on June 21, 2010. ? The parties filed memorandums of law, affidavits, etc., with arguments heard at a short calendar hearing on November 21, 2011.
PROCEDURAL HISTORY
Webster Bank instituted this action on August 24, 2009 seeking the foreclosure of two mortgages held by Webster Bank in connection with an Acquisition and Development Loan Note (the ?Acquisition Note?) executed by GFI Groton, LLC, and CAT Developers, LLC in favor of Webster Bank in the original principal amount of $2,044,500.00, and a Revolving Loan Note (the ?Revolving Note?) executed by GFI Groton, LLC, and CAT Developers, LLC in favor of Webster Bank in the original principal amount of $1,600,000.00 (the Acquisition Note and the Revolving Note are collectively the ?Notes?). ? Steven E. Goodman, GFI Investments V Groton, LLC, CAT Developers, LLC and John Deliso (the ?Guarantors?) are guarantors of payment of the Acquisition Note and Revolving Note pursuant to Payment and Completion Guaranty Agreements dated September 27, 2004 (the ?Guarantees?). ? The Guarantees were reaffirmed in a Reaffirmation of Guaranty, Consent and Waiver dated August 23, 2006, and a second Reaffirmation of Guaranty, Consent and Waiver dated November 30, 2007 (the ?Reaffirmations?). ? On January 21, 2010, defendants filed an Answer, Special Defenses and Counterclaims (#?117.00). ? Subsequently, defendants claimed this matter for a jury trial (#?120.00).
Plaintiff filed a Motion to Strike this matter from the jury list on June 29, 2010 (#?123.00) (the ?original motion?). ? Defendants objected to this motion on July 14, 2010 (#?127.00), and plaintiff filed a Reply to Defendants’ Objection on July 29, 2010 (#?132.00). ? Plaintiff’s original motion?and defendant’s objection?were never ruled upon, and this case remained on the jury list.
Subsequently, plaintiff converted the instant action to a suit on the Notes by way of its Amended Complaint dated March 1, 2011 (#?141.00). ? Defendants filed an Amended Answer, Special Defenses and Counterclaims on August 2, 2011 (#?149.00) (the ?Operative Answer?). ? Plaintiff then filed its Reply to Defendants’ Special Defenses, Answered Defendants’ Counterclaims, and filed Special Defenses to Defendants’ Counterclaims on September 22, 2011 (#?152.00). ? Defendants filed their Reply to Plaintiff’s Special Defenses on October 13, 2011 (#?154.00). ? Plaintiff now intends to close the pleadings and claim this case for a non-jury trial. ? To effectuate this goal, plaintiff now moves, again, to strike this case from the jury list.
ANALYSIS
It is well settled in Connecticut Common Law that a party may move to strike a case from the jury docket based upon a jury waiver. ? See L & R Realty v. Connecticut National Bank, 246 Conn. 1, 17 (1998) affirming trial court’s decision to strike case from jury docket based on jury waiver clause in underlying contract. ? The plaintiff claims the case should be stricken from the jury list because defendants have waived their right to a jury trial by way of the Jury Waiver clauses contained in the loan documents.
Specifically, the Acquisition Note and Revolving Note each contained a Jury Waiver which states:
THE BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT ACTION OR PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE FINANCING TRANSACTION OF WHICH THIS NOTE OR THE COLLATERAL DOCUMENTS ARE A PART AND/OR THE ENFORCEMENT OF ANY OF LENDER’S RIGHTS AND REMEDIES. ? THE BORROWER ACKNOWLEDGES THAT THEY MAKE THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER.
(See Acquisition Notes ??9(b), p. 4; ?Revolving Note ??9(b), p. 4) (the Acquisition Note and Revolving Note, Plaintiff’s Brief: ?Exhibit A?). ? The plaintiff further contends that these Waivers applied to any matter arising in connection with the Loans, including the financing and the enforcement of the Notes. ? However, as noted by the defendants, the guarantees do not contain any waiver of the right to a jury trial.
While the Guarantees do not contain the Waiver language, the loan documents were signed at approximately the same time and the Guarantees reference the loan documents. ? The specific language of the Guarantees each provide that, ?[the Guarantors are] executing this Payment and Completion Guaranty Agreement to induce Webster Bank, National Association (?Lender?) to make (i) an Acquisition and Development Loan in the amount of $2,044,500.00 and (ii) a Revolving Loan in the amount of $1,600,000.00 (collectively the ?Loan?) to GFI Groton, LLC (?Borrower?) ?? (See Guarantees, Plaintiff’s Brief Exhibit B Introduction paragraph.) ? Further, the Guarantees state: ??That Guarantor is desirous that Lender make the Loan to Borrower, will benefit directly from such loan and is willing to enter into this Guaranty in order to enhance the qualifications of Borrower for the Loan and as an inducement to and to fulfill the requirements of Lender for making the Loan.? (See Exhibit B, Guarantees ??12(a), p. 4.) The plaintiff argues that the defendants reaffirmed the Guarantees, and thereby the Jury Waiver, by virtue of a Reaffirmation of Guaranty, Consent and Waiver dated August 23, 2006, and a second Reaffirmation of Guaranty, Consent and Waiver dated November 30, 2007. ?(Reaffirmations Plaintiff’s Brief Exhibit C.)
The plaintiff contends that each of the loan documents (i.e., the Notes, Guarantees and Reaffirmation Agreements) were executed for the same purpose and transaction. ? Webster Bank sought the defendants’ personal guarantees was because they were the principals of the entity borrowing money and had an interest in the company obtaining the loans. ? While not yet addressed by Connecticut courts, other jurisdictions have held that jury waivers included in loan documents but not in the guaranty agreement will carry over to the guaranty agreement by virtue of the borrower’s inducement of the lender to make a loan. ?Chase Commercial Corp. v. Morton I. Owen, 588 N.E.2d 705 (Mass.App.Ct.1992) (holding that a jury waiver contained in the loan documents was also attributable to the guaranty by virtue of the guaranty’s reference to the loan documents). ? Therefore, the plaintiff further contends that it is the logical conclusion that each guarantor knew of the waiver contained in the Notes and to claim that the Waiver should not apply to the Guarantees and the Reaffirmation in the instant case is disingenuous. ? This court concludes that the Notes, Guarantees and Reaffirmations are in essence, all part of one continuous transaction. ? They must be read together to effectuate the parties’ intentions.
It is well settled in Connecticut that ?[e]xpress commercial contractual jury trial waivers entered into prior to litigation are presumptively enforceable.? ?L & R Realty et al. v. Connecticut Nat’l Bank, 246 Conn. 1, 16 (1998); ?see, e.g., Fleet Nat’l Bank v. Fiore Neylan Travel, Inc., No. CV?03?0828385, 2004 Conn.Super. LEXIS 2135 (Conn.Super.Ct., August 5, 2004) (Sheldon, J.) (enforcing jury waiver clause and striking from jury list). ? The plaintiff argues that the L & R Realty court held that a commercial contractual jury trial waiver can be prima facie evidence that the party bound thereby intentionally waived its right to a jury. ?L & R Realty, 246 Conn. at 8. In order to rebut the presumption, ?the party seeking to avoid the waiver must come forward with evidence that it clearly did not intend to waive the right to a jury trial.? ?Id. at 16. ? Such evidence may be apparent on the face of the agreement, such as where the waiver is in particularly fine print or is buried in the middle of a voluminous document, or may arise from the circumstances surrounding the execution of the agreement. ?Id. at 14?16.
As argued by the plaintiff, the Waiver language contained in the Webster Bank loan documents is positioned close to the signature page; ?is in all upper-case letters; ?and is not buried within the loan documents. ? The plaintiff further contends that based on the clear and unambiguous language contained in the Waiver, the defendants (including the Guarantors) waived any right they may have had to a jury trial. ? See id. at 16?17 (upholding trial court’s decision to strike the case from the jury list due to a jury waiver clause, noting that the jury waiver language was located in paragraphs nearer the signature page and in boldface).
In their prior objection (#?127.00) to plaintiff’s original motion, defendants supplied an affidavit of defendant John Deliso wherein he claimed that he was unaware that the jury waiver clause existed. ? As argued by the plaintiff, this affidavit alone is insufficient evidence that defendants did not clearly intend to waive their jury rights. ? See, e.g., First Union Nat’l Bank v. Moore, No. CV?99?0424489, 2000 Conn.Super. LEXIS 1376 at *14?16 (Conn.Super.Ct., June 1, 2000 [27 Conn. L. Rptr. 312] (Silbert, J.) (holding that affidavit by debtor stating that jury waiver provision was never pointed out to him, and that he found the language confusing was insufficient to prove the lack of clear intent to be bound by the waiver). ? The plaintiff claimed that Mr. Deliso and the other individual defendants who signed the loan documents are experienced businessmen in the field of commercial real estate. ? This claim was undisputed. ? The Notes contained conspicuous and unambiguous jury waiver clauses, a common element of similar commercial loan agreements. ? The plaintiff argues defendants are also foreclosed from arguing that there was a substantial disparity in bargaining power because they could have easily sought loans from a different Bank. See, e.g., Roger Kaye, M.D., P.C. v. T.D. Banknorth, N.A., No. FST?CV?08?5007268?S, 2011 Conn.Super. LEXIS 555 at *16?17 (Conn.Super.Ct., Mar. 1, 2011) (Tobin, J.) [51 Conn. L. Rptr. 509] (Though ultimately holding a jury waiver clause unenforceable because plaintiff did not sign the agreement, the court noted that ?there was no substantial disparity in the bargaining power between the parties because the plaintiff could have easily taken its business to a different bank?). ? The waiver language is clearly set out in the Notes and in a location easily read and understood. ? There is further no evidence presented by the defendants that they were not represented by legal counsel throughout the transaction in question.
The defendants have further argued that they are entitled to a jury trial because they asserted various counterclaims in this matter. ? The defendants claim that Article First ??19 of the Constitution of Connecticut provides that ?[t]he right of trial by jury shall remain inviolate.? ? That provision ?guarantees the right to a jury trial in all cases for which such right existed at the time of the adoption of that constitution provisions in 1818.? ?L & R Realty, supra, at 9, (quoting Associated Investment Co., LTD Partnership v. Willaims Associates IV, 230 Conn. 148, 153 (1994). ? This court concludes that there is sufficient clear evidence of intent to waive a jury trial for the defendants and guarantors for reasons cited above. ? Jury waiver clauses in general would be rendered useless if a defendant could bypass such a clause by simply alleging a counterclaim. ? As cited above, it is well settled that in Connecticut, in order to avoid a jury waiver clause, there must be clear evidence that a defendant did not intend to waive his or her right to a jury. ? Such evidence is lacking here.
ORDER
The plaintiff’s motion to strike the case from the jury docket (#?155) is hereby denied.
Devine, J.
Devine, James J., J.