SUPERIOR COURT OF CONNECTICUT
JUDICIAL DISTRICT OF HARTFORD AT HARTFORD
CV030828385
2004 Conn. Super. LEXIS 2135
August 5, 2004, Decided
August 5, 2004, Filed
MEMORANDUM OF DECISION ON MOTION TO STRIKE JURY CLAIM
This is an action by plaintiff Fleet National Bank (“Fleet”) to recover damages on a promissory note executed in its favor by defendant Fiore Neylan Travel, Inc. (“FNT”), by and through its president, defendant Stephen F. Fiore (“Mr. Fiore”), to secure a $50,000 line of credit and on Mr. Fiore’s personal guaranty of FNT’s obligations under that note. Claiming in its two-count Complaint that the note is in default, Fleet seeks to recover the entire unpaid balance on the note, including outstanding principal, accumulated interest, reasonable attorneys fees and its costs of collection, from both defendants.
On or about January 14, 2004, the defendants claimed this case to the jury list. About six weeks later, on February 23, 2004, without first objecting to the defendants’ jury claim, the plaintiff moved this court to strike the case from the jury list, claiming that the defendants had waived their right to a jury trial under the express provisions of their note and guaranty.
In support of its Motion to Strike, the plaintiff claims that the waiver provisions of the subject note and guaranty are presumptively enforceable under the authority of L&R Realty v. Connecticut National Bank, 246 Conn. 1, 16, 715 A.2d 748 (1998), because they were agreed to prior to litigation in a commercial contract where they conspicuously appeared. On the latter point in particular, the plaintiff contended in its Brief that:
The waiver clause is close to the parties’ signatures. The jury list waiver was not buried in the middle of a document. The waiver was in bold print. Because it was on a signature page, it is very likely the defendants looked at the signature page longer than any other page, if only for the purposes for execution.
Given all of these factors, the court should find the waiver clause was conspicuous in this case.
Brief in Support of Motion to Strike from Jury List (2/19/04) (“Plaintiff’s Brief”), pp. 2-3. On that basis, the plaintiff demanded that the defendants’ waivers be enforced by striking this case from the jury list unless the defendants could prove by a fair preponderance of the evidence that they lacked a clear intent to be bound by those waivers.
The defendants opposed the plaintiff’s motion by filing an Objection and supporting Memorandum together with an Affidavit from Mr. Fiore. As specific grounds for their Objection, they argued: (1) that the plaintiff had challenged their jury claim by an outmoded, improper procedural vehicle; and (2) that if the merits of the plaintiff’s waiver claim are reached, an examination of the factors bearing on the enforceability of their waivers, as described by the Supreme Court in its concededly controlling L&R Realty decision, compels the conclusion that the waivers are not enforceable because there is no clear evidence that they intended to be bound by such waivers.
In L&R Realty, the Supreme Court held that:
express commercial jury trial waivers entered into prior to litigation are presumptively enforceable. In order to rebut this 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. 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. In addition, the party seeking to avoid enforcement may come forward with evidence that there was an inequality of bargaining power, that he or she was not represented by counsel, or other evidence indicating a lack of intent to be bound by the waiver provision. Once the party seeking to invalidate the waiver has come forward with such evidence, the trial court must hold a hearing at which additional evidence may be received. At this hearing, the party seeking to avoid the waiver carries the burden of proving, by a fair preponderance of the evidence, the lack of a clear intent to be bound by the waiver provision.
L&R Realty v. Connecticut National Bank, supra, 246 Conn. at 16.
In their Objection to the plaintiff’s Motion, the defendants based their claim that they did not intend to be bound by the jury waiver provisions of their note and guaranty upon the following factual allegations: first, that those provisions were not placed conspicuously in the note or guaranty; second, that they were induced by the plaintiff’s deceit and misrepresentations to sign the note in blank, without the aid of counsel or the ability to negotiate for the modification of its pre-printed terms; and third, that in any event, there was a significant disparity in bargaining power between themselves and Fleet, the large corporate plaintiff. In light of these allegations, and of the averments by Mr. Fiore in his supporting affidavit, the Court set the plaintiff’s motion down for an evidentiary hearing on July 19, 2004.
At the hearing, the evidence presented consisted of a single documentary exhibit–the original Fleet Small Business Credit Application submitted by FNT, including the signed note and guaranty–and testimony from the only two signatories on that document: Fleet Bank officer and senior business specialist Lynn Roland (“Ms. Roland”), who dealt personally with Mr. Fiore in connection with the subject Application; and Mr. Fiore, who signed and submitted the Application, including the note and personal guaranty. Based upon such evidence, the court concludes, for the reasons stated in Part II of this Memorandum Order, that the waivers here challenged are valid and enforceable, and thus that the plaintiff’s motion must be GRANTED.
I
The Court need not pause long to address the defendants’ initial challenge to the plaintiff’s Motion, which even they correctly concede to be “technical and procedural.” The basis for that challenge, which some judges of this Court have taken note of without ever basing a ruling on it; see, e.g., Town of Wallingford v. Reliance Ins. Co., Superior Court, judicial district of New Haven, Docket No. CV 99 0420955 (January 13, 2000, Silbert, J.) (26 Conn. L. Rptr 270, 274 n.3); is that former Practice Book § 282, which previously authorized the filing of motions to strike cases from the jury list, was repealed, without a new procedure to replace it, as of October 1, 1996.
In light of the repeal, Attorneys Horton and Knox have commented that “an objection to a jury claim filed under [Practice Book § 14-10] may suffice” to seek the relief once available under Practice Book § 282 with respect to an improper jury claim. Nowhere, however, is it written–in statute, court rule or controlling case law–that filing an objection is the only correct procedure for challenging an improper jury claim. Hence, since even the defendants acknowledge that the repeal of Practice Book § 282 was not intended to disenable parties aggrieved by improper jury claims from challenging those claims by some procedure, and no mandatory procedure exists for making such a challenge, the plaintiff’s choice of title for its present challenge matters not at all.
II
Turning to the defendants’ substantive challenge to the enforceability of the express jury waiver provisions of the subject note and guaranty, the Court will first note, as the parties have agreed, that the question presented for decision is whether the defendants have “carried the burden of proving, by a fair preponderance of the evidence, the lack of a clear intent [on their part] to be bound by the waiver provisions” L&R Realty v. Connecticut National Bank, supra, 246 Conn. at 16. It must further note, as the parties have also agreed, that in deciding this issue, appropriate factors to consider include the following,
[which] federal courts and the courts of our sister states generally have looked to . . . in determining the validity of [jury] waivers: (1) the conspicuousness of the waiver clause, including (a) its location relative to the signatures of the parties, (b) whether it was buried in the middle of a lengthy agreement, and (c) whether it was printed in a different typeface or font size than the remainder of the contract; (2) whether there was a substantial disparity in bargaining powers between the parties to the agreement; (3) whether the party seeking to avoid enforcement was represented counsel; (4) whether the opposing party had an opportunity to negotiate the terms of the agreement; and (5) whether the opposing party had been fraudulently induced into agreeing specifically to the jury trial waiver.
L&R Realty v. Connecticut National Bank, supra, 246 Conn. at 15. Since the defendants have argued that several such factors weigh in their favor as to clarity of their intent to be bound by the waiver provisions here at issue, the court will discuss them all, either singly or in combination with other relevant factors bearing on that issue.
The first factor claimed by the defendants to undermine the validity of their jury waivers but by the plaintiff require enforcement of those waivers is the conspicuousness of the challenged waiver provisions. The defendants claim that the provisions were not conspicuous because they were “buried in the middle of a long application which also supposedly contained the note and guaranty at issue.” Objection (3/10/04), p. 3. The plaintiff disagrees, with the Court’s concurrence, for the reasons that follow.
In evaluating the parties’ conflicting claims on this issue, the Court must first examine the face of their agreement in light of the criteria by which our Supreme Court has determined that the conspicuousness or non-conspicuousness of jury waivers must be judged. The relevant criteria, as listed by the L&R Realty Court, are “(a) [what is the waiver clause’]s location relative to the signatures of the parties, (b) whether it was buried in the middle of a lengthy agreement, and (c) whether it was printed in a different typeface or font size than the remainder of the contract.” Id., p. 15. Applying these criteria to the case before it, the L&R Realty Court found that:
There is no evidence on the face of the documents indicating that the parties did not accede to the jury trial waiver [footnote omitted]. The clause contained in the loan agreement signed by the general partners of L&R and the clause contained in the guarantee signed by Gail LeFoll were both located in separate paragraphs located near the signatures and were printed in boldface. The waiver clause on the loan agreement was explicitly titled “Waiver of Trial by Jury.”
Id., p. 17.
Applying the L&R Realty Court’s analysis to the waiver provisions here at issue, this Court concludes that both were at least as conspicuous as the provisions upheld in L&R Realty, for the following reasons. First, although the provisions appear in different sections of a lengthy, two-sided Application form, each appears in the text of the relevant section directly above Mr. Fiore’s signature, where it is set off from the balance of the text in some visible way. In the eighth numbered section of the application, which is appropriately entitled “Line of Credit Note,” the waiver provision is printed all in capital letters following a boldfaced caption reading “WAIVER OF JURY TRIAL,” appears as follows:
WAIVER OF JURY TRIAL Bank and borrower hereby voluntarily and irrevocably waive trial by jury in any proceeding hereafter instituted by or against bank or borrower, of any kind, in any court, arising out of this note. The agreement or any agreement now or hereafter securing or related to this note.
Fleet Small Business Credit Application (Exhibit # 1), § 8. The presence and significance of this language would have been evident to anyone who even glanced at the text of the section before signing below it. Indeed, nothing short of failing to read it at all, however briefly or superficially, could have engendered any lack of clarity on the subject it covered, and that of course is no excuse, for failing to read one’s own contract will not relieve a contracting party of his obligations under that contract “in the absence of accident, fraud, mistake or unfair dealing].” Batter Building Materials Co. v. Kirschner, 142 Conn. 1, 7, 110 A.2d 464 (1954).
The waiver provision in Mr. Fiore’s personal guaranty, though not identical to that appearing in FNT’s note, is also clearly set off from the balance of the seventh numbered section of the Application, which is entitled “Personal Guaranty.” It appears, more particularly, as the first clause of the first sentence is the only part of the guaranty that is printed all in capital letters:
GUARANTOR IRREVOCABLY WAIVES TRIAL BY JURY IN ANY PROCEEDING OF ANY KIND, IN ANY COURT, ARISING OUT OF THIS GUARANTY[.]
Application, § 7. Because the guaranty has no captions, [*12] headings or boldfaced text of any kind, the waiver provision is logically the first place to which even the most casual reader’s eye would be drawn upon scanning its text before signing it. Here again, it must be noted that a contracting party’s failure to read his contract before signing it cannot excuse his obligations thereunder “in the absence of accident, fraud, mistake or unfair dealing.” Batter Building Materials Co. v. Kirschner, supra, 142 Conn. at 7.
Based upon the foregoing observations, the Court must reject the defendants’ initial argument in support of their substantive challenge to the validity and enforceability of their jury waivers. In sum, both waiver provisions are conspicuous, in the sense that they are sufficiently highlighted in and set off from the balance of the text, in the sections where they appear, to give fair notice to any reasonably prudent person as to the commitments he was making by signing below them. As such, they strongly tend to prove, rather than to disprove, that Mr. Fiore, when he signed below them, was aware of those waivers, and thus that he fully intended to bind both himself and his company thereby.
The defendants’ second agreement in support of their claim that they did not clearly intend to be bound by the jury waiver provisions of their note and guaranty is that they were induced by the plaintiff’s deceit and misrepresentations to sign those documents in blank, without the aid of counsel or any opportunity to negotiate the terms of their jury waiver provisions. In support of this claim, the defendants attempted to prove, at the evidentiary hearing, that the plaintiff’s representative, Ms. Roland, actively solicited FNT’s business by personally approaching Mr. Fiore, a long-time friend, on several occasions to urge him to take out a line of credit. In these conversations, as Mr. Fiore claimed to recall them in his testimony, Ms. Roland advised him that a line of credit would be useful to his business because interest rates were then low, that he would not need a lawyer to take out the line of credit because all of the documents he would need to complete to apply for it were standard, and that she could simply leave off all the documents he needed to sign at his business, where he could sign them in blank in places she would mark for him, with the understanding that she then pick them up from him and return them to her office, where she would later sign them after filling in all the necessary details. Thus it is, he claimed, that on the day he signed the note and guaranty, Ms. Roland simply dropped off the Application at his office, where he signed it in all the places she had indicated with black X’s or post-its, without having any discussion with her as to what he was signing. Among the things he claims he did not know when he signed the Application in the spaces indicated were that he was signing a personal guaranty and that he was waiving his and his company’s right to trial by jury in any lawsuit concerning the note or guaranty. He claims that he did not read the document fully or carefully because of the faith he put in his friend, Ms. Roland.
The plaintiff disputes the foregoing claim in several ways. First, in its cross examination of Mr. Fiore, it elicited admissions from him that at no time did he feel pressured by anything Ms. Roland said or did, that at no time did she tell him anything that was untrue, and that he never read the Application closely or raised any questions about its contents, much less attempted to negotiate any of its terms.
In addition, as previously noted, the plaintiff presented the testimony of Ms. Roland, who directly contradicted Mr. Fiore’s version of events on the day he signed the Application. Ms. Roland explained that she had Mr. Fiore sign the Application in her presence, as she and he sat together in his office, and thus that she not only signed the Application as Fleet’s representative but personally witnesses Mr. Fiore’s signatures on it, as indicated thereon. In accordance with her standard practice, and as a service to her customers, she filled out the Application in his presence based upon his answers to her verbal questions, then handed it back to him for his signatures. The signatures were placed on lines in the form where black X’s were pre-printed.
By the foregoing testimony, Ms. Roland flatly denied leaving the Application for Mr. Fiore to sign in blank. Furthermore, she expressly denied urging him not to hire a lawyer, noting only that it was her general practice, when asked by customers if they needed to hire a lawyer, that the Bank did not require one. Finally, in response to Mr. Fiore’s claim that he did not know he was signing a personal guaranty, Ms. Roland testified that, although she did not remember any discussion on that topic, she always told her customers that they were signing a personal guaranty when they reached that part of the Application. She expressed certainty that Mr. Fiore, an experienced businessman, knew the meaning of the term “personal guaranty,” and that he was well aware that he was giving one when he signed in the space directly below that section of the Application, which of course was labeled “Personal Guaranty.”
Even if everything Mr. Fiore testified to were true, the picture he paints of the process by which the subject note and guaranty were signed is hardly marked by deceit or misrepresentations, as the defendants shrilly trumpeted in their Objection to the Motion. To the contrary, the picture that emerges from Mr. Fiore’s testimony is that of a businessman who knew what he wanted–a $50,000 line of credit–but didn’t trouble himself with the details printed in the documents he had to sign in order to apply for it. Having expressly admitted that Fleet’s representative, his friend, Ms. Roland, never pressured him in any way and never told him anything that was untrue, he, by his own account, has only himself to blame for not carefully reading what he was signing and reconsidering his options based upon what he read.
The Court finds, moreover, that Mr. Fiore did know what he was doing when he signed the note and guaranty, because his description of the process by which the Application was signed and submitted is far less credible than Ms. Roland’s, as the signed Application clearly confirms. Ms. Roland’s testimony was coherent and credible because she testified straightforwardly, recalling only what one would expect her to recall about an unremarkable event over two years ago, and declining every opportunity to fill in gaps in her recollection by concocting and adding self-serving detail to make her story appear more complete.
Mr. Fiore, by contrast, made incredible claims that colored his entire testimony. Most critically, of course, he claimed that Ms. Roland was not present when he signed the Application, but instead that she left it for him to sign in blank, with only black X’s or post-its to indicate where he should sign. In her absence, he claims, he was unable to discuss it with her before he signed it, and thus did not realize, when he signed the personal guaranty in particular, that he was signing not as company president, but in his personal capacity. He would have this Court believe that Ms. Roland was lying when she signed the Application in multiple locations to indicate that she had personally witnessed his signature thereon.
It is inconceivable to the Court that Mr. Fiore, though “recalling” that the uncompleted application had been left for him to sign in blank, with only black X’s or post-its marking the places where he should sign, would not recall which method Ms. Roland actually used to mark those places. In fact, the Application had two signature lines marked with pre-printed black X’s below each of its sections where signatures were required, yet Mr. Fiore only signed one of each. Just as Ms. Roland testified, these lines were not marked by her, but were already present on the blank Application forms when she received them from the Bank’s supplier.
It is also inconceivable to the Court that Ms. Roland would have risked the Bank’s money or her own job of many years by attesting to Mr. Fiore’s signature if in fact she did not see him sign the Application. She had nothing to gain by taking such a reckless course, and everything to lose if the client duped her by having an imposter sign in his stead. She claims that did not do so here, and the Court believes him.
Apart from Ms. Roland’s own signatures on the note and guaranty attesting to her witnessing of Mr. Fiore’s signatures, the most compelling proof that she was actually present when he signed them, that she correctly explained their contents to him at that time, and that he understood her explanations is in his own handwriting, to wit: his own dated signatures. Of interest, in particular, is that although Mr. Fiore correctly signed both the note and the authorization agreement for the bank to obtain credit information about FNT from third parties as “Stephen F. Fiore, Pres.,” he correctly signed the personal guaranty simply as “Stephen F. Fiore.” This critical distinction among his signatures on the completed Application obviously did not occur by accident. Instead, it reflects a contemporaneous understanding by Mr. Fiore that he was signing and binding himself, and not his company, by the terms of his personal guaranty. By the same token, it clearly establishes that he read with discernment what was put before him, including its conspicuous jury waiver provisions. He did not attempt to negotiate different terms not because he did not think he could do so, or because he did not have counsel, but because those provisions did not trouble or concern him. It is true, of course, that Mr. Fiore did not hire an attorney to assist him with this transaction, but contrary to the claim in the defendants’ Objection to this Motion, that did not result from any pressure tactics or deceitful or misleading conduct by Fleet. This Court thus rejects the second basis upon which the defendants base their claim that they did not clearly intend to be bound by the jury waiver provisions of their note and guaranty.
Against this background, the third basis for the defendants’ lack-of clear-intent-to-be-bound claim–that there was a marked disparity in bargaining power between FNT and Fleet–must also be rejected because, as the subject transaction was completed, it simply never came into play. Having never even thought about proposing changes in the terms of the note or guaranty, instead agreeing to them for their own good reasons without pressure or false inducements or misrepresentations of any kind, the defendants were not at all frustrated in achieving their commercial objectives by the plaintiff’s large size or assertedly greater bargaining power. Indeed, since rates were then so low that Fleet was allegedly soliciting FNT’s business, there is nothing on this record to show that the defendants, as interested customers in what appears to have been a buyer’s market, could not have secured more favorable terms if they had desired them on the threat of taking their business elsewhere if they were not satisfied. In short, the defendants’ third and final basis for proving that they lacked a clear intent to bind themselves to the jury waiver provisions of their note and guaranty must also be rejected.
CONCLUSION
The defendants have failed to prove by a fair preponderance of the evidence that they did not clearly intend to be bound by the jury waiver provisions of their subject note and guaranty. Such provisions, having been agreed to by them, prior to litigation, in a commercial contract where they conspicuously appeared, are therefore presumptively enforceable against them. Accordingly, the plaintiff’s instant motion must be GRANTED, and this case must be stricken from the jury list forthwith.
IT IS SO ORDERED this 5th day of August 2004.
Michael R. Sheldon, J.