Poole v. Union Planters Bank, N.A.
2010 Tenn. App. LEXIS 259, 2010 WL 1404416, 337 S.W.3d 771 (2010)
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Rule of Law:
In Tennessee, a pre-dispute contractual waiver of the constitutional right to a jury trial in a civil case is permissible and enforceable, as it does not violate public policy or the state constitution.
Facts:
- In May 2000, Gregory Poole, an owner-operator truck driver, entered into a loan and security agreement with Union Planters Bank to finance the purchase of a truck.
- At the time of the agreement, a bank manager orally promised Poole that the Bank would handle the conversion of the truck's Alabama title to a Tennessee certificate of title.
- The Bank subsequently lost the original Alabama title, which prevented it from obtaining the Tennessee title for Poole for several years.
- Poole needed a copy of the Tennessee title to renew his truck's registration tags annually.
- In August 2004, state officials refused to renew Poole's tags without the proper Tennessee title.
- Consequently, from September 2004 to early December 2004, Poole was unable to legally operate his truck and was effectively put out of business.
- The original loan agreement, as well as two subsequent refinancing agreements signed by Poole in 2003, contained clauses stating that both parties waived the right to a jury trial in any potential lawsuit.
- The Bank eventually secured a duplicate Alabama title and provided Poole with the Tennessee title in early December 2004.
Procedural Posture:
- Gregory Poole filed a complaint against Union Planters Bank in a Tennessee trial court for breach of contract and other claims, demanding a jury trial.
- Nearly four years into the litigation, the Bank moved to compel arbitration or, alternatively, to strike Poole's jury demand based on the contractual waiver.
- The trial court denied the motion to compel arbitration but granted the motion to strike the jury demand.
- Following a bench trial, the court found in favor of Poole on his breach of contract claim, awarded him $6,566 in damages, but dismissed his other claims and denied his request for prejudgment interest.
- Poole, as appellant, appealed the trial court's judgment to the Tennessee Court of Appeals, challenging the enforcement of the jury waiver clause among other issues.
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Issue:
Is a pre-dispute contractual waiver of the right to a jury trial in a civil case enforceable under Tennessee law?
Opinions:
Majority - Farmer, J.
Yes. A pre-dispute contractual waiver of the right to a jury trial in a civil case is enforceable under Tennessee law. The Tennessee Constitution guarantees that the right to a trial by jury shall remain inviolate, but it does not forbid or limit how that right may be waived in a civil case. Unlike other states whose courts have invalidated such waivers based on specific statutory language limiting waiver to pending litigation, Tennessee has no such statutes. The court reasoned that public policy strongly favors freedom of contract, and parties are generally free to bargain away personal constitutional rights. Given that Tennessee public policy expressly supports pre-dispute arbitration agreements, which waive the right to a trial altogether, it would be inconsistent to prohibit the lesser waiver of only the right to a jury. Because Poole signed three separate contracts containing clear jury-waiver provisions, and presented no evidence of fraud or unconscionability, the waiver was deemed knowing and voluntary and was therefore enforceable.
Analysis:
This case establishes, as a matter of first impression in Tennessee, the validity of pre-dispute contractual jury trial waivers in civil litigation. By aligning with the majority of U.S. jurisdictions, the court reinforces the principle of freedom of contract, placing these waivers on a similar footing as arbitration clauses. This decision provides legal certainty for commercial and consumer contracts, likely encouraging the widespread inclusion of such clauses to manage litigation risk and costs. Future litigation in this area will likely focus not on the general permissibility of these waivers, but on the specific circumstances of their execution and whether they were entered into knowingly, voluntarily, and intelligently.
