Roger Kaye, M.D., P.C. v. T.D. Banknorth, N.A. (2011)

MEMORANDUM OF DECISION

Presently before the court is the defendant's ¹ motion to strike the plaintiff's jury claim. (# 167.00.) In its motion the defendant claims that the court should strike the plaintiff's jury claim because the plaintiff and the defendant are parties to a business deposit account agreement under which the plaintiff expressly waived its right to a jury trial.   The motion was heard by the court on short calendar on January 3, 2011.

FACTUAL BACKGROUND

The plaintiff's complaint sets forth four counts claiming negligence, conversion, breach of agreement and unjust enrichment.   The plaintiff's complaint alleges that it is a professional corporation which manages the medical practice of Roger Kaye, M.D., and in that connection maintains an account at the branch of defendant's bank on Main Street in Norwalk.   Between January 1999 and January 2008, one of plaintiff's employees, Virginia Robie, wrongfully misappropriated substantial amounts of plaintiff's funds by obtaining checks payable to the plaintiff and depositing them into her own account at the same branch of defendant bank.   The plaintiff contends that the defendant's employees should have known that Robie had no authority to have these checks deposited into her account, and, as a result, the defendant should be held liable to the plaintiff for the losses it sustained as a consequence of Robie's theft of the plaintiff's funds.

On June 19, 2009, the plaintiff filed a claim for a jury of six in this matter.   Following an unsuccessful motion for summary judgment, the defendant filed a motion to strike this jury claim on October 28, 2010.   The defendant's motion to strike the plaintiff's jury claim is based on the claim that the plaintiff and the defendant are parties to a business deposit account agreement under which the plaintiff expressly waived its right to a jury.   Attached to the defendant's motion to strike is a notarized affidavit of Suzanne Ricciardelli, a regional security officer employed by the defendant.   The affidavit purports to authenticate a copy of a business deposit account agreement that the defendant claims took effect in January 2008.

In opposition to the defendant's motion to strike, the plaintiff filed a memorandum of law on December 1, 2010.   Attached to that memorandum was the notarized affidavit of the plaintiff's principal, Roger H. Kay, M.D. Attached to that affidavit is a copy of a signature card opening the plaintiff's bank account with Lafayette American Bank & Trust Company from 1998.   The signature card states certain terms and conditions governing the relationship between the plaintiff and Lafayette American Bank & Trust Company.   Those terms do not include a jury trial waiver.   The plaintiff's memorandum also makes reference to deposit agreements dated March 26, 1999 and March 1, 2004 which were attached as exhibits to the defendant's motion for summary judgment.   Neither of those agreements contained jury trial waivers.

On December 29, 2010, the defendant filed a reply memorandum.   Although the initial motion to strike the plaintiff's jury claim was based solely on the terms of the January 2008 agreement in its reply memorandum the defendant added a claim that an April 2006 agreement contained an identical jury trial waiver.   Attached to the reply memorandum were:  (1) the notarized affidavit of Leigh Bagley, who is a program manager with the defendant;  (2) a sample “welcome kit” sent to new customers by the defendant;  (3) certified excerpts of the deposition transcript of the plaintiff's principal;  (4) a stipulation of facts entered into by the parties in this case dated December 29, 2010;  (5) the plaintiff's memorandum of law in opposition to an earlier summary judgment motion in this case dated January 27, 2010 and (6) Judge Adams' memorandum of decision denying this summary judgment motion dated September 1, 2010.   The parties appeared before the court and argued this motion at short calendar on January 3, 2011.

A review of the evidence submitted in support of the defendant's motion and in opposition to it reveals the following facts regarding the history of the plaintiff's bank account.   In 1998, the plaintiff opened a checking account with Lafayette American Bank & Trust Company.   As a part of the process of opening the account, the plaintiff's principal signed a signature card, which is attached to the affidavit of the plaintiff's principal.   There is no evidence before the court that this signature card or any other agreement between the plaintiff and Lafayette American Bank & Trust Company provided for a jury trial waiver.   In 1999, Lafayette American Bank & Trust Company merged with Hudson United Bank. Hudson United Bank subsequently merged with the defendant and all of the Hudson United Bank accounts were transferred to the defendant on May 19, 2006.   In her affidavit, Bagley attests that during this merger process, the defendant mailed a “welcome kit” to all of its new customers.   Included in this welcome kit was a form of business deposit account agreement then in effect between the defendant and its customers (the April 2006 agreement).   This business deposit account agreement included with the “welcome kit” contained a jury trial waiver.   In his affidavit, the plaintiff's principal attests that he does not remember receiving the April 2006 deposit account agreement.²  By the time that the plaintiff had commenced this lawsuit in 2008, the defendant had issued a new business deposit account agreement dated January 2008 that superseded the earlier agreement.

The January 2008 business deposit account agreement contains a jury trial waiver on page twenty-three.   The subject clause provides in relevant part:  “Jury Trial Waiver.   YOU AND WE EACH AGREE THAT NEITHER YOU NOR WE SHALL (A) SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER ACTION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY ACCOUNT OR THE DEALINGS OF THE RELATIONSHIP BETWEEN YOUR OR U.S. ․ THE PROVISIONS OF THIS SECTION SHALL BE SUBJECT TO NO EXCEPTIONS.   NEITHER YOU NOR WE HAVE AGREED WITH OR PRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.   YOU AND WE EACH ACKNOWLEDGE THAT THIS WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE.” The April 2006 business deposit account agreement attached to the Bagley affidavit has identical language.   The issue before the court is whether this waiver provision forms part of a legally enforceable agreement between the parties.

LEGAL DISCUSSION

A. Propriety of Motion to Strike

In its memorandum of law in opposition, the plaintiff first argues that the defendant's motion should be denied because it is procedurally improper.   Accordingly, the court must first address the question of whether the defendant can challenge the plaintiff's jury claim by means of a motion to strike.   “Historically, a motion to strike, pursuant to Practice Book (1978 Rev.) § 282, had been the proper vehicle to strike a jury claim ․ Since the repeal of § 282 in 1996, a party wishing to challenge an improper claim for a jury should file an objection to the claim under Practice Book § 14–10 ․ or the court can treat a motion to strike as an objection to the jury claim.”  (Internal quotation marks omitted.)   Rocque v. Sound Manufacturing, Inc., Superior Court, judicial district of Hartford, Docket No. CV 99 0588424 (May 22, 2002, Hennessey, J.) (32 Conn. L. Rptr. 250, 250);  McNeil v. Silverman, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 00 0178460 (November 16, 2000, Hickey, J.) (29 Conn. L. Rptr. 91, 92);  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] (“[t]he appropriate method for a challenge to a claim for a jury trial is by an objection”).   This opinion is also shared by the authors of the annotated Practice Book rules, who state that “[s]ince the 1996 repeal of [Practice Book § ] § 282 (the rule providing the authority for a motion to strike a case from the jury docket), an objection to the claim filed under [Practice Book § 14–10] may suffice.”   W. Horton & K. Knox 1 Connecticut Practice Series:  Connecticut Superior Court Civil Rules (2011) § 14–10, p. 740.

At the same time, as noted by another Superior Court judge, “[n]owhere ․ 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.”   Fleet National Bank v. Fiore Neylan Travel, Inc., Superior Court, judicial district of Hartford, Docket No. CV 03 0828385 (August 5, 2004, Sheldon, J.).   Given the fact that the Practice Book section that previously authorized motions to strike was affirmatively taken out of the rules of practice, logic would dictate that an objection to a jury claim rather than a motion to strike is the proper vehicle in which to challenge the validity of a claim for a jury.

Nevertheless, multiple Superior Court judges, including this court, have treated a motion to strike a jury claim as an objection and ruled on the merits of the objection.   See, e.g., Giorgio v. Greenwich, Superior Court, judicial district of Stamford–Norwalk at Stamford, Docket No. CV 06 4008050 (March 5, 2008, Tobin, J.) (45 Conn. L. Rptr. 165, 166);  Trantolo v. State, Superior Court, judicial district of Hartford, Docket No. CV 97 0569575 (June 8, 1999, Teller, J.) (25 Conn. L. Rptr. 19, 20) (“this court will treat the defendant's motion to strike as an objection to the plaintiffs' jury claim”);  People's Bank v. Dauphin, Superior Court, judicial district of Tolland, Docket No. CV 9456120 (June 13, 1997, Rittenband, J.) (19 Conn. L. Rptr. 614, 615) (court considered motion to strike as an objection to the jury claim pursuant to Practice Book § 260, now § 14–10).

In Massey v. Branford, 115 Conn.App. 153 (2009), the Appellate Court noted, without adverse comment, the trial court's action in granting defendant's motion to strike the plaintiff's jury list claim.   See also, Walker Manor v. Oyster Landing, Superior Court, complex litigation docket at Waterbury, Docket No. X02 CV 06 4012839–S (Mar. 27, 2009, Eveleigh, J.) [47 Conn. L. Rptr. 425], striking a jury claim.   The court finds that it is entirely appropriate to treat the defendant's motion to strike as an objection filed under Practice Book § 10–14 and fully address the issues presented.

B. Merits of the Motion to Strike

In the memorandum of law in support of its motion to strike, the defendant argues that the jury trial waiver found in the January 2008 agreement should be enforced by this court.   Specifically, the defendant argues that Connecticut recognizes the validity of contractual jury trial waivers pursuant to the doctrine of freedom of contract and this state's policy of favoring efficient dispute resolution.   The defendant further argues that the plaintiff knowingly and voluntarily entered into a contractual agreement with the defendant to waive a jury and that the subject jury trial waiver is clear and conspicuous.

The plaintiff responds that there is no evidence indicating that it intended to waive its right to a jury trial when it opened a bank account with Lafayette American Bank & Trust Company in 1998.   The plaintiff notes that the signature card opening that account does not contain a jury trial waiver and that the deposit agreement governing that account has not been provided as evidence.   Furthermore, the plaintiff points to the fact that it did not execute a signature card with the defendant when the defendant obtained control of the plaintiff's bank account from Hudson United Bank. For these reasons, the plaintiff argues that the defendant cannot clearly demonstrate that the plaintiff intended to waive a jury.   The plaintiff also notes that the January 2008 deposit agreement was not in effect during the entirety of the time period when Robie committed her malfeasances and that the plaintiff should be entitled to a jury because only one of its four claims sound in breach of contract.

In its reply memorandum, the defendant argues that the plaintiff should be held to the jury trial waiver in either the April 2006 or January 2008 business deposit account agreements because the defendant mailed those agreements to the plaintiff's principal and the plaintiff accepted benefits under those agreements.   The defendant also notes that the plaintiff could have taken its banking elsewhere if it did not want to adhere to the jury trial waiver.   Morever, the defendant contends that it is patently unfair and inconsistent for the plaintiff to have brought suit under the subject business deposit account agreements and now claim that it is not legally bound by the requirements found in these contracts.   The defendant contends that the operative agreements are the April 2006 and January 2008 agreement, not any agreement with Lafayette American Bank & Trust Company, because the later agreements superceded any past ones.   Furthermore, the defendant argues that the plaintiff has not met its burden to demonstrate that it did not intend to waive a jury trial.

The defendant's briefs cite to a few out of state cases in support of its conclusion that the jury trial waiver found in the January 2008 agreement can be enforced.³  An examination of these cases, however, shows that none of them are factually on point.   For example, in Brian Wallach Agency, Inc. v. Bank of New York, 75 App.Div.2d 878, 428 N.Y.S.2d 280 (1980), the New York Appellate Division, Second Department, upheld a jury trial waiver made between a bank and its customer.   Nevertheless, that case differs from the present matter because the facts indicate that in Brian Wallach Agency, Inc., “[t]he corporate resolution (on a bank-supplied form) submitted by the plaintiff to the bank upon the opening of plaintiff's checking account contained ․ a waiver of a jury trial.”  Id., 879.   This fact indicates that the plaintiff affirmatively submitted a form containing a jury trial waiver to the bank when it opened the subject account.   The Brian Wallach Agency, Inc. court also notes that upon opening the bank account, the plaintiff in that case “executed a signature card, which acknowledged receipt of, and consent to, the agreement with the defendant bank's predecessor ․”Id., 879.   Consequently, it can further be concluded that the plaintiff in Brian Wallach Agency, Inc. agreed in writing that it had received the subject regulations.   Neither of those facts are present in the matter that is currently before the court.

Additionally, the defendant cites an unpublished opinion from the Nevada Supreme Court where that court upheld a contractual jury trial waiver between a bank and its customer.⁴  In reaching this decision, the Nevada Supreme Court noted that the plaintiff “has a checking account with real party in interest Wells Fargo Bank. The checking account includes a Customer Account Agreement ․ that contains a jury trial waiver provision.”Casey v. Third Judicial District Court, Supreme Court of Nevada, Docket No. 51593 (September 25, 2009).   The Nevada Supreme Court further noted that the applicable jury trial waiver “had been supplied” to the plaintiff.  Id. Although the facts are not clear as to whether the plaintiff originally opened the account with Wells Fargo Bank, there are no predecessor banks mentioned in the decision.   As a result, it does not appear that there were any concerns regarding whether the plaintiff was on notice of the waiver provision and had knowingly and voluntarily entered into it.

The defendant relies on a number of Connecticut Superior Court cases where judges have upheld arbitration agreements in the context of parties suing their credit card company.   Although contractual arbitration provisions between credit card companies and their customers are arguably analogous to the present case because there are many similarities between those adhesion style contracts and that used by the defendant in this matter, those cases are not directly on point.   Moreover, none of the cases represent mandatory appellate authority.

The court finds that it is more appropriate to apply the leading Connecticut appellate cases regarding contractual provisions containing a jury trial waiver.   The Constitution of State of Connecticut, article first, § 19, provides that “the right of trial by jury shall remain inviolate ․” “[That] provision guarantees the right to a jury trial in all cases for which such a right existed at the time of the adoption of that constitutional provision in 1818.”  (Internal quotation marks omitted.)  Ackerman v. Sobol Family Partnership, LLP, 298 Conn. 495, 532 (2010).  “Although fundamental, the right to a trial by jury is subject to certain limitations.”  L & R Realty v. Connecticut National Bank, 246 Conn. 1, 9 (1998).  “Moreover, the right to a jury trial may be waived,” including via a prelitigation contract between the parties.  Id., 10.  “[J]ury trial waivers entered into in advance of litigation are enforceable where there is clear evidence of an intent to waive.”  Id., 14.   The Connecticut Supreme Court has identified the following factors by which our courts judge the enforceability of contractual waiver provisions:  “(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 power between the parties to the agreement;  (3) whether the party seeking to avoid enforcement was represented by 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.”  Id., 15.

When applying the L & R Realty factors to the present case, the following conclusions can be made.   The language of the January 2008 waiver clause is unambiguous in that it clearly waives a jury trial for all claims between the parties.   At the same time, although the waiver clause is conspicuous in that it is found in a separate section with a bold face heading and it is printed in all capital letters, it is located on page twenty-three of a thirty-nine page agreement.   Accordingly, the jury trial waiver provision is buried in the middle of a rather lengthy document.   It should further be noted that the plaintiff never signed this document and our Supreme Court has deemed this an important consideration as one of the L & R Realty factors is the proximity of the waiver clause to the signature of the parties.   With respect to the second factor, 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.   With respect to the third and fourth factors it is unclear whether the plaintiff was represented by counsel ⁵ or if the plaintiff had the opportunity to negotiate the terms of the agreement.⁶  The final factor is not relevant, since the plaintiff does not make any claims of fraud.

In the present case, the defendant has provided the court with documents containing jury trial waivers that were not signed by the plaintiff.   The defendant contends that April 2006 agreement was mailed to the plaintiff when it merged with Hudson United Bank, but the defendant's evidence fails to establish that the plaintiff received either the April 2006 or the January 2008 deposit account agreement.   In his affidavit the plaintiff's principal explicitly denies remembering receiving either of these documents and claims that he never intended to waive the plaintiff's right to a trial by jury.   Bagley's affidavit states that in 2006 it was in the regular course of the defendant's business to mail a copy of the welcome kit and the then operative business deposit account agreement to all new customers, and that the kit “should ⁷ have been mailed” to the plaintiff.   However, the defendant offered no evidence from its business records showing that either the 2006 or 2008 assessments were actually sent to or received by the plaintiff.   Under these circumstances and in light of the fact that the jury waiver clause in both 2006 and 2008 assessments are buried in the middle of a long document, the court cannot determine that this waiver is “presumptively enforceable.”

In the present case, there is no evidence that there was an existing jury trial waiver when the plaintiff opened its account with Lafayette American Bank & Trust Company.   Although a jury trial waiver was purportedly added to the business deposit account agreement when the defendant subsequently obtained control of the plaintiff's account, there is no evidence before the court that the plaintiff was either sent or received any documentation informing it of the change or that the plaintiff affirmatively assented to a jury trial waiver.   Accordingly, the court finds that the evidence does not show that the plaintiff knowingly and voluntarily waived a jury.   Therefore, the defendant's motion to strike the plaintiff's jury claim is denied.⁸

David R. Tobin, J.

FOOTNOTES

FN1. The defendant, now known as TD Bank, N.A. was formerly known as T.D. Banknorth, N.A. and was sued under that name..  FN1. The defendant, now known as TD Bank, N.A. was formerly known as T.D. Banknorth, N.A. and was sued under that name.

FN2. Specifically, the plaintiff's principal attests that:  “I have no recollection of receiving the 2007 TD Banknorth, N.A. deposit agreement attached to the affidavit in support of the defendant's motion to strike the jury claim when I opened the Lafayette American Bank & Trust Co. account in 1998.”   This attestation obviously makes little sense because it would have been impossible for the plaintiff's principal to have received a 2007 agreement when opening a bank account in 1998.   Nevertheless, this statement can be construed as the plaintiff's principal attesting that he cannot remember receiving the subject business deposit account agreements..  FN2. Specifically, the plaintiff's principal attests that:  “I have no recollection of receiving the 2007 TD Banknorth, N.A. deposit agreement attached to the affidavit in support of the defendant's motion to strike the jury claim when I opened the Lafayette American Bank & Trust Co. account in 1998.”   This attestation obviously makes little sense because it would have been impossible for the plaintiff's principal to have received a 2007 agreement when opening a bank account in 1998.   Nevertheless, this statement can be construed as the plaintiff's principal attesting that he cannot remember receiving the subject business deposit account agreements.

FN3. In their respective memoranda of law, the parties contend that there are no Connecticut cases on point.   Independent research has also failed to reveal any cases where a Connecticut court has examined a contractual jury trial waiver in the context of an agreement between a bank and its customers..  FN3. In their respective memoranda of law, the parties contend that there are no Connecticut cases on point.   Independent research has also failed to reveal any cases where a Connecticut court has examined a contractual jury trial waiver in the context of an agreement between a bank and its customers.

FN4. Notably, as this is an unpublished decision, Nevada's civil procedure rules mandate that this case is not regarded as precedent and cannot be cited as legal authority in that state.   See Nevada SCR 123..  FN4. Notably, as this is an unpublished decision, Nevada's civil procedure rules mandate that this case is not regarded as precedent and cannot be cited as legal authority in that state.   See Nevada SCR 123.

FN5. Although the defendant's briefs claim that the plaintiff's principal is a practicing attorney in addition to being a medical doctor, there is nothing to support this proposition in the evidence offered in support of the defendant's motion.   Moreover, the court finds the claim to have little relevance..  FN5. Although the defendant's briefs claim that the plaintiff's principal is a practicing attorney in addition to being a medical doctor, there is nothing to support this proposition in the evidence offered in support of the defendant's motion.   Moreover, the court finds the claim to have little relevance.

FN6. Given the adhesion nature of these types of banking agreements, the likelihood is that the plaintiff would have had no opportunity to negotiate the terms of its agreement with the defendant..  FN6. Given the adhesion nature of these types of banking agreements, the likelihood is that the plaintiff would have had no opportunity to negotiate the terms of its agreement with the defendant.

FN7. Emphasis supplied by the court..  FN7. Emphasis supplied by the court.

FN8. Having made this determination, it is unnecessary for the court to examine the plaintiff's alternative argument that it is entitled to a jury trial because only one of its four causes of action is for breach of contract and it would be inequitable to deny a jury trial on its remaining claims..  FN8. Having made this determination, it is unnecessary for the court to examine the plaintiff's alternative argument that it is entitled to a jury trial because only one of its four causes of action is for breach of contract and it would be inequitable to deny a jury trial on its remaining claims.

Tobin, David R., J.