The Michigan Court of Appeals held in Egan v. Prop Services, Docket No. 336358, (June 2018) that courts cannot override a contractual jury trial waiver of one defendant, even where a co-defendant is entitled to a jury trial.
The plaintiff and the defendant corporations entered into two contracts obligating the plaintiff to design, fabricate, and deliver pipe for the defendant to install in a New York paper plant. The plaintiff sued defendant for breach of contract and the defendant counter-sued on the same ground. The plaintiff also sued the CEO of the defendant corporation for an alleged violation of the Michigan Builder’s Trust Fund Act. Two jury trials ensued. The Parties’ contracts, however, included a broad provision waiving their right to trial by jury. The trial court refused to enforce this provision. The Court of Appeals held that that was an error and reversed and remanded for a new trial.
The trial court relied on Mink v Masters to hold that “once one party timely demands a jury trial, [in the present case, the co-defendant CEO had the right to a jury trial through the parties’ stipulation] all of the other parties in the litigation may rely on that demand without doing anything further – irrespective of whether the other parties would have otherwise waived a right to jury trial.” Mink v Masters, 204 Mich App 242; NW2d 235 (1994). The defendant attempted to use the co-defendant CEO’s right to a jury trial as a loophole to nullify the contractual waiver to a jury trial between the parties.
The Court of Appeals, however, disagreed with defendant’s argument that the right to a jury trial for one could void the waiver of a right to a jury trial by another. It held that “a fundamental tenet of our jurisprudence is that unambiguous contracts are not open to judicial construction and must be enforced as written.” The Court of Appeals concluded that the Mink case was readily distinguishable and held that courts are “not permitted to override a contractual jury trial waiver” and that they did not find any authority reaching a result otherwise.
The Court of Appeals affirmed the trial court’s judgment as to the co-defendant CEO but reversed the decision to grant the defendants’ demands for a jury trial, vacated the trial court’s judgments as to the defendant, and remanded for a bench trial.
This article was written by Ryan Hansen, Law Clerk
