in Re: Five Star Global, LLC ( 2022 )

Conditionally Grant and Opinion Filed August 15, 2022
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-22-00153-CV
IN RE FIVE STAR GLOBAL, LLC, Relator
Original Proceeding from the 68th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-20-08643
MEMORANDUM OPINION
Before Justices Molberg, Pedersen, III, and Garcia
Opinion by Justice Pedersen, III
In this mandamus action, relator Five Star Global, LLC asks us to compel the
trial court: (a) to vacate its February 18, 2022 order, which denied relator’s
Expedited Motion to Reconsider Ruling on Jury Waiver and thereby left in place the
trial court’s oral ruling granting real parties in interest’s Motion to Strike Jury
Demand; (b) to remove this case from the non-jury docket; and (c) to reset this case
for jury trial. We conclude that real parties in interest waived their right to enforce
the parties’ contractual jury waivers. Accordingly, the trial court abused its
discretion by granting the Motion to Strike Jury Demand. We conclude further that
relator has no adequate appellate remedy for the erroneous deprivation of its right to
a jury trial. Accordingly, we conditionally grant the petition for writ of mandamus.
Background
In May 2018, real parties in interest Mark Hulme and Five Points Holding,
LLC (FPH), plaintiffs in the underlying suit, sold various business assets to relator
Five Star Global, LLC (FSG). The parties signed three contracts with respect to the
transaction: (1) an employment agreement between FSG and Hulme, (2) an asset
purchase and contribution agreement (the APA) among FSG and both real parties,
and (3) a master services agreement (the MSA) between FSG and FPH’s
predecessor, Five Star Media, LLC. Each contract contained a jury waiver provision.
In November 2019, Hulme sued FSG in the 68th Judicial District of Dallas
County for breach of the employment agreement. The original petition contained a
“Jury Demand” section, and in the prayer, the petition further requested that “[t]he
Court empanel a jury to determine any issue of fact.” Hulme contemporaneously
filed a separate “Enter Demand for Jury,” acknowledging payment of the jury fee.
Less than a month later, Hulme’s business FPH joined in the suit. Together, real
parties filed a first and then a second amended petition containing a “Jury Demand”
section and reiterating the jury request in the prayer section.
FSG filed counterclaims for breach of all three contracts. FSG similarly
demanded a jury trial and paid the required fee. All parties agreed to a proposed
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scheduling order in which the case would be “set for jury trial” and joined in a
motion asking the trial court to enter the proposed scheduling order.
Real parties then filed a third amended petition. This time, the petition omitted
the “Jury Demand” section. However, real parties did not object to FSG’s jury
demand, and they again reiterated the request in the prayer section that the trial court
empanel a jury to determine any issue of fact.
The case was briefly removed to federal court in May of 2020, but after a
dismissal without prejudice on a procedural ground, real parties refiled their claims
in state court, and the case was returned to the 68th Judicial District. The refiled case
was assigned a different cause number, but in their new petition, real parties
explained that “they ha[d] continued the sequential numbering of their pleadings,
and, therefore, they have captioned this pleading as their ‘fourth amended
[petition].’”1 Real parties’ refiled pleading again prayed that “[t]he Court empanel a
jury to determine any issue of fact and, upon final hearing of this cause, the Court
find for Plaintiffs.” FSG then refiled its counterclaims with a jury demand.
On September 21, 2020, the trial judge held a hearing to determine whether a
case filed in a different court should be transferred to the 68th district court; real
parties were not involved in the motion. In fact, when the judge remarked on the
presence of counsel for real parties at the hearing, counsel stated, “I’m here
1
Likewise, real parties titled their subsequent pleadings the Fifth Amended Petition, Sixth Amended
Petition, and Seventh Amended Petition.
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observing for the other case. I don’t have a dog in the fight between Mr. Riemer’s
client and Mr. Bexley’s client[s].” Nevertheless, when the issue of a jury trial arose
in the movant’s case, real parties’ counsel spoke to that matter:
I haven’t looked into all the specifics of that jury waiver, but it is my
belief that there is a jury waiver, and the documents between my client
and Mr. Bexley’s client, Mr. Bexley can certainly correct me if I’m
wrong, but that was my understanding is that there is a jury waiver. If
I’m wrong, Mr. Bexley can correct me, but I don’t think we could have
waived the jury. . . . Because I do strongly recall that there being a jury
waiver that is going to apply, I assume to all claims. But again, I haven’t
drilled that down.
One month later, on October 21, 2020, real parties filed their fifth amended pleading.
That petition added back real parties’ “Jury Demand” and again prayed for the court
to empanel a jury. Real parties did not object to FSG’s jury demand.
Two days later, the trial court sent a notice that the case was set on the non-
jury docket for June 15, 2021. FSG quickly sent the court a responsive letter,
advising that its counterclaims included a request for jury trial and that it was paying
the jury fee at that time.
On November 19, 2020, FSG filed “Defendants’ Motion for Jury Trial Setting
and Entry of Scheduling Order.” The motion sought a later trial date—in November
2021, rather than June—and proposed a scheduling order. But before addressing
those topics, FSG asserted:
Recently, the Court set both lawsuits for non-jury trial on June 15, 2020.
In the Hulme Lawsuit, Plaintiffs and Defendants have demanded a jury,
and Defendants have tendered the requisite jury trial fee. Therefore, the
Hulme Lawsuit must be transferred to the jury trial docket.
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At the December 21, 2020 hearing, real parties’ counsel agreed to the scheduling
order as to form “to move things along,” but she noted that real parties were not in
agreement on whether the FSG matter should be tried to a jury and that she believed
“there [would] be additional motions on the issue.” The trial court entered a
scheduling order setting this case for a jury trial.
On February 24, 2021—fifteen months after real parties filed the original
case—they filed a sixth amended petition and answer. The petition did not include a
“Jury Demand” section and, for the first time, real parties did not request a jury trial
in the pleading’s prayer section. At the same time, real parties filed a motion to strike
the jury demand in FSG’s latest counterclaims on the ground that the employment
agreement, APA, and MSA contained contractual jury waiver provisions. FSG
objected, arguing that real parties had long ago waived any right to enforce those
contractual provisions by repeatedly requesting a jury trial themselves and by failing
to assert any objection in response to FSG’s jury demands. FSG pointed out that real
parties chose to wait to assert their contractual right to a non-jury trial until (a) fifteen
months after their own initial jury demand in the original action, (b) more than eight
months after their own jury demand in the refiled action, and (c) more than five
months after FSG filed its jury demand in the refiled action.
Real parties maintained that they had not waived the contractual jury waivers
because they had preserved their objections during previous hearings. They pointed
to the statements made by real parties’ counsel when she was observing the
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September motion-to-transfer hearing and when she was “moving things along” in
the December hearing on a scheduling order.
The trial court did not finally hear and decide the motion to strike until
September 10, 2021. The parties agreed that the motion turned on whether real
parties’ conduct, specifically their history of demanding a jury trial in their
pleadings, had waived their right to rely on contractual jury waivers. The trial court
asked the parties directly:
Are there any cases on either side that talk about if you have a situation
where the movant in a motion to I guess, or however you want to put it,
the person seeking to enforce the jury trial waiver has asserted a
demand for a jury, that that somehow waves [sic] the right to enforce
the -- are there any cases either way that discuss that issue?
Counsel for both parties stated that they were unaware of such a case. In the absence
of such authority, the trial court orally granted the motion to strike, apparently
persuaded by real parties’ reliance upon In re C-Span Entertainment, Inc., 162
S.W.3d 422 (Tex. App.—Dallas 2005, orig. proceeding). In In re C-Span, this Court
found that the trial court did not abuse its discretion by rejecting relator’s argument
that real party waived its right to enforce contractual jury waivers based on real
party’s agreement to seven scheduling orders that included a date for a jury trial
setting. Id. at 425–26.
On February 8, 2022, FSG filed a motion for reconsideration, relying upon
this Court’s recent decision in In re PlainsCapital Bank, No. 05-20-00765-CV, 2021
WL 1921020, *3–4 (Tex. App.—Dallas May 13, 2021, orig. proceeding) (mem. op.),
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in which we concluded that the trial court abused its discretion by removing a case
from the jury docket after real party repeatedly demanded a jury in a series of
pleadings and paid a jury fee. Nevertheless, the trial court denied the motion for
reconsideration on February 18, 2022.
The Petition for Writ of Mandamus
One week later, on February 25, 2022, FSG filed this petition for writ of
mandamus. In the petition, FSG argues that the trial court clearly abused its
discretion by erroneously holding that real parties had not waived their right to a
non-jury trial, even though real parties spent fifteen months making six jury demands
and failed to oppose FSG’s two demands. FSG further argues that, as soon as real
parties demanded a jury trial themselves, Texas Rule of Civil Procedure 220
prohibited withdrawal of the case from the jury docket over FSG’s objections.
In response, real parties first argue that the petition should be denied on the
ground of laches because FSG waited nearly five months from the trial court’s
September 2021 oral ruling to file its reconsideration motion in the trial court, and
then it waited until close to the trial date to file its mandamus petition. Real parties
also contend that FSG’s petition fails on the merits because the predecessor case
should not be conflated with the refiled case. Real parties assert that in the refiled
case, they never paid the jury fee, and they made it clear less than three months into
the refiled case that they intended to invoke the contractual jury waivers. Real parties
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insist that the boilerplate jury requests included in the early versions of their petition
were merely form language that their counsel mistakenly forgot to delete.
In reply, FSG contends that laches does not apply here because the trial court’s
September 2021 oral pronouncement was too vague to be enforceable and was
conditioned on a future motion to resolve whether co-defendant Southfield
Mezzanine Capital L.P. was entitled to a jury trial.2 FSG contends that real parties
cannot demonstrate prejudice because the trial has been reset to August 2022. FSG
also maintains that real parties cannot distance themselves from the predecessor case
simply because it bore a different case number, especially when real parties
themselves demonstrated and represented repeatedly that the two proceedings are
the same lawsuit. FSG asserts that real parties’ descriptions of their conduct are
unsupported and contradicted by the record, and that in any event, their waiver
occurred long before the refiled case.
Discussion
Mandamus is an extraordinary remedy requiring the relator to show that the
trial court abused its discretion and that the relator lacks an adequate remedy on
appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004) (orig.
proceeding). We have stated that mandamus review is an appropriate method to
2
Southfield was not a party to the contractual jury waivers. The trial court has recently clarified this
aspect of its rulings: real parties’ claims against FSG are scheduled to be tried to the court beginning on
August 23 of this year; their claims against Southfield will be tried simultaneously, but to a jury.
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determine questions of entitlement to or waiver of jury trial. In re PlainsCapital
Bank, 2021 WL 1921020, at *3. And we have concluded that “when a trial court
abuses its discretion by improperly granting a motion to strike a jury demand, relator
lacks an adequate remedy by appeal, and mandamus relief is available.” Id.Laches
At the threshold, we address real parties’ argument that our review of relator’s
petition should be foreclosed by the doctrine of laches. It is true that unreasonably
delaying the filing of a petition for mandamus relief may waive the right to
mandamus. See In re Int’l Profit Assocs., Inc., 274 S.W.3d 672, 676 (Tex. 2009)
(orig. proceeding) (per curiam). In this case, however, no such unreasonable delay
occurred. Indeed, after the trial court denied the motion for reconsideration, relator
promptly filed this petition for writ of mandamus just one week later. Contrary to
real parties’ argument, the issue of delay is measured between the denial of the
reconsideration motion and the filing of the mandamus petition. See In re Laibe
Corp., 307 S.W.3d 314, 318 (Tex. 2010) (orig. proceeding) (per curiam) (measuring
time between denial of reconsideration motion and mandamus filing and concluding
two months is not unreasonable delay).
Real parties also complain about the five-month delay between the trial
court’s September 2021 oral pronouncement and the filing of the motion for
reconsideration. However, for purposes of this original proceeding, “unreasonable
delay is calculated with reference to the mandamus petition’s filing.” See In re
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Episcopal Sch. of Dallas, Inc., 556 S.W.3d 347, 360 (Tex. App.—Dallas 2017, orig.
proceeding). Moreover, because the trial court’s September 2021 oral ruling granted
the motion to strike without prejudice to its contingent ruling upon Southfield’s
future motion for a jury trial, relator reasonably waited for the trial court to resolve
the issues with Southfield before seeking mandamus relief. Accordingly, we reject
real parties’ laches argument.
Jury Waiver
Any contractual right can be waived. In re PlainsCapital Bank, 2021 WL
1921020, at *3 (citing Perry Homes v. Cull, 258 S.W.3d 580, 593 (Tex. 2008)).
Litigation conduct establishes such a waiver if “the party’s conduct—action or
inaction—clearly demonstrates the party’s intent to relinquish, abandon, or waive
the right at issue.” LaLonde v. Gosnell, 593 S.W.3d 212, 219–20 (Tex. 2019).
Enforcement of a contractual right to a non-jury trial may be waived by a party’s
conduct. See In re Gen. Elec. Capital Corp., 203 S.W.3d 314, 316 (Tex. 2006) (orig.
proceeding) (per curiam). Waiver is largely a matter of intent, and for implied waiver
to be found through a party’s actions, intent must be clearly demonstrated by the
surrounding facts and circumstances. Id. Waiver is ordinarily a question of fact, but
when the surrounding facts and circumstances are undisputed, the question becomes
one of law. Id.As the Texas Supreme Court has explained, this state’s strong policy of
freedom of contract provides not only that “individuals can control their destiny and
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structure their business interactions through agreements with other competent
adults,” but also that “‘any competent adult can abandon a legal right and if he does
so then he has lost it forever.’” Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471,
482 (Tex. 2017) (citing In re Prudential Ins. Co., 148 S.W.3d at 129, and quoting
13 WILLISTON ON CONTRACTS § 39:14 (4th ed. 2013)). Even “a party’s rights under
a nonwaiver provision may indeed be waived expressly or impliedly.” Id. at 482–
83. Thus, the Texas Supreme Court has determined that when a party is on notice
that a case has been set on the jury docket, failure to pursue enforcement diligently
waives a party’s right to enforce its contractual jury waiver. See Rivercenter Assocs.
v. Rivera, 858 S.W.2d 366, 367–68 (Tex. 1993) (orig. proceeding) (holding that
Rivercenter was not entitled to mandamus relief to enforce its contractual right
because record did not show a justification for four-month delay in pursuing its right
to a non-jury trial).
Relator first relies upon Rule 220 of the Texas Rules of Civil Procedure, which
states that “[w]hen any party has paid the fee for a jury trial, he shall not be permitted
to withdraw the cause from the jury docket over the objection of the parties adversely
interested.” TEX. R. CIV. P. 220. We question the applicability of Rule 220 in this
case, because the removal to federal court technically divided this case in two, with
the proceedings bearing different cause numbers. Arguably, the parties were
required to pay court fees—including the jury fee—anew when the case was refiled.
We are aware of no rule to the contrary.
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Regardless, though, real parties’ payment of the jury fee in the predecessor
suit, as well as other conduct from that suit, are circumstances that we may consider
when assessing whether real parties relinquished their right to enforce the
contractual jury waivers. In this regard, real parties expressly decided to follow the
sequential numbering of the pleadings from the predecessor suit in captioning the
pleadings in the refiled suit. Thus, real parties themselves connected the refiled suit
to the first suit. Moreover, once a party has abandoned a legal contractual right, it
has lost the right forever. See In re PlainsCapital Bank, 2021 WL 1921020, at *4.
Accordingly, we conclude that real parties’ conduct in the original suit is relevant
here. In addition to paying the jury fee, real parties also explicitly demanded a jury
in six pleadings filed between November 15, 2019 and October 21, 2020. Although
real parties deleted the “Jury Demand” paragraph in two of the pleadings, those
pleadings still requested a jury in the prayer section, and the “Jury Demand”
paragraph even re-appeared in their October 21, 2020 pleading. Moreover, real
parties never objected to FSG’s jury demand until they filed their motion to strike in
February 2021, which was fifteen months after they initiated the lawsuit against
FSG. See LaLonde, 593 S.W.3d at 219–20 (noting that inaction is also relevant for
waiver purposes).
Because the fundamental issue in this case is whether real parties’ conduct
demonstrates a relinquishment of their right to enforce contractual jury waivers, we
look to our recent decision in In re PlainsCapital Bank. In that case, the parties had
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signed agreements containing jury waiver provisions. 2021 WL 1921020, at *1–2.
Although relator’s original petition did not include a jury demand, real parties
demanded a jury repeatedly, beginning with their July 2016 filing and then in a series
of amended pleadings after that. Id. at *2. They also paid the jury fee. Id. No party
objected to the pleadings or correspondence demanding a jury or paying the fee. Id.
On August 2, 2019, however, real parties filed a motion seeking to have the case
removed from the jury docket and reset as a non-jury trial. Id. The trial court granted
the motion. Id. This Court granted mandamus relief after determining that real
parties had expressly renounced their contractual right to a non-jury trial when they
repeatedly demanded a jury and paid the jury fee. Id. at *3. We concluded that real
parties waived their right to enforce their contractual jury waivers by mandamus. Id.
Similarly, real parties in this case repeatedly asked for a jury in a series of pleadings.
They also paid a jury fee when the suit was originally filed in November 2019, and
they never objected to FSG’s jury demands in the first suit or the second suit.
Real parties continue to argue that they preserved their objections to the jury
setting, pointing to statements made by their counsel at the September 2020 hearing.
But at that hearing, real parties’ counsel acknowledged no more than “I haven’t
looked into all the specifics of that jury waiver” and “I haven’t drilled it down.” Such
statements are equivocal at best and do not qualify as a diligent preservation of real
parties’ right to enforce the jury waivers. See Rivercenter Assocs., 858 S.W.2d at
367 (requiring “diligent pursuit of any right to a non-jury trial” to enforce the right
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by mandamus). Further, shortly after that September hearing, real parties filed their
fifth amended pleading, which did not object to FSG’s jury demand, affirmatively
added the “Jury Demand” paragraph back in after it had been deleted in previous
pleadings, and again asked the court to empanel a jury to determine any issue of fact.
Given the character of this October pleading, we reject the argument that counsel’s
September statements could act as a preservation of real parties’ right to enforce the
jury waivers.
But in any event, we conclude that real parties’ efforts to tie preservation to
the September 2020 hearing were already too late. By then, ten months had passed
since real parties made their initial jury demand in their original pleading in the first
suit and paid the jury fee. Real parties had also filed four pleadings requesting a jury
during that timeframe without objecting to relator’s request for a jury. We conclude
that by September 10, real parties had waived their right to enforce the contractual
jury waivers. See id. at 367–68 (holding four-month delay in pursuing right to non-
jury trial waived right). The right to rely on the contractual waivers could not be
resuscitated by equivocal statements of counsel, especially in the face of continued
pleadings-based demands for a jury trial.
Conclusion
We conclude that the trial court abused its discretion by striking relator’s jury
demand and refusing to reconsider that ruling. We conclude further that relator lacks
an adequate remedy by appeal if forced to try this case without a jury. We
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conditionally grant relator’s petition, and we direct the trial judge: to vacate his
order of February 18, 2022; to deny real parties’ Motion to Strike Jury Demand; to
remove this case from the non-jury docket; and to reset this case for jury trial. We
are confident the judge will promptly comply. Our writ will issue only if he does
not.
/Bill Pedersen, III//
220153f.p05 BILL PEDERSEN, III
JUSTICE
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