893 N.W.2d 212
Wis.2017Background
- Taft and Carol Parsons sued Associated Banc‑Corp (successor to State Financial Bank) alleging racketeering and negligent hiring/supervision related to a failed construction project; they demanded a 12‑person jury and paid the jury fee.
- Associated moved to strike the jury demand, relying on a 2004 promissory note signed by Taft containing a prominent pre‑litigation jury‑waiver clause (stating the borrower and lender "voluntarily, knowingly, irrevocably and unconditionally waive any right to have a jury").
- Taft submitted an affidavit claiming he did not see the waiver, lacked counsel, was pressured to sign immediately, and would have lost the loan if he refused.
- The circuit court enforced the waiver and ordered a bench trial; the court of appeals reversed, holding Associated had to prove the waiver was knowingly and voluntarily made and finding potential unconscionability and untimeliness of Associated’s objection.
- The Wisconsin Supreme Court granted review and considered (1) whether a contractual pre‑litigation jury waiver is an enforceable waiver under Art. I, § 5, and (2) whether Associated’s motion to strike was untimely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a pre‑litigation contractual jury waiver is enforceable under Art. I, § 5 | Jury waivers must be proven knowing and voluntary; Wisconsin law lacks statutory authorization for contractual waivers and the clause may be unconscionable | Contractual waiver is permitted; Article I, § 5 "manner prescribed by law" includes common law and contract principles; freedom of contract favors enforcement | Enforceable: Article I, § 5 does not limit waiver to statutory modes; courts may enforce contractual waivers under ordinary contract law |
| Whether plaintiff’s affidavit (pressure, no counsel, no time to read) defeats enforcement | Taft’s affidavit shows lack of knowing, voluntary consent and possible fraud/unconscionability | Contract terms are clear and unambiguous; signatories are presumed to know contents; challenger bears burden to invalidate clause | Court defers to circuit court credibility findings; Associated need not produce extra proof of knowing/voluntary waiver absent sufficient evidence invalidating the contract |
| Whether Associated’s delay in seeking to strike the jury demand forfeits or waives the right | Associated waited years, participated in litigation without objection; therefore forfeited or is equitably estopped from striking the jury demand | No statutory deadline governs such an objection; circuit court did not abuse discretion in permitting enforcement of the contractual waiver | Associated’s motion was not untimely; no forfeiture, statutory waiver, or equitable estoppel given lack of reasonable reliance by Parsons |
| Whether unconscionability should be resolved on this record | Clause may be procedurally and substantively unconscionable given circumstances | Unconscionability requires proof; appellate court should not decide unconscionability on sparse record or contrary to trial court factual findings | Court reverses court of appeals on unconscionability; leaves open whether circuit court can address unconscionability on remand with fuller record |
Key Cases Cited
- Rao v. WMA Sec., Inc., 310 Wis. 2d 623 (2008) (discusses manners of jury‑trial waiver and that waiver can occur by operation of rules/statute or practice)
- Theuerkauf v. Schnellbaecher, 64 Wis. 2d 79 (1974) (holds statutory list of waiver methods is not exclusive; historical cases enforced waivers absent statute)
- Brunton v. Nuvell Credit Corp., 325 Wis. 2d 135 (2010) (recognizes that waiver of fundamental constitutional rights requires knowing, intelligent, voluntary waiver)
- Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d 212 (3d Cir. 2007) (federal precedent on timeliness/laches in enforcing contractual jury waivers)
- K.M.C. Co. v. Irving Trust Co., 757 F.2d 752 (6th Cir. 1985) (federal discussion that enforcing contractual waiver of jury requires inquiry into knowing and voluntary consent)
- Aetna Ins. Co. v. Kennedy to Use of Bogash, 301 U.S. 389 (1937) (Supreme Court principle that courts indulge every reasonable presumption against waiver of jury trial)