Tilley v. Malvern National Bank
2017 Ark. App. 127
| Ark. Ct. App. | 2017Background
- Tilley borrowed $221,000 from Malvern National Bank (MNB) in 2010; the promissory note was secured by real property and contained a contractual jury-waiver clause.
- Tilley defaulted; MNB filed foreclosure in November 2011. Tilley answered, reserved counterclaims, and demanded a jury trial.
- Tilley later filed counterclaims and a third-party complaint against MNB and former MNB VP Stephen Moore, alleging MNB/Moore promised a $350,000 loan (never made) and that MNB’s actions led to his default; he sought money damages for breach of contract, promissory estoppel, ADTPA violations, tortious interference, negligence, and fraud.
- MNB and Moore moved to strike Tilley’s jury demand, citing (1) foreclosure and related matters are equitable and (2) the loan agreement’s jury-waiver clause; the trial court granted the motion and the case proceeded to a bench trial.
- After a bench trial, the court entered judgment for MNB and Moore on all claims and decreed foreclosure; Tilley appealed, challenging (1) striking of his jury demand and (2) exclusion of evidence of future lost profits (the latter was conceded moot if the jury-waiver ruling was affirmed).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Tilley had a constitutional right to a jury trial on his counterclaims | Tilley: his causes of action are historically legal and he has a jury right under the Arkansas Constitution | MNB/Moore: foreclosure and all claims essential to it should be tried by the court; no jury right | Court: Tilley’s claims are legal in nature and would normally implicate a jury right, but other considerations apply (see waiver) |
| Enforceability of pre-dispute jury-waiver clause in the loan agreement | Tilley: waiver unenforceable as a matter of law | MNB/Moore: contractual waiver is permitted; clause bars jury trial | Court: Predispute contractual jury waivers may be enforceable under Arkansas law; the waiver here was enforceable |
| Whether Tilley knowingly and voluntarily waived jury trial | Tilley: waiver not knowing/voluntary (duress) | MNB/Moore: signed agreement binds him; voluntariness presumed absent proof | Court: Signature presumed knowledge and voluntariness; conclusory affidavit of duress insufficient; waiver upheld |
| Trial court’s exclusion of evidence of future lost profits | Tilley: court abused discretion by applying new-business rule to exclude future-profit evidence | MNB/Moore: exclusion appropriate; issue moot if jury demand properly struck | Court: Did not reach merits because jury-waiver ruling was affirmed and Tilley conceded this issue moot unless jury ruling reversed |
Key Cases Cited
- First Nat’l Bank of DeWitt v. Cruthis, 360 Ark. 528 (parties’ jury rights and equity-law distinction post-Amendment 80)
- Riggin v. Dierdorff, 302 Ark. 517 (foreclosure proceedings traditionally not jury trials)
- Stokes v. Stokes, 2016 Ark. 182 (post-Amendment 80 jurisdictional effect; clean-up doctrine discussion)
- Alltel Corp. v. Sumner, 360 Ark. 573 (contract-construction approach to novel pre-dispute waiver issues like arbitration and similar provisions)
- Liberty Life Ins. Co. v. McQueen, 364 Ark. 367 (interlocutory appeal of denial of jury demand not permitted)