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Ex parte Acosta

Supreme Court of Alabama

June 5, 2015

Ex parte Sergio Acosta
v.
Trinity Bank In re: Sergio Acosta

Geneva Circuit Court, CV-13-900060

PETITION FOR WRIT OF MANDAMUS

BOLIN, Justice.

Sergio Acosta petitions this Court for a writ of mandamus directing the Geneva Circuit Court to vacate its October 22, 2014, order granting a motion filed by Trinity Bank (hereinafter "the bank") to strike Acosta's jury demand with respect to all counts in Acosta's counterclaim and third-party complaint in the bank's action against him. We grant the petition and issue the writ.

I. Facts and Procedural History

On April 19, 2013, the bank filed a complaint, seeking a judgment against Acosta for financial losses it incurred after Acosta defaulted on certain "Multipurpose Note and Security Agreement[s]" ("the notes") he had executed with the bank. The bank alleged that Acosta had executed two secured notes and one unsecured note, which, it said, Acosta had failed and/or refused to pay; that the bank had foreclosed on the properties pledged as collateral on the secured notes; and that proper credit had been applied to the notes. The bank sought a judgment for the balance due on the notes, plus interest, fees, costs, and attorney fees.

On January 30, 2014, Acosta filed a counterclaim against the bank, as well as a third-party complaint against two of its officers, alleging that on April 4, 2006, he had entered into a business relationship with R&B Properties under the name of SilverPalm Properties, LLC; that SilverPalm was formed to construct and to manage rental properties; that loans from the bank were the principal source of funding for SilverPalm; that the financing plan was for SilverPalm to procure from the bank the funds to construct the properties, for SilverPalm to pay the interest on the notes until the properties were rented, and for SilverPalm to pay off the notes once the properties generated sufficient rental income to do so; that, on November 2, 2009, Acosta and R&B Properties dissolved SilverPalm because of a downturn in the economy; that the bank thereafter induced Acosta to become personally liable for the notes previously secured only by SilverPalm by representing to Acosta that he would be responsible only for the interest accruing on the notes until such time as the principal could be paid from rental income generated by the properties; that Acosta at all times continued to pay the interest on the notes; that the bank at some point advised Acosta that additional security was required to continue financing the notes; that Acosta declined to pledge additional security; and that the bank then called the notes due and foreclosed on the properties securing the notes. Acosta requested an accounting for the amounts claimed by the bank on the notes and the mortgages securing the notes, and he sought damages based on allegations of wantonness, breach of good faith and fair dealing, negligence, fraud, breach of fiduciary duty, unjust enrichment, and promissory estoppel. The counterclaim and third-party complaint included a demand for a jury trial.

On May 2, 2014, the bank filed a motion to strike Acosta's jury demand, relying on a jury-waiver provision in four Assignments of Rents and Leases that Acosta had executed in consideration of the notes ("the assignments"), assigning to the bank all of Acosta's interest in the leases for the rental properties. On May 30, 2014, the trial court entered an order denying the bank's motion to strike, and the bank thereafter filed a motion to reconsider. Following a hearing, the trial court withdrew its May 30, 2014, order and entered a subsequent order, dated October 22, 2014, granting the bank's motion to strike the jury demand as to all counts in Acosta's counterclaim and third-party complaint. Acosta petitioned this Court for a writ of mandamus.

II. Standard of Review

"A petition for a writ of mandamus is the appropriate vehicle for seeking review by this Court of a denial of a demand for a jury trial. 'Mandamus is an extraordinary remedy, however, requiring a showing that there is: "(1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court."' Ex parte Jackson, 737 So.2d 452, 453 (Ala. 1999) (quoting Ex parte Alfab, Inc., 586 So.2d 889, 891 (Ala. 1991)). Because mandamus is an extraordinary remedy, the standard of review on a petition for a writ of mandamus is whether there is a clear showing of error on the part of the trial court. Ex parte Finance America Corp., 507 So.2d 458, 460 (Ala. 1987)."

Ex parte Atlantis Dev. Co., 897 So.2d 1022, 1024 (Ala. 2004).

III. Analysis

In Ex parte BancorpSouth Bank, 109 So.3d 163, 166 (Ala. 2012), this Court stated the following regarding jury trials:

"The right to a jury trial is a significant right in our jurisprudence. 'Public policy, the Alabama Rules of Civil Procedure, and the Alabama Constitution all express a preference for trial by jury.' Ex parte AIG Baker Orange Beach Wharf, L.L.C., 49 So.3d 1198, 1200–01 (Ala. 2010) (citing Ex parte Cupps, 782 So.2d [772] at 775 [(Ala. 2000)]). Nevertheless, the right to a jury trial is not absolute in that 'no constitutional or statutory provision prohibits a person from waiving his or her right to trial by jury.' Mall, Inc. v. Robbins, 412 So.2d 1197, 1199 (Ala. 1982)."

Because jury trials are strongly favored in the law, there is a presumption against denying a jury trial based on a contractual waiver, and a waiver of a right to a jury trial must be strictly construed, giving deference to the constitutional guarantee of the right to a trial by jury. See Mall, Inc. v. Robbins, 412 So.2d 1197, 1200 (Ala. 1982) (noting that the "same public policy that applies the rule of strict construction will likewise limit the scope of operation of a jury waiver agreement to those controversies directly related to and arising out of the terms and provisions of the overall agreement containing the jury waiver provisions"). The substantive question presented by Acosta in his petition for a writ of mandamus is whether the jury-waiver provision in each of the four ...


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