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Publication Date

7-1995

Document Type

Casenote

Abstract

In a recent decision, Bank South v. Howard, the Georgia Supreme Court held pre-litigation contractual waivers of the right to a jury trial are unenforceable in Georgia! This decision is particularly interesting in light of two factors: (1) of the jurisdictions considering this issue, Georgia is the only one to hold such waivers unenforceable; and (2) contractual arbitration agreements, which essentially waive the right to a jury trial, are enforceable in Georgia. In Bank South v. Howard, Bank South filed suit against Howard to recover over two million dollars under 1985 and 1988 guaranties. Howard raised several defenses and also counter-claimed against Bank South for fraud and violation of the Georgia RICO Act. The 1988 guaranty contained an express provision waiving the right to a jury trial in any action on the guaranty. Despite the waiver clause, Howard demanded a jury trial. The trial court denied his demand. Howard appealed, arguing that the jury trial waiver provision was void because the guaranty was fraudulently induced, and because the waiver did not specifically apply to his counter-claim against Bank South. The Georgia Court of Appeals reversed the trial court's decision, holding the provision in the guaranty waiving the right to a jury trial unenforceable against Howard. The court of appeals stated that Georgia's Civil Practice Act, which requires a jury trial except when a party by written stipulation consents to a non-jury trial, implies the waiver must be knowing and voluntary. The court of appeals held Howard could not have knowingly and voluntarily waived his right to a jury trial when he signed the guaranty, because he was not then aware of the basis and circumstances surrounding a future claim on the guaranty. Bank South appealed. The Georgia Supreme Court granted certiorari to decide whether a pre-litigation contractual waiver of the right to a jury trial is enforceable under the laws of Georgia. The supreme court held that since such waivers are not provided for by Georgia's Constitution or Code, they are unenforceable in cases tried under the laws of Georgia. In Georgia, pre-litigation contractual waivers of the right to a jury trial are unenforceable.

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