Grafton Partners L.P. v. Superior Court

116 P.3d 479, 32 Cal. Rptr. 3d 5, 36 Cal. 4th 944, 2005 Daily Journal DAR 9387, 2005 Cal. Daily Op. Serv. 6887, 2005 Cal. LEXIS 8586
CourtCalifornia Supreme Court
DecidedAugust 4, 2005
DocketS123344
StatusPublished
Cited by93 cases

This text of 116 P.3d 479 (Grafton Partners L.P. v. Superior Court) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Grafton Partners L.P. v. Superior Court, 116 P.3d 479, 32 Cal. Rptr. 3d 5, 36 Cal. 4th 944, 2005 Daily Journal DAR 9387, 2005 Cal. Daily Op. Serv. 6887, 2005 Cal. LEXIS 8586 (Cal. 2005).

Opinions

Opinion

GEORGE, C. J.

The present case concerns what is principally a question of statutory interpretation. At issue is Code of Civil Procedure section 631,1 a provision prescribing the six means by which parties to a civil lawsuit may waive their right to have their disputes adjudicated in a jury trial rather than in a court trial. Petitioners contend a contractual agreement that is entered into prior to any dispute arising between the contracting parties is not one of the means authorized by statute. In consequence, they claim, their predispute agreement that any lawsuit between them and real party would be adjudicated in a court trial, and not by jury trial, was unenforceable. The Court of Appeal agreed with petitioners’ contention, as do we, for the reasons that follow.

I

In March 1999, petitioners engaged real party in interest PriceWaterhouseCoopers L.L.P. (hereafter real party), an accounting firm, to audit certain accounts belonging to two of petitioners’ partnerships, Grafton Partners L.P., and Allied. On March 11, 1999, real party sent petitioners an engagement letter confirming the terms of the retainer agreement. Under the heading “[rjelease and indemnification,” the letter released real party from liability in the event of misrepresentation by the partnerships’ management and specified that real party would not be liable to the partnerships except for willful misconduct or fraud. A waiver followed, expressed in these terms: “In the unlikely event that differences concerning [real party’s] services or fees should arise that are not resolved by mutual agreement, to facilitate judicial resolution and save time and expense of both parties, [petitioners and real party] agree not to demand a trial by jury in any action, proceeding or counterclaim arising out of or relating to [real party’s] services and fees for this engagement.”

On June 27, 2002, petitioners filed a complaint against real party, alleging negligence, misrepresentation, and other causes of action based upon real party’s asserted failure to disclose and its cover-up of fraudulent business [951]*951practices that it discovered during its audit. A third amended complaint was filed on March 19, 2003, and petitioners demanded a jury trial. The trial court, relying upon the waiver contained in the engagement letter, granted real party’s motion to strike the jury demand.

Petitioners filed a petition for writ of mandate or prohibition in the Court of Appeal, and that court granted relief in petitioners’ favor. It concluded that a predispute waiver of a jury trial is not authorized by section 631, and that only those waivers authorized by statute are consistent with article I, section 16 of the California Constitution. We granted real party’s petition for review.

II

When parties elect a judicial forum in which to resolve their civil disputes, article I, section 16 of the California Constitution accords them the right to trial by jury (with limited exceptions not relevant in the present case).2 Our Constitution treats the historical right to a jury resolution of disputes that have been brought to a judicial forum as fundamental, providing that in “a civil cause,” any waiver of the inviolate right to a jury determination must occur by the consent of the parties to the cause as provided by statute. (Cal. Const., art. I, § 16.)3

The statute implementing this constitutional provision is section 631. It holds inviolate the right to trial by jury, and prescribes that a jury may be waived in civil cases only as provided in subdivision (d) of its provisions. (§ 631, subd. (a).) Subdivision (d) describes six means by which the right to jury trial may be forfeited or waived, including failure to appear at trial, failure to demand jury trial within a specified period after the case is set for trial, failure to pay required fees in advance or during trial, oral consent in open court, or written consent filed with the clerk or the court.

A

We begin with a discussion of the relevant state constitutional provision, because the one other Court of Appeal decision to have considered whether predispute jury trial waivers are enforceable concluded that, although section [952]*952631 does not authorize such waivers, they are permissible without statutory authorization. (Trizec Properties, Inc. v. Superior Court (1991) 229 Cal.App.3d 1616 [280 Cal.Rptr. 885] {Trizec).) The appellate court reasoned that nothing in the applicable constitutional provision prohibits such waivers, which it found comparable to the arbitration clauses found in many contracts. (Id. at p. 1618.)

The difficulty with the analysis in Trizec is that it is inconsistent with an established line of cases beginning with an early decision of this court. In Exline v. Smith (1855) 5 Cal. 112 {Exline) and subsequent cases, we interpreted substantially similar constitutional language and held that the rules under which the parties to a lawsuit may waive a jury trial must be prescribed by the Legislature, which is without power to delegate to the courts the responsibility of determining the circumstances under which such a waiver may be permitted. (Id. at pp. 112-113; People v. Metropolitan Surety Co. (1912) 164 Cal. 174, 177 [128 P. 324]; Biggs v. Lloyd (1886) 70 Cal. 447, 448-449 [11 P. 831]; see also Parker v. James Granger, Inc. (1935) 4 Cal.2d 668, 679 [52 P.2d 226] [section 631 identifies the exclusive means by which the right to jury trial may be waived]; Cohill v. Nationwide Auto Service (1993) 16 Cal.App.4th 696, 700 [19 Cal.Rptr.2d 924] [same]; Selby Constructors v. McCarthy (1979) 91 Cal.App.3d 517, 524 [154 Cal.Rptr. 164] [“Section 631 has been repeatedly interpreted as setting forth strict requirements”]; De Castro v. Rowe (1963) 223 Cal.App.2d 547, 552 [36 Cal.Rptr. 53] [“It has been repeatedly held that trial by jury may be waived only in the manner designated by . . . section 631”]; 7 Witkin, Cal. Procedure (4th ed. 1997) Trial, § 113, p. 131.) Applying our decisions, and examining the history of the constitutional provision, the Court of Appeal in the present case similarly concluded that a waiver of the right to jury trial is permissible only to the extent expressly authorized by statute. In so holding, the Court of Appeal rejected the reasoning of the decision in Trizec that, although section 631 does not authorize predispute waivers of jury trial, such waivers, like those in arbitration agreements, are permissible on nonstatutory grounds. (Trizec, supra, 229 Cal.App.3d at p. 1618.) The Court of Appeal in the present case explained that nonstatutory authority for waiver of the right to jury trial is not permitted by our Constitution.

We can find no more succinct and accurate analysis of the relevant constitutional provision than that employed by Justice Simons writing for the Court of Appeal in its decision below: “The California Constitution, as originally adopted in 1849, set out the right to a jury trial in the strongest possible terms: ‘ “[T]he right of trial by jury shall be secured to all, and [953]*953remain inviolate for ever; but a jury trial may be waived by the parties in all civil cases in the manner to be prescribed by law.” ’ ([Exline, supra,] 5 Cal. 112, 112, quoting Cal.

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116 P.3d 479, 32 Cal. Rptr. 3d 5, 36 Cal. 4th 944, 2005 Daily Journal DAR 9387, 2005 Cal. Daily Op. Serv. 6887, 2005 Cal. LEXIS 8586, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grafton-partners-lp-v-superior-court-cal-2005.