Mikey's Houses LLC v. Bank of America, N.A.

232 S.W.3d 145, 2007 Tex. App. LEXIS 3471, 2007 WL 1299332

• Court: Court of Appeals of Texas
• Decided: May 3, 2007
• Docket: 2-05-397-CV
• Status: Published

Opinions

OPINION

SUE WALKER, Justice.

I. INTRODUCTION

This is an interlocutory appeal from the trial court’s order granting Appellee Bank of America, N.A.’s motion to enforce a contractual jury waiver. See Tex. Civ. PRAC. & Rem.Code Ann. § 51.014(d) (Vernon Supp.2006). In one issue, Appellants Mi-key’s Houses, LLC, Helen L. Martin, and Joyce A. Powell contend that the trial court erred by granting Bank of America’s motion to enforce the prelitigation contractual jury waiver. Because we hold that Bank of America did not meet its burden of producing prima facie evidence that Martin and Powell knowingly and voluntarily made the prelitigation contractual waiver of their constitutional right to trial by a jury, we reverse the trial court’s order enforcing the waiver.

II. Background Facts

Mikey’s Houses LLC is a Texas limited liability corporation owned by Martin and Powell. Martin and Powell formed Mi-key’s Houses to buy foreclosed homes and renovate them for resale.¹ On March 18, 2003, Mikey’s Houses entered into a contract with Bank of America to purchase a house and lot at 3325 Meadowbrook in Fort Worth for $54,000.00. Martin signed the contract as President, and Powell signed it as Vice President. Either Bank of America or Bank of America’s broker drafted the contract. After Martin and Powell, on behalf of Mikey’s Houses, and Bank of America had signed the sales contract, Martin and Powell were presented with an addendum to the contract from Bank of America,² which they both signed. The addendum is a two-page, single-spaced document entitled “Bank of America Mortgage Addendum to Contract;” it is not a standard Texas Real Estate Commission Form.

Paragraph 13 of the addendum provides, Waiver of Trial by Jury. Seller and Buyer knowingly and conclusively waive all rights to trial by jury in any action or proceeding relating to this Contract.

Bank of America contends that the phrase “Waiver of Trial by Jury” is bolded, but we cannot tell from our examination of the addendum contained in the clerk’s record and the copy of the addendum attached as an appendix to Appellants’ brief whether this phrase is bolded or not.³ Many of the addendum’s other numbered paragraphs begin with a descriptive phrase, such as “11. Termination of Contract” or “14. Conflict.” The ‘Waiver of Trial by Jury” phrase does not appear to be any more or any less bolded than the other introductory phrases in the addendum. Bank of America also points out that the phrase “Waiver of Trial by Jury” is underlined. While it is true that this phrase is underlined, it appears that at some point someone underlined it by hand, not that it was underlined when the addendum was printed. Entire sentences and some of the other paragraph titles in the addendum likewise appear to be hand-underlined. We cannot tell from the record whether these sentences and phrases were hand-underlined before or after the addendum was executed.

The parties did not verbally discuss the jury waiver provision in the addendum. Appellants were not represented by counsel nor did they have an attorney review the contract or the addendum for them. It is undisputed that neither the contract nor the addendum was negotiated and that the addendum was separately presented to Martin and Powell after they had executed the sales contract.

After the April 15, 2003 closing, when Appellants later received the deed and title policy, they discovered that Bank of America had, in fact, only had title to and sold them a thirty-foot strip of land rather than the house and lot that they thought they had purchased. Appellants sued Bank of America for breach of contract, specific performance, negligence, negligent or intentional misrepresentation, breach of express and implied warranties, DTPA violations, and fraud. Bank of America filed a motion to enforce the contractual jury waiver set forth in paragraph 13 of the addendum as to all of Appellants’ claims. After a hearing, the trial court granted the motion and signed an order allowing an interlocutory appeal under section 51.014(d) of the civil practice and remedies code. Tex. Civ. PRAC. & Rem.Code AnN. § 51.014(d).

III. Analysis

A. Standard of Review

Because the issue on appeal involves a question of law, we review it de novo. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 239 (Tex.2003).

B. The Right to a Jury Trial Is a Constitutional Right

The Seventh Amendment of the United States Constitution provides that “[i]n suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of common law.” U.S. Const. amend. VII. The Texas Constitution likewise provides that “[t]he right of trial by jury shall remain inviolate” and that “[i]n the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury.” Tex. Const. art. I, § 15,⁴ art. V, § 10. Clearly, the right to a jury trial in civil disputes — when the right existed at common law — is a constitutional right. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 132 (Tex.2004) (original proceeding) (recognizing the right to trial by jury is a constitutional right to be given the “same protections as other constitutional rights”); Nicole Mitchell, Note, Pre-Dispute Contractual Jury Waivers: The New Arbitration in Texas? A Case Note on In re Prudential Insurance Company of America, 58 Baylor L.Rev. 243, 244 (2006); see also Brief of Gerald R. Powell as Amicus Curiae, 1-3, in Coca-Cola Co. v. Harmar Bottling Co., 50 Tex. Sup.Ct. J. 21, 2006 WL 2997436 (Tex. Oct. 20, 2006).

C. In Texas, Prelitigation Contractual Jury Waivers Are Not Per Se Unenforceable but Must Be Knowing and Voluntary

The constitutional right to trial by jury may be waived via contract so long as the waiver is made knowingly, voluntarily, and intelligently “with sufficient awareness of the relevant circumstances and likely consequences.” In re Prudential, 148 S.W.3d at 182 (quoting Brady v. United States, 397 U.S. 742, 748, 90 S.Ct. 1463, 1469, 25 L.Ed.2d 747 (1970)).⁵ In holding that prelitigation contractual jury waivers are not per se unenforceable, the Texas Supreme Court in In re Prudential expressly “echo[ed] the United States Supreme Court’s admonition [in Brady v. United States ] that “waivers of constitutional rights must be knowing, intelligent acts done with sufficient awareness of the relevant circumstances and likely consequences.’ ” Id. Thus, the Texas Supreme Court equated the Texas standard for a “knowing and voluntary” prelitigation contractual jury waiver with the “knowing and voluntary” standard utilized in criminal cases like Brady to assess the validity of a defendant’s pretrial waiver of a jury trial via a guilty plea.⁶ In re Prudential, 148 ; see Brady, 397 U.S. at 748, 90 S.Ct. at 1469. But see L & R Realty v. Conn. Nat’l Bank, 246 Conn. 1, 715 A.2d 748, 755 (1998) (holding in commercial loan transaction “that it is appropriate to apply a lower standard in determining the enforceability of prelitigation contractual jury trial waivers than for waivers in criminal cases”)- This was a logical step by the supreme court because a guilty plea, once expressly approved by the trial court, is a binding contract between the State and the defendant, that is, a guilty plea is a preliti-gation contractual jury waiver.⁷ The Brady standard for a “knowing and voluntary” jury waiver requires a consideration of all relevant surrounding circumstances and requires special scrutiny when the litigant is not represented by counsel. Brady, 397 U.S. at 748 n. 6, 749, 90 S.Ct. at 1469.

D. Burdens of Proof to Establish That Prelitigation Contractual Jury Waiver Was Made Knowingly and Voluntarily

1. Presumption against jury waiver; arbitration procedures do not apply⁸

Because the right to a jury trial is a constitutional right, the United States Supreme Court has recognized that every reasonable presumption is indulged against the waiver of that right. Aetna Ins. Co. v. Kennedy, 301 U.S. 389, 393, 57 S.Ct. 809, 811-12, 81 L.Ed. 1177 (1937) (“But, as the right of jury trial is fundamental, courts indulge every reasonable presumption against waiver.”); Hodges v. Easton, 106 U.S. 408, 412, 1 S.Ct. 307, 311, 27 L.Ed. 169 (1882) (“It has been often said by this court that the trial by jury is a fundamental guaranty of the rights and liberties of the people. Consequently, every reasonable presumption should be indulged against its waiver.”); see also College Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 681-82, 119 S.Ct. 2219, 2229, 144 L.Ed.2d 605 (1999) (recognizing in different context that “[cjonstructive consent is not a doctrine commonly associated with the surrender of constitutional rights”); Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833, 848, 106 S.Ct. 3245, 3255, 92 L.Ed.2d 675 (1986) (recognizing that “Article Ill’s guarantee of an impartial and independent federal adjudication is subject to waiver, just as are other personal constitutional rights that dictate the procedures by which civil and criminal matters must be tried.”); RDO Fin. Servs. Co. v. Powell, 191 F.Supp.2d 811, 813 (N.D.Tex.2002) (holding prelitigation waiver of jury trial “must be made knowingly and voluntarily, and courts will indulge in every reasonable presumption against a waiver of that right”).

The Texas Supreme Court’s recognition in In re Prudential that the right to trial by jury is a constitutional right means that the starting point of our analysis is a presumption⁹ against the waiver of this constitutional right. See, e.g., Aetna Ins. Co., 301 U.S. at 393, 57 S.Ct. at 811-12; In re Prudential, 148 S.W.3d at 132 (giving right to trial by jury “same protections as other constitutional rights”); accord Ex parte Cupps, 782 So.2d 772, 775 (Ala.2000) (construing scope of contractual jury waiver strictly and narrowly “in deference to the constitutional guarantee of the right to a jury trial”); see also Note, 58 Baylor L.Rev. at 259. But see Lowe Enters. Residential Partners, L.P. v. Eighth Judicial Dist. Ct., 118 Nev. 92, 40 P.3d 405, 410 (2002) (holding — without reference to Supreme Court case law to the contrary — that in Nevada contractual jury waivers are presumptively valid).

Despite the existence of a presumption against the waiver of the constitutional right to trial by a jury, some courts have applied the burden-of-proof rules used to enforce the presumption favoring arbitration to contractual jury waivers. See In re Wells Fargo Bank Minn., N.A., 115 S.W.3d 600, 609-10 (Tex.App.-Houston [14th Dist.] 2003, orig. proceeding) (applying presumption of validity to contractual jury waiver — i.e., presuming that jury waiver was knowingly and voluntarily made — based on statement in jury waiver provision itself that waiver was “knowing and voluntary”). The standards governing the enforceability of arbitration clauses are inapplicable to prelitigation contractual jury waiver provisions for several reasons.

First, public policy favors arbitration, while the same cannot be said of the waiver of constitutional rights. Compare In re Bruce Terminix Co., 988 S.W.2d 702, 704 (Tex.1998) (recognizing

public policy favors arbitration) with RDO Fin. Servs. Co., 191 F. Supp.2d at 813 (recognizing that courts will indulge in every reasonable presumption against waiver of the constitutional right to trial by a jury). Second, with only few exceptions, courts are required by statutory directives — the Federal Arbitration Act and the Texas General Arbitration Act — to compel arbitration if an agreement to arbitrate exists and one party is refusing to arbitrate. See Federal Arbitration Act, 9 U.S.C. § 4 (2005); Tex. Civ. Prac. & Rem. Code Ann. § 171.021(a) (Vernon 2005); see also, e.g., In re D. Wilson Constr. Co., 196 S.W.3d 774, 782-83 (Tex.2006) (orig.proceeding) (recognizing strong presumption favoring arbitration); Prudential Sec., Inc. v. Marshall, 909 S.W.2d 896, 898 (Tex.1995) (orig.proceeding) (same); Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266, 268 (Tex.1992) (orig.proceeding) (same). These statutes — titled arbitration acts— clearly do not apply to non-arbitration contracts. No comparable statutory mandate exists directing courts to compel enforcement of contractual jury trial waivers. Third, arbitration constitutes an agreement by the parties to avoid the judicial process altogether, not an agreement to limit one’s rights following the invocation of the judicial process. A contractual jury waiver does not eliminate the court system from the resolution of the dispute but instead eliminates a litigant’s access to a jury, an essential component of the court system. A distinction exists between an agreement to resolve disputes out of court and an agreement to resolve disputes in court but to waive constitutional aspects of that in-court resolution. Accord Grafton Partners L.P., 32 Cal.Rptr.3d 5, 116 P.3d at 484 (holding that the “analogy to arbitration agreement is not persuasive” in part because “the principal feature of an arbitration agreement is that the contracting parties agree they will not submit their controversy to a court of law in the first instance”). And finally, the standards governing the enforceability of arbitration clauses are inapplicable because they conflict with the Brady knowing and voluntary standard adopted by the supreme court in In re Prudential. Compare Brady, 397 U.S. at 746, 90 S.Ct. at 1469 n. 6 (emphasizing that to be voluntary a jury trial waiver must be “done with sufficient awareness of the relevant circumstances and likely consequences”) with In re Oakwood Mobile Homes, Inc., 987 S.W.2d 571, 573 (Tex.1999) (orig.proceeding) (holding that once the party seeking to compel arbitration establishes the existence of an arbitration agreement and that the claims raised fall within the scope of that agreement, the trial court must compel arbitration), abrogated in part on other grounds by In re Halliburton Co., 80 S.W.3d 566, 571-72 (Tex.2002) (orig.proceeding). The Brady standard requires more than simply a showing that a contractual jury waiver exists and that the claims fall within it; application of the arbitration procedures to determine the enforceability of prelitigation contractual jury trial waivers would permit enforcement of jury trial waivers absent any showing that the waiver was knowingly and voluntarily made.

Thus, we begin our analysis at a different point than the point at which an arbitration analysis begins. In an analysis of an order granting or denying a motion to compel arbitration, we would begin by determining whether the party seeking ar-bitration had established that an arbitration agreement existed and that the claims sought to be arbitrated were within the scope of that agreement. In re Oakwood Mobile Homes, Inc., 987 S.W.2d at 573. Here, however, we begin with a presumption against the contractual waiver of the constitutional right to trial by jury. See, e.g., Aetna Ins. Co., 301 U.S. at 393, 57 S.Ct. at 811-12; see also Note, 58 BayloR L.Rev. at 259. That is, the existence of the basic fact of a contractual jury trial waiver gives rise to a presumed fact that the waiver was not knowingly and voluntarily made until the presumed fact is rebutted. Accord Hunter, 988 S.W.2d at 473. Because we begin with this presumption, the burden is on the party seeking to enforce the prelitigation contractual jury waiver to rebut this presumption with evidence that the waiver was knowingly and voluntarily made with full awareness of the legal consequences. In re Prudential, 148 S.W.3d at 132-33 (enforcing contractual jury waiver when “undisputed” facts established waiver was knowing and voluntary as a matter of law); accord In re Gen. Elec. Capital Corp., 203 S.W.3d 314, 316 (Tex.2006) (orig.proceeding) (recognizing that contractual jury waiver provision that was “conspicuous” — because it was in bold-ed font and in all capital letters — met burden of party seeking to enforce provision to make prima facie showing that waiver was knowing and voluntary). But see L & R Realty, 715 A.2d at 754-55 (placing burden of proof and production on party seeking to avoid enforcement of contractual jury waiver).¹⁰ That is, the mere fact that a contractual jury waiver exists and that the claims are within its scope does not shift the burden to the party opposing enforcement of the contractual jury waiver. Instead, only if the party seeking to enforce the jury waiver provision brings forward at least prima facie evidence that the waiver was knowingly and voluntarily made, rebutting the presumption against jury trial waivers, does the burden shift to the opposing party to establish that the waiver was not made knowingly and voluntarily.¹¹ In re Gen. Elec. Capital Corp., 203 S.W.3d at 316 (recognizing initial burden of presenting prima facie evidence that jury waiver was knowingly and voluntarily made is on party seeking to enforce provision); RDO Fin. Servs. Co., 191 F.Supp.2d at 813-14 (recognizing “the majority of federal courts have held that the party seeking enforcement of the [contractual jury] waiver has the burden” of showing a knowing and voluntary waiver).

2. Factors that may rebut the presumption against jury waiver¹²

Evidence of the following factors may be considered in determining whether the party seeking to enforce a contractual waiver of the right to a jury trial has rebutted the presumption against the waiver: (1) the parties’ experience in negotiating the particular type of contract signed, (2) whether the parties were represented by counsel, (3) whether the waiving party’s counsel had an opportunity to examine the agreement, (4) the parties’ negotiations concerning the entire agreement, (5) the parties’ negotiations concerning the waiver provision, if any, (6) the conspicuousness of the provision, and (7) the relative bargaining power of the parties. Accord In re Gen. Elec. Corp., 203 S.W.3d at 316 (examining conspicuousness under factor 6); In re Prudential, 148 S.W.3d at 134 (examining facts falling into first four categories); RDO Fin. Servs. Co., 191 F.Supp.2d at 813-14 (enunciating factors as including 1, 4, 5, 6, and 7 above); Lowe Enters. Residential Partners, L.P., 40 P.3d at 410 (enunciating factors as including 3, 5, 6, and 7 above); Malan Realty Investors, Inc. v. Harris, 953 S.W.2d 624, 627 (Mo.1997) (enunciating factors as including 1, 2, 4, 5, 6, and 7 above).

3. Facts in the present case concerning the jury waiver

The waiver here was not included in the Texas Real Estate Commission standard one-to-four family residential contract. Nor was it presented to Martin and Powell concurrently with the sales contract. Instead, after the sales contract had been executed, Bank of America presented a two-page addendum to the contract to Martin and Powell for their signatures. No evidence exists in the record that the sales contract or the addendum were negotiated.

Paragraph thirteen, in the middle of the second page of the addendum, provides as follows: ‘Waiver of Trial by Jury.¹³ Seller and Buyer knowingly and conclusively waive all rights to trial by jury, in any action or proceeding relating to this Contract.” This paragraph is not set forth any differently than the other paragraphs in the addendum; that is, the entire paragraph is not printed in larger font, not printed in a different color, not bracketed or starred, does not have blanks beside it for the Seller and Buyer to place their initials, nor does it possess any unique features to distinguish it or make it stand out from the other twenty paragraphs in the addendum, as seen in Appendix A.

Martin testified that Mikey’s Houses was not represented by counsel. She did not recall reading the jury waiver paragraph and testified that it was not discussed or explained. She said that she did not understand that by signing the addendum she was waiving her constitutional right to trial by a jury. She said that she did not understand the consequences of the provision.

On cross-examination, Martin agreed that she had an opportunity to review the addendum and could have reviewed it line for line if she had chosen to. She stated that Bank of America did not rush her into signing it and agreed that she probably could have retained counsel to review it if she had wished.

4. Application of the law to the present facts

The evidence about the jury waiver is undisputed; thus, we must determine as a matter of law whether that evidence establishes that Bank of America rebutted the presumption against waiver of the constitutional right to trial by a jury. In re Prudential, 148 S.W.3d at 134. Although there is nothing in the record to indicate how long Martin and Powell had been in business, the record does show that the purpose of their Mikey’s Houses business was to “buy and rehab houses and sell them.” And the record indicates that this was probably not the first property Martin and Powell had purchased because when Martin was asked whether any representations were made to her as to why the addendum was necessary, she replied, “Most addendums [sic] are just that you accept the property as is, without any— you know, without the seller doing any kind of repairs.” Thus, the first factor, experience of the parties, does not establish that Martin and Powell knowingly and voluntarily made the waiver nor does it meet Bank of America’s burden to produce prima facie evidence of a knowing and voluntary waiver.

Importantly, Martin and Powell were not represented by counsel, and no attorney reviewed the contract or the addendum on their behalf. Because “[w]aiv-ers of constitutional rights not only must be voluntary but must be knowing, intelligent acts done with sufficient awareness of the relevant circumstances and likely consequences,” an assessment of relevant advantages of a waiver of the right to trial by a jury is frequently impossible without the assistance of counsel. See Brady, 397 U.S. at 746, 90 S.Ct. at 1469, n. 6. Consequently, the absence of counsel here means that the second and third factors, whether the parties were represented by counsel and whether the waiving party’s counsel had an opportunity to review the waiver, weigh against a finding that Martin and Powell knowingly and voluntarily made the waiver. And evidence that Martin and Powell were not represented by counsel certainly does not meet Bank of America’s burden to produce prima facie evidence of a knowing and voluntary waiver.

No evidence exists that Martin and Powell negotiated any aspect of the sales contract or the waiver provision. Both the sales contract and the addendum were pre-printed forms labeled as Bank of America documents. Accordingly, factors four and five, the parties’ negotiations concerning the entire agreement and concerning the waiver provision, weigh against a finding that Martin and Powell knowingly and voluntarily made the waiver. An absence of evidence of negotiation does not meet Bank of America’s burden to produce pri-ma facie evidence of a knowing and voluntary waiver.

And the waiver provision here was not conspicuous.¹⁴ It was set forth exactly as the other paragraphs in the addendum; it was not in larger or bolder font than the remainder of the addendum. Cf. In re Gen. Elec. Capital Corp., 203 S.W.3d at 316 (holding contractual jury waiver provision that was in ALL CAPITAL LETTERS AND WAS BOLDED was conspicuous) (emphasis added); see also Tex. Bus. & Com.Code Ann. § 1.201(b)(10) (Vernon Supp.2006) (defining “conspicuous” for purposes of the Uniform Commercial Code). Nothing appears on the face of the two-page, single-spaced “Bank of America Mortgage Addendum to Contract” to attract the attention of a reasonable person to the jury waiver provision when he looks at the addendum.¹⁵ See Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex.1993) (recognizing that to be conspicuous, something must appear on the face of the contract to attract the attention of a reasonable person when he looks at it). Nor did Martin or Powell initial the waiver provision, which would have established their actual knowledge of the waiver. See, e.g., Sydlik v. REEIII, Inc., 195 S.W.3d 329, 332-33 (Tex.App.Houston [14th Dist.] 2006, no pet.) (holding that signatory’s initials by specific indemnity provision established signatory’s actual knowledge of provision). Consequently, factor six, the conspicuousness of the waiver, weighs against a finding that Martin and Powell knowingly and voluntarily made by the waiver. An inconspicuous waiver provision in a twenty-paragraph “Bank of America Mortgage Addendum to Contract” does not meet Bank of America’s burden to produce prima facie evidence of a knowing and voluntary waiver.

And finally, the relative bargaining power of the parties obviously was not equal. Thus, factor seven, the relative bargaining power of the parties, weighs against a finding that Martin and Powell knowingly and voluntarily made the waiver. An absence of evidence of equal bargaining power does not meet Bank of America’s burden to produce prima facie evidence of a knowing and voluntary waiver.

In short, in the record before us, Bank of America produced no evidence showing that Martin and Powell knowingly and voluntarily waived their constitutional right to trial by a jury. No evidence exists that Martin and Powell’s waiver of their constitutional right to trial by a jury was an “intelligent act done with sufficient awareness of the relevant circumstances and likely consequences” as required by In re Prudential. 148 S.W.3d at 132; RDO Fin. Servs. Co., 191 F.Supp.2d at 814 (holding under similar facts “as a matter of law, that a knowing and voluntary waiver of Powell’s right to a jury trial has not been demonstrated”). Consequently, Bank of America failed to meet its burden to make a prima facie showing on this issue as required by In re General Electric Capital Corporation. 203 S.W.3d at 316. To the contrary, the evidence establishes that the Brady knowing and voluntary standard was not met here. See In re Prudential, 148 S.W.3d at 132 (requiring jury waiver to be made “with sufficient awareness ... of likely consequences”); see also Brady, 397 U.S. at 748-49, 90 S.Ct. at 1469-70 (recognizing difficulty in making intelligent assessment of consequences of waiver of jury trial via guilty plea absent counsel).

Bank of America argues that the present facts are indistinguishable from the facts in In re Prudential, where the supreme court enforced a prelitigation contractual jury waiver; we cannot agree. In In re Prudential, the Secchis — the buyers — negotiated with Prudential for six months prior to executing the lease that contained the jury waiver provision; no evidence exists here that Martin and Powell negotiated the sales contract or addendum. In In re Prudential, the Secchis were represented by counsel in their negotiations with Prudential; Martin and Powell were not represented by counsel at all in their transaction with Bank of America. In In re Prudential, Jane Secchi went over the lease with the Secchis’ lawyer; no one “went over” the addendum with Martin and Powell or pointed out the jury waiver provision. In In re Prudential, the jury waiver provision was in the lease initially signed by the Secchis; Martin and Powell were presented with the addendum containing the jury waiver provision after they believed the sale had been completed and were not expecting any new terms other than “as is” language. The supreme court in In re Prudential based its holding in that case on the facts listed above, which are not present in this case. In re Prudential, 148 S.W.3d at 134.¹⁶

Thus, we conclude that as a matter of law, in this case the constitutionally mandated presumption against a litigant’s waiver of the constitutional right to trial by a jury was not rebutted. Bank of America did not meet its burden of producing prima facie evidence that Martin and Powell knowingly and voluntarily waived their constitutional right to trial by a jury. See In re Gen. Elec. Capital Corp., 203 S.W.3d at 316. Accordingly, we sustain the Appellant’s issue.¹⁷

IV. Conclusion

Having held that Bank of America did not meet its burden to present prima facie evidence establishing that Martin and Powell knowingly, voluntarily, intelligently, and with sufficient awareness of the relevant circumstances and likely consequences, waived their constitutional right to trial by a jury, and having sustained Appellant’s issue, we reverse the trial court’s order granting Bank of America’s motion to enforce the contractual jury waiver. We remand this case to the trial court for further proceedings consistent with this opinion. See Tex.R.App. P. 43.2(d).

LIVINGSTON, J. dissents with opinion.

APPENDIX A

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1 . There is no evidence in the record showing how long Mikey's Houses had been in this business.

2 . The evidence establishes that this presentment occurred subsequent to the signing of the sales contract, but the length of time that elapsed before the addendum was presented is not clear.

3 . We have attached a copy of the addendum to this opinion as Appendix A.

4 .The interpretive commentary for article I, section 15 explains, in part,

Trial by jury has been considered as a fundamental safeguard of constitutional liberty. The Declaration of Independence complains of the British Government for denying the colonists in many cases a trial by jury. The Texas Declaration of Independence makes the same indictment against Mexico, declaring that Mexico “has failed and refused to secure, on a firm basis, the right of trial by jury, that palladium of civil liberty, and only safe guarantee for the life, liberty, and property of the citizen.” As a result[,] the right was placed in the Bills of Rights of both the United States Constitution and that of Texas.

Tex. Const, art. I, § 15 interp. commentary (Vernon 1997).

5 . But see Grafton Partners L.P. v. Superior Court, 36 Cal.4th 944, 32 Cal.Rptr.3d 5, 116 P.3d 479, 484 (2005) (holding prelitigation contractual jury waivers unenforceable); Bank S., N.A. v. Howard, 264 Ga. 339, 444 S.E.2d 799, 800 (1994) (same).

6 . The supreme court’s selection of the Brady knowing and voluntary standard seems especially significant because Justice Hecht, who later expressed concern over the decrease in civil jmy trials, was the author of In re Prudential. See Nathan L. Hecht, The Vanishing Civil Jury Trial: Trends in Texas Courts and an Uncertain Future, 47 S. Tex. L.Rev. 163 (2005).

7 . See, e.g., Ortiz v. State, 933 S.W.2d 102, 104 (Tex.Crim.App.1996); Perkins v. Court of Appeals for the Third Supreme Judicial Dist. of Tex., 738 S.W.2d 276, 283-84 (Tex.Crim.App. 1987).

8 . We note that when a prelitigation contractual jury waiver provision is subsumed within an arbitration agreement, the procedural and substantive rules concerning arbitration do apply. See, e.g., In re Palm Harbor Homes, Inc., 195 S.W.3d 672, 675 (Tex.2006) (orig.proceeding) (involving arbitration agreement that also contained jury trial waiver provision and applying arbitration rules). Our discussion here is limited in applicability to stand-alone prelitigation contractual jury waivers intended to preclude a litigant from requesting a jury trial in a dispute that may be resolved through the court system.

9 . A presumption is a rule of law “by which the finding of a basic fact gives rise to the existence of the presumed fact, until the presumption is rebutted.” See, e.g., Hunter v. Palmer, 988 S.W.2d 471, 473 (Tex.App.-Houston [1st Dist.] 1999, no pet.).

10 . The Connecticut Supreme Court based its analysis in part on its application of a lower standard in determining the enforceability of prelitigation contractual jury trial waivers than for waivers in criminal cases. L & R Realty, 715 A.2d at 755. But, as previously discussed, the Texas Supreme Court has not adopted a lower standard for determining the enforceability of contractual jury waivers; it has adopted the same standard as that used to determine the enforceability of a jury waiver in a criminal case. In re Prudential, 148 S.W.3d at 132 (citing Brady v. United States and concluding that "under those conditions [compliance with Brady's knowing and voluntary standards], however, a party’s right to trial by jury is afforded the same protections as other constitutional rights”).

11 . The dissent claims that the parties conceded in oral argument that Bank of America’s initial burden of proof had been met. The dissent overlooks, however, that the parties made this "concession” prior to the supreme court's decision in In re General Electric Capital Corporation explaining the initial burden of proof to establish a knowing and voluntary contractual jury trial waiver and based on the erroneous assumption that arbitration procedures applied; the "concession" was thus nothing more than an agreement that Bank of America had established that a contractual jury waiver existed. See, e.g., In re Oakwood Mobile Homes, Inc., 987 S.W.2d at 573 (recognizing that in reviewing ruling on motion to compel arbitration we first determine whether party seeking arbitration established existence of arbitration agreement). We agree that Bank of America has established the existence of a contractual jury waiver. But proof of, or a concession as to the existence of, this fact does not meet Bank of America’s initial burden of proof under controlling case law. See In re Gen. Elec. Capital Corp., 203 S.W.3d at 316; In re Prudential, 148 S.W.3d at 132-33.

12 . If the party seeking to enforce the contractual jury waiver rebuts the presumption against the waiver by bringing forward prima facie evidence that the jury waiver was knowingly and voluntarily made, the burden is shifted to the opposing party to establish that the jury waiver was not knowing and voluntarily made; these same factors may be considered in determining whether the party opposing enforcement has met that burden. See In re Gen. Elec. Capital Corp., 203 S.W.3d at 316 (explaining that prima facie evidence of knowing and voluntary waiver shifts burden to opposing party).

13 . As mentioned above, we cannot tell whether this introductory phrase is bolded, but to the extent it may be, it is bolded only like the other introductory phrases in the addendum; it is not unique.

14 . The dissent would hold that the addendum’s waiver provision is conspicuous, that the burden of proof consequently shifted to Martin and Powell, and that the evidence weighing in Martin’s and Powell's favor under each of the other factors is nonetheless insufficient to rebut Bank of America's purported prima facie showing of a knowing and voluntary waiver based on the allegedly conspicuous jury waiver provision. Even if the waiver provision here could somehow be construed as being conspicuous, the evidence concerning the remaining factors rebuts any prima facie showing of a knowing and voluntary waiver based on conspicuousness.

15 . If in fact the phrase "Waiver of Trial by Jury” was underlined as a feature of the addendum before Martin and Powell signed it, this fact would not change our analysis because numerous introductory descriptive phrases, and entire sentences, in the twenty-paragraph addendum are likewise underlined. In other words, the underlining throughout the addendum is extensive enough that the underlining of the jury waiver provision does not attract the attention of a reasonable person looking at the addendum.

16 . The supreme court explained,

The Secchis admitted, however, that they had negotiated commercial leases before, that they had previously been represented by counsel, that they had legal counsel in their negotiations with Prudential, that Jane went over this lease with their lawyer, and that they negotiated a number of changes with Prudential over a period of six months.

Based on these facts, ... [the] waiver of trial by jury was knowing and voluntary as a matter of law.

In re Prudential, 148 S.W.3d at 134 (emphasis added).

17 . Having sustained Appellants’ issue on this basis, we need not address Appellants’ argument that, if the jury waiver in this case is enforceable, it nonetheless does not extend to all of Appellants' claims against Bank of America. See Tex.R.App. P. 47.1 (requiring appellate court to address only issues necessary to final disposition of the appeal).