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URBAN OUTFITTERS, INC. v. 166 ENTERPRISE CORP.

March 29, 2001

URBAN OUTFITTERS, INC., PLAINTIFFS
v.
166 ENTERPRISE CORP. AND IG SECOND GENERATION PARTNERS, L.P., DEFENDANTS. IG SECOND GENERATION PARTNERS, L.P., THIRD-PARTY PLAINTIFF V. MASTERBUILDERS, POMPEI A.D., WAI-TONG CHAN, VIKRANT S. SAMPAT, P.E., AND STEVEN S. SHORE P.E., THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: John E. Sprizzo, United States District Judge.

MEMORANDUM OPINION AND ORDER

The above-captioned actions come before the Court on Defendant IG Second Generation Partners, L.P.'s ("IG Second") Motion to Strike Plaintiff Urban Outfitters, Inc.'s ("Urban") Jury Demand. For the reasons that follow, Defendant's motion is denied.

BACKGROUND

These actions center upon allegations by Plaintiff-subtenant Urban that Defendant-landlord IG Second and Defendant-tenant 166 Enterprise Corp. ("166 Enterprise") breached various agreements between the parties in providing Urban with a commercial property at 166 Second Avenue, New York, New York ("the Property") that was unsuitable for Urban's purposes. See Affidavit of David M. Cassidy dated March 15, 2001 ("Cassidy Aff."), Exhibit ("Exh.") F, Complaint dated October 14, 1998 ("Cmplt.") at ¶¶ 9-16. In addition to Plaintiff's claims, Defendants have asserted cross-claims against each other pursuant to an indemnification agreement between them, and Defendant 166 Enterprise has asserted a counterclaim against Urban alleging failure to pay rent. Defendant IG Second has also impleaded several Third-Party Defendants hired by Urban to work on the premises, including Urban's general contractor, structural engineer, engineer, architect, and designer, alleging that such individuals are responsible for the unsuitability of the premises. See Affidavit of Geoffrey A. Mason dated February 6, 2001 ("Mason Aff."), Exh. C., Answer of IG Second dated November 11, 1998 at ¶ 9; Mason Aff., Exh. D., Answer of 166 Enterprises dated December 8, 1998 at ¶¶ 9-14; Third-Party Complaint by IG Second dated October 29, 1999. Several of these Third-Party Defendants have in turn asserted counterclaims against IG Second. See e.g., Counterclaims of Defendants Vikrant K. Sampat and Wai-Tong Chan dated June 16, 2000 and July 5, 2000. Both Urban and Third-Party Defendant Pompei, the property designer, have made jury demands for all issues triable by a jury. See Cassidy Aff., Exh. G, Urban's Demand for Trial by Jury dated November 20, 1998; Cassidy Aff., Exh. I, Pompei's Amended Answer to Amended Third-Party Complaint dated June 26, 2000, at 8.

Most relevant to the instant motion, on July 31, 1996, Defendants IG Second and 166 Enterprise entered into a lease for the Property ("the Prime Lease") which contained the following clause:

It is mutually agreed by and between Owner and Tenant that the respective parties hereto shall and they hereby do waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other (except for personal injury or property damage) on any matters whatsoever arising out of or in any way connected with this lease, the relationship of Owner and Tenant, Tenant's use of or occupancy of said premises, and any emergency statutory or other statutory remedy.

Cassidy Aff., Exh. B, Prime Lease at ¶ 25.

Subsequently, on December 19, 1997, 166 Enterprises entered into a Sublease Agreement with Urban ("the Sublease Agreement") which in part provided that:

This sublease is subordinate to all of the terms, covenants and provisions contained in the Prime Lease . . . except Articles 2, 40, 41, 53, and 78 . . . and to the extent . . . such terms, covenants, conditions and provisions have been modified [by the Sublease Agreement or other agreements between Urban, IG Second and 166 Enterprise].

Cassidy Aff., Exh. C, Sublease Agreement at ¶ 10. Articles 2, 40, 41, 53 and 78 are not relevant to this dispute. See Prime Lease at ¶ 2, 40, 41, 53, 78.

Urban also entered into two agreements with both 166 Enterprises and IG Second, an Agreement of Non-Disturbance and Consent dated February 11, 1998 ("the Consent Agrement") and an Indemnity Agreement dated April 15, 1998 ("the Indemnity Agreement"). See Cassidy Aff., Exh. D, Consent Agreement; Cassidy Aff., Exh. E, Indemnification Agreement. In particular, the Indemnity Agreement provided that "[e]xcept as specifically modified herein, the Sublease and the Consent Agreement remain unmodified and in full force and effect." Mason Aff., Exh. I, Indemnity Agreement at ¶ 1.

DISCUSSION

Courts are to strictly construe jury waiver clauses, as the right to a jury trial is fundamental and protected by the Seventh Amendment. See Gargiulo v. DelSole, 769 F.2d 77, 79 (2d Cir. 1985). This right can only be waived knowingly and intentionally, and waiver is not lightly inferred or extended. See id. As such, the burden of proving an intentional waiver is upon the party asserting waiver, ...


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