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Morales Electrical Contracting, Long Island v. Siemens Building Technologies

August 30, 2012

MORALES ELECTRICAL CONTRACTING, LONG ISLAND OFFICE INC., PLAINTIFF,
v.
SIEMENS BUILDING TECHNOLOGIES, INC., DEFENDANT.



The opinion of the court was delivered by: Spatt, District Judge.

FILED CLERK UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK 8/30/2012 11:26 am

MEMORANDUM OF DECISION AND ORDER

This lawsuit arises out of a subcontract that Morales Electrical Contracting, Inc. ("Morales" or "the Plaintiff") entered into with Siemens Building Technologies, Inc.("Siemens" or "the Defendant") for the purpose of performing electrical work on a project at the JetBlue Airways terminal at John F. Kennedy International Airport ("JFK"). The facts of this case are fully set forth in the Court's order denying the Defendant's motion for summary judgment. See Morales Elec. Contracting, Inc. v. Siemens Bldg. Technologies, Inc. ("Morales I"), No. 09-CV- 2743, 2012 WL 1038865 (E.D.N.Y. March 28, 2012). Presently before the Court are the following motions in limine by the Defendant: (1) Motion to Strike the Morales Jury Demand;

(2) Motion to Preclude Evidence of or Reference to the Death of Alan Smith; (3) Motion to Preclude the Testimony of Hildigaris Morales-Smith; (4) Motion to Preclude Evidence Concerning Duress; (5) Motion to Preclude Evidence of Unrecoverable Damages; (6) Motion to Preclude Evidence of the Smiths' Personal Losses; and (7) Daubert Motion to Exclude from evidence the Testimony of Plaintiff's Damage Witnesses. The Court's rulings on these in limine motions are set forth below.

I. MOTION TO STRIKE MORALES' JURY DEMAND

Siemens moves to strike the Plaintiff's jury demand with respect to the fraud and breach of contract claims asserted against it, on the ground that the Subcontract includes an explicit waiver of a jury trial. The relevant provision of the Subcontract is Article 10 governing "Disputes", which states in relevant part:

10.1 All questions arising under this Agreement shall be resolved in the first instance by Contractor's Project Manager. No claim for additional compensation or extension of time shall be considered unless presented to Contractor's Project Manager in writing within ten (10) calendar days after the occurrence giving rise to the dispute. Any claim not satisfactorily resolved by Contractor's Project Manager in the first instance, and which is presented in writing within the time provided, may be appealed by notice in writing to Contractor's Designated Representative within ten (10) calendar days after the Project Manager's initial decision.

10.2 All claims, disputes and other matters in question which are left unresolved after compliance with the foregoing, arising out of or relating to this Subcontract or the breach thereof, except for claims which have been waived by the making or acceptance of final payment, may be litigated before any court of competent jurisdiction, provided that the parties mutually agree to hereby waive their rights to a jury trial with respect to any matter arising hereunder.

(Cooke Decl., Exh. 1, Articles 10. 1 and 10.2) (emphasis added).) In arguing that the Plaintiff waived its right to a jury, Siemens focuses solely on Article 10.2. However, as the emphasized language above makes clear, the first sentence in Article 10.2 referencing disputes "left unresolved after compliance with the foregoing" indicates that it must be read in combination with the dispute resolution mechanism in Article 10.1. Accordingly, under the language of the Subcontract, pursuant to Article 10.2, a party only waives their right to a jury in a litigation following a failed attempt to resolve "All questions arising under th[e] Agreement" through the dispute mechanism outlined in Article 10.1.

Although the Defendant now argues that the Plaintiff should have followed the procedures set forth in Article 10.1 prior to commencing this action, the Defendant neither moved to dismiss the complaint on this ground, nor did the Defendant assert the Plaintiff's failure to comply with this condition precedent as an affirmative defense. See Endovasc, Ltd. v. J.P. Turner & Co., LLC, 169 F. App'x 655, 657 (2d Cir. 2006) (holding that state law applies to "construing the affirmative defense provisions of the Federal Rules" and that "under New York law, the failure of a plaintiff to comply with conditions precedent is an affirmative defense") (citations omitted); Columbia Artists Mgmt., LLC v. Alvarez, No. 08-Cv-11254, 2010 WL 5396097, at *6 (S.D.N.Y. Dec. 23, 2010) ("In New York, failure of a condition precedent is an affirmative defense."). Accordingly, the Court finds that the Defendant has waived the right to invoke the jury waiver based on the Plaintiff's alleged failure to comply with the condition precedent set forth in Article 10.1.

The Seventh Amendment to the United States Constitution preserves the right to jury trial on issues of fact in suits for breach of contract between private parties. See Northern Pipeline Constr. Co. v. Marathon Pipe Line, 458 U.S. 50, 102 S. Ct. 2858, 73 L. Ed. 2d 598 (1982). A party may, however, waive its right to a jury trial in civil cases. See Commodity Futures Trading Comm'n v. Schor, 478 U.S. 833, 848, 106 S. Ct. 3245, 92 L.Ed.2d 675 (1972). Because the right to a jury trial is "fundamental", it is well-settled that "a presumption exists against its waiver". Nat'l Equipment Rental, Ltd. v. Hendrix, 565 F.2d 255, 258 (2d Cir. 1977); Aetna Ins. Co. v. Kennedy ex rel. Bogash, 301 U.S. 389, 393, 57 S. Ct. 809, 81 L. Ed. 1177 (1937) ("[A]s the right of jury trial is fundamental, courts indulge every reasonable presumption against waiver."). Nevertheless, "a contractual waiver is enforceable if it is made knowingly, intentionally, and voluntarily." Merrill Lynch & Co. Inc. v. Allegheny Energy, Inc., 500 F.3d 171, 188 (2d Cir. 2007).

Here, the jury waiver in Article 10 of the Subcontract is narrow and limited in scope, and therefore it cannot be said that the Plaintiff "knowingly" and "voluntarily" agreed to waive a jury with respect to all claims arising out of the Agreement that were not previously subject to the dispute resolution mechanism in Article 10.1. Nevertheless, for the first time in its reply submission, the Defendant appears to suggest that the Plaintiff submitted its claim for an equitable adjustment to the dispute resolution mechanism in Article 10.1. Thus, the Defendant argues that, because the equitable adjustment claim related to the same acceleration and scope allegations that form the basis for the fraudulent inducement and fraudulent concealment claims, the jury waiver in Article 10.2 applies.

The Court agrees that, if the Plaintiff did follow the dispute resolution mechanism set forth in Article 10.1 with respect to the equitable adjustment claim prior to commencing this litigation, there is at least some possibility that the jury waiver is binding with respect to some or all of the claims asserted against Siemens in this lawsuit. However, because this issue was raised for the first time in the Defendant's reply brief, the Plaintiff has not had an opportunity to respond. Accordingly, the Defendant's motion in limine to strike the Plaintiff's jury demand is denied without prejudice. Although jury selection will go forward as scheduled on Tuesday, September 4, 2012, ...


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