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JURY WAIVER PROVISIONS - EX PARTE AIG BAKER ORANGE BEACH WHARF, LLC

In Ex parte AIG Baker Orange Beach Wharf, LLC, [Ms. 1080807, Apr. 16, 2010] __ So. 3d. __ (Ala. 2010), the Alabama Supreme Court held that language in a lease agreement between the parties effectively waived the right to trial by jury as to all contract and tort claims between the parties. In that case, Coastal Couture, LLC ("Coastal") entered into a lease agreement with AIG Baker Orange Beach Wharf, LLC ("AIG") whereby Coastal leased retail shopping space from AIG at a shopping center near Orange Beach. The lease agreement contained a provision titled "mutual waiver of jury trial," which applied to "any matters whatsoever arising out of or in any way pertaining or relating to: (i) this Lease; (ii) the relationship of Landlord and Tenant; (iii) the use and occupancy of the Premises; or (iv) in any way connected with or pertaining or relating to or incidental to any dealings of the parties hereto with respect to this Lease or any other matter or controversy whatsoever between the parties. . ." Coastal's owner also signed a guaranty agreement that contained a substantially identical jury waiver. Coastal failed to make any rent payments. AIG sued for unlawful detainer and obtained a judgment in its favor. Coastal appealed to the Baldwin County Circuit Court. AIG amended its previous complaint to seek both unpaid and accelerated rent and Coastal, through its amended answer, added eight counterclaims, including fraud in the inducement and misrepresentation. Coastal demanded a jury trial. AIG moved to strike the jury demand based on the provisions of the lease and the guaranty agreement. Coastal conceded that the contract claims between the parties were subject to the jury waiver, but argued that the jury waiver did not apply to Coastal's tort claims. Based on the broad language of the jury waiver provision, the Alabama Supreme Court held that "allegations of fraudulent inducement on AIG's part in entering into the lease agreement and the guaranty document clearly pertain to or relate to the lease agreement (its negotiation), the 'dealings of the parties' with respect to the lease agreement and the guaranty document, and a 'dispute or controversy' between the parties." Thus, all of Coastal's tort claims were deemed subject to the jury-waiver provisions.

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