In Florida, courts routinely enforce jury trial waiver provisions found in loan agreements, which are generally valid and enforceable. This is true even with respect to fair debt actions. However, because there is generally a fundamental right to a jury trial, waivers of this right are strictly construed. As such, federal courts in Florida have consistently ruled in favor of borrowers holding that non-parties to a mortgage cannot enforce a jury trial waiver provision.

In a recent decision, the U.S. District Court for the Middle District of Florida aligned itself with its counterpart in the Southern District. The plaintiffs sued the bank alleging violations of the Florida Consumer Collection Practices Act (FCCPA) and the Telephone Consumer Protection Act (TCPA) and requested a trial by jury. The bank moved to strike the jury demand arguing that the plaintiffs waived their right to a jury trial by signing the mortgage, which contained a waiver provision.

Agreeing with the plaintiffs that the bank could not enforce the waiver because it was not a party to the mortgage, the court held that, “[g]iven the historical importance of the right to jury trial, and the general policy of ‘indulg[ing] every reasonable presumption against waiver,’” the bank failed to meet its burden in showing that the plaintiffs’ demand for jury trial should be stricken.

The U.S. District Court for the Southern District of Florida has issued several prior opinions with respect to a servicer’s ability to enforce a jury trial waiver. The first such decision was issued in 2011. In that case, the plaintiffs sued the loan servicer alleging that the forced-place insurance premiums it charged to their mortgage loan accounts exceeded what the loan servicer actually paid because a substantial portion of the premiums were refunded to the loan servicer through various kickbacks and/or unwarranted commissions.

The loan servicer filed a motion seeking to strike the plaintiffs’ demand for a jury trial, arguing that the plaintiffs waived their right to jury trial by signing a mortgage containing a jury trial waiver. The court denied the loan servicer’s motion, stating the jury trial waiver in the mortgage “was part of a contractual relationship” and therefore could not be invoked by the non-party loan servicer.

Two years later, the district court again weighed in on the issue. In response to a loan servicer’s motion seeking to strike their jury trial demand, the plaintiffs contended that, because the waiver is contractual, it can only be enforced by parties to the contract. The plaintiffs argued that the loan servicer could not invoke the waiver because it was not party to the mortgage contract.

Agreeing with the plaintiffs, the court determined that because the waiver is part of a contractual relationship between the plaintiffs and the owner of the note and mortgage, and not between the plaintiffs and the loan servicer, the loan servicer could not enforce the waiver against the plaintiffs.

Most recently, in 2014, and relying on the two predecessor cases, the district court held that an otherwise valid jury trial waiver was unenforceable by the loan servicer because it was a non-party to the mortgage, and denied the loan servicer’s motion to strike jury trial demand.

Thus, it seems clear in Florida that servicers cannot enforce a jury trial waiver provision contained in a mortgage to which they are not a party. It remains to be seen, however, whether a servicer, who is also a creditor, has standing to enforce such a waiver. Further, courts have acknowledged that an owner and successor in interest of a promissory note may invoke the jury trial waiver provision contained in the related mortgage where the mortgage provided that the terms and covenants bind and/or inure to the benefit of the successors and assigns of the lender. However, given the strict standard in Florida, the language in mortgages should be carefully evaluated in an effort to confirm whether such successor language is included and applies.