In a recent case, the Wisconsin Supreme Court held that a jury waiver provision in a commercial loan note is enforceable against the borrower under Wisconsin law. According to the Supreme Court, the right of a person to waive his or her right to a jury trial is settled law under the Wisconsin Constitution. The Supreme Court also held that the bank does not need to provide proof in the case that the borrower knowingly and voluntarily agreed to the jury waiver provision. The borrowers were seeking a jury trial in the case, and the bank took the position that the borrowers waived their right to a jury trial pursuant to the jury waiver provision in the note. The name of the case is Taft Parsons, Jr. v. Associated Banc-Corp (2017 WI 37) and the decision was released by the Court on April 13, 2017. The WBA filed a legal brief in the case in support of Associated Banc-Corp and approval of the jury waiver provision.
This decision by the Supreme Court states a clear approval of a practice followed by some banks in Wisconsin of including jury waiver provisions in notes and other loan documents in commercial loan transactions. This decision provides reassurance to those banks which choose to include jury waiver provisions in their commercial loan documents, including the WBA Business Guaranty forms, that those jury waiver provisions are enforceable under Wisconsin law. Model jury waiver provisions have also been provided to banks at various WBA loan documentation workshops in the past. Based on this decision the WBA plans to review its commercial loan documents to determine whether jury waiver provisions would be an appropriate addition to those forms going forward.
We suggest that it would be best for banks to not include jury waiver provisions in consumer credit transactions subject to the Wisconsin Consumer Act without first obtaining written DFI approval of that practice under the Wisconsin Consumer Act. WBA intends to submit such a request for approval to DFI.
John Knight is Partner at the Board & Clark Law Firm.