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                 ARKANSAS COURT OF APPEALS

                                       DIVISION III
                                      No. CV-15-1068


 KENNETH W. TILLEY,                               Opinion Delivered:   March 1, 2017
 INDIVIDUALLY AND AS TRUSTEE
 OF THE KENNETH TILLEY FAMILY                     APPEAL FROM THE GARLAND
 TRUST                                            COUNTY CIRCUIT COURT
                     APPELLANT                    [NO. 26CV-11-1194]

 V.                                               HONORABLE JOHN HOMER
                                                  WRIGHT, JUDGE
 MALVERN NATIONAL BANK AND
 STEPHEN MOORE
                    APPELLEES AFFIRMED


                            KENNETH S. HIXSON, Judge

       This appeal arises out of litigation that began as a foreclosure proceeding. Appellant

Kenneth W. Tilley, individually and as trustee of the Kenneth Tilley Family Trust (Tilley),

was a borrower on a loan from appellee Malvern National Bank (MNB). Appellee Stephen

Moore (Moore) was vice president of commercial lending at MNB during most of the time

relevant to the case. MNB filed a foreclosure action against Tilley, and he responded by

denying the allegations and filing a counterclaim against MNB and a third-party complaint

against Moore. Tilley demanded a jury trial, but the circuit court ultimately struck his

demand. After a bench trial, the circuit court ruled in favor of MNB and Moore on all

claims. Tilley appeals and asks our court to hold that (1) the circuit court erred by striking

his demand for jury trial and (2) the circuit court abused its discretion by refusing to admit

evidence of his future lost profits. We affirm.
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                                      I.      Background

       In July 2010, Tilley and MNB entered into a loan agreement. The loan agreement

included a jury-waiver clause in the event of a dispute between the parties. Tilley executed

a promissory note in favor of MNB with a principal balance of $221,000. The note was

secured through a mortgage on certain real property in Garland County, Arkansas. Tilley

defaulted on the loan. MNB accelerated the note and filed its complaint in foreclosure

against Tilley in November 2011. Tilley answered the complaint, asserted affirmative

defenses, reserved the right to file one or more counterclaims, and demanded a jury trial.

       In October 2012, Tilley filed a counterclaim against MNB and a third-party

complaint against Moore. The essence of Tilley’s counterclaim and third-party complaint

is that Moore, acting on behalf of MNB, promised to loan him $350,000 so that he could

fund two development projects. The $350,000 loan was never made to Tilley. For reasons

unrelated to this litigation, Moore resigned from his position at MNB. Following Moore’s

resignation, Tilley entered into further negotiations with other representatives from MNB,

resulting in Tilley and MNB entering into the $221,000 loan agreement instead of the

$350,000 loan Tilley had originally requested and MNB had allegedly agreed on. Tilley

alleged that MNB’s failure to fulfill the promise to loan him $350,000 caused him to default

on the $221,000 loan. Tilley sued for breach of contract, promissory estoppel, violations of

the Arkansas Deceptive Trade Practices Act, tortious interference, negligence, and fraud and

demanded a jury trial.

       The circuit court set the case for a jury trial. Shortly thereafter, MNB and Moore

filed a motion to strike Tilley’s jury-trial demand. Generally, they argued that Tilley was


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not entitled to a jury trial because (1) a foreclosure claim and all claims essential to the

foreclosure proceeding should be tried to the court rather than a jury and (2) Tilley had

waived his right to a jury trial in the loan agreement with MNB. 1 Tilley responded by

arguing that he was entitled to a jury trial because his claims were claims at law and because

his waiver of his right to a jury trial in the loan agreement was not knowing and voluntary.

The circuit court struck Tilley’s jury demand, and the parties proceeded to a bench trial.

       Following the bench trial, the circuit court ruled in favor of MNB on its foreclosure

claim and against Tilley on his counterclaim and third-party complaint. The circuit court

entered its findings of fact and conclusions of law and then entered a judgment and decree

of foreclosure. Following the entry of these orders, Tilley filed a motion for new trial that

was deemed denied. Tilley timely appealed arguing that (1) the circuit court erred by

striking his jury-trial demand and (2) the circuit court abused its discretion by refusing to

allow him to introduce evidence of his future lost profits.

                                II.     Entitlement to a Jury Trial 2

       Whether a party is entitled to a jury trial is a legal issue centered on constitutional

interpretation, reviewable de novo on appeal. Ludwig v. Bella Casa, LLC, 2010 Ark. 435,



       1
       MNB and Moore attached a copy of the loan agreement that included the jury-
waiver clause to their motion to strike.
       2
         As a threshold issue, MNB and Moore contend that Tilley failed to preserve the
issues relating to his right to a jury trial. They argue that Tilley was required to appeal from
the order striking his jury demand pursuant to Arkansas Rule of Appellate Procedure–Civil
2(a)(4). We disagree. Our supreme court in Liberty Life Ins. Co. v. McQueen addressed this
precise issue and held that a party may not bring an interlocutory appeal from the denial of
a jury demand. 364 Ark. 367, 219 S.W.3d 172 (2005).

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372 S.W.3d 792. This court is not bound by the decision of the circuit court. First Nat’l

Bank of DeWitt v. Cruthis, 360 Ark. 528, 203 S.W.3d 88 (2005).

       In support of his contention that he was entitled to have his counterclaim and third-

party complaint decided by a jury, Tilley asserts that (1) he had a constitutional right to a

jury trial on his claims; (2) the jury-waiver clause in his loan agreement with MNB was

unenforceable as a matter of law; (3) MNB and Moore waived their right to enforce the

jury-waiver provision; (4) his waiver was unenforceable because it was not knowingly and

voluntarily made; and (5) the jury-waiver clause does not apply to his third-party claims

against Moore.

                        A. The Constitutional Right to a Jury Trial

       Tilley contends that he had a constitutional right to a jury trial on his claims, and this

issue involves a question of whether the circuit court erred in trying his claims as a bench

trial. It implicates amendment 80 to the Arkansas Constitution. Amendment 80 only

merged the chancery and circuit courts and did not alter or expand a party’s right to a jury

trial. First Nat’l Bank of DeWitts, 360 Ark. 528, 203 S.W.3d 88. With this merger, circuit

courts simply added to their existing jurisdiction as a court of law the equitable jurisdiction

which the chancery courts held prior to adoption of the amendment. Id. at 533, 203 S.W.3d

at 91–92.

       It is a long-standing rule that the right to a jury trial does not extend to foreclosure

proceedings.     Riggin v. Dierdorff, 302 Ark. 517, 519, 790 S.W.2d 897, 898 (1990).

Accordingly, it is clear that the circuit court was required to decide MNB’s foreclosure claim

without a jury. MNB and Moore argue that Tilley’s claims must also be tried by a court of


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equity pursuant to the clean-up doctrine. We disagree. “Since Amendment 80 was enacted,

the clean-up doctrine has disappeared because any circuit court now has subject-matter

jurisdiction to hear all justiciable matters not assigned elsewhere, and it has the power to

grant all remedies to the parties before it.” Stokes v. Stokes, 2016 Ark. 182, 41 S.W.3d 113.

       With this in mind, we turn our attention to the standard by which Tilley’s

counterclaim and third-party complaint must be evaluated. In determining whether a

particular claim may properly be submitted to a jury, courts must review the historical nature

of the claims to determine whether they must be submitted to a judge as equitable matters

or whether they may be submitted to a jury as legal matters. Nat’l Bank of Ark. v. River

Crossing Partners, LLC, 2011 Ark. 475, 385 S.W.3d 754. Courts should also look to the

remedies sought in the complaint when determining whether a trial by jury is warranted.

Stokes, supra.

       Tilley’s counterclaim and third-party complaint included causes of action for breach

of contract, promissory estoppel, violations of the ADTPA, tortious interference,

negligence, and fraud; he sought money damages on each of his claims. In reviewing the

historical nature of these claims and the remedy sought, we conclude that Tilley’s claims are

legal in nature. We hold that the circuit court erred in finding that Tilley did not have a

constitutional right to a jury trial on his historically legal claims. With this determination

reached, we direct our attention to whether the circuit court erred in striking Tilley’s jury

demand pursuant to the jury-waiver clause in the loan agreement.




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                                 B. The Jury-Waiver Clause

       MNB and Moore successfully argued to the circuit court that the jury-waiver clause

in the loan agreement precluded a trial by jury. For reference, the jury-waiver clause

provides:

       Each party to this Agreement hereby expressly waives any right to trial by jury
       of any claim, demand, action or cause of action (1) arising under this
       Agreement or any other instrument, document or agreement executed or
       delivered in connection herewith, or (2) in any way connected with or
       incidental to the dealings of the parties hereto or any of them with respect to
       this Agreement or any other instrument, document or agreement executed or
       delivered in connection herewith, or the transactions related hereto or
       thereto, in each case . . . whether sounding in contract or tort or otherwise,
       and each party hereby agrees and consents that any such claim, demand, action
       or cause of action shall be decided by court trial without a jury.

       First, we dispose of two of Tilley’s arguments in support of reversal that are not

preserved for our review. Tilley argues that MNB and Moore waived their right to enforce

the jury-waiver provision in the loan agreement by filing their motion too late in the

proceedings. Tilley makes this argument for the first time on appeal, and it is well settled

that appellate courts will not consider arguments made for the first time on appeal. Brown

v. Lee, 2012 Ark. 417, 424 S.W.3d 817. We summarily dispose of this point on appeal.

       Additionally, Tilley claims that, if held enforceable, the jury-waiver clause bars his

right to a jury trial only against MNB—not Moore. Tilley failed to develop this argument

before the circuit court, and where an argument is not fully developed at the trial level or

on appeal, it is not preserved for review. Omni Holding & Dev. Corp. v. 3D.S.A., Inc., 356

Ark. 440, 156 S.W.3d 228 (2004). Accordingly, we affirm on this point as well.

       With these conclusions reached, we turn to whether predispute contractual waivers

of the right to a jury trial are unenforceable under Arkansas law.        Tilley argues our
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constitution provides that “[t]he right of trial by jury shall remain inviolate, and shall extend

to all cases at law . . .” See Ark. Const. art. 2, § 7. However, that same section concludes

with the proviso: “[B]ut a jury trial may be waived by the parties in all cases in the manner prescribed

by law.” Id. (emphasis added). Hence, while our constitution clearly emphasizes the

fundamental right to a jury, it also contemplates that the right may be waived.

        In Arkansas, “[p]arties to a contract are free to contract upon any terms not contrary

to public policy or the terms of our statutes.” Pest Mgmt., Inc. v. Langer, 369 Ark. 52, 58,

250 S.W.3d 550, 556 (2007). Arkansas allows parties to enter into contracts that control

the manner in which their disputes are resolved. Parties may choose the forum in which

their case will be heard and the law that will govern their case, and they may even choose

to forego the civil justice system and submit to arbitration. See, e.g., Servewell Plumbing, Inc.

v. Summit Contractors, Inc., 362 Ark. 598, 210 S.W.3d 101 (2005); Evans v. Harry Robinson

Pontiac-Buick, Inc., 336 Ark. 155, 983 S.W.2d 946 (1999); Pest Mgmt., Inc., supra. Because

parties are free to enter into contracts that are not contrary to our state’s public policy, and

our constitution itself provides that parties may waive their right to a jury trial, we hold that

predispute contractual waivers of the right to a jury trial—such as the one executed by

Tilley—may be enforceable. They are particularly enforceable when the waiver is entered

into knowingly and voluntarily.

        To that end, Tilley argues that the circuit court erred in striking his jury-trial demand

because he did not knowingly and voluntarily waive his right to a jury trial. When

considering whether this jury-waiver clause is valid, we refer to the general rules of

construction and interpretation of contracts. We acknowledge this as our standard and note


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that this is the manner by which other somewhat novel contractual issues—for instance,

arbitration—have been evaluated by our courts. See Alltel Corp. v. Sumner, 360 Ark. 573,

203 S.W.3d 77 (2005).

       As a preliminary matter, it is a matter of basic contract law that contracts must

be entered into knowingly and voluntarily.        The essential elements of a contract are

(1) competent parties, (2) subject matter, (3) legal consideration, (4) mutual agreement, and

(5) mutual obligation. City of Dardanelle v. City of Russellville, 372 Ark. 486, 277 S.W.3d

562 (2008).

       Our law provides that if a person signs a document, he or she is bound to know the

contents of that document. Banks v. Evans, 347 Ark. 383, 64 S.W.3d 746 (2002). The fact

that a person signed a contract is evidence of his or her knowledge of the contract.

Carmichael v. Nationwide Life Ins. Co., 305 Ark. 549, 552, 810 S.W.2d 39, 41 (1991).

       Here, MNB and Moore attached a copy of the signed loan agreement, which

contained the jury-waiver clause, to their motion to strike. Pursuant to Arkansas law, Tilley

was bound to know the contents of the agreement. Similarly, our law presumes that this

contract was entered into voluntarily; generally, the party attacking voluntariness must allege

and prove otherwise. Bank of the Ozarks, Inc. v. Walker, 2014 Ark. 223, 434 S.W.3d 357.

Tilley attempts in his affidavit challenging the motion to strike to show that he signed this

contract under duress. However, he offered only the conclusory statement that he was

under duress, and this is insufficient evidence of any alleged involuntariness. Robson v.

Tinnin, 322 Ark. 605, 411 S.W.2d 246 (1995). Accordingly, we conclude that the jury-

waiver clause in the loan agreement was enforceable, and we hold that the circuit court


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properly granted the motion to strike Tilley’s jury-trial demand on these grounds. Because

of our holding on this issue, MNB and Moore were entitled to have the entire case heard

as a bench trial, regardless of whether Tilley’s claims were legal or equitable in nature.

                               III.   Evidence of Lost Future Profits

       For his final point on appeal, Tilley argues that the circuit court abused its discretion

by applying the new-business rule and refusing to allow him to introduce evidence of future

lost profits. However, Tilley concedes in his reply brief that his argument is moot unless

we reverse the circuit court’s order striking his jury demand. Because we affirm the circuit

court’s decision in this respect, we do not address his final point on appeal.

       Affirmed.

       HARRISON and BROWN, JJ., agree.

       Eichenbaum Liles, P.A., by: James H. Penick III, for appellant.

       Wright, Lindsey & Jennings LLP, by: Charles T. Coleman, Adrienne L. Baker, and Kristen

S. Moyers, for appellees.




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