United States District Court, E.D. Kentucky, Central Division, Lexington
MEMORANDUM OPINION AND ORDER
C. Reeves, United States District Judge.
Gray Construction (“Gray”) filed a motion to
strike the Defendant Envirotech Construction
Corporation39;s (“Envirotech”) jury demand.
[Record No. 60] This requires the Court to determine whether
the jury waiver provision included in the subcontract between
Gray and Envirotech is enforceable. The motion to strike
Envirotech39;s jury demand will be granted because the jury
waiver provision is severable and reflects the parties39;
intent at the time of contract formation.
action arises out of the construction of a business
establishment in Versailles, Kentucky, known as More Than A
Bakery. [Record No. 1] Gray, the general contractor for the
project, entered into a subcontract with Envirotech to
provide all labor and materials necessary for the
installation of insulated metal panels at the business.
[Record Nos. 1; 60-1] Unfortunately, the parties had a
falling out, resulting in Gray39;s termination of the
subcontract and Envirotech39;s abandonment of the project.
[Record No. 1] Gray alleged that Envirotech was in default
under the terms of the subcontract and withheld payment.
[Record No. 1] The plaintiff then incurred additional expense
to complete the work after Envirotech39;s involvement in
the project ceased. [Record No. 1] Envirotech asserts that it
is still owed money for the work that it performed, and
recorded a lien against More Than A Bakery. [Record No. 1]
Gray executed and recorded a bond to release the lien.
[Record No. 2');">23-3]
filed this action on December 7, 2');">2017, claiming that
Envirotech breached the parties39; contract and violated a
state statute by filing an illegal lien against More Than A
Bakery. [Record No. 1] It also seeks a declaratory judgment,
holding that it is not required to pay Envirotech but,
instead, is entitled to payment from Envirotech. [Record No.
1] Envirotech answered and filed a counterclaim on January
2');">26, 2');">2018, alleging breach of contract against Gray. [Record
No. 1] Envirotech filed an amended counterclaim on July 16,
2');">2018, and requested a trial by jury. [Record No. 39, p. 9]
filed a motion to strike Envirotech39;s jury demand on
November 5, 2');">2018, contending that the subcontract includes a
waiver of the right to a jury trial. [Record No. 60]
Envirotech filed a response on November 2');">26, 2');">2018, asserting
that it is not subject to the jury trial waiver provision
because Gray had previously materially breached the
subcontract. As a result, Envirotech claims that it is not
required to comply with the subcontract. [Record No. 69');">69]
relevant parts of the subcontract state:
16.1 DISPUTE RESOLUTION. All claims, disputes and matters in
question arising out of, or relating to, this Agreement or a
breach thereof, except for claims which have been waived by
the making or acceptance of final payment and the claims
excluded or limited by Sections 6.2');">2 and 6.6, shall be
resolved by mediation, arbitration, and/or litigation at
Gray39;s sole option. . .
16.2');">2 DISPUTE RESOLUTION PROCEDURE. Prior to a demand for
arbitration, or initiation of litigation of claims, the
parties shall proceed as follows, as an express condition
precedent to commencing formal claims against the other
arising out of the dispute:
(a) The party asserting a claim shall do so in writing and
within the notice period, if any, established for such claims
by the Subcontract Documents. In the absence of a notice
period set by the Subcontract Documents, the notice of claim
shall be given as soon as practicable but in no event later
than five (5) calendar days after the claimant is aware of
the event from which the claim arises.
(b) The parties shall then attempt in good faith to negotiate
a resolution of disputed claims during the next twenty (2');">20)
calendar days before pursuing any other means of dispute
(c) If claims remain unresolved, the parties shall endeavor
to resolve disputes by proceeding at the instance of either
to non-binding mediation conducted under such rules as the
parties may agree to employ. The parties shall divide the
cost of the mediator evenly among them
(d) DISPUTES RELATED TO GRAY. Notwithstanding anything stated
above, if any dispute shall arise between Gray and the
Subcontractor pertaining in any manner to the construction or
interpretation of this Agreement, or the rights or
obligations of the parties, or to the breach of this
Agreement which the parties are unable to settle by mutual
agreement, Gray shall have the exclusive option either to
have the dispute determined by ...