United States: Are Jury Trial Waivers Enforceable In Wisconsin?

Last Updated: June 1 2016
Article by Mindy F. Rice

New Wisconsin Court of Appeals Case Finds Jury Trial Waiver Unenforceable and Substantively and Procedurally Unconscionable

New Case Finds Jury Trial Waiver Unenforceable Under Wisconsin Law

In Parsons v. Associated Banc-Corp, No. 2014AP2581, 2016 WL 2637446 (Wis. Ct. App. May 10, 2016), a recent Wisconsin Court of Appeals case, the Court found a jury trial waiver in form loan documents to be unenforceable.1  It remains to be seen whether Wisconsin courts would reach the same conclusion in a more typical commercial transaction.  There are a few states, including California and Georgia, that have held pre-litigation waivers of the right to trial by jury to be unenforceable2, but the vast majority of states have upheld the enforceability of contractual jury trial waivers if given knowingly and voluntarily.3  This case introduces some doubt as to whether Wisconsin follows the majority approach on the enforceability of contractual jury trial waivers, although there certainly should be a number of ways to distinguish an ordinary course commercial transaction from the case at issue.

Factual Background

An analysis of the facts is helpful here because the nature of the underlying transaction seems to have significantly influenced the Court's analysis.

The Court states the facts of the incident underlying the litigation as follows, based on the complaint filed by the Parsons, the loan documents referred to below, and an affidavit of Taft Parsons, Jr.:  In 2002, Taft Parsons, Jr. and Carol Parsons (the "Parsons") planned to build a series of 12 townhouses in their neighborhood, starting by converting their home and the adjacent properties that they owned to townhouses.  The Parsons engaged Central City Construction ("CCC") as the general contractor for the project through an acquaintance, Joseph Bowles, CCC's vice president.  Mr. Bowles introduced them to Michael Woyan, the head of an organization called People's Action Redevelopment Commission, who told them he would assist with locating financing for the project.  Mr. Woyan later presented the Parsons with commitment papers for two loans from State Financial Bank4 (the "Bank"), each signed by Aaron Moeser, the loan officer in charge of the matter.  In 2011, Mr. Moeser, Mr. Woyan and Mr. Bowles were indicted on federal charges relating to a separate but similar loan transaction.5 The Parsons signed the commitment papers which provided for a home equity loan in the amount of $40,000 and a construction loan in the amount of $774,000.  The Parsons subsequently entered into a "Standard Form of Agreements Between Owner and Design/Builder" with CCC (the "Contract").  CCC failed to complete any of its obligations under the Contract during the succeeding six months.  Approximately seven months after executing the Contract, Mr. Bowles, Mr. Woyan and Mr. Moeser presented the Mr. Parson with a set of pre-printed loan documents, including a note, a disbursing agreement, a loan agreement, a mortgage and a closing statement.  The complaint alleges that the Parsons were not given any time to review the documents or consult with an attorney before signing the documents, and that Mr. Moeser threatened to withdraw the construction loan if the documents were not signed right away.  The documents signed by the Parsons provided that the loans were secured by the Parsons' home, and that only the Bank and the title company, not the Parsons, could approve disbursements of the loans to CCC.  The promissory note included in the packet contained a fairly standard waiver of the right to trial by jury in any transactions arising out of the loan documents or out of the relationship between the Parsons and the Bank.  After the loan documents were signed, multiple construction draws were approved and disbursed despite the fact that the Parsons objected to the disbursements and that no work had actually been done on the townhouses.6 In 2005, a tax levy was imposed on the assets of CCC, the Bank stopped funding construction draws and the Parsons filed for bankruptcy.

In 2011, five years after Associated Bank ("Associated") acquired State Financial Bank, the Parsons filed suit against Associated alleging a pattern of racketeering activity, and alleging negligent hiring, supervision and training of Mr. Moeser.  The Parsons' complaint and subsequent amended complaint contained a jury demand.  The litigation proceeded for three years, with Associated participating in the litigation, filing multiple pleadings and participating in two pre-trial hearings without objecting to the jury trial demand.  However, at the third pre-trial hearing in 2014, Associated  raised an off-the-record objection to the jury trial and subsequently filed a motion to strike the jury trial demand, citing the jury trial waiver in the promissory note signed by Mr. Parsons.7  The Circuit Court granted Associated's motion and the Parsons appealed.

The Court of Appeals Concludes the Bank Waived its Right to Object to a Jury Trial

The Court states that the right to a trial by jury is a constitutional right that can be waived. The Court also states that Associated's failure to object to the jury trial waiver for three years constitutes Associated's forfeiture of the right to object and waiver of the right to contest the manner in which the case would be tried.  The Court holds that Associated is equitably estopped from raising an objection to a jury trial three years into the litigation.  This holding could have been sufficient to dispose of the case; however, the court goes on to analyze the underlying enforceability of the jury trial waiver.8

The Court of Appeals Invalidates the Jury Trial Waiver Because it Was Not Knowing and Voluntary

Acknowledging that there was no Wisconsin authority addressing the validity of a pre-litigation jury trial waiver, the Court looked to analogous Wisconsin law and the law of other jurisdictions for guidance. The Court states that a contractual pre-litigation jury trial waiver is not enforceable if not given knowingly and voluntarily.  The Court analyzes four factors in determining whether the waiver was given knowingly and voluntarily in this case, while noting that these factors are not the only factors that can be considered in making this determination.  The four questions the court considered were:  (1) Was the clause negotiated?  (2) Was the clause conspicuous?  (3) What was the bargaining power between the parties?  (4) Was the party against whom the waiver is being enforced given the opportunity to have counsel review the provision?  The Court found that the waiver was not given knowingly and voluntarily even though the clause was conspicuous and stated by its terms that it was given knowingly and voluntarily.  The determining factors seem to have been that the clause was not negotiated, the borrower was not given time to review the documents or seek the advice of counsel, and that the borrower essentially had no bargaining power in this particular situation.9

The Court of Appeals Finds the Jury Trial Waiver to Be Unconscionable

Finally, although the Court had already stated that the waiver was unenforceable because it was not knowing and voluntary, the Court proceeded to an unconscionability analysis and found that the jury trial waiver was both procedurally and substantively unconscionable. In light of the facts alleged, the finding of procedural unconscionability is unsurprising, but the discussion of the substantive unconscionability is potentially applicable to a wide range of commercial transactions involving parties with unequal bargaining power.  The Court appears to object to the breadth of the waiver because it applies to all loan documents as well as any other transaction between the Bank and the borrower.  The Court notes that the provision was not negotiated and that the bank gave up nothing of value in exchange for the waiver, and in finding the jury waiver to be unconscionable, the Court states that a provision is substantively unconscionable if it unreasonably favors the more powerful party.10

Note that the 7th Circuit (in a split from other federal circuit courts) applies state law in diversity jurisdiction cases in determining whether a jury trial waiver is enforceable, rather than federal law.11 Under federal law, jury trial waivers are generally enforceable.12 Therefore, the effect of this decision cannot be avoided by litigating in federal court rather than in state court.

Alternative Approaches for Lenders

In light of this decision, lenders (and other institutional parties that include these provisions in their standard form documents) should consider making their jury trial waivers conspicuous and captioned with an easily understood heading.  An additional alternative approach would be to specify in term sheets that the jury trial waiver will be included in the underlying loan documentation, thus giving borrowers advance notice of the waiver and the opportunity to seek alternative financing before the loan documents are prepared.  In forbearance agreements, where the lender is agreeing not to take action it is otherwise entitled to take, lenders could include the following, or other similar language, in the jury trial waiver provision:  "This jury trial waiver constitutes a substantial consideration for and inducement to the lender to enter into this agreement."  In many commercial loan transactions, borrowers will have engaged counsel to assist with the financing documentation.  In cases where the borrower does not appear to have the assistance of counsel, lenders may want to forward the loan documents with a cover e‑mail indicating that the loan documents contain important provisions affecting the borrower's rights, including a waiver of the right to trial by jury, and that the bank advises that its borrowers consult with counsel prior to executing the documents.  Obviously, borrowers should be given time and opportunity to review the loan documents prior to signing them, and the opportunity to have counsel review and comment on the documents.  If the loan documents are signed in person, lenders may want to consider obtaining written evidence that such opportunity was given to the borrower.

Reinhart will continue to monitor this important issue and will provide additional alerts as further developments occur.  If you have questions about this update, or loan documentation issues generally, please contact your Reinhart attorney or any member of the Reinhart Banking and Finance team.


1 This case was recommended for publication, but is as yet unpublished.  Until published, it may be cited as persuasive, but not controlling authority.

2 See, e.g., Bank S., N.A. v. Howard, 444 S.E.2d 799 (Ga. 1994); Grafton Partners L.P. v. Superior Court, 116 P.3d 479 (Cal. 2005).

3 See, e.g., Uribe v. Merchants Bank, 642 N.Y.S. 2d 23 (App. Div. 1996), GreatAmerica Leasing Corp. v. Cozzi Iron & Metal, Inc. 76 F. Supp. 2d 875 (N.D. Ill. 1999) (relying on Illinois state law); Jay M. Zitter, Annotation, Contractual Jury Trial Waivers in State Civil Cases, 42 A.L.R.5th 53, WESTLAW (database updated May 2016).

4 In 2006, State Financial Bank was acquired by Associated Bank.  References to the Bank after 2006 are to Associated Bank, as successor to State Financial Bank.

5 United States v. Moeser, 758 F.3d 793 (7th Cir. 2014).

6 At a certain point after Mr. Parsons objected, a new disbursing agreement was signed that required Mr. Parsons to approve disbursements; however, CCC continued to submit disbursement requests directly to the Bank, with Mr. Bowles's signature in place of Mr. Parsons's signature, and the Bank continued to approve the disbursements.

7 Parsons, 2016 WL 2637446, ¶¶ 2-13.

8 Id. ¶¶ 16, 21-23.

9 Id. ¶¶ 26, 28-31.

10 Id. ¶¶ 33-39.

11 IFC Credit Corp. v. United Business & Indust. Fed. Credit Union, 512 F.3d 989, 991-992 (7th Cir. 2008).

12 See, e.g., Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d 212 (3d Cir. 2007).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Mindy F. Rice
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.