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Boardakan Restaurant LLC v. Atlantic Pier Associates, LLC

United States District Court, E.D. Pennsylvania

August 15, 2014

BOARDAKAN RESTAURANT LLC, , Plaintiffs,
v.
ATLANTIC PIER ASSOCIATES, LLC, , Defendants.

OPINION

JOEL H. SLOMSKY, District Judge.

I. RELEVANT BACKGROUND

Plaintiffs Boardakan Restaurant, LLC and Oceanental Restaurant, LLC ("Plaintiffs") own two upscale restaurants at "The Pier at Ceasar's" ("The Pier") in Atlantic City, New Jersey. Plaintiffs lease space from Defendant Atlantic Pier Associates, LLC ("APA"), a limited liability company owned and operated by the Gordon Group Defendants[1] and the Taubman Defendants.[2] Plaintiffs originally entered into lease agreements (the "Lease Agreement")[3] with Defendants in 2004 when The Pier was still undergoing construction. The Lease Agreement contained the following jury waiver:

Section 18.5 Waiver of Trial by Jury
To the extent permitted by applicable law, Tenant hereby waives trial by jury in any action, proceeding or counterclaim brought by either party against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant created hereby, Tenant's use or occupancy of the Premises or any claim or injury or damage.

(Doc Nos. 88-7; 88-8.) Under the terms of the Lease Agreement, if Defendants did not finish construction of The Pier by March 2006, the Lease Agreement would automatically become null and void. (Doc. No. 13 at ¶ 51.)

In 2004, two other upscale restaurants, RumJungle and English Is Italian, also entered into lease agreements with Defendants. It soon became apparent that The Pier would open later than scheduled. Plaintiffs, knowing they would be able to walk away from the project, sent a letter to Defendants asking for further assurances. (Id. at ¶85.) Specifically, Plaintiffs asked if RumJungle and English Is Italian maintained binding leases with Defendants. Plaintiffs then met with Defendant Peter Fine, who informed them that RumJungle and English Is Italian would "definitely" be opening at The Pier, when in fact they had both already terminated their leases. (Id. at ¶ 103.) Plaintiffs allege that Defendants sent emails, letters, and press releases, all confirming the participation of RumJungle and English Is Italian. (Id. at ¶ ¶ 96, 99, 109.) Plaintiffs argue that Defendants conspired to keep them in the dark, knowing that they would not continue with the project without the other restaurants on board.

On February 22, 2006, one month before the Lease Agreement was set to expire, Plaintiffs signed a lease amendment (the "Amendment"), [4] amending the Lease Agreement with Defendants. The Amendment did not contain a jury waiver provision, but did contain the following paragraph:

16. Except as herein modified, all of the other terms, covenants and conditions of the aforesaid Lease shall remain in full force and effect.

(Doc Nos. 88-7; 88-8.)

The Amendment extended the time-frame for The Pier's opening. Plaintiffs assert that after signing the Amendment, they invested substantial sums of money "to construct, improve, open and operate" their restaurants at The Pier. (Id. at ¶ 114.) Plaintiffs claim they would not have signed the Amendment or invested in the property but for Defendants' misrepresentations in regard to the Rum Jungle and English Is Italian restaurants. (Id. at ¶ 96.)

Plaintiffs brought suit against Defendants, demanding a jury trial on their claims of fraud, negligent misrepresentation, promissory estoppel, conspiracy, and alter ego. (Doc. No. 13.) On December 9, 2013, the Taubman Defendants filed a Motion to Strike Plaintiffs' Jury Demand based on the Lease Agreement's jury waiver.[5] (Doc. No. 88.) On December 19, 2013, Plaintiffs filed a Response. (Doc. No. 90.) On December 30, 2013, the Taubman Defendants filed a Reply. (Doc. No. 92). On March 17, 2014, the Court held a hearing on the Motion, and the issue is now ripe for disposition. (Doc. No. 109.) For reasons that follow, the Court will grant the Motion to Strike Plaintiffs' Jury Demand.

II. WAIVER OF A CIVIL JURY TRIAL

A civil litigant's right to a jury trial "is a fundamental right expressly protected by the Seventh Amendment to the United States Constitution." Tracinda Corp. v. DaimlerChrysler AG , 502 F.3d 212, 222 (3d Cir. 2007) (citing Aetna Ins. Co. v. Kennedy , 301 U.S. 389, 393 (1937); Bouriez v. Carnegie Mellon Univ. , 359 F.3d 292, 294 (3d Cir. 2004)). However, "this right may be waived by contract as long as it is done knowingly and voluntarily." Bishop v. GNC Franchising, LLC, No. 05-0827, ...


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