Mission Bay Campland, Inc. v. Sumner Financial Corp.

72 F.R.D. 464, 1976 U.S. Dist. LEXIS 12522
District Court, M.D. Florida·Decided October 29, 1976·No. No. 70-645 Civ-J-S·Published·Cited by 11 cases

Opinion

ORDER

CHARLES R. SCOTT, District Judge.

This case was referred by the Court to the United States Magistrate as master, pursuant to Fed.R.Civ.P. 69 and Fla.Stat. § 56.29(7), but not pursuant to Fed.R.Civ.P. 53. The Court allowed third parties to be impled as involuntary counterclaim-defendants, and ordered them, in their status as third-party transferees of the judgment-debtor in this case, to show cause why the transfer of the judgment-debtor’s assets to them should not be set aside as fraudulent. The impled, involuntary counterclaim-defendants filed a motion demanding a jury trial in the supplementary postjudgment proceedings. The question presented by that motion is whether in supplementary postjudgment proceedings under Fed.R.Civ.P. 69 and state law in a diversity action, the impled, involuntary parties are entitled, as a matter of federal law, to a jury trial on the issues that they raise in their answer to the Court’s show cause order.

Federal Rule 69 provides that state law concerning supplementary post judgment proceedings will control in a federal court except to the extent that the existence of federal statutes might preempt the state law. It is indisputable that under Fla.Stat. § 56.29, in Florida courts, impled parties do not have a right to a jury trial on the issues raised in their answer to a show cause order. Ferguson v. State Exchange Bank, 264 So.2d 867, 868 (1st D.C.A.Fla. 1972). Accord, First Research Corp. v. National Indi Bank of Miami, 272 So.2d 822 (3d D.C.A.Fla.1973). It was the intent of the Florida Legislature that proceedings under the statute provide a swift, summary disposition of issues through the relief of equitable remedies. Ferguson v. State Exchange Bank, supra at 868. The proceedings are a statutory substitute for former bills in equity by creditors; but it is plain that the legislative intent was to preserve the equitable character of both the proceedings and the remedies available. Id.

It is also certain that in a federal court, the Seventh Amendment right to a jury trial in civil cases is guaranteed where there are legal questions of fact involved, Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510-11, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959); Melancon v. McKeithen, 345 F.Supp. 1025, 1042 (E.D.La.1972), aff’d sub nom. Hill v. McKeithen, 409 U.S. 943, 93 S.Ct. 289, 34 L.Ed.2d 214 (1972); Mayes v. Ellis, 409 U.S. 943, 93 S.Ct. 289, 34 L.Ed.2d 214 (1972), and Davis v. Edwards, 409 U.S. 1098, 93 S.Ct. 908, 34 L.Ed.2d 679 (1973). Even if the predominant character of the action is equitable, so long as there are any legal issues of fact, they must be submitted to a jury first, in order to preserve the Seventh Amendment right to civil jury trial. Curtis v. Loether, 415 U.S. 189, 195 n.10, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974); Ross v. Bernhard, 396 U.S. 531, 538, 539, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970); Dairy Queen, Inc. v. Wood, 369 U.S. 469, 470 and n.8, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962). Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959); Hyde Properties v. McCoy, 507 F.2d 301, 303 n.1 (6th Cir.1974). The mere fact that the procedural form that brings the parties before the Court was once regarded as a suit in equity no longer determines the right to a jury trial under the Seventh Amendment. Ross v. Bernhard, 396 U.S. 531, 542 n.15, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970). Legislative enactment of new causes of action, or of those that were formerly brought only in equity, are now within the scope of cases at law, and entitled to jury trials, if the statutory action also provides a remedy at law. Curtis v. Loether, 415 U.S. 189, 193, 194, 94 S.Ct. 1005, 39 L.Ed.2d 260 (1974). The touchstone for equity has always been the lack of an adequate legal remedy. Dairy Queen, Inc. v. Wood, 369 U.S. 469, 478, 82 S.Ct. 894, 8 L.Ed.2d 44 [467]*467(1962); Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506-10, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959). Hence, the scope of equity is inversely related to the scope of available remedies at law: as the provision of legal remedies expands the jurisdiction of actions at law, it correlatively reduces the necessity for equitable remedies and decreases the scope of equity jurisdiction. Ross v. Bernhard, 396 U.S. 531, 540, 90 S.Ct. 733, 24 L.Ed.2d 729 (1970); Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 509-10, 79 S.Ct. 948, 3 L.Ed.2d 988 (1959). The line between law and equity is therefore not only not sharp and distinct, Hyde Properties v. McCoy, 507 F.2d 301, 304 (6th Cir.1974); Melancon v. McKeithen, 345 F.Supp. 1025, 1041 (E.D.La.1972), aff’d sub nom. Hill v. McKeithen, 409 U.S. 943, 93 S.Ct. 289, 34 L.Ed.2d 214 (1972); Mayes v. Ellis, 409 U.S. 943, 93 S.Ct. 289, 34 L.Ed.2d 214 (1972), and Davis v. Edwards, 409 U.S. 1098, 93 S.Ct. 908, 34 L.Ed.2d 679 (1973), it is variable and changing.

Although federal courts are Erie bound to follow state substantive law in diversity actions, Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1933), the determination whether a particular proceeding under state law presents legal issues of fact for which the Seventh Amendment guarantees the right to jury trial, or equitable issues for which there is no right to jury trial, is controlled by, and based on, federal law. Simler v. Conner, 372 U.S. 221, 222, 83 S.Ct.

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Mission Bay Campland, Inc. v. Sumner Financial Corp., 72 F.R.D. 464, 1976 U.S. Dist. LEXIS 12522 (M.D. Fla. 1976).

72 F.R.D. 464 (Mission Bay Campland, Inc. v. Sumner Financial Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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