Reefer Express Lines v. Arkwright-Boston Manufacturers Insurance

87 F.R.D. 133, 30 Fed. R. Serv. 2d 909, 1980 U.S. Dist. LEXIS 9214
CourtDistrict Court, S.D. New York
DecidedJuly 7, 1980
DocketNo. 75 Civ. 6515 (WK)
StatusPublished
Cited by8 cases

This text of 87 F.R.D. 133 (Reefer Express Lines v. Arkwright-Boston Manufacturers Insurance) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reefer Express Lines v. Arkwright-Boston Manufacturers Insurance, 87 F.R.D. 133, 30 Fed. R. Serv. 2d 909, 1980 U.S. Dist. LEXIS 9214 (S.D.N.Y. 1980).

Opinion

MEMORANDUM AND ORDER

WHITMAN KNAPP, District Judge.

On June 14, 1974, in the course of a trans-Atlantic voyage from Dunkirk, France to Puerto Cabello, Venezuela, a fire broke out on board the vessel SATSUMA-RU 58, which vessel had been chartered in 1973 by its owner, Satsumaru Kayun Co. Ltd. (“Satsumaru”), a Japanese company, to plaintiff for a period of from one to seven years. As a consequence of said fire, Satsu-[134]*134maru demanded damages from plaintiff and initiated an arbitration proceeding in Tokyo. According to the complaint in this action, plaintiff, claiming that the SATSU-MARU 58 was covered by a particular marine insurance policy which had been issued by defendant insurance companies, requested that defendants acknowledge their liability under said policy and assume the defense in the Tokyo arbitration proceeding. However, defendants allegedly refused to do so. Thereupon, plaintiff commenced the instant law suit as an action for a declaratory judgment by this court that defendants were required to indemnify plaintiff for any liability it had incurred as the result of the fire, and to assume the defense in the arbitration proceeding.

Plaintiff is a foreign corporation incorporated under the laws of Bermuda. Defendants are insurance companies incorporated respectively in Massachusetts, Minnesota and Wisconsin, and all three maintain offices for the regular conduct of business in New York City within this district. According to paragraph 5 of the complaint, “[tjhis is a civil case of admiralty and maritime jurisdiction within the meaning of 28 U.S.C. § 1333, and this Court has jurisdiction pursuant to 28 U.S.C. and pursuant to 28 U.S.C. § 1332(a) [i. e., diversity].” Neither plaintiff nor defendants demanded a jury trial.

Following the taking of a single deposition, the action at bar was placed on this court’s suspense calendar pending the resolution of the arbitration proceeding. Following several arbitration hearings, in which — according to plaintiff — defendants refused to participate and for which plaintiff engaged legal counsel in both New York and Tokyo, plaintiff and Satsumaru settled the arbitration in June of 1979.

Plaintiff now moves pursuant to Rule 15(a) of the Federal Rules of Civil Procedure for leave to amend its complaint by converting the declaratory judgment action into one for money damages in the amount of $358,030.22, plus interest, costs and disbursements “[a]s a result of the acts and omissions of the defendants in disclaiming liability and refusing to indemnify plaintiff and undertake legal representation of plaintiff in the arbitration in Tokyo.” Plaintiff also moves pursuant to Rule 39(b) for a jury trial of all issues raised in the amended complaint. Paragraph 5 of the proposed amended complaint asserts diversity as the exclusive basis for jurisdiction.

“It is settled that the grant of leave to amend the pleadings pursuant to Rule 15(a) is within the discretion of the trial court.” Zenith Radio Corp. v. Hazeltine Research, Inc. (1971) 401 U.S. 321, 330, 91 S.Ct. 795, 802, 28 L.Ed.2d 77. “Rule 15(a) declares that leave to amend ‘shall be freely given when justice so requires’; this mandate is to be heeded.” Foman v. Davis (1962) 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222. See also Gillespie v. U.S. Steel Corp. (1964) 379 U.S. 148,158, 85 S.Ct. 308, 314,13 L.Ed.2d 199. We have no reason to suspect that there has been any “undue delay, bad faith or dilatory motive on the part of the movant”, or that there might be “undue prejudice to the opposing party by virtue of allowance of the amendment.” Foman v. Davis, supra, 371 U.S. at 182, 83 S.Ct. at 230. Cf. Zenith Radio Corp. v. Hazeltine Research, Inc., supra, 401 U.S. at 330-31, 91 S.Ct. at 802. Furthermore, defendants have not opposed the motion to amend except insofar as it relates to and includes the demand for a jury trial. Consequently, the motion to amend the complaint is granted.

However, we are constrained to deny plaintiff’s motion for a jury trial except as to damages if liability should be established, on the ground that it waived such trial as to all issues except damages by not timely demanding it upon commencing this action.

Rule 38(b) provides:

“Any party may demand a trial by jury of any issue triable of right by a jury by serving upon the other parties a demand therefor in writing at any time after the commencement of the action and not later than 10 days after the service of the last pleading directed to such issue.”

Pursuant to Rule 38(d), “[t]he failure of a party to serve a demand as required by this rule . . . constitutes a waiver by him of trial by jury.”

[135]*135There is no question that plaintiff could have demanded a jury trial as of right when it initiated this action. Paragraph 5 of the original complaint asserts that “[t]his is a civil case of admiralty and maritime jurisdiction”, but it also sets forth diversity pursuant to 28 U.S.C. § 1332(a) as an alternate jurisdictional ground. Admittedly, there is no right to a jury trial in cases of admiralty jurisdiction. In essence, however, this action — as opposed to the Tokyo arbitration between plaintiff and Satsumaru- — is not rooted in maritime law but rather is contractual in nature, depending for its resolution on whether or not the SATSUMARU 58 during the voyage in question was covered by a particular insurance policy, and on a determination of defendants’ obligations, if any, to plaintiff under the terms of such policy. Consequently, plaintiff in its complaint could have asserted diversity as the exclusive jurisdictional basis for the action —which, indeed, is precisely what it does in paragraph 5 of the proposed amended complaint.

Furthermore, “it is quite clear that jury trial may be had as of right in a declaratory action such as this which at bottom concerns the duty of a contract-obli-gor to pay money on the fulfillment of a condition.” (American) Lumbermens Mut. Casualty Co. of Illinois v. Timms & Howard (2d Cir.1939) 108 F.2d 497, 499. In fact, Rule 57 of the Federal Rules of Civil Procedure specifically provides that “[t]he procedure for obtaining a declaratory judgment pursuant to Title 28 U.S.C. § 2201

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Bluebook (online)
87 F.R.D. 133, 30 Fed. R. Serv. 2d 909, 1980 U.S. Dist. LEXIS 9214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reefer-express-lines-v-arkwright-boston-manufacturers-insurance-nysd-1980.