Rosen v. Dick

83 F.R.D. 540, 27 Fed. R. Serv. 2d 1098, 1979 U.S. Dist. LEXIS 11452
CourtDistrict Court, S.D. New York
DecidedJune 26, 1979
DocketNo. 73 Civ. 2388 (CMM)
StatusPublished
Cited by5 cases

This text of 83 F.R.D. 540 (Rosen v. Dick) 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
Rosen v. Dick, 83 F.R.D. 540, 27 Fed. R. Serv. 2d 1098, 1979 U.S. Dist. LEXIS 11452 (S.D.N.Y. 1979).

Opinion

METZNER, District Judge:

Plaintiff Irving M. Rosen, as Trustee in Reorganization of Bermec Corporation (Bermec), moves pursuant to Rule 38(a) and (d), Fed.R.Civ.P., for an order striking the jury demand of defendant Meckler, or, in the alternative, directing that plaintiff’s claims against defendant Arthur Andersen & Co. (Andersen) be tried separately without a jury.

This action arises out of the financial problems of Bermec and their roots in the financial problems of Black Watch Farms, Inc., which in turn arose out of the fraudulent activities of Jack R. Dick, now deceased. The Trustee has sued Dick’s estate, the directors of Bermec, and Bermec’s lawyers and accountants. Some of plaintiff’s claims have been settled, and the remaining parties seem to fall into three groups: Andersen, an accounting firm, some inside directors, and the outside directors. Plaintiff has undertaken to defend the settling defendants against cross claims that have been asserted by other defendants.

[542]*542This is quite an old case, having been held in abeyance pending the disposition before Judge Werker of what may be called a companion case, State Mutual Life Assurance Company of America v. Arthur Andersen & Co., 71 Civ. 4036. That case went through a seven-month jury trial and 21 days of deliberation before the jury disposed of all the issues except those between the two principal parties—the plaintiff and Andersen. The jury could not agree on the disposition of those issues. After the question was finally decided as to whether this retrial in that case would be by jury, 581 F.2d 1045 (2d Cir. 1978), this court inquired of the parties here as to whether this case was to be tried to the court or to a jury. It appears that most of the parties thought that it was to be tried to the court until it was determined that one of the parties had filed a demand for a jury.

As far as the parties still remaining in this litigation are concerned, the original complaint did not name Arthur Andersen & Company or Joseph Bonura as parties defendant. The complaint did not demand a jury. Of the original defendants still in the case, only Herman Meckler demanded a jury in his answer which was served only on the plaintiff. This was the only jury demand ever filed in the course of this litigation. Subsequently, a second amended complaint was served without a jury demand and it added Andersen and Bonura as parties defendant. Neither of these defendants demanded a jury in their answers.

The law is clear that under the circumstances here Andersen is not entitled to a jury trial on any issues that are not covered by Meckler’s jury demand.

“If one party has made a demand within the above time, then the other parties may rely upon the demand as to all the issues embraced within it.” (Emphasis supplied.)

J. W. Moore, Federal Practice ¶ 38.40, p. 328 (2d ed. 1978).

The quotation from Moore has been followed in Plechner v. Widener College, Inc., 569 F.2d 1250 (3d Cir. 1977), in which the court stated that an intervenor could rely on the record that a jury demand had been made and he was not required to repeat the demand on “counts which were essentially the same as those asserted by Plechner.” 569 F.2d at 1256 n. 3.

A similar ruling is found in Collins v. Government of Virgin Islands, 366 F.2d 279 (3d Cir. 1966), where the court stated at 284:

“These principles lead us to conclude that the better rule is that a defendant can rely on the jury demand of a co-defendant to the extent of the issues embraced by that demand.”

In DeGioia v. United States Lines Company, 304 F.2d 421 (2d Cir. 1962), the Court of Appeals for this circuit discussed the general principles applicable to the right of a co-defendant to a nonjury trial because of the failure of a defendant to serve it with a copy of the jury demand that was served with the latter’s answer on the plaintiff. (Actually, the case discussed the problem in relation to third party defendants, but I have changed the nomenclature for purposes of simplicity.) The implication of that decision is that failure of a defendant to serve a co-defendant with a jury demand, absent special circumstances, would allow the nondemanding defendant to have a bench trial. The court, however, found special circumstances and sustained the action of the trial court in submitting the co-defendant’s claim to the jury. Here we are concerned with the co-defendants seeking to rely on the jury demand of another defendant served solely on the plaintiff. We do not have to go as far as the Court of Appeals did in its opinion. Suffice it to say that no special circumstances exist to change what appears to be the clear rule that Andersen is not entitled to a jury trial in this case.

Meckler’s jury demand could be effectively relied on by his original co-defendants “to the extent of the issues embraced by that demand.” Collins v. Government of Virgin Islands, supra. So might Andersen if the issues were similar.

[543]*543I am of the opinion, however, that the issues between plaintiff and Andersen are not the same as those between plaintiff and Meckler except for Paragraph Twenty-eight of the complaint. Paragraph Twenty-eight charges Andersen with aiding and abetting the actions of Meckler and the directors. It is separate from the main claims asserted by plaintiff against Andersen, and plaintiff seeks to discontinue this claim, to which Andersen agrees.

Andersen is being sued for damages alleged to flow from the investigative report it furnished Bermec prior to the acquisition of Black Watch. It is also being sued for damages on the basis of the audited statement subsequently issued concerning Black Watch. The action against Meckler and the other directors is not the subject of any pre-acquisition claim asserted by the plaintiff. Meckler is charged with failure to report his discovery of defalcations by Dick to Bermec’s directors prior to Bermec’s purchase of the limited partners’ interests. He is also being sued for attempting to release claims Bermec had against Empire National Bank.

Although Andersen is not entitled to a jury trial as of right, the question remains as to whether the claims asserted against it should be heard along with the claims against the other defendants which are triable to the jury. If there is a joint trial the court could request an advisory verdict, Fed.R.Civ.P. 39(c), or it could decide the non jury issues itself.

The issues between these two principal parties are of such complexity, requiring a tremendously lengthy trial, that this court would have stricken an otherwise proper jury demand covering all parties under the developing theory that such claims are not protected by the Seventh Amendment to the Constitution.

The preliminary estimates indicate that this trial would last four months. The court, however, is mindful of the seven months necessary to try the State Mutual case before an experienced and able trial judge, which on its face seems to have had fewer issues to be decided.

In Ross v. Bernhard,

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83 F.R.D. 540, 27 Fed. R. Serv. 2d 1098, 1979 U.S. Dist. LEXIS 11452, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rosen-v-dick-nysd-1979.