Sometimes, based on the nature of an action, plaintiffs wish to present their case to a jury and file a demand for one with the court. If the defendants oppose, they can move to strike the demand pursuant to CPLR 4101. This was the subject of a recent decision by Westchester Commercial Division Justice Linda Jamieson in Hanover v. Palazzolo, Index No. 54643/2018.
This was the second case between the parties. In the first case, presided over by Westchester Supreme Court Justice Sam Walker, Christopher Hanover sued a husband and wife, the Palazzolos, and their entity, F&M Funding, LLC, over an alleged guaranty given by the Palazzolos to Hanover concerning the sale of stock of entities that owned property in the Bronx (“Prior Action”). In that first case, Hanover won a judgment of more than $350,000.
While that case was going on, F&M filed a Confession of Judgment against Hanover for $3.2 million. Hanover always said that the Confession of Judgment was forged and Justice Walker was troubled by the evidence and testimony about it. To make matters more suspicious, an F&M employee had been arrested for improperly notarizing documents, including the Confession of Judgment.
After winning the first case, Hanover filed a new action to nullify the Confession of Judgment and for damages suffered as a result of it. In June 2019, Hanover demanded a jury trial and at the end of October 2019, Defendants moved to strike the demand pursuant to CPLR 4101(1). In the meantime, Defendants vacated the Confession of Judgment.
Justice Jamieson denied Defendants’ motion to strike the jury demand for several reasons:
First, it was not made in a reasonable period of time prior to trial.
“[A]lthough a motion to strike a jury demand ‘may be made at any time up to the opening of trial, it is preferable in the interest of orderly procedure that it be made within a reasonable period prior thereto’” (quoting A.J. Fritschy Corp. v. Chase Manhattan Bank, 36 A.D.2d 600, 600, 318 N.Y.S.2d 369, 370 (1st Dep’t 1971)).
Here, Defendants waited more than four months after Hanover filed the jury demand, and less than four weeks prior to trial, to raise the issue. In denying Defendants’ motion, Justice Jamieson held: “Defendants’ motion is not returnable until only a few days before the trial, making it exceedingly unreasonable; the parties have to prepare differently for a jury trial versus a non-jury trial.”
Second, when a plaintiff asserts both legal and equitable claims, the plaintiff is entitled to a jury trial where the crux of the action sounds in tort law.
Defendants argued that Plaintiff waived his right to a jury by combining legal and equitable claims. In response, Plaintiff argued that: (i) his declaratory judgment claims are “at the heart of the claims for monetary damages for Defendants’ actions over the course of seven (7) years in maintaining and insisting on the veracity of the” Confession of Judgment; and (ii) “simply declaring the [Confession of Judgment] to be invalid would not make the [him] whole.”
Justice Jamieson agreed with Plaintiff, finding that his arguments are “in line with settled Second Department caselaw,” holding that even if some claims are equitable in nature, where “the gravamen of the action sounds in … tort law rather than equity … [s]uch causes of action are eligible for jury trial …” (quoting Harris v. Trust of Bank New York, 224 A.D.2d 790, 791, 637 N.Y.S.2d 527, 528 (2d Dep’t 1996)).
Third, Justice Jamieson explained that, if Defendants had vacated the Confession of Judgment before Plaintiff sued them, Plaintiff would not have needed the declaratory judgment claims, but still would have been able to assert his claims for damages. “Under those circumstances,” the Court held, “there would be no doubt that plaintiff would have been entitled to a jury trial.” “While the Court cannot speculate as to what prompted defendants to vacate the Confession of Judgment at this juncture,” Justice Jamieson held, “the Court will also not allow defendants to manipulate this action or the Court.”
Takeaway: If a party wants to strike a jury demand, it should do so promptly after the demand is filed. It should also refrain from employing tactics that, like here, could be perceived as an attempt to manipulate the Court.