Blogs

Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: January 14, 2021

Plaintiff Permanently Waived Right to Jury Trial By Pleading Both Legal and Equitable Claims

On December 30, 2020, the Second Department issued a decision in Fakiris v. Gusmar Enters., LLC, 2020 NY Slip Op. 08039, holding that a plaintiff waived its right to a jury trial by pleading both legal and equitable claims, explaining:

The deliberate joinder of claims for legal and equitable relief arising out of the same transaction amounts to a waiver of the right to demand a jury trial. Once the right to a jury trial has been intentionally lost by joining legal and equitable claims, any subsequent dismissal, settlement or withdrawal of the equitable claim(s) will not revive the right to trial by jury. However, where a plaintiff alleges facts upon which monetary damages alone will afford full relief, inclusion of a demand for equitable relief in the complaint’s prayer for relief will not constitute a waiver of the right to a jury trial.

Here, we agree with the Supreme Court’s determination that the plaintiff waived her right to a jury trial by joining legal and equitable causes of action arising from the same transaction and seeking both legal and equitable relief, including causes of action for an accounting and to remove the defendant Kostas Fakiris as a managing member of the defendant Gusmar Enterprises, LLC, and a shareholder derivative cause of action alleging breach of fiduciary duty.

Moreover, contrary to the plaintiff’s contention, where equitable causes of action are at issue, a motion to strike a demand for a jury trial may be made at anytime up to the opening of trial.

Accordingly, we agree with the Supreme Court’s determination granting the motion of the defendants Gusmar Enterprises, LLC, Kostas Fakiris, Summit Waterproofing & Restoration Corp., and Summit Development Corp. to strike the plaintiff’s demand for a jury trial.

(Internal quotations and citations omitted).

As this decision shows, the decision of what claims to bring at the outset of an action will have an irrevocable impact on whether there is a right to a jury trial. Asserting even a single equitable claim against one defendant could irrevocably waive a plaintiff’s right to a jury trial on all of its claims against all defendants unless, as this decision discusses, such claims are merely incidental. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client is considering whether to bring equitable and legal claims in a single action or if you are defending claims where legal and equitable claims have been asserted in a single complaint.

Click here to subscribe to this or another of Schlam Stone & Dolan’s blogs.

View posts