Diduck v. Kaszycki & Sons Contractors, Inc.

• Decision Date: 14 May 1990
• Docket Number: No. 83 Civ. 6346 (CES).,83 Civ. 6346 (CES).
• Citation: 737 F. Supp. 808
• Parties: Harry J. DIDUCK, individually and as a participant in the Local 95 Insurance Trust Fund and the Local 95 Pension Fund, and on behalf of all other persons who are, will be, or have at any time since January 1, 1980 been participants or beneficiaries in the Funds, similarly situated, Plaintiff, v. KASZYCKI & SONS CONTRACTORS, INC.; William Kaszycki; John Senyshyn; Trump-Equitable Fifth Avenue Company; Trump Organization, Inc.; Donald J. Trump d/b/a The Trump Organization; the Equitable Life Assurance Society of the United States and the Trustees of the House Wreckers Union Local 95 Insurance Trust Fund and of the House Wreckers Union Local 95 Pension Fund, Defendants.
• Court: U.S. District Court — Southern District of New York

737 F. Supp. 808

Harry J. DIDUCK, individually and as a participant in the Local 95 Insurance Trust Fund and the Local 95 Pension Fund, and on behalf of all other persons who are, will be, or have at any time since January 1, 1980 been participants or beneficiaries in the Funds, similarly situated, Plaintiff, v. KASZYCKI & SONS CONTRACTORS, INC.; William Kaszycki; John Senyshyn; Trump-Equitable Fifth Avenue Company; Trump Organization, Inc.; Donald J. Trump d/b/a The Trump Organization; the Equitable Life Assurance Society of the United States and the Trustees of the House Wreckers Union Local 95 Insurance Trust Fund and of the House Wreckers Union Local 95 Pension Fund, Defendants.

No. 83 Civ. 6346 (CES).

United States District Court, S.D. New York.

April 13, 1990.

On Motion to Strike Jury Demand May 14, 1990.

Hall & Sloan by Wendy Sloan, New York City, for plaintiff.

Mait, Wang & Simmons by Robert Wange, New York City, for defendant Senyshyn.

Shea & Gould by Fran M. Jacobs, New York City, for defendants Trump, et al.

Lambert & Weiss by Kenneth L. Aron, New York City for trustees.

ORDER

STEWART, District Judge:

In our Memorandum Decision of March 28, 1990 (the "March 28th Decision"), 737 F.Supp. 792 familiarity with which is assumed, we dismissed all causes of action against the Trump defendants alleged in the first amended complaint. However, we allowed plaintiffs to amend the first amended complaint to add the Trump defendants to the sixth cause of action alleging the Trump defendants' participation in defendant John Senyshyn's breach of fiduciary duty.¹ The liability imposed by section 409(a) of ERISA, 29 U.S.C. § 1109(a), is, inter alia, for a fiduciary to "make good .. any losses to the plan resulting from each ... breach of fiduciary duty."

By letter, Milton Gould, counsel to the Trump defendants, requests permission to strike the jury demand in plaintiff's second amended complaint, and an adjournment of the trial date to allow the Trump defendants to take discovery with respect to the sixth cause of action.

The Second Circuit has stated that jury trials are unavailable under ERISA when equitable relief or restitution is sought from pension fund trustees. Katsaros v. Cody, 744 F.2d 270, 278 (2d Cir.1984). Counsel for plaintiffs, Wendy Sloan, characterizes the relief sought by the sixth cause of action as "damages immediately and unconditionally payable, that would have been paid but for the wrongs complained of." April 12, 1990 Letter of Wendy Sloan. Obviously, the right to a jury trial depends upon how the relief is characterized.

This court has tried to strike a balance between allowing the parties the fullest opportunity to present their arguments and expediting the trial of this action. We are reluctant to grant further adjournments. However, the Trump defendants have raised an important and valid issue, one which we believe deserves a fuller exposition by the parties and consideration by this court. Since permitting the Trump defendants to make their motion to strike will not, we believe, cause a significant delay in the trial date we grant them leave to make their motion to strike the jury demand.

To that end we order that the Trump defendants serve and file their motion by April 23, 1990 to be returnable on May 9, 1990. Any opposition papers are to be served and filed no later than May 2, 1990, with any reply served and filed no later than May 7, 1990. To accommodate this motion we must move back the trial date from April 26, 1990. We will continue to hold our conference scheduled for April 24, 1990 to discuss how this court sees the parameters of the case and fix a new trial date, hopefully not too far off in the future. Finally, although this court has been previously lenient with regard to extensions, we are disinclined to grant any for this motion so that any new trial date is not threatened.

With regard to the Trump defendants' request for more time in which to conduct further discovery, we suggest that in the additional time granted by this Order, they conduct with all due speed any further discovery they deem necessary. At our April 24, 1990 conference we will also take up any further requests for discovery.²

SO ORDERED.

ON MOTION TO STRIKE JURY DEMAND

In our Memorandum Decision of March 28, 1990, 737 F.Supp. 792 we, inter alia, dismissed all causes of action against the Trump defendants, the third and fourth causes of action against defendant John Senyshyn, granted plaintiffs' motion to add the Trump defendants to the sixth cause of action alleging their participation in a breach of fiduciary duty imposed upon Senyshyn by section 404 of ERISA, 29 U.S.C. § 1104, and granted plaintiffs' motion to certify a class.¹ As there is only one cause of action left for trial, the breach of fiduciary duty claim, the Trump defendants now move pursuant to Fed.R.Civ.P. 39(a)(2) to strike the jury demand from the second amended complaint.²

As this action has been the subject of numerous written decisions, the factual background will not be reiterated. Familiarity with all relevant background is assumed.

Discussion

There is no express statutory right to a jury trial under ERISA and the legislative history provides no indication that Congress intended such a right. See Wardle v. Central States, Southeast and Southwest Areas Pension Fund, 627 F.2d 820, 828-29 (7th Cir.1980), cert. denied, 449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981). The Second Circuit has expressly stated that "there is no right to a jury trial of ERISA actions against pension fund trustees seeking the equitable remedy of restitution." Katsaros v. Cody, 744 F.2d 270, 278 (2d Cir.), cert. denied, 469 U.S. 1072, 105 S.Ct. 565, 83 L.Ed.2d 506 (1984). Therefore, whether plaintiffs are entitled to a jury trial on the remaining claim depends on a determination of the nature of the action, and more importantly, the nature of the relief requested. Cf. Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, ___ U.S. ___, 110 S.Ct. 1339, 1345, 108 L.Ed.2d 519 (1990) (right to jury trial is dependent on analysis of issues and whether nature of relief sought is equitable or legal, the latter determination being most important); Local No. 391, ___ U.S. at ___, 110 S.Ct. at 1350 (Brennan, J., concurring) (Seventh Amendment questions should be decided on basis of the relief sought); Tull v. United States, 481 U.S. 412, 417-421, 107 S.Ct. 1831, 1835-1837, 95 L.Ed.2d 365 (1987) (in analysis of whether statutory action requires jury trial court must examine nature of action and remedy sought with relief sought the "more important" inquiry).

In our Memorandum Decision of March 28, 1990 we held that plaintiff Harry J. Diduck had individual standing to pursue the sixth claim for relief pursuant to section 502(a)(2) of the Employees' Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(2) which allows a plan beneficiary or participant to bring a civil action for appropriate relief under section 409 of ERISA, 29 U.S.C. § 1109.

Section 409 requires that a fiduciary shall be personally liable "to make good ... any losses to the plan resulting from a breach of the fiduciary's duty, and to restore to to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary." Further, section 409 allows the imposition on a fiduciary found to have breached his or her duties "other equitable or remedial relief as the court may deem appropriate." Plaintiffs characterize the relief afforded by section 409 as "damages" whereas the Trump defendants characterize this relief as "restitution."³

We begin by noting that the majority view of circuit courts considering the issue have decided that ERISA does not permit jury trials. See, e.g., Turner v. CF & I Steel Corp., 770 F.2d 43, 46-47 (3rd Cir. 1985) (no jury trials under ERISA sections 502(a)(1)(B) and (a)(3)), cert. denied, 474 U.S. 1058, 106 S.Ct. 800, 88 L.Ed.2d 776 (1986); Berry v. Ciba-Geigy Corp., 761 F.2d 1003, 1006-7 (4th Cir.1985) (proceedings to determine rights under employer benefit plan are equitable and no trial by jury obtains); Blau v. Del Monte Corp., 748 F.2d 1348, 1357 (9th Cir.1984) (no right to jury trial in ERISA actions), cert. denied, 474 U.S. 865, 106 S.Ct. 183, 88 L.Ed.2d 152 (1985); In re Vorpahl, 695 F.2d 318, 322 (8th Cir.1982) (no jury trials under ERISA section 502(a)); Calamia v. Spivey, 632 F.2d 1235, 1237 (5th Cir.1980) (ERISA does not entitle appellant to jury trial); Wardle v. Central States, Southeast and Southwest Areas Pension Fund, 627 F.2d 820, 830 (7th Cir.1980) (no jury trials under ERISA section 502(a)(1)(B) and (a)(3)), cert. denied, 449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981).⁴

The Second Circuit, in Katsaros, while concluding there was no right to a jury trial under ERISA for restitution, left open the question of whether claims under ERISA for recovery of benefits and damages could be tried before a jury. Katsaros, 744 F.2d at 278-79.⁵

The majority view of district courts in this circuit, at least with regard to claims for breaches of fiduciary duty, have held that no right to a jury trial exists under ERISA. See, e.g., Brock v. Group Legal Admr., Inc., 702 F.Supp. 475, 476 (S.D.N.Y. 1989); Gardella v. Mutual Life Ins. Co., 707 F.Supp. 627, 628-29 (D.Conn.1988); Nobile, supra, 611 F.Supp. at 728.⁶ Moreover, the majority view of other district courts construing the provisions of sections 409 and 502(a)(2) have concluded that no right to a jury trial exists under those sections. See, e.g., Dasler v. E.F. Hutton & Co., 694 F.Supp. 624, 627 n. 4 (D.Minn. 1988); Smith v. ABS Industries, Inc., 653 F.Supp. 94, 98-99 (N.D.Ohio 1986); Bigger v. American Commercial Lines, Inc., 652 F.Supp. 123, 128 (W.D.Mo.1986) (no jury trials under ERISA section 502(a)); Hollenbeck v. Falstaff Brewing Corp., 605 F.Supp. 421, 431 (E.D.Mo.1984), aff'd, 780 F.2d 20 (8th Cir.1985); Kahnke v. Herter, 579 F.Supp....