Cerrito v. Kovitch
| Decision Date | 13 September 1984 |
| Docket Number | No. 63150,63150 |
| Citation | 457 So.2d 1021 |
| Parties | Edward CERRITO and Joan R. Cerrito, Petitioners, v. Jacqueline R. KOVITCH, Louis Kovitch, and Ed-Jo Corporation of Florida, Inc., Respondents. |
| Court | Florida Supreme Court |
Harvey Kaufman of Kenney, Boswell & Kaufman, Palm Beach, for petitioners.
Richard W. Wasserman, Miami Beach, for respondents.
This case is before us to review a decision of a district court of appeal, Cerrito v. Kovitch, 423 So.2d 1008 (Fla. 4th DCA 1982), which expressly conflicts with a decision of another district court of appeal. We have jurisdiction. Art. V, § 3(b)(3), Fla. Const.
The petitioners Edward and Joan Cerrito applied to a mortgage broker for a loan. The broker advised them to establish a corporation to act as the formal borrower because the higher permissible interest rate might better attract a lender. The broker then found an interested lender, Jacqueline Kovitch. Kovitch lent $25,000 to Ed-Jo Corporation of Florida, and the Cerritos both signed as personal guarantors. They also executed a mortgage on their home as security for the loan.
Eventually the Cerritos defaulted and Kovitch brought this action to foreclose the mortgage. The Cerritos filed a counterclaim on the ground that the loan was usurious and demanded a jury trial on their claim. The trial court refused to allow a jury trial, struck the counterclaim's prayer for damages, and rendered judgment of foreclosure.
On appeal the Cerritos argued that the usury statute creates a right of action for damages activating the constitutional right of jury trial and also challenged the trial court's ruling that there was no ground to deny foreclosure under the usury law. They relied upon Smith v. Barnett Bank, 350 So.2d 358 (Fla. 1st DCA 1977), which held that a cause of action for money damages, even though based on modern legislation rather than the common law, carries with it the right to a jury trial.
The district court of appeal rejected the argument that the usury law creates a right of action for money damages; found that usury is an affirmative defense and creates no right that may properly be presented by counterclaim; and held that foreclosure was proper.
The sole issue we shall consider is whether a jury trial is constitutionally guaranteed in a mortgage foreclosure proceeding when usury is raised in a counterclaim. The right to a jury trial, in the absence of specific statutory authorization, depends upon whether the nature of the cause of action is legal or equitable. However, where both legal and equitable issues are presented in a single case "only under the most imperative circumstances ... can the right to a jury trial of legal issues be lost through prior determination of equitable claims." Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510-11, 79 S.Ct. 948, 956, 957, 3 L.Ed.2d 988 (1959). In such cases the jury trial must be accorded to the person requesting it even though the legal issues are incidental to the equitable issues. Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962).
The Cerritos argue that because their usury counterclaim was for money damages, it constitutes an action at law guaranteeing them the right to a jury trial. In support of their position, they cite Pernell v. Southall Realty, 416 U.S. 363, 94 S.Ct. 1723, 40 L.Ed.2d 198 (1974), which stated that "where an action is simply ... for the recovery of a money judgment, the action is one at law." Id. at 370, 94 S.Ct. at 1727 (quoting Whitehead v. Shattuck, 138 U.S. 146, 151, 11 S.Ct. 277, 34 L.Ed. 873 (1891)).
We do not find this language to be dispositive. What is essentially an equitable cause of action cannot be transformed into a legal cause of action simply by the use of legal terminology in the complaint. See Dairy Queen, Inc. v. Wood. Not all claims for money are legal actions triable by jury as a matter of right. Swofford v. B. & W., Inc., 336 F.2d 406 (5th Cir. 1964), cert. denied, 379 U.S. 962, 85 S.Ct. 653, 13 L.Ed.2d 557 (1965).
In this case the Cerritos' counterclaim was based upon section 687.04, Florida Statutes (1981), which provides in pertinent part:
Any person, or any agent, officer, or other representative of any person, willfully violating...
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...the case in a bench trial,1 and ruled for the University. II. The Act does not in terms provide for trial by jury. See Cerrito v. Kovitch, 457 So.2d 1021, 1022 (Fla.1984). Accordingly, we ask first whether the action Ms. O'Neal brought under the Act was triable by a jury under the common la......
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