Forrest v. Fuchs

• Decision Date: 09 October 1984
• Citation: 481 N.Y.S.2d 250,126 Misc.2d 8
• Court: New York Supreme Court
• Parties: Kenneth FORREST, Plaintiff, v. Spencer FUCHS and Fuchs Sugars & Syrups, Inc., Defendants.

Page 250

481 N.Y.S.2d 250

126 Misc.2d 8

Kenneth FORREST, Plaintiff, v. Spencer FUCHS and Fuchs Sugars & Syrups, Inc., Defendants.

Supreme Court, Special Term,

Nassau County, Part I.

Oct. 9, 1984.

Marvin Usdin, Massapequa Park, for plaintiff.

Sperry, Weinberg, Wels, Waldman & Rubenstein, New York City, for defendants.

ELI WAGER, Justice.

In an action on a contract, is a plaintiff who has joined legal and equitable claims entitled to a jury trial of counterclaims seeking recovery of overpayments allegedly made pursuant to the same contract? This is the issue raised on this motion by defendants for an order striking the plaintiff's jury demand.

In his first two causes of action, plaintiff seeks money damages, in the third he seeks an accounting and in the fourth he seeks reformation. All four causes of action relate to one agreement, a copy of which has not been furnished the court. From a perusal of the pleadings it appears that the agreement was multi-faceted, involving a promise by the individual defendant to pay a given sum of money to plaintiff should plaintiff not receive that amount under the will of a named decedent and containing various provisions for payments to plaintiff by either the individual or corporate defendant, including payment of commissions earned from the sale of sugar and sugar products to customers formerly serviced by the plaintiff while he was engaged in the sugar brokerage business. Plaintiff seeks to recover from defendants the sums the decedent failed to bequeath to him in her will, as well as the other sums and commissions promised. In the cause of action for reformation he asserts that the agreement as written is incorrect in that it provided that all payments to him were to cease "any or all of the sugar refiners change their method of distribution, sell directly to the accounts listed on the attached schedule, or eliminate the services of the parties hereto as brokers * * *." He seeks to delete the words "any or" from the phrase "any or all," asserting that defendants have advised him that, because one of the sugar refiners has changed its method of distribution, no further payments to him will be made.

Defendants have interposed two counterclaims seeking to recover payments "inadvertently" made to plaintiff, after the change in distribution by the refiner occurred, in reliance on the phrase "any or all."

Plaintiff does not dispute the defendants' assertion that he is not entitled to a jury trial of his action in chief upon the ground he has joined legal and equitable claims relating to the same transaction (see e.g., Sepinski v. Bergstol, 81 A.D.2d 860, 438 N.Y.S.2d 870; Gabbay v. Ratchik, 60 A.D.2d 593, 400 N.Y.S.2d 20; Heller v. Hacken, 40 A.D.2d 1012, 338 N.Y.S.2d 943), apparently conceding that the multi-faceted agreement constitutes one "transaction." Conceding in addition that he would not be entitled to a jury trial of an equitable counterclaim (which must pursuant to statutory mandate be tried by the court), plaintiff urges that the instant counterclaim is "legal in nature" and that, contrary to defendants' assertion, he cannot be deemed to have "waived" a jury trial as to it, citing CPLR 4102(c). Thus, two issues are presented: is defendants' counterclaim legal or equitable and, if legal, has plaintiff waived his rights?

The Counterclaim

The obligation to return money received under mistake is one imposed by law (44 N.Y.Jur., Payment, § 96) and generally the form of the action to recover such money is one for money had and received (Anno., 40 A.L.R.2d 997, 1000; New York Life Ins. Co. v. Guttenplan, 30 N.Y.S.2d 430, affd. 259 App.Div. 1004, 20 N.Y.S.2d 724, affd. 284 N.Y. 805, 31 N.E.2d 925; Hoyt v. Wright, 237 App.Div. 124, 261 N.Y.S. 131; Cukierski v. Standard Milling, 60 Misc.2d 690, 303 N.Y.S.2d 586; see also Roberts v. Ely, 113 N.Y. 128, 20 N.E. 606; Friar v. Vanguard Holding, 78 A.D.2d 83, 434 N.Y.S.2d 698), at least where the transaction is executed and recovery is sought of money paid under a contract (see Schank v. Schuchman, 212 N.Y. 352, 106 N.E. 127). An action for money had and received, although governed by equitable principles, is an action at law (Roberts v. Ely, supra; Schank v. Schuchman, supra; Rothrock Syosset v. Kreutzer, 2 A.D.2d 777, 154 N.Y.S.2d 816; Newman v. Guaranty Trust Company of New York, 243 App.Div. 633, 276 N.Y.S. 873; Hoyt v. Wright, supra ) traditionally triable by a jury (Susquehanna S.S. Co. v. Andersen & Co., 239 N.Y. 285, 146 N.E. 381; Tishman Realty v. Schmitt, 69 Misc.2d 584, 330 N.Y.S.2d 174) at least to the extent that an issue of fact exists as to whether a mistake was made and whether facts exist such as to entitle the payor to recover (see Whiting v. City Bank of Rochester, 77 N.Y. 363; Levy v. Terwilliger, 10 Daly 194). Such issues are for the jury where different conclusions may reasonably be drawn from the evidence, but for the court where that is not the case (Whiting v. City Bank of Rochester, supra).

In the instant case, it appears that the only fact question relating to mistake, as put in issue by the complaint, the general denials and counterclaim in the answer and the denials in plaintiff's reply, is whether the contract expresses the intent of the parties. Determination of that issue will resolve most of the issues in dispute regardless of whether it is determined by the court in the action in chief or by a jury on the counterclaim.

Ordinarily, a trial of a legal counterclaim interposed in an equitable action will not be ordered prior to a trial of the action in chief where the same issues of fact are involved (Maag v. Maag Gear Co., 193 App.Div. 759, 184 N.Y.S. 630). On the contrary, a trial of the equitable action should precede a jury trial of a legal counterclaim, either because disposition of the equitable claim would be dispositive of the counterclaim (see The Maccabees v. Cohen, 278 App.Div. 567, 102 N.Y.S.2d 441, modfg. 100 N.Y.S.2d 994) or because the equitable action was first commenced (see Phoenix Mutual Life Insurance Company v. Conway, 15 A.D.2d 924, 225 N.Y.S.2d 532, affd. 11 N.Y.2d 367, 229 N.Y.S.2d 740, 183 N.E.2d 754). Similarly, it has been held that a trial by the court of an equitable counterclaim which may be dispositive of the entire case should precede a jury trial of a plaintiff's legal cause of action (Menado Corp. v. Indemnity Co. of No. America, 53 Misc.2d 533, 279 N.Y.S.2d 84). Nevertheless, the sequence in which issues shall be tried is a matter for the trial court's determination (CPLR 4011; Vinlis Construction Co., Inc. v. Roreck, 23 A.D.2d 895, 260 N.Y.S.2d 245) and not a matter for resolution by Special Term. Thus, the motion to strike the plaintiff's jury demand will be referred to the trial court--provided it appears that plaintiff has not waived his right to a jury trial, a matter which is appropriate for resolution here.

Waiver

CPLR 4102(c) provides, inter alia, that a party shall not be deemed to have waived the right to trial by jury of the "issues of fact arising upon a counterclaim, cross-claim or third party claim, by asserting it in an action in which there is no right to trial by jury." The section appears to apply only to the party asserting the claim and indeed has been so construed (Ripple's of Clearview v. Le Havre Associates, 111 Misc.2d 263, 443 N.Y.S.2d 824, affd. on other grounds 85 A.D.2d 660, 445 N.Y.S.2d 219). However, the Advisory Committee (on the CPLR) in its notes states that CPLR 4102(c) "insures the continuation of the former rule that both parties have a right to trial by jury" of a legal counterclaim asserted in an equitable action (see Advisory Committee Notes, N.Y.Cons.Laws Serv., Book 4I, CPLR 4102 at p. 86 see also 4 Weinstein-Korn-Miller, N.Y.Civ.Prac. p 4102.20).

The "former rule" alluded to by the cited authorities appears to be the provision in the old Civil Practice Act and Code of Civil Procedure (see Anno., 17 A.L.R.3d 1321, at 1335-1336). The former statutes were construed as providing a right to a jury trial of a legal counterclaim interposed in an equitable action to both defendants (e.g., Herb v. Metropolitan Hospital & Dispensary, 80 App.Div. 145, 80 N.Y.S. 552) and to plaintiffs (e.g., Riesenberger v. Sullivan, 1 A.D.2d 1049, 152 N.Y.S.2d 783; Voges Mfg. Co. v. New York and Queens Elec. L. & P. Co., 261 App.Div. 377, 25 N.Y.S.2d 570; ...