Kaitz v. District Court, Second Judicial Dist.

• Court: Colorado Supreme Court
• Writing for the Court: ROVIRA
• Citation: Kaitz v. District Court, Second Judicial Dist., 650 P.2d 553 (Colo. 1982)
• Decision Date: 07 September 1982
• Docket Number: No. 82SA82,82SA82
• Parties: Jerrold Alan KAITZ, Tammy Lynn Kaitz, Sheryl Ann Kaitz, and Lori Beth Kaitz, by her next friend Barbara Suson, Petitioners, v. DISTRICT COURT, SECOND JUDICIAL DISTRICT, State of Colorado, the Honorable John Brooks, Jr., Judge, Respondent.

Page 553

650 P.2d 553

Jerrold Alan KAITZ, Tammy Lynn Kaitz, Sheryl Ann Kaitz, and Lori Beth Kaitz, by her next friend Barbara Suson Petitioners, v. DISTRICT COURT, SECOND JUDICIAL DISTRICT, State of Colorado the Honorable John Brooks, Jr., Judge, Respondent.

No. 82SA82.

Supreme Court of Colorado En Banc.

Sept. 7, 1982.

Rehearing Denied Sept. 27, 1982.

Crane & Lewis, Westminster, Frances Jean Pottick, Boulder, for petitioners.

John E. Bush, Denver, for respondent.

ROVIRA, Justice.

In this original proceeding under C.A.R. 21 the petitioners seek reversal of an order of the District Court in and for the City and County of Denver granting the motion of Central Bank and Trust Company (Central Bank) to strike petitioners' request for a jury trial and claim for exemplary damages because the action was equitable in nature. We issued a rule to show cause and now, having determined that the trial court was correct, discharge the rule.

The petitioners were beneficiaries of guardianship estates created by the Denver Probate Court. Central Bank was appointed guardian for the estates. At the time the petitioners' complaint was filed in the district court three of the guardianships had terminated and three of the petitioners had received final distribution from Central Bank. The fourth guardianship was terminated and distribution made shortly after the complaint was filed. The petitioners filed suit against Central Bank alleging in their first claim that Central Bank breached its fiduciary duty to them during the period of its guardianship by negligently investing their money in violation of section 15-1-304, C.R.S.1973, (1981 Supp.) ¹ and by failing to diversify investments of their money. Petitioners claimed that as a direct and proximate result of Central Bank's breaches of fiduciary duty, they were damaged in an amount to be proved at trial.

Their second claim incorporated the allegations of the first claim and further stated that Central Bank's breach of fiduciary duty was in wanton and reckless disregard of their rights and feelings and prayed for exemplary damages pursuant to section 13-21-102, C.R.S.1973. Petitioners demanded a jury trial on all issues. Central Bank moved, pursuant to C.R.C.P. 39(a)(2), to strike petitioners' jury demand on the ground that the claims for relief asserted in the complaint were equitable in nature and petitioners were not entitled to a jury trial of such claims. It further requested judgment on the pleadings or, in the alternative, partial summary judgment dismissing the claim for exemplary damages on the ground that since the claims asserted were equitable in nature the petitioners were not entitled to exemplary damages.

The respondent trial court ruled that the suit was an action by the beneficiaries against the personal representative based upon the fiduciary's actions or failure to act during the administration of the estate, the remedy of a beneficiary or ward against the fiduciary was exclusively an equitable action, and no right to a jury trial existed in such an action. As to the claim for exemplary damages the court held that such damages were not available in equitable actions. The court granted Central Bank's motion to strike the jury demand and dismissed the claim for exemplary damages.

I.

The first issue presented is whether the petitioners are entitled to a trial by jury in an action seeking damages from their former estate guardian for negligently investing the corpus of the guardianship estate.

In Colorado there is no constitutional right to a trial by jury in a civil action. Federal Lumber Co. v. Wheeler, 643 P.2d 31 (Colo.1981); Gleason v. Guzman, 623 P.2d 378 (Colo.1981); Setchell v. Dellacroce, 169 Colo. 212, 454 P.2d 804 (1969). Rather, the right to a jury trial in a civil case is derived from C.R.C.P. 38. ²

It is well established that, under Rule 38, the character of the action determines whether an issue of fact is to be tried to a court or to a jury. Federal Lumber Co. v. Wheeler, supra; Gleason v. Guzman, supra. A jury trial is available only in the actions at law enumerated in C.R.C.P. 38(a). Setchell v. Dellacroce, supra. There is no right to a jury trial in actions which historically were brought before courts of equity. ³ Worchester v. State Farm Mutual Automobile Insurance Co., 172 Colo. 352, 473 P.2d 711 (1970); Miller v. District Court, 154 Colo. 125, 388 P.2d 763 (1964).

In the case at hand, the petitioners seek money damages from their former estate guardian for negligently investing the corpus of the guardianship estate prior to its termination. They argue that the action against their former estate guardian is one sounding in tort and is an action at law under which issues of fact must be tried to a jury pursuant to C.R.C.P. 38(a). We do not agree.

Actions by a beneficiary or ward against a trustee or guardian in an existing trust or guardianship are generally, but not always, equitable in nature. See Restatement (Second) of Trusts § 197 (1959); 3 A. Scott, The Law of Trusts § 197 (1967). In certain situations, a beneficiary may maintain an action at law against a trustee. First, the beneficiary may bring an action at law when the trustee has a duty to pay money to the beneficiary and that duty is immediate and unconditional. Second, if the trustee is under a duty to transfer a chattel immediately and unconditionally to the beneficiary, a suit at law may be maintained. See Restatement (Second) of Trusts § 198 (1959); 3 A. Scott, supra, at § 198.

We believe that the present action is unlike those situations where a trustee may be liable at law. Here the beneficiaries seek relief for a breach of a fiduciary duty. They allege that their former trustee negligently invested the funds in the guardianship estate and that it failed to diversify the investments. There is no allegation of any breach of an express duty to pay a sum certain or to transfer a particular chattel.

As such, the issues to be decided are the same as those tried in any action alleging a breach of a fiduciary duty on the part of a trustee. Accordingly, the general rule that an action by a beneficiary against a trustee is equitable in nature applies. See Restatement (Second) of Trusts § 197 (1959); 3 A. Scott, supra, at § 197.

Further, the fact that the beneficiaries chose to bring their action after the guardianship estate had terminated does not change the character of the action for jury trial purpose. ⁴ The issues to be decided remain the same.

We conclude that the action is equitable in character and the trial court was correct in striking petitioners' demand for a jury trial.

II.

Petitioners next contend that the trial court erred in granting the Central Bank's motion for judgment on the pleadings on their claim for exemplary damages pursuant to section 13-21-102, C.R.S.1973. We disagree.

The trial court...