State ex rel. Douglas v. Schroeder

• Decision Date: 04 April 1986
• Docket Number: No. 85-673,85-673
• Citation: State ex rel. Douglas v. Schroeder, 222 Neb. 473, 384 N.W.2d 626 (Neb. 1986)
• Parties: STATE of Nebraska ex rel. Paul L. DOUGLAS, Attorney General, Appellee and Cross-Appellant, v. J.H. SCHROEDER, Appellant and Cross-Appellee.
• Court: Nebraska Supreme Court

Page 626

384 N.W.2d 626

222 Neb. 473

STATE of Nebraska ex rel. Paul L. DOUGLAS, Attorney General, Appellee and Cross-Appellant, v. J.H. SCHROEDER, Appellant and Cross-Appellee.

No. 85-673.

Supreme Court of Nebraska.

April 4, 1986.

Syllabus by the Court

1. Constitutional Law: Appeal and Error. The Nebraska Supreme Court will not consider a constitutional question in the absence of a specification of the constitutional provision which is claimed to be violated.

2. Constitutional Law: Juries. The right to a jury trial under the seventh amendment to the U.S. Constitution does not apply in state courts.

3. Constitutional Law: Juries. The purpose of article I, § 6, of the Nebraska Constitution is to preserve the right to a jury trial as it existed at common law and under the statutes in force when the Constitution was adopted.

4. Consumer Protection: Equity: Trial. The Nebraska Consumer Protection Act, Neb.Rev.Stat. §§ 59-1601 et seq. (Reissue 1984), is equitable in nature; as such, trials thereunder are to the court.

5. Motions for Continuance: Appeal and Error. A motion for continuance is addressed to the sound discretion of the trial court; the trial court's ruling on such a motion will not be disturbed on appeal in the absence of an abuse of that discretion.

6. Trial: Appeal and Error. An abuse of discretion takes place where the trial court's reasons or rulings are clearly untenable and unfairly deprive a litigant of a substantial right and a just result.

7. Consumer Protection Act: Attorney Fees: Appeal and Error. The awarding and amount of an attorney fee under the Nebraska Consumer Protection Act, Neb.Rev.Stat. §§ 59-1601 et seq. (Reissue 1984), rest in the sound discretion of the trial court; the Nebraska Supreme Court will only interfere where the allowance is clearly excessive or insufficient.

8. Statutes: Words and Phrases. Generally, the word "may" in a statute will be given its ordinary, permissive, and discretionary meaning unless the intent of the drafters would be defeated by the application of such a meaning.

9. Trial: Consumer Protection Act: Appeal and Error. Restoration of the purchase price under the Nebraska Consumer Protection Act, Neb.Rev.Stat. §§ 59-1601 et seq. (Reissue 1984), rests within the discretion of the trial court; its ruling thereon will not be disturbed on appeal in the absence of an abuse of that discretion.

Curtis A. Sikyta, Ord, for appellant and cross-appellee.

Robert M. Spire, Atty. Gen., and Mark D. Starr, Lincoln, for appellee and cross-appellant.

KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ.

CAPORALE, Justice.

The plaintiff-appellee, State of Nebraska, through its Attorney General, brought an action under the Nebraska Consumer Protection Act, Neb.Rev.Stat. § 59-1601 et seq. (Reissue 1984), alleging that defendant-appellant, J.H. Schroeder, made false or misleading statements during the promotion and sale of certain purported trust forms. The State sought to enjoin Schroeder from making such misrepresentations and to require him to restore the purchase price to the buyers, to pay civil penalties, and to pay the costs of the action, including a reasonable attorney fee. At an earlier time in the proceedings, the trial court, as a sanction for Schroeder's refusal to comply with a discovery order, struck his answer and permanently enjoined him from making specified misrepresentations. Thereafter, following a nonjury trial on the remaining issues, the trial court reaffirmed its earlier injunction and awarded the State an attorney fee of $3,000 and costs in the sum of $79.50. In this appeal Schroeder assigns as error the trial court's (1) failure to find the act unconstitutional, (2) denial of a jury trial, (3) denial of a continuance, and (4) award of an attorney fee to the State. The State, in its cross-appeal, assigns as error the trial court's failure to order Schroeder to make restoration. We affirm and award an additional attorney fee.

The act, among other things, renders unlawful "unfair" or "deceptive" acts or practices in the conduct of any trade or commerce. § 59-1602. It empowers the Attorney General to bring an action to restrain such conduct and permits the prevailing party to recover, in the discretion of the court, the costs of suit, including a reasonable attorney fee. The trial court may also make such additional orders as may be necessary to restore to any person in interest any money or property which may have been obtained by the unlawful conduct. § 59-1608. The act further provides that, with certain exceptions not involved in this case, one who engages in unlawful conduct shall pay a civil penalty of not more than $2,000 for each violation § 59-1614.

Schroeder employed unfair and deceptive acts and practices by misrepresentation in connection with the promotion and sale of certain purported trust forms. The claimed trusts, which were to result once the forms were completed, were to reduce or eliminate income taxes by passing one's earned income to the trust and deducting from said income his or her personal living expenses.

In connection with the first assignment of error, Schroeder argues that the entire act is unconstitutional as applied to him, in that it is both overbroad and vague. Yet, he does not tell us what section of which Constitution, that of our nation, that of this sovereign state, or perhaps both, he claims the act violates.

It has long been the rule that this court will not consider a constitutional question in the absence of a specification of the constitutional provision which is claimed to be violated. Blackledge v. Richards, 194 Neb. 188, 231 N.W.2d 319 (1975); Radil v. State, 182 Neb. 291, 154 N.W.2d 466 (1967); Metropolitan Utilities Dist. v. City of Omaha, 171 Neb. 609, 107 N.W.2d 397 (1961); State v. Bryant, 94 Neb. 754, 144 N.W. 804 (1913).

Thus, we do not consider the first assignment of error.

The second assignment of error contends that the denial of a jury trial violates both the seventh amendment to the U.S. Constitution and article I, § 6, of the Nebraska Constitution.

The seventh amendment provides: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved...." That federal constitutional provision, however, does not apply in state courts. Minn. & St. Louis R.R. v. Bombolis, 241 U.S. 211, 36 S.Ct. 595, 60 L.Ed. 961 (1916); Pearson v. Yewdall, 95 U.S. (5 Otto) 294, 24 L.Ed. 436 (1877); Woods v. Holy Cross Hospital, 591 F.2d 1164 (5th Cir.1979); Wartman v. Branch 7, Civ. D., Cty. Ct., Milwaukee Cty., Wis., 510 F.2d 130 (7th Cir.1975).

Thus, we concern ourselves only with article I, § 6, of the Constitution of Nebraska and the relevant statutory and case law.

Article I, § 6, provides: "The right of trial by jury shall remain inviolate...." Our cases state that the purpose of that constitutional provision is to preserve the right to a jury trial as it existed at common law and under the statutes in force when the Constitution was adopted. State v. Young, 194 Neb. 544, 234 N.W.2d 196 (1975); Schroeder v. Oeltjen, 184 Neb. 8, 165 N.W.2d 81 (1969); State v. Hauser, 137 Neb. 138, 288 N.W. 518 (1939).

Our Constitution was adopted in 1875, 99 years prior to enactment of the Consumer Protection Act. 1974 Neb. Laws, L.B. 1028. However, Neb.Rev.Stat. § 25-1104 (Reissue 1979) provides that "[i]ssues of fact arising in actions for the recovery of money ... shall be tried by a jury ..." unless waived or referred to a referee. Traditionally, this court has denied jury trials in equitable actions, Kuhlman v. Cargile, 200 Neb. 150, 262 N.W.2d 454 (1978), State Securities Co. v. Corkle, 191 Neb. 578, 216 N.W.2d 879 (1974), and Sharmer v. McIntosh, 43 Neb. 509, 61 N.W. 727 (1895), and provided them as a matter or right in legal actions, Long v. Magnolia Petroleum Co., 166 Neb. 410, 89 N.W.2d 245 (1958), and Lett v. Hammond, 59 Neb. 339, 80 N.W. 1042 (1899).

The task thus becomes one of determining whether the act is of an equitable or of a legal nature.

Nei v. Burley, 388 Mass. 307, 446 N.E.2d 674 (1983), and Kugler v. Market Dev. Corp., 124 N.J.Super. 314, 306 A.2d 489 (1973), both involved questions of the right to a jury trial under consumer protection acts. Both courts held there was no such right. In Nei the applicable act originally provided that a consumer could bring an action "in equity" for damages and such equitable relief as the court deems necessary. After the procedural merger of law and equity, the Legislature struck the words "in equity." The court, in reaching its decision, stated the "elimination of the words 'in equity' does not conclusively or even persuasively remove the equitable nature of consumer actions." 388 Mass. at 314, 446 N.E.2d at 678.

The court in Kugler summarily disposed of the jury trial issue, stating, "The present cause of action and right to seek redress are foreign to the common law, being modern day creations of the Legislature for the relief and cure of a current mischief." 124 N.J.Super. at 319, 306 A.2d at 492.

While the act permits the recovery of an attorney fee, restoration of the purchase price, and the imposition of civil penalties, its principal thrust is to prevent unfair or deceptive acts or practices in trade or commerce. Consequently, the act is equitable in nature, in the sense that it seeks to prevent prejudicial conduct rather than merely compensate such damage as may flow therefrom. The monetary consequences imposed to discourage future like acts and practices are ancillary to the act's principal equitable thrust.

We conclude, therefore, that the trial court was correct in denying Schroeder a jury trial.

In the third assignment of error Schroeder complains that he was denied a trial continuance. The June 22, 1984, trial date was set on May 16, 1984. On June 19 Schroeder moved for a continuance and moved for a court-appointed attorney on...