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  • Patricia Romano v. Shiel Medical Laboratory, Inc. A/K/A Bim Medical, Inc., Spectra Laboratories, Inc., Jack BaschOther Matters - Contract Non-Commercial document preview
  • Patricia Romano v. Shiel Medical Laboratory, Inc. A/K/A Bim Medical, Inc., Spectra Laboratories, Inc., Jack BaschOther Matters - Contract Non-Commercial document preview
  • Patricia Romano v. Shiel Medical Laboratory, Inc. A/K/A Bim Medical, Inc., Spectra Laboratories, Inc., Jack BaschOther Matters - Contract Non-Commercial document preview
  • Patricia Romano v. Shiel Medical Laboratory, Inc. A/K/A Bim Medical, Inc., Spectra Laboratories, Inc., Jack BaschOther Matters - Contract Non-Commercial document preview
  • Patricia Romano v. Shiel Medical Laboratory, Inc. A/K/A Bim Medical, Inc., Spectra Laboratories, Inc., Jack BaschOther Matters - Contract Non-Commercial document preview
  • Patricia Romano v. Shiel Medical Laboratory, Inc. A/K/A Bim Medical, Inc., Spectra Laboratories, Inc., Jack BaschOther Matters - Contract Non-Commercial document preview
  • Patricia Romano v. Shiel Medical Laboratory, Inc. A/K/A Bim Medical, Inc., Spectra Laboratories, Inc., Jack BaschOther Matters - Contract Non-Commercial document preview
  • Patricia Romano v. Shiel Medical Laboratory, Inc. A/K/A Bim Medical, Inc., Spectra Laboratories, Inc., Jack BaschOther Matters - Contract Non-Commercial document preview
						
                                

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FILED: KINGS COUNTY CLERK 01/22/2019 01:10 PM INDEX NO. 507940/2016 NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/22/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS ---------------- ----------------------------------------------X PATRICIA ROMANO, Index No. 507940/2016 Plaintiff, - against - SHIEL MEDICAL LABORATORY, INC. a/k/a BIM MEDICAL, INC., SPECTRA LABORATORIES, INC., and JACK BASCH, Defendants. --------------------- ---------------------- ----X DEFENDANT SHIEL MEDICAL LABORATORY, INC. a/k/a BIM MEDICAL, INC.'S MEMORANDUM IN SUPPORT OF ITS MOTION TO STRIKE JURY DEMAND GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP Kevin J. Nash, Esq. Attorneys for Defendant Shiel Medical Laboratory, Inc. 22nd 1501 Broadway, FlOOr New York, New York 10036 (212) 221-5700 1 of 9 FILED: KINGS COUNTY CLERK 01/22/2019 01:10 PM INDEX NO. 507940/2016 NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/22/2019 This Memorandum of Law is respectfully submitted on behalf of the remaining defendant, Shiel Medical Laboratory, Inc. ("Shiel Laboratory") in support of its motion pursuant ("Plaintiff" to CPLR 4101 and 4102(c) to strike the demand by Plaintiff, Patricia Romano or "Romano") for a jury trial. The motion is based upon the fact that Romano's legal claims for breach of contract have now been dismissed, and her remaining causes of action sound in equity, for which there is no jury trial right under well settled constitutional and legal principles. Accordingly, Plaintiff's demand for a jury trial should be stricken. PRELIMINARY STATEMENT While Plaintiff's complaint originally included causes of action for breach of contract, the procedural posture of the case changed when Defendants were granted partial summary judgment. Specifically, by Order entered on September 26, 2018 (the "Summary Judgment Ruling"), this Court granted partial summary judgment dismissing Romann's breach of contract claim in its entirety, dismissing all claims against the individual defendant, Jack Basch, and leaving only alternate causes of action for quantum meruit and unjust êñrichment as against Shiel Laboratory.1 "A" A copy of the Summary Judgment Ruling is annexed as Exhibit to the Affirmation of Kevin J. Nash, Esq., submitted in support of this Motion. The dismissal of Romano's main claim for breach of contract has important repercussions regarding jury trial rights. At this juncture, Romano is only left with alleged equitable claims for quantum meruit and unjust enrichment, for which a right to a jury trial does not exist under the New York Constitution, Article I, Section 2, and CPLR 4101 and 4102. 1 Defendants' Since motion included a request for summary judgment dismissing the fourth cause of action for promissory estoppel, in the absence of a specific provision in the Summary Judgment Ruling preserving the cause of action for promissory estoppel, Defendant submits that this claim has been dismissed as well, notwithstanding that following the entry of the Summary Judgment Ruling, Plaintiff filed an amended complaint including a cause of action for promissory estoppel with the other causes of action for quantum meruit and unjust enrichment. 2 of 9 FILED: KINGS COUNTY CLERK 01/22/2019 01:10 PM INDEX NO. 507940/2016 NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/22/2019 Moreover, even without dismissal of Romano's legal cause of action for breach of contract, she waived her right to a jury trial when Romano included both legal and equitable claims in her initial complaint. As the Second Department has instructed: The deliberate joinder of claims for legal and equitable relief arising out of the same transaction amounts to a waiver of the right to demand a jury trial; see CPLR 4102 [c]). Here, the Supreme Court properly determined that the plaintiff waived her right to a jury trial by joining legal and equitable causes of action arising from the same transaction and seeking both legal and equitable defendants' relief. Accordingly, the court properly granted that branch of the motion which was to strike the plaintiffs demand for a trial by jury. Zutrau v. ICE Sys., Inc., 128 A.D.3d 1058, 1059-60 (2d Dep't 2015) (internal quotation marks and case citations omitted). In fact, this waiver rule is more than 100 years old, having been set down by the legendary Benjamin Cardozo while sitting on the New York Court of Appeals, in Di Menna v. Cooper & Evans Co., 220 N.Y. 391, 396 (1917), where he held that "The rule is fundamental that where a plaintiff seeks legal and equitable relief in respect of the same wrong, his right to lost." trial by jury is Thus, Romano's decision to plead alternate causes of action carries important limitations on her jury trial rights. BACKGROUND FACTS Shiel Laboratory operated a blood testing laboratory in Brooklyn, before the company was sold to Spectra Laboratories, Inc. in 2013. Prior to the sale, Romano served as Shiel Laboratory's Medical Director starting in 2009. Although Romano did not have an employment agreement, she nevertheless commenced suit alleging that she was entitled to an alleged bonus predicated upon the sale of the company calculated on a sliding scale formula. The Defendants disputed Romano's entitlement to this bonus and successfully argued that there was never an agreement reached by the parties on any bonus compensation. Indeed the 2 3 of 9 FILED: KINGS COUNTY CLERK 01/22/2019 01:10 PM INDEX NO. 507940/2016 NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/22/2019 months' parties exchanged a number of unexecuted term sheets over a period of eighteen time without finalizing an agreement. Instead, Romano received a payment of $4.0 million following the sale, consistent with the terms of her original offer of employment. Not satisfied, however, Romano instituted this action seeking an additional bonus. Following discovery, Defendants moved for summary judgment seeking to dismiss certain of Romano's claims. This motion was granted in part, predicated upon the core finding that was never an agreement reached on a bonus, much less the amount of any bonus. In the wake of the Summary Judgment Ruling, Romano is still pursuing alternate claims for quantum meruit and unjust enrichment against Shiel Laboratory. Both of these claims are steeped in equity and raise impediments with respect to Romano's right to a jury trial. The Court 2019.2 has scheduled the trial on the remaining causes of action to commence on March 18, LEGAL ARGUMENT Point I: Romano's Jury Trial Demand Should Be Stricken A. Constitutional Rights In New York, a trial by jury is available in those cases where the relief sought is legal in nature, but not for matters which are historically equitable. See, 7C Carmody-Wait 2d § 49:14 ("As a general rule, a jury trial is available in the law actions, as opposed to those evolved in chancery (equity), which continue to be triable by the court."). This is a function of Article I, Section 1 of the New York State Constitution, which guarantees trial by jury, as modified by 2 This motion is timely, as "a motion to strike a demand for a jury trial may be made at any time (1" up to the opening of trial". Moyal v. Sleppin, 139 A.D.3d 605 Dep't 2016); Haber v. Cohen, 25 Misc. 3d 1216(A) (S.Ct. Kings Co. 2009), affd, 74 A.D.3d 1282 (2d Dep't 2010) (same). Notably, Shiel Laboratory specifically reserved its right to bring the instant motion as part of the communications with Romano's counsel and the Court in scheduling a trial date. 3 4 of 9 FILED: KINGS COUNTY CLERK 01/22/2019 01:10 PM INDEX NO. 507940/2016 NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/22/2019 Article I, Section 2 of the New York State Constitution, which provides for a waiver of that right in certain circumstances: Trial by jury in all cases in which it has heretofore been guaranteed by constitutional provision shall remain inviolate forever; but a jury trial may be waived by the parties in all civil cases in the manner to be prescribed by law. N.Y. Constitution, Article I, Section 2. Historically, the waiver of the guaranty to a trial by jury occurred when equitable, rather than legal, claims were at issue. As the Second Department has explained: In each instance it must be determined whether the nature and substance of the claim for relief is in law or in equity. If in law and included among the cases where jury trial is historically mandated by the Constitution or by statute, a jury trial must be had on demand. If the relief demanded is traditionally cognizable in equity there is no right to trial by jury for none was available at common law . . . . Magill v. Dutchess Bank & Tr. Co., 150 A.D.2d 531, 531-32 (2d Dep't 1989) (internal quotation marks and citations omitted). The analysis of the underlying nature of the action focuses on the facts as pleaded, not the demand for relief. Thus, the mere fact that Romano seeks a monetary recovery based on equitable claims is not controlling on the jury trial question. Again, the Second Department explained in Magill: A party's entitlement to demand a jury trial is dependent upon the facts pleaded, not the demand for relief . . . The critical consideration is whether the facts stated show that the action is equitable or legal in nature. The fact that the complaint demands a money judgment does not necessarily establish that there is a right to a jury trial . . . . Id., at 531. Accordingly, Romano's invocation of equitable claims nullifies her jury trial rights, even though she seeks recovery of additional monies from Shiel Laboratory. 4 5 of 9 FILED: KINGS COUNTY CLERK 01/22/2019 01:10 PM INDEX NO. 507940/2016 NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/22/2019 B. Jury Trial Rights are Subject to Waiver Even guarantied jury trial rights can be waived where, as here, they are combined with equitable claims arising out of the same transaction. See, CPLR 4102(c). Here, because Romano knowingly asserted both legal and equitable claims arising out of the same transaction, she is deemed to have waived her right to a jury trial. As quoted above, this rule dates back to a decision by Judge Cardozo, writing for the Court of Appeals in 1917, more than a century ago. Di Menna v. Cooper & Evans Co., 220 N.Y. 391, 396, 115 N.E. 993, 994 (1917). See, above, p. 2. The rule has since been codified under CPLR 4102(c), which provides a waiver of the right to a jury trial depending on whether legal and equitable claims have been asserted relating to the same or different transaction. Where the transaction is the same, a knowing joinder of legal and equitable claims for relief constitutes a waiver of the right to a jury trial on the legal claims. See, A. J. Fritschy Corp. v. Chase Manhattan Bank, 36 A.D.2d 600, 600, 318 N.Y.S.2d 369, 370 (1971) ("The joinder by plaintiff of legal and equitable causes of action based upon the same transaction effected a waiver of its right to trial by jury (CPLR 4102(c)"); Sullivan v. Troser Mgmt., Inc., supra, 75 A.D.3d at 1060 ("It is well settled that plaintiffs deliberate joinder of claims for legal and equitable relief arising out of the same transaction amounts to a waiver of the right to demand a jury trial") (internal quotation marks and citations omitted); Kaplan v. (1'' Long Island Univ., 116 A.D.2d 508, 509 Dep't 1986)("Under established principles, the joinder of claims for legal and equitable relief amounts to a waiver of the right to demand a jury (ISt trial"); Tanne v. Tanne, 30 A.D.2d 956 Dep't 1968) (by reason of consolidation of legal and equitable causes of action, "a waiver has resulted as to plaintiffs right to a trial by jury of the issues involved in the law action. (Lavisch v. Schwartz, 235 App. Div. 18; CPLR 4102, subd. 5 6 of 9 FILED: KINGS COUNTY CLERK 01/22/2019 01:10 PM INDEX NO. 507940/2016 NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/22/2019 [c].)"); Nat'l Grid Corp. Servs., LLC v. LeSchack & Grodensky, P.C., 41 Misc. 3d 977, 981 (S.Ct. Nassau Co. 2013)("The joinder by plaintiff of legal and equitable claims arising from the same transaction results in a waiver of the right to trial by jury with respect to the legal claims (Horizon Asset Mañagement v. Duffy, 106 A.D.3d 594, 967 N.Y.S.2d 17 [1st Dept. 2013] )."). C. There is No Jury Trial Right with Respect to the Remaining Equitable Causes of Action Besides the waiver rules, since the Summary Judgment Ruling eliminated the legal claims from the case, the remaining equitable claims are only triable by the Court under traditional rules dating back to the common law. There can be no disputing that Romano's remaining causes of action are equitable in nature. For example, with respect to a claim for quantum meruit, in Williams v. Foubister, 176 Misc.2d 702 (Sup.Ct. 1998), the Court reviewed a dispute over legal fees, and the question of whether the requirement for arbitration of the dispute violated the Constitutional right to a jury trial, explaining: The courts have consistently analyzed such cases as involving claims in the nature of quantum meruit and thus held such actions to be equitable in nature and therefore not mandating a right to jury trial. The cases have sometimes confused the issue based upon a different stated claim but ultimately the law applied is the settled law related to an equitable action to recover fees for the fair and reasonable value of the services rendered by an attorney on behalf of a client. (Internal citations omitted). Williams v. Foubister, 176 Misc. 2d at 706. See also, Nat'l Grid Corp. Servs., LLC v. LeSchack & Grodensky, P.C., supra, 41 Misc. 3d at 981 (denying jury trial based on finding that claim for fees in quantum meruit is equitable in nature). See, also, Connolly v. Griffin, 201 A.D.2d 371, (l" 372 Dep't 1994) ("inasmuch as plaintiff, in his fourth cause, seeks recovery under the equitable doctrine of quantum meruit, he has no statutory right to a jury trial on that cause"). Similarly, Courts have found that claims for unjust enrichment are also equitable in nature without jury rights. See, e.g., Nat'l Grid Corp. Servs., LLC v. LeSchack & Grodensky, 6 7 of 9 FILED: KINGS COUNTY CLERK 01/22/2019 01:10 PM INDEX NO. 507940/2016 NYSCEF DOC. NO. 107 RECEIVED NYSCEF: 01/22/2019 P.C., supra, 41 Misc. 3d at 981 ("National Grid's claim for unjust enrichment is also an equitable remedy (IDT Corp. v. Morgan Stanley, 12 N.Y.3d 132, 142, 879 N.Y.S.2d 355, 907 N.E.2d 268 [2009]; NCJ Cleaners v. ALM Media, 48 A.D.3d 766, 852 N.Y.S.2d 384 [2d Dept. 2008])"). The arguably dismissed cause of action for promissory estoppel was also equitable in nature. As the Third Department has explained, a claim for promissory estoppel is equitable in nature because it does not seek to enforce an existing contract, but to fashion an equitable remedy precisely because there was never a formal contract: Plaintiff is not asking Supreme Court to enforce a contract that would otherwise be enforceable but for lack of consideration, but to provide a remedy where the underlying agreement fails for indefiniteness. The doctrine is not being used defensively in support of contract rights but, instead, to create a new right in the interests of justice with relief designed to achieve equity. Under these circumstances, plaintiff is not entitled to the benefit of the bargain because there was no bargain. (internal quotation marks and citations omitted) (emphasis supplied) Chfford R. Gray, Inc. v. LeChase Const. Servs., 51 A.D.3d 1169, 1171 (3d Dep't 2008). In sum, Romano waived any right to trial by jury when she filed the initial complaint both legal and equitable causes of action out of the same matter - the alleged ceiiibining arising entitlement to a perforniance bonus. To the extent there is any possible debate over this point, with the ensuing dismissal of the legal branch of the case, the traditional rule that Romano has no right to a jury trial on the equitable causes of action of quantum meruit and unjust enrichment comes into play. Accordingly, the instant motion to strike the jury demand should be granted