Incidental Equitable Claim Did Not Waive Right to Jury Trial

On October 27, 2020, Justice Borrok of the New York County Commercial Division issued a decision in Parlux Fragrances, LLC v. S. Carter Enters., LLC, 2020 NY Slip Op. 51245(U), holding that an incidental equitable claim does not waive the right to a jury trial, explaining:

CPLR § 4101 provides that issues of fact shall be tried by a jury in an action in which a party demands and sets forth facts which would permit a judgment for a sum of money only or in any other action in which a party is entitled by the constitution or by express provision of law to a trial by jury.

The First Department has held that where a plaintiff brings a claim triable by jury and the defendant interposes both equitable defenses and counterclaims arising from the same transaction, the defendant waives a jury even on the main, legal, claim. However, a request contained in a pleading's prayer for relief that is equitable in nature does not result in a waiver of the right to a jury trial where the character of the causes of action asserted are predominantly legal in nature and for which monetary damages alone would afford full relief.

Here, SCE and Mr. Carter assert a sole counterclaim for breach of contract against Parlux and Perfumania. The overall nature and character of SCE and Mr. Carter's counterclaim is undeniably legal in nature, not equitable, as only monetary damages would afford a full remedy. Their request for a declaratory judgment in the prayer for relief that, Parlux and Perfumania must forthwith comply with all the terms of the License Agreement and Sublicense Agreement is merely incidental to the legal breach of action counterclaim as such request goes to the calculation of damages. Accordingly, it is ordered that SCE and Mr. Carter have not waived their right to a jury trial and the motion to strike the jury demand is denied.

(Internal quotations and citations omitted).

As this decision shows, the decision of what claims to bring at the outset of an action will have an irrevocable impact on whether there is a right to a jury trial. Asserting even a single equitable claim against one defendant could irrevocably waive a plaintiff’s right to a jury trial on all of its claims against all defendants unless, as this decision discusses, such claims are merely incidental. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client is considering whether to bring equitable and legal claims in a single action or if you are defending claims where legal and equitable claims have been asserted in a single complaint.