Opinion
Civil Action No. SA-05-CA-1173-XR.
May 18, 2006
ORDER
On this date, the Court considered Defendant Insurance Company of North America's motion to strike Plaintiff Ponza Yacht Corporation's jury demand as untimely and waived. Plaintiff asserts that its demand for a jury trial was neither untimely nor waived. Alternatively, if wavier is found, Plaintiff requests the Court excuse its untimeliness pursuant to Federal Rule of Civil Procedure 39(b).
I. Factual and Procedural Background.
Plaintiff, a corporation having its principal place of business in the Cayman Islands, owns a yacht named the Ponza. Plaintiff insured the Ponza under an Inland Marine Yachtsman Policy of Insurance, which was purchased from Defendant. On July 18, 2005, the Ponza, while docked in Puerto Aventuras, Mexico was allegedly damaged by Hurricane Emily. Plaintiff filed a claim for damages under the insurance policy. Defendant denied the claim based on an alleged amendment to the policy.
On November 2, 2005, Plaintiff filed suit against Defendant in the 131st Judicial District Court, Bexar County, Texas, alleging causes of action for unfair and deceptive insurance practices, fraud, and breach of contract. Prior to filing an answer in the state court action, Defendant, on December 2, 2005, timely removed the case to federal court on the basis of diversity jurisdiction. On December 8, 2005, Defendant filed its Original Answer. Neither Plaintiff nor Defendant requested trial by jury in their respective pleadings.
On January 25, 2006, Plaintiff filed a notice of demand for jury trial. See docket no. 7. This Court's Scheduling Order, dated February 6, 2006, set the case for a jury trial beginning Monday, January 16, 2007. See docket no. 8. Two months later, on March 31, 2006, Defendant filed a motion to strike Plaintiff's jury demand. See docket no. 10. On April 7, 2006, Plaintiff responded in opposition to Defendant's motion, and in the alternative, requested the Court grant it relief from waiving its right to a jury trial pursuant to Federal Rule of Civil Procedure 39(b). See docket no. 12.
II. Analysis
Plaintiff and Defendant spend a substantial amount of time arguing about whether Federal Rule of Civil Procedure 81(c) or 38 governs the timeliness of a jury demand in a removed action. While the language of Rule 81(c) appears to dictate that Rule 38 applies because not "all necessary pleadings [had] been served" at the time removal, i.e. Defendant's Answer, the Court need not decide the issue. Both Rule 81(c) and 38 provide a ten-day (10) window for demanding a jury trial. Plaintiff's demand was untimely under either Rule. FED. R. CIV. P. 38, 81(c).
The Court neither accepts Plaintiff's argument that Texas law provides an indefinite period of time for filing a jury demand nor finds its citation to Second Circuit and New York state court cases persuasive.
The constitutional right to a trial by jury is waived by a party's failure to make a jury demand within the time limits of Rule 38 or 81(c). FED. R. CIV. P. 38(d), 81(c). "[N]otwithstanding the failure of a party to demand a jury in an action in which such demand might have been made of right [under Rule 38], the court in its discretion upon motion may order a trial by jury of any or all issues." FED.R.CIV.P. 39(b). Because Plaintiff failed to make a timely demand for trial by jury under either Rule 38 or 81, Plaintiff is only entitled to a jury trial if it satisfies Rule 39(b).
The Fifth Circuit has instructed district courts to favorably receive Rule 39(b) motions for trial by jury unless "there are persuasive reasons to deny it." Daniel Int'l Corp. v. Fischbach Moore, 916 F.2d 1061, 1064 (5th Cir. 1990). "When the discretion of the court is invoked under Rule 39(b), the court should grant a jury trial in the absence of strong and compelling reasons to the contrary." Id. In Daniel International, the Fifth Circuit employed five factors for evaluating Rule 39(b) motions:
(1) whether the case involves issues which are best tried to a jury;
(2) whether the granting of the motion would result in a disruption of the court's schedule or that of an adverse party;
(3) the degree of prejudice to the adverse party;
(4) the length of the delay in having requested a jury trial; and
(5) the reason for the movant's tardiness in requesting a jury trial.Id. Application of these factors to the instant case weighs in favor of granting Plaintiff's Rule 39(b) motion.
First, Plaintiff's causes of action, i.e. unfair and deceptive insurance practices, fraud, and breach of contract, are clearly within the province of a jury. See id. These fact-intensive inquiries are usually tried to a jury, and clearly support Plaintiff's Rule 39(b) motion.
Second, the Court's February 6, 2006 Scheduling Order set this case for a jury trial on January 17, 2007. Defendant waited nearly two months to object to Plaintiff's January 25, 2006 jury demand and the Court's Scheduling Order setting this case for jury trial. Defendant's response fails to establish how its schedule will be disrupted by trying this case to a jury instead of the bench. Granting the Rule 39(b) motion will disrupt neither the Court's nor Defendant's schedule.
Third, Defendant has not directed this Court to any prejudice it would suffer if this case was tried to a jury. Importantly, the discovery deadline is September 15, 2006 and the trial date remains eight months away. Plaintiff has not waited until the eve of trial or after the discovery deadline expired to request a jury trial. This case is distinguishable from Equal Employment Opportunity Commission v. El Paso Natural Gas Co., No. EP-83-CA-108, 1985 WL 152, at *1 (W.D. Tex. Jan. 3, 1985). In El Paso Natural Gas, the court denied plaintiff's Rule 39(b) motion because the defendant had filed affidavits demonstrating that it had conducted discovery and prepared its case on the assumption that it would be tried to the bench. Id. Defendant has not presented any such evidence and Plaintiff has alleged that the only discovery conducted to date was a video deposition.
Fourth, Plaintiff's jury demand was only one-month late. While the Court does not condone Plaintiff's untimeliness, the delay has not affected the parties' preparation of their respective case. As previously stated, the case has been listed on the Court's jury calendar for three months, discovery remains ongoing, trial is still eight months away, and Defendant waited two months after Plaintiff requested a jury trial to object. Plaintiff's Rule 39(b) motion is "clearly not a delaying tactic brought on the eve of trial." Daniel Int'l Corp., 916 F.2d at 1065.
Finally, Plaintiff's delayed request was based on its alleged belief that the last sentence of Rule 81(c) did not require it to make a jury demand within the proscribed ten-day time period. Defendant claims such a reason for failing to timely request a jury trial amounts to mere inadvertence. While the Court may disagree with Plaintiff's reading of Rule 81(c), it does not believe a one-month delay constitutes mere inadvertence. This is especially true where Defendant waited two months after Plaintiff filed its demand for jury trial and the Court placed this case on its jury docket to object. Plaintiff's offered explanation, while subject to question, is not unreasonable.
Although a party's rationale for its delay weighs heavily in the analysis, the court must evaluate all the factors relevant to the Rule 39(b) determination. See Daniel Int'l Corp., 916 F.2d at 1066. Importantly, Plaintiff's conduct has caused no harm or prejudice to Defendant. Nothing in the Defendant's pleadings demonstrates how a jury trial in January 2007 would affect, disrupt, or prejudice its case. This fact weighs heavily in the Court's decision to grant Plaintiff's Rule 39(b) motion.
III. Conclusion
Defendant filed a motion to strike Plaintiff's demand for a jury trial nearly two months after Plaintiff filed the demand and the Court placed this case on the jury docket. Plaintiff claims its demand was not untimely, or in the alternative, requests the Court exercise its discretion under Rule 39(b) and allow this case to be tried to a jury. Although the Court finds Plaintiff's jury demand to be untimely, the cumulative balancing of the Daniel International factors favors granting the Rule 39(b) motion. The issues presented in this case are best tried to a jury, the case has been docketed on the Court's jury calendar for three months, there is no prejudice to Defendant, discovery is ongoing, and Plaintiff's delay in requesting a jury trial has not affected the parties' preparation for the January 17, 2007 trial. Accordingly, the Court DENIES Defendant's motion to strike jury demand (docket no. 10) and GRANTS Plaintiff's Rule 39(b) motion for trial by jury (docket no. 12).