Ex Parte Atlantis Development Co., Inc.
Ex Parte Atlantis Development Co., Inc.
Concurring Opinion
I concur in all of the holdings, in all of the rationale for the holdings, and in the judgment of the scholarly main opinion. I express no opinion on the suggestion or prospects of a motion for Rule 39(b), Ala. R. Civ. P., relief in the future proceedings in this case. Since no Rule 39(b) issue is before us, I would not want any expression by me on this topic to influence either party, counsel, or the trial judge. WOODALL, Justice (concurring specially).
Opinion of the Court
Atlantis Development Company, Inc., Bobby R. Ajdarodini, and Javad Ajdarodini (hereinafter collectively referred to as "Atlantis") petition this Court for a writ of mandamus. Atlantis seeks relief from an order of the trial court granting the motion of Pace Properties, an Alabama general partnership, and JBJ Partnership (hereinafter collectively referred to as "Pace") to strike Atlantis's jury demand. The issue is whether, under Rule 38(b), Ala. R. Civ. P., Atlantis's demand for a jury trial, made simultaneously with a counterclaim for fraud filed more than 30 days after the fraud issue was raised as an affirmative defense in Atlantis's answer to the complaint, was timely. We answer that question in the negative; accordingly, we deny the petition.
On February 21, 2003, Pace Properties and JBJ Partnership, one of the defendants on Atlantis's cross-claim in the first action, filed the present action, also in the Madison Circuit Court, claiming that Atlantis had defaulted on certain promissory notes that were the subject of the litigation in John Lary, L.L.C. v.JBJ Partnership. Atlantis answered on April 3, 2003, alleging, among others, the following affirmative defense: "Defendants were defrauded by [Pace], who sold property with defective title, while at the same time warranting that title was clear, the details of which is [sic] set forth in Civil Action Number 97-563 pending in the Circuit Court of Madison County, Alabama." Contemporaneously, Atlantis filed a motion to dismiss or, alternatively, to consolidate Pace's action with the pending action because, according to Atlantis, the claims Pace was asserting were already the subject of John Lary, L.L.C. v. JBJPartnership.
After hearing oral argument on the issues on June 27, 2003, the trial court denied Atlantis's motions. On August 28, 2003, Atlantis, now required to litigate its defenses and claims in a second action, *Page 1024 filed a counterclaim and demanded a jury trial. The counterclaim alleged that Atlantis had suffered losses on the costs of housing construction, materials, financing, and litigation because of Pace's fraudulent conduct in failing to disclose the outstanding right of redemption on certain of the property Atlantis had purchased from Pace. On September 12, 2003, Pace filed a motion to strike the jury demand. The trial court granted Pace's motion. Atlantis now petitions this Court for a writ of mandamus, arguing that its jury demand was timely and that the trial court therefore erred in granting Pace's motion to strike the demand, and asking this Court to order the trial court to vacate its order granting Pace's motion.
Rule 13(a), Ala. R. Civ. P., requires that a "pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against the opposing party," subject to exceptions, one of which the trial court here found not applicable. Rule 7(a), Ala. R. Civ. P., entitled "Pleadings," provides: "There shall be a complaint and an answer; a reply to a counterclaim denominated as such. . . ." Rule 7(a) does not state, "There shall be a complaint, an answer and acounterclaim; a reply to a counterclaim denominated as such. . . ." A counterclaim must therefore be asserted in an answer. This conclusion is buttressed by Rule 13(f), Ala. R. Civ. P., "Omitted Counterclaim," which provides: "When a pleader fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, the pleader may by leave of court set up the counterclaim by amendment." (Emphasis added.) The only reasonable interpretation of Rule 13(f) is that "amendment" refers to an amendment to the answer.
In this proceeding, Pace's complaint was filed on February 21, 2003. Atlantis served its answer on April 3, 2003, asserting, among other things, the defense of fraud. Atlantis did not demand a trial *Page 1025 by jury in the answer. The answer constituted the last pleading directed to the issues as to which a jury might have been demanded, because a reply to an answer is not provided for in the rules. See Rule 7(a). The time in which to demand a trial by jury on the issues in the complaint and the answer therefore expired 30 days after April 3, 2003. Consequently, the demand for a jury trial first asserted in the counterclaim asserting fraud, a document that must be viewed as an amendment to the previously served answer asserting fraud as a defense, is untimely, because it was not served until August 28, 2003, more than three months after the expiration of the deadline established by Rule 38(b).
In Baggett v. Sims,
This case is indistinguishable from Ex parte TwintechIndustries, Inc.,
"In the instant case, the record does not indicate that the fraud claims set forth in Twintech's amendment [asserting a counterclaim for fraud] created a new issue. To the contrary, Twintech had already raised fraud as an affirmative defense in its answer, and, within 30 days of filing that answer, could have demanded a jury. Its failure to timely file a jury demand when the issue was first raised operated as a waiver of the right; the right was not revived by the later amendment relating to the same issue. Therefore, the trial judge's order granting Boeing's motion to strike Twintech's jury demand was proper and will not be disturbed by this Court."
Our research reflects that Pace's contention that Atlantis's demand for a jury trial is untimely is consistent with the holding in Curry v. Pyramid Life Insurance Co.,
"Its [the rule dealing with timeliness of a jury demand served within 10 days of the service of a reply to a counterclaim] application in that case [Curry], however, appears to have been erroneous. . . . It should have been held that the failure to demand a jury [within 10 days after the answer was filed] waived jury trial on the issue of fraud set up in the answer and that the subsequent counterclaim, in which this same issue was made the basis for a claim for affirmative relief, did not revive a right to jury already waived. See note 38 below. [Right to jury trial not revived after previous waiver]."
9 C. Wright and A. Miller, Federal Practice and Procedure: Civil2d § 2320 n. 9 (1994). Subsequent treatment of Curry by other courts conforms to the view expressed in the foregoing treatise. See Land Office Co. v. Clapp-Thomssen Co.,
"In this case, the fraud alleged in the defendants' counterclaim rests upon the same conduct as the fraud asserted as an affirmative defense in their answer, i.e. Land Office's misrepresentation of the net operating income of the apartments. That misrepresentation is the same `basic issue' or `general area of dispute' as the conduct for which the defendants sought damages in their counterclaim. There is no dispute that the counterclaim involves the same basic issue. Counsel acknowledged as much at a hearing on May 6, 1988, regarding the stipulation permitting the defendants to file their counterclaim, when he said that `the contents of the Counterclaim would not deviate from the issues that will be tried anyway.' By not demanding a jury trial in their answer, the defendants waived their right to a jury trial and once waived, that right was not revived by a counterclaim which did not raise `new issues.'
"We are not persuaded that Curry v. Pyramid Life Ins. Co.,
271 F.2d 1 (8th Cir. 1959), cert. denied,361 U.S. 933 ,80 S.Ct. 373 ,4 L.Ed.2d 355 (1960), requires a different result. In that case, the defendant filed an answer alleging an affirmative defense of fraud in the procurement of an insurance contract. More than a month later, the defendant, with leave of the court, filed a counterclaim seeking rescission of the insurance contract because of fraud. The plaintiff demanded a jury trial in her reply to the counterclaim. The Eighth Circuit Court of Appeals held that the demand was timely because the plaintiff's reply to the counterclaim `was the "last pleading directed to such (fraud) issue" within the contemplation of Rule 38(b).' Curry, supra,271 F.2d at 5 ."Professors Wright and Miller have questioned the application of the `new issues' doctrine in Curry:
"`It should have been held that the failure to demand a jury [within ten days after the answer was filed] waived jury trial on the issue of fraud set up in the answer and that the subsequent counterclaim, in which this same issue was made the basis for a claim for affirmative relief, did not revive a right to jury already waived. See note 38 below. [Right to jury trial not revived [after] previous waiver].' *Page 1027 9 C. Wright and A. Miller, [Federal Practice and Procedure] § 2320 at 93, fn. 35 [(1971)].
"We agree with Professors Wright and Miller that the Curry decision is not persuasive because the opinion did not address the previously waived right to a jury trial on the same issue, a principle which has been relied upon in subsequent Eighth Circuit cases. Cardiac Pacemakers, Inc. v. Coratomic, Inc.,
702 F.2d 671 (8th Cir. 1983); First Wis. National Bank of Rice Lake v. Klapmeier,526 F.2d 77 (8th Cir. 1975); Williams v. Farmers and Merchants Ins. Co.,457 F.2d 37 (8th Cir. 1972)."
Atlantis's contention that the pendency of the prior action barred the present action appears to have diverted its focus from the impact of Rule 38(b). However, Atlantis's defense to this action could have been asserted by motion, unaccompanied by an answer. See, e.g., Ex parte Canal Ins. Co.,
Adhering to the plain language of Rule 38(b) and Rule 38(d), as we are obliged to do, can of necessity lead to what one might view in a specific case as a harsh result, as the provisions of Rule 38 plainly impose a penalty for failing to adhere to a deadline. Yet, our legal system functions based on adherence to deadlines, for example, statutes of limitations. When the consequences of a missed deadline appear unduly harsh, the proper approach of the aggrieved party is to pursue an available remedy for relief from the consequences of the deadline.
The same rules of civil procedure that create a deadline for demanding a trial by jury also afford a remedy for those seeking relief from the consequences of a missed deadline. Rule 39(b), Ala. R. Civ. P., permits the trial court, upon motion, to order a trial by jury in its discretion "notwithstanding the failure of a party to demand a jury in an action in which such a demand might have been made of right." We do not have before us in this proceeding a review of the trial court's failure to exercise its discretion in favor of a trial by *Page 1028 jury pursuant to Rule 39(b).2
Under the circumstances of this case as disclosed by the record (a defendant serves an answer with the expectation that the trial court would grant its simultaneously filed motion to dismiss or to stay based on the pendency of another action in which a jury had been demanded), a motion filed pursuant to Rule 39(b), if Atlantis chooses on remand to file such a motion, seeking a trial by jury in the trial court's sound discretion, as informed by the requirements of Rule 1, Ala. R. Civ. P.,3 would deserve serious consideration.
PETITION DENIED.
NABERS, C.J., and HOUSTON, BROWN, HARWOOD, and STUART, JJ., concur.
JOHNSTONE and WOODALL, JJ., concur specially.
Concurring Opinion
I concur in the holding of the main opinion and with the rationale for that holding. However, with respect to the gratisdictum concerning Ala. R. Civ. P. 39(b), I express no opinion. "`An opinion given in Court . . ., if not necessary to the judgment given of record, but that it might have been as well given, if no such, or a contrary opinion had been broached, is no judicial opinion, no more than a gratis dictum.'" Planters' Merchants' Bank v. Walker,
Reference
- Full Case Name
- Ex Parte Atlantis Development Company, Inc., Bobby R. Ajdarodini, and Javad Ajdarodini. (In Re Pace Properties, an Alabama General Partnership, and Jbj Partnership v. Atlantis Development Company, Inc.).
- Cited By
- 10 cases
- Status
- Published