Berlinger et al v. Wells Fargo, N.A. as Successor to Wachovia Bank, N.A.

Filing 544

OPINION AND ORDER granting 496 Motion to Strike Jury Demand. Plaintiffs' jury demand for the remaining portion of the case is stricken. Signed by Judge John E. Steele on 1/27/2016. (RKR)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
STACEY SUE BERLINGER, aka
Stacey Berlinger O’Connor,
BRIAN BRUCE BERLINGER, and
HEATHER ANNE BERLINGER, as
Beneficiaries to the Rosa B.
Schweiker Trust and all of
its related trusts,
Plaintiffs,
v.

Case No: 2:11-cv-459-FtM-29CM

WELLS
FARGO,
N.A.
AS
SUCCESSOR TO WACHOVIA BANK,
N.A., as Corporate Trustee
to the Rosa B. Schweiker
Trust,
and
all
of
its
related trusts,
Defendant/Third
Party Plaintiff
BRUCE D. BERLINGER and SUE
CASSELBERRY,
Third Party Defendants.
________________________ ___

OPINION AND ORDER
This matter comes before the Court on Defendant's Motion to
Strike Plaintiff's Jury Demand (Doc. #496) filed on October 30,
2015.

Plaintiffs filed a Response (Doc. #499) on November 9,

2015.

For the reasons set forth below, the motion to strike is

granted.

In their Second Amended Complaint, plaintiffs demanded a jury
trial on all issues so triable in the action (Doc. #93, ¶ 65).
Defendant Wells Fargo, N.A. (defendant or Wells Fargo) asserts
that after the Court’s Opinion and Order (Doc. #492) resolving the
cross motions for summary judgment, the only remaining portions of
the counts do not entitle plaintiffs to a jury trial.

Plaintiffs

disagree, asserting the case as it now stands still commands a
jury trial upon their request.
The basic principles are well established, and do not appear
to be disputed by the parties.

First, while jurisdiction is based

upon diversity of citizenship and the remaining claim is a Florida
state law cause of action, the issue of whether a party is entitled
to a jury trial is a matter of federal law.

Simler v. Conner, 372

U.S. 221, 221-22 (1963); In re Graham, 747 F.3d 1383, 1387 (11th
Cir. 1984).

Although “the substantive dimension of the claim

asserted finds its source in state law” in diversity cases, “the
characterization of that state-created claim as legal or equitable
for purposes of whether a right to jury trial is indicated must be
made by recourse to federal law.”

Simler, 372 U.S. at 222.

Second, there are two possible sources of plaintiffs’ right
to a jury trial, a federal statute and the federal Constitution.
In re Graham, 747 F.3d at 1387.

None of the parties rely on a

federal statute, but all parties rely upon the U.S. Constitution

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as the source for the right to a jury trial in this case.

(Docs.

#496, pp. 3-7; #499, pp. 1-3.)
Third,

the

Seventh

Amendment

to

the

United

States

Constitution preserves the right to a jury trial “[i]n suits at
common law, where the value in controversy shall exceed twenty
dollars.”

Determination of entitlement to a jury trial under the

Seventh Amendment is a two-step inquiry when a federal statute
does not explicitly provide for a jury trial.
To determine whether a particular action will
resolve legal rights, we examine both the
nature of the issues involved and the remedy
sought. “First, we compare the statutory
action to 18th-century actions brought in the
courts of England prior to the merger of the
courts of law and equity. Second, we examine
the remedy sought and determine whether it is
legal or equitable in nature.” The second
inquiry is the more important in our analysis.
Chauffeurs, Teamsters & Helpers Local No. 391 v. Terry, 494 U.S.
558, 565 (1990) (citing Tull v. United States, 481 U.S. 412, 417–
18 (1987)).

“[T]he first inquiry is nonetheless essential because

the Seventh Amendment only extends to cases in which legal rights
are at stake.”

Stewart v. KHD Deutz of Am. Corp., 75 F.3d 1522,

1526 (11th Cir. 1996).
The views of the parties diverge at this point.

Defendant

asserts that both prongs of the inquiry point to the lack of a
right to a jury trial in this case, while plaintiffs assert that

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both prongs, or at least the more important second prong, point to
the existence of a right to a jury trial.
After

resolution

of

the

summary

judgment

motions,

what

remains to be tried in this case is a portion of Courts I and II
of

the

Second

beneficiaries

Amended
of

the

Complaint.

Rosa

Trust

The
who

three

assert

plaintiffs

that

Wells

are

Fargo

breached its fiduciary duties as corporate trustee in connection
with

the

investment

in

and

maintenance

of

the

Banyan

Blvd.

property, in violation of the prudent investor standard of Florida
Statute § 518.11(1)(a).

More specifically, plaintiffs assert that

Wells Fargo breached the prudent investor standard by causing the
Rosa Trust to acquire a one-third interest in the Banyan Blvd.
Property for $2 million when it was valued at less than $700,000,
and by spending funds in the maintenance of the property.
#93, ¶¶ 22-26.)

(Doc.

This is alleged to have been imprudent and done

in bad faith (id. at ¶¶ 37-38, 42), and resulted in diminution of
the value of the Rosa Trust (id. at ¶ 45).
Generally, an action for breach of a trustee’s fiduciary
duties would have been brought in courts of equity in eighteenth
century courts of England prior to the merger of the courts of law
and equity.

Chauffeurs, Teamsters & Helpers Local No. 391, 494

U.S. at 567.

See also Pereira v. Farace, 413 F.3d 330, 338-39 (2d

Cir. 2005); Bogosian v. Woloobojan Realty Corp., 323 F.3d 55, 61
n.4 (1st Cir. 2003); In re Jensen, 946 F.2d 369, 371 (5th Cir.

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1991).

The

requirement

of

a

jury

trial

under

the

Seventh

Amendment, however, “depends on the nature of the issue to be tried
rather

than

the

character

of

the

Bernhard, 396 US. 531, 538 (1970).

overall

action.”

Ross

v.

The Court finds that the issues

remaining in this case – whether Wells Fargo breached its fiduciary
duty by allowing the investment in and maintenance of the property
- would have been brought in courts of equity in eighteenth century
courts of England prior to the merger of the courts of law and
equity.

Therefore, the first factor weighs against a jury trial.

To remedy this breach, plaintiffs seek compensatory damages
on behalf of the Rosa Trust.

Plaintiffs calculate the amount of

damages as the difference between the appraised value of the one
third interest and the one half interest the Rosa Trust should
have received.

(Doc. #499, p. 3.)

If plaintiffs prevail, Wells

Fargo would be required to place this amount of money into the
Rosa Trust.

No money would be paid directly to any of the

plaintiffs, but each plaintiff may receive a portion of the money
in the form of distributions from the Rosa Trust.
The Court finds that the remedy sought in this case is
equitable in nature.

Typically, remedies of a beneficiary against

a trustee are exclusively equitable.

Local 92 Int’l Ass’n of

Bridge Wrokers v. Norris, 383 F.2d 735, 741 (5th Cir. 1967);
Restatement (Second) of Trusts § 197. Plaintiffs here seek no
direct money damages to themselves.

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Rather, they seek an order –

essentially an injunction – directing Wells Fargo to place monies
into the Rosa Trust in an amount which will compensate the Rosa
Trust for its breach of fiduciary duties – essentially restitution.
Such relief is equitable in nature.

Chauffeurs, Teamsters &

Helpers Local No. 391, 494 U.S. at 570-71.
Accordingly, it is hereby
ORDERED:
Defendant's Motion to Strike Plaintiff's Jury Demand (Doc.
#496) is GRANTED.

Plaintiffs’ jury demand for the remaining

portion of this case is stricken.
DONE and ORDERED at Fort Myers, Florida, this
of January, 2016.

Copies:
Counsel of Record

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27th

day