Cardinal Health Ventures, Inc v. Michael Scanameo, M.D., Carol Scanameo, and Michael Scanameo, M.D., Inc
85 N.E.3d 637
| Ind. Ct. App. | 2017Background
- In 2007 and 2008 Cardinal Health sold shares of two medical clinics to Michael and Carol Scanameo (and Michael Scanameo, M.D., Inc.) for $542,453.88; the Scanameos later sued alleging securities fraud, claiming the shares were "worthless."
- The Scanameos filed suit and timely demanded a jury trial on August 5, 2013; they later amended the complaint without substantive change.
- On August 31, 2016 the Scanameos moved to strike (withdraw) their prior jury demand; Cardinal Health refused to consent.
- The trial court granted the Scanameos’ motion on February 1, 2017, prompting Cardinal Health’s interlocutory appeal.
- The Court of Appeals reversed, concluding the action was legal in character (seeking monetary relief) and that Trial Rule 38(D) bars withdrawal of a timely jury demand without opposing party consent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Scanameos could withdraw a timely jury demand without Cardinal Health's consent | The amended statute language and phrase "determined by the court or arbitrator" indicate the claim should be decided by the court (i.e., no jury needed) | Trial Rule 38(D) prevents withdrawal of a timely jury demand absent consent; the claim is legal and triable by jury | The trial court erred; the jury demand could not be withdrawn without Cardinal Health's consent and the case must be set for jury trial |
| Whether the securities-fraud claim is legal or equitable in nature | Statutory language and amendment suggest court determination (equitable) | The complaint seeks money damages; historically securities/fraud claims are legal and triable by jury | The claim is legal in character because it requests monetary relief and involves factual issues for a jury |
| Whether statutory wording "determined by the court or arbitrator" strips right to jury | Phrase applies only to attorney's fees, not the entire statute, because of comma placement and statutory context | The statute does not alter constitutional jury rights; the phrase governs fee determination only | The phrase is read to limit who determines fees (court or arbitrator), not to eliminate jury trial rights |
| Whether precedent supports jury trial for fraud/securities claims | (implicit) statute/amendment should control | Federal and state precedent treat securities/fraud as jury-triable; reliance is a factual issue for jury | Court found persuasive authority and prior fraud cases supporting jury trials; jury right preserved |
Key Cases Cited
- Midwest Fertilizer Co. v. Ag-Chem Equip. Co., 510 N.E.2d 232 (Ind. Ct. App. 1987) (distinguishing legal vs. equitable actions for jury right analysis)
- Winney v. Bd. of Comm’rs of Vigo Cty., 369 N.E.2d 661 (Ind. Ct. App. 1977) (explaining test for classifying claims as legal or equitable)
- Plymale v. Upright, 419 N.E.2d 756 (Ind. Ct. App. 1981) (fraud claims involve reliance and factual issues for jury)
- Dairy Queen, Inc. v. Wood, 369 U.S. 469 (1962) (claims seeking money judgments are legal in character)
- Hamlin v. Sourwine, 666 N.E.2d 404 (Ind. Ct. App. 1996) (a timely jury demand is an invocation of a constitutional right that survives amendments)