The opinion of the court was delivered by: Robert J. Ward, District Judge.
Plaintiff Herman Resnick ("Herman") has moved to strike the
jury demand contained in the Corrected Answer to the First
Amended Complaint filed by defendant Irving Resnick ("Irving").
For the reasons that follow, the motion is granted in part and
denied in part.
The facts giving rise to this most recent episode in the
longstanding and bitter quarrel between the Resnick brothers
have been fully documented in prior decisions of this Court,
and need not be repeated here at length.*fn1
Herman and Irving jointly owned and operated their family
business, F. Resnick Inc. ("F. Resnick"), beginning in or about
1955. F. Resnick operated as an importer and distributor of
fabrics to clothing manufacturers in the United States and
since the 1970's imported fabrics primarily from Prato, Italy.
Each brother with his wife owned half of the shares of the
company. Irving and Herman were also co-trustees of the F.
Resnick, Inc. Employees Pension Plan and Trust (the "Pension
Plan"), a defined benefit plan and a qualified employee pension
plan under section 401 of the Internal Revenue Code, 26 U.S.C. § 401
et seq., and the F. Resnick Inc. Retirement
Plan and Trust (the "Retirement Plan"), a defined contribution
plan under the Employee Retirement Income Security Act
("ERISA"), 29 U.S.C. § 1001 et seq. (the
Retirement Plan and the Pension Plan are collectively referred
to as the "Plans"). For many years Standard Security Life
Insurance Company of New York ("SSI") was engaged to perform
all actuarial and administrative services for the Pension Plan.
On or about March 20, 1984, the parties adopted a series of
corporate resolutions settling the first lawsuit (the
"Resolutions"), and providing for the immediate dissolution of
F. Resnick, the termination of the Plans, the distribution of
their assets to the participants and the retention of CMS
Pension Service ("CMS") to terminate the Plans. CMS calculated
Irving's entitlement from the Pension Plan as a lump sum
payment of $1,009,332, which was $27,739 less than had been
calculated earlier as his lump sum entitlement by SSI. Herman
contends that he prepared a letter authorizing payment of the
vested benefits under the Plans as calculated by CMS. He also
claims that when he asked Irving, as co-trustee of the Plans,
to sign the letter, Irving refused and threatened him with
arrest. Herman subsequently commenced this lawsuit.
The instant action was begun on November 15, 1985, by Herman,
individually and as co-trustee of the Plans, seeking to recover
his vested accrued benefits under the Plans. Herman alleged
that Irving breached his fiduciary duty as a trustee under
ERISA for failing to authorize payment of Herman's benefits.
Herman asked that his benefits be paid, that Irving be removed
as co-trustee of the Plans and that Herman be awarded his costs
of bringing the action and punitive damages of $1,000,000.
In his answer, Irving asserted counterclaims against Herman,
alleging that Herman had embarked on a course of action that
would destroy F. Resnick by forming a business that competed
directly with F. Resnick. Irving claimed that Herman spent over
80% of his time at the new company, had transferred half of F.
Resnick's inventory to the new company and solicited business
away from F. Resnick for the benefit of that company. Irving
contended further that Herman impaired the ability of F.
Resnick to function by withdrawing his personal guarantee of F.
Resnick's indebtedness as security for credit extended by
Manufacturers Hanover Trust Company ("MHT"), the bank where F.
Resnick maintained its corporate account. Irving charged that
Herman conspired with his son, Steven Resnick ("Steven") and
Max Landa ("Landa"), an employee of F. Resnick, to defraud F.
Resnick by diverting the assets, customers and good will of F.
Resnick. As a result of this conspiracy and Herman's breach of
his fiduciary duty to F. Resnick, Irving sought damages as well
as the return of Herman's salary and benefits and the salaries
and benefits of Herman's co-conspirators to F. Resnick. Irving
also sought damages from Herman in the amount of $27,739,
representing the difference between the amount of his vested
pension benefits as calculated by SSI and the amount he
This Court's Memorandum Decision dated May 18, 1988 granted
partial summary judgment to Herman and ordered Irving to pay
Herman the full amounts of his benefits due under the Plans,
except for those benefits that accrued during the year the
Plans were terminated.
On February 10, 1989, Irving filed a First Amended Answer,
Counterclaims and Cross-Claims which added MHT as a defendant
on the counterclaims, alleging that MHT participated in the
conspiracy to destroy F. Resnick. Herman then filed a First
Amended Complaint, which made new claims against Irving, and
added Arnold and A. Resnick as defendants. The First Amended
Complaint included allegations, in a "mirror image" of Irving's
conspiracy claim against Herman, that Irving had conspired with
his son Arnold Resnick ("Arnold") to dismantle F. Resnick and
transfer its customers, suppliers and other resources to A.
Resnick, a competing business which Irving and Arnold caused to
be formed. Herman also alleged that Irving breached his
fiduciary duties to F. Resnick by forming A. Resnick. The First
Amended Complaint also contained claims against Irving for
breach of contract, alleging that
Irving violated the agreement contained in the Resolutions by
inter alia, instituting further lawsuits against
Herman and receiving $23,625 from F. Resnick that Irving
claimed was wrongfully contributed to the Pension Plan.
On April 3, 1989, Irving filed his Answer to the First
Amended Complaint, again asserting claims against MHT and the
other third-party defendants.*fn3 Irving sought disgorgement
of the profits of Resnick & Landa, Inc. ("Resnick & Landa"),
the company Herman allegedly formed as part of the conspiracy
to destroy F. Resnick, as well as damages in the amount of
$10,000,000 from all of the alleged co-conspirators. Irving's
answer included a claim for intentional infliction of emotional
distress against all of the co-conspirators. Irving's answer
also alleged that Herman had fraudulently induced Irving to
enter into the agreement contained in the Resolutions, and
sought to rescind that agreement. The answer also contained
several ERISA claims, in which Irving claimed that Herman
breached his fiduciary duty as co-trustee of the Plans by
failing to ...