The opinion of the court was delivered by: EUGENE H. NICKERSON
NICKERSON, District Judge:
These actions were the subject of Memoranda and Orders dated August 16, 1990 (the 1990 Order), July 11, 1991 (the 1991 Order), and March 5, 1992 (the 1992 Order), familiarity with which is assumed. Defendant Leon J. Levitz objects in part to the 1992 Order vacating the judgments as to damages against him and referring the action to Magistrate-Judge Chrein to hear and report on damages.
On September 17, 1985, plaintiff Frankart Distributors, Inc. (Frankart), a New York furniture distributor, brought one of these actions, 85 CV 3452, (the Frankart Action), against Levitz and Arnold A. Smith. Levitz was the Chairman and 30% shareholder of John F. Lawhon Furniture Company (later W. & J. Sloane Corp.) (Lawhon), and Smith was a director and 12% shareholder of Lawhon. The action was for breach of contract, fraud and negligence under state law in Lawhon's acquisition of Frankart's furniture inventory. Plaintiff demanded a trial by jury.
In a related action, 85 CV 3173 (the Frankel action), plaintiffs Bernard, Lillian, and Paul Frankel and Robert Kirsch (Shareholders), the shareholders of various corporations operating as Frankart furniture retailers, brought an action against Lawhon, Levitz and Smith for securities fraud under Sections 10(b) and 20 of the Securities and Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t, and state common law. This complaint also stated a demand for a jury trial.
On October 18, 1985 Levitz stipulated in both actions to a month extension to answer or otherwise move. That date to answer was again extended until December 6, 1985, and again until December 27, 1985. Further stipulations were granted extending the time to answer because the parties were engaged in settlement negotiations. In early May 1986 plaintiffs declined to extend further Levitz's time to answer. He never answered the complaints.
In July 1986 the court granted default judgments in the Frankart Action and the Frankel Action for $ 1,750,000 and $ 2,184,569, plus attorneys' fees and costs, respectively.
More than four years later, in the August 1990 Order, the court denied Levitz's motion to vacate the judgments against him as to liability. But upon his argument that the court should hold a hearing to determine the amount of damages, the court ordered vacation of the judgments as to damages on condition that Levitz post a $ 100,000 bond. The court also stated that "the matter is referred to the magistrate to hold a hearing and make a report on the issue of damages."
In the 1991 Order the court held that the bond submitted by Levitz was insufficient because it was not an unconditional promise to pay plaintiffs up to $ 100,000 of whatever damages the court decided to award.
When Levitz amended his bond to comply with the conditions, the court, pursuant to the 1992 Order, vacated the judgments in so far as they related to damages. The court again ordered the case referred to a Magistrate Judge to hear and report on the issue of damages.
Over two months later, on May 15, 1992, Levitz filed a "Motion for Jury Trial" and a brief entitled "Levitz's Motion for Jury Trial -- Partial Objection to Reference to Magistrate and Accompanying Memorandum of Law."
Pursuant to Rule 39 of the Federal Rules of Civil Procedure, if trial by jury has been demanded by a party, "the trial of all issues so demanded shall be by jury unless (1) the parties . . . consent to trial by the court sitting without a jury or (2) the court . . . finds that a right of trial by jury . ...