Zhu v. Li

Background

The parties appeared for a pretrial conference on October 3, 2022. The order addressed whether Plaintiff JiaJie Zhu’s accounting claim was legal or equitable for purposes of the Seventh Amendment right to a jury trial. The opinion states that Zhu alleged Defendants Jing Li and others misrepresented Teetex’s tax returns and profits, breached fiduciary duties, and breached a contract. Zhu sought an accounting to determine whether money was owed and, if so, how much.

Zhu argued that the claim was equitable because it involved an alleged breach of trust and the distribution of partnership assets. He also argued that the accounting would be complex because it would require examining business records of Teetex and other entities. Finally, he asked that the accounting issue be tried separately to conserve court and jury resources. The defendants disagreed with Zhu’s position that the claim was equitable.

Accounting Claim and Jury Trial

The court explained that the right to a jury trial depends on the nature of the action and the remedy sought, with the remedy being the more important consideration. An accounting can be legal or equitable depending on the claims and relief involved.

The court concluded that Zhu’s accounting request was based on alleged contract and tort claims, rather than equitable claims. Because Zhu was effectively seeking to determine and recover a debt or damages, the court held that the accounting claim was legal and triable by a jury. The court also rejected the complexity argument, finding that examining business records did not by itself make the legal remedy inadequate and that Zhu had not shown this was the rare case in which the accounting was beyond a jury’s ability to resolve.

The court further ruled that all claims would be tried at the same time. Zhu had not identified prejudice from a joint trial, and the court found the claims appeared intertwined.

Additional Pretrial Rulings

The court permitted the parties to file additional motions in limine, which are requests to decide evidentiary issues before trial. The permitted subjects were Zhu’s request to exclude the defendants’ expert’s testimony and the defendants’ request to preclude testimony from their counsel, Yi Yao. The court set deadlines for opening briefs and responses and stated that it would address the motions at the further pretrial conference scheduled for February 6, 2023. The court did not permit reply briefs.

The parties were also ordered to meet and confer about a joint proposed special verdict form and a stipulation concerning how witnesses with multiple first names would be referred to during trial. Before the February 6, 2023 conference, they were ordered to attend a further settlement conference before Judge Illman. The order was signed by Judge Jeffrey White and dated October 6, 2022.