State ex rel. Konen Construction Co. v. United States Fidelity & Guaranty Co.

LUSK, J. This case is here for the second time. See Konen Const. Co. v. U. S. Fid. & Guar. Co., 234 Or 554, 380 P2d 795, 382 P2d 858. It commenced as an action against the United States Fidelity & Guaranty Company, hereinafter referred to as the surety, on a highway construction bond. Relator, J. F. Konen Construction Company, an Idaho corporation, hereinafter referred to as Konen, was a subcontractor who furnished rock to the general contractor, Cora Graham, doing business as Twin City Construction Company, and Clarence Braden, hereinafter referred to as intervenors. Before trial intervenors moved to intervene on the ground that they furnished the bond sued upon and had entered into an indemnity agreement with the surety under which they would be liable for any judgment against the surety. Over Konen’s objection the motion was allowed and a pleading, erroneously styled “Amended Complaint in Intervention,” was filed which was both an answer to Konen’s complaint and a counterclaim for damages based on Konen’s alleged breach of contract to furnish crushed rock to the intervenors. [297] Konen’s complaint contained two canses of action, the first for the balance due for crushed rock furnished intervenors, the second for the balance due from intervenors for rental of equipment. There was also a demand for attorneys’ fees. The case was tried before the court without a jury. The court found for Konen and against the surety on both causes of action, but disallowed the claim for attorneys’ fees. The court made findings of fact and conclusions of law to the effect that intervenors were liable to Konen for the sums found due on both causes of action, that Konen was not liable to intervenors on their counterclaim and that intervenors were liable over to the defendant United States Fidelity & Guaranty Company. The only judgment entered, however, was against the surety. From this judgment the surety appealed, as did intervenors, notwithstanding there was no judgment against them. This court affirmed, with some modification, the judgment on the first cause of action, but reversed as to the second cause of action because Konen had failed to give the statutory notice (ORS 279.526) of its claim for equipment rental. Konen cross-appealed from the court’s disallowance of attorneys’ fees and we affirmed the trial court’s action in this regard for the reason that the only claim for attorneys’ fees related to the second cause of action. Konen petitioned for a rehearing, asking either that this court enter judgment on the second cause of action against intervenors or that the case be remanded to the trial court to permit it to enter such judgment. We thereupon modified our former opinion by remanding the case for further proceedings on the second cause of action. We said: “Our former opinion is modified to the extent [298] that the judgment on the second cause of action is reversed, but shall now be remanded. The trial court shall proceed in whatever manner is deemed necessary to determine whether or not judgment in the second cause of action shall be entered against the intervening defendants. The trial court’s discretion shall be governed by ORS 16.390 and its general discretion to regulate the proceedings in its court.” 234 Or at 565-566. The mandate contained the following direction: “It further is ordered that plaintiff’s second cause of action be remanded to said court for further proceedings to determine whether or not judgment shall be entered against the intervening defendants.” Upon the remand intervenors moved for a judgment of voluntary nonsuit and Konen moved for an order permitting it “to file a responsive pleading, which is tendered herewith, to Interveners Amended Answer and Cross Complaint to conform the pleadings to the proof in said cause.” The tendered pleading contained a denial of the allegations of the so-called cross complaint and a counterclaim for the balance owing by intervenors for equipment rental. The two motions were heard together. The court denied intervenors’ motion and allowed Konen’s and the tendered pleading was filed. Thereafter intervenors filed an “Answer” in which they alleged affirmatively that Konen had refused to seek a judgment against intervenors until after the decision of this court on appeal for the sole reason that Konen sought an award of attorneys’ fees from United States Fidelity & Guaranty Company. After a hearing which consisted of an extended colloquy between court and counsel and the introduc [299] tion of evidence by the intervenors, not pertinent to the question of their liability and which we regard as irrelevant, the court announced that it would dismiss the action without prejudice and made findings of fact and conclusions of law and entered judgment accordingly. From that judgment Konen has appealed. We think the decision should not be disturbed. The court made a conclusion of law that Konen waived its right to maintain its counterclaim against the intervenors.① This conclusion is clearly warranted. Konen knew that it was not entitled to a judgment against intervenors in the absence of a pleading to support it, and knew that the court was willing to enter such a judgment under a proper pleading; yet deliberately, it must be assumed, and for reasons still not disclosed, though full opportunity for disclosure has been given it, chose not to file an amended pleading until after the decision of this court. In remanding the case we committed the decision of the question to the sound discretion of the circuit court. The discretion to be exercised by the trial court was not only the discretion to permit amended pleadings to be filed, as provided by ORS 16.390, but the “general discretion to regulate the proceedings in its court.” This is the law of the ease. In response to Konen’s petition for rehearing we denied its request either to enter judgment against intervenors or to direct the trial judge to enter such judgment. Konen on this appeal would have us change the law of the case and direct the trial judge to enter judgment against intervenors, notwithstanding we previously held this to [300] be a matter for the discretion of the trial judge. This we decline to do. If any change should be made in the law of the case, it might rather be to hold that we were in error in the first instance in not having denied outright Konen’s petition for a rehearing. We could well have said that, there being no judgment against the intervenors, and Konen not having sought any relief against them by its cross-appeal, they were not even proper parties on the first appeal; but, if they were such parties, then we might have said that Konen, who had steadfastly refused to seek a judgment against the intervenors in the circuit court and likewise in the Supreme Court, until after a partially unfavorable decision here, was in no position to ask this court or the circuit court to approve its volte face and to give it the judgment which up to this time it had seemed to regard with disdain. This is a kind of trifling with the judicial process which courts frown upon,② and although some public inconvenience may result from the refusal to sanction it in this instance, that is the price which must be paid for the preservation of an essential of orderly procedure. These considerations may well have influenced the decision of the circuit judge. We find no abuse of the discretion which we committed to him and, therefore, have no authority to disturb his decision. The judgment is affirmed. Footnotes [①] As indicated by the judgment of dismissal “without prejudice,” the waiver found applies only to the right of Konen to pursue its remedy in the case then before the court. [②] See opinion on petition ior rehearing in this case, 234 Or at 565.