City of Rogue River ex rel. Ide v. DeBoer

• Citation: 288 Or. 485,605 P.2d 697
• Decision Date: 22 January 1980
• Docket Number: No. 76-2781-L-2,76-2781-L-2
• Parties: CITY OF ROGUE RIVER, Oregon, a Municipal Corporation, ex rel. Dee Earl IDE, aka Dee Ide Trucking & Contracting, and Dee Earl Ide, Appellant/Respondent, v. Wayne DeBOER and Roy L. Carlton, partners, doing business as R&W Construction Co., Respondents, Insurance Company of North America, a Pennsylvania corporation, Respondent/Petitioner. ; CA 11337; SC 26402.
• Court: Supreme Court of Oregon

Page 697

605 P.2d 697

288 Or. 485

CITY OF ROGUE RIVER, Oregon, a Municipal Corporation, ex rel. Dee Earl IDE, aka Dee Ide Trucking &amp Contracting, and Dee Earl Ide Appellant/Respondent, v. Wayne DeBOER and Roy L. Carlton, partners, doing business as R&W Construction Co., Respondents Insurance Company of North America, a Pennsylvania corporation, Respondent/Petitioner.

No. 76-2781-L-2; CA 11337; SC 26402.

Supreme Court of Oregon.

Argued and Submitted Nov. 8, 1979.

Decided Jan. 22, 1980.

Hugh B. Collins, Medford, argued the cause for respondent/petitioner Ins. Co. of North America. With him on the brief was Collins, Velure & Heysell, Medford.

William G. Purdy, Medford, argued the cause for appellant/respondent. With him on the briefs was Frohnmayer, Deatherage, Foster & Purdy, Medford.

No appearance for respondents Wayne DeBoer and Roy L. Carlton.

Before DENECKE, C. J., and HOLMAN, TONGUE, HOWELL, LENT and PETERSON, JJ.

PETERSON, Justice.

This is an action by a supplier of granite to recover $3,300 for granite supplied to the City of Rogue River sewer construction project. ¹ The plaintiff brought this action against the contractor (a partnership doing business as R&W Construction Company (R&W)) and against its surety, Insurance Company of North America (INA). Plaintiff sought to recover the contract price of the crushed granite or its reasonable value from R&W and INA. He alleged that INA was liable either on its bond or because it assumed the contract and became the general contractor on the project.

After the presentation of all of the evidence, INA moved for a directed verdict. INA argued that there was no evidence that it requested or agreed to pay for anything supplied by plaintiff, and that it was not liable on its bond because the evidence failed to show that R&W requested or agreed to pay for any granite. INA also argued that even if R&W had requested or agreed to pay for the materials, the bond penalty had been exhausted, and that it was not liable on the bond beyond the bond penalty of $424,812. ² Defendant R&W also moved for a directed verdict.

The trial court granted both motions for directed verdict. The plaintiff then appealed, assigning as error the granting of the motions for directed verdict and the refusal of the trial court to admit into evidence the minutes of a City Council meeting at which INA's attorney explained INA's position with respect to R&W's problems on the sewer project. The Court of Appeals reversed in a per curiam opinion, ³ citing Copeland Sand v. Ins. Co. of N. Amer., 40 Or.App. 831, 596 [288 Or. 488] P.2d 623 (1979). Only INA petitioned this court for review. We reverse and remand for a new trial.

We review the evidence in the light most favorable to the party against whom the motion for a directed verdict was granted. Hemstreet v. Spears, 282 Or. 439, 441, 579 P.2d 229 (1978); Foster v. Schnell Refrigeration Co., 280 Or. 411, 414, 571 P.2d 497 (1977). The verdict was properly directed in this case only if there was no evidence that INA requested or agreed to pay for the granite or if there was no conflict in the testimony and it was capable of only one construction. Brown v. Johnston, 258 Or. 284, 285-286, 482 P.2d 712 (1971); Archer v. Rogers Construction, 252 Or. 165, 169, 447 P.2d 380 (1968); Young v. Crown Zellerbach, 244 Or. 251, 259, 417 P.2d 394 (1966).

The first issue before this court is whether there is any evidence that INA requested or agreed to pay for materials delivered by the plaintiff.

INA stipulated that plaintiff delivered granite to the project having a reasonable value of $3,300 between November 9 and November 26, 1974. There was also evidence that a bill for that amount was sent by the plaintiff to R&W in care of INA, the bonding company. A partner in R&W, Wayne DeBoer, "okayed" the amount of the bill for the granite. INA did not pay this bill, although it paid other bills received at about the same time.

DeBoer's approval of the bill could be construed to constitute an admission that the materials were ordered, were received, and that they were used on the project. The question then becomes: Is there any evidence that the admission of DeBoer is binding on INA? We believe that there was evidence from which a jury could find that DeBoer's admission could be attributed to INA. ⁴ That evidence, set out in the light most favorable to the plaintiff, is as follows:

R&W Construction Company contracted with the City of Rogue River in 1973 to construct a sewer system. INA was the surety on a performance and payment bond for R&W. On June 13, 1974, R&W sent a letter to INA which gave notice of "impending voluntary default upon the * * * contract" and requested INA's intervention. INA notified the City of R&W's problems and requested the City to stop paying R&W and begin making progress payments to INA. R&W assigned to INA its right to receive the contract payments from the City. INA then hired another construction company, Tru-Mix Construction Company (Tru-Mix) to " * * * provide supervision and administration for Bonding Company (INA) in the completion of (the) contract * * * ." In the recitals of the contract, it was stated that "As a result of certain differences between the City of Rogue River and R&W Construction Co., Bonding Company is undertaking to complete said contract on behalf of R&W Construction Co." Tru-Mix was given authority to " * * * hire On behalf of Bonding Company as surety for R&W Construction Co. such labor and other personnel, as in the judgment of Tru-Mix, shall be required in the completion of said contract, and shall have the right to discharge any personnel employed on the job." (Emphasis added.) Tru-Mix was also given authority to purchase materials and lease equipment and facilities necessary for the project. Tru-Mix remained in this contractual position until September 1, 1974, when by mutual agreement the contract was terminated. At that time Wayne DeBoer, a partner in R&W, returned and began "actively running" the job.

There is evidence from which the trier of fact could conclude that when DeBoer returned to the project on September 1 he was administering the job for INA in the same manner in which Tru-Mix had contracted previously, and not as a partner in R&W. In a letter to Tru-Mix in which INA agreed to terminate its contract with Tru-Mix, the manager of casualty claims for INA wrote:

" * * * Mr. Wayne DeBoer indicated a sincere desire to mitigate his own personal loss and that of his firm by getting in and actively overseeing the completion of the sewer project for the City of Rogue River. After sincere deliberation by all concerned, we have decided...