F & D PROPERTY CO. v. Alkire

• Court: U.S. Court of Appeals — Tenth Circuit
• Writing for the Court: PICKETT, HILL and HICKEY, Circuit
• Citation: F & D PROPERTY CO. v. Alkire, 385 F.2d 97 (10th Cir. 1967)
• Decision Date: 06 November 1967
• Docket Number: No. 9430.,9430.
• Parties: The F & D PROPERTY CO., a Corporation, and Fred M. Winner, Receiver, Appellants, v. James H. ALKIRE et al. and Younker Brothers, Inc., Appellees.

385 F.2d 97 (1967)

The F & D PROPERTY CO., a Corporation, and Fred M. Winner, Receiver, Appellants, v. James H. ALKIRE et al. and Younker Brothers, Inc., Appellees.

No. 9430.

United States Court of Appeals Tenth Circuit.

November 6, 1967.

Richard L. Eason, of Van Cise, Freeman, Tooley & Eason, Denver, Colo., for appellants.

Donald S. Graham, of Davis, Graham & Stubbs, Denver, Colo. (Dale R. Harris, Denver, Colo., was with him on the brief), for appellees.

Before PICKETT, HILL and HICKEY, Circuit Judges.

PICKETT, Circuit Judge.

This action was brought by the present owners of leased property in Denver, Colorado, to recover delinquent rentals and other charges due under the terms of the lease. The complaint alleges that the defendant Younker Brothers, Inc., a Delaware corporation, had, by written agreement, assumed the obligations imposed upon the original lessee and was liable for the delinquent rentals and other charges. Younker Brothers instituted third party proceedings against appellants alleging that it was entitled to judgment against appellants for any amounts found to be due from it to the plaintiffs, appellees herein, on the lease. Appellants, in their answer to the third party complaint, denied any liability to the third party plaintiff and alleged affirmatively that they were never assignees of the leasehold estate. Plaintiffs' motion for summary judgment was sustained, and upon a determination that there was no just reason for delay, the court entered judgment for the plaintiffs against Younker Brothers. Only the third party defendants have appealed. The primary contentions presented are (1) there were material issues of fact existing between the plaintiff and third party defendants, and summary judgment was inappropriate; (2) that by reason of a notice of default the lease was terminated and there was no further liability thereon; and (3) the trial court erred in entering final judgment against Younker Brothers.

There is no dispute as to the material facts. On April 21, 1909, John D. Alkire entered into a 99-year lease agreement with the Daniels & Fisher Stores Company, a Colorado corporation, covering Lots 17 and 18, Block 76, East Denver, Colorado, upon which the lessee agreed to construct the building commonly known as "The Daniels & Fisher Tower." The lease provided for an annual rental of $12,500.00, payable semi-annually in advance. In addition, the lessee was required to pay all taxes and adequately insure the building and improvements located on the leasehold premises. The building was constructed and occupied by the Daniels & Fisher Stores Company until approximately 1957, when the corporate name was changed to Lawrence Corporation. In 1958 Lawrence Corporation assigned the leasehold estate to Webb & Knapp, Inc., with no assumption by the assignee of the lessee's obligations under the lease. Webb & Knapp assigned the lease to Hyman Wiener, who assigned it to Samuel Lemberg. Lemberg then assigned the lease to Webb & Knapp, which in turn assigned it to Tower Merchandise Mart. Tower Merchandise Mart executed to Webb & Knapp a purchase money deed of trust, which included the leasehold estate, as well as other property. Tower Merchandise Mart defaulted in payments and Webb & Knapp commenced foreclosure proceedings in the Denver District Court. Fred M. Winner was appointed Receiver in October, 1960. In July 1963, Chemical Bank New York Trust Company purchased the leasehold estate through the foreclosure proceedings and thereafter assigned its interest in the leasehold estate to appellant F. & D. Property Company. Meanwhile, in January of 1962, Lawrence Corporation assigned the lease to Younker Brothers, which agreed in writing to assume and perform all obligations required by the lease. At that time appellees were the successors in interest of the original lessor, John D. Alkire, and Younker Brothers executed a separate agreement with them in which it assumed the lease obligations of the Lawrence Corporation. Except for Younker Brothers, the various assignees did not assume the lessee's obligations under the lease. On December 3, 1963, the property owners notified Younker Brothers that there was default in the payments of rentals due and made demand for payment thereof.¹ On March 1, 1966 there were due and unpaid six semi-annual rental payments of $6,250 each, and unpaid real property taxes totaling $22,059.91.

At a pre-trial conference, appellees and Younker Brothers submitted a stipulation of facts and a stipulation of contested issues of fact and law. The pretrial order required the third party defendants to join in the stipulations or to file particular reasons for not doing so. In compliance with the order, the appellants joined in some portions of the stipulations and refused to join in others. Thereafter appellees filed a motion for summary judgment based upon the record and the stipulation of facts. Their pleadings had been limited to answering the third party complaint, and no claim was made that Younker Brothers had failed to fully answer plaintiff's complaint. No attempt was made to show that any of the facts stipulated were untrue. The record does not disclose that they objected to the entry of a judgment against Younker Brothers. Appellants now contend that, not having agreed to the complete stipulation of facts upon which the court relied in granting the summary judgment, there were disputed issues of fact which remained to be resolved before judgment could be entered against Younker Brothers.

Rule 14, F.R.Civ.P., authorizes a third party defendant to assert against the plaintiff any defense which the original defendant has to plaintiff's claim and any other claim against the plaintiff arising out of the transaction or occurrence that is the subject matter of plaintiff's claim against the third party plaintiff. For the purpose of defense against plaintiff's complaint, a third party defendant is in the law suit as an adverse party to the same extent as the defendant and must act accordingly. This assures a third party defendant complete defense protection in an action where he may be liable for the judgment in favor of the plaintiff. See, 3 Moore's Federal Practice, § 14.13; Wiggins v. City of Philadelphia, 3 Cir., 331 F.2d 521, 529.

In disposing of a motion for summary judgment under Rule 56, F.R. Civ.P., the trial court shall consider the pleadings, affidavits attached to the motion, depositions, answers to interrogatories, and stipulations. When a motion for summary judgment is made and so supported, "(A)n adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him." Rule 56(e), F.R.Civ.P.; Scarboro v. Universal C.I.T. Credit Corp., 5 Cir., 364 F.2d 10; Dressler v. MV Sandpiper, 2 Cir., 331 F.2d 130; see, 6 Moore's Federal Practice § 56.01, p. 2021. Quite clearly a third party defendant may resist plaintiff's motion for summary judgment to the same extent as the defendant, but he is in no better position than the defendant, and the requirement to...