Acoustic Specialties, Inc. v. Wright

• Decision Date: 17 September 1982
• Docket Number: No. 13666,13666
• Citation: 651 P.2d 529,103 Idaho 595
• Parties: ACOUSTIC SPECIALTIES, INC., Plaintiff-Respondent, v. Wallace A. WRIGHT, Jr., Willard R. Wood, W. Coy Wood, dba Hilton Inn, Defendants-Appellants, RK & A Jones, Inc., Defendant, and WHW Management, Inc., Intervenor-Appellant. GRANITE MILL & FIXTURE COMPANY, Plaintiff-Respondent, v. Wallace A. WRIGHT, Jr., Willard R. Wood, W. Coy Wood, dba Hilton Inn, Defendants-Appellants, RK & A Jones, Inc., Defendant, and WHW Management, Inc., Intervenor-Appellant.
• Court: Idaho Supreme Court

Page 529

651 P.2d 529

103 Idaho 595

ACOUSTIC SPECIALTIES, INC., Plaintiff-Respondent, v. Wallace A. WRIGHT, Jr., Willard R. Wood, W. Coy Wood, dba Hilton Inn, Defendants-Appellants RK & A Jones, Inc., Defendant and WHW Management, Inc., Intervenor-Appellant GRANITE MILL & FIXTURE COMPANY, Plaintiff-Respondent, v. Wallace A. WRIGHT, Jr., Willard R. Wood, W. Coy Wood, dba Hilton Inn, Defendants-Appellants RK & A Jones, Inc., Defendant, and WHW Management, Inc., Intervenor-Appellant.

No. 13666.

Supreme Court of Idaho.

Sept. 17, 1982.

William Francis Bacon, Louis F. Racine and Thomas J. Holmes, Pocatello, for defendants-appellants and intervenor-appellant.

Lowell N. Hawkes and DaLon Esplin, Pocatello, for plaintiffs-respondents.

McFADDEN, Justice.

The instant appeal arises out of two separate actions for materialmen's liens, pursuant to I.C. §§ 45-501 et seq. Acoustic Specialties, Inc., brought its action to foreclose its claim of lien against Wallace A. Wright, Jr., Willard R. Wood, and W. Coy Wood, doing business as Hilton Inn, and R.K. & A. Jones, Inc. Similarly, Granite Mill and Fixture Company brought its action to foreclose its claim of lien against the same defendants. During the course of the proceedings in the two actions, W.H.W. Management, Inc., intervened in both actions as the lessee of the real property upon which Acoustic Specialties and Granite Mill and Fixture sought to foreclose their respective claims of lien and as the party which contracted with R.K. & A. Jones for the construction work giving rise to the two claims. W.W.H. Management interposed certain defenses to the two causes of action and cross claimed against R.K. & A. Jones in both actions. Both Acoustic Specialties and Granite Mill and Fixture obtained garnishee judgments against Wright, Wood and Wood and their partnership enterprise doing business as the Hilton Inn, and ultimately judgments of foreclosure on their respective claims of lien were granted by the district court. The district court, in so ordering, also awarded interest and costs to both plaintiffs and awarded $10,000.00 in attorney fees to Acoustic Specialties and $6,000.00 in attorney fees to Granite Mill and Fixture. The district court stated that the payment of attorney fees, interest and costs could be obtained through the foreclosure on the real property of Wright, Wood and Wood. Thereafter, Wright, Wood and Wood, doing business as Hilton Inn, and W.H.W. Management appealed from the judgments of foreclosure and awards of interest and attorney fees. We affirm.

Wright, Wood and Wood own certain real property in Pocatello upon which is located their partnership enterprise, the Hilton Inn. The real property is leased to W.H.W. Management, which also manages the Hilton Inn. The hotel complex was constructed by R.K. & A. Jones, pursuant to a contract it entered into with W.H.W. Management. Acoustic Specialties and Granite Mill and Fixture were subcontractors on the project for R.K. & A. Jones. Pursuant to their contracts with R.K. & A. Jones, both subcontractors furnished materials and supplies to the general contractor. Upon completion of the construction of the Hilton Inn, R.K. & A. Jones was unable to pay $51,840.33 of the contract price to Acoustic Specialties and was also unable to pay $31,862.54 of the contract price to Granite Mill and Fixture. Representatives of R.K. & A. Jones told both subcontractors that the reason for nonpayment was because R.K. & A. Jones had not received payments from W.H.W. Management on behalf of the Hilton Inn.

Acoustic Specialties and Granite Mill and Fixture respectively filed claims of lien upon the real property on which the Hilton Inn is located. Both subcontractors timely initiated actions to foreclose those liens against Wright, Wood and Wood, as owners of the property, and joined R.K. & A. Jones as a party. The complaint of Acoustic Specialties contained three counts: count 1 was against Wright, Wood and Wood to foreclose a claim of lien filed against their real property in the sum of $51,840.33 plus interest; count 2 was against the same defendants for breach of contract and resulting lost profits and consequential damages of an undetermined amount; and count 3 was against R.K. & A. Jones for obtaining funds from Wright, Wood and Wood and failing to pay over those funds. The complaint of Granite Mill & Fixture was identical in form except the amount claimed against Wright, Wood and Wood was $31,862.54.

Although the causes of action brought by Acoustic Specialties and Granite Mill and Fixture were distinct and separate, they were for all practical purposes treated as one case and all arguments on either cause of action were made at the same time before the court. The issues presented to the district court were the same for both actions. Accordingly, to avoid repetition the actions shall be treated in a unified fashion for the remainder of this opinion.

After initiating their actions, plaintiffs each served a set of interrogatories on defendant R.K. & A. Jones, requesting in part that it state the correct amount it owes on the subcontracts and the total amount due and owing it on the general contract. R.K. & A. Jones answered that it owed $49,590.00 to Acoustic Specialties and gave two figures as to the amount it owed Granite Mill and Fixture. $29,832.31 or $31,862.80. R.K. & A. Jones also answered that it was owed $515,458.00 for its work on the Hilton Inn.

Based on these admissions, plaintiffs each moved for partial summary judgment against R.K. & A. Jones. Partial summary judgments were granted on May 9, 1979. The judgment for Acoustic Specialties was $49,590.00 and the judgment for Granite Mill and Fixture was $29,832.31.

At the time the partial summary judgments were entered, R.K. & A. Jones, under an entirely separate contract, was in the process of completing construction on the Holiday Inn of Pocatello. Plaintiffs, by issuing execution on the judgments, attempted to garnish the sums due R.K. & A. Jones on that contract from the Holiday Inn and Idaho First National Bank, through which plaintiffs understood R.K. & A. Jones would receive payment for its work at the Holiday Inn. R.K. & A. Jones moved to quash the writs of execution and garnishments on the grounds that it had not been afforded an opportunity to appeal the partial summary judgments and, therefore, execution could not issue. The court quashed the writs of execution, but immediately entered new partial summary judgments, certified under I.R.C.P. 54(b) as final for the purposes of execution and appeal. Nonetheless, by then it was too late to intercept the funds which were to be paid R.K. & A. Jones.

Since it appeared from R.K. & A. Jones' answers to the interrogatories that the Hilton Inn still owed R.K. & A. Jones a substantial sum for work on the Hilton Inn, both plaintiffs garnished the landowners Wright, Wood and Wood and served upon them special interrogatories with the garnishment. In an untimely answer the landowners admitted that an undisputed amount of $97,583.97 was owed R.K. & A. Jones. After the sheriff had returned the garnishment and answers to counsel for plaintiffs, counsel for Wright, Wood and Wood requested that Mr. Coy Wood be able to change one of the figures on the garnishment answers. Mr. Wood then came to the office of counsel for plaintiffs and crossed out the undisputed amount and replaced it with the word "unknown."

Plaintiffs then moved the court for garnishee judgments against Wright, Wood and Wood, based on the grounds that they had admitted owing funds to R.K. & A. Jones and then contradicted the admission. Counsel for Wright, Wood and Wood failed to attend the hearing on that motion. Based upon the answer to interrogatories, garnishee judgments were entered against Wright, Wood and Wood.

Thereafter, conferences ensued between counsel for plaintiffs and counsel for Wright, Wood and Wood. On August 29, 1979, as a result of an informal meeting between counsel and the court, the parties agreed to an informal arrangement that no action would be taken on the garnishee judgment until the district judge returned from a brief vacation. At that time upon his return the judge would take up the issue of lien foreclosure judgment in the event the garnishee judgment had not been satisfied. Counsel for plaintiffs did refrain from execution on the garnishee judgments, and filed its motion for summary judgment of foreclosure of the claims of lien. The hearing was scheduled for September 17, 1979.

On September 14, 1979, W.H.W. Management, Inc., an entity owned by Wright, Wood and Wood, and which manages the Hilton Inn of Pocatello, sought leave to intervene. The intervenor deposited with the court the amount of the claims of lien in return for full satisfaction of the garnishee judgments against Wright, Wood and Wood, and full satisfaction and release of the claims of lien against the real property.

At the hearing, counsel for plaintiffs refused to accept the deposit as full satisfaction of the claims of lien, because it did not provide for interest or attorney fees. By way of letter on November 1, 1979, W.H.W. Management, Inc. and Wright, Wood and Wood withdrew their condition that the funds deposited were in full satisfaction of the claims of lien. On November 2, 1979, the court ordered that the funds be deposited and paid to plaintiffs in full satisfaction of the garnishee judgments and in full satisfaction of the partial summary judgments, but without prejudice to plaintiff's rights to assert any other claims which were before the court.

Thereafter, counsel for plaintiffs moved for the court to determine the amount of interest and attorney fees alleged to be still owing under the claims of lien and to foreclose the claims of lien. A hearing was held on the questions of an award of reasonable attorney fees and the amount of interest which plaintiffs had been required to pay in order to finance the receivables reflected...