City of Westminster v. Phillips-Carter-Osborn, Inc.

• Decision Date: 18 December 1967
• Docket Number: PHILLIPS-CARTER-OSBOR,No. 21848,INC,21848
• Citation: 164 Colo. 378,435 P.2d 240
• Parties: CITY OF WESTMINSTER, a Colorado municipal corporation, Plaintiff in Error, v., a Colorado corporation, and A. J. Curtis & Co., a Wyoming corporation, Defendants in Error.
• Court: Colorado Supreme Court

Page 240

435 P.2d 240

164 Colo. 378

CITY OF WESTMINSTER, a Colorado municipal corporation, Plaintiff in Error, v. PHILLIPS-CARTER-OSBORN, INC., a Colorado corporation, and A.

J. Curtis & Co., a Wyoming corporation, Defendants in Error.

No. 21848.

Supreme Court of Colorado, In Department.

Dec. 18, 1967.

Donald D. Cawelti, Denver, for plaintiff in error.

Gorsuch, Kirgis, Campbell, Walker & Grover, Richard B. Harvey, Denver, for defendant in error Phillips-Carter-Osborn, Inc.

PRINGLE, Justice.

This writ of error is directed to a judgment of the District Court of Adams County which vacated a prior order of that court allowing joinder under R.C.P.Colo. 13(h) of Phillips-Carter-Osborn, Inc. as a party defendant, in an action brought by A. J. Curtis & Co. against the City of Westminster. The parties will be referred to as Phillips-Carter, Curtis and Westminster.

Curtis filed suit against Westminster on February 5, 1965, for a total of $29,271.98 alleged to be due for repair work done on a water pipeline constructed by Curtis for the city. The construction contract included an agreement by Curtis to repair or replace defects arising from 'faulty workmanship or negligence by said plaintiff or from faulty manufacturing, faulty materials, faulty erection or improper handling of equipment furnished and installed by said plaintiff,' for a period of one year following completion of the project. All the repairs involved occurred within six months after completion, but Curtis alleged that they resulted from causes other than those specified in the contract.

On March 29, 1965, Westminster filed its answer denying liability, along with a counterclaim against Curtis and two cross-claims against Phillips-Carter. Westminster also filed a motion for leave to join Phillips-Carter as a party defendant under R.C.P.Colo. 13(h), which was granted ex parte. The first cross-claim was joined to the counterclaim against Curtis, and demanded judgment for $4,510, the 'reasonable value' of additional repairs made by the city at its own expense, which repairs were alleged to have been made necessary either by Curtis' negligence in constructing the pipeline, or by the negligence of Phillips-Carter in designing it. The second cross-claim alleged that Phillips-Carter 'is or may be liable to this defendant for all or part of the plaintiff's claim against this defendant,' and demanded judgment for all sums which might be adjudged against Westminster in favor of Curtis.

Phillips-Carter moved to vacate the order joining it as a defendant, and this motion was granted on hearing held May 28, 'without prejudice to the City of Westminster properly proceeding' in accordance with R.C.P.Colo. 14, and the cross-claims were ordered stricken. This order was made a final judgment, and Westminster is contesting it here. Such a procedure is proper. See United Artists Corp. v. Masterpiece Productions, Inc., 221 F.2d 213 (2d Cir.). Although Curtis is joined as a defendant in error, only Phillips-Carter has appeared here in opposition to Westminster.

The district court evidently regarded the second cross-claim as the only one properly part of this action. As to the first cross-claim, the court states in its oral ruling that Phillips-Carter 'is really not involved * * * but there may be a separate, independent action against them for damages * * *' We do not agree with the district court's view of the first cross-claim and we therefore reverse.

In its complaint against Westminster, Curtis alleged that the pipeline repairs it made resulted from causes other than its own negligence, and were not covered by the guarantee in its contract with Westminster. In its combined counterclaim and first cross-claim, Westminster demanded payment for additional repairs made after Curtis allegedly refused to make further repairs, alleging that the pipeline failures involved were caused either by Curtis' negligence in constructing the pipeline, or by Phillips-Carter's negligence in designing it. Judgment was sought against either Curtis or Phillips-Carter, or both. There is no question that, as to Curtis, Westminster has stated a counterclaim arising out of the same transaction as Curtis' claim, which would be a compulsory counterclaim under R.C.P.Colo. 13(a).

R.C.P.Colo. 13(h) provides:

'When the presence of parties other than those to the original action is required for the granting of complete relief In the determination of a counterclaim or cross-claim, the court Shall order them to be brought in as defendants as provided in these rules, if jurisdiction of them can be obtained.' (Emphasis added.)

One of the purposes of this rule is to encourage the determination of all controversies arising out of the same transaction in one lawsuit and prevent needless circuity of actions. See Lesnik v. Public Industrials Corp., 51 F.Supp. 989 (S.D.N.Y.) That is of Phillips-Carter sought by Westminster. of Phillips-Carter sought by Westminster. In one action, it will be determined whether Curtis, or Phillips-Carter, or neither of them is liable to Westminster for the additional repairs it was required to make to the pipeline.

Barron and Holtzoff in their work on Federal Practice and Procedure, Vol. 1A, § 426, p. 675 (1960 Ed.), in discussing the Federal Rule (which is identical in pertinent part to ours), state on the very point at issue here:

'* * * Where the defendant wishes to assert a claim against a co-defendant and a third party, the correct procedure is to...