Dolajak v. State Auto. and Cas. Underwriters

• Decision Date: 24 March 1977
• Docket Number: No. 9286,9286
• Citation: 252 N.W.2d 180
• Parties: Mike DOLAJAK and Dolajak Manufacturing and Ironworks, Inc., a corporation, Plaintiffs and Appellants, v. STATE AUTOMOBILE AND CASUALTY UNDERWRITERS, a corporation, Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 180

252 N.W.2d 180

Mike DOLAJAK and Dolajak Manufacturing and Ironworks, Inc. a corporation, Plaintiffs and Appellants, v. STATE AUTOMOBILE AND CASUALTY UNDERWRITERS, a corporation Defendant and Appellee.

Civ. No. 9286.

Supreme Court of North Dakota.

March 24, 1977.

Rehearing Denied April 25, 1977.

Syllabus by the Court

1. Where findings of the trial court rest solely on documentary evidence as distinguished from oral testimony, this court is not bound by the "clearly erroneous" rule in reviewing these findings, and is as capable of reading and understanding the documentary evidence as is the trial court. Rule 52(a), NDRCivP.

2. In order for an issue to be considered res judicata, it is not enough to have been involved in an earlier action, but must have been actually litigated and decided in that action.

3. Where jury in prior action was instructed on both negligence and breach of contract and could have assessed damages based on either theory, and where no specific finding was made as to which theory the jury used, the issue of negligence was not res judicata for purposes of present action involving some of the same parties and similar subject matter.

Freed, Dynes, Malloy & Reichert, P. C., Dickinson, for plaintiffs and appellants; argued by George T. Dynes, Dickinson.

Mackoff, Kellogg, Kirby & Kloster, P. C., Dickinson, for defendant and appellee; argued by Ward M. Kirby, Dickinson.

SAND, Justice.

Dolajak, plaintiff and appellant, appealed from a summary judgment issued by the district court, Stark County, sixth judicial district, in favor of defendant and appellee, State Automobile and Casualty Underwriters.

A brief resume of the factual background will be helpful to understand the present appeal.

The Dolajaks had contracted with Gary Bos and Steven Bos to erect a used silo for them in Montana.

On 16 June 1972, when the silo was approximately 60 feet in the air and within a few hours of completion, a windstorm developed throwing the silo off its foundation and virtually destroying it. Thereafter, Dolajak returned to North Dakota and made no attempt or offer to assist in removal of the silo or to make specific arrangements for the erection of a second silo. Bos brought an action against Dolajak in Montana for damages. A jury trial resulted in a judgment of $17,626.74 against Dolajak in favor of Bos.

The judgment was appealed to and affirmed by the Montana Supreme Court and is reported in Bos v. Dolajak, 534 P.2d 1258 (Mont.1975). This case will be referred to later herein as the Montana case.

In 1974, Dolajak brought an action in Stark County, North Dakota, against State Automobile and Casualty Underwriters to recover under the builders risk insurance policy the sum of $20,000.00 plus $3,000.00 for legal costs connected with the Montana litigation and attorney fees incurred as a result of this action.

The insurance company, defendant and appellee, answered by generally denying the complaint and by alleging that the policy did not insure against

"A. Loss or damage directly or indirectly by faulty workmanship or faulty design or by the neglect of the assured to use all reasonable means to save and preserve the property at and after any disaster insured against."

After some initial skirmishes on the grounds that the Montana case had not been completed, a motion for summary judgment was made by State Automobile and Casualty Underwriters which was denied on 6 January 1976. Several months later the motion was renewed and on 13 April 1976 the district judge granted a summary judgment in favor of State Automobile and Casualty Underwriters, a corporation, on the ground that the question of negligence had been considered by the Montana case and was now res judicata. Dolajak appealed to this court.

The principle issue before us is whether or not the Montana case decided the issue of negligence so as to be res judicata.

Dolajak, in the Montana case, argued and claimed that the Montana trial court erred because it permitted the jury to consider and assess damages both on the basis of breach of contract and negligence, and that the court should have required a determination on one or the other, but not both.

On this question the Montana Supreme Court, 534 P.2d 1258, on page 1261, after reciting the factual situation, said:

"Under this fact situation plaintiffs (Bos) were entitled to go to the jury with instructions on damages relating to both breach of contract and to negligence. Gunderson v. Brewster, 154 Mont. 404, 466 P.2d 589."

The Montana Supreme Court upheld the judgment based on the jury verdict.

The North Dakota trial court made findings of fact, conclusions of law, and issued its summary judgment wherein it had concluded that Dolajaks were negligent and that the question of negligence had been decided by the Montana case and the issue of negligence was a matter now res judicata.

With this brief resume, we now examine the issue before us.

We are first concerned whether or not Rule 52(a), North Dakota Rules of Civil Procedure, applies as to the findings of fact made by the North Dakota trial court. The findings by the trial court rested solely upon documentary evidence (even though there was testimony introduced before the motion for summary judgment was renewed) as distinguished from oral testimony before the court. Therefore, is the "clearly erroneous" rule under Rule 52(a), NDRCivP, applicable? 5A Moore's Federal Practice (2d ed.) P 52.04, page 2677, states that:

"A number of courts likewise have held that findings of fact based on documentary evidence, on uncontradicted testimony, on stipulated facts, on testimony taken by depositions, and in similar situations where credibility is not seriously involved or, if it is, where the reviewing court is in just as good a position as the trial court to judge credibility, are not binding on the appellate court and will be given slight weight on appeal."

This is followed by an impressive list of cases. However, there are contrary cases holding that the "clearly erroneous" rule applies in every instance.

However, we note that on appeals from administrative agencies to the district court, and from the decision of the district court to this court, we review the decision of the administrative agency rather than the decision of the district court on the basis that this court is as capable of reviewing the record as is the district court. On such reviews this court will review the decision of the administrative agency whose findings of fact are given appreciable weight. See, Geo. E. Haggart, Inc. v. North Dakota Workmen's Compensation Bureau, 171 N.W.2d 104 (N.D.1969).

Moore's Federal Practice, supra, at page 2683, quoted from an opinion by Judge Frank in the case of Orvis v. Higgins, 180 F.2d 537, 539 (2d Cir. 1950), cert. denied 340 U.S. 810, 71 S.Ct. 37, 95 L.Ed. 595:

"Where a trial judge sits without a jury, the rule varies with the character of the evidence: (a) If he decides a fact issue on written evidence alone, we are as able as he to determine credibility, and so we may disregard his finding. (b) Where the evidence is partly oral and the balance is written or deals with undisputed facts, then we may ignore the trial judge's finding and substitute our own, (1) if the written evidence or some undisputed fact renders the credibility of the oral testimony extremely doubtful, or (2) if the trial judge's finding must rest exclusively on the written evidence or the undisputed facts, so that his evaluation of credibility has no significance."

Moore concludes this topic by saying:

"But the intent written in Rule 52's recipe on the scope of appellate review singles out the case where the trial court had 'the opportunity . . . to judge of the credibility of the witnesses,' and he has no such opportunity relative to nondemeanor testimony. And for litigants the pudding is the payoff, not the cook's intent."

In Wolff v. Schlenker, 75 N.D. 645, 31 N.W.2d 793 (1948), this court said:

"But in so far as the testimony given by deposition is concerned he is in no better position than is this court to pass upon it. Neither, for that matter, is the jury."

See also, Gilliland v. Courtesy Motors, Inc., 232 N.W.2d 828 (S.D.1975); and Geo. A. Clark & Son, Inc. v. Nold, 85 S.D. 468, 185 N.W.2d 677 (1971), cert. denied, 404 U.S. 833, 92 S.Ct. 82, 30 L.Ed.2d 63.

We conclude that the evidence considered by the trial court consisted of documentary evidence and that this court is as capable of reading and understanding the documentary evidence as is the trial court, and that this court therefore is not required to follow Rule 52(a), NDRCivP, under such circumstances. We further believe that the question here is more a question of law than a question of finding of fact.

When is an issue considered res judicata?

In Knutson v. Ekren, 72 N.D. 118, 5 N.W.2d 74 (1942), the court quoted with approval from an earlier case that "it is not enough even that it appears that the issue presented in the later suit was presented and ought to have been litigated in the former, but it must appear further that it was litigated and decided, as well as involved." (Teigen v. Drake, 13 N.D. 502, 508, 101 N.W. 893.) ...