Floyd v. Ring Const. Corporation

• Decision Date: 09 February 1948
• Docket Number: No. 13585.,13585.
• Citation: 165 F.2d 125
• Parties: FLOYD v. RING CONST. CORPORATION.
• Court: U.S. Court of Appeals — Eighth Circuit

165 F.2d 125 (1948)

FLOYD v. RING CONST. CORPORATION.

No. 13585.

Circuit Court of Appeals, Eighth Circuit.

January 8, 1948.

Rehearing Denied February 9, 1948.

Benedict Deinard, of Minneapolis, Minn. (Arthur L. H. Street and Leonard, Street & Deinard, all of Minneapolis, Minn, on the brief), for appellant.

Josiah E. Brill, of Minneapolis, Minn. (Brill, Maslon, Grossman & Brill, of Minneapolis, Minn., on the brief), for appellee.

Before GARDNER, THOMAS and JOHNSEN, Circuit Judges.

THOMAS, Circuit Judge.

The parties to this proceeding agree that the ultimate question presented by this appeal is whether the trial court erred in denying the plaintiff-appellant's demand for a jury trial. The purpose of the action is to recover upon a written contract compensation for expert services. The complaint was filed February 2, 1945, the answer on February 16, 1945, and the demand for a trial by jury pursuant to Rule 38(b) of the Rules of Civil Procedure, 28 U.S.C.A. following section 723c, on February 19, 1945. Thereupon the action was designated upon the docket as a jury action. At a pretrial conference in March, 1945, the court concluded that a right of trial by jury did not exist and on March 16, 1945, the case was ordered transferred from the jury calendar to the court actions calendar with exception to the plaintiff. After trial to the court the complaint was dismissed without prejudice on the ground that the case was prematurely brought. D.C., 66 F.Supp. 436.

The question of plaintiff's right to a jury trial was raised in a motion for a new trial. In overruling that motion the court in a memorandum held that (1) the cause of action, as disclosed by the complaint, involved an accounting, is accordingly cognizable in equity, and does not, therefore, call for a jury trial; and (2) assuming, arguendo, that it was error to deny a jury trial, then it was harmless error for the reason that had there been a jury trial the court would have been bound to instruct the jury to bring in a verdict for the defendant at the close of all the evidence or to have set aside any verdict which the jury might have brought in for the plaintiff.

Two questions, it is obvious, underlie the determination of whether the court erred in denying plaintiff a jury trial. They are: (1) Whether the nature of the action, as shown by the complaint, is such as to entitle plaintiff to a jury trial; and (2) If so, whether denial of his demand for a jury trial was harmless error.

If the first of these underlying questions be answered in the negative or the second in the affirmative the judgment appealed from must be affirmed. In order to answer these questions it is necessary to review briefly both the pleadings and the evidence.

The complaint alleges that the plaintiff is a resident of Virginia and that the defendant is a Maryland corporation with its principal place of business in Minneapolis, Minnesota, engaged in the construction business. From June 3, 1941, to March 24, 1942, plaintiff was employed by defendant as estimator and superintendent of construction on a job in Pittsburgh, Pennsylvania. The terms of his employment at that time were embodied in a written contract in the form of a letter from plaintiff to defendant dated June 3, 1941, pursuant to the terms of which he was paid a fixed monthly salary of $400 and a percentage of the net profits on work which he estimated and supervised. The pertinent part of the contract reads: "I am to receive ten percent of the net profits of each and every job estimated by me which is awarded to you, and the monies arising from the profits will not become due to me until the work undertaken has been completed and accepted and full settlement is received by Ring Construction Corporation from the owner, and in connection with such jobs I am to act as Superintendent. Net profits as used herein is understood and agreed to be the difference between the contractors price and the total cost of labor, materials, subcontracts, insurance and social security taxes and all special taxes that may be imposed by the State, in other words, all licenses, permits and taxes to be paid from this project except the United States Federal Income Tax only; freight and cartage, telephone and telegrams, hotel rooms or office at the job. Itemized transportation expenses which is definitely incurred in securing the award of any such contracts or which are necessarily incurred in connection with the supervision of the job after award. Any equipment placed on the job is to be charged as expense at the prevailing rental rate in the locality of the job or job depreciation depending on which is the lesser. All expenditures made by the Minneapolis office such as freight, stamps and telephones directly in connection with the job that I am supervising will be charged against the job cost. This job will reimburse the Ring Construction Corporation offices and expenditures as outlined above. If the Ring Construction Corporation has other work that I have not estimated or for which I have not made prior agreements or executed same in writing, I will have no claim or any interest in such work that Ring Construction may have under construction."

When the Pittsburgh project was substantially completed the parties continued the employment under the contract of June 3, 1941, for the purpose of estimating and pricing a bid for a contract with the War Department of the United States for building and construction work at Camp McCoy, Sparta, Wisconsin, consisting of two related projects known as Areas C and E, and for superintending the work, if awarded to defendant. The defendant's bid was submitted about March, 26, 1942, and accepted by the War Department. Work on the project was commenced about April 1, 1942, and was completed about seven months later.

The contract price for material and labor for construction of the buildings on Area C was $3,986,000, and on Area E $2,664,280. Not long after work on the project began the Renegotiation Act of April 28, 1942, § 403, 56 Stat. 245, 50 U.S.C.A.Appendix, § 1191, became effective. This Act was construed by the War Department to apply to the defendant's contract for the work at Camp McCoy.

Thereafter a dispute arose between the parties in regard to the amount of estimating plaintiff had done in pricing defendant's bid. The controversy was settled about September 1, 1942, in anticipation of a renegotiation proceeding, and the provision for payment of plaintiff's compensation was changed by an agreement dated as of April 1, 1942, supplemental to the contract of June 3, 1941, supra. By the terms of the supplemental agreement the plaintiff agreed to devote his time and attention exclusively to the supervision of construction of Area C and to relinquish all his claims for compensation on Area E. The supplemental agreement further provided:

"(3) In consideration of the foregoing, and in consideration of the agreement of the second party, evidenced hereby, to devote his time and attention exclusively in the supervision of the work required in the performance and completion by the first party of its contract on the Camp McCoy project covering Area C, the first party does, by these presents, agree to pay to the second party, as compensation for his services, ten percent (10%) of the net profits earned by the first party in the performance of the portion of the Camp McCoy project included in Area C, as provided for in the employment agreement between the parties of June 3, 1941, aforesaid, and does further unconditionally guarantee the second party that the amount to be received by him on account of the portion of the profits earned by the first party in the performance of that portion of the Camp McCoy project included in Area C, computed in the manner and on the basis provided in the agreement between the parties of June 3, 1941, will be a sum at least equal to Thirty-five Hundred Dollars ($3,500.00) per month to the second party in manner following, to-wit:

"(a) $400 per month during the course of the construction of said Area C;

"(b) The balance upon the completion of said construction work.

* * * * * *

"(5) Except as herein expressly provided otherwise, all of the terms, covenants and conditions of the employment contract between the parties hereto of June 3, 1941, shall remain in full force and effect."

When the project was completed about November 1, 1942, it was accepted by the government and the full contract price was paid. On both Areas C and E the defendant received a profit of approximately $2,000,000, of which sum plaintiff concluded that $1,200,000 was attributable to Area C. However, promptly upon completion of the work representatives of the government began proceedings for a redetermination of the contract price under the Renegotiation Act, supra. Both plaintiff and defendant participated in these proceedings, which resulted in the government demanding a reduction in the contract price and a return of the sum of $1,365,000 as excessive profits. Thereafter, pursuant to the provisions of the Act, the defendant filed a petition in the Tax Court of the United States to secure a judicial determination of its rights. In this action which is still pending the defendant raised the question of the reasonableness of the government's demand and of the constitutional validity of the Act as applied retroactively to the defendant's contract with the War Department which was entered into prior to the adoption of the Act.

The complaint alleges that plaintiff completely performed his duties and obligations under the contract of employment, supra; that there is due him from defendant 10% of the net profits earned by defendant in Area C of the Camp McCoy project in the amount of approximately $120,000 less the $24,500 received, representing the payments of $3,500 a month provided for in the contract, leaving unpaid approximately $95,500. The prayer of the complaint reads:

"Wherefore, plaintiff...