G.E.W. Mechanical Contractors, Inc. v. Johnston Co.

• Decision Date: 30 June 1993
• Docket Number: No. 13445,13445
• Citation: 858 P.2d 103,1993 NMCA 81,115 N.M. 727
• Parties: G.E.W. MECHANICAL CONTRACTORS, INC., Plaintiff-Appellant, v. The JOHNSTON COMPANY, and John Johnston, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

Page 103

858 P.2d 103

115 N.M. 727

G.E.W. MECHANICAL CONTRACTORS, INC., Plaintiff-Appellant, v. The JOHNSTON COMPANY, and John Johnston, Defendants-Appellees.

No. 13445.

Court of Appeals of New Mexico.

June 30, 1993.

James A. Chavez, W. Daniel Schneider, Schneider & Schneider, Albuquerque, for plaintiff-appellant.

Victor R. Ortega, Bruce Herr, Montgomery & Andrews, P.A., Albuquerque, for defendants-appellees.

OPINION

DONNELLY, Judge.

Plaintiff, G.E.W. Mechanical Contractors, Inc., appeals from an order granting summary judgment and dismissing its amended complaint against Defendants, The Johnston Company, a corporation, and John Johnston, individually. Two issues are presented on appeal: (1) whether the trial court erred in granting summary judgment and refusing to allow the joinder of Louie Petelski, doing business as G.E.W. Sheet Metal, a sole proprietorship (Petelski), as a plaintiff in the action; and (2) whether the trial court erred in finding that Plaintiff's claim against Defendants, alleging violation of the Unfair Trade Practices Act, was groundless, thus permitting an award of attorney's fees to Defendants. We affirm in part and reverse in part.

Plaintiff filed suit against Defendants and Joy Technologies, Inc., alleging that it submitted a bid on a sheet metal subcontract at the University of New Mexico Hospital; that it had sought and obtained prices for preparing its bid from Defendants; and that it was an unsuccessful bidder because Defendants had improperly and unfairly given it pricing information higher than that of other competing bidders. Plaintiff also alleged that Defendants' acts violated the New Mexico Price Discrimination Act, the New Mexico Unfair Trade Practices Act, and unlawfully interfered with the corporation's valid expectancy of a business relationship with the hospital.

In its amended complaint, Plaintiff additionally alleged that Defendants inflated their quotation of prices given to Plaintiff over that given to Plaintiff's competitors and the winning bidder, and that Defendants gave a lump-sum price to Plaintiff, but gave itemized prices to Plaintiff's competitors. Defendants filed a motion for summary judgment, asserting that Plaintiff was not a licensed contractor and was legally barred from performing under the contract, that it was Petelski who had, in fact, submitted the bid in question, and that Plaintiff's complaint failed as a matter of law to state a claim under the Price Discrimination Act.

Following the filing of Defendants' motion for summary judgment, Plaintiff moved to join Petelski as an additional plaintiff in the action. After a hearing on the motions, the trial court denied Plaintiff's motion to join Petelski and granted Defendants' motion for summary judgment. A third Defendant, Joy Technologies, Inc., was dismissed by Plaintiff without prejudice.

I. Award of Summary Judgment and Refusal to Permit Joinder

Plaintiff argues that the trial court erred in granting Defendants' motion for summary judgment and in denying its motion to join Petelski as an additional plaintiff to the action. In reviewing this claim, we first consider the applicable standard of review for (1) an order granting summary judgment; (2) denial of a motion to allow joinder of an additional party plaintiff; and (3) analyze the propriety of the trial court's ruling on each motion in light of those standards.

Defendants' motion for summary judgment was grounded, among other things, on their contention that Plaintiff was not the entity that submitted the bid referred to in its lawsuit. Defendants' motion for summary judgment was accompanied, inter alia, by an affidavit of M. Eliza Stewart reciting that she obtained a certificate from the New Mexico Construction Industries Division, which she appended to her affidavit, stating that Plaintiff is not a licensed contractor in the State of New Mexico and was not a licensed contractor when the subcontract was bid. Plaintiff did not controvert this factual contention.

Plaintiff's brief-in-chief jointly argues that the trial court erred in granting Defendants' motion for summary judgment and denying its motion, pursuant to SCRA 1986, 1-017(A) and 1-021 (Repl.1992), to join Petelski as an additional party plaintiff. We begin our analysis by noting that it is undisputed that Petelski, and not Plaintiff, submitted the bid referred to in Plaintiff's amended complaint. Although Once the moving party makes a prima facie showing that it is entitled to summary judgment, the burden shifts to the nonmoving party to demonstrate that a genuine, triable issue of material fact exists. Koenig v. Perez, 104 N.M. 664, 666, 726 P.2d 341, 343 (1986). At this point, the nonmoving party may not rely on its pleadings, but must come forward to show that a material issue of fact remains in dispute. Oschwald v. Christie, 95 N.M. 251, 253, 620 P.2d 1276, 1278 (1980). Plaintiff failed to meet this requirement. However, while it is clear that the trial court's decision to grant summary judgment against Plaintiff was supported by the uncontested fact that it was not a real party in interest having authority to pursue the claim herein, because Plaintiff filed a motion to join Petelski as a party plaintiff, we must also examine Plaintiff's claim that the court abused its discretion in not permitting the joinder.

[115 N.M. 730] Plaintiff admits that it mistakenly named the incorrect plaintiff, it asserts that the trial court erred in granting summary judgment, rather than granting its motion under SCRA 1-021 permitting it to correct the misjoinder by substituting and joining Petelski as the plaintiff herein.

Following the hearing on Defendants' motion for summary judgment and Plaintiff's motion to permit joinder of Petelski as a party plaintiff, the trial court granted the motion for summary judgment and denied Plaintiff's motion to join Petelski. In denying the motion for joinder, the trial court stated in its letter to counsel:

It is the court's position that if Mr. Petelski desires to pursue a claim, it should be done by filing an amended complaint or filing a separate suit. This is a cleaner way to proceed for the court can then make a determination of propriety of attorneys' fees through this date, and separately the propriety of attorneys' fees as to the claim of the individual and a better method to clearly set forth the individual's claim rather than a band-aid attempt to modify the existing complaint by a mere joinder.

Plaintiff argues that the trial court erred in denying its motion for joinder of Petelski and that if the court had permitted the joinder, the order granting summary judgment and dismissal of the action would have thereby been rendered improper. In advancing this argument, Plaintiff reasons that although generally the decision of whether to permit joinder of an additional party plaintiff to an action under SCRA 1986, 1-019(A) (Repl.1992) rests within the sound discretion of the trial court, see C.E. Alexander & Sons, Inc. v. DEC Int'l, Inc., 112 N.M. 89, 91, 811 P.2d 899, 901 (1991), nevertheless, in the instant case, the trial court abused its discretion in denying its motion to join Petelski as a real party in interest.

SCRA 1-017(A) specifies, in applicable part:

Every action shall be prosecuted in the name of the real party in interest.... Where it appears that an action, by reason of honest mistake, is not prosecuted in the name of the real party in interest, the court may allow a reasonable time for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.

SCRA 1-021 governs situations where there has been a misjoinder or nonjoinder of parties. This rule provides:

Misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just. Any claim against a party may be severed and proceeded with separately. [Emphasis added.]

We agree with Plaintiff that, in the instant case, SCRA 1-017(A) and 1-021 should be read together, cf. Prager v. Prager, 80 N.M. 773, 775, 461 P.2d 906, 908 (1969) (observing that rules involving joinder should be read together with other applicable rules), and that joinder of an indispensable or necessary party is favored As observed by 3A James W. Moore et al., Moore's Federal Practice Paragraph 19-05, at 19-82 (1993) [hereinafter Moore's Federal Practice ], "If a timely objection is made for non-joinder of a necessary party, when joinder is feasible, the claimant should be given an opportunity to add the non-joined person and if he fails to do so the claim should be dismissed." See also Heath v. Aspen Skiing Corp., 325 F.Supp. 223, 229 (D.Colo.1971) (philosophy underlying enactment of Rule 19 is to avoid dismissal wherever possible); Gonzalez v. Fireman's Fund Ins. Co., 385 F.Supp. 140, 144-45 (D.P.R.1974) (if court drops misjoined party, no amended complaint is necessary). Similarly, Moore's Federal Practice Paragraph 21.03, at 21-4, -5, states:

[115 N.M. 731] in order to avoid multiplicity of suits. Cf. United Nuclear Corp. v. Fort, 102 N.M. 756, 761, 700 P.2d 1005, 1010 (Ct.App.1985) (public policy favors avoidance of multiplicity of suits).

Rule 21 reflects a repudiation of the overly technical common law rule under which misjoinder was fatal to a lawsuit. Thus the Rule provides that "[m]isjoinder of parties is not ground for dismissal of an action." Under Rule 21, the misjoined party may be dropped at any stage of the action on such terms as the court deems just, either on motion of a party or on its own initiative. [Footnotes omitted.]

The above interpretation is mirrored by 7 Charles A. Wright et al., Federal Practice and Procedure Section...