Glens Falls Indemnity Company v. United States, 13606.

• Decision Date: 13 February 1956
• Docket Number: No. 13606.,13606.
• Citation: 229 F.2d 370
• Parties: GLENS FALLS INDEMNITY COMPANY, a corporation, Appellant, v. UNITED STATES of America, At the Relation of and to the Use of WESTING-HOUSE ELECTRIC SUPPLY COMPANY, Wm. Radkovich Company, Inc., et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

229 F.2d 370 (1955)

GLENS FALLS INDEMNITY COMPANY, a corporation, Appellant, v. UNITED STATES of America, At the Relation of and to the Use of WESTING-HOUSE ELECTRIC SUPPLY COMPANY, Wm. Radkovich Company, Inc., et al., Appellees.

No. 13606.

United States Court of Appeals Ninth Circuit.

June 7, 1955.

As Amended on Denial of Rehearing February 13, 1956.

John E. McCall, George B. T. Sturr, Albert Lee Stephens, Jr., J. Harold Decker, Los Angeles, Cal., for appellant.

Anderson, McPharlin & Conners, Los Angeles, Cal., for appellee Wm. Radkovich Co., Inc. Glen Behymer, Los Angeles, Cal., for appellee Westinghouse Electric Supply Co.

Before HEALY and POPE, Circuit Judges, and BOLDT, District Judge.

BOLDT, District Judge.

By a contract with the United States dated June 19, 1947 Radkovich Co. agreed to construct one hundred poured concrete houses for the Army Airfield at Muroc, California. The appellee insurance companies issued for Radkovich Co. a payment bond conditioned as required by the Miller Act, 49 Stat. 793, 40 U.S.C.A. § 270a. By a subcontract dated July 30, 1947 Woolley contracted with Radkovich to perform the electrical work in the construction of the houses specified in the prime contract and to furnish the labor and materials for such work. Appellant Glens Falls issued separate subcontract performance and payment bonds running to Radkovich for Woolley as principal. After various difficulties and delays Woolley completed the electrical work but failed to pay in full for materials furnished him by Westinghouse and used in the work.

As authorized by the Miller Act, Westinghouse, suing in the name of the United States, brought action in the district court to recover the unpaid balance due from Woolley for the materials furnished, naming Radkovich Co., its sureties, and Woolley as defendants. Radkovich Co. and its sureties answered and also served and filed a pleading, designated as a cross-claim against Woolley and his surety Glens Falls, asserting that if Radkovich Co. and its sureties were liable to Westinghouse, then Woolley and his surety Glens Falls were liable in like amount to Radkovich under the subcontract performance and payment bonds. Thereafter Woolley served and filed a cross-claim in the name of the United States against Radkovich Co. and its sureties wherein recovery was sought for labor and materials furnished by Woolley to Radkovich for the construction of the houses referred to.

At the trial extensive documentary evidence was admitted and testimony taken covering numerous disputed details of the transactions between Radkovich and Woolley, the difficulties and exigencies of the construction work and the actions taken with respect thereto by the parties. When the admission of evidence was concluded, at the suggestion of counsel, a transcript of the record was ordered for the use of the court and time allowed for submission of briefs. Thereafter additional oral evidence was submitted following which the trial court made and entered a written memorandum covering 60 pages of the record on this appeal wherein every minute factual question and every law point raised by the parties was analyzed and discussed in great detail. Various factual and legal questions were again presented by counsel in the settlement of the findings, conclusions and judgment.

The judgment awarded recovery to Westinghouse against Radkovich Co. and its sureties in the total sum of $35,977.13. Judgment over in like amount against Woolley and Glens Falls was granted to Radkovich Co. and its sureties. Woolley was allowed recovery upon his cross-claim against Radkovich Co. and its sureties in a total of $16,198.91 for unpaid balance on the subcontract, extras not included in the subcontract and for damages due to delay. The judgment provided that Glens Falls be entitled to offset the full amount of Woolley's recovery against Radkovich from the award to Radkovich Co. and its sureties against Glens Falls. These provisions of the judgment left a substantial balance payable by Woolley and Glens Falls.

Glens Falls alone appeals from the judgment. Appellant's contentions may be generally summarized: (1) that the district court did not have jurisdiction of the controversy raised by the Radkovich cross-claim; (2) that Radkovich and sureties neither pleaded nor proved a basis for recovery on either performance or payment bond of Glens Falls; (3) that in any event Glens Falls could only be liable on the payment bond, precedent to recovery on which were conditions of the performance bond which were unperformed by Radkovich; (4) that Glens Falls was released from liability to Radkovich because the subcontract was materially altered in various particulars without the consent of Glens Falls; (5) that the finding that Glens Falls' affirmative defenses were not established was unsupported by the evidence; and (6) that the judgment charged Glens Falls with liability for extras outside the subcontract. Several points are urged under each of these contentions.

In most instances the points urged either involve only questions of fact or are based on assertions of fact contrary to the findings of the trial court. It is not the function of this court to retry cases on appeal. Findings of fact by the trial court are presumptively correct and will not be set aside unless clearly erroneous. F.R.Civ.P. Rule 52 (a), 28 U.S.C.A. An appellant's mere challenge of a finding does not cast the onus of justifying it on this court. The party seeking to overthrow findings has the burden of pointing out specifically wherein the findings are clearly erroneous. Appellant has not carried the burden as to any particular challenged finding sufficiently to require or justify a detailed analysis of the evidence, particularly in view of the exhaustive study and discussion of the facts contained in the trial court's written memorandum. United States v. Foster, 9 Cir., 1941, 123 F.2d 32; Anderson v. Federal Cartridge Corp., 8 Cir., 1946, 156 F.2d 681; Vol. 2 Barron and Holtzoff Federal Practice and Procedure, Sec. 1131, page 831. All of the points urged by appellant under the three general contentions last stated above are based, ultimately, on challenges of the trial court's findings of fact. These findings have been compared to the record and clearly are not erroneous.

Jurisdiction in the district court to hear and determine the claim of Westinghouse against Radkovich Co. and its sureties was granted by the express provisions of the Miller Act, 49 Stat. 793, 40 U.S.C.A. § 270b. F.R.Civ.P. Rule 13(g) (Counterclaim and Cross-Claim) provides that one party may assert against another party any claim "arising out of the transaction or occurrence that is the subject matter * * * of the original action". The rule further provides, "Such cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant." Rule 14 (Third-Party Practice) provides that a defendant may bring in as a new party a person "who is or may be liable to him defendant for all or part of the plaintiff's claim against him." The claim of Radkovich Co. and its sureties as to Woolley was a cross-claim under Rule 13(g) and as to Glens Falls was a third-party claim under Rule 14. Claims under either rule must arise out of the transaction or occurrence on which the original action is based and, as indicated by the italicized words, can be asserted even if liability is only contingent or a mere possibility.

It is well settled that a grant of jurisdiction over particular subject matter includes the power to adjudicate all matters ancillary to the particular subject matter.¹ "Ancillary" means auxiliary, accessorial or subordinate. Rutherford v. Pennsylvania Greyhound Lines, D.C.Ohio, 7 F.R.D. 245, 249; United Engineering & Foundry Co. v. Cold Metal Process Co., D.C.Pa., 92 F.Supp. 596, 599; Saunders v. Baltimore & Ohio R. Co., D.C.S.D.W.Va., 1945, 63 F.Supp. 705, 707. Ancillary claims may be entertained "to prevent the relitigation in other courts of the issues heard and adjudged in the original suit". Pell v. McCabe, 2 Cir., 1919, 256 F. 512, 515....