J. A. Tobin Const. Co. v. Holtzman, 46024
| Decision Date | 12 June 1971 |
| Docket Number | No. 46024,46024 |
| Citation | 207 Kan. 525,485 P.2d 1276 |
| Parties | J. A. TOBIN CONSTRUCTION COMPANY, a Corporation, Appellee, v. Jerome E. HOLTZMAN and The Maryland Casualty Company, Appellants. |
| Court | Kansas Supreme Court |
Syllabus by the Court
1. Under the provisions of K.S.A. 60-903 a bond may, at the discretion of the trial court, be required upon the issuance of a restraining order, if it appears that damage may result to the party restrained.
2. Damages recoverable in an action on an injunction bond, when it is ultimately determined that the temporary restraint imposed was wrongful, include compensation for all actual damage sustained by reason of the wrongful issuance of the injunction; that is, such damage as is the direct, natural and proximate result of the injunction.
3. The ownership of an item of property carries with it the right to use, or control the use of, that item of property. Therefore, where one has been wrongfully deprived of the use of an item of property, there has been a loss of one of the valuable rights or interests in property-the right to use the property.
4. In an action on an injunction bond where the period of temporary restraint was wrongfully imposed, the injunction defendant is entitled to recover the rental value of the property for the period he was deprived of its use because of the wrongful restraint.
5. Where a cross-claim is asserted as a setoff in an action on an injunction bond, but is barred by the statute of limitations prior to the existence of the claim asserted by the plaintiff on the injunction bond, the provisions of K.S.A. 60-213(d) do not permit the assertion of the cross-claim, since the two claims at no time co-existed in time.
Marion W. Chipman, Olathe, argued the cause and was on the brief for appellants.
C. Max Logan, Payne & Jones, Chartered, Olathe, argued the cause, and H. Thomas Payne, the same firm, was with him on the brief for appellee.
This is an action by J. A. Tobin Construction Company, a corporation (hereafter referred to as Tobin), to recover on a bond given to procure a restraining order granted to the defendants as provided in K.S.A. 60-902 and 60-903. The defendant, Jerome E. Holtzman, and others, were the plaintiffs in a prior suit to procure the restraining order. Holtzman was the principal on the bond and the Maryland Casualty Company, also a defendant herein, his surety. The trial court, after hearing the matter, found the restraining order was wrongfully obtained. Damages were awarded to Tobin in the amount of $10,000, the limit of liability on the bond, and the defendants have duly perfected an appeal.
The questions on appeal are: (1) Whether the trial court adopted a correct theory of the law in holding Tobin was entitled under the bond to recover the reasonable rental value of its quarrying machinery and equipment for the period of wrongful restraint; and (2) whether the trial court erred in holding Holtzman's counterclaim barred by the statute of limitations.
On the 25th day of February, 1966, Tobin acquired a sublease from Union Quarries, who held an assignment of a lease from Union Construction Company on land owned by Magdalen E. Tobin in Aubry Township, Johnson County, Kansas, for use as a rock quarry. The quarrying operation was the subject of an appeal to this court in Union Quarries, Inc. v. Board of County Commissioners, 206 Kan. 268, 478 P.2d 181.
On April 6, 1966, at the time suit was filed herein, Jerome E. Holtzman and Joan Holtzman, his wife, had entered into a real estate contract with Joseph W. Sharp and Marguerite Sharp, his wife, to purchase a parcel of real estate adjoining the property upon which Tobin conducted rock quarrying operations. The petition filed by the Holtzmans and the Sharps sought to procure a restraining order and to permanently enjoin Tobin from quarrying operations upon the land Tobin held under lease. They also petitioned the court for an allowance of damages in the amount of $7,500 allegedly occasioned to their land as a result of quarrying operations conducted by Tobin.
On April 7, 1966, a temporary restraining order was issued to Holtzman, ex parte, provided that he execute and file with the clerk a bond in the sum of $1,000. The bond was posted on the same day with Holtzman as principal and Maryland Casualty as surety.
On April 11, 1966, Tobin filed a motion requesting vacation of the temporary restraining order, or an increase in the amount of the bond.
On April 12, 1966, Holtzman was ordered to furnish an additional bond in the amount of $9,000, or the restraining order would be dissolved. On the same day the additional bond was furnished, with Holtzman as principal and Maryland Casualty as surety.
On the 14th and 15th days of April, 1966, a hearing was conducted by the trial court concerning the dissolution of the restraining order. At the conclusion of the hearing the court ordered that Holtzman submit additional evidence to support his allegation that injunctive relief was required, or in the alternative, that Holtzman provide additional bond. In the event that Holtzman did not desire to produce additional evidence or to furnish additional bond, it was directed that the restraining order be dissolved.
Holtzman did not provide the additional evidence, nor an additional bond, and the restraining order was dissolved.
On May 27, 1966, the court determined Holtzman had an adequate remedy at law for any damage occasioned to his property and that the temporary injunction should be denied.
On October 7, 1966, Holtzman moved the court for an order dismissing his action for damages without prejudice, whereupon his action was dismissed by the court without prejudice on January 4, 1967.
On the 11th day of March, 1968, the court conducted a hearing concerning the issuance of a permanent injunction against Tobin, and by journal entry filed on March 15, 1968, Holtzman was denied any injunctive relief. Accordingly, judgment was entered in favor of Tobin on all counts of the plaintiff's petition in the injunction action, thus establishing the original restraining order against Tobin to have been wrongfully obtained.
On March 29, 1968, Tobin filed its petition in the case at bar requesting damages against Holtzman and his wife, Sharp and his wife, and the Maryland Casualty Company for the sum of $21,000, plus costs and attorneys' fees alleged to have been suffered as a result of the wrongful enjoinment and restraint of Tobin by the previous injunction action.
To this petition the Sharps filed a separate answer. Maryland Casualty filed a separate answer, and Holtzman and his wife filed an answer and counterclaim wherein they sought to set off the damages occasioned by them as a result of the quarrying operations conducted by Tobin. Tobin replied to the counterclaim.
On April 10, 1969, the trial court, upon Tobin's motion, determined that the counterclaim was barred, both as a counterclaim and as a setoff. It further held the only issue left for determination by the court was the amount of damages suffered by Tobin as a result of the wrongful restraining order obtained by Holtzman in the prior action. The court's order was journalized and filed on May 6, 1969.
In the meantime, while the proceedings in the case at bar were being had before the trial court, the parties were engaged in pretrial discovery. A part of that pretrial discovery consisted of written interrogatories propounded to Tobin. Answers to these interrogatories show that Tobin did not lease any of its equipment; that Tobin was shut down by the restraining order from April 7, 1966, through April 15, 1966, with no time being charged for Saturday or Sunday; that no rock was sold by Tobin between the dates of April 7, 1966, and April 15, 1966; and that Tobin moved its equipment off the site on April 20, 1966. Tobin's answer to the interrogatories further itemized damages claimed as follows: Loss of use of equipment and rentals on equipment $13,643.25; loss of profits $1,806.25; loss of time by employees $473.22; automobile mileage $25; and attorneys' fees $3,825.
The case was tried on the 25th day of June, 1969. Counsel in his opening statement on behalf of Tobin announced that Tobin would not claim any damage for loss of profit, stating:
It was announced Tobin's claim for damages would be based upon the reasonable rental value of the equipment, plus attorneys' fees, court costs and expenses.
Tobin's evidence substantiated the items of damage claimed in the answer to the interrogatories, with the exception of the item of profits, concerning which there was no evidence.
The only item of damages to which Holtzman objected was the loss of use of equipment, as an element of damages. The trial court overruled Holtzman's objection and held that the only way to determine Tobin's damages for the loss of use of equipment would be to base it upon the rental value of the equipment during the time it was shut down at the place in question by the wrongful restraint.
After a full hearing the trial court took the case under advisement and on June 25, 1969, entered judgment against Holtzman, Marlyland Casualty Company, Joan Holtzman, Joseph W. Sharp and Marguerite Sharp for the sum of $10,186.94 plus the costs of the action. After a series of motions the trial court reduced the amount of judgment to the limit of the bond and dismissed the action against all defendants, except Holtzman and...
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