McLendon Elec. Co. v. McDonough Const. Co.

• Decision Date: 08 February 1978
• Docket Number: Nos. 54832 and 54833,No. 3,s. 54832 and 54833,3
• Parties: McLENDON ELECTRIC COMPANY v. McDONOUGH CONSTRUCTION COMPANY et al. McDONOUGH CONSTRUCTION CO. v. McLENDON ELECTRIC CO
• Court: Georgia Court of Appeals

Page 537

243 S.E.2d 537

145 Ga.App. 137

McLENDON ELECTRIC COMPANY v. McDONOUGH CONSTRUCTION COMPANY et al.

McDONOUGH CONSTRUCTION CO. v. McLENDON ELECTRIC CO.

Nos. 54832 and 54833.

Court of Appeals of Georgia,Division No. 3.

Feb. 8, 1978.

Rehearing Denied March 7, 1978.

Stokes & Shapiro, J. Ben Shapiro, Jr., David R. Hendrick, Atlanta, for appellant.

Jones, Bird & Howell, Arthur Howell, III, Slutzky, Wolfe & Bailey, Stanley K. Slutzky, Danny C. Bailey, Atlanta, for appellees.

BIRDSONG, Judge.

This case involves a direct appeal by McDonough Construction Company and a cross appeal filed by McLendon Electric Company. The trial court, after a bench trial, entered judgment against McDonough in favor of McLendon but in favor of Urban Medical Services Associates and St. Paul Fire & Marine Ins. Co. against McLendon.

The facts show that Urban contracted with McDonough to construct a hospital and a medical office building on land owned by Urban. McDonough subcontracted the electrical work on the two buildings to McLendon and obtained a performance bond indemnifying the bond's obligees, Urban and Urban's financier, Fulton National Bank, against claims by subcontractors for contractual failure between Urban and McDonough. During the performance of the contract to construct the two buildings, Urban became dissatisfied with the electrical work. At the conclusion of the contract, McLendon demanded its final payments from McDonough for work performed. McDonough sought advances from Urban of sufficient money to pay McLendon and its other subcontractors. Urban refused to make the final payments until corrective work had been performed by McDonough or its subs. McLendon filed materialman's liens for the work performed when prompt payment was not forthcoming. Following demand for payment by McLendon upon McDonough as prime contractor, Urban as owner, and St. Paul as surety, with refusal by all three, McLendon filed the present suit against all of the present defendants. After 1,860 pages of record and transcript, the trial court rendered judgment in favor of McLendon against McDonough but held that McLendon was not entitled to a lien against Urban's property nor to recover from St. Paul under the surety bond. These appeals followed. Inasmuch as the appeals arise out of the same facts, we will treat the cases as one. Held :

1. In its appeal (case no. 54833), McDonough raises four enumerations of error. By its first two enumerations, McDonough raises an issue of apparent first impression in this state involving an interpretation of subsection 9(c) of the Civil Practice Act (Ga.L.1966, pp. 609, 620 (Code Ann. § 81A-109(c))). It is uncontested that the contract between McDonough and McLendon contained the following language: ". . . Final payment shall be made within 45 days after the completion of the work included in this subcontract, written acceptance of same by the Architect and owner, or their authorized representatives and FULL PAYMENT thereof by Owner." The parties agree that this language constitutes conditions precedent to payment by McDonough to McLendon. It is also uncontested that the work was not finally accepted by the owner nor was full payment made to McDonough by the owner. Nevertheless, in Paragraph 4 of the count against McDonough, McLendon alleged that it had ". . . fully performed its contracts with McDonough and all conditions precedent have been performed, or have occurred or have been excused." In its answer, McDonough stated simply, "The allegations contained in Paragraph 4 of the complaint are denied."

Subparagraph 9(c) of the Civil Practice Act dealing with the pleading of special matters, provides: "(c) Conditions Precedent. In pleading the performance or occurrence of conditions precedent, it is sufficient to aver generally that all conditions precedent have been performed or have occurred. A denial of performance or occurrence shall be made specifically and with particularity."

In its findings of fact and conclusions of law, the trial court specifically found that in its complaint, McLendon alleged in general language that the conditions precedent had been performed, occurred or excused. The court also found that at no time prior to or during the trial did McDonough deny as a matter of record the performance or occurrence of conditions precedent specifically and with particularity as required by Rule 9(c) of the Civil Practice Act. The trial court concluded therefore that McLendon's general allegations were admitted by McDonough.

McDonough argues that its general denial is sufficient under the modern concept of notice pleadings, especially when coupled with McLendon's incorporation by reference into its own pleadings of the contract provisions mandating the performance of the conditions precedent. McLendon relies upon the unambiguous language of § 9(c). Counsel in their briefs state that there are no Georgia cases interpreting this portion of § 9(c), and our research confirms this finding.

Section 9(c) of the Civil Practice Act is taken verbatim from § 9(c) of the Federal Rules of Civil Procedure. While we are not bound by the interpretations of this section in federal decisions, we certainly can consider those interpretative decisions as persuasive. There appear to be three decisions directly interpreting this phase of Federal Rule § 9(c). Lumberman's Mut. Ins. Co. v. Bowman, 313 F.2d 381, 387(5-7) (10th Cir. 1963); Midland Engineering Co. v. John A. Hall Const. Co., 398 F.Supp. 981, 991 (N.D.Ind.) (1975); and Ginsburg v. Ins. Co. of North America, 427 F.2d 1318, 1321 (6th Cir. 1970). The main thrust of these decisions is best illustrated by Ginsburg in which it was held, in substance, that where the plaintiff affirmatively pleads performance of conditions precedent in general language and the defendant makes only a general denial of that pleading, the failure of a condition precedent does not become an issue and is not a matter of proof by the plaintiff. This was further amplified in the Midland Engineering case at p. 991 where it was held: "It should first be noted that each of these plaintiffs have alleged in their Complaint that they have completed all conditions precedent to receipt of payment. Rule 9(c) of the Federal Rules of Civil Procedure requires that denial of a performance or occurrence of a condition precedent be pleaded specifically and with particularity. At no point in the two-and-a-half year history of this case have the defendants set forth such a denial; thus the allegations must be taken as admitted. Rule 8(d), F.R.C.P." We find great similarity in the factual situation relating to the pleading problem in the Midland case and this case. Under the express language of Code Ann. § 81A-109(c), a denial of the performance or occurrence of a condition precedent as a matter of defense must be stated specifically and with particularity. Such a denial not having been advanced by McDonough either before or during trial, the requirement of proof of the occurrence of conditions precedent was waived and admitted by McDonough.

McDonough urges that approximately two weeks after the trial, it amended its answer to include a denial specifying in particular language the failure of conditions precedent. The reasonable intendment of Ga.L.1966, pp. 609, 627; 1968, pp. 1104, 1106; 1972, pp. 689, 694 (Code Ann. § 81A-115) however, is that after the time for a pre-trial conference has passed and neither the court nor the parties have insisted upon the entry of a pre-trial order and no such order is entered, pre-trial proceedings end with the commencement of the trial proper and the taking of evidence. The unfettered right to amend ceases and a party may amend his pleading only by leave of court or by written consent of the adverse party. McDonough obtained neither leave of court nor the consent of McLendon to change its general denial to a denial of the performance of a condition precedent with specificity and particularity. Under these circumstances, the trial court did not err in concluding that McDonough had failed to comply with CPA § 9(c) and thereby admitted the allegations of compliance with any and all conditions precedent. It is the law of this state that a party to a suit will not be allowed to disprove an admission made in his pleadings without withdrawing it from the record. Fla. Yellow Pine Co. v. Flint River Naval Stores Co., 140 Ga. 321, 78 S.E. 900; Venable v. Block, 138 Ga.App. 215, 216, 225 S.E.2d 755.

Appellant McDonough further argues that the court erred in finding that failure of the conditions precedent did not bar remuneration under the contract. In effect, McDonough urges that the trial court found there were no conditions precedent. McDonough misconstrues the ruling of the trial court. The trial court did not deny the existence of conditions precedent in the contract, simply that McDonough had admitted fulfillment or waiver. Further, we find nothing inconsistent with McLendon's incorporation by reference of the conditions precedent into its pleadings with an allegation that those same conditions precedent had met with compliance. In sum, we find no merit to the first two enumerations of error made by McDonough.

2. In its third enumeration of error, McDonough asserts that the trial court erred in disregarding an earlier order entered by a different judge in the case indicating the necessity of a pre-trial order and the failure subsequently to direct the entry of such a pre-trial order.

The language utilized by that judge indicated that a pre-trial conference would be appropriate and that such a conference should be held in sufficient time to allow the entry of a formal pre-trial order. Clearly this was nothing more than a suggestion by the court. There was no time set for such a conference nor requirement that the parties report to the court or move the court for such pre-trial activity. No party availed itself of the court's suggestion by moving for a...