Minter-Wilson Drilling Co., Inc. v. Richins

• Decision Date: 09 February 1983
• Docket Number: MINTER-WILSON,No. E-7451,E-7451
• Citation: 655 P.2d 1060,60 Or.App. 702
• Parties: DRILLING COMPANY, INC., Respondent, v. Paul H. RICHINS, Richtron, Inc., and Richtron Financial Corporation, Appellants, Merrill Glenn aka Merrill H. Glenn, Defendant. ; CA 17866. Court of Appeals of Oregon, In Banc
• Court: Oregon Court of Appeals

Page 1060

655 P.2d 1060

60 Or.App. 702

MINTER-WILSON DRILLING COMPANY, INC., Respondent, v. Paul H. RICHINS, Richtron, Inc., and Richtron Financial Corporation, Appellants Merrill Glenn aka Merrill H. Glenn, Defendant.

No. E-7451; CA 17866.

Court of Appeals of Oregon,

In Banc.

Argued and Submitted June 17, 1981.

Resubmitted In Banc Sept. 8, 1982.

Decided Dec. 15, 1982.

Reconsideration Denied Feb. 9, 1983.

Joan O'Neill, Portland, argued the cause for appellants. With her on the briefs was Black, Kendall, Tremaine, Boothe & Higgins, Portland.

William D. Cramer, Burns, argued the cause for respondent. With him on the brief was Cramer & Pinkerton, Burns.

BUTTLER, Presiding Judge.

Plaintiff commenced this action to foreclose a construction lien for labor performed and material supplied in well-drilling activities pursuant to two contracts. Defendants Paul H. Richins, Richtron, Inc. and Richtron Financial Corporation (Richtron Financial) appeal from a judgment against them and Merrill Glenn, foreclosing plaintiff's lien against real property in which they were alleged to claim an interest, the fee title of which is apparently in Glenn, who has not appealed. The appealing defendants, hereafter referred to collectively as defendants, assign the following errors: (1) failure to dismiss plaintiff's lien as untimely filed; (2) denial of their motion for dismissal on the grounds that plaintiff failed to show its corporate existence and lacked clean hands; (3) failure to limit the lien to the particular property benefitted by the work performed; (4) entry of judgment against defendant Richins and Richtron Financial, in the absence of proof that they had any interest in the land, and (5) awarding attorney fees in an excessive amount and in disregard of plaintiff's failure to give the required statutory notice to defendants. We modify the decree as hereafter set forth.

BACKGROUND

On November 22, 1977, plaintiff, a well-drilling corporation based in Garden City, Kansas, entered into a written contract with "Catlow Valley Farms" to drill a minimum of ten irrigation wells and test holes on land purportedly under the control of Catlow in Harney County. The contract was signed by plaintiff and by "Catlow Valley Farms by Richtron, Inc., Paul H. Richins, President." Evidence concerning the legal status or existence of Catlow Valley Farms is sparse. Richins, the moving force behind the irrigation project, testified that Catlow is "the sum of seven different limited partnerships" based in Ogden, Utah. At the time the contract was signed, Catlow consisted of only four limited partnerships, but later, sometime in 1978, three others were added. The best we can determine from this record is that the Catlow name identified the group of limited partnerships involved in the project. All that is reasonably clear is that Richtron, Inc., was the general partner of each of the limited partnerships and, apparently, of Catlow Valley Farms, which suggests that Catlow was also a limited partnership--if it was in existence.

Richins further testified that Catlow hired Richtron, Inc., to develop and manage its land in Harney County, described in the contracts between the parties as: "Land located in Sections 3, 4, 8, 9, & 10 T33S, R31E, W.M., Harney County, Oregon." Richins testified that the original owner of this property was Glenn, the nonappealing defendant, who sold it to defendant Richtron Financial, apparently retaining at least a security interest, perhaps a contract vendor's interest. He also testified that Richtron Financial had placed in escrow a deed to four of the Catlow Valley partnerships covering a portion of the property. There is no evidence of delivery of the deed or of an assignment, or attempted assignment, of a vendee's interest; in fact, we do not know whether there were viable grantees capable of taking an interest in the property. At trial, Glenn confirmed The well-drilling contract provided that a payment was to be made on "completion" of each well. Completion of a well was contractually defined as "hole drilled, cased and gravel packed." The parties orally agreed that the sealing of the wells with cement was to be performed by the owner. A separate contract, dated December 14, 1977, and signed by E.C. Olsen for Richtron, Inc., provided for the installation of pumps in, and testing of, each well drilled in the various sections comprising the property described in the earlier contract.

                that he "sold" the property to "Richtron."   Plaintiff's lien against the property names the owners as "Merrill Glenn, a/k/a Merrill H. Glenn, and/or Richtron Financial Corporation, a Utah Corporation."
                

Robert Minter, an officer of plaintiff, testified that prior to beginning work on the project, plaintiff obtained a certificate authorizing it to transact business in Oregon and hired a water well contractor and well driller, licensed in Oregon, to supervise the project. Plaintiff drilled a well in the northwest quarter of section 10 and another well in the northeast quarter of section 9 and received payment. Plaintiff also received payment for all test holes drilled throughout the property pursuant to the first contract. Plaintiff then drilled and gravel-packed the two other wells, one in the southwest quarter of section 10 and another in the northwest quarter of section 9. Plaintiff was given two checks, dated December 19, 1977, and January 11, 1978, representing payment for that work; however, the checks were dishonored on presentment for want of sufficient funds. On January 7 or 8, 1978, plaintiff ceased drilling on the property because of the owner's failure to pay on completion of each well in accordance with the contract. Plaintiff continued to maintain a full crew for a period of two weeks after drilling had stopped, anticipating that defendants would obtain sufficient funds to continue the operation. Through April, 1978, plaintiff also kept its equipment and two men on the job site ready to complete the project.

On February 24, 1978, the state watermaster inspected the wells. At that time, it was determined that plaintiff did not have a licensed driller in charge. Plaintiff was informed that no further drilling would be permitted until that deficiency was corrected. On May 28, 1978, plaintiff filed a lien against all of the property described in the contract in which it claimed the sum of $199,143.66 to be due and owing. Prior to trial, the parties agreed that $90,747 could be credited to defendants for materials that could be returned to and used by plaintiff. At trial, Minter also testified that a $1,000 claim for setting and pulling two pumps should be reduced to $500, because plaintiff only set them; defendants pulled them. Thus, plaintiff's total lien claim was reduced to $97,896.66, of which $52,377.66 was labeled "cancellation costs." More will be said about that part of the claim later.

An order of default was entered against defendant Glenn for want of an appearance. ¹ After trial, judgment was entered against all defendants in the amount of $104,290.30, plus costs and attorney fees of $22,967.38. The trial court entered a decree of foreclosure, ordering the sale of all of the property described in plaintiff's lien to satisfy the judgment against defendants. Prior to the sale, however, the sheriff was informed that defendant Richtron Financial had filed bankruptcy, and a stay ² of the sale of its interest was demanded. The sheriff proceeded to sell all of the interests in the property, except that of Richtron Financial, to third parties. Ten days later, Glenn redeemed the property from the purchasers and, pursuant to ORS 18.430, ³ filed

a notice of payment and demand for repayment from the other defendants.

MOOTNESS

At the outset, plaintiff contends the case is moot because the full amount of the judgment has been paid. That proposition, however, is much too pat. The posture of this case is unusual, and no authorities have been cited to us that are dispositive of the question. The judgment here is against all defendants, one of whom, Glenn, defaulted and could not appeal. ORS 19.020. Notwithstanding the appeal by the other defendants, the judgment against all of the defendants could be enforced in the absence of a supersedeas bond, ORS 19.040; in other words, the interest of all of the defendants in the real property could be sold on execution. That procedure was followed here, but the sheriff was notified of Richtron Financial's bankruptcy, so that defendant's interest was not sold.

Assuming, however, that other defendants had an interest in the property, as alleged, their interests were sold. If the judgment were reversed on appeal, those defendants would be entitled to recover from plaintiff the proportionate amount it collected from the sale of their interests. That would be true even if the judgment against Glenn could not be affected by the disposition of the case on appeal, because the interest of each of the defendants was sold and, presumably, had a value that could be established. But as we point out below, this meager record supports only the conclusion that Glenn and Richtron Financial had an interest in the property and, because Richtron Financial's interest was not sold on execution, only Glenn's interest was sold. If only Glenn has been harmed directly by the sale of the property, and if the judgment cannot be modified as to him, and if Glenn has no pending claims against the appealing defendants, then the appeal would be moot, because there would be only abstract questions left to resolve. It is apparent that the question is a complex one that cannot be resolved as simply as either of the dissenting opinions would attempt to do.

The collection of the judgment by execution sale pending appeal, per se, does not render the appeal moot. It is well established that payment of a judgment will not preclude an appeal unless it satisfactorily appears that the payment was voluntary, not...