National Union Fire Ins. Co. of Pittsburgh, Pa. v. Studer Tractor & Equipment Co.

• Decision Date: 31 October 1974
• Docket Number: No. 4250,4250
• Citation: 527 P.2d 820
• Parties: NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., a corporation, Appellant (Defendant and third party plaintiff below), v. STUDER TRACTOR AND EQUIPMENT CO., a corporation, Appellee (Plaintiff below), and Gordon P. STUDER, Appellee (Third party defendant below).
• Court: Wyoming Supreme Court

Page 820

527 P.2d 820

NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., a corporation, Appellant (Defendant and third party plaintiff below), v. STUDER TRACTOR AND EQUIPMENT CO., a corporation, Appellee (Plaintiff below) and Gordon P. STUDER, Appellee (Third party defendant below).

No. 4250.

Supreme Court of Wyoming.

Oct. 31, 1974.

John R. Hickisch, of Weller, Friedrich, Hickisch & Hazlitt, Denver, Colo., William S. Bon, Casper, for appellant.

B. J. Baker, of Brown, Drew, Apostolos, Barton & Massey, Casper, for appellees.

Before PARKER, C. J., and McEWAN, GUTHRIE, McINTYRE, and McCLINTOCK, JJ.

McCLINTOCK, Justice.

National Union Fire Insurance Company of Pittsburgh, Pa. ¹ appeals the decision of the district court of Natrona County, Wyoming granting separate summary judgments against it.

The proceedings in this matter have been protracted. By complaint filed September 21, 1965 Studer Tractor sought judgment against Donald J. Kelley, dba Kelley Construction Co. ² and against its surety, National Union, upon four counts, including two for rentals claimed to be due from Kelley for equipment furnished to Kelley and used by him in the execution of highway projects bonded by National Union. National Union, in addition to denying the allegations of the complaint, asserted a counterclaim against Studer Tractor based upon a general indemnity agreement claimed to have been executed by that company on July 16, 1962 and still to be effective in the months of December, 1963 through June, 1964 when some five highway bonds totaling in excess of $1,000,000 were executed by National Union for Kelley. Studer Tractor denied that it was an indemnitor of Kelley with respect to these bonds and further asserted that Studer had no authority to enter into an indemnity agreement on its behalf.

The parties then took depositions of certain witnesses and a pretrial conference was held August 15, 1969 following which a new Answer, Counterclaim, and Third Party Complaint was filed by National Union, bringing in Studer as a third party defendant. On June 19, 1970 a motion for summary judgment was filed seeking dismissal of the counterclaim and third party complaint. After briefs and argument, summary judgment containing findings and granting the motion, but delaying its finality until the adjudication of other issues under the complaint, was entered on June 29, 1971, dismissing the counterclaim and third party complaint.

After this pretrial summary judgment had been granted disposing of the counterclaim and third party complaint, Studer Tractor elected to proceed against National Union on its bond only with respect to the two counts of its complaint which related to the amounts due to Studer Tractor from Kelley for rental of equipment, and in November, 1971 moved for summary judgment for the amounts due for equipment rental. Affidavits and briefs were filed and National Union again took the deposition of Studer. On April 2, 1973 summary judgment was entered dismissing the counterclaim and third party complaint and in favor of Studer Tractor in the amount of $8,220.40 upon the two remaining counts of the complaint. This appeal then followed.

The Summary Judgment Dismissing the Counterclaim and Third Party Complaint

After submission of briefs and argument the district judge on February 23, 1971 issued a written memorandum opinion sustaining the motion for summary judgment but the order was not entered until June 29, during which period a considerable correspondence took place and National Union attempted to have a new hearing upon the motion or alternatively to have the court rule specially on the admissibility of the evidence as considered by the court. The motion for summary judgment quotes admissions of Olson and Dean A. Stone, as made in the course of deposition of those people, specifying those admissions as the basis of the motion, and by an appendix attached to their brief in the district court appellees listed some 26 paragraphs of 'undisputed facts' with noted reference to the affidavit or deposition claimed to sustain the fact. That same statement is incorporated in their brief in this Court. Neither in the district court nor in this Court has National Union at any place denied any specific fact so represented as true nor sought to contradict it with other evidence or testimony. Correspondence between counsel for National Union and the trial judge indicates that the former has admitted that the parol evidence of the two principal participants was not in dispute and the order itself, drawn by counsel for appellees but showing approval as to form by National Union's counsel, specifically recites that 'counsel for the respective parties have agreed and represented to the Court that there is no genuine issue of any material fact, and that the sole issue for determination on said motion is one of law'. We have carefully examined the record and believe that the following facts were disclosed by undenied and uncontradicted evidence which would have been competent upon the trial of the case:

In May or June, 1962 Kelley, who had worked for Studer Tractor as a salesman, wished to go into the business of dirt contracting. At this time there were several small Bureau of Reclamation projects in the range of $10,000 to $15,000 each that he wished to bid on. He contacted the Bon Agency of Casper, Wyoming, a local and independent agency in the bond and insurance business, one of whose principals was National Union. Lee F. Olson, its Wyoming state agent, was brought into the negotiations at an early date, and as a result of negotiations between Kelley, a Leon England from the Bon Agency, and Olson, Studer, then Executive Vice President of Studer Tractor and purporting to act in its behalf, on July 5, 1962 as such executive vice president signed an instrument entitled 'Indemnity Agreement to Cover Specific Contract'.

Later in the same month Kelley wished to bid on four other Reclamation jobs, all in the range of $10,000 to $15,000 each, and Studer was asked by Mr. Olson and by either Des Bennion or Leon C. England of the Bon Agency to sign an instrument entitled 'General Indemnity Agreement Covers All Bonds For Principal'. Studer's uncontradicted testimony is that he was told by these people that this was to facilitate Kelley's bidding on the four specifically contemplated jobs and to save the trouble of executing a specific indemnity agreement for each job. At the time this instrument was signed by Studer and these representatives, they discussed only the four small Reclamation earth contracting jobs, and there was no discussion or negotiation concerning any other possible jobs. This instrument likewise bears Studer's signature as executive vice president. The agreement contains nothing as to the jobs that Kelley will or has bid on. There is no provision limiting the amount of the indemnity, nor is there anything in the agreement as to the time during which the indemnity shall be effective.

Kelley obtained none of these jobs and no performance or payment bonds relating thereto were issued by National Union. Studer stated in an affidavit that after he learned that Kelley had been unsuccessful in obtaining any of the jobs, he called the Bon Agency and talked with Mr. Bennion who told him that Kelley had ceased to do business with them, had cancelled any insurance policies taken out through the Bon Agency, and that the file relating to Kelley had been closed. ³ Mr. Bennion did not tell Studer that the general indemnity agreement had been delivered to National Union. The instrument of July 16, 1962 had been delivered by him either to England or Bennion and he was not told by anyone that they had delivered it to Olson; he did not learn of this fact until October, 1964. A deposition of Olson confirms that the instrument was delivered to him by Mr. England because Kelley was going to bid some more jobs and rather than run out and get a 'separate application each time we had Indemnity Agreements, why he could go ahead and bid each job and save time'. It was Olson's recollection that four small jobs were involved. ⁴

After the rejection of Kelley's reclamation bids Studer did continue to assist him and helped him obtain several small bonds by another bonding company and through another Casper agency, but he specifically refused Kelley's request that he or his company assist Kelley in obtaining a bond for what is described as the Lucerne-Black Mountain project, a much larger and more complicated job than Kelley had then undertaken, and which is the first of the bonds as to which National Union now claims indemnity under the agreement of July 16, 1962. This contract was awarded to Kelley and a bond executed by National Union in December, 1963 under circumstances involving Studer but in an entirely different way than as indemnitor. Having failed to secure bonding through a Casper agency and having been specifically rejected for bonding by Olson, who was still representing National Union as Wyoming state agent, Kelley made a new contact with National Union through the Gates-Stone Agency in Denver, Colorado and secured the issuance of a bond in the sum of approximately $245,000. No representative of that agency or of National Union contacted Studer concerning an indemnity agreement but he endorsed Kelley's note at a Casper bank whereby $45,000 was obtained and eventually used by Kelley and the bonding company in satisfaction of claims against the job. ⁵

In the period of time between December, 1963 and July, 1964 a total of five bonds were issued by National Union through the Gates-Stone Agency, totaling some $1,150,000. At least once after the Lucerne-Black Mountain bond had been issued, Mr. Stone asked Studer if he personally or his company would be willing to indemnify National Union as to bonds it might write for Kelley and he declined to do so. Olson also testified that to his recollection Studer Tractor did not enter into the...