Riddle v. Dean Machinery Co.

• Decision Date: 30 January 1978
• Citation: 564 S.W.2d 238
• Parties: John H. RIDDLE, d/b/a John H. Riddle Contracting Company, Plaintiff-Appellant-Respondent, v. The DEAN MACHINERY COMPANY, a Missouri Corporation, Defendant-Appellant-Respondent, and Erickson Construction Company, a Nebraska Corporation, and Parker E. Erickson, Defendants-Appellants, and Seaboard Surety Company, Intervenor-Respondent. KCD 28356, KCD 28358, KCD 28484.
• Court: Missouri Court of Appeals

Page 238

564 S.W.2d 238

John H. RIDDLE, d/b/a John H. Riddle Contracting Company Plaintiff-Appellant-Respondent, v. The DEAN MACHINERY COMPANY, a Missouri Corporation Defendant-Appellant-Respondent, and Erickson Construction Company, a Nebraska Corporation, and Parker E. Erickson Defendants-Appellants, and Seaboard Surety Company Intervenor-Respondent.

KCD 28356, KCD 28358, KCD 28484.

Missouri Court of Appeals, Kansas City District.

Jan. 30, 1978.

Motion for Rehearing and/or Transfer Denied Feb. 27, 1978.

Ralph E. Skoog, Topeka, Kan., William J. Koenigsdorf, Koenigsdorf, Kaplan, Kraft, Fox & Kusnetzky, Kansas City, for Riddle.

Gene A. DeLeve, Thomas A. Schwindt and Berman, DeLeve, Kuchan & Chapman, Kansas City, for Dean.

Frank C. Sabatini, Sabatini, Waggener & Vincent, Topeka, Kan., John R. Caslavka, Shugart, Thomson & Kilroy, Kansas City, for Erickson.

Bernard L. Balkin, Sandler, Balkin, Hellman & Weinstein, P. C., Kansas City, for Seaboard Surety.

Before SHANGLER, P. J., and WELBORN and HIGGINS, Special Judges.

ANDREW JACKSON HIGGINS, Special Judge.

Action by plaintiff: in Count I for possession of certain construction equipment including four Caterpillar tractors subject of bills of sale, removed from job sites, and for prevention of threatened removal of additional items of such equipment; in Count II against defendant Dean for possession of a D-8 Caterpillar tractor and acceptance of tender of balance due on its purchase price; in Count III for $113,000 damages for the reasonable market value of all said equipment, and for $400,000 actual and $250,000 punitive damages for interruption and delay of plaintiff's ability to bid on additional contracts on account of the takings; and in Count IV for $500,000 actual and $250,000 punitive damages for libel and slander of plaintiff's credit, reputation, and ability to perform its contracts. Counterclaim by defendant Dean: in Counts I and II for $90,000 in contract retainage due defendant Erickson Company from Riddle and assigned to Dean; in Count III for up to $169,621.72 on an agreement between plaintiff and Erickson Company to pay Dean 70% Of net estimates due Erickson Company on a subcontract between plaintiff and Erickson Company; in Count IV for cancellation of the bills of sale to four Caterpillar tractors and declaration that same are owned by Erickson, subject to security interest in Dean; and in Count V for recovery of a dragline and for $12,000 actual and $25,000 punitive damages for wrongful taking of said dragline. Counterclaim by defendant Erickson: in Count I for $110,679.42; in Count II for $169,869.35; in Count III for $147,892.62; in Count IV for $25,000 for wrongful possession of certain items of construction equipment; and in Count V for payment of $25,000 to defendant Dean of unpaid contract retainage. Counterclaim and cross-petition by intervenor Seaboard as plaintiff's surety for establishment of a prior lien on all interests of Riddle.

Appeal by Parker E. Erickson, 28356, from the judgment as it held him personally liable to plaintiff Riddle, combined with appeal by Dean, 28358, from those parts of the judgment which found Riddle the owner of and entitled to possession of certain items of the construction equipment, and awarding Riddle damages for loss of profits and for loss of use of said equipment, and with appeal by Riddle, 28484, from those parts of the judgment which cancelled the four bills of sale and declared ownership of subject equipment in Dean, found Dean the owner of the D-8 tractor, and awarded moneys to Dean and Erickson.

Numerous questions are presented which are or go to: the personal liability of Parker E. Erickson; ownership of various items of construction equipment used by Erickson as a subcontractor of Riddle on Corps of Engineers projects; whether Riddle is entitled to damages for loss of profits and loss of use of equipment; whether Riddle is entitled to punitive damages for wrongful taking of equipment; the judgment form; and the accountings for monies between Riddle and Erickson and Riddle and Dean.

Trial commenced on the equity claims in plaintiff's petition. After several days, the parties agreed to try all issues to the court, a trial which consumed some thirty-six days.

The court was requested, and thus required under Rule 73.01.1(b), to draft an opinion containing the grounds for its decision and the method of determining any damages awarded, together with its findings on controverted fact issues specified by counsel. The posture of the appeals indicates the case is best stated through such findings, condensed, paraphrased, and paragraph numbers omitted where appropriate; and it is for review upon the law (of both Kansas and Missouri as the case may be) and the evidence with due regard to be given the opportunity of the trial court to have judged the credibility of the witnesses. See Rule 73.01.3(a), V.A.M.R., and its construction, Murphy v. Carron, 536 S.W.2d 30, 32(1-3) (Mo. banc 1976).

Riddle Contracting Company is engaged in the heavy construction business with its principal place of business in Salina, Kansas; William A. Stannard was its general manager with authority to conduct its business and affairs. Erickson Construction Company (Erickson) is a Nebraska corporation authorized to do business in the State of Kansas; Parker E. Erickson is its president. Dean Machinery Company is a Missouri corporation with its principal place of business in Kansas City, Missouri, engaged in the business of selling, leasing, and servicing heavy construction equipment.

Riddle entered into a prime contract with the Corps of Engineers, referred to as C-0151, to construct work known as Jefferson County Road Relocation, Phase I, at Perry, Kansas; Riddle then entered into a subcontract with Erickson, dated June 6, 1967, for certain portions of the work for which Riddle agreed to pay Erickson $606,494.05. Riddle entered into a prime contract with the Corps referred to as C-0017 to construct work known as Interior Roads and Boat Ramp, Phase I, at Perry, Kansas; Riddle then entered into a subcontract with Erickson, dated October 27, 1967, for certain portions of the work for which Riddle agreed to pay Erickson $160,743.50. Riddle entered into a prime contract with the Corps referred to as C-0129 to construct work known as Jefferson County Road Relocation, Phase II, at Perry, Kansas; Riddle then entered into a subcontract with Erickson, dated April 5, 1968, for certain portions of the work for which Riddle agreed to pay Erickson $624,256.60. Riddle entered into a prime contract with the Corps referred to as C-0157 to construct work known as Interior Roads and Boat Ramp, Phase II, at Perry, Kansas; Riddle then entered into a subcontract with Erickson, dated October 6, 1968, for certain portions of the work for which Riddle agreed to pay Erickson $287,275.

Each of said subcontracts was based on agreed unit prices and estimated quantities of work; and also provided in part as follows:

"Partial payments will be made to the Subcontractor each month in an amount equal to 90 percent of the value of work and materials incorporated in the construction and/or materials delivered to the site of the work by the Subcontractor, as estimated by the Architect or Engineer, less the aggregate of previous payments, but such partial payments shall not become due to the Subcontractor until 10 days after the Contractor received payment for such work and materials from the Owner. Upon complete performance of this Subcontract by the Subcontractor and final approval and acceptance of Subcontractor's work and materials by the owner, the Contractor will make final payment to the Subcontractor of the balance due to him under the Subcontract within 10 days after full payment for such work and materials has been received by the Contractor from the Owner."

11. Erickson was a customer of Dean and from time to time purchased equipment, parts and service on credit. On March 21, 1968, Erickson executed an installment note to Dean for $160,798 secured by a mortgage on equipment. Erickson was using the mortgaged equipment to perform its work under the subcontracts with Riddle and needed this equipment to complete its work. The first two installments on the note due April 21 and May 21, 1968, were not paid on time. Riddle agreed to send Dean a check to cover these note payments, interest, and rental on certain equipment. Riddle's check for $18,925.50 was received on June 10, 1968. Erickson was unable to make the payments on the Dean note as they matured. By December 1, 1968, three or more installments of $8,133.50 each were past due and there was a principal balance of $126,265 due. Dean had the option to declare the full $126,265 balance due and payable. Erickson also owed Dean $20,111 on its parts account. Parker Erickson discussed with Dean the possibility of refinancing and extending the time for payment of these obligations and of buying two tractors which Erickson had been leasing from Dean. Parker Erickson was told that Dean would not grant the requested extension without additional collateral. He told Dean that Erickson had earned retainages in excess of $90,000 on C-0151 and C-0017 and offered to assign that amount of retainage as security for a renewal note. He also represented that Riddle would agree to pay the retainage jointly to Dean and Erickson. Dean prepared and sent the proposed retention agreement to Erickson and advised that if and when it was executed by Erickson and Riddle and returned to Dean, the requested extension would be granted.

On December 18, 1968, James Zipf, a Dean vice-president, called Riddle's general manager, William A. Stannard. In response to his questions, Stannard told Zipf that Erickson's earned retainages on the four Perry subcontracts as of October 31, 1968, amounted to $124,099.55. The value of work completed by Erickson as of October 31, 1968, under each contract, as shown by partial payment...