Rumsey Elec. Co. v. University of Delaware

• Decision Date: 26 February 1975
• Docket Number: No. 116,116
• Citation: 334 A.2d 226
• Parties: RUMSEY ELECTRIC COMPANY, a Delaware Corporation, Plaintiff, v. UNIVERSITY OF DELAWARE, a Corporation of the State of Delaware, et al., Defendants and Third-Party Plaintiffs, v. BURLINGTON ELECTRIC CORPORATION, a New Jersey Corporation, Third-Party Defendant.
• Court: Delaware Superior Court

Page 226

334 A.2d 226

RUMSEY ELECTRIC COMPANY, a Delaware Corporation, Plaintiff, v. UNIVERSITY OF DELAWARE, a Corporation of the State of

Delaware, et al., Defendants and Third-Party Plaintiffs, v. BURLINGTON ELECTRIC CORPORATION, a New Jersey Corporation,

Third-Party Defendant.

No. 116.

Superior Court of Delaware, New Castle County Feb. 26, 1975.

Louis Goldstein, Wilmington, for plaintiff.

Clement C. Wood and Joseph S. Flowers, of Allmond & Wood, Wilmington, for defendants Ogden Development Corp. and Frederic G. Krapf & Son, Inc. and Insurance Co. of North America.

David A. Anderson, of Potter, Anderson & Corroon, Wilmington, for defendant Univ. of Delaware.

OPINION

WALSH, Judge.

Plaintiff, Rumsey Electric Company, a Delaware corporation (Rumsey) seeks recovery of $106,421.94 for electrical equipment supplied by it in connection with the construction of a dormitory building at the University of Delaware. The defendants are Ogden Development Corporation (Ogden); Frederic G. Krapf & Sons, Inc. (Krapf) doing business as a joint venture under the name of Ogden Development-Krapf (the Joint Venture); Insurance Company of North America (INA) the surety on the labor and material payment bond executed by the Joint Venture as the general contractor and the University of Delaware (University) the owner of the dormitory building. All defendants have filed motions to dismiss, initially under Rule 12(b) of the Superior Court Civil Rules, Del.C.Ann., but, because of the record supplementation requested by the Court, they will be treated as motions for summary judgment under Rule 56. ¹ Since Rumsey has conceded the merit of the University's position its motion will be granted without further discussion.

In order to appreciate the legal basis for the pending motions it is necessary to allude to the background of this litigation. As part of its construction efforts at the University, the Joint Venture engaged as the electrical subcontractor, a New Jersey corporation, Burlington Electric Corporation (Burlington). Rumsey dealt solely with Burlington in the delivery of electrical materials to the campus. These deliveries took place between June 26, 1971 and June 2, 1972. On November 16, 1972, the date when Burlington was adjudged a bankrupt in the United States District Court for the District of New Jersey, Burlington owed Rumsey approximately $450,000, covering several projects including the University of Delaware project. Four days later, Rumsey filed a mechanics lien action in this Court (No. 4358 C.A.1972) against Burlington, Krapf (as the general contractor) and the University as the property owner. Burlington did not appear in the mechanics lien action, apparently because of its protected status as a bankrupt, but both Krapf and the University filed motions to dismiss, raising various legal defenses. After briefs had been filed by both Krapf and the University, Rumsey did not respond. As a result, on January 3, 1973, then Judge Quillen, dismissed the action as to Krapf and the University. The defendants in the present action now assert the disposition of the mechanics lien action as Res judicata.

The present action was filed on February 12, 1974, and contains three counts. Count I, directed against the University, has become moot in view on Rumsey's position not to dispute the entry of judgment in favor of that defendant. In Count II. Rumsey seeks recovery against the Joint Venture on the theory that the Joint Venture agreed, in its contract with the University, to ensure the payment of all contractors and suppliers. In Count III Rumsey seeks recovery directly against INA as the surety on the Joint Venture's performance bond. In essence, both Counts II and III proceed on the performance bond and thus the positions of the Joint Venture and INA are co-extensive. If recovery is available to plaintiff under the bond, both the Joint Venture and INA must respond. In addition to raising the defense of Res judicata, the defendants claim that this action, to the extent it seeks recovery on the bond, has been filed too late. Defendants also assert that Rumsey has accepted a promissory note representing Burlington's total debt to it and its claim is limited to a proceeding on the note, not on a mere component of that debt. These contentions will be disposed of Seriatim. For purpose of their motions Joint Venture and INA have employed a common position.

I

Defendants maintain that the dismissal of the mechanics lien action served as a final judgment upon the merits of the dispute between the parties and thus constitutes a judicial bar to the maintenance of further litigation. Defendants argue that, in addition to being an action for recovery under the Delaware Mechanics Lien Act (25 Del.C. Ch. 27), the prior proceeding also sought the imposition of a general judgment against both Krapf and the University. Rumsey counters that, while the actions bear comparability to the extent that they arose out of the same transaction and seek recovery for the same debt, neither the parties nor the causes of action are the same.

The parties agree that the applicability of the doctrine of Res judicata was judicially formulated in Epstein v. Chatham Park, Inc., Del.Super., 52 Del. 56, 153 A.2d 180 (1959) where Chief Justice Wolcott announced a five pronged test:

A. The original court must have had jurisdiction of the subject matter of the suit and of the parties to it;

B. The parties to the original action were the same as the parties, or their privies, in the case at bar;

C. The cause of action in the original action was the same as in the case at bar, or the issues necessarily decided in the prior action were the same as those raised in the case at bar.

D. The issues in the prior action were decided adversely to the contentions of the plaintiff in the case at bar.

E. The decree rendered in the prior decree is a final decree.

While there is serious doubt whether a State court has jurisdiction to enter a decree involving a Federal bankrupt, ² the feature which distinguishes the two cases and which is defeative of defendant's assertion of Res judicata is the element of distinguishable causes of action. The mechanics lien action sought to enforce an obligation through a statutorily created cause of action. It also sought the imposition of a general or, In personam, judgment against Krapf and the University since it was denominated a 'complaint' as well as a statement of claim for the mechanics lien. It would thus serve to support a personal judgment to the extent that the plaintiff was able to establish a claim Ex contractu. Lance Roofing Co. v. Globe-Union, Inc., Del.Super., 54 Del. 514, 180 A.2d 746 (1962). An analysis of the mechanics lien pleadings, however, indicates that nowhere in the complaint does the plaintiff set forth the basis for an In personam cause of action against either the University or Krapf. Indeed, Krapf is not even mentioned in the body of the complaint as having dealt with Rumsey in any capacity. The University was joined solely as the property owner, but the contractual basis for the mechanics lien complaint is the agreement between Rumsey and Burlington. Privity between Rumsey and Krapf was not asserted while the Joint Venture is not mentioned.

The...