Salt Lake City Corp. v. James Constructors, Inc.

• Decision Date: 07 September 1988
• Docket Number: No. 870387-CA,870387-CA
• Citation: 761 P.2d 42
• Parties: SALT LAKE CITY CORPORATION, Plaintiff and Appellant, v. JAMES CONSTRUCTORS, INC., Hood Corporation, and Industrial Indemnity Company, Defendants and Respondents.
• Court: Utah Court of Appeals

Page 42

761 P.2d 42

SALT LAKE CITY CORPORATION, Plaintiff and Appellant, v. JAMES CONSTRUCTORS, INC., Hood Corporation, and Industrial Indemnity Company, Defendants and Respondents.

No. 870387-CA.

Court of Appeals of Utah.

Sept. 7, 1988.

Wilford A. Beesley (argued), Stanford P. Fitts, Beesley, Spencer & Fairclough, Salt Lake City, for plaintiff and appellant.

David A. Reeve (argued), Armstrong, Rawlings & West, Salt Lake City, for defendant and respondent, Hood Corp.

C. Reed Brown, Hintze & Brown, Salt Lake City, for defendants and respondents, James Constructors and Indus. Indem. Co.

OPINION

Before BENCH, GARFF and ORME, JJ.

ORME, Judge:

Appellant Salt Lake City Corporation ("SLCC") brought an action against James Constructors, Inc.; James's parent, Hood Corporation; and James's surety, Industrial Indemnity Company. SLCC sought to recover the cost of repairing and completing work done pursuant to a public construction contract. Hood moved for summary judgment. Judgment was granted dismissing Hood from the action. Approximately sixteen months later, SLCC moved to have the district court reconsider its judgment. The court refused. SLCC contends there was error in the court's refusal to reconsider and, even if there was not, that the court erred in granting summary judgment in the first instance. We are persuaded by the latter argument and reverse.

FACTUAL BACKGROUND

This dispute arose from a contract for the installation of a water pipeline to service Salt Lake City. Prior to awarding the contract to James, the apparent low bidder, SLCC asked it to provide financial information and technical data to substantiate its ability to complete the project. James responded by supplying a consolidated financial statement of its parent company, Hood Corporation, and its affiliated entities. Hood owns 100% of James's stock. Hood acquired James a few years prior to the contract date and installed James Foreman, one of its employees, as its president. ¹ SLCC required James to provide a performance bond for $1.13 million, the amount of the contract. Hood approved the performance bond, which was furnished by Industrial Indemnity Company.

SLCC and James formally entered into the contract on July 8, 1983. After the installation of some pipe, the backfill in the trench collapsed and the pipe and other underground utilities were damaged. SLCC notified James of the defective work, ordered it off the job, and withheld payment of some monthly invoices for work already performed. On May 15, 1984, James filed a complaint against SLCC alleging breach of contract and that the damage to the pipeline was SLCC's responsibility. SLCC subsequently filed a separate action against James, Hood, and Industrial Indemnity to recover the cost of repairing the damage and completing the project. The court consolidated the two actions and discovery proceeded for about a year. During this time, SLCC was represented by the Salt Lake City Attorney's office.

Hood filed a motion for summary judgment in June of 1985. The motion was supported by a memorandum of points and authorities and an affidavit of Hood's president, Marc Laulhere. Hood's principal contention was that James was an independent corporation and that it was not liable for James's debts. SLCC responded by filing, one day before the scheduled hearing, a reply affidavit of its attorney, Arthur Keesler. The "affidavit" was really more of a legal memorandum, citing cases and quoting passages from Laulhere's unfiled deposition. SLCC simultaneously filed a motion for leave to amend its complaint. SLCC raised explicitly for the first time the theory that James was the "alter ego" of Hood.

The district court concluded that, even under the amended complaint and even as to its alter ego theory, SLCC had failed to demonstrate any issues of material fact in support of its claim against Hood. It granted Hood's motion on August 21, 1985, dismissing all causes of action by SLCC against Hood. Following the district court's order, discovery continued as among the remaining parties and several more depositions were taken. The following March, SLCC employed its present counsel.

In December 1986, approximately sixteen months after the summary judgment was granted, SLCC filed a motion for reconsideration of the judgment and for leave to amend its complaint. These motions were supported by a memorandum that quoted from depositions which, for the most part had apparently still not been filed. ² SLCC argued that its original complaint had not adequately pleaded the alter ego claim and that it should be allowed to amend its complaint to correct the deficiencies.

The district court denied both motions. The court specified that, although it had authority to reconsider its prior judgment, due to the passage of time it would be prejudicial to Hood to allow SLCC to have another opportunity to argue its alter ego theory, which had already been considered and decided against SLCC. The district court then certified its prior judgment as final pursuant to Utah R.Civ.P. 54(b). This appeal followed.

SLCC raises two principal issues on appeal. ³ First, SLCC contends the grant of summary judgment was erroneous because there were disputed material facts relevant to whether James was the alter ego of Hood. Second, SLCC argues that the district court erred by not reconsidering its judgment and allowing SLCC to amend its complaint. We first address the reconsideration issue.

RECONSIDERATION AND LAW OF THE CASE

SLCC argues that the trial court erred in its refusal to reconsider its earlier grant of summary judgment. A motion to reconsider is not expressly available under the Utah Rules of Civil Procedure. ⁴ McKee v. Williams, 741 P.2d 978, 980 (Utah Ct.App.1987). See Peay v. Peay, 607 P.2d 841, 843 (Utah 1980). However, by implication Rule 54(b) of the Utah Rules of Civil Procedure does allow for the possibility of a judge changing his or her mind in cases involving multiple parties or multiple claims. ⁵

Although "[a]ny judge is free to change his or her mind on the outcome of a case until a decision is formally rendered," Bennion v. Hansen, 699 P.2d 757, 760 (Utah 1985), the "law of the case" doctrine is employed to avoid delay and to prevent injustice. "The purpose of [this] doctrine is that in the interest of economy of time and efficiency of procedure, it is desirable to avoid the delays and the difficulties involved in repetitious contentions and rulings upon the same propositions in the same case." Richardson v. Grand Central Corp., 572 P.2d 395, 397 (Utah 1977). See Conder v. A.L. Williams & Assocs., Inc., 739 P.2d 634, 636 (Utah Ct.App.1987). "Although a trial court is not inexorably bound by its own precedents, prior relevant rulings made in the same case are generally to be followed." People ex. rel. Gallagher v. District Court, 666 P.2d 550, 553 (Colo.1983).

The law of the case doctrine is particularly applicable when, in the case of summary judgment, a subsequent motion fails to present the case in a different light, such as when no new, material evidence is introduced. Sittner v. Big Horn Tar Sands & Oil, Inc., 692 P.2d 735, 736 (Utah 1984); Richardson v. Grand Central Corp., 572 P.2d at 397; Hammer v. Gibbons & Reed Co., 29 Utah 2d 415, 510 P.2d 1104, 1105 (Utah 1973).

Such is the case here. Approximately sixteen months had passed between the initial grant of summary judgment and the motion to reconsider. SLCC did not present any legal theories that had not already been considered and, as it candidly admits on appeal, although some facts were elaborated on, it presented no new, material facts that were not before the court at the time of the original decision to grant the judgment. We see no error in the court's refusal to reconsider and turn to examine whether the court correctly granted summary judgment in the first instance.

MOTION FOR SUMMARY JUDGMENT

SLCC's principal contention is that the district court's judgment was in error because genuine issues of material fact existed concerning whether James was the "alter ego" of Hood.

Summary judgment is appropriate if the pleadings, depositions, affidavits, and admissions submitted in a case show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Utah R.Civ.P. 56(c). "In considering a summary judgment motion, the court must evaluate all the evidence and all reasonable inferences fairly drawn from the evidence in a light most favorable to the party opposing summary judgment." Conder v. A.L. Williams & Assocs., Inc., 739 P.2d 634, 637 (Utah Ct.App.1987). Judgment should only be granted when it appears "there is no reasonable probability that the party moved against could prevail." Frisbee v. K & K Const. Co., 676 P.2d 387, 389 (Utah 1984).

Hood's motion was supported by an affidavit of Hood's president, Marc Laulhere, and a legal memorandum. The affidavit, while somewhat conclusory, would surely have supported the grant of summary judgment if not objected to and not rebutted. SLCC filed an opposing affidavit, but, as previously noted, this "reply affidavit" was an affidavit of SLCC's counsel, Mr. Keesler, who lacked personal knowledge of the underlying facts. The affidavit quoted from Laulhere's deposition, which had not been filed with or "published" by the court, ⁶ and also cited and discussed various legal authorities.

Affidavits in support of or in opposition to motions for summary judgment must be made on personal knowledge, set forth such facts as would be admissible in evidence, and show affirmatively that the affiant is competent to testify to the matters stated therein. Utah R.Civ.P. 56(e). See Treloggan v. Treloggan, 699 P.2d 747, 748 (Utah 1985). Hood's objection to the "reply affidavit" is well-taken. Mr. Keesler's affidavit quite clearly fails to meet the requirements of Rule 56(e). ⁷

However, Hood objects to the sufficiency of the "reply affidavit" for the first...