School City of Gary v. Continental Elec. Co., Inc., 3--473A41

• Decision Date: 16 October 1973
• Docket Number: No. 3--473A41,3--473A41
• Citation: 301 N.E.2d 803,158 Ind.App. 132
• Parties: SCHOOL CITY OF GARY, Indiana, a municipal school corporation, et al., Appellants (Defendants Below), v. CONTINENTAL ELECTRIC CO., INC., an Indiana corporation, Appellee (Plaintiff Below).
• Court: Indiana Appellate Court

Page 803

301 N.E.2d 803

158 Ind.App. 132

SCHOOL CITY OF GARY, Indiana, a municipal school

corporation, et al., Appellants (Defendants Below), v. CONTINENTAL ELECTRIC CO., INC., an Indiana corporation,

Appellee (Plaintiff Below).

No. 3--473A41.

Court of Appeals of Indiana, Third District.

Oct. 16, 1973.

Palmer C. Singleton, Jr., Timothy F. Kelly, Hammond, for appellants; Tinkham, Beckman, Kelly & Singleton, Hammond, of counsel.

Porter R. Draper, Elsie C. Draper, Draper & Draper, Gary, for appellee.

SHARP, Judge.

This case represents an ongoing dispute between the parties to the appeal decided on September 20, 1971 by the Appellate Court of Indiana in School City of Gary v. Continental Electric Co., Ind.App., 273 N.E.2d 293 (1971). No good purpose would be served to restate the record up to September 20, 1971 which is readily discernible from an examination of Judge Robertson's opinion. The contents of that opinion represent the law of this case. We are here concerned with ongoing events and disputes subsequent to September 20, 1971.

On June 7, 1972 Appellee Continental Electric filed in the trial court, under the same cause number, the following:

'MOTION FOR RELIEF FROM JUDGMENT PURSUANT TO TRIAL RULE 60(B)(8)

COMES NOW the Plaintiff, by its attorneys, Draper and Draper, and moves the Court, pursuant to Rule 60(B)(8) of the Indiana Rules of Trial Procedure, and the general equitable powers of this Court, to vacate and set aside the judgment entered against the Defendants in this cause on the 23rd day of November, 1970, (attached hereto as Exhibit 'A'), as affirmed by the Appellate Court of Indiana, on an appeal taken by Defendants, on September 20, 1971, (attached hereto as Exhibit 'B'), and to grant leave to Plaintiff to file an Amended Complaint, a copy of which is attached hereto, on the ground that the conduct of the Defendants has denied to Plaintiff the relief to which they were entitled, as more fully appears from the Affidavit of William Walton, President of Continental Electric Company, Inc., hereto attached as Exhibit 'C'.'

The relevant portions of the affidavit of William Walton are:

'1. He is President of Continental Electric Company, Inc., an Indiana corporation, doing business at 640 W. 5th Avenue, Gary, Indiana (hereinafter Continental).

2. Continental is the plaintiff in Cause Number 170--601, Continental Electric Co., Inc. vs. School City of Gary, Inc., et al.

3. On November 23, 1970, this Court issued findings of fact and conclusions of law in favor of Continental and issued a mandatory injunction ordering the defendant School City and the individual trustees of the School City to execute a contract with Continental for the electrical construction work involved in remodeling and additions to Pulaski Junior High School.

4. The School City and the Trustees appealed the decision of this court.

5. On September 20, 1971, the Appellate Court of Indiana, Division No. 1, affirmed the opinion of the trial court finding in part as follows: (Here sets out a portion of the opinion)

6. Subsequent to September 20, 1971, the School City and the trustees tendered to Continental Electric a formal contract purporting to be for the electrical construction work, on the Pulaski School project. Said contract is attached hereto as Exhibit 'D'. Said tendered contract was undated and signed by Alfonso Holliday and Joe A. Torres. Mr. Holliday was not president of the School City nor was Mr. Torres secretary of the School City at the time said contract was tendered to Continental.

7. Prior to the time School City tendered to Continental the supposed contract for the electrical work on the Pulaski School project, Continental learned through contracts with other local contractors that all other contracts for the project had been returned to the School City.

8. Because construction which was a condition precedent to the electrical work had not been performed, it was impossible for Continental to perform on the contract tendered to it by School City. Continental's inability to perform was in no way caused by any action of Continental.

9. Continental then employed Attorney Porter R. Draper of the firm of Draper and Draper, 5800 Broadway, Gary, Indiana, to represent it in reference to a claim against the School City arising out of the contract with the School City for the work on the Pulaski School which should have been awarded to it in the summer of 1970. Mr. Draper attempted to arrange a meeting on December 3, 1971. He was advised that such an appointment would be made with the trustees of the School City not later than Wednesday, December 8th.

10. At the time Mr. Draper sought to arrange such a meeting, he telephoned Dr. Robert W. Schaerer, then Supervisor of Business Services of School City, and advised Dr. Schaerer the reason for his call. Upon announcement of that reason and before any discussion between Mr. Draper and Dr. Schaerer, Dr. Schaerer said 'The School City isn't going to remodel Pulaski School. You have a hollow victory and a worthless contract.'

11. Thereafter, a meeting was held on December 6, 1971, in the offices of Dr. Robert W. Schaerer, Supervisor of Business Services, School City of Gary, Ind., 620 East 10th Street, Gary, Indiana. Mr. Gibbs, Mr. Walton, Mr. Schmidt and Mr. Draper attended this meeting. Mr. Draper outlined the position of Continental with respect to rights believed to have accrued as result of the Appellate Court opinion in the initial law suit. There was also a discussion of the desirability or the possibility of negotiating a settlement of Continental's claim against the School City for the purpose of avoiding protracted litigation by the School City or others against it. Mr. Draper and the representatives of Continental were advised that the School City was at that moment in a very difficult situation as a result of a shortage of funds to pay teachers and an imminent closing of the school for lack of funds. The Board requested that determination of the Board's attitude toward Continental's position be postponed until January 17, 1972. Mr. Draper agreed to await further word from the School City or its counsel until January 17, 1972, provided only that no rights of Continental would be jeopardized as a result of a delay to suit the convenience of the School Board in view of the other very difficult problems facing it at that time.

Mr. Draper made a record of the events of this meeting in an uncontradicted letter dated December 8, 1971, addressed to Dr. Schaerer, which concludes as follows:

'Having thus recorded here the essence of our discussion, I reiterate the delay by us is occasioned only by our wish to accede to your gentlemanly request and our understanding of the difficulties the School Board is facing. If for any reason this letter does not accurately reflect the conversations held and understanding reached between us, please advise. Otherwise, we will rely on the position set forth in this letter.'

12. On January 24, 1972, Mr. Draper wrote the following letter to William J. Regan, Attorney at Law, 6 E. 67th Avenue, Merrillville, Indiana, Counsel for the School City:

'Dear Bill: This will confirm our telephone conversation on Friday last. In that discussion we talked about the reply to my letter to Dr. Schaerer of December 8, 1971. In that communication I indicated our willingness to wait until January 17, 1972 to hear what attitude the School Board has toward the Continental claim.

As you will recall, there was no response on January 17th, again because of other pressing matters involving the Board, and you had told me you were planning to meet with them last Tuesday night and would give me a response on either Wednesday or Thursday.

Then, on Friday, you told me it would not be possible for you to do business because one member of the Board was absent from the meeting due to illness, and Dr. McAndrew was also missing as a result of pressing economic problems.

You told me you would get in touch with me as quickly as possible with regard to the matter, and I assured you we would do nothing further absent hearing from you within a relatively brief period of time, so long as no rights of Continental Electric were prejudiced as a result. In accordance with that understanding, you may be assured we will not take further action absent hearing from you but based solely upon the proviso set forth in the next preceding sentence.'

13. In response to this letter Mr. Regan wrote to Mr. Draper on January 27th requesting that Mr. Draper call Mr. Regan at his earliest convenience to set a time and a place for a meeting. Such a meeting took place at 3:30 o'clock P.M., Thursday, February 17, 1972. On February 23, 1972, Mr. Draper wrote to Mr. Regan:

'This will confirm our discussion of 3:30 P.M. Thursday, February 17th. If you will recall, that meeting had been delayed for some period of time because officials of the School City of Gary were in Indianapolis to attend sessions of the legislature, because of the possibility of obtaining relief for the economically destitute entity which they represent. Extensions of time within which to hold such a meeting were granted by us out of courtesy, because you had advised the school officials so engaged.

In our discussion I outlined the position of Continental Electric albeit in generality. I stated our reasoning based on both case and test law which we believe are applicable to the situation. At the conclusion of the conference, you advised me you did not believe the School City would be willing to discuss the detriment Continental Electric alleges it suffered because the School City of Gary does not intend to build the Pulaski School, even though it had delivered an executed contract to my client for electrical installations in the structure that was once proposed to be constructed. You also advised you did not believe the School City would honor any claim by Continental Electric absent a judgment.'

14. On ...