Southern Arizona York Refrigeration Co. v. Bush Mfg. Co.

• Decision Date: 28 April 1964
• Docket Number: No. 18684.,18684.
• Citation: 331 F.2d 1
• Parties: SOUTHERN ARIZONA YORK REFRIGERATION COMPANY, a corporation, and Arizona York Refrigeration Company, a corporation, Appellants, v. The BUSH MANUFACTURING COMPANY, a corporation, now known as Bunham & Bush Manufacturing Company, a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

331 F.2d 1 (1964)

SOUTHERN ARIZONA YORK REFRIGERATION COMPANY, a corporation, and Arizona York Refrigeration Company, a corporation, Appellants, v. The BUSH MANUFACTURING COMPANY, a corporation, now known as Bunham & Bush Manufacturing Company, a corporation, Appellee.

No. 18684.

United States Court of Appeals Ninth Circuit.

April 28, 1964.

COPYRIGHT MATERIAL OMITTED

John W. Moran, Los Angeles, Cal., for appellants.

Tremaine & Shenk, John Shenk, Los Angeles, Cal., for appellee.

Before BARNES, JERTBERG and MERRILL, Circuit Judges.

JERTBERG, Circuit Judge:

The appellants, Southern Arizona York Refrigeration Company, a corporation, and Arizona York Refrigeration Company, a corporation, were the plaintiffs in the District Court and the appellee, The Bush Manufacturing Company, a corporation, now known as Bunham & Bush Manufacturing Company, a corporation, was the defendant below.

In this opinion we will refer to the parties by their designations in the District Court.

The plaintiffs are corporations organized and existing under the laws of the State of Arizona. The defendant is a corporation organized and existing under the laws of the State of Connecticut and has a plant and business office in the County of Riverside, State of California, within the territorial area embraced by the United States District Court for the Southern District of California, Central Division.

The action instituted on March 15, 1961 by the plaintiffs against the defendant is one for indemnification for money paid by the plaintiffs to Swift and Company, an Illinois corporation, under an express warranty between plaintiffs and Swift and Company. Plaintiffs filed an amended complaint on May 23, 1961.

To provide the necessary background for the institution of the action, it is necessary to review prior history of the litigation in which the plaintiffs and Swift and Company were involved, and certain phases of which were considered by this Court in Authorized Supply Company of Arizona v. Swift & Company, 271 F.2d 242 (9th Cir. 1960) and Rehearing in 277 F.2d 710 (9th Cir. 1960). The material facts are not seriously in dispute, and the following summary has been taken from the admitted facts in the Pretrial Conference Order and Finding of Fact of the District Court.

On or about May 31, 1955, plaintiffs entered into a written contract with Swift and Company in the State of Arizona, to install certain refrigeration equipment in Swift and Company's building in Tucson, Arizona; that by the terms of the written contract plaintiffs were required to furnish and install, among other things, two refrigeration coils; that in order to perform the contract of installation, two refrigeration coils which had been manufactured, furnished and designed by the defendant were purchased by the plaintiffs from the Authorized Supply Company of Arizona, an Arizona corporation, the Arizona distributor for the defendant and were installed by the plaintiffs in Swift and Company's building; that on or about September 5, 1955 the refrigeration system was complete and installed by plaintiffs and the system worked satisfactorily thereafter for a period of time; that prior to the start-up and operation of the refrigeration system, said coils were tested by the plaintiffs and found to be satisfactory and without any leaks whatsoever; that thereafter a leak developed in the south coil which caused no damage; that the west coast representative of defendant instructed plaintiffs' maintenance engineer how to repair the same, which procedure was followed, and thereafter said coil operated satisfactorily for a period of time; that thereafter two more leaks appeared, one in the north coil and one in the south coil, both of which leaks were repaired in the same fashion as the first; that the cost of repairs of the three leaks were paid by the plaintiffs but they were reimbursed therefor by the defendant; that over the weekend of December 3rd and 4th, 1955, another leak developed in one of the coils permitting ammonia gas to escape into Swift and Company's storage area and as a result thereof meat and other things were damaged in the sum of $9,175.29; that on or about December 27-28, 1955 defendant, through its distributor in Arizona, the Authorized Supply Company, and at no cost to plaintiffs, replaced said coils with new Bush coils of an improved design; that said new coils were installed by plaintiffs in said plant and performed satisfactorily.

That on or about October 19, 1956, Swift and Company instituted action in the United States District Court for the District of Arizona against the plaintiffs and the defendant.

That at the time that plaintiffs were served as party-defendants in the Swift and Company action, plaintiffs called upon the defendant herein to take over the defense of the lawsuit and to pay any damage sustained by Swift and Company; that at that time and at all times thereafter, defendant refused to do so.

That on February 18, 1957, plaintiffs filed a third party lawsuit in the United States District Court for the District of Arizona, naming as defendants the defendant herein and the Authorized Supply Company; that thereafter said court found that it had no jurisdiction over the defendant herein by reason of the fact that it was not doing business in Arizona; that the law suit was dismissed as to the defendant herein on the above mentioned basis.

That thereafter plaintiffs herein were found liable to Swift and Company for the damage to the meat contained in the storage area on the basis of a breach of an express warranty, which liability was sustained by this court in 277 F.2d 710.

That the Authorized Supply Company was found not liable to the plaintiffs on the ground that plaintiffs had elected to rescind their contract for the sale of goods under the Arizona Sales Act, and having thus elected had chosen an exclusive remedy for damage limiting liability to replacement of the goods sold as against the Authorized Supply Company. See 271 F.2d 242.

That thereafter on July 29, 1960 plaintiffs paid in full said judgment of $9,175.29 and also paid in the course of the defense of said lawsuit and appeals relating thereto, attorney's fees and costs in the amount of $5,060.12.

The jurisdiction of the District Court was invoked upon the ground of diversity of citizenship under 28 U.S.C. § 1332. No question is raised as to the jurisdiction of the District Court, or of this court, except defendant claims that the matter in controversy is less than the sum of $10,000.00.

At the trial of the action in the District Court, evidence was offered by plaintiffs in the form of testimony contained in depositions of Leland Gideon, Service Manager of Arizona York Refrigeration Company, one of the plaintiffs; Charles Sayers, Foreman in charge of installation of equipment for plaintiffs; Maurice D. Gerhart, an independent refrigerator serviceman; Allen Decker, Vice-President of defendant in charge of Engineering under § 43(b), Federal Rules of Civil Procedure; Oliver Butler, West Coast Representative of defendant at the time of the original installation under the same section; and Dino Morelli, who was the only live witness called by the plaintiffs, a Professor of Engineering and who testified as an expert. In addition there was received in evidence itemized statements of the legal services rendered to the plaintiffs in the prior litigation, photographs of refrigeration equipment, catalogs issued by the defendant and installation instructions issued by the defendant.

At the conclusion of the plaintiffs' case, the District Court granted defendant's motion, made under Rule 41(b) Federal Rules of Civil Procedure, and ordered the action dismissed with prejudice.

On this appeal plaintiffs specify that the District Court erred:

"In granting the dismissal with prejudice at the conclusion of plaintiffs\' evidence (1) on the basis of the fact that defendant, as a matter of law, was estopped to deny that the refrigeration coils, furnished by defendant, were defective when furnished; (2) under the doctrine of res ipsa loquitur, an inference of negligence was raised against defendant for having furnished the defective refrigeration coils, and (3) said inference was not overcome by defendant who offered no evidence by way of explanation of the defective coils, and (4) even without collateral estoppel under the doctrine of equitable indemnification, the factual situation presented by plaintiffs, was such that the doctrine of res ipsa loquitur placed the burden on defendant of at least offering evidence to overcome the inference of negligence raised by the stipulated facts and plaintiffs\' evidence."

The defendant states that the appeal presents the following questions:

1. Whether Appellants are entitled to equitable indemnity; and if so, under what theory?

(a) Collateral estoppel;

(b) Negligence; and if not proved,

2. Whether this case is one in which the doctrine of res ipsa loquitur applies in order to establish negligence?

3. Is the action barred by the Statute of Limitations?

4. Does the Court have jurisdiction of the matter?

Before considering the specifications of error on which plaintiffs rely, we shall first resolve the conflicting views presented by the parties as to the manner in which this Court should view the evidence which was before the District Court and upon which the judgment of dismissal of the action was entered, and dispose of the affirmative defenses raised by defendant which are set forth in questions 3 and 4 posed by it.

As above noted, after plaintiffs had completed the presentation of their evidence, the defendant moved under Rule 41(b), Federal Rules of Civil Procedure, for a dismissal with prejudice of plaintiffs' action. The District Court granted the motion and dismissed the action with prejudice.

Rule 41 entitled "Dismissal of Actions" provides under subparagraph (a) for voluntary dismissal. Subparagraph (b) provides for involuntary...