Urbanational Developers, Inc. v. Shamrock Engineering, Inc.

• Decision Date: 09 February 1978
• Docket Number: No. 3-475A71,3-475A71
• Citation: 175 Ind.App. 416,372 N.E.2d 742
• Parties: URBANATIONAL DEVELOPERS, INC., Miller Village Associates, a limited partnership, April Construction Co., Inc. and United States Fidelity and Guaranty, Co., Defendants-Appellants, v. SHAMROCK ENGINEERING, INC., Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 742

372 N.E.2d 742

175 Ind.App. 416

URBANATIONAL DEVELOPERS, INC., Miller Village Associates, a limited partnership, April Construction Co., Inc. and United States Fidelity and Guaranty Co., Defendants-Appellants, v. SHAMROCK ENGINEERING, INC., Plaintiff-Appellee.

No. 3-475A71.

Court of Appeals of Indiana, Third District.

Feb. 9, 1978.

James A. Holcomb, Robert F. Peters of Lucas, Clifford, Kane & Holcomb, Merrillville, for defendants-appellants.

William I. Marlatt, Marlatt & Kappos, Merrillville, for plaintiff-appellee.

HOFFMAN, Judge.

Defendants-appellants Urbanational Developers, Inc.; April Construction Co., Inc.; Miller Village Associates; and United States Fidelity and Guaranty Company appeal from an adverse judgment on a construction contract and the foreclosure of a mechanic's lien.

Urbanational Developers, Inc. (Urbanational) is an Illinois corporation wholly owned by April Construction Co., Inc. (April). Urbanational's purpose is to act as a general contractor on various Federal Housing Administration (FHA) projects so that April could obtain a profit on work it performed itself. Morris Kalish is the President of both Urbanational and April, as well as the sole general partner of Miller Village Associates. Miller Village Associates is a limited partnership organized for the purpose of owning and investing in real estate and is owner of the Miller Village Apartment complex located in Gary, Indiana.

On August 1, 1970, Urbanational entered into a construction contract with Miller Village Associates (sometimes referred to as "Owner") whereby Urbanational was to act as general contractor for the construction of the Miller Village Apartment complex in Gary, Indiana. Also, on August 1, 1970, Urbanational and Miller Village Associates executed a "No-Lien Agreement" in which the general contractor waived the rights of itself, subcontractors, and materialmen to file mechanic's liens for work performed and materials supplied by them upon the Owner's property.

On August 13, 1970, Urbanational entered into a subcontract with Shamrock Engineering, Inc. (Shamrock) in which Shamrock agreed to perform certain site preparation, foundation preparation and sewer work on the Miller Village Project.

Periodic progress payments were made to Shamrock under the subcontract. However, a dispute arose between the parties as to various items of credit and of additional compensation, and accordingly, Urbanational withheld further payment. Shamrock's action sought recovery of the balance due under the contract, the value of certain additional work performed by Shamrock, and foreclosure of its mechanic's lien on the real estate involved. United States Fidelity and Guaranty was surety on the payment bond posted by Urbanational.

Trial to the court resulted in a judgment against appellants in the sum of $16,987.48, plus prejudgment interest from August 18, 1971, to the date of judgment on June 7, 1973. The trial court further found that a valid no-lien agreement existed at the time of the execution of Shamrock's subcontract with Urbanational. Finally, the trial court found against Shamrock on its claim for punitive damages.

On August 3, 1973, Shamrock filed its motion to correct errors asserting, inter alia, the inadequacy of damages and the invalidity of the no-lien agreement. Upon the failure of the trial court to rule upon such motion within thirty days, the Supreme Court of Indiana appointed a successor judge on December 4, 1973. See, Indiana Rules of Procedure, Trial Rule 53.1(A). The successor judge ordered a transcript of the proceedings to be prepared. And, after hearing arguments on Shamrock's motion to correct errors, the successor judge amended the judgment by increasing the amount thereof to $43,557.36, plus prejudgment interest, by finding that Shamrock was entitled to foreclosure of its mechanic's lien, and by permitting the recovery of attorney's fees.

On January 6, 1975, appellants filed their motion to correct errors alleging, inter alia, that the amended judgment was contrary to law since the court failed to specify the general reasons for its granting of corrective relief. See, Indiana Rules of Procedure, Trial Rule 59(E)(7).

The successor judge granted the motion to correct errors in this respect and modified the judgment by setting out his reasons for granting corrective relief.

On February 20, 1975, appellants filed their petition to require Shamrock to make an election as to whether it would hold the undisclosed principal (Miller Village Associates) or the agent (Urbanational) liable for judgment. On February 24, 1975, appellants filed their second motion to correct errors. Both motions were subsequently denied and this appeal follows.

The issues presented on appeal concern the role of a successor judge who did not preside at the trial of the case to rule upon a motion to correct errors and whether the successor judge erred in awarding judgment for "extras" under the construction contract, in awarding prejudgment interest on the "extras", in entering judgment against April and Miller Village Associates who were not parties to Shamrock's subcontract with Urbanational, and in allowing foreclosure of Shamrock's mechanic's lien.

Before discussing the merits of the case at bar, it is necessary to dispose of Shamrock's contention that appellants have waived any consideration of the issues by failing to specifically set forth in their brief each error assigned in their motion to correct errors that appellants intend to raise on appeal. Indiana Rules of Procedure, Appellate Rule 8.3(A)(7). However, appellants' summary of argument states that the several specifications of error in its motion to correct errors were consolidated into five separate categories of error. And, as in Ind. S. Bd. of Tax Com'rs v. Lyon & Greenleaf Co. (1977), Ind.App., 359 N.E.2d 931 (transfer denied), each section of argument contains numerical reference to the specifications of error in the motion to correct errors relating to each section of argument. In the case at bar, however, some of the sections of argument contain such numerical references in the concluding paragraphs of the argument rather than as a preface to the argument. Although the noncompliance in the case at bar is not so substantial as to interfere with a rational consideration of the issues, appellate counsel should always make a good faith effort to diligently comply with the letter of the rules. Murphy, Admx. v. Ind. Harbor Belt R. R. Co. (1972), 152 Ind.App. 455, 284 N.E.2d 84. To do otherwise is to take a chance which could be easily avoided.

Appellants first contention is that a special judge who did not preside at trial may not weigh evidence and determine the credibility of witnesses when ruling upon a motion to correct errors. Before the adoption of Trial Rule 53.1, supra, the appropriate remedy when a trial judge failed to rule upon a motion for new trial was a writ of mandate. Lies v. Ortho Pharmaceutical Corporation (1972), Ind., ¹ 284 N.E.2d 792, order modified in part, 259 Ind. 192, 286 N.E.2d 170; State ex rel. Harlan v. Municipal Court (1943), 221 Ind. 12, 46 N.E.2d 198. Under the provisions of Trial Rule 53.1, supra, however, the failure of the trial judge to rule upon a motion to correct errors is remedied by the Indiana Supreme Court's appointment of a successor judge to decide the matter. In such instances, Trial Rule 53.1 is to be read in conjunction with Indiana Rules of Procedure, Trial Rule 63(A), which provides, in pertinent part, as follows:

"If the judge before whom the trial or hearing was held is not available by reason of death, sickness, absence or unwillingness to act, then any other judge regularly sitting in the judicial circuit or assigned to the cause may perform any of the duties to be performed by the court after the verdict is returned or the findings or decision of the court is filed; but if he is satisfied that he cannot perform those duties because he did not preside at the trial or for any other reason, he may in his discretion grant a new trial or new hearing, in whole or in part."

This rule provides that a successor judge may in his discretion perform any of the duties that may have been performed by the regular trial judge. A problem arises, however, in those instances where the successor judge is confronted with issues involving the trial judge's familiarity with the evidence. Often the problem can be resolved by the procurement and examination of a transcript of evidence by the successor judge. See, Baker v. American Metal Climax, Inc. (1976), Ind.App., 344 N.E.2d 73, 82 (transfer denied); Lies v. Ortho Pharmaceutical Corporation, supra. Nevertheless there remain instances in which the successor judge's failure to preside at trial renders him ill-equipped to perform the functions of the regular trial judge. One of these instances occurs when he is confronted with an issue which requires for its resolution a determination of the credibility of witnesses or the weight to be accorded certain evidence. Thus, Trial Rule 63(A) confers "discretion" upon the successor judge to grant a new trial or new hearing, in whole or in part, when he is satisfied that he cannot perform the duties of the regular judge because he did not preside at the trial.

The term "discretion" implies flexibility in light of varying circumstances. It is a privilege allowed a judge within the confines of justice to decide and act in accordance with what is fair and equitable. The exercise of discretion is reviewable only for an abuse thereof. Preuss v. McWilliams (1967), 141 Ind.App. 602, 230 N.E.2d 789.

"An abuse of discretion is an erroneous conclusion and judgment, one clearly against the logic and effect of the facts and circumstances before the Court or the Reasonable, probable and actual deductions to be drawn therefrom." Dunbar v. Dunbar, et al. (1969), 145 Ind.App. 479, 251 N.E.2d 468.

When a successor judge attempts to...