Waxwing Cedar Products, Ltd. v. Koennecke

• Decision Date: 07 June 1977
• Parties: WAXWING CEDAR PRODUCTS, LTD., Respondent, v. Glenn KOENNECKE, dba Sunset Lumber Products, Appellant.
• Court: Oregon Supreme Court

Page 1061

564 P.2d 1061

278 Or. 603

WAXWING CEDAR PRODUCTS, LTD., Respondent, v. Glenn KOENNECKE, dba Sunset Lumber Products, Appellant.

Supreme Court of Oregon, Department 2.

Argued and Submitted May 9, 1977.

Decided June 7, 1977.

Darrell E. Bewley, Portland, argued the cause for appellant. With him on the brief were Niedermeyer & Bewley and Francis F. Yunker, Portland.

Theodore S. Bloom, Portland, argued the cause and filed the brief for respondent.

Before DENECKE, C.J., and TONGUE, BRYSON and TOMPKINS, JJ.

TOMPKINS, Justice Pro Tem.

This case involves the issue of whether a prior proceeding is res judicata in favor of the defendant or is collateral estoppel in favor of the plaintiff.

Plaintiff-lessee in this action sought a rebate of rent paid, alleging that the defendant-lessor had wrongfully withheld possession of real and personal property covered by the lease between the parties. The defendant answered by general denial, a plea in bar, affirmative defenses and a counterclaim. In the affirmative parts of his answer the defendant claimed that the plaintiff's action was barred by res judicata. For this purpose, the defendant set forth the pleadings, findings of fact, conclusions of law and judgment in the prior replevin action.

The plaintiff demurred to the plea in bar and affirmative portions of the answer which pled res judicata. The trial court sustained the demurrer and the defendant filed another answer.

In the new answer the defendant admitted the lease of the property and rental of $6,000 and $1,000 per month but denied the other allegations of the complaint which sought a rebate of the rent. For a first and separate answer and by way of a counterclaim, the defendant alleged the lease terminated August 30, 1971, and that the plaintiff held over for one day to the defendant's damage in the sum of $200. For a second and separate defense and by way of a counterclaim, the defendant alleged an oral extension of the lease until September 15, 1971, for the sum of $4,500 paid by a check later dishonored by the defendant. The answer concluded by a request for the award of $4,700 damages to the defendant.

Upon plaintiff's motion the trial court entered summary judgment for plaintiff based upon the collateral estoppel effect of the findings of fact and conclusions of law made in the earlier action. Defendant appeals, assigning as error the trial court's sustaining of plaintiff's demurrer. Defendant asserts that plaintiff's present action is barred by the doctrine of res judicata.

In October 1970 the parties entered into a written lease of certain real and personal property constituting a sawmill and related equipment. Plaintiff-lessee agreed to pay a consideration of $6,000 a month. A subsequent oral agreement was made whereby plaintiff also leased a planing mill on the premises and a Hyster forklift for an additional consideration of $1,000 a month. It was also agreed that plaintiff would pay $500 a month for the use of defendant's accountant.

The controversy between these parties began on August 20, 1971, when the sawmill and some equipment were destroyed by fire. Although plaintiff's leasehold did not expire until September 15, 1971, defendant refused plaintiff permission to enter the property after the fire. As a result of these occurrences three separate lawsuits have been filed. Koennecke v. Waxwing Cedar Prod., 273 Or. 639, 543 P.2d 669 (1975), resulted in reformation of the written lease but involved no issue relevant to the present litigation. In the prior replevin action between these parties, plaintiff sought to recover possession of approximately 1,000,000 board feet of lumber and logs and business records, along with damages for the withholding of this and other property subject to the lease. The defendant counterclaimed, seeking recovery on a check $4,500 which plaintiff had given defendant to extend the term of the lease from August 31, 1971, to September 15, 1971. Payment on the check was stopped by plaintiff after the fire. Defendant also claimed damages for plaintiff's failure to leave the premises in good order and condition.

The replevin action was filed in the circuit court for Washington County and was entitled Waxwing Cedar Products, Ltd. v. Glenn Koennecke (No. 32--438). After a trial to the court, a judgment was entered for plaintiff for $2,920.71 pursuant to the following findings of fact and conclusions of law made by the trial court:

'The Court makes the following Findings of Fact:

'I.

'The plaintiff and defendant entered into an agreement of lease as evidenced by plaintiff's Exhibit #1.

'II.

'Plaintiff and defendant also orally agreed that plaintiff would lease or rent the planing mill and a forklift for the monthly rental of $1,000. It was also agreed that defendant's accountant would do plaintiff's accounting work and plaintiff would pay one-half his monthly salary which would approximate $500, to be paid at the end of the month in which the work was done.

'* * *

'IV.

'Plaintiff paid all monthly lease rentals under the written lease agreement, including the rental for August, 1971. Plaintiff also paid all rental which became due for the planing mill and fork lift, including the rental of August, 1971.

'* * *

'VIII.

'On August 18, 1971, plaintiff and defendant agreed that plaintiff would continue under the lease agreement until September 15, 1971, with rental for that additional period at $3,000. It was also agreed that plaintiff would continue to rent the planing mill and fork lift for the month of September, 1971, with rent at $1,000. It was also agreed that plaintiff would continue the use of the accountant's services and pay $500 therefor. The parties agreed that such continued leasing and rental would continue pursuant to the terms of the original lease agreement. Plaintiff delivered to defendant and defendant accepted plaintiff's check in the amount of $4,500 in payment of said rentals and accounting services for September.

'IX.

'On Friday, August 20, 1971, the sawmill was destroyed and the planing mill was damaged by fire. Mr. W. J. Browne (plaintiff's agent) and defendant were on the premises shortly after the outbreak of the fire. The defendant demanded the keys to the office from Mr. Browne, refused Browne admittance to the office, and ejected Browne from the premises. The effect of the fire make it impossible for the sawmill or planing mill to be operated and used by the plaintiff.

'* * *

'That plaintiff was at all times material the owner of and entitled to the possession of approximately one million board feet of lumber and logs and business records of the plaintiff situated on the premises leased by plaintiff from the defendant pursuant to an agreement of lease as evidenced by plaintiff's Exhibit #1.

'That plaintiff was entitled to the use and possession of a fork lift until the expiration of the lease entered into between plaintiff and defendant, said agreement of lease evidenced by plaintiff's Exhibit #1.

'* * *

'XVIII.

'Plaintiff employed a substitute fork lift at a reasonable cost of $520.71 in order to load lumber for movement to the pole yard. In order to move the lumber prior to August 31 it was necessary for plaintiff to reband 300M at $1.00 per M for a total cost of $300. In order to move the lumber prior to August 31 it was necessary for plaintiff to resort the lumber at a cost of $2,600. * * *

'* * *

'XX.

'Plaintiff did not 'clean up' the premises upon removal of lumber. The reasonable cost of such 'clean up' was $500. Defendant's counterclaim of damage by reason of loss of carrier blocks, missing banding machine and missing lumber is not supported by a preponderance of the evidence.

'* * *

'Based upon the foregoing Findings of Fact the Court makes the following Conclusions of Law:

'I.

'The fire of August 20, 1971, rendered the leased and rented premises destroyed or at least impossible to operate, and therefore rental thereafter, including that for the month of September, was abated.

'II.

'The defendant wrongfully ejected the plaintiff from possession of the leased premises on August 20, 1971.

'III.

'Plaintiff was entitled to be refunded the payment of rental for the month of September, first on the grounds that such rental was abated as a result of the fire, and secondly that the plaintiff was entitled to rescind the rental agreement for September by reason of the fire and defendant's wrongful eviction. Plaintiff's action in stopping payment of the $4,500 did not wrongfully deprive defendant of any right or property or cause damage to defendant since defendant had no right or valid lien in said property.

'* * *

'That plaintiff is the owner and entitled to the possession of approximately one million board feet of lumber and logs and the business records of plaintiff, said property being situated on the premises leased from the defendant by plaintiff pursuant to an agreement of lease as evidenced by plaintiff's Exhibit #1, and the fork lift set forth in said lease until the expiration of said lease.

'* * *

'IV.

'Defendant wrongfully interfered with and deprived plaintiff of its quiet enjoyment of the leasehold premises to a substantial degree from August 20, 1971, to August 31, 1971, inclusive. Such action on the part of defendant caused plaintiff damage in the amount of $3,420.71 and defendant therefore is indebted to plaintiff for such amount.

'* * *

'VI.

'Plaintiff failed to leave the premises in good order and condition and therefore is indebted to defendant for cost of such clean up in the amount of $500.

'VII.

'Neither ...