Wm. A. Smith Contracting Co., Inc. v. Missouri Pac. R. Co.

• Decision Date: 27 December 1978
• Docket Number: No. KCD,KCD
• Citation: 575 S.W.2d 865
• Parties: WM. A. SMITH CONTRACTING CO., INC., Appellant, v. MISSOURI PACIFIC RAILROAD COMPANY, Respondent. 29554.
• Court: Missouri Court of Appeals

Page 865

575 S.W.2d 865

WM. A. SMITH CONTRACTING CO., INC., Appellant, v. MISSOURI PACIFIC RAILROAD COMPANY, Respondent.

No. KCD 29554.

Missouri Court of Appeals, Kansas City District.

Dec. 27, 1978.

Robert A. Babcock, Margolin & Kirwan, Kansas City, for appellant.

B. Kent Snapp, James M. Beck, Johnson, Lucas, Bush & Snapp, Kansas City, for respondent.

Before SOMERVILLE, P. J., and DIXON and TURNAGE, JJ.

PER CURIAM.

Wm. A. Smith Contracting Co., Inc. (Smith), a Missouri corporation, entered into a written contract with Missouri Pacific Railroad Company (Railroad), also a Missouri corporation, for the rehabilitation of certain main and auxiliary tracks between Marlin and Waco, Texas. Controversies arising between the parties after Smith completed work in the project have bred a series of litigation.

The first action in this series of litigation commenced on January 21, 1972, when Smith filed a petition for damages for breach of contract against Railroad in the Circuit Court of Jackson County, Missouri. In a motion for summary judgment filed therein Railroad affirmatively alleged that paragraph 24 of the contract constituted an arbitration clause, that the contract was one "evidencing a transaction involving commerce", ¹ and pursuant to the Federal Arbitration Act, Title 9, U.S.C.A., arbitration was Smith's "sole and exclusive remedy" for resolving all controversies which had arisen between the parties. Prior to any judicial disposition of said breach of contract action filed January 21, 1972, the same was voluntarily dismissed by Smith without prejudice on June 6, 1975.

The second action in this series of litigation commenced on November 21, 1975, when Smith filed a four count petition against Railroad in the Circuit Court of Jackson County, Missouri. By way of Count One Smith sought a declaratory judgment with respect to whether paragraph 24 of the contract was a binding arbitration clause, and, if it was, its "meaning and effect" upon the parties with regard to the controversies which had arisen between them. ² Counts Two, Three and Four, each pleaded in the alternative, respectively sought a judgment for damages for breach of contract, a judgment for the reasonable value of additional work done and completed pursuant to an oral amendment to the written contract, and a judgment for the amount retained by Railroad under a "1% Retention" provision contained in the contract.

Railroad filed a motion for summary judgment on all four counts of the petition in the latest action in the series of litigation, disposition of which resulted in the following judgment being entered: "Judgment is granted in favor of the defendant (Railroad) and against the plaintiff (Smith) on all counts of plaintiff's petition. Costs against the plaintiff, for which let execution issue."

Legal requisites of judgments in declaratory judgment actions have been a seldom discussed subject in this state. Those few cases which have done so hold that it is the express duty of a trial court in a declaratory judgment action to make a declaration of the rights of the parties and include such declaration in the judgment or decree. Smith v. Pettis County, 345 Mo. 839, 136 S.W.2d 282, 285 (1940); and Smith v. Worsham, 552 S.W.2d 367, 370 (Mo.App.1977). Simply put, as applied to this case (assuming for purposes of discussion that the matter was ripe for summary judgment pursuant to Rule 74.04(c)), the trial court was required to declare whether paragraph 24 of the contract constituted an arbitration clause, and, if it did, whether or not it was enforceable in this state as a means of resolving the controversies which had arisen between the parties, and to include such declarations in any judgment purporting to finally dispose of Count One. It is patently clear from the judgment entered in this case that such was not done.

Concomitantly, the above injects the vexing question of whether a final judgment was ever rendered as to Count One (for declaratory judgment), a question which this court is obliged to explore and answer sua sponte in order to determine whether an appeal presently lies. Citizens Ins. Co. of N. J. v. Kansas City, Etc., 543 S.W.2d 532, 534 (Mo.App.1976); and Baumstark v. Jordan, 540 S.W.2d 611, 612 (Mo.App.1976). As noted in Citizens Ins. Co. of N. J., 543 S.W.2d at 535, "the circumstances of each case must be considered in determining the finality of the judgment entered below."

Having concluded that the judgment entered by the trial court as to Count One did not comport with the required content of a declaratory judgment, supra, simple logic compels the attendant conclusion that in this context no final judgment was rendered on Count One. In short, the skeletal judgment which was rendered failed to meet the legally prescribed requisites for judgments in declaratory judgment actions. The infirmity of the judgment as to Count One is triply compounded by the nature of review imposed by summary judgment, the contingent status of alternative Counts Two, Three and Four, and last, but by no means least, the emaciated transcript filed in this appeal. The transcript filed in this case is noteworthy for its sparsity of facts. For example, the contract which is the hub of this litigation was not included, nor the dates when Smith began and completed the work, although Railroad in its motion for summary judgment raised both Texas and Missouri Statutes of Limitations (?) as bars to all four counts of Smith's petition. Although Railroad's position in the first action in this series of litigation was that paragraph 24 of the contract constituted an arbitration clause and was binding upon the parties as the "sole and exclusive remedy" for resolving their controversies, it did a complete turnabout in the present action by alternatively alleging at the trial...