Case Title: Tidwell v. HOM, Inc.

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1995-06-01T00:00:00Z

Document:
Tidwell v. HOM, Inc.1995 WY 78896 P.2d 1322Case Number: 94-109Decided: 06/01/1995Supreme Court of Wyoming

Ronni 
Deane TIDWELL and Cecilia J. Tidwell, Appellants (Plaintiffs),

v.

HOM, INC., Appellee 
(Defendant).

 

Appeal 
from District Court, Laramie County, Nicholas G. Kalokathis, 
J.

Donna D. Hoffdahl of 
Hoffdahl Law Office, Cheyenne, for 
appellants.

Patrick E. Hacker, Cheyenne, 
for appellee.

Before GOLDEN, C.J., and THOMAS, MACY, TAYLOR and 
LEHMAN, JJ.

TAYLOR, 
Justice.

[¶1]      A latent defect 
in privately owned housing, rented with governmental assistance, caused 
debilitating health problems and stress disorders for appellants. Appellants 
sued the agency providing rental assistance, only to suffer summary judgment for 
lack of a duty running from that agency to appellants. Undaunted, appellants 
filed the same claim against HOM, Inc., which had contracted with the previously 
sued agency to inspect rentals. Finding that HOM, Inc. can neither bargain for 
nor incur more duty to appellants than the agency owned them, we affirm the 
district court's order granting summary judgment in favor of HOM, 
Inc.

I. 
ISSUES

[¶2]      Appellants 
present the following issues for review:

Issue 1

Whether the District Court erred by granting 
Defendant, HOM, Inc.'[s], Motion for Summary Judgment when material issues of 
fact do exist

Issue 2

Whether the Federal regulations governing the Housing 
Assistance Payments Program, or the contract entered into to enforce these 
regulations, created a legally enforceable duty to the 
tenant

Issue 3

Whether Defendant, HOM, Inc., had a duty to perform 
their contract using ordinary care to avoid injury to third persons who could 
foreseeably be harmed by the negligent performance of the 
contract

[¶3]      Appellee posits 
relatively disparate issues:

I.          
Whether Congress or the agency intended to confer standing upon tenants 
receiving Section 8 rental subsidies to enforce contract terms between the local 
public housing authority and its agents as third party 
beneficiaries.

II.          
Whether the Wyoming Governmental Claims Act bars a personal injury action 
against the agent of a public housing authority absent tortious conduct on the 
part of the agency. 

III.         
Whether appellants' proper remedy is an action against the owner of the 
property, rather than HOM, Inc.

IV.        Whether 
appellants, by execution of the indemnity agreement have agreed to hold CHA 
[Cheyenne Housing Authority], and its agent HOM, Inc., harmless from any 
personal injury claims.

II. 
FACTS

[¶4]      Appellants, Ronni 
and Cecilia Tidwell (the Tidwells), mother and daughter, rented a privately 
owned Cheyenne, Wyoming home from Leonard Sullivan in February 1988, assisted by 
partial rent subsidy payments provided through the Cheyenne Housing Authority. 
The subsidy payments originated with the United States Department of Housing and 
Urban Development (HUD) pursuant to the United States Housing Act of 1937, as 
amended by § 8 of the Housing and Community Development Act of 1974 (42 U.S.C. § 
1437f (1988)).

[¶5]      Soon after the 
Tidwells moved in, Ronni began to experience debilitating headaches and nausea, 
resulting in loss of employment and an increasing inability to care for herself 
or her daughter. In addition, Cecilia, fearing that her mother's death was 
imminent, began to experience "separation anxiety disorder." Enlisting, inter 
alia, the assistance of personnel from Cheyenne's City Engineer's office and the 
Cheyenne Fire Department, Ronni sought in vain to establish an environmental 
etiology for her health problems.

[¶6]      Eighteen months 
after the headaches began, a Cheyenne artisan, to be immortalized in these 
proceedings only as "Bill the Plumber," found an open sewer pipe, hidden under 
building materials in the basement of the Tidwell rental, which was leaking 
methane fumes into the area of Ronni's bedroom. Ronni's physician confirmed that 
her maladies were consistent with those caused by exposure to sewer gas, i.e., 
methane.

[¶7]      Claiming a duty 
to provide safe and sanitary housing had been breached, the Tidwells filed suit 
against their landlord, Leonard Sullivan, and their rent subsidy benefactors, 
the Cheyenne Housing Authority. Finding no duty running from the Cheyenne 
Housing Authority to the Tidwells, the district court granted partial summary 
judgment for the Cheyenne Housing Authority. That judgment was not 
appealed.

[¶8]      Undeterred, the 
Tidwells filed what the district court would term the "same claim" against HOM, 
Inc. (HOM),1 alleging that HOM provided 
inspection services for the Cheyenne Housing Authority and was negligent in 
failing to find the offending sewer pipe. The Tidwells' suit against HOM was 
consolidated with the surviving cause against the landlord under the same action 
wherein summary judgment had, earlier, been granted in favor of the Cheyenne 
Housing Authority.

[¶9]      HOM moved for 
summary judgment, disclaiming any duty to the Tidwells. The Tidwells responded, 
asserting they were beneficiaries of an implied covenant of ordinary care 
running from HOM. Finding no issue of material fact and no duty on HOM favoring 
the Tidwells, the district court granted partial summary judgment to HOM, from 
which the Tidwells timely prosecuted this appeal.

III. 
STANDARD OF REVIEW

[¶10]   Appellate affirmation of summary 
judgment is warranted only in the absence of genuine issues of material fact 
when the moving party is entitled to judgment as a matter of law. W.R.C.P. 
56(c); Lincoln v. Wackenhut Corp., 867 P.2d 701, 702 (Wyo. 1994). Materiality 
arises from a fact's capacity to establish or refute an essential element of a 
claim or defense thereto. Lyden v. Winer, 878 P.2d 516, 518 (Wyo. 1994). Once 
the movant establishes a prima facie case for summary judgment, the opposing 
party is obliged to marshall specific facts, as opposed to general or conclusory 
allegations, which establish genuine issues of material fact. Thomas by Thomas 
v. South Cheyenne Water and Sewer Dist., 702 P.2d 1303, 1304 (Wyo. 1985) 
(quoting Roth v. First Sec. Bank of Rock Springs, Wyo., 684 P.2d 93, 95 (Wyo. 
1984)). Without deference to the district court's conclusions, appellate review 
indulges the pleadings of the party opposing summary judgment with the benefit 
of every favorable inference which may fairly be derived from the record. Hanna 
v. Cloud 9, Inc., 889 P.2d 529, 532 (Wyo. 1995).

[¶11]   Summary judgments merit exacting 
scrutiny in negligence actions. MacKrell v. Bell H2S Safety, 795 P.2d 776, 779 
(Wyo. 1990). However, even when negligence is alleged, summary judgment may be 
appropriate. Brown v. Avery, 850 P.2d 612, 614-15 (Wyo. 1993). This usually 
occurs because duty is the first essential element of any negligence action. 
Danculovich v. Brown, 593 P.2d 187, 195 (Wyo. 1979). The existence of duty is a 
question of law for the court and without duty, negligence is not a viable 
theory of recovery. Hill v. Park County By and Through Bd. of County Com'rs, 856 P.2d 456, 458 (Wyo. 1993) (quoting MacKrell, 795 P.2d at 
779).

IV. 
DISCUSSION

A. IMPLIED 
COVENANT OF ORDINARY CARE

[¶12]   Duty sufficient to support an 
action for negligence may be engendered by common law, statute or contract. 
Brubaker v. Glenrock Lodge Intern. Order of Odd Fellows, 526 P.2d 52, 58 (Wyo. 
1974). In opposing summary judgment, the Tidwells asserted that HOM's duty took 
the form of an implied covenant of ordinary care.

[¶13]   Such an implied covenant may arise 
from a contract which creates a relationship engendering a duty to exercise 
ordinary care. Id. at 59. Although the duty at issue in Brubaker was between the 
parties to a contract, it is clear that such a duty may also extend to 
third-party beneficiaries in the proper circumstances. Ely v. Kirk, 707 P.2d 706, 710 (Wyo. 1985). Here, however, the Tidwells, insisting themselves to be 
third-party beneficiaries, presented the district court with a housing voucher 
contract between the Cheyenne Housing Authority and Leonard Sullivan, two 
strangers to this appeal. Without a contract involving HOM, there can be little 
basis for a covenant, implied or otherwise.

[¶14]   Moreover, the Tidwells' case 
against HOM was not written upon a clean slate. See CLS v. CLJ, 693 P.2d 774, 
775 (Wyo. 1985). The district court had already found that no duty ran from the 
Cheyenne Housing Authority to the Tidwells. Not having appealed that judgment, 
the Tidwells cannot resurrect their moribund arguments against the Cheyenne 
Housing Authority in their suit against HOM.

[¶15]   Generally, when a court has decided 
an issue of fact or law necessary to its judgment, relitigation of the issue in 
a suit involving one of the parties to that judgment is precluded. Atchison v. 
State of Wyo., 763 F.2d 388, 391 (10th Cir. 1985). To permit the contrary is to 
imbue the courts with "the aura TEXT] of the gaming table[.]" Blonder-Tongue 
Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 329, 91 S. Ct. 1434, 1443, 28 L.E.2d 788 (1971). The certainty of that rule is enhanced 
where the legal duties of a second defendant are purely derivative of one in 
whose favor judgment has already been entered. Reconstruction Finance 
Corporation v. First Nat. Bank of Cody, 17 F.R.D. 397, 405 (D.Wyo. 
1955).

[¶16]   Appendix "A" to the Tidwells' 
appellate brief appears to be a contract between the Cheyenne Housing Authority 
and HOM, relative inter alia, to inspection of units for "the Section 8 Existing 
[Housing] Program[.]" By any stretch of the legal imagination, such an appendage 
remains much too little, submitted far too late and entirely improperly to serve 
as a cornerstone for the Tidwells' case. Gifford v. Casper Neon Sign Co., Inc., 
618 P.2d 547, 551 (Wyo. 1980). Were that contract properly before us, however, 
it could not facilitate a more favorable result for the Tidwells in the absence 
of duty upon the Cheyenne Housing Authority.

[¶17]   The Tidwells' implied covenant of 
ordinary care claim against HOM necessarily requires them to establish their 
status as third-party beneficiaries of the contract between HOM and the Cheyenne 
Housing Authority. We hold that third-party beneficiary claims against promisor 
HOM must, necessarily, be vulnerable to those defenses available to promisee 
Cheyenne Housing Authority as against the same claims. Farmers' State Bank of 
Worland v. Nicholson, 36 Wyo. 221, 226-27, 254 P. 134, 135 (1927). Insofar as 
the Cheyenne Housing Authority's defense to the Tidwells' claims has been the 
subject of a final and binding judgment, HOM may suffer no lesser fate at the 
hands of the Tidwells, at least upon any third-party beneficiary theory. 
Third-party beneficiaries depend upon a clear duty exacted from the promisor by 
the promisee in favor of the third party seeking relief. McNeill v. New York 
City Housing Authority, 719 F. Supp. 233, 249 (S.D.N.Y. 1989). When the promisee 
has been absolved of duty to the third party, the nexus between the promisor and 
the third party is irretrievably broken.

[¶18]   Assuming, arguendo, that the Cheyenne Housing 
Authority's lack of duty to the Tidwells did not obviate a duty to exercise 
ordinary care, as between HOM and the Tidwells, Brubaker remains far less than a 
foundation upon which the Tidwells might build a claim. The Brubaker holding is 
limited to unskillful or negligent construction as expressly contrasted with use 
and failure to inspect. Brubaker, 526 P.2d  at 57-59.

B. 
STATUTORY DUTIES

[¶19]   The Tidwells also claim that HOM 
owes them a duty because they are beneficiaries of Section 8 (42 U.S.C. § 1437f) 
housing assistance, administered by the Cheyenne Housing Authority for HUD. This 
theory, too, is made problematic by the district court's judgment finding that 
the Cheyenne Housing Authority owed no duty to the 
Tidwells.

[¶20]   Nonetheless, because HOM provided 
rental inspection services to the Cheyenne Housing Authority, the Tidwells 
assert a cause against HOM for failure to comply with regulations promulgated by 
HUD which resulted "in a duty by HOM, Inc., to provide safe, sanitary and decent 
housing for low income people."

[¶21]   Vindication of statutory 
entitlements may occur through declaratory judgments against the governmental 
agency charged with administering the statutes in question. See, e.g., Davidson 
v. Sherman, 848 P.2d 1341 (Wyo. 1993) and Wright v. City of Roanoke 
Redevelopment and Housing Authority, 479 U.S. 418, 107 S. Ct. 766, 93 L. Ed. 2d 781 
(1987). Such an action is inapposite here because, as the Tidwells correctly 
insist, HOM is not a governmental entity but an independent contractor doing 
business with a governmental entity. Therefore, although the Tidwells seek 
relief based upon statute, their cause of action against HOM is a "private" 
cause of action.

[¶22]   Private rights of action arising 
from statute may, generally, be pursued either where the statute creates such a 
private right or the claimant can establish his status as a third-party 
beneficiary of a contract made to fulfill a governmental obligation. Anthony Jon 
Waters, The Property in the Promise: A Study of the Third Party Beneficiary 
Rule, 98 Harv.L.Rev. 1109, 1173 (1985). However, even if statutory violations 
are demonstrated, a private cause of action may not lie in the face of 
congressional silence. Touche Ross & Co. v. Redington, 442 U.S. 560, 571, 99 S. Ct. 2479, 2486, 61 L. Ed. 2d 82 (1979); Cannon v. University of Chicago, 441 U.S. 677, 688, 99 S. Ct. 1946, 1953, 60 L. Ed. 2d 560 (1979). No private cause of 
action is claimed or can be discerned from 42 U.S.C. § 1437f. This leaves us on 
the thin ice of enforcing governmental obligations as third-party 
beneficiaries.

[¶23]   Failure to broach third-party 
beneficiary status before the district court, vis-a-vis the statute, should doom 
the Tidwells' efforts to raise it for the first time here, despite the parties' 
obsession with the topic in their briefs. Ford v. Starr Fireworks, Inc., 874 P.2d 230, 235 (Wyo. 1994). That obsession cannot gainsay the issue's 
unrecognized status before the district court, even in the context of arguments 
concerning the putative covenant of ordinary care. Suffice it here to say that 
the Tidwells' claims of statutory duty are stymied at the familiar threshold of 
the district court's binding judgment that the Cheyenne Housing Authority owed 
no duty to the Tidwells.

[¶24]   Duty upon the Cheyenne Housing 
Authority is a sine qua non for the 
Tidwells' efforts to impose a duty upon HOM, whether by common law, contract or 
statute. When the district court found no duty upon the Cheyenne Housing 
Authority, the Tidwells were foreclosed from asserting any duty upon 
HOM.

V. 
CONCLUSION

[¶25]   The district court found the 
Cheyenne Housing Authority to be without an enforceable duty to the Tidwells and 
that judgment was not appealed. A generous district court afforded the Tidwells 
a second bite of the jurisprudential apple by considering their suit against 
HOM. However, reversal of the district court's summary judgment in that second 
cause would be nothing less than sanctioning unwarranted collateral attack upon 
the first judgment. Travis v. Travis' Estate, 79 Wyo. 329, 335-38, 334 P.2d 508, 
510-11 (1959).

[¶26]   The judgment of the district court 
should be and hereby is affirmed.

FOOTNOTE

1 Although the judgment appealed here was 
entered in the same case where the Cheyenne Housing Authority had, earlier, 
obtained summary judgment, neither party designated any portion of those earlier 
proceedings for transmission to this court. We characterize the claims as the 
"same" by reference to the district court's Order Granting Summary Judgment to 
HOM, Inc.