Case Title: Lane Co., By and Through Lane v. Busch Development, Inc.

Citation: 

Docket Number: 5807

State: wyoming

Court: Wyoming Supreme Court

Date: 1983-04-22T00:00:00Z

Document:
Lane Co., By and Through Lane v. Busch Development, Inc.1983 WY 44662 P.2d 419Case Number: 5807Case Number: 5807Decided: 04/22/1983Supreme Court of Wyoming
THE LANE COMPANY, A 
WASHINGTON LIMITED PARTNERSHIP, BY AND THROUGH JOSEPH C. LANE, JR., ITS GENERAL 
PARTNER, APPELLANT (PLAINTIFF),

v.

BUSCH DEVELOPMENT, INC., 
A UTAH CORPORATION, APPELLEE (DEFENDANT). No. 5807

Appeal from the District 
Court, LaramieCounty, Paul T. Liamos, Jr., 
J.

F. Scott Boundy 
and G. Scott Greenburg of Shidler, McBroom, Gates & Baldwin, Seattle, Wash., 
and Ward A. White, of Guy, Williams, White & Argeris, Cheyenne, for appellant.

Reed L. 
Martineau and Mark A. Larsen of Snow, Christensen & Martineau, Salt Lake 
City, Utah, and Gary R. Scott of Hirst & Applegate, Cheyenne, for appellee.

Before ROONEY, C.J., and RAPER, THOMAS, ROSE and 
BROWN, JJ. 

BROWN, 
Justice.

[¶1.]     Appellant The Lane 
Company (Lane) filed suit against appellee Busch Development, Inc. (Busch) on a 
contract. Lane alleged that, because of an agreement between Lane and Busch, 
Busch owed amounts which Lane had paid for grading and utility work when it was 
constructing a LaBelle's store in a Cheyenne shopping center. Busch counterclaimed, 
alleging that the LaBelle's store encroached on Busch's property. The court 
granted a summary judgment for Lane on Busch's counterclaim. It also granted a 
summary judgment for Busch against Lane on Lane's complaint, which it 
appeals.

[¶2.]     We will 
affirm.

[¶3.]     The single issue is 
whether the granting of a summary judgment to Busch because of a previous suit 
between the parties was proper. The previous suit, Busch Development, Inc. v. City of 
Cheyenne, Wyo., 645 P.2d 65 (1982), involved a dispute 
over landscaping at the same shopping center which is involved in this suit. 
Busch's motion for summary judgment against Lane in this case alleged that 
Lane's action was barred because of the prior suit between the parties. Busch 
argues that the rule against splitting a cause of action applies in this suit. 
Lane argues that it did not improperly split its cause of action.1

[¶4.]     "A cause of action is 
the fact or combination of facts which gives rise to a suit." Duke v. Housen, Wyo., 
589 P.2d 334, 341 (1979), cert. denied, 444 U.S. 863, 100 S. Ct. 132, 62 L. Ed. 2d 86 (1979). The general rule against splitting a cause of action is that a single 
wrong gives rise to one cause of action for which only one suit may be 
maintained, however numerous the elements of damages resulting therefrom. 
Bienville Water Supply Company v. Mobile, 186 U.S. 212, 22 S. Ct. 820, 46 L. Ed. 1132 
(1902); and Brickel v. Chicago, Burlington and Quincy Railroad Co., 200 F. Supp. 240 (D.C.Wyo. 1961). A multiplicity of suits should not be allowed where 
justice can be done in one suit. Holly 
Sugar Corporation v. Fritzler, 42 Wyo. 446, 296 P. 206 (1931). The reason for 
the rule is that a party should not have to be subject to multiple suits over 
one transaction or occurrence, or over several related transactions or 
occurrences. The rule also provides for judicial economy. Gareeb v. Weinstein, 
161 N.J. Super. 1, 390 A.2d 706 (1978).

[¶5.]     No precise rule has 
been laid down for determining what makes a whole cause of action. Each case is 
decided on its particular facts.

"* * * A cause of action 
is a legal concept which has no separate existence in the natural order of 
things. It is what * * * the Legislature and the courts, say it is. It exists to 
satisfy the needs of plaintiffs for a means of redress, of defendants for a 
conceptual context within which to defend an accusation, and of the courts for a 
framework within which to administer justice.

* * * * * 
*

"In more recent times, 
causes of action have been delineated by reference to the transaction, 
occurrence or wrongful act from which the litigation arises. * * *" Retherford v. Halliburton Company, 
Okla., 572 P.2d 966, 968 (1978).

[¶6.]     This court examines a 
motion for summary judgment in the same light as the district court, using the 
same material and information as did the district court. Fegler v. Brodie, Wyo., 
574 P.2d 751 (1978). The burden is on the moving party to demonstrate clearly 
that there is no genuine issue of material fact. Dubus v. Dresser 
Industries, Wyo., 649 P.2d 198 (1982). Busch, then, had 
the burden of showing that there was no issue of material fact concerning 
whether Lane had improperly split a cause of action. In the previous suit, Busch 
had first agreed with the City of Cheyenne (City) to provide landscaping in a 
perimeter or berm area of the shopping center. Busch then entered into a sales 
agreement with Pacific Cascade Corporation, which assigned its interests to 
Lane. The City then required Lane to post a bond to cover landscaping costs for 
the berm or perimeter area before it would issue a certificate of occupancy for 
LaBelle's. Lane paid under protest and then sued Busch and the City. In that 
suit, this court affirmed the trial court's finding that Busch was responsible 
for certain landscaping at the shopping center.

[¶7.]     Busch argues that the 
first suit adjudicated a controversy over a single agreement between Busch and 
Lane, and that the second suit attempted to adjudicate a controversy under the 
same agreement. Lane claims that it instituted the first suit primarily for the 
benefit of the City to determine the City's right to receive payment for 
landscaping work. It says that the lower court's decision and this court's 
affirmance in the first case were based on an agreement that Busch had with the 
City and not on any contract between Lane and Busch.

[¶8.]     Busch met its burden of 
showing that there was no material question of fact that Lane had split its 
cause of action. The complaint from the first action together with Lane's 
pretrial conference memorandum, the evidence which Lane introduced, the trial 
court's findings of fact and conclusions of law, and this court's opinion in the 
first case, show that Lane was seeking relief from its agreement under protest 
with the City by proving that Lane had performed all of its landscaping 
obligations under the writings between Lane and Busch, and that any further 
landscaping, specifically for the berm area, was Busch's responsibility as a 
developer.

[¶9.]     The agreement between 
Busch and Lane consisted of a letter agreement, a real estate purchase and sale 
agreement with attached site plans, and a reciprocal easement agreement. 
Paragraph 7 of Lane's complaint in the first action specifically mentioned 
landscaping agreements under the reciprocal easement agreement, so that the 
complaint indicated that Lane was relying on the agreements between the parties 
to prove that Lane had not agreed with Busch to landscape the berm 
area.

"7. Under the August 22, 
1978 REA, Lane undertook to maintain such landscaping as would be installed by 
Busch. At no time has either PCC or Lane agreed to install all of said 
landscaping required by the Commission on said real property as 
aforesaid."

[¶10.]  In its pretrial conference memorandum for 
the first action, Lane also indicated that it was going to rely on testimony 
concerning the site plans which were attached to the real estate purchase and 
sale agreement.

"Cliff Barber * * * will 
testify regarding the transactions betweens [sic] the Pacific Cascade 
Corporation, The Lane Company and Busch Development, as well as Busch's obligations under the 
original and revised site plans." (Emphasis added.)

[¶11.]  At trial of the first case, Lane 
introduced the letter agreement, the real estate purchase and sale agreement and 
the reciprocal easement agreement to support its claim of rights and Busch's 
obligations. Finding of Fact No. 13 also shows that the trial court considered 
the writings between the parties to reach its ruling on Lane's landscaping 
obligations.

"* * * Exhibits B and C 
to the agreement [real property purchase and sale agreement] contain the site 
plan and the alternative site plan for the project. Both exhibits B and C 
provide:

"`Landscaping and 
planting for the "LaBelle's" project to be furnished and installed by Pacific 
Cascade Corporation.'"

Conclusion of 
Law No. 5 in the first case specifically ruled that Lane had fulfilled its 
landscaping obligations to Busch: "Lane has properly fulfilled its landscaping 
obligation to the City of Cheyenne, the Planning Commission, and Busch * 
* *." 

[¶12.]  As Busch points out, in the first suit 
Lane relied on paragraph 5 of the site plan to show that it was not obligated to 
Busch to perform any landscaping in the berm area. Lane in its second suit tried 
to enforce its interpretation of paragraphs 3 and 4 concerning grading and 
utility work of the same site plan to the same real property purchase and sale 
agreement.

[¶13.]  Busch also correctly points out that this 
court reviewed the trial court's interpretation of the writings between the 
parties concerning their landscaping obligations. We said in Busch Development, Inc. v. City of 
Cheyenne, supra, at 70, 71:

"As to a written 
agreement between Busch and Pacific [Lane's predecessor in interest], Busch 
argues that Pacific assumed the landscaping obligation for the berm area, and 
that the writings by the two parties conclusively demonstrate such an 
obligation. * * *

* * * * * 
*

"* * * The documents 
taken together do not support the argument that Pacific agreed to landscape both 
the parking site and the berm area. We agree with the trial judge that the 
contract was ambiguous, and we hold that a rational basis existed for the trial 
court's factual finding of the parties' intent concerning 
landscaping."

[¶14.]  Lane's argument that it instituted the 
first action primarily for the benefit of the City cannot be taken seriously. A 
contract between two parties has to show that the parties intended to benefit a 
third party. Wyoming Machinery Company v. 
United States Fidelity and 
Guaranty Company, Wyo., 614 P.2d 716 (1980). Busch's agreement 
with the City to landscape the berm area predated by four months Lane's attempt 
to obtain a certificate of occupancy. Busch Development, Inc. v. City of 
Cheyenne, supra, at 70. Busch's agreement with the City was not made so that 
Lane could obtain a certificate of occupancy.

[¶15.]  Lane says that Busch is making a 
"compulsory `counter-counter' claim" argument under Rule 13(a), Wyoming Rules of 
Civil Procedure. The rationale and test under the Federal Rules of Civil 
Procedure and the Wyoming Rules of Civil Procedure concerning compulsory 
counterclaims could be said to apply to this case. The philosophy that parties 
who are given the capacity to present their entire controversies should in fact 
do so is embodied in the Wyoming Rules of Civil Procedure, Rules 7, 8, and 13, 
which are patterned after similar Federal Rules of Civil Procedure. Rule 7(a), 
W.R.C.P., provides:

"(a) Pleadings. - There 
shall be a complaint and an answer; a reply to a counterclaim denominated as 
such; an answer to a cross-claim, if the answer contains a cross-claim; a 
third-party complaint, if a person who was not an original party is summoned 
under the provisions of Rule 14; and a third-party answer, if a third-party 
complaint is served. No other pleading shall be allowed, except that the court 
may order a reply to an answer or a third-party answer."

Rule 8(d), 
W.R.C.P., provides:

"(d) Effect of failure to 
deny. - Averments in a pleading to which a responsive pleading is required, 
other than those as to the amount of damage, are admitted when not denied in the 
responsive pleading. Averments in a pleading to which no responsive pleading is 
required or permitted shall be taken as denied or 
avoided."

Rule 13(a), 
W.R.C.P., provides:

"(a) Compulsory 
counterclaims. - A pleading shall state as a counterclaim any claim which at the 
time of serving the pleading the pleader has against any opposing party, if it 
arises out of the transaction or occurrence that is the subject matter of the 
opposing party's claim and does not require for its adjudication the presence of 
third parties of whom the court cannot acquire jurisdiction, except that such a 
claim need not be so stated if at the time the action was commenced the claim 
was the subject of another pending action."

Ordinarily, a 
claim which is a compulsory counterclaim under F.R.C.P. 13(a) or W.R.C.P. 13(a), 
but is not brought, is thereafter barred. Baker v. Gold Seal Liquors, Inc., 417 U.S. 467, 94 S. Ct. 2504, 41 L. Ed. 2d 243 (1974). The bar is not set out in the rule, but can arise from several 
different theories.

"F.R.C.P. 13(a) does not 
itself state that the penalty for failure to bring a compulsory counterclaim is 
a bar to later asserting that claim, and the bar arising out of F.R.C.P. 13(a) 
has been variously characterized, the courts relying on doctrines of res 
judicata, estoppel or waiver, or both res judicata and waiver. Moreover, courts 
are not always clear as to whether they are denying a party's claim on the basis 
of the policy of F.R.C.P. 13 or res judicata." Federal Procedure, L.Ed., § 
62:215, pp. 187-188 (1981).

[¶16.]  In the first case below, Busch filed a 
counterclaim based on a reciprocal easement agreement between the parties, which 
was part of the contract between the parties. Busch Development, Inc. v. City of 
Cheyenne, supra. Using the Rule 13(a), W.R.C.P., rationale, it is arguable 
that in its reply to Busch's counterclaim, Lane should have included its own 
counterclaim concerning the grading and utility work. Wright and Miller suggest 
that if the claim is one which would be compulsory for a defendant under 
F.R.C.P. 13(a), then a plaintiff is required to assert his own counterclaim in a 
reply to defendant's counterclaim.

"* * * If plaintiff has a 
claim arising from the same transaction as the one involved in the defendant's 
counterclaim - a claim that would constitute a compulsory counterclaim under 
Rule 13(a) - he must assert it in the reply or be barred from bringing a later 
action on it. * * *" Wright & Miller, Federal Practice and Procedure, Civil 
§ 1188, p. 26 (1969).

[¶17.]  Under either the splitting of a cause of 
action theory or under the rationale of Rule 13(a), W.R.C.P., Lane should have 
raised the issues of its grading and utility claims, unless there was some good 
reason for its failure to do so. Here, there is no indication in the record of 
the first case that Lane ever made a motion to insert a counterclaim in its 
reply to Busch's counterclaim, or that it ever attempted to amend its original 
complaint.

"There is considerable 
authority that it is proper to state a counterclaim in a reply to a counterclaim 
of the opposing party, one court pointing out that, although F.R.C.P. 7(a) does 
not specifically provide for a counterclaim in the reply, this Rule purports 
only to identify permissible pleadings by their generic names. Although it has 
been held that a counterclaim in a reply may be a permissive counterclaim, some 
courts indicate that only a compulsory counterclaim should be permitted in a 
reply, while other courts have advised treating a counterclaim in reply as an 
amendment to the complaint." Federal Procedure, L.Ed., § 62.13, pp. 37, 38 
(1981).

[¶18.]  Lane appears to argue at first that it 
attempted before the first trial to amend its complaint to include the grading 
and utilities work claims. It says that Busch objected to such a motion. There 
is an unexecuted affidavit included in the record of the second case, which 
writing was filed as an attachment to an affidavit executed by an attorney for 
Lane in the second case. The unexecuted affidavit is by Mr. Boundy, an attorney 
for Lane in the first suit. The unexecuted affidavit 
states:

"* * * In the course of 
trial preparation just prior to trial, we determined for the first time that 
Busch had not complied with an agreement to pay certain site costs for grading 
and utilities and for storm sewer connections, and sought to have the trial 
court make a ruling on this matter as well as other matters at issue. Busch, 
through its attorneys, objected to any amendment which would have allowed the 
court to consider that motion, and it was understood by both parties that The 
Lane Company/Pacific Cascade Corporation's claim for extra site costs would be 
the subject of a subsequent lawsuit."

However, Lane's 
reply brief states "no motion to amend was made by either party." 

[¶19.]  Lane argues that Mr. Boundy's affidavit 
is uncontroverted and that it thereby creates a material issue of fact as to the 
understanding of the parties to determine the grading and utility work claims at 
a later date. If that were the case, then it would not necessarily be barred 
from asserting its action under the theory that it had improperly split its 
cause of action.

"The rule against 
splitting a cause of action is primarily for the benefit of the defendant, to 
protect him against a multiplicity of suits, and he may agree to a splitting of 
the cause of action * * * and by his conduct he may be held to have waived his 
right to insist upon the rule, and a waiver will be presumed unless timely and 
proper objection is made. * * *" 1 Am.Jur.2d, Actions § 132, p. 651 
(1962).

[¶20.]  Restatement of Judgments (Second) § 26, 
p. 233 (1982), now provides:

"(1) When any of the 
following circumstances exists, the general rule of § 24 [against splitting a 
cause of action] does not apply to extinguish the claim, and part or all of the 
claim subsists as a possible basis for a second action by the plaintiff against 
the defendant:

"(a) The parties have 
agreed in terms or in effect that the plaintiff may split his claim or the 
defendant has acquiesced therein; or

"(b) The court in the 
first action has expressly reserved the plaintiff's right to maintain the second 
action * * *."

[¶21.]  Comments to Restatement of Judgments, § 
26, at pp. 234-235, provide:

"a. Consent to or acquiescence in splitting. 
A main purpose of the general rule stated in § 24 [against splitting a cause of 
action], is to protect the defendant from being harassed by repetitive actions 
based on the same claim. The rule is thus not applicable where the defendant 
consents, in express words or otherwise, to the splitting of the 
claim.

"The parties to a pending 
action may agree that some part of the claim shall be withdrawn from the action 
with the understanding that the plaintiff shall not be precluded from 
subsequently maintaining an action based upon it. The agreement will normally be 
given effect. Or there may be an effective agreement, before an action is 
commenced, to litigate a part of a claim in that action but to reserve the rest 
of the claim for another action. * * *"

"d. Erroneous decision that formal barrier 
exists. Where the court determines that the plaintiff cannot enforce a given 
claim or a party of it in that action but must enforce it, if at all, in another 
action, the judgment does not preclude the plaintiff from maintaining the other 
action even though it appears that the determination made in the first action 
was erroneous. The determination is binding between the parties under the 
principle of direct estoppel. * * * It is immaterial that no appeal was taken 
from the ruling of the court in the first action."

[¶22.]  In Erickson v. United States, 159 Ct.Cl. 
202, 309 F.2d 760 (1962), a tax court refused on jurisdictional grounds to 
decide whether interest should have been assessed against a taxpayer. The 
appellate court held that although the trial court might have been wrong in 
deciding it had no jurisdiction to hear the issue, the former suit would not bar 
the government from defending a suit for a refund of the interest. In Carr v. Preslar, 73 S.D. 610, 47 N.W.2d 497 (1951), the plaintiff had brought an action to cancel the mineral deed to 
defendants. Defendants sought permission to amend their answer to allege 
mistake, but that plaintiff should execute and deliver a royalty deed to 
defendants conveying the five percent royalty. Permission to make the amendment 
was denied and plaintiff obtained judgment on the pleadings. The appellate court 
held that the defendants were not precluded from bringing a subsequent action to 
establish their alleged five percent royalty.

[¶23.]  The same approach holds true for the 
dictates of Rule 13(a), W.R.C.P. In Bailey v. State, 57 Haw. 144, 552 P.2d 365 (1976), the lessors of condemned property brought an action to recover costs 
for the design and construction of a retaining wall. They contended that the 
costs were consequential damages of the taking. The state had argued that the 
claim was in the nature of a compulsory counterclaim, and should have been pled 
during the condemnation action. The Hawaii Supreme Court ruled that the claim 
was a compulsory counterclaim. However, the appellate court noted that the trial 
court erroneously believed that the issue was not a compulsory counterclaim. The 
trial court excluded evidence about the retaining wall. The state argued that 
the lessors should have appealed the trial court's exclusion of the evidence 
concerning the wall in the initial condemnation action. The Hawaii Supreme Court 
ruled that a strict application of the doctrine of res judicata to omitted 
counterclaims could lead to harsh results when a defendant has been precluded 
from asserting a compulsory counterclaim because of procedural developments in a 
case.

"We think that the 
absolute bar imposed by res judicata goes farther than necessary to effectuate 
the purposes of Rule 13(a). * * * We agree with the Minnesota Supreme Court that 
Rule 13(a) does not raise the absolute bar of res judicata but raises `a bar 
created by rule * * * which logically is in the nature of an estoppel arising from the culpable 
conduct of a litigant in failing to assert a proper counterclaim.' [Citation.]" 
Bailey v. State, supra, 552 P.2d  at 368.

The Hawaii court then held 
that estoppel would not apply to the second action since the omission of the 
compulsory counterclaim in the first action resulted from the trial court's 
exclusion of the evidence.

[¶24.]  This court has stated that the policy 
against piecemeal determination of rights should not be unduly burdensome. 
Hurst v. Davis, Wyo., 
386 P.2d 943 (1963). We might have been willing to accept appellant's argument 
that the parties had agreed to postpone part of the litigation until later, or 
that a material question of fact at least existed as to that issue, except that 
a signed, dated, and notarized copy of Mr. Boundy's affidavit was never filed 
with the trial court. Rule 56(e), W.R.C.P., 
provides:

"(e) Form of affidavits; 
further testimony; defense required. - Supporting and opposing affidavits shall 
be made on personal knowledge, shall set forth such facts as would be admissible 
in evidence, and shall show affirmatively that the affiant is competent to 
testify to the matters stated therein. Sworn or certified copies of all papers or 
parts thereof referred to in an affidavit shall be attached thereto or served 
therewith. * * *" (Emphasis added.)

[¶25.]  Mr. Boundy's unsworn and unexecuted 
affidavit was not sufficient on its own or as an attachment to the affidavit of 
Lane's attorney in the second case. The material presented to the trial court as 
a basis for summary judgment should be as carefully tailored and professionally 
correct as any evidence which is admissible to the court at the time of trial. 
Newton v. Misner, Wyo., 
423 P.2d 648 (1967). Mr. Boundy's unsworn testimony would not have been 
admissible at a trial on the issue of whether the parties had agreed to allow 
Lane to split its cause of action. Consequently, there is no indication in the 
record of either the first or the second suit that Lane ever made a motion to 
amend its complaint or to include a counterclaim in its reply to Busch's 
counterclaim. There is also no evidence that the parties reached any express or 
implied agreement to allow Lane to pursue the grading and utilities claims at a 
later time. The trial court correctly granted summary judgment to 
Busch.

[¶26.]  Affirmed.

FOOTNOTES

1 The parties refer to 
splitting a cause of action. Parties no longer have to plead a cause of action; 
they now plead a claim for relief. However, for the purpose of this appeal only, 
we will treat the two terms as synonomous. This opinion will cite cases 
discussing splitting a cause of action and cases discussing the rule concerning 
counterclaims and claims for relief. The rationale in both types of cases is the 
same, as is the question whether a party is barred from raising an issue because 
it should have been previously adjudicated. The difference between a cause of 
action and a claim for relief becomes more important when one is addressing the 
adequacy of the pleadings and whether they should be dismissed.