Case Title: Copeland Sand & Gravel v. Ins. Co. of N. Am.

Citation: 288 Or. 325, 607 P.2d 718

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1980-01-16T00:00:00Z

Document:
607 P.2d 718 (1980)
288 Or. 325
COPELAND SAND and GRAVEL, Inc., Appellant-Respondent,
v.
INSURANCE COMPANY OF NORTH AMERICA, Respondent-Petitioner, Tobin, Crawford & Mikolavich, Inc., Respondent.
No. 75-414-L; CA 11238; SC 26403.

Supreme Court of Oregon.
Argued and Submitted November 8, 1979.
Decided January 16, 1980.
Benjamin E. Freudenberg, Grants Pass, argued the cause for respondent. With him on the briefs was Balderree, Killoran & Nelson, Grants Pass.
Hugh B. Collins, Medford, argued the cause for petitioner. With him on the brief was Collins, Velure & Heysell, Medford.
*719 Before DENECKE, C.J., and HOLMAN, TONGUE, HOWELL, LENT and PETERSON, JJ.
PETERSON, Justice.
This action at law for unpaid construction materials and supplies was tried to the court, without a jury. The trial court rendered an oral opinion from the bench at the end of the trial, thereafter made a general finding for both defendants, and entered judgment thereon. On the plaintiff's appeal, the Court of Appeals affirmed as to the defendant Tobin, Crawford & Mikolavich, Inc. (TCM), reversed as to defendant Insurance Company of North America (INA), and ordered that judgment be entered in plaintiff's favor against defendant INA. INA appealed and we reverse.
Because the plaintiff claims that there is no evidence to support the trial court's judgment for defendant INA, we must look at the evidence in the light most favorable to INA.
In September, 1973, the City of Rogue River contracted with R & W Construction Company (R & W) for the construction of a sewer system. Defendant INA was surety on R & W's performance and payment bond. In mid-1974, R & W ran out of capital to complete the job. Upon being notified of R & W's difficulties with the construction project, INA engaged defendant Tobin, Crawford & Mikolavich, Inc., a firm of local insurance adjusters, to assess the situation for INA.
TCM found that one of the key problems was that the two partners in R & W, Carlton and DeBoer, "could not communicate with the City engineer. They would immediately get into an argument as soon as someone spoke."
After TCM reported to INA, INA did the following:
1. INA obtained an assignment from R & W of the progress payments then due and to become due from Rogue River. (Rogue River did not release R & W from its contractual obligations nor agree to substitute INA as general contractor.)
2. On June 28, 1974, INA contracted with a Medford firm, Tru-Mix Construction Co., to "provide supervision and administration" for INA in the completion of the contract. The written contract contained this recital:
The contract also gave Tru-Mix the right to hire and fire any personnel on the job, and to purchase needed materials and rent or buy needed equipment. Tru-Mix administered the job through August, 1974. There is no evidence that the plaintiff was aware of the terms of the INA/Tru-Mix agreement during the summer and fall of 1974.
3. INA employed TCM to perform various services, including the transmittal of payments to subcontractors and suppliers. TCM took its orders from an INA representative in San Francisco and from Hugh Collins, INA's Medford attorney.
TCM forthwith sent all R & W creditors a form letter asking them to sign and return "the enclosed form of assignment with your invoice for labor and materials through June 30, 1974." The letter stated that INA needed the assignments "to enable it to substantiate to the City its upcoming report of payments." The plaintiff, having previously furnished materials to R & W, received such a letter, filled out the assignment, and was paid for work done prior to July, 1974.
The plaintiff billed "INA/Tru-Mix Construction Company" for amounts due in July and August, 1974, and was paid. In August, 1974, the INA/Tru-Mix agreement was terminated by mutual consent. Thereafter, the on-site project management was provided by Mr. DeBoer, one of the R & W partners. Because of the importance of the testimony concerning who was running the job after August 31, 1974, we quote portions of the transcript.
Mr. Mikolavich, one of the principals of TCM, testified:
Mikolavich testified that after September 1, 1974, the procedure went as follows:
Mr. Copeland, the plaintiff's president, testified that prior to September 1, 1974, Mikolavich told him that INA was "stepping in to finish the job" and to bill the account thereafter as "INA/R & W Construction." Mikolavich denied all such conversations.
Neither INA nor Mikolavich ever ordered any materials or supplies. After September 1, 1974, the materials and supplies were ordered by "the contractor," according to Mikolavich. Payments to subcontractors, suppliers and workers was by check signed by Mikolavich and DeBoer. After September 1, 1974, federal quarterly payroll tax returns were filed in R & W's name.
The plaintiff's complaint contained two claims,[1] one for materials, labor and services provided by the plaintiff, and one for materials, labor, services and equipment rental provided by Copeland Paving, Inc., and assigned to plaintiff for collection. Two theories of recovery were alleged as to each claim. One theory was for materials and services provided at "defendants' special instance and request." The second theory of recovery was in the nature of an estoppel. Plaintiff alleged that INA and TCM made payments on the Copeland bills, that neither INA nor TCM ever told the plaintiff that they were not liable for present or future orders, that plaintiff and plaintiff's assignor would not have furnished materials or services to the job had they been notified that neither INA nor TCM was liable on the bills, and that INA and TCM should be estopped from denying *721 liability for materials and supplies delivered to the job site.[2]
In actions at law, if the trial court's findings of fact are supported by any evidence, the appellate court is powerless to overturn the finding or to reverse a judgment entered on such finding.[3]
We believe that there is evidence to support the trial court's finding. Even though we might have found otherwise, were we sitting as the trier of fact, we are powerless to change the result. The Court of Appeals was mindful of this limitation. We quote from the majority opinion:
The Court of Appeals concluded:
The Court of Appeals based its conclusion upon a rule of law that a surety, by assuming the principal's role in the actual performance of the principal's contract "* * * becomes responsible for performance of the principal contract and for all obligations incurred in connection with performance, notwithstanding the limits of liability in the bond.[4] However correct that rule may be, the record does not show, as a matter of law, that INA assumed the performance of R & W's contract.
We agree with the analysis of Chief Judge Schwab, dissenting:
Beyond the analysis made by Chief Judge Schwab, the testimony relative to the dealings between the plaintiff and TCM is in marked conflict. There is evidence from which the trier of fact could have found (as did the trial judge), that although the surety was taking an active role in order to protect itself, the supplier, after September 1, 1974, was still dealing with R & W, not with INA or TCM.
Reversed.
[1]  A third claim for $336 for money had and received is apparently not involved in this appeal, for neither party referred to it, other than to say that "no record was made at trial" regarding this claim.
[2]  Plaintiff makes no claim on the bond itself. The parties stipulated that the amount of the bond "has been exhausted." Both of the plaintiff's theories of recovery are based upon alleged conduct of INA and TCM.
[3]  Article VII, section 3, of the Oregon Constitution provides:

"In actions at law, where the value in controversy shall exceed $200, the right of trial by jury shall be preserved, and no fact tried by a jury shall be otherwise re-examined in any court of this state, unless the court can affirmatively say there is no evidence to support the verdict. * * *"
The findings of fact of the trial court sitting as the trier of fact have the same legal effect as a jury verdict. Troutman v. Erlandson, 287 Or. 187, 197 n. 8, 598 P.2d 1211 (1979); Saga Enterprises, Inc. v. Coldwell, Banker and Co., 287 Or. 169, 180, 598 P.2d 285 (1979); Hendrix v. McKee, 281 Or. 123, 125-126, 575 P.2d 134 (1978); ORS 17.435.
[4]  40 Or. App. at 834-835, 596 P.2d  at 625. The Court of Appeals cited Ausplund v. Aetna Indemnity Co., 47 Or. 10, 81 P. 577, 82 P. 12 (1905); Suetter v. Cornwall et al., 102 Or. 220, 201 P. 1072 (1921); Caron v. Andrew, 133 Cal. App. 2d 402, 284 P.2d 544 (1955). We took review of this case because of its potential significance in such a context, but we need not otherwise discuss the principle in view of our disposition of the cause.