Title: Richardson Associates v. Lincoln-Devore, Inc.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Richardson Associates v. Lincoln-Devore, Inc.1991 WY 15806 P.2d 790Case Number: 88-238Decided: 02/11/1991Supreme Court of Wyoming

RICHARDSON ASSOCIATES 
and E.W. Allen & Associates, Inc., 

 

 
Appellants 
(Defendants and Third-Party Plaintiffs),
 
 
v.
 
 
LINCOLN-DEVORE, 
INC., a Colorado corporation, 
 
 
Appellee 
(Defendants and Third-Party Defendants).
 
 
Appeal from 
the DistrictCourtofSweetwaterCounty, Kenneth G. Hamm, 
J.
 
 
Dennis W. 
Lancaster of Phillips, Lancaster and Thomas, P.C., Evanston and Craig C. Coburn, 
Salt Lake City, for 
appellants.
 
 
Richard G. 
Miller, Casper and Edwin Strand, Colorado Springs, Colo., for appellee.
 
 
Before 
CARDINE, C.J.,* and THOMAS, URBIGKIT, MACY and GOLDEN, 
JJ.
 
 

* Chief 
Justice at time of oral argument. 

 
 

URBIGKIT, Chief 
Justice.

 
 

[¶1]  Appellants E.W. Allen & Associates, 
Inc. (Mechanical Engineer) and Richardson Associates (Architect) appeal to this 
court after the district court dismissed their three complaints against appellee 
Lincoln-DeVore, Inc. (Soil Lab). Issues tested by this pretrial disposition of 
the comprehensive defective library building construction litigation include 
governmental immunity, statute of limitations, discovery, real party in 
interest, assignment, third-party beneficiary, indemnity, contribution, 
principal party settlement, plus motions to dismiss from which "summary 
judgment" was granted and all claims and causes of action dismissed.1

 
 

 
 
 

[¶2]  Architect was an original defendant and 
Mechanical Engineer was a third-party plaintiff in a complex civil action 
resulting from the faulty construction of the Sweetwater County, Wyoming library 
building which, soon after completion, started sinking into the ground and 
cracking up to the point of near non-habitability. In the latter stages of the 
litigation, Architect and Mechanical Engineer filed a Second Amended Complaint 
(Assigned Claim) "pursuant to an assignment to them from the Library [the 
original plaintiff] of any and all of the Library's right, title and interest in 
and to any claim(s) it has or may have against Lincoln-DeVore for [soil testing] 
services rendered by [Lincoln-DeVore]." The dismissal of that previously 
non-pleaded Assigned Claim became Architect's and Mechanical Engineer's first 
issue. This is the Assigned Claim group of causes of action where Architect and 
Mechanical Engineer sued Soil Lab on a contract breach claim obtained by 
assignment from Owner after Architect and Mechanical Engineer had settled with 
Owner for their own contractual liabilities resulting from the defective library 
building construction.2

 
 

 
 
 
[¶3]  Architect and Mechanical Engineer had 
each earlier filed a third-party complaint (First Third-Party Claims) and later 
an amended third-party complaint (Amended Third-Party Claims) against Soil Lab 
based on the allegation of the breach by Soil Lab of its contract with the Owner 
and contention that the breach in faulty workmanship had resulted in damage to 
Architect and Mechanical Engineer by getting them sued by the Owner. The 
dismissal of the First Third-Party Claim becomes Architect's and Mechanical 
Engineer's second issue which was indemnity-contribution in nature. The third 
group of complaints in the Amended Third-Party Claim alleged litigants to be 
intended beneficiaries within the contracts for work done separately by Soil Lab 
for both Owner and Contractor.
 
 
[¶4]  We affirm the district court dismissal 
of all stated causes of action.
 
 

I.                     
ISSUES

 
 
[¶5]  The first issue raised by Architect and 
Mechanical Engineer is "[w]hether the District Court erred in granting the 
dismissal of Appellants' Second Amended Complaint [assigned claim] against 
Appellee." 
 
 
[¶6]  The particular arguments advanced in 
support of this issue are:
 
 
I. The 
assignment of claims executed between the Library Board and Appellants is valid 
under Wyoming 
law and Appellants have properly asserted in the Second Amendment Complaint the 
claims of the Library Board pursuant to a lawful assignment from the Library 
Board to Appellants.
 
 
II. The 
Library Board's power to assign is not limited under Wyoming Statute § 18-7-104 
(1977 as amended).
 
 
III. 
Appellants have properly designated the parties which can be named as Plaintiffs 
in the Second Amended Complaint, in compliance with the express language of Rule 
25 of the Wyoming Rules of Civil Procedure, and therefore the Second Amended 
Complaint has been properly filed in accordance with the Wyoming Rules of Civil 
Procedure.
 
 
IV. 
Appellee's arguments challenging the validity of the service of process on 
Appellee and the inability of Appellants to assert their claims presented in the 
Second Amended Complaint, are groundless and do not support the dismissal order 
of the District Court.
 
 
V. The 
Statute of Limitations is not a bar to this action as the Library Board is a 
governmental entity and therefore not subject to the defense of statutes of 
limitations.
 
 
VI. Even if 
the Library Board is subject to the statute of limitations claim, the relevant 
limitation period has not yet expired.
 
 
We resolve 
all of these arguments on a statute of limitations application.
 
 
[¶7]  The second issue raised by Architect and 
Mechanical Engineer is "[w]hether the District Court erred in granting the 
dismissal of Appellants' Amended Third-Party Complaint against Appellee 
[contribution-indemnity and third-party beneficiary actions]."
 
 
[¶8]  The particular arguments advanced in 
support of this issue are:
 
 
I. 
Appellants' Amendment to their Amended Third-Party Complaint, although not filed 
in strict compliance with Rule 15(a) of the Wyoming Rules of Civil Procedure, 
should not be barred as it is a well-established view that permission to amend 
should be freely granted and amendments are favored under the law [third party 
beneficiary claim].
 
 
II. The 
Settlement Agreement entered into and subsequent Order of Dismissal, expressly 
dismissing all of the litigants' claims except for those claims pending against 
Appellee, including: (1) Appellants' third-party complaints and claims against 
Appellee, and (2) The claims assigned to Appellants by the Library Board against 
Lincoln-DeVore in no way resulted in the deprivation and extinction of 
Appellants' claims asserted in Appellants' Amended Third-Party 
Complaint.
 
 
III. 
Appellants are entitled to recover contribution and/or indemnity under 
applicable Wyoming statutory law or pursuant to common law principles, and 
furthermore the acceptance of the assignment of claims assigned by the Library 
Board to Appellants, did not result in Appellants surrendering any direct claims 
or causes of action that they personally had or may have directly against 
Appellee [contribution-indemnity issue].
 
 
[¶9]  The claims were resolved by the 
dispositive district court orders from which the present appeal is 
taken:
 
 
1. Strict 
indemnity - Architect's claim against Soil Lab.
 
 
2. Strict 
indemnity - Mechanical Engineer's claim against Soil Lab.
 
 
3. 
Contribution - Architect's claim against Soil Lab.
 
 
4. 
Contribution - Mechanical Engineer's claim against Soil Lab.
 
 
5. Implied 
indemnity - Architect's claim against Soil Lab.
 
 
6. Implied 
indemnity - Mechanical Engineer's claim against Soil Lab.
 
 
7. 
Third-party beneficiary - Architect's claim against Soil Lab.
 
 
(a) based 
on work done for Owner; and
 
 
(b) based 
on work done for Contractor.
 
 
8. 
Third-party beneficiary - Mechanical Engineer's claim against Soil 
Lab.
 
 
(a) based 
on work done for Owner; and 
 
 
(b) based 
on work done for Contractor.
 
 
9. Claim 
founded on the contractual relationship between Owner and Soil Lab with 
contended failure of performance, which claim was then assigned to Architect and 
Mechanical Engineer as part of the settlement by Contractor, Owner, Architect 
and Mechanical Engineer. This claim, as phrased, is not the amount paid in 
settlement to Owner since totalled in terms of the maximum damage for which the 
Library Trustees might have secured recovery if all of its claims had been paid 
instead of the discounted settlement.
 
 
[¶10]  The answers to the questions of "who 
became the real party in interest" and "did a statute of limitations run" are 
dispositive of Architect's and Mechanical Engineer's assigned claim. The answers 
to the questions regarding the application of third-party beneficiary and 
indemnity or contribution within the facts presented are dispositive of 
Architect's and Mechanical Engineer's first and amended third-party 
claims.
 
 

II.                   
FACTUAL AND 
PLEADING BACKGROUND

 
 
[¶11]  Library Trustees contracted with Soil 
Lab3 to investigate the soil for a site 
upon which the Library Trustees planned to build a library. Owner later 
contracted with Architect4 to provide architectural and 
construction administration services and Contractor5 to construct the facility. 
Architect contracted with Mechanical Engineer to perform design and planning 
services as its subcontractor.
 
 
[¶12]  The library site had once been a 
cemetery which had been moved, for the most part, in the 1920's. During 
construction, the workers uncovered eight or nine unmoved graves. No sooner had 
the library been completed than the Library Trustees found the building haunted 
with structural problems. First, the front of the library began to crack. After 
repairs were completed, the bricks along the front wall began pulling away from 
roof beams. The library began to sink into the ground and disintegrate to the 
point of non-habitability.6 Owner filed suit against Architect 
and Contractor in 1985.
 
 
[¶13]  Creation of complex pleadings 
centralized the litigation activities in which Contractor counterclaimed against 
Owner; Architect cross-claimed against Contractor; Owner amended the original 
complaint to also sue Mechanical Engineer; Mechanical Engineer counterclaimed 
against Owner, cross-claimed against Contractor and third-party complained 
against Soil Lab; Architect filed a third-party complaint against Soil Lab, 
cross-claimed against Contractor, and joined TransAmerica Insurance Company as a 
cross-claim defendant; Soil Lab counterclaimed against Mechanical Engineer and 
Architect; Architect cross-claimed against Mechanical Engineer; Mechanical 
Engineer cross-claimed against Architect; Architect amended its third-party 
complaint against Soil Lab; Mechanical Engineer amended its third-party 
complaint against Soil Lab; and Architect and Mechanical Engineer joined to file 
a second amended complaint against Soil Lab by arguing they acquired the right 
because it had been assigned by Library Trustees to them; and Soil Lab 
cross-claimed against Owner and cross-claimed against Contractor.
 
 
[¶14]  Linking these claims, amended claims, 
counterclaims, cross-claims and third-party claims were motions to dismiss and 
motions for summary judgment. Contractor moved to dismiss the cross-claim of 
Architect; Architect moved to dismiss Owner's suit; Mechanical Engineer moved to 
dismiss the cross-claim brought by Contractor; Contractor moved to dismiss the 
cross-claim of Mechanical Engineer; TransAmerica Insurance Company moved to 
dismiss the cross-claim by Architect; Mechanical Engineer moved for summary 
judgment of the fourth claim for relief made by Owner which alleged Owner was an 
intended third-party beneficiary of the contract between Architect and 
Mechanical Engineer; Soil Lab moved to dismiss the second amended complaint by 
Architect and Mechanical Engineer; and Contractor moved to dismiss or have 
summary judgment upon Soil Lab's cross-claim. By stipulation, the district court 
judge dismissed with prejudice Owner's complaint against Architect, Contractor 
and Mechanical Engineer; dismissed with prejudice the counterclaims by 
Architect, Contractor and Mechanical Engineer against Owner; and dismissed with 
prejudice the cross-claims between Architect, Contractor and Mechanical 
Engineer. From there, Architect and Mechanical Engineer moved to dismiss or have 
summary judgment adverse to Soil Lab's cross-claim against Owner. Finally, Soil 
Lab moved to dismiss the amended third-party complaint against it by Architect 
and Mechanical Engineer.
 
 
[¶15]  The dismissal of the assigned claim 
filed by Architect and Mechanical Engineer against Soil Lab and the dismissal of 
the first and amended third-party claims by Architect and Mechanical Engineer 
against Soil Lab form the basis of the appeal by Architect and Mechanical 
Engineer. An appeal was filed and then not pursued by Soil Lab from dismissal of 
its defensive cross-claims which turned into third-party complaints against 
Owner and Contractor.
 
 
[¶16]  The first pleadings to involve Soil Lab 
were third-party complaints initiated by Architect and Mechanical Engineer by 
assertions that Soil Lab, in contracting with Owner and/or Contractor, assumed 
certain obligations for performance which required "due skill and care." It was 
then alleged that the contracting duty was breached in various respects - 
Architect, having relied on the accuracy of the work, stands entitled to 
contribution and/or indemnity for amounts proportional to Owner's damage caused 
by Soil Lab. An additional claim was stated for "implied indemnity" by 
contention that Architect's liability was solely caused by the negligence of 
Soil Lab. Next stated was a "comparative indemnity" claim that as a result of 
the negligence of Soil Lab, Architect had been damaged [in liability to Owner?] 
for which amount recovery was prayed. Mechanical Engineer's third-party claim 
was essentially the same as Architect's except it did not include the 
comparative indemnity.
 
 
[¶17]  After the settlement among Owner, 
Contractor, Architect and Mechanical Engineer, the litigation becomes more 
attenuated and activated as partly based on the assignment and covenant not to 
sue settlement documents. Architect and Mechanical Engineer, now first joined by 
representation of one law firm and no longer standing as litigative contestants, 
filed a motion for leave to file an amended complaint in the name of the Owner 
to state a claim against Soil Lab. By now, it has been more than ten years after 
the contractual services were performed. Authority to amend was granted in March 
1988, about two and one-half years after the original complaint was filed. The 
major thrust of the new litigation propelled the assigned claim as an amendment 
to the complaint originally filed by Owner against Contractor and Architect, and 
introduced for its purposes both a new claim and a new defendant derived from 
the contractual relationship between Owner and Soil Lab claiming contractual 
damages in variant improper workmanship aspects and charging improper advice by 
Soil Lab to both Owner and Contractor.
 
 
[¶18]  Then Architect and Mechanical Engineer, 
without leave of the district court, filed a new claim within their original 
third-party complaint alleging third-party beneficiary liability of Soil Lab to 
Architect and Mechanical Engineer as a direct right proceeding. We then have the 
theory of third-party beneficiary added to the litigation (provided by 
unapproved and untimely amendment). The pleading presents two claims: one 
relating to work done by Soil Lab for Owner before construction started and one 
relating to later work done for Contractor during construction. 
 
 

[¶19]  Responding to the 1988 barrage, Soil Lab 
answered Architect, Mechanical Engineer, and Owner assigned claim by a W.R.C.P. 
12(b)(6) motion to dismiss attacking the assignment and asserting a defense of 
statute of limitations. It similarly answered the amended third-party claims by 
denial and affirmative defense of the statute of limitations and failure to 
state a claim.7

 
 

 
 
 
[¶20]  Complexities do not end here since the 
initial response of Soil Lab to the third-party complaint which was filed in 
1987 stated a general denial, seven affirmative defenses, and a counterclaim. 
What that meant - when the initial pleading was amended a year later without 
approval of the district court by addition of a separate claim and not by 
restatement with the pleading then followed by an answer which did not 
procedurally challenge the amendment - is not particularly clarified by the 
record. A month or so after filing the answer, the procedural challenge to the 
amendment based on the lack of district court approval followed.
 
 
[¶21]  Architect and Mechanical Engineer then 
proceeded as injured parties to claim damages by virtue of obligations they 
incurred to Owner for which repayment they were asserting was based on strict 
indemnity, implied indemnity contribution and third-party beneficiary. They also 
asserted a claim, not for whatever their damages may have been or losses 
sustained, but rather for rights which they had acquired by assignment from 
Owner as Owner's potential contractual causes of action against Soil Lab. In 
accord with the second theory, the claim for recovery by Architect and 
Mechanical Engineer was not what had been paid to settle - $350,000 of which 
apparently most, but not all, had been paid by them - but the original total 
claim by Owner of approximately $494,000 which had been compromised in 
settlement to the $350,000 total.
 
 
[¶22]  In summary, we have Architect and its 
agent asserting claims against Soil Lab arising from the 1977 report which was 
ordered and used by Library Trustees. The claims are grounded in "indemnity and 
contribution," "third-party beneficiary," and "assignment." All of this 
continues after the Library Trustees settled with the general Contractor, 
Architect and Mechanical Engineer by a "release," assignment and covenant not to 
execute.8 The district court granted 
dismissal with prejudice to every claim following recitation in a simple 
decision letter, which stated:
 
 
Gentlemen:
 
 
I have 
examined the file and read your briefs in support of your motions for summary 
judgment and motion to dismiss.
 
 
I am 
inclined to agree with all of you for the reasons set forth in your respective 
briefs, and see no need for a protracted discussion.
 
 
Accordingly, 
your motions are all granted. Counsel will please prepare the necessary 
documents, send copies to opposing counsel and the originals to me for 
signature.
 
 
By The 
Court,
 
 
/s/ * * 
*
 
 
District 
Judge
 
 
III. 
ASSIGNED CLAIMS - SECOND AMENDED COMPLAINT
 
 
[¶23]  This new proceeding, by assignment from 
Owner, was introduced into the litigation after Architect and Mechanical 
Engineer settled with everyone except Soil Lab by amendment then to pursue 
whatever claim Owner might have presented, but never did, against Soil Lab. 
Disposition of this issue requires that we address the real party in interest 
and if the statute of limitations forecloses proceedings on the assigned claim. 
Questioned is the effect of the Library Trustees' assignment of their potential 
claim to Architect and Mechanical Engineer as the basis for allowance of the 
further proceeding involving that newly introduced subject into the pending 
lawsuit.
 
 
A. Real 
Party in Interest
 
 
[¶24]  Architect and Mechanical Engineer, first 
by leave to amend and then by filed amendment in the name of the Library 
Trustees, offered the assigned claim amendment against Soil Lab on the basis of 
their acquisition of the interest of Owner which was postured in the lawsuit to 
be a continued proceeding in the name of the Library Trustees under the control 
of the assignees. The difficulty with Architect's and Mechanical Engineer's 
thesis is application of case law involving an ongoing lawsuit to be transferred 
to what is essentially a completely new proceeding which involves a party who 
was not in the original lawsuit. Furthermore, we need not comprehensively review 
the interrelationship between W.R.C.P. 17 and 25, since the only substance 
presented here for our decision in the real party in interest question is 
whether the present litigants are the Library Trustees or Architect and 
Mechanical Engineer, who are private parties, to determine whether a statute of 
limitations defense is available. It does not matter whether this new 
litigation could have been pursued in a separate lawsuit or by actual 
interjection of the claim through the amendment in the remaining lawsuit which 
was underway between themselves and Soil Lab. The issue is preclusion by 
expiration of some statute of limitation. Annotation, Change in Party After 
Statute of Limitations Has Run, 8 A.L.R.2d 6 (1949).
 
 
[¶25]  First inquiry is the existence of a real 
party in interest status in order to institute a lawsuit. Wyoming Wool Marketing Ass'n v. Urruty, 394 P.2d 905 (Wyo. 1964); Gardner v. 
Walker, 373 P.2d 598 (Wyo. 1962); Weber v. City of Cheyenne, 55 Wyo. 202, 97 P.2d 667 (1940). This 
argument relates to the next contention that no applicable statute of 
limitations could run against the assignor because of governmental immunity 
preclusion from which status the assignees would be similarly benefited. First 
to be addressed is who then is the real party in interest - the Library Trustees 
or the assignees, Architect and Mechanical Engineer.
 
 
[¶26]  The definition of real party in interest 
is derived from Weber, 97 P.2d  at 669 (quoting 47 C.J. 35 and 1 Sutherland's 
Code Pleading, Practice and Forms, Section 12, ):
 
 
"A `real 
party in interest' is one who has an actual and substantial interest in the 
subject matter, as distinguished from one who has only a nominal interest, 
having reference not merely to the name in which the action was brought, but to 
the facts as they appear of record. He must be the present owner of the right 
sought to be enforced, even though his ownership is of the nature of a special 
property or equitable interest in the subject matter of the suit." * * * 
"Whatever may be the rule under the old system, the `real party in interest' is 
the party who would be benefited or injured by the judgment or the `party 
entitled to the avails of the suit.' `Interest,' within the meaning of this 
rule, means material interest, an interest in issue and to be affected by the 
decree, as distinguished from mere interest in the question involved, or mere 
incidental interest."
 
 
See 
likewise Rothwell v. Knight, 37 Wyo. 11, 258 P. 576 (1927) and 
McDonald v. Mulkey, 32 Wyo. 144, 231 P. 662 (1924). See 
also the similar issue of "standing to sue" which is a character of real party 
in interest in Matter of Various Water Rights in Lake DeSmet Reservoir, Bd. of 
Control, Docket No. II 7721, 623 P.2d 764 (Wyo. 1981).
 
 
[¶27]  In Central Contractors Co., Inc. v. 
Paradise Valley Utility Co., 634 P.2d 346, 348 (Wyo. 
1981), where it was held that a parallel company affiliated in interest could 
not be the real party in interest when it was not a party to the contract, we 
said:
 
 
"A pleading 
which sets forth a claim for relief * * * shall contain (1) a short and plain 
statement of the claim showing that the 
pleader is entitled to relief * * *." (Emphasis added.) Rule 8(a), W.R.C.P. 

 
 
"Every 
action shall be prosecuted in the name of the real party in interest. * * *." 
Rule 17(a), W.R.C.P.
 
 
[¶28]  Erb v. Erb, 573 P.2d 849 (Wyo. 1978) and Greenough v. Prairie Dog Ranch, Inc., 531 P.2d 499 (Wyo. 1975) are not 
applicable because both involve amendments during the course of the litigation 
and, in each case, the assignor or transferor retained a tangible interest in 
the results. Here, an entirely new claim against a new defendant was introduced 
into Owner's original lawsuit.
 
 
[¶29]  The real party in interest in this 
litigation is Architect and Mechanical Engineer by virtue of the assignment of 
the complete cause of action from Owner upon which they instituted and are now 
pursuing litigation.9 Wyoming Wool Marketing Ass'n, 394 P.2d 905.
 
 
B. Statute 
of Limitations
 
 

[¶30]  Passing from the real party in interest 
inquiry, Architect and Mechanical Engineer argue the umbrella of immunity from a 
statute of limitations, which may be provided to a governmental entity, carries 
forward to their clients with the assignment and provides a barrier denying 
utilization by Soil Lab. Architect and Mechanical Engineer come armed with more 
enthusiasm than authority.10

 
 

 
 
 
[¶31]  It is the soil testing on site work done 
by Soil Lab on May 17 and 18, 1977, as incorporated into a report dated and 
furnished about June 9, 1977, upon which the statute of limitations is 
premised.11 The benefit from this statute of 
limitations must be the result of the nature of the party; e.g., governmental 
immunity, and not the character of the claim. Next determined by overwhelming 
case law is that governmental immunity12 preclusion from a defense of 
statute of limitations requires public interest in the results and not pro forma 
participation in the proceedings. Board of Ed., School Dist. 16, Artesia, Eddy 
County v. Standhardt, 80 N.M. 543, 458 P.2d 795, 802 (1969). 
No matter whether the immune government is a party, the insulation arises only 
if the real interest is governmental and not by a benefit for private 
individuals. This fundamental rule was first defined in United States v. Beebe, 127 U.S. 338, 344-46, 8 S. Ct. 1083, 1086, 32 L. Ed. 121 (1888) (quoting State of New 
Hampshire v. State of Louisiana, 108 U.S. 76, 80, 2 S. Ct. 176, 176, 27 L. Ed. 656 (1883) and Miller v. State, 38 Ala. 
600 (1863)): 
 
 
The 
question is [a]re these defences available to the defendant in a case where the 
Government, although a nominal complainant party, has no real interest in the 
litigation, but has allowed its name to be used therein for the sole benefit of 
a private person?
 
 
It has been 
not unusual for this court, for the purposes of justice, to determine the real 
parties to a suit by reference, not merely to the names in which it is brought, 
but to the facts of the case as they appear on the record. * * * "And while the 
suits are in the names of the States, they are under the actual control of 
individual citizens, and are prosecuted and carried on altogether by and for 
them." * * *
 
 
* * * * * 
*
 
 
* * * "In 
our opinion, the rule that the statute of limitations does not run against the 
State, has no application to a case like the present, when the State, though a 
nominal party on the record, has no real interest in the litigation, but its 
name is used as a means of enforcing the rights of a third party who alone will 
enjoy the benefits of recovery.
 
 
[¶32]  In United 
States v. American Bell Tel. Co., 167 U.S. 224, 265, 17 S. Ct. 809, 820, 42 L. Ed. 144 (1897) (quoting Beebe, 127 U.S.  at 
347, 8 S.Ct. at 1088) it is stated:
 
 
"We are of 
the opinion that when the Government is a mere formal complainant in a suit, not 
for the purpose of asserting any public right or protecting any public interest, 
title or property, but merely to form a conduit through which one private person 
can conduct litigation against another private person, a court of equity will 
not be restrained from administering the equities existing between the real 
parties by any exemption of the Government designed for the protection of the 
rights of the United States alone. The mere use of its name in a suit for the 
benefit of a private suitor cannot extend its immunity as a sovereign government 
to said private suitor * * *."
 
 
See 
LaRepublique Francaise v. Saratoga Vichy Spring Co., 191 U.S. 427, 24 S. Ct. 145, 48 L. Ed. 247 (1903). See also Patten v. Scott, 118 Pa. 115, 12 A. 292 
(1888), which involves adverse possession of property for which a very delayed 
patent was issued. The statute of limitations was not delayed while technical 
title remained in the commonwealth. The assignee in this case takes the claim 
with the same time limitations to file suit with which the assignor would have 
been faced if no assignment was made. Aetna 
Cas. & Sur. Co. v. Windsor, 353 A.2d 684 (D.C.App. 1976); Seven 
Sixty Travel, Inc. v. American Motorists Ins. Co., 98 Misc.2d 509, 414 N.Y.S.2d 254 (1979).
 
 
[¶33]  We also reject Architect's and 
Mechanical Engineer's claim that the complaint filed against Soil Lab would 
relate back to the date of the filing of the original complaint. An amendment to 
a complaint will not relate back to the original complaint if a new claim is 
stated. Turner v. Hamilton, 13 Wyo. 408, 80 P. 664 (1905); N. & 
G. Taylor Co. v. Anderson, 275 U.S. 431, 48 S. Ct. 144, 72 L. Ed. 354 
(1928); McDaniel v. Lovelace, 439 S.W.2d 906 (Mo. 1969); Annotation, supra, 8 A.L.R.2d 6. In 
this case, Library Trustees themselves did not sue Soil Lab so the assigned 
claim was a new claim by the assignee to litigate with a new party. National 
Fire Ins. Co. v. Pettit-Galloway Co., 157 Ark. 333, 248 S.W. 262 (1923). By virtue of a 
party being added by amendment, the complaint cannot relate back. Additionally, 
an entirely new claim was presented involving a completely different contract. 
The Library Trustees, until partial settlement and assignment by Owner, had 
never accepted fault of Soil Lab as a claim for recovery from anyone. Union Pac. 
R. Co. v. Wyler, 158 U.S. 285, 15 S. Ct. 877, 39 L. Ed. 983 
(1895); 51 Am.Jur.2d Limitation of Actions § 218 (1970). Cf. Cooper v. Thomas, 
456 So. 2d 280 (Ala. 1984). The assigned claim became a direct 
breach of contract action pleaded in the new complaint filed by an assignee of 
the original bargaining party. The assignee was the real party in interest. 
Governmental immunity from a statute of limitations claim preclusion is not a 
viable defense for maintenance of this lawsuit when instituted more than ten 
years after the work was done.
 
 
C. 
Discovery - Tolled Statute of Limitations
 
 
[¶34]  Architect and Mechanical Engineer then 
argue that, even if Owner's assignee is subject to the statute of limitations, 
the relevant limitation period has not expired:
 
 
Nevertheless, 
even if somehow the District Court did so find that: The second amended 
complaint did not relate back to the filing of the original complaint; that 
Appellants were not entitled to assert governmental immunity on behalf of the 
Library Board; that Appellants are the real parties in interest; that a 
substitution is a necessary requirement for the pursuit of the second amended 
complaint; that Appellants must now assert the Library Board's claims as private 
professionals subject to Wyoming Statute § 1-3-107(a)(i), Appellants are still 
entitled to assert the Library Board's claims against Appellee based on the 
principle of discovery as authorized under Wyoming Statute § 1-3-107(a)(i)(A) 
set forth above.
 
 
As 
expressed in Appellants' Memorandum in opposition to the motion to dismiss, * * 
*, the application of the discovery rule can justifiably be asserted in the 
instant case. Based upon reliable information given to Appellants by the Library 
Board, it was not until well into the discovery phases of this litigation, 
particularly in the process of taking the depositions of representatives of Chen 
& Associates and Banner & Associates in the Spring of 1988, that the 
Library Board realized that Appellee had not performed its contract in a 
professional manner and in accordance with their contractual agreement, and that 
such acts and omissions could have been the reasons for the problems that the 
Library was experiencing. * * * Therefore any claims against Appellee would 
logically be based upon the discovery rule and would be well within the two-year 
statutory limitation period of Wyoming Statute § 1-3-107(a)(i) (1977 as 
amended), if applicable.
 
 
[¶35]  This contention is confusing because the 
basic thrust of the statute of limitations defense is emplaced in W.S. 1-3-105 
relating to civil actions on a contract.13 Whether the professional 
malpractice statute, W.S. 1-3-107, applies to Soil Lab will not be determined in 
this opinion, but suffice it to say that the premise of professional malpractice 
is usually based in tort.14 Vassos v. Roussalis, 625 P.2d 768 (1981), after 
remand 658 P.2d 1284 
(Wyo. 
1983).
 
 

[¶36]  There are few facts fixed, admitted or 
established in this record, but it is uncontested that Soil Lab did two days of 
soil testing in May 1977 and submitted a written report dated June 9, 1977 after 
being asked to do so by a member of the Library Trustees. That is the only work 
done against which the claim of contractual breach in its agreement with Owner 
can now be made.15

 
 

 
 
 
[¶37]  We have the contention that discovery, 
first occurring during litigative preparation, is an exception to the statute of 
limitations and extends the time for the commencement of suit by assignee beyond 
the more than ten years that elapsed between the 1977 time of performance and 
the amended claim filing in 1988 alleging the claim for contractual breach. 
There are three separate statutes which deserve comment regarding a statute of 
limitations evaluation for the more than ten year time span in this 
case.
 
 

[¶38]  The contractual action statute is W.S. 
1-3-105(a)(i) and (ii). Additionally referenced in briefing is the error or 
omission in rendering professional or health care services limitation, W.S. 
1-3-107. Wyoming also has a statute, which was enacted by Wyo. Sess. Laws ch. 
166 (1981), that provides a ten year statute of limitations - statute of repose 
- relative to improvements to real property. That statute is triggered upon 
completion of construction. Roberts v. Richard & Sons, Inc., 113 N.H. 154, 
304 A.2d 364 (1973). Any questions raised would not be considered to apply here 
with the certificate of completion for the library building issued in 1980-81.16

 
 

 
 
 
[¶39]  This court is faced with the further 
contention that a discovery factor should be applied to the contractual 
limitation statute, W.S. 1-3-105(a), to provide tolling of the statute until 
discovery which would provide a defense to the contractual statute of 
limitations. As a constituent of a statute of limitations application, discovery 
is generally a tort concept. Mills v. Garlow, 768 P.2d 554 (Wyo. 1989); Anderson v. 
Bauer, 681 P.2d 1316 
(Wyo. 1984); ABC Builders, Inc. v. Phillips, 632 P.2d 925 (Wyo. 1981). See, for 
example, Young v. Young, 709 P.2d 1254 (Wyo. 1985); 
W.S. 1-3-106, conversion and fraud premised on discovery; and W.S. 1-3-107, 
professional care two-year statute of limitations. Metzger v. Kalke, 709 P.2d 414 (Wyo. 1985). Conversely, 
it is clear that the improvement to real property statute, W.S. 1-3-111, was 
intended to apply without regard for discovery in application of its ten year 
period. The principle applied to contractual actions is that the statute of 
limitations commences to run when the right or cause of action accrues, Bliler 
v. Boswell, Administration, 9 Wyo. 57, 59 P. 798 (1899); Roberts, 
304 A.2d 364, which in this case is when the work was done and the report filed. 
Sears, Roebuck & Co. v. Enco Associates, Inc., 43 N.Y.2d 389, 401 N.Y.S.2d 767, 372 N.E.2d 555 (1977); North Carolina States Ports Authority v. Lloyd A. 
Fry Roofing Co., 294 N.C. 73, 240 S.E.2d 345 (1978). This is usually the time of 
a breach of a contractual agreement rather than the time that actual damages are 
sustained as a consequence of the breach. John J. Kassner & Co., Inc. v. 
City of New 
York, 46 N.Y.2d 544, 415 N.Y.S.2d 785, 389 N.E.2d 99 
(1979); 51 Am.Jur.2d, supra, § 126.
 
 
[¶40]  We do not now determine that discovery 
can never become a requirement for commencement of statute of limitations in 
contractual actions; for example, when fraud or intentional concealment is 
alleged. Olson v. A.H. Robins Co., Inc., 696 P.2d 1294, 1299 
(Wyo. 1985). 
However, this case provides no allegation or evidence by Architect and 
Mechanical Engineer upon which the district court was faced with factual review 
of an explanation which would foreclose contract work completion to trigger the 
statute of limitations commencement.17 Within this record, neither the 
district court nor this tribunal are favored with the soil test report, any 
evidence of the oral contract upon which it was prepared, a copy of the 
construction contract, a copy of Architect's contract, or Mechanical Engineer's 
contract with Architect. We are provided no specific details whether either 
Architect or Mechanical Engineer ever had contact with Soil Lab, except whatever 
nondefined use of the June 9, 1977 report they made.
 
 
[¶41]  Summarizing this case from all factual 
documents of record supplemented by admissions in pleading, the following 
scenario is reflected. A member of the Library Trustees asked Soil Lab to do 
some soil testing of the anticipated site for construction. Existence of an old 
graveyard on the site was not unknown, but whether reflected in any way in the 
report is not a matter of record. The work of Soil Lab was completed by 
preparation and submission of the report of June 9, 1977, insofar as the Library 
Trustees were concerned. A contested issue developed whether Architect knew 
about the graveyard site, but a considerably more heavily contested issue ensued 
whether Architect then told Mechanical Engineer about its existence. It is clear 
from the one factual stipulation and other documentation that during 
construction not only the existence of the graveyard but the fact that all of 
the graves had not been emptied did come to the attention of all of the involved 
parties.
 
 
[¶42]  The primary factual constituent of the 
available record is a Chen and Associates technical investigation report dated 
June 30, 1985, which was attached to the original complaint and provided 
conclusions which were obviously contested in some degree in technical workup. 
However, the conclusion of that report was not a particularly contested issue in 
the succeeding pleadings for the two and one-half year file development. The question at factual issue was allocation 
of the blame for the obvious problem. That simple conclusion was:
 
 
(1) The 
damage occurring to the building is being caused by settlement of the fill 
and/or the natural soils as a result of these materials becoming wetted due to 
extremely poor site grading conditions and the absence of an underdrain 
system.
 
 

[¶43]  The second and more definitive document 
for Architect's and Mechanical Engineer's reliance is a joint statement of facts 
filed August 17, 1987 and executed in behalf of all litigants. At that time, the 
direct action Assigned Claim amendment had not been introduced so that the 
Soil Lab's 1977 report was then only significant as a defense by Contractor, 
Architect and Mechanical Engineer to Library Trustees's charges of improper 
construction.18

 
 

 
 
 
[¶44]  In the pretrial submission joint 
statement, references to Soil Lab included:
 
 
Lincoln-DeVore, 
Inc., a Colorado corporation, prepared the original 
subsurface soils investigation report for the Library site dated June 9, 1977. 
In addition, Lincoln-DeVore, Inc. performed certain soils density tests during 
the construction phase on the project.
 
 
* * * * * 
*
 
 
E.W. Allen 
& Associates, Inc. has filed a counterclaim against the Sweetwater County 
Library Board of Trustees for the alleged negligence of the Board's alleged 
agent, Lincoln-DeVore, Inc., in rendering the original soils report and 
conducting the soils testing which it alleges are attributable to the Sweetwater 
County Library Board of Trustees. In addition, E.W. Allen & Associates, Inc. 
has asserted a cross-claim against Superior Lumber Company, seeking contribution 
and/or indemnification in the event that the Sweetwater County Library Board of 
Trustees' damages are attributable to E.W. Allen's negligence. E.W. Allen & 
Associates, Inc. has also filed a third-party complaint against Lincoln-DeVore, 
Inc. for its alleged negligence in providing the soils report and soils testing 
services in conjunction with the construction of the library building. In 
asserting its third-party complaint against Lincoln-DeVore, Inc., E.W. Allen 
& Associates, Inc. seeks contribution and/or indemnification from 
Lincoln-DeVore, Inc. as well as a second claim for relief seeking damages as a 
direct and proximate result of the alleged negligence of Lincoln-DeVore, 
Inc.
 
 
* * * * * 
*
 
 
* * * 
Richardson Associates has asserted a third-party complaint against 
Lincoln-DeVore, Inc. for indemnity and/or contribution as well as comparative 
negligence in the event that the Sweetwater County Library Board of Trustees 
recovers against Richardson Associates.
 
 
Lincoln-DeVore, 
Inc. has filed counterclaims against E.W. Allen & Associates and Richardson 
Associates for pursuing recovery against Lincoln-DeVore, Inc. without any 
factual basis and has asked for reimbursement of its costs in defending against 
such actions, including attorney's fees, expert witness fees and other 
reasonable costs.
 
 
* * * * * 
*
 
 
* * * the 
following issues are to be submitted to the finder of fact:
 
 
* * * * * 
*
 
 
D. At the 
time of the original soils investigation, was the soil engineer for the project, 
Lincoln-DeVore, Inc., an independent contractor or an agent of the Sweetwater 
County Library Board of Trustees?
 
 
E. Was 
Lincoln-DeVore, Inc. negligent in the performance of its duties in rendering the 
original soils investigation and in conducting the soil density tests during the 
construction of the Sweetwater County Library?
 
 
F. Is the 
negligence, if any, of Lincoln-DeVore, Inc. attributable to itself, other 
parties, or to the Sweetwater County Library Board of Trustees?
 
 
[¶45]  We hold that at least the ten year 
statute of limitations applied, a discovery defense did not extend the time, the 
complaint was not filed within ten years and the district court properly 
sustained the motion on this direct action claim as a motion to dismiss/summary 
judgment dismissal.
 
 

III.                  
AMENDED 
THIRD-PARTY CLAIM  THIRD-PARTY BENEFICIARY

 
 
[¶46]  With resolution of the assigned 
contractual claims, there remains for our consideration the initial third-party 
complaints involving contribution and indemnity, and the subsequently inserted 
third-party beneficiary causes. We will first address the amended third-party 
claim - third-party beneficiary - since it came into the litigation at the same 
general time as the Assigned Claim and provides, in perspective, somewhat 
similar issues.
 
 
[¶47]  Library Trustees sued Contractor and 
Architect on a breach of contract basis and then Architect's representative, 
Mechanical Engineer, on a third-party beneficiary premise. Architect and 
Mechanical Engineer defended with pleading on the merits and by answer of 
affirmative defenses including assertion that the faulty building was the 
responsibility of the agent of the Library Trustees - its Soil Lab - who caused 
the bad building by violating its separate contract to provide to Owner good 
soil information and construction advice. Concurrent with that affirmative 
defense, Architect and Mechanical Engineer next sued Soil Lab claiming a 
third-party right of express indemnity, contribution, implied indemnity and 
later third-party beneficiary by virtue of the contractual arrangements between 
Owner and Soil Lab and Contractor and Soil Lab. After Architect and Mechanical 
Engineer settled with Owner, they now claim recovery by a previously 
non-asserted claim obtained by settlement from Owner as a condition of the 
settlement. Into this morass, Soil Lab contends that the settlement eliminated 
the vehicle for a third-party proceeding and that if Architect and Mechanical 
Engineer want to chase further litigation, it should be pursued by a new 
lawsuit. The second defense claims that the acceptance of the assignment by 
Architect and Mechanical Engineer from the Library Trustees, of any claim that 
the Library Trustees had, eliminates a factual basis for any residual 
third-party claims. A multitude of issues are engendered, some of which are not 
favored by citation of authority in present briefing.
 
 
A. 
Third-Party Beneficiary
 
 
[¶48]  Architect and Mechanical Engineer claim 
the work order contract between Soil Lab and the Library Trustees as well as the 
work done by Soil Lab for Contractor created rights for them to sue as 
third-party beneficiaries.19 The addition of this claim as an 
issue for appeal raises procedural and substantive issues, not the least of 
which is inadequate briefing and minimal record. These claims were added in 1988 
to the collection of earlier presented third-party claims at the same time the 
Assigned Claim amendment was filed. Technically, this pleading did not state a 
further third-party recovery basis, but provided a direct claim based on 
third-party beneficiary entitlement. The pleading presented was filed without 
leave of the district court and then, without a motion to strike or defensive 
attack on improper filing, was initially answered by general denial and 
affirmative answers.
 
 
[¶49]  Architect and Mechanical Engineer, by 
their separate but similar amended third-party complaints, stated a third-party 
beneficiary direct cause of action based upon not only the work done for the 
owner by Soil Lab, but also for Contractor. The amended complaint was filed 
April 4, 1988 without approving district court order. The contract dates alleged 
from which the third-party beneficiary status and right was claimed was a 
contract between Owner and Soil Lab of June 9, 1977, and Contractor for 
compaction tests in the summer and early fall of 1978. Soil Lab answered by 
initially proceeding to file a general denial supplemented with defensive 
pleadings incorporating previously stated defenses to the indemnity contribution 
claims and further stating specific defenses of failure to state a claim and 
statute of limitations.
 
 
[¶50]  Unfortunately, present briefing serves 
poorly for our resolution, where essentially confined to the propriety of filing 
the unapproved amendment including factual argument, that it was or was not done 
by oral agreement and stipulation. After Soil Lab had filed the April 12, 1988 
answer which constituted an unqualified response, it then for the first time in 
May raised a W.R.C.P. 15(a) no court approval defense.20 Like all other motions filed in 
the 1988 barrage of defensive proceeding emanating from all of the parties, the 
district court ruling came on this issue by the dispositive decision letter and 
succeeding judgments of July 1988. In that result, we cannot tell whether the 
basis of the district court's decision was substantive or procedural or, for 
that matter, statute of limitations and whether applied on the basis of an oral 
or written contract perspective.
 
 
[¶51]  Briefing on this subject by Architect 
and Mechanical Engineer, sketchy as it is, advances an unrecorded 
"understanding" and that they yet should be entitled to receive an order to correct the 
technical deficiency. No decision of either the failure to state a claim or 
the statute of limitations as alternative justifications for the district 
court's dispository order is specifically stated.
 
 
[¶52]  Architect and Mechanical Engineer 
addressed discretion of the court to reject filing the third-party complaint, 
Stichting Mayflower Recreational Fonds v. Newpark Resources, Inc., 903 F.2d 741 (10th Cir. 
1990), and supplemented that argument by contention that the issues raised 
claiming a third-party beneficiary entitlement to recovery present entirely new 
causes of action. With that, we completely agree. Not only were new issues 
(third-party beneficiary claims) presented, but a new contractual arrangement 
derived from work done by Soil Lab for 
the Contractor presented in essence a new party to what had previously been 
a third-party indemnity contribution claim arena of litigation. Although a 
procedural resolution may have been appropriate; e.g., no order authorizing 
amendment, we are faced with confusion of facts, an insufficient record and no 
specified decisional basis for court decision. We cannot specifically define 
litigative briefing or court decision in the district court which addressed 
either waiver by answer of the lack of court order for amendment or waiver of 
the waiver issue by lack of presentation. Here addressed is only the initial 
amendment without district court order. This is a discretional decision which we 
cannot tell whether the district court ever made.
 
 
[¶53]  The dispository district court order 
granted a dismissal "of the amended third party complaint [including first and 
amended third party claims]" and did not provide any language constituting 
acceptance of the attack of improperly filing the amended third-party claims 
creating an extension of the "third-party proceedings;" although technically, 
the amended claims are not third-party claims. Considering the record and the 
often stated rule of sustaining the decision of the district court if any basis 
under law is established, we choose to address the amended claims substantively 
instead of remanding for further proceeding by the district court.
 
 
[¶54]  There is no difficulty in affirming the 
district court decision in dismissing the third-party beneficiary claim 
contained within the amended third-party claims where related to the work and 
agreements between Owner and Soil Lab. The pleaded date of work done in 1977 is 
more than ten years before the claim was filed. It is obvious that even more so 
than the action on the assigned claim that the statute of limitations - either 
oral agreement eight years, W.S. 1-3-105(a)(ii), or ten years, W.S. 
1-3-105(a)(i) - had passed. The burden of proof for an exception to the statute 
of limitations rested with Architect and Mechanical Engineer. New Amsterdam 
Casualty Co. v. Industrial Accident Commission, 66 Cal. App. 86, 225 P. 459 (1924).21
 
 
[¶55]  We are then troubled with the status of 
this record that the work obviously done by Soil Lab for Contractor, with either 
of whom Architect and Mechanical Engineer had no contractual relationship, was 
within ten years of the amended filing date, but the complaint alleges only a 
contract and neither states that it was oral nor written. The district court 
could have possibly determined the pleading was insufficient to escape the 
statute of limitations by failure to allege a written contract.22 If we take the entire 
record as it is, the issue presented is whether a work order prepared by 
Contractor to obtain construction time compaction tests created a third-party 
beneficiary right for enforcement in Architect and Mechanical Engineer who had 
previously designed the building and now were engaged in some rather undefined 
fashion in supervising construction.
 
 
[¶56]  We have disposed of the claim founded 
upon Owner's and Soil Lab's 1977 report based on the statute of limitations and 
now affirm the dismissal of Contractor's and Soil Lab's arrangement for 
third-party beneficiary entitlement afforded to Architect and Mechanical 
Engineer on the basis of failure to state a claim within the record then existent as 
alleging or demonstrating more than an incidental beneficiary relationship. It 
is elemental that unless a contract was entered into for the benefit of a third 
party, no one but the parties to the contract can be bound by it or obtain 
rights under it. American Surety Co. of New York v. Broadway Imp. & Inv. Co., 39 
Wyo. 195, 271 P. 19 
(1928).
 
 
[¶57]  Considering the two year course of 
pending motions and discovery, the 1988 amended claim relating to the 
third-party beneficiary cause presented by the Architect and Mechanical Engineer 
against Soil Lab first alleged a Contractor-Soil Lab compaction testing 
agreement, and then stated in the two separate pleadings:
 
 
"Lincoln-DeVore's 
[Soil Lab] performance under said contract was intended for the direct benefit 
of Richardson [Architect] * * * and E.W. Allen [Mechanical Engineer]." 
[paragraph 12]
 
 
[¶58]  We affirm the district court in decision 
that this statement is insufficient to relate a third-party beneficiary claim 
considering the factual and pleading history of the case where real specificity 
was possible, including previously listed work orders from which this contention 
could arise or other details or documents establishing any informative agreement 
between Contractor and Soil Lab to show an agreement that the compaction tests 
were for the intended benefit of the supervising Architect or Mechanical 
Engineer.23
 
 
[¶59]  Restatement (Second) Contracts § 302 
(1981), formerly Restatement (First) § 133 (1932), has been found by a number of 
courts to provide a convenient framework for analysis.24 Restatement (Second) 
Contracts, supra, § 302 provides:
 
 
(1) Unless 
otherwise agreed between promisor and promisee, a beneficiary of a promise is an 
intended beneficiary if recognition of a right to performance in the beneficiary 
is appropriate to effectuate the intention of the parties and either
 
 
(a) the 
performance of the promise will satisfy an obligation of the promisee to pay 
money to the beneficiary; or
 
 
(b) the 
circumstances indicate that the promisee intends to give the beneficiary the 
benefit of the promised performance.
 
 
(2) An 
incidental beneficiary is a beneficiary who is not an intended 
beneficiary.
 
 
[¶60]  It is apparent in examining the 
propriety of the order of dismissal entered by the district court that we are 
called to assess application of either Restatement (Second) Contracts, supra, § 
302(1)(b) performance beneficiary, or to, if at all, an incidental beneficiary, 
Restatement (Second) Contracts, supra, § 302(2). The incidental beneficiary 
exclusion had its source in a statement in German Alliance Ins. Co. v. Home 
Water Supply Co., 226 U.S. 220, 33 S. Ct. 32, 57 L. Ed. 195 (1912), which was later republished by 
statement of Justice Holmes in Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S. Ct. 134, 72 L.Ed 290, 292 (1927): "`Before a stranger can avail himself of the 
exceptional privilege of suing for a breach of an agreement, to which he is not 
a party, he must at least show that it was intended for his direct 
benefit.'"
 
 
[¶61]  This court addressed the Restatement in 
Graham and Hill v. Davis Oil Co., 486 P.2d 240 (Wyo. 1971). The opinion 
questioned the difference between intent and reliance without a definitive 
decision. That question lost out in recodification of the restitution of 
Restatement (Second) Contracts, supra, § 302, which clearly adopted the intent 
criteria rather than including any reliance quotient for application of a 
third-party beneficiary right. The difference is significant in that the intent 
characterizes the agreement content of conduct while the reliance addresses the 
characteristics and behavior of the third party. In Wyoming, the intent rule was 
specifically adopted by this court in Wyoming Machinery Co. v. United States 
Fidelity and Guaranty Co., 614 P.2d 716 (Wyo. 1980), 
although we have not had occasion before now to directly consider the text of 
Restatement (Second) Contracts, supra, § 302 which had been adopted by the 
American Law Institute effective May 17, 1979. Cf. Hoiness-LaBar Ins. v. Julien 
Const. Co., 743 P.2d 1262 (Wyo. 
1987), considering third-party beneficiary, but without evaluation of the 
Restatement text.
 
 
[¶62]  A decisive array of cases directs us to 
conclude that the requisite Restatement (Second) Contracts, supra, § 302(1) 
intended beneficiary status is not presented here sufficiently to escape the 
motion attack by Soil Lab. The two part test stated in the nationally leading 
third-party beneficiary case of Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744, 751 
(1983) is persuasive.
 
 
There is 
thus a two part test for determining whether one is an intended third party 
beneficiary: (1) the recognition of the beneficiary's right must be "appropriate 
to effectuate the intention of the parties," and (2) the performance must 
"satisfy an obligation of the promisee to pay money to the beneficiary" or "the 
circumstances indicate that the promisee intends to give the beneficiary the 
benefit of the promised performance." The first part of the test sets forth a 
standing requirement. For any suit to be brought, the right to performance must 
be "appropriate to effectuate the intentions of the parties." This general 
condition restricts the application of the second part of the test, which 
defines the intended beneficiary as either a creditor beneficiary (§ 302(1)(a)) 
or a donee beneficiary (§ 302(1)(b)), though these terms are not themselves used 
by Restatement (Second). Section 302(2) defines all beneficiaries who are not 
intentional beneficiaries as incidental beneficiaries. The standing requirement 
leaves discretion with the trial court to determine whether recognition of third 
party beneficiary status would be "appropriate." If the two steps of the test 
are met, the beneficiary is an intended beneficiary "unless otherwise agreed 
between promisor and promisee."
 
 
See also 
the application to construction-financing case of Meyers Plumbing and Heating 
Supply Co. v. West End Federal Sav. and Loan Ass'n, 345 Pa. Super. 559, 498 A.2d 966 (1985).
 
 
[¶63]  A case in pleading which is surprisingly 
similar to this case considering whether the basic agreement was intended for 
the direct benefit is Valley Landscape Co., Inc. v. Rolland, 218 Va. 257, 237 S.E.2d 120 (1977). There the contested pleading alleged for a third-party 
beneficiary claim: "`4. That certain provisions of [architect's] contract with 
[owner] were for the benefit of the general contractor.'" Id. 237 S.E.2d  at 122. In 
Valley Landscape Co., Inc., the contractor filed a third-party complaint against 
the architect to result in trial court dismissal of both the original and 
amended pleading. On appeal, the Virginia Supreme Court stated:
 
 
The amended 
motion does not set forth any such "provisions", and the contract between 
[owner] and [architect] was not made a part of the record. While [owner] 
contracted with the architect * * * to draw plans and specifications and to make 
periodic site inspections, their contract was made prior to the employment by 
[owner] of a contractor to build the project. It was a separate and independent 
construction contract that was thereafter made by [owner] and 
[architect].
 
 

Id. at 
122.

 
 
[¶64]  The rule then applied in the case is 
persuasive here as to the similar relationship of Soil Lab to both Contractor 
and Owner.
 
 
"Our review 
of the law suggests to us that supervision generally is undertaken for the 
benefit of the owner to insure that the construction is proceeding in compliance 
with the plans and specifications approved by the owner. In general terms, a contractor is an 
incidental beneficiary absent clear intent manifested in the owner-architect 
contract to the contrary."
 
 

Id. at 123 
(quoting A.R. Moyer, Inc. v. Graham, 285 So. 2d 397, 403 (Fla. 1973) and emphasis 
in original).

 
 
[¶65]  We would follow the clear intent 
principle of the A.R. Moyer, Inc. and Valley Landscape Co., Inc. 
cases:
 
 
[T]hat it 
is not sufficient that [contractor] would be incidentally benefited by a proper 
performance of duties on the part of the architect. We find no allegation of 
facts in [contractor's] third-party motion for judgment from which we could draw 
a conclusion that the owner-architect agreement was "clearly and definitely 
intended" and made to bestow a direct benefit on [contractor].
 
 
Valley 
Landscape Co., Inc., 237 S.E.2d  at 124. Similarly decided is Hillbrook 
Apartments, Inc. v. Nyce Crete Co., 237 Pa. Super. 565, 352 A.2d 148 (1975), which is 
also a construction case involving improper floor installation. Intent to extend 
rights to the third party must be indicated in the contract which also defines 
the assumption of duty. Matternes v. City of Winston-Salem, 286 N.C. 1, 209 S.E.2d 481 
(1974); Schwinghammer v. Alexander, 21 Utah.2d 418, 446 P.2d 414 
(1968).
 
 
[¶66]  The same general rule was stated by the 
Illinois Supreme Court in People ex rel. Resnik v. Curtis & Davis, 
Architects & Planners, Inc., 78 Ill. 2d 381, 36 Ill.Dec. 338, 400 N.E.2d 918 
(1980), where, however, the court found the architectural contract displayed a 
direct intent to make the state a beneficiary. As direct beneficiary, the state 
as a user was entitled to pursue in its own name recovery against the 
architects' faulty construction of a state penal facility.
 
 
"The rule 
is settled in this state that, if a contract be entered into for a direct 
benefit of a third person not a party thereto, such third person may sue for 
breach thereof. The test is whether the benefit to the third person is direct to 
him or is but an incidental benefit to him arising from the contract. If direct 
he may sue on the contract; if incidental he has no right of recovery thereon. 
This rule has been announced without variation in numerous cases decided by this 
court. * * *
 
 
It is not 
seriously argued that such is not the rule in Illinois, but the argument turns rather on the 
application of the rule to the construction of the contract. In such a case no 
opinion in an adjudicated case, even of this court, is controlling unless the 
language of the contract or the circumstances surrounding the parties are 
substantially the same, since each case must depend upon the intention of the 
parties as that intention is to be gleaned from a consideration of all of the 
contract and the circumstances surrounding the parties at the time of its 
execution. * * * The rule is that the right of a third party benefited by a 
contract to sue thereon rests upon the liability of the promisor, and this 
liability must affirmatively appear from the language of the instrument when 
properly interpreted and construed. The liability so appearing can not be 
extended or enlarged on the ground, alone, that the situation and circumstances 
of the parties justify or demand further or other liability."
 
 
Id. 400 N.E.2d  at 919 (quoting Carson Pirie Scott & Co. v. Parrett, 346 Ill. 252, 257-58, 178 N.E. 498, 501 (1931)). Furthermore, other cases make clear that the 
responsibility for adequate pleading and burden of proof rest with the 
third-party claiming beneficiary status for entitlement to proceed in its own 
name under a contract of the other parties. Ross v. Imperial Const. Co., Inc., 
572 F.2d 518 (5th Cir. 1978).
 
 
[¶67]  We would follow this decisive authority 
and determine that, without regard for discretion to disallow amendment whether 
or not the decision was postured on that basis and in the face of an inadequate 
record to assess application of a statute of limitations, the district court was 
entitled to hold as it did that the pleading failed to state a claim for 
recovery as a third-party beneficiary for which within the perspective of the 
case relief could be granted. Valley Landscape Co., Inc., 237 S.E.2d 120. 
Architect and Mechanical Engineer fail to carry their burden in pleading by lack 
of any documentary or even oral reference to an agreement whereby Soil Lab 
undertook testing for the use or benefit of Architect and Mechanical Engineer as 
they conducted whatever supervisory responsibilities they might have or, for 
that matter, that the testing done by Soil Lab had anything to do with the 
design and landscaping problems which created the problems involved in this 
litigation. At best, any claim benefit by Architect and Mechanical Engineer was 
incidental. Lake Placid Club Attached Lodges v. 
Elizabethtown Builders, Inc., 131 A.D.2d 159, 521 N.Y.S.2d 165 (1987); Moss v. 
West Tacoma Newsprint Co., 1 Wn. App. 361, 462 P.2d 256 
(1969).
 
 
[¶68]  Assuming without deciding a proper 
introduction of the amendment to add the third-party beneficiary issues into 
this lawsuit, we find no proper pleading to state a claim upon which relief can 
be granted.
 
 
V. INITIAL 
THIRD-PARTY COMPLAINT
 
 
A. 
Contribution
 
 
[¶69]  Entirely different concepts are inserted 
into this litigation by the classical introduction of the contribution and 
indemnity claims as third-party complaints. Yet another complexity is created by 
the broad arguments presented for recovery under these theories. Architect and 
Mechanical Engineer recognize the difference between tort and contract and 
consequently attempt to introduce both by alleging negligent performance of a 
contract as a charge against Soil Lab's services for Owner in order to have 
resort to a tort theory for comparative contribution after payment and 
settlement of claims for the principal loss in the bad building as a breach of 
contract lawsuit. This court has stated that "[c]ontribution applies only in 
tort." Centric Corp. v. Drake Bldg. Corp., 726 P.2d 1047, 1053 
(Wyo. 1986). A 
claim of defense arising out of tort concepts, such as indemnity, is not 
available where the claim of plaintiff is premised upon contract. Centric Corp., 
726 P.2d  at 1054. Here, the opposite is presented where contractual dispute 
about the quality of services performed are subjected to challenge by tort 
concepts although the cause remains in contract.
 
 
[¶70]  Architect and Mechanical Engineer try to 
read general contribution language too broadly. Clearly, contribution can be 
applied to joint duties created by agreement such as joint obligors on a note, 
mutual promisors or partnership relationship. What this court clearly indicated 
in application of the statutory contribution among the joint tort-feasors 
process only applies to tort based liabilities and not, as in this case, 
divergent contractual responsibilities in a building construction. Centric 
Corp., 726 P.2d 1047. 
See Restatement (First) Restitution §§ 81 and 86 (1937); 18 Am.Jur.2d 
Contribution § 1 (1985); Annotation, Uniform Contribution Among Tortfeasors Act, 
34 A.L.R.2d 1107 (1954); 12 Uniform Contribution Among Tortfeasors Act (U.L.A.) 
§ 1 at 63 (1975) and cases therein cited.
 
 
[¶71]  The right of contribution between joint 
tort-feasors is dependent upon statute. Convoy Co. v. Dana, 359 P.2d 885 (Wyo. 1961); Denneler v. Aubel Ditching Service, Inc., 203 
Kan. 117, 453 P.2d 88 (1969). Cf. Stein v. Whitehead, 40 A.D.2d 89, 337 N YS.2d 821 (1972), 
considering Dole v. Dow Chemical Co., 30 N Y2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972) and Kelly v. Long Island Lighting Co., 31 N.Y.2d 25, 334 N.Y.S.2d 851, 286 N.E.2d 241 (1972), which introduced comparative negligence and right of 
contribution into New York law by court decision for application to joint 
tort-feasors. See likewise Tipton v. Texaco, Inc., 103 N.M. 689, 712 P.2d 1351 (1985) and 
Scott v. Rizzo, 96 N.M. 682, 634 P.2d 1234 (1981).
 
 
[¶72]  Within the context of these theories as a third-party action, we will not 
permit expansion of the original principal's lawsuit claim as plaintiff beyond 
its asserted claims for contractual assessment of a right to a third-party tort 
theory for contribution. We will confine application of the first third-party 
claims to the issues before the participants when settlement was made for which 
Architect and Mechanical Engineer now seek to be reimbursed for all, part of or 
more than all of what they may have paid to resolve their own contractual 
disputes with the Library Trustees.25 This aspect of the 
case is confined to its historically pleaded status of a third-party claim 
seeking liability over primary responsibility. Since the Library Trustees sued 
Architect and Mechanical Engineer on contract, tort contribution theories are 
not also available to Architect and Mechanical Engineer to spread the 
risk.
 
 
[¶73]  Contribution as a theory of statutory 
recovery does not apply since within this context, it is a tort theory of shared 
liability and does not apply to reduce breach of contract damages for faulty 
construction.
 
 
B. Express 
Indemnity26
 
 
[¶74]  Express indemnity as a theory cannot be 
applied since Soil Lab clearly never agreed to specifically indemnify any 
construction participant who entered into later contractual relations with Owner 
during the building activities. See Wyoming Bank & Trust Co. v. Waugh, 606 P.2d 725 (Wyo. 
1980).
 
 
[¶75]  The basis of contributory responsibility 
by express indemnity is based on contractual undertaking establishing an agreed 
obligation. Cities Service Co. v. Northern Production Co., Inc., 705 P.2d 321 (Wyo. 1985); 
Wyoming Bank & Trust Co., 606 P.2d 725; Pan American 
Petroleum Corp. v. Maddux Well Service, 586 P.2d 1220 (Wyo. 1978). 
Obviously here, Soil Lab, in performing soil tests on an oral order, did not 
enter into an express indemnity agreement from which Architect and Mechanical 
Engineer can find an enforceable undertaking to indemnify them against improper 
building design. Express indemnity does not exist here. A strict construction 
rule applies for both the existence of express indemnity and its construction 
where a party may become obligated to answer for the liabilities of another. Pan 
American Petroleum Corp., 586 P.2d 1220; Freund v. 
Utah Power & Light Co., 793 P.2d 362 (Utah 1990).
 
 
[¶76]  There is nothing in the oral 
relationship or the submission of a documentary report status of this case by 
pleading or supporting facts which justifies an application of express 
indemnity. Without agreement between 
these litigants, there is nothing provided to create the express contractual 
indemnity duty. Time sequences become critical and whatever might be construed 
within the oral agreement relationship of Soil Lab and the Library Trustees, it 
did not involve an agreed undertaking by Soil Lab to benefit or indemnify the 
later involved participants who were then not determined. Wyoming Johnson, Inc. 
v. Stag Industries, Inc., 662 P.2d 96 (Wyo. 1983); Heckart v. 
Viking Exploration, Inc., 673 F.2d 309 (10th Cir. 
1982). Cf. Cities Service Co., 705 P.2d 321, where an 
expressly applicable written indemnity provision applied.
 
 
C. Implied 
Indemnity
 
 
[¶77]  Next requiring consideration is implied 
contractual indemnity arising when there 
is some contractual relationship between the party seeking indemnity and the 
party against whom indemnity is sought so that the latter owes an 
independent duty to the former. See Vickery v. Reliable Elec. Co., 703 F.2d 488 (10th Cir. 
1983), following language we provided in Pan American Petroleum Corp., 586 P.2d  
at 1224. This court addressed the concept in the asphyxiation death case of 
Miller v. New York Oil Co., 34 Wyo. 272, 243 P. 118 (1926). That 
event of loss - death of a tenant - was the product of the utility's active 
creation. The landlord who assessed wrongful death damage was entitled to 
indemnity from the principal actor whose wrongful act had caused the exposure. 
Miller, as a tort damage indemnity case, does not assist in resolution of this 
present contractual case for yet another reason - the utility and the homeowner 
had a mutual contractual relationship involving a gas stove out of which the 
asphyxiation death resulted.
 
 
[¶78]  In this case, no contractual arrangement 
of any kind exists between Soil Lab and Architect. See likewise Nomellini Const. 
Co. v. Harris, 272 Cal. App. 2d 352, 77 Cal. Rptr. 361, 364 (1969), involving a 
non-supplied steel product causing subcontractor liability to the contractor and 
resulting indemnity claim against the supplier where that court, in quoting 42 
C.J.S. Indemnity § 20 at 594 (1944), said "`[t]he obligation to indemnify may 
grow out of an implied contractual relation [or out of a liability imposed by 
law between contracting parties].'"
 
 
[¶79]  The significant function of implied 
contractual indemnity is to enforce rights which flow from the relationship 
created by the actual indemnitor - indemnitee contractual relationship. Chirco 
Const. Co., Inc. v. Stewart Title and Trust of Tucson, 129 Ariz. 187, 629 P.2d 1023 (1981). Here we have no contractual relationship between these 
litigants and the theory fails for the same reason. Like third-party beneficiary 
and express indemnity, implied indemnity cannot be created where there is no 
express or implied contractual relationship. Vickery, 703 F.2d 488, applying 
Wyoming Worker's Compensation law.
 
 
D. 
Equitable Indemnity
 
 
[¶80]  The most difficult issue to be 
extricated from this complicated course of pleadings is whether an equitable implied indemnity 
responsibility can be introduced where there are no contractual 
relationships within these factual circumstances. Application of equitable 
indemnity would require that Soil Lab should hold harmless or contribute to the 
contractual damages sustained by the building designers when a faulty building 
is produced. Essentially presented is whether, in addition to defenses on the 
merits of breach, the designing participant can surcharge its damages after 
settlement with Owner against the agent of Owner with which it individually had 
no contractual relationship.
 
 
[¶81]  It is apparent that the non-availability 
of implied equitable indemnity is substantiated by the same factual parameters 
of the parties' relationship, which also denies express indemnity and 
third-party beneficiary. There is simply no restitution theory as there was no 
express or implied agreement upon which Soil Lab should be liable to indemnify 
Architect and Mechanical Engineer for their own failures in unsatisfactorily 
designing the building. Obviously, if Architect and Mechanical Engineer wanted 
additional soil testing upon which to rely, they certainly could have ordered 
those services as an adjunct to the work for which they had 
contracted.
 
 
[¶82]  The basic premise and outline of this 
source of recovery - equitable indemnity - was defined in Bay Development Ltd. 
v. Superior Court (Home Capital Corp.), 50 Cal. 3d 1012, 269 Cal. Rptr. 720, 
729-730, 791 P.2d 290, 299-300 (1990), where that court indicated:
 
 
"The 
obligation of indemnity, which we have defined as `the obligation resting on one 
party to make good a loss or damage another has incurred' [citation] may arise 
under the law of this state from either of two general sources. First, it may 
arise by virtue of express contractual language establishing a duty in one party 
to save another harmless upon the occurrence of specified circumstances. Second, 
it may find its source in equitable 
considerations brought into play either by contractual language not 
specifically dealing with indemnification or by the equities of the particular 
case. [Citations.]" (E.L. White [v. City of Huntington Beach], 21 Cal. 3d 
[497] at pp. 506-507, 146 Cal. Rptr. 614, 579 P.2d 505 [(1978)], emphasis added.)
 
 
That court 
further recognized:
 
 
[W]e 
recognized a distinction between an indemnity claim based on an express contract 
to indemnify, that is, an express 
contractual indemnity claim, and an indemnity claim based on "contractual 
language not specifically dealing with indemnification" (E.L. White, supra, 21 
Cal.3d at p. 507, 146 Cal. Rptr. 614, 579 P.2d 
505), * * *.
 
 

Id. 791 P.2d  
at 300.

 
 
[¶83]  The contention that a claim for implied contractual indemnity should be 
equated with a claim for express 
contractual indemnity cannot be 
reconciled with case law involving express indemnification clauses and 
circumstances where both the indemnitor and indemnitee bear some responsibility 
for the loss. Id. at 302. The subject was addressed by the 
New Jersey 
court in Enright v. Lubow, 202 N.J. Super. 58, 493 A.2d 1288 (App. Div. 1985), 
cert. denied 104 N.J. 376, 517 A.2d 386 (1986), involving indemnity claim by an 
insurance company against the surveyor who mislocated the easement.
 
 
The right 
of indemnity rests upon a difference between the primary and secondary liability 
of two persons, each of whom is made responsible under the law to an injured 
party. It is a right which enures to a person who, without active fault on his 
own part, has been compelled, by reason of some legal obligation, to pay damages 
occasioned by the initial negligence of another, and for which he himself is 
only secondarily liable. Adler's Quality Bakery, Inc. v. Gaseteria, Inc., 32 
N.J. 55, 80, 159 A.2d 97 (1960) citing Builders Supply Co. v. McCabe, 366 Pa. 
322, 77 A.2d 368 (1951). See Newmark v. Gimbel's, Inc., 54 N.J. 585, 600-601, 
258 A.2d 697 (1969); Video Station v. Frey's Motor Express, 188 N.J. Super. 494, 
499, 457 A.2d 1217 (App. Div. 1983); Neveroski v. Blair, 141 N.J. Super., 365, 
385, 358 A.2d 473 (App. Div. 1976); cf. Rosenbloom v. Adler, 93 N.J. 324, 351, 
461 A.2d 138 (1983).
 
 

Id. 493 A.2d  
at 1303.

 
 
[¶84]  This leaves us then to examine whether 
this present factual situation is pleaded to state a basis of recovery as 
discussed in Bay Development Ltd. of equitable considerations brought into play 
by contractual language not specifically dealing with indemnification or 
separately by the equities of the particular case, citing E.L. White, Inc. v. 
City of Huntington Beach, 21 Cal. 3d 497, 146 Cal. Rptr. 614, 579 P.2d 505 (1978) and American Motorcycle Ass'n v. SuperiorCourtofLos AngelesCounty, 20 Cal. 3d 578, 146 Cal. Rptr. 182, 
578 P.2d 899 (1978). See likewise Miller, 243 P. 118. The initial 
difficulty we have in applying American Motorcycle Ass'n is that it relates to a 
doctrine for the allocation of loss among multiple tort-feasors and in no way 
relates to a contract breach reimbursement thesis. Cf. Convoy Co., 359 P.2d 885. The 
tort-feasor contribution basis of the case is defined:
 
 
In order to 
attain such a system, in which liability for an indivisible injury caused by 
concurrent tortfeasors will be borne by each individual tortfeasor "in direct 
proportion to [his] respective fault," we conclude that the current equitable 
indemnity rule should be modified to permit a concurrent tortfeasor to obtain 
partial indemnity from other concurrent tortfeasors on a comparative fault 
basis.
 
 
American 
Motorcycle Ass'n, 578 P.2d  at 912.
 
 
[¶85]  Similarly, the tort conduct injury of 
the events which occasioned E.L. White, Inc., 579 P.2d 505 is well presented. We would understand the applicability of that 
character of case law if the damage in this case had resulted from personal 
injury by virtue of the negligently constructed building instead of a 
contractual obligation undertaken by Architect and Mechanical Engineer to design 
a suitable structure. Centric Corp., 726 P.2d 1047, where this 
court engaged in extensive discussion of contribution and indemnity, is of no 
assistance to Architect and Mechanical Engineer. The differentiation was 
recognized, "A claim of defense arising out of tort concepts, such as indemnity, 
is not available where the claim of the plaintiff is premised upon contract." 
Id. at 1054. 
See likewise Pan American Petroleum Corp., 586 P.2d  at 1226, where this court 
criticized an attempt to set up a similar dilemma and "confuse the law of torts 
with the law of indemnification." See Barrett, Recovery of Economic Loss in Tort 
for Construction Defects: A Critical Analysis, 40 S.C.L.Rev. 891 (1989); 
Comment, Contribution and Indemnity in California, 57 Calif.L.Rev. 490 (1969); Note, 
The Denial of Economic Damage Recovery to Commercial Parties in Tort: Chemtrol 
Adhesives v. American Manufacturers Mutual Insurance Company, 42 Ohio St.3d 40, 537 N.E.2d 624 (1989), 59 Cincinnati L.Rev. 241 
(1990); and Annotation, Products Liability: Seller's Right to Indemnity From 
Manufacturer, 79 A.L.R.4th 278 (1990). Moreover, the identical duty rule and 
preclusion applies, American Family Mut. Ins. Co. v. Vanman, 453 N.W.2d 48, 51 
(Minn. 1990); City of St. 
Joseph v. KawValley Tunneling, Inc., 660 S.W.2d 26, 30 (Mo. App. 1983); State ex rel. Manchester Ins. & 
Indem. Co. v. Moss, 522 S.W.2d 772, 774 (Mo. 1975).
 
 
[¶86]  We hold that if implied equitable 
indemnity might in some unusual cases be extended to provide contribution to 
damages resulting from breach of contract, this is not the case. In equity, we 
will not here create a non-made implied agreement through which other separately 
contracting parties can request financial reimbursement for damages paid 
following settlement for default in their contract performance.
 
 
VI. 
CONCLUSION
 
 
[¶87]  Pursuit of the rights received by 
assignment from Owner was foreclosed by the expiration of the statute of 
limitations. A lack of contractual relationship, express or implied, also 
justified entry by the district court of its dismissal of the initial and 
amended third-party claims. Consequently, for all claims presented, we affirm 
the district court decision.
 
 
[¶88]  Affirmed. 
 
 
Footnotes
 
 

1 The line up of 
litigants included Sweetwater County Library Board of Trustees (herein described 
as Library Trustee or Owner); Superior Lumber Company as general contractor 
(Contractor); Architect; Mechanical Engineer; and Soil Lab. For most of this 
litigation, Architect and Mechanical Engineer had an antagonistic status, but 
after Owner settled with Contractor, Architect and Mechanical Engineer, a single 
law firm assumed unitary representation of these two concerns and this appeal is 
postured as Architect and Mechanical Engineer as appellants versus Soil Lab as 
appellee.

 
 
For issue and claim 
description, we are presented with Owner's previously non-litigated claim, if 
any, against Soil Lab and then assigned as a breach of contract right to 
Architect and Mechanical Engineer (Assigned Claim); the original third-party 
claims founded on indemnity and contribution (First Third-Party Claims); and the 
1988 amendment to then introduce the third-party beneficiary contentions 
(Amended Third-Party Claims).
 
 

2 In the litigative 
history prior to the partial settlement and consequent assignment, Owner had 
rejected the notion of fault of Soil Lab as a cause of the building damage. That 
contention had been made by Architect and Mechanical Engineer as their 
affirmative defense to the charges of their contractual default. What had been 
for Architect and Mechanical Engineer a pleaded defense after settlement was 
turned into an assigned claim. As we will hereafter relate, it came too late to 
escape a statute of limitations preclusion.

 
 

3 A soil testing lab 
based in Colorado.

 
 

4 Richardson Associates 
is a professional architectural corporation based in Salt Lake City, Utah.

 
 

5 A Wyoming corporation based in Rock Springs, Wyoming.

 
 

6 A site condition is 
not necessarily a defect. It may create a defect if adequate design precautions 
are not taken to compensate. See Chu v. 
Canadian Indem. Co., 224 Cal. App. 3d 86, 274 Cal. Rptr. 20 (1990).

 
 

7 To add amazement to 
the complexity, Architect and Mechanical Engineer, by its own attorneys but in 
the name of Owner, filed a motion under W.R.C.P. 12(b)(6) or, alternatively, for 
summary judgment to dismiss Soil Lab's cross-claim against Owner, which motion 
was based on the assertion of the claim assignment from Owner to Architect and 
Mechanical Engineer.

 
 

8 By virtue of the 
nature of this proceeding, the entire text of the covenant and the assignment is 
attached to this opinion as appendices.

 
 

9 Originally, Soil Lab 
filed cross-appeals challenging dismissal of its counterclaims against Owner and 
Contractor. The cross-appeal was subsequently withdrawn so that at this stage, 
judgments of dismissal of the Library Trustees and Owner are final and they no 
longer continue as party litigants in this proceeding.

 
 

10 The one case cited 
and included, which quotes from two United States Supreme Court decisions, 
provides no guidance in that direction. The case, United States v. Taylor, 144 F. Supp. 15 (E.D.Pa. 1956) and its references to language from United States v. 
Nashville C & St L Ry. Co., 118 U.S. 120, 6 S. Ct. 1006, 30 L. Ed. 81 (1886) 
and United States v. Buford, 
28 U.S. (3 Pet.) 12, 7 L. Ed. 585 (1830), 
fails totally to address the subject with which we are attended. Differing from 
the factual issue we are presented, Taylor determined that, if the appropriate 
statute of limitations had expired before assignment to the government, it would 
not thereafter achieve an immunity by virtue of the claim being vested in the 
government. Assignment of an invalid claim to the government did not recreate 
validity. Likewise, in derivative status, the assignee receives the claim with 
the impedance of statute of limitations burden previously faced by the assignor. 
Seven Sixty Travel, Inc. v. American Motorists Ins. Co., 98 Misc.2d 509, 414 N.Y.S.2d 254 (1979). In that case, the difference between indemnity and 
subrogation or assignment was recognized, in effect, on expiration of the 
statute of limitations. See also Aetna Cas. & Sur. Co. v. Windsor, 353 A.2d 684 
(D.C.App. 1976).

 
 

11 Although Soil Lab did 
work for Contractor during the course of construction, no work is claimed to 
have been furnished to Owner subsequent to the filed report of June 9, 1977. 
Errors, mistakes and insufficiencies in the original report are the basic 
premise of this litigation since Mechanical Engineer and Architect now claim 
they relied on that erroneous data in their own planning and design.

 
 

12 We do not consider 
the issue in this decision to be whether units of government, other than the 
state itself, enjoy a statute of limitations preclusion. That subject will be 
left for other cases in both statutory and common law analysis.

 
 

13

 
 
(a) Civil actions 
other than for the recovery of real property can only be brought within the 
following periods after the cause of action accrues:
 
 
(i) Within ten (10) 
years, an action upon a specialty or any contract, agreement or promise in 
writing;
 
 
(ii) Within eight (8) 
years, an action:
 
 
(A) Upon a contract 
not in writing, either express or implied; or
 
 
(B) Upon a liability 
created by statute other than a forfeiture or penalty[.]
 
 
W.S. 
1-3-105.
 
 

14

 
 
(a) A cause of action 
arising from an act, error or omission in the rendering of licensed or certified 
professional or health care services shall be brought within the greater of the 
following times:
 
 
(i) Within two (2) 
years of the date of the alleged act, error or omission, except that a cause of 
action may be instituted not more than two (2) years after discovery of the 
alleged act, error or omission, if the claimant can establish that the alleged 
act, error or omission was:
 
 
(A) Not reasonably 
discoverable within a two (2) year period; or
 
 
(B) The claimant 
failed to discover the alleged act, error or omission within the two (2) year 
period despite the exercise of due diligence.
 
 
(ii) For injury to the 
rights of a minor, by his eighth birthday or within two (2) years of the date of 
the alleged act, error or omission, whichever period is greater, except that a 
cause of action may be instituted not more than two (2) years after discovery of 
the alleged act, error or omission, if the claimant can establish that the 
alleged act, error or omission was:
 
 
(A) Not reasonably 
discoverable within the two year period; or
 
 
(B) That the claimant 
failed to discover the alleged act, error or omission within the two (2) year 
period despite the exercise of due diligence.
 
 
(iii) For injury to 
the rights of a plaintiff suffering from a legal disability other than minority, 
within one (1) year of the removal of the disability;
 
 
(iv) If under 
paragraph (i) or (ii) of this subsection, the alleged act, error or omission is 
discovered during the second year of the two (2) year period from the date of 
the act, error or omission, the period for commencing a lawsuit shall be 
extended by six (6) months.
 
 
(b) This section 
applies to all persons regardless of minority or other legal 
disability.
 
 
W.S. 
1-3-107.
 
 
Clearly on this 
record, the "discovery" occurred substantially earlier than two years before 
April 4, 1988. Major problems with the building had developed soon after 
completion and all kinds of evaluations, tests and activities had been pursued 
which then came to involve Architect and Mechanical Engineer in 1984 and 
1985.
 
 

15 During construction, 
Soil Lab did testing to determine the appropriateness of the site compacting. 
The scope of the activity is not established, but there appears to have been 
fifteen compaction tests for which reports were submitted by Soil Lab to 
Contractor. That activity cannot be the subject of a claim by assignment from 
Library Trustees. Later, post-construction problem discovery work was done for 
the Library Trustees in about 1984 for analysis of the building defects, but 
that report is also not in the record and again not within the litigation 
parameters of the contractual claim presented here. This case now presented 
involves two days of work done by Soil Lab by oral order and the resulting 
testing report of June 9, 1977, which was provided to Owner and sometime 
thereafter furnished by Owner to Architect at or after an architectural contract 
was entered into for building and design. Architect then furnished a copy of 
Soil Lab's report to its subcontractor, Mechanical Engineer.

 
 

16 We will express no 
opinion whether the two year professional or health care statute could be 
applied dependent upon the license or certified status of the person performing 
the services for Soil Lab, W.S. 1-3-107, since this record neither considered 
that issue nor are there facts available upon which an appropriate decision can 
be made. See however Jilek v. Berger Elec., Inc., 441 N.W.2d 660 (N.D. 1989) and 
Comment, Limitation of Actions - Negligence: North Dakota Malpractice Statute of 
Limitation is Limited in Scope, 66 N.D.L.Rev. 309 (1990). Consequently, the 
statute involved is W.S. 1-3-105 [(a), either (i) or (ii)]. We will not 
determine whether this is an oral or written agreement case either since the 
record is essentially not available to make that decision and the subject was 
neither briefed by the litigants nor considered by the district court. In any 
event, a period of more than ten years has elapsed since the 1977 contracting 
date and performance time before the amended complaint was filed on April 4, 
1988. It is axiomatic that Architect and Mechanical Engineer have the duty to 
furnish a record containing sufficient information for this appellate court to 
determine questions on appeal. Mountain Fuel Supply Co. v. Emerson, 578 P.2d 1351 (Wyo. 1978); Eagleburger v. Emerson Elec. Co., 794 S.W.2d 210 (Mo. App. 
1990). Extensive discovery, which was obviously pursued in pretrial development, 
is not a part of the record. See Uniform Rules for the District Courts 302. No 
specific discovery document designation was apparently ever made for 
consideration with the many dismissal motions filed by the litigants.

 
 

17 The burden of proof 
of exception or excuse from non-application of the statute rests upon the 
plaintiff including discovery, New Amsterdam Casualty Co. v. Industrial Accident 
Commission, 66 Cal. App. 86, 225 P. 459 (1924), while proof of the application of the limitation period is an 
obligation in allegation and proof of the defendant, Olson, 696 P.2d 1294; 51 
Am.Jur.2d, supra, § 484. See W.R.C.P. 8(c).

 
 

18 The scope of the case 
preparation and development can be derived from the exhibits listed in pretrial 
submission material, but the exhibits were not attached to this record for 
consideration of text.

 
 

19 The negligence - 
Uniform Commercial Code Warranty - in the uranium mill building burn up cases of 
Centric Corp. v. Drake Bldg. Corp., 726 P.2d 1047 (Wyo. 1986) and Kirby Bldg. 
Systems v. Mineral Explorations Co., 704 P.2d 1266 (Wyo. 1985), being totally 
dissimilar in concept, provide no guidance here. Kirby Bldg. Systems involved a 
verdict resolved case tried in negligence exploring percentage allocation of 
joint tort-feasor liability under a comparative negligent concept. Centric as 
the contractor and KirbyBuilding as the supplier of the not so 
fireproof material were held jointly and severally liable for most of the 
damage. DrakeBuilding, as a franchisee 
of Kirby, bought out of negligence exposure in the first case for $250,000 and 
then found itself facing a breach of warranty imposition in the second case from 
Centric. The exclusiveness of the joint contribution remedy was consequently 
addressed, rejected and compared to warranty responsibilities. Centric Corp., 
726 P.2d  at 1053.

 
 

20 Waiver of district 
court approval otherwise required at that stage for proper amendment is also 
neither argued nor briefed in present appeal. Waiver of the lack of district 
court approval for amendment objection by intermediate answer would also be an 
affirmative response which in itself could be waived since neither pursued 
before the district court nor argued in this tribunal. Ross v. Texas One Partnership, 796 S.W.2d 206 (Tex. App. 
1990).

 
 

21 By pursuing a 
third-party beneficiary status claim based on Owner's and Soil Lab's 
relationship, Architect and Mechanical Engineer present within that theory the 
same rights which they apparently claim as assignee by usage of the Assigned 
Claim. The statute of limitations preclusion resolves this academic exercise 
whether one can identically and simultaneously claim rights as a third-party 
beneficiary and as an assignee.

 
 

22 This case in all 
content provides unusual and complex perspectives when in 1988, the amended 
third-party complaint was filed adding two new causes of action, raising the 
question of whether the new pleading implanted on an existing record within 
pleading and factual content relates the newly filed contentions equally to the 
scope of the record developed for the causes to which it was added. In order to 
get somewhere out of this morass, we determine that the district court was not 
required to ignore what was already of record in ruling on the motion to dismiss 
for the two new claims even though entirely new litigative proceedings were 
thrust into an existing lawsuit.

 
 
In that context, there 
is a basic document in addition to the scores of pleadings and memoranda. That 
basic document in itself establishes a defined factual record by statement and 
itemization of witnesses and exhibits constituting a joint statement filed 
August 17, 1987 and executed by all attorneys for all parties. The document 
totalled thirty-one pages plus eighteen pages listing proposed exhibits and 
included twenty-seven named witnesses and about 375 exhibits.
 
 
Out of this we can 
tell that Architect was employed mid-year 1977 as was Mechanical Engineer. The 
job was put out for bid in the first half of 1978 based on architectural plans 
dated May 23, 1978 and the construction contract was signed about July 19, 1978. 
Construction started on July 25, 1978. Soil Lab had prepared predesign soil 
tests for Owner dated June 9, 1977, and then provided fifteen compaction tests 
for Contractor commencing August 30, 1978, and continuing to around mid-year 
1979 by a purchase order from Contractor dated July 26, 1978. The substantial 
completion certificate was issued July 21, 1978. On April 14, 1984, Soil Lab 
provided a report to Owner making recommendations for correction of the faulty 
construction problem then observed in the building including movement and 
cracking.
 
 

23 The report for Owner 
of June 1977 had been done before Architect and Mechanical Engineer became 
construction participants. Although there may be Wyoming precedent to the 
contrary, Lane Co. v. Busch Development, Inc., 662 P.2d 419 (Wyo. 1983), 
we recognize the general law that a third-party beneficiary does not have to 
exist in participation earlier or at the same time when the claimed agreement 
establishes the third-party beneficiary status if the intent at that time to 
later provide benefit by class or character can be established by the claimant. 
Anderson v. Rexroad, 175 Kan. 676, 266 P.2d 320 (1954); Flattery v. Gregory, 397 Mass. 143, 489 N.E.2d 1257, 1260 
(1986); RGK, Inc. v. United States Fidelity & Guaranty Co., 292 N.C. 668, 
235 S.E.2d 234 (1977); Restatement (Second) Contracts § 308 (1981). Absence of 
existence may provide evidence of non-benefit intent, but is not dispositive of 
the right to claim. Restatement (Second) Contracts, supra, § 302.

 
 
However, in this case 
as to Contractor's and Soil Lab's work, Architect and Mechanical Engineer cannot 
run a third-party beneficiary theory backwards to seek benefit from the 1978-79 
testing for the design they did a year or so earlier before the testing was 
provided. Consequently, Architect and Mechanical Engineer cannot structure their 
theory as justification from and escape for liability for improper design by 
charging cause to Soil Lab. We then have the issues of this case confined to 
their construction supervision and we discern no adequate pleading in the quoted 
sentence to reach beyond an incidental beneficiary characterization.
 
 

24 Justification is 
found in analysis of the difference between Restatement (First) and Restatement 
(Second) in that Restatement (First) constituted a division of the subject into 
three categories - donee, creditor and incidental beneficiary - while 
Restatement (Second) differently divides claimants into a money payment 
beneficiary, promised performance beneficiary and the incidental beneficiary who 
has no enforceable rights. See Quigley v. General Motors Corp., 660 F. Supp. 499, 506 (D.Kan. 1987); Restatement (Second) Contracts, supra, §§ 302 and 
315.

 
 

25 It is apparent that 
we arguably have a statute of limitations issue here also if professional 
services were involved for two years - or oral agreement eight years (1977 to 
1985). That issue, barely pleaded at best and not argued at all, will not be 
further considered.

 
 

26  Contribution and 
indemnity are two doctrines which are used as tools to reach the same goal: a 
fair allocation of the ultimate burden of a tort recovery among those legally 
responsible. Once the victim has been compensated, who should, in all fairness, 
be made to pay? * * *

 
 
* * * * * *
 
 
Judge Learned Hand 
stated that, "[I]ndemnity is only an extreme form of contribution." Indemnity 
allows one who has discharged a common obligation to recover the entire amount 
he has paid from the party primarily liable. In contrast to contribution, it 
provides for shifting the total burden from one party to another. Indemnity can 
be conveniently broken down into three general categories: Express contractual 
indemnity, implied contractual indemnity (implied-in-fact indemnity), and 
noncontractual indemnity (implied-in-law indemnity).
 
 
Comment, Contribution 
and Indemnity in California, 57 Calif.L.Rev. 490, 491-92 (1969) 
(footnotes omitted and quoting Slattery v. Marra Bros., 186 F.2d 134, 138 (2nd 
Cir. 1951)).
 
 
APPENDIX

 
 
EXHIBIT B, Page 
1

 
 
EXHIBIT B, Page 
2

 
 
EXHIBIT B, Page 
3

 
 
 
 
EXHIBIT C, Page 
1

 
 
EXHIBIT C, Page 
2

 
 
EXHIBIT C, Page 
3

 
 
EXHIBIT C, Page 
4