Court Opinion

ID: 7123949
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:57:39.82926+00
Date Added: 2024-06-11T16:14:12.043020
License: Public Domain

Davis, J.:
L.R. Foy Construction Company, Inc., (Foy) a general contractor, brought this action against Professional Mechanical Contractors (PMC), its subcontractor, and PMC’s surety, the Universal Surety Company, seeking both compensatory and punitive damages for PMC’s alleged negligence in performing its contractual duties. The trial court granted PMC summary judgment, holding that Foy’s claims were barred by a final arbitration award resolving all contractual disputes between Foy and PMC. We affirm.
In the spring of 1983, Foy contracted with the City of Hutchinson to renovate and expand the Hutchinson Waste Water Treatment Plant (the “project”). Foy subcontracted much of the piping and mechanical work on the project to PMC. Article II of the Foy-PMC subcontract provided:
“All disputes and claims of every kind whatsoever, shall be submitted to arbitration in accordance with the provisions as contained in the by laws and rules of the American Arbitration Association for Construction.”
Article XII of the subcontract required PMC to furnish a bond for performance and for payment of labor and material. PMC obtained its bond from the Universal Surety Company.
PMC began work on June 6, 1983. Because of Foy’s nonpayment of construction progress payments, PMC stopped work on March 18, 1985. On April 10, 1985, PMC filed a demand for arbitration against Foy. C. Robert Bell, a Wichita attorney, Harry R. Rutledge, a Hutchinson architect, and Robert E. Smith, a Wichita architect, were appointed as arbitrators in May 1985.
Foy answered PMC’s arbitration demand and filed a counterclaim against PMC. Foy alleged that it had incurred more than $600,000 in “expenses, damages, and delays because PMC failed to do its work in a good workmanlike manner.” Foy also alleged that it was “entitled to punitive damages for [PMC’s] willful and *190wanton actions in the conduct of its work and attempts to cover up deficiencies in its work.” In the alternative, Foy alleged that PMC had “negligently and grossly negligently [sic] conducted its work,” and that Foy was therefore entitled to $600,000 in compensatory damages and $500,000 in punitive damages.
On July 15, 1985, Foy filed suit on the performance bond against Universal Surety in Reno County. Foy acknowledged that the PMC-Foy dispute had been “duly submitted to arbitration which is now pending before the American Arbitration Association,” but it took the position that an action against the surety was proper since the surety was not a party to the arbitration proceedings. Universal replied that it was not a party to arbitration because its interests were identical to PMC’s. It admitted that under Kansas law, it would be bound by the result of the PMC-Foy arbitration. Universal moved to stay the action against it until the PMC-Foy arbitration had been completed. The record reveals no further activity in this case until August 1987.
On December 18, 1985, before the arbitrators had conducted any evidentiary hearings, Foy filed an action against PMC, the American Arbitration Association, the three arbitrators, and three other subcontractors on the project. Foy alleged that its counterclaim in the arbitration proceeding
"claims, among other claims, damages for the negligent acts of PMC, the grossly negligent acts of PMC and punitive damages and that the other subcontractors have indicated to plaintiff that they will claim damages against the plaintiff [Foy] because of the various actions and non-actions of PMC, but that the AAA and its arbitrators are unable to hear such claims, have disallowed their presence in the arbitration proceedings, thus preventing the plaintiff from having a full and complete hearing on all issues involving PMC, the sureties on the project and the other subcontractors on the Project.”
Foy also repeated its allegations in the arbitration proceeding that PMC had “failed to do its work in a good workmanlike manner,” or alternatively, that PMC had “negligently or grossly negligently [sic] conducted its work,” and that Foy was entitled to $600,000 in compensatory damages and $500,000 in punitives. Foy sought a permanent injunction against arbitration, but otherwise asserted no claims against the other defendants. A temporary restraining order was issued the same day.
On January 2, 1986, PMC filed a motion to vacate the restraining order, to compel arbitration, to dismiss, and to assess *191sanctions. At a hearing on January 10,1986, the court vacated the restraining order and ordered Foy back to arbitration.
On January 31, 1986, PMC filed its answer to Foy’s petition. PMC alleged that it had ceased work because Foy had breached the contract by refusing to pay PMC over $260,000 in progress payments due and owing. PMC also denied Foy’s allegation that the arbitrators were unable to address all of the issues in the PMC-Foy dispute, stating:
“The arbitration panel has agreed to address all issues raised in PMC’s arbitration demand and Foy’s counterclaim, except for the question of punitive damages, which Foy has waived by agreeing to arbitrate all claims and disputes between the parties.”
The arbitrators held evidentiary hearings on the PMC-Foy dispute on January 20-23, January 31, and February 1, 1986. On February 28, 1986, the arbitrators rendered a decision in favor of PMC against Foy and its surety. The arbitrators found:
“2. The scope of the work to be undertaken by PMC is set forth as clearly as may be in the sub-contract and the attachment thereto of PMC, however, there existed considerable confusion at all times in the mind of all the FOY witnesses and of the engineer from WILSON & COMPANY, as to the exact scope of the work contracted to be performed by FOY.
“3. The Arbitrators find that there was no effective scheduling of the work by FOY ....
“4. The Arbitrators find that the applications for payment by PMC were duly submitted at the times and in the amounts as set forth on Plaintiffs Exhibit 8 and that the payments as set forth on said Schedule were received at said time. The Arbitrators further find that payments were made by the owner to FOY, which included allowance for said amounts, but which were not transmitted by FOY to PMC in a timely fashion.
“7. . . . The Arbitrators specifically find that the witness, L.R. FOY, estimate of the amount of delay caused by the activities of PMC overall is inherently incredible and unsupported by the evidence and there is no other means provided by which the Arbitrators can calculate any delay days attributable to any materials slowness or any other activity on the part of PMC.
“8. The Arbitrators specifically find that the testimony of the witness, COOK [Foy’s project supervisor], was confusing and so full of demonstrable errors and omissions as to be unreliable and totaling [sic] lacking in credibility and probative value.
“9. The Arbitrators find that the testimony of the witnesses, LYNE, MOORE and JONES, was confusing and self contradictory concerning the supervisory authority and supervision on this project and the authority for co-ordination of this project. The Arbitrators find that such confusion was typical of all levels of FOY management in connection with supervision and co-ordination of this entire project.
*192“10. The Arbitrators find that the contract was intended by the parties to be divisible both at the contract and the subcontract level by virtue of the provisions for periodic progress payments.
“11. The Arbitrators find that by February 2nd, 1985, PMC had substantially performed ....
“13. The Arbitrators find that PMC was entitled to withdraw from the project on Monday, March 18, 1985, by reason of FOY’S non-payment of progress payments over-due at that time all in violation of the subcontract between the parties.
“16. The Arbitrators find that the total contract price together with the change orders was $754,393.00, from that should be subtracted the amount of $473,851.00, which represented the total amounts paid by FOY prior to this Arbitration Hearing. The next item to be subtracted from the contract balance is the cost to complete which the Arbitrators find to be $30,000.00, including testing and punch list items and warranty work. . . . The back charges of $27,854.59, substantiated by Plaintiffs Exhibit 98 should be altered by the addition of $2,365.00 for asphalt and concrete pavement and concrete curb replacement in accordance with the contracts and agreements of the parties making the total figure $30,219.59 for allowable back charges. . . . The Arbitrators find that the total amount due after offsets and credits set forth above from FOY to PMC as of January 20, 1986, was $198,661.29, to that should be added the interest at 10% to March 1, 1986, in the amount of $28,314.88 making a total due as of March 1, 1986, of $226,976.17.
“NOW, THEREFORE, the Arbitrators award to PMC the amount of $226,976.17, as of February 20, 1986, from the responding parties to this Arbitration.
“This Award is in full settlement of all claims and counter-claims submitted to this Arbitration.”
The arbitrators later increased the award to PMC by $5,805.52 to correct an error in calculating the amount of the award.
On May 29, 1986, the Sedgwick County District Court confirmed the arbitration award in favor of PMC and entered judgment against Foy and its surety for $238,457.74, plus interest. Neither Foy nor its surety appealed from this judgment.
On August 11, 1987, PMC filed a motion in Reno County District Court to consolidate Foy’s action against Universal with Foy’s action against PMC. PMC and Universal also filed a motion for summary judgment in the consolidated case on the grounds of issue preclusion and claim preclusion.
On November 30, 1987, the trial court issued a memorandum opinion granting judgment in PMC’s favor. The court stated:
*193“The court adopts the uncontroverted statements of fact of defendant as its facts in this matter. The plaintiff attempts to relitigate the facts of the subcontract at issue here by stating that the tort claims for negligence survived the arbitration proceeding. The duties of the defendant arose under the contract that existed between the plaintiff and defendant. Those duties were fully arbitrated in the 6 day hearing that led to the arbiters’ award that was approved by the Sedgwick County Court.
“Plaintiff is precluded by issue preclusion from relitigating that matter in this court The court adopts the legal reasoning set forth in defendants’ brief as if fully set out herein.”
On January 28, 1988, the court adopted a detailed journal entry prepared by PMC.
Jurisdiction
Before reaching the merits, we pause to consider PMC’s argument that we lack jurisdiction to decide this appeal.
Although the trial court issued an opinion in PMC’s favor on November 30, 1987, judgment was not entered until the journal entry was filed on January 28, 1988. K.S.A. 60-258. This two-month delay came about because Foy objected to PMC’s proposed journal entry and proposed additional findings of fact. After the journal entry was approved and filed, Foy filed a motion for a new trial. This motion essentially repeated the arguments Foy had made in its earlier motions. The trial court denied this motion and imposed sanctions against Foy for filing it. Within 30 days after this motion was denied, Foy filed its notice of appeal.
PMC argues that Foy’s notice of appeal was not timely filed. It admits that under K.S.A. 60-2103(a) a timely motion for new trial tolls the time for filing an appeal; however, it argues that we should create an exception to this statutory rule when a post-trial motion duplicates a motion previously filed. PMC cites no authority in support of such an exception and we decline to recognize such an exception here. Foy’s appeal was timely filed according to the literal provisions of K.S.A. 60-2103(a). We, therefore, have jurisdiction to decide this appeal.