Goodyear Tire & Rubber Co. v. Jones

433 F.2d 629

• Court: Court of Appeals for the Tenth Circuit
• Decided: October 9, 1970
• Docket: No. 111-68
• Status: Published

Opinions

HOLLOWAY, Circuit Judge.

The Memorandum of Decision entered by the District Court, 317 F.Supp. 1285, and its subsequent rulings and judgment held: (1) that appellants Walters and Post were not entitled to a labor lien for $5,500 lump sums payable to each of them at the end of a construction project; (2) that they were not entitled to recover such sums on a payment bond covering the work of their employer; and (3) that they were not entitled to summary judgment against their employer for other wages and a lien therefor on the interpleaded fund. We affirm the rulings of the District Court on Kansas law as to issues (1) and (2), on which a final judgment was entered under Rule 54. For reasons stated below we conclude that issue (3) is not properly before us and do not reach it.

We conclude that the facts are not in material dispute and that summary judgments were proper on issues (1) and (2). The controversy turns largely on the Kansas labor lien statute, the payment bond of the employer and the surety-appellee Universal, and the written agreement for the $5,500 payments and the circumstances surrounding it, which are not in material dispute. Detailed facts concerning the controversy and the interpleader action giving rise to this appeal are stated in the District Court’s Memorandum and are not repeated. The principal facts sufficient for discussion of the contentions on appeal follow.

Appellee Jones Electric Machinery Company was awarded a contract in 1966 for work on an expansion project for Goodyear at its Topeka plant. The Jones work force included appellants Walters and Post, who were foremen and electricians and members of the International Brotherhood of Electrical Workers Union. They told Jones that there had been abuses and threats by the union and prepared to leave the job. Jones discussed terms under which they would stay on the job until the end of the project. The upshot of the discussions was a written agreement providing for a lump sum payment of $5,500 to each of them, described as “an additional wage,” provided they would continue their employment to the end of the project.¹ Without this agreement, they would not have worked on.

About a year later when the project was completed, the lump sum payments were not made and lien claims were filed by Walters and Post, whose procedural regularity is not challenged. The enforcement of the lien claims was sought by Walters and Post by answers and counterclaims in the interpleader action.

First, appellants Walters and Post argue that the District Court erred in rejecting their claims under the Kansas statutes providing for liens and priorities for labor and material, K.S.A. 1969 Supp. 60-1101 and 1103.² As appellants point out, the agreement described the payments as “an additional wage.” However, the undisputed facts showed that a basic wage rate had been agreed on with Walters and Post, and that the $5,500 payments were separately promised to be payable at the end of the project, which was a year later. Moreover, as the District Court pointed out, the lien principle rests in a sense on unjust enrichment based on the value resulting from work. See Adair v. Transcontinental Oil Co., 184 Kan. 454, 464, 338 P.2d 79, 87. The idea furnishes a reasonable basis for holding the lump sum payments not to come within the lien statute. And as the District Court also mentioned, the Kansas laws are strictly construed in determining the items for which the statute gives a lien. Bridgeport Machinery Co. v. McKnab, 136 Kan. 781, 786, 18 P.2d 186, 188; Potter v. Conley, 83 Kan. 676, 112 P. 608. It was concluded that the $5,500 lien claims were not “* * * within the provisions and purposes of the lien law as construed and interpreted by the Kansas courts.”

We find no Kansas decision on similar circumstances. In applying the State law to the facts, we cannot say that the ruling under the lien statute was clearly erroneous, and accept it as a reasonable interpretation of Kansas law. In such circumstances this Court does not disturb the interpretations by the District Court on the law of its State. Brunswick Corporation v. J & P, Inc., 424 F.2d 100 (10th Cir); Teague v. Grand River Dam Authority, 425 F.2d 130 (10th Cir.); Parsons v. Amerada Hess Corporation, et al., 422 F.2d 610 (10th Cir.); Fulton v. Coppco, Inc., 407 F.2d 611 (10th Cir.).

Secondly, appellants Walters and Post contend that they were entitled to recover on the payment bond of their employer and the surety, Universal. The obligation of the bond was for payment “* * * for all labor and material used or reasonably required for use in the performance of the contract * * * ” ³ Again the question of State law is whether the lump sum payments were for labor within the meaning of the bond, or were a separate consideration based on other circumstances. Appellants point to the general rule, followed also in Kansas, construing such instruments against the party drawing them.

We again find no controlling Kansas decision. The District Court’s ruling points out that the Goodyear-Jones contract is incorporated by reference in the bond, and that the surety had a right to look to the contract as to the labor and materials used or reasonably required for use in the performance of the contract. There is a reasonable basis for the conclusion, as a matter of Kansas law, that the claims were not for labor in the sense used by the parties. We cannot say that the ruling was clearly erroneous and accept it under our rule cited above.

Lastly, appellants argue that the District Court erred in denying summary judgment on their claims against appellee Jones for wages earned by them after the project was completed,⁴ and for a lien therefor on the interpleaded fund. However, the only ruling on the issue was denial of a motion for summary judgment for such relief. The District Court stated that facts before the Court at that point did not permit granting so extensive a judgment. There is no appealable judgment that denied the relief sought, for this the District Court did not do. Since the ruling only denying summary judgment is not appealable, Heron v. City and County of Denver, 317 F.2d 309 (10th Cir.); Alart Associates, Inc. v. Aptaker, 402 F.2d 779 (2d Cir.), we conclude that the third issue is not properly before us. The final judgment entered did not decide issue (3), and disposed of and directed entry of final judgment under Rule 54 (b) only on issues (1) and (2), which rulings we affirm.

Affirmed.

FAHY, Senior Circuit Judge.

I concur. The Tenth Circuit cases cited by Judge Holloway admonish us that we are not to depart from the District Court’s construction of the Kansas statute unless it is clearly erroneous, and this cannot be said to be the situation in this ease. Even were the rule governing our review less confining where the question is one of law — which I might well conclude were I free to do so— I think we should uphold the District Court’s construction of the Kansas lien statute as applied to the facts of this case.¹ I agree also that the bond here is to be construed to give no broader coverage than the lien statute itself.

“NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION is such that if the Principal shall promptly make payment to all claimants as hereinafter defined, for all labor and material used or reasonably required for use in the performance of the Contract, then this obligation shall be void; otherwise it shall remain in full force and effect, subject, however, to the following conditions: * * * 11

1 . The written agreement read as follows :

“TO THOSE CONCERNED:

“WHEREAS, my two first foremen on the Goodyear job, Bruce Walters and Duane Post, are experiencing a great deal of difficulty with their Union because of this foremanship, and

“WHEREAS they are under enormous pressure to desert me and find employment elsewhere, and

“WHEREAS, their presence is an absolute essential to the project’s completion and these two men by their continued loyalty to me are seriously jeopardized in future employment opportunities, I do now on this twentieth day of September, Nineteen Hundred Sixty-six (Sep. 20, 1966) promise and contract to pay upon this job’s completion an additional wage in the amount of Fifty-five Hundred Dollars ($5500.00) EACH to Duane Post and Bruce Walters, PROVIDED, that they have continued in my employment to the end of the project.

“/s/ Ralph Jones”

2 . The Kansas statutes for labor and material provide in pertinent part for liens and priorities in K.S.A.1969 Supp. 60-1101 and 1103:

“60-1101. Liens and priorities. Any person furnishing labor, equipment, material, or supplies used or consumed for the improvement of real property, under a contract with the owner or with the trustee, agent or spouse of the owner, shall have a lien upon the property for the labor, equipment, material or supplies furnished, and for the cost of transporting the same, and the lien shall be preferred to all other liens or encumbrances which are subsequent to the commencement of the furnishing of such labor, equipment, material or supplies. When two or more such contracts are entered into applicable to the same improvement, the liens of all claimants shall be similarly preferred to the date of the earliest lien of any of them.” “60-1103. Liens of subcontractors and others, (a) Procedure. Any subcontractor or other person furnishing labor, equipment, material or supplies, used or consumed at the site of the property subject to the lien, under an agreement with the contractor, or a subcontractor of the contractor, may obtain a lien for the amount due in the. same manner and to the same extent as the original contractor * *

3 . The condition of the bond by Jones and appellee Universal Surety Company provided as follows:

4 . Appellants Walters and Post point out that Jones admitted by deposition that sucb work was done at agreed rates ana not paid for.

1 . In addition to the facts mentioned by Judge Holloway bearing upon the question whether the extra payments agreed to be made by Jones to appellants were wages for labor within the meaning of the lien statute, I note that the payments referred to were not part of the formula by which the contract price assumed by Goodyear was calculated, and Goodyear was not billed by Jones for these payments.