Bellon Wrecking & Salvage Co. v. David Orf, Inc.

Citations: 983 S.W.2d 541; 1998 Mo. App. LEXIS 1769; 1998 WL 708855Docket: 72838

Court: Missouri Court of Appeals; October 13, 1998; Missouri; State Appellate Court

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A consolidated appeal involves David Orf, Inc. d/b/a Orf Construction and Safeco Insurance Company of America (appellants) challenging several judgments confirming an arbitration award in favor of Bellon Wrecking, Salvage Company (respondent). The Missouri Court of Appeals, Eastern District, addressed this case on October 13, 1998, with subsequent motions for rehearing and transfer denied in December 1998 and February 1999, respectively. The appeal stems from a January 6, 1998 judgment by Judge Robert L. Campbell, which corrected a prior order from December 23, 1996, linked to an earlier decision by the court. 

The background includes Bellon's initial lawsuit filed in October 1993 for a mechanic's lien and damages related to work at a construction project, which led to a motion to stay the case pending arbitration. Mediation efforts involving Orf and Sverdrup were successful, but those involving Bellon, Orf, and Safeco were not, resulting in arbitration proceedings in St. Louis. Following a dismissal for lack of prosecution in November 1996, the arbitrator issued a favorable award for Bellon. Bellon subsequently sought to set aside the dismissal and enforce the arbitration award. The appellants contested the trial court's jurisdiction for the December 23, 1996 order, claiming it was entered without proper hearings and before the expiration of the statutory period for challenging the award. The court's rulings included partial affirmations, reversals, remands, and dismissals of various aspects of the appeals.

On November 25, 1997, this Court dismissed Orf I due to lack of jurisdiction, determining that the trial court's order was not a final judgment as it did not resolve all issues for all parties or include a finding of 'no just reason for delay' per Rule 74.01(b). Following the dismissal, Judge Campbell amended his order on January 6, 1998, to address all remaining defendants and labeled it a 'final judgment.' Bellon initiated garnishment proceedings against Orf for the December 23, 1996 judgment amount plus interest, which led to the trial court ordering Commerce Bank to transfer $82,951.00 to Bellon.

After this Court's ruling in Orf I, Orf and Safeco filed a Motion to Set Aside Garnishment, which was denied. They appealed both the trial court's order of December 23, 1996 (amended January 6, 1998) and the denial of their Motion to Set Aside Garnishment. Their arguments included: (1) the trial court lost jurisdiction thirty days post-dismissal; (2) it set aside the dismissal without a required hearing (Rule 75.01); (3) it entered judgment on the arbitration award without allowing a statutory challenge period; (4) it ruled on the arbitration award despite improper service; (5) it misapplied venue; and (6) it denied the garnishment motion based on the invalidity of the judgment.

In a separate matter, Orf and Safeco filed two suits to vacate, modify, or correct the arbitration award—one in St. Louis City and another in St. Louis County—after Judge Campbell had confirmed the award and they had appealed. They contended that the arbitrator exceeded his authority and did not follow statutory procedures. Bellon counterclaimed for confirmation of the arbitration award and sought summary judgment, arguing the binding nature of the arbitration and the lack of material disputes. On June 3, 1997, Judge Clifford granted Bellon's Motion for Summary Judgment, confirming the award plus interest.

Orf and Safeco appeal a trial court judgment in County II, arguing that the court erred in granting summary judgment for Bellon and confirming the arbitration award. Their main points include: (1) the trial court lacked jurisdiction due to the existence of a related case (Orf I) involving the same parties, facts, issues, and relief; (2) similar jurisdictional issues arose from a separate pending action in the Circuit Court of the City of St. Louis; and (3) there were unresolved material facts regarding the arbitration proceedings, specifically that the arbitrator denied Orf and Safeco the right to cross-examination and exceeded his authority.

On February 19, 1997, Orf and Safeco initiated a lawsuit against Bellon in the St. Louis City Action, but Bellon was not served until May 30, 1997. Following service, Bellon filed an Answer and Counterclaim to confirm the arbitration award and a Motion for Summary Judgment based on res judicata, asserting that the June 6, 1997, summary judgment in County II barred the St. Louis City Action. Orf and Safeco sought to stay proceedings and dismissed Bellon's Counterclaim on abatement grounds, claiming Bellon’s counterclaim overlapped with County I. 

On November 19, 1997, the trial court, led by Judge Bush, denied Orf and Safeco's motions to stay, granted summary judgment for Bellon, dismissed Orf and Safeco’s claim to vacate the arbitration award on res judicata grounds, and deemed Bellon’s Motion for Summary Judgment moot following the dismissal of the counterclaim. 

On appeal, Orf and Safeco assert errors in the trial court's jurisdiction and claim that genuine issues of material fact exist regarding the arbitration process. Additionally, Orf and Bellon contend that the trial court improperly set aside a prior dismissal for failure to prosecute, arguing it lost jurisdiction to amend the judgment after thirty days, failed to conduct a required hearing, and did not allow the required ninety days for parties to seek vacation or modification of the arbitration award. The law of the case doctrine applies, asserting that appellate court decisions remain binding in subsequent proceedings involving the same issues and facts.

An appellate court ruling on a first appeal establishes the law of the case, preventing reexamination of previously decided issues in subsequent proceedings. In the case of Orf I, the court ruled that the trial court's dismissal lacked jurisdiction, implying that Judge Campbell could set aside this dismissal and enter a judgment on the arbitration award. Subsequent appeals cannot revisit issues adjudicated in Orf I, including matters that could have been raised at that time. 

Orf and Safeco contended that the trial court incorrectly ruled on the arbitration award due to improper service, but this issue could have been raised in Orf I, thus it is barred in the current appeal. They also argued that venue was misassigned, claiming it should have been in St. Louis City instead of St. Louis County. However, since venue is determined at the time the case is initiated, and it was properly established in St. Louis County, the court found that this argument was not previously presented and therefore is not considered now. While venue must align with statutory guidelines, it can be waived by the party entitled to assert it.

Bellon did not initiate a new action in St. Louis County Circuit Court to confirm the arbitration award but returned to the original court, where venue was not contested. Orf and Safeco, by filing a Motion to Stay Pending Arbitration, implicitly consented to this venue, thus waiving any objections. In their appeal in County I, they contended the trial court erred in denying their Motion to Set Aside Garnishment on the grounds that the underlying 'judgment' for the garnishment was not valid or final. The court concurred, emphasizing that a valid garnishment requires a valid judgment and execution, citing relevant case law. Since there was no final judgment prior to the trial court's amendment on January 6, 1998, the garnishment issued in April 1997 was invalid. Consequently, the court reversed the trial court's denial of the Motion to Set Aside Garnishment and remanded with instructions to quash the garnishment. In County II, Orf and Safeco argued that the trial court lacked jurisdiction over Bellon's counterclaim due to the overlap of parties, facts, issues, and relief sought, as these were already pending in County I.

Rule 55.27(a) and Section 509.290.1, RSMo 1994, allow for the presentation of specific defenses via motion, including the defense of another pending action in Missouri involving the same parties and cause of action, known as abatement. This doctrine dictates that if a claim shares the same parties and subject matter as a previously filed action, the latter should be dismissed in favor of the first. The court that first receives the claim gains exclusive jurisdiction until the matter is fully resolved. 

In this case, Bellon's Counterclaim, which sought confirmation of an arbitration award, was found to involve the same subject matter, parties, and relief as a prior action (County I) pending before the court. The trial court, despite this, heard and granted summary judgment on Bellon's counterclaim. According to established law, once a court of competent jurisdiction has taken on a case, its authority remains until the case is resolved, preventing interference by courts of concurrent jurisdiction. Consequently, the trial court in County II lacked jurisdiction over Bellon's counterclaim due to the abatement doctrine, rendering its judgment void. 

As such, the appellate court's role was limited to confirming this invalidity and dismissing the appeal without addressing other claimed errors from Orf and Safeco. Additionally, regarding the St. Louis City Action, which was the second action filed but third to be heard, the judgment by Judge Julian L. Bush denied motions from Orf and Safeco, granted Bellon's summary judgment on res judicata grounds, dismissed Bellon's Counterclaim, and deemed moot Bellon's motion regarding the arbitration award.

Orf and Safeco partially appeal a judgment, contending that (1) their claims are not barred by res judicata as County II lacked proper jurisdiction, and (2) summary judgment is inappropriate due to genuine issues of material fact regarding arbitration proceedings. Mootness is established as a preliminary concern in appellate review, indicating that a case is moot if a judgment has no practical effect on an existing controversy. A court may dismiss a case for mootness on its own initiative, especially if subsequent events alter the parties' positions significantly, rendering any judgment hypothetical. In this case, a judgment on the arbitrator's award was entered in County I on January 6, 1998, which has been affirmed. Consequently, the issues from the St. Louis City Action, related to the arbitration proceedings, are deemed moot, leading to the dismissal of the appeal in that matter. The court affirms the judgment in County I, reverses the trial court's denial of Orf and Safeco’s Motion to Set Aside Garnishment, and remands with instructions to quash the execution and garnishment, while dismissing the appeal in County II and the St. Louis City Action.

James R. Dowd, P.J. and Crahan, J. concur. County II is addressed first despite being filed after the St. Louis City Action due to its earlier proceedings. Orf and Safeco filed the same suit in both courts to resolve a venue issue. Under Section 435.435 RSMo 1994, venue for confirming an arbitration award is appropriate in the county where the arbitration occurred, which was St. Louis City. However, County I was pending in St. Louis County and stayed at Orf and Safeco's request during arbitration, leading to Bellon's argument that they waived venue by staying County I. The doctrine of abatement states that when multiple suits regarding the same matter are pending, the court with exclusive jurisdiction is the one where the case was first filed. A case is considered "pending" upon the filing of the petition. Section 508.040 specifies that suits against corporations can be initiated in the county where the cause of action arose or where the corporation maintains an office. The cause of action from this case originated at a construction project in St. Louis County, thus making venue proper there for the mechanic's lien suit. The only issue reversed is the garnishment, which was executed months prior to the final judgment.