Redding & Company, Inc. v. Russwine Construction Corporation, Appellant, 463 F.2d 929 (D.C. Cir. 1970)

District of Columbia Circuit.

Mr. Louis P. Robbins, Washington, D. C., with whom Mr. Arnold L. Yochelson, Washington, D. C., was on the brief, for appellant.

Mr. Mark P. Friedlander, Washington, D. C., for appellee. Mr. Mark P. Friedlander, Jr., Washington, D. C., was on the brief for appellee.

Before McGOWAN and TAMM, Circuit Judges, and A. SHERMAN CHRISTENSEN,^*  U. S. Senior District Judge for the District of Utah.

CHRISTENSEN, Senior District Judge:

This appeal in a suit to foreclose a mechanic's lien involves the propriety of a summary money judgment against a defendant who had failed to comply with an interim order of the district court and whose pleadings had been stricken and default entered, and the effect of subsequent determination among the remaining defendants that the amount secured by the lien was substantially less than the money judgment theretofore entered against the defaulted defendant. Some unravelling of the procedural tangle out of which this problem emerges seems necessary.

On or about September 2, 1965, the appellee, Redding & Company, Inc., hereinafter Redding, filed notice of intention to hold a mechanic's lien against an office building in northwest Washington. Appellant, The Russwine Construction Corporation, hereinafter Russwine, had been the prime contractor, Redding its subcontractor. Thereafter, Redding timely filed a complaint against the owners of the fee, the owners of a 99-year leasehold interest, certain trustees under deeds of trust, and Russwine, seeking enforcement of its lien. Whether the complaint also sought personal judgment against Russwine as the prime contractor is disputed.

During the course of preliminary proceedings the district court recognized that Russwine had drawn down money from the construction lender through false representations that its prime contract was 100% completed. Russwine was ordered by the court to deposit the sum of $24,699.80 into the registry to await further action. This Russwine failed to do; instead it perfected an interlocutory appeal to this court¹  and also filed here a petition for a writ of mandamus or in the alternative a writ of prohibition.²  The appeal was dismissed and the petition denied by this court. In a memorandum it was noted that the money ordered deposited was obtained through misrepresentation, that this itself was a ground for refusal of a writ and that in any event it was within the district court's jurisdiction to enter such an order.³  Upon Russwine's continued failure to comply, Redding filed a motion to strike Russwine's pleadings and to enter judgment for itself. The district court on January 31, 1968, ordered that Russwine's answer be stricken, that its counterclaim be dismissed, and that its default be entered. Several months later Redding renewed its motion for judgment on the pleadings or for summary judgment. By order dated June 28, 1968, such summary judgment, in the absence of any issue between the parties on the record in view of the stricken pleadings, was granted for the amount claimed in the complaint, $62,184.70, with interest and costs (without reference to the claimed lien against the property). This judgment was certified for interlocutory appeal pursuant to 28 U.S.C. § 1292(b), and the district court further ordered that execution be stayed upon filing of a supersedeas bond. Russwine furnished no bond but filed in this court a timely petition for leave to appeal from the interlocutory order claiming that the impropriety of entering and enforcing a personal judgment by default prior to final adjudication of all lien claims warranted interlocutory review. The petition was denied.⁴ 

In September, 1968, Redding instituted attachment proceedings to satisfy its judgment against Russwine. The latter again petitioned this court for the issuance of a writ of mandamus or prohibition.⁵  Such petition was denied by order dated October 18, 1968, which observed that "no judgment has yet been entered in this case upon which execution may be made. . . ."⁶ 

In the meantime, Russwine had filed in the district court a motion for stay of execution on the judgment pending disposition of the petition for writ of mandamus or prohibition which was held under advisement by the district court until this court ruled. The district court subsequently denied the motion for stay. Russwine filed a motion for reconsideration of this denial and expressly requested the court below to consider the language, quoted in the margin, from the October 18, 1968, order of this court. Alternatively, appellant requested the district court to certify its order denying a stay under Rule 52(b) (sic).⁷  The motion was opposed by Redding and summarily denied by the district court without argument or opinion, whereupon this appeal and a petition for mandamus⁸  with particular reference to the question of the stay were filed. The present appeal will be treated as being from a final order involving the validity of the summary judgment despite the record indication that it was directed primarily, if not exclusively, to the refusal of the district court to stay execution⁹  which has now become moot.¹⁰ 

The case against the other defendants, including the owner of the 99-year leasehold interest, went forward for trial. Findings of fact and conclusions of law were made by the trial court and a mechanic's lien recognized, subject to a determination of amounts by an auditor consistent with the findings of the trial court.¹¹ 

Prior to hearing by the auditor, a consent judgment was entered by the court on May 1, 1970, fixing the amount of Redding's mechanic's lien against the 99-year leasehold interest at $33,000. This amount according to appellee's brief has been paid to it. Redding also has conceded that Russwine is entitled to credit for this payment as against the judgment under review.

The issues of the case between the other parties having been decided and the much agitated questions of execution having become moot according to its concession during oral argument, Russwine now stands upon the single contention that the order of the district court granting summary money judgment against it was invalid.

Particularly it is argued that judgment was improperly entered on default before the complete adjudication of the lien action, and that recovery against it in any event should be limited to the amount finally determined as a lien against the interests of the other defendants. Reliance is placed primarily upon Frow v. De La Vega, 82 U.S. (15 Wall.) 552, 21 L. Ed. 60 (1872).¹² 

Whether the doctrine of Frow upon its facts would have continuing validity despite the intervention of the Rules of Civil Procedure and related modern procedural concepts need not be explored here. That action and the case at bar are essentially different in nature and posture. Redding's claim against Russwine was ex-contractu and went beyond the foreclosure of lien interests as against the other parties. The liability of Russwine was not dependent upon final adjudication of those claimed lien interests. While with respect to the lien foreclosure aspects of a suit to foreclose a mechanic's lien the D.C.Code contemplates the possibility of deficiency judgments against those primarily liable,¹³  the action as one in equity¹⁴  does not compel initial recourse to the property nor establish such recourse in the first instance as part of any exclusive remedy against a general contractor on the part of a subcontractor.¹⁵  Accordingly, we reject appellant's argument that the doctrine of Frow precluded entry of judgment against it prior to the final determination of the case against the other defendants. We also find no merit in appellant's related contention that since the suit was one to foreclose a lien against real property no judgment could lawfully be entered against any party except for a deficiency after foreclosure.¹⁶ 

We hold that the personal judgment against Russwine, being supported contrary to Russwine's contention by the allegations of the complaint,¹⁷  not being dependent upon the security or extent of any lien, being premised upon a clear violation of a significant court order and the entry of an unquestioned default,¹⁸  being within the court's jurisdiction, and not being arbitrary or capricious under the circumstances, was and is valid. The fact that the subsequent judgment foreclosing Redding's lien against the owners of the leasehold interest was in a lesser amount did not automatically reopen or invalidate Redding's judgment against Russwine, any more than did the fact that no lien at all was recognized in the final judgment as against the owner of the fee.¹⁹ 

The remaining parties in agreeing to the final consent judgment could have taken cognizance of the summary judgment against the prime contract despite the failure of Judge Holtzoff to "affirm it." Its effect upon any give and take of negotiations may not be known. But the fact remains that the summary judgment against Russwine is not necessarily inconsistent with the consent judgment; the latter simply determined in last analysis what part of the obligation theretofore adjudged against the prime contractor Redding was secured by a lien on real property as against other parties.

Russwine in its brief says: "A mere recital of the aspects previously before this Court reflects a welter of confusion. What began as an orderly suit to foreclose a mechanic's lien has become a legal monster." If, indeed, a procedural monster has been created this was accomplished largely through appellant's numerous futile actions attempting to sustain with impunity its intransigent refusal to comply with the lower court's deposit order. Yet not a Frankenstein but equity as well as procedural essentials have turned against appellant.

Affirmed.