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07/11/83 UNITED PACIFIC INSURANCE COMPANY v.

July 11, 1983

UNITED PACIFIC INSURANCE COMPANY, PLAINTIFF-APPELLANT,
v.
METROPOLITAN SEWERAGE COMMISSION OF THE COUNTY OF MILWAUKEE, ET AL., DEFENDANTS-RESPONDENTS



Appeal from a judgment of the Circuit Court for Milwaukee County: William A. Jennaro, Judge.

Petition to Review Denied.

Wedemeyer, P.j., Decker and Moser, JJ.

The opinion of the court was delivered by: Decker

In the interests of Justice pursuant to sec. 752.35, Stats., because we believe that Justice has miscarried, we reverse the judgment of the circuit court and remand this case to the circuit court with directions to its chief Judge to assign this case and circuit court Case No. 419-641 to the same trial Judge for further proceedings to obviate the prospect of conflicting rulings in these parallel cases which would have the effect of frustrating an orderly and effective resolution of the issues in both cases.

Soon this litigation will enter its second decade. It involves events that have occurred as much as a decade and a half ago. Involved is the recovery of damages incurred in the performance of a sewer construction contract and resulting from "changed conditions" below ground that allegedly impeded the sewer tunnel construction. *fn1

United Pacific Insurance Company (United) brings this action as the claimed surety subrogee of Grange Construction, Inc. (Grange). Grange had defaulted upon the contract and United, as surety, paid for the completion of the contract. Grange also defaulted on certain obligations to the estate of a prior shareholder, James J. Malloy. The estate obtained judgments against Grange, and Martin E. Love was appointed supplementary receiver (receiver) for Grange.

In 1974, litigation was commenced by United in the federal district court. It was subsequently dismissed. We make no further reference to that litigation because it is not necessarily relevant to these proceedings.

Also in 1974, the receiver commenced Milwaukee Circuit Court Case No. 419-641 against the Metropolitan Sewerage Commission of Milwaukee County (commission). In 1975, United commenced Milwaukee Circuit Court Case No. 435-067 against the commission. Neither plaintiff named the other as a party. The circuit court cases were consolidated by stipulation before Judge O'CONNELL. Subsequently, the receiver's action was amended to add United as a defendant.

The trial court then, on its own motion, severed the previously ordered consolidation for the purposes of trial and ordered the "changed conditions" claim of Case No. 435-067 tried first. More than a year later, the trial court dismissed the complaint in No. 435-067 for failure to join the receiver as a necessary and indispensable party although the competing claims of the receiver and United were before the court in Case No. 419-641. United promptly requested permission to amend its complaint to add the receiver as a party. The motion was denied. The trial court stated that in dismissing the action it was not intended that the commencement of another action be precluded. That comment by the trial court would have justified summary reversal of its refusal to permit an amendment to the complaint if that case were before us.

United immediately commenced circuit court Case No. 484-112 against the commission and the receiver in which United sought the damages claimed by the receiver and United against the commission and asserted its priority over the receiver. Before Judge JENNARO, the receiver moved to dismiss upon the grounds of another action pending (sec. 802.06(2) (j), Stats.) and alternatively for dismissal upon grounds of res judicata and collateral estoppel. Subsequent to the making of these motions, United petitioned Judge O'CONNELL to permit its intervention in Case No. 419-641. The petition was denied because this case (484-112) was pending.

In 1981 Judge JENNARO denied the motion to dismiss upon the ground of another action pending, correctly concluding that the termination of No. 435-067 was without prejudice to the reassertion of its claims in Case No. 484-112 and, thus, that there was not "another action pending between the same parties for the same cause."

In May of 1982, Judge O'CONNELL in Case No. 419-641 overruled the commission's demurrers to the complaint and amended complaint and executed an order that stated United was present in that action "as a dismissedout plaintiff in this totally consolidated case and is in no way a missing indispensable party."

The receiver again moved for reconsideration of Judge JENNARO's decision (the first motion had been denied) and he, faced with a finding of Judge O'CONNELL that expressly contradicted Judge JENNARO's interpretation of the termination of Case No. 435-067, deferred to Judge O'CONNELL, modified his original decision and dismissed Case No. 484-112 because of another action pending.

We determine that Judge O'CONNELL's order dismissing Case No. 435-067 without prejudice to commencement of this action (484-112) was a complete termination of No. 435-067 and that Judge JENNARO, in the first instance, properly denied the dismissal for another action pending. We vacate the judgment of dismissal, reinstate the action and remand the case to the ...


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