APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA.
Van Dusen, Gibbons and Garth, Circuit Judges. Gibbons, Circuit Judge, dissenting from the judgment.
This appeal initially presented a jurisdictional question arising out of an action brought by the plaintiff subcontractor (Fairview) against its general contractor (Monzo) and a Pennsylvania municipal authority (Robinson Township) for which the construction work in issue was being performed.*fn1 After Fairview's claim against the Township had been dismissed on state law grounds, the district court then dismissed Monzo's cross-claim against the Township for lack of an independent (diversity) basis for federal subject matter jurisdiction. Monzo contends in this appeal that the dismissal of its cross-claim against the Township was erroneous. We agree. However, because we have been informed that the relief sought in the cross-claim has since been obtained by Monzo in its subsequent state court proceedings, it is apparent that the issue before us has been mooted, and thus for this reason, the March 16, 1976 order of the district court dismissing Monzo's cross-claim will be affirmed.*fn2
Fairview Park Excavating Co., Inc., the plaintiff/appellee, is an Ohio corporation which as a subcontractor provided labor and materials under certain construction contracts for Robinson Township. Al Monzo Construction Company, Inc., a defendant and the appellant in this Court, is a Pennsylvania corporation, which acted as general contractor to Robinson Township. Robinson Township Municipal Authority, the defendant/appellee, is a "citizen" of Pennsylvania. Maryland Casualty Co., a defendant/appellant, is a Maryland corporation which became a surety on Monzo's bond guaranteeing payment to subcontractors, laborers and materialmen.
Fairview completed its work as subcontractors but did not receive payment. Fairview then filed a diversity action in the United States District Court for the Western District of Pennsylvania - joining Monzo, Maryland Casualty and the Township as defendants.
The Township denied any liability to Fairview, claiming that Fairview was not in contractual privity with it. The Township asserted that it had contracted only with Monzo as its contractor, and that any monies still owing to Monzo were being withheld by the Township only until Monzo completed certain restoration work.
Monzo and Maryland Casualty, replying together, denied liability, counterclaimed against Fairview,*fn3 and cross-claimed against the Township. The Township counter-claimed against Monzo for damages caused by defective work. Trial without a jury was set for March 16, 1976.
On the first day of trial, however, the district court granted the Township's motion that Fairview's complaint against it be dismissed. The district court subsequently explained the basis for its dismissal of the Township as a defendant as follows:
Just prior to the commencement of trial on March 16, 1976, Robinson moved for dismissal on the ground that there was no contractual relationship between Fairview and Robinson, that the contract documents so provided and that there was no jurisdiction over the cross-claim of Monzo against Robinson because Robinson could not have been sued by Fairview in any event, citing City of Philadelphia v. National Surety Corporation, 140 F.2d 805 (3rd Cir. 1944). We considered that case controlling in its holding that under the law of Pennsylvania a municipal corporation is liable to a contractor but not to a subcontractor, materialman or laborer. While Robinson was a municipal authority and not a municipal corporation, we considered the proposition controlling.*fn4
With the Township no longer a "defendant" in Fairview's suit, its only remaining connection to the case was provided by Monzo's cross-claim. However, even this connection was short-lived. On the same date, March 16, 1976, the district court dismissed Monzo's cross-claim because of an absence of diversity between the two parties. In its Memorandum Opinion of June 1, 1976, the district court stated: "The various disputes between Monzo and Robinson were not properly before us and are, in fact, matters for state court jurisdiction, there being no diversity of citizenship between these parties."*fn5
At this juncture, only Fairview's claim against Monzo was left. After trial, judgment was entered for Fairview. Defendants Monzo and Maryland Casualty thereafter filed a "Motion for a New Trial." On June 2, 1976, the district court dismissed that motion, and the defendants filed a timely notice of appeal. See Fed. R. App. P. 4(a).*fn6 It was only during oral argument that it appeared that Monzo had recovered a judgment against the ...