Summary 2008 WY 39

Summary of Decision issued April 8, 2008

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: In re Kite Ranch

Citation: 2008 WY 39

Docket Number: S-07-0196; S-07-0197

Appeal from the District Court of Albany County, the Honorable Jeffrey A. Donnell, Judge

Representing Dunmires: M. Gregory Weisz of Pence and MacMillan LLC, Laramie, Wyoming.

Representing Hedstroms: William H. Vines of Jones, Jones, Vines & Hunkins, Wheatland, Wyoming.

Representing Powell Family of Yakima, LLC and Brickmans: F. Scott Peasley and Frank D. Peasley of Peasley Law Office, Douglas, Wyoming.

Facts/Discussion: All of the parties to this appeal are members of Kite Ranch, LLC which owns a ranch in Albany County. The Dunmires and Hedstroms filed a declaratory judgment action seeking a determination of the parties’ respective rights in the company. Powell and Brickman petitioned the district court for a preliminary injunction granting Powell the right to manage Kite Ranch during the pendency of the litigation and enjoining the Dunmires and Hedstroms from interfering with its management. The district court granted and subsequently amended a preliminary injunction in favor of Powell and Brickmans. Dunmires and Hedstroms appealed claiming the district court improperly amended the preliminary injunction without allowing them to be heard and the amended preliminary injunction was improper because it did not require Powell to preserve the status quo of the limited liability company during the pendency of the litigation.
Procedure for Amendment of Preliminary Injunction Order: The Court considered the district court’s decision letter issued prior to the entry of the original preliminary injunction order important to their conclusion that the change the court made to the final order was clerical. A fair reading of the letter indicated that the immediate management needs for Kite Ranch included dealing with the mortgage and note which was in default at the time of the hearing and arranging for the lands to be leased. The district court clearly intended that Powell have the right to mortgage and lease the property as part of its management authority and duties during the term of the preliminary injunction. The written order did not accurately reflect the district court’s intent. It was therefore a clerical matter to correct the order by clarifying that Powell had those management rights.
Terms of the Preliminary Injunction: To justify an injunction, there must be a showing the potential harm is irreparable. Powell claimed it was entitled to manage the LLC under § 17-15-116 because there was no operating agreement and it had the only positive capital account. The evidence at the hearing supported Powell’s claim. The district court referred to § 17-15-104 as delineating Powell’s management powers but in deference to Dunmires’ and Hedstroms’ concerns, the court limited Powell’s powers. Dunmires and Hedstroms were focused on Powell’s actions after the preliminary injunction was entered. These actions have not been addressed by the district court and are therefore not ripe for review by the Court. The Court stated that maintaining the status quo of an ongoing business does not mean decisions cannot be made.

Holding: The district court did not abuse its discretion by granting a preliminary injunction giving Powell management authority over Kite Ranch during the pending litigation. The propriety of the specific actions taken by Powell including the terms of the refinancing is yet to be determined by the district court. The Court presumed that would happen during the impending litigation. In the meantime, Powell was properly given the right to take the actions necessary to keep the company’s business viable, including mortgaging and leasing the property.

Affirmed.

J. Kite delivered the decision.

Link: http://tinyurl.com/5cj5e9 .

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