Wednesday, September 21, 2011

Summary 2011 WY 134

Summary of Decision September 21, 2011

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

Case Name:  Grynberg v. L&R Exploration

Citation:  2011 WY 134

Docket Number:  S-11-0037

Appeal from the District Court of Sweetwater County, The Honorable Jere A. Ryckman, Judge

Representing Appellant (Plaintiff):  William L. Hiser, Brown & Hiser, LLC, Laramie, Wyoming; Jon Aimone, Lemich Law Center, Rock Springs, Wyoming.  Argument by Mr. Hiser.

Representing Appellee (Defendants):  Paula A. Fleck, Holland & Hart LLP, Jackson, Wyoming; Steve Andersen, Holland & Hart LLP, Boise, Idaho; Christina F. Gomez, Holland & Hart LLP, Denver, Colorado.  Argument by Mr. Andersen.

Date of Decision: September 21, 2011

Facts:  Appellant and her husband are co-owners of a petroleum company registered in the State of Utah that has been involved in acquiring, exploring, developing, and producing oil and natural gas fields.  In 1960, Appellant’s husband and several individuals entered into a joint venture agreement for the purpose of developing oil and natural gas fields primarily in Wyoming.  Originally, Appellant’s husband had a 41.5% interest in the gas field and Appellee owned the remaining 58.5% interest.  In the 1990s, Appellant’s husband assigned 99% of his interest in the gas field to Appellant.

Over the years, Appellant and Appellee entered into agreements authorizing Appellant’s company to recover damages for Appellee’s interests in the gas field by filing suit against various entities.  In exchange for pursuing Appellee’s claims and advancing the costs and fees of litigation, Appellant was to receive a percentage of any amounts recovered.  In 2000, an accountant for Appellee raised questions concerning Appellant’s husband’s accountings and payments to the joint venture participants.  When Appellant’s husband learned that he was being questioned, he and Appellant filed suit against Appellee in their home state of Colorado.  In response to the Colorado action, Appellee filed a petition in New York seeking a court order compelling the Appellant and her husband to arbitrate the dispute in accordance with the arbitration provisions contained in the joint venture agreement.     

The New York court granted the motion to the extent that it dismissed Appellant from the proceeding, denied the motion as to Appellant’s husband, granted Appellee’s arbitration petition and ordered Appellant’s husband “and all others acting on his behalf” to refrain from initiating any court proceedings in Colorado.  Appellant’s husband appealed up to NewYork’s highest court, but both courts rejected the appeal and affirmed the order.

 Less than two months later, Appellant filed a complaint in Colorado state district court identical to the earlier Colorado complaint except that Appellant’s husband was not named as a plaintiff.  Finding that the two complaints involved “identical claims and facts,” the Colorado court consolidated the cases and entered an order staying them until resolution of the New York proceedings.   The Colorado court also found Appellant’s actions frivolous and awarded attorney’s fees and costs.
After seven years, the arbitration panel unanimously concluded that Appellant’s husband had violated his fiduciary and accounting responsibilities and awarded Appellee substantial damages plus interest.  Appellant’s husband paid only part of the judgment, to Appellant, specifically the amount owing to her as assignee of his interest in Appellee.  Appellant’s husband failed to pay the balance and Appellee subsequently filed an action in Colorado to collect the unpaid portion. Appellant’s husband objected to the judgment.  The Colorado district court rejected the objection.  Appellant’s husband appealed, and The Colorado Court of Appeals affirmed its district court’s decision.   

Meanwhile, Appellant filed a complaint in Wyoming for declaratory relief, breach of contract, unjust enrichment, and conversion against Appellee and numerous individuals and entities having an interest in the Appellee joint venture, claiming that the Appellee owed her compensation for services provided, and that she is entitled to payment of those amounts.  Appellee moved to dismiss the complaint under Wyoming Rule of Civil Procedure 12(b)(6) or, in the alternative, for summary judgment under Rule 56.  The district court granted summary judgment for Appellee and dismissed the complaint on the basis of res judicata, finding that Appellant was in privity with parties involved in prior litigation in Colorado and New York, and that her complaint involved the same subject matter and issues resolved in those proceedings.  Appellant appealed, claiming the district court erred in holding that her claims were barred.  After she had filed her appellate brief, the New York Supreme Court issued a decision finding Appellant’s husband in contempt for colluding with Appellant to bring this action in Wyoming in violation of its order to refrain from further litigation involving Appellee and the issues before the arbitration panel.          

Issues: 1) Whether the district court properly entered summary judgment for Appellee when Appellee failed to file a separate statement of material facts demonstrating the absence of a genuine issue for trial as required by W.R.C.P. 56.1; and 2) Whether the district court correctly concluded that Appellant’s claims are barred by the doctrine of res judicata.  Appellee re-stated the issues and asked the Court to award it attorney fees and costs in defending this appeal.   

Holdings:  The Court affirmed and awarded attorneys fees and costs. 

As to the first issue, the Court held that Rule 56.1 is clear that upon filing any motion for summary judgment under Rule 56, a separate statement of material facts with pinpoint citations supporting the motion is required.  However, while the Court did not condone Appellee’s failure to comply with Rule 56.1, the Court concluded that the district court properly exercised its authority in determining that Appellant waived her objection to its consideration of Appellee’s motion and supporting materials when Appellant did not raise it until after the court had considered the materials and issued a ruling. 

As to the issue of res judicata, the Court found the issues and subject matter here identical to that raised in the New York and Colorado courts and resolved in New York after a seven day evidentiary hearing and numerous appeals. The Court found that those issues had been fully and finally resolved.  The Court held that Appellant, as the assignee of her husband’s interest in the joint venture, had received payment of her proportionate share, and  pursuant to the New York judgment, as co-owner of the petroleum company, she was not entitled to payment of anything from Appellee. Appellant was in privity with her husband as the assignee of his interest and, as co-owner of the petroleum company, is bound by the prior rulings.      

The Court also held that, in light of the lengthy New York proceedings, the orders staying and prohibiting other proceedings, and the contempt order, Appellant had no reasonable cause for this appeal and Appellee was entitled to attorney fees and costs.   

C.J. Kite delivered the opinion for the court.

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