Summary 2013 WY 70

Summary of Decision June 5, 2013

Justice Burke delivered the opinion for the Court. Reversed and remanded for entry of summary judgment in favor of Ms. Oliver.

Case Name: KAREN M. OLIVER, d/b/a CRAZY TONY’S RESTAURANT v. KEVIN M. QUYNN and NIKKI L. QUYNN, husband and wife

Docket Number: S-12-0161

URL: http://www.courts.state.wy.us/Opinions.aspx

Appeal from the District Court of Platte County The Honorable John C. Brooks, Judge

Representing Appellant: Eric E. Jones, Eric E. Jones, PC, Wheatland, Wyoming.

Representing Appellees: Keith J. Dodson and Brian J. Marvel, Williams, Porter, Day and Neville, P.C., Casper, Wyoming. Argument by Mr. Marvel.

Date of Decision: June 5, 2013

Facts: This case stems from a dispute about a Party Wall Agreement between Appellant, Karen Oliver, and Appellees, Nikki and Kevin Quynn. The Quynns filed suit seeking a declaration that the Agreement was unenforceable. On summary judgment, the district court ruled that the Agreement’s provision prohibiting the Quynns from selling alcohol was void and unenforceable. Ms. Oliver challenges that decision in this appeal.

Issues: Ms. Oliver presents the following issues for our consideration: Whether the terms of the agreement in dispute are equitable servitudes binding on the real property and parties; and Whether the prohibition of the sale of alcoholic beverages is enforceable.

The Quynns present the same issues for our consideration, but organize Ms. Oliver’s issues into four more focused questions: Whether the district court properly held the covenant not to compete restraining the Quynns’ sale of alcohol is unenforceable due to unreasonable duration; Whether the district court properly held the covenant not to compete restraining the Quynns’ sale of alcohol is unenforceable because Ms. Oliver failed to prove it bears a reasonable, fair, and necessary relation to the business interests Ms. Oliver seeks to protect; Whether the district court properly held the covenant not to compete preventing the Quynns’ sale of alcohol is unenforceable because the restraint is greater than needed to protect Ms. Oliver’s legitimate interest; and Whether the district court properly held the covenant not to compete restricting the Quynns’ sale of alcohol is unenforceable because the threatened harm to the Quynns outweighs the need and harm of Ms. Oliver.

Holdings: We will reverse and remand for entry of summary judgment in favor of Ms. Oliver.

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court
[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will also note when you look at the opinion that all of the paragraphs are numbered. When you need to provide a pinpoint citation to a quote the universal portion of the citation will use that paragraph number. The pinpoint citation in the P.3d portion will need to have the reporter page number. If you need assistance in putting together a citation from this, or any future opinion using the Universal Citation form, please contact the Wyoming State Law Library and we will provide any needed assistance]

Summary 2010 Wy 158

Summary of Decision December 7, 2010

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it is issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will also note when you look at the opinion that all of the paragraphs are numbered. When you need to provide a pinpoint citation to a quote the universal portion of the citation will use that paragraph number. The pinpoint citation in the P.3d portion will need to have the reporter page number. If you need assistance in putting together a citation from this, or any future opinion using the Universal Citation form, please contact the Wyoming State Law Library and we will provide any needed assistance]

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

Case Name: Steiger v. Happy Valley Homeowners Association

Citation: 2010 WY 158

Docket Number: S-07-0260, S-09-0081

URL: http://tinyurl.com/2dmtq96

Appeal from the District Court Laramie of County, Honorable Peter G. Arnold, Judge

Representing Appellants (Defendants): Peter B. Steiger and Sylvia Steiger, pro se

Representing Appellee (Plaintiffs): William D. Bagley of Frontier Law Center, Cheyenne, Wyoming

Date of Decision: December 7, 2010

Facts: Appellants owned a tract of land in a subdivision governed by restrictive covenants. The Appellee filed a complaint against them alleging that they were violating the covenant prohibiting homeowners from occupying a modular or mobile home without a permanent foundation. The district court granted summary judgment for the Appellee and the Appellants appealed. The Court reversed the summary judgment and remanded the case to the district court after concluding that by failing to timely respond to a request for admission, the Appellee was deemed to have admitted it lacked the authority to bring the legal action. On remand, the district court entered an order allowing the Appellees to withdraw the admission and submit a response. The district court also entered an order awarding the Appellants the costs for the appeal. The Appellants appealed both orders. The appeal from the order allowing withdrawal of the admission as an improper interlocutory appeal was dismissed. The appeal from the order awarding costs because a trial had been held in the interim and another appeal from the district court judgment seemed likely was stayed. As anticipated, the Appellants have appealed the district court’s judgment enforcing the covenant and dismissing their counterclaims.

Issues: Whether the district court erred in allowing the Appellee to withdraw its admission and respond to the discovery request. Whether the district court’s findings were supported by the evidence. Whether the district court was prejudiced or biased against Appellants or unfairly failed to require Appellees to comply with the Wyoming Rules of Civil Procedure.

Holdings: District courts have broad discretion to manage pretrial discovery matters. Therefore, a district court’s decision on a motion to withdraw or amend admissions under W.R.C.P. 36(b) is reviewed under an abuse of discretion standard. An abuse of discretion occurs when a court acts in a manner which exceeds the bounds of reason under the circumstances. In determining whether there has been an abuse of discretion, the ultimate issue is whether or not the court could reasonably conclude as it did.

Appellants served their request for admissions on August 19, 2004. The Appellee did not serve written answers to the requests until September 24, 2004, and there is no indication the district court allowed the Appellee additional time to serve its answers. Thus, in Steiger v. Happy Valley Homeowners Association (Steiger I) 2007 WY 5, 149 P.3d 735 (2007) it was held that the Appellee admitted that it was not legally constituted and that any action the Board might have taken to authorize this suit was invalid. Without proper authorization, the Appellee lacked capacity to prosecute the suit. On remand to the district court, the Appellee filed its motion for an order allowing it to withdraw its admissions and serve responses. In its motion, the Appellee cited the provision in W.R.C.P. 36(b) allowing the court to permit withdrawal or amendment of admissions and asserted that its original responses to the eighty-eight requests for admission, which it served within a week after the thirty day time period, were late because of the volume of Appellants’ discovery requests. After considering the parties’ respective arguments, the district court granted the motion, allowing the Appellee to withdraw its admissions and serve responses.

Appellants contend the order allowing the withdrawal is contrary to the authorization in W.R.C.P. 6(b) allowing the district court to enlarge the time prescribed in other rules only when the request is made before expiration of the period prescribed or when the request is made after expiration of the time and excusable neglect is shown for the failure to act within the time prescribed. The difficulty with Appellants’ argument is that it requires a limiting of the language in Rule 36(b) expressly authorizing the district court to permit withdrawal or amendment of admissions “when the presentation of the merits of the action will be subserved” and “the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice” them. Allowing the Appellee to withdraw its admission and serve its response promoted presentation of the merits of the controversy. Denying the motion would have prevented presentation of the case. Allowing the withdrawal simply placed the burden back where it belonged on the Appellee to prove it was authorized to bring the enforcement action.

Appellants maintain that they relied on the admission for two and a half years and the amount of time a party relies on an admission is a key factor in showing prejudice. The amount of time a party relies on an admission may be an important factor in determining prejudice. Under the facts of this case, however, the reliance factor does not outweigh the preference for deciding a controversy on its merits. Much of the time that passed between the deemed admission and the Appellee’s request to withdraw it resulted from Appellants’ appeal to this Court from the district court’s summary judgment order, time that is not attributable to any action or inaction on the Appellee’s part. The record does not indicate any reliance left Appellants unprepared for trial. To the contrary, the record suggests Appellants were well prepared for trial and had spent untold hours preparing to defend against the Appellee’s claim. The district court could reasonably have concluded as it did that allowing withdrawal of the admission would further resolution of the controversy on the merits and not prejudice Appellants. There was no abuse of discretion in the order granting the motion.

The first finding Appellants assert is not supported by the evidence is the finding that the Appellee’s action was duly authorized by its members. However, from the evidence, the court was not left with the definite and firm conviction that the district court committed a mistake in finding that legal action against Appellants was duly authorized by the Appellee members. Three past or current board members testified that they believed a quorum was present, and the testimony of one of those witnesses went unchallenged. Although Appellants were able to raise a doubt on cross-examination about whether ten percent of the lot owners were present, it cannot be said that doubt was sufficient to overcome the other testimony. In light of the other testimony and the fact that the district court had the opportunity to observe the witnesses and assess their credibility, the district court’s finding was not clearly erroneous.

Appellants also contend the district court’s finding that the Appellee did not abandon the covenants by failing to uniformly enforce them was clearly erroneous. Appellants assert that they provided evidence of numerous violations by other lot owners that the Appellee allowed to go uncorrected, thereby proving the covenants were abandoned. A protective covenant is abandoned by failure to enforce it when it is violated, the violations are ignored or acquiesced to, and the violations are “so great, or so fundamental or radical as to neutralize the benefits of the restriction to the point of defeating the purpose of the covenant. In other words, the violations must be so substantial as to support a finding that the usefulness of the covenant has been destroyed, The evidence presented in this case does not support Appellants’ contention that the other violations were so substantial that the Appellee effectively had abandoned the covenants.

Appellants further contend the district court displayed bias and prejudice against them, decided every issue in favor of the Appellee and required them to comply with the Wyoming Rules of Civil Procedure while not requiring the Appellee to do so. Prejudice is prejudgment or the forming of an opinion without sufficient knowledge or examination; bias is a leaning of the mind or an inclination toward one person over another. Mere allegations will not suffice to show bias or prejudice; the party alleging a claim of bias or prejudice must present specific facts showing prejudgment or a leaning of the mind to the extent that the district court’s decision was based on grounds other than the evidence before it. The fair meaning of any remark made by the trial judge must be interpreted in light of the context in which it was made. A review of the entire record designated in this case, and the comments of the district court in the context in which they were made, indicate that Appellants have not shown the district court was biased or prejudiced. That is, they have not shown the district court formed an opinion about the claims without sufficient knowledge or information, or had leanings in favor of the Appellee and against them. They have not shown the district court’s findings were based on grounds other than the evidence before it. While it is clear from the record that the district court was frustrated at times with both parties, it is equally clear that the court went out of its way to allow the parties, and particularly Appellants, to present their evidence and defend fully against the claim that they violated the covenant.

Affirmed.

J. Kite delivered the opinion for the court.

J. Voigt filed a specially concurring opinion. I concur in the result reached by the majority, but I write separately because, although I agree with the majority’s treatment of the district court’s granting of the Appellee’s motion to withdraw the admission, I have a concern with something not even mentioned in the opinion. The appellants clearly violated that rule and W.R.A.P. 3.05(b) when, in filing their Designation of Records for Transmittal on Appeal, they included no portion of the trial transcript. That bears repeating more simply: there is no transcript of the trial evidence in the record. Without a trial transcript, there is nothing before us from which we can ascertain that a factual finding of the district court is or is not clearly erroneous. I would summarily affirm for that reason.

J. Hill dissented with whom J. Golden, joined. I dissent because I am convinced the majority fails to rely on the “best evidence” available to the Court, in resolving the only thorny issue in this case. From the outset, Appellants contended that the Appellee did not have the legal authority to pursue this action. As is often the case with such Appellees, it is sometimes difficult to get out “the base” when it comes time to vote. However, the Appellee only needed 10% of the lot owners in order to constitute a quorum. There were 95 lots, so rounding off (and upward) it took 10 lot owners to constitute a quorum. The best evidence of attendance was the minutes of the critical meeting and those minutes reflected that 13 “persons” were present. Appellee testified that most were couples who represented only a single lot. The president agreed that that would not amount to 10 lots, which is the absolute minimum needed to conduct such serious business. Despite “memory” testimony somewhat to the contrary, I believe Appellants were entitled to rely on the official records of the Appellee since such records existed, rather than on the vagaries of memory. I would reverse and remand this case to the district court with instructions that the complaint be dismissed.

Summary 2009 WY 122

Summary of Decision issued October 6, 2009

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

Case Name: Anderson v. Bd. of County Comm’r of Teton County, WY

Citation: 2009 WY 122

Docket Number: S-08-0102

Appeal from the District Court of Teton County, the Honorable Nancy J. Guthrie, Judge.

Representing Appellants Anderson: Andrea L. Richard and Jennifer A. Golden, the Richard Law Firm, PC, Jackson, Wyoming.

Representing Appellee, Board of County Commissioners: James L. Radda, Deputy County Attorney, Teton County, Jackson, Wyoming.

Representing Appellees Baltensperger: William R. Fix, William R. Fix, PC, Jackson, Wyoming.

Facts/Discussion: The Baltenspergers applied for and were granted the necessary permits allowing them to construct a barn/equestrian center on their property in Teton County, Wyoming. The Andersons objected to the construction permits and appealed to the Board. After the Board affirmed the grant of the permits, the Andersons petitioned the district court to review the final administrative action. The district court affirmed the Board’s decision.

Accessory residential structure: The Board determined that the barn was an accessory residential structure because it was incidental, subordinate or secondary to the residence on Lot 4A and devoted primarily to the residence and that it did not change the character of the premises. The Andersons claim the record does not support that finding primarily because the proposed barn at 6,750 sq. ft. will be much larger than the residence at 1,056 sq. ft. The Andersons pointed to no authority that stated the barn must be smaller than the residence in order for its use to be considered subordinate to the residential use of the premises. The record was clear that the residential structure was in place when the Baltenspergers applied for the construction permits.
Whether approving the construction permits violated the LDRs: The Andersons relied upon Section 5120.N.1 of the LDRs to support their contention that Teton County was required to impose restrictions on the Baltenspergers’ development to minimize adverse impacts on the neighborhood. The Court stated that the Section provides authority to Teton County to impose restrictions or conditions upon approved permits, but does not mandate it. Additionally, the LDRs only require the County to assess potential injury to the neighborhood when considering applications for variances but not when considering applications for building permits or Grading and Erosion Control (GEC) permits as in the instant case. The Board was correct when it determined that consideration of private covenants was not within the scope of the LDRs and that Teton County was correct in not imposing restrictions based upon the alleged violations of private covenants.

Conclusion: The Court would not consider the Andersons’ claim that the approval of the construction permits was based on conclusory findings as that issue was not adequately raised below. After reviewing the record, the Court found substantial evidence to support the Board’s finding that the center was an accessory residential structure. Additionally, Teton County’s approval of the Building Permit and the GEC Permit did not violate the LDRs and was in accordance with law.

Affirmed.

D.J. Waldrip delivered the decision.

Link: http://tinyurl.com/ydvwc8f .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2009 WY 55

Summary of Decision issued April 21, 2009

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

Case Name: Riverview Heights Homeowners’ Ass’n v. Rislov

Citation: 2009 WY 55

Docket Number: S-08-0126

Appeal from the District Court of Fremont County, the Honorable Norman E. Young, Judge.

Representing Appellant Riverview Heights: Kelly A. Rudd, Baldwin, Crocker & Rudd, PC, Lander, Wyoming.

Representing Appellee Rislov: Pamala M. Brondos and Peter C. Nicolaysen, Nicolaysen & Wilking, PC, Casper, Wyoming.

Facts/Discussion: Riverview Heights, a residential subdivision northwest of Riverton, filed suit against Rislov seeking to enforce an amendment to the subdivision’s restrictive covenants. Riverview Heights contended the district court erred in ruling that the 2004 Amended Covenants were invalid as a matter of law.
Restrictive covenants are interpreted according to principles of contract law. The Court focused on Paragraph 14 which stated the covenants were irrevocable and perpetual unless amended by instruments executed and acknowledged in the form prescribed for the execution of deed by 75% of the owners of the total acreage contained in the tract. Riverview Heights contended that the 2004 Amendment complied with the requirements because the officers signed the document and their signatures were notarized. The Court was unconvinced because the language asked for the signatures of 75% of the owners.
The Court referred to Goglio v. Star Valley Ranch Ass’n making note that homeowners associations serve three primary functions: levying and collecting assessments; managing and maintaining common property for the benefit of residents; and enforcing covenants that govern developments. The Court concluded that regardless of any inherent powers of the Association’s officers, they cannot amend the covenants without the requisite approval of 75% of the lot owners.
Attached to the 2004 Amendment were signature pages purporting to reflect approval of the amendment. Several of the pages were not notarized. Those not notarized were not properly executed and therefore were ineffective as approvals of the Amendment. Subtracting out the ineffective approvals, only 64% of the total owners approved the Amendment.

Conclusion: The Court determined the 2004 Amendment to the restrictive covenants was invalid. It affirmed the district court’s decision granting summary judgment against the Association.

Affirmed.

J. Burke delivered the decision.

Link: http://tinyurl.com/ddt4p9 .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2009 WY 38

Summary of Decision issued March 13, 2009

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

Case Name: Omohundro v. Sullivan; Sullivan v. Omohundro

Citation: 2009 WY 38

Docket Number: S-08-0027; S-08-0028

Appeal from the District Court of Johnson County, the Honorable David B. Park, Judge.

Representing Appellants Omohundro Trust in case S-08-0027: Kendal Hoopes, Yonkee & Toner, LLP, Sheridan, Wyoming; Anthony T. Wendtland, Wendtland & Wendtland, LLP, Sheridan, Wyoming.

Representing Appellees Sullivan Group in case S-08-0027: Kim P. Cannon and Sasha Johnston, Davis & Cannon, LLP, Sheridan, Wyoming.

Facts/Discussion: Appellants (Omohundro Trusts) own interests in Tract 6 of the Twin Lakes subdivision near Buffalo, Wyoming, and Appellees (Sullivan Group) own Tracts 1-4. The parties dispute whether under the subdivision restrictive covenants, Omohundro Trusts was required to obtain consent from all of the landowners before they could take action which would allow the City of Buffalo to obtain the water rights appurtenant to the subdivision lands. The district court ruled on summary judgment that the restrictive water rights unambiguously required the approval of the owners of all the tracts.
In the document entitled “Covenants for Twin Lakes, Buffalo, Wyoming,” Tracts 1-5 are referred to as Exhibit “A” lands while Tract 6 is referred to as Exhibit “B” lands. The language at the heart of the dispute reads: Notwithstanding any other provision in this declaration, any action, step or procedure (including without limitation, the further subdivision of any lot within the development) or the omission of any act, step or procedure which would allow or entitle the City of Buffalo to take possession, ownership, and control of the irrigation water rights applicable to the development on Exhibit “B” lands as set forth in said attached agreement shall require the written consent and approval of 100% of all lot owners within the development as well as the record owner(s) of Exhibit “B” lands. The Court considers all parts of the covenants in interpreting a provision. The Court stated that by its language the caveat included the recitation paragraphs that Omohundro Trusts claimed should be interpreted as applying to the Exhibit “A” lands. Omohundro Trusts offered the affidavit of William Omohundro as support for its reading of the covenants in its summary judgment action. The Court noted that evidence of the declarants’ subjective intention was not relevant or admissible to interpret the contract, whether its language was ambiguous or not. In addition, the relevant facts and circumstances surrounding the execution of the document could be gleaned from the covenants themselves and the documents attached including the Water Connector’s Agreement with the City.

Conclusion: The Court agreed with the district court that the disputed language unambiguously required the approval of the owners of all the tracts.

Affirmed.

J. Kite delivered the decision.

J. Burke dissented, J. Golden joined: J. Burke disagreed with the majority’s conclusion that the pertinent language in the restrictive covenants was unambiguous. Objectively, the language was ambiguous and subject to differing interpretations regarding the necessity of consent from all Exhibit “A” lot owners before subdivision of Exhibit “B” lands could occur. The interpretation of an ambiguous restrictive covenant raised genuine issues of material fact that precluded summary judgment.

Link: http://tinyurl.com/cjvrst .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2009 WY 26

Summary of Decision issued February 25, 2009

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

Case Name: Vargas Limited Partnership v. Four “H” Ranches Architectural Control Comm.

Citation: 2009 WY 26

Docket Number: S-07-0022

Appeal from the District Court of Laramie County, the Honorable Edward L. Grant, Judge.

Representing Appellant Vargas/Martin: Michael H. Reese, Cheyenne, Wyoming; Ronald L. Brown, Fort Collins, Colorado.

Representing Appellee Four “H”: John B. Rogers of Rogers and Rogers, PC, Cheyenne, Wyoming.

Facts/Discussion: Four “H” Ranches Architectural Control Committee (ACC) brought suit on behalf of adjoining landowners in a residential subdivision located in Laramie County to enforce the subdivision’s declaration of protective covenants and enjoin the construction or improvements of several buildings by Vargas Limited Partnership and Kit Martin (known collectively as Martin) on their property in the subdivision.

Real Party in Interest: Restrictive covenants are contractual in nature and are interpreted in accordance with principles of contract law. The real party in interest requirement protects a defendant from the vexation of a multiplicity of actions, with the possible burden of multiple recoveries, all emanating from the same cause. Although the parcel owners never developed a homeowners association, the Court noted that many courts have held that where lots in a subdivision are sold subject to common restrictive covenants an express reservation of a right of enforcing such covenants does not conclusively negate an intent that such covenants were also for the benefit and enforceable by other owners. Several owners of parcels in the Four “H” subdivision testified in support of the ACC’s enforcement action. If a homeowners association or one or more parcel owners were in the future to claim an enforcement right against Martin for covenant violations litigated in the instant action, they would be estopped to do so. The judgment in this action protects Martin.
Whether Construction was Incomplete: After examining the evidence in the record, the Court held that the district court’s findings of fact that the construction of Building A prime, Building A double prime, and Building B was incomplete were supported by the record.
Abuse of Discretion: The Court reviewed the district court’s order for Martin to remove the buildings in question in light of the record. The district court’s conclusions were drawn from objective criteria and demonstrated the proper exercise of sound judgment.

Conclusion: The judgment in the district court action protects Martin from future litigation of covenant violations. The record supported the conclusion that construction was incomplete. The district court’s conclusions were drawn from objective criteria such that the Court found no abuse of discretion.

Affirmed.

J. Golden delivered the decision.

Link: http://tinyurl.com/dknbn2 .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2008 WY 101

Summary of Decision issued August 28, 2008

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

Case Name: Jacobs Ranch Coal Co. v. Thunder Basin Coal Co, LLC

Citation: 2008 WY 101

Docket Number: S-07-0280

Appeal from the District Court of Campbell County, the Honorable John R. Perry, Judge.

Representing Appellant: Thomas P. Johnson and Andrea Wang, Davis Graham & Stubbs, LLP, Denver, Colorado; Amy Jo Stefonick, Rio Tinto Energy America, Gillette, Wyoming.

Representing Appellee, Thunder Basin Coal: Stephen D. Bell, Dorsey & Whitney, LLP, Denver, Colorado; Randall T. Cox, Randall T. Cox, PC, Gillette, Wyoming.

Representing Appellee Consolenergy, Inc.: No appearance.

Facts/Discussion: Jacobs Ranch appealed the district court’s summary judgment decision that Thunder Basin was not liable for surface royalty payments in this case because the surface royalty at issue was not a covenant running with the land.
Covenant that runs with the land: In Mathisen v. Thunder Basin the Court stated that the party seeking to establish that a covenant runs with the land must demonstrate the original covenant is enforceable; the parties to the original covenant intended that the covenant run with the land; the covenant touches and concerns the land; and there is privity of estate between the parties to the dispute. The surface royalty provision in question specified that Consol as “Grantee shall pay” the surface royalty but as in Mathisen there was no language indicating that Consol’s successors in interest or assigns would be bound by the provision. Jacobs Ranch raised two main arguments against the conclusion that the surface royalty was not a covenant running with the land. First, Jacobs Ranch argued that it presented undisputed evidence that when the property was conveyed both parties intended that the surface royalty would run with the land. The Court looked to the language of the written instrument and noted that the language was not ambiguous. The evidence offered by Jacobs Ranch was inadmissible as it constituted only the parties’ own extrinsic expressions of intent.
Jacobs Ranch next maintained that no coal company would intentionally obligate itself to pay a royalty for coal mined by its competitors. Thunder Basin asserted that Consol was free to agree on the purchase price it paid and even if it appears unwise in hindsight, the agreement should be enforced as written. The Court agreed with the district court. There was no agreement on Thunder Basin’s part to assume the surface royalty obligation so Consol’s promise to pay a surface royalty as part of the purchase price cannot be enforced against Thunder Basin.
Thunder Basin obligated to indemnify Jacobs Ranch: Jacobs Ranch asserted an express indemnity claim against Thunder Basin. The Court agreed with the district court that the claims in the case were not of such character to be included within the indemnity provision. The claims arose from Jacobs Ranch’s own contractual obligations and not from Thunder Basin’s operations on or use of the land.
Jacob Ranch’s claim for implied indemnity suffered the same flaw as its claim for express indemnity: the claims do not arise from Thunder Basin’s coal mining activities on the land but from Jacob Ranch’s own contractual obligations.
Jacobs Ranch and Thunder Basin have an express indemnity agreement which does not apply to claims for surface royalty agreements. The Court stated it would be inappropriate to enlarge or add to Jacob Ranch’s rights of indemnification using an equitable indemnity theory.

Holding: The Court agreed with the district court that there was no agreement on Thunder Basin’s part to assume the surface royalty obligation so Consol’s promise to pay surface royalty as part of the purchase price cannot be enforced against Thunder Basin. The Court affirmed the district court’s summary judgment decision denying Jacob Ranch’s indemnity claim under the three theories of express, implied, and equitable indemnity.

Affirmed.

J. Burke delivered the decision.

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

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2008 WY 74

Summary of Decision issued June 30, 2008

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

Case Name: Dwan v. Indian Springs Ranch Homeowners Assoc., Inc.

Citation: 2008 WY 74

Docket Number: S-07-0154

Appeal from the District Court of Teton County, the Nancy J. Guthrie, Judge.

Representing Appellant: David G. Lewis, Jackson, Wyoming.

Representing Appellee: Frank Hess of Hess Carlman & D’Amours, LLC, Jackson, Wyoming; Heather Noble, Jackson, Wyoming.

Facts/Discussion: Dwan appealed from the district court’s grant of summary judgment to the Indian Springs Ranch Homeowners Assoc. (HoA). Dwan presented the issue whether the Board acted unreasonably in rejecting her application to build a proposed addition to her residence. She also argued that HoA could not make her seek a variance. Dwan had built a residence and guesthouse/garage using plans which had been approved. The addition request in the instant case was not approved even though it reflected design similar to the previously approved buildings.
The CCRs state that approval of applications by the Board shall not be unreasonably withheld. The only reason given by the committee and the Board for the denial was that the roof pitch did not comply with the CCRs. Yet Dwan had received permission for and had built her residence and detached guesthouse/garage with the identical roof pitch proposed for her addition. The CCRs are to provide for consistent, compatible and attractive development. If Dwan had been forced to follow the roof pitch required by the CCRs the roof pitch on her addition would not be as steep as the rest of her residence and the design of the existing house would be irreparably damaged.

Holding: The Court found no genuine issues of material fact and that summary judgment was appropriate. Dwan was not required to seek a variance from the Members. The only question was the correct application of the facts to the language of the CCRs. Pursuant to the CCRs, Dwan could only move forward upon recommendation of approval by the Board and the Board’s correspondence indicated they were not disposed to do so. The only objection was that the roof pitch did not conform to the requirements in the CCRs. The proposed roof pitch was identical to the roof pitch of the rest of the residence. The Court stated that her application should be approved.

Reversed and remanded.

J. Golden delivered the decision.

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

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2008 WY 66

Summary of Decision issued June 12, 2008

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

Case Name: Brumbaugh v. Mikelson Land Co.

Citation: 2008 WY 66

Docket Number: S-07-0218

Appeal from the District Court of Park County, the Steven R. Cranfill, Judge.

Representing Appellants (Plaintiffs): S. Joseph Darrah of Darrah, Darrah & Brown, PC, Powell, Wyoming.

Representing Appellee (Defendant): Thomas P. Keegan of Keegan & Winslow, PC, Cody, Wyoming.

Facts/Discussion: The Brumbaughs filed a declaratory and injunctive relief action against MLC seeking to enforce the rights they claimed pursuant to the Skytel Country Estates restrictive covenants and plat. The district court granted summary judgment in favor of MLC holding the Brumbaughs were not entitled to any of their requests for relief. After the Brumbaughs predecessor in interest purchased two Skytel lots, Skytel partially vacated the plat, amended the restrictive covenants and sold the remaining property to Mikelson Land Company (MLC) which incorporated it into a larger subdivision.
Partial Vacation of Plat and Amendment to Restrictive Covenants of the Skytel Country Estates Subdivision: Under the plain language of the amendment to the declaration of covenants, the vacation of the plat and § 34-12-108, the owners of Lots 77, 81 and 82 in the Skytel Country Estates subdivision continued to enjoy the rights and be bound by the obligations contained in the relevant subdivision documents. The amendment to the covenants and the vacation of the plat did not change those rights.
Brumbaughs’ Rights Concerning the Skytel Country Estates Subdivision: The district court considered the language of paragraph 6 of the covenants and declared that the covenant reserved the right to such easements only to the title owner which was MLC. The Court stated that the district court’s interpretation was mistaken. When the entire declaration iwa considered, the rights conveyed were to inure to the benefit of Skytel lot owners. Therefore the Brumbaughs have a right to easements for utilities and access. The declaration does not define the location or scope of the easements. On remand the district court will have the responsibility of determining the location and scope. The Brumbaughs also claimed they were entitled to use all roads which have been developed in the original Skytel Country Estates. The Court concluded as a matter of law they were entitled to access to their lot across lands formerly within the Skytel Country Estates subdivision. They were not limited to the roads shown on the plat. On remand the district court will need to determine the status of the Heidi Drive access or whether other reasonably convenient or necessary access exists or may be developed. The express language of the covenants does not create an obligation for the developer to provide water nor does it convey a right to tap into any water system. The Brumbaugh’s interpretation of the language of the covenants would create a new right to connect to the Cody’s Country subdivision water system which the Court ruled they were not entitled to. The Court ruled that the property formerly included in the common area of the Skytel Country Estates subdivision was not burdened by the requirements that central livestock facilities be placed upon it.
MLC’s Rights in the Skytel Country Estates Subdivision: Prior to the vacation of the plat, the owner of two-thirds of the land area in the Skytel Country Estates subdivision had the authority to modify the covenants. MLC is not an owner of land in the subdivision therefore it does not have the right to modify the Skytel Country Estates subdivision covenants. The Court stated the appointment of an architectural committee was invalid at the time the complaint was filed.

Holding: The Skytel Country Estates subdivision documents grant the Brumbaughs easements for power, sewer and access across lands originally in the Skytel Country Estate subdivision and the district court erred by ruling as a matter of law that they did not have those rights. Because the location and scope of the easements were not set out in the written documents, they are floating easements and the district court will have to consider the relevant facts to determine a reasonable and convenient location and scope for those easements.
The district court properly concluded that the covenants did not grant the Brumbaughs the right to connect to the water system developed by MLC or to central livestock facilities located in the common area of the original Skytel Country Estates subdivision.
MLC did not have the authority to modify the Skytel Country Estates subdivision covenants and the appointment of MLC as architectural committee was not valid.

Affirmed in part, reversed in part, remanded.

J. Kite delivered the decision.

Link: http://tinyurl.com/69tofy .

[SPECIAL NOTE: This opinion uses the "Universal Citation." It was given an "official" citation when it was issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. Please note when you look at the opinion that all of the paragraphs are numbered. When you pinpoint cite to a quote, you should cite to this paragraph number rather than to any page number. If you need assistance in putting together a citation using the Universal Citation form, please contact the Wyoming State Law Library.]

Summary 2007 WY 161

Summary of Decision issued October 11, 2007

[SPECIAL NOTE: This opinion uses "Universal Citation" and was given an "official" citation when issued. You should use this citation whenever you cite the opinion, with a P.3d parallel citation. You will note that all of the paragraphs are numbered. When you need to provide a pinpoint citation, the universal portion of the citation will use that paragraph number. The pinpoint citation in the P.3d portion should include the reporter page number. If you need assistance, please contact the Wyoming State Law Library.]

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

Case Name: Betty Mathisen, Harold Shipley, Patricia Brown, Vicki Ruiz, Bobby Shipley, Jr., Jimmy Shipley, Monica Miller and Robin Shipley v. Thunder Basin Coal Co., LLC, Jacobs Ranch Coal Co., Consol Energy, Inc., and Consolidation Coal Co.

Citation: 2007 WY 161

Docket Number: 06-276

Appeal from the District Court of Campbell County, the Honorable Michael N. Deegan, Judge

Representing Appellants (Plaintiffs): Patrick Dixon, Casper, Wyoming

Representing Appellee Thunder Basin Coal Co. (Defendants): Thomas J. Davidson of Dorsey & Whittney LLP, Cheyenne, Wyoming.

Representing Appellees Jacobs Ranch Coal Co., Consolidation Coal Co. and Consol Energy, Inc. (Defendants): Mark D. Taylor, Gillette, Wyoming; Thomas P. Johnson and Andrea Wang of Davis Graham & Stubbs LLP, Denver, Colorado. Argument by Mr. Johnson.

Issues: Whether under the terms of the deed, Consol was obligated to pay the surface royalty even though it never mined the coal. Whether the surface royalty clause ran with the land so as to obligate Consol’s successors, Jacobs Ranch and /or TBCC, to make surface royalty payments to the Mathisens when the coal was mined.

Facts/Discussion: The Appellants’ predecessors in interest conveyed 120 acres in Campbell County to Appellee Consolidation Coal Company (Consol). Even though the federal government owned the coal underlying the property and Consol did not have a right to mine it, the deed stated that part of the consideration for the transfer included a “surface royalty” for all coal removed and sold “by Consol” from the property. Consol never acquired the right to mine the coal underlying the property; consequently, it never removed any coal or paid any surface royalty to the Appellants or their predecessors. Appellee Jacobs Ranch Coal Company (Jacobs Ranch) eventually acquired the title to the property. Appellee Thunder Basin Coal Company, LLC (TBCC) ultimately obtained the federal lease to mine the coal, leased the surface property from Jacobs Ranch and began mining operations. The Appellants filed a complaint for payment of the surface royalty contemplated in the deed.
Standard of Review: When a district court considers materials outside the pleadings in entering a judgment on the pleadings or ordering a W.R.C.P. 12(b)(c) dismissal, the Court treats the ruling as a summary judgment. The Court reviews a summary judgment de novo.
The Court began with the language of the deed in which the Shipleys conveyed the Property to Consol. The Court interpreted the deed as a type of contract, examining the terms of the deed and giving them their plain and ordinary meaning. The obligation to pay the royalty was limited by its plain language to coal mined, removed and sold by Consol. The language supported the district court’s ruling that because Consol did not mine any coal, it was not obligated to pay the Mathisens a surface royalty.
The next question was whether Jacobs Ranch as Consol’s successors in interest was obligated to pay the surface royalty when the coal was actually mined. The Mathisens maintained the provision was a covenant that ran with the land. They needed to demonstrate that the original covenant was enforceable, the parties to the original covenant intended that the covenant run with the land, the covenant touched and concerned the land, and that there was privity of estate between the parties to the dispute.
The Court focused on whether the original parties intended the covenant to run with the land. The selective inclusion of the terms of succession in specific places throughout the deed strongly indicated to the Court that the failure to include similar language in the surface royalty provision was deliberate. The provision also specifically stated that the surface royalty obligation was given as “further consideration…by Owner to Consol” indicating the obligation was personal between the Shipleys and Consol and related only to the original sale.
The Mathisens argued the Court should consider the circumstances surrounding the transfer of the Property. The undisputed fact that Consol did not have a federal lease to mine the coal when it purchased the Property was a circumstance that should be considered in interpreting the deed. But, the Court stated it did not help the Mathisens’ argument because it could suggest the parties intended the provision to run with the land so the Shipleys or their successors would eventually receive further compensation or, Consol could have been uncertain it would ever be able to mine the coal and so may not have wanted to encumber the Property with such a covenant that could burden it in the future. The Court declined to speculate.
The Mathisens suggested that the value of the coal was unknown at the time the deed was executed and the royalty payment would have been necessary for them to have received fair value for their property. However, they provided no evidence in support of that position.
Because neither the plain language of the deed nor evidence of the circumstances surrounding the transfer raised a question of material fact, the Court found no basis for overturning the trial court’s conclusion that the parties to the deed did not intend for Consol’s successors to be bound by the surface royalty obligation. The Court’s finding that the parties did not intend that the surface royalty provision run with the land was dispositive making it unnecessary for the Court to consider the other requirements for a covenant to run with the land or the other arguments presented by the parties in the case.

Holding: The Court held that the district court properly granted judgment as a matter of law to the Appellees. The plain language of the deed established that Consol was not obligated to pay a surface royalty to the Mathisens because it never mined the coal on the Property. Moreover, the Mathisens failed to establish an essential element required for the surface royalty provision to run with the land, i.e., the original parties intended it to run with the land. Thus, Consol’s successors in interest were not obligated to make surface royalty payments to the Mathisens when the coal was mined.

Affirmed.

J. Kite delivered the opinion.

Link: http://tinyurl.com/24oqcd .