Summary 2010 WY 51

Summary of Decision issued April 23, 2010

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

Case Name: Fayard v. Design Comm. of Homestead Subdivision

Citation: 2010 WY 51

Docket Number: S-09-0145

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

Representing Appellant Fayard and Galeforce: Paula A. Fleck and Susan L. Combs of Holland & Hart LLP, Jackson, Wyoming.

Representing Appellee Design Committee of the Homestead Div.: James K. Lubing of Law Office of James K. Lubing, Jackson, Wyoming; Douglas F. Schultz of Schultz Law Firm, LLC, Jackson, Wyoming.

Facts/Discussion: Fayard and Galeforce (Fayard) own lots in the Homestead Subdivision in Teton County. Fayard filed a declaratory judgment and injunctive action against the Design Committee and committee members, alleging the committee had improperly approved a special assessment to pave the common roads. Lots in the Homestead Subdivision are governed by a Declaration of Covenants, Conditions and Restrictions (CCRs.)

Restrictive covenants are contractual in nature and interpreted in accordance with principles of contract law. If the contractual language is clear, the court interprets it as a matter of law and summary judgment is appropriate. The committee argued that it acted within its authority to present the special assessment question to the lot owners because the unpaved roads presented an unusual condition that had arisen with regard to the access facilities or utilities which service the property. Fayard argued that summary judgment was inappropriate because the term “unusual” was broad and that there were genuine issues of material fact as to whether an “unusual condition” existed to justify paving the roads.
The fact that the covenants did not provide any limitations on what could be considered “unusual” indicated the declarant intended that the special assessment process apply to a wide variety of circumstances. The declarant’s use of the term did not mean the contract was ambiguous.

Conclusion: The “unusual condition” basis for imposing a special assessment under the CCRs was intentionally broad and the undisputed facts presented fell within that definition. There were no genuine issues of material fact and the contract was properly interpreted by the district court as a matter of law. The Design Committee acted within its authority under the CCRs in imposing the special assessment for paving the roads.

Affirmed.

J. Kite delivered the decision.

Link: http://tinyurl.com/2bspuma .

[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 using the Universal Citation format, please contact the Wyoming State Law Library.]

Summary 2009 WY 114

Summary of Decision issued September 15, 2009

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

Case Name: Stone v. Devon Energy Production Co., LP

Citation: 2009 WY 114

Docket Number: S-08-0267

Appeal from the District Court of Johnson County, the Honorable John G. Fenn, Judge.

Representing Appellants Stone and Loundagin: Stpehen R. Winship of Winship & Winship, PC, Casper, Wyoming.

Representing Appellees Devon Energy and Carpenter & Sons: Scott P. Klosterman of Williams, Porter, Day & Neville, PC, Casper, Wyoming.

Facts/Discussion: Stone and Loundagin assigned their operating rights under a state oil and gas lease to Devon and Carpenter. When Devon and Carpenter did not offer to reassign the operating rights to them six months before the lease expiration date, Stone and Loundagin filed an action against them for breach of contract, ejectment, trespass, conversion, an accounting and injunctive relief. In Stone I the Court held that the contract required Devon and Carpenter to make a reassignment offer six months before the lease expiration date but affirmed the partial summary judgment because it concluded Stone and Loundagin could not prove they suffered damages.
The Court considered whether the district court properly granted summary judgment for Devon and Carpenter on the claims for ejectment, specific performance, trespass, conversion, an accounting and injunctive relief. The record reflected that at the time the first summary judgment order was entered, the parties and the district court intended the order to be the final judgment. In Stone I the Court held that Devon breached the supplemental agreement when it did not make the reassignment offer by October 2, 2001. The Court further concluded that the lease never terminated and Devon retained the right to drill and produce the lands subject to the lease. Because Devon retained the right to drill and produce the lands, Stone and Loundagin could not show that they were entitled to possession of those lands or that Devon unlawfully kept them out of possession. The claims for trespass, conversion, specific performance or injunctive relief failed as well for the same reason.

Conclusion: Devon retained the right to drill and produce the lands so Stone and Loundagin could not show that they were entitled to possession of those lands or that Devon unlawfully kept them out of possession. The claims for trespass, conversion, specific performance or injunctive relief also failed for the same reason.

Affirmed.

J. Kite delivered the decision.

Link: http://tinyurl.com/psfh9h .

[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 113

Summary of Decision issued September 14, 2009

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

Case Name: CBC Geosolutions, Inc. v. Gas Sensing Technology Corp.

Citation: 2009 WY 113

Docket Number: S-08-0214

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

Representing Appellant (Defendants): Peggy A. Trent of Trent Law Office, Laramie, Wyoming.

Representing Appellee (Plaintiff): Philip A. Nicholas and Jason M. Tangeman of Anthony, Nicholas & Tangeman, Laramie, Wyoming

Issues: Whether the district court applied the correct legal standard in considering the request for a preliminary injunction to enforce non-compete and non-disclosure agreements between the parties. Whether the district court abused its discretion when it issued a preliminary injunction to enforce non-compete and non-disclosure agreements between the parties pending trial on the merits in this action.

Holdings: The purpose of a temporary injunction is to preserve the status quo until the merits of an action can be determined. And a temporary injunction rests upon an alleged existence of an emergency, or a special reason for such an order, before the case can be regularly heard. Also, the award of a temporary injunction is an extraordinary remedy which will not be granted except upon a clear showing of probable success and possible irreparable injury to the plaintiff, lest the proper freedom of action of the defendant be circumscribed when no wrong has been committed. In granting temporary relief by interlocutory injunction courts of equity do not generally anticipate the ultimate determination of the questions of right involved. They merely recognize that a sufficient case has been made out to warrant the preservation of the property or rights in issue in statu quo until a hearing upon the merits, without expressing, and indeed without having the means of forming a final opinion as to such rights.

In the present action, Appellants argue that the district court applied a federal standard not used in Wyoming when it required some showing of likelihood of success on the merits before it granted the preliminary injunction. Although the district court stated that there was a substantial likelihood that Appellee would prevail substantially on the merits it did not mention the federal standard or quote any federal precedent in its Findings of Fact. Further, a review of the correct standard makes it clear that likelihood of success on the merits is actually a factor that a district court must consider before granting a preliminary injunction under Wyoming law.

Appellants also contend that the district court improperly based its decision on the fact that the contracts signed by Appellants provide for injunctive relief. Appellants claim that the court ordered the injunction as a matter of contract, and therefore did not exercise its equitable powers in issuing the injunction. The district court did make a finding of fact that the non-compete agreements specifically authorize injunctive relief, however, it did so in the context of analyzing the facts under the proper standard for injunctive relief. It is proper for a court acting in equity to consider the remedies contemplated by the parties in reaching its conclusion on the equities. Thus, the district court did not erroneously award an injunction pursuant to contract but properly applied the equitable standards for granting an injunction.

Appellants next claim that the district court’s findings of fact are inadequate as a matter of law because the court did not make a finding that there was no adequate remedy available at law. Injunctions should only be issued when the harm is irreparable and no adequate remedy at law exists. Injunctive relief is appropriate when an award of money damages cannot provide adequate compensation. An injury is irreparable where it is of a peculiar nature, so that compensation in money cannot atone for it. The district court found that Appellees would suffer immediate, great, and irreparable harm and damage in the event that Appellants were allowed to compete with them in violation of the covenants-not-to-compete. Irreparable harm is, by definition, harm for which there can be no adequate remedy at law. Thus, the district court’s findings were not insufficient as a matter of law.

Appellants also argued that the district court abused its discretion in issuing the injunction because enforcement of the non-compete agreement was barred by the statute of frauds. However, there was enough evidence of the existence of a written contract to allow the district court to issue an injunction pending discovery and trial. Given the amount of evidence presented at the hearing indicating the existence of a written non-compete agreement, the district court did not abuse its discretion when it ordered an injunction pending further discovery and trial.

Appellants finally argued that a preliminary injunction was not appropriate because the non-compete agreements are unenforceable as a matter of law. However, these determinations will necessarily depend on facts that must be developed in due course at the appropriate stage of litigation. The district court found, based on the limited review required for a preliminary injunction, that the covenants were likely to be enforced. The district court found that there was evidence that a covenant not to compete existed in writing, that the document was signed ancillary to a legitimate employment relationship that constituted reasonable consideration, and that Appellee had presented evidence that could lead the court to conclude that a restriction that was national in nature but narrowly tailored to one aspect of the industry was reasonable under the circumstances. If any part of a covenant not to compete is found unreasonable and therefore unenforceable, the court may decline to enforce the unreasonable provisions. None of the terms of the non-compete agreement in this case were facially unreasonable and the court did not abuse its discretion when it found, based on the evidence before it at the hearing, that Appellee was entitled to an injunction pending full development of the facts and determination on the merits.

Conclusion: The district court correctly applied the law and did not abuse its discretion when it issued a preliminary injunction prohibiting Appellants from competing with their former employer during the pending litigation to enforce a covenant not to compete.

Affirmed.

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

Link: http://tinyurl.com/lqvbwm .

[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 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 .

[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 103

Summary of Decision issued June 28, 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: Olsen v. Kilpatrick & Malcom

Citation: 2007 WY 103

Docket Number: 06-190

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

Representing Appellant (Defendant): Daniel E. White of Woodard & White, PC, Cheyenne, Wyoming.

Representing Appellees (Plaintiffs): Gay Woodhouse and Lori L. Brand of Gay Woodhouse Law Office, PC, Cheyenne, Wyoming. Argument by Ms. Woodhouse.

Issues: Whether the district court abused its discretion when it entered an injunction against Appellant prohibiting him from violating the protective covenants of the subdivision where Appellant and Appellees own property. Whether the district court erred by refusing to join all landowners in the subdivision in a declaratory judgment action regarding the construction and validity of the covenants for that subdivision.

Facts/Discussion: Olsen challenged a district court ruling in favor of Kilpatrick regarding covenants governing the subdivision in which Olsen was building a pheasant farm.
The Court reviews the district court’s decision to grant injunctive relief for abuse of discretion. The permanent injunction enjoined Olsen from conducting preliminary preparation, maintaining on the property any structure, from breeding, keeping, raising poultry or game birds, and from displaying signs on the property. Covenants are contractual and therefore interpreted and enforced according to the principles of contract law.
Permanent Injunction: The Court was not convinced that the district court erred in relying on paragraph 4 in issuing its injunction. The law of contract plainly states that a contract is to be interpreted as a whole. The covenants were before the Court in their entirety having been entered into evidence at trial. The court’s consideration of paragraph 4 did not appear to constitute an abuse of discretion under the circumstances. The Court did not enter into an in-depth analysis of the district court’s discretion in this area because the order could be upheld on the basis of the parties’ intent as found in the contract. The Court stated it could uphold the district court’s decision based on the clear violation of paragraph 12 alone. The affirmative requirement that Olsen remove the pheasant pen from his land was not an abuse of discretion even in the face of Olsen’s compliance with the preliminary injunction.
Declaratory Relief: Citing Revelle, the Court stated that the trial court provided effective relief through injunction so it was unnecessary to go further. The Court reversed the portions of the district court’s judgment that constituted declaratory relief as the injunctive relief provided effectively resolved the dispute between the parties.

Holding: The trial court did not abuse its discretion in granting injunctive relief because Appellant was in clear violation of Paragraph 12 of the covenants the court found to be in effect between the parties. The Court did not address the jurisdictional issues related to declaratory relief because the district court’s injunction provided full and effective relief to Appellee and effectively determined the rights of the parties to this action.

Reversed in part, affirmed in part.

C.J. Voigt delivered the decision.

Link: http://tinyurl.com/3dk9tw .

Summary 2007 WY 11

Summary of Decision issued January 19, 2007

[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.]

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

Case Name: Sundance Mountain Resort, Inc. & Cundy v. Union Telephone Co.

Citation: 2007 WY 11

Docket Number: 05-300

Appeal from the District Court of Crook County, the Honorable Gary P. Hartman, Judge

Representing Appellants (Defendants): Cecil A. Cundy of Cundy Law Office, Sundance, Wyoming.

Representing Appellee (Plaintiff): Paul J. Drew of Drew Law Office, PC, Gillette, Wyoming.

Issue: Whether or not the district court properly exercised jurisdiction by ordering Appellants/Defendants to appear and show cause in Weston County in contempt proceedings affecting an estate in real property in Crook County where Appellants/Defendants resided in Crook County, Wyoming. Whether or not the injunction sought to be enforced exceeded the rights granted Appellee in its Communication Site Lease.
Facts/Discussion: This appeal arises from facts previously considered in Cundy v. Range Tel. Coop., Inc. and Union Telephone Co. where the Court affirmed a district court order enjoining Sundance and Mr. Cundy from interfering with Union’s use of its leasehold on Sundance Mountain and access to it across lands belonging to Sundance. Appellants were held in contempt of court for violating the district court order enjoining them from interfering with Union Telephone Company’s (Union) access to its leasehold. Appellants appeal from the contempt order. Determinations concerning venue are within the district court’s discretion and the Court reviews the denial of a motion for change of venue only for abuse of discretion. The power to summarily punish for contempt is likewise vested in the district court. The Court will not overturn a district court contempt order absent an abuse of discretion.
Venue: Despite Appellant’s continued use of the word “jurisdiction” in his re-statement of the issues, the parties appeared to be in agreement that the issue did not concern the district court’s jurisdiction to hear and decide Union’s motion; rather, the issue was one of venue. Union brought the action in the county in which its leasehold was situated and all papers concerning the action were filed there and all proceedings were held in the proper county until the show cause hearing. Upon request of counsel, the district court vacated a scheduled telephone hearing and scheduled a hearing requiring personal attendance of counsel. The district court set the hearing in Weston County because no courtroom was available in Crook County. Venue normally is founded upon convenience to the parties. Appellants did not argue the Weston County forum was inconvenient. In the district court and the Court Appellants argued the district court violated the venue statute by convening the hearing in a venue other than Crook County. The Court found the district court’s action to be a reasonable decision based upon proper considerations of convenience and the allocation of judicial resources.
The Injunction: After careful review of the record on appeal, it appeared Appellants failed to raise the argument the injunction exceeded the rights granted in the lease in the district court. Because no transcript of the contempt hearing appears in the record, it was not possible for the Court to determine whether the argument was presented orally during the hearing. The Court will not consider arguments made for the first time on appeal.
Holding: The Court found the district court’s action setting the show cause hearing in an adjoining county with an available courtroom to be a reasonable decision based upon proper considerations of convenience and the allocation of judicial resources. The Court affirmed the district court decision regarding the injunction because the record designated by the parties provided no indication Appellants presented the argument in district court that the injunction went beyond the scope of the lease. Appellants had several opportunities to present the claim, so the Court declined to address the argument.

Affirmed.

J. Kite delivered the decision.

Link: http://tinyurl.com/3cl7gl .