Summary 2010 WY 21

Summary of Decision issued February 26, 2010

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

Case Name: Wyo. Med. Ctr., Inc. v. Wyo. Ins. Guar. Assn.

Citation: 2010 WY 21

Docket Number: S-09-0109

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

Representing Appellant Wyoming Medical Center, Inc.: Stephenson D. Emery of Williams, Porter, Day & Neville, PC, Casper, Wyoming.

Representing Appellee Wyoming Insurance Guaranty Association: James R. Bell of Murane & Bostwick, LLC, Casper, Wyoming.

Facts/Discussion: After the Wyoming Medical Center’s (WMC) insurer became insolvent, the Wyoming Insurance Guaranty Assoc. (WIGA) paid claims made against WMC. WIGA then filed a complaint against WMC claiming that it was obligated to pay the deductibles for each claim. Asserting that WIGA stood in the shoes of the insurer (PHICO), WMC argued that WIGA’s claim was barred by an earlier district court ruling that WMC was not obligated to pay the deductibles to its insolvent insurer. WIGA filed a summary judgment motion which the district court granted, ruling that WMC was obligated to pay the deductibles.

Res judicata: For res judicata to apply, the parties, the subject matter, the issues and the capacities of the persons must be identical. WMC contended that the requirement that the parties be identical was satisfied because PHICO and WIGA were in privity with each other. WMC asserted that WIGA authorized PHICO to demand payment from WMC of the deductible amounts on WIGA’s behalf. Pursuant to the plain language of § 26-31-106(a)(i), WIGA is obligated to pay “covered claims” which are those claims the insurer would have been obligated to pay but for its insolvency. The Court stated the legislature appeared to intend WIGA pay only what an insurer would have paid had it remained solvent. A solvent insurer would have been obligated to pay the claim amount less the deductible. There is wide support for construing insurance guaranty association statutes to mean that the rights and duties of such associations are limited to those explicitly set forth in the statutes. Res judicata does not apply to bar WIGA’s claim.
Set-off for attorneys’ fees: After PHICO’s insolvency, WMC paid the attorney fees at issue directly to the law firm for services it provided in defending WMC against claims covered under the policy. WMC asserted that PHICO, and therefore WIGA, would have been required to reimburse WMC for attorney fees and that a set-off against the judgment was an appropriate way to accomplish that. The Court stated that the Act reflected that the legislature drew the line between what is covered and what is not. Section 26-31-106(a)(i) makes it clear that WIGA was obligated to pay covered claims arising out of and within the coverage of an insurance policy. Section 26-31-103(a)(ii)(D) excludes supplementary payment obligations including attorney fees.

Conclusion: WIGA and PHICO were not identical and not in privity so as to make it appropriate to apply the default judgment in the breach of contract action against WIGA to bar its claim under the Insurance Guaranty Act. The definition of “covered claims” the legislature adopted expressly excludes attorney fees. The Court concluded that WIGA was not responsible for WMC’s attorney fees.

Affirmed.

J. Kite delivered the decision.

Link: http://tinyurl.com/y98qyyv .

[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 96

Summary of Decision issued August 15, 2008

[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: R.C.R., Inc. v. Deline

Citation: 2008 WY 96

URL: http:// wyomcases.courts.state.wy.us/applications/oscn/DeliverDocument.asp?CiteID=453653

Docket Number: S-07-0029

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

Representing Appellants (Defendants): Steven F. Freudenthal of Freudenthal Salzburg & Bonds, Cheyenne, Wyoming.

Representing Appellees (Plaintiffs): J. Kent Rutledge of Lathrop & Rutledge, Cheyenne, Wyoming; and Frederick B. Skillern of Montgomery Little Soran & Murray, Denver, Colorado

Date of Decision: August 15, 2008

Issues: Whether principles against splitting causes of action, of judicial estoppel, of collateral estoppel and of res judicata, as applied to the facts contained in the pleadings, evidence, findings, conclusions and rulings in the easement litigation and the private road litigation, bar the Appellees' claims. Whether the district court erroneously applied Lozier v. Blattland Investments, LLC, 2004 WY 132, 100 P.3d 380 (Wyo. 2004), without regard to the factual differences in that the Appellees do not own the property and no common source of title for the lands at issue, or the applicable rules against splitting causes of action, of judicial estoppel, of collateral estoppel and of res judicata. Whether controlling legal principles prohibit the unilateral expansion of the size of the dominant estate to be served by the easement.

Holdings: Wyoming has recognized the rule against splitting causes of action. In the present action, it appears that Appellant has relentlessly pursued legal, as well as perhaps some extra-legal, remedies in his campaign to frustrate the Appellees' enjoyment of their property. It is Appellant who has created, or recreated, causes of action that the Appellees, of necessity, had to pursue in self-defense. The purpose of the rule against splitting causes of action is "to promote fairness to the parties by protecting defendants against fragmented, harassing, vexatious, and costly litigation, and the possibility of conflicting outcomes." While Appellant is nominally the "defendant" in this litigation (as he has been in the past as well), it is Appellant's conduct/misconduct that has necessitated all of the legal proceedings. Although Appellant did not develop this issue in much detail or with much clarity, it is evident from the record that the Appellees' lawsuit was prompted by harassment from Appellant. The Appellees' action was not barred by the rule against splitting causes of action.

Judicial estoppel is applied to foreclose a party from maintaining inconsistent positions in judicial proceedings. The doctrine is applied sparingly and not in a highly technical manner that prevents litigation on the merits. Judicial estoppel is sometimes referred to as a doctrine which estops a party to play fast and loose with the courts or to trifle with judicial proceedings. It is an expression of the maxim that one cannot blow hot and cold in the same breath. A party will just not be allowed to maintain inconsistent positions in judicial proceedings. Judicial estoppel requires that where a man is successful in the position taken in the first proceeding, then that position rises to the dignity of conclusiveness. Appellant's claim of judicial estoppel is based upon his contention that the Appellees should be estopped from claiming that the easement benefits Rainbow Canyon, Inc., lands because they did not seek to have Rainbow Canyon, Inc., added as a party to earlier private road litigation. The present litigation does not, however, seek to adjudicate the right of Rainbow Canyon, Inc., or any of its owners to use the easement. Rather, this litigation concerns the Appellees' use of the easement. Thus, judicial estoppel does not apply to the circumstances presented here.

Collateral estoppel bars re-litigation of previously litigated issues (as contrasted with "claims"), as well as issues which could have been but which were not raised in the prior litigation. These factors are used in the analysis of collateral estoppel: (1) Whether the issue decided in the prior adjudication was identical with the issue presented in the present action; (2) whether the prior adjudication resulted in a judgment on the merits; (3) whether the party against whom the collateral estoppel is asserted was a party or in privity with a party to the prior adjudication; and (4) whether the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. The prior litigation in question dealt only with the location of the easement and not its scope and hence collateral estoppel did not bar the Appellees from pursuing this litigation. Moreover, it was Appellant's conduct in attempting to unilaterally limit the Appellees' use of the easement and otherwise interfere with their property rights that necessitated this litigation. The only one of those four factors that is met here is that the parties are the same. The issues are not identical, there was a determination on the merits but both the issues and the claims are entirely different here, and the Appellees did not have an opportunity to litigate the issues now before us because they had not yet come to light. The Appellees' action was not barred by the principles that constitute collateral estoppel.

Res judicata bars the re-litigation of previously litigated claims or causes of action, as well as claims that could or should have been raised in the prior litigation. These factors are applied to the analysis of res judicata: (1) Identity in parties; (2) identity in subject matter; (3) the issues are the same and relate to the subject matter; and (4) the capacities of the persons are identical in reference to both the subject matter and the issues between them. The resolution of the collateral estoppel contentions applies equally to res judicata. Res judicata did not bar this litigation, which was prompted almost exclusively by Appellant's improper interference with the Appellees' property rights.

Appellant contends that the interpretation the district court placed on Lozier v. Blattland, changes the law dramatically because its "implicit" holding requires a new evidentiary hearing in all cases to determine the intention of the parties, even where the matter has been previously and fully litigated. Appellant postulates that such a construction will substantially chill the free transferability of any real property which is a subservient estate to any easement since the scope and burden of that easement would be subject to re-interpretation and re-evaluation at any time a dominant estate holder requested. It suffices to note that Appellant grossly exaggerates the doom that the district court's application of that case, in these circumstances, spells for owners of servient estates. To allay any lingering concerns, the district court's decision in this case is not viewed as altering/expanding/contracting the essence of the holding in Lozier in any way.

Appellant also contends that the district court's order amounts to allowing the Appellees to unilaterally expand the size of the dominant estate. Appellant has made no claim that the "burden" on the easement had been expanded and the facts establish that the Appellees used the easement at issue only a few times a year. The district court did not err in taking evidence about the circumstances which surrounded the creation and use of the easement and none of its findings of fact is clearly erroneous. Indeed, the district court took a very sensible and rational approach to resolving this festering conflict. The uses the Appellees make of the easement are reasonable in every respect, given the language used in the written conveyance. Those uses are much the same as the uses made prior owners. The district court did not err by going outside the four corners of the easement to ascertain its "extent" or "scope," and its conclusions are wholly consistent with governing law.

There is no merit in any of Appellant's contentions. Therefore, the judgment of the district court is affirmed.

J. Hill delivered the opinion for the court.