Summary 2012 WY 79

Summary of Decision June 6, 2012


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

Case Name: KM UPSTREAM, LLC, a Delaware limited liability company v. ELKHORN CONSTRUCTION, INC., a Wyoming corporation.

ELKHORN CONSTRUCTION, INC., a Wyoming corporation v. KM UPSTREAM, LLC, a Delaware limited liability company

Docket Number: S-11-0185, S-11-0207, S-11-0186, S-11-0208

URL: http://wyomcases.courts.state.wy.us/applications/oscn/DeliverDocument.asp?CiteID=465790

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

Representing Appellant (Plaintiff/Defendant): Drake D. Hill, Rebecca H. Noecker, and Michael L. Beatty of Beatty, Wozniak & Reese, PC. Argument by Ms. Noecker.

Representing Appellee (Plaintiff/Defendant): Mark W. Harris of Harris Law Firm, PC; Scott D. Cessar and Audrey K. Kwak of Eckert Seamans Cherin & Mellott, LLC. Argument by Mr. Cessar.

Date of Decision: June 6, 2012

Facts: The district court granted summary judgment to Elkhorn Construction, Inc. (Elkhorn), a subcontractor, on its mechanic’s lien claim against KM Upstream, LLC (KM), the owner of an amine plant, the construction of which plant underlies all the issues of this case. KM appealed, arguing that summary judgment was improper because of the existence of genuine issues of material fact, and because the district court did not have jurisdiction to proceed with the case, given the automatic stay arising in the bankruptcy proceedings of Newpoint Gas, LP (Newpoint, LP).[1] KM also asserts that the district court could not proceed in the absence of Newpoint because Newpoint, the contractor, is an indispensable party. Elkhorn cross-appealed, contending that the district court should have adjudicated its claimed oil and gas lien, in addition to the mechanic’s lien, thereby making attorney’s fees and costs available.

Because of a W.R.C.P. 54(b) certification issue, the appeal and the cross-appeal were each filed twice. The resulting four docketed cases, as referenced in the heading of this opinion, have been joined for briefing, argument, and opinion.

Issues: 1) Did the automatic stay in Newpoint, LP’s bankruptcy deprive the district court of jurisdiction to enter summary judgment in this case? 2) Did the district court err in granting summary judgment in the absence from this case of Newpoint, an indispensable party? 3) Did the district court err in granting summary judgment in the absence from this case of HFG Engineering US, Inc. (HFG), an alleged joint venturer with Newpoint, and therefore an indispensable party? 4) Did the district court err in finding no genuine issues of material fact? 5) Did the district court err in awarding summary judgment in an amount exceeding the contract price where Wyo. Stat. Ann. § 29-2-101(b) (LexisNexis 2007) requires that the work or materials establishing a mechanic’s lien be furnished under a contract?

Holdings: The automatic stay in the bankruptcy of the contractor, Newpoint, did not deprive the district court of jurisdiction to enter summary judgment in favor of the subcontractor, Elkhorn, in an in rem lien foreclosure action against the owner. Furthermore, because the lien foreclosure was an in rem proceeding not requiring the presence in the case of either Newpoint or HFG, the district court did not err in proceeding in their absence. Elkhorn presented a prima facie case in support of its motion for summary judgment, and KM’s argumentative and speculative response did not prove the existence of genuine issues of material fact, making summary judgment appropriate. The labor and materials supporting the mechanic’s lien claim were furnished under a contract and did not exceed the time and materials contract price, as determined by the conduct of the parties. Elkhorn’s Lien Statement set forth both a mechanic’s lien claim and an oil and gas lien claim. Prejudgment interest was an appropriate part of the damage award in the summary judgment order because Elkhorn’s claim was a liquidated claim in the sense that it was readily determinable by simple mathematical computations. The district court did not determine that $181,369 of Elkhorn’s lien claim was not valid; rather the district court determined that $181,369 of Elkhorn’s lien claim was disputed, meaning that such requires remand and resolution in the district court. Resolution of the mechanic’s lien claim in favor of Elkhorn did not make moot the issues of the validity and amount of Elkhorn’s oil and gas lien claim. Affirmed in part and reversed in part and remanded to the district court for further proceedings consistent herewith.

Justice Voigt delivered the opinion for the court.