Alm v. Sowell

Citations: 899 P.2d 888; 1995 Wyo. LEXIS 127; 1995 WL 444425Docket: No. 94-112

Court: Wyoming Supreme Court; July 28, 1995; Wyoming; State Supreme Court

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The district court's procedures in converting a motion to dismiss into a motion for summary judgment were reviewed, focusing on whether the appellants, Donald L. Aim, Sr. and D.A. Stinger Service, Inc., received adequate notice and opportunity to respond to this conversion. The court affirmed the district court’s actions. Appellants argued that the district court improperly considered materials outside the pleadings without proper notice and failed to recognize a genuine issue of material fact, asserting that their complaint should be evaluated under the standard for a motion to dismiss. The appellees, M. Kyle Sowell and Alcova Lakeside Marina Limited, countered that the appellants waived the notice requirements and that the court's decision was justified under the motion to dismiss standard.

The factual background reveals that in 1988, Aim, through Stinger, completed construction work for Sowell valued at $13,138. Due to Sowell's inability to pay, an agreement was made in April 1989 for compensation through boat dock and lot rent and services over several years. Aim claimed to have made improvements to the property worth $35,000, and the Marina honored the agreement until 1994, when they demanded removal of Aim’s property. Aim filed a verified petition on March 10, 1994, seeking clarification of rights and an injunction against the Marina. Sowell moved to dismiss, citing a confirmed Chapter 11 bankruptcy plan that satisfied the Marina's obligations. Aim's amended complaint was filed on April 13, 1994, followed by Sowell and the Marina's motion to dismiss, which included bankruptcy documents. Aim opposed the motion, acknowledging that executory contracts typically require bankruptcy court approval and indicated he would seek a transcript of a relevant hearing to argue for such approval.

Aim claimed that Sowell was insolvent at the time of his work and that they had an agreement where Aim would not be paid in cash but would receive dock and lot rentals instead. When Sowell, operating as Alcova Lakeside Marina, filed for bankruptcy, Aim was recognized as a creditor, but Stinger was not, and Aim asserts that no payments were made under the bankruptcy plan. Instead, payments were made by a new limited partnership as per their April 1989 agreement for five years. In February 1994, the Marina ordered Aim to vacate the premises, prompting the lawsuit. Aim argued that due to the Marina's failure to comply with the bankruptcy plan and adherence to the 1989 agreement, he was misled into waiving his rights under the bankruptcy. He also stated he spent over $35,000 improving the property he received under their agreement. Alcova countered that the dock and lot rentals from 1989 to 1993 constituted payments under the bankruptcy plan. 

On April 19, 1994, the district court heard Sowell's motion to dismiss, which was later converted to a motion for summary judgment, resulting in a ruling favoring Sowell and the Marina on five of six counts. Aim appealed, but the appeal was initially deemed non-appealable under Wyo. R.Civ. P. 54(b). The sixth count was set for trial, and after the final judgment was issued, Aim filed his brief in January 1995. Aim contended that he did not receive the required notice for the conversion of the motion to dismiss, which Wyo.R.Civ.P. 12(b) mandates should allow ten days' notice to the non-moving party. While Aim’s claim of lack of notice seemed valid initially, the court found that the issues were sufficiently joined by March 1994, indicating that Aim was aware of the forthcoming proceedings. The court noted that although the decision letter was issued quickly, the judgment itself was not entered until May 2, 1994.

Sowell and the Marina filed a motion to dismiss, which included extrinsic matters potentially decisive for Aim’s complaint. Following this, Aim had over two weeks to present materials to the district court or request a continuance but did not claim he was surprised by the conversion of the motion to a summary judgment. The court found that Aim received adequate notice of this conversion and had a fair opportunity to oppose it. The court affirmed the conversion of the motion and ruled that the appropriate standard for evaluating the issues was that of a summary judgment. Additionally, it noted that Sowell operated the Alcova Lakeside Marina before his bankruptcy, after which Alcova Lakeside Marina Limited succeeded him. Aim’s claims, along with those of Stinger, were generally similar, with some references to Stinger for clarity. Aim also had a claim for services performed by Stinger in 1991, and the Marina counterclaimed for unpaid bills. These issues were not part of the appeal. The district court denied Sowell and the Marina's attempt to supplement the record with unreported hearing details, citing a lack of independent recollection. Aim did not specify how the requested transcript or other materials would impact the case's resolution.