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Foxley & Co. v. Ellis

February 11, 2009

FOXLEY & CO., A DELAWARE CORPORATION, APPELLANT (PLAINTIFF),
v.
JOHN R. ELLIS AND PATRICIA A. ELLIS, APPELLEES (DEFENDANTS).



Appeal from the District Court of Carbon County The Honorable Wade E. Waldrip, Judge.

The opinion of the court was delivered by: Golden, Justice

Before VOIGT, C.J., and GOLDEN, HILL, KITE, BURKE, JJ.

[¶1] Foxley & Co. (hereinafter referred to as "Foxley") is a corporation involved in cattle ranching operations. John R. and Patricia A. Ellis are husband and wife. They were the owners of a ranch near Medicine Bow, Wyoming, commonly known as the Difficulty Creek Ranch, which they sold to Foxley. Foxley claims the Ellises never informed it of a common use agreement with a neighboring ranch that applied to grazing on a portion of the Difficulty Creek Ranch. Foxley sued the Ellises for, among other things, breach of contract and breach of warranty deed. The district court granted summary judgment to the Ellises on both counts. Finding that genuine issues of material fact exist, we reverse.

[¶2] On a further issue, Foxley attempted to amend its complaint for a second time six months after it filed its initial complaint. In the interim, extensive discovery had been conducted. The district court determined that allowing the amendment would unduly prejudice the Ellises and denied the motion to amend. Finding no abuse of discretion under the circumstances, we affirm this ruling.

ISSUES

[¶3] Foxley presents three issues for our consideration:

1. Did the District Court err in granting summary judgment to Appellees on Appellant‟s breach of contract claim and in denying Appellant‟s Motion for Summary Judgment on the same issue?

2. Did the District Court err in granting summary judgment to Appellees on Appellant‟s breach of warranty claim and in denying Appellant‟s Motion for Summary Judgment on the same issue?

3. Did the District Court err in denying Appellant‟s Motion to File a Second Amended Complaint?

FACTS

[¶4] The Difficulty Creek Ranch has been in the Ellis family since 1899. It is comprised almost equally of deeded and leased lands, for a total of around 24,600 acres. The majority of the leased lands are owned by the federal government and administered by the Department of the Interior through the Bureau of Land Management (BLM). The BLM lands integrate with the private lands in a checkerboard pattern.*fn1

[¶5] One such checkerboard area is known as the "West Pasture," comprising just under 4,500 acres. It contains two full private sections plus a private lease section. It also contains three full federal sections plus parts of two other federal sections.

[¶6] In 1941, West Pasture lands became subject to a Memorandum of Understanding (the "Agreement") entered into by John Ellis‟s father and neighboring ranchers. Otherwise known as a range line agreement, the Agreement allotted grazing priorities amongst the neighbors on lands controlled by each neighbor. The sole remaining successor in interest to this Agreement is the 9V Ranch, which, pursuant to the Agreement, enjoys grazing rights in the West Pasture in common with Foxley.

[¶7] Exactly which West Pasture lands are covered by the Agreement -- federal and/or private lands -- is disputed. At the very least the currently accepted application of the Agreement is to allot 9V common use rights to graze on the federal sections of land in the West Pasture. For the 2002 grazing season, the BLM allotted 9V 314 AUMs*fn2 for federal land in the West Pasture. The West Pasture, however, has historically been operated as a single integrated unit. There is no internal fencing. As a practical matter, therefore, 9V cattle are free to range all lands within the West Pasture.

[¶8] In 2004, the Ellises entered into extensive negotiations with Foxley for the sale of Difficulty Creek Ranch. Ultimately, in October 2004, Foxley purchased the Difficulty Creek Ranch. It is undisputed that Foxley was never expressly informed of 9V‟s common use rights to lands in the West Pasture before the purchase of the Difficulty Creek Ranch.

[ΒΆ9] Foxley did not discover the common use rights until the spring of 2005. After discovering the common use, Foxley brought suit against the Ellises and their brokers, alleging many different causes of action. All causes of action were either dismissed or summarily adjudicated. The causes of action at issue in this appeal are breach of contract and breach of warranty ...


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