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Patel v. CWCapital Asset Management

November 16, 2010

IN RE PIYUSH PATEL, TRACY ZUBROD, APPELLANT (PLAINTIFF),
v.
CWCAPITAL ASSET MANAGEMENT, LLC, APPELLEE (DEFENDANT).



W.R.A.P. 11 Certified Question from the United States Bankruptcy Court for the District of Wyoming The Honorable Peter J. McNiff, Judge.

The opinion of the court was delivered by: Voigt, Justice.

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

[¶1] A two-part question relating to service of writs of execution, pursuant to Wyo. Stat. Ann. § 1-19-103 (LexisNexis 2009), was certified to this Court from the United States Bankruptcy Court for the District of Wyoming. The first question-which we answer in the positive-is whether service of a writ of execution is valid when made on a corporation's registered agent where a corporate officer is not present when service is attempted. The second question-which we answer in the negative-is whether service of a writ of execution is valid when made on a law partner of the corporation's registered agent.

ISSUES

[¶2] Although presented as one certified question, there are actually two questions for this Court to answer*fn1

1. Is a security interest in corporate stock perfected, pursuant to Wyo. Stat. Ann. § 1-19-103, when service of a writ of execution is made on the corporation's registered agent because a corporate officer is not present when service is attempted?

2. Is a security interest in corporate stock perfected, pursuant to Wyo. Stat. Ann. § 1-19-103, when service of a writ of execution is made on a law partner of the corporation's registered agent?

FACTS*fn2

[¶3] CWCapital Asset Management, LLC (CWCapital) received a money judgment against Piyush Patel (Patel). Patel owned 100% of the stock of P&P, Inc., and 50% of the stock of PJP Enterprises, Inc., and was the president of both corporations. CWCapital had the sheriff attempt to serve two writs of execution on Patel, as the corporations' president, in order to levy against his shares of stock in both corporations to satisfy the money judgment. Patel was neither at his business office nor his home when service was attempted, so the sheriff served both writs on Timothy Kingston, who was the registered agent for service of process for PJP Enterprises, Inc. At the time process was served on Kingston, he was the law partner of Charles Graves, who was the registered agent for P&P, Inc.

[¶4] In March 2009, Patel filed a Chapter 11 reorganization bankruptcy, which was later converted to a Chapter 7 liquidation bankruptcy and a trustee was appointed. After CWCapital objected to Patel's use of cash collateral, the trustee filed an adversary proceeding requesting that the bankruptcy court find that CWCapital had failed to perfect its interest in the stock from either corporation. That filing led to this certification.

DISCUSSION

Is a security interest in corporate stock perfected, pursuant to Wyo. Stat. Ann. § 1-19-103, when service of a writ of execution is made on the corporation's registered agent because a corporate officer is not present when service is attempted?

[¶5] The trustee argues that CWCapital never perfected a security interest in the debtor's corporate stock because service of the writ of execution did not comply with Wyo. Stat. Ann. § 1-19-103. Wyo. Stat. Ann. § 1-19-103 provides as follows:

To levy execution or attachment on rights or shares in a corporation, the officer making the levy shall leave a true copy of the writ, with any officer of the corporation and if there is no officer, then with the resident manager or agent thereof, together with the officer's certificate stating that he levies ...


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