Appeal from the District Court of Fremont County The Honorable Norman E. Young, Judge
The opinion of the court was delivered by: Voigt, Justice.
Before KITE, C.J., and HILL, VOIGT, BURKE, and DAVIS, JJ.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.
[¶1] The appellants, Ridgerunner, LLC, Sarah A. Carrelli, and Cynthia D. Porter, appeal the district court's decision to dismiss on summary judgment their claims for breach of contract and breach of the covenant of good faith against the appellees, Meisinger Investments, Inc. and Richard Meisinger. The appellants claim that the district court improperly converted the appellees' motion to dismiss the complaint to a motion for summary judgment and, therefore, the case must be reversed. After consideration, we find that the district court did not properly convert the appellees' motion to dismiss to a motion for summary judgment, and that the appellants' complaint is sufficient to survive the appellees' motion to dismiss.
[¶2] Did the district court properly dismiss the appellants' complaint for breach of contract and breach of the covenant of good faith brought against the appellees?
[¶3] On July 15, 2005, appellants Sarah A. Carrelli and Cynthia D. Porter, through their company, Ridgerunner, LLC, purchased Mom's Malt Shop from appellee Meisinger Investments, Inc. Approximately six years after the transaction, the appellants filed a complaint against Meisinger Investments, Inc. and one of its owners, Richard Meisinger, for breach of contract and breach of the covenant of good faith. The appellants alleged that the appellees misrepresented the inventory of the equipment of Mom's Malt Shop, that much of the food included in the sale was outdated or spoiled, and that appellee Richard Meisinger and Meisinger Investments, Inc.'s other owner, Kevin Meisinger, had been telling customers that the appellants were serving bad food and that the appellees were attempting to reclaim the business. The appellants also alluded to the fact that Kevin Meisinger vandalized the business on several occasions.
[¶4] In response to the complaint, the appellees filed a motion to dismiss the complaint. They asserted that the complaint failed to state a claim upon which relief can be granted because all of the allegations of wrongdoing were directed toward Kevin Meisinger. Kevin Meisinger, however, was not a named defendant in the complaint because he is deceased. The appellees pointed out that the sale of Mom's Malt Shop was between the appellants and Meisinger Investments, Inc., and that the appellants had not made any allegations that would justify piercing the corporate veil to hold Richard Meisinger personally responsible for the actions of the corporation. In response to the appellees' motion to dismiss, the appellants argued that Kevin Meisinger, Richard Meisinger, and Meisinger Investments, Inc. were all acting as agents of one another when the contract to sell Mom's Malt Shop was finalized, and that the appellants could not make any allegations regarding piercing the corporate veil until discovery had taken place.
[¶5] After a hearing, the district court dismissed the appellants' complaint. Although the order was titled "Order Granting [Appellees'] Motion to Dismiss," the district court explained in the body of the order that it was converting the motion to dismiss to a motion for summary judgment, pursuant to W.R.C.P. 12(c) and 56, because the district court considered evidence outside of the pleadings when rendering its decision. The district court found that the contract for the sale of Mom's Malt Shop was between the appellants and Meisinger Investments, Inc. Kevin Meisinger and Richard Meisinger were the only shareholders, officers, and directors of the corporation. Meisinger Investments, Inc. was dissolved and the business wound up in 2008, and Kevin Meisinger is now deceased. Thus, the district court found that Richard Meisinger was the only party on which the appellants could attempt to impose liability under the contract, but only if Richard Meisinger could be held personally liable for the acts and obligations of Meisinger Investments, Inc. The district court concluded that the appellants provided nothing more than "mere allegations or denials" in their pleadings, which was insufficient to survive a motion for summary judgment, and thereby dismissed the complaint. The appellants now appeal that order.
[¶6] This case is somewhat unique from many cases before this Court in that much of the central issue must be resolved before we can determine what the appropriate standard of review for the ultimate issue actually is. The appellees filed, and the appellants responded to, a motion to dismiss. However, the district court converted it to a motion for summary judgment. On appeal, the appellants claim that the district court improperly converted the motion to one for summary judgment. Whether the district court's conversion was proper is fundamental to our standard of review. If the conversion was proper, we will review whether summary judgment was granted appropriately. If the requirements for a proper conversion were not accomplished, we must review whether the dismissal was appropriate pursuant to a motion to dismiss standard. Torrey v. Twiford, 713 P.2d 1160, 1162, 1164 (Wyo. 1986).
[¶7] Rule 12(b)(6) of the Wyoming Rules of Civil Procedure states that a party may file a motion to dismiss a complaint if the complaint "fail[s] to state a claim upon which relief can be granted[.]" W.R.C.P. 12(b)(6). The rule goes on to state:
If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given ...