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Ruby River Canyon Ranch, Ltd. v. Flynn

Supreme Court of Wyoming

May 21, 2015

RUBY RIVER CANYON RANCH, LTD, a Colorado Limited Partnership; and WESTERN CONSERVATION PARTNERS I, LLC, a Colorado Limited Liability Company, Appellants (Plaintiffs),
v.
DENNIS S. FLYNN, individually and as trustee, NANCY L. FLYNN, individually and as trustee, the DENNIS S. FLYNN REVOCABLE TRUST under agreement dated April 2, 2009, Dennis S. Flynn, Trustee, the NANCY L. FLYNN REVOCABLE TRUST under agreement dated April 2, 2009, Nancy L. Flynn, Trustee, WILLIAM I. KETTLEWELL and GAYLE A. KETTLEWELL, Appellees (Defendants). DENNIS S. FLYNN, individually and as trustee, NANCY L. FLYNN, individually and as trustee, the DENNIS S. FLYNN REVOCABLE TRUST under agreement dated April 2, 2009, Dennis S. Flynn, Trustee, the NANCY L. FLYNN REVOCABLE TRUST under agreement dated April 2, 2009, Nancy L. Flynn, Trustee, WILLIAM I. KETTLEWELL and GAYLE A. KETTLEWELL, Appellants (Defendants),
v.
RUBY RIVER CANYON RANCH, LTD, a Colorado Limited Partnership; and WESTERN CONSERVATION PARTNERS I, LLC, a Colorado Limited Liability Company, Appellees (Plaintiffs).

Appeal from the District Court of Albany County The Honorable Jeffrey A. Donnell, Judge.

Representing Appellants, S-14-0215: Alexander K. Davison, Patton & Davison, Cheyenne, Wyoming.

Representing Appellees, S-14-0215: Randall B. Reed and David J. Willms, Dray, Dyekman, Reed & Healey, P.C., Cheyenne, Wyoming. Argument by Mr. Reed.

Before BURKE, C.J., and HILL, KITE, DAVIS, and FOX, JJ.

BURKE, Chief Justice.

[¶1] Ruby River Canyon Ranch, Ltd. entered into an agreement to purchase the eastern portion of the Squaw Peak Ranch from Dennis and Nancy Flynn and William and Gayle Kettlewell (Sellers). Sellers financed part of the purchase price and, after Ruby River defaulted on the Promissory Note, Sellers initiated foreclosure proceedings. Ruby River and its successor in interest, Western Conservation Partners I, LLC (Buyers), filed a complaint for declaratory judgment and a motion for a temporary restraining order to halt the foreclosure. Buyers subsequently amended their complaint, adding claims of fraud, breach of the covenant of good faith and fair dealing, and adverse possession. Sellers counterclaimed, asserting that Buyers had breached the terms of the Promissory Note. Both parties filed competing motions for summary judgment.

[¶2] The district court granted summary judgment in favor of Sellers on all claims. In Docket No. S-14-0215, Buyers challenge the grant of summary judgment in favor of Sellers with respect to Buyers' claim of adverse possession, as well as the grant of summary judgment in favor of Sellers on Sellers' breach of contract claim. In Docket No. S-14-0216, Sellers challenge the denial of their request for attorney's fees. We affirm the district court's award of summary judgment in Docket No. S-14-0215, and reverse the denial of Sellers' request for attorney's fees in Docket No. S-14-0216.

ISSUES

[¶3] In Docket No. S-14-0215, Buyers present the following issues:

1. Were there disputed issues of material fact that precluded the court from granting summary judgment in favor of Sellers on Buyers' adverse possession claim?
2. Was the intent of the parties' Escrow Agreement to preserve the status quo of the foreclosure case or to act as a settlement agreement of the foreclosure case?

In Docket No. S-14-0216, Sellers present the following issue:

1. Did the district court err in denying Sellers' request for attorneys' fees in this case when the Sellers prevailed on all claims for relief asserted by Buyers?

FACTS

[¶4] During the summer of 2003, Buyers expressed interest in purchasing the Squaw Peak Ranch, a 2, 700 acre ranch near Douglas, Wyoming, from Sellers. In July, Buyers' agents toured the property and were allegedly informed that a certain 40-acre parcel was included in the property listed for sale. Buyers were subsequently provided with a legal description of the property which specifically excluded the 40-acre parcel.

[¶5] In September 2003, Buyers entered into an agreement to purchase the Squaw Peak Ranch from Sellers. The legal description of the property contained in the parties' purchase agreement specifically excluded the 40-acre parcel. The parties subsequently agreed to divide the purchase into separate transactions for the "East" and "West" portions of the ranch, which resulted in the creation of two additional purchase agreements. The 40-acre parcel at issue is adjacent to the East Ranch and was specifically excluded from the East Ranch Purchase Agreement. In October, Buyers sent correspondence to Sellers acknowledging that the 40-acre parcel at issue would be excluded from the purchase. On December 18, 2003, the parties closed on the sale of the East Ranch. Sellers agreed to finance a portion of the purchase price by accepting Buyers' Promissory Note, which was secured by a mortgage on the property. As with the legal description contained in the purchase agreements, the property description in the mortgage agreement specifically excluded the 40-acre parcel from the lands to be used as collateral for the loan.

[¶6] In May 2012, Sellers sent Buyers a notice of default for failure to make the required payments under the Promissory Note. After Buyers failed to cure the default, Sellers initiated foreclosure proceedings. In response, Buyers filed a complaint for declaratory judgment seeking release of property securing the loan and a motion for a temporary restraining order to halt the foreclosure. Prior to the scheduled foreclosure sale, the parties entered into an Escrow Agreement. The Agreement provided that Buyers would deposit $66, 178.97, the disputed amount of interest owed under the Promissory Note, into an escrow account in return for Sellers' agreement to "look to the funds placed in escrow for payment of any amounts that remain due and owing under the Note as determined by the court in the Litigation, and to execute and deliver to Buyers a full release of the remaining property subject to the Mortgage."

[¶7] In June 2013, Buyers filed their first amended complaint asserting claims for fraud, slander of title, and breach of the covenant of good faith and fair dealing, and reasserting their request for declaratory relief. The Sellers moved for a partial dismissal of the complaint, and the district court subsequently dismissed Buyers' slander of title claim. In January 2014, Buyers filed a second amended complaint which added a claim of adverse possession. In their second amended complaint, Buyers asserted that they had been in possession of the 40-acre parcel "continuously and without interruption" since December 18, 2003, the date of closing on the East Ranch. Buyers claimed that they had grazed livestock, hunted, and fished on the property in each year that the property had been in their possession. They further claimed that they had "traversed the Forty Acre Parcel with ATVs" and "maintained the boundary fence that touches the Forty Acre Parcel" during the period that the property was in their possession.

[ΒΆ8] On March 7, 2014, Sellers filed their answer to Buyers' second amended complaint and asserted a counterclaim seeking judgment on the Buyers' Promissory Note. On March 10, 2014, Sellers granted to Buyers, in writing, permissive use of the 40 acres at issue. Both parties subsequently filed motions for summary judgment. After holding a hearing on the motions, the district court granted summary judgment in favor of Sellers and ordered Buyers to deliver the $66, 178.97 in escrow to Sellers. The court denied Sellers' request for attorney's fees. Buyers timely appealed the district court's decision granting summary judgment in favor of Sellers. Sellers cross-appealed, challenging ...


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