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Trefren Construction Co. v. V&R Construction, LLC

Supreme Court of Wyoming

December 20, 2016

TREFREN CONSTRUCTION CO., a Wyoming Corporation, Appellant (Plaintiff),
v.
V&R CONSTRUCTION, LLC, an Ohio Limited Liability Company, and COCCA DEVELOPMENT, LTD., an Ohio Limited Partnership, Appellees (Defendants).

         Appeal from the District Court of Lincoln County The Honorable Joseph B. Bluemel, Judge

          Representing Appellant: Andrew A. Irvine of Andrew A. Irvine, P.C.; and Robert L. Stepans of Meyer, Shaffer & Stepans, PLLP, Wilson, WY. Argument by Mr. Irvine.

          Representing Appellees: John D. Bowers of Bowers Law Firm, Afton, WY.

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

          HILL, Justice.

         [¶1] Trefren Construction Co. (Trefren Construction) appeals the district court's denial of its motion to substitute the real party in interest and the district court's grant of summary judgment to Defendants, V&R Construction, LLC, and Cocca Development, Ltd. We find the district court erred in dismissing the complaint for lack of subject matter jurisdiction, abused its discretion in denying the motion to substitute, and erred in prematurely ruling on the merits of the parties' contract claims. We therefore reverse.

         ISSUES

         [¶2] Although Trefren Construction presents a number of issues on appeal, we find the dispositive issues to be:

         1. Did the district court err in dismissing the complaint for lack of subject matter jurisdiction?

         2. Did the district court abuse its discretion under Rule 17(a) of the Wyoming Rules of Civil Procedure when it denied Trefren Construction's motion to substitute the Estate of Timothy N. Trefren as the real party in interest?

         3. Did the district court err in ruling that the parties' contracts were voidable?

         FACTS

         [¶3] Prior to his death on April 23, 2015, Timothy N. Trefren owned Trefren Construction and operated it as a sole proprietorship. Trefren Construction was based in Thayne, Wyoming, and was managed by Timothy N. Trefren and his son, Timothy R. Trefren. Defendant V&R Construction, LLC (V&R) is an Ohio limited liability company, and Defendant Cocca Development, Ltd. (Cocca) is an Ohio limited partnership. Cocca is a member of V&R.

         [¶4] Cocca owned real property in Afton, Wyoming, on which it desired to construct a Shopko retail establishment. Cocca entered into a contract with V&R, by which V&R was to act as general contractor in the construction of the Shopko building. In turn, V&R, on May 31, 2013, entered into a subcontract with Trefren Construction, by which it agreed to pay Trefren Construction $458, 850.00 to complete site preparation and excavation for the project. On June 30, 2013, V&R entered into another subcontract with Trefren Construction, by which it agreed to pay Trefren Construction $145, 000.00 for erection of an approximately 36, 000 square foot pre-engineered metal building on the site.

          [¶5] In October and November 2013, Trefren Construction billed V&R for amounts still owing on both the site preparation/excavation contract and the building erection contract. On May 15, 2014, it again submitted a billing to V&R for these amounts, and on July 30, 2014, its counsel sent a demand letter to both Cocca and V&R for the amounts owing. The amounts owing on the contracts were not paid, and on September 19, 2014, Trefren Construction filed a complaint against V&R and Cocca in the Third Judicial District Court in Lincoln County. The complaint asserted both contract and non-contract claims and requested damages in the amount of $115, 560.53, plus prejudgment interest. V&R and Cocca (collectively Defendants) filed an answer and counterclaims, and the litigation thereafter proceeded through discovery and an unsuccessful mediation, with a trial date scheduled for January 19, 2016.

         [¶6] On November 20, 2015, Defendants filed a motion to dismiss. Defendants' motion directed the district court to Paragraph One of Trefren Construction's complaint, which alleged, "Plaintiff is a Wyoming Corporation with its principal place of business located in the Town of Thayne, County of Lincoln, State of Wyoming." Defendants' motion then asserted that during a telephone conversation with a non-party, defense counsel was told Trefren Construction is not a Wyoming corporation, and upon investigation, Defendants confirmed that all corporations associated with the name Trefren Construction were inactive or had been dissolved. Specifically, Defendants asserted Trefren Construction, Inc. became inactive in 2003, Trefren Construction Company, Inc. dissolved in 1986 and again in 1997.

         [¶7] Based on this information, Defendants further asserted (citations to exhibits omitted):

4. Additionally, the alleged two written contracts attached to the Plaintiff's complaint contain signature pages in which the first dated May 31, 2013 is signed as "Trefren Construction Co. by Tim N. Trefren its owner", and the second contract dated June 30, 2013 is signed as "Trefren Construction Co. by Tim Trefren its manager".
5. Wyoming Statute § 17-16-1405 states that a dissolved corporation technically continues in a corporate existence, however "may not carry on any business except that appropriate to wind up and liquidate its business and affairs . . ." Id.
6. As such, the Plaintiff's allegations that it entered into any type of agreement or contract in 2013, cannot be supported [by] facts because there was no such entity.
7. Additionally, the "alleged plaintiff" is not a recognized entity under Wyoming law and has no statutory authority to sue in the State of Wyoming.
8. Because the alleged plaintiff is not a valid entity, nor was it a valid entity at the time of the alleged written contract, this matter cannot go forward because there is no party of interest on the plaintiff's side. As such, the Defendants respectfully request that the matter be dismissed.
* * * *
12. If the Court does not dismiss this matter, in the alternative, the Defendants respectfully request that the Court vacate the current scheduling order and trial date immediately until additional briefing can be done on this matter.

         [¶8] Defendants attached to their motion to dismiss the relevant page of Trefren Construction's complaint and the signature pages of the parties' contracts, which contracts had been attached to the complaint. Defendants also attached several documents downloaded from the website for the Wyoming Secretary of State's Office and an affidavit from defense counsel's legal assistant concerning the downloaded documents and her contact with the Secretary of State's Office.

         [¶9] On November 23, 2015, three days following the filing of Defendants' motion to dismiss, Trefren Construction filed a Motion for Substitution of Party pursuant to W.R.C.P. 25(a), which rule governs substitutions upon the death of a party. The motion stated, in part:

1. At the time this case was filed, the original named plaintiff was Trefren Construction Co., which, according to The Estate of Timothy Nelson Trefren was held as a sole proprietorship by Timothy Nelson Trefren.
2. Timothy Nelson Trefren died on April 23, 2015.
3. As a result of the death of Timothy Nelson Trefren, the original named plaintiff Trefren Construction Co. was transferred to The Estate of Timothy Nelson Trefren.
4. The Estate of Timothy Nelson Trefren now wishes to proceed with the above captioned case as successor to Trefren Construction Co.
* * * * WHEREFORE, Movant prays that The Estate of Timothy Nelson Trefren be substituted in place and stead of the original plaintiff Trefren Construction Co. as the named plaintiff herein.

         [¶10] Defendants opposed the motion to substitute the Estate of Timothy Nelson Trefren (the Estate) as plaintiff, arguing Rule 25(a) did not apply because no party to the action had died. They also asserted they would be prejudiced by the substitution because had they known Trefren Construction was not a corporation, they would have asserted additional claims for breach of fiduciary duty, conflict of interest, and breach of contract.

         [¶11] On December 2, 2015, the district court entered an order vacating the January 19, 2016 trial date and setting deadlines for briefing on Defendants' motion to dismiss. In accordance with that schedule, Trefren Construction filed a response to Defendants' motion to dismiss. On that same date, Trefren Construction also filed a motion for leave to amend its complaint to substitute the Estate as plaintiff.

         [¶12] In arguing against Defendants' motion to dismiss, Trefren Construction took the position that W.R.C.P. 17(a) was, under the circumstances, not a ground for dismissal but was instead a basis for substituting the Estate. Trefren Construction argued that whether viewed singularly or in combination, Rules 17(a), 21, 25 and 15(a) "readily allow the substitution of The Estate of Timothy N. Trefren as the real party in interest in this case." In support of this argument, Trefren Construction attached an affidavit by Timothy R. Trefren, the son of decedent, Timothy N. Trefren. That affidavit stated, in part:

1. My father, Timothy N. Trefren, started Trefren Construction Co. and has always been the owner of the business.
2. My father, Timothy N. Trefren was also a manager of the business and handled all of the "office" work, including the licenses, permits and taxes for the business.
3. I was also a manager of Trefren Construction Co. and handled aspects of the "field" work for the ...

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