JOYCE HALLING and MEDCON, INC., a Utah corporation, Appellants (Defendants),
v.
DAVID A. YOVANOVICH and ORNELLA DALLA BONA, Appellees (Plaintiffs). DAVID A. YOVANOVICH and ORNELLA DALLA BONA, Appellants (Plaintiffs),
v.
JOYCE HALLING and MEDCON, INC., a Utah corporation, Appellees (Defendants).
Appeal
from the District Court of Lincoln County The Honorable
Joseph Bluemel, Judge
Representing Joyce Halling and MedCon, Inc.: Ray G.
Martineau, Salt Lake City, Utah.
Representing David A. Yovanovich and Ornella Dalla Bona:
James K. Lubing and Laurie J. Stern, Lubing Law Group, LLC,
Jackson, Wyoming.[*]
Before
BURKE, C.J., and HILL, DAVIS, FOX, and KAUTZ, JJ.
FOX,
Justice.
[¶1]
David Halling, as manager of Professional Business Holdings,
LP (PBH), and Joyce Halling, as president of MedCon, Inc.
(MedCon), each purchased an undivided half interest in a
parcel of land in Lincoln County, Wyoming, from Brandon
Bentley. Mr. Halling, individually and as manager of PBH,
executed a mortgage in favor of Mr. Bentley on PBH's half
interest as security for the purchase price of 50 percent of
the lot. Mrs. Halling, individually and as president of
MedCon, also executed a promissory note and mortgage as
security for the note in favor of Mr. Bentley for the
purchase price of the other 50 percent of the lot. Mr.
Bentley then separately assigned his rights and interests in
the PBH Mortgage to 1st Bank of Afton, Wyoming (1st Bank),
and his rights and interests in the MedCon Note and MedCon
Mortgage to Yovanovich. Yovanovich sued MedCon, alleging it
failed to pay the amount due under the note. The district
court granted Yovanovich's motion for summary judgment
and MedCon appeals. Yovanovich cross-appeals the award of
damages. We affirm the district court's ruling in part,
and reverse and remand in part.
ISSUES
[¶2]
The parties raise numerous issues, which we consolidate and
restate below:
1. Did the district court err as a matter of law when it held
that Yovanovich had an enforceable contract right against
MedCon?
2. Did the district court err as a matter of law when it
found that the Yovanovich Assignment was not ambiguous?
3. Did the district court abuse its discretion when it denied
MedCon's motion for leave to amend its answer?
4. Was the district court's damages calculation clearly
erroneous? 5. Did the district court abuse its discretion
when it failed to award prejudgment interest? 6. Did the
district court err as a matter of law when it failed to award
post-judgment interest?
FACTS
[¶3]
David Halling was the manager of PBH. His wife, Joyce
Halling, was the president of MedCon. In 2007, PBH and MedCon
each purchased an undivided half interest in a parcel of land
in Lincoln County, Wyoming, from Brandon
Bentley.[1] The Warranty Deed was recorded on
September 17, 2007, and the same day Mr. Halling,
individually and as manager of PBH, executed a mortgage (PBH
Mortgage) of PBH's half interest in Lot 7 as security for
PBH's indebtedness of the purchase price of 50 percent of
the lot. (Although the PBH Mortgage referenced a promissory
note, no promissory note by PBH appears in the record.) The
PBH Mortgage was recorded on September 17, 2007.
[¶4]
In 2008, Mr. Bentley assigned all of his rights, title, and
interest in PBH's half interest in Lot 7 to 1st Bank (1st
Bank Assignment). The 1st Bank Assignment identified the PBH
Mortgage and any property covered by the mortgage as the
collateral, and referred to the book and page number where
the PBH Mortgage was recorded. It did not reference
MedCon's half interest in Lot 7. The 1st Bank Assignment
was recorded on July 11, 2008. By December 2010, PBH and Mr.
Halling had failed to make any payments to 1st Bank and
entered into a deed in lieu of foreclosure, pursuant to which
PBH and Mr. Halling conveyed PBH's half interest in Lot 7
to 1st Bank, in exchange for which 1st Bank released PBH and
Mr. Halling from all obligations on the PBH Note and
Mortgage. The deed in lieu of foreclosure was recorded on
February 19, 2013.
[¶5]
When Mr. Halling and PBH executed the deed in lieu of
foreclosure with 1st Bank in 2010, Mrs. Halling, individually
and as the president of MedCon, also signed the deed,
assigning any and all interests MedCon had in Lot 7 to 1st
Bank:
That pursuant to that certain Warranty Deed dated September
11, 2007, and recorded in the office of the Lincoln County
Clerk on September 17, 2007, in Book 672, page 342, Recording
No. 933171, Med Con, Inc., a Utah corporation, may own or
claim to own an interest in the Property. Med Con, Inc.,
whose president is Joyce L. Halling, the spouse of David F.
Halling, is a related entity to Mortgagor herein. In
consideration of the release from liability by 1ST Bank
herein, Med Con., Inc., will join in this agreement and
convey to 1ST Bank any and all interest it may have in the
Property. Therefore, for purposes of this agreement, the
conveyance of the Property to 1ST Bank and the release from
liability of David F. Halling, individually, Professional
Business Holdings, LP, Joyce L. Halling, individually, and
Med Con, Inc., by 1ST Bank, the terms Mortgagor and Grantor
as used herein shall be deemed to also include Joyce L.
Halling, individually, and Med Con, Inc.
[¶6]
Mr. Halling testified during his deposition that at the time
he and Mrs. Halling signed the deed it "was my
understanding and my understanding from the bank that [1st
Bank] would release us from any and all liabilities relative
to the total property." 1st Bank, however, had no
interest in MedCon's undivided half interest to release.
[¶7]
When it purchased its half interest in Lot 7, MedCon executed
a promissory note (MedCon Note), promising to pay Mr. Bentley
the $124, 520.00 purchase price. The MedCon Note provided
that full payment of the loan would be due on August 17,
2009, would "accrue @ 6% monthly, " and that no
payments were required during the term of the loan. Mrs.
Halling, individually and as president of MedCon, also
executed a mortgage (MedCon Mortgage) of MedCon's half
interest in Lot 7 as security for the MedCon Note. The MedCon
Mortgage was recorded on September 17, 2007.
[¶8]
In October 2008, Mr. Bentley assigned all of his rights,
title, and interest in the MedCon Note (Yovanovich
Assignment) to David A. Yovanovich and Ornella Dalla Bona
(collectively "Yovanovich"). Two years later, Mr.
Bentley executed an Assignment of Mortgage, assigning
Yovanovich all of his rights, title, and interest in the
MedCon Mortgage. No payments were made on the MedCon Note.
[¶9]
In 2014, Yovanovich, as holder of the MedCon Note and MedCon
Mortgage, attempted to collect on the indebtedness, and when
the attempts were unsuccessful, sued for breach of contract
seeking judgment on the MedCon Note. Yovanovich moved for
summary judgment, and MedCon opposed the motion, arguing
genuine issues of material fact existed as to: (1) whether
the Yovanovich Assignment created a lawfully enforceable
contract between Yovanovich and MedCon; (2) whether the
Yovanovich Assignment was null and void because Mr. Bentley
had previously assigned all of his rights in MedCon's
half interest in Lot 7 to 1st Bank via the 1st Bank
Assignment; (3) whether the deed in lieu of foreclosure
released MedCon from any liability related to its half
interest in Lot 7; and (4) whether Yovanovich was entitled to
damages.
[¶10]
The district court found that: (1) the Yovanovich Assignment
created a legally enforceable contract between Yovanovich and
MedCon; (2) the 1st Bank Assignment only included Mr.
Bentley's rights and interests in PBH's half interest
in Lot 7; (3) although the Hallings believed the deed in lieu
of foreclosure released MedCon from its payment obligations
related to Lot 7, it only released PBH and Mr. Halling; and
(4) MedCon breached the contract by failing to make any
payments on the MedCon Note and therefore Yovanovich was
entitled to damages. Based on these findings, the district
court granted Yovanovich's motion and awarded damages in
the amount of $140, 353.00, which represented the original
loan amount, plus interest at an annual rate of 6 percent,
accruing monthly for the two-year period of the MedCon Note.
[¶11]
After the district court granted summary judgment, MedCon
moved to amend its answer pursuant to Rule 15 of the Wyoming
Rules of Civil Procedure. MedCon contended that because the
district court found that MedCon did not release its
undivided half interest to 1st Bank when Mrs. Halling and
MedCon signed the deed in lieu of foreclosure, it had a right
to assert a counterclaim against Yovanovich, claiming a
competing interest in Lot 7. The district court denied
MedCon's motion to amend. MedCon timely appealed the
grant of summary judgment and denial of its motion to amend
and Yovanovich cross-appealed the district court's
calculation of damages.
STANDARD
OF REVIEW
[¶12]
We review a grant of summary judgment deciding a question of
law de novo. Sky Harbor Air Serv., Inc. v. Cheyenne
Reg'l Airport Bd., 2016 WY 17, ¶ 40, 368 P.3d
264, 272 (Wyo. 2016). In doing so, "We review a summary
judgment in the same light as the district court, using the
same materials and following the same standards."
Thornock v. PacifiCorp, 2016 WY 93, ¶ 10, 379
P.3d 175, 179 (Wyo. 2016) (quoting Rogers v. Wright,
2016 WY 10, ¶ 7, 366 P.3d 1264, 1269 (Wyo. 2016)).
"No deference is accorded to the district court on
issues of law, and we may affirm the summary judgment on any
legal grounds appearing in the record." Cont'l
Western Ins. Co. v. Black, 2015 WY 145, ¶ 13, 361
P.3d 841, 845 (Wyo. 2015). "The summary judgment can be
sustained only when no genuine issues of material fact are
present and the moving party is entitled to judgment as a
matter of law." Id. To the extent the issues
require us to use a different standard of review, we explain
that in our discussion.
DISCUSSION
I.
Did the district court err as a matter of law when it
held that Yovanovich had an enforceable contract
right against MedCon?
[¶13]
The district court ruled that there was an enforceable
contract between Yovanovich and MedCon, and that MedCon
breached the agreement by failing to pay Yovanovich the
amount due under the MedCon Note. "The elements for a
breach of contract claim consist of a lawfully enforceable
contract, an unjustified failure to timely perform all or any
part of what is promised therein, and entitlement of injured
party to damages." Schlinger v. McGhee, 2012 WY
7, ¶ 12, 268 ...