ALEXANDER REED MANTLE and MARJORIE M. MANTLE, Appellants (Plaintiffs),
NORTH STAR ENERGY & CONSTRUCTION LLC; GARY W. GARLAND; RAYMOND W. GARLAND; MATT R. GARLAND; THREE WAY, INC.; HOT IRON, INC.; MGM ENTERPRISES, INC.; GT INVESTMENTS, INC.; and WYODAK ENERGY SERVICES, LLC, Appellees (Defendants).
from the District Court of Johnson County The Honorable John
G. Fenn, Judge
Representing Alexander Reed Mantle and Marjorie M. Mantle:
Stephen R. Winship, Winship & Winship, PC, Casper,
Wyoming. Argument by Mr. Winship.
Representing North Star Energy & Construction LLC: Lance
C. Overstreet, John M. Kuker, and Jeffrey M. Boldt,
Overstreet Homar & Kuker, Cheyenne, Wyoming.
Representing Gary W. Garland, Hot Iron, Inc., and GT
Investments, Inc.: Kim D. Cannon & Codie D. Henderson,
Davis & Cannon, LLP, Sheridan, Wyoming. Argument by Mr.
Representing Raymond W. Garland, Matt R. Garland, Three Way,
Inc., and MGM Enterprises, Inc.: Judith A. W. Studer,
Schwartz, Bon, Walker & Studer, LLC, Casper, Wyoming.
Argument by Ms. Studer.
Representing WyoDak Energy Services, LLC: No Appearance.
DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.
This is the sequel in the ongoing litigation arising from a
business deal that went south. We addressed the appeal of the
district court's decision after a bench trial in
Mantle v. North Star Energy & Construction, LLC,
2019 WY 29, 437 P.3d 758 (Wyo. 2019) (Mantle I).
Alex Mantle and Marjorie Mantle now appeal various post-trial
issues. For the reasons discussed below, we affirm in part,
reverse in part, and remand for further proceedings
consistent with this opinion.
The Mantles raise twelve issues, which we condense and
rephrase as follows:
1. Did the district court have subject matter jurisdiction to
offset the judgments when that issue was pending in this
Court in Mantle I?
2. With respect to the Killmer Settlement Funds:
a. Is there a reviewable order in the record regarding
whether the Garlands had standing to assert a direct claim
against Mr. Killmer?
b. Did the Mantles have a superior security interest in the
Killmer Settlement Funds by operation of the "general
intangibles" clause of the FNB security agreement?
3. Did the district court err when it awarded North
Star's attorneys, The Kuker Group,  their attorney
fees from a portion of the Killmer Settlement Funds?
4. Did the district court err when it issued a nunc pro tunc
order that removed Marjorie Mantle's name from the order
that disbursed the Killmer Settlement Funds?
We briefly summarize the facts to provide context for the
issues in this appeal. A more complete discussion can be
found in Mantle I, 2019 WY 29, 437 P.3d 758. The
Garland brothers, Gary, Ray, and Matt, each had their own
companies involved in the oil and gas business. Id.
at ¶ 1, 437 P.3d at 768. In November 2011, the brothers,
with their companies, formed North Star Energy &
Construction, LLC. Id. at ¶¶ 5-6, 437 P.3d
at 769. Alex Mantle was appointed President. Id. at
¶ 6, 437 P.3d at 769. Karl Killmer was North Star's
accountant. Id. In mid-2014, Mr. Mantle and Mr.
Killmer proposed to buy North Star from the Garlands.
Id. at ¶ 12, 437 P.3d at 770. The parties
executed a Memorandum of Understanding (MOU) that
memorialized their agreement, including Mr. Killmer's and
the Mantles' personal guarantees of $6.1 million of the
purchase price. Id. at ¶¶ 2, 16-17, 437
P.3d at 768, 771-72. Mr. Mantle and Mr. Killmer negotiated a
$3-million loan from First Northern Bank (FNB) to fund the
down payment. Id. at ¶ 13, 437 P.3d at 770.
Ultimately, the transaction took the form of a leveraged
buyout when the FNB loan was made to North Star. Id.
at ¶¶ 14, 17, 437 P.3d at 770-72.
North Star's fortunes continued to decline, due to
questionable business decisions and the dropping oil market.
See id. at ¶¶ 26-32, 437 P.3d at 773-75.
By December 2014, the Garlands stepped back in to try and
save North Star. Id. at ¶ 33, 437 P.3d at 775.
They were unsuccessful, and by August 2015 the Garlands began
liquidation. Id. at ¶ 38, 437 P.3d at 776. In
June 2015, the Mantles bought the $3-million FNB loan, which
effectively made them a creditor of North Star. Id.
at ¶ 40, 437 P.3d at 776-77.
In May 2015, Mr. Mantle and his wife, Marjorie, sued the
Garlands, the Garlands' businesses, and North Star.
Id. at ¶ 42, 437 P.3d at 777. Among other
claims, the Mantles sought to collect on the $3-million FNB
note. Id. The Garlands countered with their claim
that Mr. Mantle and Mr. Killmer breached the $6.1-million
guarantee in the MOU. Id.
The Garlands and North Star also sued Mr. Killmer for
accountant malpractice.Id. Mr. Killmer defaulted,
id. at ¶ 44, 437 P.3d at 777, and then assigned
to the Garlands and North Star any claim he had against his
malpractice insurance carrier for failing to provide coverage
or a defense. The district court then dismissed Mr. Killmer
from the case with prejudice. Id. The Garlands and
North Star eventually settled with Mr. Killmer's
malpractice carrier. As part of the settlement, North Star
received $121, 271, which, by order of the district court,
was deposited into the court registry on February 22, 2017.
The Garland brothers, and their respective companies, split
After a bench trial, the district court awarded the Mantles a
$2, 712, 838.22 judgment against North Star based on the
Mantles' assumption of the FNB loan. Id. at
¶ 47, 437 P.3d at 778. It also awarded the Mantles $250,
000 against Gary and $307, 000 against Ray based on some
transfers of North Star property that Gary and Ray made after
they resumed control of North Star in December 2014.
Id. The court awarded the Garlands and their
companies $6, 110, 000 against Mr. Mantle based on the MOU
that he personally guaranteed. Id. at ¶ 48, 437
P.3d at 778. The court denied Gary's and Ray's first
motions to offset the judgments. Id. at ¶ 49,
437 P.3d at 778.
The parties appealed various aspects of the district
court's rulings, and we affirmed in all respects.
Id. at ¶¶ 4, 160, 437 P.3d at 768-69, 808.
Gary and Ray initially appealed the district court's
denial of their motion to offset the judgments. While
Mantle I was pending in this Court, the Mantles
attempted to collect on their judgments against Gary ($250,
000) and Ray ($307, 000). To avoid this, Gary and Ray again
moved the district court to grant their offset motion. This
time, the district court granted the motion and offset the
judgments. Gary and Ray notified this Court that they were
dismissing their appeals of the offset issues in Mantle
I. We specifically declined to address the offset issue
in Mantle I. See id. at ¶ 108 n.20,
437 P.3d at 794 n.20.
Additional facts and proceedings will be discussed ...