Ludvik v. James S. Jackson Co., Inc.

• Decision Date: 27 October 1981
• Docket Number: 5427,Nos. 5426,s. 5426
• Citation: 635 P.2d 1135
• Parties: James LUDVIK, Appellant (Plaintiff), v. JAMES S. JACKSON COMPANY, INC., an Indiana corporation, Appellee (Defendant). JAMES S. JACKSON COMPANY, INC., an Indiana corporation, Appellant (Defendant), v. James LUDVIK, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 1135

635 P.2d 1135

James LUDVIK, Appellant (Plaintiff), v. JAMES S. JACKSON COMPANY, INC., an Indiana corporation, Appellee (Defendant).

JAMES S. JACKSON COMPANY, INC., an Indiana corporation, Appellant (Defendant), v. James LUDVIK, Appellee (Plaintiff).

Nos. 5426, 5427.

Supreme Court of Wyoming.

Oct. 27, 1981.

Rehearing Denied Nov. 24, 1981.

Frank J. Jones, Wheatland, for appellant in No. 5426 and appellee in no. 5427.

William R. Jones and Eric M. Alden of Jones, Jones, Vines & Hunkins, Wheatland, and John D. Ulmer, Goshen, Ind., for appellee in No. 5426 and appellant in No. 5427.

Before ROSE, C. J., RAPER, THOMAS and ROONEY, JJ., and TAYLOR, District Judge.

THOMAS, Justice.

This case raises a question of priority between successive assignments of a purchaser's interest in a contract for the sale of land located in Wyoming. One of the assignments was made pursuant to an order entered in the United States District Court for the Northern District of Indiana, and the extraterritorial effect of the Wyoming statute providing for the filing of a notice lis pendens is a critical factor. The district court found in favor of the assignee pursuant to the order of the United States District Court for the Northern District of Indiana, but it also awarded damages to the competing assignee for amounts he had paid on the contract for the sale of land. We shall hold that the Wyoming lis pendens statute has no extraterritorial efficacy, and for the reasons indicated below we will reverse the judgment of the district court.

It is helpful to list the participants in this litigation and the matters leading up to it. They are:

James Ludvik (hereinafter referred to as Ludvik). Ludvik was the plaintiff in the district court, and is the assignee of the contract for the sale of land from Horseshoe Creek Limited.

James S. Jackson Company, Inc. (hereinafter referred to as Jackson). Jackson was the defendant in the action below, although it also brought a counterclaim. It is the assignee of the contract for the sale of land pursuant to the order of the United States District Court for the Northern District of Indiana.

James F. K. Centlivre (hereinafter referred to as Centlivre). Centlivre was the owner of real property in Platte County, Wyoming, near Glendo. He was the seller under a Contract for Deed entered into with Horseshoe Creek Limited, a partnership, as buyer.

Horseshoe Creek Limited, a Colorado general partnership (hereinafter referred to as Horseshoe). Horseshoe was a partnership formed by Fred M. Meyer and Peter T. Scifo with Meyer owning a two-thirds interest and Scifo owning a one-third interest. They later conveyed their interests to two Colorado corporations. This partnership was the purchaser under the Contract for Deed with Centlivre as seller. It assigned its rights under the contract to Ludvik. It Fred M. Meyer (hereinafter referred to as Meyer). An original partner in Horseshoe Creek Limited. He was also an owner of the corporate stock in Peakay's Eatery, Inc., and he described himself as the owner (presumably because of stock ownership) of Meyer Hog Farms, Inc.

also agreed to assign a security interest in the Contract for Deed to Jackson.

Peter T. Scifo (hereinafter referred to as Scifo). The original partner in Horseshoe Limited, who owned a one-third interest in Horseshoe Creek Limited. He was also an officer and director of Peakay's Eatery, Inc.

Car-ro, Inc. It is a Colorado corporation, which is the other successor partner in Horseshoe Creek Limited. It is the owner of Meyer's two-thirds interest in Horseshoe Creek Limited, which was conveyed to it.

Taras, Inc. Taras, Inc., is a Colorado corporation. It is the successor in interest of Scifo with respect to Horseshoe Creek Limited, his one-third partnership interest having been sold to Taras, Inc.

Peakay's Eatery, Inc. (hereinafter referred to as Peakay's). This was a corporation intended to operate eating establishments which would be a market for the hogs raised by Meyer Hog Farms, Inc. It contracted with Jackson for the construction of buildings. In the process it became indebted to Jackson, and that indebtedness was assumed and guaranteed by Horseshoe and Meyer Hog Farms, Inc. Meyer was the principal individual in these several enterprises.

A chronology of the significant events also is helpful to the reader. Those dates and events are:

October 1, 1976. Meyer and Scifo created Horseshoe according to Colorado law.

November 9, 1976. Contract for Deed entered into between Horseshoe as buyer and Centlivre as seller.

February 4, 1977. Meyer and Scifo conveyed their interests in Horseshoe to Car-ro, Inc., and to Taras, Inc., respectively.

August 4, 1977. Meyer signed an agreement pursuant to which he assigned "his interest" in the Centlivre contract to James Jackson, as an individual. Meyer at that time purported to act as president of Horseshoe.

December 17, 1977. An agreement was entered into between Jackson, Peakay's, Horseshoe and Meyer Hog Farms, Inc., pursuant to which Horseshoe agreed to pledge partnership assets, including a certain contract with Centlivre, to assure payment of obligations due Jackson arising out of the construction of restaurants for Peakay's and a promissory note.

December 6, 1978. Jackson initiated an action in the United States District Court for the Northern District of Indiana to secure a judgment for money due it pursuant to the guarantee and to obtain an assignment of the Centlivre contract by Horseshoe.

December 6, 1978. Jackson filed in Platte County, Wyoming, a "Notice of Pendency of Action" based upon the case filed in the United States District Court for the Northern District of Indiana.

January 18-23, 1979. Horseshoe assigned the Centlivre contract to Ludvik. The assignment was executed by Taras, Inc., on January 18, 1979, and by Car-ro, Inc., on January 23, 1979.

August 29, 1979. A compromise and settlement of the litigation in the United States District Court for the Northern District of Indiana was filed with the court.

December 17, 1979. Judgment purportedly based upon the Compromise and Settlement Agreement was entered in the United States District Court for the Northern District of Indiana.

January 2, 1980. The United States Marshal for the Northern District of Indiana was ordered to make an assignment of the Centlivre contract on behalf of Horseshoe to Jackson.

January 4, 1980. The assignment was made of the Centlivre contract to Jackson on behalf of Horseshoe by the United States Marshal for the Northern District of Indiana.

In addition to the foregoing chronology, some of the language of the documents presented to the trial court is significant. In the December 17, 1977, agreement the following language appears pertaining to the Centlivre contract:

"6. Payment of Obligation. * * * Further, in the event of the sale by Horseshoe Creek Limited of any of its assets and in particular its interest in that certain contract with James F. K. Centlivre dated November 9, 1976, for certain real estate in the State of Wyoming, then to the extent of such cash proceeds received, the same shall be applied upon the then existing unpaid balance of the account due Jackson.

"7. Additional Consideration. As a part of the consideration herein, the parties hereto, either jointly or severally, will act to cause the following interests to be transferred to Jackson, its assigns or nominee, as Jackson may in writing direct:

"D. A security interest in a certain contract for deed entered into on November 9, 1976 between James F. K. Centlivre and Horseshoe Creek Limited of certain property from James F. K. Centlivre located in Platt (sic) County, Wyoming." (Emphasis added.)

The complaint filed on December 6, 1978, in the United States District Court for the Northern District of Indiana relied upon both the August 4, 1977, agreement signed by Meyer and the December 17, 1977, agreement. In the prayer for relief Jackson requested:

"(2) Upon the hearing on the merits, this Court issue its order specifically requiring the Defendant, Horseshoe Creek Limited, to assign to the Plaintiff all of its right, title and interest in and to the said Contract for Deed."

The document recorded in Wyoming reads as follows:

"NOTICE OF PENDENCY OF ACTION

"NOTICE IS HEREBY GIVEN that James S. Jackson Co., Inc., an Indiana Corporation, has filed an action against Horseshoe Creek Limited, a Colorado General Partnership, and Meyer Hog Farms, Inc., a Colorado Corporation, in the United States District Court of the Northern District of Indiana, South Bend Division, Civil Action # S-78-0271, the object of which action is to compel the Defendant to assign unto the Plaintiff its right, title and interest in and to a Contract for Deed wherein Defendant is purchasing the real property described on Exhibit A hereto annexed and by this reference made a part hereof."

In connection with the action in the United States District Court for the Northern District of Indiana, the Compromise and Settlement Agreement which was entered into provided in pertinent part as follows:

"D. If the Defendants fail to pay to Plaintiffs the aforementioned One Hundred Seventy-five Thousand Dollars ($175,000.00) when due, the Defendants agree and consent to this Court entering a judgment against them, jointly and severally, in the amount of Three Hundred Fifty-two Thousand Ten Dollars and Fifty-four Cents ($352,010.54) with interest at ten percent (10%) per annum from March 30, 1979, to date of judgement, all without relief from valuation or appraisment (sic) laws and with attroney (sic) fees in the amount of Fifteen Thousand Dollars ($15,000.00), together with a decree requiring Horseshoe Creek Limited to assign to Plaintiff a security interest in that certain deed dated November 9, 1976, between James F. K. Centlivre and Horseshoe Creek Limited, of real property located in Platte County, Wyoming, as security for the money judgement entered by the Court. *...