Mantle v. N. Star Energy & Constr., LLC
| Decision Date | 25 September 2020 |
| Docket Number | S-20-0019 |
| Citation | 473 P.3d 279 |
| Parties | Alexander Reed MANTLE and Marjorie M. Mantle, Appellants (Plaintiffs), v. 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). |
| Court | Wyoming Supreme Court |
Representing Appellants: Stephen R. Winship, Winship & Winship, P.C., Casper, Wyoming.
Representing Appellees Gary W. Garland, Hot Iron, Inc., and GT Investments, Inc.: Kim D. Cannon and Codie D. Henderson, Davis & Cannon, LLP, Sheridan, Wyoming. Argument by Mr. Henderson.
Representing Appellees Raymond W. Garland, Matt R. Garland, Three Way, Inc., and MGM Enterprises, Inc.: Judith Studer, Schwartz, Bon, Walker & Studer, LLC, Casper, Wyoming.
Representing Appellee North Star Energy & Construction, LLC: No appearance.
Representing Appellee Wyodak Energy Services, LLC: No appearance.
Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.
[¶1] In the third appeal of this case, Alexander Reed Mantle and Marjorie M. Mantle (collectively "the Mantles") contest the district court's use of a judgment against Mr. Mantle to set off judgments they had against Ray and Gary Garland. The Mantles also claim the district court erred by failing to recognize their right to the proceeds from a settlement of a third-party action against Karl Killmer and Killmer & Associates (collectively Mr. Killmer).
[¶2] We affirm.
[¶3] The dispositive issues in this case are:
[¶4] The underlying facts of this case are set out in detail in Mantle v. North Star Energy & Constr., LLC, 2019 WY 29, 437 P.3d 758 (Wyo. 2019) ( Mantle I ), and Mantle v. North Star Energy & Constr., LLC, 2019 WY 54, 441 P.3d 841 (Wyo. 2019) ( Mantle II ). We will, therefore, recite only those facts relevant to the issues presented in this appeal.
[¶5] The Garland brothers, Ray, Gary, and Matt, owned separate oil and gas service and construction companies – Three Way, Inc., Hot Iron, Inc., and MGM Enterprises, Inc., respectively. Mantle I, ¶¶ 1, 5, 437 P.3d at 768-69 ; Mantle II, ¶ 3, 441 P.3d at 844. In 2011, they formed North Star Energy & Construction, LLC (North Star), with the three companies as members (Members). Mantle I, ¶¶ 5-7, 437 P.3d at 769. Mr. Mantle was the president of North Star, and Mr. Killmer performed accounting services for North Star and the Members. Mantle I, ¶ 6, 437 P.3d at 769 ; Mantle II, ¶ 3, 441 P.3d at 844.
[¶6] In 2014, Mr. Mantle and Mr. Killmer agreed to purchase North Star from the Members. Mantle II, ¶ 3, 441 P.3d at 844. We summarized the transaction in Mantle II :
The parties executed a Memorandum of Understanding (MOU) that memorialized their agreement, including Mr. Killmer's and [Mr. Mantle's] personal guarantees of $6.1 million of the purchase price. Mr. Mantle and Mr. Killmer negotiated a $3-million loan from First Northern Bank (FNB) to fund the down payment. Ultimately, the transaction took the form of a leveraged buyout when the FNB loan was made to North Star.
Id. (citations omitted).
[¶7] North Star's financial position deteriorated during 2014. Mantle II, ¶ 4, 441 P.3d at 844. In December 2014, "the Garlands stepped back in to try and save North Star," but were unsuccessful. Id. Mr. Mantle and Mr. Killmer refused to execute the documents to finalize the purchase of North Star from the Members. Mantle I, ¶ 30, 437 P.3d at 774. North Star did not pay the $3 million FNB loan, so the Mantles purchased it and stepped into FNB's shoes as creditors of North Star. Mantle I, ¶ 33, 437 P.3d at 775 ; Mantle II, ¶ 4, 441 P.3d at 844.
[¶8] Litigation between the Garlands, the Mantles, and Mr. Killmer began in May 2015. Mantle I, ¶ 42, 437 P.3d at 777 ; Mantle II, ¶ 5, 441 P.3d at 844. The Mantles sued the Garlands, the Members, and North Star (collectively "the Defendants"). Id. They sought, inter alia, repayment of the FNB loan and to set aside as fraudulent various transfers from North Star to the Garlands and the Members. Id. The Members countered for breach of the MOU and to collect on Mr. Mantle's and Mr. Killmer's $6.1 million personal guarantees. Id. The Members and North Star also sued Mr. Killmer for accountant malpractice. Mantle I, ¶ 42, 437 P.3d at 777 ; Mantle II, ¶ 6, 441 P.3d at 844.
[¶9] Mr. Killmer settled with the Members and North Star and assigned to them his claims against his malpractice carrier for failing to provide a defense or insurance coverage. Mantle II, ¶ 6, 441 P.3d at 844. The Garlands and North Star eventually settled with Mr. Killmer's malpractice carrier. Id. Id.
[¶10] The district court held a bench trial on the remaining claims. Mantle II, ¶ 7, 441 P.3d at 844. It awarded the Mantles a $2,712,832.22 judgment against North Star on the FNB loan and a $250,000 and a $307,000 judgment against Gary and Ray, respectively, for fraudulent transfers of North Star assets. Mantle II, ¶ 7, 441 P.3d at 884. The district court ruled Mr. Mantle had breached the MOU and awarded the Members a $6,110,000 judgment on his personal guarantee. Id. ; Mantle I, ¶ 48, 437 P.3d at 778.
[¶11] In the "Order After Bench Trial," the district court stated in a footnote:
The [c]ourt considered offsetting [the judgment against Gary] against the judgment against Alex Mantle[.] However, both Alex and Marjorie Mantle brought this suit to set aside the fraudulent transactions, but the judgment for breach of contract is only against Alex Mantle. Thus, it would not be appropriate to offset the entire amount of the fraudulent conveyance against the judgment against Alex Mantle. This does not preclude the Defendants from executing against any part of these funds that may belong solely to Alex Mantle.
[¶12] Hot Iron and Three Way thereafter assigned portions of their judgment against Mr. Mantle to Ray and Gary. In a motion to alter or amend the judgment under Wyoming Rule of Civil Procedure (W.R.C.P.) 59(e), Ray and Gary requested setoffs, claiming the assignments created the requisite mutuality of obligations. The district court denied the Rule 59(e) motion, and Ray and Gary appealed in Mantle I . Mantle II, ¶¶ 12-13, 441 P.3d at 845.
[¶13] While that appeal was pending, Ray filed in the district court a "Motion for Protective Order with Respect to Discovery in Aid of Execution, Together with Motion to Allow Setoff and Declare Judgment Satisfied." Gary joined the motion for setoff. The district court ruled, in the "Order on Pending Motions," the judgments against Ray and Gary would be set off against a portion of the judgment against Mr. Mantle. It also granted Ray's motion for a protective order, stating: "[H]aving found that the judgment has been satisfied through a setoff, there is no need to allow further post-judgment discovery from Ray[.]" Ray and Gary then withdrew the setoff issue from their appeal. Mantle II, ¶ 13, 441 P.3d at 845.
[¶14] In Mantle II, ¶ 18, 441 P.3d at 846, we ruled the district court did not have jurisdiction to order the setoffs while the matter was on appeal. We reversed that aspect of the "Order on Pending Motions" and remanded to the district court for further proceedings. Id. The Mantles also raised issues regarding the Killmer Settlement Funds in Mantle II, ¶ 19, 441 P.3d at 847. They contended that only North Star, not the Members, had standing to assert a claim against Mr. Killmer for malpractice, so all the settlement proceeds should be paid to North Star's creditors. Id. , ¶¶ 19-20, 441 P.3d at 847. We held there was no final appealable order on the issue and remanded for further proceedings. Id., ¶¶ 23-24, 441 P.3d at 847-48.
[¶15] On remand, the district court granted the setoffs, adopting the rationale in the "Order on Pending Motions" rendered while it was without jurisdiction over the issue. The Mantles asked the district court to make additional findings "as to what facts still needed to be determined" with respect to the Killmer Settlement Funds. The court ruled the issue was not properly before it and denied the motion. The Mantles appealed.
[¶16] Additional facts will be set out, as necessary, in the discussion of the issues.
[¶17] The Mantles maintain the district court should have applied the law of the case doctrine to bar Ray and Gary from asserting, on remand, their claims for setoff. Specifically, they argue that, by abandoning their appeal in Mantle I, Ray and Gary waived further consideration of the issue.
[¶18] "The decision whether to apply the law of the case doctrine is discretionary, but once a court applies the doctrine, the actual application is reviewed as a matter of law." BTU Western Res., Inc. v. Berenergy Corp., 2019 WY 57, ¶ 24, 442 P.3d 50, 57-58 (Wyo. 2019).
Under the "law of the case" doctrine, a court's decision on an issue of law made at one stage of a case becomes a binding precedent to be followed in successive stages of the same litigation. The "law of the case" is a doctrine designed to...
To continue reading
Request your trial
-
Moses Inc. v. Moses
...the lost value of the vehicle. That claim is therefore waived. See Mantle v. North Star Energy & Constr., LLC, 2020 WY 125, ¶ 19, 473 P.3d 279, 284 (Wyo. 2020) (failure to issue on appeal constitutes waiver or abandonment of that issue). [4] The Trust may very well have raised this issue in......