Markstein v. Countryside i, LLC

• Decision Date: 26 September 2003
• Docket Number: No. 02-214.,02-214.
• Citation: 77 P.3d 389,2003 WY 122
• Parties: Kenneth W. MARKSTEIN and Carole Markstein, Appellants (Plaintiffs), v. COUNTRYSIDE I, L.L.C., a Wyoming limited liability company; Countryside, L.L.C., a Wyoming limited liability company; John C. Thornton; Thunder Holdings, LLC, a Wyoming limited liability company; Finis F. Connor and Julie A. Connor, as Trustees of the Connor Family Trust; John R. Tozzi and Georgene M. Tozzi, as Trustees of the Tozzi Family Trust; Kenneth H. Taylor, Jr., as Trustee of the Agreement of Trust of Kenneth H. Taylor, Jr.; G. Dorros Family Limited Partnership, a Wisconsin limited partnership; Targhee Pines, L.C., an Idaho limited liability company; Joseph Kraus, IV; The Jackson Hole Land Trust, a Wyoming non-profit corporation; and LaSalle Bank National Association, an Illinois banking association, Appellees (Defendants).
• Court: Wyoming Supreme Court

77 P.3d 389

2003 WY 122

Kenneth W. MARKSTEIN and Carole Markstein, Appellants (Plaintiffs), v. COUNTRYSIDE I, L.L.C., a Wyoming limited liability company; Countryside, L.L.C., a Wyoming limited liability company; John C. Thornton; Thunder Holdings, LLC, a Wyoming limited liability company; Finis F. Connor and Julie A. Connor, as Trustees of the Connor Family Trust; John R. Tozzi and Georgene M. Tozzi, as Trustees of the Tozzi Family Trust; Kenneth H. Taylor, Jr., as Trustee of the Agreement of Trust of Kenneth H. Taylor, Jr.; G. Dorros Family Limited Partnership, a Wisconsin limited partnership; Targhee Pines, L.C., an Idaho limited liability company; Joseph Kraus, IV; The Jackson Hole Land Trust, a Wyoming non-profit corporation; and LaSalle Bank National Association, an Illinois banking association, Appellees (Defendants).

No. 02-214.

Supreme Court of Wyoming.

September 26, 2003.

Rehearing Denied October 21, 2003.

Representing Appellants: R. Michael Mullikin and Carolyn L. Null-Anderson of Mullikin, Larson & Swift, Jackson, WY; and Harvey S. Schochet, and Andrew A. Bassak of Steefel, Levitt & Weiss, San Francisco, CA. Argument by Messrs. Mullikin and Schochet.

Representing Appellees: David F. DeFazio of DeFazio Law Office, Jackson, WY; Gerald R. Mason of Mason & Mason, PC, Pinedale, WY; Bret F. King of King & King, Jackson, WY; Peter J. Young of Schwartz, Bon, Walker & Studer, LLC, Casper, WY; and Joe M. Teig of Holland & Hart, Jackson, WY. Argument by Messrs. Mason and De-Fazio.

Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

LEHMAN, Justice.

[¶ 1] This is an appeal from summary judgment granted against appellants Kenneth W. Markstein and Carole Markstein (collectively the Marksteins) in an action concerning fishing and club use rights granted along the Snake River near Wilson, Wyoming. We affirm in part, reverse in part, and remand.

ISSUES

[¶ 2] The Marksteins set forth very lengthy and broadly stated issues on appeal that may be summarized as follows:

1. Did the district court err in disregarding the effect of the bankruptcy court's orders?

2. Did the district court err in not finding a breach of the Stipulation Re License Claims?

3. Did the district court err in concluding that the fishing license agreements did not create an interest in real property that ran with the land but, rather, were revocable licenses that were terminated upon purchase of land?

4. Did the district court err in finding a proper revocation of the Marksteins' club use rights?

5. Did the district court err in its finding of bona fide purchaser for value status under the Wyoming Recording Act?

Appellees John C. Thornton; Countryside, L.L.C.; Countryside I, L.L.C.; Thunder Holdings, LLC; John R. Tozzi and Georgene M. Tozzi, as trustees of the Tozzi Family Trust; Targhee Pines, L.C.; The Jackson Hole Land Trust; and LaSalle Bank National Association (collectively appellees) do not specifically set forth a statement of issues on appeal. However, appellees address those issues raised by the Marksteins and raise the following additional issues:

1. Did the trustee in bankruptcy reject the Marksteins' fishing license and club use agreements as executory contracts in the bankruptcy case?

2. Was the recording of the license agreement for Parcel 2 void as a violation of the bankruptcy automatic stay provision?

3. To the extent that the fishing license agreements are easements, are they null and void under Wyo. Stat. Ann. § 34-1-141 for failure to provide a sufficient legal description?

FACTS¹

[¶ 3] In 1981, Rivermeadows Associates, Ltd. (RMA) developed Crescent H Ranch, a commercially operated guest ranch located along the Snake River. Thereafter, Fish Creek Meadows, Inc. (FCM) developed 186 acres adjacent to Crescent H Ranch (Fish Creek Meadows Property).

[¶ 4] In 1993, the Marksteins purchased Parcel 1 of the Fish Creek Meadows Property, in part, acquiring fishing and club rights on the Crescent H Ranch. No memoranda for the fishing and club rights regarding Parcel 1 were recorded. Nevertheless, terms of the Parcel 1 purchase provided that if Parcel 1 was split, duplicate fishing and club rights would immediately issue with that newly split parcel. In April of 1994, the Marksteins completed a lot split of Parcel 1.

[¶ 5] On January 16, 1995, RMA granted FCM fishing rights to the Crescent H Ranch, which was appurtenant to Parcel 2 of the Fish Creek Meadows Property. On January 17, 1995, RMA filed for Chapter 11 bankruptcy with RMA operating as a debtor in possession until a trustee in bankruptcy was appointed for the bankruptcy estate in July of 1995. Later that same day, RMA recorded a Memorandum of License Agreement regarding fishing rights involving Parcel 2.² Subsequently in 1995, FCM also filed for Chapter 11 bankruptcy.

[¶ 6] On November 12, 1996, the trustee in bankruptcy for the RMA bankruptcy estate and appellee John C. Thornton (Thornton) entered into a purchase agreement concerning the Crescent H Ranch. This agreement provided that the sale was subject to all existing fishing and club use rights relating to the Crescent H Ranch, except to the extent such rights were "avoided" in the bankruptcy. On that same date, Thornton assigned all his rights and obligations under the purchase agreement to appellee Countryside, L.L.C. On December 30, 1996, appellant Kenneth A. Markstein purchased Parcel 2 of the Fish Creek Meadows Property through the trustee of the FCM bankruptcy estate. No memorandum for club rights concerning Parcel 2 was recorded although such rights were again apparently extended pursuant to the purchase.

[¶ 7] In January 1997, the trustee for the RMA bankruptcy estate filed an avoidance action seeking to, in part, avoid the Marksteins' fishing rights. On May 12, 1997, that same trustee along with Countryside, L.L.C. requested by motion that the bankruptcy court approve the proposed purchase of the Crescent H Ranch. The Marksteins objected to these motions. On June 10, 1997, the Marksteins and others entered into a Stipulation Re License Claims with the trustee of the RMA bankruptcy estate and Countryside, L.L.C. wherein Countryside, L.L.C. agreed that any challenge it might wish to assert to the fishing and club use rights would be limited to the "claims asserted by the trustee" in the avoidance action. On June 13, 1997, the bankruptcy court approved the sale of the Rivermeadows property to Countryside, L.L.C., but ruled that the sale "shall not be free and clear of the interests of those fishing license and use agreement holders." Countryside, L.L.C. assigned its rights and obligations under this sale to appellee Countryside I, L.L.C. on June 25, 1997. The Stipulation Re License Claims was approved by the bankruptcy court on July 21, 1997.

[¶ 8] On February 25, 1998, the bankruptcy court dismissed the avoidance action filed by the RMA bankruptcy trustee seeking to avoid the Marksteins' fishing and club use rights. Nevertheless, on April 2, 1998, Countryside I, L.L.C. sent a letter to the Marksteins disavowing their fishing and club use rights.

[¶ 9] On November 23, 1998, the trustee for the RMA bankruptcy estate filed his Third Amended Liquidating Plan of Reorganization ("Plan of Reorganization"). On December 3, 1998, the bankruptcy court entered its order confirming the Plan of Reorganization.

[¶ 10] This action was filed in district court by the Marksteins seeking to enforce their fishing and club use rights. Ultimately, cross-motions for summary judgment were filed by the parties, with the district court entering summary judgment in favor of appellees. This appeal followed.

STANDARD OF REVIEW

[¶ 11] Our standard of review in summary judgment cases is well established.

Summary judgment motions are determined under the following language from W.R.C.P. 56(c):

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

The purpose of summary judgment is to dispose of suits before trial that present no genuine issue of material fact. Moore v. Kiljander, 604 P.2d 204, 207 (Wyo.1979). Summary judgment is a drastic remedy designed to pierce the formal allegations and reach the merits of the controversy, but only where no genuine issue of material fact is present. Weaver v. Blue Cross-Blue Shield of Wyoming, 609 P.2d 984, 986 (Wyo.1980). A fact is material if proof of that fact would have the effect of establishing or refuting one of the essential elements of a cause of action or defense asserted by the parties. Schuler v. Community First Nat. Bank, 999 P.2d 1303, 1304 (Wyo.2000). The summary judgment movant has the initial burden of establishing by admissible evidence a prima facie case; once this is accomplished, the burden shifts and the opposing party must present specific facts showing that there is a genuine issue of material fact. Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704, 710 (Wyo.1987); Gennings v. First Nat. Bank of Thermopolis, 654 P.2d 154, 156 (Wyo.1982).

This Court reviews a summary judgment in the same light as the district court, using the same materials and following the same standards. Unicorn Drilling, Inc. v. Heart Mountain Irr. Dist., 3 P.3d 857, 860 (Wyo.2000) (quoting Gray v. Norwest Bank Wyoming, N.A., 984 P.2d 1088, 1091 (Wyo.1999)). The record is reviewed, however, from the vantage point most favorable to the party who opposed the motion, and this Court will give that party the benefit of all favorable inferences that may fairly be drawn from the record. Garcia v. Lawson, 928 P.2d 1164, 1166 (Wyo.1996).

McGee v. Caballo Coal Co., 2003 WY 68, ¶ 6, 69 P.3d 908, ¶ 6 (Wyo.2003) (quoting Garnett v. Coyle, 2001 WY 94, ¶¶ 3-5, 33 P.3d 114, ¶¶ 3-5 (Wyo.2001)). We also recognized in Mize v. North Big Horn Hosp. Dist., ...