Ridgerunner, LLC v. Meisinger

• Decision Date: 14 March 2013
• Docket Number: No. S–12–0118.,S–12–0118.
• Parties: RIDGERUNNER, LLC, a Wyoming Limited Liability Company; and Sarah A. Carrelli and Cynthia D. Porter, Individually, Appellants (Plaintiffs), v. Richard MEISINGER and Meisinger Investments, Inc., Appellees (Defendants).
• Court: Wyoming Supreme Court

297 P.3d 110

RIDGERUNNER, LLC, a Wyoming Limited Liability Company; and Sarah A. Carrelli and Cynthia D. Porter, Individually, Appellants (Plaintiffs),

v.Richard MEISINGER and Meisinger Investments, Inc., Appellees (Defendants).

No. S–12–0118.

Supreme Court of Wyoming.

March 14, 2013.

Representing Appellants: Sky D Phifer, Phifer Law Office, Lander, Wyoming.

Representing Appellees: Collin C. Hopkins and Cynthia Van Vleet of Hopkins & Van Vleet, LLC, Riverton, Wyoming. Argument by Mr. Hopkins.

Before KITE, C.J., and HILL, VOIGT, BURKE, and DAVIS, JJ.

VOIGT, Justice.

[¶ 1] The appellants, Ridgerunner, LLC, Sarah A. Carrelli, and Cynthia D. Porter, appeal the district court's decision to dismiss on summary judgment their claims for breach of contract and breach of the covenant of good faith against the appellees, Meisinger Investments, Inc. and Richard Meisinger. The appellants claim that the district court improperly converted the appellees' motion to dismiss the complaint to a motion for summary judgment and, therefore, the case must be reversed. After consideration, we find that the district court did not properly convert the appellees' motion to dismiss to a motion for summary judgment, and that the appellants' complaint is sufficient to survive the appellees' motion to dismiss.

ISSUE

[¶ 2] Did the district court properly dismiss the appellants' complaint for breach of contract and breach of the covenant of good faith brought against the appellees?

FACTS

[¶ 3] On July 15, 2005, appellants Sarah A. Carrelli and Cynthia D. Porter, through their company, Ridgerunner, LLC, purchased Mom's Malt Shop from appellee Meisinger Investments, Inc. Approximately six years after the transaction, the appellants filed a complaint against Meisinger Investments, Inc. and one of its owners, Richard Meisinger, for breach of contract and breach of the covenant of good faith. The appellants alleged that the appellees misrepresented the inventory of the equipment of Mom's Malt Shop, that much of the food included in the sale was outdated or spoiled, and that appellee Richard Meisinger and Meisinger Investments, Inc.'s other owner, Kevin Meisinger, had been telling customers that the appellants were serving bad food and that the appellees were attempting to reclaim the business. The appellants also alluded to the fact that Kevin Meisinger vandalized the business on several occasions.

[¶ 4] In response to the complaint, the appellees filed a motion to dismiss the complaint. They asserted that the complaint failed to state a claim upon which relief can be granted because all of the allegations of wrongdoing were directed toward Kevin Meisinger. Kevin Meisinger, however, was not a named defendant in the complaint because he is deceased. The appellees pointed out that the sale of Mom's Malt Shop was between the appellants and Meisinger Investments, Inc., and that the appellants had not made any allegations that would justify piercing the corporate veil to hold Richard Meisinger personally responsible for the actions of the corporation. In response to the appellees' motion to dismiss, the appellants argued that Kevin Meisinger, Richard Meisinger, and Meisinger Investments, Inc. were all acting as agents of one another when the contract to sell Mom's Malt Shop was finalized, and that the appellants could not make any allegations regarding piercing the corporate veil until discovery had taken place.

[¶ 5] After a hearing, the district court dismissed the appellants' complaint. Although the order was titled “Order Granting [Appellees'] Motion to Dismiss,” the district court explained in the body of the order that it was converting the motion to dismiss to a motion for summary judgment, pursuant to W.R.C.P. 12(c) and 56, because the district court considered evidence outside of the pleadings when rendering its decision. The district court found that the contract for the sale of Mom's Malt Shop was between the appellants and Meisinger Investments, Inc. Kevin Meisinger and Richard Meisinger were the only shareholders, officers, and directors of the corporation. Meisinger Investments, Inc. was dissolved and the business wound up in 2008, and Kevin Meisinger is now deceased. Thus, the district court found that Richard Meisinger was the only party on which the appellants could attempt to impose liability under the contract, but only if Richard Meisinger could be held personally liable for the acts and obligations of Meisinger Investments, Inc. The district court concluded that the appellants provided nothing more than “mere allegations or denials” in their pleadings, which was insufficient to survive a motion for summary judgment, and thereby dismissed the complaint. The appellants now appeal that order.

STANDARD OF REVIEW

[¶ 6] This case is somewhat unique from many cases before this Court in that much of the central issue must be resolved before we can determine what the appropriate standard of review for the ultimate issue actually is. The appellees filed, and the appellants responded to, a motion to dismiss. However, the district court converted it to a motion for summary judgment. On appeal, the appellants claim that the district court improperly converted the motion to one for summary judgment. Whether the district court's conversion was proper is fundamental to our standard of review. If the conversion was proper, we will review whether summary judgment was granted appropriately. If the requirements for a proper conversion were not accomplished, we must review whether the dismissal was appropriate pursuant to a motion to dismiss standard. Torrey v. Twiford, 713 P.2d 1160, 1162, 1164 (Wyo.1986).

[¶ 7] Rule 12(b)(6) of the Wyoming Rules of Civil Procedure states that a party may file a motion to dismiss a complaint if the complaint “fail[s] to state a claim upon which relief can be granted[.]” W.R.C.P. 12(b)(6). The rule goes on to state:

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

W.R.C.P. 12(b). We have explained that if the matters outside of the pleadings considered are affidavits attached to the motion to dismiss, conversion occurs automatically. Cranston v. Weston Cnty. Weed & Pest Bd., 826 P.2d 251, 254 (Wyo.1992). However, if materials other than affidavits are considered, “such as discovery documents, conversion does not occur automatically. The court may still treat the motion as one for summary judgment, but the record must demonstrate that the parties had notice of the conversion and that the nonmovant had an opportunity to respond.” Id. At a minimum, the nonmoving party must have ten days to respond to the converted motion for summary judgment. Shriners Hosp. for Crippled Children, Inc. v. First Sec. Bank of Utah, N.A., 835 P.2d 350, 356 (Wyo.1992).

[¶ 8] Here, the appellees filed a motion to dismiss, and it did not include any attachments or affidavits. The appellants then responded to the motion, which also did not include any attachments or affidavits. The record does not show that either party filed any supplemental pleadings that contained attachments or affidavits in regard to the motion or response. Therefore, the record does not support a conclusion that the motion should have been converted automatically. This means, that in order for a conversion to properly have taken place,

the record must adequately demonstrate that all counsel were aware of the intentions of the district judge to treat the motion as converted, together with a reasonable opportunity afforded to the non-moving party to present, by way of affidavitor otherwise, anything necessary to rebut the contention of the moving party.

Torrey, 713 P.2d at 1163 (quoting Kimbley v. City of Green River, 642 P.2d 443, 445 (Wyo.1982)).

[¶ 9] The record does not show that counsel for either of the parties was given any advance notice that the district court planned to convert the motion to dismiss to one for summary judgment. In fact, the first time the conversion is ever mentioned in the record is in the district court's order dismissing the appellants' complaint. Further, we cannot tell what the parties may have known or been told at the time of the motion hearing, or what evidence outside of the pleadings the district court considered, because the hearing was not reported. Therefore, we cannot say that the requirements of converting the motion to dismiss to a motion for summary judgment were met. Consequently, we will review “this case as [an] order[ ] to dismiss rather than as [a] converted order[ ] for summary judgment.” Cranston, 826 P.2d at 254.

[¶ 10] We review a district court's decision to grant a motion to dismiss de novo. Swinney v. Jones, 2008 WY 150, ¶ 6, 199 P.3d 512, 515 (Wyo.2008). Further:

When claims are dismissed under W.R.C.P. 12(b)(6), this court accepts the facts stated in the complaint as true and views them in the light most favorable to the plaintiff. Such a dismissal will be sustained only when it is certain from the face of the complaint that the plaintiff cannot assert any facts that would entitle him to relief. Story v. State, 2001 WY 3, ¶ 19, 15 P.3d 1066, ¶ 19 (Wyo.2001). Dismissal is a drastic remedy and is sparingly granted; nevertheless, we will sustain a W.R.C.P. 12(b)(6) dismissal when it is certain from the face of the complaint that the plaintiff cannot assert any set of facts that would entitle that plaintiff to relief. Robinson v. Pacificorp, 10 P.3d 1133, 1135–36 (Wyo.2000).

Bonnie M. Quinn Revocable Trust v. SRW, Inc., 2004 WY 65, ¶ 8, 91 P.3d 146, 148 (Wyo.2004) (quoting Manion v. Chase Manhattan Mortg. Corp., 2002 WY 49, ¶...