Sheridan Commercial Park, Inc. v. Briggs

• Decision Date: 12 March 1993
• Docket Number: No. 92-139,92-139
• Citation: 848 P.2d 811
• Parties: SHERIDAN COMMERCIAL PARK, INC., a Wyoming corporation, Appellant (Defendant), v. Almira L. BRIGGS, Personal Representative of the Estate of William W. Briggs, a/k/a William Walter Briggs, a/k/a W.W. Briggs, deceased, Appellee (Plaintiff).
• Court: Wyoming Supreme Court

Page 811

848 P.2d 811

SHERIDAN COMMERCIAL PARK, INC., a Wyoming corporation, Appellant (Defendant), v. Almira L. BRIGGS, Personal Representative of the Estate of William W. Briggs, a/k/a William Walter Briggs, a/k/a W.W. Briggs, deceased, Appellee (Plaintiff).

No. 92-139.

Supreme Court of Wyoming.

March 12, 1993.

Bruce P. Badley, Badley & Rasmussen, P.C., Sheridan, Moses Garcia, Legal Intern, Sheridan, for appellant.

John F. Araas, Yonkee & Toner, Sheridan, for appellee.

Russell M. Blood, Brown & Drew, Casper, for amicus curiae Wyoming Ass'n of Realtors, Inc.

Before MACY, C.J., and THOMAS, CARDINE, URBIGKIT ^* and GOLDEN, JJ.

GOLDEN, Justice.

Appellant Sheridan Commercial Park, Inc. (Sheridan), appeals the district court's grant of summary judgment to William W. Briggs (Briggs) in an action for replevin of property retained by Sheridan, attorney's fees, costs and punitive damages. We affirm the summary judgment concerning replevin and reverse the award of attorney's fees, costs and punitive damages.

ISSUES

Sheridan presents the following issues on appeal:

I. The district court erred in assessing attorney fees and punitive damages because the case at hand involves no statutory or contractual provision authorizing attorney fees, and the legal question brought before the district court is based on good faith.

II. Wyo.Stat. § 29-7-101 gives appellant a statutory lien for rent and storage services which takes priority over a previous perfected security interest.

III. The district court erred when it failed to award appellant compensation for storage services contravening this court's decision in Minnehoma.

Briggs frames the issues this way:

I. The appellee Briggs was entitled to summary judgment against the appellant Sheridan Commercial Park, Inc. on his claim of conversion because there was no genuine issue of material fact regarding the essential elements of the claim, which elements were established as a matter of law.

II. Wyo.Stat. Secs. 29-7-101 through -106 do not entitle the appellant, as a landlord, to a lien for past rent due on the personal property of its tenant, or that of a third party, located on the rented premises.

III. The district court properly granted summary judgment to the appellee Briggs and against the appellant Sheridan Commercial Park, Inc. on the claim for attorney's fees and punitive damages because the basis for each of such awards were established as a matter of law, without proper evidence or defense presented by the appellant.

IV. The district court acted properly in not awarding compensation to the appellant for storage services.

V. The district court did not commit error in failing to grant the appellant Sheridan Commercial Park, Inc. unpaid back rent in the amount of $2,218.48.

VI. There was no reasonable cause for the filing of the appeal by the appellant, and therefore the appellant should be taxed with a reasonable fee and reasonable damages pursuant to WRAP 10.05.

FACTS

On June 19, 1986, appellee Briggs ¹ entered into a written loan agreement with Arthur J. and Candance E. Bougie (the Bougies) loaning them $12,000 to begin a business known as the Transmission Doctor. The Bougies signed a promissory note and the loan was secured by a security interest in personal property of the Bougies. Briggs also agreed in writing to lease to the Bougies $13,000 worth of equipment, tools, merchandise and other inventory for their venture. Briggs perfected his security interest in the Bougies' personal property by filing the security agreement and financing statement with the clerk of Sheridan County on June 20, 1986, and a financing statement with the Secretary of State on June 26, 1986. A continuation statement was filed by Briggs on April 22, 1991, giving him a continued perfected interest in property of the Bougies.

The Bougies opened the Transmission Doctor at 1621 Commercial Lane in Sheridan, leasing that property from Sheridan, a Wyoming corporation. In September, 1991, the Bougies defaulted on their payments to Briggs and closed their doors. Briggs demanded that both the equipment he leased to the Bougies and the Bougies' On November 15, 1991, Sheridan filed a counterclaim and answer in district court claiming Briggs to be a joint venturer and co-owner of the Bougies' business by virtue of the manner of payment recited in Briggs' agreements with the Bougies. Specifically, Briggs was to receive ten percent of the business's prior month's gross income, 2/5ths to be applied towards rental payments under the lease agreement and 3/5ths towards the loan agreement. Sheridan noted that neither the lease agreement nor the security agreement securing the loan contained an interest rate to be paid by the Bougies. Sheridan claimed priority over Briggs' perfected security interest for non-payment of rent amounting to $6,450 at $500 per month from August 1991 through May 1992, plus attorney's fees of $3,000.

property that was the subject of the security agreement be returned to him. Sheridan, by letter dated October 3, 1991, refused to return the property to Briggs until $2,218.48 for past rent due on 1621 Commercial Lane was paid by Briggs, plus $731.52 for clean up and repair of the premises. On October 18, 1991, Briggs filed a complaint in county court alleging Sheridan converted the property to its own use and asking for reasonable value of the property plus interest; return of any of the property; punitive damages; attorney's fees and costs and a writ of replevin, under WYO.STAT. § 1-15-301 through 306 (1988). On October 24, 1991, Sheridan moved for a change of jurisdiction to the district court noting that the amount involved exceeded the statutory limit of the county court. Sheridan claimed Briggs was a joint venturer and silent partner with the Bougies and that a landlord's lien for delinquent rent was due Sheridan by statute. See WYO.STAT. § 29-7-101 through 29-7-106 (1981). Sheridan argued that its landlord's lien would have priority over Briggs' perfected security interest under WYO.STAT. § 29-7-106. The action was transferred to district court on November 7, 1991.

On December 20, 1991, Sheridan filed a motion for summary judgment seeking to deny Briggs' motion for writ of replevin and granting Sheridan a lien for rent and personal property. The district court granted Briggs' writ of replevin on January 8, 1992 finding:

1) the Bougies were in default of the lease agreement and Briggs was entitled to the property he leased to them;

2) the Bougies were in default of the security agreement and financing statement and;

3) the property was wrongfully detained by Sheridan.

Sheridan sought review by this court on writ of certiorari which was denied on January 27, 1992, and Briggs filed a motion for summary judgment the following day.

On March 2, 1992, the district court granted summary judgment in favor of Briggs' finding: 1) Sheridan wrongfully and unlawfully converted to its use, property owned by Briggs and property to which Briggs had a valid perfected security interest; 2) WYO.STAT. § 29-7-101 et seq., does not provide for a lien against personal property for rent due; 3) at no time did Sheridan assert right to a "storage lien" against the property; 4) Sheridan's actions were willful and wanton misconduct entitling Briggs to punitive damages and; 5) Sheridan's actions were oppressive, willful detention of property, entitling Briggs to reasonable attorney's fees and costs.

On May 26, 1992, the district court's order and judgment awarded Briggs $8,510.73 in reasonable attorney's fees and costs and $750 in punitive damages. Sheridan appealed to this court on June 8, 1992, and the district court stayed the execution of the order and judgment pending the outcome of this appeal. The Wyoming Association of Realtors, Inc., filed an amicus curiae brief on behalf of Sheridan.

DISCUSSION

We begin by noting our often repeated standard of review for summary judgment:

Summary judgment is proper only when there are no genuine issues of material fact and the prevailing party is entitled to judgment as a matter of law.

Powder River Oil v. Powder River Petroleum, 830 P.2d 403, 406 (Wyo.1992) (quoting McDonald v. Mobil Coal Producing, Inc., 789 P.2d 866, 869 (Wyo.1990)).

I. Landlord's lien for "rent services"

A lien may be created only by statute or contract and the courts may not choose to recognize a lien absent its creation through one of these enumerated ways. Libertyville Township v. Woodbury, 121 Ill.App.3d 587, 77 Ill.Dec. 207, 212, 460 N.E.2d 66, 71 (1984); Kozlowski v. Briggs Leasing Corp., 96 Misc.2d 337, 408 N.Y.S.2d 1001, 1005 (1978); Ridge Community Investors, Inc. v. Berry, 293 N.C. 688, 239 S.E.2d 566, 572 (1977). See 51 Am.Jur.2d Liens § 6 (1979 & Supp.1989). Thus, a landlord may not claim a lien against the property of its tenant for back rent due without agreement by contract or recognition by statute. Hayes v. Harris, 479 N.E.2d 1359, 1361 (Ind.App. 4 Dist.1985); State Bank of Loretto v. Dixon, 214 Minn. 39, 7 N.W.2d 351, 354 (1943); See 49 Am.Jur.2d Landlord and Tenant § 675 (1970 & Supp.1989); Janet Fairchild, Annotation, Application of Statutory Landlord's Lien to Property of Third Person Used by Tenant on Rented Premises, 95 A.L.R.3d 1205 § 2 (1979).

Sheridan's claim to a lien against Briggs for back rent due relies on a claim of statutory entitlement under the following statute:

(a) any person is entitled to a lien on any goods, chattels or animals for his reasonable charges for work or services performed or feed provided when he:

(i) Makes, alters, repairs, bestows work upon, transports, stores or keeps the same.

WYO.STAT. § 29-7-101(a)(1981). Sheridan follows this argument by noting that such a lien would have priority over Briggs' perfected security interest under the following statute:

(a) A lien pursuant to W.S. 29-7-101 through 29-7-106 except as otherwise specifically provided therein shall be prior to all other liens, encumbrances and security...