Case Title: Dameron v. Lythgoe

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1986-12-31T00:00:00Z

Document:
Dameron v. Lythgoe1986 WY 220730 P.2d 799Case Number: 86-156Decided: 12/31/1986Supreme Court of Wyoming
DAVID E. DAMERON; 
CLIFFORD W. DAMERON, ALSO KNOWN AS C.W. DAMERON, AND VIRGINIA DAMERON, HUSBAND 
AND WIFE, APPELLANTS (DEFENDANTS),

v.

WILLIAM A. LYTHGOE AND 
JUNE LYTHGOE, HUSBAND AND WIFE; AND HERSHEL WICKETT AND LILLIAN WICKETT, HUSBAND 
AND WIFE, APPELLEES (PLAINTIFFS).

Appeal from the District 
Court, ConverseCounty, William A. Taylor, 
J.

Joe R. Wilmetti, 
Casper, for appellants.

Dennis M. "Joe" 
Hand of Hand, Hand, & Hand, P.C., Casper, for appellees.

Before THOMAS, C.J., and BROWN, CARDINE, URBIGKIT 
and MACY, JJ.

URBIGKIT, 
Justice.

[¶1.]     Suit was filed against 
a maker and two guarantors on two promissory notes, as an obligation that arose 
from a prior lawsuit with a convoluted "settlement" history. The defense to 
payment was failure to obtain a third party as co-maker, consequently 
invalidating the executed notes, and a challenge to the document delivery 
authority of the obligors' attorney. The trial court rejected the note defenses 
in specific findings and by judgment for plaintiff. We 
affirm.

[¶2.]     The foundational issue 
is the validity of two notes, each in the amount of $22,794.50, executed 
pursuant to a stipulation for litigation settlement. Appellant argues for 
invalidity, without actually disputing the intrinsic debt, by contending (1) 
contested delivery; (2) material alteration; (3) invalidity as not signed by one 
anticipated co-maker; and (4) unjustified alteration of the settlement 
agreement.

[¶3.]     Sometime prior to 
December, 1984, the present parties became involved in an earlier lawsuit 
wherein plaintiffs William and June Lythgoe and Hershel Wickett had given money 
to David Dameron for the use and benefit of a Francis McVay. Whatever that may 
have involved is of no moment to us here, since the case was settled by a 
stipulated agreement dated December 28, 1984, in Docket 8857, ConverseCounty:

"The Plaintiffs, William 
A. Lythgoe and June Lythgoe, husband and wife, and Hershel Wickett, by and 
through their counsel, Dennis M. Hand, and the Defendants, Clifford W. Dameron, 
David E. Dameron, and Dameron and Dameron, Inc., a Wyoming corporation, by and 
through their counsel, Frank D. Peasley, have agreed to settle the above 
referenced litigation upon the following terms and 
conditions:

"1. Defendant David E. 
Dameron, together with Francis H. McVay, jointly and severally agree to make, 
execute and deliver to Plaintiffs William A. Lythgoe and June Lythgoe, husband 
and wife, their promissory note in the principal amount of Twenty-two Thousand 
Seven Hundred Ninety-four and 50/100 ($22,794.50) Dollars, bearing interest from 
March 1, 1984, at ten (10%) percent per annum and payable in cash on or before 
March 1, 1985. It is further agreed that Defendant Clifford W. Dameron and his 
wife, Virginia Dameron, will execute the above named promissory note as 
guarantors.

"2. Defendant David E. 
Dameron and Francis H. McVay, jointly and severally, also agree to make, 
execute, and deliver to Plaintiff Hershel Wickett their promissory note in the 
principal amount of Twenty-two Thousand Seven Hundred Ninety-four and 50/100 
($22,794.50) Dollars, bearing interest from March 1, 1984, at ten (10%) percent 
per annum and payable in cash on or before March 1, 1985. It is further agreed 
that Defendant Clifford W. Dameron and his wife, Virginia Dameron, will execute 
the above named promissory note as guarantors. 

"4. In consideration for 
the execution and delivery of the above notes and guarantees, it is agreed the 
litigation pending herein shall be dismissed by 
Plaintiffs.

"5. It is further agreed 
by Plaintiffs that if they receive payment in full of the amounts due on the 
promissory notes, together with interest thereon, on or before March 1, 1985, 
they will assign to the person or persons who pay the note the judgment they 
have secured against Ponderosa Development Corporation in the Federal District 
Court in Civil Action No. C81-0020-B.

"6. Based on the 
foregoing settlement agreement, the respective attorneys for the parties 
stipulate and agree that the above entitled matter be 
dismissed.

"DATED this 28 day of 
December, 1984.

"WILLIAM A. 
LYTHGOE,                                                      
CLIFFORD W. DAMERON; JUNE LYTHGOE,                                                                 
DAVID E. DAMERON; 

husband and 
wife;                                                                 
DAMERON AND DAMERON, HERSHEL WICKETT,                                                                  
INC., Defendants Plaintiffs

"BY:                                                                                         
BY:

" /s/                                                      
                                    
/s/ 

Dennis M. Hand 
of Hand,                                                     
Frank D. Peasley 

Hand & Hand, 
P.C.                                                               
Attorney for Defendants Attorney for Plaintiffs"

[¶4.]     Francis McVay was not a 
party to the prior litigation, and obviously was not a party to the stipulation 
directly or by designation of authority as signed by either 
attorney.

[¶5.]     Being specifically 
concerned, counsel for plaintiff, Dennis Hand, had written on November 29, 1984 
to then counsel for defendants:

"I received your letter 
of November 27, 1984 with enclosures. Before I sign and file the Stipulation for 
Dismissal, I want to have a clear understanding that the absence of Francis 
McVay's signature has no effect on the Settlement Agreement, Stipulation for 
Dismissal, or on the Promissory Notes and Guarantees by Mr. and Mrs. Dameron. 
Please provide written confirmation of this."

[¶6.]     The response that he 
received, signed by Peasley and dated December 3, 1984 
stated:

"This is to confirm your 
understanding as outlined in your letter of November 29, 1984. The failure of 
Francis McVay has no effect on the agreement signed by the Damerons, so long as 
your clients' interest in any claims against Mr. McVay (in particular, their 
judgments) are going to be assigned to my clients in the event they have to pay 
this note off. I will assume this to be the case unless I hear from you to the 
contrary."

Exhibiting 
extreme care, Hand again wrote to Peasley on December 31, 
1984:

"With reference to the 
Settlement Agreement in the above matter, it is necessary that a copy of my 
letter to you of November 29, 1984, as well as a copy of your response of 
December 3, 1984, be made a part of the record and filed in the official court 
file. Accordingly, I am sending a copy of this letter, together with copies of 
the letters referred to above, to Joan Lore to be filed in the court file. These 
letters, together with the Settlement Agreement and Stipulation for Dismissal, 
reflect the full agreement of the parties."

A course of 
correspondence as in evidence here had occurred between Peasley and his clients, 
stating in part:

Letter of May 
29, 1984 to Dameron & Dameron:

"Please get in to see me 
right away, for purposes of completing and signing the documents that were sent 
by Joe Hand. I promised Joe I would get these back to him right away, so unless 
there is some fundamental problem with the way they were drafted, I would like 
to conclude this matter as soon as possible.

"Give Jeanette a call and 
set up a time that would be convenient for the two of you to come in and meet 
with me."

Letter of June 
18, 1984 to Dameron & Dameron:

"Frank McVay still hasn't 
gotten in to sign the promissory notes that Dave signed on June 11. Joe Hand has 
been most patient in waiting for us to get this done, so I have enclosed the two 
promissory notes and ask that Dave get Frank's signature on them right away. 
Dave, please make sure he signs both of them, in the presence of a Notary 
Public.

"I have prepared a 
general guarantee (by Cliff and Virginia) on the backside of each of the 
promissory notes; Cliff, both you and Virginia will have to sign 
these.

* * * * * 
*

"I have been promising 
Joe that I would get these documents back to him right away, so please get them 
both properly executed and back to me immediately. I will then send them to Joe 
and have the lawsuit dismissed.

"If you have any 
questions, contact me immediately. I will assume the documents will be returned 
to me by the end of next week and will advise Joe Hand of such, by a copy of 
this letter to him."

Letter of 
November 27, 1984 to Cliff Dameron:

"I have gone ahead and 
sent the documents on to Joe Hand, in spite of the fact McVay did not get in to 
sign them.

"If there is no 
development on the McVay lawsuit by some time in February, you might want to 
consider taking some protective action so that the inevitable day of reckoning 
on this is not too devastating. I would be more than happy to help you do any 
planning that you think is necessary."

[¶7.]     The two notes had been 
signed by David Dameron on August 23, 1984 and acknowledged by his attorney and 
guaranteed by a guaranty form on the reverse of each instrument 
stating:

"GUARANTEE

"IN CONSIDERATION of Ten 
and More ($10 +) Dollars, and other good and valuable consideration, the 
undersigned do hereby guarantee to William A. Lythgoe and June Lythgoe [Hershel 
and Lilliam Wickett on the other note], husband and wife, full and complete 
payment and performance by David E. Dameron of all the agreements contained in 
that certain Promissory Note dated March 1, 1984, in the principal sum of 
Twenty-two Thousand Seven Hundred Ninety-four and 50/100 ($22,794.50) Dollars, 
due March 1, 1985, with interest at ten (10%) percent, per 
annum.

"IN WITNESS WHEREOF, we 
have hereunto set our hands and seals this 7 day of September, 
1984.

"/s/ _______________ 
"CLIFFORD W. DAMERON

"/s/ _______________ 
"VIRGINIA DAMERON"

[¶8.]     Next May (1985), demand 
for payment was made, and following nonpayment on the demand, suit was 
instituted.

[¶9.]     Of interest, the 
initial answer in the litigation, filed pro se, contained three defenses: a 
general denial; lack of consideration; and failure to freely and fully consent 
to the terms. The presently submitted defenses were first introduced by a 
memorandum of law, without amended pleading reflecting the defenses, after a 
different attorney entered an appearance in behalf of 
defendants.

[¶10.]  The trial record indicates that McVay had 
orally promised to Peasley and to the Damerons that he would sign, but no one 
was able to get him to keep the promise. After execution by Damerons, Peasley, 
as their attorney, had delivered the original notes to Hand as plaintiffs' 
attorney.

[¶11.]  The actual issue presented is that 
Peasley should not have delivered the notes without the unavailable McVay 
signature, and consequently the notes, although signed by makers and guarantors, 
are invalid. In analyzing the legal status of this case which actually lacks 
viable factual dispute, we review the trial court's finding and judgment, to 
determine the legal validity of conclusions made:

"1. Generally in favor of 
the plaintiffs and against the defendants and each of them on all allegations of 
plaintiffs' Complaint and on all disputed facts including, but not limited to 
the following:

"A. Each of the 
Promissory Notes sued on by plaintiffs are supported by valid consideration 
being the dismissal of the previous litigation between the parties. 

"B. The execution of the 
notes by Francis H. McVay was not a material requirement between the parties for 
the settlement and dismissal of the previous litigation between the 
parties.

"C. The defendants were 
afforded opportunity to have secured the signature of Francis H. McVay, but they 
failed to do so.

"D. The defendants' 
attorney in the previous litigation had apparent authority, if not express 
authority, to deliver the Promissory Notes to plaintiffs' counsel without the 
signature of Francis H. McVay.

"E. The defendants and 
each of them have accepted the fruits of the compromise and settlement of the 
preceding litigation between the parties and the defendants and each of them are 
estopped to repudiate the compromise and settlement of the preceding litigation 
between the parties and the validity of the Promissory Notes and guarantees 
delivered to the plaintiffs.

"F. Defendant David E. 
Dameron voluntarily made, executed, and delivered to the plaintiffs, Hershel 
Wickett and Lillian Wickett, husband and wife, his Promissory Note in the 
principal sum of $22,794.50 payable on or before March 1, 1985 with interest 
from March 1, 1984 at the rate of 10% per annum in accordance with the terms and 
conditions as specified more completely on the Note.

"G. Defendant David E. 
Dameron voluntarily made, executed, and delivered to the plaintiffs, William A. 
Lythgoe and June Lythgoe, husband and wife, his Promissory Note in the principal 
sum of $22,794.50 payable on or before March 1, 1985 with interest from March 1, 
1984 at the rate of 10% per annum in accordance with the terms and conditions as 
specified more completely on the Note.

"H. The defendants 
Clifford W. Dameron and Virginia Dameron, husband and wife, voluntarily made, 
executed, and delivered their personal guarantee of the performance of David E. 
Dameron on each of the Promissory Notes described above."

[¶12.]  The usual appellate rule is applied that 
a trial court's findings are afforded a presumption of correctness unless 
inconsistent with the evidence, and will not be disturbed unless clearly 
erroneous. Stockton v. Sowerwine, Wyo., 690 P.2d 1202 (1984); Palmeno v. Cashen, Wyo., 
627 P.2d 163 (1981). This is a documents case, which can be determined by a 
review of the extensive paper trail.

[¶13.]  It is particularly noteworthy that it was 
Damerons and not payees who wanted McVay to sign as co-maker. The real parties 
in financial interest to payees were the senior Damerons, Clifford W. and 
Virginia, as obligated by the guarantee.

[¶14.]  An interesting academic exercise could be 
pursued contemplating what would happen to the admitted obligation of present 
defendants if the case were to be reversed, exacerbated by the corollary fact 
that as to plaintiffs it did not matter if McVay signed since they were not 
looking to him for payment and would not necessarily include him in collection 
litigation. Obviously appellant could have supplemented the litigative 
parameters by including McVay as a third-party defendant if, as the evidence 
suggests, he was amenable to service of process in Wyoming. We decline to 
academically challenge these issues. Reese v. Dow Chemical Company, Wyo., 728 P.2d 1118 
(1986).

[¶15.]  As did the trial court, we have no 
difficulty in factually distinguishing McConnell v. Dixon, 68 Wyo. 301, 233 P.2d 877 (1951) from this case 
as utilized by appellant for principal authority. In that opinion, Justice Blume 
considered the authority of an attorney, without approval, to add a wife as a 
grantee to a deed. The circumstances of settling a lawsuit where a third party 
declines to execute an indebtedness instrument affords a clear differentiation 
in fact. Here, the notes as executed were tendered and accepted as settlement - 
we would apply common sense and good faith. Marathon Oil Company v. Kleppe, 407 F. Supp. 1301, aff'd 556 F.2d 982 (10th Cir. 1977); Busch Development, Inc. v. 
City of Cheyenne, Wyo., 645 P.2d 65 
(1982).

[¶16.]  The facts contained in the record support 
the judgment. Western Utility Contractors, Inc. v. City of 
Casper, Wyo., 731 P.2d 24 (1986); 
Matter of Abas, Wyo., 701 P.2d 1153 (1985). Considering the 
settlement posture for the delivery of the promissory note, we also concur with 
the legal conclusion as to payees1 that authority to deliver the notes 
existed, and do not find the notes to be altered or invalid. "The burden of 
proof is upon him who denies the authority of the attorney." Heyer v. Hines, 36 
Wyo. 53, 252 P. 1028, 1029 (1927); Stricker v. 
Frauendienst, Wyo., 669 P.2d 520 (1983). The settlement 
agreement was not altered, since payees did not assume or accept the obligation 
to secure a co-maker signature on the note. The manifested intention to settle 
is controlling. In giving effect to the intent of the parties, common sense and 
good faith are the leading characteristics of contract construction. Busch 
Development, Inc. v. City of Cheyenne, supra; Wyoming Game and Fish Commission 
v. Mills Co., Wyo., 701 P.2d 819 (1985).

[¶17.]  The judgment of the trial court is 
affirmed.

FOOTNOTE

1 This court does not 
consider whether, pursuant to this well-documented record, the delivery of the 
notes by counsel was improper as to his clients, since that issue was not 
presented to the trial court.