Case Title: Barker Bros., Inc. v. Barker-Taylor

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1992-01-15T00:00:00Z

Document:
Barker Bros., Inc. v. Barker-Taylor1992 WY 5823 P.2d 1204Case Number: 90-287Decided: 01/15/1992Supreme Court of Wyoming
BARKER BROTHERS, INC., a 
Wyoming Corporation, George J. Barker, Robert M. Barker, Gabriel B. Barker, 
Joseph E. Barker and Eugene C. Barker, co-partners doing business under the firm 
name and style of Barker Brothers Company, and Ernestine M. 
Barker,

 Appellants 
(Plaintiffs),

v.

Barbara Jo BARKER-TAYLOR 
and Douglas Taylor, 

Appellees 
(Defendants).

Appeal from District 
Court, Sheridan County, James N. Wolfe, J.

Sharon L. 
Kinnison, Holstedt & Kinnison Law Offices, P.C., Sheridan, for 
appellants.

Michael K. 
Shoumaker, Sheridan, for appellees.

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

THOMAS, Justice.

[¶1]      The primary issue 
to be resolved in this case is whether, following a hearing held to consider a 
claim of exemption of property from garnishment or execution, a trial court can 
amend or modify a default judgment in the absence of notice that modification of 
default judgment will be addressed. The issues presented for review include 
contentions that the trial court should not have considered a claim for 
exemption when no attachment, garnishment, or execution proceeding was pending; 
should not have considered objections to the default judgment by the defendant 
against whom the judgment had been entered; should not have set aside any 
portions of the default judgment; and the plaintiffs should not be deprived of 
the benefit of effective relief against the defendant in default because claims 
still were pending against another defendant. In our view, the events that 
occurred in the trial court deprived plaintiffs of due process of law because 
relief in the form of modification of the judgment was afforded in absence of 
any notice to plaintiffs and without a hearing on that question. We reverse the 
order of the district court, and remand the case to permit furnishing of 
appropriate notice to be followed by a hearing on the issues set forth in the 
notice.

[¶2]      Barker Brothers, 
Inc., George J. Barker, Robert M. Barker, Gabriel B. Barker, Joseph E. Barker 
and Eugene C. Barker, co-partners doing business under the name of Barker 
Brothers Company, and Ernestine M. Barker (Barker Brothers) set forth these 
issues in their Brief of Appellant:

"1. Whether the Court 
should have heard an exemption claim when there were no pending attachments, 
executions or garnishments and when the Judgment imposed a constructive trust 
upon the property in question.

"2. Whether the Court 
should have considered the Defendant's objections to the Default Judgment when 
she had not filed an Answer and made no showing under Rule 55(c) of the Rules of 
Civil Procedure.

"3. Whether the Court 
should have set aside portions of the Default Judgment entered upon a verified 
Complaint and evidence of amount of damages.

"4. Whether Plaintiffs 
should be deprived of all effective relief from an Order setting aside portions 
of a default judgment entered against one defendant, just because the Complaint 
against another defendant in the case is still pending."

Barbara Jo 
Barker-Taylor (Barker-Taylor) and Douglas Taylor (Taylor) rephrase those issues 
in their Brief of Appellees in this way:

"1. Did constructive 
trusts exist in this case?

"2. Did the District 
Court have the right to reserve a summary judgment until evidence of a 
constructive trust was submitted?"

[¶3]      We necessarily 
must rely in part upon unchallenged facts set forth in the briefs of the 
parties, since those facts are not addressed in the record. Douglas Taylor and 
Barbara Jo Barker were married on July 31, 1987. Barker-Taylor had been employed 
as a bookkeeper by Barker Brothers from approximately 1975 until her discharge 
on June 9, 1989. Barker Brothers, Inc. was a general contracting firm in the 
city of Sheridan, and Barker Brothers Company operated a trailer court in the 
town of Ranchester. Barker-Taylor was charged with and convicted of embezzling 
funds from her employer, Barker Brothers. Barker Brothers then brought this 
civil action alleging fraud and wrongful conversion of funds and seeking to 
recover those funds from Barker-Taylor and Taylor.

[¶4]      It is necessary 
to furnish a somewhat detailed description of the pleading aspect of the case, 
including motions filed by the parties, hearings that were held on those 
motions, and the orders that both granted and denied those motions. This 
information is fundamental to an understanding of the problem in this case. When 
the complaint was filed on April 25, 1990, a motion for pre-judgment attachments 
and garnishments also was filed by Barker Brothers. That motion was granted by 
the trial court on April 25, 1990. The pre-judgment writs of attachment and 
garnishment were returned reporting, however, that there were no funds or other 
property available for attachment. Subsequently, the district court released the 
garnishment bond on June 25, 1990. On April 30, 1990, Barker Brothers had also 
filed a motion for a temporary restraining order seeking to prevent 
Barker-Taylor and Taylor from selling, attempting to sell or, in any other way, 
encumbering or disposing of certain real and personal property. While the reason 
is not clear from the record, that motion never was heard.

[¶5]      On May 16, 1990, 
Taylor filed an answer to the complaint together with a counterclaim against 
Gabriel Barker. Taylor denied all of the allegations in the complaint except 
those that dealt with residency and the prior conviction of Barker-Taylor. 
Taylor also denied any knowledge of wrongdoing on the part of Barker-Taylor. The 
matter addressed in the counterclaim was an ancillary one, and Barker Brothers 
filed a motion to dismiss the counterclaim on May 25, 1990, relying upon Rule 
13, W.R.C.P. That motion was granted on July 30, 1990.

[¶6]      Barker-Taylor 
failed to answer the complaint and, on August 27, 1990, default judgment was 
entered against her. The default judgment included a permanent injunction 
prohibiting the sale of certain real estate, a mobile home together with 
specified furnishings inside of the mobile home, specific vehicles identified by 
title number, and other miscellaneous property. In addition, the default 
judgment provided that the title to real estate should be conveyed to Barker 
Brothers by a deed and the personal property listed was held by Barker-Taylor in 
constructive trust for the use and benefit of Barker Brothers.

[¶7]      On September 6, 
1990, Taylor and Barker-Taylor both filed an exemption claim with respect to the 
default judgment asserting that the property either was solely owned by Taylor 
or was owned by Taylor and Barker-Taylor in a tenancy by the entirety, making it 
exempt from execution in accordance with Wyoming law. The hearing on this claim 
of exemption was held on October 3, 1990, and Barker Brothers and Taylor and 
Barker-Taylor all were represented by counsel. Taylor and Barker-Taylor argued 
that, after the default judgment was entered against Barker-Taylor, the 
attempted pre-judgment attachment against all of the joint property was 
premature because there was no judgment entered against Taylor. They apparently 
agreed the order granting default judgment against Barker-Taylor was proper, but 
then urged that the part of that judgment preventing the transfer of property in 
which Taylor had an interest was invalid. Barker Brothers contended a 
constructive trust existed with respect to that property from the time 
Barker-Taylor purchased it with money she had embezzled from Barker 
Brothers.

[¶8]      On October 15, 
1990, the district court entered its order vacating the portion of the default 
judgment granting the permanent injunction; the portion requiring that title be 
transferred to Barker Brothers; the portion imposing a constructive trust on the 
personal property, and the portion requiring an accounting. The court's order 
reads:

"* * * No evidence has 
been presented to this Court indicating that the funds embezzled by the 
Defendant Barker-Taylor were used to purchase said property thereby creating any 
constructive trust. All that has been demonstrated is that the Defendant 
Barker-Taylor did embezzle funds of the Plaintiffs and that at some time, either 
Defendant Barker-Taylor, or Taylor, or both, purchased or otherwise acquired 
this property. No other evidence of any connection between the embezzled funds 
and the property has been offered."

[¶9]      Barker Brothers 
appealed from that order on October 30, 1990 and, on December 24, 1990, 
Barker-Taylor and Taylor filed a Motion to Dismiss the Appeal for Lack of 
Jurisdiction, asserting that the order sought to be appealed was not a final 
order since it did not comply with Rule 54(b), W.R.C.P., and that the majority 
of the property to be addressed in connection with the appeal was held in 
tenancies by the entireties as to which no final adjudication could be made 
until the case against Taylor had been completed. Barker Brothers responded to 
this motion on January 4, 1991 and, on January 7, 1991, this court dismissed the 
appeal for lack of jurisdiction in accordance with the grounds asserted in the 
motion. Barker Brothers filed their petition for reinstatement of the appeal on 
January 16, 1991 and, on January 25, 1991, we denied the petition for 
reinstatement, but treated the pleading as a petition for writ of certiorari, 
which was granted. Further action in the trial court was stayed upon granting 
the petition for writ of certiorari.

[¶10]   On November 9, 1990, prior to the 
time that the writ of certiorari was granted, Taylor had filed a motion for 
summary judgment in the trial court. That motion was supported by his affidavit 
in which he stated that none of the funds that were taken from Barker Brothers 
were used to purchase the real estate in question that was owned by Taylor and 
Barker-Taylor in a tenancy by the entirety and, further, that the funds were not 
used to purchase certain personal property owned by Taylor prior to his marriage 
to Barker-Taylor. Taylor also stated that no constructive trust applied to the 
listed real and personal property and he did not accept for his use and benefit 
any proceeds of the embezzlement with knowledge that the funds had been 
wrongfully taken by Barker-Taylor. The district court granted the summary 
judgment in favor of Taylor on January 18, 1991, ruling that there was no 
genuine issue as to any material facts to inhibit the entry of judgment in favor 
of Taylor. No appeal has been taken from the order granting summary 
judgment.

[¶11]   Our grant of certiorari on January 
25, 1991, was pursuant to Article 5, Section 3, of the Constitution of the State 
of Wyoming, which states, in pertinent part:

"* * * The supreme court 
shall also have power to issue writs of mandamus, review, prohibition, habeas 
corpus, certiorari, and other writs necessary and proper to the complete 
exercise of its appellate and revisory jurisdiction."

A writ of 
certiorari is a discretionary writ issuable when there is no other adequate 
remedy. State ex rel. Pearson v. Hansen, 409 P.2d 769 (Wyo. 1966). In this case, 
there was not a final order or judgment as defined in Rule 1.05, W.R.A.P., at 
the time the initial notice of appeal was filed. Neither were the requirements 
of Rule 54(b), W.R.C.P., satisfied. Taylor then was still involved in the trial 
court proceedings, and no final order or judgment existed so far as his interest 
was concerned until the motion for summary judgment was granted on January 18, 
1991. See Dexter v. O'Neal, 649 P.2d 680 (Wyo. 1982); Public Service Commission 
v. Lower Valley Power & Light, Inc., 608 P.2d 660 (Wyo. 1980).

[¶12]   The primary issue to be resolved in 
this case is whether, after the claim for exemption was filed by Taylor and 
Barker-Taylor, the trial court could amend or modify the default judgment 
against Barker-Taylor following the hearing on the exemption claims. It is clear 
that, when there are several defendants, a default judgment against only one of 
the defendants does not dispose of all the issues and default judgment is only 
appealable if the court directs the entry of a final judgment and makes an 
express determination that there is no just reason for delay and an express 
direction for the entry of that judgment. Rule 54(b), W.R.C.P.; Hoback Ranches, 
Inc. v. Urroz, 622 P.2d 948 (Wyo. 1981); Hayes v. Nielson, 568 P.2d 905 (Wyo. 
1977); Ambariantz v. Cunningham, 460 P.2d 216 (Wyo. 1969), Reeves v. Harris, 380 P.2d 769 (Wyo. 1963). The default judgment in this case did not include the 
appropriate language that Rule 54(b), W.R.C.P., demands. Taylor was still an 
active defendant in the case, and the last part of Rule 54(b), W.R.C.P., makes 
it clear that, until a final order is entered, the original decision can be 
revised. In that respect, Rule 54(b) provides, in pertinent part:

"* * * In the absence of 
such determination and direction, any order or other form of decision, however 
designated, which adjudicates fewer than all the claims or the rights and 
liabilities of fewer than all the parties shall not terminate the action as to 
any of the claims or parties, and the order or other form of decision is 
subject to revision at any time before the entry of judgment adjudicating 
all the claims and the rights and liabilities of all the parties." (Emphasis 
added.)

[¶13]   It follows that the trial court had 
jurisdiction to amend or modify the default judgment against Barker-Taylor up 
until the time that the order was entered granting summary judgment in favor of 
Taylor. At that point, all of the pending claims and the rights and liabilities 
of Taylor were adjudicated, and the default judgment against Barker-Taylor 
became final when the summary judgment was entered in favor of Taylor. The trial 
court did have jurisdiction to modify the default judgment on October 15, 
1990.

[¶14]   Still, when an order is to be 
amended or modified, the parties are entitled to due process of law. The 
dispositive issue in this case then is whether due process was afforded to 
Barker Brothers in connection with the hearing on the claims for exemption from 
execution or garnishment. The other issues raised by these appellants will not 
be addressed except as a corollary to this controlling question.

[¶15]   Due process of law includes notice 
and an opportunity to be heard. That notice and the opportunity to be heard are 
unquestionably incidental to affording due process of law. See Bjugan v. Bjugan, 
710 P.2d 213 (Wyo. 1985); Tanner v. Tanner, 482 P.2d 443 (Wyo. 1971); State ex 
rel. Blonder v. Goodbrod, 77 Wyo. 126, 307 P.2d 1073 (1957). Due process of law 
is guaranteed to a party who has a legitimate property interest at stake under 
the Fourteenth Amendment of the Constitution of the United States1 and Article 1, Section 6 of the 
Constitution of the State of Wyoming.2 Barker Brothers does have a 
property interest at stake in this case.

[¶16]   Barker-Taylor embezzled money from 
Barker Brothers and, according to the allegations of the complaint, subsequently 
used that money to purchase both real and personal property. Barker-Taylor 
admitted she had purchased property with the money she had taken from Barker 
Brothers when she failed to answer the complaint. Barker Brothers then contend 
that a constructive trust was established once the embezzled funds were used to 
purchase property, both real and personal. By the complaint and, subsequently, 
the language of the default judgment, Barker Brothers sought to enjoin the sale 
of property owned either solely by Taylor, solely by Barker-Taylor, or that 
owned by them jointly as tenants by the entirety if that property had been 
purchased in whole or in part with funds embezzled from Barker 
Brothers.

[¶17]   Before a property interest like 
that claimed by Barker Brothers can be terminated, due process of law must be 
afforded to that party in the form of notice and a meaningful opportunity to be 
heard. Lawrence-Allison & Associates West, Inc. v. Archer, 767 P.2d 989 
(Wyo. 1989). The notice that was given in this case was of a hearing on the 
claims of Taylor and Barker-Taylor for exemption from garnishment or execution. 
On August 27, 1990, a "Judgment and Notice of Right to Hearing" was mailed to 
Barker-Taylor. On September 6, 1990, Taylor and Barker-Taylor filed their claims 
for exemption as to certain property together with a request for a hearing. An 
order was entered on September 21, 1990 setting for hearing the claims of Barker 
and Barker-Taylor for exemption. This notice was not adequate to suggest in any 
way that the default judgment would be amended or modified, and no other notice 
was given. Barker Brothers attended court on the hearing date expecting to 
contest the claims for exemption. Barker Brothers did just that, and it was only 
after the trial court issued the order to modify the default judgment that 
Barker Brothers realized that, in some way, they were expected to prove more 
facts at the hearing.

[¶18]   The modification of the default 
judgment, without notice or an opportunity to be heard, violates due process of 
law. The due process requirements are met where the notice that is given is not 
misleading and sufficiently apprises the parties of the issues in controversy. 
White v. Board of Trustees of Western Wyoming Community College, 648 P.2d 528 
(Wyo. 1982), cert. denied 459 U.S. 1107, 103 S. Ct. 732, 74 L. Ed. 2d 956 (1983). 
That notice must be given, and it must afford the opposing party a reasonable 
opportunity to know the claims of the moving party and to meet them. White. We 
conclude that, in this case, the notice of the hearing on the exemption claims 
was inadequate to advise Barker Brothers that they should address any 
modification of the default judgment.

[¶19]   Since the notice was inadequate, 
Barker Brothers had no real opportunity to defend at the hearing they attended. 
When the hearing resulted in an amendment to the default judgment, they were 
deprived of the basic essential requirements of due process of laws as provided 
in the Constitution of the United States and the Constitution of the State of 
Wyoming. We reverse the order modifying the default judgment and remand the case 
to the trial court in order that an appropriate notice of an effort to modify 
the default judgment can be furnished, which then can be followed by a hearing 
on the issue noticed.

FOOTNOTES

1           
The Fourteenth Amendment to the Constitution of the United States 
provides:

"All persons born or 
naturalized in the United States and subject to the jurisdiction thereof are 
citizens of the United States and of the State wherein they reside. No State 
shall make or enforce any law which shall abridge the privileges or immunities 
of citizens of the United States; nor shall any State deprive any person of 
life, liberty, or property, without due process of law; nor deny to any person 
within its jurisdiction the equal protection of the laws."

2           
Article 1, Section 6, of the Constitution of the State of Wyoming 
provides:

"No person shall be 
deprived of life, liberty or property without due process of law."