Case Title: HUTCHINS v. PAYLESS AUTO SALES, INC.

Citation: 

Docket Number: 03-82

State: wyoming

Court: Wyoming Supreme Court

Date: 2004-03-11T00:00:00Z

Document:
HUTCHINS v. PAYLESS AUTO SALES, INC. 2002 WY 838 P.3d 1057Case Number: 00-12Decided: 01/25/2002

October Term, A.D. 2001

 

 

JOSEPHINE 
LOVATO HUTCHINS,  

 Appellant(Defendant),

 

v.

 

PAYLESS 
AUTO SALES, INC.,

a 
Wyoming corporation, 

Appellee(Plaintiff).

 

 

Appeal 
from the District Court of Laramie County:

The 
Honorable Nicholas G. Kalokathis, Judge

 

Representing 
Appellant:

Georg 
Jensen of Law Offices of Georg Jensen, Cheyenne, WY.

 Representing 
Appellee:

John 
C. Patton of Patton & Davison, Cheyenne, WY.

 

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

  

*This 
case was originally assigned to Justice Thomas on August 31, 2000, for the 
rendering of a proffered majority opinion.  
This case was reassigned to Chief Justice Lehman on February 5, 
2001.



LEHMAN, 
Chief Justice. 

[¶1]      Appellant 
Josephine Lovato Hutchins (Hutchins) appeals the district court's grant of 
summary judgment for the plaintiff Payless Auto Sales (Payless).  Payless sought foreclosure and forced 
sale of the joint tenancy interest in Hutchins' home held by its judgment 
debtor, her daughter Sandra Hutchins McDonald (McDonald).  Hutchins cross-claimed seeking 
reformation of the quitclaim deed granting joint tenancy to McDonald on the 
grounds of mutual mistake.  The 
district court denied her motion for summary judgment.  Although we do not approve the reasoning 
of the district court, we affirm its grant of summary judgment for 
Payless.

 

 

ISSUES

 

[¶2]      Appellant 
presents this statement of the issues:

 

1.  Did the court err in finding for the 
plaintiff and against the defendant on motions for summary judgment where the 
defen­dants presented uncontroverted evidence regarding the parties' intent 
and the existence of mutual mistake?

 

2.  Did 
the court err in granting summary judgment for the plaintiff based solely on 
reference to documents in the public record and without any evidence to dispute 
the sworn allega­tions of the defendants regarding their complaint for 
reformation?

 

3.  Should 
the court pick and choose between conflicting affida­vits in rendering a 
decision on a motion for summary judgment?

 

4.  In 
order to prevail on a defense of Laches or Waiver is it necessary to plead the 
same as an affirmative defense?

 

Appellee 
restates the issue thusly:

 

Whether 
the District Court's ruling that there is no genuine issue of material fact and 
that the Appellee was entitled to summary judgment as a matter of law for 
foreclosure was proper under Wyoming law.

  

 

FACTS

 

[¶3]      On July 13, 1993, 
Hutchins executed a quitclaim deed conveying the subject real prop­erty to 
herself and her daughter McDonald as joint tenants with right of 
survivorship.  The next day this 
deed was properly recorded in the public records of Laramie County where the 
property is located.  Two years 
later, on October 14, 1995, Payless Auto Sales made a loan to McDonald and her 
husband evidenced by a promissory note in the principal amount of 
$8,639.83.  At the time the note was 
executed McDonald and her husband and three chil­dren were residing in the 
home.  On November 26, 1996, Payless 
was granted a default judgment against McDonald and her husband in the amount of 
$8,579.83 principal, $1,422.37 interest, and $3,145.00 in costs and fees for a 
total of $13,147.20.  A second 
quit­claim deed was filed in Laramie County on August 26, 1997, conveying 
the property from Hutchins and McDonald as joint tenants to Hutchins and her son 
Timothy M. Hernandez as joint tenants with a right of survivorship.  

 

[¶4]      On October 28, 
1997, McDonald and her husband filed their "Third Amended Chapter 13 Plan" in 
the United States Bankruptcy Court for the District of Wyoming.  This plan listed Payless Auto Sales as a 
3(a) claimant with a "claim secured by property of another paid in full through 
the plan."  The home was listed as 
collateral under this subsec­tion of the plan with a fair market value of 
$35,000,1 and the claim listed as 
$13,147.20.  Subse­quently, the 
McDonalds made payments under the terms of the bankruptcy plan which were 
applied to the Payless judgment.  
However, on September 9, 1998, the Bankruptcy court dismissed the 
McDonalds' case for failure to comply with plan payments.  As a conse­quence, on May 24, 1999, 
Payless filed a complaint for foreclosure on the real property at issue to 
recover the $9,320.93 still owed on its judgment.  Hutchins answered the complaint and 
cross-claimed seeking reformation of the quitclaim deed on the basis of mutual 
mistake.  She contended the 
quitclaim deeds were an estate-planning device intended as a substitute for 
probate and did not accurately reflect the intent of the parties.  Hutchins further alleged that neither 
McDonald nor Hernandez had paid any consideration for the conveyance.  In support of her motion for summary 
judgment, Hutchins, McDonald, and Hernandez submit­ted affidavits which 
stated that the parties' intent at all times was to preserve a life estate for 
Hutchins in the property and to name McDonald, and later Hernandez, as trustees 
to the property to be held in trust for McDonald's three minor children.  They asked that the district court 
recognize their mutual mistake and equitably reform the deeds to reflect the 
parties' true intent. 

 

[¶5]      The district 
court granted summary judgment for the plaintiff Payless on its claim of 
foreclosure on November 5, 1999.  
This timely appeal followed.  
In March of 2000, while this appeal was pending, McDonald's undivided 
one-half interest in the home was sold at a foreclosure sale.2

 

 

STANDARD 
OF REVIEW

 

[¶6]      This case comes 
to us on a grant of summary judgment for Payless, coupled with a denial of 
Hutchins' motion for summary judgment.  
This court has recognized the general rule that a denial of a motion for 
summary judgment is an interlocutory order and as such is not subject to 
appeal.  Matter of Adoption of 
MSVW, 965 P.2d 1158, 1161 (Wyo. 1998); State Farm Mut. Auto. Ins. Co. v. 
Shrader, 882 P.2d 813, 820 (Wyo. 1994).  However, we have adopted the exception 
that, "when the district court grants one party's motion for a summary judgment 
and denies the opposing party's motion for a summary judgment and the district 
court's decision completely resolves the case, both the grant and the denial of 
the motions for a summary judgment are subject to appeal."  Lieberman v. Wyoming.com LLC, 11 P.3d 353, 356 (Wyo. 2000); McLean v. Hyland Enterprises, Inc., 2001 WY 
111, ¶17, 34 P.3d 1262, ¶17 (Wyo. 2001).  
Therefore, we will review Hutchins' argument regarding the denial of her 
summary judgment motion for reformation of the quitclaim 
deed.

 

[¶7]      Summary judgment 
is appropriate if the record, viewed in the light most favorable to the 
non-moving party, reveals that no genuine issues of material fact exist and the 
prevailing party is entitled to judgment as a matter of law.  Worley v. Wyoming Bottling Co., Inc., 
1 P.3d 615, 620 (Wyo. 2000); Terry v. Pioneer Press, Inc., 947 P.2d 273, 275 (Wyo. 1997); Davis v. Wyoming Medical Center, Inc., 934 P.2d 1246, 1250 (Wyo. 1997); W.R.C.P. 56(c).  A fact is material if it establishes or 
refutes an essential element of a claim or defense.  Tidwell v. HOM, Inc., 896 P.2d 1322, 1324 (Wyo. 1995).  In 
evaluating summary judgment, we apply the same standards as the trial court, 
without affording any deference to the trial court's decisions on issues of 
law.  Wilder v. Cody Country 
Chamber of Commerce, 868 P.2d 211, 216 (Wyo. 1994).

 

 

DISCUSSION

 

[¶8]      The district 
court in its order granting summary judgment for Payless found that Payless had 
made a prima facie showing that the property was subject to its judgment lien; 
that Defendant McDonald's undivided one half interest became subject to the 
lien; that subsequent events had not discharged the lien; and that it should be 
foreclosed in satisfaction of the judgment.  The district court then, relying on 
Claassen v. Nord, 756 P.2d 189, 194 (Wyo. 1988), determined that once a 
prima facie case had been made the burden shifted to the party opposing the 
motion to present specific facts showing that a genuine issue of mate­rial 
fact was present.  It was at this 
point the court decided that

 

[t]he 
only evidence offered by the Defendants are their self-serving affidavits that 
this was all a mistake and they were really intending to set up a trust for the 
children of Defendant, McDonald.  
This in the face of clear record evidence and actions of Defendant, 
McDonald, in her bankruptcy to the contrary, and no evidence that there was, is, 
or is going to be a trust.  To 
entertain the self-serving posturing of the Defendants would destroy any ability 
to rely on the public record.  The 
deeds are clear and unambiguous.  At 
least one was notarized by, if not drafted by, an attorney and are plain on 
their face in the public record.  
The Court finds the affidavits ingenuous [sic],[3] and the Court finds that the Court 
is not required to entertain the self-serving affidavits of the Defendants with 
not a single fact sup­porting their contentions, which are just that, 
contentions not statements of facts that can in any way be supported by the 
record or their conduct. Claassen v. Nord, 756 P.2d 189 (Wyo. 1988) at 
page 194. 

 

[¶9]      It is difficult 
to ascertain by the foregoing language precisely what action was taken by the 
district court in regard to the defendants' affidavits.4  However, if the court deter­mined 
that it was free to strike the affidavits in question from consideration on the 
basis that they are "self-serving" or conclusory in the context of mutual 
mistake in the drafting of a quitclaim deed, then we think this reasoning by the 
district court is erroneous as an overbroad application of the holding of 
Claassen v. Nord.  In 
Claassen this court simply reaffirmed its general holdings that 
self-serving affidavits not based in fact may be insufficient to create a 
genuine issue of material fact in a particular context.  756 P.2d  at 194.  In that case we held the affidavits in 
question did not sufficiently support a claim of negligence because they failed 
to include any facts that went directly to the knowledge of the defendants 
necessary to show breach of the duty of care.  

 

[¶10]   The analysis of whether a party's 
affidavit sets forth specific facts adequate to survive a motion for summary 
judgment, though interrelated, is discrete from the analysis required to 
determine whether an affidavit may be properly stricken from the court's 
consideration in deciding a case on summary judgment.  To quote the old clich©, it's like 
comparing apples to oranges.  In the 
latter analysis, first some motion to strike the affidavits or objection to the 
affidavits under Rule 56(e) must be made.  
In Conway v. Guernsay Cable TV, this court rejected the 
appellants' contention that the affidavit of the appellees' expert witness 
should be stricken, stating: 

 

It is well established that a party must move to 
strike an affida­vit which violates Rule 56(e); if he fails to do so, he 
will waive his objection, and, in the absence of a gross miscarriage of justice, 
the court may consider the defective affidavit.  10A Wright, Miller & Kane, 
Federal Practice and Procedure:  
Civil 2d § 2738 (1983).  
The record in the present case is devoid of any objection or motion to 
strike the affidavit on the ground that it violated Rule 56(e).  

 

713 P.2d 786, 788-89 (Wyo. 
1986).

 

[¶11]   
Likewise, in the present case, no motion to strike the parties' 
affidavits appears in the record.  
Furthermore, the affidavits of the defendants are not "defective" as the 
term is prop­erly employed in a Rule 56(e) analysis.  An affidavit should not be stricken if 
it is "made on personal knowledge," "set[s] forth such facts as would be 
admissible in evidence," "show[s] affirmatively that the affiant is competent to 
testify to the matters stated therein," and has attached to it the papers and 
documents to which the affidavit refers.  
Rule 56(e); Greenwood v. Wierdsma,741 P.2d 1079, 1084-85 (Wyo. 
1987).  

 

[¶12]   
The affidavits of Hutchins, McDonald, and Hernandez are each made upon 
the party's own personal knowledge and show that the affiants are competent to 
testify to the matters stated therein.  
Regrettably, it is application of the mandate of Rule 56(e) that the 
affidavit "set forth such facts as would be admissible in evidence" that 
presumably gives rise to the improper apple/orange mingling of the two 
analyses.  

 

[¶13]   This court has long held that 
affidavits based on opinion, belief, conclusions of law, or hearsay statements 
do not comply with subdivision (e) of W.R.C.P. 56, Cook Ford Sales, Inc. v. 
Benson, 392 P.2d 307, 309 (Wyo. 1964); Keller v. Anderson, 554 P.2d 1253, 1258 (Wyo. 1976); Cordova v. Gosar, 719 P.2d 625 (Wyo. 1986), as, 
ultimately, the material presented to the court by way of affidavit in summary 
judgment proceedings should be such as would be admissible in evidence at the 
time of trial.  Newton v. 
Misner, 423 P.2d 648, 650 (Wyo. 1967).  
Thus, "courts cannot properly consider those portions of an 
affidavit which are categorical assertions and conclusions" of an 
ultimate fact.  Greenwood, 
741 P.2d  at 1086 (citing Natrona County v. Casper Air Service, 536 P.2d 142 (Wyo. 1975) and Wells v. Jeep Corp., 532 P.2d 595 (Wyo. 1975)) 
(emphasis added).  

 

[¶14]   The affidavit of appellant Hutchins 
states:

 

Come Now the Defendant, Josephine Lovato Hutchins, in 
the above entitled proceeding, being first duly sworn upon their oath and do 
depose and say as follows:

 

1.  That 
I am an adult person and competent to make this affidavit. I have personal 
knowledge of the matters set forth herein.

 

2.  That 
prior to July 13, 1993 I was the sole owner of the property located at [address 
of real property] in Cheyenne, Wyoming, more particularly known as [legal 
description of real property].

 

3.  That 
in July of 1993 I became concerned for the future of my grandchildren, the 
children of my daughter, Sandra J. Hutchins, and determined that I wished to 
provide for them to always have a home.  
It was at that time I signed a deed, transferring the property above 
described to myself and my daughter, Sandra J. Hutchins.  It was my intent to retain ownership of 
the property during my lifetime and that on my death that my daughter would hold 
the property as a trustee for my grandchildren, [TS, JH, and IM]. 

 

[4].  That 
in August of 1997 I became concerned about my daughter, Sandra, holding the 
property as trustee for my grandchildren.  
She was having problems with her husband and he had caused significant 
damage to the property.  I was 
concerned enough that I asked my daughter to transfer the property to her 
brother, Timothy M. Hernandez, who is the God-father of my grandchildren, [TS, 
JH, and IM]. 

 

[5].  That 
on August 25, 1997 my daughter and I signed a new deed transferring the property 
to myself and my son, Timothy M. Hernandez.  It was my intent to continue to retain 
ownership of the property until my death and that upon my death that my son, 
Timothy would hold the prop­erty for my grandchildren as a trustee.  It was due to a lack of understanding 
that these provisions were not included in deeds.  

 

[6].  That 
at no time has my daughter, Sandra J. Hutchins, now McDonald, nor my son, 
Timothy M. Hernandez, paid any money or given me anything of value for the 
transfers that I described above.

 

[7].  That 
at all times I do believe they understood my intent and would have honored my 
wishes to have this property held for the benefit of my grandchildren upon my 
death.

 

[8].  Further 
Affiant Sayeth Naught.5 

 

[¶15]   
The foregoing affidavit clearly and unmistakably contains relevant, 
competent, and admissible evidence that Hutchins would properly have been 
allowed to testify to at a trial on the merits for reformation of the quitclaim 
deeds.  

 

[¶16]   
Payless further contends that the "deed speaks for itself, it is clear 
and unambiguous and therefore Appellant's parol assertions as to the intent and 
import of the document are irrelevant and immaterial."  We disagree.  This court has long held that the parol 
evidence rule is not applicable in a suit for reformation on the basis of mutual 
mistake.  We stated in the seminal 
case of Russell v. Curran:

 

It is practically a universal rule that in suits to 
reform written instruments on the ground of fraud or mutual mistake, parol 
evidence is admissible to establish the fact of fraud or of a mistake and in 
what it consisted, and to show how the writing should be corrected in order to 
conform to the agreement or intention which the parties actually made or had, 
and this, even though the instrument in question is within the statute of 
frauds.  So far as the introduction 
of such proof may be said to violate the statute, it is immaterial whether it 
comes from the complain­ant or the respondent.  The nature of the action is such that it 
is outside the field of operation of the parol-evidence rule.  If this were not so, a rule adopted by 
the courts as a protection against fraud and false swearing would, as has been 
said in regard to the analogous rule known as the statute of frauds, become the 
instrument of the very fraud it was intended to prevent.  Evidence of fraud or mistake is 
seldom found in the instru­ment itself, and unless parol evidence may be 
admitted for the purpose of procuring its reformation, the aggrieved party would 
have as little hope of redress in a court of equity as in a court of 
law.

 

Generally, it may be said that any testimony which 
tends to prove the mistake alleged or the intention of the par­ties is 
admissible.  A witness in a position 
to know may testify concerning the intention of the parties to an agreement, to 
the same effect as to any other fact.

 

Russell v. Curran, 66 Wyo. 173, 187-88, 206 P.2d 1159, 1163 (Wyo. 1949) 
(emphasis added).

 

[¶17]   
Consequently, we conclude that the affidavits of the defendants were 
properly before the court and must be considered in making a determination 
whether the grant of summary judgment to Payless complied with the requirements 
of W.R.C.P. 56.  Accordingly, if, in 
finding that "the Court is not required to entertain the self-serving affidavits 
of the Defen­dants with not a single fact supporting their contentions, 
which are just that, contentions not statements of facts that can in any way be 
supported by the record or their conduct" the district court determined that it 
could sua sponte strike the affidavits of the defendants, Hutchins, 
McDonald, and Hernandez, under W.R.C.P. 56(e), then it committed error as a 
matter of law. 

 

[¶18]   
Nevertheless, even after giving the proper weight to the appellant's 
affidavits, we hold that Payless' motion for summary judgment was properly 
granted by the district court.  When 
evaluated, as required, with reference to the applicable law governing the 
equitable remedy of reformation, it is clear that appellant has not established 
a genuine issue of mate­rial fact sufficient to preclude a grant of summary 
judgment against her.6  

 

[¶19]   
Reformation is an equitable remedy which emanates from the maxim that 
"equity treats that as done which ought to have been done."  66 Am.Jur.2d Reformation of 
Instru­ments § 2 at 528 (1973).  
At its most fundamental level, the remedy acknowledges the fact that for 
one reason or another written instruments do not always accurately memorialize 
the antecedent agreement of the parties.  
See 3 Arthur L. Corbin, Corbin on Contracts § 540 
(1960).  Accordingly, a court acting 
in equity may reform a written instrument upon clear and convincing evidence of 
the following elements: (1) a meeting of the mindsa mutual understanding 
between the partiesprior to the time a writing is entered into, (2) a written 
contract, or agreement, or deed (3) which does not conform to the understanding, 
by reason of mutual mistake.  
Toland v. Key Bank of Wyoming, 847 P.2d 549, 554 (Wyo. 1993); 
Gasaway v. Reiter, 736 P.2d 749, 751 (Wyo. 1987); Crompton v. 
Bruce, 669 P.2d 930, 934 (Wyo. 1983).  
Clear and convincing evidence is defined as "that kind of proof which 
would persuade a trier of fact that the truth of the contention is highly 
probable."   MacGuire v. 
Harriscope Broadcasting Co., 612 P.2d 830, 839 (Wyo. 1980).  See also Story v. State Bd. of 
Medical Examiners, 721 P.2d 1013, 1014 (Wyo. 1986); Matter of GP, 679 P.2d 976, 982 (Wyo. 1984).

 

[¶20]   
This court has adopted the reasoning of the United States Supreme Court 
in Anderson v. Liberty Lobby, Inc., that "the inquiry involved in a 
ruling on a motion for summary judg­ment or for a directed verdict 
necessarily implicates the substantive evidentiary standard of proof that would 
apply at the trial on the merits." Oil, Chemical & Atomic Workers Int'l 
Union v. Sinclair Oil Corp., 748 P.2d 283, 288-89 (Wyo. 1987) 
(quoting Anderson, 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202 (1986)).

 

[¶21]   
Consequently, in light of the significant burden that appellant bears to 
show entitle­ment to the equitable remedy of reformation given the posture 
of this case and the other evidence indicating more knowledgeable drafting of 
the second deed, we cannot say that the affidavits of Hutchins, McDonald, and 
Hernandez standing alone are sufficient to raise a genuine issue of material 
fact on the issue of mutual mistake sufficient to preclude summary judgment for 
Payless.  Accordingly, we affirm the 
judgment of the district court.

 

 

FOOTNOTES

1It is unclear whether this figure 
represents total fair market value of the property in question or only 
McDonald's interest in the property. 

 

2In response to Payless' subsequent 
motion to dismiss this appeal as moot, this court determined that because 
Payless was itself the purchaser of McDonald's interest, appellant and appellee 
remain the sole interested parties in this appeal.  Further, because Payless made its 
purchase with actual notice of any possible defect in title, no "bona fide 
purchaser" is present to potentially defeat the remedy requested by the 
appellant, reformation of the deed.  
Crompton v. Bruce, 669 P.2d 930 (Wyo. 1983).  Therefore, this court's determination of 
the issue would continue to have a "practical effect on the existing 
controversy" and "any judgment rendered can be carried into effect" even after 
the foreclosure sale of the property interest.  Thus, the appeal cannot properly be 
dismissed as moot. 

 

3We presume the court meant to find the affidavits 
disingenuous or "lacking in candor." 

 

4This order perhaps exemplifies the 
shortcomings that often accompany the common practice of allowing the prevailing 
party, subject to its opponent's objection, to draft the order of the court. 

5The affidavits of McDonald and 
Hernandez are substantially similar to the affidavit of Hutchins.  

6It is of some concern that the court 
issued its order without reference to the applicable substantive law of the 
underlying claim. This court has established a six-step framework to guide the 
analysis and resolution of claims under W.R.C.P. 56.  Unquestionably, district courts should 
utilize it in making their summary judgment determinations.  See Cordova v. Gosar, 719 P.2d 625 (Wyo. 1986); Davenport v. Epperly, 744 P.2d 1110 (Wyo. 1987); 
Smith v. Ensley, 752 P.2d 1374 (Wyo. 1988); Matter of E.B., 795 P.2d 1212 (Wyo. 1990).