Case Title: Mad River Boat Trips, Inc. v. Jackson Hole Whitewater, Inc

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1991-10-18T00:00:00Z

Document:
Mad River Boat Trips, Inc. v. Jackson Hole Whitewater, Inc1991 WY 129818 P.2d 1137Case Number: 91-70Decided: 10/18/1991Supreme Court of Wyoming
MAD RIVER BOAT TRIPS, 
INC., APPELLANT (DEFENDANT),

v.

 JACKSON HOLE 
WHITEWATER, INC., APPELLEE (PLAINTIFF).

 Appeal from the 
DistrictCourtofTetonCounty, D. Terry Rogers, 
J.

 Lawrence B. Hartnett, 
Jackson, for appellant.

 William R. Fix, Jackson, for 
appellee.

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

 URBIGKIT, Chief 
Justice.

 [¶1.]     This appeal provides a 
thoughtful and even creative second sequence in the litigative campaign 
involving the sale of two United States Forest Service special use permits for 
conducting float trips on the Snake River in Teton County, Wyoming. See Mad River Boat Trips, Inc. v. 
Jackson Hole Whitewater, Inc., 803 P.2d 366 (Wyo. 1990) (Mad River I). This second appeal 
involves claimed attorney's fees and damages first raised after this court 
reversed the trial court's original decision and permitted appellant to rescind 
its contract to sell rights to the permits.

 [¶2.]     Rescission has not 
occurred since appellant Mad River Boat Trips, Inc. has not yet refunded 
payments to appellee in order to be in compliance with the first appellate 
"victory." Notwithstanding that incomplete status, this intermediate stage of 
the litigation causes us to consider the trial court's denial of attorney's fees 
and damages which appellant desires to obtain to offset or minimize its refund 
obligations of about $54,500 constituting the amount previously paid by appellee 
Jackson Hole Whitewater, Inc. before the decision of this court ordered the 
sales agreement rescission in Mad River I. 

 [¶3.]     Information about how 
two boaters can fight over the United States Forest Service special use permits 
is detailed in our first decision. It suffices for present purposes to recognize 
that rescission of the sales agreement occurred by failure of a condition 
precedent in the written undertaking. With reversal, appellant now comes to this 
court with the appearance of reluctance to refund payments made which is 
required to accomplish the contract rescission.

 [¶4.]     Following issuance of 
the mandate in MadRiver I, present (and 
prior) appellee filed a motion to compel compliance involving specifically a 
refund of contractual payments. An order in conformity by the trial court was 
entered stating:

      Plaintiff has filed a 
Motion for Compliance with the Mandate of the Supreme Court issued 
herein.

      IT IS ORDERED that 
Plaintiff, Jackson Hole Whitewater, Inc., is hereby directed to take all actions 
necessary to have the rights to the special use permits which are the subject 
matter of this action transferred back to the Defendant, Mad River Boat Trips, 
Inc., upon the payment by Mad River Boat Trips, Inc. to Plaintiff of all sums 
paid by Plaintiff as consideration for the initial transfer of the two permits 
to Plaintiff.

 [¶5.]     Responsive to the 
repayment order, appellant submitted a claim for offset purposes against the 
$54,557.26 to be refunded. This setoff, in an unstated amount, would first come 
from contractually provided attorney's fees incurred in the prior trial and 
appeal claimed by it as the successful litigant. Additionally requested were 
damages for appellee's "wrongful refusal to accept return of the monies 
previously paid" when termination of the contract had been first demanded before 
the litigation started. Appellant identified the damages as lost revenue for the 
time appellee operated under the assignment of the two permits during 1989 and 
1990 while the contract was still in force.

 [¶6.]     The trial court denied 
a hearing and denied the claims of both attorney's fees and damages by a 
five-page order in February 1991. The decision was based upon the discretionary 
authority to award or deny attorney's fees and on the basis that a damage claim 
had not been pleaded nor proven.1 With this sequential history of Mad 
River II, it is necessary to examine pleadings and issues in MadRiver I.

 [¶7.]     In its 1989 complaint, 
appellee sued to require appellant to transfer the two United States Forest 
Service special use permits. Although the motion practice was active during the 
next several months, the only responsive pleading filed, including the filing 
and withdrawal of a notice of appeal by appellant, was a motion to dismiss. In 
July 1989, the trial court, following the motion to dismiss, entered a judgment 
construing the contract (the decision subsequently reversed by Mad River I) and, 
in October, held a two-day hearing on damage claims by the appellee against 
appellant. With the "Final Judgment" entered on November 1, 1989 from which the 
first appeal was taken, appellant had within this record as a responsive 
pleading to appellee's specific performance and damage complaint only the 
original motion to dismiss which had been adversely determined by the decision 
and judgment validating the sales agreement.2 At this juncture, within Mad River 
II, appellant now seeks to interject into the lawsuit a claim for attorney's 
fees and contract damages. Like the trial court, we reject the 
effort.

 [¶8.]     With this extended 
factual background, the issues stated by appellant are:

      1. Whether the trial 
court erred as a matter of law by denying Appellant's motion requesting a 
hearing to recover its reasonable attorney's fees as the prevailing party and 
denying Appellant its reasonable attorney's fees upon proper proof.

      2. Whether the trial 
court erred as a matter of law by denying Appellant's motion requesting a 
hearing to allow Appellant to offer proof of and recover lost profit damages 
suffered by Appellant as a result of Appellant's loss of use of the two (2) 
United States Forest Service ("USFS") special use permits and Appellant's right 
to setoff its damages and attorney's fees against the Appellee's payments held 
by Appellant.

 [¶9.]     The appellee 
differently asks:

      1. Did the trial court 
properly deny appellant attorney fees under the attorney's fees term of a 
contract which the Wyoming Supreme Court has previously determined was not 
effective?

      2. Did the trial court 
abuse its discretion in denying appellant's claim for attorney's 
fees?

      3. Did the trial court 
properly deny appellant's counter-claims for damages and attorney's fees where 
the appellant had not previously asserted such counter-claims?

 [¶10.]  We rephrase the appellate 
topics:

      1. What pleading is 
presented by a motion to dismiss to establish the issues providing a basis for 
award of damages and attorney's fees?

      2. Are attorney's 
fees, even though provided by the terms of the agreement, awardable upon an 
appeal granted rescission judgment rescinding the contract for failure of an 
external condition precedent?

      3. Even though the 
agreement at issue provides for attorney's fees, is the award to the successful 
Litigant under these circumstances discretionary with the trial 
court?

 [¶11.]  Although we find both the second and 
third issues to be challenging and perhaps broad, our decision ends with 
resolution of the first issue.

 [¶12.]  Without the extended scope of some 
pleading seeking damage and attorney's fees having been filed before the final 
decision now favored by appellate reversal, appellant is confined to what it 
demanded in its initial pleadings which was invalidation of the sales agreement 
and reversal of the buyer's damage award which we addressed in Mad River 
I.

 [¶13.]  From the time the complaint was initially 
filed to issuance of our appellate mandate, neither damages nor attorney's fees 
as a claim by appellant were pleaded, considered by the trial court, nor proven 
by any evidence. We find that those issues come too late for present resolution. 
Whether subject to another litigative gambit, these monetary claims are not 
available here and now to reduce the refund obligation required of appellant to 
realize the fruits of its appellate victory for effectuation of rescission. With 
first decision reversal, appellant is not entitled to change the scope of the 
litigation in further proceedings. Not only is it contrary to the policy of the 
Wyoming Supreme Court to decide appeals piecemeal, Kuehne v. Samedan Oil Corp., 
626 P.2d 1035 (Wyo. 1981), but issues not presented in the first trial cannot be 
saved for a second course of litigation, Snell v. Ruppert, 541 P.2d 1042 (Wyo. 
1975), overruled sub nom. on other grounds Ferguson Ranch, Inc. v. Murray, 811 P.2d 287 (Wyo. 1991).

 [¶14.]  Damages must be pleaded, White v. Fisher, 
689 P.2d 102 (Wyo. 1984); Hein v. Marcante, 57 
Wyo. 81, 113 P.2d 940 (1941), and proven, 
Western Nat. Bank of Lovell v. Moncur, 624 P.2d 765 (Wyo. 1981); Quinlan v. Jones, 27 Wyo. 410, 198 P. 352 
(1921). This court has taken a firm stand that attorney's fees must be requested 
and properly proved before appeal; otherwise, the right to recover will be 
foreclosed since a second chance is not to be provided upon reversal for 
reconsideration for failure of trial proof. UNC Teton Exploration Drilling, Inc. 
v. Peyton, 774 P.2d 584, 596 n. 8 (Wyo. 1989). See Stanbury v. Larsen, 803 P.2d 349 (Wyo. 
1990), where the attorney's fees were both demanded in pleading and proven by 
adequate evidence for consequent appeal affirmance. Furthermore, this is not a 
case where an amendment to conform to the evidence can be utilized to justify 
recovery since neither evidence was provided nor motion to amend made. Richardson v. Schaub, 796 P.2d 1304 (Wyo. 1990).

 [¶15.]  The law is consistent and well 
established that the right of setoff or a counterclaim is a required pleading. 
W.R.C.P. 13; United States v. 
Mitchell, 205 U.S. 161, 27 S. Ct. 463, 51 L. Ed. 752 
(1907). A statement of facts to warrant relief is required. Kearney Lake, Land 
& Reservoir Co. v. Lake DeSmet Reservoir Co., 475 P.2d 548 (Wyo. 1970). Furthermore, 
we have said that "[u]nder Rule 13, there is no general difference for purposes 
of pleading between setoff, recoupment, or independent claims in the sense that 
they all constitute counterclaims." Hawkeye-Sec. Ins. Co. v. Apodaca, 524 P.2d 874, 879 (Wyo. 
1974). See also Lane Co. v. Busch Development, Inc., 662 P.2d 419 (Wyo. 1983) in construing 
the mandatory character of the compulsory counterclaim requirement provided by 
W.R.C.P. 13(a).

 [¶16.]  In agreement with the trial court's 
decision which denied this claim by appellant for award of attorney's fees and 
damages, we affirm.

 FOOTNOTES

 1 Excluding legal 
analysis, the trial court order and decision related and provided:

       The saga of 
Jackson Hole Whitewater, Inc. versus Mad River Boat Trips, Inc. continues. The 
Defendant is attempting to write another chapter to this litigation.

      Be it remembered that 
this action was filed by the Plaintiff on June 22, 1989 seeking relief arising 
from the contract between the parties. A hearing on Plaintiff's request for a 
temporary restraining order was conducted on June 23, 1989, one day after this 
case was filed. The proceedings were continued. On June 30, 1989, the Court held 
a hearing with regard to Plaintiff's request for a preliminary injunction. The 
hearing lasted for several hours. The request was denied. The matter was set for 
trial on July 24, 1989. The parties thereafter decided to submit the matter to 
the Court based upon their briefs and memoranda.

      On July 24, 1989, the 
Court entered a judgment which construed the contract and determined that 
Defendant should be compelled to complete the purchase of the contract. The 
Court set a subsequent hearing on damages which was continued once at the 
request of the parties and which was finally held over two days on October 30 
and 31, 1989. During that hearing the Court heard extensive testimony and 
argument from counsel.

      The contract in this 
matter concerned the transfer of whitewater float special use trip permits for 
two boats in the Snake 
RiverCanyon. Because of the litigation in 1989, 
Plaintiff was deprived of the use of those two permits until very late in the 
floating season and Plaintiff had the use of the two permits during the 1990 
season. Defendant has had the use of $54,000.00 of Plaintiff's money during that 
period of time.

      The matter was 
appealed to the Wyoming Supreme Court and that Court reversed the final judgment 
of this Court. In its opinion the Wyoming Supreme Court ordered that the case 
was "reversed and remanded to the District Court with instructions to enter an 
Order directing Appellee (Jackson Hole Whitewater, Inc.) to take all actions 
necessary to have the rights to the special use permits transferred back to 
Appellant (Mad River Boat Trips, Inc.)."

      On January 28, 1991, 
Plaintiff filed a Motion to Enforce Compliance with Mandate in this 
matter.

      On January 29, 1991, 
in an effort to comply with the mandate of the Wyoming Supreme Court in this 
matter, this Court entered an Order requiring that the Plaintiff take all 
actions necessary to have the rights to the special use permits which are the 
subject matter of this action transferred back to the Defendant, upon the 
payment by the Defendant to Plaintiff of all sums paid by Plaintiff as 
consideration for the initial transfer of the two permits to 
Plaintiff.

      On February 6, 1991, 
the Defendant filed a Notice of Claim of Setoff and Motion to Set Hearing. 
Defendant wants the Court to require the return of the two special use permits 
to it and then the Defendant wants to further litigate this matter with regard 
to attorney's fees and other damages as a setoff against the $54,577.26 paid by 
Plaintiff to Defendant as consideration on the contract.

      This Court is less 
than enthusiastic for further litigation to occur in this matter. If Defendant 
felt it was entitled to a setoff in this matter as to any damages claimed to 
have been incurred by it, it should have filed notice of the setoff in its 
responsive pleadings and should have litigated the same during the damages phase 
of this litigation. Having failed to do so, it has waived any claim for 
additional damages.

      As to the matter of 
attorney's fees, the Court makes the following observations:

      Both parties incurred 
substantial attorney's fees in this matter. The Court awarded Plaintiff its 
attorney's fees in the final judgment. That judgment has been reversed. This 
litigation was very expensive to both sides.

      This Court is of the 
opinion that based on the totality of this litigation, the Defendant agreed to 
sell two special use permits to the Plaintiff and then got cold feet and wanted 
to back out and refused to make the transfer. This litigation ensued. The 
litigation was instituted by Plaintiff in good faith. Reasonable minds differ 
from time to time on matters of this nature. Even one member of the Wyoming 
Supreme Court felt that this Court was correct in the final judgment it 
issued.

 2 In technical context of 
the first proceeding, the initial decision construing the contract was at least 
generally determined based on sales agreement documents and pleadings and might 
be considered a partial summary judgment determining liability. The damage claim 
and resulting judgment in MadRiver I was the result of a later 
evidentiary hearing.