Case Title: Rivermeadows, Inc. v. Zwaanshoek Holding and Financiering, B.V.,

Citation: 

Docket Number: 86-278

State: wyoming

Court: Wyoming Supreme Court

Date: 1988-09-20T00:00:00Z

Document:
Rivermeadows, Inc. v. Zwaanshoek Holding and Financiering, B.V.,1988 WY 114761 P.2d 662Case Number: 86-278Decided: 09/20/1988Supreme Court of Wyoming
RIVERMEADOWS, INC., A 
CORPORATION, AND DONALD H. ALBRECHT, APPELLANTS (DEFENDANTS),

SECURITY PACIFIC NATIONAL 
BANK, A NATIONAL BANKING ASSOCIATION, (DEFENDANT),

v.

ZWAANSHOEK HOLDING AND 
FINANCIERING, B.V., A NETHERLANDS CORPORATION, APPELLEE 
(PLAINTIFF),

MEADOWRIVERS CORP., A 
WYOMING CORPORATION, APPELLEE (DEFENDANT).

Appeal from the District 
Court, TetonCounty, Robert B. Ranck, 
J.

Frank Hess of 
Dill & Hess, Jackson, and Richard H. Floum and Greg David Derin of Derin, 
Mason & Floum, Los 
Angeles, Cal., for appellants.

Charles G. 
Kepler of Simpson & Kepler, Cody, Leo P. Larkin, Jr. of Rogers & Wells, 
New York City, and John A. Karaczynski of Rogers & Wells, Los Angeles, Cal., 
for appellee Zwaanshoek Holding and 
Financiering, B.V.

Ross D. 
Copenhaver of Copenhaver, Copenhaver & Kath, Powell, for appellee Meadowrivers 
Corp.

Before THOMAS, CARDINE, URBIGKIT and MACY, JJ., 
and O'BRIEN, District Judge.

MACY, 
Justice.

[¶1.]     In this action, 
plaintiff-appellee Zwaanshoek Holding and Financiering, B.V. (Zwaanshoek) 
commenced a civil action against defendants-appellants Donald H. Albrecht 
(Albrecht) and Rivermeadows, Inc. (Rivermeadows), defendant-appellee 
Meadowrivers Corp. (Meadowrivers), and defendant Security Pacific National Bank 
(Bank) seeking judgment on a defaulted $1 million promissory note and 
foreclosure and sale of the property securing the payment of the promissory 
note. Albrecht and Rivermeadows answered the Zwaanshoek complaint, asserting 
numerous affirmative defenses and counterclaims as well as cross-claims against 
Meadowrivers. After the jury returned a special verdict, the court entered 
judgment in favor of Zwaanshoek and Meadowrivers.

[¶2.]     We 
affirm.

[¶3.]     Albrecht and 
Rivermeadows present the following issues on appeal:

A. Did the District Court 
commit reversible error in granting Zwaanshoek judgment notwithstanding the 
verdict (hereafter "nov"), vacating the special verdict (Issue No. 3) in which 
the jury found by a preponderance of the evidence that "there is such a unity of 
interest and ownership between defendant Meadowrivers Corp. and plaintiff 
Zwaanshoek that they should be treated as a single entity," on the presumed 
grounds that there purportedly was no substantial evidence in the trial record 
to support that special verdict?

B. Did the District Court 
abuse its discretion and commit reversible error in denying defendants' motion 
to stay this action in light of the pre-existing California action?

C. Did the District Court 
abuse its discretion and commit reversible error in denying defendants' motion 
to join MIG and MIG-U.S.A. as parties to this action?

D. Did the District Court 
commit prejudicial error in denying appellants' motion to realign parties so 
that they would have the same number of peremptory challenges as putative 
defendant Meadowrivers and plaintiff Zwaanshoek?

E. Did the District Court 
commit reversible error in failing to grant appellants' motion for judgment nov 
and for new trial based upon (1) the inconsistency of the jury's verdicts, (2) 
defendants' rights of offset (including utilization of accrued and payable 
interest and lot installment payments due to Albrecht under his $2.5 million 
promissory note, and reimbursement for expenses and compensation due 
Rivermeadows under the Development Agreement), and (3) prejudicial errors 
regarding jury instructions and various pre-trial rulings?

F. Did the District Court 
commit prejudicial error in refusing to give appellants' proposed jury 
Instructions Nos. 5A (dealing in part with their offset claims), 9A (dealing 
with Rivermeadows' claimed breach by Zwaanshoek of its loan agreement), and 22 
(dealing with Meadowrivers' obligations to pay development costs outside the 
Development Agreement)?

G. Did the District Court 
commit prejudicial error in refusing to admit Exhibits A-38 and A-93 proffered 
by defendants?

H. Did the District Court 
commit prejudicial error in refusing to allow defendants to conform their 
pleadings to the proof regarding their entitlement to compensation for 
development services, including repairs to the water system, on a quantum meruit 
theory?

(Footnotes and 
record references omitted.)

[¶4.]     Early in 1981, Albrecht 
sold unimproved real property to Meadowrivers, a Wyoming corporation, and Albrecht's Wyoming corporation, 
Rivermeadows, entered into an agreement with Meadowrivers to develop that 
property. On February 19, 1981, Rivermeadows borrowed approximately $828,000 
from Zwaanshoek in exchange for a $1 million promissory note and Meadowrivers' 
agreement to mortgage its unimproved property to secure the payment of the 
promissory note. Albrecht then unconditionally guaranteed the payment of 
Rivermeadows' $1 million promissory note to Zwaanshoek.

[¶5.]     Meadowrivers also 
executed and delivered to Albrecht a promissory note in the amount of $2.5 
million. To secure the promissory note, Meadowrivers mortgaged the same 
unimproved real property which was subject to the $1 million promissory note. In 
turn, Albrecht delivered a subordination agreement to Zwaanshoek, subordinating 
the $2.5 million promissory note and mortgage to the $1 million promissory note. 
Albrecht also sent a letter to Zwaanshoek stating that, in the event of default 
by Meadowrivers on its $2.5 million promissory note and mortgage, he would look 
solely to the mortgaged property and would not hold Meadowrivers liable. 
Albrecht then assigned the $2.5 million promissory note and mortgage to the Bank 
for security purposes.

[¶6.]     Both Rivermeadows and 
Albrecht defaulted on the $1 million promissory note with Zwaanshoek, and 
Zwaanshoek filed suit against them and Meadowrivers claiming breach of the 
promissory note and seeking to foreclose on the Meadowrivers' property used as 
collateral. In their answer, Albrecht and Rivermeadows asserted affirmative 
defenses and counterclaims against Zwaanshoek and cross-claims against 
Meadowrivers, contending fraudulent misrepresentation, breach of contract, 
quantum meruit, acceleration of promissory note, foreclosure of mortgage, 
maintenance of action without a certificate of authority, lack of accounting, 
merger of mortgage, failure of consideration, violation of the "Alien Land Act," 
and unenforceable guaranty and asserting that the damages resulting from their 
counterclaims should be offset against the damages found pursuant to the claims 
made by Zwaanshoek.

[¶7.]     On April 1, 1985, 
Albrecht and Rivermeadows filed a motion to stay the case until an earlier 
California action was concluded among Rivermeadows, Albrecht, Arab Investors 
Group, S.A. a.k.a. Mediterranee Investors Group, S.A. (AIG (MIG)), Mediterranee 
Investors Group-U.S.A., Inc. (MIG-U.S.A.), Zwaanshoek, Meadowrivers, and others 
alleging fraud, rescission, and breach of contract relating to a complex series 
of transactions among the parties, including the $1 million promissory note 
involved in this action. The motion was denied by the trial court in a summary 
order without a hearing or the filing of briefs in 
opposition.

[¶8.]     Albrecht and 
Rivermeadows also filed a motion with supporting brief to join AIG (MIG) and 
MIG-U.S.A., alleging that these entities along with Zwaanshoek and Meadowrivers 
were each the alter ego of the other and hence necessary parties in the action. 
Without holding a hearing but after allowing Zwaanshoek to file a brief in 
opposition, the trial court denied the motion. The trial court further denied 
Rivermeadows' and Albrecht's motion for reconsideration on the matter without a 
hearing.

[¶9.]     At a prehearing 
conference, the trial court assigned three peremptory challenges each to 
Zwaanshoek, Meadowrivers, and the Bank, and it assigned three peremptory 
challenges combined to Albrecht and Rivermeadows. In light of the trial court's 
actions, Albrecht and Rivermeadows filed a motion for realignment of peremptory 
challenges. After selection of the jury had been completed, the motion for 
realignment of peremptory challenges was denied. Additional argument ensued upon 
the matter, and the trial court reaffirmed its prior 
ruling.

[¶10.]  At the conclusion of the trial which 
began on July 7, 1986, the jury returned a special verdict. Albrecht and 
Rivermeadows brought a motion for a judgment notwithstanding the verdict and a 
new trial, and Zwaanshoek brought its own countermotion for a judgment 
notwithstanding the verdict. In response to these motions, the trial court 
entered a nunc pro tunc judgment in favor of Zwaanshoek and Meadowrivers. In 
that judgment the trial court ruled, contrary to the jury's finding of a unity 
of interest in ownership, that Zwaanshoek and Meadowrivers were to be treated as 
separate entities apart from one another for the purposes of the transaction 
which was the subject of the suit on the basis of the intent of the parties as 
clearly shown by the evidence. Albrecht and Rivermeadows noticed this 
appeal.

I

[¶11.]  In Albrecht's and Rivermeadows' first 
issue, they contend that the trial court improperly overruled the jury's special 
verdict which found that Zwaanshoek and Meadowrivers were one entity. They argue 
that the judgment rendered by the trial court through the jury's interpretation 
by special verdict is inconsistent with the evidence presented at trial showing 
that Zwaanshoek and Meadowrivers were involved in an alter ego relationship. 
They claim the trial court improperly placed itself in a role of trier-of-fact 
which was in excess of the trial court's jurisdiction.

The standards we employ 
when reviewing the sufficiency of evidence to support a jury verdict are well 
stated in Crown Cork & Seal Company, Inc. v. Admiral Beverage Corporation, 
Wyo., 638 P.2d 1272, 1274-1275 (1982):

"[W]e assume the evidence 
in favor of the successful party to be true, leaving out of consideration 
entirely the evidence in conflict, and assigning every favorable inference to 
the evidence of the successful party that can be reasonably and fairly drawn 
from it. In addition, when reviewing a jury verdict, we leave to the jury the 
duty of ascertaining the facts, reconciling conflicts therein and drawing its 
own inferences if more than one inference is permissible. Also, when the facts 
permit the drawing of more than one inference, then it is for the jury to choose 
which one will be utilized and, if supported by substantial evidence, the jury's 
choice will be held by us to be conclusive." (Citations 
omitted.)

Reese v. Dow 
Chemical Company, 728 P.2d 1118, 1120 (Wyo. 1986). Further, we 
note:

[¶12.]  The general rule regarding a court's role 
in evaluating the consistency of findings in special verdicts is stated in 
Wright & Miller, Federal Practice and Procedure: Civil § 2510, pp. 515-517 
(1971):

"It is the duty of the 
court to attempt to harmonize the answers, if it is possible under a fair 
reading of them. `Where there is a view of the case that makes the jury's 
answers to special interrogatories consistent, they must be resolved that way.' 
In determining whether there is inconsistency in the jury's findings, the 
findings are to be construed in the light of the surrounding circumstances and 
in connection with the pleadings, instructions, and issues submitted." 
(Footnotes omitted.) (Quoting Atlantic and Gulf Stevedores, Inc. v. Ellerman 
Lines, Ltd., 369 U.S. 355, 82 S. Ct. 780, 786, 7 L. Ed. 2d 798 
(1962)).

Id. at 1119-20. Applying 
these rules to the present case, we can reconcile the jury's findings and the 
trial court's judgment without difficulty.

[¶13.]  In its special verdict, the jury made the 
following applicable findings: 

ISSUE NO. 
1.

State the amount of 
principal and interest to which Plaintiff Zwaanshoek is entitled as a result of 
Defendant Rivermeadows' failure to pay the $1 million 
note.

$489,284.86

ISSUE NO. 
2.

Is Albrecht excused or 
otherwise relieved from performance of his guaranty agreement for the $1 million 
note?

Yes ____ No X 

ISSUE NO. 
3.

Do you find from a 
preponderance of the evidence that there is such a unity of interest and 
ownership between Defendant Meadowrivers Corp. and Plaintiff Zwaanshoek that 
they should be treated as a single entity?

Yes X No 
____

ISSUE NO. 
4.

Is the $2.5 million 
promissory note from Defendant Meadowrivers Corp. to Defendant Albrecht due and 
payable?

Yes ____ No X 

* * * * * 
*

ISSUE NO. 
6.

Is the non-recourse 
agreement in Exhibits 18 and 68 binding on Defendant 
Albrecht?

Yes X No 
____

ISSUE NO. 
7.

Is Defendant Rivermeadows 
entitled to recover from Meadowrivers for a breach by Meadowrivers of the 
Development Management Agreement?

Yes ____ No X 

* * * * * 
*

ISSUE NO. 
9.

Is Plaintiff Zwaanshoek's 
$1 million mortgage enforc[e]able?

Yes X No 
____

ISSUE NO. 
10.

Is the Subordination 
Agreement, Exhibit 11, binding?

Yes X No 
____

ISSUE NO. 
11.

Is Defendant Rivermeadows 
entitled to recover from Plaintiff Zwaanshoek for a breach by Plaintiff 
Zwaanshoek of the Loan Agreement?

Yes ____ No X 

* * * * * 
*

ISSUE NO. 
13.

Did Meadowrivers 
have a duty to develop, manage and market the property after December 31, 1982 
so as to pay off the obligations to Plaintiff Zwaanshoek and Defendant 
Albrecht?

Yes ____ No X 

[¶14.]  Although some of the evidence presented 
at trial showed that Zwaanshoek and Meadowrivers were involved in an alter ego 
relationship, the evidence also showed that Albrecht was a businessman, 
investor, and attorney who had been involved in real estate development projects 
for over twenty years and that he knew how to structure such transactions so as 
to obtain optimal financial leverage and favorable tax advantages. It is also 
apparent from the record that Albrecht guided his own corporation, Rivermeadows, 
with his expertise in the field with regard to its transactions with Zwaanshoek 
and Meadowrivers. Both Albrecht and Rivermeadows knew of the relationship 
between Zwaanshoek and Meadowrivers. They knowingly intended to and did treat 
Zwaanshoek and Meadowrivers as separate entities, contracting with each of them 
independently and giving them their own distinct rights, duties, and obligations 
under each of the contracts involved in the transactions in an attempt to 
further their own advantages. Also, in no way did Zwaanshoek or Meadowrivers 
ever defraud Albrecht or Rivermeadows with regard to their corporate 
makeup.

[¶15.]  As stated in Opal Mercantile v. Tamblyn, 
616 P.2d 776, 778 (Wyo. 1980):

Each case involving the 
disregard of the separate entity doctrine must be governed by the special facts 
of that case.

In cases such as 
this where the parties are aware of the corporate status and they knowingly 
enter into transactions with no fraud being evidenced, there is no rationale or 
policy which requires that the corporate entity be disregarded. Id.; Arnold v. Browne, 27 Cal. App. 3d 386, 103 Cal. Rptr. 775 (1972), overruled in part on other grounds by 
Reynolds Metals Company v. Alperson, 25 Cal. 3d 124, 158 Cal. Rptr. 1, 599 P.2d 83 
(1979). Courts have refused to pierce the corporate veil in cases where "the 
intent and consequences of [the relevant transactions] were known and understood 
by all of the parties, who were all represented by legal counsel." Arnold, 103 Cal. Rptr.  at 
782.

[¶16.]  We hold that, under the facts and 
circumstances of this case, the district court did not commit reversible error 
by vacating Special Verdict No. 3.

II

[¶17.]  In Albrecht's and Rivermeadows' second 
issue, they assert that the trial court abused its discretion and committed 
reversible error when it denied their motion to stay this action in light of a 
preexisting action filed in the state of California. Specifically, they contend that, 
because this case is such a small fragment of an unraveling series of 
transactions among the parties and the parent companies of Zwaanshoek and 
Meadowrivers involving all the complex disputes currently and comprehensively 
being litigated in California, the principles of comity and justice dictate that 
the case should have been stayed until the California case has been 
concluded.

[¶18.]  Albrecht and Rivermeadows direct this 
Court's attention to the cases of Dodge v. Superior Court in and for Los AngelesCounty, 139 Cal. App. 178, 33 P.2d 695 
(1934), and Simmons v. Superior Court in and for Los AngelesCounty, 96 Cal. App. 2d 119, 214 P.2d 844, 
19 A.L.R.2d 288 (1950), in support of the rule of law 
that:

Abuse of discretion will 
be found if the trial court denies the stay under circumstances in which an 
injustice would be perpetrated on the party seeking the stay, and no hardship, 
prejudice or inconvenience would result to the party against whom it is 
sought.

However, neither 
Albrecht nor Rivermeadows has shown this Court that it was prejudiced in any way 
by the trial court's decision to not stay this case. The trial court permitted 
the filing of amended pleadings allowing Albrecht and Rivermeadows to eliminate 
certain matters to be heard before the Wyoming 
court so as to preserve them for California determination. Albrecht and 
Rivermeadows were given a full and fair opportunity in Wyoming before a jury to try all their defenses, 
counterclaims, and cross-claims pertaining to the Wyoming 
transactions.

[¶19.]  The trial court did not abuse its 
discretion when it denied Albrecht's and Rivermeadows' motion for stay. As 
stated in Barringer v. Ray, 74 Wyo. 317, 287 P.2d 629, 634-35 
(1955):

So we said in In re 
Smith's Estate, 55 Wyo. 181, 200, 97 P.2d 677, 684: "Every state 
has plenary jurisdiction and control of the property, real and personal, within 
its borders." To the same effect is In re Holden's Estate, 110 Vt. 60, 1 A.2d 721, 119 
A.L.R. 487, 489, and cases cited. In 11 Am.Jur. § 30, pp. 328, 329, 330, it is 
stated:

"A principle of law which 
is acquiesced in by the jurists of all civilized nations and thus part of the 
jus gentium is that all real or immovable property is exclusively subject to the 
laws of the country within which it is situated, and no interference with it by 
any other sovereignty can be permitted. Therefore, all matters concerning the 
title and disposition of real property are determined by what is known as the 
lex loci rei sitae, which can alone prescribe the mode by which a title to it 
can pass from one person to another or an interest therein of any sort can be 
gained or lost. This general principle includes all rules which govern the 
descent, alienation, and transfer of such property and the validity, effect, and 
construction of wills and other conveyances."

* * * The cases on the 
subject are numerous and so nearly unanimous that it would be useless to attempt 
to discuss them all.

The reasoning 
used in the case of Beach v. Youngblood, 215 Iowa 979, 247 N.W. 545 (1933), is also 
persuasive. In that case, a note and mortgage had been executed in Iowa but the mortgaged property was located in Minnesota. Upon default 
in payment of the note, the holder thereof brought an action in Iowa, seeking to foreclose the mortgage upon the 
Minnesota 
land. The trial court entered judgment for the amount of the note, declared the 
mortgage a lien superior to the claims of all other parties, and directed the 
county sheriff in Iowa to advertise and sell 
the Minnesota property in the same manner as 
sales are made of Iowa property. On appeal it was argued that 
the Iowa court 
had no jurisdiction of the foreclosure phase of the action and that consequently 
the order of foreclosure was a nullity. After discussing the applicable 
principles at length and referring to numerous cases, all of which deny the 
power of the courts of one state to decree a foreclosure on property within 
another state, the court made the following statement:

It is a well and 
universally established principle that the disposition of real estate, either by 
deed, descent, or any other method, must be governed by the law of the state 
where the same is situated.

Id. 247 N.W.  at 549. The 
trial court did not abuse its discretion when it denied Albrecht's and 
Rivermeadows' motion to stay.

III

[¶20.]  In their third issue, Albrecht and 
Rivermeadows claim that the numerous transactions among Albrecht, Rivermeadows, 
Zwaanshoek, and Meadowrivers were all negotiated by Albrecht with the parent 
companies of Zwaanshoek and Meadowrivers; i.e., AIG (MIG) and MIG-U.S.A. They 
contend that the trial court abused its discretion and committed reversible 
error in denying their motion to join AIG (MIG) and MIG-U.S.A. as parties to the 
action pursuant to W.R.C.P. 13(h).

[¶21.]  W.R.C.P. 13(h) 
states:

Persons other than those 
made parties to the original action may be made parties to a counterclaim or 
cross-claim in accordance with the provisions of Rules 19 and 
20.

W.R.C.P. 19(a) 
provides:

A person who is subject 
to service of process shall be joined as a party in the action if (1) in his 
absence complete relief cannot be accorded among those already parties, or (2) 
he claims an interest relating to the subject of the action and is so situated 
that the disposition of the action in his absence may (i) as a practical matter 
impair or impede his ability to protect that interest or (ii) leave any of the 
persons already parties subject to a substantial risk of incurring double, 
multiple, or otherwise inconsistent obligations by reason of his claimed 
interest. If he has not been so joined, the court shall order that he be made a 
party. If he should join as a plaintiff but refuses to do so, he may be made a 
defendant. If the joined party objects to venue and his joinder would render the 
venue of the action improper, he shall be dismissed from the 
action.

This Court has 
long recognized the traditional definition of an indispensable party with regard 
to W.R.C.P. 19(a). In American Beryllium & Oil Corporation v. Chase, 425 P.2d 66, 68 (Wyo. 1967) (quoting from Amerada 
Petroleum Corporation v. Rio Oil Co., 225 F. Supp. 907, 910 (D.C. Wyo. 1964)), 
quoted in Reilly v. Reilly, 671 P.2d 330, 332 (Wyo. 1983), we stated:

"An indispensable party 
has been defined as one without whose presence before the court a final decree 
could not be made without either affecting his interest or leaving the 
controversy in such a condition that its final determination might be wholly 
inconsistent with equity and good conscience. Whether or not a person is an 
indispensable party cannot be determined by a prescribed formula because the 
facts peculiar to each case are determinative of that 
question."

(Citations 
omitted.) See also Johnson v. Aetna Casualty & Surety Co. of Hartford, 
Conn., 608 P.2d 1299 (Wyo. 
1980).

[¶22.]  After a careful review of the record, we 
determine that AIG (MIG) and MIG-U.S.A. are not indispensable parties to this 
action. Their participation is not required to resolve the claims and defenses 
alleged in this case. Zwaanshoek's claims are solely on the bases of 
Rivermeadows' $1 million promissory note, Albrecht's personal guaranty, and the 
mortgage given to Zwaanshoek by Meadowrivers. Likewise, the parties to the 
agreements underlying Albrecht's and Rivermeadows' counterclaims and 
cross-claims are named parties in this action. The Bank, which has an interest 
in the subject property, is also a named party. Neither AIG (MIG) nor AIG-U.S.A. 
needs to be joined in this action for its proper litigation, and they are not 
indispensable parties.

[¶23.]  W.R.C.P. 20 provides in 
part:

(a) Permissive joinder. - * * * All 
persons may be joined in one (1) action as defendants if there is asserted 
against them jointly, severally, or in the alternative, any right to relief in 
respect of or arising out of the same transaction, occurrence, or series of 
transactions or occurrences and if any question of law or fact common to all 
defendants will arise in the action. * * *

(b) Separate trials. - The court may make 
such orders as will prevent a party from being embarrassed, delayed, or put to 
expense by the inclusion of a party against whom he asserts no claim and who 
asserts no claim against him, and may order separate trials or make other orders 
to prevent delay or prejudice.

In the case of 
England v. Simmons, 728 P.2d 1137 (Wyo. 
1986), we extensively discussed the provisions of W.R.C.P. 20 and its 
application. Therein, we stated:

Rule 20, Federal Rules of 
Civil Procedure, which is identical to Wyoming's rule, is explained in 7 Wright, 
Miller & Kane, Federal Practice and Procedure: Civil 2d §§ 1653 and 1660. It 
is stated at § 1653, p. 382:

"Instead of developing 
one generalized test for ascertaining whether or not a particular factual 
situation constitutes a single transaction or occurrence for purposes of Rule 
20, the courts seem to have adopted a case by case approach. As stated by one 
district court judge:

`there can be no hard and 
fast rule, and that the approach must be a general one of whether there are 
enough ultimate factual concurrences that it would be fair to the parties to 
require them to defend jointly [the several claims] against them * * 
*.'"

And at § 1660, 
pp. 436-438:

"The general philosophy 
of the joinder provisions of the federal rules is to allow virtually unlimited 
joinder at the pleading stage but to give the district court discretion to shape 
the trial to the necessities of the particular case. * * 
*"

* * * * * 
*

[¶24.]  This court has defined abuse of 
discretion numerous times. Recently, we said:

"`A court does not abuse 
its discretion unless it acts in a manner which exceeds the bounds of reason 
under the circumstances. In determining whether there has been an abuse of 
discretion, the ultimate issue is whether or not the court could reasonably 
conclude as it did. * * *' Martinez v. State, 
Wyo., 611 P.2d 831, 838 (1980).

* * * * * 
*

"Judicial discretion is a 
composite of many things, among which are conclusions drawn from objective 
criteria; it means a sound judgment exercised with regard to what is right under 
the circumstances and without doing so arbitrarily or capriciously. Byerly v. 
Madsen, 41 Wn. App. 495, 704 P.2d 1236 (1985).

* * * * * 
*

"* * * Each case 
must be determined on its peculiar facts. * * *" Martin v. State, Wyo., 720 P.2d 894, 
896-897 (1986).

England, 728 P.2d  at 
1139-40.

[¶25.]  In this case, the order denying joinder 
states no rationale as the basis for denial. Conjecture by this Court as to the 
specific ground for denial is not required.

"Our consideration is 
limited to a determination of whether the trial court was clearly wrong in 
denying this motion."

Id. at 1140 (quoting from 
Martellaro v. Sailors, 515 P.2d 974, 976 (Wyo. 1973)). W.R.C.P. 20 is entitled 
"Permissive joinder of parties." (Emphasis added.)

Under our statutes 
relating to joinder, the trial court is entitled to exercise considerable 
discretion in determining who should be joined or 
retained.

England, 728 P.2d  at 1140. 
Applying the current definition of abuse of discretion and its standard of 
review, we must give due deference to the trial court and its denial of joinder 
of the parties. Any one of the reasons given under W.R.C.P. 20 may have been 
plausible reason for denial of joinder. We fail to see how or why Albrecht and 
Rivermeadows were prejudiced by the trial court's actions with regard to their 
motion for joinder.

IV

[¶26.]  The trial court treated Zwaanshoek, 
Meadowrivers, and the Bank as separate sides, granting them each three 
peremptory challenges, while it treated Albrecht and Rivermeadows as one side, 
giving them collectively three peremptory challenges. As a result, Albrecht and 
Rivermeadows claim that the trial court committed prejudicial error and deprived 
them of their constitutional right to a fair and impartial jury when the court 
denied their motion to realign the parties so that they would receive the same 
number of peremptory challenges as Meadowrivers, Zwaanshoek, and the Bank 
received.

[¶27.]  W.S. 1-11-202 
provides:

In the trial of civil 
cases in the district courts of this state, each side is allowed three (3) 
peremptory challenges.

In the case of 
Distad v. Cubin, 633 P.2d 167 (Wyo. 1981), we held that, in determining whether 
multiple defendants constitute one side, consideration must be given to the 
nature of the claim against them and to whether the defendants' interests are or 
may be antagonistic. Applying the holding of Distad with regard to peremptory 
challenges, we conclude that the trial court did not err in its assignment of 
peremptory challenges in this case. Zwaanshoek sued Albrecht, Rivermeadows, and 
Meadowrivers, alleging breach and default on a $1 million promissory note and 
seeking foreclosure on the property used as collateral. The Bank entered the 
suit claiming an interest in the property adverse to Zwaanshoek. It follows that 
Zwaanshoek became the adversary of each of the parties - Albrecht, Rivermeadows, 
Meadowrivers, and the Bank. Albrecht and Rivermeadows counterclaimed against 
Zwaanshoek, cross-claimed against Meadowrivers, and asserted numerous 
affirmative defenses with a favorable outcome of each of those being 
advantageous to both of them. Not only did an adversarial relationship exist 
between Zwaanshoek and Albrecht/Rivermeadows, but an additional antagonistic 
relationship arose between Albrecht/Rivermeadows and Meadowrivers collectively. 
No adversarial relationship ever developed between Albrecht and Rivermeadows. 
They chose to assert defenses in tandem. The record clearly evidences that the 
relationship between Albrecht and Rivermeadows was not antagonistic but rather 
"allied," or that of one side.

V

[¶28.]  Albrecht and Rivermeadows also assert 
that the trial court committed reversible error when it ruled against them on 
their motion for a judgment notwithstanding the verdict or a new trial and 
several pretrial matters; when the trial court refused to give some of 
Albrecht's and Rivermeadows' proposed jury instructions dealing with their right 
to offset on various contentions; and when the trial court refused to admit 
certain exhibits offered by Albrecht and Rivermeadows. We do not further address 
the trial court's action with regard to Albrecht's and Rivermeadows' motion for 
a judgment notwithstanding the verdict or a new trial or to the trial court's 
pretrial rulings since we have already dealt sufficiently with those issues. We 
choose to collectively dispose of the remaining issues asserted by Albrecht and 
Rivermeadows because of the similarity in their nature and 
argument.

[¶29.]  Turning first to the issue of jury 
instructions, we recognize that:

Our rule is that a party 
is entitled to have a jury instruction upon its theory of the case but only if 
such theory is supported by competent evidence and a proper request for the 
instruction is made.

Short v. Spring 
Creek Ranch, Inc., 731 P.2d 1195, 1199 (Wyo. 1987). See also Condict v. Whitehead, 
Zunker, Gage, Davidson & Shotwell, P.C., 743 P.2d 880 (Wyo. 
1987).

[¶30.]  We have also stated 
that:

[¶31.]  There is no error when the matter 
complained of is covered in another instruction or by taking the instruction as 
a whole.

Id. at 
883.

[¶32.]  In some instances the evidence presented 
by Albrecht and Rivermeadows was not sufficient to require the giving of some of 
the proposed instructions. Taking the instructions in totality, we hold that the 
jury was adequately instructed as to Albrecht's and Rivermeadows' alleged right 
to offset. Albrecht and Rivermeadows were not prejudiced in any way with respect 
to their claims of offset by the instructions given to the 
jury.

The trial court's ruling 
on an instruction will not constitute reversible error absent a showing of 
prejudice, and prejudice will not be said to result unless it is demonstrated 
that the instruction confused or misled the jury with respect to the proper 
principles of law.

DeJulio v. 
Foster, 715 P.2d 182, 186 (Wyo. 1986).

[¶33.]  Finally, Albrecht and Rivermeadows 
contend that the trial court committed prejudicial error in refusing to admit 
exhibits A-38 and A-93 offered by them. As stated in McCarthy v. Whitlock 
Construction and Supply, 715 P.2d 218, 220-21 (Wyo. 1986):

Our standards of 
appellate review require reversal only where an asserted error is prejudicial to 
a substantial right of a party affected. Our rules of appellate procedure phrase 
the concept as follows:

"Any error, defect, 
irregularity or variance which does not affect substantial rights shall be 
disregarded." Rule 7.04, W.R.A.P. Accord Rule 103(a), W.R.E.[1] * * *.

[¶34.]  It is the burden of the appellant to 
establish an error as prejudicial. We have held that

"`for an error to be 
harmful, there must be a reasonable possibility that in the absence of error the 
verdict might have been more favorable [to the losing party].'" Herman v. Speed 
King Manufacturing Company, [Wyo.,] 675 P.2d 
[1271,] 1278 [(1984)], quoting ABC Builders, Inc. v. Phillips, Wyo., 632 P.2d 925, 935 
(1981).

Evidentiary rulings are 
largely within the discretion of the trial court. In order to determine the 
harmful effect of such rulings, we have examined them in the context of all the 
evidence at trial. In the present case, our review does not support appellant's 
claim of prejudice.

(Citations 
omitted.) Albrecht and Rivermeadows failed to demonstrate how they were 
prejudiced by the trial court's rulings regarding the admission of their 
exhibits A-38 and A-93. Albrecht and Rivermeadows were allowed a full and fair 
opportunity before a jury to present and try all their defenses, counterclaims, 
and cross-claims in this case. The trial court did not abuse its discretion or 
commit error when it refused to admit Albrecht's and Rivermeadows' exhibits A-38 
and A-93.

[¶35.]  AFFIRMED.

FOOTNOTES

1 W.R.E. 103(a) provides 
in applicable part:

Error may not be 
predicated upon a ruling which admits or excludes evidence unless a substantial 
right of the party is affected * * *.

URBIGKIT, Justice, 
dissenting.*

* Dissent circulated 
December 22, 1987.

[¶36.]  I would not concur with the majority's 
conclusion to approve the decision of the trial court in setting aside what was 
probably the most significant and factually justified finding in the special 
verdict, nor with the action of this court in approving a clearly discriminatory 
application of peremptory challenges. Consequently, I 
dissent.

[¶37.]  Implicit in the trial jury's findings as 
then reversed by the trial court, issue number three demonstrates the 
pre-existing error in allocation of peremptory challenges. 

ISSUE NO. 3. Do you find 
from a preponderance of the evidence that there is such a unity of interest and 
ownership between Defendant Meadowrivers Corp. and Plaintiff Zwaanshoek that 
they should be treated as a single entity?

Yes X No ____1

[¶38.]  This finding is persuasive, if not 
mandatorily dictated, by the evidence provided by the trial record. However, 
this unity, to be considered as a single entity under the evidence adduced (in 
Jackson, Wyoming as considering the general community 
acquaintanceship with the project, persons and participating lawyers) received 
six peremptory challenges. 
Conversely, defendants, with two more clearly defined separate entities, 
received only three. I would find in this result a clear trial error in denial 
to appellants of equal protection and due process as constitutionally required, 
as well as a clear violation of W.S. 1-11-202.

[¶39.]  By the action taken, the trial court and 
this court, by approval, rejects the validity of the jury verdict. Cf. Clarke v. 
Vandermeer, 740 P.2d 921 (Wyo. 1987); Jones v. 
Sheridan County School Dist. No. 2, 731 P.2d 29 
(Wyo. 1987); DeJulio v. Foster, 715 P.2d 182 
(Wyo. 
1986).

[¶40.]  In a finding, which is sustained by the 
clear substance of trial evidence, it is those trial facts, and not Distad v. 
Cubin, 633 P.2d 167 (Wyo. 1981), from which our conclusions should 
be made as contrary to what is decided in majority 
decision.

[¶41.]  In Distad, 633 P.2d  at 171, this court 
determined:

We hold that in 
determining whether multiple defendants constitute one side, consideration must 
be given the nature of the claim against them and whether the defendants' 
interests are or may be antagonistic.

* * * * * 
*

Our use of the term 
"antagonistic" does not mean that parties must express as between them dislike, 
hatred, unfriendliness, ill-will, or spite; it should be read in accord with our 
adversary system.

Since a parent 
corporation with ownership of what was essentially a minimal asset affiliate is 
involved, unpersuasive justification for the doubled assignment of peremptory 
challenges is presented.

[¶42.]  The fallacy of trial court action in 
setting aside a factual, well justified finding to support an earlier decision 
of denied peremptory challenges, is equally objectionable in evaluation of the 
complete jury verdict. Meadowrivers, as buyer, was newly created for the 
transaction without meaningful capital. It was only a conduit for the real party 
in interest, Zwaanshoek, and associated companies of many diverse names and 
character, to be generally called the Arab Group, as controlling functionary. In 
result, the majority, by reversal of the jury finding, exonerates acquisition of 
the lands by the Arab Group without purchase price payment by charging the 
seller for improvement costs on land which they did not own and for which they 
will not be paid. It is doubly unfortunate that the erroneous decision in 
allocation of peremptory challenges was then followed by setting aside a portion 
of the jury verdict in order to justify the error earlier made and thus 
eliminating the invalidating relationship between correlative trial 
issues.

[¶43.]  Negotiative gamesmanship and consequent 
judicial approval has its condonation limitations which were here crossed by 
this affirmed judgment. The fairness normally sought in judicial inquest should 
at least require equality in utilization of the specific factual findings in the 
jury verdict as well as approval of unequal allocation of preemptory 
challenges.

[¶44.]  Consequently, I respectfully 
dissent.

FOOTNOTES

1 In a detailed analysis 
of the entire transcript and litigative record, I would conclude that if a 
portion of the verdict was to be set aside and a portion retained, I would have 
retained issue number three and perhaps set aside most of the remaining 
findings.