Case Title: Bummer v. Collier

Citation: 

Docket Number: 93-41

State: wyoming

Court: Wyoming Supreme Court

Date: 1993-12-02T00:00:00Z

Document:
Bummer v. Collier1993 WY 150864 P.2d 453Case Number: 93-41Decided: 12/02/1993Supreme Court of Wyoming
Bruce 
L. BUMMER and Kathleen A. Bummer, husband and wife, 

Appellants 
(Defendants),

v.

Suzanne 
Desiree COLLIER, 

Appellee 
(Plaintiff).

Appeal 
from The District Court, Natrona County, Dan Spangler, 
J.

Marvin 
L. Bishop, III, Casper, for appellants.

Keith 
P. Tyler, Casper, for appellee.

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

GOLDEN, 
Justice.

[¶1]      Appellants, Bruce 
and Kathleen Bummer, appeal the district court's entry of summary judgment 
declaring appellee's lien valid against their property and awarding appellee 
$25,000 plus prejudgment interest and costs.

[¶2]      We 
affirm.

ISSUES

[¶3]      Appellants 
present the following issues for our review:

A. 
Whether the district court erred by holding a lien defectively recorded against 
property other than appellants was sufficient to constitute notice so as to 
impose a lien on appellants' property.

B. 
Whether the district court erred by holding the Comprehensive Curative Act of 
Wyoming, W.S. 1977, § 34-8-103 cured the defective recording of a lien after 
such lien had been of record in excess of ten years.

C. 
Whether the district court erred by holding that a defective lien with pages 
recorded out of sequence was sufficient to give notice to appellants that the 
lien on its face was erroneous and appellants had duty to inquire whether the 
property they were purchasing was subject to the lien.

D. 
Whether the district court erred in holding as a matter of law that an 
unrecorded decree of divorce which granted appellee a lien on her former 
husband's partnership interest in real property located in Paradise Valley, 
Natrona County, Wyoming is sufficient under W.S. 1977, § 17-13-505, to impose a 
charge on appellants' real property which is not located in Paradise 
Valley.

E. 
Whether the district court erred in holding as a matter of law that William K. 
Collier, as a partner in Brown & Collier partnership, could give appellee an 
assignment and lien on such partnership real property to satisfy a personal 
obligation.

F. 
Whether the district court erred in disregarding the undisputed fact that the 
divorce decree granting appellee a lien, and the lien itself, would not appear 
in the chain of title to the real property purchased by 
appellants.

G. 
Whether the district court erred in denying appellants' motion for summary 
judgment because the undisputed facts prove the lien, as recorded, included 
6.727 acres of land and specifically excluded appellants' real 
property.

H. 
Whether the district court erred in denying appellants' motion for summary 
judgment because the undisputed facts prove appellee's lien described in a 
divorce decree was on real property located in Paradise Valley and not on real 
property acquired by appellants not located in Paradise 
Valley.

I. 
Whether the district court erred in not granting appellants' motion for summary 
judgment when the undisputed facts prove appellants were bona fide purchaser[s] 
of real property without notice of appellee's lien.

J. 
Whether the district court erred by not finding as a matter of law that 
appellee's lien was barred by the statute of limitations and the Collier decree 
of divorce was a dormant judgment.

K. 
Whether the district court erred in awarding to appellee all court costs and 
interest from the date appellants acquired their real 
property.

[¶4]      Appellee 
rephrases the issues as follows:

A. 
Whether a lien with an attached legal description which is obviously recorded in 
the incorrect order constitutes notice so as to impose a lien on appellants' 
property.

B. 
Whether the defect in recording is cured by the Comprehensive Curative Act of 
Wyoming, W.S. § 34-8-103.

C. 
Whether the assignment and lien granted to wife pursuant to the divorce decree 
constitutes a valid and enforceable assignment of partial interest and lien 
against husband's partnership property for $25,000.00.

D. 
Whether the reference to "Paradise Valley" in the decree creates sufficient 
confusion to avoid notice of the Collier lien.

E. 
Whether appellee's lien is barred by the statute of 
limitations.

F. 
Whether the Collier lien appears in the chain of title.

G. 
Whether appellee is entitled to interest on her claim of $25,000.00 from the 
date of closing of the Collier/Bummer transaction.

FACTS

[¶5]      In 1978, the 
partnership of Brown & Collier (William Brown and William Collier) acquired 
title to certain property in Natrona County, a portion of which now belongs to 
appellants. In 1979, William Collier and Suzanne Collier (appellee) were 
divorced. Pursuant to their divorce agreement, as ordered by the presiding 
judge, Mr. Collier assigned to appellee a lien of $25,000 against an 
eighteen-acre parcel of the partnership property (the parcel now owned by 
appellants). The Assignment and Lien provided that upon sale of the property 
appellee was to receive $25,000.

[¶6]      In 1987, title to 
the eighteen acres in dispute was conveyed from Brown & Collier to Mr. 
Collier. Mr. Collier did not record this transfer of title until 1991. In 1991, 
Mr. Collier sold the property to appellants for approximately 
$52,000.

[¶7]      Before purchasing 
the property from Mr. Collier, appellants required him to furnish a title policy 
ensuring the property was free and clear of any encumbrances. Mr. Collier 
retained Rocky Mountain Title Company to conduct a title search and issue a 
title policy. In performing its title search, the title company failed to 
discover the $25,000 lien recorded against the property. The legal description 
of the land to which the lien attached was recorded on three pages. When the 
lien was filed with the clerk, or when the clerk filed the lien, these three 
pages ended up out of order. The title company did not realize the pages were 
out of order and, as a result, misunderstood which property carried the 
lien.

[¶8]      When appellee 
learned Mr. Collier had sold the land, she filed a complaint against appellants 
seeking to foreclose on the lien. Both parties moved for summary judgment 
contending no genuine questions of fact existed, and each was entitled to 
judgment as a matter of law. The district court granted appellee's motion after 
it determined the lien was valid when created, and appellants had inquiry notice 
of the lien and thus were not bona fide purchasers.

STANDARD 
OF REVIEW

[¶9]      Summary judgment 
is proper when no genuine issues of material fact exist, and the prevailing 
party is entitled to judgment as a matter of law. Lynch v. Norton Construction, 
Inc., 861 P.2d 1095, 1095 (Wyo. 1993); Brown v. Avery, 850 P.2d 612, 614-15 
(Wyo. 1993). When reviewing the propriety of a grant of summary judgment, we 
review the record in the light most favorable to the party opposing the motion, 
giving that party all favorable inferences that can be drawn from the facts. 
Lynch, 861 P.2d  at 1095. However, in this case, the parties agree that no 
genuine issue of material fact exists, thus our review is limited to whether 
appellee was entitled to judgment as a matter of law.

DISCUSSION

[¶10]   We believe the primary issues as 
outlined by the parties can be pared down to two questions: whether the lien was 
valid when created, and if so, whether appellants were bona fide 
purchasers.

1. 
Validity of the Lien When Created

[¶11]   Appellants contend the lien against 
their property was void when created because Mr. Collier lacked authority to 
assign a lien against partnership property for personal debts. We agree with 
appellants' premise that a partner may not use partnership property to satisfy 
personal obligations. However, we do not agree that the lien attached to 
partnership property; therefore, we conclude the lien was valid when 
created.

[¶12]   The divorce decree which originally 
created appellee's interest in the eighteen acres of land outlined her interest 
as follows:

     Of a remaining 
approximate 18 acres of land in Paradise Valley, Natrona County, Wyoming, being 
also owned by the defendant and William Brown (Brown and Collier, a 
partnership), the defendant shall retain his interest in said 
land, subject to the further provisions of this decree relating to 
assignment of a $25,000.00 interest in said 18 acres, to the 
plaintiff.

* 
* * * * *

     Upon the sale of all 
or a part of the remaining approximately 18 acres 
owned jointly by the defendant and Mr. William Brown in Paradise Valley, Natrona 
County, Wyoming, and as partial settlement of the claims of the plaintiff to the 
marital property of the parties, the defendant shall pay to the plaintiff 
the sum of $25,000.00 * * *. The defendant shall execute to the favor of 
the plaintiff an assignment and lien in the amount of $25,000.00 on said 
property and said instrument may be recorded by the 
plaintiff.

(Emphasis 
added).

[¶13]   WYO. STAT. § 17-13-503 (1989) 
defines a partner's interest in the partnership as "his share of the profits and 
surplus, and [that interest] is personal property." "Surplus" refers to the 
excess of assets over liabilities. CLAIRE MOORE DICKERSON, PARTNERSHIP LAW 
ADVISER at 174 (1991). Section 17-13-505 authorizes a court to charge the 
interest of a debtor partner with payment of an unsatisfied judgment debt 
against that partner.

[¶14]   The language used in the divorce 
decree indicates that upon sale of the property, it was Mr. Collier's interest 
in the property which was subject to the lien. The divorce decree extended the 
lien only to Mr. Collier's interest in the partnership property, which would 
include the surplus remaining after sale of the land in question. Thus, as 
permitted by § 17-13-505, the court which entered the divorce decree charged Mr. 
Collier's interest in the partnership with payment of the $25,000 judgment. We 
therefore conclude the lien was valid when created.

[¶15]   Before proceeding to the question 
whether appellants were bona fide purchasers, we believe it will be helpful to 
explain how the lien against Mr. Collier's interest in the partnership, which is 
personal property, became a lien against the real property. We would 
hypothesize, for example, that if the partnership had conveyed the property to 
the Bummers, they might well have taken free of any lien.

[¶16]   We have precedent in Wyoming that 
justifies the result reached in this case. In Coad v. Cowhick, 9 Wyo. 316, 63 P. 584 (1901) and Muir v. Bosey, 23 Wyo. 46, 146 P. 595 (1915), this court held 
that the lien of a judgment attaches to the after-acquired lands of the debtor. 
The Wyoming statute upon which these decisions were premised has been rewritten 
since the decisions, but not in a way that would inhibit the application of this 
rule. See WYO. STAT. § 1-17-301 (1988).

[¶17]   In this case, it is clear that the 
district court intended to impose a charge upon the real property in question at 
the time it entered the divorce decree, and an assignment and lien in the amount 
of $25,000 was made in favor of appellee by Mr. Collier in accordance with the 
decree. At the time Mr. Collier executed the assignment and lien, the lien was 
at best an inchoate lien, at least as it related to the real property. An 
inchoate lien is one that "may become certain as to amount, identity of the 
lienor, or the property subject thereto only at some time subsequent to [the 
date of the lien's creation.]" United States v. New Britain, 347 U.S. 81, 86, 74 S. Ct. 367, 370-71, 98 L. Ed. 520, 526 (1954). See also Danbury Sav. & Loan 
Ass'n v. Delaney, 207 Conn. 743, 542 A.2d 1153, 1156 (1988), cert. denied, 488 U.S. 1004, 109 S. Ct. 783, 102 L. Ed. 2d 775. In our case, the real property 
subject to the lien could not be identified until the partnership had conveyed 
title to the real property to Mr. Collier.

[¶18]   The property subject to the lien 
became certain, however, when the partnership conveyed the property to Mr. 
Collier. Upon that transfer, the lien attached to the real property as 
after-acquired property. This occurred before the conveyance to appellants, and 
the lien may therefore be enforced against appellants if they were not bona fide 
purchasers of the property.

2. 
Whether Appellants Were Bona Fide Purchasers

[¶19]   We agree initially with appellants 
that the defect at issue, recording the pages of the property's legal 
description out of order, is not the type of error cured by Wyoming's 
Comprehensive Curative Act. WYO. STAT. §§ 34-8-101 through 34-8-105 (1990). The 
act provides that certain recording defects will be corrected by operation of 
law after the instrument has been recorded for a period of ten years. WYO. STAT. 
§ 34-8-103. The defects cured by the act include defects and irregularities in 
the formalities of execution, recording, attestation and acknowledgment of 
instruments affecting title to property. WYO. STAT. § 
34-8-104.

[¶20]   A proper legal description of the 
property affected by the recorded instrument does not constitute a formality, 
and thus the act will not cure an error in that description. To hold otherwise 
would, upon the passage of ten years, render unreliable the legal descriptions 
of property provided in recording instruments.

[¶21]   Although we do not find the 
recording defect in this instance to have been corrected by the curative act, we 
nonetheless conclude appellants were not bona fide purchasers. This court has 
held that to achieve bona fide purchaser status, the purchaser must prove that 
he is

(1) 
a purchaser in good faith, (2) for a valuable consideration, not by gift, (3) 
with no actual, constructive, or inquiry notice of any alleged or real 
infirmities in the title, (4) who would be prejudiced by cancellation or 
reformation of the instrument.

First 
Interstate Bank v. First Wyo. Bank, 762 P.2d 379, 382 (Wyo. 1988) (citing 
Crompton v. Bruce, 669 P.2d 930, 935 (Wyo. 1983)).

[¶22]   Appellants did not have actual or 
constructive notice of the lien. However, we find that the error in recording 
out of order the pages of the legal description was obvious and put the 
purchasers on inquiry notice. Inquiry notice consists of "knowledge of facts so 
informing that a reasonably cautious person would be prompted to inquire further 
* * *." Miller v. Alexander, 13 Kan. App. 2d 543, 775 P.2d 198, 204 (1989). A 
reasonably cautious person would have been prompted to inquire further upon 
noticing the pages were not in their numbered order, and the legal description 
made no sense as recorded.

[¶23]   Reasonable investigation of the 
divorce decree, the lien and the legal description of the land to which the lien 
attached would have revealed the lien actually attached to appellants' land. See 
Doenz v. Garber, 665 P.2d 932, 936 (Wyo. 1983). Since reasonable investigation 
would have revealed the existence of the lien, appellants were not bona fide 
purchasers.

[¶24]   Having concluded the lien against 
appellants' property was valid when created, and appellants were not bona fide 
purchasers, we consider appellants' remaining contentions. They contend 
appellee's action was barred by the statute of limitations, and that her divorce 
decree is dormant precluding enforcement of the lien. They further assert that 
even if the district court properly entered judgment in appellee's favor, it 
should not have awarded her prejudgment interest.

3. 
Statute of Limitations and Dormant Divorce Decree

[¶25]   The applicable statute of 
limitations requires that a cause of action be brought within ten years of the 
date the action accrues. WYO. STAT. § 1-3-103 (1988). By the terms of the 
divorce decree and the assignment and lien, appellee was not entitled to enforce 
her lien against the property until the property had been sold. This means her 
cause of action did not accrue until the property had been sold, which at the 
earliest would have been 1987, when the partnership transferred title to the 
property to Mr. Collier. Appellee's 1992 complaint was clearly filed within the 
time allowed by the statute of limitations.

[¶26]   Appellants provide no cogent 
argument supporting their contention that the dormant divorce decree precludes 
enforcement of the lien. We therefore will not consider this contention. See 
Burg v. Ruby Drilling Co., 783 P.2d 144 (Wyo. 1989).

4. 
Award of Prejudgment Interest

[¶27]   Appellants contend the district 
court's assessment of prejudgment interest against them was improper since it 
was Mr. Collier who owed appellee money. Prejudgment interest is recoverable on 
liquidated claims but not unliquidated claims; a liquidated claim is one readily 
computable by simple mathematical computation. Belle Fourche Pipeline Co. v. 
Elmore Livestock Co., 669 P.2d 505, 515 n. 8 (Wyo. 1983). Under the terms of the 
assignment and lien, appellee had a liquidated claim of $25,000 against 
appellants' property from the time of its sale.

[¶28]   Appellants have presented no 
authority or cogent argument supporting their contention the district court 
should have deviated from this rule. As noted above, we will not address claims 
unsupported by cogent argument or authority.

CONCLUSION

[¶29]   We conclude appellee's lien against 
appellants' property was valid when created, and appellants were not bona fide 
purchasers. The decision of the district court is affirmed.