Case Title: Hayes v. Production Credit Ass'n of the Midlands

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1991-06-27T00:00:00Z

Document:
Hayes v. Production Credit Ass'n of the Midlands1991 WY 94813 P.2d 1302Case Number: 90-211Decided: 06/27/1991Supreme Court of Wyoming
NORMAN J. HAYES, 
APPELLANT (DEFENDANT),

v.

PRODUCTION CREDIT 
ASSOCIATION OF THE MIDLANDS, APPELLEE (PLAINTIFF).

Appeal from the 
DistrictCourtofParkCounty, C. Stuart Brown, 
J.

B.J. Baker of Brown & 
Drew, Casper, 
for appellant.

Jerry A. Yaap of Bishop, 
Bishop & Yaap, Casper, for 
appellee.

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

URBIGKIT, Chief 
Justice.

[¶1.]     In this case, we decide 
whether a writ of ejectment was merged into and superseded by the subsequent 
lease/purchase agreement that appellant, Norman J. Hayes (Hayes), entered into 
with appellee, Production Credit Association of the Midlands 
(PCA).

[¶2.]     Hayes contends that the 
writ of ejectment was fully executed and satisfied when he acquiesced in the 
writ and entered into a lease/purchase agreement with PCA which permitted him to 
retain possession of the property. He also contends that the district court 
wrongfully enforced the prior writ of ejectment as a reused device to once again 
evict him from that property when he defaulted on the lease/purchase agreement. 
Finally, he contends the district court could not hold him in contempt for 
failure to abide by the reused writ of ejectment, after the writ had been fully 
satisfied by the agreement which he and PCA made for him to retain possession 
under a written lease/purchase agreement following the earlier mortgage 
foreclosure and his loss of title.

[¶3.]     We reverse and 
remand.

[¶4.]     The facts of this case 
are not complicated but, in order to address the issues in a context that 
promotes understanding, we shall briefly relate the rather lengthy history of 
dealings between Hayes and PCA. Hayes first borrowed approximately $1.8 million 
from PCA in June 1979. For several years, Hayes managed to stay current on the 
loan at least to the extent of paying interest. However, in 1983, it was 
necessary for Hayes to seek protection in the bankruptcy court and he filed for 
a Chapter 11 reorganization. One result of the bankruptcy proceeding was to 
place deeds to much of the property at issue in this case in escrow, with those 
deeds passing to PCA should Hayes default on his payments to PCA. In 1986, such 
a default occurred and the deeds were recorded in favor of PCA. In a separate 
proceeding, title to these lands was quieted in PCA. However, Hayes continued to 
occupy and make use of the land.

[¶5.]     Then came these 
proceedings which are immediately relevant to the resolution of this 
controversy. On September 12, 1986, PCA filed a petition and complaint for 
ejectment seeking to remove Hayes from the property. There were almost 
continuous negotiations between PCA and Hayes during the pendency of this 
action, negotiations that were designed to find a way to work out a deal so that 
Hayes could remain on the property. In addition, the proceedings were delayed by 
some six months pending resolution of Hayes's motion to dismiss which was 
premised on ongoing litigation in the bankruptcy court. In August of 1987, the 
case was continued indefinitely. A judgment and decree of ejectment was finally 
issued from the district court on November 30, 1988. No appeal was taken by 
Hayes, but he continued to occupy the property. During the ensuing months, 
negotiations between Hayes and PCA continued. On May 12, 1989, Hayes and PCA 
entered into a lease agreement with option to purchase and, thus, the judgment 
and decree of ejectment was not subjected to physical enforcement by the 
sheriff. Hayes next defaulted on the lease/purchase agreement by failing to make 
the required cash payments that were due under that agreement. On March 12, 
1990, PCA caused a writ of possession to be issued which was based upon the 
judgment and decree of ejectment of November 30, 1988. Hayes sought to quash the 
writ of possession, but his motion was denied by order entered on July 23, 1990. 
Hayes timely filed a notice of appeal from that order. On August 23, 1990, the 
district court found Hayes to be in contempt of court for willfully refusing to 
obey the judgment and decree of ejectment of November 30, 1988 and the writ of 
possession issued on March 12, 1990. The district court fined Hayes the sum of 
$1,000.00. Hayes also appeals the order finding him in 
contempt.

[¶6.]     We hold that the 
lease/purchase agreement entered into by Hayes and PCA was a voluntary 
settlement of the litigation in this case and operated to extinguish the 
judgment and decree of ejectment of November 30, 1988. There being no judgment 
in existence in August of 1990, the district court could not properly find Hayes 
in contempt for failure to abide by the judgment or the writ of possession 
issued pursuant to it. "`When a judgment is made part of a settlement agreement, 
it is merged in and superseded by the settlement agreement, and is thereafter 
extinguished.'" Van Schaack Holdings, Ltd. v. Fulenwider, 798 P.2d 424, 431 
(Colo. 1990) 
(quoting Van Schaack Holdings, Ltd. v. Fulenwider, 768 P.2d 740, 743 (Colo. App. 
1988)). See Eagle Oil Co. v. Sinclair Prairie Oil Co., 105 F.2d 710, 713 (10th 
Cir. 1939); Young By and Through Young v. Carpenter, 757 P.2d 148, 150 (1988), 
rev'd 773 P.2d 561, 568-69 (Colo. 1989); Elwert v. Marley, 53 Or. 591, 101 P. 671 (1909); Elwert v. Marley, 53 Or. 591, 99 P. 887 (1909); 15A Am.Jur.2d 
Compromise and Settlement, § 24 (1976); and 25 Am.Jur.2d Ejectment, §§ 138 and 
140 (1966)). Here, it is quite clear that Hayes fully acquiesced in the 
ejectment and recognized without limitation the ownership of PCA. The 
lease/purchase agreement is, of course, in writing and it placed Hayes back in 
possession in a legal sense (in reality Hayes never left the property until 
fairly recently). PCA's remedy must now be premised on the terms of the 
lease/purchase agreement and pertinent statutes. PCA cannot look to the November 
30, 1988 judgment for a further remedy.

[¶7.]     Finally, because we 
hold the November 30, 1988 judgment was extinguished by the lease/purchase 
agreement, Eagle Oil Co., 105 F.2d 710, it is simply a matter of common sense 
that the district court could not have issued a writ of possession pursuant to 
that judgment. With only the factual difference that the legal proceedings did 
not involve a contempt citation, an almost identical factual situation was 
presented in Elwert, 101 P. 671, where that court found a new relationship was 
created with the entry into a lease after the actual right of possession had 
been judicially acquired by the other party. The Elwertcourt recognized that 
with the new status, "[t]o obtain possession [the prior ejectment judgment 
beneficiary] would be compelled to resort to a new and independent proceeding." 
Id.at 671. It follows, quite logically, that the district court could not have 
found Hayes in contempt for failure to abide by an extinguished judgment and an 
invalid writ of possession.

[¶8.]     Not only is this 
decision supported by common sense, but a preclusive volume of precedent 
defining the basic principle that a court requires jurisdiction before its 
inherent or statutorily granted power of contempt can be employed. Ex parte 
George, 371 U.S. 72, 83 S. Ct. 178, 9 L. Ed. 2d 133 
(1962). See Annotation, Right to Punish for Contempt for Failure to Obey Court 
Order or Decree Either Beyond Power or Jurisdiction of Court or Merely 
Erroneous, 12 A.L.R.2d 1059 (1950) and numerous cases therein cited. This basic 
principle in specific application has only recently been restated and employed 
by this court. Subject matter jurisdiction is required for issuance of an 
enforceable contempt citation as the exercise of judicial power. United Mine 
Workers of America, Local 
1972 v. Decker Coal Co., 774 P.2d 1274 (Wyo. 
1989); Matter of Contempt Order Issued Against Anderson, 765 P.2d 933, 936 (Wyo. 1988); State v. 
Crenshaw, 307 Or. 160, 764 P.2d 1372 (1988).

[¶9.]     Therefore, we reverse 
and direct that the writ of possession be quashed. In addition, we vacate the 
district court's order finding Hayes in contempt and fining him 
$1,000.00.

[¶10.]  Reversed and remanded to the district 
court for further proceedings consistent with this 
opinion.