Case Title: Alm v. Sowell

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1995-07-28T00:00:00Z

Document:
Alm v. Sowell1995 WY 120899 P.2d 888Case Number: 94-112Decided: 07/28/1995Supreme Court of Wyoming
Donald 
L. ALM, Sr., and D.A. Stinger Service, Inc., a Wyoming 
corporation,

 Appellants 
(Plaintiffs),

v.

M. 
Kyle SOWELL and Alcova Lakeside Marina Limited, a Wyoming limited partnership, 

Appellees 
(Defendants).

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

Keith 
P. Tyler, Casper, for appellees.

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

GOLDEN, 
Chief Justice.

[¶1]      We review whether 
the district court observed required procedures in converting a motion to 
dismiss to a motion for summary judgment and, more specifically, whether the 
appellants were provided reasonable notice and an opportunity to respond to that 
conversion.

[¶2]  We affirm.

[¶3]            
Appellants, Donald L. Alm, Sr. (Alm) and D.A. Stinger Service, Inc. 
(Stinger), state these issues:

1. 
Whether the district court erred by consideration of materials outside the 
pleadings without proper notice of conversion to summary judgment and a 
reasonable opportunity to present pertinent material.

2. 
Whether the trial court erred in ruling that no genuine issue of material fact 
exists and that defendants are entitled to judgment as a matter of law because 
the proper standard is whether appellant's complaint states a claim upon which 
relief can be granted.

[¶4]            
Appellees, M. Kyle Sowell (Sowell) and Alcova Lakeside Marina Limited 
(Marina)1, restate the issues: 

1. 
Whether or not plaintiff waived notice requirements of Rule 12(b)(6) regarding 
conversion to a motion for summary judgment under Rule 56.

2. 
Whether the court's decision is supportable under Rule 12(b)(6).

[¶5]      A detailed 
recitation of the procedural and factual background is essential to disposition 
of this case. During the late summer of 1988, Alm, through his construction 
company Stinger2, performed construction work valued 
at $13,138.00 for Sowell at the Alcova Marina. It was understood from "the 
getgo" that Sowell would be unable to pay for that work. Therefore, in April 
1989 Sowell and Alm agreed the sum due would be paid as follows: (1) eight 
year's boat dock and lot rent, valued at $6,480.00; (2) lot rent for Mitch Alm 
for 1989, valued at $550.00; (3) balance to be paid at $1,000.00 per year in 
services until paid, valued at six years of $1,000.00 and one year of $108.00. 
Alm alleged he placed a mobile home on the lot he received and made other 
improvements to it worth $35,000.00. Further, he averred the Marina honored the 
April 1989 agreement from 1989 through 1993. In 1994, the Marina informed Alm he 
would be required to remove his property from both the boat dock and the 
lot.

[¶6]      These proceedings 
began on March 10, 1994, when Alm filed a "VERIFIED PETITION," seeking: A 
declaration of the parties' rights; an injunction preventing the Marina from 
removing Alm's improvements; and for other relief. Sowell moved to dismiss on 
March 22, 1994, asserting that a confirmed Chapter 11 bankruptcy plan fully 
satisfied the Marina's obligations to Alm and Stinger. Alm's petition was heard, 
in part, on March 23, 1994, but the hearing was not reported. On April 13, 1994, 
Alm filed an amended complaint, asserting causes of action in six counts. On 
April 15, 1994, Sowell and the Marina moved to dismiss the complaint, annexing: 
A copy of the bankruptcy court's "SECOND AMENDED PLAN OF REORGANIZATION;" a 
schedule of creditors with unsecured claims (including Alm's, as a "trade debt" 
of $9,760.00); a copy of the mailing matrix for the Sowell bankruptcy which 
included Alm's name and address; and, Alm's ballot accepting the reorganization 
plan. Sowell also attached various provisions of the bankruptcy code for 
convenient use by the district court. On April 15, 1994, Alm filed a brief 
opposing the motion to dismiss. As a preface, he declared:

Plaintiffs 
concede that, in the normal bankruptcy situation, executory contracts must be 
submitted to the Bankruptcy Court for approval and an Order obtained approving 
the executory contract. Plaintiffs have ordered a transcript of hearing from the 
Bankruptcy Court as of April 11, 1994, and reserve the right to examine that 
transcript and produce that transcript for the Court to determine whether or not 
such an Order should have been entered in the Bankruptcy Court approving the 
Plaintiffs' contract with Defendant, M. Kyle Sowell * * * dated April 4, 
1989.

[¶7]            
Continuing, Alm asserted Sowell was insolvent when he did his work and 
that the parties agreed Alm would not be "paid." Rather, Alm would receive dock 
and lot rentals, as well as other services, in lieu of payment. When Sowell, dba 
Alcova Lakeside Marina, actually went through bankruptcy, Alm was included as a 
creditor, but Stinger was not. Alm asserts no payments were ever made by the 
Marina under the bankruptcy plan. Rather, for a period of five years, all 
payments were made by the new limited partnership under Sowell's and Alm's April 
1989 agreement. In February 1994, the Marina directed Alm to vacate the marina 
area or his property would be removed. That event triggered this 
lawsuit.

[¶8]      Alm's legal 
theory was that, because Sowell and the Marina made no attempt to comply with 
the bankruptcy plan, but rather honored the April 1989 agreement, Alm was lulled 
into waiving his rights under the bankruptcy plan. Alm continues that, in 
addition to effectually waiving his right to have the assets of the partnership 
liquidated, he expended over $35,000.00 improving the "property" he received 
under the April 1989 agreement. Alcova countered that the "free" dock and lot 
rentals for the years 1989-1993 were, in fact, the payments due Alm under the 
bankruptcy plan and everything due was paid. On April 19, 1994, Sowell's motion 
to dismiss was heard by the district court. That hearing also was not 
reported.

[¶9]      On April 21, 
1994, the district court issued a decision letter, converting the motion to 
dismiss to a motion for summary judgment and finding generally in favor of 
Sowell and the Marina. By order entered on May 2, 1994, the district court 
granted summary judgment in their favor on five of six counts of the complaint. 
Alm appealed that judgment on May 3, 1994. The appeal was docketed in this court 
on May 31, 1994. Pursuant to a motion to dismiss the appeal, for the reason that 
the judgment was not appealable because of the limitation found in WYO. R.CIV.P. 
54(b), we remanded the matter to consider Rule 54(b) certification. That was not 
done. Instead, the remaining sixth count of the complaint3 was set for trial and finally 
adjudicated. On December 2, 1994, a copy of the final judgment was received in 
this court and the briefing schedule for this appeal began. On January 17, 1995, 
appellants' brief was filed and on February 27, 1995, appellees' brief was 
filed. By order entered on March 9, 1995, the case was placed on the expedited 
docket and assigned for resolution at conference on May 2, 1995.

[¶10]   Alm's arguments in this appeal are 
rather lean. He contends the district court erred in not giving the required 
notice that the motion to dismiss was converted to a motion for summary 
judgment. WYO.R.CIV.P. 12(b) provides:

If, 
on a motion asserting the defense numbered (6) to dismiss for failure of the 
pleading to state a claim upon which relief can be granted, matters outside the 
pleading are presented to and not excluded by the court, the motion shall be 
treated as one for summary judgment and disposed of as provided in Rule 56, and 
all parties shall be given reasonable opportunity to present all material made 
pertinent to such a motion by Rule 56.

[¶11]   Alm does not contend that 
conversion was improper, but only that he did not receive adequate notice. 
WYO.R.CIV.P. 56, in combination with WYO.R.CIV.P. 6(c), establishes a general 
requirement that the nonmoving party receive ten day's notice of conversion in 
order to file opposing matters (or seek a continuance under WYO.R.CIV.P. 56(f)). 
Stalkup v. State, Dept. of Environmental Quality, 838 P.2d 705, 709 (Wyo. 1992). 
The essence of Alm's claim is that he did not receive that ten day notice. That 
appears to be genuine at first blush. A precise examination of the record as a 
whole, however, convinces us that the issues in this case were fully joined in 
the March 1994 proceedings.4 Thus, Alm was on notice thereafter 
of the position to be taken by Sowell and the Marina at the already scheduled 
April 19, 1994, hearing. Moreover, although the district court was somewhat 
hasty in issuing its decision letter, the judgment itself was not entered until 
May 2, 1994. Therefore, after Sowell and the Marina had filed their motion to 
dismiss, which included matters outside the pleadings (which arguably were 
dispositive of Alm's complaint), Alm had more than two weeks in which to file 
whatever materials he wished to call to the attention of the district court, or 
to seek a continuance.5 No issue is specifically raised, 
and none is sustainable from the record extant, that Alm was unfairly or 
inappropriately surprised by the conversion. See Shriners Hospitals v. First 
Security Bank, 835 P.2d 350, 357 (Wyo. 1992).

[¶12]   We hold that Alm received 
reasonable notice of the conversion of Sowell's motion to dismiss to a motion 
for summary judgment and, although these circumstances are somewhat unusual, a 
fair opportunity to present his materials opposing the summary 
judgment.

[¶13]   We have determined that the motion 
to dismiss was properly converted to a motion for summary judgment and that Alm 
received reasonable notice of the conversion. The proper standard for the 
district court to have employed under these circumstances is that applicable to 
a motion for summary judgment. Stalkup, 838 P.2d  at 708-10. Therefore, we also 
hold that the district court did not err in deciding the issues under the 
summary judgment standard.

[¶14]  The judgment of the district court is 
affirmed.

Footnotes

1 
Before his November 1989 bankruptcy, Sowell did business as the Alcova Lakeside 
Marina and their claims are essentially identical. As we will explain more fully 
below, Alcova Lakeside Marina Limited, a limited partnership, emerged from the 
bankruptcy as the entity succeeding Sowell as operator of the Alcova Marina. 
Sowell became the principal partner in the Marina, as well as the managing 
partner.

2 
For the most part, Alm's and Stinger's claims are identical and we will 
generally refer to them only as Alm's. An occasional reference to Stinger is 
included where it enhances clarity, to the extent that can be achieved in this 
case.

3 
This count included a claim by Alm for other services performed by Stinger in 
1991, as well as a counterclaim by the Marina for bills left unpaid by Alm. 
These matters are not a subject of the appeal.

4 
Sowell and the Marina attempted to supplement the record with a statement of 
what transpired at the unreported hearings mentioned above. That supplementation 
was denied by the district court on the basis that the district court had no 
independent recollection of the proceedings.

5 
At no point in the proceedings below, or in the process of this appeal, has Alm 
delineated how the transcript he asked leave to provide, or any other materials 
for that matter, would affect the resolution of this case.