Case Title: Gaub v. Simpson

Citation: 

Docket Number: 93-23

State: wyoming

Court: Wyoming Supreme Court

Date: 1993-12-30T00:00:00Z

Document:
Gaub v. Simpson1993 WY 166866 P.2d 765Case Number: 93-23Decided: 12/30/1993Supreme Court of Wyoming
 

Arnold 
A. GAUB,

 Appellant 
(Defendant),

v. 

Elwood 
"Bill" J. SIMPSON, 

Appellee 
(Plaintiff).

 

 

Arnold 
A. Gaub, pro se.

Robert 
W. Horn, and Steven D. Olmstead, Jackson, for 
appellee.

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

THOMAS, 
Justice.

[¶1]      The only question 
to be resolved in this case is whether Elwood "Bill" J. Simpson (Simpson) 
discharged an Internal Revenue Service (IRS) lien against property he owned 
under circumstances that made him a volunteer and foreclosed him from legal 
subrogation. In a classic effort at obfuscation, Arnold A. Gaub (Gaub) presented 
the case as one involving the responsibility of a grantor under a warranty deed 
to defend the title to the property. It is clear the trial court focused upon 
the fact Simpson paid the amount of a tax lien against his property for taxes 
owed by Gaub. Through a straw man transfer, Simpson acquired the property from a 
grantee of Gaub to whom Gaub had conveyed the property prior to the attachment 
of the lien for federal taxes. When the IRS asserted the tax lien against his 
property, Simpson demanded Gaub obtain a release of the lien, paid the amount of 
the lien after Gaub failed to do so, and brought this action against Gaub to 
recover the amount paid. Gaub appeals from the judgment entered by the trial 
court in favor of Simpson, essentially contending that, for various reasons, he 
owed no duty to Simpson to defend the title to the property. We agree with the 
trial court that Simpson was not a volunteer when he paid the amount of the 
taxes to avoid foreclosure of a lien against his property, and he became 
entitled, as a matter of subrogation, to recover that amount from Gaub. The 
judgment of the trial court is affirmed.

[¶2]      Representing 
himself, Gaub sets forth the issues in his brief as 
follows:

     1. After a warranty 
deed is executed and delivered, and the grantee then neglects or refuses to 
record the deed for a number of years, must the grantor defend the title for the 
grantee against any intervening lienholder filings between the time of delivery 
of the deed and the time of the recording of the deed.

     2. After the IRS 
executes a lien release on a property, and that property deed has then been 
recorded in the name of the new owner free of all encumbrances, may the IRS 
thereafter levy and seize that property again in the name of the former deed 
holder.1 

     3. When a document 
signed by the IRS confirms that property of an individual and the seizure 
thereof shall not occur after an agreed date, may the trial court disregard that 
document in evidence and conclude that the plaintiff's payment to the IRS was 
compelled and not voluntary.

     4. Must a trial court 
observe and modify an initial judgment when obvious errors and exclusions are 
timely filed by the defendant with the court in "objections" to the Findings of 
Fact and Conclusions of Law as presented by the prevailing counsel for the 
court's approval.

Simpson, 
in his Brief of Appellee, does not agree with the issues set forth by Gaub, and 
he states the issues in this way:

     I. Whether there is 
sufficient evidence to support the findings of fact and conclusions of law of 
the trial court.

     II. Whether the trial 
court abused its discretion, as a matter of law, ruling in favor of 
appellee.

     III. Whether the 
appellant has framed a cogent argument with pertinent authorities for the 
Supreme Court to review.

[¶3]      The essential 
material facts may be captured in a chronology of pertinent dates and 
events:

·        
October 
18, 1982 - Gaub, as grantor, sold and conveyed by warranty deed Lot 23 (the 
property) in Alpine Village Subdivision in Lincoln County, Wyoming to Loren 
[Lorne] Cook (Cook).

 

·        
 Unspecified date in 1983 - Simpson came 
from Indianapolis and purchased Cook's interest in the property by directly 
paying to Gaub the amount owed by Cook. At that time, Gaub agreed he would "take 
care of recording the deed."

 

·        
November 
5, 1984 - The IRS filed a lien for income taxes owed by Gaub in the amount of 
$8,945.63 against the property.

 

·        
May 
24, 1985 - The IRS filed a second lien in the amount of $424.11 against the 
property. (Both liens were filed against this property because Gaub was the 
owner of record.)

 

·        
December 
4, 1987 - The warranty deed from Gaub to Cook was 
recorded.

 

·        
January 
13, 1988 - A warranty deed from Cook to Dale and Linda Perry (Perrys) was 
recorded. The Perrys were employed by Simpson

.

·        
September 
21, 1988 - A warranty deed from the Perrys to Simpson was 
recorded.

 

·        
April 
10, 1992 - The IRS sent a notice of seizure of the property to satisfy the tax 
lien.

 

·        
April 
10, 1992 - Under threat of dispossession, Simpson paid the asserted lien plus 
interest in the total amount of $12,425.

 

·        
November 
9, 1992 - Simpson filed a complaint against Gaub in the Third Judicial District 
Court in Lincoln County seeking reimbursement of the $12,425 paid to the 
IRS.

 

·        
January 
13, 1993 - The district court ruled in favor of Simpson and entered a judgment 
for him in the amount of $12,425.

[¶4]      Gaub appeals from 
the judgment, contending he owed no duty to defend the title to the property 
because, at the time of the conveyance, there were no encumbrances, and the 
encumbrances attached only because Cook failed to record the deed. Simpson 
argues he is entitled to a judgment for $12,425 because he paid the IRS on 
behalf of Gaub to prevent the seizure of his property. The issue Gaub seeks to 
debate is whether a grantor who has transferred real property by warranty deed 
has a duty to defend the title with respect to a remote purchaser. Simpson 
apparently is willing to maintain the judgment on any ground and essentially 
urges the sufficiency of the evidence to support the determination by the trial 
court.

[¶5]      The approach of 
the trial court is summarized in this statement taken from the judge's remarks 
from the bench:

     In this lawsuit, it 
seems like [counsel for Simpson] is proceeding more on the theory that, Mr. 
Gaub, Mr. Simpson paid off your obligation, so, therefore, you should pay Mr. 
Simpson. He seems to be relying on that more than on any basis that you 
warranted title to this property, not only to Mr. Cook but to all other people 
who were successors to Mr. Cook and who, in turn, conveyed by warranty 
deeds.

The 
district court did discuss warranty deeds with Gaub, but the essence of its 
ruling was that, confronted with the IRS lien and the threat to foreclose, 
Simpson chose to pay the taxes claimed due and then to seek to recoup the amount 
he had paid from Gaub. The trial court, furthermore, ruled that Simpson was not 
a volunteer because of the duress of the lien.

[¶6]      In light of the 
disposition by the trial court, while Gaub chooses to debate the effect of a 
warranty deed, we are satisfied the question that needs to be resolved is 
whether Simpson paid an obligation of Gaub to the IRS and, therefore, became 
subrogated to the IRS claim against Gaub. In order to answer that question, the 
court must determine whether Simpson acted as a volunteer in paying the IRS 
lien. This approach does not implicate the effect of Gaub's warranty deed in any 
way.

[¶7]      While it is 
correct, as Simpson asserts, that this court can sustain the trial court's 
judgment on any lawful ground reflected in the record (e.g., Union Pacific 
Resources Co. v. State of Wyoming, 839 P.2d 356 (Wyo. 1992); City of Laramie v. 
Hysong, 808 P.2d 199 (Wyo. 1991); Matter of Adoption of RDS, 787 P.2d 968 (Wyo. 
1990); Price v. Sorrell, 784 P.2d 614 (Wyo. 1989); Agar v. Kysar, 628 P.2d 1350 
(Wyo. 1981); Wightman v. American Nat'l Bank of Riverton, 610 P.2d 1001 (Wyo. 
1980)), we are satisfied we need not invoke any ground not presented in the 
trial court. As we have noted, the trial court held, in effect, that Simpson had 
discharged an obligation of Gaub to the IRS. While the parties did not discuss 
subrogation, Wyoming precedent would support the court's finding that Simpson 
was subrogated to the rights of the IRS against Gaub. The question then arises 
whether Simpson was a volunteer. In our view, the trial court correctly held 
Simpson was not a volunteer.

[¶8]      In Commercial 
Union Ins. Co. v. Postin, 610 P.2d 984 (Wyo. 1980), we discussed legal or 
equitable subrogation as contrasted to contractual subrogation in connection 
with a payment of damages made by an insurance company, which then sought to 
recover the damages paid from an alleged third-party tortfeasor. We described 
the right of legal subrogation as the payment by the subrogee to the subrogor of 
a debt conceptually owed by another. We there noted that, in order for one to 
proceed under the theory of legal or equitable subrogation, there was a 
necessity that the person or entity claiming subrogation act out of a concern 
about self-protection. Cf. Fulton v. Des Jardins, 67 Wyo. 517, 227 P.2d 240, 245 
(1951). We quoted from an earlier Wyoming case, Wyoming Bldg. & Loan Ass'n 
v. Mills Constr. Co., 38 Wyo. 515, 269 P. 45, 48 (1928):

     The right of 
subrogation may arise and sometimes must arise from contract. This is 
conventional subrogation. The right is sometimes given in the absence of 
contract, is then a creation of the court of equity, and is given when otherwise 
there would be a manifest failure of justice. This is legal 
subrogation.

[¶9]      Later, in 
Northern Util. Div. of K N Energy, Inc. v. Town of Evansville, 822 P.2d 829, 835 
(Wyo. 1991), we quoted with approval the following language from Postin, 610 
P.2d at 989-90:

     Within the ambit of 
legal-subrogation law, it is recognized that one is not a volunteer where it is 
shown that he made payment to protect his own interest. At 73 Am.Jur.2d, 
Subrogation, § 25, "Persons acting in self-protection," p. 614, it is 
said:

     "The right of 
subrogation is not necessarily confined to those who are legally bound to make 
the payment, but extends as well to persons who pay the debt in self-protection, 
since they might suffer loss if the obligation is not discharged. A person who 
has an interest to protect by making the payment is not regarded as a volunteer. 
* * * The extent or quantity of the subrogee's interest which is in jeopardy is 
not material. If he had any palpable interest which will be protected by the 
extinguishment of the debt, he may pay the debt and be entitled to hold and 
enforce it just as the creditor could. * * * It would seem that one acting in 
good faith in making his payment, and under a reasonable belief that it is 
necessary to his protection, is entitled to subrogation, even though it turns 
out that he had no interest to protect."

We 
again held, in the context of a dispute between joint tortfeasors, that Northern 
Utilities did present a genuine issue of material fact as to its status as a 
joint tortfeasor. In the context of the case, that determination was preliminary 
to whether Northern Utilities acted as a volunteer, which we noted is a question 
of law to be determined by the court.

[¶10]   Turning to the earlier Wyoming 
case, Wyoming Bldg. & Loan Ass'n, 269 P.  at 48-49, we 
quote:

One 
instance in which legal subrogation is applied is in connection with the 
protection of a lien, and the rule is universal that one who has an interest in 
property by lien or otherwise, in making payment of prior liens, including 
taxes, is not a mere volunteer, and that he will be entitled, upon payment of a 
superior lien in order to protect his own lien, to be subrogated to the rights 
of the superior lienholder. Marks v. Baum Building Co., 73 Okla. 264, 175 P. 818; Wiltse, Mortgage Foreclosure, §§ 542 and 1221; Cooley, Taxation, § 1263; 37 
Cyc. 443, 444; 25 R.C.L. 1346. We are satisfied this concept still is sound, and 
there is no basis to distinguish Wyoming Bldg. & Loan Ass'n, involving state 
taxes, from this instance, in which an IRS lien was paid by the owner of the 
property.

[¶11]   In summary, then, we are satisfied 
with the legal propriety of the ruling by the district court, in accordance with 
Wyoming law, that Simpson paid a tax bill, which Gaub owed, in order to protect 
Simpson's property from an IRS lien. The law justifies this action on the part 
of Simpson; makes Simpson a subrogee to the rights of the IRS; and demonstrates 
that, in pursuing the course he chose, Simpson did not act as a 
volunteer.

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

FOOTNOTES

1 Gaub misstates the facts in this case. The property was not free of all 
encumbrances as Gaub contends. Defendant's Exhibit No. 3 is a letter dated April 
3, 1992 from an IRS revenue officer to the Lincoln County Clerk which 
states:

The Release of Levy dated 10-02-86 does not cover a tax lien. Mr. Gaub's 
property had been under seizure and the release was only releasing the property 
from seizure.

The liens still attach to all property including the one released from 
seizure.

This court has had occasion to comment on the procedural standards 
required in appeals and has said:

Because appellant is proceeding pro se, he may simply be unaware of what 
is required to perfect an appeal under the Wyoming Rules of Appellate Procedure. 
We must, however, abide by our firm rule that requires a pro se litigant to 
comply with the same procedural standards as those litigants represented by 
counsel. Apodaca v. Ommen, 807 P.2d 939, 943 (Wyo. 1991); Annis v. Beebe & 
Runyan Furniture Co., 685 P.2d 678, 679 (Wyo. 1984); Matter of GP, 679 P.2d 976, 
985 (Wyo. 1984). Therefore, our rules of appellate procedure apply equally to 
appellant * * *.

Stone v. Stone, 842 P.2d 545, 547 (Wyo. 
1992).

Failure to follow the Wyoming Rules of Appellate Procedure does not 
assist the pro se litigant in presenting his position. Some cases have even been 
dismissed by this court for failure to follow these appellate 
rules.