Case Title: Diamond Hill Inv. Co. v. Shelden

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1989-01-13T00:00:00Z

Document:
Diamond Hill Inv. Co. v. Shelden1989 WY 15767 P.2d 1005Case Number: 88-43Decided: 01/13/1989Supreme Court of Wyoming
DIAMOND 
HILL INVESTMENT COMPANY AND SAGE CAPITAL CORPORATION, APPELLANTS (DEFENDANTS), 
W.A.S., INC., A COLORADO CORPORATION, (DEFENDANT),

 
 
v.

 
 
THOMAS A. 
SHELDEN, D/B/A ATRIA ARCHITECTS, APPELLEE (PLAINTIFF).

 
 
Appeal from 
the District Court, LaramieCounty, Nicholas G. Kalokathis, 
J.

 
 
Barry G. 
Williams of Williams, Porter, Day & Neville, P.C., Casper, for appellants.

 
 
Todd S. 
Welch of Bailey, Pickering, Stock & Welch, 
Cheyenne, for appellee.

 
 
Before BROWN, C.J.*, and THOMAS, 
CARDINE,** URBIGKIT and MACY, JJ.

 
 

* Chief 
Justice at the time of oral arguments; retired June 29, 
1988.

 
 
** Became 
Chief Justice June 30, 1988.

 
 

MACY, 
Justice.

 
 

[¶1.]     This is an appeal from 
a summary judgment in favor of appellee Thomas A. Shelden, d/b/a Atria 
Architects, authorizing him to foreclose his contractors' lien and declaring 
that his lien is superior to the mortgage of appellants Diamond Hill Investment 
Company and Sage Capital Corporation, thereby effectively foreclosing 
appellants' interest in the subject property. At issue are the determinations by 
the district court that, pursuant to provisions of the federal Bankruptcy Code, 
the petition in bankruptcy filed by the owner of the property stayed any action 
by appellee to foreclose his lien, including the filing of an amended complaint 
to include appellants as defendants, and that the Wyoming statute of limitations 
for commencing a foreclosure action was tolled during the pendency of the 
bankruptcy proceedings.

 
 

[¶2.]     We 
affirm.

 
 

[¶3.]     The parties agree that 
the issue is:

 
 
     Did the Trial Court 
err in finding that the automatic stay provided by 11 U.S.C. § 362 issued in 
connection with the bankruptcy case filed by W.A.S., Inc. (landowner/developer), 
Debtor, stayed an action by Appellee against the non-debtor Appellants (mortgage 
holders) and therefore the First Amended Complaint to Foreclose Lien filed by 
Appellee to join the Appellants, after the statute of limitations provided by 
Wyoming Statutes § 29-2-109 had run, was nonetheless timely 
filed?

 
 
We would 
add, as a related or sub-issue:

 
 
     If 11 U.S.C. § 362 
(1982 & Supp. IV 1986) effectively stayed the filing of the first amended 
complaint by appellee, did that section, in conjunction with 11 U.S.C. § 108(c) 
(1982 & Supp. IV 1986), operate to toll the statute of limitations found in 
Wyo. Stat. § 29-2-109 (1977) requiring commencement of an action to foreclose a 
contractors'/materialmen's lien within 180 days after filing the lien 
statement?

 
 

[¶4.]     The relevant facts in 
this case involve its procedural framework, and these facts are not in dispute. 
Appellee initiated the action by filing a complaint on June 17, 1986, against 
W.A.S., Inc. (W.A.S.), a Wyoming corporation, 
George M. Wilson (Wilson), and Thelma Hickman (Hickman) to 
foreclose a contractors' lien for architectural and engineering services 
provided pursuant to a contract for the improvement of certain properties owned 
by the named defendants. Defendants Wilson and Hickman answered, but default was 
entered against W.A.S. on July 14, 1986. On August 11, 1986, a default judgment 
and judgment authorizing foreclosure of the lien was entered against W.A.S. 
Thereafter, on September 8, 1986, W.A.S. filed a motion to stay enforcement of 
the judgment and a motion for relief from judgment. On that same date, the 
district court signed an order granting a stay of enforcement pending resolution 
of the motion for relief from judgment.

 
 

[¶5.]     All proceedings in the 
case came to a halt on September 12, 1986, when W.A.S. filed a voluntary 
petition in the United States Bankruptcy Court for the District of Colorado 
pursuant to chapter 11 of the Bankruptcy Code, 11 U.S.C. § 1101-1174 (1982 & 
Supp. IV 1986). The bankruptcy court dismissed the chapter 11 petition on 
January 20, 1987. On January 30, 1987, appellee filed a request to amend his 
complaint to add appellants as defendants pursuant to W.R.C.P. 15. Appellee 
indicated in this request that, as a result of the preparation of a foreclosure 
guaranty, he became aware of a mortgage held by appellants against the property 
owned by W.A.S. An order allowing appellee to file his amended complaint was 
entered on February 9, 1987, and the amended complaint was filed on that date. 
In his amended complaint, appellee alleged that his contractors' lien was prior 
and superior to the mortgage of appellants, and he requested that the district 
court so declare and order the mortgage of appellants to be forever barred and 
terminated. After their motion to dismiss was denied, appellants answered the 
amended complaint.

 
 

[¶6.]     On April 9, 1987, the 
district court entered an order dismissing defendants Wilson and Hickman from 
the suit pursuant to a stipulation among the parties. Appellee then filed a 
motion for summary judgment against appellants, and appellants renewed their 
motion to dismiss. After further denials and renewals of the motions, the 
district court held a hearing on November 23, 1987, on appellee's motion for 
summary judgment. An order granting summary judgment to appellee was entered on 
December 31, 1987. The order provided in pertinent part:

 
 
     IT IS HEREBY ORDERED 
that Summary Judgment be granted in favor of Plaintiff, Thomas A. Shelden, d/b/a 
Atria Architects, and against the Defendants, Diamond Hill Investment Company 
and Sage Capital Corporation;

 
 
     IT IS FURTHER ORDERED 
that the Motion to Dismiss and defense of Failure to State a Cause of Action for 
Which Relief can be Granted of Diamond Hill Investment and Sage Capit[a]l 
Corporation are hereby denied;

 
 
     IT IS FURTHER ORDERED 
that the lien of Thomas A. Shelden, d/b/a Atria Architects, is superior and 
prior to the mortgage held by Diamond Hill Investment Company and Sage Capital 
Corporation;

 
 
     IT IS FURTHER ORDERED 
that the Plaintiff, Thomas A. Shelden, d/b/a Atria Architects, have judgment on 
his lien in the amount of $93,816.06 and declaratory relief against Diamond Hill 
Investment Company and Sage Capital Corporation;

 
 
     IT IS FURTHER ORDERED 
that * * * Plaintiff, Thomas A. Shelden, d/b/a Atria Architects, is hereby 
authorized to foreclos[]e his mechanic's lien against the following described 
property:

 
 
[A specific 
description of the subject property was inserted here.]

 
 
     IT IS FURTHER ORDERED 
that the property and all improvements thereon above-described be sold at a 
public sale by the Sheriff of Laramie County or one of his deputies in 
accordance with the applicable statutes, with the proceeds used to pay the lien 
and any excess proceeds applied as provided by law.

 
 

[¶7.]     In appealing from this 
order, appellants do not challenge the determination by the district court that 
the lien of appellee was prior and superior to the mortgage of appellants. 
Appellants limit their appeal, rather, to the question of whether, despite the 
intervening bankruptcy proceedings involving the owner of the property, the 
statute of limitations for commencing a foreclosure action on a contractors' 
lien had run in relation to the claim against appellants, thereby barring 
appellee from adding appellants as party defendants and foreclosing appellants' 
interest in the subject property.1 This is purely 
a question of law. 

 
 

[¶8.]     Summary judgment is 
properly granted only upon the dual findings that there is no genuine issue of 
material fact and that the prevailing party is entitled to judgment as a matter 
of law. Farr v. Link, 746 P.2d 431 (Wyo. 1987). Where, as in this case, the facts 
are not in dispute and the issue involves only a question of law, we accord no 
special deference to, and are not bound by, the decision of the district court. 
Id. Thus, we 
must determine whether the district court, in applying the relevant statutes, 
correctly found that appellee was entitled to judgment as a matter of 
law.

 
 

[¶9.]     Wyo. Stat. § 
29-1-201(a)(i)(A)(I) (1977) provides that, for purposes of the Wyoming lien statutes, an 
architect is a contractor. Architects, therefore, are included in the provisions 
regarding liens of contractors and materialmen. Wyo. Stat. §§ 29-2-101 to -109 (1977). These 
liens are commonly referred to as mechanics' liens.2 Appellee properly perfected his lien against the subject 
property by filing a lien statement with the county clerk in compliance with 
Wyo. Stat. §§ 29-1-301, 29-2-106, and 29-2-107 (1977). Crucial to the issue in 
this case is the effect of § 29-2-109, which provides:

 
 
     All actions to 
foreclose or enforce a lien under this chapter shall be commenced within one 
hundred eighty (180) days after the filing of the lien statement. No lien shall 
continue to exist except by virtue of the provisions of this chapter for more 
than one hundred eighty (180) days after the lien is filed unless an action to 
foreclose the lien is instituted.

 
 

[¶10.]  Appellee filed his lien statement on 
April 28, 1986. The 180 days within which he had to commence an action to 
foreclose or enforce his lien expired on October 27, 1986. W.R.C.P. 3(a) 
provides that an action is commenced by the filing of a complaint with the 
court, and paragraph (b) of that rule further states in relevant 
part:

 
 
     For purposes of statutes of limitation, an 
action shall be deemed commenced on the date of filing the complaint as to each 
defendant, if service is made on him or on a co-defendant who is a joint 
contractor or otherwise united in interest with him, within sixty (60) days 
after the filing of the complaint.

 
 
(Emphasis 
added.) In Peters v. Dona, 49 Wyo. 306, 324, 54 P.2d 817, 822-23 (1936) 
(quoting Hiller v. Schulte, 184 Mo. App. 42, 167 S.W. 461, 462 (1913)), we 
said:

 
 
"And it is 
well settled that, where parties are thus brought in by an amendment, the suit 
as to them is begun at the time of such amendment making them parties. The 
amended petition as to them is the filing of a new suit. And, as an action to 
enforce a mechanic's lien must be brought within 90 days after the filing of the 
lien, after the lapse of that time new parties cannot be brought in by amendment 
and be thus affected by the proceeding."

 
 
Quoted in 
Seafirst Mortgage Corporation v. Specialty Concrete Construction, 708 P.2d 1245, 
1247 (Wyo. 
1985).

 
 

[¶11.]  Appellee timely brought an action to 
foreclose his lien against the property of defendants W.A.S., Wilson, and 
Hickman by filing his "COMPLAINT TO FORECLOSE LIEN" against those parties on 
June 17, 1986. This original complaint, however, did not name appellants as 
defendants and, in accordance with W.R.C.P. 3(b) and Seafirst Mortgage 
Corporation, it was not effective to commence an action against appellants. The 
amended complaint joining appellants as defendants was not filed until February 
9, 1987, beyond the 180-day statutory limit. In Seafirst Mortgage Corporation, 
we held that the interest of a mortgagee was not affected by a mechanics' lien 
foreclosure action where the plaintiff failed to join the mortgagee in the suit 
within the prescribed 180 days. Thus, unless the applicable provisions of the 
Bankruptcy Code stayed the filing of appellee's amended complaint and tolled the 
running of § 29-2-109, appellee's amended complaint joining appellants as 
defendants was untimely, and the foreclosure was ineffective as against 
them.

 
 

[¶12.]  We turn, therefore, to the Bankruptcy 
Code to determine the effect of its relevant provisions upon the issue. We must 
first ascertain whether the automatic stay afforded by 11 U.S.C. § 362(a) (1982 
& Supp. IV 1986) stayed the filing of appellee's amended complaint. Section 
362(a) provides in pertinent part:

 
 
     Except as provided in 
subsection (b) of this section, a petition filed under section 301, 302, or 303 
of this title, or an application filed under section 5(a)(3) of the Securities 
Investor Protection Act of 1970 (15 U.S.C. § 78eee(a)(3)), operates as a stay, 
applicable to all entities, of -

 
 
     (1) the commencement 
or continuation, including the issuance or employment of process, of a judicial, 
administrative, or other action or proceeding against the debtor that was or 
could have been commenced before the commencement of the case under this title, 
or to recover a claim against the debtor that arose before the commencement of 
the case under this title;

 
 
     (2) the enforcement, 
against the debtor or against property of the estate, of a judgment obtained 
before the commencement of the case under this title;

 
 
     (3) any act to obtain 
possession of property of the estate or of property from the estate or to 
exercise control over property of the estate;

 
 
     (4) any act to create, 
perfect, or enforce any lien against property of the 
estate;

 
 
     (5) any act to create, 
perfect, or enforce against property of the debtor any lien to the extent that 
such lien secures a claim that arose before the commencement of the case under 
this title;

 
 
     (6) any act to 
collect, assess, or recover a claim against the debtor that arose before the 
commencement of the case under this title[.]

 
 

[¶13.]  As appellee points out in his brief, both 
the appellants and the appellee were creditors of the debtor in bankruptcy, 
W.A.S., each claimed a debt from the debtor in bankruptcy, and each claimed an 
interest in the same property of the debtor which was part of the bankruptcy 
estate.3 In addition to the obvious purpose of the 
automatic stay to provide debtor protection, it also serves to protect the 
rights of creditors. This second purpose of the stay was discussed in the case 
of In re Paul, 67 B.R. 342, 345-46 (Bankr.D.Mass. 1986), wherein the court 
stated:

 
 
     One of the primary 
goals of the automatic stay is to sort out creditors into an order of priority 
untainted by post-petition jockeying for position. Congress has stated that the 
automatic stay gives protection to both the debtor and the creditors. * * * The 
intended effect of the stay, therefore, is to fix rights and priorities as of 
the time of petition filing and to 
prohibit any further acts to advance those rights and 
priorities.

 
 
The stay 
not only fixes priorities, but also protects them. The Supreme Court in Isaacs 
v. Hobbs Tie and Timber Co., 282 U.S. 734, 51 S. Ct. 270, 75 L. Ed. 645 
(1931), stated that "valid liens existing 
at the time of the commencement of a bankruptcy proceeding are preserved . . 
. ." Id. at 
738, 51 S. Ct.  at 272. The Second Circuit has held that the effect of filing a 
petition is a two way street for creditors and debtors: "[I]n general no 
creditors' liens acquire validity after the filing of the petition . . . It 
should equally follow, we believe, that liens good at this time do not lose 
their validity. . . ." Lockhart v. Garden City Bank & Trust Co., 116 F.2d 658, 661 (2d Cir. 1940). The freezing of 
priorities is consistent with the needs of the automatic stay. Just as a 
creditor's actions after the petition will not affect the priority of other 
creditors' claims, his inaction during the stay should not affect his own 
priority. To hold otherwise would encourage the unequal "race of diligence" 
Congress wanted to avoid.

 
 
(Emphasis 
added.) The § 362(a) stay has been described as being extremely broad in scope, 
applicable to any type of formal or informal action against the debtor or the 
property of the bankruptcy estate. 2 W. Collier, Collier on Bankruptcy ¶ 362.04 
(15th ed. 1988). See also Baldwin-United Corporation v. Paine Webber Group, 
Inc., 57 B.R. 759 (S.D.Ohio 1985). The filing of a suit to enforce or foreclose 
a lien violates the automatic stay. H.T. Bowling, Inc. v. Bain, 64 B.R. 581 
(W.D.Va. 1986); Meek Lumber Yard, Inc. v. Houts, 23 B.R. 705 (Bankr.W.D.Mo. 
1982).

 
 

[¶14.]  It is forcefully urged by appellants, 
however, that the stay should not apply in this situation. Appellants argue that 
the action commenced by appellee with his amended complaint was only an action 
to foreclose the interest owned by the nondebtor appellants in the subject 
property rather than the commencement or continuation of an action against the 
debtor, the property of the debtor, or the property of the bankruptcy estate as 
envisioned by the automatic stay of § 362(a). Although at first blush this 
argument is attractive, a thorough analysis reveals that it cannot be 
sustained.

 
 

[¶15.]  It is true that the § 362(a) automatic 
stay is limited to actions against debtors and does not include actions against 
nonbankrupt co-defendants. Hamel v. American Continental Corporation, 713 P.2d 1152 (Wyo. 1986); Teachers Insurance and 
Annuity Association of America v. Butler, 803 F.2d 61 (2d Cir. 1986); Fortier v. 
Dona Anna Plaza Partners, 747 F.2d 1324 (10th Cir. 1984); 2 W. Collier, supra. 
In arguing that the amended complaint represented the commencement of an action 
against only nondebtor co-defendants, appellants rely upon our holding in Hamel 
as support for their contention that the stay does not apply under the 
circumstances of this case. Their reliance on Hamel, however, is 
misplaced.

 
 

[¶16.]  In Hamel, the unpaid employees of a 
contractor brought a mechanics' lien foreclosure action against the property 
owner 183 days after the filing of the lien statement. The contractor had filed 
a bankruptcy petition which stayed any action by the employees against the 
contractor. After discharge of the contractor from bankruptcy, the foreclosure 
complaint against the owner was filed. In upholding the district court's 
dismissal of the employees' action, we held that the bankruptcy stay involving 
the contractor did not stay the employees from filing their foreclosure action 
against the owner, and therefore the time limit mandated by § 29-2-109 had 
expired. Critical to our holding in Hamel, however, was the fact that the 
contractor was not, as unsuccessfully argued by the employees in that case, an 
indispensable party in a lien foreclosure action against the owner. As we 
pointed out in Hamel, under Wyoming law a contractor is not an 
indispensable party to a lien foreclosure except when the owner insists that he 
be made a party. Hamel, 713 P.2d 1152.

 
 

[¶17.]  The opposite situation is presented in 
the instant case. Here, the amended complaint sought foreclosure against a 
competing creditor. As implied in Hamel, such action requires that the owner be 
joined as an indispensable party. The rule is succinctly stated in 53 Am.Jur.2d, 
Mechanics' Liens § 361 at 886 (1970): "The owner of the premises against which a 
mechanic's lien is sought to be foreclosed is a necessary party, and no 
foreclosure may be had without joining him." Thus, appellee could not have 
pursued an independent foreclosure action against appellants. The Supreme Court 
of Illinois was faced with a similar situation in Garbe Iron Works, Inc. v. 
Priester, 99 Ill. 2d 84, 75 Ill.Dec. 428, 457 N.E.2d 422 (1983). Under Illinois law, both the 
owner and the contractor are necessary parties to a lien foreclosure. The 
contractor in Garbe Iron Works, Inc. filed a bankruptcy petition. The 
subcontractor, therefore, delayed filing his suit until obtaining a modification 
of the automatic stay from the bankruptcy court, by which time the limitation 
period for filing the action had expired - a fact relied upon by the property 
owner in seeking dismissal. In affirming a decision for the subcontractor, the 
Illinois Supreme Court held that, where a necessary party in an action to 
foreclose a mechanics' lien files a bankruptcy petition, the amount of time in 
which the subcontractor has to file suit is extended. That court further stated, 
in language particularly relevant to the instant case:

 
 
     Also unpersuasive is 
defendant's contention that the automatic stay provision in section 362 of the 
Bankruptcy Act is not applicable to the present facts since no direct relief 
from [the contractor] was sought. Section 362, however, broadly and plainly 
prohibits the commencement of any type of proceeding against the debtor (11 
U.S.C. § 362 (Supp. 1979)), and this action, under the statute, could not have 
been commenced without joining the debtor as a party defendant. Plaintiff was 
unquestionably subject to the automatic stay and correctly delayed filing suit 
until it was lifted.

 
 

Id. 75 
Ill.Dec. at 431, 457 N.E.2d  at 425.

 
 

[¶18.]  We conclude, therefore, that, since 
W.A.S., as owner, was an indispensable party to a foreclosure action against 
appellants as mortgage holders and since any action against W.A.S. was stayed by 
§ 362(a) of the Bankruptcy Code, appellee correctly determined he was stayed 
from filing his amended complaint joining appellants as party defendants until 
after dismissal of the bankruptcy proceedings involving W.A.S. If appellee had 
filed the amended complaint during the pendency of the bankruptcy proceedings, 
the action would have been void and of no effect. Emerson Quiet Kool Corporation 
v. Marta Group, Inc., 33 B.R. 634 (Bankr.E.D.Pa. 1983); 2 W. Collier, supra at ¶ 
362.11.

 
 

[¶19.]  Having determined that § 362(a) stayed 
appellee from filing his amended complaint, we must next examine the effect of 
11 U.S.C. § 108(c) (1982 & Supp. IV 1986)4 
upon appellee's late filing of the amended complaint. That section 
provides:

 
 
Except as 
provided in section 524 of this title, if applicable nonbankruptcy law, an order 
entered in a nonbankruptcy proceeding, or an agreement fixes a period for 
commencing or continuing a civil action in a court other than a bankruptcy court 
on a claim against the debtor, or against an individual with respect to which 
such individual is protected under section 1201 or 1301 of this title, and such 
period has not expired before the date of the filing of the petition, then such 
period does not expire until the later of -

 
 
     (1) the end of such 
period, including any suspension of such period occurring on or after the 
commencement of the case; or

 
 
     (2) 30 days after 
notice of the termination or expiration of the stay under section 362, 922, 
1201, or 1301 of this title, as the case may be, with respect to such 
claim.

 
 

[¶20.]  In the instant case, the statute clearly 
operated to extend the time limit found in § 29-2-109 for appellee to file his 
amended complaint against the debtor, W.A.S., to include appellants as 
defendants. The extent of the additional time afforded by the statute, however, 
is less clear. A survey of the cases addressing the question reveals a division 
in authority as to whether § 108(c) operates to suspend the running of any 
applicable limitation period, thereby extending the creditor's time to act for a 
period equal to the time the action was stayed by the Bankruptcy Code, or 
whether it merely provides an additional thirty days to commence or continue an 
action once the stay is lifted. See Garbe Iron Works, Inc., 75 Ill.Dec. 428, 457 N.E.2d 422, and Grotting v. Hudson Shipbuilders, Inc., 85 B.R. 568 (W.D.Wash. 
1988), as cases representing the two divergent views on this question. In this 
case, however, it is not necessary that we adopt either interpretation. The 
bankruptcy case involving W.A.S. was dismissed on January 20, 1987, and 
appellee's amended complaint was filed on February 9, 1987; thus, it was timely 
filed under either view of § 108(c).

 
 

[¶21.]  Our decision in this case is consistent 
with a basic purpose of the automatic stay provision - that valid liens in 
existence at the commencement of bankruptcy proceedings be preserved. Isaacs v. 
Hobbs Tie & Timber Company, 282 U.S. 734, 51 S. Ct. 270, 75 L. Ed. 645 
(1931); Bond Enterprises, Inc. v. Western Bank of Farmington, 54 B.R. 366 (Bankr.D.N.M. 1985); In 
re Paul, 67 B.R. 342. The cases involving a conflict between the automatic stay 
and state law time constraints imposed upon creditors for taking some action (by 
article 9 of the Uniform Commercial Code or otherwise) have consistently held 
that the time limitations are tolled during the pendency of the bankruptcy 
proceeding. See In re Paul, 67 B.R. 342 (time for renewal of attachment tolled 
by filing of bankruptcy petition); Bond Enterprises, Inc., 54 B.R. 366 (period 
for filing a continuation statement tolled during pendency of bankruptcy 
proceedings); Meek Lumber Yard, Inc., 23 B.R. 705 (filing of suit to enforce 
mechanics' lien violates automatic stay, but statute of limitations for filing 
such suit is tolled); and H.T. Bowling, Inc., 64 B.R. 581 (§ 108(c) tolls any 
statute of limitations imposed by state law on a claim against a debtor in 
bankruptcy).

 
 

[¶22.]  In conclusion, we hold that appellee's 
amended petition to foreclose his lien was subject to the automatic stay of the 
Bankruptcy Code, § 362(a), and that, pursuant to § 108(c) of the Code, the 
statute of limitations for commencing or continuing the action, § 29-2-109, was 
tolled during the pendency of W.A.S.' bankruptcy proceedings. As a result, we 
hold that appellee's amended petition was timely filed and that the foreclosure 
against the interests of appellants was effective.

 
 

[¶23.]  AFFIRMED.

 
 
FOOTNOTES

 
 

1 The fact 
that default judgment had been entered against W.A.S. did not prevent appellee 
from amending his original complaint in this action. Although default judgment 
had been entered against W.A.S., the suit was not terminated as to any of the 
parties because of the unresolved claims against defendants Hickman and Wilson. 
W.R.C.P. 54(b) provides that, when multiple parties are involved, the court may 
direct the entry of final judgment as to fewer than all of the 
parties

 
 
only upon 
an express determination that there is no just reason for delay and upon an 
express direction for the entry of judgment. In the absence of such determination and 
direction, any order or other form of decision, however designated, which 
adjudicates fewer than all the claims or the rights and liabilities of fewer 
than all the parties shall not terminate the action as to any of the claims or 
parties, and the order or other form of decision is subject to revision at any 
time before the entry of judgment adjudicating all the claims and the rights and 
liabilities of all the parties.

 
 
(Emphasis 
added.) A W.R.C.P. 54(b) determination of finality was not made in the default 
judgment entered against W.A.S., thus the action continued as to all parties. 
See also 10 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure: 
Civil 2d § 2660 at 116-17 (1983).

 
 

2 The 
generic term "mechanics' lien" extends to others than mechanics and is sometimes 
specifically referred to as a "contractors' lien," a "subcontractors' lien," a 
"materialman's lien," or a "laborer's lien." 53 Am.Jr.2d, Mechanics' Liens § 1 
at 513 (1970).

 
 

3 The 
commencement of a bankruptcy case creates an estate (the bankruptcy estate), 
which is comprised of, inter alia, "all legal or equitable interests of the 
debtor in property as of the commencement of the case." 11 U.S.C. § 541(a)(1) 
(1982).

 
 

4 Section 
108(c) was amended in 1986 to include the references to § 1201 of chapter 12 
dealing with bankruptcies of family farmers. The 1986 amendment became effective 
after commencement of this action and thus was not applicable to this case. 
Pub.L. 99-554. The 1986 changes, in any event, are immaterial to the issues 
presented in this case.

 
 

URBIGKIT, Justice, 
dissenting, with whom THOMAS, Justice, joins.

 
 

[¶24.]  This court in present decision 
misinterprets the relationship of present litigants to a completely 
disassociated bankruptcy stay for a result which only bails out a litigant from 
a pleading mistake. To achieve this end, federal bankruptcy law is misconstrued 
and consequently misapplied; thus, I dissent.

 
 

[¶25.]  Although not directly raised in present 
appellate discussion, serious substantive factual questions exist as to the 
appropriateness and accuracy of the computation of amounts for which Thomas A. 
Shelden d/b/a Atria Architects (Atria) was given a priority claim and whether 
the lien claim lacked validity when notice of intent was not provided to "any 
person with a legal or equitable interest in the property to be changed, * * *." 
W.S. 29-1-201(a)(v)(A). Consideration of these significant concerns within the 
summary judgment disposition simply is not pursued in the absence of appellate 
briefing and counsel review request.1 Condict v. 
Ryan, 79 Wyo. 211, 333 P.2d 684 (1958), reh'g 
denied 79 Wyo. 
211, 335 P.2d 792 (1959); Black v. Wills, 758 S.W.2d 809 (Tex. App. 
1988).

 
 

[¶26.]  With the summary judgment disposition, 
the facts need to be more fully explained. Around April 2, 1985, Atria initiated 
architectural planning for this Laramie County, Wyoming project involving land 
apparently sold on contract by George M. Wilson (Wilson) to W.A.S., Inc., (W.A.S.), as real 
estate developer. Thereafter occurring: (1) a real estate mortgage dated June 
14, 1985 and recorded June 20, 1985 was executed by W.A.S. in favor of Diamond 
Hill Investment Company (Diamond Hill) and Sage Capital Corporation (Sage) as 
mortgagees; (2) on June 26, 1985, an architectural contract between Atria and 
W.A.S. was signed; (3) on or about January 28, 1986, the last work was done by 
the architect; (4) on April 14, 1986, a notice of intent to file lien was served 
by Atria on W.A.S. but not on Diamond Hill and Sage; (5) on April 28, 1986, a 
mechanic's lien was filed, but that document lacked itemization as required by 
W.S. 29-1-301(b)(iv) (the record discloses no evidence of compliance with the 
post-filing notice requirement); (6) on June 17, 1986, suit to foreclose the 
lien was filed against W.A.S. as the alleged owner of one parcel and against 
Wilson and Thelma Hickman (Hickman) as alleged owners of another parcel;2 (7) not included as defendants in the foreclosure 
action were the holders of the first mortgage on the property; (8) on August 11, 
1986, a default judgment was obtained by Atria against W.A.S. which authorized 
foreclosure against the owner; (9) on September 12, 1986, bankruptcy was filed 
by W.A.S. in the United States Bankruptcy Court for the District of Colorado; 
(10) on January 20, 1987, the bankruptcy proceedings were dismissed; (11) on 
January 30, 1987, a motion for leave to amend the complaint to add the holders 
of the first mortgage as parties to the litigation was made3 and then granted on February 9, 1987; (12) an amended 
foreclosure proceeding and introduction of the new parties and the new issue of 
what effect the "amended complaint" had; and (13) on April 9, 1987, a 
stipulation for dismissal of claims with prejudice was entered removing Hickman 
and Wilson from the litigation. This deleted any architectural firm claim for 
fees to the Wilson/Hickman property, although no credit was given on the 
continued claim against W.A.S. property where, in the original complaint, 
$8,098.95 of the amount demanded was attributed to the Wilson/Hickman 
property.

 
 

[¶27.]  Procedurally, the epoch progressed, and, 
after cross motions to dismiss and for summary judgment, the summary judgment 
was granted to Atria and against Diamond Hill and Sage on December 31, 1987, 
affording Atria a prior lien against the lenders on the property in the amount 
of $93,816.06. In arriving at its decision, the trial court determined that the 
lender did not have the required "legal interest" necessary to afford a right to 
notice,4 and that the W.A.S. bankruptcy petition 
by 11 U.S.C. § 362 (1982 ed. & Supp. IV 1986), as the automatic stay, and 11 
U.S.C. § 108 (1982 ed. & Supp. IV 1986), providing the thirty-day extended 
time, validated the lien position of the claimant against the lenders 
contravening the Wyoming mechanic's lien statute which necessitated institution 
of litigation within 180 days after the lien notice was 
filed.

 
 

[¶28.]  To synthesize this case and provide some 
reasonable meaning, it is observed that certain aspects are not in controversy. 
Aspects not in dispute are: (1) under Wyoming statutes, a lien claimant has a 
superior priority over an earlier real estate mortgage unless the mortgage was 
filed before work was started on the project, Sawyer v. Sawyer, 79 Wyo. 489, 335 P.2d 794 (1959); W.S. 29-1-305; (2) factually, the litigants did not contest the 
conclusion that Atria would properly obtain a priority for its lien for the 
architectural services if the lien was properly filed and the proceedings met 
the criteria of time limitations in pursuing litigation, see W.S. 29-2-106(a), 
filing of lien statement within 120 days after last work and W.S. 29-2-109, 
action commenced within 180 days after the filing;5 (3) timely filing of the lien was not in question on 
appeal and, as appellate issues, the parties have not presented the 
insufficiency of lien intent, impropriety of the missing notice of intent, or 
neglected post-filing notice of filed lien; and (4) the statutory limitation for 
institution of an action - the 180 days - equally applies to lien priority 
determination between interest claimants as it does between the mechanic's lien 
claimant and the owner. Seafirst Mortg. Corp. v. Specialty Concrete Const., 708 P.2d 1245 (Wyo. 1985).

 
 

[¶29.]  From these attributes now comes this case 
- whether, if the lien claimant neglectfully omits to include the mortgage 
holders in the foreclosure action, the statutory time to litigate priority 
extended when the owner filed bankruptcy after a default judgment is entered 
against him for lien foreclosure even 
though that final judgment of foreclosure exists before his bankruptcy is 
filed.

 
 

[¶30.]  Differing from the majority in what is 
considered to be a somewhat casual evaluation of the factual circumstances, it 
is perceived that between bankruptcy filing date, September 12, 1986, and before 
expiration of the mechanic's lien's statute of limitations time of 180 days, 
around October 24, 1986, the lien claimant could have done any one or a 
combination of at least four things to assure consideration of his priority 
claim against the first mortgagees: (1) move to vacate stay as to disassociated 
third party in order to permit complaint amendment as a process which is 
summarily granted in normal bankruptcy process; (2) file, in the bankruptcy 
foreclosure court, for leave to amend in the state court on the basis that the 
amendment would not be inhibited by the stay since no interest of the debtor was 
to be affected by the augmented litigation; (3) disregard bankruptcy and file 
the motion for leave to amend in the state court in contemplation that motion 
and prospective amendment which did not affect an enjoinable interest of 
bankruptcy; and/or (4) simplistically file a separate action against the 
mortgagees to establish mutual priorities as was done in Seafirst Mortg. Corp., 
708 P.2d 1245.

 
 

[¶31.]  Having pursued none of the four 
procedural opportunities, the time passed for the lien claimant on regular 
schedule and it lost any priority claim against the prior recorded real estate 
mortgage. The critical error made by the majority is failure to differentiate 
the effect within multi-party litigation of bankruptcy of only one litigant. It 
is not the litigation that is enjoined, it is a proceeding that adversely 
affects the debtor. The cases are near legion that other aspects of the pending 
state litigation can continue, when pursued to judgment only against co-makers, 
guarantors, or for determination of relative priorities between those parties 
not in bankruptcy, except as subject to explicit injunction of the bankruptcy 
court as may decisively affect the interest of the bankrupt. 2 W. Collier, 
Collier on Bankruptcy ¶ 362.02[1] (15th ed. 1988).

 
 

[¶32.]  It is in non-application of this theory 
in legal standard that the majority now directly reverses Hamel v. American 
Continental Corp., 713 P.2d 1152 (Wyo. 1986) and supercedes Seafirst Mortg. 
Corp., 708 P.2d 1245. The extensions of time provided in 11 U.S.C. § 108(c) 
(1982 ed. & Supp. IV 1986) simply do not apply to the neglect of the 
claimant to timely pursue his litigation with the lenders to establish relative 
priority where neither the lien claimant nor the lenders are the debtor in 
bankruptcy. 

 
 

[¶33.]  The posture adopted by this court in 
Seafirst Mortgage Corporation is instructive. Factually, the case is 
procedurally similar with a startling opposite appellate court conclusion. In 
Seafirst Mortg. Corp., 708 P.2d 1245, lien claimant filed suit to foreclose a 
lien and obtained a default judgment against the equity owner without giving 
notice to the mortgagee nor joining it in the legal action. As revealed by the 
briefs in the case, lien claimant moved to amend its action after default 
judgment was entered against the owner to add the lender as a litigant. The 
motion for leave to amend was denied. Hutnick v. U.S. 
Fidelity and Guar. Co., 47 Cal. 3d 456, 253 Cal. Rptr. 236, 763 P.2d 1326 (1988). 
Lien claimant then filed a declaratory judgment against Seafirst Mortgage 
Corporation to establish its priority. The trial court held, in overruling the 
defense of the lender, "that the statute of limitations was not available to 
appellant, the mortgage interest holder, inasmuch as it was not available to the 
original defendants." Seafirst Mortg. Corp., 708 P.2d  at 1247. This court, in 
reversing, perceived that "[w]e fail to see the relevancy of the availability or 
nonavailability of the original defendants" as in fact derived from the 
circumstance that a default judgment had already been granted so that the owner 
had no remaining litigable concern. Id. at 1247.

 
 

[¶34.]  Succinctly, this court then held on 
appeal that "[n]o action was brought within 180 days to foreclose the interest 
of appellant [mortgagee], and thus the lien cannot affect appellant's interest." 
Id. at 1247. 
With reversal of the summary judgment in favor of the lien claimant, we 
dispositively held that the mortgagee would have priority because of the lapsed 
lien. The declaratory judgment provided an approved contest, but the effort was 
untimely since the lien had lapsed in accord with the statutory 
limitation.

 
 

[¶35.]  The Seafirst Mortgage Corporation case 
and analysis was then followed by this court in Hamel, 713 P.2d 1152, where the 
owner was litigating with tradesmen employees of a subcontractor. The 
subcontractor filed bankruptcy and the employees claimed their period of 
limitation to pursue lien claims was extended by the bankruptcy stay order. The 
question of tolling the requirement of the 180 days for filing the foreclosure 
action was presented, and this court held that the mandatory time limitation was 
not tolled.

 
 

[¶36.]  Philosophically, this court discerned 
that:

 
 
     Since 1901, as in 
Wyman v. Quayle, 9 Wyo. 326, 63 P. 988 (1901), this Court has taken the position 
there enunciated that a mechanic's lien is a creature of statute, and however 
equitable the lien claim may be, it does not exist unless the one claiming the 
lien shows substantial compliance with all the essential requirements of the 
statute. Lien laws are strictly construed, and their scope cannot be extended. * 
* * It is essential that there be exact compliance with the time limits fixed by 
statute, * * * severe as that may seem to be on occasion.

 
 
Hamel, 713 P.2d  at 1153. Specifically presented by appellants in Hamel and as specifically 
rejected by this court in its decision was necessary party contractor status 
adopted in the case of Garbe Iron Works, Inc. v. Priester, 99 Ill. 2d 84, 75 
Ill.Dec. 428, 457 N.E.2d 422 (1983), which addressed the question of the 
contractor being an indispensable party so that the stay had some validity in 
delayed litigation. Since this court specifically rejected the ratio decidendi 
of Garbe Iron Works, Inc., in Hamel, it surely affords weak authority for 
present decision.

 
 

[¶37.]  Recognizing the posture of that case that 
a default judgment had been obtained by the lien claimant against the owner, the 
wisdom of Hamel, 713 P.2d  at 1154 appears:

 
 
     The automatic stay 
provisions apply to proceedings or acts against the debtor, the debtor's 
property, and the property of the estate but do not apply to acts against 
property which is neither the debtor's nor the estate's. Varisco v. Oroweat Food 
Company, 16 B.R. 634 (1981); Fintel v. State of Oregon, 10 B.R. 50 (1981); Administrator of 
Veterans' Affairs v. Sparkman, 9 B.R. 359 (1981). The automatic stay does not 
operate to prohibit action against a co-debtor nor affect the liability of a 
co-debtor not in bankruptcy. In re Van Shop, Inc., 8 B.R. 73 (1980). Something 
more than filing a bankruptcy petition must be shown in order that proceedings 
be stayed against nonbankrupt parties. Royal Truck & Trailer, Inc. v. 
Armadora Maritima Salvadorena, 10 B.R. 488 (1981). Where a pending action is not 
interfering with a bankruptcy, an automatic stay of such action would in no way 
foster the Bankruptcy Code's policy of preserving the debtor's insolvent estate 
for the benefit of creditors. Holtkamp v. Littlefield, 669 F.2d 505 (7th Cir. 
1982). [Emphasis added.]

 
 

[¶38.]  Rationally, in the present case, where 
judgment against the owner by the lien claimant has been obtained and the 
validity of the mortgage is not an issue, the only question remaining is whether 
the mechanic's lien or the filed mortgage comes first. The question is not if 
either party, separately, has a present bankruptcy proceeding unhindered right 
to satisfaction from the asset against which the secured claim is 
made.

 
 

[¶39.]  We are led in reference and citation to 
an array of cases presented by Diamond Hill and Sage or included in comment by 
the majority, only one of which has any contendable relationship to this 
presented issue involving the effect of a bankruptcy stay on a priority interest 
determination between two parties not involved in the bankruptcy. As generally 
unrelated in concept are: Isaacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 51 S. Ct. 270, 75 L. Ed. 645 (1931), unquestionable principle clearly 
established that bankruptcy abates foreclosure sale proceedings until 
disposition or approval of the bankruptcy court is given; Teachers Ins. and 
Annuity Ass'n of America v. Butler, 803 F.2d 61 (2nd Cir. 1986), bankruptcy 
court cannot entertain and decide traditional common law action; Lockhart v. 
Garden City Bank & Trust Co., 116 F.2d 658 (2nd Cir. 1940), validity date 
for mortgage was determinable for bankruptcy purposes from the date of filing 
bankruptcy; Martin v. Goggin, 107 Cal. App. 2d 688, 238 P.2d 84 (1951), lien 
claimant lost after obtaining a vacation of stay and permitting the statutory 
lien time to expire; stay as to bankrupt partnership did not constitute stay as 
to partners; Garbe Iron Works, Inc., 457 N.E.2d 422, directly contrary to Hamel 
on the basis that the contractor was a necessary party in subcontractor's action 
to enforce mechanic's lien; A. Musto Co., Inc. v. Pioneer Co-Op. Bank, 7 Mass. 
App. 926, 389 N.E.2d 1029 (1979), state court injunction against filing petition 
in bankruptcy with consequent contempt citation which was reversed on appeal; In 
re Bennett, 29 B.R. 380 (Bankr.D.C.Mich. 1981), with modification of stay issue 
between lender and debtor, collateral attack on plan denied; In re Victoria 
Grain Co. of Minneapolis, 45 B.R. 2 (Bankr.Minn. 1984), automatic stay did not 
prohibit filing of mechanic's lien statement to perfect mechanic's lien that had 
attached to debtor's real property prior to filing of a Chapter 11 petition; 
foreclosure was subject to injunction from adversary proceedings and time for 
filing complaint to foreclose as to debtor was extended; and In re Johnson, 8 B.R. 371 (Bankr.Minn. 1981), effect of automatic stay on redemption period, 
which case has, however, been generally reversed or superceded. See In re 
Martinson, 731 F.2d 543 (8th Cir. 1984); Johnson v. First Nat. Bank of 
Montevideo, Minn., 719 F.2d 270 (8th Cir. 1983), cert. denied 465 U.S. 1012, 104 S. Ct. 1015, 79 L. Ed. 2d 245 (1984); In re Houts, 23 B.R. 705 (Bankr.Mo. 1982), 
lien claimant filed motion to vacate stay, and before motion was determined, 
claimant filed lien which was followed by a suit for enforcement, the court 
found that filing enforcement action violated stay as a proceeding against the 
bankrupt; In re Bond Enterprises, Inc., 54 B.R. 366 (Bankr.N.M. 1985), failure 
to file a continuation statement after bankruptcy did not cause lapse as to 
administration since critical time for determination of the respective rights of 
debtor and its creditors is the date of filing the petition in bankruptcy; 
United States v. Sayres, 43 B.R. 437 (Bankr.D.C.N.Y. 1984), filing of federal 
income tax lien by debtor who had filed for bankruptcy after the initial tax 
lien was filed did not violate the automatic stay; In re Baldwin-United Corp., 
57 B.R. 759 (Bankr.S.D.Ohio 1985), third-party complaints against Chapter 11 
debtor would be enjoined; In re Marta Group, Inc., 33 B.R. 634, 642 (Bankr.Pa. 
1983), creditor bankruptcy action seeking injunction barring use or sale of the 
merchandise without modification of the automatic stay permitting repossession; 
the court then modified the stay to permit repossession since stay barred 
repossession of goods in the possession of the debtor so that the bankruptcy 
court left "to another tribunal the resolution of any competing claims between 
[creditors]"; and Grotting v. Hudson Shipbuilders, Inc., 85 B.R. 568, 570 
(Bankr.W.D.Wash. 1988), issue of statute of limitations to file an action for 
personal injury and whether the automatic stay tolled or whether 11 U.S.C. § 
108(c) (1982 ed. & Supp. IV 1986) extended; the court rejected Garbe Iron 
Works, Inc., 457 N.E.2d 422, and held that the bankruptcy act did not have the 
effect of tolling the running of statute of limitations "but rather extends the statute of limitations until 
30 days after the lifting or expiration of the automatic stay" as to the debtor. [Emphasis in 
original.]

 
 

[¶40.]  Cases cited with somewhat closer 
relationship but not realistic precedent include In re Bain, 64 B.R. 581 
(Bankr.W.D.Va. 1986), where contractor completed construction after bankruptcy 
and then filed a mechanic's lien and followed with a suit to foreclose. Found in 
contempt by the action to enforce the mechanic's lien, the court found that it 
did not need to file the action by virtue of the extension of 11 U.S.C. § 108(c) 
(1982 ed. & Supp. IV 1986) as "imposed by state law on a claim against a 
debtor who enters bankruptcy as tolled during the bankruptcy proceedings." In re 
Bain, 64 B.R.  at 583-84. The district court reversed the bankruptcy court in its 
award of attorneys' fees. Again, that case has no relevance to our instant case 
since a judgment against the debtor was here obtained before the bankruptcy proceeding was 
instituted. No action was available or required as a suit against the debtor in the present case 
as was the case in Bain.

 
 

[¶41.]  Also cited was Fortier v. Dona Anna Plaza 
Partners, 747 F.2d 1324 (10th Cir. 1984), where shopping center buyers brought 
action against developers/sellers for negligence and breach of contract in 
connection with parking lot problems. Architect Armstrong filed bankruptcy five 
days before the trial was to begin in the United States Bankruptcy Court for the 
District of California. The damage action was removed by plaintiffs to the 
bankruptcy court for the district of New Mexico where the automatic stay was 
lifted and the trial was permitted to proceed. The Tenth Circuit first 
determined that the automatic stay did not deter the litigation as to the 
co-defendants of the bankrupt. "There is nothing in the statute which purports 
to extend the stay to causes of action against solvent co-defendants of the 
debtor." Id. 
at 1330. Since the debtor was not an appellant, the judgment against him was not 
an issue and the judgment against co-obligors was generally affirmed on the 
basis that the automatic stay did not deter proceeding. This decision 
sidestepped issues raised of the validity generally by virtue of the 
invalidating decision of the United States Supreme Court in Northern Pipeline 
Const. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 102 S. Ct. 2858, 73 L. Ed. 2d 598 (1982).

 
 

[¶42.]  Realistically, of all the citations 
provided, the one case which provides relevance, although persuasively 
distinguishable, is In re Paul, 67 B.R. 342 (Bankr.D.Mass. 1986). The court 
addresses the expiration of levy attachment lien as occurring during bankruptcy. 
The court analogizes with decisions considering the creditors' time to file a 
continuation statement which hold that the extension request is not required 
during bankruptcy since the time is tolled. Noting the rule of Isaacs, 282 U.S.  at 738, 51 S. Ct.  at 272 that 
"valid liens existing at the time of the commencement of the bankruptcy 
proceeding are preserved, * * *" the Massachusetts Bankruptcy Court in Paul, 67 B.R.  at 345 concluded that, without extension filing, the status was protected 
and frozen. Acceptance of the principles of the continuation statement cases of 
the status freeze should not persuasively include priority determinations 
between disassociated parties where the claimed interest of the debtor has been 
subjected to a default judgment. The Paul court distinguished between rights of 
the debtor to redeem and the validity of a creditor to claim in secured status. 
To the conjectural extent that this one case represents support for the majority 
opinion, since nominally similar, it alone does not suffice to determine our 
present dilemma in view of the stated prior attitude and precedent of this court 
applicable to mechanic's lien claims. I would follow Seafirst Mortgage 
Corporation and Hamel and not In re Paul in application and 
persuasion.

 
 
While no 
specific exception to the automatic stay will be applicable in such 
circumstances, bankruptcy courts have traditionally granted relief from the stay 
promptly where the bankruptcy court is unable to provide complete relief and 
where the debtor is a nominal defendant. The automatic stay will not, however, 
operate to protect codefendants in litigation where liability is joint and 
several * * *.

 
 
2 W. 
Collier, Collier on Bankruptcy, supra, at 362-29 to 362-30 (footnote 
omitted).

 
 

[¶43.]  It is of the essence of bankruptcy law 
that 11 U.S.C. § 362 (1982 ed. & Supp. IV 1986) provides the automatic stay 
which operates against proceedings that adversely affect the assets of the 
bankruptcy estate or prevent recovery of a claim against the debtor. See 2 W. 
Collier, Collier on Bankruptcy, supra, at ¶ 362.04[5], addressing "Acts to 
Create, Perfect or Enforce any Lien Against Property of the Debtor." This 
general principle is recognized in the decision of the bankruptcy court in In re 
Cloud Nine, Ltd., 3 B.R. 202 (Bankr.N.M. 1980), when the court observed that the 
stay applied to efforts of creditors directed against the assets of the 
bankruptcy estate and did not preclude creditor action against other parties who 
have not filed proceedings in the court.

 
 
     The Court is aware 
that some of the other parties in the state court proceeding may be attempting 
to hide behind the relief afforded by the stay. This Order is not to be 
interpreted as a shield precluding Plaintiffs and other parties from raising any 
issues they may have against each other which do not affect the 
Debtor.

 
 

Id. at 204. To 
similar effect, see Matter of Ricks, 26 B.R. 134 (Bankr.Idaho 1983); In re 
Larmar Estates, Inc., 5 B.R. 328 (Bankr.N.Y. 1980), in holding that automatic 
stay provisions did not protect guarantors of loans made to debtors; In re 
Fintel, 10 B.R. 50, 52 (Bankr.Or. 1981), the stay does not preclude actions 
against property which is not part of the bankruptcy estate or to stay action to 
enforce dischargeable debts against third parties. "Third party liability is not affected by the 
bankruptcy." [Emphasis added]; and In re Sparkman, 9 B.R. 359, 362 
(Bankr.Pa. 1981), "[a]lthough the debtor's other contentions have the sound of 
validity, his probata fell far short of his allegata" where the debtor lacked 
equity after sale and foreclosure; the court held that the stay did not operate 
to prohibit the act of the sheriff in recording the foreclosure deed. The case 
determined on the basis that the debtor has no interest in the property after 
equity is exhausted and foreclosure has been conducted.

 
 

[¶44.]  A not totally dissimilar circumstance to 
the present case is found in the bankruptcy court proceedings in In re C.C.L. 
Const., Inc., 32 B.R. 693 (Bankr.Ill. 1983). In simplification of the complex 
facts, the apparent owner contracted with subcontractor for work and thereafter 
assigned his interest in the property before filing bankruptcy. The holder of a 
first mortgage instituted foreclosure and the subcontractor did not answer in 
the state court foreclosure but filed a proof of claim in bankruptcy. The 
subcontractor was defaulted in the state court action and attacked in bankruptcy 
the jurisdiction of the state court where the foreclosure action was conducted. 
The subcontractor was denied relief by the bankruptcy court on the basis that he 
should have either or both protected his rights in state court or sought 
protection from the bankruptcy court through a motion for a restraining order. 
The relevance to this case is that under those circumstances, the debtor had no 
remaining real interest in the property leaving only the two claimants to be 
viable litigants - the mortgage holder and lien claimant. There was no basis in 
either bankruptcy stay deterrence or property interest 
status.

 
 

[¶45.]  In the present case, when the debtor did 
default, which established the validity of the mechanic's lien claim, it 
reserved no further interest to it in how lien claim priorities were to be 
litigated by others. Money amount and right to foreclose for the lien claimant 
was then fixed in the property. Allowing the state litigation to proceed by 
amendment or separate action would not have changed the relative status of the 
two creditors except to each other and certainly not as adversely affecting any 
retained interest of the owner. See Matter of Holtkamp, 669 F.2d 505, 508 (7th 
Cir. 1982), "where, as here, the pending action is neither connected with nor 
interfering with the bankruptcy proceeding, the automatic stay in no way fosters 
Code policy." See also General Motors Acceptance Corporation v. Yates Motor 
Company, Inc., 159 Ga. App. 215, 283 S.E.2d 74 (1981), where co-obligor, GMAC, 
failed to answer state court suit after partner filed bankruptcy. The validity 
of the resulting judgment against GMAC was affirmed on appeal by relation that 
the proceedings were stayed against the debtor but not extended to include 
co-defendants.

 
 

[¶46.]  It is surprising that after this somewhat 
substantive review of available cases of current vintage, the most logically 
applicable cases steadfastly remain - Seafirst Mortgage Corporation and Hamel. 
These cases, in conjunction with the body of law relating to bankruptcy, reflect 
that in no regard was action by Atria deterred by bankruptcy. Atria had 
available, as a separate suit, amendment within the somewhat sterile confines 
where a default judgment had been entered or, if with question, by first a 
motion to vacate stay in the bankruptcy court. Lacking any affirmative action as 
to the opportunities available to the litigant to protect its interests, federal 
law clearly assures that the Wyoming statute of limitations ended 
enforcement rights upon the expiration of the 180 days.

 
 

[¶47.]  The decision of the trial court was wrong 
as is now the majority in confirming decision which mutates or cremates Hamel 
and Seafirst Mortgage Corporation. Consequently, I respectfully 
dissent.

 
 
FOOTNOTES

 
 

1 Present 
appellant counsel did not handle trial court proceedings.

 
 

2 Although 
the record reflects an installment contract between Hickman as vendor and Wilson 
as vendee, the relationship of that contract to the parcel "owned" by W.A.S. is 
not discernible from the record. The description on the mortgage cannot be 
completely related to the description of the W.A.S. property but clearly does 
not include the property of Wilson/Hickman.

 
 
     The judgment granted 
for the lien was $93,816.06 and the alleged amount due in the complaint for the 
Wilson/Hickman property was $8,098.95 and for the W.A.S. property, the amount 
due was $67,263.86. Five thousand dollars was paid on the claim as "representing 
fifty percent of the initial payment due for stipulation agreement to postpone 
execution of default judgment dated 11/24/86." The escalation of amounts 
appeared basically to have encompassed legal fees and interest. Lack of lien 
amount contest at trial or by appeal, conjecturally, lacking record explanation, 
may be explainable as an "it doesn't matter" conclusion. With real estate values 
declining and question existing of how much Atria's activities increased 
foreclosure marketability, if any, the lender may face economics that no 
litigative viability existed to contest the compilation of the 
claim.

 
 

3 This was 
the first time since the proceedings had started by notice of intent that any 
action or notice as involving the holders of the first mortgage had been given 
or pursued. With the default judgment against the owner, which justified 
foreclosure and dismissal of the bankruptcy petition, a completely new issue was 
introduced into the then completed litigation for the purpose of determining 
relative priority.

 
 

4 In my 
opinion, this conclusion was also clearly erroneous within Wyoming mechanic's lien 
foreclosure criteria but is not presented here for review. See W.S. 
29-1-201(a)(v)(A), definition of owner, and W.S. 29-2-107, notice of intention 
to file lien. See also W.S. 29-1-307, notice of foreclosure to prior perfected 
lienholders; effect of failure to notify.

 
 

5 W.S. 
29-2-109 provides:

 
 
     All actions to 
foreclose or enforce a lien under this chapter shall be commenced within one 
hundred eighty (180) days after the filing of the lien statement. No lien shall 
continue to exist except by virtue of the provisions of this chapter for more 
than one hundred eighty (180) days after the lien is filed unless an action to 
foreclose the lien is instituted.