Case Title: IN THE MATTER OF KITE RANCH, LLC, a Wyoming limited liability company: GALEN DUNMIRE and REBECCA DUNMIRE, husband and wife, as joint tenants V. POWELL FAMILY OF YAKIMA, LLC, a Washington limited liability company, DOUGLAS BRICKMAN, individually, and DOUGLAS BRICKMAN and ANNE BRICKMAN, husband and wife and as joint tenants; IN THE MATTER OF KITE RANCH, LLC, a Wyoming limited liability company: JAMES HEDSTROM and DONNA HEDSTROM, husband and wife, as joint tenants V. POWELL FAMILY OF YAKIMA, LLC, a Washington limited liability company, DOUGLAS BRICKMAN, individually, and DOUGLAS BRICKMAN and ANNE BRICKMAN, husband and wife and as joint tenants

Citation: 

Docket Number: S-07-0196

State: wyoming

Court: Wyoming Supreme Court

Date: 2008-04-08T00:00:00Z

Document:
IN THE MATTER OF KITE RANCH, LLC, a Wyoming limited liability company: GALEN DUNMIRE and REBECCA DUNMIRE, husband and wife, as joint tenants V. POWELL FAMILY OF YAKIMA, LLC, a Washington limited liability company, DOUGLAS BRICKMAN, individually, and DOUGLAS BRICKMAN and ANNE BRICKMAN, husband and wife and as joint tenants; IN THE MATTER OF KITE RANCH, LLC, a Wyoming limited liability company: JAMES HEDSTROM and DONNA HEDSTROM, husband and wife, as joint tenants V. POWELL FAMILY OF YAKIMA, LLC, a Washington limited liability company, DOUGLAS BRICKMAN, individually, and DOUGLAS BRICKMAN and ANNE BRICKMAN, husband and wife and as joint tenants2008 WY 39181 P.3d 920Case Number: S-07-0196, S-07-0197Decided: 04/08/2008
APRIL 
TERM, A.D. 2008

 
 
IN 
THE MATTER OF KITE RANCH, LLC, a Wyoming limited liability 
company:GALEN DUNMIRE and REBECCA DUNMIRE, husband and wife, as joint 
tenants,Appellants(Plaintiffs),v.POWELL FAMILY OF 
YAKIMA, LLC, a 
Washington limited liability company, DOUGLAS BRICKMAN, individually, and 
DOUGLAS BRICKMAN and ANNE BRICKMAN, husband and wife and as joint 
tenants,Appellees(Defendants).

 
 
IN 
THE MATTER OF KITE RANCH, LLC, a Wyoming limited liability 
company:JAMES HEDSTROM and DONNA HEDSTROM, husband and wife, as joint 
tenants,Appellants(Plaintiffs),v.POWELL FAMILY OF 
YAKIMA, LLC, a 
Washington limited liability company, DOUGLAS BRICKMAN, individually, and 
DOUGLAS BRICKMAN and ANNE BRICKMAN, husband and wife and as joint 
tenants,Appellees(Defendants).

 
 
Appeal 
from the DistrictCourtofAlbanyCounty

The 
Honorable Jeffrey A. Donnell, Judge

 
 
Representing 
Appellants Galen Dunmire and Rebecca Dunmire:

M. 
Gregory Weisz of Pence and MacMillan LLC, Laramie, Wyoming.  

 
 

Representing 
Appellants James Hedstrom and Donna Hedstrom:

 William H. Vines of Jones, Jones, Vines 
& Hunkins, Wheatland, 
Wyoming. 

 
 
Representing 
Appellees Powell Family of Yakima, LLC, Douglas Brickman and Anne 
Brickman:

F. Scott 
Peasley and Frank D. Peasley of Peasley Law Office, Douglas, Wyoming.         
Argument by Mr. Frank D. Peasley.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

 
 

KITE, Justice.

            

[¶1]      All of the 
parties to this appeal are members of Kite Ranch, LLC (Kite Ranch), a Wyoming limited liability company, which owns a ranch in 
AlbanyCounty.  Galen and Rebecca Dunmire (Dunmires) and 
James and Donna Hedstrom (Hedstroms) filed a declaratory judgment action seeking 
a determination of the parties' respective rights in the company.  Powell Family of Yakima, LLC (Powell) 
and Douglas and Anne Brickman (Brickmans) petitioned the district court for a 
preliminary injunction granting Powell the right to manage Kite Ranch during the 
pendency of the litigation and enjoining Dunmires and Hedstroms from interfering 
with its management of the limited liability company.  The district court granted and 
subsequently amended a preliminary injunction in favor of Powell and 
Brickmans.  Dunmires and Hedstroms 
appealed claiming the district court improperly amended the preliminary 
injunction without allowing them to be heard and the amended preliminary 
injunction was improper because it did not require Powell to preserve the status 
quo of the limited liability company during the pendency of the litigation.  We conclude the district court properly 
amended the order because it did not substantively change the preliminary 
injunction, but simply corrected a clerical error.  In addition, we detect no abuse of 
discretion in the injunctive relief granted by the district court.  Consequently, we affirm.  

 
 
ISSUES

 
 
[¶2]      Dunmires and 
Hedstroms phrase the issues on appeal as:

 
 

I.                    
Did 
the district court abuse its discretion by amending a preliminary injunction 
without a hearing and before allowing plaintiffs to respond to defendants' 
motion to amend the preliminary injunction?

 
 

II.                  
Does 
the amended preliminary injunction improperly fail to require Defendant Powell 
to preserve the status quo and impermissibly allow Powell to affect the parties' 
substantive rights during the pendency of the action?

 
 
Powell 
and Brickmans do not set forth a separate statement of issues.  

 
 
FACTS

 
 
[¶3]      In 2001, 
Dunmires, Hedstroms and Brickmans discussed purchasing a ranch in AlbanyCounty.  The purchase price of the ranch was $ 
1.1 million.  They approached Powell 
about providing funds to help with the purchase.  Powell agreed to provide $300,000 toward 
the purchase price of the ranch.  

 
 
[¶4]      The parties 
secured a loan from First National Bank (FNB) for the bulk of the purchase 
price.  The FNB loan was evidenced 
by a promissory note and mortgage on the ranch property.  All members, except Powell, personally 
guaranteed the note, and Dunmires supplied additional real property to secure 
the FNB loan.  FNB required the 
borrowers to form a business entity as a condition of the loan and to limit 
Powell's ownership in the new entity to a "maximum of 20%."  FNB also stated that the equity Powell 
provided could "not be accounted for through a note or mortgage."    

 
 
[¶5]      Hedstroms and 
Brickmans executed articles of organization for Kite Ranch on December 26, 
2001.  Dunmires, Brickmans, 
Hedstroms and Powell contributed initial capital of $1,000, with 20 percent 
coming from Powell and 26.66 percent from each of the other members.  The articles were filed with the Wyoming 
Secretary of State's office.  
However, the members did not execute an operating agreement, even though 
proposed agreements were apparently circulated among them.    

 
 
 [¶6]     Kite Ranch operated 
as a cattle ranch over the next few years, leasing its property for grazing 
purposes.  All of the members except 
Powell met periodically to discuss business matters, although the meetings were 
not formal as no official notice was given prior to the meetings and minutes 
were not kept.  During this time, 
approximately $220,000 of Powell's equity contribution was returned to it, 
leaving it with a capital account of approximately $80,000.  Dunmires provided approximately $415,000 
in funds to Kite Ranch during those years.  
The company's financial records indicate that Dunmires' contributions 
were carried as loans to the company.  
The company's accountant testified that Dunmires directed her to 
designate the funds as loans.      

 
 
[¶7]      In 2006, Powell 
and Brickmans became concerned about the management of the company.  Powell and Hedstroms executed 
contradictory leases on behalf of the company, leasing the ranch property to 
different individuals for the 2007 grazing season.  In addition, the FNB note fell into 
default when it matured on November 1, 2006.    

 
 
[¶8]      On January 12, 
2007, Dunmires and Hedstroms filed a complaint for a declaratory judgment 
against Powell and Brickmans.  They 
also named the limited liability company as an involuntary plaintiff.  They sought a declaration of the 
parties' respective interests, rights and responsibilities with respect to the 
limited liability company.  Powell 
and Brickmans responded with a petition for a temporary restraining order and 
preliminary injunction giving Powell management authority over the company and 
enjoining Dunmires and Hedstroms from exercising any management authority.    

 
 
[¶9]      The district 
court denied the application for a temporary restraining order, but set a 
hearing on the petition for a preliminary injunction.  In the meantime, Dunmires and Hedstroms 
filed a petition for appointment of a receiver to manage Kite Ranch.  The district court heard the two pending 
motions on April 12, 2007.  After 
the hearing, the district court issued a decision letter, generally granting 
Powell's and Brickmans' petition for a preliminary injunction and denying 
Dunmires' and Hedstroms' petition for appointment of a receiver.  The parties could not agree on the 
wording of an order, and Dunmires and Hedstroms filed an objection to Powell's 
and Brickmans' proposed order, claiming the powers granted to Powell were overly 
broad.  Among other things, they 
were concerned that Powell would sell the ranch property and/or change the 
members' rights with respect to the company by amending the articles of 
organization or adopting an operating agreement.  The district court finally entered 
Powell's and Brickmans' version of the order, but interlineated some 
restrictions on Powell's management power. 

 
 
[¶10]   The interlineated language created 
an inconsistency in the order  the right to mortgage and/or lease the property 
was both granted and denied.  
Consequently, Powell and Brickmans filed a motion to amend the order to 
clarify their right to mortgage and lease the property.  The district court granted the requested 
relief without holding a hearing or waiting for Dunmires and Hedstroms to reply 
to the motion to amend the order.  Dunmires and Hedstroms appealed from the 
amended order.    

 
 
DISCUSSION 

 
 
            
1.         Procedure for Amendment of Preliminary 
Injunction Order           

 
 
[¶11]   The original order granting 
Powell's and Brickmans' petition for a preliminary injunction stated in relevant 
part:

 
 
2.         
As required in the absence of an operating agreement by Wyo. Stat. Ann. § 
17-15-116 (Lexis Nexis 2005), the Powell Family of Yakima, LLC, as the only 
member of Kite Ranch, LLC with a positive capital account and an initial capital 
contribution of Three Hundred Thousand Dollars ($300,000.00) be and the same is 
awarded exclusive management authority of Kite Ranch, LLC, including those 
powers and rights specifically conferred by Wyo. Stat. Ann. § 17-15-104 (Lexis 
Nexis 2005),1 until urther order of this Court, 
except §17-15-104(a)(iii); (a)(x); (a)(xii). [Judge's initials] 

 
 
(footnote 
added).  The underlined part of the 
order was handwritten by the district judge, presumably in response to Dunmires' 
and Hedstroms' objections to Powell's and Brickmans' proposed order.  

 
 
[¶12]   The powers granted to Powell under 
the original order included those set out in Wyo. Stat. Ann.  §§ 17-15-104 (a)(ii) and (vi) (LexisNexis 
2005) which allowed it to lease and/or mortgage the 
property:

 
 
 (ii) Purchase, take, receive, lease or 
otherwise acquire, own, hold, improve, use and otherwise deal in and with real 
or personal property, or an interest in it, wherever situated; 
[and]

 
 
. . . 

 
 
(vi) 
Make contracts and guarantees and incur liabilities, borrow money at such rates 
of interest as the limited liability company may determine, issue its notes, 
bonds and other obligations and secure any of its obligations by mortgage or 
pledge of all or any part of its property, franchises and 
income[.]

 
 
[¶13]   The interlineated language, 
however, denied Powell the powers under § 17-15-104(a) to:

(iii) 
Sell, convey, mortgage, pledge, lease, exchange, transfer and otherwise dispose 
of all or any part of its property and assets;

 
 
. . 
.

 
 
            
(x) Make and alter operating agreements, not inconsistent with its 
articles of organization or with the laws of this state, for the administration 
and regulation of the affairs of the limited liability company; 
[and]

 
 
. . 
.

 
 
            
(xii) Cease its activities and surrender its certificate of 
organization[.]

                        

Thus, 
the original order was ambiguous because it granted Powell the power to lease 
and mortgage the company property under § 17-15-104 (a)(ii) and (vi), but denied 
it those powers when it withheld authority under § 17-15-104(a)(iii).     

 
 
[¶14]   Seeking to clarify Powell's rights 
to mortgage and lease the ranch property, Powell and Brickmans moved to amend 
the order.  The district court 
entered an amended order which stated, in relevant part:

 
 
2.         
As required in the absence of an operating agreement by Wyo. Stat. Ann. § 
17-15-116 (LexisNexis 2005), the Powell Family of Yakima, LLC, as the only 
member of Kite Ranch, LLC with a positive capital account, and an initial 
capital contribution of Three Hundred Thousand Dollars ($300,000.00) be and the 
same is awarded exclusive management authority of the LLC, including those 
rights and powers specifically conferred by Wyo. Stat. Ann. § 17-15-104 (Lexis 
Nexis 2005), until further Order of this Court, except §17-15-104(a)(x), 
(a)(xii), and §17-15-104(a)(iii) to the limited extent that it relates to 
"selling" or "conveying" LLC property.  
 

 
 
[¶15]   The district court entered the 
amended order without holding a hearing. Dunmires and Hedstroms were unaware of 
the entry of the amended order and filed a response to Powell's and Brickmans' 
motion.  They agreed that Powell 
should be allowed to lease the property under certain conditions but objected to 
Powell's ability to mortgage the property without the consent of all of the 
members.  After becoming aware that 
the district court had already entered the amended order, Dunmires and Hedstroms 
appealed claiming the district court abused its discretion and violated their 
right to due process of law by amending the order without giving them an 
opportunity to be heard.  

 
 
[¶16]   Although Powell's and Brickmans' 
motion to amend cited W.R.C.P. 59(e),2 they assert on appeal that the 
district court had the power, under W.R.C.P. 60(a), to correct the ambiguity in 
the order without holding a hearing.  
That rule states in pertinent part:

 
 

(a)               
Clerical 
Mistakes.  Clerical mistakes in judgments, orders 
or other parts of the record and errors therein arising from oversight or 
omission may be corrected by the court at any time of its own initiative or on 
the motion of any party and after such notice, if any, as the court orders.  

 
 

See, Glover v. Crayk, 2005 WY 143, ¶¶ 6, 8, 
122 P.3d 955, 957 (Wyo. 2005) (construing proceeding as one properly brought 
under Rule 60(a) although the record was unclear as to the "exact nature of the 
proceedings below").  As is clear 
from the plain language of the rule, if the district court was truly just 
correcting a clerical error, it could do so at any time and no notice or hearing 
was required.  In other words, 
provided the district court's action involves only correction of a clerical 
mistake, no due process violation occurs when that correction is made without 
giving the parties the opportunity to be heard.  

 
 
[¶17]   In Glover, ¶ 9, 122 P.3d  at 958, this Court 
stated that in reviewing a district court's application of Rule 60(a), we apply 
a two-part process.  First, we 
determine whether the correction or clarification related to a clerical or 
judicial mistake.  We then "review 
the district court's order to ascertain whether it clarified or modified the 
original judgment."  Id.  
These questions involve issues of law that we review de novo.   Id.  

 
 
[¶18]   In Spomer v. Spomer, 580 P.2d 1146, 1148-49 
(Wyo. 1978), 
we discussed the process for determining whether modification of a court order 
was proper under Rule 60(a). 

 
 
The 
primary focus in the discussion of Rule 60(a) must center on its scope.  We think it clear that this rule was not 
designed as a substitute for appeal, nor to affect substantive portions of a 
judgment or decree.  It is not 
intended to correct judicial, as opposed to clerical, error.  The problem is essentially one of 
characterization.  

 
 
Several 
tests have been suggested to facilitate the distinctions.  We feel all in essence encompass the 
same rule.  The key factor is 
whether or not the court reached a decision in the intentional or purposeful 
exercise of its judicial function.  
If the pronouncement reflects a deliberate choice on the part of the 
court, the act is judicial; errors of this nature are to be cured by 
appeal.  . . .  [T]he central purpose of Rule 60(a) is 
to effectuate the contemporaneous intent of the court and to ensure that the 
judgment reflects that intent.  As 
the Tenth Circuit stated in Blankenship 
[v. Royalty Holding Co., 202 F.2d 77, 79 (10th Cir. 1953)]:

 
 
"Courts 
possess the inherent power to correct errors in the records evidencing the 
judgment pronounced by the court so as to make them speak the truth by actually 
reflecting that which was in fact done.  
They do not, however, possess the power to correct an error by the court 
in rendering a judgment it did not intend to render and by such order change a 
judgment actually but erroneously pronounced by the court to the one the court 
intended to record.  * * * 
"

 
 
In 
keeping with this purpose to effectuate the intent of the court, we feel that 
60(a) is also designed to clarify as well as correct.  In this respect, we feel the rule can 
properly be utilized to dispel ambiguities that exist in the record, whether 
that ambiguity is patent or latent.  Where the intention of the court is not 
evident or apparent,

 
 
Rule 
60(a) can be used to clarify the meaning to conform to the contemporaneous 
intentions of the court as then expressed. 

 
 

Id. (some 
citations omitted).  

 
 
[¶19]   We have also discussed the power to 
correct clerical errors in the context of nunc pro tunc orders.  A nunc pro tunc order may be entered in 
cases "where it is necessary to make the judgment speak the truth, and cannot be 
used to change the judgment."  Eddy v. First Wyoming Bank, N.A.-Lander, 
713 P.2d 228, 234 (Wyo. 1986).  See also, Christensen v. State, 854 P.2d 675, 682 
(Wyo. 
1993).    

 
 
[¶20]   The district court's decision 
letter issued prior to the entry of the original preliminary injunction order is 
important to our conclusion that the change the court made to the final  order was clerical.  A fair reading of the decision letter, 
which was nine pages long and comprehensively reviewed the issues in dispute at 
the injunction hearing, indicates that the immediate management needs for Kite 
Ranch included dealing with the FNB mortgage and note, which was in default at 
the time of the hearing, and arranging for the ranch lands to be leased.  Thus, the district court clearly intended 
that Powell have the right to mortgage and lease the property as part of its 
management authority and duties during the term of the preliminary 
injunction.  In fact, the decision 
letter stated that Powell was entitled to all of the powers set out in § 
17-15-104.  The written order which 
both granted and denied Powell the authority to mortgage and/or lease the 
property did not accurately reflect the district court's intent.  It was, therefore, simply a clerical 
matter to correct the order by clarifying that Powell had those management 
rights.

 
 

2.                  
Terms of 
the Preliminary Injunction

 
 
[¶21]   Actions for injunctive relief are 
authorized by Wyo. Stat. Ann. §§ 1-28-101 et seq. (LexisNexis 2007); however, they 
are, essentially, "requests for equitable relief which are not granted as a 
matter of right but are within the lower court's equitable discretion."  Weiss v. Pedersen, 933 P.2d 495, 498 
(Wyo. 1997), 
overruled on other grounds by White v. 
Allen, 2003 WY 39, 65 P.3d 395 (Wyo. 2003).  See also, Rialto Theatre, Inc. v. Commonwealth 
Theaters, Inc., 714 P.2d 328, 332 (Wyo. 1986).  Because the district court has equitable 
discretion in determining whether to grant injunctive relief, we review its 
decision for abuse of discretion, keeping in mind that injunction is an extreme 
remedy and the court should "proceed with caution and deliberation before 
exercising the remedy."  Id.  
See also, Polo Ranch Co. v. 
City of Cheyenne, 2003 WY 15, ¶ 29, 61 P.3d 1255, 1265 (Wyo. 
2003).

 
 
[¶22]   To justify an injunction, there 
must be a showing the potential harm is irreparable and there is no adequate 
remedy at law to compensate for the harm.  
Weiss, 933 P.2d  at 498.  
"The traditional office of injunction has been to protect property 
rights.'"  Id. at 499, quoting 42 Am. Jur. 2d Injunctions § 69 at 814 (1969).  Moreover, injunctions are intended to 
prevent future harms, Rialto Theatre, 
714 P.2d  at 333, and the "purpose of the preliminary injunction is to 
preserve the status quo until the rights of the parties can be fairly inquired 
into and determined under equitable conditions and principles."  Simpson v. Petroleum, Inc., 548 P.2d 1, 
3 (Wyo. 
1976).       
 

 
 
[¶23]   Powell's and Brickmans' petition 
for a preliminary injunction requested that Powell be granted management 
authority over Kite Ranch during the pendency of the action and Dunmires and 
Hedstroms be enjoined from exercising management authority over the company or 
conducting company meetings.  Powell 
claimed it was entitled to manage the limited liability company under Wyo. Stat. 
Ann. § 17-15-116 (LexisNexis 2005) because there was no operating agreement and 
it had the only positive capital account.    

 
 
[¶24]   Section 17-15-116 
states:

 
 
Management 
of the limited liability company shall be vested in its members, which unless 
otherwise provided in the operating agreement shall be in proportion to their 
contribution to the capital of the limited liability company, as adjusted from 
time to time to properly reflect any additional contributions or withdrawals by 
the members;  however, if provision 
is made for it in the articles of organization, management of the limited 
liability company may be vested in a manager or managers who shall be elected by 
the members in the manner prescribed by the operating agreement of the limited 
liability company.  If the articles 
of organization provide for the management of the limited liability company by a 
manager or managers, unless the operating agreement expressly dispenses with or 
substitutes for the requirement of annual elections, the manager or managers 
shall be elected annually by the members in a manner provided in the operating 
agreement.  The manager or managers, 
or persons appointed by the manager or managers, shall also hold the offices and 
have the responsibilities accorded to them by the members and set out in the 
operating agreement of the limited liability company.

 
 
[¶25]   The evidence at the preliminary 
injunction hearing established that Powell is a member of Kite Ranch and the 
company's financial and tax records showed that Powell was the only member with 
a positive capital account.3  The district court's decision letter 
accurately describes the evidence presented at the preliminary injunction 
hearing:

 
 
            
First, it is clear that Powell Family is a member of the LLC.  It was named as such in the Articles of 
Organization, which Articles remain in effect to this day.  It was a named member in the loan 
authorization form that Dunmire signed.  
Every federal income tax return filed since the LLC was formed has named 
Powell Family as a member.  Simply 
stated, the evidence on this point is overwhelming and virtually 
uncontradicted.  The Court concludes 
that Powell Family is, in fact, a member of the LLC.

 
 
            
The evidence concerning the nature of Powell Family's initial 
contribution to the LLC is also straightforward.  While it appears there may have 
initially been some discussion of a loan from Powell Family to the LLC, it is 
clear that this soon changed.  
Powell Family indicated to First National Bank on November 26, 2001 that 
it intended to acquire a "minority equity investment" in the LLC that was to be 
formed.  Two days later, First 
National required as a contingency for its loan [to the LLC] that Powell 
Family's ownership interest in the LLC could not exceed 20% and that its 
contribution could not be accounted for through a note or mortgage. [A footnote 
inserted by the district court stated:  
Clearly, the bank was requiring that Powell Family hold an equity 
interest in the LLC and that its contribution must, therefore, be treated as a 
capital contribution rather than a debt.]  
No notes, mortgages, security agreements, or other written evidence of 
debt were ever executed in favor of Powell Family by the LLC.  Income tax returns for every year since 
the formation of the LLC have treated this contribution as a capital 
contribution.  There is no evidence 
that would indicate there was ever any agreement to pay any interest on any 
debt, and there is no evidence whatever to indicate that the LLC ever treated 
any payments to Powell Family as either debt or interest payments.  The LLC's accountant testified that she 
has always been instructed to treat this contribution as capital, and an expert 
accountant testified that he could see no justification in the records for 
treating this contribution as anything but capital.  Finally, there is no credible evidence 
by which this Court might reasonably conclude that this contribution was 
intended to be a loan.  It is the 
Court's conclusion, therefore, that the initial contribution of $300,000 by 
Powell Family to the LLC was a capital contribution and that it should be 
treated as such. [A footnote inserted by the district court states:  It should be noted that Dunmire has 
contributed considerable money to the LLC since its formation as well.  However, it was his request that his 
contributions be considered and treated as debt rather than capital 
contribution, and the accountant has complied with this request.  Dunmire testified he did not realize 
there was a difference between a loan and a capital contribution and, because he 
hoped he would eventually recover his money, he asked that it be treated as 
debt.  The end result has been an 
LLC that is long on debt and short on capital.]

 

There 
was evidence presented indicating Powell referred to its contribution as a loan 
from time to time and had, at some point, prepared an amortization schedule 
showing its contribution as earning interest.  Nevertheless, as the district court 
indicated, the documents actually adopted by the company clearly showed that 
Powell's investment was capital rather than a loan.  

 
 
[¶26]   The company records established 
that Powell had received reimbursements from the company for a substantial part 
of its initial capital contribution and, at the time of the hearing, its capital 
account had been diminished to approximately $80,000.  However, all the other members' capital 
accounts had negative balances.   
Applying the plain language of § 17-15-116, the district court concluded 
that "sole management authority of the LLC currently resides with Powell 
Family."  Thus, it ordered that 
during the pendency of the litigation Powell was entitled to exclusive 
management powers over the limited liability company and enjoined Dunmires  and Hedstroms from exercising any 
management authority.  The court 
referred to § 17-15-104 as delineating Powell's management powers, but, in 
deference to Dunmires' and Hedstroms' concerns that Powell would sell the 
property or change the members' respective rights in the limited liability 
company, limited Powell's powers as described above.   

 
 
[¶27]   Dunmires and Hedstroms claim the 
amended preliminary injunction improperly failed to require Powell to maintain 
the status quo and, instead, allowed Powell to affect the parties' substantive 
rights prior to final resolution of the merits of the underlying 
litigation.  Their primary concern 
seems to be that Powell should not have been granted the power to refinance the 
company's debt.  According to 
Dunmires and Hedstroms, Powell improperly used its powers to pay off the FNB 
debt and replace it with a loan provided by Powell. 

 
 
[¶28]   In making this argument, Dunmires 
and Hedstroms improperly focus on Powell's actions after the preliminary injunction was 
entered.  The propriety of those 
actions has not been addressed by the district court and, therefore, is not ripe 
for review by this Court.  Analyzing 
the case at the correct point in time, we conclude that the preliminary 
injunction simply enforced the management rules required by Wyoming law.  Section 17-15-116 plainly states that, 
in the absence of an operating agreement, management of a limited liability 
company will be vested in the members "in proportion to their contribution to 
the capital of the limited liability company."  The district court, therefore, properly 
vested sole management authority over Kite Ranch in Powell, the only member with 
a positive capital account.  
Moreover, the district court's ruling that Powell was entitled to 
exercise the powers described in § 17-15-104 was also clearly in accord with 
Wyoming 
law.  The district court attempted 
to address Dunmires' and Hedstroms' fears that Powell would change the status 
quo during the pendency of the action by prohibiting it from selling the ranch 
property or adopting new articles of organization or an operating 
agreement.  

 
 
[¶29]   They argue that, by allowing Powell 
to refinance the FNB obligation, the district court decided one of the primary 
issues of the litigation  the proper path to take with regard to company 
debt.  They claim that Powell's 
actions did not maintain the status quo, but instead created a new contractual 
obligation that the parties did not agree to, in violation of the principles set 
out in Lieberman v. Wyoming.com LLC, 
2004 WY 1, 82 P.3d 274 (Wyo. 2004).  

 
 
[¶30]   Status quo is defined as "the 
existing state of affairs."  
Webster's Third New Int'l Dictionary 2230 (2002).  Maintaining the status quo of an ongoing 
business does not mean decisions cannot be made.  The FNB note was in default at the time 
of the preliminary injunction hearing.  
To do nothing (as Dunmires and Hedstroms apparently advocate) could have 
resulted in foreclosure and possible loss of the ranch property.  Clearly, loss of the company's primary 
asset would not have maintained the status quo.  By being allowed to refinance the debt, 
Powell was, in fact, maintaining the current state of affairs, i.e. protecting 
the property from being lost in a foreclosure.  

 
 
[¶31]   This case is different from the 
situation we addressed in Lieberman.   That case involved a member of 
a limited liability company who wanted to withdraw from the company.  We recognized that the Wyoming Limited 
Liability Company Act "contains no provision relating to the fate of a member's 
equity interest upon the member's dissociation."  Lieberman, ¶ 2, 82 P.3d  at 275.  Because the parties failed to 
contractually provide for mandatory liquidation or buyout of members' interests 
in the limited liability company, the parties were left in status quo or 
limbo.  Lieberman, ¶ 18, 82 P.3d  at 282.  Under those circumstances, we concluded 
that the member who sought to withdraw simply retained his equity interest in 
the company because he had no legal duty to sell and the company had no duty to 
buy it.  Id. at ¶¶ 18-19, 82 P.3d  at 282.  
This Court declined to craft a remedy for the parties stating that we 
have "long held that it is the duty of this Court to construe contracts made 
between parties, not to make a contract for them."  Id.  
Unlike the situation presented in Lieberman, § 17-15-116 does delineate 
who has management authority over a limited liability company when the parties 
have failed to contractually agree on that matter.  Thus, the court did not craft a remedy 
for the parties.  That remedy was 
mandated by Wyoming law.  

 
 
[¶32]   The district court did not abuse 
its discretion by granting a preliminary injunction giving Powell management 
authority over Kite Ranch during the pending litigation.  As we stated above, the propriety of the 
specific actions taken by Powell, including the terms of the refinancing, is yet 
to be determined by the district court.  
We presume that will happen during the impending litigation.  In the meantime, Powell was properly 
given the right to take the actions necessary to keep the company's business 
viable, including mortgaging and leasing the real property. 

 
 
[¶33]   Affirmed.

 
 
FOOTNOTES

 
 

1Section 
17-15-104 states:

 
 
(a) Each 
limited liability company organized and existing under this act 
may:

     (i) Sue and be sued, 
complain and defend, in its name;

     (ii) Purchase, take, 
receive, lease or otherwise acquire, own, hold, improve, use and otherwise deal 
in and with real or personal property, or an interest in it, wherever 
situated;

     (iii) Sell, convey, 
mortgage, pledge, lease, exchange, transfer and otherwise dispose of all or any 
part of its property and assets;

     (iv) Lend money to and 
otherwise assist its members, managers and 
employees;

     (v) Purchase, take, 
receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, 
mortgage, lend, pledge or otherwise dispose of, and otherwise use and deal in 
and with shares or other interests in or obligations of other limited liability 
companies, domestic or foreign corporations, associations, general or limited 
partnerships or individuals, or direct or indirect obligations of the United 
States or of any government, state, territory, governmental district or 
municipality or of any instrumentality of it;

     (vi) Make contracts 
and guarantees and incur liabilities, borrow money at such rates of interest as 
the limited liability company may determine, issue its notes, bonds and other 
obligations and secure any of its obligations by mortgage or pledge of all or 
any part of its property, franchises and income;

     (vii) Lend money for 
its proper purposes, invest and reinvest its funds and take and hold real 
property and personal property for the payment of funds so loaned or 
invested;

     (viii) Conduct its 
business, carry on its operations and have and exercise the powers granted by 
this act in any state, territory, district or possession of the 
United 
States, or in any foreign 
country;

     (ix) Elect or appoint 
managers, officers, employees and agents of the limited liability company, and 
define their duties and authority, which may include authority also delegated to 
the members or managers under W.S. 17-15-117 and 17-15-118, and fix their 
compensation;

     (x) Make and alter 
operating agreements, not inconsistent with its articles of organization or with 
the laws of this state, for the administration and regulation of the affairs of 
the limited liability company;

     (xi) Indemnify a 
member or manager or former member or manager of the limited liability company 
against expenses actually and reasonably incurred by him or it in connection 
with the defense of an action, suit or proceeding, civil or criminal, in which 
he or it is made a party by reason of being or having been such member or 
manager, except in relation to matters as to which he or it shall be adjudged in 
the action, suit or proceeding to be liable to the company for negligence or 
misconduct in the performance of duty or to have received improper personal 
benefit on account thereof;  and to 
make any other indemnification that is authorized by the articles of 
organization or by an article of the operating agreement or resolution adopted 
by the members after notice;

     (xii) Cease its 
activities and surrender its certificate of 
organization;

     (xiii) Have and 
exercise all powers necessary or convenient to effect any or all of the purposes 
for which the limited liability company is 
organized;

     (xiv) Become a member 
of a general partnership, limited partnership, joint venture or similar 
association, or any other limited liability 
company;

     (xv) Pay pensions and 
establish pension plans, pension trusts, profit-sharing plans, ownership 
interest bonus plans and option plans, and benefit or incentive plans for any or 
all of its current or former managers, officers, employees and 
agents;

     (xvi) Make donations 
for the public welfare or for charitable, scientific or educational purposes. 

 
 

2Rule 59(e) 
states: "Any motion to alter or amend a judgment shall be filed no later than 10 
days after entry of the judgment."

 
 

3The district 
court's factual findings at a preliminary injunction hearing are, necessarily, 
subject to being revisited at the trial of the underlying litigation.  Further evidence may result in a 
different final ruling on these matters.