Case Title: IN RE PIYUSH PATEL: TRACY ZUBROD v. CWCCAPITAL ASSET MANAGEMENT, LLC

Citation: 

Docket Number: S-10-0075

State: wyoming

Court: Wyoming Supreme Court

Date: 2010-11-16T00:00:00Z

Document:
IN RE PIYUSH PATEL: TRACY ZUBROD v. CWCCAPITAL ASSET MANAGEMENT, LLC2010 WY 147Case Number: No. S-10-0075Decided: 11/16/2010NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so correction may be made before final publication in the permanent volume.
OCTOBER 
TERM, A.D. 2010

 
 
IN 
RE PIYUSH PATEL,

 
 
TRACY 
ZUBROD,

Appellant 
(Plaintiff),

 
 
v.

 
 
CWCAPITAL ASSET 
MANAGEMENT, LLC,

Appellee 
(Defendant).

 
 
 
 
W.R.A.P. 
11 Certified Question

from 
the United States Bankruptcy Court for the District of 
Wyoming

The 
Honorable Peter J. McNiff, Judge 

 
 

Representing 
Appellant:

Paul 
Hunter, Cheyenne, Wyoming.

 
 

Representing 
Appellee:

Gregory 
C. Dyekman of Dray, Thomson & Dyekman, P.C., Cheyenne, 
Wyoming.

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

 
 

VOIGT, Justice.

 
 
[¶1]      A two-part 
question relating to service of writs of execution, pursuant to Wyo. Stat. Ann. 
§ 1-19-103 (LexisNexis 2009), was certified to this Court from the United States 
Bankruptcy Court for the District of Wyoming.  The first questionwhich we answer in 
the positiveis whether service of a writ of execution is valid when made on a 
corporation's registered agent where a corporate officer is not present when 
service is attempted.   The 
second questionwhich we answer in the negativeis whether service of  a writ of execution is valid when made on 
a law partner of the corporation's registered agent. 

 
 
ISSUES

 
 
[¶2]      Although 
presented as one certified question, there are actually two questions for this 
Court to answer1:

 
 

1.      
Is 
a security interest in corporate stock perfected, pursuant to Wyo. Stat. Ann. § 
1-19-103, when service of a writ of execution is made on the corporation's 
registered agent because a corporate officer is not present when service is 
attempted?

 
 
2.    Is a security interest in 
corporate stock perfected, pursuant to Wyo. Stat. Ann. § 1-19-103, when service 
of a writ of execution is made on a law partner of the corporation's registered 
agent?

 
 
FACTS2

 
 
[¶3]      CWCapital Asset 
Management, LLC (CWCapital) received a money judgment against Piyush Patel 
(Patel).  Patel owned 100% of the 
stock of P&P, Inc., and 50% of the stock of PJP Enterprises, Inc., and was 
the president of both corporations.  
CWCapital had the sheriff attempt to serve two writs of execution on 
Patel, as the corporations' president, in order to levy against his shares of 
stock in both corporations to satisfy the money judgment.  Patel was neither at his business office 
nor his home when service was attempted, so the sheriff served both writs on 
Timothy Kingston, who was the registered agent for service of process for PJP 
Enterprises, Inc.  At the time 
process was served on Kingston, he was the law partner of Charles Graves, who 
was the registered agent for P&P, Inc.

 
 
[¶4]      In March 2009, 
Patel filed a Chapter 11 reorganization bankruptcy, which was later converted to 
a Chapter 7 liquidation bankruptcy and a trustee was appointed.  After CWCapital objected to Patel's use 
of cash collateral, the trustee filed an adversary proceeding requesting that 
the bankruptcy court find that CWCapital had failed to perfect its interest in 
the stock from either corporation.  
That filing led to this certification.

 
 
DISCUSSION

 
 
Is 
a security interest in corporate stock perfected,pursuant to Wyo. Stat. Ann. 
§ 1-19-103, when service of a writ of execution is made on the 
corporation'sregistered agent because a corporate officer is not present 
when service is attempted?

 
 
[¶5]      The trustee 
argues that CWCapital never perfected a security interest in the debtor's 
corporate stock because service of the writ of execution did not comply with 
Wyo. Stat. Ann. § 1-19-103.  Wyo. 
Stat. Ann. § 1-19-103 provides as follows:

 
 
To 
levy execution or attachment on rights or shares in a corporation, the officer 
making the levy shall leave a true copy of the writ, with any officer of the corporation and if 
there is no officer, then with the resident manager or agent thereof, 
together with the officer's certificate stating that he levies upon and takes in 
execution or attachment the rights or shares to satisfy the 
writ.

 
 
(Emphasis 
added.)  The trustee contends that 
service on the corporation's registered agent was invalid because service on a 
registered agent is proper only where there is no corporate officer, not where 
one exists but simply is not present or cannot be found.

 
 
[¶6]      In interpreting 
the intent of Wyo. Stat. Ann. § 1-19-103, we must apply our general rules of 
statutory construction, which we have identified as 
follows:

 
 
Our 
paramount consideration is the legislature's intent as reflected in the plain 
and ordinary meaning of the words used in the statute.  Initially, we determine whether the 
statute is clear or ambiguous. 

 
 
A 
statute is clear and unambiguous if its wording is such that reasonable persons 
are able to agree on its meaning with consistency and predictability.  Conversely, a statute is ambiguous if it 
is found to be vague or uncertain and subject to varying interpretations.  If we determine that a statute is clear 
and unambiguous, we give effect to the plain language of the 
statute.

 

 

[Krenning 
v. Heart Mountain Irrigation Dist., 2009 WY 11, ¶ 9, 200 P.3d 774, 778 (Wyo. 2009)], 
quoting RK v. State ex rel. Natrona County Child Support Enforcement 
Dep't, 2008 WY 1, ¶ 10, 174 P.3d 166, 169 (Wyo. 2008).

 
 

Horse 
Creek Conservation Dist. v. State ex rel. Wyo. Attorney Gen., 
2009 WY 143, ¶ 14, 221 P.3d 306, 312 (Wyo. 2009).  In addition, several specific rules of 
statutory construction apply in the instant case.  First, we resort to the general 
principles of statutory construction only "[i]f more than one reasonable interpretation 
exists[.]"  Lance Oil & Gas Co. v. Wyo. Dep't of 
Revenue, 2004 WY 156, ¶ 4, 101 P.3d 899, 901 (Wyo. 2004) (emphasis 
added).  Second, "[t]he words 
contained in a statute must be considered in relation to one another."  State Bd. of Equalization v. Tenneco Oil 
Co., 694 P.2d 97, 99 (Wyo. 1985).  
Third, "we must not give a statute a meaning that will nullify its 
operation if it is susceptible of another interpretation."  State ex rel. Wyo. Dep't of Revenue v. 
Hanover Compression, LP, 2008 WY 138, ¶ 8, 196 P.3d 781, 784 (Wyo. 2008). 
 Fourth, "[w]e will not interpret a 
statute in a manner that produces absurd results."  Chevron U.S.A., Inc. v. Dep't of 
Revenue, 2007 WY 43, ¶ 18, 154 P.3d 331, 337 (Wyo. 2007).  Fifth, "[t]o determine whether a statute 
is ambiguous, we are not limited to the words found in that single statutory 
provision, but may consider all parts of the statutes on the same subject."  Exxon Mobil Corp. v. State Dep't of 
Revenue, 2009 WY 139, ¶ 11, 219 P.3d 128, 134 (Wyo. 
2009).

 
 
[¶7]      Applying these 
standards to the question at hand, we conclude that Wyo. Stat. Ann. § 1-19-103 
is not ambiguous because it is susceptible to only one reasonable 
interpretation.  The clear purpose 
of the statute, as evidenced by its title and by its language, is to provide the 
proper method of levying execution or attachment upon a corporation.  The effect of such levy is to bind the 
shares of stock "from the time of the levy."  Wyo. Stat. Ann. § 1-19-107 (LexisNexis 
2009).  As evidenced by the battle 
in the instant case, the time of execution is critical when there is a contest 
among creditors over property seized.  
Given that context, it just would not be reasonable to interpret Wyo. 
Stat. Ann. § 1-19-103 as allowing service upon a registered agent only in those 
rare cases where a corporation has no officers.  Furthermore, we cannot read into the 
statute a requirement that is not there; that is, a requirement that the sheriff 
exercise due diligence in attempting to locate a corporate officer before 
resorting to service upon the corporation's registered agent.  The only reasonable reading of the 
statute is that, where a corporate officer is not present to be served when 
service is attempted, service may be made upon the corporation's agent for 
service of process.

 
 
[¶8]      Wyo. Stat. Ann. § 
17-16-501 (LexisNexis 2009) requires that every corporation maintain a 
registered agent.  We have said that 
the purpose of registered agent statutes is "to require Wyoming corporations 
doing business within the state to maintain an office with a registered agent 
within the state and the jurisdiction of its courts where summons can be served 
and upon whom such service can be made."  
U.S. Aviation, Inc. v. Wyo. 
Avionics, Inc., 664 P.2d 121, 126 (Wyo. 1983).  Wyo. Stat. Ann. § 17-28-104 (LexisNexis 
2009) and W.R.C.P. 4(d)(4) contemplate service upon a corporation via service 
upon its registered agent.  A 
reading of Wyo. Stat. Ann. § 1-19-103 that would limit service upon the agent to 
those cases where a corporation has no officers, or where the corporate officers 
have absconded, or are in hiding, or otherwise cannot be located, would nullify 
not only the general purpose of the registered agent statutes, but the purpose 
of the statutes designed to allow levy upon corporate 
stock.

 
 
[¶9]      The bankruptcy 
trustee contends that this interpretation of Wyo. Stat. Ann.1-19-103 runs 
counter to the requirement in Wyo. Stat. Ann. 1-19-102 (LexisNexis 2009) that a 
corporate officer, if there is one in the state, 
respond to the levy with "a certificate under his hand stating the number of 
rights or shares which the defendant holds . . .[,]"  and that only if there is no officer 
within the state, the agent is to provide such information.  We do not find this to be a 
contradiction.  The function of the 
registered agent is to accept service of process.  It is the function of the corporate 
officers to respond substantively once the fact of service has been communicated 
to them.  It is not illogical or 
unreasonable for the legislature to have committed the latter duty to the 
registered agent only in the absence of any corporate officer. 

 
 
Is 
a security interest in corporate stock perfected,pursuant to Wyo. Stat. Ann. 
§ 1-19-103, when service of a writ of execution is made on a law partner of the 
corporation's registered agent?

 
 
[¶10]   CWCapital argues that service on a 
registered agent's law partner should be considered valid under Wyo. Stat. Ann. 
§ 1-19-103 because a law partner should be considered an "employee" of the 
corporation's registered agent under W.R.C.P. 4(d)(1).  We reject this argument for two reasons: 
 First, W.R.C.P. 4 governs the 
service of a summons and complaint, not the service of a writ of execution.  Second, W.R.C.P. 4(d)(1) relates to 
personal service upon an individual, not to service upon a corporation, which is 
governed by W.R.C.P. 4(d)(4).  
Furthermore, we find no need to look to W.R.C.P. 4 for guidance in this 
matter because Wyo. Stat. Ann. § 1-19-103 specifically addresses the procedure 
for making levy on corporate stock and is clear as to who can be served with a 
writ of execution.  See Olsen v. State, 2003 WY 46, ¶ 168, 
67 P.3d 536, 596 (Wyo. 2003) ("where a general statute and a specific statute 
speak to the same concern, precedence is given to the terms of the more specific 
statute"); see also Wrecking Corp. of 
Am., Inc. v. Jersey Welding Supply, 
Inc., 463 A.2d 678, 679 (D.C. 
1983) (relying on rules of civil procedure for guidance where statutes 
pertaining to service of a writ of attachment did not include procedure for 
service on a corporation or corporation's agent).

 
 
[¶11]   Wyo. Stat. Ann. § 1-19-103 is 
unambiguous in spelling out who may be served with a writ of execution.  Where there is no officer available, 
"the officer making the levy shall leave a true copy of the writ . . . with the 
resident manager or agent thereof . . . ."  
Wyo. Stat. Ann. § 1-19-103.  
Said another way, the statute allows for service of a writ of execution 
relating to corporations on one of three people:  a corporate officer, and if a corporate 
officer is not present, a resident manager or resident agent.  A law partner of a corporation's 
registered agent is not the resident agent.  Nothing in the phrase "resident agent" 
can be read to include anyone other than the resident agent.  "Because the right to subject corporate 
stock to levy and sale under execution is purely statutory, a levy which does 
not comply with the requirements of a state statute is invalid."  30 Am. Jur. 2d. Executions and Enforcements of 
Judgements § 201 (2005).  
Accordingly, a security interest in corporate stock cannot be perfected 
pursuant to Wyo. Stat. Ann. §§ 1-19-103, 1-17-302, and 1-19-107 by serving a 
writ of execution on a law partner of a corporation's registered agent.  

 
 
CONCLUSION

 
 
[¶12]   A security interest in corporate 
stock is perfected, pursuant to Wyo. Stat. Ann. § 1-19-103, where service of a 
writ of execution is made on the corporation's registered agent because a 
corporate officer is not present when service is attempted.  However, a security interest in 
corporate stock is not perfected, pursuant to Wyo. Stat. Ann. § 1-19-103, where 
service of a writ of execution is made on a law partner of the corporation's 
registered agent.

 
 
FOOTNOTES

 
 

1The certified question was presented as:

 
 
Whether service of the writs of execution regarding shares of stock of 
two corporations upon the registered agent for one corporation and partner to 
the registered agent for the other corporation was sufficient to give the 
creditor a perfected security interest in the corporate shares under Wyo. Stat. 
§§§ 1-19-103, 1-17-302 and 1-19-107.

 
 

2This case comes before 
the Court as a certified question from the United States Bankruptcy Court for 
the District of Wyoming, pursuant to W.R.A.P. 11.  When reviewing certified questions "we 
rely upon the facts presented by the certifying court."  Miech v. Sheridan County, Wyo., 2002 WY 
178, ¶ 2, 59 P.3d 143, 145 (Wyo. 2002).