Title: Hamel v. American Continental Corp.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Hamel v. American Continental Corp.1986 WY 30713 P.2d 1152Case Number: 85-150Decided: 02/05/1986Supreme Court of Wyoming
MICHAEL HAMEL, DANIEL L. CASHMAN, ROBERT W. ZUMBO, BRUCE 
SCHOENEBERG, CHARLES MORAN, LEON W. SHAYLER, CHARLES FRAKES, KARL W. SHERMAN, 
BRETT DESCHENES, ROY T. WEBB, DAVID THOMPSON, RICK GONZALES, ROBERT DE CASTRO, 
ALFRED J. TENNANT, LARRY TIMOTHY LARGENT, JAMES G. LARGENT, RANDY H. 
SCHOENEBERG, KEVIN C. KELLER, LARRY T. VANOVER, RICHARD L. JOLLEY, LEONARD G. 
HOLLAND, RUSSELL G. FIELDS, JEFFREY J. PAYNE, VICTOR L. FAGERSTONE, APPELLANTS 
(PLAINTIFFS),

 
 
JIM CLARK, RICKIE O. 
PHILLIPS, AND KELLY WEBSTER, (PLAINTIFFS), 

 
 
v. 

 
 
AMERICAN CONTINENTAL 
CORPORATION, AN OHIO CORPORATION, AND MEDEMA HOMES OF UTAH, INC., A UTAH 
CORPORATION, APPELLEES (DEFENDANTS), 

 
 
PATRICK EARL GLASPIE, 
D/B/A WESTERN COMFORT BUILDERS, (DEFENDANT).

 
 
Appeal from the District Court,LaramieCounty, Alan B. Johnson, 
J.

 
 
 
 
Representing 
Appellants:

Bernard E. Cole and 
Douglas J. Moench, Jr., of Cole & Moench, Cheyenne.

 
 
Representing 
Appellee:

Edwin H. Whitehead of 
Urbigkit, Whitehead, Zunker & Davidson, P.C., Cheyenne, for American Continental 
Corp.

 
 
Before THOMAS, C.J., 
BROWN, CARDINE and MACY, JJ., and RAPER, J., Retired.

 
 

RAPER, Justice, 
Retired.

 
 

[¶1.]     The district court, on 
motion, dismissed a mechanic's lien foreclosure action brought by the 24 
appellants, employees of Patrick Earl Glaspie, d/b/a Western Comfort Builders 
(Glaspie), discharged in bankruptcy. Glaspie had contracted to do work for 
American Continental Corporation (American), d/b/a Medema Homes, appellee owner, 
on the land of 
American.

 
 

[¶2.]     Appellants set out the 
issues to be:

 
 
"1. IS THE CONTRACTOR A 
PARTY WHO MUST BE JOINED AS A PARTY TO A MECHANIC[']S LIEN FORECLOSURE ACTION, 
AS AN INDESPENSIBLE [sic] PARTY AND WHO, THEREFORE, CAUSES A STAY OF PROCEEDINGS 
UPON THE FILING OF A PETITION IN BANKRUPTCY?

 
 
"2. DOES A PETITION IN 
BANKRUPTCY FILED BY A DEBTOR WHO IS AN INDESPENSIBLE [sic] PARTY TO A 
MECHANIC[']S LIEN FORECLOSURE ACTION ACT TO STAY THE FORECLOSURE ACTION, THUS 
TOLLING THE ACTION'S STATUTE OF LIMITATIONS?"

 
 
American clarifies and 
restates the issues to be:

 
 
"1. Is a contractor, who 
is bankrupt, and [sic] indispensable party to rendition of a valid judgment 
establishing and foreclosing a lien.

 
 
"2. Do the automatic stay 
provisions of 15 [11] U.S.C. § 362(a) preclude creditor actions against other 
parties who have not filed proceedings in the bankruptcy 
court?

 
 
"3. Do the automatic stay 
provisions of § 362(a), as applicable to the debtor, stay the judicial 
proceedings against the owner and the liened property, and as such toll the 
statute of limitations as to commencing an action to enforce a lien within one 
hundred eighty (180) days?"

 
 

[¶3.]     We will 
affirm.

 
 

[¶4.]     Appellants were 
employed by Glaspie. Glaspie initiated federal "Chapter Seven" bankruptcy 
proceedings. Unpaid appellants were stayed by the bankruptcy court from 
initiating any proceedings against Glaspie to collect wages due from Glaspie. 
Glaspie was eventually discharged from bankruptcy on May 7, 1984. The district 
court mechanic's lien foreclosure action was filed on May 23, 1984, 183 days 
after the recording of statements of mechanic's lien with the LaramieCounty clerk on November 22, 1983. W.S. 
29-2-109 mandates that:

 
 
"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."

 
 
I

 
 

[¶5.]     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. Cities Service Oil Company v. Pubco 
Petroleum Corporation, Wyo., 497 P.2d 1368 
(1972); Arch Sellery, Inc. v. Simpson, Wyo., 
346 P.2d 1068 (1959). It is essential that there be exact compliance with the 
time limits fixed by statute, Tottenhoff v. Rocky Mountain Construction 
Company, Inc., Wyo., 609 P.2d 464 (1980), severe as that may seem to be on 
occasion. See also Peters v. Dona, 49 
Wyo. 306, 54 P.2d 817 (1936).

 
 
II

 
 

[¶6.]     There is no question 
then that unless appellants' position is correct that the stay by the bankruptcy 
court, as to Glaspie's indebtedness to appellants for wages, tolled the 180-day 
requirement for filing a foreclosure action against the owner, appellants have 
no lien. We are convinced that the mandatory limit was not tolled. American was 
not a party to the bankruptcy proceeding of Glaspie, nor was American's property 
subject to the jurisdiction of the bankruptcy court.

 
 

[¶7.]     Appellants somehow 
reason that the contractor, Glaspie, was an indispensable party to an action to 
foreclose their liens against the owner. It is urged that since they had been 
stayed by the bankruptcy court from proceeding against Glaspie or his property 
in any fashion for wages and Glaspie was an indispensable party, they could not 
sue American to foreclose during the period prior to discharge on May 7, 1984. 
No viable authority for such a position is cited.

 
 

[¶8.]     One of the premises 
essential to sustain such a position, even if valid otherwise, must fall. A 
contractor is not an indispensable party to a lien foreclosure unless the owner 
of the property subject to lien wants him joined. In True v. Hi-Plains Elevator Machinery, 
Inc., Wyo., 577 P.2d 991, 1005 (1978), 
citing Becker v. Hopper, 22 
Wyo. 237, 138 P. 179, Ann.Cas. 1916D 1041 (1914), aff'd on reh. 23 Wyo. 209, 147 P. 1085, 
Ann.Cas. 1918B 35 (1915), in construing the predecessor to W.S. 29-2-1081 substantially unchanged, this Court 
said that this section was incorporated in the lien laws for the owner's 
protection, and the owner has a clear right to insist that the contractor be 
made a party. The contractor is a necessary party only in the sense that the 
owner may require that he be made a party.

 
 
III

 
 

[¶9.]     It should be 
self-evident from the clear language of 11 U.S.C. § 362 (1983) that the 
automatic stay granted petitioners in bankruptcy is directed at only claims 
against the "debtor," the "property of the debtor," and the "estate" and not 
acts against others. This is confirmed by courts working regularly in bankruptcy 
matters and knowledgeable in the field.

 
 

[¶10.]  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).

 
 

[¶11.]  Since appellants untimely filed their 
suit for foreclosure, Glaspie was not an indispensable party, and the automatic 
stay under 11 U.S.C. § 362, supra, granted petitioners in bankruptcy does not 
stay foreclosure against the owner under either state or federal law, appellants 
had no lien at the time of filing their action to foreclose the lien they may 
have thought they had.

 
 

[¶12.]  Affirmed.

 
 
FOONOTES

 
 

1 W.S. 
29-2-108:

 
 
"The contractor shall 
defend any action brought by his employee, subcontractors hired by the 
contractor, their employees or by any suppliers of materials provided under 
contract in accordance with this chapter at his own expense. During the pendency 
of the action the owner or his agent may withhold from the contractor the amount 
of money for which a lien is filed. If judgment is rendered against the owner or 
his property on the lien foreclosure, he may deduct from any amount due to the 
contractor the amount of the judgment and costs. If the owner has paid the 
contractor in full he may recover from the contractor any amount paid by the 
owner for which the contractor was originally liable."