Title: DEWEY v. DEWEY

State: wyoming

Issuer: Wyoming Supreme Court

Document:

DEWEY v. DEWEY2001 WY 10733 P.3d 1143Case Number: 00-334Decided: 11/07/2001
 OCTOBER TERM, A.D. 2001

 

  

JOHN C. 
DEWEY and  
ELIZABETH

A. 
DEWEY, husband and wife, 

Appellants(Plaintiffs),

 

v.

 

CARLTON 
P. DEWEY, 

Appellee(Defendant).

 

 

 

Representing 
Appellants: 

            
James P. Castberg, Sheridan, Wyoming.

 Representing 
Appellee: 

            
Robert W. Brown of Lonabaugh and Riggs, Sheridan, 
Wyoming.

  

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

 

            
VOIGT, Justice.

 [¶1]      In November 1998, 
John C. and Elizabeth A. Dewey (the Deweys), pro se, sued their son, Carlton P. 
Dewey (Carlton Dewey), for allegedly breaching a partnership dissolution 
agreement.  The district court 
granted summary judgment to Carlton Dewey and ultimately sanctioned the Deweys 
$9,410.00 in attorneys' fees and $164.16 in costs pursuant to W.R.C.P. 11.  The Deweys, now represented by counsel, 
appeal from the district court's order imposing sanctions.  We affirm in part, reverse in part, and 
remand for modification consistent with this 
opinion.

 

ISSUE

 

[¶2]      The Deweys raise 
a single issue on appeal:

 

Was it 
an abuse of the trial court's discretion in granting defendant's motion for 
sanctions under Rule 11 W.R.C.P. and awarding defendant a money judgment against 
the plaintiffs?

 

Carlton 
Dewey phrases the issue in substantially the same manner.

 

FACTS

 

[¶3]      The parties were 
partners in a Sheridan ranching operation until 1994 when they entered into a 
Partnership Dissolution Agreement.  
Pursuant to this dissolution agreement, Carlton Dewey received certain 
real property that became his "sole and separate" property.  However, the dissolution agreement 
provided, in pertinent part:

 

            
20.       
Right of First Refusal.  
John and Elizabeth shall have a right of first refusal on the real 
property which shall become the sole and separate real property of Carl pursuant 
to this agreement.  Upon listing any 
of the property for sale with a real estate agent, Carl will immediately send a 
copy of the listing agreement to John and Elizabeth.  Whenever Carl receives a written, bona 
fide offer for the purchase of any of the real property which shall become his 
sole and separate real property pursuant to this agreement, and he accepts the 
written, bona fide offer, he shall then deliver, by certified mail, a copy of 
the accepted offer to John and Elizabeth or their attorneys . . ..  John and Elizabeth must then notify Carl 
in writing, within fourteen (14) days after they or their designated attorney 
receive a copy of the bona fide written offer that they elect to exercise the 
right of first refusal by delivering to Carl or his real estate agent a written 
notice of their exercise of the right of first refusal.  They shall then have the opportunity to 
buy the same real property for the same price and on the same terms as set forth 
in the original written offer presented to Carl by a third party.  If John and Elizabeth do not deliver to 
Carl a written notice of their exercise of their right of first refusal within 
fourteen (14) days . . . Carl may sell the real property to the third party 
offeror for the price and on the terms and conditions stated in the third party 
offeror's original offer.  If the 
sale to the third party offeror does not close for any reason, John and 
Elizabeth may exercise their right of first refusal upon Carl's receipt of a 
subsequent bona fide offer.

 

[¶4]      In 1994, it 
appears that Carlton Dewey received several offers to purchase individual 
parcels of the subject property.1  The Deweys exercised their right of 
first refusal as to all of the bona fide offers2 Carlton Dewey accepted for the 
purchase of these parcels.

 

[¶5]      In November 1998, 
the Deweys, pro se, filed a complaint alleging that Carlton Dewey breached the 
dissolution agreement by entering into a 1998 oil and gas lease with Farleigh 
Oil Properties, three grazing leases, a lease of hunting rights, and a gravel 
extraction and stockpiling agreement.  
The Deweys claimed that each of these transactions triggered their right 
of first refusal pursuant to the dissolution agreement and Carlton Dewey 
breached the dissolution agreement by failing to provide them the requisite 
notice and an opportunity to exercise the right of first refusal as to each 
transaction.  The Deweys sought 
$1,850,000.00 in damages due to the alleged breach.

 

[¶6]      Counsel for 
Carlton Dewey filed an answer December 4, 1998, and mailed a December 30, 1998, 
letter advising the Deweys that if the Deweys did not withdraw their "baseless" 
complaint by January 19, 1999, counsel would file a motion for sanctions, a copy 
of which was attached to the letter.  
The motion for sanctions specifically referred to W.R.C.P. 11 and Wyo. 
Stat. Ann. § 1-14-128 (LexisNexis 2001),3 asserting that the Deweys' 
complaint was filed for an improper purpose and that the claims were not 
warranted by existing law or a non-frivolous argument for the extension, 
modification, or reversal of existing law or the establishment of new 
law.

 

[¶7]      On January 15, 
1999, the Deweys filed a motion to amend their complaint to add a claim 
regarding another oil and gas lease and increase their alleged damages to 
$2,850,000.00 due to the additional lease.  
The Deweys also claimed that opposing counsel had engaged in criminal 
"blackmail," "intimidation and coercion," "conspiracy" and professional 
misconduct by virtue of the sanctions advisement letter and accompanying motion 
for sanctions.

 

[¶8]      On January 20, 
1999, the Deweys filed a Motion for Summary Judgment.  The Deweys argued that there were no 
genuine issues of material fact regarding Carlton Dewey's alleged breach of the 
dissolution agreement or the damages claimed in the Deweys' complaint.  The Deweys reiterated their "blackmail" 
and other allegations against counsel for Carlton Dewey, and requested that the 
district court amend their complaint and institute disciplinary actions against 
counsel for Carlton Dewey.  In their 
accompanying memorandum, the Deweys argued, albeit quite confusingly, that real 
property is comprised of anything on, above (including the sky), or below the 
land and any rights associated with the property.  According to the Deweys, because a lease 
constitutes a conveyance, a lease of any interest in, or related to, the subject 
real property triggered their right of first refusal.

 

[¶9]      On January 28, 
1999, the Deweys filed a second motion to amend their complaint to add a claim 
regarding a $180,000.00 mortgage between Carlton Dewey and the State Loan and 
Investment Board and to increase their alleged damages by $180,000.00.  The Deweys subsequently filed a Motion 
to Impound Income of All Sold Leases.

 

[¶10]   The district court denied both of 
the Deweys' motions to amend their complaint, as well as their summary judgment 
motion.  The Deweys appealed those 
rulings to this Court, which appeal was dismissed because the district court's 
orders were not appealable pursuant to W.R.A.P. 1.05.  On February 10, 1999, Carlton Dewey 
filed a Motion for Sanctions identical to the motion attached to the December 
30, 1998, advisement letter.

 

[¶11]   On May 10, 1999, Carlton Dewey 
filed a Motion for Summary Judgment which the district court granted in an order 
filed September 1, 1999.  The 
district court took Carlton Dewey's motion for sanctions under advisement "until 
such time as Plaintiffs' time to appeal this decision has expired or until a 
Wyoming Supreme Court opinion is issued."

 

[¶12]   The Deweys appealed the district 
court's order granting summary judgment in favor of Carlton Dewey.  On March 28, 2000, this Court dismissed 
the appeal because the Deweys violated W.R.A.P. 3.05(e) and failed "to make 
record references to the record on appeal when discussing the facts' of their 
case . . .."4

 

[¶13]   On May 11, 2000, Carlton Dewey 
filed a Renewed Motion for Sanctions.  
The district court imposed sanctions in a September 2000 order.  In that order, the district court 
determined that the Deweys violated W.R.C.P. 11 essentially because their claims 
were not warranted by existing law, and imposed sanctions in the amount of 
$9,410.00 in attorneys' fees and $164.16 in costs.  The Deweys filed a motion for 
reconsideration consisting of seventy-three pages, including 
attachments.

 

[¶14]   The Deweys, now represented by 
counsel, appeal from the district court's order imposing 
sanctions.

 

STANDARD 
OF REVIEW

 

[¶15]   According to W.R.C.P. 11(b)(2), an 
"unrepresented party" submitting a pleading to the court is "certifying that to 
the best of the person's knowledge, information, and belief, formed after an 
inquiry reasonable under the circumstances" the "claims, defenses, and other 
legal contentions therein are warranted by existing law or by a nonfrivolous 
argument for the extension, modification, or reversal of existing law or the 
establishment of new law[.]"  
W.R.C.P. 11(c) states that, after compliance with the procedural 
components of the rule,5 notice, a reasonable opportunity to 
respond, and a determination by the district court that W.R.C.P. 11(b) was 
violated, the district court may impose an appropriate sanction upon the party 
who violated, or who is responsible for violating, the rule.  W.R.C.P. 11(c)(2) 
provides:

 

A 
sanction imposed for violation of this rule shall be limited to what is 
sufficient to deter repetition of such conduct or comparable conduct by others 
similarly situated.  Subject to the 
limitations in subparagraphs (A) and (B), the sanction may consist of, or 
include, directives of a nonmonetary nature, an order to pay a penalty into 
court, or, if imposed on motion and warranted for effective deterrence, an order 
directing payment to the movant of some or all of the reasonable attorney's fees 
and other expenses incurred as a direct result of the 
violation.

 

An 
objective standardreasonableness under the circumstancesis used to determine 
whether the duty of a "reasonable inquiry" has been satisfied.  Meyer v. Mulligan, 889 P.2d 509, 
517 (Wyo. 1995).

 

[¶16]   The purpose of W.R.C.P. 11 is to 
deter baseless filings and streamline the administration and procedure of 
courts.  Meyer, 889 P.2d at 
517 (quoting Cooter & Gell v. Hartmarx 
Corp., 496 U.S. 384, 393, 110 S. Ct. 2447, 2454, 110 L. Ed. 2d 359 
(1990)).  Rule 11 is not a fee-shifting 
statute.  Cooter & Gell, 
496 U.S.  at 409.  "A district court should consider 
monetary, as well as non-monetary, sanctions and any monetary sanction should be 
carefully tailored to the violation under consideration."  Caldwell v. Cummings, 2001 WY 
106, ¶ 14, ___ P.3d ___, ___, slip op. at 6 (Wyo. 2001) (citing 5A Charles Alan Wright 
& Arthur R. Miller, Federal Practice and Procedure: Civil 2d § 1336 
at 69-70 (Supp. 2001)).

 

[¶17]   A pro se litigant is treated no 
differently than he would be if he were represented by an attorney.  In Interest of KMM, 957 P.2d 296, 
298 (Wyo. 1998); 
Matter of GP, 679 P.2d 976, 984 (Wyo. 1984).

 

"One has 
the right to appear pro se; but when a person chooses to do so, he must be held 
to the same standard as if he were represented by counsel.  He cannot expect the court or the 
attorneys for other parties to present his case.  He cannot be given an advantage by 
virtue of his pro se appearance, and he cannot be placed at a disadvantage 
thereby other than whatever disadvantage results from his decision to proceed 
without the assistance of counsel."

 

In 
Interest of KMM, 957 P.2d  at 298 (quoting Johnson v. Aetna Cas. and Sur. Co. of Hartford, 
Conn., 630 P.2d 514, 517 (Wyo.), appeal dismissed and cert. denied, 
454 U.S. 1118 (1981)).  Although a certain leniency is accorded 
to pro se litigants, the proper administration of justice requires reasonable 
adherence to the same rules of evidence, procedure and requirements of the court 
as expected of those qualified to practice law.  In Interest of KMM, 957 P.2d  at 
298; Matter of GP, 679 P.2d  at 984 (quoting Lombardi v. Citizens Nat. 
Trust & Sav. Bank of Los Angeles, 137 Cal. App. 2d 206, 289 P.2d 823, 824 
(1955)).  "There is no more basic requirement than 
that a complaint must state a cause of action."  Apodaca v. Ommen, 807 P.2d 939, 
943 (Wyo. 1991).

 

[¶18]   We review district court sanctions 
imposed6 pursuant to W.R.C.P. 11 for an 
abuse of discretion.  LC v. 
TL, 870 P.2d 374, 381 (Wyo.), cert. denied, 513 U.S. 871 
(1994). 

 

"[T]he 
core of our inquiry must reach the question of reasonableness of the choice 
made by the trial court.'  Vaughn 
v. State, 962 P.2d 149, 151 (Wyo.1998).  Judicial discretion is a composite of 
many things, among which are conclusions drawn from objective criteria; it means 
a sound judgment exercised with regard to what is right under the circumstances 
and without doing so arbitrarily or capriciously.'  Id. (quoting Byerly v. 
Madsen, 41 Wash. App. 495, 704 P.2d 1236, 1238 (1985)); Basolo [v. 
Basolo], 907 P.2d [348] at 353 [(Wyo. 1995)].  We must ask ourselves whether the 
district court could reasonably conclude as it did and whether any facet of its 
ruling was arbitrary or capricious."

 

Young v. 
HAC, LLC, 2001 
WY 50, ¶ 6, 24 P.3d 1142, 1144 (Wyo. 2001) (quoting Carlton v. Carlton, 997 P.2d 1028, 1031 (Wyo. 2000)).  To some degree, our deference extends to 
the district court's determination that a pleading was not warranted by existing 
law or a good faith argument for changing the law, although a district court 
would necessarily abuse its discretion if it based its ruling on an erroneous 
view of the law or on a clearly erroneous assessment of the evidence.  Cooter & Gell, 496 U.S.  at 
399-405.  See also Dodd Ins. Services, Inc. v. 
Royal Ins. Co. of America, 935 F.2d 1152, 1155 (10th Cir. 1991).7

 

DISCUSSION

 

[¶19]   The Deweys essentially claimed in 
their complaint, pleadings, and in subsequent hearings that leasing any interest 
in, or related to, Carlton Dewey's real property (be it gravel or soil, oil or 
gas, grass, hunting rights, etc.) to another party triggered the Deweys' right 
of first refusal.  In other words, 
each lease conveyed "real property" to each lessee for money, resulting in a 
"sale" of real property.  On appeal, 
the Deweys focus primarily on whether each transaction involved the transfer of 
a real property interest.  The 
Deweys cite no legal authority in advancing such an argument regarding the 
materials and stockpiling agreement or the hunting lease, except to equate each 
transaction with a conveyance.

 

[¶20]   We first look to the contractual 
language to determine the parties' intent regarding what circumstances would 
trigger the Deweys' right of first refusal.  A right of first refusal gives "a 
privilege to purchase on a condition precedent which is the formulated desire of 
the owner to sell . . ..'"  
Chapman v. Mutual Life Ins. Co. of New York, 800 P.2d 1147, 1150 
(Wyo. 1990) (quoting Hartnett v. Jones, 629 P.2d 1357, 1362 n.1 (Wyo. 
1981)).  Once that condition precedent is met, 
the right of first refusal "ripens" into an option and contract law pertaining 
to options applied.  Chapman, 
800 P.2d  at 1150.  
"If the language of a contract is plain and unequivocal, that language is 
controlling."  Bensinger v. Scott, 625 P.2d 775, 778 (Wyo. 
1981).

 

[¶21]   The parties clearly and 
unequivocally contemplated in paragraph 20 of the dissolution agreement that 
Carlton Dewey's acceptance of a bona fide offer for the sale of the subject real 
property would trigger the Deweys' right of first refusal.  The contract provides that upon 
receiving a written, bona fide offer to "purchase" this real property, and 
Carlton Dewey's acceptance of that offer, Carlton Dewey must provide the 
requisite notice to the Deweys.  It 
similarly states that upon listing the property for "sale" with a real estate 
agent, Carlton Dewey would send the listing agreement to the Deweys.  The Deweys, then, would have the same 
opportunity to "buy" the real property as provided for in the agreement and if 
they did not exercise that right, Carlton Dewey could then "sell" the real 
property to the third party.  If a 
"sale" to the third party did not occur, the Deweys' right of first refusal 
would be preserved as to subsequent bona fide offers.

 

[¶22]   In Bensinger, 
625 P.2d  at 777, 
the parties provided in one contract for a right of first refusal upon the "sale 
of all or any part of the first refusal property" and in a second contract one 
party agreed not to "sell or transfer all or any part of" the first refusal 
property without first offering it to the other party.  We held that the parties' intent in 
using the word "transfer" in addition to the word "sale," as well as the phrase 
"all or any part" in referring to the first refusal property, was more inclusive 
than if the parties had merely used the term "sale."  Id.  We concluded that pursuant to this 
language, a non-exclusive easement, as opposed to a "sale," was sufficient to 
trigger the right of first refusal at issue.  Id.  See also 
Rainbow Oil Co. v. Christmann, 
656 P.2d 538, 543-44 (Wyo. 1982) (finding that "sale" in context of right 
of first refusal is to "receive a narrower interpretation than is the term 
transfer.'")  Indeed, a "sale" in 
the context of a right of first refusal is a "transfer for value of a 
significant interest in the subject property to a stranger who thereby gains 
substantial [ownership or] control over the subject property."  Raymond 
v. Steen, 
882 P.2d 852, 857 (Wyo. 1994) (citing 
Prince v. Elm Inv. Co., Inc., 
649 P.2d 820, 823 (Utah 1982)).

 

[¶23]   In this context, we consider the 
nature and extent of Carlton Dewey's transactions regarding the subject real 
property.  The district court denied 
the Deweys' motions to amend their complaint, a determination not altered in any 
subsequent appeal; therefore, we will only consider the transactions referenced 
in the Deweys' complaint.  On April 
27, 1994, Carlton Dewey entered into a twenty-year hunting lease agreement with 
the Double B Ranch in return for a promissory note granted to Carlton 
Dewey.  The hunting agreement leases 
a portion of Carlton Dewey's real property to Double B Ranch solely for hunting 
purposes.  The parties are to agree 
on the total number of hunting permits to be issued each year, with the lessor 
retaining one-third of those permits to otherwise use or sell.  The lessee may remove unauthorized 
persons hunting on the property, and may construct goose blinds, a river 
trolley, and a trap shooting area, etc. on the property.

 

[¶24]   On January 27, 1997, Carlton Dewey 
entered into a materials agreement and accompanying stockpiling agreement with 
the Wyoming Department of Transportation.  
These agreements provide that between January 27, 1997, and January 1, 
1999 (with an optional one-year extension), the Department of Transportation can 
enter a designated portion of Carlton Dewey's property to explore for and 
extract sand, stone, gravel, or soil for its highway projects, and stockpile or 
process the same on the property.

 

[¶25]   Effective November 19, 1997, 
Carlton Dewey entered into a six-year oil and gas lease (five-year extension 
optional) with Farleigh Oil Properties.  
The oil and gas lease grants Farleigh Oil Properties the right to survey, 
mine, and operate for oil and gas on Carlton Dewey's property to a specified 
depth, in exchange for a portion of the proceeds resulting from any oil and gas 
sold or produced.  Farleigh Oil 
Properties may place structures on the property to assist its operations under 
the agreement.8  The parties focus their arguments 
primarily on whether an oil and gas lease actually conveys a real property 
interest, as opposed to some other interest.  However, we find that the contractual 
language, and the legal definition of "sale" in the context of that language, is 
sufficient to resolve the issue without analyzing the nature of the interest 
itself.

 

[¶26]   In their complaint, the Deweys 
reference what appear to be three grazing leases between Carlton Dewey and 
parties named Perry, Fort, and Peddicord.  
Copies of these leases are apparently not contained in the record, and 
neither party cites to the record in referring to these leases.  The Deweys present no cogent argument on 
appeal regarding these leases, but essentially argue in the memorandum 
accompanying their motion for summary judgment that because grass is attached to 
real property, a lessee's cattle convert or transfer the real property "grass" 
by eating it and subsequently vacating the leased property when the lessee sells 
the cattle.  According to the 
Deweys, this somehow equates to a transfer of real 
property.

 

[¶27]   None of these transactions come 
close, as a matter of law, to approaching transfers involving significant 
interests which result in another party gaining substantial ownership or control 
over the subject property, especially considering the contractual language 
utilized by the parties.  We cannot 
conclude that, under the limited circumstances of this case, the district court 
abused its discretion in finding the Deweys' claims were not warranted by 
existing law, particularly the legal definition of a "sale."  Considering these same circumstances, it 
does not appear, after examining the record, that the Deweys' claims were 
warranted by a non-frivolous argument for the extension, modification, or 
reversal of existing law or the establishment of new law.

 

[¶28]   The Deweys do not argue that the 
district court abused its discretion as to the nature or amount of the sanctions 
imposed.  However, it appears from 
the record that the district court included fees and/or costs claimed by Carlton 
Dewey for defending the Deweys' appeal from the district court's denial of the 
Deweys' motion for summary judgment, and the Deweys' appeal from the district 
court's grant of summary judgment in favor of Carlton Dewey, in the amount it 
ultimately imposed as W.R.C.P. 11 sanctions.  "On its face, Rule 11 does not apply to 
appellate proceedings."  Cooter 
& Gell, 
496 U.S.  at 406.  "Neither the 
language of Rule 11 nor the Advisory Committee Note suggests that the Rule could 
require payment for any activities outside the context of district court 
proceedings."  Id.  In Cooter 
& Gell, 
an appeal from the imposition of Rule 11 sanctions, the respondents argued that 
fees incurred "because of the filing" necessarily included fees incurred on 
appeal because had a lawsuit not been filed, there would have been no appellate 
expenses.  The United States Supreme 
Court rejected this argument, finding that Rule 11 "is more sensibly understood 
as permitting an award only of those expenses directly caused by the filing, 
logically, those at the trial level."  
Id.  "Limiting 
Rule 11's scope in this manner accords with the policy of not discouraging 
meritorious appeals."  Id. 
at 408.  We find this reasoning 
persuasive.

 

[¶29]   A litigant's conduct on appeal is 
governed by the Wyoming Rules of Appellate Procedure, wherein this Court is 
empowered to impose sanctions for frivolous appeals.  Accordingly, the sanctions imposed 
pursuant to W.R.C.P. 11 in this case should be reduced by the amount of the 
sanctions attributable to the fees and/or costs Carlton Dewey claimed to have 
incurred in appellate proceedings.  
The district court's order imposing sanctions is otherwise 
affirmed.

 

[¶30]   We affirm in part, reverse in part, 
and remand for modification consistent with this opinion.

 

FOOTNOTES

  1The offers were 
to purchase the individual parcels entirely, rather than lease a portion of a 
parcel for a particular purpose.

  2In a 1994 
declaratory judgment action initiated by the Deweys, the district court 
concluded that one such offer was not "bona fide" because the offer sent to the 
Deweys did not contain all of the offer's terms.  The district court also found that the 
right of first refusal did not require that the real estate be listed with a 
real estate agent.

  3In Squillace 
v. Kelley, 990 P.2d 497, 501 (Wyo. 1999), we held that Wyo. Stat. Ann. § 
1-14-128 was unconstitutional.  
Nevertheless, the district court imposed sanctions in the instant case 
only pursuant to W.R.C.P. 11.

  4In April 2000, 
this Court sanctioned the Deweys, acting pro se, in their appeal of an insurance 
coverage case that arose from a transaction to purchase real property.  Dewey Family Trust v. Mountain West 
Farm Bureau Mut. Ins. Co., 3 P.3d 833, 836-37 (Wyo. 2000).  
We summarily affirmed the district court because the Deweys' brief did 
not include cogent argument or cite to pertinent authority, concluding that the 
Deweys had no "reasonable cause" for their appeal.  While "normally reluctant to impose 
sanctions," we awarded the appellee attorneys' fees and costs.  Id. at 
837.

  5It appears from 
the record on appeal that Carlton Dewey satisfied the requisite procedures in 
filing his motion for sanctions.

  6We recently 
established several factors that a district court should prospectively consider 
in imposing W.R.C.P. 11 sanctions.  
See Caldwell, 2001 WY 106, ¶¶ 13-14, ___ P.3d at ___, slip op. at 
5-6.

  7Federal 
"precedent offers able guidance in review of decisions concerning Rule 11."  Meyer, 889 P.2d  at 
517.

  8When the Deweys 
exercised their right of first refusal regarding a forty-acre tract of Carlton 
Dewey's property, Carlton Dewey actually assigned the oil and gas lease to the 
Deweys, to the extent that the oil and gas lease related to the forty-acre 
tract.