Title: James S. Jackson Co., Inc. v. Meyer

State: wyoming

Issuer: Wyoming Supreme Court

Document:

James S. Jackson Co., Inc. v. Meyer1984 WY 27677 P.2d 835Case Number: 83-104Decided: 03/05/1984JAMES S. JACKSON COMPANY, INC., APPELLANT (INTERVENOR),

v.

FRED W. MEYER AND BLANCHE L. MEYER, APPELLEES (PLAINTIFFS), AND JAMES A. LUDVIK AND HORSESHOE CREEK LIMITED, A COLORADO PARTNERSHIP, APPELLEES (DEFENDANTS).

Supreme Court of Wyoming
JAMES S. JACKSON COMPANY, 
INC., APPELLANT (INTERVENOR),

v.

FRED W. MEYER AND BLANCHE 
L. MEYER, APPELLEES (PLAINTIFFS), AND JAMES A. LUDVIK AND HORSESHOE CREEK 
LIMITED, A COLORADO PARTNERSHIP, APPELLEES 
(DEFENDANTS).

Appeal from the District 
Court, PlatteCounty, Arthur T. Hanscum, 
J.

Eric M. Alden of 
Jones, Jones, Vines & Hunkins, Wheatland, for appellant.

Frank J. Jones, 
Wheatland, for appellee James A. 
Ludvik.

Before ROONEY, C.J., and THOMAS, ROSE, BROWN and 
CARDINE, JJ.

ROSE, 
Justice.

[¶1.]     The sole question 
raised by this appeal is whether a judgment creditor is entitled to intervene, 
as a matter of right, in a lawsuit between the judgment debtor and the debtor's 
assignee, which suit purports to determine the validity of an assignment 
executed by the judgment debtor prior to the entry of the judgment against it. 
This identical issue was before this court in an earlier action involving the 
same parties and the same assignment of the same instrument. James S. Jackson Company, Inc. v. Horseshoe 
Creek Limited, Wyo., 650 P.2d 281 (1982). We consider our 
analysis and holding in the earlier case to be both correct and determinative of 
the outcome in the instant case. Therefore, we will affirm the judgment of the 
district court denying appellant James S. Jackson Company, Inc. (Jackson) 
intervention as of right.

FACTS

[¶2.]     In 1976 appellee 
Horseshoe Creek Limited (Horseshoe) entered into a contract to purchase a ranch 
in PlatteCounty from James F.K. 
Centlivre. Horseshoe subsequently assigned its interest in this contract for 
deed to appellee James A. Ludvik. Horseshoe's interest in the contract for deed 
also was assigned to appellant Jackson by the United States Marshal for the 
Northern District of Indiana, pursuant to an order of the federal district 
court. In an action to determine the priority between these assignments, this 
court held that Ludvik's assignment was superior to Jackson's assignment. Ludvik v. James S. Jackson Company, 
Inc., Wyo., 635 P.2d 1135 
(1981).

[¶3.]     Prior to our final 
decision in that case, Horseshoe brought an action against Ludvik to rescind the 
assignment of the contract for deed, alleging that Ludvik had failed to make 
certain payments required under the assignment. Ludvik defended, in part, on the 
theory that he had acquired Centlivre's seller interest in the contract for deed 
and was not obligated to make any payments. Jackson's motion to intervene in that action 
was denied by the district court. We affirmed, holding that the denial of 
intervention did not impair or impede Jackson's ability to protect its interest in 
the contract for deed as a judgment creditor of Horseshoe. James S. Jackson Company, Inc. v. Horseshoe 
Creek Limited, supra, 650 P.2d  at 287.

[¶4.]     The present appeal 
originated as a foreclosure proceeding by appellees Fred and Blanche Meyer upon 
the mortgage executed by Horseshoe and assumed by Ludvik as assignee of the 
contract for the deed to the ranch property. Ludvik asserted that he had no 
obligation on the mortgage because he was entitled to rescind the assignment 
from Horseshoe that provided for his assumption of the 
mortgage.

[¶5.]     While this matter was 
pending, Jackson sought to enforce its judgment 
against Horseshoe from the federal district court in Indiana. On May 20, 1983 
the following order was entered granting Jackson's motion for execution on the equitable 
assets of Horseshoe:

"NOW, THEREFORE, IT IS 
HEREBY ORDERED that the Plaintiff [James S. Jackson Company, Inc.] be and it 
hereby is allowed to commence execution upon the equitable assets of the 
Defendant [Horseshoe Creek Limited] and specifically of the Defendant's interest 
in a contract to purchase real property in Platte County, Wyoming from one James 
F.K. Centlivre and a contract assigning that contract to one James A. 
Ludvik."

[¶6.]     Jackson moved to intervene 
in the foreclosure proceeding in order to protect its interest in the contract 
for deed and the assignment. This motion was denied on the ground that the 
resolution of those issues to be determined at trial would not impair or impede 
any interests of Jackson as a judgment creditor of Horseshoe. 
Following a trial to a jury, a verdict was reached and a judgment was entered 
rescinding the assignment of the contract for deed from Horseshoe to 
Ludvik.

INTERVENTION OF 
RIGHT

[¶7.]     Rule 24(a)(2), 
W.R.C.P., provides for an applicant's intervention of right in a lawsuit between 
other litigants:

"Intervention of right. - Upon timely 
application anyone shall be permitted to intervene in an action: * * * (2) when 
the applicant claims an interest relating to the property or transaction which 
is the subject of the action and he is so situated that the disposition of the 
action may as a practical matter impair or impede his ability to protect that 
interest, unless the applicant's interest is adequately represented by existing 
parties."

We repeated the 
conditions which an applicant for intervention must satisfy to come within this 
rule in James S. Jackson Company, Inc. v. 
Horseshoe Creek Limited, supra, 650 P.2d at 286:

"`* * * In order to come 
within the provisions of that rule, three conditions must be present - namely: 
(1) appellants must have an interest in the subject of the action; (2) 
appellants must be able to show that they are so situated that a failure to 
allow intervention will impair or impede their ability to protect that interest; 
and (3) it must be apparent that appellants' interest is not adequately 
represented by existing parties. Rule 24(a), W.R.C.P.; Rawlins v. Stanley, 207 Kan. 564, 486 P.2d 840 
(1971). A fourth requirement which has also been recognized by the courts is 
that of timeliness. In other words, the application for intervention must be 
made at a time when it is practical to allow another party to enter the dispute. 
NAACP v. New 
York, 413 U.S. 345, 93 S. Ct. 2591, 37 L. Ed. 2d 648 (1973); 
Llewellyn v. Beasley, Ind. 
App., 415 N.E.2d 789 (1981).' Platte County School District No. 1 v. 
Basin Electric Power Cooperative, [Wyo.], 638 P.2d [1276,] 1278 
[1982]."

[¶8.]     In James S. Jackson Company, Inc. v. Horseshoe 
Creek Limited, supra, we concluded that Jackson failed to satisfy the second condition. 
That is, Jackson 
was unable to show that it was so situated that an absence of intervention would 
impair or impede its ability to protect its interest in the contract for deed or 
the assignment of the contract. We said:

"Jackson's claim in the 
contract for deed is based on its position as a judgment creditor of Horseshoe. 
Jackson will not 
be disadvantaged in such position regardless of the outcome of this 
case.

"If Ludvik prevails in 
the present action, Jackson would not be disadvantaged. As noted 
above, the priorities of Ludvik and Jackson in the contract for deed have 
already been determined. Ludvik's interest has been held to be superior to 
Jackson's interest and is not subject to any lien 
by Jackson. Ludvik v. James S. Jackson Co., Inc., 
supra, 635 P.2d  at 1143. Therefore, a determination of the action in Ludvik's 
favor would not affect Jackson's interest in the contract for 
deed.

"If Horseshoe prevails in 
the present action, and its claim for rescission of its assignment of the 
contract for deed to Ludvik be allowed, Jackson would still have its claim as a 
judgment creditor of Horseshoe. As a practical matter, not only would the claim 
not be impaired, but its position would be bettered and be more secure." 650 P.2d  at 287.

[¶9.]     Jackson distinguishes 
the case at bar on the ground that it has executed upon the equitable interest 
of Horseshoe in the assigned contract and now holds a lien on a payment of 
$25,000 due to Horseshoe from the assignee, Ludvik. Counsel for Jackson make the following 
argument in their brief: 

[¶10.]  "* * * Since this case has gone to trial 
and we now have a judgment to inspect, it should be easy to answer the 
impairment issue. That judgment was for rescission of the assignment contract 
between Horseshoe Creek and Ludvik and on its face would appear to relieve 
Ludvik of the obligation of paying the $25,000.00 due on that assignment. But 
that money is not due to Horseshoe, it is owed to Jackson.

[¶11.]  "If the results of the trial of this case 
are binding on Jackson by res judicata, and defeat its claim 
against Ludvik for the $25,000.00, then its ability to protect its interest has 
certainly been impaired and impeded." Thus, Jackson takes the position that it holds a 
claim against Ludvik for the payment due under the assignment and that 
intervention was necessary to protect that claim.

[¶12.]  We see no substantive difference between 
the case at bar and the earlier action in which Jackson sought to intervene. In both situations 
Jackson's claim 
in the contract for deed is based upon its position as a judgment creditor of 
Horseshoe.

[¶13.]  Courts in other jurisdictions have held 
that a general interest in the collectibility of a judgment is not the sort of 
interest which creates a right to intervene under Rule 
24(a)(2):

"* * * [T]he mere fact 
that the first action may decrease the ability of the intervenor to collect a 
potential judgment against the defendant is insufficient to be considered a 
substantial impairment of an interest for the purposes of Rule 24(a)(2). This is 
so because if

"`[l]ogically extended . 
. . [such a rule] would give the right to intervene in . . . [an] action . . . 
to all persons with potential claims against any party in the . . . action . . . 
on the ground that the outcome of the . . . suit may increase or decrease the 
collectibility of their claims. This would abandon completely the general notion 
that a plaintiff may control his action and the FRCP Rule 24(a)(2) requirement 
that an unrepresented petitioner must show an interest in the underlying 
transaction to support an absolute right of intervention.'

"Hawaii-Pacific Venture Capital Corp. v. 
Rothbard, 564 F.2d 1343 (C.A.9, 1977)." Jet Traders Investment Corporation v. 
Tekair, Ltd., 89 F.R.D. 560, 570 (D.C.Del. 1981).

Jackson did not improve its 
position for purposes of Rule 24(a)(2) by executing on the equitable assets of 
Horseshoe because Jackson did not acquire a claim against Ludvik. 
Jackson 
instituted a summary proceeding in aid of execution1 against its debtor, thereby 
acquiring a lien on whatever equitable interest in the contract for deed that 
Horseshoe possessed. First National Bank 
of Laramie v. Cook, 12 Wyo. 492, 78 P. 674, on petition for rehearing 12 
Wyo. at 522, 78 P. 1083, 1091 (1904). Our previous description of the rights of 
a receiver acting on behalf of a judgment creditor in such a summary proceeding 
applies to the instant case:

"* * * The receiver, by 
his appointment, succeeded only to the title of the judgment debtor and as to 
property incumbered by liens he has only such rights as the judgment debtor had 
at the time of the appointment. Smith Recvrs. 267; Voorhees v. Seymour, 26 Barb. 583; Gardner v. Smith, 29 Barb. 74. In this 
proceeding the court has no authority to order property to be applied to the 
satisfaction of the judgment unless the title of the defendant thereto is clear 
and undisputed." First National Bank of 
Laramie v. Cook, supra, 76 P.  at 677.

Accordingly, 
Jackson, by summarily executing on Horseshoe's assets, succeeded only to such 
rights in the contract as Horseshoe held.2 Since Jackson acquired no claim 
against Ludvik, its position was not improved over that of a general or 
potential judgment creditor for purposes of intervening in a suit which might 
deplete the collectible assets of the judgment debtor.

[¶14.]  We hold that Jackson's position as a 
judgment creditor with an execution order on particular intangible assets 
carried no special right to intervene in a suit to adjudicate the judgment 
debtor's claim to those assets. Jackson continues to hold its position as a 
judgment creditor of Horseshoe following rescission of the assignment of the 
contract for deed and continues to possess a lien upon the equitable assets of 
Horseshoe. Therefore, Jackson's ability to protect its interest in the 
assignment of the contract for deed - which interest was circumscribed by 
Horseshoe's rights in the contract - was not impeded or impaired by the denial 
of intervention. James S. Jackson 
Company, Inc. v. Horseshoe Creek Limited, supra, 650 P.2d  at 
287.

[¶15.]  Appellee Ludvik requests this court to 
determine that there was no reasonable cause for this appeal and to award a 
penalty and damages pursuant to Rule 10.05, W.R.A.P.3 We have held, however, that such 
awards are inappropriate where a discretionary ruling of the trial court is the 
subject of the appeal, because "the standards for review of discretionary 
exercise cannot readily be reduced to black-letter principles." Bacon v. Carey Company, Wyo., 669 P.2d 533, 536 (1983). The propriety of intervention under Rule 24(a)(2), W.R.C.P., is 
just such an issue within the trial court's discretion. Platte County School District No. 1 v. Basin 
Electric Power Cooperative, Wyo., 638 P.2d 1276, 1278 (1982). Therefore, 
appellee's request for a penalty assessment and damages is 
denied.

[¶16.]  The judgment of the district court 
denying appellant intervention as of right is affirmed.

FOOTNOTES

1 Sections 1-17-402 
through 1-17-418, W.S. 1977 establish summary proceedings in aid of execution. 
Section 1-17-411, W.S. 1977, provides in pertinent part:

"The court may order any 
property of the judgment debtor or money due him in the hands of either himself 
or another person, not exempt by law, to be applied toward the satisfaction of a 
judgment."

2 To enforce a claim 
against Ludvik, as Horseshoe's debtor, Jackson would have needed to prove such a claim 
in a proceeding under § 1-17-501, W.S. 1977, our garnishment-in-aid-of-execution 
statute, or under § 1-17-401, W.S. 1977, which provides for a nonsummary civil 
action against persons in possession of property due to the debtor. Schloredt v. Boyden, 9 Wyo. 392, 64 P. 225 (1901); Devou v. Devou, 65 Ohio App. 508, 31 N.E.2d 159 (1939); Akron Chapter No. 300 v. Read, 24 Ohio App. 192, 157 N.E. 315 (1927); Rudolph, Collecting Money Judgments in Wyoming, 6 Wyo.L.J. 
159, 166, 173.

3 Rule 10.05, W.R.A.P., 
provides in pertinent part:

"* * * Unless the court 
certifies that there was reasonable cause for the appeal, there shall * * * be 
taxed as part of the costs in the case, a reasonable fee, to be fixed by the 
court not less than one hundred dollars ($100.00) nor more than five hundred 
dollars ($500.00), to the counsel of the appellee, and to the appellee damages 
in such sum as may be reasonable, not exceeding one thousand dollars 
($1,000.00), unless the judgment or final order directs the payment of money, 
and execution thereof was stayed, when in lieu of such penalty, it shall bear 
additional interest at a rate not exceeding five percent (5%) per annum, for the 
time for which it was stayed, to be ascertained and awarded by the 
court."