Title: DEV-TECH CORPORATION v. WILSON, MILLER, BARTON & PEEK, INC.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

DEV-TECH CORPORATION v. WILSON, MILLER, BARTON & PEEK, INC. 2004 WY 163102 P.3d 880Case Number: 03-184Decided: 12/10/2004Notice:  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 in order that corrections may be made before final publication in the permanent volume.
October Term, A.D. 2004

 
 

 
DEV-TECH 
CORPORATION, a dissolved

Florida 
corporation; and EURONOTE

INTERNATIONAL 
MANAGEMENT, LTD., a

corporation 
formed under the laws of Gibraltar,

 
 
Appellants(Defendants),

 
 
v.

 
 
WILSON, 
MILLER, BARTON & PEEK, INC., a

Florida 
corporation; and DON BROWN,

 
 
Appellees(Plaintiffs).

 
 
Appeal 
from the DistrictCourtofTetonCounty

The 
Honorable Nancy J. Guthrie, Judge

 
 

Representing 
Appellant Euronote International Management, LTD:

Joseph 
F. Moore, Jr., Glenn W. Myers, and Abigail S. Moore of Moore, Myers & 
Garland, LLC, Jackson, WY.  Argument 
by Mr. Moore.

 
 

Representing 
Appellees:

W. 
Keith Goody, Jackson, 
WY.  Argument by Mr. 
Goody.

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

 
 
*Final 
decision of the court rendered on September 9, 2004.

 
 
  
LEHMAN, 
Justice.

 
 

[¶1]      This is 
an appeal challenging the district court's judgment concerning real property in 
Teton County, Wyoming.  
The district court ordered that a conveyance from Dev-Tech Corporation 
(Dev-Tech) to Euronote International Management, Ltd. (Euronote) be set aside 
and annulled so that the appellees could proceed with their execution.  Specifically, the district court found 
that an option to transfer the TetonCounty property was not exercised in 1995, 
thus the property transfer from Dev-Tech to Euronote represented by a 1998 deed 
was a fraudulent conveyance.  After 
reviewing the record, we hold that the district court's findings were not 
clearly erroneous and affirm.

 
 
 
 
ISSUES

 
 
[¶2]      Euronote presents 
the following issues:

 
 
A.  The 
court erred in concluding that Dev-Tech made a fraudulent conveyance to Euronote 
when the essential elements of a fraudulent conveyance were not included in the 
court's findings or supported by clear and convincing 
evidence.

 
 
B.  The 
court erred in failing to find the existence of a constructive and resulting 
trust on the part of Dev-Tech in favor of Euronote as the result of the exercise 
and substantial performance of the Dev-Tech unwind 
transaction.

 
 
C.  Bare 
legal title under Wyoming law is not subject to 
lien.

 
 
D.  The 
court erred in finding that Appellees' actions in Wyoming were adequate to 
establish an interest in the subject real property superior to that of 
Euronote.  

 
 
Appellees Wilson, Miller, Barton & Peek, Inc. (Wilson Miller) and Don 
Brown state the issues as:

 
 
I.  Did 
Dev-Tech ever exercise the option in a timely fashion to exchange property for 
the Dev-Tech stock owned by Euronote?

 
 
II.  Was 
the transfer of the Wyoming property from Dev-Tech to Euronote in 
1998 a fraudulent transfer?

 
 
III.  Are 
the appellees barred from executing on the Wyoming property due to the amendment of W.S. 
§ 1-17-336?

 
 
 
 
FACTS

 
 
[¶3]      Dev-Tech is a 
dissolved Florida corporation.  Prior to dissolving, Dev-Tech was a 
publicly traded company focusing its business mainly on real estate 
development.  Euronote is a 
Gibraltar entity and is a subsidiary of a 
British company, OEM.  In September 
of 1993, Euronote and Dev-Tech entered into a Capital Stock Purchase 
Agreement.  Under this agreement, 
Euronote transferred property known as the Trails End Ranch located in 
TetonCounty, real estate located in Florida, substantial 
receivables, and cash to Dev-Tech in exchange for Dev-Tech stock and various 
stock options and rights.  This 
arrangement resulted in Euronote becoming approximately a 70% owner of Dev-Tech. 

 
 
[¶4]      However, after 
the 1993 agreement was executed and performed, problems arose because Euronote 
decided that some of Dev-Tech's business practices were not compatible with 
Euronote's business practices.  
These business practices mostly concerned related party or insider 
transactions.  Under the law 
applicable to Euronote, Euronote was required to secure the consent of all of 
its shareholders for each of the Dev-Tech related party transactions, a step 
Euronote and its representatives on the Dev-Tech board were unwilling to 
undertake.  

 
 
[¶5]      Thereafter the 
parties sought to resolve these problems.  
Eventually, on February 24, 1995, the parties, along with a Florida limited 
partnership, DT Partners, Ltd., entered into a new Capital Stock Purchase 
Agreement.  Among other things, the 
provisions of the 1995 agreement basically allowed Euronote to be replaced as 
the Dev-Tech majority stockholder.  
To effect such a change, the 1995 agreement included an option-put 
provision whereby either Dev-Tech or Euronote could essentially elect to unwind 
the 1993 transaction by re-exchanging approximately the real estate assets and 
stock that were exchanged in 1993.  
The 1995 option-put provision read:

 
 
2.1 Option to Acquire Euronote 
Common Shares and Euronote Preferred Shares.

 
 
Euronote hereby grants to Dev-Tech 
the option (the "Euronote Option") to purchase and redeem the Euronote Common 
Shares and the Euronote Preferred Shares from Euronote (with regard to the 
latter, in the form of Euronote's waiver of all of its rights and interests in 
and to the Euronote Preferred Shares) on the terms and conditions set forth 
herein.  Similarly, Dev-Tech grants 
to Euronote the right to "put" the Euronote Common Shares and the Euronote 
Preferred Shares to Dev-Tech on the terms and conditions set forth herein (the 
"Euronote Put").  The Euronote 
Option shall be immediately exercisable, in whole, not in part, and the Euronote 
Put shall be exercisable, in whole, not in part, at any time after the date 
eight months from the Initial Closing Date and each of the put and the option 
shall terminate thirty days after the Euronote Put first becomes 
exercisable.  The exercise price of 
the Euronote Option shall be paid by Dev-Tech transferring all of its right, 
title and interest in and to the following property to Euronote in exchange for 
the Euronote Common and the Euronote Preferred Shares.  Conversely, if the Euronote Put is 
exercised, Euronote shall transfer to Dev-Tech the Euronote Common Shares and 
the Euronote Preferred Shares in exchange for the transfer of the following 
property from Dev-Tech to Euronote[.]  

 
 
Various properties were then listed 
including the Trails End Ranch property.  
The 1995 agreement also stated, "The Initial Closing Date shall occur on 
January 26, 1995, or at such other time and location as may be agreed to by the 
parties."  

 
 
[¶6]      On April 11, 
1996, Wilson Miller filed a civil action in Florida against an individual and an entity 
controlled by William Klohn, a Dev-Tech officer and director.  Dev-Tech was added as a defendant in 
that action on May 5, 1997.  On June 
22, 1998, this action resulted in Wilson Miller's judgment against 
Dev-Tech.  Wilson Miller 
domesticated its foreign judgment in TetonCounty on September 2, 1998.  At that time Dev-Tech was the record 
owner of the Trails End Ranch.

 
 
[¶7]      Mr. Brown, a 
former Dev-Tech director, filed suit against Dev-Tech in Florida on October 30, 
1998.  That suit resulted in Mr. 
Brown's judgment against Dev-Tech entered on February 8, 1999.  Mr. Brown domesticated his foreign 
judgment in TetonCounty on March 10, 
1999.  At that time Dev-Tech was the 
record owner of the Trials End Ranch.  
On June 6, 2000, two documents titled "Judgment Liens" were recorded in 
the TetonCounty land records on 
behalf of Wilson Miller and Mr. Brown.  
On August 9, 2000, a deed conveying the Trails End Ranch property from 
Dev-Tech to Euronote (the Euronote deed) was recorded in the TetonCounty land records. 

 
 
[¶8]      Prior to the 
August 9, 2000 recording of the Euronote deed, the appellees had arranged to 
have the Trails End Ranch property appraised for execution.  On the day that the appraisal was 
complete, August 10, 2000, the appraiser discovered that the Euronote deed had 
been filed.  The deed was 
purportedly executed in England on November 26, 1998.  Brian Schneider, a Euronote agent and a 
former Dev-Tech director, signed the deed for Dev-Tech.  

 
 
[¶9]      Appellees 
thereafter filed this action to set aside that transfer as a fraudulent 
conveyance.  Euronote responded with 
several defenses; the main defense was that in 1995 Dev-Tech had exercised the 
option contained in the 1995 stock agreement.  As a result, Euronote argued that it 
owned the property in 1995, but due to an oversight, the deed was not prepared 
or recorded at that time.  Thus, 
Euronote maintained that there was not a fraudulent conveyance because the 
property had actually been transferred in 1995.  Whether or not the option had been 
exercised became the main issue at trial. 

 
 
[¶10]   Appellees argued that the option 
was never exercised and presented several witnesses on the matter.  One of those witnesses, William Klohn, a 
former Dev-Tech director, testified that his recollection was that the option 
was not exercised.  Also testifying 
was Gerald H. Gould, the chairman of the board of directors.  He testified that it was his duty to 
conduct board meetings and that it was his opinion or remembrance that the 
option was never exercised.  Mr. 
Brown was also on the Dev-Tech board of directors during the relevant time and 
similarly testified that the option was not exercised.  He noted that the Wyoming property was one 
of Dev-Tech's largest assets and that it would not be wise to let it out of the 
company.  

 
 
[¶11]   Euronote presented evidence that 
the option had been exercised.  
Specifically, Euronote called Mr. Schneider to testify and also presented 
several documents.  Mr. Schneider 
testified and stated that the option was exercised on November 29, 1995.  The documents Euronote presented 
included the minutes of the November 30, 1995 board of directors meeting.  Under the heading "New Developments," 
the minutes state that Dev-Tech sent a letter to Euronote exercising its option 
to redeem its shares.  The minutes 
are unsigned although there is a signature line for Mr. Gould as chairman.  Mr. Gould testified that he was at that 
meeting but that he has no recollection of the option being exercised.  Euronote also presented several SEC 
filings that state either that the option was going to be exercised or that the 
option was exercised and set out the history and results of the 
transaction.  The SEC documents 
indicate that the Euronote option was exercisable by Dev-Tech at any time until 
December 9, 1995, and was exercisable by Euronote from November 9, 1995 until 
December 9, 1995.  Euronote also 
presented a letter signed by Dev-Tech's executive vice president and chief 
operating officer dated November 29, 1995, notifying Euronote that Dev-Tech was 
exercising the option, but also stating "[p]lease call me to effect this 
transaction immediately." 

 
 
[¶12]   Following a bench trial, the 
district court found that the option was never exercised and, even if it was 
exercised, it had expired by its own terms, and any attempt to exercise it was 
not effective.  The district court 
additionally found that, on the dates Dev-Tech became liable to the appellees, 
it was either the owner in fee simple or the record owner of the Trails End 
Ranch property.  The court also 
found that at the time of the transfer Dev-Tech was insolvent.  Thus, the district court concluded that 
the transfer of the Trails End Ranch to Euronote was a fraudulent transfer.   Euronote appeals.  

 
 
 
 

STANDARD OF 
REVIEW

 
 
[¶13]   We review a trial court's factual 
determinations made in a bench trial under a clearly erroneous standard.  Keever v. Payless Auto Sales, 
Inc., 2003 WY 147, ¶6, 79 P.3d 496, ¶6 (Wyo. 2003).  We do not weigh the evidence de 
novo.  Id.  Indeed, 

 
 
[w]e do not substitute ourselves for 
the trial court as a finder of facts; instead, we defer to those findings unless 
they are unsupported by the record or erroneous as a matter of law.  Life Care Centers of America, Inc. v. 
Dexter, 2003 WY 38, ¶7, 65 P.3d 385, ¶7 (Wyo. 2003).  We affirm the trial court's findings if 
there is any evidence to support them.  
Id.  We accept the evidence of the prevailing 
party as true and give that party the benefit of all favorable inferences that 
can fairly be drawn from the evidence while disregarding conflicting 
evidence.  Narans v. Paulsen, 
803 P.2d 358, 360 (Wyo. 1990).  A reviewing court will not set aside the 
court's findings merely because it might have reached a different result.  Conner v. Board of County 
Comissioners, Natrona County, 2002 WY 148, ¶23, 54 P.3d 1274, ¶23 (Wyo. 
2002).  A finding can be "clearly 
erroneous" even though there is evidence to support it, if after a review of the 
entire record, the court "is left with the definite and firm conviction that a 
mistake has been committed."  
Hammons v. Table Mountain Ranches Owners Association, Inc., 2003 
WY 85, ¶12, 72 P.3d 1153, ¶12 (Wyo. 2003).  

 
 

Keever, ¶7.  

 
 
 
 

DISCUSSION

 
 
[¶14]   The resolution of the majority of 
the issues raised by the parties hinges on our determination of whether the 
district court's finding that the option was not exercised is clearly 
erroneous.  As noted in our standard 
of review, we affirm the court's findings if there is any evidence to support 
them.  Such is the case with the 
district court's finding that the option was never exercised.  Indeed, the evidence is such that we 
cannot say that the district court's decision is clearly erroneous, and we are 
not left with the definite and firm conviction that a mistake was 
committed.  Keever, ¶7.  

 
 
[¶15]   Specifically, appellees presented 
Mr. Klohn, Mr. Gould, and Mr. Brown who all testified that the option was not 
exercised.  Mr. Klohn specifically 
recalled the November 30, 1995 board meeting. He remembered particular things 
that were discussed at that meeting, including current projects, but he 
specifically stated that he did not recall discussing the Euronote option or 
that it was ever exercised.  He 
further testified that it would make no sense for Dev-Tech to exercise the 
option.  He also noted that, to his 
knowledge in the day-to-day operation of the company following that board 
meeting, the Euronote option was never exercised.  He noted that Dev-Tech's single largest 
asset was the Wyoming property.  He stated that from his perspective, no 
matter what was going on in the company, it would not have made good sense to 
allow some of the company's most important assets to leave the company at that 
time.  

 
 
[¶16]   Mr. Brown, one of the plaintiffs, 
sat on the board of directors during the relevant time frame and also testified 
that the option was never exercised.  
Mr. Gould was the chairman of the board and similarly testified.  He testified that he had no recollection 
that the option was ever exercised.  
He further did not sign the minutes of the meeting wherein it was noted 
that the option was exercised.  

 
 
[¶17]   As noted in the fact section, 
Euronote presented contrary evidence.  
Nevertheless, that evidence was not uncontested.  For instance, appellees' evidence showed 
that other property transactions similar to the option transaction were 
accomplished and recorded in a more formal manner rather than simply noted in 
the minutes of a board meeting as "other developments."  Additionally, if the option were 
exercised, one would expect the deed to be transferred as is normal in a real 
property transaction and specifically required by the stock agreement.  Furthermore, notably absent from 
evidence were the other documents which the 1995 agreement specifically required 
be exchanged upon the exercise of the option.  Those documents include: the stock 
certificates for the Euronote common shares, duly endorsed; the written 
resignation of all but one of the Euronote nominees to the Dev-Tech board of 
directors; Euronote's written waiver of its right to nominate additional members 
to the board of directors; an irrevocable waiver of Euronote's rights under 
Dev-Tech's bylaws which required the approval of a majority of Euronote's 
nominees to the Dev-Tech board of directors for all corporate action; an 
amendment to Dev-Tech's bylaws deleting that provision; an assumption agreement 
evidencing Euronote's agreement to assume liability for the debts, liens, 
judgments or other encumbrances on the Wyoming Properties; a written waiver or 
disclaimer of any and all interest in and to the shares of Dev-Tech common stock 
which Euronote contracted to purchase from Dev-Tech; a certificate of title in 
Euronote's name, evidencing the limited partnership interest in Trade Center 
that Dev-Tech was transferring to Euronote; and the warranty deeds or other 
instruments of conveyance selling, transferring or assigning the Wyoming 
properties to Euronote.   

 
 
[¶18]   It is the district court's duty to 
weigh and reconcile the conflicting evidence.  We will not do so on appeal.  Additionally, we will not set aside the 
court's findings simply because we might have reached a different result.  Keever, ¶7.   While there was in fact evidence 
in Euronote's favor, after reviewing the entire record we find enough evidence 
to support the district court's finding that the option was not exercised; and 
we cannot, therefore, conclude that the finding is clearly erroneous.   

 
 
[¶19]   The court's specific finding was 
that the option was not exercised and, even if the option was exercised, the 
option expired by its own terms and any attempt to exercise the option is not 
effective.  Euronote therefore 
additionally presents argument that the evidence showed that the option had not 
expired before it was exercised and that, even if it had expired, the parties to 
a contract are free to modify the terms at any time and agree to a later 
date.  Because the district court 
found that the option was not exercised and we have decided that this finding 
was not clearly erroneous, we need not address this argument because that 
finding is ultimately determinative.    

 
 
[¶20]   Likewise, Euronote argues that the 
court failed to find the elements of a fraudulent conveyance.  However, most of Euronote's argument is 
based on its contention that the option was exercised in 1995.  For example, Euronote argues in its 
brief that neither Dev-Tech nor Euronote had fraudulent intent when the 
obligation for Dev-Tech to convey the subject property to Euronote arose in 
1995.  However, we have determined 
that the district court's finding that the option was not exercised is not 
clearly erroneous.  This 
determination negates most of Euronote's argument.  

 
 
[¶21]   Furthermore, in harmony with its 
finding that the option was not exercised, the district court found that on the 
date that Dev-Tech became liable to the plaintiffs it was the record owner or 
the owner in fee simple of the Trails End Ranch.  The district court similarly found that 
Dev-Tech was insolvent in 1998 when Dev-Tech presumably transferred the property 
to Euronote and that the transfer was made without consideration.  It appears that, in making such 
findings, the district court considered the elements of Wyo. Stat. Ann. § 
34-14-105 (LexisNexis 2003), which states:  
"Every conveyance made and every obligation incurred by a person who is 
or will be thereby rendered insolvent is fraudulent as to creditors without 
regard to his actual intent if the conveyance is made or the obligation is 
incurred without a fair consideration."  

 
 
[¶22]   Dev-Tech was administratively 
dissolved on May 30, 1997, for failure to file its annual report and had ceased 
to operate.  As such, it was 
perfectly logical for the district court to find that Dev-Tech was insolvent in 
1998, and such a finding is not clearly erroneous.  Indeed, the financial information 
Euronote presented related not to 1998 but to Dev-Tech's finances in 1995.  Likewise, Euronote claims that the 
Dev-Tech stock to be returned to Dev-Tech was the consideration for the 
transaction.  Once again, that claim 
is based on Euronote's contention that the option had been exercised.  The district court found, and we have 
determined that such a finding was not clearly erroneous, that the option had 
not been exercised.  This leads to 
the conclusion that, at the earliest, the conveyance occurred in 1998.  At that time Dev-Tech had been 
dissolved, and there was no evidence that anything was exchanged in 1998.  Consequently, the finding that the 
transfer was without consideration is likewise not clearly erroneous.  

 
 
[¶23]   Euronote also argues that the court 
erred in not addressing its constructive and resulting trust arguments and that 
a party cannot execute on bare legal title.  As with its other arguments, this 
argument is based on its assertion that the option was exercised.  The district court, which found that the 
unwind transaction did not take place, did not err in not addressing the 
argument.  As Euronote claims, we 
have approved the imposition of constructive and resulting trusts, but only in 
proper circumstances.  Rossel v. 
Miller, 2001 WY 60, ¶14, 26 P.3d 1025, ¶14 (Wyo. 2001).  Those circumstances include an 
indication of one or more of the following:  some type of promise, a transfer made in 
reliance on that promise, and unjust enrichment.  Id. at ¶13.   Having found that the option was 
never exercised, these elements are missing.  

 
 
[¶24]   Lastly, Euronote argues that the 
appellees' judgment lien was void before the Euronote deed was recorded; 
therefore, appellees' actions were insufficient to give them an interest 
superior to that of Euronote.  It 
appears Euronote is claiming that, because the appellees failed to comply with 
the limitation period set forth in Wyo. Stat. Ann. § 1-17-336 (LexisNexis 2003), 
they cannot execute on the Trails End Ranch.   We do not agree.  This case does not present merely a 
question of priority between the two competing parties.  Rather, this case involved the 
determination that the Euronote deed was a fraudulent conveyance.  Therefore, it was not simply the 
appellees "judgment lien" that presented the superior interest, but also that 
the Euronote deed was a fraudulent conveyance. 

 
 
[¶25]   Furthermore, § 1-17-336 provides 
that:  "A judgment on which 
execution is not levied before the expiration of one (1) year after its 
rendition shall not operate as a lien on the estate of a debtor."1   As can be seen by the plain 
language, this statute addresses the time in which a filed judgment operates as 
a lien.  Section 1-17-336 does not 
state that the judgment creditor's rights to execute on the debtor's property 
expire.  Instead, it states that, if 
there is no execution within a year, the judgment ceases to operate a lien.  This may affect priority, but it does 
not affect the property available for execution.  Wyo. Stat. Ann. § 1-17-301 governs the 
property available for execution, and it states:  "Except for property exempt by law, all 
property of the judgment debtor, both real and personal or any legal or 
equitable interest therein including any interest of the judgment debtor in 
mortgaged property or property being sold under an executory land contract, is 
subject to execution."  As such, 
even if their lien had expired, the appellees could still execute on the Trails 
End Ranch.  

 
 
 
 

CONCLUSION

 
 

[¶26]   As fully discussed above, we affirm 
the district court's order.  
 

 
 
FOOTNOTES

 
 

1The parties argue about whether the 
1999 version of the statute applies.  
Regardless of which version applies, neither version prevents appellees 
from executing on the property.