Title: Wyoming Nat. Bank of Gillette v. Davis

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Wyoming Nat. Bank of Gillette v. Davis1989 WY 61770 P.2d 215Case Number: 88-270Decided: 03/06/1989Supreme Court of Wyoming
WYOMING 
NATIONAL BANK OF GILLETTE, F/K/A NORWEST BANK OF GILLETTE, N.A., APPELLANT 
(PLAINTIFF),

 
 
v.

 
 
JAMIE SUE 
DAVIS; MARSHALL G. DAVIS; SHARON MILLER; UNITED STATES OF AMERICA AS THE 
INTERNAL REVENUE SERVICE; AND WHC, INC., APPELLEES 
(DEFENDANTS).

 
 
Appeal from 
the District Court, CampbellCounty, Terrence L. O'Brien, 
J.

 
 
Thomas E. 
Lubnau, II, Gillette, for 
appellant.

 
 
Paul J. 
Drew, Gillette, for appellee Jamie Sue 
Davis.

 
 
Don M. 
Empfield, Gillette, for appellee Sharon 
Miller.

 
 
U.S. Dept. 
of Justice, Washington, D.C., Gary R. Allen, William S. Rose, Jr., David English 
Carmack, Thomas R. Lamons, and Richard Allen Stacy, U.S. Atty., Dist. of 
Wyoming, Cheyenne.

 
 
Before THOMAS, URBIGKIT, MACY and GOLDEN, JJ., and 
ROONEY, J., Retired.

 
 

GOLDEN, 
Justice.

 
 

[¶1.]     The question presented 
in this appeal, which involves a priority dispute between competing lien 
creditors, is whether the trial court may enter a nunc pro tunc order in the 
succeeding spring term of court which purports to amend its preceding fall term 
of court judgment against a partnership so as to make the partners as 
individuals liable for the judgment and, thus, give priority to the judgment 
lien creditor.

 
 

[¶2.]     We 
reverse.

 
 
FACTS

 
 

[¶3.]     The parties have 
stipulated to the underlying facts. On July 29, 1983, Sharon Miller filed a 
civil action for damages for defective home construction in the district court 
against "Marshall Davis, Norman Bradley, and Eddie Maples, a partnership, d/b/a 
Triple S. Construction" and others. On May 6, 1984, lots 8C and 8D in a 
CampbellCounty subdivision, 8D 
being the lot at issue in this action, belonged to Gary Davis and Marshall 
Davis, a partnership. On May 7, 1984, Marshall Davis and his wife Jamie Sue 
Davis were divorced. On August 31, 1984, Marshall Davis executed a note and 
mortgage on lot 8D to appellant Wyoming National Bank of Gillette (Bank); the 
mortgage was recorded November 1, 1984. The fall 1984 term of the district court 
opened September 10, 1984. On October 2, 1984, Gary Davis and his wife Mary Kay 
conveyed lots 8C and 8D to Marshall Davis; that deed was recorded November 1, 
1984. On October 22, 1984, Marshall Davis executed a mortgage covering lot 8C to 
Jamie Sue Davis; the mortgage was recorded the same day.

 
 

[¶4.]     On January 23, 1985, 
the IRS filed a tax lien in CampbellCounty against Marshall Davis and Jamie 
Sue Davis. Meanwhile, the Miller lawsuit had been proceeding and on January 17, 
1985, a judgment for $50,000, costs, and disbursements was signed in favor of 
Miller against the three named members of the Triple S. Construction 
partnership, one of whom was Marshall Davis. That judgment was filed January 30, 
1985. The spring 1985 term of the district court opened on February 4, 1985. On 
March 21, 1985, the district court entered an order nunc pro tunc amending 
Miller's January 30, 1985, judgment against the Triple S. Construction 
partnership. The nunc pro tunc judgment allowed Miller to recover jointly and 
severally from the partners as individuals although they were named in her 
original complaint only in their partnership capacities. The IRS filed another 
tax lien on May 29, 1986.

 
 

[¶5.]     On July 9, 1986, the 
Bank filed a complaint against appellees Jamie Sue Davis, Marshall Davis, Sharon 
Miller, the IRS, and WHC, Inc., seeking judgment against Marshall Davis for 
$54,655.68 plus interest and a declaration of the relative rights of the parties 
to lot 8D. Jamie Sue Davis, Sharon Miller, and the IRS answered timely 
requesting a determination of priorities and disbursement according to those 
priorities upon foreclosure. WHC, Inc., and Marshall Davis failed to answer. The 
Bank applied for default against those parties and the clerk of the district 
court entered default against each of them on February 19, 
1987.

 
 

[¶6.]     On July 10, 1987, 
counsel advised the district court that Jamie Sue Davis had filed a petition in 
bankruptcy on March 30, 1987. The district court then ordered the proceedings 
suspended pending the outcome of the bankruptcy petition on April 5, 1988. The 
proceedings resumed on May 3, 1988, after the bankruptcy was 
discharged.

 
 

[¶7.]     All remaining parties 
made pretrial submissions of exhibits during June 1988, and on July 11, 1988, 
those parties attended a hearing before the district court. At the close of that 
hearing the district court ruled that Miller's judgment lien, as reflected by 
the nunc pro tunc order of March 21, 1985, would relate back to the fall term of 
the district court under W.S. 1-17-302 (1977), thus giving Miller's lien first 
priority against Marshall Davis. The district court assigned the Bank second 
priority, leaving the IRS third. A corresponding judgment was entered on August 
23, 1988, and appeals by the Bank and the IRS followed. The IRS subsequently 
dropped its appeal before this court, leaving a priority dispute between the 
Bank and Miller for review.

 
 
ANALYSIS

 
 

[¶8.]     The dispute on appeal 
is whether the priority date of Miller's judgment lien against Marshall Davis as 
an individual, based on the March 21, 1985, nunc pro tunc judgment, relates back 
to the opening day of the fall 1984 term of the district court. In Wyoming, valid judgment 
liens obtain priority under W.S. 1-17-302 (1977),1 which 
provides:

 
 
The lands 
and tenements within the county in which judgment is entered are bound for 
satisfaction thereof from the first day 
of the term at which judgment is rendered, but judgments by confession and 
judgments rendered at the same term in which the action is commenced shall bind 
the lands only from the day on which the judgments are rendered. All other lands 
as well as goods and chattels of the [judgment] debtor are bound from the time 
they are seized in execution.

 
 
(Emphasis 
added).

 
 

[¶9.]     From October 2, 1984, 
forward, Marshall Davis has owned lot 8D as an individual and that property was 
never property owned or claimed by the Triple S. Construction partnership. 
Because of that circumstance, if Miller's March 21, 1985, nunc pro tunc judgment 
was valid against Marshall Davis as an 
individual, and if it relates back to the first day of the term in which the 
original January 30, 1984, judgment against the partners was rendered, then 
Miller's lien has a priority date of September 10, 1984, the first day of the 
fall 1984 term of the district court.2 Conversely, if Miller's nunc pro 
tunc judgment was not valid against Marshall Davis as an individual, then Miller 
has no judgment lien against lot 8D, Davis' personal 
asset.

 
 

[¶10.]  We hold that the district court erred in 
entering its nunc pro tunc order on March 21, 1985, by which it purported to 
amend Miller's January 17, 1984, judgment against the Triple S. Construction 
partnership members as partners to also give Miller an additional substantive 
right of recovery against the partnership members as individuals. When Miller filed her 
original complaint against the Triple S. Construction partnership, W.S. 
17-13-307 (1977)3 gave her a statutory right to 
proceed against the partnership members both as partners and as individuals. See 
also L.C. Jones Trucking Co. v. Superior Oil Co., 68 Wyo. 384, 234 P.2d 802, 
805-06 (1951). That "dual" right, however, must be exercised by the plaintiff in 
accordance with W.S. 1-16-505 (1977)4, which specifically provides: "The 
members of a partnership against which a judgment has been rendered in its firm 
name may by action be made parties to 
the judgment." (Emphasis added).

 
 

[¶11.]  Despite possessing the legal right to sue 
Marshall Davis as a partner and as an 
individual, Miller, the record shows, pursued her original lawsuit against him 
to final judgment without ever amending her action to include him as an 
individual defendant. The original complaint did not name Marshall Davis in his 
individual capacity and neither the record nor the stipulated facts evidence 
service upon him in that capacity. See also W.R.C.P. 4. Consequently, Miller's 
January 30, 1984, judgment against Marshall Davis and the other partners gave 
her a right to impose a judgment lien against partnership assets but not against 
the personal assets of Marshall Davis.

 
 

[¶12.]  Miller, or her counsel, must have 
recognized this error shortly after obtaining the January 30, 1984, judgment 
because she soon petitioned the district court to amend its judgment against the 
partnership to allow her the substantive right to proceed against the property 
of the partners as individuals. The district court acquiesced, apparently 
believing that, since the individual partners could be liable as individuals as well 
as in their capacities as partners, amending the January 30, 1984, judgment 
would not affect their substantial rights. This was error.

 
 

[¶13.]  Amendment of a final judgment, or entry 
of a judgment nunc pro tunc must be done in accordance with W.R.C.P. 60(a), 
which allows for retrospective alteration of a final judgment to correct 
clerical errors or omissions. This court has stated "[t]he nunc pro tunc is 
limited to cases where it is necessary to make the judgment speak the truth, and 
cannot be used to change the judgment. Arnold v. 
State, 76 Wyo. 
445, 306 P.2d 368, 374 (1957)." Eddy v. First Wyoming Bank, N.A.-Lander, 713 P.2d 228, 234 (Wyo. 1986). The district court's actions here 
transgressed this rule of law because Miller's January 30, 1984, judgment did 
not finally establish her legal right to judgment against Marshall Davis and the 
other Triple S. Construction partners individually. The district court's nunc 
pro tunc order was an attempt to add that substantive right. It simply could not 
do so under W.R.C.P. 60(a) and the holding in Eddy.

 
 

[¶14.]  Miller never sued Marshall Davis in his 
capacity as an individual as required by W.S. 1-16-505; Davis was never served in 
that capacity and never received notice that Miller would try to recover from 
his personal assets. Therefore, Davis never had notice and an opportunity to 
defend on that basis. See Nutri-West v. Gibson, 764 P.2d 693, 696-97 (Wyo. 1988). The district 
court's March 21, 1984, nunc pro tunc judgment against Marshall Davis was void 
and did not grant Miller a substantive judgment against Marshall Davis as an 
individual. Miller had no right to impose a judgment lien against lot 8D, which 
was Marshall Davis' personal asset. The Bank has a valid lien on lot 8D and 
Miller does not.

 
 

[¶15.]  Judgment for Miller is reversed in 
accordance with this opinion.

 
 
FOOTNOTES

 
 

1 The quoted 
language in W.S. 1-17-302 (1977) is identical to W.S. 1-17-302 (June 1988 
Repl.).

 
 

2 For a 
discussion of priorities see generally, E. Rudolph, The Wyoming Law of Real 
Mortgages, ch. IX at 119-21 (Wyoming Law Institute 1969).

 
 

3 The 
language in W.S. 17-13-307 (1977) is identical to W.S. 17-13-307 (June 1987 
Repl.)

 
 

4 The 
language in W.S. 1-16-505 (1977) is identical to W.S. 1-16-505 (June 1988 
Repl.).