Opinion ID: 2772691
Heading Depth: 3
Heading Rank: 1

Heading: Is the claim “unpled?”

Text: [¶38] The parties first dispute whether the claim is “unpled.” Spike argues he did plead a claim for breach of the duty of loyalty, and the water rights self-dealing is included within that claim. He contends the complaint is sufficient if it provides the opposing parties with notice of the claims against them, and that pleadings must be “liberally construed to ensure substantial justice.” Krenning v. Heart Mountain Irrigation Dist. 2009 WY 11, ¶ 30, 200 P.3d 774, 783 (Wyo. 2009). The trustees cite the same case for the proposition that “[a] plaintiff has a ‘fundamental obligation’ to apprise his adversaries of the nature of the claim against them.” Id. [¶39] W.R.C.P. 8 provides, “A pleading which sets forth a claim for relief . . . shall contain . . . (2) a short and plain statement of the claim showing that the pleader is entitled to relief . . . .” W.R.C.P. 8(a). The rule further provides, “Each averment of a pleading shall be simple, concise, and direct. No technical forms of pleading or motions are required.” W.R.C.P. 8(e)(1). All pleadings are to be construed liberally so as to do substantial justice. W.R.C.P. 8(f). Whether the specificity requirement of the rule has been satisfied rests upon whether fair notice has been provided to the opposing party. Harris v. Grizzle, 599 P.2d 580, 583 (Wyo. 1979). [¶40] Our precedent on this issue depends somewhat upon the type of claim that is alleged. For example, when reviewing a negligence claim, we have found that “[n]o specification of the facts upon which the conclusion of negligence is based [need be] included.” Guggenmos v. Tom Searl-Frank McCue, Inc., 481 P.2d 48, 51 (Wyo. 1979); W.R.C.P. Form 9; Harris, 599 P.2d at 583-84; see also BB v. RSR, 2007 WY 4, ¶¶ 12-13, 149 P.3d 727, 732-33 (Wyo. 2007) (finding that a complaint for custody modification alleging that a material change in circumstances had occurred was sufficient). In such cases, a legal conclusion need not be supported by factual allegations to comply with Rule 8. However, in other cases, such as wrongful death claims, we have held, “[T]he pleadings should set out with reasonable certainty the acts on which the liability is based and all facts essential to constitute a legal cause of action for wrongful death.” Harris, 599 P.2d at 583. We have recognized that discovery often serves to apprise the parties of the precise claims made despite vague pleadings. In re U.S. Currency Totaling $7,209.00, 2012 WY 75, ¶ 24, 278 P.3d 234, 240 (Wyo. 2012); BB, 2007 WY 4, ¶ 13, 149 P.3d at 732-33; Watts v. Holmes, 386 P.2d 718, 719 (Wyo. 1963). [¶41] We recently addressed the issue of a defective pleading in the context of piercing the corporate veil. Ridgerunner, LLC v. Meisinger, 2013 WY 31, 297 P.3d 110 (Wyo. 12 2013). In that case, the plaintiffs sued a corporation for breach of contract, and also named one of its officers as a defendant. All of the allegations in the complaint were directed toward the corporation (the contract was between the plaintiffs and the corporation, not the individual officers). Id. at ¶ 13, 297 P.3d at 114-15. The allegations against the officer stated only that the officer was acting as an agent of the corporation. Id. at ¶ 13, 297 P.3d at 115. In affirming the district court’s dismissal of the officer from the complaint, we stated, “While piercing the corporate veil is a ‘doctrine wherein liability for an underlying [cause of action] may be imposed upon a particular individual,’ and not a separate cause of action, the complaint must still ‘contain sufficient information to indicate a desire to proceed under the doctrine of piercing the corporate veil.’” Id. at ¶ 15, 297 P.3d at 116 (internal citations omitted). [¶42] Spike cites Lynch v. Patterson, 701 P.2d 1126 (Wyo. 1985), to support his conclusion that his pleading of the broad claim of breach of the duty of loyalty is sufficient under W.R.C.P. 8. In Lynch, we stated: A complaint which gives fair notice to the opposing party of the claims against him satisfies the specificity standard of notice pleading under our rules of civil procedure. Allegations of particular acts or omissions of the defendant are unnecessary where the duty owed by the defendants appears to exist and to have been breached. This rule holds especially where the facts lie more properly in the knowledge of the adverse party and details of the breach are available through discovery. Id. at 1134 (internal citations omitted). In Lynch, a minority stockholder brought a stockholder derivative action seeking to recover damages allegedly resulting from actions taken by three corporate directors in violation of their fiduciary duties. Id. at 1128. In his complaint the minority stockholder alleged that the defendants illegally removed assets from the corporation to the detriment of the corporation and the benefit of the defendant directors. Id. at 1134. The district court found that the defendants had breached their fiduciary duties when they unilaterally increased their salaries while refusing to declare a dividend. Id. at 1133. The directors appealed, asserting that the issue of increased salaries had not been pled by the plaintiff. Id. We found that, “Although the complaint does not specify excessive salaries, the allegations . . . were sufficient to give notice to the defendants that the plaintiff contested the removal of assets from the corporation, whether in the form of salary increases or otherwise.” Id. at 1134. We went on to state: [The plaintiff] complained that the directors had breached their fiduciary obligations by diverting funds from the corporation to its detriment. This allegation sufficed to inform the defendants that an issue existed as to the 13 reasonableness of the executive salaries and we will not overturn the award for excessive compensation on the ground of a defective complaint. Id. [¶43] Lynch is distinguishable from the facts of this case. There, diversion of assets could reasonably include excessive salaries, sufficient to provide the defendants with adequate notice of that issue. In this case, Spike identified three specific ways in which he contended the trustees had breached their duties of loyalty, none of which gave fair notice that water rights were at issue. We agree with Cam and Julia that the breach of duty of loyalty arising from the water rights was a claim of which they did not have fair notice. [¶44] Here, Spike identified land transactions that he alleged constituted a breach of the duty of loyalty, but he did not identify any water transactions as a basis for that claim. The BRT trustees took a great many actions during the period that Spike now challenges. If we found as Spike urges that the breach of duty of loyalty claim encompasses any and all of those acts, the defendants would potentially be required to prepare to litigate any of the actions they took as trustees. That interpretation stretches the concept of notice pleading too far.