Robert E. James and Naomi R. James v. Gerald C. James and Gladys M. Winkel ( 2021 )

IN THE SUPREME COURT, STATE OF WYOMING
2021 WY 96APRIL TERM, A.D. 2021
August 20, 2021
ROBERT E. JAMES and NAOMI R.
JAMES,
Appellants
(Plaintiffs),
v. S-20-0272
GERALD C. JAMES and GLADYS
M. WINKEL,
Appellees
(Defendants).
Appeal from the District Court of Carbon County
The Honorable Dawnessa A. Snyder, Judge
Representing Appellants:
Antonio E. Bendezu, Pelton Creek Law, LLC, Fort Collins, Colorado.
Representing Appellees:
Jason M. Tangeman, Nicholas & Tangeman, LLC, Laramie, Wyoming; Kelly M.
Neville, Brown & Hiser, LLC, Laramie, Wyoming. Argument by Mr. Tangeman.
Before FOX, C.J., and DAVIS*, KAUTZ, BOOMGAARDEN, and GRAY, JJ.
* Chief Justice at time of oral argument.
NOTICE: 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 so that correction may be made before
final publication in the permanent volume.
DAVIS, Justice.
[¶1] Plaintiffs Robert and Naomi James filed a complaint asserting multiple claims
against Defendants Gladys Winkel and Gerald James, including a claim to quiet title to real
property located in Saratoga, Wyoming. Defendant James answered and counterclaimed
for ejectment of Plaintiffs from the property, trespass damages, and a declaratory judgment
quieting title in his favor. Defendant Winkel answered separately and counterclaimed for
a declaratory judgment quieting title in Defendant James’ favor.
[¶2] On cross-motions for summary judgment, the district court denied Plaintiffs’ motion
for partial summary judgment. Plaintiffs’ motion asserted the doctrine of equitable
conversion as a basis to quiet title in their favor, and the court denied it on the ground that
Plaintiffs failed to timely plead a claim for relief under the doctrine. The court granted
summary judgment to Defendant James on his quiet title claim, and it granted both
Defendants summary judgment on Plaintiffs’ remaining claims. It thereafter held a trial on
Defendant James’ damages and entered a judgment and order awarding damages.
[¶3] Plaintiffs appeal the summary judgment rulings on their claims for equitable
conversion, specific performance, breach of contract, breach of the implied covenant of
good faith and fair dealing, and promissory estoppel. We affirm.
ISSUES
[¶4] The dispositive issues on appeal are:
1. Did the district court err in ruling on summary judgment
that Plaintiffs could not maintain a claim for equitable
conversion because they failed to timely plead it?
2. Did genuine issues of material fact preclude the district
court’s grant of summary judgment to Defendants on
Plaintiffs’ claims for specific performance, breach of contract,
breach of the implied covenant of good faith and fair dealing,
and promissory estoppel?
FACTS
[¶5] In 2015, Gladys Winkel and Marie Tatum listed property that they owned as joint
tenants with rights of survivorship for sale. The property was located in Saratoga,
Wyoming, and consisted of fourteen lots and several buildings, including seven houses.
[¶6] Plaintiffs Robert and Naomi James wanted to purchase the property, and they asked
Robert’s father, Defendant Gerald James, to find out the lowest price Ms. Winkel and Ms.
1
Tatum would accept for it.1 Gerald had known Ms. Winkel and Ms. Tatum for years and
agreed to do so. Robert and Naomi thereafter made an offer on the property, and when
they were unable to obtain financing, Ms. Winkel and Ms. Tatum agreed to sell the property
to them by contract for deed.
[¶7] On November 27, 2015, Ms. Winkel and Ms. Tatum entered into the contract for
deed with Robert and Naomi, and notice of the contract was recorded on December 29,
2015.2 The contract for deed set a purchase price of $220,000, and it required no down
payment or payment of interest, but it did require a lump-sum payment of $40,000 upon
the sale of other real property Robert and Naomi owned. The following provisions are
relevant to this dispute:
2.
PURCHASE PRICE AND TERMS
The purchase price of the property shall be $220,000 (Two
Hundred and Twenty Thousand). The purchaser does hereby
agree to pay to the order of the Seller the sum of $40,000 (Forty
Thousand) upon the sale of the property they own at 805
Rochester, Saratoga, Wyoming. The purchasers’ property will
remain for sale on the real estate market until sold. The balance
of $180,000 (One Hundred and Eighty Thousand) being due
and payable as follows:
Balance payable in 180 monthly installments of $1000 Dollars
(One Thousand) each, with the first installment being due and
payable on the 1st day of January, 2016 and a like payment on
the first day of each month thereafter until the 1st day of
December, 2030, when the final payment shall be due. No
interest.
* * * *
4.
SECURITY
This contract shall stand as security of the payment of the
obligations of the Purchaser.
1
Because Plaintiffs and Defendant James share the same last name, we refer to them herein by their first
names.
2
Gerald and another individual by the name of Dave Quitter drafted the contract for deed. It is not clear
from the record what Mr. Quitter’s relationship is to the parties.
2
5.
MAINTENANCE OF IMPROVEMENTS
All improvements on the property, including, but not limited
to, buildings, trees or other improvements now on the
premises, or hereafter made or placed thereon, shall be a part
of the security for the performance of this contract and shall
no[t] be removed therefrom. Purchaser shall not commit, or
suffer any other person to commit, any waste or damage to said
premises or the appurtenances and shall keep the premises and
all improvements in as good condition as they are now.
* * * *
7.
POSSESSION OF PROPERTY
Purchaser shall take possession of the property and all
improvements thereon upon the execution of this contract
[a]nd shall continue in the peaceful enjoyment of the property
so long as all payments due under the terms of this contract are
timely made. Purchaser agrees to keep the property in a good
state of repair and in the event of termination of this contract,
purchaser agrees to return the property to the seller in
substantially the same condition as it now exists, ordinary wear
and tear excepted. Seller reserves the right to inspect the
property at any time with notice to the Purchaser.
8.
TAXES, INSURANCE AND ASSESSMENTS
Purchaser shall pay all taxes and assessments levied against the
property. Purchaser shall be solely responsible for obtaining
any insurances.
9.
DEFAULT
If the purchaser shall fail to perform any of the covenants or
conditions contained in this contract on or before the date on
which the performance is required, the Seller shall give the
Purchaser notice of default or performance, stating the
Purchaser is allowed 30 days from the date of the Notice to
3
cure the default or performance. In the event the default or
failure of performance is not cured within the 30 (thirty) day
time period, then Seller shall have the following remedy, in the
discretion of seller:
Give the Purchaser a written notice specifying the failure to
cure the default and informing the Purchaser that if the default
continues for a period of an additional 30 (thirty) days after
service of the notice of failure to cure, that without further
notice, this contract shall stand cancelled and seller may regain
possession of the property as provided herein.
In the event of default and termination of the contract by seller,
Purchaser shall forfeit any and all payments made under the
terms of this contract including taxes and assessments as
liquidated.
The parties expressly agree that in the event of default not
cured by the Purchaser and termination of this agreement, and
Purchaser fails to vacate the premises, Seller shall have the
right to obtain possession by appropriate court action.
10.
DEED AND EVIDENCE OF TITLE
Upon total payment of the purchase price, Seller agrees to
deliver to Purchaser a Warranty Deed to the subject property,
a[t] Sellers [sic] expense, free and clear of any liens or
encumbrances other than taxes and assessments for the current
year. Title insurance on the subject property will be provided
by the Seller at this time.
* * * *
14.
CONVEYANCE
The seller reserves the right to convey, his or her interest in the
above described land and such conveyance hereof shall be
subject to the terms of this agreement.
15.
ENTIRE AGREEMENT
4
This agreement embodies and constitutes the entire
understanding between the parties with respect to the
transactions contemplated herein. All prior or
contemporaneous agreements, understandings,
representations, oral or written, are merged into this
Agreement.
16.
AMENDMENT – WAIVERS
This agreement shall not be modified, or amended except by
an instrument in writing signed by all parties.
[¶8] On September 14, 2018, Marie Tatum passed away, and Ms. Winkel recorded an
affidavit of survivorship to terminate the joint tenancy, which caused legal title to vest in
her alone. Robert and Naomi thereafter continued to make their required $1,000 per month
payments and did so through early April 2019. As of the April 2019 monthly payment,
they had paid $40,000 toward the property’s purchase.
[¶9] In April 2019, Robert and Naomi’s other property sold, and on April 22, Robert and
Naomi delivered a check to Ms. Winkel in the amount of $40,000 to satisfy the lump-sum
payment required under the contract for deed. The parties disagree as to their conversations
concerning that lump-sum payment.
[¶10] Naomi attested that in a conversation in early April 2019, Ms. Winkel told her that
once she received the $40,000 lump-sum payment, she did not want any further payments
and would deed the property to Robert and Naomi. Robert attested that Ms. Winkel told
him essentially the same thing in early April, and again on April 22 when they delivered
the lump-sum payment.
[¶11] Ms. Winkel denied that she ever told Robert and Naomi that she was gifting them
the entire remaining $140,000 balance of the purchase price. She attested:
I informed [Naomi] that I intended to gift Plaintiffs a credit of
$30,000 towards the balance owed under the Contract for Deed
and have the remaining balance of $110,000 paid to Defendant
Gerald James, his brother, and a friend as a gift to these three
individuals. I wanted to make this gift to the three individuals
in memory of service they gave to Marie Tatum and also so my
daughter did not have to deal with Plaintiffs after my passing.
5
[¶12] On May 3, 2019, Ms. Winkel executed a quitclaim deed that conveyed her interest
in the property to Gerald. Robert and Naomi made no further payments under the contract
for deed to either Gerald or Ms. Winkel.
[¶13] On September 30, 2019, Robert and Naomi filed a complaint against Gerald and
Ms. Winkel. The complaint alleged that Ms. Winkel agreed to modify the contract for deed
to require no further payments after Robert and Naomi made the $40,000 lump-sum
payment, and that the modification was evidenced by Ms. Winkel’s writing of the word
“Final” on her carbon copy of the April 22, 2019 receipt for the balloon payment. Along
with other relief, the complaint sought to quiet title to the property in Robert and Naomi’s
favor, a declaration that the contract for deed had been amended to forgive the $140,000
balance remaining after Robert and Naomi made the required lump-sum payment, and an
order directing Ms. Winkel or Gerald to provide them a warranty deed to the property.3
[¶14] On October 18, 2019, Robert and Naomi were sent a notice of default signed by
attorneys for both Gerald and Ms. Winkel. The notice advised them that they were six
months in arrears on payments under the contract for deed and of their right to cure their
default by submitting a payment of $6,000 by November 19, 2019. It further advised that
if they failed to cure the default, Gerald would exercise his rights under the contract for
deed.
[¶15] On November 25, 2019, Gerald filed an answer and counterclaim. Through his
counterclaims he sought ejectment of Plaintiffs from the property, damages for intentional
trespass, a judgment declaring the contract for deed cancelled due to the default and all
monies paid thereunder treated as liquidated damages, and a judgment quieting title in his
favor.
[¶16] On December 4, 2019, Ms. Winkel filed her answer and counterclaim. Through her
counterclaim, she sought declaratory relief identical to that sought by Gerald.
[¶17] On June 22, 2020, the parties filed cross-motions for summary judgment. Plaintiffs
sought partial summary judgment based on the doctrine of equitable conversion. They
asserted that the contract for deed was not an installment land contract but was instead a
conveyance with a mortgage back, and that under the doctrine, legal title to the property
vested in Plaintiffs upon execution of the contract for deed. That being the case, they
argued, Ms. Winkel did not have legal title to quitclaim to Gerald, and they were entitled
to summary judgment on the quiet title claim and Gerald’s counterclaims for ejectment and
trespass.
3
The complaint also asserted claims against Ms. Winkel for: breach of contract; breach of fiduciary duty;
breach of the implied covenant of good faith and fair dealing; promissory estoppel; and fraud. Against
Gerald, the complaint asserted claims for: breach of fiduciary duty; tortious interference with a contract or
business expectancy; and breach of contract.
6
[¶18] Defendants jointly moved for summary judgment on all claims and counterclaims.
In opposition to Plaintiffs’ motion, they responded to the merits of Plaintiffs’ equitable
conversion claim, but also argued that the claim should not be considered because Plaintiffs
failed to plead it.
[¶19] On August 17, 2020, the district court issued an order on the cross-motions for
summary judgment. The court denied Plaintiffs’ motion on the ground that they had failed
to plead equitable conversion as required by W.R.C.P. 8. It further ruled:
Additionally, Rule 15 of the Wyoming Rules of Civil
Procedure sets forth the procedures and timelines for amended
and supplemental pleadings. In the present matter, there is no
indication in the record of Plaintiffs filing an amended
complaint nor seeking leaving of the court to amend their
claims or defenses to include a theory of equitable conversion.
As such, the Court finds Plaintiffs’ claim/defense of equitable
conversion/equitable mortgage untimely.
[¶20] The district court granted Defendants’ motion for summary judgment on all of
Plaintiffs’ claims, and on Defendants’ ejectment and quiet title claims. It denied summary
judgment on Gerald’s claim for damages because it found “material issues of fact regarding
Plaintiffs’ failure to vacate the Property after proper notice.” With respect to its ruling in
favor of Defendants on Plaintiffs’ claims, the court made numerous findings, but the only
one relevant to Plaintiffs’ appeal was its finding that the contract for deed was not modified
to forgive the $140,000 balance remaining after Plaintiffs made their $40,000 lump-sum
payment.
[¶21] On August 25, 2020, the district court held a bench trial on Gerald’s damages claim,
and on September 16, 2020, it issued its judgment and order. The court awarded Gerald
$6,000 in damages for Plaintiffs’ failure to make monthly payments under the contract for
deed for the months of May 2019 through October 2019, and $18,000 for the nine months
Plaintiffs refused to vacate the property and were hold-over tenants. Plaintiffs timely
appealed to this Court.
STANDARD OF REVIEW
[¶22] Plaintiffs do not appeal the damages award and instead appeal only the district
court’s summary judgment ruling on their claims for equitable conversion, specific
performance, breach of contract, breach of the implied covenant of good faith and fair
dealing, and promissory estoppel. “When the parties file cross-motions for summary
judgment and the district court issues a decision completely resolving the case by granting
summary judgment to one party and denying the other’s motion, we review both aspects
of the district court’s order.” Gowdy v. Cook, 2020 WY 3, ¶ 23, 455 P.3d 1201, 1207
7
(Wyo. 2020) (citing Dowell v. Dowell (In re Mark E. Dowell Irrevocable Trust), 2012 WY
154, ¶ 16, 290 P.3d 357, 360 (Wyo. 2012)). Because the district court’s summary judgment
ruling resolved all of Plaintiffs’ claims, and none of those claims were tried on the merits,
we review both its rulings denying Plaintiffs’ motion and granting Defendants’ motion.
[¶23] We review a district court’s ruling on summary judgment de novo and may affirm
on any legal ground appearing in the record. Burns v. Sam, 2021 WY 10, ¶ 7, 479 P.3d
741, 743 (Wyo. 2021) (citing Bear Peak Res., LLC v. Peak Powder River Res., LLC, 2017
WY 124, ¶ 10, 403 P.3d 1033, 1040 (Wyo. 2017)).
We review a district court’s order granting summary judgment
de novo and afford no deference to the district court’s ruling.
Thornock v. PacifiCorp, 2016 WY 93, ¶ 10, 379 P.3d 175, 179
(Wyo. 2016). This Court reviews the same materials and uses
the same legal standard as the district court. Id. The record is
assessed from the vantage point most favorable to the party
opposing the motion ..., and we give a party opposing summary
judgment the benefit of all favorable inferences that may fairly
be drawn from the record. Id. A material fact is one that would
have the effect of establishing or refuting an essential element
of the cause of action or defense asserted by the parties. Id.Candelaria v. Karandikar, 2020 WY 140, ¶ 11, 475 P.3d 548, 551 (Wyo. 2020) (quoting
Varela v. Goshen Cnty. Fairgrounds, 2020 WY 124, ¶ 12, 472 P.3d 1047, 1052 (Wyo.
2020)).
[¶24] Concerning summary judgment rulings based on the pleadings, we have said:
Summary judgments are often used when a claim is barred for
failing to comply with procedural requirements. See, e.g., Case
v. Sink & Rise, Inc., 2013 WY 19, 297 P.3d 762 (Wyo. 2013)
and Sandstrom v. Sandstrom, 884 P.2d 968 (Wyo. 1994)
(affirming summary judgments dismissing claims because of
the appellants’ failures to respond to motion in accordance with
the rules). Although a summary judgment motion may be
based upon affidavits and other documents which assert a lack
of material facts, it may also be based solely on a question of
law which is set out exclusively in the pleadings. Under those
circumstances, a summary judgment motion is functionally
equivalent to a motion to dismiss under Rule 12(b)(6) or a
motion for judgment on the pleadings under Rule 12(c).
Landmark, Inc. v. Stockmen’s Bank & Trust, Co., 680 P.2d
471, 474-75 (Wyo. 1984).
8
Motzco Co. USA, LLC v. A & D Oilfield Dozers, Inc., 2014 WY 5, ¶ 16, 316 P.3d 1177,
1181 (Wyo. 2014).
DISCUSSION
I. District Court’s Ruling on Equitable Conversion
[¶25] Plaintiffs contend that the district court erred in finding that Rule 8 of the Wyoming
Rules of Civil Procedure barred their claim for relief under the doctrine of equitable
conversion, and that they were entitled to summary judgment on the claim. We find the
Rule 8 pleading requirement dispositive.
[¶26] To provide context for our discussion of the pleading requirements for an equitable
conversion claim, we begin with background on the doctrine and its applicability.
Typically, under an installment land contract, the seller of property retains title until the
buyer completes the payments required under the contract.4
In an installment land contract, the seller agrees to accept
payments from the purchaser, generally by a series of
installments over time, until the purchase price as established
by the contract has been paid. When the contract price has been
paid, the seller must deliver a deed to the purchaser. Insurance
Company of North America v. Ventling [Matter of Estate of
Ventling], 771 P.2d 388 (Wyo. 1989); E. Rudolph, [The
Wyoming Law of Real Mortgages,] at 147-48 [(1969)]. Prior to
the final installment payment and delivery of the deed, the
seller retains legal title. Id.; Baldwin [v. McDonald], 156 P. 27[(Wyo. 1916)]; 7 R. Powell, The Law of Real Property
¶ 938.20[1] (1989). Although the purchaser usually is given the
right to possession, his interest in an installment land contract
is equitable, not legal. Insurance Company of North America,
771 P.2d 388; Baldwin, 156 P. 27.
Metro. Mortg. & Sec. Co., Inc. v. Belgarde, 816 P.2d 868, 872 (Wyo. 1991) (quoting Cliff,
777 P.2d at 601).
[¶27] In contrast, when a transaction is a conveyance with a mortgage back, legal title
vests in the buyer/mortgagor upon execution, and the mortgagee holds a security interest
in the property.
4
A contract for deed is also known as an installment land contract. Cliff & Co., Ltd. v. Anderson, 777 P.2d
595, 598 n.5 (Wyo. 1989).
9
The fundamental difference distinguishing a mortgage from an
installment land contract, at least in states applying a lien
theory to mortgages, is that, in a mortgage, fee title has vested
in the purchaser/mortgagor.
Metro. Mortg., 816 P.2d at 872 (quoting Cliff, 777 P.2d at 601).5
[¶28] Departing from this usual distinction between an installment land contract/contract
for deed and a mortgage, the doctrine of equitable conversion operates to deem a buyer
under a contract for deed or an installment land contract the holder of legal title from the
time the instrument is executed.
The equitable conversion theory treats the interest of the
purchaser to be tangible real estate from the time the
installment land contract or contract for deed is executed and
considers the purpose of the retention of title by the vendor to
be a security interest, with the contractual right to the balance
of the purchase price treated as personalty. The net result is that
the seller holds the legal title in trust for the buyer.
Matter of Estate of Ventling, 771 P.2d 388, 390 (Wyo. 1989) (internal citations omitted);
see also Bentley v. Director of Off. Of State Lands & Invs., 2007 WY 94, ¶ 32, 160 P.3d
1109, 1118 (Wyo. 2007).
[¶29] The doctrine applies when a transaction, regardless of being titled a contract for
deed or installment land contract, is in fact a mortgage.6 See Bentley, ¶¶ 33-35, 160 P.3d
at 1118-19 (rejecting application of the doctrine to an installment land contract); Metro.
Mortg., 816 P.2d at 873 (noting that in considering application of the doctrine, a distinction
5
Wyoming applies a lien theory to mortgages. Cliff, 777 P.2d at 601 n.8.
6
Plaintiffs suggest in their briefing that the doctrine applies when a contract is bilateral rather than
unilateral. That is not the correct distinction. “A unilateral contract results from an exchange of a promise
for an act, while a bilateral contract results from an exchange of promises.” 1 Williston on Contracts § 1:17
(4th ed. May 2021); see also Brodie v. Gen. Chem. Corp., 934 P.2d 1263, 1265 (Wyo. 1997). An
installment land contract or contract for deed may be a unilateral contract. Metro. Mortg., 816 P.2d at 875.
It may also, however, be a bilateral contract if it contains an exchange of promises. See, e.g., Gross v.
Regor Fin. Co., 96 F.2d 37, 38 (5th Cir. 1938) (holding that a bilateral and not a unilateral contract was
created when a purchaser promised to pay for land in installments and the seller promised to deliver a deed
upon final payment). The fact that an installment land contract or contract for deed is bilateral does not
implicate the doctrine of equitable conversion. The doctrine applies only when the parties enter into a
bilateral agreement that is the equivalent of a mortgage. Metro. Mortg., 816 P.2d at 873. An installment
land contract is not the functional equivalent of a mortgage absent clear proof that the parties intended to
create a mortgagor-mortgagee relationship. Id. at 872 (quoting Cliff, 777 P.2d at 600-01).
10
must be made between an installment land contract and “a bilateral agreement equivalent
to a mortgage, either in law or equity”).7
[¶30] The instrument the parties executed in this case was titled a contract for deed. It
provided that the seller would retain title to the property until the purchase price was paid,
and Ms. Winkel did in fact retain legal title, which makes it look very much like the contract
for deed or installment land contract that it purported to be. Plaintiffs do not dispute this,
but they contend that the contract also contains security terms that reflect the parties’
intention to execute a conveyance with a mortgage back. Based on that intent to create a
mortgage, they argue that under the doctrine of equitable conversion, they are entitled to
be treated as if they held legal title from the date the contract was executed.
[¶31] The district court refused to consider Plaintiffs’ equitable conversion argument
because they did not timely plead it. Plaintiffs contend that this was error because: 1)
equitable conversion is not something that must be pled; and 2) even if it were required to
be pled, they timely and adequately pled it. We disagree and conclude that the court
properly refused to consider the claim.
[¶32] Rule 8(a)(2) of the Wyoming Rules of Civil Procedure specifies that a “pleading
that states a claim for relief must contain a short and plain statement of the claim showing
that the pleader is entitled to relief[.]”
This rule is based upon the theory of notice pleading and only
requires that a plaintiff “plead the operative facts involved in
the litigation so as to give fair notice of the claim to the
defendant.” Further, “pleadings must be liberally construed in
order to do justice to the parties....”
Acorn v. Moncecchi, 2016 WY 124, ¶ 66, 386 P.3d 739, 759 (Wyo. 2016) (quoting
Ridgerunner, LLC v. Meisinger, 2013 WY 31, ¶ 12, 297 P.3d 110, 114 (Wyo. 2013)); see
also Forbes v. Forbes, 2015 WY 13, ¶ 39, 341 P.3d 1041, 1054 (Wyo. 2015) (“Whether
the specificity requirement of the rule has been satisfied rests upon whether fair notice has
been provided to the opposing party.”) (quoting Harris v. Grizzle, 599 P.2d 580, 583 (Wyo.
1979)).
A. Requirement that Doctrine of Equitable Conversion be Pled
[¶33] Plaintiffs contend that they were not required to plead their equitable conversion
claim because application of the doctrine of equitable conversion is a question of how the
7
An equitable mortgage is “an instrument that was not properly prepared or executed to constitute a legal
mortgage.” Marple v. Wyo. Prod. Credit Union, 750 P.2d 1315, 1319 n.5 (Wyo. 1988). We have
recognized that distinguishing between equitable and legal mortgages is of little benefit in determining the
effect to be given a transaction. Id.11
contract for deed is interpreted, as opposed to a claim for relief or an affirmative defense
under Rule 8. We have previously rejected this distinction in determining whether a matter
must be pled.
[¶34] In Ridgerunner, the plaintiffs filed a complaint against a corporation and one of its
owners. ¶ 3, 297 P.3d at 112. The individually named owner moved to dismiss the claims
against him because the complaint made no allegations that would justify piercing the
corporate veil. Id. ¶ 4, 297 P.3d at 112. In upholding the dismissal, we first observed that
“this Court has long recognized that disregarding the corporate entity, or piercing the
corporate veil, is a judicially created equitable doctrine used in situations where
‘corporations have not been operated as separate entities as contemplated by statute and,
therefore, are not entitled to be treated as such.’” Id. ¶ 14, 297 P.3d at 115 (quoting Kaycee
Land & Livestock v. Flahive, 2002 WY 73, ¶ 6, 46 P.3d 323, 326 (Wyo. 2002)). We then
held:
While piercing the corporate veil is a “doctrine wherein
liability for an underlying cause of action may be imposed
upon a particular individual,” Dombroski v. WellPoint, Inc.,
173 Ohio App.3d 508, 879 N.E.2d 225, 231 (2007), rev’d on
other grounds by 119 Ohio St.3d 506, 895 N.E.2d 538 (2008)
(quoting Geier v. Nat’l GG Indust., 1999 WL 1313640 (Ohio
App. 11 Dist.)), 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.” Dombroski, 879 N.E.2d at 231, rev’d on other grounds
by 895 N.E.2d 538.
Ridgerunner, ¶ 15, 297 P.3d at 116.
[¶35] This reasoning applies with equal force to a party’s desire to seek relief under the
doctrine of equitable conversion. Like piercing the corporate veil, the doctrine of equitable
conversion changes the nature of the relief to which the parties to a land contract may be
entitled, and it may change the course of litigation over the contract.
Our cases structure a presumption that an instrument such as
this is a “unilateral contract” pursuant to which the seller is
limited to forfeiture as a remedy, but they also recognize that a
contrary intention can be established by either party. The claim
of a contrary contention can first be raised by the seller simply
by eschewing forfeiture as the remedy and seeking the
alternative remedy of foreclosure followed by a deficiency.
The question of the intention of the parties is squarely raised
when the seller proceeds in that fashion and, in treating with
12
that issue, the court must address both the written agreement
and the surrounding circumstances. It is likely that the issue
will require a trial in most cases in the absence of an admission
by the purchaser that the remedy invoked by the seller is
correct.
Conversely, the purchaser can assert this issue by bringing an
action for relief if the seller proceeds to assert the remedy of
forfeiture. In the absence of any admission by the seller, the
claim that a bilateral contract is present would require a trial in
most cases because of the necessity to consider the written
agreement and the surrounding circumstances to discern intent.
It appears that, once the question is raised, any presumption
that favors an installment land contract can be rebutted by the
party asserting a bilateral contract if that party can demonstrate
an intent to create a mortgage.
Metro. Mortg., 816 P.2d at 875.
[¶36] Given that application of the doctrine of equitable conversion turns on the parties’
intent, as gleaned from the written contract and the surrounding circumstances, invoking it
will most certainly affect how the parties approach discovery. Moreover, the doctrine also
affects the parties’ remedies and clearly may affect the course of litigation. That being the
case, we hold that a party seeking to invoke it must plead sufficient facts to put the other
party on notice.8
B. Adequacy of Plaintiffs’ Pleadings
[¶37] Although the district court’s ruling on Plaintiffs’ equitable conversion claim was a
denial of their motion for summary judgment, the ruling was solely a question of law based
on the pleadings and was the functional equivalent of a W.R.C.P. 12(b)(6) dismissal. See
Motzko, ¶ 16, 316 P.3d at 1181. We will therefore review the ruling as we would a Rule
12(b)(6) dismissal and accept the facts alleged in the complaint as true and view them in
the light most favorable to Plaintiffs. See Dockter v. Lozano, 2020 WY 119, ¶ 6, 472 P.3d
362, 364 (Wyo. 2020) (“We employ the same standards and examine the same materials
as the district court: we accept the facts alleged in the complaint . . . as true and view them
8
We are not convinced otherwise by Plaintiffs’ suggestion that in other cases this Court raised the doctrine’s
applicability sua sponte. First, the two cases that Plaintiffs cite were both disputes over whether the remedy
under the contract at issue was foreclosure or forfeiture. See Cliff, 777 P.2d at 598; Marple, 750 P.2d at
1317. In addressing that dispute, the Court in both cases addressed whether the contracts were installment
land contracts or mortgage agreements, but it did not in either case discuss the doctrine of equitable
conversion. Id. Additionally, the question of what specificity is required in pleading grounds for relief
under a land contract was not an issue raised or addressed in either case.
13
in the light most favorable to the non-moving party.”) (quoting Craft v. State ex rel. Wyo.
Dep’t of Health, 2020 WY 70, ¶ 9, 465 P.3d 395, 399 (Wyo. 2020)).
[¶38] Even viewing the facts pled in the light most favorable to Plaintiffs, we are unable
to find any allegations that would put Defendants on notice that Plaintiffs intended to
invoke the doctrine of equitable conversion. First, the term equitable conversion does not
appear in Plaintiffs’ complaint or in their answer to Defendants’ counterclaims.
Additionally, as discussed earlier, application of the doctrine depends on the existence of
a mortgage, either legal or equitable. Yet neither Plaintiffs’ complaint nor their answer to
Defendants’ counterclaims alleged that the installment land contract was, or created, a
mortgage. Nor did either claim that Defendants were limited to a remedy of foreclosure or
that Plaintiffs had a statutory right of redemption.9
[¶39] Plaintiffs nonetheless contend that the complaint was sufficient to put Defendants
on notice because: 1) it contained an allegation that Plaintiffs had held equitable title to the
property since November 27, 2015; and 2) the contract for deed was attached to the
complaint and the applicability of the doctrine was “plainly evident on the face of that
contract.” We disagree.
[¶40] The allegation that Plaintiffs held equitable title to the property as of November 27,
2015 would have done little to alert Defendants to Plaintiffs’ equitable conversion claim.
Equitable title is the interest a buyer has under an installment land contract. See Metro.
Mortg., 816 P.2d at 872 (“Although the purchaser usually is given the right to possession,
his interest in an installment land contract is equitable, not legal.”) (quoting Cliff, 777 P.2d
at 600-01); Ventling, 771 P.2d at 389 (under installment land contract, “[t]he interest of the
buyer is equitable, not legal”); see also Cash v. Granite Springs Retreat Ass’n, Inc., 2011
WY 25, ¶ 17, 248 P.3d 614, 620 (Wyo. 2011) (equitable title is “the right to receive legal
title upon performance of an obligation”). Equitable conversion, on the other hand,
operates to convert a buyer’s equitable interest under an installment land contract into a
legal one. See Bentley, ¶ 32, 160 P.3d at 1118 (“The equitable conversion theory treats the
interest of the purchaser to be tangible real estate from the time the installment land contract
or contract for deed is executed[.]”); see also Ventling, 771 P.2d at 390 (under the doctrine
of equitable conversion, “[t]he net result is that the seller holds the legal title in trust for
the buyer”). Plaintiffs’ allegation that they held equitable title was thus consistent with an
installment land contract and inconsistent with their equitable conversion claim and
therefore obviously would not have put Defendants on notice.
[¶41] Plaintiffs’ suggestion that attaching the contract for deed to the complaint should
have placed Defendants on notice of their equitable conversion claim is likewise
9
If the contract for deed were a mortgage, its forfeiture provision would be unenforceable and Defendants’
sole remedy would be foreclosure and a public sale. Metro. Mortg., 816 P.2d at 872. Additionally,
Plaintiffs would have a statutory right of redemption. Cliff, 777 P.2d at 601; see also Wyo. Stat. Ann. § 1-
18-103 (LexisNexis 2021).
14
unpersuasive. It is akin to the argument we rejected in Ridgerunner, that simply naming
the owner of a corporation as a defendant is sufficient to place him on notice that the
plaintiffs sought to pierce the corporate veil.
The complaint, however, even when liberally construed, does
not indicate a desire to pierce the corporate veil. Although the
appellants named Richard Meisinger as an individual
defendant, the complaint does not contain any information or
allegations, such as the factors the courts consider when
determining whether it is proper to pierce the corporate veil,
which would put the appellees on notice of that desired intent.
Ridgerunner, ¶ 16, 297 P.3d at 116.
[¶42] Similarly, Plaintiffs’ allegations concerning the contract for deed did not evidence
a desire to have it interpreted as a mortgage. See Sannerud v. Brantz, 928 P.2d 477, 481
(Wyo. 1996) (outlining factors relevant to determining whether transaction should be
considered a mortgage). Their allegations instead related solely to their claim that the
contract for deed was modified to forgive $140,000 of the purchase price and transfer title
to Plaintiffs. In the context of those allegations, we can see no reason that having the
contract for deed attached to the complaint would have put Defendants on notice of an
equitable conversion claim.
[¶43] Plaintiffs were required to plead facts sufficient to put Defendants on notice that
they intended to seek relief under the doctrine of equitable conversion. They did not do
so, and we therefore uphold the district court’s denial of their motion for summary
judgment on that claim.
II. District Court’s ruling on Plaintiffs’ claims for specific performance, breach of
contract, breach of the implied covenant of good faith and fair dealing, and
promissory estoppel
[¶44] As indicated earlier, the district court made numerous findings when it granted
Defendants summary judgment on Plaintiffs’ claims for specific performance, breach of
contract, breach of the implied covenant of good faith and fair dealing, and promissory
estoppel. The sole finding that Plaintiffs challenge is that the contract for deed was not
modified to forgive $140,000 of the purchase price.
[¶45] Plaintiffs claim that the contract for deed was amended to forgive $140,000 of the
purchase price when Ms. Winkel wrote the word “final” on the receipt documenting their
$40,000 lump-sum payment and told them they owed her nothing more. The district court
found that because the notation on the receipt was not signed by either party and appeared
15
only on Ms. Winkel’s copy of the receipt, it was not a valid written amendment, as the
contract for deed required for any modification.
[¶46] Plaintiffs contend that the court erred because our precedent allows for oral
modification of a contract even when that contract requires all amendments to be in writing.
They further argue that the parties’ dispute over the circumstances surrounding the notation
on the receipt, along with oral promises Ms. Winkel made to forgive the $140,000, created
genuine issues of material fact that precluded summary judgment.
[¶47] Plaintiffs are correct that even when a contract contains a clause requiring any
modification to be in writing, we may in appropriate circumstances recognize an oral
modification. See Ruby Drilling Co., Inc. v. Duncan Oil Co., Inc., 2002 WY 85, ¶ 11, 47
P.3d 964, 968 (Wyo. 2002) (“We have further indicated that an oral modification of a
written agreement may be possible even when the agreement contains a no-unwritten-
modification clause. The party asserting that a written agreement was modified by the
subsequent expressions or conduct of the parties must prove so by clear and convincing
evidence.”). We need not decide this question, however, because the lack of consideration
for the alleged modification provides an independent basis to uphold the district court’s
ruling. See Burns, ¶ 7, 479 P.3d at 743 (“This Court . . . may affirm a summary judgment
on any legal grounds appearing in the record.”).
[¶48] “[M]odification of an agreement is void unless supported by consideration.” Knapp
v. Landex Corp., 2006 WY 36, ¶ 14, 130 P.3d 924, 928 (Wyo. 2006) (citing Schlesinger v.
Woodcock, 2001 WY 120, ¶ 14, 35 P.3d 1232, 1237 (Wyo. 2001)). “Consideration may
take a variety of forms including the performance of some act, a forbearance, or the
creation, modification, or destruction of a legal relationship,” but it cannot be “an
obligation the promisor is already legally required to perform.” Schelsinger, ¶ 14, 35 P.3d
at 1237 (citing Prudential Preferred Properties v. J and J Ventures, Inc., 859 P.2d 1267,
1272 (Wyo. 1993); Prows v. State, 822 P.2d 764, 768 (Utah 1991)).
[¶49] Plaintiffs contend that Ms. Winkel modified the contract for deed after they made
the $40,000 lump-sum payment in April 2019. It is not clear that Plaintiffs assert that the
$40,000 payment was consideration for the modification, but it certainly could not have
been because they were already obligated to make that payment under the contract for deed.
See, e.g., Schlesinger, ¶ 14, 35 P.3d at 1237-38 (“Payment of a debt which is due and
undisputed does not constitute consideration for a promise. Likewise, a mere promise to
pay a debt for which the promisor is already legally bound does not constitute a
consideration sufficient to support a new contract.”); Roussalis v. Wyoming Med. Ctr., Inc.,
4 P.3d 209, 239 (Wyo. 2000) (“[T]his Court follows the ‘pre-existing duty rule,’ namely,
an agreement to do what one is already bound to do cannot serve as consideration to support
a modification.”). Beyond that, Plaintiffs have cited no evidence of consideration for the
modification and have in fact admitted there was none. Robert James testified:
16
Q. Did you provide Ms. Winkel with anything of value in
– in exchange for that $140,000?
A. No.
[¶50] Naomi James testified:
Q. And you guys are now gifted $140,000, correct?
A. I wouldn’t characterize it as a gift. It was our contract
was ended.
Q. Why wouldn’t it be a gift? You didn’t give – you and
Robby didn’t give Gladys or Gerald anything. You’re getting
a $140,000 benefit, correct?
A. Correct.
Q. So that’s a gift, right?
A. Again, I don’t know that I would characterize it as a gift.
She just doesn’t want any more money from us.
Q. And you didn’t give her anything else for the $140,000,
correct?
A. No.
[¶51] Because the alleged modification was not supported by consideration, it is void. We
therefore uphold the district court’s grant of summary judgment to Defendants on
Plaintiffs’ claims for specific performance, breach of contract, breach of the implied
covenant of good faith and fair dealing, and promissory estoppel, which Plaintiffs
acknowledge are all claims premised on the alleged modification of the contract for deed.
[¶52] Affirmed.
17