Northern Arapaho Tribe, a Federally-Recognized Indian Tribe and the Wind River Hotel & Casino, an Enterprise Wholly Owned By an Arm of the Northern Arapaho Tribe v. Baldwin, Crocker & Rudd, P.C. and Kelly Rudd ( 2023 )

THE SUPREME COURT, STATE OF WYOMING
2023 WY 101OCTOBER TERM, A.D. 2023
October 24, 2023
NORTHERN ARAPAHO TRIBE, a
federally-recognized Indian Tribe and THE
WIND RIVER HOTEL & CASINO, an
enterprise wholly owned by an arm of the
Northern Arapaho Tribe,
Appellants
(Plaintiffs),
S-22-0265
v.
BALDWIN, CROCKER & RUDD, P.C. and
KELLY RUDD,
Appellees
(Defendants).
Appeal from the District Court of Fremont County
The Honorable Thomas T.C. Campbell, Judge
Representing Appellant:
Lucas Buckley and JoAnna S. DeWald* of Hathaway & Kunz, LLP, Cheyenne,
Wyoming; and Adam G. Unikowsky of Jenner & Block, LLP, Washington, DC.
Argument by Mr. Unikowsky.
Representing Appellee:
Scott E. Ortiz and Zara S. Mason of Williams, Porter, Day, Neville, PC, Casper,
Wyoming. Argument by Mr. Ortiz and Ms. Mason.
Before FOX, C.J., and KAUTZ, BOOMGAARDEN, GRAY and FENN, JJ.
* An Order Allowing Withdrawal of Counsel was entered on August 7, 2023.
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.
FENN, Justice.
[¶1] The Northern Arapaho Tribe and the Wind River Hotel & Casino (collectively the
Tribe) filed suit against their former attorneys, Baldwin, Crocker & Rudd, P.C., and Kelly
Rudd (collectively BCR), seeking injunctions for the return of tribal funds and documents,
an accounting, and damages for conversion and civil theft. The district court granted partial
summary judgment in favor of BCR on the claims for an accounting and injunctions. The
conversion and civil theft claim proceeded to a jury trial where the jury found in favor of
BCR. The Tribe appeals claiming the district court erred when it imposed sanctions on the
Tribe under Rule 11 of the Wyoming Rules of Civil Procedure (W.R.C.P.) and when it
granted summary judgment in favor of BCR on the accounting claim. The Tribe also
asserts the district court’s admission of irrelevant racially charged evidence resulted in
prejudice that warrants reversal of the jury’s verdict. We reverse in part and affirm in part.
ISSUES
[¶2] The Tribe raises three issues, which we rephrase as follows:
I. Did the district court err when it granted BCR’s motion
for sanctions under W.R.C.P. 11?
II. Did the district court err when it granted BCR’s motion
for summary judgment on the Tribe’s accounting claim?
III. Does the district court’s admission of irrelevant racially
charged evidence warrant reversal?
FACTS
Tribal Government and History with BCR
[¶3] The Tribe is a federally recognized Indian Tribe located on the Wind River
Reservation. The Wind River Hotel & Casino is an economic arm of the Tribe, and it is
wholly owned by the Tribe. The Tribe has approximately 10,650 enrolled members. The
Tribe has two main governing bodies: the Northern Arapaho Business Council (NABC)
and the Northern Arapaho General Council (General Council). The NABC is the executive
branch of the Tribe, and it handles the Tribe’s day-to-day affairs. The NABC is made up
of six members, who are elected every two years. The Tribe does not have a constitution,
and the NABC acts through passing binding resolutions. The NABC attempts to act by
consensus, but a majority vote of four members constitutes a controlling decision. The
NABC answers to the General Council. The General Council is the “supreme governing
body” of the Tribe, and it is made up of all the adult members of the Tribe, who may
convene a quorum of 150 members to consider and pass General Council resolutions.
1
[¶4] BCR and its partners, Andrew Baldwin, Berthenia Crocker, and Kelly Rudd, acted
as counsel for the Tribe in various capacities from 1988–2019. The Tribe asked BCR to
perform a wide variety of work. BCR became involved in housing matters, gaming issues,
water projects, revision or creation of tribal law, custody cases, an eagle permit case, and
many other legal matters. The Tribe has 60–70 different programs that provide services to
tribal members. With the permission of the NABC, many of these program directors
reached out to BCR for legal assistance. Eventually, ninety percent (90%) of BCR’s
practice consisted of work for the Tribe.
[¶5] BCR achieved many successes on behalf of the Tribe. BCR helped the Tribe
achieve its dream of making the Wind River Casino a Class III casino, which generates
millions of dollars in revenue every year for the Tribe. BCR also achieved a $6.75 million
settlement with Marathon Oil and a $1.2 million settlement with Verizon on behalf of the
Tribe.
The Change in Billing Format
[¶6] Over the course of their approximately 30-year relationship, BCR billed the Tribe
for millions of dollars in fees, including more than $8 million in fees and expenses between
2012 and 2019. For many years, BCR sent detailed bills to the Tribe’s finance office.
These bills contained confidential information including the names of some families who
were receiving legal services. The NABC became concerned when some of this
information leaked out into the public domain through employees in the finance office. At
the request of the NABC, BCR stopped providing detailed bills and started giving the
NABC a simplified “Monthly Billing Summary.” These summaries showed lump sums
for fees incurred in general categories of cases. However, they did not show how many
hours were being billed per legal matter, what work was being performed, which attorney
had performed that work, or the hourly rates charged for that work. One of the BCR
partners would present the Monthly Billing Summaries to the NABC for approval. BCR
informed the NABC the detailed billing statements were available for them to examine at
BCR’s offices at any time, and on the few occasions when a member of the NABC
requested detailed billing statements, BCR provided them via email. Some members of
the NABC also occasionally traveled to BCR’s offices to review the detailed bills.
[¶7] For most of the parties’ relationship, the Tribe paid BCR’s fees from the Tribe’s
general fund. However, due to a downturn in the energy market, beginning in 2017, the
NABC made the decision to pay those funds directly from BCR’s trust account which held
the proceeds received from a lawsuit related to the restoration of the Wind River.
Breakdown of BCR’s Relationship with the Tribe
2
[¶8] Although BCR acted as lead counsel for the Tribe, the Tribe occasionally hired
outside counsel to handle certain matters. Sometime around 2002, the Tribe asked BCR to
help it create a policy that would ensure there was some coordination between all the
outside attorneys who were working on special projects for the Tribe. The Tribe wanted
to ensure these attorneys were not taking inconsistent positions before any court or agency.
BCR helped the Tribe prepare a policy called the Legal Affairs of the Northern Arapaho
Tribe Policies and Procedures (2002 Legal Affairs Policy). This policy required BCR to
complete conflicts of interest checks for any outside counsel. The 2002 Legal Affairs
Policy considered it a potential conflict of interest for outside counsel to represent clients
with interests or positions adverse to the interests of the Tribe. Under this policy, BCR
made recommendations to the NABC about whether or not to hire a firm, but the ultimate
decision was always left to the NABC.
[¶9] In the fall of 2018, Roy Brown,1 Chairman of the NABC at that time, decided he
wanted to hire a different lobbyist for the Tribe in Washington, D.C. He reached out to his
law school friend, Craig Williams, who worked as a lobbyist with the law firm Kilpatrick,
Townsend and Stockton, LLP (KTS). At that time, Chairman Brown only intended for
KTS to do some lobbying for the Tribe. He did not intend for KTS to replace BCR as lead
counsel for the Tribe. Chairman Brown was not reelected to the NABC in November 2018.
[¶10] In February 2019, with the approval of the NABC, Councilman Spoonhunter,2 who
was Chairman of the NABC at that time, reached out to Mr. Williams and asked if KTS
could perform an evaluation of the Casino’s CEO, Jim Conrad, whose contract was going
to expire in June. Councilman Spoonhunter only intended for KTS to perform the
evaluation, and he did not intend for KTS to replace BCR at this time. The NABC passed
a resolution authorizing KTS to complete an evaluation of Mr. Conrad.
[¶11] Toward the end of April 2019, Keith Harper of KTS contacted BCR to schedule an
interview about Mr. Conrad’s performance and to obtain documents. Through this
communication, BCR informed Mr. Harper that KTS needed to comply with the conflicts
of interest provision of the 2002 Legal Affairs Policy. Mr. Harper informed BCR that KTS
had performed its own conflicts check before accepting the representation; he otherwise
declined to cooperate with BCR.3 BCR found Mr. Harper’s response odd. It was not the
type of response BCR typically received when vetting outside counsel, so the firm began
looking into KTS’s potential conflicts. BCR learned KTS was associated with a named
defendant in an opioid case the Tribe had filed. BCR also learned a KTS attorney, Larry
1
Chairman Brown was chairman of the General Council at the time of the trial, so we will refer to him as
Chairman Brown throughout this opinion.
2
Councilman Spoonhunter was Co-Chairman of the NABC from 2016–2018, Chairman from 2018–2020,
and a Councilman at the time of trial. We will refer to him as Councilman Spoonhunter throughout this
opinion.
3
Unbeknownst to BCR, the engagement letter the NABC signed with KTS contained an express waiver of
all conflicts of interests.
3
Roberts, who was then the Principal Assistant Secretary for Indian Affairs, had signed an
executive order that adversely impacted the Tribe’s tribal court. Both of these matters
would have been considered potential conflicts under the 2002 Legal Affairs Policy.
[¶12] In early May, two partners with BCR met with some of the NABC members to
discuss the conflicts issues. Councilman Spoonhunter was traveling at that time, so the
BCR partners went to NABC chambers and discussed the issue with the three NABC
members who were present. They advised BCR to reach out to Councilman Spoonhunter.
After speaking with BCR, Councilman Spoonhunter believed it was the consensus of the
other NABC members that KTS had a conflict of interest. However, Councilman
Spoonhunter talked to the other Council members when he returned, and the majority of
the NABC decided they wanted KTS to proceed with the evaluation. Councilman Addison
disagreed. He wanted BCR to enforce the conflicts policy. Ultimately, KTS completed the
evaluation with limited cooperation from Mr. Conrad and BCR.
[¶13] The NABC was surprised by the “pushback” it received on having KTS perform
Mr. Conrad’s evaluation. Several members of the NABC felt BCR was siding with Mr.
Conrad instead of carrying out the wishes or express instructions of the Council, and they
started to question whether BCR was acting in the best interests of the Tribe. In response,
the majority of the NABC voted to repeal the 2002 Legal Affairs Policy on May 20, 2019.
That same day, the majority of the NABC sent BCR a letter terminating the firm from
representing the Tribe on any gaming matters.
[¶14] In early June, a majority of the NABC voted to terminate BCR’s contract, and they
passed a resolution ordering BCR to return all tribal funds and documents. On June 7,
2019, the Tribe authorized David Clark, an independent contractor providing financial
services to the Tribe, to provide BCR with a bank account number to facilitate the transfer
of the tribal funds that were being held in BCR’s trust account. Over the course of the next
five days, BCR transferred the following amounts to the Tribe from its trust account: 1) a
payment of $879,719.48 into the Tribe’s severance tax account; 2) a payment of $49,375.85
into the Casino’s account; and 3) a payment of $165.71 for accrued interest into the Tribe’s
severance tax account.
[¶15] Mr. Clark proposed to the NABC that he would obtain the bank statements from
BCR’s trust account from January 1, 2019, to the dates of the transfers and verify all the
activity in the account between those dates.4 The NABC approved this proposal. On June
18, 2019, Mr. Clark went to BCR’s office, reviewed the trust account bank statements,
transactions slips, and supporting documents (from January 1, 2019, to June 2019) and
4
Mr. Clark chose these dates because for several years prior, the trust account had been audited by the
Tribe’s external auditor, Charles Donham, and Mr. Clark did not see a need to go back and recreate those
records because they had been presented in an audit and accepted by the NABC.
4
confirmed all the funds in the trust account were returned to the Tribe. He communicated
this finding to BCR, the NABC, and the Tribe’s finance office.
[¶16] The Tribe filed this suit on July 29, 2019, seeking the return of tribal funds and
documents. On July 30, 2019, the Tribe posted the agenda for the August 10, 2019, General
Council meeting, which included resolutions to ban either BCR or KTS from representing
the Tribe. Five days before the scheduled vote, a public meeting was held where people
accused BCR of stealing money from the Tribe. At least some of these allegations were
made by KTS lawyer, Keith Harper. This meeting was publicly broadcasted on YouTube.
At the General Council meeting five days later, a majority of the General Council voted in
favor of banning BCR from working for the Tribe in perpetuity. After the General Council
vote, BCR returned numerous boxes of paper files and a portable hard drive containing
tribal documents to the Tribe.
The Trial
[¶17] Most of the Tribe’s claims were resolved through summary judgment, and the only
claim remaining to be tried was the conversion and civil theft claim. The Tribe’s theory
was that BCR took advantage of the Tribe’s trust, failed to meet its ethical duties to
communicate and justify its fees, and misappropriated $5.5 million in fees. The Tribe’s
evidence consisted of the testimony from three current and former NABC members who
each swore they reviewed the billing summaries and still had lingering questions about
what work BCR had actually performed due to the broad and general nature of the billing
entries. The bulk of the Tribe’s case rested on the testimony of its expert, Daniel Costello,
who opined the quality of BCR’s bills did not meet the required standard of care. Mr.
Costello’s largest complaint was that BCR’s bills contained vast amounts of “block
billing.”5 Mr. Costello did not opine about whether or not BCR’s partners and associates
actually worked the hours reflected in the bills. When asked to do so, he stated it would
be impossible to determine whether the work had been performed due to the format of the
bills.
[¶18] BCR presented a twofold defense. First, it argued KTS used improper methods,
including making false and defamatory statements about BCR, to accomplish its goal of
acquiring the Tribe’s legal work. BCR put on evidence showing KTS decided it was
adverse to BCR before the Tribe officially retained KTS to evaluate Mr. Conrad, and KTS
used techniques to win over the Tribe that Councilman Spoonhunter admitted were
improper, such as playing up its political connections and manipulating tribal leaders to
make them feel important. BCR also offered evidence showing that after KTS started
5
According to Mr. Costello, block billing occurs when multiple distinct actions are described in a single
entry on a bill, and he opined lawyers should create separate, distinct billable entries for each completed
task.
5
publicly alleging BCR misappropriated tribal funds, even tribal members who had good
working relationships with BCR became skeptical and distrustful of BCR.
[¶19] Second, BCR presented evidence that although the billing summaries may not have
contained detailed information about the work it performed on the Tribe’s behalf, it kept
the Tribe informed about that work in other ways, and BCR always answered any questions
NABC members had about that work. BCR also presented evidence showing the NABC
never asked BCR to change the format of its bills, resume sending detailed bills, or provide
any additional details about the work it performed on behalf of the Tribe. Each BCR
partner testified he or she worked every hour they billed, and they even rounded down the
number of hours they billed. BCR called its own expert, Kim Cannon, who opined block
billing did not violate any standard of care, and there was no evidence BCR overbilled the
Tribe or that the BCR attorneys did not work every hour they billed.
[¶20] After five days of testimony, the jury ultimately determined BCR did not convert
any tribal funds, and it returned a verdict in favor of BCR. This appeal timely followed.
DISCUSSION
I. Did the district court err when it granted BCR’s motion for sanctions under
W.R.C.P 11?
[¶21] On appeal, the Tribe argues the district court erred by awarding sanctions under
W.R.C.P. 11 because BCR failed to strictly comply with the procedural requirements. The
Tribe also contends BCR’s failure to comply with these procedural requirements
prejudiced the Tribe by precluding it from taking remedial measures that could have made
the motion for sanctions moot. We agree.
[¶22] On September 11, 2019, BCR sent the Tribe a letter, captioned as a “Rule 11
Notice,” claiming the allegations in ¶ 2 of the complaint, which accused BCR of
“repeatedly and steadfastly” refusing to return tribal funds, were false and needed to be
withdrawn within 21 days. BCR attached documents to the letter showing all the funds in
the firm’s trust account were transferred to the Tribe in June 2019. The Tribe sent BCR a
letter responding to the Rule 11 notice, explaining why it thought the notice was improper
under W.R.C.P. 11 and detailing the factual underpinnings of the allegations in ¶ 2.
[¶23] BCR filed a motion for Rule 11 sanctions with the district court on October 24,
2019. The certificate of service shows this motion was served on the Tribe on October 22,
2019, only two days before the motion was filed with the district court. Like the Rule 11
Notice, the motion complained about the allegations in ¶ 2 of the complaint. The Tribe
opposed the motion, arguing BCR failed to identify a specific violation of Rule 11(b) and
explaining why the allegations in ¶ 2 had evidentiary support.
6
[¶24] The district court held a hearing on the Rule 11 motion on March 5, 2020. Instead
of discussing the allegations in ¶ 2, for the first time BCR asserted the allegations in ¶ 52,
which alleged BCR was “in possession of” over $1,000,000 in tribal funds, were
sanctionable. After taking the matter under advisement, the district court ultimately
entered an order granting BCR’s Rule 11 motion. The district court found:
The Complaint states in ¶ 52 that “Defendants are in possession
of, upon information and belief, over $1,000,000 in Tribal
funds.” This is stated in the section of the Complaint regarding
Count III – accounting. It is clear on the record to date that the
factual underpinnings of that claim could not have been
accurate on the date it was plead and Rule 11’s requirement of
a factual basis was violated. This issue is a narrow one,
whether at the time of pleading Defendants’ [sic] were or are
currently in possession of over $1,000,000 of Tribal funds.
When Defendants’ [sic] filed their Motion for Sanctions they
asserted in good faith that it was not true, and that a
representative of the Tribe’s finance office had inspected the
trust ledgers and confirmed that all the Tribal funds that were
in the trust had been returned to the Tribe, and that this was
done before the Complaint was filed. That is the state of the
evidence before the [c]ourt on the issue, and While [sic]
Plaintiff [sic] may believe that there was some foul play by the
Defendants over past accounting and overbilling, (which
seems to be the implication of this claim), it was not proper to
plead an inflammatory allegation of misuse or withholding of
$1,000,000 in Tribal funds without evidentiary support. This
is particularly true where the evidence was easily at hand at the
time the Complaint was filed and under any characterization
now argued, this could not have been true.
[¶25] The district court’s order required the Tribe to “present a motion and order striking
the allegation in question” and to pay BCR’s fees relating to that motion. Although BCR
filed an application seeking $15,435 in attorney’s fees, the district court did not enter an
order awarding any of those fees.6
6
BCR argues we should not consider this issue because the Rule 11 order is either moot or is not a final
appealable order because it does not affect the Tribe’s substantial rights. The Rule 11 order is not moot,
because although the district court has not yet fixed the amount of fees the Tribe is required to pay, it did
order the Tribe to pay BCR’s fees incurred in bringing the Rule 11 motion. In addition, BCR’s argument
that the Rule 11 order does not affect the Tribe’s substantial rights is somewhat disingenuous, given that it
repeatedly argued below the order determined certain issues on the merits, including the conversion claim,
7
[¶26] Rule 11 requires all factual contentions in a complaint to have evidentiary support.
W.R.C.P. 11(b)(3). If the opposing party believes a factual contention lacks evidentiary
support, Rule 11(c) sets forth a particular process to follow when filing a motion for
sanctions:
A motion for sanctions must be made separately from any other
motion and must describe the specific conduct that allegedly
violates Rule 11(b). The motion must be served under Rule 5,
but it must not be filed or be presented to the court if the
challenged paper, claim, defense, contention, or denial is
withdrawn or appropriately corrected within 21 days after
service or within another time the court sets. If warranted, the
court may award to the prevailing party the reasonable
expenses, including attorney’s fees, incurred for the motion.
W.R.C.P. 11(c). “Rule 11 sanctions are not to be cavalierly threatened or imposed.” Edsall
v. Moore, 2016 WY 71, ¶ 13, 375 P.3d 799, 803 (Wyo. 2016) (quoting Welch v. Hat Six
Homes, 2002 WY 81, ¶ 19, 47 P.3d 199, 205 (Wyo. 2002)). We have recognized Rule 11
contains a “safe harbor” provision where counsel provides a warning to opposing counsel
by serving the motion for sanctions on “opposing counsel only.” Edsall, ¶ 13, 375 P.3d at
803 (quoting Welch, ¶ 19, 47 P.3d at 205). Counsel cannot file the motion with the court
until at least 21 days after serving the motion only on opposing counsel, “in order to give
opposing counsel an opportunity to correct or withdraw any allegedly sanctionable paper.”
Id. (quoting Welch, ¶ 19, 47 P.3d at 205) (internal citations omitted). We will reverse a
district court’s granting of sanctions where the applicant’s papers do not meet the strict
procedural requirements of Rule 11. See Edsall, ¶ 13, 375 P.3d at 803 (finding the district
court did not have jurisdiction to consider a Rule 11 motion for attorney’s fees because the
motion was filed after the case had been dismissed and therefore could not have complied
with the requirements of Rule 11); Welch, ¶ 19, 47 P.3d at 205, overruled on other grounds
by Matter of Mears, 2018 WY 109, 426 P.3d 824 (Wyo. 2018) (vacating an award of
sanctions when the Rule 11 motion was filed after the case was settled); Caldwell v.
Cummings, 2001 WY 106, ¶¶ 10–12, 33 P.3d 1138, 1141–42 (Wyo. 2001), overruled on
other grounds by Matter of Mears, 2018 WY 109, 426 P.3d 824 (Wyo. 2018) (reversing
an award of sanctions when the Rule 11 motion was contained in a motion for judgment
on the pleadings and was not set forth in a separate motion as procedurally required under
the rule).
and it argued the order had some relevance as to certain witnesses’ credibility such that it should be able to
tell the jury about the order. We have recognized that “[g]enerally, interlocutory orders merge into the final
order.” Kruckenberg v. Ding Masters, Inc., 2008 WY 40, ¶ 11, 180 P.3d 895, 899 (Wyo. 2008) (citing State
Farm Mut. Auto. Ins. Co. v. Shrader, 882 P.2d 813, 820 (Wyo. 1994)). The Rule 11 order merged into the
final appealable order in this case and is reviewable.
8
[¶27] In this case, BCR failed to comply with Rule 11’s procedural requirements in three
ways. First, BCR’s “Rule 11 Notice” was not a proper substitute for serving a motion
under Rule 11. See Caldwell, ¶ 12, 33 P.3d at 1142 (holding a letter sent to counsel is not
a proper substitute for serving a motion for sanctions under Rule 11); Rusk v. Fid.
Brokerage Servs., 850 F. App’x 657, 659 (10th Cir. 2021) (“our precedent requires service
of the actual motion to be filed; warning letters are insufficient.”). Second, BCR served its
motion on the Tribe only two days before filing it with the district court, far short of the
required minimum 21 days. W.R.C.P. 11(c)(2). Finally, at the hearing, BCR complained
about different allegations than those it claimed were sanctionable in its “Rule 11 Notice”
and motion. Thus, BCR did not give the Tribe a warning or opportunity to withdraw the
allegedly sanctionable allegation prior to filing its motion. See W.R.C.P. 11(c); Edsall, ¶
13, 375 P.3d at 803 (quoting Welch, ¶ 19, 47 P.3d at 205) (internal citations omitted).
[¶28] The district court should not have imposed sanctions because BCR failed to comply
with the procedural requirements of Rule 11. The district court’s order granting BCR’s
Rule 11 motion and its award of sanctions must be reversed. See Edsall, ¶ 13, 375 P.3d at
803; Welch, ¶ 19, 47 P.3d at 205; Caldwell, 2001 WY 106, ¶¶ 10–12, 33 P.3d at 1141–42.
II. Did the district court err when it granted BCR’s motion for summary judgment
on the Tribe’s accounting claim?
[¶29] We review a district court’s order granting summary judgment de novo. Matter of
Phyllis V. McDill Revocable Trust, 2022 WY 40, ¶ 16, 506 P.3d 753, 759 (Wyo. 2022)
(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 summary judgment in the same light as the district
court, using the same materials and following the same
standards. We examine the record from the vantage point most
favorable to the party opposing the motion, and we give that
party the benefit of all favorable inferences that may fairly be
drawn from the record. A material fact is one which, if proved,
would have the effect of establishing or refuting an essential
element of the cause of action or defense asserted by the
parties.
Id., 506 P.3d at 759–60 (citing Bear Peak Res., LLC, ¶ 10, 403 P.3d at 1040) (internal
citations and quotation marks omitted). We may affirm an order granting summary
judgment on any basis appearing in the record. Cardenas v. Swanson, 2023 WY 67, ¶ 10,
531 P.3d 917, 919 (Wyo. 2023).
[¶30] The complaint alleged the Tribe was entitled to an equitable accounting under Rule
1.15(e) of the Wyoming Rules of Professional Conduct (W.R.P.C.) and pursuant to the
9
Uniform Trust Code, Wyoming Statutes §§ 4-10-101 et seq. (LexisNexis 2021).
[¶31] BCR moved for summary judgment on this accounting claim, asserting Wyoming
does not recognize an independent cause of action for an accounting, and the Tribe could
not bring an equitable claim for an accounting unless it showed it did not have an adequate
remedy at law. BCR asserted the Tribe could not make this showing because it was in
possession of trust account bank statements and transaction information. In the alternative,
BCR argued the accounting had already been completed when Mr. Clark reviewed the trust
account documents in June 2019.
[¶32] In response, citing to the Restatement (Second) of Trusts § 172, the Tribe argued
that as a trustee, BCR had the burden of proving the validity and propriety of any
expenditure of trust funds, and it was liable for any funds for which it could not account.
The Tribe also asserted Mr. Clark had not performed an accounting and had merely verified
the bank balance held by BCR in June 2019 was returned to the Tribe.
[¶33] The district court granted BCR’s motion for summary judgment on the accounting
claim. It found the Tribe was entitled to an accounting under W.R.P.C. 1.15(e) after it had
terminated BCR’s representation, but it had received that accounting when Mr. Clark
reconciled the trust account statements in June 2019. The district court also found the
Tribe’s expert used the documents provided by BCR to prepare his report as to what sums
BCR had allegedly converted, and the Tribe failed to provide any factual basis showing
how BCR did not comply with its ethical obligations under W.R.P.C. 1.15(e). The district
court also found an equitable remedy for an accounting was not cognizable where an
adequate remedy at law exists, and the Tribe’s conversion claim was an adequate remedy.
A. Accounting Under W.R.P.C. 1.15(e)
[¶34] The Tribe asserts the district court’s conclusion the Tribe failed to explain what
additional information BCR was required to provide under this rule was incorrect because
the Tribe pinpointed the precise invoices that were inadequate “and made clear that if
[BCR] could not further explain those invoices, [BCR was] obligated to reimburse the trust
account.” The Tribe contends W.R.P.C. 1.15(e) requires BCR to provide an accounting
for all deductions from the Tribe’s trust account, and BCR did not meet this obligation
because the Tribe’s expert identified $5.5 million of withdrawals that were “inadequately
documented.” BCR argues summary judgment was appropriate because it complied with
the requirements of W.R.P.C. 1.15(e).
[¶35] We have yet to address what a “full accounting” looks like under W.R.P.C. 1.15(e).
However, we have held “[a] violation of the rules of professional conduct does not, on its
own, give rise to a cause of action against a lawyer.” Gowdy v. Cook, 2020 WY 3, ¶ 46,
455 P.3d 1201, 1212 (Wyo. 2020) (citing Wyoming Rules of Professional Conduct, Scope,
Comment 20; Bevan v. Fix, 2002 WY 43, ¶ 62, 42 P.3d 1013, 1032 (Wyo. 2002)). If the
10
Tribe had filed a legal malpractice action, W.P.R.C. 1.15(e) might have been relevant to
establish the proper standard of care. However, this Rule does not give rise to an
independent cause of action for an accounting. BCR was entitled to summary judgment as
a matter of law on this claim.
B. Equitable Accounting and Adequate Remedy
[¶36] Citing to our decision in Bear Peak Resources, LLC v. Peak Powder River
Resources, LLC, 2017 WY 124, ¶ 76, 403 P.3d at 1056 (citing Haynes Trane Service
Agency, Inc. v. American Standard, Inc., 51 Fed. Appx. 786, 800 (10th Cir. 2002)), the
district court recognized a claim for an equitable accounting was not cognizable where an
adequate remedy at law exists. The district court found BCR had produced thousands of
pages of documents and there was no reason to require BCR to “distill [its] billing practices
to a more digestible state[,]” and it found the Tribe’s expert had been able to use the
information provided by BCR to draft his report. The district court ruled the Tribe could
attempt to prove at trial that BCR’s dishonesty and misconduct resulted in conversion, and
if it succeeded, that remedy adequately foreclosed any equitable relief.
[¶37] The Tribe asserts the district court incorrectly concluded the conversion and civil
theft claim was an adequate remedy. The Tribe notes that its claim is “founded on [BCR’s]
trust obligations.” The Tribe argues a “civil conversion remedy is inadequate because it
flips the burden of proof and relieves the trustee of the burden of justifying its
withdrawals.” The Tribe asserts BCR did not satisfy its obligation to provide an accounting
because its expert identified $5.5 million of withdrawals from the trust account that were
“inadequately documented.” The Tribe argues “[b]ecause [BCR] could not meet [its]
burden to justify [its] withdrawals from the trust account, [it is] legally required to replenish
it by the amount of the unexplained withdrawals, with all doubts resolved against [BCR].”
BCR contends the Tribe had to show a complete absence of an adequate remedy at law,
and the Tribe’s conversion claim was an adequate remedy.
[¶38] Whether a remedy at law is adequate depends on the circumstances of each case.
See Watson v. Sutherland, 72 U.S. 74, 78, 18 L. Ed. 580 (1866). An adequate remedy at
law “must be plain and adequate, or in other words, as practical and efficient to the ends of
justice, and its prompt administration, as the remedy in equity.” Id. (quoting Boyce’s Exrs.
v. Grundy, 28 U.S. 210, 214, 7 L. Ed. 655 (1830)); see also Remedy, Black’s Law
Dictionary (11th ed. 2019) (defining an adequate remedy as a legal remedy, such as an
award of damages, “that provides sufficient relief to the petitioning party . . . .”).
[A] suit in equity to enforce a legal right can be brought only
when the court can give more complete and effectual relief, in
kind or in degree, on the equity side, than on the common-law
side; as for instance, by compelling a specific performance, or
the removal of a cloud on the title to real estate; or preventing
11
an injury for which damages are not recoverable at law . . . or
where an agreement procured by fraud is of a continuing nature,
and its rescission will prevent a multiplicity of suits. . . .
Buzard v. Houston, 119 U.S. 347, 352, 7 S. Ct. 249, 252, 30 L. Ed. 451 (1886) (internal
citations omitted). On the other hand, where the suit is for the judicial determination of an
amount of monetary damages and the enforcement of its payment by the court, “the
proceeding is essentially an action at law . . . .” Jones v. Mut. Fid. Co., 123 F. 506, 521
(C.C.D. Del. 1903). We have repeatedly refused to grant equitable relief where monetary
damages would provide sufficient relief to the injured party. See, e.g., Bear Peak Res.,
LLC., 2017 WY 124, ¶ 76, 403 P.3d at 1056 (holding a party could not bring an equitable
accounting claim where breach of contract damages were sufficient); McNeill Fam. Tr. v.
Centura Bank, 2003 WY 2, ¶ 17, 60 P.3d 1277, 1285 (Wyo. 2003) (denying equitable relief
from a foreclosure action when plaintiffs could have purchased the certificate of purchase
or the right of redemption); BHP Petroleum Co., Inc. v. Okie, 836 P.2d 873, 876–77 (Wyo.
1992) (reversing a grant of partial recission where breach of contract damages were
available); Farmers’ State Bank of Riverton v. N. Tr. Co., 270 P. 163, 166 (Wyo. 1928)
(holding rescission was not available for a breach of contract). The legal nature of a remedy
is not lost simply because the particular circumstances of a case may make it difficult to
achieve that remedy. Jones, 123 F. at 521. The lack of an adequate remedy and the inability
to obtain “the fruits of a remedy are quite distinct.” Id.[¶39] As the party seeking the benefit of equitable relief, the Tribe has the burden of
showing its conversion and civil theft claim is not an adequate remedy at law. Spence v.
Sloan, 2022 WY 96, ¶ 63, 515 P.3d 572, 588 (Wyo. 2022) (citing McNeill Fam. Tr., 2003
WY 2, ¶ 17, 60 P.3d at 1285). The Tribe argues its conversion and civil theft claim is not
an adequate remedy because it places the burden of proof on the Tribe instead of BCR.
The Tribe contends as a “trustee,” BCR should be required to justify every penny it
removed from the trust account rather than the Tribe having to prove BCR converted or
stole the funds. The Tribe’s argument is misplaced.
[¶40] An accounting is “[a] rendition of an account[.]” Accounting, Black’s Law
Dictionary (11th ed. 2019). As the Tribe points out in its briefing, an accounting explains
withdrawals from a trust account. In this case, the Tribe authorized each withdrawal from
the trust account that it now challenges. Importantly, there is no question where the funds
went, and the Tribe has made no claim that it did not know to whom the funds were paid.
In other words, the Tribe already had an adequate accounting. What the Tribe truly asserted
in its accounting claim was that BCR was wrongfully paid the funds because it did not
perform the work to earn them. That went beyond a claim for an accounting and was in
essence its conversion and civil theft claim. We affirm the district court’s grant of summary
judgment in favor of BCR on this claim.
12
III. Does the district court’s admission of irrelevant racially charged evidence
warrant reversal?
[¶41] The Tribe argues the district court erred in admitting racially charged evidence
because it was inadmissible under Rules 402 and 403 of the Wyoming Rules of Evidence
(W.R.E.). The Tribe asserts:
The trial in this case related to a systematic conversion of funds
of the Tribe by [BCR] for years while [it] acted as counsel for
the Tribe. Despite this clearly defined and limited scope, the
district court allowed [BCR] to introduce irrelevant and
prejudicial evidence at trial which had no bearing on the salient
cause of action.
The Tribe asserts BCR attempted to use this allegedly irrelevant evidence to prejudice the
jury against the Tribe by “presenting the dispute in starkly racial terms” and by presenting
themselves as the “white lawyers” positioned against the “Native lawyers” of KTS and by
extension the Tribe. The Tribe argues this “narrative was crafted to encourage the jury to
sympathize with the white lawyers [(BCR)] and decide against the Tribe. The result was
a racially motivated trial that prejudiced the Tribe.”
[¶42] BCR contends: “The events leading up to BCR being terminated as legal counsel
for the Tribe and the filing of this lawsuit against BCR are crucially important conte[x]t
for the claims at issue.” BCR contends it had successfully represented the Tribe since
1988, and its relationship with the Tribe only started to “unravel” once KTS started to inject
“itself into all facets of the Tribe . . . .” BCR asserts the statements made by Mr. Harper at
the meeting broadcast on YouTube influenced the General Council vote that resulted in
BCR being banned from working for the Tribe. As such, BCR argues “motive and bias
became the foundation of this lawsuit and were crucial topics for cross-examination of the
Tribe’s fact witnesses.” Citing to our decisions in Lawrence v. State, 2007 WY 183, ¶ 17,
171 P.3d 517, 522–523 (Wyo. 2007), and Hannon v. State, 2004 WY 8, ¶ 22, 84 P.3d 320,
331–332 (Wyo. 2004), BCR further contends this evidence was relevant because the
partiality of a witness is always relevant to discredit the witness, expose his motive for
testifying, and shed light on issues that might affect the weight of his testimony.
[¶43] This issue requires us to review the district court’s decision on the admission of
evidence.
We review a district court’s ruling on the admissibility of
evidence for an abuse of discretion. We afford considerable
deference to a trial court’s rulings on the admissibility of
evidence, and we will not disturb the trial court’s ruling if there
is a legitimate basis for it. Determining whether the trial court
13
abused its discretion involves the consideration of whether the
court could reasonably conclude as it did, and whether it acted
in an arbitrary and capricious manner.
Jontra Holdings Pty Ltd v. Gas Sensing Tech. Corp., 2021 WY 17, ¶ 58, 479 P.3d 1222,
1239 (Wyo. 2021) (quoting Matter of LDB, 2019 WY 127, ¶ 43, 454 P.3d 908, 921 (Wyo.
2019) (internal citations and quotation marks omitted). Even if we determine certain
evidence was admitted in error, the Tribe is required to show prejudice. Lyman v. Childs,
2023 WY 16, ¶ 55, 524 P.3d 744, 760 (Wyo. 2023). “An error is deemed prejudicial if
there is a reasonable probability that, if the evidence had not been admitted, the outcome
would have been more favorable to the party opposing the evidence.” Id. (citing Spence v.
State, 2019 WY 51, ¶ 11, 441 P.3d 271, 274 (Wyo. 2019); Klingbeil v. State, 2021 WY 89,
¶ 32, 492 P.3d 279, 286 (Wyo. 2021)).
A. References to Race
[¶44] The first reference to race occurred during BCR’s opening statement when counsel
stated:
The KTS lawyers from Washington, D.C., one of their big
calling cards was, hey, we’re Native American. We’re from
different tribes around the country, and you should only trust
Native American lawyers. So there was a subtle hint that you
can’t trust BCR lawyers because they’re not Native Americans,
which is a tragedy given . . . what my clients did.
The Tribe did not object to this statement.
[¶45] At a conference the following morning, the Tribe asked the district court to preclude
BCR from introducing any evidence pertaining to KTS. However, the Tribe did not
specifically address defense counsel’s comments about race. BCR discussed race with
three witnesses. During cross examination of Councilman Spoonhunter and Chairman
Brown, BCR impeached both witnesses with portions of their depositions wherein they
admitted one of KTS’s “calling cards” was that they were Native American lawyers who
would understand the Tribe’s issues better than non-Native lawyers. In addition, Mr. Clark
testified he believed there was a behind the scenes effort to rid the tribe of non-Native
consultants. Due to this effort, he offered to terminate his contract and rid the Tribe of
“one more white guy.” The email in which Mr. Clark made this offer was admitted into
evidence over the Tribe’s objection based on relevance. The Tribe ultimately did not
terminate Mr. Clark’s contract. Mr. Clark further testified he heard KTS was perpetuating
the idea that the Tribe should only trust Native lawyers.
[¶46] The final reference to race occurred in BCR’s closing argument where counsel
14
reminded the jury about Mr. Clark’s concerns that KTS was disparaging BCR, had ulterior
motives, and was “just getting rid of all the white guys[.]” Counsel went on to argue the
trust BCR established over 30 years was quickly undone by KTS’s disparaging and untrue
allegations of theft and its claims tribal members could not trust white lawyers. The Tribe
did not object to this argument. We analyze whether the Tribe was prejudiced by the
admission of this evidence and argument.
B. Prejudice
[¶47] We have expressed a “desire to remove illegitimate references to race from judicial
proceedings to the fullest extent possible[,]” while recognizing there are some legitimate
reasons to mention race. Carter v, State, 2010 WY 136, ¶¶ 6–10, 241 P.3d 476, 480–82
(Wyo. 2010). Evidence of a person’s racial prejudice against a party, victim, or class of
persons may be admissible when it reflects upon that person’s bias or motive. See Campbell
v. State, 999 P.2d 649, 663 (Wyo. 2000) (finding evidence of victim’s mixed race was
relevant to establish defendant’s motive in a child abuse case). The evidence set forth
above had no bearing on any of the witnesses’ biases or motive to testify untruthfully.
Unlike the evidence that NABC members were swayed by KTS inviting them to political
events and making them feel important, or the evidence that members of the Tribe who had
good relationships with BCR became skeptical about BCR after Mr. Harper’s allegations
at the August 2019 public meeting, there was no evidence members of the Tribe were
improperly influenced by KTS’s statements about race or that they adopted KTS’s attitudes
towards non-Native lawyers. On the contrary, Councilman Spoonhunter and Chairman
Brown both testified they never had any concerns that the BCR partners were not Native
American. When Mr. Clark offered to resign, Councilwoman Calling Thunder informed
him it was not her choice to get rid “of another white guy,” and the Tribe could not “move
forward without [his] expertise.”
[¶48] Because there was no proper purpose for the admission of this evidence and
argument, we must decide if the Tribe met its burden of showing there is a reasonable
probability the outcome of the trial would have been more favorable to the Tribe if the
evidence and argument had not been admitted. Lyman, 2023 WY 16, ¶ 55, 524 P.3d at 760
(citing Spence, 2019 WY 51, ¶ 11, 441 P.3d at 274; Klingbeil, 2021 WY 89, ¶ 32, 492 P.3d
at 286); Singer v. Lajaunie, 2014 WY 159, ¶ 41, 339 P.3d 277, 288 (Wyo. 2014) (citing
Proffit v. State, 2008 WY 103, ¶ 12, 191 P.3d 974, 977 (Wyo. 2008)).7
[¶49] The Tribe argues it met this burden and claims:
7
Because the Tribe did not object to the references to race in opening statements or closing arguments, we
review for plain error. Berry v. State, 2023 WY 75, ¶ 37, 533 P.3d 474, 485 (Wyo. 2023) (citing Anderson
v. State, 2022 WY 119, ¶ 35, 517 P.3d 583, 593 (Wyo. 2022). However, even under plain error review, the
Tribe is required to show “it is reasonably probable [it] would have received a more favorable verdict if the
error had not been made.” Id. (quoting Leners v. State, 2021 WY 67, ¶ 24, 486 P.3d 1013, 1018 (Wyo.
2021)).
15
While it is true that an isolated racial comment can be
overlooked when the offending parties can otherwise point to
overwhelming evidence on their side of the ledger, prejudice is
not outweighed when, as here, there is a ‘concerted effort . . .
to create prejudice in the jurors’ minds based upon something
other than the evidence.
The Tribe contends BCR’s evidence at trial was not overwhelming, and the Tribe presented
“significant evidence” BCR engaged in billing practices that fell below industry standards
and the rules of professional conduct. The Tribe contends BCR “fabricated an irrelevant
conspiracy theory to deflect attention from [its] own behavior and focus on the racial divide
among the parties. This orchestrated attempt to confuse the jury and encourage a decision
on an improper basis requires reversal.”
[¶50] BCR contends when “[l]ooking at the record as a whole, there is not a reasonable
probability the verdict would have been in favor of the Tribe had the district court excluded
the allegedly ‘racially inflammatory evidence.’” The district court instructed the jury that
to prove conversion, the Tribe had to prove BCR billed the Tribe and received payment for
legal work that was not actually performed. BCR claims the Tribe did not meet this burden,
and BCR put on evidence establishing its partners performed all of the work for which the
firm billed the Tribe.
[¶51] We agree with BCR that the Tribe failed to meet its burden. Although certain
NABC members expressed dissatisfaction with the format of BCR’s bills, none of these
witnesses offered any evidence BCR was paid for work it did not perform. While the
Tribe’s expert took issue with the format of BCR’s bills, he refused to opine about whether
the work had actually been performed. Councilman Spoonhunter testified the Tribe needed
two full-time in-house lawyers and outside counsel who provided services of up to $50,000
a month to cover all of the work BCR had been performing.
[¶52] Every BCR partner testified they performed all of the work reflected in their bills.
BCR presented evidence it regularly communicated with the NABC, frequently discussed
ongoing legal matters and projects, and kept the NABC informed about what they were
doing on behalf of the Tribe. BCR’s expert testified the block billing format BCR used for
its bills did not violate any ethical obligations, and he did not see any indications BCR
engaged in overbilling. The Tribe failed to present any evidence BCR received payment
for legal work it did not perform.
[¶53] We continue to recognize the core principle that illegitimate references to race
should be removed from judicial proceedings to the fullest extent possible, and this was
not one of those cases where there was a legitimate exception to that principle. See Carter,
2010 WY 136, ¶ 6, 241 P.3d at 480–81. Although there was no proper purpose for the
16
racially charged evidence and argument in this case, it was used to disparage KTS, not the
Tribe. Other courts have found the interests of justice do not require reversal when race is
not used to disparage a party, and that party otherwise received a fair trial. See State v.
Jackson, 714 N.W.2d. 681, 695 (Minn. 2006); State v. Clifton, 701 N.W.2d 793, 800
(Minn. 2005). When considering the record as a whole, BCR did not introduce evidence
of KTS’s calling card in an attempt “to cause the jury to decide the case on the basis of
passion or prejudice rather than reason . . . .” Clifton, 701 N.W.2d at 800. Given the
evidence BCR presented at trial, which had nothing to do with KTS or the racially charged
evidence, and that the Tribe failed to present evidence BCR received payment for work
that was not performed, there is not a reasonable probability the outcome would have been
more favorable for the Tribe if the evidence about KTS’s calling card had not been
admitted.
CONCLUSION
[¶54] BCR did not comply with the procedural requirements of Rule 11, and the district
court erred when it imposed Rule 11 sanctions on the Tribe. The district court’s order
imposing Rule 11 sanctions is reversed, and this matter is remanded to the district court
with direction that the order imposing sanctions be vacated. We affirm the district court’s
order granting summary judgment on the accounting claim because the Tribe could not
bring a cause of action for an accounting under W.R.P.C. 1.15(e), and the Tribe failed to
show its conversion and civil theft claim was not an adequate remedy at law. We affirm
the jury’s verdict after finding the Tribe failed to show the verdict would have been more
favorable to the Tribe if the racially charged evidence and argument had not been admitted.
17