Joyce Halling and Medcon Inc., a Utah corporation v. David A. Yovanovich and Ornella Dalla Bona

IN THE SUPREME COURT, STATE OF WYOMING
2017 WY 28
OCTOBER TERM, A.D. 2016
March 9, 2017
JOYCE HALLING and MEDCON, INC.,
a Utah corporation,
Appellants
(Defendants),
v. S-16-0163
DAVID A. YOVANOVICH and
ORNELLA DALLA BONA,
Appellees
(Plaintiffs).
DAVID A. YOVANOVICH and
ORNELLA DALLA BONA,
Appellants
(Plaintiffs),
v. S-16-0164
JOYCE HALLING and MEDCON, INC.,
a Utah corporation,
Appellees
(Defendants).
Appeal from the District Court of Lincoln County
The Honorable Joseph Bluemel, Judge
Representing Joyce Halling and MedCon, Inc.:
Ray G. Martineau, Salt Lake City, Utah.
Representing David A. Yovanovich and Ornella Dalla Bona:
James K. Lubing and Laurie J. Stern, Lubing Law Group, LLC, Jackson,
Wyoming.*
Before BURKE, C.J., and HILL, DAVIS, FOX, and KAUTZ, JJ.
*Order Allowing Withdrawal and Substitution of Counsel entered September 21, 2016.
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.
FOX, Justice.
[¶1] David Halling, as manager of Professional Business Holdings, LP (PBH), and
Joyce Halling, as president of MedCon, Inc. (MedCon), each purchased an undivided half
interest in a parcel of land in Lincoln County, Wyoming, from Brandon Bentley. Mr.
Halling, individually and as manager of PBH, executed a mortgage in favor of Mr.
Bentley on PBH’s half interest as security for the purchase price of 50 percent of the lot.
Mrs. Halling, individually and as president of MedCon, also executed a promissory note
and mortgage as security for the note in favor of Mr. Bentley for the purchase price of the
other 50 percent of the lot. Mr. Bentley then separately assigned his rights and interests
in the PBH Mortgage to 1st Bank of Afton, Wyoming (1st Bank), and his rights and
interests in the MedCon Note and MedCon Mortgage to Yovanovich. Yovanovich sued
MedCon, alleging it failed to pay the amount due under the note. The district court
granted Yovanovich’s motion for summary judgment and MedCon appeals. Yovanovich
cross-appeals the award of damages. We affirm the district court’s ruling in part, and
reverse and remand in part.
ISSUES
[¶2] The parties raise numerous issues, which we consolidate and restate below:
1. Did the district court err as a matter of law when it held that Yovanovich had
an enforceable contract right against MedCon?
2. Did the district court err as a matter of law when it found that the Yovanovich
Assignment was not ambiguous?
3. Did the district court abuse its discretion when it denied MedCon’s motion for
leave to amend its answer?
4. Was the district court’s damages calculation clearly erroneous?
5. Did the district court abuse its discretion when it failed to award prejudgment
interest?
6. Did the district court err as a matter of law when it failed to award post-
judgment interest?
FACTS
[¶3] David Halling was the manager of PBH. His wife, Joyce Halling, was the
president of MedCon. In 2007, PBH and MedCon each purchased an undivided half
1
interest in a parcel of land in Lincoln County, Wyoming, from Brandon Bentley.1 The
Warranty Deed was recorded on September 17, 2007, and the same day Mr. Halling,
individually and as manager of PBH, executed a mortgage (PBH Mortgage) of PBH’s
half interest in Lot 7 as security for PBH’s indebtedness of the purchase price of 50
percent of the lot. (Although the PBH Mortgage referenced a promissory note, no
promissory note by PBH appears in the record.) The PBH Mortgage was recorded on
September 17, 2007.
[¶4] In 2008, Mr. Bentley assigned all of his rights, title, and interest in PBH’s half
interest in Lot 7 to 1st Bank (1st Bank Assignment). The 1st Bank Assignment identified
the PBH Mortgage and any property covered by the mortgage as the collateral, and
referred to the book and page number where the PBH Mortgage was recorded. It did not
reference MedCon’s half interest in Lot 7. The 1st Bank Assignment was recorded on
July 11, 2008. By December 2010, PBH and Mr. Halling had failed to make any
payments to 1st Bank and entered into a deed in lieu of foreclosure, pursuant to which
PBH and Mr. Halling conveyed PBH’s half interest in Lot 7 to 1st Bank, in exchange for
which 1st Bank released PBH and Mr. Halling from all obligations on the PBH Note and
Mortgage. The deed in lieu of foreclosure was recorded on February 19, 2013.
[¶5] When Mr. Halling and PBH executed the deed in lieu of foreclosure with 1st Bank
in 2010, Mrs. Halling, individually and as the president of MedCon, also signed the deed,
assigning any and all interests MedCon had in Lot 7 to 1st Bank:
That pursuant to that certain Warranty Deed dated
September 11, 2007, and recorded in the office of the Lincoln
County Clerk on September 17, 2007, in Book 672, page 342,
Recording No. 933171, Med Con, Inc., a Utah corporation,
may own or claim to own an interest in the Property. Med
Con, Inc., whose president is Joyce L. Halling, the spouse of
David F. Halling, is a related entity to Mortgagor herein. In
consideration of the release from liability by 1ST Bank
1
By a Warranty Deed, Mr. Bentley conveyed and warranted to:
Med Con, Inc., a Utah Corporation an undivided 50% interest and
Professional Business Holdings, LP, a Utah Limited Partnership, an
undivided 50% interest, as tenants in common grantee(s), . . . the
following described real estate, situate in Lincoln County and State of
Wyoming, to wit:
Lot 7 of the Estates At Valli-Vu, Lincoln County, Wyoming as described
on the official plat filed on December 1, 2006 as instrument No. 924974
of the records of the Lincoln County Clerk.
2
herein, Med Con., Inc., will join in this agreement and convey
to 1ST Bank any and all interest it may have in the Property.
Therefore, for purposes of this agreement, the conveyance of
the Property to 1ST Bank and the release from liability of
David F. Halling, individually, Professional Business
Holdings, LP, Joyce L. Halling, individually, and Med Con,
Inc., by 1ST Bank, the terms Mortgagor and Grantor as used
herein shall be deemed to also include Joyce L. Halling,
individually, and Med Con, Inc.
[¶6] Mr. Halling testified during his deposition that at the time he and Mrs. Halling
signed the deed it “was my understanding and my understanding from the bank that [1st
Bank] would release us from any and all liabilities relative to the total property.” 1st
Bank, however, had no interest in MedCon’s undivided half interest to release.
[¶7] When it purchased its half interest in Lot 7, MedCon executed a promissory note
(MedCon Note), promising to pay Mr. Bentley the $124,520.00 purchase price. The
MedCon Note provided that full payment of the loan would be due on August 17, 2009,
would “accrue @ 6% monthly,” and that no payments were required during the term of
the loan. Mrs. Halling, individually and as president of MedCon, also executed a
mortgage (MedCon Mortgage) of MedCon’s half interest in Lot 7 as security for the
MedCon Note. The MedCon Mortgage was recorded on September 17, 2007.
[¶8] In October 2008, Mr. Bentley assigned all of his rights, title, and interest in the
MedCon Note (Yovanovich Assignment) to David A. Yovanovich and Ornella Dalla
Bona (collectively “Yovanovich”). Two years later, Mr. Bentley executed an
Assignment of Mortgage, assigning Yovanovich all of his rights, title, and interest in the
MedCon Mortgage. No payments were made on the MedCon Note.
[¶9] In 2014, Yovanovich, as holder of the MedCon Note and MedCon Mortgage,
attempted to collect on the indebtedness, and when the attempts were unsuccessful, sued
for breach of contract seeking judgment on the MedCon Note. Yovanovich moved for
summary judgment, and MedCon opposed the motion, arguing genuine issues of material
fact existed as to: (1) whether the Yovanovich Assignment created a lawfully enforceable
contract between Yovanovich and MedCon; (2) whether the Yovanovich Assignment was
null and void because Mr. Bentley had previously assigned all of his rights in MedCon’s
half interest in Lot 7 to 1st Bank via the 1st Bank Assignment; (3) whether the deed in
lieu of foreclosure released MedCon from any liability related to its half interest in Lot 7;
and (4) whether Yovanovich was entitled to damages.
[¶10] The district court found that: (1) the Yovanovich Assignment created a legally
enforceable contract between Yovanovich and MedCon; (2) the 1st Bank Assignment
only included Mr. Bentley’s rights and interests in PBH’s half interest in Lot 7; (3)
3
although the Hallings believed the deed in lieu of foreclosure released MedCon from its
payment obligations related to Lot 7, it only released PBH and Mr. Halling; and (4)
MedCon breached the contract by failing to make any payments on the MedCon Note and
therefore Yovanovich was entitled to damages. Based on these findings, the district court
granted Yovanovich’s motion and awarded damages in the amount of $140,353.00,
which represented the original loan amount, plus interest at an annual rate of 6 percent,
accruing monthly for the two-year period of the MedCon Note.
[¶11] After the district court granted summary judgment, MedCon moved to amend its
answer pursuant to Rule 15 of the Wyoming Rules of Civil Procedure. MedCon
contended that because the district court found that MedCon did not release its undivided
half interest to 1st Bank when Mrs. Halling and MedCon signed the deed in lieu of
foreclosure, it had a right to assert a counterclaim against Yovanovich, claiming a
competing interest in Lot 7. The district court denied MedCon’s motion to amend.
MedCon timely appealed the grant of summary judgment and denial of its motion to
amend and Yovanovich cross-appealed the district court’s calculation of damages.
STANDARD OF REVIEW
[¶12] We review a grant of summary judgment deciding a question of law de novo. Sky
Harbor Air Serv., Inc. v. Cheyenne Reg’l Airport Bd., 2016 WY 17, ¶ 40, 368 P.3d 264,
272 (Wyo. 2016). In doing so, “We review a summary judgment in the same light as the
district court, using the same materials and following the same standards.” Thornock v.
PacifiCorp, 2016 WY 93, ¶ 10, 379 P.3d 175, 179 (Wyo. 2016) (quoting Rogers v.
Wright, 2016 WY 10, ¶ 7, 366 P.3d 1264, 1269 (Wyo. 2016)). “No deference is accorded
to the district court on issues of law, and we may affirm the summary judgment on any
legal grounds appearing in the record.” Cont’l Western Ins. Co. v. Black, 2015 WY 145,
¶ 13, 361 P.3d 841, 845 (Wyo. 2015). “The summary judgment can be sustained only
when no genuine issues of material fact are present and the moving party is entitled to
judgment as a matter of law.” Id. To the extent the issues require us to use a different
standard of review, we explain that in our discussion.
DISCUSSION
I. Did the district court err as a matter of law when it held that Yovanovich had an
enforceable contract right against MedCon?
[¶13] The district court ruled that there was an enforceable contract between
Yovanovich and MedCon, and that MedCon breached the agreement by failing to pay
Yovanovich the amount due under the MedCon Note. “The elements for a breach of
contract claim consist of a lawfully enforceable contract, an unjustified failure to timely
perform all or any part of what is promised therein, and entitlement of injured party to
damages.” Schlinger v. McGhee, 2012 WY 7, ¶ 12, 268 P.3d 264, 268 (Wyo. 2012), as
amended on reh’g (Feb. 7, 2012) (quoting Reynolds v. Tice, 595 P.2d 1318, 1323 (Wyo.
1979)).
4
[¶14] MedCon first contends that no lawfully enforceable contract exists because Mr.
Bentley previously had assigned any rights he had under the MedCon Note and MedCon
Mortgage to 1st Bank via the 1st Bank Assignment, making the Yovanovich Assignment
a nullity. The district court found that the Yovanovich Assignment was enforceable
because Mr. Bentley transferred only his interest in PBH’s undivided half interest in the
1st Bank Assignment, and did not include MedCon’s half interest.
[¶15] Mr. Bentley’s 2007 transaction with the Hallings, PBH, and MedCon created two
separate and distinct interests in Lot 7, making PBH and MedCon tenants in common.
A tenancy in common is generally defined as the holding of
property by several persons by several and distinct titles, with
unity of possession only. Stated another way, a tenancy in
common is a form of ownership in which each cotenant owns
a separate fractional share of undivided property. Each
cotenant’s title is held independently of the other cotenants.
86 C.J.S. Tenancy in Common § 1 (February 2017 update); see also Sharples Corp. v.
Sinclair Wyo. Oil Co., 62 Wyo. 341, 358, 167 P.2d 29, 34 (1946) (“Their estates are legal
and several; the only union between them being that of possession.”). “Tenants in
common may each unilaterally alienate their shares through sale or gift or place
encumbrances upon these shares.” United States v. Craft, 535 U.S. 274, 280, 122 S. Ct.
1414, 1421, 152 L. Ed. 2d 437 (2002).
[¶16] MedCon encumbered its interest separate from PBH’s encumbrance of its interest,
and the plain language of the 1st Bank Assignment supports the finding that Mr. Bentley
assigned only his interest in PBH’s undivided half interest to 1st Bank. The 1st Bank
Assignment identified the PBH Mortgage and any property covered by the mortgage as
the collateral, and referred to the book and page number where the PBH Mortgage was
recorded. David Halling, individually and as manager of PBH, consented to the 1st Bank
Assignment as evidenced by his signature. There is no reference to Joyce Halling,
MedCon, or Mr. Bentley’s rights in MedCon’s half interest in Lot 7 in the 1st Bank
Assignment. Mr. Bentley retained his interests in MedCon’s half interest in Lot 7, and
properly assigned it to Yovanovich. We affirm the district court’s entry of summary
judgment, finding that a lawfully enforceable contract existed between Yovanovich and
MedCon.
[¶17] MedCon next argues that because the 1st Bank Assignment was recorded prior to
the Yovanovich Assignment, Yovanovich had notice that Mr. Bentley previously had
assigned all of his interests in Lot 7, and the 1st Bank Assignment takes precedence over
the Yovanovich Assignment. MedCon relies on Wyo. Stat. Ann. § 34-1-121(a), which
states in part:
5
(a) Each and every deed, mortgage, instrument or
conveyance touching any interest in lands, made and
recorded, according to the provisions of this chapter, shall be
notice to and take precedence of any subsequent purchaser or
purchasers from the time of the delivery of any instrument at
the office of the county clerk, for record.
Wyo. Stat. Ann. § 34-1-121(a) (LexisNexis 2015). “[T]he primary purpose of our
recording statute is to secure certainty of title,” Countrywide Home Loans, Inc. v. First
Nat’l Bank of Steamboat Springs, N.A., 2006 WY 132, ¶ 22, 144 P.3d 1224, 1231 (Wyo.
2006), “by publicity of other conveyances, and a grantee should seasonably record the
instrument conveying property to him in order to effectuate this purpose.” Condos v.
Trapp, 717 P.2d 827, 832 (Wyo. 1986), on reh’g, 739 P.2d 749 (Wyo. 1987). As we
discussed, Mr. Bentley’s 2007 transaction with the Hallings, PBH, and MedCon created
two separate and distinct interests in Lot 7. See supra ¶¶ 15-16. The recording statute
does not transform two separate interests in property into one, nor would it have any
effect on the two separate promissory notes. We affirm the district court’s entry of
summary judgment, finding that there is no issue over whether the 1st Bank Assignment
took precedence over the Yovanovich Assignment.
II. Did the district court err as a matter of law when it found that the Yovanovich
Assignment was not ambiguous?
[¶18] MedCon argues that the Yovanovich Assignment is ambiguous and therefore did
not assign the MedCon Note to Yovanovich. The Yovanovich Assignment states in
relevant part:
. . . all rights, title and interest in and to that certain
Promissory Note dated Aug 17, 2007, in the original principal
amount of $124,520.00, executed by DAVID F. HALLING,
JOYCE L. HALLING and MED CON, INC., as Makers,
which is payable to the order of Assignor.
MedCon contends that “[T]he plain language of [this] Assignment specifically transfers
to [Yovanovich] an interest in a note signed by David F. Halling . . . .” The MedCon
Note is not executed by David F. Halling. Yovanovich argues that the inclusion of David
Halling’s name was a simple error and did not create an ambiguity, and even if it did
create an ambiguity, the intent of the parties was discernible by the extrinsic evidence in
the record.
[¶19] “Assignments are contracts and are interpreted in accordance with the rules of
contract interpretation.” Comet Energy Servs., LLC v. Powder River Oil & Gas Ventures,
6
LLC, 2010 WY 82, ¶ 13, 239 P.3d 382, 386 (Wyo. 2010) (citing Boley v. Greenough,
2001 WY 47, ¶ 11, 22 P.3d 854, 858 (Wyo. 2001)). “Whether a term in a contract is
ambiguous is a matter of contract interpretation.” Winter v. Pleasant, 2010 WY 4, ¶ 9,
222 P.3d 828, 833 (Wyo. 2010).
Our primary focus in construing or interpreting a
contract is to determine the parties’ intent, and our initial
inquiry centers on whether the language of the contract is
clear and unambiguous. If the language of the contract is
clear and unambiguous, then we secure the parties’ intent
from the words of the agreement as they are expressed within
the four corners of the contract. Common sense and good
faith are leading precepts of contract construction, and the
interpretation and construction of contracts is a matter of law
for the courts.
Id. at ¶ 9, 222 P.3d at 834 (quoting Cent. Wyo. Med. Lab., LLC v. Med. Testing Lab, Inc.,
2002 WY 47, ¶ 16, 43 P.3d 121, 127 (Wyo. 2002) (internal citations omitted). “Even if
there [is] an ambiguous term or portion of the contract, extrinsic evidence is not
considered if the meaning of the ambiguous term or portion of the contract can be
ascertained from other language of the contract, i.e., from the contract as a whole.”
Amoco Prod. Co. v. Stauffer Chem. Co. of Wyo., 612 P.2d 463, 466 (Wyo. 1980).
[¶20] The Yovanovich Assignment references the MedCon Note, and the district court
appropriately determined the parties’ intent from both documents. Prudential Preferred
Properties v. J & J Ventures, Inc., 859 P.2d 1267, 1271 (Wyo. 1993) (“[E]ach document
before the court represents an integrated contract requiring the court to construe the
parties’ intent from the terms of that particular agreement.”); see also Hensley v.
Williams, 726 P.2d 90, 94 (Wyo. 1986) (“A written agreement may consist of more than
one document, and reference in a contract to extraneous writings renders them part of the
agreement.”). We agree with the district court that, reading the integrated contract as a
whole, the parties’ intent is clear: Mr. Bentley assigned the MedCon Note to Yovanovich,
the MedCon Note is dated August 17, 2007, for the sum of $124,520.00, and is executed
by Mrs. Halling, individually and as President of MedCon. No other promissory note is
part of the record. The inclusion of Mr. Halling’s name in the Yovanovich Assignment
did not create an obscure or double meaning to make the assignment ambiguous.
Whitney Holding Corp. v. Terry, 2012 WY 21, ¶ 41, 270 P.3d 662, 674 (Wyo. 2012) (“A
contract is ambiguous if indefiniteness of expression or double meaning obscures the
parties’ intent.” (citation omitted)). A review of extrinsic evidence is not necessary
because there is no ambiguity. Amoco Prod., 612 P.2d at 466.
[¶21] MedCon also claims that the district court erred by placing the burden on MedCon
to produce evidence of a note signed by Mr. Halling when it held that “[MedCon] did not
7
include, in any of their materials submitted in opposition to the motion for summary
judgment, any note signed by Mr. Halling.” MedCon fails to provide any citations to
relevant rules or case law supporting its position, and in fact Wyoming law is contrary to
MedCon’s position:
The party requesting a summary judgment bears the initial
burden of establishing a prima facie case for summary
judgment. If he carries his burden, “the party who is
opposing the motion for summary judgment must present
specific facts to demonstrate that a genuine issue of material
fact exists.” [Christensen v. Carbon County, 2004 WY 135,
¶ 8, 100 P.3d 411, 413 (Wyo. 2004) (quoting Metz Beverage
Co. v. Wyoming Beverages, Inc., 2002 WY 21, ¶ 9, 39 P.3d
1051, 1055 (Wyo. 2002)).] We have explained the duties of
the party opposing a motion for summary judgment as
follows:
“After a movant has adequately supported the motion
for summary judgment, the opposing party must come
forward with competent evidence admissible at trial
showing there are genuine issues of material fact. The
opposing party must affirmatively set forth material,
specific facts in opposition to a motion for summary
judgment, and cannot rely only upon allegations and
pleadings . . . , and conclusory statements or mere
opinions are insufficient to satisfy the opposing party’s
burden.”
Rice v. Collins Commc’n, Inc., 2010 WY 109, ¶ 8, 236 P.3d 1009, 1013 (Wyo. 2010)
(citations omitted). Once Yovanovich carried the initial burden of establishing a prima
facie case for summary judgment, MedCon had an affirmative duty to produce specific
evidence in opposition to the motion, and MedCon failed to meet its burden. There are
no disputed issues of material fact that the Yovanovich Assignment is unambiguous, and
we affirm the district court’s findings.
III. Did the district court abuse its discretion when it denied MedCon’s motion for
leave to amend its answer?
[¶22] After the district court issued summary judgment in favor of Yovanovich,
MedCon moved to amend its answer pursuant to W.R.C.P. 15(a).2 A district court is
2
A party may amend the party’s pleading once as a matter of course at any
time before a responsive pleading is served, or if the pleading is one to
8
vested with broad discretion to determine whether to allow amendment to pleadings.
Voss v. Goodman, 2009 WY 40, ¶ 14, 203 P.3d 415, 420 (Wyo. 2009). That decision is
“reviewed for an abuse of discretion, and it will be reversed only for an abuse of
discretion shown by clear evidence.” Guy v. Lampert, 2015 WY 148, ¶ 14, 362 P.3d 331,
335 (Wyo. 2015). “Our touchstone inquiry in determining whether a court abused its
discretion is whether the trial court could have reasonably concluded as it did.” Gould v.
Ochsner, 2015 WY 101, ¶ 39, 354 P.3d 965, 977 (Wyo. 2015) (quoting Lavitt v.
Stephens, 2015 WY 57, ¶ 13, 347 P.3d 514, 518 (Wyo. 2015)). The appropriate test to be
applied by the district court when determining whether to grant a motion to amend is:
In the absence of any apparent or declared reason—such as
undue delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, futility of amendment,
etc.—the leave sought should, as the rules require, be ‘freely
given.’
Voss, 2009 WY 40, ¶ 14, 203 P.3d at 420-21 (citations omitted). Any one of the above-
stated factors gives a district court reason to deny a motion to amend. Retz v. Siebrandt,
2008 WY 44, ¶¶ 7-8, 181 P.3d 84, 88-89 (Wyo. 2008); see also Frank v. U.S. West, Inc.,
3 F.3d 1357, 1365 (10th Cir. 1993) (“It is well settled in this circuit that untimeliness
alone is a sufficient reason to deny leave to amend.”).
[¶23] Our review is hindered by the absence of any district court order in the record
denying MedCon’s motion. Forbes v. Forbes, 2015 WY 13, ¶ 37, 341 P.3d 1041, 1053
(Wyo. 2015) (“[O]ur job becomes complicated when we are presented with a judgment
which fails to articulate clearly the reasoning behind it.” (citation omitted)). However,
“[W]e must affirm on appeal if there exists any legally valid ground which appears in the
record supporting the judgment.” Id.
[¶24] MedCon sought leave to amend its answer to assert a counterclaim against
Yovanovich, claiming a competing interest in Lot 7. MedCon argued that because the
district court ruled on summary judgment that MedCon had not released its interest in Lot
7 via the deed in lieu of foreclosure, it was entitled to assert a competing claim in the
which no responsive pleading is permitted and the action has not been
placed upon the trial calendar, the party may so amend it at any time
within 20 days after it is served. Otherwise a party may amend the
party’s pleading only by leave of court or by written consent of the
adverse party; and leave shall be freely given when justice so requires.
W.R.C.P. 15(a).
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property against Yovanovich. Yovanovich objected, arguing that there was no good
cause for the motion, the motion was the product of undue delay, granting the motion
would have been highly prejudicial to Yovanovich, and the claim was futile.
[¶25] MedCon filed its initial answer on June 18, 2015, and did not move to amend it
until May 2, 2016, after the district court ordered summary judgment in favor of
Yovanovich. In Ekberg v. Sharp, Ekberg sought to amend his complaint after the district
court issued its partial summary judgment ruling in favor of Sharp. 2003 WY 123, ¶¶ 11-
15, 76 P.3d 1250, 1254-55 (Wyo. 2003). Ekberg claimed that he “could not have
envisioned requesting damages for loss of business income and loss of use of enjoyment
of the property until the district court issued its order granting partial summary
judgment . . . .” Id. at ¶ 14, 76 P.3d at 1254-55. The district court denied Ekberg’s
request, and this Court upheld the denial, holding that Ekberg “should have contemplated
the damages which reasonably flow from his asserted breach of contract claim.” Id. at
¶ 14, 76 P.3d at 1255. The same is true for MedCon. In its own response to
Yovanovich’s demand letter prior to this lawsuit, MedCon restated Yovanovich’s
position, “Y&B . . . now seek to recover on Note I and Mortgage I on the theory that they
have never been assigned or foreclosed,” and there was “no evidence that the
$124,520.00 mortgage on the property was taken by the bank pursuant to this property
transfer.” MedCon should have contemplated that the district court could find in favor of
Yovanovich on its theory and tailored its response accordingly. MedCon failed to
provide good cause why it did not include its proposed counterclaim with its first answer,
or why it did not move to amend prior to the district court entering summary judgment.
MedCon waited until after a final order was entered to file its motion to amend, causing
undue delay under these circumstances.
[¶26] In addition to the timeliness issues, MedCon’s proposed counterclaim fails to add
1st Bank as a party to the action, rendering its attempt to amend futile. “A proposed
amendment is futile if the complaint, as amended, would be subject to dismissal for any
reason, including that the amendment would not survive a motion for summary
judgment.” Watson v. Beckel, 242 F.3d 1237, 1239-40 (10th Cir. 2001); see also Bennie
v. Munn, No. 4:11CV3089, 2012 WL 1574453, at *2 (D. Neb. May 3, 2012) (“Leave to
amend should be denied as futile ‘where the proposed amendment would not cure the
defect the party sought to correct.’” (internal citation omitted)). MedCon’s proposed
counterclaim centers around the deed in lieu of foreclosure executed between 1st Bank,
David Halling, and Joyce Halling, making the joinder of 1st Bank necessary, and without
it, the claim is futile. The district court did not abuse its discretion when it denied
MedCon leave to amend and we affirm the decision.
IV. Was the district court’s damage calculation clearly erroneous?
[¶27] In its cross-appeal, Yovanovich argues that the district court incorrectly calculated
the damages by calculating the interest to accrue annually instead of monthly, which
10
“essentially erased $163,475 of contractually agreed interest on the promissory note.”
The relevant terms of the MedCon Note are:
1. This loan shall become due and payable twenty four (24)
months from the date of this Note, which is August 17, 2009.
Note shall accrue @ 6% monthly.
Yovanovich contends:
[b]y its plain reading, this language can only be read one way:
the principal amount of the loan is $124,520.00, and each
month, 6% of this total―or $7,471.20―is added to the
principal amount for a period of 24 months. As such, at the
end of 24 months, the total amount due should have been
$303,828.80.
[¶28] “The issue of whether the district court employed the proper methodology or legal
standard to calculate the damages award is an issue of law, which we review de novo.”
Knight v. TCB Constr. & Design, LLC, 2011 WY 27, ¶ 16, 248 P.3d 178, 183 (Wyo.
2011) (citing Cross v. Berg Lumber Co., 7 P.3d 922, 931 (Wyo. 2000)). “However,
assuming that the district court applied the appropriate methodology to calculate
damages, the district court’s damages calculation is a question of fact, which we review”
under a clearly erroneous standard. Id. (citing Velasquez v. Chamberlain, 2009 WY 80,
¶ 27, 209 P.3d 888, 895 (Wyo. 2009)). A finding is “clearly erroneous even though there
is evidence to support it, if after a review of the entire record, the court is left with the
definite and firm conviction that a mistake has been committed.” Keever v. Payless Auto
Sales, Inc., 2003 WY 147, ¶ 7, 79 P.3d 496, 498 (Wyo. 2003) (internal quotation marks
and citation omitted). The district court interpreted “Note shall accrue @ 6% monthly” to
mean 6 percent annual interest compounded monthly, and found that “[r]easonable minds
cannot disagree that [MedCon] owe[s] a total balance of principal and interest of
$140,353.00 under the note.”
[¶29] Yovanovich claims that the terms of the MedCon Note are clear and unambiguous
and the district court’s interpretation is contrary to the plain, unambiguous terms of the
contract. Yovanovich argues that the use of the word “monthly” is in reference to the
interest rate, and that “the note―not the interest rate―accrues monthly.” This argument
confuses the terms “accrual” with “interest rate.” “Accrue” means “[t]o accumulate
periodically; to increase over a period of time .” Black’s Law Dictionary 25 (10th ed. 2014). It is not the note itself that
accrues; it is the interest that accrues. “Accrued interest” is “[i]nterest that is earned but
not yet paid.” Black’s Law Dictionary 935 (10th ed. 2014). In contrast, “interest rate” is
“[t]he percentage of an amount of money which is paid for its use for a specified time,”
and is “[c]ommonly expressed as an annual percentage rate (APR).” Black’s Law
11
Dictionary 813 (6th ed. 1990). As the district court correctly found, “Note shall accrue
@ 6% monthly” meant the 6 percent annual interest rate accrued monthly, it did not
convert an annual percentage rate to a monthly one. The district court’s interest
calculation is not clearly erroneous.
V. Did the district court abuse its discretion when it failed to award prejudgment
interest?
[¶30] Yovanovich argues on cross-appeal that the district court erred when it failed to
award prejudgment interest. The district court awarded Yovanovich $140,353.00, which
is the $124,520.00 loan, plus the 6 percent annual interest rate, accruing monthly, for the
two-year period of the MedCon Note. That was the full amount due at the time the
MedCon Note expired on August 17, 2009. The district court awarded no interest for the
period from August 17, 2009 to April 4, 2016, the date it entered the judgment. “[T]he
question of whether a judge is entitled to award prejudgment interest in a particular case
is a question of law that we review de novo, while the question of whether prejudgment
interest should be awarded is reviewed for an abuse of discretion.” KM Upstream, LLC
v. Elkhorn Constr., Inc., 2012 WY 79, ¶ 44, 278 P.3d 711, 727 (Wyo. 2012) (emphasis in
original). “Prejudgment interest is allowed on the theory that an injured party should be
fully compensated for his or her loss.” Stewart Title Guar. Co. v. Tilden, 2008 WY 46,
¶ 28, 181 P.3d 94, 103 (Wyo. 2008) (citation omitted). We have said that “parties are
entitled to the use of money owed them, that ‘the use of money has real economic value,’
and that ‘[p]rejudgment interest should [be] awarded as an attempt to compensate for that
loss.’” Id. (quoting Goodwin v. Upper Crust of Wyo., Inc., 624 P.2d 1192, 1198 (Wyo.
1981)).
[¶31] “Prejudgment interest is available if a two-part test is met: (1) the claim must be
liquidated, as opposed to unliquidated, meaning it is readily computable via simple
mathematics; and (2) the debtor must receive notice of the amount due before interest
begins to accumulate.” KM Upstream, LLC, 2012 WY 79, ¶ 45, 278 P.3d at 727; see also
Tilden, 2008 WY 46, ¶ 28, 181 P.3d at 103-04 (Prejudgment interest “is appropriate
when the underlying recovery is compensatory in nature and when the amount at issue is
easily ascertainable and one upon which interest can be easily computed.” (citation
omitted)); O’s Gold Seed Co. v. United Agri-Products Fin. Servs., Inc., 761 P.2d 673,
677 (Wyo. 1988) (“Prejudgment interest is recoverable in Wyoming on liquidated claims
but not on unliquidated claims, with a liquidated claim being defined as one that is
readily computable by basic mathematical calculation.”).
[¶32] In Pennant Serv. Co. v. True Oil Co., LLC, 2011 WY 40, ¶ 35-41, 249 P.3d 698,
711-12 (Wyo. 2011), we reversed when the district court refused to award prejudgment
interest on a liquidated sum in a breach of contract case where the opposing party had
notice of the amount sought. Here, the amount sought to be recovered was a sum certain,
and MedCon had notice of the debt prior to the district court granting Yovanovich
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summary judgment. Although we may affirm the district court’s ruling on any legal basis
appearing in the record, we find no basis for the district court’s failure to award
prejudgment interest.
[¶33] MedCon does not contend that Yovanovich is not entitled to prejudgment interest,
but it argues that Yovanovich failed to request it in the complaint, and therefore is not
entitled to it. However, Rule 54 of the Wyoming Rules of Civil Procedure states in part:
(c) Demand for Judgment.―A judgment by default
shall not be different in kind from or exceed in amount that
prayed for in the demand for judgment. Except as to a party
against whom a judgment is entered by default, every final
judgment shall grant the relief to which the party in whose
favor it is rendered is entitled, even if the party has not
demanded such relief in the party’s pleadings.
W.R.C.P. 54 (emphasis added). Under this rule, a party does not waive its request for
prejudgment interest by omitting the request from pretrial submission. See Equal Emp’t
Opportunity Comm’n v. Massey-Ferguson, Inc., 622 F.2d 271, 277 (7th Cir. 1980) (“Rule
54(c) of the Federal Rules of Civil Procedure allows the district court to award the relief
to which a prevailing party is ‘entitled’ regardless whether such relief was sought in the
complaint.”); see also Kahan v. Rosenstiel, 424 F.2d 161, 174 (3d Cir. 1970) (“Plaintiff’s
complaint does not specifically ask for equitable relief; it contains only the general
request for ‘further relief as may be just.’ Nonetheless, under Rule 54(c) of the Federal
Rules of Civil Procedure, a court may have awarded any relief appropriate under the
circumstances.”).3
[¶34] Yovanovich asserts it is entitled to the statutory rate of 7 percent for prejudgment
interest. Wyo. Stat. Ann. § 40-14-106(e) (LexisNexis 2015) provides, “[i]f there is no
agreement or provision of law for a different rate, the interest of money shall be at the
rate of seven percent (7%) per annum.” The parties agreed to 6 percent annual interest
accruing monthly during the two-year term of the MedCon Note, but failed to specify the
rate to be applied after the maturity of the note. Some jurisdictions find that when an
obligation is payable at a future date with an agreed upon interest rate, but fail to provide
a rate to apply after maturity, the statutory rate of interest will apply after maturity. See
Holden v. Freedman’s Sav. & Trust Co., 100 U.S. 72, 74, 25 L. Ed. 567 (1879) (finding
that when an agreement of the parties extends no further than to the time fixed for the
payment of the principal, if payment is not made when the money becomes due, the legal
3
“Since the Wyoming Rules of Civil Procedure are patterned after their federal counterparts, “we have
found federal court interpretations of their rules highly persuasive for interpretations of our corresponding
rules.” Grove v. Pfister, 2005 WY 51, ¶ 9, 110 P.3d 275, 279 (Wyo. 2005).
13
rate of interest will then apply); Buckley v. Buckley, 133 A.2d 604, 606 (Conn. 1957)
(Agreed upon interest rate of 4 percent applied up until date of maturity, thereafter,
statutory rate of 6 percent applied); Metro. Sav. Bank v. Tuttle, 49 N.E.2d 983, 984 (N.Y.
1943) (“After maturity, in the absence of other agreement, the interest is computed as
damages according to the rate then prescribed by law, whether that is more or less than
the contract rate.”). Other jurisdictions have found that when an obligation is silent as to
the rate to be paid after maturity, the stipulated rate continues in effect. See Astoria Fed.
Sav. & Loan Ass’n v. Rambalakos, 372 N.Y.S.2d 689, 690 (N.Y. App. Div. 1975) (“[T]he
contract rate, rather than the statutory rate, governs the rate of interest after maturity and
before judgment.”); Petroscience Corp. v. Diamond Geophysical, Inc., 684 S.W.2d 668,
668 (Tex. 1984) (“[U]nder Texas law, when a note specifies a rate of interest before
maturity but is silent about any rate after maturity, the prematurity rate is implied as the
post-maturity rate.”); Town of Ohio v. Frank, 103 U.S. 697, 698, 26 L. Ed. 531 (Ohio
1880) (“[A] note given for a sum of money, bearing interest at a given rate per month,
continues to bear that rate of interest as long as the principal remains unpaid.”).
[¶35] We agree with the latter approach. In a question of statutory interpretation, our
primary goal is to give effect to the legislature’s intent. L & L Enters. v. Arellano (In re
Arellano), 2015 WY 21, ¶ 13, 344 P.3d 249, 252 (Wyo. 2015). “Where legislative intent
is discernible a court should give effect to the ‘most likely, most reasonable,
interpretation of the statute, given its design and purpose.’” Adekale v. State, 2015 WY
30, ¶ 12, 344 P.3d 761, 765 (Wyo. 2015) (quoting Rodriguez v. Casey, 2002 WY 111,
¶ 20, 50 P.3d 323, 329 (Wyo. 2002)). Wyo. Stat. Ann. § 40-14-106(e) provides the rate
to be applied in the absence of an agreement or provision of law. Here, the parties have
agreed to an interest rate, and there is no absence of an agreement such that the statutory
interest rate should fill the void. We remand for an award of prejudgment interest
consistent with the law outlined above.
VI. Did the district court err as a matter of law when it failed to award post-judgment
interest?
[¶36] The purpose of post-judgment interest is to “compensate the successful plaintiff
for being deprived of compensation for the loss from the time between the ascertainment
of the damages and the payment by the defendant.” Dorr v. Smith, Keller & Assocs.,
2010 WY 120, ¶ 13, 238 P.3d 549, 552 (Wyo. 2010). The parties agreed to a 6 percent
annual interest rate accruing monthly, and for the reasons discussed supra ¶¶ 34, 35, the
rate of interest on the decree or judgment shall correspond to the terms of the contract.
[¶37] Yovanovich asserts that the district court also erred when it failed to award post
judgment interest. Wyo. Stat. Ann. § 1-16-102 (LexisNexis 2015) provides in part:
§ 1-16-102. Interest on Judgments.
(a) Except as provided in subsections (b) and (c) of
this section, all decrees and judgments for the payment of
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money shall bear interest at ten percent (10%) per year from
the date of rendition until paid.
(b) If the decree or judgment is founded on a contract
and all parties to the contract agreed to interest at a certain
rate, the rate of interest on the decree or judgment shall
correspond to the terms of the contract.
“The use of the word ‘shall’ in a statute makes the provision mandatory.” Wyo. Dep’t of
Revenue v. Qwest Corp., 2011 WY 146, ¶ 30, 263 P.3d 622, 632 (Wyo. 2011).4 All
decrees and judgments for the payment of money bear post-judgment interest. Parker v.
Artery, 889 P.2d 520, 527 (Wyo. 1995) (“In Wyoming, statutory interest begins to accrue
when a judgment is entered.”). Post-judgment interest is available under Wyo. Stat. Ann.
§ 1-16-102(a) and (b) whether it is stated in the judgment or not. It would be helpful to
the parties, as well as this Court, if the district court identified the post-judgment rate of
interest in its order if that rate differs from the statutorily prescribed rate, although not
required. Thus, there was no error in the district court’s order with respect to the award
of post-judgment interest.
CONCLUSION
[¶38] The district court’s conclusion that Yovanovich had an enforceable contract
against MedCon and that the Yovanovich Assignment was not ambiguous was not error.
The district court did not abuse its discretion in denying MedCon’s motion for leave to
amend its answer and the damage calculation was not clearly erroneous. However, the
district court abused its discretion when it failed to award Yovanovich prejudgment
interest. The district court did not err when it failed to specify post-judgment interest in
its order, because decrees and judgments for the payment of money bear post-judgment
interest as mandated by Wyo. Stat. Ann. § 1-16-102(a) and (b). Accordingly, we affirm
in part, reverse in part, and remand for proceedings consistent with this opinion.
4
We recently held that “[t]here is no question § 1-16-102 requires that all decrees and judgments for the
payment of money bear interest at the rate of 10% per year from the date of rendition until paid. The
statute uses the word ‘shall,’ a word we have repeatedly said is mandatory.” Sinclair v. Sinclair, 2015
WY 120, ¶ 11, 357 P.3d 1100, 1103 (Wyo. 2015). However, in Sinclair, we recognized a limited
exception:
When a Wyoming court enters a divorce decree requiring a party to pay a
fixed sum of money and does not set a date for payment different than
the date the decree is rendered, § 1-16-102 applies and payment of
interest is required. However, when a district court enters a decree and,
in the exercise of its discretion to fashion a just and equitable property
division, sets a date for payment different than the date the decree is
rendered or provides for payment over time, it is not required to impose
interest.
Id. at ¶ 20, 357 P.3d at 1105-06. The exception in Sinclair is inapplicable to this case.
15