Ludvik v. James S. Jackson Co., Inc.

635 P.2d 1135, 1981 Wyo. LEXIS 381

• Court: Wyoming Supreme Court
• Decided: October 27, 1981
• Docket: 5426, 5427
• Status: Published

Opinions

THOMAS, Justice.

This case raises a question of priority between successive assignments of a purchaser’s interest in a contract for the sale of land located in Wyoming. One of the assignments was made pursuant to an order entered in the United States District Court for the Northern District of Indiana, and the extraterritorial effect of the Wyoming statute providing for the filing of a notice lis pendens is a critical factor. The district court found in favor of the assignee pursuant to the order of the United States District Court for the Northern District of Indiana, but it also awarded damages to the competing assignee for amounts he had paid on the contract for the sale of land. We shall hold that the Wyoming lis pendens statute has no extraterritorial efficacy, and for the reasons indicated below we will reverse the judgment of the district court.

It is helpful to list the participants in this litigation and the matters leading up to it. They are:

James Ludvik (hereinafter referred to as Ludvik). Ludvik was the plaintiff in the district court, and is the assignee of the contract for the sale of land from Horseshoe Creek Limited.

James S. Jackson Company, Inc. (hereinafter referred to as Jackson). Jackson was the defendant in the action below, although it also brought a counterclaim. It is the assignee of the contract for the sale of land pursuant to the order of the United States District Court for the Northern District of Indiana.

James F. K. Centlivre (hereinafter referred to as Centlivre). Centlivre was the owner of real property in Platte County, Wyoming, near Glendo. He was the seller under a Contract for Deed entered into with Horseshoe Creek Limited, a partnership, as buyer.

Horseshoe Creek Limited, a Colorado general partnership (hereinafter referred to as Horseshoe). Horseshoe was a partnership formed by Fred M. Meyer and Peter T. Scifo with Meyer owning a two-thirds interest and Scifo owning a one-third interest. They later conveyed their interests to two Colorado corporations. This partnership was the purchaser under the Contract for Deed with Centlivre as seller. It'assigned its rights under the contract to Ludvik. It also agreed to assign a security interest in the Contract for Deed to Jackson.

Fred M. Meyer (hereinafter referred to as Meyer). An original partner in Horseshoe Creek Limited. He was also an owner of the corporate stock in Peakay’s Eatery, Inc., and he described himself as the owner (presumably because of stock ownership) of Meyer Hog Farms, Inc.

Peter T. Scifo (hereinafter referred to as Scifo). The original partner in Horseshoe Limited, who owned a one-third interest in Horseshoe Creek Limited. He was also an officer and director of Peakay’s Eatery, Inc.

Car-ro, Inc. It is a Colorado corporation, which is the other successor partner in Horseshoe Creek Limited. It is the owner of Meyer’s two-thirds interest in Horseshoe Creek Limited, which was conveyed to it.

Taras, Inc. Taras, Inc., is a Colorado corporation. It is the successor in interest of Scifo with respect to Horseshoe Creek Limited, his one-third partnership interest having been sold to Taras, Inc.

Peakay’s Eatery, Inc. (hereinafter referred to as Peakay’s). This was a corporation intended to operate eating establishments which would be a market for the hogs raised by Meyer Hog Farms, Inc. It contracted with Jackson for the construction of buildings. In the process it became indebted to Jackson, and that indebtedness was assumed and guaranteed by Horseshoe and Meyer Hog Farms, Inc. Meyer was the principal individual in these several enterprises.

A chronology of the significant events also is helpful to the reader. Those dates and events are:

October 1,1976. Meyer and Scifo created Horseshoe according to Colorado law.

November 9, 1976. Contract for Deed entered into between Horseshoe as buyer and Centlivre as seller.

February 4, 1977. Meyer and Scifo conveyed their interests in Horseshoe to Car-ro, Inc., and to Taras, Inc., respectively.

August 4, 1977. Meyer signed an agreement pursuant to which he assigned “his interest” in the Centlivre contract to James Jackson, as an individual. Meyer at that time purported to act as president of Horseshoe.

December 17, 1977. An agreement was entered into between Jackson, Peakay’s, Horseshoe and Meyer Hog Farms, Inc., pursuant to which Horseshoe agreed to pledge partnership assets, including a certain contract with Centlivre, to assure payment of obligations due Jackson arising out of the construction of restaurants for Peakay’s and a promissory note.

December 6, 1978. Jackson initiated an action in the United States District Court for the Northern District of Indiana to secure a judgment for money due it pursuant to the guarantee and to obtain an assignment of the Centlivre contract by Horseshoe.

December 6, 1978. Jackson filed in Platte County, Wyoming, a “Notice of Pendency of Action” based upon the case filed in the United States District Court for the Northern District of Indiana.

January 18-23,1979. Horseshoe assigned the Centlivre contract to Ludvik. The assignment was executed by Taras, Inc., on January 18, 1979, and by Car-ro, Inc., on January 23, 1979.

August 29, 1979. A compromise and settlement of the litigation in the United States District Court for the Northern District of Indiana was filed with the court.

December 17, 1979. Judgment purportedly based upon the Compromise and Settlement Agreement was entered in the United States District Court for the Northern District of Indiana.

January 2,1980. The United States Marshal for the Northern District of Indiana was ordered to make an assignment of the Centlivre contract on behalf of Horseshoe to Jackson.

January 4, 1980. The assignment was made of the Centlivre contract to Jackson on behalf of Horseshoe by the United States Marshal for the Northern District of Indiana.

In addition to the foregoing chronology, some of the language of the documents presented to the trial court is significant. In the December 17, 1977, agreement the following language appears pertaining to the Centlivre contract:

“6. Payment of Obligation. * * * Further, in the event of the sale by Horseshoe Creek Limited of any of its assets and in particular its interest in that certain contract with James F. K. Centlivre dated November 9, 1976, for certain real estate in the State of Wyoming, then to the extent of such cash proceeds received, the same shall be applied upon the then existing unpaid balance of the account due Jackson.

“7. Additional Consideration. As a part of the consideration herein, the parties hereto, either jointly or severally, will act to cause the following interests to be transferred to Jackson, its assigns or nominee, as Jackson may in writing direct:

******

“D. A security interest in a certain contract for deed entered into on November 9, 1976 between James F. K. Cent-livre and Horseshoe Creek Limited of certain property from James F. K. Centlivre located in Platt [sic] County, Wyoming.” (Emphasis added.)

The complaint filed on December 6, 1978, in the United States District Court for the Northern District of Indiana relied upon both the August 4, 1977, agreement signed by Meyer and the December 17,1977, agreement. In the prayer for relief Jackson requested:

“(2) Upon the hearing on the merits, this Court issue its order specifically requiring the Defendant, Horseshoe Creek Limited, to assign to the Plaintiff all of its right, title and interest in and to the said Contract for Deed.”

The document recorded in Wyoming reads as follows:

“NOTICE OF PENDENCY OF ACTION

“NOTICE IS HEREBY GIVEN that James S. Jackson Co., Inc., an Indiana Corporation, has filed an action against Horseshoe Creek Limited, a Colorado General Partnership, and Meyer Hog Farms, Inc., a Colorado Corporation, in the United States District Court of the Northern District of Indiana, South Bend Division, Civil Action # S-78-0271, the object of which action is to compel the Defendant to assign unto the Plaintiff its right, title and interest in and to a Contract for Deed wherein Defendant is purchasing the real property described on Exhibit A hereto annexed and by this reference made a part hereof.”

In connection with the action in the United States District Court for the Northern District of Indiana, the Compromise and Settlement Agreement which was entered into provided in pertinent part as follows:

“D. If the Defendants fail to pay to Plaintiffs the aforementioned One Hundred Seventy-five Thousand Dollars ($175,000.00) when due, the Defendants agree and consent to this Court entering a judgment against them, jointly and severally, in the amount of Three Hundred Fifty-two Thousand Ten Dollars and Fifty-four Cents ($352,010.54) with interest at ten percent (10%) per annum from March 30, 1979, to date of judgement, all without relief from valuation or appraisment [sic] laws and with attroney [sic] fees in the amount of Fifteen Thousand Dollars ($15,000.00), together with a decree requiring Horseshoe Creek Limited to assign to Plaintiff a security interest in that certain deed dated November 9, 1976, between James F. K. Centlivre and Horseshoe Creek Limited, of real property located in Platte County, Wyoming, as security for the money judgement entered by the Court. * * * ” (Emphasis added.)

The critical language in the Order entered by the United States District Court for the Northern District of Indiana reads as follows:

“IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED that Joseph N. Novotny, United States Marshall of this District, execute, acknowledge and deliver to the Plaintiff in the form attached, an Assignment of Horseshoe Creek Limited’s Contract for Deed between James F. K. Centlivre and Horseshoe Creek Limited of real property located in Platte County, Wyoming, to-wit: [Hereinafter follows a description of the property.]” (Emphasis added.)

It thus appears that Horseshoe, as buyer of real property in Wyoming, pursuant to a Contract for Deed, agreed that it would, as Jackson might direct in writing, assign a security interest in that contract to Jackson. Horseshoe never did assign the contract or a security interest in it to Jackson. Documentation in the record does not disclose whether Jackson ever, in writing, directed the assignment, although counsel for Jackson testified that demand for the assignment had been made prior to filing the suit against Horseshoe and Meyer Hog Farms, Inc. After that agreement, Horseshoe did assign its interest as buyer in the Centlivre contract to Ludvik. The action in the United States District Court for the Northern District of Indiana was pending at the time of that assignment, and the Notice of Pendency of Action had been filed in Platte County, Wyoming, prior to the assignment.

Payment not having been made when due pursuant to the Compromise and Settlement Agreement, a judgment was entered in the United States District Court for the Northern District of Indiana on December 17, 1979, and pursuant to that judgment and an order entered consistent therewith, the United States Marshal made an assignment of the Centlivre contract on behalf of Horseshoe to Jackson on January 4, 1980.

This litigation between Ludvik and Jackson followed. The matter first became a problem for Ludvik when the title insurance company from which he sought a commitment for title insurance listed among the exclusions any loss or damages resulting from a judgment that might be entered in the suit referenced in the Notice of Penden-cy of Action. He then sought relief by filing an action in the district court in Platte County prior to the entry of judgment in the United States District Court for the Northern District of Indiana. He requested that his title be quieted against Jackson and that the Notice of Pendency of Action be set aside and declared invalid and void. He also sought actual and punitive damages because of the alleged malicious recording of the Notice of Pendency of Action. Jackson, by answer, denied that Lud-vik was entitled to any relief, and by counterclaim Jackson sought to have the assignment ordered by the United States District Court for the Northern District of Indiana recognized as superior to any interest that Ludvik might have in the property in question. Ludvik denied the claims of the defendant Jackson, and a trial resulted in a judgment in favor of Jackson, recognizing the assignment ordered by the United States District Court for the Northern District of Indiana as superior to Ludvik’s interest and ordering immediate possession in favor of Jackson. The court did require that Ludvik be reimbursed in the sum of $129,648.14 for payments made on the contract, which judgment was reduced by $42,-769.50, representing a reasonable rental for the use of the property from January 21, 1979, until the time that possession was delivered to Jackson. Ludvik has appealed from the judgment in favor of Jackson with respect to the superior interest in the property, and Jackson has appealed from the judgment awarding money relief to Ludvik.

In his appeal Ludvik states the issues as follows:

“1. Did the trial court err in finding that an Assignment of Contract for Deed, issued by a U.S. Marshall for the U.S. District Court for the Northern District of Indiana to James S. Jackson Co. (Defendant below) was superior to that Assignment given by a contract purchaser of the lands, Horseshoe Creek Limited, to James Ludvik (Plaintiff below), the assignments involving lands located exclusively in Platte County, Wyoming?

“2. If the trial court did not err in the above determination, was the amount of rental the court ordered paid by Ludvik to Jackson Co. excessive and not supported by the evidence?”

Jackson agrees with that statement of issues.

In Jackson’s appeal the issues are stated as follows:

“1. The Court improperly granted the Plaintiff money damages for a cause of action which was never plead [sic] or otherwise asserted by the Plaintiff.

“2. The Court should not have granted the Plaintiff credit for expenditures made while he was a lis pendens purchaser and a mala fides trespasser.

“3. The Defendant’s Motion for a New Trial should have been granted upon the Defendant’s presentation of newly discovered documents showing that Plaintiff was engaged in a scheme to defraud Defendant and others.”

Ludvik agrees with that statement of issues except he asserts that the reference to “money damages” in the first issue should refer to “restitution for expenditures” parallel to the second issue.

We first consider whether the assignment ordered by the United States District Court for the Northern District of Indiana was superior to Ludvik’s assignment because of the Notice of Pendency of Action filed in Platte County, Wyoming. The Notice of Pendency of Action purports to have been filed pursuant to § 1-6-108, W.S.1977, which reads as follows:

“In an action in a state court or in a United States district court affecting the title or right of possession of real property, or in an action between husband and wife, the plaintiff at the time of filing the complaint and the defendant at the time of filing his pleading when affirmative relief is claimed or at any time afterward, may file in the office of the county clerk in which the property is situate a notice of pendency of the action containing the names of the parties, the object of the action or defense and a description of the property in that county affected thereby. From the time of filing the notice a subsequent purchaser or encum-brancer of the property shall have constructive notice of the pendency of the action.” ¹

This statute must be read in conjunction with § 1-6-106, W.S.1977, which reads as follows:

“When a summons has been served or publication made, the action is pending so as to charge third persons with notice of its pendency, and while pending no interest can be acquired by third persons in the subject matter thereof, as against the plaintiff’s title.”

This latter statute succinctly states what is known in the law as the common-law doctrine of lis pendens. The common-law doctrine of lis pendens correctly is delineated in Herman v. Goetz, 204 Kan. 91, 460 P.2d 554 (1969), in which the Kansas court said, 460 P.2d at 559:

“In Travis v. Topeka Supply Co., 42 Kan. 625, 628, 22 P. 991, this court stated the three elements of a valid and effective lis pendens are: (1) The property must be of a character to be subject to the rule of ¡is pendens; (2) the court must acquire jurisdiction both of the person and the property; and (3) the property must be sufficiently described in the pleadings. The litigation must be about some specific thing or property which will be affected by the termination of the suit (54 C.J.S. Lis Pendens § 4, p. 574).”

It is obvious in this instance that the United States District Court for the Northern District of Indiana did not have jurisdiction over the real property in the State of Wyoming, and under the common-law doctrine of lis pendens no priority could attach to the action of that court by virtue of the pending action. Wilson v. Hefflin, 81 Ind. 35 (1881); Stewart v. Wheeling & L. E. Ry. Co., 53 Ohio St. 151, 41 N.E. 247 (1895).

At common law the doctrine of lis pendens had no efficacy outside the territorial jurisdiction of the court in which the action was pending. Walker v. Houston, 176 Ga. 878, 169 S.E. 107 (1933); Carr v. Lewis Coal Co., 96 Mo. 149, 8 S.W. 907 (1888); Stewart v. Wheeling & L. E. Ry. Co., supra; Flanagan v. Clark, 156 Okl. 230, 11 P.2d 176 (1932); Shelton v. Johnson, 4 Sneed, 672, 70 Am.Dec. 265 (Tenn.1857); First Nat. Bank of Webster Springs v. McGraw, 85 W.Va. 298, 101 S.E. 474 (1919). We then must consider whether the legislature of the State of Wyoming in adopting § 1-6-108, W.S.1977, desired to expand the common-law doctrine of lis pendens by providing for extraterritorial application. We are persuaded that no such intention can be attributed to the legislature. The statute provides for the filing of a notice in the county in which the property is situate, and obviously is designed to permit a notice of lis pendens within the State of Wyoming with respect to property located in the state in relation to an action brought in another county or in the United States District Court for the District of Wyoming. This construction is consistent with the position this court took in Kane v. Kane, Wyo., 577 P.2d 172 (1978). In that case the court said, 577 P.2d at 175:

“We now come to the third issue raised by this appeal, that is, whether the district court had the power — for such is the essence of jurisdiction — to make disposition of the land of the defendant located outside the borders of Wyoming.

“We think the issue settled, at least since Fall v. Eastin, 215 U.S. 1, 30 S.Ct. 3, 54 L.Ed. 65, 23 L.R.A., N.S., 924 (1909), that the court of one state has no power to directly affect title to land located wholly within the borders of another. Decrees and judgments purporting to this effect are void, and to the extent the decree before us purports to so do it must fail. * * * »

The benefit of that proposition effectively would be denied to owners of real property in Wyoming if by the filing of a notice of lis pendens relating to an action pending in another jurisdiction the property would be bound by the result of any judgment in the foreign court. That, of course, is what Jackson claims in this case.

In Kane v. Kane, supra, this court recognized that a court of equity having authority to act upon the person may indirectly act upon real estate located in another state through the coercive power it has over the person over whom it has jurisdiction. We, therefore, do not deny the power of the United States District Court for the Northern District of Indiana to order the assignment by Horseshoe Creek Limited. Rule 70 of the Federal Rules of Civil Procedure provides specifically that if when directed to deliver a deed or other documents or to perform any other specific act, the party so directed fails to comply, the court may direct the act to be done by some other person appointed by the court and the act when so done has like effect as if done by the party. The same rule recognizes, however, that for the United States District Court to enter judgment divesting the title of any party and vesting in others, the property has to be within the district. Stewart Oil Co. v. Sohio Petroleum Co., 185 F.Supp. 765 (D.Ill.1960). In this respect Rule 70, Fed.R.Civ.P., appears to be consistent with case law limiting the common-law doctrine of lis pendens to property within the district. Atlas Ry. Supply Co. v. Lake & River Ry. Co., 134 F. 503 (C.C.N.D. Ohio 1905). It appears under the specific language of this rule that the assignment by the United States Marshal for the Northern District of Indiana was effective only from the date of the assignment. Ludvik’s assignment from Horseshoe Creek Limited antedated that assignment by almost a year.

It must be remembered in this instance that no special status attaches to the United States District Court for the Northern District of Indiana because it is a federal court. When a United States District Court is sitting in the exercise of its diversity jurisdiction it acts simply as another court of the state. Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1944); Wyoming Farm Bureau Mutual Insurance Company, Inc. v. State Farm Mutual Automobile Insurance Company, 467 F.2d 990 (10th Cir. 1972); Fehling v. Cantonwine, 379 F.Supp. 1250 (D.Wyo.1974), affirmed 522 F.2d 604 (10th Cir. 1975); Bank of Waukegan v. Freshly, 421 F.Supp. 1033 (N.D.Ind.1976).

It thus appears that in terms of chronological priority Ludvik’s assignment is superior to that of Jackson’s unless the Notice of Pendency of Action filed pursuant to § 1-6-108, W.S.1977, had the effect of invoking the provisions of § 1-6-106, W.S. 1977. The Notice of Pendency of Action of the action filed in the United States District Court for the Northern District of Indiana was ineffective for that purpose. There then was no statutory provision which prevented Ludvik from acquiring the interest of Horseshoe as a purchaser in the Centlivre contract for deed while the action by Jackson against Horseshoe was pending in the United States District Court for the Northern District of Indiana. Whether the action in the United States District Court for the Northern District of Indiana could be considered an action “affecting the title or right of possession of real property” in Wyoming to fit it within the provisions of § 1-6-108, W.S.1977, is itself questionable. We need not dispose of that troublesome issue, however, because of our holding that the statute has no application.

We turn then to a consideration of whether Ludvik should be foreclosed from the assignment of the Centlivre contract because of his actual knowledge of the court proceedings in the United States District Court in Indiana. Among its comments in the Final Judgment the district court found:

“9. The Court finds that the Plaintiff accepted the Assignment of the Contract knowing of the pending suit in the United States District Court in Indiana and therefore took possession subject to the rights of the parties to the litigation as finally determined by the Judgment of that Court.

“10. The Court finds that the Plaintiff herein cannot be considered a bona fide purchaser.”

The ninth paragraph of the findings is consistent with the application of the doctrine of lis pendens. The tenth paragraph would not necessarily depend upon that doctrine, and we must consider the status of Ludvik as a bona fide purchaser a matter of law.

Ludvik was apprised by the commitment for title insurance dated January 17, 1979, that there was a civil action pending which was described in the Notice of Pend-ency of Action. On the assumption that this charged Ludvik with a duty to investigate, he would have found in the court file in the United States District Court for the Northern District of Indiana the August 4, 1977, agreement signed by Meyer, and the December 17, 1977, agreement executed by Taras, Inc., for Horseshoe Creek Limited. The August 4, 1977, agreement does not appear to have been relied upon in connection with the disposition of the case by the United States District Court for the Northern District of Indiana, and indeed it is difficult to conceive of any way in which it could have been relied upon. As we indicated in Peterson v. First National Bank of Lander, Wyo., 579 P.2d 1038 (1978), it is a question of fact for the trial court to determine whether a party has notice of circumstances sufficient to put a prudent man upon inquiry as to a particular fact. We have noted above, language from the December 17, 1977, agreement which contemplated the possible sale by Horseshoe of its interest in the Centlivre contract. We also have quoted that portion of the language of that agreement which provided that Horseshoe would cause to be transferred to Jackson “a security interest in a certain contract for deed.” (Emphasis added.) For our purposes here we will assume that the doctrine of equitable conversion caused Horseshoe’s interest in the contract for deed to be real property and that the December 17, 1977, agreement would have the effect of creating an equitable mortgage against that property.

We believe the wisdom of our decision to not hazard the rights of Wyoming property owners to the vagaries of judicial action in courts outside the State of Wyoming is illustrated by what occurred in this case. After the action was initiated in the United States District Court for the Northern District of Indiana the Compromise and Settlement Agreement quoted above was executed and filed in that court. Pursuant to its provisions, which were consistent with the December 17, 1977, contract, the agreement was that any judgment entered by the court would encompass “a decree requiring Horseshoe Creek Limited to assign to plaintiff a security interest in that certain deed.” (Emphasis added.) Such a decree would have, consistent with the December 17, 1977, agreement, created a mortgage against Horseshoe Creek Limited’s interest in the Contract for Deed. The United States District Court for the Northern District of Indiana, however, did proceed, we assume at the behest of counsel, to afford greater relief than that agreed to, and it ordered the assignment of the contract. Had it limited the relief to that agreed to, it would have ordered an assignment of a security interest which would have given Jackson only the right to come to the State of Wyoming and foreclose that mortgage. Even if Ludvik were not considered a bona fide purchaser with respect to such a mortgage, he would have had an opportunity to protect his interest in connection with the foreclosure proceedings by bidding at the sale.

The foregoing is primarily of academic interest, however, because of the Compromise and Settlement Agreement which was entered into by the parties in the United States District Court for the Northern District of Indiana. It, like any other contract, is subject to construction as a matter of law, and the intent of the parties is to be gathered from the four corners of the instrument. Shepard v. Top Hat Land & Cattle Co., Wyo., 560 P.2d 730 (1977); Governor Apartments, Inc. v. Carney, 342 Mass. 351, 173 N.E.2d 287 (1961). Our reading of the Compromise and Settlement Agreement persuades us that properly construed as a matter of law it manifests an intention of the parties to substitute it in lieu of the December 17,1977, agreement. See Harbeson v. Mering, 147 Fla. 174, 2 So.2d 886 (1941); Governor Apartments, Inc. v. Carney, supra; Loraas v. Connolly, N.D., 131 N.W.2d 581 (1964); and The Praetorians v. Simons, Tex.Civ.App., 187 S.W.2d 238 (1945). Counsel for Jackson testified that a deliberate effort was made to obtain the signature of Meyers’ wife as president of Car-ro, Inc., for Horseshoe Creek Limited. It among other things states:

“1. Purpose: This agreement is made as a compromise between the parties for the complete and final settlement of their claims, differences and causes of action with respect to the dispute described below.”

It also provides in paragraph 3(D):

“ * * * A copy of this agreement shall be filed with the Court and the parties are agreed that it shall form the basis of a judgement to be entered in this action in the event the Defendants fail to pay Plaintiff as agreed upon.”

In addition new consideration was incorporated in the Compromise and Settlement Agreement. The net effect is that the claimed rights of Jackson, according to the December 17, 1977, agreement were satisfied by the Compromise and Settlement Agreement entered into after Ludvik took his assignment, and consequently the effect of any actual notice he may have of the December 17,1977, agreement does not prevent his being a bona fide purchaser of the Contract for Deed. Jackson’s claims under that agreement disappeared when the Compromise and Settlement Agreement was made and filed.

Since his assignment antedated any assignment to Jackson pursuant to the order of the United States District Court for the Northern District of Indiana, Ludvik had priority unless the Notice of Pendency of Action was effective to invoke the provisions of § 1-6-106, W.S. 1977. We have held that it was not, and it is our conclusion that Ludvik’s interest should be recognized as superior to that of Jackson. It further is free from any claim of lien by Jackson.

The judgment of the district court is reversed, and the case is remanded, with instruction to the district court to enter judgment in accordance with this decision, which will of course require an adjustment of the money award to Ludvik. Under the circumstances the issues of Jackson’s appeal are moot, and there is no need to consider its claims under its motion for a new trial relating to fraud on the part of Ludvik since that conduct had no effect upon the situation in accordance with this opinion.

1 . We are not unmindful of the provisions of 28 U.S.C. § 1964. From the legislative history relating to that statute we recognize that its purpose was to afford to litigants in a federal court in any state the same protection they would enjoy if they were litigating in the state courts. S.Rep.No. 2131, 85th Cong., 2nd Sess. 4 (1958). The Senate Report notes that state legislation will be necessary to authorize the filing of notice of federal suits. Indeed that is exactly what later happened in Wyoming. Ch. 125, S.L. of Wyoming 1965. The federal statute, and the amendment to the Wyoming statute, however, give no special efficacy to the notice based upon the pending action in the United States District Court for the Northern District of Indiana.