Meyer v. Mulligan

889 P.2d 509, 1995 Wyo. LEXIS 9, 1995 WL 31607
CourtWyoming Supreme Court
DecidedJanuary 30, 1995
Docket93-249, 93-260
StatusPublished
Cited by51 cases

This text of 889 P.2d 509 (Meyer v. Mulligan) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Meyer v. Mulligan, 889 P.2d 509, 1995 Wyo. LEXIS 9, 1995 WL 31607 (Wyo. 1995).

Opinions

CARDINE, Justice, Retired.

This case concerns an agreement between two couples, Rustin and Jolyn Johnson and Morris and Toni Meyer, to purchase a motel in Jackson, Wyoming and to form a corporation to own and operate the motel. The agreement began coming apart when the Meyers were unable to pay them half of the down payment at closing as agreed and, instead, executed a promissory note payable to the Johnsons. The Johnsons, having paid the entire down payment, took title to the motel personally and, soon after, demanded payment on the note. The Meyers refused to pay the note until the motel was assigned to the corporation. The Meyers sued the Johnsons for breach of contract and sued the corporate attorney, employed to form the corporation and create documents to transfer the motel to the corporation, for malpractice. The trial court granted summary judgment to the attorney, concluding: (1) that no attorney-client relationship existed between the corporate attorney and the Meyers; (2) that the attorney had caused no injury to the corporation; and (3) denying the attorney’s motion for W.R.C.P. 11 sanctions. Both the attorney and Meyers appeal.

We affirm in part and reverse in part.

I. ISSUES

In Appeal No. 93-249, appellants Moms and Toni Meyer raise the following issues:

A.Did the trial court err in its finding that there was i o issue of fact as to whether the Appellee Mulligan and the Appellants Meyers had an attorney-client relationship [?]
B. Did the trial court err in its finding that no issue of fact existed as to whether the Appellee breached his duty to the Appellant Link Inc.[?]
C. Did the trial court abuse its discretion in granting Summary Judgment prior to allowing the Plaintiffs/Appellants to conduct reasonable discovery, including and particularly depositions of the parties?

In Appeal No. 93-260, appellant Richard Mulligan raises one issue:

A. Did the Trial Court Err in Denying Defendant Mulligan’s Motion for Sanctions Under Rule 11 of the Wyoming Rules of Civil Procedure?

II. FACTS

On November 25, 1989, Morris and Toni Meyer (Meyers) and Rustin and Jolyn Johnson (Johnsons), all residents of Louisiana, met and discussed potential investment properties available in Teton County, Wyoming. On December 10, 1989, the Meyers and the Johnsons viewed the Sagebrush Motel (motel) located in Teton County, Wyoming. On that same day, the Meyers contacted Dorothy Mercer (Mercer), the owner of the motel, about purchase terms. Mercer related that she would sell the motel for $775,000.00 with earnest money of $50,000.00, if closing occurred by the first week of January 1990, and if the buyers would tender $325,000.00 as down payment at closing with the remaining to be paid in yearly installments.

The Meyers and Johnsons discussed the proposal, agreed to buy the motel, and to employ a local attorney to form a corporation. The Johnsons and Meyers agreed that the motel would be transferred to the corporation and the Meyers and Johnsons would each own 50 percent of its stock. According to the Meyers, on December 11, 1989, they and the Johnsons met over breakfast and discussed the terms of the agreement between them. The Meyers contend that, at that meeting, the Johnsons agreed to pay the entire down payment at closing and that the [512]*512Meyers would give the Johnsons a note for their half of the down payment.

On December 10, 1989, the Meyers and Johnsons hired Attorney Richard Mulligan (Mulligan) to prepare the necessary legal documents to form the corporation which was to purchase and hold the motel, “to assist in the closing [on the motel,] * * * provide advice and counsel as to the effect of Wyoming law on those transactions and * * ⅛ to represent the corporation.” Previously, Meyer had retained Mulligan to form a totally separate and unrelated river tubing corporation. On December 12,1989, the Johnsons paid the $50,000.00 earnest money, which was placed in the trust account of Mercer’s attorney.

Mulligan prepared and filed with the Secretary of State articles of incorporation for Link, Inc. (Link). On December 18, 1989, the Secretary of State issued Link a certificate of incorporation. The articles of incorporation named Morris Meyer and Rustin Johnson as the two members of the board of directors and named Mulligan the incorpo-rator and registered agent. On December 14, 1989, Mulligan billed Link $1,750.00 for “[preparation of documents for purchase of Sagebrush Motel and Contract for Deed regarding property[,] [preparation of Warranty Deed, Quitclaim Deed, Memorandum Of Sale, Same day service [and] incorporation of Link, Inc. of Wyo.”

The Johnsons claim that on the date scheduled for closing on the motel, January 5, 1990, at a meeting in Mulligan’s office, Mercer’s attorney informed the Meyers, the Johnsons, and Mulligan that Mercer would not sell the motel to the Meyers but would sell it to Rustin Johnson individually. After “much discussion” among the Meyers, the Johnsons and Mulligan, the Meyers and Johnsons agreed that Rustin Johnson would take title to the motel individually, then assign his rights and obligations under the contract to Link and that the Meyers would contribute equally through Link.

Then, also according to the Johnsons, after this change in the manner of purchase, the Meyers, for the first time on January 5,1990, informed the Johnsons that they did not have funds available in Wyoming to pay their half of the down payment. After learning about the Meyers’ lack of funds, the Johnsons claim that Mr. Meyer suggested that “the John-sons remit the entire amount of down payment ($375,000.00) and that the Meyers-would execute a promissory note for one half of this down payment”; that thé parties discussed the proposition and Mulligan explained the different types of notes and their consequences. Mulligan then drafted the note, and the Meyers executed it.

Later, on January 5, 1990, Mercer and Rustin Johnson closed on the sale of the motel. At the same time, Rustin Johnson and Mercer executed an agreement, prepared by Mulligan (Assignment and Guarantee), which was personally guaranteed by Rustin Johnson, and granted Johnson the right to assign the contract for deed to Link.

On January 7, 1990, the Meyers paid the Johnsons $1,125.00 for half of Mulligan’s fees and for the initial capitalization of Link. On January 18, 1990, Morris Meyer faxed Mulligan a letter requesting a copy of the demand note and expressing dismay that he had not “seen any writings indicating an effort to place the [motel] and business into [Link].” That same day, Mulligan faxed the Meyers a reply with a copy of the demand note attached. In that reply, Mulligan explained to the Meyers the nature of a contract for deed transaction, informed the Meyers “[e]very-thing has been done to protect you in this matter” and that the motel sales contract had been assigned to Link by Rustin Johnson in the assignment and guarantee document.

On February 16, 1990, the Johnsons orally demanded payment of the note. The Meyers refused to pay the note. On March 2, 1990, after receiving a letter from the Meyers stating their position, the Johnsons wrote the Meyers explaining that Rustin Johnson owned 100 percent of the rights and obligations under the motel sales contract and indicating that they did not intend to assign those rights to Link.

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Bluebook (online)
889 P.2d 509, 1995 Wyo. LEXIS 9, 1995 WL 31607, Counsel Stack Legal Research, https://law.counselstack.com/opinion/meyer-v-mulligan-wyo-1995.