author: KAUTZ, Justice.

text:
    Arsenio LEMUS, Appellant (Petitioner), v. Merissa MARTINEZ, Appellee (Respondent).
    S-18-0223
    Supreme Court of Wyoming.
    May 17, 2019
    Representing Appellant: Tyler J. Garrett of Hathaway & Kunz LLP, Cheyenne, Wyoming.
    Representing Appellee: Sarah J. Manwarren of Jacobs-Polidora, LLC, Laramie, Wyoming.
    Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.
   KAUTZ, Justice.

[¶1] Appellant Arsenio Lemus (Father) appeals from the district court's order awarding primary custody of the parties' two children and child support to Appellee Merissa Martinez (Mother). Father claims the district court abused its discretion in determining child support, specifically challenging its calculation of his income. He also asserts the district court violated his right to due process by limiting his direct testimony and his cross-examination of Mother's witnesses.

[¶2] We reverse the district court's child support order and remand for further proceedings.

ISSUES

[¶3] Father presents two issues on appeal:

1. Did the district court abuse its discretion when it calculated the amount for child support based on a misunderstanding of the evidence establishing Father's income?
2. Were Father's constitutional due process rights violated when the district court precluded him from fully testifying and cross-examining witnesses because of time limits?

Mother includes an additional issue:

3. Is [Mother] entitled to attorney fees and costs against [Father] pursuant to W.R.A.P. 10.05 ?

FACTS

[¶4] Mother and Father were not married, but they had two children together-JAL (born in 2006) and AKL (born in 2011). The family lived together for several years, and Father's older children occasionally lived with them. Eventually, the parties' relationship soured, and on November 7, 2016, Father filed a petition in the district court to establish child custody, visitation and child support. He sought sole custody of the children, subject to Mother's visitation. Father also requested that the court order Mother to pay child support. Mother responded to Father's petition and counterclaimed for sole custody of the children and for an order awarding her child support.

[¶5] The case was set for a one-day bench trial on September 5, 2017, with the time evenly divided between the parties, "minus breaks" and "any time attributable to [the guardian ad litem (GAL) ]." The court cautioned both parties that time was limited and they needed to be "aware of the implications of running out of time." The district judge periodically informed the parties of the amounts of time they had used.

[¶6] A few days before trial, Father filed a confidential financial affidavit on the form mandated by Wyo. Stat. Ann. § 20-2-308 (LexisNexis 2017). He indicated he was both employed and self-employed. Father stated he was employed by Laramie Valley Contracting & Roofing Services, Inc., and earned a monthly salary of $ 12,525. Later in the form, he declared his gross income from his employment was $ 9,491. After deducting monthly taxes of $ 2,086 and the monthly premium for the children's health insurance, he arrived at a monthly net income of $ 7,030. Father did not provide any documentation verifying his employment income, such as pay stubs or W-2 forms. He also did not provide information about his self-employment income, as directed in the confidential affidavit form.

[¶7] Father attached the first two pages of his tax returns for 2014 and 2015 and part of an amended 2014 return to his confidential financial affidavit. He indicated he had requested an extension to file his 2016 tax return and it was due on October 15, 2017. Father did not supplement his confidential financial affidavit with the 2016 return after trial. The tax returns he provided did not show any wages, salaries or tips. The only income reported on the tax returns was on line 17 for "[r]ental real estate, royalties, partnerships, S corporations, trusts, etc." The tax returns directed that Schedule E forms be attached, but they were not included in Father's court filings. According to the IRS website, Schedule E is used to report income or loss from the entities identified in line 17. https://www.irs.gov/forms-pubs/about-schedule-e-form-1040.

[¶8] Father reported his total income on his 2014 tax returns as $ 106,874 and on his 2015 tax return as $ 150,307. Father's 2015 income of $ 150,307, divided by twelve months, results in a monthly income of $ 12,525.58, which is consistent with one of the amounts reported in his confidential financial affidavit as being income from his employment with Laramie Valley Contracting. Father did not provide tax returns, Schedule K-1s, or income and expense reports for his business entities.

[¶9] During opening statement, the GAL drew the district court's attention to the insufficiency of Father's confidential financial affidavit and the lack of supporting documentation. She stated:

I would like to bring one more matter before the Court that I would ask the Court take into consideration, which is a confidential financial affidavit by [Father] was filed very, very late in this case, and so really not allowing for the time to really deeply analyze or investigate, but I would like the Court to take judicial notice that he did not provide a 2016 tax -- his taxes, nor did he provide a[n] ... independent statement. And from his own admissions, I believe that [Father] will testify that he is also the owner of the Arsenio Lemus Holdings, LLC, and there has been no reporting with regard to the income that he receives from that.
Also, [Father] had indicated to me that he also is part owner in an establishment, a bar here in town, and I've gotten -- no disclosures have been made, and I believe I would like to ask the Court to consider whether or not we need to delay a decision with regard to child support until a proper confidential financial affidavit may be brought before the Court.

The district court stated it would "certainly return to that question before taking the matter under advisement." In the end, though, the district court determined child support without requiring more information about Father's finances.

[¶10] Father did not testify about his financial status during his direct examination. On cross-examination, Father testified he had interests in several companies, including Laramie Valley Contracting, Arsenio Lemus Holdings, and Opportunity Knocks. He did not explain the business structure of any of these companies, although a handwritten note which appears to have been added to the confidential financial affidavit identifies Laramie Valley Contracting as a corporation. He testified his companies were "pass through" entities for income tax purposes. Father said that, given the pass-through nature of his businesses, all of his income was reported on his personal tax returns.

[¶11] As part of his business dealings, Father owns approximately 50 rental units. The GAL questioned Father about income from the rentals:

Q. ... [W]hat is the rent range for each one of those units?
A. It can vary anywhere from the cheapest one I own is probably, maybe in the range of [$]395, all utilities included, all the way up to a [$]1,050, [$]1,300 if you have a residential home.

The record contains no documentation showing Father's gross income from Laramie Valley Contracting, the rentals, or any other business interests. There is also no information about the business deductions he took to arrive at the income figures shown on his 2014 and 2015 tax returns.

[¶12] Mother testified that she had worked for Father and believed his rental income was around $ 45,000 per month and his income from Laramie Valley Contracting "depends on the month, between -- it could be [$]10,000 or [$]80,000 for that month." She believed he earned "[$]450,000 plus" per year, depending upon the year. She also disputed Father's confidential financial affidavit showing that he earned $ 7,030 in net employment income from Laramie Valley Contracting. She said he did not get a paycheck because he was self-employed.

[¶13] The district court directed the parties to file written closing arguments and/or proposed findings of fact and conclusions of law. In her closing argument, the GAL stated:

Prior to determining child support, [Father] should be ordered to turn over complete tax returns, W-2s, and/or verified income and expense statements for all three of his business[es] that, among other things, must disclose exactly how much depreciation [Father] is claiming on his federal taxes. Such ordered disclosures should include income information for the tax year of 2016 for which [Father] has provided no documentation.

[¶14] Mother's closing argument also emphasized the insufficiency of Father's financial disclosures. However, rather than asking the district court to delay a child support ruling and order Father to provide correct documentation, Mother asked the court to impute a net monthly income of $ 25,000 to Father, resulting in a presumptive monthly child support obligation of $ 3,520. Father filed proposed findings of fact, conclusions of law and judgment, requesting the district court to award him primary custody of the parties' children and order Mother to pay him "child support in the minimum amount of $ 50.00 per month."

[¶15] Five months after the trial, the district court held a hearing to orally deliver its decision. The district court awarded Mother primary custody of the children, subject to Father's visitation. With regard to child support, the district court stated Father's financial affidavit was "totally incomplete and unsatisfactory." The district court then said, "the only rational way to conform [Father's] testimony to the financial affidavit[ ] and the tax returns is to find that he has two forms of income." The court determined his monthly wages, presumably from Laramie Valley Contracting, after taxes were $ 7,030. It ruled that the income shown on his tax returns was "only rental income." The court concluded that, for 2014, Father's net rental income was $ 87,200, which it calculated by subtracting $ 17,800 for taxes from $ 105,000 in rental income. For 2015, the district court found that Father's rental income was $ 150,307 and he paid $ 32,373 (sic $ 32,273) in tax, resulting in a net rental income of $ 117,934.

[¶16] The district court averaged Father's 2014 and 2015 net rental incomes as $ 102,566 and divided that amount by twelve for a monthly rental income of $ 8,547. The district court added Father's monthly rental income to his wages for a "total net [monthly] income for purposes of child support [of] $ 15,577." The court then calculated Father's presumptive monthly child support obligation as $ 2,588.

[¶17] The parties could not agree on a written order incorporating the district court's oral ruling, so after clarifying a few matters at a hearing on April 18, 2018, the district court entered a written order on June 28, 2018. The written order was consistent with the court's oral ruling with regard to child custody and child support. Father appealed.

DISCUSSION

1. Child Support

[¶18] We review the district court's order on child support by applying the abuse of discretion standard. Bagley v. Bagley, 2013 WY 126, ¶ 6, 311 P.3d 141, 143 (Wyo. 2013).

A court does not abuse its discretion unless it acts in a manner which exceeds the bounds of reason under the circumstances. Pinther v. Pinther, 888 P.2d 1250, 1252 (Wyo.1995) (quoting Dowdy v. Dowdy, 864 P.2d 439, 440 (Wyo.1993) ). Our review entails evaluation of the sufficiency of the evidence to support the district court's decision, and we afford the prevailing party every favorable inference while omitting any consideration of evidence presented by the unsuccessful party. Triggs, 920 P.2d at 657 ; Cranston v. Cranston, 879 P.2d 345, 351 (Wyo.1994). Findings of fact not supported by the evidence, contrary to the evidence, or against the great weight of the evidence cannot be sustained. Jones v. Jones, 858 P.2d 289, 291 (Wyo.1993).

Stevens v. Stevens, 2014 WY 23, ¶ 8, 318 P.3d 802, 806 (Wyo. 2014) (quoting Bingham v. Bingham, 2007 WY 145, ¶ 10, 167 P.3d 14, 17-18 (Wyo. 2007) ).

[¶19] Father claims the district court abused its discretion in determining his income. Under Wyo. Stat. Ann. § 20-2-304 (LexisNexis 2017), the parents' net monthly income is used to calculate presumptive child support. See Egan v. Egan, 2010 WY 164, ¶ 9, 244 P.3d 1045, 1048 (Wyo. 2010). The court begins by determining each parent's monthly income and net income using the statutory definitions in Wyo. Stat. Ann. § 20-2-303(a)(ii) and (iii) (LexisNexis 2017):

(ii) "Income" means any form of payment or return in money or in kind to an individual, regardless of source. Income includes, but is not limited to wages, earnings, salary, commission, compensation as an independent contractor, temporary total disability, permanent partial disability and permanent total disability worker's compensation payments, unemployment compensation, disability, annuity and retirement benefits, and any other payments made by any payor, but shall not include any earnings derived from overtime work unless the court, after considering all overtime earnings derived in the preceding twenty-four (24) month period, determines the overtime earnings can reasonably be expected to continue on a consistent basis. In determining income, all reasonable unreimbursed legitimate business expenses shall be deducted. Means tested sources of income such as Pell grants, aid under the personal opportunities with employment responsibilities (POWER) program, supplemental nutrition assistance program and supplemental security income (SSI) shall not be considered as income. Gross income also means potential income of parents who are voluntarily unemployed or underemployed[.]
(iii) "Net income" means income as defined in paragraph (ii) of this subsection less personal income taxes, social security deductions, cost of dependent health care coverage for all dependent children, actual payments being made under preexisting support orders for current support of other children, other court-ordered support obligations currently being paid and mandatory pension deductions. Payments towards child support arrearage shall not be deducted to arrive at net income[.]

[¶20] Section 20-2-308 addresses the documentation required to determine the parties' incomes for child support purposes:

(a) No order establishing or modifying a child support obligation shall be entered unless financial affidavits on a form approved by the Wyoming supreme court which fully discloses the financial status of the parties have been filed, or the court has held a hearing and testimony has been received.
(b) Financial affidavits of the parties shall be supported with documentation of both current and past earnings. Suitable documentation of current earnings includes but is not limited to pay stubs, employer statements, or receipts and expenses if self-employed. Documentation of current earnings shall be supplemented with copies of the most recent tax return to provide verification of earnings over a longer period.

[¶21] Section 20-2-308 's requirements are mandatory. Verheydt v. Verheydt, 2013 WY 25, ¶ 32, 295 P.3d 1245, 1253 (Wyo. 2013). See also , Noonan v. Noonan, 2005 WY 145, ¶ 8, 122 P.3d 964, 966 (Wyo. 2005) ; JAG v. Dep't of Family Servs., 2002 WY 158, ¶¶ 17-18, 56 P.3d 1016, 1021 (Wyo. 2002). Under the statute, "no order" on child support "shall be entered" unless financial affidavits or testimony which "fully discloses the financial status of the parties" has been received by the district court. Section 20-2-308(a). Section 20-2-308(b) requires financial affidavits be supported with documentation of current and past earnings, including but not limited to pay stubs, employer statements, receipts and expenses if self-employed, and copies of tax returns.

[¶22] As we explained in detail above, Father's financial affidavit indicated he was both employed and self-employed; however, he only reported employment income from Laramie Valley Contracting in his affidavit. He gave two different numbers as his monthly employment income -- $ 12,525 and $ 9,491 which, when reduced by taxes, resulted in a net income of $ 7,030. Father testified that he reported his income from all sources on his tax returns. Despite his representation that he was an employee of Laramie Valley Contracting, Father's tax returns for 2014 and 2015 did not include any wages or salaries. All of his reported income came from rentals, partnerships, S corporations, etc. Thus, Father's tax returns and his confidential affidavit are completely inconsistent.

[¶23] Father's testimony did not clarify his income. He said he was an employee of Laramie Valley Contracting and explained it was the only one of his companies that "pays payroll." He admitted, however, that he did not have a copy of his W-2. Mother said he did not get a payroll check because he was self-employed. From the record, it is impossible to determine whether Father received a salary as an employee in addition to "pass through" income from business entities, or whether he incorrectly described his income obtained as an owner of Laramie Valley Contracting as employee income.

[¶24] The GAL twice asked the district court to delay ruling on child support and order Father to supplement his financial information with complete tax returns (including for 2016), W-2s, and verified income and expense statements for all three of his businesses. She also requested that Father be required to include information about how much depreciation he deducted to determine the business income shown on his tax returns. This was an important point because, while amortized depreciation of business property is a legitimate deduction for federal income tax purposes, it is not deductible from a party's income as a "reasonable unreimbursed legitimate business expense" to determine child support. Section 20-2-303(a)(ii) ; Houston v. Smith, 882 P.2d 240, 243-44 (Wyo. 1994). See also , Ready v. Ready, 2003 WY 121, ¶ 14, 76 P.3d 836, 840 (Wyo. 2003). Compare, Watson v. Watson, 2002 WY 180, ¶¶ 14-16, 60 P.3d 124, 128 (Wyo. 2002) (holding that federal income tax deduction under 26 U.S.C. § 179 is a legitimate business expense deduction under § 20-2-303(a)(ii) because it affects the obligor's actual cash flow during the year in question).

[¶25] The district court recognized in its order that the information before it regarding Father's income was "totally incomplete and unsatisfactory," yet it proceeded to determine child support without ordering Father to provide sufficient financial information. Given the inconsistencies in Father's financial affidavit and the failure of the trial testimony to explain the numbers, there is simply no factual basis for the district court's choice of $ 7,030 as representing his monthly wage or salary from Laramie Valley Contracting. Additionally, without more information regarding Father's business income and deductions, it was impossible for the district court to determine his net income for child support purposes.

[¶26] Section 20-2-308 requires the district court to ensure the parties provide sufficient financial information, in the form of proper financial affidavits and/or trial evidence, before it makes a child support determination. Verheydt, ¶ 32, 295 P.3d at 1253 ; Noonan, ¶ 8, 122 P.3d at 966 ; JAG, ¶¶ 17-18, 56 P.3d at 1021. In that regard, child support determinations are different from other civil matters where the burden of not providing sufficient evidence will result in the party with the burden of proof being denied relief. It is not uncommon for a district court to, after an evidentiary hearing, delay its decision on child support and order the parties to provide more information about their incomes. See, e.g. , Davidson v. Carrillo, 2014 WY 65, ¶ 5, 325 P.3d 444, 446 (Wyo. 2014) ; Brush v. Davis, 2013 WY 161, ¶ 7, 315 P.3d 648, 651 (Wyo. 2013). The district court in this case should have granted the GAL's request to do just that.

[¶27] We are cognizant of our precedent which holds that a party waives the right to object to a lack of financial information by failing to provide such information to the district court. In Verheydt, the parties stipulated to the husband's monthly child support obligation based upon an agreed imputed income, and the district court ordered the husband to pay monthly child support in accordance with their agreement. Id., ¶¶ 7, 9, 295 P.3d at 1247-48. On appeal, the husband claimed the district court had insufficient information to determine child support because he had not filed a financial affidavit and there was no evidentiary hearing on the parties' finances. Id. , ¶¶ 22, 31, 295 P.3d at 1251, 1253. We acknowledged that § 20-2-308 required the district court to obtain sufficient financial information prior to determining child support. Id., ¶ 32, 295 P.3d at 1253. However, we concluded the husband waived any objection by failing to file a financial affidavit and agreeing to resolve the issues in the case, including child support, without an evidentiary hearing. Id., ¶ 34, 295 P.3d at 1253.

[¶28] In Long v. Long, 2018 WY 26, ¶¶ 28-31, 413 P.3d 117, 126-27 (Wyo. 2018), we stated that we would not consider the husband's complaint that the district court failed to comply with § 20-2-308 when he chose to disregard his statutory obligation to provide a financial affidavit. Like in Verheydt, the parties had agreed to the amount of child support the husband would be required to pay. Long, ¶ 28, 413 P.3d at 126. The district court ordered the husband to pay less than the stipulated amount, but he complained on appeal it was still too much because he had recently been laid off his job, a fact that would have been reflected in a financial affidavit. Id., ¶¶ 29-30, 413 P.3d at 126-27. The husband asserted the district court should have required a financial affidavit, so it would have a proper understanding of his current income. Id.

[¶29] This Court rejected the husband's argument because he had failed to comply with his obligation to file the affidavit and there was information about the husband's income in the tax returns which accompanied the wife's financial affidavit. Id. Although we remanded the case for the district court to determine the presumptive support amount and whether it should deviate from that amount, we ruled the district court did not err by ordering child support without first obtaining the husband's financial affidavit. Id., ¶¶ 30-31, 413 P.3d at 126-27.

[¶30] There are important distinctions between Verheydt and Long and the case at bar. The parties in Verheydt and Long had entered into agreements about their incomes and child support obligations. Verheydt, ¶ 7, 295 P.3d at 1247 ; Long, ¶ 28, 413 P.3d at 126. Here, Father's income and the amount he owed in child support were contested. Additionally, there was no indication in Verheydt or Long that the district court considered the information before it and erred in calculating the parties' incomes. In the present case, the district court did not have sufficient information about Father's finances to calculate child support, potentially misinterpreted the evidence before it, and ignored its statutory obligation to obtain that information before entering a child support order.

[¶31] This case is similar to Bagley , which involved confusing evidence about the husband's income from his two businesses and his claimed deductions for reasonable legitimate business expenses under § 20-2-303(a)(ii). Because of the state of the evidence, the district court calculated the husband's income by using the amount he tithed to his church, assuming it was ten percent (10%) of his net income. Id., ¶ 16, 311 P.3d at 146.

[¶32] We reversed the child support determination in Bagley , reasoning:

While we understand the district court's frustration with the state of the record, it was, nonetheless, obligated to determine Husband's net income using the statutory definitions of "income" and "net income" in § 20-2-303(a)(ii) and (iii), rather than the arbitrary number associated with the amount he tithed to his church. Because the district court did not follow the statutory requirements, we reverse and remand for a proper determination of Husband's net income. Starting with Father's gross income, ... the court will deduct all "reasonable unreimbursed legitimate business expenses" in accordance with § 20-2-303(a)(ii). In determining which business expenses should be deducted from his gross income, the district court must keep in mind "[t]he burden of proving that an expense was a reasonable unreimbursed legitimate business expense lies with the party seeking the deduction." Watson v. Watson, 2002 WY 180, ¶ 16, 60 P.3d 124, 128 (Wyo.2002). After calculating his income by subtracting the legitimate business expenses, other expenses identified in the definition of "net income" in § 20-2-303(a)(iii), such as personal income taxes, social security taxes, etc., may be deducted. If Husband did not do an adequate job of explaining and documenting each allowable expense, he will not be entitled to a deduction for the purposes of determining his net income. Once the amount of his net income is determined, the district court should apply the child support guidelines to determine the presumptive amount of child support. Section 20-2-304.

Id., ¶ 18, 311 P.3d at 146-47.

[¶33] The district court in the case at bar abused its discretion by ordering child support without obtaining sufficient information about Father's income. It used conflicting evidence to arrive at his monthly income and, like in Bagley, did not determine whether Father's deductions for business expenses were appropriate under the statutory definition of income. The GAL reported that Father had at least three businesses, and Father's testimony confirmed this report. However, the record contains no documentation of Father's income from two of those businesses. Accordingly, we must remand to the district court for additional proceedings to determine Father's income. In doing so, we reiterate that Father will have the burden of proving he is entitled to deductions for reasonable unreimbursed legitimate business expenses. Bagley, ¶ 18, 311 P.3d at 146-47.

2. Due Process

[¶34] In his second issue, Father claims the district court violated his right to due process when it imposed time limits for the parties' presentations at trial. He asserts the district court's time limits deprived him of a meaningful opportunity to testify and cross-examine witnesses. "Notice and the opportunity to be heard are touchstones of due process." JKS v. AHF (In re ARF ), 2013 WY 97, ¶ 28, 307 P.3d 852, 858 (Wyo. 2013). See also , U.S. Const. Amends. 5 and 14 ; Wyo. Const. art. 1, § 6. "The opportunity for hearing must be 'appropriate to the nature of the case,' and must be 'at a meaningful time and in a meaningful manner.' " ARF, ¶ 28, 307 P.3d at 858 (quoting Jones v. Jones, 903 P.2d 545, 548 (Wyo. 1995) ) (other citation omitted).

[¶35] Father indicates in his brief that we need not address the constitutional due process issue if we reverse on the first issue. Our reversal of the district court's child support award will result in further proceedings on that matter, so the lack of sufficient time to present evidence at trial on that matter is moot. See Lieberman v. Wyoming.com LLC, 2004 WY 1, ¶ 2, 82 P.3d 274, 276 (Wyo. 2004) ; Scherer Const., LLC v. Hedquist Const., Inc., 2001 WY 23, ¶ 28, 18 P.3d 645, 656 (Wyo. 2001).

[¶36] However, Father also mentions in his brief that he had insufficient opportunity to present evidence or cross-examine Mother's witnesses regarding the custody determination. It is unclear whether he agrees it is unnecessary to address the sufficiency of time on the custody issue, so we will briefly address this issue.

[¶37] The district judge issued a scheduling order setting the trial on all issues between the parties for one day (September 5, 2017) and allotting each party one-half of the total time, less breaks. On August 4, 2017, Father filed a witness list, identifying nine witnesses he expected to call at trial and eight "may call" witnesses. He also listed several others who could be called for rebuttal or to provide foundation for exhibits. Despite the extensive witness list, Father did not request additional time for the trial. At the beginning of the trial, the district court reiterated the trial was scheduled for only one day and the time would be evenly divided between the parties, minus any time for breaks or attributable to the GAL. Father did not object to the length of the trial or the allocation of time before the trial began.

[¶38] During the trial, Father presented eight witnesses who focused almost exclusively on the issues of child custody and visitation. He testified as the final witness for his case, and his testimony also concentrated on the custody issue. When Father's testimony began, the district court informed him that only eleven minutes of his allotted time remained. Once that time expired, the district court stopped Father's direct testimony and he was cross-examined by Mother's attorney and the GAL. Father was not permitted to cross-examine Mother's witnesses after his time ran out. Still, Father did not object, request more time, or provide an offer of proof regarding the information he was unable to present.

[¶39] A district court has considerable discretion in conducting trials. In re ARF, ¶ 26, 307 P.3d at 858. It also "has a legitimate interest in planning its schedule." Id., ¶ 34, 307 P.3d at 859. In that regard, a court may limit the length of the trial and the amount of time the litigants have to present their cases, so long as it complies with the dictates of due process. Id. , ¶ 34, 307 P.3d at 859-60 (citing Jackson Hole Traders, Inc. v. Joseph, 931 P.2d 244, 248 (Wyo. 1997) ).

[¶40] When the asserted error was preserved in the district court, we review the district court's scheduling decisions for abuse of discretion. ARF, ¶ 26, 307 P.3d at 858. However, Father did not object to the time limitations, request more time, or make an offer of proof describing the evidence he would have presented if he had more time. Under these circumstances, our precedent establishes that he waived any argument that the district court abused its discretion. See, e.g. , JN v. RFSG (In re Paternity of HLG), 2016 WY 35, ¶ 29, 368 P.3d 902, 909 (Wyo. 2016).

[¶41] Father attempts to get around the waiver rule by arguing that the district court's failure to provide adequate trial time impacted his fundamental rights to due process and to associate with family. Certainly, determinations of child custody implicate the fundamental right to family association. Arnott v. Arnott, 2012 WY 167, ¶ 30, 293 P.3d 440, 454 (Wyo. 2012). See also , GS v. State (In the Interest of VS ), 2018 WY 119, ¶ 25, 429 P.3d 14, 21-22 (Wyo. 2018) (considering claim that procedure at juvenile permanency hearing violated the parent's right to due process even though it was not raised below).

[¶42] However, to avoid the waiver rule, the appellant must demonstrate that the district court's actions, if inappropriate, impacted his fundamental rights. We will start with the obvious-Father does not contest the district court's custody determination. It is hard to see how the court's allocation of time impacted his fundamental right to associate with his children when he does not even argue that the custody ruling was erroneous.

[¶43] Furthermore, the totality of Father's appellate argument regarding his opportunity to provide evidence on the custody issue presents conclusory statements with language related to due process concepts, but without any examples of evidence he was prevented from presenting or how it would have impacted the custody determination. Without specifics, Father's conclusory statements are nebulous and uncertain. Father's vague assertions are not sufficient to explain how the district court's restriction on the time he had to present his case violated due process or his fundamental right to associate with his children. Hodson v. Sturgeon, 2017 WY 150, ¶ 6, 406 P.3d 1264, 1265 (Wyo. 2017) (refusing to consider appellate arguments not supported by cogent argument).

[¶44] As mentioned above, Father also did not provide an offer of proof at trial regarding the evidence he was not allowed to present. His failures both on appeal and at trial to describe the evidence he would have presented or its impact on the district court's custody decision provide no "justification that would warrant our departure from [the waiver] rule." Brown v. Brown, 2016 WY 120, ¶ 16 n.3, 385 P.3d 321, 325 n.3 (Wyo. 2016) (noting that Mr. Brown did not make an offer of proof in the district court and "failed to identify any witnesses he would have called to testify at trial or exhibits that he would have introduced" had the district court not prevented him from doing so).

3. W.R.A.P. 10.05(b)

[¶45] Mother requests we award her attorney fees and damages pursuant to W.R.A.P. 10.05(b). Under the rule, if this Court certifies "there was no reasonable cause for the appeal," the appellee is entitled to "a reasonable amount for attorneys' fees and damages." Id. Given we are reversing and remanding, there was reasonable cause for Father's appeal, so we deny Mother's request.

[¶46] Reversed and remanded for proceedings consistent with this opinion.

      A W-2 form is a wage and tax statement employers provide to employees and the federal government showing the employee's annual wages and the amounts withheld for federal income tax, Social Security, etc. https://www.irs.gov/forms-pubs/about-form-w-2.

      The quality of the copy of the 2014 tax return provided by Father is very poor. The numbers are difficult and, in some places, impossible to read.

      According to the IRS website, S corporations, partnerships, etc. use Schedule K-1 to report a shareholder's or partner's share of income from the entity. https://www.irs.gov/site-index-search?search=Schedule+K-1 & field_pup_historical_1=1 & field_pup_historical=1. See also , Teeples v. Teeples, 2012 WY 127, ¶ 5 n.1, 286 P.3d 134, 135 n.1 (Wyo. 2012) ("The function of a Schedule K-1 is to reflect a shareholder's share of the corporation's income.").

      If Laramie Valley Contracting is a corporation with pass through status, it would be an S corporation for federal income tax purposes. "Shareholders in S corporations are taxed based on their pro rata share of the corporation's income."Teeples, ¶ 11, 286 P.3d at 136. See also , 26 U.S.C. § 1366(a)(1). Partnerships and limited liability companies are also pass through entities. 26 U.S.C. §§ 701 -702 (partnerships); Wyo. Stat. Ann. § 17-29-304(d)(i) (LexisNexis 2017) (limited liability companies). See also , Lieberman v. Wyoming.com LLC, 11 P.3d 353, 357 (Wyo. 2000).

      We do not read the 2014 tax returns as reflecting these exact numbers. However, the returns are nearly illegible and the numbers are very close, so we will not further address these discrepancies. See Egan v. Egan, 2010 WY 164, ¶ 25, 244 P.3d 1045, 1052 (Wyo. 2010) (choosing to ignore a small discrepancy in the child support calculation).

      If a party fails to comply with the statute, there are options available to the district court, including: (1) the court may find adequate information to calculate income from evidence provided by the other parties; (2) the court may order the filing of a complete financial affidavit and enforce that order by contempt; and/or (3) the court may award attorney fees to the GAL and opposing side for the costs of obtaining complete financial information. See, e.g. , Long v. Long, 2018 WY 26, ¶ 30, 413 P.3d 117, 126-27 (Wyo. 2018) (other evidence established the husband's income); Walker v. Walker, 2013 WY 132, ¶ 39, 311 P.3d 170, 178 (Wyo. 2013) (courts have authority to enforce their orders through contempt sanctions); W.R.C.P. 37 (sanctions for failure to comply with discovery obligations).

      Father claims the district court erred by including "pass through" income from his various business interests in determining his gross income. If he makes this argument on remand, we assume the district court will apply the statutory definition of income and our precedent to decide the issue.

      Not every claimed error in a child custody proceeding can be raised on appeal in the absence of an objection just because child custody involves a fundamental right. See, e.g ., KES v. CAT, 2005 WY 29, ¶ 20 n.1, 107 P.3d 779, 785 n.1 (Wyo. 2005) (failure to object to trial court's interview of children in a custody proceeding waived right to contest custody determination on that basis); JR v. TLW, 2016 WY 45, ¶¶ 14-15, 371 P.3d 570, 576 (Wyo. 2016) (failure to offer evidence of child's preference with regard to custody resulted in waiver of the argument on appeal).

      When the appellant demonstrates that the trial court's actions may have impacted his fundamental rights, but he did not object below, we often address the matter using the plain error standard of review under W.R.A.P. 9.05. See, e.g. , GS, ¶ 26, 429 P.3d at 22 ; SAS v. Dep't of Family Servs. (In re AGS ), 2014 WY 143, ¶¶ 33-34, 337 P.3d 470, 480 (Wyo. 2014). We will not apply our typical three-part plain error test in this case because Father's argument is so imprecise. However, we note that same lack of specificity would prevent Father from establishing a violation of a clear and unequivocal rule of law and the material prejudice necessary to obtain relief under the plain error standard. GS, ¶ 26, 429 P.3d at 22.


source: Caselaw Access Project

license: Public Domain

text:
    Alexander Reed MANTLE and Marjorie M. Mantle, Appellants (Plaintiffs), v. NORTH STAR ENERGY & CONSTRUCTION LLC ; Gary W. Garland; Raymond W. Garland; Matt R. Garland; Three Way, Inc.; Hot Iron, Inc.; MGM Enterprises, Inc.; GT Investments, Inc.; and Wyodak Energy Services, LLC, Appellees (Defendants).
    S-18-0210
    Supreme Court of Wyoming.
    May 21, 2019
   Representing Alexander Reed Mantle and Marjorie M. Mantle: Stephen R. Winship, Winship & Winship, PC, Casper, Wyoming. Argument by Mr. Winship.

Representing North Star Energy & Construction LLC: Lance C. Overstreet, John M. Kuker, and Jeffrey M. Boldt, Overstreet Homar & Kuker, Cheyenne, Wyoming.

Representing Gary W. Garland, Hot Iron, Inc., and GT Investments, Inc.: Kim D. Cannon & Codie D. Henderson, Davis & Cannon, LLP, Sheridan, Wyoming. Argument by Mr. Henderson.

Representing Raymond W. Garland, Matt R. Garland, Three Way, Inc., and MGM Enterprises, Inc.: Judith A. W. Studer, Schwartz, Bon, Walker & Studer, LLC, Casper, Wyoming. Argument by Ms. Studer.

Representing WyoDak Energy Services, LLC: No Appearance.

Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.

FOX, Justice.

[¶1] This is the sequel in the ongoing litigation arising from a business deal that went south. We addressed the appeal of the district court's decision after a bench trial in Mantle v. North Star Energy & Construction, LLC , 2019 WY 29, 437 P.3d 758 (Wyo. 2019) (Mantle I ). Alex Mantle and Marjorie Mantle now appeal various post-trial issues. For the reasons discussed below, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

ISSUES

[¶2] The Mantles raise twelve issues, which we condense and rephrase as follows:

1. Did the district court have subject matter jurisdiction to offset the judgments when that issue was pending in this Court in Mantle I ?
2. With respect to the Killmer Settlement Funds:
a. Is there a reviewable order in the record regarding whether the Garlands had standing to assert a direct claim against Mr. Killmer?
b. Did the Mantles have a superior security interest in the Killmer Settlement Funds by operation of the "general intangibles" clause of the FNB security agreement?
3. Did the district court err when it awarded North Star's attorneys, The Kuker Group, their attorney fees from a portion of the Killmer Settlement Funds?
4. Did the district court err when it issued a nunc pro tunc order that removed Marjorie Mantle's name from the order that disbursed the Killmer Settlement Funds?

FACTS

[¶3] We briefly summarize the facts to provide context for the issues in this appeal. A more complete discussion can be found in Mantle I , 2019 WY 29, 437 P.3d 758. The Garland brothers, Gary, Ray, and Matt, each had their own companies involved in the oil and gas business. Id. at ¶ 1, 437 P.3d at 768. In November 2011, the brothers, with their companies, formed North Star Energy & Construction, LLC. Id. at ¶¶ 5-6, 437 P.3d at 769. Alex Mantle was appointed President. Id. at ¶ 6, 437 P.3d at 769. Karl Killmer was North Star's accountant. Id. In mid-2014, Mr. Mantle and Mr. Killmer proposed to buy North Star from the Garlands. Id. at ¶ 12, 437 P.3d at 770. The parties executed a Memorandum of Understanding (MOU) that memorialized their agreement, including Mr. Killmer's and the Mantles' personal guarantees of $6.1 million of the purchase price. Id. at ¶¶ 2, 16-17, 437 P.3d at 768, 771-72. Mr. Mantle and Mr. Killmer negotiated a $3-million loan from First Northern Bank (FNB) to fund the down payment. Id. at ¶ 13, 437 P.3d at 770. Ultimately, the transaction took the form of a leveraged buyout when the FNB loan was made to North Star. Id. at ¶¶ 14, 17, 437 P.3d at 770-72.

[¶4] North Star's fortunes continued to decline, due to questionable business decisions and the dropping oil market. See id. at ¶¶ 26-32, 437 P.3d at 773-75. By December 2014, the Garlands stepped back in to try and save North Star. Id. at ¶ 33, 437 P.3d at 775. They were unsuccessful, and by August 2015 the Garlands began liquidation. Id. at ¶ 38, 437 P.3d at 776. In June 2015, the Mantles bought the $3-million FNB loan, which effectively made them a creditor of North Star. Id. at ¶ 40, 437 P.3d at 776-77.

[¶5] In May 2015, Mr. Mantle and his wife, Marjorie, sued the Garlands, the Garlands' businesses, and North Star. Id. at ¶ 42, 437 P.3d at 777. Among other claims, the Mantles sought to collect on the $3-million FNB note. Id. The Garlands countered with their claim that Mr. Mantle and Mr. Killmer breached the $6.1-million guarantee in the MOU. Id.

[¶6] The Garlands and North Star also sued Mr. Killmer for accountant malpractice. Id. Mr. Killmer defaulted, id. at ¶ 44, 437 P.3d at 777, and then assigned to the Garlands and North Star any claim he had against his malpractice insurance carrier for failing to provide coverage or a defense. The district court then dismissed Mr. Killmer from the case with prejudice. Id. The Garlands and North Star eventually settled with Mr. Killmer's malpractice carrier. As part of the settlement, North Star received $121,271, which, by order of the district court, was deposited into the court registry on February 22, 2017. The Garland brothers, and their respective companies, split the rest.

[¶7] After a bench trial, the district court awarded the Mantles a $2,712,838.22 judgment against North Star based on the Mantles' assumption of the FNB loan. Id. at ¶ 47, 437 P.3d at 778. It also awarded the Mantles $250,000 against Gary and $307,000 against Ray based on some transfers of North Star property that Gary and Ray made after they resumed control of North Star in December 2014. Id. The court awarded the Garlands and their companies $6,110,000 against Mr. Mantle based on the MOU that he personally guaranteed. Id. at ¶ 48, 437 P.3d at 778. The court denied Gary's and Ray's first motions to offset the judgments. Id. at ¶ 49, 437 P.3d at 778.

[¶8] The parties appealed various aspects of the district court's rulings, and we affirmed in all respects. Id. at ¶¶ 4, 160, 437 P.3d at 768-69, 808. Gary and Ray initially appealed the district court's denial of their motion to offset the judgments. While Mantle I was pending in this Court, the Mantles attempted to collect on their judgments against Gary ($250,000) and Ray ($307,000). To avoid this, Gary and Ray again moved the district court to grant their offset motion. This time, the district court granted the motion and offset the judgments. Gary and Ray notified this Court that they were dismissing their appeals of the offset issues in Mantle I . We specifically declined to address the offset issue in Mantle I . See id. at ¶ 108 n.20, 437 P.3d at 794 n.20.

[¶9] Additional facts and proceedings will be discussed below as necessary.

DISCUSSION

I. The district court did not have subject matter jurisdiction to offset the judgments when that issue was pending in this Court in Mantle I

[¶10] The Mantles contend that the district court did not have jurisdiction to grant the Garlands' second offset motion because, at that time, the issue was pending in this Court in Mantle I . We agree.

[¶11] "The existence of subject matter jurisdiction is a question of law that we review de novo." Matter of Birkholz , 2019 WY 19, ¶ 7, 434 P.3d 1102, 1104 (Wyo. 2019) (citations and quotations omitted). W.R.A.P. 6.01(b) states:

The appellate court shall acquire jurisdiction over the matters appealed when the case is docketed. In all cases, the trial court retains jurisdiction over all matters and proceedings not the subject of the appeal , including all matters covered by Rules 4 and 5, unless otherwise ordered by the appellate court.

(Emphasis added.)

[¶12] In its order after the trial, the district court noted that it considered offsetting the judgments and decided against doing so because the judgment the Garlands held was only against Mr. Mantle, while the judgments the Mantles held against Ray and Gary were awarded to Marjorie and Alex Mantle. Ray and Gary filed a "Motion to Alter or Amend Judgment Under Rule 59 WY.R.CIV.P." in which they asked the district court to reconsider its decision on offsetting the judgments. The court denied the motion.

[¶13] Approximately three months later, Gary and Ray renewed their offset argument to the district court. Both had appealed the denial of their first offset motion in Mantle I and, a month after they filed their opening briefs, the district court granted their second offset motion. Gary and Ray then withdrew the offset issue from their appeal.

[¶14] When the district court granted the Garlands' second offset motion, it noted that "every court having jurisdiction to render a particular judgment has inherent power and authority to enforce it and to exercise equitable control over such enforcement." (quoting Hurd v. Nelson , 714 P.2d 767, 771 (Wyo. 1986) ). We agree that a district court has the "inherent power to allow or compel an equitable set-off." Cargill, Inc. v. Mountain Cement Co. , 891 P.2d 57, 67 (Wyo. 1995). "A court of equity retains and possesses the power to control the manner of the execution of its decree, and has the inherent right to modify, by a subsequent order, the manner in which it shall be enforced." Hurd , 714 P.2d at 771 (citing 46 Am. Jur. 2d Judgments § 898, at 1032 (1969)). This inherent authority, however, cannot extend to issues over which this Court has acquired jurisdiction. That includes the offset issue that had been appealed in Mantle I .

[¶15] Generally, before a trial court can grant relief regarding an issue that has been appealed to this Court, the parties must first seek a remand.

In Doctors' Company v. Insurance Corporation of America , 837 P.2d 685, 686 (1992), we established the following procedure:
[D]uring the pendency of an appeal the district court may consider a Rule 60(b) motion and if it indicates that it is inclined to grant it, application then can be made to the appellate court for a remand. ... The logical consequence is that the district court may deny the motion although it cannot, until there has been a remand, grant it .... This allows a new appeal from the denial of the motion and often the appellate court can consider that appeal together with the appeal from the original judgment.

Schmalz v. Schmalz , 2018 WY 90, ¶ 11, 423 P.3d 325, 328 (Wyo. 2018) (some citations omitted). This procedure is now included in W.R.C.P. 62.1 :

(a) Relief Pending Appeal . - If a timely motion is made for relief that the court lacks authority to grant because of an appeal that has been docketed and is pending, the court may:
(1) defer considering the motion;
(2) deny the motion; or
(3) state either that it would grant the motion if the appellate court remands for that purpose or that the motion raises a substantial issue.
(b) Notice to the appellate court . - The movant must promptly notify the Clerk of the appellate court if the trial court states that it would grant the motion or that the motion raises a substantial issue.
(c) Remand . - The trial court may decide the motion if the appellate court remands for that purpose.

W.R.A.P. 6.01(b) and W.R.C.P. 62.1 are intended to ensure that a litigant is not simultaneously fighting the same battle in the trial court and the appellate court.

[¶16] Gary argues that, even though the offset issue was pending in this Court in Mantle I , "this Court has recognized numerous circumstances where the District Court retains jurisdiction to modify a previously entered order while an appeal is pending." (citing Garwood v. Garwood , 2010 WY 91, ¶ 26, 233 P.3d 977, 984 (Wyo. 2010) ( Garwood II ); Capellen v. State , 2007 WY 107, ¶ 22, 161 P.3d 1076, 1081-82 (Wyo. 2007) ; Jacobs v. Jacobs , 895 P.2d 441, 444-45 (Wyo. 1995) ). None of these cases, however, is on point.

[¶17] In Garwood II , we concluded that W.R.A.P. 6.01 did not deprive the district court of jurisdiction to consider a post-judgment fees motion while the initial appeal was pending because "[c]onsistent with Rule 6.01, we have held that during the pendency of an appeal, the district court has the right and power to enforce its decrees and orders and to protect the parties as to any rights they acquired in the district court proceedings." 2010 WY 91, ¶ 26, 233 P.3d at 984. Yet, we based that conclusion on our recognition that, because "those issues were not the subject of the [initial] appeal , the district court did not lose jurisdiction to address them." Id. at ¶ 27, 233 P.3d at 984 (emphasis added). Similarly, in Capellen and Jacobs we recognized that, while an appeal is pending, a district court retains jurisdiction to address issues that are "collateral to the issues presented in the appeal." See Capellen , 2007 WY 107, ¶ 25, 161 P.3d at 1083 (discussing Jacobs v. Jacobs ). This is consistent with W.R.A.P. 6.01(b) 's requirement that a district court "retains jurisdiction over all matters and proceedings not the subject of the appeal [.]" Capellen , 2007 WY 107, ¶ 23, 161 P.3d at 1082 (emphasis in original).

[¶18] In contrast, the district court's decision here did not merely address a matter collateral to the issues on appeal. It granted the second offset motion at the time that its original denial of the Garlands' offset motion was on appeal in Mantle I . Because the district court lost jurisdiction over the offset issue while Mantle I was pending on appeal, we reverse that aspect of its "Order on Pending Motions" and remand this issue for further proceedings. See Rock v. Lankford , 2013 WY 61, ¶ 18, 301 P.3d 1075, 1080 (Wyo. 2013) ("If a judgment below was rendered without jurisdiction, an appellate court must ordinarily reverse and remand for dismissal.") (citations and quotations omitted).

II. The Killmer Settlement Funds

[¶19] After the bench trial, the Mantles made various attempts to obtain most, if not all, of the Killmer Settlement Funds. On appeal, they contend only North Star, not the Garlands, had standing to assert a claim against Mr. Killmer for accountant malpractice, and that they had a security interest in the funds via the "general intangibles" language of the FNB note they acquired.

A. There is no reviewable order in the record regarding whether the Garlands had standing to assert a direct claim against Mr. Killmer

[¶20] The Mantles argue that all the Killmer Settlement Funds should be paid to North Star's creditors because the Garlands and their companies did not have standing to assert direct claims against Mr. Killmer; instead, their claims against Mr. Killmer were derivative claims on behalf of North Star since the Garlands' companies were North Star's only members. However, because the district court did not decide the issue, there is no final appealable order for us to review.

[¶21] On November 20, 2017, after the district court issued its "Order After Bench Trial," the Mantles filed a motion requesting the court credit them with, at least, a portion of the Killmer Settlement Funds. The district court denied the motion in its "Order on Post-Trial Motions and Filings and Final Judgment as to 'Order After Bench Trial.' " On March 15, 2018, the Mantles filed another motion in which they maintained that the Garlands, and their companies, only had a derivative claim on behalf of North Star against Mr. Killmer. On April 19, 2018, the district court concluded:

The Court does not have enough facts currently before it to decide this motion. Further litigation may be needed to resolve this dispute. In addition, some issues relating to these funds are currently on appeal, and the Court may not have jurisdiction to decide this issue. On appeal, Plaintiffs are arguing that Mr. Mantle should have received a credit for [the] full amount of the settlement. However, if the Defendants have to return those funds, then he would clearly not be entitled to a credit for amounts the Defendants were not allowed to keep. Thus, it does not make sense to decide this issue while the appeal is pending. The Court finds that the motion should be denied without prejudice.

[¶22] On April 26, 2018, the Mantles filed another motion asking the court what additional facts or litigation it needed to decide the issue. The Mantles also notified the court that none of the parties in Mantle I had raised any question on appeal regarding the allocation of the Killmer Settlement Funds. On July 24, 2018, the district court, in its "Order on Pending Motions," "decline[d] to make any additional findings," and thus, denied the Mantles' motion. At the end of its order, the court concluded:

[T]his is intended to be a final order, resolving all issues in the case. In the event that there are any issues remaining to be addressed, the Court finds pursuant to [Wyoming] Rule [of Civil Procedure] 54(b) that this order constitutes a final judgment as to claims and counterclaims between the parties decided herein, and that there is no just reason to delay the appeal of those issues.

[¶23] The Mantles identified all these post-trial orders in this appeal; however, there was never a final order by the district court as to this issue. We do not determine whether the perceived need for additional facts is an appropriate basis to deny the motion. The result was that the district court did not rule on this issue.

[¶24] The court's reliance on Rule 54(b) in the July order did not alleviate this problem. W.R.C.P. 54(b) states:

(b) Judgment on Multiple Claims or Involving Multiple Parties . - When an action presents more than one claim for relief - whether as a claim, counterclaim, crossclaim, or third-party claim - or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.

Although none of the parties has challenged the district court's use of Rule 54(b), "we may raise the issue on our own." Baker v. Speaks , 2014 WY 117, ¶ 12, 334 P.3d 1215, 1220 (Wyo. 2014). "In effect, Rule 54(b) allows a court to certify a matter for appeal only when it finally disposes of a claim [in a multi claim case] or party [in a multi-party case] ." Williams v. State , 716 P.2d 806, 807 (Utah 1986) (first emphasis in original; second emphasis added). Even if the district court's reliance on Rule 54(b) was otherwise correct, (i.e., it disposed of a "claim or party" as it related to the Garlands' standing to assert a direct claim against Mr. Killmer), that disposition must still "fully adjudicate[ ]" that claim or that party's rights. Baker , 2014 WY 117, ¶ 15, 334 P.3d at 1221. The district court's April order did not "fully adjudicate" the issue; rather, it explicitly left the matter open for further consideration. Generally, when a matter is not properly brought before us on a Rule 54(b) certification, we dismiss the appeal. See Griffin v. Bethesda Foundation , 609 P.2d 459, 461 (Wyo. 1980). However, since we are remanding this case for further consideration of the offset issue, we will also remand this issue to the district court.

B. The Mantles did not have a superior security interest in the settlement funds by operation of the "general intangibles" clause of the FNB security agreement

[¶25] When North Star obtained the FNB loan, it granted FNB a security interest in North Star's "general intangibles." The agreement defined "general intangibles" to include "payment intangibles" and cited to the Uniform Commercial Code (UCC) as further guidance. It explicitly excluded "commercial tort claims."

[¶26] After the trial, the Mantles argued that North Star's "general intangibles" included all the Killmer Settlement proceeds. The Mantles did not dispute that the malpractice claim against Mr. Killmer was a "commercial tort claim" that was excluded from the "general intangibles" clause. Instead, they contended that, once that "commercial tort claim" was reduced to the settlement funds, those proceeds became a "general intangible" under the security agreement. The district court disagreed. It concluded that "the settlement of a commercial tort claim[ ] does not convert the proceeds into collateral covered by a security agreement." (citing Bayer CropScience, LLC v. Stearns Bank, N.A. , 837 F.3d 911, 916 (8th Cir. 2016).)

[¶27] Under the UCC, a creditor may obtain a security interest in a commercial tort claim, but only if the agreement specifically identifies the tort claim that is purportedly covered. See Wyo. Stat. Ann. § 34.1-9-108(e)(i) (LexisNexis 2017). In Bayer , the Eighth Circuit held:

[W]e hold that the drafters of the UCC, in implementing the heightened identification requirements of commercial tort claims including the requirement that the commercial tort claim to be in existence at the time it is encumbered, intended for the proceeds of a commercial tort claim to be excluded from an after-acquired general intangible clause . See 4 James J. White, Robert S. Summers, & Robert A. Hillman, Uniform Commercial Code § 31:5 (6th ed. 2015) (questioning "if we recognize a proceeds claim arising from a security agreement that was signed before the tort claim came into existence to be effective as to funds later paid to settle the tort, have we not voided the rule in 9-108(e)(1)?").

837 F.3d at 916 (emphasis added). The district court relied on Bayer to conclude that, because of the "heightened identification requirements for commercial tort claims," the legislature "intended to exclude the proceeds of a commercial tort claim from a general intangibles clause in a security agreement."

[¶28] We agree. A "general intangibles" clause is insufficient to create a security interest in the proceeds of a commercial tort claim, absent specific identification of the claim. We affirm the district court's conclusion that the FNB security agreement did not cover the Killmer Settlement proceeds.

III. The district court did not err when it awarded North Star's attorneys a portion of the Killmer Settlement Funds

[¶29] North Star hired The Kuker Group to assist with its dissolution and "associated litigation," which included the claim for accountant malpractice against Mr. Killmer. After the Garlands and North Star settled with Mr. Killmer's malpractice carrier, and before North Star's $121,271 share was placed in the court registry, it was held by Gary Garland's attorneys in their firm trust account. The Kuker Group sent a certified letter to Gary's attorneys that purported to place an "attorney's lien" on the money, which, at that time, totaled $21,414.38. After the money was placed in the court registry, North Star's attorneys filed multiple motions in the district court to disburse part of the money to them for unpaid attorneys' fees.

[¶30] On April 18, 2018, in its "Order Regarding Funds on Deposit with the Clerk," the district court adopted a "first come, first serve" method to the funds held by the clerk. The court concluded that, since no statute permitted the court to supervise the dissolution of an LLC like North Star, it "must follow the statutes that govern garnishments and writs of execution." Those statutes "generally provide for a distribution on a first come, first serve basis." After the court permitted the clerk of court to collect its expenses incurred in holding the money in the court's registry, and Johnson County's claim for unpaid taxes under Wyo. Stat. Ann. § 39-13-108(d)(i) (LexisNexis 2017), The Kuker Group was next in line based on when it sent the certified letter to Gary's attorneys asserting its claim for $21,414.38. The court ordered that amount paid to The Kuker Group from the Killmer Settlement Funds.

[¶31] On appeal, both the Mantles and The Kuker Group devote much of their argument to whether The Kuker Group had an enforceable attorney lien. However, the district court's order, while referencing The Kuker Group's request for its attorney fees, does not appear to rest on whether The Kuker Group had an enforceable attorney lien under the attorney lien statute. Instead, the court appeared to adopt an equitable approach that attempted to satisfy the various requests for payment based on when those demands were made to either Gary's attorney or the district court clerk. The district court appeared to rely on the garnishment statutes which provide for a first come, first serve basis when multiple writs of garnishment are made against the same pool of money. See Wyo. Stat. Ann. § 1-15-504(a) (LexisNexis 2017).

[¶32] As the Mantles admit, the LLC statutes do not contain a procedure for a district court to supervise the dissolution of an LLC. The district court looked to its equitable powers to oversee the distribution of the money the clerk held. We have recognized that, in the appropriate case, a district court may exercise its equitable powers to provide relief where a statute is otherwise silent. See Wyo. Const., art. V, § 10 ; see also Gordon v. State by & through Capitol Bldg. Rehab. , 2018 WY 32, ¶ 40, 413 P.3d 1093, 1105 (Wyo. 2018) (" Article 5, § 10, [ ] grants the district courts plenary power in all cases of law and equity[.]"); Midwest Ref. Co. v. George , 44 Wyo. 25, 7 P.2d 213, 215 (1932) ("Courts of equity, and our district courts have equitable powers, may, in certain cases, give relief without reference to the statute."). "Requests for equitable relief are matters over which the district court exercises broad discretion." Lawrence v. City of Rawlins , 2010 WY 7, ¶ 14 n.4, 224 P.3d 862, 868 n.4 (Wyo. 2010). We conclude that the district court's adoption of a first come, first serve method for the disbursement of North Star's share of the settlement funds was not inequitable under the circumstances, and thus, do not find that it abused its discretion.

IV. The district court did not err when it issued a nunc pro tunc order that removed Marjorie Mantle's name from the order that disbursed the Killmer Settlement Funds

[¶33] When the district court disbursed the Killmer Settlement Funds, it ordered that $25,923.34 be provided to "Alex and Marjorie Mantle." That amount was the result of a judgment, plus interest, that Alex Mantle had obtained against North Star in a separate case in circuit court. Afterwards, the Garlands filed a request that the district court enter a nunc pro tunc order that removed Marjorie Mantle's name because the judgment that was the basis for the $25,923.34 was awarded only to Alex Mantle. The district court agreed and concluded that the inclusion of Marjorie Mantle's name was a "clerical error." On appeal, the Mantles contend that the nunc pro tunc order was erroneous because it substantively changed the court's prior order.

[¶34] "A nunc pro tunc order is used to correct an inaccuracy in an earlier order." Heinemann v. State , 2018 WY 31, ¶ 10, 413 P.3d 644, 647 (Wyo. 2018) (citations omitted). A review of the circuit court judgment confirms the district court's decision to remove Marjorie Mantle's name because she is not a party to that judgment. Indeed, on appeal, the Mantles do not make any argument that Marjorie Mantle was entitled to the $25,923.34 that the district court disbursed out of the Killmer Settlement Funds. The district court's nunc pro tunc order to correct this mistake was not erroneous.

CONCLUSION

[¶35] The "general intangibles" language of the FNB security agreement did not attach to the Killmer Settlement Funds, The Kuker Group was entitled to a portion of those funds, and the district court's nunc pro tunc order that removed Marjorie Mantle's name was a proper use of the nunc pro tunc order. However, the district court lacked subject matter jurisdiction to reconsider the offset issue, and there is no reviewable decision in the record regarding whether the Garlands and their entities had standing to assert a direct claim against Mr. Killmer for accountant malpractice. We therefore affirm in part, reverse in part, and remand for further proceedings.

      The Kuker Group is now known as Overstreet Homar & Kuker.

      For ease of reference, we will refer to Mr. Killmer and his company, Killmer & Associates, as "Mr. Killmer."

      For his part, Ray does not directly address the jurisdictional defect in the district court's decision to grant the second offset motion. Rather, he relies on the general rule that a court retains the equitable power to offset judgments.

      Before Garwood II , we decided Garwood I that dealt with substantive aspects of the district court's judgment. Garwood v. Garwood , 2008 WY 129, 194 P.3d 319 (Wyo. 2008) (Garwood I ). In Garwood II , one of the issues was whether the district court had jurisdiction to decide a post-judgment fees motion.

      Because we are remanding the offset issue to the district court, we do not reach the Mantles' arguments regarding the merits of the offset.

      The district court's failure to "fully adjudicate" the Mantles' argument that the Garlands did not have standing does not affect our ability to review the other aspects of the court's April and July orders that are the subject of this appeal. See In re Big Horn River System , 803 P.2d 61, 67 (Wyo. 1990) ("[Rule 54(b) ] permits an appeal to be taken from a decision that does not adjudicate all claims or the rights of all parties when that portion of the adjudication logically can be separated from the remainder of the case."); see also Zaloudek v. Zaloudek , 2010 WY 169, ¶ 14, 245 P.3d 336, 341 (Wyo. 2010) (reviewing other aspects of a district court's post-judgment order even though part of that order was not a final appealable order).

      In Bayer , the Eighth Circuit was discussing Texas's UCC provisions; specifically, § 9.108(e)(1). Bayer , 837 F.3d at 916. Wyoming's provision is identical. Wyo. Stat. Ann. § 34.1-9-108(e)(i).

      In their brief, the Mantles cite to comment 15 to Wyo. Stat. Ann. § 34.1-9-109 of the UCC to support their argument. Comment 15 states, in part: "Note that once a claim arising in tort has been settled and reduced to a contractual obligation to pay, the right to payment becomes a payment intangible and ceases to be a claim arising in tort." Thus, the Mantles contend that the general exclusion of commercial tort claims, absent specific identification, from a general intangibles clause ceases to apply when that commercial tort claim has been reduced to a monetary amount and becomes a "payment intangible." The Bayer court cited comment 15 in its opinion and concluded that the exclusion within § 9.108(e)(1) (our § 34.1-9-108(e)(i) ) still applied given the heightened identification requirements for commercial tort claims, and, by extension, any proceeds therefrom. Bayer , 837 F.3d at 915-16. As discussed above, we agree with that analysis and conclusion.


author: FOX, Justice.

text:
    Chester Loyde BIRD, Appellant (Plaintiff), v. Robert O. LAMPERT, in his official capacity as Director of the Wyoming Department of Corrections, Appellee (Defendant).
    S-18-0294
    Supreme Court of Wyoming.
    May 23, 2019
    Representing Appellant: Chester Loyde Bird, pro se.
    Representing Appellee: Peter K. Michael, Attorney General; Michael J. McGrady, Deputy Attorney General.
    Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.
   FOX, Justice.

[¶1] Chester L. Bird is serving a sentence of life according to law for crimes he committed in the 1990s. Mr. Bird filed a pro se complaint under the Declaratory Judgment Act, alleging that the Wyoming Department of Corrections (WDOC) violated various policies and procedures during disciplinary proceedings brought against him. The district court dismissed Mr. Bird's complaint, and we affirm.

ISSUES

[¶2] Mr. Bird raises two issues that we reorder and rephrase:

1. Was it proper for the district court to base its dismissal of Mr. Bird's complaint on standing, when the WDOC only raised standing in its reply brief?
2. Do collateral estoppel and res judicata bar Mr. Bird's claims that procedural violations occurred during his disciplinary proceedings?

FACTS

[¶3] Mr. Bird has been in the custody of the WDOC since 1994. In September 2016, he was convicted of three major conduct violations resulting from his participation in a pornographic video distribution scheme. He was sentenced to 60 days in disciplinary segregation, among other punishments. Mr. Bird filed a petition for a writ of habeas corpus in the United States District Court for the District of Wyoming, naming WDOC warden Michael Pacheco and the Wyoming Attorney General as respondents. He alleged the disciplinary proceedings used to obtain his convictions violated his right to due process of law because "he was arbitrarily denied staff witnesses, the charging officer gave false testimony, there was 'no evidence' to support the guilty finding and [ ] he received punishments other than a fine." The federal district court granted the respondents' motion for summary judgment, concluding that Mr. Bird had been "provided all the due process to which he was entitled." The Tenth Circuit denied him a certificate of appealability.

[¶4] Mr. Bird then filed a Complaint for Declaratory Judgment in state district court against the director of the WDOC, Robert Lampert. He sought a declaration that the WDOC must "adhere to its own rules and regulations which were adopted for the protection of other parties." He argued the WDOC did not follow its own procedures in conducting his disciplinary hearing because: 1) his conduct violation report did not provide sufficient description of physical evidence, did not disclose the names of all staff members involved in the investigation, and was not completed until more than 24 hours after the decision to charge him was made; 2) the hearing officer reviewed a confidential investigation report that Mr. Bird did not have the opportunity to review; and 3) he was denied the opportunity to present witnesses.

[¶5] Mr. Lampert moved to dismiss Mr. Bird's complaint, arguing that collateral estoppel and res judicata precluded the action because his habeas corpus petition had "previously raised nearly identical allegations." Mr. Bird responded that his complaint did not argue that violations of WDOC policies violated his right to due process, rather it sought a judgment that "the WDOC must adhere to its own policies and procedures which were adopted for the protection of other parties, nothing more, nothing less." In reply Mr. Lampert argued, in addition to the action being precluded, that Mr. Bird lacked standing to seek relief under the declaratory judgment act. The district court granted Mr. Lampert's motion to dismiss. Mr. Bird timely appealed.

DISCUSSION

[¶6] Mr. Bird argues the district court erred in granting the motion to dismiss because the issues raised in his complaint are not identical to those in his habeas corpus petition and could not have been raised in the prior federal litigation. Further, he asserts that the district court erred in considering the standing argument raised in Mr. Lampert's reply because Mr. Lampert waived this defense by failing to assert it in his motion to dismiss. The State responds that collateral estoppel bars all issues Mr. Bird raised in his habeas corpus petition, that res judicata precludes him from raising new issues, and that it was proper to consider the standing argument raised in Mr. Lampert's reply because it was raised in response to Mr. Bird's changed theory of the case. First, we address the existence of standing with respect to Mr. Bird's request for a declaration that the WDOC must generally abide by its own policies and procedures. Next, we consider claims Mr. Bird previously raised in his petition for habeas corpus, and issues related to his disciplinary proceedings that were raised below, but not in the previous action.

I. The district court properly considered standing in dismissing Mr. Bird's complaint

[¶7] The existence of standing is a question of justiciability that we review de novo. In re L-MHB , 2018 WY 140, ¶ 24, 431 P.3d 560, 568 (Wyo. 2018) ; Ultra Res., Inc. v. Hartman , 2010 WY 36, ¶ 50, 226 P.3d 889, 911 (Wyo. 2010). Lack of standing may be raised at any time, including by the court sua sponte . In re L-MHB , 2018 WY 140, ¶ 24, 431 P.3d at 568 ; Ultra Res. , 2010 WY 36, ¶ 50, 226 P.3d at 911. Thus, the district court did not err by considering it, even though Mr. Lampert did not raise it in his motion to dismiss.

[¶8] We conclude Mr. Bird lacked standing to seek a declaration that the WDOC must follow its own procedures as a matter of course. In a declaratory judgment action, the plaintiff must allege a justiciable controversy, which requires: 1) an existing and genuine, as opposed to a theoretical, right or interest; 2) that the controversy "be one upon which the judgment of the court may effectively operate, as distinguished from a debate or argument evoking a purely political, administrative, philosophical or academic conclusion"; 3) that any judicial determination of the controversy be capable of having the force and effect of a final judgment; and 4) that the proceedings be genuinely adverse in nature. Allred v. Bebout , 2018 WY 8, ¶ 37, 409 P.3d 260, 270 (Wyo. 2018) (quoting Brimmer v. Thomson , 521 P.2d 574, 578 (Wyo. 1974) ). Mr. Bird's complaint sought a declaration that the WDOC must follow its own policies and procedures. He claims this request is not associated with his own disciplinary proceedings or convictions. Rather, he argues WDOC's "violation of its own rules, policies or procedures is per se arbitrary and capricious" and that "he has a right to a declaratory judgment establishing as much." Such a declaration "adjudicates nothing and binds no one." Brimmer , 521 P.2d at 579. Courts may not issue "advisory opinions addressing future speculative matters." Catamount Const. v. Timmis Enters. , 2008 WY 122, ¶ 19, 193 P.3d 1153, 1159 (Wyo. 2008) ; see also Voss v. Goodman , 2009 WY 40, ¶¶ 5-7, 203 P.3d 415, 418 (Wyo. 2009), superseded on other grounds by statute , Wyo. Stat. Ann. § 24-9-101(e), (h) (2011), as recognized in Whaley v. Flitner Ltd. P'ship , 2017 WY 59, ¶ 20, 395 P.3d 653, 660 (Wyo. 2017) (courts cannot adjudicate hypothetical issues). The district court properly relied on standing to dismiss those portions of his complaint that sought an advisory opinion.

II. Collateral estoppel and res judicata bar Mr. Bird's claims alleging that procedural violations occurred during his disciplinary proceedings

[¶9] We review a district court's grant of a motion to dismiss de novo, accepting facts stated in the complaint as true and viewing them in the light most favorable to the plaintiff. Elworthy v. First Tenn. Bank , 2017 WY 33, ¶ 20, 391 P.3d 1113, 1119 (Wyo. 2017). The application of res judicata and collateral estoppel are questions of law that we review de novo, taking judicial notice of prior proceedings between the parties. Doles v. State , 2007 WY 119, ¶ 4, 163 P.3d 819, 820 (Wyo. 2007) ; In re Big Horn River , 2004 WY 21, ¶ 19, 85 P.3d 981, 987 (Wyo. 2004) ; Texas W. Oil & Gas Corp. v. First Interstate Bank , 743 P.2d 857, 858 (Wyo. 1987) ; Weber v. Johnston Fuel Liners, Inc. , 540 P.2d 535, 538 (Wyo. 1975).

[¶10] Collateral estoppel precludes a party from raising issues that have been contested and resolved in a prior proceeding. Hansuld v. Lariat Diesel Corp. , 2010 WY 160, ¶ 18, 245 P.3d 293, 300 (Wyo. 2010). In determining whether collateral estoppel bars an issue raised in a subsequent proceeding, we consider these elements:

(1) whether the issue decided in the prior adjudication was identical with the issue presented in the present action; (2) whether the prior adjudication resulted in a judgment on the merits; (3) whether the party against whom collateral estoppel is asserted was a party or in privity with a party to the prior adjudication; and (4) whether the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior proceeding.

Slavens v. Bd. of Cty. Comm'rs , 854 P.2d 683, 686 (Wyo. 1993) (emphasis in original). Here, as in federal district court, Mr. Bird asserted he was not permitted to call staff witnesses, that the conduct violation report did not list the names of all staff members involved in the investigation, and that he did not have the opportunity to review a confidential investigation report. The federal court fully considered each of these issues and reached a judgment on the merits. To the extent Mr. Bird's complaint raised issues identical to those raised in federal court, collateral estoppel bars them.

[¶11] Res judicata bars previously litigated "claims that have been, or, because of an intrinsic relationship to matters presented, should have been, decided in an earlier legal action." Hansuld , 2010 WY 160, ¶ 19, 245 P.3d at 300. Four elements determine whether res judicata applies: "(1) the parties are identical; (2) the subject matter is identical; (3) the issues are the same and related to the subject matter; and (4) the capacities of the persons are identical in reference to both the subject matter and the issues between them." Id. at ¶ 20, 245 P.3d at 300. Mr. Bird and the WDOC, via its agents Michael Pacheco and Robert Lampert, were parties to both actions and acted in the same capacities. Texas W. Oil & Gas Corp. , 743 P.2d at 865 (holding suit against director of corporation in official capacity was barred by corporation's favorable judgment in previous suit because "the benefit of collateral estoppel and res judicata are available either to the principal or agent in defense of the second lawsuit"). Both proceedings arose out of the disciplinary charges brought against Mr. Bird and both alleged violations of WDOC procedures during his disciplinary investigation and hearing. Mr. Bird argues his current claims are unrelated to his previous due process argument and attempts to recast them as state-law claims that could not have been raised in federal court. We are not persuaded. First, Mr. Bird did not bring any claims under the Wyoming Constitution that could not have been raised in federal court. Further, although Mr. Bird does not explicitly seek relief under the due process clause, as he did in the prior proceeding, the substance of his argument is that his disciplinary convictions were unfairly obtained-a prototypical due process argument. Finally, the alleged error of state law that Mr. Bird claims could not have been brought in federal court involves his general "state right to have the WDOC adhere to its own policies and procedures," a matter we have determined he lacks standing to pursue. Any alleged procedural violation arising from his disciplinary proceedings, or modified arguments concerning previously raised violations, should have been raised in the previous action and are now barred.

CONCLUSION

[¶12] Mr. Bird did not have standing to seek a general declaration that the WDOC must abide by its own rules and regulations. Collateral estoppel and res judicata bar the remainder of the issues Mr. Bird raised in his complaint. Affirmed.


author: BY THE COURT:

text:
    Kyle McCabe MARTIN, Appellant (Defendant), v. The STATE of Wyoming, Appellee (Plaintiff).
    S-19-0029
    Supreme Court of Wyoming.
    June 5, 2019
    ORDER AFFIRMING THE DISTRICT COURT'S JUDGMENT AND SENTENCE
    [¶1] This matter came before the Court upon its own motion following notification that Appellant has not filed a pro se brief within the time allotted by this Court. Pursuant to a plea agreement, Appellant entered unconditional guilty pleas to (1) one count of aggravated kidnapping, (2) one count of aggravated robbery, and (3) one count of aggravated burglary. Wyo.Stat.Ann. § 6-2-201(a) & (d) ; § 6-2-401(a) & (c); and § 6-3-301(a) & (c). The district court imposed a sentence of 75 years to life for kidnapping, with the lesser sentences to run concurrently. Appellant filed this appeal to challenge the district court's December 19, 2018, "Judgment and Sentence."
    [¶2] On April 3, 2019, Appellant's court-appointed appellate counsel filed a "Motion to Withdraw as Counsel," pursuant to Anders v. California , 386 U.S. 738, 744, 87 S.Ct. 1396, 1400, 18 L.Ed.2d 493 (1967). The next day, this Court entered an "Order Granting Motion for Extension of Time to File Pro Se Brief." This Court ordered that, on or before May 20, 2019, Appellant may "file with this Court a pro se brief specifying the issues he would like the Court to consider" in this appeal. This Court also provided notice that, after the time for filing a pro se brief expired, this Court would "make its ruling on counsel's motion to withdraw and, if appropriate, make a final decision on this appeal." Appellant has not filed a pro se brief or other pleading in the time allotted.
    [¶3] Now, following a careful review of the record and the " Anders brief" submitted by appellate counsel, this Court finds that appellate counsel's motion to withdraw should be granted and the district court's "Judgment and Sentence" should be affirmed. It is, therefore,
    [¶4] ORDERED that the Wyoming Public Defender's Office, court-appointed counsel for Appellant, Kyle McCabe Martin, is hereby permitted to withdraw as counsel of record for Appellant; and it is further
    [¶5] ORDERED that the district court's December 19, 2018, "Judgment and Sentence" be, and the same hereby are, affirmed.
    [¶6] DATED this 5th day of June, 2019.
   BY THE COURT:

/s/ MICHAEL K. DAVIS

Chief Justice