Elk Ridge Lodge, Inc. v. Sonnett
2011 WY 106
| Wyo. | 2011Background
- Sonnett and Burgers-Sonnett bought about 20 acres from Elk Ridge Lodge, Inc. secured by a mortgage and promissory note; they later defaulted on the note and Elk Ridge foreclosed.
- The Master Plan restrictive covenants for Elk Ridge Lodge were recorded in Sublette County and not disclosed to the Sonnetts.
- Sonnetts learned of the Master Plan in 2006 and were told they risked penalties for noncompliance, leading to lodge closure in 2007.
- Sonnetts alleged the Master Plan constituted an encumbrance not disclosed in the Warranty Deed, thus breaching warranty covenants.
- The district court granted Elk Ridge summary judgment on foreclosure and against Sonnetts on counterclaims; Elk Ridge later sought attorneys’ fees; the court denied.
- The Supreme Court affirmed both the foreclosure and warranty- breach rulings and upheld the denial of attorneys’ fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of warranty—Master Plan excluded from warranty | Sonnett argues Master Plan is an encumbrance not excluded. | Elk Ridge contends Master Plan is a public-record matter; warranty excludes such encumbrances. | Warranty breach claim declined; Master Plan excluded by 'public record' clause. |
| Foreclosure vs. counterclaims’ impact on judgment | Sonnetts contend counterclaims may diminish Elk Ridge’s foreclosure relief. | Elk Ridge argues counterclaims are inseparable from foreclosure and support foreclosure relief. | Foreclosure affirmed; counterclaims not grounds to defeat foreclosure. |
| Equitable defense to foreclosure—findings on equities needed | Sonnetts seek explicit equitable findings; Beaulieu guidance cited. | District court’s summary-judgment decision implicitly rejected equitable defenses. | No separate equity findings required; record supports denial of equitable defenses. |
| Attorneys’ fees entitlement on foreclosure case (S-10-0191) | Sonnetts contest fees for defending counterclaims and third-party claims. | Elk Ridge contends all fees are recoverable if inextricably linked to foreclosure. | District court’s denial of fees affirmed; fees not recoverable where not properly segregated. |
Key Cases Cited
- Foxley & Co. v. Ellis, 201 P.3d 425 (Wy. 2009) (warranty excludes encumbrances not listed; public-record encumbrances are excluded by deed language)
- Beaulieu v. Florquist, 86 P.3d 863 (Wy. 2004) (equitable defenses not supported; affirm summary judgment when record shows no equitable estoppel/waiver/laches)
- Brown v. City of Casper, 248 P.3d 1136 (Wy. 2011) (Beaulieu not controlling; equity findings not always required on foreclosure")
- Forshee v. Delaney, 118 P.3d 445 (Wy. 2005) (fees tied to foreclosure may be awarded when inextricably linked to merits)
- City of Gillette v. Hladky Construction, Inc., 196 P.3d 184 (Wy. 2008) (deference to district court on fee awards; split as to segregation of hours)
- Ringolsby v. Johnson, 193 P.3d 1167 (Wy. 2008) (appellate review of fee decisions under abuse-of-discretion standard)
- Pekas v. Thompson, 903 P.2d 532 (Wy. 1995) (segregation principle for fees; exhaustion of opportunity to present evidence)
- Cline v. Rocky Mountain, Inc., 998 P.2d 946 (Wy. 2000) (fees may require segregation when multiple claims; inextricably linked claims may recover)