KM Upstream, LLC v. Elkhorn Construction, Inc., 2012 WY 79

KM Upstream contracted with Newpoint Gas, LP to build an amine plant for KM with a fixed price around $15.7 million; change orders increased that amount but KM largely paid; Newpoint subcontracted Elkhorn to build foundations and interconnect skids under a time-and-material contract with a $5.7 million target price; Newpoint approved Elkhorn invoices totaling about $9.91 million; Elkhorn filed a Lien Statement March 6, 2009 for nearly $4.88 million with 1,260 pages of supporting invoices; Elkhorn’s complaint sought foreclosure of a mechanic’s lien, an oil and gas lien, and unjust enrichment, later amended to include Newpoint as a defendant; Newpoint filed bankruptcy in Oklahoma, prompting questions about automatic stay and indispensable party issues; district court granted summary judgment on the mechanic’s lien while staying other proceedings and the case was remanded for further handling of disputed amounts and the separate oil and gas lien claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Automatic stay deprives court of jurisdiction	KM argues stay halts all proceedings	Elkhorn argues in rem lien foreclosure may proceed	Stay did not deprive jurisdiction; in rem foreclosure allowed; co-defendants not in bankruptcy may be unaffected.
Indispensable party Newpoint	Newpoint indispensable for complete relief	Indispensability depends on feasibility of joinder; lien mechanism permits proceeding	Not indispensable; lien foreclosure can proceed in Newpoint’s absence and remain within court’s equity authority.
Indispensable party HFG Engineering	HFG joint venturer; should be joined	Joinder unnecessary; issues can be resolved later in bankruptcy court	No error in proceeding without HFG; matters properly stayed for bankruptcy resolution.
Genuine issues of material fact	Disputed invoices and cost overruns create questions	Evidence shows invoices approved and costs allocated; no material fact questions	No genuine issues of material fact; summary judgment affirmed on the lien claim.
Lien amount under contract price	Lien exceeds contract price; not allowed by statute	Lien amount supported by contract price and approvals; not capped improperly	Lien amount properly supported; contract price not capped by original target price.

Hamel v. American Continental Corp., 713 P.2d 1154 (Wyo. 1986) (bankruptcy stay does not affect co-debtor or non-bankrupt parties)
Horseshoe Estates v. 2M Co., 713 P.2d 776 (Wyo. 1986) (lien statute aims to prevent unjust enrichment and ensure payment)
Engle v. First Nat'l Bank of Chugwater, 590 P.2d 826 (Wyo. 1979) (lien principles; unjust enrichment; measures of damages)
United Pacific Ins. Co. v. Martin & Luther Gen. Contractors, Inc., 455 P.2d 664 (Wyo. 1969) (reasonable value of labor and materials furnished; lien measure)
Mortenson v. Scheer, 957 P.2d 1302 (Wyo. 1998) (impracticability or impossibility as contract-disruption factor)
Bowles v. Sunrise Home Ctr., Inc., 847 P.2d 1002 (Wyo. 1993) (test for prejudgment interest; liquidated claims and notice)
A.H. Robins Co. v. Piccinin, 788 F.2d 994 (4th Cir. 1986) (indemnity considerations; not controlling where bankruptcy involved)
Wells Fargo Bank v. Hodder, 144 P.3d 401 (Wyo. 2006) (prejudgment interest standard for liquidated claims with notice)