441 P.3d 841
Wyo.2019Background
- Alex and Marjorie Mantle sued the Garland brothers, their companies, and North Star after a leveraged buyout collapsed; bench trial produced competing money judgments (Mantles against North Star and Garlands against Alex Mantle).
- While Mantle I (appeal of the bench trial judgment) was pending, Gary and Ray Garland moved the district court a second time to offset judgments in their favor; the court granted the second offset while the offset issue was still on appeal.
- The Garlands and North Star had previously settled a malpractice claim against accountant Karl Killmer; North Star’s $121,271 share of the settlement was deposited in the court registry (the “Killmer Settlement Funds”).
- The Mantles sought credit against those funds, arguing the Garlands lacked standing to assert a direct claim against Killmer (their claim was derivative of North Star) and that the Mantles’ purchase of the FNB note gave them a security interest via a “general intangibles” clause.
- North Star’s counsel (The Kuker Group / Overstreet Homar & Kuker) claimed unpaid fees from portions of the Killmer funds; the district court used an equitable “first come, first serve” distribution approach and paid Kuker; the court also issued a nunc pro tunc removing Marjorie Mantle’s name from a disbursement that belonged only to Alex.
Issues
| Issue | Plaintiff's Argument (Mantle) | Defendant's Argument (Garland / North Star) | Held |
|---|---|---|---|
| 1. District court jurisdiction to grant second offset while appeal pending | District court lacked jurisdiction because offset was on appeal in Mantle I | District court retained equitable power to enforce/modify decrees and could decide offset | Reversed: court lacked subject-matter jurisdiction to grant the second offset while the issue was pending on appeal; remand for further proceedings |
| 2. Standing to assert direct claim against Killmer (Killmer funds allocation) | Garlands lacked standing to bring direct claim; funds belong to North Star creditors | Garlands and North Star treated settlement allocation as resolved by district court and settlement distribution | No reviewable district-court decision in record on standing; issue not finally adjudicated and remanded for determination |
| 3. Whether Mantles’ purchased FNB security interest in “general intangibles” attached to Killmer proceeds | Proceeds of settled tort became payment intangibles and thus fell within FNB’s general intangibles clause | Commercial tort claims and their proceeds are excluded absent specific identification in security agreement | Affirmed: general intangibles clause did not cover proceeds of commercial tort claim; no security interest in Killmer funds |
| 4. Award of portion of Killmer funds to North Star’s attorneys (Kuker) and nunc pro tunc correction removing Marjorie | Kuker not entitled to that portion (Mantles); nunc pro tunc changed substantive rights | Kuker claimed attorney lien / equitable priority; nunc pro tunc corrected clerical error removing Marjorie’s name | Affirmed: district court did not abuse discretion using equitable first-come, first-serve distribution and properly entered nunc pro tunc correcting clerical error |
Key Cases Cited
- Mantle v. North Star Energy & Construction, LLC, 437 P.3d 758 (Wyo. 2019) (prior appeal from bench trial judgment)
- Hurd v. Nelson, 714 P.2d 767 (Wyo. 1986) (equitable power to modify enforcement of decrees)
- Cargill, Inc. v. Mountain Cement Co., 891 P.2d 57 (Wyo. 1995) (inherent power to allow or compel equitable set‑off)
- Doctors' Co. v. Ins. Corp. of America, 837 P.2d 685 (Wyo. 1992) (procedure for trial court handling motions during pendency of appeal and remand practice)
- Garwood v. Garwood, 233 P.3d 977 (Wyo. 2010) (district court jurisdiction to address collateral post‑judgment matters while appeal pending)
- Bayer CropScience, LLC v. Stearns Bank, N.A., 837 F.3d 911 (8th Cir. 2016) (commercial tort claims and proceeds require heightened identification; general intangibles clause does not capture tort‑claim proceeds)