Dorr, Keller, Bentley & Pecha v. Dorr, Bentley & Pecha
841 P.2d 811
Wyo.
1992
Check Treatment

*2 THOMAS, Before CARDINE and GOLDEN, BROWN, JJ., and ROONEY and (Retired). JJ.

BROWN, Justice, Retired. ac- This case involves dissolution of an counting partnership and the submission of binding disputes to arbitration. suggest issue for our Appellants seven review: 1. Whether the December 1990 dis- missal void. juris-

2. Whether the district had the partner- to determine that diction ship part- when the was terminated previously stipulated that ners had arising the partner- all matters out of ship agreement be submitted to arbi- tration. the action below could con-

3. Whether rea- tinue after district court ligned part- that both so partnership were defen- ners of the dants. district court committed

4. Whether the terminating a reversible error still a creditors, un- litigation, unpaid un- capital accounts and had settled re- completed, federal tax unfiled turns. court committed Whether the district finding error

reversible re- issuance of the arbitration award appellant A SK & be- sulted coming the other a creditor of partner- ner not a creditor ship. ipation operation SK A in the committed of & business district

6. Whether appel- prohibiting error in of DKBP. reversible bringing A from lant SK & appellant brought A Subsequently, SK & as the the name County suit Laramie District Court seek- *3 liquidating partner. among things, recovery of the ing, other court committed the district 7. Whether practice accounting damages. and finding error in reversible Hartman, sitting in Gary Lara- Honorable was dissolved subject partnership County Court, mie District dismissed this 24, 1989, August terminated on and provi- and ruled that lawsuit findings, con- on the date which partnership agreement applied sions award were entered clusions and must their that the dif- and submit panel. the arbitration ferences to arbitration. issue Appellees state that 8, 1989, August 7 and an arbitration On

whether: panel testimony and was convened heard correctly determined The trial court regarding disputed and evidence matters. Dorr, Keller, of 1989, 24, August in a two-to-one deci- On (DKBP) Bentley Pecha terminated & sion, panel announced its entry panel’s upon the the arbitration Fact, “Findings of Conclusions of Law and and Award” on “Findings, Conclusion 29, 1989, August A On SK & Award.” 24, August confirm filed an action to the arbitration with instructions. We will remand award, in Civil Docket No. 121-106 in the 1988, 1, and January Court, Dorr Associates On First Judicial District Laramie Coun- Gillette, A), firm (D operating 1990, 29, & a CPA Wyoming. January ty, On consisting of individual Wyoming and opinion stating issued an letter Dorr, Dorr, E. Ste- ners Mark A. Barbara confirm the arbitration would Pecha, Bentley Stephen H. K. ven prepare appropriate directed counsel to Smith, (SK & Associates joined with Keller judgment. A), operating Cheyenne, firm & CPA 1990, 1, A filed a February & On consisting general part- Wyoming and 27, bankruptcy. On March Chapter Smith, to G. Kevin Keller and Robert ners 1990, Chapter A D & converted from a Keller, Dorr, accounting firm of form Chapter bankruptcy (DKBP). partners in Bentley Pecha & trustee, 29, 1990, independent on March D & A and SK DKBP were appointed by the Hogan, was Thomas partner- During A. course & legal representative of the estate. to be 1989, and, April ship, disputes arose on 23, 1990, March Barbara Elizabeth On gave A notice of its intention SK & Pecha, two of the Harold May Stephen Dorr and partnership as of dissolve the A, filed general partners of D & partic- three effectively ended the The notice provided: 1. The award Panel, hereby by majority, The Arbitration following damages to Keller: award the | 5,840.87 compensation year Unpaid for calendar January compensation period Unpaid for the 7,926.64 through May 91,396.27 provisions Damages for of dissolution violation $105,163.78 Total deliver to Keller forego- directed to Dorr further to and exclusive In addition 4,May existing as of receivable ing, all all accounts directed to deliver Keller Dorr is paid for pay to Keller sums Wyoming Cheyenne and to sums in National Bank— receivable hereafter. Savings which said accounts Account No. to Keller directed to return Dorr further statement had balance the last account possession $1,565.35. computer software in Dorr’s all 24, 1989, August and terminated voluntary for relief under petitions Findings, date the Conclusions and Award Code. panel; was entered to determine the In an effort ostensible liquidating part- & A not the SK partnership following legal status of ner DKBP.2 award, A filed a D & declar- the arbitration 31, 1990, On & A and Mr. SK April atory judgment action on Hogan, acting capacity Chapter his as Court, District No. 17330. the Sixth Judicial of D A filed a trustee of estate May 11, SK A filed an action On “Joint Motion for Order Arbi- Court, County District Civil Dock- Laramie Granting Judgment” Award and tration among seeking, other 123 No. et Court, Doc. 121 No. 106 District accounting. and an Those things, damages *4 District, County, Laramie First Judicial then consolidated before two actions were Wyoming (apparently this matter had been in the Terrence O’Brien the Honorable in to since the confirm was limbo Judicial District. Neither ob- Sixth 1989).3 August in This motion joint filed stay the relief from automatic be- tained 26, order re- granting cited the June actions in the Judicial filing fore their Sixth stay lief from and asked that the district and First Dis- District the Judicial Court proceed judg- to judge confirm the Hogan, Chapter Court. Mr. the trict 1990, the district ment. On December A, trustee for D & did not authorize an court filed order arbitration filing Campbell in Case No. 17330 Coun- in case No. 121-106. civil Furthermore, ap- he ty. did not authorize trustee, attorney represent 13, 1990, pellees’ attorney On December for estate, appellees in the styled interest estate. here filed a document “Mo- tion not lifted until to Set Aside Order Arbi- automatic County in tration Order” the Laramie Dis- June 1990. (Civil 121-106). suit. No. Mr. trict Court parties Judge ruled that the had O’Brien A, Goddard, attorney purported for D & all agreed to arbitration to settle of their file this document on behalf several enti- part- differences dissolution ties, Associates, including & “Dorr DKBP; nership pan- that nership.” evidence, testimony con- el considered and in Apparently April dated letter an accounting ducted an and entered the court informed that award; that the arbitration award settled aside would set the December disputes parties; all between the and confirming the trans- arbitration award and re-litigated. could If those issues not be fer case to be consolidated with point, stopped at this the court had pending Campbell County. in action still if ruling have been correct we disre- would action gard difficulty fact neither should in We have considerable reconciling have been the court the first before case record with what However, appears is represented instance. it ruled further the briefs. It put their and partnership of DKBP was dissolved that counsel cleaned out files brought partnership partnership the 24th which was into the was terminated on May owned Keller as of 1989. day August, longer no and/or and exists. accomplished 3. That 2. The court’s order stated: accounting dissolved terminated IT IS THEREFORE HEREBY ORDERED: as of Dismiss in 1. Defendants’ Motion to the First Dorr, Keller, Bentley right & no Pecha has Case Judicial District Docket 123 No. 445 Smith, Keller and Associates of action (consolidated Camp- with No. 17330 in Case pursue any the name of cannot Dorr, County, Wyoming) hereby granted and bell Keller, Bentley & Pecha. hereby prejudice. said case dismissed declaratory request 2. Plaintiffs’ relief Hogan, July before Mr. 3. Sometime granted Case No. 17330 extent that A, agreed Smith, the estate D & to addition behalf of rules that as between Keller Court findings al of fact and conclusions of law and Dorr & Associates and the Associates Dorr, Pecha, Keller, Bentley panel. order to be submitted to record, for bankruptcy. estate when & A filed documents in the without random Industries, Inc., sequence. In 105 B.R. regard relevancy or Some re Cardinal times; 834, (Bankr. supplemented B.R. are the record three materials 1989). to in the are materials referred briefs other S.D.Ohio are documents not in the record. Some of action When cause accrues be and are there-

attached to other documents bankruptcy petition, fore the that claim is permitted origi- indexed. We fore not estate, regardless property of the of wheth by adding supplemented nal to be record upon er or not lawsuit based that cause or- States Court’s United of action had re September 1991. The recita- been commenced. In der dated James, (E.D.Pa.1990); B.R. filled in some of the In re in this order tions II, original Properties, record. holes in the E.F. Hutton Southwest Ltd., (N.D.Tex.1989); 103 B.R. re Corporation, 57 B.R. 680 Johns-Manville I (S.D.N.Y.1986). proper represen- A determination of the D & A 7 bank- tative of when an interest be When dispose ap- of this ruptcy effectively will estate, property of the the “debtor” comes *5 peal.4 independent has in longer no interest bankrupt- in the filing petition The property. There are few narrow the cy February created an court on rule, general to none of exceptions legal of That estate consisted “all estate. applicable which are to this case. All that the & equitable interests of debtor A] [D right Chapter 7 debtor & is the [D A] by in property” wherever located pro to from the net receive distribution (1988) held. 11 U.S.C. 541 whomever § estate, liquidation the of if all ceeds of added). This includes (emphasis paid claims are in full. existing on all of action causes * * * representative The “trustee is the Oil, Torres, F.2d Delgado Inc. v. 785 date. 323(a) (1988) of the estate.” 11 U.S.C. § (10th Cir.1986). 857 added). (emphasis It the trustee who Property all of the estate includes may “sue and be sued” on behalf of unliquidated of debtor’s inchoate 323(b). cre- “After the estate is estate. § Pools, Whiting interests. United States ated, although not in the title does vest Inc.,, n. 462 U.S. 204-05 103 S.Ct. (it estate), in the himself vests trustee (Estate (1983) L.Ed.2d suc 515 as the individual is authorized trustee greater of to no more or causes ceeds acts, i.e., as its through whom the estate parties than those held against action third 323(a).” 2 representative under section debtor.) by Property of the estate 323-2 Bankruptcy, on 323.01 at Collier property in that the “[a]ny interest includes (15th 1987). ed. of acquires the commencement estate after 541(a)(7). Property the case. U.S.C. § Therefore, filing after the of Chapter in a 7 case of a non- of the estate petition, D A held no inde bankruptcy income, re property, includes all individual pendent DKBP interest in the action, etc., ceivables, generated causes of award. 11 U.S.C. the arbitration Chapter 11 acquired during preceding 541(a). The of the conversion effect § Id. case. Chapter 7 was that Chapter to from assert, manage, repre DKBP, entitled to entity partner D A had As interests, sent, changed sell those partnership. and/or managing an interest posses & in (1989). 17-13-501(iii) from the former debtor See, Wyo.Stat. e.g., [D A] § Chapter 7 trustee. passed to the sion to the management interest That respect September to 1991 with opinion is dated Part I of the discussion in this The n substantially here, A, Chapter appellee employed of D & the status bankruptcy. as that same Mai, Bankruptcy Judge, Judge in his Harold ing approval on final B.R. of settlement Hyatt, Cain v. omitted), (citations (E.D.Pa.1989) court. There is no to, or requirement stated: that the debtor consent approve, litigation of the conduct or settle- under trustee in a case controversy. ment representative of the estate. is the sole such, 323(a). As it is the 11 U.S.C. § stay Relief from the automatic capacity to sue and trustee who “has ownership property affect does not 323(b). Thus, 11 U.S.C. be sued.” change standing repre to consistently held that a courts have (in entity sent the interest of an this case to all causes of action “trustee succeeds estate’s) property. All relief by a at the time the bank held debtor stay change from does forum petition is As the court ruptcy filed.” adjudicated interests be which Mississippi held Gulf Jefferson liquidation go allow In other forward. (S.D.Miss. B.R. Coast YMCA[. words, although the June 1990 order 1986)]: granted relief from and allowed the pur- right It is well settled that proceed pending Laramie belong- formerly sue causes action, it County District Court did ing form of the debtor—a change Hogan is the the fact that Mr. Code—vests under representative exclusive estate. the es- the trustee for the benefit of tate. All could causes action that empowered to con trustee debtor, brought have been on be litigation and duct all arbitration matters debtor, or for half the benefit giving no of the estate without behalf debtor, may brought the trustee *6 any seeking au party tice to and without bankruptcy after the filed. is any party. from court from thority a or Oil, Inc., Delgado 785 F.2d at 861. approval, or without court With * * * may prosecute may or en- trustee commencement of appearance any pend- ter an and defend Campbell action County District Court proceeding against ing action or or and seeking a declaration of the nature debtor, prosecute commence and existence, extent, or even the of D & A’s any proceeding in behalf of the action or DKBP, partnership in either interest any estate before tribunal. award, inor was an unau Federal Rules of Procedure representation. if action thorized Even added). (1991) (emphasis R6009 had commenced after the June been stay, from granting 1990 order relief represen is the Because the trustee still as an unautho would have been void estate, others, including of the tative representation. rized See Pueblo Santa debtor, may prosecute not causes of action Fall, 47 S.Ct. 71 Rosa v. 273 U.S. that are of the estate. Lambert (1927). A L.Ed. suit instituted without 658 Inc., (E.D.Pa.1990); Co., 122 v. B.R. 243 Fuller as authority plaintiff from the named Hoekstra, ugdenhil 773 F.2d Vre nullity, any judgment and obtained Cir.1985). (8th Har 213 See also Jones v. such suit is void. Meredith v. The Ioni rell, (11th Cir.1988). F.2d 667 858 Cir.1960). Trader, (2nd F.2d 471 an 279 requirement There is no in Fed. above, bankruptcy As after this noted notify R6009 that the trustee R.Bankr.P. commenced, case debt- debtor, principals, of the or, A, DKBP, D no interest litigation on the es conduct of behalf of award, or in the arbitration decision managing an tate. Where the trustee Keller, Smith-Keller action, claims of Mr. only that is a cause of asset it, they belong to the given against because now required to be to the debtor is notice taken R2002(a)(3) No should have been and estate. set forth Fed.R.Bankr.P. ex- regarding hear- without the only This relates to a those interests R9019. notice 817 authority Seiple, consent of the trustee. Strickland 680 P.2d press and (Hawaii.App.1984) (citations and 534-35 continued as to the Even the determination omitted), footnotes the court said: may ma- of DKBP or termination existence review of Judicial an case is this estate. terially affect severely limited jurisdiction. in our “primary purpose Since of arbitration decisions hold Tenth Circuit Recent litigation,” is to avoid Mars Construc existence of of notice of the regardless tors, Tropical Ltd., Enterprises, Inc. v. of the automatic stay, violations 51 Haw. P.2d merely not voidable. Ellis v. are and void (1969), supreme our “decided to F.2d Corp., Elec. Diesel Consolidated judicial confine to the strictest review Calder, Cir.1990); F.2d (10th In re limits.” circuit court’s possible Both the Cir.1990); (10th Mix Valley Transit of an and an review arbitration award (10th Miller, Ruidosa, F.2d 354 Inc. v. judgment court’s appellate review of Further, Cir.1991). is not voidness entered circuit court subsequent lifting of the auto cured the arbitration award are restricted Ellis, 894 F.2d 371. stay. matic (1976). Thus, HRS 658-9 658-10 §§ be vacated by counsel notion advanced An erroneous only grounds specified one of the four represented A is that the who have correct in HRS 658-9 modified or § is entitled to debtor grounds ed on one of the three set “notice” of the trustee’s conduct forth in HRS 658-10. estate or belonging of action to this causes a case. entry the trustee’s into notice of An arbitration award is considered to not an accurate statement This is final when consideration of the sub- above, pursuant law. As noted mitted issues has concluded and a been R6009, and Fed.R.Bankr.P. U.S.C. § Although reached. there is no resolution authority litigation conduct trustee’s requirement that self-exe- the award be only by requirement that he is limited although cuting, faulty “it approval of an ac- obtain litigation enforcing may ensue because tual final settlement. 111(b) (1975), it,” 6 C.J.S. Arbitration § *7 that “sufficiently

it should be definite parties ministerial are acts of the II effect,” carry Mercury to it needed into proceedings In the multitudinous Refining Inter- Oil Co. Oil Workers below, (10th Union, 980, the arbitration award has not been 187 F.2d national Cir.1951); given Generally, duties also 6 Arbitration rights effect. see C.J.S. (1975), indi- enough to “clear in awards. It seems flow from arbitration § party is unequivocally what each cate parties engaged in case that have required to do.” litigation, mostly unauthorized and futile compli unnecessarily made the case have by vacated An arbitration award be cated, ignored controlling princi and have in grounds on one of five stated the court (1988)5 modified 1-36-114 ples. Wyo.Stat. § hearing troversy grounds specified Wyo.Stat. 1- otherwise 5. five in or conducted § The substantially rights prejudice of a 36-114 are: as party; or (i) procured by corruption, award was The (v)There agreement, was no arbitration means; undue fraud or other by adversely a court determined issue was (ii) by partiality evident arbi- There was by applicant did not provided law and the as neutral, appointed corruption a as trator hearing without participate in the arbitration any prejudic- the arbitrators or misconduct objection. raising that the relief The fact any ing rights party; be would not was such that could not or (iii) powers; arbitrators exceeded their The by equity not a granted court of (iv) a law or postpone arbitrators The refused shown, vacating refusing ground to confirm being for hearing upon sufficient cause con- to hear evidence material to the the award. refused Ap- of three der Arbitration Award.” by the court one or corrected parently judge Wyo.Stat. in 1-36-115 district court deter- grounds set forth § (1988) pro- D A was not (1988).6 Wyo.Stat. 1-36-111 mined that & notified of § proceedings. indicat- the award second arbitration As for modification of vides (D A) (1988) opinion, 1-36-113 ed earlier a debtor & Wyo.Stat. arbitrators.7 § award is not entitled to notice of the trustee’s provides for confirmation litigation in- regarding actions conduct the court. volving estate. statuto- parties have not invoked the The request proceedings We determine that the ry procedure to the arbitrators to Court, nor have District Judicial District8 were modify the arbitration awards Sixth vacate, proceedings improper that arbitration requested that the court modi- they completed con- speci- The time had not fy correct the awards. been modify- correcting, for solidated matters before the Sixth Judicial fied in the statutes long substantially the same as is- ing vacating the awards since District were parties passed. sues in arbitration. “When create relationship contractual which includes confirmation the arbi- attempted The agreement, they broad arbitration intend to poorly documented tration awards is scope include within the of arbitration is no the record record. There dispute arising from the termination of August 1989 award. relationship they that contractual unless However, order dated December purpose clearly evidence a to exclude such 1990 recites that Shriber, disputes.” Waddell 465 Pa. September 1990. confirmed (1975). 348 A.2d In the case before July This same order confirms us, partnership agreement contained brief, appellees award. state provisions.9 broad arbitration overturned a district this order was generally hold when judge. original The record submitted us Courts arbitration, nership agreement provides reflect for does not this action. However, case, parallel the United States as collateral or regard September proceedings disputed order dated to the Court’s being im- property that the trial court in the arbitration or issues arbitrated are stated proper proceeding that “it and such must dis- proceedings confirmation stated stayed until set aside the December 1990 Or- missed or arbitration is com- would specified declaratory judgment grounds Wyo.Stat. complaint three 1- 8. & A’s complaint origi- are: 36-115 SK was consolidated with & A’s (i) nally There was an evident miscalculation of filed in the First Judicial District. figures descrip- or an evident mistake in the any person tion of referred partnership agreement part: stated in *8 award; the XII. ARTICLE ARBITRATION (ii) upon The awarded a matter arbitrators controversy arising relating Any or out of may and the award not submitted them be by agreement be shall settled affecting the of corrected without merits the by members of the state three submitted; upon decision the issues knowledgeable affairs. first in business The (iii) imperfect The award is in a matter of selected, by part of form, two arbitrators one each affecting not the merits of the contro- controversy, and the third arbitrator versy. the mutually agreed upon by first and selected the pertinent part: Wyo.Stat. 1-36-111 reads in Majority decision of the ar- two arbitrators. (a) application On or an order of of settlement, will constitute arbitrated bitrators court, may modify the the arbitrators the judgment on the award rendered award: by having jurisdiction. any The court entered (i) was When there an evident miscalcula- by arbi- settlement shall be made arbitrated figures description person of tion of days of third within 60 selection of the trators award; property referred to in the shall be exclusive arbitrator. Arbitration (ii) imperfect the award is as to form When controversy. remedy of controversy; affecting the merits of (iii) purpose clarifying For award.

«19 persuaded disposition Auto Ins. Co. am that is pleted. Farm Mutual correct State appeal must Ill. that this be dismissed. That Development Corp., 73 v. Hanover persuasion leaves me with the conclusion Ill.Dec. 391 N.E.2d App.3d separately I must that dissent. (1979); v. Seidman and Seidman Cal.App.3d Cal.Rptr. Wolfson, opinion I am satisfied (1975). in its court correct conclusion that the

civil action filed Dorr & Associates in SUMMARY the District Court of Dis- the Sixth Judicial to invoke jurisdiction trict failed of that A 7 bank- After D & went into stay bankruptcy. court because longer standing to file and ruptcy, it no is applicable The same rationale to the ac- pursue complaint April dated Dorr, Keller, purportedly tion filed proper bankruptcy is the The trustee Bentley Pecha in the District Court of entity represent estate the First Judicial District that was ordered D & proceeding. court or arbitration pending to be consolidated the action complaint nullity for the April A’s 30th is a In neither in the Sixth Judicial District. that it filed in violation further reason was acquire juris- instance did the court district stay when automatic occurred an which case, I am satisfied diction over Chapter bankruptcy. A A into & went lifting that the defect was not cured dismiss tried proceeding third reason to of that at a later time. and now on Judicial District Sixth quite effect that Our rule clear to the ignored appeal generally is that the greater subject no matter this court has attempted award to liti- the arbitration jurisdiction than vested the trial gate involving matters arbitration before and, in instances in which the trial completed. had been jurisdiction, appropriate court has no only viable action that The district court disposition appeal for dismissal of the petition we of is a to confirm the are aware jurisdiction this court. Matter want award, Civil No. 121— Docket Fulmer, (Wyo. 761 P.2d 658 Estate of originally filed the First Judicial 1988); Ruppert, P.2d 1042 Snell apparently This District Court. file State, (Wyo.1975); Pritchard v. Division to the Sixth District. transferred Judicial Rehabilitation, Dept. Vocational Arbi- The status of “Order Services, P.2d 523 Health and Social tration Award” is unclear and cannot be Parrish, P.2d 824 (Wyo.1975); Ginn the record. determined reference to proper disposition for this (Wyo.1961). up pursue parties must now back in this to make case is to dismiss the arbitration appeal. finally award. When district court the court not be offer- Certainly, should petition, party may peti- upon acted concerning appar- action that ing advice tion the district court to enforce the award instituted to confirm the ently was necessary, appropriate if or take other ac- is not before That case of the arbitrators. tion. any way. court in with instructions to dismiss Remanded noting appeal after I would dismiss appeal. case here on the consolidated any jurisdic- reasons for absence of *9 in the trial court. tion THOMAS, ROONEY, J., J., and Retired dissenting opinions. file Justice, Retired, ROONEY, dissenting. Justice, THOMAS, dissenting. proceeding was valid The arbitration said agree I with much of what is The decision disposed While matter. court, agree opinion I cannot on was announced strug- confir- I have District Court indicated with the ultimate resolution. 1989. The January gled ground the ma- of the award on to find common with mation Although ineffective I letter. Rooney, opinion but in an jority opinion or Justice concerning matter were proceedings after institution in the district court February 1, proceedings proceedings such March

1990 and concerning subsequent proceedings made effective when matter were them lifted stay relative to

automatic effect, bankrupt-

on June disposition of the entire turned

cy court and the to the state courts

matter over itself with the

bankruptcy court concerned claims, and assets the bank- debts

other

rupts.

I would affirm.

MMOE, PO, Appellant a/k/a (Defendant), (Plaintiff).

MJE, Appellee

No. C-91-12. Wyoming.

Supreme Court 13, 1992.

Nov.