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HomeMy WebLinkAbout872435IN THE DISTRICT COURT OF THE THIRD JUDICIAL DISTRICT IN AND FOR THE COUNTY OF LINCOLN, STATE OF WYOMING ROBERT REED and JOAN REED, ) Civil No.' 9510 Plaintiffs, ) VS. ) BYRON BAKER and ROSE ) KENWORTHY, a/k/a ROSE ) BAKER, ) ) Defendants, ) VS. ) 872If35 GREYS RIVER ENTERPRISES, ) INC. ) Defendant. ) Cot; ! il+3lAf._.~!(~1IC~l Cl.£F~K BOOK 6 _YR. PAGES 4 3 JUDGEMENT UOK__Z~__.._PxPAGE__//aT THIS MATTER came before this Court for trial on the 19th day of May, 1997; The Plaintiffs were present and represented by Dennis L. Sanderson attorney at law of Afton, Wyoming, the Defendant's were present pro se; The Court having considered the testimony presented, the exhibits admitted and the argument of the parties, enters the following judgement based on the following Findings of Fact and Conclusions of Law. FINDINGS OF FACT 1. In December of 1990, Jim and Donna Carlisle had a building and lot located in Alpine, Wyoming, for sale. The Carlisles were purchasing the property from Richard i 087243 5 846 /09 and Kathy Jenkins under a Real Estate Purchase Agreement. The building was used by the Carlisles for a restaurant, and some of the remainder of the space was rented to business and residential customers. 2. The Defendant, Byron Baker, became aware of the opportunity to purchase this building and decided it was a good business opportunity. Baker, however, did not have the funds to purchase the property. He contacted the Plaintiff, Robert Reed, who was a friend and former client. Baker had done carpentry work on the summer cabin of the Plaintiffs, Robert and Joan Reed, which is located near Alpine, Wyoming. Baker proposed that if the Reeds would make the down payment, he would remodel the building for use as rental units, and Baker and Reed would each be half owners in the enterprise. 3. Robert Reed went back to Pocatello, Idaho, to discuss the matter with his wife, Joan Reed. Joan Reed was the beneficiary of a trust which had funds that might be used to make the necessary down payment. 4. The following week the Reeds went to Alpine to look at the property and to discuss the possible business arrangements with Byron Baker. The Reeds and Bakers again walked through the building and Byron Baker explained to them his ideas on how it could be remodeled to maximize the potential of the building for rental purposes. 5. The business arrangement the parties agreed upon was as follows: a. The Reeds would pay the earnest money deposit of One Thousand Dollars ($1,000.00) and the down payment of approximately Fifteen Thousand Dollars ($15,000.00). 2 !Mp 087243; i 8 4 1 u /jo b. The Reeds and Bakers would each pay one-half of the Ten Thousand One Hundred Forty-four Dollar ($10,144.00) note which the Carlisles would accept as part of the consideration for the purchase. C. The Bakers would remodel the building to make its space available for renting. d. The parties would form a corporation to purchase the property, and the Reeds and Bakers would each own one-half of the shares. e. The cost of building materials, costs of operation, and annual payments on the installment sales contract with the Jenkins would be paid by the business out of rental income. The Reeds agreed to advance the initial costs of forming the corporation and building materials if the rental income was at first insufficient to cover those costs. The Reeds were to be reimbursed for those advances after the business became profitable. f. The profits and losses of the business would be divided equally between the Reeds and the Bakers. 6. The Parties offer to purchase the property was made and accepted by the Carlisles on December 11, 1990. The agreement to purchase the property provided that the title would be conveyed to "R. Byron Baker and Rosemary K. Baker and Robert I. Reed and Joan M. Reed, Greys River Enterprises, Inc. (corporation filing to be accomplished after closing)". The parties' intended to convey their interest in the property to the corporation. The total purchase price was One Hundred Nineteen Thousand Dollars ($119,000.00) plus costs and accrued real estate taxes. 3 0872435 8 48 7. The closing on the sale occurred on January 12, 1991. The total amount paid by the Reeds for earnest money deposit, down payment and closing costs was Sixteen Thousand Sixty-eight Dollars ($16,068.00). 8. On January 7, 1991, the parties filed the Articles of Incorporation for Greys River Enterprises, Inc. with the Wyoming Secretary of State with Robert Reed, Joan Reed, R. Byron Baker and Rosemary K. Baker listed as incorporators. 9. The Articles of Incorporation also reflect that all four parties would serve as directors. 10. On January 12, 1991, thirty (30) shares each were issued to Robert I. Reed, Joan M. Reed, R. Byron Baker and Rosemary K. Baker. 11. The minutes of the organizational meeting are not signed by the officers. The parties met often, informally, during the year 1991. The first written minutes of the meetings were written by Rosemary Baker and covered meetings held on March 1, 1992, July 7, 1992, July 25, 1992, December 30, 1993, January 3, 1994 and January 23, 1994. 12. At the organizational meeting, the Parties elected or agreed that Robert Reed would serve as President, Byron Baker as Vice-president, Rosemary Baker as Secretary and Joan Reed as Treasurer. 13. The parties held themselves out and operated as a corporation in that they have filed a corporate tax return for all years since 1991 on Greys River Enterprises, Inc., the lease agreements on the apartment units show Greys River Enterprises, Inc. as the Lessor, as noted earlier, there are minutes of directors and shareholders meetings, they established bank 4 M 0`7243;; M L 849 r/ accounts in the name of Greys River Enterprises, Inc. and set up credit accounts in the name of Greys River Enterprises, Inc. 14. During the summer of 1991 the Carlisle<note became due. The Carlisles had not left the premises in the condition they agreed to and the parties negotiated a reduction in the note balance from Ten Thousand One Hundred Forty-four Dollars ($10,144.00) to Nine Thousand Three Hundred Ninety-one Dollars ($9,391.00). The Reeds paid a total of Five Thousand Three Hundred Twenty-two Dollars ($5,322.00), which was Six Hundred Twenty- seven Dollars ($627.00) more than half of the note obligation. The Bakers paid only Three Thousand Dollars ($3,000.00), which was One Thousand Six Hundred Ninety-five ($1,695.00) less than their half of the note obligation, leaving the sum of One Thousand Sixty-nine Dollars ($1,069.00) to be paid by the business. 15. The parties called their building Greys River Square and they also set up bank accounts under that name. This use of a different name was not the result of an intent to have a different business entity from the Corporation. It was merely a doing business name of Greys River Enterprises Inc. 16. Immediately following the acquisition of the property, the parties began remodeling and renovation of the building. A portion of the building was already in rentable condition and was occupied by tenants when it was acquired by the parties. During the year 1991 the following apartments units were remodeled: Unit 2, Unit 3, Units 5 & 6, and Unit A & B, which'is the location of the Pea Pod Trading Post. 5 0872435 850 I/Z 17. During the year 1991, Byron Baker was obligated to finish the construction of a home for one Dick Griffith. Although Byron Baker did work on the remodeling project, work was also done on the property by other workers hired by Byron Baker. 18. Although the parties were doing their best to achieve their business purpose by making the space available for rent, Mr. Baker's outside commitments began to cause problems. In May of 1991, the business entered into a lease agreement with a chiropractor by the name of Dr. Craig Blamires on Units 5 and 6. The lease was to begin on July 1, 1991, however the remodeling work was not done by Byron Baker until late October or early November, 1991. This delay caused Dr. Blamires to cancel the lease and cost the business the cost of remodeling this space for a chiropractic office in the sum of One Thousand Six Hundred Eighty-three Dollars ($1,683.00), lost rent for two months in the sum of Nine Hundred Dollars ($900.00) and costs in converting Units 5 and 6 into separate residential apartments. 19. In June and July of 1991, Byron Baker allowed one of his customers, Dick Griffith, to live in an apartment rent free because Baker had not finished Griffith's house by the time he was supposed to move in. Baker failed to reimburse the business for this loss of rental income. The reasonable rental value of this unit was Four Hundred Fifty Dollars ($450.00) a month plus Fifty Dollars ($50.00) a month for utilities. 20. In early 1992, the parties met and went over the books and the work each had done. They decided the agreement was not working as they originally contemplated. Byron Baker'and Robert Reed agreed that the Reeds had spent as much time working on the building as the Bakers had. In addition, the Reeds had paid in 1991 a total of Thirty Eight Thousand Four Hundred Sixty-two Dollars ($38,462.00) in cash for property payments, taxes, labor and supplies. 6 r ~ ~ u U8 72435 851 r/,V The rental units were not complete and the business was not able to make the annual installment payment to the Jenkins. Moreover, the Bakers had only paid Three Thousand Dollars ($3,000.00) of their obligations under the Carlisle note. The Reeds had to pay for the Bakers' share of the Carlisle note and Eight Thousand Five Hundred Seventy Dollars ($8,570.00) of the annual payment on the Jenkins contract. 21. The parties agreed to modify their original agreement as follows: a. Both Reeds and Bakers would continue to have an equal number of shares. b. The parties would agree that the corporation would give the Joan Reed Trust a promissory note for the additional money that the Reeds had advanced. C. The Bakers would finish the remodeling of the property. d. The cost of materials and yearly payments would be paid out of business revenues. 22. On March 14, 1992, the parties had a director's meeting and agreed to have the corporation execute a promissory note as previously agreed in the sum of Thirty-five Thousand Five Hundred Dollars ($35,500.00) payable to the Joan Reed Trust. They also agreed that an additional thirty (30) shares would be issued to each party. 23. The parties met as directors again on April 26, 1992, and Byron Baker convinced Joan Reed to reduce the note by Five Thousand Dollars ($5,000.00). The first promissory note was canceled and a new promissory note in the sum of Thirty Thousand Five Hundred Dollars ($30,500.00) was signed in the name of the corporation. The parties agreed that 7 -19 0812 ;43; 852 11-5 until the business could afford to pay more it would only have to pay Three Hundred Dollars ($300.00) per month toward the indebtedness on the promissory note. 24. Notwithstanding that the Reeds still had a larger contribution of money and labor than the Bakers, the agreement of the parties to issue additional stock in an equal amount to all parties and to have the corporation make and issue a promissory note in the sum of Thirty Thousand Five Hundred Dollars ($30,500.00) payable to the Joan Reed Trust constituted a modification of the original agreement of the parties. The original agreement that the Bakers would continue to remodel the building, the cost of materials would be paid out of business proceeds and that all profits and losses would be divided equally remained unchanged. With regard to the labor needed to remodel or improve the premises, there was no agreement that either party keep track of hours expended. However, the parties still intended to be reimbursed for costs expended. 25. Following the meetings in March of 1992 wherein the original agreement was modified, Byron Baker partially remodeled a bedroom that was in Apartment 1, finished the veterinary offices and remodeled the chiropractic office to make two residential rental units. This work was before the end of 1992. The units were not entirely completed at the time they were rented and have not yet been completed. 26. From March of 1993 until October of 1993, most of the remodeling work was done by contract labor and was paid for by the business. In late summer of 1993 the Bakers had to vacate the house where they were then living. The Bakers met with the Reeds and proposed to finish all of the work left to be done in Units 2, 4, 5 and 6, as well as repair the roof damage, finish the deck, windows, and the entrance to Unit 1, in exchange for living in Unit 4 for 8 M 0872435 one year, rent free. The Reeds, believing that this might be an incentive for Bakers to get the apartments completed, accepted the proposal. Bakers moved into Unit 4 in September of 1993 before it was finished. The Bakers did some work on Unit 4 through the fall and winter until it was approximately eighty percent complete and comfortable for them. No work has been done since. 27. In December of 1993 there wasn't enough money in the business account to make the mortgage payment. The Reeds borrowed Three Thousand Two Hundred ($3,200.00) so the business could make the annual payment. 28. In December of 1993 the parties met at the Reeds' home in Pocatello, Idaho, for a director's meeting. The main subject of conversation was when Baker was going to get Units 2, 4, 5, and 6, the roof, deck, the basement windows and the Unit 1 entrance finished. There was an argument between Byron Baker and Joan Reed on the speed, or lack thereof, of Byron's progress. The Bakers did not do the work on the remaining units as promised. 29. The Defendant, Byron Baker, maintains that he was not able to finish the building because there were no funds available for materials. However, the record reflects that the Bakers have considered the business as a source of funds. 30. During the second year of operation the Bakers withdrew, without authority, funds from the business savings account and used it for personal use. These transactions did not show up in the check register and were not discovered until June of 1992 when Robert Reed inspected the records. He discovered that the Bakers had withdrawn a total of Two Thousand Four Hundred Fifty-five Dollars ($2,455.00) between April and May of 1992. When this was discovered the Reeds questioned the Bakers about this and Bakers admitted they 9 U~'~435 8 5 4 / /'7 shouldn't have done that and promised to pay it back. Between June of 1992 and February of 1993 the Bakers paid back the funds they had taken. The Bakers resumed taking money in June of 1993. Five Hundred Five Dollars ($505.00) was taken on July 20, 1993, and they withdrew Eight Hundred Dollars ($800.00) from savings. This was discovered by the Reeds in early September of 1993, and they again confronted the Bakers about it. It was then agreed that, henceforth, all checks would require a Reed and Baker signature. Between September and October of 1993, the Bakers paid back the Eight Hundred Dollars ($800.00) they had taken. 31. In the Spring of 1993 the parties decided to create Unit four (4) which would cover three floors and occupy approximately 1800 square feet of space. Unit 4 was not fully completed when the Bakers moved in to it in the fall of 1993. 32. The Bakers did not do any further work in remodeling after March, 1994 33. In February of 1994, the parties agreed to raise the rent on the units and Rose Baker was to write a letter notifying the tenants of the rent increase. By the next meeting, in March of 1994, the letter still had not been done, so Joan Reed wrote the letter for the Bakers to send to the tenants. In May of 1994 the letter Joan had written had still not been sent to the tenants and, when Rose Baker was asked why she hadn't done so, an argument ensued which resulted in Rose telling the Reeds that they could take care of the books, send the letters and take possession of the records. 34. In March of 1994 the work was not progressing as promised and the Reeds had to obtain a loan from the bank of Three Thousand Two Hundred Dollars ($3,200.00) so the Reeds told the Bakers that they had to start paying rent. The Reeds said that Unit 4 was worth at least Six Hundred Dollars ($600.00) per month because it was twice as large as any other unit. 10 M 08'72435 855 11 W The Bakers said they shouldn't have to pay Six Hundred Dollars ($600.00) because the unit was not finished and that they were half owners and had a say in what the rent should be. The Bakers, unilaterally, set the rent at Three Hundred ($300.00) per month and paid that amount through January of 1995. No rent has been paid since then. 35. In July of 1994, Byron Baker told the Reeds that he wanted out of the business. The Reeds told Byron Baker to give them a figure. The Bakers sent a letter offering to sell their stock for Sixty-six Thousand Dollars ($66,000.00) which the Reeds felt was excessive. The Reeds made a counter proposal which the Bakers wouldn't accept, and, after a period of negotiations, this lawsuit to dissolve the business ensued. 36. The Bakers stopped paying rent in January of 1995 and have refused to do so until the present. 37. In December of 1996 the Bakers declared a dividend for shareholders without the approval of the Reeds. They wrote checks of Fifteen Hundred Dollars ($1,500.00) each to Byron Baker, Rose Baker, Robert Reed and Joan Reed. The Reeds, upon receipt of the checks, wrote to the Bakers telling them they had no authority to take this action. In spite of this, the Bakers kept the Three Thousand ($3,000.00) they had given themselves. 38. In January of 1997 the Bakers filed a voluntary dissolution of the corporation with the Secretary of State. The certificate of dissolution signed by the Bakers represented that the corporation had never conducted business and the dissolution was authorized by a majority of the incorporators. Both of these statements are false because, as indicated above, the corporation did in fact do business and all four parties signed the Articles of Incorporation as incorporators. 11 0s'?2435 856 1/C/ 39. The Bakers also used corporate funds or assets in other ways for their benefit. In May, 1991, through September, 1993, they charged gasoline for their personal use to the business in the sum of Seven Hundred Fourteen Dollars and Thirty-three Cents ($714.33). In 1991 the Bakers took from the business a ceiling fan costing Fifty Dollars ($50.00) that had been purchased to install in an apartment unit and installed it in the home in which they were then living. In 1991 Bakers took a stove hood that been purchased for use in an apartment costing Fifty Three Dollars ($53.00) and put it in a house that Bakers were building for a client. In 1992 twenty sheets of sheet rock valued at Two Hundred Dollars ($200.00) were used in Larry Colyer's house. The financial records of the business indicate that between 1991 and 1994 the Bakers charged Six Hundred Fifty-six Dollars. ($65 6. 00) for materials or equipment used in Baker's other projects. The corporation was never reimbursed. The value of rent for the apartment occupied by the Bakers, if completed, is Seven Hundred Fifty Dollars ($750.00) per month. The failure to complete it is the result of the Bakers' decision not to do so. This failure to work and the failure of the Bakers to pay the rent in full has cost the business income in the sum of Seven Hundred Fifty Dollars ($750.00) per month since October of 1994. That results in a loss of Twenty-three Thousand Two Hundred Fifty Dollars ($23,250.00) in income to the business (plus interest costs of 10% per annum). This amount, less the sum of Three Thousand Three Hundred Dollars ($3,300.00) which Bakers have paid in rent, or a total of Nineteen Thousand Nine Hundred Fifty Dollars ($19,950.00) is owed by the Bakers to the Corporation. The Bakers also have occupied and used three hundred (300) square feet of space in the basement of the building as a workshop since October of 1993. 12 0872435 857 1"'~ C.1 40. The Thirty Thousand Five Hundred Dollars ($30,500.00) debt evidenced by a promissory note to the Joan Reed Trust, plus accrued interest, less payments made since January of 1993, is a valid obligation of the Corporation. The amount was negotiated by the parties and signed by the president and secretary. 41. The total of all corporate funds and property used, converted or taken by the Bakers is as follows: Money taken $ 3,000.00 Materials and supplies taken $ 656.43 Rent $19,950.00 Gasoline 714.33 TOTAL $24,320.76 42. The parties agreed in 1992 that the capitalization was equal and shares were issued reflecting that fact. The Court therefore finds that each party owns twenty-five percent of the Corporation. 43. It is apparent that the management of the Corporation is hopelessly deadlocked and the corporation should be dissolved, the assets sold, the creditors paid, and the remaining cash distributed to the shareholders. CONCLUSIONS OF LAW 1. Greys River Enterprises, Inc., was validly formed in January of 1991 by the parties, and the parties are estopped from challenging its existence. W.S. §17-16-203(b) 2. The action of Byron and Rose Baker as two of the four incorporators and directors to dissolve the Corporation in January of 1997, without having the consent of a majority of incorporators or directors, was invalid. W. S. §17-16-1401 requires that (1) a majority of 13 i 08'72435 858 1.z I incorporators or initial directors of incorporation authorize the dissolution; (2) that the corporation has not issued shares; (3) that the corporation has not commenced business; (4) that no debt of the corporation remains unpaid; and (5) that the assets of the corporation have been distributed to the shareholders. None of these precautions we're had. Moreover, none of the conditions of a voluntary dissolution by the board of directors set forth in W. S. §17-16-1402 were met. 3. The Articles of Dissolution filed are void because they were based on false statements. The Corporation is still in existence and subject to this Court's jurisdiction to conduct proceedings in dissolution. 4. The parties intended and agreed to transfer the property that was purchased from the Carlisles to the Corporation. The failure to affect such a transfer was the product of a mistake or inadvertence because the parties thought it had been done. They were reporting depreciation and income earned in their tax return and the Corporation was leasing the property. There was no lease of the property from the parties to the Corporation nor was there any rent paid by the Corporation to the parties. 5. The parties to this action had an agreement that the Corporation would hold title to the real property. A constructive trust may be imposed to prevent the retention of legal title to property which really belongs to another in favor of one who should own it or who is considered in equity to be the beneficial owner. Fuller v. Fuller, 606 P2d.306,309 (Wyo. 1980). Greys River Enterprises, Inc. is the beneficial owner of the real property described as follows: Lot 608-C, LAKEVIEW ESTATES SUBDIVISION, Lincoln County, Wyoming as said lot is laid down and described on the official plat of said addition duly recorded in the Office of the County Clerk and Ex-Officio 14 M 08' ;443! 0 859 Jig Register of Deeds of Lincoln County, Wyoming and that portion of Lot 651-C in said Lakeview Estates Subdivision and described as follows: BEGINNING at a point on the Northerly boundary line of said Lot 651-C and the Southerly right-of-way line ofU.S. Highway 89 from which point of beginning the Northeasterly Corner of said Lot 651-C lies North 63011'E, a distance of 100 feet; THENCE from said point of beginning, S26°49'E, a distance of 70 feet, more or less, to the Northeasterly Corner of Lot 608-C of said Lakeview Estates Subdivision; THENCE along the Northerly boundary line of Lot 608-C of said Lakeview Estate Subdivision a distance of 100 feet, more or less, to the Northwesterly Corner of said Lot 608-C; THENCE N26°49'W, a distance of 70 feet, more or less, to a point on the Southerly right-of-way line of U. S. Highway 89; THENCE N63°1 1'E, along said Southerly right-of-way line a distance of 100 feet, more or less, to the point of beginning. Together with and including all improvements thereon and all appurtenances and hereditaments thereunto belonging. Subject to all covenants, conditions, restrictions, easements, reservations, rights and rights-of-way of sight and/or record. 6. Both parties have the duty as constructive trustees to transfer their interest in the real property to the Corporation. The Corporation is entitled to Judgement declaring it to be the owner of the above described real property subject to the terms and conditions of the Real Estate Purchase Agreement with Richard and Kathy Jenkins as Sellers. 7. "Corporate officers and directors have fundamental duty of loyalty and fiduciary responsibility to the corporation they manage." JBar H, Inc. v. Johnson, 822 P2d 849, 859 (Wyo. 1991). Included in this fiduciary duty is the duty not to use corporate funds or assets for personal gain unless consideration is given for it and payment is authorized by the directors. 8. Wyoming law requires a director or officer to discharge his duties in good faith, with the care of an ordinary, prudent person, and in a manner not opposed to the best interest of the corporation. W.S. §17-16-830(a) and 842(a) (1977). The director or officer in determining what is in the best interest of the corporation must not put his self interest above the 15 Ui3'7~4~3a 860 interest of the corporation. W. S. §17-16-830 (e) and 842(e). 9. If a director has a conflict of interest in any transaction, i.e. a conflict between his interest and the interest of the corporation, the transaction is voidable unless the material facts of the transaction and the directors are disclosed or known by the board of directors and the board of directors or shareholders approve the transaction and the transaction was fair to the corporation. W. S. § 17-16-831(a). A transaction involving a conflict of interest may not be authorized by a single director or less than a majority of directors. W. S. § 17-16-831(c). The corporation may not loan money to a director unless approved by a majority of shareholders or directors. W.S. 17-16-832. 10. The Thirty Thousand Five Hundred Dollars ($30,500.00) Promissory Note from the Corporation to the Joan Reed Trust was the product of action taken by a majority of directors who had knowledge of all material facts and it meets the standards set forth in the W. S. 17-16-1831 (a) and W.S. 17-16-1832 (1977). 11. A shareholder may bring an action independent of approval or action by the board of directors, for dissolution on any one of the following grounds: (a) The directors are deadlocked in the management of the corporate affairs, the shareholders are unable to break the dead lock and irreparable injury to the corporation is threatened or being suffered and the affairs of the corporation can no longer be conducted to the advantage of the shareholders because of the deadlock; (b) The directors or those in control have acted, are acting or will act in a manner that is illegal, oppressive or fraudulent; 16 V u~°°r24:~J 861 gay (c) The shareholders are deadlocked in voting power and have failed for a period of at least two (2) consecutive annual meetings to elect successors to directors whose terms have expired. W.S. 17-16-1430; 1433 -12. The Court may appoint a receiver or custodian pendite lite with all powers and duties the Court directs. W. S. §17-16-1431(c). This Court has made such an order on March 25, 1997, appointing Richard Brough as receiver of the assets of the Corporation. 13. Because this is an action to dissolve the Corporation and to redress wrongs alleged to have been committed to the Corporation, the Corporation is a necessary party to this proceeding and have been joined as a party. Rule 19 W.R.C.P. The Corporation could not bring an action in its own right because the shareholders and directors are deadlocked. "Whenever a corporation, either actually or virtually, refuses to institute or prosecute a right of action accruing to it, then in order to prevent a failure of justice, equity will permit a suit to be brought and maintained by a stockholder or stockholders, substituting them to the corporation's right of action." 19 AmJur 2d "Corporations" §2251. Goodwin v. Castleton, 144 P2d 725 (Wash. 1944). (The privilege which is accorded a single stockholder of suing on behalf of the corporation is simply the process of setting in motion the judicial machinery to prevent a failure of justice.) 14. The Reeds have also brought an action for declaratory relief under the Declaratory Judgements Act (W. S. §1-37-101 et seq.) to determine the factual and legal issues surrounding this controversy. They are interested parties as defined in W.S. §1-37-103 entitled to bring,such an action. This action is particularly appropriate because it enables the Court to determine the rights and duties of fiduciaries such as directors of a corporation (W.S. §1-37- 1015), to construe contracts (W. S. §1-37-104) and to terminate controversy or remove 17 08'724:35 862 ~a_ .s uncertainty (W. S. §1-37-107). The Court has authority to grant supplemental relief in the matters decided. W.S. §1-37-110. 15. This Court may, under the Declaratory Judgements Act, quiet title to real estate in the name of Greys River Enterprises, Inc., the party which ought to have title. Mead v Brown 549 P2d 312 (Wyo. 1976). W.S. §1-37-114 (1977). IT IS THEREFORE ORDERED, ADJUDGED AND DECREED: 1. That judgement be and hereby is entered in favor of Greys River Enterprises, Inc. and against R. Byron Baker and Rose Kenworthy Baker, jointly and severally, in the sum of Twenty Four Thousand Three Hundred Twenty Dollars and Seventy-six Cents ($24,320.76). This judgement shall bear interest at ten percent (10%) per annum until satisfied. 2. That Richard Brough, the receiver approved by this Court, shall proceed with dissolution of the Corporation as set forth in W. S. §17-16-1430 et seq. (1977), and in addition to the duties set forth in the Order of this Court dated April 14, 1997, shall do the following: a. Collect all assets and accounts receivable of Greys River Enterprises, Inc. Provided however, that the Receiver may defer collecting the Twenty Four Thousand Three Hundred Twenty Dollars and Seventy-six Cents ($24,320.76) owed by the Bakers and credit that amount against the Bakers' share as hereinafter provided. b. Sell the real property hereinabove described and other assets of Greys River Enterprises, Inc. 18 M M o872435 86.3 1,96 C. Subject to prior approval of this Court, pay all debts of the Corporation including the fees and costs of the receiver and the remaining balance due under the $30,500.00 Promissory Note to the Joan Reed Trust. d. After the property and assets have been sold and all accounts receivable collected, the receiver shall distribute the proceeds as follows: (1) Pay the balance due the Sellers under the Real Estate Purchase Agreement with Richard and Cathy Jenkins, unless under the terms of the sale the purchaser has agreed to assume that indebtedness and the Sellers have agreed to allow such assumption. (2) Pay all other debts of the Corporation in the following order: (a) Costs and expense of the receivership which will be approved by this Court prior to payment. (b) All other debts and claims of third parties. (c) The balance due under the $30,500.00 Promissory Note payable to the Joan Reed Trust. (3) Distribute the remaining balance, 25% each, to the shareholders of the Corporation after having taken into account the amount of the Judgement of the Corporation against the Bakers, unless the Bakers have previously satisfied the judgement, as follows: 19 I ob,?Z4 3J 8 6 4 l 64 17 (a) Total Assets for Distribution = (funds derived from sale of assets) - (amounts paid to satisfy debts of the Corporation) + ($24,320.76 plus accrued interest due from Bakers) (b) Reeds' Share of Total Assets for Distribution = 50% (25% to Robert Reed and 25% to Joan Reed) x Total Assets for Distribution. (c) Bakers' Share of Total Assets for Distribution = 50% (25% to R. Byron Baker and 25% to Rosemary K. Baker) x Total Assets for Distribution - $24,320.76 plus accrued interest due from Baker. (If the Bakers have not previously satisfied this claim). 3. Greys River Enterprises, Inc., is the holder of title to the following described property subject to the interest of the Seller, Richard and Cathy Jenkins of Alpine, Wyoming: Lot 608-C, LAKEVIEW ESTATES SUBDIVISION, Lincoln County, Wyoming as said lot is laid down and described on the official plat of said addition duly recorded in the Office of the County Clerk and Ex-Officio Register of Deeds of Lincoln County, Wyoming and that portion of Lot 651-C in said Lakeview Estates Subdivision and described as follows: BEGINNING at a point on the Northerly boundary line of said Lot 651-C and the Southerly right-of-way line of U. S. Highway 89 from which point of beginning the Northeasterly Corner of said Lot 651-C lies North 63'11'E, a distance of 100 feet; THENCE from said point of beginning, S26°49'E, a distance of 70 feet, more or less, to the Northeasterly Corner of Lot 608-C of said Lakeview Estates Subdivision; THENCE along the Northerly boundary line of Lot 608-C of said Lakeview Estate Subdivision a distance of 100 feet, more or less, to the Northwesterly Corner of said Lot 608-C; THENCE N26°49'W, a distance of 70 feet, more or less, to a point on the Southerly right-of-way line of U. S. Highway 89; THENCE N63°1 1'E, along said Southerly right-of-way line a distance of 100 feet, more or less, to the point of beginning. 20 ~ r ~ 865 oy Together with and including all improvements thereon and all appurtenances and hereditaments thereunto belonging. Subject to all covenants, conditions, restrictions, easements, feservations, rights and rights-of-way of sight and/or record. 4. That the Plaintiffs, Robert Reed and Joan Reed, and the Defendants, Byron Baker and Rose Kenworthy, a/k/a Rose Baker, have no right title interest, claim or demand to the above property and title is quieted in Greys River Enterprise, Inc. 5. That the Plaintiffs, Robert Reed and Joan Reed, shall have judgement against the Defendants, Byron Baker and Rose Kenworthy Baker, for their costs incurred herein. 6. That each Party shall bear the costs of their own attorneys. DATED this /6 day of June, 1997. JOHN D. TROUGHTON t 1 District Judge ~J s • •a. J !r STATE OF WYOMING COUNTY OF LINCOLN I, Kenneth D. Roberts, Clerk of the Third Judicial Di ithin and foresa id counrnd in the Stat of foresaid, do hereby ify the rego ng to e a full, true, omp op . SIGNED . 21 I