Jerry Herling v. Wyoming Machinery Co., a Wyoming Corporation

IN THE SUPREME COURT, STATE OF WYOMING

2013 WY 82

APRIL TERM, A.D. 2013

July 10, 2013

JERRY HERLING,

Appellant
(Defendant),

v.
S-12-0227
WYOMING MACHINERY CO.,
a Wyoming corporation,

Appellee
(Plaintiff).

Appeal from the District Court of Natrona County
The Honorable Catherine E. Wilking, Judge

Representing Appellant:
Carissa D. Mobley and Cameron S. Walker of Schwartz, Bon, Walker & Studer,
LLC, Casper, Wyoming. Argument by Ms. Mobley.

Representing Appellee:
Timothy M. Stubson of Crowley Fleck, PLLP, Casper, Wyoming

Before KITE, C.J., and HILL, VOIGT, BURKE, and DAVIS, JJ.

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third.
Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building,
Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be
made before final publication in the permanent volume.
DAVIS, Justice.

[¶1] This case involves a complicated series of events that have so far led to litigation
in as many as three Wyoming district courts, a jury trial in the United States District
Court for the District of Wyoming, a bankruptcy proceeding in California, and this
appeal. Jerry Herling Construction, Inc. (“JHCI”) contracted with Wyoming Machinery
for rental and service of earthmoving equipment, but defaulted on the payments due
under the agreement. Wyoming Machinery seeks to enforce personal guaranties of
JHCI’s performance against Jerry Herling, JHCI’s CEO. Herling argues that an
assignment of JHCI’s retainage account and a settlement between other parties released
him from his guaranties. We agree with the trial court that Wyoming Machinery was
entitled to judgment against Herling on his guaranties as a matter of law, but we find that
there are genuine issues of material facts as to the correct amount of the judgment, and
we therefore reverse and remand for further proceedings consistent with this opinion.

ISSUES

[¶2] 1. Did JHCI’s assignment of retainage it claimed to be owed by Tetra Tech EC,
Inc. or an oral promise or representation by an employee of Wyoming Machinery release
Jerry Herling from personal guaranties of JHCI’s performance?

2. Did a settlement agreement between Tetra Tech and Wyoming Machinery
release Jerry Herling from personal liability on his guaranties?

3. Were there genuine issues of material fact regarding the proper amount of the
judgment to which Wyoming Machinery was entitled against Mr. Herling?

FACTS

[¶3] In 2007, PacifiCorp began development of three wind turbine farms in Converse
and Carbon counties. PacifiCorp hired Tetra Tech as the project’s general contractor, and
Tetra Tech subcontracted the civil earth moving work to JHCI. Jerry Herling is the CEO
and majority shareholder of JHCI.

[¶4] Herling executed a revolving credit agreement with Wyoming Machinery for the
rental of heavy earthmoving equipment and maintenance services in his capacity as CEO
of JHCI. He also executed a personal guaranty of JHCI’s performance of the rental
agreement. Beginning in February of 2008, Wyoming Machinery rented JHCI
approximately forty-four pieces of heavy machinery under the agreement.

[¶5] JHCI began having difficulties paying its suppliers in June of 2008. Herling
claimed that PacifiCorp significantly accelerated the construction schedule to complete
the wind farm projects by the end of 2008 in order to reap the benefits of federal tax

1
credits which were to expire soon. He contends that this accelerated schedule required
JHCI to provide additional equipment and labor not included in its bid. He argued that
JHCI was unable to make payroll or pay his suppliers because Tetra Tech stopped paying
JHCI for work it had completed. Tetra Tech contended below and in a federal lawsuit
that JHCI was not paid because it failed to properly perform the work required by its
subcontract, and that Tetra Tech therefore properly withheld funds arguably due JHCI
from a retainage account.1

[¶6] Wyoming Machinery threatened to remove its equipment from the jobs when it
was not paid as required by the revolving credit agreement. Jerry Herling then signed a
second personal guaranty which induced Wyoming Machinery to allow him to continue
to use the equipment so that the work required by JHCI’s subcontract could continue.

[¶7] In August of 2008, Tetra Tech learned that JHCI was not paying its suppliers,
which could result in material liens being filed on the real property on which the wind
farms were being built. Tetra Tech approached Wyoming Machinery and offered to pay
some of JHCI’s debt directly by using a two-party check that would draw on funds held
in JHCI’s retainage account in exchange for partial lien waivers from Wyoming
Machinery. Wyoming Machinery supplied Tetra Tech with the requested lien waivers,
but Tetra Tech did not pay anything at that point, later claiming that it had never agreed
to pay any specific amount.

[¶8] Wyoming Machinery then again threatened JHCI with removal of the equipment
unless JHCI assigned its interest in the retainage held by Tetra Tech to it. Jerry Herling
executed the requested assignment as president of JHCI on September 16, 2008. Herling
claims that he was released from his personal guaranties by an oral promise made to
induce him to sign the assignment on behalf of JHCI. The facts concerning this
assignment and its terms will be discussed in detail below.

[¶9] Tetra Tech refused to pay Wyoming Machinery any of the retainage it allegedly
owed JHCI, assignment notwithstanding. Wyoming Machinery then terminated the
revolving credit agreement with JHCI and removed its equipment in early September of
2008. Tetra Tech terminated its subcontract with JHCI and hired a replacement
contractor to finish the excavation work on the wind farm projects. By this time JHCI
owed Wyoming Machinery almost $1.3 million. JHCI claims that approximately $1.5
million remained in its retainage account with Tetra Tech at the time of these events.

1
Retainage is a percentage of what one party to a construction contract owes the other, which is withheld
to assure that all of the work under the contract has been satisfactorily completed and that all mechanic’s
liens have been released or expired. Those funds allow the owner or prime contractor to hire a
replacement contractor or to pay to have liens released when necessary. See A-C Const., Inc. v. Bakke
Corp., 956 P.2d 219, 226 (Or. Ct. App. 1998); 3 Philip L. Bruner & Patrick J. O’Connor, Jr., Bruner &
O’Connor on Construction Law § 8:18 (2002).

2
[¶10] Wyoming Machinery sued JHCI, Tetra Tech, and Jerry Herling in the Seventh
Judicial District in November of 2008. It claimed quantum meruit and breach of contract
against JHCI and Tetra Tech. It claimed that Tetra Tech breached a promise that it would
pay the company from JHCI’s retainage, thus causing it to leave its equipment in place
and to forego remedies it would otherwise have pursued. It also sought to hold Jerry
Herling personally liable on his guaranties of JHCI’s obligations under the revolving
credit agreement.

[¶11] Wyoming Machinery also filed liens on the real property where its rental
equipment had been used. On April 28, 2010, the Natrona County District Court granted
Tetra Tech’s motion for partial summary judgment and dismissed the lien claims, holding
that rental equipment was not “material” within the scope of Wyoming’s material lien
statute, and that the liens were therefore invalid. That determination has not been
appealed.

[¶12] In the meantime, JHCI filed a petition for Chapter 11 bankruptcy relief in the
United States Bankruptcy Court for the Central District of California on April 5, 2010,
and the proceedings against it in this case were stayed. There is no indication that the
claims against JHCI were ever dismissed, and so they are evidently still pending, but do
not appear to have been pursued.

[¶13] After the ruling dismissing the lien claims and the bankruptcy filing, Tetra Tech
and Safeco, which had supplied bonds to obtain release of the liens, entered into a written
settlement agreement with Wyoming Machinery on December 28, 2010. Tetra Tech paid
Wyoming Machinery $500,000 for a stipulated dismissal of claims against it and Safeco.
Herling claims that he was released by this agreement, or in the alternative, that the
$500,000 payment should reduce any judgment against him as guarantor of JHCI’s
obligation to Wyoming Machinery. The settlement agreement will be examined in
greater detail below.

[¶14] Meanwhile, Tetra Tech had sued JHCI and Jerry Herling in the United States
District Court for the District of Wyoming on September 25, 2008, claiming that JHCI
had breached its subcontract. JHCI counterclaimed, alleging a breach of contract by
Tetra Tech. Summary judgment was granted as to some of the personal claims against
Herling, and the rest were dismissed by stipulation, and he therefore ceased to be a party
before that case went to trial between Tetra Tech and JHCI. 2

[¶15] Tetra Tech was ultimately awarded a judgment of approximately $1.4 million on
October 31, 2011, although JHCI was allowed a substantial setoff based upon a theory of

2
Tetra Tech EC, Inc. v. Jerry Herling Construction Inc. & Jerry Herling, an individual, No. CV-08-
00210, Documents 22, 112, and 123, (D. Wyo. Oct. 3, 2011).

3
unjust enrichment.3 As will be discussed below, that case involved a relatively complex
set of claims and counterclaims which may have directly or indirectly determined the
ownership of funds held in JHCI’s retainage account with Tetra Tech.

[¶16] Wyoming Machinery moved for summary judgment against Jerry Herling in this
case on January 31, 2011, about a month after its settlement with Tetra Tech. Herling
responded to the motion and also filed a cross-motion to dismiss, collectively claiming
that he had been released from his guarantee by virtue of the settlement between Tetra
Tech and Wyoming Machinery or the assignment of JHCI’s retainage to Wyoming
Machinery. In a statement of material facts filed with its motion for summary judgment
under Wyoming Rule of Civil Procedure 56.1, Wyoming Machinery indicated that the
undisputed amount of its debt was $884,019.59, plus attorney fees. This would be
approximately what JHCI originally owed Wyoming Machinery, less $500,000.

[¶17] On October 21, 2011, the district court denied Herling’s motion to dismiss based
on the Wyoming Machinery/Tetra Tech settlement, concluding that:

The Defendant Jerry Herling is not a party to the
subject settlement agreement entered into between Wyoming
Machinery Company, Tetra Tech EC, Inc., and Safeco Ins.
Co. of America. Said agreement specifically requires the
Plaintiff to pursue the claims against Defendant Jerry Herling
and did not intend or contemplate Defendant Herling as a
third party beneficiary.

[¶18] At some point, the district judge evidently made an oral ruling that she would
grant Wyoming Machinery’s motion for summary judgment. The date of the hearing at
which that ruling was made is not reflected in the record, and there is no transcript of any
hearing at which the ruling was made.

[¶19] The parties submitted competing written orders to implement the oral decision.
Wyoming Machinery submitted a proposed order which would have awarded it judgment
for $1,383,472.93 on October 31, 2011, the same day the federal court entered judgment
against JHCI in favor of Tetra Tech. Herling objected, claiming that the $500,000 paid
from JHCI’s retainage account should be credited against the amount he had been found
to owe, that Wyoming Machinery had admitted as much in its statement of material facts,
and that the court had made no finding or order as to the amount of the judgment in its

3
The federal court record reflects that some form of relief from the automatic stay was granted by the
California bankruptcy court. Tetra Tech EC, Inc. v. Jerry Herling Construction Inc. & Jerry Herling, an
individual, No. CV-08-2010, Documents 64 and 66 (D. Wyo. Oct. 3, 2011) (minute orders by Hon.
William F. Downes).

4
previous oral ruling. He accordingly submitted an order which would have granted
Wyoming Machinery judgment against him for $883,472.93.4

[¶20] Herling also moved to rejoin Tetra Tech, which had been dismissed as a result of
the settlement. He filed an affidavit of Cameron S. Walker, who had been counsel for
JHCI in the federal case described above. Mr. Walker attested that Tetra Tech had
claimed the $500,000 in the federal case, and submitted an exhibit used at trial by Tetra
Tech’s forensic accountant to establish its damages. That document reflected a claim for
“Wyoming Machinery (Settlement, Nov 2010) $500,000.” Mr. Walker’s affidavit
concluded that part of Tetra Tech’s judgment against JHCI included the $500,000
Wyoming Machinery is attempting to recover from Herling in this case. Herling
contended that Tetra Tech needed to be a party in order to assure that he would not have
to pay what Tetra Tech had already recovered against JHCI on his guaranties.

[¶21] Wyoming Machinery responded that it would be required to repay Tetra Tech up
to $500,000 if it ever succeeded in recovering anything over $884,472.93 from Herling
because of the terms of its settlement agreement. The response did not address the effect,
if any, of the Tetra Tech judgment against JHCI.

[¶22] On December 16, 2011, the district court entered a written order on Wyoming
Machinery’s motion for summary judgment, finding that: (1) Herling’s personal
guaranties were unambiguous; (2) Herling was not a party to JHCI’s assignment of
retainage to Wyoming Machinery; and (3) Herling failed to introduce evidence showing a
genuine issue of material fact on whether the settlement agreement released Herling from
his guaranties. It held that JHCI failed to pay for $1,383,472.93 of equipment and
services supplied by Wyoming Machinery, and entered judgment against Herling in that
amount based on his guaranties. It did not address whether the settlement funds came
from JHCI’s retainage account, the effect of the federal judgment, or what impact either
of those issues might have on the amount owed on the personal guaranties. Herling
withdrew his motion to join Tetra Tech because it had become moot in light of the
judgment against him.

[¶23] As noted above, Wyoming Machinery’s claims against JHCI were stayed but are
evidently still pending. The court entered final judgment against Herling under
Wyoming Rule of Civil Procedure 54(b), which permits final judgment against one party
even when claims against other parties have not been fully adjudicated, thus allowing this
appeal to proceed.

4
The parties were $546.66 apart as to the correct amount of the judgment if Herling is credited for the
$500,000 settlement paid to Wyoming Machinery by Tetra Tech. This relatively minor disparity was not
addressed in this appeal, and both figures are referred to in this opinion as they were by the parties in their
briefing and in the record.

5
 STANDARD OF REVIEW

[¶24] Our standard of review of an order granting summary judgment has been stated
often and is as follows:

We review a summary judgment in the same light as the
district court, using the same materials and following the
same standards. We examine the record from the vantage
point most favorable to the party opposing the motion, and we
give that party the benefit of all favorable inferences that may
fairly be drawn from the record. A material fact is one which,
if proved, would have the effect of establishing or refuting an
essential element of the cause of action or defense asserted by
the parties. If the moving party presents supporting summary
judgment materials demonstrating no genuine issue of
material fact exists, the burden is shifted to the non-moving
party to present appropriate supporting materials posing a
genuine issue of a material fact for trial. We review a grant
of summary judgment deciding a question of law de novo and
afford no deference to the district court’s ruling.

Redland v. Redland, 2012 WY 148, ¶ 47, 288 P.3d 1173, 1185 (Wyo. 2012) (quoting
Lindsey v. Harriet, 2011 WY 80, ¶ 18, 255 P.3d 873, 880 (Wyo. 2011)) (citations
omitted).

[¶25] Although one of the issues before us was raised by a pleading styled as a motion to
dismiss, it is apparent from the record that it was in substance a cross-motion for
summary judgment, and that it was treated as such by the parties and the district court.
We will not therefore discuss the standard of review for motions to dismiss.

DISCUSSION

[¶26] Releases, assignments, and settlement agreements are all types of contracts5
subject to our usual rules of contractual interpretation:

5
See Hall v. Perry, 2009 WY 83, ¶ 9, 211 P.3d 489, 493 (Wyo. 2009) (“Releases and exculpatory clauses
are types of contracts.”) (citing Massengill v. S.M.A.R.T. Sports Medicine Clinic, P.C., 996 P.2d 1132,
1135 (Wyo. 2000); Kelliher v. Herman, 701 P.2d 1157, 1159 (Wyo. 1985)); In re Estate of Maycock,
2001 WY 103, ¶ 10, 33 P.3d 1114, 1117 (Wyo. 2001) (“A settlement agreement is a contract and,
therefore, subject to the same legal principles that apply to any contract.”) (citing Matter of Estate of
McCormick, 926 P.2d 360, 362 (Wyo. 1996)); Boley v. Greenough, 2001 WY 47, ¶ 11, 22 P.3d 854, 858
(Wyo. 2001) (“Assignments are contracts and are construed according to the rules of contract
interpretation.”) (citing Wolter v. Equitable Resources Energy Co., W. Region, 979 P.2d 948, 951 (Wyo.
1999)).

6
 The primary focus is on determining the intent of the parties
to the contract. The initial question is whether the language of
the contract is clear and unambiguous. If it is, then the trial
court determines the parties’ intent from the contract
language alone. It does not consider extrinsic evidence,
although it may consider the context in which the contract
was written, including the subject matter, the purpose of the
contract, and the circumstances surrounding its making, all to
help ascertain what the parties intended when they made the
contract. The trial court then enforces the contract in
accordance with the plain meaning its language would be
given by a reasonable person. All of these issues–deciding
whether a contract is unambiguous, determining the parties’
intent from the unambiguous language, and enforcing the
contract in accordance with its plain meaning–involve
questions of law for the trial court. When we undertake de
novo review of the trial court’s conclusions of law, we follow
the same familiar path.

Knight v. TCB Const. & Design, LLC, 2011 WY 27, ¶ 7, 248 P.3d 178, 181 (Wyo. 2011)
(quoting Terris v. Kimmel, 2010 WY 110, ¶ 7, 236 P.3d 1022, 1025 (Wyo. 2010))
(citation omitted).

I. Assignment of Retainage

[¶27] Herling resisted Wyoming Machinery’s motion for summary judgment by
asserting that JHCI’s assignment of retainage released him from his personal guaranties,
an assertion which was supported by the assignment, his affidavit, and an excerpt of his
deposition testimony. JHCI’s retainage assignment provided as follows:

RECITALS:

. . .

B. Jerry Herling Construction, Inc. has an outstanding
balance owed to Wyoming Machinery Company in the
amount of $1,383,472.93 as of September 13, 2008 . . . .

C. Tetra Tech EC, Inc. is in possession of certain funds owed
to Jerry Herling Construction, Inc. within the retainage
account of Tetra Tech EC, Inc.

7
D. In connection therewith, Jerry Herling Construction, Inc.
desires to transfer and assign to Wyoming Machinery
Company, and Wyoming Machinery Company desires to
acquire, all of Jerry Herling Construction, Inc.’s right, title
and interest in and to any and all retainage funds and other
tangible and intangible asserts arising out of the relationship
between Jerry Herling Construction, Inc. and Tetra Tech EC,
Inc., up to an amount sufficient to pay the entire balanced
[sic] owed on Account No. [].

NOW, THEREFORE, for Ten and no/100 Dollars
($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Jerry Herling Construction, Inc. and Wyoming Machinery
Company hereby agree as follows:

AGREEMENT:

1. Assignment. Jerry Herling Construction, Inc. hereby
grants, transfers, assigns and sets over to Wyoming
Machinery Company all of Jerry Herling Construction, Inc.’s
right, title and interest in and to any funds held on its behalf
in the Tetra Tech EC, Inc. retainage account and any and all
tangible and intangible assets arising out of the relationship
between Jerry Herling Construction, Inc. and Tetra Tech EC,
Inc. (the “Assigned Property”) up to an amount sufficient to
pay the entire balanced [sic] owed now or in the future on
Account No. [].
. . .

3. Jerry Herling Construction, Inc. understands that this
assignment in and of itself is not a payment of any amounts
owed on Account No. [] and that only receipt of actual funds
from Tetra Tech EC, Inc. or Jerry Herling Construction, Inc.
will be considered a payment on Account No. []. Jerry
Herling Construction, Inc. continues to be liable for all unpaid
balances on Account No. [] and Wyoming Machinery
Company retains the right to pursue Jerry Herling
Construction, Inc. for the same. Wyoming Machinery
Company has the right, but not the obligation, to pursue Tetra
Tech EC, Inc. for recover[y] of the Assigned Property.
. . .

8
[¶28] Herling claims that his execution of JHCI’s assignment of its interest in the
retainage funds operated as a release of his personal guaranties. He acknowledges that
the plain language of the assignment did not release JHCI, but contends that its silence
with regard to releasing him personally means that he was in fact released. He also
claims that his purported release from his guaranties was the consideration for him to
agree to the assignment on JHCI’s behalf. He argues that this defense is also supported
by representations by a managerial employee of Wyoming Machinery, who he claims
told him that he would not be sued on his guaranties if JHCI assigned its interest in the
retainage.

[¶29] Herling filed an affidavit which stated as follows:

2. Wyoming Machinery Company (“WMC”), through its
employees and representatives, agreed that it would release
me from liability on my personal guarantee if I caused JHCI
to assign its retention under the Tetra Tech contracts.

3. JHCI assigned to WMC its retention under the Tetra
Tech contracts in exchange for that release from my personal
guarantee for the debts of JHCI. I relied upon such
representation by WMC and its representatives in causing the
assignment to be made.

[¶30] We have often stated that conclusory statements are insufficient to generate a
genuine issue of material fact. Creel v. L & L, Inc., 2012 WY 124, ¶ 50, 287 P.3d 729,
744 (Wyo. 2012) (citing Boehm v. Cody Country Chamber of Commerce, 748 P.2d 704,
710 (Wyo. 1987)). Herling’s affidavit is clearly conclusory–it does not identify the
employees who are claimed to have agreed to release him personally or the terms of the
agreement. It reflects what he claims was his motivation or understanding, but it does not
set forth specific facts which would support the conclusions asserted. The affidavit is
insufficient to generate a genuine issue of material fact.

[¶31] Herling’s deposition testimony about the conversation is somewhat more specific:

Q: Okay. At some point did you talk with Wyoming
Machinery about assigning your interest to the retainage –

A: Yes.

Q: – on the project? Tell me about those conversations.

A: Well, I was – I was trying to help Wyoming Machinery,
working directly with Arik [Arik Christensen, Wyoming

9
 Machinery’s Credit and Collections Manager], to try to get
his money. And – and, you know, I actually – I actually
called them up and asked, “Hey, you know, we” – you know,
“What are we going to do here?” you know.
And he – he said that his attorney was working on
something and to come over to his office.
So I went over to his office and he had this
Assignment of – of Retention. And I kind of asked, “Well,
what’s this?”
He goes, “Well, lien rights are really kind of” – “you
know, kind of” – “kind of rough in Wyoming, and this is a
way for him to get his money.”
I said, Well, you know” – “you know, I don’t want to
get sued. I don’t want my company to get sued; I don’t want
to get sued personally. I don’t want any of that.”
And he – and his attorney – the attorney was a – it was
a lady I was talking to, I believe, that was on the phone at that
– she was on the phone.
And I wanted an explanation of this. I said, “Well, I
don’t want to be sued.”
And it’s like, “Well, if you sign this Assignment of
Retention, you won’t be sued.” And I signed that – that
Assignment of Retention.

Q: Who made that statement? Was it the attorney or was it
Arik?

A: I – I believe it was Arik. I believe it was this – “You sign
this” – This is a way so we don’t have to sue you,” assigning
the – the – the retention, which it was almost $2 million in
retention in there, and it would have covered his bill
sufficiently.

[¶32] Herling argues that he raised genuine issues of material fact as to whether he was
released from his guaranties based on the language of the assignment when viewed in
conjunction with the above testimony, and that the district court therefore erred in
entering summary judgment for Wyoming Machinery.

[¶33] We must first determine whether the assignment was ambiguous. “An ambiguous
contract is an agreement which is obscure in its meaning because of indefiniteness of
expression or because of a double meaning being present.” Farr v. Link, 746 P.2d 431,
433 (Wyo. 1987) (citing E & E Mining, Inc. v. Flying “D” Group, Inc., 718 P.2d 58
(Wyo. 1986)). JHCI assigned Wyoming Machinery its interest in retainage funds held by

10
Tetra Tech up to the amount JHCI owed to Wyoming Machinery. JHCI also agreed that
the assignment did not constitute payment of any amounts owed on the account, and that
only receipt of actual funds from Tetra Tech would constitute a payment on JHCI’S
account. No payments were ever made as a result of the assignment.

[¶34] Herling was not a party to the assignment; he executed it on behalf of JHCI. The
assignment is neither ambiguous nor obscure, and the material facts surrounding its
execution are undisputed.

[¶35] When there is no ambiguity in a written agreement, we determine the parties’
intent from the language of the contract alone. See Knight, ¶ 7, 248 P.3d at 181; In re
Mark E. Dowell Irrevocable Trust # 1, 2012 WY 154, ¶ 18, 290 P.3d 357, 361 (Wyo.
2012). (“[A] court should not resort to extrinsic or parol evidence or rules of contract
construction to avoid or enlarge the clearly expressed intent of the parties.”) (citation
omitted). Also, “where the contract is entirely silent as to a particular matter, the courts
will exercise great caution not to include in the contract, by construction, something
which was intended to be excluded.” N. Ohio Traction & Light Co. v. State of Ohio ex
rel. Pontius, 245 U.S. 574, 590, 38 S. Ct. 196, 201, 62 L. Ed. 481 (1918) (Clarke, J.,
dissenting) (quoting E. Ohio Gas Co. v. City of Akron, 90 N.E. 40 (Ohio 1909)). “Mere
silence as to [a] claim cannot be construed to constitute a release thereof.” City Nat’l
Bank of Huron, S.D., v. Fuller, 52 F.2d 870, 877 (8th Cir. 1931).

[¶36] The assignment does not by its clear terms release Herling from his guaranties. If
the parties to the assignment had intended to release Herling from his personal guaranties,
language to accomplish that end could easily have been included.

[¶37] We have held that a court may “confirm its understanding of otherwise seemingly
unambiguous language by reviewing evidence which, although extrinsic to the contract,
complements that language by clarifying the context in which the agreement was drawn.”
Mark E. Dowell Irrevocable Trust, ¶ 18, 290 P.3d at 361 (citing Knight, ¶ 7, 248 P.3d at
181). Herling’s testimony, even when viewed in the light most favorable to him as it
must be on a motion for summary judgment, does not raise a genuine issue of material
fact as to the meaning of the release itself. It is apparent from the excerpt quoted above
that the term “you” was never defined, and that the word was as probably used to refer to
JHCI as to Herling personally, although Herling also claims to have spoken of avoiding a
personal lawsuit.

[¶38] Beyond that, the testimony does not suggest that the Wyoming Machinery
representative told Herling that the company would release him from his personal
guaranties–he only indicated that Herling would not be sued, without specifying a time
frame. Finally, as already noted, the assignment itself does not release JHCI from its
contractual obligations, although JHCI would be credited for payments by Tetra Tech if
any were made under the assignment. The testimony suggests no reasonable explanation

11
for Wyoming Machinery to decline to release JHCI while releasing Herling, an evidently
solvent guarantor.

[¶39] Moreover, there is no indication in the record that Herling is unable to read or that
the contents of the assignment were misrepresented to him. We have held that a person
signing a document is presumed to have read and understood its contents:

The rule is that the one who signs a paper, without reading it,
if he is able to read and understand, is guilty of such
negligence in failing to inform himself of its nature that he
cannot be relieved from the obligation contained in the paper
thus signed, unless there was something more than mere
reliance upon the statements of another as to its contents . . . .

Laird v. Laird, 597 P.2d 463, 467 (Wyo. 1979) (quoting Sanger v. Yellow Cab Co., Inc.,
486 S.W.2d 477, 481 (Mo. 1972)). This is especially true where, as in this case, both
parties to a commercial contract are “sophisticated business people . . . [who] have a duty
to read the contract carefully.” See Cara’s Notions, Inc. v. Hallmark Cards, Inc., 140
F.3d 566, 571 (4th Cir. 1998). Herling was the CEO of companies with several decades
of excavating experience, including approximately one hundred wind farm projects.

[¶40] The district court correctly analyzed the record and properly held that there were
no genuine issues of material fact and that the assignment did not release Herling from
his guaranties as a matter of law. See Sturman v. First Nat’l Bank, 729 P.2d 667, 677
(Wyo. 1986) (“Summary judgment is proper where the language of an agreement is plain
and unambiguous.”); 11 James Wm. Moore et al., Moore’s Federal Practice §
56.25[1][a] (3d ed. 2011) (summary judgment is particularly appropriate where a claim or
defense is predicated on the interpretation of an unambiguous contract).

II. Waiver, Promissory Estoppel, and Accord and Satisfaction

[¶41] Herling also claims that the oral statements of the Wyoming Machinery
representative released him from his guarantee by virtue of the doctrines of waiver,
promissory estoppel, and accord and satisfaction in support of his arguments. He refers
us only to the basic “black-letter law” of those doctrines, and does not attempt to relate
the applicable law to the facts of his case. In a similar case, we observed as follows:

An appellant is required to present this court with relevant
authority and cogent argument. It is not enough to identify a
potential issue with the expectation that this court will flesh
out the matter from there. The appellant, at a minimum, must
attempt to relate the rule of law he depends upon to the facts
of his case.

12
Elder v. Jones, 608 P.2d 654, 660 (Wyo. 1980); see also W.R.A.P. 7.01(f)(1) (requiring
an appellant’s brief to set forth the “[a]ppellant’s contentions with respect to the issues
presented”); BB v. RSR, 2007 WY 4, ¶ 16, 149 P.3d 727, 734 (Wyo. 2007) (“Mother’s
vague assertions unsupported by citation to the record do not comply with the
requirements of W.R.A.P. 7.01(f)(1) and, therefore, we need not consider her
contention.”); Dechert v. Christopulos, 604 P.2d 1039, 1045 (Wyo. 1980) (“An argument
which is not briefed according to our rules of appellate procedure will not be
considered.”).

[¶42] Although we would be justified in moving on to other issues after this limited
analysis, we will comment briefly on the merits for the sake of completeness. “[T]he
elements of waiver are (a) existing right; (b) knowledge of that right; and (c) intent to
surrender or relinquish it.” Ramirez v. Metropolitan Life Ins. Co., 580 P.2d 1136, 1138
(Wyo. 1978). Nothing in Herling’s deposition testimony suggests any intent on the part
of Wyoming Machinery to release him from his guaranties, and the express language of
the assignment demonstrates that although Wyoming Machinery would credit JHCI for
any funds actually paid out of retainage, the assignment itself was not a release.

[¶43] The elements of promissory estoppel are:

(1) the existence of a clear and definite promise which the
promisor should reasonably expect to induce action by the
promisee; (2) proof that the promisee acted to its detriment in
reasonable reliance on the promise; and (3) a finding that
injustice can be avoided only if the court enforces the
promise.

Redland, ¶ 91, 288 P.3d at 1194 (quoting Parkhurst v. Boykin, 2004 WY 90, ¶ 21, 94
P.3d 450, 460 (Wyo. 2004)).

[¶44] The record raises no genuine issue of material fact with regard to any of the
elements of promissory estoppel. There was no “clear and definite promise” to release
Herling from his guarantee. There is no proof that Herling acted to his detriment–in fact,
the assignment kept Wyoming Machinery from withdrawing its equipment for a short
time, benefiting JHCI and probably Herling as well. Finally, it is impossible to find that
any injustice was done to Herling, as he gave up nothing by executing the assignment on
behalf of JHCI. Tetra Tech refused to honor it, meaning that JHCI’s retainage remained
its possession.

13
[¶45] Finally, the elements of a common law accord and satisfaction6 are:

(1) that a bona fide dispute existed as to the amount owed that
was based on mutual good faith; (2) that the debtor tendered
an amount to the creditor with the intent that payment would
be in total satisfaction of the debt; and (3) that the creditor
agreed to accept the payment in full satisfaction of the debt.

Acierno v. Worthy Bros. Pipeline Corp., 693 A.2d 1066, 1068 (Del. 1997) (footnote
omitted). There are no genuine issues of material fact as to any of these elements. The
amount JHCI owed Wyoming Machinery was not disputed, and neither was the validity
of Herling’s guaranties. The assignment was clear that it did not operate as a release of
any obligation except to the extent that funds were paid to Wyoming Machinery.

[¶46] For these reasons, we conclude that there were no genuine issues of material fact
as to Herling’s assertion of the defenses of waiver, promissory estoppel, and accord and
satisfaction, and Wyoming Machinery was entitled to judgment as a matter of law, as the
district court held.

III. Settlement Agreement

[¶47] Herling also contends that the settlement between Tetra Tech and Wyoming
Machinery released him from all claims on his personal guaranties. This is a different
argument than his claim that the $500,000 paid by Tetra Tech should reduce the
judgment against him by that amount.

[¶48] The procedural presentation of the defense analyzed in this portion of the opinion
is somewhat confusing and warrants some clarification. Herling moved to dismiss
Wyoming Machinery’s complaint based on the settlement agreement between Tetra Tech
and Wyoming Machinery, attaching a copy of the agreement to the motion. It is unclear
what category of Wyoming Rule of Civil Procedure 12(b) Herling was attempting to rely
upon, and none of the categories include the grounds stated in the motion. It is clear,
however, that the motion relied on matters outside the pleadings (the settlement
agreement), and so it should have been treated as a motion for summary judgment.
W.R.C.P. 56(b). We believe that it was in fact so treated by the parties and the district
court, and we will therefore address it as a cross-motion for summary judgment. See Alm
v. Sowell, 899 P.2d 888, 890–91 (Wyo. 1995) (holding that a motion to dismiss was
properly converted to a motion for summary judgment because the plaintiff received
ample notice of the conversion and raised no objections).

6
For the law governing accord and satisfaction by the use of an instrument, see generally Wyo. Stat. Ann.
§ 34.1-3-311 (LexisNexis 2011).

14
[¶49] An order denying a motion for summary judgment is interlocutory and not
generally appealable. McLean v. Hyland Enterprises, Inc., 2001 WY 111, ¶ 17, 34 P.3d
1262, 1267 (Wyo. 2001). However, denial of a motion for summary judgment is
appealable if it is coupled with a grant of a motion for summary judgment, as is the case
here. Id.; Lieberman v. Wyoming.com LLC, 11 P.3d 353, 356 (Wyo. 2000). We may
therefore properly review the district court’s denial of Herling’s motion in this appeal.

[¶50] The settlement agreement between Tetra Tech, Safeco, and Wyoming Machinery
provided as follows:

RECITALS:
. . .

10. Through this Agreement, the Parties wish to:

a. Resolve any and all disputes between them regarding
payment for Wyoming Machinery’s equipment, services,
parts or transportation costs relating to the Projects, and any
claims Wyoming Machinery may otherwise assert against the
Projects;

b. Dismiss all claims against Tetra Tech and Safeco in the
Natrona Lawsuit;
. . .

d. Assign from Wyoming Machinery to Tetra Tech a portion
of JHCI’s debt and Herling’s guarantee of that debt to
Wyoming Machinery, in a portion equivalent to the
consideration paid by Tetra Tech under this Agreement;

e. Obtain Wyoming Machinery’s covenant not to sue or assert
any claim against Tetra Tech relating to the Assignment
executed by JHCI on or about September 16, 2008, along
with related representations and agreements; and,
. . .

AGREEMENT
. . .

11. In exchange for the executed documents required by
this Agreement, Tetra Tech shall pay Wyoming Machinery,
through a regular company check, the amount of $500,000.00
(the “Settlement Amount”). The Settlement Amount reflects

15
full and final payment of all funds due Wyoming Machinery
for its equipment, services, parts or transportation costs
relating to the Projects.

12. In exchange for the Settlement Amount, Wyoming
Machinery, through its counsel or other fully authorized
officer, shall execute and deliver to Tetra Tech’s counsel, the
following documents which are incorporated in this
Agreement by reference:
. . .

e. Wyoming Machinery’s Partial Assignment of Claim
Against JHCI and Jerry Herling, in the form attached as
Exhibit E.
. . .

14. Wyoming Machinery, for itself and its successors and
assigns, hereby covenants not to sue Tetra Tech, and waives
and releases any and all claims against Tetra Tech, related to
the “Assignment of Interest” executed by Jerry Herling
Construction on September 16, 2008 . . . .
. . .

15. With respect to the Natrona Lawsuit, Wyoming
Machinery hereby agrees as follows:

i. Wyoming Machinery shall not dismiss, waive,
compromise or settle any claim asserted or judgment obtained
against Jerry Herling in the Natrona Lawsuit without giving
Tetra Tech 15 days advance notice of Wyoming Machinery’s
intent to do so and the terms of any such dismissal, waiver,
compromise or settlement.

ii. Wyoming Machinery shall pay to Tetra Tech all
amounts paid by or on behalf of Jerry Herling to Wyoming
Machinery as a result of any settlement or judgment in the
Natrona Lawsuit to the extent those payments exceed the
amount of any judgment entered in favor of Wyoming
Machinery against Jerry Herling less the amount paid by
Tetra Tech to Wyoming Machinery under this Agreement. In
the event Wyoming Machinery reaches a settlement with
Jerry Herling, Wyoming Machinery and Tetra Tech agree to
negotiate an agreed-upon amount of Wyoming Machinery’s

16
 claim, and to engage in binding mediation of such amount, if
unable to agree.

iii. Wyoming Machinery agrees to file a motion for
summary judgment on its claims against Jerry Herling in the
Natrona Lawsuit on or before February 1, 2011.
. . .

[¶51] Herling claims that the settlement agreement released both JHCI’s liability and his
personal guaranties as a matter of law. He acknowledges that neither he nor JHCI were
parties to the settlement agreement. However, he relies upon paragraph 11 of the
agreement, which states that the settlement amount reflects full and final payment of all
funds due Wyoming Machinery, and the fact that the agreement requires an assignment
of part of Wyoming Machinery’s claim against JHCI and Herling to Tetra Tech. He
contends that the district court therefore erred when it found that he was not released
from his guaranties. 7

[¶52] Like the assignment discussed above, we review the settlement agreement
according to our usual principles of contract interpretation. A “cardinal principle” in our
review of contracts is that “a document should be read to give effect to all its provisions
and to render them consistent with each other.” Mastrobuono v. Shearson Lehman
Hutton, Inc., 514 U.S. 52, 63, 115 S. Ct. 1212, 1219, 131 L. Ed. 2d 76 (1995) (citation
omitted). We presume that “each particular provision is placed in a contract for a
purpose,” and “therefore avoid constructions which would render a provision
meaningless.” Treemont, Inc. v. Hawley, 886 P.2d 589, 594 (Wyo. 1994) (citation
omitted). Herling urges us to read the assignment provision of the settlement agreement
as a complete release of his obligations, contending that “[t]he debt and the guarantee
[sic] no longer belonged to Wyoming Machinery. Finding any other way would make a
number of the provisions in the settlement agreement meaningless.”

[¶53] Wyoming Machinery only agreed to a dismissal of all claims against Tetra Tech
and Safeco. It did not agree to release its claims against Jerry Herling and JHCI. In fact,
the settlement agreement specifically required Wyoming Machinery to pursue its claims
against Herling and not to settle them without advance notice to Tetra Tech. Read in
context, the phrase “full and final payment of all funds due Wyoming Machinery for its
equipment, services, parts or transportation costs relating to the Projects” clearly refers to

7
Herling does not challenge the district court’s finding that he was not a third-party beneficiary of the
agreement, and we therefore decline to consider that aspect of the court’s ruling. See Ferrell v. Knighten,
2013 WY 37, ¶ 12, 298 P.3d 161, 163 (Wyo. 2013) (“Since Ultra failed in its opening brief to designate
or argue the issue of the propriety of the holding by the district court that it contractually waived its right
to seek judicial review of the arbitration award, the holding is uncontested.” (quoting Ultra Resources,
Inc. v. McMurry Energy Co., 2004 WY 121, ¶ 13, 99 P.3d 959, 964 (Wyo. 2004))).

17
all funds due Wyoming Machinery from Tetra Tech, not all funds due Wyoming
Machinery from JHCI or Herling.

[¶54] In addition, Wyoming Machinery only agreed to assign $500,000 of its claim to
Tetra Tech, making the assignment partial. Whether the assignor of part of a claim may
pursue the entire claim is a question discussed below. The clear language of the
settlement agreement left Wyoming Machinery with a claim of at least $884,019.59.

[¶55] The construction urged by Herling would render portions of the agreement
meaningless and nonsensical. Herling argues, in effect, that Wyoming Machinery
intended to settle its claim of approximately $1.38 million for only $500,000, and to give
up its right to recover from him when he was not even a party to that agreement. There
were no genuine issues of material fact, and the clear language of the agreement did not
release Herling from his obligations under the guaranties as a matter of law, as the district
court concluded.

IV. Amount of the Judgment

[¶56] Herling contends that Wyoming Machinery’s statement of material facts on
summary judgment demonstrates that it credited his account for Tetra Tech’s $500,000
settlement payment at some point. Herling also claims that the $1,383,472.93 judgment
amounts to double recovery because Tetra Tech paid $500,000 to settle with Wyoming
Machinery and he was not credited for that payment even though the funds were taken
from JHCI’s retainage account. He further contends that Tetra Tech recovered a
judgment for the $500,000 settlement payment in the separate federal case against JHCI,
and that Wyoming Machinery’s recovery of a judgment for that amount in this case
would be a double recovery. He argues that there were genuine issues of material fact
regarding the correct amount of the judgment, and that it was therefore error for the
district court to enter judgment against him for the full $1,383,472.93.

[¶57] Wyoming Machinery claims that the settlement with Tetra Tech only resolved its
claim that Tetra Tech induced it to provide lien waivers and then refused to pay the funds
promised, wrongfully causing Wyoming Machinery to forego actions and remedies it
might otherwise have pursued. It is, of course, difficult to understand why Wyoming
Machinery would partially assign its claim against JHCI and be obligated to repay Tetra
Tech if it collected more than the amount it was owed less $500,000 if the settlement was
in fact of an entirely unrelated claim.

A. Procedural Issues

[¶58] The record on this issue presents two complications beyond those addressed by the
parties in their briefing. First of all, as just noted, the settlement agreement provided that
Wyoming Machinery would complete a partial assignment of its claim against JHCI and

18
Herling to Tetra Tech on a document which was attached to the agreement as Exhibit E.
Exhibit E is not in the record in either an executed or unexecuted form.

[¶59] If in fact Wyoming Machinery assigned part of its claim against Herling to Tetra
Tech, then obviously that portion of the claim belonged to Tetra Tech and not to
Wyoming Machinery, even though the agreement required Wyoming Machinery to
attempt to collect the $500,000 Tetra Tech had paid and reimburse it to the extent it was
successful in recovering more than the $884,019.59 it claimed it was still owed.
However, nothing in the settlement agreement prohibited Tetra Tech from using its
assignment to try to collect directly from Herling itself. There were therefore two parties
who could have pursued collection against Herling simultaneously because of the partial
assignment.

[¶60] The general rule regarding collection on partial assignments is set forth in 6 Am.
Jur. 2d Assignments § 143 (2008):

§ 143. Partial assignments

If an assignment of a debt is only partial, it cannot be
enforced against the debtor without his or her consent or the
joinder in an equitable proceeding of all persons entitled to
the various parts of the total debt. Thus, when either the
assignor or assignee has sued alone for his or her part of the
claim, the defendant may insist that the rule against splitting
the cause of action be applied by moving that the owner of
the other part of the claim be made a party.

See also Miller v. Dannie Gilder, Inc., 966 S.W.2d 397, 399 (Mo. Ct. App. 1998);
Louisville & N. R. Co. v. Mack Mfg. Corp., 269 S.W.2d 707, 709 (Ky. 1954);
Restatement (Second) of Judgments § 49 cmt. b (1982).

[¶61] Some of the complexities this appeal presents might have been avoided if Herling
had sought joinder of all owners of the claim against him in this case. However, although
Wyoming Machinery originally sued for the entire amount of its claim, it then received
$500,000 in settlement from Tetra Tech. After that, when it moved for summary
judgment, Wyoming Machinery’s statement of undisputed facts indicated that it sought to
recover $884,019.59, not the full $1,383,472.93 it had originally claimed. This may have
been the result of error or inadvertence, but it is not surprising that Herling did not
attempt to join Tetra Tech to avoid a double recovery at that point, because it would have
appeared to him that Wyoming Machinery only sought to recover the unassigned portion
of its claim.

19
[¶62] It is true that statements of undisputed facts under W.R.C.P. 56.1 do not establish
those facts standing alone. Rule 56.1 statements are only intended “to identify just what
facts are actually in dispute.” Bordelon v. Chicago Sch. Reform Bd. of Trustees, 233 F.3d
524, 528 (7th Cir. 2000). See also N.Y. State Teamsters Conference Pension & Ret. Fund
v. Express Servs., Inc., 426 F.3d 640, 649 (2d Cir. 2005) (noting Rule 56.1 statements are
“essential tools for district courts, permitting them to efficiently decide summary
judgment motions by relieving them of the onerous task of hunt[ing] through voluminous
records without guidance from the parties.” (internal quotation marks omitted)). On the
other hand, Herling can hardly be faulted for relying on Wyoming Machinery’s statement
that it sought judgment for $884,019.59 when he responded to the motion for summary
judgment.

[¶63] The order Wyoming Machinery proposed after the oral ruling put Herling on
notice that it was seeking recovery of the full $1,383,472.93, and he promptly moved to
join Tetra Tech and to argue the impact of the federal court judgment on the amount
owed. His opposition to the motion and request to join Tetra Tech were filed after the
hearing at which the district judge orally indicated that she would grant the motion, but
they were both before the district court when the written order granting summary
judgment was entered.

[¶64] We must determine whether the amount of the award to Wyoming Machinery was
correct as a matter of law against this unusual procedural backdrop.

B. Possible Double Recovery

[¶65] We recently discussed the principles governing possible double recoveries in Dorr
v. Smith, Keller & Associates, 2010 WY 120, 238 P.3d 549 (Wyo. 2010) (Dorr V). In
that case, which spanned approximately twenty years and generated five appeals to this
Court, Dorr claimed that settlement funds paid by his father and a bank in a separate case
should be credited against the judgment against him, and that he was therefore entitled to
a partial satisfaction of the judgment. After holding an evidentiary hearing, the district
court disagreed, and that decision was affirmed on appeal. This Court commented as
follows:

Wyoming law does not favor double recoveries for the same
legal injury. A judgment debtor is, therefore, entitled to credit
against a judgment for a settlement that pertains to claims
included in the judgment, but is not entitled to credit for
settlement of claims that were not part of the judgment. The
party asserting satisfaction of a judgment has the burden of
proof.

20
 The decision about whether a credit against an
outstanding judgment should be allowed is controlled by
principles of equity.

Id. at ¶¶ 23–24, 238 P.3d at 554–55 (citations omitted) (internal quotation marks
omitted). See also Singer v. Olympia Brewing Co., 878 F.2d 596, 600 (2nd Cir. 1989)
(“[W]hen a plaintiff receives a settlement from one defendant, a nonsettling defendant is
entitled to a credit of the settlement amount against any judgment obtained by the
plaintiff against the nonsettling defendant as long as both the settlement and judgment
represent common damages.”); 8 Bollinger v. Rheem Mfg. Co., 381 F.2d 182, 185 (10th
Cir. 1967) (“[A]ppellant, who asserted the double recovery, had the burden to show that
the settlement and satisfaction of the judgment entered against him would together
constitute a double recovery by Rheem for the same losses.”).

[¶66] To the extent Herling argues that the judgment against JHCI in federal court alone
entitles him to a credit against the judgment in this case, we disagree. A creditor may
obtain a judgment against both a debtor and a guarantor on the same debt. Restatement
(Second) of Judgments § 49 cmt. a (1982) (early common law rules permitting only one
judgment on a joint obligation are obsolete and no longer followed). A judgment creditor
does not automatically receive funds–he merely obtains the right to execute on the assets
of a judgment debtor to satisfy his judgment.9

[¶67] Payments made by the judgment debtor or resulting from execution on his
property should be credited against a judgment against a guarantor, and a satisfaction of
both judgments should be entered when the debt is paid in full, regardless of who paid the
funds. The modern rule allowing only one satisfaction of multiple judgments on a joint
obligation protects against a double recovery. Dorr, ¶ 23, 238 P.3d at 554 (“A judgment
debtor is, therefore, entitled to credit against a judgment for a settlement that pertains to
claims included in the judgment, but is not entitled to credit for settlement of claims that
were not part of the judgment.”) (citation omitted); Restatement (Second) of Judgments §
49 cmt. a; § 50(2), cmt. a, cmt. d (1982) (A judgment determining the amount of a joint
obligation which is then paid in full by one obligor precludes recovery by the obligee
from others jointly liable for the obligation); id. at § 50(1)(b) (the general rule of non-
preclusion does not apply to the extent of the law of suretyship).

8
Singer was a securities fraud case. The commentary above should not be construed to apply to cases
decided under Wyoming’s comparative fault statute. We have held that settlements paid by one tortfeasor
are not set off against a judgment against another because each tortfeasor is held to pay only the damages
related to his share of fault under Wyoming Statute § 1-1-108. Rudy v. Bossard, 997 P.2d 480, 486–87
(Wyo. 2000).
9
Of course, judgments also become liens on the judgment debtor’s real property. Wyo. Stat. Ann. § 1-
17-302 (LexisNexis 2011). They may be registered and become liens in other states, depending on the
law of the particular state. See, e.g., Wyo. Stat. Ann. § 1-17-703 (LexisNexis 2011).

21
[¶68] In the language of the Restatement of Suretyship and Guaranty, the secondary
obligor (Herling) has a defense on its obligation to the obligee (Wyoming Machinery) to
the extent the underlying obligation has been discharged by performance or satisfaction
by the principal obligor (JHCI). Restatement (Third) of Suretyship and Guaranty § 19(a)
(1996). A guarantor acquires a right of subrogation against the primary obligor for any
payments the guarantor makes on the judgment. Id. § 22; Peter A. Alces, The Law of
Suretyship and Guaranty § 7:1 (2003). In this case, in which Herling is the majority
shareholder of a company in bankruptcy, that right is probably of no value to him. But
stated simply, two separate judgments on a single obligation result in only one
satisfaction, and the guarantor has a right to recover whatever he pays to satisfy the
judgment from the principal obligor.

[¶69] If Tetra Tech did in fact recover a judgment for the $500,000 it paid Wyoming
Machinery against JHCI in the federal case described above, a fact which is not clear to
us, it may never recover anything at all or less than that amount by execution. A
guaranty would be worthless if the rendering of a judgment against the primary obligor
would be deemed payment of the underlying obligation. If any portion of the judgment is
ever paid, the effect of payment can be determined in post-judgment proceedings to
declare the judgment satisfied as in Dorr V.

[¶70] The real question is whether the $500,000 paid by Tetra Tech from JHCI’s
retainage account belonged to JHCI or to Tetra Tech. If it belonged to JHCI, Herling
would be entitled to credit for it, because it would have reduced JHCI’s obligation to
Wyoming Machinery. If instead it belonged to Tetra Tech by virtue of JHCI’s default on
its contractual obligations, then it should not be credited against the judgment because
Tetra Tech settled part of Wyoming Machinery’s claim against JHCI with money it
owned and is entitled to recover. Dorr, ¶ 24, 238 P.3d at 555 (principles of equity control
decisions regarding credit against an outstanding judgment).

[¶71] The record contains evidence that JHCI failed to properly perform its contractual
obligations and thereby forfeited its right to the retained funds. Tetra Tech’s vice
president of project services testified by deposition that his company’s subcontracts
allowed it to stop payments from retained funds if a subcontractor like JHCI was not
paying its suppliers. If Tetra Tech is correct in its contentions, Herling may not be
“entitled to credit for settlement of claims that were not part of the judgment.” Dorr,
¶ 23, 238 P.3d at 554. Unfortunately, Tetra Tech’s subcontract with JHCI is not a part of
the appellate record. The record does reflect that Tetra Tech paid all of the retained funds
to JHCI’s suppliers and vendors.

[¶72] Herling admitted at his deposition that JHCI would only have been entitled to the
retained funds after completing the dirt work on the wind farm projects. However, he
also claimed that Tetra Tech breached its agreement with JHCI and prevented it from

22
completing its contract, in which case perhaps the funds rightfully belonged to JHCI for
work it had completed. Tetra Tech’s accounting records show that JHCI’s retainage
account was reduced by $500,000 by the payment to Wyoming Machinery. The records
in question were attached as an exhibit to Herling’s objection to Wyoming Machinery’s
proposed order submitted under W.R.C.P. 58(a). The Walker affidavit, along with
demonstrative exhibits used by Tetra Tech’s expert accountant in the federal case,
likewise attested that Tetra Tech sought recovery of its $500,000 settlement payment in
the federal case, although these documents did not reflect whether these funds were paid
from JHCI’s retainage account.

[¶73] The affidavit and accounting records would normally have had to have been filed,
at the very latest, the day before the hearing on the motion for summary judgment.
W.R.C.P. 6(c)(1). However, Herling only received notice that Wyoming Machinery
claimed $1,383,472.93 rather than the $884,019.59 in Wyoming Machinery’s statement
of undisputed facts when it served a proposed order after the hearing. The affidavit and
accounting records were before the district court when it entered its order, and Wyoming
Machinery did not move to strike them. Given these unusual circumstances, we will
consider the accounting records and the Walker affidavit as documents before the district
court when summary judgment was granted. See W.R.C.P. 6(b) (“When by these
rules . . . an act is required or allowed to be done at or within a specified time, the
court . . . for cause shown may at any time in its discretion . . . upon motion made after
the expiration of the specified period permit the act to be done where the failure to act
was the result of excusable neglect . . . .”); 10A Charles A. Wright et al., Federal
Practice and Procedure § 2719 (3d ed. 2005) (stating that Federal Rule of Civil
Procedure 6(b), which is similar to its Wyoming counterpart, “gives the judge authority
to accept a tardy affidavit when it is appropriate to do so”).

[¶74] The jury in the federal case may have determined that Tetra Tech owned the funds
in the retainage account by virtue of a breach of contract by JHCI. A decision as to the
ownership of those funds may control in this case under principles of issue preclusion or
suretyship law. Herling was aware of the claims by Tetra Tech because he was originally
a party to and participated in the federal proceedings as JHCI’s CEO. See, e.g., Little v.
Pizza Wagon, Inc., 432 So. 2d 1269, 1271–72 (Ala. 1983) (guarantor failed to carry his
burden of showing no genuine issues of material fact as to the preclusive effect of federal
proceedings); Bartle v. Health Quest Realty VII, 768 N.E. 2d 912, 919–20 (Ind. App.
2002) (guarantor in privity with debtor bound by judgment against obliger by virtue of
collateral estoppel or issue preclusion); Texas W. Oil & Gas Corp. v. First Interstate
Bank of Casper, 743 P.2d 857, 865 (Wyo. 1987) (principal obligor entitled to a motion to
dismiss on grounds of collateral estoppel where plaintiff had obtained an earlier judgment
against the guarantor), adhered to, 749 P.2d 278 (Wyo. 1988); 38 Am. Jur. 2d Guaranty,
§ 90 (2010) (“A guarantor who had notice of an action brought by the creditor against the
principal debtor, and had an opportunity to be heard, is precluded from questioning the
debtor’s liability.”) (citation omitted); 74 Am. Jur. 2d Suretyship § 109 (2010).

23
[¶75] At oral argument, counsel agreed that this Court could take judicial notice of the
federal court proceedings under Wyoming Rule of Evidence 201. We have referred to
that court’s record to the extent necessary to determine the timing of the proceedings of
the state district court vis-à-vis those of the federal district court. However, nothing in
the record on appeal suggests that the Natrona County District Court had the federal court
record available to it. As already noted above, our review is limited to the record before
the district court, and we cannot therefore rely on the federal court record when we
review the order granting summary judgment. See Redland, ¶ 47, 288 P.3d at 1185 (“We
review a summary judgment in the same light as the district court, using the same
materials and following the same standards.”) (citation omitted).

[¶76] The record before the district court does not independently reflect whether the
$500,000 paid in settlement by Tetra Tech rightfully belonged to it or to JHCI. The
subcontract between Tetra Tech and JHCI may specify the circumstances under which
Tetra Tech was entitled to the retention, but it is not in this record. All we are able to
divine from the record before us, viewing the evidence in the light most favorable to
Herling, is that the funds came from JHCI’s retainage account, and that there is a dispute
as to whether Tetra Tech properly held and used them.

[¶77] We therefore conclude that Herling has raised genuine issues of material fact as to
the ownership of the funds used to pay the Tetra Tech/Wyoming Machinery settlement.
The case must therefore be remanded to determine whether the $500,000 paid by Tetra
Tech should be credited to Herling or not. Cf. Little, 432 So. 2d at 1272–73 (reversing
and remanding the trial court’s grant of summary judgment for development of a more
complete record regarding the preclusive effect of federal litigation on the guarantor’s
liability). We reach no conclusion as to whether this issue could be resolved on a motion
for summary judgment on remand. The district court may adopt its previous findings
regarding the effect (or lack thereof) of the settlement agreement and assignment on
Herling’s guaranties and limit further proceedings to those necessary to determine the
correct amount of the judgment. See W.R.C.P. 56(d). The parties and the district court
may also wish to consider whether Tetra Tech should be joined as a party to determine its
rights under the partial assignment, if there was one.

CONCLUSION

[¶78] The district court properly concluded that JHCI’s assignment of retainage and
Wyoming Machinery’s settlement agreement with Tetra Tech and Safeco did not release
Herling from his personal guaranties as a matter of law. There are no genuine issues of
material fact as to Wyoming Machinery’s claim that JHCI owed it $1,383,472.93 and that
Herling guaranteed payment of that amount as a matter of law. However, Herling
successfully raised genuine issues of material fact as to the ownership of the funds in
JHCI’s retainage account with Tetra Tech, and therefore as to whether he was entitled to

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credit for the $500,000 settlement. We accordingly reverse and remand for further
proceedings to determine the correct amount of the judgment to be awarded to Wyoming
Machinery.

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