Nancy Lurie v. Robert J. Blackwell

Nancy Lurie, as appellant, phrases the issues as follows:

1. Does Wyoming prohibit tenancies-by-the-entirety for
the kinds of tangible personal property which may be
owned without recorded documents of title?

2. If there is a conflict between Wyoming and Missouri
law on the recognition of tenancies by the entirety,
should not Wyoming continue to follow the principle
that the owners' interest is determined by the law of the
state of the owner's domicile at the time the property
was acquired, absent contrary dealings in the property
in this state by the owners?

3. If not, does the third party non-debtor owner have
standing to object to improper issuance of a writ of
execution?

Robert Blackwell, as appellee, essentially frames his arguments in the context of the issues
raised by Nancy Lurie.

FACTS

[3] Ronald U. Lurie and Nancy Lurie are husband and wife, and were so in 1978. In
September 1978, a St. Louis, Missouri, art dealer sold the Luries "Lack of Slack," a
bronze sculpture by Harry Jackson, for $6,500.00. The seller's affidavit states that he sold
the sculpture to "Ron and Nancy Lurie," and an accompanying bill of sale refers to the
buyers as "Mr. & Mrs. Ron Lurie" with a St. Louis, Missouri, address. There is some
indication from the information and addresses contained in the record that the Luries latermoved to Montana, where they presently re side. In 1994, the Luries sent the sculpture to
the Harry Jackson Studio in Cody, Wyoming, "to have it sold," and the record does not
indicate any intent by the Luries for the sculpture to remain in Wyoming on a more
permanent basis. Nancy Lurie states that she has not "conveyed, waived or otherwise
conceded her ownership interest in the [sculpture], nor has there been any agreement
conveying, waiving or terminating the ownership in tenancy by the entirety."

[4] In April 1995, a judgment was recorded in the Fifth Judicial District Court of Park
County, Wyoming. The judgment, arising from a Missouri bankruptcy proceeding, had
been entered in favor of Robert Blackwell, the bankruptcy trustee, against Ronald U. Lurie
for $1,121,743.00, plus interest. On March 22, 2001, a Writ of Execution issued from the
Wyoming district court, and the Park County Sheriff's office subsequently seized the
"Lack of Slack" sculpture at the Harry Jackson Studio in Cody. As of May 14, 2001, the
referenced judgment remained unsatisfied in the amount of $745,275.78, which judgment
continues to accrue interest.

[5] Nancy Lurie petitioned to intervene as a third-party claimant and quash the Writ of
Execution, essentially arguing that Robert Blackwell could not execute the judgment
against the sculpture in Wyoming because Nancy Lurie and Ronald U. Lurie held title to
the sculpture as tenants by the entirety. She also attacked the finality of the recorded
judgment. Robert Blackwell countered that Nancy Lurie had no standing to attack the
sufficiency of the recorded judgment, that the Luries were now residents of Montana,
which does not recognize tenancies by the entirety, and that in the alternative, the record is
insufficient to overcome Wyoming law's presumption against tenancies by the entirety.
Neither party asserts that the conveyance at issue in this case implicates the Uniform
Commercial Code.

[6] After a hearing on Nancy Lurie's petition, the district court found that (1) Nancy
Lurie did not have standing to question the sufficiency of the recorded judgment; (2)
Montana does not recognize tenancies by the entirety; (3) had the original transaction
occurred in Wyoming, the Luries "would not be able to qualify their purchase of this
property as a tenancy by the entireties;" and (4) pursuant to the Restatement (Second) of
Conflict of Laws § 259, the interests of a third-party creditor in marital personal property
are determined using the law of the state where the personal property was located "when
the interest is claimed to have been acquired," and Wyoming law applies because the
sculpture was in Wyoming at the time the judgment was obtained and when the instant
action was commenced. The district court concluded:
To grant [Nancy Lurie's] petition would be to give greater
protection than Wyoming residents enjoy to a non-resident who
bought property in another state and who cannot obtain this
protection under the laws of the state where she now resides. I am not persuaded that such a result would be in the interests of
the State of Wyoming.
Nancy Lurie requested that the district court reconsider its ruling in light of further
information regarding the referenced Restatement section. The district court denied this
request, and Nancy Lurie filed a timely appeal from the order denying her verified petition
to quash the Writ of Execution.

STANDARD OF REVIEW

[7] The facts contained in the record are essentially undisputed; this appeal presents an
issue of law which we review de novo, without affording deference to the district court's
decision. Worcester v. State, 2001 WY 82, 13, 30 P.3d 47, 52 (Wyo. 2001); Board of
County Com'rs of County of Platte v. State ex rel. Yeadon, 971 P.2d 129, 131 (Wyo.
1998).

DISCUSSION

[8] Given the particular circumstances of this case, wherein it is undisputed that the sale
of the "Lack of Slack" sculpture occurred in Missouri (the record does not indicate that the
sculpture was located anywhere but Missouri at the time the Luries acquired an interest in
it) and that the Luries were domiciled in Missouri at the time they purchased the sculpt ure,
we look to Missouri law to determine the effect of the conveyance of an interest in the
sculpture to the Luries. Succinctly stated, the "nature of interests conveyed" in personal
property is frequently "determined by the law of the state where the chattel is situated at
the time of the conveyance," and "title to personal property acquired under the law of one
state where the chattel is situated will be recognized in another state into which the chattel
is taken." 16 Am.Jur.2d Conflict of Laws §§ 55, 56 (1998). See, e.g., Pruitt Truck &
Implement Co. v. Ferguson, 216 Ark. 848, 227 S.W.2d 944, 945 (1950).

[9] Although we need not expressly adopt the applicable Restatement sections, we note
that this approach appears to be consistent with the Restatement (Second) of Conflict of
Laws §§ 244, 247 (1971), which sections provide:
§ 244. Validity and Effect of Conveyance of Interest in
Chattel
(1) The validity and effect of a conveyance of an interest in
a chattel as between the parties to the conveyance are
determined by the local law of the state which, with respect to
the particular issue, has the most significant relationship to the parties, the chattel and the conveyance under the principles
stated in § 6.

(2) In the absence of an effective choice of law by the
parties, greater weight will usually be given to the location of
the chattel, or group of chattels, at the time of the conveyance
than to any other contact in determining the state of the
applicable law.
§ 247. Moving Chattel into Another State: Effect on Title
Interests in a chattel are not affected by the mere removal of
the chattel to another state. Such interests, however, may be
affected by dealings with the chattel in the other state.
(Emphasis added.) Indeed, Restatement (Second) of Conflict of Laws, supra, § 247 cmt. a
states:
a. Rationale. Commercial convenience and the
needs of international and interstate relations alike require that
interests in a chattel should not be affected simply by its
removal from one state to another. An interest having once
been acquired by the local law of the state where the chattel
was at the time the interest was acquired will be recognized by a state into which the chattel is subsequently taken. This is so
even though no such interest would have been acquired in the
latter state if the chattel had been there at the time of the
conveyance or other transaction. Conversely, no interest is
acquired in a chattel upon its removal to a second state merely
because such an interest would have arisen under the local law
of the second state if a particular transaction which occurred
prior to the chattel's removal to the state had taken place after
the chattel had been removed there.
Illustration:

1. A conveys to B a chattel which is at the time in
state X. A and B are both domiciled in X and X is the state of
the applicable law under the rule of § 244. By the local law of
X, B became absolute owner of the chattel. B subsequently
takes the chattel to state Y under whose local law the
conveyance would have given B only a security interest in the
chattel. The mere removal of the chattel to Y does not affect
B's interest in the chattel.

[10] This Court has looked to another state's law in evaluating the effect of a conveyance
(or lack thereof) of personal property between the parties to that conveyance in relation to a
third party's claimed interest in the property, although in a slightly different context. For
example, in Studebaker Bros. Co. of Utah v. Mau, 13 Wyo. 358, 80 P. 151, 152-53
(1905), the seller, a Utah corporation, entered into a conditional sales contract in Utah for
the sale of personal property situate in Utah to the buyers, also residents of Utah, wherein
title to the personal property remained in the seller until the buyer paid for the property.
At some point, one of the buyers (without the seller's consent) removed the personal property to Wyoming, where he sold it to another individual. Id. at 152. Utah law
provided that conditional sales contracts were valid between the parties and as to
subsequent bona fine purchasers without first having to be recorded. Id. at 154. Wyoming
law provided that conditional sales were invalid as against subsequent bona fide purchasers
without notice, unless the contract was recorded in the county where the property was
situated. Id. In recognizing the interest of the Utah corporation in the personal property as
against the third-party purchaser, this Court stated that "the validity and effect of contracts
relating to personal property are to be determined by the laws of the state or country where
they are made, and, as a matter of comity, they will, if valid there, be enforced in another
state or country, although not executed or recorded according to the laws of the latter;" in
other words, that
where, as in this case, a conditional sale of personal property
is made in one state between parties residing in that state, and
where the property is then situated and delivered, and without
any agreement or intention that the property is to be removed
to another state, and such contract is valid, although not filed
or recorded, in the state where made, against bona fide
purchasers from the conditional vendee, and the conditional
vendee, without the knowledge or consent of the vendor,
removes the property to another state, and there sells it to a
bona fide purchaser, such purchaser acquires only such rights
in the property as the conditional vendee had therein; and that
the conditional vendor can recover the property from such
purchaser notwithstanding the fact that the conditional sale
would have been invalid for want of filing or record under the
laws of the state to which the property was removed and where
it was sought to be recovered.

Id. at 154. On rehearing, this Court found that recognizing the valid interest created in
Utah would not be contrary to Wyoming law or policy, stating also that

"[a]pplying by analogy the principles that have been applied to
chattel mortgages, it would seem that the validity and effect of
the reservation of title in the contract of sale of personal
property should be determined by the lex loci contractus,
rather than the lex situs, not only when the question arises
between the immediate parties, but also when it arises between
the vendor and a subsequent purchaser from or creditors of the
vendee, so far as the rights of such purchaser or creditor
depend upon the original validity and effect of the reservation
itself. But, however that may be, it is clear that, when the
contract is made in the state in which the property is then located, the question as to the original validity and effect of the
reservation is to be determined by the law of that state,
notwithstanding the subsequent removal of the property to
another state."

Studebaker Bros. Co. of Utah v. Mau, 14 Wyo. 68, 82 P. 2, 5 (1905) (quoting Wharton on
the Conflict of Laws § 355(b)).

[11] Robert Blackwell essentially argues that the principles stated in Restatement
(Second) of Conflict of Laws, supra, § 247 and 16 Am.Jur.2d Conflict of Laws, supra, §
56, are inapplicable because the Luries are no longer domiciled in Missouri, and the
substantive law of Montana (the Luries' current domicile) or Wyoming (where the
sculpture is located and the bankruptcy judgment is recorded) should be utilized to
determine a third-party judgment creditor's rights regarding the sculpture. But Robert
Blackwell's right to execute his judgment against the sculpture in Wyoming necessarily
depends on the effect of the conveyance of the sculpture to the Luries. We evaluate the
effect of that conveyance according to the circumstances existing at the time of the
conveyance. At that time, the Luries and the seller were domiciled in Missouri, and the
sculpture was apparently situate in Missouri. Aside from Robert Blackwell recording the
Missouri judgment in Wyoming and attempting to exe cute that judgment against the
sculpture, the record does not reveal any additional dealings or transactions in Wyoming
that might affect whatever interest the Luries originally acquired in the sculpture. That the
Luries may have later moved to Montana is not sufficient, itself, to affect the Luries'
original interest in the sculpture. Recognizing that the instant case lends itself to numerous
potential factual variations, which variations might implicate a different legal result, we
limit the application of our holding to the context, and facts, before us.

[12] It is undisputed that the Luries were married at the time they acquired an interest in
the sculpture. According to Missouri law, where "two persons who are husband and wife
become joint owners of personal property a presumption arises that they hold the property
as tenants by the entirety. The presumption is that each spouse owns an undivided interest
in the whole of the property." Merrill Lynch, Pierce, Fenner and Smith, Inc. v.
Shackelford, 591 S.W.2d 210, 213 (Mo.App. 1979); see also Seabaugh v. Seabaugh, 839
S.W.2d 49, 50 (Mo.App. 1992); Nelson v. Hotchkiss, 601 S.W.2d 14, 18 (Mo. 1980); and
In re Stanke, 234 B.R. 439, 441 (Bankr.W.D.Mo. 1999).3 Robert Blackwell does not direct us to any facts sufficient to rebut such a presumption, and the district court found
that the Luries "acquired ownership of the personal property in Missouri as tenants by the
entireties."

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