Jeffry V. Sheesley, et al. v. Aristatek, Inc., et al.

Laramie, Wyoming business litigation lawyers represented the parties in a breach of contract thispute.



In 1999, David Sheesley, Samuel Bruce King, Thayne Routh, and John Nordin (collectively the "Founders) formed AristaTek, Inc., a Wyoming for-profit corporation. The Founders were all equal shareholders in AristaTek and constituted the Board of Directors.Toform AristaTek, each of the Founders contributed $1,000 in capital and received 2,500 shares of AristaTek. Thus, each Founder had a 25% interest in the corporation. From 1999 through approximately 2010, AristaTek operated primarily as a software product manufacturing company,focusing its business on serving governmental entities. AristaTek's primary income was from software products developed by the employed Founders. By 2012, AristaTek restructured its business and began providing its services through a licensing arrangement on an annual subscription basis.



In approximately 2009 to 2013, the Founders unanimously agreed to each contribute cash to meet AristaTek's cash requirements "in the form of shareholder loans.”The Founders executed identical promissory notes representing their contributions. Three promissory notes were issued to David C. Sheesley, and all three notes amounted to a total contribution of $27,815.00 (the "Sheesley Notes”):1the first note was dated January 30, 2013, in the amount of $12,500; the second note was dated August 22, 2013, in the amount of $12,500;and the third note was dated December 30, 2013, in the amount of $2,815. An example of the terms of the promissory notes issued to the Founders, including the Sheesley Notes, were as follows:2PROMISSORY NOTEDate: August 22, 2013Amount: $12,500.001.Forthe loan of $12,500.00 (twelve thousand five hundred dollars), AristaTek, Inc., a Wyoming corporation, the "Promisor” promises to pay to the order of David C. Sheesley, Trustee or his successors in trust under the DCS Trust dated May 17, 2005 (hereinafter "Promisee”) the sum of $12,500.00 plus interest of 6% per annum based on a 365 or 366 day year for 24 months, unless changed by a written amendment to this note.1Two of the promissory notes were payable to the order of "David C. Sheesley, Trustee or his successors in the trust under the DCS Trust dated May 17, 2005,” and the third promissory note was payable to David C. Sheesley or his estate.2We include a copy of one of the Sheesley Notes as an example. The other Founders' promissory notes all have the same underlying terms as the Sheesley Notes except for the promisee, date, and amount of the loan.

Following a hearing, the district court issued an order on summary judgment resolving all outstanding issues. The district court held the Sheesley Notes are clear and unambiguous as to the amounts due and payable. However, it found the Sheesley Notes arenot currently due and payable because there is no payable on demand provision.It found because the Sheesley Notes are silent as to being payable on demand, the notes are not required to be repaid until AristaTek is sold. The district court denied AristaTek’s motion for summary judgment, finding it would be contrary to the clear language of the Sheesley Notes to treat the notes as capital contributions. It further found there is no priority of payment to AristaTek’s other outstanding obligations.However, the district court held the promissory notes issued to the Founders in 2012 to 2013 should all be paid equitably, meaning if AristaTek repays any of the Founders’ promissory notes, then they all need to be repaid. The district court further found the Sheesley Notes “unequivocally provide[] for the recovery of costs and fees” and do not limit such recovery by the outcome of litigation,and it granted DCS Trust’s request for reasonable attorney fees.[