Nature of the Case
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Facts
Krist owned all of the stock of Luxury Motels. In 1964 Luxury Motels purchased the Ramada Inn in
Cheyenne, Wyoming. Luxury Motels, by installment contract and agreement, then sold all of its
interest in the Ramada Inn. M.J.B. Motel, Inc. (M.J.B.) ultimately assumed the obligations and burdens of the Luxury Motels' installment contract and agreement. M.J.B. defaulted. Krist also determined at that time that M.J.B. had failed to pay the Ramada Inn franchise fee of $17,846 causing the national Ramada Inn, Inc., to terminate the franchise; had failed to pay taxes to the county treasurer in the sum of $11,298; had failed to pay insurance premiums in the amount of $21,892; had permitted a lien to be filed by IRS in the amount of $34,000; had permitted waste; and, failed to maintain and refurbish the guest rooms. Luxury Motels (P) commenced suit against M.J.B. to foreclose and terminate the installment contract and agreement and take possession of the Ramada Inn. P filed a motion for appointment of receiver. Prior to the appointment of a receiver, the Ramada Inn franchise had been lost; and appellant estimated that $160,000 would be required to restore and refurbish the property and regain the Ramada Inn franchise. On June 26, 1979, William J. Fry Consultants, Inc. was appointed receiver conditioned upon posting bond. Fry's receiver bond was filed July 5, 1979. Aetna, (D) is surety on that bond. It immediately became apparent to Fry that the Ramada Inn was insolvent and could not pay debts as they came due. The choices were bankruptcy or obtaining sufficient funds to satisfy priority creditors and liens and keep the business operating. Because Krist was obligated as guarantor of obligations arising out of the sale of the Ramada Inn in the amount of $800,000, Fry's attorney contacted Krist's attorneys, and they reached an agreement under which Fry would resign, and Krist would be appointed successor receiver. The court entered an order allowing Fry to resign, appointing Krist as successor receiver, and providing that Fry's bond remain in effect until he submitted an accounting to be approved by the court. Krist took control and began to fix things rather quickly. On September 10, 1979, Fry filed an accounting with the court. P and Krist, as successor receiver, thereafter filed a resistance and objections to this accounting. On November 19, 1979, pursuant to stipulation, judgment was entered in the foreclosure action between P and M.J.B. in which Luxury Motels was granted immediate possession of the Ramada Inn, and all right, title, and interest in the property was restored to P. Luxury Motels waived attorney’s fees and costs. At that time, Fry was again ordered to file an accounting which was subject to an appropriate hearing by the court. D filed a petition for release of surety. Following a hearing, the court ordered D, who by now had been joined as a party, to prepare and file a receivership accounting on behalf of Fry and set all matters for trial. D employed and paid a firm of certified public accountants to prepare an accounting which was filed with the court on March 11, 1982. Krist, individually and as successor receiver, and P filed resistance and objection to the receivership accounting. On April 28, 1982, Krist, individually and as successor receiver, and Ps, filed a claim against Fry and D for attorney’s fees, travel expenses, real estate taxes, cost of restoration of motel sign, costs of reacquisition of the Ramada Inn franchise, the IRS liens, and missing cash in the total sum of $317,239.38. Following trial to the court, judgment as to Krist as successor receiver was entered against Aetna in the sum of $3,428.18 and denying all other claims of Krist. Krist appealed.
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