Zundel v. Magana , 347 P.3d 444 ( 2015 )

2015 UT App 69_________________________________________________________
THE UTAH COURT OF APPEALS
AARON W. ZUNDEL, ZACHARY D. TAFT, AND STEVEN L. STOOKEY,
Plaintiffs, Appellants, and Cross-appellees,
v.
SCHAFER D. MAGANA; LEGACY TOWING, INC.; LEGACY TOWING
HOLDINGS, LLC; DAN MAGANA; ASAP TOWING; AND ASAP
TOWING RECOVERY,
Defendants, Appellees, and Cross-appellants.
Opinion
No. 20130210-CA
Filed March 26, 2015
Third District Court, Salt Lake Department
The Honorable Paul G. Maughan
No. 120902064
H. Dennis Piercey, Attorney for Appellants
Heather L. Thuet and Nathan R. White, Attorneys
for Appellees
JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
which JUDGES GREGORY K. ORME and JOHN A. PEARCE concurred.
CHRISTIANSEN, Judge:
¶1 Plaintiffs Aaron W. Zundel, Zachary D. Taft, and Steven L.
Stookey appeal from the district court’s order granting summary
judgment to Defendants Schafer D. Magana; Legacy Towing, Inc.;
Legacy Towing Holdings, LLC; Dan Magana; ASAP Towing; and
ASAP Towing Recovery (collectively, Legacy) and denying
Plaintiffs’ motion for summary judgment. Legacy cross-appeals
from the district court’s denial of its motion requesting attorney
fees. We affirm in part, reverse in part, and remand for further
proceedings consistent with this opinion.
Zundel v. Magana
BACKGROUND
¶2 Legacy is authorized to tow the vehicles of those who park
in the lot of, but who are not customers of, businesses located at the
33rd Street Station shopping complex in South Salt Lake City.1 On
the evening of March 16, 2012, Legacy towed Plaintiffs’ vehicles
from the 33rd Street Station parking lot after Plaintiffs allegedly
parked in the lot but did not frequent any of the businesses at the
complex. Before allowing Plaintiffs to retrieve their towed vehicles,
Legacy charged Plaintiffs numerous fees, including a towing fee, a
storage fee, an administrative fee, and a fuel-surcharge fee. Legacy
also charged two of the Plaintiffs an after-hours fee for retrieval of
their vehicles outside Legacy’s normal business hours.
¶3 Plaintiffs brought suit against Legacy, alleging that its
towing of their vehicles and the fees charged for the return of their
vehicles amounted to deceptive or unconscionable acts or practices
under the Utah Consumer Sales Practices Act (UCSPA). Plaintiffs
also alleged that Legacy violated the federal Fair Debt Collection
Practices Act (FDCPA) and that Legacy’s refusal to return Plaintiff
Zundel’s vehicle without payment of the required fees constituted
conversion. Legacy subsequently filed a motion for summary
judgment, and Plaintiffs filed a cross-motion for summary
judgment. The district court, without holding a hearing on the
motions, granted Legacy’s motion and denied Plaintiffs’ motion.
After the district court issued its ruling, Plaintiffs moved for
reconsideration and Legacy filed a motion requesting attorney fees
1. 33rd Street Station is located on the southeast corner of 3300
South and State Street in South Salt Lake City. There are a few fast-
food restaurants contained within 33rd Street Station, and the
parking lot is limited for the use of those customers who frequent
those businesses. Across 3300 South to the north is a large movie
theater with limited parking, and directly to the south of 33rd
Street Station is a restaurant whose customers are not allowed to
use 33rd Street Station’s parking lot.
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pursuant to the attorney-fee provisions of the UCSPA and the
FDCPA. The district court denied both motions. Plaintiffs appeal
from the district court’s summary judgment rulings. Legacy cross-
appeals from the district court’s order denying its request for
attorney fees.
ISSUES AND STANDARDS OF REVIEW
¶4 Plaintiffs argue that the district court erred by granting
summary judgment to Legacy, because the court noted the
existence of a disputed factual issue that Plaintiffs contend is
material. Plaintiffs assert that this error was exacerbated by the
court’s refusal to hold a hearing on the summary judgment
motions pursuant to rule 7(e) of the Utah Rules of Civil Procedure.
We review a district court’s “grant or denial of summary judgment
for correctness.” Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600(citation and internal quotation marks omitted). The question of
whether the court erred in granting summary judgment without a
hearing is governed by rule 7 of the Utah Rules of Civil Procedure.
See Price v. Armour, 949 P.2d 1251, 1254 (Utah 1997). “To the extent
this issue requires us to interpret rules of civil procedure, it
‘presents a question of law which we review for correctness.’”
Harris v. IES Assocs., Inc., 2003 UT App 112, ¶ 25, 69 P.3d 297(quoting Nunley v. Westates Casing Servs., Inc., 1999 UT 100, ¶ 42,
989 P.2d 1077). We therefore review the district court’s decision not
to hold a hearing for correctness. Price, 949 P.2d at 1254; Harris,
2003 UT App 112, ¶ 25.
¶5 Plaintiffs also challenge the district court’s determination
that Legacy’s charging and collection of the after-hours fees,
administrative fees, and fuel-surcharge fees did not constitute
UCSPA and FDCPA violations. However, because we reverse the
district court’s order granting Legacy’s motion for summary
judgment and because a hearing on summary judgment may
illuminate issues that affect the district court’s analysis of these
claims, we do not reach the merits of this argument.
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¶6 Finally, in its cross-appeal, Legacy argues that the district
court abused its discretion by denying its request for an award of
attorney fees under the UCSPA and the FDCPA. Both statutes
provide that a court “may award” attorney fees only if the court
makes certain findings. See Utah Code Ann. § 13-11-19(5)
(LexisNexis 2009); 15 U.S.C. § 1692k(a)(3) (2012). We review for
correctness the district court’s determination that the “legal
prerequisites for awarding attorney fees” were not met. Still
Standing Stable, LLC v. Allen, 2005 UT 46, ¶ 8, 122 P.3d 556. The
question of whether an action was brought in bad faith is a
question of fact, and we review the district court’s finding for clear
error. Id.ANALYSIS
I. The District Court Erred by Not Holding a Hearing on the
Parties’ Summary Judgment Motions.
A. The Existence of a Potential Material Factual Issue
¶7 “Summary judgment is appropriate ‘if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled
to a judgment as a matter of law.’” Orvis v. Johnson, 2008 UT 2, ¶ 13,
177 P.3d 600 (quoting Utah R. Civ. P. 56(c)). In its order granting
Legacy’s motion for summary judgment and denying Plaintiffs’
motion for summary judgment, the district court stated that it is
“undisputed that all three plaintiffs parked their vehicles at 33rd
Street Station, but were not customers of 33rd Street Station.”
However, the court included a footnote to that statement in which
the court recognized “[t]here is an issue about whether parking
signs adequately informed individuals about which businesses
comprised 33rd Street Station.” The parties’ motions and
supporting affidavits confirm the existence of this factual issue.
20130210-CA 4 2015 UT App 69Zundel v. Magana
¶8 In its memorandum in support of its motion for summary
judgment, Legacy stated that it was undisputed that the “parking
stalls in 33rd Street Station are for customers of 33rd Street
Station.” To support this factual assertion, Legacy attached to its
memorandum the sworn declaration of Schafer Magana, president
of Legacy Towing, Inc., indicating that the parking stalls at the 33rd
Street Station parking lot are reserved exclusively for the customers
of that shopping complex. Legacy also quoted in its memorandum
the exact language used on the numerous signs posted at the 33rd
Street Station parking lot on the night Legacy towed Plaintiffs’
vehicles. Legacy attached photographs of those signs that clearly
read:
33RD St. Station PARKING ONLY
Violators will be TOWED at owners expense.
TOWING ENFORCED by Legacy Towing, Inc.
¶9 In their collective memorandum opposing Legacy’s motion
for summary judgment and supporting their collective motion for
summary judgment, Plaintiffs responded to Legacy’s factual
assertions regarding the sign by stating that “it was unclear from
the signs and the surrounding area which businesses comprise
‘33rd Street Station.’” This factual issue is potentially material to
Legacy’s motion for summary judgment on Plaintiffs’ second cause
of action—Plaintiffs’ claim that Legacy’s conduct in placing
ambiguous signage “insufficient to warn customers what areas of
the parking lot service which surrounding buildings” was
unconscionable.2
2. In its motion for summary judgment, Legacy addressed
Plaintiffs’ claim that the fees Legacy charged violated the UCSPA
but did not address the other claims alleged in Plaintiffs’ second
cause of action. Thus, this factual issue was not material to the legal
arguments Legacy actually made in its motion for summary
judgment, but it may be material to Plaintiffs’ claim that Legacy
acted unconscionably.
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¶10 Each of the Plaintiffs attached to the summary judgment
memorandum sworn declarations supporting the response to
Legacy’s motion for summary judgment, stating that “the signage
posted did not explain which businesses were part of the complex.”
“[I]t only takes one sworn statement under oath to dispute the
averments on the other side of the controversy and create an issue
of fact.” Draper City v. Estate of Bernardo, 888 P.2d 1097, 1101 (Utah
1995) (citation and internal quotation marks omitted); accord
Anderson Dev. Co. v. Tobias, 2005 UT 36, ¶ 32, 116 P.3d 323. The
district court observed that there was a genuine factual issue as to
whether the signage at the 33rd Street Station adequately notified
individuals parking there which businesses in this busy commercial
area comprised that shopping complex. Yet “the mere existence of
issues of fact does not preclude summary judgment. The issues of
fact must be material to the applicable rule of law.” Norton v.
Blackham, 669 P.2d 857, 859 (Utah 1983). Thus, our inquiry would
normally turn to the question of whether the factual issue
concerning the adequacy of the signage was material to the
governing law in this case. However, for the reasons discussed
below, we are unable to reach this step of the analysis.
¶11 After recognizing that “[t]here is an issue about whether
parking signs adequately informed individuals about which
businesses comprised 33rd Street Station,” the district court stated
that “the plaintiffs acknowledge that this dispute is not material.”
However, the court provided no additional explanation or analysis
as to the materiality of the signage issue. Rather, it appears the
court based its materiality determination entirely upon assertions
made by Plaintiffs in their summary judgment memorandum.
¶12 While it is true that Plaintiffs asserted in their summary
judgment memorandum that the signage issue was not material,
they argue that their concession was in reference to their own
motion for summary judgment and not Legacy’s motion. “In
context,” argue Plaintiffs, “the district court should have
understood [Plaintiffs’] argument to be that those material facts
presented by [Legacy], though disputed, were not material to
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[Plaintiffs’] motion for summary judgment because [Plaintiffs]
contended that, even were the tow reasonable, they still were
entitled to prevail due to the towing companies charging an illegal
amount, valid tow or not.” Plaintiffs maintain that the signage issue
was indeed material to Legacy’s motion for summary judgment
because that issue was directly related to the “claimed justification
for the tow” and whether Legacy acted unconscionably in placing
ambiguous signs in the lot in violation of the UCSPA.
¶13 Plaintiffs’ position is consistent with this court’s explanation
that summary judgment “cross-motions may be viewed as
involving a contention by each movant that no genuine issue of fact
exists under the theory it advances, but not as a concession that no
dispute remains under the theory advanced by its adversary.”
Wycalis v. Guardian Title of Utah, 780 P.2d 821, 825 (Utah Ct. App.
1989). “In effect, each cross-movant implicitly contends that it is
entitled to judgment as a matter of law, but that if the court
determines otherwise, factual disputes exist which preclude
judgment as a matter of law in favor of the other side.” Id.Similarly, the Utah Supreme Court has explained that a district
court “must recognize that a party’s claim that there are no issues
of fact relates to that party’s theory of the case and should not be
construed as support for the adversary’s argument or motion.”
Newman v. White Water Whirlpool, 2008 UT 79, ¶ 15, 197 P.3d 654(citation and internal quotation marks omitted).
¶14 Legacy argues that Plaintiffs bore the responsibility of
clearly setting forth which facts they claimed to be material to each
party’s motion for summary judgment and of showing that there
was a genuine factual issue for trial. Legacy contends that a “court
is not supposed to rewrite a party’s responses to statements of facts
or make out a better argument on that party’s behalf than the party
itself made.”3 Legacy’s argument on this point is not without some
3. Legacy also argues that Plaintiffs’ “representations that the facts
regarding the signage were ‘not material’ . . . constitute invited
(continued...)
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force; however, Plaintiffs are correct in their contention that the
district court should not have relied on their purported concession
as to materiality in ruling on summary judgment, as discussed
3. (...continued)
error.” We disagree. The invited error doctrine “arises from the
principle that a party cannot take advantage of an error committed
at trial when that party led the trial court into committing the
error.” Pratt v. Nelson, 2007 UT 41, ¶ 17, 164 P.3d 366 (citation and
internal quotation marks omitted). “By precluding appellate
review, the doctrine furthers this principle by discouraging parties
from intentionally misleading the trial court so as to preserve a
hidden ground for reversal on appeal.” Id. (citation and internal
quotation marks omitted). The invited-error doctrine encourages
counsel to “actively participate in all proceedings and to raise any
possible error at the time of its occurrence” so as to “fortif[y] our
long-established policy that the trial court should have the first
opportunity to address a claim of error.” Id. (alteration added)
(citation and internal quotation marks omitted).
The record clearly indicates that Plaintiffs both actively
participated, or at least sought to actively participate, in all
proceedings and sought to bring the existence of the error to the
district court’s attention at the time of its occurrence. First,
consistent with our holding in this opinion, it is likely that the
apparent misunderstanding that led to the court’s error could have
been avoided had the court held a hearing as contemplated by our
rules as discussed below. Second, upon receiving the district
court’s order denying their motion for summary judgment and
granting summary judgment to Legacy, Plaintiffs discovered the
claimed error committed by the district court and attempted to give
the court the “first opportunity to address [the] claim of error” by
filing a motion for reconsideration pursuant to rules 52 and 59 of
the Utah Rules of Civil Procedure. See id. (citation and internal
quotation marks omitted). Plaintiffs specifically addressed the
materiality of the signage issue in this motion. Accordingly,
Plaintiffs did not lead the district court into committing the claimed
error and the doctrine of invited error does not apply.
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below. See infra ¶¶ 17–18. Moreover, it is likely that much of the
confusion surrounding whether the signage dispute was material
could have been avoided had the district court held a hearing after
receiving the parties’ motions for summary judgment, especially
where Plaintiffs expressly requested a hearing.
B. Rule 7 and the District Court’s Denial of Plaintiffs’ Request
for a Hearing
¶15 Rule 7 of the Utah Rules of Civil Procedure instructs that the
“court shall grant a request for a hearing on a motion under Rule 56
or a motion that would dispose of the action or any claim or
defense in the action unless the court finds that the motion or
opposition to the motion is frivolous or the issue has been
authoritatively decided.” Utah R. Civ. P. (7)(e) (emphasis added).
Thus, the district court is required to hold a hearing on a summary
judgment motion unless it determines that the motion or
opposition is frivolous or that the issues have been authoritatively
decided. See Price v. Armour, 949 P.2d 1251, 1255 (Utah 1997)
(explaining that the near-identical language of a predecessor rule
under the Utah Code of Judicial Administration “clearly required
that the [district] court grant [a party’s] request for a hearing unless
either of the two exceptions applied”). However, if we determine
that the district court’s failure to hold a hearing was error, “[f]or
such error to compel reversal of the [district] court’s substantive
ruling, . . . it must have been prejudicial. If the error was harmless,
that is, if the error was sufficiently inconsequential that there is no
reasonable likelihood that it affected the outcome of the case, then
a reversal is not in order.” Id.¶16 In its order, the court recognized that Plaintiffs had
“requested a hearing on their [m]otion.” Notwithstanding that
request, the court ruled on the summary judgment motions
without a hearing because the court determined that “the material
facts in this case [were] undisputed and the parties’ written
submissions [had] adequately apprised the court of their respective
legal positions.” Nothing in this statement indicates that the court
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found the issues raised by the parties to be frivolous. Indeed, in
rejecting Legacy’s claim for attorney fees, the court stated that it
could not “find based on the record before it that [Plaintiffs’] action
was without basis or brought in bad faith or for improper
purposes.” Nor does the court’s statement explain whether it
considered the issues in this case to have been “authoritatively
decided.” Though one might infer from the court’s analysis of
Plaintiffs’ claims that the court considered some of those issues to
have been authoritatively decided, the court did not clearly find
that the factual issue concerning the adequacy of the signage and
whether this issue was material, to have been authoritatively
decided. The court’s only analysis of this issue is contained in a
footnote in the court’s order, and the court’s determination
apparently relied entirely upon one party’s purported concession
that the issue was not material. Likewise, nothing in the court’s
order denying Plaintiffs’ request for reconsideration indicates that
the court had specifically considered the signage issue and whether
that issue was material to have been authoritatively decided.
¶17 Upon identifying the signage issue, the court should have
made an independent determination as to whether that factual
issue was material. As our supreme court has instructed, “[t]he
[district] court is obligated to ascertain whether either party’s
request for judgment as a matter of law should be granted.”
Newman, 2008 UT 79, ¶ 15 (alteration in original) (citation and
internal quotation marks omitted). “In other words, simply because
a party claims there are no disputed factual issues,”—or, as a
corollary, a party’s concession that a factual issue is not
material—“does not relieve the [district] court of its obligation to
determine whether the issue is actually proper for summary
judgment.” Id. Had the court held a hearing, the parties may have
helped the court better understand their positions on all key issues,
such as whether the signage issue was material, along with the
supporting facts and legal authority for those positions. A hearing
would have also aided the court and the parties by allowing both
parties to hear and respond to the arguments of the opposing side.
Thus, in a case like this, where the district court was presented with
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multiple claims and competing motions for summary judgment, a
hearing could have assisted the court in understanding the parties’
arguments and avoiding the type of misunderstanding apparent
here. And given our identification of a potentially material factual
issue above, see supra ¶¶ 10–14, there is a reasonable likelihood that
a hearing would have affected the district court’s resolution of the
parties’ summary judgment motions.
¶18 Therefore, even though the question of whether summary
judgment was ultimately appropriate presents a question of law,
which we review for correctness, Orvis v. Johnson, 2008 UT 2, ¶ 6,
177 P.3d 600, we are currently not in the best position to determine
whether the signage issue was material. We simply do not have the
benefit of the parties’ complete arguments or the court’s response
to those arguments. Under these circumstances, we must conclude
that there is a “reasonable likelihood” that the district court’s
failure to hold a hearing “affected the outcome of [this] case.” See
Price, 949 P.2d at 1255. We therefore reverse the district court’s
summary judgment ruling and remand with instructions to hold a
hearing or to enter findings demonstrating that all issues raised by
the parties have been authoritatively decided under Utah law,
consistent with rule 7(e). If, upon holding such a hearing or
entering appropriate findings, the district court determines that the
signage issue is material, the court must allow this case to proceed
to trial. See Orvis, 2008 UT 2, ¶ 6. Because any action the court takes
on remand may alter the context in which Plaintiffs’ other claims
have been presented to us on appeal, we decline to address those
claims.
II. The District Court Did Not Abuse its Discretion by Denying
Legacy’s Request for Attorney Fees.
¶19 After the district court entered its summary judgment
ruling, Legacy filed a motion requesting that the court award it
attorney fees. Legacy argued before the district court and on appeal
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that it is entitled to receive its attorney fees under both the UCSPA
and the FDCPA.4
¶20 The UCSPA provides that the district court “may award”
reasonable attorney fees to the defendant in a UCSPA claim if “the
consumer complaining of the act or practice that violates this
chapter has brought or maintained an action he knew to be
groundless.” Utah Code Ann. § 13-11-19(5) (LexisNexis 2009).
Similarly, the FDCPA provides that “[o]n a finding by the court
that an action under this section was brought in bad faith and for
the purpose of harassment, the court may award to the defendant
attorney’s fees reasonable in relation to the work expended and
costs.” 15 U.S.C. § 1692k(a)(3) (2012).
¶21 In denying Legacy’s request, the district court concluded
that even though it had ruled against Plaintiffs on their UCSPA and
FDCPA claims, the court could not “find based on the record
before it that their action was without basis or brought in bad faith
or for improper purposes.” “When challenging a district court’s
findings of fact, the challenging party must show that the evidence,
viewed in a light most favorable to the [district] court, is legally
insufficient to support the contested finding.” Blum v. Dahl, 2012
UT App 198, ¶ 5, 283 P.3d 963 (alteration in original) (citation and
internal quotation marks omitted). Legacy has not done so. Instead,
4. Our reversal of the district court’s summary judgment ruling
would also require us to vacate the district court’s ruling on
attorney fees if Legacy’s request were based on its status as the
prevailing party. See John Holmes Constr., Inc. v. R.A. McKell
Excavating, Inc., 2005 UT 83, ¶ 17, 131 P.3d 199. However, because
Legacy’s request is grounded in the theory that Plaintiffs’ claims
were brought in bad faith at their inception, the district court’s
summary judgment ruling does not affect that determination and
we may review the district court’s attorney-fees decision without
first remanding for the district court to reconsider the parties’
motions for summary judgment. The district court is free to
reconcile this issue in light of any further proceedings.
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Legacy merely identifies the evidence it believes demonstrates bad
faith on the part of Plaintiffs and Plaintiffs’ knowledge that their
claims were groundless, and asserts that the district court should
have found in Legacy’s favor. Legacy does not undertake to
demonstrate a lack of evidentiary support for the district court’s
findings and Legacy has thereby failed to show that the district
court clearly erred in this respect. We therefore conclude that the
district court did not err in denying Legacy’s request for attorney
fees.
CONCLUSION
¶22 We reverse the district court’s order granting Legacy’s
motion for summary judgment and denying Plaintiffs’ motion for
summary judgment. We remand this case to the district court so
that the court may determine whether to hold a hearing and
thereby determine whether the factual issue concerning the
adequacy of the signage at the 33rd Street Station on the night that
Legacy towed Plaintiffs’ vehicles is material to the applicable law
governing this case. Should the court determine that the signage
issue is material, the court must then allow this case to proceed, as
appropriate, and reevaluate any other claims or issues possibly
affected by that determination. We affirm the district court’s denial
of Legacy’s motion requesting attorney fees.
20130210-CA 13 2015 UT App 69