Eskamani v. Auto-Owners Ins. , 2020 UT App 137 ( 2020 )

2020 UT App 137THE UTAH COURT OF APPEALS
RACHEL ESKAMANI AND PEGGY HUNT,
Appellants,
v.
AUTO-OWNERS INSURANCE COMPANY,
Appellee.
Opinion
No. 20190450-CA
Filed October 8, 2020
Third District Court, Salt Lake Department
The Honorable Royal I. Hansen
No. 150905157
William J. Hansen, Karra J. Porter, Bryson R. Brown,
and Kristen C. Kiburtz, Attorneys for Appellants
Richard K. Glauser, Albert W. Gray, Michael W.
Wright, and Clayton H. Rather, Attorneys
for Appellee
JUDGE KATE APPLEBY authored this Opinion, in which JUDGES JILL
M. POHLMAN and RYAN M. HARRIS concurred.
APPLEBY, Judge:
¶1 Rachel Eskamani and Peggy Hunt 1 appeal the district
court’s grant of summary judgment in favor of Auto-Owners
Insurance Company (Auto-Owners) and dismissal of their
claims for wrongful use of civil proceedings and abuse of
process. Eskamani also appeals the district court’s ruling
denying her request for discovery sanctions against Auto-
Owners. We affirm in part and reverse in part.
1. Peggy Hunt is the trustee of Eskamani’s bankruptcy estate.
Eskamani v. Auto-Owners Ins.
BACKGROUND 2
¶2 This appeal is the third in a series of three lawsuits
involving Eskamani and Auto-Owners or its insured. In
December 2009, a café owned by Eskamani was damaged when
a contractor ruptured a nearby high-pressure water line, causing
water to flood the premises. That same month the contractor,
through its insurance carrier, Auto-Owners, tendered Eskamani
a partial payment for the initial costs of cleanup and repair of the
café.
¶3 In November 2010, Eskamani filed suit against the
contractor, alleging she had not been paid in full for the water
damage sustained in the flood (Flooding Suit).
¶4 Approximately a year later, Eskamani became frustrated
with the contractor and, more specifically, Auto-Owners. She
posted online—as well as on signs displayed on the windows of
her café—various complaints and statements regarding Auto-
Owners’ handling of the insurance claim. The signs referred to
Auto-Owners by name and, among other things, asked Auto-
Owners to “[p]ay up in [f]ull.” The dispute garnered the
attention of a local television channel, which ran a report of the
story on the nightly news.
¶5 Shortly thereafter, the contractor filed an offer of
settlement pursuant to rule 68 of the Utah Rules of Civil
Procedure. The offer, which included a dollar figure, was
conditioned on Eskamani “stop[ping] all contact of whatever
nature with . . . Auto-Owners” and “refrain[ing] from oral or
2. When reviewing a grant of summary judgment, we view the
facts and all reasonable inferences in the light most favorable to
the nonmoving party. Anderson Dev. Co. v. Tobias, 2005 UT 36,
¶ 31, 116 P.3d 323.
20190450-CA 2 2020 UT App 137Eskamani v. Auto-Owners Ins.
written publishing of any kind in relationship to . . . Auto-
Owners.” Eskamani rejected the offer, and litigation in the
Flooding Suit continued.
¶6 In January 2012, Auto-Owners filed a complaint against
Eskamani for defamation (Defamation Suit) arising from the
statements she posted online and in the windows of her café
regarding Auto-Owners’ handling of the insurance claim and the
Flooding Suit. The complaint stated three claims for relief:
defamation, defamation per se, and tortious interference with
existing and prospective economic relations. Auto-Owners
sought injunctive relief, attorney fees, compensatory damages,
and punitive damages against Eskamani.
¶7 Eskamani initially submitted a pro se response titled
“Answer to Complaint & Request for Motion to Dismiss
& Request for Sanctions.” After considering Eskamani’s motion,
as well as the pleadings, the district court determined a hearing
was not necessary to decide the matter and denied Eskamani’s
motion. 3
¶8 Following the denial of her motion to dismiss, Eskamani
retained counsel, who later filed a motion for summary
judgment on Eskamani’s behalf. The motion was limited in
scope, arguing only that Eskamani’s allegedly defamatory
statements were “not capable of sustaining a defamatory
meaning, as they [were] vague statements of opinion,” and
“even if the statements were defamatory, the statements [were]
privileged and not actionable under the Fair Comment/Opinion
privilege.” Further, the motion asserted that because her
3. Eskamani did not request that the district court hold a hearing
to consider this motion. Likewise, she did not make such a
request in her subsequent motion for summary judgment. Infra
¶ 8.
20190450-CA 3 2020 UT App 137Eskamani v. Auto-Owners Ins.
“statements [were] not defamatory and not actionable,” there
was no basis for the tortious interference claim. Eskamani did
not challenge any of the other elements Auto-Owners was
required to establish to succeed on its defamation and tortious
interference claims, including the element of damages. The
district court in the Defamation Suit denied Eskamani’s motion
for summary judgment without a hearing.
¶9 In September 2012, Eskamani and the contractor settled
the underlying Flooding Suit, but Auto-Owners continued to
pursue the Defamation Suit against Eskamani. In July 2013,
during a deposition conducted pursuant to rule 30(b)(6) of the
Utah Rules of Civil Procedure, 4 Auto-Owners acknowledged it
would not try to establish any actual damages in the Defamation
Suit:
We’re not necessarily looking for damages, because
the damages would be difficult, if not hard to
prove, but we do believe we would be entitled to
probably nominal damages or whatever damages
the court may determine. But we do not intend to
provide or try to prove any loss of business as a
result of her statements.
¶10 Following the deposition, Auto-Owners filed a motion for
summary judgment on its claim of defamation per se, the only
one of its claims that did not require it to prove actual damages.
In the memorandum supporting its motion, Auto-Owners stated
it was “voluntarily dismiss[ing] its claims for tortuous [sic]
4. Rule 30(b)(6) permits a party to depose an organization by
allowing the organization to designate one or more
representatives “to testify on its behalf” “as to matters known or
reasonably available to the organization.” Utah R. Civ. P.
30(b)(6).
20190450-CA 4 2020 UT App 137Eskamani v. Auto-Owners Ins.
interference and defamation,” each of which required Auto-
Owners to prove actual damages.
¶11 Eskamani filed a cross-motion for summary judgment on
the remaining claim of defamation per se. The district court 5
granted Eskamani’s motion, ruling that Auto-Owners’ claim for
defamation per se “fail[ed] as a matter of law” because
Eskamani’s allegedly defamatory statements were “not capable
of sustaining a defamatory meaning.” It also deemed Eskamani’s
statements too “vague and ambiguous as to their meaning to fit
within the narrowly defined [claim for d]efamation per se,” and
it concluded her statements were “capable of having more than
one meaning” and did “not comment on the lawfulness of
[Auto-Owners’] business or its conduct.” Auto-Owners did not
appeal this ruling.
¶12 More than a year later, Eskamani filed the action giving
rise to this appeal (Tort Suit). Initially, she filed a pro se
complaint against Auto-Owners alleging a series of tort claims,
and the parties began conducting discovery. In October 2015,
Eskamani served Auto-Owners with requests for production of
documents that directed Auto-Owners to produce its “complete
underlying claims files relating to” the Defamation Suit.
¶13 Eskamani later retained counsel and filed an amended
complaint alleging two causes of action—wrongful use of civil
proceedings and abuse of process. Auto-Owners’ answer to the
5. Before filing this motion, Eskamani moved to disqualify the
district court judge on the ground that his prior ruling against
Eskamani on her motion for summary judgment could make it
appear that he “lacks impartiality and is or appears to be biased
against” her. Although the judge “assured” Eskamani “such was
not the case,” he nevertheless volunteered to recuse himself, and
a new judge was assigned to preside over the matter.
20190450-CA 5 2020 UT App 137Eskamani v. Auto-Owners Ins.
amended complaint asserted for the first time an advice-of-
counsel defense, alleging it filed the Defamation Suit in reliance
on the advice of its attorney. Auto-Owners then amended its
earlier discovery responses and produced documents supporting
its new defense, after which Eskamani took the depositions of
three of Auto-Owners’ employees. During one deposition, an
employee testified that his decision to proceed with the
Defamation Suit was based in part on a written opinion by Auto-
Owners’ Utah attorney, a copy of which should have been “in
the file” produced to Eskamani.
¶14 Eskamani thereafter served notice of the deposition of
Auto-Owners’ Utah attorney. But Auto-Owners asked Eskamani
to postpone the deposition until after the district court had ruled
on a then-pending motion for summary judgment challenging
Eskamani’s standing to prosecute the Tort Suit. When Eskamani
refused, Auto-Owners sought relief from the court, indicating it
would “voluntarily produce [its Utah attorney] once the Court
has had an opportunity to review this matter and rule that
[Eskamani] has standing.” The court granted the requested
relief, continuing the deposition “until after the Court rules on
[Auto-Owners’] Motion for Summary Judgment regarding
[Eskamani’s] standing in this case.”
¶15 In November 2016, on the final day of fact discovery,
Auto-Owners supplemented its prior disclosures, producing 715
pages of documents relevant to its advice-of-counsel defense.
Eskamani responded with a motion, “pursuant to Utah Rules of
Civil Procedure 26, 33 and 37,” asking the district court to “enter
an order striking Auto-Owners’ reliance-on-the-advice-of-
counsel defense, precluding Auto-Owners from using 715 pages
of recently-disclosed documents at trial, and barring [Auto-
Owners’ attorney] from testifying at trial.”
¶16 The court denied the motion, reasoning that requests for
sanctions “are properly addressed in the context of rule 37” of
20190450-CA 6 2020 UT App 137Eskamani v. Auto-Owners Ins.
the Utah Rules of Civil Procedure, “which provides ‘the court,
upon motion, may impose appropriate sanctions for the failure to
follow its orders.’” (Quoting Utah R. Civ. P. 37(b).) But “[a]bsent
the existence of such order and a failure to comply therewith,
rule 37 does not authorize imposition of sanctions.” The court
accordingly denied Eskamani’s request to strike Auto-Owners’
advice-of-counsel defense.
¶17 Auto-Owners then filed a motion for summary judgment
on Eskamani’s remaining claims for abuse of process and
wrongful use of civil proceedings. After briefing and oral
argument, the district court granted the motion, concluding
Eskamani had failed to present sufficient evidence to establish
either claim. Eskamani timely appeals.
ISSUES AND STANDARDS OF REVIEW
¶18 Eskamani argues the district court erred in granting Auto-
Owners’ motion for summary judgment on her claims for
wrongful use of civil proceedings and abuse of process. “We
review a district court’s decision to grant summary judgment for
correctness, granting no deference to the district court’s
conclusions.” Gillmor v. Summit County, 2010 UT 69, ¶ 16, 246
P.3d 102 (quotation simplified).
¶19 Eskamani also argues the district court erred in denying
her motion to strike Auto-Owners’ advice-of-counsel defense.
Specifically, she asserts the court erred in ruling that a party
cannot seek exclusion of untimely disclosed documents unless
the nonproducing party has violated a court order. “The proper
interpretation of a rule of procedure is a question of law,” which
we review for correctness. Ostler v. Buhler, 1999 UT 99, ¶ 5, 989
P.2d 1073.
20190450-CA 7 2020 UT App 137Eskamani v. Auto-Owners Ins.
ANALYSIS
I. Wrongful Use of Civil Proceedings
¶20 Eskamani first argues the district court erred in
dismissing her claim for wrongful use of civil proceedings. She
contends the court improperly determined that the interlocutory
order denying her “limited motion for summary judgment in the
Defamation Suit” established probable cause “for all claims
brought against [her] in that suit.” We agree.
¶21 Wrongful use of civil proceedings is a tort that “consists
in instituting or maintaining civil proceedings for an improper
purpose and without a justifiable basis.” Gilbert v. Ince, 1999 UT
65, ¶ 19, 981 P.2d 841. Our supreme court has determined that to
succeed on such a claim, one must satisfy the criteria set forth in
the Restatement (Second) of Torts. Id. The Restatement provides
that one is “subject to liability . . . for wrongful civil
proceedings” if he or she brings suit against another (1) “without
probable cause, and primarily for a purpose other than that of
securing the proper adjudication of the claim” and (2) “the
proceedings . . . terminated in favor of the person against whom
they [were] brought.” Id. (quoting Restatement (Second) of Torts
§ 674 (Am. Law Inst. 1997)). In this context, probable cause has
two elements. First, the person or entity initiating the civil
proceeding must “reasonably believe[] in the existence of the
facts upon which the claim is based” and, second, they must
“correctly or reasonably believe[] that under those facts the claim
may be valid under the applicable law.” Id. (quotation
simplified).
¶22 Eskamani’s amended complaint in the Tort Suit alleged
Auto-Owners was liable for wrongful use of civil proceedings
for “bringing and prosecuting the Defamation Suit” “without
probable cause” and primarily for improper purposes. Auto-
Owners moved for summary judgment in the Tort Suit on the
20190450-CA 8 2020 UT App 137Eskamani v. Auto-Owners Ins.
narrow ground that, as a matter of law, Eskamani could not
establish Auto-Owners lacked probable cause to initiate the
Defamation Suit. Citing Parrish v. Latham & Watkins, 400 P.3d 1(Cal. 2017), a California case, Auto-Owners argued the court’s
denial of Eskamani’s first motion for summary judgment in the
Defamation Suit conclusively established Auto-Owners had
probable cause to bring and maintain the entire Defamation Suit
pursuant to the “interim adverse judgment rule.” Under this
rule, the denial of a defensive motion for summary judgment in
the underlying case ordinarily “establishes probable cause to
bring the underlying action.” Id. at 8 (quotation simplified). This
application of the rule is premised on the notion that a “judge’s
denial of summary judgment accurately predicts that reasonable
lawyers would find a case arguably meritorious.” Roberts v.
Sentry Life Ins., 76 Cal. App. 4th 375, 384 (1999).
¶23 Relying on the interim adverse judgment rule, the district
court granted Auto-Owners’ motion for summary judgment. The
court recognized that the court in the Defamation Suit granted
Eskamani’s second motion for summary judgment, but reasoned
that its “decision denying [her] first summary judgment motion
was . . . conclusive evidence of probable cause.”
¶24 We disagree. First, the interim adverse judgment rule, on
which both Auto-Owners and the district court relied, has not
been adopted by Utah courts. Second, even if it were the law in
Utah, for the reasons set forth below, the rule would not operate
to bar the claim here.
¶25 As applied in the context of denial of a defendant’s
motion for summary judgment, California courts have justified
application of the interim adverse judgment rule on the rationale
that the denial of a defendant’s motion for summary judgment
normally provides “persuasive evidence that a suit does not
totally lack merit.” Id. at 383. Purportedly this is the case because
a judge denies a defensive summary judgment motion if there
20190450-CA 9 2020 UT App 137Eskamani v. Auto-Owners Ins.
are “genuine issues of material fact” and “the moving party is
not entitled to judgment as a matter of law.” Id. (quotation
simplified). “These conclusions necessarily imply that the judge
finds at least some merit in the claim” as a whole. Id. But this
reasoning is too broad because it does not account for the reality
that a motion for summary judgment may be denied for a
number of reasons, including that
the trial court may not wish to sift through the
voluminous documents filed in support of or
against it. Or a court may exercise its discretion to
deny an otherwise proper summary judgment
motion on the grounds that further development of
the case will sharpen the facts and law at issue,
lead to a more accurate or just decision, or enhance
the court’s legal analysis. In some cases, a court
might conclude that a trial will actually consume
less court time than would be needed to determine
the summary judgment motion.
Health Grades, Inc. v. Boyer, 2012 COA 196M, ¶ 32, 369 P.3d 613(quotation simplified), rev’d on other grounds 2015 CO 40, 359
P.3d 25; see also Chalpin v. Snyder, 207 P.3d 666, 672 (Ariz. Ct.
App. 2008) (“We have previously held that denying a motion for
summary judgment and allowing a claim to go to the jury is not
conclusive evidence that a party initiating a claim had probable
cause to bring it for purposes of a malicious prosecution
action.”); Bacon v. Reimer & Braunstein, LLP, 2007 VT 57, ¶¶ 6–7,
929 A.2d 723 (concluding the denial of a defensive summary
judgment motion did not establish, as a matter of law, that the
plaintiffs had probable cause to bring the action because the
ruling contained “little analysis of the facts or law” and therefore
did not constitute a “qualitative merits determination”).
Moreover, as in this case, a motion for summary judgment need
not—and often does not—attack all the elements of a plaintiff’s
claim, in which event there is no reason to conclude the court, by
20190450-CA 10 2020 UT App 137Eskamani v. Auto-Owners Ins.
denying the motion, has passed any judgment whatsoever on
the merits of a claim as a whole.
¶26 For example, a defendant might move for summary
judgment on the ground that she owed no duty, that she was
immune, or that the claim is barred by the statute of limitations.
Such arguments do not require the court to evaluate all the
elements a plaintiff must establish to succeed on her claim. Nor
do they require that a court rule on issues of breach, causation,
or damages. When a summary judgment motion is decided on
limited grounds, its denial does not suggest the court found
merit in the unaddressed issues, but only that those issues have
been deferred to another day. In short, the adverse ruling is not
necessarily evidence that the judge was ruling in the non-
moving party’s favor on any or all of the unchallenged elements.
¶27 Eskamani’s first motion for summary judgment in the
Defamation Suit was limited in scope; it did not challenge each
element Auto-Owners was required to prove to succeed on its
claims for defamation, defamation per se, and tortious
interference.
¶28 To establish a claim for defamation, a plaintiff must show
“(1) the defendant published the statements in print or orally;
(2) the statements were false; (3) the statements were not subject
to privilege; (4) the statements were published with the requisite
degree of fault; and (5) the statements resulted in damages.”
Jacob v. Bezzant, 2009 UT 37, ¶ 21, 212 P.3d 535 (quotation
simplified). Although a claim of defamation per se does not
require a plaintiff to prove actual damages, a statement gives
rise to a claim of defamation per se only when it is false and it
“allege[s] criminal conduct on the part of the plaintiff or conduct
which is incongruous with the exercise of a lawful business,
trade, profession, or office.” Westmont Residential LLC v. Buttars,
2014 UT App 291, ¶ 22, 340 P.3d 183 (quotation simplified). And
to succeed on a claim for intentional interference with economic
20190450-CA 11 2020 UT App 137Eskamani v. Auto-Owners Ins.
relations, “a plaintiff must demonstrate (1) the defendant
intentionally interfered with the plaintiff’s existing or potential
economic relations, (2) for an improper purpose or by improper
means, (3) causing injury to the plaintiff.” 6 Anderson Dev. Co. v.
Tobias, 2005 UT 36, ¶ 20, 116 P.3d 323 (quotation simplified).
¶29 In her first motion for summary judgment, Eskamani
argued only that Auto-Owners’ “causes of action against [her]
fail[ed] because . . . the statements alleged in [Auto-Owners’
complaint] are not capable of sustaining a defamatory meaning,
as they are vague statements of opinion,” and “even if the
statements were defamatory, the statements are privileged and
not actionable.” Moreover, she argued that because her
“statements are not defamatory and not actionable,” the tortious
interference claim also failed because “there is no basis to
support [Auto-Owners’] allegations that [Eskamani] interfered
with their economic relations by an improper means or with an
improper purpose.”
¶30 In so arguing, Eskamani focused on only some of the
elements necessary to establish the claims Auto-Owners asserted
in the Defamation Suit. She attacked the elements of defamation
and defamation per se that provide a statement is defamatory
when it is false and not subject to privilege, see Jacob, 2009 UT 37,
¶ 21; Westmont Residential, 2014 UT App 291, ¶ 22, and also
consequently attacked the improper means element necessary to
establish a claim for intentional interference with economic
relations, see Anderson Dev. Co., 2005 UT 36, ¶ 20. But these
6. We note Eskamani filed her motion in the Defamation Suit
prior to our supreme court’s decision in Eldridge v. Johndrow,
2015 UT 21, 345 P.3d 553, in which the court expressly
abandoned the improper-purpose doctrine. Id. ¶¶ 14, 42–46
(concluding “improper purpose, in the absence of any improper
means, should not be a basis for tortious interference liability”).
20190450-CA 12 2020 UT App 137Eskamani v. Auto-Owners Ins.
limited challenges did not require the district court to analyze
whether Auto-Owners could establish the other elements of its
claims. Specifically, the court did not address damages or the
elements of defamation per se, because neither of these had been
challenged. In short, the court in the Defamation Suit was able to
dispose of the motion for summary judgment without reaching
the ultimate merits of Auto-Owners’ claims. In such a case, the
denial of a defendant’s motion for summary judgment is an
insufficient basis for conclusively determining the plaintiff had
probable cause for filing suit.
¶31 Because Eskamani’s first motion for summary judgment
in the Defamation Suit did not specifically challenge all the
elements of Auto-Owners’ claims, we conclude the district court
erred in ruling the denial of this motion was sufficient to
establish probable cause as a matter of law. 7 Thus, we reverse the
district court’s grant of summary judgment to Auto-Owners on
Eskamani’s claim for wrongful use of civil proceedings.
II. Abuse of Process
¶32 Eskamani next asserts the district court erred when it
dismissed her claim alleging Auto-Owners’ filing and
maintenance of the Defamation Suit constituted an abuse of
process. Eskamani maintains the Defamation Suit was motivated
by an improper purpose and argues the district court erred in
ruling she had failed to point to any independent conduct on the
part of Auto-Owners corroborating that allegedly improper
purpose.
7. Eskamani also argues Auto-Owners is collaterally estopped
from arguing it had probable cause to bring the Defamation Suit.
Because we are reversing based on the district court’s
application of the interim adverse judgment rule, we need not
reach Eskamani’s alternative argument.
20190450-CA 13 2020 UT App 137Eskamani v. Auto-Owners Ins.
¶33 “A plaintiff may state a cause of action for abuse of
process against a person who uses a legal process against
another primarily to accomplish a purpose for which it is not
designed.” Bennett v. Jones, Waldo, Holbrook & McDonough, 2003
UT 9, ¶ 47, 70 P.3d 17 (quotation simplified). But abuse of
process is a “disfavored cause[] of action” and should be
narrowly construed because of “the potential to impose an
undue chilling effect on the ordinary citizen’s willingness to
bring a civil dispute to court.” Anderson Dev. Co. v. Tobias, 2005
UT 36, ¶ 59, 116 P.3d 323 (quotation simplified); see also id.(collecting cases). “A claim for abuse of process requires the
plaintiff to show (1) that the defendant used legal process, (2) to
accomplish an improper purpose or purpose for which that
process was not designed, (3) causing the plaintiff’s harm.”
Mountain West Surgical Center, LLC v. Hospital Corp. of Utah, 2007
UT 92, ¶ 11, 173 P.3d 1276.
¶34 To succeed on an abuse of process claim, the plaintiff
“must allege both an ulterior purpose and a willful act in the use
of the process not proper in the regular conduct of the
proceeding.” Hatch v. Davis, 2006 UT 44, ¶ 36, 147 P.3d 383(quotation simplified). “To satisfy the willful act requirement, a
party must point to conduct independent of legal process itself
that corroborates the alleged improper purpose.” Id. ¶ 39
(quotation simplified). “Legal process with a bad motive is not
enough. A party must allege ‘a corroborating act of a nature
other than legal process.’” Segment Consulting Mgmt., LTD. v.
Streamline Mfg., LLC, No. 2:19-CV-933 TS–EJF, 2020 WL 907154,
at *3 (D. Utah Feb. 25, 2020) (quoting Hatch, 2006 UT 44, ¶ 39).
¶35 In dismissing Eskamani’s abuse of process claim, the
district court determined she had not presented evidence of a
willful act on the part of Auto-Owners corroborating its alleged
improper purpose in filing the Defamation Suit. Eskamani
contends this determination was erroneous because she
presented evidence of “an improperly filed [settlement offer] in
20190450-CA 14 2020 UT App 137Eskamani v. Auto-Owners Ins.
the [Flooding Suit] that conditioned settlement in that case on
Ms. Eskamani agreeing to refrain from ever commenting on
Auto-Owners.” She asserts that filing an unaccepted settlement
offer with the court in a case to which she was not a party “is an
improper act not part of the normal process of litigation” and
argues “[b]oth the procedure and terms of Auto-Owners’
[settlement offer] were not part of the ordinary process of a
lawsuit.”
¶36 The district court correctly observed the “sole
‘corroborating act’” advanced by Eskamani was “the inclusion,
in a settlement proposal made in the [Flooding Suit], of a
demand that Ms. Eskamani take down allegedly defamatory
material.” But the court concluded the settlement proposal
nevertheless was still “part of the legal process in the [Flooding
Suit] and is therefore not ‘independent of legal process itself.’”
(Quoting Hatch, 2006 UT 44, ¶ 37.) Relying on the case of Bennett
v. Jones, Waldo, Holbrook & McDonough, 2003 UT 9, 70 P.3d 17, it
further reasoned that even if Auto-Owners had filed the
Defamation Suit for the ulterior purpose of gaining an advantage
in negotiating a settlement in the Flooding Suit, such an ulterior
purpose is insufficient to sustain a claim for abuse of process
because Eskamani had failed to come forth with any evidence
that Auto-Owners had used any process in the Defamation Suit
for any purpose other than prosecuting its claims in that action.
¶37 The district court’s reasoning is sound. The only willful
acts Eskamani identified are (1) presenting a settlement offer that
included, among other things, “a condition that [she] refrain
from ever commenting about anything relating to Auto-Owners,
whether defamatory or not,” and (2) filing that unaccepted
settlement offer with the district court. In concluding these
actions do not satisfy the willful act requirement, we find
persuasive the case of Rusakiewicz v. Lowe, 556 F.3d 1095 (10th
Cir. 2009). In that case, the court grappled with whether the
plaintiffs had properly pleaded a claim for abuse of process
20190450-CA 15 2020 UT App 137Eskamani v. Auto-Owners Ins.
arising from the defendant’s filing of a prior defamation suit,
focusing specifically on whether the plaintiff had satisfied the
“willful act requirement.” Id. at 1103–04 (quotation simplified).
To satisfy that requirement, the plaintiffs relied solely on a
settlement offer made by the defendant in the defamation suit,
which “proposed that [the plaintiffs] agree, in exchange for
dismissal, to make no comments or communication of any
nature relating in any manner to alleged criminal action or
violations of the law by any person concerning the transfer of
members.” Id. at 1104 (quotation simplified). The court
concluded the offer was appropriate and thus did not satisfy the
willful act requirement because “the attempt to settle the
[defamation] case was a part of, not an act outside of, the regular
conduct of legal process.” Id. (quotation simplified). It reasoned
the aim of the settlement offer was to “end . . . the defendant’s
alleged defamatory statements,” which “is not a step beyond the
purview of legal action for defamation.” Id. (quotation
simplified). Moreover, because any “difference between the goal
sought by the proffered settlement and the goal sought by the
lawsuit” was negligible, “[i]t would be strange, and contrary to
common legal practice, to regard such a settlement as an
improper use of the legal process.” Id.
¶38 Here, the settlement offer from Auto-Owners provided
that “upon settlement” Eskamani “or anyone on her behalf shall
stop all contact of whatever nature with [Auto-Owners], and/or
any other person or entity in regards to this lawsuit or any other
subject matter, and shall refrain from oral or written publishing
of any kind in relationship to [Auto-Owners].” As was the case
in Rusakiewicz, the settlement offer had a dual purpose: (1) to
settle the underlying Flooding Suit and (2) to prevent Eskamani
from making publicly disparaging statements about the
company. Such “[n]on-disparagement clauses are common
contractual provisions.” Patterson v. Knight, 2017 UT App 22, ¶ 9,
391 P.3d 1075. Because the purpose of a settlement offer is to end
20190450-CA 16 2020 UT App 137Eskamani v. Auto-Owners Ins.
the case on the terms of the offering party, a settlement offer
containing a non-disparagement clause does not rise to the level
of a willful act independent of the legal process giving rise to an
abuse of process claim. See Rusakiewcz, 556 F.3d at 1104 (“[F]iling
a lawsuit and performing ordinary acts in the regular course of
the legal proceedings is not abuse of process even if the goals of
the lawsuit are nefarious and improper.”). Moreover, even
assuming Auto-Owners later initiated the Defamation Suit with
the ulterior motive of leveraging a settlement in the Flooding
Suit, such an ulterior motive is insufficient to give rise to an
abuse of process claim under the circumstances presented here
because “there is no action for abuse of process when the process
is used for the purpose for which it is intended, but there is an
incidental motive of spite or an ulterior purpose of benefit to the
defendant.” Bennett, 2003 UT 9, ¶ 49 (quotation simplified).
¶39 We are similarly unpersuaded by Eskamani’s assertion
that Auto-Owners’ filing of the unaccepted settlement offer with
the district court constitutes an abuse of process not proper in
the regular conduct of the proceeding that corroborates its
alleged improper purpose in filing the Defamation Suit. Indeed,
filing the offer was not improper. The settlement offer was made
pursuant to rule 68 of the Utah Rules of Civil Procedure. Relying
on the portion of the rule that specifies the mechanism for
obtaining a judgment based on an accepted offer of judgment,
Eskamani contends that only accepted offers of judgment may
be filed with the court. But rule 68 is not so prohibitive. It
provides:
(c) An offer made under this rule shall:
(1) be in writing;
(2) expressly refer to this rule;
(3) be made more than 10 days before trial;
(4) remain open for at least 10 days; and
(5) be served on the offeree under Rule 5.
20190450-CA 17 2020 UT App 137Eskamani v. Auto-Owners Ins.
Acceptance of the offer shall be in writing and
served on the offeror under Rule 5. Upon
acceptance, either party may file the offer and
acceptance with a proposed judgment under Rule
58A.
Utah R. Civ. P. 68(c) (2011). 8 Subsection (c)(5) of the rule requires
that rule 68 settlement offers be served in accordance with rule 5.
We accordingly turn to rule 5 to assess the propriety of the filing
of the settlement offer.
¶40 Auto-Owners’ filing of the unaccepted settlement offer
was permitted under rule 5. Rule 5(b), which describes how
service is made, expressly states that “a party shall serve a paper
under this rule . . . upon any person with an electronic filing
account who is a party or attorney in the case by submitting the
paper for electronic filing.” Id. R. 5(b)(1)(A)(i). Because the rule
provides that one of the mechanisms for serving a paper is to file
it with the court, Eskamani’s argument that the filing was not
authorized is inconsistent with the language of the rule.
¶41 And at the relevant time, rule 5(d) required that the offer
be filed with the court. It stated, “[a]ll papers after the complaint
required to be served upon a party shall be filed with the court
either before or within a reasonable time after service.” Id. R.
5(d). Thus, because an offer under rule 68 is a paper that must be
served under rule 5, see id. R. 68(c)(5), and because compliance
with rule 5 required that the paper be filed with the court “either
before or within a reasonable time after service,” id. R. 5(d)
(emphasis added), it was appropriate (and required) for Auto-
Owners to file the offer with the court.
8. The settlement offer was filed on September 28, 2011. We
therefore apply the version of the Utah Rules of Civil Procedure
in effect at that time.
20190450-CA 18 2020 UT App 137Eskamani v. Auto-Owners Ins.
¶42 In short, we agree with the district court’s conclusion that
Eskamani’s abuse of process claim was subject to dismissal
because she failed to present any evidence of a willful act on the
part of Auto-Owners corroborating its alleged improper purpose
in filing the Defamation Suit. We discern nothing improper
about the terms of the settlement offer in the Flooding Suit made
by Auto-Owners. And we similarly find nothing improper about
the fact that the unaccepted offer was filed with the court.
Accordingly, we affirm the district court’s grant of summary
judgment to Auto-Owners on Eskamani’s abuse of process
claim.
III. Motion for Sanctions
¶43 Eskamani challenges the district court’s denial of her
“Motion to Strike Auto-Owners’ Reliance-on-the-Advice-of-
Counsel Defense and for other Rule 37 Sanctions.” Eskamani’s
motion asked the court to impose three sanctions against Auto-
Owners under “Utah Rules of Civil Procedure 26, 33 and 37”
based on its failure to timely produce documents supporting its
advice-of-counsel defense and its cancellation of the deposition
of Auto-Owners’ Utah attorney. First, Eskamani sought to
preclude Auto-Owners from introducing into evidence the 715
pages of documents produced by Auto-Owners on the final day
of fact discovery. Second, she sought to bar Auto-Owners’ Utah
attorney from testifying. And third, she sought an order striking
Auto-Owners’ advice-of-counsel defense.
¶44 The district court ruled all three requests were “properly
addressed in the context of rule 37, which provides ‘the court,
upon motion, may impose appropriate sanctions for the failure to
follow its orders.’” (Quoting Utah R. Civ. P. 37(b).) Because
Eskamani had not obtained a predicate order, the court denied
her motion for sanctions, reasoning that “[a]bsent the existence
of [an] order and a failure to comply therewith, rule 37 does not
authorize imposition of sanctions.”
20190450-CA 19 2020 UT App 137Eskamani v. Auto-Owners Ins.
¶45 On appeal, Eskamani argues the district court erred in
analyzing her motion under rule 37. She argues her request for
sanctions should have been analyzed under rule 26(d)(4) of the
Utah Rules of Civil Procedure, which did not require her to
obtain a predicate discovery order from the court. Auto-Owners
contests this framing of the issue, asserting the court properly
declined to grant the requested relief under rule 37. We conclude
Eskamani’s request to exclude the untimely disclosed documents
is governed by rule 26, while her requests to strike the advice-of-
counsel defense and the testimony of Auto-Owners’ Utah
attorney are governed by rule 37.
¶46 Rule 26 governs discovery generally. It provides, among
other things, that a party may obtain discovery through requests
for production of documents. Utah R. Civ. P. 26(c)(1). Responses
for such requests must be “based on the information then known
or reasonably available to the party,” id. R. 26(d)(1), and must be
supplemented in a timely manner, id. R. 26(d)(5). Importantly,
“[i]f a party fails to disclose or to supplement timely a disclosure
or response to discovery, that party may not use the undisclosed
witness, document or material at any hearing or trial unless the
failure is harmless, or the party shows good cause for the
failure.” Id. R. 26(d)(4).
¶47 The plain language of rule 26(d)(4) clearly directs that the
sanction for failure to properly respond to a discovery request
under rule 26 is automatic—it does not require a predicate
discovery order. The comments to the rule reinforce the
automatic nature of the exclusion sanction:
If a party fails to disclose or to supplement timely
its discovery responses, that party cannot use the
undisclosed witness, document, or material at any
hearing or trial, absent proof that non-disclosure
was harmless or justified by good cause. More
complete disclosures increase the likelihood that
20190450-CA 20 2020 UT App 137Eskamani v. Auto-Owners Ins.
the case will be resolved justly, speedily, and
inexpensively. Not being able to use evidence that
a party fails properly to disclose provides a
powerful incentive to make complete disclosures.
This is true only if trial courts hold parties to this
standard. Accordingly, although a trial court
retains discretion to determine how properly to
address this issue in a given case, the usual and
expected result should be exclusion of the
evidence.
Id. R. 26 advisory committee notes.
¶48 As Eskamani correctly observes, both our supreme court
and this court have recognized the sanction for violating the
discovery response provisions of rule 26 is an automatic and
mandatory exclusion of the documents or testimony not
properly included in the response. Bodell Constr. Co. v. Robbins,
2009 UT 52, ¶ 35, 215 P.3d 933 (citing former Utah R. Civ. P.
37(f)); Dahl v. Harrison, 2011 UT App 389, ¶ 22, 265 P.3d 139(citing former Utah R. Civ. P. 37(f)), abrogated on other grounds by
R.O.A. Gen., Inc. v. Chung J. Dai, 2014 UT App 124, 327 P.3d 1233.
And no predicate discovery order is required before the
exclusionary sanction may be imposed. See Keystone Ins. Agency,
LLC v. Inside Ins., LLC, 2019 UT 20, ¶ 18, 445 P.3d 434 (upholding
exclusion under rule 26(d)(4) without requiring violation of a
prior court order); Segota v. Young 180 Co., 2020 UT App 105,
¶¶ 16–23, 470 P.3d 479 (same); see also Arreguin-Leon v. Hadco
Constr. LLC, 2018 UT App 225, ¶¶ 22, 24–25, 438 P.3d 25(concluding admission of expert’s testimony was improper
where the plaintiff failed to supplement his initial discovery
response), aff’d 2020 UT 59.
¶49 Unlike rule 26, rule 37 conditions the availability of
discovery sanctions upon the failure of a party to follow a
discovery order. Rule 37 outlines the procedure for resolving
20190450-CA 21 2020 UT App 137Eskamani v. Auto-Owners Ins.
discovery disputes. Parties seeking to obtain a discovery order
must file a short statement of discovery issues outlining, among
other things, the relief sought and certifying that the party has in
good faith conferred or attempted to confer with the other
affected parties. Utah R. Civ. P. 37(a). While the statement of
discovery issues may include a request for costs, expenses, and
attorney fees, it may not include a request for sanctions. Id. R.
37(a)(8). In response, the court may enter orders regarding
disclosure or discovery. Id. R. 37(a)(7). And upon motion,
“[u]nless the court finds that the failure was substantially
justified,” it “may impose appropriate sanctions for the failure to
follow its orders,” including sanctions that “prohibit the
disobedient party from supporting or opposing designated
claims or defenses.” Id. R. 37(b).
¶50 The district court appropriately analyzed under rule 37
Eskamani’s claim to exclude the testimony of Auto-Owners’
Utah attorney. Eskamani’s claim to exclude the attorney’s
testimony was not based on Auto-Owners’ failure to disclose
under rule 26, but on its cancellation of the attorney’s
deposition. 9 And Eskamani not only failed to obtain an order
from the court compelling the deposition, she failed to respond
to Auto-Owners’ discovery statement requesting the deposition
be continued. The court therefore correctly reasoned that
Eskamani was not entitled to an order excluding the attorney’s
testimony in light of its order continuing the deposition 10 “until
9. Indeed, Eskamani identified Auto-Owners’ Utah attorney as a
potential witness in her own rule 26 disclosures.
10. As Auto-Owners acknowledged in its opposition to
Eskamani’s motion to strike, the district court’s order merely
continued the attorney’s deposition “until after the Court rules
on [Auto-Owners’] Motion for Summary Judgment regarding
(continued…)
20190450-CA 22 2020 UT App 137Eskamani v. Auto-Owners Ins.
after the Court rules on [Auto-Owners’] Motion for Summary
Judgment regarding [Eskamani’s] standing in this case.”
¶51 The district court also appropriately analyzed Eskamani’s
request to strike Auto-Owners’ advice-of-counsel defense under
rule 37, rather than under rule 26. Although rule 26 provides for
the exclusion of documents and witnesses that are not timely
disclosed, it does not authorize the exclusion of entire claims or
defenses. See id. R. 26(d)(4). Such requests for sanctions are
governed by rule 37. See id. R. 37(b)(4). We therefore hold the
district court correctly analyzed Eskamani’s request to strike
Auto-Owners’ advice-of-counsel defense under rule 37 and
correctly concluded that it was not authorized to exclude the
defense absent the existence of a court order with which Auto-
Owners had failed to comply.
¶52 Although we discern no error in the district court’s rule 37
analysis as it relates to the attorney’s testimony and the advice-
of-counsel defense, we hold the court erred in applying rule 37
to analyze Eskamani’s request to exclude the 715 pages of
documents that Auto-Owners disclosed on the final day of fact
discovery. That request was governed by rule 26(d), 11 which
does not require a party to obtain a court order before seeking
the specified remedy of automatic exclusion. Id. R. 26(d)(4).
(…continued)
[Eskamani’s] standing in this case.” Thus, Eskamani “still has the
opportunity to depose [the attorney]” on remand.
11. Eskamani cited rule 26 in her motion, quoting the language
from subsection (d)(4), which provides that a party who fails to
disclose or supplement her disclosures in a timely manner “may
not use the undisclosed witness, document or material at any
hearing or trial unless the failure is harmless or the party shows
good cause for the failure.” Utah R. Civ. P. 26(d)(4).
20190450-CA 23 2020 UT App 137Eskamani v. Auto-Owners Ins.
¶53 On remand, the district court should analyze Eskamani’s
request to exclude the 715 pages of documents under rule 26. In
conducting its analysis, the court should first determine whether
any of the 715 pages disclosed on the eve of the discovery cut-off
had previously been disclosed. Any documents not timely
disclosed must then be excluded unless Auto-Owners
establishes its failure to disclose was harmless or shows good
cause for its failure. See id. R. 26(d)(4).
CONCLUSION
¶54 The district court erred in dismissing Eskamani’s
wrongful use of civil proceedings claim. We therefore reverse
the court’s dismissal of that claim and remand for further
proceedings consistent with this opinion. But the court did not
err in dismissing Eskamani’s abuse of process claim, because
Eskamani did not satisfy the willful act requirement by
identifying conduct corroborating Auto-Owners’ alleged
improper purpose for filing the Defamation Suit. Finally, we
affirm the court’s denial of Eskamani’s motion to strike Auto-
Owners’ advice-of-counsel defense and to exclude the testimony
of its attorney. But we reverse the court’s denial of Eskamani’s
motion to exclude the 715 pages of documents produced on the
final day of fact discovery and remand that issue to the district
court for consideration under rule 26(d)(4) of the Utah Rules of
Civil Procedure.
¶55 Affirmed in part and reversed in part.
20190450-CA 24 2020 UT App 137