Elite Legacy Corporation v. Schvaneveldt , 391 P.3d 222 ( 2016 )

2016 UT App 228THE UTAH COURT OF APPEALS
ELITE LEGACY CORPORATION, ASPENWOOD REAL
ESTATE CORPORATION, AND HILARY WING,
Appellees,
v.
CHARLES SCHVANEVELDT,
Appellant.
Opinion
Nos. 20130746-CA and 20140978-CA
Filed November 17, 2016
Second District Court, Ogden Department
The Honorable Noel S. Hyde
The Honorable Michael D. Lyon
No. 060906802
Karra J. Porter and Phillip E. Lowry, Attorneys
for Appellant
L. Miles LeBaron and Dallin T. Morrow, Attorneys
for Appellees
JUDGE J. FREDERIC VOROS JR. authored this Opinion, in which
JUDGES GREGORY K. ORME and KATE A. TOOMEY concurred.
VOROS, Judge:
¶1 In this opinion we address two of four appeals arising
from a single lawsuit over a failed real estate deal. 1 The lawsuit
involves a dispute over a real estate sales commission. On one
hand are a real estate brokerage and related individuals
(Plaintiffs); on the other, the property sellers.
1. The other two appeals are discussed in Wing v. Code, 2016 UT
App 230 (addressing case 20130854-CA) and Wing v. Still Standing
Stable LLC, 2016 UT App 229 (addressing case 20130768-CA).
Elite Legacy Corporation v. Schvaneveldt
¶2 In case 20140978-CA, appellant Charles Schvaneveldt, one
of the sellers, challenges the denial of his motion under rule
60(b) of the Utah Rules of Civil Procedure. That motion sought
to vacate the judgment below on the ground that Plaintiffs lacked
standing to bring or maintain the action. In case 20130746-CA,
Schvaneveldt challenges Plaintiffs’ standing, the trial court’s
ruling that Plaintiffs earned the commission, and the trial court’s
denial of his summary judgment motion seeking to avoid
personal liability for the commission. We affirm on all issues in
both appeals.
BACKGROUND
The Parties
¶3 Because of the case’s complicated record and lengthy
history, we begin by identifying the relevant parties and non-
parties on appeal.
¶4 Plaintiffs are all related to a company originally known as
Aspenwood Real Estate Corporation. Aspenwood was a real
estate brokerage company doing business as “Re/Max Elite.”
Hilary “Skip” Wing and others founded Aspenwood, and Wing
at times acted as its principal broker. Tim Shea worked for
Aspenwood as a real estate agent. Elite Legacy Corporation has
since subsumed Aspenwood. We refer to these parties
collectively as Plaintiffs.
¶5 The defendants are all related to the property sellers.
Charles “Chuck” Schvaneveldt is the sole member of Still
Standing Stable LLC (Still Standing). Cathy Code is
Schvaneveldt’s wife. Still Standing owned the property in
question and, Schvaneveldt claims, contracted with Shea in the
For Sale By Owner Agreement. For ease of reference—though
not precisely accurate—we refer to Code, Schvaneveldt, and Still
Standing collectively as Sellers.
20130746-CA and
20140978-CA 2 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
History of Aspenwood and Re/Max Elite
¶6 In 2004, Wing and Dale Quinlan—at that time both
licensed principal brokers—together with other individuals
bought a real estate brokerage called Aspenwood Real Estate
Corporation. To align their new brokerage with the national
Re/Max real estate franchise, Quinlan submitted a “DBA
application” and registered the assumed name “Re/Max Elite”
with the Utah Division of Corporations and Commercial Code
(the Division). Quinlan listed himself as the registered agent and
checked a box indicating that he—not Aspenwood—was the
“applicant/owner” of the assumed name. Quinlan, Wing, and
the other owners appear to have jointly operated the
Aspenwood brokerage under the name Re/Max Elite until July
2005, when Quinlan surrendered his broker license. Although
Quinlan remained listed as Re/Max Elite’s registered agent, he
no longer played any role in the management of Aspenwood.
Instead, Wing assumed management of Aspenwood.
Aspenwood continued to conduct business under the assumed
name Re/Max Elite.
¶7 In March 2006 the Division transferred the Re/Max Elite
assumed name from Quinlan to Aspenwood. It did so based on a
transfer letter from Quinlan. The parties disagree as to whether
Quinlan’s signature on the letter is authentic. Plaintiffs maintain
that Quinlan made the change. They rely on the declaration of a
company officer stating that “Dale Quinlan . . . was tasked by the
[Aspenwood] Board of Directors to . . . (1) ensur[e] that
Aspenwood, and not Dale Quinlan only, owned the dba RE/MAX
Elite . . . and (2) mak[e] Shane Thorpe the registered agent.”
Sellers maintain that Quinlan’s signature on the letter was
forged. They rely on a forensic report finding that “it is highly
probable” that the transfer letter was a cut-and-paste forgery.
The Division later invalidated the transfer.
20130746-CA and
20140978-CA 3 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
The Property
¶8 In 1998, Still Standing purchased 170 acres of property in
Weber County (the Property) from the State of Utah School and
Institutional Trust Lands Administration (SITLA). Still Standing
purchased the Property with notice from SITLA that “there is
likely no access” and that SITLA was “not guaranteeing access to
the property.” Four years later, Still Standing sued three of the
Property’s adjoining landowners in an attempt to gain access
across the landowners’ parcels, which separated the Property
from the nearest public road. Still Standing lost the lawsuit and
was unable to secure road access to the Property.2
¶9 After the lawsuit, Still Standing purchased an unrelated
five-acre strip of property located on the opposite side of the
public road (the Strip). Although the Strip bordered the Property
and contained an easement, that easement did not connect to
any public road and thus did not provide access to the Property.
During the underlying litigation, at least two title insurance
companies—including one hired by Sellers—examined the
Property, but no title company was willing to issue a policy
insuring access.
2. In that lawsuit, the trial court found that Still Standing
purchased the Property “without making any attempt to
determine whether there was any legal access” and brought its
action “knowing it had no legal right of ingress/egress to its
land-locked property.” The court ultimately ruled that Still
Standing’s “filing [was] totally frivolous and without factual or
legal basis or merit.” On appeal, the Utah Supreme Court
reversed the trial court’s award of attorney fees because bad faith
had not been established; Still Standing did not “challenge the
trial court’s conclusion that its case was without merit.” See Still
Standing Stable, LLC v. Allen, 2005 UT 46, ¶¶ 8, 17, 122 P.3d 556.
20130746-CA and
20140978-CA 4 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
The FSBO and the REPC
¶10 In January 2006 Cathy Code advertised the Property for
sale by owner in a local newspaper. Tim Shea, a real estate agent
employed by Aspenwood, expressed interest on behalf of a
buyer. After visiting the Property with Schvaneveldt and Code,
Shea sent Sellers a For Sale by Owner Commission Agreement
and Agency Disclosure Agreement (the FSBO) and, on behalf of
potential buyers (Buyers), sent Sellers the first Real Estate
Purchase Contract (the First REPC).
¶11 Both contracts were drafted using standard printed forms.
Sellers submitted a counteroffer to the First REPC. Sellers signed
the FSBO and sent it back to Shea. The two-page FSBO listed
“Re/Max Elite (Layton Branch)” as the “company”; “Tim Shea”
as the authorized agent for the company; and “Chuck and Cathy
Code” as “the seller.” Shea signed the FSBO above the
“company” line, and Code signed the FSBO above the “Sellers’
Signature” line. Among other provisions, the FSBO contained a
brokerage-fee clause, a seller-disclosures clause, an attorney-fee
clause, and an integration clause.
¶12 This litigation centers on the FSBO’s brokerage-fee clause.
That clause sets forth the terms of the real estate commission
agreement:
2. BROKERAGE FEE. The Seller agrees to pay the
Company, irrespective of agency relationship(s), as
compensation for services, a Brokerage Fee in the
amount of $____ or 3% of the acquisition price of
the Property, if the Seller accepts an offer from
Emmett Warren and or Assigns (the “Buyer”), or
anyone acting on the Buyer’s behalf, to purchase or
exchange the Property. The Seller agrees that the
Brokerage Fee shall be due and payable, from the
proceeds of the Seller, on the date of recording of
20130746-CA and
20140978-CA 5 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
closing documents for the purchase or exchange of
the Property by the Buyer or anyone acting on the
Buyer’s behalf. If the sale or exchange is prevented
by default of the Seller, the Brokerage Fee shall
immediately be due and payable to the Company.
After Sellers’ counteroffer to the First REPC lapsed, Shea
forwarded to Sellers a second offer in the form of another Real
Estate Purchase Contract—the REPC relevant to this appeal (the
REPC). Schvaneveldt accepted the second offer by signing and
returning the REPC to Shea. Schvaneveldt checked the
“ACCEPTANCE OF OFFER TO PURCHASE” box, signed his
name above the “Sellers’ Signature” line, and printed his name
above the “Sellers’ Name (PLEASE PRINT)” line. 3 The REPC
3. The copy of the REPC in the record on appeal shows all of this
information. However, Schvaneveldt claims that the copy in the
record does not accurately reflect the original. On page six of the
record copy, Schvaneveldt’s first name, “Chuck,” is irregularly
placed on the left margin of the page, outside of the provided
blank space. Schvaneveldt argues that he wrote “member” in the
“unexplained white space” remaining after his name. He
suggests that the word “member” was “whited out,”
presumably by Shea or someone else at Aspenwood. The trial
court barred Schvaneveldt from mentioning that the original
was not produced, and Schvaneveldt did not preserve a
challenge to this ruling, nor has he appealed it. Thus, we do not
address it. See Pratt v. Nelson, 2007 UT 41, ¶ 14, 164 P.3d 366(“Generally, in order to preserve an issue for appeal . . . the issue
must be specifically raised.” (citations and internal quotation
marks omitted)). Moreover, even assuming Schvaneveldt did
write “member” next to his name, the FSBO—not the REPC—is
the operative contract between Plaintiffs and Schvaneveldt. The
REPC controls the rights and obligations running between
Buyers and Sellers, who have settled their dispute.
20130746-CA and
20140978-CA 6 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
required Buyers to deposit $25,000 in earnest money. It required
Sellers to “convey good and marketable title to Buyer[s] at
Closing by general warranty deed.” And it imposed a 15-day
seller-disclosure deadline, a 60-day due-diligence deadline, and
a 90-day settlement deadline ahead of closing.
¶13 Initially, Buyers and Sellers each fulfilled their REPC
obligations. Buyers deposited $25,000 earnest money with
Aspenwood, and Sellers made the required disclosures. In the
disclosures, Sellers admitted that the Property did not have
access from a public road, but stated that there was “direct
access to the Property through . . . [a] Private Easement.” As the
closing date approached, Buyers became increasingly concerned
about the lack of insurable access to the Property. But they did
not object to the seller disclosures during the 60-day due-
diligence window.
¶14 Before closing, Sellers’ attorney called Buyers’ attorney to
inform him that Sellers would be conveying the Property by
special warranty deed rather than by general warranty deed;
Sellers’ escrow and closing instructions also specified that the
conveyance would be by special warranty deed. Buyers’
attorney responded that a special warranty deed “might be okay
if I can get a title policy that’s going to guarantee [Buyers]
access.” But by the time of closing, no title insurance company—
including one hired by Sellers—was willing to offer a policy
insuring access to the Property. Buyers did not appear at closing.
Pretrial Proceedings
¶15 After the deal fell through, Re/Max Elite brought an
interpleader action to determine who was entitled to the earnest
money it was holding. Re/Max Elite then filed a cross-complaint
seeking a sales commission from Still Standing—and later,
Schvaneveldt and Code—under the FSBO’s brokerage-fee
provision. Sellers counterclaimed. Sellers argued—in eight
20130746-CA and
20140978-CA 7 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
pretrial motions—that no named plaintiff had standing to sue.
Sellers filed six motions under the Assumed Name Statute and
two motions under the Real Estate Licensing and Practices Act.
In each motion, Sellers’ central argument asserted that only
Re/Max Elite’s principal broker, Wing—and not its agent, Shea—
could sue to recover the commission under Utah law. In support,
Sellers submitted a summary judgment motion asserting that
Wing was Re/Max Elite’s principal broker.
¶16 In response, Aspenwood, Elite Legacy, and Wing joined
Re/Max Elite in the action as additional plaintiffs to the lawsuit
to cure any alleged standing deficiency. After Plaintiffs added
Wing, Sellers abandoned their standing arguments until after
trial.
¶17 Both parties filed a flurry of additional pretrial motions.
In February 2010 Schvaneveldt moved for summary judgment,
seeking a ruling that he could not be personally liable for the
sales commission. Schvaneveldt asserted that he was involved in
the sale only as a representative for Still Standing. He was not
personally liable, he argued, because the blank line on the REPC
reserved for the property name was filled in with the words
“Land LLC Still Standing Stables.” Plaintiffs opposed the motion
and argued that Schvaneveldt was personally liable because he
signed the REPC and because the FSBO listed him (along with
Code) as a seller. The court denied Schvaneveldt’s motion
because the FSBO listed Schvaneveldt—not Still Standing—as
the seller.
¶18 In March 2010, Plaintiffs moved for partial summary
judgment, seeking a ruling that Plaintiffs had earned a
commission under the FSBO as a matter of law. Plaintiffs argued
that Sellers became obligated to pay a commission the moment
Sellers accepted an offer—the words used by the FSBO. And
Sellers accepted an offer, Plaintiffs argued, as soon as they
signed the REPC with Buyers. Sellers responded that Plaintiffs
20130746-CA and
20140978-CA 8 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
had not brought a “ready, willing, and able” buyer, that the sale
was to be a cash transaction, and that Shea had altered the REPC
after signing to conceal the deal’s cash transaction status. The
trial court granted the motion, ruling that Plaintiffs had earned a
commission because Sellers had accepted an offer from Buyers.
The court explained that any alleged changes to the REPC were a
red herring.
¶19 In February 2011 Plaintiffs again moved for summary
judgment on the commission claim and on all of Sellers’
counterclaims. In March 2011 Still Standing filed a cross-motion
for summary judgment, alleging that a breach of Plaintiffs’
fiduciary duties had caused the sale to fail. The trial court heard
oral arguments on the motions. The court first ruled that the sale
failed due to Sellers’ failure to guarantee Buyers’ access to the
Property by providing a general warranty deed or other
assurance of access:
[I]t is undisputed that the lack of a guaranteed
access was the sole reason . . . that the transaction
failed. . . . [I]t strains credulity to think that
somebody would fork over four million [dollars]
without a general warranty deed or at least some
kind of a guarantee under a special warranty deed
that there would be an access.
In light of this ruling, the trial court dismissed Still Standing’s
fiduciary-duty claims against Plaintiffs on the ground that
Sellers’ refusal to convey by general warranty deed—prompted
by concerns about access and not any breach of fiduciary duty—
caused the deal to fail.
¶20 After the trial court dismissed the fiduciary-duty claims
and ruled that Plaintiffs had earned the commission, the only
question left for trial was which party was responsible to pay
that commission.
20130746-CA and
20140978-CA 9 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
Trial
¶21 In a pretrial hearing with both sides present, the trial
court suggested that Still Standing could not be liable for the
commission and thus should be dismissed to avoid confusing
the jury. Plaintiffs agreed to release Still Standing so long as
liability would be determined between Schvaneveldt and Code
at trial. The trial court proposed a jury instruction stating that
Still Standing was not liable and that the jury must look only to
Schvaneveldt and Code for liability. Schvaneveldt and Code did
not object to this instruction. Before agreeing to Still Standing’s
dismissal, Plaintiffs reiterated that they would accept the
instruction only if Schvaneveldt and Code would agree not to
argue that Still Standing was the liable party. Again,
Schvaneveldt and Code did not object.
¶22 Trial proceeded and Schvaneveldt and Code did not
mention Still Standing, with one exception: Schvaneveldt argued
that he had signed “Member” next to his name on the REPC,
indicating that he signed in a representative capacity for Still
Standing. When Plaintiffs objected, the court suggested bringing
Still Standing back into the case. Schvaneveldt’s counsel
proposed instructing the jury to disregard the testimony. 4
Plaintiffs agreed to Schvaneveldt’s solution, and the court
instructed the jury accordingly. At the close of evidence,
Schvaneveldt and Code both moved for a directed verdict; the
court granted Code’s motion but denied Schvaneveldt’s. This
ruling left Schvaneveldt as the only remaining potentially liable
4. At oral argument on appeal, Schvaneveldt’s appellate counsel
argued that Schvaneveldt’s trial counsel objected to Still
Standing’s dismissal from the case. However, our review of the
record shows that Schvaneveldt’s trial counsel did not object as
the trial court sought input on Still Standing’s dismissal.
20130746-CA and
20140978-CA 10 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
party. The jury entered a verdict against Schvaneveldt, awarding
damages of $30,000.
¶23 Plaintiffs moved for a new trial, arguing that the damage
award was inadequate because it did not amount to the 3%
commission the court had previously ruled Plaintiffs had
earned. Rather than granting a new trial, the court increased the
judgment to $130,875—3% of the REPC sales price. The court
also awarded Plaintiffs attorney fees and interest. The court
entered a total judgment in the amount of $362,485.96 against
Schvaneveldt. Schvaneveldt also moved for a new trial on
multiple grounds, including that “[Schvaneveldt] should have
been allowed to raise the misconduct of Re/Max and Tim Shea,”
that “Tim Shea’s lawyer violated [Schvaneveldt’s] attorney-client
privilege,” and “cumulative errors.” The trial court denied the
motion on all grounds.
Post-trial Litigation Concerning Plaintiff’s Standing
¶24 In the months following trial, Schvaneveldt filed several
rule 60(b) motions. 5 Each relied on evidence that, Schvaneveldt
argued, showed that the assumed name Re/Max Elite was
registered to Dale Quinlan, making him the only person with
standing to sue for the FSBO commission. That evidence
includes the following:
• documents from the Division showing that Quinlan had
registered the assumed name “Re/Max Elite” with himself
as the registered agent;
• an affidavit from Quinlan averring that he had no
recollection of transferring the assumed name to
5. Following Schvaneveldt’s lead, we treat them as a single
motion for purposes of our analysis.
20130746-CA and
20140978-CA 11 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
Aspenwood and that he never transferred to Aspenwood
his alleged rights to the FSBO commission earnings;
• an “Expert Forgery Report” opining that it was “highly
probable” that the letter requesting the assumed name
registration be transferred from Quinlan to Aspenwood
was a forgery; and
• a document from the State of Utah showing that the
Re/Max Elite assumed name had been re-registered to
Quinlan in December 2013 because of the probable
forgery.
Combined, the post-trial evidence directly contested the
previously uncontested trial testimony of Wing and Shea that
Wing, as Re/Max Elite’s principal broker, had standing to bring
the commission claim on behalf of Plaintiffs.
¶25 Plaintiffs argued that the post-trial evidence should be
excluded as untimely. They also presented post-trial evidence of
their own in the form of the affidavit of Shane Thorpe, one of the
owners of Aspenwood. Thorpe’s affidavit averred that
Aspenwood, not Quinlan, owned the assumed name; that
Quinlan was tasked with registering the assumed name to
Aspenwood and making Thorpe the registered agent; and that
Quinlan prepared several letters designed to make clear that
Aspenwood, not Quinlan, owned the assumed name.
¶26 In addition, while the motions were pending, Quinlan
agreed to dismiss Re/Max Elite’s claim to the commission and
transferred the assumed name Re/Max Elite to Still Standing for
$500.
¶27 Schvaneveldt’s rule 60(b) motion sought to vacate the
judgment on the ground that no named plaintiff had standing to
sue for the commission and thus that the court lacked subject
matter jurisdiction. Schvaneveldt argued that the post-trial
20130746-CA and
20140978-CA 12 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
evidence showed that at all relevant times Quinlan, not Wing,
was the registered broker for Aspenwood. Schvaneveldt relied
on subparagraphs (4) (void judgment), (5) (discharge of
judgment), and (6) (any other reason) of rule 60(b), but not
subparagraph (2) (newly discovered evidence).
¶28 The court denied the motion. It cited several grounds for
its ruling. First, it ruled that the post-trial evidence was untimely
because Schvaneveldt provided no reasons why the evidence
could not have been discovered earlier in the litigation. And
without the post-trial evidence, standing and jurisdiction were
proper. Second, it ruled that Sellers had abandoned their earlier
standing challenge once Wing was added as a plaintiff. Third, it
ruled that the post-trial evidence at most showed only that the
assumed name Re/Max Elite was transferred to Wing a short
time after the FSBO and REPC were signed, not that Quinlan did
not assign the claims at some other time.
ISSUES
¶29 Schvaneveldt raises three issues on appeal. First, he
contends that the trial court erred in denying his rule 60(b)
motion based on lack of standing.
¶30 Second, he contends that the trial court erred in granting
summary judgment and ruling that Plaintiffs had earned a
commission pursuant to the FSBO agreement.
¶31 Third, he contends that “the trial court erred in ruling as a
matter of law that any liability of Schvaneveldt was in his
personal capacity” and not his representative capacity “as a
member of the LLC.”
20130746-CA and
20140978-CA 13 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
ANALYSIS
I. Standing
A. Rule 60(b)
¶32 Schvaneveldt contends that the trial court erroneously
denied his rule 60(b) motion. The motion argued that Plaintiffs
lacked standing to sue for recovery of the sales commission
under the FSBO. In Schvaneveldt’s view, because the FSBO listed
Re/Max Elite as the brokerage, only Re/Max’s principal broker
could bring an action to recover a sales commission. And, he
asserts, although Wing took over as principal broker after
Quinlan’s departure, “Wing was never assigned any interest in
the Re/Max Elite dba, which Quinlan continued to own.”
According to Schvaneveldt, Quinlan was the only person who
could sue for a commission: “In short, the principal broker
statute significantly narrows the class of individuals who might
seek a real estate commission. The dba statute narrows that class
even further, in this case, down to one person: Dale Quinlan.” 6
Schvaneveldt contends that “Plaintiffs cannot cure the standing
defect . . . because . . . Still Standing Stable has now acquired
both the Re/Max Elite dba and all rights of its former owner,
Dale Quinlan.” Thus, Schvaneveldt argues, “Plaintiffs lack
standing to maintain this action against the Defendants.”
¶33 Plaintiffs respond that this argument relies on controverted
evidence that the trial court properly refused to receive; that in
any event, Aspenwood and not Quinlan (who by then had left
6. Schvaneveldt does not argue that Wing was not a principal
broker in his own right or that Aspenwood was not a legitimate
legal entity in its own right. In other words, had Aspenwood
signed the FSBO rather than “Re/Max Elite,” standing would not
be a concern.
20130746-CA and
20140978-CA 14 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
the real estate business) contracted with Schvaneveldt; that any
pleading problem may be cured by amending the complaint;
that if Quinlan held the assumed name, he held it only as an
Aspenwood’s agent, on behalf of Aspenwood; and that the trial
court acted within its discretion in denying Schvaneveldt’s rule
60(b) motion.
¶34 “A denial of a motion to vacate a judgment under rule
60(b) is ordinarily reversed only for an abuse of discretion.”
Jackson Constr. Co. v. Marrs, 2004 UT 89, ¶ 8, 100 P.3d 1211(citation and internal quotation marks omitted). “However, when
a motion to vacate a judgment is based on a claim of lack of
jurisdiction, the district court has no discretion: if jurisdiction is
lacking, the judgment cannot stand without denying due process
to the one against whom it runs.” Id. (citation and internal
quotation marks omitted). “Therefore, the propriety of the
jurisdictional determination, and hence the decision not to
vacate, becomes a question of law upon which we do not defer
to the district court.” Id. (citation and internal quotation marks
omitted).
¶35 Rule 60(b) lists various grounds on which the court may
relieve a party from a final judgment or order:
On motion and upon just terms, the court may
relieve a party or its legal representative from a
judgment, order, or proceeding for the following
reasons: (1) mistake, inadvertence, surprise, or
excusable neglect; (2) newly discovered evidence
which by due diligence could not have been
discovered in time to move for a new trial under
Rule 59(b); (3) fraud (whether previously called
intrinsic or extrinsic), misrepresentation or other
misconduct of an opposing party; (4) the judgment
is void; (5) the judgment has been satisfied,
released, or discharged, or a prior judgment upon
20130746-CA and
20140978-CA 15 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
which it is based has been reversed or vacated, or it
is no longer equitable that the judgment should
have prospective application; or (6) any other
reason that justifies relief.
Utah R. Civ. P. 60(b) (2015). 7 Schvaneveldt requested relief under
subparagraph (4), that the judgment was void; subparagraph (5),
that the judgment had been released, discharged, or otherwise
settled; and subparagraph (6), that the catch-all provision
applied.
1. Rule 60(b)(6)
¶36 Rule 60(b)(6) provides that the court may relieve a party
from a judgment for any reason that justifies relief but is not
included in subparagraphs (1) through (5). Id. R. 60(b)(6). As
“the residuary clause of rule 60(b),” subsection (6) embodies
three requirements: “First, that the reason be one other than those
listed in subdivisions (1) through ([5]); second, that the reason
justify relief; and third, that the motion be made within a
reasonable time.” Laub v. South Central Utah Tel. Ass’n, 657 P.2d
1304, 1306–07 (Utah 1982). Moreover, rule 60(b)(6) “should be
very cautiously and sparingly invoked by the Court only in
unusual and exceptional instances.” Id. at 1307–08 (citation and
internal quotation marks omitted).
7. We cite to the version of the rule in effect at the time the
motion was filed under the principle that we “apply the law as it
exists at the time of the event regulated by the law in question.
Thus, if a law regulates a breach of contract or a tort, we apply
the law as it exists when the alleged breach or tort occurs—i.e.,
the law that exists at the time of the event giving rise to a cause
of action.” State v. Clark, 2011 UT 23, ¶ 13, 251 P.3d 829.
“Similarly, if the law regulates a motion to intervene, we apply
the law as it exists at the time the motion is filed.” Id.20130746-CA and
20140978-CA 16 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
¶37 The trial court rejected Schvaneveldt’s subparagraph (6)
claim on the ground that “there has not been a proper showing
of any separate basis for relief under [subparagraph] (6).” On
appeal, Schvaneveldt does not adequately challenge this ruling.
He argues cursorily that perhaps Plaintiffs’ actions “do not
precisely constitute fraud as contemplated under rule 60(b)(3), or
do not precisely render the judgment void under rule 60(b)(4), or
do not precisely extinguish the judgment under rule 60(b)(5). But
they are certainly a basis to vacate the judgment under the
equitable principles enumerated under the rule.”
¶38 This explanation falls short of demonstrating that the
circumstances of this case are so unusual and exceptional that
the trial court abused its discretion in rejecting Schvaneveldt’s
claim under subparagraph (6).
2. Rule 60(b)(5)
¶39 Rule 60(b)(5) provides that the court may relieve a party
from a judgment on a showing that “the judgment has been
satisfied, released, or discharged, or a prior judgment upon
which it is based has been reversed or vacated, or it is no longer
equitable that the judgment should have prospective
application.” Utah R. Civ. P. 60(b)(5). The trial court rejected
Schvaneveldt’s subparagraph (5) claim on the ground that
Schvaneveldt had submitted insufficient evidence that Quinlan
owned the claim against Schvaneveldt and thus had legal
authority to settle or release the judgment. The idea that Quinlan
owned the claims against Schvaneveldt was, the court concluded,
“a construct” that had only “occurred after trial.”
¶40 On appeal, Schvaneveldt argues that subparagraph (5)
applies to the current case “where through assignment the claim
is extinguished through merger.” Schvaneveldt asserts, “It is
inequitable to enforce a judgment that no longer applies.” As
legal support, Schvaneveldt cites Lamoreaux v. Black Diamond
20130746-CA and
20140978-CA 17 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
Holdings, LLC, 2013 UT App 32, ¶¶ 20–22, 296 P.3d 780. Thus,
Schvaneveldt argues that it is no longer equitable that the
judgment should have prospective application.
¶41 “To begin, the court’s power of equity is only to be
applied under the rule when highly significant changes alter the
landscape of a judgment—for instance, ‘subsequent legislation, a
change in the decisional law, or a change in the operative facts.’”
Utah Res. Int’l, Inc. v. Mark Techs. Corp., 2014 UT 60, ¶ 28, 342
P.3d 779 (quoting 11 Charles Alan Wright & Arthur Miller,
Federal Practice & Procedure § 2863 (3d ed. 2014) (further footnote
material omitted)). “And ‘the burden will be high on those
seeking relief on this ground as they must demonstrate
extraordinary circumstances justifying relief.’” Id. (quoting
Wright & Miller, § 2863).
¶42 Given the substantial burden facing a movant in cases
such as this, we conclude that the trial court did not abuse its
discretion in rejecting Schvaneveldt’s claim under rule 60(b)(5).
Schvaneveldt has not shown that his claim is grounded in
equity. He asserts that the only person entitled to sue for the real
estate commission on the FSBO is Dale Quinlan. But Quinlan
had nothing to do with the FSBO. Even Schvaneveldt does not
claim that Quinlan knew about the Property, the transaction, or
the FSBO, let alone that Quinlan introduced Buyers to Sellers.
Shea, an employee of Aspenwood, contacted Schvaneveldt,
signed the FSBO, and introduced Buyers to the Property. True,
he wrote “Re/Max Elite” rather than “Aspenwood” on the FSBO.
But no evidence, controverted or otherwise, suggests that by
doing so Shea intended to name Quinlan rather than
Aspenwood as the brokerage. Had he simply listed his
employer’s legal name rather than what he believed—correctly,
Aspenwood argues—to be its assumed name, this issue would
never have arisen. It has arisen only because of a claimed filing
error with the Division. The issue is thus grounded in a technical
legal argument, not equity: Schvaneveldt does not claim that in
20130746-CA and
20140978-CA 18 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
fairness, because Quinlan did the work, he should receive the
commission. Accordingly, the trial court did not abuse its
discretion in denying Schvaneveldt’s rule 60(b)(5) motion. 8
3. Rule 60(b)(4)
¶43 Rule 60(b)(4) provides that the court may relieve a party
from a judgment on a showing that the judgment is void. Utah
R. Civ. P. 60(b)(4). The trial court rejected Schvaneveldt’s
subparagraph (4) claim because it found unpersuasive
Schvaneveldt’s contention that Quinlan, “has at all times been
the real party in interest, and is the only party that has the right
to proceed.”
¶44 “Normally, the district court’s denial of a rule 60(b)
motion is reviewed for abuse of discretion.” Migliore v. Livingston
Fin., LLC, 2015 UT 9, ¶ 25, 347 P.3d 394. “But the district court
has no discretion with respect to a void judgment because the
determination that a judgment is void implicates the court’s
jurisdiction.” Id. “Accordingly, the propriety of [the] jurisdictional
determination, and hence the decision not to vacate, becomes a
question of law upon which we do not defer to the district
court.” Id. (alteration in original) (citation and internal quotation
marks omitted).
¶45 However, “we narrowly construe the concept of a void
judgment in the interest of finality.” Id. ¶ 26. A “judgment is
8. We recognize that we are affirming on a legal ground that
varies somewhat from that articulated by the trial court. A
reviewing court may affirm the judgment appealed from “if it is
sustainable on any legal ground or theory apparent on the
record, even though such ground or theory differs from that
stated by the trial court.” Dipoma v. McPhie, 2001 UT 61, ¶ 18, 29
P.3d 1225 (citation and internal quotation marks omitted).
20130746-CA and
20140978-CA 19 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
void under rule 60(b)(4) if the court that rendered it lacked
jurisdiction of the subject matter or parties, or the judgment was
entered without the notice required by due process.” Id. (citation
and internal quotation marks omitted).
¶46 Schvaneveldt contends that the judgment is void because
the trial court lacked subject matter jurisdiction; that the trial
court lacked subject matter jurisdiction because Plaintiffs lacked
standing to sue for the commission they claimed they earned
under the FSBO; that all Plaintiffs lacked standing to sue because
none of them were the registered owners of the assumed name
“Re/Max Elite,” which appears on the FSBO; and that only a
registered owner can bring suit under Utah’s Assumed Name
Statute.
¶47 The Assumed Name Statute prohibits a person or entity
who conducts business under an assumed name, without having
registered with the Division, from suing in the courts of this
state:
Any person who carries on, conducts, or transacts
business under an assumed name without having
complied with the provisions of this chapter, and
until the provisions of this chapter are complied
with:
(1) shall not sue, prosecute, or maintain any
action, suit, counterclaim, cross complaint,
or proceeding in any of the courts of this
state; and
(2) may be subject to a penalty in the form of
a late filing fee determined by the division
director in an amount not to exceed three
times the fees charged under Section 42-2-7
and established under Section 63J-1-504.
20130746-CA and
20140978-CA 20 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
Utah Code Ann. § 42-2-10 (LexisNexis 2014). For reasons
explained above, Schvaneveldt maintains that Quinlan, not any
of the Plaintiffs, “complied with the provisions of this chapter”
to become the registered owner of the assumed name “Re/Max
Elite.” And he has since transferred that assumed name to Still
Standing, so that Plaintiffs cannot cure the flaw in their standing.
Thus, according to Schvaneveldt, the trial court lacked subject
matter jurisdiction:
Rule 60(b)(4) provides for relief from a judgment
that is void. Standing is a matter of subject matter
jurisdiction. A judgment entered by a court that
lacks subject matter jurisdiction is not merely
voidable. . . . See Van Der Stappen v. Van Der
Stappen, 815 P.2d 1335 (Utah Ct. App. 1991). Here,
the Plaintiffs lacked standing, and thus the court
lacked subject matter jurisdiction.
(Parenthetical omitted.)
¶48 Plaintiffs offer several arguments in response. For
example, they argue that trial evidence supported a finding that
Aspenwood had standing; that the court was entitled to reject
evidence presented for the first time nearly a year after trial; that
Plaintiffs presented post-trial evidence refuting Schvaneveldt’s
post-trial evidence; that any failure to comply with the Assumed
Name Statute may be cured and in any event did not mislead
Schvaneveldt; that any standing defect could have been cured by
amending the complaint or reforming the FSBO and REPC; and
that public policy does not allow final judgments to be vacated
based on untimely evidence.
¶49 We reject Schvaneveldt’s contention for a different reason.
Schvaneveldt’s analysis assumes that failure to comply with the
Assumed Name Statute is jurisdictional because it denies a party
standing. This assumption, though plausible, is legally incorrect.
20130746-CA and
20140978-CA 21 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
¶50 Standing is a threshold “jurisdictional requirement that
must be satisfied before a court may entertain a controversy
between two parties.” Jones v. Barlow, 2007 UT 20, ¶ 12, 154 P.3d
808 (citation and internal quotation marks omitted). Under the
traditional test for standing, a party must meet three
requirements:
First, the party must assert that it has been or will
be adversely affected by the [challenged] actions.
Second, the party must allege a causal relationship
between the injury to the party, the [challenged]
actions and the relief requested. Third, the relief
requested must be “substantially likely to redress
the injury claimed.”
Hogs R Us v. Town of Fairfield, 2009 UT 21, ¶ 8, 207 P.3d 1221(alterations in original) (citation and internal quotation marks
omitted).
¶51 “However, standing is not the same as legal capacity to
sue.” U.S. Bank, NA v. Kosterman, 2015 IL App (1st) 133627, ¶ 8,
39 N.E.3d 245 (citation and internal quotation marks omitted).
“A plaintiff has standing when it is personally aggrieved,
regardless of whether it is acting with legal authority; a party
has capacity when it has the legal authority to act, regardless of
whether it has a justiciable interest in the controversy.” Nootsie,
Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661
(Tex. 1996); see also Quad Cities Waterkeeper v. Ballegeer, 84
F. Supp. 3d 848, 858 (C.D. Ill. 2015). Thus, for example, minors,
though they may have standing, “have no legal capacity to sue.”
Lee v. Gaufin, 867 P.2d 572, 578 (Utah 1993).
¶52 Here, Schvaneveldt does not challenge Plaintiffs’
traditional standing: he does not contest that Shea signed the
FSBO; that he acted on behalf of his employer; that Aspenwood
employed Shea; or that Shea brought Buyers to the deal, so that
20130746-CA and
20140978-CA 22 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
if a commission was in fact due, Shea and Aspenwood, not
Quinlan, did the work to earn it. Rather, Schvaneveldt
challenges Shea and Aspenwood’s capacity to sue for the
commission under the Assumed Name Statute. Accordingly, the
question before us is whether a plaintiff’s lack of capacity to sue
under the Assumed Name Statute deprives the court of
jurisdiction. The answer is that it does not.
¶53 We have held that a plaintiff’s failure to comply with the
Assumed Name Statute does not render a complaint “a complete
nullity so as to deprive the trial court of jurisdiction to consider
the motion to amend the complaint.” Graham v. Davis County
Solid Waste Mgmt. & Energy Recovery Special Service Dist., 1999 UT
App 136, ¶ 15, 979 P.2d 363. And we have applied that principle
in this very context. In Shields v. Santana, 2000 UT App 298U, the
defendant contended that (1) the “complaint was void because
[the plaintiff] conducted business under an unregistered,
assumed name; and (2) the trial court lacked subject matter
jurisdiction over his claims pursuant to Utah Code Ann. § 42-2-
10 (1999).” Id. para. 1. We held that “[t]his fact did not deprive
the trial court of subject matter jurisdiction, nor did it make the
complaint a nullity on its face.” Id. We pointed out that the
Assumed Name Statute “addresses the capacity to sue, and lack
of capacity is an affirmative defense,” which may be
“waived . . . by failing to bring it before the trial court.” Id. (citing
Utah R. Civ. P. 8(c), 9(a)(1)); see also Wall Inv. Co. v. Garden Gate
Distrib., Inc., 593 P.2d 542, 544 (Utah 1979) (stating that a
plaintiff’s “failure to comply with the assumed name statute
does not disqualify it as a plaintiff in this suit”).
¶54 Because failure to comply with the Assumed Name
Statute affects a plaintiff’s capacity to sue, not its standing, the
failure is not jurisdictional. Because it is not jurisdictional, it does
not render the resulting judgment void. Accordingly,
Schvaneveldt’s claim in case number 20140978-CA that Plaintiffs
20130746-CA and
20140978-CA 23 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
here failed to comply with the Assumed Name Statute does not
provide a basis for relief from the judgment under rule 60(b)(4). 9
¶55 In case 20130746-CA, Schvaneveldt asserts a nearly
identical standing argument. But rather than appealing from a
specific ruling as in case 20140978-CA, he argues that Plaintiffs
lack standing, that standing is jurisdictional, and that subject
matter jurisdiction may be raised at any time. We reject that
claim for the reasons discussed above: namely, that Plaintiffs’
alleged failure to comply with the Assumed Name Statute does
not deprive the court of subject matter jurisdiction and thus may
not be raised at any time. 10
II. The Commission
¶56 Schvaneveldt next contends that “the trial court erred in
taking from the jury the question of whether a commission had
been earned.” This is a challenge to the trial court’s ruling that
Plaintiffs earned a commission as a matter of law. “An appellate
court reviews a trial court’s legal conclusions and ultimate grant
9. Because the question is not before us, we express no opinion
on whether a plaintiff’s lack of standing renders a judgment void
and thus vulnerable to attack under rule 60(b)(4). We do note
that the issue has never been decided in Utah, although it has
arisen twice. See Henshaw v. Estate of King, 2009 UT App 388U;
Gardiner v. York, 2010 UT App 108, 233 P.3d 500.
10. Again, we recognize that we are affirming on a legal ground
that varies somewhat from that articulated by the trial court. We
do so on the principle that a reviewing court may affirm the
judgment appealed from “if it is sustainable on any legal ground
or theory apparent on the record, even though such ground or
theory differs from that stated by the trial court.” Dipoma, 2001
UT 61, ¶ 18 (citation and internal quotation marks omitted).
20130746-CA and
20140978-CA 24 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
or denial of summary judgment for correctness, and views the
facts and all reasonable inferences drawn therefrom in the light
most favorable to the nonmoving party.” Orvis v. Johnson, 2008
UT 2, ¶ 6, 177 P.3d 600 (citations and internal quotation marks
omitted).
¶57 Schvaneveldt contends that “the trial court erred in taking
from the jury the question of whether a commission had been
earned.” Schvaneveldt advances three arguments in support of
this contention. First, he argues that Plaintiffs were “required to
show seller default under the FSBO.” Second, he argues that
“[t]here was no basis upon which the trial court could find
‘default of the seller’ as a matter of law.” Lastly, he argues that if
Plaintiffs needed to show only that they had procured a “ready,
willing, able, and accepted” buyer, issues of fact precluded
summary judgment.
¶58 Plaintiffs respond that “the trial court correctly ruled that
a commission had been earned.” Plaintiffs advance five
arguments in support of their position. First, they argue that
Schvaneveldt “became obligated to pay a commission the
moment he accepted an offer to purchase the property.” Second,
they argue that the broker’s commission “did not depend on the
Buyer’s or Sellers’ subsequent performance.” Third, they argue
that no dispute exists regarding whether Schvaneveldt accepted
an offer. Fourth, they argue that Schvaneveldt’s “default caused
the transaction to fail.” And finally, they argue that Buyers were
“ready, willing, and able to purchase the property.”
¶59 The trial court concluded as a matter of law that Plaintiffs
had earned a commission. First, the trial court ruled that Plaintiffs
earned the commission because Sellers accepted the Buyers offer.
The court further referred to its previous ruling that the sale
failed because Sellers failed to provide insurable access by means
of a general warranty deed or a special warranty deed with
guaranteed access:
20130746-CA and
20140978-CA 25 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
[I]t is undisputed that the lack of a guaranteed
access was the sole reason . . . that the transaction
failed. . . . [I]t strains credulity to think that
somebody would fork over four million [dollars]
without a general warranty deed or at least some
kind of a guarantee under a special warranty deed
that there would be an access.
¶60 The general rule in Utah is that “a real estate broker is
entitled to its commission when it has procured a buyer who is
ready, willing and able and who is accepted by the seller.”
Fairbourn Comm., Inc. v. American Housing Partners, Inc., 2004 UT
54, ¶ 7, 94 P.3d 292 (citation and internal quotation marks
omitted). However, the parties are free to establish a different
rule by contract. Id. ¶ 8. Accordingly, we begin our analysis with
the contract at issue: the FSBO.
¶61 The FSBO’s brokerage-fee paragraph contains at least
three terms relevant to the question of whether a fee was earned.
The first requires a seller to accept an offer from a named buyer,
the second specifies when the fee is “due and payable,” and the
third provides that if the seller defaults the fee is immediately
due and payable:
2. BROKERAGE FEE. The Seller agrees to pay the
Company, irrespective of agency relationship(s), as
compensation for services, a Brokerage Fee in the
amount of $____ or 3% of the acquisition price of
the Property, if the Seller accepts an offer from
Emmett Warren and or Assigns (the “Buyer”), or
anyone acting on the Buyer’s behalf, to purchase or
exchange the Property. The Seller agrees that the
Brokerage Fee shall be due and payable, from the
proceeds of the Seller, on the date of recording of
closing documents for the purchase or exchange of
the Property by the Buyer or anyone acting on the
20130746-CA and
20140978-CA 26 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
Buyer’s behalf. If the sale or exchange is prevented by
default of the Seller, the Brokerage Fee shall immediately
be due and payable to the Company.
(Emphasis added.) The parties disagree about whether, absent
seller default, the sale must close to trigger the brokerage-fee
provision. But the final sentence quoted above makes clear that a
commission was owed if Sellers defaulted on the REPC.
¶62 As stated above, the court ruled that Sellers breached the
REPC by failing to provide “a general warranty deed or at least
some kind of a guarantee under a special warranty deed that
there would be an access.” Paragraph 10.1 of the REPC provides
that Sellers “will convey good and marketable title to Buyer at
Closing by general warranty deed.” Again, the parties agree that
Sellers had informed Buyers that they would not be conveying
title by general warranty deed.11
¶63 That Sellers refused to convey title by general warranty
deed when the REPC required a general warranty deed would
seem to resolve the breach question. But in his opening brief
Schvaneveldt argues that he “had proposed a special warranty
deed, and Buyers had stated a willingness to accept it.”
However, the record shows that Buyers’ willingness to accept
11. The difference between a special warranty deed and a
general warranty deed “is that grantors of special warranty
deeds ‘only promise that no title defects have arisen or will arise
due to the acts or omissions of the grantor,’ whereas grantors of
general warranty deeds promise to defend ‘all claims.’” Mason v.
Loveless, 2001 UT App 145, ¶ 12, 24 P.3d 997 (quoting,
respectively, David A. Thomas, 11 Thompson on Real Property,
§ 94.07(b)(2)(i), at 81–82 (David A. Thomas ed., Supp.2000) and
Richard R. Powell, Powell on Real Property § 81A.06(2)(d)(iii), at
81A-122-23) (emphases omitted).
20130746-CA and
20140978-CA 27 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
something less than a general warranty deed was conditional.
Buyers’ attorney testified in his deposition that Sellers’ attorney
called him “right around the time of closing saying that we want
to execute a special warranty deed which doesn’t guarantee us
access . . . And I said, well, that might be okay if I can get a title
policy that’s going to guarantee me access, and they wouldn’t do
that either.” 12 We agree with the trial court that this exchange
put Sellers on notice that a special warranty deed was not
acceptable to Buyers absent additional guarantees that Sellers
could not provide.
¶64 In his reply brief, Schvaneveldt takes another run at the
warranty deed issue. He argues that “a general warranty deed
was not required in order to furnish marketable title.” That may
be true, but the REPC required conveyance by general warranty
deed. Schvaneveldt then argues that “the court did not rule that
failure to provide a general warranty deed was a seller breach.”
But as quoted above, the court identified Sellers’ failure to
provide a general warranty deed as a reason the sale failed.
Although the trial court focused on lack of access, that lack of
access apparently motivated Sellers’ refusal to convey the
Property by general warranty deed, and that refusal breached
the REPC. Finally, Schvaneveldt argues that “buyers had waived
the general warranty deed condition.” But, as explained above,
the waiver was conditional, and Sellers could not satisfy the
condition. No title insurance company—including one hired by
Sellers—was willing to insure access to the property. 13
12. In the trial court proceedings, Sellers did not dispute the
factual accuracy of this exchange.
13. Sellers had prior notice from SITLA that the Property did not
have access from a public road. See Still Standing Stable, LLC v.
Allen, 2005 UT 46, ¶¶ 2, 5, 122 P.3d 556. Despite this notice,
Sellers still claimed in their seller disclosures—incorporated into
(continued…)
20130746-CA and
20140978-CA 28 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
¶65 Of course, Sellers might have rendered the condition
moot by agreeing to convey title by general warranty deed as
required by the REPC. By not doing so, they defaulted under the
REPC. That default triggered the commission provision of the
FSBO, causing the brokerage commission to be
“immediately . . . due and payable.” We thus affirm the trial
court on this issue. 14
(…continued)
the REPC—that access existed to the Property. See supra note 2.
Thus, even if Sellers had avoided default by providing Buyers
with a general warranty deed, Sellers may have defaulted given
their seller disclosure that there was “direct access to the
Property through . . . [a] Private Easement”—allegedly, the strip
of land that Still Standing had purchased on the opposite side of
the closest public road. However, despite Sellers’ repeated
claims that access exists, the Utah Supreme Court found no
access and at least two separate title insurance companies—
including one hired by Sellers—had examined the Property and
none had been willing to insure access.
14. Schvaneveldt argued in his reply brief and in oral argument
that “Plaintiffs did not contend that failure to provide a general
warranty deed was the basis for seller default”; that “the court
didn’t attempt to rule on that”; that there was “no opportunity
for trial counsel in this case to oppose it or defend against it” by,
for example, submitting a declaration from Schvaneveldt’s real
estate counsel; and that “they can’t just spring that on appeal.”
That is not how we read the record.
During the summary judgment hearing, Plaintiffs’
counsel stated as an undisputed fact that “the REPC said
[Sellers] will convey title by a general warranty deed and they
wouldn’t convey title by a general warranty deed, they kept
saying they were going to use a special [warranty] deed and that
(continued…)
20130746-CA and
20140978-CA 29 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
III. Schvaneveldt’s Personal Liability
¶66 Finally, Schvaneveldt contends that “the trial court erred
in ruling as a matter of law that any liability of Schvaneveldt was
in his personal capacity.”
¶67 We are hampered in our review of this claim of error
because, as Plaintiffs observe, “it is unclear which ruling or
rulings Schvaneveldt is appealing.” Schvaneveldt’s brief states
(…continued)
was a red flag to the buyers.” Plaintiffs’ counsel argued that this
fact alone “would be sufficient for summary judgment.”
Furthermore, in questioning Schvaneveldt’s counsel, the court
asked whether it was “the prerogative of a buyer to spurn a
special warranty deed if he feels insecure and say, the only
condition to purchasing this property is a general warranty
deed?” Schvaneveldt’s counsel responded, “Yeah, . . . he could
say that, yes.” The court replied, “And didn’t he do that?”
Thereupon, the court and counsel discussed the exchange
between Buyers’ attorney and Sellers’ attorney concerning the
general and special warranty deeds. Schvaneveldt’s counsel did
not claim to be surprised by this line of argument or request the
opportunity to supplement the record with a declaration from
Schvaneveldt’s real estate counsel, but argued the point on the
basis of the undisputed record as it then existed. He stated his
belief “that [the] proposed switch to those deeds is irrelevant.”
But Plaintiffs’ counsel persisted: “Concerning the warranty deed,
the REPC clearly states in Paragraph 10 that the buyer agrees
that they will provide a warranty deed, [a] general warranty
deed.” And, as quoted in the text, the trial court relied explicitly
on the general warranty deed requirement in its ruling. In sum,
the claim that Sellers breached the REPC by refusing to provide
a general warranty deed was in play at the trial court and thus is
fair game on appeal.
20130746-CA and
20140978-CA 30 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
that the trial court “erred in denying [his] motion for summary
judgment on this ground,” but his argument does not identify in
the record the ruling he challenges. See Utah R. App. P. 24(a)(9).
Plaintiffs suggest that “it appears that [Schvaneveldt] is
appealing the trial court’s order dated August 13, 2010.” We
proceed on that assumption and reject as inadequately briefed
any challenge to any other ruling.
¶68 The August 13, 2010 ruling of the trial court denied
Schvaneveldt’s motion for summary judgment. That motion had
sought dismissal of all claims against Schvaneveldt and Code
individually. The court observed that the FSBO “identifies
‘[Charles Schvaneveldt] and Cathy Code’ as the seller and
provides that the seller will pay a commission fee to Re/Max
Elite. The agreement does not indicate that these individuals
were acting in a representative capacity.” The court therefore
concluded that Plaintiffs had “presented sufficient evidence that
Mr. Schvaneveldt and Ms. Code are personally liable to
withstand a motion for summary judgment.” “An appellate
court reviews a trial court’s legal conclusions and ultimate grant
or denial of summary judgment for correctness, and views the
facts and all reasonable inferences drawn therefrom in the light
most favorable to the nonmoving party.” Orvis v. Johnson, 2008
UT 2, ¶ 6, 177 P.3d 600 (citations and internal quotation marks
omitted).
¶69 The Utah Revised Limited Liability Company Act
indicates that “no organizer, member, manager, or employee of a
company is personally liable . . . for a debt, obligation, or liability
of the company.” Utah Code Ann. § 48–2c–601 (LexisNexis
2007). However, “where an agent has signed a contract in a
personal capacity, that is, executed it in a manner clearly
indicating that the liability is his alone . . . he must fulfill.” Daines
v. Vincent, 2008 UT 51, ¶ 40, 190 P.3d 1269 (alteration in original)
(citation and internal quotation marks omitted).
20130746-CA and
20140978-CA 31 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
¶70 And “it is generally agreed that the determination of the
liability of the signer depends upon the construction of a written
contract.” Starley v. Deseret Foods Corp., 74 P.2d 1221, 1223 (Utah
1938) (citation and internal quotation marks omitted); see also
Daines, 2008 UT 51, ¶ 40; Orlob v. Wasatch Mgmt., 2001 UT App
287, ¶ 10, 33 P.3d 1078. 15 An agent “can be held personally liable
for a signed contract only if he executed the contract ‘in a
manner clearly indicating that the liability was his alone.’”
Daines, 2008 UT 51, ¶ 40 (quoting Starley, 74 P.2d at 1223).
However, “for an agent to be relieved from personal liability
upon a negotiable instrument executed by him within the scope
of his authority, he must not only name his principal but must
express by some form of words that the writing is the act of the
principal, although done by the hand of the agent.” Starley, 74
P.2d at 1223 (citation and internal quotation marks omitted).
¶71 Here, Plaintiffs base their claim for a commission on the
FSBO. The FSBO does not express by any form of words that the
writing is the act of Schvaneveldt’s principal, Still Standing. In
fact, the FSBO does not mention Still Standing. Based on these
facts alone, we cannot say that the trial court erred in rejecting
Schvaneveldt’s claim that, as a matter of law, only Still Standing,
and not Schvaneveldt, was obligated by the FSBO to pay any
commission found to be owing.
¶72 Schvaneveldt argues that “the facts and law show that
[he] was acting as a member of the LLC,” even though he was
listed on the FSBO as a seller. His argument relies on the REPC,
which identifies “the property” as “Land LLC Still Standing
15. In Starley the principal was a corporation, but our supreme
court has (as noted above) applied Starley to a case where the
principal was a limited liability company. See Daines v. Vincent,
2008 UT 51, ¶ 40, 190 P.2d 1269 (citing Starley v. Deseret Foods
Corp., 74 P.2d 1221, 1223 (Utah 1938)).
20130746-CA and
20140978-CA 32 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
Stables,” and the seller disclosure form, which identifies the
property owner as “Still Standing Stables, LLC.” Schvaneveldt
also argues that the word “member” originally followed his
signature on the REPC.
¶73 None of this evidence undermines the trial court’s ruling.
Plaintiffs are suing to enforce the FSBO, so it—not the REPC—is
the operative document. Furthermore, the REPC does not list
Still Standing as the seller, nor do the words “Still Standing
Stable” appear anywhere near Schvaneveldt’s signature on the
REPC. The REPC does state that if the buyer or seller is an entity,
“the person executing this Contract on its behalf warrants his or
her authority to do so and to bind Buyer and Seller.” This term
might suggest that Schvaneveldt signed in his representative
capacity if the REPC named an entity as the seller, but it does
not. The Sellers’ disclosure statement does name Still Standing as
the seller, but Schvaneveldt’s signature does not purport to be in
a representative capacity, and the name of the LLC does not
appear anywhere near his signature in the disclosure statement. 16
IV. Attorney Fees on Appeal
¶74 Plaintiffs request an award of attorney fees on appeal on
the ground that the FSBO awards attorney fees to the prevailing
party. When under a contractual fee provision “a party is
entitled to attorney fees below and prevails on appeal, that party
is also entitled to fees reasonably incurred on appeal.” Utah
16. Schvaneveldt also argues, “Alternatively, Schvaneveldt’s tort
claims against Shea and Wing should be reinstated.” However,
because these tort claims (negligence and breach of fiduciary
duties) are the subject of a separate case—20130768-CA—and are
only addressed in two pages in Schvaneveldt’s brief in this case,
they are addressed in that opinion. See Wing v. Still Standing
Stable LLC, 2016 UT App 229.
20130746-CA and
20140978-CA 33 2016 UT App 228Elite Legacy Corporation v. Schvaneveldt
Transit Auth. v. Greyhound Lines, Inc., 2015 UT 53, ¶ 64, 355 P.3d
947. Plaintiffs received attorney fees below and have prevailed
on appeal. Accordingly, we award Plaintiffs their reasonable fees
incurred in connection with this appeal in an amount to be
determined by the trial court.
CONCLUSION
¶75 For the foregoing reasons, the judgment of the trial court
is affirmed and the case remanded for a determination of
Plaintiffs’ reasonable attorney fees incurred on appeal.
20130746-CA and
20140978-CA 34 2016 UT App 228