March 14, 2013, Utah Court of Appeals Cases

March 14, 2013

Utah Court of Appeals Cases

State v. Powell, 2013 UT App 64, No. 20110797‐CA (March 14, 2013)

Affirming Powell’s convictions for aggravated robbery and criminal trespass

Per Curiam Decision,

Powell challenges the sufficiency of the evidence.  The Court reviews the evidence and determines it was sufficient.

it is well established that the use of a dangerous weapon does not require an affirmative act of, for example, pointing or jabbing at a victim. State v. Graham, 2011 UT App 332, ¶ 29, 263 P.3d 569. “[A] defendant ‘uses’ a dangerous weapon when he or she exhibits the weapon for the purpose of creating fear in the victim.” State v. Weisberg, 2002 UT App 434, ¶ 19, 62 P.3d 457 (citation omitted).

At ¶ 3.

Breton v. Clyde Snow & Sessions, 2013 UT App 65, No. 20110996‐CA (March 14, 2013)

Affirming Judge Anthony Quinn’s order granting summary judgment to Clyde Snow & Sessions

Judge Christiansen,

Breton sued his attorney, Clyde Snow & Sessions, for legal malpractice sounding in negligence.  Breton was a co-trustee of a family trust and hired the firm to represent him in helping to resolve disputes between himself, a co-trustee and the beneficiaries by paying out all of the interests in the trust.

The law firm drafted a letter to all 15 beneficiaries asking them to accept $24,000 in exchange for their interest in the trust.  12 of the 15 signed the agreement and accepted the buyout.  The remaining 3 said they would sign it, but never did.  Breton paid $24,000 to the 12 beneficiaries who signed the agreement.  The remaining three demanded $66,666.66 for their signatures, and then sued Breton for breach of fiduciary duty.

Breton filed the current action in November 2009, alleging, among other things, that Clyde Snow breached its legal services contract and committed legal malpractice, specifically, in failing to give legal advice and concerning its drafting of the release. Breton’s complaint alleges that Clyde Snow’s ineffective legal work created a situation wherein the Slater Brothers acquired an economic incentive to initiate litigation against Breton because the brothers became the sole beneficiaries of the Trust once the twelve other beneficiaries had signed the release.

In response to Breton’s allegations, Clyde Snow filed a motion for summary judgment, arguing that the undisputed facts did not support Breton’s economic‐incentive‐causation theory. Clyde Snow argued that the Slater Brothers wished to sue Breton, in the context of a long history of family conflict, because Breton breached his fiduciary duty as trustee and not because of any economic incentive. Clyde Snow also argued that Breton and his cotrustees made the decision to pay each of the twelve beneficiaries $24,000, even though they knew the Slater Brothers had not signed the release and retained their right to sue.

At ¶¶ 4-5.

The district court concluded,

[H]ow can there be causation if . . . Breton already knew what he wanted to be advised by his lawyer . . . . [I]t really comes down to what was caused by the failure to specifically advise . . . Breton that if you don’t get all 15 to sign you’re still at risk, and you distribute to the 12 you’re still at risk for being sued by the other three. And I think that it’s so clear in anybody’s mind that [Breton] was still at risk to be sued by the . . . three [Slater Brothers] that the failure to tell him that was not the cause of what happened.

At ¶ 6.

Breton urges us to conclude that he raised a genuine issue of material fact not only as to whether Clyde Snow ineffectively drafted the release, but also as to whether Clyde Snow ineffectively failed to advise Breton not to pay the twelve beneficiaries before obtaining a release from all of the fifteen beneficiaries.

At ¶ 7.

Causation is the only disputed question.

“Causation is a highly fact‐sensitive element of any cause of action” and “generally . . . cannot be resolved as a matter of law.” Id. at 1292 (citation and internal quotation marks omitted). Moreover, “Utah courts have always recognized the fact‐intensive nature of intervening cause inquiries.” Id. at 1293. However, “proximate cause issues can be decided as a matter of law . . . when the facts are so clear that reasonable persons could not disagree about the underlying facts or about the application of a legal standard to the facts.” Harline, 912 P.2d at 439. And although intervening cause inquiries are typically fact‐intensive, they too can be decided as a matter of law.

At ¶ 10.

[W]e conclude that Breton has not advanced a persuasive legal argument to support his position that Clyde Snow’s ineffectively‐drafted release and lack of proper advice caused the Slater Brothers to sue him by giving them an economic incentive.

At ¶ 11.

Assuming Clyde Snow had drafted the release exactly as Breton wanted it, which is to say, containing a provision that without all fifteen signatures the release would not have become effective, then the result would be that if any fewer than all fifteen of the beneficiaries signed the release, all fifteen beneficiaries would have remained free to sue Breton. Thus, assuming Clyde Snow ineffectively drafted the release, Breton is not worse off by having three, rather than fifteen, beneficiaries free to sue him. Ultimately, we see no difference in the alleged harm Breton suffered in that there does not seem to be legal significance in the potential for Breton to be sued by three beneficiaries versus fifteen.

In addition, as the district court ruled, even if Breton had been satisfied with the release that Clyde Snow prepared, Clyde Snow “could not possibly have forced the Slater Brothers to sign [that] release[].” It is wholly speculative that the Slater Brothers, or for that matter, any of the other beneficiaries, would have signed a satisfactorily‐drafted release.

Finally, we agree with the district court that Breton broke the chain of causation when he decided to pay the twelve beneficiaries without first obtaining a release from all fifteen of those beneficiaries. Breton acknowledged that he retained Clyde Snow to devise a plan to release him and his cotrustees from potential claims. Breton knew that if he did not obtain a release from all of the beneficiaries and especially the Slater Brothers given the antagonistic family history, he was at risk of being sued by whomever did not sign the release. Breton therefore knew that distributing monies to the beneficiaries who had signed the release before obtaining the signatures of all fifteen of the beneficiaries would leave the door open for the Slater Brothers to sue him. A reasonable jury simply could not disagree about the underlying undisputed fact that Breton knew of this possibility.

                                        

At ¶ 13-15.

UCCU v. Robertson, 2013 UT App 66, No. 20110969‐CA (March 14, 2013)

Reversing Judge James Taylor’s order granting summary judgment.

Judge Christiansen,

Robertson argues that the district court erred in awarding summary judgment in favor of UCCU because there were disputed issues of material fact regarding how much he owed to UCCU, whether he misrepresented material information during the loan application process, and whether he occupied the property.

At ¶ 12.

The Court concludes that there is a material question of fact concerning whether Robertson misrepresented material information in the loan application process.

In his declaration in response to UCCU’s motion for

summary judgment, Robertson did not deny that he utilized the

unsigned income statements to obtain the loan because on previous

occasions when he submitted an income tax return demonstrating

his “taxable income,” he had not been successful in obtaining

credit. In addition, Robertson states that he told UCCU that the

form he signed at the closing at UCCU’s request was meant to be

only an income statement and not a tax return form. UCCU denies

this.

At ¶ 17.

Robertson alleges that he gave correct, clear, and accurate information about his actual income, and he swore to a statement to this effect. Evaluation of these facts in the light most favorable to Robertson is enough to create a genuine issue of material fact on this issue. Robertson’s letter and the fact that he provided different information to the IRS certainly bears on his credibility, but it was not for the district court to determine whether he intended to mislead the bank.

At ¶ 18

The Court also concludes that there is a material question of fact concerning whether Robertson’s failure to occupy the home was caused by extenuating circumstances beyond his control.

At ¶¶ 21-23.

Layton v. Stevenson, 2013 UT App. 67, No. 20110840‐CA (March 14, 2013)

Reversing Judge David Hamilton’s order dismissing criminal case against Stevenson.

Judge Thorne,

Defendant entered a plea in abeyance for patronizing a prostitute.  While on probation Defendant was charged with sexual solicitation in Sunset City and entered into a diversion agreement in the Sunset City Justice Court.  Layton filed a Motion to Show Cause arguing that Defendant had violated the terms of his probation.

The district court determined that “a ‘violation of law,’ under the terms of the parties’ 2009 Plea in Abeyance Agreement, must necessarily be a conviction and not merely an allegation of misconduct.” Thereafter, the district court determined that because Defendant’s diversion agreement with Sunset City is not such a conviction it was therefore not a violation of law as contemplated by the plea in abeyance agreement. The court concluded that Defendant had not violated the terms of the plea in abeyance agreement. As a result, the court denied Layton City’s motion to reinstate the no contest plea and dismissed with prejudice the patronizing a prostitute charge against Defendant pursuant to the plea in abeyance agreement. Layton City appeals.

At ¶ 4.

Layton City contends that the plain meaning of the phrase “violation of law,” as used in the plea in abeyance agreement and as contemplated in Utah Code section 77‐2a‐4, does not require a conviction to support a violation of a plea in abeyance agreement. We agree with the City that the plain meaning of the phrase “violation of law” does not, as the district court found, necessarily require a conviction. Rather, under the terms of the parties’ plea in abeyance agreement and as contemplated in the statute, a “violation of law” may be supported by evidence of misconduct other than a conviction. The phrase “violation of law” is not limited to proof solely by means of a conviction.

At ¶ 9.

The plea in abeyance agreement does not specify the exact evidentiary requirement associated with the condition “[n]o violations of law except for minor traffic offenses.” Nonetheless, the plain meaning of the term “violation” as utilized in the statute governing pleas in abeyance provides support for the notion that a conviction is not necessarily required to establish a violation of a term or condition of an agreement. The plea in abeyance statute specifically provides that a prosecution and conviction for an offense that constitutes a violation of the plea in abeyance agreement may occur after a violation and the termination of the plea in abeyance. See Utah Code Ann. § 77‐2a‐4(2). Section 77‐2a‐ 4(2) states that “[t]he termination of a plea in abeyance agreement and subsequent entry of judgment of conviction and imposition of sentence shall not bar any independent prosecution arising from any offense that constituted a violation of any term or condition of an agreement whereby the original plea was placed in abeyance.” Id. (emphasis added). Because the statute contemplates later prosecution for conduct that constitutes a violation of the conditions of the plea in abeyance agreement, it follows that a conviction is not a prerequisite to a finding that a defendant has violated the law in contravention of a condition in a plea in abeyance agreement.

At ¶ 10.

Colony Insurance v. Human Ensemble, 2013 UT App 68, No. 20111013‐CA , (March 14, 2013)

Affirming Judge Paul Maughan’s order granting summary judgment to Scottsdale Insurance.

Human Ensemble rented proprety to commercial tenants.  The property was insured by a general liability insurer, Scottsdale, and a property damage insurer, Colony.  Significant water damage caused Human Ensemble’s tenant to incur damage, and they sued.

Due to some confusion unexplained in the appellate briefing, Human Ensemble filed a claim in early January 2006 for its cleanup expenses with its liability carrier, Scottsdale, rather than with Colony, its property damage insurer. About this same time, Scottsdale agreed to defend Human Ensemble against the liability claims filed by its tenants. Approximately six weeks later, on February 21, 2006, Scottsdale informed Human Ensemble that it was the general liability insurer only and would not cover Human Ensemble’s claims for property damage because it had not issued a property damage policy. The six‐week gap between Human Ensemble’s submission of the claim and Scottsdale’s disclosure became the basis for Human Ensemble’s assertion that Scottsdale violated the implied duty of good faith and fair dealing in the general liability policy that is now at issue on appeal. At all times relevant, Scottsdale continued to defend Human Ensemble in the separate liability case brought by its tenants, which was still pending when this appeal was filed.

At ¶ 2.

Initially the district court denied Scottsdale’s motion for summary judgment because there were disputed material facts.  A new judge was assigned to the case, however, and Scottsdale filed a Rule 54(b) motion to reconsider. The new judge granted summary judgment.  Human Ensemble asserts that the second judge should not have reconsidered the motion that that a general liability insurance carrier has a duty to timely investigate the scope of coverage in order to promptly notify the insured when the policy does not cover the property damages incurred.

Whether to reconsider a prior ruling is ordinarily within the sound discretion of the district court, as only the parties of a case are bound by the court’s nonfinal decisions. Mid-America Pipeline Co. v. Four-Four, Inc., 2009 UT 43, ¶ 12, 216 P.3d 352 (“While a case remains pending before the district court prior to any appeal, the parties are bound by the court’s prior decision, but the court remains free to reconsider that decision.” (citation and internal quotation marks omitted)). Factors that weigh in favor of the district court’s decision to reconsider include, but are not limited to, (1) the matter being presented in a new or different light, (2) a change in the governing law, (3) the discovery of new evidence, or (4) a conviction that the prior decision was clearly erroneous. Trembly, 884 P.2d at 1311.

At ¶ 6.

The Court concludes that the district court did not abuse its discretion in reconsidering Scottsdale’s Motion for Summary Judgment.

At ¶ 7.

The district court granted summary judgment to Scottsdale on the basis “that the duty of good faith extends only to benefits actually provided for under the applicable insurance policy” and Scottsdale had not denied Human Ensemble any of the bargained for benefits. Human Ensemble argues that this decision was incorrect because a breach of the insurance contract is not a prerequisite to a claim of breach of the implied covenant of good faith and fair dealing. We agree with Human Ensemble that a breach of contract is not necessary for a claim of bad faith to arise. See Christiansen v. Farmers Ins. Exch., 2005 UT 21, ¶ 13, 116 P.3d 259 ( . . . ). We nevertheless affirm the district court’s decision to grant summary judgment on the basis that the duty of investigation that Human Ensemble seeks to impose upon Scottsdale is outside the scope of the insurance contract. See generally Bailey v. Bayles, 2002 UT 58, ¶ 10, 52 P.3d 1158.

At ¶ 9

Black v. Allstate Insurance Co., 2004 UT 66, 100 P.3d 1163, provides an example of how the implied duty to diligently investigate has been applied in Utah. In Black, the district court granted the insurance company’s motion for summary judgment on the insured’s claim that his automobile insurance carrier violated the duty to reasonably investigate when it denied his accident claim on the basis that he was primarily at fault without first having contacted the only eyewitness. Id. ¶¶ 1, 3, 7. The Utah Supreme Court, in the course of reversing summary judgment, explained what the duty involves: in order to provide the insured with automobile accident coverage “by virtue of the insurance policy,” “Allstate at least had an obligation to Black to diligently investigate the facts [of the accident], and then act fairly and reasonably in evaluating and settling the claim.” Id. ¶¶ 20, 22. In carrying out this duty, the focus is on whether the insurer’s investigation was “fair and reasonable” given “the extent and availability of evidence, whether available evidence is collected and witnesses are contacted, common practice in the industry, and clarity of the evidence with regard to issues of liability.” Id. ¶ 21.

Human Ensemble asserts that Scottsdale breached the implied duty to investigate, not by failing to adequately inquire into what caused the water leak and the nature and extent of the resulting damage, but by failing to notify Human Ensemble for over six weeks that its general liability policy did not cover property damage. Specifically, Human Ensemble claims that had Scottsdale “diligently investigate[d] the facts . . . to determine whether [the] claim [wa]s valid,” see Beck, 701 P.2d at 801, it would have realized earlier that the insurance coverage Human Ensemble purchased from Scottsdale did not cover property damage but only liability. Thus, according to Human Ensemble, the duty to investigate a claim is not confined to the facts underlying the claim but requires the insurer to examine the policy’s coverage upon receiving a claim and promptly notify the insured if the claim does not fit within the policy’s general scope.

At ¶¶ 11-12.

[W]hile the obligation to investigate the facts in order to resolve a claim may also include a duty to promptly determine if a claim within the policy’s nominal subject matter is excepted or excluded by its detailed or technical terms, Human Ensemble has not persuaded us that this duty extends so far as to encompass an obligation to inform the insured of the general type of policy that the insured has purchased. Certainly, such an expectation does not seem to be in the same category as the duty to diligently investigate the facts and circumstances of a claim that at least arguably falls within coverage in order to properly defend or resolve the claim.

At ¶ 13.

Taylorsville City v. Taylorsville City Employee Appeal Board, 2013 UT App. 69, No. 20110546‐CA (March 14, 2013)

Original Proceeding

Judge McHugh,

Taylorsville City (the City) appeals from a decision by the Taylorsville City Employee Appeal Board (the Board) reversing the City’s termination of Officer Bradley Gillespie from the Taylorsville City Police Department (the Department). We set aside the Board’s decision and remand for proceedings consistent with this decision.

At ¶ 1.

The Court outlines the evidence regarding Officer Gillespie’s alleged misconduct, the City’s rationale for firing him, and the Board’s rationale for revering the City.

The City first argues that the Board either abused its discretion or acted arbitrarily and capriciously in applying a “more Taylorsville City v. Taylorsville City Employee Appeal Board 2. Because the 2012 amendment to the relevant section of the Utah Code does not impact our analysis, we cite the current version for the convenience of the reader. 20110546‐CA 7 2013 UT App 69 expansive standard of review” than the “substantial evidence” standard. In particular, the City contends that the Board erred in failing to afford any deference to the Department’s interpretation of its own policies. The City next argues that the Board abused its discretion in overturning the decision to terminate Gillespie because Gillespie failed to show that termination was a disproportionate sanction. Finally, the City argues that the Board erred by concluding that Gillespie had a due process right to notice of the charges against him at the investigative stage.

At ¶ 15.

The City argues that the Board exceeded its authority in setting a standard of review more strict that “substantial evidence.”

Although the Utah Legislature has indicated that cities may prescribe the standard of review to be applied by their employee appeal boards, nothing in the statute addresses the standard of review applicable in the absence of a [sic] such an ordinance. See id. §§ 10‐3‐1105 to ‐1106. Likewise, there is nothing in sections 10‐3‐1105 or 10‐3‐1106 that grants an appeal board the authority to set its own standard of review. See id.; cf. Pearson v. South Jordan Emp. Appeals Bd., 2009 UT App 204, ¶ 14, 216 P.3d 996 (“[T]he only authority granted by the legislature is contained in section 10‐3‐ 1106, which authorizes the Board to determine the cause of the merit employee’s discharge, suspension, or transfer.”). Instead, the plain language of the statute grants that authority to the “governing body of each municipality.” See Utah Code Ann. § 10‐3‐ 1106(7)(a); see also Mountain States Tel. & Tel. Co. v. Atkin, Wright & Miles, Chartered, 681 P.2d 1258, 1263 (Utah 1984) (“Virtually all authorities hold [that] when authority is delegated to an administrative officer or body, such delegation within its terms and limitations is primary and exclusive unless a contrary intent is clearly manifested by the legislature.”). The Utah Municipal Code defines “[g]overning body” as “collectively the legislative body and the executive of any municipality,” and further indicates that “in a city of the third, fourth, or fifth class, the governing body is the city council.” See Utah Code Ann. § 10‐1‐104(3)(b) (LexisNexis 2012). The City is a city of the third class.4 Thus, the Board is not the “governing body” of the City and it exceeded its authority by adopting its own “more expansive” standard of review.

At ¶ 20.

[A] civil service commission should give deference to a police chief’s advantaged position in considering whether the sanction selected by the police chief is warranted, and that the standard of review is substantial evidence with respect to findings of fact and abuse of discretion with respect to the discipline selected. In the absence of a city ordinance expressly rejecting this approach, we are convinced that the same standard applies here.

At ¶ 29.

The City argues that the Board’s determination that it failed to provide the required notice to Gillespie concerning his investigation was improper, and violated its due process rights because it was not argued before the Board.  The Court rules that the Board was correct in its ruling and the City’s due process rights were not implicated because the decision was based on an interpretation of the City’s own policies. 

At ¶¶ 30-35.

The Court determines that the city’s failure to notify Gillespie that this investigation would center on his alleged intoxication incident  was harmless because Gillespie had actual knowledge of this purpose of the investigation, and Gillespie did not challenge that finding on appeal.

At ¶ 36.

The Court determines that even though the City did not notify him that the investigation would involve questions about an incident involving pornography, Gillespie was on notice that he could be disciplined for dishonesty in relation to any questions that were asked.  Gillespie has not adequately explained his dishonesty concerning those areas of the investigation to which he did have adequate notice, accordingly, failure to notify concerning this portion of the investigation was harmless.

At ¶¶ 37-40.

Lastly, The City challenges the Board’s determination that dismissal was an inappropriate sanction for the dishonesty in this case.  The Court determines that in order to be an appropriate sanction it must be “(1) appropriate to the offense and (2) consistent with previous sanctions imposed by the department.”

At ¶ 41.

Appropriateness

The Department’s discipline policy states,

In determining the type and severity of the disciplinary action, the [Police] Chief . . . shall consider aggravating and mitigating circumstances which include, but are not limited to, the repeated nature of the misconduct; prior disciplinary action imposed; the severity of the misconduct; the employee’s work record; the effect on the . . . Department and the City’s operations; and/or the potential of the misconduct to harm person(s) or property and information presented by the employee as a result of the pre‐disciplinary hearing.

The policy is consistent with authority from this court. In Nelson v. Orem City, Department of Public Safety, 2012 UT App 147, 278 P.3d 1089, cert. granted, 288 P.3d 1045 (Utah 2012), this court identified several factors relevant to the issue of whether a sanction is proportional to the misconduct, stating,

[E]xemplary performance by an employee may serve as evidence against termination, while job violations and continued misbehavior could weigh in favor of dismissal. The Board may also consider the following factors: (a) whether the violation is directly related to the employee’s official duties and significantly impedes his or her ability to carry out those duties; (b) whether the offense was a type that adversely affects the public confidence in the department; (c) whether the offense undermines the morale and effectiveness of the department; or (d) whether the offense was committed willfully or knowingly, rather than negligently or inadvertently.

Id. ¶ 23 (alteration in original) (citations and internal quotation marks omitted).

At ¶ 42

The Court expresses concern that the Board did not address any of the factors to consider outlined in the policy or the Court’s previous cases.  They also express concern that the Board issued its ruling based on the underlying bad conduct for which Gillespie was under investigation, not his dishonesty in the process, for which he was ultimately fired.  They also express strong concern about the lack of deference to the police chief in making the determination.

At ¶¶ 43-45.

Consistency

The Board never made a determination on this issue.  The Court directs them to consider it on remand.

Anderson v. Workforce Services, 2013 UT App 70, No. 20120988-CA (March 14, 2013)

Original Proceeding

Anderson challenges the Department of Workforce Services ruling that he is ineligible for unemployment benefits because he quit his job without good cause.

Per Curiam,

Although Anderson was clearly informed in the hearing brochure, in the notice of hearing, and through the Administrative Law Judge’s (ALJ) instructions at the hearing that no new evidence would be considered in an appeal to the Board, Anderson attempted to introduce new evidence before the Board. The Board correctly refused to consider the new evidence because it was not presented at the hearing and Anderson did not demonstrate extenuating circumstances to justify considering the new evidence.

At ¶ 3.

To establish good cause, a claimant must show that the continuance of employment would have had an “adverse effect on the claimant which could not be controlled or prevented and necessitated immediate severance of the employment relationship.” Smith v. Board of Review, 714 P.2d 1154, 1155–56 (Utah 1986); see also Utah Admin. Code R994‐405‐102. A claimant is required to demonstrate actual or potential physical, mental, economic, personal, or professional harm caused or aggravated by the employment. See Utah Admin. Code R994‐405‐102(1)(a). Good cause is not established if the claimant reasonably could have continued working while looking for other employment. See id. R994‐405‐102(1)(b)(i).

At ¶ 4.

The Court reviews the facts and finds that the Department of Workforce Services ruling was supported by substantial evidence