Utah Court of Appeals Cases, February 28, 2013

February 28, 2013

Utah Court of Appeals Cases

State v. Lievanos, 2013 UT App 49, No. 20110432 CA (February 28, 2013)

Affirming Judge Royal Hansen’s, Third District, Salt Lake City Department, denial of Defendant’s Motion to Exclude two days of expert DNA analysis testimony.

Background:

During investigation of a crime, police found DNA evidence and asked the Utah State Crime Lab to analyze it.  The analyst produced a report on August 3, 2009.  A few days later the produced a second report with some corrections.  Before trial, new recommendations for how statistical chances of DNA matches should be calculated were issued by the Scientific Working Group on DNA Analysis Methods.  The prosecutor called the analyst to ask if the new guidelines would affect the report.  The analyst ran the new numbers and determined that there would be a change and sent the new numbers to the prosecutor in an email.  A new report was not issued.

The analyst provided two days of testimony at trial, including cross examination on the analyst’s reporting methods.  At the close of her testimony, Defendant moved to exclude her testimony under Rule 702.  The trial court denied the motion stating: “[The analyst] appears to be qualified and satisfies the requirements of Rule 702.”  The trial court further stated: “the Defense has every right to raise questions regarding the adequacy of that report,” and ruled that its credibility was an issue for the jury.  Defendant appeals.

Judge Orme,

Trial courts . . . have only a “preliminary . . . obligation to determine whether the proposed expert testimony satisfies a ‘threshold showing’ of reliability.” Gunn Hill Dairy Props., LLC v. Los Angeles Dep’t of Water & Power, 2012 UT App 20, ¶ 33, 269 P.3d 980. This court has adopted the definition of “threshold showing” found in the advisory committee note to rule 702 of the Utah Rules of Evidence, i.e., “‘a basic foundational showing of reliability.’” Id. (quoting Utah R. Evid. 702 advisory committee note) (emphasis in original). Meeting this threshold is only the “beginning of a reliability determination,” however, . . . once the trial court has determined expert testimony meets this initial showing of reliability, “[i]t is up to the trier of fact to determine the ultimate reliability of the evidence.” Id. (emphasis in original).

At ¶ 12.

While her testimony may have raised some questions of ultimate reliability, as noted by the trial court, it was not unreasonable for the trial court to find that the analyst’s testimony demonstrated enough reliability to meet the “basic foundational showing” required by Gunn Hill Dairy. See id. It was therefore also entirely appropriate, and not an abandonment of its gatekeeping function, for the trial court to leave the ultimate question of credibility regarding the analyst’s testimony to the jury.

At ¶ 15.

First National Bank of Layton v. Palmer, 2013 UT App. 50, No. 20110338-CA (February 28, 2013).

Reversing Judge Lyle Anderson’s, Utah Seventh District Court, Monticello Department, decision granting of First National’s Motion for Partial Summary Judgment and Denying Palmer’s.

Background:

Ray Palmer and First National Bank of Layton dispute the priority of their competing lien interests in a parcel of commercial real estate.  At all times both parties knew both parties had an interest in the property secured by a trust deed.  Originally, First National was in first priority position, but because they reconveyed the trust deed for insurance purposes, it was moved to second priority position.  Relying on an incorrect title report showing First National’s trust deed as the only outstanding lien on the property, even though Palmer’s trust deed was properly recorded and they had actual knowledge of it, First National did not take any action to subrogate Palmer’s first priority position.

Upon default, Palmer initiated foreclosure proceedings.  First National filed this suit seeking equitable reinstatement and/or “subrogation” of its trust deed back into first priority position.  The trial court granted First National’s request on a motion for summary judgment.  Palmer appeals.

Judge Orme,

First National Presents two theories for why the trial court should be upheld (1) equitable subrogation, and (2) Equitable Reinstatement.

Equitable Subrogation

[There are] two forms of equitable subrogation: legal subrogation and conventional subrogation. See Martin v. Hickenlooper, 59 P.2d 1139, 1141 (Utah 1936). Legal subrogation “arises ‘where the person who pays the debt of another stands in the situation of a surety or is compelled to pay to protect his own right or property.’” Id. (quoting Bingham v. Walker Bros., Bankers, 283 P. 1055, 1063 (Utah 1929)). This form of subrogation is commonplace in insurance litigation, where an insurer will step into the shoes of its insured to bring an action against a tortfeasor. See, e.g., State Farm Mut. Auto. Ins. Co. v. Northwestern Nat’l Ins. Co., 912 P.2d 983, 985 (Utah 1996) (“Utah law clearly recognizes an insurer’s right to bring a subrogation action on behalf of its insured against a tortfeasor.”). Legal subrogation is not applicable here because First National is not a surety and has not stepped into the shoes of another party. First National was not compelled to pay to protect its rights, and there are not, in fact, any shoes, other than its own, for First National to step into.

Conventional subrogation is also not an appropriate mechanism for placing First National’s trust deed back into first priority position. Conventional subrogation “occurs where the one who is under no obligation to make . . . payment, and who has no right or interest to protect, pays the debt of another under an agreement, express or implied, that he will be subrogated to [the] rights of the original creditor.” Bingham, 283 P. at 1063. First National did not advance any money to pay off the original trust deed with the understanding or agreement that its new trust deed would be subrogated to first priority position. Instead, First National merely released its trust deed and subsequently recorded a new trust deed reflecting a different loan amount. No money changed hands and none of the already existing liens were paid off. By definition, First National’s trust deed cannot move to first priority position on a theory of conventional subrogation because the money secured by the second trust deed was not used to pay off the released and reconveyed first trust deed. Because First National is not aiming to stand in the shoes of another and did not pay off a prior lien with the expectation of subrogating to the prior lien’s priority position, we conclude that First National’s trust deed is incapable of being elevated to first priority position through the doctrine of equitable subrogation.

At ¶¶ 10-11

Equitable Reinstatement

[W]hen a mortgage is released by accident, mistake, or in ignorance of intervening lien rights, a court can equitably reinstate that mortgage to its original priority position.

At ¶ 12.

Equitable reinstatement will be denied, however, if the party seeking reinstatement was negligent in failing to discover the lien that elevated to senior position.

At ¶ 12.

Given its possession of documents stating that a “second trust deed [was to be] held by the seller,” we conclude that First National was at the very least on inquiry notice of Palmer’s trust deed and was, consequently, negligent in failing to inquire about the potential existence of Palmer’s outstanding lien after the title report did not disclose it.

At ¶ 13.

In determining whether a party is on inquiry notice, we first perform “a subjective inquiry to determine what actual knowledge” the subsequent party in interest had. See Pioneer Builders Co. v. KDA Corp., 2012 UT 74, ¶ 26, 292 P.3d 672. We then “conduct an objective inquiry to determine whether those facts would lead a reasonable person to inquire further.” Id.

At ¶ 13.

Under more typical circumstances, a lender’s sole reliance on a title report might not be considered negligent. . . . But when a title report following so soon on the heels of the original transaction does not list a trust deed the lender would expect to see, the lender cannot simply turn a blind eye to what it knows, has reason to know, or has a duty to inquire about further.

At ¶ 15.

Migliaccio v. Labor Commission, 2013 UT App 51, No. 20110690-CA (February 28, 2013)

Original Proceeding

Judge Davis,

Tommy Migliaccio seeks judicial review of the Utah Labor Commission’s decision to deny his request for workers’ compensation benefits for a cervical-spine injury that he asserts was caused or aggravated by an industrial accident that occurred in September 2006.  The Court does not disturb the Commission’s decision.

Migliaccio argues that the Utah Labor Commission erred in convening a medical panel to evaluate his disability claim because the issue of medical causation was not dispute.  Further, Migliaccio argues that the medical panel’s decision was not supported by substantial evidence.

[T]he Utah Administrative Code requires an ALJ to utilize a medical panel “where one or more significant medical issues may be involved” and notes that such a circumstance “[g]enerally [involves] . . . conflicting medical reports.” See Utah Admin. Code R602‐2‐2.A.

At ¶ 3.

“[a]lthough [rule] 602-2-2[.A] provides specific instances in which a claim must be referred to a medical panel, the statute does not preclude claims from being referred to medical panels for other medical questions.” We agree.

At ¶ 4 (quoting the trial court).

The Court reviews the record and finds that medical causation was in dispute, and that there were significant questions regarding the severity of Migliaccio’s injury.  The Court also finds that there was substantial evidence supporting the panel’s decision that Migliaccio’s injury was not caused by a work accident.

State v. Smith, 2013 UT App 52, No. 20110319-CA (February 28, 2013)

Reversing Defendant’s Guilty Plea.  Judge Michael Westfall, Fifth District, Cedar City Department

Background:

Smith was charged with possession of a controlled substance in a drug-free zone.  He reached a pleas agreement with the State and appeared at the time scheduled for his preliminary hearing.  When Smith appeared at that hearing, counsel and the court immediately proceeded with the business of discussing his guilty plea. The district court never asked Smith whether he was willing to waive his right to a preliminary hearing, and Smith’s written plea statement did not refer to this right.  Smith pled guilty without having had a preliminary hearing or waiving his right to one.

Smith argues that the trial court lacked jurisdiction to accept his guilty plea because he had not waived his right to a preliminary hearing and was not bound over.

Judge Davis,

[A] failure to bind over a defendant following either a preliminary hearing or the waiver of the right to a preliminary hearing is a jurisdictional defect that renders his guilty plea void.

At ¶ 7.

[W]hile the district court may have original jurisdiction over criminal cases, there are procedural limits on its ability to exercise that jurisdiction. Specifically, in criminal cases in which a defendant is entitled to a preliminary hearing, “the district court does not acquire jurisdiction until after a bindover order issues and the information and all other records are transferred to the district court.” State v. Humphrey, 823 P.2d 464, 465 n.2 (Utah 1991).

At ¶ 9.

While we agree that constitutional and other defects in the preliminary hearing or waiver thereof are nonjurisdictional, . . . the complete lack of a bindover order in this case—based on either a determination of probable cause following a preliminary hearing or a determination that the defendant waived the right to a preliminary hearing,. . . deprived the district court of jurisdiction to entertain Smith’s guilty plea.

At ¶ 10.

McQueen v. Jordan Pines Townhomes, 2013 UT App 53, No. 20110312-CA (February 28, 2013)

Affirming Judge Joseph Fratto’s, Third District, decision plaintiff’s Motion for Partial Summary Judgment, but denying Plaintiff’s request for attorney fees.

Background:

McQueen, an owner of a townhome at Jordan Pines Townhomes, signed a declaration obligating him to pay the home association’s assessments.  If the required assessments were not paid, the condominium declaration provided for the creation of a lien that may be enforced through foreclosure or sale in accordance with the law of “deeds of trust or mortgages or in any other manner permitted by law.”

McQueen rented the townhome to tenants and soon was in arrears on the association assessments.  Jordan Pines Townhomes’ attorney initiated the non-judicial foreclosure process.  The home was sold to Exchange Properties, Inc. (“Exchange”), and McQueen’s tenants were evicted.  McQueen sued to quiet title alleging that the non-judicial foreclosure procedure was ineffective and void because the attorney was not appointed as a trustee.

McQueen regained possession of the property only after bringing an unlawful detainer action against Exchange.  McQueen then amended his complaint in the current action alleging Exchange had committed waste and requesting attorney fees.  After a bench trial on the remaining issues, the district court denied McQueen’s request for attorney fees.

Judge Christiansen,

The Condominium Ownership Act requires that nonjudicial assessment lien foreclosures and sales be carried out pursuant to the requirements set forth in the Trust Deed Act. The Trust Deed Act, in addition to other procedural requirements like proper notice, requires the creation of a trust relationship and the appointment of a qualified trustee.6 The extent to which these requirements apply to the Condominium Ownership Act is the subject of the Association’s appeal.

At ¶ 11.

Our analysis of the plain language of the Condominium Ownership Act and Trust Deed Act leads us to conclude that more than just the Trust Deed Act provisions relating to timing and notice, as argued by the Association, should apply to a nonjudicial foreclosure of an assessment lien. In construing the two statutes together, we determine that the Condominium Ownership Act forms a foundational base for the foreclosure of an assessment lien on a condominium unit, which base is supplemented by the Trust Deed Act. In other words, just because elements of the Trust Deed Act are incorporated by reference in the Condominium Ownership Act does not mean that the two statutes conflict. As a result, themanager or management committee that pursues foreclosure without involving the court must appoint a qualified trustee to conduct the sale or foreclosure of a condominium owner’s interest in the unit. This interpretation harmonizes the Condominium Ownership Act with the Trust Deed Act and avoids the conflicts envisioned by the Association.

At ¶ 17.

the plain language of subsection 57‐8‐20(4)(b) does not extend the power of sale to the Association’s attorney without appointment as a qualified trustee.

At ¶ 20.

The Court also determines that McQueen was not entitled to attorney fees because his claim did not arise under a contract, the condominium declaration, under another applicable statute, or as consequential damages.

none of the five counts listed in McQueen’s second amended complaint expressly or substantively alleged a breach of the condominium declaration.

At ¶ 24.

Recovery of attorney fees as consequential damages generally applies in just two situations. The first is when the litigation is based on an insurance contract. See Pugh v. North Am. Warranty Servs., Inc., 2000 UT App 121, ¶ 14, 1 P.3d 570 (“Our courts have carved out a narrow exception to [the] rule [requiring statutory or contractual authorization for attorney fees] in the insurance context.”). This case is clearly not based on an insurance contract. Second, “[a] well-established exception to this general rule allows recovery of attorney fees as consequential damages, but only in the limited situation where the defendant’s breach of contract foreseeably caused the plaintiff to incur attorney fees through litigation with a third party.” Collier, 827 P.2d at 984; see also Lewiston State Bank v. Greenline Equip., LLC, 2006 UT App 446, ¶ 22, 147 P.3d 951. This exception refers to the third-party tort rule and does not apply in this case.

At ¶ 26.

Judge Voros (Concurring),

Judge Voros concurs in the result, but argues that the home owners’ associate can not nonjudicially foreclose on the property without the actual transfer of a trust deed.  Here, the home owners’ associate was seeking to foreclose based merely on a lien.

State v. Garcia, 2013 UT App 54, No. 20120147-CA (February 28, 2013)

Affirming Judge Vernice Trease, Third District, Salt Lake Department

Per Curiam,

Defendant challenges the sufficiency of evidence supporting her conviction for distribution of a controlled substance.  The Court reviews the evidence and affirms.

In re A.A.J., 2013 UT App 55, No. 20121090-CA (February 28, 2013)

Affirming Judge Fredric Oddone, Third District, Salt Lake Department

Per Curiam,

Mother asserts that there was insufficient evidence that she was an unfit or incompetent parent, and that the juvenile court erred by declining to offer her further reunification services.

We “review the juvenile court’s factual findings based upon the clearly erroneous standard.” In re E.R., 2001 UT App 66, ¶ 11, 21 P.3d 680. A finding of fact is clearly erroneous only when, in light of the evidence supporting the finding, it is against the clear weight of the evidence. See id. Furthermore, we give the juvenile court a “‘wide latitude of discretion as to the judgments arrived at’ based upon not only the court’s opportunity to judge credibility firsthand, but also based on the juvenile court judges’ ‘special training, experience and interest in this field.’” Id. Finally, “[w]hen a foundation for the court’s decision exists in the evidence, an appellate court may not engage in a reweighing of the evidence.” In re B.R., 2007 UT 82, ¶ 12.

At ¶ 2.

The Court reviews the evidence and affirms

In re B.H.-J. and B.H., 2013 UT App 56, No. 20120940-CA (February 28, 2013)

Affirming Judge Thomas Higbee, Fifth District, Beaver Department

Per Curiam,

Father challenges the sufficiency of evidence to support the court’s findings that he abandoned his children, neglected the children and is an unfit parent.  The Court reviews the evidence and affirms.