April 5, 2013, Utah Supreme Court Case Summaries

April 5, 2013,

Utah Supreme Court Cases

State v. Berriel, 2013 UT 19, No. 20110926 (April 5, 2013)

Affirming Judge Gary Stott,

Justice Durham,

On certiorari, we consider whether the court of appeals erred in affirming the district court’s refusal to instruct the jury on defense of a third person. We consider whether the evidence supports defendant Darren Berriel’s theory that he stabbed the victim in defense of a third person under Utah Code section 76-2-402. We agree with the court of appeals that there is no basis in the evidence to support this theory and accordingly affirm.

At ¶ 1.

A “[d]efendant is entitled to have the jury instructed on [the defense’s] theory of the [case] if there is any basis in the evidence to support that theory.” State v. Brown, 607 P.2d 261, 265 (Utah 1980).

At ¶ 12.

Under Utah Code section 76-2-402(1)(a), “[a] person is justified in threatening or using force against another when and to the extent that the person reasonably believes that force or a threat of force is necessary to defend the person or a third person against another person’s imminent use of unlawful force.” “When interpreting a statute, we assume, absent a contrary indication, that the legislature used each term advisedly according to its ordinary and usually accepted meaning.” Marion Energy, Inc. v. KF  Ranch P’ship, 2011 UT 50, ¶ 14, 267 P.3d 863 (internal quotation marks omitted). The key terms in section 76-2-402 for purposes of this case are “imminent” and “necessary.”

At ¶ 13.

The Court reviews the evidence and determines that there is no evidence to support Defendant’s defense of a third party theory of the case because the evidence does not support the imminent or necessary requirements of the statute.

At ¶¶ 15-16.

[S]tanding alone, a history of violence or threats of future violence are legally insufficient to create “a situation of imminent danger.” Id. at 820. And we see no other facts in the record which, taken together with Luis’s history of violence, render erroneous the district court’s refusal to instruct the jury on defense of a third person.

At ¶ 20.

Mclaughlin v. Schenk, 2013 UT 20, No. 20111109 (April 5, 2013)

Affirming Judge Anthony Quinn

Justice Parrish,

The Court summarizes the complex background of this case.  Essentially, this case arises from a dispute between majority shareholders (Schenk) and a minority shareholder (Mclaughlin) in a closely held corporation.  One majority shareholder sold his shares to Schenk without offering the right of first refusal to the corporation or the other shareholders in violation of the shareholder agreement.  In response to Mclaughlin’s complaints, the shareholders, including Schenk, voted to ratify the action and waive the requirements of the shareholder agreement.  Mclaughlin sued to enforce the shareholder agreement.

The Supreme Court in Mclaughlin I held that the shareholder vote to ratify the move was tainted by the new owner’s inclusion in the vote and remanded the case to determine the fairness of the ratification vote.  Before the fairness hearing, the corporation again voted to ratify the decision, but did not include Schenk in the vote.  The District Court initially found that the corporation’s actions did not suffice and that McLaughlin was “entitled to the fairness hearing identified by the Supreme Court.”  However, a new judge was assigned to the case and he granted the corporation summary judgment based on the new vote to ratify the sale.  Mclaughlin appeals the grant of summary judgment.

Mclaughlin asserts four theories: (1) the second district court judge violated the law of the case doctrine by ignoring the first judge’s ruling that he was entitled to a fairness hearing; (2) the holding of McLaughlin I that shareholders in closely held corporations owe each other fiduciary duties has been superseded by statute and the new statute is dispositive in this case; (3) the District Court violated the Supreme Court’s order in Mclaughlin I to hold a fairness hearing, and the post-remand corporate action did not moot the need for a fairness hearing; and (4) the 2009 ratification of the vote by the disinterred shareholders was not effective because they were not provided sufficient information.

At ¶¶ 5-18.

Law of the Case Doctrine

Under the law of the case doctrine, “a court [may] decline to revisit issues within the same case once the court has ruled on them.” IHC Health Servs., Inc. v. D & K Mgmt., 2008 UT 73, ¶ 26, 196 P.3d 588. However, this doctrine is generally discretionary, with three exceptions for extraordinary circumstances in which reconsideration is mandatory.

Law of the case does not prohibit a district court judge from revisiting a previously decided issue during thecourse of a case, regardless of whether the judge has changed or remained the same throughout the proceedings. Rather, the doctrine allows a court to decline to revisit issues within the same case once the court has ruled on them.

Mid-Am. Pipeline Co. v. Four-Four, Inc., 2009 UT 43, ¶ 11, 216 P.3d 352 (internal quotation marks omitted).

At ¶ 22.

McLaughlin correctly points out that there are exceptions to the law of the case. In these situations, a judge is required to reassess a prior ruling. These situations are “(1) when there has been an intervening change of authority; (2) when new evidence has become available; or (3) when the court is convinced that its prior decision was clearly erroneous and would work a manifest injustice.” Mid-Am. Pipeline, 2009 UT 43, ¶ 14 (internal quotation marks omitted). “While there are exceptions to the doctrine of law of the case, these exceptions function only to dictate when the district court has no discretion but rather must reconsider a previously decided, unappealed issue.” Id. The exceptions do not operate to bar a replacement judge from reconsidering an issue previously ruled on by a prior judge in the same case. We therefore hold that the replacement judge did not abuse his discretion when he decided to re-visit the retired judge’s decision ordering a fairness hearing.

At ¶ 24.

New Statute

As a general rule, statutes are not retroactive without clear evidence to the contrary. Warne v. Warne, 2012 UT 13, ¶ 25, 275 P.3d 238; see also UTAH CODE § 68-3-3 (“A provision of the Utah Code is not retroactive, unless the provision is expressly declared to be retroactive.”). Because section 622(3) is silent as to retroactivity, it does not apply retroactively. And because the stock purchase, the 2005 Waivers, and the 2009 Ratifications all occurred prior to the passage of the amendment, section 622(3) does not apply and is not dispositive here.

At ¶ 28.

Consideration of Post-Remand Corporate Waiver

There was nothing in our McLaughlin I opinion forbidding Cookietree from attempting to remedy the defects in the 2005 Waivers using procedures available under then-applicable law and its corporate governance documents. The disinterested Board and the disinterested shareholders were therefore free to act, and if they were successful in ratifying the 2005 Waivers, then our order for a fairness hearing would necessarily be moot. Thus, the district court did not violate our remand order when it considered the validity of other avenues for resolving the nontransaction conflict of interest created by the 2005 Waivers.

At ¶ 30

Challenge to 2009 ratification vote

[Mclaughlin] argues that the post-remand actions by the Board and shareholders could not be effective as a matter of law because there remained disputed issues of fact as to the adequacy and fairness of the information provided to the disinterested director.

At ¶ 31.

McLaughlin’s alleged factual disputes about Rudd’s [the disinterested shareholder] knowledge regarding the stock transfers are legally irrelevant. There is nothing in the Corporation Act or the Bylaws requiring that qualified directors have a perfect knowledge as to all matters on which they cast a vote. The only requirement is that they be disinterested and that the conflicted director disclose “the existence and nature of the conflicting interest . . . and all facts known to the director respecting the subject matter of the transaction that an ordinarily prudent person would reasonably believe to be material to a judgment about whether or not to proceed with the transaction.” Id. §§ 16-10a-850(4), 16-10a-852(3). And McLaughlin does not even attempt to argue that Rudd was conflicted.

The 2009 Ratification resolved any conflict of interest problem with the transfer of shares to Schenk. Summary judgment was therefore proper.

At ¶¶ 40-41.