October 31, 2013 Utah Court of Appeals Case Summaries

Harper v. Harper, 2013 UT App 258, No. 20120994-CA (October 31, 2013)

ISSUES: Divorce Findings

Per Curiam,

Bruce A. Harper (Husband) seeks to appeal a March 29, 2012 order on his petition to modify the parties’ divorce decree and an October 26, 2012 order on his motion to set aside the judgment on his petition to modify.. . .

At ¶ 1.

Only issues challenging the October 26, 2012 order on the motion to set aside the judgment are before us in this appeal. Those issues are whether the district court erred in denying the motion to set aside its orders regarding (1) the parties’ life insurance policy, (2) Husband’s claim for reimbursement of amounts paid for the children’s medical expenses, (3) child custody, and (4) amounts claimed by Husband related to the marital residence. When an order on a motion to set aside a judgment is appealed, the appeal is limited to review of the motion to set aside and is not an appeal from the underlying judgment. See Franklin Covey Client Sales, Inc. v. Melvin, 2000 UT App 110, ¶ 19, 2 P.3d 451. The district court is afforded broad discretion in ruling on a motion for relief from a judgment, and its determination will not be disturbed absent an abuse of discretion. See Birch v. Birch, 771 P.2d 1114, 1117 (Utah Ct. App. 1989).

At ¶ 2.

The Court reviews the trial Court’s findings and finds that it did not abuse its discretion on any of the issues raised by appellant.

At ¶¶ 3-10.

Partlow Investment Properties v. Yamamoto, 2013 UT App 259, No. 20130382‐CA (October 31, 2013)

 

ISSUES: Untimely Motion to Amend Judgment did not toll time period to file appeal, necessity of signed proposed order

Per Curiam,

Tomoaki Yamamoto appeals the district court’s April 3, 2013 order denying his motion to amend the judgment and to stay execution of the judgment. . . .

At ¶ 1.

[T]he February 22, 2013 order fully resolved the motion for a new trial and other assorted orders, thereby starting the thirty-day notice of appeal period for both the original judgment and the order denying the motion for a new trial. Yamamoto did not file a notice of appeal. Instead, he filed a motion to amend the judgment. This did not stay the notice of appeal period because it was not filed within ten days of the judgment; it was filed within ten days of an order resolving the post-judgment motion. See Utah R. Civ. P. 59(e) (requiring a motion to amend to be filed within “10 days after entry of the judgment”). Thus, it could not operate to toll the period to file a notice of appeal. See Utah R. App. P. 4(b)(1)(D) (stating that time to appeal is extended if a timely motion under rule 59 is filed).

At ¶ 3. 

Further, this court has no jurisdiction over that part of the order granting Partlow Investment Properties’ request for an augmented judgment because the court ordered Partlow to prepare a proposed judgment and that order has not yet been signed and entered by the district court. Accordingly, no final, appealable order exists concerning any issues involving the proposed augmented judgment. See Utah R. App. P. 3(a) (stating that appeals may only be taken from final orders).

At ¶ 4.

Everett v. Department of Workforce Services, 2013 UT App 260, No. 20130063-CA (October 31, 2013)

ISSUES: Fraudulent Receipt of Unemployment Benefits

Per Curaim,

A claimant for unemployment benefits is ineligible to receive benefits for any particular week in which the claimant obtains a benefit “by willfully making a false statement or representation or by knowingly failing to report a material fact.” Utah Code Ann. § 35A-4-405(5)(a) (LexisNexis Supp. 2012). As a result, if a claimant obtains unemployment benefits based upon false information to which he was not entitled, the claimant must repay any amounts received. See id. § 35A-4-405(5)(c)(i). Further, the claimant must pay, as a civil penalty, an amount equal to the amounts received as a result of the fraud. See id.

At ¶ 3.

The Department of Workforce Services’s (the Department) rules state that “[f]raud requires a willful misrepresentation or concealment of information for the purpose of obtaining unemployment benefits.” Utah Admin. Code R994-406-401(2). Thus, in order to establish fraud, the Department must establish materiality of the statement, knowledge, and willfulness. See id. R994-406-401(1). “Materiality is established when a claimant makes false statements or fails to provide accurate information for the purpose of obtaining . . . any benefit payment to which the claimant is not entitled.” Id. R994-406-401(1)(a)(i)(A). Knowledge is established when the claimant knew or should have known that the information submitted to the Department was incorrect or that the claimant failed to provide required information. See id. R994-406-401(1)(b). Finally, “[w]illfulness is established when a claimant files claims or other documents containing false statements, responses or deliberate omissions.” Id. R994-406-401(1)(c).

At ¶ 4.

Here, the evidence supports the Board’s findings and ultimate conclusions. During the two weeks in question, Everett obtained paid employment and worked for forty hours each of those weeks. However, in submitting his weekly claim for benefits, Everett answered “no” to the Department’s question, “During the week, did you work or attend paid training?” Because these statements were false and were made for the purpose of obtaining benefits for which Everett was not eligible, they support findings of materiality and willfulness. Further, because Everett knew or should have known that his statements were false, the statements also support a finding of knowledge.

At ¶ 5.

Everett argues that he did not commit fraud because upon obtaining his employment he contacted an employee of the Department. He explained to the employee that he had to go through testing during the first two weeks of his job, and that if he did not pass those tests, he would not be retained. Everett asserts that after being told this information, the employee told Everett to continue filing claims until his employment was secure. Everett contends that this is exactly what he did. However, the employee merely told him to continue submitting claims; he did not tell Everett how to answer the questions in submitting that claim or to include false information in his claim.

At ¶ 6.

Shah v. IHC, 2013 UT App 261, No. 20120402-CA (October 31, 2013)

ISSUES: Motion to Amend, Special pleading requirements (Fraud),  Expert Testimony, Breach of Contract, and Breach of the Implied Covenant of Good Faith and Fair Dealing

Judge Davis,

Aruna G. Shah and Ghanshyam B. Shah appeal the trial court’s denial of their motion for leave to amend their complaint against [Defendants].

At ¶ 1.

[The Shah’s] assert . . . that the trial court erred in refusing to grant them leave to amend their complaint with respect to [adding] the following claims: “fraudulent concealment, fraud, negligent misrepresentation, breach of contract, breach of the implied covenant of good faith and fair dealing, and violations of the UCSPA.

At ¶ 5.

The Shahs assert that the trial court erred in denying them leave to amend their complaint because it failed to individually analyze the legal sufficiency of each of the Shahs’ claims and because the claims were sufficient to withstand a motion to dismiss. “The granting or denial of leave to amend a pleading is within the broad discretion of the trial court, and we will not disturb such a ruling absent a showing of an abuse of that discretion.” Smith v. Grand Canyon Expeditions Co., 2003 UT 82, ¶ 31, 84 P.3d 1154. However, in this case, the trial court denied leave to amend on grounds of futility because it determined that the “proposed amendment would not withstand a motion to dismiss.” See Jensen v. IHC Hosps., Inc. (Jensen II), 2003 UT 51, ¶ 139, 82 P.3d 1076 (citation and internal quotation marks omitted). Whether a claim can withstand a motion to dismiss is a question of law, and we therefore review the trial court’s underlying determination regarding the legal sufficiency of the claim for correctness.

At ¶ 6.

The Shahs first assert that the trial court erred in determining that leave to amend was “an all‐or‐nothing proposition” and rejecting their proposed Second Amended Complaint in its entirety despite having analyzed the legal sufficiency of only some of their claims. . . . Given that “[t]he purpose of [rule 15] is to provide litigants the maximum opportunity for each claim to be decided on its merits rather than on procedural niceties,” Minter v. Prime Equip. Co., 451 F.3d 1196, 1204 (10th Cir. 2006) (emphasis added) (citation and internal quotation marks omitted) (interpreting the analogous rule 15 of the Federal Rules of Civil Procedure), we are not convinced that the trial court’s all‐or-nothing approach was appropriate. Rather, in the absence of some other justification for denying leave to amend, the trial court should have analyzed the futility of each individual claim and then, if there were no other grounds for precluding an amendment, granted leave to amend as to those claims that were legally viable, if any. . . .

At ¶ 7,

. . . We therefore turn to the question of whether the trial court correctly determined that the six claims that are the subject of this appeal were legally insufficient and therefore futile.

At ¶ 8.

Fraud Based Claims

The trial court determined that the Shahs’ “fraud‐based claims” lacked specificity and failed to “connect[] specific Defendants to specific fraudulent misconduct or misrepresentations.” Rule 9(b) of the Utah Rules of Civil Procedure mandates that “circumstances constituting fraud . . . shall be stated with particularity.” Utah R. Civ. P. 9(b). “[T]he mere recitation by a plaintiff of the elements of fraud in a complaint does not satisfy the particularity requirement.” Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35. “The relevant surrounding facts must be set forth with sufficient particularity to show what facts are claimed to constitute such charges.” Id. (citations and internal quotation marks omitted). Additionally, in order to plead fraud with particularity, the plaintiff must “identify the offender” rather than simply describe misrepresentations in the passive voice. . . . With respect to the Shahs’ fraud‐based claims (fraudulent concealment, fraud, and negligent misrepresentation) against most of the Defendants, we agree with the trial court that the claims do not comply with the particularity requirement.

At ¶ 10.

“Fraudulent concealment requires that one with a legal duty or obligation to communicate certain facts remain silent or otherwise act to conceal material facts known to him.” Jensen v. IHC Hosps., Inc. (Jensen I), 944 P.2d 327, 333 (Utah 1997); see also Nixdorf v. Hicken, 612 P.2d 348, 354 (Utah 1980). . . .  Fraud requires proof

(1) that a representation was made (2) concerning a presently existing material fact (3) which was false and (4) which the representor either (a) knew to be false or (b) made recklessly, knowing that there was insufficient knowledge upon which to base such a representation, (5) for the purpose of inducing the other party to act upon it and (6) that the other party, acting reasonably and in ignorance of its falsity, (7) did in fact rely upon it (8) and was thereby induced to act (9) to that party’s injury and damage.

Armed Forces Ins. Exch., 2003 UT 14, ¶ 16 (citation and internal quotation marks omitted). The elements of negligent misrepresentation are similar to those of fraud except that negligent misrepresentation “does not require the intentional mental state necessary to establish fraud.” Price–Orem Inv. Co. v. Rollins, Brown & Gunnel, Inc., 713 P.2d 55, 59 n.2 (Utah 1986); see also Smith v. Frandsen, 2004 UT 55, ¶ 9, 94 P.3d 919. . . .

At ¶ 11.

The Shahs assert generally that all of the Defendants failed to provide them with complete and accurate information regarding Aruna’s health and treatment after she received that treatment and therefore breached their fiduciary duty to her and conducted acts of fraud or negligent misrepresentation. However, as to all causes of action other than fraud and negligent misrepresentation against Dr. Bauman, see infra ¶ 13, the Shahs fail to explain which defendants had what knowledge, which defendants made what statements, or how the Defendants specifically breached their individual fiduciary duties. The Shahs assert that additional discovery is necessary in order to identify which individuals did what. But “a plaintiff alleging fraud must know what his claim is when he files it.” Farlow v. Peat, Marwick, Mitchell & Co., 956 F.2d 982, 990 (10th Cir. 1992) (interpreting rule 9(b) of the Federal Rules of Civil Procedure), overruled on other grounds by Central Bank v. First Interstate Bank, 511 U.S. 164 (1994), as recognized by Seolas v. Bilzerian, 951 F. Supp. 978, 982 (D. Utah 1997). “[A] complaint alleging fraud should be filed only after a wrong is reasonably believed to have occurred; it should serve to seek redress for a wrong, not to find one.” Segal v. Gordon, 467 F.2d 602, 607–08 (2d Cir. 1972); cf. Downtown Athletic Club v. Horman, 740 P.2d 275, 278 (Utah Ct. App. 1987) (explaining that in determining whether to grant an extension to permit discovery prior to hearing a motion for summary judgment, the trial court should consider whether the facts sought through discovery are merely speculative). Thus, the Shahs’ general assertion of wrongdoing against the Defendants does not meet the particularity requirement as to the three fraud based claims.

At ¶ 12.

The Shahs do plead with particularity their claims of fraud and negligent misrepresentation against Dr. Bauman. They cite a number of allegedly knowing false statements made to them by Dr. Bauman, which they maintain “induce[d them] to undergo the expensive, elective spinal stabilization surgery at LDS Hospital instead of deciding to transport [Aruna] to [a hospital near her home in] Colorado or opting for a less expensive, non‐surgical course of treatment such as bed rest.” Dr. Bauman argues that any alleged falsity of his statements, particularly regarding Aruna’s risk of paralysis, her stability prior to surgery, and the allergic reaction she suffered during surgery were beyond the ken of a lay person and needed to be established by expert testimony. We agree. . . . Dr. Bauman asserts that the Shahs’ fraud and negligent misrepresentation claims required expert testimony on the same facts that were the subject of the negligence claims and that because the trial court prohibited expert testimony on those facts due to the Shahs’ failure to timely disclose experts, we should affirm the trial court’s determination that the claims would have been futile.

At ¶ 13.

The Shahs respond that summary judgment was granted only as to the negligence claims and that it therefore did nothing to preclude the proposed claims in the motion for leave to amend. While the summary judgment resolved different claims than those the Shahs now seek to bring, many of those claims are based on the same underlying facts as the negligence claims. The trial court’s ruling that the Shahs’ lack of expert testimony precluded them from establishing facts necessary to their prima facie case of negligence implicitly adjudicated the Shahs’ ability to establish those same facts with respect to any other claims as well. . . . Thus, to the extent that the same factual issues that were relevant to the negligence claims are relevant to the Shahs other claims, the propriety of the trial court’s denial of their motion for leave to amend is moot; permitting the Shahs to amend their complaint would be futile because they could not present expert testimony pertaining to any factual issues that were necessary to the negligence claims. . . .

At ¶ 14.

Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing

“The elements of a prima facie case for breach of contract are (1) a contract, (2) performance by the party seeking recovery, (3) breach of the contract by the other party, and (4) damages.” Bair v. Axiom Design, LLC, 2001 UT 20, ¶ 14, 20 P.3d 388. “An implied covenant of good faith and fair dealing inheres in every contract,” and a party breaches the covenant by intentionally injuring “the other party’s right to receive the benefits of the contract.” Eggett v. Wasatch Energy Corp., 2004 UT 28, ¶ 14, 94 P.3d 193.

At ¶ 16.

To the extent that the Shahs’ claims allege that the Defendants breached their contractual obligations to Aruna “by failing to provide professional health care services in accordance with generally accepted standards of professionalism and good faith,” we agree with the Defendants that the proposed amendment is simply an effort to clothe the negligence claims in contractual language. See Utah Code Ann. § 78B‐3‐403(17) (“‘Malpractice action against a health care provider’ means any action against a health care provider, whether in contract, tort, breach of warranty, wrongful death, or otherwise, based upon alleged personal injuries relating to or arising out of health care rendered or which should have been rendered by the health care provider.”) . . . Because the same facts necessary to prove medical negligence are necessary to prove breach of contract based on the failure to provide adequate professional health services, the Shahs’ failure to timely file their expert disclosures makes the trial court’s denial of their motion to amend on this issue moot, and amendment now would be futile.

At ¶ 18.

To the extent that the Shahs’ claims are based on the Defendants’ alleged contractual obligations to provide the Shahs with Aruna’s complete medical chart and to inform them of “material information concerning [her] physical condition,” the Shahs have failed to allege that any contracts between the Shahs and the Defendants gave rise to a duty to provide medical information or complete medical records. The duty to provide such information is a common law fiduciary duty arising out of the physician–patient relationship and does not necessarily inhere as a result of a contract to provide medical services. . . .

At ¶ 19.

Violations of the UCSPA

Finally, we agree with the trial court that the Shahs’ UCSPA claim is merely another attempt to litigate the negligence claims under another name. The UCSPA establishes a cause of action for consumers against suppliers for deceptive and unconscionable acts and practices in connection with consumer transactions. See Utah Code Ann. §§ 13‐11‐4 to ‐5 (LexisNexis 2009 & Supp. 2013). The Shahs’ proposed Second Amended Complaint asserts that the “Defendants knowingly and intentionally engaged in deceptive acts and fraudulent practices . . . by indicating to [the Shahs] that the subject of the consumer transactions was of a particular standard, quality and quantity, when it was not” and “by failing to disclose material information concerning [Aruna’s] physical condition.” In other words, the Shahs claim that the Defendants did not provide them with appropriate and professional medical care. This claim falls squarely within the purview of the medical malpractice statute. See id. § 78B‐3‐403(17) (Supp. 2013). The Shahs assert that they are entitled to bring a UCSPA claim even if it overlaps with their negligence claims. See id. § 13‐11‐19(1), (3) (indicating that “[w]hether he seeks or is entitled to damages or otherwise has an adequate remedy at law,” a consumer may bring an individual or class action “for declaratory judgment, an injunction, and appropriate ancillary relief”). However, even accepting this assertion as true, the Shahs’ lack of expert testimony once again precludes them from establishing that the Defendants provided Aruna with inadequate medical care.

At ¶ 20.