Alarm Protection v. Bradburn ( 2021 )

2021 UT 25IN THE
SUPREME COURT OF THE STATE OF UTAH
ALARM PROTECTION TECHNOLOGY, LLC
Appellee,
v.
RYAN BRADBURN,
Appellant.
No. 20190154
Heard October 14, 2020
Filed July 1, 2021
On Direct Appeal
Third District, Salt Lake
The Honorable Keith Kelly
No. 170901374
Attorneys:
Erik A. Olson, Jason R. Hull, Trevor C. Lang, Salt Lake City,
for appellee
Kamron Keele, Chicago, IL, for appellant
ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court
in which JUSTICE PEARCE joined. CHIEF JUSTICE DURRANT,
JUSTICE HIMONAS and JUSTICE PETERSEN concur
with exception to section III.
JUSTICE PETERSEN authored a concurring opinion
in which CHIEF JUSTICE DURRANT and JUSTICE HIMONAS joined.
ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:
¶1 This is one of two pending cases in which a former sales
representative of Alarm Protection Technology (APT) seeks to
challenge a set of steps taken by APT to insulate itself from claims
for unpaid compensation. The challenged steps include APT’s
payment of an advance in exchange for the execution of a
confession of judgment, the entry of a judgment by confession,
the issuance of a writ of execution against the sales
representative’s claims for unpaid commissions, APT’s purchase
ALARM PROTECTION TECHNOLOGY v. BRADBURN
Opinion of the Court
of those claims at a constable sale, and APT’s substitution as
plaintiff on the claims against APT.
¶2 In this case, Ryan Bradburn asserts that APT’s actions
illegally and unfairly deprived him of the right to assert his claims
for commissions owed to him by APT. Yet several elements of
Bradburn’s sweeping challenge to APT’s “scheme” 1 are not
properly presented for our review. The sole question presented
goes to the district court’s denial of Bradburn’s motion for return
of excess proceeds and unused property from APT’s purchase of
his claims. We affirm the denial of that motion. In so doing, we
reject Bradburn’s argument that APT was required to establish the
value of his claims before executing on them and purchasing
them at the constable sale, to presume (absent such proof) that the
true value of the claims was established in the allegations of
Bradburn’s complaint, and to return to Bradburn “excess
proceeds” or “unused property” calculated on the basis of those
allegations.
I
¶3 Bradburn worked as a sales representative for APT from
2013 to 2015. During that period, he entered into written
agreements under which APT agreed to pay him advances
against future compensation 2 and Bradburn agreed to secure
repayment of any unearned advances by executing a promissory
note and confession of judgment. 3
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1We put “scheme” in quotes throughout this opinion to reflect
the terminology used in Bradburn’s briefing. In so doing we
recognize that APT objects to the term as a loaded one. And we
take no position on the question whether the shoe fits. That
question is not presented for our review.
2 In his briefs on appeal, Bradburn asserts that he never
received “advances” despite APT’s promise to provide them. APT
claims that it in fact paid advances. We do not resolve this conflict
because it is not presented for our review and not necessary to our
decision.
3 See UTAH R. CIV. P. 58A(i) (providing for entry of “judgment
by confession” if “authorized by statute”); UTAH CODE § 78B-5-205
(authorizing entry of “judgment by confession . . . without action,
(continued . . .)
2
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¶4 Bradburn signed one such agreement in December 2014.
Under that agreement APT agreed to advance Bradburn $24,000
and Bradburn executed a promissory note and confession of
judgment in that amount. Bradburn’s relationship with APT
ended a few months later—in June 2015. And a few years after
that a dispute arose as to the parties’ financial obligations to each
other.
¶5 On March 1, 2017, Bradburn filed an action in Fourth
District Court alleging that APT and related parties owed him
$348,434 in unpaid commissions and were also liable for treble
damages (total damages of $1.1 million) and attorney fees under
the Sales Representative Commission Payment Act, Utah Code
§§ 34-44-101–302. Later that same day, APT filed the $24,000
confession of judgment (signed by Bradburn in 2013) in Third
District Court. Bradburn filed no objection, and a judgment by
confession was entered on May 10, 2017.
¶6 APT then took steps toward collecting on the judgment
by confession. In May 2017, it filed an application for a writ of
execution, seeking to seize Bradburn’s claims in the filed Fourth
District case and to have them sold at a constable sale. The
requested writ described the property as follows:
a. All rights, claims, interests, and choses in
action that the judgment debtor has in the action
entitled Ryan Bradburn v. Alarm Protection Technology,
LLC, et al., Fourth District Court, Provo, Case No.
170400290. Value Unknown.
b. All rights, claims, interests, and choses in
action that the judgment debtor may have against
Alarm Protection Technology, LLC, Alder Holdings,
LLC, Alder Protection Holdings, LLC, Adam
Schanz, their subsidiary, affiliates, officers,
principals, employees, agents, attorneys, or staff.
Value Unknown.
¶7 In July 2017, Bradburn filed a motion to quash the
requested writ, asserting that APT’s “scheme” deprived him of
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either for money due or to become due . . . in the manner
prescribed by law”).
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ALARM PROTECTION TECHNOLOGY v. BRADBURN
Opinion of the Court
due process and that it violated public policy. The district court
denied the motion to quash. It concluded that Utah law
authorized APT to execute on Bradburn’s claims and that doing
so was not against public policy. But the court stayed execution of
Bradburn’s claims to allow him to file a motion to set aside the
judgment by confession under rule 60(b) of the Utah Rules of
Civil Procedure.
¶8 Bradburn did not appeal the denial of his motion to
quash. Instead he filed a motion to vacate the judgment under
rule 60(b). In that motion Bradburn asserted various challenges to
APT’s use of the confession of judgment to acquire his claims. The
district court denied the motion to vacate the judgment after a
two-day evidentiary hearing. It noted that Bradburn had
“acknowledged that he had been given sufficient time to review
the promissory note and confession of judgment before he signed
them,” and “acknowledged, and [APT’s] records demonstrated,
that he had received at least $24,000 in advancements or expenses
paid on his behalf by [APT].” It also found that there was
“sufficient evidence to determine that [Bradburn] voluntarily
stopped working for [APT] on or about June 5, 2015.” And it
denied the motion to vacate in light of these determinations.
¶9 Again Bradburn did not appeal, and APT served
Bradburn with a notice of constable sale under the writ of
execution. After the required publication notice, a constable sale
was held on February 20, 2018. APT appeared at the sale and
purchased the claims on a credit bid of $2,500. And it then filed a
partial satisfaction of judgment, providing an accounting of the
sale proceeds and indicating that the $2,500 bid was allocated to
constable fees of $497.28 and $2002.72 toward the $24,000
judgment.
¶10 Bradburn sought to challenge this allocation under a
“motion for return of excess proceeds and unused property from
constable sale.” In that motion, Bradburn asserted that APT was
liable to return to him the sum of “just under” $1.1 million, which
he calculated by assigning a $1.1 million value (the amount
pleaded in his complaint) to the claims asserted in the Fourth
District action and subtracting the amount owed on the judgment
by confession.
¶11 Bradburn withdrew this motion after briefing had already
been submitted and just before a scheduled oral argument. But
4
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three months later he refiled an identical motion. 4 The district
court denied the renewed motion. It held that Bradburn had
identified no basis for his assertion that there were excess
“proceeds” or “property” to be delivered to Bradburn after the
constable sale. The court based this determination on the only
“evidence before the court” of the value of the claims—the
certificate of constable sale and the accounting in APT’s
satisfaction of judgment. Because those documents showed that
the claims were purchased for $2,500 and that $497.28 was
allocated to costs, the court held that there were “no ‘proceeds’
left because the judgment was not paid in full” and “there was no
‘remaining property [or] proceeds’ to deliver to [Bradburn].”
¶12 The district court also rejected Bradburn’s attempt to
assert objections under the motion for return of proceeds that
should have been raised in connection with his earlier motion to
quash the writ of execution. It noted that the writ of execution had
“listed the estimated value of the property as ‘unknown,’” and
observed that Bradburn had failed to “challenge the writ on that
basis.” In fact, the court noted that Bradburn had agreed that the
value of his property was “unknown” given that the claims had
not been adjudicated. And it concluded that this further
supported its denial of Bradburn’s motion.
¶13 Lastly, the district court also rejected Bradburn’s assertion
that either APT or the constable bore some sort of burden to
present an expert or other valuation of the property. The court
found “nothing in the rules that requires a creditor to hire an
expert witness to value property before it is sold.” Alternatively,
the court emphasized that there was “no evidence in the record”
to support Bradburn’s assertion that his claims “were worth
anywhere near $1 million.” The only evidence of value in the
record came from the highest bid at the constable sale, and
Bradburn had made no showing that he was “entitled to any
credit to his judgment other than the $2500 credit bid less the
amount kept by the constable for noticing and holding the sale.”
¶14 Bradburn then filed this appeal, insisting that APT was
“required under Utah law . . . to estimate the value” of the
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4 The timeliness of the refiled motion is not presented for our
review.
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ALARM PROTECTION TECHNOLOGY v. BRADBURN
Opinion of the Court
property that was the subject of the writ of execution, and asserts
that he is entitled to a payment of “excess proceeds” based on the
alleged value of the claims set forth on the face of the complaint in
the Fourth District Court ($1.1 million).
¶15 Bradburn preserved only a narrow objection in the
district court proceedings before us on this appeal—in his motion
for return of excess proceeds. And we see no reason to disagree
with the district court’s decision denying that motion—much less
to reverse under the governing standard of review. See Utah Dep't
of Transp. v. G. Kay, Inc., 2003 UT 40, ¶ 5, 78 P.3d 612 (we review
findings of fact for clear error and conclusions of law for
correctness).
II
¶16 Bradburn’s motion for return of excess proceeds was both
procedurally barred and groundless. And our affirmance of the
decision to deny it forecloses a range of other claims raised in
Bradburn’s briefing.
¶17 In advancing his motion for return of excess proceeds,
Bradburn cited rule 64(f)(3) of the Utah Rules of Civil Procedure,
which directs the court to “order any remaining property and
proceeds of sales delivered to the defendant” upon discharge of a
writ, and rule 69B(e), which provides for the “order” in which the
property is to be applied under an “accounting” of a constable
sale, “up to the amount due or the value of the property,
whichever is less.” Bradburn views the referenced “value” of the
property as its “true value.” And he deems the judgment
creditor’s burden of advancing proof of such value to be implicit
in the duty to provide an “accounting” of a constable sale.
Because APT failed to present such evidence, Bradburn asked the
district court to presume that the “value” of his claims must have
been the amount he placed on them in the complaint filed in the
Fourth District. And with that in mind, Bradburn claimed that
there were remaining “proceeds of the sale” of his claims that he
was entitled to receive under rule 69B(e).
¶18 The district court denied this motion as either
procedurally barred or substantively meritless. The procedural
bar holding focused on the fact that the alleged burden to produce
evidence of value was ultimately aimed at the writ of execution,
not the constable sale. The writ of execution had “listed the
estimated value of the property as ‘unknown,’” and Bradburn
6
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failed to “challenge that writ on that basis.” As to the merits, the
district court found “nothing in the rules that requires a creditor
to hire an expert witness to value property before it is sold,” and
no basis in the record for valuing the property at anything other
than the successful credit bid of $2,500. We agree with both of
these grounds 5 and accordingly affirm.
A
¶19 Bradburn’s motion for return of excess proceeds was
procedurally misdirected. The motion was rooted in the notion
that APT bore a burden of producing evidence of value in support
of its writ of execution. Yet as the district court noted, Bradburn
failed to advance that argument at the procedural point at which
it was in play—in a reply to or motion to quash the writ of
execution. 6 Bradburn did file a motion to quash the writ. But he
didn’t make this argument in that motion, and in any event he
filed no appeal from the denial of that motion.
______________________________________________________________________________
5 APT has challenged the sufficiency of Bradburn’s briefing on
the merits, inviting us to affirm on inadequate briefing grounds—
on the basis of a determination that Bradburn’s briefs presented
no “reasoned analysis” supported by any “citations to legal
authority.” We reject this invitation. Bradburn’s legal analysis is
admittedly scant. And the absence of analysis rooted in case law
certainly cuts against the persuasiveness of Bradburn’s position.
See State v. Nielsen, 2014 UT 10, ¶ 34, 326 P.3d 645 (explaining that
our assessment of the adequacy of briefing is simply a
“component of our evaluation of the case on its merits”). But
Bradburn has cited and argued on the basis of another form of
“legal authority”—the language of our rules of civil procedure.
Such authority is ultimately unpersuasive, but we decline to
resolve the case on the mere basis of inadequate briefing.
6 Bradburn’s challenge to the writ of execution was in a motion
to quash. APT raised no objection to the procedural propriety of
such motion. It did not assert, for example, that Bradburn was
somehow barred because he failed to submit a “reply” to the writ
of execution within 14 days under rule 64E(d) of the Utah Rules of
Civil Procedure. And this question is likewise not raised in the
briefing in this case. For these reasons we do not pursue this
question further here.
7
ALARM PROTECTION TECHNOLOGY v. BRADBURN
Opinion of the Court
¶20 For this reason the district court was right to deny
Bradburn’s motion as procedurally barred. There is a
fundamental mismatch between the substance of Bradburn’s
argument and the procedural basis for his challenge (and appeal).
And that is fatal to his position.
B
¶21 Bradburn has also failed to establish a substantive basis
for his motion in any event.7 Nothing in the terms or structure of
our rules establishes a burden of a judgment creditor to introduce
affirmative proof of the property’s “true value.” And there is
likewise no basis in our rules for a court to assume that the self-
serving value placed on the property by its owner is its “true
value,” and no ground for concluding that the district court was
required to calculate the availability of excess proceeds or unused
property on that basis.
¶22 Our rules implicitly—but quite clearly—establish a
different mechanism for calculating the value of the property and
the availability of “remaining proceeds.” Value and proceeds are
established under our rules by the amount paid “at auction to the
highest bidder.” UTAH R. CIV. P. 69B(d). This is clear from the
requirement that the constable “sell only so much property as is
necessary to satisfy the amount due.” Id. A constable will know
the amount due on the judgment and the amount paid by the
highest bidder but will have no basis for calculating the “true
value” of the sold property. And the requirement to sell only the
property “necessary to satisfy the amount due” is thus
incompatible with Bradburn’s position.
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7 Bradburn’s appeal seeks to challenge APT’s application for
the writ of execution on the ground that it failed to give an
adequate statement of the “estimated value of the property” to be
executed, as required under rule 64E(b)(2) of the Utah Rules of
Civil Procedure. But Bradburn preserved no such challenge in the
district court. In fact he agreed in the district court that the
property value was “unknown.” It is not obvious, moreover, how
any deficiency in the statement of “unknown” value would affect
Bradburn’s principal claim that he was entitled to a return of
excess proceeds or unused property.
8
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¶23 As Bradburn has noted, a plaintiff may be required to
“deliver an accounting of the sale.” Id. 69B(e). And rule 69B(e)
prescribes the “order” in which the proceeds of the property are
to be distributed, “up to the amount due or the value of the
property, whichever is less”: first to pay the “costs” of the sale,
then to pay the plaintiff on the judgment, and last to “deliver to
the defendant the remaining property and proceeds of the sale.”
Id. Yet rule 69B(e) yields no basis for treating the referenced
“value” as a value established by the plaintiff—much less for
assuming that the defendant’s own view of its value should
control. In context, our rules’ reference to “value” is to the market-
based indication of value established by our rules—in the amount
paid by the “highest bidder” at the constable sale.
¶24 Nowhere do our rules require a judgment creditor to
carry a burden of proving the “true” value of property that is
subject to a constable sale. And they don’t provide for property to
be valued based on the self-serving valuation of a judgment
debtor. Our rules protect a judgment debtor’s interests in other
ways. They allow the judgment debtor to challenge a writ of
execution on a “reply” and request for an evidentiary hearing, id.
64E(d), to participate in the constable sale, id. 69B(d), and to
request an accounting and seek “remaining proceeds” or
“remaining property,” id. 69B(e). Our rules are detailed and
comprehensive. Because they say nothing about any requirement
that the judgment creditor put on evidence of value of the
property, the clear implication is that the judgment debtor is
protected in other ways—and that the property is valued (for
purposes of the 69B(e) right to “remaining proceeds”) not by any
kind of evidence that is to be presented prior to the sale but by the
purchase price at the constable sale.
¶25 This is confirmed by a body of case law establishing a
remedy for setting aside a constable sale. Our cases have long
held that a judgment debtor has a right to file a motion to set
aside a constable sale under a “sliding scale” showing of “gross
inadequacy” of the purchase price and “irregularities during the
sale that contributed to the inadequacy of price.” Pyper v. Bond,
2011 UT 45, ¶¶ 2, 15, 258 P.3d 575; Pender v. Dowse, 265 P.2d 644,
648 (Utah 1954). The burden of proof falls to the moving party on
such motion—the judgment debtor. See Pyper, 2011 UT 45, ¶ 2, 19.
And that burden is quite incompatible with the burden that
Bradburn would have us impose on the judgment creditor.
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ALARM PROTECTION TECHNOLOGY v. BRADBURN
Opinion of the Court
¶26 For these reasons we conclude that there was no
substantive basis for Bradburn’s motion for return of excess
proceeds. The property in question was valued in the manner set
forth in our rules—by the amount paid by the “highest bidder” at
the constable sale. And based on that value, there were no excess
proceeds or unused property to be returned to Bradburn.
¶27 We thus affirm the denial of the motion for return of
excess proceeds on two alternative grounds. We find it not just
procedurally barred but also without merit.
III
¶28 Justice Petersen has authored a thoughtful opinion
concurring in the above analysis while also identifying grounds
for possible amendments to our rules of civil procedure going
forward. I commend the concurrence for its careful consideration
and analysis of an important set of issues. I decline to concur in
the opinion, however, because I prefer to let the rule amendment
process play out in the normal course instead of announcing my
views in advance in a published opinion.
IV
¶29 Bradburn has not established a basis for reversal of the
district court’s decision to deny Bradburn’s motion for return of
excess proceeds. We affirm on that basis.
¶30 In so doing, we note that the briefing on this and the
other related case has highlighted some points in our rules of
procedure that could be framed more clearly, and that might
merit further revision to avoid potential pitfalls going forward.
With this in mind, we anticipate the need to invite our advisory
committee on the civil rules to examine some of the rules at issue
in these cases.
¶31 We also deny APT’s request for an award of its attorney
fees under rule 33(a) of the Utah Rules of Appellate Procedure.
Bradburn’s position fails on its merits. But we see no basis for
concluding that it is either “frivolous” or “for delay.” And we
deny the request for fees on that basis.
10
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JUSTICE PETERSEN, concurring:
¶32 This is one of two companion cases that raise similar legal
issues. See Alarm Prot. Tech. v. Crandall, 2021 UT 26. In both cases, I
concur in the majority opinion. I agree that there was no error in
the district court’s denial of the specific motions at issue here. And
more generally, it seems that our rules of civil procedure do not
prohibit Alarm Protection Technology (APT) from doing what it
did in these cases—executing upon its former sales representatives’
claims against APT and extinguishing those claims before they
could be adjudicated. See Bradburn v. Alarm Prot. Tech., LLC, 2019
UT 33, ¶¶ 13–17, 449 P.3d 20; Crandall, 2021 UT 26, ¶ 25 (“[W]e are
not suggesting that Crandall had a silver bullet available but failed
to fire it.”). But I write separately because Appellants’ arguments,
while not successful in this litigation, have persuaded me that we
should consider whether our rules should permit such a practice.
¶33 In the two related cases involving Appellee APT,
Appellants Ryan Bradburn and Nathan Crandall have a number of
things in common. Both worked as sales representatives for APT.
After leaving their positions, both alleged that APT had failed to
pay them commissions they had earned. They both sued APT in the
district court under Utah’s Sales Representative Commission
Payment Act (Commission Act), UTAH CODE §§ 34-44-101–302. But
neither of them has had their claims adjudicated on the merits
because APT purchased their civil cases and extinguished them.
¶34 APT’s ability to effectively immunize itself from these sales
representatives’ Commission Act claims was the culmination of a
series of steps taken by APT, beginning with how APT paid
advances to the sales representatives. When APT paid the sales
representatives advances against future compensation, it required
the sales representatives to sign both a promissory note and a
confession of judgment. 8 A confession of judgment is a potent tool
for a creditor. It is a written statement, signed and verified by the
debtor, that authorizes the creditor to enter judgment against the
debtor for a specified sum of money. Id. § 78B-5-205; UTAH R. CIV.
P. 58A(i). Under Utah law, a creditor can enter a confession of
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8 The Appellants both assert that they did not receive the
advances that APT claims it paid them. We have not resolved this
dispute because it is not before us.
11
ALARM PROTECTION TECHNOLOGY v. BRADBURN
PETERSEN, J., concurring
judgment in court “without action.”9 UTAH CODE § 78B-5-205. Once
it is signed by the court, the creditor has a judgment against the
debtor for the amount due and can then use certain Utah Rules of
Civil Procedure to collect on the judgment.
¶35 Here, after Bradburn and Crandall sued APT for unpaid
commissions, APT filed in the district court a confession of
judgment against each man, signed by them years earlier when
they were sales representatives. Specifically, Bradburn filed his suit
against APT two years after he stopped selling for them, in March
2017. The same day, APT filed the instant confession of judgment
against Bradburn, specifying that he owed the company $24,000 for
advances it had paid him in 2013. Crandall also filed suit against
APT in 2017, over three years after he stopped selling for them.
Within months, APT filed the instant confession of judgment
specifying that Crandall owed APT $15,000 for advances it paid
him around four years earlier.
¶36 Once APT obtained these judgments against the
Appellants, APT quickly turned to the civil rules to begin collection
efforts. On the day the court signed the judgment against Bradburn,
APT moved for a writ of execution. See UTAH R. CIV. P. 64E(a).
APT’s writ identified Bradburn’s Commission Act claim against
APT as the property it wished to seize. Under rule 64E, the court
granted the writ. Likewise, APT moved for a writ of execution on
Crandall’s Commission Act claim against APT. That writ was also
granted.
¶37 Once a creditor obtains a writ under rule 64E, the civil rules
provide for an officer to seize the property on behalf of the creditor.
Id. 69A. The rules then explain how the property is to be sold at
auction. Id. 69B. Here, APT attended the auction and purchased
Bradburn’s civil case, in which he alleged $348,434 in unpaid
commissions, for a $2,500 credit bid. Through the same process, it
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9 The statute provides that a “judgment by confession may be
entered without action, either for money due or to become due or to
secure any person against contingent liability on behalf of the
defendant, or both, in the manner prescribed by law. The judgment
may be entered in any court having jurisdiction for like amounts.”
UTAH CODE § 78B-5-205.
12
Cite as: 2021 UT 25PETERSEN, J., concurring
purchased Crandall’s civil case, in which he alleged $47,876 in
unpaid commissions, for a $3,500 credit bid.
¶38 Now the owner of the cases against it, APT substituted
itself as the plaintiff in both actions. See id. 25(c). It then moved to
dismiss both cases, which the respective district courts granted,
thereby terminating the Commission Act claims against itself.
¶39 In doing so, APT has not violated any civil rule. In fact, we
have expressly held that our rules of civil procedure permit
judgment creditors to execute upon and extinguish claims against
the creditor. We have held in general that a cause of action
constitutes “property” upon which a judgment creditor may
execute. See Cougar Canyon Loan, LLC v. Cypress Fund, LLC, 2020 UT
28, ¶ 12, 466 P.3d 171; Applied Med. Techs., Inc. v. Eames, 2002 UT 18,
¶ 13, 44 P.3d 699; Snow, Nuffer, Engstrom & Drake v. Tanasse, 1999
UT 49, ¶ 9, 980 P.2d 208. Our reasoning was initially based upon
the language of civil rule 69(f), which stated that a sheriff shall
“execute the writ [of execution] against the non-exempt property of
the judgment debtor by levying on a sufficient amount of property
. . . collecting or selling the choses in action and selling the other
property in the manner set forth herein.” Tanasse, 1999 UT 49, ¶ 9
(first alteration in original) (emphasis added) (citation omitted); see
also Eames, 2002 UT 18, ¶¶ 11–13. We defined a “chose in action” as
“a claim or debt upon which a recovery may be made in a lawsuit.
It is not a present possession, but merely a right to sue; it becomes a
‘possessory thing’ only upon successful completion of a lawsuit.”
Tanasse, 1999 UT 49, ¶ 9 (quoting Chose in Action, BARRON’S LAW
DICTIONARY 71 (3d ed. 1991)). We noted that the term “chose in
action” in rule 69 was used “without restriction of any sort.” Id.
¶ 10 (citation omitted). And we therefore viewed “rule 69 to
encompass all choses in action.” Id.
¶40 Rule 69(f), as relied upon in Tanasse and Eames, no longer
exists. 10 However, we have concluded that “choses in action remain
amenable to execution” under our current rules. Cougar Canyon,
2020 UT 28, ¶ 11 n.7 (citation omitted) (internal quotation marks
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10 Notably, the current language of the corresponding rule of
civil procedure no longer references “choses in action.” See UTAH R.
CIV. P. 69A.
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ALARM PROTECTION TECHNOLOGY v. BRADBURN
PETERSEN, J., concurring
omitted) (concluding that rules 64 and 64E include choses of action
within the “property” subject to a writ of execution). 11
¶41 We have recognized one exception to this general rule. We
have prohibited attorneys and law firms from executing upon
former clients’ malpractice actions against them. Tanasse, 1999 UT
49, ¶ 12 (“[W]e reverse the court of appeals’ determination that the
very law firm against which a malpractice claim is brought may
purchase the cause of action.”). We so held for policy reasons,
noting that “[t]his question is one that this court is particularly
suited to decide, because the public policy concerns at issue closely
touch on our regulatory and supervisory responsibilities over the
practice of law.” Id. We observed that allowing a law firm to
execute upon a malpractice claim against it had two problems: it
effectively denied the plaintiff the right to a trial on his claims, and
the appropriate value of the legal malpractice claim would never be
fairly determined. Id. ¶¶ 13–14. We acknowledged that both
problems “are present in every situation in which a judgment
creditor seeks to execute on an action pending against it.” Id. ¶ 15.
But we expressly did not address this more general question. Id.
¶ 16 n.3.
¶42 We have since declined requests to extend this exception to
other circumstances. See, e.g., Cougar Canyon, 2020 UT 28, ¶¶ 10–21;
Eames, 2002 UT 18, ¶¶ 14, 21. Most relevant here, we have held that
a judgment creditor may execute upon legal claims pending against
the creditor. Eames, 2002 UT 18, ¶ 13. 12 We held that such a practice
did not violate the open courts clause of the Utah Constitution. Id.
¶¶ 15–18. And we concluded that the specific facts of that case did
not present a sufficient public policy basis to justify departing from
our civil rules. Id. ¶ 21.
______________________________________________________________________________
“Choses in action” also are not identified as exempt property
11
under Utah statutory law. UTAH CODE § 78B-5-505.
12 Eames also relied upon former rule 69(f). In that case, we
reasoned that “[g]iven that choses in action are amenable to
execution under rule 69(f), it follows that a defendant can purchase
claims, i.e., choses in action, pending against itself and then move
to dismiss those claims.” Applied Med. Techs., Inc. v. Eames, 2002 UT
18, ¶ 13, 44 P.3d 699.
14
Cite as: 2021 UT 25PETERSEN, J., concurring
¶43 Even so, the facts here and in other cases make it difficult
to deny the collateral damage done to justice. Here, the very entity
that Appellants accuse of injuring them is able to take over their
civil cases and terminate them. It is true that APT has a valid
money judgment against both Appellants. But Appellants allege
that APT owes them money as well, and they will never receive a
fair accounting on the merits.
¶44 Moreover, the statutory scheme enacted by the legislature
in the Sales Representative Commission Payment Act is completely
thwarted. The Commission Act has specific provisions to ensure
that companies (referred to as “principals” in the statute) abide by
its terms: It voids any attempt of a principal to require sales
representatives to waive their rights under the Act or agree to be
bound by the laws of another state, and it provides for triple
damages if the principal fails to pay the sales representative earned
commissions. UTAH CODE §§ 34-44-104, -301(2). Most importantly, it
expressly contemplates situations like the one here, where a sales
representative alleges that the principal failed to pay earned
commissions, and the principal alleges that the sales representative
owes the principal money. Id. § 34-44-301(1). In calculating
damages under the Commission Act, the sum of unpaid
commissions owed to the sales representative is offset by any
money the sales representative owes the principal. Id. § 34-44-
301(2)(a)(ii). The remaining amount, plus attorney fees and court
costs, is then tripled and due to the sales representative. Id. § 34-44-
301(2). Yet rule 64E of the Utah Rules of Civil Procedure, along
with APT’s use of judgments of confession to pay its sales
representatives, has allowed APT to avoid these clear provisions of
the Commission Act.
¶45 A federal appellate case provides another example of the
damage that can be done to the legal process when judgment
creditors execute upon and terminate claims in which they are
defendants. In RMA Ventures California v. SunAmerica Life Ins. Co.,
576 F.3d 1070 (10th Cir. 2009), the defendants prevailed on
summary judgment in the district court. Id. at 1071. The plaintiff
appealed. Id. at 1072. Meanwhile, the district court granted the
defendants’ motion for attorney fees and entered a corresponding
judgment for the defendants of over $87,000. Id. The defendants
obtained a writ of execution to enforce the judgment. Id. Following
Utah state procedure, the defendants (through the Salt Lake City
Deputy Constable) noticed for sale the plaintiff’s right to its
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ALARM PROTECTION TECHNOLOGY v. BRADBURN
PETERSEN, J., concurring
pending claims against the defendants, including the plaintiff’s
right to appeal. Id. The defendants purchased the cause of action,
and then argued in the Tenth Circuit that the plaintiff no longer
had standing because they now owned the plaintiff’s claims. Id. at
1072–73. The Tenth Circuit acceded to this argument, but not
without remarking that “the circumstances of this case present a
degree of discomfort.” Id. at 1075. Judge Lucero described the
problem a bit more forcefully in a separate concurring opinion:
It is with considerable understatement that the
majority acknowledges the “degree of discomfort”
presented by this case. . . . By executing on a
subsidiary judgment, SunAmerica has extinguished
RMA’s right to appeal the very merits determination
that served as the predicate for the subsidiary
judgment in the first place. If we were to reach the
merits and reverse the district court’s decision,
however, there is little doubt that RMA would be
entitled to relief from the subsidiary attorneys’ fee
judgment. . . . RMA will not have the opportunity to
pursue its merits appeal . . . . As a matter of public
policy, I doubt the wisdom of a rule that readily
places the right to appeal on an auction block. More
troublesome still is a rule permitting a defendant to
purchase its opponent’s appellate rights, thereby
extinguishing a plaintiff’s claim. “[A defendant]
obviously has no intention to litigate a claim against
itself.” Today’s decision thus incentivizes Utah
defendants to attempt an end run around merits
determinations by purchasing a plaintiff’s right to
appeal. This incentive is at its zenith when it is most
offensive—in those cases in which a defendant
believes it would likely lose the merits appeal.
Id. at 1076–77 (Lucero, J., concurring) (fourth alteration in original)
(quoting Tanasse, 1999 UT 49, ¶ 13).
¶46 Clearly, permitting judgment creditors to execute upon
claims in which they are defendants can result in severe collateral
damage to the legal process and the presumption that claims
should be fairly adjudicated on the merits. Our rules currently
permit this. But we should consider whether our rules should
permit such a practice. Judgment creditors like APT have the legal
right to a sum of money. We have civil rules to assist them in
16
Cite as: 2021 UT 25PETERSEN, J., concurring
collecting that money. But the right to collect a sum certain does not
include the right to immunity from suit or dismissal of an
otherwise valid legal claim against the creditor. We should consider
whether our civil rules could be modified to address this situation
in a way that still assists creditors in collecting on judgments, but
better protects the legal process from unnecessary harm. I am not
pre-judging what the solution might be. I propose only that we
refer this issue to our civil rules committee for study and
consideration.
17