Fisher v. Davidhizar , 2021 UT App 38 ( 2021 )

2021 UT App 38THE UTAH COURT OF APPEALS
DARWIN C. FISHER, CHERYL FISHER, DAVID FISHER,
AND OFFICE MANAGEMENT CONSULTANTS LC,
Appellants,
v.
LAVERN DAVIDHIZAR,
Appellee.
Opinion
No. 20190769-CA
Filed April 1, 2021
Fifth District Court, St. George Department
The Honorable Wallace A. Lee
No. 020500856
Emily Adams, Freyja Johnson, and Cherise Bacalski,
Attorneys for Appellants
Duane L. Ostler, Attorney for Appellee
JUDGE DIANA HAGEN authored this Opinion, in which JUDGES
MICHELE M. CHRISTIANSEN FORSTER and DAVID N. MORTENSEN
concurred.
HAGEN, Judge:
¶1 This is the third appeal arising from a 2001 business
dispute. In an attempt to resolve that dispute, David Fisher
(David) and Lavern Davidhizar (Lavern) entered into a
settlement agreement. 1 When Lavern later disavowed the
agreement, David sued him for breach of contract. In response,
Lavern alleged, both as an affirmative defense to the contract
1. Because this case involves multiple parties with similar names,
we refer to David Fisher as “David” and Lavern Davidhizar as
“Lavern,” intending no disrespect by the apparent informality.
Fisher v. Davidhizar
claim and as a counterclaim for damages against David, that
David had fraudulently induced him to enter the settlement
agreement. The district court initially granted summary
judgment in favor of David on his breach of contract claim,
awarded damages, and dismissed Lavern’s counterclaims.
Lavern appealed, and in Fisher v. Davidhizar (Fisher I), 2011 UT
App 270, 263 P.3d 440, this court reversed and remanded for trial
on Lavern’s fraudulent inducement claim.
¶2 In the meantime, David had declared bankruptcy and his
parents, Darwin and Cheryl Fisher (the Fishers), had purchased
his claims from the bankruptcy estate. At trial, a jury found that
David had fraudulently induced Lavern to enter the settlement
agreement, and it awarded damages to Lavern. Reasoning that
by purchasing David’s claims the Fishers had also assumed
liability for the counterclaim, the district court entered judgment
against the Fishers for the damages awarded on Lavern’s
counterclaim, together with attorney fees. David was not named
as a judgment debtor. This time the Fishers appealed, and in
Fisher v. Davidhizar (Fisher II), 2018 UT App 153, 436 P.3d 123,
this court reversed, holding that the Fishers did not assume
liability for Lavern’s counterclaim. We vacated the fraud
damages award against the Fishers and remanded to the district
court to determine whether Lavern was still entitled to an
attorney fees award against the Fishers as the prevailing party.
David was not a party to Fisher II.
¶3 On remand, the district court ruled that Lavern was still
the prevailing party as to the Fishers. The court entered an
amended judgment that not only assessed attorney fees against
the Fishers but also added David as a judgment debtor on the
counterclaim. The Fishers and David now appeal the amended
judgment. We conclude that the authority cited by the district
court did not allow it to add David to the judgment on remand.
However, the district court correctly ruled that Lavern was the
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prevailing party as to the Fishers. Accordingly, we reverse in
part and affirm in part.
BACKGROUND
¶4 David and his business partner owned and operated
Office Management Consultants LC (OMC), which leased tables
to medical providers for use in treating disc decompression. In
2001, Lavern contributed $100,000 to help OMC finance two
tables, but a dispute arose over whether Lavern had a
partnership interest in the tables. Through David, OMC and
Lavern entered into a settlement agreement to resolve the
dispute. The settlement agreement “transferred ownership of
OMC, the tables, and some of OMC’s assets to [Lavern] in return
for [Lavern] assuming OMC’s debt and certain other financial
obligations.” Fisher I, 2011 UT App 270, ¶ 2, 263 P.3d 440.
¶5 Shortly thereafter, Lavern terminated the settlement
agreement, and David sued him for breach of contract. Lavern
did not dispute that he had breached the settlement agreement
but asserted as an affirmative defense that his breach was
justified by David’s fraudulent behavior. Specifically, he claimed
that David had induced him to enter into the settlement
agreement by making misrepresentations about the amount of
income generated by the tables under contract and the status of
those client accounts. In addition to raising fraudulent
inducement as an affirmative defense, Lavern brought
counterclaims against David, seeking damages for fraud,
fraudulent inducement, and negligent misrepresentation
(collectively, Lavern’s fraud claims).
¶6 David filed a motion for summary judgment on his
breach of contract claim, which the district court granted,
reserving the issue of damages for a bench trial. The court also
dismissed Lavern’s fraud claims for failure to plead them with
particularity. At the bench trial, the court awarded over $800,000
20190769-CA 3 2021 UT App 38Fisher v. Davidhizar
in damages to David on his breach of contract claim. Lavern
appealed. We reversed the district court’s dismissal of Lavern’s
fraud claims and vacated its judgment and damages award. See
id. ¶ 12.
¶7 Before the district court set the matter for trial on remand,
David filed for bankruptcy. The Fishers purchased “David’s
interest in any proceeds from the lawsuit” from the bankruptcy
estate. The Fishers were then substituted as plaintiffs in this case,
leaving David as the only named counter-defendant. Lavern
filed a motion to clarify the Fishers’ liability; the district court
ruled that the Fishers’ “agreement conveyed David’s entire legal
share in the present case,” which included David’s “liabilities
and risks.”
¶8 The case proceeded to trial on Lavern’s fraud claims. The
jury was instructed that the court had already determined
Lavern had breached the settlement agreement and the amount
of damages incurred. The court asked the jury to determine
whether Lavern had been induced to enter into the settlement
agreement by fraud, fraudulent inducement, or negligent
misrepresentation. The jury found by clear and convincing
evidence that David “committed fraud on Lavern,” that Lavern
was entitled to economic damages in the amount of $78,600, and
that “Lavern should be excused from any contract damages on
the basis of [f]raudulent [i]nducement” as well as “negligent
misrepresentation.”
¶9 Following the jury verdict, the court entered a judgment,
which stated in relevant part:
1. The [settlement agreement] is rescinded/void.
2. [Lavern] is excused from any damages on
Plaintiff’s contract claims, and therefore
Plaintiff’s claims against [Lavern] are dismissed
with prejudice as a matter of law.
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3. Judgment is entered in favor of Lavern
Davidhizar jointly and severally against [the
Fishers], and [OMC] in the amount of $78,600
on [Lavern’s] counterclaim for fraud, together
with reasonable attorney fees [and costs].
4. This Judgment represents the final judgment in
this case.
¶10 The Fishers appealed, contending that the district court
erred in holding them liable on Lavern’s counterclaim. David
was not a party to Fisher II, and Lavern did not cross-appeal. We
reversed, concluding that the Fishers did not assume liability for
the counterclaim when they purchased David’s claims from the
bankruptcy estate. See Fisher II, 2018 UT App 153, ¶ 18, 436 P.3d
123. We then remanded to the district court “for the limited
purpose of determining if either party is entitled to attorney fees
as the prevailing party.” Id. ¶ 22.
¶11 On remand from Fisher II, the district court found Lavern
was the prevailing party as to the Fishers. The court found that
“on the breach of contract claim and damages, there was a
draw.” But the court declined to “isolate only [Lavern and the
Fishers] to determine the prevailing party” and instead
proceeded to “consider the case in its entirety,” including
Lavern’s counterclaim against David. After considering the net
judgment rule, various “common sense factors,” and which
party obtained a “comparative victory,” the district court ruled
that Lavern was the prevailing party and awarded attorney fees
against the Fishers.
¶12 The district court entered an amended judgment, which
reflected the attorney fee award. 2 But the amended judgment
2. The district court entered an amended judgment and a second
amended judgment on the same day. Because the two judgments
(continued…)
20190769-CA 5 2021 UT App 38Fisher v. Davidhizar
also added David as a judgment debtor on the fraud
counterclaim, even though no motion had been filed seeking
such relief. The amended judgment stated that it was entered (1)
pursuant to rule 54(e) of the Utah Rules of Civil Procedure; (2) as
a result of the decision in Fisher II, which “modified . . . the prior
judgment, to remove liability of [the Fishers] for the . . .
counterclaim”; and (3) to “correct[] a clerical error,” presumably
under rule 60(a) of the Utah Rules of Civil Procedure, whereby
David was “inadvertently” not named in the original judgment.
¶13 David moved to set aside the judgment against him,
arguing that the court had impermissibly entered the amended
judgment before the seven-day objection period had passed and
that neither rule 54(e) nor rule 60(a) gave the court authority to
amend the judgment to add him as a judgment debtor. The court
denied that motion, referencing rule 61 of the Utah Rules of Civil
Procedure and concluding that any error was harmless.
ISSUES AND STANDARDS OF REVIEW
¶14 David and the Fishers appeal, challenging the district
court’s denial of David’s motion to set aside the amended
judgment, the court’s ruling that Lavern was the prevailing
party as to the Fishers, and the sufficiency of the evidence
supporting the damages awarded on Lavern’s counterclaim.
¶15 We first address whether the authority invoked by the
district court on remand allowed it to add David as a judgment
debtor. “We review the district court’s determination on
jurisdictional issues for correctness, giving no deference to the
(…continued)
bear no material difference, we refer to them as a single
amended judgment.
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district court’s decision.” Mardanlou v. Ghaffarian, 2015 UT App
128, ¶ 15, 351 P.3d 114.
¶16 Next, we address the district court’s ruling that Lavern
was the prevailing party as to the Fishers. We review a district
court’s determination of which party prevailed “under an abuse
of discretion standard.” See Olsen v. Lund, 2010 UT App 353, ¶ 5,
246 P.3d 521 (cleaned up).
¶17 Because we vacate the judgment against David and do
not consider the counterclaim as part of the prevailing party
analysis, we need not reach the sufficiency argument to resolve
this appeal.
ANALYSIS
I. Authority to Amend the Judgment
¶18 David contends that the district court lacked authority to
add him to the judgment. Because the authority invoked by the
court did not allow such an amendment, we vacate the amended
judgment as to David.
¶19 “The initial inquiry of any court should always be to
determine whether the requested action is within its
jurisdiction.” Robertson v. Stevens, 2020 UT App 29, ¶ 5, 461 P.3d
323 (cleaned up). Until “a final judgment is entered, district
courts have broad discretion to reconsider and modify
interlocutory rulings.” Little Cottonwood Tanner Ditch Co. v. Sandy
City, 2016 UT 45, ¶ 17, 387 P.3d 978. “But after a judgment is
entered, the district court’s power to modify the judgment is
limited.” Id.
¶20 Those limits on judicial authority are treated as
“jurisdictional.” State v. Boyden, 2019 UT 11, ¶¶ 39–41, 441 P.3d
737. In this context, the term “jurisdiction” is used to refer not
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“to constitutional limits on judicial authority,” but “to the
principles, developed via rule-making procedures or embedded
in our case law, through which we regulate the proceedings that
take place in our courts.” Id. ¶ 40. Because that jurisdictional
principle is not of constitutional origin, “it is subject to overrides
or exceptions set forth in our case law and in our rules of
procedure.” Id. ¶ 41 (cleaned up). Those exceptions include the
district court’s authority to hear motions validly brought under
rules 54 and 60 of the Utah Rules of Civil Procedure. See,
generally Kell v. State, 2012 UT 25, ¶ 21, 285 P.3d 1133; Boyden,
2019 UT 11, ¶¶ 38–42; Dairy Distrib., Inc. v. Local Union 976, 396
P.2d 47, 48 (Utah 1964). But unless the court has been granted
such jurisdictional authority, the district court cannot amend a
final judgment to “repair its own lapses and omissions to do
what it could legally and properly have done” in the first
instance. See Mardanlou v. Ghaffarian, 2015 UT App 128, ¶ 16, 351
P.3d 114 (cleaned up).
¶21 In entering the amended judgment, the district court
appeared to rely on three potential sources of judicial authority.
First, the court expressly cited rule 54(e) of the Utah Rules of
Civil Procedure, which allows the court to enter an amended
judgment to include costs and attorney fees. Second, the court
appeared to invoke rule 60(a) by stating that the amended
judgment “corrects a clerical error from the original judgment,
inasmuch as David Fisher as a counterclaim defendant was
inadvertently not named in that judgment.” Finally, the court
referred to the opinion in Fisher II, stating that the amended
judgment reflects that Fisher II “modified a . . . portion of the
prior judgment to remove liability of [the Fishers] for the
$78,600.00 fraud to Lavern under his counterclaim.” None of
these justifications gave the court authority to amend the final
judgment to add David as a judgment debtor.
¶22 First, rule 54(e) does not allow the court to add David as a
judgment debtor. That rule states:
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If the court awards costs under paragraph (d) or
attorney fees under Rule 73 after the judgment is
entered, the prevailing party must file and serve an
amended judgment including the costs or attorney
fees. The court will enter the amended judgment
unless another party objects within 7 days after the
amended judgment is filed.
Utah R. Civ. P. 54(e). The plain language of rule 54(e) does not
allow for changes to the judgment beyond the addition of costs
and attorney fees. On appeal, Lavern does not argue otherwise.
¶23 Second, the parties agree that omitting David from the
original judgment was not the result of “a clerical mistake or a
mistake arising from oversight or omission” as required to
invoke rule 60(a). “A clerical error is one made in recording a
judgment that results in the entry of a judgment which does not
conform to the actual intention of the court.” Thomas A. Paulsen
Co. v. Industrial Comm'n, 770 P.2d 125, 130 (Utah 1989). “On the
other hand, a judicial error is one made in rendering the
judgment and results in a substantively incorrect judgment.” Id.Here, the district court entered judgment against the Fishers on
Lavern’s counterclaim, but not against David, because it had
previously ruled that the Fishers had acquired “David’s entire
legal share in the present case,” which included David’s
“liabilities and risks.” Thus, the court ruled that the Fishers were
“subject to all valid defenses and counterclaims that could have
been asserted against David.” Omitting David from the
judgment was not a clerical error; it was the court’s intention.
Thus, rule 60(a) does not apply.
¶24 Finally, our limited remand in Fisher II did not permit the
court to modify the final judgment to add David as a judgment
debtor. Utah courts have “long recognized [the] branch of the
law of the case doctrine known as the mandate rule.” Utah Dep't
of Transp. v. Ivers, 2009 UT 56, ¶ 12, 218 P.3d 583. “The mandate
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rule binds both the district court and the parties to honor the
mandate of the appellate court.” Id. (cleaned up). In Fisher II, we
remanded the case to the district court “for the limited purpose
of determining if either party is entitled to attorney fees as the
prevailing party.” 2018 UT App 153, ¶ 22, 436 P.3d 123. The
mandate did not direct the court to take any action with respect
to David, as he was not a party to the Fisher II appeal. And,
although rule 60(b)(5) of the Utah Rules of Civil Procedure
allows a court to “relieve a party or its legal representative from
a judgment” when “a prior judgment upon which it is based has
been reversed or vacated,” it does not allow the court to award
additional affirmative relief. See, e.g., Fireside Bank v. Askins, 460
P.3d 157, 162 (Wash. 2020) (“Rule 60(b) is available only to set
aside a prior judgment or order; courts may not use Rule 60(b) to
grant affirmative relief in addition to the relief contained in the
prior order or judgment.” (cleaned up)); State ex rel. City of
Marion v. Alber, 2018 ND 267, ¶ 4, 920 N.W.2d 739 (“Rule 60(b)(6)
does not grant the district court power to impose further
affirmative relief in addition to that already contained in the
prior judgment, but only to set aside a prior judgment.” (cleaned
up)).
¶25 On appeal, Lavern does not advance any of the above
justifications. Instead, he asserts that the district court had
authority to add David as a judgment debtor under rule 54(b),
which provides:
[A]ny order or other decision, however designated,
that adjudicates fewer than all the claims or the
rights and liabilities of fewer than all the parties
does not end the action as to any of the claims or
parties, and may be changed at any time before the
entry of judgment adjudicating all the claims and
the rights and liabilities of all the parties.
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Utah R. Civ. P. 54(b). Lavern does not explain how this rule
applies, but seems to suggest that because the district court had
not previously entered a final judgment, it was at liberty to enter
an amended judgment at any time. See Mardanlou v. Ghaffarian,
2015 UT App 128, ¶ 16, 351 P.3d 114 (“A district court is free to
reassess its decision at any point prior to entry of a final order or
judgment.” (cleaned up)). This argument runs headlong into the
law of the case doctrine.
¶26 In Fisher II, neither party challenged this court’s
jurisdiction to entertain the appeal. “As a general rule, an
appellate court does not have jurisdiction to consider an appeal
unless the appeal is taken from a final order or judgment that
ends the controversy between the litigants.” See Copper Hills
Custom Homes, LLC v. Countrywide Bank, FSB, 2018 UT 56, ¶ 10,
428 P.3d 1133 (cleaned up). One exception to the final judgment
rule is an appeal brought under rule 54(b). Id. ¶ 15. To invoke
this exception, the district court must enter a proper rule 54(b)
certification order. Id. ¶ 16. No such certification was entered in
Fisher II. Instead, both parties treated the judgment at issue as a
final judgment that adjudicated all claims and the rights and
liabilities of all parties. See Utah R. Civ. P. 54(a). Indeed, the
judgment itself indicated that it “represent[ed] the final
judgment in this case.” Further, “in assuming jurisdiction and
reviewing the judgment appealed from, and in deciding the
questions of law presented on the merits, we necessarily held
and adjudicated that the judgment so appealed from was final
and appealable.” See Grand Central Mining Co. v. Mammoth
Mining Co., 104 P. 573, 576 (Utah 1909). That “adjudication
became the law of the case, from which neither we nor the
litigants can depart on a second appeal, or on any subsequent
proceedings had in the case.” Id. As a result, adding David to the
amended judgment cannot be justified by the legal fiction that
Fisher II was not an appeal from a final judgment.
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¶27 Alternatively, Lavern contends that the district court had
authority to enter the amended judgment under rule 61, which
directs the court to “disregard any error or defect in the
proceeding which does not affect the substantial rights of the
parties.” Utah R. Civ. P. 61. The court cited rule 61 as the basis
for denying David’s motion to set aside the amended judgment,
reasoning that the amended judgment “does not affect the
substantial rights of the parties because those rights have already
been adjudicated and determined.” But that ruling skipped over
a key step in the analysis. The court addressed whether there
were grounds for relieving David from the amended judgment
under rule 60(b) when it should have addressed whether it had
authority to enter the amended judgment in the first place.
Nothing in the language of rule 61 or in our case law suggests
that rule 61 can be used as a vehicle to amend a judgment to
grant new affirmative relief. Once it entered a final judgment,
the court could not “repair its own lapses” without properly
invoking jurisdictional authority to do so. See Mardanlou, 2015
UT App 128, ¶ 16 (cleaned up).
¶28 Because the district court invoked no authority that
would allow it to alter a final judgment to add a new judgment
debtor, we vacate the amended judgment as to David.
II. Attorney Fees
¶29 The Fishers challenge the district court’s ruling that, as
between Lavern and the Fishers, Lavern was the prevailing
party. In particular, the Fishers contend that the court should not
have considered Lavern’s victory over David as part of the
prevailing party analysis. If the counterclaim is excluded from
the analysis, the Fishers argue that “the case is a draw” because
“the Fishers had no liability for the [fraud] claim, just as Lavern
had no liability on the breach of contract claim.” In other words,
they both “successfully defended against the others’ [claims] but
were unsuccessful in recovering any monetary damages against
20190769-CA 12 2021 UT App 38Fisher v. Davidhizar
the other.” We agree with the Fishers in principle that the district
court should not have considered Lavern’s counterclaim against
David in determining whether Lavern was the prevailing party
vis-à-vis the Fishers, but we nonetheless affirm the district
court’s ruling.
¶30 Cases where attorney fees may be awarded to the
prevailing party based on a contractual provision fall into two
categories—those where deciding the prevailing party is
“simple” and those where a “simple analysis cannot be
employed.” See Mountain States Broad. Co. v. Neale, 783 P.2d 551,
555–56 (Utah Ct. App. 1989). Our case law typically concerns the
latter, “where opposing parties obtain mixed results.” Neff v.
Neff, 2011 UT 6, ¶ 63, 247 P.3d 380; see generally A.K. & R. Whipple
Plumbing & Heating v. Guy, 2004 UT 47, 94 P.3d 270; R.T. Nielson
Co. v. Cook, 2002 UT 11, 40 P.3d 1119; Express Recovery Services
Inc. v. Olson, 2017 UT App 71, 397 P.3d 792; Olsen v. Lund, 2010
UT App 353, 246 P.3d 521; Neale, 783 at 555–56. In such cases,
Utah courts apply a “common sense flexible and reasoned
approach” to determine which party, if any, is the prevailing
party. See A.K. & R. Whipple Plumbing & Heating, 2004 UT 47, ¶ 14
(cleaned up). Under that approach, the court not only considers
which party obtained the net judgment, but also applies several
“common sense factors.” Id. ¶¶ 26–28; see also R.T. Nielson, 2002
UT 11, ¶ 25 (enumerating relevant factors). The focus is on
“which party had attained a comparative victory, considering
what a total victory would have meant for each party and what a
true draw would look like.” Lund, 2010 UT App 353, ¶ 8 (cleaned
up).
¶31 In other cases, “determining the prevailing party for
purposes of awarding fees can oftentimes be quite simple.” R.T.
Nielson, 2002 UT 11, ¶ 23 (cleaned up). For instance, when “a
plaintiff sues for money damages, and plaintiff wins, plaintiff is
the prevailing party; if defendant successfully defends and
avoids adverse judgment, defendant has prevailed.” Id. We
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sometimes refer to such cases as shutouts. See Express Recovery,
2017 UT App 71, ¶ 10. When one party obtains a shutout, there is
no need to assess which party obtained a “comparative victory.”
Id.
¶32 Here, the district court engaged in the multi-factored,
common-sense analysis and concluded that Lavern obtained the
“comparative victory.” In so doing, the court considered
Lavern’s successful counterclaim against David and the damages
the jury awarded on that counterclaim.
¶33 But Lavern sought attorney fees against the Fishers, not
against David. 3 The Fishers were parties only to the breach of
contract claim, which Lavern successfully defended in its
entirety. After the jury found that Lavern had been fraudulently
induced to enter into the settlement agreement, the court entered
judgment reflecting that the contract was “rescinded/void,” that
Lavern was “excused of any damages on [the Fishers’] contract
claims,” and that the Fishers’ “claims against [Lavern were]
dismissed with prejudice.”
¶34 When determining that the breach of contract claim was
“a draw,” the district court appeared to rely on its summary
judgment ruling that Lavern had breached the contract and was
liable for damages. But that victory was temporary. In Fisher I,
this court vacated the judgment and remanded for trial on
Lavern’s affirmative defense and counterclaims. 2011 UT App
3. The Fishers have not argued that the district court erred in
failing to apportion the attorney fees award between the Fishers
and David. As a practical matter, it may have been impossible to
segregate the attorney fees expended in defending against the
Fishers’ claims and those expended in proving David’s liability
because the fraudulent inducement defense and the fraud
counterclaims were inextricably intertwined.
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270, 263 P.3d 440. An affirmative defense, if proved, “will defeat
the plaintiff’s claim.” 5 Charles Alan Wright & Arthur R. Miller,
Federal Practice & Procedure Civ. § 1270 (3d ed. 2020). At trial,
Lavern prevailed on his fraudulent inducement defense and
defeated the Fishers’ contract claim.
¶35 As to the Fishers, this was a simple case in which they
sued for money damages on a single claim for breach of contract,
and Lavern successfully defended that claim and avoided an
adverse judgment. See R.T. Nielson, 2002 UT 11, ¶ 23. Under
these circumstances, the breach of contract claim between the
Fishers and Lavern was not “a draw.” To the contrary, Lavern
achieved a shutout on the only claim relevant to whether he
prevailed against the Fishers. And, on that basis, we affirm the
court’s ruling that Lavern was the prevailing party vis-à-vis the
Fishers.
CONCLUSION
¶36 The district court did not rely on any valid authority to
add David as a judgment debtor on remand. Consequently, we
vacate the amended judgment as to David. But the court
correctly concluded that Lavern was the prevailing party as to
the Fishers and we affirm the court’s attorney fees award.
¶37 We reverse in part, vacating the amended judgment
against David, and affirm in part, upholding Lavern’s award of
attorney fees against the Fishers.
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