Bishop v. Inwest Title Services, Inc. , 766 Utah Adv. Rep. 5 ( 2014 )

2014 UT App 189_________________________________________________________
THE UTAH COURT OF APPEALS
SCOTT R. BISHOP,
Plaintiff and Appellant,
v.
INWEST TITLE SERVICES, INC.; WILSHIRE CREDIT CORPORATION;
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; BANK OF
AMERICA, N.A.; BAC HOME LOANS SERVICING, LP; DAVID B.
BOYCE, PLLC; AND DAVID B. BOYCE,
Defendants and Appellees.
Amended Memorandum Decision1
No. 20130734-CA
Filed August 7, 2014
Fourth District Court, Provo Department
The Honorable Lynn W. Davis
No. 120401379
Scott R. Bishop, Appellant Pro Se
Bruce A. Maak, Attorney for Appellee Inwest Title
Services, Inc.
Leslie Van Frank and Edward T. Vasquez,
Attorneys for Appellees Wilshire Credit
Corporation; Mortgage Electronic Registration
Systems, Inc.; Bank of America, N.A.; and BAC
Home Loans Servicing, LP
1. This Amended Memorandum Decision replaces the
Memorandum Decision issued June 12, 2014, Bishop v. Inwest Title
Services, 2014 UT App 134. The amended decision omits the original
footnote 8 and makes attendant changes to paragraph 14 of the text
to address an issue raised in both a petition for rehearing and an
unopposed motion to delete the footnote.
Bishop v. Inwest Title Services
David B. Boyce, Appellee Pro Se and Attorney for
Appellee David B. Boyce, PLLC
JUDGE JOHN A. PEARCE authored this Memorandum Decision, in
which SENIOR JUDGES RUSSELL W. BENCH and PAMELA T.
GREENWOOD concurred.2
PEARCE, Judge:
¶1 Scott R. Bishop appeals from the district court’s entry of
summary judgment in favor of Inwest Title Services, Inc. (Inwest)
and the court’s dismissal of his claims against Wilshire Credit
Corporation; Mortgage Electronic Registration Systems, Inc.; Bank
of America, N.A.; and BAC Home Loans Servicing, LP (collectively,
BANA) and David B. Boyce, PLLC and David B. Boyce
(collectively, Boyce). We affirm and remand this matter for an
attorney fees determination consistent with the terms of this
memorandum decision.
¶2 Bishop’s claims against Inwest, BANA, and Boyce all relate
to Bishop’s ownership interest in a residential property (the House)
that was originally owned solely by Bishop’s wife, Kellene Bishop.3
In March 2006, Kellene applied for a $250,000 loan against the
House, which had been appraised at $250,000. The loan was set to
close on March 17 at Inwest’s offices, at which time Kellene was to
sign a trust deed (the Trust Deed) to secure the loan. On March 16,
Bishop and Kellene delivered a warranty deed (the Warranty
Deed) to Inwest transferring the House from Kellene to “Kellene E.
Bishop and Scott R. Bishop, husband and wife.” Bishop allegedly
2. The Honorable Pamela T. Greenwood and Russell W. Bench,
Senior Judges, sat by special assignment as authorized by law. See
generally Utah Code Jud. Admin. R. 11-201(6).
3. We refer to Kellene Bishop by her first name throughout this
memorandum decision for purposes of clarity and ease of
reference.
20130734-CA 2 2014 UT App 189Bishop v. Inwest Title Services
instructed Inwest to promptly record the Warranty Deed and
believed that Inwest would do so prior to recording the Trust Deed
that was to be executed the next day.
¶3 On March 17, Bishop and Kellene returned to Inwest’s
offices, and Kellene executed the Trust Deed and the note that it
secured. Neither Bishop nor Kellene informed the lender or anyone
present at the closing about the prior day’s delivery of the
Warranty Deed. Inwest recorded both deeds on March 22, but
recorded the Trust Deed before the Warranty Deed, giving the
Trust Deed priority over Bishop’s interest in the House under the
Warranty Deed. Inwest then mailed Bishop a copy of the Warranty
Deed, which showed the six-day gap between its execution and its
recording.
¶4 In April 2009, Boyce—as successor trustee under the Trust
Deed—recorded a notice of default and election to sell pursuant to
Kellene’s note and the Trust Deed. In December 2009, Bishop and
Kellene filed for Chapter 7 bankruptcy. Bishop and Kellene listed
the House and the note on their bankruptcy schedules, but Bishop
did not suggest or claim that his 50% ownership in the House was
unencumbered by the note.4 Nor did Bishop identify any claims
against Inwest arising from its recording of the Trust Deed before
the Warranty Deed. The bankruptcy court discharged Bishop in
March 2010, and by March 2011, the bankruptcy trustee had
certified that the bankruptcy estate was fully administered and
closed the case.
¶5 On July 11, 2011, Boyce served Bishop with a notice of
trustee sale on behalf of BANA, which was servicing Kellene’s note.
On July 26, Bishop and Kellene filed an action in Utah state court,
which was soon removed to federal court. The federal action
4. The bankruptcy filing stated that the House was jointly owned
by Bishop and Kellene and had a secured claim associated with it.
The filing also stated that the debt secured by the Trust Deed and
note was Kellene’s obligation.
20130734-CA 3 2014 UT App 189Bishop v. Inwest Title Services
challenged BANA and Boyce’s authority to foreclose on the Trust
Deed and included a quiet title claim seeking to establish title to the
House in Bishop and Kellene. The federal action was dismissed on
May 1, 2012. An appeal by Bishop and Kellene was dismissed as
untimely filed.
¶6 In August 2012, after receiving an amended notice of sale
from Boyce, Bishop filed the current action in the district court.
Bishop brought claims including fraud and slander of title against
Inwest, BANA, and Boyce. The gravamen of all of Bishop’s claims
was that these defendants or their predecessors in interest had
acted either to cause the Warranty Deed to be recorded after the
Trust Deed or to take advantage of that timing, thus depriving
Bishop of his superior 50% interest in the House. Bishop’s
complaint also asserted a quiet title claim seeking to establish his
continuing 50% interest in the House.5
¶7 The district court granted summary judgment in favor of
Inwest because the court concluded that Bishop failed to properly
disclose his alleged claims against Inwest as assets in his
bankruptcy proceeding and that the claims therefore remained the
property of the bankruptcy trustee and estate.6 Bishop challenges
the district court’s ruling, arguing that his claims against Inwest did
not accrue until the July 2011 notice of trustee sale and thus he
could not have disclosed the claims in his December 2009
bankruptcy filing. See Cusano v. Klein, 264 F.3d 936, 947 (9th Cir.
2001) (“[G]enerally, a debtor has no duty to schedule a cause of
action that did not accrue prior to bankruptcy.”).
5. Boyce’s trustee sale of the House occurred on September 30,
2013.
6. The district court also determined that Bishop’s claims against
Inwest are barred by judicial estoppel, but because we affirm on
other grounds, we need not address that basis for the summary
judgment order.
20130734-CA 4 2014 UT App 189Bishop v. Inwest Title Services
¶8 Bishop argues, without citation to authority, that his claims
against Inwest could not have accrued until the initial notice of
trustee sale because he “did not and could not discover the facts
constituting [Inwest’s] fraud until receipt of the [notice].” However,
the district court made a specific finding that Bishop knew or
should have known of the basis for his claims against Inwest at the
time the deeds to the House were recorded in March 2006:
Upon closing, both [Bishop] and Kellene knew or
should have known that the Warranty Deed was
recorded after the Trust Deed. It would be palpably
irrational to assume that [the lender] would have
closed its loan and accepted a Trust Deed on only an
undivided half interest in the House (which was
worth $250,000) to secure a $250,000 loan,
particularly given that Kellene promised [the lender]
that its Trust Deed would encumber the entire
House.
Bishop fails to challenge this determination that he knew or should
have known about his claims against Inwest in March 2006.7 We
7. Bishop asserts that the district court’s finding improperly
resolved a disputed question of material fact. However, in the
context of its summary judgment ruling, the district court’s
determination that Bishop had, at the least, constructive knowledge
of his claims against Inwest in March 2006 is more accurately
characterized as a legal ruling based on the undisputed facts
surrounding the execution and recording of the Warranty Deed
and the Trust Deed. See Pioneer Builders Co. of Nev. v. K D A Corp.,
2012 UT 74, ¶ 21, 292 P.3d 672 (implying that summary judgment
is appropriate where “the undisputed facts . . . establish that [a
party] had constructive notice”). Bishop does not argue that the
district court’s constructive knowledge determination is not correct
as a matter of law. Nor does he point to any record evidence that
would have created a genuine issue of material fact on the question
(continued...)
20130734-CA 5 2014 UT App 189Bishop v. Inwest Title Services
will thus not disturb the district court’s summary judgment ruling
on that ground. As Bishop raises no other argument that the
district court’s order was improper, we affirm the entry of
summary judgment in favor of Inwest.8
¶9 As to the dismissal of Bishop’s claims against BANA and
Boyce, we agree with the district court that those claims are barred
by principles of res judicata—specifically, the doctrine of claim
preclusion—because the claims could and should have been raised
in Bishop’s prior federal action against BANA and Boyce. “Claim
preclusion corresponds to causes of action” and “is premised on
the principle that a controversy should be adjudicated only once.”
Gillmor v. Family Link, LLC, 2012 UT 38, ¶ 10 & n.4, 284 P.3d 622(citations and internal quotation marks omitted). A claim is
precluded from being raised in a subsequent action if (1) “both
cases . . . involve the same parties or their privies”; (2) “the claim
that is alleged to be barred . . . could and should have been raised
in the first action”; and (3) “the first suit . . . resulted in a final
judgment on the merits.” Macris & Assocs., Inc. v. Neways, Inc., 2000
UT 93, ¶ 20, 16 P.3d 1214 (citation and internal quotation marks
omitted).
7. (...continued)
of whether he knew or should have known of the existence of his
claims against Inwest.
8. Bishop has not challenged the legal conclusion that the district
court drew from its determination that he should have known of
the existence of his claims against Inwest at the time he filed for
bankruptcy—that those claims remain the property of the
bankruptcy estate. See, e.g., Anderson v. Acme Mkts., Inc., 287 B.R.
624, 629 (E.D. Pa. 2002) (stating that unscheduled causes of action
remain the property of the bankruptcy estate). We therefore
assume, without deciding, that the district court correctly applied
the law.
20130734-CA 6 2014 UT App 189Bishop v. Inwest Title Services
¶10 Bishop concedes that both this case and his prior federal
action involve himself, BANA, and Boyce and that the federal
action resulted in a final judgment on the merits. However, Bishop
argues that his present claims against BANA and Boyce could not
have been raised in the federal action because the federal action
was based on the Trust Deed while the current action arises out of
the Warranty Deed.
¶11 “Claims or causes of action are the same as those brought or
that could have been brought in the first action if they arise from
the same operative facts, or in other words from the same
transaction.” Mack v. Utah State Dep’t of Commerce, 2009 UT 47, ¶ 30,
221 P.3d 194. “The phrase transaction or a series of transactions
‘connotes a natural grouping or common nucleus of operative
facts.’” Gillmor, 2012 UT 38, ¶ 14 (quoting Restatement (Second) of
Judgments § 24 cmt. b (1982)). Whether a certain factual grouping
constitutes a transaction or series of transactions should be
determined “pragmatically, giving weight to such considerations
as whether the facts are related in time, space, origin, or
motivation, whether they form a convenient trial unit, and whether
their treatment as a unit conforms to the parties’ expectations or
business understanding or usage.” Id. (citation and internal
quotation marks omitted). However, no single factor is
determinative, and not every factor need be considered in every
case. Id.
¶12 Bishop’s present claims against BANA and Boyce ultimately
arise from the same transaction that gave rise to Bishop’s prior
federal claims—the near-simultaneous March 2006 execution and
recording of the Warranty Deed and the Trust Deed. Both actions
concern Bishop’s rights in the House, and both actions asserted
claims to quiet title in the House. The federal court rejected
Bishop’s quiet title claim because he failed to assert a claim of title
superior to that possessed by BANA and Boyce, while the present
action seeks to quiet title based on the superior interest that Bishop
now claims under the Warranty Deed. Although Bishop knew of
his alleged superior title to a 50% interest in the House at the time
20130734-CA 7 2014 UT App 189Bishop v. Inwest Title Services
he filed the federal action, he failed to assert it in support of his
quiet title claim despite knowing that Boyce was poised to conduct
a trustee sale of Kellene’s purported undivided 100% interest in the
House pursuant to the Trust Deed.
¶13 Bishop could and should have asserted his claimed superior
right under the Warranty Deed—and his claims for damages
flowing from that superior right—in conjunction with his quiet title
claim against BANA and Boyce in the federal action. Because he
failed to do so, his present claims against BANA and Boyce are
barred by the doctrine of claim preclusion. See Macris & Assocs.,
2000 UT 93, ¶ 20.
¶14 Bishop also challenges the district court’s awards of attorney
fees to Inwest and Boyce, arguing that the district court’s summary
judgment and dismissal rulings were erroneous and therefore
cannot support those fee awards. Bishop also argues that Boyce, as
a pro se attorney litigant, is not entitled to attorney fees. See
generally Salt Lake Cnty. v. Butler, Crockett & Walsh Dev. Corp., 2013
UT App 30, ¶ 29 & n.4, 297 P.3d 38 (discussing the “pro se litigant”
rule). We have concluded that the district court properly disposed
of all of Bishop’s claims. Consequently, we do not disturb the
attorney fee awards on the basis of any alleged impropriety in the
underlying rulings. We also note that, although the district court
awarded fees to Boyce, Boyce entered a formal waiver of that
award, mooting any potential violation of the pro se litigant rule.
Accordingly, we affirm the district court’s attorney fee award in
favor of Inwest. Further, because Inwest was awarded its attorney
fees below and has prevailed on appeal, we also grant its request
for reasonable attorney fees incurred on appeal. See Golden Meadows
Props., LC v. Strand, 2010 UT App 258, ¶ 13, 241 P.3d 371 (“When a
party who received attorney fees below prevails on appeal, the
party is also entitled to fees reasonably incurred on appeal.”
(citation and internal quotation marks omitted)).
¶15 For these reasons, we affirm the district court’s entry of
summary judgment on Bishop’s claims against Inwest and the
20130734-CA 8 2014 UT App 189Bishop v. Inwest Title Services
court’s dismissal of Bishop’s claims against BANA and Boyce. We
also award Inwest its reasonable attorney fees incurred on appeal,
and we remand this matter to the district court for a determination
of the amount of those fees.
20130734-CA 9 2014 UT App 189