Spring Gardens Inc. v. Security Title Insurance Agency of Utah Inc. ( 2016 )

2016 UT App 113THE UTAH COURT OF APPEALS
SPRING GARDENS INC.,
Appellant,
v.
SECURITY TITLE INSURANCE AGENCY OF UTAH INC.,
Appellee.
Opinion
No. 20140932-CA
Filed May 26, 2016
Second District Court, Farmington Department
The Honorable David M. Connors
No. 090700494
L. Miles LeBaron and John A. Snow, Attorneys
for Appellant
Troy L. Booher, Clemens A. Landau, Paul M.
Halliday Jr., and Benjamin J. Mann, Attorneys
for Appellee
JUDGE GREGORY K. ORME authored this Opinion, in which JUDGE
STEPHEN L. ROTH and SENIOR JUDGE RUSSELL W. BENCH
concurred.1
ORME, Judge:
¶1 Spring Gardens Inc. appeals the district court’s grant of
summary judgment to Security Title Insurance Agency of Utah
Inc. on a claim of negligence against Security Title and the
1. Senior Judge Russell W. Bench sat by special assignment as
authorized by law. See generally Utah R. Jud. Admin. 11-201(6).
Spring Gardens v. Security Title Insurance Agency of Utah
district court’s denials of Spring Gardens’ separate rule 56(f)2
motion for additional time to conduct discovery and its rule
54(b) motion for reconsideration of the court’s summary
judgment decision. The instant case arises from the fact that
Security Title did not record a trust deed securing a debt in favor
of Spring Gardens. We affirm.
BACKGROUND
¶2 In 2006, Spring Gardens lent a substantial sum of money
to Blaine and Jessie Johnson, secured by a first-position lien on a
parcel of real property (the Burmester property). By March 7,
2008, the Johnsons still owed Spring Gardens approximately
$85,000. Hoping to expedite repayment of the loan, on that day
Spring Gardens signed a new agreement (1) requiring the
Johnsons to pay the debt in full within thirty days and
(2) subordinating Spring Gardens’ first-position lien on the
Burmester property to two other interests of record. This new
agreement was further secured by a trust deed intended to be in
a first-priority position on two additional parcels of real
property (the Skull Valley property). After both parties signed
the agreement and trust deed, Spring Gardens deposited the
documents with Security Title.
¶3 A short time later, however, Spring Gardens, in lieu of
closing on the new agreement, chose to accept a payment as
consideration for its subordination on the Burmester property.
No closing having occurred, Security Title never recorded the
Skull Valley trust deed, meaning Spring Gardens had no
recorded interest in the Skull Valley property. Security Title did,
however, record the subordination of Spring Gardens’ interest in
the Burmester property. As a result, when the Johnsons
2. Rule 56 was reorganized effective May 1, 2016. The former
rule 56(f) is now rule 56(d)(2). We refer in this opinion to the rule
as written when the district court considered Spring Gardens’
motion.
20140932-CA 2 2016 UT App 113Spring Gardens v. Security Title Insurance Agency of Utah
defaulted, Spring Gardens had no recorded interest in the Skull
Valley property and its interest in the Burmester property was
subordinated to recorded interests in favor of two other parties,
whose combined claims exceeded the value of the property.
Spring Gardens sued both the Johnsons and Security Title; the
instant appeal concerns only the latter.
¶4 In its complaint, Spring Gardens repeatedly declared that
a closing occurred and that Security Title therefore had a duty to
record the Skull Valley trust deed. During discovery, Security
Title sought various admissions from Spring Gardens that
contradicted the facts as stated in Spring Gardens’ complaint,
including an admission that no closing actually occurred and
that Security Title never received verbal or written instruction
from Spring Gardens to record the trust deed. Because Spring
Gardens never denied or otherwise responded to these requests,
it was deemed to have admitted the truth of these statements.
See Utah R. Civ. P. 36(b)(1). Security Title seized upon this
opportunity to end the suit and moved for summary judgment
on the ground that Spring Gardens’ admissions refuted the
factual predicate of its claim, i.e., because a closing did not occur
and no instructions to nonetheless record were given, no duty to
record could be triggered by the “closing” alleged in the
complaint or on the basis of separate instructions.
¶5 In its opposition to summary judgment, Spring Gardens
argued that Security Title was required to produce evidence
establishing the appropriate standard of care and to further
demonstrate that its conduct did not violate that standard.
Spring Gardens also filed a rule 56(f) motion seeking additional
time for further discovery and to consult industry experts.
Although Spring Gardens also expressed an intent to file a
motion to amend or withdraw its admissions, it never did.
Security Title responded by reiterating its argument that the
deemed-undisputed facts effectively foreclosed Spring Gardens’
negligence claim as set forth in its complaint.
¶6 The district court agreed with Security Title that where a
closing had not occurred and instructions to record had not been
20140932-CA 3 2016 UT App 113Spring Gardens v. Security Title Insurance Agency of Utah
given, Spring Gardens could not prove that Security Title had a
duty to record as alleged in its complaint. Thus, the district court
granted summary judgment to Security Title. The district court
also denied Spring Gardens’ rule 56(f) motion because Spring
Gardens conducted no further discovery after Security Title filed
its motion for summary judgment and because Spring Gardens
presented no contrary evidence in opposing summary judgment.
¶7 Six months after summary judgment was granted to
Security Title, Spring Gardens filed a motion for reconsideration.
The motion included the new arguments that Security Title had
a statutorily implied obligation to record the trust deed and that
a course of dealing existed between Spring Gardens and Security
Title prior to the incident in question in which Security Title had
always recorded deeds without specific written instructions to
do so. A motion to amend the complaint did not accompany the
motion for reconsideration, even though the only claim set forth
in the complaint was tied specifically to the closing allegedly
superintended by Security Title.
¶8 After taking the matter under advisement, the district
court issued a written decision in which it denied Spring
Gardens’ motion for reconsideration. The court explained that to
the extent Spring Gardens was presenting new evidence, it had
given the court no indication why such evidence could not have
been produced in a timely fashion. Furthermore, the court
determined that “given *Spring Gardens’] deemed admissions
and Security Title’s supporting affidavits, [Security Title had] no
duty . . . as a matter of law.” The court concluded, therefore, that
no “manifest injustice *would+ result *to Spring Gardens+ absent
reconsideration.” The court also rejected Spring Gardens’
argument that its failure to conduct any discovery between “the
filing of Security Title’s Motion for Summary Judgment and oral
arguments” was not dilatory because it did not have sufficient
time to peruse Security Title’s affidavits. Instead, the court found
that Spring Gardens “had approximately six months to conduct
discovery and adduce material facts to preclude a grant of
summary judgment in favor of Security Title,” during the
interval between the filing of and the hearing on Security Title’s
20140932-CA 4 2016 UT App 113Spring Gardens v. Security Title Insurance Agency of Utah
motion for summary judgment. Finally, the court rejected Spring
Gardens’ argument that the issue of Security Title’s duty was
inadequately briefed by Security Title. Spring Gardens appeals.
ISSUES AND STANDARDS OF REVIEW
¶9 Spring Gardens challenges the district court’s grant of
summary judgment in favor of Security Title. “We review the
district court’s decision to grant summary judgment for
correctness, granting no deference to the district court.”
Commercial Real Estate Inv., LC v. Comcast of Utah II, Inc., 2012 UT
49, ¶ 14, 285 P.3d 1193 (citation and internal quotation marks
omitted).
¶10 Spring Gardens also questions the district court’s rejection
of its motion for reconsideration of the district court’s summary
judgment decision and its rule 56(f) motion for additional time in
which to conduct discovery. “We review a district court’s
decision to deny a motion to reconsider a summary judgment
decision for an abuse of discretion.” Koerber v. Mismash, 2015 UT
App 237, ¶ 15, 359 P.3d 701. Similarly, “we review a trial court’s
decision to grant or deny a rule 56(f) motion under the abuse of
discretion standard.” Crossland Sav. v. Hatch, 877 P.2d 1241, 1243
(Utah 1994). Although “*o+ur case law demonstrates that to
provide an adequate opportunity for discovery, the trial court
should liberally grant rule 56(f) motions . . . , the trial court need
not grant rule 56(f) motions that are dilatory or lacking in merit.”
Id. “Under *an abuse of discretion+ standard, we will not reverse
unless the decision exceeds the limits of reasonability.” State v.
Larsen, 865 P.2d 1355, 1361 (Utah 1993).
ANALYSIS
¶11 Two roads were open to Security Title in its pursuit of
summary judgment. First, it could have established the
applicable standard of care and demonstrated that it satisfied the
standard as a matter of law. See, e.g., RJW Media, Inc. v. CIT
20140932-CA 5 2016 UT App 113Spring Gardens v. Security Title Insurance Agency of Utah
Group/Consumer Fin., Inc., 2008 UT App 476, ¶¶ 21, 24, 202 P.3d
291 (explaining that a defendant presented evidence of the
industry standard of care “in support of its motion for summary
judgment” and affirming summary judgment on the ground that
the plaintiff failed to dispute the defendant’s evidence as to the
applicable standard of care or “to offer evidence to demonstrate
a breach of the articulated standard of care”).3 Or second, in the
wake of Spring Gardens’ admissions, Security Title could simply
3. Security Title tried to argue it both ways on appeal: it
maintained its original contention concerning Spring Gardens’
deemed admissions, even as it argued that the burden to
establish the applicable standard of care and prove a breach of
that standard of care rested on Spring Gardens. The latter point
is not well taken. If a case proceeds to trial, the burden clearly
rests on the party bringing an action or raising a claim to prove
the elements of its claim, which in the instant case would include
evidence of both the standard of care to which Security Title was
expected to adhere and the breach of that standard. The same is
not true at the summary judgment stage. See Jones & Trevor Mktg.
v. Lowry, 2012 UT 39, ¶ 29, 284 P.3d 630 (“Generally, the party
moving for summary judgment must make an initial showing that
he is entitled to judgment and that there is no genuine issue of
material fact that would preclude summary judgment in his
favor.”) (emphasis added); Orvis v. Johnson, 2008 UT 2, ¶ 18, 177
P.3d 600 (“A summary judgment movant, on an issue where the
nonmoving party will bear the burden of proof at trial, may satisfy its
burden on summary judgment by showing, by reference to the
pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, that there
is no genuine issue of material fact.”) (emphasis added) (citation
and internal quotation marks omitted). Thus, we agree with
Spring Gardens that the burden did not rest with it to establish
the applicable standard of care in its response to a summary
judgment motion that Security Title pursued on other grounds.
20140932-CA 6 2016 UT App 113Spring Gardens v. Security Title Insurance Agency of Utah
rely on those admissions as conclusively refuting the factual
predicate of Spring Gardens’ complaint. See Dantine v. Shores,
2011 UT App 392, ¶ 2, 266 P.3d 188 (per curiam) (upholding a
district court’s grant of summary judgment against plaintiffs
where their failure to respond to requests for admissions
resulted in deemed admissions that left “no material disputed
facts” in the case).
¶12 According to Spring Gardens’ original and never-
amended complaint, Security Title had a duty to record the deed
“following the closing.” That Spring Gardens believed the duty
to record was premised upon a closing having occurred—and
that its negligence claim against Security Title was premised
upon such a closing—is repeated several times within its
complaint. But as Spring Gardens admitted by failing to deny
Security Title’s requested admissions, a closing never occurred.4
4. Even if true, as Spring Gardens claimed below, that the
outcome of this case was skewed by “the technicality of deemed
admissions,” the text of rule 36 is quite clear: a “matter is
admitted unless, within 28 days after service of the request, the
responding party serves upon the requesting party a written
response.” Utah R. Civ. P. 36(b)(1). There is no question that
Spring Gardens failed to respond to Security Title’s request for
admissions within twenty-eight days (or, indeed, ever). And
while Spring Gardens indicated that it would, at some point, file
a “Motion to Withdraw or Amend these Admissions,” it never
did, although it belatedly filed a motion for reconsideration—
one that raised new arguments. “[T]rial courts are under no
obligation to consider motions for reconsideration,’” Tschaggeny
v. Milbank Ins. Co., 2007 UT 37, ¶ 15, 163 P.3d 615, and while the
district court recited that it “considered the parties’ pleadings
and arguments,” its decision makes quite clear that it ruled
against Spring Gardens because of its “dilatory” behavior rather
than on the merits of its new arguments. And because the court
elected to decide the motion for reconsideration on procedural
rather than substantive grounds, Spring Gardens’ new
(continued…)
20140932-CA 7 2016 UT App 113Spring Gardens v. Security Title Insurance Agency of Utah
A claim explicitly premised upon the existence of a fact later
admitted not to exist by the party making the claim is a weak
claim indeed. See id. ¶¶ 2, 5. Furthermore, Spring Gardens had
months to amend its complaint or seek to withdraw the
admissions in question, but it never did.
¶13 In sum, because of Spring Gardens’ admissions that no
closing occurred and that no instructions of any kind were given
to Security Title directing it to record the trust deed, Security
Title could not have a duty to record premised upon the
occurrence of such a closing and the giving of such instructions.
Accordingly, the district court properly granted summary
judgment to Security Title. And under these circumstances, the
district court did not abuse its discretion in denying Spring
Gardens additional time for discovery because additional
discovery time would have been of no benefit to Spring Gardens
(…continued)
arguments were not preserved for appeal. Cf. Burdick v. Horner
Townsend & Kent, Inc., 2015 UT 8, ¶ 50, 345 P.3d 531 (“[I]f a trial
court decides, in its discretion, to address the merits of a claim
raised for the first time in a motion to reconsider, that claim is
preserved[.]”).
New appellate counsel for Spring Gardens raised several
additional and interesting arguments during oral argument,
such as whether Security Title had some lesser duty to notify
Spring Gardens that it had not recorded the trust deed or at least
to return the unrecorded trust deed to Spring Gardens after it
became clear that a closing would not occur, which would have
served as timely notice to Spring Gardens that its trust deed had
not been recorded. We decline to address those arguments
because they were not preserved—or even briefed. See, e.g.,
Patterson v. Patterson, 2011 UT 68, ¶ 17, 266 P.3d 828 (noting that
Utah’s appellate courts “have on countless occasions exercised
[their] discretion to refuse to consider new issues, arguments,
claims, or matters on appeal”).
20140932-CA 8 2016 UT App 113Spring Gardens v. Security Title Insurance Agency of Utah
given its deemed admissions and because, in any event, Spring
Gardens had not availed itself of the ample time it already had
for discovery. And “the trial court need not grant rule 56(f)
motions that are dilatory.” Crossland Sav. v. Hatch, 877 P.2d 1241,
1243 (Utah 1994).
¶14 Spring Gardens never took appropriate steps to withdraw
the admissions that refuted the central tenets of its claim against
Security Title or to justify its dilatory actions during discovery.
Absent such a withdrawal, the introduction of contrary
evidence, the amendment of its original complaint to add new
claims against Security Title, or some justification for Spring
Gardens’ delays in pursuit of its suit, the district court had
nothing new to consider, so it was not an abuse of discretion for
the district court to decline to reconsider its summary judgment
decision.
CONCLUSION
¶15 Spring Gardens undercut its own negligence claim
against Security Title through its deemed admissions. And
rather than respond by amending its complaint, filing a motion
to withdraw its admissions, or timely making the new
arguments put forth in its motion for reconsideration or ably
argued by new appellate counsel, Spring Gardens chose not to
conduct further discovery and not to submit any evidence in
support of its position. The record establishes that Spring
Gardens had ample time and opportunity to conduct discovery
and to deny Security Title’s requests for admissions if they were
not warranted, but it did not do so. The district court did not
abuse its discretion when it declined to rescue Spring Gardens
from its own dilatory behavior, and the district court further did
not abuse its discretion by refusing to consider Spring Gardens’
new claims raised in its motion for reconsideration.
¶16 Affirmed.
20140932-CA 9 2016 UT App 113