Rehn v. Christensen , 392 P.3d 872 ( 2017 )

2017 UT App 21THE UTAH COURT OF APPEALS
CHARLES C. REHN,
Appellant and Cross-appellee,
v.
STEVE S. CHRISTENSEN; STEVE S. CHRISTENSEN PC; HENRIOD,
NIELSEN & CHRISTENSEN; CHRISTENSEN, CORBETT & PANKRATZ
PLLC; AND HIRSCHI CHRISTENSEN PLLC,
Appellees and Cross-appellants.
Opinion
No. 20150119-CA
Filed February 2, 2017
Third District Court, Silver Summit Department
The Honorable Ryan M. Harris
No. 130500115
Joseph E. Wrona and Jared C. Bowman, Attorneys
for Appellant and Cross-appellee
Clinton R. Brimhall, Jeremy R. Miller, Steve S.
Christensen, and D. Scott Crook, Attorneys for
Appellees and Cross-appellants
JUDGE J. FREDERIC VOROS JR. authored this Opinion, in which
JUDGES KATE A. TOOMEY and DAVID N. MORTENSEN concurred.
VOROS, Judge:
¶1 Charles C. Rehn sued Steve S. Christensen and related
parties (collectively, Christensen) for slander of title and to
remove an attorney’s lien Christensen had filed on Rehn’s
property. Rehn prevailed on some of his claims by way of
summary judgment and prevailed on the remainder of his
claims at trial. The district court denied Rehn’s request for
attorney fees and also denied Christensen’s motion for a directed
verdict and various post-trial motions. Both parties appeal.
We affirm.
Rehn v. Christensen
BACKGROUND
¶2 In 1996, Rehn retained Christensen to represent him in a
divorce. The case went to trial in 1997. Rehn did not own any
real property during the marriage, and the district court entered
findings stating that there was “no real property owned by the
parties and thus no allocation is necessary.” Rehn lived in a
rented home in Park City, Utah (the Property).
¶3 The Property lies at the heart of this dispute. The parties
disagree about a number of facts surrounding the Property,
including when Rehn first consulted Christensen, when Rehn
first had the option to purchase the Property, and when, if ever,
Rehn discussed the Property with Christensen during the
divorce proceedings. Christensen argues that Rehn had a “pre-
divorce goal” to purchase the Property and the two had a “15-
minute conversation” during which Christensen advised Rehn
to wait until after the divorce to purchase the Property. Rehn
argues that such a conversation never occurred and notes that
Christensen could not remember when or where the alleged
conversation occurred.
¶4 In October 1997, Rehn retained Christensen to appeal
certain aspects of the divorce decree and signed an engagement
letter (the Retainer Agreement). The Retainer Agreement
provided that Christensen’s law firm, Henriod, Nielsen
& Christensen (HNC), was entitled to an attorney’s lien on
Rehn’s real property for past-due billings:
[HNC] shall be entitled to a lien for services
rendered including a lien on your residence, other
real property or any subsequent settlement or
judgment, as permitted [sic] the laws of the State of
Utah or any other state where services are
provided, in the event the bill has not been paid in
full with [sic] thirty (30) days of billing.
20150119-CA 2 2017 UT App 21Rehn v. Christensen
The Retainer Agreement also included an attorney-fee provision:
In the event legal action is taken to enforce this
agreement the law of Utah shall apply and the
prevailing party shall be entitled to reasonable
costs and attorney’s fees.
Around this time, Christensen left HNC to form a solo practice,
Steve S. Christensen PC (SSC). HNC assigned its right to collect
Rehn’s outstanding attorney fees to Christensen.
¶5 Rehn purchased the Property in 2000. The following year
Christensen recorded an “Amended Notice of Attorney Lien”
(the Lien) against it. The district court later found that the Lien
contained a number of false statements. First, the Lien did not
“amend” any earlier filing, because no earlier lien had been filed.
Second, the Lien incorrectly described the Property as the
“subject” of Christensen’s representation of Rehn, whereas it
was at most only “connected to” that representation. Third, the
Lien incorrectly stated that the Property was awarded to Rehn in
the original divorce action, although Rehn did not buy the
Property until 2000, and no real property was at issue in the
divorce. The Lien also incorrectly cited a superseded section of
the Utah Code that purportedly authorized the Lien and
incorrectly stated that 1995 rather than 1996 was the year when
Rehn first retained Christensen. Finally, the Lien included billing
inaccuracies.
¶6 Christensen did not notify Rehn of the Lien when
Christensen recorded it. Approximately two months later, after
learning that Rehn planned to refinance the Property,
Christensen sent a letter informing Rehn of the Lien:
I am told by lenders that you are able to withdraw
a higher percentage of your equity if the money is
to refinance existing obligations rather than to
obtain cash for yourself. In the event it would be
20150119-CA 3 2017 UT App 21Rehn v. Christensen
helpful, I have filed the enclosed attorney’s lien for
your use in a refinance. If it turns out that this lien
will not be useful to you, I can release the lien.
The Lien remained on the Property for years as Christensen and
Rehn negotiated Rehn’s outstanding attorney fees.
¶7 In 2004, Rehn filed a Chapter 7 bankruptcy petition. He
listed Christensen as a creditor in his bankruptcy schedules,
showing a debt of $43,244 in outstanding attorney fees. Rehn did
not specifically challenge the validity of the Lien. The
bankruptcy court discharged the debt, but Christensen did not
release the Lien. When Rehn attempted to sell the Property in
2012, he discovered that the Lien still encumbered it. Rehn asked
Christensen to remove the Lien. Christensen refused; Rehn sued.
¶8 Rehn alleged slander of title, promissory estoppel, and
wrongful lien; he also sought a declaratory judgment that the
Lien was void and a permanent injunction against its
enforcement. Rehn’s core argument asserted that Christensen
had placed an invalid lien on the Property and had refused to
release it unless Rehn paid exorbitant attorney fees and interest.
Rehn also moved for a temporary restraining order and
preliminary injunction to remove the Lien. After Rehn deposited
$40,000 into an escrow account, the district court released the
Lien and entered a stipulated preliminary injunction.
¶9 Christensen answered and counterclaimed, alleging that
the Retainer Agreement entitled him to recover attorney fees:
65. SSC is entitled to receive $26,807.14 plus
contractual interest at the rate of 18% per
annum . . . .
66. SSC is entitled to receive attorney fees and
costs . . . defending itself in this legal action
pursuant to its contract with Rehn.
20150119-CA 4 2017 UT App 21Rehn v. Christensen
These allegations were based in part on the attorney-fee
provision in the Retainer Agreement. Christensen moved for
summary judgment, arguing that his Lien could not have
slandered Rehn’s title, because the Lien did not amount to a
slanderous statement—the first element of a slander of title
action. “If a person has a valid lien on property,” Christensen
argued, “recording a notice of that lien is not slanderous.” Thus,
according to Christensen, because the Retainer Agreement gave
him a contractual right to record the Lien, the Lien could not be
slanderous.
¶10 Rehn filed a cross-motion for summary judgment on the
ground that the Lien was wrongful and void. The district court
granted Rehn summary judgment, quieting title to the Property
in him. The court’s ruling rendered moot Rehn’s claim for a
permanent injunction. The court dismissed Rehn’s wrongful lien
claim but concluded on summary judgment that Rehn had
established the first two elements of his slander of title claim—a
false and slanderous statement.
¶11 The district court held a two-day jury trial on the two
remaining elements of Rehn’s slander of title claim—malice and
damages. At trial, Christensen repeatedly argued that the
Retainer Agreement gave him a contractual right to record the
Lien. Christensen advanced this argument in his opening
statement, his direct examination, his cross-examination, and his
re-direct examination, and when discussing jury instructions.
¶12 At the close of evidence, Christensen moved for a directed
verdict, arguing that no evidence existed that Christensen knew
the Lien was invalid. Rehn responded that he had produced
evidence from which a reasonable juror could conclude that
Christensen included false statements in the Lien. The district
court denied Christensen’s motion.
¶13 The jury found that both remaining elements for slander
of title were satisfied and awarded Rehn damages of
20150119-CA 5 2017 UT App 21Rehn v. Christensen
$77,752.29—largely to compensate him for attorney fees incurred
in removing the Lien.
¶14 After trial, Christensen moved for judgment
notwithstanding the verdict, asking the court to reduce the
damage award to $20,000 or, alternatively, for a new trial. The
district court denied Christensen’s motion. Rehn, as the
prevailing party at trial, moved for an award of attorney fees not
covered by the slander of title damages. Rehn asserted three
grounds for an award of fees: (1) the attorney-fee provision of
the Retainer Agreement; (2) the Reciprocal Fee Statute found in
Utah Code section 78B-5-826; and (3) the court’s “inherent
equitable powers.” The district court denied Rehn’s motion.
¶15 Addressing Rehn’s first and second grounds for an award
of attorney fees, the court reasoned that “[n]either party had a
contractual right to recover attorney fees associated with
prosecuting or defending against the slander of title claim,”
because “[t]he slander of title claim was not brought to enforce
the terms of the contract and was not otherwise based upon the
contract.” Addressing Rehn’s third ground for an award of
attorney fees, the court declined “to exercise its equitable
powers,” because the court did not find “that the facts of this
case distinguish it from other slander of title cases such that
justice requires an award of attorney fees in addition to those
already awarded by the jury, which the jury determined to be
reasonably necessary to remove the cloud of title from Mr.
Rehn’s property.”
¶16 Rehn appeals; Christensen cross-appeals.
ISSUES
¶17 Rehn asserts two claims of error on appeal. He first
contends that the district court erred by not awarding him
attorney fees under the Reciprocal Fee Statute. He next contends
20150119-CA 6 2017 UT App 21Rehn v. Christensen
that the district court erred by not awarding him attorney fees
pursuant to its inherent equitable powers. Rehn also seeks
attorney fees incurred on appeal.
¶18 Christensen asserts three claims of error in his cross-
appeal. He first contends that the district court “erred in
granting summary judgment in favor of Rehn on the first two
elements of [Rehn’s] slander of title” claim. He next contends
that the district court erred in denying his motion for a directed
verdict. Finally, he contends that the district court erred in
denying his motion for judgment notwithstanding the verdict or
for a new trial.
ANALYSIS
I. Rehn’s Appeal
A. Reciprocal Fee Statute
¶19 Rehn contends that the Reciprocal Fee Statute entitles him
to an award of attorney fees and costs. Specifically, Rehn argues
that Christensen’s use of the Retainer Agreement “as a basis to
recover Christensen’s attorney fees and costs incurred by
Christensen to defend against Rehn’s slander of title
claim . . . triggered Rehn’s right to reciprocal attorney fees
pursuant to Utah Code Ann. § 78B-5-826.”
¶20 Christensen responds that the Reciprocal Fee Statute
“does not extend to the slander of title claim because no party
asserted a contract’s enforceability as a basis for recovery
thereunder.” In essence, Christensen argues that Rehn cannot
recover fees for bringing Rehn’s slander of title claim, because
that claim was not “based upon” contract, i.e., the Retainer
Agreement.
20150119-CA 7 2017 UT App 21Rehn v. Christensen
¶21 The district court denied Rehn’s motion for attorney fees
on the ground that Rehn did not bring his slander of title claim
“to enforce the terms” of the Retainer Agreement:
The language of [the Retainer Agreement] only
allowed a party to recover attorney fees in a legal
action brought to enforce the terms of [the Retainer
Agreement]. The slander of title claim was not
brought to enforce the terms of [the Retainer
Agreement] and was not otherwise based upon
[the Retainer Agreement]. Neither party had a
contractual right to recover attorney fees associated
with prosecuting or defending against the slander
of title claim. Therefore, [Rehn] cannot recover any
fees for [his] prosecution for the slander of title
cause of action pursuant to [the Retainer
Agreement] or Utah Code Ann. § 78B-5-826.
Because our review of the Reciprocal Fee Statute involves
statutory interpretation, we review an award or denial of
attorney fees under Utah Code section 78B-5-826 for correctness.
See Bilanzich v. Lonetti, 2007 UT 26, ¶ 10, 160 P.3d 1041.
¶22 The Reciprocal Fee Statute allows the prevailing party in a
contract dispute to recover attorney fees if the contract awards
fees to at least one of the parties:
A court may award costs and attorney fees to
either party that prevails in a civil action based
upon any promissory note, written contract, or
other writing executed after April 28, 1986, when
the provisions of the promissory note, written
contract, or other writing allow at least one party to
recover attorney fees.
Utah Code Ann. § 78B-5-826 (LexisNexis 2012). Thus, the text of
the Reciprocal Fee Statute “provides that a court may award
20150119-CA 8 2017 UT App 21Rehn v. Christensen
costs and attorney fees to a prevailing party in a civil action if
two main conditions are met.” Bilanzich, 2007 UT 26, ¶ 14. “First,
the civil action must be ‘based upon any promissory note,
written contract, or other writing.’ And second, ‘the provisions
of the promissory note, written contract, or other writing’ must
‘allow at least one party to recover attorney’s fees.’” Id. (quoting
Utah Code Ann. § 78-27-56.5 (LexisNexis 2002) (renumbered as
id. § 78B-5-826 (LexisNexis 2012))).
¶23 We must determine whether Rehn’s civil action satisfies
the first condition—whether it is based on a written contract or
other writing. We agree with the district court that it is not.
¶24 Rehn identifies the Retainer Agreement as the relevant
writing. But Rehn’s suit was not based on the Retainer
Agreement. On the contrary, his Complaint asserts that he “did
not have any agreement with SSC for legal services.”
¶25 We addressed a similar circumstance in McQueen v. Jordan
Pines Townhomes Owners Association, 2013 UT App 53, 298 P.3d
666, overruled in part on other grounds by Bank of America v.
Adamson, 2017 UT 2, ¶¶ 31–33. There, a condominium
homeowners’ association, pursuant to the condominium
declaration, placed a lien on a condominium and completed a
non-judicial foreclosure. Id. ¶ 3. The condominium owner
responded with quiet title and slander of title actions. Id. ¶ 4. He
prevailed on the quiet title action and sought an award of
attorney fees based on a provision in the condominium
declaration and the Reciprocal Fee Statute. Id. ¶¶ 4, 6. The
district court denied the fee award, and this court affirmed. Id.
¶¶ 6, 28. We concluded that the quiet title action was not based
on a breach of the condominium declaration, “even though the
two may be related.” Id. ¶ 25. “The principal purpose behind the
quiet title action,” we noted, “was to establish rightful
ownership of the condominium unit, not to enforce the
condominium declaration,” even though “part of the quiet title
20150119-CA 9 2017 UT App 21Rehn v. Christensen
litigation below involved analysis of the condominium
declaration . . . .” Id.
¶26 We see the present case in the same light. Rehn’s slander
of title action did not seek to enforce or invalidate the Retainer
Agreement. That document supported Christensen’s defense to
Rehn’s slander of title and quiet title claims, just as the
condominium declaration supported the homeowners’ defense
to McQueen’s slander of title and quiet title claims. But neither
document served as the basis for the slander of title or quiet title
claims.
¶27 Hooban v. Unicity International Inc., 2012 UT 40, 285 P.3d
766, upon which Rehn relies, does not require a contrary result.
In Hooban our supreme court held that a “party is entitled to
reciprocal fee-shifting by statute ‘when the provisions’ of a
contract would have entitled at least one party to recover its fees
had that party prevailed ‘in a civil action based upon’ the
contract.” Id. ¶ 32 (quoting Utah Code Ann. § 78B-5-826). But the
alignment of the parties in Hooban, as well as in the later case
Insight Assets, Inc. v. Farias, 2013 UT 47, 321 P.3d 1021, upon
which Rehn also relies, varies from the present case in a way that
matters under the Reciprocal Fee Statute. In those cases, the
plaintiff brought an action based on a writing, the defendant
asserted that the writing was unenforceable, and the defendant
prevailed. The Reciprocal Fee Statute applied because the
defendants successfully defended against a civil action based on
a writing containing an attorney-fee provision. But in the present
case, as in McQueen, the plaintiff prevailed in a civil action that
was not based on a writing; only Christensen’s defense and
counterclaim relied on a writing.
¶28 And Rehn did recover the attorney fees he incurred in
responding to Christensen’s counterclaim. Unlike Rehn’s claims,
Christensen’s counterclaim was based on the Retainer
Agreement. The Retainer Agreement included an attorney-fee
provision that allowed the prevailing party to recover attorney
20150119-CA 10 2017 UT App 21Rehn v. Christensen
fees “[i]n the event legal action is taken to enforce this
agreement.” Rehn recovered his fees incurred in defeating
Christensen’s counterclaim because Christensen’s counterclaim,
though non-meritorious, qualified as a civil action based on a
writing containing an attorney-fee provision. See Hooban, 2012
UT 40, ¶ 32.
¶29 In sum, we affirm the district court’s denial of Rehn’s
request for an award of attorney fees incurred in prosecuting his
slander of title claim under the Reciprocal Fee Statute.
B. Equitable Award of Attorney Fees
¶30 Rehn also contends that the district court “abused its
discretion by failing to consider an attorney’s malice towards his
own client as an aggravating factor in considering an equitable
award of attorney fees and costs.” 1
¶31 “In general, Utah follows the traditional American rule
that attorney fees cannot be recovered by a prevailing party
unless a statute or contract authorizes such an award.” Hughes v.
Cafferty, 2004 UT 22, ¶ 21, 89 P.3d 148, abrogated on other grounds
by Utahns For Better Dental Health-Davis, Inc. v. Davis County
Clerk, 2007 UT 97, ¶ 6, 175 P.3d 1036. “However, in the absence
of a statutory or contractual authorization, a court has inherent
equitable power to award reasonable attorney fees when it
deems it appropriate in the interest[s] of justice and equity.” Id.(alteration in original) (citation and internal quotation marks
omitted). “This power is part of the original authority of the
chancellor to do equity in a particular situation.” Id. (citations
and internal quotation marks omitted). “Courts have exercised
that inherent power in several categories of cases.” Stewart v.
1. In asserting this claim, Rehn invokes the court’s equitable
powers; he does not rely on Utah Code section 78B-5-826
(LexisNexis 2012).
20150119-CA 11 2017 UT App 21Rehn v. Christensen
Utah Public Service Comm’n, 885 P.2d 759, 782 (Utah 1994). The
category most relevant here includes situations where “a party
acts ‘in bad faith, vexatiously, wantonly, or for oppressive
reasons.’” Id. (quoting James W. Moore et al., Moore’s Federal
Practice ¶ 54.77 (2d ed. 1972)).
¶32 “[T]he appropriate standard for reviewing equitable
awards of attorney fees is abuse of discretion. When a court
awards attorney fees pursuant to statute or contract, it does so in
recognition of a party’s legal right to an award.” Hughes, 2004
UT 22, ¶ 20. “In contrast, a court making an equitable award of
fees is concerned not with a party’s legal entitlement to an
award, but with the equities. In other words, the court must
ascertain whether the equities of a given case justify the use of its
inherent and discretionary power to award fees.” Id.
¶33 Rehn argues that the record here demonstrates extreme
bad faith and argues that an “attorney who lies to his own client
and undertakes malicious acts against his own client is guilty of
a particularly repugnant act.” Specifically, Rehn argues that
Christensen “intentionally falsified a lien against his own client’s
property,” recorded the lien “without notifying the client,” later
“lied to his client about the purpose of the lien in order to lull the
client into complacency,” and finally tried “to exhaust his former
client in litigation in an effort to extract a pound of flesh.”
¶34 Christensen responds that the district court did not ignore
any relevant facts or otherwise abuse its discretion. He notes that
the district court “sat through trial and listened to witness
testimony, . . . weighed the equities[,] and saw no reason to
award Rehn his attorney fees.” Christensen further argues that
“the debt in [Christensen’s] lien notice was not imaginary,” but
that Rehn owed Christensen “tens of thousands of dollars that
he never paid.”
¶35 The district court declined to exercise its equitable powers
in this case on the ground that the jury in the slander of title case
20150119-CA 12 2017 UT App 21Rehn v. Christensen
had already awarded Rehn his fees for removing the cloud on
his title in the quiet title action:
Although the jury found that the Defendants acted
with malice when they recorded the subject lien,
the Court does not find that the facts of this case
distinguish it from other slander of title cases such
that justice requires an award of attorney fees in
addition to those already awarded by the jury,
which the jury determined to be reasonably
necessary to remove the cloud of title from Mr.
Rehn’s property.
Rehn’s challenge to the district court’s ruling does not refute or
even acknowledge the court’s stated rationale for that ruling—
that equity did not require the court to augment the jury’s
damage award in Rehn’s slander of title case, which included
fees incurred in removing the wrongfully filed lien. This
omission is fatal to his appellate claim. No appellate argument
that ignores the primary rationale for the lower court’s ruling
can succeed in demonstrating that the ruling exceeded the limits
of the law. See Golden Meadows Props., LC v. Strand, 2010 UT App
257, ¶ 17, 241 P.3d 375 (rejecting an appellate challenge on the
ground that it failed to address the basis of the district court’s
ruling).
C. Fees on Appeal
¶36 Rehn requests an award of attorney fees on appeal on the
ground that the Retainer Agreement awards attorney fees to the
“prevailing” party. “‘[W]hen a party who received attorney fees
below prevails on appeal, the party is also entitled to fees
reasonably incurred on appeal.’” Salt Lake County v. Butler,
Crockett & Walsh Dev. Corp., 2013 UT App 30, ¶ 39, 297 P.3d 38(alteration in original) (quoting Valcarce v. Fitzgerald, 961 P.2d
305, 319 (Utah 1998)). Because Rehn did not receive attorney fees
20150119-CA 13 2017 UT App 21Rehn v. Christensen
below and because he does not prevail on appeal on that
question, he is not entitled to fees reasonably incurred on appeal.
II. Christensen’s Cross-Appeal
A. Summary Judgment on Slander of Title
¶37 Christensen contends that the district court “erred in
granting summary judgment in favor of Rehn on the first two
elements of [Rehn’s] slander of title” claim. Specifically,
Christensen argues that this court should reverse the slander of
title judgment because Christensen held “an attorney’s lien, a
consensual lien, or both” against the Property. In the alternative,
Christensen argues that summary judgment was inappropriate
because he “did not actually know [his] claim to a lien was
false.”
¶38 Rehn responds that “[w]hether Christensen possessed an
attorney’s lien or a consensual lien is irrelevant because . . . the
first two elements of a slander of title were established by hard
evidence . . . that [the Lien] contained numerous false
statements.” Rehn also argues that “Christensen had no right to
record [the Lien] against [the Property]” in the first place
because the Property was not “connected with” Christensen’s
representation of Rehn—a required element for an attorney’s
lien.
¶39 “To prove slander of title, a claimant must prove that
(1) there was a publication of a slanderous statement
disparaging claimant’s title, (2) the statement was false, (3) the
statement was made with malice, and (4) the statement caused
actual or special damages.” First Security Bank of Utah, N.A. v.
Banberry Crossing, 780 P.2d 1253, 1256–57 (Utah 1989). Before
trial, the district court granted Rehn partial summary judgment,
ruling that undisputed facts established the first two elements of
Rehn’s slander of title claim—that Christensen had published a
20150119-CA 14 2017 UT App 21Rehn v. Christensen
slanderous statement disparaging Rehn’s title to the Property
and that the statement was false.
¶40 We review a district court’s grant of summary judgment
for correctness, giving no deference to the lower court’s legal
conclusions. Dillon v. Southern Mgmt. Corp. Retirement Trust, 2014
UT 14, ¶ 21, 326 P.3d 656. We review “the facts and all
reasonable inferences drawn therefrom in the light most
favorable to the nonmoving party,” Christensen. See Orvis v.
Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citation and internal
quotation marks omitted).
¶41 Because we conclude that Christensen did not possess a
valid lien against the Property, we affirm the district court’s
ruling that Christensen’s lien notice constituted a false statement
that disparaged Rehn’s title.
1. Christensen held no attorney’s lien on the Property.
¶42 Christensen first argues that he “held a valid attorney lien
against Rehn because there was a connection between [the
Property] and Christensen’s representation of Rehn in the
divorce and divorce appeal.” Christensen’s claim of an
attorney’s lien on the Property rests on that connection.
¶43 In Utah an attorney’s lien arises by operation of law for
the balance of compensation due from a client on any money or
property owned by the client that is “the subject of or connected
with” legal work performed for the client:
(2) An attorney shall have a lien for the balance of
compensation due from a client on any money or
property owned by the client that is the subject of
or connected with work performed for the client,
including:
20150119-CA 15 2017 UT App 21Rehn v. Christensen
(a) any real, personal, or intangible property
that is the subject of or connected with the work
performed for the client; . . . .
Utah Code Ann. § 38-2-7(2)(a) (LexisNexis Supp. 2016)
(Attorney’s Lien Statute).
¶44 The district court ruled that the undisputed evidence
demonstrated the lack of a connection between Christensen’s
legal work and the Property. The vast majority of the legal work
Christensen performed related to Rehn’s divorce, and, as the
divorce court found, no real property was at issue in the divorce.
In fact, Rehn owned no real property at the time of the divorce;
he began renting the Property six weeks before the divorce trial
and did not purchase it until three years after the divorce.
¶45 Christensen alleges that he advised Rehn to wait until
after the divorce to purchase the Property. Rehn disputes that
this conversation took place. But viewing the facts in the light
most favorable to Christensen, the district court ruled that at
most Christensen “provided $30.00 of billable time work that
could arguably be related to a decision by Mr. Rehn to purchase
[the Property at] some date in the future.”
¶46 We hold that, as a matter of law, the Property was not
connected with the legal work Christensen performed for
purposes of the Attorney’s Lien Statute. An attorney’s single
comment concerning property not at issue in the divorce and not
owned by the client, made in the course of performing extensive
divorce-related work for the client, is too tenuous to connect the
legal work to the Property. If this gossamer thread satisfied the
statutory requirement for a connection, the requirement would
almost cease to exist. A single word of advice could support a
lien encompassing a client’s entire estate.
¶47 Christensen relies on Bay Harbor Farm, LC v. Sumsion, 2014
UT App 133, 329 P.3d 46, another attorney’s lien case. There, a
20150119-CA 16 2017 UT App 21Rehn v. Christensen
farm worker was injured while driving a tractor on or near his
employer’s farm and sued the employer. Id. ¶ 2. When the
employer failed to pay its attorney, the attorney filed a lien on
the farm. Id. ¶ 3. The employer sued, claiming the lien violated
the Wrongful Lien Act, Utah Code Ann. § 38-9-7 (LexisNexis
2010) (renumbered as id. § 38-9-205 (LexisNexis 2014)). Id. ¶ 4.
On appeal, this court held that, although the district court might
ultimately conclude that the worker’s compensation matter was
not “connected with” the employer’s property and thus that the
attorney’s lien was unenforceable, the attorney at least had a
“plausible claim” that his work was connected with the farm,
and therefore the lien was not wrongful for purposes of the
Wrongful Lien Act. Bay Harbor Farm, 2014 UT App 133, ¶ 13.
¶48 Bay Harbor Farm does not support Christensen’s
argument. For one thing, the legal work in Bay Harbor Farm bore
a closer connection to the farm than Christensen’s legal work
here does to the Property—at the very least, the employer in Bay
Harbor Farm owned the subject property at the time of the legal
work. Furthermore, in that case we drew no conclusion about
the sufficiency of the actual connection between the attorney’s
work and the subject of the lien. We merely noted that, even if
the lien might ultimately prove unenforceable, “an expedited
hearing under the Wrongful Lien Act is not the right vehicle for
analyzing the lien’s enforceability under the attorney’s lien
statute.” Id. ¶ 11.
¶49 Here, because the Property was not “the subject of or
connected with” Christensen’s representation of Rehn, no
attorney’s lien arose on the Property by operation of the
Attorney’s Lien Statute. Therefore, that statute presents no bar to
the district court’s conclusion that Christensen’s lien constituted
a false statement disparaging Rehn’s title to the Property.
20150119-CA 17 2017 UT App 21Rehn v. Christensen
2. Christensen held no consensual lien on the Property.
¶50 Christensen next argues that his notice of lien was neither
false nor disparaging, because he held a consensual lien
pursuant to the Retainer Agreement. The Retainer Agreement
stated that HNC was entitled to a lien on Rehn’s residence and
other property, as permitted by Utah law:
[HNC] shall be entitled to a lien for services
rendered including a lien on your residence, other
real property or any subsequent settlement or
judgment, as permitted [sic] the laws of the State of
Utah or any other state where services are
provided, in the event the bill has not been paid in
full with [sic] thirty (30) days of billing.
Christensen argues that by this provision Rehn consented in
advance to the filing of the Lien.
¶51 Rehn responds that “Christensen judicially admitted there
was no consensual lien and subsequently confirmed that judicial
admission,” and in any event “[t]he Lien itself demonstrates that
Christensen construed [the Retainer Agreement] as only
referencing the attorney’s statutory lien right.”
¶52 The district court read the Retainer Agreement to refer to
the law firm’s “right to record a lien pursuant to Utah’s attorney
lien statute.” Further, the court stated that the fact that
Christensen had “judicially admitted that there was no
contractual right to record a lien” reinforced the court’s
interpretation of the Retainer Agreement as referring to a
statutory lien, not creating a contractual lien. Without
determining whether Christensen judicially admitted that no
consensual lien existed, we hold that the Retainer Agreement did
not create a consensual lien.
20150119-CA 18 2017 UT App 21Rehn v. Christensen
¶53 Our conclusion that the Retainer Agreement did not
create a consensual or contractual lien rests first on the Retainer
Agreement itself. “When interpreting a contract, we first look at
the plain language to determine the parties’ meaning and
intent.” Meadow Valley Contractors, Inc. v. State Dep’t of Transp.,
2011 UT 35, ¶ 64, 266 P.3d 671. “If the contract is ambiguous, we
seek to resolve the ambiguity by looking to extrinsic evidence of
the parties’ intent.” Id. “If extrinsic evidence does not resolve the
ambiguity and uncertainty remains, only then will we resolve the
ambiguity against the drafter.” Id. Here, neither party relies on
extrinsic evidence of the parties’ intent. Accordingly, we will
construe the Retainer Agreement by looking first at the text of
the document to determine the parties’ intent, and we will
resolve any ambiguities against the drafter, Christensen.
¶54 The Retainer Agreement does not contain words of
consent or agreement such as, “By signing this paragraph, you
agree to grant immediately a consensual lien against your
present interest.” See Dahl v. Dahl, 2015 UT 79, ¶ 189. Rather, it
states that Christensen’s firm “shall be entitled to a lien for
services rendered . . . as permitted by the laws of the State of
Utah.” Christensen does not identify the laws referred to, but
argues that the phrase allows “any lien that is not illegal.” Rehn
argues that the phrase “laws of Utah” refers to the Attorney’s
Lien Statute. We read the Retainer Agreement as Rehn does. A
term in an engagement letter stating that a lawyer is entitled to a
lien by law is more reasonably read as a disclosure to the client of
the attorney’s rights under the Attorney’s Lien Statute than as a
mutual agreement of the parties to a consensual lien.
Furthermore, to the extent the provision is ambiguous, we
construe it against Christensen.
¶55 In addition, the text of the notice of lien cited the
Attorney’s Lien Statute, not the Retainer Agreement, as the basis
for the Lien:
20150119-CA 19 2017 UT App 21Rehn v. Christensen
[T]he undersigned holds and claims a lien by
virtue of the provisions of Section 78-51-41, Utah
Code Ann., 1953, which entitles the undersigned to
the lien described above.
Consistent with the Lien’s language, Christensen admitted in his
deposition that he drafted the notice of lien based on the
Attorney’s Lien Statute, not the Retainer Agreement.
¶56 Because the Retainer Agreement, the notice of lien, and
Christensen himself all indicate that Christensen relied on the
Attorney’s Lien Statute rather than a contractual basis for the
Lien, we hold that Christensen did not have a consensual lien
against the Property.
3. The Lien contained false statements.
¶57 Christensen last argues that “even if there were
scrivener’s errors in the notice of lien, they were not sufficient to
support a judgment against Appellees for slander of title because
the lien, whether an attorney lien or a consensual lien, was still
enforceable.” According to Christensen, “The misstatements in
the notice should not give rise to a slander of title claim where a
lien exists.” “The key,” he maintains, “is that [Christensen] held
a lien and claimed to hold a lien.”
¶58 Because we have determined that Christensen did not
hold either an attorney’s lien or a consensual lien on the
Property, this argument fails. See supra ¶¶ 49, 56.
B. Directed Verdict on Malice
¶59 Christensen also contends that “[t]he district court should
have granted Appellees’ motion for a directed verdict on the
issue of malice because Rehn failed to establish that Christensen
acted with malice.” This is so, Christensen argues, because Rehn
“must establish that the defendant had actual knowledge that
20150119-CA 20 2017 UT App 21Rehn v. Christensen
the statements at issue were false. . . . However, Rehn failed to
present evidence showing that Christensen had actual
knowledge that he held no right to a lien against Rehn’s
property.” Christensen admits that the notice of lien contained
“some scrivener’s errors,” but argues that “Rehn did not
produce evidence that Christensen knew he had no lien against
Rehn’s property.”
¶60 Rehn responds by arguing that malice can be implied
under Utah law, and that “the trial record is chock full of
evidence that Christensen knew the Lien was unenforceable.”
¶61 “Under Utah law, a party who moves for a directed
verdict has the very difficult burden of showing that no evidence
exists that raises a question of material fact.” Smith v. Fairfax
Realty, Inc., 2003 UT 41, ¶ 12, 82 P.3d 1064 (citation and internal
quotation marks omitted). And when reviewing a challenge to a
trial court’s denial of a motion for directed verdict, “we review
the evidence and all reasonable inferences that may fairly be
drawn therefrom in the light most favorable to the party moved
against, and will sustain the denial if reasonable minds could
disagree with the ground asserted for directing a verdict.” Id.(citation and internal quotation marks omitted).
¶62 “A claim for slander of title requires proof of four
elements: (1) publication of a slanderous statement, (2) the
statement must be false, (3) the statement must be made with
malice, and (4) the statement must cause special damages to the
plaintiff.” Neff v. Neff, 2011 UT 6, ¶ 79, 247 P.3d 380. “[F]or a
slanderous statement to be malicious, the defendant must have
actually known that it was false or misleading.” Dillon v.
Southern Mgmt. Corp. Retirement Trust, 2014 UT 14, ¶ 36, 236 P.3d
656. However, “malice may be implied where a party
knowingly and wrongfully . . . publishes something untrue or
spurious . . . under circumstances that it should reasonably
foresee might result in damage to the owner of the property.” Id.(citation and internal quotation marks omitted).
20150119-CA 21 2017 UT App 21Rehn v. Christensen
¶63 Here, viewing the evidence and all reasonable inferences
therefrom in the light most favorable to Rehn, we agree with the
district court that reasonable minds could conclude that
Christensen’s false statements were made with malice. For
example, the Lien incorrectly stated it was an “amended” lien,
whereas it was in fact the original notice of lien. Second, the Lien
incorrectly stated that the Property was the “subject” of
Christensen’s representation of Rehn, despite the Property not
being involved in the divorce, see supra ¶ 48. Third, the Lien
incorrectly stated the Property was awarded to Rehn in the
original divorce action, when it was not—Rehn did not even
own the Property until three years after the divorce, and the
divorce court specifically stated that no real property was at
issue. Fourth, the Lien incorrectly stated that 1995 rather than
1996 was the year Rehn retained Christensen. And finally, the
Lien incorrectly cited a superseded section of the Utah Code
which purportedly authorized the Lien when, at the time, the
cited section no longer supported the stated proposition because
the section number had been changed.
¶64 A jury could reasonably conclude that Christensen made
these false statements knowingly for the purpose of making an
invalid lien appear valid. Therefore, the district court properly
denied Christensen’s motion for a directed verdict.
C. Post-trial Motions on Attorney Fees
¶65 Finally, Christensen contends that the district court erred
in denying his combined motion for judgment notwithstanding
the verdict (JNOV), motion to alter or amend judgment, and
motion for new trial. The motions all asserted that “the attorney
fees awarded [to Rehn] were not reasonably necessary to remove
[the Lien].” In support, Christensen argues that “slander of title
attorney fees are per se not eligible as slander of title damages,”
and that “[m]any portions of Rehn’s attorney fees were per se
not reasonably necessary to remedy [the Lien] disparaging the
20150119-CA 22 2017 UT App 21Rehn v. Christensen
title to Rehn’s property.” Christensen asked the district court to
reduce the jury’s determination of damages from $77,752.29 to
$20,000. However, on appeal Christensen acknowledges that
“there was testimony at trial that the amounts were reasonable
and thus there exists a basis in evidence to support the jury’s
determination.”
¶66 Rehn responds that “the jury was directed to determine if
Rehn’s attorney fees were reasonably necessary,” and that
Christensen “failed to present any other evidence suggesting
that the fees were unreasonable.” In Rehn’s view, “[b]ecause the
only evidence provided at trial supported the reasonableness of
Rehn’s attorney fees, and no evidence supported a contrary
finding, substantial evidence precluded the trial court from
granting Christensen’s Motion for a JNOV.”
¶67 In denying Christensen’s motions, the court explained
that the jury was properly instructed on the law and that
Christensen did not object to those jury instructions. The court
next explained that Rehn “presented evidence of his claimed
damages” through billing records and attorney testimony. The
court noted that Christensen had cross-examined the attorney’s
testimony but did not call an expert of his own. Lastly, the court
explained, “Before allowing the damages evidence to go to the
jury, the Court made sure during pretrial proceedings that the
damages evidence [Rehn] would present to the jury was not
simply all attorneys’ fees incurred in the whole case but, rather,
just those fees that were incurred prior to the Court’s summary
judgment ruling clearing title.” Thus, because “[t]here was
competent evidence in the record to support the jury’s verdict,”
the court denied Christensen’s motion.
¶68 “[A] district court may grant a JNOV motion only if there
is no ‘basis in the evidence, including reasonable inferences
which could be drawn therefrom, to support the jury’s
determination.’” ASC Utah, Inc. v. Wolf Mountain Resorts, LC,
2013 UT 24, ¶ 18, 309 P.3d 201 (quoting Braithwaite v. West Valley
20150119-CA 23 2017 UT App 21Rehn v. Christensen
City Corp., 921 P.2d 997, 999 (Utah 1996)). We reverse a trial
court’s denial of a motion for a new trial “only if there is no
reasonable basis for the decision.” Id. ¶ 21 (citation and internal
quotation marks omitted).
¶69 Attorney fees may be recovered as special damages in
slander of title cases “if the fees are reasonably necessary to
remedy the disparagement of the plaintiff’s title.” Neff v. Neff,
2011 UT 6, ¶ 79, 247 P.3d 380; see also Ortega v. Ridgewood Estates
LLC, 2016 UT App 131, ¶ 30, 379 P.3d 18. Here, the jury was
instructed to award only those fees that were “reasonably
necessary to remove the clouds on title”:
In slander of title cases, attorney fees may
constitute recoverable damages if the fees incurred
were reasonably necessary to remove clouds from
a party’s title to property. For instance, if it is
reasonably necessary for a property owner to file a
lawsuit in order to remedy defects in his title
resulting from a slanderous statement affecting his
title, any fees and costs incurred in that lawsuit up
to the point in the lawsuit when title is cleared, that
were reasonably necessary to remove the clouds on
title are recoverable as damages in a slander of title
case.
Christensen did not object to this instruction. Nor did he present
testimony denying that Rehn’s attorney fees were reasonably
necessary to remedy Christensen’s disparagement of Rehn’s title.
¶70 Because the district court correctly instructed the jury to
include only those damages “reasonably necessary” to “remove
the clouds on [Rehn’s] title,” see Neff, 2011 UT 6, ¶ 80, and Rehn
presented detailed billing records and attorney testimony as
evidence to support the reasonableness of his fees, we cannot say
that there was “no basis in the evidence . . . to support the jury’s
determination,” see ASC Utah, 2013 UT 24, ¶ 18 (citation and
20150119-CA 24 2017 UT App 21Rehn v. Christensen
internal quotation marks omitted). Thus, we affirm the district
court’s denial of Christensen’s motion.
CONCLUSION
¶71 For the foregoing reasons, the judgment of the district
court is affirmed.
20150119-CA 25 2017 UT App 21