Heath v. Consumer Protection , 2023 UT App 45 ( 2023 )

2023 UT App 45THE UTAH COURT OF APPEALS
MICHAEL DANIEL HEATH, HEATH ENTERPRISE, INC. AND HEATH
ENTERPRISES UTAH, INC.,
Appellants,
v.
DIVISION OF CONSUMER PROTECTION
AND DEPARTMENT OF COMMERCE,
Appellees.
Opinion
No. 20210362-CA
Filed April 27, 2023
Fifth District Court, Cedar City Department
The Honorable Matthew L. Bell
No. 170500129
James W. Jensen, Attorney for Appellants
Sean D. Reyes and Stanford E. Purser,
Attorneys for Appellees
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion,
in which JUDGES DAVID N. MORTENSEN and RYAN M. HARRIS
concurred.
CHRISTIANSEN FORSTER, Judge:
¶1 The Utah Division of Consumer Protection (the Division)
issued two citations against Michael Daniel Heath (Mr. Heath),
Heath Enterprise, Inc., and Heath Enterprises Utah, Inc.,
(collectively, Heath) for numerous violations of the Utah
Administrative Code and the Utah Consumer Sales Practices Act
(UCSPA). After exhausting its administrative remedies, Heath
filed a petition for review in the district court challenging the
citations. The district court found nine violations and fined Heath
$20,000. On appeal, Heath raises numerous challenges to the
court’s ruling, which we largely reject. However, we vacate three
Heath v. Consumer Protection
of the violations—one of them because the district court
inappropriately found it sua sponte and two others because the
court evaluated them using the wrong mens rea standard. We
remand for the court (1) to reevaluate the two violations under the
appropriate mens rea standard and (2) to determine whether
Heath’s fine should be reassessed in light of the vacated
violations.
BACKGROUND
¶2 Mr. Heath is the owner of Heath Enterprise, Inc. and Heath
Enterprises Utah, Inc., which operate an auto repair shop in New
Harmony, Utah, called Freeway Tire. As part of their sales efforts,
Mr. “Heath and his Freeway Tire employees engage in a business
practice that [Mr.] Heath calls ‘merchandising the island,’ which
involves pointing out to drivers who stop at Freeway Tire any
possible problems with their vehicles (like worn tires) and
offering to fix those problems.” Freeway Tire employees are paid
on commission rather than based on an hourly wage or salary.
¶3 In response to complaints it received about Freeway Tire,
the Division conducted an investigation and issued two citations
against Heath for violations of the UCSPA. Following two
hearings, an administrative law judge (ALJ) found that Heath had
committed numerous violations of the UCSPA. The ALJ’s
findings and conclusions were affirmed by the Department of
Commerce. After exhausting its administrative remedies, Heath
filed petitions for judicial review with respect to both citations in
district court. The district court consolidated the cases.
¶4 In the course of a two-day trial de novo, the district court
heard evidence of violations relating to four of Freeway Tire’s
customers: Anderson, Wagner, Smith, and Albert.
¶5 Anderson stopped at Freeway Tire to buy ice. A Freeway
Tire employee approached him and told him that the two front
tires on his motorhome had cracks and should be replaced. The
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employee verbally quoted Anderson $600 for the new tires, and
Anderson agreed, but the employee did not provide Anderson
anything in writing or obtain his signature on a written estimate.
When Anderson returned to pay after the work was done, he
received an invoice for $1,121.54. Anderson signed the invoice
and paid by credit card.
¶6 Wagner’s tire went flat near New Harmony, Utah, while he
was moving across the country with all his possessions in his car,
and went to Freeway Tire for repairs. A Freeway Tire employee
recommended that Wagner replace both front tires as well as his
left half-axle. The employee gave a verbal estimate of $1,200, and
Wagner agreed. The next day, the employee called Wagner and
told him he needed a second new half-axle and increased the
estimate to $1,500. The employee later called a second time and
told Wagner he needed new front brakes and rotors and increased
the estimate to $1,800. Wagner verbally agreed to each new
estimate. Wagner did not provide any written authorization for
any of the repairs prior to the time they were performed. Upon
returning to pick up his car, Wagner was presented with two
invoices totaling $2,829.27. Wagner signed the invoices at that
time. The employee who helped Wagner claimed at trial that he
had given Wagner “the exact amount” of both invoices over the
phone. Wagner later filed a customer complaint with his credit
card company, which ultimately refunded him $600.
¶7 Smith was towing a trailer through Utah when he stopped
at Freeway Tire for gas. While Smith was pumping gas, a Freeway
Tire employee approached him and told him his trailer was
making a noise when he pulled up. The employee offered to
inspect the trailer, to which Smith agreed. The employee then
pulled the trailer into the garage and began removing parts from
it, telling Smith they were broken and needed to be replaced. The
employee wrote an estimate of $468 for parts and $150 for labor
on a scrap of paper. Smith agreed to the amount but did not sign
the paper. After completing the repairs, the employee gave Smith
an invoice for $1,343.23. Despite protesting the amount, Smith
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ultimately signed the invoice and paid. At trial, the employee
stated that the quote was “per side.”
¶8 Albert was driving a truck and towing a trailer to Arizona
on I-15 when an employee of Freeway Tire flagged him down. The
employee told Albert that the right rear tire on his trailer was
“wobbling so badly it looked like it was about to fall off” and that
something was wrong with the trailer’s shackle. The employee
directed Albert to follow him back to Freeway Tire. At Freeway
Tire, another employee told Albert that the trailer’s shock
absorber was blown out and “strongly recommended” that he
replace all four shocks “to make sure he had a safe journey.” The
employee told Albert that he “had shocks in stock that were
correct for Albert’s trailer.” He told Albert that “it was common
for RVs to have this particular shock and the shock has to be
‘custom ordered,’” so the employee “kept them on hand so he
could fix RVs.” The employee said the shocks were “heavy duty,
custom ordered” and cost $365 a pair. The employee later denied
telling Albert that his trailer was unsafe or that the shocks were
special order. 1 Albert did not receive a written estimate of repairs
until they were completed. After the repairs were finished, the
employee gave Albert an invoice for $1,018.10. Albert signed the
invoice and paid with a credit card.
¶9 For various reasons, Albert suspected Freeway Tire had
not been forthright with him. Upon arriving home, he contacted a
local parts store and learned that the shocks cost less than $30 each
and that they were neither a custom part nor heavy duty. An
expert at trial testified that shock absorbers were not necessary for
safety on Albert’s trailer and that most RVs do not have shocks at
all. Another expert testified that broken shocks could be removed
rather than replaced.
1. Neither the parties nor the district court attempted to
distinguish between “custom” and “special” order and used the
terms interchangeably, so for purposes of this opinion, we do the
same.
20210362-CA 4 2023 UT App 45Heath v. Consumer Protection
¶10 Mr. Heath testified that he considers a “special order” to be
anything that he orders “in a greater quantity than his supplier
has on hand at a given time.” Heath’s expert similarly testified
that “‘special order’ means anything he needs to make sure he
gets in, and can include things that he keeps in stock on his
shelves.” An expert witness for the Division of Consumer
Protection, on the other hand, testified that a special order is
something “ordered for a specific customer” and that an item is
not a special order if “several are kept in inventory.” Albert
believed a special order was something not readily available in
stores.
¶11 After trial, the Division moved to amend one of its citations
to add a new rule violation it had not previously alleged—that
Heath had intentionally understated costs to Smith.
¶12 In a lengthy written ruling entered after trial, the district
court found that Heath had committed the following nine
violations:
1. Materially misstating the estimate of the cost to repair
Anderson’s vehicle in violation of rule R152-11-5(A)(10) of
the Utah Administrative Code;
2. Failing to obtain Anderson’s express authorization prior to
performing repairs to his vehicle in violation of rule R152-
11-5(A)(1);
3. Knowingly making material misstatements in estimating
the cost to repair Wagner’s vehicle in violation of rule
R152-11-5(A)(10);
4. Failing to obtain Wagner’s express authorization for the
repairs to his vehicle prior to performing them in violation
of rule R152-11-5(A)(1);
5. Knowingly making material misstatements in estimating
the cost to repair Smith’s vehicle in violation of rule R152-
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11-5(A)(10) (the new rule violation raised by the Division
after trial) or, alternatively, knowingly charging Smith for
repairs to which he did not previously agree in violation of
Utah Code section 13-11-4(2)(r);
6. Knowingly failing to obtain Smith’s express authorization
for the repairs to his vehicle prior to performing them in
violation of rule R152-11-5(A)(1);
7. Knowingly misrepresenting to Albert that his trailer was
dangerous in violation of rule R152-11-5(A)(9);
8. Knowingly misrepresenting to Albert that his shocks were
special order in violation of Utah Code section 13-11-
4(2)(d), which prohibits representing that the subject of a
consumer transaction was “available to the consumer for a
reason that does not exist,” and Utah Code section 13-11-
4(2)(b), which prohibits representing that the subject of a
consumer transaction was “of a particular standard,
quality, grade, style, or model” when it was not; and
9. Knowingly misrepresenting to Albert that the shocks were
“the exactly right shock” for his trailer in violation of Utah
Code section 13-11-4(2)(b).
The ninth violation identified by the court was not raised by the
Division but was found sua sponte by the district court.
¶13 In assessing the appropriate penalty, the court found that
Heath’s conduct had spanned multiple years, Heath had targeted
vulnerable drivers far from home, its violations had caused
substantial harm to individual consumers, it had not cooperated
with investigation efforts, it had a long history of consumer
complaints, it had done little to change its conduct, it had engaged
in business practices that incentivize employees to engage in
illegal conduct, and it had made minimal effort to mitigate the
harm it caused because of the revenue it stood to make by
20210362-CA 6 2023 UT App 45Heath v. Consumer Protection
continuing its deceptive practices. Based on these findings, the
district court imposed a fine of $20,000 against all defendants
jointly and severally and permanently enjoined Heath from
engaging in further violations of the UCSPA.
ISSUES AND STANDARDS OF REVIEW
¶14 First, Heath challenges the district court’s consideration of
matters not raised in the administrative proceedings, asserting
that the court exceeded the scope of its de novo review. “Whether
a court has authority to resolve an issue between the parties is a
question of law,” which we review for correctness. Warner v.
Warner, 2014 UT App 16, ¶ 14, 319 P.3d 711.
¶15 Second, Heath argues that the district court misinterpreted
rule R152-11-5(A)(1) of the Utah Administrative Code when it
interpreted that provision to require suppliers to obtain a
customer’s express authorization prior to performing automotive
repairs. We review the interpretation of administrative rules for
correctness. See Utah Chapter of Sierra Club v. Air Quality Board,
2009 UT 76, ¶ 13, 226 P.3d 719.
¶16 Third, Heath argues that the district court applied the
wrong mens rea standard in finding violations of rule R152-11-
5(A)(10). This issue also involves the interpretation of an
administrative rule, which we review for correctness. See id.¶17 Fourth, Heath challenges the district court’s findings 2 that
Freeway Tire employees made misrepresentations in telling
Albert that his trailer was in a dangerous condition and that the
shocks sold to him were special order. “We review a court’s
2. Heath attempts to frame these issues as legal challenges to the
district court’s interpretation of the administrative rules and the
Utah Code. However, we agree with the Division that these issues
are more properly characterized as challenges to the district
court’s factual findings and therefore review them as such.
20210362-CA 7 2023 UT App 45Heath v. Consumer Protection
findings of fact for clear error . . . .” Seamons v. Wiser, 2020 UT App
33, ¶ 11, 462 P.3d 387.
¶18 Finally, Heath challenges the district court’s determination
that Mr. Heath was a supplier, as defined by Utah Code section
13-11-3(6), who could be held jointly and severally liable for the
violations. The parties dispute whether this is a legal or factual
question, but because we ultimately decline to consider the issue
on grounds of inadequate briefing, we need not resolve their
dispute.
ANALYSIS
I. De Novo Review
¶19 Heath’s first argument concerns matters addressed by the
district court that Heath believes were beyond the scope of the
court’s authority to consider on de novo review from an
administrative proceeding. There are two parts to this argument:
first, that the court lacked authority to consider alleged violations
not raised in the administrative proceedings and, second, that the
court lacked authority to consider mens rea evidence regarding
violations the Division maintained did not require a mens rea
element.
A. New Violations
¶20 Heath first alleges that the district court erred by
considering violations that were not raised in the administrative
proceedings in its de novo review: (1) the new violation relating
to Smith raised by the Division for the first time after trial and (2)
the additional violation relating to Albert that the district court
recognized, sua sponte, for the first time after trial.
¶21 Our supreme court has held that in “an action for judicial
review of final agency action, . . . unpreserved claims are
foreclosed.” Friends of Great Salt Lake v. Utah Dep’t of Nat. Res., 2017
20210362-CA 8 2023 UT App 45Heath v. Consumer Protection
UT 15, ¶ 60, 393 P.3d 291. “Only those issues that were brought to
the factfinder’s attention at the administrative level may be
litigated in the de novo review in the district court.” Taylor-West
Weber Water Improvement Dist. v. Olds, 2009 UT 86, ¶ 12, 224 P.3d
709; accord Friends, 2017 UT 15, ¶ 58. As “review implies an analysis
of the claims and defenses raised in the proceeding under
review,” the “failure to preserve . . . claims . . . is accordingly
preclusive of [an] attempt to assert them in an amended
complaint.” Friends, 2017 UT 15, ¶ 59.
¶22 With regard to the Smith violation, the district court
granted the Division’s request “to amend its administrative
citation to conform to proof after trial pursuant to” rule 15 of the
Utah Rules of Civil Procedure. See generally Utah R. Civ. P. 15(b)(1)
(permitting a party to amend its pleadings “to conform them to
the evidence and to raise an unpleaded issue”). While we question
whether rule 15 could appropriately be used to amend the
original administrative citation, any error in amending the
citation was harmless in light of the fact that the district court
found this violation as an “alternative” to its determination that
Heath knowingly charged Smith for repairs to which he did not
previously agree in violation of Utah Code section 13-11-4(2)(r),
an allegation that was raised and adjudicated during the
administrative proceedings.
¶23 As to the court’s sua sponte determination that Heath
violated Utah Code section 13-11-4(2)(b) by knowingly
misrepresenting to Albert that the shocks were “the exactly right
shock” for his trailer, we agree with Heath that such a
determination was beyond the scope of the court’s authority.
Because this violation was neither contained in the administrative
citation nor considered in the administrative proceedings, it could
also not be considered in the first instance in the district court.
Thus, we vacate the court’s findings and conclusions regarding
this violation and direct it, on remand, to assess whether the
absence of this violation affects its ruling as to the appropriate fine
to impose.
20210362-CA 9 2023 UT App 45Heath v. Consumer Protection
B. Mens Rea Evidence
¶24 Continuing with its assertion that de novo review must be
limited to issues raised in the underlying administrative
proceeding, Heath also argues that the district court should not
have considered any evidence of its knowledge or intent to violate
the Division’s regulations or the UCSPA. Heath maintains that the
Division’s administrative citations did not plead, and argument
in the administrative proceedings did not preserve, the
knowledge or intent element in the course of administrative
review and, instead, the Division “vehemently argued that
knowledge or intent was not required for Rule violations.” Heath
therefore asserts that any argument regarding the knowledge or
intent element for each violation was not preserved for the district
court’s review.
¶25 But the fact that the Division took the position that proof of
knowledge or intent was not required for certain violations does
not mean that the issue of whether Heath had the necessary mens
rea was unpreserved or inadequately pleaded. “An issue is
preserved by presenting it to the [tribunal] in such a way that the
[tribunal] has an opportunity to rule on that issue.” Fort Pierce
Indus. Park Phases II, III & IV Owners Ass’n v. Shakespeare, 2016 UT
28, ¶ 13, 379 P.3d 1218 (quotation simplified). Moreover, the
adequacy of a pleading depends not on the use of “magic words
. . . in the pleadings” but on “whether the [tribunal] and the
parties were aware of the issues involved.” Jones, Waldo, Holbrook
& McDonough v. Dawson, 923 P.2d 1366, 1374 (Utah 1996)
(quotation simplified).
¶26 In ruling on Heath’s argument that any evidence of
knowledge or intent should be disregarded, the district court
found that “[w]hile the Division did not use the words
‘knowingly or intentionally’ in its administrative citations when
alleging the separate counts . . . , the administrative citations
alleged, in sufficient detail, the specific conduct comprising the
alleged violations and the knowing or intentional conduct.” The
court also found that Heath “raised the issue of knowledge and
20210362-CA 10 2023 UT App 45Heath v. Consumer Protection
intent with respect to all violations at the administrative hearings,
such that the issue was fully presented and briefed multiple times
at the administrative level by both parties.” Heath does not
challenge this finding by the district court or point us to any
evidence of knowledge and intent provided to the district court
that was not presented to the ALJ and the Department of
Commerce. Thus, we have no basis to conclude that the district
court erred in considering evidence of Heath’s knowledge and
intent on de novo review.
II. Express Authorization
¶27 Heath next argues that the district court erred by
concluding that a supplier violates rule R152-11-5(A)(1) of the
Utah Administrative Code when it does not obtain a customer’s
express authorization prior to performing repairs. “We review
administrative rules in the same manner as statutes. Therefore, we
interpret the rule as a whole, giving effect to each word, and
harmonizing the various parts wherever possible.” Dorsey v.
Department of Workforce Services, 2012 UT App 364, ¶ 12, 294 P.3d
580 (quotation simplified), aff’d, 2014 UT 22, 330 P.3d 91.
¶28 Rule R152-11-5(A)(1) states that it is “a deceptive act or
practice” to “[f]ail to obtain the consumer’s express authorization
for repairs, inspections, or other services.” Utah Admin. Code
R152-11-5(A)(1). It further requires that the authorization “be
obtained only after the supplier has clearly explained to the
consumer the anticipated repairs, inspection or other services to
be performed, the estimated charges for those repairs, inspections
or other services, and the reasonably expected completion date of
such repairs, inspection or other services to be performed.” Id.Finally, for any services over $50, “a transcript or copy of the
consumer’s express authorization shall be provided to the
consumer on or before the time that the consumer receives the
initial billing or invoice.” Id. “Express authorization” is defined as
“a written agreement signed [or electronically authorized] by the
consumer.” Id. R152-11-1(B)(3).
20210362-CA 11 2023 UT App 45Heath v. Consumer Protection
¶29 Heath asserts that so long as it obtains a customer’s express
authorization at the same time it provides an invoice for services,
it has complied with rule R152-11-5(A)(1) and that it need not
obtain express authorization prior to completing services.
However, we agree with the district court that this reading of the
rule is inconsistent with its language and that the rule should
instead be read to require a customer’s express authorization
prior to the time repairs begin.
¶30 By its plain language, the rule requires a supplier to obtain
the express authorization “after the supplier has clearly explained
to the consumer the anticipated repairs, inspection or other
services to be performed, the estimated charges for those repairs,
inspections or other services, and the reasonably expected completion
date of such repairs, inspection or other services to be performed.”
Id. R152-11-5(A)(1) (emphasis added). This emphasized language
suggests that the customer will provide the authorization before
services are completed. Otherwise, there would be no need to
inform the customer of the anticipated services and repairs, the
estimated cost, or the expected completion date; if the customer
provides express authorization after services are complete, then
this information would already be known. As the district court
correctly noted, if the repairs have already been performed, they
“would no longer be ‘anticipated,’ the completion date would no
longer be ‘expected,’ and the charges would be known rather than
‘estimated.’” Further, the rule’s language requiring that the
customer be provided with “a copy” of their express
authorization on or before the time they receive their invoice
suggests that the express authorization is something that would
be given prior to the services being performed rather than
something the customer would receive and sign
contemporaneously with receiving an invoice.
¶31 Notably, the following subsection of the rule also makes it
a deceptive practice not to obtain express authorization “for
additional, unforeseen, but necessary, repairs, inspections, or
other services” amounting to 10% or more of the original estimate.
Id. R152-11-5(A)(2). If all that was needed for an express
20210362-CA 12 2023 UT App 45Heath v. Consumer Protection
authorization was final approval after all services are completed,
there would be no need to require intermediate approval for
additional repairs exceeding the initial estimate.
¶32 Having reviewed the language of the rule, we conclude
that the only reasonable interpretation is that it requires suppliers
to obtain express authorization prior to performing services.
Accordingly, the district court did not err in determining that
Heath’s knowing failure to obtain such authorization from
Anderson, Wagner, and Smith violated rule R152-11-5(A)(1).
III. Mens Rea
¶33 Heath’s next argument concerns the mens rea required for
a violation of rule R152-11-5(A)(10). This rule prohibits
“[i]ntentionally understat[ing] or . . . materially [misstating] the
estimated cost of repairs, inspections, or other services.” Utah
Admin. Code R152-11-5(A)(10). While the district court found that
Heath committed three such violations with respect to Anderson,
Wagner, and Smith, 3 the court found that it did so “knowingly.”
The Division concedes that “the district court stated the wrong
mens rea standard.” We therefore vacate the district court’s
conclusions regarding Anderson and Wagner and remand for the
limited purpose of allowing the court to reassess the Division’s
allegations under the appropriate standard and determine
whether Heath’s misstatements to Anderson and Wagner were
intentional.
3. The district court’s finding that Heath “knowingly materially
misstated the estimate of the cost of repairs to Smith’s vehicle . . .
by giving an estimate for only half the vehicle without clearly
informing Smith that this was only a half estimate” was an
alternative to the court’s finding that Heath knowingly charged
Smith for repairs to which Smith did not previously agree. See
supra ¶¶ 12, 22. Because we affirm that alternative finding, our
limited remand does not require the court to reassess the alleged
rule R152-11-5(A)(10) violation relating to Smith.
20210362-CA 13 2023 UT App 45Heath v. Consumer Protection
IV. Challenges to Factual Findings
¶34 Heath next challenges the district court’s findings that its
employees knowingly made misrepresentations when they told
Albert (1) that his trailer was in a dangerous condition and (2) that
the shocks were a custom order. However, these challenges
amount merely to a rearguing of the evidence presented at trial
and do not demonstrate that the district court clearly erred.
¶35 “A trial court’s factual determinations are clearly
erroneous only if they are in conflict with the clear weight of the
evidence, or if this court has a definite and firm conviction that a
mistake has been made.” Kimball v. Kimball, 2009 UT App 233,
¶ 14, 217 P.3d 733 (quotation simplified). “A party who fails to
identify and deal with supportive evidence will never persuade
an appellate court to reverse under the deferential standard of
review that applies to factual findings.” Eskelsen v. Theta Inv. Co.,
2019 UT App 1, ¶ 40, 437 P.3d 1274 (quotation simplified).
¶36 Here, Heath merely identifies the evidence that supports
its assertion that Albert’s broken shocks did in fact present a
dangerous condition and that identifying the shocks as a custom
order was not a misrepresentation. It does not deal with the
contrary evidence on which the district court relied.
¶37 With respect to the safety representation, the district court
cited evidence that shocks are not necessary for a trailer’s safety
and that a broken shock can be removed rather than replaced.
Based on this evidence, the district court found that “Albert’s
trailer did not require replacing the shocks to remedy a dangerous
condition,” contrary to the representations of Heath’s employees,
and that Heath’s employees falsely told Albert “the trailer was
unsafe without new shocks” because they “had a financial
incentive . . . to instill in the potential customer a sense of urgency
to have repairs done at Freeway Tire, because Freeway Tire paid
mechanics only on commission.” The evidence was sufficient to
support a determination that Heath’s employees misrepresented
to Albert that his trailer was unsafe.
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¶38 With respect to the “custom order” representation, the
court acknowledged that there was conflicting evidence about the
meaning of custom or special order. Both Albert and his expert
testified that they considered “special order” to mean something
that was not readily available in stores. The court rejected the
testimony of Heath’s expert and Mr. Heath regarding their
understanding of special order because it did not consider their
definition to be consistent with how “a reasonable consumer
would understand that term.” The court found that Heath’s
employee “made the representation to quell Albert’s hesitance
and surprise at the high price of the shock and to convince Albert
the shocks were worth their hefty price.” The evidence was
sufficient to support the district court’s determination that the
employee had represented to Albert that the shocks were
“available . . . for a reason that does not exist,” see Utah Code § 13-
11-4(2)(d), or were “of a particular standard, quality, grade, style,
or model” when they were not, see id. § 13-11-4(2)(b).
¶39 Because the evidence was sufficient to support the district
court’s findings that Heath’s employees made misrepresentations
about the dangerousness of Albert’s trailer and whether the
shocks were “custom order,” we affirm the district court’s
findings on those points.
V. Supplier
¶40 Finally, Heath argues that Mr. Heath, personally, could not
be considered a “supplier” under Utah Code section 13-11-3(6) 4
and therefore could not be held personally liable for any
violations committed by the Heath companies. While this
argument implicates interesting questions relating to piercing the
4. The Utah Code defines a supplier as “a seller, lessor, assignor,
offeror, broker, or other person who regularly solicits, engages in,
or enforces consumer transactions, whether or not he deals
directly with the consumer.” Utah Code § 13-11-3(6).
20210362-CA 15 2023 UT App 45Heath v. Consumer Protection
corporate veil and the personal liability of an owner, we
ultimately conclude that it is inadequately briefed.
¶41 Heath’s entire argument consists of a single paragraph
asserting that there was no evidence that Mr. Heath acted in his
individual capacity or that he was even present for most of the
transactions. While Heath mentioned issues regarding corporate
officer immunity and piercing the corporate veil in its reply brief
and at oral argument, it did not develop any arguments relating
to these concepts in its opening brief on appeal. See generally
Porenta v. Porenta, 2017 UT 78, ¶ 33, 416 P.3d 487; Coleman v.
Stevens, 2000 UT 98, ¶ 9, 17 P.3d 1122. Because Heath’s arguments
regarding the supplier issue are inadequately briefed, we decline
to address this issue. See State v. Thomas, 961 P.2d 299, 304 (Utah
1998) (“It is well established that a reviewing court will not
address arguments that are not adequately briefed.”).
CONCLUSION
¶42 We agree with Heath that the district court, in the context
of a review of administrative proceedings, did not have the
authority to find a violation sua sponte. Accordingly, we vacate
the district court’s finding of a violation based on
misrepresentations to Albert that the shocks were “the exactly
right shock” for his trailer.
¶43 We also agree with Heath that the district court did not
apply the correct mens rea standard in finding violations of rule
R152-11-5(A)(10). Accordingly, we vacate the district court’s
rulings regarding violations related to the cost of repairs for
Anderson’s vehicle and Wagner’s vehicle, and we remand those
counts to the district court for determination of whether the
estimates were intentionally misstated.
¶44 On remand, the district court should reassess the
appropriateness of the $20,000 fine it originally imposed in light
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of the vacated sua sponte finding and its revised findings
regarding the rule R152-11-5(A)(10) violations.
¶45 We affirm the district court in all other respects. Its
alternative finding based on its amendment of the citation was
harmless, and it was not beyond the scope of the court’s authority
to consider evidence of knowledge and intent relating to the
alleged violations. The district court correctly interpreted the
express authorization provision of rule R152-11-5(A)(1), and its
factual findings regarding misrepresentations made by Freeway
Tire employees were supported by the evidence and not clearly
erroneous. And Heath’s arguments regarding whether Mr. Heath
was a supplier were inadequately briefed.
20210362-CA 17 2023 UT App 45