Water Conservancy District v.Washington Townhomes ( 2024 )

2024 UT App 55THE UTAH COURT OF APPEALS
WASHINGTON COUNTY WATER CONSERVANCY DISTRICT,
Appellant,
v.
WASHINGTON TOWNHOMES, LLC; HOMES BY HARMONY, INC.;
COTTON MEADOWS, LLC; SALISBURY DEVELOPMENT, LLC;
SOUTHERN UTAH HOME BUILDERS ASSOCIATION; IVORY SOUTHERN,
LLC; PERRY HOMES UTAH; AND HENRY WALKER CONSTRUCTION OF
SOUTHERN UTAH, LLC,
Appellees.
Opinion
No. 20220403-CA
Filed April 11, 2024
Fifth District Court, St. George Department
The Honorable Jeffrey C. Wilcox
No. 130500465
Robert C. Keller, Scott P. Powers, Nathanael J.
Mitchell, and Melinda K. Bowen,
Attorneys for Appellant
Benson L. Hathaway Jr., Justin W. Starr, Adam D.
Wahlquist, Craig M. Call, and Thomas K. Checketts,
Attorneys for Appellees
JUDGE MICHELE M. CHRISTIANSEN FORSTER authored this Opinion,
in which JUDGES GREGORY K. ORME and DAVID N. MORTENSEN
concurred.
CHRISTIANSEN FORSTER, Judge:
¶1 This case involves a dispute between the Washington
County Water Conservancy District (the District) and a class of
property owners over the legality of impact fees that has lingered
in litigation for over a decade. The District appeals the district
court’s appointment of a special master to resolve all remaining
Washington Conservancy v. Washington Townhomes
issues in this lengthy lawsuit. The plain language of rule 53(b) of
the Utah Rules of Civil Procedure permits referral to a special
master where the case is to be tried before the bench “only upon
a showing that some exceptional condition requires it.” Here, the
district court exceeded its discretion in determining that certain
conditions allowed for the appointment of a special master.
Accordingly, we reverse the district court’s order of reference.
BACKGROUND
¶2 In 2006, to fund the construction of its facilities and
infrastructure, the District adopted impact fees based on its
“Regional Water Capital Facilities Plan and Impact Fee Analysis.”
For nearly ten years, the impact fees were charged to the owners
of new developments (collectively, Property Owners) located
within the District.
¶3 After the District collected and expended millions of
dollars of fees, Property Owners sued the District in 2013, alleging
the impact fees did not comply with Utah’s Impact Fee Act (the
Act), see Utah Code §§ 11-36a-201 to -205, and sought a refund of
millions of dollars for improperly assessed fees. Over the course
of several years of litigation, the parties engaged in substantive
and procedural motion practice (including several partial
summary judgment motions that limited Property Owners’
claims), addressed the issue of class certification, and conducted
and completed fact and expert discovery. While still considering
multiple motions to further limit the evidence and claims at trial
and the appointment of a class administrator were still pending,
Property Owners sought the appointment of a special master to
preside over the litigation and to “do all acts and take all measures
necessary or proper for the efficient resolution of this dispute.”
Property Owners argued that appointment of a special master
was justified because the case involves “esoteric issues related to
[the Act’s] application to [the District’s] determination,
20220403-CA 2 2024 UT App 55Washington Conservancy v. Washington Townhomes
assessment and collection of impact fees from 2006 through 2017.”
According to Property Owners, resolution of such issues would
require expert testimony from “several witnesses”; “receiving
and processing information drawn from hundreds of thousands
of pages of documents; and application of a specialized area of
law.”
¶4 The District opposed the motion. It argued that if Property
Owners prevailed, calculating the correct impact fee would be
uncomplicated for a number of reasons. The District first argued
that the same fee would be applied to all those that paid it. Second,
the District argued that the case had been pending since 2013 and
interim rulings had narrowed the trial issues before the court.
Finally, the District reasoned that the remaining issues before the
district court involved evidentiary questions which were
“squarely within the jurisdiction of [the] Court.” Thus, there was
no “exceptional condition or circumstance that would justify such
an extraordinary appointment pursuant to [rule] 53(b).”
¶5 The district court granted the motion and explained in its
ruling,
This Court is of the opinion that the use of a Special
Master would be beneficial to this litigation. Rules
of civil procedure and evidence could be relaxed,
and hearings could be informal. A Rule 53(e)(1) and
(e)(2) report filed by the Special Master along with
findings of fact and conclusions of law would allow
the new Judge to focus his or her attention on said
findings and conclusions; rather than reviewing the
history of the case in preparation for a trial of which
the new judge would have a very limited history.
The Court finds that 1) the pending
retirement of the Judge; 2) the length of the case;
3) the procedural and substantive complexities of
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the case as set forth in [Property Owners’] motion;
and, 4) the almost impossible chance that the case
can be tried before this Judge retires; are exceptional
circumstances that require the appointment of a
special master.
¶6 The court’s order appointed a retired district court judge as
the special master and tasked the master with hearing and
resolving all pending and future motions, holding a trial,
receiving evidence, and providing a report to the court of his
findings of fact and conclusions of law pursuant to rule 53 of the
Utah Rules of Civil Procedure.
¶7 The District filed a petition for interlocutory appeal, which
we granted.
ISSUE AND STANDARD OF REVIEW
¶8 The District asserts that the district court abused its
discretion by appointing a special master. Specifically, it argues
that the reasons the district court used to justify the appointment
are not exceptional conditions within the meaning of rule 53(b) of
the Utah Rules of Civil Procedure. The District also asserts that
the court erred in entering its appointment order without a
hearing or argument.
¶9 We review appointments of a special master for an abuse
of discretion. See Plumb v. State, 809 P.2d 734, 741–43 (Utah 1990)
(discussing that when an issue “does not amount to an
‘exceptional condition’ within the meaning of rule 53(b) that
justifies reference” to a special master, then such reference would
be an abuse of discretion). A district court exceeds its discretion
when the position taken by the court is unreasonable. State v.
Valdovinos, 2003 UT App 432, ¶ 14, 82 P.3d 1167; see also State v.
Irwin, 2016 UT App 144, ¶ 4, 379 P.3d 68. Further, Utah appellate
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jurisprudence has long held that “[a]n error of law by the district
court . . . would be an abuse of discretion.” Goggin v. Goggin, 2011
UT 76, ¶ 26, 267 P.3d 885.
ANALYSIS
I. Rule 53(b) Special Master Reference
¶10 Our rules of civil procedure authorize district courts to
appoint special masters in certain cases. See Utah R. Civ. P. 53(b).
We recognize the scope of discretion afforded to district courts in
considering the reference of a matter to a special master, and thus
the issue presented for our determination on appeal is
straightforward: Did the district court exceed its discretion in
appointing a special master to resolve all the remaining issues in
this yearslong litigation? To answer this question, we must
evaluate whether the district court’s rationale for making a
referral to a special master (i.e., pending retirement, calendar
congestion, and length and complexity of the case) actually
constituted an exceptional condition sufficient under rule 53(b).
¶11 The record is clear that this was a case expected to be tried
before the bench. Relevant to our analysis here, rule 53 provides
in part,
(b) Reference. A reference to a master shall be the
exception and not the rule. In actions to be tried by
a jury, a reference shall be made only when the
issues are complicated; in actions to be tried without
a jury, save in matters of account, a reference shall,
in the absence of the written consent of the parties,
be made only upon a showing that some exceptional
condition requires it.
(c) Powers. . . . . When a party so requests, the master
shall make a record of the evidence offered and
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excluded in the same manner and subject to the
same limitations as provided in the Utah Rules of
Evidence for a court sitting without a jury.
....
(e) Report.
....
(2) In non-jury actions. In an action to be tried
without a jury the court shall accept the master’s
findings of fact unless clearly erroneous. Within 14
days after being served with notice of the filing of
the report any party may serve written objections
thereto upon the other parties. Application to the
court for action upon the report and upon objections
thereto shall be by motion and upon notice as
prescribed in Rule 6(d). The court after hearing may
adopt the report or may modify it or may reject it in
whole or in part or may receive further evidence or
may recommit it with instructions.
....
(4) Stipulation as to findings. The effect of a master’s
report is the same whether or not the parties have
consented to the reference; but, when the parties
stipulate that a master’s findings of fact shall be
final, only questions of law arising upon the report
shall thereafter be considered.
Utah R. Civ. P. 53.
¶12 There is scarce Utah caselaw interpreting what constitutes
an “exceptional condition” sufficient to satisfy Utah’s rule 53(b)
requirement. More than thirty years ago, in Plumb v. State, 809
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P.2d 734 (Utah 1990), our supreme court had occasion to consider
the propriety of the appointment of a special master to determine
the amount of an attorney fees award in a class action case arising
from the savings and loan crisis. 1 Id. at 736. Yet the Plumb opinion
does not disclose the basis upon which the district court relied in
making the reference in the first place. On appeal in Plumb, class
counsel challenged the district court’s reduction of the attorney
fees award entered in accordance with the recommendations of
the special master. Id. at 740. The opinion is silent as to whether
class counsel objected or otherwise resisted the reference to a
special master prior to the master issuing his first report. It
appears that only after the filing of the special master’s third
report did counsel move to vacate the appointment. Id. at 737. In
any event, relying on the plain language of rule 53(b), counsel
argued, in part, that the district court abused its discretion in
referring the issue of attorney fees to a special master because “the
issue of attorney fees does not amount to an ‘exceptional
condition’ within the meaning of rule 53(b) that justifies reference
. . . to a master.” Id. at 741.
¶13 Our supreme court rejected counsel’s position, finding that
the terms of rule 53(b) do not categorically prohibit reference of
certain issues to a special master. See id. Instead, the court declared
that the “preferred way to determine whether an issue . . . is
appropriate for reference to a special master is . . . to consider the
facts underlying the referred issue to determine whether they
constitute an ‘exceptional condition.’” Id. Then, in applying this
rule to the facts, the Plumb court did not ultimately speak in terms
of an exceptional condition, but instead concluded, “Given the
size of the fee requested and the numerous legal and factual issues
1. The savings and loan crisis refers to a large scale event in the
1980s where more than a thousand savings and loan associations
in the United States failed. Courtney v. Halleran, 485 F.3d 942, 943–
44 (7th Cir. 2007).
20220403-CA 7 2024 UT App 55Washington Conservancy v. Washington Townhomes
to be considered, we think the attorney fees issue in the case is
complex enough[2] to warrant referral to a special master.” Id. at
741–42.
¶14 The Plumb court then went on to catalogue all the ways that
the special master had exceeded the reference order, finding that
“the entire mode of proceeding followed by the master was
improper as a matter of law.” Id. at 742. But mode of proceeding
is not appointment, and the opinion provides no guidance on
when to appoint a special master.
¶15 Given this backdrop, we find Plumb difficult to apply.
Certainly, the case cannot be read to invite district courts to
wholly ignore the plain language of rule 53, which allows
reference only when an exceptional condition exists: “A reference
to a master shall be the exception and not the rule.” Utah R. Civ.
P. 53. And cases where reference is appropriate must still be the
exception, not the rule—otherwise the “exceptional condition”
exception might become so large as to swallow up the
requirements of the rule. Given these concerns, the “complex
enough” standard must be understood in the context of that
specific case. As such, we conclude that Plumb is limited to its facts
involving 17,000 discrete accounts of differing amounts and a
2. There are a number of ways to read the “complex enough”
verbiage in Plumb. One could conclude that our supreme court
inadvertently applied the standard applicable to matters to be
tried before a jury—whether an action is “complicated”—or one
could construe Plumb to hold that because the issue before the
court was complex enough, the facts and circumstances of that
case themselves constituted an exceptional condition. Of course,
we assume our supreme court applied the correct aspect of rule
53, and so we construe the decision in Plumb as the court applying
the exceptional condition standard.
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factual review of the attorney fees that were being claimed. Id. at
736.
¶16 With this assessment of Plumb, we proceed to examine the
reasons the district court gave for its reference to the special
master and consider whether the district court exceeded its
discretion in concluding that an exceptional condition required
the reference. While the Plumb opinion is silent about the district
court’s reasoning in making the reference of the special master
there, here we have written rulings reflecting the reasoning of the
district court.
II. Application to This Case
¶17 We now turn to the District’s argument that the district
court’s referral to a special master in this case was an abuse of
discretion. For the reasons that follow, we conclude that each of
the district court’s stated reasons for referring the case either
weigh against reference to the special master or are legally wrong.
Accordingly, we determine that the district court exceeded its
discretion in making a reference and we consider each of the
district court’s stated reasons to justify the appointment in turn.
A. Judicial Retirement
¶18 The district court judge indicated that his fast-approaching
retirement and the fact that he saw “no possible way this case can
be tried before” he retired qualified as an exceptional condition
under rule 53(b) and warranted the appointment to ensure that
some judicial officer would have an understanding of the case and
to help a newly appointed district court judge get up to speed:
A rule 53(e)(1) and (e)(2) report filed by the Special
Master along with findings of fact and conclusions
of law would allow the new Judge to focus his or her
attention on said findings and conclusions; rather
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than reviewing the history of the case in preparation
for a trial of which the new judge would have a very
limited history.
¶19 We do not view a judicial retirement as an exceptional
condition under rule 53(b). First, judges retire (or are reassigned)
with regular frequency. Sending cases to a special master because
of a pending retirement would hardly highlight a case as an
exception and not the rule. Second, reference to a special master
will in no way bring a more efficient resolution to the case as
opposed to a newly assigned judge. In fact, a new successor judge
would be in the same position as a special master.3 Both will have
to get up to speed on this yearslong case, review all the prior
rulings, rule on the pretrial motions, and ultimately make factual
determinations and legal rulings. The special master would do
work identical to any new judge assigned to this case, with two
important exceptions: the special master would charge the parties
for his work 4 and the district court will still need to potentially
3. We recognize that in limited circumstances, special masters
may have training or experience that make them uniquely
qualified to oversee a complicated matter or set of proceedings.
That does not appear to be the case here where the special master
designated by the district court is a retired district court judge.
4. Rule 53(a) requires the court to fix the special master’s rate of
compensation and assign responsibility for payment. See Utah R.
Civ. P. 53(a) (“The compensation to be allowed to a master shall
be fixed by the court, and shall be charged upon such of the
parties . . . as the court may direct.”). Here, the district court’s
order provides that the special master “be compensated for his
time at the rate of $350 per hour, and $175 per hour for any time
required for traveling.” The order further provides that the parties
should bear equally the costs and fees of the special master as well
as “the logistical costs of trial.” The District recognizes that
(continued…)
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review findings of fact for clear error and address legal issues de
novo.
¶20 In reality, as rule 53(e)(2) establishes, the reference to a
special master would delay resolution of a case in the procedural
posture of this one. While this litigation has been protracted, in
many ways it sits on the cusp of actually being tried. Reference to
a special master would result in a special master report, which
would then be subject to the objections of the parties. If any party
objects to the factual findings of the special master, the district
court would need to review those findings for clear error. See Utah
R. Civ. P. 53(e)(2). In fact, even if the parties stipulate to the special
master’s findings of fact being final, “questions of law arising
upon the report shall thereafter be considered” by the court. Id. R.
53(e)(4). We acknowledge that in a truly thorny fact-bound case,
reference to a special master may be an efficient use of resources
to take a laboring oar in the development of a factual record. But
that is not the case here because the factual record is already
fulsomely developed.
¶21 And the review of legal conclusions—even “esoteric issues
related to [the Act’s] application to [the District’s] determination,
assessment and collection of impact fees”—will be another story
completely. If the real nub of a case is found in the determination
of legal issues, such as the interpretation of the law, reference to a
special master will provide little to no net benefit in most cases.
After all, unlike factual findings, the special master’s legal
conclusions are accorded no deference, and the district court’s
delayed consideration of those identical issues will ultimately
have to take place in the same way that they would have occurred
reference to a special master is expensive and can increase the cost
of the litigation and has the potential to “increase the time and
expense necessary to resolve this case,” but it does not specifically
challenge the amount of compensation to be paid to the special
master.
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had the reference never been made. Indeed, even in those cases
where the parties stipulate that the special master’s findings of
fact shall be final, a review of questions of law remains. See id.¶22 In sum, a pending judicial retirement and the inability to
bring a case to trial before that retirement are not exceptional
conditions.
B. Length of the Case
¶23 The district court ruled that the long pendency of this case
qualified as an exceptional condition under rule 53(b) and
warranted the appointment of a special master, noting,
There have been numerous motions and pleadings
filed and ruled on throughout this now 9 year old
litigation. The case has already been to the Utah
Supreme Court, and sent back by that Court for
further discovery and evidentiary findings.
Recently the case has been expanded to a Rule 23
class action.
¶24 This rationale is equally unpersuasive and problematic.
Many cases that come before our district courts have been
litigated for a long time; this does not make them exceptional
under rule 53(b). It is the role of our district courts to hear and
resolve such cases, not to outsource them. After all, rule 53(b)
requires that an order of reference “be the exception and not the
rule.” We hold that the fact that a case has been pending for a long
time will most likely not present an exceptional condition.
“Simply put, if every case is ‘exceptional,’ then no case is.” In re
Orsak, No. 01-21-00481-CV, 2022 WL 3649365, at *7 (Tex. App.
Aug. 25, 2022).
¶25 Moreover, as the District points out, “there is no reason to
believe that the appointment of a special master will expedite this
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case.” After all, the district court’s reference order indicates that
any final resolution of the case will be by the new judge after a
report and recommendation is received from the special master.
The District asserts, and we agree as outlined above, that this
means the parties will have to litigate and brief the trial issues
twice. As we highlight, referral to a special master here appears to
create an additional layer of decision-making before this lengthy
litigation can be resolved.
¶26 Finally, the case was far into litigation by the time of the
court’s referral. Indeed, the case appears to be on the cusp of
resolution via trial. Before the motion for reference to a special
master was filed, fact and expert discovery had been completed.
The district court had set a deadline for dispositive motions and
motions to exclude experts. The parties had filed numerous
motions, including motions in limine to restrict certain witness
testimony. It was only at this point in the litigation that a special
master was sought. Under the particular circumstances of this
case, the length of the litigation, if anything, counsels against
reference to a special master.
¶27 Accordingly, the district court exceeded its discretion in
considering this fact as an exceptional condition under the rule.
C. Court Calendar Congestion
¶28 The district court also concluded that because the court
was still dealing with a backlog of cases caused by the COVID-19
pandemic, which had the potential to postpone civil trials, that
fact justified the appointment of a special master. We recognize
that in a general sense, the COVID-19 pandemic was an
extraordinary and (hopefully) nonrecurring event that certainly
produced an inordinate backlog of criminal and civil trials in
courts throughout the State of Utah. But this concern is in no way
particular to this case. Under this logic, the entirety of the district
court’s civil case load would be ripe for reference to a special
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master. Whatever “some exceptional condition,” see Utah R. Civ.
P. 53(b), might ultimately mean, it has to refer to something
endemic to the specific action in question. After all, if the
“exceptional condition” is a circumstance characteristic of every
action on a court’s calendar, then that condition is not exceptional;
instead, it is normal. And rule 53(b) does not allow for overarching
concerns affecting every case to form the basis for calling in a
special master; doing so would make having special masters the
rule rather than the exception.
¶29 Further, even while the district court here was considering
this motion, we understand that significant resources were being
expended to employ senior judges to help alleviate as much of the
backlog as possible. The assignment of this case to a senior judge,
as opposed to reference to a special master, would bring at least
two obvious benefits advising significantly against reference to a
special master: first, a senior judge acts as the assigned judge and
would not add a layer of review and, second, a senior judge
would come at no cost to the parties. 5
¶30 Accordingly, the need to relieve a backlog of pending cases
is not an exceptional condition.
D. Relaxed Rules of Procedure and Evidence
¶31 In its order granting Property Owners’ motion for
reference to a special master, the district court noted this as a
reason to grant the motion: “Rules of civil procedure and evidence
could be relaxed, and hearings could be informal.” This is simply
legally wrong. And our case law is clear that legal
misinterpretation is, by definition, an abuse of discretion. See
Goggin v. Goggin, 2011 UT 76, ¶ 26, 267 P.3d 885 (“An error of law
5. We note the irony that in this particular case, the person
ultimately selected to serve as the special master also acted on
occasion as a senior judge.
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by the district court . . . would be an abuse of discretion.”). Rule
53(c) expressly provides that the powers of the special master
shall be “subject to the same limitations as provided in the Utah
Rules of Evidence.” Utah R. Civ. P. 53(c). Accordingly, the
reasoning of the district court was based, in part, on a
misinterpretation of the applicable law. 6
E. Complexity of the Law versus Complexity of the Facts
¶32 For two reasons, it does not appear that this case presents
“enough complexity” to warrant reference to a special master.
First, on the record before the district court—although class
certification had recently occurred—the number of claimants had
not yet been identified; this circumstance stands in stark contrast
to the 17,000 discrete accounts that formed the basis for the
attorney fees review in Plumb v. State, 809 P.2d 734, 736 (Utah
1990). Second, and far more importantly, unlike in the facts in
Plumb where the amount in question depended on a review of
thousands of accounts, the claims here are homogenous—the fee
at issue is common to all claimants. Therefore, the amounts of the
claims do not constitute a complexity.
¶33 Neither the Property Owners in their motion below, nor
the district court in its order, identifies any specific “procedural
and substantive complexities of the case” that one could
characterize as an exceptional condition requiring the
appointment of a special master. It is true that Property Owners
argued below, and now argue on appeal, that the Act is complex
and convoluted, and that resolution of the dispute will require the
application of specialized law and the testimony of many experts.
6. We acknowledge that when the court later appointed a specific
special master, it expressly indicated that the Utah Rules of
Evidence would apply. This course correction does not change the
reality that when deciding whether to make a reference in the first
place, the district court misapprehended the law.
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But as we have already explained, the legal complexity, whether
of statutory or common law, weighs against reference to a special
master, as such issues will ultimately be determined by the district
court in any event. On the factual side of the ledger, there is
nothing in the record to support a conclusion that this case is any
more factually complex than many of the civil cases found on the
dockets of our courts. Where the significant complexities are in
the legal issues presented, and not particularly in the factual
determinations to be made, a case is simply not “complex
enough.” Simply put, hard legal questions alone cannot equate to
an exceptional condition. After all, addressing hard legal
questions is the normal course of business of our courts; it is what
they were created to do.
¶34 Again, legal complexity and uncomplicated factual
determinations counsel against reference to a special master and
are not an exceptional condition.
CONCLUSION
¶35 After evaluating the district court’s stated reasons for
appointing a special master, we find that the reasons either
strongly weigh against reference to a special master or are simply
wrong under the plain language of the applicable rule. As such,
these considerations cannot constitute an exceptional condition,
and we conclude that the position taken by the district court was
unreasonable. We therefore conclude that the district court
exceeded its discretion in making a reference to a special master
in this case.
¶36 Reversed.
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