West Valley City v. Bret W. Rawson, PC

2021 UT 16IN THE
SUPREME COURT OF THE STATE OF UTAH
WEST VALLEY CITY,
Appellant,
v.
BRET W. RAWSON, P.C., General Counselor and Administrator of
the Utah State Fraternal Order of Police Legal Plan
Appellee.
No. 20190426
Heard November 13, 2020
Filed May 27, 2021
On Appeal of Interlocutory Order
Third District, Salt Lake
The Honorable Andrew H. Stone
No. 150901693
Attorneys:
Stanley J. Preston, Bryan M. Scott, Brandon T. Crowther,
Salt Lake City, for appellant
Nate N. Nelson, Jeremy G. Jones, Sandy, for appellee
ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court, in
which CHIEF JUSTICE DURRANT, JUSTICE HIMONAS, JUSTICE PEARCE,
and JUSTICE PETERSEN joined.
ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:
¶1 This is a civil action for reimbursement of attorney fees
incurred in the successful defense of criminal charges. The
underlying criminal case involved a manslaughter charge against
a West Valley City police officer arising out of conduct in the line
of duty. That charge was dismissed after a preliminary hearing.
The officer assigned his claim to a right of reimbursement of his
attorney fees to Bret W. Rawson, P.C. (―Rawson‖), and Rawson
filed this action seeking reimbursement of reasonable attorney
fees under Utah Code section 52-6-201. This statute provides a
WEST VALLEY CITY v. RAWSON
Opinion of the Court
right of reimbursement of ―reasonable attorney fees and court
costs necessarily incurred‖ in the successful defense of a criminal
charge against a governmental employee arising out of his
employment. UTAH CODE § 52-6-201.
¶2 West Valley City conceded Rawson‘s right to recover fees
under the statute but asserted that the amount of available fees
was limited in two ways. First, the City claimed that a $60,000
donation by a legal defense fund should be subtracted from the
total amount of fees ―necessarily incurred‖ in the defense of the
charge against the officer. Second, the City asserted that the
amount of fees ―necessarily incurred‖ was capped by a flat fee
agreement entered into between the officer‘s defense team and his
counsel. The district court denied the motion, rejecting the City‘s
first argument outright and concluding that summary judgment
could not be entered on the second in light of ambiguities in the
flat fee agreement.
¶3 We agreed to hear the case on interlocutory appeal. While
the case was pending, Rawson submitted a ―partial suggestion of
mootness‖—representing that the underlying flat fee agreement
had been amended by an addendum entered into by the parties to
the original agreement and asserting that the addendum mooted
the parties‘ briefing on the second question presented.
¶4 We affirm in part and remand. On the first issue, we
agree with the district court that the statute does not require
Rawson to subtract the donation made from a legal defense fund
in calculating the ―reasonable attorney fees and court costs.‖ On
the second issue, we highlight important questions the parties
have raised, but recognize that these questions may be informed
by the addendum submitted in the suggestion of partial
mootness, and remand to allow the parties and the district court
to address these questions in the first instance.
I
¶5 While on duty as a West Valley City police officer, Shaun
Cowley was involved in a shooting that resulted in a woman‘s
death. Cowley was charged with manslaughter, and the Utah
State Fraternal Order of Police (FOP) agreed to provide legal
services for his defense.
¶6 The FOP, through its general counsel Bret W. Rawson,
P.C., entered into a Flat Fee Agreement with two attorneys,
Lindsay Jarvis and Paul Cassell, ―for the purpose of providing
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legal defense services‖ for Cowley. In Paragraph 2 of the
Agreement, attorneys Jarvis and Cassell agreed to represent
Cowley for a flat rate of $100,000 if the matter was ―adjudicated
by trial‖ and $35,000 ―if the matter [was] decided by dismissal or
plea agreement as a consequence of the Preliminary Hearing.‖ In
Paragraphs 4 and 5, the agreement identified the attorneys‘
―standard‖ hourly rates—a $250 hourly rate for Jarvis and a $500
hourly rate for Cassell. These paragraphs also stated that the
attorneys had agreed to accept the ―flat fee . . . in view of the
importance of providing a strong defense‖ for Cowley. Finally,
Paragraphs 4 and 5 noted that it was ―understood by the parties
that should any application for attorneys‘ fees awardable against
the State of Utah become available, the circumstances supporting
a flat fee (which produces compensation at less than [the
attorneys‘] hourly rate[s]) would no longer exist.‖ And in that
event, the agreement indicated that the ―attorney‘s fees that
would be sought from the State of Utah would be sought at‖ the
hourly rates identified in the agreement.
¶7 The criminal charge against Officer Cowley was later
dismissed in a preliminary hearing. And this civil case was then
filed in an attempt to recover the costs and fees incurred in the
successful defense of the underlying criminal action.
¶8 The case was filed by Rawson as assignee of Cowley‘s
claim for reimbursement of his attorney fees and costs. Rawson
asserted a statutory claim for a right of reimbursement from West
Valley City under Utah Code section 52-6-201—a provision
establishing a right of an ―officer or employee‖ to recover
―reasonable attorney fees and court costs necessarily incurred in
the defense of‖ a criminal charge ―arising out of any act or
omission‖ of an ―officer or employee during the performance of
the officer or employee‘s duties.‖ UTAH CODE § 52–6–201(1).
¶9 Rawson sought to recover $48,231.97 in costs and
$302,863.13 in attorney fees, with the fee amount calculated on the
basis of the hourly rates identified in the Flat Fee Agreement. The
City conceded its statutory obligation to provide reimbursement
for ―reasonable attorney fees and costs necessarily incurred‖ in
defense of the charge against Cowley. But it contested Rawson‘s
right to recover the full amount of requested attorney fees,
asserting that not all of the fees in question were ―necessarily
incurred‖ under the statute.
¶10 The City moved for partial summary judgment on two
grounds. First, the City noted that FOP had solicited and received
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Opinion of the Court
a $60,000 donation from the Law Enforcement Legal Defense
Fund (LELDF) to support the Cowley defense. Because that
donation had been given with no obligation of repayment, the
City asserted that when computing the fees ―necessarily incurred‖
in the underlying criminal case, the court should subtract the
amount of the donation, because it was money Rawson never had
to pay. Second, the City asserted a right to judgment as a matter of
law under a provision of the Flat Fee Agreement stating that
counsel agreed to accept a ―flat fee‖ for their work in representing
Officer Cowley. The agreed-upon flat fee was a $35,000 payment
in the event of dismissal at the preliminary hearing. And the City
asserted that there was no language in the agreement requiring
Rawson to pay any additional amounts under the attorneys‘
hourly rates. So the City maintained that only the $35,000 flat fee
could be considered an attorney fee ―necessarily incurred‖ under
the terms of Utah Code section 52-6-201(1).
¶11 The district court denied the City‘s motion. On the first
point, the district court concluded that section 201(1) does not call
for an ―offset[]‖ from ―fees otherwise necessarily incurred‖ for
―financial assistance‖ provided by others. In the district court‘s
view, ―‗necessarily incurred‘ does not equal ‗net owing after
contributions.‘‖ ―Rather, these types of donations may be
considered akin to medical benefits paid to a tort victim—they are
a collateral source of payment for injuries incurred.‖ And because
―[n]othing in the record indicates that the LELDF contributions
altered what had been or was to be incurred by Cowley,‖ the
court denied the City‘s motion to the extent it sought a credit for
the $60,000 LELDF donation.
¶12 The district court also rejected the City‘s argument on the
second point. It accepted the City‘s view that the right of
reimbursement of attorney fees under the statute ―is limited to
those fees which are incurred as a result of an obligation which
arises at some point, either contractually or because a benefit was
conferred.‖ But it found that the Flat Fee Agreement was ―as a
whole ambiguous,‖ citing ―internal inconsistencies‖ in certain
paragraphs of the agreement. The district court denied the City‘s
motion on the second point on that basis, concluding that the cited
ambiguity ―necessitat[ed] an inquiry into the parties‘ intent‖ on
whether there was ―a continuing obligation‖ of payment beyond
the flat fee under the agreement.
¶13 We granted the City‘s petition for interlocutory appeal.
After oral argument in this court, Rawson filed a ―suggestion of
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partial mootness,‖ asserting that the intentions of the parties to
the Flat Fee Agreement had been clarified in an ―Addendum‖
signed by Rawson, Jarvis, Cassell, and Cowley. The City opposed
the suggestion of mootness and complained that Rawson was
seeking improperly to expand the record on appeal or to submit a
supplemental brief. It also asked that we deny the suggestion of
mootness and award the City its fees incurred in responding.
II
¶14 The City seeks reversal of the denial of its motion for
summary judgment on two central grounds. It contends that the
district court erred in declining to deduct the $60,000 LELDF
donation from the amount of fees ―necessarily incurred‖ in the
underlying criminal proceeding. And it also asserts that such fees
cannot encompass any amounts beyond the $35,000 flat fee set
forth in the agreement.
¶15 We affirm on the first ground and remand for further
proceedings on the second. In so doing, we note the interlocutory
posture of this appeal and highlight the potential impact of the
material presented by Rawson in the partial suggestion of
mootness.
A
¶16 The City notes that the $60,000 donation from LELDF was
made without any obligation of repayment. And it claims that this
amount accordingly should not count toward the calculation of an
attorney fee ―necessarily incurred‖ in the successful defense of a
criminal charge under Utah Code section 52-6-201(1). Citing case
law, the City also asserts that the purpose of a statute like this one
is to ―make[] the vindicated public employee whole.‖ Salmon v.
Davis Cty., 916 P.2d 890, 896 (Utah 1996). And the City insists that
it would be a ―windfall‖ to allow for recovery of defense fees
covered by a donation from a third party given without any
obligation of repayment. In a case like this one, the City insists
that there is no wrongdoer and thus no basis for application of the
―collateral source rule,‖ or for the district court‘s decision to
analogize the payment here to a collateral payment ―to a tort
victim.‖
¶17 The collateral source rule may not quite apply here for
reasons noted by the City. And we have indeed stated that the
statute is aimed at making employees ―whole.‖ But the question
presented is controlled by the operative text of the governing
statute—not by our equitable sense of how best to make
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Opinion of the Court
employees whole. And the statute makes clear that there is a right
of reimbursement for the full amount of the ―reasonable attorney
fees‖ that were ―necessarily incurred‖ in Officer Cowley‘s defense
in the first instance. UTAH CODE § 52-6-201(1).
¶18 The LELDF donation did not alter the amount of the
―reasonable attorney fees‖ incurred in Officer Cowley‘s defense in
the first instance. As the district court noted, there is no basis in
the record for concluding ―that the LELDF contributions altered
what had been or was to be incurred‖ in the defense. Instead, the
LELDF donation took the form of third-party ―financial
assistance‖ in support of the defense team. Such assistance did not
reduce or alter the amount of fees incurred for Cowley‘s defense
in the first instance—any more than a defendant‘s receipt of
financial support from a relative or friend would do so.
¶19 The City‘s motion for summary judgment failed on this
ground. The LELDF donation did not reduce the amount of the
defense fees incurred in the first instance, and there is thus no
basis for the request that that amount be deducted from the
amount of fees ―necessarily incurred.‖ We affirm the district court
on this basis.
B
¶20 The City also asserts that no amount above the $35,000
flat fee identified in the agreement can count as an obligation of
payment of fees ―necessarily incurred‖ in the Cowley defense. It
contends that it is entitled to judgment as a matter of law on this
point—either because the agreement unambiguously limits the
obligation for payment of fees to the $35,000 amount or because
the condition for any such payment (an application for fees
―awardable against the State of Utah‖) was never triggered. We
stop short of a conclusive resolution in light of the interlocutory
posture of this appeal and the material submitted in the
suggestion of partial mootness.
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¶21 The City complains that the district court erred to the
extent it relied on inconsistencies or ambiguities in provisions not
material to the dispute over the existence of an obligation of
payment beyond the $35,000 fixed fee. It notes, for example, that
the district court highlighted tension between the flat fee
provision of paragraph 2 and the paragraph 5 proviso ―for a
$50,000 flat fee (through a specified date) to be paid to Mr.
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Cassell.‖ And because neither party is seeking to credit the latter
provision over the former, the City contends that this ambiguity is
not a proper ground for opening the door to extrinsic evidence on
the question in dispute—which is whether there is an obligation
of payment beyond the fixed fee.
¶22 The City‘s premise is correct. An alleged ambiguity can
foreclose an interpretation of a contract as a matter of law only if it
suggests that each of two ―proffered alternative interpretations‖
of a given contract provision is ―plausible and reasonable in light
of the language used.‖ Mind & Motion Utah Invs., LLC v. Celtic
Bank Corp., 2016 UT 6, ¶ 24, 367 P.3d 994 (citation omitted). As the
First Circuit explained, ―a party claiming to benefit from
ambiguity (for example, by being allowed to proffer extrinsic
evidence supporting its interpretation)‖ must therefore ―show
ambiguity in the meaning of the agreement with respect to the
very issue in dispute.‖ Donoghue v. IBC USA (Publ’ns), Inc., 70 F.3d
206, 215 (1st Cir. 1995). ―Demonstration of ambiguity in some
respect not material to any existing dispute serves no useful
purpose.‖ Id.¶23 For this reason, it would be error for the court to cite
inconsistencies or ambiguities in contract provisions not in
dispute as a basis for opening the door to extrinsic evidence of
relevance to the matter actually in controversy. To some extent,
moreover, we can see how the City might view the district court‘s
decision as so doing. The district court appeared to cite to some
inconsistencies in provisions not in dispute in support of its
determination of an ambiguity on the matter in question—
whether the parties to the agreement intended an obligation of
payment beyond the $35,000 fixed fee.
¶24 The district court‘s decision, however, ultimately focused
on that point of actual dispute. In denying the City‘s motion, the
district court concluded that the $35,000 cap specified in
paragraph 2 of the agreement could ―be read to limit the payment
of fees, but not the amount that the plaintiff would ultimately be
obligated to pay the attorneys if an application for fees could be
made.‖ And it held that there were genuine disputes ―as to the
plaintiff‘s obligation‖ under the agreement ―and, in turn,‖ on
―what was ‗necessarily incurred‘ under § 52-6-201(1).‖
¶25 The City also challenges that decision on appeal. It notes
that paragraph 2 reflects an agreement ―to pay attorney fees‖ to
defense counsel in the amount of $35,000 ―if the matter is decided
by dismissal or plea agreement as a consequence of the
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Opinion of the Court
Preliminary Hearing‖ and asserts that paragraphs 4 and 5 state
that Jarvis and Cassell agree to ―accept[] a flat fee‖ for their work.
And the City claims that this is the only payment obligation
referred to as such in the agreement.
¶26 The City acknowledges the contingency provisions in
paragraphs 4 and 5 of the agreement—provisions stating that the
―circumstances supporting a flat fee‖ or ―forbearance‖ of charges
at hourly rates ―would no longer exist‖ if an ―application for
attorneys‘ fees awardable against the State of Utah‖ should
―become available.‖ But it asserts that these provisions establish
no requirement of ―payment to Jarvis and Cassell of any
additionally awarded funds‖—―unlike paragraph 2, which
plainly states that FOP ‗agrees to pay‘ the applicable flat fee to
Jarvis and Cassell.‖ ―Since the plain language of Paragraphs 4 and
5 contains no ‗payment‘ language,‖ the City asserts that there is
―no legal obligation to pay Jarvis and Cassell any fees recovered
under‖ those provisions, and thus no basis for treating any
additional fees as ―necessarily incurred‖ under the statute.
¶27 Rawson presents a different view of the contingency
provisions of paragraphs 4 and 5. In context, Rawson asserts that
these provisions ―mak[e] clear that the circumstances supporting
[a] flat fee‖ would ―no longer exist in the event that fees are
sought against the State.‖ If and when such fees were sought,
Rawson contends that the agreement makes clear that ―reasonable
attorney fees would be sought from the State of Utah at the
normal hourly rate‖—a proviso that clearly if implicitly indicates
that ―additional payment obligations‖ would arise in the event of
an application against the state. Because an application for fees
was made ―and the condition subsequent‖ set forth in paragraphs
4 and 5 ―was satisfied,‖ Rawson asserts that there was a
requirement of ―pursuit of fees at the normal hourly rate.‖
¶28 The parties thus advance competing views on the
question whether the agreement contemplates the existence of an
obligation to pay attorney fees beyond the $35,000 flat fee. Yet a
provision of a contract is not rendered ambiguous by the bare
existence of competing interpretations of it. Extrinsic evidence is
called for only where each of the ―proffered alternative
interpretations ‗must be plausible and reasonable in light of the
language used.‘‘‖ Mind & Motion, 2016 UT 6, ¶ 24 (citation
omitted). One of the parties‘ interpretations may be ―ruled out‖ as
unreasonable based on ―the natural meaning of the words in the
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contract provision in context of the contract as a whole.‖ Brady v.
Park, 2019 UT 16, ¶ 55, 445 P.3d 395.
¶29 The City asks us to uphold its interpretation of the
agreement as a matter of law. It asserts that only its interpretation
―effectively harmoniz[es]‖ all of the ―provisions and terms‖ of the
agreement and insists that any amounts requested beyond the
$35,000 flat fee should not count as ―necessarily incurred‖ under
the statute. And it asks us to reverse the district court‘s
determination that there is an ambiguity in the sense of two
alternative, reasonable interpretations of the agreement.
¶30 We decline to resolve this question on the current record
and instead remand for further proceedings on this issue. We do
so in light of the material submitted by Rawson with the
suggestion of partial mootness—the addendum signed by
Rawson, Jarvis, Cassell, and Cowley. The addendum seeks to
―clarify‖ the parties‘ intentions in the Flat Fee Agreement on
questions raised in the briefing and explored by this court at oral
argument. In light of that development, Rawson asks us to decline
to resolve the matters briefed by the parties on this appeal.
¶31 We accept this invitation in light of the interlocutory
posture of this appeal. In so doing, we agree with a threshold
point raised by the City—ordinarily, the record on appeal is
closed and the parties are not permitted to supplement it. But this
case as presented is in an unusual posture. Our jurisdiction in an
interlocutory appeal is discretionary. See UTAH R. APP. P. 5; Salt
Lake Tribune v. State Records Comm., 2019 UT 68, ¶ 11, 456 P.3d 728(explaining that ―[t]he decision to grant a petition to review an
interlocutory order is discretionary‖). We thus retain the
discretion to dismiss such an appeal without weighing in on any
of the questions presented.
¶32 That discretionary power also encompasses the authority
to decide which questions presented in the interlocutory briefing
may properly be resolved on the current record and which
questions should be left for further development on remand. And
in this unusual circumstance we decline to resolve the question
presented on the basis of the district court‘s decision on the
current record, and instead remand to allow further development
in the district court.
¶33 We note that the City has raised objections to the
propriety of the addendum and to its relevance to the questions
presented. Those objections are noted and not resolved by our
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Opinion of the Court
decision. In remanding, we are not overruling the City‘s
objections. We are simply concluding that there is some
possibility that our analysis could be affected by the matters
presented in the addendum, and some wisdom in allowing the
district court to decide the admissibility of the addendum and the
questions it introduces in the first instance.
2
¶34 The City also asks us to reverse the district court on the
ground that the condition for any payment obligation under the
agreement (an application for fees ―awardable against the State of
Utah‖) was simply not triggered in this case. On this point, the
City asserts that there was never any basis for an application for
an award of fees ―against the State of Utah‖ given that Officer
Cowley was a West Valley City employee and thus had a
statutory right of reimbursement only against the City—not ―the
State of Utah.‖
¶35 Rawson has advanced a different view, asserting that the
reference to ―State of Utah‖ encompasses governmental entities
more broadly, including West Valley City. And again, Rawson
asserts that the analysis of this question is informed and may be
altered by the addendum submitted with the suggestion of partial
mootness.
¶36 We decline to resolve this question in light of the
suggestion of partial mootness. Again we are not ruling on the
admissibility or relevance of the addendum submitted by
Rawson. But we remand to allow the parties and the district court
to consider the City‘s objections to the addendum and to decide in
the first instance whether the condition for any payment
obligation was triggered in this case.
III
¶37 We affirm the district court‘s determination that there is
no statutory basis for excluding the $60,000 donation from LELDF
from the calculation of attorney fees ―necessarily incurred‖ under
the statute. We remand for further proceedings on the question
whether any amounts above the $35,000 flat fee identified in the
agreement can count as an obligation of payment of fees
―necessarily incurred‖ in the Cowley defense. And we deny the
City‘s request for its fees incurred in responding to the suggestion
of mootness.
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