Wittingham, LLC v. TNE Ltd. P'ship

This opinion is subject to revision before final
publication in the Pacific Reporter
2018 UT 45IN THE
SUPREME COURT OF THE STATE OF UTAH
WITTINGHAM, LLC; THE MUIR SECOND FAMILY LIMITED PARTNERSHIP
and DOROTHY JEANNE MUIR,
Respondents and Cross-Petitioners,
v.
TNE LIMITED PARTNERSHIP,
Petitioner and Cross-Respondent.
No. 20160805
Filed August 22, 2018
On Certification to the Utah Court of Appeals
Second District, Farmington
The Honorable Robert J. Dale
No. 090700547
Attorneys:
James K. Tracy, Stacy J. McNeill, Brigman Lee Harman,
Salt Lake City, for respondents and cross-petitioners
Jeffrey L. Silvestrini, Bradly M. Strassberg, Salt Lake City,
for petitioner and cross-respondent
CHIEF JUSTICE DURRANT authored the opinion of the Court,
in which ASSOCIATE CHIEF JUSTICE LEE, JUSTICE HIMONAS,
JUSTICE PEARCE and JUSTICE PETERSEN joined.
CHIEF JUSTICE DURRANT, opinion of the Court:
Introduction
¶1 In this case, the plaintiffs asserted various claims against a
number of defendants. The district court addressed these claims in
its August 4, 2014 amended order of final judgment. Both parties
appealed to the court of appeals, which issued a decision. We
granted certiorari to address the merits of this case. But we cannot
do so because we conclude that the district court’s order was not a
final judgment. The court’s order was not a final judgment because
WITTINGHAM v. TNE
Opinion of the Court
the court failed to dispose of the plaintiffs’ civil conspiracy claim
against two defendants—Gavin Dickson and Trump Security, LLC.
Accordingly, we dismiss this appeal for lack of jurisdiction and
vacate the court of appeals’ decision.
Background
¶2 In setting forth the background of this appeal, we limit our
discussion of the “facts necessary to explain our conclusion.”1
¶3 The Muir Second Family Limited Partnership (the Muir
Partnership or Partnership) was organized on December 30, 1993,
and continued until it was administratively dissolved on May 3,
2007. Two years after the dissolution, Nicholas Muir, the former
general partner of the defunct Partnership, entered into a note and
trust deed with TNE on behalf of the Muir Partnership in order to
secure a loan for $435,000. As collateral for the loan, TNE recorded
the trust deed against a pair of apartment buildings owned by the
Partnership. Prior to the execution of the TNE trust deed, Mr. Muir
did not disclose to TNE that the Muir Partnership had been
administratively dissolved.
¶4 He claimed that the loan was necessary to remove an
encumbrance on the apartments, a trust deed, which was secured by
a promissory note owed to Trump Security. In fact, this transaction
was a sham. There was no promissory note nor was there a trust
deed. And the sole member of Trump Security was Gavin Dickson,
who, along with Mario Naujoks, assisted Mr. Muir in his scheme.
¶5 After TNE disbursed the funds, the sham encumbrance was
released and the apartment buildings were transferred between
successive business entities owned by the Muir family, the last being
Wittingham, LLC. Mr. Dickson, acting on behalf of Trump Security,
then directed that the TNE funds be used for purposes that did not
benefit the Partnership. When Mr. Muir’s family discovered the
sham encumbrance and misappropriation of the TNE funds,
Wittingham, LLC, the Muir Partnership, and Dorothy Jeanne Muir
(collectively, Plaintiffs) commenced this action, seeking to have the
TNE trust deed declared void. Plaintiffs also sought to recover
damages from a number of defendants, including TNE, Trump
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1 See DFI Props. LLC v. GR 2 Enters. LLC, 2010 UT 61, ¶ 3, 242 P.3d
781.
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Cite as: 2018 UT 45Opinion of the Court
Security, Mr. Dickson, and Mr. Naujoks, for their alleged roles in the
fraudulent scheme.
¶6 In their complaint, Plaintiffs asserted twenty-five causes of
actions. Of these, Plaintiffs alleged four separate causes of action
against Mr. Dickson and Trump Security—conversion, fraud,
slander of title, and alter ego. They also alleged a civil conspiracy
claim against “[a]ll defendants,” including TNE, Mr. Dickson,
Trump Security, and Mr. Naujoks.
¶7 On July 10, 2012, the district court granted partial summary
judgment in favor of TNE, Bruce J. Malcom, Maureen H. Malcolm,
and Daniel J. Torkelson (collectively, the TNE Defendants) on several
causes of action. Specifically, the court dismissed with prejudice
Plaintiffs’ civil conspiracy cause of action against the TNE
Defendants.2
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2 While the July 10, 2012 order of partial summary judgment uses
broad language in stating that “the Court hereby dismisses with
prejudice Plaintiffs thirteenth [(fraud)], eighteenth [(lack or failure of
consideration)], nineteenth [(constructive trust)], twenty-second
[(civil conspiracy)] and twenty-fourth [(agent liability)] causes of
action,” it is clear that the court did not dismiss these claims as to all
defendants. The only claims presented to and considered by the
court were those pertaining to the TNE Defendants. Because the
district court was asked to decide only claims asserted against the
TNE Defendants, it would be unreasonable to read its broad
language as dismissing claims as to other defendants. This is further
evidenced by the fact that the court later granted judgment in favor
of Plaintiffs against Mr. Dickson and Trump Security on the
Plaintiffs’ fraud cause of action, a cause the court stated it was
dismissing in the July 10, 2012 order. See infra ¶ 9. If the court had
already dismissed these claims as to all defendants in its July 10,
2012 order, it would not have later granted default judgment on
Plaintiffs’ fraud claims against Mr. Dickson and Trump Security.
Additionally, in its amended final order of judgment, the court did
not state that Plaintiffs’ fraud claim was dismissed against all
defendants. Instead, it stated only that Plaintiffs’ “Twenty-Second
Cause of Action [(Civil Conspiracy)] against TNE was previously
DISMISSED WITH PREJUDICE.” So we read the July 10, 2012 order
as dismissing Plaintiffs’ civil conspiracy cause of action only against
the TNE Defendants.
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WITTINGHAM v. TNE
Opinion of the Court
¶8 During the course of the trial, the district court issued a
certificate of default against Mr. Dickson and Trump Security, as
well as a sanction of default judgment against Mr. Naujoks, but
never formally entered an order of default judgment against any of
the three parties until its July 23, 2013 memorandum decision. In that
decision, the court acknowledged that it “ha[d] previously entered
the defaults of [Mr. Dickson and Trump Security] and Mario
Naujoks” and explained that “Plaintiffs presented evidence
regarding their claims against [Mr. Dickson and Trump Security].”
The court concluded that Plaintiffs had “established their entitlement
to an award of actual damages against [Mr. Dickson and Trump
Security] in the amount of $292,500.00 on their claims.”3
¶9 The district court then outlined which of Plaintiffs’ causes of
action it was granting judgment on against Mr. Dickson and Trump
Security. The court granted judgment in favor of Plaintiffs and
against Mr. Dickson and Trump Security on their conversion, fraud,
slander of title, and alter ego causes of action. But the court said
nothing about Plaintiffs’ civil conspiracy cause of action against
Mr. Dickson and Trump Security.
¶10 In the same decision, however, the court apparently did
dismiss the civil conspiracy cause of action against Mr. Naujoks.
There, the court held that Plaintiffs “presented insufficient evidence
on their claims to support judgment against Mario Naujoks.” And so
it dismissed with prejudice “each of Plaintiffs’ Causes of Action
against Mario Naujoks.” Thus, in the July 23, 2013 memorandum
decision, the district court granted default judgment against
Mr. Dickson and Trump Security on all claims except civil
conspiracy, but it refused to grant default judgment against
Mr. Naujoks on all claims brought against him.
¶11 After post-trial proceedings, the district court issued its
August 04, 2014 amended final order of judgment—the operative
final order before us. There, the district court went to great lengths to
dispose of each of the causes of action asserted by the parties before
it. The court walked through all twenty-five causes of action brought
by Plaintiffs. It reiterated its holding in its July 23, 2013
memorandum decision—that Plaintiffs’ conversion, fraud, slander of
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3 It also concluded that “an award of punitive damages against
[Mr. Dickson and Trump Security] in the amount of $292,500.00 is
appropriate under the circumstances as a result of their fraud.”
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title, and alter ego causes of action against Mr. Dickson and Trump
Security were granted in the amount of $585,000 (compensatory plus
punitive damages). But on Plaintiffs’ civil conspiracy claim the court
merely reiterated its July 12, 2012 order—that “Plaintiffs’ Twenty-
Second Cause of Action [(civil conspiracy)] against TNE was
previously DISMISSED WITH PREJUDICE.” It said nothing about
the disposition of this claim to other defendants—particularly to
Mr. Dickson and Trump Security.4
¶12 Both TNE and Plaintiffs appealed the district court’s
amended final order of judgment on different grounds. Neither
party noted the fact that the district court failed to completely
dispose of a claim before it.
¶13 On appeal, the court of appeals affirmed the district court’s
order without mentioning the live claim below. Both parties
petitioned this court for certiorari review, which we granted with the
intention of addressing the case on the merits.
Standard of Review
¶14 We granted certiorari to review several substantive issues.
But we may not do so unless the district court’s judgment was final.5
“Whether a district court’s judgment is final is a question of law.”6
And this question “may appropriately be addressed by this court on
appeal, even if the question is being addressed for the first time.”7
Analysis
¶15 Both parties raise important questions of law on certiorari.
But because we conclude that the district court’s order of judgment
did not constitute a final judgment, we cannot review these
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4 The district court’s original final order of judgment, issued on
January 09, 2014, and its corrected final order of judgment, issued on
January 28, 2014, also included this irregularity. In fact, at no time
did the district court address Plaintiffs’ civil conspiracy claim against
Mr. Dickson and Trump Security.
5 See Loffredo v. Holt, 2001 UT 97, ¶ 10, 37 P.3d 1070 (“This court
does not have jurisdiction over an appeal unless it is taken from a
final judgment . . . .”).
6 DFI Props. LLC v. GR 2 Enters. LLC, 2010 UT 61, ¶ 15, 242 P.3d
781 (citation omitted).
7 Id.5
WITTINGHAM v. TNE
Opinion of the Court
questions and must dismiss this case for lack of appellate
jurisdiction.
¶16 As a general rule, “Utah appellate courts do not ‘have
jurisdiction over an appeal unless it is taken from a final
judgment.’”8 This principle is embodied in rule 3 of the Utah Rules
of Appellate Procedure, which provides that “[a]n appeal may be
taken . . . from all final orders and judgments,”9 and we refer to it as
the “final judgment rule.”10
¶17 “For an order to constitute a final judgment, it must end the
controversy between the litigants.”11 In other words, the order must
“dispos[e] of the litigation on the merits as to all claims and all
parties.”12 “A judgment is not final even [though] it fully resolves
issues advanced by one party, or even [though] it resolves a majority
of the issues advanced by both parties.”13 Rather, “[i]f any issue
remains pending, the final judgment rule is not satisfied.”14 And
when this happens, we lack appellate jurisdiction and must dismiss
the appeal.15
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8 Migliore v. Livingston Fin., LLC, 2015 UT 9, ¶ 17, 347 P.3d 394(citation omitted); see also Bradbury v. Valencia, 2000 UT 50, ¶ 9, 5 P.3d
649 (“An appeal is improper if it is taken from an order or judgment
that is not final . . . .”).
9 UTAH R. APP. P. 3(a).
10 Powell v. Cannon, 2008 UT 19, ¶ 13, 179 P.3d 799.
11 Migliore, 2015 UT 9, ¶ 17 (citation omitted).
12 Powell, 2008 UT 19, ¶ 15; see also Bradbury, 2000 UT 50, ¶ 10 (“To
be final, the trial court’s order or judgment must dispose of
all parties and claims to an action.”); Williams v. State, 716 P.2d 806,
807 (Utah 1986) (“[A]n appeal may be taken only from a final
judgment concluding all of the issues in the case.”).
13 DFI Props. LLC v. GR 2 Enters. LLC, 2010 UT 61, ¶ 17, 242 P.3d
781 (footnote omitted).
14 Powell, 2008 UT 19, ¶ 15.
15 See DFI Props., 2010 UT 61, ¶ 23 (“[It] is incumbent upon us
[that] when we find that we lack the jurisdiction to hear a case, we
dismiss th[e] appeal.”); Loffredo v. Holt, 2001 UT 97, ¶ 11, 37 P.3d 1070(“Where the final judgment rule is not satisfied, the proper remedy
for this court is dismissal.”).
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¶18 We strictly apply the final judgment rule because we believe
it “promote[s] judicial economy by preventing piecemeal appeals in
the same litigation to this Court.”16 It also “maintains the proper
relationship between courts.”17 Indeed, “our judicial system would
not work well if the trial court could revise an order or judgment
after the parties had appealed it to our court.”18 Accordingly, we
“consistently uph[o]ld the final judgment rule.”19 We do so again
today.
¶19 Here, because the district court’s order did not dispose of all
claims as to all parties, it does not constitute a final judgment. As
stated above, Plaintiffs asserted their civil conspiracy cause of action
against “[a]ll defendants,” including the TNE Defendants,
Mr. Dickson, Trump Security, and Mr. Naujoks. But the court failed
to dispose of this claim as to Mr. Dickson or Trump Security. While
the court did conclude that Plaintiffs had “established their
entitlement to an award of actual damages against [Mr. Dickson and
Trump Security] in the amount of $292,500.00 on their claims” in its
July 23, 2013 memorandum decision, the court granted judgment
against Mr. Dickson and Trump Security in that decision only on
Plaintiffs’ conversion, fraud, slander of title, and alter ego causes of
action. The court failed to make any determination on Plaintiffs’ civil
conspiracy claim against Mr. Dickson and Trump Security.20
¶20 This failure is also evident in the district court’s amended
final order of judgment. In that order, the court failed to address
Plaintiffs’ civil conspiracy cause of action as it pertained to
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16 Anderson v. Wilshire Invs., L.L.C., 2005 UT 59, ¶ 9, 123 P.3d 393(citation omitted).
17 DFI Props., 2010 UT 61, ¶ 18.
18 Id. (citation omitted).
19 Bradbury, 2000 UT 50, ¶ 10.
20 While the district court did issue a certificate of default against
Mr. Dickson and Trump Security, without an entry of default
judgment such certificate does not dispose of any claims. See Roth v.
Joseph, 2010 UT App 332, ¶ 15, 244 P.3d 391 (holding that a default
certificate is only “‘a first step’ towards obtaining a
default judgment” (citation omitted)).
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WITTINGHAM v. TNE
Opinion of the Court
Mr. Dickson and Trump Security.21 The court walked through each
cause of action brought by Plaintiffs and reiterated that it was
granting judgment against Mr. Dickson and Trump Security on
Plaintiffs’ conversion, fraud, slander of title, and alter ego causes of
action. But when it reached Plaintiffs’ civil conspiracy claim, the
court stated only that it had previously dismissed this action with
prejudice as it applied to TNE. The court said nothing about the
disposition of this claim against Mr. Dickson and Trump Security.
The parties have directed us to nothing in the record showing that
the court disposed of this claim elsewhere, nor have we been able to
find any such disposition. This means that Plaintiffs’ civil conspiracy
claim against Mr. Dickson and Trump Security has not been decided.
¶21 Accordingly, we cannot say the district court has
“dispos[ed] of the litigation on the merits as to all claims and all
parties.”22 While the court resolved almost all of the claims before it,
this is not enough.23 We have repeatedly stated that when “any issue
remains pending, the final judgment rule is not satisfied.”24 We
therefore hold that we lack appellate jurisdiction to review this case,
because the parties are not appealing a final order.25 And we also
hold, for the same reason, that the court of appeals lacked
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21The district court’s original final order of judgment, issued on
January 28, 2014, also included this irregularity.}.
22 Powell, 2008 UT 19, ¶ 15.
23 See DFI Props., 2010 UT 61, ¶ 17.
24 Powell, 2008 UT 19, ¶ 15.
25 We have recognized three exceptions to the final judgment rule
that allow appellate courts to review non-final orders. The first
occurs “when the legislature provides a statutory avenue” to appeal
non-final orders. Id. ¶ 13. The second occurs “when a party obtains
permission . . . to appeal an interlocutory order pursuant to rule 5 of
the Utah Rules of Appellate Procedure.” Id. The third occurs “when
the district court certifies an order as final under rule 54(b) of the
Utah Rules of Civil Procedure.” Id. None of these exceptions apply
here. There is no statute under Utah law allowing an appeal of non-
final claims in this circumstance. And this appeal was not presented
as, nor were the procedural steps followed for, an interlocutory
appeal or certified order.
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jurisdiction to review the claims brought before it. Accordingly, we
dismiss this appeal and vacate the court of appeals’ decision.
¶22 While both parties may desire us to rule on the issues
presented on certiorari, as indicated by the extensive time and
briefing each has dedicated to addressing the issues before us, we
cannot confer jurisdiction merely because parties want us to.26
Indeed, “[t]he lost time and effort occasioned by the briefing and oral
argument . . . is a small price to pay for insisting that the parties
comply with the rules of procedure so that the proper relationship
between this Court and the trial courts may be maintained.”27
Conclusion
¶23 We granted certiorari on this case with the expectation of
resolving the dispute on the merits. But because the record indicates
that the district court’s final order did not dispose of all claims
brought by Plaintiffs against the Mr. Dickson and Trump Security,
we must conclude that the final judgment rule has not been met.
Accordingly, we dismiss this case for lack of appellate jurisdiction
and vacate the court of appeals’ decision.
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26 Bradbury, 2000 UT 50, ¶ 8 (“[A]cquiescence of the parties is
insufficient to confer jurisdiction on the court . . . .” (citation
omitted)).
27 A.J. Mackay Co. v. Okland Constr. Co., 817 P.2d 323, 326 (Utah
1991) (citation omitted).
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