Bradburn v. Alarm Protection

This opinion is subject to revision before final
publication in the Pacific Reporter
2019 UT 33
IN THE
SUPREME COURT OF THE STATE OF UTAH
RYAN BRADBURN,
Appellant,
v.
ALARM PROTECTION TECHNOLOGY, LLC;
ALDER HOLDINGS, LLC;
ALDER PROTECTION HOLDINGS, LLC;
and ADAM SCHANZ,
Appellees.
No. 20180305
Filed July 17, 2019
On Direct Appeal
Fourth District, Provo
The Honorable Kraig Powell
No. 170400290
Attorneys:
Kamron Keele, Chicago, Illinois, for appellant
Erik A. Olson, Jason R. Hull, Trevor C. Lang, Salt Lake City,
for appellees
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 Ryan Bradburn worked for Alarm Protection Technology
(APT) as a sales representative in the summer of 2015. After his
employment ended, he sued APT for alleged unpaid commissions.
APT, executing on a confession of judgment it had previously
obtained from Mr. Bradburn, initiated a constable sale and
purchased Mr. Bradburn’s right to sue APT. After obtaining his right
BRADBURN v. APT
Opinion of the Court
to sue, APT substituted itself into this case for Mr. Bradburn and
dismissed all claims against itself. Mr. Bradburn argues that the
district court erred in allowing APT to substitute itself as the plaintiff
and extinguish the claims against it. Because we find that the district
court did not abuse its discretion in permitting APT’s substitution as
plaintiff, we affirm.
Background
¶2 Alarm Protection Technology is an alarm services company
that sells alarm systems mainly through door-to-door sales.
Mr. Bradburn worked for APT as a sales representative after signing
an agreement in June 2013. In December 2014, Mr. Bradburn signed a
confession of judgment and a promissory note in APT’s favor for
$24,000 in exchange for advances on his commission. He stopped
working for APT in June 2015.
¶3 On March 1, 2017, Mr. Bradburn filed suit against APT in
our fourth judicial district, alleging “causes of action for violation of
the Utah Sales Representative Commission Payment Act, breach of
contract, unjust enrichment, quantum meruit, and promissory
estoppel.” He alleged $348,434 in unpaid commissions and treble
damages, all totaling $1,045,302. Later that day, APT filed the
December 2014 confession of judgment and promissory note in the
third district. The case file in third district “does not reflect that APT
served or notified Bradburn of th[at] filing.” In May 2017, the third
district court entered judgment against Mr. Bradburn for $24,000
pursuant to the promissory note and confession of judgment. APT
then filed a notice of entry of judgment and served notice on
Mr. Bradburn.
¶4 After entry of judgment, APT sought a writ of execution
requesting a constable sale of all Mr. Bradburn’s “rights, claims,
interest and choses in action”1 against APT and its affiliates. He
moved to quash or stay the writ of execution. The district court
granted the stay in part, allowing him the opportunity to file a
rule 60(b) motion instead.2 He then filed a rule 60(b) motion seeking
to vacate the judgment or stay the execution. The district court
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1 A “chose in action” is the “right to bring an action to recover a
debt, money, or thing.” Chose, BLACK’S LAW DICTIONARY (11th ed.
2019).
2 UTAH R. CIV. P. 60(b).
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Opinion of the Court
denied his motion after two days of evidentiary hearings. He did not
appeal that denial.
¶5 The next month, APT served Mr. Bradburn with notice of a
constable sale. At that sale, APT purchased his choses in action
against APT and its affiliates for $2,500. Mr. Bradburn alleges he did
not have the money to bid on his own choses in action because he
had not been paid his commission. There were no other bidders at
the sale. He did not move to vacate the sale.
¶6 The next day, APT filed a notice of transfer of claims and a
motion to substitute itself as the only plaintiff in Mr. Bradburn’s
pending action against APT. The district court granted the motion to
substitute, which precluded Mr. Bradburn from further participation
in the case. APT then extinguished all claims against itself and the
other defendants in the case. Mr. Bradburn now appeals from that
order granting APT’s substitution.
¶7 Mr. Bradburn timely appealed to this court. We have
jurisdiction pursuant to Utah Code section 78A-3-102(3)(j).
Standard of Review
¶8 We must decide whether the district court’s decision to
allow APT to substitute as plaintiff in the action pending against
itself, and to preclude Mr. Bradburn from continuing as plaintiff
(complete substitution), was proper under Utah Rule of Civil
Procedure 25. A district court’s substitution ruling is a discretionary
one that we review for an abuse of discretion.3
Analysis
¶9 Mr. Bradburn argues that the district court abused its
discretion in allowing APT to substitute itself as the plaintiff in his
pending action against it. He seeks reversal of the substitution so
that he can continue as a plaintiff in the case. APT disagrees and
raises procedural challenges to Mr. Bradburn’s arguments as well.
Because we conclude that the district court’s substitution order was
proper, we affirm.
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3 Lamoreaux v. Black Diamond Holdings, LLC, 2013 UT App 32, ¶ 6,
296 P.3d 780 (citing UTAH R. CIV. P. 25(c)).
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BRADBURN v. APT
Opinion of the Court
I. We Have Appellate Jurisdiction Only As to the District Court’s
Substitution Order
¶10 APT argues that Mr. Bradburn’s substantive arguments are
procedurally barred by collateral estoppel or, alternatively, that he
does not have standing. But this issue is more properly viewed as a
jurisdictional issue. While Mr. Bradburn has standing to pursue this
appeal of the district court’s substitution order, we have no
jurisdiction over any other non-appealed district court order or
proceeding.
¶11 There are three separate actions underlying this case. First,
there was a confession action in which APT sought to enforce the
judgment by confession. Second, there was a constable sale where
APT purchased Mr. Bradburn’s choses in action against APT.
Finally, there was a substitution action in which APT sought to
substitute itself as the plaintiff in Mr. Bradburn’s pending action
against APT. Mr. Bradburn did not appeal from the judgment by
confession proceeding, and he did not move to vacate the constable
sale. Instead, he appealed only the final substitution order.
¶12 Because this case does not come to us on appeal from the
confession of judgment action or the constable sale action, we do not
have appellate jurisdiction over those actions. So, even were we to
find that it was against public policy for APT to purchase
Mr. Bradburn’s choses in action, we could not vacate the earlier
district court’s entry of judgment or vacate the sale of his property.
Thus our jurisdiction is limited to determining whether APT’s
substitution for Mr. Bradburn was proper. As we explain below, it
was.
II. The District Court Did Not Abuse its Discretion in Allowing
APT’s Complete Substitution
¶13 Mr. Bradburn argues that he should have been permitted to
continue as the plaintiff in his case against APT, despite the fact that
APT had purchased his claims in their entirety. He asserts that Utah
law allows individuals to purchase claims against themselves only
when the judgment was obtained on the merits, and not by a
confession of judgment. In support, he cites our decision in Snow,
Nuffer, Engstrom & Drake v. Tanasse.4 Alternatively, he argues that we
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4 1999 UT 49, 980 P.2d 208 (holding that it was against public
policy for attorneys to purchase malpractice claims against
themselves).
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Opinion of the Court
should extend Snow’s holding to the employer-employee context,
and vacate the sale of his claim. In support of this argument he
asserts that there are similar public policy concerns in play. But, as
discussed above, our review is limited to whether the district court
abused its discretion in allowing complete substitution under Utah
Rule of Civil Procedure 25.5 And because the district court did not
abuse its discretion in allowing APT’s substitution as plaintiff, we
affirm the substitution order.
¶14 Utah Code section 78B-5-205 authorizes the use of
judgments by confession. Utah Rule of Civil Procedure 58A provides
for entry of judgment, including judgment by confession.6 Rule 64
lays out the framework for writs in general.7 Rule 64E allows for a
writ of execution to “seize property in the possession or under the
control of the defendant following entry of a final judgment or order
requiring the delivery of property or the payment of money.”8
Rule 69A discusses the seizure of property.9 Rule 69B addresses the
sale and delivery of property,10 and we have held that individuals
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5 By contrast, in Snow, we were reviewing a denial of a motion to
vacate the constable sale of the party’s choses in action. Id. ¶ 6. In
that procedural posture, we were able to properly exercise appellate
jurisdiction to vacate the sale.
6 UTAH R. CIV. P. 58A(i).
7 UTAH R. CIV. P. 64.
8 UTAH R. CIV. P. 64E(a).
9 UTAH R. CIV. P. 69A(c)(4) (“[P]ersonal property shall be seized
by serving the writ and a description of the property on the person
holding the property and taking the property into custody.”).
10 UTAH R. CIV. P. 69B.
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BRADBURN v. APT
Opinion of the Court
may purchase choses in action, even against themselves.11 Finally,
rule 25 allows for substitution of parties.12
¶15 In this case, APT secured a judgment by confession from
Mr. Bradburn, sought a writ of execution, held a constable sale,
purchased Mr. Bradburn’s choses in action against itself, substituted
itself as plaintiff, and extinguished all claims against itself. All of this
was, on its face, authorized by the above statutory framework.13
¶16 Mr. Bradburn argues that the district court abused its
discretion in allowing APT’s complete substitution under rule 25,
precluding him from participating in the proceedings.14 But Utah
law allows complete substitution,15 and it was appropriate in this
case.
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11 Applied Med. Techs., Inc. v. Eames, 2002 UT 18, ¶ 13, 44 P.3d 699
(“Given that choses in action are amenable to execution . . . it follows
that a defendant can purchase claims, i.e., choses in action, pending
against itself and then move to dismiss those claims.”); see also Snow,
1999 UT 49, ¶ 9 (“[W]e hold that a legal malpractice claim, like any
other chose in action, may ordinarily be acquired by a creditor
through attachment and execution.”); Lamoreaux v. Black Diamond
Holdings, LLC, 2013 UT App 32, ¶ 16, 296 P.3d 780.
12 UTAH R. CIV. P. 25(c) (“In case of any transfer of interest, the
action may be continued by or against the original party, unless the
court upon motion directs the person to whom the interest is
transferred to be substituted in the action or joined with the original
party.”).
13 Because the only issue before us on appeal is the substitution
order, we express no opinion on the propriety of any of APT’s other
actions on the merits. Our review is strictly limited to whether, on
the facts presented to the district court below, it properly allowed
APT’s substitution.
14 In other words, Mr. Bradburn argues that he should have at
least been allowed to remain a party to the case, as a co-plaintiff with
APT. He also argues he should have been allowed to continue as the
only plaintiff.
15 See, e.g., Applied Med., 2002 UT 18, ¶ 18; Lamoreaux, 2013 UT
App 32, ¶¶ 21–22 (explaining that rule 25 “clearly allows a court to
substitute the transferee into the action”).
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Opinion of the Court
¶17 Complete substitution was appropriate because
Mr. Bradburn no longer had any right to pursue his former claims.
Once a party’s “claims have been sold, a new party steps into the
shoes of the former plaintiff” and this “cuts off the former plaintiff’s
right to pursue those claims.”16 Once APT purchased Mr. Bradburn’s
choses in action, APT had control over the litigation, “including the
right to move to dismiss the pending claims.”17 There is nothing in
the record to suggest that the district court erred, let alone abused its
discretion, in allowing APT to exercise its rights over the claims it
had lawfully purchased. And, absent some agreement with APT, it is
unclear how the action could have proceeded with APT having
purchased the claim, but Mr. Bradburn continuing as the plaintiff. So
while rule 25 grants the district court some discretion over
substitution, in cases like this where one party has purchased the
entire interest in the claim and moves to substitute itself as plaintiff,
the district court likely has little to no actual discretion to deny
substitution.18
Conclusion
¶18 The district court did not abuse its discretion in allowing
complete substitution because Utah law permits the tactic used by
APT in this case. Even if we agreed with Mr. Bradburn that this tactic
is problematic, we do not have jurisdiction to unwind the entry of
judgment against him or the sale of his claims against APT.
Accordingly, we affirm.
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16 Applied Med., 2002 UT 18, ¶ 17.
17 Id.
18See id. (“After claims have been sold, a new party steps into the
shoes of the former plaintiff, and the claims remain cognizable, but
the sale cuts off the former plaintiff’s right to pursue those claims.
Once acquired by another, the new litigant has the right to determine
the course and scope of the litigation of the claims purchased,
including the right to move to dismiss the pending claims.” (citations
omitted)).
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