North Fork Special Service District v. Bennion

2013 UT App 1_________________________________________________________
THE UTAH COURT OF APPEALS
NORTH FORK SPECIAL SERVICE DISTRICT,
Plaintiff and Appellee,
v.
ROBERT BENNION,
Defendant and Appellant.
Opinion
No. 20111026‐CA
Filed January 4, 2013
Fourth District, Provo Department
The Honorable Steven L. Hansen
No. 080400633
Jeffrey T. Colemere and Brady T. Gibbs, Attorneys for Appellant
Kasey L. Wright and Melissa K. Mellor, Attorneys for Appellee
JUDGE CAROLYN B. MCHUGH authored this Opinion, in which
JUDGES JAMES Z. DAVIS and J. FREDERIC VOROS JR. concurred.
McHUGH, Judge:
¶1 Robert Bennion appeals from the trial court’s entry of
summary judgment in favor of the North Fork Special Service
District (the District) for past due service fees and interest charges
that exceed $200. Bennion also challenges the trial court’s award of
attorney fees under Utah Code section 78B‐5‐825. See Utah Code
Ann. § 78B‐5‐825 (LexisNexis 2012). We vacate the judgment and
remand for the entry of a new judgment consistent with this
opinion.
North Fork v. Bennion
BACKGROUND
¶2 At all times relevant to this action, Bennion owned residen‐
tial property located within the District’s service boundaries, the
District provided him with water, fire protection, and garbage
collection services, and it routinely sent Bennion quarterly invoice
statements. Sometime in early 1998, the lateral water line (the
Bennion Line) between Bennion’s property and the District’s main
water line (the Main Line) began to develop serious leaks, and the
District informed Bennion that it was his duty to repair it. In
response, Bennion stopped using the property, closed the valve
where the water enters the Bennion Line, and notified the District
that he no longer wished to receive water. Despite that request, the
District continued to send water to the Bennion Line in order to
provide water to other customers who had connected to the
Bennion Line.1 Bennion has refused to pay the District for any
service fees after 1998.
The 1998 Case
¶3 Shortly after Bennion closed the valve to the Main Line, a
neighbor who received water from the District through the Bennion
Line filed suit seeking an injunction barring Bennion from shutting
off the water (the 1998 Case). Bennion counterclaimed, seeking an
injunction against the neighbor’s use of the Bennion Line. In
addition, Bennion joined the District as a third‐party defendant and
sought an injunction preventing it from using the Bennion Line to
deliver water to its other customers. The trial court issued a
temporary restraining order preventing Bennion from shutting off
the water. It also struck Bennion’s pleadings and dismissed his
1. Although a customer’s lateral line is typically used exclusively
to deliver water to that customer’s property, the District and
Bennion’s predecessor‐in‐interest had agreed to allow other
customers to receive water through the Bennion Line.
20111026‐CA 2 2013 UT App 1North Fork v. Bennion
claims for injunctive relief with prejudice as a discovery sanction.
Bennion did not appeal that decision.
The 2002 Case
¶4 On March 29, 2002, the District sued Bennion for overdue
charges, including excess water fees for the leaked water, which
were calculated according to a graduated scale for usage above
5,000 gallons per month (the 2002 Case). Bennion filed a counter‐
claim for damages, which the 2002 court dismissed in 2004 for
failure to file a notice of claim as required by the Governmental
Immunity Act and, because the claims could have been brought in
the 1998 Case, they were barred by res judicata. Subsequently, on
November 10, 2005, the 2002 court granted partial summary
judgment and awarded the District base user fees and accrued
interest for the period of January 1, 1997, through January 25, 2002.
After a bench trial on October 10, 2008, the 2002 court ruled that
Bennion was responsible for maintenance of the Bennion Line and
for the excess water fees, “regardless of whether [Bennion] actually
uses such water or whether the water is lost through leaks located
in the [Bennion Line].” The 2002 court reasoned that Bennion was
“the owner of the [Bennion Line]” and “that [Bennion] prohibited
[the District] from placing a meter on the [Bennion Line] that
would have more accurately determined how much water was
actually used by [Bennion].” The court ordered Bennion to pay for
the excess water fees accrued between November 1, 1997, and May
1, 1998, plus interest and attorney fees. Bennion appealed the 2002
court’s decision, which we dismissed due to Bennion’s failure to
file a timely notice of appeal. See North Fork Special Serv. Dist. v.
Bennion, 2006 UT App 447U (mem.).
The 2006 Case
¶5 On May 25, 2006, the District brought a condemnation action
against Bennion to establish an easement across Bennion’s property
for the purpose of constructing a waterline to service the District’s
other customers (the 2006 Case). On September 22, 2006, the 2006
20111026‐CA 3 2013 UT App 1North Fork v. Bennion
court determined that the Bennion Line was “leaking and losing
hundreds of gallons of water each week.” Therefore, it granted the
District immediate occupancy of a portion of Bennion’s property to
construct a new waterline or repair the existing one. Bennion
petitioned for interlocutory appeal, which we denied.
The Current Case
¶6 On February 29, 2008, the District filed another complaint
against Bennion to collect base user fees, excess user fees, and
interest associated with water taken from the Bennion Line since
March 31, 2002, and seeking $250,000 in punitive damages (the
Current Case). Bennion answered the complaint and filed a Motion
to Dismiss, arguing that the District was not entitled to punitive
damages and that the District’s claims were barred by the applica‐
ble statute of limitations. After a hearing on August 25, 2008, the
trial court dismissed the District’s claim for punitive damages and
ruled that a four‐year statute of limitations applied, effectively
prohibiting the District from recovering any fees or interest
incurred prior to February 28, 2004. It also ordered the parties to
provide supplemental briefing as to the applicability of Utah Code
section 17B‐1‐904, which limits the amount a local district can
collect for past due fees.
¶7 In response, Bennion filed a supplemental memorandum
claiming that because his property is residential, Utah Code section
17B‐1‐904 limits the total amount the District could recover to $200.
Bennion argued that by adopting Utah Code section 17D‐1‐106,
which became effective on May 8, 2008, the Utah Legislature
intended for the $200 recovery limit on local districts to apply
retroactively to special service districts. The District argued that
there was no retroactive effect. After briefing was complete, and
without seeking permission, Bennion filed a supplemental reply
memorandum outlining the legislative history of the relevant code
sections and arguing, for the first time, that Utah Code section 17B‐
2‐804, the predecessor statute to section 17B‐1‐904, limited the
District’s recovery to no more than $200 for the period from its
20111026‐CA 4 2013 UT App 1North Fork v. Bennion
effective date of May 3, 2004, to when it was repealed and replaced
by section 17B‐1‐904 on April 30, 2007.
¶8 On September 25, 2008, the trial court ruled that the Dis‐
trict’s recovery was not limited to $200 because “[a]lthough, as
noted by [Bennion], section 17B‐1‐904 was enacted in 2004,[2] it did
not apply to special service districts until May 5, 2008 when section
17D‐1‐106 was enacted, which was approximately two months after
the case was filed by [the District].” The court further explained,
In the absence of language in the stat‐
ute showing an intent on the part of
the legislature that section 17D‐1‐106
should be applied retroactively to
make section 17B‐1‐904 and other sec‐
tions applicable to special service dis‐
tricts, the court declines to apply it
retroactively to cap [the District’s]
service fee damages to $200.
In denying Bennion’s Motion to Dismiss, the court did not address
whether section 17B‐2‐804 limited the District’s fees to $200 during
the period of May 3, 2004, to April 30, 2007, when that statute was
in effect. It also did not consider whether section 17B‐1‐904 limited
the amount of interest that could accrue after its effective date.
¶9 On May 19, 2010, the District filed a Motion for Summary
Judgment and supporting memorandum claiming that Bennion
was liable for base user fees and excess water fees for the period
from February 28, 2004, through March 31, 2009. The District also
sought interest on those fees for the period between April 30, 2004,
2. We note that the trial court incorrectly referenced section 17B‐1‐
904 as being enacted in 2004. We provide a more detailed analysis
of the evolving statutory scheme later in this opinion. See infra
¶¶ 27–49.
20111026‐CA 5 2013 UT App 1North Fork v. Bennion
through May 14, 2010. Finally, the District alleged that it was
entitled to attorney fees pursuant to Utah Code section 78B‐5‐825.
In support of its fees claim, the District argued that it was “forced
to pursue litigation for over eight years in an attempt to” obtain
delinquent fees and that, in light of the prior judgments against
him, Bennion’s defense of the Current Case constituted bad faith.
¶10 Bennion responded to the District’s Motion for Summary
Judgment with a memorandum in opposition (the Opposition
Memorandum), which disputed that he had acted in bad faith.
Additionally, Bennion argued that summary judgment was
improper as a matter of law because both sections 17B‐2‐804 and
17B‐1‐904 applied to the Current Case, during different time
periods. The District filed a motion to strike portions of the
Opposition Memorandum, including Bennion’s arguments
regarding sections 17B‐2‐804 and 17B‐1‐904. It asserted that these
arguments should be stricken because they had “already been
briefed by the parties, and this Court signed a decision on October
1, 2008, rejecting [Bennion’s] arguments related to Utah Code
[section] 17B‐1‐904.”
¶11 After a hearing on June 8, 2011, the trial court granted
summary judgment and struck Bennion’s statutory arguments as
redundant. Although the motion was one for summary judgment,
on October 13, 2011, the trial court issued “Findings of Fact and
Conclusions of Law on Plaintiff’s Motion for Summary Judgment.”
In the “Findings of Fact” section, the trial court stated that Bennion
was the owner of the Bennion Line and that he was responsible for
its maintenance. The court also stated as a finding of fact that
Bennion owed base user fees in the amount of $3,711; excess water
fees in the amount of $95,330 for the period between February 28,
2004, through March 31, 2009; and interest at the rate of 12% per
annum for the period of April 30, 2004, through June 8, 2011, in the
amount of $61,155. In addition, the trial court concluded that the
District was entitled to continuing interest of 12% per annum until
the judgment is paid in full. The court further found that
“Bennion’s actions and continued litigation have been pursued in
20111026‐CA 6 2013 UT App 1North Fork v. Bennion
bad faith” and ordered him to pay the District’s attorney fees in the
amount of $11,362. Bennion filed a timely appeal.
ISSUES AND STANDARDS OF REVIEW
¶12 First, Bennion argues that the trial court erred in granting
the District’s summary judgment motion because it failed to apply
Utah Code sections 17B‐2‐804 and 17B‐1‐904 to limit the amount of
user fees, excess water fees, and interest that the District could
recover against him. See Utah Code Ann. § 17B‐2‐804 (LexisNexis
2004);3 id. § 17B‐1‐904 (2009). Summary judgment is proper if “there
is no genuine issue as to any material fact and . . . the moving party
is entitled to a judgment as a matter of law.” Utah R. Civ. P. 56(c).
“We review the trial court’s summary judgment for correctness,
considering only whether the trial court correctly applied the law
and correctly concluded that no disputed issues of material fact
existed.” Baxter v. Saunders Outdoor Adver., Inc., 2007 UT App 340,
¶ 6, 171 P.3d 469 (citation and internal quotation marks omitted).
Additionally, “[i]ssues of statutory interpretation are questions of
law that we review for correctness.” In re R.B.F.S., 2012 UT App
132, ¶ 10, 278 P.3d 143 (citation and internal quotation marks
omitted).
¶13 Second, Bennion contends that the trial court erred by
determining as a matter of law that he was responsible to maintain
the Bennion Line and to pay any excess water fees resulting from
unrepaired leaks in it. As stated above, we review summary
judgment for correctness. See Baxter, 2007 UT App 340, ¶ 6. “Our
review is limited to determining whether the district court correctly
applied the summary judgment standard in light of the undisputed
material facts.” Raab v. Utah Ry. Co., 2009 UT 61, ¶ 10, 221 P.3d 219.
3. Utah Code section 17B‐2‐804 was repealed and replaced with
Utah Code section 17B‐1‐904, effective April 30, 2007. See Act of
Apr. 30, 2007, ch. 329, § 468, 2007 Utah Laws 1723, 2007–14.
20111026‐CA 7 2013 UT App 1North Fork v. Bennion
¶14 Third, Bennion argues that the trial court erred when it
awarded the District attorney fees because even if Bennion’s
defenses were advanced in bad faith, they were not without merit.
A prevailing party is entitled to an award of attorney fees pursuant
to section 78B‐5‐825 if the action was both “without merit” and
“not brought or asserted in good faith.” See Utah Code Ann.
§ 78B‐5‐825 (LexisNexis 2012). “The trial court’s determination that
an action lacks merit . . . is a question of law, which we review for
correctness.” Edwards v. Powder Mountain Water & Sewer, 2009 UT
App 185, ¶ 13, 214 P.3d 120.
ANALYSIS
I. Statutory Interpretation
¶15 Bennion argues that the trial court erroneously granted
summary judgment when it failed to interpret and apply sections
17B‐2‐804 and 17B‐1‐904 to limit the District’s recovery to $200 for
water it provided to Bennion’s residential property.4 See Utah Code
Ann. § 17B‐2‐804; id. § 17B‐1‐904. He therefore asks that we reverse
and remand to the trial court for readjustment of past due service
fees and interest.
¶16 The District first argues that we should not consider
Bennion’s section 17B‐2‐804 claim because he did not “specifically
appeal the order striking” that argument from his Opposition
Memorandum. The District also contends that this claim was not
4. Bennion argued before the trial court that both sections 17B‐2‐
804 and 17B‐1‐904 limit the District’s recovery to a total of $200
during the applicable time periods. On appeal, Bennion argues that
these sections limit the District’s recovery to $200 per month.
During oral argument, Bennion clarified that although the statutes
do not state the $200 as a monthly limitation, the $200 is limited per
form notice, which can be sent every thirty days.
20111026‐CA 8 2013 UT App 1North Fork v. Bennion
properly preserved in the trial court because his supplemental
reply memorandum was untimely and was not adequately briefed
in any other pleading. In the alternative, the District argues that
even if the claim has been preserved, the trial court correctly
determined that the District’s recovery is not limited to $200. In
particular, the District argues that section 17B‐2‐804 is ambiguous,
the other provisions in the statute are inconsistent with a $200
limitation, and the imposition of such a limit is contrary to the
general purposes of Title 17B, Chapter 2, Part 8. Although the
District disputes the preservation and applicability of section 17B‐
2‐804, it offers no response to Bennion’s arguments on appeal
regarding section 17B‐1‐904.
A. Jurisdiction and Preservation
¶17 Before reaching the merits of Bennion’s claims on appeal, we
address the District’s argument that Bennion was required to
“specifically appeal the order striking the [portions of his]
pleading” related to the $200 fee limitation of section 17B‐2‐804. See
id. § 17B‐2‐804(3)(b)(i)(B). It is unclear from the District’s appellate
brief whether it challenges the sufficiency of the notice of appeal to
confer jurisdiction on this court to consider the decision striking
Bennion’s argument, or the adequacy of Bennion’s appellate briefs
in challenging that decision. Because the District indicated during
oral argument that it intended to raise both arguments, we consider
each in turn, beginning with the scope of the notice of appeal.
¶18 On October 13, 2011, the trial court issued an order striking
portions of Bennion’s Opposition Memorandum and issued a
separate order granting summary judgment in favor of the District.
Rule 3(d) of the Utah Rules of Appellate Procedure provides, “The
notice of appeal shall specify the party or parties taking the appeal;
shall designate the judgment or order, or part thereof, appealed
from; shall designate the court from which the appeal is taken; and
shall designate the court to which the appeal is taken.” Utah R.
App. P. 3(d). Utah precedent interpreting rule 3(d) clarifies that
Bennion was not required to identify the interim order striking his
20111026‐CA 9 2013 UT App 1North Fork v. Bennion
section 17B‐2‐804 argument in the notice of appeal. “[W]e have
long adhered to the policy that where the notice of appeal
sufficiently identifies the final judgment at issue and the opposing
party is not prejudiced, the notice of appeal is to be liberally
construed.” Goggin v. Goggin, 2011 UT 76, ¶ 24, 267 P.3d 885(citation and internal quotation marks omitted). Accordingly,
Bennion need not “indicate that the appeal also concerns
intermediate orders or events that have led to that final judgment.”
See Zions First Nat’l Bank, N.A. v. Rocky Mountain Irrigation, Inc., 931
P.2d 142, 144 (Utah 1997); see also Scudder v. Kennecott Copper Corp.,
886 P.2d 48, 50 (Utah 1994) (“When appealing from an entire final
judgment as [Bennion] did here, it is not necessary to specify each
interlocutory order of which [Bennion] seeks review.”). Instead,
“the relevant inquiry is whether the prior orders not named in
[Bennion’s] notice of appeal were ‘intermediate orders’ that led to
a final, appealable order.” See Speros v. Fricke, 2004 UT 69, ¶ 16, 98
P.3d 28. Where the “intermediate order of the court . . . constitutes
one link in the chain of rulings leading to dismissal,” Bennion is
entitled to challenge it based on a notice of appeal identifying the
final order. See Braun v. Nevada Chems., Inc., 2010 UT App 188, ¶ 10,
236 P.3d 176.
¶19 The trial court’s order striking portions of Bennion’s
Opposition Memorandum constitutes an intermediate “link in the
chain of rulings” that led to summary judgment in favor of the
District. See id.; Speros, 2004 UT 69, ¶ 18 (determining that a notice
of appeal encompasses all orders that amount to “intermediate
steps along the way to the final judgment”). Indeed, the order
striking portions of Bennion’s brief and the order granting
summary judgment in favor of the District were issued the same
day. See In re B.B., 2002 UT App 82, ¶ 10, 45 P.3d 527 (concluding
that notice of appeal that only mentioned one of the two orders,
although “not ideal,” served to notify the opposing parties that
both of the trial court’s orders from the same hearing were being
appealed, “particularly where the orders bear the same date”). The
summary judgment order does not address Bennion’s statutory
20111026‐CA 10 2013 UT App 1North Fork v. Bennion
arguments because it relies upon the contemporaneous order
striking them from his Opposition Memorandum.
¶20 Additionally, the District has advanced no argument
suggesting that it has been prejudiced. See Goggin, 2011 UT 76, ¶ 24;
Speros, 2004 UT 69, ¶ 16 n.2. Bennion’s notice of appeal sufficiently
notified the District that he was challenging the trial court’s
judgment awarding the District damages in an amount that
exceeds the limit provided by the identical language of sections
17B‐2‐804 and 17B‐1‐904. “Because [Bennion] complied with rule
3(d) and generally designated the final judgment in [his] notice of
appeal, [he is] not precluded from alleging errors in any
intermediate order involving the merits or necessarily affecting the
judgment as long as such errors were properly preserved.” See
Zions First Nat’l Bank, 931 P.2d at 144.
¶21 The District also asserts that Bennion’s section 17B‐2‐804
argument was not properly preserved. While the District
acknowledges that Bennion raised the issue of the $200 limitation
in the context of section 17B‐1‐904 during the hearing on the
Motion to Dismiss and in a supplemental brief, it asserts that he
did not raise his argument in the context of section 17B‐2‐804. The
District asks us to ignore Bennion’s second supplemental
memorandum, which it acknowledges raised section 17B‐2‐804,
because it was not authorized or accepted by the trial court. Indeed,
the trial court makes no reference to this pleading in its decision
denying Bennion’s Motion to Dismiss, which analyzes only the
applicability of the $200 limitation under section 17B‐1‐904.
However, even ignoring that uninvited memorandum, we
conclude that Bennion adequately raised the $200 limitation in the
context of section 17B‐2‐804 in the trial court.
¶22 Later in the trial court proceedings, the District moved for
summary judgment. In opposition to that motion, Bennion
expressly argued that both sections 17B‐2‐804 and 17B‐1‐904
limited the District’s recovery to $200. “To preserve an issue for
appeal, an appellant must present it to the trial court ‘in such a way
20111026‐CA 11 2013 UT App 1North Fork v. Bennion
that the trial court has an opportunity to rule on that issue.’” Allen
v. Ciokewicz, 2012 UT App 162, ¶ 26, 280 P.3d 425 (quoting 438 Main
St. v. Easy Heat, Inc., 2004 UT 72, ¶ 51, 99 P.3d 801). Preservation
requires that the trial court be given “‘notice of the asserted error
and allows for correction at that time in the course of the
proceeding.’” Id. (quoting 438 Main St., 2004 UT 72, ¶ 51). Thus, “an
issue is preserved only if (1) it is ‘raised in a timely fashion,’ (2) it
is ‘specifically raised,’ and (3) ‘supporting evidence or relevant
legal authority’ is introduced.” Id. (quoting 438 Main St., 2004 UT
72, ¶ 51). By including his section 17B‐2‐804 argument in his
Opposition Memorandum to summary judgment, Bennion timely
and specifically raised it in the trial court.
¶23 However, the District argues that Bennion failed to cite
relevant legal authority. While the District is correct that Bennion
cites no relevant case law, it is also true that there are no Utah
appellate decisions interpreting section 17B‐2‐804. Under these
circumstances, Bennion adequately introduced the relevant legal
authority by citing the language of the statute. Thus, Bennion’s
claim that section 17B‐2‐804 limited the District’s recovery to $200
was timely placed before the trial court, specifically raised in a way
that the trial court had an opportunity to rule on it, and supported
by the only relevant legal authority available. See Ciokewicz, 2012
UT App 162, ¶ 26. We are also convinced that where Bennion
raised his section 17B‐2‐804 claim after the trial court rejected
section 17B‐1‐904 as inapplicable to the relevant time period, the
relevance of the issue was apparent and our consideration of it is
fair. See Patterson v. Patterson, 2011 UT 68, ¶ 16, 266 P.3d 828(“Notions of fairness therefore dictate that a party should be given
an opportunity to address the alleged error in the trial court.”).
¶24 The District next contends that Bennion has not adequately
preserved his section 17B‐2‐804 argument because he has not
argued on appeal that the trial court erred in striking the portion of
his Opposition Memorandum addressing that statute. In support,
the District relies on our decision in Maese v. Tooele County, 2012 UT
App 49, 273 P.3d 388. In Maese, we refused to consider the content
20111026‐CA 12 2013 UT App 1North Fork v. Bennion
of an affidavit stricken by the trial court on foundational grounds
in determining whether the trial court had correctly granted
summary judgment. Id. ¶ 8. Although the appellant relied on the
stricken affidavit in his challenge of the trial court’s decision
granting summary judgment in favor of the appellee, he did not
argue on appeal that the trial court erred in striking the affidavit.
Id. Because the appellant had not advanced any argument on
appeal as to why the content of the affidavit should be considered,
we declined to consider it. Id.
¶25 Unlike the appellant in Maese, Bennion challenges the trial
court’s summary judgment ruling by asserting on appeal that
sections 17B‐2‐804 and 17B‐1‐904 precluded summary judgment in
the amount awarded as a matter of law. By striking portions of his
brief, the trial court refused to consider Bennion’s legal argument,
not evidence of controverted factual questions.5 That distinction is
important because “[o]ur preservation requirement is self‐imposed
and is therefore one of prudence rather than jurisdiction.”
Patterson, 2011 UT 68, ¶ 13. “[I]n assessing the application of our
preservation rule,” we consider its effect on the underlying policies
of “judicial economy and fairness.” See id. ¶ 15. In furthering
judicial economy, “the preservation rule should be more strictly
applied when the asserted new issue or theory ‘depends on
controverted factual questions whose relevance thereto was not
made to appear at trial.’” Id. (quoting James v. Preston, 746 P.2d 799,
801 (Utah Ct. App. 1987)). With regard to fairness, because “the
responsibility for detecting error is on the party asserting it, not on
5. Bennion also acknowledged during oral argument that this case
differs from Maese because, if the trial court was correct in its
interpretation of section 17B‐1‐904, it was also correct that
Bennion’s reliance on section 17B‐2‐804 was redundant where the
language of the statutes is identical. However, the trial court never
interpreted the statutory language of section 17B‐1‐904; it
concluded that the section did not apply to special service districts
during the relevant period.
20111026‐CA 13 2013 UT App 1North Fork v. Bennion
the court,” we believe that “[i]t generally would be unfair to
reverse a district court for a reason presented first on appeal.” Id.
¶ 16.
¶26 As discussed, the resolution of whether section 17B‐2‐804
limits the District’s recovery to $200 is a question of law that does
not involve controverted factual questions. We also conclude that
it is fair to consider the statutory arguments because they are not
raised for the first time on appeal. Bennion asserted that the
District’s recovery is limited to $200 during the proceedings in the
trial court and advanced the identical language of sections 17B‐1‐
904 and 17B‐2‐804 in support of that argument. Under these
circumstances, we exercise our discretion to consider the
applicability of the statutory limitations on appeal.
B. The Evolving Statutory Scheme
¶27 We now consider Bennion’s claim that the trial court
awarded judgment in amounts that exceed the applicable statutory
limits on the District’s recovery. Our task is complicated by the fact
that the statutory scheme governing the recovery of fees by special
service districts has evolved. “As a general rule, when adjudicating
a dispute we apply the version of the statute that was in effect ‘at
the time of the events giving rise to [the] suit.’” Harvey v. Cedar Hills
City, 2010 UT 12, ¶ 12, 227 P.3d 256 (alteration in original) (quoting
Taghipour v. Jerez, 2002 UT 74, ¶ 5 n.1, 52 P.3d 1252). The Utah
Legislature has included a restriction on retroactive application of
the Utah Code, stating, “A provision of the Utah Code is not
retroactive, unless the provision is expressly declared to be
retroactive.” See Utah Code Ann. § 68‐3‐3 (LexisNexis 2011). The
Utah Supreme Court has cautioned that “exceptions to this general
rule are rare.” See Harvey, 2010 UT 12, ¶ 13. Here, the events giving
rise to the District’s suit were Bennion’s repeated failures to pay for
the water provided by the District. Thus, we use the dates that the
water fees were incurred to determine the statutory scheme
applicable to the District’s recovery.
20111026‐CA 14 2013 UT App 1North Fork v. Bennion
¶28 The trial court granted the District summary judgment for
base water fees and excess water fees incurred by Bennion from
February 28, 2004, through March 31, 2009, prejudgment interest
from April 30, 2004, to May 14, 2010, and postjudgment interest at
the rate of 12% per annum until paid. Thus, the award spans the
period from February 28, 2004, through the present. Due to changes
in the restrictions on recovery, there are four distinct time periods
covered by the award that are relevant to the calculation of the
District’s recovery.
¶29 From February 28, 2004, until the effective date of section
17B‐2‐804 on May 3, 2004, there were no restrictions on the
District’s recovery of water fees, attorney fees, costs, or interest
from its residential customers. Consequently, Bennion does not
challenge the District’s right to recover its actual fees and expenses
for that period. As a result, the trial court’s award of fees incurred
from February 28, 2004, through May 2, 2004, and the costs and
expenses incurred by the District in collecting those fees, are not in
dispute.
¶30 On May 3, 2004, section 17B‐2‐804—as well as section 17A‐1‐
205, which made the provisions of section 17B‐2‐804 for local
districts equally applicable to special service districts—became
effective. See Utah Code Ann. § 17B‐2‐804 (LexisNexis 2004)
(current version at id. § 17B‐1‐904 (2009)); id. § 17A‐1‐205 (2004)
(“Each special district under this title is subject to the provisions of
Title 17B, Chapter 2, Part 8, Collection of Water and Sewer Service
Fees, to the same extent as if the special district were a local district
under Title 17B, Chapter 2, Local Districts.”). Relying on these
statutes, Bennion claims that the District can recover no more than
$200 for the three‐year period from May 3, 2004, until the April 30,
2007 repeal of section 17A‐1‐205. The District denies that these
statutes provide such a limit on its recovery. Accordingly, we must
determine the impact of section 17B‐2‐804 on the District’s recovery
for fees, costs, expenses, or interest arising out of water fees
incurred from May 3, 2004, through April 29, 2007.
20111026‐CA 15 2013 UT App 1North Fork v. Bennion
¶31 Effective April 30, 2007, the Utah Legislature repealed
section 17B‐2‐804 and renumbered it as section 17B‐1‐904 without
modification of the relevant language.6 Compare Utah Code Ann.
§ 17B‐2‐804 (LexisNexis 2004), with id. § 17B‐1‐904 (2009). Section
17A‐1‐205 was also repealed, but not replaced, in 2007. See Act of
Apr. 30, 2007, ch. 329, § 468, 2007 Utah Laws 1723, 2007–14. Thus,
the repeal of section 17A‐1‐205 left section 17B‐1‐904 applicable
only to local districts. One year later, the legislature remedied this
apparent oversight by enacting section 17D‐1‐106, which became
effective May 5, 2008.7 See Utah Code Ann. § 17D‐1‐106 (LexisNexis
2009) (current version at id. § 17D‐1‐106 (Supp. 2012)). During the
approximate one‐year gap between the repeal of section 17A‐1‐205
and the adoption of section 17D‐1‐106, Bennion concedes that there
was no limit on the amount that a special service district could
recover from a residential customer.
6. In relevant part, section 17B‐1‐904 states, “A local district may
file a civil action against the customer if the customer fails to pay
the past due service fees and collection costs within 30 calendar
days from the date on which the local district mailed notice under
Subsection (2)(b).” Utah Code Ann. § 17B‐1‐904(5)(a) (LexisNexis
2009); see also id. § 17B‐2‐804(3)(a) (2004) (same). It further provides,
“In a civil action under this Subsection (5), a customer is liable to
the local district for an amount that: (A) consists of past due service
fees, collection costs, interest, court costs, a reasonable attorney fee,
and damages; and (B) if the customer’s property is residential, may
not exceed $200.” Id. § 17B‐1‐904(5)(b)(i) (2009); see also id. § 17B‐2‐
804(3)(b)(i) (2004) (same).
7. Section 17D‐1‐106 states, “A special service district is, to the
same extent as if it were a local district, subject to and governed by
. . . Title 17B, Chapter 1, Part 9, Collection of Service Fees and
Charges.” Id. § 17D‐1‐106(1)(f) (LexisNexis 2009) (current version
at id. § 17D‐1‐106(1)(g) (Supp. 2012)); see also id. § 17A‐1‐205 (2004)
(same).
20111026‐CA 16 2013 UT App 1North Fork v. Bennion
¶32 As of May 8, 2008, when section 17D‐1‐106 made section
17B‐1‐904 applicable to special service districts, Bennion claims that
the District’s right to recover money damages from a residential
customer in a civil action was again statutorily limited to $200. On
appeal, however, Bennion challenges only the trial court’s award
of interest at 12% after May 8, 2008.
¶33 We now undertake the analysis of the statutes that Bennion
argues placed restrictions on the District’s recovery for the two
contested time periods. We begin with section 17B‐2‐804, which
governs fees incurred from May 3, 2004, through April 29, 2007.
Although the relevant language of section 17B‐2‐804 is identical to
that contained in section 17B‐1‐904, the focus of Bennion’s
argument under each statute, which we explain in more detail
below, is not. Therefore, we separately address the impact of each
statute on the District’s right to recover interest on unpaid water
fees.
1. Section 17B‐2‐804
¶34 Bennion argues that the plain language of section 17B‐2‐804
limits the fees and interest that the District can collect to $200. See
id. § 17B‐2‐804(3)(b)(i)(B) (LexisNexis 2004). The District disagrees
and contends that section 17B‐2‐804 is ambiguous, that the other
provisions in the statute are inconsistent with such a limit, and that
the intent and purpose of Title 17B, Chapter 2, Part 8, was to allow
a service district to collect all delinquent user fees.
¶35 “Principles of statutory interpretation require us to look first
[] to the plain language with the primary objective of giving effect
to the legislature’s intent.” In re R.B.F.S., 2012 UT App 132, ¶ 15,
278 P.3d 143 (alteration in original) (citation and internal quotation
marks omitted). In doing so, we read “[t]he plain language of a
statute . . . as a whole, and its provisions [should be] interpreted in
harmony with other provisions in the same statute and with other
statutes under the same and related chapters.” State v. Schofield,
2002 UT 132, ¶ 8, 63 P.3d 667 (first alteration in original) (citation
20111026‐CA 17 2013 UT App 1North Fork v. Bennion
and internal quotation marks omitted). Additionally, “[w]hen
interpreting a statute, we assume, absent a contrary indication, that
the legislature used each term advisedly according to its ordinary
and usually accepted meaning.” Hutter v. Dig‐It, Inc., 2009 UT 69,
¶ 32, 219 P.3d 918. When the plain language is clear, no other
interpretive tools are needed because our inquiry is complete. See
C.T. ex rel. Taylor v. Johnson, 1999 UT 35, ¶ 13, 977 P.2d 479 (“[I]t is
elementary that we do not seek guidance from legislative history
and relevant policy considerations when the statute is clear and
unambiguous.”). If the language of the statute “is ambiguous—in
that its terms remain susceptible to two or more reasonable
interpretations after we have conducted a plain language
analysis—we generally resort to other modes of statutory
construction and ‘seek guidance from legislative history’ and other
accepted sources.” Marion Energy, Inc. v. KFJ Ranch P’ship, 2011 UT
50, ¶ 15, 267 P.3d 863 (quoting Taylor ex rel. Taylor v. Ogden City Sch.
Dist., 927 P.2d 159, 167 (Utah 1996) (Durham, J., dissenting)).
¶36 Section 17B‐2‐804 provides,
A customer is liable . . . for past due
service fees and collection costs if: (a)
the customer has not paid service fees
. . . ; (b) the [special service] district
mails the customer notice as provided
in Section 17B‐2‐805; and (c) the past
due service fees remain unpaid 15 days
after the local district has mailed
notice.
See Utah Code Ann. § 17B‐2‐804(1) (LexisNexis 2004). If the past
due service fees and collection costs remain unpaid thirty days
after the district mails notice to the customer as provided in section
17B‐2‐805 (the Form Notice), see id. § 17B‐2‐805 (current version at
id. § 17B‐1‐904(4) (2009)), the district may make an offer to settle
with the customer without filing a civil action, see id. § 17B‐2‐804(2)
(current version at id. § 17B‐1‐904(3) (2009)). The settlement amount
20111026‐CA 18 2013 UT App 1North Fork v. Bennion
may include past due service fees, collection costs, and damages,
as well as an attorney fee “not to exceed $50,” but “if the
customer’s property is residential, [the settlement amount] may not
exceed $100.” See id. § 17B‐2‐804.
¶37 If the customer does not pay within thirty days of the date
the district mailed the Form Notice, another option available to a
special service district is to bring a civil action. See id. § 17B‐2‐
804(3). The express statutory language states that in such a civil
action, “a customer is liable to the local district court for an amount
that: (A) consists of past due service fees, collection costs, interest,
court costs, a reasonable attorney’s fee, and damages; and (B) if the
customer’s property is residential, may not exceed $200.” Id. § 17B‐2‐
804(3)(b)(i) (emphasis added). The District argues that the statute
is ambiguous and that the correct interpretation limits only
collection costs to $200. However, the District provides no
argument as to why the other items listed in section 17B‐2‐
804(3)(b)(i)(A), including past due service fees, interest, court costs,
a reasonable attorney fee, and damages do not fall within the two
hundred dollar limitation. Moreover, the words “an amount,”
“that,” and “consists of” all indicate that the legislature intended
for one comprehensive award under the provision and that, when
it involved a residential property, the amount of that total award
“may not exceed $200.” See id. Because “[w]e presume that the
legislature used each word advisedly and [gave] effect to each term
according to its ordinary and accepted meaning,” we find no
ambiguity in section 17B‐2‐804(3)(b)(i). See Pearson v. South Jordan
City, 2012 UT App 88, ¶ 18, 275 P.3d 1035 (citation and internal
quotation marks omitted). Furthermore, we reject the District’s
invitation to ignore the express statutory language that includes
“past due service fees, collection costs, interest, court costs, a
reasonable attorney’s fee, and damages,” as the components of “an
amount” which cannot exceed $200 for residential property. See
Utah Code Ann. § 17B‐2‐804(3)(b)(i).
¶38 Nevertheless, the District argues that a plain reading of the
$200 residential limitation would undermine the other provisions
20111026‐CA 19 2013 UT App 1North Fork v. Bennion
found in section 17B‐2‐804, as well as the intent and purpose of
Title 17B, Chapter 2, Part 8. In particular, the District argues that
such an interpretation would render the right to bring a civil action
meaningless because the court’s “filing fee alone would be more
than $200.” Our “duty to give effect to the plain meaning of a
statute . . . should give way if doing so would work a result so
absurd that the legislature could not have intended it.” State v.
Jeffries, 2009 UT 57, ¶ 8, 217 P.3d 265. If the plain language of the
statute “creates an absurd, unreasonable, or inoperable result, we
assume the legislature did not intend that result.” Id. In order “[t]o
avoid an absurd result, we endeavor to discover the underlying
legislative intent and interpret the statute accordingly.” Id.; see also
In re Z.C., 2007 UT 54, ¶ 12, 165 P.3d 1206 (“In defining the
parameters of what constitutes an absurd result, we note the
inherent tension in this canon of construction between refraining
from blind obedience to the letter of the law that leads to patently
absurd ends and avoiding an improper usurpation of legislative
power through judicial second guessing of the wisdom of a
legislative act.”). “A further exception to the plain meaning rule
arises with our duty to read and interpret statutory provisions in
harmony with other provisions in the same statute and with other
related statutes.” Id. ¶ 9. Essentially, “statute[s] should be
construed . . . so that no part [or provision] will be inoperative or
superfluous, void or insignificant, and so that one section will not
destroy another.” Id. (alterations in original) (citation and internal
quotation marks omitted).
¶39 Notwithstanding the District’s contrary suggestion, our
reading of the plain language in section 17B‐2‐804 is harmonious
with Title 17B, Chapter 2, Part 8, as a whole. In particular, the
section immediately following section 17B‐2‐804 leaves no doubt
on this issue. In section 17B‐2‐805, the Utah Legislature has
provided the Form Notice that must be sent to a delinquent
customer before that customer is liable for past fees, the district can
make a settlement offer, or the district can bring a civil action. See
Utah Code Ann. §§ 17B‐2‐804, ‐805. The Form Notice must include
the “[a]ccount or invoice number(s)” and the “[a]mount past due.”
20111026‐CA 20 2013 UT App 1North Fork v. Bennion
See id. § 17B‐2‐805(1)(d). In addition, the Form Notice must state, in
relevant part,
You are further notified that if you do
not pay the past due amount and the
$20 collection costs within 30 calendar
days from the day on which this notice
was mailed to you, an appropriate civil
legal action may be filed against you
for the past due amount, interest, court
costs, attorney’s fees, and damages in
an amount equal to the greater of $100
or triple the past due amounts, but the
combined total of all these amounts may
not exceed $200 if your property is
residential.
See id. (emphasis added).
¶40 The plain language of the Form Notice unambiguously
provides that while a special service district can recover up to triple
the past due amounts in overdue fees, interest, court costs,
damages, and attorney fees when the delinquent customer is a
commercial property owner, the maximum amount recoverable
against a residential property owner may not exceed $200 for “the
combined total of all these amounts.” Id. There is simply no way to
read the Form Notice as limiting only the collection costs to $200,
as the District suggests. And we can conceive of no reason that the
Utah Legislature would include a Form Notice that does not
accurately inform the residential customer of the potential liability.
Additionally, section 17B‐2‐801 defines “[c]ollection costs” as “an
amount, not to exceed $20, to reimburse a [special service] district
for expenses associated with its efforts to collect past due service
fees from a customer.” Id. § 17B‐2‐801(1) (current version at id.
§ 17B‐1‐904 (2009)). If collection costs cannot, by definition, exceed
$20, a $200 limit on the recovery of collection costs as argued by the
20111026‐CA 21 2013 UT App 1North Fork v. Bennion
District would create an inherent inconsistency within Title 17B,
Chapter 2, Part 8, as a whole.
¶41 Appellate courts have a “duty to read and interpret
statutory provisions in harmony with other provisions in the same
statute and with other related statutes.” Jeffries, 2009 UT 57, ¶ 9.
Essentially, “statute[s] should be construed . . . so that no part [or
provision] will be inoperative or superfluous, void or insignificant,
and so that one section will not destroy another.” Id. (citation and
internal quotation marks omitted). When we harmonize the $200
recovery limitation for residential properties in a civil suit with
other provisions of section 17B‐2‐804, it is not absurd, inoperative,
superfluous, void, or insignificant. See id. ¶¶ 8–9. First, the $200
recovery cap in section 17B‐2‐804(3)(b)(i) has limited applicability
because it does not apply to commercial property owners or other
non‐residential owners. See Utah Code Ann. § 17B‐2‐804(2)(b)(i)(B)
(LexisNexis 2004) (current version at id. § 17B‐1‐904(5)(b)(i) (2009)).
Additionally, there is nothing in section 17B‐2‐804(3) that prevents
the District from bringing a single civil action to recover the $200
available each time a residential customer fails to pay past due
service fees that were the subject of a Form Notice. See id. § 17B‐2‐
804(3)(a) (2004). The Form Notice indicates that “if [a customer
does] not pay the past due amount,” then the District may pursue
a civil action and collect as much as $200. See id. § 17B‐2‐805(1)(d)
(current version at id. § 17B‐1‐904(4)(a)(iv) (2009)). That “[a]mount
past due,” must be listed in the Form Notice, thereby tying the $200
recovery to the amount stated in the Form Notice. See id. The
District could send multiple Form Notices to a single residential
customer, stating past due amounts from different invoices, and
then bring a single civil action to collect the $200 available in past
due service fees, costs, interest, and attorney fees for the failure to
pay the amount stated in each Form Notice.
¶42 Furthermore, the provisions in section 17B‐2‐804 are not
contradictory to or superfluous of the $200 recovery limitation. See
id. §§ 17B‐2‐804, ‐805 (2004). Section 17B‐2‐804(2) provides that the
District may offer to forego civil action if the customer pays an
20111026‐CA 22 2013 UT App 1North Fork v. Bennion
amount, consisting of past due service fees, collection costs,
prelitigation damages, and attorney fees, that may not exceed $100
when the customer’s property is residential. See id. § 17B‐2‐804(2).
Rather than showing a legislative intent contrary to the plain
language of section 17B‐2‐804(3)(b)(i)(B), this provision indicates
that the legislature has consistently provided special service
districts with minimal financial incentive to pursue monetary
sanctions against residential property owners.
¶43 The other remedies available to the District for the
nonpayment of residential service fees coexist harmoniously with
the $200 limitation on recovery prescribed by section 17B‐2‐804.
Notably, the Utah Legislature provided special service districts
with the remedy of discontinuing services in the event of
nonpayment. See id. § 17B‐2‐802 (current version at id. § 17B‐1‐903
(2009)). Likewise, a special service district can “certify past due
service fees and other amounts for which the customer is liable . . .
to the treasurer or assessor of the county in which the customer’s
property is located” and, upon certification, that amount
“become[s] a lien on the customer’s property . . . .” See id. § 17B‐2‐
803(1) (current version at id. § 17B‐1‐902 (2009)). Rather than
conflicting with these alternative remedies, section 17B‐2‐804(5)
expressly indicates that “[t]his chapter may not be construed to
limit a local district that furnishes water or provides sewer service
from obtaining relief to which it may be entitled under other
applicable statute or cause of action.” Id. § 17B‐2‐804(5) (2004).
Thus, the plain reading of section 17B‐2‐804 functions
harmoniously with the rest of Title 17B, Chapter 2, Part 8, by
allowing a special service district to discontinue services or to file
a lien against a delinquent residential property owner, but
permitting it to recover only limited damages in a civil action.
¶44 While “[w]e recognize that a court should not follow the
literal language of a statute if its plain meaning works an absurd
result,” we also acknowledge our duty “to interpret the words used
by the legislature, not to correct or revise them.” Stewart v. Bova,
2011 UT App 129, ¶ 21, 256 P.3d 230 (citations and internal
20111026‐CA 23 2013 UT App 1North Fork v. Bennion
quotation marks omitted). The plain language of section 17B‐2‐804
limits a local district’s recovery of delinquent fees, collection costs,
interest, court costs, reasonable attorney fees, and damages in a
civil action against a residential property to $200 when the
customer fails to pay after receiving notice as provided in section
17B‐2‐805. This result is not “so absurd that the legislative body
which authored the legislation could not have intended it.” See In
re Z.C., 2007 UT 54, ¶ 13, 165 P.3d 1206. The limitation on recovery
under each notice is indicative of the Utah Legislature’s policy
choice in favor of encouraging a local district to discontinue
services quickly or place a lien on the property, rather than
continuing to provide services and later seeking substantial
damages from a residential property owner. The wisdom of that
policy decision is reflected by the facts of this case, where the
residential property owner requested that services be discontinued
to avoid mounting excess water fees.
¶45 The plain language of section 17B‐2‐804 provides that a
special service district may not recover more than $200 from a
residential customer in a civil action brought after the customer has
failed to pay within thirty days after statutory notice is sent. For
each such failure to pay after statutory notice, the $200 limit applies
to the combined total of past due service fees, collection costs,
interest, court costs, reasonable attorney fees, and damages. See
Utah Code Ann. § 17B‐2‐804(3)(b)(i). Thus, for any fees incurred
between May 3, 2004, and April 29, 2007, the period that section
17B‐2‐804 was in effect and applicable to special service districts,
the District’s total recovery is limited to $200 for each Form Notice
that it sent to Bennion identifying those past due amounts.8 See id.
8. At oral argument, Bennion acknowledged that the record on
appeal does not indicate whether the District sent Bennion one or
more Form Notices for fees incurred during this period and that
“perhaps” the District sent a Form Notice once a month, but
ultimately he claims that there was only one Form Notice sent
(continued...)
20111026‐CA 24 2013 UT App 1North Fork v. Bennion
§ 17B‐2‐804(3)(b)(i) (current version at id. § 17B‐1‐904(5)(b)(i)
(2009)); id. § 17B‐2‐805 (2004) (current version at id. § 17B‐1‐
904(4)(a)(iv) (2009)). We therefore remand for determination of
proper fees for the period of May 3, 2004, through April 29, 2007.
2. Section 17B‐1‐904
¶46 When the Utah Legislature repealed and renumbered
section 17B‐2‐804 as section 17B‐1‐904, it included the Form Notice
language. Compare Utah Code Ann. § 17B‐2‐805 (LexisNexis 2004),
with id. § 17B‐1‐904(4)(a)(iv) (2009). This section remains in effect
today. Because the language of section 17B‐1‐904 is identical to that
used in section 17B‐2‐804, we interpret these provisions
consistently as limiting the District’s recovery to $200 for the
combined total of the water fees, costs, interest, and attorney fees
that remain unpaid after statutory notice is sent to a residential
customer.
¶47 The trial court included prejudgment interest of $61,155 in
the judgment it entered, and it also awarded postjudgment interest
of 12% per annum until that judgment is paid in full.9 Bennion
argues that the trial court erred by failing to apply the $200 per
Form Notice limitation to the interest accrued from the date section
17B‐1‐904 became effective to special service districts, May 5, 2008,
through the present.10 See id. § 17D‐1‐106(f) (2009) (current version
at id. § 17D‐1‐106(1)(g) (Supp. 2012)) (applying the restrictions to
8. (...continued)
during the period.
9. The water fees at issue in this case were incurred from February
2004 through October 2007.
10. Because Bennion does not argue that the trial court’s award of
base user fees accumulated during that time period is also subject
to the $200 limitation under section 17B‐1‐904, we do not disturb
the trial court’s ruling on those fees.
20111026‐CA 25 2013 UT App 1North Fork v. Bennion
special service districts)). Although the District disputes the
applicability of section 17B‐2‐804, it offers no response to Bennion’s
argument that when the Utah Legislature made section 17B‐1‐904
applicable to special service districts on May 5, 2008, it limited all
sums due, including interest, from that date forward to $200 per
Form Notice.
¶48 In considering whether the trial court’s order incorrectly
included interest at 12% per annum after May 8, 2008, we again
begin with the plain language of the statute. See In re R.B.F.S., 2012
UT App 132, ¶ 15, 278 P.3d 143. Section 17B‐1‐904, like its
predecessor section 17B‐2‐804, provides that before “a customer is
liable to a [special] service district for past due service fees and
collection costs,” the special service district must “mail . . . the
customer notice as provided in Subsection (4).” See Utah Code Ann.
§ 17B‐1‐904(2) (2009); id. § 17D‐1‐106(1)(f). Section 17B‐1‐904(4)
requires that the notice inform the customer that,
if you do not pay the past due amount
and the $20 collection costs within 30
calendar days . . . , an appropriate civil
legal action may be filed against you
for the past due amount, interest, court
costs, attorney fees, and damages . . . ,
but the combined total of all these
amounts may not exceed $200 if your
property is residential.
See id. § 17B‐1‐904(4)(a)(iii). As with section 17B‐2‐805, section 17B‐
1‐904(4) leaves no doubt that the total recovery available to the
district against a residential customer who does not pay within
thirty days of notice is $200. Compare id. § 17B‐1‐904(4), with id.
§ 17B‐2‐805 (2004); see also id. § 17B‐1‐904(5)(b) (2009) (providing
that a district’s recovery in a civil action against a residential
customer “may not exceed $200”). The components of the amount
limited to $200 expressly includes “interest.” See id. § 17B‐1‐
904(4)(a)(iii); id. § 17B‐1‐904(5)(b)(i)(A). Thus, we agree with
20111026‐CA 26 2013 UT App 1North Fork v. Bennion
Bennion that the Utah Legislature has limited the amount of
interest that the District can recover.
¶49 However, as previously discussed, the $200 limitation in
section 17B‐1‐904 is applicable to the past due amounts identified
by “[a]ccount or invoice number(s)” in the Form Notice. See id.§ 17B‐1‐904(4)(a)(iii). The interest limitation in the statute also
relates specifically to the fees that are the subject of the Form
Notice. See id. § 17B‐1‐904(5)(a). For fees incurred before the
adoption of section 17B‐2‐804, or during the one‐year gap between
the adoption of section 17B‐1‐904 and the adoption of section 17D‐
1‐106, there was no requirement that the District send a Form
Notice, and likewise no limitation on the principal amount or
interest it could recover. Thus, we reject Bennion’s argument that
the trial court improperly awarded interest at 12% per annum on
unpaid water fees first incurred during those periods. With respect
to water fees incurred while section 17B‐2‐804 or section 17B‐1‐904
were applicable to special service districts, however, the Utah
Legislature has expressly limited the District’s recovery, inclusive
of interest, to $200 under each Form Notice. Therefore, the trial
court could not ignore that express limitation by awarding the
District interest over the $200 limit incurred while either of those
statutes applied to special service districts. We therefore remand
for a determination of that amount.
II. Ownership and Maintenance of the Bennion Line
¶50 Next, Bennion contends that summary judgment was
improperly granted in the Current Case because the evidence
provided to the trial court raised an issue of material fact
concerning whether the District was responsible for the
maintenance of the Bennion Line.11 Specifically, he contends that
11. Bennion also claims that even if the District would not
generally be responsible for maintenance of the Bennion Line, it
(continued...)
20111026‐CA 27 2013 UT App 1North Fork v. Bennion
under controlling Utah precedent, the District became responsible
for maintenance of the Bennion Line after the 2002 court granted an
easement to the District in its order of immediate occupancy. Based
on that proposition, Bennion argues that the District is responsible
for any excess water fees from the date of the order, September 22,
2006, until October 2007, when the District repaired the Bennion
Line and the excess water charges ceased. The District counters that
the trial court correctly determined that Bennion was responsible
for water released from the Bennion Line.12
¶51 Our task of reviewing the correctness of the trial court’s
summary judgment ruling is complicated by its execution of an
order prepared by counsel and captioned as “Findings of Fact and
Conclusions of Law on Plaintiff’s Motion for Summary Judgment.”
See Thayne v. Beneficial Utah, Inc., 874 P.2d 120, 125 (Utah 1994)
(noting that the trial court “shall . . . issue a brief written statement
of the ground for its decision” granting summary judgment, but
“need not enter findings of fact and conclusions of law” (citations
and internal quotation marks omitted)). Because summary
11. (...continued)
undertook that responsibility when it acquired an easement over
Bennion’s property through the order of immediate occupancy.
Because Bennion did not preserve this issue by first raising it in the
trial court, we decline to consider it. See Utah R. App. P. 24(a)(5);
Marchand v. Marchand, 2006 UT App 429, ¶ 8, 147 P.3d 538 (“As a
general rule, appellate courts will not consider an issue . . . raised
for the first time on appeal unless the trial court committed plain
error or the case involves exceptional circumstances.” (citation and
internal quotation marks omitted)).
12. The District also contends that because Bennion has failed to
marshal the evidence, this court should assume the findings were
correct and adequately supported by the record. However,
marshaling has no application to a statement of uncontested facts
supporting summary judgment.
20111026‐CA 28 2013 UT App 1North Fork v. Bennion
judgment is appropriate only when there are no issues of material
fact in dispute, we assume that these “findings” were meant to
reflect the uncontested facts supporting the trial court’s decision.
See Essential Botanical Farms, LC v. Kay, 2011 UT 71, ¶ 12, 270 P.3d
430 (“Our review is limited to determining whether the district
court correctly applied the summary judgment standard in light of
the undisputed material facts.” (citations and internal quotation
marks omitted)).
¶52 Those undisputed facts include that “[the District] is not
responsible for maintenance of lateral water lines that connect to
the main water lines of [the District’s] water delivery system.
Rather, individual property owners are responsible for the
maintenance of lateral water lines servicing their properties.”
Additionally, the undisputed facts state, “Prior to November 1997
through March 31, 2009, Bennion has been the owner of [the
Bennion Line],” and, “Bennion is responsible for water taken out
of the [Bennion Line] regardless of whether or not he personally
utilizes the water.” For convenience, we refer to these undisputed
facts as the Responsible Party Facts.
¶53 Although couched as a challenge to a factual finding,
Bennion essentially contends that the Responsible Party Facts are
disputed. However, he is precluded from disputing them by the
doctrine of res judicata, which refers “to the overall doctrine of the
preclusive effects to be given to judgments.” Moss v. Parr Waddoups
Brown Gee & Loveless, 2012 UT 42, ¶ 20, 285 P.3d 1157 (citations and
internal quotation marks omitted). Res judicata includes “two
branches”—“claim preclusion and issue preclusion.” Id. (citations
and internal quotation marks omitted). “Claim preclusion
corresponds to causes of action; issue preclusion corresponds to the
facts and issues underlying causes of action.” Id. (citation and
internal quotation marks omitted). Under issue preclusion,
“‘parties or their privies’” are prevented “‘from relitigating facts
and issues in the second suit that were fully litigated in the first
suit.’” Id. ¶ 23 (emphasis omitted) (quoting Jensen ex rel. Jensen v.
Cunningham, 2011 UT 17, ¶ 41, 250 P.3d 465).
20111026‐CA 29 2013 UT App 1North Fork v. Bennion
Issue preclusion applies only when the
following four elements are satisfied:
(i) the party against whom issue
preclusion is asserted was a party to or
in privity with a party to the prior
adjudication; (ii) the issue decided in
the prior adjudication was identical to
the one presented in the instant action;
(iii) the issue in the first action was
completely, fully, and fairly litigated;
and (iv) the first suit resulted in a final
judgment on the merits.
Id. (citations and internal quotation marks omitted).
¶54 Bennion’s challenge to the Responsible Party Facts is barred
by the issue preclusion branch of the res judicata doctrine because
this issue was litigated and determined in the 2002 Case. There, the
2002 court ruled that “[the District] is not responsible for
maintenance of lateral water lines that connect to the main water
lines of [the District’s] water delivery system. Rather, individual
property owners are responsible for the maintenance of lateral
water lines servicing their properties.” Additionally, the 2002 court
ruled that “[p]rior to November 1997 through [November 25, 2008],
[Bennion] has been the owner of [the Bennion Line] . . . .” The 2002
court further determined that “[Bennion] is responsible for the
water that is taken out of [the District’s] water system by the
[Bennion Line] regardless of whether [Bennion] actually uses such
water or whether the water is lost through leaks located in the
[Bennion Line].” The arguments Bennion raised in the 2002 Case
about ownership and maintenance of the water line are identical to
the arguments that he makes in the Current Case. The 2002 Case
was between the same parties as the Current Case, the District and
Bennion; the issue was completely, fully, and fairly litigated in a
trial on the merits; and because Bennion did not timely appeal the
2002 court’s decision, see North Fork Special Serv. Dist. v. Bennion,
20111026‐CA 30 2013 UT App 1North Fork v. Bennion
2006 UT App 447U (mem.), it is final. As a result, Bennion is
precluded from challenging the Responsible Party Facts in the
Current Case by the issue preclusion branch of res judicata. See
Collins v. Sandy City Bd. of Adjustment, 2002 UT 77, ¶¶ 12–13, 52
P.3d 1267.
III. Attorney Fees
¶55 Finally, Bennion asserts that the trial court erred when it
awarded the District its attorney fees under Utah Code section 78B‐
5‐825 because, despite the trial court’s finding that Bennion’s
actions and continued litigation were pursued in bad faith, his
defenses were meritorious. Section 78B‐5‐825 provides, “In civil
actions, the court shall award reasonable attorney fees to a
prevailing party if the court determines that the action or defense
to the action was without merit and not brought or asserted in
good faith.” Utah Code Ann. § 78B‐5‐825(1) (LexisNexis 2012).
“Accordingly, a finding of both lack of merit and bad faith are
required to award attorney fees.” In re Olympus Constr., LC, 2009
UT 29, ¶ 29, 215 P.3d 129.
¶56 In determining whether there is merit to a claim, an
appellate court focuses on whether the claim was “frivolous or of
little weight or importance having no basis in law or fact.” Warner
v. DMG Color, Inc., 2000 UT 102, ¶ 22, 20 P.3d 868 (citation and
internal quotation marks omitted). Where an appellate court finds
as a matter of law that a party’s claim has merit, it need not reach
the second, factual “bad faith” element of section 78B‐5‐825. See In
re Olympus Constr., 2009 UT 29, ¶ 8 n.1.
¶57 Bennion presented arguments to the trial court that sections
17B‐2‐804 and 17B‐1‐904 limit the water fees, costs, attorney fees,
and interest that a special service district can recover from a
residential customer in a civil action brought after the customer
refuses to pay the amounts identified in a Form Notice. In granting
the District’s motion for summary judgment, the trial court
determined that “Bennion’s actions and continued litigation had
20111026‐CA 31 2013 UT App 1North Fork v. Bennion
been pursued in bad faith.” However, the trial court made no
determination regarding the merit of Bennion’s claims. Moreover,
our analysis that sections 17B‐2‐804 and 17B‐1‐904 plainly limit the
District’s recovery establishes that Bennion’s claims were neither
“frivolous” nor “of little weight or importance having no basis in
law or fact.” See Warner, 2000 UT 102, ¶ 22 (citation and internal
quotation marks omitted). Accordingly, we reverse the trial court’s
award of attorney fees.
CONCLUSION
¶58 The trial court erred in entering summary judgment in
amounts exceeding $200 per Form Notice for the water fees
incurred while either section 17B‐2‐804 or section 17B‐1‐904 were
in effect and applicable to special service districts. See Utah Code
Ann. § 17B‐2‐804 (LexisNexis 2004); id. § 17B‐1‐904 (2009); id. § 17A‐
1‐205 (2004); id. § 17D‐1‐106 (2009). Because Bennion’s claims were
not without merit, the trial court erred in awarding attorney fees to
the District under section 78B‐5‐825. See id. § 78B‐5‐825 (2012).
¶59 The Summary Judgment is vacated, with instructions to
enter a new judgment as follows:
1. The actual past due water fees from February 28,
2004, until the adoption of sections 17B‐2‐804 and
17A‐1‐205 on May 3, 2004, plus all collection costs,
interest, attorney fees, and damages incurred with
respect to those past due service fees;
2. An amount up to $200 for the combined total of the
past due service fees, collection costs, interest, court
costs, attorney fees, and damages for each Form
Notice the District sent to Bennion for water fees
incurred from May 3, 2004, through April 29, 2007;
20111026‐CA 32 2013 UT App 1North Fork v. Bennion
3. The actual past due water fees incurred from the
repeal of section 17A‐1‐205 on April 30, 2007, until
the adoption of section 17D‐1‐106 on May 5, 2008,
plus all collection costs, interest, attorney fees, and
damages incurred with respect to those past due
service fees; and
4. Interest in an amount that does not exceed $200 for
each Form Notice that the District sent to Bennion for
water fees incurred on or after May 5, 2008.
____________________
20111026‐CA 33 2013 UT App 1