Wing v. Code

2016 UT App 230THE UTAH COURT OF APPEALS
HILARY WING,
Appellant,
v.
CATHY CODE,
Appellee.
Opinion
No. 20130854-CA
Filed November 17, 2016
Second District Court, Ogden Department
The Honorable Noel S. Hyde
The Honorable Michael D. Lyon
No. 060906802
L. Miles LeBaron and Dallin T. Morrow, Attorneys
for Appellant
Karra J. Porter and Phillip E. Lowry, Attorneys
for Appellee
JUDGE J. FREDERIC VOROS JR. authored this Opinion, in which
JUDGES GREGORY K. ORME and KATE A. TOOMEY concurred.
VOROS, Judge:
¶1 In this opinion we address one of four appeals arising
from a single lawsuit over a failed real estate deal. 1 The lawsuit
involves a dispute over a real estate sales commission. On one
hand are a real estate brokerage and related individuals
(Plaintiffs); on the other, the property sellers.
1. The other three appeals are discussed in Elite Legacy Corp. v.
Schvaneveldt, 2016 UT App 228 (addressing case 20130746-CA
and 20140978-CA) and Wing v. Still Standing Stable LLC, 2016 UT
App 229 (addressing case 20130768-CA).
Wing v. Code
¶2 In this appeal, Hilary “Skip” Wing, a principal broker for
Aspenwood Real Estate Corporation and its successor, Elite
Legacy Corporation, challenges a trial court ruling ordering him
to pay defendant Cathy Code’s attorney fees. We affirm.
BACKGROUND
¶3 A more complete statement of the background facts
common to all four related appeals is set forth in Elite Legacy
Corp. v. Schvaneveldt, 2016 UT App 228. Here, we recite a few of
the more salient facts from that opinion along with pertinent
facts not recited in that opinion.
¶4 Plaintiffs in this action sued to recover a real estate sales
commission owed (they believed) under a For Sale By Owner
Agreement (the FSBO). They originally named Still Standing
Stable LLC (Still Standing) as the only defendant but later added
Charles Schvaneveldt and Code. The original plaintiffs were
identified as Tim Shea and Re/Max Elite, an assumed name.
Early in the litigation, Code, Charles Schvaneveldt, and Still
Standing (the Defendants) repeatedly argued that, without a
principal broker, Plaintiffs lacked standing to sue. In response,
Wing—a licensed principal broker—and two corporations joined
as Plaintiffs. Defendants thereafter temporarily abandoned those
standing arguments.
¶5 The court determined on summary judgment that
Plaintiffs had earned a commission but allowed the case to
proceed to trial on the question of who owed the commission.
Before trial, the court, without objection from Schvaneveldt or
Code, dismissed Still Standing from the case. At the close of
evidence, Code moved for a directed verdict, which was
granted. These rulings left Schvaneveldt as the last remaining
defendant, and the jury found that he owed the commission.
20130854-CA 2 2016 UT App 230Wing v. Code
¶6 Having prevailed at trial, Code sought, and the court
granted, an award of attorney fees under the FSBO. Next, the
trial court addressed who owed the fees. Wing maintained that
he was not personally liable, because he had never claimed to be
a party to the FSBO. Instead, he became a plaintiff solely to cure
any standing defect. But the trial court ruled that because Wing
“asserted a cause of action against Ms. Code based upon the
FSBO, and because Ms. Code prevailed on that cause of action,
Mr. Wing, like the other plaintiffs, is liable for Ms. Code’s
attorney fees.”
¶7 The trial court explained that “[t]he reasons that Plaintiffs
chose to add Mr. Wing as a party in this action . . . are
immaterial. Mr. Wing must accept the natural consequences of
naming himself as a plaintiff.” The court also relied on the fact
that Wing had sought and received an attorney fee award under
the very provision of the FSBO he later maintained did not apply
to him. Wing appeals.
ISSUES AND STANDARDS OF REVIEW
¶8 Wing challenges the trial court’s ruling that he, along with
the other plaintiffs, was personally liable to pay Code’s attorney
fees. He raises three claims of error with respect to the ruling.
¶9 First, he contends that he cannot be personally liable
under the Reciprocal Fee Statute and the FSBO because he “was
not a party to the FSBO and never asserted that he was a party to
it.” Second, he contends that he was involved in the lawsuit in a
representative capacity only. Third, he contends that he should
not be personally liable for attorney fees under the FSBO because
Utah law does not allow him to seek attorney fees under the
FSBO.
¶10 A trial court’s decision whether the Reciprocal Fee Statute
applies to a request for attorney fees is a question of law
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reviewed for correctness. Bilanzich v. Lonetti, 2007 UT 26, ¶¶ 9–
10, 160 P.3d 1041. Interpretation of a contract is likewise a
question of law reviewed for correctness. Shiozawa v. Duke, 2015
UT App 40, ¶ 24, 344 P.3d 1174.
ANALYSIS
I. Party Status
¶11 Wing first contends that he cannot be personally liable for
Code’s attorney fees because he “was not a party to the FSBO
and never asserted that he was a party to it.”
¶12 “In Utah, attorney fees are awardable only if authorized
by statute or by contract.” Dixie State Bank v. Bracken, 764 P.2d
985, 988 (Utah 1988). Here, Plaintiffs asserted a claim for breach
of the FSBO. Section 8 of the FSBO grants attorney fees to the
prevailing party:
8. ATTORNEY FEES. Except as provided in Section
7 [dispute resolution via mediation], in any action
or proceeding arising out of this Commission
Agreement involving the Seller and/or the
Company, the prevailing party shall be entitled to
reasonable attorney fees and costs.
Under Utah’s Reciprocal Fee Statute, courts may award attorney
fees to the prevailing party of a contract dispute so long as the
contract provided for the award of attorney fees to at least one of
the parties:
A court may award costs and attorney fees to
either party that prevails in a civil action based
upon any promissory note, written contract, or
other writing executed after April 28, 1986, when
the provisions of the promissory note, written
20130854-CA 4 2016 UT App 230Wing v. Code
contract, or other writing allow at least one party to
recover attorney fees.
Utah Code Ann. § 78B-5-826 (LexisNexis 2012). Our supreme
court has held that “an action is ‘based upon’ a contract under
the statute if a ‘party to the litigation assert[s] the writing's
enforceability as basis for recovery.’” Hooban v. Unicity Int’l, Inc.,
2012 UT 40, ¶ 22, 285 P.3d 766 (alteration in original) (quoting
Bilanzich, 2007 UT 26, ¶ 15). That condition results when a
litigant “rested his claims in the district court on a right to
enforce the [contract]” even if he is ultimately “deemed a
stranger to the contract” with “no rights to enforce it or
obligations under it.” Id. ¶¶ 22, 24.
¶13 Wing contends that he cannot be personally liable for
Code’s attorney fees because, unlike the losing party in Hooban,
he “has never asserted that he was a party to a contract.”
However, the trial court based its fee award against Wing on the
fact that Wing “added himself as a plaintiff” to this lawsuit.
And, as the trial court explained, Wing sought and won an
attorney fee award against Schvaneveldt under the very
provision he argues does not apply to him:
Mr. Wing cannot receive all of the benefits of the
FSBO without accepting all of the risks associated
with that agreement. Here, Mr. Wing successfully
pursued an action against the defendant
[Schvaneveldt], and based on the very attorney
fees provision he now seeks to avoid liability for,
recovered attorney fees against [Schvaneveldt].
Allowing Mr. Wing to both recover fees from Mr.
Schvaneveldt and avoid liability for Ms. Code’s
attorney fees would be incongruous.
In seeking fees against Schvaneveldt, Wing’s counsel argued,
“We think [Wing] gets them because statutorily, he’s allowed to
enforce that contract,” and, “[Wing] is, in fact, a party, able to
20130854-CA 5 2016 UT App 230Wing v. Code
enforce the FSBO . . . .” Thus, Wing was a party to a cause of
action based solely on a contract, prevailed in that cause of
action, and was awarded attorney fees under the very contract
provision he now claims does not apply to him.
¶14 We conclude that Wing’s position is weaker, not stronger,
than Hooban’s. Like Hooban, Wing “rested his claims in the
district court on a right to enforce the [contract]”; but whereas
Hooban was ultimately ruled to have “no rights to enforce” that
contract, Wing did successfully enforce the contract and was
awarded attorney fees under it. See Hooban, 2012 UT 40, ¶¶ 22,
24. Accordingly, we affirm the ruling of the trial court on this
issue.
II. Representative Capacity
¶15 Wing next contends that he was involved in the suit in a
representative capacity only. He argues that both the record and
the trial court’s findings establish that he “was not personally
involved.”
A. The Record
¶16 Wing, a principal broker, was added as a plaintiff to this
lawsuit in response to Defendants’ assertion that none of the
entities named as plaintiffs was qualified to sue for a
commission under section 61-2f-409 of the Utah Code.
Subsection (2)(b) of that statute seems to indicate that only a
principal broker may sue to recover a real estate commission:
An action for the recovery of a fee, commission, or
other compensation may only be instituted and
brought by the principal broker with whom a sales
agent or associate broker is affiliated.
Utah Code Ann. § 61-2f-409(2)(b) (LexisNexis 2011). But see Id.§ 61-2f-409(1)(b)(iii) (stating that a person may bring an action
for the recovery of a commission if the person is “an entity that,
20130854-CA 6 2016 UT App 230Wing v. Code
under the records of the Division of Real Estate, is affiliated with
a principal broker”).
¶17 Wing does not argue that section 409’s requirement may
be satisfied by a broker suing solely in a representative capacity. 2
He does not point to any legal document identifying him as
acting solely in a representative capacity. And he does not claim
that he was identified in the case caption or elsewhere in the
pleadings as suing solely in his representative capacity. Rather,
he supports his argument merely by citing his own deposition
testimony where he stated that he was not seeking any personal
money from the lawsuit.
¶18 But Wing has not shown that the legal question of
whether a litigant is suing in a personal capacity or a
representative capacity may be resolved simply by asking him,
even under oath. Furthermore, Code cites numerous statements
on the record from Wing’s counsel asserting that Wing was to
personally receive the first $10,000 of any recovery and thus “has
a stake” in the lawsuit and a “dog in this fight.” In short, Wing
has not demonstrated that the record establishes that he sued
Defendants in a representative capacity only.
B. The Trial Court’s Findings
¶19 Wing contends that the trial court’s findings establish that
he sued in a representative capacity only. On a motion for
clarification, the trial court did appear to rule that Wing’s role
was representative only:
[T]o the extent that [Wing] is identified as a party
in these proceedings, or as the holder of any
claims, that identification is [Wing], in his
representative capacity, as principal broker for the
2. Nor do we express an opinion on that question.
20130854-CA 7 2016 UT App 230Wing v. Code
brokerage, or as an agent or representative of the
brokerage, and does not represent his individual
and personal ownership of those claims.
However, Code argues that this ruling had a limited scope,
specifically, that it dealt with Wing’s role only as a judgment
creditor, not as a judgment debtor. And in oral argument on
appeal, counsel for Wing acknowledged that this ruling did not
implicate Wing’s status as a judgment debtor.
¶20 For this reason, we conclude that the quoted finding does
not bear on the question on appeal, namely, whether Wing
personally owes the judgment entered against him. Wing’s claim
of error based on that finding accordingly fails.
III. The FSBO
¶21 Finally, Wing contends that he should not be personally
liable for attorney fees under the FSBO because Utah law does
not allow him to seek attorney fees under the FSBO.
¶22 In support of his claim, Wing relies on Fericks v. Lucy Ann
Soffe Trust, 2004 UT 85, 100 P.3d 1200. Fericks does not control the
present case. Fericks held that a seller’s real estate agent may not
recover attorney fees under the fee provision of a real estate
purchase agreement. The supreme court reasoned that “an
agency relationship with a principal to a contract does not give
the agent the authority to enforce a contractual term for the
agent’s own benefit.” Id. ¶ 24. But here, the attorney fee
provision at issue appears in the FSBO, not the REPC. And
Plaintiffs, including Wing, sued as principals to enforce their
rights under the FSBO.
¶23 Wing also argues that he should not be personally liable
for Code’s attorney fees because he “was added to the case only
to bolster Elite Legacy’s and Aspenwood’s claim to standing.”
He explains that he became a plaintiff only to put a stop to
20130854-CA 8 2016 UT App 230Wing v. Code
Defendants’ repeated standing motions, not because section 61-
2f-409 actually required the broker—as opposed to the
brokerage—to bring suit. Thus, he reasons, it would be “unjust”
to hold him personally liable.
¶24 Because Wing did in fact join the lawsuit as a plaintiff, we
need not decide whether Wing’s presence as a plaintiff was
essential to satisfy section 61-2f-409. But we agree with the trial
court that “[t]he reasons that Plaintiffs chose to add Mr. Wing as
a party to this action . . . are immaterial. Mr. Wing must accept
the natural consequences of naming himself a plaintiff.”
¶25 Finally, Wing acknowledges that Code should receive an
award of attorney fees as a prevailing party, just as Plaintiffs
received an award of attorney fees under the same provision of
the FSBO against Schvaneveldt. But he argues that it is unfair to
leave him on the hook for Code’s fees when he “will never
collect a dime” of the fee award against Schvaneveldt, because
the latter “award goes exclusively” to the corporate plaintiffs.
¶26 Wing relies on an inconsistency created by the October
2014 ruling of the trial court. That ruling in effect treats Wing as
a representative for purposes of collecting the fee award from
Schvaneveldt. However, as Wing’s counsel has acknowledged,
the court explicitly limited its ruling to Wing’s role as a
judgment creditor, stating, “There is no ruling with respect to
Mr. Wing’s status as a judgment debtor.” While we might
disagree with the trial court’s ruling that created this
inconsistency, Wing has shown no legal reason to resolve the
inconsistency in favor of his representative capacity rather than
in favor of his personal capacity, and we see none. We therefore
decline to do so.
IV. Attorney Fees on Appeal
¶27 Code seeks an award of attorney fees on appeal on the
ground that the FSBO awards attorney fees to the prevailing
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party. When under a contractual fee provision “a party is
entitled to attorney fees below and prevails on appeal, that party
is also entitled to fees reasonably incurred on appeal.” Utah
Transit Auth. v. Greyhound Lines, Inc., 2015 UT 53, ¶ 64, 355 P.3d
947. Code received attorney fees below and has prevailed on
appeal. Accordingly, we award Code reasonable fees incurred in
connection with this appeal in an amount to be determined by
the trial court.
CONCLUSION
¶28 For the foregoing reasons, the judgment of the trial court
is affirmed and the case is remanded for a determination of
Code’s reasonable attorney fees.
20130854-CA 10 2016 UT App 230