Robinson v. Robinson

2016 UT App 33THE UTAH COURT OF APPEALS
MICHAEL S. ROBINSON,
Appellant and Cross-appellee,
v.
DEBRA J. ROBINSON,
Appellee and Cross-appellant.
Opinion
No. 20140470-CA
Filed February 19, 2016
Third District Court, West Jordan Department
The Honorable Charlene Barlow
No. 110412982
F. Kevin Bond and Budge W. Call, Attorneys
for Appellant
Dean C. Andreasen and Diana Telfer, Attorneys
for Appellee
JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
which JUDGE GREGORY K. ORME concurred. JUDGE STEPHEN L.
ROTH concurred in Parts I, II, XI, and XII, and concurred in the
result, without opinion, in Parts III, IV, V, VI, VII, VIII, IX, and X.
CHRISTIANSEN, Judge:
¶1 Michael S. Robinson (Husband) appeals from the district
court’s handling and eventual grant of both a motion to dismiss
and a motion for summary judgment in favor of defendants
Debra J. Robinson (Wife), Natalie D. Larson, Matthew R. Larson,
Kelly D. Larson, Derrick D. Larson, and Kaisa Cardall. Wife
cross-appeals the district court’s denial of an award of attorney
fees. We affirm.
Robinson v. Robinson
BACKGROUND
¶2 This piece of satellite litigation orbits Husband and Wife’s
contentious divorce. See generally Robinson v. Robinson, 2016 UT
App 32; Robinson v. Jones Waldo Holbrook & McDonough, 2016 UT
App 34; Robinson v. Robinson, 2010 UT App 96, 232 P.3d 1081.
¶3 After filing for divorce in February 2007, Husband and
Wife attempted to disentangle the real property interests within
their marital assets. On November 2, 2007, Husband and Wife
came to a stipulated property settlement agreement (the
Stipulation). See Robinson v. Robinson, 2016 UT App 32, ¶ 2
(discussing the terms of the Stipulation). Husband later moved
to set aside the Stipulation, alleging that performance of his part
of the Stipulation was impossible, that there had been a mutual
mistake, and that Wife had fraudulently induced Husband to
enter the Stipulation. The district court denied Husband’s
motion and incorporated the Stipulation into a decree of divorce
entered on December 31, 2008. Husband appealed the denial of
his motion, arguing impossibility and mutual mistake, but he
did not raise a claim of fraud in the inducement. See generally
Robinson v. Robinson, 2010 UT App 96, 232 P.3d 1081. This court
affirmed. See generally id.¶4 On September 7, 2011, Husband filed this civil action
alleging fraud, breach of fiduciary duty, conversion, and civil
conspiracy. His fraud and breach of fiduciary duty claims
related to three causes of action, all of which sought relief
primarily in the form of a declaration that the Stipulation and
divorce decree were void. The complaint named as defendants
Wife, three of her adult children, her daughter-in-law, and a
friend of the daughter-in-law (collectively, Defendants).1
Defendants filed a motion for summary judgment based on res
judicata, waiver, and the assertion that some of the issues were
1. Wife took the lead in defending this action. The other
defendants did not file any briefs or otherwise appear in this
appeal.
20140470-CA 2 2016 UT App 33Robinson v. Robinson
duplicative of those in the ongoing divorce case. Defendants also
filed a motion to dismiss on the grounds that the complaint
failed to plead fraud with particularity and failed to state a claim
upon which relief could be granted. The motion to dismiss also
asserted that some of the causes of action pleaded by Husband
were barred by the statute of limitations.
¶5 At the hearing, Husband argued that his September 2011
complaint had been timely filed because he had not discovered
Wife’s fraud and breach of fiduciary duty until October 2008. He
further argued that his complaint was ‚in the nature of a rule
60(b), Utah Rules of Civil Procedure, motion for relief from a
judgment based on fraud.‛ He also argued that ‚time deadlines
did not apply to rule 60(b) motions.‛
¶6 The district court adopted Defendants’ statement of
undisputed material facts, accepted as true Husband’s statement
of facts pertaining to the motion to dismiss, and noted that
Husband was ‚a sophisticated businessman.‛ The court rejected
Husband’s argument relating to rule 60(b), concluding that the
complaint had been filed as a separate action and not as a rule
60(b) motion for relief to set aside any final orders made in the
Robinsons’ ongoing divorce action. The court noted that the
applicable rule 60(b) time periods had long since passed and that
a meritorious independent action alleging fraud can ultimately
relieve the prevailing party from judgment.2 The court ruled that
some of Husband’s claims were barred by the statute of
limitations, that Husband had failed to plead his fraud claims
with particularity, and that res judicata also barred the claims.
The court granted both the motion to dismiss and the motion for
summary judgment. Husband appeals those decisions. Wife
cross-appeals the court’s denial of her attorney-fee request.
2. The district court also ruled that there was no judgment in this
case from which a rule 60(b) motion could have been brought.
And it noted that Husband had not cited any authority holding
that rule 60(b)’s ‚reasonable time‛ requirement tolled the
applicable statute of limitations.
20140470-CA 3 2016 UT App 33Robinson v. Robinson
ISSUES AND STANDARDS OF REVIEW
¶7 Husband contends that the district court erred in ruling
that rule 60(b) of the Utah Rules of Civil Procedure did not apply
to relieve Husband from the judgment entered against him in
the divorce case. We review the district court’s interpretation
and application of statutes and rules for correctness. See Berneau
v. Martino, 2009 UT 87, ¶ 9, 223 P.3d 1128.
¶8 Husband also contends that the district court erred by
granting Wife’s motions to dismiss and for summary judgment.
‚For the purposes of a rule 12(b)(6) dismissal, we accept the
complaint’s factual allegations as true.‛ Fidelity Nat’l Title Ins. Co.
v. Worthington, 2015 UT App 19, ¶ 7, 344 P.3d 156. ‚As a result,
an appeal from a rule 12(b)(6) dismissal presents only questions
of law, and we review the district court’s ruling for correctness.‛
Id. We review a district court’s legal conclusions and ultimate
grant or denial of summary judgment for correctness, after
viewing the facts and all reasonable inferences drawn therefrom
in the light most favorable to the nonmoving party. Orvis v.
Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600.
¶9 Wife contends that the district court erred by denying her
request for an award of attorney fees. The grant or denial of an
attorney-fee award pursuant to a contract is an issue of law that
we review for correctness. See Gardiner v. York, 2006 UT App 496,
¶ 5, 153 P.3d 791. The grant of an attorney-fee award pursuant to
the bad-faith attorney-fee statute requires findings that the
underlying claims were meritless and pursued in bad faith. See
Utah Code Ann. § 78B-5-825 (LexisNexis 2012); Gallegos v. Lloyd,
2008 UT App 40, ¶ 6, 178 P.3d 922. Whether an action or defense
is meritless constitutes a legal conclusion that we review for
correctness. Gallegos, 2008 UT App 40, ¶ 6. But the district court’s
finding as to bad faith is primarily factual, and we review the
finding for clear error. Id.20140470-CA 4 2016 UT App 33Robinson v. Robinson
ANALYSIS
I. Rule 60(b) Does Not Govern Independently Filed Actions.
¶10 Husband first contends that the district erred in ruling
that rule 60(b) of the Utah Rules of Civil Procedure did not apply
to Husband’s continued attempts to seek relief from the
judgment entered against him in favor of Wife in the divorce
case. Rule 60(b) allows a party to file a motion to be relieved
‚from a final judgment, order, or proceeding‛ for six statutorily
enumerated reasons. Utah R. Civ. P. 60(b). A motion under rule
60(b) ‚shall be made within a reasonable time and for *certain
categories, including fraud], not more than 90 days after the
judgment, order, or proceeding was entered or taken.‛ Id.¶11 Husband asserts that, because fraud is generally not a
proper basis for a petition to modify a divorce decree, it was
appropriate to bring his purported rule 60(b) motion as an
independent action. Husband cites Bayles v. Bayles, 1999 UT App
128, 981 P.2d 403, as support for his suit and his claim that the
time limits set forth in rule 60(b) do not apply. There, the court of
appeals noted that ‚a claim of fraud contemplated in the context
of [a] divorce is not generally a proper basis for a petition to
modify a divorce decree, [and therefore the] only avenue for
relief under the facts of [Bayles was] to file an independent
action.‛ Id. ¶ 17. This court concluded that ‚the party asserting a
cause of action for fraud after the parties have entered into a
stipulation that has been incorporated into an order of divorce
contemplating the basis for the fraud claim should either file a
Rule 60(b)(3) motion within the three month time limit, or file an
independent action.‛ Id. ¶ 20.
¶12 Bayles stands for the proposition that a post-divorce fraud
cause of action may be brought as a rule 60(b) motion or filed as
an independent action. It does not support Husband’s apparent
contention that a post-divorce fraud cause of action to relieve
one party from a judgment may be filed as a hybrid composed of
an independent fraud action stripped of the normally applicable
three-year statute of limitations with rule 60(b)’s ‚reasonable
20140470-CA 5 2016 UT App 33Robinson v. Robinson
time‛ limitation grafted on instead. Indeed, the language of rule
60(b) maintains a firewall between independent actions and rule
60(b) motions: ‚The procedure for obtaining any relief from a
judgment shall be by motion as prescribed [by rule 60(b)] or by
an independent action.‛ Utah R. Civ. P. 60(b) (emphasis added).
¶13 Because rule 60(b) motions and independent actions are
governed by separate procedural regimes, we conclude that the
district court did not err in ruling that the time limit provisions
set forth in rule 60(b) did not apply to Husband’s independently
filed action.
II. The Statute of Limitations Applies to Husband’s Complaint.
¶14 Apparently claiming that his complaint was actually a
hybrid rule 60(b) motion and independent action,3 Husband
contends that ‚it is not necessary that there be an order or
judgment already entered in the independent action for Rule
60(b) to apply.‛ As a result, in Husband’s view, ‚independent
actions filed under Rule 60(b) . . . are not limited by legal time
constraints.‛ However, as we have explained, there is no such
thing as an independent action filed under rule 60(b). Rather,
though an independent action is within the contemplation of the
rule, rule 60(b) does not govern such an action, and the time
limitations generally applicable to civil actions will apply. Thus,
we conclude that the district court did not err in applying the
statute of limitations to Husband’s independent action for Wife’s
alleged fraud in the inducement.
III. While the District Court Erred by Implicitly Converting the
Motion to Dismiss into a Motion for Summary Judgment, the
Error Was Harmless.
¶15 Husband next contends that the district court erred in
ruling that his fraud claims, brought in September 2011, were
3. Husband’s complaint does not purport to be a rule 60(b)
motion and does not reference that rule.
20140470-CA 6 2016 UT App 33Robinson v. Robinson
barred by the applicable three-year statute of limitations.
Specifically, he argues that the court considered materials
outside the pleadings to reach its determination that Husband
knew or should have known of the alleged fraud by December
2007.
¶16 In his complaint, Husband asserted that he did not
discover the alleged fraud until October 2008. However, the
district court looked to a pleading Husband had filed in the
divorce case on February 12, 2008. In that pleading, Husband
stated that his accountant had informed him of ‚a serious error‛
and had recommended an independent examination be
undertaken ‚to ensure that *Wife+ had not committed fraud or
made a material misrepresentation.‛ Husband attached a letter
from the accountant to that effect, dated December 17, 2007. As a
result, the district court determined that Husband knew or
should have known of the alleged fraud as of December 2007.
Accordingly, the court ruled that Husband’s fraud claims were
barred by the three-year statute of limitations.
¶17 A motion to dismiss admits the truth of the facts alleged
in the complaint but challenges the plaintiff’s right to relief
based on those facts. Osguthorpe v. Wolf Mountain Resorts, LC,
2010 UT 29, ¶ 20, 232 P.3d 999. The district court is therefore
limited to consideration of ‚the facts alleged in the pleading
itself rather than factual determinations from prior
proceedings.‛ Puttuck v. Gendron, 2008 UT App 362, ¶ 11, 199
P.3d 971.
¶18 Here, the accountant’s warning and letter were not ‚facts
alleged in the pleading itself.‛ See id. Accordingly, the district
court erred by considering them for the purposes of the motion
to dismiss. Instead, the district court should have treated the
motion to dismiss as a motion for summary judgment and given
the parties an opportunity to present pertinent material. See Utah
R. Civ. P. 12(c). If a district court does not exclude material
outside the pleadings and fails to convert a motion to dismiss to
one for summary judgment, ‚it is reversible error unless the
dismissal can be justified without considering the outside
20140470-CA 7 2016 UT App 33Robinson v. Robinson
documents.‛ State v. One Hundred Five Thousand Six Hundred
Forty Six Dollars, 2013 UT App 41, ¶ 7, 297 P.3d 647 (citation and
internal quotation marks omitted).
¶19 The district court’s error is rendered harmless, however,
by our determination below that Husband failed to plead fraud
with particularity. See infra ¶¶ 28, 36–37.4 We therefore decline to
reverse based on the district court’s error because dismissal is
justified without consideration of the outside documents.
IV. Husband Failed to Plead Fraud with Particularity.
¶20 Husband contends that the district court erred by ruling
that he failed to plead fraud with particularity. Husband’s
complaint stated four causes of action alleging fraud: that Wife
misrepresented the value of a commercial plaza owned by the
couple, that Wife fraudulently used marital assets to partially
fund the purchase of a townhouse, that Wife failed to disclose
accounts jointly held by her and one or more other defendants
that contained marital assets, and that Wife conspired with the
other defendants to ‚defraud *Husband+ of marital assets and to
convert those assets.‛
4. Additionally, if it had converted the motion to dismiss to one
for summary judgment, the court could have properly
considered Husband’s February 2008 pleading in the divorce
case and would likely have come to the conclusion that
Husband’s allegations in that pleading demonstrated
constructive knowledge of Wife’s alleged fraud. See Utah R. Civ.
P. 61 (‚*N+o error or defect in any ruling or order or in anything
done or omitted by the court . . . is ground for granting a new
trial or otherwise disturbing a judgment or order, unless refusal
to take such action appears to the court inconsistent with
substantial justice. The court at every stage of the proceeding
must disregard any error or defect in the proceeding which does
not affect the substantial rights of the parties.‛).
20140470-CA 8 2016 UT App 33Robinson v. Robinson
¶21 ‚In all averments of fraud or mistake, the circumstances
constituting fraud or mistake shall be stated with particularity.‛
Utah R. Civ. P. 9(b). A claim of fraud requires the plaintiff to
allege (1) that a representation was made (2) concerning a
presently existing material fact (3) which was false and (4) which
the representor either knew to be false or made recklessly,
knowing that there was insufficient knowledge upon which to
base such a representation, (5) for the purpose of inducing the
other party to act upon it and (6) that the other party, acting
reasonably and in ignorance of its falsity, (7) did in fact rely
upon it (8) and was induced to act (9) to that party’s injury and
damage. Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70
P.3d 35 (further noting, in the context of a motion for summary
judgment, that conclusory allegations of the elements of fraud,
unsupported by relevant surrounding facts, are insufficient).
A. Valuation of Phoenix Plaza
¶22 Husband and Wife owned certain commercial property
located in St. George, Utah, named Phoenix Plaza. In November
2007, Husband and Wife participated in mediation to divide
their marital property. One of the topics at mediation was the
disposition of Phoenix Plaza. Because Wife was managing
Phoenix Plaza at that time, she had prepared an estimate of its
value based, in part, upon information she had about the then-
current tenants. In her estimate, Wife stated, ‚We did compute
5% vacancy rates to get the 7.5 million [valuation] @ 7%
[capitalization rate]. Rents would have to increase by $277 per
month (which they are/will) before closing.‛5 Wife provided this
5. Husband asserts that this constituted a statement by Wife that
the vacancy rates were in fact five percent or less and that such
statement was a misrepresentation. However, elsewhere in his
complaint, Husband admitted that, at the time of the mediation
session, all of the space at Phoenix Plaza was occupied—a
vacancy rate of zero percent. He did not allege that the holdover
tenants were paying less in rent than they had under their leases.
(continued<)
20140470-CA 9 2016 UT App 33Robinson v. Robinson
estimate to Husband at some point prior to the mediation
session.
¶23 During the mediation session, Wife represented that a
banker was willing to refinance Phoenix Plaza for $3.5 million
based on a valuation of $7.5 million. Husband then agreed to
refinance the outstanding Phoenix Plaza mortgage for $3.5
million and to pay Wife roughly $1,784,419 in exchange for her
marital share of the equity in Phoenix Plaza. This agreement was
included in the Stipulation, which was itself incorporated into
the decree of divorce entered by the district court.
¶24 In his complaint, Husband alleged that Wife had
provided the banker with false information about the rent roll
for Phoenix Plaza in order to obtain an inflated valuation of the
property. Specifically, Husband claimed that Wife
misrepresented the status of the leases for roughly a quarter of
Phoenix Plaza by stating that the leases remained in force for a
further seven to twenty-two months when in fact the leases had
expired and the tenants were holding over from month to
month. Husband asserted that the banker had relied on Wife’s
false lease information to provide the $3.5 million refinancing
estimate. Husband claimed that he had relied on Wife’s
representation that the banker was willing to refinance Phoenix
Plaza for $3.5 million. In short, Husband alleged that Wife
misrepresented the nature of the tenants to the banker to get a
refinancing estimate of $3.5 million and then misrepresented to
Husband that a $3.5 million refinance was available from the
banker.
¶25 The district court ruled that Husband had not stated the
facts underlying Wife’s alleged fraud with the particularity
(2016 UT App 33Robinson v. Robinson
required by Utah Rule of Civil Procedure 9(b). The court
explained that ‚*t+he statements relating to the availability of
refinance for [Phoenix Plaza] are not statements of presently
existing facts as required to allege fraud.‛ The court also noted
that Husband ‚has not stated any facts (especially with
particularity) of the specific dates, times, [and] statements by
[Wife] that misled him in the negotiations.‛
¶26 On appeal, Husband asserts that he was ‚very specific in
setting forth the representations made by [Wife] concerning
presently existing material facts, i.e., the current status of the
leases and rent rolls, which were false at the time they were
made‛ to the banker. This argument does not directly challenge
the court’s actual ruling—that Wife’s statements to Husband
regarding the availability of refinance were not presently existing
material facts. Because Husband fails to challenge the court’s
ruling on this point, the first two elements of a fraud claim are
unsatisfied—i.e., ‚(1) that a representation was made (2)
concerning a presently existing material fact . . . .‛ See Armed
Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35 (citation
and internal quotation marks omitted).
¶27 Moreover, Husband’s complaint did not allege that
Husband relied on Wife’s misrepresentation of ‚the current
status of the leases and rent rolls.‛ Rather, the complaint stated
that ‚*Wife] failed to provide [Husband with] a copy of the Rent
Roll.‛ The complaint alleged that Husband relied on Wife’s
statement that the banker had loans available.6 If we accept
6. Husband notes that Wife provided him a loan application
from the banker roughly a month after the Stipulation was
signed. According to Husband, the loan application required ‚a
certified rent roll prior to the Loan Closing showing occupancy
of at least 31,000 square feet . . . . Such tenants shall be in
occupancy, paying rents and not in default under leases
satisfactory to Lender as of the date of funding.‛ Husband’s
complaint admitted that all 35,000 square feet of Phoenix Plaza
was leased at the time of the mediation. The complaint does not
(continued<)
20140470-CA 11 2016 UT App 33Robinson v. Robinson
Husband’s new assertion on appeal that the ‚presently existing
material fact‛ at issue was actually ‚the current status of the
leases and rent rolls,‛ we can see nothing in the complaint
alleging that Husband ‚(7) did in fact rely upon *that fact+ (8)
and was thereby induced to act (9) to *his+ injury and damage.‛
See Armed Forces Ins. Exch., 2003 UT 14, ¶ 16.
¶28 Because Husband does not challenge the district court’s
determination that the statement upon which he had claimed to
rely did not constitute a presently existing material fact, we
affirm the resulting ruling that Husband failed to plead this
fraud in the inducement claim with the requisite particularity.
B. The Garfield and Mesquite Properties
¶29 Before the marriage, Wife owned certain real property
located on Sego Lily Drive in Salt Lake City, Utah. After the
couple married, Wife sold that property and used the proceeds
to provide the majority of the down payment on a rental
property located on Garfield Avenue (the Garfield Property) in
Salt Lake City. After nine years, and during the marriage, the
Garfield Property was sold, netting Wife approximately
$890,000. Wife then contributed that money toward the purchase
of Phoenix Plaza. Husband also contributed roughly $2.3 million
toward the Phoenix Plaza purchase, in the form of real property
exchanges. Under the Stipulation, Wife was awarded a portion
of the proceeds from Phoenix Plaza proportional to her $890,000
contribution.
¶30 In his complaint, Husband alleged that, without his
knowledge, Wife had used marital funds to pay the mortgage on
(2016 UT App 33Robinson v. Robinson
the Garfield Property at an accelerated rate. This increased the
equity in the Garfield Property and hence the net proceeds from
its sale. In turn, this increased Wife’s proportional share of
Phoenix Plaza. As a result, Husband asserted, he should be
awarded a greater interest in Phoenix Plaza ‚than that described
in the Stipulation.‛
¶31 The complaint also noted that during the marriage, Wife
purchased real property in Mesquite, Nevada, for approximately
$93,000 (the Mesquite Townhouse). Roughly $51,000 of the
purchase price was paid via a real property exchange. The
exchanged property was a condominium unit purchased by the
couple during the marriage. Wife ostensibly paid the remaining
$42,000 of the Mesquite Townhouse’s purchase price out of an
‚early inheritance‛ from her parents. According to the
complaint, Wife ‚has since denied receiving an early inheritance
of this magnitude.‛ Husband’s complaint alleged that ‚the
approximately $42,000 was obtained from marital assets
unbeknownst to *Husband+ and without his authorization.‛
¶32 Husband’s second cause of action alleged that Wife
fraudulently used marital assets to pay down ‚her financial
obligations‛ and ‚falsely represented that monies contributed to
*the Mesquite Townhouse+ were from an early inheritance‛
when in fact the monies ‚came from marital assets.‛ It is unclear
whether the phrase ‚her financial obligations‛ in the second
cause of action was intended to mean the balance of the
purchase price for the Mesquite Townhouse or the mortgage
payments for the Garfield Property (or both or neither).
¶33 The district court ruled that Husband had not alleged
fraud with sufficient particularity, noting that the complaint
failed to state ‚with particularity any facts regarding supposed
use of marital assets to purchase the townhouse or the
condominium.‛ The district court also noted that the complaint
stated ‚nothing about specifically when marital monies were
used to purchase the properties or where the monies came
from.‛
20140470-CA 13 2016 UT App 33Robinson v. Robinson
¶34 On appeal, Husband asserts that his complaint
‚specifically alleged that during the course of the parties’
marriage that *Wife+ used money in the parties’ joint account,
i.e., marital funds, to pay off the debt on her separate property‛
and that ‚*t+he time of such payments would have been after the
purchase of the Garfield Property in 1995 and before its sale in
June of 2004.‛
¶35 ‚*T]he mere recitation by a plaintiff of the elements of
fraud in a complaint does not satisfy the particularity
requirement.‛ Armed Forces Ins. Exch. v. Harrison, 2003 UT 14,
¶ 16, 70 P.3d 35; see also Fidelity Nat’l Title Ins. Co. v. Worthington,
2015 UT App 19, ¶¶ 10–11, 344 P.3d 156. Conclusory allegations,
unsupported by a recitation of relevant surrounding facts, are
insufficient to carry that burden. Armed Forces Ins. Exch., 2003 UT
14, ¶ 16. The relevant surrounding facts must be set forth with
sufficient particularity to show which facts the plaintiff believes
support the allegations. Id.¶36 Here, despite Husband’s claim on appeal, his second
cause of action did not specifically allege that Wife used money
from the parties’ joint account; rather, it stated in conclusory
fashion only that Wife ‚committed fraud . . . by using marital
assets to pay down her financial obligations.‛7 Nor did the facts
stated in the remainder of the complaint make such an
allegation; the complaint averred only that the Garfield Property
payments were ‚taken from marital assets‛ and that $42,000 of
the Mesquite Townhouse purchase price was ‚obtained from
marital assets.‛ The complaint failed to identify any details of
the supposed payments, rendering the assertion that they even
occurred merely speculative. The complaint was also devoid of
any explanation of how or when Husband became aware of the
7. It is true that the complaint only mentioned one joint checking
account and stated that ‚*n+early all expenses related to the
parties’ properties were paid through the joint account.‛ But
nearly all is not actually all, and the term ‚marital assets‛ in this
case clearly encompasses more than a single checking account.
20140470-CA 14 2016 UT App 33Robinson v. Robinson
alleged fraud. Rather, the complaint simply speculated that,
because Wife apparently made the payments, Wife must have
used marital assets. The mere fact that one spouse makes a
payment does not support an inference that the spouse funded
the payment using marital assets, much less that such funding
would be improper. While the precise contours of the term
‚particularity‛ may be debatable, the claim that Wife may have
made an unknown number of payments amounting to an
unknown total using funds from an unknown source or sources
at unknown times interspersed throughout a nine-year period is
insufficiently detailed to satisfy the particularity requirement.
¶37 Husband has not shown that his complaint pleaded this
alleged fraud with particularity; accordingly, we affirm the
district court’s dismissal of the second cause of action.
C. Use of Marital Funds by All Defendants
¶38 Husband’s third cause of action alleged that Wife
‚committed fraud by knowingly failing to disclose additional
marital assets including the accounts separately held by her or
jointly held by her and one or more of *the other defendants+.‛ It
also alleged that Wife ‚committed fraud by knowingly failing to
disclose and concealing the fact that the alleged custodial
accounts held in the names of her then minor children were
actually marital property.‛ The complaint did not associate any
of the other defendants specifically with any of the accounts. In
fact, the complaint did not identify any of the purported
accounts. The district court ruled that ‚*t+here is absolute[ly] no
specificity in these allegations [such as] where the accounts were
held, when they were held, when marital assets were placed in
them, whose names were on which accounts, etc.‛
¶39 On appeal, Husband refers to allegations in the complaint
that Wife misused a joint credit card and withheld the credit
card statements from him. He asserts that the complaint
specifically alleged Wife’s misuse of the credit card for non-
business expenses, ‚including, the credit card account used . . . ,
when the charges were made, the amount of the charges, the
20140470-CA 15 2016 UT App 33Robinson v. Robinson
names of merchants, and the purpose of the charges.‛8 He
concludes, ‚Thus, a clear and specific description of the facts
underlying these fraud claims, have been sufficiently alleged
under Rule 9(b).‛
¶40 However, the particularity, or lack thereof, with which
Husband pleaded the credit card account allegations has no
bearing on the third cause of action. That cause of action did not
refer to any of the credit card account allegations. Instead, it
asserted the nebulous existence of asset accounts, averred that
Wife had failed to disclose them to Husband, and sought to
impose a constructive trust on them. The complaint provided no
identifying details about the asset accounts or, indeed, anything
other than conclusory speculation that they even existed. On
appeal, Husband does not argue that the asset account
allegations were pleaded with particularity. Instead, he claims,
inaccurately, that he pleaded misuse of a credit account with
particularity.
¶41 Because the third cause of action concerns asset accounts
and not credit accounts, Husband has failed to challenge the
basis for the district court’s determination that the third cause of
action was not pleaded with the requisite particularity. When an
appellant does not challenge the district court’s basis for its
8. The complaint did not actually allege these details. For each
year, the complaint stated only an approximate annual total and
the amount, apparently rounded to the nearest fifty dollars,
spent for each of several generalized categories during that year.
For example, the complaint’s entry for 2008 spending alleged
that ‚slightly over $100,000‛ was charged to the credit card and,
of that, Wife spent ‚approximately $9,000 on travel; $5,500 on
hair, beauty and spas; nearly $13,000 for clothes; over $14,500 on
bars, restaurants, liquor and entertainment; and charges of over
$22,000 for the benefit of one or more of *the other defendants.+‛
No specific charges are identified. And in recounting three years’
worth of transactions, the complaint provided names for only
two merchants.
20140470-CA 16 2016 UT App 33Robinson v. Robinson
determination, we will not overturn that determination. See
Benns v. Career Serv. Review Office, 2011 UT App 362, ¶ 2, 264
P.3d 563 (per curiam). We therefore affirm the district court’s
dismissal of that cause of action.
V. Husband Did Not Adequately Plead a Claim for Breach of
Fiduciary Duty.
¶42 Husband next contends that ‚the district court erred by
dismissing *Husband’s+ breach of fiduciary duty claim.‛ Both of
Husband’s first two fraud-based causes of action (the first
relating to Phoenix Plaza and the second relating to the Garfield
Property and the Mesquite Townhouse) also alleged that Wife
breached a fiduciary duty owed to him. Without further
analysis, Husband lists the citations of three cases in support of
his assertion that ‚a fiduciary duty can exist between a husband
and a wife.‛ But none of those cases actually supports such a
proposition. One of the three cases makes no mention of either
the word ‚fiduciary‛ or ‚duty.‛ See Boyce v. Boyce, 609 P.2d 928(Utah 1980). The other two cases cited by Husband mention
fiduciary duty only to describe allegations made by the
respective parties. See Despain v. Despain, 682 P.2d 849, 852 (Utah
1984); Glover v. Glover, 242 P.2d 298, 300 (Utah 1952).
Nevertheless, we assume without deciding that a fiduciary duty
can arise within a marital relationship. Cf. 41 C.J.S. Husband
& Wife § 3 (1991) (‚The personal relationship between spouses is
generally viewed as a . . . fiduciary relationship in which each
spouse owes to the other a . . . duty to disclose pertinent assets
and factors relating to those assets . . . .‛).9
¶43 Several principles guide the determination of whether a
fiduciary relationship may be implied:
9. To determine whether a fiduciary relationship exists between
two spouses, it may be appropriate to consider the ‚age, mental
condition, education, business experience, state of health, and
degree of dependence of the spouse in question.‛ 41 C.J.S.
Husband & Wife § 3 (1991).
20140470-CA 17 2016 UT App 33Robinson v. Robinson
[T]o determine whether a fiduciary duty should be
implied in law due to the factual situations
surrounding the transaction and the relationship of
the parties, we consider the following principles:
A fiduciary relationship imparts a position of
peculiar confidence placed by one individual in
another. A fiduciary is a person with a duty to act
primarily for the benefit of another. A fiduciary is
in a position to have and exercise and does have
and exercise influence over another. A fiduciary
relationship implies a condition of superiority of
one of the parties over the other. Generally, in a
fiduciary relationship, the property, interest or
authority of the other is placed in the charge of the
fiduciary.
A confidential relationship may similarly arise
whenever a continuous trust is reposed by one
party in the skill and integrity of another.
First Sec. Bank of Utah N.A. v. Banberry Dev. Corp., 786 P.2d 1326,
1333 (Utah 1990) (citations and internal quotation marks
omitted).
¶44 Here, the district court ruled that ‚the complaint does not
allege sufficient facts [to show] that [Wife] had a fiduciary duty
to *Husband+.‛ The court noted that Wife’s alleged provision of
accounting services ‚would not be uncommon in a husband/wife
relationship‛ and did not alone place Wife ‚‘in a position to have
and exercise and [to actually] have and exercise influence over
another.’‛ (Alteration in original) (Quoting First Sec. Bank, 786
P.2d at 1333). The district court further explained that, because
Wife ‚kept the books and provided accounting services for the
assets in the marital estate of which she was a co-beneficiary,‛
she ‚did not have ‘a duty to act primarily for the benefit’ of
*Husband+.‛ (Emphasis added) (Quoting First Sec. Bank, 786 P.2d
at 1333).
20140470-CA 18 2016 UT App 33Robinson v. Robinson
¶45 On appeal, Husband points to the allegations in his
complaint that, ‚[d]uring the course of the marriage, [Wife]
served as *Husband’s+ accountant and maintained their financial
records. [Wife] received an annual payment from [Husband] for
her accounting services.‛ But while these allegations may
suggest that Wife was in a position to exercise influence over
Husband, he did not allege that she actually did so. Nor did he
allege that she actually exercised some financial superiority over
him; rather, the complaint claimed that they acted as partners.10
And Husband did not allege that he had reposed his trust in
Wife’s skill and integrity.
¶46 We conclude that Husband has not demonstrated that the
district court erred in determining that the allegations in the
complaint were insufficient to support a claim that a fiduciary
relationship had actually arisen between Husband and Wife.11
Accordingly, we affirm the district court’s dismissal of the
breach of fiduciary duty claims.
VI. Husband Did Not Adequately Plead a Claim for Civil
Conspiracy.
¶47 Husband contends that the district court erred by
dismissing his civil conspiracy claim for failure to plead with
particularity. Husband’s complaint alleged that Wife ‚has
conspired with [the other defendants] to defraud [Husband] of
marital assets and to convert those assets.‛ It also alleged that
the other defendants ‚were aware and had knowledge that the
funds they were receiving were marital assets or assets to be
10. And, as previously noted, the district court found that
Husband ‚is a sophisticated businessman.‛
11. Moreover, because the breach of fiduciary duty claims were
entwined with, and based on, fraud claims that were not
pleaded with particularity, Husband cannot show that Wife
breached any fiduciary duties by committing the alleged
fraudulent acts.
20140470-CA 19 2016 UT App 33Robinson v. Robinson
shared with [Husband+ pursuant to the Stipulation.‛ Husband
presumes that these are two distinct claims: first, civil conspiracy
to commit fraud and, second, civil conspiracy to commit
conversion.
¶48 ‚A claim for civil conspiracy must allege the following
elements: (1) a combination of two or more persons, (2) an object
to be accomplished, (3) a meeting of the minds on the object or
course of action, (4) one or more unlawful, overt acts, and (5)
damages as a proximate result thereof.‛ Fidelity Nat’l Title Ins.
Co. v. Worthington, 2015 UT App 19, ¶ 16, 344 P.3d 156 (citation
and internal quotation marks omitted).
A. Civil Conspiracy to Commit Fraud
¶49 ‚In all averments of fraud or mistake, the circumstances
constituting fraud or mistake shall be stated with particularity.‛
Utah R. Civ. P. 9(b) (emphasis added). Conclusory allegations,
unsupported by relevant surrounding facts, are insufficient.
Worthington, 2015 UT App 19, ¶ 10.
¶50 Husband argues, ‚To the extent that *Wife’s+ breach of
fiduciary duties arises from fraud; [Husband] has pled such
fraud with sufficient particularity, as set forth above.‛ But we
have determined that the district court correctly ruled that Wife
did not owe a fiduciary duty to Husband and that the fraud
claims relating to Phoenix Plaza and to the Garfield Property
and the Mesquite Townhouse were not pleaded with sufficient
particularity. Supra ¶¶ 28, 36–37. Moreover, Husband’s civil
conspiracy claim did not allege a breach of fiduciary duty.
¶51 In any event, we readily conclude that the civil-
conspiracy-to-commit-fraud claim was not pleaded with
particularity. While Husband’s complaint stated that Wife
conspired with the other defendants to defraud him, Husband
offers no specificity to bolster that claim. We therefore agree
with the district court that Husband failed to allege any ‚specific
overt acts (including when, where, who, what)‛ in which the
other defendants participated. Husband’s complaint also asserts
20140470-CA 20 2016 UT App 33Robinson v. Robinson
that the other defendants knew that ‚the funds they were
receiving were marital assets.‛ But this fell short of alleging a
meeting of the minds between those defendants and Wife on the
object or course of action to be taken. See Worthington, 2015 UT
App 19, ¶¶ 16–18. Moreover, the complaint was also devoid of
any specificity concerning Husband’s that the other defendants
had such knowledge.
B. Civil Conspiracy to Commit Conversion
¶52 Husband argues that his civil conspiracy claim was not
dependent on fraud and therefore need not be pleaded with
particularity. However, his claim was that Wife and the other
defendants ‚conspired . . . to defraud [Husband] of marital
assets and to convert those assets.‛ However, as noted above,
Husband has not sufficiently alleged that Wife fraudulently
acquired marital assets that did not belong to her. Husband thus
cannot prove that those assets were then converted. We are
therefore not convinced that Husband’s civil conspiracy claim
had a life independent of the fraud claim.
¶53 We conclude that the district court did not err in
dismissing Husband’s civil conspiracy claim, because the civil
conspiracy claim relied on an underlying fraud claim that was
not pleaded with particularity.
VII. The Complaint Is an Independent Action.
¶54 Husband’s seventh contention is that the ‚district court
erred by ruling that *Husband’s] independent action brought
under Rule 60(b) of the Utah Rules of Civil Procedure was
barred by res judicata.‛ He asserts that ‚in order to have res
judicata effect on an independent action brought under Rule
60(b), it is necessary that a similar motion to set aside under Rule
60(b) was previously filed in the underlying action and decided
on the merits.‛ However, as we explain above, this suit is an
independent action untethered to any rule 60(b) claim. See supra
¶¶ 10–14. And we have resolved Husband’s claims above
20140470-CA 21 2016 UT App 33Robinson v. Robinson
without considering the preclusive effect of res judicata. As a
result, we need not consider this contention further.
VIII. Res Judicata as to the Fraud Claims.
¶55 Husband contends that the district court erred by ruling
that his fraud claims against Wife were barred based on res
judicata. Because we have affirmed the district court’s
determination that the fraud claims were inadequately pleaded,
we need not address Husband’s challenge to the district court’s
alternative ruling that the fraud claims were also barred by res
judicata.
IX. Res Judicata as to Claims Against the Other Defendants.
¶56 Husband contends that the district court erred by ruling
that his claims against the other defendants are barred by res
judicata. He argues that res judicata does not bar his claims
against defendants other than Wife for fraud, conversion, and
civil conspiracy. We have affirmed the district court’s
determinations that those claims were inadequately pleaded.
Consequently, we need not address the district court’s
alternative ruling based on res judicata or Husband’s challenge
to that ruling.
X. Wife Is Not Contractually Entitled to an
Award of Attorney Fees.
¶57 Wife cross-appeals. She first contends that the district
court erred by denying her an award of attorney fees under the
Stipulation. The Stipulation provided that ‚*t+he prevailing party
to an action for breach of a term of this Agreement shall be
entitled to his or her attorneys fees and costs.‛ After the court
granted both her motion for summary judgment and motion to
dismiss, Wife filed a motion seeking $14,183.11 in attorney fees
and costs.
¶58 The district court found that ‚the filing of *Husband’s+
action was not an action for breach of a term of [the Stipulation]
20140470-CA 22 2016 UT App 33Robinson v. Robinson
so the contract provision of the agreement for award of attorney
fees is not applicable.‛ The court did not explain the basis for
this finding.
¶59 On appeal, Wife begins by asserting that Husband
breached the Stipulation. However, this action was not brought
on the basis of Husband’s alleged breaches. Accordingly,
whether Husband breached the Stipulation is immaterial to the
issue before us on cross-appeal.
¶60 Wife next asserts that Husband’s complaint ‚alleges, in
essence, a breach of contract claim, although labeling and
presenting such claims under the rubric of fraud.‛ She points to
Husband’s third cause of action. There, Husband recited a
portion of the Stipulation that provided, ‚Each party has made a
full and fair disclosure to the other of his or her assets, financial
condition and worth . . . .‛ Husband then alleged, ‚*Wife+
committed fraud by knowingly failing to disclose additional
marital assets . . . .‛ Wife also points to Husband’s fourth cause
of action, which was for conversion. There, Husband stated,
‚The Stipulation provided that net income from the properties
were *sic+ to be divided evenly between the parties.‛ Husband
then alleged, ‚*Wife+ has converted or has stolen funds from the
joint account beyond the 50% that *she+ was entitled.‛ Finally,
Wife asserts that Husband used this action to record lis pendens
on real property owned by the couple in a ‚not-so-veiled
attempt by *Husband+ to further frustrate *Wife’s+ attempts to
enforce and collect amounts due [to] her under the terms of the
Stipulation.‛
¶61 Husband responds that Wife has ‚failed to comply with
the requirements of Rule 24 of the Utah Rules of Appellate
Procedure.‛ He states that Wife ‚failed to provide a statement of
the issues for review, the standard of review for each issue with
supporting authority, [or] a citation to the record where the issue
was preserved.‛ Yet Wife did all of these things on pages one
and two of her brief. Husband next points out that Wife did not
include a copy of the district court’s ‚Ruling on Motion to
Award Attorney Fees and Costs.‛ This is true. However, this
20140470-CA 23 2016 UT App 33Robinson v. Robinson
ruling is in the record designated on appeal and Wife’s opening
brief provides adequate citation to that ruling within the record.
Husband also argues that because the other defendants were not
parties to the Stipulation, they have no standing to request an
award of attorney fees pursuant to it. But the other defendants
do not do so. In fact, the contractual-attorney-fee-award section
of Wife’s brief scrupulously uses her name rather than the
collective term ‚defendants.‛ Husband then mischaracterizes
Wife’s alternative argument (seeking an equitable award of
attorney fees) as a concession that this action was not based on a
breach of the Stipulation.
¶62 Finally, Husband asserts that his complaint was not ‚an
action for breach of a term of [the Stipulation],‛ because he was
‚seeking to set aside or obtain relief from *it+, based on *Wife’s+
fraud.‛ We note that Husband’s complaint did not explicitly
allege a breach of the Stipulation and that Husband sought a
declaration that the Stipulation was void rather than voidable.
Although it appears that the motivation behind the litigation is
Husband’s attempt to evade the duties imposed upon him by the
Stipulation, his complaint targeted the validity of the Stipulation
rather than presenting ‚an action for breach of a term of this
Agreement.‛ Accordingly, Wife is not entitled to an award of
attorney fees under the Stipulation’s attorney-fee provision.
XI. Wife Is Not Entitled to a Statutory Attorney-Fee Award.
¶63 Wife contends that she is entitled to a statutory award of
fees and costs under Utah Code section 78B-5-825.12 That statute
provides that ‚*i+n 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
12. Wife initially argues that ‚*a+ll of the Defendants in this
action‛ are entitled to such an award. However, she concedes
that because she ‚is the only party that actually paid any
attorney fees, she is the only defendant that can make a claim
under this statutory section.‛
20140470-CA 24 2016 UT App 33Robinson v. Robinson
brought or asserted in good faith.‛ Utah Code Ann. § 78B-5-825
(LexisNexis 2012) (emphasis added).
¶64 The district court found that ‚this action was not frivolous
or brought in bad faith. The action raised valid issues which
were not wholly without basis in law or fact especially on the
issues of the applicability of the statute of limitations and res
judicata. Neither was the action filed in bad faith.‛
¶65 An action is meritless when it is ‚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). Wife’s only argument on this
point is that the fraud claim was meritless because it lacked a
basis ‚in fact or law since it had been raised in the [separate
divorce action], rejected and not taken on appeal by *Husband+.‛
Wife appears to be referring to the fraud-in-the-inducement
claim. But this action consisted of more than just that single
fraud claim. Furthermore, this action named parties who could
not have been joined in the divorce action. We therefore
conclude that Wife has not shown error in the district court’s
determination that this action was not meritless.13
¶66 We consider next whether the action was brought in bad
faith. ‚A party acts in bad faith when he brings an action and
either (1) lacks an honest belief in the propriety of the activities
in question, (2) intends to take unconscionable advantage of
others, or (3) intends to or has knowledge of the fact that his
actions will hinder, delay, or defraud others.‛ Wardley Better
Homes & Gardens v. Cannon, 2002 UT 99, ¶ 29, 61 P.3d 1009. Wife
13. The district court did not use the word ‚meritless.‛ Rather it
noted that the action was not frivolous and that the issues were
not wholly without basis in law and fact. Because meritlessness
is defined as being frivolous or having no basis in law and fact,
Warner v. DMG Color, Inc., 2000 UT 102, ¶ 22, 20 P.3d 868, it
appears that the district court effectively ruled that the action
was not meritless.
20140470-CA 25 2016 UT App 33Robinson v. Robinson
argues that the district court’s finding was conclusory and
lacked any subsidiary findings on those three factors. Wife notes
the lis pendens and several motions filed by Husband and
asserts that they were attempts to ‚hinder and delay *Wife’s+
enforcement and collection actions.‛ Without analyzing why
these actions demonstrate bad faith, Wife asserts that the district
court ‚should have found that *Husband+ acted in bad faith
when he filed this action,‛ the lis pendens, and the motions. We
conclude that these conclusory assertions are insufficient to
show error in the district court’s determination that this action
was not brought in bad faith.
¶67 Wife has not demonstrated that this action was meritless
or that it was brought in bad faith. Accordingly, she is not
entitled to an award of attorney fees under Utah Code section
78B-5-825.
XII. Wife is Not Entitled to an Award of Attorney Fees Incurred
on Appeal.
¶68 Wife seeks an award of her attorney fees incurred on
appeal. Generally, a party which received attorney fees below
and then prevails on appeal is entitled to fees reasonably
incurred on appeal. Giles v. Mineral Resources Int’l, Inc., 2014 UT
App 259, ¶ 25, 338 P.3d 825. We have determined that the district
court correctly denied an award of attorney fees to Wife.
Accordingly, Wife is not entitled to an award of attorney fees
reasonably incurred on appeal.
CONCLUSION
¶69 The district court correctly determined that this action
was independent from the divorce action and that rule 60(b)’s
‚reasonable time‛ provision therefore did not supplant the
normal statute of limitations. The district court erred by
considering documents outside the pleadings during its
consideration of the motion to dismiss, but that error was
harmless. The district court correctly determined that Husband’s
20140470-CA 26 2016 UT App 33Robinson v. Robinson
fraud claims were not pleaded with particularity and that his
breach of fiduciary duty and civil conspiracy claims were
inadequately pleaded. Given the resolution of these issues, we
need not review the district court’s res judicata rulings. Wife was
not contractually or statutorily entitled to attorney fees.
¶70 Affirmed.
20140470-CA 27 2016 UT App 33