CBS Enterprises v. Sorenson

2018 UT App 2THE UTAH COURT OF APPEALS
CBS ENTERPRISES LLC AND ALLEN MYERS,
Appellants,
v.
LARRY T. SORENSON,
Appellee.
Opinion
No. 20160897-CA
Filed January 5, 2018
Third District Court, Salt Lake Department
The Honorable Robert P. Faust
No. 150903522
Daniel E. Witte, Attorney for Appellants
Larry T. Sorenson, Appellee Pro Se
JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES GREGORY K. ORME and MICHELE M. CHRISTIANSEN
concurred.
MORTENSEN, Judge:
¶1 Appellants CBS Enterprises LLC and Allen Myers
(collectively, CBS) filed suit against Larry T. Sorensen in the
district court, alleging that they were part owners of a Chinese
jade artifact valued at $34 million. After initially staying the
proceedings to allow for resolution of a related federal case, the
district court dismissed CBS’s complaint for failure to prosecute.
CBS now appeals, arguing that the dismissal was an abuse of the
district court’s discretion. Because we agree, we reverse and
remand.
¶2 Most of the details of the underlying dispute in this case
are irrelevant to the appeal. What is important, however, is the
procedural path the case has followed. In May of 2015, CBS filed
CBS Enterprises v. Sorenson
its complaint in the district court. Exactly three months later, the
parties entered—and the district court approved—a stipulation
regarding the security and storage of the jade artifact. Part of
that stipulation was an order “that all litigation deadlines shall
be held in abeyance.”
¶3 Roughly a year after the district court proceedings had
been stayed, the court provided notice to the parties of its sua
sponte motion to dismiss the case “for lack of prosecution
pursuant to Rule 4-103” of the Utah Rules of Judicial
Administration. The court stated, “Unless a written statement is
received by the court within 20 days of this notice showing good
cause why this should not be dismissed, the Court will dismiss
without further notice.” CBS accordingly filed a written
objection approximately one week later. Counsel for CBS
followed up with the district court by telephone to ensure that
the court had received the objection. Counsel also asked if a
hearing had been or would be scheduled. According to CBS, its
counsel was told that “no hearing was currently scheduled and
that one might never be scheduled (and indeed, was likely not to
be scheduled),” but that counsel would be contacted if that
changed.
¶4 In its objection, CBS argued that it had “good cause why
this case should not be dismissed” and that “aggressive litigation
is occurring to continue to prosecute the matter.” Specifically,
CBS explained that the jade artifact had been “held as evidence
in a federal criminal investigation until August 2016”—the same
month the district court moved to dismiss the case for failure to
prosecute. It provided the district court with the names and case
numbers of federal cases that implicated the artifact. The
objection concluded with a request that, if the district court did
“not summarily agree that good cause has been shown,” the
court set “a hearing to further discuss the situation.”
¶5 The district court obliged, sending out notice on
September 22, 2016, of a hearing scheduled for less than one
20160897-CA 2 2018 UT App 2CBS Enterprises v. Sorenson
week later—September 28, 2016. On September 28, no parties
were present when the court called the case and it thus
“order[ed] this case dismissed for lack of prosecution and for
[the] parties[’] failure to appear to update the court on the case.”
¶6 Three days later, on October 1, 2016, CBS filed a “motion
for reconsideration to alter or amend judgment and to vacate or
clarify dismissal.” In it, CBS alleged that no party had received
actual notice of the September 28 hearing. And CBS reiterated its
reasons why the case should not have been dismissed, including
that “litigation is indeed being actively and properly
prosecuted.”
¶7 But beyond simply rehashing the reasoning set out in its
objection, CBS also detailed apparent flaws in the notice and
hearing process, explaining that counsel for CBS had not
received actual notice of either the hearing or its resolution until
he engaged in his standard periodic review of “the dockets for
his various cases on Greenfiling just as a precaution.” 1 CBS
argued that its failure to appear at the hearing was attributable
to mistake, inadvertence, or excusable neglect, citing rule
60(b)(1) of the Utah Rules of Civil Procedure.
¶8 Without addressing CBS’s rule 60(b) argument or
alternative request for clarification, the district court “denie[d]
the Motion to Reconsider because there is no such Motion per
the Rules of Civil Procedure.” But rather than leave its order at
that, the court expounded:
1. Greenfiling is one of three “certified electronic filing service
providers” that “have completed the certification requirements
necessary to become an Electronic Filing Service Provider
with the Utah State District Courts.” Certified Electronic Filing
Service Providers, Utah Courts, https://www.utcourts.gov/efiling/
providers.html [https://perma.cc/A3TY-FCHL].
20160897-CA 3 2018 UT App 2CBS Enterprises v. Sorenson
Further, on August 31, 2016 a Notice of Intent to
Dismiss was given to Plaintiff, to which an
objection was filed on September 8th 2016. The
Court having read the objection still had concerns
regarding the content of the objection, so it set a[n
in-]court hearing on the matter and provided
notice to counsel of the hearing at the email
address on file with the Court and at which
counsel had received previous[] notices. Counsel
failed to appear at the in[-]court hearing and the
case was dismissed. Therefore, the Court finds
more than adequate opportunity was provided to
prevent this case from being dismissed and again,
denies the Motion . . . .
¶9 CBS now appeals, arguing that the district court
committed reversible error in dismissing the case for lack of
prosecution. It sets forth several bases for reversal, but because
we are persuaded that the case should not have been dismissed
and that the court should have granted CBS’s requested relief,
we need not reach them all.
¶10 The district court admittedly has broad discretion in
deciding whether a case should be dismissed for failure to
prosecute, and we will not reverse
absent an abuse of discretion and a likelihood that
an injustice has occurred. Further, [i]n determining
whether the court abused its discretion, we balance
the need to expedite litigation and efficiently
utilize judicial resources with the need to allow
parties to have their day in court. Thus, we review
for abuse of discretion the [district] court’s decision
to dismiss for failure to prosecute.
Cheek v. Clay Bulloch Constr., Inc., 2011 UT App 418, ¶ 6, 269 P.3d
964 (alteration in original) (citations and internal quotation
20160897-CA 4 2018 UT App 2CBS Enterprises v. Sorenson
marks omitted). The same standard applies in determining
whether a district court erred in denying a rule 60(b) motion for
relief. See Robinson v. Baggett, 2011 UT App 250, ¶ 13, 263 P.3d
411. We first consider whether the district court should have
granted relief under that rule, and we then determine whether
the case should have been dismissed for failure to prosecute in
the first place.
¶11 The district court was correct that our rules of civil
procedure do not contemplate motions to reconsider. See
Lindstrom v. Custom Floor Covering Inc., 2017 UT App 141, ¶ 10,
402 P.3d 171 (referring to a motion to reconsider as “a motion
that does not exist under the Utah Rules of Civil Procedure”).
And we afford district courts discretion in deciding whether to
entertain such motions. See A.S. v. R.S., 2017 UT 77, ¶ 28
(reiterating that “motions to reconsider are not recognized
anywhere in either the Utah Rules of Appellate Procedure or the
Utah Rules of Civil Procedure, and . . . that [district] courts are
under no obligation to consider motions for reconsideration and
any decision to address or not to address the merits of such a
motion is highly discretionary” (citation and internal quotation
marks omitted)). But CBS’s motion was not a classic motion to
reconsider, at least not exclusively. 2 And a court may not re-
2. Even if it were solely a motion to reconsider, which the district
court could have refused to entertain, the court may still have
exceeded its discretion in denying the motion. This is because
once a district court undertakes to consider the merits of a
motion to reconsider, its ruling must be within the bounds of its
discretion. Here, the district court began its order by indicating
that it would not grant the motion “because there is no such
Motion per the Rules of Civil Procedure.” But it then went on to
decide the merits of reconsideration. See supra ¶ 8. Because the
district court ruled on the merits of the motion, it was bound to
rule on the motion reasonably.
20160897-CA 5 2018 UT App 2CBS Enterprises v. Sorenson
characterize a movant’s requested form of relief so as to avoid
that request. Cf. B.A.M. Dev., LLC v. Salt Lake County, 2012 UT 26,
¶¶ 12–13, 282 P.3d 41 (explaining that a motion’s form will not
be disregarded to instead “consider its essential character”;
courts should look at the form and substance of the motion, its
caption, its citation of relevant rules, and its express request for
relief in determining whether the motion meets the specific
rule’s requirements); Lindstrom, 2017 UT App 141, ¶¶ 9–12
(applying the framework set forth in B.A.M. Development).
¶12 CBS, perhaps ill-advisedly, captioned its motion as one
“for reconsideration.” But the caption also indicated that CBS
sought “to alter or amend judgment” and that it wanted to
“vacate or clarify dismissal.” Not only did the motion’s caption
indicate that it was not solely one for reconsideration, but also
the substance of the motion made that abundantly clear. In the
opening paragraph of its motion, CBS explained that it sought
relief under rules 59(e) and 60(b)(1), (5), and (6) of the Utah Rules
of Civil Procedure. 3 So while the district court had discretion not
to consider part of CBS’s motion—the part seeking
reconsideration, plain and simple—it had no such option to
summarily disregard CBS’s other grounds for seeking relief.
And by doing so, it abused its discretion.
¶13 Furthermore, considering the merits of CBS’s motion, it is
apparent that the district court abused its discretion by denying
relief. CBS specifically argued that its nonappearance at the
hearing was the result of mistake, inadvertence, or excusable
neglect; that it was not equitable for the order of dismissal to
have prospective application; and that the complex nature of the
interplay between the state and federal systems in this dispute
3. We primarily consider whether the district court erred under
rule 60(b)(1). Because we conclude that it did and reverse on that
basis, we express no opinion on whether the same result would
be reached under rule 59(e) or rule 60(b)(5) or (6).
20160897-CA 6 2018 UT App 2CBS Enterprises v. Sorenson
presented an additional reason that justified relief. See Utah R.
Civ. P. 60(b)(1), (5), (6). Subsection (1) of rule 60(b) provides, “On
motion and upon just terms, the court may relieve a party or its
legal representative from a judgment, order, or proceeding for
. . . mistake, inadvertence, surprise, or excusable neglect.” Utah
R. Civ. P. 60(b)(1).
¶14 Even setting aside the fact that this case had been stayed
by the district court when the district court ordered its dismissal,
we have no difficulty concluding that CBS was entitled to relief
for excusable neglect. When the district court first notified the
parties that it was considering dismissing the case, it did so by
saying dismissal would result “[u]nless a written statement is
received . . . showing good cause why this should not be
dismissed.” (Emphasis added.) The logical reading of that
qualification is that if such a written statement were received,
the case would not be dismissed. And CBS filed a written
objection, detailing why the case should not be dismissed. It
would have been reasonable for CBS to believe that it had
complied with the district court’s notice. The court made no
mention of a hearing. It instructed the parties to provide a
written statement or this case would be dismissed. And CBS
provided a written statement.
¶15 Of course, that was not the end of things. Counsel for CBS
had contacted the district court after filing the objection and was
told that a hearing had not been scheduled and likely would not
be scheduled. But CBS, in its objection, had suggested that if the
district court was unsatisfied with its explanation of why the
case should not be dismissed, the court should schedule a
hearing. The district court, in its order denying CBS’s request for
relief, explained that it “still had concerns regarding the content
of [CBS’s] objection,” and therefore scheduled a hearing. But in
doing so, it gave less than one week’s notice.
¶16 And to compound the situation further, counsel for CBS
maintained that he had not received actual notice of the hearing.
20160897-CA 7 2018 UT App 2CBS Enterprises v. Sorenson
The court did not make further inquiry into this claim, except to
say that notice was sent to “the email address on file with the
Court,” which was addressed in CBS’s motion. 4 This
convergence of issues—from the district court saying it would
dismiss unless it received a written statement, to the district
court scheduling a hearing with less than one week’s notice, to
CBS’s claim that it had not received actual notice of the
hearing—is sufficient to demonstrate excusable neglect in not
appearing at the September 28 hearing. 5 And thus the district
court abused its discretion in refusing to provide relief on that
ground.
¶17 But our analysis does not end there, lest on remand the
district court see fit to again reach the question of whether the
case should be dismissed for failure to prosecute. On the record
4. Counsel explained that he did not receive the email
“apparently due to some kind of technical glitch,” although he
acknowledged that it was “unclear whether the glitch occurred
because the email was sent improperly, or due to delays or
defects with the Court’s system, or because of technical defects
or IP error on the part of the computer systems of [counsel’s] law
firm, and/or because of a technical defect with the Greenfiling
system.”
5. It is worth reiterating how quickly CBS responded to the
court’s dismissal. The hearing was held on September 28, and
CBS filed its motion on October 1. This demonstrates an
eagerness to correct the situation and should have factored into
the district court’s decision. Cf. Charlie Brown Constr. Co. v.
Leisure Sports Inc., 740 P.2d 1368, 1370 (Utah Ct. App. 1987)
(affirming a district court’s order of dismissal when the
plaintiff’s attorney did not learn of or take steps to reverse
dismissal until seven months after the fact).
20160897-CA 8 2018 UT App 2CBS Enterprises v. Sorenson
before us, we have no difficulty concluding that the case should
not have been dismissed in the first instance.
¶18 To determine “whether a [district] court has abused its
discretion in dismissing a case for failure to prosecute,” we
typically consider five factors:
(1) the conduct of both parties; (2) the opportunity
each party has had to move the case forward;
(3) what each party has done to move the case
forward; (4) the amount of difficulty or prejudice
that may have been caused to the other side; and
(5) most important, whether injustice may result
from the dismissal.
Cheek v. Clay Bulloch Constr., Inc., 2011 UT App 418, ¶ 7, 269 P.3d
964 (citation and internal quotation marks omitted). 6 But these
factors are less applicable where, as here, there was an
agreement between all parties and approved by the district court
that the proceedings would be stayed.
¶19 In August of 2015, a year before dismissal, the district
court had ordered the case stayed. In doing so, it specified that
the case would resume “only after . . . future order of this
Court.” The first and only “future order” was not one that could
have triggered the commencement of “normal accrual of
litigation deadlines and litigation activities”; rather, the next
order was the order of dismissal, which of course could not
trigger the resumption of litigation activities because it ended
the case. By ordering dismissal without first entering an order to
6. As the Cheek court acknowledged, these are known as the
Westinghouse factors. See Cheek v. Clay Bulloch Constr., Inc., 2011
UT App 418, ¶ 7, 269 P.3d 964; see also Westinghouse Elec. Supply
Co. v. Paul W. Larsen Contractor, Inc., 544 P.2d 876, 879 (Utah
1975).
20160897-CA 9 2018 UT App 2CBS Enterprises v. Sorenson
resume litigation of the case, the district court contradicted its
initial order staying the case.
¶20 While we are typically “reluctant to second-guess a trial
court’s interpretation of its own order,” State v. L.A., 2010 UT
App 356, ¶ 16 n.4, 245 P.3d 213, this is an unusual instance
involving a district court’s complete disregard for its own order,
rather than its interpretation of it. Indeed, nowhere in the district
court’s order of dismissal or denial of CBS’s motion does the
district court acknowledge the earlier order. Under these
circumstances, it was an abuse of the district court’s discretion to
order that a stayed case be dismissed for failure to prosecute.
¶21 We reverse the district court’s order denying relief under
rule 60(b)(1) of the Utah Rules of Civil Procedure as well as its
order of dismissal. We remand to the district court for further
proceedings consistent with this opinion.
20160897-CA 10 2018 UT App 2