Fadel v. Deseret First Credit Union

2017 UT App 165THE UTAH COURT OF APPEALS
GEORGE K. FADEL,
Appellant,
v.
DESERET FIRST CREDIT UNION,
Appellee.
Opinion
No. 20160070-CA
Filed August 31, 2017
Second District Court, Ogden Department
The Honorable Noel S. Hyde
No. 150906526
George K. Fadel, Appellant Pro Se
Wallace O. Felsted and Gregory S. Moesinger,
Attorneys for Appellee
JUDGE JILL M. POHLMAN authored this Opinion, in which JUDGES
GREGORY K. ORME and STEPHEN L. ROTH concurred. 1
POHLMAN, Judge:
¶1 George K. Fadel appeals the district court’s judgment
entered in favor of Deseret First Credit Union (Deseret First).
Fadel contends the court erred in dismissing his complaint that
sought to foreclose an attorney’s lien. We affirm.
1. Judge Stephen L. Roth participated in this case as a member of
the Utah Court of Appeals. He retired from the court before this
decision issued.
Fadel v. Deseret First Credit Union
BACKGROUND
The Underlying Lawsuit
¶2 Jerry W. Parkin as successor trustee for the Wilma G.
Parkin Family Protection Trust (the Trust) owned a piece of real
property in Bountiful, Utah. Deseret First claimed an interest in
the property and brought suit against the Trust to quiet title. The
Trust hired Fadel to represent it in the litigation against Deseret
First.
¶3 In the written attorney–client agreement between Fadel
and the Trust, the Trust agreed to pay Fadel “one-half of the
amounts recovered by settlement or judgment . . . in excess of
$10,000.” The fee agreement also provided that recovery in the
form of property “could result in [Fadel] obtaining a joint
interest in the land with [the Trust] after deducting $10,000.”
¶4 Deseret First and the Trust entered into mediation. Fadel
was present for a portion of the mediation but left before its
conclusion. After Fadel left, Deseret First and the Trust entered
into a settlement agreement pursuant to which the Trust agreed
to convey the property to Deseret First by general warranty deed
in exchange for a payment of $30,000. On that same day, Deseret
First tendered, and the Trust accepted, the $30,000 payment, and
Deseret First received the general warranty deed. The next day,
October 21, 2011, Deseret First recorded the general warranty
deed with the Davis County Recorder’s Office.
¶5 Three days later, on October 24, 2011, Fadel recorded a
notice of attorney’s lien against the property with the Davis
County Recorder’s Office. He also filed the notice of lien with the
district court the next day. In the notice, Fadel acknowledged
that the Trust conveyed the deed to Deseret First before he
recorded the notice of lien.
¶6 The Trust retained a new attorney who filed a
substitution of counsel on behalf of the Trust, and Deseret First
20160070-CA 2 2017 UT App 165Fadel v. Deseret First Credit Union
and the Trust filed a stipulated motion to dismiss with prejudice.
The district court, over Fadel’s objection, entered an order
dismissing the quiet title case.
¶7 After being replaced as counsel, Fadel nevertheless
repeatedly filed motions and documents in the quiet title case
purportedly on behalf of the Trust. In response, Deseret First
moved to enforce the settlement agreement and for sanctions
against Fadel, citing rule 11 of the Utah Rules of Civil Procedure
and the court’s inherent authority to regulate the conduct of
attorneys. Deseret First also petitioned the court to nullify
Fadel’s attorney’s lien and sought damages under the wrongful
lien statute. Months later, Fadel filed a motion to intervene,
which both Deseret First and the Trust opposed.
¶8 Judge David Hamilton, who was presiding over the case,
ruled in favor of Deseret First in most respects. First, Judge
Hamilton ruled that the Trust and Deseret First had resolved
their dispute, that the settlement agreement was valid and
enforceable, and that Fadel had no basis to submit pleadings on
the Trust’s behalf. Second, Judge Hamilton imposed sanctions,
including an award of attorney fees, against Fadel. The sanctions
were warranted, the judge explained, because Fadel had
“repeatedly attempted to represent the Trust in filing motions,
and he [had] repeatedly taken positions that [were] frivolous,
meritless, and inconsistent” with the district court’s rulings.
Fadel had also attempted to pursue, on behalf of himself and the
Trust, claims against Deseret First “that, if at all, belonged to the
Trust but that were resolved and released under the Settlement
Agreement.” Third, Judge Hamilton ruled that Fadel’s notice of
attorney’s lien was void ab initio. He explained that, although
Fadel was entitled to an attorney’s lien pursuant to statute, the
notice of lien that Fadel recorded with the county on October 24,
2011, was “plagued by errors and failed to comply with
statutory requirements.” Judge Hamilton ultimately denied
Deseret First’s request for damages, however, because he
determined that Fadel’s attorney’s lien itself was not wrongful as
defined under the wrongful lien statute. Fourth, because Fadel
20160070-CA 3 2017 UT App 165Fadel v. Deseret First Credit Union
filed his motion to intervene after the quiet title case had been
dismissed with prejudice, Judge Hamilton denied the motion as
untimely. Fadel appealed, and this court affirmed the district
court’s decisions. See Deseret First Fed. Credit Union v. Parkin, 2014
UT App 267, ¶¶ 1, 22, 339 P.3d 471.
The Present Lawsuit
¶9 After the quiet title case concluded, Fadel filed the present
action against Deseret First. In his complaint, Fadel alleged that
Deseret First took title to the property subject to his attorney’s
lien. He cited his attorney fee agreement with the Trust and
relied on Judge Hamilton’s statement in the prior case that Fadel
was entitled to an attorney’s lien. 2 In terms of relief, Fadel sought
to foreclose his attorney’s lien and sought an interest in the
property as well as a portion of the rents on the property.
¶10 Deseret First moved to dismiss, asserting that Fadel’s
complaint was “attempting to enforce and foreclose a Notice of
Attorney’s Lien that was previously invalidated, voided, and
struck by Judge Hamilton” in the quiet title case. According to
Deseret First, when it recorded the general warranty deed,
“Fadel had neither asserted nor perfected his attorneys’ lien for
any unpaid compensation.” It asserted that Fadel thus had “no
pending lien against Deseret First’s real property” and that
because the property had “already been conveyed by the former
client to Deseret First,” Fadel could not “create a new lien” on
the property. Deseret First also argued, among other things, that
res judicata barred Fadel’s claims because they had previously
been adjudicated. Deseret First requested sanctions, including an
award of attorney fees pursuant to the court’s inherent authority
and the bad faith attorney fees statute.
2. Fadel’s complaint did not acknowledge that Judge Hamilton
had concluded that the notice of attorney’s lien was void ab
initio.
20160070-CA 4 2017 UT App 165Fadel v. Deseret First Credit Union
¶11 In response, Fadel contended that the invalidity of the
notice of lien “[did] not affect the validity of the lien” itself and
was also insignificant because Deseret First had actual notice of
his lien. He further contended that his “attorney’s lien itself was
not wrongful” under the definition in the wrongful lien statute
because it was “expressly authorized” under the attorney’s lien
statute. Moreover, Fadel contended his suit could proceed
because “[t]he issue of [his] entitlement to a lien for services
rendered and costs advanced ha[d] not been litigated.”
According to Fadel, he was filing a separate legal action to
foreclose the lien because he had been denied intervention in the
quiet title case.
¶12 Judge Noel Hyde, presiding over this action, granted
Deseret First’s motion to dismiss. In so ruling, the district court
accepted the complaint’s factual allegations as true, reviewed the
record in the quiet title case, and considered other undisputed
facts outside the complaint. The court first noted that questions
relating to the quiet title case, “including as to its propriety,
underpinnings of the settlement, and the events relating to the
mediation,” had already been adjudicated and that Fadel could
not collaterally attack the final determination in the quiet title
case in the present action. It then declared that Fadel’s claim to a
portion of the property’s rents amounted to an attempt by Fadel
to assert a claim on the Trust’s behalf, but because the Trust was
Fadel’s former client, Fadel was “not in the position to assert any
claim for the Trust.” Moreover, Fadel’s inability to assert claims
that belonged to the Trust had been decided in the quiet title
case and was barred by res judicata.
¶13 The court explained that the only issue before it was the
attorney’s lien asserted by Fadel against Deseret First and the
property. Viewing the undisputed facts in the light most
favorable to Fadel, the court ruled that, as a matter of law,
“Fadel ha[d] no lien on Deseret First’s real property on which he
could foreclose.” The court determined that an attorney’s lien
may attach only to a client’s property and that an attorney’s lien
on real property has its priority based upon when it is filed or
20160070-CA 5 2017 UT App 165Fadel v. Deseret First Credit Union
recorded with the county recorder. The court reasoned that
Deseret First was never Fadel’s client and “Fadel’s attorney’s lien
in this case is not enforceable at law because it did not attach
with any priority to the real property before the Trust conveyed
the real property to Deseret First.” The court thus concluded that
Fadel’s complaint failed to set forth a valid legal basis upon
which a claim could be maintained against Deseret First.
Accordingly, it dismissed Fadel’s complaint on the merits with
prejudice.
¶14 In addition, the court determined that Fadel’s claims were
“without merit” and “were not brought or asserted in good
faith.” It specifically found that Fadel’s assertion of claims
belonging to the Trust was not in good faith because his right to
do so had already been resolved against him in the quiet title
case, something of which Fadel was well aware. As a result, the
court awarded $2,000 in attorney fees to Deseret First under the
bad faith attorney fees statute. Fadel appeals.
ISSUES AND STANDARDS OF REVIEW
¶15 Fadel raises two principal issues on appeal. First, Fadel
contends that the district court erred in dismissing his
complaint. “The grant of a motion to dismiss pursuant to rule
12(b)(6) is a question of law that we review for correctness,
affording the trial court’s decision no deference.” Williams v.
Bench, 2008 UT App 306, ¶ 6, 193 P.3d 640. Because the court
considered undisputed facts outside of Fadel’s complaint, the
court effectively treated Deseret First’s motion to dismiss as a
motion for summary judgment under rule 56 of the Utah Rules
of Civil Procedure. Utah R. Civ. P. 12(b). Summary judgment is
appropriate only “if the moving party shows that there is no
genuine dispute as to any material fact and the moving party is
entitled to judgment as a matter of law.” Id. R. 56(a). We review
a “court’s legal conclusions and ultimate grant or denial of
summary judgment for correctness and view[] the facts and all
reasonable inferences drawn therefrom in the light most
20160070-CA 6 2017 UT App 165Fadel v. Deseret First Credit Union
favorable to the nonmoving party.” Orvis v. Johnson, 2008 UT 2,
¶ 6, 177 P.3d 600 (citations and internal quotation marks
omitted).
¶16 Second, Fadel challenges the district court’s award of
attorney fees to Deseret First under the bad faith attorney fees
statute. “We review a trial court’s grant of attorney fees under
[the bad faith statute] as a mixed question of law and fact.” Verdi
Energy Group, Inc. v. Nelson, 2014 UT App 101, ¶ 13, 326 P.3d 104(alteration in original) (citation and internal quotation marks
omitted). “A finding of bad faith is a question of fact and is
reviewed by this court under the ‘clearly erroneous’ standard.”
Jeschke v. Willis, 811 P.2d 202, 204 (Utah Ct. App. 1991). “The
‘without merit’ determination is a question of law, and therefore
we review it for correctness.” Id. at 203.
ANALYSIS
I. Dismissal of Fadel’s Complaint
¶17 Fadel challenges the dismissal of his complaint on three
main grounds. First, he contends that the district court erred in
deciding the issues as a matter of summary judgment. Second,
he contends that the district court erred in concluding that two
particular facts were undisputed. Third, he contends that the
district court erred in dismissing the case on its merits.
¶18 Fadel first contends that the district court “erred in
deciding the issues as a summary judgment matter, where the
only pleading on record was the complaint.” According to Fadel,
“[i]t is only in connection with a motion for judgment on the
pleadings that the court can treat the motion as one for summary
judgment pursuant to rule 56.”
¶19 Fadel’s position is directly contradicted by the plain
language of rule 12 of the Utah Rules of Civil Procedure. Rule 12,
which governs motions to dismiss, provides that if, “on a
20160070-CA 7 2017 UT App 165Fadel v. Deseret First Credit Union
motion . . . to dismiss for failure of the pleading to state a claim
upon which relief can be granted, matters outside the pleading
are presented to and not excluded by the court, the motion shall
be treated as one for summary judgment and disposed of as
provided in Rule 56.” Utah R. Civ. P. 12(b). Here, Deseret First
moved to dismiss Fadel’s complaint pursuant to rule 12(b)(6).
Because Deseret First moved to dismiss for failure to state a
claim upon which relief could be granted, id., and because the
district court considered additional items that were not set forth
in the complaint, the court did not err in treating Deseret First’s
motion to dismiss as one for summary judgment under rule 56. 3
¶20 Second, Fadel contends that the district court erred in
stating that it was undisputed that there was a mediation
between the Trust and Deseret First, and that a settlement
flowed from that mediation. Specifically, he argues that he
“clearly disputed . . . that no mediation agreement was prepared,
approved or filed by the mediator or Fadel.” Thus, Fadel
reasons, the settlement agreement “should not be interpreted as
being a mediated agreement.”
¶21 This argument fails because it is a collateral attack on the
validity and enforceability of the settlement agreement, issues
conclusively resolved by Judge Hamilton in the quiet title case.
See State v. Nicholls, 2017 UT App 60, ¶ 44, 397 P.3d 709 (“A
3. Fadel also suggests that he was not given a reasonable
opportunity to present all pertinent material, citing the district
court’s decision to limit the length of oral argument. See Utah R.
Civ. P. 12(b) (providing that when a motion to dismiss is treated
as one for summary judgment, “all parties shall be given a
reasonable opportunity to present all material made pertinent to
such a motion by Rule 56”). But Fadel has not identified any
pertinent argument or material that he was prevented from
presenting to the district court, and thus has failed to carry his
burden of persuasion on appeal. See id. R. 61.
20160070-CA 8 2017 UT App 165Fadel v. Deseret First Credit Union
collateral attack is an attempt to avoid the binding force of a
judgment in a proceeding not instituted for the purpose of
correcting, modifying, or vacating the judgment, but in order to
obtain some specific relief which the judgment currently stands
as a bar against.” (citation and internal quotation marks
omitted)). Thus, we agree with the district court’s assessment
that although “Fadel does not agree with Deseret First’s and the
Trust’s settlement,” the settlement agreement’s enforceability is
not a proper subject of the present action. See id. (“The general
rule of law is that a judgment may not be drawn in question in a
collateral proceeding . . . .” (omission in original) (citation and
internal quotation marks omitted)).
¶22 As his third argument, Fadel contends that the district
court erred in dismissing his complaint on the merits, asserting
that Deseret First’s recording of the general warranty deed did
not take priority over his attorney’s lien. He also asserts that
because Deseret First had actual notice of his attorney’s lien, his
lien should be enforceable against Deseret First.
¶23 Utah Code section 38-2-7 governs attorney’s liens. An
attorney’s lien under section 38-2-7 “is purely a creature of
statute.” Phillips v. Smith, 768 P.2d 449, 452 (Utah 1989) (citing an
earlier version of the attorney’s lien statute). The statute states,
“An attorney shall have a lien for the balance of compensation
due from a client on any money or property owned by the client
that is the subject of or connected with work performed for the
client,” including, “any real, personal, or intangible property”
and “any settlement . . . in the client’s favor in any matter or
action in which the attorney assisted.” Utah Code Ann. § 38-2-
7(2) (LexisNexis Supp. 2016) (emphasis added). 4 “An attorney’s
lien commences at the time of employment of the attorney by the
4. Although the attorney’s lien statute has been amended since
the time Fadel filed his notice of lien, we rely on the relevant
portions of the current version of the statute because recent
amendments do not alter our analysis.
20160070-CA 9 2017 UT App 165Fadel v. Deseret First Credit Union
client,” and the attorney may enforce the lien by “moving to
intervene in a pending legal action . . . in which the attorney has
assisted or performed work” or “by filing a separate legal
action.” Id. § 38-2-7(3), (4). If real property is the subject of a lien,
an attorney may file a notice of lien in the pending legal action or
“with the county recorder of the county in which [the] real
property . . . is located.” Id. § 38-2-7(5).
¶24 The priority of the attorney’s lien in relation to a person
who takes an interest in property that is subject to an attorney’s
lien differs depending on what type of property is involved.
With respect to property other than real property, “[a]ny person
who takes an interest in any property . . . that is subject to an
attorney’s lien with actual or constructive knowledge of the
attorney’s lien, takes the interest subject to the attorney’s lien.”
Id. § 38-2-7(8). But with respect to real property, an “attorney’s
lien on real property has as its priority the date and time when a
notice of lien is filed with the county recorder of the county in
which [the] real property that is subject to a lien . . . is located.”
Id. § 38-2-7(9). In other words, to perfect an attorney’s lien
against a client’s real property and hold priority over others who
later take an interest in that property, the attorney must record
the notice of lien with the county recorder. See id.
¶25 In this case, Fadel asserted his right to foreclose the
attorney’s lien as against Deseret First. This assertion depends on
the validity of Fadel’s contention that Deseret First took title to
the property subject to his attorney’s lien. The district court
rejected this notion. It specifically concluded that Fadel’s
attorney’s lien “is not enforceable at law because it did not attach
with any priority to the real property before the Trust conveyed
the real property to Deseret First.” As a result, the court
concluded that Fadel’s complaint failed to set forth a valid legal
basis upon which a claim could be maintained against Deseret
First.
¶26 Fadel contends that his attorney’s lien attached to the
property and held priority over Deseret First’s recording of the
20160070-CA 10 2017 UT App 165Fadel v. Deseret First Credit Union
general warranty deed. But this contention is not supported by
the law for two reasons. First, “[a]n attorney’s lien on real
property has as its priority the date and time when a notice of
lien is filed with the county recorder of the county in which [the]
real property that is subject to a lien . . . is located.” Id. It is
undisputed that Fadel recorded notice of his attorney’s lien three
days after Deseret First recorded the general warranty deed.
Consequently, Fadel’s attorney’s lien did not attach to the
property and Fadel could not, as a matter of law, hold a superior
interest in the property over Deseret First.
¶27 Fadel nevertheless suggests that his attorney’s lien on the
property was enforceable because Deseret First had actual notice
of his lien. This argument is misplaced. Even if Deseret First had
actual notice of Fadel’s lien, a person’s actual or constructive
knowledge of an attorney’s lien is relevant under the attorney’s
lien statute only when the person “takes an interest in any
property, other than real property, that is subject to an attorney’s
lien.” Id. § 38-2-7(8) (emphasis added). Because the issue in this
case is whether Fadel held a valid attorney’s lien attached to real
property, the relevant question is whether Fadel recorded a
notice of lien before Deseret First recorded the general warranty
deed. See id. § 38-2-7(9). Fadel did not. Therefore, his attorney’s
lien could not serve as a basis for a preexisting, and thus
superior, interest in the property.
¶28 And, second, once the Trust conveyed the property to
Deseret First, Fadel could no longer establish a valid attorney’s
lien on the property. Section 38-2-7 allows an attorney to hold “a
lien for the balance of compensation due from a client on any
money or property owned by the client,” including, any real
property. Id. § 38-2-7(2) (emphasis added). Once the Trust
transferred the property to Deseret First, the property was no
longer owned by Fadel’s former client, the Trust. Thus, the
attorney’s lien statute does not authorize Fadel to lien or
encumber the property because it is no longer “property owned
by [his former] client.” See id.; cf. Capital Assets Fin. Services v.
Lindsay, 956 P.2d 1090, 1095 (Utah Ct. App. 1998) (stating that “a
20160070-CA 11 2017 UT App 165Fadel v. Deseret First Credit Union
judgment lien cannot attach to a debtor’s real property if the
property has already been sold, conveyed, or quitclaimed—even
if the judgment lien is recorded first—because there is no
‘interest’ to which the lien can attach”), aff’d sub nom. Capital
Assets Fin. Services v. Maxwell, 2000 UT 9, 994 P.2d 201.
¶29 In sum, because Fadel filed his notice of attorney’s lien
after Deseret First recorded its deed and, alternatively, because
Fadel’s former client no longer owned the property, we conclude
that the district court correctly determined that Fadel’s
attorney’s lien “is not enforceable at law because it did not attach
with any priority to the real property before the Trust conveyed
the real property to Deseret First.” 5 The district court also
correctly concluded that Fadel’s complaint, seeking to foreclose
the attorney’s lien, failed to set forth a valid legal basis upon
which a claim may be maintained against Deseret First. We
therefore affirm the dismissal of Fadel’s complaint.
II. Attorney Fees Under Utah Code Section 78B-5-825
¶30 Next, Fadel challenges the district court’s award of
attorney fees to Deseret First pursuant to Utah Code section 78B-
5-825. Section 78B-5-825, the bad faith attorney fees 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
brought or asserted in good faith.” Utah Code Ann. § 78B-5-
825(1) (LexisNexis 2012). To award fees pursuant to this section,
5. To the extent Fadel raises other arguments challenging the
dismissal of his complaint, those arguments are not adequately
briefed and he has failed to meet his burden of demonstrating
error. See Utah R. App. P. 24(a)(9); Bank of Am. v. Adamson, 2017
UT 2, ¶ 12, 391 P.3d 196 (“[A]n appellant who fails to adequately
brief an issue will almost certainly fail to carry its burden of
persuasion on appeal.” (citation and internal quotation marks
omitted)).
20160070-CA 12 2017 UT App 165Fadel v. Deseret First Credit Union
“a trial court must determine both that the losing party’s action
or defense was ‘without merit’ and that it was brought or
asserted in bad faith.” Still Standing Stable, LLC v. Allen, 2005 UT
46, ¶ 7, 122 P.3d 556. Fadel attacks both determinations
supporting the attorney fees award against him.
A. Without Merit
¶31 Fadel asserts that the district court erred in concluding
that his complaint was without merit. In particular, he seems to
argue that his claims had merit because “[t]here has yet to be an
appellate decision construing application of [section 38-2-7] to a
person having actual notice of the lien claim, and if priority is
determined, to what extent is that priority.” He also asserts that
with respect to his claim for rent,6 “[n]o priority exists to defeat
the lien claim for that personal property.”
¶32 “To determine whether a claim is without merit, we look
to whether it was frivolous or of little weight or importance
having no basis in law or fact.” Migliore v. Livingston Fin., LLC,
2015 UT 9, ¶ 31, 347 P.3d 394 (citation and internal quotation
marks omitted). This court has recently explained that “the bare
existence of a basis in law for a potential claim is not sufficient to
make a claim meritorious.” Bresee v. Barton, 2016 UT App 220,
¶ 49, 387 P.3d 536. “Rather, there must also be a factual basis for
a party’s claims apart from a statutory provision that provides a
theoretical ‘basis in law’ for those claims.” Id. (citation omitted).
6. As noted above, supra ¶ 12, Fadel’s complaint sought an
interest in the property and a portion of the rents on the
property. The district court determined that this was an
“attempt[] to assert a claim on behalf of the Trust, by suggesting
that the Trust has an enforceable claim for rentals against
Deseret First.” The court ruled, like Judge Hamilton did in the
quiet title case, that Fadel was “legally incapable of asserting
claims on behalf of the Trust or that belong to the Trust.”
20160070-CA 13 2017 UT App 165Fadel v. Deseret First Credit Union
¶33 The district court concluded that Fadel’s claims were
“without merit, based upon the legal determinations made in
this case.” Fadel has not shown error in this assessment. The fact
that an appellate court has not specifically addressed the
statutory interpretation he advances does not render his claim
meritorious. Fadel made no credible argument that, under
section 38-2-7, Deseret First took title to the property subject to
his attorney’s lien. Similarly, Fadel did not establish a factual
basis for his claims, given that he filed his notice of attorney’s
lien after his former client transferred the real property at issue.
This same flaw was identified during the quiet title case; Judge
Hamilton ruled that Fadel’s notice of lien was void ab initio due
to its “errors and fail[ure] to comply with statutory
requirements.” As for his claim seeking rents, Fadel maintains
that his claim had merit. But any such claim was the Trust’s to
assert, and Fadel has not shown a basis in law or fact for him to
assert a claim that the Trust effectively relinquished in the
settlement. Accordingly, the district court did not err in
determining that Fadel’s complaint was without merit.
B. Bad Faith
¶34 Fadel asserts that the district court erred in finding that he
did not bring his claims in good faith. In particular, he argues
that “the district court made no determination that Fadel had no
honest belief in his claim.”
¶35 For a district court to determine that an action was
brought in bad faith, “it must find that the plaintiff (1) [lacked
a]n honest belief in the propriety of the activities in question;
(2) . . . inten[ded] to take unconscionable advantage of others;
[or] (3) [had] intent to, or knowledge of the fact that the activities
in question will . . . hinder, delay or defraud others.” Verdi
Energy Group, Inc. v. Nelson, 2014 UT App 101, ¶ 30, 326 P.3d 104(alterations and omissions in original) (citation and internal
quotation marks omitted). On appeal, a “trial court’s finding of
bad faith may be upheld despite a party’s claim that he or she
held a subjectively reasonable or honest belief in the propriety of
20160070-CA 14 2017 UT App 165Fadel v. Deseret First Credit Union
the claims and defenses that the party raised during the course
of a case.” Bresee, 2016 UT App 220, ¶ 56. Indeed, this court will
affirm a finding of bad faith “when there is sufficient evidence in
the record to support a finding that at least one of the[] three
factors applies.” Blum v. Dahl, 2012 UT App 198, ¶ 9, 283 P.3d
963 (citation and internal quotation marks omitted).
¶36 In this case, the district court found that Fadel’s claims
were not brought in good faith. As one example, the court
determined that Fadel’s claim for rentals was a claim that
belonged to the Trust and “could not be brought in good faith,
because of the rulings and orders” in the quiet title case that
precluded Fadel from asserting or maintaining such claims. The
court further found that Fadel was “aware of those limitations
and restrictions” and that “to assert a claim in the face of those
rulings and orders, which have been repeatedly stated and
affirmed on appeal, does not and cannot constitute a good faith
basis for the pursuit of those claims.”
¶37 Fadel has not shown that the district court’s bad-faith
finding was clearly erroneous. With regard to his claim for
rentals, Fadel asserts that “[e]ven if an allegation of the
Complaint could be interpreted as ‘assertions of claims
purported to be claims of the Trust . . . ,’ this does not prove that
such assertion is dishonest, where there was no evidence that
Fadel lacked an honest belief in the Trust’s claim for rentals.” 7
But Fadel does not address the fact that he lacked authority to
assert claims on the Trust’s behalf. Even if Fadel honestly
7. Fadel argues in passing that “[t]he court should have specified
which parts of the Complaint were not brought in good faith and
which were brought in good faith.” But because he has not
adequately supported and briefed this argument, he has not
carried his burden of persuasion on appeal. See Utah R. App. P.
24(a)(9) (requiring appellants to provide reasoned legal
argument, “with citations to the authorities, statutes, and parts
of the record relied on”); Bank of Am., 2017 UT 2, ¶ 12.
20160070-CA 15 2017 UT App 165Fadel v. Deseret First Credit Union
believed that the Trust had a claim for rentals, Fadel could not,
in good faith, continue to represent the Trust’s interests in the
present action, given the district court’s finding that Fadel was
aware that his attempts to represent the Trust post-settlement
had been repeatedly rejected in the quiet title case. Cf. Bresee v.
Barton, 2016 UT App 220, ¶ 61, 387 P.3d 536 (affirming the
district court’s bad-faith finding where, when they initiated the
lawsuit, the appellants “could not have had an honest belief”
that they had a legal basis for pursuing litigation (citation and
internal quotation marks omitted)). Accordingly, we affirm the
district court’s bad-faith finding and its award of attorney fees
pursuant to the bad faith attorney fees statute.
III. Attorney Fees on Appeal
¶38 Finally, Deseret First seeks an award of the attorney fees it
incurred on appeal in defending the district court’s decision.
Generally, “[w]hen a party who received attorney fees below
prevails on appeal, the party is also entitled to fees reasonably
incurred on appeal.” Austin v. Bingham, 2014 UT App 15, ¶ 33,
319 P.3d 738 (citation and internal quotation marks omitted).
This rule applies “when the basis for attorney fees in the trial
court is the bad faith statute.” Id.; see also Bresee, 2016 UT App
220, ¶ 66 (“We award the Bartons their fees incurred for
defending the [pertinent motion] on appeal because they were
awarded fees under the bad-faith attorney fee statute on that
issue below and have prevailed on that issue on appeal.”).
Deseret First has successfully defended the district court’s
dismissal of Fadel’s complaint and the district court’s award of
attorney fees pursuant to the bad faith attorney fees statute, and
we therefore grant its request for an award of the attorney fees
incurred on appeal. 8
8. Deseret First also asserts that it is entitled to attorney fees
pursuant to rule 33 of the Utah Rules of Appellate Procedure,
but because we grant fees on another basis, we need not consider
whether rule 33 would merit such an award.
20160070-CA 16 2017 UT App 165Fadel v. Deseret First Credit Union
CONCLUSION
¶39 We affirm the district court’s dismissal of Fadel’s
complaint because, as a matter of law, Fadel is not entitled to
foreclose his attorney’s lien against Deseret First’s real property.
We remand the matter to the district court for the limited
purpose of calculating the reasonable attorney fees that Deseret
First incurred on appeal.
20160070-CA 17 2017 UT App 165