In re Harding Trust

2023 UT App 81THE UTAH COURT OF APPEALS
IN THE MATTER OF THE A. DEAN HARDING
MARITAL AND FAMILY TRUST.
ROBERT G. HARDING,
Appellee,
v.
RICKIE TAYLOR AND ESTATE OF MARGENE HARDING,
Appellants,
ESTATE OF MARGENE HARDING,
Appellant,
v.
ROBERT G. HARDING AND JILL H. KENDALL,
Appellees.
Opinion
No. 20200808-CA
Filed August 3, 2023
Fourth District Court, American Fork Department
The Honorable Darold McDade
The Honorable Roger W. Griffin
The Honorable Robert C. Lunnen
No. 153100007
Jared W. Moss,
Attorney for Appellee Robert G. Harding
Russell S. Walker,
Attorney for Appellant Rickie Taylor
D. David Lambert and Leslie W. Slaugh,
Attorneys for Appellant Estate of Margene Harding
Steven H. Bergman,
Attorney for Appellee Jill Kendall
In re Harding Trust
JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGES
JOHN D. LUTHY and AMY J. OLIVER concurred.
HARRIS, Judge:
¶1 This case arises from a protracted and multi-faceted
dispute among siblings and stepsiblings regarding the use and
distribution of the assets in a trust created by Dean Harding. After
four years of litigation and a six-day bench trial, the trial court
determined that Rickie Taylor, acting as trustee of his deceased
stepfather’s trust, engaged in numerous acts of self-dealing and
other breaches of fiduciary duties resulting in more than $5
million in damages. After trial, the court also determined—sua
sponte—that Margene Harding (Taylor’s mother and the lifetime
beneficiary of the trust) had been vicariously liable for Taylor’s
actions, and therefore held Margene’s estate (the Estate) jointly
and severally responsible for the damages Taylor caused. The
court then entered judgment against Taylor and the Estate jointly
and severally, and in favor of petitioner Robert Harding, in
amounts approximating $5 million. Taylor and the Estate now
each separately appeal.
¶2 In his appeal, Taylor raises several challenges. First, he
takes issue with the court’s order denying his motion to amend
his answer to add certain additional affirmative defenses. Second,
he challenges the court’s summary judgment order in which the
court determined, as a matter of law, that Taylor made unlawful
distributions from the trust. Next, Taylor appeals the court’s
orders excluding his expert witnesses. Finally, Taylor makes
several complaints about the court’s judgment against him,
including the amount of damages ordered. As discussed below,
we reject most of Taylor’s complaints, although we find merit in
one aspect of his challenge to the court’s damages award.
¶3 In its appeal, the Estate also raises several issues for our
consideration. First, it challenges the court’s sua sponte
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determination that it should be jointly and severally liable for the
damages caused by Taylor’s wrongdoing. Second, the Estate
appeals the court’s decision regarding the appropriate interest
rate to be applied to a debt two of Dean’s children owed the trust.
Third, it raises several issues with the form of the judgment.
Finally, it takes issue with the court’s decision not to award it
attorney fees. We find merit in many of the issues the Estate raises.
¶4 For the reasons discussed herein, we affirm some of the
court’s rulings, but detect error in others, and therefore vacate the
court’s judgment and remand for further proceedings.
BACKGROUND
The Trust and Dean’s Death
¶5 During his lifetime, Dean Harding was a successful
businessman who owned and operated a commercial heating,
ventilation, and air conditioning company. With his first wife,
Dean 1 had three children: Robert G. Harding, Jill H. Kendall, and
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Jeana Vuksinick. In the mid-1980s, after Dean’s first wife had
passed away, Dean married Margene Harding. Margene had
several children from previous marriages, including Taylor. After
Dean married Margene, Taylor became Dean’s stepson and the
stepsibling of Robert, Jill, and Jeana.
¶6 In 1994, in an effort to manage his assets and plan his estate,
Dean created the A. Dean Harding Marital and Family Trust
(Trust). The beneficiaries of the Trust were Dean’s “surviving
spouse”—Margene—and Dean’s three children. Under the terms
of the Trust, upon Dean’s death, and if Dean’s “spouse survives”
1. Because several of the individuals involved in this case are
members of the same family, we often refer to them by their first
names, with no disrespect intended by the apparent informality.
20200808-CA 3 2023 UT App 81In re Harding Trust
him, “all property subject to [the Trust] shall be divided into two
parts known as the marital share and the family share.” Dean’s
surviving spouse was to have the use of certain Trust assets
during her lifetime, and then after her death the Trust assets were
to be distributed to Dean’s three children “in equal shares.”
Margene’s own children—including Taylor—were not direct
beneficiaries of the Trust.
¶7 Any income earned by any part of the Trust was to be paid
to Dean’s spouse, and any excess “undistributed” income from
the marital share was, upon the spouse’s death, to pass to the
“spouse’s estate.” But aside from such income, “all other
properties of” the Trust, including all unused principal, were to
pass to Dean’s three children upon the spouse’s death.
¶8 With regard to Trust principal, the Trust documents did
not authorize any distribution of principal out of the marital share;
those documents state that only the surviving spouse was
empowered to receive—but not empowered “to appoint”—“any
part of” the marital share’s property, but that even she was
empowered to receive “income only.” With regard to the
principal assets of the family share, however, the situation was
different: to the extent that the Trust’s income was not sufficient
to meet the surviving spouse’s ongoing “support and
maintenance” needs, as viewed through the lens of “her
accustomed manner of living,” the trustee was authorized, in his
“discretion,” to use the family share’s principal to meet those
needs. In making the determination about whether to dip into
family share principal to meet the spouse’s needs, the trustee was
to consider any “income or other resources” that the spouse had
at her disposal, and was to “be mindful of the fact that [Dean’s]
primary concern in establishing the [T]rust is [Dean’s] spouse’s
welfare and that the interests of others in the [T]rust are to be
subordinate to [Dean’s] spouse.”
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¶9 The Trust also allowed for “the primary residence owned
by” Dean at the time of his death to be “allocated to” the marital
share. In that event, Dean’s surviving spouse would be allowed to
“reside personally upon the said premises” during her lifetime
but would be responsible for paying property taxes, maintaining
“adequate insurance,” and “perform[ing] such repairs and
maintenance as may be required to maintain the property in the
condition it was maintained prior to [Dean’s] death.”
¶10 Dean’s will—created contemporaneously with the Trust—
contained a “spendthrift clause” that all parties now agree was
incorporated into the Trust. This provision mandated, in relevant
part, that no “interest of any beneficiary” in the Trust “be liable
. . . for the debts, contracts, liabilities, engagements, obligations or
torts of such beneficiary.”
¶11 Dean passed away in January 2004. When he created the
Trust, Dean had named himself as trustee, and had named an
accountant (Accountant) as successor trustee. Upon Dean’s death,
Accountant became the trustee of the Trust, and he estimated that
the Trust contained a total of about $5.8 million in assets.
Accountant further allocated some $1.5 million to the family share
and about $4.3 million to the marital share. Accountant also
allowed Margene to continue to reside in Dean’s residence.
¶12 When Dean died, he was the owner of individual
retirement accounts (IRAs) that were valued at approximately
$1.5 million. These IRAs were among the assets that Accountant
allocated to the marital share of the Trust. Shortly after Dean’s
death, Accountant signed certain forms clarifying that the Trust
was the primary beneficiary of the IRAs. No such forms executed
before Dean’s death are part of the record in this case. But even
before Dean’s death, the account statements from the IRAs clearly
referenced the Trust as the primary beneficiary.
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The Settlement Agreement and the Note
¶13 Soon after Dean’s death, various disputes arose involving
the Trust’s beneficiaries, and in June 2004, due to “growing
contention,” Accountant resigned as trustee. Margene then
appointed her son—Taylor—as the new trustee of the Trust.
Later, Margene also gave Taylor power of attorney over her own
personal finances, which power Taylor utilized to, among other
things, write checks (or otherwise authorize withdrawals) from
her personal bank accounts.
¶14 Robert, Jill, and Jeana questioned Taylor’s status as
successor trustee, and Taylor took issue with an undocumented
$1 million loan (the Loan) that two companies controlled by
Robert and Jill had taken from the Trust prior to Dean’s death.
Both sides filed competing petitions in court raising these and
other disputes, and eventually agreed to resolve their differences
in a settlement agreement (the Settlement Agreement). Among
other things, the Settlement Agreement provided that Taylor
would be allowed to continue as trustee of the Trust, but he would
be required to “provide a full accounting . . . of the Trust assets
and affairs at least annually,” provide “quarterly trust brokerage
statements,” and “communicate with” Robert, Jill, and Jeana
through their designated liaison—Jeana—“at least twice per
month.” Ultimately, in the ensuing years, Jeana met with Taylor
about four times per year to obtain information about the Trust,
and neither Jeana nor her siblings, prior to 2015, ever asked for
additional information from Taylor.
¶15 With regard to the Loan, Robert—both personally and on
behalf of the companies—and Jill agreed to “execute a promissory
note memorializing the undocumented Loan,” and agreed to pay
“[a]ccrued interest” at a “variable” rate equivalent to “the margin
loan rate assessed by S[a]lomon Smith Barney on Brokerage
Account No. 298-02528-13 303 . . . as may fluctuate from time to
time until paid in full.” The promissory note they later signed (the
20200808-CA 6 2023 UT App 81In re Harding Trust
Note) also stated that interest payments were to be made
quarterly, and that if the Note were to be in “default” that
“interest shall accrue at one percent (1%) above” the variable rate
specified. Interest paid on the Note was to be considered income
from the marital share of the Trust and—under the terms of the
Trust—paid to Margene or, if undistributed at her death, to the
Estate. Robert and Jill signed the Note as personal guarantors, but
each did so “only for one-half (1/2) of the remaining balance plus
interest, and only to the extent of [their] inheritance.”
¶16 The Settlement Agreement also had an attorney fees clause,
which provided that if any party to the agreement were “required
to retain counsel to enforce any of the provisions of this
Agreement,” the party “determined to be in substantial default in
any subsequent action shall pay the prevailing [party] its costs
and reasonable attorney fees.” The Note had such a clause too,
pursuant to which Robert and Jill “promise[d] to pay all
reasonable costs and expenses of collection of any amount due
under this Note including reasonable attorney’s fees.”
A Decade of Taylor’s Trust Administration
¶17 Following execution of the Settlement Agreement, Taylor
served as trustee of the Trust for the next thirteen years (until he
was removed by court order in January 2018). During that time,
he took numerous actions that were later questioned by one or
more of Dean’s children.
¶18 Upon assuming the role of trustee, Taylor made little effort
to familiarize himself with much of what his duties entailed. 2 An
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2. This fact, along with the others in this factual recitation, is
presented “in a light most favorable to the trial court’s findings,”
as is required of us in an “appeal from a bench trial.” See Huck v.
Ken’s House LLC, 2022 UT App 64, n.1, 511 P.3d 1220 (quotation
simplified), cert. denied, 525 P.3d 1260 (Utah 2022).
20200808-CA 7 2023 UT App 81In re Harding Trust
attorney hired by the Trust provided Taylor with a document
setting forth some of his duties as trustee, but he read only the
pages the attorney said were important, and he was later unable
to recollect any of the content of the document. Taylor also later
stated that he was unaware of what fiduciary duties are. At one
point, when asked whether he had read the Trust documents
before beginning to authorize distributions of Trust assets, Taylor
stated that he “left that . . . to the attorneys and the accountants.”
¶19 Throughout his tenure as trustee, Taylor was largely
unaware whether the distributions he authorized came from the
marital or family share of the Trust. He later testified that he was
unaware of any written guidelines indicating when it was
appropriate to distribute money from the family share. As noted
above, the Trust allowed Taylor to distribute family share
principal only when the trust income and Margene’s other assets
were insufficient to meet Margene’s accustomed needs, but
Taylor never analyzed Margene’s needs to determine whether
principal distributions were appropriate. Throughout the thirteen
years he served as trustee, Taylor never tracked the distributions
of principal. In addition, with regard to some of the distributions
Taylor made from the Trust—including several five-figure
payments—Taylor was later unable to explain the destination or
purpose of the payments.
¶20 Taylor was also unaware of whether the required
minimum distributions (RMDs) he made from the IRAs were
considered income and therefore payable to Margene, or were
considered principal and therefore subject to the Trust’s
restrictions on distributions of principal. During his time as
trustee, Taylor simply paid 100% of the RMDs from the IRAs to
Margene, as if they were entirely composed of income. He later
learned, however, that pursuant to the provisions of Utah’s
Uniform Principal and Income Act (UPIA), only a small portion
20200808-CA 8 2023 UT App 81In re Harding Trust
of the RMDs could properly be classified as income. See Utah
Code § 22-3-409. 3
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¶21 During his years as trustee, Taylor used his power of
attorney over Margene’s personal finances to make transfers of
money from Margene’s accounts (which were largely funded by
Trust assets) to accounts controlled by Taylor, and Taylor was
unable to explain the reason for many of these transfers. Examples
of these transactions include payment for third-row Utah Jazz
season tickets in the amount of $74,945; a $123,470.59 payment to
a business Taylor owned; purchase of an Arabian horse; a $93,600
payment to Taylor’s sister; and $62,700 in “[f]unds directed to
Taylor personally.” Some of these transfers he characterized as
“gifts” from Margene to him or his siblings.
¶22 Taylor also failed to properly maintain vehicles owned by
the Trust. A motorhome owned by the Trust was used by Taylor’s
siblings until, while being used by Taylor’s nephew, it was stolen.
A truck and “another car,” also owned by the Trust, were gifted
by Margene to Taylor’s sister. And another Trust vehicle was
totaled by Taylor’s son.
¶23 While Taylor was acting as trustee, Robert’s ex-wife served
a writ of garnishment on the Trust regarding money Robert
allegedly owed her in their divorce case. Robert claims to have
first become aware of his ex-wife’s actions when a Trust attorney
informed him that his ex-wife had served the writ on the Trust.
After receiving notice, Robert claims that he hired an expert “to
analyze the propriety of the amount of [her] claim” and that he
obtained legal counsel to potentially dispute or negotiate the
3. In 2020, our legislature amended and renamed this statute,
titling it the “Uniform Fiduciary Income and Principal Act.” Utah
Code § 22-3-101. No party suggests that the recent amendments
are relevant to this case. In this opinion, we refer to this statute as
the UPIA, the title it had during the events giving rise to this case.
20200808-CA 9 2023 UT App 81In re Harding Trust
money owed. However, under the threat of the writ of
garnishment, Taylor authorized payment from the Trust of some
$250,000 to Robert’s ex-wife. Moreover, Robert’s ex-wife had
previously obtained approximately $35,000 from the proceeds of
a short sale of Robert’s home. Robert took issue with Taylor’s
authorization of the payment out of the Trust to his ex-wife,
believing that the payment resulted in his ex-wife receiving at
least $35,000 more than she was entitled to and that it “undercut
any negotiation he had with [her] regarding the [total] amount
owed.” However, Robert’s ex-wife did not make any further
claims against Robert for the money owed, and Robert later
testified that the Trust’s “distributions of funds to [his ex-wife]
did extinguish his debt to her.”
¶24 In the years after the Loan was memorialized in the Note
as part of the Settlement Agreement, Robert and Jill (and their
companies) made only two payments on the $1 million Note.
Those payments totaled about $58,000 and appeared to include
interest calculated at a 2% rate. But no other payments were made,
and the two companies involved eventually went out of business.
No party gave the Trust any notice of the companies’ dissolution,
so the Trust, perhaps understandably, never made a claim on any
of the companies’ assets. A Trust attorney did send a notice of
default in 2006. But the Trust never took any other steps to collect
on the Note from the companies (prior to dissolution) or from
Robert and Jill (as guarantors), and the Note (both principal and
interest) remained unpaid until after Margene’s death.
Margene’s Death and the Ensuing Distributions
¶25 Margene passed away in February 2015, and Taylor was
appointed personal representative of her estate. The terms of the
Settlement Agreement required Taylor to make final distributions
of Trust assets within sixty days of Margene’s death, but he did
not do so within that time period. About six months after
Margene’s death, Taylor made a partial distribution of $775,000
20200808-CA 10 2023 UT App 81In re Harding Trust
(before deductions) to each of the three beneficiaries. Robert
didn’t actually receive any money, though, because Taylor
deducted $524,279.25 from both Robert’s and Jill’s distributions to
account for the unpaid principal (but not the unpaid interest) on
the Loan, and deducted an additional $250,720.75 from Robert’s
tally because of the payment made by the Trust, on Robert’s
behalf, to Robert’s ex-wife. Jill received a payment of $250,720.75,
and Jeana received the full $775,000. Later, in 2016, Taylor was
ordered to transfer nearly all the remaining Trust assets to Dean’s
three children, and he did so by making a distribution to each of
them in the approximate amount of $608,000.
The Lawsuit and the Two Competing Petitions
¶26 In September 2015, Robert filed a petition seeking “full
distribution” from the Trust, a “full accounting” of Trust
expenditures, and “damages resulting from breach of trust.” The
petition named the Trust, Taylor, the Estate, Jill, Jeana, and
Robert’s ex-wife as respondents. As to Taylor, Robert alleged that
Taylor had unlawfully distributed principal from the Trust, and
that at least some of these unlawful distributions had been made
“on Margene’s behalf.” As to his ex-wife, Robert alleged that the
payment made to her from the Trust violated the spendthrift
provision and “interfered with and frustrated [his] settlement
negotiations with” her. 4 And as to the Estate, Robert’s only
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allegation concerned the marital home; he alleged that “Margene
failed to repair and maintain the [home] in the condition it was
maintained prior to Dean’s death.” He made no other substantive
allegations against the Estate, and did not assert that Margene or
the Estate was or should be liable for Taylor’s actions.
¶27 In his prayer for relief at the end of his petition, Robert
requested a full accounting, and asked that the court order Taylor
4. Robert’s ex-wife was eventually dismissed from the lawsuit
prior to trial, and is not a party to this appeal.
20200808-CA 11 2023 UT App 81In re Harding Trust
to make distributions to him and his two siblings as required by
that accounting. He also asked the court to order Taylor to “take
immediate action to recover the funds distributed to” Robert’s ex-
wife. He requested damages against “the Trust and/or Trustee”
resulting from any unlawful distributions Taylor had made from
the Trust. Against the Estate, he sought only damages “for the loss
in value of” the marital home, as well as “a return of principal
wrongfully distributed from the Trust.” Although Jill and Jeana
were listed as respondents, the petition did not set forth any
claims against or requests for relief from them; indeed, as noted,
the petition asked the court to order distributions to all three of
Dean’s children.
¶28 The Estate filed a counter-petition against the Trust,
Robert, and Jill. The petition sought an order compelling Robert
and Jill to pay the interest owed on the Loan to the Estate, pointing
out that interest is classified as income from the marital share of
the Trust and is, under the terms of the Trust, payable to the Estate
(whose heirs include Taylor) upon Margene’s death. The Estate’s
petition suggested that the total amount of interest owed, at the
time the petition was filed, was more than $630,000. With regard
to the Trust, the Estate simply asked that “any amounts still
owing” to the Estate from the Trust be paid. And in this filing, the
Estate included an “objection to” Robert’s petition, arguing that
Robert’s prayer for relief addressing the Estate should be stricken
“when no such allegations are made in the petition itself.”
¶29 Taylor filed an “objection and response” to Robert’s
petition, in which he admitted certain of Robert’s allegations and
denied the rest. He set forth no affirmative defenses of his own,
although he did “join[]” in the defenses set forth in the response
filed by Robert’s ex-wife. In her response, Robert’s ex-wife set
forth nine separate affirmative defenses, including the allegation
that Robert’s “claims are barred by the statute of limitations for
objecting to and/or opposing the” writ of garnishment, “and by
the doctrine of laches.”
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Pretrial Motions
¶30 Following the filing of the two competing petitions and the
responses, the litigation entered the discovery phase. The trial
court issued scheduling orders setting certain deadlines, and the
parties exchanged written discovery, took several depositions,
and attempted mediation.
¶31 About nine weeks prior to the end of the fact discovery
period, Taylor filed a motion asking for leave to amend his
response to add several specific affirmative defenses, including a
claim that he “had a good faith basis for his actions” and a claim
that Robert’s petition was “barred by applicable statutes of
limitation, including, but not limited to” Utah Code sections 78B-
2-305 and -307. In the memoranda supporting his motion, Taylor
never asserted that probate petitions aren’t pleadings subject to
the usual rules of amendment. Robert opposed Taylor’s motion,
arguing that Taylor provided no justification for the delay, that
waiting to amend was a “dilatory move” made at least in part to
“evade [Robert’s] discovery requests,” and that Robert would be
prejudiced because of the little time left in the fact discovery
period. After full briefing, the court held a hearing to consider
Taylor’s motion, and at the conclusion of the arguments denied
the motion from the bench. The court’s minute entry recites that
the motion was denied “[f]or reasons as stated” on the record. But
the record submitted to us does not include a transcript of this
hearing. After the hearing, the court signed an order
memorializing the ruling, therein briefly stating that it had denied
Taylor’s motion because “adequate justification has not been
provided” and because it considered Taylor’s delay
“unreasonable.” Taylor had attempted to justify the amendment,
at least in part, by asserting that he had intended his incorporation
of Robert’s ex-wife’s affirmative defenses to include “all
applicable statutes of limitations and laches defenses.” The court
rejected this justification as “faulty,” determining that Robert’s ex-
wife’s defense was “limited in scope to one specific issue,”
20200808-CA 13 2023 UT App 81In re Harding Trust
namely, the writ of garnishment, and that Taylor’s incorporation
of that defense did not serve to indicate to Robert that Taylor was
asserting any different time-based defense.
¶32 Later, Robert moved for partial summary judgment on the
narrow question of whether Taylor had violated the “terms of the
Trust . . . by invading the principal of the” Trust’s marital share,
and had thereby breached his fiduciary duties. In particular,
Robert asserted that Taylor had made more than $2.2 million
worth of “improper distributions” of principal out of the Trust’s
marital share—some $1 million of which involved distributions
from the IRAs, and some $1.2 million of which involved
distributions from other sources—all of which were contrary to
the Trust documents’ command that no such distributions were
authorized, and that these actions constituted breach of fiduciary
duty. Robert included specific details of the alleged distributions
and supported his allegations with bank statements.
¶33 In response, Taylor did not deny making distributions of
principal from the marital share, and he in fact admitted to
making “over distributions” of principal that “may have been
improper,” but argued that the distributions were nevertheless
“valid” for various reasons. For instance, he argued that the
distributions were valid, at least to some extent, because he was
authorized to distribute principal from the family share at his
discretion. And with regard to the IRA distributions, Taylor
asserted that he relied on the advice of legal and accounting
professionals, and that his actions were therefore reasonable, and
he asserted that it was unclear whether the Trust was even the
proper owner of the IRAs. Taylor also disputed the amount of the
distributions he had made from principal. In reply, Robert
pointed out, among other things, that Taylor had not included an
“advice-of-counsel” affirmative defense in his responsive
pleading, and that the court had already rejected his attempt to
add additional affirmative defenses, including specifically a
defense that he “had a good faith basis for his actions.” Robert
20200808-CA 14 2023 UT App 81In re Harding Trust
thus asserted that Taylor had waived his opportunity to plead an
advice-of-counsel defense.
¶34 After full briefing on the motion, the court held oral
argument, and in an oral ruling at the conclusion of the hearing
granted Robert’s motion, at least in part. The record submitted to
us does not include a transcript of this hearing, so the details and
scope of the oral ruling are unknown to us. In an order entered
about a month later that was intended to memorialize the oral
ruling, the court first noted that the Trust authorized Margene to
receive “income only” from the marital share, and then concluded
that, “[b]ased on . . . Taylor’s admissions and the evidence before
the court, . . . Taylor made unlawful distributions of principal
from the [marital share] to Margene.” But that was as far as the
court went; it recognized that genuine issues of material fact
remained regarding, among other things, the amount and
calculation of the unlawful distributions, as well as whether
Robert and Jill owed money to the Trust or to the Estate related to
the Note. The court reserved all of those issues for trial. And at
least in its written ruling, the court made no mention of Taylor’s
claimed advice-of-counsel defense.
¶35 The court’s order also implicitly rejected Taylor’s
argument that the Trust was not the owner of the IRAs, stating
that the marital share of the Trust “included several [IRAs]” and
that “[t]he required minimum distributions of the IRAs were paid
to” the marital share and transferred to Margene. The court shed
additional light on this matter in another order issued the same
day resolving a separate motion that Robert had filed; in that
other order, the court determined that the Estate “is not the owner
or beneficiary of the IRAs.” This decision was driven by the
court’s determination that the Estate had “fail[ed] to provide any
admissible evidence to create a genuine issue of fact” with regard
to Robert’s assertion—amply supported by the record—“that the
IRAs were properly transferred to and owned by the . . . Trust
after Dean’s death.”
20200808-CA 15 2023 UT App 81In re Harding Trust
¶36 Around the same time, Robert also moved for summary
judgment regarding the payment Taylor had authorized to
Robert’s ex-wife. After briefing and argument, the court held that
the payment violated the spendthrift provision as a matter of law,
but that “[t]here are disputed facts regarding,” among other
things, “the amount of damages, if any,” and concluded that those
issues were reserved for trial. The court, however, noted that
“equity prevents” giving Robert a “windfall of $250,000,” and that
factual questions remained regarding whether Robert “suffered
any interest losses that he . . . may have been entitled to if . . . the
money had been kept longer or there had been a [lower amount
that his ex-wife] would’ve accepted.”
¶37 There were also pretrial skirmishes regarding expert
witnesses. When the time came for Taylor to designate experts, he
designated three: a legal expert and two accounting experts.
Robert elected to receive written reports from the accounting
experts, but opted to take the deposition of Taylor’s proffered
legal expert. Taylor did not ever submit expert reports from his
two proffered accounting experts. On Robert’s motion, and
because Taylor failed to submit reports as required, the court later
excluded Taylor’s accounting experts from testifying in Taylor’s
case-in-chief, although the court did allow one of them to testify
at trial as a rebuttal witness.
¶38 Robert also asked the court to exclude the proffered
testimony of Taylor’s legal expert, arguing that the court “should
not allow a local attorney to tell [it] how to interpret” the Trust
documents. The court granted this motion in an oral ruling made
at a hearing; it later memorialized that ruling in a brief written
order stating simply that, “[a]fter argument by counsel and
review of the briefings filed by the parties, the Court grants
[Robert’s] Motion in Limine excluding all legal expert testimony
at trial.” The record submitted to us does not contain a transcript
of the hearing at which the court rendered its oral ruling, nor does
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it contain any additional elucidation of the court’s reasoning in
granting Robert’s motion to exclude Taylor’s legal expert.
¶39 While Jill and Jeana each hired counsel and participated in
the litigation, neither Jill nor Jeana filed their own petitions or
made any claims of their own against Taylor; indeed, as noted,
they were included as respondents in Robert’s initial petition. But
as the litigation went on, Jill and Jeana began to align themselves
more and more with Robert; in its post-trial findings, the court
observed that, by the time of trial, Jill’s and Jeana’s “interests were
eventually aligned with Robert’s.” About two years into the
litigation, and recognizing some uncertainty about whether Jill
and Jeana were stating claims, Taylor filed a motion attempting to
clarify matters and limit Robert’s damages “to his one-third
beneficial interest or share of the Trust.” Robert, Jill, and Jeana all
separately opposed this motion. In his opposition, Robert stated
that, even though he was the only one of Dean’s children who had
filed a petition, he was seeking damages “for the benefit of all
beneficiaries—[Robert], Jill and Jeana.” After full briefing, the
court held argument to consider Taylor’s motion, and denied it in
an oral ruling at the conclusion of the hearing. The record
submitted to us does not include a transcript of this hearing. A
few weeks later, the court memorialized its oral ruling in a written
order, concluding that Robert “has standing to assert claims on
behalf of all of the Trust beneficiaries” and that “[a]ny damages
that are ultimately found against Taylor are not limited to
[Robert’s] one-third beneficial interest.”
¶40 As the time for trial grew near, Robert filed a motion to
bifurcate, asking the court to separate the trial of the Estate’s
claims—chiefly, for interest on the Loan—from the trial of
Robert’s claims for damages relating to improper distributions of
Trust principal. In this motion, Robert suggested that the claims
stated in his petition against the Estate—regarding the marital
home—were “likely resolved” in light of a recent ruling the court
20200808-CA 17 2023 UT App 81In re Harding Trust
had apparently made regarding the costs to repair the home. 5 4F
Thus, Robert argued, “the only issue remaining” with regard to
his petition “is the amount of damages to be awarded against
Taylor as the Trustee of the Trust,” and therefore in Robert’s view
the Estate “should not be involved in” the trial of the claims set
forth in his petition. The court denied the motion, noting that the
case was scheduled to be tried to the bench and stating that “the
court is capable of keeping separate the testimony of the various
witnesses” regarding the Estate’s petition and Robert’s petition.
¶41 Also prior to trial, on Robert’s motion, the court issued an
order removing Taylor as trustee of the Trust. In that same order,
the court replaced Taylor with two co-trustees: Robert and Jill.
The Trial
¶42 The issues remaining in the case were tried to the bench in
March and April 2019. During the course of the trial, the court
heard fact testimony from Robert, Jill, Jeana, and Robert’s current
wife, as well as from Taylor. The court also heard testimony from
financial experts, one retained by Robert and one by the Estate, as
well as rebuttal testimony from one retained by Taylor. In
addition, the court heard testimony from an accountant and an
attorney who had provided advice to the Trust during Taylor’s
tenure as trustee. After the completion of the parties’ four-day
evidentiary presentation, the court scheduled time for the parties
to present extensive closing arguments, which took place over
another two days the following week. At one point during closing
arguments, Jeana’s attorney made an oral motion “to conform the
pleadings to the evidence that [Jeana] is a one-third beneficiary of
the [T]rust, who essentially has been acting as a Petitioner in this
case.” Over the Estate’s objection, the court ruled that Jeana “is a
Petitioner,” even though the court was not allowing her to “assert
5. This ruling was later amended to remove all reference to any
such costs.
20200808-CA 18 2023 UT App 81In re Harding Trust
any affirmative claims,” and that Jeana had “a third interest, as a
beneficiary,” in the case. After closing arguments, the court then
took the matter under advisement, and asked the parties to
submit proposed findings of fact and conclusions of law that were
stipulated “on as many points as possible.”
Post-Trial Developments
¶43 Perhaps predictably, the parties were unable to reach
agreement on any matter in the findings and conclusions, and by
mid-May they had each submitted individual proposed findings
instead. In Robert’s set of suggested findings, he did not propose
any finding or conclusion that the Estate was (or should be)
vicariously liable for Taylor’s actions, although Robert did
propose that the court “impose[] a constructive trust on the assets
of the Estate” and order that “all remaining [Estate] assets payable
or distributable to Taylor be used to pay the outstanding
judgments in this case.” The court reviewed the parties’ respective
findings and began work on its own written ruling.
¶44 For the next six months, the court held periodic status
hearings approximately every sixty days—in July, September,
and November—sometimes asking for “clarification” or
additional information on issues, and on one occasion stating
simply that it had called the hearing to let the parties know that it
“need[ed] a little additional time to finish” the ruling and offering
its view that “this hearing will technically give [the court] another
60 days.” In the November 2019 status hearing, the court
indicated that it was nearly finished with its written ruling, and
actually announced portions of that ruling during the hearing. In
the course of making those announcements, the court declared—
sua sponte—that it would be “finding that the [E]state is liable,”
along with Taylor, for Taylor’s actions; the court explained that
Taylor “controlled the expenditures of Margene” and “had power
of attorney” and “represented both” the Estate and the Trust, and
that the Estate “benefited from [Taylor’s] misuse of” Trust funds.
20200808-CA 19 2023 UT App 81In re Harding Trust
The court indicated that it was “struggling a little bit on what the
proper law is to divide up the liability between” the Estate and
Taylor, and it asked the parties for supplemental briefing on that
question and certain other issues.
The Court’s Initial Written Ruling
¶45 A couple of weeks later, while the supplemental briefing
was still in process, the court issued a lengthy written ruling
containing both findings of fact and conclusions of law. In that
ruling, the court found, among other things, that Taylor did not
trouble himself to “read the Trust document prior to making
distributions,” that he “was ignorant and at times willfully blind
of the duties he assumed as a fiduciary under Utah law,” “that he
did not make reasonable efforts to inform himself of those duties,”
and that he had, in various ways, breached those duties as trustee
of the Trust. In particular, the court determined that Taylor had
breached several different fiduciary duties, including his duty to
administer the Trust in good faith and as a prudent person would,
his duty of loyalty, and his duty to enforce and defend claims
against the Trust. The court also found that Taylor had breached
a duty to maintain the marital home, explaining that, even though
the Trust documents placed that duty on Margene and not on the
trustee, “Taylor as trustee can be imputed a duty to maintain the
marital home for the welfare of Margene.” And the court offered
its view that, at least in some respects, Taylor’s “testimony lacked
any indicia of credibility.”
¶46 With regard to Taylor’s trust administration, the court
found that Taylor’s conduct not only “fell short of the required
standard” but “crossed over into ‘reckless indifference’ towards
Trust assets, or to acts of bad faith.” In the court’s view, Taylor
“acted as trustee in a dilatory, haphazard, uncaring and slipshod
fashion,” at times “making use of the Trust as if it were his own
personal piggy-bank.” The court found that Taylor “showed a
blatant lack of care about tracking monies coming out of the
20200808-CA 20 2023 UT App 81In re Harding Trust
Trust,” and that “Taylor frequently invaded Trust corpus
principal . . . with no consideration of the limiting terms of the
[T]rust agreement.” The court found “that Taylor did not make an
analysis of his mother’s needs when expending trust funds,”
specifically noting that “Margene had significant assets of her
own . . . that [Taylor] should have . . . considered as sources to
provide for her care and maintenance prior to expenditure of
Trust corpus principal,” including two other properties and some
$2 million in “Zions stock.”
¶47 With regard to Taylor’s duty of loyalty, the court found
that Taylor had engaged in frequent acts of self-dealing, for
himself, his wife, and his siblings, and that he “used his position
as trustee to engage in acts of extensive, repeated, and prolonged
self-dealing” by “repeatedly authoriz[ing] transactions that
directly benefited himself.” The court specifically listed the Jazz
tickets, the Arabian horse, and direct payments to Taylor’s family
members as examples of Taylor’s self-dealing. The court also
mentioned Taylor’s “fail[ure] to control [the] vehicles titled in the
name of the Trust,” stating that it appeared to the court as though
Taylor was unaware that the Trust even owned any vehicles. The
court found that “Taylor’s treatment of the vehicles . . . is typical
of his reckless treatment of other Trust assets and his ignorance of
his fiduciary duties as Trustee.”
¶48 On the question of damages caused by Taylor’s
mismanagement of the Trust, the court adopted the calculations
offered by Robert’s damages expert, explaining that her “methods
provide a reasonably certain calculation of damages” that
“accounts for both excess distributions and losses incurred due to
present value of money.” Based on the methods used by Robert’s
expert, the court calculated that the Trust had sustained damages,
as the result of Taylor’s actions, in the amount of $5,229,095.
¶49 The court also made findings about the marital home,
determining that it “was in excellent repair and condition” at the
20200808-CA 21 2023 UT App 81In re Harding Trust
time of Dean’s death, but that Margene did not continue to
properly maintain the property afterwards. As noted, however,
the court held Taylor responsible for this conduct, imputing
Margene’s duty onto Taylor. The court determined that the total
damages regarding the home were $33,500, and that this amount
was “owed to Jeana,” because Jeana had purchased the home for
full value and then made the repairs to the home herself. 6 The 5F
court took the $33,500 amount from estimates provided by Jeana,
even though, during a separate legal proceeding, Jeana had
claimed she was owed only $29,439 for the repairs.
¶50 The court also determined that Taylor “violated his duty to
enforce and defend claims against the Trust” when he authorized
the $250,000 payment to Robert’s ex-wife. The court found that
Taylor “failed to adequately communicate with Robert . . .
regarding any merits or defenses to [Robert’s ex-wife]’s writ of
garnishment . . . , or even to ascertain whether the amounts
claimed were proper.” The court ruled that Taylor was “liable for
the consequences of” this breach, but in its initial post-trial ruling
the court made no effort to quantify that amount or identify who
the damaged party was. During closing argument and his post-
trial proposed findings, Robert had asked the court to award
$35,000 plus interest on this issue. Nevertheless, the court later
determined, after additional post-trial briefing, that Taylor was
liable for the entire payment of $250,720.25.
¶51 In its initial written ruling, the court also made findings
regarding the Estate’s petition. As noted, the Estate’s main issue
concerned the unpaid interest on the Loan the Trust had made to
6. The record is somewhat unclear as to the identity of the
person(s) or entity from whom Jeana purchased the home—that
is, whether she purchased the home from the Trust or bought out
her siblings’ interest in the home directly after it had been
conveyed to them as tenants in common. Ultimately, this issue is
immaterial to our analysis.
20200808-CA 22 2023 UT App 81In re Harding Trust
Robert and Jill and their companies and, specifically, what the
appropriate interest rate was. While the Note memorializing the
Loan called for an interest rate tied to a particular brokerage
account at Salomon Smith Barney, there were several lengthy
“gap period[s],” ranging from several months to several years,
during which “an interest rate was not published on the account.”
The Estate’s expert used the published rate for the months it was
available, but for the gap periods he employed two different
methods (more fully explained below, in Part II.B) to estimate
what the brokerage account interest rate would have been. Using
these methods, the expert calculated the unpaid interest on the
Note as $922,219.77.
¶52 The court, despite finding that the Estate’s expert’s
averaging “method to cover short gap periods [was] reasonable,”
declined to apply the expert’s interest rates for any of the gap
periods. Instead, the court chose to apply a statutory default
interest rate—one that turned out to be much lower than the rates
suggested by the expert—to all the gap periods. See Utah Code
§ 70A-3-112 (“If an instrument provides for interest, but the
amount of interest payable cannot be ascertained from the
description, interest is payable at the judgment rate in effect at the
place of payment of the instrument and at the time interest first
accrues.”). In its initial post-trial ruling, the court asked the parties
to provide supplemental calculations of the amount of interest
owing, using the methods laid out in the ruling. After
supplemental briefing, the court later determined that the total
amount of unpaid interest owing on the Note was $565,314.97.
¶53 Finally, the court briefly considered the question of
attorney fees, which had been requested by the Estate, Robert, and
Taylor. The court determined that Taylor was “not entitled to any
attorneys’ fees he incurred,” but that Robert was entitled to both
(a) reimbursement of $187,595.71 from the Trust for fees incurred
in defending the administration of the Trust, and (b) additional
attorney fees from Taylor, pursuant to Utah’s bad faith statute, as
20200808-CA 23 2023 UT App 81In re Harding Trust
the “prevailing party” in the litigation. See id. § 78B-5-825. The
court specifically found that “Taylor’s defenses against the claims
raised” in Robert’s petition “were brought in bad faith,” and
asked Robert to submit an affidavit of fees and costs.
Joint and Several Liability of the Estate
¶54 After receiving the court’s lengthy written ruling, the
parties continued working on their supplemental briefing, not
only about the interest calculation but also about the joint-and-
several-liability issue raised by the court, sua sponte, in the
November 2019 hearing. After full briefing, the court heard
argument on that issue, and at the conclusion of the hearing took
the matter under advisement. A few weeks later, the court issued
a written ruling, making two significant determinations. First, the
court determined that the issue of Margene’s (and therefore, by
extension, the Estate’s) vicarious liability for Taylor’s actions—
despite not having been raised in the pleadings—had been tried
by the consent of the parties. Second, the court officially found the
Estate jointly and severally liable for Taylor’s actions. It
specifically did not employ a constructive trust theory to render
the Estate’s assets available for collection; instead, it noted that
“Taylor had power of attorney over his mother’s financial affairs
while exercising authority and powers as the trustee of” the Trust,
and concluded that Taylor had the “intent to unlawfully pilfer the
. . . Trust and preserve his mother’s estate for his own benefit and
the benefit of his siblings.” The court offered its view that it “need
not retreat to any equitable theory”—such as constructive trust—
where there was “an express contract covering the subject matter
of the litigation,” which contract was, in the court’s view, the
Trust document. The court later clarified that it had not rejected
Robert’s constructive trust theory, stating that the fact that it
“didn’t rule on that theory . . . doesn’t mean that [the court] didn’t
accept it,” and explaining that it had simply made a ruling “on an
alternative ground.” Indeed, the court went so far as to say that,
if a constructive trust theory was “what the parties believe is a
20200808-CA 24 2023 UT App 81In re Harding Trust
more proper finding,” the court may be willing to “find that I’m
ordering a constructive trust.”
Attorney Fees
¶55 After the trial, the court also made additional rulings
regarding attorney fees. The court had already determined, in its
lengthy written ruling, that Robert was entitled to recover
reasonable attorney fees from Taylor. Later, Robert submitted an
affidavit claiming $441,546.50 of attorney fees and $137,148.38 in
costs, which the court determined were reasonable.
¶56 The Estate also requested attorney fees from Robert on the
Loan/Note issue, invoking the Note’s attorney fees provision and
asserting that it had been the prevailing party on the question of
unpaid interest on the Loan. The Estate submitted detailed
declarations—from two different attorneys—setting forth the fees
incurred in that endeavor. In the motion accompanying the
declarations, the Estate was careful to point out that “the fee
declarations allocate between time spent on issues pertaining to
the claim for interest on the Note and time spent on other
matters,” directing the court’s attention to line items in the
declarations that had been excluded from the request. The Estate
asserted that the items remaining in its request were either
directly related to its claim for unpaid interest or, alternatively,
were inextricably intertwined with that claim such that they could
not meaningfully be separated.
¶57 However, the court denied the Estate’s fee request in its
entirety, concluding that the Estate had “fail[ed] to properly
allocate claimed fees for claims upon which it prevailed.” The
court acknowledged that the Estate had “made some effort to
adhere to the Court’s admonition” to properly allocate attorney
fees, but ultimately concluded that the Estate’s attempts in that
regard were inadequate because, in the court’s view, the Estate’s
fee request included fees for “legal work that sought to advance
20200808-CA 25 2023 UT App 81In re Harding Trust
theories and arguments which the Court did not adopt and upon
which the [E]state did not prevail.” 7
6F
The Form of the Judgment
¶58 During this same post-trial time period, the court also
addressed questions regarding the form of the judgment,
including who should be ordered to pay whom and how much.
Robert submitted a proposed form of judgment, listing himself as
the only judgment creditor, and indicating that Taylor owed him
some $5.8 million and that the Estate, through joint and several
liability and after an offset for unpaid interest, owed him some
$5.2 million. This proposed judgment drew initial objections from
the Estate and Taylor. In response to these initial objections, the
court clarified that Taylor was solely liable for the payment to
Robert’s ex-wife, but that the Estate was jointly and severally
liable for the marital home damages and fee payments. And it
ruled that Robert and Jill were each liable for “one half of the
unpaid interest,” but it did not add Jill as a judgment debtor,
reasoning that “[t]he amount of interest is to mitigate damages
owed by the Estate” and should be accounted for as “an offset
against amounts owed.”
¶59 Just days after the court’s ruling on the initial objections to
the form of the judgment, the Estate lodged another objection,
pointing out that—even though the court had previously held
that Robert was not limited to pursuing damages only for his one-
third share, had noted that Robert has standing to bring a claim
on behalf of his siblings, and had even stated in its written ruling
that the damages to the marital home were “owed to Jeana”—the
only judgment creditor listed in the judgment was “Robert G.
Harding,” apparently in his personal capacity. The Estate argued
7. Jill and Jeana also requested an award of attorney fees, but the
court denied those claims for various reasons. The propriety of
those rulings is not at issue in this appeal.
20200808-CA 26 2023 UT App 81In re Harding Trust
that the proper judgment creditors should be Robert and Jill “as
trustees” of the Trust, because the claims presented at trial were
largely “related to claims by the Trust, not claims by Robert G.
Harding personally.” Robert opposed this objection, asserting
that the language of the proposed judgment “is consistent with
the procedural history” of the case and with the court’s written
rulings. The court made no express ruling on this final objection
and instead went ahead and signed its judgment without further
comment, thus implicitly overruling the objection.
¶60 The signed judgment lists “Robert G. Harding” as the only
judgment creditor, and Taylor and the Estate as the only judgment
debtors. The document recites that Robert is “awarded Judgment
against” Taylor in the amount of $5,815,599.71, and that Robert is
“awarded Judgment against” the Estate in the amount of
$4,999,564.49. 8 The difference between the two figures—the
7F
amount owed by Taylor as compared to the amount owed by the
Estate—is $816,035.22, which is the sum of the offset for the
unpaid interest on the Note ($565,314.97) and the amount paid to
Robert’s ex-wife ($250,720.25).
¶61 Following entry of the judgment, the Estate filed a motion
to amend the court’s rulings, findings, and judgment. In this
motion, the Estate argued, among other things, 9 that the court had
8F
8. The judgment also recites that the court “will award attorneys’
fees to” Robert, but it makes no effort to quantify those fees. As
noted, the court did later quantify those fees in a ruling issued
about four months after it signed the judgment, awarding Robert
$441,546.50 in fees and $137,148.38 in costs. But the record
submitted to us does not include any amended or supplemental
judgment including those fees.
9. In addition to the issue it raised regarding the form of the
judgment, the Estate also raised objections relating to the court’s
ruling that it was jointly and severally liable for Taylor’s actions.
20200808-CA 27 2023 UT App 81In re Harding Trust
erred by accounting for the Estate’s recovery against Robert and
Jill for unpaid interest through a setoff mechanism, instead of
entering a separate judgment in favor of the Estate and against
Robert and Jill. The Estate pointed out that this was especially
problematic with regard to Jill, who was not a judgment creditor
and therefore had no positive judgment against which her interest
obligation could be set off. After full briefing and argument, the
court denied the Estate’s motion.
ISSUES AND STANDARDS OF REVIEW
¶62 Taylor and the Estate each separately appeal. In his appeal,
Taylor raises four issues for our review. First, he contends that the
court erred in denying his motion to amend to add additional
affirmative defenses. When reviewing a trial court’s decision on a
motion to amend, “we give considerable deference to the [trial]
court, as it is best positioned to evaluate the motion to amend in
the context of the scope and duration of the lawsuit” and we
“defer to the trial court’s determination.” Daniels v. Gamma West
Brachytherapy, LLC, 2009 UT 66, ¶ 60, 221 P.3d 256 (quotation
simplified). Thus, “[w]e overturn a trial court’s denial of a motion
to amend . . . only when we find an abuse of discretion.” Kelly v.
Hard Money Funding, Inc., 2004 UT App 44, ¶ 14, 87 P.3d 734.
¶63 Second, Taylor argues that the court erred in determining,
on summary judgment, that he had breached his fiduciary duties
by making distributions from marital share principal. Summary
judgment is appropriate “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.” Utah R. Civ. P. 56(a).
“We review the summary judgment decision de novo.” Salo v.
Tyler, 2018 UT 7, ¶ 19, 417 P.3d 581 (quotation simplified).
¶64 Third, Taylor takes issue with the court’s exclusion of his
three disclosed expert witnesses. There are “[t]wo different
20200808-CA 28 2023 UT App 81In re Harding Trust
standards of review [that] apply to claims regarding the
admissibility of evidence.” Smith v. Volkswagen SouthTowne, Inc.,
2022 UT 29, ¶ 41, 513 P.3d 729. “The first standard of review,
correctness, applies to the legal questions underlying the
admissibility of evidence.” Id. (quotation simplified). “The second
standard of review, abuse of discretion, applies to the [trial]
court’s decision to admit or exclude evidence and to
determinations regarding the admissibility of expert testimony.”
Id. (quotation simplified).
¶65 Fourth, Taylor challenges the court’s ultimate
determination of damages. “A trial court’s findings of fact will not
be set aside unless clearly erroneous.” Traco Steel Erectors, Inc. v.
Comtrol, Inc., 2009 UT 81, ¶ 17, 222 P.3d 1164 (quotation
simplified). “The award of damages is a factual determination
that we review for clear error.” Saleh v. Farmers Ins. Exch., 2006 UT
20, ¶ 29, 133 P.3d 428.
¶66 In connection with its appeal, the Estate raises four issues
for our consideration. First, the Estate challenges the court’s
determination to hold it jointly and severally liable for Taylor’s
actions, and its challenge takes two forms. As an initial matter, the
Estate takes issue with the court’s conclusion that the vicarious
liability issues—which were not present in Robert’s pleadings—
were tried by the consent of the parties, and that Robert’s
pleadings could therefore be amended post-trial pursuant to rule
15(b) of the Utah Rules of Civil Procedure. “We review the [trial]
court’s application of rule 15(b) for correctness. However, because
the trial court’s determination of whether the issues were tried
with all parties’ implied consent is highly fact intensive, we grant
the trial court a fairly broad measure of discretion in making that
determination under a given set of facts.” Hill v. Estate of Allred,
2009 UT 28, ¶ 44, 216 P.3d 929 (quotation simplified). And more
substantively, the Estate challenges the merits of the court’s
conclusion that it is vicariously liable for Taylor’s actions. In some
contexts, a vicarious liability ruling involves issues of fact. See, e.g.,
20200808-CA 29 2023 UT App 81In re Harding Trust
Newman v. White Water Whirlpool, 2008 UT 79, ¶ 10, 197 P.3d 654(stating that “[w]hether an employee is in the course and scope of
his employment” for purposes of vicarious liability “presents a
question of fact for the fact-finder”). In other contexts, though,
such a ruling is inherently legal. See, e.g., Wardley Better Homes
& Gardens v. Cannon, 2002 UT 99, ¶ 19, 61 P.3d 1009 (stating that
“[w]hether a principal is vicariously liable for an agent’s acts”
presents a “legal question[]”). While—as discussed below—the
precise legal basis for the trial court’s ruling is somewhat unclear,
Robert defends the ruling by pointing to principles of agency law.
We agree that, under the circumstances, the trial court’s vicarious
liability ruling was a legal one, not a factual one, and we therefore
review it for correctness.
¶67 Second, the Estate argues that the court erred in
determining the rate for the unpaid interest due on the Note. Both
sides agree that, at least under the circumstances of this case, we
should review this issue for correctness. See USA Power, LLC v.
PacifiCorp, 2016 UT 20, ¶ 32, 372 P.3d 629 (stating that ascertaining
“the appropriate interest rate” is “a question of law that we
review for correctness”).
¶68 Third, the Estate raises several issues with the form of the
court’s judgment. In particular, it wonders who the proper
judgment creditors are, and contends that the court erred in
setting off the Estate’s award of interest against the amounts the
court determined it owed to Robert and Jill for vicarious liability.
Challenges to offset determinations often involve mixed
questions of fact and law and are “reviewed under a clearly
erroneous standard for questions of fact and a correctness
standard for questions of law.” Hale v. Big H Constr., Inc., 2012 UT
App 283, ¶ 11, 288 P.3d 1046 (quotation simplified), cert. denied,
298 P.3d 69 (Utah 2013). The issue we address here regarding
offset—namely, whether offset was appropriate when one of the
parties did not receive a judgment—presents a legal question
reviewed for correctness. See Fisher v. Fisher, 2009 UT App 305, ¶ 7,
20200808-CA 30 2023 UT App 81In re Harding Trust
221 P.3d 845 (noting that whether “an offset is allowed under [a]
cause of action” is a question “of law, which we review for
correctness”), cert. denied, 230 P.3d 127 (Utah 2010). And in
addition, the Estate challenges the court’s award of damages for
repairs to the marital home. “The award of damages is a factual
determination that we review for clear error.” Saleh, 2006 UT 20,
¶ 29. However, “[w]e review the court’s legal conclusions for
correction of error.” Hale, 2012 UT App 283, ¶ 13.
¶69 Finally, the Estate takes issue with the court’s rejection of
its claim for attorney fees incurred in furtherance of its successful
claim for unpaid interest on the Note. “The award of attorney fees
is a matter of law, which we review for correctness. However, a
trial court has broad discretion in determining what constitutes a
reasonable fee, and we will consider that determination against
an abuse-of-discretion standard.” Jensen v. Sawyers, 2005 UT 81,
¶ 127, 130 P.3d 325 (quotation simplified).
ANALYSIS
I. Taylor’s Appeal
¶70 As noted, Taylor asks us to consider four issues in
connection with his appeal. First, he challenges the court’s denial
of his motion to amend to add additional affirmative defenses.
Second, he takes issue with the trial court’s ruling, made on
summary judgment, that Taylor had breached his fiduciary duties
by making unlawful distributions from the Trust’s marital share
principal. Third, he challenges the trial court’s decision to exclude
his expert witnesses. Finally, he raises certain challenges to the
court’s damages determinations. We address each of Taylor’s
arguments in turn.
20200808-CA 31 2023 UT App 81In re Harding Trust
A. Taylor’s Motion to Amend
¶71 First, Taylor asks us to examine the court’s ruling denying
his motion to amend his responsive pleading to add several
additional affirmative defenses, including a more specific statute
of limitations defense and a defense that he “had a good faith
basis for his actions.” The court denied Taylor’s request on the
basis that Taylor had engaged in “unreasonable delay” and had
“failed to provide adequate justification [as to] why he did not
[seek to] amend his pleading earlier.” We discern no abuse of
discretion in the trial court’s decision.
¶72 In deciding a motion to amend, courts are instructed to
consider several factors, including whether the movant “was
aware of the facts underlying the proposed amendment long
before its filing, the timeliness of the motion, the justification for
the delay, and any resulting prejudice to the responding party.”
Jones v. Salt Lake City Corp., 2003 UT App 355, ¶ 16, 78 P.3d 988(quotation simplified) (affirming the denial of a motion to amend
where it was filed about a year after the deadline for amending
pleadings and where the movant provided no justification for the
delay), cert. denied, 90 P.3d 1041 (Utah 2004). In this case, the court
denied Taylor’s motion in an oral ruling from the bench, and the
record submitted to us does not include a transcript of that oral
ruling. But in a subsequent written order memorializing its ruling,
the court focused on two of these factors: timeliness and
justification. The court was of the view that Taylor had waited too
long to seek amendment of his responsive pleading, despite
apparent awareness of the relevant issues, and that his delay was
not justified by any good reason. The court rejected as “faulty”
Taylor’s excuse that he had been under the impression that his
original answer—which incorporated by reference the statute of
limitations defense pleaded by Robert’s ex-wife—included “all
statute of limitations” defenses. The court’s written ruling made
no specific mention of Taylor’s desired “good faith” defense.
20200808-CA 32 2023 UT App 81In re Harding Trust
¶73 In his appellate brief, Taylor does not engage with the trial
court’s reasoning, and provides no specific response to the court’s
conclusion that his motion was untimely and his delay was
unjustified. Instead, he makes two arguments in support of his
appellate challenge. First, he asserts that his unpleaded statute of
limitations defense was meritorious. But this is beside the point
here; if the trial court was within its discretion to deny Taylor’s
motion to amend on delay and justification grounds, then the
merits of Taylor’s unpleaded defenses are not directly relevant.
¶74 Second, Taylor suggests that, because this case was a
probate action initiated by a “petition” rather than a “complaint,”
the rules of civil procedure regarding timeliness of pleadings do
not apply. But this argument is unpreserved; Taylor did not make
it at the trial court level—at least not in his written filings; as
noted, the record includes no transcript of the hearing—and thus
did not give the trial court an opportunity to rule on it. See Gowe
v. Intermountain Healthcare, Inc., 2015 UT App 105, ¶ 7, 356 P.3d
683 (stating that, “to preserve an argument for appellate review,
the appellant must first present the argument to the [trial] court
in such a way that the court has an opportunity to rule on it,” and
observing that “we generally do not address unpreserved
arguments raised for the first time on appeal” (quotation
simplified)), cert. denied, 364 P.3d 48 (Utah 2015). Therefore, we
decline to consider this argument for the first time on appeal.
¶75 Under these circumstances—where Taylor does not
provide us with a transcript of the trial court’s oral ruling, does
not directly engage with the court’s reasoning, and offers an
argument that is apparently unpreserved—Taylor has not carried
his burden, on appeal, of demonstrating that the court abused its
discretion by denying his motion to amend his responsive
pleading to add additional affirmative defenses. We therefore
affirm the court’s denial of that motion.
20200808-CA 33 2023 UT App 81In re Harding Trust
B. The Summary Judgment Ruling
¶76 Next, Taylor challenges the trial court’s determination,
made on summary judgment, that he made unlawful
distributions from the Trust’s marital share principal and thereby
breached his fiduciary duties. In particular, he asserts that this
ruling was inappropriate because genuine issues of material fact
remained to be decided in connection with these issues. But
Taylor has not borne his burden, here on appeal, of demonstrating
error in the court’s summary judgment ruling.
¶77 As a threshold matter, it is important to recognize that the
ruling in question was brief and quite narrow. In that ruling, the
court noted that, under the terms of the Trust, Taylor was not
allowed to distribute principal from the marital share, and it
noted that Taylor had admitted to making distributions of
principal from the marital share. The court therefore determined,
as a matter of law and under the plain terms of the Trust
documents, that these distributions were “unlawful.” It reserved
all other issues for trial, including “the amount of damages that
resulted from” any such unlawful distributions.
¶78 Taylor does not challenge the court’s determination that,
under the terms of the Trust documents, he was forbidden from
distributing principal out of the marital share. And he does not
take issue with the court’s observation that, in discovery, Taylor
admitted that he had indeed made distributions of principal out
of, among other sources, the IRAs that Accountant had placed in
the marital share. Thus, his challenge to the court’s summary
judgment ruling is limited: he takes issue only with the court’s
conclusion that those admitted distributions were unlawful as a
matter of law. In this regard, Taylor makes three arguments,
which we consider in turn.
20200808-CA 34 2023 UT App 81In re Harding Trust
1
¶79 First, Taylor asserts that his actions were not unlawful—at
least not as a matter of law—because he had merely been
following advice given to him by professionals (namely
accountants and attorneys) retained to advise him in his role as
trustee, and that questions of fact therefore remained regarding
the reasonableness of his conduct. But on the record before us, this
argument cannot carry the day for Taylor.
¶80 Under Utah law, a trustee who violates a duty owed to a
beneficiary has breached fiduciary duties. See Utah Code § 75-7-
1001 (“A violation by a trustee of a duty the trustee owes to a
beneficiary is a breach of trust.”); see also id. § 75-7-801 (stating that
trustees must “administer the trust expeditiously and in good
faith, in accordance with its terms and purposes”). And it does not
matter that the trustee’s actions were merely negligent (rather
than knowing or intentional). See Restatement (Third) of Trusts
§ 93 cmt. b (Am. L. Inst. 2012) (“A breach of trust occurs if the
trustee, intentionally or negligently, fails to do what the fiduciary
duties of the particular trusteeship require or does what those
duties forbid . . . . [A] trustee may commit a breach of trust by
conduct (action or inaction) that results from a mistake . . . ,
typically [one] regarding the nature or extent of a trustee’s duties
or powers.”).
¶81 In this case, the plain language of the Trust documents
clearly forbade Taylor from making any distributions from the
principal assets of the Trust’s marital share. He therefore had a
clear obligation not to authorize distributions of principal from
the marital share. He violated that obligation by repeatedly
authorizing such distributions, and this is true even if one
assumes, for purposes of the argument, that Taylor made the
distributions negligently rather than intentionally or knowingly.
Unless otherwise excused, that action constitutes a breach of the
20200808-CA 35 2023 UT App 81In re Harding Trust
fiduciary duties that Taylor, in his capacity as trustee, owed the
beneficiaries of the Trust.
¶82 However, under the Restatement’s approach, in certain
circumstances, a court has the authority, where equity demands
it, to excuse a trustee from having to pay a liability resulting from
a breach of duty. See id. § 95 cmt. d (stating that, where a court
concludes that “it would be unfair or unduly harsh to require the
trustee to pay . . . the liability that would normally result from a
breach of trust, the court has equitable authority to excuse the
trustee . . . from having to pay that liability”); see also Restatement
(Second) of Trusts § 205 cmt. g (Am. L. Inst. 1959) (“In the absence
of a statute it would seem that a court of equity may have power
to excuse the trustee in whole or in part from liability where he
has acted honestly and reasonably and ought fairly to be
excused.”). For instance, where case law upon which a trustee
relied is later overruled, courts might conclude that a trustee
should be equitably relieved from the consequences of a breach of
duty. See Restatement (Third) of Trusts § 95 cmt. d (Am. L. Inst.
2012). And as relevant here, courts may reach a similar conclusion
where “a trustee has selected an adviser prudently and in good
faith, has provided the adviser with relevant information, and has
relied on plausible advice on a matter within the adviser’s
competence.” See id. § 93 cmt. c.
¶83 In the trial court, Taylor opposed Robert’s summary
judgment motion by arguing, among other things, that his actions
were reasonable because he relied on professional advice; in so
doing, however, Taylor did not cite the Restatement or ask the
trial court to apply its approach. Robert replied by asserting that
“advice of counsel” was an affirmative defense that Taylor had
waived by not pleading it and by failing to obtain leave to add
that defense in an amended pleading. We do not know if Taylor’s
advice-of-counsel defense (or Robert’s waiver argument made in
response to it) was discussed during the oral argument on
Robert’s summary judgment motion, because the record
20200808-CA 36 2023 UT App 81In re Harding Trust
submitted to us does not include a transcript of that hearing. And
the court’s rather brief written order memorializing its summary
judgment ruling makes no mention of the issue.
¶84 There are several plausible ways the trial court could have
handled Taylor’s advice-of-counsel defense at the summary
judgment stage. First, the court could have determined that Utah
law does not allow an advice-of-counsel defense under the
circumstances presented here. We are unaware of any Utah
authority adopting the Restatement’s approach, so it is unclear
whether that approach is consonant with Utah law; certainly,
Taylor makes no effort to so persuade us in his appellate brief. 10 9F
Second, the court may have adopted Robert’s argument that
Taylor waived this defense by failing to plead it in his answer and
by failing to persuade the court to allow amendment of that
answer. As already noted, several months before the summary
judgment hearing the trial court did deny Taylor leave to amend
his responsive pleading to add a “good faith” defense, ruling that
10. At one point in his appellate brief, Taylor mentions in passing
that the trial court “made no finding under Utah Code § 75-7-
814(2) regarding whether or not a lay trustee may rely on
professional counsel and accounting advice, and whether such
reliance demonstrates reasonable care.” That statute provides that
trustees may delegate “investment and management functions”
to a professional as long as the trustee engages in certain
oversight, and if trustees do so, they are “not liable to the
beneficiaries or to the trust for the decisions or actions of the agent
to whom the function was delegated.” Utah Code § 75-7-814(2).
But Taylor did not invoke this statute in opposing Robert’s
summary judgment motion, and any argument that the trial court
erred by not considering the statute is therefore unpreserved. And
in any event, Taylor does not argue that he delegated any specific
task or function to any professional pursuant to this statute.
20200808-CA 37 2023 UT App 81In re Harding Trust
any such amendment was too late and unjustified. On appeal,
Taylor does not refute Robert’s assertion that he waived the
defense, and he makes no effort to show that advice of counsel is
not the sort of affirmative defense that must, upon penalty of
waiver, be pleaded in an answer. 11 Third, the court may have
10F
determined that resolution of Taylor’s advice-of-counsel defense
was not necessary at the summary judgment stage. In fact, the
written summary judgment ruling is not necessarily at odds with
that defense: even if the distributions from the marital share are
considered unlawful, the court could, during the damages phase
of the proceedings, potentially equitably relieve Taylor from the
consequences of those unlawful distributions. And here on
appeal, Taylor makes no argument that he was prevented, at trial,
from presenting evidence relating to his advice-of-counsel
defense. Fourth, the court could have determined, at the summary
judgment hearing, that the undisputed evidence regarding
Taylor’s advice-of-counsel defense was insufficient to present a
genuine dispute of material fact that would prevent summary
judgment. Or fifth, the court could have completely ignored the
issue, and simply made no ruling on it at all.
11. Whether advice of counsel is the sort of affirmative defense
that is considered waived if not pleaded in a responsive pleading
is an interesting question. We are aware of Utah law stating that,
at least in certain contexts, “reasonable reliance on the advice of
counsel is an affirmative defense.” See Hodges v. Gibson Products
Co., 811 P.2d 151, 159–60 (Utah 1991). But other courts have held
that, at least in some circumstances, advice of counsel does not
need to be pleaded in an answer. See, e.g., LG Philips LCD Co. v.
Tatung Co., 243 F.R.D. 133, 139 (D. Del. 2007). Because the parties
have not briefed this issue, and because it is only tangentially
related to the question at hand, we offer no opinion on whether
advice of counsel is the sort of affirmative defense that is waived
if not included in a responsive pleading.
20200808-CA 38 2023 UT App 81In re Harding Trust
¶85 We do not know what the court did with Taylor’s advice-
of-counsel argument at the summary judgment phase, because its
written ruling is silent on the matter and its oral ruling is not
included in the appellate record. It is certainly not obvious, from
the record before us, that the trial court erred in the way it handled
Taylor’s asserted advice-of-counsel defense in connection with
Robert’s summary judgment motion. It is an appellant’s
responsibility “to include in the record a transcript of all evidence
relevant to a finding or conclusion that is being challenged on
appeal.” Gines v. Edwards, 2017 UT App 47, ¶ 21, 397 P.3d 612(quotation simplified), cert. denied, 398 P.3d 52 (Utah 2017). “When
an appellant fails to provide an adequate record on appeal, we
presume the regularity of the proceedings below,” and “when
crucial matters are not included in the record, the missing
portions are presumed to support the action of the trial court.”
State v. Pritchett, 2003 UT 24, ¶ 13, 69 P.3d 1278 (quotation
simplified); see also Bank of Am. v. Adamson, 2017 UT 2, ¶ 11, 391
P.3d 196 (stating that an appellant’s brief must “contain the
contentions and reasons of the appellant with respect to the issues
presented . . . with citations to the authorities, statutes, and parts
of the record relied on” (quotation simplified)).
¶86 In situations like this one, where “crucial matters are not
included in the record, the missing portions are presumed to
support the action of the trial court.” Pritchett, 2003 UT 24, ¶ 13
(quotation simplified). While it is perhaps not always necessary
for an appellant challenging an adverse summary judgment
ruling to include in the appellate record a transcript of the oral
argument on the summary judgment motion, cf. Gines, 2017 UT
App 47, ¶ 21 (noting that “an appellant is not required to provide
the transcript from every proceeding that occurred in the case”),
in our view this is necessary in cases where the court issued an
oral ruling at the conclusion of the hearing and where the court’s
eventual written order is silent with regard to the matter being
challenged. In such cases, a transcript of the hearing is necessary
20200808-CA 39 2023 UT App 81In re Harding Trust
for us to effectively review the challenged issue. Without the
transcript, we do not know what evidence or argument the court
relied on in rendering any decision. Indeed, in this case we do not
know if the court even made a decision on the point Taylor
challenges. Under these circumstances, Taylor “has not provided
this court with the tools necessary to determine whether the [trial]
court” erred, and therefore his “claim of error,” in this regard, “is
merely an unsupported, unilateral allegation which we cannot
resolve.” R4 Constructors LLC v. InBalance Yoga Corp., 2020 UT App
169, ¶ 12, 480 P.3d 1075 (holding that the appellant did not show
an abuse of discretion where he failed to include a necessary
transcript in the appellate record). Accordingly, Taylor has not
carried his burden of persuasion on appeal, and the trial court’s
summary judgment ruling is not now assailable on the basis that
questions of fact remained to be decided regarding whether
Taylor reasonably followed professional advice.
2
¶87 Second, Taylor asserts that the IRAs from which many of
the allegedly unlawful distributions of principal were made were
not part of the Trust at all, and therefore the distributions could
not have been unlawful. But the trial court did not err in
determining that no genuine issue of material fact existed on this
point. As noted above, the court issued a separate ruling, signed
on the same day and arising out of the same summary judgment
hearing, determining that Robert had conclusively demonstrated
that “the IRAs were properly transferred to and owned by the
[Trust] after Dean’s death.” And in the summary judgment ruling
at issue here, signed by the court just minutes later, the court
simply noted that the marital share of the Trust “included” the
IRAs. Taylor asserts that there existed questions of fact about the
ownership of the IRAs, because the parties were never able to
locate a “signed beneficiary designation” executed prior to Dean’s
death. But Robert submitted quite a bit of evidence, including
account statements from the IRAs dated prior to Dean’s death,
20200808-CA 40 2023 UT App 81In re Harding Trust
indicating that the IRAs were in fact part of the Trust. 12 And
11F
Accountant—the first successor trustee of the Trust—certainly
saw it that way. Taylor did not meaningfully rebut this evidence;
the mere absence of a signed beneficiary designation is not, under
these circumstances, enough to create a genuine issue of material
fact regarding ownership of the IRAs.
3
¶88 Finally, Taylor asserts that his distributions of principal
from the marital share, including distributions from the IRAs, can
be considered lawful if they are offset against distributions of
principal he could have hypothetically lawfully made from the
family share. As noted above, Taylor had conceptual authority to
make distributions of principal from the family share for
Margene’s “support and maintenance” if the Trust income and
Margene’s other assets were not sufficient to address her needs.
In other words, Taylor asserts that the beneficiaries would not be
entitled to any damages resulting from his otherwise unlawful
distributions of marital share principal if Taylor can show that
those distributions could, in his discretion, have been made from
the family share instead. But even if this is true, this argument
serves only to reduce the damages sustained by the beneficiaries
as the result of Taylor’s breaches of duty; this argument does not
12. Taylor argues that the court should not have considered much
of this evidence because it was attached to Robert’s reply brief
submitted in support of his summary judgment motion. He
argues that Robert’s “obligation was to present all claimed
relevant facts with his initial motion” and that “[n]ew materials
cannot be raised in a reply memorandum.” But Robert did not
raise any new issue in his reply; he merely responded to Taylor’s
claims—included in his memorandum opposing Robert’s
motion—regarding IRA ownership. The court did not err in
considering the materials Robert submitted in connection with his
reply brief in support of his motion.
20200808-CA 41 2023 UT App 81In re Harding Trust
somehow transform Taylor’s unlawful distributions into lawful
ones. As noted, the court reserved for trial, among other things,
all questions regarding “[t]he total amount of damages that
resulted from Taylor’s unlawful distributions of principal from
the” marital share. And in addition, there is no evidence that
Taylor actually engaged in the analysis required prior to making
lawful distributions from the family share principal—assessing
whether Margene’s reasonable needs could be met from her own
assets and the income from the Trust.
¶89 In the end, we perceive no error, on this record, in the trial
court’s narrow ruling, made on summary judgment, that Taylor
had made unlawful distributions of principal from the Trust’s
marital share, and that he had thereby breached the fiduciary
duties he owed to the beneficiaries.
C. Taylor’s Expert Witnesses
¶90 Taylor next challenges the court’s orders prohibiting his
disclosed expert witnesses from testifying in his case-in-chief at
trial. The court excluded two of these experts—Taylor’s financial
experts—because Taylor failed to serve the required report from
the experts. 13 And the court excluded the third expert—Taylor’s
12F
legal expert—for reasons we cannot, on this record, ascertain.
Under the circumstances presented here, Taylor has not
persuaded us that the court’s orders regarding his expert
witnesses are subject to reversal.
¶91 The court had good reason to exclude Taylor’s two
financial experts. Following Taylor’s disclosure of these two
experts, Robert opted to require the experts to produce a written
report. See Utah R. Civ. P. 26(a)(4)(C)(i), (ii) (stating that “the party
opposing the expert may serve notice electing either a deposition
13. The court did, however, allow one of Taylor’s financial experts
to offer rebuttal testimony at trial.
20200808-CA 42 2023 UT App 81In re Harding Trust
of the expert . . . or a written report” from the expert). Taylor failed
to timely provide those reports. The court’s order excluding those
experts on that basis is therefore sound. See id. R. 26(d)(4) (“If a
party fails to disclose or to supplement timely a disclosure or
response to discovery, that party may not use the undisclosed
witness, document, or material at any hearing or trial unless the
failure is harmless or the party shows good cause for the failure.”);
see also Clifford P.D. Redekop Family LLC v. Utah County Real Estate
LLC, 2016 UT App 121, ¶¶ 15–16, 378 P.3d 109 (upholding a trial
court’s exclusion of an expert witness when the party did not
timely provide a written report by the deadline or provide “good
cause” for failing to do so). And on appeal, Taylor does not
attempt to argue that his failure to provide reports was harmless
or spurred by good cause. Instead, Taylor merely informs us of
what the witnesses would have testified about and asserts that the
witnesses’ testimony “would have been of great benefit to the
court.” This is insufficient to establish that the court abused its
discretion. See R.O.A. Gen., Inc. v. Chung Ji Dai, 2014 UT App 124,
¶ 11, 327 P.3d 1233 (“We have held that the sanction of exclusion
is automatic and mandatory unless the sanctioned party can show
that the violation of rule 26 . . . was either justified or harmless.”
(quotation simplified)), cert. denied, 337 P.3d 295 (Utah 2014).
¶92 Taylor’s third witness, the legal expert, was dismissed after
a hearing. In his motion asking the court to exclude Taylor’s legal
expert, Robert argued that the court “should not allow a local
attorney to tell [it] how to interpret” the Trust documents. The
court granted this motion in an oral ruling made at the conclusion
of the hearing; the court’s minute entry contains very little
information about the basis for the ruling. A few weeks after the
hearing, the court signed a written order, prepared by counsel,
that was intended to memorialize the oral ruling; that order stated
simply that, “[a]fter argument by counsel and review of the
briefings filed by the parties, the Court grants [Robert’s] Motion
in Limine excluding all legal expert testimony at trial.” And as
20200808-CA 43 2023 UT App 81In re Harding Trust
noted, the record submitted to us does not contain a transcript of
the hearing at which the court rendered its oral ruling, nor does it
contain any additional elucidation of the court’s reasoning in
granting Robert’s motion to exclude Taylor’s legal expert.
¶93 Under circumstances like these, an appellant fails to carry
its burden of persuasion on appeal. As already noted, it is an
appellant’s responsibility “to include in the record a transcript of
all evidence relevant to a finding or conclusion that is being
challenged on appeal.” Gines, 2017 UT App 47, ¶ 21 (quotation
simplified) (affirming a trial court’s decision on a motion in limine
because the appellant did not provide a transcript of the hearing);
see also Pritchett, 2003 UT 24, ¶ 13 (stating that, in the absence of
an adequate record, “we presume the regularity of the
proceedings below,” and that “when crucial matters are not
included in the record, the missing portions are presumed to
support the action of the trial court” (quotation simplified)).
¶94 In this non-legal-malpractice case, we can easily envision
good reason for the court to have excluded Taylor’s proffered
legal expert. See Steffensen v. Smith’s Mgmt. Corp., 862 P.2d 1342,
1347 (Utah 1993) (“Even though experts can testify as to ultimate
issues, their testimony must still assist the trier of fact under rule
702. Opinion testimony is not helpful to the fact finder when it is
couched as a legal conclusion.” (quotation simplified)). And
where, as here, material gaps in the appellate record exist, we
must presume the regularity of the proceedings, and presume that
the court had good reason to take the action it took. Under these
circumstances, Taylor has simply not persuaded us that the court
abused its discretion in excluding his legal expert witness.
¶95 Accordingly, we reject Taylor’s assertions that the trial
court abused its discretion in ordering the exclusion of all three of
Taylor’s disclosed expert witnesses.
20200808-CA 44 2023 UT App 81In re Harding Trust
D. The Court’s Damages Award
¶96 Finally, Taylor raises two challenges to the court’s damages
determinations. He first makes a general challenge to the court’s
damages award, asserting that the court should not have used the
damages calculation offered by Robert’s damages expert because
that expert “made too many mistakes and relied on assumptions
that are too speculative.” He next asserts that Robert did not suffer
$250,000 in damages from the distribution to Robert’s ex-wife
because Robert “received full credit against the judgment for the
money distributed.” We reject Taylor’s first challenge, but find
merit, at least to some extent, in the second.
¶97 Taylor’s general attack on Robert’s damages expert—and,
by extension, on the court’s damages computation—is not well-
taken. As examples of the “faulty assumptions” Robert’s expert
made, Taylor points to the expert’s assumptions—held at least
prior to trial, if not afterward—that three specific transactions (or
sets of transactions) constituted “distributions” of Trust assets: (1)
a $200,000 transfer between Trust accounts, (2) several five-figure
checks of unknown purpose, and (3) a separate sale of an
investment in the Trust portfolio. But as Robert points out, the
expert herself—after receiving additional information at trial—
backed away from the first assumption, and ended up not
including the $200,000 transfer in her ultimate recommendation
to the court. And most importantly, it does not appear that the
trial court actually included any of the identified transactions in
its damages award—at least, Robert asserts that it didn’t, and
Taylor does not take issue with that assertion. So, to the extent
that these identified transactions constitute “mistakes” on the part
of Robert’s expert, the court appears to have accounted for those
mistakes in its damages award.
¶98 As noted above, we review the court’s damages
calculations for clear error. See Saleh v. Farmers Ins. Exch., 2006 UT
20, ¶ 29, 133 P.3d 428 (“The award of damages is a factual
20200808-CA 45 2023 UT App 81In re Harding Trust
determination that we review for clear error.”). And we perceive
no clear error in the court’s general adoption—with apparent
adjustments—of Robert’s expert’s damages calculation. In its
post-trial ruling, the court described Robert’s expert as “an
experienced professional in the field of accounting and a licensed
financial analyst,” and found that her methodologies “provide[d]
a reasonably certain calculation of damages” that “account[ed] for
both excess distributions and losses incurred due to [the] present
value of money.” And as noted, the court in making its award
apparently made adjustments, based on the evidence presented,
to the expert’s computations. Under these circumstances, Taylor
simply hasn’t carried his burden of demonstrating any clear error
in the court’s general adoption of Robert’s expert’s damages
methodologies, as adjusted. 14 See id.13F
¶99 However, we do see clear error in the court’s award of
$250,000 in damages to Robert for Taylor’s payment of Trust
assets to Robert’s ex-wife. The court found that this payment was
made in violation of the Trust’s spendthrift provision and was
therefore unlawful. But the court also found that the payment
“did extinguish [Robert]’s debt to [his ex-wife],” which debt was
a non-zero amount. The court, in a previous order, correctly noted
that Robert’s damages on this point should be limited to “any
interest losses that he . . . may have been entitled to” and money
he would have saved if he could prove that his ex-wife would
have accepted a lower amount. And of course, his damages
calculation would need to account for any excess amounts paid to
his ex-wife from other sources, such as his allegation that she
14. In this same vein, Taylor makes a cursory and unsupported
allegation in his brief that Robert cannot recover for “hypothetical
growth in value” of Trust assets because his expert “[r]elied on
[s]peculative [a]ssumptions.” But he does not suggest what these
speculative assumptions were. Thus, this allegation, like some of
his other damages assertions, is inadequately briefed.
20200808-CA 46 2023 UT App 81In re Harding Trust
received an extra $35,000 from the sale of one of his properties; it
is notable that Robert, in his proposed post-trial findings, asked
the court to award him only $35,000 plus interest on this point.
But the court did not engage in a comprehensive analysis here,
nor did it make specific findings on these recoverable damages;
instead, it simply awarded Robert the entire $250,000 amount.
¶100 The court erred by awarding Robert damages for the full
$250,000, at least without making specific findings as to why that
amount was appropriate. As the court itself was aware, the
$250,000 distribution to Robert’s ex-wife had at least some value
to Robert—the extinguishing of his debt to his ex-wife—that
should have been valued and offset against the $250,000 amount.
And the court should have explained why it chose to award
Robert the full $250,000 instead of the $35,000 (plus interest) that
he asked for in his proposed findings.
¶101 Therefore, while we reject Taylor’s general complaint
about the court’s adoption of Robert’s expert’s methodologies, we
find merit in Taylor’s specific complaint about the court’s
calculation of Robert’s damages related to the payment to
Robert’s ex-wife. We therefore vacate—and remand for
reassessment—that specific portion of the damages award. 15 14F
15. Taylor does not appeal the question of whether he—as
opposed to Margene or the Estate—should be liable for the repairs
to the marital home. Per the Trust, it was Margene—and not the
trustee—who was responsible for “perform[ing] such repairs and
maintenance as may be required to maintain the property in the
condition it was maintained prior to [Dean’s] death.” Because this
issue was not appealed, we do not address its merits.
20200808-CA 47 2023 UT App 81In re Harding Trust
¶102 In sum, then, we reject all of Taylor’s claims on appeal,
except for the second of his two damages-related assertions. 16 15F
II. The Estate’s Appeal
¶103 We now turn to the Estate’s appeal. As noted, the Estate
asks us to consider four issues. First, the Estate asks us to reverse
the court’s determination to hold it vicariously liable for the
actions Taylor took as trustee. Second, the Estate challenges the
court’s conclusion regarding the appropriate rate to be applied in
calculating the interest that Robert and Jill owe on the Note. Third,
the Estate raises various issues with the form of the judgment.
And finally, the Estate asks us to review the court’s rejection of its
claim for attorney fees incurred in furtherance of its successful
claim for interest on the Note. We address each of these
arguments in turn.
A. Vicarious Liability
¶104 The Estate’s main challenge on appeal—the one on which
it spends the bulk of its energies—concerns the court’s ruling that
the Estate should be held vicariously liable for the unlawful
actions Taylor took as trustee. The Estate criticizes this ruling on
two specific grounds, one procedural and one substantive. The
procedural challenge has to do with whether the issue was
16. We are also aware of Taylor’s motion, filed with this court on
June 30, 2023, asking us, “pending [our] imminent ruling,” to stay
enforcement of the judgment. However, now that we have
decided the case, the motion to stay has been rendered moot. See
M.N.V. Holdings LC v. 200 South LLC, 2021 UT App 76, ¶ 17 n.10,
494 P.3d 402 (determining that a motion to stay had been mooted
by the issuance of the opinion); Koyle v. Davis, 2011 UT App 196,
¶ 7, 261 P.3d 100 (per curiam) (recognizing that our resolution of
a case on appeal “renders the motion to stay moot”), cert. denied,
263 P.3d 390 (Utah 2011).
20200808-CA 48 2023 UT App 81In re Harding Trust
properly before the court for decision in the first place. And the
substantive challenge has to do with whether the court’s decision
was correct. We find merit in both of the Estate’s challenges to the
court’s vicarious liability ruling.
1
¶105 The Estate begins its argument by pointing out, correctly,
that Robert did not plead or seek vicarious liability in his petition
or in any other place in his voluminous pretrial filings in this case.
In his petition, Robert sought specific relief against the Estate for
damages related to the marital home. Aside from that particular
request, the petition sought only one other thing from the Estate:
“a return of principal wrongfully distributed from the Trust.” In
the petition, Robert never asked the court to hold Margene or the
Estate vicariously liable for Taylor’s conduct.
¶106 Not only did Robert fail to plead a claim for vicarious
liability, but as the litigation proceeded, he implicitly disavowed
making any such claim. Prior to trial, Robert filed a motion to
bifurcate, asking the court to separate the trial of the Estate’s
claims—most notably, for interest on the Loan—from the trial of
Robert’s claims relating to Taylor’s alleged breaches of fiduciary
duty. In this motion, Robert suggested that the claims stated in his
petition against the Estate—chiefly, regarding the marital home—
had already been “likely resolved” in a recent ruling. In
particular, Robert asserted that “the only issue remaining” with
regard to his petition “is the amount of damages to be awarded
against Taylor,” and he argued that the Estate “should not be
involved in” the trial of his claims against Taylor. Had Robert
been seeking a vicarious liability ruling against the Estate, he
would never have taken that position.
¶107 To its credit, the trial court recognized these realities and,
in announcing its ruling that the Estate should be held vicariously
liable, did not attempt to assert that the issue had ever been raised
20200808-CA 49 2023 UT App 81In re Harding Trust
prior to trial. Instead, the court held that the issue of the Estate’s
vicarious liability had been tried by consent during the multi-day
bench trial. See Utah R. Civ. P. 15(b)(1) (“When an issue not raised
in the pleadings is tried by the parties’ express or implied consent,
it must be treated in all respects as if raised in the pleadings.”).
Here on appeal, the Estate asserts that the trial court incorrectly
concluded that this issue was tried by consent. We agree.
¶108 Under rule 15(b) of the Utah Rules of Civil Procedure,
“implied consent to try an [unpleaded] issue may be found where
one party raises an issue material to the other party’s case or
where evidence is introduced without objection, where it appears
that the parties understood the evidence is to be aimed at the
unpleaded issue.” Hill v. Estate of Allred, 2009 UT 28, ¶ 48, 216 P.3d
929 (quotation simplified). In such instances, the pleadings are
deemed amended after the fact, in order “to conform them to the
evidence” presented at trial. See Utah R. Civ. P. 15(b)(1). “The test
for determining whether pleadings should be deemed amended
under Utah R. Civ. P. 15(b) is whether the opposing party had a
fair opportunity to defend and whether it could offer additional
evidence if the case were retried on a different theory.” Hill, 2009
UT 28, ¶ 48 (quotation simplified). “When evidence is introduced
that is relevant to a pleaded issue and the party against whom the
amendment is urged has no reason to believe a new issue is being
injected into the case, that party cannot be said to have impliedly
consented to trial of that issue.” Id. (quotation simplified); see also
Archuleta v. Hughes, 969 P.2d 409, 412 (Utah 1998) (“Implied
consent of the parties must be evident from the record.”
(quotation simplified)).
¶109 Robert asserts that “the Estate showed awareness of its
potential liability” several times during the lawsuit. For instance,
it lodged an objection to the portion of the prayer for relief in
Robert’s petition that requested the return of wrongfully
distributed principal from the Estate, and it informed the court, at
trial and in certain post-trial hearings, that one of the Estate’s
20200808-CA 50 2023 UT App 81In re Harding Trust
goals in the litigation “was to assure that liability for Taylor’s
wrongful acts did not ‘slop over’ to the Estate.” But awareness of
an unpleaded issue does not necessarily constitute consent that
the issue be tried, especially here where the Estate demonstrated
its awareness of the issue by objecting (rather than consenting) to
the issue’s presence in the case. More is required. There must be
some indication that the Estate expressly or impliedly consented
to the litigation of the merits of the unpleaded issue at trial. See
Archuleta, 969 P.2d at 412 (“There must, of course, be either
express or implied consent of the parties for the trial of issues not
raised in the pleadings.”). And here, the record does not support
the proposition that the Estate expressly or impliedly consented
to try the issue of its vicarious liability for Taylor’s conduct.
¶110 Certainly, there is no indication that the Estate ever
expressly consented to amendment of Robert’s pleadings to add
the issue of its vicarious liability. Neither Robert nor the trial court
directs our attention to any such evidence.
¶111 And in our view, the record cannot support the conclusion
that the Estate ever impliedly consented to trial of that specific
unpleaded issue. As noted, awareness of the issue is not enough.
Neither Robert nor the trial court points us to evidence
“introduced without objection, where it appears that the parties
understood the evidence is to be aimed at the unpleaded issue.”
Hill, 2009 UT 28, ¶ 48 (quotation simplified). In the court’s ruling
on this point, it recited evidence that Taylor had conflicts of
interest, was acting in several different capacities, and used his
authority in those capacities to benefit his mother; the court
concluded therefrom that “[t]hese circumstances are sufficient
grounds to find that the issue of liability as to the Estate was tried
by consent.” This is incorrect. All of this evidence—regarding
Taylor’s conflicts of interest, breaches of duty, and actions taken
to benefit Margene—is relevant to Robert’s overarching claims
against Taylor. Its presence in the case would not have signaled
to the Estate that the unpleaded issue of its vicarious liability for
20200808-CA 51 2023 UT App 81In re Harding Trust
all those actions was somehow being litigated. 17 See id. (“When
16F
evidence is introduced that is relevant to a pleaded issue and the
party against whom the amendment is urged has no reason to
believe a new issue is being injected into the case, that party
cannot be said to have impliedly consented to trial of that issue.”
(quotation simplified)). We are aware of no evidence presented at
trial that clearly and exclusively went to the issue of whether the
Estate should be held vicariously liable for Taylor’s actions.
¶112 But perhaps the most telling sign that the vicarious liability
issue was not tried by implied consent of the parties is that even
Robert didn’t appear to believe, after the trial, that the issue had
been tried. In the set of proposed findings and conclusions he
submitted about a month after the trial ended, Robert included no
findings or conclusions regarding the Estate’s vicarious liability,
and he did not ask the court to so rule. The closest he came to the
issue was asking for a finding that imposed “a constructive trust
on the assets of the Estate” and an order that “all remaining
[Estate] assets payable or distributable to Taylor be used to pay
the outstanding judgments in this case.”
17. Similarly, the Estate’s failure to object to evidence that could
conceivably have supported a constructive trust claim does not
constitute implied consent to trial of an unpleaded vicarious
liability claim. See Hill v. Estate of Allred, 2009 UT 28, ¶ 48, 216 P.3d
929. As discussed below, Robert may or may not have properly
pleaded a claim that a constructive trust be imposed on Estate
assets, at least to the extent that those assets consist of wrongfully
distributed Trust principal; we offer no opinion on that question.
But even assuming, for purposes of this discussion, that he did
properly plead a claim for constructive trust, such a claim is a far
cry from a claim for complete vicarious liability for all actions, and
the Estate’s perceived acquiescence in admission of evidence
supporting a constructive trust claim does not necessarily signal
consent to trial of a vicarious liability claim.
20200808-CA 52 2023 UT App 81In re Harding Trust
¶113 Thus, the issue of the Estate’s vicarious liability was never
pleaded or sought by Robert and was never tried by consent of
the parties. The trial court came up with the theory all on its own,
many months after the trial had concluded. This was procedurally
inappropriate. We therefore reverse the court’s ruling that this
unpleaded issue was tried by the consent of the parties.
2
¶114 Because the issue of the Estate’s vicarious liability was
neither pleaded nor tried by the consent of the parties, the trial
court’s ruling holding the Estate vicariously liable for Taylor’s
actions is infirm and subject to reversal for that reason alone. But
the court’s vicarious liability ruling was also wrong on its merits,
and we opt to explain why, in order to provide certain guidance
that may be useful on remand.
¶115 There appear to be three different theories, floated by the
parties (or the court) at various times in the case, as to how Robert
and his siblings might access the assets of the Estate to
compensate them for the unlawful acts Taylor took as trustee of
the Trust. 18 First, there is the court’s own vicarious liability theory,
17F
18. At oral argument before this court, Robert’s attorney hinted at
a fourth theory, and suggested that the court, in ruling that the
Estate was vicariously liable for Taylor’s actions as trustee, might
have been applying a contract-based construct. But the court’s
written rulings on this topic do not appear to rely on any such
theory. In addition, we are aware of no specific contractual
obligation that might be utilized for this purpose. The only
obligation Margene had under the Trust documents was the duty
to keep the home in good condition. She was never the trustee,
never had any authority to distribute Trust assets, never signed
the Trust, and did not receive Trust assets upon any condition,
and therefore never had any contractual obligation regarding
(continued…)
20200808-CA 53 2023 UT App 81In re Harding Trust
which we refer to as the “conflict of interest” theory. As the court
explained it, Taylor wore several somewhat-conflicting hats at
various times throughout the case: he was trustee of the Trust, he
had power of attorney over Margene’s personal finances, he was
(after Margene’s death) personal representative of the Estate, and
he (along with Margene’s other children) is one of the
beneficiaries of the Estate. In the court’s view, Taylor was
motivated to benefit himself and the Estate where he could, and
he used his authority in these various roles—most notably as
trustee of the Trust—to do just that. Essentially, the court ruled
that, because many of the unlawful actions Taylor took as trustee
of the Trust benefited Margene and the Estate, the Estate should
be vicariously liable for Taylor’s actions, and should therefore
answer to Robert (and his siblings) for Taylor’s conduct.
¶116 Second, there is the agency law theory upon which Robert
largely relies here on appeal: that Taylor was an “agent” of
Margene (and, by extension, the Estate) in carrying out his
unlawful acts, and that the Estate—as principal—should be
vicariously liable for its agent’s activities.
¶117 Finally, there is a constructive trust theory—expressly
sought in Robert’s proposed post-trial findings—under which the
Estate is not necessarily vicariously liable for Taylor’s actions as a
general matter but, instead, the assets of the Estate may be used
to satisfy Robert’s judgment against Taylor, at least to the extent
that those assets stem from the Estate’s receipt of unlawful
distributions from the Trust. Specifically, Robert’s proposed post-
trial findings asked for the imposition of “a constructive trust on
the assets of the Estate” and an order that “all remaining [Estate]
those assets. See, e.g., Bloom Master Inc. v. Bloom Master LLC, 2019
UT App 63, ¶ 13, 442 P.3d 1178 (“To form an enforceable contract,
the parties must have a meeting of the minds on the essential
terms of the contract.” (quotation simplified)). We therefore reject
any contract-based argument for vicarious liability.
20200808-CA 54 2023 UT App 81In re Harding Trust
assets payable or distributable to Taylor be used to pay the
outstanding judgments in this case.”
¶118 The first two of these theories do not work. Even accepting
the court’s central proposition—that Taylor had conflicting
responsibilities—we cannot see how that fact leads to a legal
conclusion that the Estate is generally liable for unlawful actions
Taylor took in his capacity as trustee of the Trust. Under the Trust
documents, only Taylor (as trustee) had any authority to make
distributions. Margene (as “surviving spouse”) had no such
authority, with the Trust documents stating that “[t]he surviving
spouse shall have no power to appoint” Trust property to any
other person. Taylor’s unlawful distributions were undertaken in
his capacity as trustee of the Trust, and Margene had no authority
to make any distributions of Trust assets; because she had no such
authority, she couldn’t have delegated any of it to Taylor, via the
power of attorney or otherwise. In other words, Taylor’s authority
to take actions as trustee didn’t come from Margene, it came
directly from the Trust documents themselves. We acknowledge
that it certainly appears that the Estate may have benefited from
Taylor’s unlawful actions. But we are aware of no authority—
neither Robert nor the trial court cited any—indicating that an
entity that benefits from someone else’s bad acts is thereby
vicariously liable for those bad acts.
¶119 And the second theory—that Taylor was acting as
Margene’s (or the Estate’s) agent when he committed the
unlawful acts—fails for similar reasons. As an initial matter, there
is no evidence that Taylor was acting as Margene’s agent at all
when, acting as trustee of the Trust, he made distributions from
the Trust to Margene. That is, there is no evidence that Margene
instructed him to make any distributions, or that he was acting on
Margene’s behalf when he did so. The mere fact that Margene
benefited from Taylor’s actions does not mean that Taylor was
acting as Margene’s agent; this is especially true where, as here,
20200808-CA 55 2023 UT App 81In re Harding Trust
the alleged principal (Margene) possessed no authority to make
the distributions in question.
¶120 But more substantively, even if we assume that Taylor was
acting as Margene’s agent, a principal is liable for an agent’s
actions only under certain circumstances. See Stein Eriksen Lodge
Owners Ass’n Inc. v. MX Techs. Inc., 2022 UT App 30, ¶ 25, 508 P.3d
138 (“Under agency law, an agent cannot make its principal
responsible for the agent’s actions unless the agent is acting
pursuant to either actual or apparent authority.” (quotation
simplified)). “Actual authority may either be express or implied.”
Hussein v. UBS Bank USA, 2019 UT App 100, ¶ 32, 446 P.3d 96, cert.
denied, 455 P.3d 1062 (Utah 2019). “Express [actual] authority
exists whenever the principal directly states that its agent has the
authority to perform a particular act on the principal’s behalf.”
Drew v. Pacific Life Ins. Co., 2021 UT 55, ¶ 54, 496 P.3d 201(quotation simplified). “Implied [actual] authority includes acts
which are incidental to, or are necessary, usual, and proper to
accomplish or perform, the main authority expressly delegated to
the agent.” Id. (quotation simplified). And apparent authority
exists “when a third party reasonably believes the actor has
authority to act on behalf of the principal and that belief is
traceable to the principal’s manifestations.” Id. ¶ 55 (quotation
simplified). Robert makes no effort to persuade us that Taylor was
acting pursuant to either actual or apparent authority from
Margene when he committed the unlawful acts.
¶121 Robert does observe—correctly—that Margene gave
Taylor power of attorney over her personal finances. But he does
not explain how this narrow grant of authority led to the unlawful
acts Taylor committed as trustee, or constituted the type of
authority by which the Estate can be held vicariously liable for
Taylor’s malfeasance. The scope of this grant of authority
extended only to Margene’s own personal finances; Margene had
no authority to disburse Trust funds, and therefore could not have
granted, by her power of attorney, any such authority to Taylor,
20200808-CA 56 2023 UT App 81In re Harding Trust
either expressly or impliedly. And as a practical matter, nothing
Taylor did with Margene’s personal finances could have, by itself,
impacted the Trust; after all, by the time Taylor took actions
pursuant to his power of attorney—e.g., moving money from
Margene’s personal accounts to, say, his own—he would by
definition have already committed the unlawful acts in question—
distributing Trust principal into Margene’s accounts in the first
place. That is, the specific bad acts at issue here weren’t
undertaken pursuant to any authority Margene gave Taylor; they
were committed pursuant to authority Taylor already possessed,
as trustee, under the Trust documents. Under these
circumstances, Robert has not borne his burden of persuading us
that vicarious liability exists here under principles of agency law.
¶122 Moreover, as noted, the trial court did not rely on this
theory; if we were to rely on it here, we would be affirming on a
different ground, something we may do only if that ground is
“apparent on the record.” See Croft v. Morgan County, 2021 UT 46,
¶ 43, 496 P.3d 83 (quotation simplified). It is certainly not apparent
from this record that Taylor had authority from Margene to act on
her behalf in making unlawful distributions of Trust principal.
¶123 Thus, on the record before us, we see no basis in law for the
Estate to be held vicariously liable, as a general matter, for acts
Taylor committed as trustee of the Trust. We therefore reverse the
trial court’s ruling to that effect.
¶124 Before concluding our analysis, however, we discuss the
third theory by which assets of the Estate might conceivably be
used to satisfy a judgment entered against Taylor in connection
with his malfeasance as trustee: Robert’s apparent request that the
court impose a constructive trust on the assets of the Estate, at
least to the extent that those assets are derived from unlawfully
distributed Trust assets. As noted, this theory is more limited than
a vicarious liability theory—imposition of a constructive trust
would not connote that Margene or the Estate did anything wrong
20200808-CA 57 2023 UT App 81In re Harding Trust
and would not result in the Estate being generally liable for
Taylor’s unlawful actions. But imposition of a constructive trust
would enable Robert (and his siblings) to reach at least certain
assets of the Estate to compensate them for Taylor’s malfeasance.
See Lodges at Bear Hollow Condo. Homeowners Ass’n, Inc. v. Bear
Hollow Restoration, LLC, 2015 UT App 6, ¶ 31, 344 P.3d 145(“Constructive trusts are usually imposed where injustice would
result if a party were able to keep money or property that
rightfully belonged to another.” (quotation simplified)).
¶125 It is unclear to us whether Robert properly pleaded and
pursued this theory or, if not, whether it was tried by consent of
the parties. Robert certainly asked for this relief in his proposed
post-trial findings, at least regarding Taylor’s share of the Estate’s
assets. But the trial court specifically eschewed this theory during
post-trial proceedings, offering its view that it “need not retreat to
any equitable theory”—for instance, constructive trust—to
support its determination regarding vicarious liability. However,
the court expressly stopped short of rejecting a constructive trust
theory, stating in a later ruling that it had not ruled on the theory,
but instead had merely “ruled on an alternative ground,” and
further clarifying that the fact that it “didn’t rule on that theory
. . . doesn’t mean that [the court] didn’t accept it.” Indeed, the
court went so far as to say that, if a constructive trust theory was
“what the parties believe is a more proper finding,” the court may
be willing to impose such a trust.
¶126 On remand, the court should consider whether Robert
properly pleaded a claim for constructive trust and, if not,
whether that claim was tried by consent of the parties. If the court
determines that the claim is properly before the court, it should
then consider the merits of the claim, and evaluate whether and
to what extent a constructive trust should be imposed on the
assets of the Estate in favor of Robert and his siblings. The merits
of these questions have not been briefed in connection with this
appeal, and we express no opinion on them, nor do we express
20200808-CA 58 2023 UT App 81In re Harding Trust
any opinion regarding whether, on remand, these questions can
or should be decided on the existing evidentiary record or
whether additional proceedings would be appropriate.
B. Interest Rate
¶127 Second, the Estate asks us to examine the trial court’s
ruling regarding the rate to be applied in calculating the amount
of interest that Robert and Jill owe on the Note associated with the
Loan. Despite the fact that the only expert—the Estate’s expert—
to offer an interest calculation at trial calculated that interest to be
$922,219.77, the court concluded that the total amount of unpaid
interest owing on the Note was $565,314.97.
¶128 Under the terms of the Note, Robert and Jill agreed to pay
“variable interest . . . at the margin loan rate assessed by
S[a]lomon Smith Barney on Brokerage Account No. 298-02528-13
303 . . . as may fluctuate from time to time until paid in full.” But
the calculation is not as straightforward as it may sound, because
Robert and Jill failed to repay the Note for eleven years, and there
were “some months” during that time span “where an interest
rate was not published on the account” referenced in the Note.
¶129 For the months in which an interest rate on the specific
account was published, the Estate’s expert used the published
rate, which varied by month and ranged from 4.125% to 11%. For
most of the “gap periods”—those months for which no interest
rate was published on the account—the expert looked at the rate
published for the month before the gap and the rate published for
the month after the gap, averaged the two rates, and applied that
average rate for each month during the gap period. Some of these
gap periods were short, involving a gap of just a month or two,
but other gap periods were quite long, involving periods up to
three years without a published interest rate. But for the last gap
period—a long one stretching from September 2011 through
February 2015—the expert did not use an “average rate”
20200808-CA 59 2023 UT App 81In re Harding Trust
methodology, because he could find no rate for the end month.
Instead, he “made some calls and talked to a Smith Barney
representative” who gave him “a range of rates”—from 4.75% to
5.5%—used “during that period of time” on various brokerage
accounts. The expert then attempted to “corroborate that” range
by comparing those rates to “rates published in the Wall Street
Journal” and by discussing the issue “with [his] colleagues,” and
eventually determined that a “reasonable rate” to use for the last
gap period was 4.75%, a rate the expert considered to be “a very
conservative rate . . . on the low end of the range.” The expert
noted that this choice was only “an increase of 1.5% over the
prime rate,” which he considered to be another sign that his
chosen rate was “conservative and reasonable.” Applying this
methodology, the expert calculated the total amount of interest
owing, over the entire eleven-year period, as $922,219.77.
¶130 The trial court found the expert’s methodology to be
“reasonable,” at least for “short gap periods,” but nevertheless
did not accept the Estate’s expert’s methodology. It determined
that the “Note’s repayment of interest term was ambiguous” with
regard to the gap periods because the Note did not specify “what
should occur if” no monthly interest rate was published for the
account in question. It also found that “the intent of the parties”
with regard to this ambiguity was “ascertainable sufficient to
enforce it.” But even though it professed to be considering
“extrinsic evidence to clarify the intent of the parties,” the court
did not actually utilize any such evidence. Instead, it observed
that the Note was a “negotiable instrument,” and it turned to a
statute, located in Utah’s Uniform Commercial Code (UCC), for
guidance. See Utah Code § 70A-3-112. That statute states, in
relevant part, that if a negotiable “instrument provides for
interest, but the amount of interest payable cannot be ascertained
from the description, interest is payable at the judgment rate in
effect at the place of payment of the instrument and at the time
interest first accrues.” Id. § 70A-3-112(2). The court concluded that
20200808-CA 60 2023 UT App 81In re Harding Trust
this statute “provides an adequate remedy at law to execute the
intent of the parties as represented in the Note.” And it decided
to apply this statutory default rate—which turned out to be
3.28%—to all gap periods, regardless of their length, noting that
the statutory rate “provides a reliable method at law that relieves
the Court from adopting” the expert’s methodologies for the gap
periods. Notably, the court did not ever find that the Estate’s
expert’s methodology was unreasonable; as noted, it found the
methodology reasonable as to short gap periods and, even with
regard to the longer gap periods, the court stated that it
“appreciate[d]” the expert’s “efforts to determine reasonableness
of his proposed rates by comparing them with the
contemporaneous prime rate.” Later, using the published rate for
the months in which one existed and the UCC rate for all other
months, the court calculated the unpaid interest as $565,314.97.
¶131 The Estate ascribes error to the court’s approach, asserting
that, after making its ambiguity determination, the court should
not have jumped directly to the UCC rate but, instead, should
have “determine[d] the parties’ intent from extrinsic evidence,”
including the expert’s testimony. The Estate points out that the
Note is far from silent on the interest-rate question, and indicates
the parties’ intent to apply a rate equivalent to the brokerage rate
for a particular account. And they assert that the UCC rate
“applies only where the instrument is silent on how to calculate
interest,” and not where the parties’ instructions in that regard are
simply ambiguous. We find merit in the Estate’s argument.
¶132 As an initial matter, we note that the Estate’s argument is
in line with general principles of contractual interpretation,
including the bedrock proposition that, when “a contract term is
ambiguous, [trial] courts should consider extrinsic evidence to
resolve the ambiguity.” See Brady v. Park, 2019 UT 16, ¶ 29, 445
P.3d 395. Neither side takes issue with the court’s determination
that, at least for the gap periods, the Note was ambiguous with
20200808-CA 61 2023 UT App 81In re Harding Trust
regard to interest rate. 19 But the Estate persuasively argues that,
18F
even for gap periods, the Note does give some indication of the
parties’ intent: they wanted to apply a rate equivalent to the
Salomon Smith Barney brokerage rate. And the Estate points out
that its expert came up with a methodology, in keeping with the
parties’ expressed desire to use brokerage rates rather than
presumably lower statutory rates, for estimating the brokerage
rates for the gap periods, and points out that the trial court even
found that methodology to be “reasonable,” at least as applied to
the shorter gap periods.
¶133 Moreover, courts that have construed the UCC interest rate
statute have concluded that it should not be applied in situations
where “an ascertainable interest rate is provided but the sum
certain requirement fails for lack of evidence concerning a
reasonable rate of interest.” See Commercial Services of Perry, Inc. v.
19. And neither Robert nor Jill makes any argument that the UCC
rate should apply whenever contractual ambiguity exists with
regard to the interest rate. In general, “a court’s legal
determination that ambiguity exists within a text leads to the
conclusion that” a factfinder will need to consider extrinsic
evidence. See Jessup v. Five Star Franchising LLC, 2022 UT App 86,
¶ 42, 515 P.3d 466. This general principle appears to apply here.
At least, neither Robert nor Jill makes any assertion that, given the
language of the UCC, this constitutes one of those “other specific
areas of the law . . . where clarity between parties is itself at issue”
and in which “the presence of ambiguity . . . suggests that a party
may be entitled to a judgment as a matter of law.” Id. (describing
some of those exceptional situations). That is, Robert and Jill do
not assert that the UCC rate should apply whenever ambiguity in
the words used in the instrument prevents a court from easily
ascertaining the agreed-upon interest rate. See Utah Code § 70A-
3-112(2). Because Robert and Jill do not make this argument, we
offer no opinion as to its merits.
20200808-CA 62 2023 UT App 81In re Harding Trust
Wooldridge, 968 S.W.2d 560, 565 (Tex. App. 1998). In particular, at
least where competent extrinsic evidence exists that can be
utilized to estimate a reasonable rate commensurate with the
parties’ intentions, courts have declined to apply statutory default
rates where the parties agreed, in their instrument, to an interest
rate tied to a specific bank’s prime rate and where that bank goes
out of business. See, e.g., Ginsberg 1985 Real Estate P’ship v. Cadle
Co., 39 F.3d 528, 533 (5th Cir. 1994) (applying “an analogous prime
rate,” rather than a default statutory rate, to calculate interest after
a bank failure, where the contract called for interest at that bank’s
prime rate plus 1%); FDIC v. Blanton, 918 F.2d 524, 532–33 (5th Cir.
1990) (determining that a default statutory rate was
“inapplicable” where the parties had agreed upon an interest rate
equivalent to a specific bank’s rate plus 1% and where the bank
had failed, holding that “[t]he trial judge could have applied an
analogous prime rate as consistent with the intent of the parties”).
We consider the failed-bank situation helpfully analogous to this
one, and find the analysis applied by the courts in those cases
persuasive and useful in this situation.
¶134 In those cases, courts examine extrinsic evidence to make a
finding regarding a rate that would be reasonable and most in line
with the parties’ intent. See Central Bank v. Colonial Romanelli
Assocs., 662 A.2d 157, 158 (Conn. App. Ct. 1995) (“When a variable
interest rate is based on the rate of a failed institution, the trial
court must determine whether the substitute rate is reasonable by
examining the documents and testimony offered by the
plaintiff.”); FDIC v. Cage, 810 F. Supp. 745, 747 (S.D. Miss. 1993)
(“Because the rate of interest is a term which is essential to a
determination of the rights and duties of the parties and because
the parties to this action understandably failed to specify the
interest rate to be applied upon the failure of [an institution], it is
left to the Court to determine a reasonable rate of interest.”).
Importantly, “in determining reasonableness” in situations
involving a failed bank, “the court need not determine the exact
20200808-CA 63 2023 UT App 81In re Harding Trust
methodology used by the failed bank in calculating its internal
interest rate; such a determination would be impossible in many
circumstances. Rather, the court must determine whether the
substitute rate was reasonable based on all the circumstances of
the particular case.” Ninth RMA Partners, L.P. v. Krass, 746 A.2d
826, 831 (Conn. App. Ct. 2000) (quotation simplified).
¶135 In this case, the trial court did not undertake this type of
analysis. Instead, without fully evaluating the reasonableness of
the Estate’s proffered extrinsic evidence (chiefly, the expert’s
methodology), the court jumped straight to the UCC default rate,
stating that “the UCC provides an adequate remedy at law to
execute the intent of the parties” and “relieves the Court from
adopting” the expert’s methodology. And the court did so
without making any finding that the expert’s unrebutted
testimony was unreasonable or unreliable; to the contrary, the
court expressly found the expert’s methodology “reasonable,” at
least for use over shorter gap periods. And it made little effort to
explain why it found the expert’s methodology reasonable for
shorter gap periods but not necessarily for longer ones; it stated
only that the expert’s gap period rates were “hypothetical and
speculative,” a criticism that would seem to apply to all gap
periods regardless of their length, and that will apply, at least to
some extent, any time an effort is made to estimate an interest rate
for a bank that, for instance, has gone out of business. Instead of
explaining why it rejected the expert’s conclusions, the court
simply stated that it “does not adopt” the expert’s “method as a
proper means to ascertain interest,” and instead elected to apply
the UCC rate. Contrary to the court’s statement, the statute did
not “relieve” the court of its obligation to apply an interest rate
commensurate with the intentions of the parties, nor of its
obligation to grapple with, and make specific findings regarding,
the credibility and reasonableness of the extrinsic evidence
offered by the Estate and its expert.
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¶136 Certainly, if the court had made specific and supported
findings that the expert’s methodology was unconvincing and
unreasonable across the board, and that therefore the Estate’s
extrinsic evidence was not credible, it may have been possible for
the court to default to the UCC rate. In that scenario—where the
other side (Robert and Jill) did not offer any extrinsic evidence of
their own and where the Estate’s evidence was deemed not
credible—there would exist no competent extrinsic evidence to
assist the court in ascertaining a rate reasonably equivalent to the
one the parties intended, and therefore defaulting to a statutory
rate may be appropriate. But absent such findings, the court
should make a determination, based on the extrinsic evidence
offered, as to the interest rate most reasonably equivalent to the
intent of the parties as expressed in the Note.
¶137 We therefore vacate the court’s interest-rate determination,
and remand the case to the trial court for reassessment of a
reasonable rate of interest that best approximates the intentions of
the parties. In so doing, the court should specifically assess the
reasonableness of the Estate’s expert’s methodology. To the extent
the court finds the expert’s methodology reasonable—as it
already has with respect to short gap periods—it should apply
that methodology, given the absence of other extrinsic evidence.
The court should resort to the UCC statutory rate only to the
extent it finds the expert’s methodology unreasonable, and not
merely because the expert’s effort to estimate a rate that, by
definition, does not exist is somewhat hypothetical. We imagine
that this reassessment might be done by resort to the existing
evidentiary record, but it will certainly be within the court’s
discretion to hold additional proceedings if necessary.
C. The Form of the Judgment
¶138 Next, the Estate raises several issues with the form of the
judgment the court entered in this case. First, the Estate challenges
the court’s award of damages against it related to repairs to the
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marital home. Second, the Estate wonders who the proper
judgment creditors are. Finally, and relatedly, the Estate raises
setoff-related issues arising from the fact that it obtained an award
against both Robert and Jill; it asks us to instruct the trial court to
enter a separate judgment in favor of Robert and Jill, or to
otherwise resolve the issues related to the court’s decision to set
off the money owed to the Estate against the money the Estate
owes to Robert. We find merit, at least to some extent, in all of the
Estate’s complaints related to the form of the judgment, and we
therefore vacate the court’s judgment and remand these issues to
the trial court for clarification.
1
¶139 First, the Estate complains about the court’s award of
damages to Robert, and against the Estate, for damages to the
marital home. Its main complaint in this regard is that Robert did
not point to any evidence that he—as opposed to Jeana—had
actually been damaged. 20 This challenge is well-taken.
19F
¶140 The trial court found, in determinations not challenged on
appeal, that the marital home “was in excellent repair and
condition” at the time of Dean’s death, but that Margene did not
continue to properly maintain the property afterward. After
Margene’s death, Jeana purchased the home, and made
significant repairs that were necessitated by Margene’s failure to
properly maintain the home. The court found that Jeana
purchased the home for full value—without the benefit of any
discount for the condition of the home—and then made the
20. The Estate also complains about the amount of this damages
award, asserting that it should be for $29,439 instead of $33,500.
There was evidence supporting both damages figures, and the
trial court was within its discretion to select the slightly higher
one. We therefore reject the Estate’s challenge to the amount of
this portion of the damages award.
20200808-CA 66 2023 UT App 81In re Harding Trust
repairs to the home out of her own pocket. In view of these
apparently undisputed facts, the court determined, in its main
post-trial ruling, that the damages related to the home repairs
were “owed to Jeana.”
¶141 Despite determining that any damages in this regard were
owed to Jeana, the court’s judgment—entered some months after
its main post-trial ruling—reflected that these damages were to be
paid to Robert. Robert offers no good explanation for this,
asserting simply that he and Jeana, “as beneficiaries” of the Trust,
“have standing and are entitled to damages” related to the repairs
to the marital home. But standing is one thing; evidence of
damages is another. We agree with the Estate that Robert—
personally, as distinct from Jeana—offered no evidence that he
sustained damages related to the repairs to the home, and that the
judgment in this case should be modified to remove any
obligation by the Estate to pay Robert for those damages.
2
¶142 The Robert-or-Jeana issue related to repairs to the marital
home is just one confusing result of the court’s decision to list
Robert—and only Robert—as judgment creditor. By this point in
the opinion, it should be apparent that—for the most part, and
with certain exceptions such as perhaps the payment to Robert’s
ex-wife—the damages Taylor caused were visited upon the Trust,
and all its beneficiaries, and not just upon Robert. Yet the trial
court—over objection—determined to list Robert as the sole
judgment creditor, even though it awarded the full amount of the
Trust’s damages. This was error and requires us to vacate the
judgment and remand the issue for clarification.
¶143 The court can remedy this overarching error in one of two
ways. First, it could elect to enter judgment in favor of not just
Robert but, instead, either (a) the Trust (or, alternatively, the
trustees of the Trust in their official capacity) or (b) all three
20200808-CA 67 2023 UT App 81In re Harding Trust
beneficiaries, each to the extent of their damage. Second, it could
elect to have Robert remain as the sole judgment creditor but, in
this event, it would need to reduce the damages award to reflect
the fact that Robert is entitled to receive only one-third of any
damages sustained by the Trust.
¶144 We offer no opinion as to which option the court should
choose on remand. Each has potential procedural pitfalls; from
our review of the record, the party status of Jill and Jeana is
somewhat unclear. But one thing the court may not do is enter
judgment in favor of Robert, personally, in the full amount of the
Trust’s damages.
3
¶145 Next, the Estate raises the related issue of how to
memorialize the judgment in its favor, and against Robert and Jill,
for unpaid interest on the Note. The court’s judgment resolved
this issue by way of setoff, awarding damages to Robert and
against the Estate associated with the Estate’s determined
vicarious liability for Taylor’s actions as trustee, and then setting
off against that amount the interest Robert owed to the Estate. The
Estate complains about the way the court handled this, pointing
out that—even if the court correctly applied setoff principles with
regard to Robert—the court awarded no money in Jill’s favor and
therefore could not have applied setoff principles with regard to
Jill’s obligation to pay interest to the Estate. In other words, the
Estate complains that the court held that it was entitled to recover
several hundred thousand dollars from Jill but gave the Estate no
way to actually go about collecting on this award. Again, the
Estate’s complaint is well-taken; the court erred in the way it
applied setoff principles under these circumstances.
¶146 This issue may, however, be rendered moot by this court’s
determination that the Estate is not vicariously liable for Taylor’s
actions as trustee, see supra Part II.A, and by its determination that
20200808-CA 68 2023 UT App 81In re Harding Trust
the Estate is not liable to Robert (as opposed to, potentially, Jeana)
for the repairs to the marital home, see supra Part II.C.1. Unless the
court, after reconsidering Robert’s potential claim for constructive
trust, actually imposes such a trust, no judgment will be entered
against the Estate in favor of Robert or Jill. In any event, and even
if the court ends up entering a judgment for constructive trust
against the Estate and in favor of the Trust’s beneficiaries, the
court in clarifying judgment-related issues should make sure that
the judgments properly account for the Estate’s award against
both Robert and Jill for unpaid interest.
D. Attorney Fees
¶147 Finally, the Estate appeals the denial of its request for
attorney fees incurred in support of its claim for unpaid interest
on the Note. Its claim is rooted in the language of the Settlement
Agreement and related Note, which both have attorney fee
provisions; the one contained in the Note requires Robert and Jill
“to pay all reasonable costs and expenses of collection of any
amount due under this Note including reasonable attorney’s
fees.” Neither Robert nor Jill contests the Estate’s claim that, at
least conceptually, the Estate would be entitled to recover
attorney fees incurred in obtaining its judgment for unpaid
interest on the Note. After all, the Estate prevailed on that specific
claim. Indeed, in its attorney fees ruling, the trial court
acknowledged that Robert and Jill “as guarantors of the [N]ote
would owe fees [to the Estate] pursuant to a strictly construed
reading of” the Note’s attorney fees provision.
¶148 But the trial court nevertheless denied the Estate’s claim for
attorney fees, for several reasons. First, and chiefly, the court
denied the Estate’s claim because, in the court’s view, the Estate
had failed to sufficiently allocate its incurred fees between its
successful and unsuccessful claims. Under our law, a party
requesting attorney fees has an obligation to allocate its fees
between claims on which it is entitled to fees and claims “for
20200808-CA 69 2023 UT App 81In re Harding Trust
which there is no entitlement to attorney fees,” and should limit
its fee request to only those specific fees incurred in aid of claims
on which it is entitled to fees. See Zion Village Resort LLC v. Pro
Curb USA LLC, 2020 UT App 167, ¶ 62, 480 P.3d 1055 (quotation
simplified). A requesting party who fails to do so “makes it
difficult, if not impossible, for the trial court to award . . . fees
because there is insufficient evidence to support the award.” See
Jensen v. Sawyers, 2005 UT 81, ¶ 132, 130 P.3d 325. Indeed, if a
requesting party makes no effort to allocate its fees, a court “may,
in its discretion,” elect to “not award wholesale all attorney fees”
or may “deny fees altogether for failure to allocate.” Burdick v.
Horner Townsend & Kent, Inc., 2015 UT 8, ¶ 59, 345 P.3d 531(quotation simplified). But a court’s discretion in this regard is not
unlimited, and “is not an invitation to forego a reasoned analysis.”
Id. ¶ 60. Indeed, in Burdick, our supreme court determined that a
trial court had abused its discretion by denying a request for
attorney fees, in its entirety, for failure to allocate, noting that the
movant’s “affidavit clearly identifie[d] 282 hours attributable only
to” the successful claim. Id. The court remanded the matter to the
trial court to “conduct a reasonableness analysis and attempt to
discern what fees may be divided between the” successful claims
and the unsuccessful claims. Id. ¶ 61.
¶149 In this case, some of our rulings described herein (see supra
Parts II.A, II.B, and II.C) have changed the landscape with regard
to allocation enough to require a remand, so that the Estate can
resubmit its fee request in light of our rulings and so that the trial
court can, in light of those rulings, reassess the quality of the
Estate’s effort to allocate its requested fees. Most notably here, the
fees the Estate incurred in advocating for its expert’s methodology
for calculating the rate of interest may—depending on how
proceedings on remand turn out—need to be included in the
award. But in any event, we have some concerns with the trial
court’s original analysis, and we express those concerns here in an
effort to provide guidance on remand.
20200808-CA 70 2023 UT App 81In re Harding Trust
¶150 First, we are not convinced that the Estate’s allocation
efforts—even the first time around—were so poor as to necessitate
a complete denial of its attorney fees claim. In its ruling, the trial
court acknowledged that “the [E]state made some effort to”
allocate fees, “as it removed or modified fees claimed for work
advancing arguments or upon which it did not prevail.” The
record bears this out. The Estate eliminated (wholly or partially)
from its fee request some forty-eight line items totaling nearly
$30,000 of fees. To be sure, the Estate requested over $174,000 in
fees, even after the allocation, and one could conceivably argue,
depending on the circumstances, that reducing only $30,000 from
fees totaling more than $200,000 does not constitute sufficiently
deep cuts. But the Estate’s allocation effort does, to our eye,
appear to be detailed, targeted, and undertaken in good faith. The
Estate’s main claim—and the primary reason for its presence in
the litigation—was the one for unpaid interest on the Note; it does
not seem to us implausible that the majority of its fees would have
been incurred in aid of litigating that claim. In situations like this,
where a party has taken a good-faith and detailed run at
allocation, the better approach—if a trial court remains of the view
that the cuts are not quite deep enough—is to make a reduced
award rather than to deny the request in its entirety. Wholesale
denial of a fee request on allocation grounds should be reserved
for situations where a party either makes no effort to allocate at
all, see Burdick, 2015 UT 8, ¶ 59 (stating that a court may “deny fees
altogether for failure to allocate” (emphasis added)), or where a
party makes only token or wholly inadequate attempts to allocate.
¶151 Next, the court mentioned several other factors that
influenced its decision to deny the Estate’s fee request that were,
in our view, not a proper basis for denial. For instance, the court
noted that, for many years, “no significant steps were taken to
timely collect on the [N]ote,” and appeared to hold this against
the Estate in assessing its claim for fees. But it was the Trust’s
responsibility for pursuing repayment of the Note, at least until
20200808-CA 71 2023 UT App 81In re Harding Trust
Margene’s death (at which point unpaid interest became payable
to the Estate); any delays in pursuing collection from 2004 through
2015 cannot be laid at the feet of the Estate and are, in any event,
beside the point. After Margene’s death, and after the principal
amount of the Note was effectively paid off in connection with the
first distribution to the Trust beneficiaries, the Estate soon
pursued this action to recover the unpaid interest. There is no
basis to hold delays in enforcement against the Estate in
connection with assessing its claim for fees.
¶152 Next, the court speculated that the provision of the
Settlement Agreement directing that unpaid interest on the Note
was to be paid to the Estate, rather than to the Trust and its three
beneficiaries, “was contrary to the intent and past practice of”
Dean, and the court stated that it was “troubled” by that
provision. The court noted that this sentiment was “not central to
its decision,” but it should go without saying that the court should
not have taken this into account at all in connection with assessing
the Estate’s fee request. 21
20F
¶153 In short, we vacate the court’s order denying, in its entirety,
the Estate’s claim for attorney fees; we do so largely because, in
our view, the rulings set forth elsewhere in this opinion have
changed the landscape enough to necessitate a reassessment of
21. The Estate also asserts that the trial court more heavily
scrutinized its fee request than it did Robert’s, asserting that—like
the Estate—Robert also failed to prevail on all of his claims and
motions, and therefore should also have been required to allocate
his requested fees between successful and unsuccessful
endeavors. The propriety of the court’s fee award to Robert is not
at issue in this appeal, and we therefore decline to comment on
the court’s handling of Robert’s fee request, other than to state that
courts should, of course, evaluate fee requests from the various
parties in the case by the same standards.
20200808-CA 72 2023 UT App 81In re Harding Trust
that claim. And we remand the matter to the trial court for
reassessment of that claim consistent with this opinion.
CONCLUSION
¶154 We reject all but one of Taylor’s arguments on appeal. The
trial court did not abuse its discretion in denying Taylor’s motion
to amend. Taylor has not carried his burden, on appeal, of
showing error in the court’s partial summary judgment ruling, or
of demonstrating abuse of discretion in its decision to exclude
Taylor’s experts. We also affirm much of the court’s damages
award against Taylor, but vacate the court’s award of damages
against Taylor related to the payment to Robert’s ex-wife.
¶155 We find merit in most of the Estate’s arguments on appeal.
The court erred in holding the Estate vicariously liable for the
actions Taylor took as trustee. The court also erred in its approach
to calculating the interest owed to the Estate on the Note, as well
as in various aspects of its judgment. In addition, we remand the
question of the Estate’s entitlement to attorney fees.
¶156 Accordingly, we vacate the judgment entered by the trial
court, and remand this case for further proceedings consistent
with this opinion; those proceedings should, among other things,
involve evaluation of Robert’s potential claim for constructive
trust against the Estate, reassessment of the amount of interest the
Estate is owed, clarification of the judgment, and reassessment of
the Estate’s claim for attorney fees incurred in connection with its
successful claim for unpaid interest.
20200808-CA 73 2023 UT App 81