Capri Sunshine, LLC v. E & C Fox Investment, LLC
2015 UT App 231
| Utah Ct. App. | 2015Background
- Owners (the Gollahers) took multiple loans secured by four trust deeds on The Rail Event Center; defaults led Granite’s deeds to be acquired by Fox Investments.
- Fox Investments conducted a trustee’s sale in Jan 2011 (sale time irregularity asserted); Fox/affiliate initially obtained title; Smith later held a separate trustee’s sale and purportedly obtained title in Feb 2012.
- District court later set aside Fox Investments’ Jan 2011 sale; Smith recorded his deed and conveyed title to Capri Sunshine, which attempted to evict Fox Investments. Fox Investments disputed Smith/Capri’s title.
- Fox Investments reissued notice and provided statutory payoff statements under Utah Code § 57-1-31.5; Capri hired an auditor who concluded the payoff figures were overstated. Capri sought injunctive relief and later sued for declaratory judgment, accounting, waste, and unlawful detainer.
- Fox Investments won a credit bid at a May 2013 trustee’s sale. The district court granted Fox Investments’ 12(b)(6) motion and dismissed Capri’s complaint with prejudice. Capri appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether inflated payoff statement violated §§ 57-1-31 and -31.5 and deprived Capri of cure rights | Capri: payoff was grossly overstated (improper fees/interest), which prevented cure | Fox: payoff complied with statutory requirements; Capri showed no legal authority that an inaccurate payoff alone invalidates sale and Capri never tendered payment | Court: Dismissed — Capri failed to show statutory violation or that it tendered payment; no remedy shown to set aside sale |
| Whether Fox’s credit bid exceeded statutory limits under § 57-1-28 | Capri: beneficiary may only bid up to actual balance + fees; bidding above that violated statute | Fox: § 57-1-28 limits credit applied to bid, not the amount a beneficiary may bid; credit bidding is permitted and surplus protects junior lienholders | Court: Dismissed — statutory scheme allows credit bids; Capri did not show bid violated statute or wasn’t paid |
| Claims for accounting, waste, and unlawful detainer based on Fox as mortgagee-in-possession | Capri: Fox owed accounting for rents and is liable for waste while occupying property | Fox: Capri lacks ownership/right to possession; thus those remedies do not lie | Court: Dismissed — Capri failed to plead or argue legal right to possession/ownership; claims require ownership/redemption which Capri did not establish |
| Whether dismissal with prejudice was improper and whether leave to amend should have been allowed | Capri: dismissal with prejudice was too harsh; could have pled trespass or injunctive claims on remand | Fox: claims lacked merit; district court considered theories and resolved on merits | Held: Dismissed with prejudice affirmed — court reviewed merits; Capri failed to show amendment would cure defects |
Key Cases Cited
- Oakwood Vill. LLC v. Albertsons, Inc., 104 P.3d 1226 (Utah 2004) (standard for reviewing 12(b)(6) dismissal)
- Whipple v. American Fork Irrigation Co., 910 P.2d 1218 (Utah 1996) (purpose and limits of rule 12(b)(6))
- State v. Thomas, 961 P.2d 299 (Utah 1998) (appellate briefing requires developed legal authority and analysis)
- Randall v. Valley Title, 681 P.2d 219 (Utah 1984) (senior lienholders may combine interests to bid; purchaser must pay price bid)
- Jackson v. Halls, 314 P.3d 1065 (Utah Ct. App. 2013) (credit bid avoids useless ceremony of payment by entitled beneficiary)
- Jenkins v. Equipment Ctr., Inc., 869 P.2d 1000 (Utah Ct. App. 1994) (tender of lien amount required before certain claims like conversion)
- Bonneville Tower Condo. Mgmt. Comm. v. Thompson Michie Assocs., Inc., 728 P.2d 1017 (Utah 1986) (dismissal with prejudice is a severe remedy and should be used cautiously)