456 P.3d 776
Utah Ct. App.2019Background
- Training Table Restaurants (TTR) was a family business founded by Kent Chard; Kent and daughter Stephanie each owned 50% of TTR, but Kent-controlled entities (TT Three LC and Training Table Land & Holding LC) owned the real estate and collected rent.
- In Nov. 2012 the TTR board (including Stephanie and Kent) approved rent increases via written addenda; TTR paid the higher rent for ~3 years.
- Stephanie bought into the business in 2012, later became TTR president (Jan. 2015), then pursued a succession plan and pressured Kent; she directed TTR to withhold rent and recorded lis pendens on Landlords’ properties.
- Kent/landlord entities pursued eviction for unpaid rent, obtained judgment and sale rights; Landlords purchased TTR’s claims at sheriff’s sale and execution followed.
- Stephanie sued Kent, Landlords, and advisors for malpractice, fraud, fiduciary breach (derivative and personal), unjust enrichment, and other claims; parties exchanged discovery but both served sparse initial damages disclosures.
- The district court granted summary judgment dismissing most claims by both sides (relying on preclusion from eviction judgment, damages-disclosure sanctions, timeliness, stipulation dismissing personal fiduciary claims, and merits for some counterclaims). On appeal the court affirmed many dismissals but reversed and remanded a few claims for further proceedings.
Issues
| Issue | Plaintiff's Argument (Stephanie or Kent) | Defendant's Argument | Held |
|---|---|---|---|
| Preclusion of malpractice/fraud by eviction judgment | Stephanie: malpractice/fraud claims broader than rent reasonableness and not precluded | Defendants: eviction judgment and stipulated eviction resolution preclude relitigation of rent-reasonableness issues | Court: Stephanie waived challenge to preclusion; affirmed dismissal of malpractice/fraud claims on that and other independent grounds |
| Breach of fiduciary duty (personal vs derivative) | Stephanie: asserted both derivative (on behalf of TTR) and personal claims under close-corporation/independent-harm theories | Defendants: derivative claims belonged to TTR (sold at sheriff’s sale); parties stip'd in court to dismiss personal claims | Court: derivative claims not appealed; personal claims were stipulated away in open court—dismissal affirmed |
| Unjust enrichment (damages-disclosure sanction) | Stephanie: damages for unpaid services were simple invoices already produced; exclusion was harmless | Defendants: Stephanie’s initial damages disclosure was insufficient—exclude damages evidence as sanction | Court: exclusion was abuse as to the simple unjust-enrichment claim; reversed exclusion and dismissal for that claim and remanded |
| Kent’s damages disclosures (counterclaims) | Kent: initial disclosure sparse but he timely provided full damages via interrogatory responses months before discovery closed | Stephanie: initial disclosures were inadequate; sanction exclusion appropriate | Court: Kent’s later discovery responses cured initial defect; reversed exclusion and reinstated his affected counterclaims (including NIED) |
| Wrongful-lien / lis pendens liability | Kent: lis pendens was groundless because suit sought only rent reformation (money remedy) not title or possession | Stephanie: lis pendens related to lease reformation against property | Court: lis pendens statute covers actions affecting title or right of possession only; recording was improper for mere rent dispute—reversed dismissal of wrongful-lien claim and remanded for merits under lis pendens statute |
| Intentional infliction of emotional distress (IIED) by Stephanie | Kent: conduct (demand letters, withholding rent, negotiating to sell properties, pressuring Kent) caused severe emotional harm (suicide attempt) and was outrageous | Stephanie: actions were hard-nosed business/family negotiation tactics, not extreme conduct | Court: ordinary business/family dispute and litigation-related tactics not sufficiently outrageous; affirmed dismissal of IIED claim |
| Attorney-client privilege waiver (New Firm attorneys) | Kent: Stephanie’s initial disclosure listing her attorneys as witnesses waived privilege for matters in the pleadings; disclosed materials may be used at trial | Stephanie: waiver should have been limited or revocable for trial; late attempt to reassert privilege should be allowed | Court: listing attorneys as witnesses placed attorney communications at issue and waived the privilege for matters raised in the pleadings; waiver is not revocable after disclosure and applies to trial as well (subject to relevance/admissibility) |
Key Cases Cited
- Penunuri v. Sundance Partners, Ltd., 423 P.3d 1150 (Utah 2017) (summary-judgment standard of review)
- Keystone Ins. Agency, LLC v. Inside Ins., LLC, 445 P.3d 434 (Utah 2019) (discovery-sanction/harmlessness factors for damages disclosures)
- Orvis v. Johnson, 177 P.3d 600 (Utah 2008) (view facts in light most favorable to nonmoving party on summary judgment)
- Prinsburg State Bank v. Abundo, 296 P.3d 709 (Utah 2012) (stipulations bind parties and preclude later challenge absent timely motion and justifiable cause)
- Bennett v. Jones, Waldo, Holbrook & McDonough, 70 P.3d 17 (Utah 2003) (ordinary litigation tactics and filing suit generally not actionable as IIED)
- Retherford v. AT&T Commc’ns, 844 P.2d 949 (Utah 1992) (IIED requires extraordinarily vile, atrocious conduct)
- Winters v. Schulman, 977 P.2d 1218 (Utah Ct. App. 1999) (lis pendens allowed only where claim affects title or right of possession)