368 P.3d 125
Utah Ct. App.2016Background
- In 2005 Roger P. Christensen (and his IRA) made three short-term loans to Bradley Lancaster/BRL, each secured by a trust deed on separate properties (Annapolis Drive, Bury Road, Jordan Point Drive); Lancaster defaulted and allegedly misappropriated funds.
- Escrow/title agent Rick Smith (and several title companies) handled disbursements and recordings; later transfers and new trust deeds involved multiple third parties (buyers, lenders, trustees, MERS/Founders Title).
- Plaintiff sued Lancaster, Smith, and title/escrow entities in March 2011 asserting conversion, breach of fiduciary duty, negligence, successor liability, and related remedies, but did not plead foreclosure on the three properties then.
- In October 2013 Plaintiff amended its complaint to add foreclosure claims against the three properties and newly named foreclosure defendants (buyers, mortgagees, trustees); additional foreclosure defendants were added in March 2014.
- Several foreclosure defendants moved to dismiss, arguing the six-year statute of limitations had run because the promissory notes were in default by 2006; the district court dismissed the foreclosure claims as time-barred and held the amended pleas adding new parties did not relate back under Utah R. Civ. P. 15(c).
- Plaintiff alternatively argued relation back (DiMeo reliance) and equitable tolling/estoppel based on alleged concealment; the district court rejected these arguments and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether foreclosure claims against newly added parties relate back under Utah R. Civ. P. 15(c) | Original suit against Lancaster was timely; amended foreclosure claims should relate back to avoid the statute of limitations | Relation back does not apply to newly added parties absent identity-of-interest or misnomer exceptions; plaintiff offered no such showing | Relation back does not apply; dismissal affirmed |
| Whether equitable tolling or equitable estoppel prevents defendants from asserting the statute of limitations | Lancaster’s fraud and concealment (revealed during discovery) made timely foreclosure impossible; equitable principles should toll/estop the deadline | No wrongful or misleading conduct by the foreclosure defendants; plaintiff could have discovered nonpayment from its own records and offers no excuse for delay | Equitable tolling/estoppel inapplicable; dismissal affirmed |
Key Cases Cited
- Brown v. Division of Water Rights of Dep’t of Nat. Res., 228 P.3d 747 (Utah 2010) (motion-to-dismiss standard and view of pleadings)
- Lilley v. JP Morgan Chase, 317 P.3d 470 (Utah Ct. App. 2013) (standard of review for dismissal)
- Penrose v. Ross, 71 P.3d 631 (Utah Ct. App. 2003) (relation-back cannot be used to add new parties generally)
- Doxey-Layton Co. v. Clark, 548 P.2d 902 (Utah 1976) (adding new parties by amendment will not relate back because it asserts a new cause of action)
- DiMeo v. Nupetco Associates, LLC, 309 P.3d 251 (Utah Ct. App. 2013) (distinguishable; statute of limitations against some obligors does not automatically defeat foreclosure but did not address relation back)
- Garza v. Burnett, 321 P.3d 1104 (Utah 2013) (equitable tolling limited to exceptional circumstances; not to rescue those who slept on rights)
- Sittner v. Schriever, 22 P.3d 784 (Utah Ct. App. 2001) (equitable estoppel requires wrongful and misleading acts by the defendant)
- Federal Farm Mortg. Corp. v. Walker, 206 P.2d 146 (Utah 1949) (equitable estoppel elements in statute-of-limitations context)