Dillon v. Southern Management Corp. Retirement Trust
326 P.3d 656
Utah2014Background
- SMCRT owns thousands of properties and funded loans originated by Level One and Blue Horseshoe, involving about 32 loans.
- Gramuglia loan of $500,000 in 2006 secured Park City and New York properties; Level One named beneficiary and later assigned to SMCRT, but assignment not recorded until 2008.
- Park City Property was sold to the Dillons in September 2007 for $250,000 payoff; Level One prepared a payoff letter listing $250,000 and FATCO paid that amount to Level One.
- SMCRT later investigated Level One and Rood for misappropriated funds and filed suit in Maryland against them in May 2008 (the Rood Action).
- In December 2009, as part of a Maryland settlement in the Gramuglia Action, SMCRT reconveyed the Gramuglia trust deed and received $300,000 from Gramuglia.
- In April 2011, the district court granted summary judgment for the Dillons on damages, including trebling under 57-1-38(3); the Utah Supreme Court upheld ratification of Rood’s actions, affirmed slander of title on alternative grounds, and remanded to recalculate trebled damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether SMCRT ratified Rood's actions | Dillons: ratification occurred via SMCRT suing Rood to recover $250,000. | SMCRT: no ratification or insufficient agency evidence. | SMCRT ratified; summary judgment affirmed on related claims. |
| Whether SMCRT slandered the Dillons' title | Dillons: SMCRT published false statements about the title with malice. | SMCRT: title was valid; malice disputed. | Slander of title established with actual knowledge of falsity; malice clarified. |
| Whether attorney fees could be trebled under 57-1-38(3) | Dillons: treble fees permitted for all damages including fees. | SMCRT: 3(a) does not include attorney fees; 3(b) controls; treble of fees improper. | Trebling attorney fees improper; remand to recalculate damages. |
| Whether Dillons are entitled to attorney fees under Trust Deed Act and 78B-5-826 | Dillons: entitled to fees under both provisions for prevailing party. | SMCRT: fees improperly awarded in part or based on non-contract theory. | Dillons entitled to fees under both Trust Deed Act and 78B-5-826; proper award affirmed except for treble portion. |
| Whether additional appellate attorney fees were warranted | Dillons: entitled to appellate fees if prevailing on appeal. | SMCRT: question is within general reasonableness; no special rule. | Dillons entitled to reasonable appellate fees. |
Key Cases Cited
- Bradshaw v. McBride, 649 P.2d 74 (Utah 1982) (ratification and agency principles cited)
- Zions First Nat’l Bank v. Clark Clinic Corp., 762 P.2d 1090 (Utah 1988) (premises on ratification and agency knowledge)
- Jones v. Mut. Creamery Co., 17 P.2d 256 (Utah 1932) (agency doctrines referenced)
- Howarth v. Ostergaard, 515 P.2d 442 (Utah 1973) (malice standard for slander of title)
- First Sec. Bank of Utah v. Banberry Crossing, 780 P.2d 1253 (Utah 1989) (malice and falsehood in slander of title context)
- Frailey v. McGarry, 211 P.2d 840 (Utah 1949) (timing and rescission considerations in fraud context)
- In re Reinhart, 2012 UT 82 (Utah) (statutory interpretation framework)