505 P.3d 1127
Utah Ct. App.2022Background:
- John Edward Phillips’s testamentary JEP Trust split assets among three sons; Peter’s 25% share was to be held in a subtrust (the POP Trust) with his brother Johnny as original trustee and later Peter’s daughter Rachel Selby named successor trustee.
- Johnny died after John, leaving undistributed trust assets to Johnny’s estate (JCP Estate); Bank of Utah became successor trustee of the JEP Trust.
- The Bank marketed and sold ~47.75 acres of farm property from the JEP Trust; the sale was made to the JCP Estate after it matched/beat third-party offers, increasing the POP Trust’s cash by a small amount.
- Peter filed suit seeking to reverse the sale, remove the Bank, and obtain declarations; the Bank moved to dismiss for lack of standing, arguing Peter was not a JEP Trust beneficiary but a beneficiary of the POP Trust.
- The district court agreed Peter lacked standing and substituted Selby (trustee of the POP Trust) as the real party in interest; Selby later negotiated a court‑conditioned settlement approving the JEP Trust’s distribution to the JCP Estate and paying the POP Trust $30,000.
- Peter moved to intervene after the settlement was filed; the court denied intervention as untimely and approved the settlement. Peter appealed both the dismissal/substitution and the denial of intervention; the court of appeals affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Peter had standing to sue the JEP Trust or the trustee and whether substitution of Selby was required | Peter: he is a beneficiary of the JEP Trust (or retained rights) and therefore can challenge the sale/distributions | Bank/Selby: Peter is not a JEP Trust beneficiary but a beneficiary of the POP Trust; the trustee (Selby) is the real party in interest under Rule 17 | Court: Peter lacks standing; Selby, as POP Trust trustee, is the real party in interest and substitution was proper (no abuse of discretion) |
| Whether Peter could intervene after the parties executed a settlement approving the distribution | Peter: Selby lacked authority/willingness to prosecute POP Trust claims; settlement would impair his ability to pursue claims | Defendants: Peter had notice of the settlement and failed to act earlier; intervention motion was untimely and other Rule 24(a) elements not met | Court: Intervention denied as untimely; court did not abuse discretion in refusing intervention |
Key Cases Cited
- Southern Utah Wilderness All. v. San Juan County Comm’n, 484 P.3d 1160 (2021 UT 6) (motion-to-dismiss standing reviewed for correctness)
- Bradburn v. Alarm Prot. Tech., LLC, 449 P.3d 20 (2019 UT 33) (substitution rulings reviewed for abuse of discretion)
- Trapnell & Assocs., LLC v. Legacy Resorts, LLC, 469 P.3d 989 (2020 UT 44) (Rule 17 real-party-in-interest and substitution principles)
- Orlob v. Wasatch Med. Mgmt., 124 P.3d 269 (2005 UT App 430) (definition and role of the real party in interest)
- Hillcrest Inv. Co., LLC v. Utah Dep’t of Transp., 287 P.3d 427 (2012 UT App 256) (limited instances when a beneficiary may sue)
- Supernova Media, Inc. v. Pia Anderson Dorius Reynard & Moss, LLC, 297 P.3d 599 (2013 UT 7) (standards for intervention and timeliness)
- In re Questar Gas Co., 175 P.3d 545 (2007 UT 79) (upholding denial of untimely intervention)