Interstate Income Properties, Inc. v. La Jolla Loans, Inc.
257 P.3d 1073
Utah Ct. App.2011Background
- Becomes Interstate by 1988, acquiring Pad A parcel used in BRB-5 projects; Busches are directors.
- 1997: Barbara Busch signs a quitclaim deed transferring Pad A from Interstate to BRB-5, before BRB-5 articles filed.
- 2006–2007: D. Gregory Hales forms Carlsbad Development, LLC, and Carlsbad Development II; 2007 Deed transfers Pad A from Interstate to Carlsbad I.
- La Jolla later deeds of trust pledge Pad A as collateral to secure a loan, recorded against Pad A.
- 2009: Interstate/BRB-5 sue to quiet title and petition to nullify the trust deeds as wrongful liens; trial court voids liens and awards costs; La Jolla appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of 1997 Deed to BRB-5 | 1997 Deed valid; Barbara Busch authority or preformation activity supports transfer. | 1997 Deed invalid; BRB-5 not formed; deed signed in non-representative capacity. | Findings vague; remand for explicit basis and reasoning. |
| Effect and validity of 2007 Deed to Carlsbad I | Hales acted as Interstate's agent; 2007 Deed valid. | If 1997 Deed invalid, 2007 Deed cannot validly convey. | Remand to clarify underlying factual and legal bases. |
| Whether the trust deeds are wrongful liens under Utah wrongful lien statute | Because Pad A never passed cleanly, liens are wrongful and void ab initio. | Liens valid to secure legitimate interests; challenge to conveyances does not automatically void liens. | Remand to establish the correct basis for the court's decision. |
| Adequacy of trial court's findings of fact and conclusions of law | Findings must show how evidence supports conclusions. | Trial court's findings were sufficient or need not be expanded. | Findings are inadequate; remand for detailed findings. |
| Preservation of error and impact on appellate review | Waiver should not bar review given error in findings. | Waiver occurred due to failure to preserve inadequacy objections. | Court notes waiver concerns but proceeds to remand for clarity. |
Key Cases Cited
- 633 E. 640 N. v. State, 942 P.2d 925 (Utah 1997) (finding on all material issues required; reversible error if omitted)
- In re K.F., 201 P.3d 985 (Utah 2009) (adequacy of findings should be addressed for meaningful review)
- 438 Main St. v. Easy Heat, Inc., 99 P.3d 801 (Utah 2004) (challenge to adequacy of factual findings must be raised to trial court)
- Armed Forces Ins. Exch. v. Harrison, 70 P.3d 35 (Utah 2003) (remand appropriate when basis of judgment unclear)
- Hill v. Estate of Allred, 216 P.3d 929 (Utah 2009) (need for explicit findings on material issues)
- Beggs v. Myton Canal & Irrigation Co., 179 P.2d 984 (Utah 1919) (critical date for capacity to hold title in transfer cases)
- Santaquin Mining Co. v. High Roller Mining Co., 71 P.77 (Utah 1903) (preformation activity considerations in deed validity)