Iota, LLC v. Davco Management Co.
284 P.3d 681
| Utah Ct. App. | 2012Background
- In 2005, Daveo entered into real estate purchase contracts with Iota and California Benefit for Casa Sonoma and Casa Grande, but financing failed.
- In 2006, new owner-financed purchase agreements were signed; Daveo issued promissory notes totaling $1,841,395 to Iota and $2,411,596 to California Benefit, with maturity dates in December 2007 and security via trust deeds.
- Daveo allegedly received financial statements for 2005–2006 but claimed they were inaccurate or incomplete, and that further 2006 information was not provided.
- Fisher attempted to obtain financing; denial occurred in February 2008 due to income seasoning, appraisal, and prior foreclosures.
- Daveo conveyed Casa Sonoma to Fisher’s father without consent and later reconveyed; a $500,000 encumbrance was recorded to Fab 5 Management without consent.
- After maturity, Plaintiffs sought extension negotiations; Daveo stopped payments and then tenants’ rents were collected by Daveo despite ongoing disputes, leading to an Ex Parte Order directing deposits with the court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the oral modification barred by statute of frauds but may be saved by part performance? | Daveo contends modification unenforceable; Plaintiffs argue part performance defeats fraud defense. | Daveo argues oral extension should be enforceable via part performance. | Statute of frauds bars modification; no valid part performance. |
| Did equitable estoppel bar Plaintiffs' claims based on alleged non-disclosures and extension promises? | Daveo claims reliance on Plaintiffs’ promises and information defenses. | Plaintiffs argue no injury and lack of detrimental reliance. | Equitable estoppel rejected; no injury shown. |
| Did the trial court lack jurisdiction to hold Daveo and Fisher in contempt due to a defective Ex Parte Order? | Contempt based on Ex Parte Order; proper notice and affidavit issues aside, contempt valid. | Ex Parte Order invalid; lack of affidavit and due process issues. | Contempt ruling reversed for lack of jurisdiction; remand on contempt only. |
| Was the Ex Parte Order harmless error and did rule 67 influence outcome? | Any error was harmless given lack of prejudice on main issues. | Rule 67 noncompliance could be problematic; may affect contempt outcome. | Harmless error; collateral bar concerns acknowledged; guidance limited to remand. |
Key Cases Cited
- Houskeeper v. State, 197 P.3d 636 (Utah 2008) (clear error standard for findings of fact)
- Spears v. Warr, 44 P.3d 742 (Utah 2002) (statute of frauds and part performance considerations)
- Tangren Family Trust ex rel. Tangren v. Tangren, 182 P.3d 326 (Utah 2008) (cases on part performance and contract modifications)
- Living Scriptures, Inc. v. Kudlik, 890 P.2d 7 (Utah Ct.App.1995) (mixed questions of law and fact in waiver contexts)
- State v. Mullins, 116 P.3d 374 (Utah 2005) (jurisdiction and contempt principles)
- Edwards v. Powder Mountain Water & Sewer, 214 P.3d 120 (Utah Ct.App.2009) (rule interpretation and harmless error analysis)
- Crank v. Utah Judicial Council, 20 P.3d 307 (Utah 2001) (contempt and judicial officer considerations)
- Maness v. Meyers, 419 U.S. 449 (Supreme Court 1975) (collateral bar doctrine and respect for court orders)