469 P.3d 879
Utah2020Background
- Jones worked on MPTO Fen‑Phen litigation; MPTO deposited contested fee payments in its trust account and in Dec 2006 distributed substantial sums to partners and others while Jones had sued for a larger share.
- Jones sued (2006); earlier appeal (Jones I) rejected some claims but held Jones was entitled to a jury on quantum meruit/unjust enrichment (2015 UT 60).
- 2017 jury returned a $647,090 verdict for Jones on quantum meruit; the district court had directed verdict for MPTO on breach of fiduciary duty, fraudulent transfer, and punitive damages and denied a requested constructive trust.
- After the verdict Mackey and Price formed Mackey Price, LLC (and later Mackey Price Law); Jones sought to substitute/join the LLC under Utah R. Civ. P. 21/25; the district court added the LLC to the judgment without an evidentiary determination of successor status.
- The district court refused to entertain Jones’s new post‑judgment alter‑ego and statutory claims against individuals/entities under Brigham Young Univ. v. Tremco, reasoning such claims require new actions; appeals and cross‑appeals ensued.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Directed verdict on fiduciary duty | Jones: MPTO’s placement of funds in a trust account and Rule 1.15(e) created a trustee‑beneficiary fiduciary duty | MPTO: no manifestation of intent to create a trust; professional‑conduct rules do not create civil duties | Affirmed — no fiduciary duty (directed verdict proper) |
| Fraudulent transfer (UT Fraudulent Transfer Act) | Jones: transfers to insiders, timing, lack of transparent calculation show actual intent to hinder/delay recovery | MPTO: transfers were to avoid tax liability and to pay creditors; no intent to defraud | Reversed — mixed motives suffice; plaintiff must prove intent by clear and convincing evidence under pre‑2017 statute; record supported jury submission |
| Punitive damages | Jones: willful/reckless fraudulent conduct warrants punitive damages | MPTO: no evidence of malice or willful intent | Reversed dismissal — punitive claim reinstated (tied to fraudulent transfer claim) |
| Constructive trust | Jones: equitable constructive trust may be imposed to aid collection of a legal judgment | MPTO: Jones I precluded equitable relief after claiming only legal damages | Reversed — Jones I did not categorically bar constructive trust; remand for district court to consider prerequisites |
| Admissibility of expert Hansen (quantum meruit) | Jones: Hansen’s report and deposition disclosed his methodology and opinions sufficiently | MPTO: trial testimony exceeded Rule 26 disclosures and relied on improper materials; some opinions conflict with prior rulings | Affirmed — district court did not abuse discretion; disclosures adequate and testimony not contrary to law/facts |
| Substitution/joinder of Mackey Price, LLC (Rules 21/25) and post‑verdict jurisdiction | Jones: rule 25 allows substitution of successor in interest post‑verdict via service under Rule 4; district court retained jurisdiction before final judgment | Mackey Price, LLC: district court lost jurisdiction once a notice of appeal was filed; LLC not properly heard on successor status | Affirmed in part and reversed in part — court had authority to consider substitution before final judgment, but erred by defaulting the LLC; LLC must be given opportunity to contest successor status on the merits |
| Post‑judgment assertion of new claims (alter ego, statutory violations) | Jones: may add individuals/entities or new claims via post‑judgment proceedings and successor/substitution mechanisms | MPTO/Mackey Price: such new substantive claims require a fresh action under the Rules; Tremco bars asserting those in summary post‑judgment collection proceedings | Affirmed — Tremco controls; new substantive claims must be brought by new suit (cannot be litigated in abbreviated post‑judgment proceedings) |
Key Cases Cited
- Jones v. Mackey Price Thompson & Ostler, 355 P.3d 1000 (Utah 2015) (Jones I) (plaintiff entitled to jury on quantum meruit; prior rulings discussed)
- Brigham Young Univ. v. Tremco Consultants, Inc., 156 P.3d 782 (Utah 2007) (post‑judgment execution cannot be used to assert new alter‑ego or fraudulent‑transfer claims; those require ordinary civil actions)
- State v. Clark, 251 P.3d 829 (Utah 2011) (law applicable is that in effect at time of the regulated event; guidance on substantive vs. procedural changes)
- Garver v. Rosenberg, 347 P.3d 380 (Utah 2014) (notice of appeal transfers jurisdiction to appellate court subject to exceptions; premature notices ineffective)
- Butler v. Wilkinson, 740 P.2d 1244 (Utah 1987) (fraudulent‑conveyance/intent requires actual fraudulent intent)
- Wilcox v. Anchor Wate, Co., 164 P.3d 353 (Utah 2007) (factors for considering imposition of constructive trust)
- Build, Inc. v. Utah Dep’t of Transp., 428 P.3d 995 (Utah 2018) (successor judge may revisit nonfinal prior rulings)
- Northgate Vill. Dev., LC v. City of Orem, 450 P.3d 1117 (Utah 2019) (abuse‑of‑discretion standard for expert‑testimony admissibility)