447 P.3d 89
Utah Ct. App.2019Background
- Janae Kirkham produced 2009–2011 tax returns during a divorce modification proceeding; the Widdisons used those returns to create pro forma returns and attempted to have the child exemption reassigned to Jamie Widdison.
- The modification commissioner and trial court ordered Kirkham to file amended returns and sign IRS Form 8332; she refused and was found in contempt; the clerk signed Form 8332 under rule 70 and Widdison filed his amended returns.
- Kirkham sued the Widdisons, HRB Tax Group (HRB), Grace Hansen, and Alpine Gardens alleging tortious conversion, civil conspiracy, invasion of privacy, UCSPA violations, IIED, and breach of fiduciary duty arising from preparation/use/filing of pro forma and amended returns.
- The trial court: granted 12(b)(6) dismissals of several claims (conversion, invasion of privacy, IIED, fiduciary duty as to some defendants); granted 12(c) judgment dismissing other claims against HRB (civil conspiracy, UCSPA claims); converted a 12(c) motion to summary judgment and dismissed remaining claims against the Widdisons and Alpine; disqualified Kirkham’s attorney; entered a protective order; and awarded HRB $61,464 in fees under Utah Code §78B-5-825.
- On appeal the court affirmed: (1) dismissals under 12(b)(6) and 12(c) or summary judgment because pleadings/record lacked lawful basis or proximate causation; (2) attorney disqualification under the appearance-of-impropriety test; (3) entry of a standard protective order; and (4) award of bad-faith attorney fees to HRB and fees on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 12(b)(6) dismissal of tortious conversion was erroneous | Kirkham: tax-return information is property convertible; defendants unlawfully used it | Defendants: intangible tax info is not convertible chattel or they were legally justified and did not deprive Kirkham of use | Affirmed — no conversion: intangible info not a chattel (and in any event defendants lawfully used produced documents) |
| Whether 12(b)(6) dismissal of invasion-of-privacy (misappropriation) was erroneous | Kirkham: tax info is private/confidential; misuse misappropriated her name/likeness | Defendants: no intrinsic value alleged; documents were produced without confidentiality designation and use related to litigation issue | Affirmed — claim failed for lack of intrinsic value and misuse not shown |
| Whether civil conspiracy/UCSPA claims survive (12(c)) | Kirkham: HRB participated in preparing/filing amended returns and conspired to harm her | HRB: it did not file amended returns and merely prepared pro forma returns; no unlawful overt act or proximate cause | Affirmed — HRB did not file returns; no proximate causation or unlawful overt act supporting conspiracy/UCSPA claims |
| Whether summary judgment on civil conspiracy against Widdisons was erroneous | Kirkham: pleadings suffice to show conspiracy and damages (seized refund, IRS burdens) | Widdisons: record lacks evidence that any defendant other than Kirkham filed returns; damages caused by Kirkham’s refusal to comply with court order | Affirmed — converted to summary judgment; Kirkham produced no admissible evidence creating a material factual dispute |
| Whether counsel should have been disqualified | Kirkham: disqualification improper and she was entitled to hearing | HRB: counsel obtained employment at HRB while representing Kirkham and took HRB documents, creating appearance of impropriety | Affirmed — Johnson two-prong test satisfied; reasonable possibility of impropriety and public confidence outweighed right to chosen counsel |
| Whether protective order and attorney-fee award under §78B-5-825 were erroneous | Kirkham: protective order impeded discovery; fee award excessive and entered without adequate process | HRB: protective order was standard; claims against HRB lacked factual basis and were brought in bad faith | Affirmed — protective order was proper; claims against HRB were without merit and brought in bad faith; trial court’s fee award sustained and appellate fees awarded to HRB |
Key Cases Cited
- Van Leeuwen v. Bank of Am. NA, 387 P.3d 521 (Utah Ct. App. 2016) (standard for review of Rule 12(b)(6) dismissal)
- Tuttle v. Olds, 155 P.3d 893 (Utah Ct. App. 2007) (Rule 12(c) standard mirrors Rule 12(b)(6))
- Franco v. Church of Jesus Christ of Latter-day Saints, 21 P.3d 198 (Utah 2001) (pleadings’ legal conclusions not accepted on motion to dismiss)
- Bennett v. Jones, Waldo, Holbrook & McDonough, 70 P.3d 17 (Utah 2003) (use of legal process not redressable by IIED claim)
- State v. Johnson, 823 P.2d 484 (Utah Ct. App. 1991) (two-prong test for disqualification for appearance of impropriety)
- Fadel v. Deseret First Credit Union, 405 P.3d 807 (Utah Ct. App. 2017) (bad-faith attorney-fee statute requires without-merit and bad-faith findings)