M.J. v. Wisan
2016 UT 13
| Utah | 2016Background
- M.J., an FLDS Church member and UEP Trust beneficiary, alleges she was forced at age 14 to marry Allen Steed in 2001; Warren Jeffs (then leader of the FLDS Church and trustee of the UEP Trust) performed the ceremony and allegedly prevented her divorce and separate residence on Trust property.
- M.J. sued Warren Jeffs and Bruce R. Wisan (Special Fiduciary of the reformed UEP Trust) asserting torts and seeking direct and vicarious liability against the Trust (including respondeat superior and reverse veil-piercing theories).
- The UEP Trust had been reformed by a district court via cy pres to remove religious objectives; Snow, Christensen & Martineau v. Lindberg later characterized the reformed trust as effectively a different entity for certain attorney-client/ethical issues.
- The Trust moved for summary judgment on multiple grounds: (1) Snow bars successor liability; (2) M.J.’s mutual release with Steed released the Trust; (3) respondeat superior cannot apply; (4) reverse veil-piercing is unavailable. The district court denied summary judgment and the Trust appealed interlocutorily.
- The Utah Supreme Court affirmed denial of summary judgment except it held reverse veil-piercing could not be applied here; it limited Snow to its facts, explained interplay of Utah release statutes, upheld potential respondeat superior liability, but rejected reverse piercing given available remedies and adverse effects on innocent beneficiaries.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of Snow, Christensen on Trust liability for pre-reformation conduct | Snow shouldn't bar M.J.'s claims; she sued before Snow and relied on existing trust status | Snow made the reformed Trust a "new entity," so it cannot be liable for predecessor's torts | Snow is limited to its facts (attorney-client/disqualification context); it does not cut off suits against the reformed Trust for pre-reformation torts here |
| Effect of M.J.–Steed release | Release of Steed does not waive claims against Trust for independent wrongful acts by Jeffs | Release (no reservation) bars vicarious claims against the Trust under the Joint Obligations Act (JOA) | Distinguishes JOA vs LRA: release bars pass-along/respondeat superior claims (JOA) but not claims based on independent fault of Jeffs (LRA). Application to specific claims left to remand |
| Respondeat superior liability of Trust for Jeffs' conduct | Trust is vicariously liable because Jeffs acted within trustee role to advance Trust/FLDS doctrines (including arranging underage plural marriages) | Sexual misconduct is an independent course of conduct outside scope of trusteeship; equitable concerns preclude imposing liability on the Trust | A reasonable factfinder could conclude Jeffs acted within scope of his trustee role; respondeat superior may apply. Time/place motive limits relaxed; summary judgment denied on this ground |
| Reverse veil-piercing to reach Trust assets for Jeffs' personal acts | Reverse piercing appropriate because Trust functioned as Jeffs's alter ego and justice requires access to Trust assets | Reverse piercing is disfavored; even if elements met, remedy would harm innocent beneficiaries and is unnecessary because respondeat superior remedy exists | Utah recognizes reverse veil-piercing in principle but it is extraordinary; denied here because Trust is subject to respondeat superior and reverse piercing would unjustly impact innocent beneficiaries |
Key Cases Cited
- Fundamentalist Church of Jesus Christ of Latter-Day Saints v. Lindberg, 238 P.3d 1054 (Utah 2010) (upheld district court reformation of UEP Trust via cy pres and applied laches to bar FLDS challenge)
- Snow, Christensen & Martineau v. Lindberg, 299 P.3d 1058 (Utah 2013) (treated reformed trust as distinct for attorney-client conflict/disqualification issues; court here limits that opinion to its facts)
- Jeffs v. Stubbs, 970 P.2d 1234 (Utah 1998) (prior decision recognizing UEP Trust as private/trust for founders and subject to suit)
- Birkner v. Salt Lake County, 771 P.2d 1053 (Utah 1989) (held sexual misconduct by an employee was outside scope of employment as a matter of law; discussed here and refined)
- Peterson v. Coca-Cola USA, 48 P.3d 941 (Utah 2002) (discussed interplay of the Joint Obligations Act and the Liability Reform Act on effect of releases)
- Nelson ex rel. Hirschfeld v. Corp. of the Presiding Bishop, 935 P.2d 512 (Utah 1997) (example of respondeat superior claims falling under the JOA)
- Transamerica Cash Reserve, Inc. v. Dixie Power & Water, Inc., 789 P.2d 24 (Utah 1990) (discussed veil-piercing principles; reverse-piercing follows logically from direct piercing principles)