416 P.3d 352
Utah2017Background
- In 2003 Palmer sold two commercial parcels to JDJ; JDJ took two loans secured by trust deeds—First National (first position) and Palmer (second position).
- First National re-recorded a deed in 2004 based on an erroneous title report, inadvertently appearing to place Palmer first; court later equitably reinstated First National’s original priority.
- The district court granted First National the right to foreclose; Palmer appealed the priority ruling but did not obtain a stay or record a lis pendens.
- First National held a trustee’s sale on August 8, 2011; MAA Prospector purchased Parcel 1 at that sale with actual knowledge of Palmer’s pending appeal.
- The court of appeals later reversed the judgment authorizing the sale; Palmer then attempted to enforce his trust deed, prompting MAA Prospector to seek quiet title and an injunction.
- District court granted summary judgment to MAA Prospector (finding the foreclosure extinguished Palmer’s interest) and awarded attorney fees; Palmer appealed both rulings.
Issues
| Issue | Palmer’s Argument | MAA Prospector’s Argument | Held |
|---|---|---|---|
| Whether a third-party purchaser who has actual notice of an appeal takes subject to the appeal’s outcome when appellant did not obtain a stay or record a lis pendens | Actual notice should bind purchaser to appeal outcome | Appellant who fails to obtain a stay or record a lis pendens has no recourse against lawful third-party purchasers, even with actual notice | Court held purchaser’s title is not subject to the appeal; affirmed summary judgment for MAA Prospector |
| Whether MAA Prospector is entitled to attorney fees under the contract-based reciprocal fee statute | Palmer: fee clause is between Palmer and JDJ; no privity to recover from/against MAA Prospector; Hooban supports narrow privity requirement | MAA Prospector: contract allows at least one party to recover fees, triggering the statute; similar precedent supports awarding fees to prevailing party | Court awarded fees to MAA Prospector, applying controlling precedent (Insight Assets) |
| Whether the motion for attorney fees was timely after summary judgment | Palmer: Meadowbrook requires fee motion before summary judgment and oral reservations are insufficient | MAA Prospector: district court reserved fees in summary judgment order and the motion was filed before final judgment | Motion was timely; fee award affirmed |
| Whether precedent (Insight Assets) should be overruled or distinguished | Palmer: statutory text and Hooban argue against fee award here; asked for reversal | MAA Prospector: Insight Assets is controlling and on point | Court declined to overrule or distinguish Insight Assets and followed it |
Key Cases Cited
- Hooban v. Unicity International, Inc., 2012 UT 40, 285 P.3d 766 (discusses privity and contractual fee awards)
- Insight Assets, Inc. v. Farias, 2013 UT 47, 321 P.3d 1021 (held a party may recover fees under a contract clause even where purchaser at foreclosure is involved; treated as controlling here)
- Meadowbrook, LLC v. Flower, 959 P.2d 115 (Utah 1998) (timeliness standard for fee motions; requires filing before final judgment unless court orders otherwise)
- 2DP Blanding, LLC v. Palmer, 2017 UT 62 (affirmed rule that appellants who do not obtain a stay or record lis pendens have no recourse against lawful third-party purchasers)