Muddy Boys, Inc. v. Dep't of Commerce
440 P.3d 741
Utah Ct. App.2019Background
- Muddy Boys, a drywall contractor, subcontracted work to ITY2, which falsely represented it was licensed; DOPL charged Muddy Boys with hiring an unlicensed subcontractor on 58 projects and sought fines and probation.
- DOPL originally treated the violations as strict liability and sought $2,000 per occurrence (total $116,000); Muddy Boys successfully litigated that DOPL must prove intent/recklessness and that these were first-time violations.
- After a multi-day administrative hearing, DOPL moved to dismiss with prejudice; the ALJ granted the dismissal and Muddy Boys sought recovery of over $80,000 in attorney fees and costs.
- DOPL opposed fee recovery as a matter of law; the DOPL Director denied fees, reasoning the statute authorizes only a “court” to award fees (not administrative tribunals).
- On appeal, the Department affirmed denial but on alternate grounds: the fee provision applies only to subsection (5) enforcement actions (i.e., collection actions in district court), not subsection (4) administrative proceedings.
- The Utah Court of Appeals affirmed the Department, holding that “court” in the statute refers to judicial courts (part of the judicial branch with judicial powers), so administrative agencies cannot award fees under the provision.
Issues
| Issue | Muddy Boys' Argument | DOPL/Department's Argument | Held |
|---|---|---|---|
| Whether prevailing party in an administrative enforcement proceeding may recover attorney fees under Utah Code §58-55-503(5)(d) | §58-55-503(5)(d) authorizes fees in “an action brought to enforce the provisions of this section” and uses “court” broadly to include administrative tribunals | The statute authorizes fee awards by courts only; “court” means judicial courts (not administrative tribunals), so fees are not available in administrative proceedings | Court holds “court” means judicial courts with full judicial power; administrative tribunals may not award fees under §58-55-503(5)(d) |
Key Cases Cited
- R.T. Nielson Co. v. Cook, 40 P.3d 1119 (Utah 2002) (statutory authorization required for attorney fee awards)
- Frito-Lay v. Utah Labor Commission, 222 P.3d 55 (Utah 2009) (administrative tribunals are not “courts of the state” for purposes of applying judicial rules)
- Chambers v. NASCO, Inc., 501 U.S. 32 (U.S. 1991) (courts possess inherent contempt powers)
- Baumgaertel v. Salt Lake County, 560 P.2d 325 (Utah 1977) (term “court” connotes institutions vested with judicial power)
- Sierra Club v. Two Elk Generation Partners, Ltd. P’ship, 646 F.3d 1258 (10th Cir. 2011) (federal courts generally treat administrative tribunals as distinct from “courts” for statutory purposes)