392 P.3d 872
Utah Ct. App.2017Background
- Rehn retained attorney Steve S. Christensen for divorce-related work in 1996; no real property was at issue in the divorce, and Rehn did not purchase the Park City residence (the Property) until 2000.
- Rehn signed a 1997 Retainer Agreement stating the firm was "entitled to a lien" on residence or other property "as permitted" by Utah law and including a fee-shifting clause for actions to enforce the agreement.
- In 2001 Christensen recorded an "Amended Notice of Attorney Lien" against the Property that (according to the district court) contained multiple false or misleading statements and cited statutory authority incorrectly; Christensen did not notify Rehn when recording the lien.
- Rehn filed Chapter 7 bankruptcy in 2004 listing Christensen as a creditor; the debt was discharged but the lien was not released. When Rehn sought to sell the Property in 2012 he discovered the lien still encumbered title and sued for slander of title, wrongful lien, declaratory relief, and injunctive relief.
- The district court granted Rehn summary judgment on the first two elements of slander of title (publication and falsity), tried the remaining elements (malice and damages), and the jury awarded Rehn $77,752.29 (largely attorney fees to clear title). The court denied Rehn’s requests for additional attorney fees under the Retainer or the Reciprocal Fee Statute and declined an equitable fee award; Christensen’s motions for directed verdict and post-trial relief were denied.
- Both parties appealed; the Utah Court of Appeals affirmed the district court in all respects.
Issues
| Issue | Plaintiff's Argument (Rehn) | Defendant's Argument (Christensen) | Held |
|---|---|---|---|
| Whether Reciprocal Fee Statute (Utah Code §78B-5-826) entitles Rehn to fees for prosecuting slander of title | Rehn: Christensen’s reliance on the Retainer (which contains a fee clause) to defend/counterclaim triggers reciprocal fee-shifting | Christensen: The slander claim was not "based upon" the Retainer; only his counterclaim relied on the contract | Court: Denied fees — the slander action was not based on a writing with an enforceable fee clause, so the statute does not apply |
| Whether the court abused discretion by denying equitable attorney fees for bad-faith conduct | Rehn: Christensen acted maliciously toward his own client (false lien, nondisclosure) warranting equitable fees | Christensen: No abuse; jury-awarded damages already included fees to clear title; debt underlying lien was real | Court: Affirmed — district court reasonably declined to augment the jury award with additional equitable fees |
| Whether summary judgment correctly found publication and falsity for slander of title | Rehn: The lien contained numerous false statements and was not supported by any valid lien right | Christensen: He had a statutory attorney’s lien or consensual lien per the Retainer, so recording was not slanderous | Court: Affirmed — no attorney’s lien (Property not "subject of or connected with" the representation) and no consensual lien created by the Retainer; lien statements were false |
| Whether directed verdict on malice should have been granted | Rehn: Evidence supports implied or actual malice (multiple knowingly false statements) | Christensen: No evidence he actually knew the lien was invalid; errors were scrivener’s mistakes | Court: Denied directed verdict — reasonable minds could infer malice from the nature and number of false statements |
| Whether JNOV/new trial to reduce damages should have been granted | Rehn: Attorney fees awarded were reasonably necessary to remove the cloud; evidence supported amounts | Christensen: Fees were not reasonably necessary; some fees per se not recoverable | Court: Denied post-trial relief — jury was properly instructed and there was competent evidence supporting the fee damages award |
Key Cases Cited
- Hughes v. Cafferty, 89 P.3d 148 (Utah 2004) (courts may award equitable attorney fees in extraordinary cases involving bad faith)
- Utah Public Service Commission v. Stewart, 885 P.2d 759 (Utah 1994) (bad-faith conduct can justify equitable fee awards)
- Neff v. Neff, 247 P.3d 380 (Utah 2011) (attorney fees may be recoverable as special damages in slander of title if reasonably necessary to remove the disparagement)
- Dillon v. Southern Management Corp. Retirement Trust, 326 P.3d 656 (Utah 2014) (malice for slander of title requires knowledge of falsity but may be implied under certain circumstances)
- Hooban v. Unicity International Inc., 285 P.3d 766 (Utah 2012) (interpretation of Reciprocal Fee Statute; fee-shifting applies when the civil action is based upon a writing that permits recovery of fees)