437 P.3d 593
Utah Ct. App.2018Background
- Bonnie and David Silva divorced in 2010; the decree allocated multiple real properties including the Dennis Drive Property to David and required quitclaim deeds.
- Bonnie had earlier transferred properties into a family trust (Consolidated Trust) and did not effectively convey the Dennis Drive Property to David; a contempt judgment in the divorce action awarded David approximately $219,000 if Bonnie failed to convey within 30 days.
- David sued Bonnie and her daughters for fraudulent conveyance and to quiet title; the court authorized alternative service by publication after David represented he could not locate Bonnie. Bonnie did not answer and default proceedings followed.
- The district court entered default judgment (finding fraudulent conveyance and attaching the contempt judgment to Bonnie’s properties), awarded nearly $50,000 in fees/costs, and a writ of execution issued on three properties, including Dennis Drive.
- After counsel appeared for Bonnie, she moved under Utah R. Civ. P. 60(b)(1) to set aside the default for excusable neglect and later sought to void the sheriff’s sale; the district court denied these motions and Bonnie appealed.
Issues
| Issue | Plaintiff's Argument (David) | Defendant's Argument (Bonnie) | Held |
|---|---|---|---|
| Whether the default judgment should be set aside under Utah R. Civ. P. 60(b)(1) (excusable neglect) | Service by alternative methods was properly authorized and default was valid; no basis to vacate | Bonnie alleged she lacked actual notice, David had other means to contact her (emails, phone, family), and her unrefuted affidavits show excusable neglect | Court of Appeals vacated and remanded: district court abused its discretion by failing to analyze excusable neglect—must evaluate fairness and Bonnie’s unrefuted assertions |
| Adequacy of service of process for the underlying action | Alternative service by publication and additional mailed/personal attempts satisfied rules and due process | Service was insufficient in practice; David had means to give actual notice; procedural adequacy bears on excusable neglect analysis | Court remanded because district court treated technical adequacy as dispositive and did not assess whether lack of actual notice justified vacatur |
| Whether the sheriff’s sale should be set aside for notice irregularities and sale irregularities (bundling parcels; grossly inadequate price) | Sale notices and procedures were proper; sale valid | Asserted defective notice (service on counsel required) and sale of multiple parcels together produced grossly inadequate combined price | Court vacated denial and remanded for further analysis: district court erred by concluding service on counsel was unnecessary and failed to address Bonnie’s other sale irregularity arguments |
| Entitlement to attorney fees on appeal | David asserts fees awarded below support appellate fees; otherwise no equitable basis | Bonnie seeks fees as prevailing appellant in part | Court denied both parties’ requests for appellate fees; no statutory/contractual basis and equity did not justify fees |
Key Cases Cited
- Utah Res. Int’l, Inc. v. Mark Techs. Corp., 342 P.3d 779 (Utah 2014) (standard of review for Rule 60(b) denials)
- Asset Acceptance LLC v. Stocks, 376 P.3d 322 (Utah Ct. App. 2016) (Rule 60(b) provides mechanism for relief from final order)
- Menzies v. Galetka, 150 P.3d 480 (Utah 2006) (requirements to set aside default: timeliness, basis under Rule 60(b), meritorious defense)
- Jones v. Layton/Okland, 214 P.3d 859 (Utah 2009) (excusable neglect is flexible, equitable inquiry focused on fundamental fairness)
- Arbogast Family Trust v. River Crossings, LLC, 191 P.3d 39 (Utah Ct. App. 2008) (abuse of discretion to refuse to vacate default where reasonable justification exists)
- Pyper v. Bond, 258 P.3d 575 (Utah 2011) (standards for setting aside sheriff’s sale: grossly inadequate price plus irregularities contributing to inadequacy)
- Meguerditchian v. Smith, 284 P.3d 658 (Utah Ct. App. 2012) (standard of review for sheriff’s sale set-aside)
- Jordan Constr., Inc. v. Federal Nat’l Mortgage Ass’n, 408 P.3d 296 (Utah 2017) (prevailing party below who prevails on appeal may recover appellate fees)
- Stewart v. Utah Pub. Serv. Comm’n, 885 P.2d 759 (Utah 1994) (court’s inherent equitable power to award attorney fees in bad-faith or oppressive cases)