382 P.3d 682
Utah Ct. App.2016Background
- Thompson obtained a 2005 judgment against Wardley Corporation for unpaid commissions and later sued the Wardley parties (2007 Judge Medley case) alleging fraudulent conveyance and unjust enrichment after discovering asset transfers.
- Appellees moved for summary judgment asserting statute-of-limitations, claim preclusion, and lack of legal support; they also sought Rule 11 sanctions. Discovery was conducted but did not disclose a 2005 Assignment transferring potential Gilbert-lawsuit proceeds to Lynn Wardley.
- In November 2008 the court granted summary judgment for Appellees and awarded Rule 11 sanctions against Thompson and her counsel. Thompson later filed and lost an involuntary bankruptcy petition against Wardley Corporation.
- In 2013 Wardley Corporation settled a separate Gilbert suit, producing funds that led to a bankruptcy trustee settlement; during bankruptcy Thompson discovered the 2005 Assignment and related bank account transfers she alleges were concealed.
- Thompson filed a Rule 60(b) motion in March 2013 (about 4.5 years after summary judgment and 4 years after sanctions), alleging fraud, misrepresentation, and ongoing misconduct by Appellees and defense counsel and seeking to set aside the judgment and sanctions; the district court denied the motion as untimely and declined to impose sanctions for lack of jurisdiction.
Issues
| Issue | Thompson's Argument | Appellees' Argument | Held |
|---|---|---|---|
| Timeliness / characterization of Rule 60(b) motion | Motion should be treated under 60(b)(6) (extraordinary circumstances) not 60(b)(3); fraud was more than ordinary misconduct and ongoing | Substance of motion alleges fraud/misconduct falling under 60(b)(3) so 90-day/3-month time limit applies; motion was filed years late | Court: Motion substantively alleged fraud/misconduct under 60(b)(3); time limit applies; motion untimely and properly dismissed |
| Jurisdiction to impose sanctions after denying 60(b) relief | Court should impose sanctions on Appellees and counsel for discovery abuses and fraud in underlying case | Once 60(b) motion is dismissed as untimely, the court lacks jurisdiction to alter final judgment or impose sanctions tied to that judgment | Court: Lacking jurisdiction after dismissing untimely 60(b) motion, it properly denied sanctions motion |
| Alter-ego liability (piercing corporate veil) | Court should have found Lynn Wardley and Tramp used Wardley Corp. as alter egos to reach personal assets | Court lacked jurisdiction to revisit merits once 60(b) motion dismissed; summary judgment bars relitigation | Court: Declined to decide alter-ego claim for lack of jurisdiction in light of untimely 60(b) motion |
| Availability of independent action to set aside judgment for fraud on the court | (Implied) Thompson contends fraud may justify relief despite Rule 60(b) timing | Appellees argue Rule 60(b) procedure governs and time limits apply; independent action not briefed below | Court: Did not reach merits; notes Rule 60(b) does not limit an independent action but expresses no opinion on viability of such an action |
Key Cases Cited
- McGibbon v. Farmers Ins. Exch., 345 P.3d 550 (Utah 2015) (notice-of-appeal requirements)
- Utah Res. Int’l, Inc. v. Mark Techs. Corp., 342 P.3d 779 (Utah 2014) (standard of review for Rule 60(b) denial)
- Menzies v. Galetka, 150 P.3d 480 (Utah 2006) (limited circumstances where 60(b)(6) relief may be appropriate for counsel’s gross negligence)
- St. Pierre v. Edmonds, 645 P.2d 615 (Utah 1982) (motions to set aside judgments procured by fraud must be timely under Rule 60(b))
- Laub v. South Central Utah Tel. Ass’n, 657 P.2d 1304 (Utah 1982) (scope and cautious use of Rule 60(b)(6))
- Richins v. Delbert Chipman & Sons Co., 817 P.2d 382 (Utah Ct. App. 1991) (lack of jurisdiction when Rule 60(b) motion is untimely)