440 P.3d 767
Utah Ct. App.2019Background
- MIP bought property financed by four trust deeds: RCF (first priority, bridge loan), two other lenders (second and third), and VT Holdings (seller financing in fourth position).
- MIP defaulted. RCF sought reconveyances from the other lenders to take title in lieu of foreclosure; VT Holdings (Moak) signed and notarized a Request for Reconveyance and faxed it to RCF after receiving the document by email.
- RCF emailed the Request for Reconveyance to First American (title agent), which recorded a Full Reconveyance releasing VT Holdings’ fourth-position deed; First American mailed a copy to VT Holdings.
- VT Holdings later asked First American to rescind; First American recorded a Rescission. VT Holdings sued to quiet title, obtain damages, and foreclose; RCF counterclaimed to quiet title in its favor.
- At bench trial the court found the faxed/electronically transmitted Request for Reconveyance was effective because the parties had agreed to transact electronically; the court excluded VT Holdings’ untimely expert, denied a continuance, dismissed VT Holdings’ claims, and quieted title for RCF.
Issues
| Issue | Plaintiff's Argument (VT Holdings) | Defendant's Argument (RCF/First American) | Held |
|---|---|---|---|
| Whether reconveyance was effective when delivered electronically/faxed | Fax is not a "written" request under Utah law or the trust deed; VT Holdings never agreed to transact electronically and did not deliver an original | Parties’ conduct established agreement to transact electronically; UETA treats electronic records/signatures as valid where parties agree | Court held the parties agreed to conduct business electronically; the electronically transmitted/faxed request satisfied statutory and deed requirements, so reconveyance was effective |
| Whether district court abused discretion in excluding expert testimony and denying continuance | Excluding Newton was harmless because his report and deposition were available; continuance should have been granted to allow designation | VT Holdings failed to timely designate an expert; exclusion is an authorized sanction under Rule 26; continuance would reward the party’s discovery lapse | Court held exclusion and denial of continuance were within discretion: nondesignation was not harmless and VT Holdings offered no good cause |
Key Cases Cited
- Armed Forces Ins. Exch. v. Harrison, 70 P.3d 35 (Utah 2003) (standard of review for bench trial factual findings)
- Hidden Meadows Dev. Co. v. Mills, 590 P.2d 1244 (Utah 1979) (recorded lis pendens gives constructive notice and can remain potent after judgment)
- Baumann v. Kroger Co., 381 P.3d 1135 (Utah Ct. App. 2016) (district court has broad discretion to impose discovery sanctions under rule 26)
- Roundy v. Staley, 984 P.2d 404 (Utah Ct. App. 1999) (purpose of discovery rules is full disclosure to facilitate fair trials)
- Hardy v. Hardy, 776 P.2d 917 (Utah Ct. App. 1989) (trial court’s denial of continuance reviewed for abuse of discretion)