STEPHANIE D. CHARD AND TRAINING TABLE RESTAURANTS INC., Appellants and Cross-appellees, υ. KENT J. CHARD, PETER M. ENNENGA, DON SORENSEN, TRAINING TABLE LAND AND HOLDING LC, AND TT THREE LC, Appellees and Cross-appellants THOMAS E. LOWE, LOWE HUTCHINSON & COTTINGHAM PC, Appellees.
No. 20180585-CA
THE UTAH COURT OF APPEALS
Filed December 19, 2019
2019 UT App 209
JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGES JILL M. POHLMAN and DIANA HAGEN concurred.
Third District Court, Salt Lake Department The Honorable Robert P. Faust No. 160903525
Byron G. Martin and Steven M. Edmonds, Attorneys for Appellees and Cross-appellants Thomas E. Lowe and Lowe Hutchison & Cottingham PC
Thomas R. Barton, Alex B. Leeman, and Mark O. VanWagoner, Attorneys for Appellees and Cross-appellants Kent J. Chard, Peter M. Ennenga, Don Sorensen, Training Table Land and Holding LC, and TT Three LC
¶1 Since December 2016, Utahns have no longer been able to order a hearty plate of chili cheese fries from a restaurant table telephone. This unfortunate circumstance resulted from the sudden closure of the Training Table restaurants, which had been open for business along the Wasatch Front since the late 1970s. The closure, in turn, was the result of a bitter intra-family dispute between a father and a daughter, both of whom owned a 50% interest in the restaurants. The dispute between them eventually reached the courts, when Stephanie D. Chard sued her father Kent J. Chard and various related individuals and entities. Kent1 responded by filing a counterclaim, as well as causing two of his companies—which owned the land underneath the restaurants—to file a separate complaint seeking to evict the restaurants for nonpayment of rent.
¶2 The landlord entities prevailed in the eviction proceedings, resulting in the closure of the restaurants. Later, the district court, on summary judgment, dismissed all of Stephanie‘s claims against Kent and the other defendants, as well as all the counterclaims filed by Kent and the landlord entities. Both sides now appeal, and seek reinstatement of some of their dismissed claims. For the reasons set forth below, we affirm the dismissal of many of the claims, but reverse the district court‘s dismissal of a few claims, at least one on each side, and remand for further proceedings.
¶3 Kent, along with three other partners, founded the Training Table restaurant chain in 1977, and operated the restaurants through Training Table Restaurants Inc. (TTR). While TTR, at various times, had as many as ten restaurants, it did not own the real estate that any of the restaurants occupied. The underlying properties were owned by two limited liability companies—TT Three LC (TT3) and Training Table Land and Holding Company LC (TTL&H) (collectively, Landlords)—formed by Kent and in which Kent owned a significant interest.3 Over the years, and certainly during all relevant times, Landlords realized most of their income from the rents that TTR paid them, and Kent drew the bulk of his personal income from distributions from Landlords.
¶4 Because the restaurants were the family business, Stephanie had grown up around them, even working part-time for the business when she was a teenager, and had grown quite familiar with the restaurants, their locations, and their operation. In November 2012, Stephanie was a recent college graduate
¶5 At that point in time, Kent was TTR‘s president, and TTR‘s board of directors consisted of Stephanie, Kent, Peter M. Ennenga, and Don Sorensen. Both Ennenga and Sorensen were longtime friends of and advisers to the Chard family, with Ennenga acting as a legal and business advisor, and Sorensen serving as the family accountant. Ennenga had been a licensed attorney until he was disbarred in 2001; after that, he continued to advise the Chard family, often through his new position as a paralegal for the law firm Lowe Hutchinson & Cottingham PC (LHC). For many years, LHC had served as TTR‘s legal counsel, performing extensive work on Kent‘s and TTR‘s behalf. The parties agree that LHC and Ennenga represented Kent during the 2012 purchase transaction, but the parties disagree as to whether Ennenga also represented Stephanie for the purposes of that transaction.
¶6 On November 16, 2012, shortly after Stephanie acquired her interest in the restaurants, TTR‘s board of directors held a meeting to discuss certain changes to the restaurant leases that Landlords had proposed, including an increase in the monthly rents that TTR would owe to Landlords. Across TTR‘s five then-operating locations, the proposal would increase TTR‘s monthly rent from $29,000 per month to $30,500 per month. All four members of TTR‘s board participated in the meeting, including Stephanie and Kent. The decision to raise the rent was based on a recent appraisal of Landlords’ properties, and motivated by Landlords’ desire to keep the rent consistent with nearby
¶7 Thereafter, TTR paid the increased monthly rent to Landlords, without complaint, for about three years. During this time, Kent continued to serve as TTR‘s president, and both Kent and Stephanie continued to serve as members of its board of directors. In 2014, however, at Stephanie‘s request, she was elevated to TTR‘s chief operating officer, and assumed a greater role in the company‘s day-to-day operations. A few months later, in January 2015, Kent stepped down as TTR‘s president, and Stephanie took his place, thereby assuming complete control of TTR‘s operations.
¶8 Soon after taking operational control of TTR, Stephanie began consulting with a different law firm (New Firm) regarding her family‘s overall estate plan. Initially, New Firm represented the Chard family collectively, and also provided corporate advice to TTR through Stephanie. In December 2015, New Firm sent a letter to Kent recommending a business succession plan (the Succession Plan). Under the terms of the proposed Succession Plan, Stephanie would purchase the remaining interests in TTR and Landlords on an installment basis, thus allowing Kent an income and eventually giving Stephanie complete ownership and control of not only TTR, but of Landlords as well. New Firm proposed enacting the Succession Plan effective January 1, 2016.
¶9 After conferring with Ennenga and Sorensen, Kent determined that the Succession Plan was not in his best interest, and therefore rejected it. In response, Stephanie began exploring with New Firm how to put “pressure” on Kent to accept her
¶10 Stephanie knew that her strategy might not be well received, because Ennenga and Sorensen had been Kent‘s friends and advisors for several decades. And, as it happened, Kent did not respond well to Stephanie‘s demand: shortly after learning of it, Kent attempted suicide and was hospitalized for about two weeks. While Kent was recovering, Stephanie visited Kent in the hospital and brought documents for Kent to sign to effectuate the removal of Ennenga and Sorensen from the board of TTR. Kent refused to sign the documents.
¶11 In addition to sending a demand letter, Stephanie also directed TTR to begin withholding rent payments to Landlords, asserting generally that the rent amounts that had been approved in November 2012 were unfairly high. Specifically, she claimed that she had purchased her interest in TTR without meaningful legal representation, and that the Addenda had not been drafted and reviewed by an attorney prior to execution. Stephanie again floated the Succession Plan as a potential solution to these problems, and indicated that TTR would continue to withhold rent payments until the issues identified in the Succession Plan were resolved.
¶12 Kent was not opposed, in principle, to selling the business entities to Stephanie, but was of the view that the price Stephanie was offering was too low. After negotiations with Stephanie broke down, Landlords (at Kent‘s direction) began shopping the properties to third parties. A few weeks later, after
¶13 Stephanie‘s lawsuit, as eventually amended, included claims against not only Kent, but also against Landlords, Ennenga, Sorensen, and LHC, and included claims personal to Stephanie, as well as derivative claims she purported to assert on behalf of TTR. The causes of action included breach of fiduciary duty, quiet title, failure to hold court-ordered shareholders meetings, unjust enrichment, judicial removal of directors, legal malpractice, securities fraud, common law fraud, and negligent misrepresentation. Though the claims varied in type, the underlying grievance motivating most of the claims was the asserted unfairness of the rental rates agreed upon in November 2012. In addition, soon after filing her lawsuit, Stephanie recorded a series of lis pendens against Landlords’ properties.
¶14 Kent, Landlords, Ennenga, Sorensen, and LHC responded to Stephanie‘s lawsuit by moving to dismiss her claims; in addition, Kent and Landlords filed counterclaims of their own for, among other things, wrongful lien, breach of fiduciary duty, and infliction of emotional distress. Landlords also asked the court to release the lis pendens, which were holding up the sale of the properties to the third-party buyer. Following a hearing in September 2016, the district court dismissed Stephanie‘s derivative claims, and ordered the lis pendens to be released. In addition, the court dismissed the malpractice claim against Ennenga, reasoning that a legal malpractice claim could not lie against a person who was not a licensed attorney.
¶15 Meanwhile, TTR (at Stephanie‘s direction) continued to withhold rent from Landlords with regard to three of the five then-operating restaurants. In October 2016, after the district court‘s ruling on the initial motions, Landlords filed a separate
¶16 Eventually, the district court consolidated Landlords’ eviction complaint into the main action brought by Stephanie. However, the court kept the eviction action separate for purposes of discovery and trial, limiting the scope of the eviction action to resolution of the issue of possession of the properties as well as damages related to Kent‘s unlawful detainer claim against TTR. But because one of TTR‘s main defenses to the eviction action was the unfairness of the rent amounts, the district court believed that the fairness of the rents was at issue in the eviction action as well as in the main case, noting that litigation of that issue in connection with the eviction part of the case could very well have preclusive effect on the remainder of the case. Indeed, the court stated that a “determination on the rent values and the validity of these leases” in Landlords’ favor in the eviction proceedings would “eliminate” some of Stephanie‘s claims in the main case, and that she would not “be able to raise and bring up again” those claims in the main case.
¶17 The eviction portion of the litigation was ready for trial first, and the court scheduled a three-day trial on those issues to take place in January 2017. On the first day of trial, however, TTR announced that it was prepared to stipulate to judgment in the eviction portion of the case. In the process of discussing the stipulated judgment, the district court expressed its view that, by stipulating to a judgment in the eviction case, TTR was in effect conceding “that the leases were not inappropriate,” and that it would not later be allowed to argue to the contrary in the main case. In response, TTR‘s counsel (who also represented Stephanie in the main case) stated that he was “in agreement with that,” because “all of the defenses that are asserted . . . have been adjudicated and decided if judgment . . . is entered” in the
¶18 While the eviction piece of the lawsuit was being litigated, the parties conducted discovery in the main action. While all parties submitted initial disclosures, as required by
¶19 Stephanie later sent Kent some interrogatories regarding damages, and Kent responded in March 2017, some five months before the fact discovery cutoff date. Kent‘s responses
¶20 In August 2017, on or around the day fact discovery ended, both parties filed supplemental disclosures. Kent‘s supplement included some updated dollar figures for some categories of damages, but in the main provided essentially the same information already set forth in his March 2017 discovery responses. Stephanie‘s supplement, by contrast, provided a lot of information that had never before been disclosed, including categories of damages and computation methodologies.
¶21 While Stephanie‘s initial disclosures were quite spare with regard to damages, those disclosures identified a number of witnesses who had “information supporting [her] claims and defenses,” and whom she “expect[ed] to call in [her] case in chief” at trial. Two of the witnesses she listed were attorneys at New Firm that she had consulted for advice not only regarding TTR but also regarding issues unique to her. She disclosed that one of the attorneys had “knowledge concerning matters in the pleadings, including but not limited to TTR and the damages caused to TTR by defendants’ actions.” She disclosed that the other attorney had “knowledge concerning matters in the pleadings, including but not limited to Ennenga‘s breaches of duty to TTR and Stephanie.”
¶22 In response to these broad disclosures that Stephanie‘s own attorneys had relevant information about “matters in the pleadings” and that Stephanie intended to call them as trial witnesses, Kent issued subpoenas to the attorneys and asked to
¶23 About a year later, after discovery was complete, Stephanie filed a motion asking the court to prevent Kent from using her attorneys’ documents at trial, asserting that—even though the court had already ruled that the privilege had been waived—those documents were nevertheless protected by the attorney-client privilege. The court issued a written ruling on the motion, apparently granting the motion as to Stephanie‘s personal privilege, but denying the motion as to documents related to TTR‘s privilege. However, the court concluded its ruling by stating that the privilege regarding “[t]he information from [New Firm‘s] attorneys has been waived . . . when [Stephanie] named the attorneys to be witnesses in this case.”
¶24 While discovery was ongoing in the main action, Landlords—judgment creditors of TTR as a result of the
¶25 Following the close of discovery, Kent and LHC filed summary judgment motions, asking the court, for various reasons, to dismiss all of Stephanie‘s claims. Stephanie opposed those motions, and filed a summary judgment motion of her own, seeking dismissal of Kent‘s counterclaims. The district court held two hearings on the motions, and issued two separate written decisions, eventually granting both sides’ motions and dismissing all of Stephanie‘s and Kent‘s claims. As the district court saw it, Stephanie‘s claims failed for a number of reasons, including grounds common to most or all of her claims (such as failure to submit timely or sufficient damages disclosures, and the preclusive effect of the eviction judgment on claims related to fairness of the rents), as well as grounds unique to various causes of action (such as the claims being untimely filed or purchased by Landlords in the sheriff‘s sale). The district court applied similar principles to its analysis of Kent‘s counterclaims, determining that Kent‘s damages disclosures had likewise been untimely and insufficient, and ruling that each of Kent‘s claims had individual infirmities as well.
¶26 With regard to Kent‘s and Stephanie‘s respective personal claims against the other for breach of fiduciary duty, the district court determined that Kent and Stephanie had agreed, in open court, to mutually dismiss those claims against each other. In a written ruling, the district court dismissed Stephanie‘s claims for breach of fiduciary duty, ruling that “Stephanie‘s claims are derivative because the alleged harm is the result of financial injury to TTR,” and concluding that any derivative claims were subject to dismissal for several reasons, including
¶27 At a later hearing, Kent‘s attorney acknowledged that Stephanie‘s assertion that she pleaded personal (in addition to derivative) claims for breach of fiduciary duty “got lost in the shuffle” of the earlier-decided motions, and that the court had not yet definitively ruled on the issue. Kent‘s lawyer pointed out that Kent had pleaded a mirror-image personal claim for breach of fiduciary duty against Stephanie, and noted that the two claims must rise and fall together: “either we can go forward with it and they go forward with it, or neither one of us can.” Kent‘s attorney then made an offer, in open court, to give up Kent‘s claim if Stephanie would do the same with hers. Stephanie and her attorney agreed to that deal, and the court twice clarified that the parties were both agreeing to dismiss their fiduciary duty claims, noting that the deal “would leave [Stephanie] with nothing on a breach of fiduciary duty claim” because the court had already dismissed her derivative claims. Both Stephanie‘s attorney and Kent‘s attorney twice affirmed that the court was correctly stating the terms of the stipulation. The court then entered an order dismissing Kent‘s and Stephanie‘s mutual personal claims for breach of fiduciary duty, based on the agreement they reached in open court.
¶28 Following these various rulings, the district court entered a final judgment in the case, proclaiming that it “has now adjudicated all the claims, rights[,] and liabilities of all the parties in this action,” and specifically noted that it had dismissed all the causes of action brought by Stephanie in her complaint and by Kent in his counterclaim.
¶29 Both parties take issue with the district court‘s summary judgment orders, and appeal the dismissal of at least some of their claims. Stephanie appeals the dismissal of four groups of claims: for legal malpractice, fraud, breach of fiduciary duty, and unjust enrichment.5 Kent cross-appeals the dismissal of his counterclaims for wrongful lien, breach of fiduciary duty, and intentional and negligent infliction of emotional distress.
¶30 The district court gave several reasons for dismissing the parties’ claims. To the extent these claims were dismissed on the merits, as a matter of law on summary judgment, we review the district court‘s decision for correctness, affording it no deference. See Penunuri v. Sundance Partners, Ltd., 2017 UT 54, ¶ 14, 423 P.3d 1150. To the extent these claims were dismissed as a discovery sanction, we review the district court‘s decision for abuse of discretion. See Keystone Ins. Agency, LLC v. Inside Ins., LLC, 2019 UT 20, ¶ 12, 445 P.3d 434.
¶31 In addition, Kent cross-appeals the district court‘s attorney-client privilege ruling, made pursuant to Stephanie‘s motion in limine, that he would not be allowed to use, at trial, documents and communications concerning the two designated attorneys’ representation of Stephanie in her individual capacity. “The existence of a privilege is a question of law for the court, which we review for correctness, giving no deference to the [district] court‘s determination.” Staley v. Jolles, 2010 UT 19, ¶ 9, 230 P.3d 1007 (quotation simplified).
I. Stephanie‘s Appeal
A. Legal Malpractice and Fraud
¶32 The district court dismissed Stephanie‘s claims for legal malpractice and fraud, giving multiple independent reasons for its ruling, including its belief that legal malpractice claims could not be brought against non-lawyers, and its belief that Stephanie‘s fraud claims as well as her claims against LHC were time-barred. One of the chief bases for its ruling, however, was that the eviction proceedings, including the stipulation to judgment, had resolved all issues related to the reasonableness of the increased monthly rents that TTR had paid to Landlords after November 2012, and that Stephanie was therefore precluded from re-litigating any claims related to the reasonableness of the rent, including her claims for legal malpractice and fraud, which the court interpreted as based upon a contention that the rents were unfair. Indeed, the court expressly rejected Stephanie‘s assertion that her malpractice and fraud claims were broader than that, stating as follows:
While [Stephanie and TTR] also contend that the fraud and legal malpractice claims are distinct, everything revolves around the fairness of the rent. The crux of the failures is that if a disclosure was made to Stephanie, she now claims that she would not have purchased TTR shares and would not have suffered damage from the increased rent and allegedly self-interested lease provisions. These are rent related issues [that] have been resolved.
¶33 In her brief on appeal, Stephanie does take issue with the district court‘s dismissal of her claims for legal malpractice
¶34 Appellants are not permitted to raise matters for the first time in a reply brief. See State v. Evans, 2019 UT App 145, ¶ 28 n.9, 449 P.3d 958, petition for cert. filed, Sept. 4, 2019 (No. 20190739). Indeed, “[w]hen a party fails to raise and argue an issue on appeal, or raises it for the first time in a reply brief, that issue is waived and will typically not be addressed by the appellate court.” State v. Johnson, 2017 UT 76, ¶ 16, 416 P.3d 443; see also Kendall v. Olsen, 2017 UT 38, ¶ 13, 424 P.3d 12 (stating that it was “too late” for an appellant to address an issue “in his reply brief,” because it “deprives the appellee of the chance to respond“). Thus, Stephanie waived her opportunity to appeal the district court‘s specific ruling that her legal malpractice and fraud claims were precluded by the resolution of the eviction part of the case.
¶35 And it is well-settled that “we will not reverse a ruling of the district court that rests on independent alternative grounds where the appellant challenges [fewer than all] of those grounds.” Kendall, 2017 UT 38, ¶ 12 (quotation simplified). Here, Stephanie has failed to timely challenge one of the independent alternative bases for the district court‘s decision. We therefore have no choice but to affirm the district court‘s dismissal of Stephanie‘s legal malpractice and fraud claims, on the basis that Stephanie has failed to carry her burden of persuasion on appeal,
B. Breach of Fiduciary Duty
¶36 Stephanie brought two different types of claims asserting breach of fiduciary duty: (a) derivative claims, for and on behalf of TTR, asserting that Kent and others had violated fiduciary duties owed to TTR, and (b) personal claims, on her own behalf, which she claimed she was able to bring under a “close corporation” exception, or on the basis that she had sustained harm independent of any harm TTR might have sustained. The district court dismissed Stephanie‘s derivative claims on the basis that those claims belonged to TTR and had been transferred to Landlords in the sheriff‘s sale; Stephanie does not appeal the dismissal of her derivative claims for breach of fiduciary duty. However, Stephanie does take issue with the court‘s dismissal of the remainder of her breach of fiduciary duty claims, the ones she characterizes as non-derivative.
¶37 But Stephanie‘s arguments overlook the fact that she and Kent reached a stipulation, in open court, to mutually dismiss their non-derivative claims for breach of fiduciary duty, and that the district court accepted the stipulation and dismissed her non-derivative claims on that basis.7 She offers no reason why she should be relieved of the effects of that stipulation.
¶39 Stephanie made no motion before the district court to be relieved from her stipulation, and makes no effort in her briefs to explain why we should allow her to revive claims that she
C. Unjust Enrichment
¶40 The only other claim whose dismissal Stephanie appeals here is her claim for unjust enrichment, in which she asserts that she performed $120,000 worth of work for Landlords but was never paid for that work. The district court dismissed the unjust enrichment claim in connection with its determination that Stephanie‘s damages disclosures were deficient.9 Stephanie
¶41 Applicable rules require litigants to include a damages computation in their initial disclosures. See
¶42 In her initial disclosures, Stephanie did not set forth any categories of potential damage, or offer any methodology or formula for computing damages. Instead, her damages disclosure, in its entirety, stated as follows:
This is unquestionably insufficient. A person reading that damages disclosure would not know whether Stephanie viewed the case as one worth thousands or many millions of dollars, and also would not know what types of damages Stephanie intended to seek, or how she intended to go about computing them. The district court committed no error in labeling Stephanie‘s damages disclosure insufficient.
¶43
¶44 Stephanie assails this ruling, at least as it pertains to her unjust enrichment claim, by asserting that her failure to serve adequate damages disclosures was harmless here, because (a) she explained, in her complaint, what the basis for her unjust enrichment claim was, and (b) she disclosed to Kent, during discovery, the simple invoices on which her unjust enrichment damages were based. She asserts that no “calculations” were involved in assessing her damages with regard to this claim, because she has only ever sought recovery of the amount on the face of the invoices that she sent to Kent originally, and disclosed to him again during discovery in the lawsuit. She points out that
¶45 We agree. The key question in determining the existence of harmlessness under this rule is whether a plaintiff‘s failure to disclose its categories and methods of computing damages impaired the defense‘s ability to “properly build a defense against the damages claimed.” Keystone, 2019 UT 20, ¶ 20. Our supreme court has identified several factors relevant to the question of harmlessness, including whether the defense was able to adequately (1) question witnesses, (2) determine the case‘s tier status under the applicable rules of civil procedure, (3) understand the nature and quantity of the plaintiff‘s claimed damages, and (4) understand the scope and cost of the litigation pursued. See id. ¶¶ 19–20. While Kent and Landlords may have been prejudiced by Stephanie‘s inadequate damages disclosures with regard to some of Stephanie‘s other, more complex causes of action, we cannot see how Kent or Landlords were harmed by Stephanie‘s inadequate damages disclosures related to her unjust enrichment claim. Kent and Landlords knew, from the outset, that at least part of this claim was about work Stephanie claimed to have performed for Landlords without remuneration, and they had in their possession the invoices that Stephanie was using to support and quantify her claim.
¶46 Because we affirm the dismissal of all of Stephanie‘s other claims on separate grounds, we need not consider here whether the district court‘s order excluding Stephanie‘s damages evidence with regard to those other claims was proper. Perhaps it was, given the complex nature of some of Stephanie‘s undisclosed damages theories regarding some of those other claims. But Stephanie‘s claim for unjust enrichment based on
II. Kent‘s Cross-Appeal
A. Kent‘s Damages Disclosures
¶47 Kent‘s initial damages disclosures were no better than Stephanie‘s. In those disclosures, Kent stated simply that “Defendants have not yet calculated their damages,” and that they “reserve the right to supplement this response.” The district court correctly recognized the inadequacy of those disclosures, and issued an order excluding Kent‘s damages evidence, an order that resulted in the dismissal of some of Kent‘s counterclaims. Kent appeals the order excluding his damages evidence, and therefore dismissing some of his counterclaims, asserting that he atoned for his disclosure error by producing to Stephanie, during the discovery phase of the case and five months before discovery ended, damages calculations that were not deficient, as well as all necessary supporting documentation. In short, Kent contends that, even if his initial disclosures were inadequate, his discovery responses rendered that initial inadequacy harmless.
¶48 We agree. While his initial damages disclosures were inadequate, Kent‘s discovery responses were provided in March
¶49 Accordingly, we reverse the district court‘s exclusion of Kent‘s damages evidence, as well as the district court‘s related order dismissing some of Kent‘s counterclaims for lack of proof.11 None of Kent‘s counterclaims should have been dismissed on this basis.
B. Wrongful Lien
¶50 The district court alternatively dismissed Kent‘s wrongful lien counterclaim on its merits, in addition to dismissing it for lack of damages evidence. Kent takes issue with the district court‘s order dismissing this claim on its merits, and we find Kent‘s arguments persuasive.
¶51 After filing suit against Kent and Landlords in June 2016, Stephanie also recorded several lis pendens against Landlords’ properties. In the lis pendens, Stephanie gave notice that she had filed a lawsuit against Landlords seeking “to reform the lease agreement associated with the following real property,” and then gave a legal description. As noted above, the purported reformation she desired to make to the leases had to do with the amount of the monthly rental payment; it did not have to do with any dispute about the portion of the property TTR had the right to occupy.
¶52 Under
¶53 In this case, the lawsuit of which Stephanie was giving notice by recording her lis pendens did not include claims affecting title to or the right to possess Landlords’ real property. The only manner in which Stephanie wanted to “reform the lease” was by changing the amount of monthly rent due thereunder. Even if Stephanie had been entirely successful in her lawsuit, and won a judgment reforming the leases to require a lower monthly rental payment, neither title nor her right to possess the property would have changed. TTR would still have occupied exactly the same square footage as it had before, and Landlords would still have owned the real property itself. The only thing that would have changed was the amount of monthly rent that TTR was paying to Landlords.
¶54 While we can possibly envision situations in which a tenant might be able to lawfully record a lis pendens on his landlord‘s property, our lis pendens statute does not permit a tenant whose only dispute with its landlord concerns the amount of the monthly rent payment to file a lis pendens against the landlord‘s property. Such a dispute affects neither title to nor the right to possess the property.
¶55 Accordingly, the district court erred in determining that Stephanie‘s claimed interest in Landlords’ property was “a
C. Intentional Infliction of Emotional Distress
¶56 The district court also dismissed Kent‘s counterclaim for intentional infliction of emotional distress (IIED) on its merits, determining that the conduct Kent described as the basis for his claim was not, as a matter of law, sufficiently outrageous to meet the requirements of the cause of action. Kent appeals this determination, and we conclude that the district court correctly dismissed this claim on its merits.
¶57 In Utah, “a claim for IIED is actionable if: (i) the defendant‘s conduct is outrageous and intolerable; (ii) the defendant intends to cause emotional distress; (iii) the plaintiff suffers severe emotional distress; and (iv) the defendant‘s conduct proximately causes the plaintiff‘s emotional distress.” Wilson v. Sanders, 2019 UT App 126, ¶ 18, 447 P.3d 1240 (quotation simplified), petition for cert. filed, Sept. 18, 2019 (No. 20190781). However, “it is for the court to determine, in the first instance, whether the defendant‘s conduct may reasonably be regarded as so extreme and outrageous as to permit recovery.” Schuurman v. Shingleton, 2001 UT 52, ¶ 23, 26 P.3d 227 (quotation
¶58 Generally, sharp negotiation tactics, including threats of litigation, do not constitute the sort of behavior that our law considers sufficiently “outrageous” to sustain a cause of action for IIED. See Bennett, 2003 UT 9, ¶ 66 (“An allegation of improper filing of a lawsuit or the use of legal process against an individual is not redressable by a cause of action for [IIED].“). Moreover, “an ordinary business dispute should not be the subject of legally recognizable claims” for IIED. See 86 C.J.S. Torts § 57 (2019); see also Mavromatis v. Lou-Mar, Inc., 632 So. 2d 828, 835 (La. Ct. App. 1994) (holding that a dispute over control of a family-owned business—including allegations that one party had failed “to properly value the . . . children‘s stock,” had refused “to allow them proper access to corporate books and records,” and had attempted “to reduce the purchase price for their stock“—“describe[d] a perfectly ordinary business dispute,” and that “[s]uch disputes are an everyday aspect of commercial life and should not be the subject of legally recognizable claims” for IIED).
¶59 In our view, even viewing the facts of this case in the light most favorable to Kent, Stephanie‘s aggressive actions in attempting to apply “pressure” on Kent in order to gain control of the family restaurant business are not sufficiently outrageous
¶60 Accordingly, we affirm the district court‘s order dismissing Kent‘s IIED claim.12
D. Attorney-Client Privilege Issues
¶61 Finally, Kent takes issue with the district court‘s apparent ruling that Stephanie had not, after all, completely waived the attorney-client privilege with regard to communications she had
¶62 The attorney-client privilege operates as a way “to encourage candor between attorney and client and to promote the best possible representation of the client.” Terry v. Bacon, 2011 UT App 432, ¶ 14, 269 P.3d 188 (quotation simplified); see also
¶63 However, a client may waive the privilege if he or she “discloses or consents to the disclosure of any significant part of the matter or communication.”
¶64 Early in the case, in rejecting the two attorneys’ objections to Kent‘s subpoenas, the district court ruled that Stephanie waived the attorney-client privilege, at least as to matters raised in the pleadings, when she listed her attorneys as witnesses whom she expected to call in her case-in-chief. Indeed, in her initial disclosures, Stephanie broadly announced that both of the listed attorneys had general “knowledge concerning matters in the pleadings,” and stated in particular that one of them had specific knowledge about the damages caused to TTR, and the other had specific knowledge about “Ennenga‘s breaches of duty to TTR and Stephanie.” Although the court‘s initial discovery ruling regarding the scope of the waiver was unqualified, in its later ruling on Stephanie‘s motion in limine the court determined that the waiver was limited, and did not necessarily apply during the trial phase of the case.
¶65 In defending the district court‘s motion in limine ruling preventing Kent from using the privileged information at trial, Stephanie argues that the district court‘s original waiver ruling was incorrect, and that “[n]othing in [her] disclosure suggested a waiver of the attorney-client privilege.” But Stephanie
¶66 Our conclusion is driven, in part, by the breadth of Stephanie‘s disclosure. It is possible, of course, to introduce an attorney‘s testimony for only one discrete purpose—for instance, to bolster an advice of counsel defense, or to have an attorney rebut a claim that a suit was brought in bad faith. See, e.g., Aspex Eyewear, 276 F. Supp. 2d at 1094 (noting that the waiver applies to “any issue to which [the attorneys] will testify“); Handgards, Inc. v. Johnson & Johnson, 413 F. Supp. 926, 929 (N.D. Cal. 1976) (holding that defendants waived attorney-client privilege as to the reasons why lawsuits were brought when they called their own attorneys as witnesses to demonstrate that the lawsuits were initiated in good faith pursuant to competent legal advice). But Stephanie designated her attorneys as witnesses competent to testify about “matters in the pleadings,” and did not limit her
¶67 But this does not end our analysis. The basis for the district court‘s motion in limine ruling was its apparent belief that Stephanie‘s waiver of privilege for discovery purposes did not necessarily carry over into the trial phase of the litigation. In this, the district court was incorrect. As Kent points out, once the attorney-client privilege has been waived and information is disclosed pursuant to that waiver, it is no longer possible to undo that waiver and reassert the privilege. See United States v. Suarez, 820 F.2d 1158, 1160 (11th Cir. 1987) (“[I]t has long been held that once waived, the attorney-client privilege cannot be reasserted.“); see also Genentech, Inc. v. United States Int‘l Trade Comm‘n, 122 F.3d 1409, 1416 (Fed. Cir. 1997) (“Once the attorney-client privilege has been waived, the privilege is generally lost for all purposes and in all forums.“); Patrick v. City of Chicago, 154 F. Supp. 3d 705, 711 (N.D. Ill. 2015) (“[I]nformation once disclosed to a party opponent waives the attorney-client privilege as to future proceedings.“); 2 Paul R. Rice, Attorney-Client Privilege in the United States § 9:23, at 86 (5th ed. 2018) (“Once there has been a waiver and the confidentiality upon which the privilege is premised has been relinquished, the privilege cannot be revived either in subsequent stages of the action in which the waiver occurred or in future actions.“). Thus, Stephanie‘s efforts later in the litigation—after her attorneys’ documents had been produced and the attorneys had been deposed—to withdraw her previous waiver of the privilege and to attempt to prevent Kent
¶68 This is not to say that Stephanie‘s waiver was universal; certainly, disclosing the attorneys as witnesses with regard to matters raised in the pleadings does not necessarily effect a waiver as to matters not raised in the pleadings. And this is not to say that all of the privileged matters subject to the waiver will be admissible in the litigation to follow upon remand; there remain only three claims to be litigated upon remand, and much of the privileged information to which the waiver applies may not be relevant to the remaining claims, and other evidentiary objections may be warranted with regard to particular documents or communications.
¶69 But these will be issues for the district court to resolve on remand. It suffices here to clarify that Stephanie waived the attorney-client privilege with regard to “matters raised in the pleadings” as concerns the two listed attorneys, and that waiver applies just as much to the trial phase of the case as it did to the discovery phase of the case. Therefore, the attorney-client privilege presents no bar to either side‘s attempt to utilize, in further proceedings on remand, communications between Stephanie and the two listed lawyers that concern matters raised in the pleadings.
¶70 The district court correctly dismissed most of the claims brought by both sides in this lawsuit. In particular, we affirm the district court‘s dismissal of Stephanie‘s claims for legal malpractice, fraud, and breach of fiduciary duty, and Kent‘s claims for breach of fiduciary duty and IIED. However, we conclude that each side has at least one claim that should not have been dismissed on the motions filed. Specifically, we reverse the district court‘s dismissal of Stephanie‘s claim for unjust enrichment and Kent‘s claims for wrongful lien and NIED, and we remand for further proceedings on those claims. And in those further proceedings, the attorney-client privilege will present no bar to either side‘s attempt to utilize communications, concerning matters raised in the pleadings, between Stephanie and the two attorneys she listed as witnesses in her initial disclosures.