Michael S. ROBINSON, Appellant and Cross-appellee, v. Debra J. ROBINSON, Appellee and Cross-appellant.
No. 20140470-CA
Court of Appeals of Utah
Feb. 19, 2016
2016 UT App 33
¶ 36 Here, Reynolds points to evidence that Gentry‘s stated reason for terminating her is pretextual. For example, Reynolds‘s scores on eight performance audits had ranged between 70 and 85 (out of a total of 100). But after she refused to break the law and questioned company supervisors about the issue, her immediate supervisor suspended her and conducted another audit. Her score on that audit dropped to 30. Reynolds argues that her score fell dramatically in part because she was not working due to the suspension. Reynolds also cites evidence that her predecessor failed three audits before being terminated, whereas Reynolds failed only one. Reynolds also argues that the timing of her discharge—eight days after she refused to violate the law and reported the request to her supervisor‘s superior—“is not a coincidence.” Gentry responds that this inference is “pure speculation, conclusory argument, and unsubstantiated opinion.”
¶ 37 In addition, Reynolds testified that her direct supervisor directed her to act in violation of law, stating that “sometimes, in order to keep your job, you have to be willing to break the rules.” Reynolds then contacted that supervisor‘s superior. That superior later testified that if he were given the choice between obeying company policy and obeying a direct supervisor, he would obey the direct supervisor. And Reynolds testified that the superior told her, “Well, when your supervisor tells you to do something, you need to do it.” When Reynolds took the issue to the supervisor‘s superior, he stated, “Well, we all know that our job is on the line every day.”
¶ 38 We agree with Gentry that Reynolds “cannot create a dispute on a material issue of fact or disputed inference by simply saying there is a dispute, or, based upon speculation, a subjective belief or opinion.” But Reynolds has done more than that here. Viewing the evidence in the light most favorable to her, as we must, we conclude that pretext is one of the logical inferences arising from the facts presented and thus that Reynolds has raised a genuine issue of material fact as to “whether the business reasons offered by [Gentry] for [Reynolds‘s] termination were
CONCLUSION
¶ 39 Insofar as the summary judgment concludes that Reynolds has no colorable claim under the public policy exception to the at-will employment rule, it is affirmed. In all other respects, it is reversed. We accordingly remand the case for further proceedings consistent with this opinion.
Dean C. Andreasen, Salt Lake City, and Diana Telfer, for Appellee.
Judge MICHELE M. CHRISTIANSEN authored this Opinion, in which Judge GREGORY K. ORME concurred. Judge STEPHEN L. ROTH concurred in Parts I, II, XI, and XII, and concurred in the result, without opinion, in Parts III, IV, V, VI, VII, VIII, IX, and X.
Opinion
CHRISTIANSEN, Judge:
¶ 1 Michael S. Robinson (Husband) appeals from the district court‘s handling and eventual grant of both a motion to dismiss and a motion for summary judgment in favor of defendаnts Debra J. Robinson (Wife), Natalie D. Larson, Matthew R. Larson, Kelly D. Larson, Derrick D. Larson, and Kaisa Cardall. Wife cross-appeals the district court‘s denial of an award of attorney fees. We affirm.
¶ 2 This piece of satellite litigation orbits Husband and Wife‘s contentious divorce. See generally Robinson v. Robinson, 2016 UT App 32, 368 P.3d 147; Robinson v. Jones Waldo Holbrook & McDonough, 2016 UT App 34, 369 P.3d 119; Robinson v. Robinson, 2010 UT App 96, 232 P.3d 1081.
¶ 3 After filing for divorce in February 2007, Husband and Wife attempted to disentangle the real property interests within their marital assets. On November 2, 2007, Husband and Wife came to a stipulated property settlement agreement (the Stipulation). See Robinson v. Robinson, 2016 UT App 32, ¶ 2, 368 P.3d 147 (discussing the terms of the Stipulation). Husband later moved to set aside the Stipulation, alleging that performance of his part of the Stipulation was impossible, that there had been a mutual mistake, and that Wife had fraudulently induced Husband to enter the Stipulation. The district court denied Husband‘s motion and incorporated the Stipulation into a decree of divorce entered on December 31, 2008. Husband appealed the denial of his motion, arguing impossibility and mutual mistakе, but he did
¶ 4 On September 7, 2011, Husband filed this civil action alleging fraud, breach of fiduciary duty, conversion, and civil conspiracy. His fraud and breach of fiduciary duty claims related to three causes of action, all of which sought relief primarily in the form of a declaration that the Stipulation and divorce decree were void. The complaint named as defendants Wife, three of her adult children, her daughter-in-law, and a friend of the daughter-in-law (collectively, Defendants).1 Defendants filed a motion for summary judgment based on res judicata, waiver, and the assertion that some of the issues were duplicative of those in the ongoing divorce case. Defendants also filed a motion to dismiss on the grounds that the complaint failed to plead fraud with particularity and failed to state a claim upon which relief could be granted. The motion to dismiss also asserted that some of the causes of action pleaded by Husband were barred by the statute of limitations.
¶ 5 At the hearing, Husband argued that his Sеptember 2011 complaint had been timely filed because he had not discovered Wife‘s fraud and breach of fiduciary duty until October 2008. He further argued that his complaint was “in the nature of a rule 60(b), Utah Rules of Civil Procedure, motion for relief from a judgment based on fraud.” He also argued that “time deadlines did not apply to rule 60(b) motions.”
¶ 6 The district court adopted Defendants’ statement of undisputed material facts, accepted as true Husband‘s statement of facts pertaining to the motion to dismiss, and noted that Husband was “a sophisticated businessman.” The court rejected Husband‘s argument relating to
¶ 7 Husband contends that the district court erred in ruling that
¶ 8 Husband also contends that the district court erred by granting Wife‘s motions to dismiss and for summary judgment. “For the purposes of a rule 12(b)(6) dismissal, we accept the complaint‘s factual allegations as true.” Fidelity Nat‘l Title Ins. Co. v. Worthington, 2015 UT App 19, ¶ 7, 344 P.3d 156. “As a result, an appeal from a rule 12(b)(6) dismissal presents only questions of law, and we review the district court‘s ruling for correctness.” Id. We review a distriсt court‘s legal conclusions and ultimate grant or denial of summary judgment for correctness, after viewing the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party. Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600.
¶ 9 Wife contends that the district court erred by denying her request for an award of attorney fees. The grant or denial of an attorney-fee award pursuant to a contract is an issue of law that we review for correctness. See Gardiner v. York, 2006 UT App 496, ¶ 5, 153 P.3d 791.
I. Rule 60(b) Does Not Govern Independently Filed Actions.
¶ 10 Husband first contends that the district court erred in ruling that
¶ 11 Husband asserts that, because fraud is generally not a proper basis for a petition to modify a divorce decree, it was appropriate to bring his purported
¶ 12 Bayles stands for the proposition that a post-divorce fraud cause of action may be brought as a
¶ 13 Because
II. The Statute of Limitations Applies to Husband‘s Complaint.
¶ 14 Apparently claiming that his complaint was actually a hybrid
III. While the District Court Erred by Implicitly Converting the Motion to Dismiss into a Motion for Summary Judgment, the Error Was Harmless.
¶ 15 Husband next contends that the district court erred in ruling that his fraud clаims, brought in September 2011, were barred by the applicable three-year statute of limitations. Specifically, he argues that the court considered materials outside the pleadings to reach its determination that Husband knew or should have known of the alleged fraud by December 2007.
¶ 16 In his complaint, Husband asserted that he did not discover the alleged fraud until October 2008. However, the district court looked to a pleading Husband had filed in the divorce case on February 12, 2008. In that pleading, Husband stated that his accountant had informed him of “a serious error” and had recommended an independent examination be undertaken “to ensure that [Wife] had not committed fraud or made a material misrepresentation.” Husband attached a letter from the accountant to that effect, dated December 17, 2007. As a result, the district court determined that Husband knew or should have known of the alleged fraud as of December 2007. Accordingly, the court ruled that Husband‘s fraud claims were barred by the three-yеar statute of limitations.
¶ 17 A motion to dismiss admits the truth of the facts alleged in the complaint but challenges the plaintiff‘s right to relief based on those facts. Osguthorpe v. Wolf Mountain Resorts, LC, 2010 UT 29, ¶ 20, 232 P.3d 999. The district court is therefore limited to consideration of “the facts alleged in the pleading itself rather than factual determinations from prior proceedings.” Puttuck v. Gendron, 2008 UT App 362, ¶ 11, 199 P.3d 971.
¶ 18 Here, the accountant‘s warning and letter were not “facts alleged in the pleading itself.” See id. Accordingly, the district court erred by considering them for the purposes of the motion to dismiss. Instead, the district court should have treated the motion to dismiss as a motion for summary judgment and given the parties an opportunity to present pertinent material. See
¶ 19 The district court‘s error is rendered harmless, however, by our detеrmination below that Husband failed to plead fraud with particularity. See infra ¶¶ 28, 36–37.4 We therefore decline to reverse based on the district court‘s error because dismissal is justified without consideration of the outside documents.
IV. Husband Failed to Plead Fraud with Particularity.
¶ 20 Husband contends that the district court erred by ruling that he failed to plead fraud with particularity. Husband‘s complaint stated four causes of action alleging fraud: that Wife misrepresented the value of a commercial plaza owned by the couple; that Wife fraudulently used marital assets to par-
¶ 21 “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.”
A. Valuation of Phoenix Plaza
¶ 22 Husband and Wife owned certain commercial property located in St. George, Utah, named Phoenix Plaza. In November 2007, Husband and Wife participated in mediation to divide their marital property. One of the topics at mediation was the disposition of Phoenix Plaza. Because Wife was managing Phoenix Plaza at that time, she had prepared an estimate of its value based, in part, upon information she had about the then-current tenants. In her estimate, Wife stated, “We did compute 5% vacancy rates to get the 7.5 million [valuation] @ 7% [capitalization rate]. Rents would have to increase by $277 per month (which they are/will) before closing.” Wife provided this estimate to Husband at some point prior to the mediation session.
¶ 23 During the mediation session, Wife represented that a banker was willing to refinance Phoenix Plaza for $3.5 million based on a valuation of $7.5 million. Husband then agreed to refinance the outstanding Phoenix Plaza mortgage for $3.5 million and to pay Wife roughly $1,784,419 in exchange for her marital share of the equity in Phoenix Plaza. This agreement was included in the Stipulation, which was itself incorporated into the decree of divorce entered by the district court.
¶ 24 In his complaint, Husband alleged that Wife had provided the banker with false information about the rent roll for Phoenix Plaza in order to obtain an inflated valuation of the property. Specifically, Husband claimed that Wife misrepresented the status of the leases for roughly a quarter of Phoenix Plaza by stating that the leases remained in force for a further seven to twenty-two months when in fact the leases had expired and the tenants were holding over from month to month. Husband asserted that the banker had relied on Wife‘s false lease information to provide the $3.5 million refinancing estimate. Husband claimed that he had relied on Wife‘s representation that the banker was willing to refinance Phoenix Plaza for $3.5 million. In short, Husband alleged that Wife misrepresented the nature of the tenants to the banker to get a refinancing estimate of $3.5 million and then misrepresented to Husband that a $3.5 million refinance was available from the banker.
¶ 25 The district court ruled that Husband had not stated the facts underlying Wife‘s alleged fraud with the particularity required by
¶ 26 On appeal, Husband asserts that he was “very specific in setting forth the representations made by [Wife] concerning presently existing material facts, i.e., the current status of the leases and rent rolls, which were false at the time they were made” to the banker. This argument does not directly challenge the court‘s actual ruling—that Wife‘s statements to Husband regarding the availability of refinance were not presently existing material facts. Because Husband fails to challenge the court‘s ruling on this point, the first two elements of a fraud claim are unsatisfied—i.e., “(1) that a representation was made (2) concerning a presently existing material fact....” See Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35 (citation and internal quotation marks omitted).
¶ 27 Moreover, Husband‘s complaint did not allege that Husband relied on Wife‘s misrepresentation of “the current status of the leases and rent rolls.” Rather, thе complaint stated that “[Wife] failed to provide [Husband with] a copy of the Rent Roll.” The complaint alleged that Husband relied on Wife‘s statement that the banker had loans available.6 If we accept Husband‘s new assertion on appeal that the “presently existing material fact” at issue was actually “the current status of the leases and rent rolls,” we can see nothing in the complaint alleging that Husband “(7) did in fact rely upon [that fact] (8) and was thereby induced to act (9) to [his] injury and damage.” See Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35.
¶ 28 Because Husband does not challenge the district court‘s determination that the statement upon which he had claimed to rely did not constitute a presently existing material fact, we affirm the resulting ruling that Husband failed to plead this fraud in the inducement claim with the requisite particularity.
B. The Garfield and Mesquite Properties
¶ 29 Before the marriage, Wife owned certain real property located on Sego Lily Drive in Salt Lake City, Utah. After the couple married, Wife sold that property and used the proceeds to рrovide the majority of the down payment on a rental property located on Garfield Avenue (the Garfield Property) in Salt Lake City. After nine years, and during the marriage, the Garfield Property was sold, netting Wife approximately $890,000. Wife then contributed that money toward the purchase of Phoenix Plaza. Husband also contributed roughly $2.3 million toward the Phoenix Plaza purchase, in the form of real property exchanges. Under the Stipulation, Wife was awarded a portion of the proceeds from Phoenix Plaza proportional to her $890,000 contribution.
¶ 30 In his complaint, Husband alleged that, without his knowledge, Wife had used marital funds to pay the mortgage on the Garfield Property at an accelerated rate. This increased the equity in the Garfield Property and hence the net proceeds from its sale. In turn, this increased Wife‘s proportional share of Phoenix Plaza. As a result, Husband asserted, he should be awarded a greater interest in Phoenix Plaza “than that described in the Stiрulation.”
¶ 31 The complaint also noted that during the marriage, Wife purchased real property in Mesquite, Nevada, for approximately $95,000 (the Mesquite Townhouse). Roughly $51,000 of the purchase price was paid via a real property exchange. The exchanged property was a condominium unit purchased
¶ 32 Husband‘s second cause of action alleged that Wife fraudulently used marital assets to pay down “her financial obligations” and “falsely represented that monies contributed to [the Mesquite Townhouse] were from an early inheritance” when in fact the monies “came from marital assets.” It is unclear whether the phrase “her financial obligations” in the second cause of action was intended to mean the balance of the purchase price for the Mesquite Townhouse or the mortgage payments for the Garfield Property (or both or neither).
¶ 33 The district court ruled that Husband had not alleged fraud with sufficient particularity, noting that the complaint failed to state “with particularity any facts regarding supposed use of marital assets to purchase the townhouse or the condominium.” The district court also noted that the complaint stated “nothing about specifically when marital monies were used to purchase the properties or where the monies came from.”
¶ 34 On appeal, Husband asserts that his complaint “specifically alleged that during the course of the parties’ marriage that [Wife] used money in the parties’ joint account, i.e., marital funds, to pay off the debt on her separate propеrty” and that “[the] time of such payments would have been after the purchase of the Garfield Property in 1995 and before its sale in June of 2004.”
¶ 35 “[The] mere recitation by a plaintiff of the elements of fraud in a complaint does not satisfy the particularity requirement.” Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35; see also Fidelity Nat‘l Title Ins. Co. v. Worthington, 2015 UT App 19, ¶¶ 10–11, 344 P.3d 156. Conclusory allegations, unsupported by a recitation of relevant surrounding facts, are insufficient to carry that burden. Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35. The relevant surrounding facts must be set forth with sufficient particularity to show which facts the plaintiff believes support the allegations. Id.
¶ 36 Here, despite Husband‘s claim on appeal, his second cause of action did not specifically allege that Wife used money from the parties’ joint account; rather, it stated in conclusory fashion only that Wife “committed fraud ... by using marital assets to pay down her financial obligations.”7 Nor did the facts stated in the remainder of the complaint make such an allegation; the complaint averred only that the Garfield Property payments were “taken from maritаl assets” and that $42,000 of the Mesquite Townhouse purchase price was “obtained from marital assets.” The complaint failed to identify any details of the supposed payments, rendering the assertion that they even occurred merely speculative. The complaint was also devoid of any explanation of how or when Husband became aware of the alleged fraud. Rather, the complaint simply speculated that, because Wife apparently made the payments, Wife must have used marital assets. The mere fact that one spouse makes a payment does not support an inference that the spouse funded the payment using marital assets, much less that such funding would be improper. While the precise contours of the term “particularity” may be debatable, the claim that Wife may have made an unknown number of payments amounting to an unknown total using funds from an unknown source or sources at unknown times interspersed throughout a nine-year period is insufficiently detailed to satisfy the particularity requirement.
¶ 37 Husband has not shown that his complaint pleaded this alleged fraud with particularity; accordingly, we affirm the district court‘s dismissal of the second cause of action.
¶ 38 Husband‘s third cause of action alleged that Wife “committed fraud by knowingly failing to disclose additional marital assets including the accounts separately held by her or jointly held by her and one or more of [the other defendants].” It also alleged that Wife “committed fraud by knowingly failing to disclose and concealing the fact that the alleged custodial accounts held in the names of her then minor children were actually marital property.” The complaint did not associate any of the other defendants specifically with any of the accounts. In fact, the complaint did not identify any of the purported accounts. The district court ruled that “[t]here is absolute[ly] no specificity in these allegations [such as] where the accounts were held, when they were hеld, when marital assets were placed in them, whose names were on which accounts, etc.”
¶ 39 On appeal, Husband refers to allegations in the complaint that Wife misused a joint credit card and withheld the credit card statements from him. He asserts that the complaint specifically alleged Wife‘s misuse of the credit card for non-business expenses, “including the credit account used ..., when the charges were made, the amount of the charges, the names of merchants, and the purpose of the charges.”8 He concludes, “Thus, a clear and specific description of the facts underlying these fraud claims, have been sufficiently alleged under Rule 9(b).”
¶ 40 However, the particularity, or lack thereof, with which Husband pleaded the credit card account allegations has no bearing on the third cause of action. That cause of action did not refer to any of the credit card account allegations. Instead, it asserted the nebulous existence of asset accounts, averred that Wife had failed to disclose them to Husband, and sought to impose a constructive trust on them. The complaint provided no identifying details about the asset accounts or, indeed, anything other than conclusory speculation that they even existed. On appeal, Husband does not argue that the asset account allegations were pleaded with particularity. Instead, he claims, inaccurately, that he pleaded misuse of a credit account with particularity.
¶ 41 Because the third cause of action concerns asset accounts and not credit accounts, Husband has failed to challenge the basis for the district court‘s determination that the third cause of action was not pleaded with the requisite particularity. When an appellant does not challenge the district court‘s basis for its determination, we will not overturn that determination. See Benns v. Career Serv. Review Office, 2011 UT App 362, ¶ 2, 264 P.3d 563 (per curiam). We therefore affirm the district court‘s dismissal of that cause of action.
V. Husband Did Not Adеquately Plead a Claim for Breach of Fiduciary Duty.
¶ 42 Husband next contends that “the district court erred by dismissing [Husband‘s] breach of fiduciary duty claim.” Both of Husband‘s first two fraud-based causes of action (the first relating to Phoenix Plaza and the second relating to the Garfield Property and the Mesquite Townhouse) also alleged that Wife breached a fiduciary duty owed to him. Without further analysis, Husband lists the citations of three cases in support of his assertion that “a fiduciary duty can exist between a husband and a wife.” But none of those cases actually supports such a proposition. One of the three cases makes no mention of either the word “fiduciary” or “duty.” See Boyce v. Boyce, 609 P.2d 928 (Utah 1980). The other two
¶ 43 Several principles guide the determination of whether a fiduciary relationship may be implied:
[T]o determine whether a fiduciary duty should be implied in law due to the factual situations surrounding the transaction and the relationship of the parties, we consider the following principles:
A fiduciary relationship imparts a position of peculiar confidence placed by one individual in another. A fiduciary is a person with a duty to act primarily for the benefit of another. A fiduciary is in a position to have and exercise and does have and exercise influence over another. A fiduciary relationship implies a condition of superiority of one of the parties over the other. Generally, in a fiduciary relationship, the property, interest or authority of the other is placed in the charge of the fiduciary. A confidential relationship may similarly arise whenеver a continuous trust is reposed by one party in the skill and integrity of another.
First Sec. Bank of Utah N.A. v. Banberry Dev. Corp., 786 P.2d 1326, 1333 (Utah 1990) (citations and internal quotation marks omitted).
¶ 44 Here, the district court ruled that “the complaint does not allege sufficient facts [to show] that [Wife] had a fiduciary duty to [Husband].”10 The court noted that Wife‘s alleged provision of accounting services “would not be uncommon in a husband/wife relationship” and did not alone place Wife “‘in a position to have and exercise and [to actually] have and exercise influence over another,‘” (Alteration in original) (Quoting First Sec. Bank, 786 P.2d at 1333). The district court further explained that, because Wife “kept the books and provided accounting services for the assets in the marital estate of which she was a co-beneficiary,” she “did not have ‘a duty to act primarily for the benefit of [Husband].‘” (Emphasis added) (Quoting First Sec. Bank, 786 P.2d at 1333).
¶ 45 On appeal, Husband points to the allegations in his complaint that, “[d]uring the course of the marriage, [Wife] served as [Husband‘s] accountant and maintained their financial records. [Wife] received an annual payment from [Husband] for her accounting services.” But while these allegations may suggest that Wife was in a position to exercise influence over Husband, he did not allege that she actually did so. Nor did he allege that she actually exercised some financial superiority over him; rather, the complaint claimed that they acted as partners. And Husband did not allege that he had reposed his trust in Wife‘s skill and integrity.
¶ 46 We conclude that Husband has not demonstrated that the district court erred in determining that the allegations in the complaint were insufficient to support a claim that a fiduciary relationship had actually arisen between Husband and Wife.11 Accordingly, we affirm the district court‘s dismissal of the breach of fiduciary duty claims.
VI. Husband Did Not Adequately Plead a Claim for Civil Conspiracy.
¶ 47 Husband contends that the district court erred by dismissing his civil conspiracy
¶ 48 “A claim for civil conspiracy must allege the following elements: (1) a combination of two or more persons, (2) an object to be accomplished, (3) a meeting of the minds on the object or course of action, (4) one or more unlawful, overt acts, and (5) damages as a proximate result thereof.” Fidelity Nat‘l Title Ins. Co. v. Worthington, 2015 UT App 19, ¶ 16, 344 P.3d 156 (citation and internal quotation marks omitted).
A. Civil Conspiracy to Commit Fraud
¶ 49 “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.”
¶ 50 Husband argues, “To the extent that [Wife‘s] breach of fiduciary duties arises from fraud; [Husband] has pled such fraud with sufficient particularity, as set forth above.” But we have determined that the district court correctly ruled that Wife did not owe a fiduciary duty to Husband and that the fraud claims relating to Phoenix Plaza and to the Garfield Property and the Mesquite Townhouse were not pleaded with sufficient particularity. Supra ¶¶ 28, 36–37. Moreover, Husband‘s civil conspiracy claim did not allege a breach of fiduciary duty.
¶ 51 In any event, we readily conclude that the civil-conspiracy-to-commit-fraud claim was not pleaded with particularity. While Husband‘s complaint stated that Wife conspired with the other defendants to defraud him, Husband offers no specificity to bolster that claim. We therefore agree with the district court that Husband failed to allege any “specific overt acts (including when, where, who, what)” in which the other defendants participated. Husband‘s complaint also asserts that the other defendants knew that “the funds they were receiving were marital assets.” But this fell short of alleging a meeting of the minds between those defendants and Wife on the object or course of action to be taken. See Worthington, 2015 UT App 19, ¶¶ 16–18, 344 P.3d 156. Moreover, the complaint was also devoid of any specificity concerning Husband‘s that the other defendants had such knowledge.
B. Civil Conspiracy to Commit Conversion
¶ 52 Husband argues that his civil conspiracy claim was not dependent on fraud and therefore need not be pleaded with particularity. However, his claim was that Wife and the other defendants “conspired ... to defraud [Husband] of marital assets and to convert those assets.” However, as noted above, Husband has not sufficiently alleged that Wife fraudulently acquired marital assets that did not belong to her. Husband thus cannot prove that those assets were then converted. We are therefore not convinced that Husband‘s civil conspiracy claim had a life independent of the fraud claim.
¶ 53 We conclude that the district court did not err in dismissing Husband‘s civil conspiracy claim, because the civil conspiracy claim relied on an underlying fraud claim that was not pleaded with particularity.
VII. The Complaint Is an Independent Action.
¶ 54 Husband‘s seventh contention is that the “district court erred by ruling that [Husband‘s] independent action brought under
VIII. Res Judicata as to the Fraud Claims.
¶ 55 Husband contends that the district court erred by ruling that his fraud claims against Wife were barred based on res judicata. Because we have affirmed the district court‘s determination that the fraud claims were inadequately pleaded, we need not address Husband‘s challenge to the district court‘s alternative ruling that the fraud claims were also barred by res judicata.
IX. Res Judicata as to Claims Against the Other Defendants.
¶ 56 Husband contends that the district court erred by ruling that his claims against the other defendants are barred by res judicata. He argues that res judicata does not bar his claims against defendants other than Wife for fraud, conversion, and civil conspiracy. We have affirmed the district court‘s determinations that those claims were inadequately pleaded. Consequently, we need not address the district court‘s alternative ruling based on res judicata or Husband‘s challenge to that ruling.
X. Wife Is Not Contractually Entitled to an Award of Attorney Fees.
¶ 57 Wife cross-appeals. She first contends that the district court erred by denying her an award of attorney fees under the Stipulation. The Stipulation provided that “[t]he prevailing party to an action for breach of a term of this Agreement shall be entitled to his or her attorneys fees and costs.” After the court granted both her motion for summary judgment and motion to dismiss, Wife filed a motion seeking $14,183.11 in attorney fees and costs.
¶ 58 The district court found that “the filing of [Husband‘s] action was not an action for breach of a term оf [the Stipulation] so the contract provision of the agreement for award of attorney fees is not applicable.” The court did not explain the basis for this finding.
¶ 59 On appeal, Wife begins by asserting that Husband breached the Stipulation. However, this action was not brought on the basis of Husband‘s alleged breaches. Accordingly, whether Husband breached the Stipulation is immaterial to the issue before us on cross-appeal.
¶ 60 Wife next asserts that Husband‘s complaint “alleges, in essence, a breach of contract claim, although labeling and presenting such claims under the rubric of fraud.” She points to Husband‘s third cause of action. There, Husband recited a portion of the Stipulation that provided, “Each party has made a full and fair disclosure to the other of his or her assets, financial condition and worth....” Husband then alleged, “[Wife] committed fraud by knowingly failing to disclose additional marital assets....” Wife also points to Husband‘s fourth cause of action, which was for conversion. There, Husband stated, “The Stipulation provided that net income from the properties were [sic] to be divided evenly between the parties.” Husband then alleged, “[Wife] has converted or has stolen funds from the joint account beyond the 50% that [she] was entitled.” Finally, Wife asserts that Husband used this action to record lis pendens on real property owned by the couple in a “not-so-veiled attempt by [Husband] to further frustrate [Wife‘s] attempts to enforce and collect amounts due [to] her under the terms of the Stipulation.”
¶ 61 Husband responds that Wife has “failed to comply with the requirements of Rule 24 of the Utah Rules of Appellate Procedure.” He states that Wife “failed to provide a statement of the issues for review, the standard of review for each issue with supporting authority, [or] a citation to the record where the issue was preserved.” Yet Wife did all of these things on pages one and two of her brief. Husband next points out that Wife did not include a copy of the district court‘s “Ruling on Motiоn to Award Attorney Fees and Costs.” This is true. However, this ruling is in the record designated on appeal and Wife‘s opening brief
¶ 62 Finally, Husband asserts that his complaint was not “an action for breach of a term of [the Stipulation],” because he was “seeking to set aside or obtain relief from [it], based on [Wife‘s] fraud.” We note that Husband‘s complaint did not explicitly allege a breach of the Stipulation and that Husband sought a declaration that the Stipulation was void rather than voidable. Although it appears that the motivation behind the litigation is Husband‘s attempt to evade the duties imposed upon him by the Stipulation, his complaint targeted the validity of the Stipulation rather than presenting “an action for breach of a term of this Agreement.” Accordingly, Wife is not entitled to an award of attorney fees under the Stipulation‘s attorney-fee provision.
XI. Wife Is Not Entitled to a Statutory Attorney-Fee Award.
¶ 63 Wife contends that she is entitled to a statutory award of fees and costs under
¶ 64 The district court found that “this action was not frivolous or brought in bad faith. The action raised valid issues which were not wholly without basis in law or fact especially on the issues of the appliсability of the statute of limitations and res judicata. Neither was the action filed in bad faith.”13
¶ 65 An action is meritless when it is “frivolous or of little weight or importance having no basis in law or fact.” Warner v. DMG Color, Inc., 2000 UT 102, ¶ 22, 20 P.3d 868 (citation and internal quotation marks omitted). Wife‘s only argument on this point is that the fraud claim was meritless because it lacked a basis “in fact or law since it had been raised in the [separate divorce action], rejected and not taken on appeal by [Husband].” Wife appears to be referring to the fraud-in-the-inducement claim. But this action consisted of more than just that single fraud claim. Furthermore, this action named parties who could not have been joined in the divorce action. We therefore conclude that Wife has not shown error in the district court‘s determination that this action was not meritless.
¶ 66 We consider next whether the action was brought in bad faith. “A party acts in bad faith when he brings an action and either (1) lacks an honest belief in the propriety of the activities in question, (2) intends tо take unconscionable advantage of others, or (3) intends to or has knowledge of the fact that his actions will hinder, delay, or defraud others.” Wardley Better Homes & Gardens v. Cannon, 2002 UT 99, ¶ 29, 61 P.3d 1009. Wife argues that the district court‘s finding was conclusory and lacked any subsidiary findings on those three factors. Wife notes the lis pendens and several motions filed by Husband and asserts that they were attempts to “hinder and delay [Wife‘s] enforcement and collection actions.” With-
¶ 67 Wife has not demonstrated that this action was meritless or that it was brought in bad faith. Accordingly, she is not entitled to an award of attorney fees under
XII. Wife Is Not Entitled to an Award of Attorney Fees Incurred on Appeal.
¶ 68 Wife seeks an award of her attorney fees incurred on appeal. Generally, a party which received attorney fees below and then prevails on appeal is entitled to fees reasonably incurred on appeal. Giles v. Mineral Res. Int‘l, Inc., 2014 UT App 259, ¶ 25, 338 P.3d 825. We have determined that the district court correctly denied an award of attorney fees to Wife. Accordingly, Wife is not entitled to an award of attorney fees reasonably incurred on appeal.
CONCLUSION
¶ 69 The district court correctly determined that this action was independent from the divorce action and that
¶ 70 Affirmed.