Silva v. SilvaSilva v. Silva
¶1 Bonnie Silva appeals the district court’s denial of her motions to set aside a default judgment and a sheriff’s sale following that judgment. She also challenges the district court’s award of attorney fees. We vacate the district court’s rulings and remand for further proceedings.
¶2 Bonnie Silva and David Silva divorced in 2010. The marital estate included interests in fifteen parcels of real property—four properties held jointly, one property held by David, and ten properties held by Bonnie.1 The decree allocated the properties and ordered the parties to execute quitclaim deeds within thirty days, conveying their interests in the properties to one another as specified in the decree. If either party failed to execute a quitclaim deed, the divorce decree authorized the other party to seek a court order to transfer title. One of the properties awarded to David was a residential property located on Dennis Drive in West Valley City, Utah (the Dennis Drive Property).
¶3 In June 2010, pursuant to the divorce decree, Bonnie executed a quitclaim deed as “Grantor Bonnie Moore, now known as Bonnie Silva,” purportedly conveying the Dennis Drive Property to David. But when David attempted to record the deed, he discovered that “Bonnie Moore[,] as Trustee for the Consolidated Trust,” actually held title to the Dennis Drive Property. He further discovered that one week before he had filed for divorce in September 2008, Bonnie had conveyed the Dennis Drive Property and other properties then in her name to herself and her daughters, K.V. Lum and R. Carter, as trustees of a trust known as the Consolidated Trust. After learning these facts, David sent a revised quitclaim deed to Bonnie, but she did not sign and return it as requested. Several months later, Bonnie, as a trustee of the Consolidated Trust, again conveyed the Dennis Drive Property and other properties to Lum, as trustee of the Consolidated Trust.
¶4 In October 2010, David filed a Motion for Contempt with the district court. Because he claimed he could not locate Bonnie, David filed a Motion for Alternative Service, which the court granted. The district court held an evidentiary hearing and entered a default judgment finding Bonnie in contempt for failing to convey the Dennis Drive Property to David. However, the court left open a window during which Bonnie could cure the contempt. If Bonnie did not convey the Dennis Drive Property to David within thirty days, the court would enter a $219,000 judgment against her. Bonnie did not convey the property to David during this time. A few months later, Lum, as a trustee of the Consolidated Trust, conveyed title to the Dennis Drive Property to Carter, as a trustee of the Consolidated Trust. The district court then entered a contempt judgment against Bonnie, reducing slightly the $219,000 by amounts David owed to Bonnie under the divorce decree.
¶5 The following month, David instituted this action against Bonnie and her daughters alleging fraudulent conveyance and seeking to quiet title to the Dennis Drive Property. David filed a motion for alternative service recounting his prior unsuccessful efforts to serve Bonnie. David asserted that the process server had attempted personal service at Bonnie’s last known address four separate times. The district court ordered alternative service by publication, which David accomplished.
¶6 Bonnie did not answer the complaint. The district court clerk consequently entered a default certificate against Bonnie, and the court ordered an evidentiary hearing on damages. Concerned that Bonnie may have received inadequate notice of the hearing, the district court rescheduled the hearing and required additional service on Bonnie. David attempted service by mailing copies of the notice of hearing to what David claimed was Bonnie’s last known address by both regular and certified mail. David also attempted personal service whereby the process server left the notice at Bonnie’s last known residence on three separate occasions. David then completed service by publication again.
¶7 Bonnie did not appear at the hearing on damages. In its Findings of Fact and Conclusions of Law, the district court concluded that “Service of Process of the Complaint and notice of the evidentiary hearing on damages were in accordance with the Rules of the Court, the Statutes of Utah, and the Constitutional requirements of due process.” The district court also determined that Bonnie
¶8 Later that month, Bonnie’s counsel entered an appearance in the district court and filed a motion pursuant to
¶9 Bonnie filed an affidavit with her
¶10 The district court denied Bonnie’s motion to set aside based upon excusable neglect on the ground that “service [of the notice] and the resulting default were appropriate.” The court reached this conclusion, in part, because the court determined Bonnie provided no evidence—despite her two affidavits—supporting her assertions that David knew where Bonnie was located and that she did not receive actual notice of the proceedings. And although the court recited the law relative to excusable neglect, the court did not address excusable neglect in its analysis. Similarly, the court denied the motion to quash for Bonnie’s failure to provide evidence of irreparable harm.
¶11 Four days later, the Dennis Drive Property and the other two properties subject to the writ of execution were sold at a sheriff’s sale. Bonnie responded with a motion for a temporary restraining order (TRO), a motion to void the execution sale, and a motion to join the sale purchasers as parties to the action. After a hearing, the district court denied the TRO on the ground that Bonnie had failed to meet the required elements for relief. The court denied the motion to join the purchasers on the ground that “[Bonnie] cites rules that apply before a judgment is made and are not applicable for a case as this one where judgment was entered.” The court noted that “even if there was no judgment in this case, there is no basis, claim, or cause of action asserted against the purchasers.” The court denied the motion to void the execution sale on the ground that the court had already ruled at the TRO hearing that the notice of sale was properly served.
¶12 Bonnie appealed the district court’s denial of her motions to set aside the default judgment and the sheriff’s sale, and the district court’s award of attorney fees to David. We issued an opinion in this matter on July 28, 2017. See Silva v. Silva, 2017 UT App 125, 402 P.3d 36, vacated, Jan. 9, 2018. We subsequently granted a petition for rehearing, vacated that opinion, and reheard the matter.
¶13 Bonnie asserts two claims of error on appeal.2 First, she contends that the district court abused its discretion in denying her motion to set aside the default judgment. We generally review a district court’s denial of a
¶14 Second, Bonnie contends that the district court abused its discretion in denying her motion to set aside the sheriff’s sale, claiming she lacked notice and pointing to irregularities in the sale. “A district court’s decision to set aside a sheriff’s sale is to be reviewed for an abuse of discretion.” Meguerditchian v. Smith, 2012 UT App 176, ¶ 9, 284 P.3d 658 (quotation simplified).
ANALYSIS
I. Rule 60(b) Motion
¶15 Bonnie first contends that the district court abused its discretion in denying her
¶16 With respect to the second requirement, Bonnie asserted excusable neglect as a basis for relief. See
¶17 Here, the district court did not address whether Bonnie’s failure to respond to the complaint was due to excusable neglect. Instead, the court’s analysis focused only on the propriety of its order authorizing alternative service. In its decision denying Bonnie’s motion to set aside, the court observed that the court had approved the alternative service and that Bonnie’s counsel had “admitted at the hearing that service upon [her] was legally proper.” On this basis, the district court concluded that “service and the resulting default were appropriate.” But the question before the court was not whether service or entry of default judgment was technically appropriate. Indeed, despite proper service and entry of an otherwise appropriate default judgment, parties under our rules are afforded an opportunity to set a judgment or final order aside. The correct inquiry, then, is whether Bonnie’s lack of actual notice constitutes a reasonable justification to set aside the default “under principles of fundamental fairness in light of the
¶18 Bonnie argues that David had “many means at his disposal to contact [her] to give notice that he was suing her, including calling and emailing her.” Her affidavit alleges that he knew “her two active email addresses, her telephone number, . . . her children, and many other means he had after 13 years of marriage” to contact her. If Bonnie’s unrefuted allegations are to be believed, then David, contrary to his representations to the court when he filed his motion for alternative service, had the ability to contact Bonnie through means that would have been more likely to reach her. If this is the case, then there was likely “reasonable justification” for Bonnie’s failure to answer. See Arbogast Family Trust, 2008 UT App 277, ¶ 23.
¶19 The district court did not address whether these circumstances made Bonnie’s failure to respond excusable. Rather, the court merely ended its inquiry upon determining that (1) the alternative service was adequate and (2) Bonnie admitted the technical legality of that service of process. Because this determination did not address Bonnie’s excusable neglect argument, we vacate the district court’s ruling and remand for further proceedings.
II. Sheriff’s Sale
¶20 Bonnie also challenges the district court’s refusal to set aside the sheriff’s sale of three of her properties to satisfy the judgment. A court “may set aside a sheriff’s sale where (1) a debtor’s property is sold at a grossly inadequate price and (2) there were irregularities during the sale that contributed to the inadequacy of price or circumstances of unfairness during the redemption period caused by the conduct of the party benefitted by the sale.” Pyper v. Bond, 2011 UT 45, ¶ 15, 258 P.3d 575.
¶21 Bonnie points to two irregularities in the sale that she believes justify setting it aside. First, she asserts that she and her attorney did not receive proper notice of the sale as outlined by
¶22 In its ruling on Bonnie’s motion to set aside the default judgment, the district court did not fully address her arguments. The ruling states simply that the court had “already addressed at the previous hearings the issue of notice of the sale (not required to be served on counsel and notice of sale not done under
¶23 The rule first states, “The officer shall set the date, time and place for sale and serve notice thereof on the defendant . . . .”
¶24 Nevertheless, the defect in service does not necessarily mean that the sheriff’s sale should be set aside. See Pyper, 2011 UT 45, ¶ 15 (stating that a sheriff’s sale may be set aside where the price is “grossly inadequate” and there are “irregularities during the sale that contributed to the inadequacy of price or circumstances of unfairness“). Further analysis is needed to make this determination. Because the district court erred in its determination regarding notice and did not fully address Bonnie’s other arguments, we remand for the district court to address those arguments.
III. Attorney Fees on Appeal
¶25 Finally, both parties request an award of attorney fees incurred on appeal. Bonnie contends that “[e]quity requires that [she] be granted her attorney’s fees for having to make this appeal.” David counters that even if Bonnie is “able to prevail on appeal, [she] would not be entitled to [her] fees,” because she was “not awarded fees below.” David also requests attorney fees on appeal because he was awarded fees in the default judgment.
¶26 “When a party is entitled to attorney fees below and prevails on appeal, that party is also entitled to fees reasonably incurred on appeal.” Jordan Constr., Inc. v. Federal Nat‘l Mortgage Ass‘n, 2017 UT 28, ¶ 71, 408 P.3d 296 (quotation simplified). “In Utah, attorney fees are awardable only if authorized by statute or by contract.” Jones v. Riche, 2009 UT App 196, ¶ 1, 216 P.3d 357 (quotation simplified). “However, in the absence of a statutory or contractual authorization, a court has inherent equitable power to award reasonable attorney fees when it deems it appropriate in the interest of justice and equity.” Stewart v. Utah Public Service Comm‘n, 885 P.2d 759, 782 (Utah 1994). “Courts have exercised that inherent power in several categories of cases,” such as “when a party acts in bad faith, vexatiously, wantonly, or for oppressive reasons.” Id. (quotation simplified).
¶27 The parties present no contract or statute authorizing attorney fees under the circumstances. Further, neither party has made the required showing or otherwise persuaded us that equity requires an award of attorney fees. Accordingly, we decline to exercise our equitable power and deny each party’s request for attorney fees incurred on appeal.
CONCLUSION
¶28 We conclude that the district court did not address Bonnie’s arguments for setting aside the default judgment and the sheriff’s sale. Accordingly, we vacate the district court’s rulings on these motions and remand for the district court to fully address Bonnie’s arguments. We deny each party’s request for attorney fees incurred on appeal.