TED W. TRONSON, Appellee, υ. RYAN EAGAR, RYAN GARDNER, JUDD SIMPSON, AND JAKE SIMPSON, Appellants.
No. 20180750-CA
THE UTAH COURT OF APPEALS
December 27, 2019
2019 UT App 212
HARRIS, Judge
Fourth District Court, Provo Department; The Honorable Darold J. McDade; No. 140401483
Justin D. Heideman and Justin R. Elswick, Attorneys for Appellee
JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGES KATE APPLEBY and DIANA HAGEN concurred.
HARRIS, Judge:
¶1 The district court entered summary judgment against four individuals—Ryan Eagar, Ryan Gardner, Judd Simpson, and Jake Simpson (collectively, Defendants)—after determining that they were all jointly and severally liable to Ted W. Tronson on a promissory note. Defendants appeal the district court‘s summary judgment ruling, but we find their arguments unpersuasive, and therefore affirm.
BACKGROUND1
¶2 In 2008, Defendants were in search of money to fund an “Internet marketing campaign.” Tronson and Howard Nelson2 agreed to lend Defendants money for that purpose, and on Octоber 15, 2008, the two sides executed two documents that are at the center of this case: a Loan Agreement and a Promissory Note. The Loan Agreement defines “Lender” as Tronson and Nelson, in their individual capacities, and defines “Borrower” as Defendants,3 in their individual capacities, although “Borrower‘s Firm” is defined as “Those Guys, LLC, a Nevada Company.” The Loan Agreement states that “Lender agrees to [l]oan Borrower monies,” in “one or more incremental disbursements,” “to fund an ongoing Internet marketing campaign.” Each
¶3 The Promissory Note, executed contemporaneously with the Loan Agreement, was signed by all five individual borrowers, over signature lines listing them only by name. It listed the “principal amount” as $25,000, but the “total amount” as $31,250, after accounting for the 25% lender fee dictated by the Loan Agreement. The funds were to be repaid in installments due over the next three months. The borrowers indicated that the promise to pay was made “[f]or value received.”
¶4 Howеver, payment of the $25,000 loan proceeds was not made by Tronson and Nelson directly, and was not paid to the borrowers individually. Instead, on October 16, 2008—the day after the documents were executed—a company controlled by Tronson and Nelson, known as Those Money Guys LLC, issued a $25,000 cashier‘s check payable to Those Guys LLC, the entity listed in the Loan Agreement as “Borrower‘s Firm.” That same day, Those Guys LLC deposited the check into its bank account.
¶5 No individual or entity ever repaid any part of the loan; the record does not contain evidence of any loan repayment efforts made by Those Guys LLC or any of the individual borrowers, or evidence of any loan repayments received by Tronson, Nelson, or Those Money Guys LLC.
¶6 Nearly six years later, in October 2014, Tronson filed suit against all five of the individual borrowers, seeking judgment against them, “jointly and severally,” for $31,250 “plus interest, attorney fees, and costs.” The complaint‘s heading identified Justin Heideman of the law firm Heideman & Associates as the
¶7 After some procedural skirmishing, a different attorney—Stony V. Olsen, current counsel for Defendants—entered an appearance on behalf of Defendants4 and filed an amended answer on their behalf. Around the same time that Olsen appeared on behalf of Defendants, a second attorney‘s name—Justin Elswick—began to appear on documents filed on behalf of Tronson. Elswick, like Heideman, is an attorney at Heideman & Associates. Over time, Elswick‘s name began to appear on both the heading as well as the signature block, where he identified himself as “[a]ttorney for Plaintiff Tеd W. Tronson.” Elswick did not file a formal notice of appearance until May 2017, after the court had granted summary judgment in Tronson‘s favor, although in April 2017—after his name had appeared on several papers filed with the court on Tronson‘s behalf—Elswick filed an affidavit attesting to some facts regarding proof of service on one of the borrowers, and in that affidavit stated, “I am counsel for the Plaintiff in the above-captioned case.”
¶8 One day after Elswick filed his affidavit, Tronson filed a motion for summary judgment, seeking final judgment against Defendants in the amount of $31,250, “plus interest and all attorney fees and costs.” The motion‘s heading identified
¶9 Despite being served with a copy of the motion, Defendants filed no timely response to it. Any timely response would have been due on May 12, 2017; four days later, Tronson filed a Request to Submit for Decision, informing the district court that the matter was ready for its decision, because “Defendants have not timely filed a response.” Later that same day, the district court signed Tronson‘s proposed order, granting
¶10 Entry of that order against them spurred Defendants into action. The very next day, Defendants filed both a belated opposition to Tronson‘s already-granted motion for summary judgment, as well as a motion asking the court to “deny or defer” the already-granted motion. Among other arguments, Defendants asserted that because they had not received the money in thеir individual capacities, they should not have to repay it in those capacities; any judgment should not be joint and several, because the Promissory Note was not an “instrument“; the Loan Agreement and Promissory Note were unconscionable; and any judgment should also include the fifth borrower who had not yet answered the complaint. A few weeks later, Defendants filed another motion, this one invoking
¶11 The court heard oral argument on all of these motions, and denied Defendants’ motions, including their rule 59 motion, thereby leaving the court‘s summary judgment order intact. In its written order, the court stated that ”
¶12 Soon after the court‘s order denying their motions was entered, Defendants filed another motion, this time invoking
¶13 Further litigation ensued regarding the amount of attorney fees to be awarded, as well as whether judgment should also be awarded against the fifth borrower who had failed to answer the complaint. Eventually, the court entered final judgment against all five borrowers, including all four Defendants, jointly and severally, in the amount of $124,550.92, which included attorney fees and interest.
ISSUES AND STANDARDS OF REVIEW
¶14 Defendants now appeal from the district court‘s original summary judgment order as well as from the orders denying their later-filed motions. “We review the district court‘s grant of
¶15 Tronson also asks us to award him the attorney fees and costs he has incurred in defending this appeal, and grounds this request in both the Loan Agreement—which allows recovery of attorney fees incurred “in enforcing” the Loan Agreement or the Promissory Note—and in
ANALYSIS
A
¶16 Defendants first take issue with the district court‘s original grant of Tronson‘s unopposed motion for summary judgment. They point out that, under applicable rules and case law, a district court may not grant a summary judgment motion merely because it is unopposed, but instead must undertake a review of the movant‘s papers to make sure that the movant, despite the lack of opposition, is actually entitled to summary judgment. While Defendants accurately describe the state of the law, their argument is ultimately unavаiling, because a court reviewing Tronson‘s unopposed summary judgment papers would conclude that Tronson is entitled to summary judgment.
¶18 But we also held that a nonmovant who fails to oppose a summary judgment motion has thereby failed to preserve any objection to the district court‘s entry of summary judgment against it, and that, on appeal, any challenge to the district
¶19 In this case, wе are not at all certain that the district court granted Tronson‘s motion solely because it was unopposed, instead of conducting its own independent review of Tronson‘s summary judgment paperwork. After all, as the court pointed out in one of its later rulings, its summary judgment order indicated that it had “reviewed [Tronson‘s] argument” and that it was granting the motion “for good cause shown.” But even assuming, for purposes of the argument, that the district court signed Tronson‘s proposed order simply because the motion was unopposed, and did not so much as glance at Tronson‘s accompanying paperwork, the court did not commit plain error here, because Tronson‘s paperwork was comрlete and his arguments were sound. The third element of plain error is
¶20 In support of his motion for summary judgment, Tronson attached sworn affidavits from himself and Nelson, asserting that, on the day after the documents were signed, the two of them had, through their entity (Those Money Guys LLC), paid $25,000 by cashier‘s check to Those Guys LLC, the entity listed as “Bоrrower‘s Firm” in the Loan Agreement. Additionally, Tronson attached copies of the Loan Agreement and Promissory Note, as well as a copy of the stub from the cashier‘s check itself, and a copy of a bank statement from Those Guys LLC, demonstrating that $25,000 had in fact been deposited into that entity‘s account on the day the check was delivered. Both Tronson and Nelson averred, in their sworn affidavits, that no repayment had ever been received by either of them.
¶21 Any judge reviewing the unopposed motion and its seven exhibits would have been satisfied that Tronson was entitled to judgment as a matter of law. The infirmity identified in Pepperwood—failure to attach the operative document—was not present here, bеcause Tronson attached copies of both the Loan Agreement and the Promissory Note. See Pepperwood, 2015 UT App 137, ¶ 10. Those documents were signed by all Defendants, and indicated that Defendants had promised, “for value received,” to repay Tronson $25,000 plus interest and fees. The papers also included evidence that the money had actually been paid to borrowers’ entity, as well as sworn testimony that it had not been repaid. Even if we assume, arguendo, that the district court neglected to actually look at the paperwork, any such error was harmless here, because the summary judgment motion, and its exhibits, demonstrate the absence of any genuine issue of
¶22 Defendants resist this conclusion by asserting that, because Tronson (through an entity) made payment to Those Guys LLC rather than to the individual borrowers, Tronson cannot seek recovery from the individual borrowers, because they did not receive the money. But, especially in the context of an unopposed summary judgment motion, this argument falls flat. All five borrowers, including all four Defendants, signed the Promissory Note, indicating that, “for value received,” they—and not a business entity—were committing to repay Tronson—and not a business entity—the loaned funds. Tronson asserted, as a factual matter, that the money had been paid to Defendants in the manner Defendants desired, and that the money had not been repaid. Those factual assertions were supported by evidence attached to the summary judgment motion, and were not contested by Defendants. Under these circumstances, the district court was justified in concluding that Defendants were obligated to repay Tronson.
¶23 In sum, the district court did not plainly err by entering summary judgment in this case, even if we assume that the court granted the motion solely because it was unopposed.
B
¶24 Defendants next appeal the district court‘s denial of their various motions, filed after the court had already granted Tronson summary judgment, in which Defendants asked the court, for various reasons, to reconsider, alter, or amend the summary judgment order. Specifically, Defendants identify three alleged infirmities in the district court‘s orders. First, Defendants assign error to the court‘s statement, in its first order on these motions, that ”
1
¶25 As to the first argument, Defendants are corrеct in assigning error to the district court‘s statement that
¶26 However, the court‘s error is in this instance harmless, because the court—during Defendants’ second round of “post-trial” motions—ended up considering the merits of Defendants’ arguments in any event. In the court‘s order on the second round of motions, it assumed, for the purposes of its analysis, that
2
¶27 Defendants now ask us to address the merits of two of the arguments they raised in their rule 59 motions and which were ultimately rejected by the district court. First, they point out that Elswick did not file a formal notice of appearance of counsel until May 2017, after the court had already granted Tronson‘s summary judgment motion, and they assert that all papers filed by Elswick prior to that date were therefore of nо force and effect, including the summary judgment motion Elswick signed and filed in April 2017. From this premise, they reason that their opposition memorandum, which was not filed until after the court granted Tronson‘s motion, was actually timely filed due to the asserted invalidity of the filing of Tronson‘s motion. We find this argument unpersuasive.
¶28 Applicable rules require that “[e]very pleading, written motion, and other paper . . . be signed by at least one attorney of record.”
¶30 Defendants resist this conclusion by pointing to two cases that they assert stand for the proposition that documents not filed by an attorney of record are subject to being stricken. See In re Discipline of Pendleton, 2000 UT 77, 11 P.3d 284; Lancino v. Smith, 105 P. 914 (Utah 1909). But both of these cases are distinguishable from the issue at hand. In Lancino, the attorney of record was out of town, and sent his offiсe mate to court to ask for a continuance. 105 P. at 914–15. However, the pinch-hitting attorney was unable to swear, under oath, that the conditions necessitating the continuance were still in effect, and the court therefore rejected the attorney‘s efforts as a foundational matter, stating that the original lawyer‘s affidavit should “have been supplemented by the oath of someone who knew, and stated that the conditions set forth in the affidavit continued the same as they were therein represented to be when it was filed.” Id. at 915. And in Pendleton, our supreme court refused to allow an attorney-litigant, who up to that point had not been proceeding pro se, to file documents over his own signature. 2000 UT 77, ¶ 48. Neither of these cases sheds any light on the currеnt issue: Lancino was decided on a foundation issue, not on an “attorney of record” issue, and Pendleton concerned the differences—not pertinent here—between a represented party and a pro se litigant.
3
¶32 Finally, Defendants object to the “joint and several” aspect of the district court‘s summary judgment order. Under Utah law, “two or more persons who have the same liability on an instrument as makers . . . are jointly and severally liаble in the capacity in which they sign.”
¶33 The term “instrument” is defined by statute as “an unconditional promise or order to pay a fixed amount of money” that also meets three other criteria not at issue here. See
¶34 First, Defendants assert that “the Promissory Note was not binding on the Defendants until such time as the Lender made payment, and . . . the Lender was under no obligation to lend money based on the Promissory Note and the Loan Agreement.” But while the Loan Agreement itself did not obligate Tronson to loan any money or Defendants to pay any money back,8 those obligations kicked in once money was
¶35 Second, Defendants point out that a document that “is subject to or governed by another writing” is not considered unconditional, see
¶36 While the Promissory Note does indeed refer to the Loan Agreement, many such references are made in passing, and even Defendants acknowledge that “a mere reference to the Loan Agreement does not, by itself, make the Promissory Note” conditional. At one point, though, the Promissory Note makes more than an in-passing reference to the Loan Agreement, stating that “if any Event of Default (as defined in the Loan Agreement) occurs under the Loan Agreement . . . , then the entire unpaid balance . . . shall . . . at once become due and payable in full.” But this rеference is not enough to render the Promissory Note conditional, because our legislature has indicated that “[a] promise or order is not made conditional by a reference to another writing for a statement of rights with
¶37 Accordingly, the district court did not err when it rejected Defendants’ arguments regarding the unconditional nature of the Promissory Note. That note is an “instrument” under Utah law, and by signing it, Defendants made an unconditional promise to pay Tronson; that promise was not rendered conditional by the note‘s reference to thе Loan Agreement for acceleration terms. Under these circumstances, the district court did not err by entering a judgment that imposed joint and several liability on Defendants.
C
¶38 Finally, Tronson asks us to award him the attorney fees and costs he reasonably incurred in defending this appeal, and asserts two separate grounds for his request. First, Tronson asserts that, as the prevailing party on appeal, he is entitled to recover fees and costs from Defendants pursuant to the language of the Loan Agreement. Second, citing
¶39 The Loan Agreement entitles Tronson to recover “all costs, and expenses, including reasonable attorney fees and legal expenses,” that he incurs “in enforcing, or exercising any remedies under this Loan Agreement [or] the Promissory Note.” Pursuant to this provision, the district court included in its
¶40 But we do not find Tronson‘s rule 33 argument as persuasive. That rule provides that, “if the [appellate] court determines that a motion made or appeal taken under these rules is either frivolous or for delay, it shall award just damages . . . to the prevailing party.”
CONCLUSION
¶41 The district court did not commit plain error by granting Tronson‘s unopposed summary judgment motion, and did not err in denying all of Defendants’ “post-trial” motions seeking alteration or amendment of the summary judgment order. Moreover, Tronson is entitled to recover from Defendants (but not from Defendants’ counsel), jointly and severally, the reasonable attorney fees and costs he incurred in defending this appeal, and we remand this case to the district court for the purpose of quantifying those fees.
¶42 Affirmed.
