text:
    2002 UT 85
    MATRIX FUNDING CORPORATION, The CIT Group/Equipment Financing, Inc., and ZCMI, Petitioners, v. UTAH STATE TAX COMMISSION, Respondent.
    No. 20000885.
    Supreme Court of Utah.
    Aug. 16, 2002.
    Rehearing Denied Aug. 14, 2002.
    Mark K. Buchi, Steven P. Young, Salt Lake City, for petitioners.
    Mark Shurtleff, Att'y Gen., Mark E. Wainwright, Asst. Att'y Gen., Salt Lake City, for respondent.
   HOWE, Justice:

BACKGROUND

T1 In May 1991, ZCMI planned to construct a retail store and parking garage in the Fashion Place Mall in Salt Lake County. ZCMI approached several banks and financiers, including Matrix Funding Corporation (Matrix), to borrow funds for construction. Matrix informed ZCMI of a financing mechanism it had used in other states that could be treated as an "operating lease" for financial reporting purposes and as a loan for tax purposes. ZCMI was interested in Matrix's proposal because under generally accepted accounting principles (GAAP), ZCMI would not be required to report payments under an "operating lease" as a liability on its balance sheet. Concurrently, ZCMI would remain the legal owner of the collateral for depreciation and tax purposes.

T2 Matrix requested an advisory opinion from the Utah State Tax Commission as to whether a proposed sale and leaseback transaction with an unnamed customer would be subject to Utah sales tax. On July 11, 1991, the Commission issued an advisory opinion that sales tax would be due on the lease payments made by the customer. On July 16, 1991, Matrix and ZCMI entered into a Master Lease Agreement, a Sale and Leaseback Agreement, and Equipment Schedule No. 1. The terms of these agreements were "identical, in all relevant respects" to the proposed transaction on which Matrix had sought the advisory opinion. ZCMI and Matrix subsequently entered into seven additional Sale and Leaseback Agreements and executed an additional Equipment Schedule to the Master Lease Agreement on each such occasion.

13 Pursuant to the terms of the agreements, ZCMI sold property that it owned and used in its business operations to Matrix and agreed to lease the property back from Matrix. The property had been used by ZCMI for varying lengths of time, sometimes for many years prior to the sale to and leaseback from Matrix. Each Sale and Leaseback Agreement set forth the purchase price to be paid by Matrix, and provided: "The parties agree that title to the Equipment shall pass from Seller [ZCMI] to Buyer [Matrix] on the Closing Date."

T4 Each Equipment Schedule set the terms for leasing the equipment back from Matrix. Upon the signing of each Sale and Leaseback Agreement, Matrix made a lump-sum payment to ZCMI of between $0.4 and $3.2 million. Each lease had a term of sixty months and set forth fixed amounts for monthly rental payments, contingent rental payments, full and reduced purchase option prices, and the walk-away payment to be paid if the purchase option was not exercised. The payments required to be made were dependent upon the Consumer Price Index (CPT) as follows:

(a) If there was any increase in the CPI during the first 12 months of the lease, ZCMI's monthly lease payments would increase to the contingent rental payments for months 183 through 60. ZCMI could then exercise the purchase option at the reduced purchase option price or return the property to Matrix and pay the walkaway payment. The reduced purchase option price and the walk-away payment were equal in amount.
(b) If there was no increase in the CPI during the first 12 months of the lease, ZCMI's monthly lease payments would remain at the lower amount during the 60 month lease. ZCMI could then either exercise the purchase option by paying the full purchase option price, or return the property to Matrix and pay the walk-away payment. The full purchase option price was higher than the walk-away payment.

15 ZCMI and Matrix created the contin-geney in the lease payment amount in an effort to have the transaction viewed as an operational lease rather than a capital lease for financial reporting purposes. ZCMI obtained an opinion from Deloitte and Touche that the transaction qualified as an operating lease under GAAP.

16 Matrix appealed from the Commission's July 1991 advisory opinion relating to the transaction by seeking a declaratory order from the Commission. In December 1992, the Commission issued a declaratory order that the transaction would be subject to sales tax. Matrix sought review of the declaratory order under Utah Code Ann. § and we transferred the case to the court of appeals, which affirmed the Commission's order. See Matrix Funding v. Aud. Div. of the Utah Tax Comm'n, 868 P.2d 882 (Utah Ct.App.1994).

17 Subsequently, Matrix sought certiorari review of the court of appeals decision by this court. Matriz Funding v. Aud. Div. of Utah State Tax Comm'n, 912 P.2d 960 (Utah 1996). While the review in this court was pending, the Utah legislature made statutory changes to the sales and use tax statutes effective July 1, 1995, relating to sales and leaseback transactions. Based on the legislative changes, and viewing Matrix's review as involving a hypothetical future transaction, this court issued a decision in January 1996, which held the case to be moot. Matrix filed a petition for rehearing in which it acknowledged to the court that "[aletual transactions have been consummated with terms that are identical, in all relevant respects with the terms of the prospective agreement." This court denied the petition.

1 8 While the case was pending, in a letter dated January 31, 1995, Matrix filed claims with the Commission requesting a refund of sales tax ZCMI paid and Matrix remitted from October 1991 through December 1994 in connection with the sales and leaseback transactions. At the suggestion of Matrix, action on the claims for a refund was held in abeyance pending the outcome of the case.

19 After this court issued its opinion, counsel for Matrix and ZCMI sent a letter dated November 26, 1996, to the Commission noting that Matrix was anxious to pursue its refund claim for October 1991 through December 1994. Regarding post-1994 claims, the letter stated, "In addition, we will be filing additional claims for periods after 1994." Matrix asserts that this language constituted a valid claim for taxes it paid in 1995.

10 The Taxpayer Service Division of the Utah State Tax Commission (the Division) viewed a subsequent letter sent on February 26, 1999, as the initial claim for refund for sales taxes paid by ZCMI from January 1995 through February 1999. Matrix stated that - this subsequent letter was an "amended sales tax refund request" and then outlined its specific claims beginning in January 1995. The Division issued a statutory notice in response to the refund request for January 1995 through February 1999 in which all claims for 1995 were denied because the statute of limitations had run. The Division then indicated that the parties were finalizing a partial settlement that would resolve all claims for January 1996 through February 1999.

€11 Matrix filed a petition for redetermi-nation with the Commission contesting the denial of a portion of the requested refund. The Commission approved a stipulation for partial settlement in November 1999 that provided for (1) the refund of a portion of the sales tax which ZCMI had paid, amounting to $282,002.95 plus interest, which was the tax paid on lease payments related to real property and personal property located outside Utah from October 1991 through December 1994 and from January 1996 through February 1999 and (2) withdrawal of the portion of the refund claims for tax paid on lease payments related to Utah personal property for periods after the July 1, 1995, statutory change.

T12 Matrix and ZCMI's remaining three claims before the Tax Commission were for sales tax paid (1) from October 1991 through December 1994 on lease payments related to Utah personal property, amounting to $227,652.71; (2) from January 1995 though June 1995 on lease payments related to Utah personal property, amounting to $45,700.53; and (3) from January 1995 through December 1995 on lease payments related to real property and property located outside of Utah amounting to $44,472.77.

{13 In September 2000, the Commission conducted a formal hearing and issued a decision denying each remaining refund request. ZCMI and Matrix now seek review of the Commission's decision.

ANALYSIS

T14 Matrix raises two issues. The first one is whether a sale and leaseback financing transaction between ZCMI and Matrix involved a "sale" for sales tax purposes under sections 59-12-102(10) and 59-12-108(1)(a) of the Utah Code for periods prior to July 1, 1995. Utah Code Ann. 59-12-102(10), - 103(1)(a) (1992). The second is whether the letter Matrix filed with the Commission on November 26, 1996, constituted a claim for a refund under section 59-12-110(2), thus tolling the statute of limitations on ZCMI's request for a sales tax refund of taxes paid in 1995. Utah Code Ann. § 59-12110(2)(b) (1996).

I. SALE AND LEASEBACK TRANSACTION

{15 ZCMI sought capital financing from Matrix. To that end, ZCMI and Matrix entered into a Master Lease Agreement, which provided for the transfer of title of certain personal property from ZCMI to Matrix. ZCMI and Matrix executed both a Sale and Leaseback Agreement (the Agreement) and an Equipment Schedule to the Master Lease Agreement to initiate each such transaction. The Commission asserts that two transactions occurred as a result of the parties' agreements: (1) a sale of equipment from ZCMI to Matrix, and (2) Matrix's lease of the equipment to ZCMI. Sales tax in Utah is a transaction-oriented tax governed by the Utah Sales and Use Tax Act. Within this Act, section 59-12-108(1) defines what transactions are subject to taxation:

There is levied a tax on the purchaser for the amount paid or charged for the following:
(a) retail sales of tangible personal property made within the state;
(k) leases and rentals of tangible personal property if the property situs is in the state, if the lessee took possession in this state, or if the property is stored, used, or otherwise consumed in this state.

Id. § 59-12-108(1)(a), (k) (2000). Under this section, both sales and lease transactions are subject to sales tax. Matrix raises several arguments against the taxable nature of the transactions, which we address in turn.

A. Sale Transaction

T16 Determining the meaning of the word "sale" under sections 59-12-102(1), -108(1)(a) (1992) is a question of law for which this court must grant the Commission no deference, applying a correction of error standard. Id. § 59-1-610(1)(b) (2000).

1 17 A "sale" for Utah sales tax purposes is defined as

any transfer of title, exchange, or barter, conditional or otherwise, in any manner, of tangible personal property or any other taxable item or service under Subsection 59-12-108(1), for a consideration.

Id. § 59-12-102(24) (2000). The Commission found that ZCMI transferred title of tangible personal property under the Agreement which states, "The parties agree that title to the Equipment shall pass from the Seller [ZCMI] to the Buyer [Matrix] on the Closing Date." It is undisputed that sales tax is not imposed on this transaction since Utah Code Ann. § 59-12-104(26) (2000) exempts transactions where tangible personal property is purchased for resale. The Commission does not dispute that Matrix's purchase of the property would be for resale within the ambit of the statute since Matrix intended to lease the property to ZCMI with the option to purchase the property at the end of the lease.

118 At issue is whether title actually passed from ZCMI to Matrix under this first transaction. If title passed to Matrix, the subsequent leaseback to ZCMI would be taxable. Id. § 59-12-108(1)(k). If a sale transaction did not occur, ZCMI retained title and the subsequent leaseback would be in form only, not in substance, and therefore could not be taxable. Matrix urges this court to analyze whether a transfer of property occurred under the Utah Uniform Commercial Code (UUCC), which Matrix argues requires the conclusion that title to the property was not actually transferred to Matrix. The Commission asserts that because a sale occurred under the Sales and Use Tax Act, title necessarily was transferred. For the reasons set out below, we hold that we need not analyze this transfer of title issue under the UUCC.

119 In support of its argument that the UUCC must be applied to assess whether a transfer occurred, ZCMI relies on Hales Sand & Gravel, Inc. v. Utah Tax Comm'n, 842 P.2d 887 (Utah 1992). In Hales, this court was faced with the question of whether title passed at the point of shipment or at the point of delivery where there was no explicit provision in the sales agreement. Id. at 891-94. Applying the UUCC, this court held that "unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods." Id. at 892 (quoting Utah Code Ann. § TOA-2-401(2) (1997)). This section describes the point at which title transfers; it does not refer to whether title has passed and is therefore inapposite to the issue at hand. Further, the parties in the case at bar "otherwise explicitly agree[d]" in the Agreement that title passed at closing. Id.

€20 In arguing that the UUCC should govern the transaction, Matrix has failed to address a central UUCC provision. Section 7OA-1-102(8), entitled "Purposes-Rules of construction," states:

The effect of provisions of this act may be varied by agreement, except as otherwise provided in this act and except that the obligations of good faith, diligence, reasonableness and care prescribed by this act may not be disclaimed by agreement but the parties may by agreement determine the standards by which the performance of such obligations is to be measured if such standards are not manifestly unreasonable.

Utah Code Ann. § 70A-1-102(8) (1997) (emphasis added).

121 Under this section, the parties in the case at bar were free to enter into a contract inconsistent with the provisions of the UUCC, so long as the underlying obligations of good faith, diligence, reasonableness, and care were preserved and the standards in the contract not manifestly unreasonable. See id.

T 22 The Agreement states:

3. Title. The parties agree that title to the Equipment shall pass from Seller [ZCMI] to Buyer [Matrix] on the Closing Date.

The contract is clear; title passed on the closing date from ZCMI to Matrix. Matrix cannot come before us now and undo its contract by reference to the UUCC when the UUCC itself states that an agreement between the parties as to issues pertaining to the transfer of title supersedes the UUCC.

123 Matrix and ZCMI also had before them the July 11, 1991, advisory opinion that sales tax would be due on the lease payments made by ZCMI. On July 16, 1991, Matrix and ZCMI entered into a Master Lease Agreement, a Sale and Leaseback Agreement, and Equipment Schedule No. 1. The terms of these agreements were "identical, in all relevant respects" to the proposed transaction on which Matrix had sought the advisory opinion. Matrix entered the transaction understanding the potential sales tax implications. We therefore hold that title passed to Matrix from ZCMI under the clear provision of the Agreement. This sale is tax exempt, however, as a purchase for resale. Utah Code Ann. § 59-12-104(26) (2000).

B. Leaseback Transaction

124 Next, we must determine whether the lease transaction from Matrix back to ZCMI was taxable. Matrix emphasizes that we should analyze the leaseback transaction under the UUCC to determine whether it was a lease (true lease) or a security interest {lease intended as a security). Matrix argues that if the transaction is viewed as a lease intended as a security, ZCMI retained title and the resulting transaction is nontaxable. We disagree.

1] 25 We begin by reviewing the applicable portion of section 59-12-108, which states:

(1) There is levied a tax on the purchaser for the amount paid or charged for the following:
(a) retail sales of tangible personal property made within the state;
(k) leases and rentals of tangible personal property if the property situs is in this state, if the lessee took possession in this state, or if the property is stored, used, or otherwise consumed in this state.

Id. § 59-12-1083. Subsection (k) requires a taxpayer to remit taxes on leases of the taxpayer's tangible personal property located within Utah. We agree with Matrix's assessment that the vital issue in this case is "whether title transferred to Matrix." We have determined that title indeed transferred to Matrix from ZCMI via the Sales and Leaseback Agreement. Having determined that it did, we find that Matrix leased certain tangible personal property located in Utah to ZCMI as described by section 59-12-108(k) (2000). Therefore, a taxable event occurred under the Utah Sales and Use Tax Act.

126 Moreover, even if viewed as a lease intended as a security arrangement as urged by Matrix, the transaction would be subject to sales tax. In that case, there would be a sale back to ZCMI with Matrix retaining a security interest in the property. This transaction would be taxable under section 59-12-103(1)(a). A "sale" is further defined in seetion 59-12-102(24), which provides:

"Sale" means any transfer of title, exchange, or barter, conditional or otherwise, in any manner, of tangible personal property or any other taxable item or service under Subsection 59-12-108(1), for consideration. It includes:
(d) any transaction if the possession of property is transferred but the seller retains title as security for the payment of the price.

Id. § 59-12-102(24)(d). Matrix's argument assumes that if the transaction is a lease intended as a security arrangement, title necessarily remained with ZCMI throughout the transactions. However, by the terms of the Agreement, we have concluded that title passed to Matrix on the closing date. A sale had taken place at that time, but this sale was exempt from sales tax. Thus, if ZCMI held title during the course of the lease, the title necessarily was transferred back to ZCMI by Matrix through the Agreement, with Matrix retaining a security interest.

127 We agree with Matrix that further evaluation of the terms of the leaseback transaction could establish the nature of the lease, whether it is a true lease or a lease intended as security arrangement under the UUCC. This evaluation would determine whether the resulting lease is an operating lease or a capital lease for financial reporting purposes. Here, we need not make such a distinction because the same amount of tax is payable on both true leases and leases intended as security. Addressing this issue, the court of appeals stated:

The leaseback transaction from Matrix to Customer is, however, subject to sales tax regardless of whether it is a true lease or a lease intended as security. If the leaseback transaction is a true lease, it is clearly subject to sales tax under Utah Code Ann. § 59-12-1083(1)(k) which levies a tax on "leases and rentals of tangible personal property."
If the leaseback transaction is a lease intended as security, it is subject to sales tax as a sale from Matrix to Customer under Utah Code Ann. § 59-7-102(10)(e) (1992).

Matrix Funding v. Utah State Tax Comm'n, 868 P.2d 832, 834 (Utah Ct.App.1994). We adopt the rationale of the court of appeals and hold that because title transferred from ZCMI to Matrix, the subsequent transaction was either a true lease or a lease intended as security, both of which are taxable transactions.

C. Treatment of Sales and Leaseback Agreements as Non-Taxable Financing Arrangements

128 Matrix urges this court to ignore the form of the Agreement and hold that the substance of the transactions at issue is nontaxable financial arrangements. For support, Matrix cites cases from other states that have held that because the substance of a leaseback transaction was not a lease but a secured transaction, it should not be taxable. Approximately twenty states have addressed whether sale and leaseback agreements are subject to sales tax. At least three states, Minnesota, Arizona, and Indiana, have made decisions that closely follow the approach taken by the Commission and the court of appeals.

129 In Midwest Federal Savings & Loan Ass'n v. Commissioner of Revenue, 259 N.W.2d 596 (Minn.1977), the Minnesota Supreme Court recognized two distinct transactions in a sale and leaseback similar to those in the instant case and held that the lease was subject to use tax. Midwest agreed to sell its equipment to NCR and simultaneously execute a lease agreement under which the equipment would be leased back to Midwest. Refuting Midwest's argument that assessing the use tax would result in double taxation, and concluding that two transactions had occurred under the sale and leaseback agreement, the Minnesota court stated:

No tax was paid on the sale of the equipment to NCR, since it was located in New York. The use tax imposed by the commissioner is based on the lease of the equipment to [Midwest], the third of three distinct transactions.

Id. at 599. The three transactions found by the court were: (1) Midwest's original aequi-sition of the equipment; (2) NCR's purchase of the equipment under the sale and leaseback agreement; and (8) Midwest's lease of the equipment from NCR pursuant to the sale and leaseback agreement. Id.

1 30 Likewise, in Monarch Beverage v. Department of State Revenue, 589 N.E.2d 1209 (Ind.Tax 1992), the Tax Court of Indiana held that three distinct transactions occurred among three parties: Hackney, Monarch, and Geleco. According to the agreement, Monarch was to purchase trucks from Hackney and then enter into a sale and leaseback agreement with Geleo whereby Geleo would purchase the trucks from Monarch. Geleo would then lease the trucks back to Monarch. The court rejected the argument that Matrix asserts in this case, that only one transaction occurred in substance. The court held that "Islales and use taxes are transactional taxes imposed upon the gross income received from a retail transaction. Therefore, sales or use tax can be collected more than once on the same item if the item is the subject of more than one nonexempt retail transaction." Id. at 1214 (citations omitted).

131 The court in Monarch reasoned that the sale from Hackney to Monarch was taxable. The court also held that the leaseback of the equipment by Monarch from Geleo was taxable. Only the sale of the equipment by Monarch to Geleo was exempt from taxation since Geleo purchased the equipment to lease it back to Monarch. Id. at 1214 n. 14.

132 In Honeywell Bull, Inc. v. Arizona Department of Revenue, Ariz. Bd. Tax.App. No. 646-89-S, January 28, 1990, the tax court of appeals found two transactions in a sale and leaseback agreement. In Honeywell, Blue Cross of Arizona entered into an agreement wherein Blue Cross sold its computer to CAR and CAR leased the equipment back to Blue Cross. The Arizona Department of Revenue determined that two transactions occurred: (1) Blue Cross's sale of the computer to CAR, and (2) the leaseback of the computer by Blue Cross. The Honeywell court rejected the taxpayer's argument that it intended the agreement to be one transaction, stating that such an argument was not a "sufficient basis" to justify treating it as a single transaction. Id.

133 Similarly, we reject Matrix's contention that the substance of the transaction before us should be viewed as a nontaxable financing transaction for sales tax purposes. Certainly, for GAAP purposes, Matrix intended the transaction to be viewed as an operating lease, which would not require disclosure as a liability on ZCMI's balance sheet. The application of our tax laws is not, of course, subordinate to GAAP principles. Still, when a party structures a transaction to conform to GAAP in an effort to meet a particular accounting objective, that party should not be permitted to recast the form, substance, and intention of the transaction for sales tax purposes. Accordingly, we conclude that sales tax should be assessed on the transaction outlined in the Agreement.

II, EFFECT OF STATUTE OF LIMITATIONS ON 1995 CLAIMS

134 On November 26, 1996, Matrix sent a letter to the Commission referencing prior refund claims for October 1991 through December 1994. The letter also states, "[ Wle will be filing additional claims for periods after 1994." Matrix contends that this letter alerted the Commission to a fortheom-ing claim for 1995 and should therefore toll the statute of limitations. Determining the meaning of the word "claim" under section 59-12-110(2)(b) is a question of law for which this court grants the Commission no deference, applying a correction of error standard. Utah Code Ann. § 59-1-610(1)(b) (2000). The relevant statute provides:

Except as provided in Subsection (2)(c) or Section 19-2-124, a taxpayer shall file a claim with the commission to obtain a refund or credit under this Subsection (2) within three years from the day on which the taxpayer overpaid the tax, penalty, or interest.

§ 59-12-110(2)(b) (2000). Under this seetion, a refund may be obtained from the Commission if a claim is filed within three years from the date of payment. The Commission asserts that the language in the November 26, 1996, letter clearly and unambiguously signals Matrix's intention of filing subsequent claims for periods after 1994 but that the letter itself does not purport to constitute a claim for 1995.

1385 We have not heretofore addressed what constitutes a "claim for refund" under the Sales and Use Tax Act. In support of its argument that its letter was sufficient to meet the demands of the statute of limitations in section 59-12-110(2)(b), Matrix refers to an "informal claims doctrine" as used in United States v. Kales, 314 U.S. 186, 62 S.Ct. 214, 86 L.Ed. 132 (1941). In Kales, a taxpayer sent a letter to the IRS challenging a stock revaluation. In the letter, the taxpayer stated that " 'if for any reason a revaluation shall be had' she ... 'will claim the right to a refund of the excess tax collected.' '' Id. at 190, 62 S.Ct. 214. A revaluation subsequently occurred and the taxpayer filed a formal claim after the statute of limitations had run. The Supreme Court noted, "This Court ... has often held that a notice fairly advising the Commissioner of the nature of the taxpayer's claim," will be treated as a claim, where formal defects and lack of specificity have been remedied by amendment filed after the lapse of the statutory period." Id. at 194, 62 S.Ct. 214. The court noted that the facts of the situation were well known to the IRS and that the "claim" gave the IRS notice that the taxpayer was setting forth her right to a refund. Id. The court also stated that the "use of the future tense in stating a claim may, with due regard to the cireumstances of making it, rightly be taken as an assertion of a present right." Id. at 195, 62 S.Ct. 214.

136 The Kales line of reasoning has been followed in subsequent federal cases. Although Matrix has outlined the Kales line of cases in its brief, it has not addressed the effect of subsequent IRS regulations and cases interpreting the regulations that weaken the holding in Kales. Matrix's claim that only notice of a potential future claim is necessary under federal law is therefore not wholly accurate.

T37 Section 59-12-110(2)(b) requires that the taxpayer file a claim for a refund. In absence of Commission rules or legislation to the contrary, we hold that Matrix's interpretation of the informal notice accepted in Ka-les is insufficient to be deemed a claim for purposes of section 59-12-110(2)(b). Matrix's letter to the Commission stated that "we will be filing additional claims for periods after 1994." This letter does not indicate to the Commission presently asserted grounds for refund, nor does it advise the Commission of the specific nature of Matrix's claim. Indeed, the purported informal claim refers only to the year for which it will be filing for a refund at some future point. We hold that the language in this letter does not contain sufficient grounds upon which a refund can be claimed and the facts presented in the letter did not apprise the Commission of the basis of the refund claim. Because the November 1996 letter did not constitute a sufficient claim, it did not toll the statute of limitations which ran in 1999, and plaintiffs' 1995 claims are therefore barred.

CONCLUSION

1[ 38 We affirm the decision of the Commission that the sale and leaseback transaction between ZCMI and Matrix is taxable. Further, Matrix's refund claims for 1995 are barred by the statute of limitations.

1 39 Chief Justice DURHAM, Associate Chief Justice DURRANT, Justice WILKINS, and Judge NEHRING concur in Justice HOWE's opinion.

11 40 Having disqualified himself, Justice RUSSON does not participate herein; District Judge RONALD E. NEHRING sat.

      . Matrix asserted this position in a petition for rehearing before this court on January 18, 1996.

      . The property included such things as noninven-tory furniture, equipment, Sheetroqk, walls, wall coverings, paint, clothing racks, store fixtures, store displays, electrical wiring, cabinets, mirrors, light fixtures, carpet, etc.

      . Section 59-12~102(22)(c) of the Utah Code outlines the current legislative scheme. This section provides that no sales tax is due on a sale and leaseback transaction where a taxpayer has paid sales tax when it initially purchased the goods, so long as two conditions are met: (1) the transaction is intended as a financing transaction and (2) the lessee capitalizes the property for financial reporting purposes under generally accepted accounting principles. Id. The lessor is effectually barred from claiming a sales tax exemption and then treating the financing transaction as a lease for financial reporting purposes. See Stewart J. Beyerle, Tax Exemptions in Sale and Leasebacks Intended as Financing Arrangements, 7 J. Multistate Tax'n 261, 266 (Jan.-Feb.1998).

      . Subsection (k) of this section was renumbered when section 59-12-103 underwent stylistic and punctuation changes on July 1, 2001. The quot, ed section above is identical to the subsection under which Matrix was taxed although numbered differently.

      . This section was previously numbered as different subsections of section 59-12-102. The changes do not affect the substance of this appeal.

      . This section was previously numbered as differ-eni subsections of section 59-12-104. The changes do not affect the substance of this appeal.

      . One commentator has described the impetus for this sort of arrangement when he stated, "The basic drives of man are few: to get enough food, to find shelter and to keep debt off the balance sheet." Richard Green, The Joys of Leasing, Forbes, Nov. 24, 1980, at 59; see also Unocal Corp. v. Kaabipour, 177 F.3d 755, 765 (9th Cir. 1999) (''The entire point [of this type of arrangement] is that it is treated as an operating lease for accounting purposes, but is otherwise regarded by virtually all concerned, including the government, as a secured loan."). A true lease under UUCC guidelines will generally be classified as an "operating lease" for financial operating purposes, and a lease intended as security will generally be classified as a "capital lease" for financial reporting purposes. Matrix and ZCMI incorporated contingency provisions relating to the lease payments based on the CPI into the Agreement in an attempt to have the leases viewed as leases intended as security under the UUCC and "operating leases" for financial reporting purposes.

      . Matrix also cites Board of Equalization of Salt Lake County v. First Security Leasing, 881 P.2d 877 (Utah 1994), extensively for the proposition that the substance of the transaction was a lease intended as a security interest as opposed to a true lease. See Utah Code Ann. § 70A-1-201(37). We need not analyze this case because we determined above that a transfer of title occurred. Id. § 59-12-102(24)(d). That is, having addressed and confirmed the Commission's finding that title transferred from ZCMI to Matrix, a subsequent lease or security interest would be a taxable transaction. See 1 35.

      . A somewhat comprehensive listing is provided in Beyerle, Tax Exemptions in Sale and Leasebacks Intended as Financing Arrangements, 7 J. Multistate Tax'n 261 (1998).

      . We recognize that other courts disagree as cited by Matrix, but these cases are not binding, and we do not find their analysis persuasive. In re Sherwood Diversified Serv., Inc., 382 F.Supp. 1359 (S.D.N.Y.1974); Cedars-Sinai Med. Ctr. v. State Bd., 162 Call.App.3d 1182, 208 Cal.Rptr. 837 (1984); Footpress Corp. v. Strickland, 242 Ga. 686, 251 S.E.2d 278 (1978); Transamerica Leasing Corp. v. Bureau of Rev., 80 N.M. 48, 450 P.2d 934 (App.1969); Bullock v. Citizens Nat'l Bank of Waco, 663 S.W.2d 923 (Tex.Ct.App.1984).

      . See United States v. Commercial Nat'l Bank, 874 F.2d 1165, 1171 (7th Cir.1989) (holding letter constituted claim where it stated that "excluding the Madison property will result in some income tax benefits to the estate"); Crenshaw v. Hrcka, 237 F.2d 372, 373 (4th Cir.1956) (holding letter put IRS on notice where letter states that "it is our intention as soon as the entire amount is paid to file claims for refund for what amounts we consider proper"); American Radiator & Standard Sanitary Corp. v. United States, 162 Ct.Cl. 106, 318 F.2d 915, 920 (1963) (holding reference to refund on filed tax schedule constituted sufficient informal claim); Stuart v. United States, 131 Ct.Cl. 174, 130 F.Supp. 386, 388-90 (Ct.Cl.1955) (holding valid claim existed where taxpayer wrote on waiver that his signature on waiver should not be construed as "barring any future claim for refund"); Cumberland Portland Cement Co. v. United States, 122 Ct.Cl. 580, 104 F.Supp. 1010, 1013-15 (1952) (holding claim valid where letter stated that ""it is very desirable that a prompt settlement be made in this matter of over assessment"); Night Hawk Leasing Co. v. United States, 84 Ct.Cl. 596, 18 F.Supp. 938, 941-42 (1937) (holding check constituted claim where taxpayer wrote on back, "This check is accepted as paid under protest pending final decision of the higher courts."). Only one state has applied the informal claims doctrine to a state tax case. Director of Rev. v. Milford Fertilizer Co., 539 A.2d 193 (Del.1988).

      . Treasury Regulation § 301.6402-2(b) requires that a claim for a refund "set forth in detail each ground upon which a credit or refund is claimed and facis sufficient to apprize the Commissioner of the exact basis thereof." 26 C.F.R. 301.6402-2(b)(1) (2001). Interpreting these rules, the Tenth Circuit recently set forth the jurisdictional requirement for a court to maintain a tax refund suit:
      Under these rules, if the taxpayer does not adequately raise an issue at the administrative level, the courts have no jurisdiction to consider the issue in a later suit for refund. These requirements serve to apprise the Internal Revenue Service of the nature of the claim and its underlying facts, so that it can make a thorough administrative investigation and determination, correct any errors, and " 'limit the scope of any ensuing litigation to those issues which have been examined and which [it] is willing to defend.' ".... It is not enough that in some roundabout way the facts supporting the claim may have reached the attention of the Internal Revenue Service.
      True v. United States, 190 F.3d 1165, 1171-72, 1173 (10th Cir.1999) (citations omiited). The Tenth Circuit has also recognized that "these rules are nonwaivable jurisdictional requirements.'' In re Graham, 981 F.2d 1135, 1138 (10th Cir.1992); see also United States v. Dalm, 494 U.S. 596, 601-02, 110 S.Ct. 1361, 108 L.Ed.2d 548 (1990) (discussing relevant federal IRS statutes). These cases illuminate the current status of what constitutes a claim in the federal realm.

      . Several federal appellate courts have cited Treasury Regulation § 301.6402-2(b) and held that the claims were untimely or too ambiguous. See Salyersville Nat'l Bank v. United States, 613 F.2d 650, 651 (6th Cir.1980) (citing regulation and holding that "plaintiff is barred from relying on any basis for relief not raised in its claim for a refund"); Union Mut'l Life Ins. v. United States, 570 F.2d 382, 393 (1st Cir.1978) (reasoning that failure to mention alternative ground for recovery in initial claim renders alternative claim unavailable at trial); Sappington v. United States, 408 F.2d 817, 819 (4th Cir.1969) (holding that failure to comply strictly with regulation, including filing a timely, unambiguous claim, bars recovery); United States v. Henderson Clay Prods., 324 F.2d 7, 17 (5th Cir.1963) (stating that " 'the principal requirement of the statute ... and regulations ... is that the Commissioner be apprised by the timely filing of a claim of the exact basis upon which the claim for refund is predicated" ").


source: Caselaw Access Project

author: GREENWOOD, Judge: ORME, Judge

license: Public Domain

text:
    2002 UT App 247
    Silvia NUÑEZ, Plaintiff and Appellant, v. Dominic ALBO, M.D., Defendant and Appellee.
    No. 20010037-CA.
    Court of Appeals of Utah.
    July 18, 2002.

      Loren M. Lambert, Arrow Legal Solutions, Midvale, and David R. Olsen and Paul M. Simmons, Dewsnup King & Olsen, Salt Lake City, for Appellant.
    Brian P. Miller, David G. Williams, and Kenneth L. Reich, Snow Christensen & Mar-tineau, Salt Lake City, for Appellee.
    Before Judges DAVIS, GREENWOOD, and ORME.
   OPINION

GREENWOOD, Judge:

T1 Silvia Nufiez brought a medical malpractice action as a result of treatment she received for telangiectasia (spider veins) by Dr. Dominic Albo. Dr. Albo moved for summary judgment based on his personal immunity under the Utah Governmental Immunity Act (the Immunity Act). Ms. Nufiez filed a motion to amend her complaint. The trial court granted Dr. Albo's motion for summary judgment and denied Ms. Nufiez's motion to amend. Ms. Nufiez appeals. We affirm the grant of summary judgment, but reverse the denial of Ms. Nufiez's motion to amend.

BACKGROUND

12 Dr. Albo is a general surgeon, with a special emphasis in varicose vein treatment, and has been employed as a faculty member at the University of Utah's School of Medicine (the University) in the Department of Surgery since July 1968. As a University faculty member, Dr. Albo must maintain a clinical practice as a condition of his employment. The University pays for Dr. Albo's clinic, medical supplies, and medications used in his treatment of patients. All billings and collections for Dr. Albo's medical services are handled by the University. Dr. Albo does not receive direct compensation for his medical practice, but instead receives a salary from the University.

T3 On May 8 and 20, 1998, Dr. Albo treated Ms. Nufiez for spider veins in her legs at his clinic located near the Salt Lake Regional Medical Center (SLRMC) during regular business hours. Ms. Nufiez's treatment consisted of injection sclerotherapy. Prior to treatment, Ms. Nufiez signed both a consent form describing the potential complications associated with injection selerothera-py and an acknowledgment form stating she understood that Dr. Albo was an employee of the University and subject to the provisions of the Immunity Act. Ms. Nufiez alleged that as a result of the injection sclerotherapy treatment, she suffered complications consisting of brown spots, ulcers, hyper-pigmentation, and severe searring on her legs. On or about January 6, 1999, Ms. Nufiez sent a notice of claim to Dr. Albo and to the Utah Attorney General pursuant to the Utah Health Care Malpractice Act (the Malpractice Act), Utah Code Ann. §§ 78-14-1 to -16 (1996).

T4 On February 16, 1999, the Director of the University of Utah Hospital and Clinic's Risk Management Department (Risk Management) responded to Ms. Nufiez's notice of claim letter, asking her to refrain from contacting Dr. Albo and to direct future communication to either Lynda P. Faldmo of Risk Management or David G. Williams, Dr. Albo's counsel.

15 After complying with the prelitigation requirements of the Malpractice Act, Ms. Nunez filed an action against Dr. Albo, claiming he had breached the applicable standard of care in treating her and failed to obtain her informed consent for treatment. Dr. Albo filed a motion for summary judgment, claiming that he is immune from personal liability under the Immunity Act because he is an employee of the University, and that his care and treatment of Ms. Nufiez were within the course and scope of that employment. Ms. Nunez filed a motion for leave to amend her complaint to name the University and its medical school as defendants. Ms. Nunez sought leave to amend in the event the trial court agreed with Dr. Albo that he was not personally Hable for her injuries. Until this time, Ms. Nufiez had alleged that Dr. Albo was acting outside the scope of his employment, and therefore, was personally liable.

¶ 6 The trial court granted Dr. Albo's motion for summary judgment, ruling that Dr. Albo's treatment of Ms. Nufles was performed in his capacity as an employee of the University and within the scope of that employment. The trial court denied Ms. Nu-fiez's motion to amend, ruling that she had failed to comply with the express provisions of the Immunity Act and that such failure prevented any claims from being asserted against the University. This appeal followed.

ISSUES AND STANDARDS OF REVIEW

T7 Ms. Nunez argues: (1) genuine issues of material fact exist as to whether Dr. Albo was acting within the scope of his employment when he treated her; (2) she gave proper notice of her claim against the University under the Immunity Act; and (8) the trial court exceeded its discretion by denying her motion to amend.

18 When reviewing whether summary judgment is appropriate, "this Court will view the facts in a light most favorable to the party opposing the motion and will allow the summary judgment to stand only if the mov-ant is entitled to summary judgment as a matter of law on the undisputed facts." Deschamps v. Pulley, 784 P.2d 471, 472 (Utah Ct.App.1989) (quotation and citations omitted). Thus, we review the evidence in a light most favorable to Ms. Nufiez. See id.

T9 Interpretation of the Immunity Act is a "question of law which we review for correctness, granting no deference to the trial court's determinations." Bellonio v. Salt Lake City Corp., 911 P.2d 1294, 1296 (Utah Ct.App.1996) (citing Brittain v. State, 882 P.2d 666, 668 (Utah Ct.App.1994)).

110 Whether to grant or deny a motion to amend is "a matter within the broad discretion of the trial court and we [will not] disturb its ruling unless [Ms. Nufiez] establishes an abuse of discretion resulting in prejudice." Chadwick v. Nielsen, 763 P.2d 817, 820 (Utah Ct.App.1988).

ANALYSIS

I. Seope of Employment

Ms. Nufiez argues that the trial court erred in granting Dr. Albo's motion for summary judgment because there are genuine issues of material fact as to whether Dr. Albo was acting within the seope of his employment with the University when he treated her. Generally, this issue presents a question of fact to be determined by a jury. See Birkner v. Salt Lake County, 771 P.2d 10583, 1057 (Utah 1989). Therefore, summary judgment is appropriate only if the undisputed facts render the resolution so clear it can be decided as a matter of law. Id.

T12 Utah courts apply a three-part test for determining whether an employee was acting within the seope of his employment. An employee's conduct falls within the scope of his employment if,

First, ... [the] conduct [is] of the general kind the employee is employed to perform.... That means that an employee's acts or conduct must be generally directed toward the accomplishment of objectives within the seope of the employee's duties and authority, or reasonably incidental thereto....
Second, the employee's conduct ... occur[s] within the hours of the employee's work and the ordinary spatial boundaries of the employment. ...
Third, the employee's conduct [is] motivated, at least in part, by the purpose of serving the employer's interest.

Id. at 1056-57 (citations omitted). We examine each element in light of the evidence that Dr. Albo presented, which Ms. Nufiez did not dispute.

{13 First, Dr. Albo's treatment of Ms. Nufiez was "directed toward the accomplishment of objectives within the seope of [his] duties and authority." Id. at 1057. Dr. Albo has been employed as a faculty member and general surgeon at the medical school in the Department of Surgery since July 1968. He has a special emphasis in treating varicose veins. -As a condition of his employment, Dr. Albo is expected to, and does, maintain a clinical practice. Ms. Nufiez went to Dr. Albo's clinic seeking treatment for spider veins in her legs, a treatment of the general kind and nature that Dr. Albo has been employed to perform. Therefore, the first element is established because Dr. Albo's treatment of Ms. Nufiez was of the type he was employed to perform.

114 Second, Dr. Albo's conduct "occurred] within the hours of [his] work and the ordinary spatial boundaries of employment." Id. Dr. Albo treated Ms. Nufiez during regular business hours at his clinic paid for by the University. Because Dr. Albo is a faculty member, the University paid the costs of his clinic where Ms. Nufiez received treatment along with the medical supplies and medications used in her treatment. All billings and collections for Dr. Albo's medical services are handled by the University. Although Ms. Nufiez paid cash for the treatment, this payment was forwarded in full to the University. Dr. Albo does not receive direct compensation for his medical practice; instead, Dr. Albo's sole compensation is a salary from the University. Because Dr. Albo's treatment of Ms. Nuflez "occurred within the hours of [his] work and the ordinary spatial boundaries of employment," the second element is established.

{15 Finally, Dr. Albo's treatment of Ms. Nufiez was motivated "by the purpose of serving the [University's] interest." Id. In educating and training students, interns, residents and fellows (students) in medicine and health sciences, the University arranges for students to provide health care services to members of the public in approved medical or other health care clinical training programs at the University and its affiliated clinics. Faculty members are expected to develop and maintain an appropriately mixed patient base to enable the University to adequately teach and train students in all phases of health care science, including patient care and research.

116 Witnesses for Dr. Albo testified, by affidavit or deposition, that costs associated with a medical school are high and include attracting and retaining qualified faculty, providing research space and equipment, and providing adequate clinical space and experiences for students. Because of the high costs associated with maintaining a medical school, the University cannot afford to pay faculty what they could earn in private practice. As a result, the personal immunity and other benefits available at the University by virtue of its status as a state institution are critical for the University to attract and retain qualified faculty members and thereby maintain a level of excellence.

{17 Dr. Albo's treatment of Ms. Nunez and other patients like her is part of his employment with the University. Although there were no students observing or assisting in the treatment of Ms. Nufiez, Dr. Albo's treatment of Ms. Nufiez clearly served the University's interests.

{18 In sum, Dr. Albo's treatment of Ms. Nufiez was of the type he was employed to perform, was within the hours and spatial boundaries of his employment, and was motivated, at least in part, by serving the University's interests. Therefore, Dr. Albo acted within the scope of his employment as a matter of law, and the trial court properly granted Dr. Albo's motion for summary judgment.

II. Motion to Amend

119 Ms. Nufiez argues that the trial court erred in denying her motion to amend her complaint to name the University as a defendant. Rule 15(a) of the Utah Rules of Civil Procedure directs that leave to amend pleadings "shall be freely given when justice so requires." Utah R. Civ. P. 15(a). It is well established that " 'rule 15 should be interpreted liberally so as to allow parties to have their claims fully adjudicated." Sulzen v. Willams, 1999 UT App 76, ¶ 13, 977 P.2d 497 (quoting Timm v. Dewsnup, 851 P.2d 1178, 1188 (Utah 1998)). This is especially true when the motion to amend is made well in advance of trial. See Lewis v. Moultres, 627 P.2d 94, 98 (Utah 1981) (" 'The rule in this state has always been to allow amendments freely where justice requires, and especially is this true before trial"" (Quoting Gillman v. Hansen, 26 Utah 2d 165, 486 P.2d 1045, 1046 (1971))).

120 The trial court denied Ms. Nufiez's motion to amend, reasoning that (1) joining the University would be futile due to Ms. Nunez's {failure to comply with the Immunity Act's notice of claim requirements; and (2) justice would not be served by allowing the amendment because Ms. Nufiez had unjustifiably delayed attempting to join the University, her motion came late in the litigation process, and granting the motion would result in prejudice to the University. We will analyze each of the trial court's reasons for denying Ms. Nufier's motion to amend in light of rule 15's liberal standard.

A. Adequacy of the Notice of Claim

121 We first address whether the trial court correctly determined that Ms. Nufiez failed to give proper notice of her claim against the University as required by the Immunity Act. "Utah courts have established a rule of strict compliance with the notice provisions of the Utah Governmental Immunity Act." Bischel v. Merritt, 907 P.2d 275, 279 (Utah Ct.App.1995). The applicable provisions of Utah's Immunity Act in effect when Ms. Nufiez's claim arose stated:

(2) Any person having a claim for injury against a governmental entity, or against its employee for an act or omission occurring during the performance of the employee's duties, within the seope of employment, or under color of authority shall file a written notice of claim with the entity before maintaining an action, regardless of whether or not the function giving rise to the claim is characterized as governmental.
(8)(a) The notice of claim shall set forth:
(1) a brief statement of the facts;
(1) the nature of the claim asserted; and
(iii) the damages incurred by the claimant so far as they are known.
(b) The notice of claim shall be:
(i) signed by the person making the claim or that person's agent, attorney, parent, or legal guardian; and
(1) directed and delivered to:
(E) the attorney general, when the claim is against the State of Utah....

Utah Code Ann. § 63-30-11(2) & (3) (Supp. 2001).

A claim against the state, or against its employee for an act or omission occurring during the performance of the employee's duties, within the seope of employment, or under color of authority, is barred unless notice of claim is filed with the attorney general within one year after the claim arises, or before the expiration of any extension of time granted under Section 63-30-11, regardless of whether or not the function giving rise to the claim is characterized as governmental.

Utah Code Ann. § 68-30-12 (Supp.2001).

122 "[Where the statutory language is plain and unambiguous, we do not look beyond the language's plain meaning to divine legislative intent." Lyon v. Burton, 2000 UT 19, ¶ 17, 5 P.3d 616 (quotations and citation omitted). We will analyze whether Ms. Nufiez's notice of claim complied with each of the requirements included in the Immunity Act.

1. Immunity Act Requirements

123 First, the Immunity Act requires "a brief statement of the facts." Utah Code Ann. § 63-80-11. Ms. Nufiez's notice recited that "Nufiez was a medical patient of Dr. Albo's and received a treatment for veri-cose [sic] veins in her legs called Sclerosis," that "injected sclerotic fluid into the veins" of her legs, and as a result of the medical procedure, Ms. Nufies suffered complications. Second, the Immunity Act requires that "the nature of the claim be asserted." Id. Ms. Nufiez's notice asserted several times that the nature of her claim was for medical malpractice.

T24 Third, the Immunity Act requires that "the damages incurred" be set forth. Id. Ms. Nufiez listed the damages she suffered as a result of Dr. Albo's treatment both in terms of physical complications suffered and compensatory damages. Fourth, the Immunity Act requires that the claim be "signed by the person making the claim or that person's ... attorney ... and delivered to ... the attorney general, when the claim is against the State of Utah." Id. Ms. Nunez's attorney signed and delivered the "notice of claim" to Dr. Albo and to the attorney general. Finally, the Immunity Act requires that the "notice of claim [bel filed with the attorney general within one year after the claim arises." Utah Code Aun. § 68-30-12. Ms. Nufiez filed her notice of claim with the attorney general on January 7, 1999, well within the one-year statutory time limit. Therefore, Ms. Nufiez's notice of claim strictly complied with all the conditions set forth under the Immunity Act.

2. Sufficient Notice under the Immunity Act

125 Defendant's argument that Ms. Nufiez's notice was insufficient because it did not specifically name the University of Utah or its medical school fails for several reasons. "[The primary purpose of the notice of claim requirement is to afford the responsible public authorities an opportunity to pursue a proper and timely investigation of the merits of a claim and to arrive at a timely settlement, if appropriate, thereby avoiding the expenditure of public revenue for costly and unnecessary litigation." Stahl v. Utah Transit Auth., 618 P.2d 480, 482 (Utah 1980). "Serving notice on the attorney general is intended to ensure that the State's legal needs are met." Brittain v. State, 882 P.2d 666, 671 (Utah Ct.App.1994).

126 Ms. Nufiez's notice stated that she was asserting a claim against Dr. Albo and "any others that may latter [sic] be shown to be liable." In compliance with the Immunity Act, Ms. Nufiez filed her notice of claim with the attorney general. Ms. Nunez's notice of claim alerted the State that she intended to assert a claim based on the treatment she received from Dr. Albo. In addition, Dr. Albo forwarded a copy of the notice of claim to the University's Risk Management. In response, Risk Management wrote to Ms. Nu-fez acknowledging that Dr. Albo was "an employee of the University of Utah ... represented by counsel," and asked that all communications concerning this matter be directed cither to Risk Management or to Dr. Albo's counsel of record.

127 Clearly the University was put on notice of Ms. Nufiez's claim and recognized its potential liability for Dr. Albo's treatment of Ms. Nufiezs Based on this notice, the University was free to investigate the merits of the claim and "arrive at a timely settlement, if appropriate." Stahl, 618 P.2d at 482. Thus, although the University was not specifically named, the purpose of the Immunity Act's notice of claim was fulfilled.

B. Denial of the Motion to Amend

128 Having concluded that Ms. Nufez's notice of claim complied with the statutory requirements of the Immunity Act, we next address whether the trial court exceeded its discretion in denying Ms. Nufies leave to amend her complaint. Because the statute of limitations has expired, Ms. Nufez's amendment, adding the University and its medical school as defendants, must relate back to the date the original complaint was filed to be effective. We also examine whether denial of the motion to amend served the interests of justice.

1. Relation Back to Original Complaint

129 Rule 15(c) of the Utah Rules of Civil Procedure provides for the relation back of amendments, stating: "Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading." Utah R. Civ. P. 15(c). In addition, the new defendants sought to be added must have an identity of interest with the original party named in the complaint, "so it can be assumed or proved the relation back is not prejudicial." Wilcox v. Geneva Rock Corp., 911 P.2d 367, 869 (Utah 1996) (quotations and citation omitted). An identity of interest exists "when 'the real parties in interest were sufficiently alerted to the proceedings, or were involved in them unofficially, from an early stage"" Sulzen v. Williams, 1999 UT App 76, ¶ 14, 977 P.2d 497 (quoting Doxey-Layton Co. v. Clark, 548 P.2d 902, 906 (Utah 1976)). Ms. Nufez's proposed amendment sets forth claims against the University which "arose out of the conduct, transaction, or occurrence set forth ... in the original pleading." Utah R. Civ. P. 15(c). Therefore, Ms. Nufiez has met the requirements of rule 15(c). Under this definition, an identity of interest exists between the University and Dr. Albo.

€ 30 We have already determined that the University had notice of Ms. Nufiez's claim. In recognizing its potential liability, the University took steps to provide counsel for Dr. Albo and required that all communications concerning Ms. Nunez's claim be sent to the University's Risk Management attorney or to Dr. Albo's counsel. Therefore, the University was "involved in [the proceedings] unofficially from an early stage" due to their identity of interest with Dr. Albo. Sulzen, 1999 UT App 76 at ¶ 14, 977 P.2d 497.

2. Unjustifiable Delay, Late in Litigation Process, and Prejudice

131 Next, we address the trial court's finding that justice would not be served by allowing the amendment because Ms. Nufiez had unjustifiably delayed attempting to join the University and her motion came late in the litigation process, and granting the motion would have resulted in prejudice to the University. We believe that these findings are not consistent with a liberal interpretation of rule 15 "to allow parties to have their claims fully adjudicated." Id. at T 13.

132 On August 25, 2000, eleven days after Dr. Albo filed his motion for summary judgment, Ms. Nufiez filed a motion for leave to amend her complaint to specifically name the University of Utah and its medical school as defendants. Ms. Nufiez sought leave to amend in the event the trial court agreed with Dr. Albo that he was not personally liable for her injuries. Until this time, Ms. Nufiez had alleged that Dr. Albo was acting outside the scope of his employment, and therefore, was personally liable. The majority of cases where Utah's appellate courts have upheld a trial court's denial of leave to amend on the grounds of untimeliness have been when the motion to amend was made several years after the original pleadings were filed and just before trial or at trial, See e.g., R & R Energies v. Mother Earth Indus., Inc., 986 P.2d 1068, 1080 (Utah 1997) (upholding denial of motion to amend where sought four years after case commenced and trial had been held to resolve fundamental issue in the case); Staker v. Huntington Cleveland Irrigation Co., 664 P.2d 1188, 1189-90 (Utah 1983) (denying motion made day of trial); Girard v. Appleby, 660 P.2d 245, 248 (Utah 1983) overruled on other grounds by Meadowbrook, L.L.C. v. Flower, 959 P.2d 115 (Utah 1998) (same); Regional Sales Agency, Inc. v. Reichert, 784 P.2d 1210, 1216-17 (Utah Ct.App.1989) vacated on other grounds, 830 P.2d 252 (Utah 1992) (denying motion because made day before trial and three years after original complaint filed); Chadwick v. Nielsen, 763 P.2d 817, 820 (Utah Ct.App.1988) (denying motion made morning of trial).

133 In each of these cases cited above, leave to amend a complaint was sought much later in the litigation process than here. Ms. Nufiez made her motion to amend a little over a year after she filed her complaint. At the time Ms. Nufiez filed her motion, no scheduling order had been entered, no trial date had been set, no expert discovery had taken place, and discovery was still on-going. On August 14, 2000, before any expert discovery had been taken, Dr. Albo filed his motion for summary judgment. Although Ms. Nufiez was aware of Dr. Albo's status as a University employee, she believed he also conducted a private medical practice and was therefore acting outside his scope of employment and personally lable for her injuries. That belief was not unreasonable given Ms. Nufiez's limited understanding of English and the cireumstances surrounding her treatment. For example, Ms. Nufiezs received treatment by Dr. Albo in an office away from the University and there were no medical students or residents present. However, after some limited discovery was complete, Ms. Nufiez sought to add the University as a party. Given these facts, we do not believe Ms. Nufiez's motion was untimely or that she failed to adequately explain her delay in naming the University.

Finally, defense counsel argues that Ms. Nufiez's proposed amendment, which is virtually identical to the complaint filed against Dr. Albo, would prejudice the University because it "raises a new theory of vicarious liability and would require the University to begin its own separate investigation and analysis of the claims against Dr. Albo." However, it was defense counsel's own argument that Dr. Albo was working within the scope of his employment that ultimately allowed Dr. Albo to succeed on his motion for summary judgment. See Christensen v. Swenson, $74 P.2d 125, 127 (Utah 1994) ("[EJmployers are vicariously liable for torts committed by employees while acting within the seope of their employment.").

185 As we have stated previously, the University was aware of Ms. Nufiez's complaint against Dr. Albo and its potential vicarious liability as his employer from the beginning. In addition, defense counsel's claim that the University would be prejudiced because it would be required to begin anew with its own separate investigation and analysis of the claims is unpersuasive.

¶ 36 The claim against the University still stems from the treatment Ms. Nufiez received from Dr. Albo. No new claims or theories have been added and only limited discovery has been done. In fact, when Ms. Nufiez filed a request for trial on March 81, 2000, defense counsel filed an objection to the request arguing, "this case has only been pending for a short time, and there still remains limited fact discovery and all expert discovery to be conducted." Defense counsel argued that because this was a medical malpractice case, "expert discovery is likely the most important aspect of the discovery process." Therefore, based on defense counsel's own argument, the University has not missed the most important aspect of the discovery process. Given that important discovery has yet to be completed and that Ms. Nufiez's proposed amendment does not raise any new theories, we fail to see how the University would be prejudiced if added as a defendant at this time.

CONCLUSION

T 37 Dr. Albo was working within the seope of his employment for the University when he treated Ms. Nufiez, and therefore, we affirm the trial court's decision to grant Dr. Albo's motion for summary judgment. However, the trial court erred in denying Ms. Nunez's motion for leave to amend. Ms. Nufiez's notice of claim complied with the statutory requirements of the Immunity Act, and the University was put on notice of its potential liability. Further, Ms. Nufiez was justified in her delay to move to join the University, the motion did not come too late into the litigation process, and granting the motion would not result in prejudice to the University. Therefore, we reverse the trial court's denial of Ms. Nufiez's motion to amend and remand for further proceedings consistent with this opinion.

¶ 38 I CONCUR: JAMES Z. DAVIS, Judge.

ORME, Judge

(concurring specially):

I concur in the court's opinion, but wish to register a concern.

¶ 40 In the procedural posture of this case, Dr. Albo was entitled to summary judgment with respect to his individual Hability. The very reason he is off the hook personally-he demonstrated in moving for summary judgment that anything he did, he did in the course and scope of his employment as an employee of the University-seals the responsibility of the University to answer for any negligence in the course of Dr. Albo's treatment of Plaintiff.

¶ 41 That having been said, it should be noted that it would not have been at all clear to Plaintiff that Dr. Albo was rendering treatment to her as a University employee. She visited him not at the University Hospital or any of the ancillary buildings, but at a private office off campus, adjacent to Salt Lake Regional Hospital-a hospital at which Dr. Albo also had privileges, a hospital which covered the larger portion of his secretary's salary, and a hospital at which many of his patient records were kept. Neither University medical students nor University Hospital interns or residents observed or participated in any of the procedures performed by Dr. Albo on Plaintiff. The sclerosing agent used by Dr. Albo was not secured from the supplies of University Hospital, but rather was procured in Italy by his daughter. (Apparently the sclerosing agent has not been approved for use in this country by the Food and Drug Administration.)

¶ 42 While it is clear given the record in this case that Dr. Albo was in fact a University employee who treated Plaintiff in the course of that employment as it was broadly defined by the University, it is also clear this would have come as a surprise to Plaintiff. Indeed, it is almost as though Dr. Albo and/or the University preferred that his status not come to Plaintiffs attention until long after she had been treated. Perhaps clear, unambiguous, and early disclosure that a treating physician enjoys the protection of the Utah Governmental Immunity Act is not good for business.

¶ 43 Surely courts will look askance, as we have done here, at any effort to obscure the University's role if that effort is coupled with a later attempt to avoid responsibility altogether. Such a strategy runs something like this: You cannot hold the doctor personally liable because he is an employee of the University and did this work in the course of that employment. And you cannot hold the University responsible because your notice of claim was directed to the doctor rather than the University. Moreover, it is inconsequential that we wanted him to seem like any ol' doctor in private practice rather than a University professor or state employee so that you would not worry too much about the remedies available to you in the event of malpractice and thus are largely responsible for your focusing on him initially rather than the University.

¶ 44 The main opinion's scholarly and well-reasoned discussion about the adequacy of the notice of claim and the "relation back" doctrine avoids this inequitable result by permitting Plaintiff to amend her complaint and proceed against the University as Dr. Albo's employer.

      . Under the act, "State" is defined as "the state of Utah," which includes "any ... hospital, college, university, or other instrumentality of the state." 2001). Utah Code Ann. § 63-30-2(9) (Supp.

      . Since the 1998 amendment, section 63-30-12 no longer requires filing a notice of claim with See Viah Code Ann. the concerned agency. § 63-30-12 (1997).


author: THORNE, Judge:

text:
    2002 UT App 254
    Robert L. JOSEPH, Petitioner, v. SALT LAKE CITY CIVIL SERVICE COMMISSION, Salt Lake City Corporation, Salt Lake City Police Department, and the Chief of Police, Respondents.
    No. 20010399-CA.
    Court of Appeals of Utah.
    July 26, 2002.

      Robert L. Joseph, Sandy, Petitioner Pro Se.
    Martha S. Stonebrook, Salt Lake City Law Department, Salt Lake City, for Respondents.
    Before Judges BILLINGS, GREENWOOD, and THORNE.
   OPINION

THORNE, Judge:

11 Robert L. Joseph appeals from an order of the Salt Lake City Civil Service Commission (the Commission) dismissing his administrative appeal following his repeated failure to comply with discovery requirements. We affirm.

BACKGROUND

T 2 In March of 1999, Joseph was involved in an incident that resulted in the Salt Lake City Police Department (the City) determining that he had acted unprofessionally and had violated the City's deadly foree policy. While this finding was later affirmed by the Commission, Joseph was permitted to continue his employment pending the results of a fitness for duty examination. Thus, Joseph was examined by Dr. David McCann, who, in March of 2000, submitted to the City the following conclusions regarding Joseph:

[He] has Disordered Personality Traits which have contributed to him placing himself in jeopardy in the shooting incident and in other incidents. Officer Joseph's personality traits have caused him to be excessively self-centered and unwilling to learn from peers or superiors. His personality traits are likely to lead him to increased isolation and alienation from appropriate professional supervision and the needs of the citizens of Salt Lake City. Personality traits similar to those of Officer Joseph's are notably resistant to psy-chotherapeutie intervention, additional training, closer supervision or disciplinary action. His personality traits cause an increased risk for harm to himself, to other officers and to the citizens of Salt Lake City. In [Dr. McCann's] opinion, Officer Joseph is not psychologically suitable to perform the duties of a police officer.

Based at least in part on this evaluation, on" March 31, 2000, the City's Chief of Police, Mac Connole, terminated Joseph's employment. Joseph appealed the City's decision to terminate his employment to the Commission.

{3 Soon after learning of the appeal, the City requested certain documents and materials known or suspected to be in Joseph's possession. Joseph, however, neither proffered the requested discovery materials nor did he petition the Commission for protection from the request. Over the course of the next ten months, the City repeatedly renewed its request, which Joseph ignored on every occasion. Frustrated with Joseph's refusal to cooperate, the City filed a motion to dismiss as a sanction for Joseph's inaction. This finally roused Joseph to act.

4 To stave off possible dismissal, Joseph, through counsel, entered into a stipulation with the City. Joseph agreed to supply all of the requested material within fifteen days or face renewal of the dismissal motion, likely ending his appeal. Following a hearing on the proposed agreement, the Commission adopted the stipulation and specifically informed Joseph's attorney that failure to comply with the clear terms of the agreement would result in his appeal being dismissed with prejudice. Nonetheless, Joseph failed to timely produce the requested material, thereby violating the terms of the stipulation.

T5 The City subsequently renewed its request for dismissal, which the Commission readily granted on April 9, 2001. Then, after a hearing on Joseph's motion to strike the order of dismissal, the Commission found that Joseph had presented no good cause to explain his failure to comply with the terms of the stipulation and denied his motion. Joseph now appeals.

ISSUE AND STANDARD OF REVIEW

T6 While Joseph submits several arguments for our review, only one is properly before this court.

17 Joseph argues that the Commission erred in dismissing his appeal as a discovery sanction. We will reverse an adjudicative body's decision to levy discovery sanctions only in the face of a clear abuse of discretion. See Hales v. Oldroyd, 2000 UT App 75, ¶ 15, 999 P.2d 588.

ANALYSIS

18 Prior to addressing Joseph's claim, we must first determine whether this court is properly vested with jurisdiction over his claim. While we are generally limited in our authority to address issues sua sponte, see In re R.N.J., 908 P.2d 345, 347 (Utah Ct.App.1995) ("if a [party] has not raised an issue on appeal, we may not consider the issue sua sponte" (quoting State v. Rodrigues, 841 P.2d 1228, 1229 (Utah Ct.App.1992)) (alteration in original)), when the issue is jurisdictional we are under no such limitation. See id. "[Tlhe jurisdiction of the Court of Appeals ... must be provided by statute." DeBry v. Salt Lake County, 764 P.2d 627, 627 (Utah Ct.App.1988) (citing Utah Const. art. VIII, § 5). In the absence of a specific statute granting this court jurisdiction over the subject matter, we have no jurisdiction. See Barney v. Division of Occupational & Prof'l. Licensing, 828 P.2d 542, 543-44 (Utah Ct.App.1992); DeBry, 764 P.2d at 628.

T9 Here, were we restricted to the jurisdictional boundaries found in Utah Code Ann. § 78-22a-8(2)(b)G) (Supp.2001) (granting this court jurisdiction over appeals from the district court's review of "adjudicative proceedings of agencies of political subdivisions of the state or other local agencies"), we would not have jurisdiction and would be forced to dismiss the petition. See Barney, 828 P.2d at 544. However, Utah Code Ann. § 10-3-1012.5 (1999) provides an express grant of jurisdiction to this court for the specific purpose of reviewing decisions made by municipal commissions. Therefore, because the Legislature has provided a specific statute granting this court jurisdiction, we conclude that we have jurisdiction and address Joseph's claim on appeal.

T10 Joseph first argues that the discovery sanction levied by the Commission violates his due process right to a full hearing before the Commission. "Post-deprivation procedures, while not constitutionally guaranteed, must comport with due process requirements providing for a fair hearing." Lucas v. Murray City Civil Serv. Comm'n, 949 P.2d 746, 758 (Utah Ct.App.1997). " 'The fundamental requirement of due process is the opportunity to be heard, at a meaningful time and in a meaningful manner, and, when this opportunity is granted a complainant, who chooses not to exercise it, that complainant cannot later plead a denial of procedural due process'" Utah Dept. of Trans. v. Osguthorpe, 892 P.2d 4, 8 (Utah 1995) (citation omitted). Moreover, while local administrative bodies are not strictly bound by the formal rules of evidence and procedure, see Lucas, 949 P.2d at 755, absent any contrary direction, certain rules, including the rules governing discovery, are clearly applicable to such proceedings. See Utah R. Civ. P. 81(a).

111 When an administrative agency determines that a party has not complied with legitimate discovery requests due to " 'willfulness, bad faith, ... fault, or persistent dilatory tactics frustrating the judicial process,'" the agency acts within its discretion in imposing sanctions. Hales v. Oldroyd, 2000 UT App 75,¶ 16, 999 P.2d 588 (citation omitted). " [The choice of an appropriate discovery sanction [including the entry of default against the noncomplying party] is primarily the responsibility of the [agency], " and "we have long held that we will not interfere [with this choice} unless ' "abuse of that discretion [is] clearly shown."'*" Morton v. Continental Baking Co., 988 P.2d 271, 274 (Utah 1997) (citations omitted) (fifth alteration in original).

112 Joseph argues that the meaning behind "the opportunity to be heard, at a meaningful time and in a meaningful manner," Osguthorpe, 892 P.2d at 8, in this context, immunizes him from dismissal, regardless of his conduct. He is incorrect. While we agree that Joseph has a statutory right to a post-deprivation hearing, see Utah Code Ann. § 10-38-1012 (1999); Lucas, 949 P.2d at 753, this right, absent contrary rules adopted by the Commission, is tempered by the petitioner's duty to comply with, or at the very least respond to, a properly issued discovery request. Should the petitioner fail in this duty, and the Commission determine that the failure was the product of "willfulness, bad faith, ... fault, or persistent dilatory tactics," Oldroyd, 2000 UT App 75 at ¶ 16, 999 P.2d 588, the Commission may, at its discretion, levy sanctions for the failure, including dismissal.

13 Here, there is no question that Joseph failed to comply with the City's repeated discovery requests. Joseph ignored at least seven requests from the City over the course of ten months. Then, in the face of the City's motion to dismiss, Joseph essentially admitted to fault in failing to produce the requested material, and acknowledged that dismissal would result should he fail again. Based on Joseph's subsequent failure to comply, and following Joseph's admission of fault, the Commission dismissed Joseph's appeal.

114 After reviewing the record, we conclude that not only did Joseph stipulate to fault regarding his failure to comply with the requested discovery at the stipulation hearing, Joseph's attorney also admitted to being "somewhat dilatory" regarding the City's discovery requests. The Commission, therefore, had an ample basis to justify sanctioning Joseph for his continued failure to comply with the City's discovery requests. See Oldroyd, 2000 UT App 75 at 181, 999 P.2d 588; see also Osguthorpe, 892 P.2d at 8. Moreover, after accepting Joseph's initial acknowledgment of fault, the Commission chose to extend Joseph one final opportunity to comply. Joseph failed to avail himself of that opportunity. Accordingly, we conclude that the Commission did not violate Joseph's due process right to a post-deprivation hearing.

115 Joseph next argues that the absence of a formal discovery order is determinative. However, an agency is not required to issue an order compelling discovery prior to considering sanctions. See Tuck v. Godfrey, 1999 UT App 127," 19, 981 P.2d 407. " 'It is enough that a notice of the taking of a deposition ... or a request for inspection has been properly served on the party'" Id. (citation omitted). Furthermore, "(allthough parties deserve the opportunity to be heard, 'dismissal ... is appropriate when a party pursues a claim in a manner that abuses that opportunity."" Oldroyd, 2000 UT App 75 at 1 31, 999 P.2d 588.

¶ 16 There is no contention that the City failed to properly serve Joseph with any of its discovery requests. J oseph, in fact, admits having received most, if not all, of the requests. Joseph voluntarily entered into a stipulation with the City wherein he essentially admitted he was at fault for the failure to respond to the City's discovery requests. He further stipulated that any additional failure on his part would result in the renewal of the City's motion to dismiss. Additionally, both Joseph and his attorney were well aware that the Commission had adopted the stipulation and had enteréd an additional order dismissing Joseph's appeal should he fail to timely produce the requested discovery items.

T17 After reviewing the record, we conclude that not only was Joseph properly served with several discovery requests, any one of which was sufficient to provide Joseph with the notice he argues he did not receive, but also that Joseph was fully aware of the specific penalty he faced should he again fail to comply with the City's discovery requests. Therefore, Joseph's second argument fails.

118 Joseph raises several other issues on appeal. However, because he failed to raise these issues with the Commission, we will not address them here. See State v. Holgate, 2000 UT 74,¶ 11, 10 P.3d 346 (stating "[als a general rule, claims not raised before the trial court may not be raised on appeal"); Oldroyd, 2000 UT App 75 at 124, 999 P.2d 588 (stating " '[alny challenge to the merits of a discovery request must be timely filed and put before the trial court, or the claim will be waived "(citation omitted)); Godfrey, 1999 UT App 127 at ¶ 24, 981 P.2d 407 (observing that a failure to raise an objection to a discovery sanction waives the objection}.

119 Accordingly, we affirm the Commission's order dismissing Joseph's appeal.

20 WE CONCUR: JUDITH M. BILLINGS, Associate Presiding Judge and PAMELA T. GREENWOOD, Judge.

      . We note that while Utah Code Ann. § 10-3-1012.5 (1999) is titled "Appeal to district court-Scope of review," its plain language vests jurisdiction over "[alny final action or order of the [municipal] commission" in this court.

      . Specifically, Joseph argues that the penalty of dismissal of his appeal was disproportionate to the conduct; that the Commission failed to consider any other reasonable sanction; that the discovery material requested by the City was irrelevant; and that the Commission's reliance on the advice of the City Attorney created a conflict of interest.