author: HARRIS, Judge:

text:
    Sara SKOLNICK, Appellee, v. EXODUS HEALTHCARE NETWORK, PLLC, Appellant.
    No. 20170291-CA
    Court of Appeals of Utah.
    Filed November 8, 2018
    Gary L. Johnson, Zachary E. Peterson, and Cortney Kochevar, Salt Lake City, Attorneys for Appellant
    Gary R. Guelker, Attorney for Appellee
    Judge Ryan M. Harris authored this Opinion, in which Judges Michele M. Christiansen Forster and David N. Mortensen concurred.
    Opinion
   HARRIS, Judge:

¶ 1 Sara Skolnick, a physician, entered into a written employment agreement (the Employment Agreement) with Exodus Healthcare Network, PLLC (Exodus), a medical services company. Pursuant to that agreement, Skolnick agreed to work in two of Exodus's medical clinics, and Exodus agreed to pay Skolnick for her services. Near the end of Skolnick's first year of employment, Exodus stopped paying Skolnick, and Skolnick sued for breach of contract. The district court entered summary judgment in Skolnick's favor, and also ordered Exodus to pay Skolnick's attorney fees. Exodus now appeals, and we affirm the district court's entry of summary judgment on Skolnick's claim for breach of contract. We also affirm the district court's conclusion that Skolnick is entitled to recover attorney fees. But we reverse the district court's decision to award Skolnick the entire amount of fees she requested, and remand the case for entry of judgment in a lower amount, as well as for quantification of the attorney fees Skolnick incurred on the successful portion of her defense of Exodus's appeal.

BACKGROUND

¶ 2 Exodus owns and operates health care clinics in Salt Lake County, Utah, and employs physicians to provide a wide array of medical services. In November 2013, Exodus entered into the Employment Agreement with Skolnick, a licensed obstetrician and gynecologist. That agreement called for a three-year initial term of employment, starting on February 1, 2014, with a renewal provision that could potentially extend Skolnick's term of employment beyond three years. Under the agreement, Exodus was to pay Skolnick a "[m]onthly [b]ase [c]ompensation" payable in biweekly installments.

¶ 3 At about the same time, Skolnick also entered into a separate agreement (the Recruitment Agreement) with Jordan Valley Medical Center (Hospital), a local hospital. The Recruitment Agreement was intended to work in tandem with the Employment Agreement, and each incorporated the other. Under the Recruitment Agreement, Skolnick promised to maintain a medical practice within Hospital's service area for three years, and in exchange Hospital agreed to "loan" Skolnick "certain benefits," including a "[g]uaranteed [m]onthly [a]mount." In the Recruiting Agreement, Skolnick acknowledged that "a portion of the benefits will be paid directly or indirectly to" Exodus. Hospital promised to forgive the loan in its entirety if Skolnick maintained a practice in the Hospital's service area for the full three-year term.

¶ 4 The Employment Agreement between Skolnick and Exodus referenced the Recruiting Agreement between Skolnick and Hospital, and noted that, pursuant to the Recruiting Agreement, Skolnick was "entitled to receive" the "[g]uaranteed [m]onthly [a]mount" from Hospital. The Employment Agreement stipulated that all payments from Hospital to Skolnick "shall be made directly to " Skolnick, but obligated Skolnick, each time she received a payment from Hospital, to "endorse over or pay to" Exodus "all such amounts received from Hospital immediately upon receipt." Skolnick and Exodus agreed that the payments Skolnick received from Hospital were to be used by Exodus to pay Skolnick's salary and benefits.

¶ 5 Skolnick began working for Exodus in early March 2014. For about nine months, the arrangement proceeded uneventfully according to the terms of the agreements-Hospital made payments to Skolnick, who passed along those payments to Exodus, who in turn paid Skolnick's salary and benefits using the funds received from Hospital.

¶ 6 On December 1, 2014, Skolnick sent Exodus a letter stating that she would be terminating her employment at the end of February 2015. After receiving word that Skolnick intended to terminate her employment with Exodus, Hospital stopped making its guaranteed monthly payments, and Exodus stopped paying Skolnick for her services. However, Skolnick kept working and generating accounts receivable for Exodus until January 13, 2015, when Exodus sent Skolnick a letter terminating her employment. In the letter, Exodus stated that Hospital had informed Exodus that it would make no further payments pursuant to the Recruiting Agreement, and explained that Exodus considered these events cause to terminate Skolnick's employment. Skolnick never received any compensation for services rendered between November 22, 2014 and January 13, 2015.

¶ 7 A few weeks after her employment with Exodus ended, Skolnick filed a lawsuit against Exodus, alleging that Exodus had breached the Employment Agreement by failing to pay her. After discovery, both parties moved the court for summary judgment on Skolnick's breach of contract claim. Skolnick argued that the contract required that Exodus pay her for her work, and that she had not been paid. Exodus countered that its obligation to pay Skolnick was contingent on Hospital making the guaranteed monthly payments, and because Hospital had not made any such payments after November 2014, it was not obligated to compensate Skolnick.

¶ 8 In late December 2016, after briefing and oral argument, the district court granted Skolnick's motion and denied Exodus's. The district court determined that "Skolnick performed her duties under [the Employment Agreement], [and] that Exodus did not pay the salary Skolnick earned between November 22, 2014 and January 13, 2015." The court further determined that Exodus's obligation to pay Skolnick was not contingent on payments from Hospital, stating that "[t]he basics of the agreement are that Exodus shall pay Skolnick for services rendered. The contract cannot be read, considering it as a whole, to mean that Skolnick would work for no pay if for some reason [Hospital] stopped payment under the Recruitment Agreement." The district court awarded Skolnick damages in the amount of $35,707.92, the amount requested in Skolnick's complaint, and "attorney fees and costs under the Employment Agreement." The court then directed Skolnick's counsel "to provide an affidavit of fees," and stated that Exodus "may respond as to necessity and reasonableness."

¶ 9 On February 2, 2017, Skolnick filed a motion for attorney fees, a declaration of attorney fees, and a proposed judgment, seeking fees in the amount of $40,894. Eleven days later, on February 13, 2017, Skolnick filed a supplemental declaration, identifying an additional $1,805.50 in fees. On the morning of February 16, the fourteenth day after Skolnick filed her motion, the district court-having seen no opposition to Skolnick's attorney fees motion-entered a final judgment awarding Skolnick $42,489.50 in attorney fees. Later that same day, Exodus filed a motion to set aside that judgment, as well as a memorandum in opposition to Skolnick's motion for attorney fees. Exodus asserted that the judgment had been entered before the time for Exodus to respond to Skolnick's motion had run.

¶ 10 On February 28, in response to Exodus's motion, the district court entered a ruling and order setting aside its attorney fees award, and reducing the award to $24,300 based on its determination as to the reasonableness of the requested amount of fees. On March 2, Skolnick filed a motion asking the court to reconsider its February 28 ruling, arguing that Exodus's objections to her attorney fees motion had been untimely. On March 27, the district court vacated its February 28 ruling, after determining that rule 73 of the Utah Rules of Civil Procedure gave Exodus only seven days-rather than fourteen-to object to Skolnick's fees motion. The court reinstated its February 16 judgment, awarding Skolnick $42,489.50 in attorney fees.

ISSUES AND STANDARDS OF REVIEW

¶ 11 Exodus now appeals, and asks us to consider two issues. First, Exodus argues that the district court erred by entering summary judgment in Skolnick's favor on her claim for breach of contract. "Questions of contract interpretation not requiring resort to extrinsic evidence are matters of law, which we review for correctness." Fort Pierce Indus. Park Phases II, III & IV Owners Ass'n v. Shakespeare , 2016 UT 28, ¶ 15, 379 P.3d 1218 (quotation simplified). We review a court's grant of summary judgment "for correctness, with the facts and all reasonable inferences drawn therefrom being viewed in the light most favorable to the nonmoving party." Id. ¶ 17 (quotation simplified).

¶ 12 Second, Exodus asserts that the district court erred by determining that it had only seven-rather than fourteen-days to respond to Skolnick's attorney fees request, and by accordingly refusing to consider its memorandum in opposition and thereafter awarding Skolnick $42,489.50 in attorney fees. "The interpretation of a rule of procedure is a question of law that we review for correctness." Gardiner v. Taufer , 2014 UT 56, ¶ 13, 342 P.3d 269 (quotation simplified).

ANALYSIS

I

¶ 13 Exodus's first challenge is to the district court's substantive ruling on Skolnick's claim for breach of contract. Exodus maintains that its contractual obligation to pay Skolnick was contingent on a condition precedent, namely, that Hospital would provide the funds from which Skolnick's salary would be paid. Exodus argues that, because Hospital stopped making the guaranteed monthly payments, it had no obligation to pay Skolnick. The district court rejected that argument, and so do we.

¶ 14 In interpreting a contract, we "first look to the writing alone to determine its meaning and the intent of the contracting parties." Nolin v. S & S Constr. Inc. , 2013 UT App 94, ¶ 12, 301 P.3d 1026 (quotation simplified). If the language is unambiguous, "the parties' intentions are determined from the plain meaning of the contractual language, and the contract may be interpreted as a matter of law." Id. (quotation simplified). "A contractual term is ambiguous if, looking to the language of the contract alone, it is reasonably capable of being understood in more than one way such that there are tenable positions on both sides." Deep Creek Ranch, LLC v. Utah State Armory Board , 2008 UT 3, ¶ 13, 178 P.3d 886. "But terms are not ambiguous simply because one party seeks to endow them with a different interpretation according to his or her own interests." Mind & Motion Utah Invs., LLC v. Celtic Bank Corp. , 2016 UT 6, ¶ 24, 367 P.3d 994 (quotation simplified).

¶ 15 The issue in this case hinges on whether Exodus's obligation to pay Skolnick is contingent on a condition precedent, as Exodus argues, or is a simple covenant, as Skolnick argues. "The distinction between covenants and conditions is an important one because each imposes qualitatively different kinds of obligations." Id. ¶ 19. A covenant is "a promise between the parties to the contract about their mutual obligations," and represents "the core bargained-for exchange of an agreement." Id. (quotation simplified). "Conditions are different. A condition is an event, not certain to occur, which must occur before performance under a contract becomes due." Id. ¶ 20 (quotation simplified).

¶ 16 Our supreme court has noted "three principal differences between conditions and covenants." Id. The first is that "the parties to the contract have no duty to perform until the condition is fulfilled, so the failure of a condition relieves the parties of all of their contractual duties." Id. "Second, the parties have no remedy for breach of contract if a condition is not fulfilled, because at that point there is simply no contract to breach." Id. "Third, conditions typically fall outside the control of the parties to the contract, often requiring some environmental trigger (such as 'weather permitting') or action by a third party (such as 'upon the lender's approval') for the contract to begin." Id. ¶ 21 (quotation simplified). Covenants, by contrast, "are almost always within the control of the contracting parties." Id. (quotation simplified).

¶ 17 "To determine whether a contractual obligation is a covenant or a condition, we examine the language of the provision in question and the nature of the agreement itself." Id. ¶ 22. Often, the language of the contract will provide clues as to whether the obligation in question is conditional. For instance, "express terms like 'unless,' 'on condition that,' 'provided that,' and 'if,' often create conditions." Id. ¶ 23. Such language is not talismanic; indeed, "regardless of the precise terms used in the contract, the parties' degree of control over the fulfillment of an obligation remains a significant indication of whether the parties intended a performance obligation to be" conditional. Id. (quotation simplified).

¶ 18 The language of the Employment Agreement strongly indicates that Exodus's obligation to pay Skolnick for her work was not conditional. Indeed, Section 3.2 of that agreement provides that Exodus "shall pay" Skolnick her monthly base compensation in biweekly installments. The phrase "shall pay" is a phrase that usually denotes mandatory, unconditional obligations. See id. ¶ 27 (stating that "shall" means having "a duty to," "is required to," or "mandatory," and that the word "shall" in statutes "creates mandatory obligations" (quotation simplified) ). And even Exodus acknowledges that there is nothing in Section 3.2 itself-the section containing Exodus's payment obligation-that indicates a conditional obligation. Instead, Exodus argues that, in two places elsewhere in the broader Section 3, conditional language is used that indicates that Exodus's obligation to pay Skolnick was conditional.

¶ 19 First, Exodus points to language in the introductory preface to Section 3, which section is captioned "Compensation." In the preface, the parties agreed that, "[s]ubject to the conditions set forth in this Section, [Exodus] shall pay" Skolnick for services rendered. This is certainly conditional language, but because it appears in the introductory sentence prefacing the entire Section 3, it applies to the entire section generally, and not to the payment obligation in Section 3.2 specifically. Section 3 is a long section containing ten different subparts, and providing rules for several different potential eventualities concerning Skolnick's compensation, including a possible switch from simple base salary to "[p]roductivity-[b]ased [c]ompensation,"

and Skolnick's future possible failure to repay her loan to Hospital. The most plausible meaning of this phrase, in context, is that Exodus should pay Skolnick according to the formula in effect at the time of payment, as set forth in Section 3, which may differ depending on various eventualities. Exodus's position, by contrast, essentially amounts to a request that we construe the introductory language in the preface to Section 3 as transforming every specific direct covenant contained anywhere within Section 3-and there are many-into conditional promises. This is not a plausible reading of the preface.

¶ 20 Second, Exodus points to language in Section 3.1 stating that the guaranteed monthly payments shall be made by Hospital directly to Skolnick, "[p]rovided" that Skolnick "shall then endorse over or pay to [Exodus] all such amounts received from Hospital." This is also conditional language, but it is limited to a specific scenario: Skolnick's obligation to "endorse over or pay to" Exodus the payments she receives from Hospital is conditioned on Skolnick actually receiving the payments from Hospital. If Skolnick does not actually receive any payments from Hospital, she is not independently obligated to make payments to Exodus. This conditional language has nothing directly to do with Exodus's specific obligation, set forth in a different section, to pay Skolnick for services rendered.

¶ 21 Indeed, the conditional language used in Section 3.1 regarding Skolnick's obligation to pass along Hospital's payments to Exodus demonstrates that the parties knew how to make specific obligations within Section 3 conditional when that was their intent. See Mind & Motion , 2016 UT 6, ¶ 29, 367 P.3d 994 (stating that the parties' use of truly conditional language elsewhere in the agreement-but not in the phrase at issue-demonstrated that the parties "understood how to consciously identify a condition precedent when they so desired"). The parties chose not to use such language in Section 3.2-when they easily could have done so, had they so intended-to condition Exodus's obligation to pay Skolnick upon Hospital's payment of the guaranteed monthly amount.

¶ 22 Finally, Exodus asserts that the district court's interpretation of the agreement fails to give effect to all of its provisions, and specifically argues that Section 3.1 of the agreement has been rendered superfluous. We disagree. Section 3.1 retains vital importance-it indicates that, when received, the Hospital's guaranteed monthly payment is to be used to pay Skolnick's salary and benefits, and that Skolnick is not permitted to simply keep those payments for herself but, rather, is obligated to remit those payments to Exodus so that they can be used for that purpose. It does no violence to that provision to conclude that, even if Hospital's payments do not come in, Exodus is still obligated to pay Skolnick for services rendered.

¶ 23 For all of these reasons, we reject Exodus's argument that its obligation to pay Skolnick for her services was contingent on receiving the guaranteed monthly payment from Hospital. Under the plain language of the Employment Agreement, Exodus made a covenant to pay Skolnick. Its failure to do so constituted a breach of contract. We therefore affirm the district court's grant of summary judgment in Skolnick's favor.

II

¶ 24 Exodus's second challenge is to the district court's interpretation and application of rule 73 of the Utah Rules of Civil Procedure. Exodus argues that the court erred by allowing Exodus only seven days to object after Skolnick filed a motion to recover attorney fees. We find this argument persuasive.

¶ 25 Rule 73(d) sets forth an expedited procedure for litigation regarding the amount of attorney fees, if "liability for fees" has already been decided. See Utah R. Civ. P. 73(d). Under that procedure, a party seeking fees may opt not to file a motion and, instead, may rely only on the filing of "an affidavit and a proposed order," and if that procedure is followed, the opposing party must file any objection to the "claimed amount" of fees "within 7 days after the affidavit and proposed order are filed." Id. Because it had already decided, in its summary judgment ruling, that Skolnick was entitled to an award of attorney fees, the district court relied upon rule 73(d) in determining that Exodus had only seven days-rather than fourteen-to object to Skolnick's claimed amount of attorney fees.

¶ 26 Exodus asserts, however, that the district court's reliance upon rule 73(d), on the facts of this case, was erroneous, because Skolnick did more than simply file an affidavit and a proposed order: Skolnick also elected to file a separate motion for attorney fees. Exodus asserts that, pursuant to rule 7(d)(1) of the Utah Rules of Civil Procedure, a party has fourteen days-rather than seven-to file a memorandum opposing any motion, and argues that its opposition was therefore timely. See Utah R. Civ. P. 7(d)(1).

¶ 27 In response, Skolnick asserts that rule 73(a) requires that she file a motion, and not just a declaration and a proposed judgment. See Utah R. Civ. P. 73(a) (stating that "[a]ttorney fees must be claimed by filing a motion"). Skolnick argues that she filed a motion for attorney fees, rather than just a declaration and a proposed judgment, simply to fulfill this requirement, and that, because liability for fees had already been decided, rule 73(d) controls the timing for any response to her motion for attorney fees.

¶ 28 We find Exodus's argument more persuasive, for two reasons. First, Exodus's interpretation of rule 73 is in harmony with the mandates of rule 7. As Exodus points out, that rule allows fourteen days-rather than seven-for nonmoving parties to file memoranda in opposition to motions, see Utah R. Civ. P. 7(d)(1), but allows only seven days for parties to "object to the form of [a] proposed order," see id . R. 7(j)(4). Exodus's reading of rule 73 imports this basic dichotomy-fourteen days for motions, seven days for proposed orders-from rule 7 into rule 73, and harmonizes the two rules in a way that Skolnick's interpretation does not. If a party files a motion for attorney fees pursuant to rule 73(a), the opposing party (pursuant to rule 7(d)(1) ) has fourteen days to file a memorandum in opposition. On the other hand, if liability for fees has already been decided, a party can elect to take advantage of the expedited process, and may obtain quantification of previously-awarded attorney fees simply by filing a declaration and a proposed order; if a party elects to use this route, the opponent is allowed only seven days to respond.

¶ 29 Second, and relatedly, we note that Skolnick requested attorney fees in her original motion for summary judgment. In our view, this request fulfilled the requirement of rule 73(a) that "[a]ttorney fees must be claimed by filing a motion"; there was no need for Skolnick to later file a second, separate motion for attorney fees, after the court had granted her summary judgment and stated that she was entitled to fees. Indeed, the court expressly stated, in its summary judgment order, that "Skolnick is entitled to attorney fees and costs under the Employment Agreement" and invited Skolnick to take advantage of the expedited process, stating that "[c]ounsel is to provide an affidavit of fees" and a "suggested form of Judgment."

¶ 30 We recognize that Skolnick may have filed the separate February 2 motion for attorney fees out of an abundance of caution, and in an effort to make sure she complied with rule 73(a). But whatever her motivation, the fact that she filed a separate motion-rather than merely a declaration and a proposed judgment, as the court asked her to do-meant that, pursuant to rule 7(d)(1), Exodus had fourteen days to file any opposition to that motion. Therefore, the opposition memorandum that Exodus filed on February 16 was timely, and the court erred by determining otherwise.

¶ 31 In the unusual procedural posture of this case, the district court actually considered and ruled upon Exodus's challenge to Skolnick's claimed amount of attorney fees and, in a (subsequently vacated) February 28 ruling, determined that a "reasonable" amount of fees for Skolnick to be awarded under the circumstances was $24,300. Neither party challenges the district court's reasonableness determination on appeal, not even as an alternative argument. Accordingly, we see no need to remand the case for further proceedings regarding the reasonableness of Skolnick's claimed fees; instead, we simply vacate the court's March 27 order, due to the court's erroneous ruling that Exodus's opposition memorandum was untimely, and reinstate the district court's February 28 ruling regarding the reasonableness of Skolnick's attorney fees, and remand for entry of judgment in keeping with that ruling.

III

¶ 32 Finally, we must consider whether, and to what extent, Skolnick is entitled to recover the attorney fees she incurred on appeal. "When a party who received attorney fees below prevails on appeal, the party is also entitled to fees reasonably incurred on appeal." Valcarce v. Fitzgerald , 961 P.2d 305, 319 (Utah 1998) (quotation simplified).

¶ 33 When attorney fees are awarded under a contractual provision, the award "is allowed only in accordance with the terms of the contract." See R.T. Nielson Co. v. Cook , 2002 UT 11, ¶ 17, 40 P.3d 1119. The Employment Agreement states that, "[i]n the event of a dispute between the parties arising under this Agreement, the party prevailing in such dispute shall be entitled to collect such party's costs from the other party, including without limitation court and investigation costs and reasonable attorneys' fees and disbursements." In ordinary situations, "determining the 'prevailing party' for purposes of awarding fees and costs is quite simple. Plaintiff sues defendant for money damages; if plaintiff is awarded a judgment, plaintiff has prevailed." Myrah v. Campbell , 2007 UT App 168, ¶ 32, 163 P.3d 679 (quotation simplified). However, when a party "did not retain all of their trial victory on appeal ... some adjustment may be necessary so that they do not recover fees attributable to issues on which they did not prevail." Valcarce , 961 P.2d at 319 (quotation simplified); cf. Gilbert Dev. Corp. v. Wardley Corp. , 2010 UT App 361, ¶ 52, 246 P.3d 131 (stating that "[i]f attorney fees are recoverable by contract, a party is entitled only to those fees attributable to the successful vindication of contractual rights" (quotation simplified) ).

¶ 34 In this appeal, Skolnick clearly prevailed on the issue we discussed above, in Part I, regarding the meaning of the payment provision in the Employment Agreement. But we cannot plausibly conclude that Skolnick prevailed on the attorney fees and rule interpretation issue discussed in Part II; indeed, on that issue, Exodus substantially prevailed. We therefore grant Skolnick's request for fees on appeal insofar as it pertains to her successful defense of the interpretation of the Employment Agreement, but deny her request for fees on appeal incurred in the defense of her interpretation of rule 73. See generally Dale K. Barker Co., P.C. v. Bushnell , 2010 UT App 189, ¶ 19, 237 P.3d 903 (awarding fees incurred on appeal for the "successful defense of the [district] court's breach of contract determinations" but declining to award fees "associated with [the party's] unsuccessful arguments related to the [district] court's original determination of attorney fees and costs"). Accordingly, we remand this case to the district court for a determination of the amount of attorney fees and costs reasonably incurred and recoverable on appeal.

CONCLUSION

¶ 35 We conclude that Exodus's obligation to pay Skolnick was not subject to any condition precedent, and therefore affirm the district court's grant of summary judgment in favor of Skolnick on her claim for breach of the Employment Agreement. We also affirm the district court's determination that Skolnick is entitled to recover attorney fees pursuant to the Employment Agreement. The district court erred, however, when it determined that rule 73 provided Exodus only seven days to respond to Skolnick's separately-filed motion for attorney fees, and therefore the district court should have considered Exodus's opposition memorandum. Accordingly, we vacate the district court's March 27 order, and reinstate the district court's February 28 ruling and order, and remand the case for entry of judgment in keeping with that order, and for quantification of Skolnick's attorney fees incurred on the successful portion of her defense of this appeal.

      Skolnick, Hospital, and Exodus entered into this tripartite arrangement in an effort to comply with the provisions of the Stark Law, 42 U.S.C. § 1395nn (2012), a federal law which limits the ability of physicians to refer Medicare or Medicaid patients to hospitals with which they have financial relationships, but contains an exception for physician recruitment. See, e.g. , United States ex rel. Bartlett v. Ashcroft , 39 F.Supp.3d 656, 661-62, 669 (W.D. Pa. 2014) ; see generally 61 Am. Jur. Proof of Facts 3d 245 (2018). In this case, we are not asked to determine whether this arrangement is in fact in compliance with the Stark Law.

      The last check Skolnick received from Exodus was dated December 6, 2014, and covered the pay period between November 22 and December 6, 2014, although Exodus stopped payment on this check before Skolnick could access the funds.

      Hospital also filed suit against Skolnick and Exodus, alleging breach of the Recruiting Agreement, and that case was consolidated with Skolnick's suit against Exodus. Hospital has since settled its claims against both Skolnick and Exodus, and is not a party to this appeal.

      Exodus also argues in its brief that Hospital's "failure to provide [g]uaranteed [m]onthly [a]mount payments frustrated the purpose" of the two agreements and therefore "excused Exodus'[s] performance." Frustration of purpose is one of "[t]hree distinct grounds for discharge of the obligor's duty" under a contract. See Restatement (Second) of Contracts, Chapter 11 Introductory Note (Am. Law Inst. 1981). "Frustration of purpose differs from the defense of impossibility only in that performance of the promise, rather than being impossible or impracticable, is instead pointless." Tech Center 2000, LLC v. Zrii , LLC , 2015 UT App 281, ¶ 32, 363 P.3d 566 (quotation simplified). It was certainly not impracticable for Exodus to pay Skolnick; indeed, Exodus makes no argument that it lacked the ability to pay Skolnick for her services. Likewise, it was certainly not "pointless" for Exodus to pay Skolnick-after all, she continued to work for Exodus and generate accounts receivable on its behalf. Accordingly, Exodus cannot demonstrate the elements of a "frustration of purpose" defense, and therefore we conclude that Exodus was not relieved of its contractual obligations due to frustration of purpose.

      In our view, this interpretation is consistent with the intentions of the rule's drafters, as expressed in the language of rule 73, although we acknowledge that the language of the rule could potentially be worded more clearly. If our interpretation is not in harmony with the intent of the rule's drafters, we encourage the supreme court, through its Advisory Committee on the Rules of Civil Procedure, to consider revising the rule.


source: Caselaw Access Project

author: CHRISTIANSEN FORSTER, Judge:

license: Public Domain

text:
    David SILVA, Appellee, v. Bonnie SILVA, Appellant.
    No. 20160171-CA
    Court of Appeals of Utah.
    Filed November 8, 2018
    J. Spencer Ball, Salt Lake City, Attorney for Appellant
    Shawn D. Turner, Attorney for Appellee
    Judge Michele M. Christiansen Forster authored this Opinion, in which Judges Gregory K. Orme and David N. Mortensen concurred.
    Opinion
   CHRISTIANSEN FORSTER, Judge:

¶1 Bonnie Silva appeals the district court's denial of her motions to set aside a default judgment and a sheriff's sale following that judgment. She also challenges the district court's award of attorney fees. We vacate the district court's rulings and remand for further proceedings.

BACKGROUND

¶2 Bonnie Silva and David Silva divorced in 2010. The marital estate included interests in fifteen parcels of real property-four properties held jointly, one property held by David, and ten properties held by Bonnie. The decree allocated the properties and ordered the parties to execute quitclaim deeds within thirty days, conveying their interests in the properties to one another as specified in the decree. If either party failed to execute a quitclaim deed, the divorce decree authorized the other party to seek a court order to transfer title. One of the properties awarded to David was a residential property located on Dennis Drive in West Valley City, Utah (the Dennis Drive Property).

¶3 In June 2010, pursuant to the divorce decree, Bonnie executed a quitclaim deed as "Grantor Bonnie Moore, now known as Bonnie Silva," purportedly conveying the Dennis Drive Property to David. But when David attempted to record the deed, he discovered that "Bonnie Moore[,] as Trustee for the Consolidated Trust," actually held title to the Dennis Drive Property. He further discovered that one week before he had filed for divorce in September 2008, Bonnie had conveyed the Dennis Drive Property and other properties then in her name to herself and her daughters, K.V. Lum and R. Carter, as trustees of a trust known as the Consolidated Trust. After learning these facts, David sent a revised quitclaim deed to Bonnie, but she did not sign and return it as requested. Several months later, Bonnie, as a trustee of the Consolidated Trust, again conveyed the Dennis Drive Property and other properties to Lum, as trustee of the Consolidated Trust.

¶4 In October 2010, David filed a Motion for Contempt with the district court. Because he claimed he could not locate Bonnie, David filed a Motion for Alternative Service, which the court granted. The district court held an evidentiary hearing and entered a default judgment finding Bonnie in contempt for failing to convey the Dennis Drive Property to David. However, the court left open a window during which Bonnie could cure the contempt. If Bonnie did not convey the Dennis Drive Property to David within thirty days, the court would enter a $219,000 judgment against her. Bonnie did not convey the property to David during this time. A few months later, Lum, as a trustee of the Consolidated Trust, conveyed title to the Dennis Drive Property to Carter, as a trustee of the Consolidated Trust. The district court then entered a contempt judgment against Bonnie, reducing slightly the $219,000 by amounts David owed to Bonnie under the divorce decree.

¶5 The following month, David instituted this action against Bonnie and her daughters alleging fraudulent conveyance and seeking to quiet title to the Dennis Drive Property. David filed a motion for alternative service recounting his prior unsuccessful efforts to serve Bonnie. David asserted that the process server had attempted personal service at Bonnie's last known address four separate times. The district court ordered alternative service by publication, which David accomplished.

¶6 Bonnie did not answer the complaint. The district court clerk consequently entered a default certificate against Bonnie, and the court ordered an evidentiary hearing on damages. Concerned that Bonnie may have received inadequate notice of the hearing, the district court rescheduled the hearing and required additional service on Bonnie. David attempted service by mailing copies of the notice of hearing to what David claimed was Bonnie's last known address by both regular and certified mail. David also attempted personal service whereby the process server left the notice at Bonnie's last known residence on three separate occasions. David then completed service by publication again.

¶7 Bonnie did not appear at the hearing on damages. In its Findings of Fact and Conclusions of Law, the district court concluded that "Service of Process of the Complaint and notice of the evidentiary hearing on damages were in accordance with the Rules of the Court, the Statutes of Utah, and the Constitutional requirements of due process." The district court also determined that Bonnie had fraudulently conveyed the Dennis Drive Property and her other properties to the Consolidated Trust. Accordingly, the district court ruled that the contempt judgment entered in the divorce action attached to the properties, that Bonnie and her daughters were enjoined from transferring or encumbering the properties, and that David "may levy execution on the properties ... and sell the amount of the property necessary to satisfy the judgment." Finally, the district court awarded attorney fees and costs to David. The district court thus entered default judgment against Bonnie in the amount of the contempt judgment, now attached to Bonnie's properties. The court also awarded costs and attorney fees totaling nearly $50,000. The district court clerk subsequently issued a writ of execution on three of Bonnie's properties, including the Dennis Drive Property.

¶8 Later that month, Bonnie's counsel entered an appearance in the district court and filed a motion pursuant to rule 60(b)(1) of the Utah Rules of Civil Procedure seeking to set aside the default judgment on the basis of excusable neglect and to quash the writ of execution. The district court held a hearing, which Bonnie and her counsel attended. At that hearing, Bonnie maintained that the default judgment should be set aside on the ground of excusable neglect because she did not receive actual notice of the action and service was insufficient under the circumstances. Bonnie acknowledged that service complied with the law, but she argued that David knew where Bonnie was located and could easily have contacted her to give her actual notice of his claims.

¶9 Bonnie filed an affidavit with her rule 60(b) motion and a second affidavit with her reply motion. In her first affidavit, Bonnie alleged that she had not received notice of the current action against her. She further alleged that she received a call from David notifying her that "something was wrong with the quitclaim deed" but that "David never indicated to [her] in that telephone call that there was any court proceeding." In her second affidavit, Bonnie alleged that David knew of various means of contacting her, including her two email addresses or through their respective children and the renters of their properties. David did not refute these allegations.

¶10 The district court denied Bonnie's motion to set aside based upon excusable neglect on the ground that "service [of the notice] and the resulting default were appropriate." The court reached this conclusion, in part, because the court determined Bonnie provided no evidence-despite her two affidavits-supporting her assertions that David knew where Bonnie was located and that she did not receive actual notice of the proceedings. And although the court recited the law relative to excusable neglect, the court did not address excusable neglect in its analysis. Similarly, the court denied the motion to quash for Bonnie's failure to provide evidence of irreparable harm.

¶11 Four days later, the Dennis Drive Property and the other two properties subject to the writ of execution were sold at a sheriff's sale. Bonnie responded with a motion for a temporary restraining order (TRO), a motion to void the execution sale, and a motion to join the sale purchasers as parties to the action. After a hearing, the district court denied the TRO on the ground that Bonnie had failed to meet the required elements for relief. The court denied the motion to join the purchasers on the ground that "[Bonnie] cites rules that apply before a judgment is made and are not applicable for a case as this one where judgment was entered." The court noted that "even if there was no judgment in this case, there is no basis, claim, or cause of action asserted against the purchasers." The court denied the motion to void the execution sale on the ground that the court had already ruled at the TRO hearing that the notice of sale was properly served.

¶12 Bonnie appealed the district court's denial of her motions to set aside the default judgment and the sheriff's sale, and the district court's award of attorney fees to David. We issued an opinion in this matter on July 28, 2017. See Silva v. Silva , 2017 UT App 125, 402 P.3d 36, vacated , Jan. 9, 2018. We subsequently granted a petition for rehearing, vacated that opinion, and reheard the matter.

ISSUES AND STANDARDS OF REVIEW

¶13 Bonnie asserts two claims of error on appeal. First, she contends that the district court abused its discretion in denying her motion to set aside the default judgment. We generally review a district court's denial of a rule 60(b) motion under an abuse of discretion standard. Utah Res. Int'l, Inc. v. Mark Techs. Corp. , 2014 UT 60, ¶ 11, 342 P.3d 779.

¶14 Second, Bonnie contends that the district court abused its discretion in denying her motion to set aside the sheriff's sale, claiming she lacked notice and pointing to irregularities in the sale. "A district court's decision to set aside a sheriff's sale is to be reviewed for an abuse of discretion." Meguerditchian v. Smith , 2012 UT App 176, ¶ 9, 284 P.3d 658 (quotation simplified).

ANALYSIS

I. Rule 60(b) Motion

¶15 Bonnie first contends that the district court abused its discretion in denying her rule 60(b) motion to set aside the default judgment. " Rule 60(b) of the Utah Rules of Civil Procedure provides a mechanism for a party to obtain relief from a final order or judgment ...." Asset Acceptance LLC v. Stocks , 2016 UT App 84, ¶ 13, 376 P.3d 322. "[A] movant is entitled to have a default judgment set aside under [ rule] 60(b) if (1) the motion is timely; (2) there is a basis for granting relief under one of the subsections of 60(b); and (3) the movant has alleged a meritorious defense." Menzies v. Galetka , 2006 UT 81, ¶ 64, 150 P.3d 480.

¶16 With respect to the second requirement, Bonnie asserted excusable neglect as a basis for relief. See Utah R. Civ. P. 60(b)(1). The excusable neglect inquiry is a flexible one in which the district court is granted broad discretion "to consider all relevant factors and give each factor the weight that it determines it deserves." Jones v. Layton/Okland , 2009 UT 39, ¶¶ 17, 25, 214 P.3d 859. In such equitable inquiries, "the question is always whether the particular relief sought is justified under principles of fundamental fairness in light of the particular facts." Id. ¶ 17. Courts are generally encouraged to be "indulgent toward setting a judgment aside where there is reasonable justification or excuse for the defendant's failure to answer and when timely application is made." Miller v. Martineau & Co. , 1999 UT App 216, ¶ 25, 983 P.2d 1107 (quotation simplified). Indeed, upon a timely motion to set aside, "it is quite uniformly regarded as an abuse of discretion to refuse to vacate a default judgment where there is reasonable justification or excuse for the defendant's failure to appear." Arbogast Family Trust v. River Crossings, LLC , 2008 UT App 277, ¶ 23, 191 P.3d 39 (quotation simplified), aff'd , 2010 UT 40, 238 P.3d 1035.

¶17 Here, the district court did not address whether Bonnie's failure to respond to the complaint was due to excusable neglect. Instead, the court's analysis focused only on the propriety of its order authorizing alternative service. In its decision denying Bonnie's motion to set aside, the court observed that the court had approved the alternative service and that Bonnie's counsel had "admitted at the hearing that service upon [her] was legally proper." On this basis, the district court concluded that "service and the resulting default were appropriate." But the question before the court was not whether service or entry of default judgment was technically appropriate. Indeed, despite proper service and entry of an otherwise appropriate default judgment, parties under our rules are afforded an opportunity to set a judgment or final order aside. The correct inquiry, then, is whether Bonnie's lack of actual notice constitutes a reasonable justification to set aside the default "under principles of fundamental fairness in light of the particular facts." Jones , 2009 UT 39, ¶ 17, 214 P.3d 859. While the particular circumstances of service of process may shed light on whether Bonnie's failure to respond was reasonable and excusable, the district court failed to address this issue.

¶18 Bonnie argues that David had "many means at his disposal to contact [her] to give notice that he was suing her, including calling and emailing her." Her affidavit alleges that he knew "her two active email addresses, her telephone number, ... her children, and many other means he had after 13 years of marriage" to contact her. If Bonnie's unrefuted allegations are to be believed, then David, contrary to his representations to the court when he filed his motion for alternative service, had the ability to contact Bonnie through means that would have been more likely to reach her. If this is the case, then there was likely "reasonable justification" for Bonnie's failure to answer. See Arbogast Family Trust , 2008 UT App 277, ¶ 23, 191 P.3d 39.

¶19 The district court did not address whether these circumstances made Bonnie's failure to respond excusable. Rather, the court merely ended its inquiry upon determining that (1) the alternative service was adequate and (2) Bonnie admitted the technical legality of that service of process. Because this determination did not address Bonnie's excusable neglect argument, we vacate the district court's ruling and remand for further proceedings.

II. Sheriff's Sale

¶20 Bonnie also challenges the district court's refusal to set aside the sheriff's sale of three of her properties to satisfy the judgment. A court "may set aside a sheriff's sale where (1) a debtor's property is sold at a grossly inadequate price and (2) there were irregularities during the sale that contributed to the inadequacy of price or circumstances of unfairness during the redemption period caused by the conduct of the party benefitted by the sale." Pyper v. Bond , 2011 UT 45, ¶ 15, 258 P.3d 575.

¶21 Bonnie points to two irregularities in the sale that she believes justify setting it aside. First, she asserts that she and her attorney did not receive proper notice of the sale as outlined by rules 69B(b), 64(a)(10), and 5 of the Utah Rules of Civil Procedure. Second, she points out that the sheriff's sale disposed of all three properties together rather than as separate parcels. She asserts that this is contrary to rule 69B(d), which directs, "The property shall be sold in such parcels as are likely to bring the highest price. Severable lots of real property shall be sold separately." Utah R. Civ. P. 69B(d). Bonnie maintains that these irregularities contributed to a grossly inadequate sale price, pointing out that the Dennis Drive Property alone was valued at $219,000 at "the bottom of the real estate depression in Utah," yet the Dennis Drive Property plus two other single family dwellings were sold together at auction for only $186,000 in 2016.

¶22 In its ruling on Bonnie's motion to set aside the default judgment, the district court did not fully address her arguments. The ruling states simply that the court had "already addressed at the previous hearings the issue of notice of the sale (not required to be served on counsel and notice of sale not done under Rule 5 )." From what we can glean from the record, this ruling seems to be based on the court's reading of rule 69B(b)(3), which states that "[i]f the property is real property, the officer shall post written notice" of the sale. Id. R. 69B(b)(3). The district court appears to have taken this statement in the rule to mean that only posting of notice, rather than service on the defendant pursuant to rule 5, is required under 69B. But in examining the structure of rule 69B(b), this is not the case.

¶23 The rule first states, "The officer shall set the date, time and place for sale and serve notice thereof on the defendant ...." Id. R. 69B(b) (emphasis added). The rule then goes on to state, "The officer shall publish notice of the date, time and place of sale as follows ...." Id. Rule 69B(b)(3), on which the district court appears to have relied for its determination that "if it's real property ... [t]he manner [of service] is different," is only a subpart of subsection (b) and describes the manner in which notice is to be published with respect to real property.

It does not negate the requirement in the first sentence of subsection (b) regarding service upon the defendant. Rule 64(a)(10) defines "serve" for purposes of rule 69B as "any method of service authorized by Rule 5," id. R. 64(a)(10), and rule 5 requires service upon a party's attorney where the party is represented by counsel, id. R. 5(b). Thus, the district court's determination that service upon Bonnie's attorney was not required was erroneous.

¶24 Nevertheless, the defect in service does not necessarily mean that the sheriff's sale should be set aside. See Pyper , 2011 UT 45, ¶ 15, 258 P.3d 575 (stating that a sheriff's sale may be set aside where the price is "grossly inadequate" and there are "irregularities during the sale that contributed to the inadequacy of price or circumstances of unfairness"). Further analysis is needed to make this determination. Because the district court erred in its determination regarding notice and did not fully address Bonnie's other arguments, we remand for the district court to address those arguments.

III. Attorney Fees on Appeal

¶25 Finally, both parties request an award of attorney fees incurred on appeal. Bonnie contends that "[e]quity requires that [she] be granted her attorney's fees for having to make this appeal." David counters that even if Bonnie is "able to prevail on appeal, [she] would not be entitled to [her] fees," because she was "not awarded fees below." David also requests attorney fees on appeal because he was awarded fees in the default judgment.

¶26 "When a party is entitled to attorney fees below and prevails on appeal, that party is also entitled to fees reasonably incurred on appeal." Jordan Constr., Inc. v. Federal Nat'l Mortgage Ass'n , 2017 UT 28, ¶ 71, 408 P.3d 296 (quotation simplified). "In Utah, attorney fees are awardable only if authorized by statute or by contract." Jones v. Riche , 2009 UT App 196, ¶ 1, 216 P.3d 357 (quotation simplified). "However, in the absence of a statutory or contractual authorization, a court has inherent equitable power to award reasonable attorney fees when it deems it appropriate in the interest of justice and equity." Stewart v. Utah Public Service Comm'n , 885 P.2d 759, 782 (Utah 1994). "Courts have exercised that inherent power in several categories of cases," such as "when a party acts in bad faith, vexatiously, wantonly, or for oppressive reasons." Id. (quotation simplified).

¶27 The parties present no contract or statute authorizing attorney fees under the circumstances. Further, neither party has made the required showing or otherwise persuaded us that equity requires an award of attorney fees. Accordingly, we decline to exercise our equitable power and deny each party's request for attorney fees incurred on appeal.

CONCLUSION

¶28 We conclude that the district court did not address Bonnie's arguments for setting aside the default judgment and the sheriff's sale. Accordingly, we vacate the district court's rulings on these motions and remand for the district court to fully address Bonnie's arguments. We deny each party's request for attorney fees incurred on appeal.

      Because Bonnie and David share a last name, we refer to them by their first names throughout this opinion. We intend no disrespect by this apparent informality.

      Bonnie also asserts that the attorney fees award associated with the default judgment was not supported by findings regarding the reasonableness of the award. Because we vacate the district court's decision based on Bonnie's first argument, we do not address her attorney fees argument in detail.

      Because we conclude that the district court failed to properly analyze Bonnie's excusable neglect argument-the basis she alleged for relief-we do not consider the other requirements.


text:
    STATE of Utah, Appellee, v. Jennifer ORYALL, Appellant.
    No. 20170110-CA
    Court of Appeals of Utah.
    Filed November 8, 2018
    Douglas J. Thompson, Margaret P. Lindsay, and Dustin M. Parmley, Attorneys for Appellant
    Sean D. Reyes and Marian Decker, Salt Lake City, Attorneys for Appellee
    Judge Ryan M. Harris authored this Opinion, in which Judges Gregory K. Orme and Jill M. Pohlman concurred.
    Opinion
   HARRIS, Judge:

¶1 May a police officer, without reasonable suspicion of criminal activity, run a license plate check on a passing vehicle? The federal courts, interpreting the U.S. Constitution, have answered this question in the affirmative. Jennifer Oryall, who was found to be driving under the influence of drugs after an officer checked her license plate and detained her, asks us to conclude that law enforcement officers violated the Utah Constitution by performing such a check without reasonable suspicion that Oryall was engaged in criminal activity. The district court was not persuaded by Oryall's arguments, and neither are we. Accordingly, we affirm.

BACKGROUND

¶2 Jennifer Oryall was driving on State Road 198 in Payson, Utah, when she passed a police officer (Officer) who was parked on the side of the road running license plate checks on passing cars. Officer ran Oryall's license plate number through a government-managed electronic database containing vehicle registration records. This check revealed that the vehicle was registered to Oryall, a person Officer had previously encountered in his law enforcement career. Intrigued, Officer then ran a check on Oryall's driver's license records in a separate government-managed electronic database. This check revealed that Oryall's driver's license was suspended. Officer then sought to confirm that Oryall was indeed the driver of the vehicle, and he watched as the car parked at a nearby convenience store. He then saw Oryall exit the vehicle and go inside, allowing him to confirm her identity.

¶3 After Oryall walked out of the convenience store, she got back in her car and resumed driving, and Officer initiated a traffic stop. Officer immediately observed that Oryall manifested several signs of impairment, including white powder in and around her nostrils, glossy eyes, constricted pupils, foam on her lips, muscle and eyelid tremors, and slurred speech. Officer then performed field sobriety tests and determined that Oryall was impaired. Oryall later confessed to having ingested a number of controlled substances prior to driving. Oryall was arrested and later charged with driving under the influence, a third degree felony, possessing drug paraphernalia, a class B misdemeanor, and driving on a suspended license, a class C misdemeanor.

¶4 Following a preliminary hearing, the magistrate dismissed the drug paraphernalia charge, but bound Oryall over for trial on the two remaining charges. Oryall then moved to suppress all evidence from her traffic stop. In the memorandum accompanying her motion, Oryall argued that the Utah Constitution "[conferred] an expectation of privacy in motor vehicle and driver records," that the Utah Government Records Access and Management Act (GRAMA) recognized that expectation, and that therefore, under Utah law, police officers are not entitled to check license plates against the government-managed databases containing vehicle registration or driver's license information without a reasonable suspicion of criminal activity. The district court denied Oryall's motion to suppress. Later, Oryall entered into a plea agreement with the State pursuant to which she entered a conditional guilty plea to the felony DUI charge, reserving the right to appeal the court's denial of her motion to suppress, and the State agreed to the dismissal of the remaining misdemeanor count.

ISSUE AND STANDARD OF REVIEW

¶5 Oryall now exercises that right to appeal, and asks us to reverse the district court's denial of her motion to suppress. A district court's denial of a motion to suppress presents a mixed question of law and fact. State v. Fuller , 2014 UT 29, ¶ 17, 332 P.3d 937. In this context, we review a district court's factual findings for clear error and its legal conclusions, including its application of law to the facts of the case, for correctness. Id .

ANALYSIS

¶6 The Utah Constitution protects "[t]he right of the people to be secure in their persons, houses, papers and effects against unreasonable searches and seizures." Utah Const. art. I, § 14. As pertinent here, this provision "prohibits state actors from unreasonably intruding into areas where citizens have a legitimate expectation of privacy." Schroeder v. Utah Attorney Gen.'s Office , 2015 UT 77, ¶ 22, 358 P.3d 1075. Thus, before properly invoking article I, section 14 of the Utah Constitution, a defendant must, as a "threshold" matter, "demonstrat[e] a legitimate expectation of privacy in the area searched." State v. Atwood , 831 P.2d 1056, 1058 (Utah Ct. App. 1992) ("The requirement of demonstrating a legitimate expectation of privacy in the area searched is a threshold requirement that a defendant must satisfy in order to establish a violation of constitutional rights."); see also State v. Larocco , 794 P.2d 460, 469 (Utah 1990) (stating that "this court will continue to use the concept of expectation of privacy as a suitable threshold criterion for determining whether article I, section 14 is applicable").

¶7 In this case, Oryall contends that, under article I, section 14 of the Utah Constitution, she has a "right to privacy" in both her motor vehicle registration records and her driver's license records that prevents police officers from accessing those records without reasonable suspicion of criminal activity, even though those records are collected and kept by governmental agencies. She asserts that this "right to privacy" was violated in this case, because it is undisputed that Officer accessed her records before forming a reasonable suspicion of criminal activity. Accordingly, she argues that the district court erred in denying her motion to suppress all of the evidence resulting from Officer's check of her license plate, vehicle registration, and driver's license records.

¶8 Before examining Oryall's argument in detail, we pause first to note that federal appellate courts, interpreting the federal constitution, have unanimously determined that law enforcement officers may conduct warrantless and suspicionless checks of passing motorists' vehicle registration and driver's license information. See, e.g. , United States v. Miranda-Sotolongo , 827 F.3d 663, 667 (7th Cir. 2016) (stating that "[a] police officer's check of a vehicle registration in a database is not a Fourth Amendment search," and noting that "every other circuit that has considered this issue has [so] held"). Federal courts reason that, because a vehicle registration check "involves only checking publicly displayed registration information against official public records," it is not substantively different from comparing "a photograph of a person against mug shots or latent fingerprints against FBI fingerprint records." Id. at 668.

¶9 Furthermore, we are aware of no other state that has construed its own constitution to require an officer to have a warrant (or at least reasonable suspicion) before checking a motorist's vehicle registration or driver's license records. See , e.g. , State v. Richter , 145 N.H. 640, 765 A.2d 687, 688 (2000) (holding that an officer's check of "motor vehicle licenses and records" did not constitute a search within the meaning of the state constitution, because "the state is the very body that issues, controls, and regulates such licenses and records" (quotation simplified) ); see also People v. Bushey , 29 N.Y.3d 158, 53 N.Y.S.3d 604, 75 N.E.3d 1165, 1166-68 (2017) (holding that a defendant had no "reasonable expectation of privacy in either his license plate or the information lawfully obtained and accessible through the DMV database").

¶10 Oryall asks us to strike a different path under the Utah Constitution, and makes two specific arguments in support of her position. First, she cites State v. Thompson , 810 P.2d 415 (Utah 1991), and points out that, on occasion, our supreme court has interpreted the Utah Constitution's prohibition on "unreasonable searches and seizures," see Utah Const. art I, § 14, more broadly than federal courts have interpreted the similarly-worded Fourth Amendment, and argues that we should do likewise here. Second, she asserts that our legislature, in passing GRAMA, "recognized" a state constitutional right to privacy in documents such as the ones found in the databases containing vehicle registration and driver's license information. We find neither of Oryall's arguments persuasive.

¶11 First, Thompson is entirely distinguishable from the case at hand. In that case, a prosecutor issued a subpoena-ultimately determined to be an illegal subpoena, see Thompson , 810 P.2d at 419 -to a third-party financial institution in an effort to obtain bank records relevant to various defendants suspected of bribery, racketeering, and antitrust violations. Id . at 415. The prosecutor was able to obtain the documents from the bank, and presented some of those documents as evidence at trial. Id . at 416. Defendants were convicted after a jury trial and appealed, arguing that, unlike the federal Constitution, the Utah Constitution afforded to individuals a right of privacy in bank records held by a third-party financial institution and, therefore, that they had a constitutional right against unreasonable searches of those records. Id . at 415-16. Our supreme court agreed with the defendants, stating that "it is virtually impossible to participate in the economic life of contemporary society without maintaining an account with a bank," and that therefore "opening a bank account is not entirely volitional and [does not] constitute[ ] a waiver of an expectation of privacy." Id. at 418 (quotation simplified). The court concluded that "it is reasonable for our citizens to expect that their bank records will be protected from disclosure" to the government. Id . (quotation simplified). Accordingly, the court held that that the Utah Constitution establishes a right to privacy for all records "supplied to [a] bank to facilitate the conduct of ... financial affairs upon the reasonable assumption that the information [will] remain confidential." Id. (quotation simplified).

¶12 Oryall urges that vehicle registration and driver's license records, like bank records, contain information that the subject of the record may consider private or confidential. Oryall further contends that "it is reasonable for our citizens to expect [that] personal data compiled by the government" will be protected from disclosure because, like opening a bank account, "it is virtually impossible to participate in contemporary society without ... registering motor vehicles [or] obtaining drivers licenses or other ID cards." Accordingly, Oryall contends that her vehicle registration and driver's license records should have been protected from Officer's suspicionless search.

¶13 We see the matter differently. Significant details distinguish the sort of search contemplated in Thompson from Officer's examination of Oryall's records, not least of which is the fact that, in Thompson , government officials sought records that were in the possession of third-party banks, Thompson , 810 P.2d at 416, whereas in this case the records Officer sought were issued, controlled, and regulated by the very government from which Oryall sought to protect them. It is one thing to hold that the constitution recognizes a right to privacy that prevents the government-without a lawful warrant or subpoena-from accessing information that a citizen has entrusted to a third party, such as a bank or a mobile phone provider. See Thompson , 810 P.2d at 418 ; see also Carpenter v. United States , --- U.S. ----, 138 S.Ct. 2206, 2217, 2219-20, 201 L.Ed.2d 507 (2018) (declining to extend the federal "third-party doctrine" to cell-site location information, and holding that citizens have a "reasonable expectation of privacy" in cell-site location information held by third-party mobile phone providers). But it is quite another thing to hold that the constitution recognizes a right of privacy that would prevent a law enforcement officer-part of the state or local government-from accessing information that another part of that same government already lawfully possesses. We therefore decline Oryall's invitation to extend Thompson in such a way as to prohibit the government from accessing information already in its lawful possession.

¶14 Next, Oryall directs our attention to GRAMA, and points out that, in the "legislative intent" section of that statute, our legislature expressly "recognize[d]" the citizenry's constitutional "right of privacy in relation to personal data gathered by governmental entities." See Utah Code Ann. § 63G-2-102(1) (LexisNexis 2016). But even assuming GRAMA applies here, GRAMA cannot shoulder the load that Oryall attempts to place upon it. As an initial matter, GRAMA was enacted to balance two competing rights: the "public's right of access to information concerning the conduct of the public's business," and the public's right of privacy in whatever personal data the government may have already collected. See id. The "right of privacy" to which GRAMA refers is, in context and generally speaking, a reference to a conceptual limit on the public's right to access governmental information, and not a general prohibition on one government agency accessing information possessed by another government agency.

¶15 This principle is borne out by the provisions of GRAMA itself. Three separate statutory subsections appear to give law enforcement officers the right to access records such as vehicle registration and driver's license information. First, GRAMA expressly authorizes one governmental entity to provide private records in its possession to another governmental entity if the requesting entity "enforces ... or investigates civil, criminal, or administrative law, and the record is necessary to a proceeding or investigation."See id. § 63G-2-206(1)(b). Second, GRAMA provides that any governmental entity may disclose private records in its possession to "a government prosecutor [or] peace officer," as long as those records "evidence or relate to a violation of law." Id. § 63G-2-206(9). Finally, GRAMA provides that records "to which access is governed ... pursuant to ... another state [or] federal statute" are "governed by the specific provisions of" the other statute. Id. § 63G-2-201(6)(a). Federal law provides that personal information in the possession of "[a] State department of motor vehicles" "shall be disclosed for use in connection with matters of motor vehicle or driver safety," and "may be disclosed ... [f]or use by any government agency, including any court or law enforcement agency, in carrying out its functions." See 18 U.S.C. § 2721(a) (2000), (b)(1). Oryall does not argue that any of these statutory exceptions built into GRAMA are inapplicable here. And Oryall likewise does not attempt to argue that any of these statutory exceptions are unconstitutional. Accordingly, these statutory provisions are dispositive of Oryall's second argument.

¶16 Having considered and rejected Oryall's two arguments, we are left with nothing else from which we might conclude that Oryall had a reasonable expectation of privacy in her driver's license and vehicle registration records. Therefore, Oryall has failed to make the threshold showing required to establish a constitutional violation. See Atwood , 831 P.2d at 1058 ("The requirement of demonstrating a legitimate expectation of privacy in the area searched is a threshold requirement that a defendant must satisfy in order to establish a violation of constitutional rights."). Accordingly, we have no reason to disturb the district court's denial of Oryall's motion to suppress.

CONCLUSION

¶17 Oryall has failed to establish, as a threshold matter, that she possessed a reasonable expectation of privacy in her motor vehicle registration or driver's license records, and has therefore failed to establish that Officer was constitutionally prohibited from accessing those records, even in the absence of reasonable suspicion that Oryall committed a crime. Accordingly, we affirm the district court's order denying Oryall's motion to suppress.

      Under rule 11(j) of the Utah Rules of Criminal Procedure, if approved by the court and consented to by the prosecution, a criminal defendant may enter a conditional guilty plea, reserving the right to appeal an "adverse determination of any specified pre-trial motion," and the right to "withdraw the plea" if the appeal is successful.

      In Thompson , the Utah Supreme Court made clear that, had the subpoena in question been legally issued, there would have been no constitutional problem with the prosecutor obtaining the bank records. See State v. Thompson , 810 P.2d 415, 418 (Utah 1991) (stating that "[a] bank can be compelled to turn over a customer's records when served with a lawful subpoena," and that "the depositor or customer cannot maintain a constitutional challenge to evidence gathered pursuant to a subpoena duces tecum lawfully issued to his bank"). Indeed, the Utah Supreme Court recently noted that Thompson "stands for the unremarkable proposition that there is no violation of article I, section 14 when the state obtains bank records through a reasonable search and seizure," and that "whatever 'right of privacy' individuals may have in their bank records, the Utah Constitution permits the state to intrude upon it 'pursuant to a subpoena' that is 'lawfully issued' to a bank."See Schroeder v. Utah Attorney Gen.'s Office , 2015 UT 77, ¶ 24, 358 P.3d 1075 (quoting Thompson , 810 P.2d at 418 ).

      The State argues that GRAMA's protections "extend only to 'personal data gathered' by the State," and that because automobile registration certificates and driver's licenses are issued by the State, GRAMA does not apply to those records. We do not reach the merits of this argument, and simply assume, for purposes of our analysis, that automobile registration and driver's license records fall within the ambit of GRAMA.


author: TOOMEY, Judge:

text:
    Pete C. HACKFORD, Petitioner, v. UTAH STATE RETIREMENT BOARD, Respondent.
    No. 20161052-CA
    Court of Appeals of Utah.
    Filed November 16, 2018
    Thomas J. Burns and John D. Walch, Salt Lake City, Attorneys for Petitioner
    David B. Hansen and Erin G. Christensen, Attorneys for Respondent
    Judge Kate A. Toomey authored this Opinion, in which Judges Michele M. Christiansen Forster and Diana Hagen concurred.
    Opinion
   TOOMEY, Judge:

¶1 Pete C. Hackford seeks review of a decision of the Utah State Retirement Board (the Board) that his retirement benefits from two periods of public employment must be calculated separately and that his original retirement benefits remained subject to a statutory early age reduction. We decline to disturb the Board's decision.

¶2 Hackford worked for the Utah Labor Commission in the Division of Boiler, Elevator, and Mine Safety (the Division) for nearly twenty years before seeking early retirement at age fifty. Upon employment, Hackford became a member of the Utah Retirement Systems' (the URS) Tier 1 Noncontributory Retirement System, which allowed him to acquire retirement benefits without personally contributing to the retirement system. As an eligible veteran, Hackford elected to purchase a credit for his nearly six years of military service to be applied toward his years of service credit with the Division. This meant that in April 2011, when Hackford entered early retirement, he had accrued about twenty-five years of service credit that applied toward his retirement benefits.

¶3 When Hackford applied for retirement, he signed a "Notice of Post-Retirement Employment Restrictions," indicating that he understood that "[his] monthly benefit will be cancelled if [he] return[ed] to employment with a participating employer within one year of [his] retirement date." He also signed a statement acknowledging that he "read and underst[ood] the retirement options ..., stipulations about alteration, addition, or cancellation of retirement, and other limitations" in accordance with the statutes governing the URS and the Board. See Utah Code Ann. § 49-11-607(1) (LexisNexis 2015). Because Hackford was fifty years old and retired with less than thirty years of service, his retirement allowance was subject to a statutory early age reduction. See id. § 49-13-402(2)(b) (Supp. 2018).

¶4 Hackford retired on May 1, 2011, and began receiving his monthly retirement allowance. But the Division reemployed him in his previous position the next month, on June 13, 2011. A retirement counselor for the URS informed Hackford that, upon reemployment, his retirement benefit would be cancelled and he would be reinstated in the retirement system. And when he retired a second time, his original retirement benefit calculation would resume and the additional years of post-retirement service credit would be calculated as an additional retirement benefit. Hackford told the retirement counselor that he understood how his retirement would be calculated in the future. In August 2011, the URS received a Post-Retirement Employment Form signed by Hackford, notifying it that Hackford was reemployed with the Division. Beginning July 1, 2011, the URS cancelled Hackford's retirement allowance and reinstated him to active member status in the retirement system. To date, Hackford is still employed with the Division.

¶5 In the fall of 2014, Hackford contacted the URS to request an estimate of his retirement benefit with projected retirement dates of either January 1, 2015, or May 1, 2016. The estimates provided that his original retirement allowance would resume, subject to the early age reduction, and that an additional allowance based upon the number of years of post-retirement reemployment service would be calculated separately.

¶6 Hackford requested to remove the early age reduction from his 2011 retirement allowance, which the URS denied. It explained that, "at the time [Hackford] retired in May of 2011, [he] discussed [his] retirement with a counselor, [was] informed of the statutory reduction in [his] benefit due to early retirement and the applicable return to work provisions, and [he] decided to retire anyway." In addition, Hackford was informed at the time of his reemployment that his additional service credits would be calculated separately as additional benefits and "the benefit that was canceled [would] also be resumed." (Quotation simplified.) Based on his reemployment following the original retirement, the URS determined that, under the Utah Code, he was "not entitled to have the original benefit recalculated by removing the age reduction" upon his second retirement.

¶7 Hackford appealed the denial to the Board by filing a Request for Board Action, arguing that the URS "misapplied" the relevant statutory provisions and "improperly reduce[d] [his] accrued benefit under [his retirement plan]." Hackford and the URS filed cross-motions for summary judgment with the Board after first filing stipulated findings of fact. In Hackford's motion for summary judgment, he argued that the early age reduction was improper because he "worked for the [Division] continuously from 1991 to the present, with the exception of a 45-day period in mid-2011." The URS opposed Hackford's motion, stating that Hackford "fail[ed] to disclose in any way that the missing '45-day period' was the result of his retirement and that during this period he received a monthly defined benefit of retirement allowance as a qualified retiree under [the] Utah Code." And in its own motion for summary judgment, the URS argued that, pursuant to the Utah Code, Hackford's "2011 retirement allowance [had] vested" and that his "retirement, including the early age reduction[,] is irrevocable and cannot now be altered."

¶8 The Board heard arguments on the motions and ultimately determined that the URS correctly calculated Hackford's retirement benefits. It concluded that, pursuant to Utah Code section 49-11-1204, Hackford's "new total [retirement] allowance" was "the sum of two amounts":

1) the original allowance from his retirement in 2011 that was being paid at the time of cancellation [and reemployment], which would be resumed [upon his second retirement]; and 2) an additional allowance calculated based on the formula in effect at the date of the subsequent retirement for all service credit accrued between his retirement in 2011 and a subsequent retirement date.

See Utah Code Ann. § 49-11-1204(2), (5)(b) (LexisNexis Supp. 2018). The Board therefore granted summary judgment in favor of the URS.

¶9 Hackford seeks judicial review of the Board's decision, contending that it misinterpreted Utah Code section 49-11-1204 and thus erred by subjecting his retirement benefits to the "early age retirement reduction." The Board's application or interpretation of a statute is a question of law that we review for correctness. McLeod v. Retirement Board , 2011 UT App 190, ¶ 9, 257 P.3d 1090.

¶10 When interpreting statutes, "we look first to the statute's plain language to determine its meaning." Id. ¶ 12 (quotation simplified). "To determine the meaning of the plain language, we examine the statute in harmony with other statutes in the same chapter and related chapters." Id. (quotation simplified). And we will liberally construe the provisions of the Utah State Retirement and Insurance Benefit Act "to provide maximum benefits and protections consistent with sound fiduciary and actuarial principles." Id. (quotation simplified); see also Utah Code Ann. § 49-11-103(2) (LexisNexis Supp. 2018).

¶11 Hackford contends the Board improperly determined that Utah Code section 49-11-1204(5)(b) applied to him, arguing that subsection (5)(b) could apply to him only if subsections (4)(a), (4)(b), and (3)(a) applied to him. We disagree.

¶12 When a retiree becomes "reemploy[ed] with a participating employer ... within one year of the retiree's retirement date," the URS "shall cancel the retirement allowance of [that] retiree." Utah Code Ann. § 49-11-1204(2) (LexisNexis Supp. 2018). But when a retiree becomes reemployed more than one year after the retiree's retirement date, the retiree "may elect to" either "(a) cancel the retiree's retirement allowance and instead earn additional service credit" or "(b) continue to receive the retiree's retirement allowance, forfeit earning additional service credit, and forfeit any retirement-related contribution from the participating employer that reemployed the retiree." Id. § 49-11-1204(3).

¶13 If the "retiree's retirement allowance is cancelled," either under subsection (2) or subsection (3)(a), "and the retiree is eligible for retirement coverage in a reemployed position, the office shall reinstate the retiree to active member status on the first day of the month following the date of the employee's eligible reemployment." Id. § 49-11-1204(4)(a). And if that retiree retires "two or more years after the date of reinstatement to active membership, the [URS] shall":

(i) resume the allowance that was being paid at the time of cancellation; and
(ii) calculate an additional allowance for the retiree based on the formula in effect at the date of the subsequent retirement for all service credit accrued between the first and subsequent retirement dates.

Id. § 49-11-1204(5)(b); see also id. § 49-11-607(1) (2015) (providing that "[a]fter the retirement date, which shall be set by a member in the member's application for retirement, no alteration, addition, or cancellation of a benefit may be made except as provided" by law).

¶14 Hackford's argument that subsection (5)(b) cannot apply to him because subsection (3)(a) does not apply to him is irrelevant. To begin with, while satisfaction of subsection (4)(a) is a predicate to reaching subsection (5)(b), the same cannot be said about subsection (3)(a). First, subsection (5)(b) expressly states that subsection (4)(a) must have been satisfied, but neither subsection (4)(a) nor subsection (5)(b) expressly requires subsection (3)(a) to be satisfied. Satisfaction of either subsection (2) or subsection (3)(a) will suffice to trigger subsection (4)(a) because subsection (4)(a) requires that the retiree's retirement allowance is cancelled and the retiree, based on eligibility, is reinstated as an active member of the URS. See id. § 49-11-1204(2)-(4)(a). Second, subsection (2) and subsection (3) are mutually exclusive. A reemployed retiree cannot become reemployed both within one year of the retiree's original retirement date, see id. § 49-11-1204(2) (Supp. 2018), and also become reemployed more than one year after the original retirement, see id. § 49-11-1204(3).

¶15 Here, Hackford retired in May 2011 and received his retirement allowance for May and June 2011. In mid-June 2011, the Division reemployed him, and the URS reinstated him to active membership status in the retirement system and cancelled his retirement allowance effective July 1, 2011. See id. § 49-11-1204(2), (4)(a). Because Hackford became reemployed within one year of his retirement, subsection (2) applied and the URS followed the mandates of subsections (2) and (4)(a). Then, in 2014, Hackford requested estimates of his retirement benefits for "projected" retirement dates of January 1, 2015, and May 1, 2016. Hackford therefore projected to retire a second time "two or more years after the date of [his] reinstatement to active membership," triggering subsection (5)(b). Id. § 49-11-1204(5)(b). As a result, and as the statute requires, his retirement "allowance that was being paid at the time of cancellation"-in other words, his original retirement benefit-would resume on either of those projected dates and "an additional allowance ... for all service credit accrued between the first and subsequent retirement dates" would be calculated "based on the formula in effect at the date of the subsequent retirement." Id.

¶16 It appears Hackford argues in the alternative that only subsection (2) of Utah Code section 49-11-1204 applies to him and therefore his original retirement was cancelled altogether upon reemployment, allowing for a recalculation of his retirement in its entirety rather than as two separate periods of employment. We agree with the Board that if this was the legislature's intent in enacting this provision, the rest of the statute remains silent as to "what happens next to a retiree like Hackford whose benefit is involuntarily cancelled due to reemployment within one year of the retirement date." This would mean that the "benefit is cancelled, and no statutory provision exists to reinstate it." Because Hackford retired in 2011 and was reemployed, see Utah Code Ann. § 49-11-1202(4)(a) (LexisNexis Supp. 2018) (defining a "retiree"), he became subject to the reemployment rules and restrictions found in Utah Code sections 49-11-1201 through 49-11-1208.

¶17 Interpreting the statute as Hackford suggests would produce an absurd result. Instead, we interpret the statute to comply with the legislative intent that the Utah State Retirement and Insurance Benefit Act "be liberally construed to provide maximum benefits and protections consistent with sounds fiduciary and actuarial principles." McLeod v. Retirement Board , 2011 UT App 190, ¶ 12, 257 P.3d 1090 (quotation simplified); see also Utah Code Ann. § 49-11-103(2) (LexisNexis Supp. 2018) ("This [Act] shall be liberally construed to provide maximum benefits and protections consistent with sound fiduciary and actuarial principles.").

¶18 The Board therefore did not misinterpret or erroneously apply the statute. Because Hackford officially retired at age fifty with only twenty-five years of service credit, those retirement benefits will remain the same and subject to the early age reduction no matter when he chooses to retire a second time. See Utah Code Ann. § 49-11-1204(5)(b)(i) ; id. § 49-11-607(1). We therefore decline to disturb the Board's decision.

      At the time of the appeal before the Board the relevant statutory provisions of the Utah Code were re-codified, but no substantive changes were made. Compare Utah Code Ann. § 49-11-505 (LexisNexis 2015), with id. § 49-11-1204 (Supp. 2018). Both parties agree that the result of this dispute would be the same under either version of the Utah Code. We therefore refer to the most recent versions of the Utah Code.

      To the extent Hackford argues that the early age reduction will apply to his second retirement benefit calculation, we do not reach that argument. Because Hackford is still employed by the Division, the calculation of his second retirement allowance will be "based on the formula in effect at the date of the subsequent retirement for all service credit accrued between the first and subsequent retirement dates."See Utah Code Ann. § 49-11-1204(2), (5)(b) (LexisNexis Supp. 2018); see also id. § 49-13-402(2) (providing the formula for retirement allowances based on age and years of service at the time of retirement).