text:
    NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Appellee, v. Michael W. SMAISTRALA, Appellant.
    No. 20160401-CA
    Court of Appeals of Utah.
    Filed August 30, 2018
    Paul M. Belnap and Chet W. Neilson, Salt Lake City, Attorneys for Appellant
    Randall R. Smart and Jeffrey A. Callister, Murray, Attorneys for Appellee
    Judge David N. Mortensen authored this Opinion, in which Judges Michele M. Christiansen Forster and Ryan M. Harris concurred.
    Opinion
   MORTENSEN, Judge:

¶1 Michael W. Smaistrala found himself sucked into the vortex of Utah insurance subrogation law when his insurer, National Union Fire Insurance Company of Pittsburgh, PA (National Union), demanded that he return $127,000 that the company had paid out on his behalf. When the district court ruled as a matter of law that Smaistrala was indeed required to return the money because he had settled a lawsuit with a group of potential tortfeasors, Smaistrala filed an appeal in this court. Specifically, Smaistrala claims that the district court erred in concluding that he breached the insurance contract as a matter of law. Further, Smaistrala claims that the district court erred by ruling that National Union did not need to show the liability of the parties with whom Smaistrala had settled. We agree and reverse.

BACKGROUND

¶2 Smaistrala's injuries occurred while he was resting in the sleeper unit of his uncle's semi-truck. Uncle, who employed Smaistrala, was driving the truck at the time; Uncle lost control of the semi-truck on an icy overpass and rolled the vehicle. National Union, as Smaistrala's insurer, paid Smaistrala roughly $127,000 for medical services and disability benefits as a result of the accident.

¶3 Smaistrala sued Uncle, SRF LLC, KB Trucking, and Fleet Car Lease, alleging negligence by Uncle and negligent supervision and entrustment by SRF, KB, and Fleet Car. The case proceeded, and the parties made preparations for mediation. Counsel for Smaistrala informed National Union of the pending mediation and offered to "represent and protect [National Union's] interests regarding the subrogation." National Union declined that offer. At no time did National Union provide Smaistrala with any forms to complete, nor did National Union request that Smaistrala sign any subrogation forms.

¶4 The case subsequently settled. In the settlement agreement, the defendants agreed to pay Smaistrala $300,000. The settlement included a release of all claims Smaistrala may have had against the defendants and stated that the parties "acknowledge and agree that the settlement of the Lawsuit is the compromise of disputed claims and no terms of the Agreement are to be taken as any admission of liability or damages." After the settlement was finished, the court granted a stipulated order of dismissal of the action with prejudice.

¶5 National Union learned of the settlement and eventually filed this lawsuit against Smaistrala, alleging that he breached the insurance contract by failing to preserve National Union's right of subrogation against SRF and KB and by refusing to reimburse the $127,000 that National Union had paid to Smaistrala as a result of the accident. The subrogation provision in the insurance policy states,

To the total extent the Company pays for losses incurred, the Company may assume the rights and remedies of the Insured Person relating to such loss. The Insured Person agrees to assist the Company in preserving its rights against those responsible for such loss, including but not limited to, signing subrogation forms supplied by the Company.

Additionally, the "Conditional Claim Payment" (CCP) provision in the policy, which National Union believes requires Smaistrala to reimburse the $127,000, states as follows:

If an Insured Person suffers a Covered Loss(es) as the result of Injuries for which, in the opinion of the Company, a third party may be liable, the Company will pay the amount of benefits otherwise payable under this Policy. However, if the Insured Person receives payment from the third party, the Insured Person agrees to refund to the Company the lesser of: (1) the amount actually paid by the Company for such Covered Loss(es); or (2) an amount equal to the sum actually received from the third party for such Covered Loss(es). If the Insured Person does not receive payment from the third party for such Covered Loss(es), the Company reserves the right to subrogate under the Subrogation clause of this Policy.
At the time such third party liability is determined and satisfied, this amount shall be paid whether determined by settlement, judgment, arbitration or otherwise. This provision shall not apply where prohibited by law.

¶6 National Union eventually filed a motion for summary judgment, which the district court granted. First, the district court found that "[National Union's] action is a breach of contract and therefore [National Union] does not need to show liability of the underlying tortfeasors." In so concluding, the district court maintained that the Utah Supreme Court held "that if a person is not 'made whole' by a settlement, then that person's insurer has the burden to show that it could have successfully subrogated against the underlying tortfeasors to recover the settlement award." (Quoting Hill v. State Farm Mutual Auto Ins. Co. , 765 P.2d 864 (Utah 1988), overruled on other grounds by Sharon Steel Corp. v. Aetna Cas. & Surety Co. , 931 P.2d 127 (Utah 1997).) However, the court further elaborated that subrogation is an "equitable doctrine" and that " Hill specifically states that the subrogation doctrine 'can be modified by contract.' " (Quoting Hill , 765 P.2d at 866.) The court then cited the CCP provision, and concluded that this provision modified the made whole doctrine by addressing the insurer's subrogation rights and requiring that Smaistrala reimburse the funds. Finally, the court concluded that the existence of the insurance contract "render[ed] the equitable subrogation analysis of Hill inapplicable."

¶7 The district court concluded that "[National Union] performed under the contract by paying for covered losses [Smaistrala] suffered as a result of the accident. [Smaistrala] breached the contract by settling with [KB] and [SRF] and agreeing to dismiss his lawsuit against them with prejudice. This breach interfered with [National Union's] contractual subrogation right." Accordingly, the district court ordered Smaistrala to reimburse National Union for all payments it made as a result of the accident. Smaistrala appeals.

ISSUE AND STANDARD OF REVIEW

¶8 Smaistrala contends that the district court erred in granting National Union's motion for summary judgment. "An appellate court reviews a trial court's legal conclusions and ultimate grant or denial of summary judgment for correctness and views the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party." Orvis v. Johnson , 2008 UT 2, ¶ 6, 177 P.3d 600 (cleaned up).

ANALYSIS

I. The Subrogation Provision

¶9 The district court concluded that Smaistrala breached the contract by settling with SRF and KB and "agreeing to dismiss his lawsuit against them with prejudice," thereby "interfer[ing] with [National Union's] contractual subrogation right." Smaistrala argues that "the evidence in the record ... creates an issue of material fact," precluding summary judgment on this point. We agree.

¶10 Smaistrala contracted to "assist [National Union] in preserving its rights against those responsible" for his injuries. That assistance is defined in the subrogation provision as aiding the "Company in preserving its rights against those responsible for such loss, including but not limited to, signing subrogation forms supplied by the Company." Only where the subrogation right has not been preserved can a breach be found. Here, there are no possible subrogation rights against Uncle and Fleet Car, and it remains a disputed issue of fact whether SRF and KB have any fault at all. Under Utah law, in a tort action, a fact-finder is to "allocate the percentage or proportion of fault attributable" to the plaintiff and all defendants, whether the defendants are immune or not. Utah Code Ann. § 78B-5-818(4)(a) (LexisNexis 2012); see also Graves v. North E. Services, Inc. , 2015 UT 28, ¶ 47, 345 P.3d 619.

¶11 In this case, the determination of relative liability never occurred. Were it determined in a future proceeding that SRF and KB bore no fault, there would be no subrogation claim to preserve. For this reason alone, summary judgment should not have been granted. Further, even if SRF and KB were found to be minimally at fault, a disputed issue of fact precluding summary judgment would still exist as to the amount of the subrogation right that had not been preserved. National Union was thus not entitled to judgment as a matter of law, and the district court erred in granting summary judgment as to the full amount of the claim.

¶12 In addition, Smaistrala argues that he took action to assist National Union in preserving its subrogation rights. Specifically, Smaistrala argues that his attorney contacted National Union and offered to represent its subrogation right at the mediation, but National Union refused. Additionally, Smaistrala argues that he never received the forms indicated in the subrogation provision, so he never had an opportunity to assist National Union by signing anything. These facts, at least at this stage of the proceedings, show a dispute as to whether Smaistrala assisted National Union in preserving its rights against potentially liable parties. Because issues of material fact exist on the issue of breach, summary judgment was not appropriate.

II. The CCP Provision

¶13 National Union also claimed that Smaistrala breached the CCP provision. In relevant part, the CCP provision states:

[I]f the Insured Person receives payment from the third party, the Insured Person agrees to refund to the Company the lesser of: (1) the amount actually paid by the Company for such Covered Loss(es); or (2) an amount equal to the sum actually received from the third party for such Covered Loss(es).

However, this provision also specifies:

At the time such third party liability is determined and satisfied, this amount shall be paid whether determined by settlement, judgment, arbitration or otherwise.

¶14 The parties differ in their interpretations of this provision. Smaistrala plausibly argues that the provision is triggered only when "liability is determined," and points out that liability has never been determined in this case. On the other hand, National Union argues that the separate paragraphs of the provision apply to two distinct situations, and that the second paragraph should not be applied to the situation in this case. Assuming, without deciding, that National Union's reading of the provision is also plausible, it would mean that the provision is ambiguous. See S.W. Energy Corp. v. Continental Ins. Co. , 1999 UT 23, ¶ 14, 974 P.2d 1239 ("A policy may be ambiguous if it is unclear, omits terms, or is capable of two or more plausible meanings."). In that event, we liberally construe the policy in favor of Smaistrala and arrive at the same result-the district court should not have applied the CCP provision on summary judgment. See Farmers Ins. Exch. v. Versaw , 2004 UT 73, ¶ 24, 99 P.3d 796 ("Although we construe insurance contracts using the same interpretive tools we use to review contracts generally, we have frequently declared that because insurance policies are adhesion contracts, they are to be construed liberally in favor of the insured and their beneficiaries so as to promote and not defeat the purposes of insurance." (cleaned up) ).

¶15 In the present case, the settlement expressly stated that liability was not being determined. No party admitted fault as part of the settlement agreement, and the settlement agreement in no way apportioned fault between the various tortfeasors. The record reflects that there was no judgment entered nor any arbitration conducted. National Union was the insurer and the moving party in the summary judgment proceeding. Construing the provision against National Union, the provision requires that liability be determined before the payment obligation is triggered. The provision itself states that the amount shall be paid only when third party liability is otherwise "determined and satisfied." Therefore, summary judgment should not have been granted in National Union's favor based on this provision.

III. Additional Guidance

¶16 While we recognize that the analysis to this point resolves the issue presented on appeal, because the issues discussed in the district court's ruling are likely to arise again, we address additional issues that may be pertinent and helpful on remand. State v. Cloud , 722 P.2d 750, 755 (Utah 1986) ("When a new trial or further proceeding is ordered, it is our duty to pass upon questions of law which may be pertinent and helpful in arriving at a final determination of the case." (cleaned up) ).

¶17 In its ruling, the district court concluded that National Union's action is for "breach of contract and therefore [National Union] does not need to show liability of the underlying tortfeasors." The district court then explained that the CCP provision of the parties' insurance contract modified the made whole doctrine, as articulated in Hill v. State Farm Mutual Automobile Insurance Co. , 765 P.2d 864 (Utah 1988), overruled on other grounds by Sharon Steel Corp. v. Aetna Casualty & Surety Co. , 931 P.2d 127 (Utah 1997), which rendered the analysis in Hill "inapplicable" to this case. This analysis is incorrect.

¶18 The contractual obligation to show liability of the underlying tortfeasor does not necessarily have anything to do with the made whole doctrine. Assuming that the insurance contract modified the made whole doctrine, the particular modification in this case-at least when construed in favor of Smaistrala, as we have construed it here-would not relieve National Union of needing to prove liability of, and the proportion of liability amongst, the released parties. The district court's reading of Hill focuses needlessly on whether the made whole doctrine has been expressly modified, and ignores the Hill court's statement that an insurer can recover for breach of a contractual subrogation provision only "if [the insurer] shows it could have recovered" from the tortfeasor. See id. at 869.

¶19 In Hill , the Utah Supreme Court examined State Farm's subrogation rights, as an insurer, where an insured, Hill, settled with the underlying tortfeasor. Id. at 865. Because the record did not contain a "complete copy of the [parties'] insurance policy" and therefore the court was unaware of the "extent of the subrogation terms," the court analyzed subrogation under principles of equity. Id. at 867. The court held that State Farm's only avenues to recovery were to show either (a) "that plaintiffs were fully compensated and thus State Farm is entitled to be reimbursed from [the tortfeasor's] insurance policy proceeds," or (b) "that [Hill's] action in releasing [the tortfeasor] breached the insurance policy, and if State Farm shows it could have recovered from [the tortfeasor ], it will be entitled to the proceeds as a matter of equity." Id. at 869 (emphasis added). Thus, the questions of whether an insured was made whole and whether the insurer could have recovered from a tortfeasor are separate inquiries. Simply put, Hill does not establish the distinction upon which the district court's decision rested.

¶20 The district court here further erroneously concluded that "the equitable subrogation analysis of Hill [is] inapplicable" to this case because the parties' subrogation rights are governed by contract. The district court again misreads Hill and its progeny. It seemed to conclude that subrogation is a completely equitable doctrine and that because this case involved a contract, the "equitable" subrogation doctrine in Hill did not apply at all. Lost in such reasoning is the fact that Hill and every other Utah case addressing the made whole doctrine involved an insurance policy-a contract.

¶21 This analysis fails first because Hill in no way holds that an insurance contract generally displaces equitable subrogation. Hill instead holds that an insurance contract can modify equitable subrogation principles to the extent the contract does so expressly. Id. at 866. Second, the contract here not only fails to modify the requirement that liability of potential tortfeasors be shown, but the contract-as we have construed it-expressly embraces the concept. As referenced above, the contract's subrogation provision states that National Union "may assume the rights and remedies of the Insured Person relating to such loss." And in turn, Smaistrala agreed "to assist [National Union] in preserving its rights against those responsible for such loss[.]" (Emphasis added.) Further, the CCP provision provides that the obligation to reimburse National Union is triggered when "third party liability is determined." Taken together, these provisions delineate that National Union's subrogation rights are limited to the rights and remedies Smaistrala had and that Smaistrala's duties only extended to rights against "those responsible," or in other words, those liable. Therefore, to determine the amount of the subrogation claim and whether rights have been preserved, National Union must first establish the rights and remedies Smaistrala had against "those responsible"-the liability of the alleged tortfeasor or tortfeasors.

¶22 Finally, even if the distinction the district court misapprehended did exist, that difference alone fails to explain why a showing by National Union of liability against settling parties does not apply under principles of contract. One of the most basic tenets of contract law is that a party must prove damages to recover under a breach of contract claim. See America West Bank Members, L.C. v. State , 2014 UT 49, ¶ 15, 342 P.3d 224 ; Nuttall v. Berntson , 83 Utah 535, 30 P.2d 738, 741 (1934).

¶23 The record demonstrates that questions of fact remain on what level of liability SRF, KB, and the other entities released by the settlement had, if any. The liability of those entities is material to the question of damages. See Hill , 765 P.2d at 869 (explaining that "if [the insurance company] shows it could have recovered from [the tortfeasor], it will be entitled to the [insurance] proceeds"). That the potentially liable parties paid money to Smaistrala is of no consequence because the settlement expressly says that "no terms of the Agreement are to be taken as any admission of liability or damages." And, as stated, the settlement included other parties likely to be found more comparatively liable than SRF or KB, but for which subrogation is not allowed because those parties are insured under the same policy.

¶24 This is not a case where an insured has settled with the only potentially liable party. The need to prove liability is especially acute here because National Union is legally barred from seeking subrogation against some of the at-fault parties-indeed perhaps even the most at-fault party, Uncle-because they are a co-insured under the policy.

CONCLUSION

¶25 The district court erred by entering summary judgment in favor of National Union. Questions of fact remain that preclude summary judgment. Further, the district court should not have applied the CCP provision because liability had not yet been established. We therefore reverse the district court's grant of summary judgment in favor of National Union, and we remand this case for further proceedings consistent with this opinion.

      The four original defendants in this action were: (1) Uncle-driver of semi-truck; (2) SRF LLC-Uncle's limited liability company; (3) KB Trucking-entity that sold tractor unit to Uncle; and (4) Fleet Car Lease-entity that contracted with Uncle to pull a trailer for transporting vehicles for the purpose of training new drivers.

      "The doctrine of subrogation allows an insurer, having paid a loss resulting from a peril insured against, to step into the shoes of its insured and recoup its losses from a tort-feasor whose negligence caused the loss." Birch v. Fire Ins. Exch. , 2005 UT App 395, ¶ 7, 122 P.3d 696 (cleaned up).

      Uncle and Fleet Car were insured under the same policy as Smaistrala. Accordingly, the district court ruled that National Union had no right of subrogation against them. See Fashion Place Inv., Ltd. v. Salt Lake County , 776 P.2d 941, 944 (Utah Ct. App. 1989) ("[I]t is a well-established rule that an insurer cannot recover by means of subrogation against its own insured or a coinsured under the policy."). No party has appealed this determination.

      Indeed, the policy itself states: "This provision shall not apply where prohibited by law." And Utah law prohibits subrogation against co-insureds such as Uncle and Fleet Car. See Fashion Place , 776 P.2d at 944 ; see also supra note 3.

      Although not raised by the parties, we note the following case law. A settlement may not necessarily extinguish an insurer's ability to subrogate. See Sharon Steel Corp. v. Aetna Cas. & Surety Co. , 931 P.2d 127, 138 (Utah 1997) ("In third-party insurance contexts, this court has held that where the insured settles with a tortfeasor, and the tortfeasor and/or its insurer was on notice of the other insurer's subrogation right, then the settlement and release will not affect the insurer's right of subrogation."); Educators Mutual Ins. Ass'n v. Allied Prop. & Cas. Ins. Co. , 890 P.2d 1029, 1031 (Utah 1995) ("[A] settlement between an injured party and a tort-feasor who has knowledge of the subrogation rights of the injured party's insurer does not destroy the subrogation claim of the injured party's insurer.").

      Ordinarily, where a contract's language is ambiguous we look to extrinsic evidence before applying the rule to construe the relevant language against the drafter. Hillcrest Inv. v. Sandy City , 2010 UT App 201, ¶ 19, 238 P.3d 1067. While there may exist insurance contracts that are negotiated in arm's length transactions, typically insurance contracts are true adhesion contracts, offered only on a take-it-or-leave-it basis. There is no evidence in the record that the insurance contract here is anything other than an adhesion contract.

      Under the made whole doctrine, an insured must be made whole (i.e., fully compensated) before an insurer is entitled to be reimbursed from a recovery obtained from a third-party tortfeasor or the tortfeasor's insurer. Hill v. State Farm Mutual Auto. Ins. Co. , 765 P.2d 864, 866 (Utah 1988), overruled on other grounds by Sharon Steel Corp. v. Aetna Cas. & Surety Co. , 931 P.2d 127 (Utah 1997). The doctrine applies in the absence of express contractual terms to the contrary. Id. In this case, the district court ruled that the contractual terms quoted constituted an express repudiation of the made whole doctrine, and Smaistrala does not actually challenge this determination on appeal. And we express no opinion whether the quoted contract language meets this standard. Cf . Kramer v. State Ret. Board , 2008 UT App 351, ¶ 30, 195 P.3d 925 (examining an insurance policy that stated the insurer "shall be and is hereby subrogated ... regardless of whether the Insured has been made whole") (cleaned up).

      The issue of whether Smaistrala's damages actually exceeded the combined settlement proceeds and the $127,000 National Union had already paid out-in other words, whether Smaistrala has been made whole-was not addressed by the parties below and does not appear to have been a focus of the proceedings before the district court, nor is it mentioned in the briefs on appeal. Thus, the discussion of the made whole doctrine before the district court and on appeal is a red herring.

      The following are some examples of cases addressing the made whole doctrine that involved an insurance policy: Wilson v. Educators Mutual Ins. Ass'n , 2017 UT 69, ¶ 19, 416 P.3d 355 ; Anderson v. United Parcel Service , 2004 UT 57, ¶ 10, 96 P.3d 903 ; State Farm Mutual Auto. Ins. Co. v. Green , 2003 UT 48, ¶ 35, 89 P.3d 97 ; Transamerica Ins. Co. v. Barnes , 29 Utah 2d 101, 505 P.2d 783, 785-86 (1972) ; Kramer v. State Ret. Board , 2008 UT App 351, ¶ 30, 195 P.3d 925 ; Birch v. Fire Ins. Exch. , 2005 UT App 395, ¶ 9, 122 P.3d 696.


source: Caselaw Access Project

author: CHRISTIANSEN FORSTER, Judge:

license: Public Domain

text:
    STATE of Utah, Appellee, v. Stepan BADIKYAN, Appellant.
    No. 20151098-CA
    Court of Appeals of Utah.
    Filed August 30, 2018
    Scott L. Wiggins, Salt Lake City, Attorney for Appellant
    Sean D. Reyes and Jeanne B. Inouye, Salt Lake City, Attorneys for Appellee
    Judge Michele M. Christiansen Forster authored this Opinion, in which Judges Jill M. Pohlman and Ryan M. Harris concurred.
    Opinion
   CHRISTIANSEN FORSTER, Judge:

¶1 Defendant Stepan Badikyan appeals the district court's denial of his motion to withdraw his guilty plea. We affirm.

BACKGROUND

¶2 At their home in late May 2014, Defendant used a box cutter to stab his wife (Victim) in the arm. He then agreed to transport Victim to the hospital.

¶3 On the way, however, he changed course and told Victim that they were "both going to die" that day. When the vehicle stopped at an intersection, Victim fled from the car. Defendant chased Victim and tackled her to the ground. He proceeded to stab her in the side and cut her neck with the box cutter. Several citizens intervened to stop Defendant, holding him down until police took him into custody.

¶4 Following this incident, the State charged Defendant with attempted murder, tampering with evidence, and aggravated assault. Defendant initially entered not guilty pleas to all charges, but he eventually reached a resolution with the State pursuant to which Defendant agreed to plead guilty to attempted murder. In exchange for his plea, the State agreed to dismiss the remaining charges and agreed not to oppose a request that the sentencing court grant Defendant credit for the jail time he had already served.

¶5 An interpreter was present at the change-of-plea hearing and provided translation for Defendant. Defendant's counsel advised the court that Defendant "speaks very little English, and does not read English." In anticipation of Defendant's guilty plea, counsel for Defendant (Plea Counsel) prepared a "statement of defendant in support of guilty plea" (the Plea Agreement), which contained information about the plea deal and the agreed-upon facts. The Plea Agreement was written in English and stated that "Defendant on or about May 29, 2014[,] in Davis County[,] Utah, did attempt to intentionally and knowingly cause the death of another. Furthermore[,] the defendant was a co-habitant of the victim." Plea Counsel asserted in open court that the interpreter "translated [the Plea Agreement] verbatim word-for-word" and stated that he had "every confidence in the interpreter." Plea Counsel also expressed confidence that Defendant understood the Plea Agreement.

¶6 The district court engaged in a colloquy with Defendant, who confirmed through an interpreter that he understood and agreed with the factual basis for the guilty plea. Defendant also acknowledged his waiver of important constitutional rights, that he was pleading guilty freely and voluntarily, and that he understood the charge and possible sentence. Plea Counsel then noted for the record that he had informed Defendant he was subject to an immigration hold, and counsel described for the court the inquiry he made to an immigration attorney regarding the charges in this case. At the conclusion of the change-of-plea hearing, the district court accepted Defendant's guilty plea, scheduled a sentencing hearing, and ordered the preparation of a pre-sentence investigation report.

¶7 Shortly after the change-of-plea hearing, Defendant sent a letter to the district court, pro se, requesting to "retract" his plea. The court forwarded the letter to the State and Plea Counsel, and the State filed a motion to strike the letter. At a subsequent hearing, the parties discussed Defendant's letter, and the court granted the motion to strike "to the extent [the letter] purports to be a motion for retraction of plea." The State requested that the district court appoint conflict counsel to represent Defendant, which the court granted. Through his new counsel (Conflict Counsel), Defendant formally requested permission to withdraw his guilty plea, asserting that it was not "knowing and voluntary." Defendant argued that he would not have entered the plea if he had understood the true nature of the plea, if he had had proper interpretation at the change-of-plea hearing, and if he had not been coerced into pleading guilty by Plea Counsel.

¶8 The court held an evidentiary hearing to address Defendant's motion to withdraw his guilty plea, and at that hearing the court provided Defendant a different interpreter than the one present at the earlier change-of-plea hearing. Defendant testified that he had concerns regarding the translations given by the change-of-plea hearing interpreter. He stated that the interpreter had read the Plea Agreement, but that Defendant "couldn't understand everything." He later testified that the interpreter explained the meanings of words to him, "but there were times that [the interpreter] wouldn't get the time or opportunity to do it, maybe there were words that [the interpreter] wouldn't understand or he wouldn't say." When asked whether he was pressured by Plea Counsel to plead guilty, Defendant responded, "[N]ot really ... pressure but like convincing me nicely." Defendant did not bring his alleged lack of understanding to the attention of Plea Counsel, the interpreter, or the court at the time.

¶9 Conflict Counsel asked whether Defendant would have entered the plea had he understood the immigration consequences, to which Defendant responded, "No, that's not the only reason. The other reason for withdrawal of guilty plea is the ... charge three to life, which is for murder, and I'm not a murderer." Defendant acknowledged signing the Plea Agreement and confirmed for the court that he understood its terms. The interpreter who assisted at the change-of-plea hearing testified to his understanding of the court proceedings and the words used in the Plea Agreement, and that he had read and translated the Plea Agreement to Defendant word-for-word.

¶10 Plea Counsel testified that he visited Defendant in jail without an interpreter to address medical care and housing issues, but he retained an interpreter when addressing issues related to Defendant's case-the evidence, the plea, and the immigration consequences of a guilty plea. Plea Counsel also explained that, in the course of their discussions, Defendant informed him of his mental health issues including depression and anxiety. Plea Counsel had explored these mental health issues with Defendant. Although explaining that he was not an immigration attorney, Plea Counsel also relayed to Defendant advice from an immigration attorney that pleading to any of the three charges may lead to deportation.

¶11 In addition to testimonial evidence taken at the hearing, the court listened to and considered the recording from the change-of-plea hearing, including the plea colloquy itself. And, after considering the evidence, the district court ruled that Defendant had failed to carry his burden of establishing that his guilty plea was not knowingly and voluntarily entered. This decision rested on four conclusions. First, the court determined that Plea Counsel provided "clear communication and advice" regarding immigration consequences. Second, Plea Counsel did not "oversell [the] proposed plea bargain," and did not "try to overcome the free will and the voluntariness of the decision to accept the plea bargain by [Defendant]." Third, with respect to the mental health impairment argument, the lawyers and interpreters involved with the case "never suggested to the Court any lack of understanding [of the] proceedings or ... ability to comprehend those proceedings or to interact appropriately with Counsel." And finally, despite Defendant's claims of inaccurate translations, "there were no specific instances given of particular inaccuracies of translation that influenced [Defendant's] decision" to plead guilty.

¶12 Subsequently, the district court issued its written findings and order denying the motion to withdraw the guilty plea and sentenced Defendant four days later. Defendant appeals.

ISSUES AND STANDARDS OF REVIEW

¶13 Defendant argues that the district court erroneously denied his motion to withdraw his guilty plea. We generally review the district court's resolution of a motion to withdraw a guilty plea for abuse of discretion, and review the district court's related findings of fact under the clearly erroneous standard. State v. Beckstead , 2006 UT 42, ¶ 7, 140 P.3d 1288. We "will not typically reach [an unpreserved issue] absent a valid exception to preservation." State v. Johnson , 2017 UT 76, ¶ 15, 416 P.3d 443. As we explain in section I, however, the plea withdrawal statute, Utah Code section 77-13-6 (the Plea Withdrawal Statute), forecloses our review of Defendant's unpreserved challenges to his guilty plea.

¶14 Defendant next argues for the first time on appeal that, in considering his motion to withdraw his plea, the district court improperly limited its review to the record of the change-of-plea hearing, violating his due process rights. "Constitutional issues, including questions regarding due process, are questions of law that we review for correctness." Salt Lake City Corp. v. Jordan River Restoration Network , 2012 UT 84, ¶ 47, 299 P.3d 990 (quotation simplified). "However, because these questions require the application of facts in the record to the due process standard, we incorporate a clearly erroneous standard for the necessary subsidiary factual determinations." Id. (quotation simplified).

¶15 Defendant next maintains that he was deprived of the right to effective assistance of counsel by Conflict Counsel's failure to assert the proper standard applicable to withdrawal of a guilty plea. Specifically, Defendant asserts that Conflict Counsel "allowed the district court to unduly restrict its review of Defendant's [motion to withdraw the guilty plea] ... thereby preclud[ing] consideration of matters outside the record of the [change-of-plea] hearing." "When a claim of ineffective assistance of counsel is raised for the first time on appeal, there is no lower court ruling to review and we must decide whether the defendant was deprived of the effective assistance of counsel as a matter of law." State v. Gardner , 2018 UT App 126, ¶ 13, 428 P.3d 58 (quotation simplified).

ANALYSIS

I. Defendant's Unpreserved Challenge to his Guilty Plea

¶16 As an initial matter, we first must address an argument the State raised in responding to this appeal. The State contends that, under the facts of this case, this court lacks jurisdiction to address Defendant's challenges to his guilty plea pursuant to the Plea Withdrawal Statute. The State asserts that, although Defendant filed a timely motion to withdraw his guilty plea, he failed to assert the particular challenge he now asserts on appeal. Specifically, the State argues that this court does not have jurisdiction to consider Defendant's unpreserved legal theory that he did not understand the elements of attempted murder, which argument should have been asserted below in connection with his motion to withdraw his guilty plea. Whether appellate jurisdiction exists is a question of law. See State v. Allgier , 2017 UT 84, ¶ 13, 416 P.3d 546.

¶17 Defendant asserted below, among other things, that his guilty plea was not knowingly and voluntarily made because "in discussions of the plea agreement with [Plea Counsel,] ... [Defendant] did not fully understand the plea." See supra ¶7. Defendant explained that "he made the decision to plea[d guilty] without having a clear understanding of the facts. That lack of understanding was from the [interpreter's] misinterpreted statements as well as a lack of knowledge of the case." In contrast, Defendant's legal theory on appeal is that he did not understand the critical elements of attempted murder-the offense to which he was pleading guilty. See Henderson v. Morgan , 426 U.S. 637, 645 n.13, 96 S.Ct. 2253, 49 L.Ed.2d 108 (1976) (explaining that "[a] plea may be involuntary ... [if the accused] has such an incomplete understanding of the charge that his plea cannot stand as an intelligent admission of guilt"(citation omitted) ).

¶18 Generally, "[w]hen a party fails to raise and argue an issue in the district court, it has failed to preserve the issue, and an appellate court will not typically reach that issue absent a valid exception to preservation." State v. Johnson , 2017 UT 76, ¶ 15, 416 P.3d 443. Defendant concedes that he did not present his critical elements theory to the district court, but nevertheless seeks our review under the plain error exception to the preservation rule. We conclude that the Plea Withdrawal Statute forecloses our review of this unpreserved theory, even under the plain error exception to preservation.

¶19 The Plea Withdrawal Statute sets forth the requirements with which a defendant must comply in order to withdraw a guilty plea. To properly request withdrawal of a guilty plea, a defendant must (1) demonstrate that the plea was not knowingly and voluntarily made, and (2) move to withdraw the plea prior to sentencing. Utah Code Ann. § 77-13-6(2)(a)-(b) (LexisNexis 2017); see also Allgier , 2017 UT 84, ¶ 25, 416 P.3d 546. The Utah Supreme Court recently explained that these two requirements "function as rules of preservation." Allgier , 2017 UT 84, ¶ 25, 416 P.3d 546 ; State v. Rettig , 2017 UT 83, ¶ 13, 416 P.3d 520 ; see also Gailey v. State , 2016 UT 35, ¶ 35, 379 P.3d 1278 (Lee, J., concurring) (explaining that rules of preservation require a party to "raise issues or arguments at specified times and by certain means"). A defendant who fails to meet the statutory requirements will be deemed to have waived the issue on appeal, and must instead pursue claims under the Post-Conviction Remedies Act (PCRA). See Rettig , 2017 UT 83, ¶¶ 3, 17, 34, 47, 416 P.3d 520 ; Utah Code Ann. § 77-13-6(2)(c) (providing that "[a]ny challenge to a guilty plea not made [before the sentence is announced] shall be pursued under" the PCRA).

¶20 In Allgier , the defendant entered guilty and no contest pleas to various criminal charges, 2017 UT 84, ¶ 8, 416 P.3d 546, and moved to withdraw those pleas after sentencing, id. ¶¶ 10-11. The supreme court determined that the defendant "forfeited his right to direct appeal" by failing to file a timely motion to withdraw the guilty plea. Id. ¶ 28. In so concluding, the court explained that the Plea Withdrawal Statute "functions as a rule of preservation," but "does not allow defendants to work around the jurisdictional bar through the exceptions to preservation-plain error, exceptional circumstances, or ineffective assistance of counsel." Id. ¶ 26. Consequently, the Plea Withdrawal Statute is " 'jurisdictional' in the sense of foreclosing" the common-law exceptions to preservation in plea-withdrawal appeals. Rettig , 2017 UT 83, ¶ 26, 416 P.3d 520.

¶21 Unlike in Allgier and Rettig , Defendant timely moved to withdraw his guilty plea before the district court imposed a sentence. See Utah Code Ann. § 77-13-6(2)(b). Further, the parties do not dispute that, by his motion, Defendant asserted that his guilty plea was not knowingly and voluntarily made. See id. § 77-13-6(2)(a). Generally speaking, because Defendant complied with the timing requirements of the Plea Withdrawal Statute, we are not without jurisdiction to consider the district court's denial of Defendant's motion to withdraw his guilty plea. Defendant's argument on appeal, however, does not challenge the district court's factual findings and legal conclusions. Instead, he asserts an entirely different ground for why he should have been allowed to withdraw his guilty plea, i.e., that he did not understand the critical elements of the attempted murder charge. The Plea Withdrawal Statute forecloses our review of these questions, however, even under the plain error exception to preservation.

¶22 Although the Rettig and Allgier cases are factually distinct from this case, the supreme court's interpretation of the Plea Withdrawal Statute in those cases is instructive. "The standard set forth in the Plea Withdrawal Statute is both a rule of preservation and a jurisdictional bar on appellate consideration of matters not properly preserved." Rettig , 2017 UT 83, ¶ 27, 416 P.3d 520. Because Defendant failed to properly preserve his legal theory in the district court-that he did not understand the critical elements of the attempted murder charge-we cannot now consider this particular challenge on appeal. See id. ¶ 42. The effect of the Plea Withdrawal Statute in this situation is therefore "jurisdictional in the narrow sense of regulating the scope of [our] authority to address" the question presented to us. Id. ¶ 38 (quotation simplified).

II. Defendant's Challenges to the Evidentiary Hearing

¶23 In addition, Defendant argues that the district court improperly limited its review during the evidentiary hearing on his motion to withdraw his guilty plea. Particularly, he asserts that the court limited its review to only the record of the change-of-plea hearing, which violated his right to due process. Relatedly, Defendant argues that he received constitutionally ineffective assistance of counsel because Conflict Counsel "allowed the district court to unduly restrict its review[,] ... preclud[ing] consideration of matters outside the record of the plea review hearing." Defendant failed to preserve these issues below and asks us to review them under the common-law exceptions to preservation.

¶24 In the interest of clarity, we note briefly that these alleged procedural infirmities are not subject to the same preservation and waiver requirement we described in section I. See supra ¶¶16-22; see also State v. Rettig , 2017 UT 83, ¶ 34, 416 P.3d 520. These claims are challenges to the proceedings afforded Defendant at the subsequent evidentiary hearing, and are therefore not "challenge[s] to a guilty plea" itself. See Utah Code Ann. § 77-13-6(2)(c) (LexisNexis 2017). Accordingly, we do not review these claims under or through the framework of the Plea Withdrawal Statute. Rather, alleged procedural infirmities in the plea withdrawal proceeding are matters that draw our attention to the fairness of the subsequent evidentiary hearing and to the actions or inactions of defense counsel at that hearing (rather than at the change of plea hearing). Success on these claims would result in Defendant receiving a new evidentiary hearing, and would not necessarily result in Defendant being allowed to withdraw his guilty plea. We accordingly consider these arguments as we would unpreserved procedural due process and ineffective assistance of counsel claims, subject to the common-law exceptions of plain error, ineffective assistance of counsel, and exceptional circumstances. See State v. Johnson , 2017 UT 76, ¶ 19, 416 P.3d 443.

¶25 As to Defendant's contention that the district court limited its review, this assertion is simply incorrect. The district court held an evidentiary hearing, during which it heard testimony from Defendant, Plea Counsel, and the original interpreter. The district court also listened to, and took into account, the audio record of the change-of-plea hearing, including the plea colloquy.

¶26 Defendant, contending that the district court limited its review to only the record of the plea colloquy, directs us to three lines in the 112-page transcript of the evidentiary hearing. At this point in the transcript, the district court, announcing its ruling, explained that it found no deficiencies in the district court's colloquy during the change-of-plea hearing that could support withdrawal of the plea. As noted, however, the court's brief summary regarding the colloquy follows extensive preliminary findings based upon testimony from three witnesses taken during that evidentiary hearing. Defendant has not pointed to, and we cannot discern, any limitation in the district court's review of Defendant's motion to withdraw his guilty plea.

¶27 There is no question that the district court based its findings and conclusions about the propriety of Defendant's plea on more than just the record of the change-of-plea hearing. We see no merit in this argument and, accordingly, no error in the district court's review.

¶28 Defendant also asserts a related contention that he was deprived of the right to effective assistance of counsel at the plea withdrawal evidentiary hearing. He argues that Conflict Counsel performed deficiently by failing to assert the proper standard for the court's review of a motion to withdraw a guilty plea. Specifically, he contends that counsel "allowed the district court to unduly restrict its review[,] ... preclud[ing] consideration of matters outside the record of the plea review hearing." Because we have already concluded that the district court did no such thing, any claim that counsel performed deficiently by failing to advise the court or object to the scope of the court's inquiry is without merit.

CONCLUSION

¶29 We affirm the district court's denial of Defendant's motion to withdraw his guilty plea. Defendant did not argue below that he did not understand the critical elements of the attempted murder charge, and the Plea Withdrawal Statute precludes our review of that claim. Defendant has not established that the court erred in reviewing his motion to withdraw his guilty plea or that he received ineffective assistance of counsel at his plea withdrawal evidentiary hearing.

      Because there was no preliminary hearing or trial in this case, we recite the facts related to the underlying criminal activity as alleged in the charging information and contained in Defendant's plea agreement submitted to the court at the change-of-plea hearing.

      Conflict Counsel clarified in argument before the district court that Defendant "did not express that mental illness played a part in" the lack of a knowing and voluntary guilty plea. The district court accordingly limited its consideration of this evidence to determining whether, at the time he entered the guilty plea, Defendant was operating under some mental health-related impairment.

      In his reply brief, Defendant asserts without further discussion that the "the challenges set forth in Defendant's timely [motion to withdraw guilty plea] are essentially one and the same as those argued on appeal." This statement lacks legal and factual analysis and is therefore insufficient to carry his burden on appeal. See Utah R. App. P. 24(a)(8).

      The PCRA is codified at Utah Code section 78B-9-101 to -405, and PCRA petitions are governed by rule 65C of the Utah Rules of Civil Procedure.

      As in Allgier , the Rettig court concluded that it "lack[ed] appellate jurisdiction to address [Rettig's arguments on appeal] given that Rettig failed to preserve his claims by not withdrawing his guilty plea until after sentencing." State v. Rettig , 2017 UT 83, ¶ 11, 416 P.3d 520.


author: MORTENSEN, Judge:

text:
    Kathleen O. POTTS, Appellee, v. Duane E. POTTS, Appellant.
    No. 20170606-CA
    Court of Appeals of Utah.
    Filed August 30, 2018
    David Pedrazas, Salt Lake City, Attorney for Appellant
    Emilie A. Bean, Layton, Attorney for Appellee
    Judge David N. Mortensen authored this Opinion, in which Judges Kate A. Toomey and Diana Hagen concurred.
    Opinion
   MORTENSEN, Judge:

¶1 This case involves not the benefit of the doubt, but some doubt as to the benefit. After separating in 1992, the court entered a decree of divorce based in part on Duane and Kathleen's stipulation. The decree awarded a portion of each party's retirement benefits to the other party. The decree directed the parties to cooperate in obtaining qualified domestic relations orders (QDRO) to effectuate the property distribution of the retirement accounts. Kathleen filed the QDRO related to her retirement account in 1995, but Duane waited until 2000 to file his corresponding QDRO. As it turned out, just before Duane filed, the Utah Retirement Systems' rules regarding retirement benefits changed, providing Duane with the advantage of new distribution rules. In 2015, Kathleen filed a motion to amend her 1995 QDRO to reflect the updated rules. Duane objected, but the district court granted the motion. Duane then filed a motion to reconsider, which the court also denied. Duane appeals those rulings. We affirm.

BACKGROUND

¶2 When the parties divorced in November 1992, they both were employees of the State of Utah. Pursuant to the decree of divorce, each party was awarded a Woodward share of the other's retirement benefits: 50% of the retirement benefits that accrued during their marriage. See Woodward v. Woodward , 656 P.2d 431, 433 (Utah 1982) (holding that pension benefits accrued during the marriage are marital property subject to equitable distribution). The decree directed the parties to cooperate in obtaining QDROs to effectuate the property distribution of the retirement accounts.

¶3 In March 1995, Kathleen filed her proposed qualified domestic relations order (1995 QDRO) for the court's signature and then submitted the signed order to Utah Retirement Systems (URS). The 1995 QDRO ordered URS to divide Kathleen's share of Duane's retirement based upon the rules in existence at that time. Those rules left Kathleen's share of Duane's retirement in Duane's shared-interest account. The 1995 QDRO also provided,

The [district court] retains jurisdiction to amend this Order so that it will constitute a domestic relations order under the plan even though all other matters incidental to this action or proceeding have been fully and finally adjudicated. If URS determines at any time that changes in the law, the administration of the plan, or any other circumstances make it impossible to calculate the portion of a distribution awarded to alternate payee by this Order and so notifies the parties, either or both parties shall immediately petition the Court for reformation of the Order.

¶4 Sometime in 2000, a URS rule revision occurred which, according to Kathleen, "changed the manner of distribution to more fully reflect Utah law on division of retirement property to what is common[ly] referred to as a separate interest." Under these rules, Duane's account would no longer be a shared-interest account, but instead would be divided into two separate accounts proportional to Kathleen's marital interest. Alteration of the 1995 QDRO would ultimately change the potential payout to the parties, depending upon who predeceases whom. If Kathleen were to predecease Duane under these rules, Kathleen's payout would no longer revert to Duane, essentially divesting him of that benefit.

¶5 In September 2000, Duane filed his own qualified domestic relations order (2000 QDRO). Because he filed after the rule change, Duane received the benefit of the new, separate account distribution rules. Duane's 2000 QDRO had no effect on Kathleen's 1995 QDRO, which was still subject to the old rules. In December 2015, Kathleen filed a Motion for an Amended Qualified Domestic Relations Order (Motion to Amend) requesting alteration of the 1995 QDRO "on the ground that the rules for Utah Retirement Systems [had] changed since the entry of the [1995 QDRO]."

¶6 After lengthy objections from Duane, the district court conducted a telephone conference in September 2016 and thereafter granted Kathleen's Motion to Amend, stating, "It seems like the orders were meant to divide each of the [parties'] retirements in the same way." The court held that Kathleen should "be granted the same benefits on the method of division as Duane." That same day, Duane filed a motion to reconsider, but the district court denied the motion. Duane appeals.

ISSUES AND STANDARDS OF REVIEW

¶7 Duane appeals on three bases. First, he argues that the district court lacked jurisdiction to amend the 1995 QDRO. "Whether the district court has jurisdiction is a question of law that we review for correctness, giving no deference to the lower court." State v. Norris , 2007 UT 6, ¶ 10, 152 P.3d 293.

¶8 Second, Duane contends that even if the district court had jurisdiction to amend the 1995 QDRO, Utah Code section 68-3-3, which governs the effect of retroactive code provisions, prevents the court from doing so. See Utah Code Ann. § 68-3-3 (LexisNexis 2016). "The [district] court's interpretation of a statute is a question of law that we review for correctness." Cox v. Cox , 2012 UT App 225, ¶ 10, 285 P.3d 791.

¶9 Third, Duane asserts that it was inequitable for the district court to allow amendment of the 1995 QDRO. A district court's equitable orders are reviewed for abuse of discretion and should be "accorded substantial deference," with the court being given "considerable latitude." Kidd v. Kidd , 2014 UT App 26, ¶ 15, 321 P.3d 200 (cleaned up).

ANALYSIS

I. Jurisdiction

¶10 Duane contends that the district court "did not have the jurisdiction and/or the ability to amend" the 1995 QDRO because Kathleen failed to file a petition to modify, which, he alleges, is a requirement to retain jurisdiction. Duane's argument fails for three reasons.

¶11 First, Kathleen did not seek modification of the decree and therefore was not required to file a petition to modify, which must be based on a change in circumstance. See Durfee v. Durfee , 796 P.2d 713, 716 (Utah Ct. App. 1990). While Duane is correct in asserting that succeeding on a petition to modify a divorce decree typically depends upon the moving party showing that a substantial material change of circumstances has occurred since the entry of the decree, Fish v. Fish , 2016 UT App 125, ¶ 17, 379 P.3d 882, that proposition has no bearing on this case. Here, Kathleen seeks not to modify the decree, but only to alter the 1995 QDRO-an order collateral to the decree. In reality, Kathleen's motion sought to enforce the identical treatment of the parties' retirement accounts as expressly provided for in the decree. Therefore, Duane's contention that the district court lacked jurisdiction due to Kathleen's failure to file a petition to modify is incorrect.

¶12 Second, jurisdiction regarding QDROs has been granted to district courts by statute. Utah Code section 30-3-5(3) governs the disposition of, among other things, property interests such as retirement accounts. The provision states,

The [district] court has continuing jurisdiction to make subsequent changes or new orders for the custody of the children and their support, maintenance, health, and dental care, and for distribution of the property and obligations for debts as is reasonable and necessary.

Utah Code Ann. § 30-3-5(3) (LexisNexis Supp. 2017). Pursuant to the statute, the award of retirement funds-a property distribution made by the court, see Woodward v. Woodward , 656 P.2d 431, 433 (Utah 1982) -is properly subject to the court's continuing jurisdiction, so long as the "subsequent changes or new orders" are "reasonable and necessary," Utah Code Ann. § 30-3-5(3) ; see also A.S. v. R.S. , 2017 UT 77, ¶¶ 2, 4, 416 P.3d 465 (maintaining that "the district court ha[s] continuing jurisdiction over ... divorce proceedings" and "is able to make changes ... to ensure the appropriate needs of the ... parties are met"); Johnson v. Johnson , 2014 UT 21, ¶ 31, 330 P.3d 704 (stating that "[d]istrict courts are charged with making an equitable distribution of marital property, including pension benefits"); Murphy v. Moyle , 17 Utah 113, 53 P. 1010, 1012 (1898) ("The court ha[s] the right to enforce the former decrees ...."); Osborne v. Osborne , 2011 UT App 150, ¶ 4, 260 P.3d 202 (holding that a district court's enforcement of a decree of divorce, by way of entering a QDRO, was correct); Bayles v. Bayles , 1999 UT App 128, ¶ 14, 981 P.2d 403 (explaining that "a court has continuing jurisdiction over its decree in a divorce proceeding for the division of property" (cleaned up) ). Therefore, having determined that it was reasonable and necessary to effectuate the terms of the decree, the court had jurisdiction to amend the 1995 QDRO.

¶13 Third, Duane fails to recognize that divorce courts are well established as courts of equity, see Dority v. Dority , 645 P.2d 56, 58 (Utah 1982), that retain jurisdiction over the parties and subject matter for the purposes equity may demand, see Salt Lake City v. Ohms , 881 P.2d 844, 849 (Utah 1994) ("Core judicial powers include the authority to hear and determine justiciable controversies as well as the authority to enforce any valid judgment, decree or order." (cleaned up) ); Consolidated Wagon & Machine Co. v. Kay , 81 Utah 595, 21 P.2d 836, 840 (1933) (stating that "when a court of equity has jurisdiction over a cause for any purpose, it may retain the cause for all purposes, and proceed to a final determination of all the matters at issue."). The court in this instance was exercising its equitable jurisdiction.

¶14 Utah courts have long held that district courts retain jurisdiction to remedy scenarios exactly like the one presented in this case. See Ohms , 881 P.2d at 849 ; see also Osborne , 2011 UT App 150, ¶ 4, 260 P.3d 202. Here, Kathleen sought the equitable powers of the district court to allow application of the rule change to both parties, and the court properly retained jurisdiction over the parties and subject matter for the purpose of effectuating a fair and equitable division of retirement. To hold otherwise would allow unequal treatment of the parties, which is inconsistent with the decree's award of 50% of each party's retirement benefits to the other party.

¶15 For these reasons, Duane's contention that the district court lacked jurisdiction to amend the 1995 QDRO fails.

II. Retroactive Rule Changes

¶16 Duane next contends that amending the 1995 QDRO amounts to a retroactive application of law, in violation of Utah Code section 68-3-3, which states, "A provision of the Utah Code is not retroactive, unless the provision is expressly declared to be retroactive." Utah Code Ann. § 68-3-3 (LexisNexis 2016). However, amendment of the 1995 QDRO has no effect on the application of the law, let alone a retroactive application.

¶17 District courts have the power to enforce a decree of divorce by entering collateral orders-including orders effectuating the allocation of retirement benefits. See Osborne v. Osborne , 2011 UT App 150, ¶ 4, 260 P.3d 202 (determining that the district court's order granting the distribution of retirement funds "merely enforced the [decree of divorce] under Utah Law," and that "[t]he district court therefore correctly enforced the [decree of divorce] by entering the ... [o]rder"). In Osborne , a respondent challenged the court's order awarding his former spouse a portion of his retirement, pursuant to a QDRO. Id. ¶ 1. There, the court held that the QDRO at issue "merely effectuated the allocation of ... benefits to [ex-wife] by instructing the Railroad Retirement Board to disburse the funds as the [decree of divorce] allocated them." Id. ¶ 4.

¶18 Similarly, in this case, amendment of the 1995 QDRO merely effectuates the allocation of benefits to Kathleen by instructing URS to disburse the funds as the decree allocated in 1992. The decree was established, with regard to each party's share of retirement, in 1992, pursuant to the Woodward formula. See supra ¶2. The proposed amendment does not attempt to change or retroactively apply new law because it does not involve any statutes at all. Duane does not point to a single statute being retroactively applied. The amendment to the 1995 QDRO simply enforces the already-existing decree-which treats the parties identically-and asks the court to identically apply the change in administrative rules to the retirement accounts as well. Kathleen did not seek any alteration of retirement benefits that may have accrued between the entry of the original decree and present-day; she instead requested that moving forward, the court grant her QDRO the same status as Duane's QDRO. Therefore, Duane's argument that the district court retroactively applied a change to the Utah Code fails.

III. Inequitable Amendment

¶19 Finally, Duane argues that it was inequitable for the court to amend the 1995 QDRO because Duane "stands the chance of losing more." Under the new rules, if the amended order stands and Kathleen predeceases Duane, he would suffer a diminishment in benefits. But Kathleen asserts, "Equity demands that both parties be under the same application of the rules for division of their respective retirement accounts." We do not see the question as whether the equities of the parties' positions should be re-evaluated. Instead, we view this collateral order through the lens of enforcement, specifically enforcing the equitable distribution of property established by the court many years ago.

¶20 In a stipulated divorce, the point at which the court weighs the equities is when it accepts the parties' stipulation and uses it as the basis for the decree. See Newmeyer v. Newmeyer , 745 P.2d 1276, 1278 (Utah 1987) (stating that in determining marital property distribution, "[t]he overriding consideration is that the ultimate division be equitable-that property be fairly divided between the parties."); Maxwell v. Maxwell , 796 P.2d 403, 406 (Utah Ct. App. 1990) ("While a property settlement agreement is not binding upon a [district] court in a divorce action, such agreement should be respected and given considerable weight in the [district] court's determination of an equitable division of property.").

¶21 Where there is no petition for modification of the decree itself, the court does not bear the responsibility of re-weighing the equities for the parties after they have assented to the decree; the court's responsibility is to enforce the provisions of the decree as they exist. See Bayles v. Bayles , 1999 UT App 128, ¶ 15, 981 P.2d 403 ("Stipulations entered into in contemplation of a divorce are conclusive and binding on the parties unless, upon timely notice and for good cause shown, relief is granted therefrom." (cleaned up) ). Here, by allowing amendment of the 1995 QDRO-a collateral order-to reflect the current rules and apply them identically to the parties, the decree remained unchanged. Accordingly, there is no need for the court to weigh the equities once more. Therefore, the district court properly enforced the decree by allowing the amendment.

CONCLUSION

¶22 The district court properly exercised jurisdiction over the parties and the 1995 QDRO. The district court did not retroactively apply any part of the Utah Code to the 2015 QDRO. And finally, the district court did not need to reassess the equity arguments of the parties in entering a collateral order enforcing the original decree.

¶23 Affirmed.

      "As is our practice in cases where [multiple] parties share a last name, we refer to the parties by their first name[s] with no disrespect intended by the apparent informality." Smith v. Smith , 2017 UT App 40, ¶ 2 n.1, 392 P.3d 985.

      A qualified domestic relations order instructs "the trustee of a retirement plan and specifies how distributions should be made, to whom, and when." Bailey v. Bailey , 745 P.2d 830, 832 (Utah Ct. App. 1987).

      Neither party cites any specific URS rule changes, but both parties agree that a rule change did occur "in or about 2000."

      The parties agree that "neither Rule 59(e) nor 60(b) [of the Utah Rules of Civil Procedure] applies [regarding] the amendment of ... [Kathleen's] QDRO."


author: HARRIS, Judge:

text:
    KYCO SERVICES LLC, Petitioner, v. DEPARTMENT OF WORKFORCE SERVICES, Respondent.
    No. 20170273-CA
    Court of Appeals of Utah.
    Filed September 7, 2018
    Kendra Shirey, Chrystal Mancuso-Smith, and Robert E. Aycock, Salt Lake City, Attorneys for Petitioner.
    Nathan R. White, Attorney for Respondent.
    Judge Ryan M. Harris authored this Opinion, in which Judges David N. Mortensen and Jill M. Pohlman concurred.
    Opinion
   HARRIS, Judge:

¶ 1 As a general rule, employers must make unemployment insurance contributions for workers they employ. The Department of Workforce Services Board of Appeals (Board) determined that, for certain workers during certain pay periods, Kyco Services, LLC (Kyco) had failed to do so. Kyco seeks review of that determination in this court, and asserts that the workers in question were not its employees but, instead, were employed by a second company that it claims sometimes supplied Kyco with extra laborers for certain jobs. Because the evidence was sufficient to support the Board's determination that Kyco employed the workers, we decline to disturb it.

BACKGROUND

¶ 2 Kyco is a limited liability company that provides drywall services on construction projects. For larger jobs, Kyco would occasionally need additional workers, and on some of these occasions would utilize contract laborers provided by a separate company. As relevant here, in 2010 Kyco contracted with ITY, LLC (ITY1), apparently for the purpose of obtaining contract laborers as needed. At the time, ITY1 had a valid subcontractor's license, but that license expired in 2011 and was not renewed, prompting Kyco to eventually stop working with ITY1.

¶ 3 In December 2011, the owner of ITY1 created a new company called ITY of Texas, LLC (ITY2), and at some point thereafter, apparently in 2012, Kyco entered into a written "subcontract agreement" with this new entity. That agreement stated that ITY2 would provide workers to Kyco, provide supervision for those workers, maintain worker's compensation insurance, pay payroll taxes, and hold a valid subcontractor's license. ITY2 never obtained such a license, however, and the working relationship that actually developed between Kyco and ITY2 deviated substantially from the terms of their agreement.

¶ 4 In 2015, a representative of the Department of Workforce Services (Department) audited Kyco and determined that ITY2 had not actually provided and supervised laborers for Kyco, but instead had merely served as a "bookkeeping company" that arranged for payment of workers that Kyco hired and supervised. Under the Utah Administrative Code, an employer must report an employee on its payroll tax reports if the employer: (1) has the right to hire and fire the employee, (2) has the responsibility to control and direct the employee, and (3) is the employer for whom the employee performs a service. Utah Admin. Code R994-202-104(1). "Payrolling" is "the practice of [a company] paying wages to the employees of another employer or reporting those wages on its payroll tax reports." Id . Payrolling is not permitted under Utah law. Id . R994-202-104(2). The auditor determined that certain laborers who had been paid by ITY2 during various pay periods in 2014 and 2015 were actually employed by Kyco, and that Kyco should have been making unemployment insurance contributions for these laborers. Accordingly, the auditor recommended that Kyco be ordered to pay those contributions, plus interest and penalties. Kyco requested that a "hearings officer" review the auditor's determination.

¶ 5 After review, the hearings officer acknowledged that "[Kyco] signed a subcontractor agreement with [ITY2]" stating that ITY2 would "provide individuals to install drywall ... at [Kyco's] worksites," but noted that the auditor had "found a different working relationship between [Kyco] and [ITY2] than ... implied in the agreement." The officer stated that the auditor had based that conclusion on discussions with the owner of ITY2 (Owner), who had "revealed" that ITY2 "was acting as a payroll service" and that Kyco, not ITY2, employed the workers paid by ITY2. The hearings officer affirmed the auditor's determination, and Kyco sought further administrative review.

¶ 6 Thereafter, Kyco received a notice from the Department that its appeal had been set for a telephonic hearing before an administrative law judge (ALJ). This notice warned Kyco that one of the issues to be heard during the hearing would be the issue of "payrolling," and that the hearing would be Kyco's opportunity to "present ALL testimony and evidence on the issues." The notice stated that "[t]he appeal decision will be based solely on the evidence and testimony presented at the hearing," and that if a further appeal of the ALJ's decision was filed, Kyco would "generally not be allowed to present new or additional testimony and evidence." The notice also advised Kyco that, while hearsay testimony would be admissible at the telephonic hearing, direct witness testimony would be more helpful than hearsay testimony in proving factual assertions.

¶ 7 The hearing took place in April 2016. At the hearing, Kyco presented testimony from its owner, Kyle Morris, who testified about several topics, such as the details of Kyco's working relationship with ITY1 prior to the formation of ITY2. However, Kyle Morris stated that he did not deal directly with ITY2, and that he had very few recent contacts with Owner and did not know how ITY2's business was structured. Kyco did not present testimony from any other witnesses.

¶ 8 In response, the Department presented testimony from Owner, who testified that, while the contract signed by the parties stated that ITY2 would provide supervised workers to Kyco for construction projects, their actual agreement and subsequent working relationship was significantly different in practice. Indeed, Owner stated that, around the time that the parties entered into the signed agreement, Kyco's Rob Morris-Kyle Morris's brother-informed Owner that ITY2 would instead handle payrolling for Kyco. Owner testified that, for the entirety of their professional relationship, the only work ITY2 performed for Kyco was issuing checks to employees that Kyco hired and supervised based on lists of employee names and payment amounts that Kyco provided. Owner further testified that ITY2 was never involved in any labor on Kyco's behalf, and that he had never worked with drywall and would not know how to perform such work.

¶ 9 In response, Kyco solicited additional testimony from Kyle Morris, who reiterated that he had very few conversations with Owner, and confirmed that it was Rob Morris-rather than himself-who "made the arrangements" regarding Kyco's relationship with ITY2. While Kyle Morris acknowledged that he did not have direct knowledge of Rob Morris's interactions with Owner or of the actual working relationship that developed between Kyco and ITY2, he indicated that he felt strongly that, if asked, Rob Morris would deny that Kyco and ITY2 were in a payrolling relationship. Kyle Morris further stated that Rob Morris "would have asked me first" before agreeing to enter into a payrolling relationship with ITY2, and that he had no reason to believe Rob had entered into such a relationship.

¶ 10 The ALJ credited Owner's testimony over Kyle Morris's testimony. In a formal written decision, the ALJ found that Owner was "the only individual who provided firsthand testimony about the arrangements made" between Kyco and ITY2. Accordingly, despite the written agreement's language classifying ITY2 as a subcontractor, the ALJ found that the workers ITY2 paid were hired by Kyco, controlled and directed by Kyco, and performed services for Kyco. The ALJ further noted that, "[e]ven if ... [Owner] signed an agreement to be a construction subcontractor, he could not legally do so" because he did not have a license. Accordingly, the ALJ concluded that, regardless of the terms of the written agreement, Kyco employed the workers paid by ITY2 and was therefore liable for the unemployment insurance contributions associated with their employment.

¶ 11 Kyco appealed the ALJ's determination to the Board. As part of that appeal, Kyco sought for the first time to introduce a declaration from Rob Morris calling Owner's testimony into question. However, the Board declined to consider this evidence because it had not been presented during the hearing before the ALJ and because, per Utah law, "[a]bsent a showing of unusual or extraordinary circumstances, the Board will not consider new evidence on appeal if the evidence was reasonably available and accessible at the time of the hearing before the ALJ." See Utah Admin. Code R994-508-305(2).

¶ 12 Kyco also attempted to persuade the Board to afford greater weight to Kyle Morris's testimony, arguing that he was a "corporate representative" offering testimony on behalf of Kyco, as opposed to offering testimony simply on his own behalf. The Board determined that, while there are rules to designate corporate representatives for depositions in civil cases, there are no such rules applicable to administrative hearings. Accordingly, the Board determined that Kyle Morris's testimony regarding subjects of which he did not have firsthand knowledge (such as Rob Morris's activities, or the actual working arrangement between Kyco and ITY2) was hearsay. The Board therefore declined to afford more weight to Kyle Morris's testimony than the ALJ had. Further, the Board noted that, "even if the entirety of [Kyle] Morris's testimony were to be considered, the ultimate outcome would not change" because Kyle Morris did not fully contradict Owner's testimony regarding the day-to-day relationship between Kyco and ITY2.

¶ 13 Accordingly, the Board affirmed the ALJ's determination.

ISSUES AND STANDARDS OF REVIEW

¶ 14 Kyco now seeks review of the Board's decision in this court, and asks us to consider four issues. First, Kyco contends that much of Owner's testimony was barred by the parol evidence rule, and that the Board erred by considering that testimony. Whether the parol evidence rule bars particular evidence is a question of law, and we review for correctness the Board's decision to entertain the challenged evidence. See Bennett v. Huish , 2007 UT App 19, ¶ 8, 155 P.3d 917.

¶ 15 Second, Kyco asserts that the Board erred by determining that Kyle Morris was not a designated corporate representative of Kyco, and therefore concluding that his testimony that was not based on firsthand information was hearsay. Under the Utah Administrative Procedures Act, we may grant relief where "a person seeking judicial review has been substantially prejudiced [because] ... the agency has erroneously interpreted or applied the law." Utah Code Ann. § 63G-4-403(4)(d) (LexisNexis 2016). Further, whether evidence proffered at an administrative hearing constitutes hearsay is a question of law that we review for correctness. Prosper, Inc. v. Department of Workforce Services , 2007 UT App 281, ¶ 8, 168 P.3d 344.

¶ 16 Third, Kyco contends that the Board erred when it refused to consider Rob Morris's declaration. We review an agency's decision to exclude evidence for abuse of discretion. Utah Code Ann. § 63G-4-403(4)(h).

¶ 17 Fourth, Kyco contends that the Board erred when it found that Kyco employed the workers paid by ITY2. On review, we decline to disturb an agency's findings of fact "if they are supported by substantial evidence when viewed in light of the whole record before the court." Gibson v. Department of Workforce Services , 2017 UT App 107, ¶ 2, 400 P.3d 1152 (quotation simplified). "Substantial evidence is that quantum and quality of relevant evidence that is adequate to convince a reasonable mind to support a conclusion and is more than a mere scintilla but [is] something less than the weight of the evidence." Needle, Inc. v. Department of Workforce Services , 2016 UT App 85, ¶ 6, 372 P.3d 696 (quotation simplified). Further, due to the fact-intensive nature of employment status inquiries, we defer to the Board's conclusions regarding employment status "if they are supported by the record evidence." Evolocity, Inc. v. Department of Workforce Services , 2015 UT App 61, ¶ 6, 347 P.3d 406.

ANALYSIS

A

¶ 18 Kyco first contends that much of Owner's testimony was barred by the parol evidence rule, and that the Board erred by considering that testimony. We find this argument unpersuasive, because the parol evidence rule does not apply to bar Owner's testimony regarding the contracting parties' actual post-agreement relationship.

¶ 19 The parol evidence rule "operates, in the absence of fraud or other invalidating causes, to exclude evidence of contemporaneous conversations, representations, or statements offered for the purpose of varying or adding to the terms of an integrated contract." See Tangren Family Trust v. Tangren , 2008 UT 20, ¶ 11, 182 P.3d 326 (quotation simplified). "Thus, if a contract is integrated, parol evidence is admissible only to clarify ambiguous terms," and is "not admissible to vary or contradict the clear and unambiguous terms of the contract." Id. (quotation simplified); see also Boud v. SDNCO, Inc. , 2002 UT 83, ¶ 20, 54 P.3d 1131 (stating that the parol evidence rule "precludes a search for additional or contradictory terms outside the four corners of [the agreement] absent some proof of fraud or mistake").

¶ 20 In this case, Kyco asserts that the agreement it entered with ITY2 was complete and unambiguous, and further argues that at least part of Owner's testimony-that "the 'real' agreement between the parties was for payroll services"-was offered for the purpose of varying or adding to the terms of the agreement. Accordingly, Kyco argues that the Board should have applied the parol evidence rule to bar Owner's testimony.

¶ 21 We disagree. While the parol evidence rule prohibits the admission of evidence offered to vary or add to the terms of an agreement, the rule applies only where the meaning of that agreement is at issue. See State v. Laine , 618 P.2d 33, 34-35 (Utah 1980) (stating that "the parol evidence rule cannot properly be invoked to prevent the State from showing the facts relating to" whether the defendant committed a crime, because the State was "not a party to" the contract in question and was therefore "neither bound by [its] terms" nor "prohibited from" discussing it during the trial); Garrett v. Ellison , 93 Utah 184, 72 P.2d 449, 451-52 (1937) (stating that parol evidence is inadmissible "in an action founded upon such writing, between the parties or privies thereto," and that the parol evidence rule "applies only in controversies between the parties" to the contract (quotation simplified) ). In this administrative proceeding (as opposed to a potential lawsuit by Kyco against ITY2 for breach of contract), the terms of the parties' 2012 agreement are of only tangential relevance. Indeed, as a general matter, administrative agencies are concerned with whether parties violated the law during particular intervals of time. In this case, while Owner testified briefly about the terms of the written agreement between Kyco and ITY2, the terms of that agreement were merely background information underlying the real issue: whether the workers being paid by ITY2 were in fact employees of Kyco during the specific 2014 and 2015 pay periods for which Kyco was audited, such that Kyco should be liable for any taxes or payments associated with those workers' wages. While the terms of an agreement between two parties may certainly bear some relevance to what is actually happening in practice, the focus of the inquiry is not on the meaning of the language of any existing agreement but rather on the actual relationship itself.

¶ 22 Moreover, the parol evidence rule does not prohibit a court from considering events that occurred after the formation of a contract, including any subsequent arrangements that may have been made by the parties. Mardesich v. Sun Hill Homes LC , 2017 UT App 33, ¶ 15 n.3, 392 P.3d 950 ("[T]he parol evidence rule only purports to foreclose events which precede or accompany a written or oral [agreement], not those which come later." (quotation simplified) ). "Because a subsequent mutual agreement is not a contemporaneous or prior conversation, representation, or statement, it is not parol evidence" with respect to an earlier contract. Id . (quotation simplified).

¶ 23 Here, Owner testified that his company paid employees who were hired and supervised by Kyco. This testimony was not offered to vary or add to the terms of the agreement between Kyco and ITY2, but rather to establish that the workers in question were, in fact, Kyco's employees during the relevant pay periods. Similarly, the Board's conclusion that Kyco and ITY2 were engaged in a payrolling relationship was not based on a determination that the terms of the parties' 2012 agreement included payrolling arrangements, but rather on the conclusion that payrolling occurred in 2014 and 2015 regardless of what the agreement said.

Accordingly, Owner's testimony to that effect was not barred by the parol evidence rule, and the Board did not err in considering it.

B

¶ 24 Kyco next contends that the Board erred when it declined to deem Kyle Morris to be Kyco's "corporate representative," and therefore determined that his testimony on subjects of which he did not have firsthand knowledge was hearsay. In making this contention, Kyco asserts that Kyle Morris "testified at the hearing as the representative for Kyco" and that, because "[a] corporation is a fictitious entity" that "can only testify through its designated representative," Kyle Morris's testimony as to the working relationship between Kyco and ITY2 should not have been considered hearsay despite his lack of personal knowledge.

¶ 25 In its briefing on appeal, Kyco cites to no Utah statute or case law in support of its position. However, at oral argument and in the record below, Kyco analogized to rule 30(b)(6) of the Utah Rule of Civil Procedure, which provides that in civil cases, for purposes of pretrial depositions, "[a] party may name ... a corporation" as a witness and that, if a party does so, the corporation may "designate one or more officers, directors, managing agents, or other persons to testify on its behalf." If a corporate representative is designated in this manner, the party calling the corporation as a witness must "describe with reasonable particularity the matters on which" the witness is expected to testify, and the corporation must "state, for each person designated, the matters on which the person will testify." Id . If these guidelines are followed, the corporate representative is entitled to testify "as to matters known or reasonably available to the organization," and is not limited to testifying solely about those matters of which the corporate representative has personal knowledge. Id . Kyco argues that it intended to designate Kyle Morris as a form of corporate representative akin to those designated in civil depositions pursuant to rule 30(b)(6), and that therefore his testimony that his brother would not have engaged in a payrolling-type relationship with ITY2 was not hearsay.

¶ 26 We disagree for several reasons. First, even assuming, without deciding, that rule 30(b)(6) could potentially apply in the context of this administrative proceeding, that rule applies by its terms only to discovery depositions, and not to trials or evidentiary hearings. See, e.g. , Union Pump Co. v. Centrifugal Tech. Inc. , 404 F. App'x 899, 908 (5th Cir. 2010) (stating that, while rule 30(b)(6)"allows corporate representatives to testify to matters within the corporation's knowledge during deposition," that rule does not apply to trials, and holding that "a corporate representative may not testify [at trial] to matters outside his own personal knowledge to the extent that information is hearsay not falling within one of the authorized exceptions" (quotation simplified) ); In re Otero County Hosp. Ass'n , No. 11-11-13686 JL, 2014 WL 184984, *10 (Bankr. D.N.M. Jan. 15, 2014) (stating that rule 30(b)(6)"applies to deposition testimony, not trial testimony"). Indeed, rule 30 appears in the section of the Utah Rules of Civil Procedure governing "depositions and discovery," and is itself titled "Depositions upon oral questions." See Utah R. Civ. P. 30. Subsection (b) of that rule concerns itself with the form of "[n]otice[s] of deposition." Id. R. 30(b). Kyco cites no authority for the proposition that rule 30(b)(6) has any application outside the context of pretrial depositions in civil cases. And the hearing before the ALJ was no pretrial deposition-it was a contested, adversarial hearing presided over by a neutral arbiter.

¶ 27 Second, again assuming, without deciding, that rule 30(b)(6) could potentially apply here, Kyco made no effort to comply with its requirements. Rule 30(b)(6) states that, if a party calls a corporation as a witness, the corporation shall designate a corporate representative to speak on its behalf, and shall "describe with reasonable particularity the matters on which" the corporate designee is expected to testify. The corporation must also "state, for each person designated, the matters on which the person will testify." In this case, neither side called Kyco as a corporate witness. Further, Kyco did not, prior to Kyle Morris's testimony, "describe with reasonable particularity the matters on which" he was expected to testify or set forth the matters on which he would testify. Accordingly, even if rule 30(b)(6) were applicable, Kyco failed to comply with its terms.

¶ 28 Third, we credit the Board's determination that, "even if the entirety of [Kyle] Morris's testimony were to be considered [as firsthand testimony rather than hearsay], the ultimate outcome" of this case would not change because Kyle Morris did not fully contradict Owner's testimony regarding to the day-to-day relationship between Kyco and ITY2. Kyle Morris testified only that he did not believe Rob Morris would have entered into the sort of agreement with ITY2 that Owner alleged, and that he believed Rob Morris would have denied entering into that sort of agreement. He did not contradict Owner's testimony that, regardless of whatever written agreement existed between Kyco and ITY2, the day-to-day practice between Kyco and ITY2 amounted to a payrolling relationship. Accordingly, even had Kyle Morris been a corporate representative similar to that envisioned under rule 30(b)(6), his testimony would not have been sufficient to contradict the bulk of Owner's testimony, or undermine the Board's ultimate conclusion.

¶ 29 Accordingly, the Board did not err when it determined that Kyle Morris was not a corporate representative, and that his testimony on subjects of which he did not have firsthand knowledge was hearsay.

C

¶ 30 Kyco next contends that the Board erred when it refused to consider the declaration of Rob Morris. As noted, Rob Morris did not testify at the hearing, and Kyco made no effort to introduce his declaration before the ALJ. Kyco's first attempt to introduce that declaration into these proceedings was during its appeal to the Board. We conclude that the Board did not abuse its discretion by refusing to consider Rob Morris's declaration.

¶ 31 Under the Utah Administrative Code, an ALJ's decision "will be based solely on the testimony and evidence presented at the [administrative] hearing." Utah Admin. Code R994-508-109(4). Further, "[a]bsent a showing of unusual or extraordinary circumstances, the Board will not consider new evidence on appeal if the evidence was reasonably available and accessible at the time of the hearing before the ALJ." Id . R994-508-305(2). Here, Kyco argues that the Board should have accepted Rob Morris's declaration because "unusual and extraordinary circumstances exist[ed]" in that "[Kyco] had no way to predict or anticipate" that, at the hearing, Owner would contradict the terms of the written agreement between Kyco and ITY2.

¶ 32 However, this assertion is belied by the particulars of the hearings officer's decision, which was issued almost two months before the ALJ hearing and was the decision that Kyco appealed to the ALJ. In this decision, the hearings officer affirmed the field auditor's determination that Kyco had engaged in payrolling, and explicitly stated that this determination had been based on "[c]onversations between the [a]uditor and [Owner]" which "revealed [that ITY2] was acting as a payroll service" for Kyco. The decision went on to describe an alleged business relationship between ITY2 and Kyco that differed significantly from the terms set forth in the written agreement. Moreover, after appealing the officer's decision, Kyco received a notice prior to the hearing before the ALJ, which specifically informed Kyco that the subject of "payrolling" would be at issue during the hearing. Because Kyco received specific notice that Owner had already testified that the agreement between Kyco and ITY2 was different in practice than it was on paper, it should have been entirely foreseeable to Kyco that the Department might present testimony from Owner reiterating that same point.

¶ 33 Kyco therefore received adequate notice that it would need to be ready to present all of the evidence (including witness testimony) relevant to its position on the subject of payrolling (and more broadly, the subject of whether Kyco employed the workers paid by ITY2) at the administrative hearing before the ALJ. Kyco has not asserted that Rob Morris was unavailable to testify at the hearing, and has not adequately explained why it would not have been on notice that Rob Morris's testimony might be relevant to the issues underlying the field auditor's conclusions. Accordingly, the Board did not abuse its discretion when it determined that "unusual and extraordinary circumstances" were not present, and therefore refused to consider Rob Morris's declaration.

D

¶ 34 Finally, Kyco contends that the Board's determination that Kyco employed the workers in question was "clearly erroneous." However, Kyco does not identify any specific factual findings that it asserts are unsupported by substantial evidence. Similarly, Kyco does not identify any of the Board's conclusions that it asserts are unsupported by record evidence. Instead, Kyco's argument on this point is advanced on two fronts: (1) Kyco's reiteration of its arguments that Owner's testimony should have been excluded, Kyle Morris's testimony should not have been considered hearsay, and Rob Morris's testimony should have been admitted; and (2) Kyco's assertions that the Board could have made different factual findings and come to different legal conclusions based on the evidence.

¶ 35 As to the first argument, we have already determined that the Board did not err in considering Owner's testimony about the mechanics of the day-to-day relationship between Kyco and ITY2, determining that Kyle Morris's testimony regarding Kyco's working relationship with ITY2 was hearsay, and excluding Rob Morris's declaration. As to the second argument, we note that our role as an appellate court is not to reweigh the evidence presented before the Board and determine whether we would have come to a different conclusion, or even whether a different conclusion would have been plausible given the record evidence. See Syed v. Department of Workforce Services , 2012 UT App 266, ¶ 3, 286 P.3d 1291 (per curiam) (stating that "appellate courts will not reassess an agency's credibility determinations or reweigh the evidence in a proceeding where conflicting evidence is presented"). Rather, our role is to determine whether the Board's factual findings were based on substantial evidence. On this record, we conclude that the Board's findings were supported by substantial evidence. Accordingly, we perceive no reason to disturb the Board's determination that Kyco employed the workers in question during the relevant time period.

CONCLUSION

¶ 36 Owner's testimony about the day-to-day relationship between Kyco and ITY2 was not barred by the parol evidence rule, and the Board therefore did not err by considering it. The Board did not err by determining that Kyle Morris's testimony on issues of which he had no personal knowledge was hearsay. The Board did not abuse its discretion by refusing to consider Rob Morris's declaration. In light of these rulings, it follows that there was substantial evidence to support the Board's determinations, and we therefore decline to disturb them.

      Kyco also contends that the Board erred in failing to address whether the workers paid by ITY2 were independent contractors as opposed to Kyco's employees. This argument is unavailing, because the Board determined, during its review of the "payrolling" regulation, that Kyco was responsible for controlling and directing the workers in question. See Utah Admin. Code R994-202-104(1)(b). Under a separate regulation, a worker is an employee, and not an independent contractor, if the putative employer exercises "control and direction" over the worker. See id. R994-204-303(2). Thus, the Board's determination that Kyco exercised control and direction over the workers is also dispositive of Kyco's independent contractor argument. Indeed, the Board expressly stated in its opinion that "the individuals paid through [ITY2] are employees [of Kyco] and not independent contractors." Thus, the Board did not fail to address the issue and, for the reasons discussed elsewhere herein, its decision on the issue was sound.

      Hearsay evidence is "clearly admissible in administrative hearings," see Deseret Book Co. v. Department of Workforce Services , 2018 UT App 50, ¶ 8 n.1, 420 P.3d 109 (quotation simplified), and neither party contends here that the Board should have excluded Kyle Morris's hearsay testimony entirely. However, all factual findings made in administrative hearings "must be supported by a residuum of legal evidence competent in a court of law." Id. (quotation simplified). Because of its determination that some of Kyle Morris's testimony was hearsay, the Board appears to have afforded less weight to that testimony than it did to Owner's firsthand testimony. On appeal, Kyco does not challenge the principle that hearsay testimony should generally be afforded less weight than firsthand testimony, and does not challenge the Board's specific decision-made following its determination that Kyle Morris's testimony constituted hearsay-to afford less weight to that testimony because it was hearsay.

      The Board determined that "the Rules of Civil Procedure do not generally apply" in administrative hearings before an ALJ. While Utah Code section 63G-4-205(1) (LexisNexis 2016) provides that parties to an administrative proceeding "may conduct discovery according to the Utah Rules of Civil Procedure" if "the agency does not enact [other] rules," the Department of Workforce Services has enacted rules for appeals from "initial Department determination[s] on unemployment benefits or unemployment tax liability (contributions)." Utah Admin. Code R994-508-101(1). Those rules specifically provide that, in this context, formal discovery governed by the Utah Rules of Civil Procedure is "rarely necessary and tend[s] to increase costs while delaying decisions." Id. R994-508-108(2)-(3). Accordingly, formal discovery is only allowed in these proceedings "if so directed by the ALJ" and if certain elements are found to be present. Id . The ALJ gave no such direction and made no such findings in this case.