text:
    Luke D. JEPPESEN, Appellee, v. BANK OF UTAH, Harry McMurdie, and Shira McMurdie, Appellants.
    No. 20170062-CA
    Court of Appeals of Utah.
    Filed December 20, 2018
    John D. Luthy, Salt Lake City, and Marty E. Moore, Attorneys for Appellants
    Bryan H. Booth and John W. Mann, Salt Lake City, Attorneys for Appellee
    Judge Diana Hagen authored this Opinion, in which Judges Gregory K. Orme and Ryan M. Harris concurred.
    Opinion
   HAGEN, Judge:

¶1 Bank of Utah, Harry McMurdie, and Shira McMurdie (collectively, the McMurdies) appeal the district court's grant of summary judgment in favor of Luke D. Jeppesen (Jeppesen). In 2001, Jeppesen's father, Zane Jeppesen (Zane), persuaded Harry McMurdie (Harry) to invest $500,000 in a real estate project in exchange for a promissory note secured by a trust deed to real property Zane owned in Utah County (the Alpine Property). Zane defaulted on the note in 2003, but negotiated three subsequent agreements promising to pay the McMurdies by an extended due date. Many years later, the McMurdies foreclosed on the Alpine Property, which Zane had since conveyed to his son through a quitclaim deed.

¶2 Jeppesen brought a quiet title action. On cross-motions for summary judgment, the district court ruled that the six-year statute of limitations barred the nonjudicial foreclosure sale of the Alpine Property. Because we determine that there were genuine issues of material fact as to whether (1) the 2001 Note was extended or superseded by the subsequent agreements, and (2) Jeppesen was estopped from asserting the statute of limitations as a defense, we conclude the district court erred in granting summary judgment. Accordingly, we reverse and remand.

BACKGROUND

¶3 Between 1998 and 2004, Zane worked as an agent of Beverly Hills Development Corporation, a real estate development company engaged in a widespread fraud scheme (the Beverly Hills project). During that time, Zane acquired a total of 134 Utah investors for the Beverly Hills project, raised approximately $8 million, and earned nearly $1 million in compensation. Most of the investments offered or sold by Zane took the form of unsecured promissory notes. In some cases, however, the promissory notes sold to investors were secured by trust deeds recorded against the Alpine Property. This case concerns the nonjudicial foreclosure sale of the Alpine Property by one of those investors.

¶4 Harry had known Zane for several decades. In 2001, Zane approached Harry about investing in the Beverly Hills project. Zane assured him that his investment would be secured by a first-position trust deed on the Alpine Property, a five-acre parcel which Zane claimed was worth $500,000 per acre.

¶5 Harry agreed to invest some of his retirement funds held by the Bank of Utah (the McMurdie IRA) in the project. On September 24, 2001, Zane personally executed a promissory note for a $500,000 loan from the McMurdie IRA, secured by two trust deeds recorded against the Alpine Property (collectively, the 2001 Note). The 2001 Note required Zane to make monthly payments of $5,000, with the entire unpaid principal and twelve percent interest due on March 24, 2003. The 2001 Note provided that "the makers, sureties, guarantors and endorsers hereof ... consent to any and all extensions of time, renewals, ... or modifications that may be granted by the holder hereof with respect to the payment or other provisions of this note."

¶6 From October 2001 through March 2003, Zane made regular payments of $5,000 per month to the McMurdie IRA. But on the maturity date of the 2001 Note, Zane executed a new promissory note (the 2003 Note). The 2003 Note stated that the full principal and interest would be due on March 24, 2004. Zane did not create a new trust deed, but the 2003 Note listed the Alpine Property as the "Property Address."

¶7 From April 2003 through March 2004, Zane made payments to the McMurdie IRA. When the maturity date on the 2003 Note arrived, Zane executed two new promissory notes, one for the original $500,000 investment and a second for $200,271.11 in interest already due and owing on the original debt (collectively, the 2004 Notes). The 2004 Notes stated that "a Mortgage, Deed of Trust or Security Deed ... dated the same date as this Note, protects the Note Holder from possible losses which might result if I do not keep the promises which I make in the Note." Again, Zane did not record a new trust deed, but the 2004 Notes listed the Alpine Property as the "Property Address." The 2004 Notes stated that the full principal and interest would be due on March 24, 2005.

¶8 In early 2005, Zane was charged with two counts of securities fraud, two counts of dealing unregistered securities, and two counts of sale by an unauthorized agent based on his work for the Beverly Hills project. He pled no contest and entered into a Stipulation and Consent Order with the Utah Division of Securities, restricting his ability to deal in securities, prohibiting further fraudulent conduct, and requiring him to pay a fine.

¶9 In September 2005, Zane filed for bankruptcy. The McMurdies were aware of the bankruptcy filing, but they did not challenge the discharge of Zane's underlying debt and did not seek relief from the automatic stay so as to commence foreclosure proceedings at that time. See generally 11 U.S.C. § 362 (2012). Zane assured Harry that "he had gone to considerable expense with an attorney to carve ... [the Alpine Property] and [the McMurdies'] note out of the bankruptcy" so the McMurdies were still "safe with these instruments" and could "plan on being repaid." On December 14, 2005, the bankruptcy court entered an order of discharge for Zane, extinguishing his personal liability for the debt. Although not evident from the record, the bankruptcy trustee apparently abandoned the bankruptcy estate's interest in the Alpine Property, presumably because the secured interests exceeded the value of the property.

¶10 Several years later, unbeknownst to the McMurdies, Zane executed and recorded a quitclaim deed, conveying his interest in the Alpine Property to his son, Jeppesen.

¶11 In 2011, aware that the repayment deadline under the 2004 Notes had passed on March 24, 2005 and that a six-year statute of limitations had begun to run from that date, Harry approached Zane to discuss the outstanding debt. The parties executed two documents extending the maturity date of the 2004 Notes to March 24, 2013 (collectively, the 2011 Modification Agreement). These documents indicate that the "Start Date of [the] Original Contract" was "24 September 2001," the date of the 2001 Note. The recitals explain that the 2001 Note was secured by two trust deeds, which "remain liens of record against" the Alpine Property, and that "the parties hereto desire to enter into this Modification Agreement for the purpose of ... memorializing the terms by which the [trust deeds] will be released." The 2011 Modification Agreements include an "Extension of the Maturity Date" to March 24, 2013. The parties signed the agreements on March 22, 2011, two days before the statute of limitations was to run on the McMurdies' claims.

¶12 When the maturity date of the 2011 Modification Agreements approached, Zane and Harry agreed to extend the maturity date by another three months (the 2013 Extension Agreements). The 2013 Extension Agreements again list the start date of the original contract as "24 September 2001" and set a new maturity date of June 24, 2013. Zane testified that the purpose of the document was "[t]o keep Harry McMurdie from foreclosing for three more months."

¶13 When Zane failed to pay the principal and accrued interest by June 24, 2013, the McMurdies initiated nonjudicial foreclosure proceedings against the Alpine Property. A foreclosure sale was held on July 23, 2015, and a trustee's deed conveying the property to the McMurdie IRA was recorded on July 28, 2015. Jeppesen filed this quiet title action one day before the foreclosure sale.

¶14 Jeppesen argued that the six-year statute of limitations barred the nonjudicial foreclosure sale because the last payment on the 2001 Note was received on March 18, 2004. On cross-motions for summary judgment, the district court ruled that the statute of limitations barred the McMurdies' foreclosure sale and granted summary judgment in favor of Jeppesen. The McMurdies appeal.

STANDARD OF REVIEW

¶15 In reviewing a grant of summary judgment, "we accord no deference to the [district] court, but review its conclusions for correctness."

McNair v. Farris , 944 P.2d 392, 394 (Utah Ct. App. 1997) (quotation simplified).

ANALYSIS

¶16 On appeal, the McMurdies argue that the district court erred in granting summary judgment in favor of Jeppesen on the basis of the statute of limitations. Summary judgment is appropriate when "there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Utah R. Civ. P. 56(a). At the summary judgment stage, the district court must "view all facts and reasonable inferences in the light most favorable to the nonmoving party." Pugh v. Dozzo-Hughes , 2005 UT App 203, ¶ 26, 112 P.3d 1247. Under this standard, "a district court is precluded from granting summary judgment if the facts shown by the evidence on a summary judgment motion support more than one plausible but conflicting inference on a pivotal issue in the case," especially if the inferences depend upon the parties' intent. Telegraph Tower LLC v. Century Mortg. LLC , 2016 UT App 102, ¶ 24, 376 P.3d 333 (quotation simplified).

¶17 The McMurdies advance two alternative arguments for reversal. First, the McMurdies claim that there is a material issue of fact as to whether the parties' subsequent agreements extended the maturity date of the 2001 Note to June 24, 2013, so that the statute of limitations did not begin to run until that date. Alternatively, the McMurdies contend that there is a genuine issue of material fact as to whether Zane induced Harry to forgo initiating the foreclosure within the limitation period and whether Jeppesen should be estopped from asserting the statute of limitations based on his father's actions. We agree that there are material issues of fact on both issues that preclude summary judgment.

I. Issues of Fact Regarding Extension of the 2001 Note

¶18 The first issue on appeal is whether there are material questions of fact as to when the statute of limitations began to run on the McMurdies' foreclosure cause of action. The nonjudicial foreclosure sale of the Alpine Property was based on the trust deeds securing the 2001 Note. "A trust deed secures the obligations due under a note by transferring a security interest in real property to a trustee to be held until the debt is repaid." DiMeo v. Nupetco Assocs., LLC , 2013 UT App 188, ¶ 7, 309 P.3d 251. "In other words, the pledged property is used as collateral for the obligation and can be foreclosed in the event of default." Id. An action to foreclose the trust deed must be commenced "within the period prescribed by law for the commencement of an action on an obligation secured by a trust deed." Utah Code Ann. § 57-1-34 (LexisNexis Supp. 2018).

¶19 Here, because the trust deeds secured the 2001 Note, the parties agree that the six-year limitations period applies for actions "upon any contract, obligation, or liability founded upon an instrument in writing." Id. § 78B-2-309(2) (2012). The statute of limitations begins to run "when the contract was breached-that is, the date of the first missed payment, or upon the maturity date of the loan, if no action has been taken to accelerate payment prior to that date." See Goldenwest Fed. Credit Union v. Kenworthy , 2017 UT App 191, ¶ 7 n.4, 406 P.3d 253 (citation omitted).

¶20 In granting summary judgment, the district court concluded that the statute of limitations began to run on March 18, 2004, the date the last payment was received by the McMurdies. Accordingly, the court ruled that the six-year statute of limitations had long since run when the trustee's sale occurred in 2015. In a subsequent order, the court rejected the McMurdies' argument that the subsequent agreements had the effect of extending or renewing the 2001 Note.

¶21 Whether the subsequent agreements extended the 2001 Note secured by the trust deeds is a question of fact for trial. A new note does not "extinguish the debt for which the original note was given unless it clearly appears that it was the intention of the parties that the execution of the new note and the cancellation of the old note should extinguish the debt represented by the old note." First Sec. Bank of Utah v. Proudfit Sporting Goods Co. , 552 P.2d 123, 124 (Utah 1976) (quotation simplified).

¶22 In this case there is conflicting evidence regarding the parties' intent. As the district court noted, the 2011 Modification Agreement states that the "2001 Note was replaced and superseded by" the 2004 Notes. The court also noted that the 2004 Notes "substitute different parties (Harry and Shira McMurdie and the McMurdie Family Trust in lieu of the McMurdie IRA) as well as different amounts (the $200,271.11 interest which had accrued on the 2001 Note) and different interest rates (sixteen percent compounded in lieu of twelve percent)." This evidence supports the district court's conclusion that the subsequent agreements were "new obligations which supersede and satisfy the 2001 Note."

¶23 However, the McMurdies also presented ample evidence to support the opposite conclusion. The 2001 Note provided that it could be extended or renewed by the parties. According to Harry's affidavit, at Zane's request, he agreed to "extend" his investment when the 2001 Note was due to expire in March 2003. Although Harry invested no additional money, Zane executed a second promissory note for $500,000, listing the Alpine Property secured by the trust deeds and setting a new due date of March 24, 2004. The content of the 2003 Note and the circumstances surrounding it could support a finding that it was intended to extend by one year the due date of the 2001 Note secured by the trust deeds.

¶24 Harry explained that when the new due date arrived, Zane again proposed that he "extend the debt on the original $500,000 promissory note investment by one year." Zane executed two more promissory notes, one for the $500,000 principal invested in 2001 and one for the interest that had accrued since 2001. These 2004 Notes stated that they were secured by "a Mortgage, Deed of Trust or Security deed." Although no new trust deed was recorded, the 2004 Notes again listed the Alpine Property. In his own testimony, Zane confirmed that the 2004 Notes were "extending" his debt to the McMurdies. The extension of the due date by exactly one year, the promise to pay both the original principal of $500,000 plus the interest accrued since 2001, the representation that the note was secured, the reference to the Alpine Property, and the testimony of both parties all support the conclusion that the 2004 Notes were intended as a further extension of the 2001 Note secured by the trust deeds.

¶25 Finally, the evidence regarding the 2011 Modification Agreement supports a finding that it was intended to extend the 2001 Note. The 2011 Modification Agreement explains that the trust deeds securing the 2001 Note remain liens of record against the Alpine Property even though Zane's personal liability for the debt had been discharged in bankruptcy. It further states that in the event of a default, "the sole recourse of the McMurdies is a non-judicial foreclosure against the Secured Property." The 2011 Modification Agreement states that it is for the express "purpose of modifying, extending and changing the terms of the 2004 Notes and memorializing the terms by which the [2001 trust deeds] will be released" and includes an "Extension of the Maturity Date" of the 2004 Notes to March 24, 2013. Because only the 2001 Note was expressly secured by a trust deed, the acknowledgement that the McMurdies' investment remains secured by the Alpine Property is strong evidence that the 2011 Modification Agreement and the intervening notes were intended as extensions of the original secured debt.

¶26 In addition, the 2011 Modification Agreement was signed two days before the six-year statute of limitations period would have expired based on the prior maturity date. The final page, titled "Contract Extension Agreement," lists the start date of the original contract as "24 September 2001" and expressly states, "The intent of this contract is to continue with an extension from the last two contracts that were dated 24 March 2004 and were to mature on 24 March 2005." Based on this plain language and the surrounding circumstances, a fact-finder could reasonably conclude that the prior written instruments-the 2003 Note and the 2004 Notes-were intended as an extension of the original 2001 Note and that the 2011 Extension Agreement was intended to "continue" that extension before the statute of limitations elapsed.

¶27 There are material issues of fact precluding summary judgment in this case. If the parties intended the subsequent agreements to extend-rather than supersede-the 2001 Note secured by the trust deeds, the statute of limitations would have been triggered when Zane failed to pay the debt by the extended maturity date of March 24, 2013, in which case the 2015 foreclosure action would be timely. Because the parties' intent is a disputed and material question of fact, the application of the statute of limitations cannot be resolved on summary judgment. Accordingly, we vacate the district court's order and remand for trial or such other proceedings that may now be appropriate.

II. Issues of Fact Regarding Equitable Estoppel

¶28 The McMurdies separately contend that the district court erred in granting summary judgment because a question of fact remains concerning whether Jeppesen is estopped from asserting the statute of limitations. Specifically, the McMurdies argue that genuine issues of material fact exist as to whether Zane fraudulently induced Harry to forego timely initiating a foreclosure sale and whether that conduct can be imputed to Jeppesen.

¶29 The McMurdies framed this issue below as an application of the "equitable discovery rule," and the court addressed it in those terms. On appeal, however, the McMurdies' argument is based on the "equitable estoppel doctrine." The McMurdies maintain that they adequately preserved this argument by providing the district court "with legal authority for the equitable estoppel argument they make here." Jeppesen does not dispute this assertion, and instead concedes that "the equitable estoppel argument asserted by [the McMurdies] is a part of the equitable discovery rule asserted by [the McMurdies] before the district court." While we acknowledge that the two concepts are related and accept the parties' agreement as to preservation, we take this opportunity to distinguish the two doctrines.

¶30 Under the equitable discovery rule, a statute of limitations "may be tolled until the discovery of facts forming the basis for the cause of action." Russell Packard Dev., Inc. v. Carson , 2005 UT 14, ¶ 21, 108 P.3d 741 (quotation simplified). In other words, "the equitable discovery rule may operate to toll an otherwise fixed statute of limitations if a plaintiff does not discover the cause of action due to the defendant's concealment or misleading conduct or due to other exceptional circumstances that would make the application of the limitations period unjust." Young Res. Ltd. P'ship v. Promontory Landfill LLC , 2018 UT App 99, ¶ 27, 427 P.3d 457.

¶31 In granting Jeppesen's motion for summary judgment, the district court ruled that the equitable discovery rule did not apply.

The district court acknowledged that "[t]he McMurdies may have been persuaded not to file a claim or seek foreclosure" due to a "string of acts, primarily on the part of Zane Jeppesen, which convinced the McMurdies that their investment was safe and they would receive payment." Nevertheless, the court ruled that the discovery rule did not apply because the McMurdies "were fully aware that Zane Jeppesen was in default" and were "aware that they could" file a claim. Because the McMurdies could not make the initial showing that they "did not know and could not reasonably have known of the existence of a cause of action in time to file a claim within the limitation period," the court ruled that neither the concealment prong nor the exceptional circumstances prong of the discovery rule tolled the statute of limitations.

¶32 In reaching this conclusion, the district court did not apply the related doctrine of equitable estoppel. The doctrine provides:

Unlike equitable tolling, which is invoked in cases where the plaintiff is ignorant of his cause of action because of the defendant's fraudulent concealment, equitable estoppel is invoked in cases where the plaintiff knew of the existence of his cause of action but the defendant's conduct caused him to delay in bringing his lawsuit.

Ellul v. Congregation of Christian Bros. , 774 F.3d 791, 802 (2d Cir. 2014) (quotation simplified). Equitable estoppel prevents a party from "lull[ing] an adversary into a false sense of security thereby subjecting his claim to the bar of limitations, and then be heard to plead that very delay as a defense to the action when brought." Rice v. Granite Sch. Dist. , 23 Utah 2d 22, 456 P.2d 159, 163 (1969). In other words, "where the delay in commencing an action is induced by the conduct of [one party], or his privies ... [the delay] cannot be availed of by [that party or his privies] as a defense." Id.

¶33 To estop a defendant from asserting the statute of limitations as a defense, a plaintiff must establish three elements:

(1) a statement, admission, act, or failure to act by one party inconsistent with a claim later asserted; (2) reasonable action or inaction by the other party taken on the basis of the first party's statement, admission, act, or failure to act; and (3) injury to the second party that would result from allowing the first party to contradict or repudiate such statement, admission, act, or failure to act.

Travelers Ins. Co. v. Kearl , 896 P.2d 644, 647 (Utah Ct. App. 1995) (quotation simplified). The McMurdies have presented sufficient evidence to demonstrate material issues of fact concerning each of these elements. Viewing the evidence in the light most favorable to the McMurdies, a reasonable fact-finder could conclude that Zane acted inconsistently with a later assertion of a statute of limitations defense and that the McMurdies reasonably relied on those actions to their detriment.

¶34 First, based on Harry's testimony, Zane's testimony, and the documents in this case, a jury could reasonably conclude that Zane made "a statement, admission, act, or failure to act" that was "inconsistent with a claim later asserted." Id. (quotation simplified). Specifically, the evidence could support a finding that Jeppesen's assertion of the statute of limitations is inconsistent with Zane's assurances to Harry that his investment remained secured by the trust deed and that the subsequent instruments merely extended the maturity date of the 2001 Note.

¶35 Second, the McMurdies produced evidence of "reasonable action or inaction by [Harry], taken on the basis of [Zane's] statement, admission, act, or failure to act." Id. (quotation simplified). To that end, Harry testified that he was aware he was nearing the end of the six-year limitation period in 2011 and approached Zane about the debt before the statute of limitations had run. A jury could find that Harry had reasonably delayed in initiating a foreclosure sale at that time based on Zane's assurances. More importantly, a jury could find that it was reasonable for Harry to do so in light of the 2011 Modification Agreement, executed two days before the statute of limitations would have otherwise expired.

¶36 Third, a jury could reasonably conclude that the McMurdies would be injured by "allowing [Jeppesen] to contradict or repudiate such statement, admission, act, or failure to act." Id. (quotation simplified). If Jeppesen is allowed to assert the statute of limitations, the foreclosure sale will be invalid and the McMurdies will have no recourse to recoup their loss. Because the McMurdies have produced evidence to support each element of equitable estoppel, genuine issues of material fact preclude the entry of summary judgment.

¶37 The remaining question is whether Zane's conduct can estop Jeppesen from asserting the statute of limitations as a defense. Under the equitable estoppel doctrine, "[i]f the actions of a defendant, its agents, or its privies induced delay in commencing an action, the court will not allow any of them to assert such delay as a defense." Dansie v. Anderson Lumber Co. , 878 P.2d 1155, 1160 (Utah Ct. App. 1994) ; see also 51 Am. Jur. 2d Limitation of Actions § 367 ("The doctrine of equitable estoppel may deprive a defendant of the defense of the statute of limitations if the plaintiff is induced to delay timely action by the promises of the defendant or the defendant's agent to settle, pay, perform or otherwise carry out the obligation or duty in question.").

¶38 In this context, privity means more than "a mutual or successive relationship to the same right or property." Glen Allen Mining Co. v. Park Galena Mining Co. , 77 Utah 362, 296 P. 231, 233 (1931), rejected on other grounds by Rawcliffe v. Anciaux , 2017 UT 72, ¶ 16, 416 P.3d 362. For example, we have held that equitable estoppel may not be asserted against an innocent successor in title, where there is no allegation that the successor was involved in the fraudulent conduct or wrongdoing. See Christensen v. American Heritage Title Agency, Inc. , 2016 UT App 36, ¶ 30, 368 P.3d 125. Instead, to assert equitable estoppel, the McMurdies must point to facts other than mere succession of title "sufficient to show a connection between [Jeppesen] and the dilatory tactics of [Zane]." See Dansie , 878 P.2d at 1160.

¶39 Here, the McMurdies have produced sufficient evidence from which a reasonable jury could conclude that Zane and Jeppesen "maintained [the] type of relationship or engaged in [a] course of conduct such that it would be proper to impute" Zane's actions to Jeppesen. Id. In his deposition, Jeppesen testified that he knew criminal charges and administrative proceedings had been brought against his father, Zane for obtaining "a lot of money" by selling promissory notes to investors on behalf of the Beverly Hills project. He also understood that the McMurdies had given his father $500,000 in exchange for a promissory note secured by the Alpine Property.

¶40 While Jeppesen was serving an ecclesiastical mission in 2010, Zane asked him if it was okay to put the Alpine Property in his name. Zane transferred the property to his son via a quitclaim deed for no consideration. Jeppesen has never seen the Alpine Property, does not know where it is located, and knows nothing about it other than "[i]t's 5 acres up on a hill." When asked why he was suing the McMurdies, Jeppesen responded, "For my dad's sake. He claims it's his property. ..." He testified that it was Zane who asked him to file the lawsuit, and that he was not personally involved in making the arrangements.

¶41 When viewed in the light most favorable to the McMurdies as the nonmoving parties, this evidence was sufficient to create a genuine issue of material fact as to whether Zane's delaying tactics should be imputed to Jeppesen. The disputed issues of fact on the question of equitable estoppel precluded the entry of summary judgment.

CONCLUSION

¶42 Because there were genuine issues of material fact as to whether (1) the 2001 Note was extended or superseded, and (2) Jeppesen was estopped from asserting the statute of limitations, the district court erred in granting summary judgment. We therefore reverse the district court's summary judgment order and remand the case to the district court for further proceedings consistent with this opinion.

      The second trust deed is identical to the first and appears to have been inadvertently recorded.

      Ordinarily, a secured creditor "is not limited to foreclosure on the mortgaged property should the debtor default on his obligation; rather, the creditor may in addition sue to establish the debtor's in personam liability for any deficiency on the debt and may enforce any judgment against the debtor's assets generally." Johnson v. Home State Bank , 501 U.S. 78, 82, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991) (italics omitted). A discharge in bankruptcy "extinguishes only 'the personal liability of the debtor.' " Id. at 83, 111 S.Ct. 2150 (quoting 11 U.S.C. § 524(a)(1) (2012) ). But "a creditor's right to foreclose on the mortgage survives or passes through the bankruptcy." Id.

      "Property of the debtor in which a creditor has a security interest becomes property of the debtor's bankruptcy estate subject to the lien or encumbrance, even where the lien or encumbrance equals or exceeds the fair market value of the property and the debtor, therefore, lacks equity in the property." 9A Am. Jur. 2d Bankruptcy § 1243 (2018). "Encumbered property remains in the estate until the secured creditor obtains relief from the automatic stay to proceed against the property or until the property is abandoned from the estate by the trustee." Id.

      Neither side has argued that the six-year statute of limitations for negotiable instruments under the Uniform Commercial Code applies, which has potentially different triggering dates. Cf. Deleeuw v. Nationstar Mortgage LLC , 2018 UT App 59, ¶ 12, 424 P.3d 1075.

      The McMurdies did not raise this argument initially because they had elected to void all agreements that followed the 2001 Note on the basis of fraud, thereby avoiding a provision in the 2011 Modification Agreements that might have released any securities fraud claims against Zane. In a motion to revise or vacate the court's summary judgment ruling, the McMurdies reversed their prior position and elected to ratify the 2003 Note, 2004 Notes, and the 2011 Modification Agreement. Although it would have been well within the district court's discretion to refuse to entertain the argument based on the McMurdies' belated change of heart, the court chose to address it on the merits. The court declined to revisit its summary judgment ruling only after concluding that the McMurdies could not prevail on the merits of their alternative argument.

      It is unnecessary to consider the effect of the 2013 Extension Agreements because the foreclosure sale occurred within six years of the maturity date set in the 2011 Modification Agreement. But the 2013 Extension Agreements, which also listed the original contract date as "24 September 2001," as well as Zane's testimony that the purpose of that agreement was "[t]o keep Harry McMurdie from foreclosing for three more months," may provide additional evidence of the parties' intent to extend the original obligation.

      Zane's underlying debt to the McMurdies was discharged in bankruptcy. As a result, the McMurdies' only recourse was foreclosure on the Alpine Property. See Johnson v. Home State Bank , 501 U.S. 78, 82-83, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991) (explaining that a bankruptcy discharge does not affect a secured creditor's right to foreclose on a lien, but does extinguish the right to sue the debtor personally for any deficiency).

      Jeppesen claims that the McMurdies did not preserve the argument that Zane's conduct can be imputed to Jeppesen. We disagree. In the district court, the McMurdies moved the court to treat Jeppesen as Zane's agent, citing the same evidence upon which they rely on appeal.


source: Caselaw Access Project

author: CHRISTIANSEN FORSTER, Judge:

license: Public Domain

text:
    WELLS FARGO BANK, NA, Appellee, v. Justine NOERRING and Darwin Long, Appellants.
    No. 20160837-CA
    Court of Appeals of Utah.
    Filed December 20, 2018
    Karra J. Porter, Salt Lake City, Kristen C. Kiburtz, Edward T. Wells, Murray, and David D. Bennett, Attorneys for Appellants
    Brett N. Anderson, Salt Lake City, and Scott R. Taylor, Attorneys for Appellee
    Judge Michele M. Christiansen Forster authored this Opinion, in which Judges David N. Mortensen and Jill M. Pohlman concurred.
    Opinion
   CHRISTIANSEN FORSTER, Judge:

¶1 After Lynnette Noerring and Justine Noerring (collectively, the Noerrings) defaulted on a loan, Wells Fargo Bank, NA (Wells Fargo) prepared to foreclose on the real property that secured that loan. A title search revealed, however, that, due to some missing words, the security interest in the property had not been effectively conveyed. Wells Fargo filed this action seeking, among other things, reformation of a vesting deed. Following a bench trial, the court amended the deed of trust entered into by the parties to reflect what all parties believed they were doing at the time-creating and conveying an enforceable deed of trust to secure the loan. Appellants challenge that decision. We affirm.

BACKGROUND

¶2 On March 15, 2003, Lynnette created the OMI Trust, designating herself as the trustee and her daughter, Justine, as the sole beneficiary. The only asset placed into the trust was the real property (the Property) at issue in this action.

¶3 Lynnette refinanced the Property several times. In each instance, she transferred the Property by quitclaim deed from herself, as trustee of the OMI Trust, to herself as an individual. After executing a deed of trust on the Property and closing the refinance, Lynnette typically conveyed the Property back to herself, as the trustee of the OMI Trust, by quitclaim deed.

¶4 Lynnette broke from this pattern in one such iteration. In February 2006, Lynnette executed a quitclaim deed (the 2006 Quitclaim Deed), purportedly transferring the Property to Lynnette and Justine as individuals, which was recorded on March 3, 2006. Instead of identifying the grantor as the trustee of the OMI Trust-the record owner of the Property at the time-the 2006 Quitclaim Deed instead listed the grantor as "Lynnette Noerring, a married woman." Following the recording of that quitclaim deed, the Noerrings refinanced the mortgage on the Property with a loan from WMC Mortgage Corp., which loan was secured by a trust deed, also recorded on March 3, 2006.

¶5 Five months later, the Noerrings obtained a loan (the New Century Note) from New Century Mortgage Corp. (New Century). This loan satisfied the WMC loan and was, by its terms, to be secured by a trust deed on the Property. In executing the New Century Note, the Noerrings represented that they were title owners of the Property. Along with the note, the Noerrings executed several other documents at the closing, acknowledging that the purpose of the transaction was for a "residential mortgage loan," which entailed providing the lender a security interest in the Property. The New Century Trust Deed was signed by both Lynnette and Justine and recorded on August 29, 2006. The New Century Note was ultimately assigned to Wells Fargo as trustee.

¶6 The Noerrings later applied for and received two modifications to the New Century Note and made payments for approximately five years. On February 25, 2010, Lynnette passed away. A little over a year later, Justine defaulted on the New Century Note. A few months after the default, Wells Fargo conducted a title search on the Property in anticipation of foreclosure. The search revealed that the title owner of the Property was Lynnette Noerring, as trustee for the OMI Trust, and not Lynnette as an individual or Lynnette and Justine as individuals.

¶7 Wells Fargo then initiated this action seeking, among other things, reformation of the 2006 Quitclaim Deed. Specifically, Wells Fargo sought "[a] judgment reforming the [2006 Quitclaim Deed] to reflect that Lynnette Noerring, as trustee of the OMI Trust , conveyed the Property as the grantor to the Noerrings, so that the Noerrings will be the correct owner and grantor/trustor of the Property under the [New Century Trust Deed]." (Emphasis added.) Wells Fargo also sought an order declaring the New Century Trust Deed to be valid and that it "encumbers and constitutes a first priority lien against the entire Property." Subsequently, Wells Fargo also requested that the New Century Trust Deed be reformed to reflect that Lynnette, as trustee of the OMI Trust, conveyed the security interest in the Property.

¶8 Following a bench trial, the court concluded that Justine and Lynnette, individually, and Lynnette, as trustee for the OMI Trust, intended to grant a security interest in the Property to New Century in order to secure the New Century Note. The trial court found by clear and convincing evidence that the Noerrings and New Century made a mutual mistake regarding the New Century Trust Deed. Specifically, the court determined that the Noerrings and New Century intended to create a valid trust deed and convey a valid security interest in the Property. Consequently, the trial court ordered reformation of the New Century Trust Deed. The court changed the grantor of the Property from Lynnette and Justine, as individuals, to Lynnette, as trustee of the OMI Trust. Justine and Darwin Long (collectively, Appellants) challenge the trial court's decision.

ISSUES AND STANDARDS OF REVIEW

¶9 Appellants raise three issues on appeal. First, they argue that Wells Fargo's reformation claims are barred by the nonclaim provisions of the Utah Uniform Trust Code and the Utah Probate Code (collectively, the Nonclaim Statutes). See Utah Code Ann. § 75-3-803(1) (LexisNexis Supp. 2018); id. § 75-7-509(1). Appellants raise this issue for the first time on appeal but assert that the issue can be addressed despite the lack of preservation because application of the Nonclaim Statutes present a jurisdictional bar to Wells Fargo's claims. "As a general rule, claims not raised before the trial court may not be raised on appeal." State v. Holgate , 2000 UT 74, ¶ 11, 10 P.3d 346. However, "because subject matter jurisdiction goes to the heart of a court's authority to hear a case, it is not subject to waiver and may be raised at any time, even if first raised on appeal." In re adoption of Baby E.Z. , 2011 UT 38, ¶ 25, 266 P.3d 702 (quotation simplified). The applicability and interpretation of a statute is a question of law, which we review for correctness. Fuller v. Bohne , 2017 UT App 28, ¶ 9, 392 P.3d 898.

¶10 Second, Appellants argue that Wells Fargo's claims are barred by the three-year statute of limitations applicable to claims for relief on the ground of fraud or mistake. Utah Code Ann. § 78B-2-305(3). Whether a statute of limitations applies and whether the limitations period is subject to tolling are questions of law. Shiozawa v. Duke , 2015 UT App 40, ¶ 14, 344 P.3d 1174. However, the determination of when a party reasonably should have known the facts constituting the fraud or mistake claim is a question of fact. Id. We will not disturb the fact-finder's determination absent clear error. Sevy v. Security Title Co. of S. Utah , 902 P.2d 629, 634 (Utah 1995).

¶11 Third, Appellants contend that the trial court had no authority to reform a deed by substituting a third party as grantor, thereby creating a new deed. "Reformation of a deed is a proceeding in equity." RHN Corp. v. Veibell , 2004 UT 60, ¶ 35, 96 P.3d 935 (quotation simplified). In equity actions, we review the trial court's factual findings for clear error and its conclusions of law for correctness. Id. We will not overturn a trial court's formulation of an equitable remedy "unless it has abused its discretion." Ockey v. Lehmer , 2008 UT 37, ¶ 42, 189 P.3d 51 (quotation simplified).

ANALYSIS

I. Nonclaim Statutes

¶12 Appellants assert that the trial court lacked jurisdiction to determine Wells Fargo's reformation claims because those claims were barred by Utah's Nonclaim Statutes. See Utah Code Ann. § 75-3-803(1) (LexisNexis Supp. 2018); id. § 75-7-509(1). Particularly, Appellants argue that, based on the Nonclaim Statutes, Wells Fargo was required to present its claim for reformation of the deed within one year of Lynnette's death.

Because Wells Fargo did not seek reformation within this one-year window, Appellants argue, any claim is barred "against the deceased settlor's estate, the trustee, the trust estate, and the beneficiaries of the deceased settlor's trust." (Quoting Utah Code Ann. § 75-7-509(1).) Wells Fargo argues in response that the Nonclaim Statutes are not applicable to this action because "any proceeding to enforce any mortgage, pledge, or other lien upon property of the deceased settlor's estate" is exempt from the one-year presentment period. Utah Code Ann. § 75-7-509(4)(a). We first review the Nonclaim Statutes generally, then consider the applicability of the Nonclaim Statutes to Wells Fargo's reformation claims.

¶13 The Nonclaim Statutes generally require creditors to present claims against a decedent's estate or a deceased settlor within one year of the person's death. See id. § 75-3-803(1) ; id. § 75-7-509(1). Failure to present a claim timely will likely result in that claim being barred as against the trust or estate because the purpose of the Nonclaim Statutes is "to promote a speedy and efficient system" for settling and distributing the estate or trust of the decedent. See In re Estate of Ostler , 2009 UT 82, ¶ 20, 227 P.3d 242 (quoting In re Estate of Daigle , 634 P.2d 71, 76 (Colo. 1981) (en banc) ). Indeed, the Utah Supreme Court has construed the Nonclaim Statutes "as a jurisdictional bar not subject to tolling." Id. ¶ 21. In reaching this conclusion, the supreme court adopted the reasoning employed by the Colorado Supreme Court in In re Estate of Randall , 166 Colo. 1, 441 P.2d 153 (1968) (en banc), and Daigle . See Ostler , 2009 UT 82, ¶ 21, 227 P.3d 242. The Daigle court explained:

A nonclaim statute operates to deprive a court of jurisdiction. The personal representative of an estate can neither waive it nor toll it. A nonclaim statute imposes a condition precedent to the enforcement of a right of action; that is to say, the claim must be presented within the time set in the notice to creditors or be barred. A statute of limitations, on the other hand, does not bar the right of action but only the remedy. Such a statute may be tolled. Such a statute is a defense which is waived if not affirmatively pleaded.

Daigle , 634 P.2d at 75 (quotation simplified). Thus, the Nonclaim Statutes are not statutes of limitation but impose a bar to enforcement of late-filed claims against an estate. See Ostler , 2009 UT 82, ¶ 21, 227 P.3d 242. Accordingly, if Wells Fargo's reformation claims are made against Lynnette's estate and the Nonclaim Statutes apply, the trial court would have lacked jurisdiction to consider these claims.

¶14 Wells Fargo asserts that its claims are exempt from the one-year presentment period contained in the Nonclaim Statutes because it is a lienholder. Relevant here, the Nonclaim Statutes exempt "any proceeding to enforce any mortgage, pledge, or other lien upon property of the deceased settlor's estate or the trust estate." Utah Code Ann. § 75-7-509(4)(a). Wells Fargo asserts that this provision applies in this case. We disagree.

¶15 Armed with the knowledge that a mistake in the 2006 Quitclaim Deed-and likewise an error in the New Century Trust Deed-prevented foreclosure on the Property, Wells Fargo filed a complaint in the trial court seeking reformation. Wells Fargo requested that the New Century Trust Deed be reformed to reflect a proper conveyance to New Century of a security interest in the Property. Reformation was necessary, in Wells Fargo's view, because-absent altering the language of the New Century Trust Deed-Wells Fargo could not proceed to foreclose on the Property. Because of the mistake in the New Century Trust Deed and lack of a valid security interest in the Property, Wells Fargo sought a judgment for reformation, an equitable remedy preliminary to any enforcement action under the circumstances. Accordingly, Wells Fargo's action below sought to reframe the underlying vesting instrument, not to enforce its terms.

¶16 But this conclusion does not end our inquiry. For Wells Fargo's claims to be jurisdictionally barred, they must constitute "claims" within the meaning of the Nonclaim Statutes. Appellants argue that Wells Fargo's reformation claims are "claims" within the Nonclaim Statutes and are therefore barred because Wells Fargo did not present these reformation claims to Lynnette Noerring's estate within one year of Lynnette's passing. We also reject this argument and conclude that the Nonclaim Statutes do not apply to the issues presented on appeal.

¶17 As noted, the Nonclaim Statutes require presentation within one year of claims against a decedent's estate that arose before the death of the decedent. In this context, "claims" "include[ ] liabilities of the decedent ..., whether arising in contract, in tort, or otherwise, and ... [do] not include ... demands or disputes regarding title of a decedent ... to specific assets alleged to be included in the estate." Utah Code Ann. § 75-1-201(6) (LexisNexis Supp. 2018). Put another way, "claims" refer to debts or demands against the decedent that might have been enforced in the decedent's lifetime. As used in this provision, however, "the term[ ] 'claim' does not include causes of action purely equitable, and in which purely equitable relief is sought." In re Estate of Sharp , 537 P.2d 1034, 1037 (Utah 1975) ; see also id. (determining that "equitable claims for relief beyond the money judgment, such as for enforcement of liens or trusts or for enforcement of rights in specific property are not 'claims' within the [nonclaim] statutes" (quotation simplified) ). Thus, an equitable cause of action filed against a decedent seeking reformation of an instrument is not seeking re-payment of a "liability of the decedent," which must be presented to the administrator of the estate within the statutory window. See Utah Code Ann. § 75-1-201(6). Because Wells Fargo's action below was not composed only of "claims" within the meaning of the Nonclaim Statutes, the trial court did not lack jurisdiction to consider and decide the matters now before us.

¶18 We have observed that "reformation is an equitable remedy that permits the court to add new terms to a deed or alter the original language of a deed to conform to the parties' intent." FDIC v. Taylor , 2011 UT App 416, ¶ 45, 267 P.3d 949 (quotation simplified); see also Wells Fargo Bank, N.A. v. Coleman , 239 N.C.App. 239, 768 S.E.2d 604, 611 (2015) ("Reformation is a well-established equitable remedy used to reframe written instruments where, through mutual mistake or the unilateral mistake of one party induced by fraud of the other, the written instrument fails to embody the parties' actual, original agreement." (quotation simplified) ). Here, Wells Fargo sought equitable reformation of the 2006 Quitclaim Deed or the New Century Trust Deed. This cause of action falls outside of the definition of a claim under the Nonclaim Statutes. Accordingly, the one-year presentation period does not apply and the trial court had jurisdiction to decide the matter.

II. Statute of Limitations

¶19 Appellants next argue that the trial court incorrectly identified the date that the statute of limitations for fraud or mistake began to run. An action to reform a deed based upon fraud or mistake must be brought within three years. Utah Code Ann. § 78B-2-305(3) (LexisNexis Supp. 2018).

¶20 Generally, the "statute of limitations begins to run upon the happening of the last event necessary to complete the cause of action." Russell Packard Dev., Inc. v. Carson , 2005 UT 14, ¶ 20, 108 P.3d 741 (quotation simplified). A cause of action based upon fraud or mistake, however, "does not accrue until the discovery by the aggrieved party of the facts constituting the fraud or mistake." Utah Code Ann. § 78B-2-305(3) ; see also Russell Packard , 2005 UT 14, ¶ 22, 108 P.3d 741 (explaining that "when a plaintiff first has actual or constructive knowledge of the relevant facts forming the basis of the cause of action-the statutory limitations period begins to run"). "[D]etermining when a plaintiff either discovered or reasonably should have discovered his or her cause of action is often a difficult and intensely fact-dependent inquiry." Russell Packard , 2005 UT 14, ¶ 22, 108 P.3d 741. "Before a statute of limitations may be tolled ... the plaintiff must make an initial showing that [it] did not know nor should have reasonably known the facts underlying the cause of action in time to reasonably comply with the limitations period." Young Res. Ltd. P'ship v. Promontory Landfill LLC , 2018 UT App 99, ¶ 27, 427 P.3d 457 (quotation simplified).

¶21 Here, the trial court determined that Wells Fargo discovered the mistake-that Lynnette and Justine, in their individual capacities, mistakenly pledged the Property as security for the New Century Loan without being title owners-in September 2011, when Wells Fargo completed a title search in anticipation of foreclosure. Having brought the action within three years of discovery of that information, the court concluded that the statute of limitations did not bar Wells Fargo's claim for reformation. Appellants do not challenge this finding on appeal, but instead assert that, as a matter of law, the statute of limitations began running in 2006 because New Century had actual or constructive knowledge of the New Century Trust Deed, which contained the mistaken statements. Because New Century-and by imputation, Wells Fargo-had sufficient notice of the mistake in the title to trigger the statute of limitations in 2006, they assert, the statute of limitations expired before the complaint was filed in 2013. In other words, Appellants ask us to supplant the trial court's factual finding-the 2011 discovery of the mistake-with a legal conclusion (constructive notice) that, by operation of the recording statutes, Wells Fargo reasonably should have known of the mistake in 2006.

¶22 In the context of Utah's recording statutes, we recognize two types of notice, actual and constructive. See FDIC v. Taylor , 2011 UT App 416, ¶ 36, 267 P.3d 949. "Actual notice arises from actual knowledge of an unrecorded interest or infirmity in the grantor's title." Haik v. Sandy City , 2011 UT 26, ¶ 14, 254 P.3d 171 (quotation simplified). Constructive notice, or notice arising by presumption of law, takes two forms: record notice and inquiry notice. See id. "Record notice results from a record or is imputed by the recording statutes." Id. (quotation simplified). Unlike record notice, "inquiry notice occurs when circumstances arise that should put a reasonable person on guard so as to require further inquiry on his part," though "inquiry notice does not arise from records." First Am. Title Ins. Co. v. J.B. Ranch, Inc. , 966 P.2d 834, 838 (Utah 1998) (quotation simplified).

¶23 As we noted, Appellants do not challenge the trial court's finding that Wells Fargo had actual notice of the mistake in 2011. Accordingly, we discern no error in the trial court's findings and do not further consider the actual notice argument. With respect to inquiry notice, Appellants fail to explain the particular circumstances here that would put a reasonable person on guard. They instead assert generally that "had the real estate industry been less 'fast and loose' leading up to the Great Recession-[a] 2006 inquiry [into the Property's title] would have revealed the correct state of title." Because the briefing on this theory is inadequate to carry their burden of persuasion, we do not consider it further. See Bank of Am. v. Adamson , 2017 UT 2, ¶ 12, 391 P.3d 196 (observing that "an appellant who fails to adequately brief an issue will almost certainly fail to carry its burden of persuasion on appeal" (quotation simplified) ).

¶24 With regard to record notice, Appellants argue that Wells Fargo had notice in 2006 of the recorded instruments as a matter of law, which triggered the running of the statute of limitations. To be sure, "from the time of recording with the appropriate county recorder, [recorded deeds] impart notice to all persons of their contents." Utah Code Ann. § 57-3-102(1) (LexisNexis 2010). However, Appellants' argument conflates discovery of the facts constituting a claim for mistake with notice presumed by the recording of instruments. Our supreme court has cautioned, "notice of the deed by reason of its being filed for record is not notice [or discovery]

of the facts constituting the fraud" or mistake. Smith v. Edwards , 81 Utah 244, 17 P.2d 264, 270 (1932).

¶25 Here, the trial court engaged in a "difficult and intensely fact-dependent inquiry," considered the instruments recorded, and concluded that the event triggering the statute of limitations occurred in 2011. See Russell Packard , 2005 UT 14, ¶ 22, 108 P.3d 741. We discern no error in the court's findings. Lynnette recorded the 2006 Quitclaim Deed conveying any interest she, in her individual capacity, had in the Property to herself and Justine as individuals. By recording the 2006 Quitclaim Deed, Lynnette imparted notice to New Century of the contents of that deed. On its face, the 2006 Quitclaim Deed fails to illuminate the mistake at issue in this case-that the grantor was incorrectly identified for an effective transfer of title to the Property.

¶26 The mistake is also not apparent on the face of the New Century Trust Deed. Lynnette and Justine represented in the deed that they were title owners of the Property with authority to convey it. By endorsing the New Century Trust Deed, they further agreed to convey an interest in the Property to New Century as security for the New Century Note. Although Lynnette and Justine, in their individual capacities, could not do this in reality, this defect is not apparent in the trust deed. Consequently, Wells Fargo's knowledge of the contents of the 2006 Quitclaim Deed and the New Century Trust Deed does not equate to discovery of the facts constituting the mistake. See Smith , 17 P.2d at 270. The operation of the recording statute-imputing knowledge of the contents of the recorded deeds to New Century-did not impart notice of the mistakes at issue.

¶27 The trial court found that New Century had no knowledge of the mistake in the New Century Trust Deed when the loan closed in 2006. Rather, the court determined that Wells Fargo discovered the mistake in 2011 when completing a title search. We are not persuaded that, under the circumstances of this case, the recording statute imparting constructive notice supplants the court's fact-finding inquiry. We accordingly decline to disturb the trial court's findings.

III. Authority to Reform a Deed

¶28 Appellants also argue that the trial court lacked authority to reform the New Century Trust Deed because doing so involved substituting a third party into the deed and creating a new deed. By changing the identity of the grantor of the security interest in the Property from Lynnette and Justine, as individuals, to Lynnette, as trustee for the OMI Trust, they argue, the court created an "entirely new" document. We disagree.

¶29 "Reformation of a deed is appropriate where the terms of the written instrument are mistaken in that they do not show the true intent of the agreement between the parties." RHN Corp. v. Veibell , 2004 UT 60, ¶ 36, 96 P.3d 935 (quotation simplified). Mutual mistake provides a basis to reform a written instrument. See E & H Land, Ltd. v. Farmington City , 2014 UT App 237, ¶ 25, 336 P.3d 1077. Thus, "reformation is an equitable remedy that permits the court to add new terms to a deed or alter the original language of a deed to conform to the parties' intent." FDIC v. Taylor , 2011 UT App 416, ¶ 45, 267 P.3d 949 (quotation simplified).

¶30 Appellants first contend that the trial court improperly substituted "a stranger [into] the deed." We are not persuaded. At the time Lynnette and Justine entered into the New Century Trust Deed, Lynnette was the sole trustee of the OMI Trust and Justine was the beneficiary. As trustee, Lynnette was authorized-with consent of the beneficiary, Justine-to mortgage or pledge the Property as security on behalf of the trust. Here, the trial court determined that New Century, Lynnette, and Justine intended to use the Property to secure the New Century Note. Indeed, each party stated as much in the resulting trust deed. Appellants do not challenge this finding, nor do they assert that Lynnette, at that time, could not have encumbered the Property on behalf of the OMI Trust. Instead, they argue that the court could not add the OMI Trust entity to the New Century Trust Deed.

¶31 There is no question that Lynnette, in her capacity as trustee of the OMI Trust, did not sign the New Century Trust Deed. This oversight prompted the present reformation litigation. Lynnette and Justine, as individuals, and Lynnette, as trustee of the OMI Trust, all shared the same interests, however, and benefited from the loan. Though reformation is inappropriate "when it will result in injury of innocent third parties," this is not such a situation. See 27 Williston on Contracts § 70:45 (4th ed. 2018). Had Lynnette, as trustee of the OMI Trust, correctly transferred her interest in the Property for the New Century Note, the individuals present would be identical, i.e., Lynnette, Justine, and New Century. Moreover, by Lynnette and Justine's involvement, Lynnette, as trustee of the OMI Trust, had adequate notice of the transaction and opportunity to advance any opposition. See Farmers Union Oil Co. of Garrison v. Smetana , 2009 ND 74, ¶ 20, 764 N.W.2d 665 (holding that "because of the equitable nature of the remedy, reformation is unavailable where its application would inflict an injury upon innocent parties as a result of an act of which they had no knowledge and for which they were not responsible" (quotation simplified) ). Appellants fail to explain how Lynnette, as trustee of the OMI Trust, is a "stranger" to the trust deed or how the trustee or the trust itself would suffer prejudice from the reformation.

¶32 Appellants also contend that the trial court improperly wielded the reformation tool to craft a completely new document. We disagree. The reformation doctrine is generally used to "add words omitted from a piece of paper," and Appellants correctly observe that this court has expressed some skepticism about employing the remedy "to add the omitted piece of paper (the deed)." See Taylor , 2011 UT App 416, ¶ 45, 267 P.3d 949 (affirming the trial court's denial of a motion for summary judgment on an alternative theory of reformation); see also id. ¶ 46 (observing that "[w]e have found no Utah cases applying the reformation doctrine so expansively").

¶33 There is no dispute in this case that Lynnette, as trustee of the OMI Trust, did not sign either the 2006 Quitclaim Deed or the New Century Trust Deed. Modifying Lynnette's designation as grantor on the New Century Trust Deed, however, did not create a new document. It merely added words to the New Century Trust Deed to "show the true intent of the agreement between the parties." See Veibell , 2004 UT 60, ¶ 36, 96 P.3d 935. Accordingly, we discern no error or lack of authority on the part of the trial court to reform the New Century Trust Deed. Because the parties intended to convey an enforceable security interest in the Property, and the OMI Trust would suffer no prejudice as a result of the reformation, we conclude the trial court did not err when it reformed the New Century Trust Deed. See Taylor , 2011 UT App 416, ¶ 46, 267 P.3d 949.

CONCLUSION

¶34 The trial court did not err when it granted Wells Fargo's request to reform the New Century Trust Deed. This particular cause of action-equitable reformation-is equitable in nature and therefore was not a "claim" within the meaning of the Nonclaim Statutes. Accordingly, the trial court had jurisdiction to decide the issues raised in this appeal. Additionally, we are not persuaded that, under the circumstances of this case, Wells Fargo had constructive notice of the mistakes in the 2006 Quitclaim Deed or New Century Trust Deed prior to 2011. Finally, we conclude that the trial court retained authority to reform the New Century Trust Deed to reflect the intent of the parties. We affirm.

      Because Lynnette and Justine share a last name, we refer to each by her first name throughout this opinion. We intend no disrespect by the apparent informality.

      By "recording" or "recorded" in this opinion, we refer to recordation of instruments at the Salt Lake County Recorder's Office.

      Although not relevant to this appeal, we note for clarity that the New Century Note was sold and pooled together with other mortgage loans into an asset-backed trust. Wells Fargo Bank, NA is the trustee for that trust.

      Following the second loan modification, Justine made two payments before defaulting, one in March and one in April 2011.

      Justine succeeded Lynnette as the trustee of the OMI Trust and, in 2013, Darwin Long (Long) succeeded Justine as the trustee.

      The court alternatively concluded that the 2006 Quitclaim Deed could be reformed based on the same reasoning. Although Wells Fargo initially requested the remedy of reformation of the 2006 Quitclaim Deed, it later asserted that the court could alternatively reform the New Century Trust Deed. Appellants did not challenge the court's adoption of this alternative remedy, but instead focused their arguments below, as on appeal, on the absence of the OMI Trust as a party to the New Century Trust Deed. The trial court could not reform the New Century Trust Deed, Appellants argued, because that reformation would entail drawing the OMI Trust-a separate legal entity that was not a party to the New Century Trust Deed-into that transaction. Because the trial court ordered reformation of the New Century Trust Deed, we likewise focus our attention on that aspect of the court's decision.

      Where the applicable provision has not substantively changed, we cite the most recent version of the Utah Code for convenience.

      We note that Wells Fargo asserted several claims in its complaint, some of which may have been subject to the Nonclaim Statutes' one-year presentation period. But the decision of the trial court as well as the parties' argument on appeal focuses on Wells Fargo's cause of action for reformation. We accordingly limit our review to that legal theory.

      The parties do not dispute either the applicable statute of limitations or whether it is subject to tolling under the statutory discovery rule. We therefore limit our review to the trial court's finding regarding Wells Fargo's discovery of the facts forming the basis of the mistake claim. See Shiozawa v. Duke , 2015 UT App 40, ¶ 14, 344 P.3d 1174.

      To be certain, Lynnette's 2006 Quitclaim Deed did not effectively convey the Property because the OMI Trust was the title owner at the time and Lynnette listed herself, individually, as the grantor. But the deed was not defective simply because it could not convey title to the Property under the circumstances. Quitclaim deeds "do not imply the conveyance of any particular interest in property" but rather convey only the interest the grantor holds at the time, "be that interest what it may." See Nix v. Tooele County , 101 Utah 84, 118 P.2d 376, 377 (1941) ; see also Holladay Towne Center, L.L.C. v. Brown Family Holdings, L.L.C. , 2011 UT 9, ¶ 31, 248 P.3d 452 (explaining that a "quitclaim deed conveys whatever interest the grantors possess at the time" (quotation simplified) ).


author: HAGEN, Judge:

text:
    STATE of Utah, IN the INTEREST OF C.T., a Person Under Eighteen Years of Age.
    A.T., Appellant, v. State of Utah, Appellee.
    No. 20180435-CA
    Court of Appeals of Utah.
    Filed December 20, 2018
    Sheleigh A. Harding, Attorney for Appellant
    Sean D. Reyes, Carol L.C. Verdoia, and John M. Peterson, Salt Lake City, Attorneys for Appellee
    Jeannine Timothy, Guardian ad Litem
    Judge Diana Hagen authored this Opinion, in which Judges David N. Mortensen and Ryan M. Harris concurred.
    Opinion
   HAGEN, Judge:

¶1 A.T. (Mother) appeals the termination of her parental rights as to C.T. (Child), arguing that termination was not in Child's best interest. Mother relies on this court's recent decision in In re B.T.B. , 2018 UT App 157, 436 P.3d 206, contending that termination was not strictly necessary because the juvenile court could have allowed Mother's parents (Grandparents) to have guardianship of Child. In B.T.B , we concluded that a court may not find that termination of parental rights is strictly necessary until it has considered or explored "less-permanent arrangements," such as custody or guardianship with a family member. Id. ¶ 55. Because the juvenile court correctly applied our holding in B.T.B. by exploring guardianship and custody with Grandparents before terminating Mother's parental rights, we affirm.

BACKGROUND

¶2 Mother is a minor who lives with Grandparents and her five younger siblings. Mother has been a caretaker of her younger siblings since she was eleven. When Mother was thirteen, she was allegedly sex-trafficked by her older sister, and became pregnant and contracted HIV as a result of rape by an unknown man. At that time, the Division of Child and Family Services (DCFS) took custody of Mother.

¶3 Mother gave birth to Child at the age of fourteen and was returned to Grandparents' custody. Shortly after the birth, DCFS received a report that Mother had threatened to kill herself and Child. DCFS found Mother and Child living in a park and placed both in DCFS custody. Mother denied that she intended to harm Child but threatened to harm herself if forced to return to Grandparents' home at that time. DCFS filed abuse, neglect, and dependency petitions as to Mother and Child. At a shelter hearing in Child's case, the juvenile court made findings that Mother had been adjudicated incompetent to stand trial in a previous delinquency matter and that she and Child should remain in DCFS custody.

¶4 Mother and Child were placed by DCFS into a girls' group home. While there, Mother engaged in multiple outbursts in which she made ostensibly aggressive and threatening comments toward Child. Mother also threatened to take her own life again but later testified that she was just angry and that she did not mean what she said. At one point during their stay at the group home, Child was removed from Mother and taken to the hospital because Child was dehydrated. The staff at the group home indicated that Mother needed ongoing supervision "regarding the most basic caregiving skills" for Child. The psychologist who later evaluated Mother drew a similar conclusion, testifying that Mother "does not have a bond with [Child]" and "does not have the cognitive capacity to make decisions for [Child] and keep her safe."

¶5 Mother eventually returned to Grandparents' home, but Child was placed with foster parents, who were friends of Mother and Grandparents. The juvenile court ordered reunification with Mother as the primary permanency goal for Child and adoption as the secondary goal. The court also ordered reunification services for Mother that required her to participate in "therapy to address her past trauma," take medication and monitor the progression of her HIV, attend school, "work with her peer parent to gain parenting skills," and have supervised visitation with Child. DCFS also recommended that Grandparents attend family therapy with Mother.

¶6 Although Mother attended individual therapy, she was never given a psychological evaluation, and Mother and Grandparents did not participate in family therapy. In addition, Mother did not participate in peer parenting and failed to take the medication as prescribed to address her HIV and emotional issues. DCFS explained at Mother's termination trial that it had failed to secure peer parenting resources because peer parenting had been unsuccessful during Mother's previous case.

¶7 After Mother failed to complete reunification services, the court changed the primary permanency goal for Child to permanent custody and guardianship with Grandparents. Guardianship with Grandparents remained the primary permanency goal for only one month. At the end of the one-month period, DCFS requested that the primary goal be changed to adoption, citing a number of ongoing concerns. DCFS expressed concern about Child remaining in Grandparents' home because Grandparents had failed to make sure that Mother attended medical appointments relating to her HIV infection, had failed to ensure that Mother's medication was "filled and taken on a consistent basis," had failed to participate in peer parenting, and had allowed Mother's older sister, who allegedly sex-trafficked and assaulted Mother, back into the home. DCFS was also concerned about Grandparents' financial ability to care for Child and the fact that the home was not kept clean and only had one bathroom. Furthermore, although Grandparents had placed Mother's younger siblings in daycare, there were still hours during the day where Mother was the primary caregiver for her siblings. Thus, if Child was returned to Grandparents' home, Mother would also be caring for Child without supervision during those times. Based on these concerns, the juvenile court changed the primary permanency goal for Child to adoption.

¶8 Following this final change to Child's permanency goal, Child remained in the care of her foster parents. Child bonded with her foster parents and they expressed a desire to adopt. Child's foster parents also expressed a desire that Child continue to have a relationship with her biological family and remain connected to her heritage, "as long as it doesn't cause her anxiety, or angst, or confusion in any way that is harmful to her growth and development."

¶9 A few months after Child's primary permanency goal was changed to adoption, the juvenile court held a trial on the termination of Mother's parental rights. Upon hearing testimony from a psychologist, Mother, DCFS, Child's grandmother, and Child's foster mother, the court entered findings of fact and conclusions of law and an order terminating Mother's parental rights. As grounds for termination, the court found that Mother had neglected Child and was an unfit or incompetent parent. The court also found that guardianship with Grandparents was "untenable" because Mother, "as a child herself, was the child in her home providing the [care-giving] to her younger siblings in the home, and would therefore also, of necessity, be providing the primary care to [Child]," despite Mother's continuing "emotional instability." Because of Mother's unfitness, and after finding that termination of her parental rights was strictly necessary, the court concluded that adoption was in Child's best interest.

¶10 Mother appeals.

ISSUE AND STANDARD OF REVIEW

¶11 Mother appeals the termination of her parental rights as to Child, contending that the juvenile court erred in concluding that termination was in Child's best interest. "The ultimate decision about whether to terminate a parent's rights presents a mixed question of law and fact." In re B.T.B , 2018 UT App 157, ¶ 8, 436 P.3d 206 (quotation simplified). "We afford great deference to the juvenile court's findings of fact and overturn the result only if the facts are against the clear weight of the evidence," but we review the court's "interpretation of the Termination of the Parental Rights Act for correctness." In re A.C.M. , 2009 UT 30, ¶ 8, 221 P.3d 185.

ANALYSIS

¶12 Mother argues that "the juvenile court erred in terminating [her] parental rights without fully exploring whether [Child's] best interests would be better served by awarding permanent custody and guardianship of [Child] to [Grandparents]." "To terminate parental rights, [a] juvenile court must make two separate findings." In re T.E. , 2011 UT 51, ¶ 17, 266 P.3d 739 (quotation simplified). First, a "court must find by clear and convincing evidence that there is at least one statutory ground for termination." Id. ; see also Utah Code Ann. § 78A-6-507 (LexisNexis 2012) (setting forth grounds for termination). Second, a court must "find that termination of the parent's rights is in the best interests of the child." In re A.C.M. , 2009 UT 30, ¶ 23, 221 P.3d 185. Because "the relationship between parent and child is constitutionally protected," In re J.P. , 648 P.2d 1364, 1372 (Utah 1982) (quotation simplified), a court may only terminate parental rights upon a finding that termination is "strictly necessary" to the best interests of the child, Utah Code Ann. § 78A-6-507(1).

¶13 On appeal, Mother does not challenge the juvenile court's finding that there are statutory grounds for termination. Instead, she challenges the court's finding that termination was in Child's best interest and, specifically, that "it was strictly necessary to terminate [her] parental rights given the existence of family members who could have raised [Child]." To support this argument, Mother relies on In re B.T.B , 2018 UT App 157, 436 P.3d 206. In that case, this court addressed "whether [a] juvenile court correctly applied the 'strictly necessary' language to the historical test for termination of parental rights." Id. ¶ 7. In framing our interpretation of the "strictly necessary" language, this court discussed Utah's legal standards for terminating parental rights and our supreme court's interpretation of those standards, noting that "every indication from our legislature and our supreme court demonstrates that our law has had, and continues to have, a rigorous test" that must be met in order to terminate parental rights. Id. ¶ 18. The court observed that the second step of that rigorous test-the best interest analysis-"is broad, and is intended as a holistic examination of all of the relevant circumstances that might affect a child's situation." Id. ¶ 47. Ultimately, the court concluded that "trial courts should analyze whether termination of a child's parent's rights is 'strictly necessary' " "as part of the 'best interest' analysis required by the second element of the two-part [termination] test." Id. ¶ 50.

¶14 After concluding that the "strictly necessary" finding was part of the best interest analysis, the court went on to define the term as it operates in Utah Code section 78A-6-507. Id. ¶¶ 51-53. Looking to dictionary definitions of "strictly" and "necessary" and the legislature's decision to place the two words together in the statute, the court concluded that the statutory requirement that courts find termination of parental rights "strictly necessary" means that "the legislature intended for courts to terminate parental rights only in situations when it is absolutely essential to do so." Id. ¶¶ 52-54. In order to make this finding, courts must examine "all of the relevant facts and circumstances surrounding the child's situation, not just the specific statutory grounds for termination." Id. ¶ 55. As part of this examination, courts must "explore whether other feasible options exist that could address the specific problems or issues facing the family, short of imposing the ultimate remedy of terminating the parent's rights" and "should consider whether other less-permanent arrangements (for instance, a guardianship with a family member) might serve the child's needs just as well in the short term, while preserving the possibility for rehabilitation of the parent-child relationship in the longer term." Id.

¶15 It is this principle-that courts must consider alternatives to termination and adoption such as guardianship with family members-on which Mother's claim of error rests. Mother contends that the juvenile court failed to adequately explore Child's placement with Grandparents as an alternative to termination and adoption. Although Mother acknowledges that the juvenile court set permanent custody and guardianship of Child with Grandparents as a permanency goal for a time, Mother contends that no services were given to Grandparents "to fully explore that goal." Neither the State nor the Guardian ad Litem dispute this contention, and the DCFS caseworker admitted at the termination trial that neither Grandparents nor DCFS made any progress toward the guardianship goal. But nothing in B.T.B. suggests that certain services must be provided before a juvenile court may determine that such alternatives are not viable.

¶16 Instead, B.T.B. simply stands for the proposition that juvenile courts must consider or explore alternatives to termination of parental rights before they may find that termination is "strictly necessary" to the best interests of the child. See id. After this consideration, if a juvenile court determines that no such alternatives are available or articulates supported reasons for rejecting alternatives that do exist, such findings are entitled to deference on appeal. Here, the juvenile court not only considered guardianship with Grandparents, but also made this arrangement a permanency goal in Child's case. It quickly became clear, however, that this arrangement was not in Child's best interest. During the time when custody and guardianship with Grandparents was the permanency goal, the juvenile court found that Mother was still in Grandparents' home and was providing unsupervised child care for the younger siblings despite the fact that Mother's "emotional instability continued." With these circumstances in mind, the court changed the permanency goal to termination and adoption. It determined that Child "could not and should not return to" Mother and Grandparents' home because Mother was unfit to care for Child and Grandparents could not provide adequate supervision. Thus, not only did the juvenile court consider alternatives to termination, the court specifically explored permanent custody and guardianship with family members, but rejected those options for well-articulated reasons.

¶17 Contrary to Mother's argument, nothing in this court's decision in B.T.B requires courts to do anything more than "explore whether other feasible options exist" and "consider whether other less-permanent arrangements ... might serve [Child's] needs just as well" as termination of parental rights. Id. Here, the juvenile court did more than consider and explore an alternative to termination; the court ordered custody and guardianship with Grandparents as a permanency goal. Only after exploring this placement and finding that this arrangement was not in Child's best interest did the court order termination and adoption as Child's permanency goal. Accordingly, because the court did consider and explore alternatives before finding that termination of Mother's parental rights was necessary, we affirm.

CONCLUSION

¶18 We reject Mother's argument that DCFS was required to provide additional services to Grandparents as guardians of Child before the juvenile court could find that termination of Mother's parental rights was strictly necessary, and we affirm the juvenile court's finding that termination of Mother's parental rights was in Child's best interest.

      Mother and Child remained in DCFS custody for a period of weeks. Grandparents later received reunification services and Mother was ultimately returned to their custody. Although Mother's and Child's child protection cases were adjudicated simultaneously, Grandparents' fitness as parents to Mother is not at issue in this appeal.

      Both parties acknowledge that the juvenile court was unable to set the goal as adoption by Grandparents because Grandparents are present in the United States under refugee status and are therefore unable to legally adopt.


author: HARRIS, Judge:

text:
    STATE of Utah, Appellee, v. Calvin Roger BELL, Appellant.
    No. 20161044-CA
    Court of Appeals of Utah.
    Filed December 20, 2018
    Herschel Bullen, Salt Lake City, Attorney for Appellant
    Sean D. Reyes, Salt Lake City, and Jonathan S. Bauer, Attorneys for Appellee
    Judge Ryan M. Harris authored this Opinion, in which Judges Michele M. Christiansen Forster and Kate Appleby concurred.
    Opinion

      Judge Kate A. Toomey has resumed the use of her birth name and is now known as Judge Kate Appleby.

   HARRIS, Judge:

¶1 A jury convicted Calvin Roger Bell of sexually abusing his girlfriend's three-year-old child (Child). Bell appeals his conviction, asserting that the trial court made two erroneous evidentiary rulings that altered the outcome of his trial. We are unpersuaded by Bell's arguments, and affirm his convictions.

¶2 In the summer of 2013, while her mother (Mother) was in a residential drug treatment program, Child disclosed to a staff member there that "her dad" had been "playing sexy" with her. Child was four years old when she made this disclosure. Child had had little contact with her biological father, and the man she referred to as "her dad" was Bell, Mother's live-in boyfriend. Shortly thereafter, Mother arranged for Child Protective Services (CPS) to interview Child. However, Child initially refused to talk to the detective (Detective) assigned to interview her "because he was a boy." Mother later arranged for Child to receive counseling, specifically counseling for sexual abuse and trauma.

¶3 In January 2014, Child disclosed to Mother that Bell had once shown her a pornographic video. At that point, Mother asked CPS to interview Child again, and this time Child agreed to speak to Detective. Child described, in detail, the pornographic video that she said Bell showed her. Child also told Detective that "Dad played sexy with me, and I don't like it." Specifically, Child described two incidents, one in which she claimed that Bell put his "weenie" on her "no-no" where "pee" comes out, and another in which she claimed that Bell "pulled down [her] pants" and put his finger "under [her] bum."

¶4 After interviewing Child, Detective interviewed Bell, who confirmed that he lived with Mother and Child around the time of the alleged abuse. Bell told Detective that Child called him "Daddy" and that he was the "father figure" in the house. He also admitted to having pornography on his phone and his laptop, and told Detective that he and Mother had created pornographic videos of themselves and that Child had "busted" him and Mother "having sex a couple of times." But Bell denied ever purposefully showing pornography to Child and vehemently denied her other allegations of sexual abuse.

¶5 Based on Child's statements, the State charged Bell with one count of rape of a child, a first-degree felony; one count of aggravated sexual abuse of a child, a first-degree felony; and one count of dealing in materials harmful to a minor by an adult, a third-degree felony.

¶6 Prior to trial, Bell filed a motion seeking production of Child's therapy records. Bell noted that Child had undergone therapy between the time of her first meeting with Detective (when she refused to speak with him) and her second meeting with Detective (when she agreed to be interviewed and identified Bell as her abuser), and argued that Child must have been coached during therapy. The State opposed the motion, arguing that Bell had not met his burden of showing that the records were reasonably certain to contain exculpatory information. The trial court denied Bell's motion, stating that his argument "amounts to no more than speculation."

¶7 Also prior to trial, the State filed a notice of its intent to introduce the video recording of Child's interview with Detective, pursuant to rule 15.5 of the Utah Rules of Criminal Procedure. Bell objected, arguing that the State had not met the requirements of rule 15.5, and asserting that introduction of the recording would violate his Sixth Amendment right to confront witnesses. After a hearing, the court ruled that the recording complied with rule 15.5, and that confrontation was not an issue so long as Child was available to be cross-examined at trial.

¶8 At trial, as its first witness, the State called Child to testify in person. Child identified Bell and testified that Bell had lived with her and Mother and that she had called him "Daddy." Child described how Bell had shown her a pornographic video, describing the video in similar detail as she had in her interview with Detective. Child then stated that after the video, Bell "took off his clothes, and then ... he went up and down on me." Child also described an incident with Bell where "I was on his lap. He put his finger like under my butt, and then, like, did his finger like this," making a hooking or beckoning motion. After the State's direct examination of Child, Bell was able to cross-examine Child without limitation from the court.

¶9 The State called Detective as its final witness. Detective testified that, at their first meeting in the summer of 2013, Child did not want to talk to him, so he did not interview her that day, but that at their second meeting, in January 2014, she was willing to talk. Detective described this second interview, and the State asked the court for permission to play the video recording of the interview. Bell renewed his previous objection to the recording's admission, but did not make any new objections. Over Bell's renewed objection, the trial court allowed the State to play the video recording of Child's interview.

¶10 Detective also testified about his interview with Bell, and described some of the questions he had posed and some of the answers Bell had given. The trial court denied Bell's request to play for the jury an audio recording of Bell's interview with Detective. On cross-examination, however, the court allowed Bell's counsel wide latitude to read from the transcript of the interview, and counsel asked Detective about many of the questions he posed and about Bell's responses. In particular, Bell's counsel elicited from Detective the fact that Bell had vehemently denied Child's accusations of sexual abuse.

¶11 After Detective's testimony, the State rested, and Bell took the stand in his own defense and as his sole witness. Bell again denied that he had ever sexually abused Child or showed her pornography. The jury, after deliberation, convicted Bell of aggravated sexual abuse of a child and dealing in materials harmful to a minor, but acquitted him of rape of a child.

¶12 Bell now appeals, and asks us to consider two issues. First, he argues that the trial court erred when it declined to conduct an in camera review of Child's therapy records under rule 506 of the Utah Rules of Evidence. "The existence of a privilege or an exception thereto is a question of law, which we review for correctness." McCloud v. State , 2013 UT App 219, ¶ 7, 310 P.3d 767 (quotation simplified). Second, Bell argues that the trial court erred in admitting into evidence the video recording of Child's interview with Detective, both under the Confrontation Clause of the United States Constitution, as interpreted by Crawford v. Washington , 541 U.S. 36, 124 S.Ct. 1354, 158 L.Ed.2d 177 (2004), and because allowing the State to present the recorded interview to the jury after Child had already testified subjected him to a "double whammy" that had a "double-barreled impact on the jury." Whether hearsay is admissible under Crawford is a question of law reviewed for correctness. State v. Rhinehart , 2006 UT App 517, ¶ 8, 153 P.3d 830. And "[w]hether the trial court correctly admitted the videotaped interviews into evidence pursuant to rule 15.5 [of the Utah Rules of Criminal Procedure] is a question of law that we review for correctness." State v. Cruz , 2016 UT App 234, ¶ 16, 387 P.3d 618.

¶13 A defendant seeking in camera review of a victim's privileged therapy records under rule 506(d)(1) of the Utah Rules of Evidence must convince the trial court of three things: first, that the victim "suffers from a physical, mental, or emotional condition"; second, that the condition is "an element of any claim or defense" raised by the parties; and third, that there is a "reasonable certainty that the mental health records will contain exculpatory evidence favorable to the defense." State v. J.A.L. , 2011 UT 27, ¶ 48, 262 P.3d 1 (quotation simplified); see also Utah R. Evid. 506(d)(1) ; McCloud , 2013 UT App 219, ¶¶ 10, 14, 310 P.3d 767. Even assuming, without deciding, that Bell could meet the first two requirements, Bell's argument founders on the third, because he cannot demonstrate a "reasonable certainty"

that the sought-after records contain exculpatory evidence.

¶14 The "reasonable certainty" requirement "is a stringent test, necessarily requiring some type of extrinsic indication" that the victim's records contain exculpatory evidence. McCloud , 2013 UT App 219, ¶ 14, 310 P.3d 767 (quotation simplified). Indeed, "reasonable certainty" lies "on the more stringent side of 'more likely than not.' " State v. Blake , 2002 UT 113, ¶ 20, 63 P.3d 56. "The difficulty in meeting this test is deliberate and prudent in light of the sensitivity of these types of records and the worsening of under-reporting problems in the absence of a strong privilege." Id. ¶ 19. As examples of the sort of "extrinsic indication" that would satisfy the test, our supreme court has identified "independent allegations made by others that a victim has recanted, or extrinsic evidence of some disorder that might lead to uncertainty regarding a victim's trustworthiness." Id. ¶ 22 ; see also State v. Worthen , 2009 UT 79, ¶¶ 39-42, 222 P.3d 1144 (determining that a defendant had met the test when he produced other medical records as well as the victim's own journal entries that indicated that the victim held an extreme bias against the defendant).

¶15 Bell provides nothing close to the amount of extrinsic evidence required to meet the "reasonable certainty" standard. Indeed, he relies on no extrinsic evidence at all. Instead, he merely asserts that, because Child initially would not speak to Detective, then underwent therapy, and then later spoke with Detective, a "reasonable likelihood exists that something in the therapy" would be exculpatory and that "[w]hatever intervened during [therapy] is just as likely to have led to information which is exculpatory as it is to that which is inculpatory." This is insufficient. The fact that a victim was reluctant to speak to law enforcement before therapy but less reluctant after therapy does not necessarily raise doubts about the victim's trustworthiness, and certainly does not indicate a "reasonable certainty" that something untoward occurred during the therapy sessions. We therefore reject Bell's first argument.

¶16 Bell's next contention is that the trial court erred when it allowed the State to play for the jury the video recording of Child's interview with Detective. Bell makes two arguments in this regard. First, he asserts that the court's decision to allow introduction of the recorded interview violated his rights under the Confrontation Clause. The Sixth Amendment of the United States Constitution guarantees that, "[i]n all criminal prosecutions, the accused shall enjoy the right ... to be confronted with the witnesses against him." U.S. Const. amend. VI. In this case, however, Bell had the opportunity to confront and cross-examine Child. The State called Child as its first witness, and Bell had full opportunity to cross-examine Child following the State's direct examination. Bell offers no indication that he asked for permission to re-cross Child after the interview recording was played for the jury; he certainly does not assert that he was denied an opportunity to ask Child questions at trial about the recorded interview. Under these circumstances, Bell's rights under the Confrontation Clause have not been violated; indeed, Crawford itself makes clear that "when the declarant appears for cross-examination at trial, the Confrontation Clause places no constraints at all on the use of his prior testimonial statements" and "does not bar admission of a statement so long as the declarant is present at trial to defend or explain it." Crawford , 541 U.S. at 59 n.9, 124 S.Ct. 1354 ; see also Cruz , 2016 UT App 234, ¶ 29, 387 P.3d 618 (stating that "one who chooses not to cross-examine a witness cannot complain that he was denied his right to cross-examine or confront the witness").

¶17 Finally, Bell argues that the trial court subjected him to a "double whammy" by allowing the State to play the recorded interview for the jury after Child had already testified live. Bell points out that part of the justification for allowing recorded interviews of child witnesses to be played for juries is to spare the child witness the trauma of testifying again, and notes that this justification is not present where the child witness has already testified. But like the defendant in State v. Burnside , 2016 UT App 224, 387 P.3d 570, Bell did not raise this specific objection below. See id. , ¶¶ 9, 44-49 (the State called the victim to testify first, then later during the interviewer's testimony the State played the entire recorded interview, and the defendant "objected only to the quality of the recording," and as a result we reviewed the so-called "double whammy" issue only for plain error). "In order to preserve an issue for appeal, it must be specifically raised ... to a level of consciousness before the trial court so as to give the trial court an opportunity to address the claimed error, and if appropriate, correct it." State v. Bruun , 2017 UT App 182, ¶ 37, 405 P.3d 905 (quotation simplified). Bell's pre-trial objections to the video interview were based on the Confrontation Clause, and on an assertion that the video recording did not comply with the requirements of rule 15.5 of the Utah Rules of Criminal Procedure. Bell did not give the trial court an opportunity to rule on his specific "double whammy" objection. See State v. Low , 2008 UT 58, ¶ 17, 192 P.3d 867 ("[I]f a party makes an objection at trial based on one ground, this objection does not preserve for appeal any alternative grounds for objection."). If a defendant "did not preserve his claims before the trial court, he must establish plain error, ineffective assistance of counsel, or exceptional circumstances to warrant review by this court." State v. Kozlov , 2012 UT App 114, ¶ 28, 276 P.3d 1207. But in this case, Bell does not ask us to review this issue for plain error, ineffective assistance of counsel, or exceptional circumstances, and we therefore decline to address any such arguments. See State v. Morris , 2017 UT App 112, ¶ 12 n.5, 400 P.3d 1183.

¶18 Affirmed.

      Rule 15.5 allows the admission upon motion, in a "case concerning a charge of child abuse or of a sexual offense against a child," of an "oral statement of a victim or other witness younger than 14 years of age which was recorded prior to the filing of an information or indictment," so long as the movant can demonstrate "good cause" as well as the existence of eight other specific requirements. See Utah R. Crim. P. 15.5(a). Among other particulars, the rule requires that both the child and the person who conducted the interview be available for cross-examination, that the recording not have been altered, and that "the court views the recording before it is shown to the jury and determines that it is sufficiently reliable and trustworthy and that the interest of justice will best be served by admission of the statement into evidence." Id. R. 15.5(a)(8).

      In his briefing on appeal, Bell initially raised a third issue, namely, whether the trial court violated rule 106 of the Utah Rules of Evidence when it refused to allow him to play for the jury the audio recording of his interview with Detective. At oral argument, however, Bell acknowledged that this argument is foreclosed by the Utah Supreme Court's recent opinion in State v. Sanchez , 2018 UT 31, 422 P.3d 866, where the court stated that "mere testimony about a conversation that happened to also be recorded is insufficient to trigger rule 106." Id. ¶ 23. Accordingly, we do not discuss this issue further.

      "In camera" is a term that means "in the judge's private chambers" or "in the courtroom with all spectators excluded." See State v. Peraza , 2018 UT App 68, ¶ 8 n.4, 427 P.3d 276 (quotation simplified), cert. granted , 429 P.3d 460 (Utah 2018). In essence, in camera review refers to a private examination of documents by a judge out of the view of the parties.

      In response to Bell's argument that Utah's "reasonable certainty" test for obtaining copies of a victim's privileged therapy records is too strict and inconsistent with Pennsylvania v. Ritchie , 480 U.S. 39, 107 S.Ct. 989, 94 L.Ed.2d 40 (1987), we note that we are duty-bound to follow the mandates of our state supreme court, especially when our supreme court is interpreting the Utah (as opposed to the Federal) Rules of Evidence. See Ortega v. Ridgewood Estates LLC , 2016 UT App 131, ¶ 30, 379 P.3d 18 ("We are bound by vertical stare decisis to follow strictly the decisions rendered by the Utah Supreme Court." (quotation simplified) ). If Bell believes that the "reasonable certainty" test is inappropriate, he is free to address that question to the Utah Supreme Court.

      We also note that, in Burnside , we determined that the trial court had not plainly erred under similar circumstances by allowing the presentation of a video-recorded interview after the victim had already testified. See State v. Burnside , 2016 UT App 224, ¶ 48, 387 P.3d 570.

      Bell also asks us to apply the cumulative error doctrine, but such an argument is only considered "when this court has determined that multiple errors occurred below." State v. King , 2017 UT App 43, ¶ 15, 392 P.3d 997. Because we find no error in the trial court proceedings, we need not further address Bell's cumulative error argument.


text:
    Ronald A. BAKER and Joyce Baker, Petitioners, v. FIREMAN'S FUND INSURANCE COMPANY, et al" Respondents.
    No. 96446-7
    Supreme Court of Washington.
    DATED at Olympia, Washington, January 29, 2019.
    ORDER
   ¶ 1 Department I of the Court, composed of Chief Justice Fairhurst and Justices Johnson, Owens, Wiggins and Gordon McCloud, considered this matter at its January 8, 2019, Motion Calendar and entered an order continuing this matter to the February 7, 2019, En Banc Conference. After further consideration of this matter, the Department unanimously agreed that the following order be entered.

¶ 2 Now, therefore, it is hereby

¶ 3 ORDERED:

¶ 4 That the petition for review is denied.

For the Court

/s/ Fairhurst, CJ. CHIEF JUSTICE