author: DAVIS, Judge: JACKSON, Judge

text:
    2003 UT App 377
    Jean LeVANGER and Rebecca LeVanger, Plaintiffs and Appellees, v. HIGHLAND ESTATES PROPERTIES OWNERS ASSOCIATION, INC.; et al., Defendants and Appellant.
    No. 20020090-CA.
    Court of Appeals of Utah.
    Nov. 6, 2003.

      Paul M. Belnap and Andrew D. Wright, Strong & Hanni, Salt Lake City, for Appellant.
    E. Jay Sheen, Robinson & Sheen, LLC, South Jordan, for Appellees.
    Before Judges JACKSON, BENCH, and DAVIS.
   OPINION

DAVIS, Judge:

¶ 1 Highland Estates Properties Owners Association, Inc. (Highland Estates) appeals a trial court order granting Jean and Rebecca LeVanger (the LeVangers) attorney fees and costs. We reverse and remand.

BACKGROUND

¶ 2 The LeVangers are homeowners and members of Highland Estates. On January 21, 1997, the LeVangers filed a derivative action under rule 23.1 of the Utah Rules of Civil Procedure against Highland Estates and members of its Board of Trustees. The LeVangers’ verified complaint alleged that the Board of Trustees had breached its fiduciary duty to Highland Estates and the members of Highland Estates by improperly amending Highland Estates’s covenants, conditions, and restrictions (CC & Rs). The LeVangers’ action sought damages, attorney fees, and rescission of the improper amendments to Highland Estates’s CC & Rs.

¶ 3 Prior to the scheduled trial date, Highland Estates filed a motion for summary judgment on several grounds. The trial court held a hearing on this motion and made its ruling from the bench. On May 28, 1998, the trial court entered a written order, memorializing this ruling. The court granted the motion on the issue of the voting and approval process used in amending Highland Estates’s CC & Rs, concluding that the actions taken by the Board of Trustees in amending the CC & Rs were “proper” and that the mail-in ballot voting procedure “substantially complied with [Highland Estates’s] Bylaws and [CC & Rs] in place.” The trial court denied the motion on the other grounds, including the LeVangers’ lack of standing under rule 23.1. After making its ruling from the bench at the summary judgment hearing, the trial court and the parties discussed the LeVangers’ intention to seek certification of the trial court’s decision as final and appealable under rule 54(b) of the Utah Rules of Civil Procedure.

¶ 4 On March 3, 1999, the trial court entered an order and rule 54(b) certification. Although most of the order focused on a motion to reconsider filed by the LeVangers, it also contained the rule 54(b) certification, which stated that the trial court’s May 28, 1998 order was certified as final and appeal-able under rule 54(b).

¶ 5 Pursuant to the trial court’s rule 54(b) certification, the LeVangers filed a notice of appeal. This court considered the LeVan-gers’ appeal and issued a written opinion on April 13, 2000. See Levanger v. Vincent, 2000 UT App 103, 3 P.3d 187 (LeVanger I). In LeVanger I, we held that the actions taken by the Board of Trustees in amending Highland Estates’s CC & Rs, including the use of mail-in ballots, were improper. See id. at ¶¶ 12-19. Accordingly, we reversed the trial court’s grant of Highland Estates’s motion for summary judgment on the issue of the voting and approval process used in amending Highland Estates’s CC & Rs. See id. at ¶ 23.

¶ 6 Based upon this court’s decision in LeVanger I, the LeVangers filed a motion for summary judgment on remand. Among other things, this motion sought an award of attorney fees and costs incurred by the Le-Vangers in bringing the derivative action. Highland Estates then filed a motion for an evidentiary hearing on several issues, including: (1) whether the LeVangers had standing under rule 23.1; (2) whether the LeVangers’ derivative action had conferred a substantial benefit upon Highland Estates; and (3) whether the LeVangers’ attorney fees were reasonable. The trial court conducted a hearing on both motions on June 26, 2001. After this hearing, a trial was scheduled for September 19, 2001, to address the unresolved issues in the case. At trial, both parties presented evidence to the trial court and, at the conclusion of trial, were instructed by the trial court to submit written closing arguments.

¶ 7 In a written ruling dated November 27, 2001, and an order entered on December 10, 2001, the trial court ruled on the unresolved issues in the case. The trial court determined that the LeVangers had standing as derivative plaintiffs under rule 23.1 because: (1) the issue of the LeVangers’ standing “was effectively, if not expressly, decided by” an earlier trial court order which denied Highland Estates’s motion for summary judgment on that issue; (2) Highland Estates did not raise and the LeVanger I court did not address the issue in LeVanger I, and when the LeVanger I court reached the merits of the appeal, its “acceptance of [the LeVangers’] standing to bring the action [was] implicit in” its decision; and (3) Highland Estates did not “raise the issue at the Court of Appeals, or ... file an appropriate motion on remand, both [of which] support a conclusion that [Highland Estates] did, in fact, waive the standing issue.” The trial court also determined that the LeVangers’ derivative action conferred a substantial benefit upon Highland Estates and, therefore, that the LeVan-gers were entitled to $41,327.15 in attorney fees and costs to be paid by Highland Estates. Highland Estates appeals.

ISSUES AND STANDARDS OF REVIEW

¶ 8 First, Highland Estates argues that the trial court erred in concluding that the LeVangers had standing as derivative plaintiffs under rule 23.1 of the Utah Rules of Civil Procedure.

[T]he question of whether a given individual or association has standing to request a particular relief is primarily a question of law, although there may be factual findings that bear on the issue. We will review such factual determinations made by a trial court with deference. State v. Pena, 869 P.2d 932, 935-36 (Utah 1994). Because of the important policy considerations involved in granting or denying standing, we will closely review trial court determinations of whether a given set of facts fits the legal requirements for standing, granting minimal discretion to the trial court. Id. at 938, 939.

Kearns-Tribune Corp. v. Wilkinson, 946 P.2d 372, 373-74 (Utah 1997).

¶ 9 Second, Highland Estates argues that the trial court erred in concluding that the LeVangers’ derivative action conferred a substantial benefit on similarly situated members of Highland Estates. The trial court’s conclusion on this issue was the basis for its award of attorney fees and costs to the LeVangers. The determination of whether a substantial benefit is conferred in the context of a derivative action is a mixed question of law and fact, which requires a trial court to determine “whether a given set of facts comes within the reach of a given rule of law.” State v. Pena, 869 P.2d 932, 936 (Utah 1994). “Although we review legal questions for correctness, we may still grant a trial court discretion in its application of the law to a given fact situation.” Jeffs v. Stubbs, 970 P.2d 1234, 1244 (Utah 1998).

ANALYSIS

I. Standing

¶ 10 Highland Estates argues that the trial court erred in concluding that the LeVangers had standing as derivative plaintiffs under rule 23.1 of the Utah Rules of Civil Procedure. Rule 23.1 provides, in relevant part, that a “derivative action may not be maintained if it appeal's that the plaintiff does not fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association.” Utah R. Civ. P. 23.1. The trial court made several rulings in support of its determination that the LeVangers had standing under rule 23.1.

¶ 11 First, the trial court determined that the issue of the LeVangers’ standing under rule 23.1 “was effectively, if not expressly, decided by” an earlier trial court order which denied Highland Estates’s motion for summary judgment on this issue. In that order, the trial court ruled that “[biased upon the record before the [c]ourt, there are insufficient facts and insufficient grounds to, as a matter of law, determine that plaintiffs are inappropriate parties to bring this action.”

¶ 12 Summary judgment is appropriate only when “there is no genuine issue as to any material fact and [when] the moving party is entitled to judgment as a matter of law.” Utah R. Civ. P. 56(c). This standard is set out, in identical form, in rule 56(c) of both the Utah Rules of Civil Procedure and Federal Rules of Civil Procedure. See Fed. R.Civ.P. 56(c); Utah R. Civ. P. 56(c). Accordingly, “we freely refer to authorities which have interpreted the federal rule.” Gold Standard, Inc. v. American Barrick Res. Corp., 805 P.2d 164, 168 (Utah 1990); see Tucker v. State Farm Mut. Auto. Ins. Co., 2002 UT 54,¶ 7 n. 2, 53 P.3d 947 (“Interpretations of the Federal Rules of Civil Procedure are persuasive where the Utah Rules of Civil Procedure are ‘substantially similar’ to the federal rules.” (citations omitted)).

¶ 13 The denial of a motion for summary judgment on an issue is not a final decision on the merits of that issue. See Switzerland Cheese Ass’n v. E. Horne’s Mkt., Inc., 385 U.S. 23, 25, 87 S.Ct. 193, 195, 17 L.Ed.2d 23 (1966) (“[T]he denial of a motion for a summary judgment because of unresolved issues of fact does not settle or even tentatively decide anything about the merits of the claim. It is strictly a pretrial order that decides only one thing — that the case should go to trial.”); 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2712 (3d ed. 1998 & Supp.2003) (“[A] denial of summary judgment is not a decision on the merits; it simply is a decision that there is a material factual issue to be tried.”). Therefore, we conclude that the trial court erred in determining that the order denying Highland Estates’s motion for summary judgment was a decision on the merits of the issue of the LeVangers’ standing under rule 23.1.

¶ 14 Second, the trial court determined that Highland Estates should have raised the issue of the LeVangers’ standing under rule 23.1 before this court in LeVanger I. The trial court further determined that because our decision in LeVanger I did not address the LeVangers’ standing, and because we reached the merits of the appeal, our “acceptance of [the LeVangers’] standing to bring the action is implicit in” our decision in LeVanger I. We disagree. The prior trial judge’s March 3, 1999 “Order and Rule 54(b) Certification” was not a model of clarity in designating the claims certified to this court under rule 54(b) of the Utah Rules of Civil Procedure for purposes of LeVanger I. However, after reviewing this rule 54(b) certification and the record, we conclude that the trial court and the parties certified only the issue of the voting and approval process used in amending Highland Estates’s CC & Rs. Because we conclude that the trial court’s denial of Highland Estates’s motion for summary judgment on the issue of the LeVan-gers’ standing under rule 23.1 was not part of the rule 54(b) certification, Highland Estates was not required to address that issue in LeVanger I. Therefore, we conclude that the trial court erred when it determined that Highland Estates was required to raise the issue of the LeVangers’ standing under rule 23.1 before this court in LeVanger I. It follows that the trial court also erred when it determined that this court’s decision in Le-Vanger I implicitly granted the LeVangers standing under rule 23.1.

¶ 15 Third, although the trial court stated that it “believe[d]” its reasoning up to this point was “dispositive of the standing issue,” it went on to determine that Highland Estates’s “failure to raise the issue at the Court of Appeals, or to file an appropriate motion on remand, both support a conclusion that [Highland Estates] did, in fact, waive the standing issue.” Again, we disagree. As we noted earlier, Highland Estates was not required to address the issue of the LeVan-gers’ standing in LeVanger I. Further, the record shows that on remand after LeVanger I, Highland Estates filed both a motion for an evidentiary hearing and a motion for directed verdict based on several grounds, including the issue of the LeVangers’ standing under rule 23.1. Finally, there is nothing in the record that suggests Highland Estates ever waived the issue of standing. Accordingly, we conclude that the trial court erred in determining that Highland Estates waived the issue of the LeVangers’ standing under rule 23.1.

¶ 16 For the foregoing reasons, we hold that the trial court erred in concluding that the LeVangers had standing as derivative plaintiffs under rule 23.1 and remand the case with directions that the trial court conduct further proceedings on this issue. To assist the trial court and the parties on remand, we provide the following guidance under rule 23.1. See Williamson v. Williamson, 1999 UT App 219,¶ 12, 983 P.2d 1103 (providing guidance to trial court on remand).

¶ 17 Although rule 23.1 requires that the plaintiff “fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association,” Utah R. Civ. P. 23.1, it does not address the burden of proof. Utah cases have not addressed this specific issue under rule 23.1. However, because rule 23.1 of both the Utah Rules of Civil Procedure and Federal Rules of Civil Procedure are substantively identical, see Utah R. Civ. P. 23.1 Compiler’s Notes (“This rule is identical in substance to Rule 23.1, [Federal Rules of Civil Procedure].”), we again “freely refer to authorities which have interpreted the federal rule.” Gold Standard, Inc. v. American Barrick Res. Corp., 805 P.2d 164, 168 (Utah 1990); see Barton v. Utah Transit Auth., 872 P.2d 1036, 1039 n. 5 (Utah 1994) (“This court recognizes the persuasiveness of federal interpretations when the state and federal rules are similar and few Utah cases deal with the rule in question.”).

¶ 18 The Court of Appeals for the Fifth Circuit addressed the burden of proof issue under rule 23.1 of the Federal Rules of Civil Procedure in Smallwood v. Pearl Brewing Co., 489 F.2d 579 (5th Cir.1974). After quoting the relevant text of this rule, the Small-wood court stated:

Although the district court is thus empowered to dismiss a derivative action should it appear that the plaintiff does not adequately represent the shareholders in enforcing the rights of the corporation, a finding in the alternative is not required before a derivative action may go forward. The burden is on the defendants to obtain a finding of inadequate representation....

Id. at 592-93 n. 15 (citation omitted). Other federal courts have consistently followed the proposition set forth in Smallwood that the burden is on the defendant to show that the plaintiff is an inadequate representative under rule 23.1 of the Federal Rules of Civil Procedure, and, therefore, does not have standing. See Lewis v. Curtis, 671 F.2d 779, 788 (3d Cir.1982) (“The burden is on the defendant to demonstrate that the representation will be inadequate.” (citing Smallwood, 489 F.2d at 592 n. 15)); Abeloff v. Barth, 119 F.R.D. 332, 335 (D.Mass.1988) (noting that the requirement of a verified complaint under rule 23.1 of the Federal Rules of Civil Procedure does not require plaintiffs to “allege or demonstrate” that they are adequate representatives; rather, the burden is on defendants to prove that plaintiffs are inadequate representatives); Guenther v. Pacific Telecom, Inc., 123 F.R.D. 341, 344 (D.Or.1987) (“The burden is on the defendants to show that [plaintiff] is an inadequate representative.” (citing Smallwood, 489 F.2d at 592 n. 15)).

¶ 19 We believe that where, as here, the plaintiffs have filed a verified complaint containing the proper allegations as required by rule 23.1 of the Utah Rules of Civil Procedure, the analysis under the federal rule is appropriate, and herewith adopt the same.

II. Substantial Benefit

¶ 20 Highland Estates argues that the trial court erred in concluding that the LeVangers’ derivative action conferred a substantial benefit on similarly situated members of Highland Estates. The trial court’s conclusion on this issue was the basis for its award of attorney fees and costs to the LeVangers. “The general rule in Utah ... is that attorney fees cannot be recovered by a prevailing party unless a statute or contract authorizes such an award.” Stewart v. Utah Pub. Serv. Comm’n, 885 P.2d 759, 782 (Utah 1994). “However, in the absence of a statutory or contractual authorization, a court has inherent equitable power to award reasonable attorney fees when it deems it appropriate in the interest of justice and equity.” Id. One of the recognized situations in which a court may award attorney fees under this equitable power is “when a plaintiffs litigation confers a substantial benefit on the members of an ascertainable class.” Id. at 782-83 n. 18 (quotations and citations omitted). “[T]he substantial benefit exception ... permits the award of [attorney] fees when the litigant, proceeding in a representative capacity, obtains a decision resulting in the conferral of a substantial benefit of a pecuniary or nonpecuniary nature” upon the members of the ascertainable class or group. Id. (quotations and citations omitted).

¶21 The substantial benefit doctrine is well recognized in Utah and we are persuaded that it is appropriate in the context of a derivative action under rule 23.1 of the Utah Rules of Civil Procedure. We look again to federal court decisions interpreting the substantial benefit doctrine in the context of derivative actions brought under rule 23.1 of the Federal Rules of Civil Procedure. See Tucker v. State Farm Mut. Auto. Ins. Co., 2002 UT 54,¶ 7 n. 2, 53 P.3d 947 (“Interpretations of the Federal Rules of Civil Procedure are persuasive where the Utah Rules of Civil Procedure are ‘substantially similar’ to the federal rules.” (citations omitted)); Barton v. Utah Transit Auth., 872 P.2d 1036, 1039 n. 5 (Utah 1994) (“This court recognizes the persuasiveness of federal interpretations when the state and federal rules are similar and few Utah eases deal with the rule in question.”).

¶ 22 Federal courts have applied the substantial benefit doctrine as a way of awarding attorney fees and costs to plaintiffs in derivative suits brought under rule 23.1 of the Federal Rules of Civil Procedure. See Zucker v. Westinghouse Elec. Corp., 265 F.3d 171, 175-76 (3d Cir.2001); Kaplan v. Rand, 192 F.3d 60, 69 (2d Cir.1999).

¶ 23 Federal courts have also recognized that an award of attorney fees and costs to a derivative plaintiff is justified “where the derivative action results in a substantial non-monetary benefit to a corporation.” Kaplan, 192 F.3d at 69; see Zucker, 265 F.3d at 176 (quoting same language from Kaplan, 192 F.3d at 69). In a context similar to a derivative action, federal courts have held that the promotion and vindication of shareholders’ voting rights is a substantial benefit to the corporation. See Mills v. Electric Auto-Lite Co., 396 U.S. 375, 396-97, 90 S.Ct. 616, 627-28, 24 L.Ed.2d 593 (1970) (holding, in suit brought by shareholders against corporation under federal securities laws, that plaintiffs conferred substantial benefit upon corporation by vindicating statutory policy stressing “the importance of fair and informed corporate suffrage”); Amalgamated Clothing & Textile Workers Union v. Wal-Mart Stores, 54 F.3d 69, 71-72 (holding, in suit brought by shareholders against corporation under federal securities laws, “that the promotion of corporate suffrage regarding a significant policy issue confers a substantial benefit regardless of the percentage of votes cast for or against the proposal at issue”). However, a

substantial benefit must be something more than'technical in its consequence and be one that accomplishes a result which corrects or prevents an abuse which would be prejudicial to the rights and interests of the corporation or affect the enjoyment or protection of an essential right to the stockholder’s interest.

Mills, 396 U.S. at 396, 90 S.Ct. at 627 (quotations and citation omitted).

¶ 24 We agree with the holdings of these cases and conclude that a non-monetary benefit, including the promotion and vindication of shareholders’ voting rights, can be a substantial benefit in the context of a derivative action brought under rule 23.1 of the Utah Rules of Civil Procedure. We also agree with the trial court’s observation that it would have been inappropriate to attempt to offset the non-monetary benefit conferred upon Highland Estates against the LeVan-gers’ attorney fees. As noted by the trial court, if courts were to engage in this process, it would discourage derivative plaintiffs from bringing actions to confer a substantial, non-monetary benefit upon a corporation or association because of the possibility that they would be required to bear the burden of all or part of the attorney fees incurred in bringing the action.

¶ 25 In this case, the court determined that the non-monetary benefit conferred upon Highland Estates by the Le-Vangers’ derivative action was a substantial benefit, thereby justifying its award of attorney fees and costs to the LeVangers. Because non-monetary benefits may satisfy the benefit requirement under the substantial benefit doctrine, see Zucker, 265 F.3d at 176; Kaplan, 192 F.3d at 69; Stewart v. Utah Pub. Serv. Comm’n, 885 P.2d 759, 782 (Utah 1994), the only remaining issue for us to consider is whether the benefit conferred was substantial. In LeVanger I, this court concluded that Highland Estates and its Board of Trustees were required to use the proper voting procedures to amend its CC & Rs, and that requiring them to do so “protected] the interests of the members of [Highland Estates].” Levanger v. Vincent, 2000 UT App 103,¶ 23, 3 P.3d 187. This result of the LeVangers’ derivative action conferred a benefit upon Highland Estates and its members that is “more than technical in its consequence and ... that accomplishes a result which corrects or prevents an abuse which would be prejudicial to the rights and interests of the corporation or affect the enjoyment or protection of an essential right to the stockholder’s interest.” Mills, 396 U.S. at 396, 90 S.Ct. at 627 (quotations and citation omitted). This benefit conferred upon Highland Estates by the Le-Vangers’ derivative action is also consistent with the federal cases holding, in a similar context, that the promotion and vindication of shareholders’ voting rights is a substantial benefit to the corporation. See id., 396 U.S. at 396-97, 90 S.Ct. at 627-28; Amalgamated Clothing, 54 F.3d at 71-72. Therefore, we conclude that the trial court properly determined that the LeVangers’ derivative action conferred a substantial benefit upon Highland Estates.

CONCLUSION

¶ 26 We reverse the trial court’s determination that the LeVangers had standing as derivative plaintiffs under rule 23.1 of the Utah Rules of Civil Procedure and remand for further proceedings on that issue, consistent with this opinion. If the LeVangers have standing under rule 23.1, the trial court’s determination that the LeVangers’ derivative action conferred a substantial benefit upon Highland Estates is sustainable.

¶ 27 I CONCUR: RUSSELL W. BENCH, Judge.

JACKSON, Judge

(dissenting):

¶ 28 I write separately a different analysis and disposition than my colleagues.

BACKGROUND

¶ 29 Jean and Rebecca LeVanger are homeowners. They were twenty-year members of the Highland Estates Property Owners Association (the Association), a Utah nonprofit corporation, when they filed this suit. In 1993 and 1994 the Highland Estates Board of Trustees (the Board) concluded that in order to improve the Association’s productivity and efficiency, the Association’s originally recorded restrictive covenants (hereinafter CC & Rs) should be amended. Soon after, an amended version of the CC & Rs was drafted and put to a homeowners vote at the Association’s annual homeowner meeting held in June of 1994. The LeVangers were not present at that meeting. All of the Association members who did attend, more than forty in number, unanimously voted to adopt the amended CC & Rs. However, because there were not enough members present to constitute a quorum, the Board, as well as the members in attendance, concluded that the most effective way to maximize member participation in the vote was by mail-in ballots.

¶ 30 Letters were sent to all of the Association’s members notifying them that the amended CC & Rs had been approved by the Board of Trustees and had received unanimous ratification by the members who attended the June 1994 homeowners’ meeting. A copy of the amended CC & Rs was included with the letter of notification as well as an instruction that the mail-in ballots be returned no later than November 30, 1994. The Board hand-delivered to the LeVangers their mail-in ballot and a copy of the proposed CC & Rs. The LeVangers did not express any objection to the amended CC & Rs, either by voicing disapproval at any of the Association’s meetings, or by simply mailing in their ballot indicating their opposition.

¶ 31 On September 28, 1995, Highland Estates held its annual homeowner meeting where they announced that the amended CC & Rs had been approved by a super-majority of members. Again, the LeVangers did not attend in person or by representation. No explanation was presented as to why the LeVangers failed to attend both the 1994 and 1995 homeowner meetings where the amended CC & Rs were first presented, and then later adopted. However, the record does show that the LeVangers were not in good standing with the Association. They owed the Association past due annual assessment fees that had begun accruing in 1991, the year they first refused to pay them. Consequently, the Association filed a lawful lien against the LeVangers’ property in an attempt to collect the monies due and owing. The LeVangers took no action whatsoever regarding the amended CC & Rs until after they had been ratified and officially recorded.

¶ 32 On January 21, 1997, the LeVangers filed a derivative action against Highland Estates and members of its Board of Trustees pursuant to rule 23.1 of the Utah Rules of Civil Procedure. They alleged in them complaint that the Board had breached its fiduciary duty to Highland Estates and its members by using improper voting procedures to amend and adopt the new CC & Rs. The LeVangers sued for damages, attorney fees, and rescission of the amended CC & Rs.

ISSUE AND STANDARD OF REVIEW

¶ 33 Highland Estates seeks review of rulings on standing by two different trial court judges. The first ruling followed a hearing on Highland Estates’s motion for summary judgment. The trial judge ruled that “based upon the record before the court, there are insufficient facts and insufficient grounds to, as a matter of law, determine that Plaintiffs are inappropriate parties to bring this action.” Later, before another trial judge, Highland Estates presented additional evidence regarding standing. The LeVangers did not submit any evidence. Rather, they elected to rely on their theory that Highland Estates had waived the issue of standing. Highland Estates renewed its motion and the trial judge ruled that the LeVangers’ standing under Utah Rule of Civil Procedure 23.1 was effectively, if not expressly, decided by the earlier ruling.

¶ 34 In short, the first judge found there was no genuine issue as to any material fact regarding standing and granted standing to the LeVangers as a matter of law. The second judge heard Highland Estates’s additional evidence and then adopted the first judge’s decision. Thus, we can review their in tandem legal conclusions regarding standing for correctness on the undisputed material facts in the record. See Winegar v. Froerer Corp., 813 P.2d 104, 107 (Utah 1991) (“In reviewing the trial court’s ruling, we accept the facts and inferences in the light most favorable to the losing party. Because summary judgment is granted as a matter of law, we may reconsider the trial court’s legal conclusions.”); Barber v. Farmers Ins. Exch., 751 P.2d 248, 251 (Utah Ct.App.1988) (“Since a summary judgment is granted as a matter of law rather than fact, this court is of course free to reappraise the trial court’s legal conclusions.”).

[T]he question of whether a given individual or association has standing to request a particular relief is primarily a question of law, although there may be factual findings that bear on the issue. We will review such factual determinations made by a trial court with deference. Because of the important policy considerations involved in granting or denying standing, we will closely review trial court determinations ofiohether a given set of facts fits the legal requirements for standing, granting minimal discretion to the trial court.

Kearns-Tribune Corp. v. Wilkinson, 946 P.2d 372, 373-74 (Utah 1997) (citing State v. Pena, 869 P.2d 932, 935-36, 938-39 (Utah 1994)) (emphasis added).

¶ 35 Accordingly, the issue before us is Highland Estates’s challenge to the trial court’s legal conclusions that the undisputed facts of this ease “fit[] the legal requirements [of Utah Rule of Civil Procedure 23.1] for standing,” and that the LeVangers were thus proper derivative plaintiffs. Id.

ANALYSIS

¶ 36 The plain language of Utah Rule of Civil Procedure 23.1 states that a “derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of the shareholders or members similarly situated in enforcing the right of the corporation or association.” Utah R. Civ. P. 23.1. My colleagues have reversed the trial court’s determination that the LeVangers had standing as derivative plaintiffs, and remanded the case for further proceedings on this issue. I cannot concur because, when the legal standards for standing contained in rule 23.1 are applied to the undisputed evidence, the LeVangers do not qualify to represent the interests of the Association or its members. Thus, the LeVangers are precluded from pursuing a derivative action against Highland Estates.

¶ 37 I emphasize that the scope of the issue to be decided herein does not extend to whether the LeVangers are entitled to bring a direct action against Highland Estates or members of its Board of Directors. Nor does it extend to whether a substantial benefit was conferred upon the Association. The sole issue to be decided is whether the Le-Vangers fairly and adequately represent other similarly situated members of the Association and are thus qualified to be derivative plaintiffs pursuant to the legal requirements of rule 23.1.

A. Fiduciary Nature of Derivative Actions

¶ 38 The United States Supreme Court has held that in a derivative action the plaintiff acts as a fiduciary for the remaining shareholders. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 549, 69 S.Ct. 1221, 1227, 93 L.Ed. 1528 (1949). In bringing a derivative action, the plaintiff sues not only for himself, but on behalf of the best interests of the owner of the cause of action — the corporation. See Pacemaker Plastics Co., Inc. v. AFM Corp., 139 F.Supp.2d 851, 855 (N.D.Ohio 2001). Courts have recognized that the derivative plaintiff is often a self-chosen representative who takes into his own hands the responsibility of redressing the wrongs done against the corporation or association. See Cohen, 337 U.S. at 549-50, 69 S.Ct. at 1227. Since a derivative action is brought by such a self-appointed plaintiff, the Supreme Court has held that a state may impose certain “standards of responsibility, liability and accountability which it considers will protect the interests” the proposed derivative plaintiff seeks to represent. Id. Thus, safeguards have been established to ensure that the action brought against the corporation is truly within the best interests of the class the plaintiff claims to represent. See Pacemaker Plastics Co., Inc., 139 F.Supp.2d at 855.

¶ 39 Under the Utah Rules of Civil Procedure, those safeguards are found in rule 23.1, wherein derivative actions are limited to only those shareholders who “fairly and adequately represent the interests of the shareholders or members similarly situated.” Utah R. Civ. P. 23.1. As courts have recognized the fiduciary nature of a derivative action, they have rejected prospective derivative plaintiffs with interests that are not in accord with their fellow shareholders or association members. See generally Davis v. Comed, Inc., 619 F.2d 588, 593-94 (6th Cir.1980). Stockholders and association members may possess freedom in choosing the directors of their board, but they enjoy no such liberties as to the derivative plaintiff who steps forward to represent them. See Cohen, 337 U.S. at 549, 69 S.Ct. at 1227. Principles of equity, therefore, dictate that if a self-appointed “champion” purports to initiate litigation on behalf of the association to which he belongs, such a plaintiff must fairly and adequately represent the interests of the members of the corporation or association.

¶40 The LeVangers do not satisfy this statutory safeguard. Based on the uncontested evidence submitted by the defendant, Highland Estates, I conclude that the Le-Vangers do not fairly and adequately represent the interests of similarly situated members of the Highland Estates Homeowners Association. As the court in Pacemaker Plastics Co., Inc. pointed out, because a derivative plaintiff acts as a fiduciary for other members, courts must “carefully enforce” this limitation. Pacemaker Plastics Co., Inc., 139 F.Supp.2d at 855. Here the trial court failed to “carefully enforce” this important limitation, and committed reversible error in doing so. Id.

B. Factors to be Applied in Determining Fair and Adequate Representation in This Case

¶ 41 The question of whether a derivative plaintiff fairly and adequately represents the interests of similarly situated members requires application of the legal requirements of rule 23.1 to the particular facts of a case. Courts have identified a number of factors whose existence will disqualify certain parties as derivative plaintiffs. However, courts should focus on only those factors which are materially relevant in the particular setting of the dispute. Here, Highland Estates presented two reasons or factors that they argued would disqualify the LeVangers as fair and adequate representatives under the standards of rule 23.1. First, they argued that the LeVangers were in an antagonistic or vindictive position vis-a-vis Highland Estates. Second, they argued that the LeVangers were without any support by those they were attempting to represent. See Norris v. Weir, 35 Ohio App.3d 110, 114-15, 520 N.E.2d 10, (1987) (holding that the fair and adequate representation requirement was not satisfied because of litigation between plaintiff and defendant, the antagonism between the parties, and the lack of support plaintiff garnered in its claim), overruled on other grounds by Perry v. Eagle-Picher Indus., Inc., 52 Ohio St.3d 168, 556 N.E.2d 484, 489 (1990); see also Blum v. Morgan Guar. Trust Co. of N.Y., 539 F.2d 1388, 1390 (5th Cir.1976) (taking into account outside entanglements that i*endered it likely that derivative plaintiff would disregard interests of other class members); Newell Co. v. Vermont Am. Corp., 725 F.Supp. 351, 368-69 (N.D.Ill.1989) (holding that the most important consideration should be the existence of an antagonistic economic interest). Application of these factors leads to the conclusion that the LeVangers are not qualified as derivative plaintiffs.

1. Economic Antagonism Between the LeVangers and the Other Members of the Association

¶ 42 Courts have recognized that economic antagonism between the derivative plaintiff and the other association members is typically fatal to a shareholder derivative suit. See Pacemaker Plastics Co., Inc. v. AFM Corp., 139 F.Supp.2d 851, 855 (N.D.Ohio 2001). In Owen v. Modern Diversified Industries, Inc., 643 F.2d 441 (6th Cir.1981), the court held that the derivative plaintiff failed to fairly and adequately represent the interests of the other shareholders when, inter alia, he maintained a de minimis equity investment as well as a substantial debt investment acquired in the defendant corporation. See id. at 443-44.

¶43 While the LeVangers have not incurred a substantial debt investment in Highland Estates, the undisputed evidence manifests an inherent economic antagonism between the LeVangers and the other members of the Association. Highland Estates presented evidence that beginning in 1991 the LeVangers had not only failed, but in fact refused, to pay the Association’s annual assessment fees. At the time the LeVangers filed this lawsuit, their long-standing assessment fees were still unpaid. The LeVangers’ staunch refusal to pay the annual assessments placed them in direct economic antagonism with the class of Association members they purported to represent: members who, unlike the LeVangers, had dutifully and faithfully paid their annual assessments.

¶ 44 Moreover, Highland Estates presented evidence that, because of the LeVangers’ refusal to pay their assessment fees, a lien had been placed on their property. The Board placed the lien on the property in an attempt to expedite payment of years of unpaid assessment fees.

¶ 45 In bringing their derivative action, the LeVangers not only hold themselves out as representatives of members who pay their assessment fees, but also claim to represent members whose property was free of any sort of Association imposed encumbrance. The LeVangers do not fall into either of those two groups.

¶ 46 Further, the LeVangers’ derivative action acts as a tool of leverage that aids their personal interests. In Roberts v. Alabama Power Co., 404 So.2d 629 (Ala.1981), the derivative plaintiffs complaint was disqualified for lack of fair and adequate representation. See id. at 636. The court concluded its opinion stating that part of the derivative plaintiffs purpose in bringing the derivative action was to obtain leverage against the defendant corporation in a matter of personal litigation the plaintiff was pursuing. See id. at 636-37.

¶ 47 While Highland Estates has not filed a complaint against the LeVangers, the lien placed on their property is an action with legal significance, one typically preparatory to suit. Thus, the LeVangers’ initiation of this suit, while in their adverse legal posture with Highland Estates, creates an inherent conflict between the LeVangers’ personal interests and those of other Association members.

¶48 Although the LeVangers had many opportunities to register an objection or complaint, they did neither. They did not attend the 1994 annual meeting where the amendments to the CC <& Rs were on agenda for action. They did not voice their disapproval of the amended CC & Rs when their mail-in ballot was presented to them. And they did not attend the 1995 annual meeting where the Board announced the adoption of the CC & Rs based on the results of the mail-in balloting. In contrast, members of the Association voiced their approval of the amended CC & Rs by submitting their ballots at the annual meeting, as well as by mail. Then, sixteen months expired before the LeVan-gers filed their derivative action. During the same time period, no member of the Association stepped forward to voice any disapproval of the Association’s actions, or to pursue a derivative action on their own.

¶ 49 Finally, the timing of the LeVangers’ derivative action coincided with the filing of the lien on their property. These undisputed facts demonstrate an inherent economic antagonism between the LeVangers and the other members of the Association.

2. Degree of Support the LeVangers Received from Members of the Association

¶ 50 The lack of demonstrated support from other members of the Association is also a material factor in this case. See Norris v. Weir, 35 Ohio App.3d 110, 115-16, 520 N.E.2d 10 (1987). Here, the undisputed facts support the conclusion that the LeVan-gers did not receive any member support in their determination to pursue their litigation.

¶ 51 In Norris, the court pointed out that the derivative plaintiff had failed to garner the support of any fellow shareholders and, combining that factor with others the court found relevant, dismissed the plaintiffs derivative action for failure to meet the fair and adequate representation standard. See id. at 115, 520 N.E.2d 10.

¶ 52 Highland Estates presented undisputed evidence that the LeVangers garnered no demonstrated support for their derivative action from the other members of the Association. The LeVangers proffered nothing more than affidavits from other members of the Association; however, while these affidavits showed a few other members may have sympathized with the LeVangers’ plight, nevertheless the affidavits did not evince member support for the derivative action. Highland Estates submitted the undisputed testimony of its former president, Lance Swedish. He testified that the LeVangers’ suit had very little, if any, support among the members of the Association. He testified that the LeVangers’ derivative action had substantially and adversely impacted the interests of the individual members of the Association, and that even after the commencement of the LeVangers’ derivative action, the LeVangers had threatened the Board of Trustees and members of the Association with additional legal action.

¶ 53 At the Association’s 1994 annual meeting, the approximately forty homeowners present voted unanimously to adopt the new CC & Rs. However, in an effort to maximize the voting participation of its members, the Board distributed copies of the amended CC & Rs with a mail-in ballot for each homeowner. The results of the Association’s mail-in balloting showed that nearly two-thirds of the Association’s members favored the amended CC & Rs. While some members may have been opposed to the procedures the Board took in conducting the mail-in vote, and even though twenty-six members did not approve the amended CC & Rs, not a single member demonstrated any support for the LeVangers’ derivative suit. These undisputed facts demonstrate that the LeVangers did not have any member support for their suit. Due to the existence of economic antagonism and the non-existence of support, I conclude that the LeVangers do not fairly and adequately represent the interests of the other members of the Association.

CONCLUSION

¶ 54 Utah Rule of Civil Procedure 23.1 requires derivative plaintiffs to fairly and adequately represent the interests of those shareholders or association members similarly situated, in order to maintain such an action. Courts have explicitly stated that the fair and adequate representation standard should be carefully enforced. I conclude, based on undisputed material facts in the record, that as a matter of law, the LeVan-gers do not satisfy this appropriately stringent legal standard, and should not have been allowed to maintain their derivative action.

¶ 55 Accordingly, this appeal should be dismissed because the derivative plaintiffs do not have standing. Moreover, this court’s decision in LeVanger I should be vacated because the LeVangers were not entitled to that decision in the first place.

      . On the issue of the LeVangers’ standing under rule 23.1 of the Utah Rules of Civil Procedure, the trial court ruled: "Based upon the record before the [c]ourt, there are insufficient facts and insufficient grounds to, as a matter of law, determine that the plaintiffs are inappropriate parties to bring this action."

      . The discussion focused on the trial court’s decision on the issue of the voting and approval process used in amending Highland Estates's CC & Rs.

      . Highland Estates is not arguing the reasonableness of the LeVangers' attorney fees as part of this appeal.

      . The record reveals that during the January 9, 1998 summary judgment hearing, the trial court and the parties discussed the LeVangers’ intention to file a motion to certify the trial court’s May 28, 1998 order as final and appealable under rule 54(b) of the Utah Rules of Civil Procedure. The parties and the trial court specifically discussed certifying the trial court’s grant of Highland Estates’s motion for summary judgment on the issue of the voting and approval process used in amending Highland Estates’s CC & Rs; however, they did not discuss certifying the trial court's denial of Highland Eslates's motion for summary judgment on the issue of the LeVangers' standing under rule 23.1.

      . In our colleague's dissent, he first equates a trial judge’s inability to resolve an issue on summary judgment as a resolution of that issue. We believe this is inappropriate. See Switzerland Cheese Ass’n v. E. Horne’s Mkt., Inc., 385 U.S. 23, 25, 87 S.Ct. 193, 195, 17 L.Ed.2d 23 (1966) ("[T]he denial of a motion for a summary judgment because of unresolved issues of fact does not settle or even tentatively decide anything about the merits of the claim. It is strictly a pretrial order that decides only one thing — that the case should go to trial.”).
      He then concludes that when the legal standards of rule 23.1 are applied to the "undisputed evidence” in this case, the LeVangers do not have standing under rule 23.1. We believe this analysis is inappropriate since the trial court's ruling was grounded in law and procedure, not fact. Although evidence on both sides of the issue of standing was before the trial court, its ruling not only made no findings thereon, but also made no reference thereto. Consequently, we believe that our colleague’s desire to consider and weigh the evidence presented at trial on the standing issue is inappropriate. See Bailey v. Boyles, 2002 UT 58,¶ 20, 52 P3d 1158 ("The court of appeals is limited to the findings of fact made by the trial court and may not find new facts or reweigh the evidence in light of [a] new legal theory or alternate ground.”); American Fork City v. Singleton, 2002 UT App 331,¶ 5, 57 P.3d 1124 (stating that "[tjrial courts are given primary responsibility for making determinations of fact," and that "[i]t is inappropriate for an appellate court ... to ... weigh[ ] evidence and mak[e] its own findings of fact” (second, third, and sixth alterations in original) (quotations and citations omitted)).

      . The majority remands the case to the trial court to determine whether the defendant has satisfied its burden of proof by demonstrating that the Levangers' representation will be made-quate. See Lewis v. Curtis, 671 F.2d 779, 788 (3d Cir.1982); Smallwood v. Pearl Brewing Co., 489 F.2d 579, 592 (5th Cir.1974); Abeloff v. Barth, 119 F.R.D. 332, 335 (D.Mass.1988); Guenther v. Pacific Telecom, Inc., 123 F.R.D. 341, 344 (D.Or.1987). I agree with the principle that the burden falls on the defendant to prove the inadequacy of the plaintiff in maintaining a derivative action, and conclude that Highland Estates satisfied this burden.

      . The standing requirements in a derivative action under Utah Rule of Civil Procedure 23.1 are different than those in our conventional standing analysis. See Kearns-Tribune Corp. v. Wilkinson, 946 P.2d 372, 375 (Utah 1997).

      . Factors that courts have identified as material include: (1) the economic antagonisms between the representative and the class of shareholders represented; (2) the remedy sought by the derivative plaintiff; (3) indications that the plaintiff is not the driving force behind the litigation; (4) the plaintiff's unfamiliarity with the litigation; (5) other litigation pending between the plaintiff and the defendant; (6) the relative magnitude of the plaintiff’s personal interests as compared to his interest in the derivative action itself; (7) the plaintiff’s vindictiveness toward the defendant; and (8) the degree of support the plaintiff is receiving from the shareholders he purports to represent. See Davis v. Comed, Inc., 619 F.2d 588, 593-94 (6th Cir.1980).


source: Caselaw Access Project

author: BENCH, Judge:

license: Public Domain

text:
    2003 UT App 374
    ALLIANT TECHSYSTEM, INC., Petitioner, v. TAX COMMISSION and Salt Lake County Board of Equalization, Respondents.
    No. 20020904-CA.
    Court of Appeals of Utah.
    Nov. 6, 2003.

      Maxwell A. Miller and Randy M. Grim-shaw, Parsons Behle & Latimer, Salt Lake City, for Petitioner.
    Mark L. Shurtleff, Atty. Gen., Laron J. Lind, Asst. Atty. Gen., Mary Ellen Sloan, and Jason S. Rose, Salt Lake City, for Respondents.
    Before JACKSON, P.J., BENCH and DAVIS, JJ.
   OPINION

BENCH, Judge:

¶ 1 Alliant Techsystem, Inc. (ATK) seeks review of an amended order of the Utah State Tax Commission (Commission) granting a motion to dismiss tax appeals for lack of subject matter jurisdiction. We affirm the Commission’s order.

BACKGROUND

¶ 2 ATK owns twenty-three parcels of property in Salt Lake County. ATK also leases nine other parcels: six are owned by the United States Navy (Navy), two are owned by Nuteam Pension and Profit Sharing Plan (Nuteam), and one is owned by Kennecott Copper (Kennecott). In 2001, ATK protested Salt Lake County’s assessment of property taxes and privilege taxes on the thirty-two parcels.

¶ 3 After consolidating ATK’s protests, the Board of Equalization of Salt Lake County (Board) held a hearing. Thereafter, in April 2002, the Board issued and mailed notices of decisions regarding all thirty-two parcels. In the property tax cases, the Board mailed the notices of decisions to the property owner of record. In the privilege tax cases, those involving the Navy property, the Board mailed the notices of decisions to ATK. The Board mailed the notices to the same entities as it had done since 1995.

¶ 4 ATK’s former tax representative, Mr. Robert Berg, who had filed the protests, retired before the Board issued its decisions in April 2002. The department in which Mr. Berg worked was subsequently restructured and the person succeeding Mr. Berg was unfamiliar with the appeals. Unaware of the notices, ATK failed to act on the Board’s decisions until ATK’s local counsel eventually discovered them. On July 24, 2002, ATK filed appeals from those decisions to the Commission.

¶ 5 Having received notice of ATK’s appeals, the Board filed a Motion to Dismiss for lack of subject matter jurisdiction because the appeals were not filed within thirty days of the Board’s decisions. The Commission thereafter issued an order granting the Board’s motion to dismiss. ATK filed a Petition for Writ of Review of the Commission’s order in the Utah Supreme Court, which then transferred the case to this court.

ISSUES AND STANDARD OF REVIEW

¶ 6 ATK presents three issues for our review. First, ATK argues that the Commission failed to interpret the term “taxpayer,” referred to in section 59-2-1004(1) of the Utah Code, according to its plain and ordinary meaning. Second, ATK alleges that its due process rights were violated when the Board failed to send its decisions to ATK’s local counsel. Third, ATK contends that the Board violated its own administrative rule when it notified ATK, and not the Navy, of the Board’s decisions concerning the Navy parcels.

¶ 7 Since these issues raise strictly questions of law, we apply a correction of error standard to the Commission’s conclusions. See Utah Code Ann. § 59-l-610(l)(b) (2002).

ANALYSIS

Statutory Definition of “taxpayer”

¶ 8 We begin by examining the meaning of “taxpayer” under the Utah Code. Section 59-2-1001(4) of the Utah Code provides that “the clerk of the board of equalization shall notify the taxpayer, in writing, of any decision of the board.” ATK argues that the Commission erroneously interpreted “taxpayer” to mean the party who is “legally liable” for the tax. We agree with the Commission. In interpreting “taxpayer,” we look to “its usually accepted meaning, where the ordinary meaning of the term results in an application that is neither unreasonably confused, inoperable, nor in blatant contradiction of the express purpose of the statute.” Morton Int’l., Inc. v. Utah State Tax Comm’n., 814 P.2d 581, 590 (Utah 1991). The ordinary or accepted meaning of “taxpayer” can be found in both related Utah Code provisions and pertinent case law. For instance, under section 59-2-1303(1), the property tax is assessed against the owner or claimant of record or the person in possession of the lien each year. In section 59-2-1302(1), a property is listed on the county tax roll in the name of the property owner. Section 59-2-913(4) provides that a notice must be mailed to the property owner. Furthermore, in Buchanan v. Hansen, 820 P.2d 908 (Utah 1991), the Utah Supreme Court held that “the legal owner as of January 1 of the tax year is held to have a duty to pay the taxes for that year.” Id. at 910. Therefore, we conclude that the “taxpayer” is the person legally responsible for the tax. With regard to the property tax cases, that person is the property owner. However, when the tax is not on the property but on a person’s beneficial use of exempt property, as in the parcels owned by the Navy, the taxpayer is the beneficial user, or, in this case, ATK. See Utah Code Ann. §§ 59-4-101(l)(a) and (4) (2002).

¶ 9 The facts show that the notices were sent to the proper taxpayers as required by statute. The decisions concerning the twenty-three parcels owned by ATK were mailed to ATK, the owner of record. The decisions regarding the privilege tax on the Navy parcels were also mailed to ATK, the beneficial user. As to the Kennecott and Nuteam leased parcels, the decisions were mailed to Kennecott and Nuteam, as the owners of record.

¶ 10 Notwithstanding section 59-2-1001(4), ATK contends that, as a lessee of the Nu-team and Kennecott parcels, ATK should have received the notices. In other words, ATK argues that a lessee is “legally liable” for the taxes, and not the owner of record. However, ATK fails to advance any legal basis for this argument. While the lessee may be contractually liable for the property tax as provided under a lease agreement, the Board had no legal duty to send its decision to the lessee. As the Commission correctly noted, the Board had no duty to investigate the contractual relationships between the owner of a property and its lessee.

Alleged Due Process Violations

¶ 11 ATK next asserts that its due process rights were violated because it did not receive actual notice and meaningful opportunity to be heard. We disagree.

¶ 12 The due process clauses of the United States and Utah Constitutions provide that no person shall be deprived of “life, liberty, or property without due process of law.” U.S. Const, amend. XIV, § 7; Utah Const, art. 1, § 7. In interpreting the due process clause, the United States Supreme Court noted that to satisfy due process, notice must be “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950).

¶ 13 Contrary to ATK’s assertion, ATK did receive actual notice, albeit not on all properties. The Board provided actual notice to ATK for twenty-nine parcels. It mailed notices to the owners of the other three parcels. These notices informed the recipients that they had thirty days to appeal the Board’s decisions, thus giving the taxpayers “an opportunity to present their objections.” Id.

¶ 14 Nevertheless, despite receiving actual notice on most properties, ATK asserts that the Board violated its due process rights because the Board failed to send the notices to ATK’s local counsel, its designated agent. Contrary to ATK’s position, the Board had no legal obligation to notify ATK’s local counsel. ATK correctly asserts that the application form provides for a designated agent. However, the designation of such agent is solely for representation purposes and not for notice purposes. The application form clearly states that “All Notices of Decision will be mailed to the Owner of Record when issued.”

¶ 15 We note that Salt Lake County Board of Equalization Administrative Rules § VI Resolution (D)(3)(b) (2001) does allow for mailing a courtesy copy to the taxpayer’s representative if the taxpayer affirmatively requests it. However, ATK never made such a request. Consequently, the Board sent the notices to the same entities it had since at least 1995.

Did the Board Violate its Own Rule?

¶ 16 ATK finally contends that the Board violated its own rule when it mailed the notices concerning the Navy parcels to ATK instead of the Navy. The administrative rule at issue states in pertinent part that “a copy of the final decision shall be sent to the property owner of record, at the current address listed on the County records for the mailing of the tax notice.” Salt Lake County Board of Equalization Administrative Rules § VI Resolution (D)(3)(a) (2001). ATK argues that the Board violated its own rule when it sent the decisions to ATK instead of the Navy, the owner of record. However, the tax on the Navy parcels is on the beneficial use of the property, and not the property itself, as provided under section 59-4-101(l)(a) and (4) of the Utah Code. ATK was legally liable for the tax assessed on its beneficial use of the Navy parcels. Therefore, the Board did not violate its own administrative rule.

CONCLUSION

¶ 17 Because the Board’s decisions were sent to the proper taxpayers and ATK failed to appeal them within the thirty-day statutory requirement, the Commission properly dismissed ATK’s appeals for lack of subject matter jurisdiction. We therefore affirm.

¶ 18 WE CONCUR: NORMAN H. JACKSON, Presiding Judge, and JAIMES Z. DAVIS, Judge.

      . Utah Code Ann. § 59-2-1006(1) (2002) provides, in part, that any person dissatisfied with a Board’s decision “may appeal that decision to the commission by filing a notice of appeal ... within 30 days after the final action of the county board.”

      . See also Dillman v. Foster, 656 P.2d 974, 978 (Utah 1982) (affirming that the owner of record is liable for the property tax).

      . Utah Code Ann. § 59 — 4—101(l)(a) (2002) reads in part: "a tax is imposed on the possession or other beneficial use enjoyed by any person of any real or personal property which for any reason is exempt from taxation, if that property is used in connection with a business conducted for profit.” Further, subsection (4) provides that a privilege tax "is assessed to the possessors or users of the property." (Emphasis added.)

      . ATK cites three United States Supreme Court cases in support of its argument: Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 70 S.Ct. 652, 94 L.Ed. 865 (1950), Tulsa Professional Collection Seivices, Inc. v. Pope, 485 U.S. 478, 108 S.Ct. 1340, 99 L.Ed.2d 565 (1988), and Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983). However, none of these cases support ATK’s claim that notice must be sent to an entity other than the "taxpayer.” Rather, these cases stand for the proposition that notice by posting or publication in a newspaper is necessary in certain circumstances.

      . Salt Lake County Board of Equalization Administrative Rules § V Hearing (C)(2) (2001) provides that "all requests for notices to be sent to an address other than that listed on County records for the mailing of the tax notice must be made in writing to the Clerk of the Board.”


author: LEHMAN, Justice.

text:
    2003 WY 158
    George E. SHETKA and Rose Marie Shetka, jointly and severally, Appellants (Defendants), v. EPP CONTRACTING, INC., Appellee (Plaintiff).
    No. 03-5.
    Supreme Court of Wyoming.
    Dec. 8, 2003.

      Representing Appellant: Mark J. White and Jill E. Kucera of White, White & Kueera, P.C., Riverton, WY.
    Representing Appellee: Robert 0. Anderson, Riverton, WY.
    Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.
   LEHMAN, Justice.

[¶ 1] Appellants George E. and Rose Marie Shetka, appeal the judgment entered by the district court in favor of appellee Epp Contracting, Inc. (ECI) concerning construction and other repair work performed on the Shetkas’ property. The Shetkas argue that the findings made by the’district court are clearly erroneous and are not supported by sufficient evidence. We affirm.

ISSUES

[¶2] The Shetkas phrase the issues on appeal as:

1. Whether the district court’s findings of fact were clearly erroneous and not supported by the evidence?
2. Whether the district court’s conclusion that plaintiff performed [its] duties in a good and workmanlike fashion was clearly erroneous?
3. Whether the district court’s conclusion that defendants failed to prove their counterclaim was clearly erroneous?

FACTS

[¶ 3] The Shetkas purchased a home in Dubois, Wyoming in 1999. They hired ECI to replace the existing shingle roof on the home with a metal roof, do leveling of the floor within the home, construct a new pole barn, and perform other “odds and ends” repairs.

[¶ 4] The work on the roof, the floor-leveling job, and the construction of the pole barn were performed pursuant to three separate written contracts. The other work was performed by ECI on an agreed upon “cost plus” basis. Detailed monthly statements from ECI were sent to the Shetkas for the work performed. The Shetkas paid these monthly statements. However, after the work was completed, the Shetkas failed to pay the final invoice in the sum of $12,888.00.

[¶ 5] On January 12, 2001, ECI filed a complaint with the district court for breach of contract, open account, unjust enrichment, and foreclosure of lien. The Shetkas answered the complaint and also filed a counterclaim for damages. After a bench trial, the district court entered its Judgment and Order ruling in favor of ECI and awarding ECI $12,888.00. The district court further found that the Shetkas had failed to prove theu counterclaim. This appeal followed.

STANDARD OF REVIEW

[¶ 6] In Ekberg v. Sharp, 2003 WY 123, ¶ 10, 76 P.3d 1250, ¶ 10 (Wyo.2003), we set forth:

The factual findings of a judge are not entitled to the limited review afforded a jury verdict. While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail weighing disputed evidence. Findings of fact will not be set aside unless the findings are clearly erroneous. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. We review a district court’s conclusions of law de novo on appeal.

DISCUSSION

[¶ 7] The Shetkas assert that the determinations made by the district court regarding the work performed by ECI, as well as the decision that the Shetkas’ failed to meet their burden of proof concerning their asserted counterclaim, are not supported by substantial evidence. In making their argument that there is insufficient evidence to support the district court’s ultimate decision, the Shetkas provide little analysis of the evidence but rather complain that the documentation and testimony were inconsistent, deficient, or not credible. In response, ECI argues that sufficient evidence exists to support the district court’s ruling but fails in its effort to provide this court with independent citation to the record to support its conclusion. Upon our review of the entire record, we conclude that sufficient evidence was presented to support the district court’s determination.

Metal Roof

[¶ 8] The Shetkas complain that the district court should not have characterized the contract concerning the metal roof as a “bid” as opposed to an “estimate.” The Shetkas also argue that the district court improperly ruled that the Shetkas accepted the metal roof contract on January 7, 2000. However, the manner in which the district court characterizes the contract and the actual date it was accepted by the Shetkas are of little significance.

[¶ 9] The metal roof contract included specific line items that enumerated the work to be performed and the dollar figure attached to each line item. Mr. Gari Epp, owner of ECI, testified that he understood that ECI was to keep costs as close as possible to the total $19,200.00 figure indicated in the contract. Mr. Epp further stated that the Shetkas specifically informed, him that they wanted the work performed as cheaply as possible because they did not want to spend a lot of money on the home considering it was simply their “hunting cabin.”

[¶ 10] The evidence presented showed that the Shetkas ultimately ordered the work concerning the metal roof to proceed. Mr. Shetka testified that when he received the billing for the metal roof, he called Mr. Epp to ask about the term “bid” and was told “bid” was just the word the computer used for billing. Apparently satisfied with this explanation and the' work performed, the Shetkas paid both invoices in full.

[¶ 11] The Shetkas also assert that the district court erred in concluding that ECI was not responsible under the contract to replace all of the substrate of the roof. In support of his claim, Mr. Shetka references his own testimony wherein he informed Mr. Epp that if anything was wrong with the substrate, he wanted it repaired. Upon review, however, Mr. Shetka testified only that he wanted “rotten lumber” repaired and that when ECI found a truss that had decayed somewhat and advised him of this find, the truss was replaced by ECI as Mr. Shetka requested. Mr. Epp testified that he and Mr. Shetka never discussed the replacement of the substrate, that this was never included as a part of the metal'roof contract, and that the Shetkas never indicated they wanted the substrate replaced as part of the work to be performed. Additionally, Mr. Epp stated that when the old cedar shingles were stripped off of the roof, it was noticed that some of the substrate was not fastened properly and that some of the substrate undulated, did not lie flat on the roof, and was crooked. Accordingly, ECI properly fastened the loose substrate and replaced and straightened some of the fascia boards because this work was minimal in cost.

[¶ 12] When questioned about the hip ridges of the substrate, Mr. Epp admitted that the hip ridges did not lay perfectly straight because the trusses for the roof were not pre-manufactured but made out of uneven native lumber. Mr. Epp concluded that this problem was not significant in nature and that the ridge cap could be placed in a straight enough manner, especially considering the prohibitive cost to rebuild and fix the hip ridges and the Shetkas’ clear directive that they did not desire to spend a lot of money on the repairs. Accordingly, Mr. Epp did not further discuss the issue with the Shetkas.

[¶ 13] Ultimately, a review of the evidence shows that the district court could find that complete repair or replacement of the substrate was not contemplated by the parties or included in the roof work required to be performed by ECI. The fact that ECI did some limited work on the substrate does not change this conclusion. The testimony clarified that the main purposes for placing a metal roof on the home were to remove the old unsightly and somewhat dilapidated cedar shingles on the roof and to fix a leak in the family room/garage area at as low a cost as possible within the quoted price. The substrate work was simply not specifically included in the contract work to be performed.

[¶ 14] The Shetkas complain that the roof leaked after the work was performed by ECI. Evidence presented showed that ECI returned to correct leaking that occurred in one of the bedrooms of the home. Testimony was also received that any leaking that occurred may not have been a result of ECI’s roof work because it was virtually impossible to determine the nexus of any leak and the leaking could have been caused by circumstances unrelated to ECI’s work.

[¶ 15] The Shetkas also assert that the district court erred by concluding that ECI gave no specific warranty on the roof. The testimony of both Mr. Shetka and Mr. Epp substantiated that no express or written warranty was ever given or requested. Even the Shetkas’ expert, Mr. Mark G. Sehnert, indicated that, while he would have given a “no-leak” warranty on the roof had he been on the job, generally no warranty whatsoever is provided in the industry.

[¶ 16] The Shetkas additionally cite to Matheson Drilling, Inc. v. Padova, 5 P.3d 810, 812 (Wyo.2000), to argue that under Wyoming law all construction contracts contain an implied warranty that the work will be performed in a skillful, careful, diligent, and workmanlike manner. The Shetkas contend that given the evidence presented, there can be no question that the work on the roof did not meet this standard. Mr. Sehnert, the Shetkas’ expert, was very critical that the sheet metal was not placed on a flat surface, some of the panels were damaged prior to installation yet still used, proper fastening patterns and spacing were not used, old flashing was used, a cricket was not utilized with respect to the chimney, gapping existed in the lap of two sheets, screws were installed in ribs of the sheet metal, some caulking was inappropriate, and other problems. Mr. Sehnert, therefore, opined that the workmanship of the roof would rate only a 4 to 4½ on a scale of 10 considering both aesthetics and functionality. Nevertheless, other testimony provided that the sheet metal was placed on a flat surface, that the panels were not damaged prior to installation, that proper fastening patterns were used, and that even spacing of the screws was utilized in most cases to ensure the sheet metal was securely fastened to the roof but was impossible in some cases. Other testimony was elicited that while old flashing was used, such use was appropriate and saved costs, there were reasonable considerations for not using a cricket on the fireplace area, gapping was appropriate given the complex nature of the roof involved, and that caulking was minimal and appropriately utilized. Accordingly, we simply cannot conclude that the district court was clearly erroneous when it determined that the work was performed by ECI in a skillful, careful, diligent, and workmanlike manner.

[¶ 17] We hold that there exists sufficient evidence within the record to support the district court’s ultimate conclusion that a contract was formed between ECI and the Shet-kas concerning the work performed on the metal roof, that ECI properly performed the work that was required, and that the Shetkas owed ECI for such services. Moreover, sufficient evidence existed for the district court to conclude that ECI’s work on the metal roof was performed in a “skillful, careful, diligent, and workmanlike manner” given the specified terms of the contract and related circumstances. While some of the particular factual findings reached by the district court involving the metal roof may have been in error, these findings of fact do not compromise the district court’s ultimate determination concerning ECI’s work on the metal roof.

Floor Leveling

[¶ 18] The Shetkas argue that they understood ECI was going to level the floor and, therefore, the district court wrongfully concluded that ECI had performed this work in a skillful, careful, diligent, and workmanlike manner. The evidence, however, indicates that ECI was hired to stabilize the floor in the home as best as possible. Testimony from Mr. Epp and Mr. Shetka referred to portions of the floor as “bouncy” and “spongy,” and Mr. Epp specifically recalled advising Mr. Shetka that completely leveling the floor would be next to impossible. Indeed, Mr. Shetka testified that he wanted ECI “to take the bounce out of it” and that he did not expect ECI to make the floor absolutely level. Subsequently, Mr. Shetka admitted that, while the floor was not level after the work was done by ECI, the floor was no longer “bouncy.”

[¶ 19] The expert retained by the Shetkas indicated that, although he was an experienced contractor, he would not take on such a project because it would be very difficult to completely level the floor unless he aligned with a specialist, presumably at an increased cost. Another bid received by the Shetkas after ECI performed work on the floor indicated that the floor could only be leveled “to the best of our ability,” thus still not guaranteeing that the floor would be absolutely level. Finally, after ECI performed the floor work, Mr. Shetka walked on the floor for six months before the total construction was finalized but failed to request that any additional work be done. Hence, we hold there exists sufficient evidence within the record to support the district court’s ultimate conclusion concerning ECI’s floor leveling work.

Pole Bam

[¶ 20] The Shetkas contend that the district court’s finding that the construction of the pole barn was agreed upon by the parties is unsubstantiated by the evidence presented at trial. Evidence was elicited that plans for the pole barn were sent back and forth between the parties, and an agreement was made as to the final design. An estimate was prepared for this work and each line item discussed. Mr. Shetka then advised ECI to proceed to build the pole barn as detailed. Thereafter, Shetkas determined that additional work should be performed by ECI on the pole barn. This work was completed and billed as additional work performed. Ultimately, the Shetkas inspected the pole barn, made no objections, and paid all of the invoices related to the pole barn.

[¶21] The Shetkas’ expert spoke about defects with the pole barn, including warped poles, damaged panels, lack of parameter skirt, no shim or jambs on the walk-in door, and screw hole areas where light and weather penetrated the building. Testimony was also presented concerning hazards within the pole barn regarding the storage rack and the walk-in door. Problems with the turbines located on the roof of the structure were also discussed. Nevertheless, as indicated above, the pole barn was built as agreed by the parties and met all applicable Uniform Building Code and local snow and wind guidelines.

[¶ 22] ECI refunded to the Shetkas $1,000.00 because of a misunderstanding concerning the design of the pole barn regarding how the 2x4s were to be nailed to the barn. The issues dealing with the door and turbines were resolved by ECI while still on the job. The record contains sufficient evidence to support the district court’s ultimate conclusion concerning ECI’s work on the pole barn.

Other Construction/Repair Issues

[¶ 23] The Shetkas conclude that the district court improperly failed to make findings of fact concerning the other defects in the construction/repair work performed or supervised by ECI. Primarily the Shetkas assert various plumbing problems. In addition, the Shetkas complain about some of the billing practices of ECI.

[¶ 24] Clearly the parties agreed that additional eonstruction/repair work would be performed on a “cost-plus” basis at a particular point in time. Testimony confirmed that Mr. Shetka was in charge of the plumbing and electrical work and entered into negotiations with the plumbers and electricians with respect to the ordering and installation of material. The bills were computer generated with itemization of each line item and accompanying dollar figures. Many discussions were held between the parties concerning these billings. The Shetkas made payment after having adequate time to discuss their concerns with ECI, and to inspect and apparently accept the work done. The only “rub” that arose came when the Shetkas refused to make payment of the last billing over a period of time in the amount alleged within the complaint.

[¶ 25] As indicated by ECI, the fact that the district court made no findings with respect to the other alleged eonstruction/repair defects infers that the district court found that the Shetkas did not prove any other defects. We agree. Competent evidence exists in the record to support such a conclusion.

Counterclaim

[¶ 26] Finally, the Shetkas argue that the district court improperly found that they failed to meet their burden of proof concerning their asserted counterclaim for damages. The crux of this counterclaim involves contentions that the Shetkas were damaged as a result of the sub-par construction/repair work performed or supervised by ECI. As indicated above, the evidence presented at trial supports a determination that ECI performed and supervised the work on the Shei-kas’ property within the parameters agreed upon by the parties. It is, therefore, logical for the district court to conclude that the Shetkas failed to meet their burden of proof concerning the alleged related damages asserted in their counterclaim.

CONCLUSION

[¶ 27] We readily admit the record before us does reflect some evidence that is contrary to some of the factual determinations made by the district court. However, upon careful review and consideration of the entire record, we hold the record provides a rational basis for the district court’s ultimate conclusions. These conclusions of law were not clearly contrary to the overwhelming weight of the evidence and were within established law. We will not substitute our judgment for that of a district court when substantial evidence supports the decision rendered. Ekberg v. Sharp, 2003 WY 123, ¶ 10, 76 P.3d 1250. Moreover, this court must affirm the district court’s action on appeal if the judgment is sustainable on any legal ground appearing in the record. Masinter v. Markstein, 2002 WY 64, ¶ 8, 45 P.3d 237, ¶ 8 (Wyo.2002).

[¶ 28] For these reasons, we hold the determination of the district court is affirmed.

      . The cause of action for foreclosure of lien was dismissed prior to trial pursuant to stipulation of the parties.

      . We note that the parties agreed to a review of the property by the district court, which was ultimately conducted. Because that review is in no way memorialized in the record on appeal, we do not rely upon any facts gleaned from the review of the property in making our holding.

      . Mr. Shetka also failed to mention any leak damage or leak issues after completion of construction when entering into a property insurance contract.

      . Further, the Shetkas did not include any allegations of breach of warranty in their counterclaim.