Arbogast Family Trust v. River Crossings, LLC

2010 UT 40, 238 P.3d 1035, 656 Utah Adv. Rep. 5, 2010 Utah LEXIS 74, 2010 WL 1929423
CourtUtah Supreme Court
DecidedMay 14, 2010
Docket20080699
StatusPublished
Cited by49 cases

This text of 2010 UT 40 (Arbogast Family Trust v. River Crossings, LLC) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arbogast Family Trust v. River Crossings, LLC, 2010 UT 40, 238 P.3d 1035, 656 Utah Adv. Rep. 5, 2010 Utah LEXIS 74, 2010 WL 1929423 (Utah 2010).

Opinions

[1036]*1036NEHRING, Justice:

INTRODUCTION

T 1 This case presents us with the question of what a party must do to "appear" under rule 5(a)(2)(B) of the Utah Rules of Civil Procedure. We hold that the court of appeals correctly determined that a rule 5(a)(2)(B) appearance requires a party to make a formal presentation or submission to the trial court. Because River Crossings failed to make an appearance as required by this rule, we affirm.

BACKGROUND

T2 In this opinion, we include only those facts we deem relevant to the specific question presented to us. A more detailed recitation of the facts and proceedings can be found at Arbogast Family Trust v. River Crossings, LLC, 2008 UT App 277, ¶¶ 2-9, 191 P.3d 39.

13 In September 2004, Arbogast Family Trust loaned River Crossings, LLC, $2,450,000. The loan repayment was due approximately one year later, on September 16, 2005. The loan agreement included a penalty provision imposing a six percent late fee if payment was more than five days overdue.

14 River Crossings repaid the loan in full on October 7, 2005, approximately twenty-one days after the due date. Because the loan was more than five days overdue, Arbo-gast claimed it was entitled to collect a late fee of over $148,000 plus interest. River Crossings claimed it owed no additional fees because Arbogast granted it an extension of time to repay the loan. Because of the dispute, River Crossings authorized Southern Utah Title Company to hold $178,000 in escrow until the matter was resolved. These funds were eventually deposited with the district court.

15 On January 10, 2006, Arbogast filed a Complaint for Declaratory Judgment to obtain the funds held in escrow. Arbogast granted River Crossings an extension of time to answer the complaint or to communicate a settlement offer. On June 28, 2006, River Crossings made a settlement offer to Arbo-gast. The next day Arbogast sent a letter rejecting the offer and stating:

My client has previously granted your client an extension of time within which to answer the complaint. However, given the present state of the case, I am, on behalf of my client, hereby requesting that your client file an Answer to the complaint within twenty (20) days of the date of this letter.

Id. T4.

T6 Approximately one month later, River Crossings sent an email to Arbogast's principal proposing the parties "discuss the direction of [the] lawsuit." Id. T5. No further communication occurred. On July 31, more than thirty days after the June 29 letter, Arbogast obtained a certificate of default from the court clerk. Arbogast did not alert River Crossings or provide it with a copy of its request for default judgment. On August 10, default judgment was entered against River Crossings. Notice of default was sent to River Crossings on August 15. Id.

T7 On September 26, 2006, River Crossings filed a rule 60 motion to set aside the default judgment. The trial court denied the motion, and River Crossings appealed. River Crossings argued to the court of appeals that the district court abused its discretion when it refused to set aside the default judgment because Arbogast failed to provide notice of default to River Crossings as required by rule 5 of the Utah Rules of Civil Procedure. River Crossings further argued that the district court's refusal to set aside the default judgment was based on faulty findings of fact.

T8 The court of appeals affirmed the district court's refusal to set aside the default judgment. Id. 135. Citing our decisions in Central Bank & Trust Co. v. Jensen, 656 P.2d 1009 (Utah 1982) and Lund v. Brown, 2000 UT 75, 11 P.3d 277, the court of appeals reasoned that Arbogast was not required to give notice to River Crossings before seeking default judgment because River Crossings failed to make a formal appearance through a pleading in the action as required by Utah Rule of Civil Procedure 5(a)(2)(B). Arbogast, [1037]*10372008 UT App 277, 116, 191 P.3d 839. The court of appeals further found that the district court's refusal to set aside the default judgment was not based on faulty findings of fact and that River Crossings did not show any reasonable justification or exeuse for its failure to answer Arbogast's complaint. Id. 11 29-31.

{ 9 River Crossings petitioned for certiora-ri. We granted the petition to decide whether the court of appeals erred in its determination that River Crossings did not "appear" under Utah Rule of Civil Procedure b(a)(2)(B) such that Arbogast was required to give River Crossings notice before default judgment was entered. We have jurisdiction in this case pursuant to Utah Code section 78A-8-102(8)(a) (2008).

STANDARD OF REVIEW

110 On certiorari, "we review the decision of the court of appeals, not the decision of the district court." Nolan v. Hoopiiaina, 2006 UT 53, ¶ 19, 144 P.3d 1129. "The interpretation of a rule of procedure is a question of law that we review for correctness." State v. Rodrigues, 2009 UT 62, ¶ 11, 218 P.3d 610 (internal quotation marks and alteration omitted).

ANALYSIS

T 11 According to Utah Rule of Civil Procedure 5(a)(1) "every judgment, every order . every pleading ... every paper ..., every written motion ..., and every written notice, appearance, demand, offer of judgment, and similar paper shall be served upon each of the parties." Although this rule expresses a general policy that parties should have notice of any activity in the case, rule 5 goes on to denote a limit to this policy. Under rule 5(a)(2)(B) "[njo service need be made on parties in default ... for failure to appear." Utah R. Civ. P. 5(a)(2) (emphasis added).

112 Although rule 5 clearly articulates that notice, including notice of default, need not be given to parties who fail to appear in a proceeding, the rule does not answer the question presented here: What does it mean to "appear"?

T13 River Crossings contends that the court of appeals erred when it concluded that only a "formal appearance" before a court, such as filing an answer, could constitute an appearance under rule 5(a) Directing our attention to federal cireuit court interpretations of the federal equivalent of rule 5, River Crossings promotes a more expansive definition of appearance, one that would include some level of informal contacts or negotiations between the parties. According to River Crossings, this more generous definition is most consistent with the policy of hearing cases on the merits and is more in accord with our case law and the Utah Standards of Professionalism and Civility.

T14 In contrast, Arbogast asks us to affirm the court of appeals' decision that only a formal appearance will suffice to trigger notice requirements under rule 5. Arbogast contends that this view is most consistent with our decisions in Central Bank & Trust Co. v. Jensen, 656 P.2d 1009 (Utah 1982) and Lund v. Brown, 2000 UT 75, 11 P.3d 277, and that this approach will most effectively foster a just, expedient, and predictable process.

T15 We hold that the court of appeals correctly determined that (1) a party must make a formal filing or submission to the district court in order to make an appearance under rule 5(a) and (2) although not required by rule 5, the Utah Standards of Profession alism and Civility encourage attorneys to attempt to provide a final notification to the opposing party before entering default judgment.

I.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State v. Wilcox
2025 UT 31 (Utah Supreme Court, 2025)
GENESIS AGGREGATES B v. TOLL SOUTHWEST
2025 UT 28 (Utah Supreme Court, 2025)
Jenco v. Valderra Land Holdings
2025 UT 20 (Utah Supreme Court, 2025)
Griffin v. Snow Christensen and Martineau
2025 UT 16 (Utah Supreme Court, 2025)
Wal-Mart v. Tax Commission
2025 UT App 28 (Court of Appeals of Utah, 2025)
Checkerprop Utah v. Butcher
2024 UT App 124 (Court of Appeals of Utah, 2024)
In re C.D.S...
2023 UT 11 (Utah Supreme Court, 2023)
Johansen v. Johansen
2021 UT App 130 (Court of Appeals of Utah, 2021)
Rain International v. Drockton
2021 UT App 68 (Court of Appeals of Utah, 2021)
Fuja v. Adams
2021 UT App 55 (Court of Appeals of Utah, 2021)
Rojas v. Montoya
2020 UT App 153 (Court of Appeals of Utah, 2020)
Young v. Hagel
2020 UT App 100 (Court of Appeals of Utah, 2020)
State v. Hatfield
2020 UT 1 (Utah Supreme Court, 2020)
Ross v. Ross
2019 UT App 104 (Court of Appeals of Utah, 2019)
Silva v. Silva
2018 UT App 210 (Court of Appeals of Utah, 2018)
KTM Health Care Inc. v. SG Nursing Home LLC
2018 UT App 152 (Court of Appeals of Utah, 2018)
Pilot v. Hill
2018 UT App 105 (Court of Appeals of Utah, 2018)
State v. Goins
2017 UT 61 (Utah Supreme Court, 2017)
Total Restoration Inc. v. Merritt
2017 UT App 162 (Court of Appeals of Utah, 2017)

Cite This Page — Counsel Stack

Bluebook (online)
2010 UT 40, 238 P.3d 1035, 656 Utah Adv. Rep. 5, 2010 Utah LEXIS 74, 2010 WL 1929423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arbogast-family-trust-v-river-crossings-llc-utah-2010.