Ashton v. Learnframe, Inc.

2008 UT App 172, 185 P.3d 1135, 604 Utah Adv. Rep. 6, 2008 Utah App. LEXIS 159, 2008 WL 2053495
CourtCourt of Appeals of Utah
DecidedMay 15, 2008
DocketCase No. 20060943-CA
StatusPublished
Cited by3 cases

This text of 2008 UT App 172 (Ashton v. Learnframe, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ashton v. Learnframe, Inc., 2008 UT App 172, 185 P.3d 1135, 604 Utah Adv. Rep. 6, 2008 Utah App. LEXIS 159, 2008 WL 2053495 (Utah Ct. App. 2008).

Opinion

OPINION

GREENWOOD, Presiding Judge:

T1 Appellant American Pension Services, Inc. (APS) appeals the trial court's writ of execution allowing for the sale of Learn-frame, Inc.'s (Learnframe) property, arguing, among other things, that the trial court erred in concluding that Learnframe's transfer of property to APS was fraudulent. We dismiss the appeal for lack of jurisdiction.

BACKGROUND

T2 In October 2001, APS loaned Learn-frame $1,500,000. APS filed a Uniform Commercial Code financing statement with the Utah Division of Corporations, perfecting a security interest in a $1,500,000 receivable from Learn University as collateral for the loan to Learnframe. Approximately one year later, the IRS issued a $1,767,040.68 tax lien against Learnframe, and at about the same time, Learnframe reported that its total value was $3,876,816.

T3 In December 2002, Plaintiffs Kirt Ashton, Clair Bennett, Bradley Mitchell, Todd Nielsen, Brian Pratt, and Paul Radvin (the Employees) filed suit against Learn-frame, seeking payment for unpaid wages and benefits. Shortly thereafter, the Employees obtained a judgment against Learn-frame, which Learnframe has failed to satisfy. In an attempt to collect the judgment, the Employees instituted various supplemental proceedings, including conducting a debtor examination and subpoenaing APS, one of Learnframe's creditors. As a result of these inquiries, the Employees discovered that one month after they filed suit against Learnframe, Learnframe entered into an agreement with APS (the Agreement), whereby Learnframe purported to transfer ownership of all of its assets to APS. The Agreement provided that after Learnframe satisfied its $1,500,000 debt to APS, it could purchase all of its property back from APS for $1. The Agreement also stated that Le-arnframe could continue to possess and use the property it had transferred to APS if it *1136 paid all acerued property taxes and insurance premiums and maintained the equipment in working order. In the event that Learnframe became insolvent, APS could take immediate possession of all transferred assets.

4 4 The Employees filed for a writ of exe-ecution against all personal property in Learn-frame's possession, arguing that the transfer to APS was fraudulent and, therefore, did not preclude an execution sale on all of the property in Learnframe's possession. Le-arnframe was served with the writ of execution and, later, with notice of a sheriff's sale. 1 It objected to the sale and requested a hearing on the basis that it had "no method to pay the judgment" because it had transferred all of its assets to APS. APS also filed an Objection to Sheriffs Sale and Request for Hearing, which Learnframe joined. Steve Patrick, another Learnframe creditor, also filed objections to the sale. The court scheduled a hearing, and APS and Patrick were provided with notice. After the hearing, at which Learnframe, APS, and Patrick appeared and argued, the trial court concluded that the transfer to APS was fraudulent and, therefore, the Employees were entitled to proceed with the execution sale on the property in Learnframe's possession, with notice to purchasers of the IRS tax levy.

15 APS appeals, arguing that the district court improperly issued the order because (1) the applicable statute of limitations had run; (2) the district court deprived APS of its due process rights by failing to provide sufficient time and opportunity for discovery and placing the burden of proof on APS; and (8) the district court erred by making findings contrary to the evidence.

T6 The Employees respond that this court has no jurisdiction over this appeal because APS was not a named party in the action below. Alternatively, the Employees argue that APS failed to preserve its statute of limitations argument, the trial court's conclusion is supported by clear and convincing evidence, and APS was provided with sufficient due process. Finally, the Employees assert that this court should affirm and award them their costs and attorney fees incurred on appeal.

ISSUE AND STANDARD OF REVIEW

T7 Whether this court has jurisdiction over APS's appeal is a question of law that we review for correctness. 2 See Code v. Utah Dep't of Health, 2007 UT 43, ¶ 3, 162 P.3d 1097.

ANALYSIS

This Court Lacks Jurisdiction over APS's Appeal

T8 The Employees argue that this court should dismiss this appeal because APS was not a party to the action below. APS does not directly respond to this argument, but asserts that "(tlhe fact that APS's participation was so restricted and belated that [the Employees] can now make this [jurisdictional] argument demonstrates that due process was not afforded below."

T9 In a procedurally similar case, Brigham Young University v. Tremco Consultants, Inc. (Tremeo I), 2005 UT 19, 110 P.3d 678, the Utah Supreme Court ruled on a closely related jurisdictional issue. In that case, Brigham Young University (BYU) had previously obtained a judgment against Soft-Solutions, Inc. (Soft Solutions). See id. T8. The trial court entered a supplemental order extending liability for the SoftSolutions judgment to "the Duncan individuals and entities." Id. The Duncan individuals appealed the supplemental order, and the supreme court declined to address their appeal on the basis that they were never named in the action below nor were they ever served *1137 with process. See id. 4T 45-46. Specifically, the court stated, "Although the supplemental order ... provides that BYU's judgment against SoftSolutions may be enforced against assets of the Duncan individuals and entities, none of those individuals or entities were parties to the district court proceedings. As nonparties, they cannot appeal the supplemental order." Id. The court reached this holding in spite of "'serious concerns' over whether the ... supplemental order that authorized BYU to execute against the property of Duncan et al. satisfied the requirements of due process of law." Brigham Young Univ. v. Tremco Consultants, Inc. (Tremco II), 2007 UT 17, ¶ 27, 156 P.3d 782 (quoting Tremeo I, 2005 UT 19, ¶ 45, 110 P.3d 678).

' 10 We reach the same conclusion in this case. Notwithstanding any concerns about the due process afforded to APS, it was never named as a party. Thus, we have no jurisdiction over APS's appeal. We note, however, that APS was not entirely without a remedy because it could have filed a motion to intervene or a petition for an extraordinary writ. See Tremco I, 2005 UT 19, ¶ 46 n. 7, 110 P.3d 678; see also Tremco II, 2007 UT 17, ¶¶ 27-47, 156 P.3d 782 (addressing the Duncan individuals' claim because it was properly before the court on appeal from a final order denying their motion to intervene). '

T11 Under rule 24 of the Utah Rules of Civil Procedure,

[ulpon timely application anyone shall be permitted to intervene in an action ... when the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect that interest, unless the applicant's interest is adequately represented by existing parties.

Utah R. Civ. P. 24(a).

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Cite This Page — Counsel Stack

Bluebook (online)
2008 UT App 172, 185 P.3d 1135, 604 Utah Adv. Rep. 6, 2008 Utah App. LEXIS 159, 2008 WL 2053495, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ashton-v-learnframe-inc-utahctapp-2008.