Wittingham v. TNE Limited Partnership

2024 UT 23, 554 P.3d 924
CourtUtah Supreme Court
DecidedJuly 18, 2024
DocketCase No. 20210677
StatusPublished
Cited by6 cases

This text of 2024 UT 23 (Wittingham v. TNE Limited Partnership) 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
Wittingham v. TNE Limited Partnership, 2024 UT 23, 554 P.3d 924 (Utah 2024).

Opinion

This opinion is subject to revision before final publication in the Pacific Reporter 2024 UT 23

IN THE

SUPREME COURT OF THE STATE OF UTAH

WITTINGHAM, LLC, THE MUIR SECOND FAMILY LIMITED PARTNERSHIP, and DOROTHY JEANNE MUIR, Appellees and Cross-appellants, v. TNE LIMITED PARTNERSHIP, BRUCE J. MALCOLM, and MAUREEN H. MALCOLM, Appellants and Cross-appellees.

No. 20210677 Heard January 11, 2023 Filed July 18, 2024

On Direct Appeal

Second District, Davis County The Honorable Michael D. DiReda The Honorable Robert J. Dale No. 090700547

Attorneys: James K. Tracy, Joshua L. Lee, Salt Lake City, for appellees and cross-appellants Trevor J. Lee, Park City, for appellants and cross-appellees

JUSTICE POHLMAN authored the opinion of the Court, in which CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE PEARCE, JUSTICE PETERSEN, and JUSTICE HAGEN joined.

JUSTICE POHLMAN, opinion of the Court:

INTRODUCTION ¶1 This is the fourth appeal in a case that has endured fifteen years of litigation. At its core, the case is about a 2009 loan transaction between TNE Limited Partnership (TNE) and the Muir WITTINGHAM, LLC v. TNE LIMITED PARTNERSHIP Opinion of the Court

Second Family Limited Partnership (the Muir Partnership or the Partnership) at a time when the Partnership was dissolved. The Partnership, along with Dorothy Jeanne Muir and Wittingham, LLC (collectively, plaintiffs), sued TNE and related parties to void the transaction. 1 After a seven-day bench trial, the district court granted plaintiffs’ requested relief. As the prevailing parties, plaintiffs requested attorney fees under the reciprocal fees statute, but the court denied the request. ¶2 Both sides appealed. Among other things, TNE contended that the transaction was voidable, not void, and plaintiffs asserted that the district court erred in denying their fees request. After two appeals that failed on jurisdictional defects, we reached the merits of several issues in Wittingham, LLC v. TNE Ltd. Partnership (Wittingham III), where we agreed with TNE that the transaction was merely voidable. 2020 UT 49, ¶¶ 80–82, 469 P.3d 1035. We reversed the district court’s determination that the transaction was void and remanded the case for further proceedings on whether the transaction bound the dissolved Muir Partnership and whether TNE was entitled to legal or equitable remedies. Id. ¶¶ 40–41. We further instructed the district court to reconsider the attorney fees issue if plaintiffs renewed it on remand. Id. ¶ 82. ¶3 Back in the district court, both parties contended that they were entitled to judgment on the trial record. TNE argued theories of why the transaction must be enforced, which plaintiffs challenged, and plaintiffs renewed their attorney fees request. The court ultimately concluded that plaintiffs could void the transaction, but it again denied their fees request. Before the court’s ruling was final, TNE asked the court to reevaluate its decision in light of new authority, but the court concluded that its decision was correct and entered judgment against TNE. ¶4 Both sides again appeal. TNE primarily challenges the district court’s rejection of its claim that the Muir Partnership is bound by the transaction under a theory of apparent authority. TNE also identifies several reasons why it claims the Partnership should not be allowed to void the transaction. We reject TNE’s

__________________________________________________________ 1 In their complaint, plaintiffs named many defendants related

to the TNE transaction, but only three—TNE, Bruce Malcolm, and Maureen Malcolm—are parties to this appeal. As the parties have done in their briefing, we refer to these appellants and cross- appellees collectively as TNE.

2 Cite as: 2024 UT 23 Opinion of the Court

claims either because TNE has not shown reversible error or because the issues are unpreserved. We also reject plaintiffs’ renewed challenge to the district court’s denial of their claim for attorney fees because the plain language of the trust deed on which plaintiffs’ claim depends does not allow fees in this case. BACKGROUND 2 ¶5 The Muir Partnership was a Utah limited partnership registered in January 1994 and administratively dissolved in May 2007. William Nicholas Muir (Nick) was the general partner, and his sister, Dorothy Jeanne Muir (Jeanne), and other family members were limited partners. 3 The Partnership owned two apartment buildings in Bountiful, Utah (the apartments). ¶6 In 2009, Nick secured a $450,000 loan to renovate the apartments into rentable condition, pledging the apartments as collateral. Within only a few weeks, Nick sought to refinance the loan and to again pledge the apartments as collateral. TNE learned of the lending opportunity and expressed interest. TNE soon became aware that there was “a partnership involved,” that Nick was the general partner, and that Nick’s sister, Jeanne, held an interest. And TNE learned from the apartment manager that Nick had fallen from the roof of the apartments a few years back, had suffered a head injury, and had been in a coma for four months. The manager expressed his view that Nick was “incompetent,” and TNE questioned Nick’s “authority to transact business” for the Partnership. ¶7 Around this same time, Nick discovered that the Partnership was administratively dissolved because its renewal paperwork had not been submitted. Nick was told that he “would have to re-file the company” under a “new name.” He then registered a new entity, “Muir Second Family Limited Partnership,” differing in name by omitting the word “The.” ¶8 Several title insurance companies considered insuring the transaction for TNE, but some expressed concern about the status __________________________________________________________ 2 “On appeal from a bench trial, we view and recite the evidence

in the light most favorable to the trial court’s findings.” Utah State Tax Comm’n v. See’s Candies, Inc., 2018 UT 57, ¶ 5 n.2, 435 P.3d 147 (cleaned up). 3 Because Jeanne and Nick share the same last name, we follow

the parties’ lead and refer to them by their first names.

3 WITTINGHAM, LLC v. TNE LIMITED PARTNERSHIP Opinion of the Court

of the Partnership and Nick’s authority to close the transaction. Eventually, TNE secured insurance and closed the deal. In connection with the closing, the parties signed a trust deed and promissory note (together, the TNE transaction), in which Nick pledged the apartments as collateral for a $435,000 loan. Nick signed the TNE trust deed and promissory note on behalf of the Partnership. The Litigation ¶9 Jeanne first learned about the TNE transaction after it was complete. When she discovered the TNE trust deed, she filed suit, both individually and on behalf of the Muir Partnership. Shortly thereafter, Nick transferred his interest in the Partnership to Jeanne, and, through a series of transactions, title to the apartments was eventually transferred to Wittingham, LLC, a company Jeanne managed. Wittingham then joined Jeanne and the Muir Partnership as a plaintiff in the litigation. ¶10 In the complaint, the Muir Partnership and Wittingham sought a judicial declaration that all actions taken by the Partnership after its administrative dissolution, including the TNE transaction, “were not for the purpose(s) of winding up the Partnership” and were “void ab initio.” Alternatively, they sought a declaration that the TNE transaction “is voidable and should be set aside” because Nick lacked the mental capacity to transact with TNE. Jeanne asserted claims of her own and claims with the Partnership, but she was not a party to these declaratory judgment claims. ¶11 TNE counterclaimed, seeking a declaration that the TNE trust deed “is valid and enforceable.” Later, in its trial briefing, TNE asserted in the alternative that the TNE trust deed was merely voidable, not void.

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Bluebook (online)
2024 UT 23, 554 P.3d 924, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wittingham-v-tne-limited-partnership-utah-2024.