Justia Utah Supreme Court Opinion Summaries

The case concerns a dispute between an executive and a start-up company arising from employment and compensation arrangements. The executive, recruited for his expertise in the hemp industry, was offered a below-market salary due to the company’s limited resources. To compensate for the reduced salary, he was granted stock options, which he exercised through a non-recourse promissory note. After discovering that the company had misrepresented important information about its technology and operations, the executive sued under Utah securities laws for making untrue statements of material fact.Following a bench trial, the Third District Court found the company had intentionally violated Utah Code section 61-1-1 but determined that neither party had presented adequate evidence regarding the “consideration paid for the securities.” When questioned about damages, the executive stated he could not calculate the value. The district court independently identified three potential methods for calculating damages, including the so-called “Note Theory,” which valued damages by the amount of the promissory note. The district court, however, found this approach too speculative and instead awarded damages based on the difference between the executive’s actual salary and the market rate, ultimately tripling the award due to the intentional violation.On appeal, the executive argued that the district court should have used the Note Theory to calculate damages. The Utah Court of Appeals concluded that the executive had not preserved this argument for appeal because he had not presented it to the district court. The Supreme Court of the State of Utah reviewed the case and affirmed the court of appeals. The Supreme Court held that, although a district court’s sua sponte consideration of an issue can sometimes preserve it for appeal, in this instance, doing so would not serve the principles of judicial economy or fairness. Therefore, the Note Theory was unavailable to the executive on appeal. View "Abu-Ulba v. Ananda Scientific" on Justia Law

A nonprofit entity, Sports Medicine Research and Testing Laboratory (Sports Medicine), sought a property tax exemption for its South Jordan facility, claiming it was used exclusively for charitable purposes. Sports Medicine performs testing for both professional sports organizations at market rates and for government agencies and charitable organizations at discounted or no cost. It argued that the revenue from market-rate testing supports its charitable mission and that its vacant property space is intended for future charitable use.The Salt Lake County Board of Equalization denied the exemption, stating the property was not used exclusively for charitable purposes. Sports Medicine appealed to the Utah State Tax Commission, which affirmed the Board's decision. Sports Medicine then sought judicial review from the Utah Supreme Court.The Utah Supreme Court held that the property did not qualify for a tax exemption. The court reasoned that while Sports Medicine's discounted testing for charitable organizations could be considered a charitable use, its market-rate testing for professional sports organizations was not. The court emphasized that generating profit, even if used to support a charitable mission, does not constitute a charitable use of property. Additionally, the court found that the vacant portion of the property, intended for future charitable use, did not meet the requirement for current exclusive charitable use. Consequently, the court upheld the Tax Commission's denial of the property tax exemption. View "Sports Medicine Research v. Tax Commission" on Justia Law

The case involves a 2009 loan transaction between TNE Limited Partnership (TNE) and the Muir Second Family Limited Partnership (the Muir Partnership) at a time when the Muir Partnership was dissolved. The plaintiffs, including the Muir Partnership, Dorothy Jeanne Muir, and Wittingham, LLC, sought to void the transaction. After a seven-day bench trial, the district court ruled in favor of the plaintiffs, declaring the transaction void and denying their request for attorney fees.TNE appealed, arguing that the transaction was voidable, not void, and the plaintiffs cross-appealed the denial of attorney fees. The Utah Supreme Court, in Wittingham III, agreed with TNE that the transaction was voidable and remanded the case to the district court to determine whether the transaction bound the dissolved Muir Partnership and whether TNE was entitled to legal or equitable remedies. The court also instructed the district court to reconsider the attorney fees issue if plaintiffs renewed it on remand.On remand, the district court concluded that Nick Muir, who executed the transaction on behalf of the Muir Partnership, lacked both actual and apparent authority to bind the Partnership. The court also found that the plaintiffs were injured by the transaction and could void it. However, the court again denied the plaintiffs' request for attorney fees, interpreting the trust deed's fee provision as not applicable to the plaintiffs' action to invalidate the transaction. TNE's subsequent rule 60(b) motion, arguing that new authority from the Utah Supreme Court changed the controlling law on apparent authority, was denied.The Utah Supreme Court affirmed the district court's rulings. It held that TNE failed to show any manifestation of the Muir Partnership’s consent to Nick’s authority, either direct or indirect. The court also found that the district court did not err in allowing the Muir Partnership to void the transaction and that the plaintiffs were not entitled to attorney fees under the trust deed. View "Wittingham v. TNE Limited Partnership" on Justia Law

In this case arising from the internal breakdown and judicial dissolution of H&N Holdings, LLC the Supreme Court reversed the orders of the district court ordering, sua sponte, the dissolution of H&N, holding that the district court erred.H&N was owned by Dianne Nelson and formerly managed by Vicki's husband, Burke Hills. Dianne filed a lawsuit seeking the dissolution of H&N and the removal of Burke as manager. In lieu of dissolution, H&N and Vicki filed elections to purchase Dianne's membership interest in H&N. The district court dismissed the elections and ordered H&N's dissolution, the removal of Burke as manager, and the appointment of a receiver to liquidate H&N's assets. The Supreme Court reversed, holding (1) H&N made its election as a matter of right, and the district court lacked the power to dismiss the election and order the dissolution of H&N; and (2) the district court violated Vicki's due process rights by ordering H&N's dissolution and Burke's removal as manager without notice or an opportunity to be heard. View "Nelson v. Hills" on Justia Law

The Supreme Court reversed the determination of the district court that a contract entered into by a dissolved partnership was void, holding that the contract was voidable.Two years after the Muir Second Family Limited Partnership was administratively dissolved, the former general partner of the partnership - Nicholas Muir - obtained a loan from the TNE Limited Partnership through a trust deed. Wittingham, LLC, a successor-in-interest to the Partnership, brought suit to declare the trust deed void and recover damages. The district court concluded that the trust deed was void because the Partnership was dissolved prior to the time Muir signed the trust deed. The Supreme Court reversed, holding that the trust deed was voidable because the relevant statutes failed to provide a clear and well-defined public policy indicating that the type of transaction here should be void and because the transaction deed did not harm the public as a whole. View "Wittingham v. TNE Limited Partnership" on Justia Law

In this longstanding dispute between attorney Gregory Jones and his former law firm, Mackey Price Thompson & Ostler, P.C. (MPTO), over the distribution of litigation proceeds the Supreme Court upheld the jury's $647,090 verdict on Jones's quantum meruit/unjust enrichment claims, holding that the district court did not abuse its discretion in admitting the testimony of Jones's expert witness.Jones claimed a right to some of the fees collected by MPTO in personal injury cases arising out of the use of the drug known as Fen-Phen. Jones asserted claims for fraudulent transfer, quantum merit/unjust enrichment, breach of fiduciary duty and sought an award of punitive damages and to impose a constructive trust on the funds held by MPTO. A jury ultimately entered a verdict against MPTO on a quantum meruit/unjust enrichment theory and dismissed or rejected Jones's remaining claims. After a trial, the district court concluded that the judgment extended to Mackey Price, LLC, an entity the court ruled was a successor in interest to MPTO. The Supreme Court reversed the dismissal of Jones's fraudulent transfer and punitive damages claims, the decision that a constructive trust was categorically unavailable, and the default determination that Mackey Price, LLC was a successor in interest to MPTO and otherwise affirmed the district court. View "Jones v. Mackey Price Thompson & Ostler" on Justia Law

The Supreme Court vacated the judgment of the district court dismissing Plaintiffs' complaint against Defendants for lack of personal jurisdiction, holding that the Utah Nonresident Jurisdiction Act compels adoption of the conspiracy theory of jurisdiction and that the case must be remanded for the district court to reexamine the claims and contacts and to apply the jurisdictional tests announced here.Plaintiffs sued Merrill Lynch, Pierce, Fenner & Smith, Goldman Sachs & Co., and related entities (collectively Defendants) for violations of the Utah Pattern of Unlawful Activity Act. Defendants moved to dismiss the complaint for lack of personal jurisdiction. The district court analyzed Plaintiffs' claims against Defendants collectively without analyzing the nature of each individual defendant's contacts as they related to each individual plaintiff's claims. The Supreme Court vacated the judgment, holding (1) because the district court analyzed Plaintiffs' claims and Defendants' contacts collectively, it may have distorted its analysis; and (2) Utah now recognizes a conspiracy theory of jurisdiction, and this case must be remanded to the district court with instruction to assess the conspiracy theory of jurisdiction. View "Raser Technologies, Inc. v. Morgan Stanley & Co." on Justia Law

The Supreme Court affirmed the district court's decision to exclude all evidence of Keystone Insurance Agency's alleged damage under Utah R. Civ. P. 26(d)(4) in Keystone's suit against Inside Insurance, the court's dismissal of all of Keystone's claims with the exception of Keystone's request for declaratory relief, and the court's dismissal of Inside's counterclaims, holding that the district court did not abuse its discretion.In its complaint, Keystone requested that the district court declare Keystone a member of Inside and sought to inspect certain records. Inside asserted several counterclaims. After the district court entered its judgment the Supreme Court affirmed, holding (1) Keystone failed to provide Inside with a viable computation of its claimed damages in compliance with Utah R. Civ. P. 26(a)(1)(C), and therefore, the district court properly excluded Keystone's damages evidence under rule 26(d)(4); (2) the district court properly denied Keystone's motion for reconsideration; and (3) the district court did not abuse its discretion by dismissing with prejudice Inside's expulsion counterclaim seeking expulsion of Keystone as a member of Inside pursuant to Utah R. Civ. P. 41(a)(2) and (c). View "Keystone Insurance Agency, LLC v. Inside Insurance, LLC" on Justia Law

The Supreme Court declined to overturn a rule established in St. Benedict’s Development Co. v. St. Benedict’s Hospital, 811 P.2d 194 (Utah 1991), in which the Court held that to prevail on a claim for intentional interference with contract the plaintiff must show that the defendant interfered through “improper means,” holding that “improper means” test remains a good rule.Plaintiff filed suit against Defendant alleging that Defendant intentionally interfered with Plaintiff’s contracts with its employees. Defendant moved for summary judgment, arguing that Plaintiff failed to provide proof of “improper means” to support its claim. The federal district court concluded that there appears to be no clear, controlling Utah law regarding the interpretation of “improper means” and certified the question to the Supreme Court. The Supreme Court held (1) the element of improper means is firmly established in Utah law and rests upon a firm legal footing, and therefore, this Court declines to overturn St. Benedict’s; (2) the definition of “improper means” provided in Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293 (Utah 1982), and St. Benedict’s is reaffirmed; and (3) to prove the element of improper means based on an alleged violation of an established industry rule or standard the plaintiff must provide evidence of an objective, industry-wide standard. View "C.R. England v. Swift Transportation Co." on Justia Law

In this complaint alleging fraud, negligent misrepresentation, and breach of fiduciary duty against Van Wagoner & Bradshaw, LLC, an accounting firm, and Coldwell Banker Commercial, the Supreme Court largely affirmed as to the issues raised in cross-petitions for certiorari but reversed and remanded as to the issue as to whether Plaintiff was entitled to a jury instruction on nondisclosure fraud.Reperex, Inc. brought this action after a business it purchased in a deal brokered by Coldwell failed. All of the claims against Coldwell were dismissed before trial. Two of the claims against Bradshaw were dismissed before trial, and the remaining fraud claim went to trial, where Bradshaw prevailed. The court of appeals affirmed as to Bradshaw but reversed as to Coldwell. Coldwell and Reperex filed cross-petitions for certiorari. The Supreme Court held (1) Coldwell could not be held liable despite a nonreliance clause in Coldwell’s contract with Reperex; (2) expert testimony was not required to sustain Reperex’s breach of fiduciary duty claim; (3) Reperex failed to establish a basis for overcoming protections available to Bradshaw under Utah Coe 58-26a-602; but (4) as to the lack of a jury instruction on nondisclosure fraud, the case must be remanded for a determination of whether Bradshaw owed Reperex a duty of disclosure under the common law. View "Reperex, Inc. v. Coldwell Banker Commercial" on Justia Law