Monday, January 23, 2006

Civil Procedure

D.A.R. v. State, 2006 UT App 114

D.A.R sought an injunction preventing the State from enforcing its sodomy and fornication laws. He claimed that he had engaged in “private, noncommercial, consensual oral sex and sexual intercourse with an unmarried woman” and that he intends to continue to have sex with unmarried women and “fears future criminal prosecution.”

The court threw out his suit on standing grounds, and the court of appeals affirmed. To have standing in Utah, a plaintiff must show one of the following three facts:

1) he has suffered a palpable injury;
2) no one else has a greater interest in the litigation than he; or
3) the issue is of sufficient public importance to grant standing.

The court of appeals noted that the State had not threatened to prosecute D.A.R and in fact had submitted an affidavit stating that it had no intention of prosecuting D.A.R. It also cited cases from the Tenth Circuit and from other panels of the court that had denied standing to citizens seeking to overturn Utah’s sodomy and fornication laws (see D.L.S v. Utah, 374 F.3d 971 (10th Cir. 2004); Berg v. State, 2004, UT App, 337, 100 P.3d 261).

Christiansen v. Union Pac. R.R. Co., 2006 IT App 117

Christiansen worked for Union Pacific in 1951 installing and removing asbestos containing components. In 1995 he retired because of breathing problems and went on disability. Although he suspected asbestosis, doctors diagnosed him with congestion, pneumonia, and other non-asbestos related conditions. In 2002, Christiansen filed suit against Union Pacific for negligence. Later that year he was diagnosed with asbestosis.

The trial court granted summary judgment Union Pacific’s claim that the three-year statute of limitations for FELA (Federal Employer’s Liability Act) claims had run. It denied Union Pacific’s motion for summary judgment on the merits.


(1) FELA negligence claims impose a lighter burden on plaintiff’s than ordinary negligence claims. The plaintiff need only show “slight negligence.” Christensen proffered sufficient evidence of negligence, by way of an affidavit from an asbestos expert, to survive summary judgment on the merits.
(2) The parties agree on the facts as they related to summary judgment, but disagree on their interpretation. The proper interpretation of the facts should therefore be left to the factfinder, and summary judgment was inappropriate.

Homeyer v. Stagg & Assoc., 2006 UT App 89

Homeyer violated a court order and was held in contempt. At the contempt hearing, Judge Lewis took evidence regarding the underlying claims. At the conclusion of the hearing, she held Homeyer in contempt, put him in jail for thirty days, and entered a final judgment for damages against Homeyer in the underlying suit.

The court of appeals affirmed his contempt citation but reversed the damages judgment. It clarified that a court may hear evidence about the underlying claim as part of the contempt hearing and may order damages caused by the contemptuous conduct. But, it may not award damages based on the underlying cause of action.

FYI: one who is held in contempt is a “contemnor.”

Burns v. The Honorable Ann Boyden, 2006 UT 14

This opinion is classic Durrant: clear and logical. I think he's arguably the best writer on the court. The first paragraph in the opinion pretty much sums the whole thing up:

This case presents two distinct issues: (1) whether Dr. Brian D. Burns may claim the physician-patient privilege as a shield against a state investigation into his allegedly fraudulent billing practices, and (2) whether a secrecy order obtained by the State respecting this investigation is constitutional. As to the first issue, rule 506 of the Utah Rules of Evidence provides a physician presumptive authority to claim the physician-patient privilege “on behalf of the patient.” We hold that the State has rebutted this presumption by demonstrating that Burns is asserting the privilege not on behalf of his patients but for his own benefit. As to the second issue, Utah law allows the State, with approval and oversight from a district court, to conduct a criminal investigation in secret. Despite the secrecy order obtained by the State, Burns has adequate information about the investigation, and there are adequate procedural safeguards in place to effectively protect Burns’s constitutional rights.
A couple of important points from the opinion. First, the physician-patient privilege issue was decided exclusively under rule 506, Utah Rules of Evidence. The court held that the rules of evidence, not Utah Code Ann. § 78-24-8(4), control physician-patient privilege issues in court. It treated section 78-24-8(4) as an “encroachment” on its rulemaking authority. The court also refused to recognize an insurance fraud exception to rule 506.

Second, the court clarified the analysis for when a physician may claim the privilege on behalf of a patient:

The rule states that the treating physician is presumed “to have authority . . . to claim the privilege.” Yet presuming authority would appear to presume a legal effect rather than a fact. In actuality, since a physician must prove all the basic facts to trigger the presumption that a patient would need to prove to claim the privilege, the only remaining fact for a physician to prove is that he is, in fact, claiming the privilege “on behalf of the patient” and not for his own benefit. In sum, the “presumed fact” under rule 506(c) is that the physician is claiming the privilege on behalf of the patient. Thus, to defeat a physician’s ability to claim a privilege once the physician has proven all the basic facts, a party needs to prove “that the nonexistence of [a physician’s intent to claim the privilege for the patient’s benefit] is more probable than its existence.” In other words, to rebut the physician’s authority, the challenging party must show that it is more likely than not that a physician is claiming the privilege in his own self-interest.
The court relied heavily on Utah Evidence Law by Kimball and Boyce for the above analysis. It concluded that Burns could not claim the privilege because the record demonstrated that he was not claiming the privilege on behalf of his patients, but on his own behalf. The court found particularly compelling Burns’ attack on a court imposed secrecy order under the Subpoena Powers for Aid of Criminal Investigation and Grant of Immunity Act. That order was about the only thing besides rule 506 guarding his patients’ privacy.


National Adver. Co. v. Murray City, 2006 UT App 75

Defendants Gene and Sherry Crawford won a fight with NAC over an outdoor advertising sign. The court of appeals affirmed the ruling in National Adver. Co. v. Murray City, 2003 UT App 332. After the remittitur issued, the Crawfords moved the trial court to reopen the judgment and amend their answer and crossclaim, under rule 59(e) or rule 60(b), Utah Rules of Civil Procedure, to include a breach of contract claim. The trial court granted their motion.

NAC appealed, and the court of appeals held that the trial court lacked jurisdiction to reopen the judgment and permit the Crawfords to amend their crossclaim. The Crawford's motion, filed more than a year after the judgment, was well beyond the ten days allowed to file a rule 59(e) motion and the three months allowed to file a 60(b) motion. The court specifically ruled that the filing of an appeal did not toll the time to file rule 59(e) or rule 60(b) motions. To someone familiar with the rules of appellate procedure, that seems axiomatic. Under rule 4(b), Utah Rules of Appellate Procedure, a rule 59(e) motion tolls the time to file a notice of appeal. So it makes no sense to say that a timely notice of appeal tolls the time file a rule 59(e) motion.


Aurora Credit Services, Inc. v. Liberty West Development, Inc., 2006 UT App 48

This line from Judge Dever, buried in a footnote in the court of appeals opinion, pretty much sums up the problem in this case: "All discovery in this case will be completed sixty days from today's date. Operative word is completed, gentlemen. This case is almost as old as my children."

Aurora willfully failed to comply with Judge Dever's discovery order, and now appeals the dismissal of its complaint with prejudice.

Aurora first claims that it didn't have to respond to the initial discovery requests because the requests were mailed to the wrong address. But Aurora actually received the requests a week after they were mailed, and "Utah courts have held that actual notice of discovery requests is sufficient to invoke rule 37" (civil procedure rule 37 governs motions to compel discovery and sanctions for violation of a discovery order). So common sense triumphs over cold technicality

Aurora also claimed that it did respond to the discovery order by serving written responses and objections within the time required by the order. But the court of appeals determined that Aurora's response "consisted primarily of objections." Since the objections were served well after the deadline to respond to the initial discover requests, the objections were waived. Aurora thus violated the discovery order by responding only with waived objections rather than information.

The court of appeals also determined that Aurora's violation of the discovery order was willful. So the district court did not abuse its discretion when it dismissed Aurora's complaint with prejudice.


Fenn v. Mleads Enterprises, Inc., 2006 UT 8

Brittney Fen received an unsolicited email from Mleads that did not comply with Utah’s Unsolicited Commercial and Sexually Explicit Email Act (“the Act”). The Act permitted her to sue Mleads for $10 plus attorneys fees and costs, which she did. The district court dismissed the case for lack of personal jurisdiction. The court of appeals reversed, and the supreme court granted cert to consider this question: whether asserting personal jurisdiction over a foreign corporation based on a single email sent into Utah satisfied due process?

As the court noted, the problem with analyzing personal jurisdiction based on contact via the internet is that the “a defendant, like Mleads, is generally unaware of the geographic location to which it sends an email.” In such cases, the purposeful availment test and the effects test are unhelpful because they require either intent or knowledge of the contact with the forum state.

So the court turned to a sliding scale test used in Zippo Manufacturing Company v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124—25 (W.D. Penn. 1997). Under that test, the court must determine “whether the defendant corporation actually engages in knowing ad repeated transmission of computer files over the Internet.” At one end of the scale are “passive” web sites that merely display information that anyone can access. These do not create personal jurisdiction. At the other end of the scale are companies that knowingly and repeatedly transmit computer files over the internet into the forum state. These companies are subject to personal jurisdiction. “The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.” The court looks to the type of activity and the level of exchange that occurs.

Fenn failed to show that Mleads email was sufficiently interactive to allow personal jurisdiction. The email did not create a business transaction with Fenn, it merely provided her with information. She never responded to the email and never contacted Mleads through any other means. Thus, Utah could not assert personal jurisdiction over Mleads.

Coincidentally, one month after Fenn filed her complaint against Mleads, Utah repealed the Unsolicited Commercial and Sexually Explicit Email Act. It did so because the feds passed Controlling the Assault of Non-solicited Pornography and Marketing (CAN-SPAM). CAN-SPAM pre-empts state law and sets a national standard for spam.

Really, the problem in this case isn’t personal jurisdiction, or the lack thereof. State’s just shouldn’t be trying to regulate what happens on the internet. The federal government is much better suited. Near the end of the opinion, the court points out the problem with states asserting personal jurisdiction over companies that violate their email laws:

Practically speaking, companies would be required to know the laws of each state and to be prepared to litigate in all fifty of them. Precisely because of this complication, the federal government preempted the Act and those similar in other states with CAN-SPAM, which state: “[t]here is a substantial government interest in regulation of commercial electronic mail on a nationwide basis.” The federal statute goes onto explain that state legislation regarding spam has been ineffective, “in part because, since an electronic mail address does not specify a geographic location, it can be extremely difficult for law abiding businesses to know with which of these disparate statutes they are required to comply.”


Cedar Professional Plaza, L.C. v. Cedar City Corp., 2006 UT App 36
Cedar Professional Plaza (“CPP”) sought to use the discovery rule to circumvent the one-year statute of limitations for filing a claim under the Utah Governmental Immunity Act (“the Act”). The trial court refused to apply the discovery rule and dismissed CPP’s complaint. The court of appeals affirmed.

CPP’s property was flooded when a pipe burst at a construction project supervised by Cedar City and on city property. CPP filed two notices of claim against Cedar City within the one-year period, but filed them with the wrong government agent (the proper agent was the city recorder). Thinking it had complied with the notice requirements of the Act, CPP then filed a civil lawsuit against the city under a theory of supervisory negligence. But since CPP had not strictly complied with the notice requirements of the Act, the trial court dismissed the action.

After the dismissal, and almost two and half years after the flood, CPP filed a new notice of claim with the city recorder and commenced a new action against the city in district court. The new complaint alleged both supervisory negligence and direct negligence. The city moved for summary judgment because the notice was filed more than one-year after the flood. CPP argued that the notice was timely under the discovery rule because it was filed within one year of when CPP learned of the facts which formed the basis for its direct negligence claim. The trial court disagreed with CPP and dismissed the complaint. CPP appealed.

The court of appeals affirmed. It held that the discovery rule did not apply to CPP’s claim, because CPP did not need to know about the city’s direct negligence to file a notice of claim. The court explained that the notice of claim did not need to meet the standards required to plead a claim for relief. It only had to inform the government of the nature of the claim, so the government could appraise its potential liability. The court noted that if CPP had filed its first notice with the correct agent, it could have later amended its complaint to include a cause of action for direct negligence.

The court also held that there was nothing exceptional about CPP’s case that warranted tolling the time under the equitable discovery rule. CPP knew from the start that it would have a claim against the city, but simply failed to properly notify the city.


Beacham v. Fritzi Realty Corp., 2006 UT App 35

Liberty Mutual, as insurer of Beacham’s employer, sought to intervene in a lawsuit between Beacham and Fritzi regarding injuries Beacham received while delivering a safe to Fritizi’s warehouse. Liberty claimed it had an interest in the lawsuit that could not be adequately protected without intervening. The trial court denied Liberty’s motion to intervene, and Liberty appealed. During the appeal, Beacham and Fritzi settled. The settlement included an amount set aside for Liberty that was equal to its payments to Beacham.

In the court of appeals, the parties’ arguments centered on whether Liberty’s interests were adequately represented by the existing parties. The court of appeals first noted that the question of which party bears the burden of proving inadequate representation had not yet been addressed by Utah courts. It then adopted the federal view of rule 24(a), under which the burden of proof is on the applicant. The burden is minimal, however, and the applicant need only present some evidence that the existing parties may not adequately represent its interests. The court also explained that when the interest of one party and the interest of the applicant are identical, there is a presumption of adequacy. But the presumption may be rebutted upon “a concrete showing of circumstances that make the existing parties representation inadequate.”

The court determined that Liberty’s interest and Beacham’s interest were “generally aligned.” Liberty thus had to provide some evidence why Beacham’s representation was inadequate in light of the settlement that already accounted for Liberty’s interest. Liberty had not provided any evidence of a divergence of interests, so the court of appeals affirmed the trial court.


Macris v. Neways, Inc., 2006 UT App 33

Macris appealed the denial of its motion to compel discovery and a grant of summary judgment against it. The court of appeals reversed the district court on both issues. It held that Macris’ interrogatories were relevant to its claim of attorneys fees. It also held that Neways could not file a summary judgment motion based on a lack of evidence to support Macris’ claim. The court followed the lead of the Utah Supreme Court in rejecting the federal interpretation of rule 56 in Celotex Corp. v. Catrett, 477 U.S. 317 (1986). Instead, it held that the moving party had attach its own affidavits to prove that the facts were undisputed.


Beaver County v. Property Tax Division and Pacificorp, 2006 UT 6

The supreme court refused to toll the five-year lookback period for escaped property taxes under Utah Code Ann. s 59-2-217(1). If you don't know what that means, you should only read on if you are really interested in equitable tolling.

Pacificorp paid a $2.6 billion property tax assessment in 1997. In 2000, the PropertyTax Division of the Utah Tax Commission ("Division") and Utah's counties discovered an error in Pacificorp's annual report for 1997 that might have caused some Pacificorp property to be undervalued. The counties urged the Division to issue an escaped property tax assessment for 1997.

The Division failed to take any action until 2002. On August 29, 2002, five years and a few months after the 1997 assessment, the Division issued an escaped property tax assessment. Although the assessment was outside the lookback period, the Tax Commission determined that the period should be equitably tolled because "it would be unfair to subject the Counties---which had put forth every effort toward the timely issuance of the escaped property assessments---to the consequences of the Division's inertia in doing so." Pacificorp filed a petition for redetermination against the Division, and the counties intervened.

The supreme court disagreed with the Tax Commission's application of equitable tolling. It noted that no Utah case had ever applied equitable tolling where the party seeking tolling could not properly invoke the discovery rule (i.e., excusable delay in discovering the claim before the limitations period expired). The Division knew about the 1997 claim well in advance of the end of the lookback period, so it could not invoke the discovery rule.

The court then held that there were no extraordinary circumstances to justify equitable tolling without satisfying the discovery rule. The court did not explain what would constitute extraordinary circumstances. It stated only that prejudice to a third party intervenor "does not constitute an irrational or unjust application of the limitations period."

Chief Justice Durham concurred in the result. She argued that equitable tolling of the lookback period should not rest solely on the discovery rule. Instead, she argued that the lookback period should be tolled where "the taxpayer itself is responsible for causing the lookback to expire before the Division makes an escaped property determination."


State v. All Real Property, 2005 UT 90

The short: Collateral estoppel prohibits raising new claims on the same issue in successive rule 60(b) motions.

The too long: The State was seizing property under the controlled substances act, 58-37-13. The defendant never responded to the notice of forfeiture, and the district court entered a default judgment. The defendant filed a 60(b) motion for relief from the judgment. He argued that under 58-37-13, the notice of forfeiture had to be personally served. The State had mailed it.

The district court denied relief, ruling that service by mail was proper. Defendant claimed in the court of appeals that the complaint also had to be personally served. The court of appeals dismissed that argument because defendant did not assert it in the trial court.

Defendant did not seek review of the court of appeals decision. Instead, he filed a new 60(b) motion in which he renewed his claim that the complaint had to be personally served. Both the district court and the court of appeals held that defendant waived the claim by not raising it in the first 60(b) motion.

The supremes agreed. This is simple collateral estoppel. The defendant could have raised the claim in his first 60(b) motion. He didn't, so he's estopped from raising it in his second motion. "[A] party is precluded from relitigating issues which were once adjudicated on the merits and have resulted in a final judgment." If defendant didn't like the outcome of his first 60(b) motion, he should have petitioned for cert.


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