Bangerter v. Petty

• Decision Date: 25 February 2010
• Docket Number: No. 20060511-CA.,20060511-CA.
• Citation: 228 P.3d 1250,2010 UT App 49
• Parties: Sonya Capri BANGERTER, Plaintiff and Appellee, v. Ralph PETTY, an individual; Jarmaccc Properties, LLC, a Utah limited liability company; and Jarmaccc, Inc., a Utah corporation; et al., Defendants and Appellants.
• Court: Utah Court of Appeals

228 P.3d 1250

2010 UT App 49

Sonya Capri BANGERTER, Plaintiff and Appellee, v. Ralph PETTY, an individual; Jarmaccc Properties, LLC, a Utah limited liability company; and Jarmaccc, Inc., a Utah corporation; et al., Defendants and Appellants.

No. 20060511-CA.

Court of Appeals of Utah.

February 25, 2010.

Ralph C. Petty, Salt Lake City, Appellant Pro Se and for Appellants.

James C. Haskins, Ryan M. James, and Thomas N. Thompson, Salt Lake City, for Appellee.

Before Judges ORME, BILLINGS, and GREENWOOD.¹

OPINION

BILLINGS, Senior Judge:

¶ 1 This case involves a sheriff's sale of Sonya Capri Bangerter's house to cover an outstanding dental bill. We previously addressed this case in Bangerter v. Petty (Bangerter I), 2008 UT App 153, 184 P.3d 1249, in which we held that Bangerter's claims were barred by the statute of limitations. See id. ¶ 21. Concluding that the statute of limitations had not expired, the Utah Supreme Court reversed our decision in Bangerter I and remanded the case so that we could address the remaining issues. See Bangerter v. Petty (Bangerter II), 2009 UT 67, 641 Utah Adv. Rep. 9, ¶ 1, 225 P.3d 874. Although the facts have been recited in both Bangerter I and Bangerter II, we revisit those relevant to this opinion.

¶ 2 Bangerter had an outstanding bill owing to her dentist, which was turned over to the North American Recovery Services collection agency (N.A.R.). On April 25, 1995, a judgment was entered against Bangerter for $307.46. On August 14, 1995, a trial judge signed a writ of execution commanding the sheriff "to collect the judgment, with costs, interest, and fees, and to sell enough of defendant's non-exempt real property to satisfy the same." On December 21, 1995, the sheriff filed a notice of real estate levy against Bangerter's house (the Property). The Property was sold to N.A.R. on March 5, 1996, and three days later, the sheriff signed a Real Estate Certificate of Sale Execution against the Property, which was recorded with the Salt Lake County Recorder's Office on March 28, 1996. That certificate of sale stated that the sheriff had given "due and legal notice," which implies he followed the notice requirements in effect at that time under rule 69(g) of the Utah Rules of Civil Procedure, see Utah R. Civ. P. 69(g) (2004).

¶ 3 On September 16, 1996, more than six months after the sale of the Property, the sheriff signed a sheriff's deed, deeding the Property to N.A.R. and noting that Bangerter had not redeemed the Property in the six-month redemption period. That sheriff's deed contained an error in the legal description of the Property. On January 5, 1998, the sheriff filed an amended sheriff's deed, correcting the legal description. N.A.R. delivered a quitclaim deed in favor of Jarmaccc Properties, LLC, transferring the Property to Jarmaccc. The deed was recorded on January 20, 1998.

¶ 4 On March 10, 1998, Bangerter filed a Chapter 13 bankruptcy petition. On May 14, 1998, Jarmaccc served Bangerter with a notice to quit, instructing her to vacate the Property but the notice could not be pursued because of the bankruptcy petition. On April 23, 1999, Bangerter filed a second petition in bankruptcy, this time listing Jarmaccc as a secured creditor and scheduling $1200 to be paid to Jarmaccc. Jarmaccc received a copy of Bangerter's plan but did not object, and accepted the $1200. On August 26, 2003, the bankruptcy was dismissed. On January 6, 2004, Bangerter filed this action against Jarmaccc, seeking to quiet title to the Property. Both parties filed motions for summary judgment, and the court ruled in Bangerter's favor on May 4, 2006.

¶ 5 On appeal, we determined that Bangerter's action was barred by the statute of limitations because she filed her suit in 2004, nearly nine years after the original judgment was entered against her. Bangerter I, 2008 UT App 153, ¶ 21, 184 P.3d 1249. Although we recognized that actions for quiet title do not have a statute of limitations, we concluded that Bangerter's action was not a true quiet title action because it was "necessarily predicated on a challenge to the validity of the sheriff's sale and the title deed which was a result of that sale." Id. Our decision was reversed by Bangerter II, when the supreme court determined that "the statute of limitations does not apply to quiet title actions where the claimant is in actual possession of the property in question under a claim of ownership." 2009 UT 67, ¶ 11, 225 P.3d 874. The supreme court remanded the case to us to address the remaining issues. See id. ¶ 18.

ISSUE AND STANDARD OF REVIEW

¶ 6 We now consider whether the trial court erred in granting Bangerter's motion for summary judgment. Summary judgment is appropriate only when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Utah R. Civ. P. 56(c). We "review a trial court's legal conclusions and ultimate grant or denial of summary judgment for correctness and view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party." Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citation and internal quotation marks omitted).

ANALYSIS

I. Collateral Attack/Voidable Versus Void Deed

¶ 7 The trial court found that "the original sale of Bangerter's property contained an incorrect legal description and thus created a defective title which failed to convey any title to Jarmaccc or any other entity." Jarmaccc contends that the incorrect legal description, later corrected, rendered the title merely voidable, not void. Therefore, Jarmaccc argues that Bangerter's claim is an improper collateral attack on the validity of the sheriff's sale.

¶ 8 It has long been the rule that "a voidable sale or a voidable deed cannot be attacked in a collateral proceeding. This must be done in a direct proceeding. Only void deeds or void proceedings are available for collateral attacks." Ammerman v. Linton, 279 Mo. 439, 214 S.W. 170, 173 (1919); see also Cumberland Bank v. Smith, 43 S.W.3d 908, 910 (Tenn.Ct.App.2000) ("A collateral attack on a prior judgment may be successful if the judgment is void because the court rendering the judgment acted in a manner inconsistent with due process of law. But a judgment is not subject to collateral attack for mere errors or irregularities committed by the court in the exercise of its jurisdiction. Errors other than lack of jurisdiction render the judgment merely voidable, and a voidable judgment can only be challenged on direct appeal." (citations and internal quotation marks omitted)).

¶ 9 Utah followed this general principle in Acott v. Union Carbide Nuclear Co. (Acott II), 10 Utah 2d 140, 349 P.2d 620 (1960), when the Utah Supreme Court refused to hear a counterclaim that merely disguised a collateral attack on a sheriff's sale. See id. at 621. Acott II was a "sequel" to Acott v. Tomlinson, 9 Utah 2d 71, 337 P.2d 720 (1959) (Acott I), in which a sheriff's deed was issued to Union Carbide. See id. In Acott II, third party defendant/appellant Tomlinson asked that the sheriff's sale be declared void, arguing that Union Carbide "knew or should have known that the execution sale was wrongful." Id. The Acott II court determined that Tomlinson's claim was improper because it was an attempted collateral attack on the title and therefore not adjudicable. See id.

¶ 10 Thus, as a threshold matter, we must determine whether the trial court erred in concluding the sheriff's sale was void. In the context of fraudulent conveyances, the Utah Supreme Court wrote that "when an act is void as to persons who have an interest in impeaching it, the act is not utterly void, but merely voidable. ... Some action must be taken by the complaining party to render a conveyance void." Baldwin v. Burton, 850 P.2d 1188, 1193 (Utah 1993). More recently, in Ockey v. Lehmer, 2008 UT 37, 189 P.3d 51, the Utah Supreme Court was asked to determine whether a conveyance of an interest in a ranch was void or merely voidable. See id. ¶¶ 15-24. In that case, one of the beneficiaries of a family trust contested a conveyance of his interests. See id. ¶ 10. The court wrote

A contract or a deed that is void cannot be ratified or accepted, and anyone can attack its validity in court. In contrast, a contract or deed that is voidable may be ratified at the election of the injured party. Once ratified, the voidable contract or deed is deemed valid. A deed that is voidable is valid against the world, including the grantor, because only the injured party has standing to ask the court to set it aside.

In general, the difference between void and voidable contracts is whether they offend public policy. Contracts that offend an individual, such as those arising from fraud, misrepresentation, or mistake, are voidable. Only contracts that offend public policy or harm the public are void ab initio.

. . . .

For a contract to be void on the basis of public policy, there must be a showing free from doubt that the contract is against public policy.

Id. ¶¶ 18-19, 21 (footnotes and internal quotation marks omitted).

¶ 11 Other jurisdictions have addressed this question in the context of sheriff's sales. In Independence One Mortgage Corp. v. Gillespie, 289 N.J.Super. 91, 672 A.2d 1279 (Ct. App.Div.1996), the Superior Court of New Jersey was asked to invalidate a sheriff's sale where the sale took place at 11:00 a.m. despite the statute requiring that such sales take place between noon and 5:00 p.m. See id. at 1280. That court relied on the rule that "a void act results where the public officer has no authority to act at all, whereas a voidable act results from the officer's imperfect execution of an otherwise lawful act" and determined that the sale was voidable, not void, because the sheriff had the appropriate authority to conduct the sale even if "it was imperfectly executed." Id. at 1281.

¶ 12 Similarly, in Lang v. Barrios, 472 N.W.2d 464 (N.D.1991),...