Butler v. Wilkinson
| Citation | 740 P.2d 1244 |
| Decision Date | 03 April 1987 |
| Docket Number | No. 18486,18486 |
| Court | Utah Supreme Court |
| Parties | Samuel J. BUTLER, Donald H. Toomer and Roberta Toomer, Plaintiffs and Respondents, v. Oral J. WILKINSON, Edna Mae Wilkinson, and Tim Themy, Defendants and Appellants. Pearl SHAW, Samuel J. Butler, Donald H. Toomer, and Roberta Toomer, Plaintiffs and Respondents, v. Oral J. WILKINSON and Edna Mae Wilkinson, Defendants and Appellants, and Stephen L. Christensen and James L. Christensen, individually and d/b/a W.C. Investment Company; State Savings & Loan Association; Tim Themy, a/k/a Themistoklis Kotranakis; Zions First National Bank; Edward P. Ramras; Hart, Schaffner & Marx, Inc.; Whitney Travel Service, Inc.; Knight Adjustment Bureau, Inc.; Gene Leo; Credit Bureau of Salt Lake; Dene R. Lawson and Helen Lawson, Defendants and Respondents. |
Steven H. Gunn, Ray, Quinney & Nebeker, Salt Lake City, for defendants and appellants.
David H. Schwobe, Turner, Perkins & Schwobe, Salt Lake City, for Shaw.
W. Clark Burt, Callister, Duncan & Nebeker, Salt Lake City, for Zions First Nat. Bank.
Gary A. Weston, Bradford C. Nielson, Nielsen & Senior, Salt Lake City, for Christensen.
Francis J. Nielson, Arnovitz, Smith & Nielson, Salt Lake City, for Hart, Schaffner & Marx.
Tim Themy, Salt Lake City, for defendants and respondents.
Brent R. Chipman, McMurray, Anderson & McIntosh, Salt Lake City, for Ramras.
John D. Parken, Salt Lake City, for Butler and Toomer.
J. Franklin Allred, Salt Lake City, for Lawson.
I. THE FACTS
This case started as two separate lawsuits. They were consolidated for trial and are here on a consolidated appeal. As will appear, the facts are complex and the legal issues both complicated and far-reaching in their effect. The principal issues are (1) whether judgment liens attached to land subject to an installment land sale contract continued in effect after the seller of the land retook the property from the buyer; and (2) whether the vendee's transfer of his interest in the land under the contract to the vendor constituted a fraudulent conveyance as to the vendee's judgment creditors under the Utah Fraudulent Conveyance Act. There are also a number of other substantive and procedural issues which must be resolved in this complex case.
The first case, Butler v. Wilkinson, designated Civil No. C79-3912 in the trial court, is a fraudulent conveyance case. On June 15, 1979, Samuel J. Butler, Donald H. Toomer, and Roberta Toomer, all judgment creditors of Tim Themy, filed a complaint against Oral and Edna Mae Wilkinson and Themy alleging that Themy's transfer of the subject land, his interest in an FCC broadcast license, and personal property consisting of miscellaneous broadcast and broadcast-related equipment was void as a fraudulent conveyance under § 25-1-2 of the Utah Fraudulent Conveyance Act because Tim Themy was insolvent at the time of the transfer. The plaintiffs also alleged that the transfers were void under § 25-1-7 because they were made to hinder, delay, and defraud the plaintiffs' efforts to enforce their judgments against Themy. The complaint asked that Themy's transfer of property to the Wilkinsons be ruled a fraudulent conveyance and therefore null and void and that "the interest or interests of defendant Themy in the above described property be applied against the judgments of plaintiffs herein."
The second case, Shaw v. Christensen, is a judgment lien case. On September 13, 1979, the same plaintiffs as in Butler v. Wilkinson, joined by Pearl Shaw, filed a complaint against Tim Themy, Stephen L. and James Christensen, the Wilkinsons, 1 and a number of Themy's creditors seeking a declaration that their judgment liens attached to the subject land that the Christensens purchased from the Wilkinsons after they took it back from Themy. The Christensens purchased the property in question from the Wilkinsons after Themy and Wilkinson mutually terminated the installment land sale contract between them. This contract, with Themy as purchaser, was in default, and Themy, at Wilkinson's request, also quitclaimed his interest in the land to the Wilkinsons.
The plaintiffs in the second case also named the following judgment creditors of Themy as defendants to establish the priority of their judgment liens: Zions First National Bank; Edward P. Ramras; Hart, Schaffner & Marx, Inc.; Whitney Travel Service; Knight Adjustment Bureau, Inc.; Gene Leo; Credit Bureau of Salt Lake; and Dene and Helen Lawson. Zions, Ramras, Hart, Schaffner & Marx, the Lawsons and Gene Leo answered the complaint and requested determinations of the validity and priority of their liens. Gene Leo did not appear at trial. Whitney Travel Service, Knight Adjustment Bureau, Inc., and Credit Bureau of Salt Lake did not answer or appear. Those defendants who did not appear at trial were defaulted, and any liens they might have had against the subject property were voided.
The Christensens filed a cross-claim against the Wilkinsons claiming damages for fraud and breach of warranty for their not defending Christensen's title to the land. In turn, the Wilkinsons counterclaimed against the Christensens to foreclose the Wilkinsons' trust deed because the Christensens ceased making payments on the note for the purchase of the land. The Christensens' cross-claim and the Wilkinsons' counterclaim have been settled.
In Shaw, the trial court held that the Christensens were good faith purchasers for value. The court, therefore, refused to impress judgment liens on the property in favor of the judgment creditors and quieted title to the land in the Christensens. The court also refused to decree a foreclosure of the Wilkinsons' trust deed on the ground that Oral J. Wilkinson's negligent omissions in explaining the status of the ownership of the land to the Christensens equitably estopped the Wilkinsons from foreclosing the trust deed against the Christensens, but that they were not sufficient to constitute actionable fraud. The trial court awarded the Christensens attorney fees of $25,682.05 for breach of warranty.
In Butler, the fraudulent conveyance case, the trial court ruled that Themy's conveyance to the Wilkinsons was a fraudulent conveyance under § 25-1-7 of the Utah Fraudulent Conveyance Act and imposed a constructive trust on the entire unpaid balance of the $600,000 purchase price the Christensens still owed the Wilkinsons for the subject property. The beneficiaries of the constructive trust were declared to be plaintiffs Samuel J. Butler and the Toomers and intervenors Pearl Shaw and Edward Ramras. In addition, the court awarded the same relief to Dene R. and Helen Lawson, Hart, Schaffner & Marx, Inc., and Zions First National Bank, all of whom were judgment creditors of Themy and were parties in the Shaw case (the lien case), but not the Butler case. The court also entered a personal judgment in the sum of $142,280.35 against the Wilkinsons and in favor of the same parties who were made beneficiaries of the constructive trust declared by the court. This amount apparently represents what Christensen had already paid to the Wilkinsons as earnest money, down payment, and partial payment on the note for the conveyance of the subject land. The judgment, however, was stayed pending payment of the remainder of the purchase price by the Christensens into the constructive trust.
The appellants, Oral J. and Edna Mae Wilkinson, appeal, inter alia, from the judgment and the imposition of the constructive trust. The plaintiffs in both the Shaw and Butler cases are hereafter usually collectively referred to as the respondents or the judgment creditors. The parties in Shaw cross-appeal the refusal of the court to impose liens on the property which is now in Christensens' ownership.
On May 26, 1976, Oral Wilkinson and his wife, Edna Mae, executed a uniform real estate contract to sell a parcel of land in Salt Lake County and radio broadcasting equipment located on the land to Tim Themy for $360,000. The contract required no down payment, nine percent interest, monthly installment payments of $1,000 for the first two years, and $4,000 per month thereafter until the purchase price and the interest were paid in full. Since the initial $1,000 monthly payments did not cover the monthly interest, which accrued at $2,700 for the first month alone, the total amount Themy was required to pay increased during the first two years as the unpaid interest was added to the principal. Themy made payments during the first eleven months of the contract, but paid nothing on the contract after June, 1977. As a result, Themy did not reduce the principal owed the Wilkinsons during the life of the contract. Nevertheless, the Wilkinsons initiated no formal contractual or judicial actions to forfeit or rescind the contract until June 5, 1978, when Themy quitclaimed the property back to the Wilkinsons and the parties entered into an indemnity agreement which nullified the land sale contract.
Themy, working with the Wilkinsons, did, however, bring legal proceedings to foreclose the interest Seagull Enterprises, Inc., had in the same property pursuant to two earlier executory contracts between the Wilkinsons and Seagull. One contract was for the sale of the same real estate as is involved in this case, and one contract was for the sale of radio broadcasting equipment and an FCC broadcast license. Both contracts were in the form of uniform real estate contracts. Seagull defaulted on both contracts after it made the required down payments to Wilkinson. Wilkinson gave Seagull notice after its default that its interests would be forfeited if the contracts were not brought current within five days. Seagull failed to do so, but Wilkinson took no further action against Seagull. Instead, he contracted to sell the land to Themy, who subsequently filed a suit and obtained a decree...
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Southport Congregational Church—United Church of Christ v. Hadley
...the contract is one under which the vendor would be subject to a decree for specific performance" [emphasis added] ); Butler v. Wilkinson, 740 P.2d 1244, 1255 (Utah 1987) ("[t]he doctrine gives a vendee the right to obtain a decree of specific performance from a court of equity" [emphasis a......
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