Centennial Inv. Co., LLC v. Nuttall, 20060519-CA.

• Decision Date: 04 October 2007
• Docket Number: No. 20060519-CA.,20060519-CA.
• Citation: 2007 UT App 321,171 P.3d 458
• Parties: CENTENNIAL INVESTMENT COMPANY, LLC, a Utah limited liability company, Plaintiff and Appellant, v. Vanessa NUTTALL and Brook L. Nuttall, Defendants and Appellee.
• Court: Utah Court of Appeals

171 P.3d 458

2007 UT App 321

CENTENNIAL INVESTMENT COMPANY, LLC, a Utah limited liability company, Plaintiff and Appellant, v. Vanessa NUTTALL and Brook L. Nuttall, Defendants and Appellee.

No. 20060519-CA.

Court of Appeals of Utah.

October 4, 2007.

Rehearing Denied November 6, 2007.

Shawn D. Turner, South Jordan, for Appellant.

Steven C. Tycksen and Chad C. Shattuck, Murray, and Jay L. Kessler, Magna, for Appellee.

Before GREENWOOD, Associate P.J., DAVIS and McHUGH, JJ.

OPINION

McHUGH, Judge:

¶ 1 Centennial Investment Co., LLC (Centennial) appeals the decision of the district court granting summary judgment to Appellee, Vanessa Nuttall. We affirm. Both Judge Greenwood and Judge Davis concur in Sections I and II of this opinion. However, neither Judge Greenwood nor Judge Davis concurs in Sections III or IV, and thus, Judge Davis's opinion is the majority opinion on service of the request to remove the wrongful lien and attorney fees.

BACKGROUND¹

¶ 2 Brook L. Nuttall and Vanessa Nuttall, formerly husband and wife, were the joint owners of approximately five acres of real property in Herriman, Utah (the Herriman Property). The decree of divorce ending the Nuttalls' marriage, dated April 10, 2003, provided that they must mutually consent to any sale of the Herriman Property. The decree also provided that either of the parties could buy the other's interest in the Herriman Property.

¶ 3 On May 5, 2005, Brook executed a Real Estate Purchase Contract (REPC), accepting Centennial's offer to purchase the Herriman Property for $285,000. Vanessa was not a party to the negotiations leading up to the Centennial REPC and never executed that document. Nevertheless, Brook represented to Centennial that he had the authority to sell the Herriman Property. Centennial later learned of the divorce and attempted unsuccessfully to obtain Vanessa's signature on the Centennial REPC.

¶ 4 Shortly thereafter, Vanessa and Brook executed a separate REPC with Oakridge Development, whereby they agreed to sell the Herriman Property to Oakridge for $290,000. The Oakridge REPC, unlike the Centennial REPC, provided a real estate commission to a realtor who is also Brook's sister.

¶ 5 Centennial filed a complaint against the Nuttalls to enforce its rights under the Centennial REPC and also filed a notice of interest against the Herriman Property. Specifically, Centennial asserted claims for fraud and breach of contract against Brook and for breach of contract against Vanessa. In response, Vanessa filed a motion to dismiss the complaint and, on August 18, 2005, sent a letter to counsel for Centennial demanding the release of the notice of interest. On August 22, 2005, Vanessa filed a motion to nullify the notice of interest as a wrongful lien. See Utah Code Ann. § 38-9-7 (2005) (providing procedure to nullify a wrongful lien).

¶ 6 The trial court elected to treat the motion to dismiss as a motion for summary judgment and, after giving Centennial additional time to respond, granted summary judgment in favor of the Nuttalls on the breach of contract claims and also granted the motion to nullify the notice of interest as a wrongful lien. The court, however, denied summary judgment on the fraud claim against Brook. After an evidentiary hearing on damages, the trial court found that Vanessa had suffered actual damages in the amount of $805.41. The court then awarded Vanessa treble damages and attorney fees on her wrongful lien claim. See id. § 38-9-4(2) (Supp.2007) (providing for attorney fees, costs, and treble damages for failure to remove a wrongful lien). The trial court also certified its order in favor of Vanessa as final pursuant to rule 54 of the Utah Rules of Civil Procedure. See Utah R. Civ. P. 54. Centennial filed this appeal.

ISSUES AND STANDARD OF REVIEW

¶ 7 Centennial first contends that the trial court erred when it granted summary judgment in favor of Vanessa on the breach of contract claim. "Summary judgment is appropriate only when (1) `there is no genuine issue as to any material fact' and (2) `the moving party is entitled to a judgment as a matter of law.'" Poteet v. White, 2006 UT 63, ¶ 7, 147 P.3d 439 (quoting Utah R. Civ. P. 56(c)). "We review the [trial] court's decision to grant summary judgment for correctness, granting no deference to the [trial] court." Swan Creek Vill. Homeowners Ass'n v. Warne, 2006 UT 22, ¶ 16, 134 P.3d 1122 (quotations omitted).

¶ 8 Centennial also challenges the trial court's award of treble damages and attorney fees to Vanessa under Utah Code sections 38-9-1 to -7. See Utah Code Ann. §§ 38-9-1 to -7 (2005 & Supp.2007) (the wrongful lien statute). "Questions of statutory interpretation are . . . questions of law that are reviewed `for correctness, giving no deference to the [trial] court's interpretation.'" Pearson v. Lamb, 2005 UT App 383, ¶ 5, 121 P.3d 717 (quoting Board of Educ. v. Sandy City Corp., 2004 UT 37, ¶ 8, 94 P.3d 234).

ANALYSIS

I. The Centennial REPC was Unenforceable.

¶ 9 Centennial claims the trial court erred in holding that Vanessa's failure to execute the Centennial REPC rendered it unenforceable. According to Centennial, Brook's signature was sufficient to create a binding contract and to give Centennial an interest in the Herriman Property. We disagree.

¶ 10 Utah courts have repeatedly held that when real property is held in joint tenancy, the signature of both owners is necessary to satisfy the Utah statute of frauds. See Utah Code Ann. § 25-5-1 (1998) (codifying statute of frauds for real property); see also Krantz v. Holt, 819 P.2d 352, 353 (Utah 1991) ("If [ex-husband] retained a joint interest in the property, his written consent to the property's sale would be necessary, not because of any clause in the agreement, but because the Utah statute of frauds so requires."); Williams v. Singleton, 723 P.2d 421, 423 (Utah 1986) ("One joint tenant or tenant in common cannot bind his cotenant by a contract which he may make relating to the common property."); Eckard v. Smith, 527 P.2d 660, 662 (Utah 1974) (holding that statute of frauds prevented wife, as joint owner of property, from the obligation to convey building where she never signed the lease which contained the purported option to purchase). Centennial claims, however, that these cases stand only for the proposition that Brook could not convey Vanessa's interest. According to Centennial, the REPC was still enforceable to convey Brook's interest in the Herriman Property. Again, we disagree.

¶ 11 In Williams v. Singleton, the Utah Supreme Court affirmed the trial court's finding that "no binding agreement had been reached between the parties under an earnest money receipt and offer to purchase." 723 P.2d at 422. The buyers tendered $5000 in earnest money and made a written offer to purchase real property owned jointly by the sellers, as husband and wife. See id. at 422-23. The husband gave written authorization to his real estate agent to execute the contract, thereby accepting the offer to purchase. See id. The contract was never executed by the wife, either directly or through an authorized agent. See id. at 423. Subsequently, the buyers decided not to purchase the property and the sellers brought suit demanding that the $5000 earnest money be forfeited. See id. The trial court ruled in favor of the buyers, reasoning that the contract was unenforceable under the statute of frauds. See id. The Utah Supreme Court affirmed, holding that the wife's "failure to sign, either personally or through her agent, rendered the contract unenforceable." Id. ¶ 12 Despite the fact that the husband had executed the contract, the Williams court refused to hold the contract enforceable as to one joint tenant without the signature of the other, stating:

[Buyers] offered to purchase the joint interest of [sellers], and [husband] negotiated for the sale of the joint interest. When [wife] did not ratify in writing [husband's] acceptance within the one-day period contemplated by the offer, the offer never ripened into a contract, and [buyers] were entitled to have the earnest money deposit returned to them.

Id. at 425 (emphasis added). Likewise, in this case, it is undisputed that Centennial offered to purchase and Brook offered to sell the joint interest in the Herriman Property.² Indeed, the essence of Centennial's remaining fraud claim against Brook is that Brook misrepresented his ability to deliver the entire joint interest. Thus, both parties agree that the negotiations were for the purchase of the joint interest of Vanessa and Brook. Without Vanessa's signature, the Centennial REPC could not convey that joint interest under the statute of frauds and "the offer never ripened into a contract." Id. Therefore, the trial court correctly granted summary judgment in favor of Vanessa on the breach of contract claim.³

II. The Notice of Interest was a Wrongful Lien.

¶ 13 Centennial next claims that the trial court erred when it awarded Vanessa treble damages, costs, and attorney fees under the wrongful lien statute. We agree with the trial court that the notice of interest was a wrongful lien.

¶ 14 "Before a property owner may recover under the civil liability provisions of the wrongful lien statute, she must first show that the lien was wrongful." Eldridge v. Farnsworth, 2007 UT App 243, ¶ 48, 166 P.3d 639; see also Utah Code Ann. §§ 38-9-1 to -7. The wrongful lien statute provides that a lien is not wrongful if "at the time it is recorded or filed" it is "expressly authorized by . . . state or federal statute." Utah Code Ann. § 38-9-1(6)(a) (2005).⁴ Centennial argues that the notice of interest was not a wrongful lien because Centennial had an interest in the Herriman Property. However, there is no reference in the record before the trial court or in the briefs filed with this court to any specific statute authorizing the notice of interest. Indeed, Centennial was unable to identify any specific statutory authority during...