Dale K. Barker Co. PC CPA Profit Sharing Plan v. Turner

• Citation: 500 P.3d 940
• Decision Date: 04 November 2021
• Docket Number: No. 20200070-CA,20200070-CA
• Parties: DALE K. BARKER COMPANY PC CPA PROFIT SHARING PLAN, Appellee, v. Shawn D. TURNER, Appellant.
• Court: Utah Court of Appeals

500 P.3d 940

DALE K. BARKER COMPANY PC CPA PROFIT SHARING PLAN, Appellee,

v.Shawn D. TURNER, Appellant.

No. 20200070-CA

Court of Appeals of Utah.

Filed November 4, 2021

Shawn D. Turner, Appellant Pro Se

Scarlet R. Smith and R. Jesse Davis, Attorneys for Appellee

Judge David N. Mortensen authored this Opinion, in which Judges Jill M. Pohlman and Diana Hagen concurred.

Amended Opinion^*

MORTENSEN, Judge:

¶1 Appellant Shawn D. Turner and Appellee Dale K. Barker Company PC CPA Profit Sharing Plan (the Plan) entered into a written loan agreement (the Note) on July 30, 2010. The Plan loaned Turner $25,000, which he was supposed to repay within sixty days, but Turner failed to make any payments for over four years. However, pursuant to an agreement with the Plan's trustee, Dale K. Barker, payments were made on the loan in 2015 and 2017.

¶2 When a lawsuit was brought in 2018 to recover the outstanding balance on the loan, Turner moved for summary judgment on the grounds that the suit was barred by the statute of limitations. The district court denied that motion. It later held a bench trial, concluded that Turner had defaulted on the loan, awarded damages as set forth in the Note, and awarded attorney fees and costs to the Plan.

¶3 Turner appeals, and we affirm.

BACKGROUND

¶4 In the summer of 2010, Turner approached Dale Barker and asked him for a loan. Turner knew Barker through an existing attorney-client relationship: Turner had been performing legal collections work for Barker's company, Dale K. Barker Co. PC Certified Public Accountant (the Company), often on a 33% contingency fee basis. Eventually the loan was agreed upon, with the Plan—as opposed to the Company or Barker himself—as the creditor.

¶5 Turner drafted the Note memorializing the July 30, 2010 loan. Under the terms of the Note, the Plan loaned Turner $25,000, which was to be repaid to the "Note Holder"—the Plan—within sixty days of delivery of the loan proceeds. The Note further specified that it would accrue interest at a "yearly rate of 60.0% simple interest." In the event that Turner failed to pay off the loan within the required sixty days, the Note clarified that, at its discretion and at any time thereafter, the Note Holder could send Turner a written notice demanding that within thirty days he pay the full amount of the principal and interest accrued. Relatedly, the Note also contained a provision allowing for "late charges for overdue payments." (Cleaned up.)

¶6 Turner failed to pay off the loan within sixty days as required by the Note. In fact, Turner made no payments on the Note before it came due. However, the Plan did not immediately send Turner a written notice of default or demand that he repay the debt. In addition, Turner continued to perform legal work for the Company.

¶7 As of February 2015, Turner had still not made any payments on the loan, which had ballooned to approximately $90,000. But during that month, Barker received $120,000 in settlement proceeds from a case that Turner had worked on. This prompted Turner to send Barker an email on February 17, in which he stated,

As you are aware I am entitled to 1/3 o[f] the settlement. I want to apply all of that to the amount owing under the note to the [Plan]. Is that acceptable?

Later that same day, in response to an email that Barker sent, Turner stated,

My reference to the 1/3 arrangement was simply, with the intent to let you know that I wanted anything that would come to me to be applied to the debt I owe to the [Plan]. ... I was simply trying to make clear that I did not expect to receive anything that I would keep out of this upcoming payment.

Barker agreed and applied the one-third of the settlement proceeds to which Turner was entitled toward the outstanding loan. Thus, approximately $40,000 was paid on the loan in February 2015.

¶8 No further payments were made on the loan until November 2017. During October of that same year, Barker received $7,500, in settlement proceeds from another case that Turner had worked on. Pursuant to the agreement reached in February 2015, Barker applied towards the loan the one-third of these proceeds to which Turner was entitled. Accordingly, approximately $2,500 was paid on the loan in November 2017.

¶9 On February 9, 2018, Turner received a letter from a law firm "retained as counsel for [the Company] to assist in the enforcement of [the] past due loan." In relevant part, the letter stated,

As you know, on July 30, 2010, Dale K. Barker P.C. Profit Sharing Plan extended to you a loan in the [principal] amount of $25,000.00.... [Y]ou have failed in your obligations to repay the loan within the 60 day period.

Pursuant to the Note, Dale K. Barker Co. P.C. (the "Note Holder") hereby gives you notice of your default. ... If you do not pay the overdue balance ... in full within the time period described above, the Note Holder may pursue legal action to enforce the Note.

¶10 On April 3, 2018, having received no further payments on the loan, a lawsuit was filed to enforce the Note and recover the outstanding balance on the loan. But as originally filed, the complaint listed the Company as the plaintiff. Before Turner answered the complaint, it was amended so that the Plan instead appeared as the plaintiff.

¶11 Turner then filed a motion for summary judgment, in which he asserted that the lawsuit was untimely because it was filed after the applicable six-year statute of limitations. The district court denied Turner's motion, agreeing with the Plan that the partial payments made towards the debt in February 2015 and November 2017 tolled the statute of limitations, and thus the statute of limitations "r[a]n anew" with each of those payments. And as a result, the lawsuit, brought within six years of the partial payments, was timely.

¶12 The district court later held a bench trial, found that Turner had defaulted on the Note, and concluded that "Plaintiff [was] entitled to judgment on the Note." It thus awarded the amount outstanding on the loan: $113,750. Of this total award, $2,500 consisted of two late fees that the district court assessed—pursuant to a "late charges for overdue payments" provision in the Note—for the two payments made toward the loan after it was due: a $1,250 late fee for the payment in February 2015 and another $1,250 late fee for the payment in November 2017. (Cleaned up.) Turner objected to $1,250 of this award, arguing that the terms of the Note contemplated only one payment and thus only one late fee, regardless of the number of late payments. The district court rejected this argument.

¶13 Subsequently, the Plan filed a motion to recover its attorney fees and costs. This request was based on a provision of the Note that allowed the Plan to be reimbursed for these expenses. Turner argued that no expenses were recoverable under the Note because the Plan had failed to satisfy a condition referenced therein. Turner also argued that certain fees the Plan requested were not compensable. The district court rejected both arguments and awarded $32,774 in attorney fees and $527.50 in costs.

¶14 Turner appeals.

ISSUES AND STANDARDS OF REVIEW

¶15 First, Turner challenges the district court's denial of his motion for summary judgment, asserting that it erroneously concluded that the statute of limitations had been tolled. This is a legal question that we review for correctness. See Russell Packard Dev., Inc. v. Carson , 2005 UT 14, ¶ 18, 108 P.3d 741 ("The applicability of a statute of limitations and the applicability of [a tolling provision] are questions of law, which we review for correctness." (cleaned up)).

¶16 Second, Turner challenges $1,250 of the district court's damages award, asserting that this amount constitutes additional late fees not awardable under the terms of the Note. Because Turner is assailing the district court's interpretation of the Note, we review this issue for correctness. See Brady v. Park , 2019 UT 16, ¶ 29, 445 P.3d 395 ("We review a district court's interpretation of a contract for correctness.").

¶17 Third, Turner challenges the district court's award of attorney fees and costs pursuant to the Note's provision relating to the reimbursement of expenses. In doing so, Turner first argues that the district court erred in awarding any attorney fees or costs, asserting that the plain language of the Note precluded any such award. We review this issue for correctness. See id. ; see also Jensen v. Sawyers , 2005 UT 81, ¶ 127, 130 P.3d 325 ("The award of attorney fees is a matter of law, which we review for correctness."). Turner also argues that the district court erred in calculating the amount of attorney fees, asserting that certain fees awarded were not compensable. We review the district court's calculation of reasonable attorney fees for abuse of discretion but review any conclusions of law for correctness. See Gilbert Dev. Corp. v. Wardley Corp. , 2010 UT App 361, ¶ 16, 246 P.3d 131 ("Calculation of reasonable attorney fees is in the sound discretion of the trial court ... [but] we review a trial court's conclusions of law regarding attorney fees for correctness ...." (cleaned up)).

ANALYSIS

I. Statute of Limitations

¶18 Turner's first contention is that the district court should have dismissed the case because the six-year statute of limitations had run. The agreement is governed by the Uniform Commercial Code (U.C.C.), and the applicable statute of limitations is codified in Utah Code section 70A-3-118. In relevant part, the statute reads:

[A]n action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six years after the due date or dates stated in the note or ... within six years after the accelerated due date.

Utah Code Ann. § 70A-3-118(1) (LexisNexis 2009).

¶19 Although the lawsuit was filed more than six years after the loan was due, the district court found that the lawsuit was timely because the partial payments toward the debt in 2015 and 2017 tolled the running of the...