Hartford Leasing Corp. v. State

Decision Date29 December 1994
Docket NumberNo. 930612-CA,930612-CA
Citation888 P.2d 694
PartiesHARTFORD LEASING CORPORATION, Plaintiff and Appellant, v. STATE of Utah, Defendant and Appellee.
CourtUtah Court of Appeals

Steven C. Tycksen, Murray, for appellant.

Jan Graham and Alan S. Bachman, Salt Lake City, for appellee.

Before DAVIS, GREENWOOD and ORME, JJ.

ORME, Associate Presiding Judge:

Plaintiff Hartford Leasing Corporation appeals the trial court's decision to grant, with prejudice, defendant State of Utah's Motion to Dismiss for Failure to Prosecute. We reverse and remand.

FACTS

Events leading up to the legal dispute at issue here are of little relevance to our decision, and thus we focus on the procedural facts. The State of Utah leased office space in a building located in Moab, Utah, owned by Hartford Leasing. On June 22, 1988, Hartford filed a complaint against the State, alleging breach of the lease agreement after the State quit the premises and ceased paying rent. 1 The State filed a Motion for More Definite Statement on August 25, 1988, pursuant to Utah Rule of Civil Procedure 12(e). The trial court granted the motion on September 28, 1988, and called for an amended complaint. Hartford did not file an amended complaint, although one was prepared by its attorney, Dale Gardiner.

Hartford filed for bankruptcy on December 1, 1988. On December 30, 1988, Gardiner filed a Notice of Withdrawal of Counsel and Notice of Bankruptcy, which was duly served on the State. Both notices were combined in a single document, which read as follows:

Dale F. Gardiner, attorney at law, withdraws as counsel for the plaintiff in the above entitled action.

NOTICE is also given that on December 1, 1988, Hartford Leasing Corporation filed a chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Utah. Counsel for Hartford Leasing Corporation is George H. Speciale, Esq., 5 Triad Center # 585, Salt Lake City, Utah 84180.

Hartford's bankruptcy case was concluded on October 29, 1990.

After Gardiner's notice, no further documents were filed in the instant action until March 26, 1993, when the State filed a Motion to Dismiss for Lack of Prosecution. In support of its motion, the State contended that Hartford failed to take any action in the case over a four-and-one-half year period and had not filed an amended complaint, in response to the Motion for More Definite Statement, within the ten-day period required by Rule 12(e) of the Utah Rules of Civil Procedure. However, the State had not, at any time after receiving word of Gardiner's withdrawal, notified Hartford, in accordance with Rule 4-506(3) of the Utah Code of Judicial Administration, that it must retain new counsel. By the terms of Rule 4-506(3), such notice must be given "before opposing counsel can initiate further proceedings."

On April 12, 1993, in response to the State's motion to dismiss, Hartford's new attorney, Steven Tycksen, filed a Notice of Appearance of Counsel, a Request for Scheduling, and Objections to Defendant's Motion for Dismissal, which also included a request for oral argument. On June 8, 1993, Hartford filed a Supplemental Memorandum in Opposition to Defendant's Motion to Dismiss and a Notice to Submit for Decision, which stated that "Plaintiff's Objection to Defendant's Motion for Dismissal ... is now at issue and ready for decision of the Court."

The trial court made three rulings related to the State's Motion to Dismiss. First, in its ruling issued June 21, 1993, the court granted the State's motion, finding that Hartford failed to move the case forward during the four-and-one-half year period since its initial filing. The court noted the State's failure to notify Hartford concerning the appointment of new counsel, but stated that this failure was remedied by giving Hartford adequate time to obtain new counsel and respond to the motion. Additionally, the court refused to accept Hartford's supplemental memorandum and thus did not consider the information contained therein.

Second, after receiving no objections to this decision, the trial court issued an Order of Dismissal for Lack of Prosecution with Prejudice on July 15. However, Hartford had submitted an objection to the June 21 ruling via facsimile, which was transmitted between 4:58 p.m. and 5:10 p.m. on July 15, but the order had already been filed when the transmission was received. In its objection, Hartford contended that the court should not have made its decision without hearing oral arguments, that dismissal with prejudice was inappropriate, that the court erred in considering the motion absent the State's compliance with Rule 4-506, and that the court erred in refusing to consider its supplemental memorandum.

Finally, on July 19, the court ruled on Hartford's objections by affirming its order to dismiss. It stated that Hartford's Notice to Submit for Decision waived its original request for oral argument and that supplemental memoranda are not permitted by Rule 4-501 of the Utah Code of Judicial Administration so that the court could not consider the additional information contained therein.

Hartford appeals.

ISSUES

Although Hartford raises a number of issues, the thrust of Hartford's appeal is that the trial court abused its discretion by dismissing, for failure to prosecute, Hartford's complaint. We therefore consider only the following two issues: (1) whether the court abused its discretion in granting the State's Motion to Dismiss when the State had failed to first comply with the requirements of Rule 4-506(3) of the Code of Judicial Administration and (2) whether the court erred in its interpretation of Rule 4-501 when it refused to accept Hartford's supplemental memorandum.

STANDARD OF REVIEW

In reviewing a trial court's decision to dismiss for failure to prosecute, we accord the trial court broad discretion and do not disturb its decision absent an abuse of discretion and a likelihood that an injustice has occurred. Charlie Brown Constr. Co. v. Leisure Sports, Inc., 740 P.2d 1368, 1370 (Utah App.), cert. denied, 765 P.2d 1277 (Utah 1987). In determining whether the court abused its discretion, we "balance the need to expedite litigation and efficiently utilize judicial resources with the need to allow parties to have their day in court." Meadow Fresh Farms, Inc. v. Utah State Univ., 813 P.2d 1216, 1219 (Utah App.1991). Of course, the goal of affording parties "an opportunity to be heard" is the essential purpose of the court system, and thus our system values this goal over that of judicial economy. Westinghouse Elec. Supply Co. v. Paul W. Larsen Contractor, Inc., 544 P.2d 876, 879 (Utah 1975).

A trial court's interpretation of a rule in the Utah Code of Judicial Administration presents a question of law reviewed for correctness. Wells v. Wells, 871 P.2d 1036, 1038 (Utah App.1994).

DISMISSAL FOR FAILURE TO PROSECUTE

In our consideration of a trial court's dismissal for failure to prosecute, we look to factors besides the mere elapse of time since the case was filed. Both the Utah Supreme Court and this court have considered, where appropriate, at least five additional factors: (1) "the conduct of both parties" ; (2) the opportunity available to each party to move the case forward; (3) what each party has accomplished in moving the case forward; 2 (4) the difficulty or prejudice imposed on the opposing party by reason of the delay; and (5) "most important, whether injustice may result from the dismissal." Westinghouse Elec. Supply Co. v. Paul W. Larsen Contractor, Inc., 544 P.2d 876, 879 (Utah 1975). Accord Country Meadows Convalescent Ctr. v. Department of Health, 851 P.2d 1212, 1215 (Utah App.1993). See K.L.C. Inc. v. McLean, 656 P.2d 986, 988 (Utah 1982); Utah Oil Co. v. Harris, 565 P.2d 1135, 1137 (Utah 1977); Meadow Fresh Farms, Inc. v. Utah State Univ., 813 P.2d 1216, 1219 (Utah App.1991). Application of these factors, to which we now turn, requires consideration of the " 'totality of the circumstances' " in order to determine " '[w]hether delay is a ground for the dismissal of an action.' " 3 Country Meadows, 851 P.2d at 1215 (quoting Department of Social Servs. v. Romero, 609 P.2d 1323, 1324 (Utah 1980)).

A. Conduct, Opportunity and Accomplishments of Parties
1. Effect of Bankruptcy Petition

Each party seeks refuge behind the pendency of the related bankruptcy proceeding: Hartford points to it as explanation for why it did nothing in the instant case for at least two years out of the more than four-year period of inactivity; the State suggests the bankruptcy filing precluded it from giving Hartford notice to appoint counsel.

The Bankruptcy Code does not offer complete shelter to either party as a means to escape their respective responsibilities in moving this case forward. See Maxfield v. Rushton, 779 P.2d 237, 241-42 (Utah App.) (Orme, J., concurring), cert. denied, 789 P.2d 33 (Utah 1989). Even assuming the State was prevented from filing the notice to appoint counsel by the automatic stay provision of 11 U.S.C. § 362(a) (1988), a proposition which is questionable in any event, 4 this would not explain why the notice was not given during the two-and-one-half year period following termination of the bankruptcy case.

While Hartford's bankruptcy posture imposed financial hardship and procedural complexities that offer some rationale for its failure to move the case forward, its hands were not completely tied. As a bankruptcy debtor, it could have pursued this case either as a Chapter 11 debtor in possession or through a trustee, 5 particularly where, as here, an outcome in its favor would have added assets to the bankruptcy estate. The bankruptcy trustee may hire, with court approval and "for a specified special purpose," an attorney to represent the bankrupt debtor in matters "in the best interest of the estate" but unrelated to the trustee's duties in estate administration. 11 U.S.C. § 327(e) (1988). See ...

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