Jeffs v. Stubbs

• Decision Date: 01 September 1998
• Docket Number: No. 960454,960454
• Citation: 970 P.2d 1234
• Parties: 351 Utah Adv. Rep. 3 Rulon T. JEFFS, Kenneth Steed, James K. Zitting, Fred M. Jessop, Winston K. Blackmore, LeRoy S. Jeffs, Truman I. Barlow, and Parley J. Harker, trustees for the United Effort Plan, a Utah Trust, Plaintiffs, Appellants, and Cross-Appellees, v. Cora Fischer STUBBS, David L. Stubbs, John M. Williams, Merrill Harker, Harvey J. Dockstader, T. David Dockstader, Fayila M. Williams, Marko J. Dutson, Ray D. Timpson, George R. Hammon, Don D. Timpson, J. Legrand Hammon, John W. Timpson, Claude Cooke, Cyril Bradshaw, J. Michael Pipkin, Connell Bateman, Thomas J. Williams, Benjamin Bistline, Donald B. Cox, Defendants, Appellees, and Cross-Appellants.
• Court: Utah Supreme Court

Page 1234

970 P.2d 1234

351 Utah Adv. Rep. 3

Rulon T. JEFFS, Kenneth Steed, James K. Zitting, Fred M Jessop, Winston K. Blackmore, LeRoy S. Jeffs, Truman I Barlow, and Parley J. Harker, trustees for the United Effort Plan, a Utah Trust, Plaintiffs, Appellants, and Cross-Appellees, v. Cora Fischer STUBBS, David L. Stubbs, John M. Williams Merrill Harker, Harvey J. Dockstader, T. David Dockstader Fayila M. Williams, Marko J. Dutson, Ray D. Timpson, George R. Hammon, Don D. Timpson, J. Legrand Hammon, John W. Timpson, Claude Cooke, Cyril Bradshaw, J. Michael Pipkin, Connell Bateman, Thomas J. Williams, Benjamin Bistline, Donald B. Cox, Defendants, Appellees, and Cross-Appellants.

No. 960454.

Supreme Court of Utah.

Sept. 1, 1998.

Rehearing Denied Nov. 18, 1998.

Reed L. Martineau, Rodney R. Parker, Salt Lake City, for plaintiffs, appellants and cross-appellees.

Raymond S. Berry, Salt Lake City, for the United Effort Plan Trust.

Nicholas E. Hales, Reid W. Lambert, Salt Lake City, for defendants, appellees, and cross-appellants.

ZIMMERMAN, Justice:

This case involves a dispute over the occupancy of land between twenty-one individuals ("the claimants") and the United Effort Plan Trust ("the UEP"). The claimants built improvements on land located in Hildale, Utah, and Colorado City, Arizona, which they occupy but which is owned by the UEP. Claimants filed an action in Washington County, Utah, to determine their rights in the UEP land they occupy.

Claimants asserted ten causes of action: for relief under the Utah Occupying Claimants Act, and for breach of express contract, breach of implied contract, negligent misrepresentation, constructive fraud, estoppel, unjust enrichment, breach of fiduciary duty, accounting, and distribution of trust. The trial court separated the first seven claims relating to the claimants' property rights for trial, holding in abeyance the three trust-based issues. After trial, the court relied on an unjust enrichment theory to hold that the claimants were entitled to occupy the UEP land during their lifetimes or to receive compensation for the improvements they made. The court imposed a constructive trust in favor of the claimants. The trial court denied relief on the three trust-based claims because it concluded that the UEP was a charitable, not a private, trust.

Each party appealed. The UEP argues that (i) the trial court erred in awarding claimants a continuing interest in the land on an unjust enrichment theory and (ii) giving the claimants a continuing interest in the land infringes on the remaining UEP members' free exercise of religion and therefore violates the Utah and United States Constitutions. On their cross appeal, the claimants argue that the trial court erred (i) by applying the wrong legal standard to their claim under Utah's Occupying Claimants Act ("the Act") and (ii) in finding that the UEP is a charitable trust. We reject the UEP's arguments, affirm the trial court's unjust enrichment ruling, reverse its conclusion that the trust is charitable, reverse its interpretation of the Utah Occupying Claimants Act, and remand for further proceedings. Before proceeding to our analysis, we set forth the facts taken from the trial court's extensive findings.

Sometime in the late nineteenth century, some members of the Church of Jesus Christ of Latter-Day Saints organized a movement called the Priesthood Work ("The Work") to continue the practice of plural marriage outside that church. In the early part of this century, The Work's leadership--the Priesthood Council--decided to settle its membership in an isolated area to avoid interference with their religious practices. In approximately the 1930s, The Work selected an area composed of Hildale, Utah, and Colorado City, Arizona--an area now known as Short Creek. The Priesthood Council secured a large tract of land in this area, and adherents of The Work began to settle there.

The Work continued to secure additional land in the area. Commonly, its adherents bought land and deeded it to The Work. Eventually, the leadership of The Work formed a trust to hold title to the land. This trust failed, and, for the most part, the land was deeded back to those who contributed it. In 1942, the Priesthood Council signed and recorded in Mohave County, Arizona, a Declaration of Trust for the United Effort Plan. After the Priesthood Council formed the UEP, adherents deeded most of the land that had been held by the first trust to the UEP. Over the years, the UEP acquired more land as adherents obtained and deeded it to the trust. The UEP currently owns all the land occupied by the claimants.

From its inception, the UEP invited members to build their homes on assigned lots on UEP land. Through this system, the UEP intended to localize control over all local real property and to have the religious leaders manage it. Members who built on the trust land were aware that they could not sell or mortgage the land and that they would forfeit their improvements if they left the land. However, the UEP did encourage its members to improve the lots assigned to them and represented to its members that they could live on the land permanently, by using such phrases as "forever" or "as long as you wanted." The leaders also told members that having a home on UEP land was better than having a deed because creditors could not foreclose upon the land for members' debts.

Sometime during the late 1960s or early 1970s, dissension over a doctrinal issue arose among adherents of The Work, causing a split in the Priesthood Council. The dissension broke into the open in 1984 when adherents of The Work split into two groups: One group, led by Rulon T. Jeffs ("Jeffs"), acquired control of the UEP. A second group, led by J. Marion Hammon and Alma Timpson, includes most of the claimants in the present case. ¹

In 1986, Jeffs declared that all those living on UEP land were tenants at will. Before this declaration, neither the UEP nor any of its representatives had told the claimants that they were tenants at will. In 1987, the claimants filed an action in the Federal District Court for the District of Utah, asking the court to determine their rights in the property. The UEP, in turn, filed an unlawful detainer action and several quiet title actions against some of the claimants in state court in 1989 and 1993. The state court stayed these cases pending resolution of claimants' federal action. In 1993, the federal district court dismissed the federal claims for lack of subject matter jurisdiction and dismissed the pendent state law claims without prejudice. Shortly thereafter, the claimants filed an action in Utah's district court in Washington County. The state court consolidated their action with the UEP's previously filed unlawful detainer action and several quiet title actions.

In these consolidated actions, the claimants presented a number of claims, the most pertinent of which is that they are entitled to their lots under the Utah Occupying Claimants Act, see Utah Code Ann. §§ 57-6-1 to -8, and, alternatively, that the UEP has been unjustly enriched by their improvements to the land. After a bench trial, the judge made findings of fact and granted claimants relief only on their unjust enrichment claim. It found as a matter of statutory interpretation that they were not covered by the Utah Occupying Claimants Act.

On appeal, the claimants argue that the trial court erred in applying the Act. They also argue that the trial court erred in finding that the UEP is a charitable, not a private, trust--a finding that precluded claimants from prevailing on their claims related to the conduct of the trustees. For its part, the UEP asserts that the trial court erred in granting claimants equitable relief, primarily because application of equitable principles to a religious organization violates the Utah and United States Constitutions. We address each issue in turn.

The standard of review for the trial court's interpretation of the Act is straightforward. ² Because a district court's interpretation of a statute is a legal question, we review its ruling for correctness. See MacKay v. Hardy, 896 P.2d 626, 630-31 (Utah 1995). On the other hand, we uphold a trial court's findings of fact unless they are "clearly erroneous." See Drake v. Industrial Comm'n of Utah, 939 P.2d 177, 181 (Utah 1997). Because appellant did not provide a trial transcript on appeal, we assume competent and substantial evidence supported the trial court's extensive factual findings. See Goodman v. Lee, 589 P.2d 759, 760 (Utah 1978) ("When no transcript is furnished on an appeal it is presumed that the evidence given was sufficient to sustain the judgement."); Walker Bank & Trust Co. v. Neilson, 26 Utah 2d 383, 490 P.2d 328, 329 (1971) ("The appellant elected not to bring before us any of the testimony presented to the trial court, and so we must presume such findings as were made to be based upon competent and substantial evidence."). Therefore, we will not overturn the trial court's factual findings. The determinative issues are, then, issues of law.

The first question is whether the trial court correctly interpreted the Utah Occupying Claimants Act. Section 57-6-1 of the Act provided:

Where an occupant of real estate has color of title thereto, and in good faith has made valuable improvements thereon, and is afterwards in proper action found not to be the owner, no execution shall issue to put the plaintiff in possession of the same after the filing of a complaint as hereinafter provided, until the provisions of this chapter have been complied with.

Utah Code Ann. § 57-6-1 (1994) (emphasis added). ³ This statute requires occupying claimants to show that they (i) have "color of title" and (ii) made valuable improvements (iii) in good faith. See Hidden Meadows Dev. Co. v. Mills, 590 P.2d 1244, 1249 (Utah 1979). The district court found that the claimants had made valuable improvements....