Ortega v. Ridgewood Estates LLC

• Decision Date: 23 June 2016
• Docket Number: No. 20140876–CA,20140876–CA
• Citation: 379 P.3d 18,2016 UT App 131
• Parties: Jose Luis Ortega, Appellee and Cross–Appellant, v. Ridgewood Estates LLC, Housing Financial Services Inc., and Franz Fischer, Appellants and Cross-appellees.
• Court: Utah Court of Appeals

379 P.3d 18

2016 UT App 131

Jose Luis Ortega, Appellee and Cross–Appellant,

v.Ridgewood Estates LLC, Housing Financial Services Inc., and Franz Fischer, Appellants and Cross-appellees.

No. 20140876–CA

Court of Appeals of Utah.

Filed June 23, 2016

M. Darin Hammond, Attorney for Appellants

Gordon A. Madsen and Robert C. Cummings, Attorneys for Appellee

Judge J. Frederic Voros Jr. authored this Opinion, in which Judges Kate A. Toomey and Senior Judge Pamela T. Greenwood concurred.¹

Opinion

VOROS, Judge:

¶ 1 Ridgewood Estates LLC, Housing Financial Services Inc., and Franz Fischer (collectively, Defendants) appeal from the district court's judgment awarding Jose Luis Ortega title to two mobile homes, attorney fees, and punitive damages. Ortega cross-appeals, seeking damages for conversion of his mobile homes and increased punitive damages. We affirm the district court in all respects.

BACKGROUND

¶ 2 This dispute arose from Ortega's purchase of two mobile homes located in Ridgewood Estates Mobile Home Park.²

¶ 3 Ortega is in the business of buying and selling mobile homes. In September 2011, he purchased a mobile home located at space 62 inside the Park (Home 62). He also obtained a certificate of title for the mobile home. Ortega notified Ridgewood of his purchase and, in accordance with Ridgewood policy, submitted a residency application with Ridgewood. Ridgewood denied Ortega's residency application. Although the parties had not signed a lease or other agreement, Ortega paid, and Ridgewood accepted, rental payments for the space occupied by Home 62 until February 2012. But Ortega paid no late fees or security deposit.

¶ 4 In December 2011, Ortega purchased a second mobile home, this one located at space 47 inside the Park (Home 47). Ortega informed Ridgewood of the purchase. As before, although Ortega and Ridgewood had not signed a lease or other agreement, Ortega paid, and Ridgewood accepted, rental payments on the space occupied by Home 47 until February 2012. And again Ortega paid no late fees or security deposit. He did, however, pay property taxes on both Home 47 and Home 62 in February 2012. Both homes have remained unoccupied at the Park since Ortega's purchases.

¶ 5 On January 4, 2012, Ridgewood served Ortega with a Landlord's Notice of Trespass and a Five–Day Notice to Terminate Tenancy at Will for both mobile homes. Ridgewood served the notice in accordance with Utah's Unlawful Detainer statute. See Utah Code Ann. § 78B–6–802 (LexisNexis 2012). The following month, Ridgewood's property manager, Staci Williams, and Ridgewood's owner, Franz Fischer, notified Ortega that he would not be permitted to remove the mobile homes from the Park until he paid all outstanding late fees and service charges, including those accrued by the homes' prior owners. Layton Police also served Ortega with a trespass warning stating that he would not be allowed on the property. Despite Ridgewood's prohibition, Ortega attempted to remove the homes a few days later. At Fischer's direction, Ortega was prevented from moving the homes. A Layton police officer and Williams told Ortega to leave the property due to the trespass warning. Ridgewood posted a Five–Day Notice to Terminate Tenancy at Will on each mobile home at the direction of Fischer. Ortega did not respond.

¶ 6 Ridgewood then mailed Ortega a letter claiming title to both mobile homes. Four days later, Williams applied with the Utah Division of Motor Vehicles for titles to both mobile homes. She applied on behalf of Ridgewood's parent corporation, Housing Financial Services (HFS), which Fischer owned and operated. On both applications, Williams asserted that the homes had been sold contrary to applicable Ridgewood policies, that the homes were abandoned, and that unpaid rent was due. The Utah Division of Motor Vehicles issued HFS a Certificate of Title for Home 47 but took no action on Home 62.

¶ 7 Ortega sued Defendants and the Utah Division of Motor Vehicles for quiet title to both homes and requested damages under slander of title and other theories.³ Ridgewood counterclaimed for unlawful detainer and unjust enrichment. On cross-motions for summary judgment, the district court dismissed Ridgewood's unlawful detainer claim. The district court reasoned that because Ortega had paid rent for the homes, he was entitled to receive a 15–day notice to quit under Utah's Mobile Home Park Residency Act (Mobile Home Act), see Utah Code Ann. § 57–16–1 (LexisNexis 2010), rather than the 5–day notice under Utah's Unlawful Detainer statute that he actually received, see Utah Code Ann. § 78B–6–802 (LexisNexis 2012).

¶ 8 The district court denied the parties' remaining motions and bifurcated the case to try liability and damages separately. Following the liability phase, the court ruled that Ortega owned the mobile homes, that Ridgewood had converted the mobile homes, and that Ridgewood had prevented Ortega from removing the mobile homes. The court found some or all of the Defendants liable for conversion and slander of title.

¶ 9 After the damages phase, the district court ruled both that attorney fees were recoverable as special damages in a slander of title case and that Ortega's attorney fees were reasonable. But it also ruled that lost profits, not lost rental income, represented the proper measure of damages for Ridgewood's conversion. No evidence of lost profits had been presented at trial. Furthermore, even if lost rental income were used, the district court ruled, the record lacked credible testimony establishing the amount of lost rents.

¶ 10 After both phases of trial, the district court quieted title to both mobile homes in Ortega, directed the Utah Division of Motor Vehicles to issue Ortega title to Home 47, and ordered Ortega to remove both homes from the Park. The court also awarded Ortega $30,375 in attorney fees as special damages for slander of title and $1,000 in punitive damages against HFS and Fischer. And the court awarded Ortega, as the “prevailing party,” attorney fees in the amount of $11,100 against Ridgewood under the Mobile Home Act and the Unlawful Detainer statute. Both parties appeal.

ANALYSIS

I. Defendants' Appeal

¶ 11 Defendants present six issues on appeal. We consider them in turn, stating the applicable standard of review for each claim that has been “properly preserved, framed and briefed.” See Salt Lake County v. Butler, Crockett & Walsh Dev. Corp. , 2013 UT App 30, ¶ 32, 297 P.3d 38.

A. Mobile Home Act

¶ 12 Defendants first contend that the district court erred in applying the Mobile Home Act instead of the Unlawful Detainer statute. The latter applies, Defendants argue, because Ortega did not qualify as a “resident” under the Mobile Home Act. He did not qualify, they reason, because he (1) never resided at Ridgewood and (2) did not have a rental or lease agreement with Ridgewood. The distinction matters because Defendants served Ortega with a 5–day notice to quit, which complied with the Unlawful Detainer statute but not with the Mobile Home Act.

¶ 13 On summary judgment the district court ruled that despite having no lease or rental agreement with Ridgewood, Ortega qualified as a resident under the Mobile Home Act. The court based this conclusion on the plain language of the Mobile Home Act and on the fact that after purchasing the mobile homes, Ortega tendered, and Ridgewood accepted, rental payments for both homes' spaces. We review both the grant of summary judgment and the interpretation of a statute for correctness. Blackner v. Department of Transp. , 2002 UT 44, ¶ 8, 48 P.3d 949.

¶ 14 “Unlawful detainer by an owner resident of a mobile home is determined under Title 57, Chapter 16, Mobile Home Park Residency Act.” Utah Code Ann. § 78B–6–802(3) (LexisNexis 2012). If a person qualifies as an “owner resident” under the Mobile Home Act, the mobile home park is “required to comply with the notice provisions of the [Mobile Home Act], regardless of the existence of a lease .” Brookside Mobile Home Park, Ltd. v. Peebles , 2002 UT 48, ¶ 21, 48 P.3d 968 (emphasis added).⁴ Defendants do not dispute that Ortega qualified as an “owner.” They question only whether he qualified as a “resident.”

¶ 15 The Mobile Home Act defines “resident” as “an individual who leases or rents space in a mobile home park.” Utah Code Ann. § 57–16–3(8) (LexisNexis 2010). The definition does not require physical occupation of the mobile home. Defendants acknowledge that Ortega paid rent on homes 47 and 62 but argue that he did not “rent[ ] space” in Ridgewood, because he “refused to pay late fees” and did not “pay any security deposit.” However, Defendants have not shown that the term “rents space” as used in the Mobile Home Act requires payment of late fees and a security deposit in addition to rent, nor can we see why it should.

¶ 16 Moreover, the notices Defendants served on Ortega in January 2012 do not accuse him of failure to pay rent, late fees, or security deposits. Rather, they assert that he purchased the mobile homes without pre-registering as required by section 57–16–4(4) (now section 57–16–4(5)(b)) of the Mobile Home Act. The district court concluded that such a violation would not support an eviction under the Unlawful Detainer statute. See Utah Code Ann. § 78B–6–802(3) (LexisNexis 2012); id. § 57–16–6(3)(a) (2010). Defendants do not attempt to explain why this conclusion constitutes legal error.

¶ 17 Finally, Defendants assert that their restrictive endorsement of Ortega's checks (stating “accepting this payment does not imply residency into the park”) refutes the conclusion that Ortega qualified as a resident under the Mobile Home Act. But they offer no legal authority or analysis showing that this unilateral assertion overrides the provisions of the Mobile Home Act.

¶ 18 In sum, the district court correctly ruled that Ortega qualified as a resident under the Mobile Home Act, which consequently governed Defendants' attempts to evict him.

B. Ridgewood's Right to Remove

¶ 19 Def...