Pyper v. Bond

Citation258 P.3d 575,687 Utah Adv. Rep. 58,2011 UT 45
Decision Date29 July 2011
Docket NumberNo. 20091025.,20091025.
PartiesDavid PYPER and Estate of Mollie Maxine Pyper, Plaintiffs and Respondents,v.Justin C. BOND, Dale M. Dorius, and Alison D. Bond, Defendants and Petitioners.
CourtSupreme Court of Utah

OPINION TEXT STARTS HERE

J. Bryan Quesenberry, Provo, for plaintiffs.Jennifer D. Reyes, Brigham City, for defendants.

On Certiorari to the Utah Court of Appeals

Associate Chief Justice DURRANT, opinion of the Court:

INTRODUCTION

¶ 1 We granted certiorari in this case to determine whether the court of appeals erred in its construction and application of the standard for setting aside a sheriff's sale. To resolve this question, we must address two distinct issues. First, we must decide whether the court of appeals erred in concluding that gross inadequacy of price together with slight circumstances of unfairness may justify setting aside a sheriff's sale. Second, if we agree with the court of appeals' construction of the standard for setting aside a sheriff's sale, we must determine whether the court of appeals erred in holding that the facts in this case involved slight circumstances of unfairness.

¶ 2 We hold that the court of appeals did not err in concluding that gross inadequacy of price together with slight circumstances of unfairness may justify setting aside a sheriff's sale. This is because a showing of both gross inadequacy of price and slight circumstances of unfairness gives rise to a presumption of fraud, which, unless rebutted, may constitute a compelling circumstance that justifies setting aside a sheriff's sale. We further hold that the court of appeals did not err in affirming the district court's conclusion that the Appellant's conduct created, at least, slight circumstances of unfairness. We therefore affirm the court of appeals' decision.

BACKGROUND

¶ 3 In 2002, David Pyper hired Justin Bond, an attorney, to represent him in a probate matter. At the time, Mr. Bond was employed by the law firm of Dorius, Bond, Reyes, and Linares (the Law Firm or the Firm). The Law Firm charged Mr. Pyper $9,064.82 in attorney fees for Mr. Bond's representation of Mr. Pyper. Despite several requests by the Firm, Mr. Pyper failed to pay these fees.

¶ 4 The Law Firm subsequently sued Mr. Pyper in an effort to obtain payment of the attorney fees. In 2006, the district court entered a judgment in the Law Firm's favor in the amount of $10,577.23. To satisfy this judgment, Mr. Bond filed a lien against a house owned by Mr. Pyper. At the time the lien was filed, the house had an estimated value of approximately $125,000.

¶ 5 In November 2006, a properly noticed sheriff's sale was held at which Mr. Pyper's home was auctioned. Mr. Bond was the only bidder at the sale. Mr. Bond purchased Mr. Pyper's home with a bid of $329.

¶ 6 On April 20, 2007, Mr. Pyper called the Law Firm and expressed his desire to redeem his property. During the phone call, Mr. Pyper asked the Firm to provide him with a judgment lien payoff amount. An employee of the Firm told Mr. Pyper that an attorney would return his call, but no one contacted Mr. Pyper.

¶ 7 On April 25, Mr. Pyper called the Law Firm again and spoke with Dale Dorius, an attorney at the Firm. During this conversation, Mr. Pyper told Mr. Dorius that he wanted to satisfy the judgment against him and offered to pay $8,500 to do so. Mr. Dorius stated that he needed to talk to Mr. Bond about the offer, but no one at the Firm ever contacted Mr. Pyper with an answer. After his conversation with Mr. Dorius, Mr. Pyper called the Law Firm every day for the next twenty-eight days but was unable to speak with Mr. Bond or Mr. Dorius.

¶ 8 On or about May 8, 2007, the 180–day period in which a debtor may redeem property sold at a sheriff's sale expired. Shortly thereafter, the deed to Mr. Pyper's home was transferred to Mr. Bond. On May 17, 2007, Mr. Pyper spoke with Mr. Bond about satisfying the judgment against him and informed Mr. Bond that he had the money to do so. Mr. Bond told Mr. Pyper that he needed to speak with Mr. Dorius about the issue and that he would call Mr. Pyper back. No one returned Mr. Pyper's call. Mr. Pyper continued calling Mr. Bond and Mr. Dorius on a near-daily basis for the next two weeks.

¶ 9 On May 30, 2007, an attorney representing Mr. Pyper contacted Mr. Dorius and requested a payoff amount. Mr. Dorius promised Mr. Pyper's attorney that he would get back to him with an amount by the end of the week, but Mr. Dorius did not do so. After approximately two more weeks of unanswered phone calls, Mr. Pyper's attorney sent Mr. Dorius a letter regarding Mr. Pyper's desire to satisfy the judgment against him and to redeem his property. An attorney representing the Law Firm responded to the letter and informed Mr. Pyper that his redemption period had expired.

¶ 10 After learning that the redemption period had expired, Mr. Pyper filed a petition in the district court seeking to set aside the sheriff's sale of his property. In June 2008, the district court held a hearing on the petition, during which Mr. Bond, Mr. Dorius, and Mr. Pyper testified. Sometime after the hearing, the district court issued a memorandum decision in which it concluded that the sale price of Mr. Bond's property was so “grossly inadequate” as to “shock[ ] the conscience of an impartial mind.” The district court also concluded that Mr. Bond and Mr. Dorius's conduct amounted to at least “slight circumstances of unfairness” to Mr. Pyper. Based on these conclusions, the district court set aside the sheriff's sale of Mr. Pyper's property.

¶ 11 Mr. Bond and Mr. Dorius (collectively, the Appellants) timely appealed the district court's decision to the Utah Court of Appeals.1 The court of appeals affirmed the district court's decision to set aside the sheriff's sale.2 In so doing, the court of appeals noted that it agreed with the district court's conclusion that the facts of the case involved both gross inadequacy of price and, at least, slight circumstances of unfairness. 3 Specifically, the court of appeals concluded that the Appellants' words and actions represented, at least implicitly, that they were going to participate in the redemption process” and that it was “their failure to act in accordance with this representation that justifie[d] the district court's finding of unfairness warranting relief.” 4 Finally, the court of appeals explained that the district court's findings of both great inadequacy of price and slight circumstances of unfairness had “vest[ed] the district court with the authority to set aside the [sheriff's] sale [of Mr. Pyper's property] under prior precedents.” 5

¶ 12 Mr. Bond and Mr. Dorius then filed a petition for certiorari, which we granted. On certiorari, Mr. Bond and Mr. Dorius argue that the court of appeals' decision should be reversed because it conflicts with this court's precedent concerning the standard for setting aside a sheriff's sale. We have jurisdiction to hear this appeal pursuant to section 78A–3–102(3)(a) of the Utah Code.

STANDARD OF REVIEW

¶ 13 “On certiorari, we review the decision of the court of appeals for correctness, giving no deference to its conclusions of law.” 6

ANALYSIS
I. THE COURT OF APPEALS DID NOT ERR IN ITS CONSTRUCTION OF THE STANDARD FOR SETTING ASIDE A SHERIFF'S SALE

¶ 14 The right of redemption from a sheriff's sale is a statutory right provided in section 78B–6–906 of the Utah Code.7 That section states that [s]ales of real estate under judgments of foreclosure of mortgages and liens are subject to redemption.” 8 The procedures for exercising the right to redemption are set out in rule 69C of the Utah Rules of Civil Procedure.9 In relevant part, this rule provides that a person seeking to redeem property sold through a sheriff's sale must pay the amount of the bid within six months after the sale.10

¶ 15 In most instances, “strict compliance with the six-month redemption period is ... required.” 11 But in some circumstances “a court sitting in equity may extend a redemption period or set aside a sheriff's sale after the period for redemption” has expired.12 For instance, we have indicated that a court may set aside a sheriff's sale where (1) a debtor's property is sold at a grossly inadequate price and (2) there were irregularities during the sale that contributed to the inadequacy of price or circumstances of unfairness during the redemption period caused by the conduct of the party benefitted by the sale.13 These factors operate on a sliding scale. Thus, the greater the disproportionality in price, the less unfairness or fewer irregularities a party must demonstrate before a court may justifiably extend a redemption period or set aside a sheriff's sale. 14

¶ 16 For example, in Young v. Schroeder, the Supreme Court for the Territory of Utah noted that [g]reat inadequacy [of price] requires only slight circumstances of unfairness in the conduct of the party benefitted by the sale to raise [a] presumption of fraud’ and to justify setting aside a sale.15 Similarly, in Pender v. Dowse, we noted that [i]t is well settled that equity will intervene and set aside an execution sale or cancel a sheriff's deed, after the redemption period has expired, where it appears [that] the consideration was grossly inadequate and the sale was attended by unfairness and fraud.” 16 In Pender, we also reiterated that “great inadequacy [of price] requires only slight circumstances of unfairness in the conduct of the party benefitted by the sale to raise the presumption of fraud.” 17

¶ 17 We revisited the standard for setting aside a sheriff's sale in Huston v. Lewis.18 In Huston, we reaffirmed our prior opinions, stating that “a court sitting in equity may extend a redemption period or set aside a sheriff's sale after the period for redemption.” 19 We noted, however, that “a court should take such an action only when the equities of the case are compelling and move the conscience of the court.” 20

¶ 18 In the...

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