Rehn v. Christensen

• Decision Date: 02 February 2017
• Docket Number: No. 20150119-CA,20150119-CA
• Citation: 392 P.3d 872
• Court: Utah Court of Appeals
• Parties: Charles C. REHN, Appellant and Cross-appellee, v. Steve S. CHRISTENSEN; Steve S. Christensen Pc; Henriod, Nielsen & Christensen ; Christensen, Corbett & Pankratz Pllc; and Hirschi Christensen PLLC, Appellees and Cross-appellants.

392 P.3d 872

Charles C. REHN, Appellant and Cross-appellee,

v.Steve S. CHRISTENSEN; Steve S. Christensen Pc; Henriod, Nielsen & Christensen ; Christensen, Corbett & Pankratz Pllc; and Hirschi Christensen PLLC, Appellees and Cross-appellants.

No. 20150119-CA

Court of Appeals of Utah.

Filed February 2, 2017

Joseph E. Wrona and Jared C. Bowman, Park City, Attorneys for Appellant and Cross-appellee.

Clinton R. Brimhall, Jeremy R. Miller, Steve S. Christensen, and D. Scott Crook, Salt Lake City, Attorneys for Appellees and Cross-appellants

Judge J. Frederic Voros Jr. authored this Opinion, in which Judges Kate A. Toomey and David N. Mortensen concurred.

Opinion

VOROS, Judge:

¶1 Charles C. Rehn sued Steve S. Christensen and related parties (collectively, Christensen) for slander of title and to remove an attorney's lien Christensen had filed on Rehn's property. Rehn prevailed on some of his claims by way of summary judgment and prevailed on the remainder of his claims at trial. The district court denied Rehn's request for attorney fees and also denied Christensen's motion for a directed verdict and various post-trial motions. Both parties appeal. We affirm.

BACKGROUND

¶2 In 1996, Rehn retained Christensen to represent him in a divorce. The case went to trial in 1997. Rehn did not own any real property during the marriage, and the district court entered findings stating that there was "no real property owned by the parties and thus no allocation is necessary." Rehn lived in a rented home in Park City, Utah (the Property).

¶3 The Property lies at the heart of this dispute. The parties disagree about a number of facts surrounding the Property, including when Rehn first consulted Christensen, when Rehn first had the option to purchase the Property, and when, if ever, Rehn discussed the Property with Christensen during the divorce proceedings. Christensen argues that Rehn had a "pre-divorce goal" to purchase the Property and the two had a "15-minute conversation" during which Christensen advised Rehn to wait until after the divorce to purchase the Property. Rehn argues that such a conversation never occurred and notes that Christensen could not remember when or where the alleged conversation occurred.

¶4 In October 1997, Rehn retained Christensen to appeal certain aspects of the divorce decree and signed an engagement letter (the Retainer Agreement). The Retainer Agreement provided that Christensen's law firm, Henriod, Nielsen & Christensen (HNC), was entitled to an attorney's lien on Rehn's real property for past-due billings:

[HNC] shall be entitled to a lien for services rendered including a lien on your residence, other real property or any subsequent settlement or judgment, as permitted [sic] the laws of the State of Utah or any other state where services are provided, in the event the bill has not been paid in full with [sic] thirty (30) days of billing.

The Retainer Agreement also included an attorney-fee provision:

In the event legal action is taken to enforce this agreement the law of Utah shall apply and the prevailing party shall be entitled to reasonable costs and attorney's fees.

Around this time, Christensen left HNC to form a solo practice, Steve S. Christensen PC (SSC). HNC assigned its right to collect Rehn's outstanding attorney fees to Christensen.

¶5 Rehn purchased the Property in 2000. The following year Christensen recorded an "Amended Notice of Attorney Lien" (the Lien) against it. The district court later found that the Lien contained a number of false statements. First, the Lien did not "amend" any earlier filing, because no earlier lien had been filed. Second, the Lien incorrectly described the Property as the "subject" of Christensen's representation of Rehn, whereas it was at most only "connected to" that representation. Third, the Lien incorrectly stated that the Property was awarded to Rehn in the original divorce action, although Rehn did not buy the Property until 2000, and no real property was at issue in the divorce. The Lien also incorrectly cited a superseded section of the Utah Code that purportedly authorized the Lien and incorrectly stated that 1995 rather than 1996 was the year when Rehn first retained Christensen. Finally, the Lien included billing inaccuracies.

¶6 Christensen did not notify Rehn of the Lien when Christensen recorded it. Approximately two months later, after learning that Rehn planned to refinance the Property, Christensen sent a letter informing Rehn of the Lien:

I am told by lenders that you are able to withdraw a higher percentage of your equity if the money is to refinance existing obligations rather than to obtain cash for yourself. In the event it would be helpful, I have filed the enclosed attorney's lien for your use in a refinance. If it turns out that this lien will not be useful to you, I can release the lien.

The Lien remained on the Property for years as Christensen and Rehn negotiated Rehn's outstanding attorney fees.

¶7 In 2004, Rehn filed a Chapter 7 bankruptcy petition. He listed Christensen as a creditor in his bankruptcy schedules, showing a debt of $ 43,244 in outstanding attorney fees. Rehn did not specifically challenge the validity of the Lien. The bankruptcy court discharged the debt, but Christensen did not release the Lien. When Rehn attempted to sell the Property in 2012, he discovered that the Lien still encumbered it. Rehn asked Christensen to remove the Lien. Christensen refused; Rehn sued.

¶8 Rehn alleged slander of title, promissory estoppel, and wrongful lien; he also sought a declaratory judgment that the Lien was void and a permanent injunction against its enforcement. Rehn's core argument asserted that Christensen had placed an invalid lien on the Property and had refused to release it unless Rehn paid exorbitant attorney fees and interest. Rehn also moved for a temporary restraining order and preliminary injunction to remove the Lien. After Rehn deposited $ 40,000 into an escrow account, the district court released the Lien and entered a stipulated preliminary injunction.

¶9 Christensen answered and counterclaimed, alleging that the Retainer Agreement entitled him to recover attorney fees:

65. SSC is entitled to receive $ 26,807.14 plus contractual interest at the rate of 18% per annum....

66. SSC is entitled to receive attorney fees and costs ... defending itself in this legal action pursuant to its contract with Rehn.

These allegations were based in part on the attorney-fee provision in the Retainer Agreement. Christensen moved for summary judgment, arguing that his Lien could not have slandered Rehn's title, because the Lien did not amount to a slanderous statement—the first element of a slander of title action. "If a person has a valid lien on property," Christensen argued, "recording a notice of that lien is not slanderous." Thus, according to Christensen, because the Retainer Agreement gave him a contractual right to record the Lien, the Lien could not be slanderous.

¶10 Rehn filed a cross-motion for summary judgment on the ground that the Lien was wrongful and void. The district court granted Rehn summary judgment, quieting title to the Property in him. The court's ruling rendered moot Rehn's claim for a permanent injunction. The court dismissed Rehn's wrongful lien claim but concluded on summary judgment that Rehn had established the first two elements of his slander of title claim—a false and slanderous statement.

¶11 The district court held a two-day jury trial on the two remaining elements of Rehn's slander of title claim—malice and damages. At trial, Christensen repeatedly argued that the Retainer Agreement gave him a contractual right to record the Lien. Christensen advanced this argument in his opening statement, his direct examination, his cross-examination, and his re-direct examination, and when discussing jury instructions.

¶12 At the close of evidence, Christensen moved for a directed verdict, arguing that no evidence existed that Christensen knew the Lien was invalid. Rehn responded that he had produced evidence from which a reasonable juror could conclude that Christensen included false statements in the Lien. The district court denied Christensen's motion.

¶13 The jury found that both remaining elements for slander of title were satisfied and awarded Rehn damages of $ 77,752.29—largely to compensate him for attorney fees incurred in removing the Lien.

¶14 After trial, Christensen moved for judgment notwithstanding the verdict, asking the court to reduce the damage award to $ 20,000 or, alternatively, for a new trial. The district court denied Christensen's motion. Rehn, as the prevailing party at trial, moved for an award of attorney fees not covered by the slander of title damages. Rehn asserted three grounds for an award of fees: (1) the attorney-fee provision of the Retainer Agreement; (2) the Reciprocal Fee Statute found in Utah Code section 78B–5–826 ; and (3) the court's "inherent equitable powers." The district court denied Rehn's motion.

¶15 Addressing Rehn's first and second grounds for an award of attorney fees, the court reasoned that "[n]either party had a contractual right to recover attorney fees associated with prosecuting or defending against the slander of title claim," because "[t]he slander of title claim was not brought to enforce the terms of the contract and was not otherwise based upon the contract." Addressing Rehn's third ground for an award of attorney fees, the court declined "to exercise its equitable powers," because the court did not find "that the facts of this case distinguish it from other slander of title cases such that justice requires an award of attorney fees in addition to those already awarded by the jury, which the jury determined to be reasonably necessary to remove the cloud of title from Mr. Rehn's property."

¶16 Rehn appeals; Christensen cross-appeals.

ISSUES

¶17 Rehn asserts two claims of error on appeal. He first contends that the district court erred by not awarding him attorney fees under...