Silva v. Silva

Decision Date08 November 2018
Docket NumberNo. 20160171-CA,20160171-CA
Citation437 P.3d 593
Parties David SILVA, Appellee, v. Bonnie SILVA, Appellant.
CourtUtah Court of Appeals

J. Spencer Ball, Salt Lake City, Attorney for Appellant

Shawn D. Turner, Attorney for Appellee

Judge Michele M. Christiansen Forster authored this Opinion, in which Judges Gregory K. Orme and David N. Mortensen concurred.

Opinion

CHRISTIANSEN FORSTER, Judge:

¶1 Bonnie Silva appeals the district court’s denial of her motions to set aside a default judgment and a sheriff’s sale following that judgment. She also challenges the district court’s award of attorney fees. We vacate the district court’s rulings and remand for further proceedings.

BACKGROUND

¶2 Bonnie Silva and David Silva divorced in 2010. The marital estate included interests in fifteen parcels of real property—four properties held jointly, one property held by David, and ten properties held by Bonnie.1 The decree allocated the properties and ordered the parties to execute quitclaim deeds within thirty days, conveying their interests in the properties to one another as specified in the decree. If either party failed to execute a quitclaim deed, the divorce decree authorized the other party to seek a court order to transfer title. One of the properties awarded to David was a residential property located on Dennis Drive in West Valley City, Utah (the Dennis Drive Property).

¶3 In June 2010, pursuant to the divorce decree, Bonnie executed a quitclaim deed as "Grantor Bonnie Moore, now known as Bonnie Silva," purportedly conveying the Dennis Drive Property to David. But when David attempted to record the deed, he discovered that "Bonnie Moore[,] as Trustee for the Consolidated Trust," actually held title to the Dennis Drive Property. He further discovered that one week before he had filed for divorce in September 2008, Bonnie had conveyed the Dennis Drive Property and other properties then in her name to herself and her daughters, K.V. Lum and R. Carter, as trustees of a trust known as the Consolidated Trust. After learning these facts, David sent a revised quitclaim deed to Bonnie, but she did not sign and return it as requested. Several months later, Bonnie, as a trustee of the Consolidated Trust, again conveyed the Dennis Drive Property and other properties to Lum, as trustee of the Consolidated Trust.

¶4 In October 2010, David filed a Motion for Contempt with the district court. Because he claimed he could not locate Bonnie, David filed a Motion for Alternative Service, which the court granted. The district court held an evidentiary hearing and entered a default judgment finding Bonnie in contempt for failing to convey the Dennis Drive Property to David. However, the court left open a window during which Bonnie could cure the contempt. If Bonnie did not convey the Dennis Drive Property to David within thirty days, the court would enter a $219,000 judgment against her. Bonnie did not convey the property to David during this time. A few months later, Lum, as a trustee of the Consolidated Trust, conveyed title to the Dennis Drive Property to Carter, as a trustee of the Consolidated Trust. The district court then entered a contempt judgment against Bonnie, reducing slightly the $219,000 by amounts David owed to Bonnie under the divorce decree.

¶5 The following month, David instituted this action against Bonnie and her daughters alleging fraudulent conveyance and seeking to quiet title to the Dennis Drive Property. David filed a motion for alternative service recounting his prior unsuccessful efforts to serve Bonnie. David asserted that the process server had attempted personal service at Bonnie’s last known address four separate times. The district court ordered alternative service by publication, which David accomplished.

¶6 Bonnie did not answer the complaint. The district court clerk consequently entered a default certificate against Bonnie, and the court ordered an evidentiary hearing on damages. Concerned that Bonnie may have received inadequate notice of the hearing, the district court rescheduled the hearing and required additional service on Bonnie. David attempted service by mailing copies of the notice of hearing to what David claimed was Bonnie’s last known address by both regular and certified mail. David also attempted personal service whereby the process server left the notice at Bonnie’s last known residence on three separate occasions. David then completed service by publication again.

¶7 Bonnie did not appear at the hearing on damages. In its Findings of Fact and Conclusions of Law, the district court concluded that "Service of Process of the Complaint and notice of the evidentiary hearing on damages were in accordance with the Rules of the Court, the Statutes of Utah, and the Constitutional requirements of due process." The district court also determined that Bonnie had fraudulently conveyed the Dennis Drive Property and her other properties to the Consolidated Trust. Accordingly, the district court ruled that the contempt judgment entered in the divorce action attached to the properties, that Bonnie and her daughters were enjoined from transferring or encumbering the properties, and that David "may levy execution on the properties ... and sell the amount of the property necessary to satisfy the judgment." Finally, the district court awarded attorney fees and costs to David. The district court thus entered default judgment against Bonnie in the amount of the contempt judgment, now attached to Bonnie’s properties. The court also awarded costs and attorney fees totaling nearly $50,000. The district court clerk subsequently issued a writ of execution on three of Bonnie’s properties, including the Dennis Drive Property.

¶8 Later that month, Bonnie’s counsel entered an appearance in the district court and filed a motion pursuant to rule 60(b)(1) of the Utah Rules of Civil Procedure seeking to set aside the default judgment on the basis of excusable neglect and to quash the writ of execution. The district court held a hearing, which Bonnie and her counsel attended. At that hearing, Bonnie maintained that the default judgment should be set aside on the ground of excusable neglect because she did not receive actual notice of the action and service was insufficient under the circumstances. Bonnie acknowledged that service complied with the law, but she argued that David knew where Bonnie was located and could easily have contacted her to give her actual notice of his claims.

¶9 Bonnie filed an affidavit with her rule 60(b) motion and a second affidavit with her reply motion. In her first affidavit, Bonnie alleged that she had not received notice of the current action against her. She further alleged that she received a call from David notifying her that "something was wrong with the quitclaim deed" but that "David never indicated to [her] in that telephone call that there was any court proceeding." In her second affidavit, Bonnie alleged that David knew of various means of contacting her, including her two email addresses or through their respective children and the renters of their properties. David did not refute these allegations.

¶10 The district court denied Bonnie’s motion to set aside based upon excusable neglect on the ground that "service [of the notice] and the resulting default were appropriate." The court reached this conclusion, in part, because the court determined Bonnie provided no evidence—despite her two affidavits—supporting her assertions that David knew where Bonnie was located and that she did not receive actual notice of the proceedings. And although the court recited the law relative to excusable neglect, the court did not address excusable neglect in its analysis. Similarly, the court denied the motion to quash for Bonnie’s failure to provide evidence of irreparable harm.

¶11 Four days later, the Dennis Drive Property and the other two properties subject to the writ of execution were sold at a sheriff’s sale. Bonnie responded with a motion for a temporary restraining order (TRO), a motion to void the execution sale, and a motion to join the sale purchasers as parties to the action. After a hearing, the district court denied the TRO on the ground that Bonnie had failed to meet the required elements for relief. The court denied the motion to join the purchasers on the ground that "[Bonnie] cites rules that apply before a judgment is made and are not applicable for a case as this one where judgment was entered." The court noted that "even if there was no judgment in this case, there is no basis, claim, or cause of action asserted against the purchasers." The court denied the motion to void the execution sale on the ground that the court had already ruled at the TRO hearing that the notice of sale was properly served.

¶12 Bonnie appealed the district court’s denial of her motions to set aside the default judgment and the sheriff’s sale, and the district court’s award of attorney fees to David. We issued an opinion in this matter on July 28, 2017. See Silva v. Silva , 2017 UT App 125, 402 P.3d 36, vacated , Jan. 9, 2018. We subsequently granted a petition for rehearing, vacated that opinion, and reheard the matter.

ISSUES AND STANDARDS OF REVIEW

¶13 Bonnie asserts two claims of error on appeal.2 First, she contends that the district court abused its discretion in denying her motion to set aside the default judgment. We generally review a district court’s denial of a rule 60(b) motion under an abuse of discretion standard. Utah Res. Int’l, Inc. v. Mark Techs. Corp. , 2014 UT 60, ¶ 11, 342 P.3d 779.

¶14 Second, Bonnie contends that the district court abused its discretion in denying her motion to set aside the sheriff’s sale, claiming she lacked notice and pointing to irregularities in the sale. "A district court’s decision to set aside a sheriff’s sale is to be reviewed for an abuse of discretion." Meguerditchian v. Smith , 2012 UT App 176, ¶ 9, 284 P.3d 658 (quotation simplified).

ANALYSIS
I. Rule 60(b) Motion

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