SunStone Realty Partners X LLC v. Bodell Constr. Co.

• Jurisdiction: Utah,United States
• Court: Utah Supreme Court
• Writing for the Court: PEARCE, ASSOCIATE CHIEF JUSTICE
• Citation: 2024 UT 9
• Docket Number: 20230285
• Decision Date: 07 March 2024
• Parties: SunStone Realty Partners X LLC, Appellant, v. Bodell Construction Company, Appellee.
• topic: Commercial Litigation,Construction Law,Contracts,Civil Procedure

1

2024 UT 9

SunStone Realty Partners X LLC, Appellant, v. Bodell Construction Company, Appellee.

No. 20230285

Supreme Court of Utah

March 7, 2024

Heard December 13, 2023

On Direct Appeal Third District, Salt Lake County The Honorable Robert P. Faust No. 226909897

Russell S. Walker, South Jordan, for appellant

Michael R. Johnson, Austin C. Nate, Salt Lake City, for appellee

Associate Chief Justice Pearce authored the opinion of the Court, in which Chief Justice Durrant, Justice Petersen Justice Hagen, and Justice Pohlman joined.

OPINION

PEARCE, ASSOCIATE CHIEF JUSTICE

INTRODUCTION

¶1 After arbitrating a dispute in Hawaii regarding construction defects in a condominium development, SunStone Realty Partners X LLC (SunStone) domesticated its Hawaii judgment against Bodell Construction Company (Bodell) in Utah. Bodell asked the district court to impose Utah's postjudgment interest rate instead of Hawaii's higher postjudgment rate. The district court complied with Bodell's request.

¶2 SunStone appeals, arguing that the Utah Foreign Judgment Act (UFJA) requires the court to apply the Hawaii postjudgment interest rate. See Utah Code § 78B-5-301 to -307. Failing that, SunStone contends that provisions in its contract with Bodell require Utah courts to award postjudgment interest at the Hawaii rate. SunStone further suggests that even if the contract does not mandate the Hawaii rate, principles of comity do.

¶3 Although the UFJA does not squarely address the issue, it does instruct Utah courts to treat a foreign domesticated judgment like a Utah judgment for purposes of enforcement. Postjudgment interest serves, at least in part, as an enforcement mechanism. Accordingly, the UFJA requires the imposition of Utah's postjudgment interest rate. We affirm.

BACKGROUND

¶4 SunStone and Bodell arbitrated claims arising out of a construction dispute. The arbitration resulted in an award against Bodell that exceeded $9.5 million. A Hawaii court entered a judgment in favor of SunStone in that amount. SunStone subsequently domesticated that judgment in Utah under the UFJA.

¶5 Bodell promptly moved the Utah district court for an order imposing Utah's postjudgment interest rate and not Hawaii's.^[1] In its motion, Bodell argued that the UFJA requires the application of Utah's rate. It reasoned that the UFJA provides that a foreign judgment domesticated in Utah is "subject to the same procedures, defenses, enforcement, satisfaction, and proceedings" as a Utah judgment, that postjudgment interest is properly considered a procedural matter, and therefore that Utah's postjudgment rate applies. SunStone opposed the motion, arguing that the UFJA's "general purpose" requires the application of Hawaii's rate. It further asserted that its contract with Bodell required the district court to apply the Hawaii rate.

¶6 Neither party requested a hearing on the motion, and the district court entered an order that contained no analysis of the issue, but simply stated "Utah's post judgment rate applies as of the date of the domestication of the foreign judgment in Utah." SunStone appeals.

ISSUES AND STANDARDS OF REVIEW

¶7 SunStone presents three issues. It first argues that the district court erred when it failed to recognize that Hawaii's postjudgment rate should apply. SunStone posits the UFJA's "general purpose [is] to make . . . the law of" Utah uniform with states that have enacted the Uniform Enforcement of Foreign Judgments Act (UEFJA). (Citing Utah Code § 78B-5-307.) "We review questions of statutory interpretation for correctness, affording no deference to the lower court's legal conclusions." Scott v. Benson, 2023 UT 4, ¶ 25, 529 P.3d 319 (cleaned up).

¶8 SunStone next contends that the contract between it and Bodell requires the application of the Hawaii postjudgment rate. "We review a district court's interpretation of a contract for correctness." Brady v. Park, 2019 UT 16, ¶ 29, 445 P.3d 395.

¶9 SunStone last asserts that the Hawaii rate should apply as a matter of comity. When we apply "principles of comity, we have traditionally afforded the district court broad discretion." Galindo v. City of Flagstaff, 2019 UT 67, ¶ 6, 452 P.3d 1185 (cleaned up). However, "[w]e initially presume comity should be extended" unless the party shows that "the extension of comity contravenes or undermines Utah's public policy." Id. ¶¶ 11-12 (cleaned up). But when there is legislative guidance on an issue, the question is "removed . . . from the realm of comity." Pan Energy v. Martin, 813 P.2d 1142, 1146 (Utah 1991).

ANALYSIS

I. THE UTAH FOREIGN JUDGMENT ACT REQUIRED THE DISTRICT COURT TO APPLY UTAH'S POSTJUDGMENT INTEREST RATE

¶10 SunStone first argues that the Hawaii rate applies "based on Utah's enactment of the" UEFJA.^[2] SunStone points to the provision in the UFJA that discusses a "general purpose to make uniform the law of those states which enact it." Utah Code § 78B-5-307. SunStone asserts that "the only way to achieve that uniformity among the various states under the UEFJA is to apply the post-judgment rate of the [rendering state]."

¶11 "The aim of statutory interpretation is to ascertain the intent of the legislature, and the best evidence of the legislature's intent is the plain language of the statute itself." Scott v. Benson, 2023 UT 4, ¶ 37 529 P.3d 319 (cleaned up). This process does not look at statutory language in isolation; instead, "each section must be read in the context of the entire [a]ct." Savely v. Utah Highway Patrol, 2018 UT 44, ¶ 25, 427 P.3d 1174 (cleaned up). And when the language of a statute is plain, we will not turn to a "statute's purposes in hopes of finding a gloss to put on the text." Scott, 2023 UT 4, ¶ 43 n.13.

¶12 The UFJA provides a means of domesticating a foreign judgment and identifies how Utah courts must treat these domesticated judgments. Although the UFJA does not specifically address the question of postjudgment interest, subsection 78B-5-302(3) supports the district court's conclusion.

¶13 Subsection 78B-5-302(3) of the UFJA mandates that foreign judgments domesticated using the UFJA are "subject to the same procedures, defenses, enforcement, satisfaction, and proceedings . . . as a judgment of a district court of this state."^[3] Rather than determine, as SunStone urges, whether imposing the Hawaii postjudgment rate serves the UFJA's general purpose, we start by asking whether postjudgment interest is one of the procedures, defenses, enforcement mechanisms, satisfactions, or proceedings that the UFJA instructs us to resolve with Utah law.

¶14 The United States Supreme Court has recognized that postjudgment interest serves "to compensate the successful plaintiff for being deprived of compensation for the loss from the time between the ascertainment of the damages and the payment by the defendant." Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494 U.S. 827, 835-36 (1990) (cleaned up). The Seventh Circuit Court of Appeals has further explained that postjudgment interest is not meant to "punish a defendant but to encourage prompt payment and compensate a plaintiff for another party's use of its money." Overbeek v. Heimbecker, 101 F.3d 1225, 1228 (7th Cir. 1996). In other words, postjudgment interest acts as "an enforcement tool to ensure that . . . the award of just compensation will not be diminished by delay in payment." Brown v. Habrle, 1 A.3d 401, 405 (Me. 2010) (cleaned up).

¶15 Unlike prejudgment interest, the postjudgment rate would have no effect on the judgment amount should a debtor decide to immediately pay the judgment creditor. See Aqua Mgmt., Inc. v. Abdeen, 227 P.3d 498, 502 (Ariz.Ct.App. 2010). Instead, postjudgment interest serves, at least in part, as "an enforcement mechanism designed to encourage timely satisfaction of the judgment." Id.

¶16 Other states see it the same way. For example, the Pennsylvania Superior Court was asked to determine whether postjudgment interest was a matter of substantive or procedural law. See Lockley v. CSX Transp. Inc., 66 A.3d 322, 326 (Pa. Super. Ct. 2013). It concluded that postjudgment interest was procedural because it is a "method by which rights . . . are enforced." Id. at 327 (cleaned up). It further reasoned that postjudgment interest "does not create a substantive right" because "the amount to which the plaintiff is entitled has already been resolved" by the judgment. Id. at 326-27.

¶17 The Arizona Court of Appeals has similarly held that "post-judgment interest . . . is generally collateral to the underlying judgment." Aqua Mgmt., Inc., 227 P.3d at 502. It explained that postjudgment interest "is merely an enforcement mechanism designed to encourage timely satisfaction of the judgment," not a part of the substantive judgment. Id.

¶18 For its part, a Texas Court of Appeals has opined that postjudgment interest can be awarded in claims against the government beyond the $250,000 limit set by the Texas Tort Claims Act. Tex. Dep't of Transp. v. Ramming, 861 S.W.2d 460, 469 (Tex. App. 1993), writ denied (Feb. 23, 1994). The court concluded that postjudgment interest could exceed the limit because "by encouraging prompt payment of judgments, [postjudgment interest] is an effective enforcement mechanism." Id.

¶19 SunStone argues that postjudgment interest is a substantive part of the judgment and not an enforcement mechanism. In support of this argument, it claims that this court, in Gressman v. State, "held that statutory provisions affecting post-judgment interest affect substantive rights because they 'enlarge, eliminate, or destroy vested or contractual rights.'" (Quoting 2013 UT 63, ¶ 14, 323 P.3d 998.) SunStone misreads Gressman.

¶20 In Gressman, we considered whether a statutory amendment affected vested...