Timm v. Dewsnup
| Decision Date | 13 August 1996 |
| Docket Number | No. 950073,950073 |
| Citation | 921 P.2d 1381 |
| Parties | Louis L. TIMM, John Neiuwland, and Floyd M. Childs, trustees of United Precision Machine and Engineering Company Profit Sharing Trust; ABCO Insurance Agency, Inc., a Utah corporation; and Joseph L. Henriod, trustee for the Annette Jacob Trust, Plaintiffs and Appellees, v. T. LaMar DEWSNUP and Aletha Dewsnup; Arrow Investment Co., a limited partnership; The Federal Land Bank of Berkeley; Imperial Land Title Inc., as trustee, and Eugene L. Carson and Elaine Carson as beneficiaries; Stringham, Mazuran, Larsen & Sabin, a professional corporation; Mineral Fertilizer Co., Inc.; and Harry V. Kaps, Defendants and Appellants. |
| Court | Utah Supreme Court |
This matter comes before us for the second time. The first appeal resulted in remand to the trial court for further consideration. Timm v. Dewsnup, 851 P.2d 1178 (Utah 1993) (Timm I ). Defendant Aletha Dewsnup 1 now appeals the trial court's (1) denial of her motion to reconsider summary judgment, (2) denial of her motion to amend her counterclaim, (3) dismissal of her counterclaim, (4) release of the lis pendens on the trust deed property, and (5) denial of her jury demand on her counterclaim. We affirm in part, reverse in part, and remand for further proceedings.
While the facts in this case were detailed in Timm I, we recite those facts leading up to Timm I to establish the background for this appeal. Facts relating to each issue now on appeal are developed in greater detail in the corresponding analysis section.
In June of 1978, T. LaMar and Aletha Dewsnup, farmers near Delta, Utah, borrowed $119,000 for a two-year period to purchase a motel. The three lenders were the Annette Jacob Trust Fund, United Precision Machine and Engineering Company Profit Sharing Trust, and ABCO Insurance Agency Inc. (the lenders). The Dewsnups executed three promissory notes totaling $119,000. In addition, the lenders required that the Dewsnups provide security for the loan. Therefore, the Dewsnups executed (1) a trust deed in favor of the lenders for the Dewsnups' 160-acre farm together with its water rights and 56.71 acres of land in Oak City, Utah (collectively, the trust deed property), (2) a document entitled "Assignment of Contract" assigning to the lenders the Dewsnups' interest in a real estate purchase contract, and (3) a document entitled "Security Agreement" securing the loan with certain water rights owned by the Dewsnups.
Through the "Assignment of Contract," the Dewsnups assigned any right, title, and interest they held in farmland adjacent to their farm (the Arrow property), which they held pursuant to a real estate purchase contract with Arrow Investment Company (the Arrow contract). The "assignment" was executed to provide additional security for the promissory notes and presumably would have been extinguished when the Dewsnups repaid the loan in full. Under the terms of the assignment, the Dewsnups were to continue making annual installment payments and paying taxes on the Arrow property pursuant to the terms of the Arrow contract, and in the event the Dewsnups defaulted on such payments, the lenders were authorized to make those payments.
On June 1, 1980, the Dewsnups defaulted on the $119,000 promissory notes. They also failed to pay the 1979 property taxes on the Arrow property and failed to make a January 2, 1980, annual installment payment pursuant to the Arrow contract. The lenders subsequently made the January 2, 1980, Arrow contract payment in the amount of $47,880.50 and paid the property taxes owing on the Arrow property in the amount of $2,085.71. Thereafter, the lenders asserted that the Dewsnups owed them $49,966.21 in addition to the $119,000 promissory notes.
On September 15, 1980, the lenders filed a complaint against the Dewsnups and other individuals with an interest in the Dewsnups' property, alleging that pursuant to the terms of the promissory notes, the Dewsnups were obligated to pay the principal and interest on the $119,000 loan on or before June 1, 1980, which the Dewsnups had failed to do. They further alleged that to protect their interest in the property securing the loan, it was necessary for the lenders to make the payments due under the Arrow contract in the total amount of $49,966.21 and that the Dewsnups additionally owed this amount plus interest. Accordingly, the lenders sought a judgment to determine defendants' respective rights and priorities in the Arrow property, which secured the promissory notes pursuant to the assignment of contract, and in the water rights which secured the promissory notes pursuant to the security agreement, and sought an order of sale on such property. The lenders additionally stated in their complaint that the "obligation herein sued upon" was secured by the trust deed and that the lenders would be conducting a trust deed sale on or after September 26, 1980. The complaint included a description of the properties (the Oak City property and the Dewsnups' farm and appurtenant water rights) that would be subject to the trust deed sale.
On November 21, 1980, the Dewsnups filed an answer admitting that they borrowed $119,000 from the lenders and that this money was due. They also admitted that the promissory notes were secured by the trust deed but alleged that the lenders were entitled to foreclose only on their 160-acre farm and appurtenant water rights, but not on the Oak City property, which they claimed they did not intend to include in the trust deed. However, the Dewsnups denied owing the lenders the $49,966.21 paid under the Arrow contract, alleging that they were coerced into assigning their interest under the Arrow contract and denying the validity of that assignment. In addition, they filed a counterclaim seeking to reform the trust deed to include only the 160-acre farm and water rights but not the Oak City property and to vacate the assignment of contract on the ground that their former attorneys breached their fiduciary duty to fully disclose to them the contents of the documents involved in the loan transaction.
In December of 1980, while the lawsuit was pending, the Dewsnups paid the lenders the principal and interest due on the $119,000 loan. However, the lenders claimed that the Dewsnups still owed them $49,966.21 plus interest for the lenders' payments under the Arrow contract.
On March 3, 1981, the lenders moved for summary judgment against the Dewsnups. The lenders asserted that the Dewsnups were still indebted to them "in the sum of $49,966.21 in principal, plus interest, attorney's fees, and court costs, as a result of their breach of contract on promissory notes, securred [sic] by real property and water rights" and that there were no material issues of fact remaining and they were entitled to summary judgment as a matter of law.
On April 14, 1981, the trial court heard the motion for summary judgment. The Dewsnups failed to appear in court for the hearing on the motion. The trial court granted summary judgment in favor of the lenders on the basis of the unrebutted affidavit of Lewis Timm, trustee for two of the lenders. The court held that the Dewsnups owed the lenders $49,966.21 plus interest, together with $53.50 for court costs and $6,985 for the costs of collection, including attorney fees. The trial court additionally held that these amounts were secured by the "mortgage and security agreement ... as well as the trust deed property." 2 The trial court ordered that the Arrow property and the water rights described in the assignment of contract and security agreement respectively be sold at public auction.
On January 22, 1991, 3 the Dewsnups moved for reconsideration of the summary judgment on the grounds that (1) the Dewsnups were not contractually obligated to reimburse the lenders for their $49,966.21 payment under the Arrow contract because new evidence established that the Arrow contract had terminated prior to the lenders' payments under such contract, and (2) the $49,966.21 due under the Arrow contract was not secured by the trust deed as stated in the summary judgment.
The Dewsnups also moved to amend their counterclaim asserting new claims against the lenders and renewing the claims against their former attorneys. On February 21, 1991, the trial court issued an order denying both motions on the grounds that it had implicitly denied the counterclaim when it granted summary judgment in 1981 and that the summary judgment was final and appealable at that time.
In March of 1991, the Dewsnups appealed the denial of their motions to reconsider and to amend their counterclaim to this court. They argued that the summary judgment did not wholly dispose of the case and thus the summary judgment was subject to reconsideration. Further, they argued that the summary judgment did not wholly dispose of their counterclaim and that the trial court should have addressed the merits of their motion to amend the counterclaim.
In 1993, this court held that the trial court had erred in denying the Dewsnups' motions to reconsider and to amend their counterclaim. Timm I, 851 P.2d at 1182-84. We held that the summary judgment did not wholly dispose of the case and was therefore subject to revision, making a motion for reconsideration permissible. Id. at 1185. We further held that the summary judgment did not wholly dispose of the counterclaim and therefore part of the counterclaim remained in the trial court. Id. at 1182. We also held, however, that the summary judgment "implicitly and necessarily constituted an adverse ruling" on that part of the counterclaim which sought to vacate the assignment of contract as security for the promissory notes. Id. Therefore, we remanded to the...
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