Turley v. Childs
| Decision Date | 08 July 2022 |
| Docket Number | 20210390-CA |
| Citation | 515 P.3d 942 |
| Parties | Steve TURLEY, Appellee, v. Trudy J. CHILDS and Rory J. Childs, Appellants. |
| Court | Utah Court of Appeals |
Barry N. Johnson, Daniel K. Brough, and Ryan M. Merriman, Attorneys for Appellants
Craig Carlile and Brent D. Wride, Attorneys for Appellee
Opinion
¶1 More than a decade ago, Trudy and Rory Childs (the Childs Parties) agreed to provide Steve Turley an option to purchase certain real property. In the years since then, Turley has filed two lawsuits aimed at compelling the Childs Parties to recognize his exercise of that option and to complete the conveyance. The district court in the second lawsuit entered summary judgment in Turley's favor, and the Childs Parties now appeal. We affirm.
¶2 Since at least 2008, the Childs Parties have owned approximately 2,600 acres of real property (the Property) located in the Diamond Fork area of Spanish Fork Canyon, in Utah County, Utah. In 2008, the Childs Parties conveyed to Turley an option to purchase the Property. Later that year, Turley sought to exercise that option, but the Childs Parties refused to sell. Turley then filed suit (the First Lawsuit) against the Childs Parties, seeking an order compelling them to convey the Property. After some six years of litigation, with both sides represented by counsel, the case proceeded to trial in December 2014. But during the trial, the parties informed the court that they had reached an agreement to settle the case (the Agreement). The parties set forth the terms of the Agreement in an unsigned handwritten memorandum, and the parties also recited, in open court, the particulars of the Agreement for the record.
¶3 Under the terms of the Agreement, as recited by Turley's attorney on the record, the Childs Parties were to market the Property generally for eight months, and would "grant to [Turley] a right of first refusal to purchase" the entire Property; that right of first refusal was to exist for the entirety of the eight-month marketing period. During that period, the Childs Parties were to "give [Turley] 60 days notice of any bona fide offer," and it was "understood that if an offer came in on the last day of the eight- month period [the parties] would still have 60 days to effectuate" a closing. "At the end of eight months if the [P]roperty ha[d] not been sold or [was] not under contract to be sold," Turley could "purchase [the Property] ... at an appraised amount." If the parties did not "agree on the appraisal that [came] forward," then each side would "identify an appraiser" and "[t]hose two appraisers [would] then identify a third appraiser" whose valuation would serve as "the appraised value" that Turley would "pay in order to purchase [the Property]." The appraisal was to "comply with the federal standards, which are commonly referred to as yellow book standards."
¶4 After Turley's attorney finished reciting the terms of the Agreement, the Childs Parties’ attorney confirmed that "that is our agreement." The court then asked both Trudy and Rory Childs if that was "the agreement as [they] underst[ood] it," and they each replied in the affirmative. The parties then stated their intent to "formalize" the Agreement and, at a later date, "provide to the court a notice of dismissal" of the lawsuit.
¶5 The parties, however, were never able to "formalize" the Agreement to their mutual satisfaction. Over the next couple of years, they exchanged various draft documents, but were unable to agree on the terms of a formal settlement document. At one point, the court issued a notice asking the parties to show cause why their dormant First Lawsuit should not be dismissed, and the parties responded with a joint statement, signed by counsel for both sides, stating that they were working on a formal document but "there exists a dispute about a couple of terms that the parties are trying to resolve," and expressed their belief that the last remaining issues would be resolved within thirty days. But the parties’ optimism was misplaced, and eventually Turley filed a motion to enforce the Agreement. In response, the Childs Parties filed a document asserting, among other things, that they would be "happy to sign a printed copy of the [trial] transcript together with [the unsigned handwritten memorandum] as the final agreement." A few months later, the parties agreed to dismiss the First Lawsuit with prejudice, even though no formal settlement document had been signed.
¶6 In the meantime, the Childs Parties had moved forward with marketing the Property. No third-party buyer made an offer on the Property, so each side selected an appraiser, and those two appraisers selected a third appraiser (Appraiser 1). But the Childs Parties objected to Appraiser 1, and he was unable to complete his work. Later, however, the parties agreed to have a different appraiser (Appraiser 2) perform an appraisal of the Property, but he also discontinued his efforts, apparently due to the Childs Parties’ refusal to sign an engagement letter for his services. Finally, Turley re-engaged Appraiser 1—the appraiser selected by the two sides’ chosen appraisers—and asked him to complete an appraisal on the Property. After completing his work, Appraiser 1 issued a lengthy report in which he concluded that the Property's value was $1.618 million. Within a week of the issuance of Appraiser 1's report, Turley tendered $1.618 million to the Childs Parties via cashier's check.
¶7 During this time, Turley filed a second motion to enforce the Agreement, and did so under the auspices of the dismissed First Lawsuit. The Childs Parties filed no opposition to Turley's motion and the court therefore granted it, but the Childs Parties objected to the form of the order granting Turley's motion. The court scheduled a "status conference" for May 14, 2018, to discuss the situation. Four days before the scheduled hearing, on May 10, the Childs Parties filed a bankruptcy petition, an act that required the court to postpone the hearing.2 The Childs Parties dismissed their bankruptcy petition in June 2018, and the court rescheduled the hearing for August 13, 2018. But the day before that hearing, on August 12, Trudy Childs filed a bankruptcy petition, an act that required the court to again postpone consideration of the matter. The second bankruptcy petition was dismissed in December 2018.
¶8 At that point, Turley filed a second lawsuit (the instant lawsuit, referred to herein as "the Second Lawsuit") to seek enforcement of the Agreement. In particular, Turley brought claims for declaratory judgment that the Agreement was valid and enforceable and for specific performance under the Agreement. The attorney who had previously represented the Childs Parties in the First Lawsuit did not enter an appearance on their behalf in the Second Lawsuit, but he did apparently assist them in filing a pro se answer to Turley's complaint. As the case progressed, the Childs Parties, now proceeding pro se, did not submit initial disclosures or conduct any discovery, and after the discovery deadline passed, Turley filed a motion for summary judgment and for sanctions.
¶9 Turley's motion—which encompassed some 513 pages and included twenty-five exhibits, including affidavits, deposition transcripts, court documents from the First Lawsuit, and Appraiser 1's full report—was filed on August 18, 2020. In the motion, Turley argued that the Agreement was "a binding, enforceable contract as read into the court record" at the trial in 2014. Specifically, Turley asserted that the Childs Parties had agreed that what was read into the record accurately reflected their agreement, that it was common for oral agreements to later be formalized, and that any lack of later memorialization did not "preclude the enforcement or finality of [the Agreement] ... so long as the terms [were] sufficiently definite as to be capable of being enforced." Turley also pointed out that the Childs Parties had earlier stated that they were "happy to sign a printed copy of the [t]rial transcript together with [the unsigned handwritten memorandum] as the final agreement."
¶10 And Turley asserted that he had performed pursuant to the Agreement. No buyer had offered to purchase the Property during the eight-month marketing period, and therefore Turley's right to purchase the Property for an appraised value was triggered. Thereafter, each side had designated an appraiser, and those two appraisers selected Appraiser 1 to value the Property. Appraiser 1's valuation was delayed due to the Childs Parties’ objection, but he eventually completed an appraisal of the Property, valuing it at $1.618 million. And Turley tendered that amount to the Childs Parties.
¶11 In the part of his motion addressing sanctions, Turley also asserted that the Childs Parties had not complied with their obligations during discovery, specifically pointing out that they had not submitted initial disclosures and had failed to attend their duly noticed depositions. Although Turley sought sanctions pursuant to both rule 26 and rule 37 of the Utah Rules of Civil Procedure, Turley had not—before filing the motion—filed any statement of discovery issues bringing to the court's attention any of the Childs Parties’ alleged discovery violations.3
¶12 The Childs Parties did not timely oppose Turley's motion; instead, on September 1, 2020—just days before their opposition memorandum would have been due—Trudy Childs filed yet another bankruptcy petition. On October 15, however, the bankruptcy case was dismissed, apparently due to Trudy Childs's failure to complete the required pre-filing credit counseling briefing prior to filing.
¶13 Two weeks later, on October 30—after the court had scheduled a hearing for November 3 to consider the pending motions—a new attorney entered an appearance on behalf of the Childs Parties and filed...
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