Utah Res. Int'l, Inc. v. Mark Techs. Corp.

Citation342 P.3d 779,2014 UT 60
Decision Date23 December 2014
Docket NumberNo. 20130131.,20130131.
CourtSupreme Court of Utah
PartiesUTAH RESOURCES INTERNATIONAL, INC., a Utah Corporation, Appellant, v. MARK TECHNOLOGIES CORPORATION and Kenneth G. Hansen, Appellees.

John H. Bogart, Salt Lake City, Craig M. White, Chicago, IL, for appellant.

Bruce J. Boehm, Salt Lake City, for appellees.

Chief Justice DURRANT authored the opinion of the Court, in which Associate Chief Justice NEHRING, Justice DURHAM, Justice PARRISH, and Justice LEE joined.

Chief Justice DURRANT, opinion of the Court:

Introduction

¶ 1 After the district court denied Utah Resources International, Inc.'s (URI) amendedmotion to stay enforcement of the judgment (Amended Motion) in this appeal's companion case (valuation case), URI filed an application for a stay with this court under rule 8 of the Utah Rules of Appellate Procedure, asking for essentially the same relief. While that application was pending, URI filed a separate appeal, arguing that the district court improvidently denied its request to abate interest as a term of the stay under rules 62 and 60(b) of the Utah Rules of Civil Procedure. We later denied URI's request under rule 8 but permitted the parties to brief the issue of whether this appeal was moot because we had denied URI's rule 8 motion. The parties instead briefed the question of whether the valuation case was moot—a question that we address separately in that appeal.1

¶ 2 As we clarify in our opinion below, the district court did not abuse its discretion in refusing to abate interest under rules 62 and 60(b) of the Utah Rules of Civil Procedure. District courts do not have authority to abate interest under rule 62, and URI never requested relief under rule 60(b) with the district court. Accordingly, the district court did not abuse its discretion in denying URI's Amended Motion.

Background

¶ 3 In June 2004, appellant URI conducted a share consolidation transaction. Appellees Mark Technologies Corporation (MTC) and Kenneth G. Hansen dissented (Dissenters). Section 16–10a–1302 of the Utah Code entitles such dissenters to payment of the fair value of their shares, but the parties were unable to agree to the fair value. Pursuant to section 16–10a–1330 of the Utah Code, URI petitioned the district court to determine the fair value of the shares. In May 2012, the district court entered judgment, determining that the fair value of each share was $10,722. The district court awarded MTC $1,347,090.61 plus ten percent interest compounded annually and awarded Mr. Hansen $335,002.50 plus ten percent interest compounded annually. The merits of that determination are before this court in a separate appeal.

¶ 4 In response, URI filed a motion with the district court under rule 62 of the Utah Rules of Civil Procedure to stay execution pending the appeal. In its motion, URI requested that, in lieu of a supersedeas bond, the district court allow URI to deposit with the court the principal amount of the judgments, plus three years of interest. Per rule 62(j)(2)(A), this is the presumptive amount the court should require to stay execution. Shortly after URI filed this motion, the Dissenters began execution proceedings and recorded the judgment, which created a lien against URI's property.

¶ 5 Before the district court ruled on the motion, and in an effort to stave off the compounding interest, URI sent an email to the Dissenters, asking if they would be interested in entering into an alternative agreement. In the email, URI proposed to pay the Dissenters the full judgment amount, but with key stipulations that are now the center of this controversy: (1) that URI preserves its right to appeal, (2) that the payment stays the judgment, (3) that all liens are released, (4) that further interest on the judgment is waived, (5) that the Dissenters repay URI to the extent the judgments are altered on appeal, and (6) that the judgments be deemed satisfied and that a satisfaction of judgment be filed should the judgments be affirmed on appeal.

¶ 6 Before the Dissenters responded, the district court granted URI's motion to stay, provided that it deposit the principal amount plus three years' worth of interest. The motion was granted without prejudice to URI's right to pay the judgment in lieu of or subsequent to the deposit. Thereafter, Mr. Hansen informed URI that he would not agree to URI's proposed payment stipulations, and MTC proposed a few changes to the agreement, including that interest continue to accrue at five percent during the appeal. In the end, the parties did not enter into any agreement.

¶ 7 A week after the court approved its initial stay request, URI filed its Amended Motion, seeking two changes to its original motion. First, it sought permission to deposit only the amount it owed at that point to the Dissenters, without any future interest. Second, it asked the district court to order that the accrual of interest was abated because the Dissenters rejected URI's offer to pay the judgment by the previously mentioned stipulations. The district court denied the Amended Motion, citing its lack of statutory or equitable power, but the judge did note that URI's willingness to pay the judgments centered on its desire to abate interest and not to waive its right to appeal. The present appeal, which was filed on February 5, 2013, stems from this order.

¶ 8 At the suggestion of the district court, URI paid part of the judgments in the amounts of $750,000 to MTC and $185,000 to Mr. Hansen. In the letter delivering the payment, URI stated that it did not intend to waive its current appeal and that it was paying only to abate interest and reduce the threat of postjudgment enforcement proceedings. The Dissenters accepted the payments and filed partial satisfactions of judgment.

¶ 9 On January 17, 2013, the Dissenters obtained a supplemental order directing URI to appear for a debtor's examination. On January 25, URI filed a motion with the district court to vacate that order, which was denied. On the same day, URI filed a new motion to stay execution directly with this court under rule 8 of the Utah Rules of Appellate Procedure. We denied URI's motion and further requested that the parties submit memoranda addressing the question of whether our denial of URI's rule 8 motion mooted URI's appeal of the district court's denial of the Amended Motion. In the end, we deferred our consideration of mootness until plenary consideration of the merits of URI's appeal.

¶ 10 In April 2013, URI informed the Dissenters that it had placed the remaining amount of the judgment, with interest, in a single bank account. URI stated that it placed the money in a single account in hopes of forestalling the Dissenters' enforcement efforts. As of today's date, the Dissenters have not collected the money. We have jurisdiction pursuant to Utah Code section 78A–3–102(3)(j).

Standard of Review

¶ 11 URI brings its challenge under rules 62 and 60(b) of the Utah Rules of Civil Procedure. As to URI's request for a stay under rule 62, [t]he decision to stay enforcement of a judgment is within the discretion of the reviewing court,”2 and we review the district court's denial of URI's Amended Motion for an abuse of discretion.3 Furthermore, “a district court has broad discretion in ruling on a motion to set aside an order or judgment under rule 60(b), and [t]hus, we review a district court's denial of a 60(b) motion under an abuse of discretion standard.”4

Analysis

¶ 12 URI challenges two interrelated aspects of the district court's ruling below: (1) its failure to grant a stay under URI's desired conditions and (2) its failure to abate interest as of June 11, 2012—the date on which URI claims it properly tendered payment of the judgment. At bottom, however, URI is merely challenging the district court's refusal to approve a lesser amount of security by abating interest, since the court already approved URI's previous request for a stay conditioned on a deposit of the presumptive statutory security amount.

¶ 13 As explained below, the district court did not err in declining to abate interest, and it was correct in ruling that it lacked authority to abate interest under rule 62. Furthermore, we do not review URI's rule 60(b) challenge, since URI never filed a rule 60(b) motion in the district court. To properly obtain review of the abatement of interest issue, URI needed to tender payment of the judgment and then seek a satisfaction of judgment with the district court under rule 58B of the Utah Rules of Civil Procedure. URI never tendered payment of the judgment, let alone filed a motion under rule 58B. The district court therefore did not abuse its discretion in denying URI's request to abate interest.

I. The District Court Properly Declined to Abate Interest and Grant an Alternative Stay Request

¶ 14 As we explain below, it was not error for the district court to refuse to abate interest under rules 62 and 60(b), since district courts do not have authority to do so under rule 62, and because URI never requested relief in the district court under rule 60(b). Furthermore, we clarify that a party's request to abate interest is properly done under rule 58B by seeking a satisfaction of the judgment.

A. A Party May Both Apply for a Stay Under Rule 8 and Appeal From a District Court's Order Denying Its Request for a Stay Under Rule 62

¶ 15 Under rule 62(d) of the Utah Rules of Civil Procedure, a judgment debtor may seek a stay of execution from a judgment “by giving a supersedeas bond.” If the district court denies the judgment debtor's request, or fails to grant the specific relief requested, the judgment debtor may file an application for a stay in the appellate court pursuant to rule 8 of the Utah Rules of Appellate Procedure. In that instance, our review of the application is de novo, though the application must show “that the trial court has denied an application, or has failed to afford the relief which the applicant requested, with the reasons given by the...

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