Wisan v. City of Hildale & Twin City Water Auth.

Decision Date17 June 2014
Docket NumberNo. 20100993.,20100993.
Citation330 P.3d 76,763 Utah Adv. Rep. 49
CourtUtah Supreme Court
PartiesBruce R. WISAN, Plaintiff and Appellee, v. CITY OF HILDALE and Twin City Water Authority, Defendants and Appellants.

OPINION TEXT STARTS HERE

Jeffrey L. Shields, Zachary T. Shields, Michael C. Walch, Michael D. Stanger, Nathan R. Denney, Salt Lake City, for appellee.

Peter Stirba, R. Blake Hamilton, Salt Lake City, for appellants.

Justice DURHAM, opinion of the Court:

INTRODUCTION

¶ 1 This case comes to us as another installment in the ongoing dispute surrounding land owned by the United Effort Plan Trust (Trust) located in Hildale, Utah. In early 2007, appellee Bruce Wisan, court-appointed trustee of the Trust, filed a complaint against the City of Hildale (Hildale) and the Twin City Water Authority (TCWA) to compel the subdivision of certain parcels of Trust property located within Hildale's boundaries. When Hildale and TCWA failed to appear or answer the complaint, Mr. Wisan moved for entry of default judgment against both parties, which the district court granted. Appellants subsequently filed a rule 60(b) motion in the district court to set aside the default judgment. While that motion was pending, appellants filed this direct appeal from the default judgment. The district court ultimately denied appellants' rule 60(b) motion; appellants never appealed from that denial.

¶ 2 Litigants may challenge a default judgment either by filing a rule 60(b) motion with the district court or by appealing the default judgment directly. The choice of which course to follow will depend on the reasons alleged for seeking relief from the judgment. The proper grounds for a direct appeal from a default judgment are necessarily limited to those that were necessarily decided by the district court as a prerequisite to entry of default judgment. The proper grounds for a rule 60(b) motion, in contrast, are limited to those listed in the rule. Because this direct appeal from the default judgment relies exclusively on 60(b) arguments, which were made to the district court in a postjudgment motion and disposed of in an unappealed order, we dismiss this direct appeal as the incorrect vehicle for relief and allow the default judgment to stand.

BACKGROUND

¶ 3 The land in Hildale, Utah, most of which is currently owned by the United Effort Plan Trust, has been the subject of numerous disputes for over two decades.1 The Trust was originally created in 1942 by the spiritual leadership of a fundamentalist religious movement called the “Priesthood Work”—predecessors of the Fundamentalist Church of Jesus Christ of Latter-day Saints (the Church or FLDS). The Trust was created as a depository into which the movement's adherents could contribute or “consecrate” their property to be managed centrally by Church leaders acting as trustees of the Trust. In addition to their role as trustees, FLDS leadership also exerted substantial influence on the civic affairs of Hildale.

¶ 4 Over the ensuing years, the Trust acquired the majority of the land and improvements in Hildale through contributions from Church members, but the Church leadership trustees allowed the contributing residents to continue living on the land. A few decades after the Trust's creation, however, several Trust property residents sued the trustees for breach of fiduciary duty, which set in motion a protracted chain of litigation involving the nature and administration of the Trust.

¶ 5 A primary concern in that litigation was whether the actions (or inactions) of the Church leadership trustees had harmed the interests of Trust property residents. That concern came to a head when the Church leadership trustees left the Trust and its beneficiaries vulnerable to default judgments by failing to retain counsel to defend the Trust in litigation. In response, and at the behest of the attorney general of Utah, the district court removed the Church leadership trustees and appointed a special fiduciary in their stead. The newly appointed fiduciary was given specific instructions to administer the Trust according to the Trust beneficiaries' “just wants and needs” on a neutral, nonreligious basis. In particular, the court ordered the trustee to (a) work toward the payment of the Trust property taxes, (b) request and collect money for the payment of taxes from persons residing on Trust property, and (c) take action to remove persons who refuse to pay their fair share of property taxes from Trust property.

¶ 6 Shortly after the special appointment, Warren Jeffs, then leader of the FLDS Church, made official pronouncements that directed his adherents to refuse to cooperate with the Trust or the court-appointed trustee, specifically declaring that we must continue to answer them nothing and not give into [sic] their proposals.” Mr. Jeffs further stated that it was his intention “not [to] compromise [with the trustee] in the slightest degree” and “not [to] work out differences.”

¶ 7 The court later appointed Mr. Wisan as the successor trustee. In the exercise of his duties, Mr. Wisan became aware that multiple housing structures existed on most of the tax parcels located in Hildale. In many cases, these housing structures belonged to multiple individuals or families, some members of the dominant FLDS religion, and some not. Because Washington County, where Hildale is located, assesses and collects taxes according to the legally described parcels, the various residents of each tax parcel shared the property tax obligation. As a result, nonpayment of taxes by any one resident subjected all of the other residents living on that same tax parcel to the imposition of penalties, interest, and eventually loss of the property to a tax sale. 2

¶ 8 In light of this situation, Mr. Wisan determined it would be prudent to subdivide the Trust property. The conceptualized subdivisions would divide the existing tax parcels into separate legal lots. The primary goal of this subdivision plan was to allow the Trust to distribute separately described pieces of property to Trust beneficiaries, thus allowing them to remain free from the risk of losing their property as a result of their neighbors' tax delinquency. Moreover, subdivision would facilitate the trustee's ability to monitor tax payments connected to each individual housing structure in accordance with the trustee's court-ordered duties.

¶ 9 On numerous occasions, Mr. Wisan consulted with Hildale's mayor David Zitting regarding the proposed subdivision, in hopes of eventually securing the city's approval. Although Mayor Zitting stated it was his personal opinion that subdividing the property into separate legal lots might be good for city management, he stressed that, for nonspecific reasons, he could not cooperate with Mr. Wisan as court-appointed trustee. Notwithstanding Mayor Zitting's lack of cooperation, Mr. Wisan continued to develop the subdivision plan, incurring engineering fees in excess of $1 million to prepare the subdivision plats. Finally, on December 13, 2006, Mr. Wisan submitted a completed application together with the subdivision plats to Hildale for approval as required under Utah law. Utah Code §§ 10–9a–603(3), (4)(a). Hildale, however, remained uncooperative. Hildale's counsel explained to Mr. Wisan that the city “ha[d] elected to abstain from taking any action with respect to the petition to subdivide the property,” 3 but “w[ould] not defend or object to ... the entry of a court order granting a petition to ... subdivide the property.”

¶ 10 Mr. Wisan accordingly filed a complaint against Hildale on January 17, 2007, requesting either (a) a writ of mandamus to compel Hildale to consider the subdivision application, or (b) declaratory judgment directing the Washington County recorder to record the proposed subdivision plats without formal city approval. Mr. Wisan also joined TCWA as a defendant because he believed TCWA was the culinary water authority for Hildale, whose approval was necessary under Utah law to validate the subdivision plan.4SeeUtah Code § 10–9a–603(2)(a). Two copies of the summons and complaint were properly served on Mayor Zitting, one in his capacity as registered agent of Hildale, and the other in his capacity as registered agent of TCWA. But, consistent with the communications from Mayor Zitting and Hildale's counsel, neither Hildale nor TCWA opposed the complaint by filing a timely response. As a result, on February 27, 2007, the court entered default against both Hildale and TCWA under rule 55(a) of the Utah Rules of Civil Procedure.

¶ 11 Nevertheless, in an effort to maintain a working relationship with the city, Mr. Wisan refrained from immediately petitioning the court for default judgment. Instead, he continued to work with the county's engineers and surveyors to prepare acceptable subdivision plats.5 Mr. Wisan also sent a letter to Mayor Zitting proposing a five-month timetable to negotiate with the city and come to a voluntary agreement regarding subdivision. In light of the city's prior lack of cooperation, Mr. Wisan also noted that if no voluntary agreement could be reached, he would simply petition the court for entry of default judgment. Mr. Wisan finished his letter by requesting a timely response to the proposed five-month timetable and asked the city to propose any other viable alternatives it deemed preferable. Mayor Zitting never responded.

¶ 12 Around this same time, and in an abrupt change of course, Mr. Jeffs sent a letter to his followers instructing them to cease passively ignoring the appointed fiduciary and to instead retain legal counsel and demand “protection of their rights.” Such action, he said, would appear to be the work of individuals rather than the authorities of the Church, creating the impression that “the Priesthood is answering them nothing, but at the same time individuals are demanding their rights of protection.” In the following weeks, Mr. Wisan perceived what he described as more ardent opposition...

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2 cases
  • Garver v. Rosenberg
    • United States
    • Utah Supreme Court
    • February 24, 2015
    ...of Hildale, district courts retain authority to deny motions under rule 60(b) even after a notice of appeal is filed. 2014 UT 20, ¶ 21, 330 P.3d 76 ("Notwithstanding the filing of a notice of appeal, the district court still had jurisdiction to rule on the 60(b) motion pending before it.").......
  • Garver v. Rosenberg
    • United States
    • Utah Supreme Court
    • October 10, 2014
    ...of Hildale, district courts retain authority to deny motions under rule 60(b) even after a notice of appeal is filed. 2014 UT 20, ¶ 21, 330 P.3d 76 (“Notwithstanding the filing of a notice of appeal, the district court still had jurisdiction to rule on the 60(b) motion pending before it.”).......

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