This opinion is subject to revision before

publication in the Pacific Reporter

2017 UT 62

IN THE

SUPREME COURT OF THE STATE OF UTAH

2DP BLANDING, LLC,

Appellee,

v.

RAY W. PALMER, et al.,

Appellants,

BLACK OIL CO.,

Third-Party Plaintiff and Appellee,

v.

FIRST NATIONAL BANK OF LAYTON,

Third-Party Defendant.

No. 20150670

Filed September 6, 2017

On Direct Appeal

Seventh District, San Juan

The Honorable Lyle R. Anderson

No. 140700017

Attorneys:

Richard E. Mrazik, Adam E. Weinacker, Salt Lake City, for appellee 

2DP Blanding, LLC

Craig C. Halls, Blanding, for appellants

Ronald G. Russell, Royce B. Covington, Jeffery A. Balls, Salt Lake City, 

for appellee Black Oil Company
2DP BLANDING v. PALMER

Opinion of the Court

2

ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court, in 

which CHIEF JUSTICE DURRANT, JUSTICE HIMONAS, JUSTICE PEARCE, and 

JUDGE HOLMBERG joined.

Having recused herself, JUSTICE DURHAM does not participate herein; 

DISTRICT JUDGE KENT R. HOLMBERG sat.

ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:

¶ 1 The district court proceedings in a prior case resulted in the 

entry of a court order authorizing a foreclosure sale of parcels of real 

property. That order was not stayed pending appeal. And the sale was 

executed while the appeal went forward. The property was eventually 

purchased by an entity that was not a party to the litigation. We are 

asked whether the third-party purchaser took the property subject to 

the resolution of the case on appeal. We answer this question in the 

negative. We conclude that an appellant who takes no action to 

preserve his interests in property at issue on appeal has no recourse 

against a lawful third-party purchaser.

I

¶ 2 This case is an offshoot of a lien dispute between Ray Palmer 

and First National Bank. In July 2003, Palmer agreed to sell two parcels

of commercial real estate to JDJ Holdings, Inc. JDJ obtained two loans to 

finance the purchase—one from First National and one from Palmer.

Both loans were secured by trust deeds. First National recorded its 

deed on December 5, 2003, and had first position. Palmer recorded his 

deed on December 12, 2003, and had second position.

¶ 3 Due to a flaw in the initial loan approval, First National was 

required to record a new deed after Palmer recorded his deed. Before 

recording the new deed, First National got an erroneous title report that 

failed to show the Palmer deed. And despite having knowledge of 

Palmer’s loan at its inception, First National relied on the erroneous 

title report and simply revoked its original deed and recorded the new

deed on March 8, 2004. The bank did not obtain a subordination

agreement from Palmer. The new deed accordingly appeared to elevate 

Palmer’s deed to first position. But no one discovered this repositioning

at the time.
Cite as: 2017 UT 62

Opinion of the Court

3

¶ 4 Five years later JDJ defaulted on both loans. Palmer and First 

National both claimed that their deed was entitled to senior position. 

The deed holders initiated legal proceedings to settle the dispute, and

the district court granted summary judgment to First National. The 

court held that the bank was entitled to equitable reinstatement of its 

original deed. It also authorized First National to “exercise all rights 

and remedies provided by its Trust Deed with respect to the Property,” 

including proceeding with a foreclosure sale. 

¶ 5 Palmer appealed the court’s decision on April 8, 2011. He 

challenged the lien priority established by the district court’s order. But 

he did not formally seek or obtain a stay of the order. And he did not 

file a lis pendens on the property at any point during the litigation. 

¶ 6 On June 29, 2011, First National issued a Notice of Trustee’s 

Sale under its reinstated trust deed. First National then purchased the 

parcel at issue in this case, Parcel 2, at the trustee’s sale on August 8, 

2011. It subsequently conveyed the parcel to Black Oil Company.

¶ 7 In February 2013, the Utah Court of Appeals overturned the 

district court’s order. The court concluded that the district court erred 

in reinstating First National’s first deed. And it remanded for further 

proceedings in light of Palmer’s senior deed. 

¶ 8 2DP Blanding, LLC entered the scene shortly thereafter. It 

purchased Parcel 2 from Black Oil on July 7, 2013. The following day, 

Palmer recorded a Notice of Default and Election to Sell under his 

original trust deed. And the day after that, 2DP recorded its warranty 

deed for the parcel.1

¶ 9 Three months later 2DP filed suit, seeking to quiet title to 

Parcel 2 and to enjoin Palmer’s foreclosure sale. The parties filed 

competing motions for partial summary judgment. 2DP argued that it 

owned the parcel free and clear of Palmer’s trust deed because Palmer 

failed to obtain a stay of the court’s order authorizing the original

foreclosure sale and the parcel was properly sold pursuant to that 

order. Palmer countered that because First National bought the parcel 

at the foreclosure sale, all subsequent purchasers of the parcel took 

 

1 Palmer does not assert that 2DP had knowledge of his intention to 

foreclose Parcel 2 at the time it purchased the property.
2DP BLANDING v. PALMER

Opinion of the Court

4

subject to First National’s knowledge of Palmer’s appeal of the court 

order.

¶ 10 The district court granted summary judgment in 2DP’s favor. 

It concluded that Black Oil and 2DP were both bona fide purchasers 

and neither had actual knowledge of Palmer’s appeal. It also

emphasized that the foreclosure order was the only recorded document 

relating to the First National case. 

¶ 11 Palmer did not obtain a stay of that order or provide notice of 

his appeal by recording a lis pendens. So, the court concluded, Black Oil 

and 2DP “had no notice to suggest that the order was subject to an 

appeal” and had no independent duty to inquire and determine 

whether Palmer had appealed the order.

¶ 12 Palmer filed a timely appeal. We review the court’s grant of 

summary judgment for correctness. Heslop v. Bear River Mut. Ins. Co.,

2017 UT 5, ¶ 15, 390 P.3d 314.

II

¶ 13 A party who appeals an adverse final order may obtain a stay

of that order pending the decision on appeal. UTAH R. CIV. P. 62(d). 

When such a stay is entered, all parties are barred from executing the 

stayed order. But a stay is conditioned upon the payment of a 

supersedeas bond. Id. And some parties accordingly elect not to obtain 

a stay. In that event, the adverse order and any resulting judgments 

“remain[] valid and enforceable during the pendency of an appeal.”2

See, e.g., Cheves v. Williams, 1999 UT 86, ¶ 47, 993 P.2d 191; Skeen v. Pratt,

48 P.2d 457, 458 (Utah 1935); see also Franklin Fin. v. New Empire Dev. Co., 

659 P.2d 1040, 1043 (Utah 1983).

¶ 14 Mr. Palmer finds himself in that position. He failed to obtain a 

stay of the order authorizing First National to proceed with a 

foreclosure sale—a decision that paved the way for the lawful sale of 

the property to third parties, first to Black Oil and later to 2DP. Yet 

Palmer asks us to allow him to avoid the consequences of his decision 

not to seek a stay of the order in question. He notes that he has now 

secured a reversal of the order in the decision of the court of appeals. 

And he now asks us to reinstate his property interest in Parcel 2.

 

2 Hughes v. Brown, 575 N.E.2d 1186, 1190 (Ohio Ct. App. 1989)

(citation omitted).
Cite as: 2017 UT 62

Opinion of the Court

5

¶ 15 The threshold question presented is whether an appeal of an 

unstayed foreclosure order creates a cloud on title of the subsequently

foreclosed property. If it does, Black Oil and 2DP purchased Parcel 2 

subject to Palmer’s appeal of First National’s foreclosure order—and 

Palmer maintains a valid and actionable interest in the property. If it 

doesn’t, 2DP owns Parcel 2 free and clear of that appeal—and Palmer 

has no further recourse against the property or 2DP.

¶ 16 2DP asserts that its title to Parcel 2 is not clouded by Palmer’s 

appeal of the foreclosure order because the subsequent, lawful 

foreclosure sale extinguished Palmer’s trust deed by operation of law.

Palmer, on the other hand, claims that his appeal fully preserved his 

interest in Parcel 2. Under his theory, Black Oil and 2DP were both on 

inquiry notice of his appeal because First National recorded the 

foreclosure sale order. And, in Palmer’s view, Black Oil and 2DP 

should have looked to the court docket, seen that the order had been 

appealed, and realized that Palmer still had a claim to the property.

¶ 17 Palmer also proffers two additional grounds for reversing the 

district court. First he argues the original foreclosure sale and 

subsequent transfers were invalid because First National did not 

properly record the foreclosure sale order. And second he claims that 

2DP was barred from challenging the survival of his trust deed under 

the doctrine of collateral estoppel.

3

¶ 18 We reject each of Palmer’s arguments and agree with 2DP. We 

first hold that an appeal from an unstayed foreclosure order does not 

create a cloud on title. Then we reject Palmer’s alternative grounds for 

reversal.

 

3 The parties frame their arguments on this point as arising under 

the doctrine of res judicata. And we acknowledge that that terminology 

is sometimes used to encompass issue preclusion or collateral estoppel. 

But we use the terminology of collateral estoppel here because we find 

it more precise in distinguishing issue preclusion from claim preclusion 

(which is often what we mean when we speak of res judicata). See Oman 

v. Davis Sch. Dist., 2008 UT 70, ¶ 28, 194 P.3d 956 (“Issue preclusion, 

which is also known as collateral estoppel, ‘prevents parties or their 

privies from relitigating facts and issues in the second suit that were 

fully litigated in the first suit.’” (citation omitted)). 
2DP BLANDING v. PALMER

Opinion of the Court

6

A

¶ 19 Palmer asserts that 2DP had inquiry notice of the litigation 

and subsequent appeal regarding Parcel 2. And on that basis he claims 

that 2DP took the property subject to his trust deed, and thus that the 

district court erred in ruling that 2DP was a bona fide purchaser that 

acquired title to Parcel 2 free and clear of Palmer’s prior interest in the 

property. 

¶ 20 Palmer’s position would require us to rule that an appeal 

automatically creates a cloud on the title of property affected by an 

appealed order—even if the appellant does not obtain a stay of the 

appealed order. We decline to do so. 

¶ 21 When an appeal is taken without supersedeas bond or stay, 

“the judgment or order appealed from is enforceable as though no 

appeal had been taken.” Skeen, 48 P.2d at 458 (citation omitted). “Any 

other result would nullify the requirement that the appellant obtain a 

stay pending appeal.” Richards v. Baum, 914 P.2d 719, 721 (Utah 1996). 

¶ 22 Granted, a litigant is not entitled to keep all the proceeds of its

executed judgment when the underlying order is reversed.4 But an 

appellant cannot retroactively invalidate a foreclosure sale if the sale 

was executed during the appeal and the appellant did not obtain a stay 

of execution.5

¶ 23 The question presented here is whether this latter principle 

extends to this case. Palmer contends that it does not. Palmer insists 

that a successful appellant instead maintains an interest in the property

 

4 See Franklin Fin. v. New Empire Dev. Co., 659 P.2d 1040, 1043 (Utah 

1983) (“[A]ppellants seek not to prevent the sale, but to establish their 

right to a share of the sale proceeds. That relief could be granted even 

though the sale is already completed and the time for redemption has 

elapsed.”).

5 Id. (“[I]f appellants were seeking on this appeal to prevent the 

foreclosure sale, and because of their failure to obtain a stay of 

execution, the sale were legally carried out during the pendency of the 

appeal and the time for redemption had run, the appeal would be 

moot.” (citing Crim v. Sorrow, 255 S.E.2d 19 (Ga. 1979); DuBose v. 

Gastonia Mut. Sav. & Loan Ass’n, 286 S.E.2d 617 (N.C. Ct. App. 

1982); Lord v. City of Tucson, 455 P.2d 1004 (Ariz. Ct. App. 1969))).
Cite as: 2017 UT 62

Opinion of the Court

7

(with a cloud on its title without a stay) after the property is lawfully 

sold to a third party during the appeal. We disagree.

¶ 24 It has long been held that “[a] person, other than the judgment 

creditor or his attorney, who purchases at a valid execution sale upon a 

judgment . . . which is subsequently reversed is entitled to retain the 

subject matter if, before reversal, he has obtained the legal title and has 

paid value therefor.” RESTATEMENT (FIRST) OF RESTITUTION § 74 cmt. i

(AM. LAW INST. 1937). The purchaser, in other words, is “protected as a 

bona fide purchaser” even if “he has knowledge that an appeal is 

pending or even that he has knowledge of the grounds for appeal, 

except where he knows that the judgment was obtained by fraud.” Id.6

¶ 25 We adopt this general rule.7 Where there is no stay, an

appellant loses all actionable rights to the property that has been 

lawfully conveyed to a third party. And any cloud his prior rights 

created on the property’s title is thereby extinguished.

¶ 26 We recognize one exception to this general rule. When a third 

party purchases the property subject to a recorded lis pendens, it 

“acquires only the grantor’s interest therein, as determined by the 

outcome of the litigation.” Timm v. Dewsnup, 921 P.2d 1381, 1392 (Utah 

1996) (citing Hidden Meadows Dev. Co. v. Mills, 590 P.2d 1244, 1248 (Utah 

1979)). This exception applies “[e]ven absent a stay” or supersedeas 

bond. Richards, 914 P.2d at 720 n.1 (citing Hidden Meadows Dev. Co., 590 

P.2d at 1247). 

 

6 We cite the First Restatement on this point because it is the clearest 

articulation of the rule of relevance to this case. But we view this 

statement of the rule to be consistent with the law as stated in many 

jurisdictions and in subsequent restatements of the law of restitution. 

See RESTATEMENT (THIRD) OF RESTITUTION AND UNJUST ENRICHMENT 

§ 18(f) cmt. f (AM. LAW INST. 2011); see also infra ¶ 25 n.7 (citing cases 

adopting a similar rule).

7 See Richards, 914 P.2d at 722 (determining that an appeal of an 

unstayed foreclosure sale order was moot once the relevant property 

was lawfully sold to a third party because “[n]o action which we could 

now take would affect the litigants’ rights to the property”); see also 

Spahi v. Hughes-Northwest, Inc., 27 P.3d 1233, 1236–37 (Wash. Ct. App. 

2001) (adopting the First Restatement’s standard).
2DP BLANDING v. PALMER

Opinion of the Court

8

¶ 27 Where the appellant takes no steps to “prevent the [appellee] 

from legally conveying the disputed land to a third party,” however, it 

loses all rights in the legally conveyed property. Id. Thus, when an 

appellant neither obtains a stay of execution nor timely records a lis 

pendens, he has no recourse against third parties who lawfully acquire 

the property. And Palmer’s failure to take either action in the 

underlying case accordingly bars him from asserting any interest in 

Parcel 2 now that it has been lawfully conveyed to a third-party owner.

¶ 28 This conclusion holds regardless of whether Black Oil or 2DP

had inquiry or even actual notice of the litigation and pending appeal. 

Palmer had multiple chances to either limit the conveyed property 

interests (by recording a lis pendens at the beginning of the litigation) or 

altogether prohibit any conveyance of the property (by obtaining a stay 

of execution). The purchasers’ general knowledge of the litigation does 

not save Palmer from his failure to take those preventive measures.

B

¶ 29 Palmer also challenges the district court’s decision on an 

alternative ground. He says that the original foreclosure sale did not 

affect his interest in the properties because First National failed to 

record the foreclosure order in accordance with the terms of the 

judgment registry statute, Utah Code section 78B-5-201. That statute 

prohibits a judgment creditor from establishing a lien or “affect[ing] the 

title to” the judgment debtor’s real property “unless the judgment is 

filed in the Registry of Judgments of the office of the clerk of the district 

court of the county in which the property is located.” UTAH CODE § 78B5-201(2). It also lists several pieces of information that must be included 

on the filed judgment, id. § 78B-5-201(4), and declares that no lien is 

created if any of the information is omitted on the filing, id. § 78B-5-

201(6).

¶ 30 First National failed to include some of the required 

information when it recorded the initial district court order. And on 

that basis Palmer asserts that the foreclosure sale and subsequent 

conveyances of the property could not have affected his lien.

¶ 31 But Palmer’s argument relies on a faulty view of the judgment 

registry statute. The statute applies only to judgment creditors who 

wish to create a lien on the judgment debtor’s property. See generally id.

§ 78B-5-201 (imposing duties on judgment creditor to obtain a lien on 

judgment debtor’s real property). First National’s foreclosure order 

does not create that kind of relationship. Palmer did not owe First 

National anything as a result of the order. So there was no debt as 
Cite as: 2017 UT 62

Opinion of the Court

9

envisioned by the statute.8 The order instead established the relative 

priority of First National’s trust deed against Palmer’s deed and 

authorized the bank to foreclose on the properties against a separate 

debtor. The judgment registry statute consequently did not govern the 

recording of First National’s foreclosure order. 

¶ 32 The recording was instead governed by Utah Code section 57-

3-102(1). That section provides that documents “shall, from the time of 

recording with the appropriate county recorder, impart notice to all 

persons of their contents.” Id. Thus, where an order grants a party a 

greater lien priority than another and authorizes the foreclosure on the

relevant property, the foreclosing party need only record the order to 

give it effect. No further requirements are necessary. Unlike a monetary 

judgment that does not explicitly grant interests in any property, the 

recorded order at issue in this case expressly gives notice of the 

adjudged rights and their impact on the property. So First National 

properly recorded the order under section 57-3-102.

C

¶ 33 Palmer also claims that the district court erred in upholding 

arguments advanced by 2DP but rejected by the court of appeals in 

Palmer’s litigation with First National. The court of appeals twice 

rejected First National’s assertion that the litigation was moot in light of 

the foreclosure sale. First, in Palmer’s rule 54(b) appeal of the initial 

district court order, the court of appeals declined to dismiss the appeal 

on mootness grounds because “[t]he parties are still before the court, 

and it appears that the rights of the parties can be adjusted as 

appropriate.” First Nat’l Bank of Layton v. Palmer, 2013 UT App 50, ¶ 7 

n.2, 362 P.3d 904. The court’s second consideration of the mootness 

question came when the court later summarily denied an unrelated 

petition for extraordinary relief. Here again First National asserted that 

the case was moot. A majority denied the petition for extraordinary 

relief without opinion. But Judge Orme wrote a special concurrence 

 

8 See id. § 78B-5-201(4)(b)(iii) (requiring the judgment to include “the 

amount of the judgment as filed in the Registry of Judgments”); see also

BLACK’S LAW DICTIONARY (10th ed. 2014) (defining “judgment debtor” 

as “[a] person against whom a money judgment has been entered but 

not yet satisfied” and “judgment creditor” as “[a] person having a legal 

right to enforce execution of a judgment for a specific sum of money”).
2DP BLANDING v. PALMER

Opinion of the Court

10

outlining his view that the earlier court of appeals opinion had 

reinstated Palmer’s lien in first position.

¶ 34 In Palmer’s view the court of appeals’ first decision should be 

interpreted in light of Judge Orme’s special concurrence, which 

reasoned that Palmer’s trust deed was reinstated in first position 

following the reversal and thus survived the foreclosure sale. Palmer 

asserts that 2DP, as a subsequent owner of the foreclosed property, was 

bound by the doctrine of collateral estoppel and could not relitigate the 

issue of whether the foreclosure sale extinguished Palmer’s interest in 

the property.

¶ 35 But this argument is premised on a misunderstanding of the 

doctrine of collateral estoppel. This doctrine does not prohibit a party 

from relitigating an issue unless that issue was fully litigated to a final 

judgment.9 And there is no definitive final judgment on whether 

Palmer’s interest in Parcel 2 survived the foreclosure sale. The court of 

appeals in the underlying case ruled only that Palmer’s appeal was not 

moot. It did not explain the rationale for its holding, other than to say 

that “it appears that the rights of the parties can be adjusted as 

appropriate.” First Nat’l Bank, 2013 UT App 50, ¶ 7 n.2. And a 

subsequent special concurrence from a single judge does nothing to 

inform that holding.

¶ 36 In the first appeal, Palmer asserted only that the case was not 

moot because he could still recover proceeds from the foreclosure sale. 

Judge Orme issued a special concurrence in a later appeal—following 

additional proceedings after the initial court of appeals decision—

articulating his view on how Palmer’s interest might have survived the 

foreclosure sale. But this was not the express basis for the original court 

of appeals holding. At a minimum, there are two possible grounds for

 

9 “We apply a four-part test to determine whether the doctrine of 

issue preclusion is applicable: First, the issue challenged must be 

identical in the previous action and in the case at hand. Second, the 

issue must have been decided in a final judgment on the merits in the 

previous action. Third, the issue must have been competently, fully, 

and fairly litigated in the previous action. Fourth, the party against 

whom collateral estoppel is invoked in the current action must have 

been either a party or privy to a party in the previous action.” Macris & 

Assocs., Inc. v. Neways, Inc., 2000 UT 93, ¶ 37, 16 P.3d 1214 (citation 

omitted).
Cite as: 2017 UT 62

Opinion of the Court

11

the court of appeals’ determination that Palmer’s appeal in the First 

National case was not moot. The court could have been recognizing 

Palmer’s right to assert a claim for proceeds on remand. Or it could 

have concluded that Palmer’s interest in the property survived the sale.

And this ambiguity precludes application of the doctrine of collateral 

estoppel, as the relevant issue has not been resolved by a final 

judgment.

10

III

¶ 37 We affirm the district court’s grant of summary judgment to 

2DP. 2DP is entitled to title of Parcel 2 free and clear of any interest 

Palmer may have previously had in the property.

 

10 Because we dismiss Palmer’s collateral estoppel arguments on this 

baseline issue, we do not determine whether 2DP is in privity with First 

National for purposes of this doctrine.