2018 UT App 172

THE UTAH COURT OF APPEALS

CLAUDE C. BLANCH,

Appellant,

v.

JAN FARRELL, MARILYN ROYCE, DONENE BRISCOE,

AND BARBARA STUART,

Appellees.

Opinion

No. 20160792-CA

Filed September 7, 2018

Second District Court, Ogden Department

The Honorable Mark R. DeCaria

No. 150907627

Jason M. Yancey, Richard W. Jones, Taylor R. Jones, 

Bryce M. Froerer, and Zane S. Froerer, Attorneys

for Appellant

Paul K. Bachman and Dana T. Farmer, Attorneys

for Appellees

JUDGE JILL M. POHLMAN authored this Opinion, in which 

JUDGES KATE A. TOOMEY and DAVID N. MORTENSEN concurred.

POHLMAN, Judge:

¶1 Claude C. Blanch, Jan Farrell, Marilyn Royce, Donene 

Briscoe, and Barbara Stuart are all equal members of a dissolved 

member-managed limited liability company named Five Blanch 

Property LLC (the Company). When four of the five members 

agreed to list certain assets for sale as part of the Company’s 

winding up, Blanch objected, filing a petition opposing the sale 

and seeking to partition one-fifth of the assets for himself. The 

district court dismissed Blanch’s petition with prejudice. Blanch 

appeals, and we affirm.
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20160792-CA 2 2018 UT App 172

BACKGROUND1

¶2 The family of the parties—Blanch, Farrell, Royce, Briscoe, 

and Stuart—historically owned certain assets, including real 

property in Weber County, Utah, and a number of shares in an 

irrigation company (collectively, the Assets). In 2005, the Assets 

were conveyed to the Company, a then newly formed, membermanaged limited liability company.

¶3 Each party is an equal member of the Company. Though 

the Company never executed an operating agreement, its articles 

of organization stated that the Company would exist for three 

years, during which time the members were to meet and 

determine how to manage the Assets. The members held 

meetings, but they never agreed on the management of the 

Assets.

¶4 In 2008, the Company expired with the Assets still titled 

in its name. Since its dissolution, however, the Company has not 

wound up its affairs or distributed the Assets. In October 2015, 

as part of its winding up, all of the Company’s members except 

Blanch voted to list the Assets for sale.

¶5 Shortly thereafter, Blanch filed suit against Farrell, Royce, 

Briscoe, and Stuart (collectively, Appellees). Blanch petitioned 

the court to stop the sale of the Assets and to carve out his 

twenty-percent interest so that he could keep that portion in his 

name. As an exhibit to his original petition, Blanch attached a 

 

1. Because this case is before us on appeal from the motion to 

dismiss Blanch’s petition for failure to state a claim, we, like the 

district court, “accept the factual allegations in the complaint as 

true and consider them and all reasonable inferences to be

drawn from them in a light most favorable to the plaintiff.” 

Biedermann v. Wasatch County, 2015 UT App 274, ¶ 2, 362 P.3d 

287 (quotation simplified). Accordingly, we state the facts in a 

light most favorable to Blanch. See id.
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document titled, “Written Consent of More Than 2/3 of the 

Members of [the Company]” (the Written Consent).

¶6 The Written Consent was signed in October 2015 by 

Appellees, who together held an eighty-percent interest in the 

Company. In its recitals, the Written Consent stated that 

Appellees desired “to wind up the affairs of the Company”; “to 

sell all of the [Assets] owned by the Company as part of the 

winding-up of the Company, and thereafter distribute the net 

proceeds of the sale to the members . . . according to their 

interests”; and “to designate Jan Farrell to negotiate and enter 

into any and all agreements necessary to sell all of the [Assets].” 

The Written Consent stated that Appellees adopted the 

resolutions to, among other things, authorize Farrell to negotiate 

agreements and take actions necessary to sell the Assets.

¶7 Blanch filed an amended petition in January 2016 in 

which he noted that Appellees “have attempted to list all of the 

[Assets] . . . for sale,” explaining that they “have proposed and 

are desirous of selling [the Assets] and distributing the cash sales 

proceeds.” Blanch alleged that under the Utah Revised Uniform 

Limited Liability Company Act, effective January 1, 2016 (the 

New Act), all members of the Company had to unanimously 

agree to sell the Assets and that because he did not consent, 

Appellees lacked authority to approve the sale. See generally

Utah Code Ann. §§ 48-3a-101 to -1405 (LexisNexis 2015).

¶8 Blanch asked the court to enjoin the sale of the Assets and 

to require that any sale be approved by the court or the 

unanimous agreement of the Company’s five members. He also 

asked the court to order the settling of the Company’s capital 

accounts and the distribution of the Assets in proportion to the 

members’ respective interests. Alternatively, Blanch asked the 

court to partition the Assets, separating his twenty-percent

share.

¶9 Appellees moved to dismiss Blanch’s petition, asserting 

that he had failed to state a claim upon which relief could be 

granted. In support, Appellees attached the Written Consent and 
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asserted that they had authority to sell the Assets and that the 

Written Consent, which resolved to sell the Assets, was valid. 

According to Appellees, when they signed the Written Consent 

in October 2015, the Utah Revised Limited Liability Company 

Act (the Old Act) applied. See generally id. §§ 48-2c-100 to -1902 

(2010). And rather than requiring the unanimous approval of 

members to sell the Company’s assets, the Old Act required only 

two-thirds of its members to act. Id. § 48-2c-803(3). Accordingly, 

Appellees contended that because they held eighty percent of 

the interest in the Company, the Written Consent was properly 

executed and was not voided by the New Act. 

¶10 In so arguing, Appellees noted that the Written Consent 

expressly stated that “the authority given [under the Written 

Consent] shall be effective until revoked by [Appellees] and shall 

continue notwithstanding the automatic application of [the New 

Act] on January 1, 2016.” Although Appellees “fully 

acknowledge[d] that [the New Act] now governs the wind-up of 

[the Company],” they contended that “the Written Consent 

remains effective as to the authorization of [the Company] to sell 

the Assets in the wind-up” and that Blanch had failed “to allege 

any facts to show that the Written Consent was not authorized at 

the time of its execution.”

¶11 In the alternative, Appellees asserted that, even if the 

Written Consent was no longer effective, the remedy Blanch 

sought—the distribution of the Assets in the Company’s 

winding up—was barred under the New Act, given that those 

distributions “must be paid in money.” See id. § 48-3a-711(4) 

(2015). Appellees further argued that the Company owned the 

real property at issue and that because Blanch was not a joint 

tenant or tenant in common, he could not bring an action to 

partition that real property.

¶12 The district court granted Appellees’ motion. The court 

first determined that because the Company had expired, it 

“ha[d] no power other than to wind up its affairs, pay its bills, 

and distribute its assets.” The court then determined that the Old 

Act controlled, that “no language within [the New Act] ha[d]
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been cited which [made] its provisions retroactive,” and that the 

Company’s members had not agreed to be bound by the New 

Act. The court explained that under the Old Act, “members 

holding at least two-thirds interest in the company are required 

to bind [the Company]” and that, in this case, “a written consent 

was signed by all of the members . . . other than [Blanch], 

evidencing four-fifths of the voting members, to list [the Assets] 

for sale and then to distribute the assets as the last step to 

winding up.” The district court then reasoned that “four-fifths is 

80%, sufficiently in excess of two-thirds of the voting members,” 

and that the members signed the Written Consent in October 

2015—before the application of the New Act to the Company. 

Further, the court determined that the Written Consent was “a 

permitted function” and the controlling member-managers had 

“the power to wind up [the Company] as they [saw] fit, 

including the sale of [the Assets], payment of all bills and 

obligations, and distribution of the proceeds to the members.”

¶13 Based on these determinations, the district court 

concluded that Blanch could not “legally prevail as it pertains to 

the objection to sale and to the partitioning of [the Assets].” 

Additionally, it concluded that Blanch “was not a joint tenant or 

a tenant in common owner of the real property” and that the 

Company’s ownership of the real property “excluded that 

possibility [of partition].” Accordingly, the court dismissed 

Blanch’s petition with prejudice. Blanch appeals.

ISSUE AND STANDARD OF REVIEW

¶14 Blanch contends that the district court erred in granting 

Appellees’ motion to dismiss his petition. “A Rule 12(b)(6) 

motion to dismiss admits the facts alleged in the complaint but 

challenges the plaintiff’s right to relief based on those facts.” 

Oakwood Village LLC v. Albertsons, Inc., 2004 UT 101, ¶ 8, 104 P.3d 

1226 (quotation simplified). “Under a rule 12(b)(6) dismissal, our 

inquiry is concerned solely with the sufficiency of the pleadings, 

and not the underlying merits of the case.” Id. (quotation 

simplified). We assume the truth of the factual allegations in the 
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complaint and draw “all reasonable inferences therefrom in the

light most favorable to the plaintiff.” Hudgens v. Prosper, Inc., 

2010 UT 68, ¶ 14, 243 P.3d 1275 (quotation simplified). “We 

review a decision granting a motion to dismiss for correctness, 

granting no deference to the decision of the district court.” 

Bylsma v. R.C. Willey, 2017 UT 85, ¶ 10, 416 P.3d 595 (quotation 

simplified). We likewise review for correctness the district 

court’s subsidiary legal determinations, including its 

interpretation and application of statutes. See DePatco, Inc. v. 

Teton View Golf Estates, LLC, 2014 UT App 266, ¶ 6, 339 P.3d 126 

(“The proper interpretation and application of a statute is a 

question of law, and we afford no deference to the [district] court 

in reviewing its interpretation of applicable statutes.” (quotation 

simplified)).

ANALYSIS

¶15 Blanch challenges the district court’s dismissal of his 

petition on a number of grounds. We begin by addressing his

argument regarding the propriety of the district court’s 

consideration of the Written Consent in resolving Appellees’ 

motion to dismiss. We then turn to Blanch’s arguments 

regarding the enforceability of the Written Consent. Finally, we 

address his contention that the district court erred in dismissing 

his petition without considering his request for judicial 

supervision of the Company’s winding up.2

I. The District Court’s Consideration of the Written Consent on 

Appellees’ Motion to Dismiss

¶16 Blanch first contends that in ruling on Appellees’ motion 

to dismiss, the district court erred either by failing to exclude 

 

2. Because Blanch does not raise any specific arguments 

connected to the district court’s dismissal of his claim for 

partition, we do not address that claim further.
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20160792-CA 7 2018 UT App 172

documents outside of his petition or by failing to convert the 

motion to one for summary judgment. See generally Utah R. Civ. 

P. 12(b) (explaining that if, on a motion to dismiss for failure to 

state a claim upon which relief can be granted, “matters outside

the pleading are presented to and not excluded by the court, the 

motion shall be treated as one for summary judgment and 

disposed of as provided in Rule 56”). He focuses this challenge 

on the district court’s consideration of the Written Consent itself, 

asserting that the court’s decision is unsustainable without 

reference to it. Appellees counter that the Written Consent was 

properly before the court because it was either referenced in or 

was central to Blanch’s petition.

¶17 This court generally will not consider an issue on appeal 

unless it has been preserved or the appellant asserts that a valid 

exception to the preservation rule applies. See State v. Johnson, 

2017 UT 76, ¶ 18, 416 P.3d 443. To preserve an issue, the 

appellant must present it to the district court “in such a way that 

the court has an opportunity to rule on it.” Id. (quotation 

simplified). This means that “the issue must be specifically 

raised, in a timely manner, and must be supported by evidence 

and relevant legal authority.” Donjuan v. McDermott, 2011 UT 72, 

¶ 20, 266 P.3d 839.

¶18 Here, Blanch attached the Written Consent as an exhibit 

to his original petition, and then he alleged in his amended 

petition that Appellees “have proposed and are desirous of 

selling [the Assets] and distributing the cash sales proceeds” and 

that they “have attempted to list all of the assets . . . for sale.” 

Appellees responded with a motion to dismiss and attached the 

Written Consent.

¶19 But Blanch did not object to Appellees’ reliance on the 

Written Consent and he never asserted that the district court 

could not consider it in ruling on the motion to dismiss or that 

the court should treat the motion as one for summary judgment 

under rule 56. As a result, Blanch did not raise the issue of 

whether the Written Consent was a matter outside the pleading 

requiring the motion to be converted, and he did not give the 
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20160792-CA 8 2018 UT App 172

district court the opportunity to rule on it. See Johnson, 2017 UT 

76, ¶ 18. He therefore did not preserve this issue for appeal.3

II. The Enforceability of the Written Consent

¶20 Blanch contends that the Written Consent is 

unenforceable, raising several arguments in support. We first 

identify which of his arguments have been preserved. We then 

address whether the authority granted to Farrell under the 

Written Consent—to sell the Assets for the purpose of winding 

up the Company—survives the application of the New Act.

A. Whether the Written Consent Was Void Ab Initio

¶21 On appeal, Blanch makes three arguments seeking to 

undermine the validity of the Written Consent. First, Blanch 

suggests that the Written Consent was void ab initio when 

signed “because [it] is really a defective attempt to amend the 

Articles of Organization and change the management structure 

from member-managed to manager-managed,” and it therefore 

“would have been deemed ineffective since it would require 

unanimous consent of the members” to make such changes. 

Second, Blanch asserts that the Written Consent was adopted 

“without any notice” to him, as required by the Old Act, and

that this lack of notice “invalidates the Written Consent.” Third, 

Blanch complains that, because two of the signatures on the 

Written Consent were those of “assignees/transferees of the 

members who could not [validly provide] consent,” the “Written 

Consent is not valid and never was.” But he did not make any of 

these arguments to the district court and thus he has not 

preserved them for appeal. Because he did not preserve these 

arguments or assert any exception to the preservation rule, we 

 

3. Given Blanch’s failure to properly challenge the district court’s 

consideration of the Written Consent in ruling on the motion to 

dismiss, we likewise consider the Written Consent in reviewing 

the district court’s decision.
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20160792-CA 9 2018 UT App 172

do not consider them further. See State v. Johnson, 2017 UT 76, 

¶ 18, 416 P.3d 443.

B. The Continuing Force of the Written Consent

¶22 Blanch next challenges the district court’s conclusion that 

the Written Consent has continuing force, thus giving Farrell the 

authority to carry out the sale of the Assets even after the New 

Act became effective. According to Blanch, the district court 

erred in concluding that the Written Consent has binding “effect 

after January 1, 2016 when the New Act required the approval of 

all members” for such an action. He asserts that “at best, the 

Written Consent was [in] effect until it was superseded by the 

terms and provisions of the [New] Act.” In other words, “if the 

Written Consent was ever valid . . . , it was only valid until 

January 1, 2016—after which time, the New Act and its 

provisions applied to all [limited liability companies].” By ruling 

that the Written Consent is still operative, Blanch asserts, “the 

Court is allowing the Company to continue . . . operat[ing] under 

the [Old] Act.”

¶23 To resolve this issue, we must answer two questions. The 

first is whether the Written Consent—representing the 

Company’s approval of the sale of the Assets as part of its 

winding up—required the unanimous consent of its members or 

the consent of only two-thirds of its members. The answer to this 

question turns on whether the Written Consent had to comply 

with the voting requirements of the Old Act or the New Act. The 

second question is whether the New Act, which became effective 

as to all limited liability companies three months after the 

Written Consent was passed, deprived the Written Consent of its 

force as of January 1, 2016.

¶24 For a member-managed limited liability company like the 

Company, the Old Act provided that “authorizing a member or 

any other person to do any act on behalf of the company that is 

not in the ordinary course of the company’s business” required 

“the affirmative vote, approval, or consent of members holding 

2/3 of the profits interests in the company.” Utah Code Ann. 
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20160792-CA 10 2018 UT App 172

§ 48-2c-803(3)(a)(i) (LexisNexis 2010). In contrast, the New Act 

provides that “[a]n act outside the ordinary course of the 

activities and affairs of the limited liability company may be 

undertaken only with the affirmative vote or consent of all 

members.” Id. § 48-3a-407(2)(d) (2015) (emphasis added). The 

parties agree that authorizing the sale of assets as part of the 

winding-up process falls outside the ordinary course of business.

¶25 Originally passed in 2013, the New Act was phased in 

gradually. See generally id. §§ 48-3a-101 to -1405. Section 

48-3a-1405 sets forth the New Act’s scheduled applicability. It 

provides that before January 1, 2016, the New Act “governs only: 

(a) a limited liability company formed on or after January 1, 

2014; and (b) . . . a limited liability company formed before 

January 1, 2014, which elects, in the manner provided in its 

operating agreement or by law for amending the operating 

agreement, to be subject to [the New Act].” Id. § 48-3a-1405(1); 

see also id. § 48-2c-100 (Supp. 2013) (“Until [the Old Act] is 

repealed January 1, 2016, [it] applies only to a limited liability 

company formed on or before December 31, 2013, that has not 

elected to be governed by [the New Act], as provided in Section 

48-3a-1405.”). On or after January 1, 2016, however, the New Act 

“governs all limited liability companies.” Id. § 48-3a-1405(2) 

(2015) (emphasis added).

¶26 Neither one of the circumstances under subsection

48-3a-1405(1)(a) or (b) is applicable here. The Company was 

formed before January 1, 2014, and, as Blanch explains, by

October 2015, “the Company had not chosen to be governed by 

[the New] Act and the effective date imposing [the New] Act

had yet to occur.” Thus, at the time Appellees approved the 

Written Consent in October 2015, the Old Act still governed,4

 

4. The Old Act allowed limited liability companies, through the 

articles of organization or an operating agreement, to modify the 

applicable default rule requiring “the affirmative vote, approval, 

or consent of members holding 2/3 of the profits interests in the 

(continued...)
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and because Appellees hold four-fifths of “the profits interests in 

the company,” they had more than the necessary two-thirds vote 

to approve the Written Consent. See id. § 48-2c-803(3) (2010). 

Accordingly, the Written Consent complied with the voting 

requirements of the Old Act.

¶27 The Written Consent also appears to comply with the Old 

Act’s provisions regarding the designation of an agent for the 

winding-up process. Utah Code section 48-2c-1303 directed that 

for a member-managed company, “the following persons . . . 

shall have the right to wind up the business of a dissolved 

company: . . . first, the existing members or, second, an agent 

designated by the existing members.” Id. § 48-2c-1303(1)(b). That 

section further provided that the

person who winds up the business and affairs of a 

dissolved company . . . shall . . . become a trustee 

for the members and creditors of the company and, 

in that capacity, may sell or distribute any 

company property discovered after dissolution, 

convey real estate, and take any other necessary 

action on behalf of and in the name of the 

company.

 

(...continued)

company.” Utah Code Ann. § 48-2c-803(3)(a)(i) (LexisNexis 

2010); see also id. § 48-2c-803 (setting forth the default rules for 

management by members “unless otherwise provided in this 

chapter, in the articles of organization, or an operating 

agreement”); OLP, LLC v. Burningham, 2008 UT App 173, ¶ 18, 

185 P.3d 1138 (noting that “the provisions of the LLC Act serve 

as default positions that govern an LLC if its members do not 

include contrary language in their operating agreement or in the 

LLC’s articles of organization”), aff’d, 2009 UT 75, 225 P.3d 177. 

The Company’s articles of organization made no such 

modification, and the Company did not have an operating 

agreement. Consequently, the Old Act’s default rule applies.
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20160792-CA 12 2018 UT App 172

Id. § 48-2c-1303(2)(a). This statute thus authorized the members 

of this dissolved company to designate Farrell as an agent to 

wind up the Company and also authorized Farrell to then sell 

the Assets.

¶28 Blanch contends that when the New Act became effective 

as to all limited liability companies on January 1, 2016, the 

Written Consent became void, thereby depriving Farrell of any 

authority to carry out the sale of the Assets, and that the sale of 

the Assets would require the unanimous approval of the 

Company’s members under the New Act. We read section 

48-3a-1405 to mean that, after January 1, 2016, the New Act, 

including its unanimity requirement under section 48-3a-407, 

applies to all limited liability companies and all actions they 

take. But we see nothing in section 48-3a-1405’s plain language 

or anything else in the New Act that supports the proposition on 

which Blanch’s argument depends, namely, that the New Act’s 

broad implementation on January 1, 2016, had the effect of 

invalidating previous actions taken by a limited liability 

company. See generally Bagley v. Bagley, 2016 UT 48, ¶ 10, 387 

P.3d 1000 (stating that “the primary objective of statutory 

interpretation is to ascertain the intent of the legislature” and 

that “since the best evidence of the legislature’s intent is the 

plain language of the statute itself, we look first to the plain 

language of the statute” (quotations simplified)). Moreover, 

Blanch has not identified any pertinent authority in support of 

his reading of the New Act.

5 See Bank of Am. v. Adamson, 2017 UT 

 

5. Even if the New Act somehow invalidated the Written 

Consent and the authority granted thereunder to proceed with 

the sale of the Assets, Blanch has not demonstrated that he 

would be entitled to the relief he seeks, that is, the distribution of 

the Assets. To the contrary, the default rules under the New Act 

provide that, in winding up a company, any surplus assets must 

be distributed “in equal shares among members and dissociated 

members” and all such distributions “must be paid in money.” 

Utah Code Ann. § 48-3a-711(2)–(4) (LexisNexis 2015) (emphasis 

(continued...)
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2, ¶ 13, 391 P.3d 196 (explaining that an appellant will not carry 

his burden of persuasion on appeal if he fails to “cite the legal 

authority on which [his] argument is based and then provide 

reasoned analysis of how that authority should apply in [this] 

particular case”). We therefore conclude that the district court 

did not err in deciding that Blanch did not state a claim in light 

of the Written Consent.

III. Blanch’s Request for Judicial Supervision

¶29 Finally, Blanch contends that the district court erred by 

dismissing his alleged claim for judicial supervision of the 

Company’s winding up. In particular, he asserts that, to state 

such a claim under Utah Code section 48-3a-703 of the New Act, 

“all [he] was required to [do was] plead good cause” and that 

the petition’s factual allegations constituted “prima facie good 

cause to have the Court supervise the winding up process.”

¶30 Section 48-3a-703 of the New Act provides that a “district 

court may order judicial supervision of the winding up of a 

dissolved limited liability company, including the appointment 

of a person to wind up the limited liability company’s activities 

and affairs: (a) on application of a member, if the applicant 

establishes good cause.” Utah Code Ann. § 48-3a-703(5)(a) 

(LexisNexis 2015) (emphasis added).

¶31 Blanch’s amended petition labeled a cause of action 

“Dissolution of [the Company],” and it requested that the 

district court require “the winding up of [the Company to] 

follow the applicable statute found in [section] 48-3a-703; [and] 

that the assets be distributed to the members of the expired 

[Company] in proportion to their respective interests.” Although

 

(...continued)

added). Given this provision, we agree with Appellees that 

Blanch has not explained how the court could give him “land 

and water in lieu of money.”
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Blanch sought judicial relief, he did not specifically ask the court 

to oversee the winding-up process. But even if Blanch’s claim 

could be construed as an application for judicial supervision of 

that process, his request was tied to his attendant request for 

distribution of the Assets, which was based on his contentions

that they could not be sold without his approval and that the 

Written Consent has no force or effect under the New Act. 

Blanch did not alert the court to the fact that he sought judicial 

supervision of the process generally, as he now seems to claim 

on appeal. See generally State v. Johnson, 2017 UT 76, ¶ 18, 416 

P.3d 443 (explaining that to preserve an issue, the appellant must 

present it to the district court “in such a way that the court has

an opportunity to rule on it” (quotation simplified)). Thus, 

having rejected Blanch’s claims for distribution and partition of 

the Assets, we cannot fault the district court for dismissing his 

petition without addressing whether he had demonstrated good 

cause to warrant ongoing judicial supervision of the winding-up 

process.6

 

6. In his reply brief, Blanch complains that the district court 

erred in dismissing his petition with prejudice. We do not 

consider issues that are raised for the first time in a reply brief. 

See Allen v. Friel, 2008 UT 56, ¶ 8, 194 P.3d 903. Blanch noted in 

his opening brief that “by dismissing the claims with prejudice, 

the [District] Court has permanently barred [him] from 

requesting the Court judicially administer the winding up of the 

company.” But he does not assert until his reply brief that the 

district court committed error in this regard. As a result, we do 

not consider this issue further, except to note that at oral 

argument before this court, Appellees’ counsel stated, “Even if 

[this court affirms] on the Written Consent, if there’s some basis 

for [Blanch] to come in and still ask for judicial dissolution with 

the Written Consent in place, . . . theoretically, . . . he should 

have the opportunity to be able to do that. . . . His ability to ask 

for supervision, as long as he can state good cause and the court 

finds good cause, is there.”
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20160792-CA 15 2018 UT App 172

CONCLUSION

¶32 We conclude that Blanch has waived all but one of his 

arguments challenging the district court’s dismissal of his 

petition by failing to preserve them. On his only properly 

presented issue, we conclude that Blanch has not carried his 

burden of demonstrating that the district court erred. 

Accordingly, we affirm.