2013 UT App 32

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### T HE 

### U TAH 

### C OURT OF 

### A PPEALS

D AVID L EE L AMOREAUX

,

Plaintiff and Appellant,

v.

B LACK D IAMOND H OLDINGS

, LLC,

Defendant and Appellee.

Opinion

No. 20110786

‐ CA

Filed February 7, 2013

Fifth District, St. George Department

The Honorable Eric A. Ludlow

No. 080500885

Michael W. Park, Attorney for Appellant

David L. Elmont and R. Daren Barney,

Attorneys for Appellee

J UDGE W ILLIAM A. T HORNE J R

. authored this Opinion,

in which J UDGES J AMES Z. D AVIS

and M ICHELE M. C HRISTIANSEN concurred.

THORNE, Judge:

¶1 David Lee Lamoreaux appeals from the district court’s order

dismissing this action, which Lamoreaux originally initiated

against Black Diamond Holdings, LLC (Black Diamond) in 2008.

After a bench trial but before any ruling on the merits, Black

Diamond purchased Lamoreaux’s interest in the action at a judicial

sale and successfully moved to be substituted as the party plaintiff.

Black Diamond then filed a motion to dismiss the action in itsLamoreaux v. Black Diamond

1 The listing agreement contained an attorney fees provi

‐

sion. Lamoreaux retained his counsel in the Black Diamond

action on a contingency fee basis, with counsel to be paid a

percentage of any amount ultimately recovered.

20110786

‐ CA 2013 UT App 32 2 capacity as the plaintiff, which the district court granted. We

affirm.

BACKGROUND

¶2 In April 2006, Black Diamond entered into a real estate sales

listing agreement with Prudential Cedar City Realty (Prudential),

whereby Prudential agreed to market and sell a subdivision owned

by Black Diamond. The listing agreement named Lamoreaux as the

seller’s agent, and Lamoreaux signed the agreement as Prudential’s

“Principal/Branch Broker.” The agreement provided for a sales

commission of 8% of the selling price, and Prudential ultimately

brokered a sale for between eight and ten million dollars. When

Black Diamond failed to pay Lamoreaux the full amount that he

believed he was entitled to under the agreement, Lamoreaux

brought this action against Black Diamond for breach of contract in

March 2008 (the Black Diamond action). Lamoreaux’s complaint

sought a determination of the amount of the 8% sales commission

and a judgment for that amount, less $150,000 already paid, plus

attorney fees and prejudgment interest. 1 The district court con

‐

ducted a two

‐ day bench trial on Lamoreaux’s claim on February 16

and 17, 2011. At the conclusion of trial, the district court directed

both parties to submit proposed findings of fact and orders by

April 1, 2011, at which time it would take the matter under

advisement and issue a written decision.

¶3 In a separate action (the Fisher action), Darwin and Cheryl

Fisher obtained a judgment against Lamoreaux in February 2010 in

the amount of $16,484.96. On January 19, 2011, pursuant to their

judgment, the Fishers obtained a writ of execution againstLamoreaux v. Black Diamond

2 The Fishers’ writ, as well as the subsequent notice of sale,

contained the following property description:

All claims, counterclaims, causes of action, choses

in action, rights to payment, and rights to

compensation and/or damages of every kind and

nature, which David Lamoreaux may have against

Black Diamond Holdings LLC, including, but not

limited to, all such claims and causes of action

asserted in the complaint dated March 31, 2008,

and filed in the Fifth Judicial District Court with

the civil case number of 080500885.

20110786

‐ CA 2013 UT App 32 3 Lamoreaux’s interest in the Black Diamond action. 2 The Fishers

publicly noticed a judicial sale and personally served Lamoreaux

with notice on February 16, 2011. Despite this notice, Lamoreaux

did not file a reply or an objection in either the Fisher action or the

Black Diamond action. Lamoreaux and his counsel attended the

March 21, 2011 sale and attempted to stop the proceedings by

declaring that Lamoreaux had transferred his interest in the Black

Diamond action. Nevertheless, the sale took place, and Black

Diamond submitted the highest bid in the amount of $17,383.78.

That same day, Black Diamond filed a motion to substitute in as

party plaintiff in the Black Diamond action.

¶4 Lamoreaux opposed Black Diamond’s motion to substitute,

alleging for the first time in any court that he had transferred his

interest in the Black Diamond action to his son prior to being

served with notice of the Fishers’ writ. Lamoreaux also argued that

Utah no longer allowed execution against choses in action

following the 2004 repeal of rule 69 of the Utah Rules of Civil

Procedure. The district court rejected Lamoreaux’s arguments and

granted the substitution on August 11, 2011, concluding that the

execution and sale of choses in action is still permitted by Utah law

and that Lamoreaux could not collaterally attack the results of the

Fisher action in the Black Diamond action. Having been substituted

as the plaintiff, Black Diamond then sought dismissal of the BlackLamoreaux v. Black Diamond

20110786

‐ CA 2013 UT App 32 4 Diamond action, which the district court granted over Lamoreaux’s

objection on September 23. Lamoreaux appeals.

ISSUES AND STANDARDS OF REVIEW

¶5 Lamoreaux first challenges Black Diamond’s purchase of his

claim against Black Diamond, arguing that Utah law no longer

allows the execution and sale of choses in action and that he should

have been granted an evidentiary hearing on his allegation that he

had transferred his interest in the Black Diamond action prior to

the execution and sale. “The district court’s interpretations of Utah

statutes and rules of procedure are questions of law reviewed for

correctness.” In re Irrevocable Jack W. Kunkler Trust A

, 2011 UT 7,

¶ 13, 246 P.3d 1184.

¶6 Next, Lamoreaux argues that the district court erred when

it allowed Black Diamond to substitute in as the plaintiff in the

Black Diamond action. We review the district court’s substitution

ruling only for an abuse of discretion. See Utah R. Civ. P. 25(c) (“In

case of any transfer of interest, the action may be continued by or

against the original party, unless the court upon motion directs the

person to whom the interest is transferred to be substituted in the

action

. . . .”); cf. Lundahl v. Quinn

, 2003 UT 11, ¶ 10, 67 P.3d 1000

(per curiam) (“While rule 25(c) speaks in permissive rather than

mandatory terms, it is clear courts cannot be compelled to

recognize a substitution of parties at the whim of the movant.”).

¶7 Finally, Lamoreaux argues that the district court erred by

failing to render a decision on the merits and instead dismissing

the action upon Black Diamond’s motion. We review the district

court’s case management decisions and rulings on voluntary

dismissals under an abuse of discretion standard. See Murray First

Thrift & Loan Co. v. Benson

, 563 P.2d 185, 186 (Utah 1977) (stating

that the district court has “reasonable discretion in the matter of

[voluntary] dismissals”); Posner v. Equity Title Ins. Agency, Inc.

, 2009Lamoreaux v. Black Diamond

20110786

‐ CA 2013 UT App 32 5 UT App 347, ¶ 23, 222 P.3d 775 (“[T]rial courts have broad

discretion in managing the cases assigned to their courts.”).

ANALYSIS

¶8 Lamoreaux’s multiple issues on appeal fall into three

distinct categories: those challenging the execution and sale of his

claim against Black Diamond, those challenging the district court’s

substitution order, and those challenging the district court’s order

of dismissal. We address Lamoreaux’s arguments within this

chronological framework.

I. Execution and Sale

¶9 On appeal, Lamoreaux raises two arguments challenging the

validity of Black Diamond’s purchase of his interest in the Black

Diamond action. First, Lamoreaux argues that rule 69 of the Utah

Rules of Civil Procedure was repealed in 2004 and that the

replacement provisions do not allow the execution and sale of

choses in action. Second, he argues that the district court erred in

failing to hold an evidentiary hearing on his claim that he had

transferred his cause of action against Black Diamond prior to the

execution and sale.

¶10 Lamoreaux first argues that, in light of the repeal of rule 69,

the execution and sale of a cause of action is no longer permitted

and that any such execution and sale is void under the Utah Rules

of Civil Procedure. The Utah Supreme Court has ruled, as recently

as 2002, that choses in action are subject to execution and sale. In

Applied Medical Technologies, Inc. v. Eames

, 2002 UT 18, 44 P.3d 699,

the supreme court stated, “Given that choses in action are

amenable to execution under rule 69(f), it follows that a defendant

can purchase claims, i.e., choses in action, pending against itself

and then move to dismiss those claims.” Id. ¶ 13; see also Snow,

Nuffer, Engstrom & Drake v. Tanasse

, 1999 UT 49, ¶ 9, 980 P.2d 208

(“[W]e hold that a legal malpractice claim, like any other chose inLamoreaux v. Black Diamond

20110786

‐ CA 2013 UT App 32 6 action

, may ordinarily be acquired by a creditor through attachment

and execution.” (emphasis added)).

¶11 However, as Lamoreaux correctly points out, Applied Medical

Technologies was decided under the now

‐ repealed rule 69.

Lamoreaux argues that Applied Medical Technologies is no longer

good law in light of the 2004 repeal of rule 69. We disagree, as we

conclude that choses in action remain “amenable to execution”

under the current Rules of Civil Procedure. See Applied Med. Techs.

,

2002 UT 18, ¶ 13. We reach this conclusion by comparing the

relevant language of rule 69 with the corresponding provisions of

the current rules.

¶12 Rule 69 governed the procedures relating to writs of

execution and provided that such writs were “available to a

judgment creditor to satisfy a judgment or other order requiring

the delivery of property or the payment of money by a judgment

debtor.” Utah R. Civ. P. 69(a) (2003). The rule contained an internal

definition of property subject to execution: “A writ of execution

may be used to levy upon all of the judgment debtor’s personal

property and real property which is not exempt from execution

under state or federal law.” Id. R. 69(b). Rule 69(f) expressly

referred to choses in action in its provisions for service of a writ,

stating that

[u]nless the execution otherwise directs, the officer

must execute the writ against the non

‐ exempt

property of the judgment debtor by levying on a

sufficient amount of property, if there is sufficient

property; collecting or selling the choses in action and

selling the other property in the manner set forth

herein.

Id. R. 69(f) (emphasis added).

¶13 In 2004, rule 69 was repealed and replaced by multiple new

rules, including rules 64 and 64E. See id. R. 64 (2012) (“Writs inLamoreaux v. Black Diamond

20110786

‐ CA 2013 UT App 32 7 general.”); id. R. 64E (“Writ of execution.”). Rule 64E states, “A writ

of execution is available to seize property in the possession or

under the control of the defendant following entry of a final

judgment or order requiring the delivery of property or the

payment of money.” Id. R. 64E(a). “Property,” for purposes of rule

64E, “means the defendant’s property of any type not exempt from

seizure. Property includes but is not limited to real and personal

property, tangible and intangible property, the right to property

whether due or to become due, and an obligation of a third person

to perform for the defendant.” Id. R. 64(a)(9); see also id. R. 64(a)

(providing definitions for terms “[a]s used in Rules 64, 64A, 64B,

64C, 64D, 64E, 69A, 69B, and 69C”). The current rules contain no

single provision directly comparable to the former rule 69(f) and

make no express reference to choses in action, in any context.

¶14 Lamoreaux argues that the amendment of the rules to omit

the reference to choses in action indicates an intent to prohibit their

execution and sale. Lamoreaux is correct that the removal of a term

from a definition is often intended to remove the excluded term

from the definition. See T

‐ Mobile USA, Inc. v. Utah State Tax

Comm’n

, 2011 UT 28, ¶ 27, 254 P.3d 752 (“As part of our plain

language analysis, we place significance on the removal of a term

from a piece of legislation.”); Sindt v. Retirement Bd.

, 2007 UT 16,

¶ 13, 157 P.3d 797 (noting that the legislature’s removal of the term

“constable” was indicative of its intent to remove “constable” from

the definition of public officer). However, the plain language of

both rule 69 and the current rules demonstrates that such a result

is not appropriate here.

¶15 Even under rule 69, the definition of executable property

never expressly included choses in action. Rather, rule 69 allowed

execution against “all of the judgment debtor’s personal property

and real property which is not exempt from execution under state

or federal law.” Utah R. Civ. P. 69(b) (2003). The supreme court has

repeatedly found that definition broad enough to include choses in

action. See Applied Med. Techs., Inc. v. Eames

, 2002 UT 18, ¶ 13, 44

P.3d 699; Snow, Nuffer, Engstrom & Drake v. Tanasse

, 1999 UT 49, ¶ 9,Lamoreaux v. Black Diamond

20110786

‐ CA 2013 UT App 32 8 980 P.2d 208. Rule 69’s only express reference to choses in action

appeared in rule 69(f), governing the service of writs of execution.

¶16 Under the current rules, the definition of property subject to

execution is even broader, encompassing “the defendant’s property

of any type not exempt from seizure” and including “real and

personal property, tangible and intangible property, the right to

property whether due or to become due, and an obligation of a

third person to perform for the defendant.” Utah R. Civ. P. 64(a)(9)

(2012). Choses in action have been identified as a type of intangible

property, which is included within the current definition. See

Bagford v. Ephraim City

, 904 P.2d 1095, 1098 (Utah 1995)

(“[I]ntangible property, such as choses in action, patent rights,

franchises, charters or any other form of contract, are within the

scope of [eminent domain]

. . . as fully as land or other tangible

property.” (second alteration in original) (citation and internal

quotation marks omitted)). In light of the current broad definition

of property subject to execution, we conclude that choses in action

remain “amenable to execution” under the Utah Rules of Civil

Procedure. See Applied Med. Techs.

, 2002 UT 18, ¶ 13. Accordingly,

we reject Lamoreaux’s argument that the repeal of rule 69

precluded Black Diamond’s purchase of his interest in the Black

Diamond action at execution sale.

¶17 We next turn to Lamoreaux’s second argument, that he was

improperly denied an evidentiary hearing on his claim that he had

transferred his cause of action against Black Diamond to his son

prior to the execution sale. We agree with the district court that any

dispute about the ownership of Lamoreaux’s interest in the Black

Diamond action was required to be litigated by Lamoreaux or his

son by replying to the writ in the Fisher action.

¶18 Rule 64E provides the procedure for a defendant to

challenge a writ of execution: “The defendant may reply to the writ

and request a hearing. The reply shall be filed and served within 10

days after service of the writ and accompanying papers upon the

defendant.” Lamoreaux failed to challenge the writ by replying toLamoreaux v. Black Diamond

3 Lamoreaux’s son has not intervened in this action or, to

our knowledge, made any other attempt to secure his alleged

interest.

20110786

‐ CA 2013 UT App 32 9 it in the Fisher action. Further, to the extent that Lamoreaux’s son’s

interests are even relevant to this matter, 3 third parties are also

required to assert their interests by replying to a writ. Rule 64(e)(1)

provides that

[a]ny person claiming an interest in the property has

the same rights and obligations as the defendant with

respect to the writ and with respect to providing and

objecting to security.

. . . Any claimant not named by

the plaintiff and not served with the writ and

accompanying papers may exercise those rights and

obligations at any time before the property is sold or

delivered to the plaintiff.

Id. R. 64(e)(1). Thus, while Lamoreaux’s son may not have been

bound by the ten

‐ day limitation of rule 64E(d)(1), he was still

required to reply to the writ before Lamoreaux’s claim was sold,

and he failed to do so. We agree with the district court’s ultimate

conclusion that there is “no support for the proposition that merely

having [Lamoreaux] and his counsel appear at the public auction

and orally assert that [Lamoreaux] no longer owned the claims is

sufficient to satisfy the requirements of Rules 64 and 64E.”

¶19 We conclude that the Utah Rules of Civil Procedure

continue to allow the execution and sale of causes of action even

after the repeal of rule 69. We also agree with the district court that

Lamoreaux’s attack on the circumstances surrounding the

execution and sale of his claim against Black Diamond was

required to be raised and litigated in the Fisher action. For these

reasons, we affirm the district court’s conclusion that the execution

and sale of Lamoreaux’s cause of action was valid.Lamoreaux v. Black Diamond

4 Lamoreaux also argues that substitution should not have

occurred prior to the entry of a ruling on the merits of the Black

Diamond action. We address the district court’s failure to issue a

ruling on the merits in our analysis of the district court’s

dismissal order.

20110786

‐ CA 2013 UT App 32 10 II. Substitution of Black Diamond as Party Plaintiff

¶20 Lamoreaux next argues that the district court erred when it

allowed Black Diamond to substitute in as the party plaintiff.

Lamoreaux acknowledges that substitution rulings are

discretionary with the district court but argues that the district

court abused its discretion in this case. 4 We address this argument

in light of our conclusion that Black Diamond had validly

purchased Lamoreaux’s interest in the Black Diamond action at the

time of the substitution ruling.

¶21 Rule 25 of the Utah Rules of Civil Procedure states, “In case

of any transfer of interest, the action may be continued by or

against the original party, unless the court upon motion directs the

person to whom the interest is transferred to be substituted in the

action or joined with the original party.” Utah R. Civ. P. 25(c).

Lamoreaux argues that the plain language of the rule contemplates

that actions may be continued by the original party despite a

transfer of interest. However, the rule also clearly allows a court to

substitute the transferee into the action.

¶22 We see no abuse of the district court’s discretion here. Black

Diamond had lawfully purchased Lamoreaux’s cause of action, and

it had filed a motion as the new owner asking to be substituted into

the Black Diamond action in Lamoreaux’s place. As the Utah

Supreme Court has explained,

[a]fter claims have been sold, a new party steps into

the shoes of the former plaintiff, and the claims

remain cognizable, but the sale cuts off the formerLamoreaux v. Black Diamond

5 In light of the district court’s substitution order, we

recognize the possibility that Lamoreaux lacks standing to

challenge the district court’s dismissal order because he was no

longer a party when the dismissal order was entered. However,

Black Diamond does not argue the standing issue, and we

proceed to address Lamoreaux’s arguments on their merits.

20110786

‐ CA 2013 UT App 32 11 plaintiff’s right to pursue those claims. Once

acquired by another, the new litigant has the right to

determine the course and scope of the litigation of

the claims purchased, including the right to move to

dismiss the pending claims.

Applied Med. Techs., Inc. v. Eames

, 2002 UT 18, ¶ 17, 44 P.3d 699

(citations omitted). The district court’s substitution order merely

recognized Black Diamond’s newly

‐ acquired status as the owner

of Lamoreaux’s cause of action and did so within the bounds of the

authority granted by rule 25. Seeing no abuse of discretion by the

district court, we affirm its substitution of Black Diamond for

Lamoreaux as plaintiff in this case.

III. Dismissal

¶23 Finally, we turn to an examination of the district court’s

order of dismissal. 5 Lamoreaux argues that the district court should

not have dismissed the case without ruling on the merits of

his—now Black Diamond’s—claims. Lamoreaux argues that the

district court failed to make a prompt decision on the merits after

taking the case under advisement on February 17, 2011, and that

the failure to enter a ruling on the merits defeated Lamoreaux’s

counsel’s contractual right to a contingency fee. We affirm the

district court’s dismissal order.

¶24 Lamoreaux first argues that the district court erred in failing

to issue a ruling on the merits of the Black Diamond action within

a reasonable time after taking the matter under advisement.Lamoreaux v. Black Diamond

20110786

‐ CA 2013 UT App 32 12 Lamoreaux’s argument misreads the district court’s orders at the

February 17 conclusion of trial. The district court did not take the

matter under advisement on that day, but rather ordered the

parties to submit proposed findings and orders no later than April

1, at which time it would take the matter under advisement. Black

Diamond purchased Lamoreaux’s cause of action and filed its

motion for substitution on March 21, prior to the deadline for

proposed findings and before the district court had taken the

matter under advisement. Once the district court became aware

that Black Diamond had purchased the cause of action and was

seeking substitution—and, presumably, the ultimate dismissal of

the action— the court reasonably refrained from expending further

judicial resources on crafting a ruling. We see no abuse of the

district court’s discretion in relation to the timing of the August 11

substitution order and the September 23 dismissal order vis

‐ a

‐ vis

its failure to issue a ruling on the merits. See generally Posner v.

Equity Title Ins. Agency, Inc.

, 2009 UT App 347, ¶ 23, 222 P.3d 775

(“[T]rial courts have broad discretion in managing the cases

assigned to their courts.”).

¶25 Lamoreaux also argues that the district court’s failure to

issue a ruling on the merits effectively precluded his counsel from

receiving compensation under counsel’s contingency fee agreement

with Lamoreaux. Lamoreaux directs us to a Louisiana case for the

proposition that a client may discharge his contingency fee counsel

at any time but must pay counsel for services actually rendered. See

Saucier v. Hayes Dairy Prods., Inc.

, 373 So. 2d 102 (La. 1978).

Lamoreaux further argues that Utah law provides for contingency

fee attorneys to be paid on a quantum meruit basis when the

contingency fee agreement becomes unenforceable. See Parents

Against Drunk Drivers v. Graystone Pines Homeowners’ Assoc.

, 789

P.2d 52, 56–58 (Utah Ct. App. 1990).

¶26 To the extent that Lamoreaux argues that his counsel has

some right to be paid for services rendered, counsel’s

client—Lamoreaux—was no longer a party to the action at the time

the district court was considering dismissal, and counsel made noLamoreaux v. Black Diamond

6 Black Diamond requests that we order Lamoreaux’s

counsel to personally pay a portion of Black Diamond’s attorney

fees incurred on appeal. We decline to award any fees in this

matter.

20110786

‐ CA 2013 UT App 32 13 attempt to intervene in the action. Arguments pertaining to

counsel’s right to payment were therefore not properly before the

district court at the time of dismissal. Accordingly, we will not

disturb the district court’s dismissal order on the basis of

Lamoreaux’s argument that the court’s failure to issue a ruling on

the merits of the Black Diamond action interfered with his

counsel’s right to payment.

CONCLUSION

¶27 We reject Lamoreaux’s challenges to the execution and sale

of his cause of action against Black Diamond, the substitution of

Black Diamond into the Black Diamond action as the party

plaintiff, and the district court’s ultimate dismissal of the action on

Black Diamond’s motion. We conclude that the current Utah Rules

of Civil Procedure continue to allow execution against choses in

action. We also conclude that Lamoreaux was required to assert the

alleged divestiture of his interest by replying to the writ in the

Fisher action. Because Black Diamond’s purchase of Lamoreaux’s

cause of action was valid, the district court did not abuse its

discretion in substituting Black Diamond for Lamoreaux as plaintiff

and ultimately dismissing the action. Affirmed. 6

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