20 15 UT App 171



### T HE 

### U TAH 

### C OURT O F 

### A PPEALS

D. D OUGLAS V ELANDER
, Plaintiff and Appell ant
,

v. LOL OF U TAH
, LLC

, AND K EVIN G. R ICHARDS , Defendant s and Appell ee

.

Memorandum Decision

N o. 20140471

- CA
Filed July 9, 2015

Second District Court, Ogden Department
The Honorable Mark R. DeCaria

No. 080905254

Samuel A. Hood

, Attorney for Appellant

Brian M. Lindquist

, Attorney for Appellee

J UDGE G REGORY K. O RME authored th is Memorandum Decision

, in which J UDGES J AMES Z. D AVIS and M ICHELE M. C HRISTIANSEN concurred

.

ORME

, Judge :

¶1 Appellant D. Douglas Velander filed an action to collect a debt against Appellee Kevin G. Richards, among others. More than four years later, the district court dismissed th e case for failure to prosecute . Velander appeals, arguing that the district court abused its discretion by dismissing the case. We affirm

.

¶2 On August 20, 2008, Velander filed a debt collection

action in the district court on behalf of the Velander Family
Trust. Richards was one of several defendants named in the complaint. Velander alleged that on A ugust 5, 2005, LOL of Utah, LLC

, executed a promissory note in favor of the trust for $71,288 and that t his note was due one year from execution.
Velander also alleged that Richards was one of five individuals who personally guaranteed payment of the note

.Velander v. LOL of Utah, LLC

20140471

- CA 2 2015 UT App 171 ¶3 Richards answered the complaint on September 10, 2008, disputing that he was resp onsible for payment of the note

. Just

over four years later, on September 14, 2012, Richard s moved for dismissal of the case under rule 41(b) of the Utah Rules of Civil Procedure, arguing that Velander had failed to prosecute. On December 21, 2012, the district court granted that motion. 1

¶4 “ ‘ [We ] do not disturb [a trial court’ s ord er of dismissal for failure to prosecute] absent an abuse of discretion and a likelihood that an injustice occurred. ’ ” PDC Consulting, Inc. v.
Porter , 2008 UT App 372, ¶ 5, 196 P.3d 626 (alterations in original) (quoting Hartford Leasing Corp. v. State, 88 8 P.2d 694, 697 (Utah Ct. App. 1994) ). Velander essentially argues that the
district court abuse d its discretion in weighing and analyzing the
factors outlined in Westinghouse Electric Supply Co. v. Paul W. Larsen Contractor, Inc. , 544 P.2d 8 76, 879 (Utah 1975).

1

. In his brief, Velander asserts that this December 2012 dismissal is “the order from which this appeal is primarily taken.” We acknowledge, however, that the procedural posture of this case is slightly more complicated than what we have just outlined.
Foll owing the December 2012 order of dismissal, Velander filed a motion to amend the judgment. See Utah R. Civ. P. 59. The district court denied that motion as untimely. Velander appealed, and this court reversed. Velander v. LOL of Utah, LLC

, 2013 UT App 196, ¶ 5, 307 P.3d 710 (per curiam). Following that appeal, the district court considered Velander’s renewed rule 59 motion on its merits. The court denied the motion in April 2014 but acknowledged “two legal errors” contained in its December
2012 order of dis missal. The court incorporated its amended analysis, contained in the April 2014 order, as the “basis for the Court’s final order.” Velander then filed the instant appeal. Inasmuch as Velander’s appeal raises issues that were cured by the court’s April 201 4 order, we regard those issues as moot. Velander does not claim to appeal that order, and he offers no analysis specific to it.Velander v. LOL of Utah, LLC

20140471

- CA 3 2015 UT App 171 ¶5 In Westinghouse , the Utah Supreme Court explained that a dismissal for failure to prosecute would constitute an abuse of discretion if there was justifiable excuse for the delay. I d. at 878

– 79.

Whether there is such justifiable excuse is to be
deter mined by considering more factors than merely the length of time since the suit was filed. Some consideration should be given to the conduct of both parties, and to the opportunity each has had to move the case forward and what they have done about it; and also what difficulty or prejudice may have been caused to the other side; and most important, whether injustice may result from the
dismissal.

Id. at 879 (footnote omitted). The district court organized its analysis around these factors in its December 20 12 order dismissing the case and in its April 2014 order denying Velander’s motion to amend the judgment.

¶6 In attacking the district court’s analysis, Velander specifically argues that (1) he was not required to initiate a scheduling conference and Richard s’s right to conduct discovery

was not dependent on such a conference, (2) Richards suffered no prejudice and Velander gained no financial advantage
because of th e delay in prosecuting the case, and (3) the dismissal caused significant injustice to Velande r. 2

2

. The district court acknowledged that its December 2012 order erroneously applied rule 26(f) of the Utah Rules of Civil

Proce dure , as then in effect. See Utah R. Civ. P. 26(f) (2011). It also acknowledged that its original order erroneously interpreted the interest rate that would apply to any judgment that might have ultimately been entered in the case. Problematically for Vela nder, his appeal rests almost entirely on
these two claimed errors. Because the district court corrected (continued...)Velander v. LOL of Utah, LLC

20140471

- CA 4 2015 UT App 171 ¶7 Under rule 41(b), a case can be dismissed “[f]or failure of the plaintiff to prosecute or to comply with [the Rules of Civil
Procedure ]

. ” Utah R. Civ. P. 41(b). The district court found both that Velander had “not complied with the Utah Rules of Civil Procedure” and that he had “failed to prosecute [his] claim against Richards.” The court originally found that Velander had
failed to arrange for a scheduling confer ence in accordance with rule 26(f). See id. 26(f) (2011). 3 The court, in its April 2014 order, acknowledged that some of the defendants in the action were not represented by counsel and that rule 26(f) therefore did not apply. See id. R. 26(a)(2)(A). The c ourt nevertheless determined that this change in its analysis did n ot “affect[] its original weighing of the Westinghouse factors in any way.” Velander’s arguments on this point focus entirely on the court’s rule 26 analysis , which the court re scinded in i ts April 2014 order.

(...continued)
itself on these two issues and nevertheless determined that dismissal was proper, and because Velander focuses almost exclusively on these two issues t hroughout his brief, there really is little for us to decide. Accordingly, we briefly review the
factors articulated in Westinghouse Electric Supply Co. v. Paul W. Larsen Contractor, Inc. , 544 P.2d 876, 879 (Utah 1975)

, with which
Velander takes issue . We conclude that most of Velander’s specific arguments are moot. Cf. Maveri k Country Stores, Inc. v.
Industrial Comm'n , 860 P.2d 944, 947 (Utah Ct. App. 1993) (explaining that when “‘ an administrative agency

. . . correct [s]
its own errors ,’” the controversies become moot) (quoting Parisi
v. Davidson , 405 U.S. 34, 37 (1972) )

.

3

. With the exception of rule 26 of the Utah Rules of Civil Procedure, which has since been significantly revised, the rules
that we cite in this memorandum decision have not been substantively changed since the district court made its decision. Accordingly, except when citing rule 26, we cite the current
version of the rules.Velander v. LOL of Utah, LLC

20140471

- CA 5 2015 UT App 171 Velander’s arguments on this first issue are therefore moot and
will not be considered further

.

¶8 Next, Velander takes issue with the district court’s analysis under the fourth Westinghouse factor

— what difficulty or prejudice may have be en caused to Richards. 4 See K.L.C. Inc. v.
McLean , 656 P.2d 986, 988 (Utah 1982) (per curiam)

. The district
court’s

original ruling found three types of prejudice that [Velander’s] failure to prosecute caused [Richards]: 1) the ever

- persistent threat of da mages in a law suit, 2) the continuing increase of interest owing on the debt throughout the entire span of [Velander’s]

4 . The district court’s analysis of the first three Westinghouse factors, outside its eventually rescinded rule 26 discussion, included the following:

1. The Conduct of Both Parties
Neithe r party pursued resolution of Plaintiff’s claim for over 3 years. The burden of prosecuting a case, however, lies with the Plaintiff.

2. The Opportunity Each Party has had to Move the Case
Forward Plaintiff bore the burden to begin the litigation process. Yet , Plaintiff failed to make any attempts to move the case against Richards forward for over three years. . . . [I]t would be foolish for Richards to pressure the Plaintiff to pursue a claim against him. Richards did all that he was required to do.

3. What Eac h Party has Done to Move the Case Forward Since Richards filed his answer, he has done nothing to move the case against him forward. He, however, was under no obligation to do so. Plaintiff, likewise, did not do anything to move this case forward
until abo ut October 2011 when it first began attempting to contact Richards in hopes of settlement.Velander v. LOL of Utah, LLC

20140471

- CA 6 2015 UT App 171 delay, and 3) the higher rate of interest owed prior to judgment than after judgment.

In its April 2014 order, the court reversed its finding of the third type of prejudice, and Velander’s arguments related to the same

are now inapposite

. Moreover , Velander does not contest the first form of prejudice. We are thus left to consider whether the district court erred in finding prejudic e to Richards because of the increased interest caused by Velander’s delay and whether that error, if any, affected the court’s weighing of the Westinghouse factors.

¶9 There can be no dispute t hat the interest on the alle ged debt increased significantly over time. The note provided for

interest at the unusually high rate of three percent per month

, compounded monthly. The longer the case went unresolved, the more interest accrued on any future judgment. Velander rightly acknowledges that “[t]he only thing tha t would have mitigated the ballooning interest charges for Richards would be to pay on the obligation.” It is counter

- intuitive, however, to expect Richards to pay on an obligation that he disputed. 5 Furthermore, while Velander is right that no one can kno w how long the case might have taken to reach resolution, there is no real dispute

5

. Velander questions whether the dispute was made in good faith. At oral argument before this court , counsel for Velander
referred to an email in which Richards ac knowledged responsibility for the debt, only later to deny all responsibility in his answer. Such a scenario would presumably have triggered an
immediate motion to strike the answer and to have sanctions imposed for the apparent violation of rule 11. See U tah R. Civ. P. 11( b)(4), (c ). Instead, Velander f iled nothing regarding the email
for forty

- eight months . The email was first raised in Velander’s motion for summary judgment, filed a week after Richards’s motion to dismiss for failure to prosecute. In vie w of the dismissal, the district court never reached the merits of
the summary judgment motion.Velander v. LOL of Utah, LLC

20140471

- CA 7 2015 UT App 171 that Velander’s inaction caused the case to sit dormant for three

years , during which three year s ’ worth of exceptionally high

interest accrued

. So while the prejudice to Ri chards might not have been as significant as the district court originally thought (when it was under the mistaken impression that the interest rate would decrease once the debt was reduced to judgment), the delay still caused prejudice to Richards by allo wing inordinately high interest to accumulate for three years while Velander did nothing vis

- à

- vis Richards

.

¶10 Finally, we consider Velander’s argument that dismissal caused him significant injustice. It is important to note that Velander obtained default j udgments against each of the other defendants originally named in the complaint , and he did so rather expeditiously

. This is not , then, a case where the court’s
decision not to hear Velander’s case on the merits left him wholly without a remedy. And Veland er has offered no legitimate excuse for why he could not have pursue d his case against Richards with the same swiftness he used in obtaining judgments against the other defendants.

¶11 The only arguments asserted by Velander that were not
rendered moot by the district court’s April 2014 order were those dealing with the prejudice caused to Richards and the injustice suffered by Velander. The other three Westinghouse factors, which the district court determined weighed in favor of dismissing the case, remain unchallenged. We conclude that the prejudice caused to Richards in the form of increased interest

was significant

— we were told at oral argument that the total
deb t now due on this note

, with a face value just over $71,000

, is some $2 million

— and Velander’s loss of a cause of action against Richards did not result in the sort of injustice that necessarily outweigh s the other factors that must be considered.
Accordin gly, we affirm the district court’s dismissal for failure to prosecute.