2020 UT App 42



### T HE 

### U TAH 

### C OURT O F 

### A PPEALS

J ENCO LC, D EAN G ARDNER I NVESTMENT LC, AND F.M. S NOW P ROPERTIES LLC
, Appellees
,
v. L EDGES P ARTNERS LLC AND SJI LLC
, Appell ants

.

Opinion
N o. 20190151

- CA Filed March 19, 2020

Fifth District Court, St. George Department The Honorable Jeffrey C. Wilcox
No. 120500362

R. Stephen Marshall, Cameron J. Cutler, and Kevin Paulsen
, Attorney s for Appellant s Bryan J. Pattison
, Attorney for Appellee s

J UDGE M ICHELE M. C HRISTIANSEN F ORSTER authored th is Opinion
, in which J UDGES K ATE A PPLEBY and J ILL M. P OHLMAN concurred

.

CHRISTIANSEN FORSTER
, Judge :

¶1 SJI LLC appeal s the district court’s order confirming a constable’s sale and dismissi ng SJI’s counterclaim. We reverse and remand for further proceedings

.

BACKGROUND

¶2 JENCO LC, Dean Gardner Investme nt LC, and F.M. Snow Properties LLC (collectively , JENCO) have had busine ss dealings with Ledges Partners LLC (Ledges) since 2004. In July 2010, JENCO and Ledges entered into an option agreement that gave Ledges the option to purchase 6 7.5 acres of land from JENCO.JENCO v. Ledge s Partners

20190151

- CA 2 2020 UT App 42 ¶3 In October 2015, JENCO obtained a judgment against Ledges in the amount of $382,787.08 in connection with a dispute concerning another contract between the part ies. JENCO applied for a writ of execution to allow it to satisfy its jud gment by selling Ledges ’ inte rest in the option agreement. The district court issued the requested writ on July 20, 2016, and the constable scheduled the sale for June 13, 2017.

¶4 The w rit of execution and the notice of sale each identified the property to be sold as “[a]ll interest, right, title, and equity of [Ledges ] in the ‘Land Owners to Ledges Partners, LLC New Real Property Option Agreement’ entered into
, as of July 15, 2010 by

an d between Ledges . . . and JENCO .” The notice of sale was served on Ledges, with copies sent to Ledges ’ managers, including Hans Kuhni.

¶5 The day before the sale, Kuhni filed a notice of interest on behalf of SJI, an affiliate of Ledges, claiming that Ledges had assigned its interest in the option agreement to SJI on December 8, 2010. SJI’s attorney also sent a letter to JENCO’s attorney informing him of SJI’s int erest in the option agreement. The assignment was evidenced by an Assignment of Interest Agreemen t, purportedly entered into on December 8, 2010, and signed by Kuhni on b ehalf of both Ledges and SJI. The signat ures were neither dated nor nota rized. SJI did not file a reply to the writ of execution or request a hearing. At the sale, JENCO purchased Ledges’ interest in the option agreement for $100.

¶6 O n December 13, 2017, JENCO filed a motion to join SJI as

a defendant in interpleader for the purpose of confir ming the sale. After the district court granted JENCO’s motion
, J ENCO filed a motion to confirm the sale, requesting that the court extinguish SJI’s purported inte rest in the option agreement. SJI opposed the motion and also filed a counterclaim seeking a declaratory judgment that the writ of execution did not affectJENCO v. Ledge s Partners

20190151

- CA 3 2020 UT App 42 S JI’s interest in the option agreement, that SJI was not obligated to respond to the writ , that the option agreement is an interest in real prop erty, that JENCO was not a good

- faith purchaser, and that the constable’s sale should be set aside because of
pro cedural irregularities and an inadequate sale price

. SJI alternatively requested an extension of the time to redeem the option agreement.

¶7 Following several hearings, the district court granted JENCO’s motion to confirm and extinguished SJI’s claimed
intere st in the option agreement. It also dismissed SJI’s counterclaim. The court determined that SJI had notice of the
execution sale because Kuhni was a man ager of both Ledges and SJI. Further, the court determined that any interest SJI claimed in the option a greement was extinguished because it did not reply to the writ of execution before the sale occurred as required by rule 64(e)(1) of the Utah Rules of Civil Procedure

. The court also rejected SJI’s request for an ext ension of the redemption period, determi ning that the option agreement was an interest in personal property rather than real property and was theref ore not subject to redemption. SJI now appeals.

ISSUE AND STAND A R D OF REVIEW

¶8 The resolution of this appeal depends on the scope of the writ of execu tion and whether it included SJI’s purported interest in the option. 1 Thus, “our task is to interpret the language of the writ of execution and the [notice] of sale to

1

. SJI also challenges the district court’s determination that
, under rule 64(e)(1) of the Utah Rules of Civil Procedure, SJI waived its rights to challenge the sale by not replying to the writ of execution prior to the sale

. B ecause we ultimately determine SJI’s purported rights could not have been affected by the constable’s sale, we need not address this issue on appeal.JENCO v. Ledge s Partners

20190151

- CA 4 2020 UT App 42 determine what effect, if any, the sale had on” SJI’s rights. See ASC Utah, Inc. v. Wolf Mountain Resorts, LC
, 2013 UT 24, ¶ 7, 309 P.3d 201

.

ANALYSIS

¶9 The plain language of t he writ of execution stated that the

c onstable was to collect on JENCO ’s judgment by selling the “interest, right, title, and equity” of Led ges in the option agreement. These documents did not authorize the constable to convey any other interest in the option agreement or give notice that other interests were subject to sale. Cf. ASC Utah , Inc. v. Wolf Mountain Resorts, LC
, 2013 UT 24, ¶¶ 8

– 9, 309 P.3d 201 (interpreting language in a writ o f sale purporting to convey “all rights, title, claims and interest s ” of a plaintiff in a cause of
action to exclude the plaintiff’s right to appeal, which was not explicitly listed (quotation simplified) ).

¶10 SJI asserts that as of Decemb er 8, 2010, Ledges no longer had any interest in the option agreement because it had conveyed all of its interest to SJI. If this is true, then the option agreement could not have been transferred to JENCO by way of the execution sale b ecause the writ auth orized the sale of only Ledges’ interest

.

¶11 JENCO , however, asserts that Ledges’ purported conveyance to SJI of its interest in the option agreement is a sham. It maintains that the Assignment of Interest Agreement is not authentic and that there is no evide nce that SJI gave

c onsideration for the transfer. It also points to emails from Kuhni, one sent a year before the sale and one just after the sale, in which Kuhni represented that the option agreement is Le dges’ “only remaining asset.” If JENCO is correct that the purported December 8, 2010 transfer was defective
, then SJI cannot prevail in any attempt to set aside the execution sale because it cannot be deemed to have an interest in the option agreement

.JENCO v. Ledge s Partners

20190151

- CA 5 2020 UT App 42 ¶12 The district court did not directly address the question of whether the December 8, 2010 Assignment of Interest Agreement effectively conveyed Ledges’ interest in the option agreement to SJI. Rather, the district court appeared to conclude that all of SJI’s arguments were waived by SJI’s failure to respond to the writ of execution. However, the writ of execution did not seek to execute on SJI’s purported rights or on the option agreement as a whole

— it applied only to Ledge s’ “interest, right, title, and equity” in the option agreement

. T hus, t he cou rt could not confirm a sale of all interest in the opt ion agreement to JENCO unless it first determined that SJI’s purported interest in the option agreement was invalid

. We therefore find it necessary to reverse the district court’s order confirming the s ale and remand for further proceedings. We also reverse an d remand the court’s dismissal of SJI’s counterclaim

.

¶13 If th e court determines that Ledges effectively convey ed
its interest in the option agreement to SJI, then the con stable’s sale could not have conveyed the option agreement , in its entirety, to JENCO. On the other hand, if the 2010 assignment was not valid, then SJI cannot claim an interest in the option agreement and has no basis to challenge the sale . The sale could then be c onfirmed and SJI’s counterclaim dismissed.

CONCLUSION

¶14 We determine that the writ of execution authorized the constable to sell only Ledges’ interest in the option agreement. The refore, any interest SJI may have had in the agr eement could not have been conveyed to JENCO , as o nly Ledges’ interest could be effectively conveyed . In light of this determination, we must reverse the district court’s ruling and remand for a determination of whether the 2010 assignment conveyed the option agreement to SJI

.