2022 UT App 113

THE UTAH COURT OF APPEALS

JARED SORENSEN,

Appellant,

v.

DAVID SPARKS, ASHLEY BENNETT SPARKS, B&W AUTO LLC,

DIESELSELLERZ.COM LLC, 4X4 ANYTHING LLC, ET AL.,

1

Appellees.

Opinion

No. 20200648-CA

Filed October 6, 2022

Second District Court, Farmington Department

The Honorable Glen R. Dawson

The Honorable David J. Williams

No. 140700467

Jonathan W. Heaton, Attorney for Appellant

R. Lane Jenson and Cole S. Cannon, 

Attorneys for Appellees

JUDGE GREGORY K. ORME authored this Opinion, in which 

JUDGES DAVID N. MORTENSEN and RYAN D. TENNEY concurred.

ORME, Judge:

¶1 Jared Sorensen brought suit seeking, among other things, 

declaratory judgment on his ownership interests in various 

limited liability companies (LLCs) that were formed as part of a 

joint venture he entered into with David Sparks (the 

Sorensen/Sparks Venture). Following years of litigation, the 

district court granted judgment on the pleadings to the 

1. The parties on appeal are not limited to those listed but also 

include other parties whose names appear on the notice of appeal 

or who have otherwise entered appearances in this court.
Sorensen v. Sparks

20200648-CA 2 2022 UT App 113

defendants and subsequently denied Sorensen’s motion for leave 

to amend his complaint a second time. We affirm.

BACKGROUND2

¶2 In 2012, Sparks owned B&W Auto LLC (B&W), a car 

dealership and auto shop that specialized in diesel trucks, while

Sorensen owned a marketing and app development company.

Seeing an opportunity to combine forces, the two began 

discussing going into business together. In mid-October of that 

year, Sorensen and Sparks met to discuss the Sorensen/Sparks 

Venture in greater detail. “They discussed how they could use 

Sorensen’s marketing platform to sell diesel trucks and other 

products, specifically how they could implement Sorensen’s 

marketing platform on a Facebook page for diesel trucks that 

Sparks had created the day before[.]” They also discussed the 

need to build a website to which they would channel the social 

media traffic, which eventually manifested as DieselSellerz.com. 

¶3 That November, Sorensen left his company to work at the 

Sorensen/Sparks Venture full-time, which he agreed to do on the 

condition that he be a partner in the venture. But because of

Sparks’s reluctance, they “did not follow the legal formalities of 

forming a partnership.” Instead, they “agreed to work together on 

the Sorensen/Sparks Venture as partners, but without an

operating agreement or any other written contract between 

them.” Despite this understanding, when registering 

DieselSellerz.com LLC—one of multiple LLC entities formed in 

2. “On appeal from the grant of a motion for judgment on the 

pleadings, we take the factual allegations of the nonmoving party 

as true, considering such facts and all reasonable inferences 

drawn therefrom in a light most favorable to the non-moving 

party.” Pierucci v. U.S. Bank, NA, 2015 UT App 80, ¶ 8, 347 P.3d 

837 (quotation simplified).
Sorensen v. Sparks

20200648-CA 3 2022 UT App 113

furtherance of the Sorensen/Sparks Venture—Sparks listed 

himself and his wife, Ashley Bennett Sparks, as its sole owners. 

¶4 In March 2013, shortly after construction of an office for the 

Sorensen/Sparks Venture was completed in Salt Lake City, 

Sorensen and Sparks “discussed their respective ownership 

interests in the venture.” Although they did not define their exact 

ownership interests at that time, they confirmed that the two of 

them were “the equity partners in all of the Sorensen/Sparks 

Venture’s dealings.”

¶5 Sorensen later developed Diesel Power Gear (DPG), a 

clothing company catering to diesel truck enthusiasts. He also 

designed the first ten shirts for DPG and created the website 

dieselpowergear.com on which to sell the clothing. Sorensen and 

Sparks agreed that for each clothing item purchased, the 

purchaser would be entered into a raffle to win a diesel truck, 

which Sparks would assemble under the auspices of B&W. Sparks 

then organized Diesel Power Gear LLC but did so in his name 

only, omitting Sorensen from the filing. In its first month, DPG

generated $60,000 in sales revenue.

¶6 By May, Sorensen had done most of the work on 

DieselSellerz.com and on DPG, while Sparks’s involvement in the 

Sorensen/Sparks Venture “was severely limited.” “Sorensen 

created, managed, administered and otherwise solely ran those 

companies,” while “Sparks spent his time at B&W and relied on 

Sorensen to manage the Sorensen/Sparks Venture companies.” 

Sparks nevertheless took draws from the companies and 

commingled assets of the Sorensen/Sparks Venture companies 

with those of B&W.

¶7 In June, Sorensen again tried to solidify their respective 

ownership interests in the Sorensen/Sparks Venture, but Sparks 

avoided any discussion on the subject and did not come to the 

office for two months. Sparks told Sorensen that he “should trust 
Sorensen v. Sparks

20200648-CA 4 2022 UT App 113

him” and that he was not coming into the office because he was 

busy “taking care of things and trying to get the shop stable.” 

¶8 In October, Sparks sent Sorensen an email detailing that 

Sorensen’s ownership share in the Sorensen/Sparks Venture was 

limited to twenty-five percent. That December, the 

Sorensen/Sparks Venture hired an attorney to, among other 

things, draft an operating agreement. In January 2014, Sorensen 

and Sparks asked the attorney to “set up multiple companies and 

ensure that the structure was done correctly by including 

Sorensen as an owner.” The attorney created several additional 

LLC entities as part of the Sorensen/Sparks Venture but, 

according to Sorensen’s complaint, “only listed a registered 

agent” for those companies.

¶9 On two occasions between mid-January and early 

February 2014, Sparks held Sorensen out as an owner of the 

Sorensen/Sparks Venture during meetings with potential 

investors and business partners. In a February 2014 meeting with 

the attorney, Sparks indicated that he owned fifty percent, 

Sorensen owned twenty-five percent, and a third individual

owned the remaining twenty-five percent of the Sorensen/Sparks 

Venture companies. After the attorney questioned that

arrangement, Sparks emphasized that he was not concerned with 

“the money split” and “agreed that Sorensen had built DPG from 

the ground up” and that all the other companies were being 

“funded and built off the income of DPG.” Sparks therefore stated 

“that giving Sorensen a majority ownership of DPG was 

appropriate and giving him equal profit and loss was acceptable” 

but that he “wanted to retain final say about where the Company 

direction was headed regarding . . . DieselSellerz.com.”

¶10 In mid-February, Sorensen, Sparks, the attorney, and the 

third individual met to discuss the structure of the LLC entities 

going forward. The parties eventually decided that Sorensen 

would have a forty percent interest in DPG and a twenty-five
Sorensen v. Sparks

20200648-CA 5 2022 UT App 113

percent interest in DieselSellerz.com. However, an operating 

agreement to that effect was never executed. By late February, the 

relationship between Sorensen and Sparks had soured. Sparks 

accused Sorensen of incurring substantial debt for the

Sorensen/Sparks Venture companies and removed Sorensen’s 

access to the companies’ business bank accounts. When Sorensen

later approached Sparks with an operating agreement reflecting 

what had been agreed to during the mid-February meeting, 

Sparks refused to sign it, stating that “things have changed.” 

Sparks then took additional steps to alienate Sorensen from the 

companies.

¶11 In May 2014, Sorensen brought suit against Sparks, Ashley 

Bennett Sparks, B&W, and the various LLC entities formed under

the Sorensen/Sparks Venture (collectively, Appellees). Sorensen

filed an amended complaint later that year, which alleged several 

causes of action and sought declaratory judgment establishing 

Sorensen’s ownership interests in the Sorensen/Sparks Venture 

companies. Appellees filed several counterclaims against 

Sorensen, and the case proceeded to discovery.

¶12 Four years later, in 2018, the district court issued an order 

resolving various motions in limine. Because neither side 

“included a computation of damages prior to the end of 

discovery,” the order barred either side from “presenting any 

evidence of damages at trial” and dismissed “any cause of action 

seeking money damages,” with the exception of one of Appellees’ 

counterclaims. Notably, the order did not dismiss Sorensen’s 

claims seeking declaratory judgment.

¶13 Appellees filed a Motion to Refuse to Enter or Render a 

Declaratory Judgment, in which they urged the district court to 

exercise its discretion to decline to enter declaratory judgment on 

the ground that it “would not terminate the uncertainty or 

controversy giving rise to the proceeding.” See Utah Code Ann. 

§ 78B-6-404 (LexisNexis 2012). In support of their argument, 
Sorensen v. Sparks

20200648-CA 6 2022 UT App 113

Appellees listed eighteen “legal and factual questions that would 

be raised by a declaratory judgment giving [Sorensen] an 

ownership interest in the” Sorensen/Sparks Venture companies.

And in their reply memorandum, Appellees argued that Sorensen 

“has not plead[ed] a membership theory that would permit a trier 

of fact to find he is a member of” the Sorensen/Sparks Venture 

companies. Specifically, under the law in effect at the relevant 

time (the LLC Act), a person could become a member of an LLC 

upon its formation when (1) “the person signs the articles of 

organization as a member,” (2) “the person signs the operating 

agreement as a member,” or (3) “the person evidences the intent 

to become a member, either orally, in writing, or by other action 

such as transferring property or paying money to the company 

for an interest in the company” and “the person’s admission as a 

member is reflected in the records of the company or is otherwise 

acknowledged by the company.” Id. § 48-2c-702(1) (2010). And to 

become a member of an already formed LLC, unless otherwise 

provided in the LLC’s operating agreement, the person is

required to have the ”consent of all members” and to sign the 

operating agreement. See id. § 48-2c-703(1). Appellees argued that 

because Sorensen had “alleged none of the above” and instead 

“only allege[d] oral agreements,” his request for declaratory 

judgment should be dismissed.

¶14 In April 2018, at the hearing on Appellees’ motion, the 

district court stated that it viewed the motion as “tantamount to a 

Rule 12(b)(6) motion,” in that Appellees were arguing that 

Sorensen “had not pled a membership theory that would permit 

a trier of fact to find that [he] is a member of defendant businesses, 

considering the unique form of the business, the LLC form.” The 

court found this argument to be “interesting” and, following a 

lengthy exchange, invited further briefing on the matter.

¶15 Appellees subsequently filed a motion for judgment on the 

pleadings under rule 12(c) of the Utah Rules of Civil Procedure,

which the court granted at a September 2018 hearing. The court
Sorensen v. Sparks

20200648-CA 7 2022 UT App 113

first held that Sorensen did not allege in his first amended 

complaint “that he signed the articles o[f] organization or any 

operati[ng] agreement, nor does he allege that the defendant 

businesses ever acknowledged his membership,” nor did “the 

facts set out in the complaint . . . support [Sorensen] becoming a 

member after the formation of defendant businesses.” 

Additionally, after recognizing the eighteen questions Appellees 

listed in their earlier motion, the court held that in any event, 

“declaratory judgment would not . . . terminate the controversy 

or uncertainty” and, on that ground, declined to enter declaratory 

judgment.

¶16 The following month, Sorensen moved for leave to file a 

second amended complaint.3 The court denied this motion on the 

grounds that it was “both untimely and would cause substantial 

prejudice to [Appellees].” Regarding timeliness, the court noted

that the case had been litigated for nearly five years and that 

discovery had been completed some four years earlier. The court 

rejected Sorensen’s argument “that his delay in asking for leave is 

justified because [Appellees] waited so long to raise the pleading 

deficiencies,” noting that “[i]t is the responsibility of [Sorensen] to 

plead and prosecute his case” and “it is not the duty of [Appellees] 

to point out deficiencies of [Sorensen’s] pleadings so that [he] can 

timely amend his pleadings.” And regarding prejudice, the court 

stated that Sorensen’s proposed second amended complaint 

“includes new substantive issues and additional facts that would 

require more time for preparation and require additional 

discovery more than four years after discovery was closed.” The 

court further stated that allowing Sorensen to amend his 

complaint “after an unfavorable dispositive motion would be to 

3. Before a hearing on Sorensen’s motion could be held, Judge 

Glen R. Dawson retired from the bench, and responsibility for this 

case shifted to Judge David J. Williams.
Sorensen v. Sparks

20200648-CA 8 2022 UT App 113

allow [him] an unjustifiable ‘redo’ for inadvertence entirely 

within [his] control.” 

¶17 The court’s same order memorialized its prior grant of 

judgment on the pleadings pursuant to rule 12(c) and dismissed 

Sorensen’s remaining claims. Following the voluntary dismissal

of Appellees’ remaining counterclaims, Sorensen appealed.

ISSUES AND STANDARDS OF REVIEW

¶18 Sorensen raises two issues that we consider on appeal.

4

First, he argues that the district court erred in granting Appellees’ 

motion for judgment on the pleadings. “We review the district

court’s grant of a motion for judgment on the pleadings for 

correctness, affording no deference to the district court.” Pierucci 

v. U.S. Bank, NA, 2015 UT App 80, ¶ 8, 347 P.3d 837.

¶19 Second, Sorensen contends that the court erred in denying 

his second motion to amend his complaint. Because the court’s 

denial of the motion to amend was not based on the “purported 

futility of the amendment,” we review its denial for an abuse of 

discretion. Salt Lake City Corp. v. Kunz, 2020 UT App 139, ¶ 16, 476 

P.3d 989 (quotation simplified). See Stichting Mayflower Mountain 

Fonds v. United Park City Mines Co., 2017 UT 42, ¶ 48, 424 P.3d 72

(stating that a district court has “substantial discretion” in 

deciding motions for leave to amend). Accordingly, “[t]he 

question presented is not whether we would have granted leave 

to amend” but “whether we find an abuse of discretion in the 

district judge’s decision to deny the motion.” Stichting, 2017 UT 

42, ¶ 49. In other words, “we will not reverse unless the decision 

4. Sorensen also argues that the district court erred in concluding 

that declaratory judgment would not end the controversy 

between the parties. Because we affirm the court’s grant of 

judgment on the pleadings, we need not address this additional 

argument.
Sorensen v. Sparks

20200648-CA 9 2022 UT App 113

exceeds the limits of reasonability.” Neztsosie v. Meyer, 883 P.2d 

920, 922 (Utah 1994) (quotation simplified). See SA Group Props. 

Inc. v. Highland Marketplace LC, 2017 UT App 160, ¶ 13, 424 P.3d 

187 (“A trial court abuses its discretion if there is no reasonable 

basis for the decision.”) (quotation simplified).

ANALYSIS

I. Judgment on the Pleadings

¶20 Although generally “not favored,” “a court may enter 

judgment on the pleadings when the moving party is entitled to 

judgment on the face of the pleadings themselves.” MBNA Am. 

Bank, NA v. Williams, 2006 UT App 432, ¶ 2, 147 P.3d 536 

(quotation simplified). See Utah R. Civ. P. 12(c). In reviewing a 

court’s grant of judgment on the pleadings, we “take[] the factual 

allegations of the nonmoving party as true, considering such facts 

and all reasonable inferences drawn therefrom in a light most 

favorable to the non-moving party,” MBNA, 2006 UT App 432, ¶ 2 

(quotation simplified), “but we do not accept a complaint’s legal 

conclusions as true,” Kirkham v. Widdison, 2019 UT App 97, ¶ 22, 

447 P.3d 89. See Estrada v. Mendoza, 2012 UT App 82, ¶ 2, 275 P.3d 

1024 (“The grant of a motion for judgment on the pleadings is 

reviewed under the same standard as the grant of a motion to 

dismiss, i.e., we affirm the grant of such a motion only if, as a 

matter of law, the plaintiff could not recover under the facts 

alleged.”) (quotation simplified).

¶21 At the time of the formation of the Sorensen/Sparks 

Venture companies, the LLC Act, which was subsequently

repealed on January 1, 2016, see Utah Code Ann. § 63I-2-248(2) 

(LexisNexis 2016), was in effect. Section 702 of the LLC Act stated,

(1) In connection with formation of a company, a 

person becomes a member of the company upon 

the earliest to occur of the following:
Sorensen v. Sparks

20200648-CA 10 2022 UT App 113

(a) when the person signs the articles of 

organization as a member;

(b) when the person signs the operating 

agreement as a member; or

(c) when:

(i) the person evidences the intent to 

become a member, either orally, in 

writing, or by other action such as 

transferring property or paying money to 

the company for an interest in the 

company; and 

(ii) the person’s admission as a member is 

reflected in the records of the company or 

is otherwise acknowledged by the 

company.

(2) Notwithstanding Subsection (1), a person may 

not become a member of the company prior to 

formation of the company.

Id. § 48-2c-702 (2010).

¶22 And section 703 of the LLC Act, in relevant part, provided,

After formation of a company, a person is admitted 

as an additional member of the company as 

provided in the operating agreement or, if the 

operating agreement does not provide for 

additional members, then:

(1) in the case of a person who is not an assignee of 

an interest in the company, including a person 

acquiring an interest directly from the company, 
Sorensen v. Sparks

20200648-CA 11 2022 UT App 113

upon the person’s signing the operating agreement 

or other writing by which the person agrees to be 

bound by the operating agreement, and upon 

consent of all members[.]

Id. § 48-2c-703(1).

¶23 Here, the district court granted judgment on the

pleadings, explaining, with our emphasis, that under sections 702

and 703 of the LLC Act, Sorensen’s first amended complaint did 

not allege “that he signed the articles o[f] organization or any 

operati[ng] agreement,” or “that the defendant businesses ever 

acknowledged his membership,” nor did “the facts set out in the 

complaint . . . support [Sorensen] becoming a member after the 

formation of defendant businesses.”

¶24 Sorensen argues that in reaching this conclusion, the court 

failed to view the facts alleged in the complaint in a light most 

favorable to him. He acknowledges that the first amended 

complaint did not allege that he signed articles of organization or 

an operating agreement for any of the Sorensen/Sparks Venture 

companies, thereby precluding him from asserting membership 

in the companies under subsections (a) and (b) of section 702 or 

under subsection (1) of section 703.5 But Sorensen contends that 

he alleged facts sufficient to satisfy subsection (1)(c) of section 702

“because the Complaint unequivocally alleges both that 

(1) Sorensen intended to become and believed he would be a 

member (as evidenced by his words and actions), and 

(2) Sorensen’s membership interests were . . . acknowledged by 

the LLCs in question.” Specifically, Sorensen points to allegations 

in the complaint concerning:

5. Sorensen likewise does not assert that the companies’ operating 

agreements provided a different method through which 

additional members could be added after their formation.
Sorensen v. Sparks

20200648-CA 12 2022 UT App 113

• “the original discussions and overarching 

oral agreement between Sorensen and 

Sparks, which kicked off the Sorensen/Sparks 

Venture”;

• “how Sorensen left his other preexisting 

business and put in well over a year’s worth 

of grueling labor, well beyond that of a 

typical full-time employee, and with little 

compensation to show for it, to build 

virtually all aspects of the business from the 

ground up—all in reliance upon the equity 

Sorensen believed he was building for 

himself”;

• “how Sorensen single-handedly managed 

the Sorensen/Sparks Venture during the 

period in question, while Sparks did little to 

nothing valuable for the business”;

• “actual ownership percentages that were 

negotiated and agreed upon by Sparks and 

Sorensen and . . . an operating agreement that 

was prepared . . . to memorialize percentages 

as to at least one of the businesses”; and

• how Sparks held Sorensen out as an owner of 

the Sorensen/Sparks Venture during 

meetings with potential investors in early 

2014.

¶25 But these alleged facts, even when viewed in a light most 

favorable to Sorensen, do not satisfy the second prong of 

subsection (1)(c): that Sorensen’s membership in the companies
Sorensen v. Sparks

20200648-CA 13 2022 UT App 113

was “otherwise acknowledged by the compan[ies].”6Id.

§ 48-2c-702(1)(c)(ii). As an initial matter, the LLC Act stated that 

“a person may not become a member of a company prior to 

formation of the company.” Id. § 48-2c-702(2). Because the 

Sorensen/Sparks Venture itself is not an LLC, any events or 

agreements that took place prior to the formation of the 

Sorensen/Sparks Venture companies, including “original 

discussions and [an] overarching oral agreement between 

Sorensen and Sparks [that] kicked off the Sorensen/Sparks 

Venture,” are insufficient to establish Sorensen’s membership.7

Furthermore, section 702 is limited to membership created “[i]n 

6. Sorensen does not allege that any of the companies’ records 

reflected his membership.

7. Sorensen asserts that “Utah law undeniably allows a court to 

enforce contracts between parties, and nothing in the LLC Act 

should be read to limit such enforcement.” In support of this 

assertion, he cites Wanlass v. D Land Title, 790 P.2d 568 (Utah Ct. 

App. 1990), which states,

Where a partner wrongfully repudiates the 

partnership and converts the assets of the 

partnership to his own use and benefit, the excluded 

partner may waive the tort or breach and sue to 

specifically enforce the partnership or joint venture 

agreement, including the remedy of a judicial 

dissolution and an accounting or the victim may 

submit to the repudiation and sue for damages for 

breach of the joint venture agreement.

Id. at 572 (quotation simplified). But Wanlass is inapplicable here 

because Sorensen did not seek to “enforce the partnership or joint 

venture agreement” in his first amended complaint. See id. And 

although he did set forth a claim for repudiation of the 

partnership agreement in his proposed second amended 

complaint, as discussed in section II the district court did not 

exceed its discretion in denying him leave to file this complaint.
Sorensen v. Sparks

20200648-CA 14 2022 UT App 113

connection with the formation of a company,” id. § 48-2c-702(1), 

whereas section 703 provides the methods through which 

additional members may be added “[a]fter the formation of a 

company,” id. § 48-2c-703. Thus, Sorensen’s factual allegations of 

his membership being “otherwise acknowledged” by the various 

LLCs formed under the Sorensen/Sparks Venture must satisfy a 

very narrow window in time: the time of the companies’ 

formation.

¶26 Sorensen’s first amended complaint did not allege that the 

LLCs acknowledged his membership at the time of their 

formation. Sorensen points to two instances in which Sparks 

presented Sorensen as a member of the Sorensen/Sparks Venture 

and to the meetings in which he and Sparks negotiated a forty

percent ownership interest in DPG and a twenty-five percent 

interest in DieselSellerz.com, but these occurred after the

formation of the LLCs. Sorensen does not point to any fact in 

which the LLC entities “otherwise acknowledged” his 

membership at the time of their formation as contemplated by 

section 702. And to qualify for membership by reason of 

post-formation activities as contemplated by section 703, the 

future member must qualify for membership under the operating 

agreement or must sign the operating agreement or other writing, 

neither of which Sorensen alleged happened here. Accordingly, 

even when viewing the facts alleged in the complaint in the light 

most favorable to Sorensen, the district court did not err in 

granting judgment on the pleadings to Appellees.

¶27 Sorensen resists this conclusion, arguing that we “should 

consider the public policy and precedential implications of 

allowing a narrow and hyper-technical reading of the LLC Act as 

urged by the trial court and [Appellees].” He asserts that “[s]uch 

a reading places form over substance, essentially legitimizing and 

encouraging fraud and dishonesty in these types of situations by 

refusing to consider the agreements or dealings that may exist 

between parties—and instead considering only what certain 
Sorensen v. Sparks

20200648-CA 15 2022 UT App 113

unilateral, self-serving paperwork reflects.” Although the LLC 

Act was indeed expressly intended to be liberally construed, State 

v. Bruun, 2017 UT App 182, ¶ 43, 405 P.3d 905, abrogated on other 

grounds by State v. Silva, 2019 UT 36, 456 P.3d 718, subsection 702 

expressly foreclosed the broader interpretation urged by 

Sorensen.

¶28 “[T]he legislature stated its intent that the Act ‘be 

interpreted so as to give maximum effect to the principle of 

freedom of contract and to the enforceability of operating 

agreements of companies.’” Id. (quoting Utah Code Ann. 

§ 48-2c-1901). The Legislature did so by allowing “members of an 

LLC . . . great flexibility when choosing how the LLC will be 

organized and managed, with the provisions of the LLC Act 

serving as default provisions that govern an LLC if its members 

do not include contrary language in their operating agreement or 

in the LLC’s articles of organization.” Id. (quotation simplified). 

To that end, the LLC Act provided that 

[a]n operating agreement may modify the rules of 

any provision of this chapter that relates to: (a) the 

management of the company; (b) the business 

purpose of the company; (c) the conduct of the 

company’s affairs; or (d) the rights, duties, powers, 

and qualifications of, and relations between and 

among, the members, the managers, the members’ 

assignees and transferees, and the company.

Id. (quoting Utah Code Ann. § 48-2c-502(1)). And section 703 

provides that “[a]fter formation of a company, a person is 

admitted as an additional member of the company as provided in 

the operating agreement,” and it sets forth methods in which 

members may join the LLC “if the operating agreement does not 

provide for additional members.” Utah Code Ann. § 48-2c-703

(emphasis added).
Sorensen v. Sparks

20200648-CA 16 2022 UT App 113

¶29 Section 702 likewise reflects this policy of promoting the 

principle of freedom of contract. Subsection (1)(c) permits 

membership to be established upon formation of a company 

when “the person evidences the intent to become a member” and 

“the person’s admission as a member is reflected in the records of 

the company or is otherwise acknowledged by the company.” Id.

§ 48-2c-702(1)(c)(i)–(ii). But the section likewise expressly states 

that “[n]otwithstanding Subsection (1), a person may not become

a member of the company prior to formation of the company.” Id.

§ 48-2c-702(2). Accordingly, as discussed above, despite the

express policy of promoting the freedom of contract, the LLC Act 

nonetheless expressly limited the facts establishing membership 

to the time of the formation of the LLC. For this reason, although 

many sections of the LLC Act are to be construed liberally with 

the policy of promoting the freedom to contract in mind, 

subsection (2) of section 702 limits this principle. Cf. CCD, LC v. 

Millsap, 2005 UT 42, ¶ 23, 116 P.3d 366 (“The drafters of the [LLC] 

Act deemed expulsion authority to be so important that, despite 

acknowledging the power of limited liability company members 

to govern their affairs by contract, they expressly barred members 

from bargaining for expulsion rules that varied from those set out 

in section 710.”).

¶30 For the foregoing reasons, the district court did not err in 

granting judgment on the pleadings. 

II. Denial of Leave to Amend the Complaint

¶31 Rule 15 of the Utah Rules of Civil Procedure provides that 

courts “should freely give permission [to amend pleadings] when 

justice requires.” Utah R. Civ. P. 15(a)(2). “The purpose of rule 15 

is to provide litigants the maximum opportunity for each claim to 

be decided on its merits rather than on procedural niceties.” Shah 

v. Intermountain Healthcare, Inc., 2013 UT App 261, ¶ 7, 314 P.3d 

1079 (quotation simplified). Accordingly, “[t]rial courts should 

liberally allow amendments unless the amendments include 
Sorensen v. Sparks

20200648-CA 17 2022 UT App 113

untimely, unjustified, and prejudicial factors.” Daniels v. Gamma 

West Brachytherapy, LLC, 2009 UT 66, ¶ 58, 221 P.3d 256.

Additionally, “many other factors, such as delay, bad faith, or 

futility of the amendment, may weigh against the trial court’s 

allowing amendment.” Id. (quotation simplified). However, 

“[t]here is no rigid test,” and “[e]ven a single consideration or 

factor may be enough to justify denial of a motion for leave to 

amend.” Stichting Mayflower Mountain Fonds v. United Park City 

Mines Co., 2017 UT 42, ¶ 48, 424 P.3d 72. “This sort of case-specific 

weighing is precisely the kind of decision left to the trial court 

under rule 15(a)’s grant of discretion.” Kelly v. Hard Money 

Funding, Inc., 2004 UT App 44, ¶ 42, 87 P.3d 734. See Hudgens v. 

Prosper, Inc., 2010 UT 68, ¶ 18, 243 P.3d 1275 (“A district court is 

best positioned to evaluate the motion to amend in the context of 

the scope and duration of the lawsuit[.]”) (quotation simplified).

¶32 Here, the district court relied on two factors when denying 

Sorensen leave to file a second amended complaint in this case. 

First, the court held that the motion for leave to amend was 

untimely because litigation had been ongoing “for nearly five 

years, and fact discovery ha[d] been complete for more than four 

years.” The court also noted that “this case has been scheduled 

five times for final pre-trial conferences.” The court rejected 

Sorensen’s argument that his motion for leave to amend was 

timely because Appellees “waited so long to raise the pleading 

deficiencies,” stating that it was Sorensen’s responsibility “to 

plead and prosecute his case.” Second, the court held that because 

the proposed second amended complaint “includes new 

substantive issues and additional facts that would require more 

time for preparation and require additional discovery more than 

four years after discovery was closed,” and in light of “the factual 

circumstances and legal developments already occurring in this 

case,” Appellees would suffer “substantial prejudice” if Sorensen 

was granted leave to amend. We conclude that based on the first 

factor alone, the court did not exceed its “substantial discretion” 

in so ruling. See Stichting, 2017 UT 42, ¶ 48.
Sorensen v. Sparks

20200648-CA 18 2022 UT App 113

¶33 “There is no bright line rule against which to judge the 

timeliness of a motion to amend.” Cougar Canyon Loan LLC v. 

Walker, 2020 UT App 176, ¶ 24, 482 P.3d 227 (quotation 

simplified). Generally, motions to amend have been “deemed 

untimely when they are filed in the advanced procedural stages 

of the litigation process, such as after the completion of discovery, 

on the eve of a scheduled trial date, or after an order of dismissal 

has already been entered.” Kelly, 2004 UT App 44, ¶ 29. 

Furthermore, “regardless of the procedural posture of the case, 

motions to amend have typically been deemed untimely when 

they were filed several years into the litigation.” Id. ¶ 30.

¶34 Here, several factors support the district court’s

untimeliness characterization. As the court noted, Sorensen’s 

motion for leave to amend occurred approximately five years into 

the litigation and four years after the close of discovery.

Additionally, Sorensen moved for leave to amend his complaint

after the court had already granted judgment on the pleadings.8

8. Sorensen asserts that “it is notable that after years of litigation, 

and well beyond the typical time for pleadings challenges, 

[Appellees] did not bring—and the trial court did not grant—a 

motion for summary judgment in this matter.” But other than 

noting the claimed irregularity, Sorensen has not argued that the 

district court abused its discretion in permitting Appellees to 

move for judgment on the pleadings when they did, see Maxfield 

v. Herbert, 2012 UT 44, ¶ 11, 284 P.3d 647 (“Within the bounds set 

by rule and statute . . . a district court’s management of its docket 

and trial schedule is reviewed for an abuse of discretion.”) 

(quotation simplified), nor has he asserted that the motion 

delayed trial, see Utah R. Civ. P. 12(c) (“After the pleadings are 

closed, but within such time as not to delay the trial, any party 

may move for judgment on the pleadings.”). In any event, we fail 

to see any meaningful distinction between a judgment on the 

(continued...)
Sorensen v. Sparks

20200648-CA 19 2022 UT App 113

Moreover, Sorensen’s second amended complaint raised two 

additional claims that could have been included in his prior 

pleadings: breach of contract and repudiation of partnership 

agreement. Sorensen has not offered a justification for not 

bringing either of these claims earlier.9 Even without addressing 

the substantial prejudice factor, these facts alone are sufficient to 

affirm the district court’s denial of Sorensen’s motion for leave to 

amend.

10 See Stichting, 2017 UT 42, ¶ 50 (stating that the district 

court relied on “classic grounds for denying a motion under rule 

15(a)” when the court noted that the case had been pending for 

nine years and that the proposed amended complaint contained

pleadings and a motion for summary judgment for purposes of 

the timeliness calculation in this case.

9. Indeed, Sorensen does not address these additional claims in 

his briefing. Instead, he merely asserts that the district court did 

not identify what “new substantive issues” he had raised in its 

order of denial, which seems inconsequential given how obvious 

they are when comparing the first amended complaint and 

proposed second amended complaint.

10. Sorensen insists that “it is simply undeniable that the 

responsibility for any lack of timeliness or delay rests squarely 

with [Appellees] for failing to raise the pleadings issue sooner, 

and it was improper for the trial court to find lack of timeliness on 

Sorensen’s part while absolving [Appellees] of their causative role 

in the timing.” Although it certainly would have been within the 

court’s discretion to take this into consideration, it likewise was 

not an abuse of discretion for the court not to do so. To the 

contrary, as stated above, “motions to amend have typically been 

deemed untimely when they were filed several years into the 

litigation,” Kelly v. Hard Money Funding, Inc., 2004 UT App 44, 

¶ 30, 87 P.3d 734, or when filed, among other things, “after the 

completion of discovery . . . or after an order of dismissal has 

already been entered,” id. ¶ 29, as was the case here.
Sorensen v. Sparks

20200648-CA 20 2022 UT App 113

additional claims that could have been included in earlier 

pleadings, and also that it “cited concerns regarding additional 

delay”); Neztsosie v. Meyer, 883 P.2d 920, 922 (Utah 1994) 

(affirming the district court’s denial of leave to amend because the 

motion was filed after the district court had already granted 

summary judgment, the litigation had been ongoing for three 

years, and the plaintiffs “knew or should have known of the 

[additional] claim”); Tretheway v. Furstenau, 2001 UT App 400, 

¶ 17, 40 P.3d 649 (affirming the district court’s denial of leave to 

amend because the motion was filed “after the district court 

granted summary judgment adverse” to the plaintiff, who should 

have been aware of “the possibility of an adverse ruling”); Atcitty

v. Board of Educ., 967 P.2d 1261, 1264–65 (Utah Ct. App. 1998)

(affirming the district court’s denial of leave to amend because 

“appellant attempted to set forth new issues in his amended 

complaint,” “appellant filed his motion approximately 

two-and-a-half months after the discovery deadline, and after 

both parties had filed summary judgment motions,” and 

“appellant was aware of the ‘new issues’ in the amended 

complaint long before his motion was filed”) (emphasis omitted).

¶35 Accordingly, because the district court’s decision did not

“exceed the limits of reasonability,” see Neztsosie, 883 P.2d at 922

(quotation simplified), the court did not abuse its discretion when 

it denied Sorensen leave to amend his complaint for a second 

time.

CONCLUSION

¶36 The district court did not err in granting judgment on the 

pleadings and did not exceed its substantial discretion when it 

denied Sorensen’s motion for leave to file a second amended 

complaint. Affirmed.