2020 UT App 127

THE UTAH COURT OF APPEALS

NEIL ALAN JOHNSON AND JODI LYN JOHNSON,

Appellants,

v.

NATIONSTAR MORTGAGE LLC AND U.S. BANK NA,

Appellees.

Opinion

No. 20200012-CA

Filed September 11, 2020

Fourth District Court, Spanish Fork Department

The Honorable Jared Eldridge

No. 170300085

David L. Fisher, Attorney for Appellants

Robert H. Scott and Jason T. Baker, 

Attorneys for Appellees

JUDGE JILL M. POHLMAN authored this Opinion, in which 

JUDGES DAVID N. MORTENSEN and RYAN M. HARRIS concurred.

POHLMAN, Judge:

¶1 Neil Alan Johnson and Jodi Lyn Johnson (collectively, the 

Johnsons) appeal the district court’s dismissal of their claims 

against Nationstar Mortgage LLC and U.S. Bank NA

(collectively, Appellees) with respect to the Johnsons’ mortgage 

on a home they purchased in Lehi, Utah (the Property). The 

Johnsons contend that the court erred by concluding that 

Appellees satisfied the statute of limitations applicable to their

nonjudicial foreclosure of the Johnsons’ property and that the

Johnsons’ claims under the Truth in Lending Act were barred by 

the doctrine of res judicata. We affirm.
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BACKGROUND

¶2 In April 2007, the Johnsons financed ownership of the 

Property by a loan evidenced by a promissory note (the Note) 

and secured by a trust deed. The trust deed, duly recorded in the 

Utah County recorder’s office, named Varent Inc. as the lender 

and Mortgage Electronic Registration Systems Inc. (MERS) as the 

nominal beneficiary. The trust deed was later assigned to 

Appellees.

¶3 The Note required the Johnsons to make payments on the 

first day of each month and provided that any amounts still 

owing under the Note as of the maturity date in May 2037 would 

be due at that time. Additionally, the Johnsons agreed to 

nonjudicial foreclosure in the event of default.

¶4 A notice of default was recorded in the Utah County 

recorder’s office on October 30, 2009 (the Default Notice). The 

Default Notice accelerated the loan, making the entire obligation 

“immediately due and payable.” A trustee’s sale was scheduled 

for September 2010.

The First Suit

¶5 The Johnsons filed suit in September 2010 (the First Suit), 

naming as defendants, among others, Varent’s former CEO, 

MERS, and the foreclosure trustee. In the First Suit, the Johnsons 

sought relief from the nonjudicial foreclosure that had been 

initiated against them, generally alleging that it appeared that 

“no entity exists today with the right to commence a non-judicial 

foreclosure on [the Property]” and that a controversy existed 

over “whether or not any of the Defendants are qualified and 

entitled to sell [the Property].” Among the factual bases 

allegedly entitling them to relief, the Johnsons claimed that “[o]n 

or about March 17, 2010, [they] executed and recorded their 

Notice of Right to Cancel” pursuant to the Truth in Lending Act 

(TILA), see generally 15 U.S.C. § 1635 (2018), and that “[c]opies of 
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[the Johnsons’] executed and recorded Notice of Right to Cancel 

was delivered to all known Defendants by same Process on or 

about March 26, 2010.” In terms of relief, the Johnsons asked, 

among other things, that the court enjoin the defendants from 

exercising their remedies under the trust deed.

¶6 Several of the defendants—including the trustee and the 

beneficiary under the trust deed at the time—filed a motion to 

dismiss the First Suit with prejudice pursuant to rule 12(b)(6) of 

the Utah Rules of Civil Procedure. In their motion, the 

defendants addressed the TILA allegations and argued that the 

Johnsons had failed to state a claim for relief under TILA where 

“multiple courts have rejected the [Johnsons’] premise” that 

“mere declaration of rescission of a loan for purported TILA 

violations” automatically cancels “the security interest 

represented by the recorded deed of trust so as to terminate any 

right to proceed with nonjudicial foreclosure.” (Citing Large v. 

Conseco Fin. Servicing Corp., 292 F.3d 49, 54–55 (1st Cir. 2002).) In 

response, the Johnsons filed their own motion to dismiss 

(without prejudice), claiming that their complaint “should have 

been filed in the Federal Court” because the defendants had 

violated several federal laws, including TILA.

¶7 In January 2011, the district court granted the defendants’ 

motion to dismiss with prejudice. In so doing, the court 

specifically addressed the Johnsons’ TILA allegations. The court 

adopted the reasoning set forth in the cases cited by the 

defendants and rejected the premise that “mere declaration of 

rescission of a loan for purported TILA violations” automatically 

cancels “the security interest represented by the recorded deed 

of trust so as to terminate any right to proceed with nonjudicial 

foreclosure.” For this reason (and others not relevant to this 

appeal), the court concluded that the Johnsons’ complaint failed 

to state a claim.

¶8 The Johnsons did not appeal the dismissal of the First 

Suit. Instead, between September 2010 and June 2017, they filed 
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seven bankruptcies, all of which were dismissed. No trustee’s 

sale occurred during that time period.

The Second Suit

¶9 The Property was again scheduled for a trustee’s sale in 

June 2017, and the Johnsons filed another complaint (the Second 

Suit) before the sale was set to occur. In the Second Suit, the 

Johnsons alleged that the trustee’s sale could not go forward 

because the relevant statute of limitations had expired. They 

asserted that the six-year limitations period applicable to written 

contracts under Utah Code section 78B-2-309 applied to actions 

enforcing the note secured by the trust deed. And, 

acknowledging that the limitations period runs six years after 

the acceleration of the defaulted loan, the Johnsons alleged that 

even with the tolling due to the bankruptcies, the limitations 

period expired in January 2017—well before the nonjudicial 

foreclosure sale set in June 2017.

¶10 Additionally, the Johnsons alleged that they were entitled 

to relief pursuant to TILA, because TILA afforded “a 

borrower . . . three years after the date of the consummation of 

the transaction to provide notice of rescission” and “[o]n March 

17, 2010, [the Johnsons] served Creditors with and recorded a 

notice rescinding the note and trust deed on the [Property].” The 

Johnsons contended that their notice “effectively rescinded the 

Note and Mortgage, thereby relieving [them] of any obligation to 

pay the Note secured by the Deed of Trust and voiding both 

documents.”

¶11 In response, Appellees moved for partial judgment on the 

pleadings.1 Appellees argued that the Johnsons could not 

“maintain any claim based on” their statute of limitations or 

 

1. The Second Suit also involved claims for relief regarding 

another property that is not the subject of this appeal.
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TILA rescission theories. As to the statute of limitations theory, 

Appellees disagreed with the Johnsons about the applicable 

statute of limitations, contending that the six-year limitations 

period for negotiable instruments under Utah Code section 

70A-3-118, not the limitations period for written contracts, 

applied. To that end, they acknowledged that the limitations 

period began running as of the date the debt was accelerated in 

October 2009. But Appellees asserted that under Utah Code 

section 57-1-34, which addresses how the limitations period is 

satisfied with respect to judicial and nonjudicial foreclosures, see 

generally Utah Code Ann. § 57-1-34 (LexisNexis Supp. 2019), the 

foreclosure sale was not time-barred because the appropriate 

action—recording the notice of default—took place within six 

years of the loan’s acceleration.

¶12 With respect to the TILA theory, Appellees argued that 

the claim preclusion branch of res judicata barred relitigation of 

the Johnsons’ TILA rescission claim. They asserted that all three 

elements of claim preclusion were met: they were in privity with 

the defendants in the First Suit, the TILA right-to-cancel claim 

was litigated and decided in that suit, and the First Suit’s 

dismissal constituted a final judgment on the merits.

¶13 The district court agreed with Appellees. As to the statute 

of limitations argument, the court concluded that the limitations 

period for negotiable instruments under section 70A-3-118 was 

the “controlling statute of limitations to enforce the note” and 

that the Default Notice recorded in October 2009 “satisfied the 

statute of limitations to enforce the deed of trust” pursuant to 

section 57-1-34. In so deciding, the court determined that the 

plain language of section 57-1-34 dictated that the Default Notice 

“both accelerated the loan and satisfied the statute of limitations 

simultaneously.” The court also concluded that the Johnsons’ 

rescission claim under TILA was barred by claim preclusion, 

determining that each element of claim preclusion had been met 

and that “the court in the [First Suit] considered and rejected [the 

Johnsons’] alleged TILA rescission and held it did not bar 
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foreclosure.” On this basis, the court granted Appellees’ motion 

for partial judgment on the pleadings and dismissed the claims 

applicable to the Property.

¶14 The Johnsons timely appeal.2

ISSUES AND STANDARDS OF REVIEW

¶15 The Johnsons raise two issues on appeal. First, they argue 

that the district court erred by determining that recording the 

Default Notice in October 2009 pursuant to Utah Code section 

57-1-34 satisfied the applicable statute of limitations. “We review 

questions of statutory interpretation for correctness, affording no 

deference to the district court’s legal conclusions.” Marion 

Energy, Inc. v. KFJ Ranch P’ship, 2011 UT 50, ¶ 12, 267 P.3d 863 

(cleaned up).

¶16 Second, the Johnsons argue, in the alternative, that the 

district court erred in concluding that their TILA rescission claim 

was barred under the claim preclusion branch of res judicata. 

“Whether a claim is barred by res judicata is a question of law 

that we review for correctness.” Gillmor v. Family Link, LLC, 2012 

UT 38, ¶ 9, 284 P.3d 622.

 

2. The Johnsons originally sought review of the district court’s 

order in an appeal we dismissed without prejudice for lack of 

finality. The jurisdictional defect was remedied, and the 

Johnsons then filed the present appeal. In doing so, Appellees 

asked us to decide the present appeal on the briefs and 

arguments submitted in the previously dismissed appeal, which 

we agreed to do after receiving no response from the Johnsons. 

Accordingly, we resolve the present appeal based on the 

arguments and briefs previously filed.
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ANALYSIS

I. Statute of Limitations

¶17 The Johnsons argue that the district court incorrectly 

concluded that recording the Default Notice satisfied the statute 

of limitations applicable to enforcing the Note secured by the 

trust deed. The Johnsons concede that Utah Code section 

70A-3-118, which provides a six-year limitations period for 

actions enforcing a party’s obligation to pay on a note, governs 

the timing for commencing the nonjudicial foreclosure against 

them. See generally Utah Code Ann. § 70A-3-118(1) (LexisNexis 

2009). And they acknowledge that Utah Code section 57-1-34(2) 

requires a trustee seeking to pursue a nonjudicial foreclosure to 

record a default notice within the six-year period prescribed 

under section 70A-3-118. See generally id. § 57-1-34(2) (Supp. 

2019). But they assert that a trustee’s sale is a separate action 

from the recording of a notice of default within the overall 

nonjudicial foreclosure proceedings, independently subject to its 

own six-year limitations period under section 70A-3-118(1). On 

that basis, they claim that recording the Default Notice cannot 

satisfy the limitations period applicable to the actual trustee’s 

sale and that, under section 70A-3-118(1), the trustee’s sale itself 

must occur within six years of the loan’s acceleration. We 

conclude that the plain language of sections 57-1-34 and 

70A-3-118 does not support the Johnsons’ preferred 

interpretation.

¶18 Our primary goal in resolving a question of statutory 

interpretation “is to evince the true intent and purpose of the 

Legislature,” and “the best evidence of the legislature’s intent is 

the plain language of the statute itself.” Marion Energy, Inc. v. KFJ 

Ranch P’ship, 2011 UT 50, ¶ 14, 267 P.3d 863 (cleaned up). 

“Absent a contrary indication, we assume that the legislature 

used each term advisedly according to its ordinary and usually 

accepted meaning.” Nielsen v. Retirement Board, 2019 UT App 89, 

¶ 17, 443 P.3d 1264 (cleaned up). We also “seek to give effect to 
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omissions in statutory language by presuming all omissions to 

be purposeful.” Marion Energy, 2011 UT 50, ¶ 14. And “when the 

plain meaning of the statute can be discerned from its language, 

no other interpretive tools are needed,” and our task is typically 

at an end. Hertzske v. Snyder, 2017 UT 4, ¶ 10, 390 P.3d 307 

(cleaned up); Bagley v. Bagley, 2016 UT 48, ¶ 10, 387 P.3d 1000.

¶19 At issue in this case is the nonjudicial foreclosure of the 

trust deed on the Property. Utah Code section 57-1-34 addresses 

the limitations of actions for both judicial and nonjudicial 

foreclosures of trust property. It provides,

A person shall, within the period prescribed by law 

for the commencement of an action on an 

obligation secured by a trust deed: (1) commence 

an action to foreclose the trust deed; or (2) file for 

record a notice of default under Section 57-1-24.

Utah Code Ann. § 57-1-34.3 This court has recently explained, as 

the parties concede, that the “period prescribed by law” 

 

3. This wording reflects the statutory language as amended 

effective May 10, 2016. Before that date, section 57-1-34 

provided,

The trustee’s sale of property under a trust deed 

shall be made, or an action to foreclose a trust deed 

as provided by law for the foreclosure of 

mortgages on real property shall be commenced, 

within the period prescribed by law for the 

commencement of an action on the obligation 

secured by the trust deed.

Utah Code Ann. § 57-1-34 (LexisNexis 2010). On appeal, the 

Johnsons do not challenge the district court’s determination that 

the May 10, 2016 amended version, rather than the preamendment version, applies here. We accordingly accept that 

(continued...)
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applicable to nonjudicial foreclosures under a trust deed is that 

set forth in Utah Code section 70A-3-118(1), see Deleeuw v. 

Nationstar Mortgage LLC, 2018 UT App 59, ¶¶ 11–16, 424 P.3d 

1075 (cleaned up), which provides that “an action to enforce the 

obligation of a party to pay a note payable at a definite time 

must be commenced within six years after the due date or dates 

stated in the note or, if a due date is accelerated, within six years 

after the accelerated due date,” Utah Code Ann. § 70A-3-118(1).

¶20 The meaning of sections 57-1-34 and 70A-3-118 in setting 

forth the operation of the statute of limitations applicable to 

nonjudicial foreclosures of trust deeds is clear. As decided by 

this court in Deleeuw,4 the limitations period for nonjudicial 

foreclosures of trust deeds is six years, triggered either upon the 

due date provided in the note or the accelerated due date. See

Utah Code Ann. § 70A-3-118(1); id. § 57-1-34(2); Deleeuw, 2018 

UT App 59, ¶¶ 12–18. Once the limitations period is triggered, 

 

(...continued)

the amended version is the relevant version for purposes of 

resolving this appeal.

4. The Johnsons place much emphasis on our decision in Deleeuw 

v. Nationstar Mortgage LLC, 2018 UT App 59, 424 P.3d 1075, 

contending that in that case we decided that the trustee’s sale 

must occur within six years after note acceleration. We did not. 

In Deleeuw, the only question before us was which “period 

prescribed by law” applied to section 57-1-34, and we 

determined that the appropriate period was that prescribed in 

section 70A-3-118(1), which provides a six-year period from the 

due date of the note or the acceleration due date. Id. ¶¶ 11–16 

(cleaned up). In other words, we decided in Deleeuw only what 

event triggers the running of the limitations period for 

nonjudicial foreclosures (i.e., the events described in section 

70A-3-118(1)). We rendered no opinion on what event satisfies

the limitations period.
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section 57-1-34 plainly and unambiguously provides that a 

lender pursuing a nonjudicial foreclosure of a trust deed

commences an action for nonjudicial foreclosure, and thereby

satisfies the limitations period, by “fil[ing] for record a notice of 

default.” Utah Code Ann. § 57-1-34(2). And contrary to the 

Johnsons’ preferred interpretation, there is no suggestion in 

either section 70A-3-118 or section 57-1-34 that the trustee’s sale 

itself must occur within any specified time period or that the 

trustee’s sale carries independent significance with respect to the

applicable limitations period.

¶21 Here, applying the plain language described above, it is 

readily apparent that Appellees (through their

predecessors-in-interest) satisfied the limitations period. 

Appellees’ predecessors-in-interest accelerated the entire 

underlying obligation secured by the trust deed by declaring the 

obligation to be “immediately due and payable” on October 30, 

2009. That acceleration event triggered the limitations period. 

The Default Notice was also filed and recorded with the Utah 

County recorder’s office on October 30, 2009. Under the plain 

language of section 57-1-34(2), the timely recording of the 

Default Notice satisfied the limitations period.

¶22 Nevertheless, the Johnsons suggest that even if the “literal 

language” of section 57-1-34 dictates this result, we should reject 

it because such an interpretation works an absurd result. They 

contend that this interpretation has the practical effect of 

allowing a trustee to “wait any indefinite number of years that it 

desired before initiating the [trustee’s] sale” and that the 

legislature cannot have intended that recording a notice of 

default, which accelerates the due date of the note,

simultaneously triggers and satisfies the applicable statute of 

limitations. But applying the absurdity doctrine “is a drastic 

step, one [our supreme court has] described as strong medicine, 

not to be administered lightly,” because it requires that we 

“override the plain language” employed by the legislature by 

“interpret[ing] the statute contrary to its plain meaning.” Utley v. 
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20200012-CA 11 2020 UT App 127

Mill Man Steel, Inc., 2015 UT 75, ¶¶ 47–48, 357 P.3d 992 (Durrant, 

C.J., concurring and dissenting) (cleaned up). In this respect, we 

will “not apply the absurdity doctrine unless the operation of the 

plain language is so overwhelmingly absurd that no rational 

legislator could have intended the statute to operate in such a 

manner.” Bagley, 2016 UT 48, ¶ 28 (cleaned up).

¶23 The Johnsons have not demonstrated that no rational 

legislator could have intended a recorded notice of default to 

satisfy the limitations period for nonjudicial foreclosures of trust 

deeds—even in circumstances where the acceleration event 

occurs simultaneously with the recording event. See id. 

Appellees point out that the legislature might have sought to 

recognize that lenders typically have “more control over 

recording a notice of default than they do over the actual sale” 

and that tethering the limitations period for nonjudicial 

foreclosures of trust deeds to the event of recording the notice of 

the default—an early step in the nonjudicial foreclosure 

process—is consistent with the approach taken with judicial 

foreclosure, where the lender satisfies the limitations period by 

filing a complaint. See Utah Code Ann. § 57-1-34. See generally id. 

§ 57-1-24 (2010) (outlining the process required to conduct a 

trustee’s sale). The Johnsons do not engage in like reasoning, and 

apart from labeling the district court’s interpretation absurd, 

they do not explain why no rational legislator could have 

intended the statutes to operate according to their plain 

meaning.5

¶24 In short, the Johnsons have not persuaded us that the 

legislature intended their preferred interpretation of section

 

5. The Johnsons additionally suggest that the foreclosure on the 

Property is barred by the doctrine of laches. This issue was not 

raised below and is unpreserved. Accordingly, we decline to 

reach it. See True v. Utah Dep’t of Transp., 2018 UT App 86, ¶¶ 29–

30, 427 P.3d 338.
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57-1-34, in conjunction with section 70A-3-118(1). Thus, we 

affirm the district court’s decision on this issue.

II. Claim Preclusion

¶25 The Johnsons additionally argue that, in the alternative, 

the district court erred in concluding that their claims with 

respect to their TILA rescission are barred by the claim 

preclusion branch of res judicata. While they make several 

arguments with respect to the correct characterization of a TILA 

rescission, they essentially argue that raising the TILA rescission 

in the First Suit did not amount to raising a claim for claim 

preclusion purposes. We disagree.

¶26 The Johnsons filed a third suit (the Third Suit) in January 

2018, which was also dismissed. Like the First Suit, both suits 

were connected, centering on the Johnsons’ related attempts to 

attain relief from the foreclosure proceedings on the Property. In 

their appeal of the Third Suit, Johnson v. Nationstar Mortgage LLC

(Johnson I), 2019 UT App 199, 455 P.3d 1120, the Johnsons raised 

the same res judicata argument presently before us—that the 

district court erred by concluding that their requests for relief 

based on their TILA rescission were claims for purposes of the 

claim preclusion branch of the doctrine of res judicata and that 

they were accordingly barred. There, we affirmed the district 

court’s determination that the Johnsons’ request for relief on the 

basis of their TILA rescission was barred by res judicata, 

concluding, among other things, that the district court in the 

First Suit “plainly resolved their requested entitlement to relief 

based on the fact of the TILA rescission” and that the Johnsons 

had not otherwise explained why claim preclusion did not apply 

under the circumstances. See id. ¶¶ 16–21.

¶27 This appeal likewise requires us to determine whether the 

district court erred in concluding that the court in the First Suit 

resolved the Johnsons’ entitlement to relief, given their TILA 

rescission. And the Johnsons do not offer different grounds for 
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granting the relief they seek from the district court’s claim 

preclusion decision, based on the dismissal of the First Suit, than 

they did in Johnson I. Thus, our reasoning in Johnson I applies 

here with the same force. Accordingly, for the same reasons 

articulated in Johnson I, we affirm the district court’s 

determination that the Johnsons’ request for relief on the basis of 

their TILA rescission is barred as res judicata by the district 

court’s decision in the First Suit. See id.

CONCLUSION6

¶28 We affirm the district court’s dismissal of the Johnsons’ 

claims. We conclude that the district court properly determined 

that the statute of limitations applicable to enforcing the Note 

secured by the trust deed on the Property had been met. And we 

conclude that the district court properly dismissed the Johnsons’

TILA rescission claim on the basis of res judicata.

 

6. In a single sentence of their conclusion, Appellees ask this 

court to award them fees incurred on appeal pursuant to rule 33 

of the Utah Rules of Appellate Procedure. Rule 33 provides that 

if an appellate court determines that an appeal taken is “either 

frivolous or for delay, it shall award just damages, which may 

include single or double costs, . . . and/or reasonable attorney 

fees, to the prevailing party.” Utah R. App. P. 33(a). “[P]arties 

seeking attorney fees under rule 33 face a high bar.” Porenta v. 

Porenta, 2017 UT 78, ¶ 51, 416 P.3d 487. This is because the 

“imposition of such a sanction is a serious matter and only to be 

used in egregious cases, lest the threat of such sanctions should 

chill litigants’ rights to appeal lower court decisions.” Id. 

(cleaned up). Here, Appellees have not explained why the 

Johnsons’ appeal meets this standard. Because Appellees have

not demonstrated that rule 33 fees are justified, we decline to 

award them.