2013 UT App 9

_________________________________________________________



### T HE 

### U TAH 

### C OURT OF 

### A PPEALS

BV L ENDING

, LLC and BV J ORDANELLE

, LLC,

Plaintiffs and Appellants,

v.

J ORDANELLE S PECIAL S ERVICE D ISTRICT

, U TAH S PECIAL

I MPROVEMENT D ISTRICT N O

. 2005

‐ 2, and

W. J EFFREY F ILLMORE

,

Defendants and Appellees.

Opinion

No. 20111089

‐ CA

Filed January 10, 2013

Fourth District, Heber Department

The Honorable Derek P. Pullan

No. 100500444

Michael R. Johnson and Matthew M. Cannon,

Attorneys for Appellants

Mark R. Gaylord and Melanie J. Vartabedian,

Attorneys for Appellees

J UDGE J AMES Z. D AVIS authored this Opinion,

in which J UDGES G REGORY K. O RME

and S TEPHEN L. R OTH concurred.

DAVIS, Judge:

¶1 BV Lending, LLC and BV Jordanelle, LLC (collectively,

Appellants) challenge the trial court’s partial dismissal of their

complaint against Jordanelle Special Service District (JSSD) for lack

of standing. We affirm.BV Lending v. Jordanelle Special Service District

1. However, on or about May 11, 2009, BV Lending apparently

received a copy of a disclosure statement, filed by PWJ in

connection with its bankruptcy, that disclosed the existence of

JSSD’s secured claim arising out of the soon

‐ to

‐ be

‐ adopted

Assessment Ordinance.

20111089

‐ CA 2013 UT App 9 2 BACKGROUND

¶2 In February 2006, the Wasatch County Council (the Council)

created JSSD, a special service district established pursuant to the

Utah County Improvement District Act. JSSD’s boundaries (the

District) encompassed real property (the Property) owned by PWJ

Holdings, LLC (PWJ). In March 2008, BV Lending made two loans

to PWJ, in return for which PWJ signed two promissory notes,

which were secured under the terms of a deed of trust granting BV

Lending a first priority lien on the Property. PWJ filed chapter 11

bankruptcy on February 10, 2009.

¶3 On June 23, 2009, the Council recorded a Notice of Proposed

Assessment against all property within the District, including the

Property. On July 8, 2009, the Council adopted an Assessment

Ordinance levying an assessment against property owners within

the District that were expected to benefit from certain improve

‐

ments made by JSSD. Notice of the Assessment Ordinance was

provided in accordance with the Utah Assessment Area Act, which

does not require that actual notice be given individually to

mortgagees. See Utah Code Ann. § 11

‐ 42

‐ 402(2)–(3) (LexisNexis

2012) (requiring that notice be published in a local newspaper of

general circulation or, if there is no such paper, posted in at least

three local public places; be published on the Utah Public Notice

Website; and be mailed to property owners). BV Lending appar

‐ ently did not receive actual notice of the Assessment Ordinance

until after August 14, 2009, which was the last day it could be

challenged. 1 BV Lending did not object to the Assessment Ordi

‐

nance at that time. On September 24, 2009, JSSD recorded a Notice

of Assessment Interest against the Property.BV Lending v. Jordanelle Special Service District

2. The amount of the credit bid included all that BV Lending was

owed under the two PWJ promissory notes.

20111089

‐ CA 2013 UT App 9 3 ¶4 As a result of PWJ’s default on its obligations to BV Lending,

BV Lending obtained relief from the automatic stay associated with

the bankruptcy and foreclosed on the Property. BV Lending

purchased the Property via credit bid on October 29, 2009. 2 That

same day, BV Jordanelle filed Articles of Organization and BV

Lending transferred title to the Property to BV Jordanelle. BV

Jordanelle recorded its interest on November 10, 2009. Appellants

explain that BV Jordanelle “is an affiliated special purpose entity

that was formed specifically to hold title to the

. . . Property.”

¶5 Despite receiving various notices regarding the assessment

after recording its deed to the Property, BV Jordanelle failed to pay

the assessment. On April 16, 2010, JSSD sent BV Jordanelle a notice

informing it that the unpaid balance had been accelerated due to

nonpayment. When BV Jordanelle still failed to pay any portion of

the assessment, JSSD commenced nonjudicial foreclosure proceed

‐ ings. See generally id § 11

‐ 42

‐ 502(1)(c) (“If an assessment or an

installment of an assessment is not paid when due, the local entity

may sell the property on which the assessment has been levied for

the amount due plus interest, penalties, and costs, in the manner

provided

. . . in Title 57, Chapter 1, Conveyances, as though the

property were the subject of a trust deed in favor of the local

entity.”); id. §§ 57

‐ 1

‐ 21 to

‐ 27 (2010) (outlining the requirements and

procedures for nonjudicial foreclosure of a trust deed). Appellants

then filed a complaint seeking, inter alia, a declaratory judgment

proclaiming that the Utah Assessment Area Act’s notice require

‐

ments are unconstitutional and that JSSD’s assessment methods

violated Appellants’ constitutional rights (collectively, the Notice

Claims). JSSD filed a motion to dismiss, alleging that Appellants

lacked standing to bring those claims. The trial court granted theBV Lending v. Jordanelle Special Service District

3. The trial court also dismissed BV Lending’s other claims on

standing grounds and dismissed another of BV Jordanelle’s claims

on the merits. Appellants do not challenge these dismissals. The

court denied JSSD’s motion to dismiss with respect to the rest of BV

Jordanelle’s claims, which remain pending in the trial court.

4. Appellants also filed a motion to enjoin JSSD’s foreclosure in

conjunction with their complaint, but the preliminary injunction

hearing was canceled after BV Jordanelle filed for bankruptcy on

September 2, 2010, which automatically stayed the foreclosure. The

bankruptcy court abstained from considering the issues relating to

JSSD’s motion to dismiss and transferred that portion of the case

back to the state trial court, whereupon the trial court dismissed

Appellants’ Notice Claims on standing grounds, as herein

described. The bankruptcy was dismissed by stipulation on

November 29, 2011. JSSD commenced a new nonjudicial

foreclosure proceeding on December 19, 2011, and ultimately

purchased the Property at a trustee’s sale on November 13, 2012,

via credit bid.

20111089

‐ CA 2013 UT App 9 4 motion with respect to the Notice Claims, 3 determining that neither

BV Lending nor BV Jordanelle had either traditional or alternative

standing. 4

ISSUE AND STANDARD OF REVIEW

¶6 Appellants argue that the trial court erred by determining

that they had neither traditional nor alternative standing to assert

the Notice Claims. “[A] determination of standing is generally a

question of law, which we review for correctness.” Mellor v.

Wasatch Crest Mut. Ins. Co.

, 2009 UT 5, ¶ 7, 201 P.3d 1004.BV Lending v. Jordanelle Special Service District

20111089

‐ CA 2013 UT App 9 5 ANALYSIS

I. Traditional Standing

¶7 To establish traditional standing, “the petitioning party must

allege that it has suffered or will suffer[] some distinct and palpable

injury that gives [it] a personal stake in the outcome of the legal

dispute.” Utah Chapter of the Sierra Club v. Utah Air Quality Bd.

, 2006

UT 74, ¶ 19, 148 P.3d 960 (alterations in original) (citation and

internal quotation marks omitted). A party who asserts a “distinct

and palpable injury” must demonstrate the following:

First, the party must assert that it has been or will be

adversely affected by the [challenged] actions.

Second, the party must allege a causal relationship

between the injury to the party, the [challenged]

actions and the relief requested. Third, the relief

requested must be substantially likely to redress the

injury claimed.

Id. (alterations in original) (citations and internal quotation marks

omitted).

A. BV Lending Does Not Have Traditional Standing.

¶8 The trial court stated that the lack of notice impaired BV

Lending’s ability to contest the assessment and avoid potential

adverse effects on its security interest, and that there was a

connection between that injury and the relief sought via BV

Lending’s constitutional claims. However, the court determined

that BV Lending “eliminated any stake it may have had in the

outcome of these proceedings and the relief sought” when it

foreclosed on the property, which extinguished its deed of trust,

and then transferred the property to BV Jordanelle.

¶9 Appellants interpret the trial court’s holding as recognizing

that it met the first two elements of the three

‐ step inquiry andBV Lending v. Jordanelle Special Service District

20111089

‐ CA 2013 UT App 9 6 failed only on the redressability element. They then proceed to

argue that “because of the importance to organized society that

procedural due process be observed,” see Carey v. Piphus

, 435 U.S.

247, 266 (1978), redressability is not essential to standing where a

violation of procedural due process is alleged. Cf. id. (determining

that a party could seek nominal damages for violation of proce

‐

dural due process rights without proving an actual injury).

However, we disagree with Appellants’ assessment of the trial

court’s ruling. The three

‐ step inquiry pertains only to whether a

“distinct and palpable injury” has occurred; even where such an

injury is demonstrated, the party asserting it must show that the

injury “gives [it] a personal stake in the outcome of the legal

dispute,” Sierra Club, 2006 UT 74, ¶ 19 (alteration in original)

(citation and internal quotation marks omitted). It was BV Lend

‐ ing’s lack of a personal stake in the outcome, not the redressability

of its injury, that the trial court found pivotal to its determination

that BV Lending lacked standing. Thus, even assuming that it was

unnecessary for BV Lending to demonstrate redressability in the

context of its due process claims—an issue on which we express no

opinion—its lack of a personal stake in the outcome due to its

having extinguished its security interest and transferred the

Property to another entity deprives it of standing with respect to

the Notice Claims.

B. Appellants’ Argument That BV Jordanelle Has Traditional

Standing Is Inadequately Briefed.

¶10 The trial court determined that BV Jordanelle lacked

standing to bring the Notice Claims because it did not exist as a

legal entity at the time the assessments were levied and because it

took title with at least constructive notice of the assessments due to

their being a matter of public record. It also determined that BV

Jordanelle could not litigate the rights of BV Lending because itBV Lending v. Jordanelle Special Service District

5. This finding requires an assumption that those documents

retained any efficacy following the foreclosure sale and transfer to

BV Jordanelle.

6. Appellants represented at oral argument that there are no other

cases that have employed the third

‐ party standing doctrine under

circumstances similar to those in this case.

7. Appellants also appear to assert that BV Lending and BV

Jordanelle together might have traditional standing even if neither

of them has such standing alone. Appellants cite no authority in

support of this assertion, and we are aware of none. While it may

be true that the circumstances presented here bring about a

situation where “no one in the world can now assert the Notice

(continued...)

20111089

‐ CA 2013 UT App 9 7 was not BV Lending’s successor in interest to the promissory notes

or the deed of trust. 5

¶11 Appellants maintain that BV Jordanelle “could assert the

rights of BV[ Lending] in this matter under the ‘third

‐ party

standing’ doctrine.” They then cite several sources explaining the

third

‐ party standing doctrine. That is the extent of Appellant’s

analysis of this issue, and we find it to be inadequate. 6 See generally

Utah R. App. P. 24(a)(9) (requiring that a party’s argument “contain

the contentions and reasons of the appellant with respect to the

issues presented

. . . with citations to the authorities, statutes, and

parts of the record relied on”); State v. Green

, 2004 UT 76, ¶ 13, 99

P.3d 820 (“Implicitly, rule 24(a)(9) requires not just bald citation to

authority but development of that authority and reasoned analysis

based on that authority.” (citation and internal quotation marks

omitted)). Accordingly, we do not address this argument further

and we affirm the trial court’s determination that BV Jordanelle

lacked traditional standing. See generally Broderick v. Apartment

Mgmt. Consultants, LLC

, 2012 UT 17, ¶ 11, 279 P.3d 391 (“[W]e have

discretion to not address an inadequately briefed argument.”

(citation and internal quotation marks omitted)). 7BV Lending v. Jordanelle Special Service District

7. (...continued)

Claims, because no one in the world has standing to bring those

claims,” Appellants fail to explain why that would be an

impermissible result. And in any event, there is nothing to prevent

individuals affected by the Utah Assessment Area Act in the future

to contest its constitutionality at that time.

8. We do not evaluate the determination that BV Jordanelle’s status

as an obligor makes it an appropriate party because we conclude

that the Notice Claims do not present issues of sufficient public

importance. See generally City of Grantsville v. Redevelopment Agency

of Tooele City

, 2010 UT 38, ¶ 16, 233 P.3d 461. However, as pointed

out by Appellants’ counsel at oral argument, the nature of the

assessment lien is such that the obligation to pay the assessment

follows the Property. Thus, it appears that BV Jordanelle has no

(continued...)

20111089

‐ CA 2013 UT App 9 8 II. Alternative Standing

¶12 Appellants next assert that even if they lack traditional

standing, BV Jordanelle meets the requirements for alternative

standing under Utah law. A party may “qualify for alternative

standing if the party is (1) an appropriate party to bring suit and (2)

the issue being presented is one of sufficient public importance to

balance the absence of the traditional standing criteria.” City of

Grantsville v. Redevelopment Agency of Tooele City

, 2010 UT 38, ¶ 16,

233 P.3d 461 (citation and internal quotation marks omitted).

¶13 The trial court determined that BV Lending is not an

appropriate party to bring suit because, due to its no longer being

obligated to pay the assessment, it lacks “the interest necessary to

effectively assist the court in developing and reviewing all relevant

legal and factual questions.” Id. ¶ 17 (citation and internal quota

‐

tion marks omitted). And although the court considered BV

Jordanelle to be an appropriate party, given that it is the obligor

under the Assessment Ordinance, 8 the court determined that theBV Lending v. Jordanelle Special Service District

8. (...continued)

remaining obligation to JSSD now that JSSD has purchased the

Property. In light of these facts, BV Jordanelle may no longer be an

appropriate party. Further, as we observe, see supra note 7; infra

¶ 16, the issues Appellants seek to litigate are very likely to be

raised in the future by other entities with standing.

20111089

‐ CA 2013 UT App 9 9 claims at issue did “not present issues of sufficient public impor

‐

tance to grant BV[ Jordanelle] alternative standing.”

¶14 Appellants do not challenge the trial court’s determination

that BV Lending is not an appropriate party and therefore lacks

alternative standing, and they reaffirmed this position at oral

argument. However, Appellants argue that their claims present

issues of sufficient public importance for BV Jordanelle to be

granted alternative standing. Their argument relies primarily on

the fact that their claims implicate constitutional rights. Because the

resolution of those claims could impact the rights of any number

of other property owners to receive notice in the future, they

maintain that their claims are of sufficient public importance. But

“this Court will not readily relieve a plaintiff of the salutory

requirement of showing a real and personal interest in the dis

‐ pute,” Jenkins v. Swan

, 675 P.2d 1145, 1150 (Utah 1983), and our

jurisprudence suggests that an issue of public importance is

generally one where the outcome of the particular dispute at issue

will itself affect the community, not one which involves only a

potential impact on certain individual members of the public in the

future.

¶15 For example, in City of Grantsville v. Redevelopment Agency of

Tooele City

, 2010 UT 38, 233 P.3d 461, the party seeking alternative

standing alleged that Tooele City and its redevelopment agency

had breached an agreement relating to the redevelopment of a

decommissioned military base by selling the property and using

the proceeds for the benefit of Tooele City rather than the members

of the broader Tooele County community that were affected by theBV Lending v. Jordanelle Special Service District

20111089

‐ CA 2013 UT App 9 10 base’s closing. Id. ¶ 6. The supreme court determined that

Grantsville City had alternative standing to bring its claims

because the entire community had an interest in having the issue

litigated due to its having a stake in the sale or development of the

military base. Id. ¶ 19. Similarly, in Utah Chapter of the Sierra Club v.

Utah Air Quality Board

, 2006 UT 74, 148 P.3d 960, the issue raised by

the party seeking alternative standing was whether the Executive

Secretary of the Utah Division of Air Quality had complied with

state and federal law in approving the construction of a power

plant. Id. ¶ 3. The supreme court considered this to be an issue of

public importance because the alleged violations would directly

affect the entire community due to the power plant’s proximity to

homes and Capitol Reef National Park. Id. ¶ 44; see also Cedar

Mountain Envtl., Inc. v. Tooele Cnty.

, 2009 UT 48, ¶ 19, 214 P.3d 95

(determining that a question of whether “land use decisions

involving the storage of hazardous waste [were] properly made in

accordance with state and local laws” was an issue of public

importance because it “pose[d] potential environmental and

health

‐ related harms to the citizens of Tooele County”); Magna

Water Co. v. Strawberry Water Users Ass’n

, 2012 UT App 184, ¶ 17,

285 P.3d 1 (determining that “the recapture and reuse of the

[Strawberry Valley Project] water may affect a large number of

water users in Utah” and that “the public has an interest in having

this issue fully litigated” because the specific dispute at issue had

“the potential to impact a large portion of the community”).

¶16 In fact, we are aware of no Utah cases that address alterna

‐

tive standing in any context other than where the challenged

actions directly impact the public. Such situations are distinguish

‐

able from the one presented in this case, in which Appellants raise

issues that, while important, have only the potential to impact

other individuals or entities similarly situated at some future time.

In other words, had the Council’s failure to provide BV Lending

with actual notice of the Assessment Ordinance itself impacted the

community at large, then this might be considered an issue of

public importance. To the contrary, the only impact the issue raised

by the Notice Claims might have on the public is the potential thatBV Lending v. Jordanelle Special Service District

20111089

‐ CA 2013 UT App 9 11 other individuals or entities might in the future suffer injury when,

like BV Lending, they do not receive actual notice of an assessment

that might affect their security interest in specific property. And if

that were to happen, such individuals or entities would themselves

have standing to challenge the Utah Assessment Area Act in the

context of their own injuries. Thus, it is difficult to see how the

resolution of this issue at this particular point in time would be a

matter of public importance. Accordingly, we agree with the trial

court that it would be inappropriate to grant BV Jordanelle

alternative standing under the facts of this case.

CONCLUSION

¶17 We agree with the trial court that Appellants have neither

traditional nor alternative standing to litigate their Notice Claims.

BV Lending lacks traditional standing because, having transferred

the Property to BV Jordanelle, it no longer has any stake in the

outcome of this dispute. It lacks alternative standing as an appro

‐ priate party for the same reason. We do not consider BV

Jordanelle’s traditional standing argument, based on the third

‐

party standing doctrine, because it is inadequately briefed. We

further determine that BV Jordanelle lacks alternative standing

because the issues raised in the Notice Claims are not of sufficient

public importance. Accordingly, we affirm the trial court’s partial

grant of JSSD’s motion to dismiss.

____________________