Court Opinion

ID: 9948562
Source: CourtListenerOpinion
Date Created: 2024-03-07 16:20:17.999281+00
Date Added: 2024-06-11T14:30:37.762961
License: Public Domain

This opinion is subject to revision before final
                    publication in the Pacific Reporter
                               2024 UT 9

                                  IN THE

     SUPREME COURT OF THE STATE OF UTAH

              SUNSTONE REALTY PARTNERS X LLC,
                         Appellant,
                                     v.
               BODELL CONSTRUCTION COMPANY,
                         Appellee.

                          No. 20230285
                     Heard December 13, 2023
                       Filed March 7, 2024

                          On Direct Appeal

                Third District, Salt Lake County
                The Honorable Robert P. Faust
                        No. 226909897

                               Attorneys:
         Russell S. Walker, South Jordan, for appellant
 Michael R. Johnson, Austin C. Nate, Salt Lake City, for appellee

  ASSOCIATE CHIEF JUSTICE PEARCE authored the opinion of the
   Court, in which CHIEF JUSTICE DURRANT, JUSTICE PETERSEN,
         JUSTICE HAGEN, and JUSTICE POHLMAN joined.

   ASSOCIATE CHIEF JUSTICE PEARCE, opinion of the Court:

                         INTRODUCTION
    ¶1 After arbitrating a dispute in Hawaii regarding
construction defects in a condominium development, SunStone
Realty Partners X LLC (SunStone) domesticated its Hawaii
judgment against Bodell Construction Company (Bodell) in Utah.
Bodell asked the district court to impose Utah’s postjudgment
interest rate instead of Hawaii’s higher postjudgment rate. The
district court complied with Bodell’s request.
                       SUNSTONE v. BODELL
                       Opinion of the Court

   ¶2 SunStone appeals, arguing that the Utah Foreign
Judgment Act (UFJA) requires the court to apply the Hawaii
postjudgment interest rate. See UTAH CODE § 78B-5-301 to -307.
Failing that, SunStone contends that provisions in its contract with
Bodell require Utah courts to award postjudgment interest at the
Hawaii rate. SunStone further suggests that even if the contract
does not mandate the Hawaii rate, principles of comity do.
    ¶3 Although the UFJA does not squarely address the issue, it
does instruct Utah courts to treat a foreign domesticated judgment
like a Utah judgment for purposes of enforcement. Postjudgment
interest serves, at least in part, as an enforcement mechanism.
Accordingly, the UFJA requires the imposition of Utah’s
postjudgment interest rate. We affirm.
                        BACKGROUND
   ¶4 SunStone and Bodell arbitrated claims arising out of a
construction dispute. The arbitration resulted in an award against
Bodell that exceeded $9.5 million. A Hawaii court entered a
judgment in favor of SunStone in that amount. SunStone
subsequently domesticated that judgment in Utah under the UFJA.
    ¶5 Bodell promptly moved the Utah district court for an order
imposing Utah’s postjudgment interest rate and not Hawaii’s. 1 In
its motion, Bodell argued that the UFJA requires the application of
Utah’s rate. It reasoned that the UFJA provides that a foreign
judgment domesticated in Utah is “subject to the same procedures,
defenses, enforcement, satisfaction, and proceedings” as a Utah
judgment, that postjudgment interest is properly considered a
procedural matter, and therefore that Utah’s postjudgment rate
applies. SunStone opposed the motion, arguing that the UFJA’s
“general purpose” requires the application of Hawaii’s rate. It
further asserted that its contract with Bodell required the district
court to apply the Hawaii rate.
    ¶6 Neither party requested a hearing on the motion, and the
district court entered an order that contained no analysis of the
issue, but simply stated “Utah’s post judgment rate applies as of
the date of the domestication of the foreign judgment in Utah.”
SunStone appeals.

__________________________________________________________
   1 When SunStone domesticated the judgment, the Utah rate was

2.29%; the Hawaii rate was 10%.

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                       Opinion of the Court

           ISSUES AND STANDARDS OF REVIEW
    ¶7 SunStone presents three issues. It first argues that the
district court erred when it failed to recognize that Hawaii’s
postjudgment rate should apply. SunStone posits the UFJA’s
“general purpose [is] to make . . . the law of” Utah uniform with
states that have enacted the Uniform Enforcement of Foreign
Judgments Act (UEFJA). (Citing UTAH CODE § 78B-5-307.) “We
review questions of statutory interpretation for correctness,
affording no deference to the lower court’s legal conclusions.” Scott
v. Benson, 2023 UT 4, ¶ 25, 529 P.3d 319 (cleaned up).
   ¶8 SunStone next contends that the contract between it and
Bodell requires the application of the Hawaii postjudgment rate.
“We review a district court’s interpretation of a contract for
correctness.” Brady v. Park, 2019 UT 16, ¶ 29, 445 P.3d 395.
   ¶9 SunStone last asserts that the Hawaii rate should apply as
a matter of comity. When we apply “principles of comity, we have
traditionally afforded the district court broad discretion.” Galindo
v. City of Flagstaff, 2019 UT 67, ¶ 6, 452 P.3d 1185 (cleaned up).
However, “[w]e initially presume comity should be extended”
unless the party shows that “the extension of comity contravenes
or undermines Utah’s public policy.” Id. ¶¶ 11–12 (cleaned up). But
when there is legislative guidance on an issue, the question is
“removed . . . from the realm of comity.” Pan Energy v. Martin, 813
P.2d 1142, 1146 (Utah 1991).
                            ANALYSIS
    I. THE UTAH FOREIGN JUDGMENT ACT REQUIRED THE DISTRICT
        COURT TO APPLY UTAH’S POSTJUDGMENT INTEREST RATE
   ¶10 SunStone first argues that the Hawaii rate applies “based
on Utah’s enactment of the” UEFJA. 2 SunStone points to the
provision in the UFJA that discusses a “general purpose to make
uniform the law of those states which enact it.” UTAH CODE § 78B-
__________________________________________________________
   2 As its name suggests, the Uniform Enforcement of Foreign

Judgments Act is a uniform act. Forty-eight states have adopted
some version of it. Michigan, Missouri, Oregon, and Washington
expressly provide that postjudgment interest should be assessed at
the rate of the state that issued the judgment. See MICH. COMP. LAWS
§ 691.1176; MO. REV. STAT. § 511.760(14); OR. REV. STAT. § 24.140;
WASH. REV. CODE § 6.36.140. Utah has not enacted a similar
provision.

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                       SUNSTONE v. BODELL
                       Opinion of the Court

5-307. SunStone asserts that “the only way to achieve that
uniformity among the various states under the UEFJA is to apply
the post-judgment rate of the [rendering state].”
    ¶11 “The aim of statutory interpretation is to ascertain the
intent of the legislature, and the best evidence of the legislature’s
intent is the plain language of the statute itself.” Scott v. Benson,
2023 UT 4, ¶ 37, 529 P.3d 319 (cleaned up). This process does not
look at statutory language in isolation; instead, “each section must
be read in the context of the entire [a]ct.” Savely v. Utah Highway
Patrol, 2018 UT 44, ¶ 25, 427 P.3d 1174 (cleaned up). And when the
language of a statute is plain, we will not turn to a “statute’s
purposes in hopes of finding a gloss to put on the text.” Scott, 2023
UT 4, ¶ 43 n.13.
   ¶12 The UFJA provides a means of domesticating a foreign
judgment and identifies how Utah courts must treat these
domesticated judgments. Although the UFJA does not specifically
address the question of postjudgment interest, subsection 78B-5-
302(3) supports the district court’s conclusion.
     ¶13 Subsection 78B-5-302(3) of the UFJA mandates that foreign
judgments domesticated using the UFJA are “subject to the same
procedures, defenses, enforcement, satisfaction, and proceedings
. . . as a judgment of a district court of this state.” 3 Rather than
determine, as SunStone urges, whether imposing the Hawaii
postjudgment rate serves the UFJA’s general purpose, we start by
asking whether postjudgment interest is one of the procedures,
defenses, enforcement mechanisms, satisfactions, or proceedings
that the UFJA instructs us to resolve with Utah law.
   ¶14 The United States Supreme Court has recognized that
postjudgment interest serves “to compensate the successful
plaintiff for being deprived of compensation for the loss from the
time between the ascertainment of the damages and the payment
by the defendant.” Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494
U.S. 827, 835–36 (1990) (cleaned up). The Seventh Circuit Court of
Appeals has further explained that postjudgment interest is not

__________________________________________________________
   3 Bodell also points to subsection (2), which specifies that the

“clerk of the district court shall treat the foreign judgment in all
respects as a judgment of a district court of Utah.” UTAH CODE
§ 78B-5-302(2). But because subsection (3) of the UFJA controls, we
need not turn to this provision.

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                        Opinion of the Court

meant to “punish a defendant but to encourage prompt payment
and compensate a plaintiff for another party’s use of its money.”
Overbeek v. Heimbecker, 101 F.3d 1225, 1228 (7th Cir. 1996). In other
words, postjudgment interest acts as “an enforcement tool to
ensure that . . . the award of just compensation will not be
diminished by delay in payment.” Brown v. Habrle, 1 A.3d 401, 405
(Me. 2010) (cleaned up).
   ¶15 Unlike prejudgment interest, the postjudgment rate would
have no effect on the judgment amount should a debtor decide to
immediately pay the judgment creditor. See Aqua Mgmt., Inc. v.
Abdeen, 227 P.3d 498, 502 (Ariz. Ct. App. 2010). Instead,
postjudgment interest serves, at least in part, as “an enforcement
mechanism designed to encourage timely satisfaction of the
judgment.” Id.
    ¶16 Other states see it the same way. For example, the
Pennsylvania Superior Court was asked to determine whether
postjudgment interest was a matter of substantive or procedural
law. See Lockley v. CSX Transp. Inc., 66 A.3d 322, 326 (Pa. Super. Ct.
2013). It concluded that postjudgment interest was procedural
because it is a “method by which rights . . . are enforced.” Id. at 327
(cleaned up). It further reasoned that postjudgment interest “does
not create a substantive right” because “the amount to which the
plaintiff is entitled has already been resolved” by the judgment. Id.
at 326–27.
   ¶17 The Arizona Court of Appeals has similarly held that
“post-judgment interest . . . is generally collateral to the underlying
judgment.” Aqua Mgmt., Inc., 227 P.3d at 502. It explained that
postjudgment interest “is merely an enforcement mechanism
designed to encourage timely satisfaction of the judgment,” not a
part of the substantive judgment. Id.
    ¶18 For its part, a Texas Court of Appeals has opined that
postjudgment interest can be awarded in claims against the
government beyond the $250,000 limit set by the Texas Tort Claims
Act. Tex. Dep’t of Transp. v. Ramming, 861 S.W.2d 460, 469 (Tex. App.
1993), writ denied (Feb. 23, 1994). The court concluded that
postjudgment interest could exceed the limit because “by
encouraging prompt payment of judgments, [postjudgment
interest] is an effective enforcement mechanism.” Id.
   ¶19 SunStone argues that postjudgment interest is a
substantive part of the judgment and not an enforcement
mechanism. In support of this argument, it claims that this court,

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                        SUNSTONE v. BODELL
                        Opinion of the Court

in Gressman v. State, “held that statutory provisions affecting post-
judgment interest affect substantive rights because they ‘enlarge,
eliminate, or destroy vested or contractual rights.’” (Quoting 2013
UT 63, ¶ 14, 323 P.3d 998.) SunStone misreads Gressman.
    ¶20 In Gressman, we considered whether a statutory
amendment affected vested rights, requiring us to apply the
version of the statute before it was amended. Id. ¶¶ 13–14. The
amendment “foreclose[d] postjudgment interest for financial
assistance payments and cut off such payments altogether” for
certain judgments following factual innocence claims. Id. ¶ 14. We
held that the amended provisions were substantive because they
affected vested rights and did “not merely dictate the practice and
procedure or the legal machinery by which the substantive law is
determined or made effective.” Id. (cleaned up). SunStone would
have us ignore that Gressman rested its conclusion on the
elimination of both postjudgment interest and the underlying
judgment, and not on a characterization of postjudgment interest
generally.4 See id.
   ¶21 Because postjudgment interest is an enforcement
mechanism, the UFJA requires us to look to Utah law. See UTAH
CODE § 78B-5-302(3). The district court did not err when it
concluded that Utah’s postjudgment rate applies under the UFJA.
II. THE PARTIES’ CONTRACT DID NOT REQUIRE THE DISTRICT COURT
         TO APPLY THE HAWAII POSTJUDGMENT INTEREST RATE

    ¶22 SunStone also contends that provisions in the parties’
construction contract required the imposition of the Hawaii
postjudgment interest rate and that the district court erred when it
failed to recognize that requirement. SunStone explains that the
parties agreed in the contract that proceedings would “be
conducted in the State of Hawaii” and that the contract would be
“governed by the law of the place where the project is located
[Hawaii].” SunStone also avers that the contract provided that
“[p]ayments . . . shall bear interest . . . at such rate as the parties
 __________________________________________________________
   4 The question is not before us, so we need not address it, but in

the interest of clarity we note that we can envision circumstances
where postjudgment interest is specifically awarded in a judgment
that a party subsequently domesticates in Utah. That would
present a different circumstance than the judgment SunStone
domesticated, which did not include a specific postjudgment
interest rate.

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                        Opinion of the Court

may agree upon in writing or . . . at the legal rate prevailing . . . at
the place where the project is located.”
    ¶23 When parties to a contract have agreed to apply the law of
a foreign state to govern disputes, generally that agreement “would
only apply to the substantive law governing the dispute.” See
Trillium USA, Inc. v. Bd. of Cnty. Comm’rs, 2001 UT 101, ¶ 14, 37 P.3d
1093. In other words, non-substantive matters or “matters of
procedure” are governed by the law of the forum. Id. (cleaned up).
      ¶24 As discussed, postjudgment interest is generally a
mechanism to enforce a judgment. Supra ¶¶ 14–18; cf. Baker v. Gen.
Motors Corp., 522 U.S. 222, 235 (1998) (“Enforcement measures do
not travel with the sister state judgment as preclusive effects do
. . . .”). Where a foreign judgment is domesticated in Utah and the
judgment itself does not specify a postjudgment rate, the choice to
apply Utah’s postjudgment interest statute is a question of
procedure. See AAA Fencing Co. v. Raintree Dev. & Energy Co., 714
P.2d 289, 291 n.2 (Utah 1986) (“A procedural statute . . . relates to
the means and procedures for enforcing [substantive] rights.”).
Therefore, the contract’s choice of law provision does not dictate
the postjudgment rate.
    ¶25 We take SunStone’s point that the parties could have
agreed to a postjudgment interest rate in their contract. See UTAH
CODE § 15-1-4(2)(a). But the interest provision SunStone relies on
does not speak to postjudgment interest. The contract sets the
interest rate only for “Payments due and unpaid under the
Contract Documents.” There is no mention anywhere within the
document of an interest rate on a judgment. SunStone argues that
the general interest provision relating to payments should extend
to the judgment obtained for construction defects.
    ¶26 We have not allowed parties to transmogrify an unrelated
interest rate clause into an expression of agreement on a
postjudgment interest rate. This court has explained that an
agreement to a particular interest rate in a contract will only apply
to a judgment award “if the parties agreed that the interest rate
would apply to the contractual obligation that forms the basis for
the judgment.” Brady v. Park, 2019 UT 16, ¶ 104, 445 P.3d 395. Put
differently, for a district court to impose a non-statutory
postjudgment rate, it must be “contractually linked” to the
obligation. See id.
   ¶27 In Brady, we determined that an agreement to a ten percent
interest rate on the repayment of a loan does not extend to a

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                         SUNSTONE v. BODELL
                        Opinion of the Court

judgment to recover overpayments on that loan. Id. ¶ 105. We
reasoned that the parties “did not contemplate the possibility of
loan overpayments,” nor did they “agree upon an interest rate that
would attach to” a judgment award for overpayments. Id.
    ¶28 Here, the arbitration award underlying the judgment is
based on claims for construction defects. This has no reasonable
relation to the parties’ agreement to an interest rate for “payments
due” under the contract. There is no indication that the parties
agreed to an interest rate that would apply to a judgment award for
construction defects. Nor did the parties agree to an interest rate
that would attach to a judgment generally. In the absence of such
an agreement, we default to the UFJA. The district court did not err
when it applied Utah’s postjudgment rate.
   III. WE DO NOT CONSIDER PRINCIPLES OF COMITY BECAUSE THE
                    UFJA MANDATES A RESULT
   ¶29 SunStone last argues that the district court should have
applied the Hawaii postjudgment interest rate as a matter of
comity. We have explained that comity “is the principle that a
court, for considerations of public policy, should defer to a court of
another jurisdiction . . . and is a matter that calls for the exercise of
judicial discretion.” Pan Energy v. Martin, 813 P.2d 1142, 1146 (Utah
1991). But when an issue is addressed by statute, it is “removed . . .
from the realm of comity.” Id. Because the UFJA subjects foreign
judgments filed under the UFJA to the same enforcement as local
judgments, the Legislature has already decided how we resolve the
question, and we may not use notions of comity to avoid the result
the statute requires. 5 See id.
                           CONCLUSION
   ¶30 The district court did not err when it concluded that Utah’s
postjudgment interest rate applies to the Hawaii judgment

__________________________________________________________
   5 SunStone raises a number of interesting and important policy

considerations. Perhaps most compelling is SunStone’s assertion
that the UFJA’s purposes could best be promoted through the
application of the postjudgment interest rate of the state that
renders the judgment. These are arguments best addressed to the
Utah Legislature, which might decide to join Michigan, Missouri,
Oregon, and Washington on the list of states that have deviated
from the uniform act to mandate that the postjudgment interest rate
of the rendering state applies.

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                      Opinion of the Court

SunStone domesticated in Utah using the UFJA. Indeed, the Utah
Foreign Judgment Act requires that result. The district court also
did not err when it rejected SunStone’s claim that the construction
contract required the application of Hawaii’s postjudgment rate.
Moreover, general principles of comity cannot override the result
that the statute dictates. We affirm.

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