Court Opinion

ID: 9901027
Source: CourtListenerOpinion
Date Created: 2023-11-20 22:11:48.372154+00
Date Added: 2024-06-11T09:21:24.559515
License: Public Domain

2023 UT App 107

               THE UTAH COURT OF APPEALS

       NORTH FORK MEADOWS OWNERS ASSOCIATION, INC.,
                         Appellee,
                            v.
            MICHAEL B. DOVE AND CASSIE J. DOVE,
                        Appellants.

                            Opinion
                        No. 20220356-CA
                    Filed September 21, 2023

           Second District Court, Ogden Department
                The Honorable Joseph M. Bean
                        No. 190905927

            Lincoln W. Hobbs, Attorney for Appellants
               Justin R. Baer, Attorney for Appellee

JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGES
 MICHELE M. CHRISTIANSEN FORSTER and DAVID N. MORTENSEN
                       concurred.

TENNEY, Judge:

¶1      After Michael and Cassie Dove began constructing a home
that did not conform to the rules of the North Fork Meadows
Owners Association (the Association), the Association filed a
complaint and motion for a temporary restraining order (TRO)
seeking to halt the Doves’ construction. But the Association soon
looked the other way when construction began on two other
non-conforming homes in the same subdivision. The district court
initially granted the Association’s request for a TRO against the
Doves. But it later dissolved the TRO and declined to issue a
preliminary injunction, reasoning that the Association had
“effectively abandoned” its claims by allowing the other
construction and that the Association “would not likely prevail on
the merits of the case.”
                    North Fork Meadows v. Dove

¶2     The Doves subsequently filed a motion asserting that they
were entitled to (1) damages and attorney fees under a rule that
applies when a party has been “wrongfully restrained or
enjoined,” as well as (2) attorney fees under a “prevailing party”
clause in the Association’s governing documents. The district
court denied the motion, and the Doves now challenge that ruling
on appeal. For the reasons set forth below, we affirm the district
court’s denial of damages and attorney fees under the wrongful
injunction rule, but we remand for further proceedings on the
question of whether the Doves were entitled to attorney fees
under the Association’s prevailing party clause.

                         BACKGROUND

¶3     The North Fork Meadows subdivision (North Fork) is
located in Weber County and includes 12 lots intended for
residential development. Michael and Cassie Dove acquired one
of these lots in October 2018. The following February, the Doves
sought information about the status of the applicable covenants,
conditions, and restrictions (CC&Rs), as well as “who approval
needs to go through” for home construction. At the time, lots in
North Fork were subject to the Second Amended and Restated
Declaration of Covenants, Conditions, and Restrictions for North
Fork (the Second Amended Declaration). The Second Amended
Declaration provided that in a legal action, “the prevailing
Owner(s) (or Association, as the case may be) . . . shall be entitled
to recover from the other Owner(s) all costs and expenses
incurred in connection therewith, including reasonable attorneys’
fees and costs.”

¶4     After the Doves did not receive a response to their initial
inquiry about North Fork’s CC&Rs, they made additional efforts.
In March 2019, the Doves received the name and contact
information for a person who owned the majority of the North
Fork lots and who also sat on the Association’s board of directors
and architectural control committee. The Doves sent their

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                   North Fork Meadows v. Dove

proposed building plans to the majority owner in April 2019, after
which he confirmed receipt of the plans and indicated that he
would pass them along to the Association’s design committee.
When the Doves again requested that the majority owner send
them North Fork’s CC&Rs, they received no response.

¶5     In May 2019, the Doves met with a member (Board
Member) of the Association’s board of directors. Although the
Doves’ building plans were not officially approved or
disapproved at this meeting, Board Member told the Doves that
he would take a “soft” approach to helping them conform with
the Second Amended Declaration. The following month, Board
Member sent the Doves a message asking them to “keep the
conversation going.”

¶6     Despite the lack of official approval, the Doves began
constructing their home in early July 2019. After construction
began, however, Board Member sent messages to the Doves and
their builder stating that “this home has not been approved by the
[Association] due to design concerns.” Board Member claimed
that the Doves’ home did not conform to the Second Amended
Declaration “because of the position of the three-car garage facing
the street, the height of the garage, the color and materials used
for the exterior and the percentage of the stone versus other
materials.” The Doves nevertheless continued constructing their
home.

¶7     On October 1, 2019, the Association filed a complaint
against the Doves, accompanied by a request for a TRO, “followed
by a preliminary injunction,” that would prevent further
construction on the Doves’ home. But after the Association filed
its complaint against the Doves, construction commenced on two
more North Fork lots, both of which were owned by a member of
the Association’s board of directors, and both of which also
contained “numerous deviations from the requirements of the
Second Amended Declaration.”

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                    North Fork Meadows v. Dove

¶8     In January 2020, the district court granted the Association’s
request for a TRO against the Doves. The court then scheduled an
evidentiary hearing to determine “whether the temporary
restraining order should be terminated” or instead “converted to
a preliminary injunction,” and that hearing was held the
following month. 1

¶9      In March 2020, the district court issued a decision that
dissolved the TRO and denied the request for a preliminary
injunction. In its assessment of whether to grant the preliminary
injunction, the court looked to the grounds set forth in rule 65A(e)
of the Utah Rules of Civil Procedure. Under the version of the rule
then in effect, one of the grounds was that the “threatened injury
to the applicant outweighs whatever damage the proposed order
or injunction may cause the party restrained or enjoined.” Utah R.
Civ. P. 65A(e)(2) (2020). On this, the court concluded that “both
parties [were] equally harmed” because if “the court determines
the harm to [the Association] to be greater, then [the Doves]
would be required to deconstruct their home at significant cost,”
and if “the court finds for [the Doves], [the Association] will have
a non-conforming interloper in the subdivision affecting aesthetic
presentation and future marketing.” One of the other grounds
was that there was “a substantial likelihood that the applicant will
prevail on the merits of the underlying claim, or the case presents
serious issues on the merits which should be the subject of further
litigation.” Id. R. 65A(e)(4). With respect to this ground, the court
concluded that by allowing non-conforming construction to
proceed on the other lots, the Association had “effectively
abandoned certain material sections” of the Second Amended

1. Under rule 65A(b)(3) of the Utah Rules of Civil Procedure, if a
TRO “is granted, the motion for a preliminary injunction shall be
scheduled for hearing at the earliest possible time and takes
precedence over all other civil matters except older matters of the
same character.” Rule 65A(b)(4) then contemplates the possible
“dissolution or modification” of the prior TRO at that hearing.

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                    North Fork Meadows v. Dove

Declaration. The court thus concluded that the Association
“would likely not prevail on the merits of the case,” and it
accordingly decided to dissolve the TRO and deny the request for
a preliminary injunction. At the close of its decision, the court
ordered the Doves to “draft an order consistent with this
memorandum decision and submit the order” to the Association.

¶10 The proposed order that the Doves subsequently
submitted set forth the reasons why the TRO was being dissolved.
The conclusion of this proposed order also stated that the Doves
were “entitled to an award of attorneys’ fees and damages arising
from the entry of the [TRO]” and that “such damages shall be
ascertained at a hearing to be held hereafter, or at the trial in this
matter.” The Association filed an objection to this proposed order,
taking issue with the insertion of language awarding attorney fees
and damages to the Doves. As part of this objection, the
Association noted that construction on the other non-conforming
homes had not begun until after the Association had filed its
complaint against the Doves. The Association argued that even if
the subsequent construction could constitute abandonment, the
TRO was not wrongful as to the Doves and should not result in
an award of damages or attorney fees.

¶11 In a subsequent ruling, the district court held that “[a]ny
request for attorney fees by either party shall be reserved until the
matter is resolved on the merits.” And the court also
“acknowledge[d]” the Association’s “position that at the time the
lawsuit commenced,” construction on the other non-conforming
homes had not yet begun and “that the lawsuit itself may not have
been without merit.”

¶12 After some additional litigation that’s unrelated to the
issues on appeal, the court issued a notice of intent to dismiss the
case for lack of prosecution. The Doves objected to the court’s
notice of intent, asking the court to instead dismiss the case
pursuant to a motion to dismiss that they were filing

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                   North Fork Meadows v. Dove

contemporaneously with their objection. The apparent reason for
this request was that the Doves’ motion to dismiss contained a
request for “an award of attorney fees to [the Doves]” and a
request for an award of “damages arising from the wrongful
issuance of a [TRO].” In the Doves’ view, they were entitled to
(1) both attorney fees and damages under rule 65A(c)(2) of the
Utah Rules of Civil Procedure, which applies when a party “is
found to have been wrongfully restrained or enjoined,” and
(2) attorney fees under the provision in the Second Amended
Declaration that awarded “costs and reasonable attorney fees” to
the “prevailing party in an action for the enforcement of any
provisions of this Declaration.” The Association later filed a
response in which it did not oppose the request for a dismissal of
the case, but in which it did oppose the request for attorney fees
and damages. The Association maintained that “[a]lthough the
Court did not grant a preliminary injunction, the [TRO] was not
wrongfully issued.”

¶13 The district court subsequently held a hearing on the
Doves’ request for attorney fees and damages, after which it
issued a ruling denying the request and dismissing the case with
prejudice. With respect to the request for attorney fees and
damages, the court noted that “[h]ad the court not found
abandonment, the Court likely would have enforced the terms of
the temporary restraining order as an injunction against [the
Doves].” The court concluded that “each party was to some extent
at fault, so the Court will exercise its discretion in not awarding
fees or damages to either party.”

¶14 The Doves now appeal the decision denying their request
for attorney fees and damages.

            ISSUES AND STANDARDS OF REVIEW

¶15 The Doves argue that the district court erred in two ways.
First, they allege that the court erred in refusing to award them

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                    North Fork Meadows v. Dove

damages and attorney fees pursuant rule 65A of the Utah Rules of
Civil Procedure. Whether attorney fees are recoverable under rule
65A “is a question of law, which is reviewed for correctness.”
IKON Office Sols., Inc. v. Crook, 2000 UT App 217, ¶ 9, 6 P.3d 1143
(quotation simplified). Rule 65A’s “use of the word ‘may,’”
however, “indicates a court’s discretionary power, the exercise of
which we review for an abuse of discretion.” Mota v. Mota, 2016
UT App 201, ¶ 6, 382 P.3d 1080.

¶16 Second, the Doves argue that the district court erred in
refusing to award them attorney fees under the Second Amended
Declaration. “Generally speaking, whether attorney fees are
recoverable by the prevailing party presents a question of law,
and we review the district court’s ruling for correctness.
However, we review a district court’s factual determination of
whether a party prevailed in a civil action for an abuse of
discretion.” Airport Park Salt Lake City LP v. 42 Hotel SLC LLC, 2016
UT App 137, ¶ 13, 378 P.3d 117 (quotation simplified).

                            ANALYSIS

                            I. Rule 65A

¶17 Under rule 65A(c)(1) of the Utah Rules of Civil Procedure,
an applicant must provide security for an injunction “unless it
appears that none of the parties will incur or suffer costs, attorney
fees or damage as the result of any wrongful order or injunction”
or there is another “substantial reason.” Rule 65A(c)(2) then
provides that the “amount of security shall not establish or limit
the amount of costs, including reasonable attorney fees incurred
in connection with the restraining order or preliminary injunction,
or damages that may be awarded to a party who is found to have
been wrongfully restrained or enjoined.” If a court finds that an
injunction was wrongfully issued, “the enjoined party” can file an
“action for costs and damages incurred as a result of the
wrongfully issued injunction,” Fuja v. Adams, 2021 UT App 55,

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                   North Fork Meadows v. Dove

¶ 11, 492 P.3d 793 (quotation simplified), and the available
recovery can include “attorney fees incurred in connection with”
the wrongfully issued “temporary restraining order or
injunction,” Green River Canal Co. v. Thayn, 2003 UT 50, ¶ 39, 84
P.3d 1134. As noted, the Doves requested attorney fees and
damages under this rule, but the district court denied the request.

¶18 In their briefing, the parties disagree about whether the
Doves were “wrongfully restrained or enjoined.” The Doves focus
on the fact that the TRO was eventually dissolved, suggesting that
the dissolution alone is reason to conclude that it was “wrongful.”
But the Association argues that something more is required. And
in this case, because the TRO was dissolved only because of the
court’s abandonment conclusion, and because that abandonment
conclusion was based on things that occurred (or, perhaps more
accurately, that didn’t occur) after the complaint had been filed,
the Association claims that the TRO wasn’t actually “wrongful.”

¶19 We need not determine which party is correct about
whether the Doves were wrongfully enjoined. Even if the TRO
was wrongful, rule 65A still makes an award of attorney fees
discretionary with the district court. Again, the rule provides that
the “amount of security shall not establish or limit the amount of
costs, including reasonable attorney fees incurred in connection
with the restraining order or preliminary injunction, or damages
that may be awarded to a party who is found to have been
wrongfully restrained or enjoined.” Utah R. Civ. P. 65A(c)(2)
(emphasis added). The word “may” is commonly understood as
being one that grants “discretionary power” to a court. Card v.
Card, 2016 UT App 233, ¶ 3, 391 P.3d 264 (quotation simplified);
see also Mota v. Mota, 2016 UT App 201, ¶ 6, 382 P.3d 1080 (noting
that a statute’s use of the word “may” makes the statute
“permissive”). And in reviewing other discretionary decisions,
Utah appellate courts commonly hold that a district court abuses
its discretion “only if no reasonable person would take the view
adopted by the trial court.” State v. Maestas, 2012 UT 46, ¶ 36, 299

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                    North Fork Meadows v. Dove

P.3d 892 (quotation simplified); accord State v. Sundara, 2021 UT
App 85, ¶ 49, 498 P.3d 443.

¶20 The Doves have never disputed the Association’s
contention that their home construction was not in conformity
with the Second Amended Declaration, and the undisputed
chronology of the case shows that this was so at the time that the
Association filed its complaint against them and sought a TRO.
Although it’s true that the district court later concluded that the
Association had abandoned its right to enforce the CC&Rs, this
abandonment determination was based on the Association’s
inaction with respect to construction on non-conforming homes
that began after the complaint had been filed. The Association has
not appealed the court’s abandonment determination, and we
express no view here on the merits of that determination. But the
question before us is whether the Doves were entitled to damages
or attorney fees under a discretionary rule that turns on the
issuance of a “wrongful” injunction. On that, we believe that a
reasonable person could conclude that the injunction was not
wrongful and that the Doves should not receive fees where their
construction was indeed nonconforming at the time the TRO was
issued and where the TRO’s subsequent dissolution was the result
of inaction by the Association that occurred later. We see no abuse
of discretion.

                 II. Second Amended Declaration

¶21 The Doves also argue that the district court erred in
declining their request for attorney fees under the Second
Amended Declaration. That declaration provided that if there was
a legal dispute, “the prevailing Owner(s) (or Association, as the
case may be) . . . shall be entitled to recover from the other
Owner(s) all costs and expenses incurred in connection therewith,
including reasonable attorneys’ fees and costs.” In light of this, the
Doves’ claim here turned on whether they (or, instead, the
Association) were the “prevailing party.”

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                    North Fork Meadows v. Dove

¶22 When a clause such as this one is invoked, the district court
is required to “determine which party, if any, prevailed.” Airport
Park Salt Lake City LP v. 42 Hotel SLC LLC, 2016 UT App 137, ¶ 21,
378 P.3d 117. But “genuine success—in the sense that the litigation
ultimately proved worthwhile—is not the standard for
determining the prevailing party for purposes of a fee award.”
Olsen v. Lund, 2010 UT App 353, ¶ 12, 246 P.3d 521 (quotation
simplified). Rather, courts follow a “flexible and reasoned
approach,” id. ¶ 7, that “permit[s] a case-by-case evaluation by the
trial court, and flexibility to handle circumstances where both, or
neither, parties may be considered to have prevailed,” R.T. Nielson
Co. v. Cook, 2002 UT 11, ¶ 25, 40 P.3d 1119. In doing so, a court
should “consider common sense factors in addition to the net
judgment.” Express Recovery Services Inc. v. Olson, 2017 UT App 71,
¶ 10, 397 P.3d 792 (quotation simplified). Such factors

       would include, but are not limited to, (1) contractual
       language, (2) the number of claims, counterclaims,
       cross-claims, etc., brought by the parties, (3) the
       importance of the claims relative to each other and
       their significance in the context of the lawsuit
       considered as a whole, and (4) the dollar amounts
       attached to and awarded in connection with the
       various claims.

R.T. Nielson Co., 2002 UT 11, ¶ 25. Depending on how a court
evaluates these or other factors, it is “possible that, in litigation
where both parties obtain mixed results, neither party should be
deemed to have prevailed for purposes of awarding attorney
fees.” Wihongi v. Catania SFH LLC, 2020 UT App 109, ¶ 10, 472 P.3d
308 (quotation simplified).

¶23 “Because the identity of the prevailing party depends, to a
large measure, on the context of each case,” our supreme court
has recognized that “the district court is in a better position than
[an appellate court] to decide this question.” Utah Transit Auth. v.

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                    North Fork Meadows v. Dove

Greyhound Lines, Inc., 2015 UT 53, ¶ 58, 355 P.3d 947 (quotation
simplified). For this reason, the decision of whether a party was
“the prevailing party in an action is a decision left to the sound
discretion of the trial court.” Maxwell Masonry Restoration
& Cleaning LLC v. North Ridge Constr. Inc., 2022 UT App 109, ¶ 28,
518 P.3d 164 (quotation simplified), cert. denied, 525 P.3d 1265
(Utah 2023).

¶24 Here, the Doves assert that they “prevailed on all aspects
of the case below,” relying heavily on the dissolution of the TRO
and the dismissal of the case. But the Association alternatively
asserts that “neither party prevailed,” pointing out that the Doves
lost on multiple motions and that the dissolution of the TRO and
dismissal of the case were both based on things that were outside
the Doves’ control.

¶25 In light of these conflicting positions, it’s at least arguable
that this case produced mixed results and that the Doves should
not be awarded their fees under this clause. But again, this is a
determination that should be made in the first instance by the
district court. Indeed, it’s one that the district court was required
to make. See Airport Park, 2016 UT App 137, ¶ 21 (“When a legal
basis exists to award attorney fees to ‘the prevailing party,’ the
court must determine which party, if any, prevailed.” (emphasis
added)). Having reviewed the record, we see no place where the
district court specifically made a prevailing party determination.
True, the court did opine “that each party was to some extent at
fault,” and from this it said that it would “exercise its discretion
in not awarding fees or damages to either party.” But in this
portion of the ruling, the court didn’t mention the phrase
“prevailing party,” let alone discuss or apply any of the factors
that are ordinarily associated with a prevailing party
determination. It’s therefore unclear to us whether the court’s
passing references to “fault” and “discretion” were meant as
implicit proxies for a prevailing party determination, or whether
the court was instead purporting to invoke some other source of

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                   North Fork Meadows v. Dove

discretion to deny the request. In these circumstances, we think it
best to not “speculate as to the district court’s unwritten intent,”
id. ¶ 24, and we decline to evaluate the merits of a ruling that the
district court did not clearly make. We thus remand with
instructions for the court to either clarify the nature of its past
ruling or instead conduct a prevailing party analysis in the first
instance. 2

                         CONCLUSION

¶26 The district court did not abuse its discretion in declining
to award the Doves damages and attorney fees under rule 65A of
the Utah Rules of Civil Procedure. But because it is unclear
whether the district court made a prevailing party determination,
we remand with instructions for the court to make that
determination and decide whether the Doves are entitled to fees
under the Second Amended Declaration.

2. We recognize that a prevailing party determination “pursuant
to a contractual attorney-fees provision may be made by an
appellate court in appropriate circumstances.” Airport Park Salt
Lake City LP v. 42 Hotel SLC LLC, 2016 UT App 137, ¶ 26, 378 P.3d
117. But such “appropriate circumstances” usually involve cases
where the plaintiff requested money damages (a request that is
“determinative” in nature), as opposed to cases like this one
where the requested relief was less precise and thus “more
complex” from a prevailing party standpoint. Id. We accordingly
decline to decide the prevailing party ourselves in the first
instance.

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