Court Opinion

ID: 5137636
Source: CourtListenerOpinion
Date Created: 2021-12-21 14:41:07.741355+00
Date Added: 2024-06-11T07:39:19.965065
License: Public Domain

2013 UT App 9
_________________________________________________________

               THE UTAH COURT OF APPEALS

           BV LENDING, LLC and BV JORDANELLE, LLC,

                   Plaintiffs and Appellants,
                                v.
      JORDANELLE SPECIAL SERVICE DISTRICT, UTAH SPECIAL
            IMPROVEMENT DISTRICT NO. 2005‐2, and
                    W. JEFFREY FILLMORE,

                     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

          JUDGE JAMES Z. DAVIS authored this Opinion,
              in which JUDGES GREGORY K. ORME
                and STEPHEN L. ROTH 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

                         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.

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.

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           BV Lending v. Jordanelle Special Service District

¶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 the

2. The amount of the credit bid included all that BV Lending was
owed under the two PWJ promissory notes.

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          BV Lending v. Jordanelle Special Service District

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.

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.

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           BV Lending v. Jordanelle Special Service District

                             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 and

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          BV Lending v. Jordanelle Special Service District

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 it

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           BV Lending v. Jordanelle Special Service District

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)).7

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...)

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           BV Lending v. Jordanelle Special Service District

                      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 the

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...)

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           BV Lending v. Jordanelle Special Service District

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 the

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.

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           BV Lending v. Jordanelle Special Service District

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 that

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          BV Lending v. Jordanelle Special Service District

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.

                      ____________________

20111089‐CA                      11                  2013 UT App 9