Court Opinion

ID: 6350437
Source: CourtListenerOpinion
Date Created: 2022-06-16 16:16:55.427587+00
Date Added: 2024-06-11T09:16:43.566146
License: Public Domain

2022 UT 23

                            IN THE

   SUPREME COURT OF THE STATE OF UTAH

   THE COVE AT LITTLE VALLEY HOMEOWNERS ASSOCIATION,
              a Utah Non-Profit Corporation,
                        Appellant,
                               v.
          TRAVERSE RIDGE SPECIAL SERVICE DISTRICT,
        a special service district of Draper City, Utah,
                            Appellee.

                        No. 20200781
                    Heard March 14, 2022
                     Filed June 16, 2022

                      On Direct Appeal

                  Third District, Salt Lake
              The Honorable Amber M. Mettler
                      No. 200903518

                          Attorneys:
      Matthew C. Barneck, Salt Lake City, for appellant
 P. Bruce Badger, Tanner J. Bean, Salt Lake City, for appellee

 JUSTICE PEARCE authored the opinion of the Court in which
          CHIEF JUSTICE DURRANT, JUSTICE PETERSEN,
 JUDGE CHRISTIANSEN FORSTER, and JUDGE POHLMAN joined.
Having recused himself, ASSOCIATE CHIEF JUSTICE LEE does not
           participate herein; COURT OF APPEALS
         JUDGE MICHELE M. CHRISTIANSEN FORSTER sat.
   Due to his retirement, JUSTICE HIMONAS did not participate
   herein; COURT OF APPEALS JUDGE JILL M. POHLMAN sat.
    JUSTICE DIANA HAGEN became a member of the Court on
       May 18, 2022 after oral argument in the matter and
                accordingly did not participate.
           THE COVE AT LITTLE VALLEY v. TRAVERSE RIDGE
                    SPECIAL SERVICE DISTRICT
                        Opinion of the Court

   JUSTICE PEARCE, opinion of the Court:
                           INTRODUCTION
   ¶1 Members of The Cove at Little Valley Homeowners
Association (at times “the Cove” or “the Homeowners Association”)
pay an assessment to the Traverse Ridge Special Service District (the
Service District). The Service District exists to provide certain
services to the residents of the district. The Service District, for
example, removes snow from some streets in the district. But the
Service District does not plow the roads in front of the homes in the
Cove because they are private roads. And the Service District takes
the position that it is not required to clear snow from private roads.
The Cove filed suit claiming that the Service District needed to either
stop charging members of the Cove for services it has never
provided or start plowing roads (among other things). The Cove also
sought a refund of amounts that its members had paid to fund the
Service District.
    ¶2 The Service District moved to dismiss for failure to state a
claim. The Service District argued that Draper City Code did not
require it to service private roads. The Service District also
contended that it is funded by a tax, and because it is funded by a
tax, the Homeowners Association needed to bring its challenge in
the manner the Utah Tax Code dictates. The district court agreed
with the Service District on both counts and dismissed the case.
    ¶3 On appeal, the Homeowners Association argues that the
district court should have found that the Service District needed to
maintain the Cove’s roads because the Draper City Code requiring
private streets to be privately maintained conflicts with state law. It
additionally asserts that the agreement the Homeowners Association
signed with Draper City, which provides that the Homeowners
Association’s streets must be privately maintained, cannot be
enforced by the Service District because the district was not a party
to the contract. We do not address either issue, however, because the
Cove did not raise them before the district court and our
preservation rules counsel against addressing unpreserved issues.
    ¶4 The Homeowners Association also contends that the district
court erred when it concluded that the assessment its members paid
to the Service District is a tax as a matter of law. The Association
argues that the district court erred because it relied on dicta in
Mawhinney v. City of Draper to conclude that this court had already
determined that monies paid to the Service District are a tax. 2014

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UT 54, 342 P.3d 262. We agree. We accordingly affirm in part, reverse
in part, and remand.
                           BACKGROUND
   ¶5 The Cove at Little Valley is a Utah non-profit corporation
which represents the interests of homeowners in the eponymous
Draper housing community.1
     ¶6 The Traverse Ridge Special Service District is a service district
the Draper City Council created “for the purpose of providing
transportation, including snow removal, street lighting services,
repairing and maintaining roads, sweeping and disposal services.”
Draper City Counc. Res. 99-82, 1999 Sess. (Utah 1999). Its purpose
and boundaries are defined by a set of Draper City Resolutions. See
id. (creating the Service District); Draper City Counc. Res. 03-05, 2003
Sess. (Utah 2003) (annexing the Cove, among other areas, into the
Service District).
   ¶7 The Cove’s residents live within the Service District’s
boundaries. The Cove’s homeowners pay into the Service District’s
fund. Despite that, the Service District has never provided services to
the Cove. Indeed, since the Cove was annexed into the Service
District’s area, the Cove’s homeowners have paid more than
$175,000 to the Service District without receiving any benefit.
    ¶8 The Cove filed suit against the Service District and asserted
two causes of action. In the first, the Cove sought an order requiring
the Service District provide services to all areas of the district,
including the Cove. The Cove alleged that “[t]here [were] no
conditions, exceptions or other language in [the Resolutions creating
or modifying the Service District] that exempt[ed] The Cove at Little
Valley homeowners from receiving full services provided by the
[Service District].”
   ¶9 The second cause of action sought a refund of the payments
the Cove’s residents had made to the Service District. The Cove
_____________________________________________________________
   1  This appeal comes to us from a motion to dismiss. “A Rule
12(b)(6) motion to dismiss admits the facts alleged in the complaint
but challenges the plaintiff's right to relief based on those facts.”
Oakwood Vill. LLC v. Albertsons, Inc., 2004 UT 101, ¶ 8, 104 P.3d 1226
(citation omitted). There are not many facts relevant to this appeal
beyond its procedural history. However, insofar as we do recite facts
that the Cove presented to the district court, we stress that these facts
are only alleged and have not been proven.

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           THE COVE AT LITTLE VALLEY v. TRAVERSE RIDGE
                    SPECIAL SERVICE DISTRICT
                        Opinion of the Court

alleged that, under Utah law, a service fee must bear a reasonable
relationship to the services provided. The Cove asserted that because
the Service District provides its members no services, requiring the
Cove’s residents to pay any amount is unreasonable.
    ¶10 The Service District moved to dismiss under Utah Rule of
Civil Procedure 12(b)(6). With respect to the Cove’s first cause of
action, the Service District asserted that it was not required to
provide services to the Cove. It explained that because the Cove’s
streets are private, they must be privately maintained. “[T]he reason
is obvious,” it explained. “Draper City Code § 17-1-040 requires all
private streets in the City to be maintained by the subdivider or
other private entity.” The Service District argued that because
nothing in its organizational resolution “requires [it] to snowplow or
maintain private streets,” the district court should not compel it to
provide those services to the Cove.
    ¶11 The Service District also took issue with the Cove calling the
amounts it received service fees. The Service District argued the
monies the Cove residents paid were an ad valorem property tax. And
it argued that the Utah Property Tax Act sets forth the process to
obtain a tax refund. The Service District contended that because the
Cove did not bring a refund claim under the Property Tax Act, it had
failed to state a claim upon which relief could be granted.
    ¶12 The Cove opposed the motion by asserting, in part, that the
monies paid to the Service District must be categorized as a service
fee and not a tax. The Cove argued that the Service District’s motion
to dismiss the Cove’s first cause of action, which requested a
declaratory judgment that the Service District must provide the Cove
services, should be denied because the motion “mischaracterize[d]
the service fees paid to the [Service] District as a ‘tax’ when the
monies paid are properly characterized as ‘service fees’ under
controlling Utah law.” “[A]t the very least,” the Cove continued,
“the legal question of whether the monies paid [to the Service
District] are service fees or taxes involves a factual inquiry into the
purpose of the levy, which precludes a 12(b)(6) motion to dismiss at
this point in the proceedings.”
   ¶13 The Cove then advanced essentially the same argument in
regard to its second cause of action, which sought a refund of the
money the Cove homeowners paid the Service District. The Cove
pressed the district court to deny the motion to dismiss the Cove’s
second cause of action because the Service District predicated its

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                         Opinion of the Court

argument “entirely on the ‘tax’ mischaracterization.” The Cove
concluded that “the Complaint is not a tax protest and the plaintiff
homeowners are not tax protesters. Rather, the plaintiff homeowners
are tax-paying Utah citizens asserting their rights to special services
paid for.”
    ¶14 The district court granted the Service District’s motion to
dismiss. The court explained that it would dismiss the Cove’s first
cause of action because the Draper City resolution annexing the
Cove into the Service District could not “be read to require the
provision of services that are otherwise prohibited by Draper City
Code.” The court interpreted Draper City Code to require private
roads to be privately maintained. Thus, although the Cove had been
annexed into the Service District by Draper City Council’s
Resolution 03-05, it needed to privately maintain its streets because
the streets were private. The court rejected the Cove’s contention that
the City meant to endow the Cove with a right to services when it
annexed the neighborhood. The court also noted that the Cove’s
developer, in the Development Agreement it signed with the City,
elected to privatize the development’s streets after the annexation
had occurred. Based on this analysis, the court concluded that it
could not require the Service District to provide services on the
Cove’s private streets.
   ¶15 The court dismissed the Cove’s second cause of action
because it concluded that in another case involving the Service
District, the Utah Supreme Court had held that monies paid to the
Service District are a tax. See Mawhinney v. City of Draper, 2014 UT 54,
342 P.3d 262.
                        STANDARD OF REVIEW
    ¶16 The Cove argues that the district court erred when it granted
the Service District’s motion to dismiss. “[W]e review the district
court’s [grant] of [a] motion to dismiss for correctness, granting no
deference to the district court’s ruling.” St. Jeor v. Kerr Corp., 2015 UT
49, ¶ 6, 353 P.3d 137 (third alteration in original) (citation omitted).
                                ANALYSIS
         I. THE COVE DID NOT PRESERVE THE ISSUES IT RAISES
            TO CHALLENGE THE MOTION TO DISMISS THE FIRST
                         CAUSE OF ACTION.
    ¶17 The Cove’s first cause of action asked the court to order the
Service District to provide services to its residents. In its complaint,
the Cove alleged that under the Utah Special Service District Act and
relevant Draper City resolutions, the Service District lacked the legal

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           THE COVE AT LITTLE VALLEY v. TRAVERSE RIDGE
                    SPECIAL SERVICE DISTRICT
                        Opinion of the Court

ability to deny services to “service-fee paying homeowners” who
resided within its boundaries. See UTAH CODE §§ 17D-1-101 to -604;
Draper City Counc. Res. 99-82, 1999 Sess. (Utah 1999) (creating the
Service District); Draper City Counc. Res. 03-05, 2003 Sess. (Utah
2003) (annexing the Cove, among other areas, into the Service
District). The Cove further alleged that even if Draper City provided
the Service District with authority to deny services, “such authority
would be invalid under [the Utah Special Service District Act].” The
Cove alleged that the Utah Special Service District Act did not give
authority to service districts to deny services to fee-paying
homeowners within their boundaries.
    ¶18 The Service District moved to dismiss this cause of action
because the resolutions creating the Service District could not be
read to require the provision of services that are otherwise
prohibited by Draper City Code. The City’s code states, “All private
streets shall be . . . maintained by the subdivider or other private
entity.” DRAPER CITY CODE § 17-1-040. The Service District also
argued that the Cove knew, based on its Development Agreement
with the City, that it would be required to maintain its own private
roads.
   ¶19 The Cove asked the district court to deny the Service
District’s motion to dismiss because it improperly relied on
information outside the complaint and mischaracterized the Service
District’s service fee as a tax.2 The Cove also argued that when
Draper City resolution 03-05 annexed the Cove into the Service
District, the City created an expectation that the Cove would receive
services. Notably, the Cove did not argue before the district court
that Draper City Code was invalid to the extent it conflicted with the
Utah Special Service District Act.
   ¶20 The district court concluded that the Draper City resolution
that annexed the Cove into the Service District did not require the

_____________________________________________________________
   2  Before the district court, the Cove argued that the Service
District improperly appended several documents, including the
Development Agreement, to its motion to dismiss. The district court
found that it could review a number of those documents without
converting the motion to dismiss into a motion for summary
judgment. The Cove does not challenge that decision, so we do not
address that question.

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                         Opinion of the Court

Service District to provide services prohibited by Draper City Code.
The court acknowledged that the Cove had been annexed into the
Service District before it privatized its streets. It concluded that once
the streets had been privatized, the Cove had a responsibility to
privately maintain them. Accordingly, the court dismissed the
Cove’s first cause of action.
    ¶21 The Cove first argues that the district court erred when it
relied on Draper City Code section 17-1-040 to reach its decision. The
Cove contends that section of the code conflicts with state law and is
preempted. The Cove next argues that the court should not have
relied on the Development Agreement to conclude that the Cove
understood that it needed to privately maintain the roads in the
Cove at Little Valley. According to the Cove, the Service District is
not a party to that agreement and therefore has “no interest in [the
Development Agreement] and no standing to enforce it.”
    ¶22 The Service District contends that we should not reach the
merits of those arguments because the Cove failed to preserve the
issues before the district court. The Cove responds that it either
preserved those issues or that they qualify for an exception to our
preservation rules.
    ¶23 An “appellant must properly preserve an issue in the district
court before it will be reviewed on appeal.”3 O’Dea v. Olea, 2009 UT
46, ¶ 15, 217 P.3d 704. “An issue is preserved for appeal when it has
been ‘presented to the district court in such a way that the court has
an opportunity to rule on [it].’” Patterson v. Patterson, 2011 UT 68,
¶ 12, 266 P.3d 828 (alteration in original) (quoting In re Adoption of
Baby E.Z., 2011 UT 38, ¶ 25, 266 P.3d 702). “To provide the court with
this opportunity, ‘the issue must be specifically raised . . . and must
be supported by evidence and relevant legal authority.’” State in
Interest of D.B., 2012 UT 65, ¶ 17, 289 P.3d 459 (quoting Donjuan v.
McDermott, 2011 UT 72, ¶ 20, 266 P.3d 839). Even so, when a party
“ha[s] failed to preserve an issue in the [district] court, but seeks to
_____________________________________________________________
   3   We note that because “[o]ur preservation requirement is self-
imposed and is therefore one of prudence rather than jurisdiction[,]
. . . we exercise wide discretion when deciding whether to entertain
or reject matters that are first raised on appeal. The two primary
considerations underlying the [preservation] rule are judicial
economy and fairness.” Fort Pierce Indus. Park Phases II, III & IV
Owners Ass’n v. Shakespeare, 2016 UT 28, ¶ 13, 379 P.3d 1218
(alterations in original) (citations omitted).

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            THE COVE AT LITTLE VALLEY v. TRAVERSE RIDGE
                     SPECIAL SERVICE DISTRICT
                         Opinion of the Court

raise it on appeal[,] . . . the party must argue an exception to
preservation.” State v. Johnson, 2017 UT 76, ¶ 17, 416 P.3d 443.
          A. The Cove Failed to Preserve the Issue of Whether
       Draper City Code Section 17-2-040 Conflicts with State Law
   ¶24 The Cove first argues that it preserved the issue it wants to
press on appeal because, contrary to the Service District’s argument,
the Cove raised the conflict between Draper City Code section 17-1-
040 and state law in the district court. As evidence of this, the Cove
points to several sentences in its complaint that reference Draper
City Code. The Cove did not, however, even mention these
paragraphs of its complaint in the opposition to the motion to
dismiss, let alone build an argument around them. The Cove
nevertheless argues that the reference in the complaint was sufficient
to preserve the issue for appeal.4 That is not how preservation
works.
    ¶25 To preserve an issue, a party must bring the issue to the
district court in a manner that, at a minimum, alerts the district court
that it is being asked to decide the issue. The Cove points to nothing
in the record, and our own review reveals nothing, that suggests the
district court would have understood that the Cove believed that
Draper City Code did not control because it conflicts with state law.
That is simply nowhere to be found in the Cove’s opposition to the
motion to dismiss. The suggestion that a reference to Draper City
Code in the complaint somehow raised the issue of state law
preemption to defeat a motion to dismiss does not hold water.
    ¶26 The Cove next argues that even if that issue is unpreserved,
we should still address it. It claims that even if the Cove did not
otherwise satisfy the preservation rule, the district court took up the
question, thereby freeing the Cove from the need to preserve the
issue. The Cove relies on our decision in Fort Pierce for support. But
this case presents a much different situation than Fort Pierce.
    ¶27 In Fort Pierce, we said that “the district court’s decision to
take up [a] question . . . conclusively overcame any objection that the
issue was not preserved for appeal.” Fort Pierce Indus. Park Phases II,
III & IV Owners Ass’n v. Shakespeare, 2016 UT 28, ¶ 13, 379 P.3d 1218.

_____________________________________________________________
   4We note that the Cove’s counsel on appeal did not represent the
Cove in the district court.

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                         Opinion of the Court

In that case, we considered whether a party had properly preserved
the question of whether restrictive covenants were disfavored. Id.
¶ 12. Neither party had argued that restrictive covenants were
disfavored. But that did not stop the district court from concluding
that that “restrictive covenants . . . are disfavored and should be
‘strictly construed in favor of the free and unrestricted use of
property.’” Id. ¶ 9. Because the court had explicitly considered the
specific issue of whether restrictive covenants were disfavored, we
concluded that considering that same question on appeal would not
compromise the court’s interest in promoting judicial economy nor
would it be unfair. Id. ¶ 13.
   ¶28 The Cove tries to deploy Fort Pierce’s logic to this matter. It
argues that because the district court decided that Draper City Code
prohibits the Service District from providing services to the Cove’s
residents, the issue regarding the possible preemptive effect of state
law has been preserved. The problem with the Cove’s argument
should be obvious. In Fort Pierce, the district court ruled on the
precise issue that the appellant wanted to assert on appeal. Here, no
party raised the issue the Cove wants to press, and the district court
did not rule on it. It simply ruled on the ultimate issue before it.
Defining the issue to be preserved at the level of generality that the
Cove does here would all but erase the preservation requirement.
    ¶29 The preservation rule’s rationale motivates this decision. To
promote fairness and conserve judicial resources, a party must raise
the issue in a manner that notifies the district court that it is being
asked to rule on the issue and allows the opposing party to address
it. If a party fails to present an issue to the district court, but the
district court acts as if it had by sua sponte analyzing and ruling on
that issue, we promote neither fairness nor judicial economy by
refusing to allow a party to challenge the court’s decision on appeal.
But, for this circumstance to occur, the district court actually needs to
address the issue the party wants to raise on appeal. That did not
happen here.
      B. The Cove Did Not Preserve the Issue of Whether the Service
       District Is a Party in Interest to the Development Agreement
    ¶30 The Cove next argues that it should be entitled to raise the
issue that the Service District has no interest in the Development
Agreement even if it did not raise that issue below.
   ¶31 The Cove claims that it should be allowed to raise its
argument because the district court concluded that the Service
District could enforce the Development Agreement. However, the
lower court never made such a determination. At most, the district
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            THE COVE AT LITTLE VALLEY v. TRAVERSE RIDGE
                     SPECIAL SERVICE DISTRICT
                          Opinion of the Court

court tangentially referenced the Development Agreement at the
hearing on the motion to dismiss. But it never said that the Service
District could enforce the Development Agreement against the Cove.
   ¶32 The Cove asserts that even if the issue was not preserved, it
has a work-around. The Cove contends that the Service District does
not have standing to enforce the Development Agreement. The Cove
notes our case law that standing can be asserted at any time and
argues that it can therefore raise this issue even if it did not give the
district court a swing at it. There are several problems with the
Cove’s analysis.
    ¶33 First, the Cove misunderstands the type of standing that
need not be preserved and can be raised at any time. Only standing
which calls into question a court’s subject matter jurisdiction can be
raised at any point in the litigation. This is because the court has a
duty to ensure that it has subject matter jurisdiction over the cases in
front of it. See, e.g., Matter of Adoption of B.B., 2017 UT 59, ¶ 102, 417
P.3d 1. If a court determines that it lacks subject matter jurisdiction, it
“retains only the authority to dismiss the action.” Nevares v. Adoptive
Couple, 2016 UT 39, ¶ 22, 384 P.3d 213 (citation omitted).
    ¶34 The Cove wants to challenge the Service District’s ability to
use the Development Agreement to defend itself against claims the
Cove brought against it. And we sometimes speak of a party’s ability
to enforce a contract as “standing” to enforce an agreement. See, e.g.,
Orlando Millenia, LC v. United Title Servs. of Utah, Inc., 2015 UT 55,
¶ 37, 355 P.3d 965 (“In contract law, a third party has standing to sue
if it is an intended, and not merely an incidental, beneficiary.”
(emphasis omitted)); Harper v. Great Salt Lake Council, Inc., 1999 UT
34, ¶ 20, 976 P.2d 1213 (“Harper has no standing to object to BSA and
Mt. Jordan’s modification of a term of the First Refusal Agreement
because he had no cognizable interest in that agreement.”); see also
Hillcrest Inv. v. Sandy City, 2010 UT App 201, ¶ 20, 238 P.3d 1067
(“[E]ven if Hillcrest had standing to enforce the Contract generally,
Hillcrest was not entitled to the relief it had requested . . . .”). But,
even if we were to decide that the Service District could not enforce
the Development Agreement, we would not lose subject matter
jurisdiction to adjudicate the claims the Cove brought against the
Service District.
    ¶35 Because the “standing” issue the Cove seeks to advance on
appeal does not implicate the species of standing that would deprive
this court of subject matter jurisdiction, the Cove needed to raise it

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below to preserve it. The Cove never argued that the Service District
could not rely on the Development Agreement, and that issue is
therefore not preserved for appeal.
        C. There Are Serious Questions About When Plain Error
             Can Be Asserted in Civil Cases. In Any Event,
                 the District Court Did Not Plainly Err
   ¶36 The Cove last argues that we ought to consider its
unpreserved issues because the district court committed plain error
when it dismissed the first cause of action. Before we turn to the
merits of the Cove’s contention, we pause to acknowledge a question
about a party’s ability to assert plain error in a civil matter that the
court of appeals expertly analyzed in Kelly v. Timber Lakes Prop.
Owners Ass’n, 2022 UT App 23, 507 P.3d 357.
    ¶37 The court of appeals considered if and when the plain error
doctrine should be applied in a civil case. To help answer this
question, the court of appeals traced the plain error doctrine’s
evolution. Id. ¶¶ 35–44. The court of appeals correctly noted that we
first applied the plain error doctrine in a capital case, State v.
Stenback, 2 P.2d 1050 (Utah 1931). Kelly, 2022 UT App 23, ¶ 35. The
Stenback court reasoned that in capital cases, the court “may and
should sua sponte consider manifest and prejudicial errors which are
neither assigned nor argued.” 2 P.2d at 1056. It concluded that “[a]n
error which is so manifest and so calculated to be prejudicial to the
rights of the defendant as was the refusal of the court to permit him
to testify as to whether he did or did not intend to kill the deceased
may not justly be brushed aside.” Id. at 1057.
    ¶38 A few years later, this court expanded the doctrine to include
“cases of grave and serious charged offenses[,] . . . convictions of
long terms of imprisonment, [and] cases involving the life and
liberty of the citizen.” State v. Cobo, 60 P.2d 952, 958 (Utah 1936),
criticized by State v. Mitchell, 278 P.2d 618 (Utah 1955). In such cases,
we claimed for ourselves the power to intervene “when palpable
error is made to appear on the face of the record and to the manifest
prejudice of the accused” even when the issue has not been
preserved. Id.
   ¶39 Although the doctrine was initially cabined to serious crimes
and significant punishments, it eventually expanded to include all
criminal offenses. See, e.g., State v. Waid, 67 P.2d 647, 652 (Utah 1937)
(holding that even a conviction of “simple assault” “entails the loss
of friends and the respect of fellows,” and therefore the court
“should notice the error”). And in the past seventy-plus years, we
have applied the plain error doctrine a number of times to a wide
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            THE COVE AT LITTLE VALLEY v. TRAVERSE RIDGE
                     SPECIAL SERVICE DISTRICT
                          Opinion of the Court

variety of criminal offenses. See, e.g., State v. Verde, 770 P.2d 116, 117,
122–23 (Utah 1989) (applying the plain error doctrine to the
admission of prejudicial evidence in a case involving the sale of a
child); State v. Dunn, 850 P.2d 1201, 1208–09 (Utah 1993), (applying
the plain error doctrine to jury instructions in a manslaughter and
kidnapping case), abrogated on other grounds by State v. Silva, 2019 UT
36, 456 P.3d 718; State v. Ross, 2007 UT 89, ¶¶ 33, 40, 53, 174 P.3d 628,
(assessing whether plain error existed when a court failed to merge
an aggravated murder charge with an attempted aggravated murder
charge, impaneled an anonymous jury, and allowed potentially
prejudicial remarks in the prosecution’s closing statement), abrogated
by State v. Hummel, 2017 UT 19, 393 P.3d 314; State v. Marquina, 2020
UT 66, ¶¶ 1, 30–33, 478 P.3d 37 (analyzing whether a juror sleeping
during court proceedings constituted plain error in an aggravated
robbery case). Plain error is now firmly entrenched in our criminal
law jurisprudence.
    ¶40 In contrast to our willingness to employ plain error in
criminal cases, we have questioned whether it should apply in the
civil context. See In re J.A.L., 2022 UT 12, ¶ 12 n.3, 506 P.3d 606
(“[T]his court has not decided whether plain error applies in civil
cases.”); see also Utah Stream Access Coal. v. Orange St. Dev., 2017 UT
82, ¶ 14 n.2, 416 P.3d 553 (“[T]here is an ongoing debate about the
propriety of civil plain error review”). There is good reason to
question whether a party to a civil case should be able to address an
unpreserved error on appeal, even if it qualifies as obvious. As the
court of appeals explained, “the economic and property interests that
are typically the subject of civil cases are not as fundamental as the
liberty interests at stake in criminal cases.” Kelly, 2022 UT App 23,
¶ 42. Moreover, the availability of malpractice remedies against
attorneys who miss obvious arguments might be a fairer fix than
allowing a party to raise an unpreserved error on appeal and drag an
opposing party, who may bear no responsibility for the error,
through the cost of an appeal and renewed district court
proceedings.5

_____________________________________________________________
   5 That having been said, care must be taken to not paint with too
broad a brush. There may be civil cases where the interests
implicated —parental termination cases, for example – present a
compelling argument for plain error review. See Kelly, 2022 UT App
23, ¶ 42 n.10. In these cases, a malpractice action and the potential for
                                                         (continued . . .)
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                         Opinion of the Court

    ¶41 Despite these apparent misgivings, we, and the court of
appeals, have nevertheless applied plain error in some civil cases.
See, e.g., Utah Stream Access Coal., 2017 UT 82, ¶ 14; Heslop v. Bank of
Utah, 839 P.2d 828, 839–40 (Utah 1992); Classic Cabinets, Inc. v. All Am.
Life Ins. Co., 1999 UT App 88, ¶ 17, 978 P.2d 465; Larsen v. Johnson, 958
P.2d 953, 956 (Utah Ct. App. 1998); Davis v. Grand Cnty. Serv. Area,
905 P.2d 888, 892–94 (Utah Ct. App. 1995), abrogated on other grounds
by Gillett v. Price, 2006 UT 24, 135 P.3d 861. But, as the court of
appeals observed, it appears to have been applied in cases in which
the parties did not question the validity of the doctrine’s application
in the civil context. Kelly, 2022 UT App 23, ¶ 40.
    ¶42 Although we have expressed skepticism about plain error
review of unpreserved issues in civil cases, elements of the plain
error doctrine have been codified into the rules that apply in civil
cases. See Kelly, 2022 UT App 23, ¶ 37. Utah Rule of Evidence 103
allows a court to “take notice of a plain error [within an evidentiary
holding] affecting a substantial right, even if the claim of error was
not properly preserved.” UTAH R. EVID. 103(e). And Utah Rule of
Civil Procedure 51 instructs that jury instructions can be deemed
error even without a voiced objection if the instruction would lead to
“a manifest injustice.” UTAH R. CIV. P. 51(f).
   ¶43 In Kelly, the court of appeals ultimately concluded that
“unless expressly authorized by rule, the plain error exception to our
preservation rule does not properly extend to ordinary civil
appeals.” Kelly, 2022 UT App 23, ¶ 41 (citations omitted). We have
not been asked to review that conclusion. As we noted above, there
may be categories of civil cases where the interests at stake and the
inadequacy of money damages militate in favor of plain error
review.
   ¶44 The parties in this case do not address the viability of the
plain error exception in civil cases. This places us in a
disadvantageous position to make broad pronouncements about the
doctrine. This means that we once again voice our skepticism about
whether the plain error exception to our preservation rule should be
invoked in many civil cases unless expressly authorized by rule. And
we leave the broader question for a case in which it is briefed and
before us. This also means that we once again find ourselves saying

economic damages will not be an adequate remedy for a plain error
that results in a loss of parental rights.

                                   13
            THE COVE AT LITTLE VALLEY v. TRAVERSE RIDGE
                     SPECIAL SERVICE DISTRICT
                         Opinion of the Court

that even if plain error is a thing in civil cases like this one, the
specific complained-of error fails to meet the definition of plain.
    ¶45 The Cove argues that the lower court’s decision is “contrary
to the established legal authority [the Cove] cites regarding a conflict
between a city ordinance and a state statute.” It further argues that
this error should have been obvious to the trial court because the
cases the Cove cites in its briefing to us are “‘clear’ and were ‘plainly
settled’ at the time of the district court’s decision in September 2020.”
Stated differently, the Cove contends that the district court plainly
erred because it should have known, without any party bringing the
issue to its attention, that the Utah Special Service District preempted
a provision of Draper City Code.
    ¶46 “For an error to be obvious to the trial court, the party
arguing for the exception to preservation must show that the law
governing the error was clear or plainly settled at the time the
alleged error was made.” Johnson, 2017 UT 76, ¶ 21 (citations
omitted) (internal quotation marks omitted).
    ¶47 The Cove cites case law which demonstrates that local
ordinances cannot conflict with state law. See S. Salt Lake City v.
Maese, 2019 UT 58, ¶ 75, 450 P.3d 1092 (“City ordinances can
criminalize the same conduct as a state statute, so long as the
ordinances do not conflict with a state statute.”); Hansen v. Eyre, 2005
UT 29, ¶ 15, 116 P.3d 290 (“It is well established that, where a city
ordinance is in conflict with a state statute, the ordinance is invalid at
its inception.”). That is true as far as it goes. What the Cove has not
demonstrated is that it would have been plain error for the district
court to fail to realize that Draper City Code conflicts with the Utah
Special Service Act. Indeed, the Cove has failed to meet its burden of
even demonstrating the correctness of the legal conclusion
embedded in that argument.
    ¶48 The Cove did not preserve the issues it wants to raise on
appeal to argue that the district court erred when it dismissed the
first cause of action. No exception to the preservation rule exists that
would allow the Cove to nevertheless assert them. Without a viable
challenge to the district court’s decision to dismiss the first cause of
action, we affirm the district court’s grant of the motion to dismiss
that claim.

                                   14
                          Cite as: 2022 UT 23
                         Opinion of the Court

        II. THE DISTRICT COURT ERRED WHEN IT DISMISSED THE
                    COVE’S SECOND CAUSE OF ACTION
   ¶49 The district court granted the Service District’s motion to
dismiss the Cove’s second cause of action requesting a refund of the
monies paid to the Service District. By way of reminder, the Cove
asserts that the monies its members pay to the Service District are
best characterized as a service fee. The Service District argued in its
motion to dismiss that the assessment was a tax. That matters
because, as the Service District argues, if the assessment is a tax, it
must be challenged under the Utah Tax Act. That is something the
Cove did not do. The district court granted the motion because it
concluded that this court had considered this precise question and
determined that the levy is a tax in Mawhinney v. City of Draper, 2014
UT 54, 342 P.3d 262.6
   ¶50 The Cove argues that this was error because the part of
Mawhinney the district court relied on is dicta. According to the
Cove, this court simply took it as a given that the levy was a tax
because that is what the parties called it and the tax/fee question
was not at issue in that case. The Cove contends that as a result, this
court never analyzed whether the monies paid to the Service District
were a tax or a service fee. We agree.
   ¶51 In Mawhinney, a number of Draper residents, upset that the
Draper City Council had imposed the levy, gathered enough
signatures to refer the question of whether the City should collect the
levy to the voters. Id. ¶ 4. Draper City refused to put the issue on the
ballot, reasoning that the imposition of the fee was a non-referable
administrative action. Id. The residents filed a petition for
extraordinary relief. Id. ¶¶ 4–6.
    ¶52 The referendum proponents appeared pro se in front of this
court. Id. ¶ 1. In their briefing and arguments, the proponents
characterized the levy as a tax, and argued that the City had wielded
legislative power when it voted on the resolution approving that tax.
Id. ¶¶ 7, 15. Draper City also called the levy a tax but argued that the
levy was nothing more than the administration of an already
approved tax. Id. ¶ 2. Draper City argued that because
administrative actions are not the proper subject of referenda, the

_____________________________________________________________
   6  To the extent it is not clear, we underscore that the funding
mechanism Mawhinney considered is the same funding mechanism
at issue in this matter.

                                  15
            THE COVE AT LITTLE VALLEY v. TRAVERSE RIDGE
                     SPECIAL SERVICE DISTRICT
                         Opinion of the Court

citizens had no right or ability to place the issue to the voters. Id. We
ultimately held that the resolution approving the levy was the
product of legislative power and subject to referendum. Id. ¶ 15.
   ¶53 The district court read this and concluded that we had
definitively determined that the assessment was a tax. But we did
not. A careful read of Mawhinney reveals that we never questioned
the way the parties had characterized the levy. Nor did we need to
because the distinction between a tax and a fee was not necessary to
the outcome of the case. This means that our use of the word “tax”
was dicta and does not control the outcome of the Cove’s motion to
dismiss.
   ¶54 The distinction between a holding and dictum depends on
“whether the solution of the particular point was more or less
necessary to determining the issues involved in the case.” BRYAN A.
GARNER ET AL., THE LAW OF JUDICIAL PRECEDENT 51 (2016).
    ¶55 The issue presented in Mawhinney centered on whether the
funding mechanism—whatever label we might put on it—was
legislative or administrative. The answer to that question would not
have been impacted by whether Draper City called it a tax or a
service fee. The parties never asked us to consider whether the funds
were generated by taxes or fees. We simply followed the parties’
lead in calling it a tax and the district court, quite understandably,
followed ours. Unfortunately, that resulted in the district court
erring here when it concluded that the Service District is funded by a
tax as a matter of law.7
   ¶56 We have not yet had the opportunity to consider whether the
Service District is funded by taxes or fees. It is therefore an open

_____________________________________________________________
   7  We note that the district court also suggested that its conclusion
that “the levy is, in fact, a tax is further supported or confirmed by
the language in section 4 of [Resolution 03-05], which makes clear
that the territory annexed by the resolution shall be subject to
taxation [for] purposes of the Special Service District.” However,
nothing in the district court’s order or its language at the hearing on
the motion to dismiss suggests that this was an independent reason
for finding that the Service District was funded by a tax. Instead, it
was merely presented as a fact that reaffirmed the district court’s
reading of Mawhinney. We offer no opinion on the district court’s
reading of Resolution 03-05.

                                   16
                          Cite as: 2022 UT 23
                         Opinion of the Court

question that the Cove is entitled to litigate before the district court.
We therefore reverse and remand.
                           CONCLUSION
    ¶57 The Cove at Little Valley failed to preserve the issues it
wanted to raise to argue that the district court erred in dismissing its
first cause of action. We therefore have no basis to overturn the
district court’s conclusion. We agree, however, with the Cove that
the district court erred when it relied on Mawhinney to find that the
Service District was funded by a tax. Mawhinney does not answer
that question and the court’s grant of the motion to dismiss was in
error. Accordingly, we affirm the district court’s dismissal of the
Cove’s first cause of action but reverse its dismissal of the second.
We remand the case for further proceedings.

                                   17