Court Opinion

ID: 5137251
Source: CourtListenerOpinion
Date Created: 2021-12-21 14:38:00.289031+00
Date Added: 2024-06-11T08:24:01.283553
License: Public Domain

IN THE UTAH COURT OF APPEALS

                                    ‐‐‐‐ooOoo‐‐‐‐

Commonwealth Property Advocates,          )         MEMORANDUM DECISION
LLC,                                      )
                                          )            Case No. 20110367‐CA
      Plaintiff and Appellant,            )
                                          )
v.                                        )
                                          )                   FILED
JP Morgan Chase Bank, National            )                (April 26, 2012)
Association, and John Does of unknown     )
number,                                   )               2012 UT App 126
                                          )
      Defendants and Appellees.           )

                                         ‐‐‐‐‐

Third District, West Jordan Department, 100404018
The Honorable Andrew H. Stone

Attorneys:     E. Craig Smay, Salt Lake City, for Appellant
               James D. Gilson, Mark L. Callister, and Jennifer Ward, Salt Lake City,
               for Appellees

                                         ‐‐‐‐‐

Before Judges Voros, Orme, and Christiansen.

CHRISTIANSEN, Judge:
¶1      Commonwealth Property Advocates, LLC (Commonwealth) appeals the district
court’s grant of summary judgment in favor of JP Morgan Chase Bank (Chase).1 We
affirm.

¶2        The district court determined, Commonwealth has not properly challenged, and
the parties do not dispute that “Chase has possession of the endorsed‐in‐blank original
note.”2 “When indorsed in blank, an instrument becomes payable to bearer and may be
negotiated by transfer of possession alone until specially indorsed.” Utah Code Ann.
§ 70A‐3‐205(2) (2009). “If an instrument is payable to bearer, it may be negotiated by
transfer of possession alone.” Id. § 70A‐3‐201(2); see also id. § 70A‐3‐201 cmt. 1
(“Negotiation always requires a change in possession of the instrument because nobody
can be a holder without possessing the instrument, either directly or through an
agent.”). Furthermore, the holder of the note that is indorsed in blank is entitled to
enforce the note. See id. § 70A‐3‐301 (“‘Person entitled to enforce’ an instrument means[,
 inter alia,] the holder of the instrument . . . .”); id. § 70A‐1a‐201(u)(i) (“‘Holder’
means[, inter alia,] the person in possession of a negotiable instrument that is payable
. . . to bearer . . . .”). Because it is undisputed that Chase was in possession or held the
indorsed in blank note, as a matter of law Chase was entitled to enforce that note.

       1
        Throughout its brief, Commonwealth seems to confuse the standards the district
court would apply in resolving a motion to dismiss pursuant to rule 12(b)(6) and a
motion for summary judgment pursuant to rule 56 of the Utah Rules of Civil Procedure.
In considering a motion to dismiss for failure to state a claim pursuant to rule 12(b), it is
true that the trial court “must accept the factual allegations in the complaint as true and
consider all reasonable inferences to be drawn from those facts in a light most favorable
to the plaintiff.” Peterson v. Delta Air Lines, Inc., 2002 UT App 56, ¶ 2, 42 P.3d 1253
(internal quotation marks omitted). However, Commonwealth acknowledges that
Chase’s motion to dismiss was converted to a motion for summary judgment based
upon the evidence presented by Chase that was outside of the pleadings, and
Commonwealth has not challenged that conversion on appeal. To defend against
Chase’s motion then, Commonwealth could not rest upon the allegations it raised in the
complaint. Instead, Commonwealth was required to produce evidence demonstrating
that there were genuine factual issues that would preclude judgment being entered
against it. See Waddoups v. Amalgamated Sugar Co., 2002 UT 69, ¶ 31, 54 P.3d 1054.
       2
        We appreciate the thoroughness of the district court’s memorandum decision in
this case.

20110367‐CA                                   2
¶3       Commonwealth argues, without providing any legal support, that Chase could
not enforce the note because possession alone “does not define ownership of the debt.”
Commonwealth asserts that “[p]ossession may have been obtained by theft, or for a
purpose other than enforcement.” Not only is this an inaccurate statement of the law,
see id. § 70A‐3‐301 (“A person may be a person entitled to enforce the instrument even
though he is not the owner of the instrument or is in wrongful possession of the
instrument.”), but Commonwealth provided only unsupported, conclusory statements
in response to Chase’s summary judgment motion that fail to show the existence of a
genuine issue of fact, see Waddoups v. Amalgamated Sugar Co., 2002 UT 69, ¶ 31, 54 P.3d
1054 (“The nonmoving party may not rest upon the mere allegations or denials of his
pleading, but his response, by affidavits or as otherwise provided in this rule, must set
forth specific facts showing that there is a genuine issue for trial. The nonmoving party
must submit more than just conclusory assertions that an issue of material fact exists to
establish a genuine issue.” (citations and internal quotation marks omitted)).

¶4       Here, Commonwealth produced no evidence to support its accusation that Chase
had stolen the note or purchased the note for a purpose other than to enforce it. In fact,
the undisputed evidence demonstrated the opposite, i.e., that Chase had received the
indorsed‐in‐blank note when it purchased the assets of Washington Mutual from the
FDIC receiver. Thus, the district court did not err in granting summary judgment in
Chase’s favor. See Smith v. Four Corners Mental Health Ctr., Inc., 2003 UT 23, ¶ 40, 70
P.3d 904 (“‘[W]hen the moving party has presented evidence sufficient to support a
judgment in its favor, and the opposing party fails to submit contrary evidence, a trial
court is justified in concluding that no genuine issue of fact is present or would be at
trial.’” (citation omitted)); see also Waddoups, 2002 UT 69, ¶ 31.

¶5     In a related argument, Commonwealth asserts that the note could have been
“securitized”3 before it was sold and argues that it should have been allowed additional
discovery on this issue based on rule 56(f) of the Utah Rules of Civil Procedure. See
generally Utah R. Civ. P. 56(f). Because Commonwealth raises this argument for the first
time in its reply brief, we do not consider it. See Utah R. App. P. 24(c) (“Reply briefs

       3
        Securitize means “to consolidate (as mortgage loans) and sell to other investors
for resale to the public in the form of securities.” Merriam‐Webster Collegiate Dictionary
1123 (11th ed. 2003), available at
http://www.merriam‐webster.com/dictionary/securitization; see also Commonwealth Prop.
Advocates, LLC v. Mortgage Elec. Registration Sys., Inc., 2011 UT App 232, ¶ 3 n.2, 263 P.3d
397, cert. denied, 268 P.3d 192 (Utah 2011).

20110367‐CA                                  3
shall be limited to answering any new matter set forth in the opposing brief.”); Sanpete
Am., LLC v. Willardsen, 2011 UT 48, ¶ 64 n.14, 269 P.3d 118 (“‘[W]e will not consider
matters raised for the first time in [a party’s] reply brief.’” (alteration in original)
(citation omitted)).

¶6      Finally, Commonwealth mentions in its statement of facts contained in its
opening brief that “[t]here [wa]s no evidence in the record that anyone . . . took the
steps required by the notes to accelerate the loans.” However, other than a brief
statement in the summary of its argument, Commonwealth provides no legal or factual
analysis for this contention. Because this issue is inadequately briefed, we do not
address it. See Utah R. App. P. 24(a)(9) (setting forth briefing requirements); Allen v.
Friel, 2008 UT 56, ¶ 9, 194 P.3d 903 (“[A] brief is inadequate if it merely contains bald
citations to authority [without] development of that authority and reasoned analysis
based on that authority. An appellate court is not a depository in which [a party] may
dump the burden of argument and research.” (alterations in original) (citation and
internal quotation marks omitted)).

¶7    Affirmed.

____________________________________
Michele M. Christiansen, Judge

                                           ‐‐‐‐‐

¶8    WE CONCUR:

____________________________________
J. Frederic Voros Jr.,
Associate Presiding Judge

____________________________________
Gregory K. Orme, Judge

20110367‐CA                                 4