Elite Legacy Corporation, Aspenwood Real Estate Corporation, and Hilary Wing, Appellees,
Charles Schvaneveldt, Appellant.
District Court, Ogden Department The Honorable Noel S. Hyde
The Honorable Michael D. Lyon No. 060906802
J. Porter and Phillip E. Lowry, Attorneys for Appellant
Miles LeBaron and Dallin T. Morrow, Attorneys for Appellees
J. Frederic Voros Jr. authored this Opinion, in which Judges
Gregory K. Orme and Kate A. Toomey concurred.
In this opinion we address two of four appeals arising from a
single lawsuit over a failed real estate deal. The lawsuit involves a dispute over a real
estate sales commission. On one hand are a real estate
brokerage and related individuals (Plaintiffs); on the other,
the property sellers.
In case 20140978-CA, appellant Charles Schvaneveldt, one of
the sellers, challenges the denial of his motion under rule
60(b) of the Utah Rules of Civil Procedure. That motion
sought to vacate the judgment below on the ground that
Plaintiffs lacked standing to bring or maintain the action.
In case 20130746-CA, Schvaneveldt challenges Plaintiffs'
standing, the trial court's ruling that Plaintiffs earned
the commission, and the trial court's denial of his
summary judgment motion seeking to avoid personal liability
for the commission. We affirm on all issues in both appeals.
Because of the case's complicated record and lengthy
history, we begin by identifying the relevant parties and
non-parties on appeal.
Plaintiffs are all related to a company originally known as
Aspenwood Real Estate Corporation. Aspenwood was a real
estate brokerage company doing business as "Re/Max
Elite." Hilary "Skip" Wing and others founded
Aspenwood, and Wing at times acted as its principal broker.
Tim Shea worked for Aspenwood as a real estate agent. Elite
Legacy Corporation has since subsumed Aspenwood. We refer to
these parties collectively as Plaintiffs.
The defendants are all related to the property sellers.
Charles "Chuck" Schvaneveldt is the sole member of
Still Standing Stable LLC (Still Standing). Cathy Code is
Schvaneveldt's wife. Still Standing owned the property in
question and, Schvaneveldt claims, contracted with Shea in
the For Sale By Owner Agreement. For ease of reference-though
not precisely accurate-we refer to Code, Schvaneveldt, and
Still Standing collectively as Sellers.
of Aspenwood and Re/Max Elite
In 2004, Wing and Dale Quinlan-at that time both licensed
principal brokers-together with other individuals bought a
real estate brokerage called Aspenwood Real Estate
Corporation. To align their new brokerage with the national
Re/Max real estate franchise, Quinlan submitted a "DBA
application" and registered the assumed name
"Re/Max Elite" with the Utah Division of
Corporations and Commercial Code (the Division). Quinlan
listed himself as the registered agent and checked a box
indicating that he-not Aspenwood-was the
"applicant/owner" of the assumed name. Quinlan,
Wing, and the other owners appear to have jointly operated
the Aspenwood brokerage under the name Re/Max Elite until
July 2005, when Quinlan surrendered his broker license.
Although Quinlan remained listed as Re/Max Elite's
registered agent, he no longer played any role in the
management of Aspenwood. Instead, Wing assumed management of
Aspenwood. Aspenwood continued to conduct business under the
assumed name Re/Max Elite.
In March 2006 the Division transferred the Re/Max Elite
assumed name from Quinlan to Aspenwood. It did so based on a
transfer letter from Quinlan. The parties disagree as to
whether Quinlan's signature on the letter is authentic.
Plaintiffs maintain that Quinlan made the change. They rely
on the declaration of a company officer stating that
"Dale Quinlan . . . was tasked by the [Aspenwood] Board
of Directors to . . . (1) ensur[e] that Aspenwood, and not
Dale Quinlan only, owned the dba RE/MAX Elite . . . and (2)
mak[e] Shane Thorpe the registered agent." Sellers
maintain that Quinlan's signature on the letter was
forged. They rely on a forensic report finding that "it
is highly probable" that the transfer letter was a
cut-and-paste forgery. The Division later invalidated the
In 1998, Still Standing purchased 170 acres of property in
Weber County (the Property) from the State of Utah School and
Institutional Trust Lands Administration (SITLA). Still
Standing purchased the Property with notice from SITLA that
"there is likely no access" and that SITLA was
"not guaranteeing access to the property." Four
years later, Still Standing sued three of the Property's
adjoining landowners in an attempt to gain access across the
landowners' parcels, which separated the Property from
the nearest public road. Still Standing lost the lawsuit and
was unable to secure road access to the
After the lawsuit, Still Standing purchased an unrelated
five-acre strip of property located on the opposite side of
the public road (the Strip). Although the Strip bordered the
Property and contained an easement, that easement did not
connect to any public road and thus did not provide access to
the Property. During the underlying litigation, at least two
title insurance companies-including one hired by
Sellers-examined the Property, but no title company was
willing to issue a policy insuring access.
FSBO and the REPC
In January 2006 Cathy Code advertised the Property for sale
by owner in a local newspaper. Tim Shea, a real estate agent
employed by Aspenwood, expressed interest on behalf of a
buyer. After visiting the Property with Schvaneveldt and
Code, Shea sent Sellers a For Sale by Owner Commission
Agreement and Agency Disclosure Agreement (the FSBO) and, on
behalf of potential buyers (Buyers), sent Sellers the first
Real Estate Purchase Contract (the First REPC).
Both contracts were drafted using standard printed forms.
Sellers submitted a counteroffer to the First REPC. Sellers
signed the FSBO and sent it back to Shea. The two-page FSBO
listed "Re/Max Elite (Layton Branch)" as the
"company"; "Tim Shea" as the authorized
agent for the company; and "Chuck and Cathy Code"
as "the seller." Shea signed the FSBO above the
"company" line, and Code signed the FSBO above the
"Sellers' Signature" line. Among other
provisions, the FSBO contained a brokerage-fee clause, a
seller-disclosures clause, an attorney-fee clause, and an
This litigation centers on the FSBO's brokerage-fee
clause. That clause sets forth the terms of the real estate
2. BROKERAGE FEE. The Seller agrees to pay
the Company, irrespective of agency relationship(s), as
compensation for services, a Brokerage Fee in the amount of $
or 3% of the acquisition price of the Property, if the Seller
accepts an offer from Emmett Warren and or Assigns (the
"Buyer"), or anyone acting on the Buyer's
behalf, to purchase or exchange the Property. The Seller
agrees that the Brokerage Fee shall be due and payable, from
the proceeds of the Seller, on the date of recording of
closing documents for the purchase or exchange of the
Property by the Buyer or anyone acting on the Buyer's
behalf. If the sale or exchange is prevented by default of
the Seller, the Brokerage Fee shall immediately be due and
payable to the Company.
Sellers' counteroffer to the First REPC lapsed, Shea
forwarded to Sellers a second offer in the form of another
Real Estate Purchase Contract-the REPC relevant to this
appeal (the REPC). Schvaneveldt accepted the second offer by
signing and returning the REPC to Shea. Schvaneveldt checked
the "ACCEPTANCE OF OFFER TO PURCHASE" box, signed
his name above the "Sellers' Signature" line,
and printed his name above the "Sellers' Name
(PLEASE PRINT)" line. The REPC required Buyers to deposit $25,
000 in earnest money. It required Sellers to "convey
good and marketable title to Buyer[s] at Closing by general
warranty deed." And it imposed a 15-day
seller-disclosure deadline, a 60-day due-diligence deadline,
and a 90-day settlement deadline ahead of closing.
Initially, Buyers and Sellers each fulfilled their REPC
obligations. Buyers deposited $25, 000 earnest money with
Aspenwood, and Sellers made the required disclosures. In the
disclosures, Sellers admitted that the Property did not have
access from a public road, but stated that there was
"direct access to the Property through . . . [a] Private
Easement." As the closing date approached, Buyers became
increasingly concerned about the lack of insurable access to
the Property. But they did not object to the seller
disclosures during the 60-day due-diligence window.
Before closing, Sellers' attorney called Buyers'
attorney to inform him that Sellers would be conveying the
Property by special warranty deed rather than by general
warranty deed; Sellers' escrow and closing instructions
also specified that the conveyance would be by special
warranty deed. Buyers' attorney responded that a special
warranty deed "might be okay if I can get a title policy
that's going to guarantee [Buyers] access." But by
the time of closing, no title insurance company- including
one hired by Sellers-was willing to offer a policy insuring
access to the Property. Buyers did not appear at closing.
After the deal fell through, Re/Max Elite brought an
interpleader action to determine who was entitled to the
earnest money it was holding. Re/Max Elite then filed a
cross-complaint seeking a sales commission from Still
Standing-and later, Schvaneveldt and Code-under the
FSBO's brokerage-fee provision. Sellers counterclaimed.
Sellers argued-in eight pretrial motions-that no named
plaintiff had standing to sue. Sellers filed six motions
under the Assumed Name Statute and two motions under the Real
Estate Licensing and Practices Act. In each motion,
Sellers' central argument asserted that only Re/Max
Elite's principal broker, Wing-and not its agent, Shea-
could sue to recover the commission under Utah law. In
support, Sellers submitted a summary judgment motion
asserting that Wing was Re/Max Elite's principal broker.
In response, Aspenwood, Elite Legacy, and Wing joined Re/Max
Elite in the action as additional plaintiffs to the lawsuit
to cure any alleged standing deficiency. After Plaintiffs
added Wing, Sellers abandoned their standing arguments until
Both parties filed a flurry of additional pretrial motions.
In February 2010 Schvaneveldt moved for summary judgment,
seeking a ruling that he could not be personally liable for
the sales commission. Schvaneveldt asserted that he was
involved in the sale only as a representative for Still
Standing. He was not personally liable, he argued, because
the blank line on the REPC reserved for the property name was
filled in with the words "Land LLC Still Standing
Stables." Plaintiffs opposed the motion and argued that
Schvaneveldt was personally liable because he signed the REPC
and because the FSBO listed him (along with Code) as a
seller. The court denied Schvaneveldt's motion because
the FSBO listed Schvaneveldt-not Still Standing-as the
In March 2010, Plaintiffs moved for partial summary judgment,
seeking a ruling that Plaintiffs had earned a commission
under the FSBO as a matter of law. Plaintiffs argued that
Sellers became obligated to pay a commission the moment
Sellers accepted an offer-the words used by the FSBO. And
Sellers accepted an offer, Plaintiffs argued, as soon as they
signed the REPC with Buyers. Sellers responded that
Plaintiffs had not brought a "ready, willing, and
able" buyer, that the sale was to be a cash transaction,
and that Shea had altered the REPC after signing to conceal
the deal's cash transaction status. The trial court
granted the motion, ruling that Plaintiffs had earned a
commission because Sellers had accepted an offer from Buyers.
The court explained that any alleged changes to the REPC were
a red herring.
In February 2011 Plaintiffs again moved for summary judgment
on the commission claim and on all of Sellers'
counterclaims. In March 2011 Still Standing filed a
cross-motion for summary judgment, alleging that a breach of
Plaintiffs' fiduciary duties had caused the sale to fail.
The trial court heard oral arguments on the motions. The
court first ruled that the sale failed due to Sellers'
failure to guarantee Buyers' access to the Property by
providing a general warranty deed or other assurance of
[I]t is undisputed that the lack of a guaranteed access was
the sole reason . . . that the transaction failed. . . . [I]t
strains credulity to think that somebody would fork over four
million [dollars] without a general warranty deed or at least
some kind of a guarantee under a special warranty deed that
there would be an access.
light of this ruling, the trial court dismissed Still
Standing's fiduciary-duty claims against Plaintiffs on
the ground that Sellers' refusal to convey by general
warranty deed-prompted by concerns about access and not any
breach of fiduciary duty- caused the deal to fail.
After the trial court dismissed the fiduciary-duty claims and
ruled that Plaintiffs had earned the commission, the only
question left for trial was which party was responsible to
pay that commission.
In a pretrial hearing with both sides present, the trial
court suggested that Still Standing could not be liable for
the commission and thus should be dismissed to avoid
confusing the jury. Plaintiffs agreed to release Still
Standing so long as liability would be determined between
Schvaneveldt and Code at trial. The trial court proposed a
jury instruction stating that Still Standing was not liable
and that the jury must look only to Schvaneveldt and Code for
liability. Schvaneveldt and Code did not object to this
instruction. Before agreeing to Still Standing's
dismissal, Plaintiffs reiterated that they would accept the
instruction only if Schvaneveldt and Code would agree not to
argue that Still Standing was the liable party. Again,
Schvaneveldt and Code did not object.
Trial proceeded and Schvaneveldt and Code did not mention
Still Standing, with one exception: Schvaneveldt argued that
he had signed "Member" next to his name on the
REPC, indicating that he signed in a representative capacity
for Still Standing. When Plaintiffs objected, the court
suggested bringing Still Standing back into the case.
Schvaneveldt's counsel proposed instructing the jury to
disregard the testimony.Plaintiffs agreed to Schvaneveldt's
solution, and the court instructed the jury accordingly. At
the close of evidence, Schvaneveldt and Code both moved for a
directed verdict; the court granted Code's motion but
denied Schvaneveldt's. This ruling left Schvaneveldt as
the only remaining potentially liable party. The jury entered
a verdict against Schvaneveldt, awarding damages of $30, 000.
Plaintiffs moved for a new trial, arguing that the damage
award was inadequate because it did not amount to the 3%
commission the court had previously ruled Plaintiffs had
earned. Rather than granting a new trial, the court increased
the judgment to $130, 875-3% of the REPC sales price. The
court also awarded Plaintiffs attorney fees and interest. The
court entered a total judgment in the amount of $362, 485.96
against Schvaneveldt. Schvaneveldt also moved for a new trial
on multiple grounds, including that "[Schvaneveldt]
should have been allowed to raise the misconduct of Re/Max
and Tim Shea, " that "Tim Shea's lawyer
violated [Schvaneveldt's] attorney-client privilege,
" and "cumulative errors." The trial court
denied the motion on all grounds.
Litigation Concerning Plaintiff's Standing
In the months following trial, Schvaneveldt filed several
rule 60(b) motions. Each relied on
evidence that, Schvaneveldt argued, showed that the assumed
name Re/Max Elite was registered to Dale Quinlan, making him
the only person with standing to sue for the FSBO commission.
That evidence includes the following:
• documents from the Division showing that Quinlan had
registered the assumed name "Re/Max Elite" with
himself as ...