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C504750p LLC v. Baker

Court of Appeals of Utah

February 24, 2017

C504750P LLC, Appellee,
Staci Baker, Appellant.

         Fourth District Court, Provo Department The Honorable James R. Taylor No. 140401249

          Gregory N. Hoole, Attorney for Appellant

          Wm. Kelly Nash and Kimberly N. Baum, Attorneys for Appellee Judge Gregory K. Orme authored this Opinion, in which Judges Michele M. Christiansen and Kate A. Toomey concurred.


          ORME, Judge

         ¶1 Appellant Staci Baker challenges the district court's denial of her motion for relief from a default judgment. We affirm.

         ¶2 Baker purchased a forty percent interest in a parcel of land (the Property) for $5, 070 at a tax sale in 2013. The other sixty percent interest in the Property remained with its original owner. Approximately one year after Baker purchased her interest in the Property, the original owner entered a real estate purchase contract (the REPC) to sell the Property to C504750P LLC (C5). Under the REPC, C5 was to buy all of the Property, including Baker's interest, for $15, 000. See Utah Code Ann. § 59-2-1351.7 (LexisNexis 2015) (stating that the sale of property previously subject to a tax sale cannot be prevented by the tax sale purchaser if that purchaser owns less than forty-nine percent and will receive the greater of its purchase price plus twelve percent interest or its pro rata share of the sales price).

         ¶3 Shortly thereafter, Baker received a letter notifying her of her right to a pro rata share of the purchase price of the Property and inviting her to attend a closing for the Property where she would sign a quitclaim deed for her interest in exchange for forty percent of the $15, 000 purchase price-approximately an eighteen percent return on her investment. Baker's husband replied to the letter on her behalf, stating that Baker would not cooperate with the sale. In light of Baker's refusal to participate, C5 placed the $15, 000 in escrow, obtained a quitclaim deed from the original owner, and sued Baker for specific performance under the REPC.

         ¶4 After filing its complaint, C5 began its efforts to serve Baker with process. Over an eighteen-day period, C5 repeatedly tried to serve Baker at her last known address, where the previous letter had been sent. On five occasions-on varying days of the week and at different times each day-a process server (Server) attempted personal service at Baker's residence. During these attempts, Server saw people in the house and cars in the driveway, but no one ever answered the door.[1] On one occasion, Server even saw a man working in the home's office and made eye contact with him, but after Server knocked and no one answered, Server saw that the blinds to the office had been closed. Server also spoke with several neighbors, all of whom told him that Baker resided at the house. On another occasion, Server left his business card so that Baker could contact him, but she did not. Meanwhile, a paralegal who worked for C5's counsel did an electronic address search to verify that Baker's last known address was still this address and mailed a certified letter to Baker with return receipt requested. The letter was returned unclaimed. As a result of these many failed attempts at service, Server recommended that C5 seek permission to use an alternative method to serve Baker.

         ¶5 Following Server's advice, C5 requested approval from the district court to serve Baker through publication. See Utah R. Civ. P. 4(d)(5)(A). In support of its request, C5 submitted a declaration of nonservice from Server and a declaration from the paralegal regarding the certified letter. With regard to the request, the district court made the following findings of fact:

1. [Baker] has avoided personal service and there are no other means to personally serve [Baker].
2. The whereabouts of [Baker] are either unknown and cannot be ascertained through reasonable diligence, or there exists good cause to believe that [Baker is] avoiding service of process, and service by normal means is unreasonable and impracticable under the circumstances.

         The district court authorized C5's request, requiring publication on two occasions on consecutive weeks "in a newspaper of general circulation in Utah County, Utah." In accordance with the district court's order, C5 published its notice in The Daily Herald. Baker did not file an answer, and the district court entered default judgment against her. The judgment quieted title to the Property, obligated C5 to pay Baker her share of the proceeds, and awarded C5 its costs and fees-totaling $5, 126.20-to be deducted from Baker's share of the proceeds.

         ¶6 Notice of the judgment was then mailed to Baker's last known address. Shortly thereafter, the mailed notice having apparently reached her, Baker moved the court to set aside the judgment. Citing rule 60(b) of the Utah Rules of Civil Procedure, Baker claimed that the order allowing service through publication was void because C5 "failed to use reasonable efforts to serve" her. The district court denied that motion. Baker appeals, arguing that she was entitled to relief because she was not afforded due process, as she was not properly served prior to entry of the judgment; because the fee award in the judgment was not proper in that she was not a party to the contract containing the attorney fee provision; and because she has a meritorious defense to the underlying claims that entitles her to have the default judgment set aside.

         ¶7 "A district court has broad discretion to rule on a motion to set aside a default judgment under rule 60(b) of the Utah Rules of Civil Procedure, " so we generally review such a denial for an abuse of discretion. Menzies v. Galetka, 2006 UT 81, ¶ 54, 150 P.3d 480. But when considering whether a judgment is void, as Baker's argument suggests, we apply a heightened standard of review, affording "the district court . . . no discretion . . . because the determination that a judgment is void implicates the court's jurisdiction." Migliore v. Livingston Fin., LLC, 2015 UT 9, ΒΆ 25, 347 ...

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