Direct Appeal Seventh District, San Juan The Honorable Lyle
R. Anderson No. 140700016
G. Russell, Royce B. Covington, Jeffery A. Balls, Salt Lake
City, for appellee
C. Halls, Blanding, for appellant
Associate Chief Justice Lee authored the opinion of the
Court, in which Chief Justice Durrant, Justice Himonas,
Justice Pearce, and Judge Holmberg joined.
recused herself, Justice Durham does not participate herein;
District Court Judge Kent R. Holmberg sat.
Associate Chief Justice.
1 This case involves the same unstayed court order at issue
in 2DP Blanding, LLC v. Palmer, 2017 UT 62, ___P.3d
___. The order authorized a foreclosure sale of real
property. The sale was executed while the litigation was on
appeal. In this case, MAA Prospector purchased property
(Parcel 1) at the foreclosure sale. Unlike 2DP Blanding, MAA
Prospector had actual notice of Palmer's appeal of the
foreclosure order when it purchased the property. We are
asked whether such notice means that MAA Prospector took the
property subject to the outcome of the appeal. We answer this
question in the negative. We reaffirm our statement in
2DP Blanding that "an appellant who takes no
action to preserve his interests in property at issue on
appeal has no recourse against a lawful third-party
purchaser." 2DP Blanding, 2017 UT 62, ¶ 1.
And we accordingly affirm the district court's award of
summary judgment to MAA Prospector.
2 We also affirm the award of attorney fees to MAA
Prospector. Palmer raises credible statutory arguments for
reversal but ignores adverse controlling authority. And we
decline to overrule our precedent where Palmer has failed to
contend that it was wrongly decided or subject to being
3 This case is an offshoot of a lien dispute between Ray
Palmer and First National Bank. In July 2003, Palmer agreed
to sell two parcels of commercial real estate to JDJ
Holdings, Inc. JDJ obtained two loans to finance the
purchase-one from First National and one from Palmer. Both
loans were secured by trust deeds. First National recorded
its deed on December 5, 2013 and had first position. Palmer
recorded his deed on December 12, 2013 and had second
4 Due to a flaw in the initial loan approval, First National
was required to record a new deed after Palmer recorded his
deed. Before recording the new deed, First National got an
erroneous title report that failed to show the Palmer deed.
And despite having knowledge of Palmer's loan at its
inception, First National relied on the erroneous title
report and simply revoked its original deed and recorded the
new deed on March 8, 2004. The bank did not obtain a
subordination agreement from Palmer. The new deed accordingly
appeared to elevate Palmer's deed to first position. But
no one discovered this repositioning at the time.
5 Five years later, JDJ defaulted on both loans. Palmer and
First National both claimed that their deed was entitled to
senior position. The deed holders initiated legal proceedings
to settle the dispute, and the district court granted summary
judgment to First National. The court held that the bank was
entitled to equitable reinstatement of its original deed. It
also authorized First National to "exercise all rights
and remedies provided by its Trust Deed with respect to the
Property, " including proceeding with a foreclosure
6 Palmer appealed the court's decision on April 8, 2011.
He challenged the lien priority established by the district
court's order. But he did not formally seek or obtain a
stay of the order. And he did not file a lis pendens
on the property at any point during the litigation. On June
29, 2011, First National issued a Notice of Trustee's
Sale under its reinstated trust deed, and a trustee's
sale was held on August 8, 2011.
7 To this extent this case is procedurally identical to the
2DP Blanding case. See 2DP Blanding, LLC v.
Palmer, 2017 UT 62, ¶¶ 2-6, ___P.3d ___. Yet
there are two elements of this case that set it apart from
2DP Blanding. First, the trust deed between Palmer
and the original purchaser of Parcel 1, JDJ, authorized
Palmer to seek attorney fees from JDJ if it defaulted on the
loan and foreclosure proceedings were
necessary. Second, MAA Prospector purchased Parcel 1