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CBS Enterprises LLC v. Sorenson

Court of Appeals of Utah

January 5, 2018

CBS Enterprises LLC and Allen Myers, Appellants,
Larry T. Sorenson, Appellee.

         Third District Court, Salt Lake Department The Honorable Robert P. Faust No. 150903522

          Daniel E. Witte, Attorney for Appellants

          Larry T. Sorenson, Appellee Pro Se

          Judge David N. Mortensen authored this Opinion, in which Judges Gregory K. Orme and Michele M. Christiansen concurred.



         ¶1 Appellants CBS Enterprises LLC and Allen Myers (collectively, CBS) filed suit against Larry T. Sorensen in the district court, alleging that they were part owners of a Chinese jade artifact valued at $34 million. After initially staying the proceedings to allow for resolution of a related federal case, the district court dismissed CBS's complaint for failure to prosecute. CBS now appeals, arguing that the dismissal was an abuse of the district court's discretion. Because we agree, we reverse and remand.

         ¶2 Most of the details of the underlying dispute in this case are irrelevant to the appeal. What is important, however, is the procedural path the case has followed. In May of 2015, CBS filed its complaint in the district court. Exactly three months later, the parties entered-and the district court approved-a stipulation regarding the security and storage of the jade artifact. Part of that stipulation was an order "that all litigation deadlines shall be held in abeyance."

         ¶3 Roughly a year after the district court proceedings had been stayed, the court provided notice to the parties of its sua sponte motion to dismiss the case "for lack of prosecution pursuant to Rule 4-103" of the Utah Rules of Judicial Administration. The court stated, "Unless a written statement is received by the court within 20 days of this notice showing good cause why this should not be dismissed, the Court will dismiss without further notice." CBS accordingly filed a written objection approximately one week later. Counsel for CBS followed up with the district court by telephone to ensure that the court had received the objection. Counsel also asked if a hearing had been or would be scheduled. According to CBS, its counsel was told that "no hearing was currently scheduled and that one might never be scheduled (and indeed, was likely not to be scheduled), " but that counsel would be contacted if that changed.

         ¶4 In its objection, CBS argued that it had "good cause why this case should not be dismissed" and that "aggressive litigation is occurring to continue to prosecute the matter." Specifically, CBS explained that the jade artifact had been "held as evidence in a federal criminal investigation until August 2016"-the same month the district court moved to dismiss the case for failure to prosecute. It provided the district court with the names and case numbers of federal cases that implicated the artifact. The objection concluded with a request that, if the district court did "not summarily agree that good cause has been shown, " the court set "a hearing to further discuss the situation."

         ¶5 The district court obliged, sending out notice on September 22, 2016, of a hearing scheduled for less than one week later-September 28, 2016. On September 28, no parties were present when the court called the case and it thus "order[ed] this case dismissed for lack of prosecution and for [the] parties['] failure to appear to update the court on the case."

         ¶6 Three days later, on October 1, 2016, CBS filed a "motion for reconsideration to alter or amend judgment and to vacate or clarify dismissal." In it, CBS alleged that no party had received actual notice of the September 28 hearing. And CBS reiterated its reasons why the case should not have been dismissed, including that "litigation is indeed being actively and properly prosecuted."

         ¶7 But beyond simply rehashing the reasoning set out in its objection, CBS also detailed apparent flaws in the notice and hearing process, explaining that counsel for CBS had not received actual notice of either the hearing or its resolution until he engaged in his standard periodic review of "the dockets for his various cases on Greenfiling just as a precaution."[1] CBS argued that its failure to appear at the hearing was attributable to mistake, inadvertence, or excusable neglect, citing rule 60(b)(1) of the Utah Rules of Civil Procedure.

         ¶8 Without addressing CBS's rule 60(b) argument or alternative request for clarification, the district court "denie[d] the Motion to Reconsider because there is no such Motion per the Rules of Civil Procedure." But rather than leave its order at that, the court expounded:

Further, on August 31, 2016 a Notice of Intent to Dismiss was given to Plaintiff, to which an objection was filed on September 8th 2016. The Court having read the objection still had concerns regarding the content of the objection, so it set a[n in-]court hearing on the matter and provided notice to counsel of the hearing at the email address on file with the Court and at which counsel had received previous[] notices. Counsel failed to appear at the in[-]court hearing and the case was dismissed. Therefore, the Court ...

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