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Blackhawk Townhouses Owners Association Inc. v. J.S.

Court of Appeals of Utah

April 5, 2018

Blackhawk Townhouses Owners Association Inc., Appellee,
v.
J.S., Appellant.

          Second District Court, Ogden Department The Honorable W. Brent West No. 140901810

          Zachary C. Myers, Attorney for Appellant

          Richard W. Jones and Taylor R. Jones, Attorneys for Appellee

          Judge Michele M. Christiansen authored this Opinion, in which Judges David N. Mortensen and Diana Hagen concurred.

          CHRISTIANSEN, Judge

         ¶1 J.S. appeals from the district court's order denying her motion to set aside a judgment as void. J.S. contends that the judgment was void because, as an incompetent person without an appointed guardian, J.S. lacked notice of the suit. J.S. asserts that the plaintiff, Blackhawk Townhouses Owners Association Inc., had knowledge she was incompetent and should have been required to move for appointment of a guardian for her. We conclude that J.S. has failed to show clear error in the district court's findings that J.S. was not incompetent and that Blackhawk did not have sufficient knowledge of her impairments such that it should have instigated competency and guardianship proceedings. We therefore affirm.

         BACKGROUND

         ¶2 In 2002, J.S. bought a condominium in the Blackhawk Townhouses. Her ownership obligated her to pay assessments, or HOA fees, to the Blackhawk Townhouses Owners Association.

         ¶3 On March 14, 2014, Blackhawk brought suit against J.S., alleging that she had failed to pay HOA fees for a significant period of time resulting in arrears exceeding $7, 000. On April 2, 2014, Blackhawk served J.S. with the summons and complaint.

         ¶4 On April 8, 2014, J.S. sent a personally signed letter to Blackhawk claiming that she had suffered strokes and seizures, that she was "unable to communicate, " and that her estimated recovery time would be at least six weeks. J.S. attached a letter from a doctor explaining that J.S. was "unable to communicate verbally due to her complex neurologic diagnosis." On April 10, 2014, J.S. filed a request for continuance in the district court, indicating that she had suffered from strokes and seizures and that, "for me to regain my speech and memory it is estimated it will take six weeks in the rehabilitation unit of the hospital." Nevertheless, on April 15, 2014, J.S. filed a pro se answer. Like the April 8, 2014 letter and the April 10, 2014 continuance motion, J.S. signed the answer personally.

         ¶5 Approximately six weeks later, on June 4, 2014, Blackhawk filed a motion for summary judgment. On June 10, 2014, attorney J. Keith Henderson entered an appearance on behalf of J.S. However, Henderson did not file an amended answer or respond to the motion for summary judgment. On July 7, 2014, in part because no response had been received by the court, the district court granted the motion for summary judgment in favor of Blackhawk, awarding it a total of $19, 409.76, including late fees, interest, and attorney fees. Collection efforts ensued, resulting in a sheriff's sale of J.S.'s condominium on August 11, 2014.

         ¶6 On April 21, 2015, Henderson filed a motion to set aside the judgment against J.S. The motion sought "to set aside the final judgment entered by the court on June 17, 2011" and asked that "[J.S.] be permitted to file an answer." The motion asserted that "at all times during the pendency of this action [J.S.] was and is mentally incompetent and unable to understand the nature of the consequences of this case or of participating and aiding in a defense." The motion then stated that it was supported "by the accompanying Memorandum" but no memorandum was actually attached. Blackhawk opposed the motion, noting (1) the absence of a memorandum providing legal support, (2) that J.S. had already filed an answer, (3) that, since June 10, 2014, J.S. had been represented by counsel but had not raised a claim of incompetency, (4) that no documentation supporting J.S.'s claim of incompetency had been provided, (5) the non-existence of a June 17, 2011 judgment, and (6) that the motion to set aside had not been filed within a reasonable time as required by rule 60(b) of the Utah Rules of Civil Procedure. The court did not rule on the motion, apparently due to J.S.'s pending bankruptcy proceedings.

         ¶7 On December 2, 2015, attorney Zachary C. Myers filed an appearance on behalf of J.S. On January 14, 2016, he filed a second motion to set aside the judgment against J.S. on incompetency grounds. The main points in the motion were (1) that J.S. had been incompetent at the time the lawsuit was first filed, (2) that Blackhawk knew or should have known J.S. was incompetent, and (3) that Blackhawk had failed to provide valid notice of the lawsuit to J.S. because "'[n]otice to a person known to be an incompetent who is without the protection of a guardian does not' meet the Constitutional requirement of due process." (Quoting Covey v. Town of Somers, 351 U.S. 141, 146-147 (1956).)

         ¶8 The second motion to set aside was accompanied by an affidavit by H.B. In that affidavit, H.B. identified himself as J.S.'s partner. According to H.B., J.S. had suffered brain damage as a result of falling down a flight of stairs in 2008.[1] H.B. stated that he had prepared the letters and the answer signed by J.S. See infra ¶ 26 note 3. He also stated that he had filed a petition for guardianship of J.S. on August 6, 2014, and that the petition had been granted on April 22, 2015.

         ¶9 The district court held hearings on March 16, 2016, and April 14, 2016. At the hearings, J.S. argued that Blackhawk had notice of J.S.'s incompetency and therefore should have moved for appointment of a guardian. Blackhawk denied that it had such notice and argued that it was not required to move for appointment of a guardian for J.S. when J.S. had signed and filed responsive pleadings and was represented by counsel. The court heard testimony from H.B., Henderson, two members of Blackhawk's board of directors, and Matthew Koyle, an attorney who had negotiated with Blackhawk on J.S.'s behalf but whom J.S. had not been retained J.S. in any formal capacity.

         ¶10 On May 27, 2016, the court entered findings of fact and conclusions of law denying J.S.'s motion to set aside the judgment. The court found that H.B.'s testimony was "not believable or credible" and that "[n]o reliable facts or testimony were presented to the Court in support of a claim that [J.S.] was incompetent at the time the complaint was filed or the summary judgment was entered." It ruled that, because "[n]o Court determined [J.S.] was incompetent until April 22, 2015, " "[p]rior to that date it is presumed [J.S.] was legally competent." The court further found that there were "no facts or testimony to support a claim that Blackhawk knew or should have known that [J.S.] was incompetent at the time the complaint was filed or the summary judgment was entered." The court therefore ruled that Blackhawk did not have a duty to move for appointment of a guardian:

Blackhawk and it[s] legal representatives had no duty to take any action or act in behalf of [J.S.] or respond to concerns expressed about her claim of disability since Blackhawk and its legal representatives had no personal contact with her, had not met her, did not know her, did not represent her, had no reasonable ability to make any informed conclusions regarding her mental state, and only received vague and conflicting comments and communications about her mental state from those who personally knew her and dealt with her. The people who had information on her mental [state] took no legal action in her behalf in this matter. Rather, those who dealt with [J.S.] personally continued to represent her in this matter and to deal with Blackhawk in a manner that represented to Blackhawk that she was capable of participating in these proceedings in a competent manner.

         ¶11 Consequently, the court concluded that the judgment was not void and that neither motion to set aside the judgment was filed within a reasonable time, as required by rule 60(b) of the Utah Rules of Civil Procedure. J.S. appeals.

         ISSUES AND STANDARDS OF REVIEW

         Voidness

         ¶12 J.S. first contends that the district court erred by failing to set aside the judgment entered against her as void for lack of notice. See Utah R. Civ. P. 60(b)(4). J.S. asserts that she lacked notice of the proceedings against her because she was incompetent. She then argues that the district court should have found that Blackhawk knew of her incompetence and thus should have known that she had never received valid notice of the suit against her. J.S. asserts that this court "should review the record directly and determine whether the judgment is void, without giving any discretion to the District Court's findings of fact."

         ¶13 We disagree with the assertion that we may review the findings of fact for correctness. J.S. argues that the correctness standard applies based on her reading of Migliore v. Livingston Financial, LLC, 2015 UT 9, ¶ 25, 347 P.3d 394. Specifically, she draws support from our supreme court's statement that "the propriety of the jurisdictional determination, and hence the decision not to vacate, becomes a question of law upon which we do not defer to the district court." Id. (quotation simplified). J.S. also highlights the supreme court's discussion of the record evidence. See, e.g., id. ¶ 27 ("The record demonstrates that Mr. Migliore had actual notice of all of Livingston's claims[.] Mr. Migliore attached a copy of the summons and complaint to his motion[.]").

         ¶14 If we were to read Migliore in this manner, every party who loses a rule 60(b)(4) motion could, on appeal, have an appellate court substitute its cold-record assessment of witness credibility and conflicting evidence for that of the district court. Doing so would ignore the district court's privileged position to judge the credibility of witnesses and to weigh conflicting evidence. See Lunt v. Lance, 2008 UT App 192, ¶ 19, 186 P.3d 978; see also State v. Calliham, 2002 UT 86, ¶ 23, 55 P.3d 573 ("We review most evidentiary rulings and questions of fact with deference to the trial court based on the presumption that the trial judge, having personally observed the quality of the evidence, the tenor of the proceedings, and the demeanor of the parties, is in a better position to perceive the subtleties at issue than we can looking only at the cold record.") Making independent factual findings on appeal would improperly transform the nature of appellate review into an appellate trial.

         ¶15 Our review of Migliore reveals that the supreme court did not engage in such fact finding. The Migliore court indicated that after a judgment has been found void, the district court has no discretion as to the legal remedy: "the district court has no discretion with respect to a void judgment because the determination that a judgment is void implicates the court's jurisdiction." Migliore, 2015 UT 9, ¶ 25. But the supreme court did not substitute its own factual findings for those of the district court. While Migliore did discuss the record directly, it did so in the context of reviewing for clear error. See id. ¶ 27 (discussing the undisputed facts and concluding that "the evidence on the record clearly indicates that Mr. Migliore had notice").

         ¶16 We conclude that, even in the context of a rule 60(b)(4) challenge, the district court's purely factual findings are afforded deference. See C504750P LLC v. Baker, 2017 UT App 36, ¶ 7, 397 P.3d 599 (stating that, in reviewing the denial of a motion to set aside judgment for voidness, "[w]e review the court's underlying [factual] findings for clear error"). It is only with respect to the legal conclusion and remedy that the district court lacks discretion. See id. Accordingly, we review for clear error the factual findings of the district court, and we review for correctness both the court's legal conclusion regarding voidness that flows from those findings and the court's selection of an appropriate remedy.

         Evidentiary Error

         ¶17 J.S. also contends that the district court erred by "refusing to let a fact witness testify regarding the veracity of another witness's testimony." We review the legal questions underlying the admissibility of evidence for correctness and the district court's decision to admit or exclude evidence for an abuse of discretion. State v. Griffin, 2016 UT 33, ¶ 14, 384 P.3d 186.

         ANALYSIS

         I. Voidness as a Consequence of Incompetency

         ¶18 J.S. contends that the judgment was void because she did not receive effective notice of the suit. Specifically, she asserts that her receipt of the summons and complaint did not impart effective notice to her, because, as an incompetent ...


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