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Fehr v. Stockton

Court of Appeals of Utah

July 6, 2018

Thompson E. Fehr, Appellant,
v.
John H. Stockton, Appellee.

          Second District Court, Ogden Department The Honorable Ernest W. Jones No. 150903545

          Thompson E. Fehr and John T. Anderson, Attorneys for Appellant

          Margaret H. Olson, Attorney for Appellee

          Judge Jill M. Pohlman authored this Opinion, in which Judge Diana Hagen concurred. Judge Gregory K. Orme concurred, with opinion.

          POHLMAN, Judge

         ¶1 Thompson E. Fehr appeals the district court's order dismissing with prejudice his complaint filed against John H. Stockton. Fehr also seeks review of the district court's judgment awarding attorney fees to Stockton. We reverse the dismissal, vacate the attorney fees award, and remand for further proceedings.

         BACKGROUND

         ¶2 Fehr alleges that he performed legal services for Stockton pursuant to an oral agreement between Fehr and Stockton's agent. Specifically, Fehr claims Stockton retained him on an hourly basis to protect Stockton's intellectual property through the filing and prosecution of several patent applications concerning a retractable hose extension for a vacuum. Fehr characterized his method of accounting as an "open account," whereby he would enter (1) debits on the account as he performed legal services and paid patent maintenance fees for Stockton, and (2) credits on the account as he received payments from Stockton or Stockton's agent. Fehr alleges that he performed legal services for Stockton "[b]eginning on or about January 7, 2003, and continuing through January 20, 2015," and that he "periodically provided [Stockton] invoices showing fees earned, costs advanced, and payments received." The district court reasonably inferred from these allegations that Fehr sent Stockton "periodic invoices from 2003-2015." See generally Hudgens v. Prosper, Inc., 2010 UT 68, ¶ 14, 243 P.3d 1275 (indicating that in ruling on a motion to dismiss, courts draw "all reasonable inferences [from the complaint's allegations] in the light most favorable to the plaintiff" (quotation simplified)).

         ¶3 In June 2015, Fehr sued Stockton to collect amounts he claims are due and owing under the parties' alleged oral agreement. He asserted a claim for breach of contract and alternative claims for quantum meruit.[1]

         ¶4 In response, Stockton moved to dismiss the complaint. He argued that Fehr's claim for breach of an oral contract was barred by the four-year statute of limitations applicable to oral contracts. Similarly, Stockton argued that the doctrine of laches barred Fehr's equitable claims. Stockton also argued that the parties' alleged oral agreement "is void under the statute of frauds" because, by its alleged terms, it could not be performed within one year. See Utah Code Ann. § 25-5-4(1)(a) (LexisNexis 2013). Finally, Stockton argued that Fehr brought the suit in bad faith and requested that the court award him attorney fees under Utah's bad faith attorney fees statute, Utah Code section 78B-5-825.

         ¶5 The district court granted Stockton's motion to dismiss with prejudice. It concluded that Fehr's complaint was time-barred because his arrangement with Stockton pursuant to the parties' alleged oral contract did "not meet the definition of [an] open account." The court further concluded, without discussion, that the complaint was "barred by the . . . statute of frauds." The court did not separately address Fehr's equitable claims or Stockton's arguments that the claims were barred by the laches doctrine.

         ¶6 After further briefing and in a separate order, the court granted Stockton's motion for bad faith attorney fees under section 78B-5-825. The court found that the case "was without merit, frivolous and had little or no weight in law or fact," and that Fehr "lacked subjective good faith in filing the case."

         ¶7 Fehr filed a timely notice of appeal, claiming error in the dismissal of his claims with prejudice and in the ...


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