United States District Court, D. Utah
ORDER ADOPTING REPORT AND RECOMMENDATION
N. PARRISH UNITED STATES DISTRICT JUDGE
Jill N. Parrish The defendants moved to dismiss the complaint
filed by plaintiff Charles Schultz. [Docket 30]. Magistrate
Judge Furse issued a Report and Recommendation that this
court grant in part and deny in part the defendants'
motion. [Docket 49].
did not file an objection to the Report and Recommendation.
He therefore waived any argument that the Report and
Recommendation was in error. See United States v. One
Parcel of Real Prop., 73 F.3d 1057, 1060 (10th Cir.
1996). The court will decline to apply the waiver rule only
if “the interests of justice so dictate.”
Moore v. United States, 950 F.2d 656, 659 (10th Cir.
1991). The court has reviewed the portion of the Report and
Recommendation that concluded that some of the claims in this
action should be dismissed. The court determines that these
portions of the Report and Recommendation are not clearly
erroneous and finds that the interests of justice do not
warrant deviation from the waiver rule. The court, therefore,
ADOPTS these portions of the Report and Recommendation.
defendants have objected to the portion of the Report and
Recommendation in which Judge Furse concluded that the
seventeenth cause of action should not be dismissed. Because
the defendants filed an objection, the court “must
determine de novo” whether its objections have merit.
titles his seventeenth cause of action as being for
“Fraudulent Over Collection of Taxes, Demand for Refund
of Over Payment of Taxes, Theft by Deception and
Fraud.” In this cause of action, he alleges that the
Town of Daniel rezoned a piece of property he owned from
residential to agricultural but did not inform either him or
Wasatch County of the change. The county, therefore,
continued to tax Schultz at the higher residential rate and
not at the lower agricultural rate. Schultz essentially makes
two claims within this seventeenth cause of action: he seeks
a refund for the overpayment of taxes and he alleges that the
town committed a fraud that caused him to be overtaxed.
Town of Daniel moved to dismiss the seventeenth cause of
action, arguing that it was immune to suit and that the fraud
claim had not been pled with particularity. In the Report and
Recommendation, Judge Furse interpreted Schultz's fraud
claim to be for fraudulent nondisclosure and rejected both of
the town's arguments for dismissal.
Town of Daniel now objects to this portion of the Report and
Recommendation. First, the town raises a new argument. It
asserts that Schultz has not stated a claim for fraudulent
nondisclosure because it did not have a duty to disclose the
zoning change. “To prevail on a claim [for] fraudulent
nondisclosure, a plaintiff must prove by clear and convincing
evidence that (1) the defendant had a legal duty to
communicate information, (2) the defendant knew of
the information he failed to disclose, and (3) the
nondisclosed information was material.”
Anderson v. Kriser, 266 P.3d 819, 823 (Utah 2011)
(alteration in original) (citation omitted). Courts must
first analyze whether a duty to communicate information
exists. Yazd v. Woodside Homes Corp., 143 P.3d 283,
286 (Utah 2006). “A person who possesses important,
even vital, information of interest to another has no legal
duty to communicate the information where no relationship
between the parties exists.” Id. at 287.
Town of Daniel contends that it had no duty to inform either
the county or Schultz of the zoning change so that an
accurate tax could be assessed because Schultz is presumed to
know the law-including the proceedings of town zoning boards.
In support of this argument, the town cites In re
Adoption of B.Y., 356 P.3d 1215, 1222 (Utah 2015). In
that case, the Utah Supreme Court held that a biological
father could not complain about inadequate notice of the Utah
Adoption Act's requirements for an unmarried father to
establish his paternal rights because “he had
constructive notice of the content and applicability of the
terms of Utah law.”
the court agrees that individuals may not avoid laws of
general application by pleading ignorance, the Town of
Daniel's argument misapplies this well-accepted
principle. In this cause of action, Schultz is not attempting
to avoid the zoning change because he did not know about it.
Instead, he asserts that the town had a duty to disclose the
zoning change so that the county could correctly calculate
his property taxes. The court agrees that the town had a duty
to provide accurate information regarding Schultz's tax
burden. The Town of Daniel cannot, as Schultz alleges,
withhold this information with impunity in order to
fraudulently collect more taxes than are due. In short, the
court rejects the Town of Daniel's augment that it had no
duty to report correct property tax information to Wasatch
County so that individuals who own property in the town
receive an accurate tax bill.
the Town of Daniel argues that Schultz's fraud claim
should be dismissed because he said that it was not a fraud
claim. In its motion to dismiss, the town argued that the
seventeenth cause of action should be dismissed because
Schultz had not pleaded his fraud claim with particularity as
required by Rule 9(b) of the Federal Rules of Civil
Procedure. In his response brief, Schultz stated that his
“Seventh Cause of Action” did not allege fraud.
Judge Furse disagreed with this statement and applied a Rule
9(b) analysis to the fraud claim pleaded in the seventeenth
cause of action.
Schultz was trying to avoid the requirements of Rule 9(b) or
whether he was confused about what cause of action was at
issue when he stated that there was no fraud claim in his
“Seventh Cause of Action” is of no moment. He
could not amend his complaint to change the essential nature
of his seventeenth cause of action through any statements
made in his response brief. He could only amend his complaint
with leave of the court under Rule 15(a)(2). Judge Furse,
therefore, correctly concluded that the seventeenth cause of
action stated a claim for fraud.
court OVERRULES the objection to the Report and
Recommendation filed by the Town of Daniel. [Docket 50.] The
court, therefore, ADOPTS IN FULL the Report and
Recommendation, [Docket 49] and ORDERS as follows:
1. The court DISMISSES WITH PREJUDICE Schultz's tortious
interference with economic relations (tenth cause of action),
tortious interference with prospective business relations
(ninth and eleventh causes of action), intentional infliction
of emotional distress (twelfth and fifteenth causes of
action), and negligent ...