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Silva v. Silva

Court of Appeals of Utah

November 8, 2018

David Silva, Appellee,
v.
Bonnie Silva, Appellant.

          Third District Court, Salt Lake Department The Honorable Robert P. Faust No. 140908706

          J. Spencer Ball, Attorney for Appellant

          Shawn D. Turner, Attorney for Appellee

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

          CHRISTIANSEN FORSTER, JUDGE

         ¶1 Bonnie Silva appeals the district court's denial of her motions to set aside a default judgment and a sheriff's sale following that judgment. She also challenges the district court's award of attorney fees. We vacate the district court's rulings and remand for further proceedings.

         BACKGROUND

         ¶2 Bonnie Silva and David Silva divorced in 2010. The marital estate included interests in fifteen parcels of real property-four properties held jointly, one property held by David, and ten properties held by Bonnie.[1] The decree allocated the properties and ordered the parties to execute quitclaim deeds within thirty days, conveying their interests in the properties to one another as specified in the decree. If either party failed to execute a quitclaim deed, the divorce decree authorized the other party to seek a court order to transfer title. One of the properties awarded to David was a residential property located on Dennis Drive in West Valley City, Utah (the Dennis Drive Property).

         ¶3 In June 2010, pursuant to the divorce decree, Bonnie executed a quitclaim deed as "Grantor Bonnie Moore, now known as Bonnie Silva," purportedly conveying the Dennis Drive Property to David. But when David attempted to record the deed, he discovered that "Bonnie Moore[, ] as Trustee for the Consolidated Trust," actually held title to the Dennis Drive Property. He further discovered that one week before he had filed for divorce in September 2008, Bonnie had conveyed the Dennis Drive Property and other properties then in her name to herself and her daughters, K.V. Lum and R. Carter, as trustees of a trust known as the Consolidated Trust. After learning these facts, David sent a revised quitclaim deed to Bonnie, but she did not sign and return it as requested. Several months later, Bonnie, as a trustee of the Consolidated Trust, again conveyed the Dennis Drive Property and other properties to Lum, as trustee of the Consolidated Trust.

         ¶4 In October 2010, David filed a Motion for Contempt with the district court. Because he claimed he could not locate Bonnie, David filed a Motion for Alternative Service, which the court granted. The district court held an evidentiary hearing and entered a default judgment finding Bonnie in contempt for failing to convey the Dennis Drive Property to David. However, the court left open a window during which Bonnie could cure the contempt. If Bonnie did not convey the Dennis Drive Property to David within thirty days, the court would enter a $219, 000 judgment against her. Bonnie did not convey the property to David during this time. A few months later, Lum, as a trustee of the Consolidated Trust, conveyed title to the Dennis Drive Property to Carter, as a trustee of the Consolidated Trust. The district court then entered a contempt judgment against Bonnie, reducing slightly the $219, 000 by amounts David owed to Bonnie under the divorce decree.

         ¶5 The following month, David instituted this action against Bonnie and her daughters alleging fraudulent conveyance and seeking to quiet title to the Dennis Drive Property. David filed a motion for alternative service recounting his prior unsuccessful efforts to serve Bonnie. David asserted that the process server had attempted personal service at Bonnie's last known address four separate times. The district court ordered alternative service by publication, which David accomplished.

         ¶6 Bonnie did not answer the complaint. The district court clerk consequently entered a default certificate against Bonnie, and the court ordered an evidentiary hearing on damages. Concerned that Bonnie may have received inadequate notice of the hearing, the district court rescheduled the hearing and required additional service on Bonnie. David attempted service by mailing copies of the notice of hearing to what David claimed was Bonnie's last known address by both regular and certified mail. David also attempted personal service whereby the process server left the notice at Bonnie's last known residence on three separate occasions. David then completed service by publication again.

         ¶7 Bonnie did not appear at the hearing on damages. In its Findings of Fact and Conclusions of Law, the district court concluded that "Service of Process of the Complaint and notice of the evidentiary hearing on damages were in accordance with the Rules of the Court, the Statutes of Utah, and the Constitutional requirements of due process." The district court also determined that Bonnie had fraudulently conveyed the Dennis Drive Property and her other properties to the Consolidated Trust. Accordingly, the district court ruled that the contempt judgment entered in the divorce action attached to the properties, that Bonnie and her daughters were enjoined from transferring or encumbering the properties, and that David "may levy execution on the properties . . . and sell the amount of the property necessary to satisfy the judgment." Finally, the district court awarded attorney fees and costs to David. The district court thus entered default judgment against Bonnie in the amount of the contempt judgment, now attached to Bonnie's properties. The court also awarded costs and attorney fees totaling nearly $50, 000. The district court clerk subsequently issued a writ of execution on three of Bonnie's properties, including the Dennis Drive Property.

         ¶8 Later that month, Bonnie's counsel entered an appearance in the district court and filed a motion pursuant to rule 60(b)(1) of the Utah Rules of Civil Procedure seeking to set aside the default judgment on the basis of excusable neglect and to quash the writ of execution. The district court held a hearing, which Bonnie and her counsel attended. At that hearing, Bonnie maintained that the default judgment should be set aside on the ground of excusable neglect because she did not receive actual notice of the action and service was insufficient under the circumstances. Bonnie acknowledged ...


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