District Court, Salt Lake Department The Honorable Robert P.
L. Booher, Clemens A. Landau, and Michael J. Teter, Attorneys
Jefferson W. Gross and S. Ian Hiatt, Attorneys for Appellee
Following a complicated series of transactions involving
bridge lending,  Cougar Canyon Loan, LLC (Cougar) brought
suit against The Cypress Fund, LLC; Cypress Management, LLC;
Olympus Capital Alliance, LLC; Cypress Capital III, LLC;
Robert N. Baxter; and Blair M. Walker (collectively,
Cypress). Cougar alleged, among other things, violations of
the Utah Uniform Securities Act, see Utah Code Ann.
§§ 61-1-1 to -206 (LexisNexis 2018),  and breach of the
implied covenant of good faith and fair dealing. Following a
jury verdict in Cougar's favor on both counts, Cypress
moved for a new trial, asserting that the verdict was
"contrary to law," see Utah R. Civ. P.
59(a)(7), which motion the trial court denied. We affirm the
trial court's denial of Cypress's motion for a new
trial and further conclude that it did not err in holding
Robert N. Baxter in contempt for transferring funds in
violation of the court's order.
To make a long story short,  Cypress approached Cougar in 2009
about participating as co-lender on a loan associated with a
real estate development project in Trinidad, Colorado (the
Trinidad Project). Cypress had committed to loan $4.8
million for the funding of the Trinidad Project,
and Cougar eventually agreed to finance half of that sum in
exchange for a note from Cypress in the principal amount of
$2.8 million. However, of the $4.8 million that Cypress had
agreed to extend for the funding of the Trinidad Project, the
project ultimately received only $1.7 million-$1.5 million of
which Cougar funded. The Trinidad Project borrower eventually
defaulted on the loan and, following a sequence of events,
Cougar initiated the current action against Cypress on
October 17, 2013, asserting securities fraud and other
In bringing its claim for securities fraud against Cypress,
Cougar alleged that Cypress "made untrue statements of
material facts regarding the value and nature of the
collateral that would be pledged" to secure Cougar's
loan and "made untrue statements of material facts
regarding [Cougar's] approximately 50/50 participation in
the [Trinidad Project loan]."
Following a four-day trial in 2017, the jury returned a
special verdict in favor of Cougar on its securities fraud
and breach-of-the-implied-covenant claims, awarding $4
million and $1 million in damages, respectively. Because the
damage awards were duplicative, the trial court entered
judgment in favor of Cougar in the sum of $4 million, plus
postjudgment interest, costs, and attorney fees. Cypress
subsequently filed post-trial motions seeking judgment
notwithstanding the verdict, a new trial, and to set aside
the judgment. See Utah R. Civ. P. 50, 59, 60(b). The
trial court denied the motions, and Cypress appeals.
At oral argument, Cypress's appellate counsel, who was
not trial counsel, astutely recognized that the briefing in
this case was unfocused and unduly complex. Counsel
accordingly repackaged Cypress's position on appeal to
showcase a single potentially dispositive argument: that the
trial court erred in denying Cypress's rule 59 motion for
a new trial because the verdict was "contrary to
law." See id. R. 59(a)(7).
Specifically, he argued that the two-year statute of
limitations barred Cougar's securities fraud claim.
See Utah Code Ann. § 61-1-22(7)(a)(ii)
(LexisNexis 2018) (providing that a claim brought under the
Utah Uniform Securities Act is barred after "the
expiration of two years after the discovery by the plaintiff
of the facts constituting the violation").
Cypress premises its argument on Cougar's receipt of two
emails more than two years before Cougar brought suit. In
March 2009, Cypress sent an email to Cougar detailing issues
with some of the collateral securing the loan. And in March
2011, Cypress sent an email detailing the parties'
current percentage interest in the Trinidad Project loan,
which was not 50/50. The 2011 email was sent to an
administrative assistant,  but Richard Miller, the owner of the
entity that manages Cougar, never reviewed it. Cypress argues
that the emails conferred sufficient actual or inquiry notice
upon Cougar to trigger the running of the two-year statute of
limitations for its securities fraud claim, which would have
elapsed by the time Cougar commenced its action in October
Ordinarily, "we review an appellant's allegations of
legal error under [rule] 59(a)(7) [of the Utah Rules of Civil
Procedure] for correctness," but "reverse and order
a new trial only if we (1) identify a legal error that would
be grounds for a new trial under [rule] 59(a)(7) and (2)
determine that the error resulted in prejudice necessitating
a new trial." ASC Utah, Inc. v. Wolf Mountain
Resorts, LC, 2013 UT 24, ¶ 23, 309 P.3d 201
(quotation simplified). But this issue was not preserved for
appeal by trial counsel.
Although a party may advance a new argument in its motion for
a new trial, "the trial court may refuse to consider the
merits of the argument because it may find the issue
waived." State v. Pinder, 2005 UT 15, ¶
46, 114 P.3d 551 (quotation simplified). And should the trial
court "refuse to address the merits of the newly
advanced argument, the issue remains unpreserved for
appellate review and may be addressed only if the challenging
party can show plain error or exceptional
circumstances." Id. See also Tschaggeny v. Milbank
Ins. Co., 2007 UT 37, ¶ 30, 163 P.3d 615 (stating
that raising an issue in a post-trial motion does not cure
preservation defects); Clark Props., Inc. v. JDW-CM,
LLC, 2012 UT App 163, ¶ 9, 282 P.3d 1009
("Insofar as [the appellant] suggests that it preserved
[a] claim by raising it in its motion for new trial, that
fact alone is inadequate to preserve an issue for
appellate review.") (emphasis added).
In the present case, the trial court addressed Cypress's
multiple post-trial motions in a single memorandum decision.
In denying Cypress's motion for a new trial, the court
briefly addressed Cypress's argument based on the
sufficiency of the evidence, see Utah R. Civ. P.
59(a)(6), by stating that the argument failed because Cypress
had not marshaled the evidence supporting the jury's
verdict. The court made no specific mention of Cypress's
contention that the verdict was "contrary to law,"
see id. R. 59(a)(7), other than to state that
Cypress failed to cite to the record where it had preserved
its remaining issues-thereby implicitly refusing to reach the
merits of that specific argument. And because "courts
are required to explain the basis for their decisions only
when they grant motions for a new trial-not when
they deny such motions," ASC Utah, 2013 UT 24,
¶ 21 (emphasis in original), the court did not commit
legal error in declining to address the merits of that
particular argument. Cypress's rule 59(a)(7) argument is
therefore unpreserved for appeal.
We typically review unpreserved issues only when a valid
exception to the preservation rule applies. See State v.
Johnson, 2017 UT 76, ¶ 15, 416 P.3d 443. Cypress
contends that the plain error doctrine applies to its rule
59(a)(7) argument. To establish plain error, a defendant must
show that "(i) an error exists; (ii) the error should
have been ...