Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Cougar Canyon Loan, LLC v. The Cypress Fund, LLC

Court of Appeals of Utah

March 28, 2019

Cougar Canyon Loan, LLC, Appellee,
v.
The Cypress Fund, LLC; Cypress Management, LLC; Olympus Capital Alliance, LLC; Cypress Capital III, LLC; Robert N. Baxter; and Blair M. Walker, Appellants.

          Third District Court, Salt Lake Department The Honorable Robert P. Faust

          Troy L. Booher, Clemens A. Landau, and Michael J. Teter, Attorneys for Appellants

          Jefferson W. Gross and S. Ian Hiatt, Attorneys for Appellee

          OPINION

          ORME, JUDGE.

         ¶1 Following a complicated series of transactions involving bridge lending, [1] 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), [2] 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.

         ¶2 To make a long story short, [3] 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[4] 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 claims.

         ¶3 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]."

         ¶4 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.

         ¶5 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."[5] 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").

         ¶6 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, [6] 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 2013.

         ¶7 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.

         ¶8 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).

         ¶9 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.

         ¶10 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.