District Court, Provo Department The Honorable Darold J.
McDade No. 120402017
G. Loosle, Paula W. Faerber, and Platte S. Nielson, Attorneys
M. Petersen and David N. Kelley, Attorneys for Appellee
Gregory K. Orme authored this Opinion, in which Judge Michele
M. Christiansen Forster concurred. Judge Jill M. Pohlman
dissented, with opinion.
LaMar and LaRene Drew appeal the district court's grant
of summary judgment in favor of Pacific Life Insurance
Company (Pacific) and the court's denial of the
Drews' cross-motion for partial summary judgment on the
issue of vicarious liability. The Drews contend that the
district court erroneously determined that Pacific was not
vicariously liable for the unlawful misrepresentations made
by one of its appointed insurance producers, R. Scott
National, Inc. (RSN). We reverse the summary judgment in
favor of Pacific, and we remand for the entry of partial
summary judgment in favor of the Drews.
Before turning to the merits, we pause briefly to consider
our jurisdiction. The order appealed from was interlocutory
in nature but was certified as final in contemplation of rule
54(b) of the Utah Rules of Civil Procedure. The certification
does not meet the requirements laid out in a recent line of
opinions from the Utah Supreme Court. See EnerVest, Ltd.
v. Utah State Eng'r, 2019 UT 2, ¶¶ 16-20,
435 P.3d 209 (amended opinion); Copper Hills Custom
Homes, LLC v. Countrywide Bank, FSB, 2018 UT 56,
¶¶ 15-17, 23-28, 428 P.3d 1133 (amended opinion);
First Nat'l Bank v. Palmer, 2018 UT 43,
¶¶ 13-14, 427 P.3d 1169. Ordinarily in such a case,
we dismiss for lack of jurisdiction. See, e.g.,
Hayes v. Intermountain GeoEnvironmental Services
Inc., 2018 UT App 223, ¶ 1, 437 P.3d 650. But these
cases all recognize that we "have the discretion to
treat an improper rule 54(b) certification as a request for
leave to take an interlocutory appeal under rule 5(a) of the
Utah Rules of Appellate Procedure." Id. ¶
5 n.2. Accord EnerVest, 2019 UT 2, ¶ 20;
Copper Hills, 2018 UT 56, ¶ 29 n.15;
Palmer, 2018 UT 43, ¶ 14 n.4. This discretion
to treat an appeal taken from a non-final order as though it
were an authorized interlocutory appeal is exercised
"judiciously and sparingly." Copper Hills,
2018 UT 56, ¶ 29 n.15. But it is exercised from time to
time. See, e.g., Hawkins ex rel. Hawkins v.
Peart, 2001 UT 94, ¶ 3 n.2, 37 P.3d 1062 (flawed
rule 54(b) certification); Chaparro v. Torero, 2018
UT App 181, ¶¶ 28-31, 436 P.3d 339 (non-final order
due to an outstanding attorney fee issue). Cf.
EnerVest, 2019 UT 2, ¶ 20 (suggesting that
discretion to treat a flawed rule 54(b) certification as an
authorized interlocutory appeal might have been exercised if
appellant had standing on appeal).
We believe that the considerations that have prompted
Utah's appellate courts in prior cases to exercise their
discretion to treat a flawed rule 54(b) certification as,
instead, a granted petition for interlocutory appeal, or to
decline to exercise that discretion, are of only limited
relevance in a subsequent case. Our resistance to a formulaic
approach is inherent in the very concept of discretion.
See Warren v. United States Parole Comm'n, 659 F.2d
183, 196 (D.C. Cir. 1981) ("[T]he essence of discretion
is the absence of fixed rules."). See also United
States v. Richards, 659 F.3d 527, 551 (6th Cir. 2011)
("It is the essence of discretion that it may properly
be exercised in different ways and likewise appear
differently to different eyes.") (quotation simplified);
Walen v. United States, 246 F.Supp.3d 449, 462
(D.D.C. 2017) ("Flexibility in the face of competing
priorities . . . is the essence of discretion.")
We determine that this case is appropriate for the exercise
of our discretion to treat the flawed rule 54(b)
certification as an interlocutory appeal pursuant to rule
5(a) of our appellate rules. Having done so, we now turn to a
resolution of the appeal on its merits.
In 2009, Pacific appointed RSN as its insurance producer and
authorized it to "solicit and procure applications for
[Pacific's] life insurance and annuity products."
The agreement, however, prohibited RSN from soliciting
insurance products that did not meet the "customer's
insurance needs and financial objectives." At the time
the parties executed the agreement, Pacific had appointed
other companies and individuals to sell its insurance
products,  and RSN sold annuities and insurance
policies on behalf of numerous companies and individuals.
LaMar and LaRene Drew are retired senior citizens who, after
seeing an advertisement, sought out one of RSN's
employees as a financial advisor. At the outset, the employee
assisted the Drews in the acquisition and sale of multiple
annuities. Later on, and with the assistance of another RSN
employee, the initial employee informed the Drews that, even
though they were approaching eighty, they could purchase a
life insurance policy with a high death benefit and resell it
on the secondary market for a large profit. Based on this
information, the Drews purchased two $1.5 million life
insurance policies, the first from PHL Variable Insurance
Company (PHL) and the second from Pacific. To fund the
premiums on the policies, the RSN employees advised the Drews
to obtain a reverse mortgage on their home. The Drews
followed this advice.
RSN was unable to sell the policies on the secondary market.
After the Drews paid more than $300, 000 in premiums and lost
much of the equity in their home, the policies lapsed when
the Drews could no longer afford the premiums. In total, they
lost three-fourths of their life savings, and interest on
their reverse mortgage is accruing at a rate of approximately
$1, 000 per month.
The Drews sued Pacific, claiming that it was vicariously
liable for the tortious conduct of RSN's employees, whom
the Drews contended were acting as Pacific's agents.
Pacific and the Drews submitted cross-motions for summary
judgment, and the district court granted summary judgment to
Pacific. Although the court did not address whether an agency
relationship existed between Pacific and RSN, it concluded
that, even assuming such a ...