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Tronson v. Eagar

Court of Appeals of Utah

December 27, 2019

Ted W. Tronson, Appellee,
v.
Ryan Eagar, Ryan Gardner, Judd Simpson, and Jake Simpson, Appellants.

          Fourth District Court, Provo Department The Honorable Darold J. McDade No. 140401483

          Stony V. Olsen, Attorney for Appellants

          Justin D. Heideman and Justin R. Elswick, Attorneys for Appellee

          Judge Ryan M. Harris authored this Opinion, in which Judges Kate Appleby and Diana Hagen concurred.

          OPINION

          HARRIS, JUDGE.

         ¶1 The district court entered summary judgment against four individuals-Ryan Eagar, Ryan Gardner, Judd Simpson, and Jake Simpson (collectively, Defendants)-after determining that they were all jointly and severally liable to Ted W. Tronson on a promissory note. Defendants appeal the district court's summary judgment ruling, but we find their arguments unpersuasive, and therefore affirm.

         BACKGROUND[1]

         ¶2 In 2008, Defendants were in search of money to fund an "Internet marketing campaign." Tronson and Howard Nelson[2]agreed to lend Defendants money for that purpose, and on October 15, 2008, the two sides executed two documents that are at the center of this case: a Loan Agreement and a Promissory Note. The Loan Agreement defines "Lender" as Tronson and Nelson, in their individual capacities, and defines "Borrower" as Defendants, [3] in their individual capacities, although "Borrower's Firm" is defined as "Those Guys, LLC, a Nevada Company." The Loan Agreement states that "Lender agrees to [l]oan Borrower monies," in "one or more incremental disbursements," "to fund an ongoing Internet marketing campaign." Each disbursement was to be "evidenced by a proper Promissory Note," which would require repayment of the principal loan amount, plus a "lender fee" of 25% of the loan amount. The Loan Agreement was executed by seven individuals (two individual lenders, and five individual borrowers), over signature lines listing them only by name; although "Those Guys, LLC" was listed as "Borrower's Firm" in the body of the document, no business entity was listed as a signatory to the Loan Agreement.

         ¶3 The Promissory Note, executed contemporaneously with the Loan Agreement, was signed by all five individual borrowers, over signature lines listing them only by name. It listed the "principal amount" as $25, 000, but the "total amount" as $31, 250, after accounting for the 25% lender fee dictated by the Loan Agreement. The funds were to be repaid in installments due over the next three months. The borrowers indicated that the promise to pay was made "[f]or value received."

         ¶4 However, payment of the $25, 000 loan proceeds was not made by Tronson and Nelson directly, and was not paid to the borrowers individually. Instead, on October 16, 2008-the day after the documents were executed-a company controlled by Tronson and Nelson, known as Those Money Guys LLC, issued a $25, 000 cashier's check payable to Those Guys LLC, the entity listed in the Loan Agreement as "Borrower's Firm." That same day, Those Guys LLC deposited the check into its bank account.

         ¶5 No individual or entity ever repaid any part of the loan; the record does not contain evidence of any loan repayment efforts made by Those Guys LLC or any of the individual borrowers, or evidence of any loan repayments received by Tronson, Nelson, or Those Money Guys LLC.

         ¶6 Nearly six years later, in October 2014, Tronson filed suit against all five of the individual borrowers, seeking judgment against them, "jointly and severally," for $31, 250 "plus interest, attorney fees, and costs." The complaint's heading identified Justin Heideman of the law firm Heideman & Associates as the only attorney representing Tronson. Tronson took a while to serve Defendants, prompting them to file a motion to dismiss, filed through a law firm appearing specially, contesting the propriety of service of process upon them. The district court, after oral argument, determined that Tronson "sufficiently served process on Defendants," and denied the motion to dismiss. Thereafter, the law firm that appeared specially to represent Defendants in connection with the motion to dismiss withdrew from representation.

         ¶7 After some procedural skirmishing, a different attorney- Stony V. Olsen, current counsel for Defendants-entered an appearance on behalf of Defendants[4] and filed an amended answer on their behalf. Around the same time that Olsen appeared on behalf of Defendants, a second attorney's name- Justin Elswick-began to appear on documents filed on behalf of Tronson. Elswick, like Heideman, is an attorney at Heideman & Associates. Over time, Elswick's name began to appear on both the heading as well as the signature block, where he identified himself as "[a]ttorney for Plaintiff Ted W. Tronson." Elswick did not file a formal notice of appearance until May 2017, after the court had granted summary judgment in Tronson's favor, although in April 2017-after his name had appeared on several papers filed with the court on Tronson's behalf-Elswick filed an affidavit attesting to some facts regarding proof of service on one of the borrowers, and in that affidavit stated, "I am counsel for the Plaintiff in the above-captioned case."

         ¶8 One day after Elswick filed his affidavit, Tronson filed a motion for summary judgment, seeking final judgment against Defendants in the amount of $31, 250, "plus interest and all attorney fees and costs." The motion's heading identified Heideman and Elswick as "[a]ttorneys for Plaintiff Ted W. Tronson." The motion was signed by Elswick, the only attorney identified in the motion's signature block, which proclaimed Elswick to be "[a]ttorney for Plaintiff Ted W. Tronson."[5] The motion was accompanied by seven attachments, including sworn affidavits from Tronson and Nelson-who both averred that they had "issued a $25, 000 cashier's check through [their] entity" to Defendants' entity, and that no repayment had been made-as well as the following additional exhibits: copies of the Loan Agreement and the Promissory Note; a copy of a stub from the $25, 000 cashier's check sent from Those Money Guys LLC to Those Guys LLC; a copy of a bank statement from Those Guys LLC, demonstrating that the entity had deposited $25, 000 into its bank account on October 16, 2008; and a proposed order granting the motion. The motion and its attachments were served upon Olsen through the electronic filing system. Defendants do not contest the fact that Olsen was served with a copy of the motion for summary judgment.

         ¶9 Despite being served with a copy of the motion, Defendants filed no timely response to it. Any timely response would have been due on May 12, 2017; four days later, Tronson filed a Request to Submit for Decision, informing the district court that the matter was ready for its decision, because "Defendants have not timely filed a response." Later that same day, the district court signed Tronson's proposed order, granting the motion for summary judgment. The order proclaimed that Defendants had "not filed a response" to the motion, that the court had "reviewed [Tronson's] argument," was "advised in the premises," and was granting the motion "for good cause shown." The total amount of money awarded to Tronson was $64, 014.61 (the principal loan amount, as well as lender fees, late fees and interest) plus "attorney's fees and costs" and post-judgment interest to be quantified later.

         ¶10 Entry of that order against them spurred Defendants into action. The very next day, Defendants filed both a belated opposition to Tronson's already-granted motion for summary judgment, as well as a motion asking the court to "deny or defer" the already-granted motion. Among other arguments, Defendants asserted that because they had not received the money in their individual capacities, they should not have to repay it in those capacities; any judgment should not be joint and several, because the Promissory Note was not an "instrument"; the Loan Agreement and Promissory Note were unconscionable; and any judgment should also include the fifth borrower who had not yet answered the complaint. A few weeks later, Defendants filed another motion, this one invoking rule 59 of the Utah Rules of Civil Procedure and asking the court to alter or amend its summary judgment ruling. In their rule 59 motion, Defendants asserted, among other things, that Tronson's motion for summary judgment had never truly been properly filed, because Elswick had not filed a formal notice of appearance until after the motion was granted. Nowhere in their filings did Defendants offer any justification for their failure to file a timely response to the summary judgment motion. Tronson opposed Defendants' motions, and filed a motion of his own to strike Defendants' belated response to the summary judgment motion.

         ¶11 The court heard oral argument on all of these motions, and denied Defendants' motions, including their rule 59 motion, thereby leaving the court's summary judgment order intact. In its written order, the court stated that "Rule 59 is not the proper procedural vehicle for seeking to set aside" a summary judgment order, because "no trial occurred in this case."

         ¶12 Soon after the court's order denying their motions was entered, Defendants filed another motion, this time invoking rules 54(b) and 60(b) of the Utah Rules of Civil Procedure, and asking for relief from both the summary judgment order as well as the order denying their motions. In addition to making some of the same arguments from their previous motions, Defendants also argued that the court erred in concluding that rule 59 is inapplicable in cases in which no trial has occurred, and that it erred by granting summary judgment simply because the motion was unopposed. After full briefing and oral argument, the court denied this motion as well, stating in its written order that, "[e]ven assuming arguendo that Rule 59 is an appropriate avenue for relief in cases where summary judgment has been granted due to a failure by a party to timely respond," "none of the grounds" proffered by Defendants "under Rule 59 have been met" in this case. In addition, the court implied that it had not granted the summary judgment motion simply because it was unopposed, but instead noted that in its original order it had stated that it had "reviewed [Tronson's] argument" and had granted the motion for "good cause" shown.

         ¶13 Further litigation ensued regarding the amount of attorney fees to be awarded, as well as whether judgment should also be awarded against the fifth borrower who had failed to answer the complaint. Eventually, the court entered final judgment against all five borrowers, including all four Defendants, ...


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