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In re Foreclosure; Graham v. Albertson’s; Lewis v. US Bank Trust; Fastenal v. Labor Commission presented by The Appellate Group


In re Excess Proceeds from Foreclosure, 2020 UT App 54 (Harris, J.)

A property owner borrowed money from Instant Mortgage Lending Inc. (IML) and that loan was memorialized in a promissory note. The loan was secured by a trust deed that listed Instant Funding—not IML—as the beneficiary but also defined “beneficiary” as the holder of the promissory note. The note was amended seven times, and never again did the drafters list IML as the holder. A later document corrected the beneficiary to IML, but it was never signed by Instant Funding. IML later assigned its interest to Ocean 18. The owner’s property was later sold at a foreclosure sale, and Ocean 18 sought to obtain the excess proceeds from the sale over two other claimants. The district court awarded the excess to the two other claimants because it concluded that IML was not a beneficiary of the trust deed. The Court of Appeals reversed, holding:

  1. Both sides espouse interpretations of the trust deed that are plausible and reasonably supported by its language, so the trust deed is facially ambiguous as to the identity of the beneficiary. 
  2. The district court erred in concluding that Instant Funding was the beneficiary of the trust deed. As with any contract, if a trust deed is facially ambiguous, courts look to the parties’ intentions to resolve ambiguity. Parol evidence may be admitted to determine intent. Examining the parol evidence in this case—including the course of dealing between the parties and IML’s executive’s declaration that the listing of Instant Funding as a beneficiary on the trust deed was a mistake—Instant Funding was never intended to be the beneficiary of the trust deed; at the time the deed was created, the parties intended IML to be the beneficiary. 
  3. The parol evidence is not sufficient for the Court to conclude whether IMC remained the holder of the Note and the beneficiary of the trust deed and whether IMC properly transferred its interests to Ocean 18. The case is remanded for further proceedings, which may include discovery. 


Graham v. Albertson’s, 2020 UT 15 (Pearce, J.)

An employee filed a complaint with the Utah Occupational Safety and Health Division alleging that his termination violated the Utah Occupational Safety and Health Act (UOSHA) because the employer terminated him for filing a UOSHA complaint. While his claim was proceeding in the Division, he filed a complaint in district court alleging wrongful termination in violation of public policy. The district court dismissed his complaint because it concluded that UOSHA preempted his common law wrongful termination claim. The Supreme Court reversed, holding:

  1. UOSHA does not preempt a common-law cause of action for wrongful termination. UOSHA does not reflect a clear legislative intent to preempt common law remedies. Section 34A-6-110(1) broadly instructs that UOSHA “does not limit or repeal requirements imposed by statute or otherwise recognized by law.” The employee’s claim of wrongful termination in violation of public policy falls into the category of a requirement “otherwise recognized by law.”
  2. The statutory-preemption Retherford test skips a step. The correct test is three parts: First, a court must decide whether there was a valid claim at common law. Second, a court must decide whether a statute reveals either an express or implicit legislative intent to preempt common law causes of action. And third, if the statute reveals an intent to preempt, the court must decide whether the common law claim falls within the scope of what the Legislature intended the statute to preempt. 
  3. In a footnote, the Court discusses the burden of proof in employment-statute preemption cases: The plaintiff carries the burden of establishing a “clear and substantial” policy in positive law sufficient to overcome the common law presumption of at-will employment; if the plaintiff can show that he possesses a basis in law to adjust the default and assert that he was wrongfully terminated in violation of public policy, the burden then shifts to the defendant to demonstrate that the Legislature intended the statute to preempt the common law remedy.


Lewis v. US Bank Trust, 2020 UT App 55 (Hagen, J.)

A property owner sued a bank for quiet title to a property and unjust enrichment. The bank moved to dismiss the complaint for failure to state a claim under Utah R. Civ. P. 12(b)(6) because the owner’s claims were barred by claim preclusion by a prior federal case the owner had brought. The bank attached to its motion a variety of property and legal documents; it did not, however, attach the federal complaint or ask the court to take judicial notice of the federal complaint. The district court granted the bank’s motion to dismiss the complaint. The Utah Court of Appeals reversed, holding:

  1. Because the district court had to consider documents outside of the complaint to decide whether the bank had met the test for claim preclusion, the district court erred when it granted the bank’s motion to dismiss for failure to state a claim. The district court should have converted the motion to one for summary judgment and allowed the parties a reasonable opportunity to present evidence in accordance with the summary judgment rules. 


Fastenal and Phoenix Insurance v. Labor Commission, 2020 UT App 53 (Mortensen, J.)

An employee drove a semitruck for over one year and developed a pressure ulcer on his foot that led to surgery. The employee had a preexisting condition—peripheral neuropathy—but he drove the semitruck for 11 hours per day, and the clutch required 67 pounds of pressure to be fully engaged. With the assessment of a medical panel, the ALJ concluded that the repetitive pressure of engaging the clutch caused the pressure ulcer. The Commission awarded the employee workers’ compensation benefits. The employer appealed. The Utah Court of Appeals affirmed, holding:

  1. Because the employee had a preexisting condition, to receive workers’ compensation benefits, the employee had to show that the employment contributed something substantial to increase the risk he already faced in everyday life because of his preexisting condition. Repetition of a workplace activity can constitute an objectively unusual or extraordinary exertion, and the employee’s employment activity met this standard. The employee operated the semi-truck clutch with his left foot, which required force greater than that required to operate many consumer vehicles, and he did this repeatedly while driving the semitruck for long days over an extended period of time.
  2. The employer did not demonstrate that its due process rights were violated. First, the replacement of the ALJ is specifically allowed in the Administrative Procedures Act. Second, the employer did not object to the medical panel’s report, and when the employer brought its arguments against the medical panel’s report before the Commission, the Commission concluded that it would not change its decision. Third, the composition of the Panel was proper; the members of the Panel met the statutory requirement of specializing in the treatment of the disease or condition involved in the claim. 

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