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Cougar Canyon v. Cypress Fund

Cougar Canyon v. Cypress Fund, 2020 UT 28 (Durrant, C.J.)

Legal Malpractice

Cougar Canyon obtained a $4 million judgment against Cypress. After losing its appeal, Cypress sued its law firm. Cypress believed it lost its appeal as a result of legal malpractice. At some point after filing the suit, each Cypress party transferred a 99 percent interest in their malpractice claim to JWHM Claims. Cougar Canyon applied for writs of execution on Cypress’s legal malpractice action against the law firm. Cypress filed a motion to quash, arguing that the writs of execution should be cancelled because the malpractice claims had been assigned to another party and because public policy dictated that the claims be exempt from involuntary execution. The district court denied Cypress’s motion to quash and ruled that the malpractice claim was subject to execution. But under the district court’s ruling, Cougar Canyon was only able to execute on each party’s remaining 1 percent interest. Cypress appealed. The Utah Supreme Court affirmed, holding:

  • Under rules 64 and 64E of the Utah Rules of Civil Procedure, legal malpractice claims may be “acquired by a creditor through attachment and execution,” and none of the policies identified by Cypress justifies a departure from these rules in this case. Legal malpractice claims are considered property under Rule 64. They are therefore subject to execution.
  • The Court’s decision in Snow, Nuffer, Engstrom & Drake v. Tanasse, 1999 UT 49, does not justify creation of an additional exception to Rule 64 under the present circumstances. There, the Court exercised its absolute authority over the practice of law to prohibit a lawyer from acting in a way that would damage the legal profession. Here, the Court would not be restricting the activities of a lawyer, but of Cougar Canyon, a non-lawyer business entity. Cougar Canyon did not swear an oath to serve as an officer of the courts of the State or to be subject to ultimate authority over the legal profession.
  • The Court declines to consider Cypress’s jurisdictional issue on appeal because it is unnecessary and because it did not have the benefit of adversarial briefing. It would be unwise to answer that question without adversarial briefing.

Read the full court opinion

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