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Jensen v. Cannon

Jensen v. Cannon, 2020 UT App 124 (Pohlman, J.) (Harris, J. concurring)

Family: Divorce, Torts

Jensen and Cannon were married in the eighties and divorced in the nineties. In the two-thousands, Jensen brought a claim of fraudulent nondisclosure against Cannon when she discovered a property and an option contract that Cannon did not disclose during the divorce. That case was dismissed without prejudice, and in the two-thousand tens, Jensen renewed her claim of fraudulent nondisclosure and tacked on a number of other non-fraud claims. Jensen appeals the district court’s determination that she failed to prove her fraudulent nondisclosure claim, as well as the court’s dismissal of her non-fraud claims on summary judgment. Cannon cross-appeals the court’s denial of his request for bad faith attorney fees and sanctions under rule 11 of the Utah Rules of Civil Procedure. The Utah Court of Appeals affirmed in all respects, holding:

  • The district court correctly ruled that Jensen did not prove her fraudulent non-disclosure claim. The court did not misconstrue the elements of the claim. The district court found that Cannon credibly testified that he did not know he needed to disclose the assets. Fraudulent non-disclosure is dependent upon the actor’s intent. An intent to deceive must inform the application of the tort’s three elements. The district court did not improperly extend the elements of fraudulent nondisclosure in relying on Cannon’s testimony regarding his beliefs about whether the option agreement and property had to be disclosed.
  • The district court correctly granted summary judgment on Jensen’s non-fraud claims. The court correctly interpreted rule 60(d) of the Utah Rules of Civil Procedure. When Jensen discovered Cannon’s alleged fraud, the window of time for her to seek relief for that fraud under rule 60(b) had long since expired. Thus, her only option was to seek relief from the divorce decree by filing an independent action under rule 60(d). And while Jensen originally asserted only fraud claims, she later amended her complaint to add the non-fraud claims, including a claim for negligent misrepresentation. The district court did not err in dismissing Jensen’s non-fraud claims.
  • The district court did not clearly err in denying Cannon’s request for attorney fees under Utah Code section 78B-5-825. Cannon bore the burden of proving that Jensen brought this action in bad faith. And although Cannon posits and ascribes to Jensen bad-faith motives favorable to his position, he relies exclusively on accusation and points to no record evidence demonstrating that Jensen did not believe in the propriety of her claims or that she filed this action with the intent to “hinder, delay, or defraud.”
  • The district court did not clearly err when it denied Cannon’s motion for sanctions against Jensen under rule 11. Jensen’s motion presented a colorable argument based on inferences that could be drawn from the circumstances surrounding the agreement’s genesis, as the district court found. It was not frivolous of Jensen to argue to the district court that “there would be something in writing” memorializing the option agreement and that Cannon had a hand in failing to preserve it.
  • Cannon does not receive attorney fees on appeal under rule 33 of the Utah Rules of Appellate Procedure.
  • Concurrence: disagrees with the court’s analysis regarding fraudulent nondisclosure, because it believes the majority adds a fourth element to the Utah Supreme Court’s three-element test. According to the majority, a plaintiff who wishes to make out a valid claim for fraudulent nondisclosure must not only satisfy the three listed elements, but in addition must also prove that the defendant had a “willful intent to deceive” the plaintiff; the addition of this fourth element is unsupported by existing Utah Supreme Court precedent. But the district court correctly dismissed the claim on the alternative ground that it was barred by the doctrine of laches.

Read the full court opinion

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