Alarm Prot. Tech., LLC v. Bradburn

491 P.3d 947

ALARM PROTECTION TECHNOLOGY, LLC Appellee,

v.Ryan BRADBURN, Appellant.

No. 20190154

Supreme Court of Utah.

Heard October 14, 2020

Filed July 1, 2021

Erik A. Olson, Jason R. Hull, Trevor C. Lang, Salt Lake City, for appellee

Kamron Keele, Chicago, IL, for appellant

Associate Chief Justice Lee authored the opinion of the Court in which Justice Pearce joined. Chief Justice Durrant, Justice Himonas and Justice Petersen concur with exception to section III.

Associate Chief Justice Lee, opinion of the Court:

¶1 This is one of two pending cases in which a former sales representative of Alarm Protection Technology (APT) seeks to challenge a set of steps taken by APT to insulate itself from claims for unpaid compensation. The challenged steps include APT's payment of an advance in exchange for the execution of a confession of judgment, the entry of a judgment by confession, the issuance of a writ of execution against the sales representative's claims for unpaid commissions, APT's purchase of those claims at a constable sale, and APT's substitution as plaintiff on the claims against APT.

¶2 In this case, Ryan Bradburn asserts that APT's actions illegally and unfairly deprived him of the right to assert his claims for commissions owed to him by APT. Yet several elements of Bradburn's sweeping challenge to APT's "scheme"¹ are not properly presented for our review. The sole question presented goes to the district court's denial of Bradburn's motion for return of excess proceeds and unused property from APT's purchase of his claims. We affirm the denial of that motion. In so doing, we reject Bradburn's argument that APT was required to establish the value of his claims before executing on them and purchasing them at the constable sale, to presume (absent such proof) that the true value of the claims was established in the allegations of Bradburn's complaint, and to return to Bradburn "excess proceeds" or "unused property" calculated on the basis of those allegations.

I

¶3 Bradburn worked as a sales representative for APT from 2013 to 2015. During that period, he entered into written agreements under which APT agreed to pay him advances against future compensation² and Bradburn agreed to secure repayment of any unearned advances by executing a promissory note and confession of judgment.³

¶4 Bradburn signed one such agreement in December 2014. Under that agreement APT agreed to advance Bradburn $24,000 and Bradburn executed a promissory note and confession of judgment in that amount. Bradburn's relationship with APT ended a few months later—in June 2015. And a few years after that a dispute arose as to the parties’ financial obligations to each other.

¶5 On March 1, 2017, Bradburn filed an action in Fourth District Court alleging that APT and related parties owed him $348,434 in unpaid commissions and were also liable for treble damages (total damages of $1.1 million) and attorney fees under the Sales Representative Commission Payment Act, Utah Code §§ 34-44-101 –302. Later that same day, APT filed the $24,000 confession of judgment (signed by Bradburn in 2013) in Third District Court. Bradburn filed no objection, and a judgment by confession was entered on May 10, 2017.

¶6 APT then took steps toward collecting on the judgment by confession. In May 2017, it filed an application for a writ of execution, seeking to seize Bradburn's claims in the filed Fourth District case and to have them sold at a constable sale. The requested writ described the property as follows:

a. All rights, claims, interests, and choses in action that the judgment debtor has in the action entitled Ryan Bradburn v. Alarm Protection Technology, LLC, et al. , Fourth District Court, Provo, Case No. 170400290. Value Unknown.

b. All rights, claims, interests, and choses in action that the judgment debtor may have against Alarm Protection Technology, LLC, Alder Holdings, LLC, Alder Protection Holdings, LLC, Adam Schanz, their subsidiary, affiliates, officers, principals, employees, agents, attorneys, or staff. Value Unknown.

¶7 In July 2017, Bradburn filed a motion to quash the requested writ, asserting that APT's "scheme" deprived him of due process and that it violated public policy. The district court denied the motion to quash. It concluded that Utah law authorized APT to execute on Bradburn's claims and that doing so was not against public policy. But the court stayed execution of Bradburn's claims to allow him to file a motion to set aside the judgment by confession under rule 60(b) of the Utah Rules of Civil Procedure.

¶8 Bradburn did not appeal the denial of his motion to quash. Instead he filed a motion to vacate the judgment under rule 60(b). In that motion Bradburn asserted various challenges to APT's use of the confession of judgment to acquire his claims. The district court denied the motion to vacate the judgment after a two-day evidentiary hearing. It noted that Bradburn had "acknowledged that he had been given sufficient time to review the promissory note and confession of judgment before he signed them," and "acknowledged, and [APT's] records demonstrated, that he had received at least $24,000 in advancements or expenses paid on his behalf by [APT]." It also found that there was "sufficient evidence to determine that [Bradburn] voluntarily stopped working for [APT] on or about June 5, 2015." And it denied the motion to vacate in light of these determinations.

¶9 Again Bradburn did not appeal, and APT served Bradburn with a notice of constable sale under the writ of execution. After the required publication notice, a constable sale was held on February 20, 2018. APT appeared at the sale and purchased the claims on a credit bid of $2,500. And it then filed a partial satisfaction of judgment, providing an accounting of the sale proceeds and indicating that the $2,500 bid was allocated to constable fees of $497.28 and $2002.72 toward the $24,000 judgment.

¶10 Bradburn sought to challenge this allocation under a "motion for return of excess proceeds and unused property from constable sale." In that motion, Bradburn asserted that APT was liable to return to him the sum of "just under" $1.1 million, which he calculated by assigning a $1.1 million value (the amount pleaded in his complaint) to the claims asserted in the Fourth District action and subtracting the amount owed on the judgment by confession.

¶11 Bradburn withdrew this motion after briefing had already been submitted and just before a scheduled oral argument. But three months later he refiled an identical motion.⁴ The district court denied the renewed motion. It held that Bradburn had identified no basis for his assertion that there were excess "proceeds" or "property" to be delivered to Bradburn after the constable sale. The court based this determination on the only "evidence before the court" of the value of the claims—the certificate of constable sale and the accounting in APT's satisfaction of judgment. Because those documents showed that the claims were purchased for $2,500 and that $497.28 was allocated to costs, the court held that there were "no ‘proceeds’ left because the judgment was not paid in full" and "there was no ‘remaining property [or] proceeds’ to deliver to [Bradburn]."

¶12 The district court also rejected Bradburn's attempt to assert objections under the motion for return of proceeds that should have been raised in connection with his earlier motion to quash the writ of execution. It noted that the writ of execution had "listed the estimated value of the property as ‘unknown,’ " and observed that Bradburn had failed to "challenge the writ on that basis." In fact, the court noted that Bradburn had agreed that the value of his property was "unknown" given that the claims had not been adjudicated. And it concluded that this further supported its denial of Bradburn's motion.

¶13 Lastly, the district court also rejected Bradburn's assertion that either APT or the constable bore some sort of burden to present an expert or other valuation of the property. The court found "nothing in the rules that requires a creditor to hire an expert witness to value property before it is sold." Alternatively, the court emphasized that there was "no evidence in the record" to support Bradburn's assertion that his claims "were worth anywhere near $1 million." The only evidence of value in the record came from the highest bid at the constable sale, and Bradburn had made no showing that he was "entitled to any credit to his judgment other than the $2500 credit bid less the amount kept by the constable for noticing and holding the sale."

¶14 Bradburn then filed this appeal, insisting that APT was "required under Utah law ... to estimate the value" of the property that was the subject of the writ of execution, and asserts that he is entitled to a payment of "excess proceeds" based on the alleged value of the claims set forth on the face of the complaint in the Fourth District Court ($1.1 million).

¶15 Bradburn preserved only a narrow objection in the district court proceedings before us on this appeal—in his motion for return of excess proceeds. And we see no reason to disagree with the district court's decision denying that motion—much less to reverse under the governing standard of review. See Utah Dep't of Transp. v. G. Kay, Inc. , 2003 UT 40, ¶ 5, 78 P.3d 612 (we review findings of fact for clear error and conclusions of law for correctness).

II

¶16 Bradburn's motion for return of excess proceeds was both procedurally barred and groundless. And our affirmance of the decision to deny it forecloses a range of other claims raised in Bradburn's briefing.

¶17 In advancing his motion for return of excess proceeds, Bradburn cited rule 64(f)(3) of the Utah Rules of Civil Procedure, which directs the court to "order any remaining property and proceeds of sales delivered to the defendant" upon discharge of a writ, and rule 69B(e), which provides for the "order" in which the property is to be applied under...