Lewis v. U.S. Bank Tr.

542 P.3d 988

2024 UT App 3

Brian K. LEWIS, Appellant,

v.U.S. BANK TRUST, NA, AS TRUSTEE FOR LSF9 MASTER PARTICIPATION TRUST, Appellee.

No. 20220434-CA

Court of Appeals of Utah.

Filed January 5, 2024

Fourth District Court, Nephi Department, The Honorable Anthony L. Howell, No. 180600022

Stephanie L. O’Brien, Provo, Attorney for Appellant

Heidi G. Goebel, Salt Lake City, Keith S. Anderson, and Spencer MacDonald, Provo, Attorneys for Appellee

Judge Amy J. Oliver authored this Opinion, in which Judges Michele M. Christiansen Forster and John D. Luthy concurred.

Opinion

OLIVER, Judge:

¶1 After foreclosure was initiated against property he purchased in Mona, Utah (the Property), Brian K. Lewis sued the foreclosing parties, spurring a host of litigation. Lewis appeals the district court’s grant of summary judgment on the quiet title and unjust enrichment claims he made against U.S. Bank Trust, NA (U.S. Bank). Lewis also appeals the court’s grant of summary judgment to U.S. Bank on its claim for judicial foreclosure on the Property and the court’s denial of his rule 60(b) motion for relief from this portion of the judgment. For the reasons laid out below, we affirm the district court in all respects.

BACKGROUND

¶2 In 2008, the prior owner (Prior Owner) of the Property financed his purchase of the Property by executing a promissory note and a deed of trust securing the note. The loan was eventually sold to LSF9 Master Participation Trust (LSF9), and after several assignments, the deed was assigned to U.S. Bank, as trustee on behalf of LSF9. Prior Owner defaulted on the loan and filed for bankruptcy. Prior Owner’s bankruptcy petition was discharged, and along with it, his personal obligation on the loan.¹

¶3 In April 2010, notice of default on the loan was recorded, noting there had been no payment on the obligation since Prior Owner’s default. This notice was later "rescind[ed], cancel[led] and withdraw[n]" on May 1, 2014. But a new notice of default was entered the same day. A few months later, in August 2014, Prior Owner sold the Property to Lewis. Lewis claims he "has maintained" and "put substantial improvements into the Property" since 2014.

The First Lawsuit

¶4 In July 2016, Lewis was informed that a nonjudicial foreclosure sale of the Property would occur in September. Lewis filed a complaint against the foreclosing parties in state district court, seeking to quiet title and obtain a judgment preventing future foreclosure. Lewis argued the foreclosing parties had failed to foreclose within the statutory period and were no longer entitled to do so. This suit (the First Lawsuit) was removed to the United States District Court for the District of Utah. See Lewis v. Caliber Home Loans, Inc., No. 2:16-cv-01252, 2018 WL 485967 (D. Utah Jan. 18, 2018). The federal district court granted summary judgment in favor of the foreclosing parties, concluding the statute of limitations period began on May 1, 2014, and had not run by the time foreclosure proceedings began in September 2016. Id. at *1. Lewis appealed this decision to the United States Court of Appeals for the Tenth Circuit, but the appeal was dismissed for lack of prosecution. See Lemis v. Caliber Home Loans, Inc., No. 18-4020, 2018 WL 3996494, at *1 (10th Cir. May 3, 2018).

The Current Lawsuit

¶5 Days after Lewis’s Tenth Circuit appeal was dismissed, he filed a new complaint (the Current Lawsuit) in state court, this time against U.S. Bank. Lewis again sought to quiet title in the Property and to enjoin U.S. Bank from "asserting any estate, right, title or interest" in the Property. U.S. Bank removed the action to federal district court. Lewis opposed removal and filed a second amended complaint in state court. The state court concluded it did not have jurisdiction over the amended complaint as the case had been removed to federal court, but based on lack of diversity jurisdiction, the federal court eventually remanded the case to the state court.

¶6 U.S. Bank then filed a motion to dismiss Lewis’s complaint under rule 12(b)(6) of the Utah Rules of Civil Procedure, arguing the suit was barred by res judicata and failed to state a claim upon which relief could be granted. Thereafter, the court permitted Lewis to amend his complaint. Lewis’s third amended complaint raised a quiet title claim labeled "Quiet Title—Laches" wherein he alleged U.S. Bank or its predecessors in interest had "unreasonably delayed enforcing" their rights against the Property.² The complaint also alleged U.S. Bank had been unjustly enriched by Lewis’s maintenance and improvement of the Property.

¶7 U.S. Bank then filed another motion to dismiss, arguing again that Lewis’s claims were barred by res judicata and were otherwise meritless. The court agreed that Lewis’s claims for quiet title and unjust enrichment were barred by res judicata and dismissed them because they "could and should have been brought in the earlier lawsuit." Lewis appealed the dismissal of his claims to this court. We held that "[b]ecause the district court could not decide this issue without considering materials outside the pleadings, the motion to dismiss should have been converted to one for summary judgment" and we remanded the case to the district court. Lewis v. U.S. Bank Trust NA, 2020 UT App 55, ¶ 1, 463 P.3d 694. Thereafter, U.S. Bank answered Lewis’s third amended complaint, again arguing his claims were barred by res judicata.

¶8 While the Current Lawsuit was pending, U.S. Bank had initiated a judicial foreclosure of the Property. On U.S. Bank’s motion, the court consolidated the judicial foreclosure action into the Current Lawsuit. On April 30, 2020, the May 1, 2014, notice of default was cancelled.

¶9 U.S. Bank then simultaneously filed two motions for summary judgment. Though the motions were both captioned "Motion for Summary Judgment and Memorandum in Support," they addressed different issues—one motion concerned Lewis’s claims for quiet title (the Quiet Title Motion), while the other focused on U.S. Bank’s foreclosure claim (the Foreclosure Motion). The Foreclosure Motion stated on its first page that "U.S. Bank Trust has simultaneously filed a separate motion for summary judgment as to Mr. Lewis’s claims against U.S. Bank Trust and which is adopted in full" and later likewise noted the "simultaneously-filed Motion for Summary Judgment that addresses Mr. Lewis’s quiet title and unjust enrichment claims." The Quiet Title Motion argued Lewis’s quiet title and unjust enrichment claims were barred by res judicata. The day after U.S. Bank filed its two motions for summary judgment, it filed a Notice of Errata, noting that it had "[i]nadvertently" included a watermark on the Quiet Title Motion. U.S. Bank attached a corrected motion.

¶10 Lewis’s counsel (Counsel) "mistakenly believed that [the Quiet Title Motion] was the only pending motion for summary judgment." Thus, Lewis filed a single Opposition to Defendants’ Motion for Summary Judgment addressing only the Quiet Title Motion. Though Lewis did not directly oppose the Foreclosure Motion, he did briefly address judicial foreclosure in his opposition to the Quiet Title Motion, arguing U.S. Bank did not have a right to foreclose because it could not demonstrate a "chain of title" establishing assignment of the deed of trust.

¶11 After a hearing, the court granted both of U.S. Bank’s motions for summary judgment. The court concluded Lewis’s quiet title and unjust enrichment claims were barred as a matter of law by claim preclusion. And the court granted summary judgment to U.S. Bank on its judicial foreclosure claim, finding the statute of limitations had not run on the claim. U.S. Bank prepared a proposed written order memorializing the court’s judgment, but Lewis objected, arguing the order failed "to clarify and make clear the consequences and facts surrounding U.S. Bank’s filing of two (2) Motions for Summary Judgment … with identical titles, followed by an Errata." The court entered final judgment over Lewis’s objection.

¶12 U.S. Bank later filed a motion to amend the judgment under rule 59 of the Utah Rules of Civil Procedure, arguing the court had not properly addressed Lewis’s quiet title claims. Shortly thereafter, Lewis filed a rule 60(b) motion for relief from the court’s grant of summary judgment to U.S. Bank on its judicial foreclosure claim. Counsel argued she "encountered a scenario that was unprecedented in her practice of law when U.S. Bank filed two (2) separate pleadings titled ‘Motion for Summary Judgment and Memorandum in Support’" and that the filing of the Errata caused "confusion," which constituted mistake or excusable neglect under rule 60(b)(1). Counsel declared in a subsequent affidavit that due to the Errata "and the fact that … multiple pleadings were filed by [U.S. Bank] with the same title on the same date," she "mistakenly failed to realize a separate motion for summary judgment was filed on U.S. Bank’s claim for judicial foreclosure."

¶13 After a hearing, the court granted U.S. Bank’s rule 59 motion and issued an amended judgment.³ The court denied Lewis’s rule 60(b) motion, finding Lewis had "not established the requisite showing of ‘due diligence’ required for relief under" rule 60(b)(1). The amended judgment affirmed the court’s prior grant of summary judgment to U.S. Bank on both Lewis’s claims and U.S. Bank’s judicial foreclosure claim.

ISSUES AND STANDARDS OF REVIEW

[1] ¶14 On appeal, Lewis argues the district court erred in concluding his claims for quiet title and unjust enrichment were barred by claim preclusion. "Whether res judicata, and more specifically claim preclusion, bars an action presents a question of law that we review for correctness." Pioneer Home Owners Assoc. v. TaxHawk Inc., 2019 UT App 213, ¶ 19, 457 P.3d 393 (cleaned up).

¶15 Next, Lewis argues the district court improperly granted summary judgment to U.S. Bank on its judicial foreclosure claim. In particular, he argues the court erred in...