Mardanlou v. Ghaffarian

351 P.3d 114

2015 UT App 128

Hassan MARDANLOU, Plaintiff and Appellee

v.Ali GHAFFARIAN and Nasrin Faezi, Defendants and Appellants.

No. 20120778–CA.

Court of Appeals of Utah.

May 21, 2015.

Michael D. Zimmerman, Erin B. Hull, Salt Lake City, and Noella A. Sudbury, Attorneys for Appellants.

J. Kent Holland, Salt Lake City, and John P. Bagley, Attorneys for Appellee.

Judge J. FREDERIC VOROS JR. authored this Opinion, in which Judges JAMES Z. DAVIS and STEPHEN L. ROTH concurred.

Opinion

VOROS, Judge:

¶ 1 The judgment on appeal was entered in 2004 and unconditionally affirmed in 2006. In 2013, the district court undertook, appellants contend, to alter the terms of that judgment. The principal question on appeal is whether the district court had jurisdiction to do so. We conclude that it did not and accordingly vacate the post-judgment rulings of the district court.

BACKGROUND

¶ 2 In 1989, Ali Ghaffarian and his wife Nasrin Faezi (Defendants) established Access Auto as a wholesale vehicle business. In 1991, Defendants decided to rent a large lot (the Property) on State Street in Salt Lake City to expand their wholesale business into a retail business selling used vehicles. To “share some expenses” and “help[ ] each other,” Defendants approached a friend, Hassan Mardanlou, about cosigning a lease on the Property. Mardanlou owned a wholesale vehicle business called M & M Motors. Defendants and Mardanlou cosigned a lease, which included renewal and future-purchase provisions. The parties shared the Property, but they maintained “two different dealership[s].”

¶ 3 In 1992, M & M Motors ran out of money to maintain inventory for its wholesale business. Defendants began paying Mardanlou as a salaried employee for Access Auto, and Mardanlou worked there as a car salesman and lot manager. In 1994, Defendants unilaterally exercised the option to purchase the Property. Mardanlou did not contribute to the down payment, nor did he make any mortgage payments on the Property. In 1997, Mardanlou terminated his employment with Access Auto.

¶ 4 The following year, Mardanlou sued Defendants, claiming partnership status in Access Auto and seeking money damages. In the 2002 trial, the district court concluded that Defendants and Mardanlou had indeed entered into an oral partnership agreement. It awarded Mardanlou “one-half the value of the [Property],” plus interest, “less any remaining outstanding mortgage related to the purchase” of the Property. In 2003, the district court entered a judgment requiring Defendants “to transfer to [Mardanlou] by deed one-half of the real [P]roperty known as Access Auto.” It further noted that any “reallocation of debt or mortgage on said [P]roperty [would be] subject to further hearing.”

¶ 5 On September 13, 2004, the district court entered an amended judgment (the 2004 Amended Judgment) concerning rents and offsets. The district court awarded Mardanlou rents from the date of dissolution of the partnership in 1997 through the date of the 2004 Amended Judgment. Defendants timely appealed.

The First Appeal

¶ 6 On appeal before this court, Defendants challenged the district court's ruling that they and Mardanlou had formed a partnership. Mardanlou v. Ghaffarian (Mardanlou I ), 2006 UT App 165, ¶ 15, 135 P.3d 904, overruled on other grounds by Ellsworth Paulsen Constr. Co. v. 51–SPR–L.L.C., 2008 UT 28, 183 P.3d 248. Defendants also contended that the district court erred in awarding Mardanlou rents from the dissolution of the partnership in 1997 until the date of the 2004 Amended Judgment.Id. ¶ 22. We affirmed the district court's finding of an oral partnership between the parties. Id. ¶ 14. We also affirmed its award of rents to Mardanlou for “one-half the annual rental value of the Property,” concluding that the record supported the district “court's award of rental value from 1997 to judgment.” Id. ¶ 23. Defendants filed a petition for certiorari, which our supreme court denied. Mardanlou v. Ghaffarian, 150 P.3d 58 (Utah 2006).

Post–Appeal Proceedings

¶ 7 In 2008, after the appeal, Defendants transferred to Mardanlou by quitclaim deed “a one-half interest as tenant in common” in the Property. Defendants also paid Mardanlou net rents plus interest for rents accrued through the date of entry of the 2004 Amended Judgment.

¶ 8 In 2011, the district court ruled that the Property was still “partnership property,” and that Defendants had “failed to present any case law, rule or statute that would alter the status of the Property as being held as a tenant in partnership.”

¶ 9 In 2012, the district court ordered Defendants to prepare a claim of credits for the amounts he paid in maintenance and improvements, insurance, and taxes on the Property through the present. In this April 24, 2012 Ruling (the 2012 Ruling), the district court indicated that these credits would be set off against the rents plus interest that had accrued from the date of entry of the 2004 Amended Judgment through the present. Defendants remonstrated that the 2004 Amended Judgment required them to pay rents only until the date of the Amended Judgment, September 13, 2004. In response, the district court reconsidered and “clarifie[d]” the text of the 2004 Amended Judgment. In the 2012 Ruling, the court explained that the requirement that Defendants pay Mardanlou rents from November 7, 1997, “until the date hereof” did not mean until the date of the 2004 Amended Judgment. Instead, the court defined the period for which Defendants owed rents to Mardanlou as “beginning from November 7, 1997, until the completion of winding-up, settling of accounts, and distribution of assets.” Based on this “clarifi[cation],” the district court entered a final order in March 2013 (the 2013 Order). That order awarded Mardanlou an additional $299,527.09 in rents accruing from the date of the 2004 Amended Judgment until the date of the 2013 Order. Defendants appeal.

ISSUES ON APPEAL

¶ 10 Defendants ask this court to vacate the 2013 Order. They offer three grounds for doing so.

¶ 11 First, Defendants contend that the district court lost jurisdiction over the case after it entered the 2004 Amended Judgment and this court affirmed that judgment on appeal in Mardanlou I, 2006 UT App 165, 135 P.3d 904.

¶ 12 Second, Defendants contend that even if the district court retained jurisdiction to award post-judgment rents, res judicata barred such an award.

¶ 13 Finally, Defendants contend that even if the district court had jurisdiction to award post-judgment rents and was free to do so under res judicata principles, the award of rents accruing after the 2008 conveyance of a tenancy in common in the Property constituted error. The award constituted error, Defendants argue, because tenants in common have no obligation to pay rents to one another under the circumstances presented here.

¶ 14 Because we agree with Defendants on their first contention, we need not address their second and third contentions.

ANALYSIS

¶ 15 Defendants contend that the district court lacked jurisdiction over the case after entering the 2004 Amended Judgment and after that judgment was unconditionally affirmed on appeal. Mardanlou responds that the law-of-the-case doctrine and the fact that the partnership has never been wound up bar Defendants' claim. Mardanlou further claims that we must affirm even if the district court lacked jurisdiction to alter or amend its judgment, because the district court here merely enforced, not altered, its judgment. We review the district court's determination on jurisdictional issues for correctness, giving no deference to the district court's decision. See Johnson v. Johnson, 2010 UT 28, ¶ 6, 234 P.3d 1100.

I. A District Court Lacks Jurisdiction to Amend a Final Judgment Unconditionally Affirmed on Appeal.

¶ 16 “[I]t is settled law that a [district] court is free to reassess its decision at any point prior to entry of a final order or judgment.” Hall v. Utah State Dep't of Corr., 2001 UT 34, ¶ 12, 24 P.3d 958 (citation and internal quotation marks omitted); see also U.P.C., Inc. v. R.O.A. Gen., Inc., 1999 UT App 303, ¶¶ 55–56, 990 P.2d 945 (noting that district courts may ordinarily change the terms of a judgment before entering final judgment). However, “[a]s a general rule, unless control over [the judgment] has been retained in some proper manner, ... no final judgment can be amended after the term at which it was rendered or after it otherwise becomes a final judgment.” Frost v. District Court of First Judicial Dist., 96 Utah 106, 83 P.2d 737, 740 (1938) (citation and internal quotation marks omitted).

The [district] court cannot under the guise of correcting its record put upon it an order or judgment it never made or rendered, or add something to either which was not originally included although it might and should have so ordered or adjudged in the first instance. It cannot thus repair its own lapses and omissions to do what it could legally and properly have done at the right time.

Id. (citation and internal quotation marks omitted). Accordingly, any “variances or conflicts” over the language of the judgment “must be pointed out, and (by proper proceedings) remedied, while the [district] court still has jurisdiction of the cause.”¹ Id. at 737.

¶ 17 “Generally, when a party files a timely notice of appeal, the court that issued the judgment loses jurisdiction over the matters on appeal.” Myers v. Utah Transit Auth., 2014 UT App 294, ¶ 15, 341 P.3d 935 (citation and internal quotation marks omitted); see also Cheves v. Williams, 1999 UT 86, ¶ 45, 993 P.2d 191 (“ ‘This court has long followed the general rule that the [district] court is divested of jurisdiction over a case while it is under advisement on appeal.’ ” (quoting White v. State, 795 P.2d 648, 650 (Utah 1990) )).² However, “absent a stay of judgment either by the [district] court itself or by an appellate court pending appeal, a [district] court has jurisdiction to enforce its judgment.” Cheves, 1999 UT 86, ¶ 48, 993 P.2d 191.

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