Mulligan v. Alum Rock Riverside

556 P.3d 21

2024 UT 22

Molly J. MULLIGAN and John P. Mulligan, Appellants,

v.ALUM ROCK RIVERSIDE, LLC, Appellee.

No. 20221024

Supreme Court of Utah.

Heard April 10, 2024

Filed July 18, 2024

Rehearing Denied August 21, 2024

Third District, Salt Lake County, The Honorable Adam T. Mow, No. 206927043

Bradley L. Tilt, Salt Lake City, Felicia B. Canfield, Cody, Wyo., for appellants

Benjamin D. Johnson, KC Hooker, Salt Lake City, for appellee

Justice Hagen authored the opinion of the Court, in which Chief Justice Durrant, Associate Chief Justice Pearce, Justice Petersen, and Justice Pohlman joined.

INTRODUCTION

¶1 This case stems from a California judgment that Alum Rock Riverside, LLC obtained against Brett Del Valle. After domesticating the judgment in Utah and recording it with the county recorder, Alum Rock received a writ of execution allowing it to seize and sell a property in Weber County.

¶2 At the time Alum Rock recorded the judgment with the county recorder, the property was owned by a revocable trust that was established and administered by Brett and his wife. But the trust had sold the property by the time Alum Rock applied for the writ. And when the court issued the writ, the property’s new owners—the Mulligans—objected, arguing that (1) Alum Rock failed to create a judgment lien because it did not record the judgment in the registry of judgments, (2) the writ was not available because the trust—not Brett—held title to the property when the judgment was domesticated in Utah, and (3) the district court lacked jurisdiction to issue the writ because the property was located in a different judicial district.

¶3 The district court upheld the writ over the Mulligans’ objections, and we affirm. First, we hold that Alum Rock created a judgment lien when it recorded the judgment in the county recorder’s office. As of July 1, 2002, a party seeking a judgment lien is not required to record the judgment in the registry of judgments. Second, we hold that the writ was available against the property, even though the title was held in the name of a revocable trust, because Brett retained all indicia of ownership over the property when the lien was created. And third, we hold that the Mulligans have not identified a relevant limitation on the district court’s jurisdiction that would prevent it from issuing the writ.

BACKGROUND

¶4 Alum Rock Riverside, LLC sued Brett Del Valle in California state court for breach of contract and other claims. Alum Rock prevailed, and the court issued a judgment in its favor totaling more than $4 million. Soon after, Alum Rock domesticated the judgment in Utah’s Third District Court. Because the Del Valle Family Trust owned property in Weber County, Utah, Alum Rock recorded the judgment in the Weber County Recorder’s Office.

¶5 Brett and his wife, Traci, had formed the trust years earlier, naming themselves as trustees. Brett and Traci retained broad powers over the trust and its property, including the power to revoke the trust, amend it, and transfer property from it. In addition, the trust empowered Brett and Traci, as trustees, to hold, manage, control, lease, and encumber trust property. Several years after they created the trust, Brett and Traci, acting as trustees, acquired the Weber County property at issue in this case.

¶6 The trust continued to hold title to the property when Alum Rock recorded its judgment against Brett in the county recorder’s office. A few months after Alum Rock recorded the judgment, however, the trust conveyed the property to Molly and John Mulligan. And one month after that, Alum Rock applied for a writ of execution against the property, identifying Brett as the judgment debtor and asking the district court to "direct the sheriff to seize and sell" the property to satisfy the judgment.

¶7 When the court issued the writ as requested, the Mulligans challenged it. Acknowledging that their challenge "rises or falls" on whether a lien "was created and attached to the property," they asserted that Alum Rock did not do what the Judgment Act requires to create a judgment lien on real property.¹ Specifically, they claimed that Alum Rock did not fully comply with the following statutory requirements, found in Utah Code section 78B-5-201:

(2) On or after July 1, 1997, a judgment entered in a district court does not create a lien upon or affect the title to real property unless the judgment is filed in the Registry of Judgments of the office of the clerk of the district court of the county in which the property is located.

(3)(a) On or after July 1, 2002, … a judgment entered in a district court does not create a lien upon or affect the title to real property unless the judgment or an abstract of judgment is recorded in the office of the county recorder in which the real property of the judgment debtor is located.

Utah Code § 78B-5-201(2)-(3)(a) (2021).

¶8 The Mulligans argued that because Alum Rock obtained its judgment against Brett in 2020—after both July 1, 1997, and July 1, 2002—Alum Rock needed to comply with the requirements of both subsections: filing the judgment in the registry of judgments and recording it with the county recorder. Because Alum Rock did not file the judgment in the registry of judgments, the Mulligans reasoned, a lien was not created.

¶9 The Mulligans also claimed that, under the Judgment Act and the Utah Rules of Civil Procedure, the writ was not "available" against the property. Under the Judgment Act, real property subject to a judgment lien "includes all the real property … owned or acquired at any time by the judgment debtor during the time the judgment is effective." Id. § 78B-5-202(7)(c)(ii) (2021). And under rule 64E of the Utah Rules of Civil Procedure, "[a] writ of execution is available to seize property in the possession or under the control of the defendant following entry of a final judgment." Utah R. Civ. P. 64E(a). According to the Mulligans, the writ was "issued improperly" because (1) Brett never owned the property (the trust did), and (2) in any event, he did not possess or control the property at the relevant time (the Mulligans did).

¶10 Finally, the Mulligans questioned the district court’s jurisdiction. In their view, the court lacked jurisdiction to issue the writ because the proceedings fall within reach of a venue statute that lists actions that "shall be tried in the county in which the [property] … is situated." See Utah Code § 78B-3-301(1) (2021).² The Mulligans also claimed that under Utah caselaw, actions in which the "main question … involves title to real property" may be heard only by the district court where the property is located. (Quoting Calder v. Third Jud. Dist. Ct., 2 Utah 2d 309, 273 P.2d 168, 171 (1954).) Because the property here is outside the district court’s geographic boundaries, the Mulligans maintained that the court lacked jurisdiction to issue the writ.

¶11 The district court upheld the writ against the Mulligans’ challenge. It first concluded that the Judgment Act did not require Alum Rock to file its judgment in the registry of judgments, as the Mulligans had argued, and that Alum Rock’s lien attached when the judgment was recorded with the county recorder. Next, the court determined that because the property was under Brett’s control when Alum Rock domesticated the judgment, the property was subject to execution under rule 64E. Finally, the court rejected the Mulligans’ challenge to its jurisdiction, explaining that it had the power to issue the writ even though the property is located outside the Third District.

¶12 The Mulligans appeal, and we have jurisdiction under Utah Code subsection 78A-3-102(3)(j).

ISSUES AND STANDARDS OF REVIEW

[1] ¶13 The parties dispute whether Alum Rock created a judgment lien on the property. "Judgment liens are creatures of statute …." Gildea v. Wells Fargo Bank, N.A., 2015 UT 11, ¶ 12, 347 P.3d 385. Accordingly, whether the property here is encumbered by Alum Rock’s purported judgment lien raises a question of statutory interpretation, a legal question that we review for correctness. See Marion Energy, Inc. v. KFJ Ranch P’ship, 2011 UT 50, ¶ 12, 267 P.3d 863.

[2] ¶14 The Mulligans also contest the district court’s conclusions that the property is subject to the writ and that the court had jurisdiction to issue the writ. Because these determinations were premised on the court’s interpretation of Utah law, they also present legal questions, which we review for correctness. See Peak Alarm Co. v. Salt Lake City Corp., 2010 UT 22, ¶ 16, 243 P.3d 1221.

ANALYSIS

[3, 4] ¶15 The Mulligans challenge three aspects of the district court’s decision, each of which turns in part on statutory interpretation. "The aim of statutory interpretation is to ascertain the intent of the legislature, and the best evidence of the legislature’s intent is the plain language of the statute itself." Sun- Stone Realty Partners X LLC v. Bodell Constr. Co., 2024 UT 9, ¶ 11, 545 P.3d 260 (cleaned up). But because "statutory text may not be plain when read in isolation," State v. J.M.S. (In re J.M.S.), 2011 UT 75, ¶ 13, 280 P.3d 410 (cleaned up), "we determine the meaning of the text given the relevant context of the statute (including, particularly, the structure and language of the statutory scheme)," McKitrick v. Gibson, 2021 UT 48, ¶ 19, 496 P.3d 147 (cleaned up).

[5] ¶16 We first address the Mulligans’ contention that Alum Rock skipped a necessary step to create a lien on the property by not filing its judgment in the registry of judgments. We clarify that to create a lien from a foreign judgment, creditors must adhere to relevant requirements under the Judgment Act as well as the Foreign Judgment Act. But since July 1, 2002, creditors do not need to file judgments in the registry of judgments to create a lien. Thus, Alum Rock created a valid lien when it recorded its judgment in the county recorder’s office.

¶17 Next, we assess whether Brett "owned" the property, allowing Alum Rock’s...