Erda Community Association v. Skywalk Development

2024 UT App 161

THE UTAH COURT OF APPEALS

ERDA COMMUNITY ASSOCIATION INC., KALEM SESSIONS, RYAN
SORENSEN, AND DENISE MOODY-MARTIN,
Appellants,
v.
GRANTSVILLE CITY AND SKYWALK DEVELOPMENT LC,
Appellees.

Opinion
No. 20230004-CA
Filed November 7, 2024

Third District Court, Tooele Department
The Honorable Teresa Welch
No. 210300450

Janet M. Conway, Attorney for Appellants
Brent N. Bateman, J. Tayler Fox, Tyler R. Cahoon,
and John Tipton, Attorneys for Appellee Skywalk
Development
Robert C. Keller, Nathanael J. Mitchell, Benjamin J.
Cilwick, and Brett M. Coombs, Attorneys for
Appellee Grantsville City

JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES RYAN M. HARRIS and JOHN D. LUTHY concurred.

MORTENSEN, Judge:

¶1 This case is about one piece of land that two cities want.
Skywalk Development LC (Skywalk) owned a parcel of land (the
Skywalk Parcel) located within the proposed boundaries of Erda,
a would-be city hoping to incorporate. At the same time, the
Skywalk Parcel was being annexed into neighboring Grantsville
City. The Erda Community Association—a group of mostly
current and former Erda residents—and several individual
Erda Community Association v. Grantsville City

plaintiffs (collectively, Appellants) sued, claiming that the
attempted annexation was void and seeking to stop Grantsville
City from continuing the annexation process.

¶2 The district court dismissed Appellants’ claims for lack of
standing. Just as our court did in Erda Community Ass’n v.
Grantsville City, 2024 UT App 126, we affirm the district court’s
holding as to Appellants’ statutory standing, but reverse and
remand the matter for the district court to determine
whether Appellants have traditional standing to bring their
constitutional claims. See id. ¶ 61. Additionally, we reverse an
award of attorney fees to Skywalk related to a claimed wrongfully
issued injunction.

BACKGROUND

¶3 This appeal comes to us as one of many disputes arising in
connection with Erda’s incorporation process. While the now-city
was being incorporated, landowners tried to persuade other
municipalities to annex their land out of Erda’s proposed
boundaries. A more complete statement of the background facts
regarding Erda’s incorporation and the emerging disputes can be
found in Erda Community. See id. ¶¶ 3–4.

¶4 The facts diverge, however, when it comes to the parcel at
issue. This case involves the approximately 250-acre Skywalk
Parcel. In 2020, Skywalk filed a “Notice of Intent to File Petition to
Annex” (the Notice), evincing their desire for Grantsville City to
annex the Skywalk Parcel. The Grantsville City Recorder declared
that, weeks after the Notice was filed, she could not locate the
accompanying map required by statute. A representative from
Skywalk affirmed that a map had been included with the Notice
and supplied an additional copy. The lieutenant governor’s office
did not recognize the Notice as properly filed before the statutory
deadline.

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Erda Community Association v. Grantsville City

¶5 But Grantsville City continued to pursue annexation of the
Skywalk Parcel. In early 2021, Skywalk filed its “Application for
Annexation” and its “Petition for Annexation to Grantsville City.”
The Grantsville City Council voted to accept the petition, and the
Grantsville City Recorder submitted an “Annexation
Certification” to the city council.

¶6 In April 2021, Appellants filed suit against Grantsville City.
Shortly thereafter, Skywalk intervened in the case. Appellants
then filed a motion for a preliminary injunction to stop
Grantsville City from completing the annexation. Appellants’
initial complaint, their motion and memorandum, as well as their
reply memorandum, asked only for Grantsville City to be
enjoined.

¶7 During the summer of 2021, the court held evidentiary
hearings on the request for a preliminary injunction. Again,
Appellants asked only for Grantsville City to be enjoined. The
district court granted Appellants’ motion for a preliminary
injunction. The order enjoined “Respondents . . . from taking
further steps to annex the Skywalk [Parcel] into Grantsville City.”
Notably, while the application asked only for Grantsville City to
be restrained, the order drafted by the court granted the motion
against “Respondents,” a term that the district court defined to
include both Grantsville City and Skywalk.

¶8 Skywalk subsequently filed a motion for summary
judgment. The court granted Skywalk’s motion, concluding
that Appellants did not meet the statutory standing requirements
or the administrative exhaustion requirements. Thereafter,
Skywalk filed a motion for an award of attorney fees and costs,
arguing that it had been wrongfully enjoined. The district court
granted the motion as to $240,991.49 of the requested attorney fees
and costs pursuant to rule 65A of the Utah Rules of Civil
Procedure.

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Erda Community Association v. Grantsville City

ISSUES AND STANDARDS OF REVIEW

¶9 Appellants seek reversal of the district court’s entry of
summary judgment and award of attorney fees in favor of
Skywalk.

¶10 Generally, “we review the district court’s summary
judgment ruling for correctness and view all facts and reasonable
inferences in favor of the nonmoving party.” GeoMetWatch Corp.
v. Utah State Univ., 2023 UT App 124, ¶ 18, 538 P.3d 933 (cleaned
up). Moreover, while the question of standing is “a mixed
question of fact and law” because it involves “the application of a
legal standard to a particularized set of facts,” Planned Parenthood
Ass’n of Utah v. State, 2024 UT 28, ¶ 42, 554 P.3d 998 (cleaned up),
“because this particular mixed question is thought to be primarily
a question of law, we . . . review[] the district court’s
determination for correctness,” Erda Cmty. Ass’n v. Grantsville
City, 2024 UT App 126, ¶ 17 (cleaned up); see also McKitrick v.
Gibson, 2021 UT 48, ¶ 14, 496 P.3d 147 (stating that “the question
of whether a specific individual has standing to assert a claim is
primarily a question of law”).

¶11 Whether the district court erred in awarding attorney fees
under rule 65A of the Utah Rules of Civil Procedure is a question
of law, which we also review for correctness. IKON Office Sols.,
Inc. v. Crook, 2000 UT App 217, ¶ 9, 6 P.3d 1143.

ANALYSIS

¶12 Recently this court issued an opinion in the case Erda
Community. At issue in that case was a 550-acre parcel within the
proposed boundaries of Erda that Grantsville City attempted to
annex. Erda Cmty. Ass’n v. Grantsville City, 2024 UT App 126, ¶ 1.

¶13 Though the two cases concern different parcels of land, the
legal issues and arguments on appeal are essentially identical. In

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Erda Community Association v. Grantsville City

both cases, Appellants bring “both statutory-based and
constitutional-based claims for relief” and ask us to determine
whether their lack of statutory standing precludes recovery on
either type of claim. See id. ¶ 18. Separate and distinct from those
issues is Appellants’ challenge to the award of attorney fees to
Skywalk. Given the similarity of these two appeals, our decision
in Erda Community applies directly here.

I. Standing

¶14 A more complete discussion of standing requirements,
both constitutional and statutory, can be found in Erda
Community. See id. ¶¶ 19–33. As we explained in Erda Community,
“there exist material differences between ‘constitutional standing’
and ‘statutory standing.’” Id. ¶ 20. Constitutional standing is
required of every plaintiff. Id. ¶ 22. In addition, statutory standing
is required of statutory claimants. Id. ¶¶ 25–26. Thus, if statutory
claimants do not have statutory standing, they cannot bring their
claim; it doesn’t matter whether they have constitutional
standing. On the other hand, constitutional claimants need only
demonstrate constitutional or traditional standing to bring their
claims.

¶15 As in Erda Community, here “Appellants’ main grievance is
statutory.” See id. ¶ 35. Appellants assert that Grantsville City
certified a deficient annexation petition in violation of the
Annexation Code. See Utah Code §§ 10-2-401 to -429 (2020). Any
rights under the Annexation Code are created by statute, and
thus, a plaintiff seeking relief under those provisions must
demonstrate statutory standing. Erda Cmty., 2024 UT App 126,
¶ 35 (“These claims for redress are entirely statutory, and
therefore Appellants must demonstrate statutory standing in
order to bring them.”).

¶16 In both cases, Appellants allege that they need not establish
standing under the Annexation Code because they have statutory

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Erda Community Association v. Grantsville City

standing through the Declaratory Judgment Act. See id. ¶ 9; see also
Utah Code §§ 78B-6-401 to -412. This reflects an inaccurate
construction because “despite its broad terms, the Declaratory
Judgment Act does not open courthouse doors that would be
closed without it. The statutory creation of relief in the form of a
declaratory judgment does not create a cause of action or grant
jurisdiction to the court where it would not otherwise exist.”
Summit County v. Town of Hideout, 2024 UT 39, ¶ 32 (cleaned up);
see also Erda Cmty., 2024 UT App 126, ¶ 38.

¶17 While the Declaratory Judgment Act provides a remedy,
plaintiffs must demonstrate they have standing to access that
remedy. When they are statutory claimants, that means
demonstrating statutory standing. See Summit County, 2024 UT 39,
¶ 33 (“Parties may bring actions under the Declaratory Judgment
Act only if they can show that the justiciable and jurisdictional
elements requisite in ordinary actions—including standing—are
present.” (cleaned up)). Simply put, the Declaratory Judgment
Act does not confer standing—it requires it.

¶18 With no help from the Declaratory Judgment Act,
Appellants cannot establish that they have statutory standing.
Just as in Erda Community, here “Appellants not only lack
statutory standing under the Annexation Code, but they also lack
any legally protectible interest that would allow them to seek a
declaratory judgment regarding any alleged violation of the
Annexation Code.” 2024 UT App 126, ¶ 39 (cleaned up).
“Accordingly, Appellants lack standing to seek redress for such
statutory violations, regardless of whether they ground their
complaints in the Annexation Code or the Declaratory Judgment
Act.” Id.

¶19 “But Appellants’ claims also include grievances rooted not
in statutes but in constitutional provisions.” Id. ¶ 46. As in Erda
Community, the district court dismissed these claims along with
the statutory claims, relying on the new authority in McKitrick v.

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Erda Community Association v. Grantsville City

Gibson, 2021 UT 48, 496 P.3d 147. See id. ¶ 50 (“A statutory claimant
may not overcome a lack of statutory standing by satisfying the
elements of some other doctrine of standing.” (emphasis added)
(cleaned up)). The district court’s conclusion would be correct had
Appellants brought only statutory claims. However, “where a
party raises a challenge to the constitutionality of a state statute,”
they need demonstrate only traditional standing. Erda Cmty., 2024
UT App 126, ¶ 33.

¶20 Just as in Erda Community, here Appellants seem to assert
that the Annexation Code violates (1) the right to due process, see
Utah Const. art I, § 7, (2) the open courts clause, see id. art. I, § 11,
and (3) the right to put forth a citizen initiative, see id. art. VI, § 1.
See Erda Cmty., 2024 UT App 126, ¶ 48.

¶21 Though Appellants’ claims are at times difficult to discern,
their argument can be read to assert that certain provisions of the
Annexation Code violate the Utah Constitution, and therefore
some of their claims are constitutional, not statutory. Our
supreme court has rejected the argument that if plaintiffs lack
statutory standing, they cannot challenge the constitutionality of
a statute. See Carlton v. Brown, 2014 UT 6, ¶ 25, 323 P.3d 571. In
other words, so long as plaintiffs have constitutional standing,
they may bring a claim that a statute violates the constitution. 1

¶22 Just as we held in Erda Community, “to the extent that
Appellants have raised claims challenging the constitutional
validity of the Annexation Code, Appellants should be able to
proceed with those claims if they can establish that they have
traditional standing to do so.” 2024 UT App 126, ¶ 52.

1. Plaintiffs may also be required to comply with other rules or
requirements in bringing such a claim. For example, rule 24(d) of
the Utah Rules of Civil Procedure requires a plaintiff challenging
the constitutionality of a statute to notify the Attorney General.

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Erda Community Association v. Grantsville City

¶23 Because the district court did not engage in the analysis of
whether Appellants have traditional standing to bring their
constitutional claims, we must remand this case for the district
court to undertake that analysis in the first instance. 2

II. Attorney Fees

¶24 Skywalk requested attorney fees pursuant to rule 65A of
the Utah Rules of Civil Procedure. Rule 65A does not specifically
provide for the recovery of attorney fees; it merely provides that
where some amount of security is required, the amount of
security required does not establish a cap on the eventual
recovery of fees. 3 Utah R. Civ. P. 65A(c)(2). It is our case law,
rather than the rules of civil procedure, that establishes the law
governing when a party can recover attorney fees for a wrongful
injunction.

¶25 In general, if an “injunction was wrongfully issued, the
enjoined party has an action for costs and damages incurred as a
result of the wrongfully issued injunction.” Mountain States Tel.
& Tel. Co. v. Atkin, Wright & Miles, Chartered, 681 P.2d 1258, 1262
(Utah 1984). Here, Skywalk argued that it was wrongfully
enjoined and requested attorney fees. The court granted the
request and entered a judgment for $240,991.49 in attorney fees
and costs. Appellants challenge this award. And we agree with
Appellants that Skywalk cannot recover attorney fees from
Appellants because Appellants never asked for Skywalk to be
enjoined.

2. For a more in-depth explanation of the traditional standing
analysis, see Erda Community Ass’n v. Grantsville City, 2024 UT
App 126, ¶¶ 21–24.

3. In this case, the court did not require any security.

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Erda Community Association v. Grantsville City

¶26 The Utah Supreme Court has held that it “is no defense to
an action on an injunction bond that the injunction was sought in
good faith since malicious prosecution is not a prerequisite for
recovery upon the bond.” Id. However, while an injunction need
not have been sought in bad faith, it must at least have been
sought.

¶27 This court has held that wrongfully enjoined parties are
“entitled only to those attorney fees which would not have been
incurred but for the application for, and issuance of, the preliminary
injunction. Fees which would have been incurred anyway, in the
course of [the underlying litigation], are not recoverable under
Rule 65A.” Tholen v. Sandy City, 849 P.2d 592, 597 (Utah Ct. App.
1993) (emphasis added). Though Tholen primarily resolved a
slightly different question (namely, whether attorney fees are
recoverable for work on the preliminary injunction or on the
underlying litigation), its reasoning applies here too. Wrongfully
enjoined parties are entitled to only those attorney fees that are a
result of both the application for and the issuance of a preliminary
injunction. Here, Appellants did not apply for any preliminary
injunction against Skywalk. In all their filings on the motion, and
at the evidentiary hearings, Appellants only ever asked for
Grantsville City to be enjoined.

¶28 Appellants cannot be held liable for attorney fees
stemming from an injunction that they did not request. The fact
that a court sua sponte enjoins a second party, when the injunction
was sought only as to the first party, should not result in an award
of attorney fees for that second party. The occasion may be rare
when a court grants an injunction that was not requested, but
when it happens, those attorney fees are not the result of the
application for a preliminary injunction. Because Appellants never
requested that Skywalk be enjoined, we must reverse the district
court’s award of attorney fees to Skywalk.

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Erda Community Association v. Grantsville City

CONCLUSION

¶29 We affirm the district court’s dismissal of Appellants’
statutory claims. However, their constitutional claims cannot be
dismissed for lack of standing without an analysis of whether they
have constitutional standing. We therefore reverse the district
court’s dismissal of Appellants’ constitutional claims and remand
the matter for the district court to determine whether Appellants
have standing to bring their constitutional claims. We also reverse
the district court’s award of attorney fees to Skywalk because
Appellants never sought for Skywalk to be enjoined.

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