DFI Properties v. GR 2 Enterprises

2010 UT 61
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
DFI Properties LLC, 	No. 20081067
Plaintiff and Appellee,
v.
F I L E D
GR 2 Enterprises LLC,
Defendant and Appellant. 	November 2, 2010
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Fourth District, American Fork
The Honorable David N. Mortensen
No. 080103867
Attorneys: 	Carolyn Montgomery, Thomas B. Price, Salt Lake City,
James H. Woodall, South Jordan, for plaintiff
Karthik Nadesan, Salt Lake City, for defendant
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DURRANT, Associate Chief Justice:
INTRODUCTION
¶1 	We are asked to decide whether a trial court judge
abused his discretion in entering default judgment against a
defendant in an unlawful detainer action. 	The defendant, GR 2
Enterprises, is a limited liability company whose possession of
certain real property was being disputed. 	In the course of the
unlawful detainer action, one of the owners of GR 2 engaged in
behavior that the district court, sua sponte, concluded was
sanctionable under rule 11 of the Utah Rules of Civil Procedure.
Having reached this conclusion, the court sanctioned the
defendant by entering default judgment against it.
¶2 	On appeal, it has become clear to this court that we
lack subject matter jurisdiction over the matter. 	The judgment
entered by the district court, although presented to us as final,
explicitly reserves a number of issues, including the award of
attorney fees, for later consideration by the district court.
Because a judgment is not final for purposes of appeal if the

No. 20081067 	2
judgment fails to resolve an outstanding request for attorney
fees, we conclude that the order from which GR 2 appeals is not
final. 	And because this court lacks jurisdiction over appeals
from nonfinal orders, we do not have the authority to examine the
issues raised in this appeal. 	Accordingly, we dismiss the appeal
for lack of jurisdiction and remand this case to the district
court.
BACKGROUND
¶3 	In setting forth the background of this appeal, we
limit our exposition to the facts necessary to explain our
conclusion. 	Further, because default judgment was entered on the
eve of trial, the facts that gave rise to the wrongful detainer
action remain disputed. 	Therefore, we do not pass judgment on
the facts of the underlying dispute and proceed with caution to
avoid inadvertently suggesting that we have done so.
¶4 	GR 2 Enterprises is the name of a limited liability
company formed by Juan Antonio Granados for the purpose of
handling certain real estate transactions related to real
property owned by Mr. Granados. 	Mr. Granados and his wife own
GR 2.
¶5 	DFI Properties is another limited liability company.
DFI refinanced property owned by GR 2 in California so that GR 2
could purchase property in Utah. 	When GR 2 purchased the Utah
property, DFI was the beneficiary of the trust deed. 	When GR 2
defaulted under the terms of this trust deed, DFI purchased the
property at a trustee’s sale.
¶6 	Throughout the course of these events, GR 2 took a
number of actions that complicated DFI’s ultimate acquisition of
the property. 	For instance, GR 2 conveyed to multiple third
parties fractional interests in both the Utah and California
properties. 	These third parties then filed for bankruptcy.
Pursuant to the automatic stay provision of the bankruptcy code,
the trustee’s sale of the Utah property was postponed. 	The
California bankruptcy court ultimately concluded that these
actions were undertaken to “delay, hinder, and defraud
creditors.” 	Even after this automatic stay was lifted, the
trustee’s sale could not proceed because GR 2 filed a separate
bankruptcy action in Utah, which resulted in a separate automatic
stay of proceedings against GR 2. 	The automatic stay imposed in
connection with the Utah bankruptcy proceedings was also
eventually lifted, at which point DFI purchased the Utah property
at a trustee’s sale. 	DFI then filed an unlawful detainer action
seeking eviction of GR 2 from the Utah property.

3 	No. 20081067
¶7 	GR 2 defended and counterclaimed on a number of grounds
and alleged significant misconduct on the part of DFI. 	Chiefly,
GR 2 asserted that DFI had fraudulently induced GR 2 to enter
into the refinancing agreement and that this fraud made the deed
of trust invalid. 	GR 2 also asserted that DFI’s unlawful
detainer action constituted abuse of process because DFI was
aware that the deed of trust was being challenged in the Utah
bankruptcy proceedings.
¶8 	Even after the claims were properly before the district
court, complications arose. 	First, in the Utah bankruptcy
action, the bankruptcy trustee had moved to set aside the sale
through which DFI acquired the property. 	Proceedings in the
district court were postponed until the bankruptcy court’s
disposition of this issue. 	When the bankruptcy trustee’s motion
was denied in the ancillary bankruptcy proceeding, the district
court, satisfied that the unlawful detainer action could proceed,
established time lines for proceeding to trial. 	The trial was
scheduled to begin on December 17, 2008.
¶9 	The second complicating factor arose when GR 2 objected
to this trial date on the basis that it could not conduct, in the
time allowed, sufficient discovery to support its counterclaims
and affirmative defenses. 	GR 2 sought to postpone the trial by
several months so that it could undertake additional discovery.
This request, though, would have conflicted with the expedited
time line established by statute for resolving unlawful detainer
actions. 	So the parties proceeded as if the trial were going to
begin on December 17, 2008. 	But as trial approached, the
district court offered to adopt GR 2’s proposed time line if GR 2
would vacate the property. 	On December 4, 2008, GR 2 was given
the option of proceeding with the expedited time line on the
unlawful detainer claim, or vacating the property by December 5,
2008, in exchange for postponing the entire matter for a few
months while GR 2 conducted discovery related to its
counterclaims. 	The court scheduled a conference for the
afternoon of December 8, 2008, so that counsel for GR 2 could
inform the court of its client’s decision.
¶10 	On the morning of the scheduled conference, Mr.
Granados, acting without counsel, filed three documents with the
district court. 	These documents, an “Order for Hearing to Show
Cause,” an “Order to Stay Proceedings,” and a “Petition for
Hearing to Show Cause, Stay of Proceedings, and for Declaratory
Relief,” were signed by Judge Clayton of the “First Federal
District Court, Western Region.” 	This court is neither a state
court nor a federal court. 	Rather, it is a tribal court of the

No. 20081067 	4
NATO Indian Nation. 	The documents asserted that Mr. Granados was
a member of the tribe and that, pursuant to certain aspects of
federal law, tribal courts have exclusive jurisdiction over
matters involving tribe members. 	Based on this purported
exclusive jurisdiction, the documents ordered the district court
to stay the proceedings pending resolution of the matter in
tribal court.
¶11 	The district court held a hearing the next day. 	To be
sure that Mr. Granados would appear, the district court judge
instructed counsel for GR 2 to inform Mr. Granados of the nature
of the hearing and the possibility of sanctions. 	Mr. Granados
appeared at the hearing and addressed the court regarding his
motives for filing the NATO Nation documents. 	The judge found
that “there[] [was] no reasonable basis to believe that [the]
documents [were] anything other than frivolous,” and that the
“only reason” they were submitted to the district court “was to
delay [the] proceedings.” 	Based on that finding, the district
court struck the defendant’s answer and counterclaim, and entered
default judgment against the defendant. 	The district court also
entered an order of restitution. 	Pursuant to the order of
restitution, GR 2 vacated the subject property over the course of
the next week.
¶12 	The district court’s judgment deemed DFI to be the
owner of the Utah property and incorporated the order of
restitution. 	The judgment also stated that it “may be
supplemented, upon the presentation of appropriate evidence, by
an award of [treble] damages to Plaintiff resulting from
Defendants’ unlawful detainer.” 	Finally, the judgment contained
a provision permitting the judgment to “be supplemented, upon the
filing of an affidavit by counsel for Plaintiff, in an amount
equal to the reasonable attorney fees incurred by Plaintiff.”
¶13 	GR 2 unsuccessfully moved to stay execution of the
judgment and to have the judgment set aside. 	After these
unsuccessful motions, GR 2 appealed. 	GR 2 challenges the
district court’s judgment for a number of reasons. 	First, GR 2
claims that rule 11 does not permit a court to sanction an LLC
because of the actions that one of its members takes, where those
actions were taken without the assistance of counsel. 	Second,
GR 2 argues that its due process rights were violated because the
rule 11 hearing was conducted without entry of an order to show
cause and because GR 2 was not given a reasonable opportunity to
respond to the rule 11 allegations. 	Third, GR 2 argues that rule
11 imposes specific procedural requirements, such as entry of an
order describing the violating conduct and explaining the basis
for the sanction imposed. 	GR 2 asserts that, because the

1 Anderson v. Wilshire Invs., LLC, 2005 UT 59, ¶ 7, 123 P.3d
393.
2 See Irvin v. State (State ex rel. S.M.), 2006 UT 75, ¶ 6,
154 P.3d 787 (“This court makes the original determination of
whether an order is final and appealable.”).
3 Utah R. App. P. 3(a); Loffredo v. Holt, 2001 UT 97, ¶ 10,
37 P.3d 1070 (“This court does not have jurisdiction over an
appeal unless it is taken from a final judgment, or qualifies for
an exception to the final judgment rule.” (citation omitted)).
We have acknowledged three exceptions to the final judgment
rule. 	These exceptions are for appeals from interlocutory
(continued...)
5 	No. 20081067
district court failed to conform to rule 11’s procedural
requirements, the sanctions imposed under rule 11 must be
reversed. 	Fourth, GR 2 claims that its conduct should not have
been sanctioned under rule 11 because the legal issues raised in
the NATO Nation filings are unsettled questions of law. 	Fifth,
GR 2 argues that, even if sanctions were appropriate, default
judgment was an inappropriate sanction, either because Utah rule
11 does not permit default judgment as a sanction or because
default judgment is too harsh a sanction to be imposed in this
case.
¶14 	We are unable to examine any of the arguments made by
GR 2. 	As discussed below, the district court’s judgment contains
two provisions that, by their own terms, require further action
by the district court. 	Thus, the judgment is, on its face,
nonfinal. 	Therefore, we lack jurisdiction to consider the
questions presented on appeal and are obligated to dismiss the
appeal and remand the case to the district court.
STANDARD OF REVIEW
¶15 	“Whether a district court’s judgment is final is a
question of law.” 1 	Accordingly, the question of finality may
appropriately be addressed by this court on appeal, even if the
question is being addressed for the first time. 2
ANALYSIS
¶16 	The district court judgment from which GR 2 attempts to
appeal is nonfinal because, by its own terms, it requires
supplementation before finally resolving the dispute between the
parties. 	Utah Rule of Appellate Procedure 3(a) permits a party
to appeal only “final orders and judgments.” 3 	Accordingly, “an

3 (...continued)
orders, see Utah R. App. P. 5, appeals from judgments certified
as final under Utah Rule of Civil Procedure 54(b), see A.J.
Mackay Co. v. Okland Constr. Co., 817 P.2d 323, 325 (Utah 1991),
and appeals expressly permitted by statute, see Bradbury v.
Valencia, 2000 UT 50, ¶ 12, 5 P.3d 649. 	None of these exceptions
apply to this case.
4 Anderson v. Wilshire Invs., LLC, 2005 UT 59, ¶ 9, 123 P.3d
393 (citing Utah R. App. P. 3(a)).
5 Kennedy v. New Era Indus., 600 P.2d 534, 534-35 (Utah
1979); see also Bradbury, 2000 UT 50, ¶ 8 (“Where an appeal is
not properly taken, this court lacks jurisdiction and we must
dismiss.”).
6 See A.J. Mackay Co., 817 P.2d at 324-25 (party not
permitted to appeal from grant of summary judgment against it
where the opposing party’s counterclaims had not been resolved).
7 See Loffredo, 2001 UT 97, ¶ 14.
8 Kennedy, 600 P.2d at 535-36 (quoting Shurtz v. Thorley, 61
P.2d 1262, 1264 (Utah 1936)).
9 Id. at 536.
10 See, e.g., Irvin v. State (State ex rel. S.M.), 2006 UT
75, ¶ 7, 154 P.3d 787; Loffredo, 2001 UT 97, ¶ 13; ProMax Dev.
(continued...)
No. 20081067 	6
appellate court lacks jurisdiction over an appeal that is not
taken from a final order or judgment.” 4 	In such circumstances,
we must “refuse to decide [those] cases not properly before
[us].” 5
¶17 	A judgment is not final even where it fully resolves
issues advanced by one party, 6 or even where it resolves a
majority of the issues advanced by both parties. 7 	Rather, a
judgment is final only if it “‘dispose[s] of the case as to all
the parties, and finally dispose[s] of the subject-matter of the
litigation on the merits of the case.’” 8 	Put more succinctly, a
judgment is final only if it “ends the controversy between the
parties litigant.” 9
¶18 	In a number of our cases considering the finality of
judgments, we have articulated the reasons underlying this
rule. 10 	For instance, with regard to attorney fees, we have

10 (...continued)
Corp. v. Raile, 2000 UT 4, ¶ 15, 998 P.2d 254.
11 See ProMax, 2000 UT 4, ¶ 14 (quoting Meadowbrook, LLC v.
Flower, 959 P.2d 115, 118 (Utah 1998)).
12 See id.
13 See id.
14 See Bradbury, 2000 UT 50, ¶ 10 n.4.
15 Id.
7 	No. 20081067
stated that permitting “‘piecemeal appeals’” would place an
unmanageable strain on the judicial system, because every case
involving attorney fees could potentially be the genesis of two
separate appeals--one appeal related to the merits and one appeal
related to the attorney fees award. 11 	Further, the amount of an
attorney fees award may be a determinative factor in whether a
party decides to appeal at all. 12 	That is, until a party knows
the amount of attorney fees, that party cannot make an informed
decision about the potential costs and benefits associated with
taking an appeal. 13 	With regard to finality, when a court
resolves some claims on summary judgment while leaving
counterclaims unresolved, we have noted that our final judgment
rule maintains the proper relationship between courts. 	That is,
since rule 54 of the Utah Rules of Civil Procedure permits trial
courts to modify their decisions at any time prior to final
judgment, an appeal from such a judgment could lead to trial and
appellate courts entering conflicting orders with regard to the
same case at the same time. 14 	We have observed that “our
judicial system would not work well if the trial court could
revise an order or judgment after the parties had appealed it to
our court.” 15 	Although the reasoning we cite here referred to
final judgments in the context of attorney fees awards and grants
of summary judgment, these reasons are equally applicable to
unresolved issues surrounding damage awards.
¶19 	As our prior cases make clear, dismissal of the appeal
now before us is necessary because the district court’s judgment
fails to establish the amount of the awards of attorney fees and
treble damages. 	A straightforward application of our general
rule leads inescapably to the conclusion that the judgment in
this case is not final. 	By statute, a party who successfully
brings an unlawful detainer action is entitled to attorney fees
and to compensation, in the form of treble damages, for any
damage to the property caused by the defendant during the period

16 See Utah Code Ann. § 78B-6-811(3) (2008).
17 We also note that this case is distinguishable from
Anderson, 2005 UT 59, ¶ 7. 	In that case, we held that a judgment
was not rendered nonfinal by virtue of a provision that reserved
a request for attorney fees “for consideration by the Court at a
later date should [the] case continue.” 	Id. ¶ 24. 	Although the
language of that judgment suggested that the issue was
unresolved, we held that the judgment was final because the
district court in that case had considered a request for attorney
fees and rejected it. 	Id. ¶¶ 27-28. 	The suggestion, in the
judgment, that the issue could be reconsidered stemmed from the
fact that the court anticipated that the nonprevailing party
would bring additional claims. 	Id. ¶ 5. 	Instead, the
nonprevailing party appealed, and no claim that would require the
district court to reconsider whether to award attorney fees was
ever raised. 	Id.
We held that where an award of attorney fees had been
clearly denied and where reconsideration of the issue was
“contingent upon the occurrence of an uncertain event,” the
reservation of the issue was “insufficient to leave the attorney
fees issue pending.” 	Id. ¶¶ 27-28. 	Put differently, the
attorney fees issue did not render the judgment nonfinal because
it had been fully resolved as it related to all components of the
judgment in that case.
In this case, the attorney fees and treble damages issues
have most certainly not been fully resolved as they relate to all
components of the judgment. 	It is settled that DFI will receive
these awards, but valuation remains pending. 	Unlike the award of
fees in Anderson, the awards to DFI in this case are not
contingent upon the occurrence of an uncertain event. 	And
although they have been granted, they are also still pending
because their value has not been established.
No. 20081067 	8
of unlawful possession. 16 	The judgment from which GR 2 attempts
to appeal explicitly reserves determination of these issues. 	It
calls for supplementation of the record, in the form of
affidavits and appropriate evidence, for the purpose of
determining the amounts of these awards. 	On its face, the
judgment permits no doubt that the issues central to the unlawful
detainer action have not been resolved. 	Thus, the subject matter
of this litigation has not been disposed of, and the controversy
between these parties remains quite live. 17
¶20 	This case represents another in the line of cases where
we have held that a judgment awarding attorney fees in a yet-to-

18 See, e.g., Irvin, 2006 UT 75, ¶ 7; Loffredo, 2001 UT 97,
¶ 13; ProMax, 2000 UT 4, ¶ 15.
19 Kennedy, 600 P.2d at 537.
9 	No. 20081067
be-determined amount is not final for purposes of appeal. 18
Because we lack jurisdiction over appeals from such judgments,
this court lacks the power to resolve the issues presented to us.
¶21 	We are keenly aware of the consequences that will flow
from this determination. 	For GR 2, the consequences are harsh.
As this case comes to us, Mr. and Mrs. Granados have vacated a
home that they contend rightfully belongs to them. 	They have
done so because the trial court, sua sponte, concluded that the
appropriate means of addressing the actions of a layperson--a
layperson who was not technically a party to the action and who
had not technically appeared before the court--was to sanction
the defendant corporation owned, in part, by the layperson. 	The
court pursued these sanctions even though it knew the actions of
the layperson were unknown to counsel for the defendant. 	And the
sanctions chosen by the court were arguably the most severe
sanctions that could have been imposed.
¶22 	But even for DFI, the consequences are not minor.
Should GR 2 choose to appeal again after the judgment of the
district court reaches finality, DFI will be tasked with the time
and expense of relitigating this appeal. 	Further, DFI presumably
invoked the summary proceedings of the unlawful detainer action
because it valued the swiftness and finality that would accompany
that approach. 	Because of the district court’s decision not to
address the merits of the dispute, the validity of the unlawful
detainer judgment in this case remains in question.
¶23 	Even though we are cognizant of all of these
consequences, we cannot fabricate the power to hear a case simply
because it seems more palatable than acknowledging that we lack
jurisdiction. 	As we have stated in the past, “[t]he lost time
and effort occasioned by the briefing and oral argument in this
case is a small price to pay for insisting that the parties
comply with the rules of procedure so that the proper
relationship between this Court and the trial courts may be
maintained.” 19 	Accordingly, as is incumbent upon us when we find
that we lack the jurisdiction to hear a case, we dismiss this
appeal.
CONCLUSION

No. 20081067 	10
¶24 	We find that we lack jurisdiction to resolve this
appeal. 	We have no jurisdiction over appeals from judgments that
are not final, and the judgment appealed from in this case is not
final because it awards attorney fees and treble damages to the
prevailing party but fails to specify the amount of those awards.
The appeal is dismissed.
---
¶25 	Chief Justice Durham, Justice Parrish, Justice Nehring,
and Judge Iwasaki concur in Associate Chief Justice Durrant’s
opinion.
¶26 	Justice Wilkins does not participate herein; District
Judge Glenn K. Iwasaki sat.