Fernwood Place v. Layton Partners Holdings

2023 UT App 43

THE UTAH COURT OF APPEALS

FERNWOOD PLACE LC,
Appellant,
v.
LAYTON PARTNERS HOLDINGS LP
AND TARANTINO PROPERTIES INC.,
Appellees.

Opinion
No. 20210568-CA
Filed April 27, 2023

Second District Court, Farmington Department
The Honorable David M. Connors
No. 210700109

Douglas M. Durbano, Richard A. Bednar, and
John E. Keiter, Attorneys for Appellant
Scott O. Mercer, Scott S. Bridge, and J. Adam Knorr,
Attorneys for Appellees

JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN M. HARRIS
concurred.

MORTENSEN, Judge:

¶1 A holding company recorded a lien against real property
owned by a developer. While disputing the lien as wrongful, the
developer nevertheless paid the demanded amount. The holding
company released the lien. About three-and-a-half years later, the
developer sued, asserting a single claim of money damages for
wrongful lien. The district court dismissed the complaint as time-
barred. Arguing that it had seven years to bring the claim, the
developer appeals. We affirm.
Fernwood Place v. Layton Partners Holdings

BACKGROUND

¶2 From 2015 through 2017, LPH 1 was the manager of a
subdivision in Layton, Utah. Fernwood Place LC (Fernwood)
owned real property in that subdivision.

¶3 In 2017, Fernwood completed the construction of an
apartment complex in the subdivision and was scheduled to close
on the sale of that complex on June 3. But on June 2, LPH recorded
a notice of lien against Fernwood with the county. The lien
demanded just over $20,000 for unpaid maintenance fees and
other charges. To avoid a delay in the sale of the apartment
complex, Fernwood paid the balance demanded in the notice of
lien but reserved the right to assert a claim for wrongful lien
against LPH. LPH released the lien in August 2017.

¶4 In February 2021, Fernwood filed a complaint asserting a
single cause of action—“Wrongful Lien”—against LPH.
Fernwood’s complaint asserted that LPH “caused a wrongful lien
to be recorded” that “was groundless and contained material
misstatements concerning the scope of maintenance allegedly
provided to the [s]ubdivision and the amount allegedly owed by
Fernwood.” As relief, Fernwood sought (1) a finding that LPH
“caused a wrongful lien to be recorded against Fernwood’s real
property,” (2) “[a]n award of actual and treble damages” in an
amount of at least $10,000, (3) “[a]n award of reasonable
attorneys’ fees and costs,” and (4) further relief as the district court
deemed “just and proper.” Fernwood did not seek to have the lien
nullified, because it had long since been released.

1. In 2016, Layton Partners Holdings LP notified Fernwood Place
LC that “property accounting functions” would be handled “in
house” by its “sister company,” Tarantino Properties Inc. For
convenience, we refer to Layton Partners Holdings LP and
Tarantino Properties Inc. collectively as “LPH.”

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Fernwood Place v. Layton Partners Holdings

¶5 LPH moved the district court to dismiss the complaint,
arguing that the applicable limitation period was three years and
that the complaint was therefore filed too late. See Utah Code
§ 78B-2-305(4) (“An action may be brought within three years . . .
for a liability created by the statutes of this state, other than for a
penalty or forfeiture under the laws of this state, except where in
special cases a different limitation is prescribed by the statutes of
this state . . . .”). LPH also asked the court for an award of attorney
fees and costs because Fernwood “would have recovered attorney
fees and costs if successful in this litigation.”

¶6 In opposition to the motion, Fernwood argued that “[t]he
Wrongful Lien Act[2] permits a property owner to bring an action
against a ‘lien clamant’ who ‘causes a wrongful lien to be recorded
in the office of the county recorder against real property.’” (Citing
id. § 38-9-203(1).) Fernwood noted that the Utah Code defines
“lien claimant” as “a person claiming an interest in real property
who offers a document for recording or filing with any county
recorder in the state asserting a lien, or notice of interest, or other
claim or interest in certain real property,” see id. § 38-9-102(4), and
argued that the applicable limitation period was seven years, see

2. At oral argument before this court, Fernwood argued that its
complaint should not be so narrowly construed as to assert only a
cause of action under the Wrongful Lien Act. But Fernwood’s
memorandum opposing the motion to dismiss is unambiguous in
asserting that the only cause of action is under that act, going so
far as to cite Utah Code section 38-9-203 as the source of the cause
of action. And as already noted, Fernwood’s complaint identified
the cause of action only as a wrongful lien, albeit without citing
the statute. Moreover, the relief Fernwood sought in its complaint
tracked the very language of the statute describing civil liability
for recording a wrongful lien. See infra ¶ 12. Thus, there is no
indication—apart from Fernwood’s later assertion—that
Fernwood’s cause of action was for anything other than recording
a wrongful lien.

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Fernwood Place v. Layton Partners Holdings

id. § 78B-2-207(1) (“An action, defense, or counterclaim to an
action based upon title to the property or entitlement to the rents
or profits from the property shall be brought . . . not later than
seven years after the act on which it is based . . . .”).

¶7 After briefing and oral argument, the district court granted
LPH’s motion. Specifically, the court concluded that Fernwood’s
claim for wrongful lien damages did “not affect title to real
property or relate to rents or profits of real property to invoke the
seven-year statute of limitations under” Utah Code section 78B-2-
207 and that Fernwood’s claim related “solely to monetary
damages under” Utah Code section 38-9-203. Accordingly, the
court determined that Fernwood’s “claims [were] subject to a
three-year statute of limitations” applicable to actions based on
liabilities created by statute. See id. § 78B-2-305(4). Noting that
LPH had released the notice of lien in August 2017, the court
concluded that Fernwood’s February 2021 complaint was time-
barred. The court ordered that the parties bear their own attorney
fees. Fernwood appealed the court’s ruling. LPH, however, did
not cross-appeal the denial of its claim for attorney fees.

¶8 Fernwood then sought relief from judgment under rule
60(b) of the Utah Rules of Civil Procedure, arguing that the court’s
determination that a three-year limitation period applied was
inconsistent with Utah precedent. Alternatively, it asked the court
for leave to amend its complaint to add additional causes of
action. Fernwood cited two cases to support its position that the
appropriate statute of limitations was seven years: Turpin v. Cox,
No. 140400253 (Utah 4th Dist., Aug. 20, 2015) (a Utah state district
court case), and Bay Harbor Farm, LC v. Sumsion, 2014 UT App 133,
329 P.3d 46. The district court denied the rule 60(b) motion, noting
that the cases Fernwood cited were “not on point” because “[i]n
both cases, the liens at issue were still in effect when the
complaints were filed” but here the lien had been “released
shortly after it was placed.” And because the lien had been
removed long before Fernwood’s complaint was filed, the court

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explained that Fernwood’s claim did not affect “title to the
property or entitlement to the rents or profits from the property,”
a necessary condition for application of the seven-year limitation
period. (Quoting Utah Code § 78B-2-207.) Instead, Fernwood’s
claim was “solely for money damages” related to the period when
the lien was in place, making it subject to the three-year limitation
period. The court also denied the motion for leave to amend,
stating that it lacked jurisdiction owing to the pendency of the
appeal. Fernwood has not appealed the denial of its motions for
relief from judgment or for leave to amend.

ISSUE AND STANDARD OF REVIEW

¶9 The sole issue on appeal is whether the district court erred
in determining that Fernwood’s cause of action was subject to a
three-year statute of limitations instead of a seven-year statute of
limitations. 3 We review “the application of a statute of limitations

3. During oral argument before this court, Fernwood attempted to
introduce additional issues related to constitutional law and
statute-of-limitations claims sounding in contract. Fernwood did
not present these issues for consideration by the lower court, and
they are not mentioned in Fernwood’s briefs. “Parties are required
to raise and argue an issue in the trial court in such a way that the
court has an opportunity to rule on it. A failure to preserve an
issue in the trial court generally precludes a party from arguing
that issue in an appellate court, absent a valid exception.” State v.
Johnson, 2017 UT 76, ¶ 18, 416 P.3d 443 (cleaned up). Fernwood
has not argued an exception to the preservation requirement;
accordingly, we decline to further consider these newly
introduced issues.
For its part, LPH requests attorney fees and costs on
appeal, arguing that “because [Fernwood] would have recovered
attorney fees and costs if successful in the underlying litigation,
(continued…)

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for correctness.” Daniels v. Deutsche Bank Nat’l Trust, 2021 UT App
105, ¶ 25, 500 P.3d 891 (cleaned up). 4

and could have requested appellate fees and costs” on appeal, this
court “should award attorney fees and costs to [LPH] for
succeeding in defending this appeal.” But LPH did not cross-
appeal the district court’s separate ruling denying its claim for
attorney fees, and so we decline to award them on appeal. See
Evans v. Nielsen, 2015 UT App 65, ¶ 22, 347 P.3d 32 (“The district
court expressly denied attorney fees below, ordering the parties
to bear their own costs. [The appellee] has not challenged that
decision on appeal. Therefore, we decline to grant attorney fees
on appeal.”).

4. For some time, various judges on this court have been using the
parenthetical “(cleaned up)” to enhance the readability of our
opinions. See State v. Cady, 2018 UT App 8, ¶ 9 n.2, 414 P.3d 974,
cert. denied, 421 P.3d 439 (Utah 2018). Our opinions also employ
the parenthetical “(quotation simplified),” which is identical in
meaning to “(cleaned up).” See In re K.W., 2018 UT App 44, ¶ 15
n.3, 420 P.3d 82. Both parentheticals indicate the omission of
internal quotation marks, brackets, ellipses, emphases, internal
citations, and footnote signals in published sources, as well as the
traditional parenthetical notation referencing a prior case or cases
being quoted. Ellipses indicate all other omissions. We also use
these parentheticals to make unbracketed changes to
capitalization. Apart from capitalization, alterations to words in
the source are indicated by brackets.
These parentheticals are powerful editing tools because
they make legal writing less tedious, more streamlined, and more
concise. But their appeal begets a temptation to misuse them. And
we acknowledge that we have, at times, ventured too far by using
them with (1) quotations from unpublished sources not readily
available to the public (namely, briefs, lower court documents,
(continued…)

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ANALYSIS

¶10 In this case, we are asked to determine which statute of
limitations applies to a claim for damages proceeding from a
wrongful lien when the lien in question has been released.

¶11 Fernwood asserts that its cause of action concerns title to
property, and on that basis, it asserts that the applicable limitation
period is seven years:

An action, defense, or counterclaim to an action
based upon title to the property or entitlement to the
rents or profits from the property shall be brought
. . . not later than seven years after the act on which
it is based . . . .

Utah Code § 78B-2-207(1). 5 But LPH argues that Fernwood’s cause
of action does not concern title to property and, instead, is based

and transcripts) and (2) quotations of parenthetical language from
cases citing other cases. To be more transparent and precise, we
intend to limit our employment of these parentheticals to the
circumstances identified in the above paragraph, and we expect
practitioners who choose to employ these devices to abide by
these same strictures. So that consistency of use might be
achieved, the publishers of The Bluebook may wish to adopt rules
similar to those proffered by Jack Metzler. See Jack Metzler,
Cleaning Up Quotations, 18 J. App. Prac. & Process 143, 154–55
(2017).

5. In a true quiet title action, there is no statute of limitations. See
In re Hoopiiaina Trust, 2006 UT 53, ¶ 27, 144 P.3d 1129 (“When a
party asserts a quiet title claim in which that party merely requests
that the court adjudicate the validity of an opponent’s adverse or
hostile claim to property to which the party already holds title, no
statute of limitations applies.”).

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on a liability created by state statute. On that basis, LPH asserts
that the applicable limitation period is three years:

An action may be brought within three years . . . for
a liability created by the statutes of this state, other
than for a penalty or forfeiture under the laws of this
state, except where in special cases a different
limitation is prescribed by the statutes of this state
....

Id. § 78B-2-305(4).

¶12 In our view, LPH has the better of the argument. This
determination is driven by the remedy Fernwood sought in its
complaint. Fernwood did not bring a claim to nullify a lien, a
remedy that is available both under the wrongful lien statute, see
id. § 38-9-205(1) (“A record interest holder of real property against
which a wrongful lien is recorded may petition the district court
in the county in which the document is recorded for summary
relief to nullify the wrongful lien.”), as well as at common law, see
Esther M. Mertz Trust v. Fox Meadow Partners, 288 A.D.2d 338, 340
(N.Y. App. Div. 2001) (stating that an action “to set aside a
recorded instrument relating to real property” “could have been
maintained at common law”). Fernwood could not have brought
such a claim at the time it filed its complaint, because by then there
was no longer any lien to nullify. It is undisputed that LPH
released the lien a few months after it was recorded and after
Fernwood had paid the amount demanded. Instead of seeking to
nullify a lien, Fernwood sought an award of treble damages
pursuant to Utah’s wrongful lien statute. 6 The nature of

6. Treble damages for a wrongful lien is a liability that does not
exist but for the statute. This liability does not exist in a common
law nullification action. See Esther M. Mertz Trust v. Fox Meadow
Partners, 288 A.D.2d 338, 339–40 (N.Y. App. Div. 2001).

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Fernwood’s cause of action is revealed by the relief it sought.
Fernwood’s complaint stated,

LPH . . . [is] liable to Fernwood for actual and treble
damages (which shall be no less than $10,000) and
for reasonable attorneys’ fees and costs for causing
a wrongful lien to be recorded against [Fernwood’s
property in the subdivision].

This language closely tracks the statutory language establishing a
cause of action and civil liability concerning damages for
recording a wrongful lien:

A person is liable to the record owner of real
property for $10,000 or for treble actual damages,
whichever is greater, and for reasonable attorney
fees and costs, who records or causes to be recorded
a wrongful lien in the office of the county recorder
against the real property, knowing or having reason
to know that the document . . . is a wrongful lien . . . .

Utah Code § 38-9-203(3). Thus, the damages that Fernwood
requested mirror the very liability created by statute—namely,
“treble actual damages (which shall be no less than $10,000)”—for
recording a wrongful lien. This statutory liability, unless
otherwise specified, has a limitation period of three years. See id.
§ 78B-2-305(4).

¶13 The seven-year statute of limitations sought by Fernwood
and prescribed by Utah Code section 78B-2-207 cannot apply here
because Fernwood did not ask for relief “based upon title to the
property or entitlement to the rents or profits from the property.”
Id. § 78B-2-207(1). The title to the property or entitlement to rents
or profits from the property were simply not at play in
Fernwood’s claim. What was at play were the damages that
Fernwood claims to have suffered as a result of the allegedly
wrongful lien that LPH recorded against the property. And while

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the damages Fernwood sought admittedly stemmed from its
interest in the property, that remedy was not—nor could have
been—based on the title to the property. The title simply was not
in dispute—at least after LPH released the lien. In other words,
the outcome of Fernwood’s cause of action (if it had been allowed
to proceed) would have in no way impacted the property rights
of any party because no title dispute was on the table.

¶14 In sum, the damages that Fernwood sought—even though
they were related to the property—do not somehow turn its cause
of action into a lien-nullification action accompanied by a seven-
year limitation period. Instead, Fernwood’s cause of action started
as and remained a claim seeking damages under a liability created
by the statutes of this state, and it therefore fell under the three-
year statute of limitations. Accordingly, we find no error in the
district court’s determination that Fernwood’s claim was time-
barred.

CONCLUSION

¶15 Having determined that the district court correctly applied
a limitation period of three years to Fernwood’s claim of damages
for an alleged wrongful lien, we affirm.

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