Cohen Braffits Development v. Shae Financial Group

2024 UT App 12

THE UTAH COURT OF APPEALS

COHEN BRAFFITS ESTATES DEVELOPMENT, LLC
AND BRAFFITS CREEK ESTATES, LLC,
Appellants,
v.
SHAE FINANCIAL GROUP, LLC,
Appellee.

Opinion
No. 20210448-CA
Filed January 25, 2024

Fifth District Court, Cedar City Department
The Honorable Ann Marie McIff Allen
No. 180500059

Sarah E. Spencer, Kristen C. Kiburtz, Jeffrey D.
Enquist, and Judson Dee Burton,
Attorneys for Appellants
Troy L. Booher, Dick J. Baldwin, Taylor P. Webb,
Michael N. Zundel, and G. Troy Parkinson,
Attorneys for Appellee

JUDGE RYAN D. TENNEY authored this Opinion, in which
JUDGES GREGORY K. ORME and AMY J. OLIVER concurred.

TENNEY, Judge:

¶1 Abraham Kleinman and Zohar Cohen were partners in a
New York limited liability company, Cohen Braffits Estates
Development, LLC (CBED). In 2015, Cohen obtained two loans
from Shae Financial Group, LLC (Shae), purportedly on behalf of
CBED, and those loans were secured by a deed of trust on
property that CBED owned in Utah. When Kleinman discovered
what Cohen had done, Kleinman sued Cohen in New York on
behalf of CBED. In 2017, a New York court awarded CBED a
monetary judgment against Cohen for the value of the Shae loans.
Cohen Braffits v. Shae Financial

But when Shae subsequently moved to foreclose on the property
that had been secured to its loans, CBED sued Shae in Utah, this
time seeking to invalidate the loans. The Utah district court held
that this suit was barred by the election of remedies doctrine.
CBED subsequently petitioned the New York court to amend its
judgment and remove the monetary judgment that had been
awarded earlier against Cohen, after which it filed a motion under
rule 60(b) of the Utah Rules of Civil Procedure asking the court to
vacate the prior election of remedies ruling. The court denied that
motion.

¶2 CBED now challenges the district court’s initial ruling that
the election of remedies doctrine barred its suit, as well as the
court’s denial of CBED’s rule 60(b) motion. For the reasons set
forth below, we affirm both rulings. 1

BACKGROUND 2

CBED’s Formation & the Shae Loans

¶3 Abraham Kleinman and Zohar Cohen created CBED in
New York to acquire several thousand acres of partially

1. A second party—Braffits Creek Estates, LLC—is listed as an
additional appellant. Braffits Creek Estates is owned 100% by
CBED, and CBED is Braffits Creek’s only member. For simplicity,
we refer to these two entities collectively as CBED throughout this
opinion.

2. As indicated in our introduction, this is a consolidated appeal
in which we’re reviewing both a decision granting summary
judgment and a subsequent decision denying a rule 60(b) motion.
When reviewing a decision granting summary judgment, “we
view the facts and all reasonable inferences drawn therefrom in
the light most favorable to the nonmoving party.” Nassi v. Hatsis,
(continued…)

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developed land near Cedar City that are collectively known as
Braffits Mountain. In 2013, CBED purchased a promissory note
and mortgage (referred to throughout this litigation as “the
Kennedy Note”) from a pending bankruptcy proceeding that
conveyed ownership in Braffits Mountain. The Kennedy Note
itself was secured by a deed of trust recorded in 2007 (the
Kennedy Trust Deed).

¶4 Kleinman and Cohen are both New York residents. CBED
is a limited liability company formed in New York. A 2013
operating agreement identifies Kleinman and Cohen as being 50%
members of CBED. Under the operating agreement, no member
of CBED has “any power or authority to bind [CBED] in any way,
to pledge its credit or to render it liable pecuniarily for any
purpose.” 3

¶5 In the first few months of 2015, Cohen obtained two loans
from Shae, purportedly on CBED’s behalf. The first loan was for
$650,000, and the second loan was for $400,000. Each loan was
secured by pledging the Kennedy Note—and, by extension,
CBED’s ownership in Braffits Mountain. Cohen represented to
Shae that he was authorized to bind CBED to repay these loans
and to provide Braffits Mountain as security for the loans. At the

2023 UT App 9, n.3, 525 P.3d 117. Unless otherwise noted, our
recitation of the facts and procedural history here is drawn from
facts that were deemed undisputed by the district court or facts
(mostly procedural) for which there’s no dispute in the record.

3. In its complaint in the New York case, CBED alleged that in July
2014, Cohen and Kleinman entered into an agreement in which
Cohen transferred some portion of his interest in CBED to
Kleinman, thus resulting in Kleinman becoming CBED’s majority
member. Whether this is or isn’t true is immaterial to the analysis
of the issues before us in this appeal.

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time, Braffits Mountain was CBED’s sole asset. Kleinman was
unaware of the Shae loans when Cohen obtained them.

The New York Action

¶6 Around this same time, Kleinman discovered numerous
instances of allegedly fraudulent activity from Cohen relating to
both Cohen’s relationship with CBED and to certain other
financial transactions. In August 2015, Kleinman and CBED sued
Cohen in New York, asserting a number of causes of action
relating to fraud and corporate misconduct. Kleinman also
requested a declaratory judgment that he owned or controlled
“100% of CBED and is its sole managing member” and an award
of “monetary damages in amounts to be proved at or before
trial.” 4

¶7 During the pendency of the New York suit, Kleinman
learned for the first time about the Shae loans. Kleinman
contacted Shae in April 2016 about these loans, but CBED did not
attempt to add Shae as a party to the case that was already
pending against Cohen. But while CBED did not add Shae to the
suit, it did file an amended complaint in the case in August 2016
that added new allegations against Cohen relating to the Shae
loans. In that portion of the amended complaint, CBED alleged
that Cohen had obtained these loans “by wrongfully,
intentionally and fraudulently representing to Shae that he was
the sole owner of CBED” and that Cohen had not been authorized
to procure those loans.

¶8 CBED subsequently obtained a default judgment against
Cohen based on his failure to participate in the case. Even with
this ruling, though, the New York court initially deferred issuing

4. From this point forward, Kleinman and CBED largely litigated
together. As a result, the parties have often referred to the
positions taken by “CBED” without attempting to separate out
Kleinman’s interest. We will too.

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any ruling on damages until CBED’s claims against another
defendant in the case were resolved. CBED later settled with that
defendant. In August 2017, CBED filed an “Application for Final
Judgment” (the Application) with the New York court, wherein
CBED requested default judgment as to the damages that it had
allegedly suffered from Cohen’s various misdeeds.

¶9 At the outset of the Application, CBED informed the court
that it was seeking “monetary and declaratory relief which is
necessary to determine the rights of the parties inter se and
concerning CBED in order to permit the company to function
going forward with respect to the underlying real property.” The
Application addressed each of the claims at issue in the suit,
including those that were unrelated to the Shae loans. In the
portion of the Application that did relate to the Shae loans, CBED
again alleged that in the first few months of 2015, Cohen had
obtained these loans from Shae while purportedly acting on
CBED’s behalf, but that Cohen had not been authorized to do so.
CBED then asked the court to declare that because Cohen had not
been authorized to procure these loans on CBED’s behalf, they
were “not only fraudulent but were null and void under New
York Limited Liability Law § 402(c)(2)(3) [and] (d)(2).”

¶10 Turning to the question of damages, CBED provided the
court with a chart that listed the “money damages” that it claimed
it had incurred as a result of Cohen’s misdeeds. This chart
included line-item entries for both the $650,000 loan and the
$400,000 loan from Shae, as well as additional line-item entries
setting forth the interest that was owed on those same loans.
When coupled with the other damages that CBED was seeking
from Cohen relating to the other allegations (which were also set
forth in line-item entries), CBED’s total damages request was
$7,661,284.35. On top of that, CBED also requested punitive
damages from Cohen “in the amount of $5 million.” Explaining
the basis for this request, CBED alleged that Cohen had “entered
into fraudulent transactions” with various “members of the

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public,” and, in an apparent reference to Shae, CBED alleged that
this included “the lenders” in Utah.

¶11 In November 2017, the New York court issued a judgment
against Cohen. In this judgment, the court declared that Kleinman
was now “the sole owner” of CBED and that Cohen “no longer
owns any interest therein.” Turning to the Shae loans, the court
noted that the two loans had been for $650,000 and $400,000. It
then ruled that the loans “were unlawful” because they were
incurred “without a vote or consent of the majority” of CBED’s
members and that they were accordingly “null and void pursuant
to New York Limited Liability Company Law § 402(c)(2)(3) and
(d)(2).” Finally, the court granted CBED’s request for a monetary
judgment against Cohen “in the amount of $7,661,284.35”—an
award that, again, accounted for the value of the loans.

The Utah Action

¶12 Cohen did not satisfy his monetary judgment to CBED, and
the Shae loans soon went into default. In March 2018, Shae filed
an action seeking to foreclose on its interest in Braffits Mountain.

¶13 The next month, CBED sued Shae in Utah seeking a
declaratory judgment that Shae’s “claimed interest in [Braffits
Mountain] is invalid and unenforceable.” CBED alleged that
Shae’s interest was unenforceable because “a New York court
ha[d] adjudicated the loan transaction to be unlawful, null and
void” due to Cohen’s lack of authority to agree to the loans on
CBED’s behalf and that the judgment was “entitled to full faith
and credit.”

¶14 In its answer, Shae raised as an affirmative defense the
assertion that the “New York Judgment purporting to nullify and
void the loan transactions between Shae Financial and [CBED] is
not binding upon Shae Financial.” Shae also argued that CBED’s
claims failed based on the election of remedies doctrine.

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¶15 Shae later filed a motion to dismiss that was reliant on the
election of remedies doctrine. There, Shae argued that CBED’s
“wholly inconsistent theory” of recovery in the Utah litigation
“violates the universally accepted doctrine[] of election of
remedies.” Shae argued that CBED “may not, in New York, affirm
the existence of one set of facts entitling them to monetary relief
against Cohen and later, in this court, disaffirm that set and
advance a contrary set of facts entitling them to a declaration that
the debt owed to Shae Financial by [CBED] is void.” After CBED
opposed this motion, the district court denied it, concluding that
CBED had not, “based upon the New York Judgment, made an
election of remedies” because the “theory advanced by [CBED]
which gave rise to the New York Judgment is consistent with the
theory advanced in the case before this Court.”

¶16 Shae later filed a counterclaim seeking, among other
things, a declaratory judgment determining the validity, amount,
and priority of Shae’s security interests and an order for
foreclosure of the Kennedy Trust Deed. Shae also requested a
monetary judgment against CBED for the value of the Shae loans
plus accruing interest.

¶17 After discovery, Shae moved for summary judgment in
January 2020. There, Shae again asserted that the election of
remedies doctrine barred CBED’s suit. In Shae’s view, CBED’s
theory of recovery in this case was “premised on the legal
assertion that Cohen does not owe [CBED] damages for the
amount of Shae’s loans because Shae’s loans are not enforceable.”
Shae argued that this theory was inconsistent with the theory
successfully presented to the New York court, which was that
Cohen owed CBED the amount of the Shae loans. Shae invoked
the collateral estoppel doctrine as well, arguing that for the New
York court to have awarded damages, it had to have determined
that CBED was liable to repay Shae’s loans. Shae argued that
CBED was thus precluded from relitigating that issue in this case.

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Cohen Braffits v. Shae Financial

¶18 CBED opposed the motion for summary judgment. CBED
argued that because the New York judgment was “entered based
upon argument and evidence that the Shae loans were fraudulent
and unauthorized,” there was “no basis for Shae’s contention that
the New York court adjudicated the loans as valid, enforceable,
and binding upon CBED.” With respect to the election of remedies
issue, CBED thus asserted that the “theories of liability alleged in
New York are consistent with the theories alleged in this case and
therefore that a binding election of remedies need not be made
until the New York judgment is fully satisfied.” Of note for this
appeal, CBED agreed that “Shae was not a party to the NY Action
and the NY court did not obtain jurisdiction over Shae to
adjudicate Shae’s rights as between Shae and CBED.” And CBED
further agreed that the Application in the New York case had
requested relief “inter se.”

¶19 The district court issued a ruling granting Shae’s motion
for summary judgment. In contrast to its ruling on the previous
motion to dismiss, the court now ruled that the election of
remedies doctrine did bar CBED’s claim. Explaining this change,
the court noted that at the time of its earlier ruling, Shae had “not
pointed the Court to any evidence” that Kleinman or CBED
“alleged in the New York action that the Shae Financial loans
were, in fact, authorized or enforceable.” But the court had now
considered an affidavit from Kleinman that had been filed in
support of CBED’s “application for a money judgment in New
York,” wherein Kleinman had asserted that he was entitled to “a
money judgment for amounts that he ‘had to pay’ to Shae and
others.”

¶20 Turning to the doctrine itself, the court concluded that
there “is obvious inconsistency between the remedy sought in NY
and the remedy being sought in Utah”—namely, that “[u]nder
one of CBED’s theories, Cohen is liable to CBED for the amount
of the Shae loans,” and “under the other he is not liable to CBED.”
The court highlighted that “CBED has admitted that the

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declaration in the New York Judgment that the Shae Financial
loan is void is not binding on Shae, because Shae was not a party
to the NY action.” The court thus concluded that CBED’s election
in New York was a “purposeful ‘knowledgeable election’” of
remedies that became binding upon entry of the New York
judgment. Because of this, the court concluded that CBED’s claims
were precluded and that it need not weigh in on the alternate
collateral estoppel arguments raised by Shae. The court thus
granted Shae’s request for summary judgment and dismissed
CBED’s claims with prejudice.

¶21 After the court issued this ruling, CBED filed a motion
under rule 54(b) of the Utah Rules of Civil Procedure asking the
court to set its prior ruling aside. CBED argued that the court’s
ruling was incorrect because CBED’s “theories of liability” in the
New York and Utah cases were actually consistent, and it also
argued that there had been no binding election because the New
York judgment had not been satisfied. Shae opposed this motion,
arguing that the court’s ruling had been correct.

¶22 Before the court ruled on CBED’s motion to set aside the
prior summary judgment ruling, Shae filed a motion for summary
judgment on its counterclaim. In this motion, Shae asked the court
to establish the validity, priority, and amount of the security
interests encumbering the Kennedy Note and to order the
foreclosure of the Kennedy Trust Deed. Shae also calculated
CBED’s liability to it in the amount of $3,207,001.57—the amount
of the two Shae loans plus interest—and requested that the court
enter a monetary judgment against CBED in that amount. In
response, CBED filed a cross-motion for summary judgment, now
asserting that the New York judgment was actually binding on
Shae and that the loans were void.

¶23 The district court denied CBED’s rule 54(b) motion to set
aside the summary judgment ruling on the election of remedies
issue, concluding that it saw no legal error in its prior ruling. The

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court next granted Shae’s request for summary judgment on its
claims against CBED, awarding it $3,207,001.57, with continuing
interest until paid. And the court further ordered that the
Kennedy Note and the Kennedy Trust Deed should be “sold by
the Sheriff of Iron County, Utah,” and that CBED would remain
liable for any deficiency remaining on the judgment after the sale.
And finally, the court awarded Shae its attorney fees.

¶24 CBED timely appealed these rulings (the First Appeal).

CBED Obtains an Amendment of the New York Judgment & Then
Files a Rule 60(b) Motion in the Utah Case

¶25 In December 2021—which was while briefing was
underway in the First Appeal—Kleinman, CBED, and Cohen filed
a stipulated request in the New York case to amend the prior
judgment and vacate the portion of the monetary award against
Cohen relating to the Shae loans. The parties explained to the New
York court that CBED had filed suit against Shae in Utah and that
this suit was “precluded” because of that monetary judgment. The
parties also informed the New York court that “the proposed
Amended Judgment would not prejudice a substantial right of
either [CBED or Cohen] and would not otherwise be prejudicial
to either party.” On February 16, 2022, the New York court
granted this request and amended its judgment to vacate the
earlier monetary judgment against Cohen pertaining to the Shae
loans. The New York court also ordered “that the November 14,
2017 Judgment entered in this matter is amended on consent,
nunc pro tunc and effective as of November 14, 2017.”

¶26 The next day, CBED filed a motion in the Utah case under
rule 60(b) of the Utah Rules of Civil Procedure asking the court to
set aside the earlier summary judgment ruling that had been
based on the election of remedies issue. In CBED’s view, this was
warranted because of the amendment to the New York judgment.
CBED asked the Utah court to vacate its prior ruling on one of two
grounds. First, it invoked rule 60(b)(5), which permits a court to

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Cohen Braffits v. Shae Financial

relieve a party from a judgment where “a prior judgment upon
which it is based has been reversed or vacated”; second, CBED
invoked rule 60(b)(6), which allows the court to grant relief from
a judgment for “any other reason that justifies relief.”

¶27 Shae opposed this motion, and the district court
subsequently issued a written decision denying it. The court
started by addressing rule 60(b) generally. It emphasized that it
had “broad discretion” in considering a rule 60(b) motion, and it
then concluded that “it would be inequitable and not a sound
exercise of discretion to grant relief under Rule 60(b)(5) or (6),
given [CBED’s] delay in seeking to amend the New York
judgment.” In the court’s view, CBED had “made a series of
tactical litigation choices, beginning with its decision to pursue its
remedy against Cohen in New York while deliberately excluding
Shae from those proceedings,” and that only “years later, when
CBED does not like the result of its tactics,” did CBED seek “to
unwind the lengthy proceedings before both the New York and
this Court and try again.” The court thus expressed its view that
“CBED’s recent voluntary stipulation to amend its judgment
against Cohen does not alter its knowledgeable election of
remedies from nearly five years prior.” (Emphasis in original.)

¶28 Addressing rule 60(b)(5) more particularly, the court
concluded that the rule does not apply to “CBED’s voluntary,
stipulated amendment to the New York judgment” because there
“is a fundamental difference between having a hard-won legal
victory taken away through reversal or vacatur, and voluntarily
parting with that victory through a stipulated amendment,
hoping to gain advantage over a different party in a different
lawsuit (Shae).” The court thus “decline[d] to exercise its
considerable discretion to grant CBED relief where the New York
judgment has not been vacated or reversed but has instead been
strategically modified to avoid the consequences of both the New
York litigation and the instant case.”

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Cohen Braffits v. Shae Financial

¶29 Turning to rule 60(b)(6), the court pointed out that CBED
had “advance[d] no separate set of facts or arguments uniquely
addressed to this Court’s discretion under Rule 60(b)(6).” In the
court’s view, because “CBED ask[ed] this Court to consider
factual ‘grounds’ for relief under Rule 60(b)(5)—even if its request
is unavailing—relief is unavailable under subsection (6) where no
factually distinctive grounds are offered or argued.”

¶30 CBED timely appealed the court’s rule 60(b) decision (the
Second Appeal).

Consolidation of the Two Appeals

¶31 In July 2022, CBED filed a motion asking this court to
consolidate the two appeals. Shae opposed the request, pointing
out that briefing had already been completed on the First Appeal,
while briefing had not yet begun on the Second Appeal. This court
denied the motion for consolidation.

¶32 This court held oral argument in the First Appeal in
January 2023. At that time, the reply brief in the Second Appeal
had just been filed. After oral argument, this court reconsidered
its earlier decision and issued an order on its own motion that
consolidated the two appeals. This order also invited each party
to submit a supplemental memorandum “addressing the effect, if
any, that consolidation will have on the issues raised in the
respective appeals.”

¶33 Both parties submitted supplemental memoranda. In its
memorandum, CBED argued that the “factual backgrounds and
legal issues” in the First Appeal and the Second Appeal “overlap,
virtually in total—the only evidentiary difference is one
document: the amended New York Judgment which is retroactive
as of the date of the original.” CBED also argued that the “Full
Faith and Credit Clause of the United States Constitution requires
this Court to accept the New York judgment, as amended”
because it “would be unconstitutional to uphold the summary

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Cohen Braffits v. Shae Financial

judgment where it is based upon a legal document—a court
judgment—that by definition and undisputedly is no more.” In its
memorandum, Shae argued that while “the underlying facts of
both cases are similar, the issues are completely distinct” because
the First Appeal “deals with the district court’s application of the
election of remedies doctrine” and the Second Appeal “deals with
the district court’s application of rule 60(b) of the Utah Rules of
Civil Procedure.” Shae asserted that the issues in the Second
Appeal “have no bearing on the correctness of the decision in [the
First Appeal], and the court must consider the [summary]
judgment without reference to later-occurring events.”

¶34 This court subsequently held oral argument on the
consolidated appeals.

ISSUES AND STANDARDS OF REVIEW

¶35 The first issue on appeal is whether the district court erred
in granting summary judgment in favor of Shae based on its
conclusion that the election of remedies doctrine applied. “An
appellate court reviews a trial court’s legal conclusions and
ultimate grant or denial of summary judgment for correctness,
and views the facts and all reasonable inferences drawn therefrom
in the light most favorable to the nonmoving party.” Orvis v.
Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (quotation simplified). And
the “availability of a remedy is a legal conclusion that we review
for correctness.” KTM Health Care Inc. v. SG Nursing Home LLC,
2018 UT App 152, ¶ 29, 436 P.3d 151 (quotation simplified).

¶36 The second issue on appeal is whether the district court
abused its discretion in denying CBED’s rule 60(b) motion.
Appellate courts “review a district court’s denial of a 60(b) motion
under an abuse of discretion standard of review.” Menzies v.
Galetka, 2006 UT 81, ¶ 54, 150 P.3d 480. “In addition, we note that
our review of a district court’s rule 60(b) order is limited in scope
because such an appeal must only address the propriety of the

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denial or grant of relief, not the correctness of the underlying
judgment.” Bodell Constr. Co. v. Robbins, 2014 UT App 203, ¶ 5, 334
P.3d 1004 (quotation simplified). 5

ANALYSIS

I. Election of Remedies

¶37 CBED obtained a judgment in New York in November
2017 under which Cohen was obligated to pay over a million
dollars to CBED based on the Shae loans. Because of this
judgment, the Utah district court held that under the election of
remedies doctrine, CBED could not subsequently obtain a
judgment declaring the Shae loans null and void. In the First
Appeal, CBED argues that this ruling was incorrect. We disagree.

¶38 “In its most basic terms, the election of remedies doctrine
prevents double redress for a single wrong.” Helf v. Chevron U.S.A.
Inc., 2015 UT 81, ¶ 68, 361 P.3d 63 (quotation simplified). As
articulated by our supreme court, this doctrine has two branches:
first, a plaintiff may not obtain “a double recovery”; and second,
a plaintiff also “may not obtain . . . legally or factually inconsistent
recoveries for the same wrong.” Id. ¶ 70. In its brief, CBED
suggests that this case should be analyzed under the double
recovery branch, and in CBED’s view, the double recovery branch
doesn’t bar its claims. But we agree with the district court that this

5. Both below and on appeal, Shae has argued that CBED’s claims
are also barred by collateral estoppel. In its summary judgment
ruling, the district court determined that it was unnecessary to
address the collateral estoppel argument because the election of
remedies doctrine precluded CBED’s claims against Shae.
Because we affirm the district court’s ruling based on the election
of remedies doctrine, we likewise need not address Shae’s
collateral estoppel argument.

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case was appropriately analyzed under the inconsistent theories
branch and that this branch bars CBED’s claims.

¶39 “Utah’s modern pleading rules permit litigants to plead
inconsistent theories of recovery in the alternative.” Id. ¶ 74; see
also Utah R. Civ. P. 8(e) (“A party may state a claim or defense
alternately or hypothetically . . . .”). Under the inconsistent
theories branch of the election of remedies doctrine, the plaintiff’s
election becomes binding once “one remedy is pursued to a
determinative conclusion.” Helf, 2015 UT 81, ¶ 77 (quotation
simplified). And a determinative conclusion occurs “once the fact-
finder and the judge have resolved all factual and legal disputes
related to the inconsistent theories of liability,” at which point
“the plaintiff is then entitled to the one remedy (if any) that is
supported by the final determination of the law and the facts.” Id.
¶ 76 (quotation simplified); see also H&P Invs. v. iLux Cap. Mgmt.
LLC, 2021 UT App 113, ¶¶ 44–47, 500 P.3d 906 (applying the
inconsistent recovery branch).

¶40 As discussed, CBED sought and obtained a monetary
judgment against Cohen in the New York case that was based on
the value of the Shae loans. And on this, CBED was very clear. In
the Application, CBED provided the New York court with a chart
that listed its various damages, and that chart included specific
line items for the value of the Shae loans and for the interest that
would be owed on them. In the ensuing judgment, the court then
granted that request. Once this occurred, this theory had now
been “pursued to a determinative conclusion” and the New York
court had now “resolved all factual and legal disputes” relating to
it. Helf, 2015 UT 81, ¶¶ 76–77 (quotation simplified). Because of
this determinative conclusion, it would have been inconsistent for
the Utah court to have later held that those loans weren’t actually
valid. Simply put, either CBED owed this amount to Shae or it
didn’t. And the New York judgment was predicated on CBED
owing this amount. Because of this, CBED was indeed now

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seeking “legally . . . inconsistent theories of recovery for a single
wrong” by arguing otherwise in the Utah case. Id. ¶ 69.

¶41 CBED pushes back on two fronts. But we find neither of its
arguments to be availing.

¶42 First, CBED points out that, in addition to the monetary
judgment against Cohen, the New York court also issued a
declaratory judgment that the Shae loans were “null and void.”
While CBED places much weight on this aspect of the New York
ruling, the problem with its argument is that CBED never asked
for this declaratory relief in a manner that would have been
binding on Shae. After all, CBED didn’t sue Shae in the New York
action, even though Shae was, to put it mildly, a decidedly
interested party with respect to the validity of its own loans to
Cohen (and, purportedly, CBED). Moreover, in the Application in
the New York case, CBED affirmatively informed the court that it
was seeking “monetary and declaratory relief which is necessary
to determine the rights of the parties inter se.” The term “inter se”
is understood to mean, “(Of a right or duty) owed between the
parties rather than to others.” Inter se, Black’s Law Dictionary
(11th ed. 2019). Again, CBED had not sued Shae as part of the New
York suit, so Shae was not a “party” to this action. Thus, in its own
request for relief, CBED was telling the New York court that it was
not seeking a ruling that would be binding on Shae.

¶43 Indeed, although CBED argued early in the Utah litigation
that the New York judgment was somehow binding on Shae
under the Full Faith and Credit Clause, CBED later admitted in its
opposition to Shae’s motion for summary judgment that “Shae
was not a party to the NY Action and the NY court did not obtain
jurisdiction over Shae to adjudicate Shae’s rights as between Shae
and CBED.” And CBED has recently admitted this again in federal
court. There, CBED has recently sued Shae in Utah federal court
based on events involved in the sale of Braffits Mountain at the
aforementioned sheriff’s sale. In its complaint in that case, CBED

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Cohen Braffits v. Shae Financial

recounted the procedural history of the events at issue in this
appeal. As noted by the federal district court in a ruling, CBED
affirmatively alleged in its own complaint that because Shae was
not a party to the New York action, Shae “was not bound by the
New York court’s ruling that the loans were null and void.” Cohen
Braffits Estates Dev., LLC v. Shae Fin. Group, No. 4:23-cv-00031, 2023
WL 8574898, at *2 (D. Utah Dec. 11, 2023) (citing CBED’s federal
complaint).

¶44 The parties have spent some energy in this case arguing
about why CBED chose to file suit in New York without involving
Shae. Shae suggests that this was intentional—that what CBED
was really after in the New York case was a declaration that
Kleinman (and not Cohen) controlled CBED. From this, Shae
surmises that perhaps CBED initially thought that it could recover
from Cohen, but that CBED worried that if it added Shae to the
mix, Shae might be able to argue that CBED was liable for these
loans under some sort of agency theory, thus complicating the
litigation. 6

¶45 We need not ultimately figure out why CBED proceeded
as it did. What matters is that it did. Again, CBED sought and
obtained a final monetary judgment against Cohen in the New
York case that was predicated on CBED’s ongoing liability to Shae
for these loans. If CBED didn’t owe that money to Shae, there
would have been no basis for obtaining that monetary judgment.

6. Along these lines, Shae points us to New York Limited Liability
Company Law section 412(d), which states that “[n]o act of a
member, manager or other agent of a limited liability company in
contravention of a restriction on authority shall bind the limited
liability company to persons having knowledge of the
restriction.” At various points in this litigation, there have been
allegations that Cohen affirmatively represented to Shae that he
did have authority to act for CBED, which might have allowed
Shae to plausibly argue that these acts were valid.

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As a result, when CBED later filed an action in Utah asking a Utah
court to declare that the Shae loans were invalid as to Shae, CBED
was asking for a declaration that would have been inconsistent
with the New York judgment as it then existed.

¶46 This leads to CBED’s second responsive argument, which
starts with the suggestion that it couldn’t have sued Shae in New
York because the New York courts lacked personal jurisdiction
over Shae. CBED then relies on language from Helf in which our
supreme court opined that if the “strict application of the election
of remedies doctrine” would present a litigant with a “cruel
dilemma” in which the litigant is forced to “choose at peril” one
potential remedy over the other, a court may decline to enforce
the election of remedies doctrine. Helf, 2015 UT 81, ¶¶ 80, 82.

¶47 But this wasn’t the type of “cruel dilemma” that Helf was
concerned about. Helf involved a litigant who had been injured at
work and was now seeking both workers’ compensation benefits
and damages against the employer through intentional tort
claims. Id. ¶ 80. As the supreme court explained, this scenario
presented the worker with two particular problems. First, the
worker could “not pursue these two remedies in a single forum.”
Id. ¶ 79. And second, although an award in the intentional tort
case might be greater than the recovery in a workers’
compensation case, if the worker obtained an award of workers’
compensation benefits before the intentional tort case was
resolved, this would foreclose any future award of damages in the
tort case. Id. ¶¶ 80–81. This is so because a workers’ compensation
claim requires a determination that there has been an “accident,”
while an intentional tort requires proof that something intentional
occurred. Id. ¶¶ 78–79, 86. Because many injured workers might
need financial assistance quickly, the supreme court was worried
that the strict application of the election of remedies doctrine in
such a circumstance might require the worker to make a
“gambler’s choice,” wherein the worker would have to decide
whether to pursue workers’ compensation benefits “before

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Cohen Braffits v. Shae Financial

knowing how a jury will resolve an intentional tort claim.” Id.
¶¶ 84–85 (quotation simplified). But the supreme court
recognized that the election of remedies doctrine is a “rule of
procedure or judicial administration,” and it then held that
because this presents an “equitable judicial principle,” courts
should fashion remedies in such a circumstance to avoid
presenting such an injured worker with this kind of unfair choice.
Id. ¶ 85 (quotation simplified).

¶48 It’s unclear whether the supreme court meant to extend
this same construct outside the injured worker scenario. But
regardless, under our own assessment of the “equitable judicial
principles” behind the election of remedies doctrine, we don’t
believe that CBED was presented with a similarly cruel dilemma.

¶49 As an initial matter, CBED’s argument is premised on its
assertion that it couldn’t have sued Shae in New York. We have
some doubt whether this is so. After all, Shae had made two large
loans to Cohen that were purportedly on behalf of CBED, and at
the time, Cohen was a New York resident and CBED was a New
York corporation. This may well have sufficed to establish
minimum contacts. In any event, the dilemma that was
contemplated by Helf involved two remedies of differing values
in which receipt of the lesser remedy might come quicker, thereby
foreclosing the litigant’s ability to ever receive the greater remedy.
This is why the supreme court was concerned about presenting
such a litigant with a “gambler’s dilemma.”

¶50 But here, CBED was seeking just a single thing: it wanted
to not be financially responsible for the Shae loans. In the New
York case, CBED availed itself of one potential option for
obtaining that result: it successfully sued Cohen and obtained a
monetary judgment against him based on the value of those loans.
If CBED thought it could also achieve that outcome by
invalidating the loans as to Shae, it could have sought such a
ruling at the same time too. CBED could have sued Shae in New

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York as part of the suit that was already pending against Cohen
and in which it had already asserted claims based on these very
loans. And if Shae had argued that the New York court lacked
jurisdiction, that jurisdictional question could have been litigated
then and there. Or, alternatively, CBED could have
contemporaneously sued Shae in Utah—after all, it had no
problem suing Shae in Utah years later, and it has given us no
reason why it couldn’t have done so earlier. And after doing so, it
could have asked the New York court to stay imposition of any
judgment on the monetary judgment damages award against
Cohen while that suit was pending.

¶51 Our point is this: if CBED thought it could invalidate those
loans as to Shae, CBED could have timely asked a court for this
very relief. But CBED didn’t do anything to seek such relief.
Instead, it took the case against Cohen in New York to final
judgment without asking any court to rule that the loans were
invalid as to Shae. It was only years later, after Shae sought to
assert its own rights under those loans, that CBED first raised this
claim.

¶52 Again, the question at issue in the First Appeal is whether
the district court correctly granted summary judgment on the
election of remedies issue based on the record that was before it
at that time. (The court’s subsequent ruling on the altered record
that was at issue in the rule 60(b) motion will be addressed in Part
II.) On the state of that record, we agree with the district court that
there was an “obvious inconsistency” between the “remedy being
sought in Utah” and the final monetary judgment that had
already been obtained in New York. Because the New York
judgment had ordered Cohen to pay monetary damages to CBED
based on CBED’s financial obligations to Shae, the election of
remedies doctrine prevented CBED from obtaining a ruling in
Utah holding that CBED did not actually owe anything to Shae at
all. We thus affirm the district court’s decision granting summary
judgment to Shae.

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Cohen Braffits v. Shae Financial

II. Rule 60(b)

¶53 As noted, after the Utah district court granted Shae’s
motion for summary judgment on the election of remedies issue,
CBED filed a stipulated request in the New York case asking the
court to remove the damage award against Cohen from the earlier
judgment. The New York court granted that request. Once this
occurred, CBED filed a motion asking the Utah court to undo its
election of remedies ruling under either rule 60(b)(5) or rule
60(b)(6) of the Utah Rules of Civil Procedure. The Utah court
declined to do so. CBED now argues that this was an abuse of
discretion. We disagree.

¶54 Rule 60(b) states that “[o]n motion and upon just terms, the
court may relieve a party or its legal representative from a
judgment, order, or proceeding” for any of the reasons set forth in
the ensuing subparts. Utah R. Civ. P. 60(b) (emphasis added). In
other contexts, we’ve recognized that the “use of the word ‘may,’
. . . indicates a court’s discretionary power.” North Fork Meadows
Owners Ass’n, Inc. v. Dove, 2023 UT App 107, ¶ 15, 537 P.3d 258
(quotation simplified); see also Mota v. Mota, 2016 UT App 201, ¶ 6,
382 P.3d 1080. And the same is true here too. Indeed, our supreme
court has held that district courts have “broad discretion” when
ruling on rule 60(b) motions because such “motions are equitable
in nature, saturated with facts, and call upon judges to apply
fundamental principles of fairness that do not easily lend
themselves to appellate review.” Brady v. Park, 2019 UT 16, ¶ 106,
445 P.3d 395 (quotation simplified). 7

7. A district court’s “broad discretion” to deny a 60(b) motion is
not unfettered. “If a district court’s ruling on a 60(b) motion is
based on clearly erroneous factual findings or flawed legal
conclusions, the district court has likely abused its discretion.”
Menzies v. Galetka, 2006 UT 81, ¶ 55, 150 P.3d 480; see also Harrison
(continued…)

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Cohen Braffits v. Shae Financial

¶55 Again, CBED requested relief under both rule 60(b)(5) and
rule 60(b)(6), but the district court rejected both requests. We see
no abuse of discretion with respect to either ruling.

¶56 First, rule 60(b)(5) provides that a “court may relieve a
party . . . from a judgment” if “a prior judgment upon which it is
based has been reversed or vacated, or it is no longer equitable
that the judgment should have prospective application.” Utah R.
Civ. P. 60(b)(5). And we have held that this “power of equity is
only to be applied . . . when highly significant changes alter the
landscape of a judgment—for instance, subsequent legislation, a
change in the decisional law, or a change in the operative facts.”
Elite Legacy Corp. v. Schvaneveldt, 2016 UT App 228, ¶ 41, 391 P.3d
222 (quotation simplified).

¶57 The district court concluded that rule 60(b)(5) doesn’t
apply to this case. The court noted that this rule operates when
the prior judgment has been “reversed or vacated,” whereas this

v. Thurston, 2011 UT App 231, ¶ 12, 258 P.3d 665 (noting that
“although the district court has broad discretion in ruling on a
rule 60(b) motion,” the ruling in question was infirm because the
court had “ignore[d] undisputed affidavit evidence and actions”
the plaintiff had taken and had “fail[ed] to consider the fact that
the ultimate root of her problem . . . were factors beyond her
control”). CBED suggests that the “district court made clearly
erroneous factual findings” by describing CBED’s efforts to
amend the New York judgment as a “collateral attack” and a
“collusive amendment by stipulation.” But these were law-based
descriptions of the record, not factual conclusions. In any event,
even if the court’s reference to the “collusive” nature of the
stipulation had some factual component, we would still conclude
that there was no abuse of discretion with respect to the court’s
denial of the rule 60(b) motion. And this is so because, as
explained below, the court ultimately focused its ruling on the
broader timing implications of CBED’s actions.

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case involved a “stipulated amendment.” The parties on appeal
disagree about whether the court was correct in drawing this
distinction. But we need not decide whether this was so because,
aside from questioning whether rule 60(b)(5)’s predicate had been
satisfied, the court more broadly denied the rule 60(b) motion as
a whole based on its concerns about the timing of CBED’s various
filings. And on this, we see no abuse of the court’s discretion.

¶58 The court opined that CBED had made “a series of tactical
litigation choices, beginning with its decision to pursue its remedy
against Cohen in New York while deliberately excluding Shae
from those proceedings.” The court had good reason for this
assessment. As discussed, CBED filed the amended complaint in
New York in August 2016 in which it asserted claims against
Cohen based on the Shae loans. But CBED did not also file suit at
that time against Shae, either in the New York case or
contemporaneously here in Utah. Instead, CBED took its case
against Cohen to final judgment without ever seeking to
invalidate Shae’s rights to the money—and CBED did so even
though, as it subsequently acknowledged in both the Utah case
and again in federal court, the New York court’s ruling about the
supposed invalidity of those loans could not have been binding
on Shae because Shae was a not a party to that suit.

¶59 It was only in April 2018 when CBED first sought to
invalidate those loans as to Shae through the Utah action. But this
was after Cohen had defaulted on his obligations to CBED, and
this was also after Shae had filed an action in Utah seeking to
foreclose on the Braffits Mountain property. Moreover, in this
Utah suit, CBED then spent several years litigating as if the New
York judgment was valid on its original terms. It was only in
December 2021 that CBED went to New York and asked the court
to remove the prior monetary damage award against Cohen. But
by this point, the Utah case had been fully litigated against the
backdrop of the original New York judgment, and that Utah case
was already up on appeal.

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¶60 Thus, when CBED finally asked the New York court to not
order monetary damages against Cohen related to the Shae loans,
this was five years after CBED had filed an amended complaint in
New York asking for such damages, four years after the New York
judgment had awarded those damages, three years after Shae had
initiated foreclosure proceedings in Utah, three years after CBED
first sued Shae in Utah, and a year and a half after the Utah district
court had issued a summary judgment ruling that was predicated
on that earlier monetary judgment. If CBED had intended to
relinquish its right to monetary damages against Cohen stemming
from these loans, it could have done so at any of these earlier
points. Instead, CBED let both the New York case and the Utah
case proceed to final judgment, and it was only after it lost in the
Utah case that CBED finally sought to alter the monetary
judgment component from the New York case.

¶61 A district court has broad discretion to consider any
request under rule 60(b). Under these circumstances, we see no
basis for concluding that the district court abused its discretion in
declining to undo the results of the already-concluded Utah
litigation based on CBED’s belated decision to not request
monetary damages against Cohen for the value of the Shae loans.

¶62 Second, CBED also requested relief under rule 60(b)(6).
That rule applies when “any other reason . . . justifies relief.” Utah
R. Civ. P. 60(b)(6). This is sometimes referred to as “the rule’s
residuary clause,” and we’ve held that the “power given to courts
by rule 60(b)(6) should be cautiously and sparingly invoked” and
“should be used only in unusual and exceptional instances.”
Fritsche v. Deer Valley Ridge at Silver Lake Ass’n of Unit Owners, 2022
UT App 11, ¶¶ 46–47, 504 P.3d 761 (quotation simplified).

¶63 The district court rejected CBED’s rule 60(b)(6) argument,
in part, because of its conclusion that “CBED advance[d] no
separate set of facts or arguments uniquely addressed to this
Court’s discretion under Rule 60(b)(6).” We see no basis for

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overturning this conclusion. As recognized by our supreme court,
if a party argues that “rule 60(b)(6) should apply in the event its
other arguments do not succeed,” but the party doesn’t “express
any additional reasons in support of” its rule 60(b)(6) argument,
that argument fails “for the same reasons” that the arguments
under the other subsections failed. Brady v. Park, 2019 UT 16,
¶ 110, 445 P.3d 395.

¶64 This is the case here. As it did with its rule 60(b)(5)
argument, CBED focuses on the fact that the New York judgment
was amended in early 2022. But as discussed, this amendment
occurred well after the New York court and the Utah court had
already issued rulings on the basis of CBED’s prior request for
monetary damages against Cohen. Thus, whether couched in
terms of rule 60(b)(5) or rule 60(b)(6), the result is the same: we see
no basis for overturning the court’s exercise of its broad discretion
in this matter. 8

8. In CBED’s supplemental memorandum addressing the effects
of our decision to consolidate the two appeals, CBED argued that
the Full Faith and Credit Clause of the United States Constitution
“requires this Court to honor the amended New York judgment”
by “overturning a summary judgment order that is based on a
judgment that, by operation of law, no longer exists and never did
exist (a classic legal fiction).” But CBED never preserved this
argument.
To be clear, in the early stages of this litigation, CBED did
invoke the Full Faith and Credit Clause in an attempt to bind Shae
to the original New York judgment. But years later, the Utah
district court granted summary judgment in Shae’s favor based
on the election of remedies doctrine, after which CBED secured
an amended judgment in New York in an attempt to undo that
ruling. After those rulings were issued, CBED never argued to the
Utah court that the Full Faith and Credit Clause now required it
(continued…)

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Cohen Braffits v. Shae Financial

CONCLUSION

¶65 The district court did not err when it concluded that the
election of remedies doctrine prevented CBED from seeking a
declaration in Utah that the Shae loans were null and void as to
Shae. As a result, the district court correctly granted summary
judgment in Shae’s favor. The district court also did not abuse its
discretion in denying CBED’s requests for relief under rule 60(b).

¶66 Affirmed. 9

to accept the amended New York judgment and thus undo its
summary judgment ruling as a result. “When a party fails to raise
and argue an issue in the trial court, it has failed to preserve the
issue, and an appellate court will not typically reach that issue
absent a valid exception to preservation.” State v. Johnson, 2017 UT
76, ¶ 15, 416 P.3d 443. Here, the first time CBED made this
argument was in its response to our decision to consolidate the
two appeals. For preservation purposes, this was too late. We
therefore do not reach the argument.

9. As noted, the district court granted Shae’s request for attorney
fees, and it did so based on the contractual language in the
promissory notes underlying the Shae loans. A “provision for
payment of attorney’s fees in a contract includes attorney’s fees
incurred by the prevailing party on appeal.” Management Servs.
Corp. v. Development Assocs., 617 P.2d 406, 409 (Utah 1980); see also
Elite Legacy Corp. v. Schvaneveldt, 2016 UT App 228, ¶ 74, 391 P.3d
222 (“When under a contractual fee provision a party is entitled
to attorney fees below and prevails on appeal, that party is also
entitled to fees reasonably incurred on appeal.”). In light of this,
Shae has requested its attorney fees incurred in this appeal. We
grant that request and remand to the district court for a
determination of those fees.

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