Cook Martin Poulson v. Smith

2021 UT App 60
THE UTAH COURT OF APPEALS
C OOK M ARTIN POULSON PC,
Appellee,
v.
DANIEL G. S MITH ,
Appellant.
Opinion
No. 20190412-CA
Filed June 10, 2021
First District Court, Logan Department
The Honorable Kevin K. Allen
No. 140100505
Troy L. Booher, Beth E. Kennedy, and Russell S.
Walker, Attorneys for Appellant
Thomas J. Burns, Aaron R. Harris, and Elisabeth E.
Calvert, Attorneys for Appellees
JUDGE M ICHELE M. C HRISTIANSEN F ORSTER authored this Opinion,
in which J UDGES D AVID N. M ORTENSEN and R YAN M. HARRIS
concurred.
CHRISTIANSEN FORSTER, Judge:
Daniel G. Smith appeals the district court’s orders finding	¶1
him 	in 	contempt. 	We 	reverse 	and 	remand 	for 	further
proceedings.
BACKGROUND
This matter first came before us in Cook Martin Poulson PC	¶2
v. Smith, 2020 UT App 57, 464 P.3d 541. In that appeal, Smith
challenged 	the 	district 	court’s 	findings 	of 	contempt 	and
concomitant entry of sanctions and judgment against him. Id.

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¶ 1. We reversed the court’s order and remanded for further
proceedings. Id. ¶ 44.
While that appeal was pending, however, Cook Martin	¶3
Poulson PC (CMP) took steps to enforce its judgment. Smith
sought a stay of execution but was unable to obtain one because
he could not post a bond or other security. In February 2018, in
post-judgment proceedings, the district court ordered Smith “not
to sell, loan, give away, or otherwise dispose of [his] non-exempt
property pending” a hearing scheduled for March 5 (the First
Supplemental Order). Following the hearing, the court issued a
writ of execution directing the sheriff to seize specific property,
including livestock, two promissory notes, and Smith’s shares in
Daniel G. Smith Inc. (DGSI). However, the court did not make
any additional orders prohibiting Smith from disposing of his
property.
When the sheriff sought to execute on the property in	¶4
September 2018, Smith refused to turn over the promissory notes
or the DGSI stock certificates because he claimed they were in
safe deposit boxes to which he did not have access. In fact, the
promissory notes had been moved to a safe deposit box in Idaho,
and the stock certificates were held in a safe deposit box owned
by Smith’s wife. Smith also refused to turn over certain cattle
because he had moved them out of state. CMP filed a motion for
order to show cause, alleging that Smith should be held in
contempt 	for 	violating 	the 	writ 	of 	execution 	and 	the 	First
Supplemental Order by transferring the cattle out of state and
refusing to turn over the promissory notes and stock certificates.
The court issued an order to show cause and scheduled a	¶5
hearing on the contempt allegations and again ordered Smith, as
of November 5, 2018, “not to sell, loan, give away, or otherwise
dispose of [his] non-exempt property” (the Second Supplemental
Order). This time, however, the court did not impose a time limit
on the order. When the matter came before the court for a

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20190412-CA 	3 	2021 UT App 60
hearing, it continued the hearing because CMP had not provided
an affidavit from the sheriff.
In the meantime, CMP filed another motion for order to	¶6
show cause based on additional conduct. In this motion, CMP
alleged that Smith had violated the supplemental orders by
pledging some of the cattle as security for a loan in September
2018 and selling off some cattle in October 2018.
The matter came before the district court again at the	¶7
continued hearing on January 7, 2019. At that hearing, CMP
asked Smith about the proceeds from the October sale of the
cattle. Smith testified that he received $26,000 from selling the
cattle and that he placed the sale proceeds in a bank account (the
Cow Calf Account). He also confirmed that between November
13 and December 11, 2018, he spent approximately $26,100 out of
the Cow Calf Account. However, he was not asked to provide
any details about how the funds were used. Moreover, neither
the court’s order to show cause nor CMP’s motion in support of
that order identified Smith’s expenditures from the Cow Calf
Account as potentially contemptuous.
After the hearing, the court ruled that Smith could not be	¶8
held in contempt for violating the writ of execution because that
writ did not command him to do anything or prohibit him from
acting. The court also determined that Smith could not be held in
contempt for disposing of property between March 5, 2018,
(when the First Supplemental Order expired) and November 5,
2018, (when the court issued the Second Supplemental Order)
because there was no order prohibiting him from doing so
during that time period. Because Smith’s actions of moving the
promissory notes to an out-of-state safe deposit box, selling
cattle, and pledging cattle as security occurred during that time,
they could not be contemptuous of a court order. Additionally,
the court concluded that Smith could not be held in contempt for

Cook Martin Poulson v. Smith
20190412-CA 	4 	2021 UT App 60
attempting to gift stock certificates to his wife, because the date
of the gift was unclear.1
However, the court did hold Smith in contempt (the First	¶9
Contempt Order) for spending the proceeds of the cattle sale that
were in the Cow Calf Account, since those expenditures were
made 	after 	November 	5. 	In 	addition 	to 	holding 	Smith 	in
contempt for the expenditures, the court ordered Smith to return
$26,100.45 to the Cow Calf Account and produce the DGSI stock
certificates, 	which 	he 	had 	turned 	over 	to 	his 	wife, 	within
fourteen days of the court’s order. Smith did not turn over the
money or the stock certificates as ordered. Instead, he filed two
“precipes”2 with the court explaining why he was not required
to comply with the court’s order. The first precipe asserted that
Smith’s wife had exercised her “right to demand and receive
[Smith]’s indorsement” of the stock certificates under Utah law
and that he intended to comply with that request. The second
asserted that the expenditures from the Cow Calf Account were
“used strictly to pay for expenses necessary to feed and maintain
the herd” and could therefore not be considered “a disposition
of assets.”
Following Smith’s failure to return the money and turn	¶10
over the stock certificates, CMP filed a Notice of Defendant’s
Non-Compliance with Court Order & Request for Telephone
1. 	The 	court 	determined 	that 	Smith 	still 	owned 	the 	stock
certificates 	and 	shares 	in 	DGSI 	because 	transferring 	the
certificates to his wife did not “equate to a change of share
ownership in” DGSI. Smith does not contest this determination
on appeal.
2. A praecipe, also spelled precipe, is a common law “writ
ordering a defendant to do some act or to explain why inaction
is appropriate.” Praecipe, Black’s Law Dictionary (11th ed. 2019).

Cook Martin Poulson v. Smith
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Conference, in which it asked the district court for “a telephone
conference to secure guidance from this Court regarding the next
steps that this Court will expect CMP to follow in order to seek
sanctions for [Smith’s] contempt.” CMP did not request an order
to show cause or file a motion for sanctions.
The court scheduled a hearing at CMP’s request and,	¶11
when the parties appeared for the hearing, announced, “We’re
here on a motion for sanctions.” Smith was not present at the
hearing, and his counsel pointed out that CMP had not actually
filed a motion for order to show cause or a motion for sanctions
and in its filing was only “asking the court for advice.” Smith’s
counsel asserted that the court could not hold Smith in contempt
for failing to turn over the funds and stock certificates without
“go[ing] through a contempt process.”
Nevertheless, 	the 	court 	proceeded 	to 	hold 	Smith	¶12
in 	contempt 	(the 	Second 	Contempt 	Order) 	for 	failing 	to
return the funds to the Cow Calf Account and for signing
the 	stock 	certificates 	over 	to 	his 	wife. 	As 	sanctions, 	the
court ordered Smith to serve fourteen days of jail time and pay a
$500 fine. Smith served that time and paid the fine. He now
appeals.
ISSUES AND STANDARD OF REVIEW
Smith asserts that the district court could not hold him in	¶13
contempt for spending money out of the Cow Calf Account
because he did not receive notice that the court would be
considering 	contempt 	on 	that 	basis 	and 	did 	not 	have 	any
opportunity to defend himself against those specific accusations.
Further, he argues that the court could not hold him in contempt
for failing to return the money to the Cow Calf Account and
produce the stock certificates because there was no pending
order to show cause or motion for sanctions when the court

Cook Martin Poulson v. Smith
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made that ruling.3 Whether someone has been provided with
“timely and adequate notice and an opportunity to be heard in a
meaningful way,” in compliance with due process protections, is
a “question[] of law which we review for correctness.” In re
Cannatella, 2006 UT App 89, ¶¶ 2–3, 132 P.3d 684 (quotation
simplified).
ANALYSIS
I. First Contempt Order
First, Smith argues that he did not receive adequate notice	¶14
that he might be held in contempt for making expenditures out
of the Cow Calf Account. “To satisfy an essential requisite of
procedural due process, a hearing must be prefaced by timely
notice which adequately informs the parties of the specific issues
they must prepare to meet.” Nelson v. Jacobsen, 669 P.2d 1207,
1213 (Utah 1983) (quotation simplified); accord In re Cannatella,
2006 UT App 89, ¶ 3, 132 P.3d 684.
3. Smith also appealed the district court’s findings regarding his
ownership interest in the two promissory notes and the Cow
Calf 	Account. 	However, 	at oral 	argument 	on 	appeal, 	CMP
acknowledged that those findings were no longer of any effect in
light of our reversal of the underlying judgment in the previous
appeal involving the parties. See generally Cook Martin Poulson PC
v. 	Smith, 	2020 	UT 	App 	57, 	464 	P.3d 	541. 	In 	light 	of 	this
acknowledgment, 	we 	need 	not 	reach 	the 	merits 	of 	Smith’s
appeal of those factual findings; instead, we simply clarify that
all 	findings 	the 	district 	court 	previously 	made 	regarding
ownership 	of 	these 	assets are 	of 	no 	further 	legal 	effect. 	If
questions regarding ownership arise in further proceedings, the
court will need to take evidence and make new findings.

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The 	court’s order 	to show 	cause 	advised 	Smith 	that	¶15
he 	should 	be 	prepared 	to 	address 	his 	alleged 	failure 	to
comply 	with 	the 	First 	and 	Second 	Supplemental 	Orders
prohibiting him from disposing of property; his alleged failure
to 	comply 	with 	the 	writ 	of 	execution; 	his 	alleged 	actions
impeding 	the 	execution 	of 	the 	writ 	by 	the 	sheriff; 	and
his removing assets out of Utah that were listed in the writ.
Only 	the 	first 	allegation 	could 	possibly 	be 	construed 	as
pertaining to his spending money from the Cow Calf Account,
but we agree with Smith that nothing in the order to show
cause 	or 	the 	supporting 	motions 	adequately 	put 	him 	on
notice that his expenditure of funds from the Cow Calf Account
would be a subject of the contempt hearing. Indeed, to the
extent 	that 	those 	documents 	referenced 	specific 	conduct,
they mentioned only “removing assets . . . from the State of
Utah.” Those documents did not specifically address the Cow
Calf Account or Smith’s use of funds from it.
Nevertheless, 	CMP 	asserts 	that 	the 	more 	detailed	¶16
allegations in its motion for order to show cause should be
read 	as 	providing 	Smith 	notice 	of 	the 	specific 	actions
that allegedly violated the Second Supplemental Order. Even
accepting 	this 	argument, 	however, 	none 	of 	the 	allegations
in CMP’s motion for order to show cause would have alerted
Smith 	that 	spending 	Cow 	Calf 	Account 	funds 	was 	one 	of
the 	alleged 	violations of 	the 	court’s order. 	The 	motion 	for
order 	to 	show 	cause 	alleges 	only 	that 	Smith 	pledged 	the
livestock as security for a loan, sold cattle, and moved the
promissory notes to a safe deposit box in Idaho. It mentions
nothing about the Cow Calf Account or Smith’s expenditures
from that account.
Because 	Smith 	did 	not 	have 	adequate 	notice 	that	¶17
spending from the Cow Calf Account would be at issue in the

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contempt hearing, the court erred by entering the First Contempt
Order against him.4 We therefore reverse that order.
II. Second Contempt Order
Next, Smith argues that he did not receive adequate	¶18
notice 	that 	the 	hearing 	on 	CMP’s 	motion 	for 	a 	telephone
conference would be one in which he needed to be prepared to
defend himself against contempt allegations.
CMP maintains that the order for Smith to return the	¶19
funds to the Cow Calf Account and produce the stock certificates
was an opportunity for him to purge his contempt with respect
to the First Contempt Order. Accordingly, CMP asserts that the
court’s 	Second 	Contempt 	Order 	did 	not 	find 	additional
contempt at all but merely imposed sanctions based on the First
Contempt Order due to Smith’s failure to purge his contempt.
However, nothing in the First Contempt Order stated or	¶20
suggested that Smith would have an opportunity to purge his
contempt. Moreover, nothing in the Second Contempt Order
suggested that it was merely an implementation of a sanction in
the First Contempt Order rather than a new finding of contempt.
To the contrary, the court stated, “I find . . . Smith in contempt of
court for not complying with the . . . [First Contempt Order]
where . . . [t]he defendant was ordered to return [$26,100.45] to
the [Cow Calf Account].” Further, the court found Smith in
contempt because he “intentionally went against the November
4. The First Contempt Order also did not explicitly find that the
expenditures 	constituted 	a 	disposal 	of 	assets. 	Given 	the
legitimate 	ways 	the 	funds 	might 	have 	been 	used—e.g., 	to
maintain other assets—it was not adequate for the court to
assume that any expenditure out of the account was a violation
of the Second Supplemental Order.

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20190412-CA 	9 	2021 UT App 60
2018 order when he endorsed the stock certificates in February of
2019.” Not only did this action take place after the previous
contempt hearing, but in the First Contempt Order, the court
found that Smith was not in contempt with respect to the stock
certificates. Thus, the Second Contempt Order was clearly a new
contempt finding and not merely a determination that Smith had
not purged his previous contempt.
Because no motion was pending when the court issued	¶21
the Second Contempt Order, and the hearing at which that order
was issued was noticed only to address “Plaintiff’s Notice of
Defendant’s Non-Compliance with Court Order,” Smith did not
receive adequate notice that the court would address further
contempt allegations at the hearing.5 Accordingly, we must
reverse the district court’s Second Contempt Order as well.
CONCLUSION
Because Smith did not receive adequate notice regarding	¶22
the contempt allegations he would face at the contempt hearings,
both the First and Second Contempt Orders violated his due
process rights. Accordingly, we reverse those orders and vacate
the fine imposed by the court.6
5. We also note that there was no evidence that Smith actually
signed the stock certificates over to his wife—only that he
expressed an intent to do so. Accordingly, the court could not
hold him in contempt for disposing of the stock certificates.
6. As Smith has already served his jail time, we are unable to
undo that part of the sanction.