Fleming v. Dullanty

2025 UT App 128

THE UTAH COURT OF APPEALS

GEORGE FLEMING,
Appellant and Cross-appellee,
v.
JIM DULLANTY,
Appellee and Cross-appellant.

Opinion
No. 20230800-CA
Filed August 21, 2025

Third District Court, Silver Summit Department
The Honorable Kent R. Holmberg
The Honorable Richard E. Mrazik
No. 170500334

Troy L. Booher and Beth E. Kennedy,
Attorneys for Appellant and Cross-appellee
John J. Nielsen and John Morris,
Attorneys for Appellee and Cross-appellant

JUDGE GREGORY K. ORME authored this Opinion, in which
JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN M. HARRIS
concurred.

ORME, Judge:

¶1 Highly dissatisfied with the renovation of his two
condominium units, for which his homeowners association was
responsible, George Fleming sued the association’s president, Jim
Dullanty, in Dullanty’s personal capacity. The procedural history
of this lawsuit is rather lengthy and complicated. The suit was
ultimately resolved when the district court granted summary
judgment in Dullanty’s favor, resulting in dismissal of Fleming’s
second amended complaint, which had raised a claim for gross
negligence. The court later awarded Dullanty attorney fees
Fleming v. Dullanty

incurred in securing dismissal of Fleming’s original complaint
and first amended complaint—which the court determined raised
claims for breach of fiduciary duty and not gross negligence—but
the court declined to award Dullanty attorney fees related to
securing summary judgment on the second amended complaint.

¶2 On appeal, Fleming challenges the court’s grant of
summary judgment and its award of attorney fees to Dullanty.
Dullanty cross-appeals, arguing he is also entitled to an award of
attorney fees related to litigation of the second amended
complaint. Because the court’s attorney fees award was based
solely on a misinterpretation of an order entered by a prior judge
in this case, we reverse the award of attorney fees in Dullanty’s
favor. We otherwise affirm the district court’s rulings.

BACKGROUND 1

¶3 Fleming has an ownership interest in two condominium
units at the Grand Summit Hotel (the Hotel), located in Park City,
Utah. The units are governed by the Hotel’s homeowners
association (the HOA). The HOA’s executive board (the Board)
consists of seven volunteer members: five are elected by the
owners and two are appointed by the Hotel. During all times
relevant to this case, Dullanty served as the president of the
Board. As such, he was responsible for “implementing the
decisions of the [Board] and, in that capacity,” he was required to
“direct, supervise, coordinate, and have general control over the
affairs of the [HOA] and the [Board].”

1. “In reviewing a district court’s grant of summary judgment, we
view the facts and all reasonable inferences drawn therefrom in
the light most favorable to the nonmoving party and recite the
facts accordingly.” Ockey v. Club Jam, 2014 UT App 126, ¶ 2 n.2,
328 P.3d 880 (quotation simplified).

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¶4 Fleming’s “ownership” of his two condominium units
differs from the common understanding of the term. Under the
Hotel’s business model, each unit is divided into four
quarter-shares, each of which confers “the exclusive right of
possession of the [unit] during a Use Period.” Fleming owns all
four available quarter-shares for each of his two units. In addition
to the four available quarter-shares, there is also a “Service
Period” for each unit, during which time the HOA may perform
its maintenance duties. Importantly, the HOA has “the right to
modify, alter, remove or improve portions of the [units],
including without limitation any equipment, fixtures and
appurtenances, when in the . . . Board’s judgment it is necessary
or desirable to do so.”

¶5 In 2016, the HOA began an extensive renovation of the
Hotel. A three-member renovation committee was created to
oversee the project. Dullanty, who was the only member of the
Board to serve on this committee, appointed himself as its head.
In that capacity, Dullanty recommended to the Board that the
HOA engage a New Jersey-based company as general contractor
(General Contractor) to complete the renovation project. The
Board unanimously voted to hire General Contractor.

¶6 The contract between the HOA and General Contractor
required General Contractor to abide by governing Utah statutes,
codes, ordinances, rules, and regulations. But General Contractor
was not licensed in Utah, 2 had never previously completed a
construction project in Utah, and had never completed a project
of this magnitude in the Mountain West region. General
Contractor did not obtain a Utah license until six months into the
project. General Contractor hired subcontractors who were also
unlicensed and inexperienced. And the initial project manager

2. There is evidence in the record suggesting that General
Contractor had at one point been licensed in Utah but that the
license had lapsed.

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Dullanty eventually hired months after the project had already
begun had no experience with construction projects.

¶7 The renovation project did not go smoothly. General
Contractor was cited for being unlicensed, for hiring unlicensed
workers, and for not having a building permit. Additionally, the
Summit County Building Department and local fire department
found numerous code violations. Many owners, including
Fleming, complained about the quality of General Contractor’s
work. Two members of the Board resigned during the course of
the project, citing Dullanty’s conduct and issues with the
renovation as the reason for their resignations.

¶8 Fleming was highly dissatisfied with the work done on his
two units. Among other things, he complained that the plumbing
had been improperly installed and was partially clogged with
grout; that there were missing blackout shades; that some outlets
did not work; that the wooden doors had been incorrectly cut and
some were damaged; that a refrigerator door was damaged and
the appliances generally were of lower quality than what was
paid for; that the paint job was of poor quality throughout the
units; that there were stains on the carpet and tile; and that the
jacuzzi in one of his units had been removed.

¶9 In 2017, Fleming, who is an attorney licensed in Texas and
Washington D.C., sued Dullanty in his personal capacity. In the
original complaint, Fleming brought two causes of action. First,
he alleged that Dullanty had violated, among other statutes, the
Utah Revised Nonprofit Corporation Act (the RNCA) for not
providing all the documents Fleming requested related to the
renovation project. Second, he alleged a cause of action titled
“Willful Misconduct and Gross Negligence.” For this claim, he
asserted that Dullanty, as president of the Board, “owes a
fiduciary duty to unit owners of the [HOA] to act in their best
interests”; that “[i]n this capacity, Dullanty must act reasonably
for the benefit of unit owners”; and that his failure to do so

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constituted “willful misconduct and gross negligence under the
law.”

¶10 The first cause of action was soon dismissed, following
which Fleming filed his first amended complaint raising only a
claim for “Willful Misconduct and/or Gross Negligence.” The
complaint reiterated that Dullanty, as president of the Board,
“owes a fiduciary duty to unit owners . . . to act in their best
interests” and that “[i]n this capacity, Dullanty must act
reasonably for the benefit of unit owners.” Fleming asserted that
the following actions, among others, amounted to willful
misconduct or gross negligence: hiring General Contractor, which
was unlicensed in Utah; allowing General Contractor to begin
work on the project without a valid Utah license or building
permit; permitting General Contractor to continue working after
“repeated and known violations of Utah law”; and purchasing
low-quality furnishings.

¶11 Dullanty moved to dismiss the first amended complaint,
arguing, in relevant part, that Fleming lacked standing to bring an
action against him. Dullanty asserted that Fleming’s “claim
against [him] in his capacity as President of the Board is in reality
an action for breach of fiduciary duty,” which must be brought
derivatively and not in a direct action by an individual unless the
individual can show that he was injured in a manner distinct from
any injury suffered by the corporation (in this case, the HOA)
more generally. 3 The district court agreed, holding that it was

3. A derivative action is one that “seek[s] to enforce any right
which belongs to the corporation.” Aurora Credit Services, Inc. v.
Liberty West Dev., Inc., 970 P.2d 1273, 1280 (Utah 1998) (quotation
simplified). “Actions alleging mismanagement, breach of
fiduciary duties, and appropriation or waste of corporate
opportunities and assets generally belong to the corporation,” and
“even though wrongdoing or fraud of corporate officers may
(continued…)

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undisputed that Fleming’s “sole cause of action is based on
allegations of tort liability” and thus, “to articulate a claim,
[Fleming] must identify a duty running from [Dullanty] to
[Fleming] that has been breached.” But, the court found, the only
duty the first amended complaint identified was “a fiduciary duty
that flows from” Dullanty, in his capacity as president of the
Board, to the HOA’s members. The court accordingly concluded
that Fleming’s claim against Dullanty was “in reality an action for
breach of [Dullanty’s] fiduciary duty to [the HOA], regardless of
how it is labeled in the First Amended Complaint.” And because
Fleming had failed to allege “any injury or harm distinct from all
other [HOA] members,” the court dismissed the first amended
complaint for lack of standing.

¶12 Following the dismissal, Dullanty filed his first motion for
attorney fees, arguing, in relevant part, that he was entitled to an
award as the prevailing party on Fleming’s breach of fiduciary
duty claim. Fleming then filed a motion to reconsider, contending
that the first amended complaint did not raise a claim for breach
of fiduciary duty. He asserted that the complaint instead raised
only a claim for willful misconduct or gross negligence, and that
“merely noting the existence of” Dullanty’s fiduciary duty to the
HOA’s members “does not assert a breach of fiduciary [duty]
claim.”

¶13 The district court agreed with Fleming. In a memorandum
decision dated January 3, 2019 (the January 2019 order), the court
stated that although the first amended complaint “refers to
[Dullanty] owing a fiduciary duty,” the court was “no longer

indirectly injure shareholders, shareholders generally cannot sue
directly for those injuries.” Id. (quotation simplified). But an
individual shareholder may bring a direct action against
corporate officers “if the injury is one to the plaintiff . . .
individually, and not to the corporation.” Id. (quotation
simplified).

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convinced that [Fleming’s] claim should be cast as a breach of
fiduciary duty claim” because the court could “envision situations
where a board member could face personal liability” under a
willful misconduct or gross negligence claim so long as the
plaintiff could allege “breach of a duty separate and apart from a
fiduciary duty.” Thus, the court concluded that “in construing
[Fleming’s] pleadings liberally, it appears that [his] consistent
intent has been to advance a cause of action for willful misconduct
and gross negligence, resulting in individual damages.” The court
reiterated that the first amended complaint alleged “only a breach
of fiduciary duty” but that the motion to reconsider “alludes to
various other duties that [Dullanty] allegedly breached.”
Accordingly, “[i]n the interest of justice,” the court granted
Fleming leave to amend his complaint once more “to allege each
element of gross negligence/willful misconduct, including
identifying a duty or duties owed by [Dullanty] which have
allegedly been breached and which can be brought in [Fleming’s]
individual capacity as opposed to derivatively.” As for Dullanty’s
requested attorney fees, the court ruled that the motion was
“mooted by the Court’s rulings herein.”

¶14 Fleming subsequently filed a second amended complaint
that made no mention of a fiduciary duty but alleged that
Dullanty’s actions constituted gross negligence or willful
misconduct. He asserted three bases for this cause of action. First,
he asserted a statutory basis (the statutory claim) under Utah
Code section 16-6a-822(6), which provides,

A director or officer is not liable to the nonprofit
corporation, its members, or any conservator or
receiver, or any assignee or successor-in-interest of
the nonprofit corporation or member, for any action
taken, or any failure to take any action, as an officer
or director, as the case may be, unless:

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(a) the director or officer has breached or failed to
perform the duties of the office as set forth in this
section; and

(b) the breach or failure to perform constitutes:

(i) willful misconduct; or

...

(iii) gross negligence.

Utah Code Ann. § 16-6a-822(6) (LexisNexis 2022). 4 Second,
Fleming asserted a contractual claim (the breach of contract claim)
under the HOA’s governing declaration, which exempts members
of the Board from liability for performance of their duties “except
for the Board Members’ own willful misconduct or gross
negligence.” Third, he asserted a common law basis for the claim
(the common law claim).

¶15 Dullanty filed another motion to dismiss, arguing that
Fleming could not sue “directly for the damage to his unit[s],”
because Dullanty “does not owe a duty to” Fleming. The court
granted the motion in part. The court’s order, which was prepared
by Dullanty’s counsel and approved as to form by Fleming,
characterized the second amended complaint as bringing a
statutory claim for violating section 16-6a-822(6), a breach of
contract claim for violating the HOA’s governing declaration, and
a common law claim for breach of fiduciary duty. The court
dismissed the statutory claim on the ground that it was a
derivative claim, and Fleming had not alleged individualized

4. Because the applicable provisions of the Utah Code in effect at
the relevant time do not differ from those currently in effect in any
way material to this appeal, we cite the current version of the code
for convenience.

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Fleming v. Dullanty

harm. The court also dismissed the common law claim on the
ground that “there is no common law tort action for the types of
fiduciary duty violations or other violations of duty claimed by”
Fleming. But the court did not dismiss the breach of contract
claim. 5

¶16 Dullanty later filed a motion for summary judgment on the
remaining breach of contract claim, which the court granted,
leading to the court’s dismissal of the second amended complaint
with prejudice. That summary judgment order, which was
prepared by Dullanty’s counsel and approved as to form by
Fleming, also stated that one of the claims Fleming brought in the
second amended complaint was for breach of fiduciary duty.

¶17 Fleming subsequently filed a motion to reconsider both the
dismissal of the statutory claim and the later grant of summary
judgment on the breach of contract claim. Regarding the dismissal
of the statutory claim, Fleming asserted that the damage he
identified “is unique to his units and independent from the
separate, additional harm that Mr. Dullanty caused the HOA as a
whole and the distinct, individualized harms he caused various
other owners.” Fleming pointed to the “lengthy list of individual
harm he suffered” contained in the second amended complaint,
such as “missing blackout shades, damaged refrigerator door,
glue spilled on carpeting and tiles, doors unable to shut, paint
spatter on tiles, improperly installed piping, non-working outlets,
and the removal of his Jacuzzi.”

¶18 The district court was persuaded that the second amended
complaint gave “fair notice that [Fleming] alleges that he incurred
individualized harm,” and it accordingly reversed the dismissal

5. Following the court’s partial grant of the motion to dismiss, this
case was reassigned from Judge Kent R. Holmberg to Judge
Richard E. Mrazik, who entered all subsequent rulings in this
case.

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of the statutory claim. But the court did not reverse its grant of
summary judgment on the breach of contract claim. Thus, after
this ruling, Fleming’s “sole remaining claim” was the statutory
claim that Dullanty “violated Utah Code [section] 16-6a-822 by
purportedly breaching a duty set forth therein.”

¶19 Dullanty then filed a second motion for summary
judgment, arguing that there was insufficient evidence that he
had engaged in willful misconduct or gross negligence as
required by section 16-6a-822. His nearly 200-page memorandum
contained 441 statements of fact and had over 2,200 pages of
exhibits attached to it. To name but a few, Dullanty provided
evidence that the renovation committee interviewed two other
general contractors before deciding on General Contractor; that
General Contractor was contractually obligated to fix any code
violations and failure to do so would result in the HOA collecting
a $6 million bond; that owners could submit “punch lists” to
notify General Contractor of issues with their units so that they
could be fixed; that once the Board discovered that General
Contractor was unlicensed and had not obtained the necessary
permits for the renovation project, it gave General Contractor a
deadline by which to obtain the license and permits before
resuming work and that General Contractor complied with these
requirements; and that the Board chose not to terminate General
Contractor because it “appear[ed] to be making a substantial
effort to rectify the mistakes (management and quality)” it had
made and it had hired a new project manager and two
superintendents.

¶20 In opposing the motion, Fleming proffered the deposition
testimony from one of the two board members who had resigned
during the renovation project (Board Member) and an affidavit
from an expert (Expert) who owned a construction company with
significant experience in large construction jobs and who had
previously worked in the Utah Department of Professional
Licensing.

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Fleming v. Dullanty

¶21 Board Member, who in his professional capacity “oversaw
the financial aspects of a number of hotel remodels,” testified that
Dullanty “pretty much call[ed] the shots” on the remodel project.
He also stated that Dullanty made several grossly negligent
decisions that can be divided into three general categories. First,
Board Member testified that Dullanty was grossly negligent in his
hiring decisions. He hired General Contractor, which was not
licensed in Utah and did not apply for a Utah license or a building
permit until six months after the project had already begun.
Dullanty also later hired an unqualified project manager whose
prior experience included working at the front desk of a hotel and
some design work. Second, even after problems arose and after
General Contractor received several citations for code violations,
Dullanty did not exercise the HOA’s contractual right to
terminate General Contractor. Third, Dullanty did not disclose
important information to the Board and minimized problems that
would have otherwise caused the Board to block his decision to
hire General Contractor and which resulted in “exorbitant” costs.

¶22 Expert submitted an affidavit in which, based on his
“background, experience and expertise,” he concluded that
Dullanty “was grossly negligent in the manner in which he
conducted himself” during the renovation project. Specifically,
Expert opined that Dullanty was grossly negligent for “not
properly evaluat[ing]” General Contractor prior to hiring it to
complete the project. Expert stated that even a cursory search
would have revealed that General Contractor was based out of
New Jersey and was not licensed in Utah. Expert further opined
that the negligent hiring of General Contractor resulted in
(1) General Contractor’s unfamiliarity with “Utah’s licensure
requirements and the Summit County Building Inspector’s
building requirements,” (2) the need to transport workers from
New Jersey to Utah and to house them, and (3) “difficulty
accessing skilled local labor for this job.” Expert also concluded
that Dullanty was grossly negligent for not exercising the

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Fleming v. Dullanty

contractual right to terminate General Contractor after Dullanty
became aware that General Contractor was not licensed in Utah
and after seeing “the substandard work that was being
performed.”

¶23 The district court granted summary judgment in
Dullanty’s favor and dismissed the second amended complaint
with prejudice. The court ruled that although Fleming had raised
a genuine issue of material fact regarding whether Dullanty
“breached or failed to perform the duties of his office under
[section] 16-6a-822 of the Utah Code,” that was “not enough”
because Fleming had not “also put competent evidence in the
record raising a genuine issue of material fact as to whether” the
breach or failure to perform those duties “constituted willful
misconduct . . . or gross negligence.” The court stated that while
Board Member made “general statements regarding a lack of
information shared with the board,” Dullanty “being in charge,”
and Dullanty’s “lack of due diligence or . . . failure to perform
certain duties,” “those general statements” were insufficient to
create a genuine issue of material fact “when faced with the
undisputed facts contained in” Dullanty’s lengthy summary
judgment motion. And Board Member’s “more specific
statements” about Dullanty’s actions were “not material facts
because they are not relevant to the damages claimed by Mr.
Fleming in this case.” As for Expert’s affidavit, although the court
acknowledged that his expert opinion raised issues of material
fact regarding whether Dullanty breached his duties under
section 16-6a-822, the court held that the affidavit was “not
relevant to whether those breaches constituted gross negligence”
because that determination “is not the proper subject of expert
testimony.”

¶24 Following this dismissal of the second amended complaint,
Dullanty filed another motion seeking attorney fees, arguing that
he was entitled to attorney fees as the prevailing party on
Fleming’s breach of fiduciary duty claim, under Utah’s bad faith

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Fleming v. Dullanty

statute, and under the RNCA. In opposing the motion, Fleming
argued, among other things, that he never raised a fiduciary duty
claim in any of his complaints.

¶25 The district court partially granted Dullanty’s motion for
attorney fees. Specifically, the court ruled that Dullanty was
entitled to attorney fees as the prevailing party on the breach of
fiduciary duty claim raised in the original complaint and in the
first amended complaint (collectively, the earlier complaints). In
so ruling, the court acknowledged that two of its prior orders
erroneously stated that the second amended complaint raised a
common-law claim for breach of fiduciary duty. Nevertheless, the
court concluded that Fleming “explicitly pled a claim for breach
of fiduciary duty” in the earlier complaints. The court (Judge
Mrazik) stated that the court (Judge Holmberg) had previously
“recognized this fact” in the January 2019 order when granting
Fleming leave to amend his complaint for a second time, quoting
as part of its oral ruling the order’s statement that the first
amended complaint alleged “only a breach of fiduciary duty.”
And because the fiduciary duty claim had been successfully
dismissed, the court ruled that Dullanty was entitled to an award
of attorney fees and costs totaling $248,669.75.

¶26 But the court denied Dullanty’s request for attorney fees
incurred after the filing of the second amended complaint,
concluding that this complaint did not raise a breach of fiduciary
duty claim and that attorney fees were not otherwise warranted
under either the bad faith statute or the RNCA. Specifically,
regarding the bad faith statute, the court held that the second
amended complaint was neither meritless nor brought in bad
faith. And as for the RNCA, the court held that the second
amended complaint did not raise a derivative action because it
raised “a claim for individual damages peculiar to [Fleming] and
suffered by him uniquely.”

¶27 Fleming appeals, and Dullanty cross-appeals.

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ISSUES AND STANDARDS OF REVIEW

¶28 Fleming raises two main issues on appeal. We first address
his argument that the district court erred in granting summary
judgment in Dullanty’s favor on the statutory claim for gross
negligence. “Appellate courts review a district court’s legal
conclusions and ultimate grant or denial of summary judgment
for correctness, viewing the facts and all reasonable inferences
drawn therefrom in the light most favorable to the nonmoving
party.” Penunuri v. Sundance Partners, Ltd., 2017 UT 54, ¶ 14, 423
P.3d 1150 (quotation simplified).

¶29 Fleming also challenges the district court’s award of
attorney fees, arguing that the court misconstrued the earlier
complaints as raising a claim for breach of fiduciary duty. The
parties agree that this presents a question of law reviewed for
correctness. 6

¶30 Relatedly, on cross-appeal, Dullanty raises two challenges
to the district court’s denial of his request for attorney fees
incurred after the filing of the second amended complaint. First,
he argues that the court erred in determining that he was not
entitled to attorney fees under the bad faith statute. “We review a
trial court’s grant [or denial] of attorney fees under the bad faith
statute as a mixed question of law and fact.” Kelly v. Timber Lakes
Prop. Owners Ass’n, 2022 UT App 23, ¶ 24, 507 P.3d 357 (quotation
simplified). Attorney fees are warranted under the bad faith
statute when a party can show that “an action or defense is both
(1) without merit, and (2) not brought or asserted in good faith.”
Id. (quotation simplified). “The ‘without merit’ determination is a

6. Fleming also argues that only plaintiffs—and not defendants—
are entitled to recover attorney fees in breach of fiduciary duty
actions. Because we reverse the attorney fees award based on the
merits of his first argument regarding those fees, we do not
address his second argument.

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question of law, and therefore we review it for correctness.” Id.
(quotation simplified). “A finding of bad faith is a question of fact
and is reviewed by this court under the clearly erroneous
standard,” and we typically afford “a substantial measure of
discretion” to the trial court’s determination. Id. (quotation
simplified).

¶31 Dullanty also argues that the district court erred in
concluding that he was not entitled to attorney fees under the
RNCA on the flawed rationale that the second amended
complaint did not raise a derivative action. Generally, “whether
attorney fees are recoverable in an action is a question of law,
which we review for correctness.” Thorp v. Charlwood, 2021 UT
App 118, ¶ 17, 501 P.3d 1166 (quotation simplified), cert. denied,
509 P.3d 198 (Utah 2022).

ANALYSIS

I. Summary Judgment

¶32 “Gross negligence is the failure to observe even slight care;
it is carelessness or recklessness to a degree that shows utter
indifference to the consequences that may result.” Penunuri v.
Sundance Partners, Ltd., 2017 UT 54, ¶ 35, 423 P.3d 1150 (quotation
simplified). It “differs from ordinary negligence only in degree,
and not in kind. In other words, a grossly negligent act is still a
negligent act.” Cunningham v. Weber County, 2022 UT 8, ¶ 31, 506
P.3d 575 (quotation simplified).

¶33 A moving party is entitled to summary judgment if the
“party shows that there is no genuine dispute as to any material
fact and the moving party is entitled to judgment as a matter of
law.” Utah R. Civ. P. 56(a). Where plaintiffs bear the burden of
production at trial, defendants are entitled to summary judgment
upon a showing “that the plaintiff has no legally sufficient

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evidentiary basis” for their claims. Salo v. Tyler, 2018 UT 7,
¶¶ 30-31, 417 P.3d 581. And although questions regarding breach
of a duty are ordinarily factual matters reserved for the factfinder,
see Estate of Schofield v. Starbucks Corp., 2025 UT App 29, ¶ 14, 566
P.3d 777, “even questions of fact may be decided as a matter of
law at the summary judgment stage,” so long as the evidence “is
so one-sided that a reasonable factfinder could reach but one
conclusion,” Hall v. Springville City, 2025 UT App 115, ¶ 44
(quotation simplified). Accordingly, when a gross negligence
claim is at issue on summary judgment, “[t]he question for the
district court is whether reasonable minds could not differ as to
whether the defendant was grossly negligent under the
circumstances. If they could not differ, then summary judgment
is appropriate[.]” Penunuri, 2017 UT 54, ¶ 34. Thus, for a gross
negligence claim to survive summary judgment on the breach of
duty element of the claim, 7 a plaintiff “must show more than a
breach of the standard of care.” Id. ¶ 38. Rather, “the plaintiff must
point to evidence that the defendant’s conduct exposed the
plaintiff to a significantly elevated level of risk.” Id.

¶34 In granting summary judgment, the district court ruled
that although Fleming had raised a genuine issue of material fact
regarding whether Dullanty had “breached or failed to perform
the duties of his office under” Utah Code section 16-6a-822(6)(a),
Fleming had not “also put competent evidence in the record
raising a genuine issue of material fact as to whether” the breach
or failure to perform those duties constituted gross negligence, as
required by section 16-6a-822(6)(b). The court stated that evidence

7. The elements of a negligence claim are “(1) a duty of reasonable
care owed by the defendant to plaintiff; (2) a breach of that duty;
(3) the causation, both actually and proximately, of injury; and
(4) the suffering of damages by the plaintiff.” Gables at Sterling
Village Homeowners Ass’n v. Castlewood-Sterling Village I, LLC, 2018
UT 04, ¶ 55, 417 P.3d 95 (quotation simplified).

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of Dullanty’s lack of due diligence, his failure to perform certain
duties, and his failure to disclose certain information to the Board
was insufficient to create a genuine issue of material fact
regarding gross negligence “when faced with the undisputed
facts contained in” Dullanty’s lengthy summary judgment
motion. 8

¶35 Fleming contends that his evidence was sufficient to
preclude summary judgment on the gross negligence claim.
Specifically, he points to the evidence he provided of facts that he
asserts amount to gross negligence:

• Dullanty’s failure to properly evaluate General Contractor
prior to hiring it, including not realizing it was not licensed
to work in Utah and had never previously performed a job
in Utah;

• Dullanty’s failure to consider the logistical difficulties and
costs associated with transporting and lodging out-of-state
workers in Utah;

• Dullanty’s failure to consider in-state general contractors
prior to making his hiring decision;

8. The court also discounted Board Member’s “more specific
statements” about some of Dullanty’s other actions, concluding
they were “not material facts because they are not relevant to the
damages claimed by Mr. Fleming in this case.” And the court did
not consider Expert’s conclusions that Dullanty was grossly
negligent, because the determination of whether a breach
constituted gross negligence “is not the proper subject of expert
testimony.” Fleming has not meaningfully challenged either of
these conclusions on appeal.

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• Dullanty’s decision to hire “an unqualified project
manager”;

• Dullanty’s decision not to terminate General Contractor’s
contract with the HOA after “dozens, if not hundreds,” of
owners brought problems related to the renovation project
to his attention and after having learned that General
Contractor had violated Utah law, had received numerous
citations for code violations, and had failed building
inspections; and

• Dullanty working unilaterally and hiding information
from the Board, including spending large sums of money
that inflated the cost of the renovation project without
Board approval.

¶36 Fleming contends that the court erred in ruling that
although the evidence supporting these facts was sufficient to
show a genuine issue of material fact as to whether Dullanty acted
with ordinary negligence, it was nonetheless insufficient to show
that his actions constituted gross negligence. Fleming asserts that
“[t]he line between breaching his duties and gross negligence
could not be properly drawn on summary judgment.” This is
incorrect. As explained above, to withstand summary judgment
on a gross negligence claim, the evidence “must show more than
a breach of the standard of care.” Penunuri, 2017 UT 54, ¶ 38. Thus,
the court did not err when it concluded, based on its
determination that Fleming had shown a possible breach of duty
that did not rise to the level of gross negligence, that summary
judgment was appropriate.

¶37 As for the court’s reference to “undisputed facts” in
Dullanty’s summary judgment motion, Fleming first notes that
the court did not specifically identify any undisputed facts. But in
any event, he asserts that “they showed, at most, that Dullanty
did some things that were not grossly negligent” but “[n]one of

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them prove that he was not grossly negligent.” But “gross
negligence is the failure to observe even slight care,” showing
“utter indifference to the consequences that may result.” Id. ¶ 35
(emphasis added; quotation otherwise simplified). Here, certain
undisputed facts regarding Dullanty’s exercise of care while
overseeing the renovation project both in his capacity as a
member of the renovation committee and as the president of the
Board preclude a determination of gross negligence. For example,
Dullanty provided evidence that the Board chose not to terminate
General Contractor because it had made “a substantial effort to
rectify the mistakes (management and quality)” and it had hired
a new project manager and two superintendents going forward.
Dullanty also provided evidence that the renovation committee
interviewed two other general contractors prior to hiring General
Contractor; that as soon as General Contractor’s lack of a Utah
license and lack of permitting came to the Board’s attention, the
Board required General Contractor to speedily rectify those
deficiencies; that a $6 million bond ensured that General
Contractor would fix any code violations; and that unit owners
could submit “punch lists” of issues with their units so that
General Contractor could remedy them.

¶38 In light of this undisputed evidence, “reasonable minds
could not differ” that, given the circumstances, Dullanty
observed, at the very least, “slight care” while overseeing the
renovation project. 9 Id. ¶¶ 34–35 (quotation simplified). The court

9. Fleming also contends that Dullanty’s evidence contradicted his
evidence, thereby precluding summary judgment. But Dullanty’s
evidence recounted above does not contradict Fleming’s
evidence, rather it fills in the gaps and provides additional
context.

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therefore did not err in granting summary judgment on the gross
negligence claim raised in the second amended complaint. 10

II. Partial Grant of Motion for Attorney Fees

¶39 Neither party is satisfied with the district court’s partial
grant of Dullanty’s request for attorney fees. Fleming challenges
the court’s award of attorney fees Dullanty incurred in securing
dismissal of the earlier complaints. Conversely, on cross-appeal,
Dullanty challenges the denial of his request for additional
attorney fees incurred in obtaining summary judgment and
dismissal of the second amended complaint. We address each
challenge in turn.

A. Grant of Attorney Fees Related to the Earlier Complaints

¶40 Utah follows the American rule, which generally precludes
a prevailing party’s recovery of attorney fees in the absence of
statutory or contractual authorization for such an award. Gregory
& Swapp, PLLC v. Kranendonk, 2018 UT 36, ¶ 47, 424 P.3d 897. But
a “breach of a fiduciary obligation is a well-established exception

10. Although Fleming’s argument is largely focused on gross
negligence, he also, at least nominally, challenges the grant of
summary judgment on the willful misconduct portion of his
claim. “Willful misconduct goes beyond gross negligence in that
a defendant must be aware that his conduct will probably result
in injury.” Atkin Wright & Miles v. Mountain States Tel. & Tel. Co.,
709 P.2d 330, 335 (Utah 1985). It “incorporates the elements of
knowledge of the dangerous condition and of the fact that serious
injury is a probable result, and inaction in the face of such
knowledge.” Rawcliffe v. Anciaux, 2017 UT 72, ¶ 23, 416 P.3d 362
(quotation simplified). Because we affirm the grant of summary
judgment on the gross negligence claim, it follows that summary
judgment on the willful misconduct claim was also proper.

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to the American rule.” 11 Id. (quotation simplified). See USA Power,
LLC v. PacifiCorp, 2016 UT 20, ¶¶ 93, 95 n.142, 372 P.3d 629;
Campbell v. State Farm Mutual Auto. Ins. Co., 2001 UT 89, ¶ 122, 65
P.3d 1134, rev’d on other grounds, 538 U.S. 408 (2003). This
exception was the basis for the district court’s award of attorney
fees Dullanty incurred in securing dismissal of the earlier
complaints.

¶41 Fleming contends that the court erred in concluding that
the earlier complaints each “included a claim for breach of
fiduciary duty,” thereby allowing for an award of attorney fees.
He asserts that this conclusion is unsupported either by the
language of the earlier complaints or by the court’s prior rulings.
We agree on the latter point and accordingly reverse the attorney
fees award.

¶42 After the case was reassigned from Judge Holmberg to
Judge Mrazik, see supra note 5, and after dismissal of the second
amended complaint, the district court awarded Dullanty attorney
fees incurred up until the date of the January 2019 order. The court
stated that it was only after that date that “the nature of Mr.
Fleming’s claims changed.” Specifically, the court’s written order

11. In Gregory & Swapp, PLLC v. Kranendonk, 2018 UT 36, 424 P.3d
897, the appellants argued that the fiduciary duty exception to the
American rule was intended to apply only in “particularly
egregious” cases rather than in all breach of fiduciary duty cases.
Id. ¶ 48 (quotation simplified). Although our Supreme Court
acknowledged that this was “an important question,” it did not
reach the merits of the issue because the appellee had failed to
establish that a breach of fiduciary duty had occurred in the first
place. Id. Fleming does not raise a similar argument in this case,
focusing his efforts instead on assailing the district court’s
characterization of the earlier complaints as having pleaded
breach of fiduciary duty claims.

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stated that as “recognized” in the January 2019 order, the earlier
complaints “explicitly pled a claim for breach of fiduciary duty”
and that it was only in the second amended complaint that
Fleming properly pleaded a gross negligence/willful misconduct
claim. But the court’s reliance on the January 2019 order, which
was the sole basis for its decision, is misplaced.

¶43 Judge Holmberg entered the January 2019 order in
response to Fleming’s first motion to reconsider. The court had
previously dismissed the first amended complaint on the ground
that Fleming’s “sole cause of action [was] based on allegations of
tort liability” and the only duty the complaint identified was “a
fiduciary duty.” Based on this, the court had concluded that, “in
reality,” the first amended complaint raised “an action for breach
of [Dullanty’s] fiduciary duty to [the HOA], regardless of how it
is labeled in the First Amended Complaint.” And because the
complaint did not allege “any injury or harm distinct from all
other [HOA] members,” the court dismissed the first amended
complaint for lack of standing. In his subsequent motion to
reconsider, Fleming asserted that the first amended complaint did
not, in fact, raise a claim for breach of fiduciary duty but instead
raised a claim for gross negligence or willful misconduct. He
further argued that “merely noting the existence of” Dullanty’s
fiduciary duty to the HOA’s members “does not assert a breach
of fiduciary [duty] claim.” The court found this argument
persuasive, resulting in its entry of the January 2019 order
vacating the dismissal of the first amended complaint and
granting leave to amend.

¶44 The January 2019 order stated that although the first
amended complaint “refer[red]” to Dullanty “owing a fiduciary
duty,” the court was “no longer convinced that [Fleming’s] claim
should be cast as a breach of fiduciary duty claim.” The order
noted that Fleming “has continuously maintained that he is
bringing a gross negligence and/or willful misconduct claim,” and
the order indicated that “in carefully analyzing” the HOA’s

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governing declaration, “the Court can envision situations where
a board member could face personal liability for such a claim.”
The order also noted that Dullanty had “acknowledged as much”
in his memorandum. Accordingly, the order stated that “in
construing [Fleming’s] pleadings liberally, it appears that [his]
consistent intent has been to advance a cause of action for willful
misconduct and gross negligence, resulting in individual
damages.” Nevertheless, the order stated that Fleming “would
still be required to allege each element of gross negligence/willful
misconduct, including the existence and breach of a duty separate
and apart from a fiduciary duty.” The order next stated that the
first amended complaint alleged “only breach of fiduciary duty.”
But because the motion to reconsider “allude[d] to various other
duties that [Dullanty] allegedly breached,” “in the interest of
justice,” Fleming was granted leave to amend the complaint “to
allege each element of gross negligence/willful misconduct,
including identifying a duty or duties owed by [Dullanty] which
have allegedly been breached and which can be brought in his
individual capacity as opposed to derivatively.”

¶45 Later, in granting the attorney fees award, the court (Judge
Mrazik) based its conclusion that Fleming pleaded a claim for
breach of fiduciary duty in the earlier complaints on the single
sentence in the January 2019 order that the first amended
complaint alleged “only breach of fiduciary duty.” As part of its
oral ruling at the hearing on attorney fees, the court quoted this
language and shortly thereafter stated that “[t]he fact remains, as
recognized by Judge Holmberg in January of 2019, that Mr.
Fleming had alleged in both” of the earlier complaints “a claim for
breach of fiduciary duty.” But the court’s reliance on that single
sentence was misplaced.

¶46 Contrary to the district court’s later characterization, the
January 2019 order reversed the prior dismissal of the first
amended complaint because the court was “no longer convinced
that [Fleming’s] claim should be cast as a breach of fiduciary duty

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claim.” The court had been persuaded that Fleming’s “consistent
intent has been to advance a cause of action for willful misconduct
and gross negligence, resulting in individual damages.” Although
the court later stated that the first amended complaint alleged
“only breach of fiduciary duty,” which at first glance appears to
contradict the court’s aforementioned conclusions, this apparent
contradiction is readily resolved when the statement is viewed as
part of the court’s discussion of the breach-of-duty element of a
gross negligence claim. There, the court was indicating that this
particular element was lacking as the only breach of duty
mentioned in the first amended complaint was that of fiduciary
duty. But because the motion to reconsider “allude[d] to various
other duties that [Dullanty] allegedly breached,” the court (Judge
Holmberg) vacated its prior dismissal of the first amended
complaint and granted leave for Fleming to allege those other
duties under the gross negligence theory. This interpretation is
further supported by the fact that the statement that the first
amended complaint alleged “only breach of fiduciary duty” did
not specify that the complaint alleged a “claim” for breach of
fiduciary duty—merely that it alleged a “duty.”

¶47 The January 2019 order thus clearly held that the earlier
complaints raised a claim for gross negligence or willful
misconduct, albeit with some deficiencies—not that they
“explicitly pled a claim for breach of fiduciary duty,” as the court
(Judge Mrazik) later stated. The court’s attorney fees award was
therefore based on an erroneous interpretation of the January 2019
order. To be sure, “while a case remains pending before the
district court prior to any appeal,” the court is “free to reconsider”
an earlier decision, even one entered by a prior judge, either “sua
sponte or at the suggestion of one of the parties.” McLaughlin v.
Schenk, 2013 UT 20, ¶ 22, 299 P.3d 1139 (quotation simplified).
Indeed, the district court took this course of action more than once
in this case. But that is not what happened in this instance. Rather

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than reconsidering the January 2019 order, the court based its
decision on a misinterpretation of the order.

¶48 Accordingly, we reverse the attorney fees award in
Dullanty’s favor. 12

B. Denial of Attorney Fees Related to the Second Amended
Complaint

¶49 On cross-appeal, Dullanty raises two challenges to the
district court’s denial of his request for attorney fees related to the
second amended complaint. First, he argues that the court erred
in ruling that he was not entitled to attorney fees under the bad
faith statute. Second, he contends that the court also erred in
ruling that he was not entitled to attorney fees under the RNCA.
We affirm on both fronts.

1. The Bad Faith Statute

¶50 Utah Code section 78B-5-825(1), which is more commonly
referred to as “the bad faith statute,” directs that a district court
“shall award reasonable attorney fees to a prevailing party” in a
civil action “if the court determines that the action or defense to

12. Dullanty seeks an award of attorney fees incurred on appeal.
He bases his request on two grounds: (1) as the prevailing party
who was also awarded attorney fees below, see Fadel v. Deseret
First Credit Union, 2017 UT App 165, ¶ 38, 405 P.3d 807
(“Generally, when a party who received attorney fees below
prevails on appeal, the party is also entitled to fees reasonably
incurred on appeal.”) (quotation simplified), cert. denied, 409 P.3d
1047 (Utah 2017), and (2) for having to defend against a frivolous
appeal under rule 33 of the Utah Rules of Appellate Procedure.
Because Fleming prevailed on this issue, resulting in reversal of
the district court’s attorney fees award, neither ground is availing,
and Dullanty’s request is denied.

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the action was without merit and not brought or asserted in good
faith.” Notably, the bad faith statute “is narrowly drawn and not
meant to be applied to all prevailing parties in all civil suits.” In re
Discipline of Sonnenreich, 2004 UT 3, ¶ 46, 86 P.3d 712 (quotation
simplified). To that end, a prevailing party is entitled to attorney
fees under the statute only if the district court determines both
“that the losing party’s claim was (1) without merit, and (2) not
brought or asserted in good faith.” Rocky Ford Irrigation Co. v.
Kents Lake Reservoir Co., 2020 UT 47, ¶ 76, 469 P.3d 1003 (quotation
simplified).

¶51 The first element requires more than a mere
“determination that a party lost on the merits.” McFarland v.
McFarland, 2024 UT App 31, ¶ 33, 547 P.3d 204. Rather, a claim “is
without merit if it is frivolous, is of little weight or importance
having no basis in law or fact, or clearly lacks a legal basis for
recovery.” Kelly v. Timber Lakes Prop. Owners Ass’n, 2022 UT App
23, ¶ 65, 507 P.3d 357 (quotation simplified). The second element
“turns on a factual determination of a party’s subjective intent.”
Id. (quotation simplified). That is, “a party acts in bad faith when
he brings [a claim] and either (1) lacks an honest belief in the
propriety of the activities in question, (2) intends to take
unconscionable advantage of others, or (3) intends to or has
knowledge of the fact that his actions will hinder, delay, or
defraud others.” Id. (quotation simplified). Both the “without
merit and bad faith” determinations “must be made
independently from one another,” and “the presence of one
element does not necessarily imply the presence of the other.”
McFarland, 2024 UT App 31, ¶ 34 (quotation simplified).

¶52 Dullanty has not carried his burden of persuasion on the
“in bad faith” element because he has neither directly engaged
with the district court’s reasoning nor marshaled the evidence in
support of the court’s findings. “Appellants carry the burden to
persuade a reviewing court through reasoned, supported
argument that the district court committed harmful, reversible

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error—a burden that necessarily requires the appellant to address
the reasoning and basis of the district court’s ruling and to explain
why that court got it wrong.” Big Game Forever v. Peterson, 2024
UT App 78, ¶ 19, 551 P.3d 411 (quotation simplified). See Utah R.
App. P. 24(a)(8). An appellant who fails to “meaningfully engage
with the district court’s reasoning falls short of demonstrating any
error on the part of the district court.” Big Game Forever, 2024 UT
App 78, ¶ 19 (quotation simplified). Moreover, “a party
challenging a district court’s factual findings on appeal bears a
heavy burden of persuasion in demonstrating that the court’s
findings are clearly erroneous,” and that party “will almost
certainly fail to carry its burden of persuasion on appeal if it fails
to marshal the evidence sufficient to overcome the healthy dose
of deference owed to factual findings.” In re Estate of Wright, 2024
UT App 146, ¶ 28, 559 P.3d 966 (quotation simplified).

¶53 Here, Dullanty does not engage with the district court’s
reasoning in finding that Fleming did not bring the second
amended complaint in bad faith. Rather, his argument that the
court’s determination was clearly erroneous is entirely focused on
listing evidence in support of his position that “[g]iven the fervor
with which Fleming pursued his claims, and his obvious disdain
for the Board—and Dullanty in particular—holding them
‘responsible’ for remodel missteps . . . , the real motive becomes
clear: to punish and harass Dullanty.” He additionally asserts that
the court’s bad faith finding is entitled to “little or no deference”
because the “court merely recited the standard and did not
discuss particular evidence.” We disagree with this
characterization of the court’s decision.

¶54 In finding that the second amended complaint did not
allege a gross negligence claim in bad faith, the court stated that
it was “not persuaded that Mr. Fleming either lacked an honest
belief in the propriety of the activities in question, intended to take
unconscionable advantage of Mr. Dullanty or the [Board], or
intended to, or had knowledge of the fact that his actions would

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hinder, delay, or defraud others.” The court further found that the
parties held differing views of the evidence presented in this case.
That is, while Dullanty viewed “the substantial production that
he made as irrefutable evidence that he was acting reasonably,”
Fleming “look[ed] at the same evidence and focuse[d] on different
items and different pieces of sworn testimony and [came] to a
different conclusion.” And while the gross negligence claim was
ultimately unable to withstand summary judgment, the court
found that Dullanty had not “made a persuasive or sufficient
showing that” the gross negligence claim “was not brought or
asserted in good faith.” The court’s analysis thus went beyond
merely citing the standard. Rather, the court supported its finding
that Fleming did not act in bad faith with subsidiary findings—
none of which Dullanty has challenged on appeal.

¶55 Additionally, apart from noting Fleming’s denial of acting
in bad faith, Dullanty has not carried his burden to marshal the
evidence in support of the court’s bad faith finding or its
subsidiary findings. Instead, Dullanty attempts to shift the
marshaling burden onto the district court, citing Rocky Ford
Irrigation Co. v. Kents Lake Reservoir Co., 2020 UT 47, 469 P.3d 1003,
in support of his contention that the court’s decision is entitled to
“little or no deference” because it did not “discuss particular
evidence.” But in Rocky Ford, our Supreme Court reversed an
attorney fees award under the bad faith statute on the ground that
the district court’s bad faith determination was unsupported by
sufficiently detailed findings, see id. ¶¶ 79–81—not that the
findings were clearly erroneous, which is the focus of our review
in this case. The Court explained that although detailed findings
“are not always strictly required,” “a lack of detail in a lower
court’s findings will make it more difficult for [appellate courts]
to afford deference” because a lack of detailed findings makes it
difficult “to understand the discretion that was exercised by the
court below.” Id. ¶ 80. Despite Dullanty’s assertion to the
contrary, Rocky Ford does not require district courts to cite

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evidence in support of their findings. And Dullanty has not
challenged the adequacy of the court’s bad-faith findings.

¶56 For these reasons, Dullanty has not carried his burden of
persuasion on his challenge to the denial of his request for
attorney fees under the bad faith statute.

2. The RNCA

¶57 Utah Code section 16-6a-612(5)(b) provides that “[o]n
termination of a derivative proceeding the court may order . . . the
plaintiff to pay a defendant’s reasonable expenses, including
attorney fees, incurred in defending the proceeding, if it finds that
the proceeding was commenced or maintained: (i) without
reasonable cause; or (ii) for an improper purpose.” In denying
Dullanty’s request for attorney fees brought under this provision,
the district court held that the second amended complaint did not
raise a derivative action because it raised “a claim for individual
damages peculiar to [Fleming] and suffered by him uniquely.” See
supra note 3.

¶58 Although Dullanty challenges the court’s conclusion that
Fleming did not bring a derivative action, we need not reach the
merits of this argument because Dullanty has not satisfied the
second requirement under the statute: that the action was brought
“without reasonable cause” or “for an improper purpose.”
Dullanty argues that this element is satisfied “[f]or the same
reasons that Fleming’s claim was without merit and in bad faith.”
This argument therefore rises and falls with his argument on the
bad faith statute. And because that argument proved unavailing,
so necessarily does this argument.

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CONCLUSION

¶59 As concerns the second amended complaint, the district
court did not err in granting summary judgment on the gross
negligence claim, nor did it err in denying Dullanty’s request for
attorney fees based on the bad faith statute or the RNCA. We
therefore affirm those decisions. But because the court’s attorney
fees award related to the earlier complaints was based on a
misreading of the January 2019 order, we reverse that award.

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