Siebach v. Brigham Young University

2015 UT App 253

THE UTAH COURT OF APPEALS

RALPH SIEBACH AND MURIEL SIEBACH,
Plaintiffs and Appellants,
v.
BRIGHAM YOUNG UNIVERSITY,
Defendant and Appellee.

Opinion
No. 20140317-CA
Filed October 8, 2015

Fourth District Court, Provo Department
The Honorable Fred D. Howard
The Honorable David N. Mortensen
No. 130400674

Florence M. Vincent, Spencer H. Reed, and Mark A.
Flores, Attorneys for Appellants
Robert S. Clark, Laura G. Kennedy, Nathanael D.
Paynter, and Stephen M. Craig, Attorneys
for Appellee

JUDGE JOHN A. PEARCE authored this Opinion, in which JUDGES
MICHELE M. CHRISTIANSEN and KATE A. TOOMEY concurred.

PEARCE, Judge:

¶1 Ralph and Muriel Siebach (the Siebachs) sued Brigham
Young University (BYU), seeking, among other forms of relief,
the return of charitable donations they had given to BYU. The
district court determined that the Siebachs lacked standing to
pursue their claims and dismissed their Amended Complaint
with prejudice. We affirm in part, reverse in part, and remand
for further proceedings.
Siebach v. Brigham Young University

BACKGROUND1

¶2 The Siebachs have donated hundreds of thousands of
dollars to BYU over the past several decades. The Siebachs’ son,
Dr. James L. Siebach (Son), was employed as a philosophy
professor at BYU. In 1990, Son asked BYU to establish a research
account that would be known as the Rhetorical Studies Account
(the RSA). The RSA was to be used exclusively to fund academic
research in philosophy at BYU.

¶3 BYU created the RSA and designated it as a restricted
account for ‚Research; Hiring; [and] promotion of any & all
aspects of philosophical studies.‛ The RSA was to be funded
primarily by private donations. Son was the only person
authorized to spend the RSA funds. In the following years, the
Siebachs and other donors—three corporations and at least four
individuals—contributed approximately $425,000 to the RSA
with the understanding that the money would be used to fund
Son’s research.

¶4 In April 2009, BYU began an audit of the RSA. BYU did
not inform the Siebachs or the other donors of the audit. In July
2009, BYU froze the RSA and issued an interim report
concluding that the Siebachs’ contributions to the account had
violated federal tax laws. The interim report also stated that
BYU’s audit indicated ‚a significant level of purchases made
from the RSA without adequate control or supervision.‛ The
interim report concluded that the RSA had been utilized in a

1. Because we are reviewing the grant of a motion to dismiss, we
recite the background facts as alleged in the Siebachs’ Amended
Complaint. See Brown v. Division of Water Rights of Dep’t of Nat.
Res., 2010 UT 14, ¶ 16, 228 P.3d 747 (stating that a claim will
survive a motion to dismiss for lack of standing if the claim’s
‚allegations, taken as true, together with all reasonable
inferences therefrom, satisfy the requirements of our standing
test‛).

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manner that ‚failed to comply with university policies and
procedures,‛ and directed that all future expenditures from the
RSA conform to ‚approved research areas.‛ BYU did not
provide the interim report, or communicate its results, to the
Siebachs or any other donor.

¶5 On September 9, 2009, BYU accepted an additional
$50,000 contribution from the Siebachs. Upon receipt of the
donation, BYU unfroze the RSA, deposited the Siebachs’
contribution, and then refroze the RSA. On or about September
17, 2009, BYU removed Son as the person authorized to access
the RSA. BYU did not inform the Siebachs that it had frozen the
RSA or removed Son’s authorization to access the RSA.

¶6 BYU issued its final audit report in December 2011. The
report concluded that the Siebachs had ‚a personal interest in
making donations to benefit [Son] financially, which conflicts
with their avowed charitable interest in supporting the exempt
educational purpose of [BYU].‛ The report also opined that the
Siebachs’ ‚intention was to make a gift for a private use rather
than for a public benefit,‛ that BYU ‚was being used merely as a
‘conduit’ to funnel funds to [Son] from his parents and avoid tax
liabilities,‛ and that if the Siebachs donated the funds with the
restriction that they only be used by Son, ‚it would have been
seen as an effort to use [BYU] as a conduit for a personal gift in
violation of the Internal Revenue Code and *BYU’s+ policy and
established practice.‛2 The final report acknowledged BYU’s
own negligence in failing to enforce university policies regarding
the RSA. The report also documented various inappropriate uses
of the RSA funds, including personal travel, the purchase of
approximately $81,000 in personal items, and other expenditures
that ‚were of doubtful value or no value‛ to BYU.

2. The Siebachs contend that BYU’s conclusions and its
characterization of ‚unlawful motives‛ are ‚wholly inaccurate.‛

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¶7 The Siebachs eventually became aware of the audit and
apparently made their disagreement and displeasure with the
audit’s conclusions known to BYU. BYU offered to return any
unspent funds in the RSA that could be attributed to the
Siebachs. However, the Siebachs and BYU could not agree on the
precise amount to be refunded. Eventually, BYU offered to
return approximately $114,000 to the Siebachs. The Siebachs
directed BYU to return that amount but announced that the
$114,000 was ‚less than should be transferred and that they were
not waiving any and all claims to the remaining balance BYU
promised and is obligated to transfer.‛ The Siebachs also
demanded that BYU return, with interest, the entire $50,000
donation they had made in 2009. BYU responded by
conditioning the return of money on the agreement of all donors
to the RSA and a waiver of further claims by all donors,
including the Siebachs.3 The Siebachs were unwilling or unable
to satisfy BYU’s conditions, and BYU did not refund any portion
of the unspent funds to the Siebachs.

¶8 In 2013, the Siebachs filed suit against BYU, seeking an
accounting of their donations to the RSA, a declaratory judgment
that BYU should be required to use the RSA funds in accordance
with the Siebachs’ donative intent, and the return of funds. The
Siebachs’ complaint included claims of breach of fiduciary duty,
declaratory relief, accounting, breach of contract, constructive
trust, unjust enrichment, revocation of gift, fraud in the
inducement, negligent misrepresentation, and negligent
management of the donated funds.

¶9 The district court dismissed the Siebachs’ Amended
Complaint with prejudice, concluding that they lacked standing
to assert their claims. The district court reasoned that, under the
general common-law rule, a donor who has made a completed

3. BYU also apparently raised its proposed refund amount to
approximately $124,000.

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gift to a charitable institution lacks standing to bring an action to
enforce the terms of the gift and that, in most circumstances, it is
only a state’s attorney general who has standing to bring such an
action. The district court concluded that the Utah Legislature
‚implicitly adopted the common law rule‛ when it enacted the
Uniform Prudent Management of Institutional Funds Act. The
district court further concluded that all of the Siebachs’ claims
amounted to attempts to enforce their donative intent, observing
that it ‚*could not+ comprehend a scenario where the conditions
identified by the Siebachs may not be considered terms of a
charitable gift, or where the alleged bad acts may not be viewed
as failures in complying with the terms of a gift.‛ Accordingly,
the district court dismissed the Amended Complaint for lack of
standing.

¶10 Before the district court entered a final written dismissal
order, the Siebachs filed a motion to reconsider, which BYU
opposed. The district court issued its final written order without
ruling on the motion to reconsider. The Siebachs filed a notice of
appeal. Thereafter, the district court granted the Siebachs’
motion to reconsider in part and reinstated their breach of
contract claim relating to BYU’s offer to return the unspent
portion of their RSA donations. BYU objected that the district
court lacked jurisdiction to reconsider its final order in light of
the Siebachs’ appeal. The district court agreed and voided its
order reconsidering and reinstating the Siebachs’ breach of
contract claim. The Siebachs filed another notice of appeal.

¶11 A week after the district court entered its original final
order of dismissal, the Siebachs moved to disqualify the assigned
judge, Judge Howard, arguing that the judge enjoyed personal
and professional relationships with BYU that created a conflict of
interest. The motion to disqualify alleged that BYU employed
Judge Howard’s daughter, a BYU law student, as a legal-writing
assistant. The motion also identified three BYU employees who
had ‚disclosed a close relationship‛ with Judge Howard. The
presiding judge, Judge Mortensen, reviewed the motion to
disqualify and denied it, concluding that the motion was not

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timely and that the grounds asserted did not mandate
disqualification of Judge Howard. The Siebachs then filed
another notice of appeal. Thus, the Siebachs take this appeal
from the district court’s order of dismissal, its order voiding the
reconsideration order, and Judge Mortensen’s denial of the
disqualification motion.

ISSUES AND STANDARDS OF REVIEW

¶12 The Siebachs argue that the district court erred when it
concluded that they lacked standing and dismissed their claims
with prejudice. ‚The issue of whether a party has standing is
primarily a question of law, which we review for correctness.‛
R.P. v. K.S.W., 2014 UT App 38, ¶ 4, 320 P.3d 1084. When we
evaluate standing at the motion-to-dismiss stage, we must treat
the allegations contained in the plaintiffs’ complaint as true and
draw all reasonable inferences in the plaintiffs’ favor. See Brown
v. Division of Water Rights of Dep’t of Nat. Res., 2010 UT 14, ¶¶ 14–
16, 228 P.3d 747.

¶13 The Siebachs also argue that the presiding judge erred by
denying their motion to disqualify Judge Howard. We review
the denial of a motion to disqualify a judge ‚for correctness.‛ See
In re C.C., 2013 UT 26, ¶ 12, 301 P.3d 1000; cf. Lunt v. Lance, 2008
UT App 192, ¶ 7, 186 P.3d 978 (‚Determining whether a trial
judge committed error by failing to recuse himself . . . is a
question of law, and we review such questions for correctness.‛
(omission in original) (citation and internal quotation marks
omitted)).

¶14 Finally, the Siebachs argue that the district court erred
when it concluded that it lacked jurisdiction to reconsider its
final order after they filed their notice of appeal from that order.
Whether a district court has subject matter jurisdiction is a
question of law, which we review under a correction of error
standard. Garver v. Rosenberg, 2014 UT 42, ¶ 6, 347 P.3d 380.

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ANALYSIS

I. Donor Standing to Enforce the Terms of a Charitable Gift

A. Standing Under the Common-Law Rule

¶15 The district court, applying general common-law
principles, concluded that the Siebachs lacked standing to
pursue their claims. ‚At common law, a donor who has made a
completed charitable contribution, whether as an absolute gift or
in trust, had no standing to bring an action to enforce the terms
of his or her gift or trust unless he or she had expressly reserved
the right to do so.‛ Carl J. Herzog Found., Inc. v. University of
Bridgeport, 699 A.2d 995, 997 (Conn. 1997) (footnote omitted); see
also Hardt v. Vitae Found., Inc., 302 S.W.3d 133, 137 (Mo. Ct. App.
2009); Courtenay C. & Lucy Patten Davis Found. v. Colorado State
Univ. Research Found., 2014 WY 32, ¶ 34, 320 P.3d 1115 (Wyo.
2014).

¶16 Under the general common-law rule, only the attorney
general, and not the donor, has standing to enforce the terms of a
completed charitable gift. Courtenay C. & Lucy Patten Davis
Found., 2014 WY 32, ¶ 34 (‚At common law, only the attorney
general may enforce the terms of a charitable gift.‛); see also Carl
J. Herzog Found., Inc., 699 A.2d at 997–98; Evelyn Brody, From the
Dead Hand to the Living Dead: The Conundrum of Charitable-Donor
Standing, 41 Ga. L. Rev. 1183, 1209 (2007) (‚[C]ourts have
extended the settlor’s traditional lack of standing to donors who
make restricted gifts (not in trust) to corporate charities, again
leaving enforcement to the attorney general in all but the
unusual case.‛); Mary Grace Blasko et al., Standing to Sue in the
Charitable Sector, 28 U.S.F. L. Rev. 37, 40–42 (1993) (tracing the
historical development of the common-law rule); cf. In re United
Effort Plan Trust, 2013 UT 5, ¶ 26, 296 P.3d 742 (‚Under the
common law rule, suits to enforce the terms of charitable trusts
generally may not be maintained by trust beneficiaries.‛).
Donors have traditionally been ‚prevented from enforcing their
gifts in court, because non-trustee donors retain[] no interest in

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the gift, except the sentimental one that every person who [has]
contributed to the charity would be presumed to have.‛ Hardt,
302 S.W.3d at 137 (citation and internal quotation marks
omitted).

¶17 The Siebachs do not dispute that the common law
generally precludes a donor from suing to enforce the terms of a
charitable gift.4 Instead, they argue—correctly—that no Utah
case has expressly applied the common-law rule of donor
standing. But it does not ineluctably follow that the district court
therefore erred in applying the common-law rule. Indeed, Utah
courts have consistently looked to the common law to resolve
questions of standing. See, e.g., Jones v. Barlow, 2007 UT 20,
¶¶ 15–29, 154 P.3d 808 (evaluating standing under the common-
law doctrine of ‚in loco parentis‛); Washington County Water
Conservancy Dist. v. Morgan, 2003 UT 58, ¶¶ 17–27, 82 P.3d 1125
(applying ‚the established common law test for standing‛);
Architectural Comm. of Mount Olympus Cove Subdivision No. 3 v.
Kabatznick, 949 P.2d 776, 778–79 (Utah Ct. App. 1997) (applying
the common-law doctrine of associational standing). We see no
error in the district court’s reliance on the common law to
evaluate the Siebachs’ standing to press claims relating to their
donative intent.

¶18 The Siebachs do not argue on appeal that, absent
legislation on the subject, the common law should not govern
the issue of donor standing. Nor do they articulate any reason
why Utah would be ill-served by the common-law donor-

4. At least one American jurisdiction has expanded the common-
law rule to permit donor standing in some circumstances. See
Smithers v. St. Luke’s–Roosevelt Hosp. Ctr., 723 N.Y.S.2d 426, 434–
36 (App. Div. 2001). However, the Siebachs do not argue that
Smithers altered the general common-law rule that donors to
charitable institutions lack standing to enforce their donative
intent.

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standing rule. In the absence of such argument, we cannot
conclude that the district court erred in ruling that Utah follows
the common-law rule and that, under the rule, the Siebachs lack
standing to enforce the terms of their charitable gifts to BYU. The
district court therefore did not err in dismissing the Siebachs’
claims that sought to enforce their donative intent.5

B. The Uniform Prudent Management of Institutional Funds
Act

¶19 Rather than directly attack the common-law rule, the
Siebachs focus much of their argument on the district court’s
conclusion that Utah’s Uniform Prudent Management of
Institutional Funds Act (UPMIFA) implicitly adopted the
common-law rule of donor standing. See Utah Code Ann. §§ 51-
8-101 to -604 (LexisNexis 2010 & Supp. 2014). The district court
acknowledged that UPMIFA does not expressly address donor

5. The Siebachs argue that their claims should not have been
dismissed on standing grounds without an opportunity for them
to conduct discovery. However, the district court may grant a
motion to dismiss premised on a lack of standing so long as the
court treats the allegations in the plaintiffs’ complaint as true
and draws all reasonable inferences in the plaintiffs’ favor. See
Brown v. Division of Water Rights of Dep’t of Nat. Res., 2010 UT 14,
¶¶ 14–16, 228 P.3d 747.
The Siebachs also argue that the district court erred in
dismissing their donative-intent claims with prejudice rather
than without prejudice. We agree with BYU that this issue was
not presented to the district court and was therefore not
preserved for our review. See generally 438 Main St. v. Easy Heat,
Inc., 2004 UT 72, ¶ 51, 99 P.3d 801 (‚*I+n order to preserve an
issue for appeal[,] the issue must be presented to the trial court
in such a way that the trial court has an opportunity to rule on
that issue.‛ (alterations in original) (citation and internal
quotation marks omitted)).

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standing, but the court observed that the uniform act that the
Utah Legislature used as the model for UPMIFA contains
prefatory language stating that ‚the attorney general continues
to be the protector both of the donor’s intent and of the public’s
interest in charitable funds.‛ See Uniform Prudent Mgmt. of
Institutional Funds Act prefatory note, 7A U.L.A. 9 (Supp. 2014).
The district court also referenced the Legislature’s instruction in
UPMIFA that, ‚[i]n applying and construing this uniform act,
consideration must be given to the need to promote uniformity
of the law with respect to its subject matter among states that
enact it.‛ See Utah Code Ann. § 51-8-604 (LexisNexis 2010). The
district court then noted that other states that have enacted a
version of the uniform act have ‚interpreted [the uniform act’s+
silence on the standing issue as a continuation of the common
law doctrine regarding donors’ lack of standing to enforce gift
terms.‛ See, e.g., Hardt v. Vitae Found., Inc., 302 S.W.3d 133, 138–
39 (Mo. Ct. App. 2009) (relying on the uniform act’s prefatory
language to conclude that Missouri’s version of the act did not
grant donor standing); cf. Carl J. Herzog Found., Inc. v. University
of Bridgeport, 699 A.2d 995, 1002 (Conn. 1997) (‚Nothing in our
review supports the conclusion that the legislature, in enacting
CUMIFA, implicitly intended to confer standing on donors.‛). In
light of the uniform act’s prefatory language, an absence of
legislative history indicating a contrary result, and the case law
of sister states, the district court concluded that UPMIFA
‚implicitly adopted the common law rule denying standing to
donors of completed charitable gifts.‛

¶20 The Siebachs raise several challenges to the district court’s
consideration of UPMIFA in its standing analysis. The Siebachs
argue that the district court erroneously concluded that UPMIFA
governed their claims because the donated funds were not
‚institutional funds‛ for UPMIFA purposes and were thus not
regulated by UPMIFA, see Utah Code Ann. § 51-8-102(7)(a)
(LexisNexis Supp. 2014); that the Legislature’s failure to
expressly incorporate the common-law doctrine against donor
standing into UPMIFA indicates that the Legislature ‚must not

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have intended to adopt that doctrine‛; that the district court
erroneously applied UPMIFA to donations that occurred prior to
its enactment in 2007; and that the district court’s interpretation
of UPMIFA violates the Utah Constitution’s open courts
provision by abolishing the Siebachs’ existing remedies, see Utah
Const. art. I, § 11.

¶21 The Siebachs’ UPMIFA arguments are largely misplaced
because the district court ultimately relied on the common-law
rule to determine that the Siebachs lacked standing. The district
court may have overstated the Legislature’s intent when it
concluded that UPMIFA ‚implicitly adopted the common law
rule.‛ UPMIFA is silent on the question of donor standing.
Nevertheless, UPMIFA appears to be entirely consistent with the
common law on the issue of donor standing, and the two should
be read harmoniously.

¶22 Whether UPMIFA precludes the district court’s
application of the common-law donor-standing rule presents a
question of preemption. ‚Statutes ‘may preempt the common
law either by governing an area in so pervasive a manner that it
displaces the common law’ (field preemption) ‘or by directly
conflicting with the common law’ (conflict preemption).‛ R.P. v.
K.S.W., 2014 UT App 38, ¶ 28, 320 P.3d 1084 (quoting In re Estate
of Hannifin, 2013 UT 46, ¶ 10, 311 P.3d 1016). We cannot say that
UPMIFA governs the donor–donee relationship so pervasively
that UPMIFA ‚*leaves+ no room for the [common law] to
supplement it,‛ id. (second alteration in original) (citation and
internal quotation marks omitted), and there is certainly no
direct conflict between UPMIFA’s silence and the common-law
donor-standing rule. Indeed, UPMIFA’s silence appears to have
been designed to accommodate the common-law rule. As the
district court noted, the prefatory note to the uniform act
suggests that ‚the attorney general continues to be the protector
both of the donor’s intent and of the public’s interest in
charitable funds.‛ Uniform Prudent Mgmt. of Institutional
Funds Act prefatory note, 7A U.L.A. 9 (Supp. 2014); cf. Hardt, 302
S.W.3d at 138–39 (relying on the uniform act’s prefatory

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language to conclude that Missouri’s version of the act did not
grant donor standing). To the extent the Siebachs argue that the
Legislature preempted and rejected the common-law rule when
it enacted UPMIFA, we disagree and conclude that UPMIFA did
not preempt the common-law donor-standing rule. Cf. Gottling v.
P.R. Inc., 2002 UT 95, ¶ 29, 61 P.3d 989 (Durham, C.J., dissenting)
(‚The legislature is presumed to know the common law which
existed before the enactment of a statute, and absent an
indication that the legislature intends a statute to supplant
common law, the courts should not give it that effect.‛ (citation
and internal quotation marks omitted)).

¶23 Our conclusion that the common-law donor-standing rule
precludes the Siebachs’ donative-intent claims disposes of the
Siebachs’ other arguments that the district court misapplied
UPMIFA to dismiss their claims. Because the common law, and
not UPMIFA, governs the Siebachs’ standing, it is irrelevant
whether the donated funds were ‚institutional funds‛ under
UPMIFA. And the common-law rule applies to all of the
Siebachs’ donations, whether or not those donations predated
UPMIFA’s enactment in 2007.

¶24 The Siebachs also argue that the district court’s dismissal
of their donative-intent claims violates the Utah Constitution’s
open courts provision, which states,

All courts shall be open, and every person, for an
injury done to him in his person, property, or
reputation, shall have remedy by due course of
law, which shall be administered without denial or
unnecessary delay; and no person shall be barred
from prosecuting or defending before any tribunal
in this state, by himself or counsel any civil cause
to which he is a party.

Utah Const. art. I, § 11. The Utah Supreme Court has interpreted
the open courts provision to generally prohibit the abrogation of
an existing cause of action. See Scott v. Utah County, 2015 UT 64,

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¶ 52. However, the common-law donor-standing rule has been
applied almost universally to prohibit the kinds of donative-
intent claims the Siebachs seek to prosecute. See Iris J. Goodwin,
Donor Standing to Enforce Charitable Gifts: Civil Society vs. Donor
Empowerment, 58 Vand. L. Rev. 1093, 1145 (2005) (‚To return to
the particulars of the current law with respect to donor standing,
nearly all the modern American authorities—decisions, model
acts, statutes, and commentaries—deny a donor standing to
enforce a restricted gift to public charity absent express retention
of a reversion in the donative instrument.‛). In light of the
widespread acceptance of the common-law rule, the Siebachs
have not demonstrated that the district court’s dismissal of their
donative-intent claims for lack of standing implicated Utah’s
open courts provision by abrogating an existing cause of action.

C. Special-Interest Standing

¶25 The Siebachs claim the district court erred by rejecting
their argument that they qualified for an exception to the
common-law donor-standing rule because they possessed a
‚special interest‛ in enforcing their donative intent. Specifically,
the Siebachs argue that they have special-interest standing to
pursue their donative-intent claims because BYU’s offer to
return the unspent portion of the donations gave the Siebachs
‚some pecuniary interest‛ in the funds. See Warren v. Board of
Regents of Univ. Sys. of Ga., 544 S.E.2d 190, 192–93 (Ga. Ct. App.
2001) (providing that a suit may be maintained by a ‚person
who has a special interest in the enforcement of the charitable
trust‛).

¶26 The test to determine whether an interest is ‚special
enough to confer standing is whether the person is entitled to
receive a benefit under the [gift or] trust that is not merely the
benefit to which members of the public in general are entitled.‛
State ex rel. Nixon v. Hutcherson, 96 S.W.3d 81, 84 (Mo. 2003)
(citation and internal quotation marks omitted); see also Warren,
544 S.E.2d at 192–93; Mary Grace Blasko et al., Standing to Sue in
the Charitable Sector, 28 U.S.F. L. Rev. 37, 61 (1993) (identifying

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five ‚elements‛ from cases ‚across state jurisdictions‛ that
‚influence a court’s willingness to allow a private party to sue
for the enforcement of charitable obligations‛). As with the
donor-standing rule itself, there is no Utah case expressly
adopting the special-interest exception.6 We will assume without
deciding that, in Utah, a charitable donor who can establish an
individualized pecuniary interest in donated funds has special-
interest standing to enforce that pecuniary interest.

¶27 The Siebachs have not, however, alleged that they
retained a pecuniary interest in the donated funds after the gifts
were completed, such as by retaining an express reversionary
interest in the funds, see Goodwin, Donor Standing to Enforce
Charitable Gifts, 58 Vand. L. Rev. at 1145, or by receiving a benefit
from the donation separate from the public at large, see State ex
rel. Nixon, 96 S.W.3d at 84. Rather, the Siebachs claim they
qualify for the special-interest exception because after a dispute
over the use and management of the funds arose, BYU offered to
return the unspent portion.

¶28 BYU’s alleged promises to return unspent funds may or
may not be enforceable in their own right. See infra ¶¶ 38–41. But
allegations of post-gift promises do not alter the conclusion that
the Siebachs relinquished all pecuniary interest in the donated
funds at the time they completed their gifts. We are not

6. In the related context of beneficiary standing to enforce the
terms of a charitable trust, the Utah Supreme Court has
recognized that some courts have created a ‚narrow exception‛
to the donor-standing rule, allowing suits by beneficiaries
‚deemed to have a ‘special interest’ in the administration of a
charitable trust.‛ In re United Effort Plan Trust, 2013 UT 5, ¶ 27,
296 P.3d 742 (citation omitted). However, the supreme court
noted that it has ‚not yet recognized this ‘special interest’
exception‛ and that ‚the contours of the exception are ill-
defined.‛ Id.

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persuaded by the Siebachs’ attempt to bootstrap BYU’s alleged
post-gift promises to return unspent funds into special-interest
standing to enforce their original donative intent.7

D. Traditional Standing

¶29 The Siebachs argue that even if Utah recognizes the
common-law donor-standing rule, not all of their claims are
barred by that rule. This argument appears to implicitly concede
that some, if not most, of the Siebachs’ claims seek to enforce
their ‚donative intent.‛ However, the Siebachs argue that their
fraud and negligent misrepresentation claims, as well as one of
their breach of contract claims,8 are ‚independent from the
donative intent claims and should not have been dismissed.‛

1. Fraud and Negligent Misrepresentation

¶30 The Siebachs claim that BYU induced their donations
with false or misleading statements about how the funds would
be used and managed. See generally Crookston v. Fire Ins. Exch.,
817 P.2d 789, 800 (Utah 1991) (reciting the elements of fraud);
Atkinson v. IHC Hosps., Inc., 798 P.2d 733, 737 (Utah 1990)
(discussing negligent misrepresentation claims). The Siebachs
emphasize that their fraud and negligent misrepresentation
claims differ from their donative-intent claims because they are

7. As discussed below, this does not mean that the donor-
standing rule prevents the Siebachs from bringing an action
based upon a separate post-donation contract, should they be
able to plead such a claim.

8. The Amended Complaint asserts two separate breach of
contract claims, one based on an alleged contract formed at the
time of the Siebachs’ gifts and one arising from BYU’s later
promise to return unspent funds. The first breach of contract
claim seeks to enforce the Siebachs’ donative intent and is
therefore barred by the common-law donor-standing rule.

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based on BYU’s communications to the Siebachs to induce their
donations rather than on the Siebachs’ communications to BYU
limiting the use of the gifts. Nevertheless, the district court
concluded that the fraud and misrepresentation claims were
barred by the donor-standing rule because BYU’s alleged ‚bad
acts‛ could be viewed only as ‚failures in complying with the
terms of a gift.‛

¶31 The Siebachs argue that the common-law donor-standing
doctrine ‚has not been applied to prevent donors from suing
charitable organizations for fraud‛ and assert that ‚*t+here is no
question that a donor may sue when a gift is induced by fraud.‛
As authority for these propositions, the Siebachs cite to cases
from Utah and other jurisdictions. See Lynch v. MacDonald, 367
P.2d 464, 470 (Utah 1962); Patterson v. Leonard, 200 So. 759, 761
(Ala. 1941); In re Estate of Saathoff, 295 N.W.2d 290, 295 (Neb.
1980); Camp St. Mary’s Ass’n of W. Ohio Conf. of the United
Methodist Church, Inc. v. Otterbein Homes, 889 N.E.2d 1066, 1076–
79 (Ohio Ct. App. 2008); Kjensbek v. Charity Bd. of Lutheran Bhd.,
267 P. 521, 522 (Or. 1928).

¶32 The cases the Siebachs cite do not directly address the
common-law donor-standing doctrine, much less hold that fraud
and misrepresentation claims are categorically exempt from that
doctrine.9 Nevertheless, these cases support the proposition that
courts around the country have recognized the standing of
donors to allege the fraudulent or negligent inducement of their
donations. See also Maffei v. Roman Catholic Archbishop of Bos., 867
N.E.2d 300, 311 (Mass. 2007) (stating, with regard to donors’
negligent misrepresentation claim, that ‚it is clear that the
plaintiffs have alleged individual stakes in this dispute that

9. The district court did not cite—nor has BYU provided—any
authority stating that the common-law donor-standing rule
applies to inducement-based claims like fraud or negligent
misrepresentation.

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Siebach v. Brigham Young University

make them, and not the Attorney General, the parties to bring
suit‛); Schmidt v. Catholic Diocese of Biloxi, 18 So. 3d 814, 831–32
(Miss. 2009) (allowing fraud claim by donors who alleged
intentional misrepresentations in soliciting contributions for the
rebuilding of a church).

¶33 The Utah Legislature has also treated the inducement of
charitable donations differently from a charity’s obligation to
manage donated funds in compliance with a donor’s expressed
intentions. UPMIFA governs a charitable institution’s post-
donation management of funds. See Utah Code Ann. §§ 51-8-101
to -604 (LexisNexis 2010 & Supp. 2014). However, the Charitable
Solicitations Act addresses the solicitation of funds by charitable
institutions. See id. §§ 13-22-1 to -23 (2013 & Supp. 2014).

¶34 The Charitable Solicitations Act is aimed at preventing
charitable fraud and prohibits the ‚making of any untrue
statement of material fact‛ in connection with a charitable
solicitation. See id. § 13-22-13(3) (2013); see also American Target
Advert., Inc. v. Giani, 199 F.3d 1241, 1247 (10th Cir. 2000) (‚The
*Charitable Solicitations+ Act’s general declarations and specific
prohibitions clearly target fraud.‛). The Charitable Solicitations
Act allows for the prosecution of charity fraud actions by the
state of Utah, but also states—in the section of the Act making a
violation a misdemeanor—that ‚*n+othing in this section
precludes any person damaged as a result of a charitable
solicitation from maintaining a civil action for damages or
injunctive relief.‛ Utah Code Ann. § 13-22-4(2) (LexisNexis 2013).
Thus, the Charitable Solicitations Act anticipates donors
personally seeking damages when their donations are procured
by fraud.

¶35 We conclude that claims alleging the improper inducement
of a charitable donation are distinguishable from claims seeking
to enforce donative intent and that improper-inducement claims
do not fall within the common-law donor-standing rule. The
common-law rule is based on the precept that a donor
relinquishes his or her personal interest in an unrestricted

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charitable gift once the gift is complete, and thereafter it becomes
the duty of the attorney general to vindicate the public interest in
ensuring that charitable organizations use donated funds
appropriately. See Carl J. Herzog Found., Inc. v. University of
Bridgeport, 699 A.2d 995, 997–98 (Conn. 1997). But, when a donor
alleges that fraud or negligent misrepresentation induced a
charitable gift, it cannot be said that the donor freely
relinquished his or her property to the charity such that only a
general public interest in the matter remains. In this case, the
Siebachs’ Amended Complaint alleges that their donations to the
RSA were induced by fraud or negligent misrepresentation.
Those claims fall outside the reach of the common-law donor-
standing rule, and the district court erred by dismissing them.

¶36 BYU urges us to affirm the district court’s dismissal on
the alternate ground that the Siebachs have failed to adequately
plead their fraud and misrepresentation claims. See Bailey v.
Bayles, 2002 UT 58, ¶ 10, 52 P.3d 1158 (‚*A+n appellate court may
affirm the judgment appealed from if it is sustainable on any
legal ground or theory apparent on the record . . . .‛ (citation and
internal quotation marks omitted)). Although we possess the
ability to affirm on any legal ground or theory apparent on the
record, we also possess the discretion to conclude that the
district court should be afforded the opportunity to rule on the
arguments in the first instance. See Bailey, 2002 UT 58, ¶ 10. In
this matter, we conclude that on the record before us, the district
court is better positioned to initially consider BYU’s arguments
concerning alleged deficiencies in the Siebachs’ Amended
Complaint, as well as any argument the Siebachs might advance
that they should be allowed to remedy any such deficiencies.

¶37 We therefore decline BYU’s invitation to affirm on
alternate grounds. We reverse the district court’s dismissal of the
Siebachs’ fraud and misrepresentation claims and remand for
further proceedings.

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2. BYU’s Alleged Promises to Return Unspent Funds

¶38 The Siebachs also argue that the district court erred by
concluding that the common-law donor-standing rule deprived
them of standing to pursue the breach of contract claim that was
based on BYU’s alleged post-gift promises to return the unspent
portion of their donations. We agree.

¶39 The Siebachs allege that BYU breached an agreement to
return the unspent RSA funds that were attributable to their
donations. The Siebachs support this claim with allegations that
they requested that BYU return funds to them and that BYU, on
multiple occasions, offered to return a portion of the Siebachs’
donations. To the extent that these various offers and requests
created an enforceable agreement, that agreement did not
involve donative intent. Rather, it would represent the
settlement of an existing dispute between the parties. 10
Settlement agreements are enforceable contracts. See McKelvey v.
Hamilton, 2009 UT App 126, ¶ 28, 211 P.3d 390 (‚The basic rules
of contract formation are used to determine whether two parties
have entered into an enforceable settlement agreement.‛). The
Siebachs have standing to enforce such a contract even if they
lack standing to enforce their donative intent. Much like our
holding that the Siebachs may not rely on BYU’s alleged post-
gift promises to obtain special-interest standing to enforce their
original donative intent, the district court erred by relying on the
nature of the parties’ original dispute to deny standing to
enforce an alleged agreement to settle that dispute.

¶40 Again, BYU urges us to uphold the dismissal of the
breach of contract claim on an independent ground. See Bailey,
2002 UT 58, ¶ 10. BYU argues that the Amended Complaint does
not adequately plead the existence of a contract and therefore,
the breach of contract claim must fail. The Amended Complaint

10. We express no opinion on whether the Amended Complaint
actually alleges the existence of an enforceable contract.

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Siebach v. Brigham Young University

may or may not adequately state a claim for breach of contract
based on an alleged settlement agreement. But, as with the
Siebachs’ fraud and misrepresentation claims, the district court
should evaluate this argument in the first instance. We therefore
reverse the district court’s dismissal of the Siebachs’ breach of
contract claim relating to BYU’s post-gift promises to return
unspent funds.

¶41 We conclude that the Siebachs lack standing to pursue
claims aimed at enforcing their donative intent. This includes
their causes of action for accounting, declaratory relief, breach of
fiduciary duty, breach of contract arising from the terms of their
gifts, revocation of gift, constructive trust, unjust enrichment,
and negligent management of the donated funds. Each of these
claims seeks to enforce the donative intent underlying the
Siebachs’ gifts and can be prosecuted only by the attorney
general. However, the Siebachs do have standing to pursue their
fraud and negligent misrepresentation claims, because those
claims allege improper inducement of the gifts rather than BYU’s
failure to use the gifts in accordance with the Siebachs’ intent.
Similarly, the common-law donor-standing rule does not
prevent the Siebachs from pressing a claim that BYU allegedly
promised to return their unspent donations, because that claim
seeks to enforce a separate post-gift promise rather than the
terms of the gifts.

II. Denial of the Siebachs’ Motion to Recuse

¶42 The Siebachs next argue that Presiding Judge Mortensen
erred when he denied their motion to disqualify Judge Howard.
The Siebachs sought Judge Howard’s disqualification because
BYU employed his daughter and because three BYU employees
‚disclosed a close relationship‛ with Judge Howard. Judge
Mortensen denied the motion as untimely and also because it
failed to set forth sufficient grounds for disqualification.

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¶43 We affirm Judge Mortensen’s ruling based on his
conclusion that the Siebachs’ motion was untimely.11 The Utah
Rules of Civil Procedure required the Siebachs to file their
disqualification motion no later than twenty days after ‚the date
on which [they] learn[ed] or with the exercise of reasonable
diligence should have learned of the grounds upon which the
motion is based.‛ Utah R. Civ. P. 63(b)(1)(B)(iii) (2013).12 The
Siebachs asserted that their counsel learned of the factual basis
for their disqualification motion on March 29, 2014. Judge
Mortensen ruled that the Siebachs therefore should have filed
their motion by April 18 and that the Siebachs’ April 21 motion
was untimely. Judge Mortensen also ruled that ‚the majority of
the information asserted in the affidavit in support of the motion
to disqualify could have been learned long before March 29, 2014
through the exercise of reasonable diligence.‛

¶44 The Siebachs do not challenge those factual findings.
Instead, they argue that the twenty-day filing period should
have run from the date that their counsel verified the information
about Judge Howard rather than the date upon which they
learned that information. The Siebachs argue that this result
necessarily flows from rule 11 of the Utah Rules of Civil
Procedure, which provides that every court filing certifies the
filer’s ‚knowledge, information, and belief, formed after an inquiry
reasonable under the circumstances,‛ that the filing has evidentiary
support. See Utah R. Civ. P. 11(b) (emphasis added). The

11. Because we affirm on the basis of untimeliness, we do not
address the substance of the arguments the motion raised and
express no opinion on the merits of those arguments.
12. Rule 63 was amended effective May 1, 2014, to provide for a
twenty-one-day filing period. See Utah R. Civ. P. 63(b)(1)(B)
& amendment notes (2015). The Siebachs did not argue below,
nor do they argue on appeal, that the district court should have
applied the amended rule in evaluating the timeliness of their
disqualification motion.

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Siebach v. Brigham Young University

Siebachs assert that their attorneys verified the information
about Judge Howard on April 1, rendering their April 21 filing
timely if the twenty days began to run on the date of verification.

¶45 We see no support for the Siebachs’ argument in rule 63’s
language. Rule 63’s clock begins to tick on the date that a party
learns or should have learned of the grounds for disqualification,
not on the date a party’s counsel verifies that counsel has, or is
likely to have, evidentiary support for the allegations and factual
contentions in the motion. Accordingly, reading rules 11 and 63
together, counsel should complete a reasonable inquiry into the
grounds for disqualification within the time that rule 63
contemplates. Reading the rules as the Siebachs urge would
undercut the policy behind the timely resolution of
disqualification motions by allowing counsel a potentially
unlimited time period to investigate before triggering rule 63’s
deadline.13

¶46 In addition, Judge Mortensen ruled that the Siebachs
could have discovered the information about Judge Howard
‚long before March 29‛ if they had exercised ‚reasonable
diligence.‛ This constitutes a separate and independent ground
for Judge Mortensen’s ruling. See Utah R. Civ. P. 63(b)(1)(B)(iii)
(calculating the time period for filing a disqualification motion
from the date that a basis for the motion was discovered or
should have been discovered ‚with the exercise of reasonable
diligence‛). The Siebachs do not challenge this aspect of Judge
Mortensen’s order.

13. The Siebachs do not argue that the twenty-day deadline
provided their counsel with insufficient time to investigate the
grounds underlying the disqualification motion. In this case, the
Siebachs acknowledge that their attorneys took only three days
to verify the information about Judge Howard, leaving them
over two weeks to prepare and file a timely disqualification
motion.

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Siebach v. Brigham Young University

¶47 Rule 63 expressly allows a reviewing judge to ‚deny a
motion not filed in a timely manner.‛ Id. R. 63(b)(3)(C). The
Siebachs have not established that Judge Mortensen erred in
concluding that their motion to disqualify was untimely, and we
affirm the denial of their motion on that basis.

III. The Siebachs’ Motion to Reconsider

¶48 Finally, the Siebachs argue that the district court erred
when it concluded that it lacked jurisdiction to reconsider its
dismissal order once the Siebachs had filed their notice of
appeal. See Garver v. Rosenberg, 2014 UT 42, ¶ 10, 347 P.3d 380
(‚Once a notice of appeal is filed, jurisdiction transfers from the
district court to the appellate court for most matters in the
case.‛). We need not decide this question because it is moot. The
relief the district court extended and then retracted on the
Siebachs’ motion for reconsideration is included in the relief we
grant the Siebachs on appeal—the reinstatement of their breach
of contract claim based upon BYU’s alleged promises to return
the Siebachs’ unspent donations. Thus, the Siebachs have
already obtained the relief that we could grant if we were to
agree with their jurisdictional argument, and we decline to
address that now-mooted issue. See State v. Black, 2015 UT 54,
¶ 10 (‚An issue becomes moot if during the pendency of the
appeal circumstances change so that the controversy is
eliminated, thereby rendering the relief requested impossible or
of no legal effect.‛ (citation and internal quotation marks
omitted)).

CONCLUSION

¶49 We conclude that the common-law donor-standing rule
precludes the Siebachs from asserting causes of action seeking to
enforce their donative intent, and we agree with the district
court that most of the Siebachs’ claims are barred for that reason.
We reject the Siebachs’ arguments that they have standing under
the ‚special interest‛ exception to the common-law donor-

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standing rule. However, the Siebachs’ fraud and negligent
misrepresentation claims do not seek to enforce their donative
intent and thus fall outside the common-law rule. Similarly, the
Siebachs’ breach of contract claim arising from BYU’s alleged
promises to return unspent funds does not seek to enforce the
Siebachs’ donative intent. We reverse the district court’s
dismissal of those three claims and remand for further
proceedings. We do not reach the Siebachs’ argument
concerning their motion to reconsider, because our remand of
the ruling dismissing the breach of contract claim moots that
portion of the appeal. In all other respects, including Judge
Mortensen’s denial of the Siebachs’ motion to disqualify Judge
Howard, we affirm the district court.

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