tag:blogger.com,1999:blog-91251860536956427072024-03-13T19:08:49.983-07:00Utah Real Estate LawStephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-9125186053695642707.post-36486920601729096782016-05-16T12:55:00.000-07:002016-05-16T12:55:26.610-07:00Does my neighbor's fence change our properties' boundaries?<div class="separator" style="clear: both; text-align: center;">
<a href="https://3.bp.blogspot.com/-gN4xTx_xfG8/VzoiNQi-IcI/AAAAAAAABP8/QF28hwVZXaw1Au7Gcj0nGVxWSfFs-CRdACLcB/s1600/fence-1164565.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="214" src="https://3.bp.blogspot.com/-gN4xTx_xfG8/VzoiNQi-IcI/AAAAAAAABP8/QF28hwVZXaw1Au7Gcj0nGVxWSfFs-CRdACLcB/s320/fence-1164565.jpg" width="320" /></a></div>
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<span class="apple-converted-space"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Generally, a
property’s boundaries will be accurately set forth on a plat map and described
in the deed by which a person acquires his ownership interest in the property.
However, from time to time, an unusual circumstance, such as a faulty survey, a
typographical error in a legal description, or a trespassing fence, will cause
a dispute between neighbors about the precise location of a boundary. There are
three boundary dispute doctrines recognized by Utah courts that can change a
boundary from its original location without the formal purchase of land or
adverse possession: boundary by acquiescence, boundary by estoppel, and
boundary by agreement. </span></span></div>
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<span class="apple-converted-space"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Boundary by estoppel and boundary by agreement will be discussed in subsequent blog posts.<o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Boundary by Acquiescence Generally<o:p></o:p></span></b></span></div>
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<span class="apple-converted-space"><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"> </span></span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">“The elements of<span class="apple-converted-space"> </span><span class="cosearchterm">boundary</span><span class="apple-converted-space"> </span>by<span class="apple-converted-space"> </span><span class="cosearchterm">acquiescence</span><span class="apple-converted-space"> </span>are (i) occupation up to a visible
line marked by monuments, fences, or buildings, (ii) mutual<span class="apple-converted-space"> </span><span class="cosearchterm">acquiescence</span><span class="apple-converted-space"> </span>in the line as a<span class="apple-converted-space"> </span><span class="cosearchterm">boundary</span>, (iii) for a long
period of time, (iv) by adjoining landowners.”<span class="apple-converted-space"> </span><em>Jacobs v. Hafen,</em><span class="apple-converted-space"> </span>917 P.2d 1078, 1080 (Utah 1996). In essence, a boundary by acquiescence prevents
an accepted boundary from being disputed after that boundary had been
recognized for many years. The
requirements for a boundary by acquiescence are not in place to help a person steal
part of a neighbor’s property. Rather,
boundary by acquiescence is recognized by Utah courts to allow a person to
trust that long-recognized boundaries are accurate.<o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Mutual Acquiescence<o:p></o:p></span></b></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">In a lawsuit about boundary by acquiescence,
one party will almost certainly argue that he never agreed to the marked
boundary. In many circumstances, an
expressed acknowledgment with positive evidence is necessary to a legal claim. However, mutual acquiescence in a boundary by
acquiescence claim can be established if “</span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">there
was no indication in the record that [the landowner or] any predecessor in
interest behaved in a fashion inconsistent with the belief that the fence line [or
other marking] was the boundary.” <i>RHN
Corp. v. Veibell</i>, 2004 UT 60, ¶ 26 (Utah 2004). Mutual acquiescence can be presumed unless a
landowner takes an affirmative step to protect his boundary.<o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">Long Period of Time</span></b><b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p></o:p></span></b></div>
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<span style="font-family: Times New Roman, serif;"><span style="font-size: 12pt;">The requirement that mutual acquiescence
be for a long period of time has been interpreted in Utah to mean at least
twenty years. See </span></span><i style="font-family: 'Times New Roman', serif; font-size: 12pt;">Jacobs v. Hafen,</i><span style="font-family: Times New Roman, serif;"><span style="font-size: 12pt;"> 917 P.2d 1078, 1080 (Utah 1996); also
see </span></span><i style="font-family: 'Times New Roman', serif; font-size: 12pt;">Hobson v. Panguitch Lake Corp.,</i><span style="font-family: Times New Roman, serif;"><span style="font-size: 12pt;"> 530 P.2d 792, 795 (Utah 1975). Other legal theories, such as adverse
possession, have shorter time period requirements. If a boundary has been marked for less than
20 years, then a boundary by acquiescence cause of action will not succeed, but
another legal theory may still allow the boundary to be changed. Additionally, the legal standard of "at least 20 years" does not mean that 20 years is </span>automatically<span style="font-size: 12pt;"> long enough to support a boundary by </span>acquiescence<span style="font-size: 12pt;"> claim.<o:p></o:p></span></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">While 20 years or more may seem like an unreasonably
long period of time, this length helps boundary by acquiescence remain as a
sword for and not a shield against justice.
Without a length requirement, an aggressive neighbor could more easily
abuse a timid neighbor with encroaching construction. Conversely, if boundary by acquiescence was never
recognized, then a court would be left to undo long-accepted boundaries, sometimes
with considerable improvements over the boundaries and even when the original neighbors
may no longer be available to explain why the particular boundary was
recognized.<o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">Reformation
of Deed<o:p></o:p></span></b></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";"> A
successful boundary by acquiescence claim generally indicates that the deeds
under which each neighbor acquired his real property interest are inaccurate. The court will therefore reform those deeds
based on the mutual mistake in the legal descriptions. See <i>RHN
Corp. v. Veibell</i>, 2004 UT 60, ¶ 35 (Utah 2004). “Reformation of a deed” basically requires the
court to rewrite the deed to indicate the actual intentions of the parties. <o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">“Reformation of a deed is a
proceeding in equity.” <i>Hottinger v. Jensen,</i> 684 P.2d 1271, 1273 (Utah
1984). Because reformation requires
equity, the door may be open for a third-party, such as a lender, to intervene and
argue against boundary by acquiescence if the reformation would substantially impair
that third-party’s rights (although a lender could not have received more
rights than the borrower possessed).<o:p></o:p></span></div>
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<span style="background: white; font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">For more specific
information about this particular subject, please call my office at
801-691-7770 for a free consultation or see the following web pages:</span><span style="background: white; font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p></o:p></span></div>
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<span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Times New Roman', serif; font-size: 12pt;">Disclaimer: This blog is for general
information and educational purposes only. Nothing in this blog should be
construed as legal advice for any particular situation. The statements in
this blog may be generalized, contain speculation, be based on opinion, or be
made inaccurate by updates or clarifications to the law. No
attorney-client relationship is created by virtue of this blog.
</span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">To receive competent legal advice
for your situation, you should seek competent, licensed legal counsel in the
appropriate jurisdiction and practice area.<o:p></o:p></span></div>
Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com0tag:blogger.com,1999:blog-9125186053695642707.post-6089514577624354642016-03-30T13:50:00.000-07:002016-03-30T13:50:56.491-07:00Can the government give your land to a third-party?<div class="separator" style="clear: both; text-align: center;">
<a href="https://1.bp.blogspot.com/-lOFJ_mTIYDc/Vvw7eryS_FI/AAAAAAAABOo/NRuac83BF9MFy8JX58vfnI9N4-c-CWaIA/s1600/construction-site-1208769.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="214" src="https://1.bp.blogspot.com/-lOFJ_mTIYDc/Vvw7eryS_FI/AAAAAAAABOo/NRuac83BF9MFy8JX58vfnI9N4-c-CWaIA/s320/construction-site-1208769.jpg" width="320" /></a></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">The <i>Kelo</i>
Controversy<o:p></o:p></span></b></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"> Since the <i>Kelo</i> case, the issue of whether the government can condemn one
person’s property on behalf of a third-party has been a hot-button legal issue.
See <i><span style="background: white; color: #252525; mso-bidi-font-weight: bold;">Kelo
v. City of New London</span></i><span style="background: white; color: #252525;"><span style="text-align: start;">,<span class="apple-converted-space"> </span></span></span><span style="background: white;">545 U.S. 469<span class="apple-converted-space"><span style="color: #252525;"> </span></span><span style="color: #252525;">(2005)</span>. Proponents of the <i>Kelo </i>decision believe that enlarging the eminent power to allow the
government to take property and convey that property to a third-party empowers
the government to promote the general welfare and development of society. Opponents of the <i>Kelo </i>decision believe that this sort of government taking tramples
on individual liberty and functions as a Bizarro-Robin Hood – taking from the
poor and giving to the rich.<o:p></o:p></span></span></div>
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<b><span style="background: white; color: #252525; font-family: "Times New Roman",serif; font-size: 12.0pt;">Utah’s Third-Party Eminent Domain Laws<o:p></o:p></span></b></div>
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<span style="background: white; color: #252525; font-family: "Times New Roman",serif; font-size: 12.0pt;"> Several
states, including Utah, have weighed in on the issues posed by <i>Kelo</i> with new statutes and case law. Utah
passed a new eminent domain bill with specific requirements that must be
followed to exercise eminent domain powers.
See <i>Utah Code §78B-6-501 et seq</i>. Also, Utah courts have come down on the side
of requiring the government to maintain control of any property condemned
through eminent domain.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">There are two Utah cases that show how
much control must be maintained by the condemning entity. In the first case, Provo City wanted to build
a road across unincorporated land, but this land was not within Provo (Note: eminent
domain powers in regards to condemning boundaries outside of a city’s limits have
subsequently been enlarged). After the courts determined that Provo City could
not use eminent domain to seize this land, Provo City entered into a deal with
Utah County by which Utah County would condemn the property, Provo City would pay
for the road’s construction, and Utah County would own the property. The landowner challenged the condemnation
with an argument that Utah County cannot use eminent domain on behalf of Provo
City. The Utah Supreme Court ruled that
neither Utah County nor Provo City acted outside of its authority and that the
land was legitimately taken for the public use of building a road. The fact
that Provo City wanted and paid for the road was of no importance, so long as Utah
County took and maintained control over the condemned property. <i>Utah
County v. Ivie</i>, 2006 UT 33 (Utah 2006).<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">In the second case, Salt Lake City needed
to acquire a piece of land owned by Rocky Mountain Power. Salt Lake City was concerned about whether it
could condemn a piece of property already set aside for public use, so Salt
Lake City entered into a deal in which it would condemn another piece of
property and trade the new property to Rocky Mountain Power in exchange for the
piece of land currently owned by Rocky Mountain Power. In this case, the Utah Supreme Court
determined that Salt Lake City was acting outside of its eminent domain
powers. Salt Lake City would not
directly own the condemned property, develop the condemned property, and directly
have a public use for the property (even though Rocky Mountain Power would provide
a public use for the property). In order
to exercise eminent domain authority, the condemning government must actually
be the party taking and controlling the seized property. See <i><span style="background: white;">Salt Lake City Corp. v. Evans Development
Group, LLC</span></i></span><span style="background: white;"><span style="text-align: start;">, 2016 UT 15</span></span>
(Utah 2016).<o:p></o:p></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Potential for
Future Eminent Domain Issues<o:p></o:p></span></b></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt;">While the
recent <i>Evans Development Group</i>
decision curtails the ability of the government to take property on behalf of a
third-party, the door is still open for creative government officials to try to
structure deals within the guidance provided by the court. Though the <i>Kelo</i> decision favors broad government powers under the United State
Constitution, Utah’s eminent domain statutes still raise substantial hurdles to
overcome before the government can condemn property for a third-party.<o:p></o:p></span></div>
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<br /></div>
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<span style="background: white; font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">For more specific
information about this particular subject, please call my office at
801-691-7770 for a free consultation or see the following web pages:</span><span style="background: white; font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p></o:p></span></div>
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</span></span><!--[endif]--><span style="color: #333333; font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">Easements: <a href="http://whitingjardine.com/practice_areas.php?part=easements">http://whitingjardine.com/practice_areas.php?part=easements</a><o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="color: #333333; font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">5.<span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="color: #333333; font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">Quiet Title: <a href="http://whitingjardine.com/practice_areas.php?part=quiet_title">http://whitingjardine.com/practice_areas.php?part=quiet_title</a><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.7pt; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<br /></div>
<span style="background: white; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">Disclaimer: This blog
is for general information and educational purposes only. Nothing in this
blog should be construed as legal advice for any particular situation.
The statements in this blog may be generalized, contain speculation, be
based on opinion, or be made inaccurate by updates or clarifications
to the law. No attorney-client relationship is created
by virtue of this blog. </span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-US;">To receive competent legal advice for your situation,
you should seek competent, licensed legal counsel in the appropriate
jurisdiction and practice area.</span>Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com0tag:blogger.com,1999:blog-9125186053695642707.post-6069242346224182442016-03-21T14:55:00.002-07:002016-03-21T14:57:18.462-07:00How can an out-of-state person defend himself in a Utah court?<div class="MsoNormal" style="text-align: justify;">
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<b><a href="https://2.bp.blogspot.com/-wED6PGgT0zA/VvBs2Oxk83I/AAAAAAAABNk/QYHU2pyvDMAgH0yejICWNyQIojqw8wlVQ/s1600/southern-utah-2-1387105.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em; text-align: center;"><img border="0" height="240" src="https://2.bp.blogspot.com/-wED6PGgT0zA/VvBs2Oxk83I/AAAAAAAABNk/QYHU2pyvDMAgH0yejICWNyQIojqw8wlVQ/s320/southern-utah-2-1387105.jpg" width="320" /></a></b></div>
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<b><b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"><br /></span></b></b></div>
<b>Utah
Law on Court Appearances Generally</b><br />
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"><br /></span></b></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"> </span></b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;">In order to
participate in the legal process, a party must attend the hearings in front of
the court. A party may choose to either
attend personally or to have an attorney attend on behalf on that person. An entity that is not a natural person, such as a limited liability company, a corporation, or a real estate trust, is unable to attend personally and must have an attorney appear on its behalf
(except in very narrow circumstances). </span></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"><br /></span></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;">Having
a Friend or Family Member Appear<o:p></o:p></span></b></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"><br /></span></b></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"> </span></b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;">Out of state
parties sometimes request that friends or family appear on their behalf. Appearing on behalf of another person in
court is generally considered to be the practice of law. <span class="apple-converted-space"><span style="background: white; color: #222222;"> With limited exceptions, </span></span><span style="background: white; color: #222222;"> a
non-attorney “individual may not practice law or assume to act or hold himself
or herself out to the public as an individual qualified to practice
law[.]” <i>Utah Code §78A-9-103(1)</i>. The
appearance by a family or friend on a party’s behalf could very likely be
treated as a non-appearance by the party.
Also, having a non-attorney appear on a party’s behalf could
theoretically get the appearing person in a legal predicament for practicing
law without a license (though I have never personally seen the appearing person
receive more than a stern rebuke).<o:p></o:p></span></span></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"><span style="background: white; color: #222222;"><br /></span></span></div>
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<b><span style="background: white; color: #222222; font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;">Appearing through Electronic Means<o:p></o:p></span></b></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"> "In the judge's discretion, any hearing may be conducted
using telephone or video conferencing.”<span class="apple-converted-space">
<i>Rules of Judicial Administration 4-106(1)</i>. Through a motion, an out-of-state party may
petition the court to appear via telephone or video conference. Some judges are more open to this method of
appearance than others.</span><span class="apple-converted-space"> The court’s
discretion should factor in that the rules should “</span>be liberally construed and applied to achieve the just,
speedy, and inexpensive determination of every action.” <i>Utah Rules of Civil Procedure 1</i>.
Allowing the a party to appear electronically weighs the difficulties
and costs imposed on out-of-state parties with the disruption to the
proceedings caused by one party not being physically present. Judges have broad discretion on how to conduct hearings and trials, so whether or not a party would be allowed to appear by electronic means would largely depend upon the judge's preferences.<o:p></o:p></span></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;">Conclusion<o:p></o:p></span></b></div>
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<br />
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"> For
an out-of-state party, having an attorney appear on its behalf can avoid most
issues. If hiring an attorney is not possible,
the party may petition the court to appear via electronic means, but the party
cannot assume that the court will grant that request. An out-of-state party may be required to
appear in person.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="background: white; line-height: 15.6pt; text-indent: .5in;">
<span style="font-family: "times new roman" , serif; font-size: 12pt;">For
more specific information about this particular subject, please call my office
at 801-691-7770 for a free consultation or see the following web pages:</span></div>
<div class="MsoNormal" style="background: white; line-height: 15.6pt; text-indent: .5in;">
<span style="font-family: "times new roman" , serif; font-size: 12pt;"><br /></span></div>
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<span style="font-family: "times new roman" , serif; font-size: 12pt; line-height: 15.6pt; text-indent: -0.25in;">Whiting &
Jardine, LLC Home Page: </span><span style="color: #4472c4; font-family: "times new roman" , serif; font-size: 12pt; line-height: 15.6pt; text-indent: -0.25in;"><a href="http://www.whitingjardine.com/" style="line-height: 15.6pt; text-indent: -0.25in;">www.WhitingJardine.com</a></span></div>
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<span style="color: #333333; font-family: "times new roman" , serif; font-size: 12pt; line-height: 15.6pt; text-indent: -0.25in;"><span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal; line-height: normal;"> </span></span><span style="font-family: "times new roman" , serif; font-size: 12pt; line-height: 15.6pt; text-indent: -0.25in;">Litigation:<span class="apple-converted-space"><span style="color: #333333;"> </span></span></span><span style="font-family: "times new roman" , serif; font-size: 12pt; line-height: 15.6pt; text-indent: -0.25in;"><a href="http://whitingjardine.com/services.php?part=litigation" style="line-height: 15.6pt; text-indent: -0.25in;">http://whitingjardine.com/services.php?part=litigation</a></span></div>
<div class="MsoNormal" style="background: white; line-height: 15.6pt; text-indent: .5in;">
Appeals: <a href="http://whitingjardine.com/services.php?part=appeals">http://whitingjardine.com/services.php?part=appeals</a></div>
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</div>
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<span style="font-family: "times new roman" , serif; font-size: 12pt;">Disclaimer:
This blog is for general information and educational purposes only.
Nothing in this blog should be construed as legal advice for any
particular situation. The statements in this blog may be generalized,
contain speculation, be based on opinion, or be made inaccurate by
updates or clarifications to the law. No
attorney-client relationship is created by virtue of this blog.
To receive competent legal advice for your situation, you should seek
competent, licensed legal counsel in the appropriate jurisdiction and practice
area.</span><span style="font-family: "times new roman" , serif; font-size: 12.0pt;"><o:p></o:p></span></div>
Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com0tag:blogger.com,1999:blog-9125186053695642707.post-47849959812917814202016-02-01T15:25:00.001-08:002016-02-01T15:26:30.645-08:00Can an unlicensed contractor collect money for its work?<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-I2IvsPDRv5U/Vq_pMCAN9sI/AAAAAAAABH8/U-XhW2gyJnE/s1600/Construction%2BLaw.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="http://2.bp.blogspot.com/-I2IvsPDRv5U/Vq_pMCAN9sI/AAAAAAAABH8/U-XhW2gyJnE/s320/Construction%2BLaw.jpg" width="320" /></a></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Recovery
Generally Barred for Unlicensed Contractors<o:p></o:p></span></b></div>
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<br /></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt;">In
Utah, “[n]o contractor may...commence or maintain any action...for collection
of compensation for performing any act for which a license is required...without
alleging and proving that he [or she] was a properly licensed contractor when
the contract sued upon was entered into, and when the alleged cause of action
arose.” <i>Utah Code Ann. § 58–55–604</i>. An unlicensed contractor may receive
voluntary payments for the work he performs, but he generally is not allowed to
use the legal system to compel payment.
This statutory bar against suing for payment is a codification of prior
common law. It extends to all causes of
action that could be used to try to collect, including quantum meruit claims
and lien foreclosure actions. <o:p></o:p></span></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Purposes
of Licensing<o:p></o:p></span></b></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt;">“Licenses
are required basically for one of two purposes: to protect the public against
fraud, incompetence, illegality, or irresponsibility; or to solely or primarily
raise revenue.” <i>Fillmore Products, Inc. v. W. States Paving, Inc.</i>, 561 P.2d 687,
689 (Utah 1977). According to Utah
courts, unqualified contractors place the property, financial well-being, and
even the lives of the public in peril. The requirement of a contractor to be
licensed exists to protect the public. The prohibition of unlicensed
contractors from suing to collect payment is meant to prevent an unlicensed contractor
from illegal providing services and adds to the “other penalties imposed
against him expressly by statute including criminal sanctions.” <i>Id</i>. <o:p></o:p></span></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Exceptions
Allowing Recovery<o:p></o:p></span></b></div>
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<br /></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Prohibiting an unlicensed contractor
who provided good work from getting paid is a harsh sanction. Because it is so harsh, Utah courts have
recognized “common law exceptions to the general rule of non-recovery.” <i>Govert
Copier Painting v. Van Leeuwen,</i> 801 P.2d 163, 169 (Utah Ct.App.1990). “The Utah Supreme Court has allowed an
unlicensed contractor to recover “from one who is otherwise protected from the
harm the licensing requirements were designed to prevent[.]” <i>Govert Copier Painting v. Van Leeuwen</i>,
801 P.2d 163, 170 (Utah Ct. App. 1990) “In order to recover on its contract
claim, [an unlicensed contractor] must demonstrate that despite its failure to
have a contractor's license, the purpose of the licensing statute was met—the
protection of the public.” <i>Id.</i>
Presently, Utah appellate courts have recognized four circumstances in
which an unlicensed contractor may sue to collect payment:<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpFirst" style="margin: 0in 0in 12pt 1in; text-align: justify; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">1.<span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">“First, unlicensed contractors have
been allowed to recover when the party for whom the work is to be done
possesses skill or expertise in the field…<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 12pt 1in; text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 12pt 1in; text-align: justify; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">2.<span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Second, an unlicensed contractor may
recover if the work it performed was supervised by a licensed contractor…<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="margin: 0in 0in 12pt 1in; text-align: justify; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">3.<span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Third, if the reason a contractor
fails to obtain proper licensure is minor and does not undermine its ability to
perform its work, the unlicensed contractor may recover…<o:p></o:p></span></div>
<div class="MsoListParagraphCxSpMiddle" style="text-align: justify;">
<br /></div>
<div class="MsoListParagraphCxSpLast" style="margin: 0in 0in 12pt 1in; text-align: justify; text-indent: -0.25in;">
<!--[if !supportLists]--><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">4.<span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal;">
</span></span><!--[endif]--><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Finally, courts have considered
whether the contracting party relied on the subcontractor's representations
that he was properly licensed and whether the subcontractor has posted a
performance bond.” <i>A.K. & R. Whipple Plumbing & Heating v. Aspen Const.</i>, 1999
UT App 87, ¶¶ 13-20, 977 P.2d 518, 522-24<o:p></o:p></span></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Other circumstances may allow an
unlicensed contractor to sue to collect payment. For example, other jurisdiction have dealt
with the issue of persons who specifically hire unlicensed contractors with no
intention of ever paying the unlicensed contractors. For an exception to apply to the general rule
of non-recovery, it is not enough for a contractor to show that he provided good
work, even if he disclosed that he was not licensed. The contractor must demonstrate that the public
was protected against possible the dangers of hiring an unlicensed contractor.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify; text-indent: .5in;">
<span style="background: white; font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;">As always, if you have any questions about your situation,
you are welcome to contact one of Whiting & Jardine’s real estate lawyers
for legal advice.<o:p></o:p></span></div>
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<span style="background: white; font-family: "times new roman" , serif; font-size: 12.0pt; line-height: 107%;"><br /></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt; text-indent: 0.5in;">
<span style="background: white; font-family: "times new roman" , serif; font-size: 12.0pt;">For more specific
information about this particular subject, please call my office at
801-691-7770 for a free consultation or see the following web pages: </span><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;"><br />
<!--[if !supportLineBreakNewLine]--><br />
<!--[endif]--></span><span style="font-family: "times new roman" , serif; font-size: 12.0pt;"><o:p></o:p></span></div>
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<!--[if !supportLists]--><span class="MsoHyperlink"><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12pt;">1.<span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span></span><!--[endif]--><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;">Whiting
& Jardine, LLC Home Page: </span><a href="http://www.whitingjardine.com/"><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">www.WhitingJardine.com</span></a><span class="MsoHyperlink"><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12pt;"><o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.7pt; margin-bottom: .0001pt; margin: 0in; mso-list: l0 level1 lfo1; tab-stops: list .5in; text-align: justify; text-indent: 0in;">
<!--[if !supportLists]--><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;">2.<span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;">Construction Law: <a href="http://whitingjardine.com/practice_areas.php?part=construction">http://whitingjardine.com/practice_areas.php?part=construction</a><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 14.7pt; margin-bottom: .0001pt; margin: 0in; mso-list: l0 level1 lfo1; tab-stops: list .5in; text-align: justify; text-indent: 0in;">
<!--[if !supportLists]--><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;">3.<span style="font-family: "times new roman"; font-size: 7pt; font-stretch: normal; line-height: normal;">
</span></span><!--[endif]--><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;">Collections: </span><a href="http://whitingjardine.com/practice_areas.php?part=collections"><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">http://whitingjardine.com/practice_areas.php?part=collections</span></a><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;"><o:p></o:p></span></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Disclaimer: This blog is for general information and
educational purposes only. Nothing in this blog should be construed as
legal advice for any particular situation. The statements in this blog
may be generalized, contain speculation, be based on opinion, or be
made inaccurate by updates or clarifications to the law. No
attorney-client relationship is created by virtue of this blog.
To receive competent legal advice for your situation, you should seek
competent, licensed legal counsel in the appropriate jurisdiction and practice
area.</span></div>
Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com2tag:blogger.com,1999:blog-9125186053695642707.post-55311786974278177772016-01-18T18:16:00.002-08:002016-01-18T18:16:43.376-08:00Can I be defrauded because someone failed to disclose information?<div class="separator" style="clear: both; text-align: center;">
<a href="http://1.bp.blogspot.com/-h9P-fqWdePs/Vp2cdsNNJTI/AAAAAAAABHU/VPAHbpXe2lI/s1600/tumblr_nipztplLWi1tkairwo1_1280.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="http://1.bp.blogspot.com/-h9P-fqWdePs/Vp2cdsNNJTI/AAAAAAAABHU/VPAHbpXe2lI/s320/tumblr_nipztplLWi1tkairwo1_1280.jpg" width="320" /></a></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; text-transform: uppercase;">Can I Be Defrauded
because someone failed to disclose information?<o:p></o:p></span></b></div>
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<span class="l"><b><span style="background: white; border: none windowtext 1.0pt; color: windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">Utah Disclosure Law Generally<o:p></o:p></span></b></span></div>
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<span class="l"><span style="background: white; border: none windowtext 1.0pt; color: windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">In general, there is no liability for not
disclosing information to another party.
People often believe they have been defrauded when information has not
been disclosed, but the term “fraud” in law has a different meaning than its
colloquial use and generally requires an affirmative misrepresentation. “A person who possesses important, even
vital, information of interest to another has no legal duty to communicate the
information where no relationship between the parties exists.” </span></span><i><span style="background: white;">Yazd v. Woodside Homes Corp.,</span></i><span class="apple-converted-space"><span style="background: white;"> </span></span><span style="background: white;">2006 UT 47, ¶17 (Utah 2006). </span><span class="l"><span style="background: white; border: none windowtext 1.0pt; color: windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">Simply failing to disclose information is not normally enough
to create a cause of action. <o:p></o:p></span></span></div>
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<span class="l"><span style="background: white; border: none windowtext 1.0pt; color: windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">However, there are some important exceptions to
this general rule. For example, a person
may be sued for fraudulent non-disclosure, for breach of a fiduciary duty to
disclose, or to reform a contract based on a unilateral mistake.<o:p></o:p></span></span></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Fraudulent Non-Disclosure<o:p></o:p></span></b></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt;">“To prevail on a claim [for] fraudulent
nondisclosure, a plaintiff must prove by clear and convincing evidence that (1)
the defendant had a legal<span class="apple-converted-space"> </span>duty<span class="apple-converted-space"> </span>to communicate information, (2) the
defendant<span class="apple-converted-space"> </span>knew<span class="apple-converted-space"> </span>of the
information he failed to disclose, and (3) the nondisclosed information was<span class="apple-converted-space"> </span>material.”
<i>See Anderson v. Kriser, </i>266 P.3d 819
(Utah 2011).<o:p></o:p></span></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt;">Information is said to be material if it is “of
such a nature that knowledge of the item would affect a person’s
decision-making[.]” <i>Black’s Law Dictionary pg. 998</i>.
Standards of materiality may
shift in different types of transactions, particularly if the standards are
based on regulations or statutes specific to a profession.<o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;">Who was required to make the disclosure?<o:p></o:p></span></b></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt;">For many fraudulent non-disclosure claims, the
first element requiring a duty to disclose is the most difficult hurdle to
overcome. </span><span class="l"><span style="background: white; border: none windowtext 1.0pt; font-family: "Times New Roman",serif; font-size: 12.0pt; mso-border-alt: none windowtext 0in; padding: 0in;">Different people
have different disclosures obligations, and understanding the obligation to
disclose is usually tied to determining the type of relationship that exists
between the parties. <o:p></o:p></span></span></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt;">In many fraudulent non-disclosure claims, the
non-disclosure is tied to a fiduciary duty to disclose (as well as to a breach
of fiduciary duty case of action). </span><span class="l"><span style="background: white; border: none windowtext 1.0pt; font-family: "Times New Roman",serif; font-size: 12.0pt; mso-border-alt: none windowtext 0in; padding: 0in;"> Fiduciaries, such as
lawyers and real estate agents, have the highest disclosure obligations. A fiduciary has a duty to pursue his client’s
best interests, which interests often require the disclosure of information.<o:p></o:p></span></span></div>
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<span class="l"><span style="background: white; border: none windowtext 1.0pt; color: windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">In a seller-purchaser relationship, the seller
only has the obligation to disclose information that is known to the seller and
which, for the buyer, is “</span></span><span style="background: white; color: #1e1e1e;">not discoverable by reasonable care</span><span class="l"><span style="background: white; border: none windowtext 1.0pt; color: windowtext; mso-border-alt: none windowtext 0in; padding: 0in;">.” <i>Mitchell v. Christensen</i>, 2001 UT 80, ¶11
(Utah 2001) [quoting <i>F</i></span></span><i><span style="background: white; color: #1e1e1e;">irst Security Bank of Utah v. Banberry
Development Corp.,</span></i><span class="apple-converted-space"><span style="background: white; color: #1e1e1e;"> </span></span><cites style="background-color: white; color: #1e1e1e; font-family: Merriweather, serif; font-size: 15.84px; line-height: 23.76px; text-indent: 0px;">786
P.2d 1326, 1331<span class="apple-converted-space"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;"> </span></span><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial;">(Utah 1990]</span><span class="l"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 1pt none windowtext; color: windowtext; padding: 0in;">. Even with this
higher standard, to prevent potential litigation, sellers of real estate are
encouraged to provide a broad disclosure form.<o:p></o:p></span></span></cites></div>
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<span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Times New Roman', serif; font-size: 12pt;">For
more specific information about this particular subject, please call my office
at 801-691-7770 for a free consultation or see the following web pages:<o:p></o:p></span></div>
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<span style="background: white; font-family: "Times New Roman",serif; font-size: 12.0pt;">Disclaimer: This blog is
for general information and educational purposes only. Nothing in this
blog should be construed as legal advice for any particular situation.
The statements in this blog may be generalized, contain speculation, be
based on opinion, or be made inaccurate by updates or clarifications
to the law. No attorney-client relationship is created
by virtue of this blog. To receive competent legal advice for your
situation, you should seek competent, licensed legal counsel in the appropriate
jurisdiction and practice area.</span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p></o:p></span></div>
Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com0tag:blogger.com,1999:blog-9125186053695642707.post-78152332566284154562015-07-23T17:13:00.002-07:002015-07-23T17:13:57.735-07:00Have I been defrauded?<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-SER01fmzeUg/VbGDICCTC7I/AAAAAAAAAMk/M2J5F7iIuYs/s1600/Negotiations%2B-%2BNo%2BLonger%2Bon%2BWebsite.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="200" src="http://4.bp.blogspot.com/-SER01fmzeUg/VbGDICCTC7I/AAAAAAAAAMk/M2J5F7iIuYs/s320/Negotiations%2B-%2BNo%2BLonger%2Bon%2BWebsite.jpg" width="320" /></a></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">Common
Definition of Fraud<o:p></o:p></span></b></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">Most
people view fraud as “an act of deceiving or misrepresenting<span class="apple-converted-space">.” See
http://www.merriam-webster.com/dictionary/fraud. This colloquial use of the
term “fraud” causes many people to believe that if someone said something that
is untrue, then that person has committed fraud. The term “fraud,” as a legal term, is much narrower
than this common understanding.</span><o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">Legal
Definition of Fraud<o:p></o:p></span></b></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;"><br /></span></b></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">In
order for fraud to exist legally, then the elements of a fraud cause of action
must exist. “<span style="background: white;">The elements of an action in deceit based on fraudulent
misrepresentation are: (1) a representation; (2) concerning a presently
existing material fact; (3) which was false; (4) which the representor either
(a) knew to be false, or (b) made recklessly, knowing that he had insufficient
knowledge upon which to base such representation; (5) for the purpose of
inducing the other party to act upon it; (6) that the other party, acting
reasonably and in ignorance of its falsity; (7) did in fact rely upon it; (8)
and was </span><span style="background: white;">thereby
induced to act; (9) to his injury and damage.” Dugan v. Jones, 615 P.2d 1239
(Utah 1980). For fraud to exist legally,
it is not enough for a statement to be false.
There must be both an intent to deceive and damages cause by reliance on
the false statement.<o:p></o:p></span></span></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 107%;">Even if all the elements of fraud are not met,
there may be alternative but similar legal theories that could be proven, such
as claims for negligent misrepresentation or fraudulent non-disclosure. <o:p></o:p></span></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">Proving
Fraud<o:p></o:p></span></b></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">“In
all averments of fraud or mistake, the circumstances constituting fraud or
mistake shall be stated with particularity.” <i>Utah Rules of Civil Procedure 9(b)</i>.
For fraud to be properly alleged with particularity, Plaintiff “<span style="background: white;">must state with particularity the circumstances
supporting each element of fraud.” <span class="l"><i><span style="border: none windowtext 1.0pt; mso-border-alt: none windowtext 0in; padding: 0in;">Otsuka Electronics v. Imaging Specialists, et al.</span></i><span style="border: none windowtext 1.0pt; mso-border-alt: none windowtext 0in; padding: 0in;">, </span></span></span><span style="border: none windowtext 1.0pt; mso-border-alt: none windowtext 0in; padding: 0in;">937 P.2d 1274, ¶24 (Utah Ct.
App. 1997). Sometimes, a plaintiff may
not know whether each element of fraud can be proven at the time of a lawsuit
is filed. If he has a good faith basis
to believe that an element has been met, he can allege the facts that would
satisfy each element “upon information and belief.”<o:p></o:p></span></span></div>
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<span style="border: none windowtext 1.0pt; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-border-alt: none windowtext 0in; padding: 0in;">Most
parties do not simply admit to committing fraud. Extrinsic evidence may be used to prove each
element. For example, while a defendant
may claim not to have known that a representation was false, extrinsic evidence
can refute the defendant’s claim.<o:p></o:p></span></div>
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<span style="border: none windowtext 1.0pt; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-border-alt: none windowtext 0in; padding: 0in;"><br /></span></div>
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<span style="border: none windowtext 1.0pt; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-border-alt: none windowtext 0in; padding: 0in;">Many fraud cases involve real estate deals. The language in the related contracts and deeds is often the best indication of whether fraud occurred.</span></div>
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more specific information about this particular subject, please call my office
at 801-691-7770 for a free consultation or see the following web pages:<o:p></o:p></span></div>
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Negotiation and Drafting:<span style="color: #333333;"> <a href="http://whitingjardine.com/practice_areas.php?part=contract">http://whitingjardine.com/practice_areas.php?part=contract</a><o:p></o:p></span></span></div>
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<span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Times New Roman', serif; font-size: 12pt;">Disclaimer:
This blog is for general information and educational purposes only.
Nothing in this blog should be construed as legal advice for any
particular situation. The statements in this blog may be generalized,
contain speculation, be based on opinion, or be made inaccurate by
updates or clarifications to the law. No
attorney-client relationship is created by virtue of this blog.
To receive competent legal advice for your situation, you should seek
competent, licensed legal counsel in the appropriate jurisdiction and practice
area.</span><span style="font-family: "Times New Roman",serif; font-size: 12.0pt;"><o:p></o:p></span></div>
Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com0tag:blogger.com,1999:blog-9125186053695642707.post-56550676176502597322015-07-15T10:59:00.001-07:002016-02-01T15:29:20.335-08:00Can I acquire real property through a constructive trust?<div class="separator" style="clear: both; text-align: center;">
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<a href="http://2.bp.blogspot.com/-Peo-oAECIuk/Vq_qRkcTX3I/AAAAAAAABII/mVB08spAlc8/s1600/Contract%2BNegotiation%2Band%2BDrafting.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="http://2.bp.blogspot.com/-Peo-oAECIuk/Vq_qRkcTX3I/AAAAAAAABII/mVB08spAlc8/s320/Contract%2BNegotiation%2Band%2BDrafting.jpg" width="320" /></a></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">What is a Constructive Trust?<o:p></o:p></span></b></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt;">A constructive trust is an implied trust
created by a court when </span><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">the transferor of land intends for
the transfer to benefit someone other than the transferor or the transferee</span><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">. “It is not a ‘trust’ according to the common
usage of that term. Rather, it requires
one party to transfer property to the party who was intended to benefit from
the property. <span style="background: white; color: #252525;">A constructive trust
is an equitable remedy which arises by operation of law to prevent unjust
enrichment.” </span><i>Ashton v. Ashton</i>,
733 P.2d 147, 150 (Utah 1987).<o:p></o:p></span></div>
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<b><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Circumstances
Justifying a Constructive Trust<o:p></o:p></span></b></div>
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The Utah Supreme Court has indicated that constructive
trusts are appropriate (1) in order to give effect to oral trusts which have
not been reduced to a writing and may not survive the statute of frauds, and
(2) when a party has an equitable duty to convey land to another. The Utah
Supreme Court also provided the following instructions about creating
constructive trusts:<o:p></o:p></div>
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“We have recognized that constructive trusts may be imposed
in the circumstances set forth in section 45 of the Restatement (Second) of
Trusts (the “Restatement of Trusts”).<o:p></o:p></div>
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<br /></div>
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This section applies:<o:p></o:p></div>
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<!--[if !supportLists]-->(1)<span style="font-size: 7pt; font-stretch: normal;"> </span><!--[endif]-->Where the owner of an
interest in land transfers it inter vivos to another in trust for a third
person, but no memorandum properly evidencing the intention to create a trust
is signed, as required by the Statute of Frauds, and the transferee refuses to
perform the trust, the transferee holds the interest upon a constructive trust
for the third person, if, but only if,<o:p></o:p></div>
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<br /></div>
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(a) the transferee by fraud, duress or undue influence
prevented the transferor from creating an enforceable interest in the third
person, or<o:p></o:p></div>
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(b) the transferee at the time of the transfer was in a
confidential relation to the transferor, or<o:p></o:p></div>
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(c) the transfer was made by the transferor in anticipation
of death.<o:p></o:p></div>
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In short, the imposition of a constructive trust under this
section of the Restatement of Trusts requires proof that the transferor of land
intended to create a trust and that one of the three identified circumstances
existed at the time of the transfer. And where proving this intent will be
contrary to an otherwise valid deed, the evidence of the trust must be clear
and convincing.” <i>Rawlings v. Rawlings, 240 P.3d 754, 763 (Utah 2010).</i> <o:p></o:p></div>
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<br /></div>
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Situations involving constructive trusts are often tied to
other issues such as contract reformation, the statute of frauds, and fiduciary
duty litigation. Constructive trusts are
complex. An attorney should be consulted
before trying to create a constructive trust.<o:p></o:p></div>
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<span style="background: white; font-family: "times new roman" , serif; font-size: 12.0pt;"> As always,
if you have any questions about your situation, you are welcome to contact one
of Whiting & Jardine’s real estate lawyers for legal advice.<o:p></o:p></span></div>
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<span style="background: white; font-family: "times new roman" , serif; font-size: 12.0pt;">For more specific
information about this particular subject, please call my office at
801-691-7770 for a free consultation or see the following web pages: </span><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;"><br />
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LLC Home Page: </span><a href="http://www.whitingjardine.com/"><span style="font-family: "times new roman" , serif; font-size: 12.0pt;">www.WhitingJardine.com</span></a><span style="color: #333333; font-family: "times new roman" , serif; font-size: 12.0pt;"><o:p></o:p></span></div>
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<span style="font-family: "times new roman" , serif; font-size: 12.0pt;">Disclaimer: This blog is for general information and
educational purposes only. Nothing in this blog should be construed as
legal advice for any particular situation. The statements in this blog
may be generalized, contain speculation, be based on opinion, or be
made inaccurate by updates or clarifications to the law. No
attorney-client relationship is created by virtue of this blog.
To receive competent legal advice for your situation, you should seek
competent, licensed legal counsel in the appropriate jurisdiction and practice
area.<o:p></o:p></span></div>
Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com0tag:blogger.com,1999:blog-9125186053695642707.post-32102566284881976462015-07-10T10:42:00.002-07:002015-07-10T10:42:28.025-07:00How does the one action rule affect my foreclosure?<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-PdlDOgLWlzI/VaAD4VPuWmI/AAAAAAAAALU/-U2iMw99IsA/s1600/Homeowners%2BAssociations.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="http://3.bp.blogspot.com/-PdlDOgLWlzI/VaAD4VPuWmI/AAAAAAAAALU/-U2iMw99IsA/s320/Homeowners%2BAssociations.jpg" width="320" /></a></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">The
One Action Rule<o:p></o:p></span></b></div>
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<b><span style="font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;"><br /></span></b></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 107%;">Both real estate and lending are highly-regulated
industries. It should be no surprise
that there are a plethora of laws about the ways lender’s seize real
estate. Utah has restricted a lender’s
options to recover debt through the one action rule (which is sometimes
referred to as the “single-action rule”).<o:p></o:p></span></div>
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<b><span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 107%;">Requirement to Seize Real Estate First<o:p></o:p></span></b></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 107%;">The one action rule states, “</span><span style="background: white; color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">There is only one action for the recovery of
any debt, or the enforcement of any right, secured solely by mortgage upon real
estate and that action shall be in accordance with the provisions of this
chapter.” <i>Utah Code §78B-6-901</i>. </span><span style="color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-fareast-font-family: "Times New Roman";">“The purpose of the
statute was to eliminate harassment of debtors and multiple litigation which
sometimes occurred under the common-law rule which allowed a creditor to
foreclose and sell the land and sue on the note.” <i>Lockhart
C. v. Equitable Realty, Inc.</i>, 657 P.2d 1333, 1334 (Utah 1983). “Under this and the following section there
is no personal liability on the part of mortgagor until after foreclosure or
sale of the security and then only for the deficiency then remaining
unpaid." <i>Id</i> at 1335.<o:p></o:p></span></div>
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<span style="color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-fareast-font-family: "Times New Roman";"><br /></span></div>
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<span style="color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-fareast-font-family: "Times New Roman";">In essence, if a
lender is secured solely by real estate, then that lender must foreclose on the
real estate first before seeking personal liability from the borrower. This statute prevents double recovery. A lender does not have the option of
collecting all the money it can from the borrower and then seizing the
collateral through a foreclosure. A lender must take what it can get out of the
real estate and may only turn to the borrower for recovery if the foreclosed-upon
security was not enough to cover the debt.<o:p></o:p></span></div>
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<span style="color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-fareast-font-family: "Times New Roman";"><br /></span></div>
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<b><span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 107%;">Limited Applicability<o:p></o:p></span></b></div>
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<b><span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 107%;"><br /></span></b></div>
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<span style="background: white; font-family: 'Times New Roman', serif; font-size: 12pt; line-height: 107%;">The one action rule states that it only applies
to debt “</span><span style="background: white; color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">secured solely by
mortgage upon real estate[.]” <i>Utah Code §78B-6-901</i>. It does not apply to debtors secured all or
in part by personal property, but lenders should be aware of the policy behind
the one action rule even when personal property is involved. The one action rule does apply to debts
secured by multiple parcels of real estate.<o:p></o:p></span></div>
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<b><span style="background: white; color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">Contracting around the One Action Rule</span></b><b><span style="color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></b></div>
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<span style="background: white; color: #222222; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;">“No private or special law shall be enacted
where a general law can be applicable.” <i>Utah
Constitution, Article VI, Section 26</i>.
Though both lenders and borrowers sometimes want to contract around the
one-action rule, this option is not available.
If public law did not trump private law, then lenders could regularly
contract borrowers out of the protections provided by the law. If a borrower and lender enter into an
agreement to get around the one-action rule, then several interesting legal
questions would be raised about waiver, estoppel, and modification. Neither the lender nor the borrower would
likely want to be the legal guinea pig to test out attorneys’ theories on these
issues.<o:p></o:p></span></div>
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<span style="background: white; font-family: "Times New Roman",serif; font-size: 12.0pt; line-height: 107%;"> As always, if you have any questions
about your situation, you are welcome to contact one of Whiting & Jardine’s
real estate lawyers for legal advice.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman",serif; font-size: 12.0pt; mso-fareast-font-family: "Times New Roman";">Disclaimer: This blog is for general information and
educational purposes only. Nothing in this blog should be construed as
legal advice for any particular situation. The statements in this blog
may be generalized, contain speculation, be based on opinion, or be
made inaccurate by updates or clarifications to the law. No
attorney-client relationship is created by virtue of this blog.
To receive competent legal advice for your situation, you should seek competent,
licensed legal counsel in the appropriate jurisdiction and practice area.<o:p></o:p></span></div>
Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com1tag:blogger.com,1999:blog-9125186053695642707.post-73289107997367074242015-07-09T17:06:00.001-07:002015-07-09T17:06:35.815-07:00What happens when someone conveys real estate that they do not yet own?<div class="separator" style="clear: both; text-align: center;">
<a href="http://3.bp.blogspot.com/-6VlYQKw5aH8/VZ8MedXQ0fI/AAAAAAAAAKs/YSjb0HG1yWk/s1600/Experienced%2BCounsel%2B-%2BIcon.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="213" src="http://3.bp.blogspot.com/-6VlYQKw5aH8/VZ8MedXQ0fI/AAAAAAAAAKs/YSjb0HG1yWk/s320/Experienced%2BCounsel%2B-%2BIcon.jpg" width="320" /></a></div>
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<b><span style="line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;">Utah
Real Estate Law for After-Acquired Title<o:p></o:p></span></span></b></div>
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<span style="background: white; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;">It is too common that people convey an interest
in real estate without actually having that interest or before actually having
that interest to convey. Usually, this mistake isn’t caused by malice or fraud,
but rather because people sometimes make mistakes while putting together real
estate deals in proximity to other transactions. </span></span></div>
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<b><span style="background: white; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;">General Rule <o:p></o:p></span></span></b></div>
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<span style="background: white; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;">“[I]t is a basic tenent of property law that [one] could
convey to [another] only what it then owned.”<span class="apple-converted-space"> </span><i>FDIC </i>at ¶19. Also see <i>Drazich v.
Lasson,</i><span class="apple-converted-space"> </span>964 P.2d 324, 327 (Utah
Ct.App.1998) (“One can only convey as much estate in land as one actually
has.”). Similar to the classic “Brooklyn
Bridge” scams, conveyed interests are generally void if there was no interest
to convey. While you would likely have
claims in contract and tort against the party who did not have the promised
interest (the “grantor”), your claims would not generally give a right to a
third-party’s property.</span></span></div>
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<b><span style="background: white; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;">Utah’s After-Acquired Title Statute<o:p></o:p></span></span></b></div>
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<span style="font-family: Times, Times New Roman, serif;"><b><span style="background: white; line-height: 107%;"> </span></b><span style="background: white; line-height: 107%;">Exceptions to the general rule exist when there
is a connection between the person who failed to convey an interest and the
property. Utah’s after-acquired property
statute provides:<o:p></o:p></span></span></div>
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<span style="background: white; color: #222222; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;">“If
any person conveys any real estate by conveyance purporting to convey the real
estate in fee simple absolute, and at the time of the conveyance the person
does not have the legal estate in the real estate, but afterwards acquires the legal
estate… the conveyance is as valid as if the legal estate had been in the
grantor at the time of the conveyance.” <i>Utah
Code §57-1-10(1)</i>.<o:p></o:p></span></span></div>
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<span style="background: white; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;"> Essentially, if a
person conveys a property that they don’t own but subsequently acquire that
property, then the original conveyance becomes valid after-the-fact. This after-acquired statute only applies to
fee simple conveyances, such as a common conveyances through a general warranty
deed. It does not apply to other
conveyances, such as trust deeds, liens, or quit-claim deeds. <o:p></o:p></span></span></div>
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<b><span style="background: white; color: #222222; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;">Equitable Interests<o:p></o:p></span></span></b></div>
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<span style="font-family: Times, Times New Roman, serif;"><b><span style="background: white; color: #222222; line-height: 107%;"> </span></b><span style="background: white; color: #222222; line-height: 107%;">Sometimes if the grantor does not have title to
the conveyed interest, the improper conveyance will give an equitable interest
to grantee, even though title was not effectively conveyed. </span><span style="line-height: 107%;">See <i>FDIC v. Taylor</i>, 267 P. 3d 949, ¶14 (Utah Ct. App. 2011) (“[T]rust
deeds in favor of [the lenders] were ineffective to convey title but,
nevertheless, created equitable liens against the Property.”). Whether an equitable interest has been
created is a fact intensive issue which would likely hinge on the effect to
innocent third-parties.<span style="background: white;"><o:p></o:p></span></span></span></div>
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<span style="line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<span style="background: white; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;"> As always, if you have
any questions about your situation, you are welcome to contact one of Whiting
& Jardine’s real estate lawyers for legal advice.</span></span><br />
<span style="background: white; line-height: 107%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span>
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<span style="font-family: Times, Times New Roman, serif;">Disclaimer: This blog is for general information and educational purposes only. Nothing in this blog should be construed as legal advice for any particular situation. The statements in this blog may be generalized, contain speculation, be based on opinion, or be made inaccurate by updates or clarifications to the law. No attorney-client relationship<span style="text-align: start;"> is created by virtue of this blog. To receive competent legal advice for your situation, you should seek competent, licensed legal counsel in the appropriate jurisdiction and practice area.</span></span></div>
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Stephen Whitinghttp://www.blogger.com/profile/09054003579913621750noreply@blogger.com0